You are here: Home - Investing - Experienced Investor - News -

Stock of the week: Intertek

Written by:
Helal Miah, investment research analyst at The Share Centre, picks Intertek as this week’s stock of the week.

This week’s stock of the week is Intertek, a business to business services company which has built itself into a giant in the sector through years of acquisitions and steady growth. Despite slow global economic growth, the group has been experiencing increased demand for its inspection and testing services from many different sectors. However, parts of the business in recent years have come under pressure due to the tough environment in the commodities sector.

Results in March reported a rise in profit to £393.3m on the back of an 8% increase in revenue to £2.77bn and the dividend for the year was 71.3 pence. The CEO stated that the group remains on track with its “good to great” plan. Trading in the first four months continued well with organic revenue growth 4% higher on a constant currency basis.

The global quality assurance industry is worth $250bn and it has attractive structural growth prospects driven by corporate risk management, global trade flows, demand for energy, expanding regulations, more complex sourcing and distribution networks.

In addition, consumers are increasingly seeking higher quality and sustainable products which have served to further bolster the group. In emerging economies, quality and safety standards are a long way behind. However, as countries such as China raise these standards, we should see further growth potential for Intertek.

We consider the company’s activities as being relatively defensive but still well positioned to gain market share. Its exposure to commodities and oil will add an element of volatility. However, its other services cover a wide group of sectors in the global economy as well as operating in many geographic regions.

It is an acquisitive company with a good track record on integrating acquired firms into current operations and so we continue with our ‘buy’ recommendation for investors seeking capital growth and willing to accept a medium level of risk.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Unfamiliar banks woo savers with top rates…is your money safe?

If you’ve been keeping an eye on the savings best buy tables, you’ll have noticed some unfamiliar names lu...

What the base rate rise means for you

The Bank of England has raised the base rate by 0.25% to 0.5% – following on from the increase from 0.1% to ...

How to get help with your energy bills

The rise in the energy price cap from April will mean millions of households will pay hundreds of pounds a yea...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week