Intertek raises margin outlook as reaps benefit from high growth M&A

Intertek Group PLC on Tuesday launched a new share buyback and increased its operating margin guidance as it expressed confidence in growth prospects.

In response, shares in Intertek rose 6.3% to 5,480.00 pence each in London on Tuesday morning. It was the best performing stock on the FTSE 100 which itself was down 0.4%.

The London-based assurance, inspection, product testing and certification company said pretax profit rose 8.0% to £547.8 million in 2024 from £507.2 million a year prior, or by 15% at constant currency.

Revenue increased 1.9% to £3.39 billion in 2024 from £3.33 billion in 2023, with like-for-like growth of 6.3% at constant currency.

Within this Consumer Products revenue rose 8.0%, Corporate Assurance 7.8%, Health and Safety 7.9%, Industry and Infrastructure 1.7%, and World of Energy 8.0% - all at constant currency.

Intertek said ‘value accretive’ acquisitions had contributed revenue of £207 million and margin of 25.1% in the year.

Overall, the operating margin improved to 17.4% in 2024 from 16.6% in 2023.

Chief Executive Andre Lacroix said acquisitions in ‘high growth and high margin’ segments are adding ‘real value’ to the Intertek portfolio.

‘We continue to see a steady pipeline of acquisition opportunities and we will remain disciplined to make sure we augment the unique strengths of Intertek’s business model with value accretive M&A,’ he added.

Lacroix noted the firm had achieved its medium-term margin target of 17.5% ‘faster than expected.’

As a result, and reflecting a robust growth outlook for 2025, Intertek raised that target to 18.5% or more.

For 2025, Intertek expects mid-single-digit percentage like-for-like revenue growth at constant currency.

Intertek said it confidence is reflected in plans for a share buyback and higher dividends.

It announced an initial £350 million share buyback to be completed during the current financial year.

The company also raised its final dividend per share by 39% to 102.6 pence from 74.0p, taking the total payout for 2024 to 212.7p per share, up 16%, from 183.4p a year prior.

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