Intertek warns of coronavirus impact on supply chains and trade
Updated : 07:40
Intertek posted a 5.2% increase in annual operating profit but said its performance in 2020 would be affected by the coronavirus outbreak's effect on supply chains and global trade.
Adjusted operating profit for the year to 3 March at constant currency rose to £513.3m from £481.8m as revenue increased 4.8% to £2.99bn. Based on actual currency rates operating profit rose 6.5% and revenue increased 6.6%. Reported pretax profit rose to £445.1m from £404.5m.
The FTSE 100 product testing company said before the coronavirus outbreak it had expected a continuation of the trends in 2019 but that it would be affected by disruption to clients' supply chains in China and any reduction in international trade. The company said it was too early to quantify the impact on its business.
For 2019 Intertek reported broad-based organic growth enhanced by acquisitions. The products business, which accounts for more than three-quarters of profit, increased organic revenue by 2.3%. Organic revenue rose 4.1% at the trade business and 5.7% at resources, Intertek's smallest division.
Intertek joins a string of international businesses warning about the effects of the coronavirus outbreak as countries scramble to contain and manage the disease. The shutdown of factories in China has affected supplies of products and components for companies ranging from Jaguar Land Rover to Apple.
Intertek Chief Executive André Lacroix said: "Intertek is not immune to the impact of the novel coronavirus and our 2020 performance will be affected by the temporary disruption to the supply chains of our clients in China and any impact it might have on global trade activities. It is too early to quantify the impact of the novel coronavirus."
Lacroix said before the outbreak Intertek was targeting broad-based good revenue growth, good organic growth in products and trade, robust growth in resources, moderate margin progression and strong cash conversion.
The company increased its annual dividend by 6.8% to 105.8p a share.