Intertek proves biggest gainer in the FTSE after revenue growth successes

SHARES in product-testing firm Intertek jumped by more than 11 per cent after it posted an improvement in underlying revenue growth and maintained full-year guidance.

Intertek, which tests anything from oil to children’s toys to check they comply with regulatory relevant standards, said underlying revenue grew 1.4 per cent to £1.06 billion, from £1.02bn, in the first-half of its financial year.

Chief executive Andre Lacroix noted a strong performance in its products-related business, particularly in consumer goods, electricals and commodities, which had helped offset challenging conditions in its oil and gas capital spending business.

Energy companies have been slashing investment budgets following a plunge in oil prices.

“This is obviously a situation that we cannot ignore. This is 10 per cent part of our earnings in total,” Mr Lacroix said.

“It is reasonable to believe that the [capital expenditure] reductions will continue in the next few months.

“We have to cycle through that time, and over time minerals and oil and gas will start growing,” he added.

Pre-tax profit rose to £139.1 million in the first half of its financial year, compared with £119.8m a year earlier.

Shares were up 274p at 2721p, making it the biggest gainer in the FTSE.

“There has been momentum on the organic growth as we have moved through the quarter and there has been a very strong margin performance,” said Numis analyst Steven Woolf.

“The results themselves are towards the top end of expectations so there’s an element of recovery on that side of things,” he added.

Analysts on average expect Intertek, where Scottish Enterprise’s chief executive Lena Wilson is on the board as a non-executive director, to post full-year pre-tax profit of around £297m.

Mr Lacroix said he still saw good opportunities around the world for the company and added: “We continue to invest in attractive growth areas organically and through acquisitions.”