14th Dec 2005 07:01
Intertek Group PLC14 December 2005 14 December 2005, 7am (UK) Intertek Group plc ("Intertek") Trading Statement Intertek, the global testing, inspection and certification company, todayreports on trading ahead of entering the close period for the financial year to31 December 2005. The preliminary results will be announced on Monday 6 March2006 and the close period commences on 6 January 2006. Labtest, the consumer goods division, continues to perform well despite thecompetitive environment in inspection and the second half impact of the Chinesetextile export quotas to Europe and the US reaching their limits in the summerof 2005. The operating margin for the second half is expected to be stable andsimilar to the first half of 2005. Labtest has strengthened its position inconsultancy and testing relating to the new European directive on therestriction of hazardous substances (RoHS). This and other services from Labtestwill drive strong performance next year and beyond. ETL SEMKO, the commercial and electrical consumer products division, continuesto perform very strongly in all regions with an expected acceleration of organicgrowth compared to last year. Asia, and especially China, is experiencing thefastest growth helped by the increasing acceptance of the ETL label by NorthAmerican retailers. Testing and certification in the Americas and Europe acrossall activities are showing good growth, with market share gains in some sectors.The operating margin is expected to be higher than last year despite theincremental cost of investments in the automotive and building products testingbusinesses in China and a new testing laboratory in India. Caleb Brett, the oil, chemical and agricultural division, is achieving excellentgrowth with an expected acceleration of organic growth compared to last year.The increasing provision of services to the upstream exploration industry isleading to higher growth potential and margins in Caleb Brett. The revenuegrowth of Analytical Services is particularly strong as a result of a steadyincrease in new business. This trend is expected to continue into 2006 followingthe recent acquisitions of Westport, Automotive Research and Lintec and the newoutsourcing agreement with Kodak. The trading conditions experienced by Caleb Brett in the second half of 2005were significantly impacted by Hurricanes Katrina and Rita and their aftermath.These effects include lost revenue due to diminished oil and gas production inthe Gulf of Mexico and it is currently expected that reported operating profitswill be reduced by approximately £2 million to £3 million as a result of thehurricanes. These estimates do not take into account any insurance recoveries,which while probable, are likely to take some time to process. FTS, the trade services division, is expected to report revenue ahead of lastyear despite a fall in monthly revenues from September onwards due to the endingof the Venezuela contract. The new Standards contract with Kenya will partlycompensate for the ending of the Venezuela contract and all costs ofdemobilising were included in the results for the half year 2005. Group Overall, revenues and underlying operating profit for 2005 are expected to comeclose to the top end of expectations. The cost of litigation related to old legal claims has been unusually high inthe second half of 2005. One claim in Caleb Brett, dating back to 1996, wascontested in court and unexpectedly resulted in an adverse judgment, which hasbeen appealed. Taking into account the impact of the hurricanes and the unexpected cost of theclaim, and excluding likely insurance recoveries, the reported operating profitis expected to come in towards the lower end of expectations. The three year decline of the US dollar against sterling has recently abated andthis should have a very minor but favourable effect on the reported results asapproximately 80% of the Group's earnings are in US dollar or currencies relatedto the US dollar. Wolfhart Hauser, Chief Executive, said "We are pleased with the underlyingperformance this year across the Group. By continuing to pursue the Group'sstrategy of creating added value for our customers through technical servicesthat support them in their global trade, Intertek aims to generate high organicgrowth rates. Acquisitions and greenfield investments will continue to be madeto support this strategy and the recent series of successful acquisitions andinvestments demonstrates Intertek's ability to carry this out." For further information, please contact Aston Swift, Treasurer and Investor Relations Telephone: +44 (0) 20 7396 3400 [email protected] Tim Lynch, Tulchan Communications Telephone: +44 (0) 20 7353 4200 [email protected] Corporate website: www.intertek.com High resolution images of Intertek Group plc businesses are available todownload, free of charge from www.vismedia.co.uk. ABOUT INTERTEKIntertek is a leading international testing, inspection and certificationorganisation, which assesses customers' products and commodities against a widerange of safety, regulatory, quality and performance standards and certifies themanagement systems of customers. Intertek has over 300 laboratories and over14,500 people around the world and is increasingly undertaking outsourcedtesting work for its customers. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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