Intertek Group plc (LON: ITRK) delivers 10% first-quarter revenue growth.
The shares of Intertek (LSE: ITRK) slumped 6% to 3,280p during early London trade this morning after the product-testing specialist revealed its operating margins had declined more than expected.
Intertek, which provides industrial health-and-safety services, reported another strong quarter of 7% organic revenue growth. The company has grown its sales by an average of 22% per annum since 2007, and has never reported annual revenues falling.
Roughly a quarter of Intertek's business involves providing support services to the commodities industry. The company blamed its first-quarter margin drop on "lower sample volumes" and tougher price competition within its minerals division.
Chief executive Wolfhart Hauser said:
"Looking ahead, whilst we expect the margin drag from the minerals business to reduce in the second half, its effect is expected to leave full year Group margin broadly stable with the prior year."
"We continue to capture and drive growth in our business through organic investment, new services and innovation, and value-adding acquisitions that add complementary capabilities and services."
"Our focus on delivering quality solutions to our local and global customers across our portfolio of businesses in over 100 countries will help to ensure we maintain organic revenue growth at high single digits for the year and through the longer term."
With a market cap of £5.3bn, Intertek trades at a lofty 30 times 2012 earnings, and offers a prospective dividend yield of just 1.4%.
Of course, whether that valuation, the great track record and the prospects for the product-testing industry combine to make Intertek a 'buy' is something only you can decide.
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> Mark does not own any shares mentioned in this article.