Intertek Group PLC (LON:ITRK) has launched a new PPE partnership with textile giant Beximco as it also announced half-year results where the dividend was maintained despite the coronavirus crisis hitting sales and profits.
The FTSE 100-listed testing and quality assurance company said the pandemic “has brought to life, as never before, the great importance of Intertek's purpose-led role in society”.
Revenue of £1.3bn for the first six months of the year was down 7.8% on this time last year, with like-for-like sales down 8.0% at constant currency rates. Profit before tax fell by a third to £151.5mln as adjusted operating margin dropped 470 basis points to 12.6%, which the group felt was still “robust”.
Cash generation was certainly strong though, with adjusted free cash flow up 36% to £142mln, which enabled an easy decision to keep the dividend flowing at 34.2p and cut net debt to £650.1mln from £826.3mln a year ago.
Intertek's chief executive André Lacroix said the board is confident about the structural growth prospects in the US$250bn global quality assurance market, saying they “have become even more compelling over recent months as health, safety, wellbeing and sustainability grow in importance for companies and individuals alike”.
Into this new world, Intertek has rapidly brought to market a range of innovations to help companies “address their operational and supply chain challenges”, although Lacroix said the lack of visibility on when the lockdown restrictions will be fully lifted in every country and the uncertainty about when some clients can fully resume their operations makes it difficult provide guidance for the full year.
In a separate announcement, Intertek said it had agreed an exclusive services appointment and strategic partnership with Beximco, with has been a customer for 15 years.
It will provide assurance, testing, inspection and certification services for the Bangladesh giant's textiles and apparels business and under the strategic agreement will also have exclusive rights to operate and manage the new PPE quality assurance laboratory from planning and set-up, to providing guidelines on equipment, managing the daily operations and provision of technical experts to delivering accreditations.
Lacroix said: “We look forward to deepening our existing partnership and supporting BEXIMCO's vision in becoming a key player in the manufacture of PPE globally, thereby leveraging our global reach and experience to ensure that all safety, hygiene and quality standards are met for PPE garments throughout the world.”