The price of shares in FTSE 100 product testing specialist Intertek (LON:ITRK) climbed by 8.54% to 5,282p (as of 11:20 BST) despite reporting a 4.6% drop in revenues for the first four months of 2020. Management said that the company was well positioned to benefit from increased safety requirements in the workplace going forwards and had a strong balance sheet.
CEO André Lacroix commented: “Intertek’s high quality business model operates across multiple sectors of the economy and we have provided uninterrupted customer service to our 300,000+ clients, ensuring the safe operation of their supply chains around the world, which is mission-critical for them. Our high quality earnings model, with its diversified revenue streams and focus on high margins, results in strong cash generation and a robust balance sheet, all underpinned by a disciplined approach to performance management. The Group operates a progressive dividend policy with a targeted payout ratio of circa 50%. The 2019 final dividend of 71.6p or £115m will be paid on 11 June 2020.
“Our resilient trading performance over the first four months of 2020 reflects the defensive strengths of our business model. Revenue of £882m was down 4.6% year-on-year at actual rates and constant rates with a LfL revenue performance down 4.9% YoY at constant currency.
“Notwithstanding the impact of the pandemic, I am confident in our ability to navigate what will be a challenging 2020. We have responded quickly to the global changes seen since January 2020 and have put in place the right measures on health and safety, customer service, cost controls, cash management and employee engagement. Nevertheless, it is too early to quantify the impact of Covid-19 and we will provide an update on our full year guidance once we have more visibility on how and when current lockdown restrictions around the world will be lifted“.