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Intertek Group PLC (ITRK)
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Intertek raises margin outlook as reaps benefit from high growth M&A
(Alliance News) - 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 GBP547.8 million in 2024 from GBP507.2 million a year prior, or by 15% at constant currency.
Revenue increased 1.9% to GBP3.39 billion in 2024 from GBP3.33 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 GBP207 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 GBP350 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.
By Jeremy Cutler, Alliance News reporter
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