Intertek Group PLC (LON:ITRK) shares dropped on Tuesday as it posted a 1.8% decline in first-half revenue, reflecting foreign exchange headwinds and a weak performance in the divisions that service the trade and resources industries.
The inspection, product testing and certification company said revenue dropped to £1.35bn in the first six months of the year from £1.37bn in the year-ago period. Organic revenue declined 2.3% to £1.34bn.
The trade and resources businesses saw revenues fall 4.7% and 6.3%, respectively, while the products arm grew 0.9% on the back of the acquisition of cargo inspection firm Aldo Abela Surveys, lab testing provider Proasem and security and assurance services company NTA Monitor.
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At constant exchange rates, however, total revenue rose 3.9% and organic revenue increased 3.4% with growth in the products and trade businesses offsetting a slight dip in resources.
Intertek expects revenues in the resources division, which services the oil and gas sector and mining industry, to deliver a stable revenue performance in the second half and to grow in the “medium to long term” as commodities recover and the company benefits from investments in exploration and production of oil and minerals.
Adjusted pre-tax profit in the first half rose 1.6% to £213.6mln, boosted by a strong performance in the products division, which accounts for 76% of its profits. Operating profits grew 0.8% to £225.8mln as the operating margin increased 50 basis points to 16.8%.
Intertek raised its interim dividend by 35.7% to 31.9p.
“We are well positioned to deliver in 2018 good organic revenue growth with moderate group margin progression at constant currency and strong cash conversion,” said chief executive Andre Lacroix.
Shares slid 7.2% to 5,446p.