Intertek Group (LSE: ITRK) saw its share price surge 6.2% in morning trading after the company delivered positive results for 2023 and expressed confidence in its future prospects.
The leading provider of assurance, inspection, and certification services reported a modest pre-tax profit rise of 0.6% to £422.3 million from £419.8 million in 2022. Revenue climbed 4.3% to £3.33 billion, exceeding analyst expectations and marking the highest like-for-like revenue growth (3.4%) in the past ten years.
Intertek attributed the strong performance to significant growth in its Corporate Assurance, Health & Safety, Industry & Infrastructure, and World of Energy segments, while Consumer Products experienced a more modest growth of 1.3%.
Chief Executive Andre Lacroix expressed optimism, stating, “Based on our positive momentum, we expect the group to deliver a robust performance in 2024 with mid-single digit like-for-like revenue growth at constant currency, margin progression and a strong cash flow performance.”
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Lacroix further commented on the company’s aim to reach its peak margin of 17.5% and beyond in the medium term, driven by revenue growth, disciplined management, and investments in high-growth, high-margin segments.
Reflecting this confidence, Intertek announced a 5.6% increase in its annual dividend to 111.7 pence per share, exceeding analyst forecasts, and pledged to raise its targeted dividend payout ratio to around 65% of earnings from 2024 onwards.
The company also reported exceeding its cost-saving target for 2023, delivering £13 million in savings compared to its initial expectation of £7-8 million. They anticipate a further £10 million cost reduction in 2024.
