Intertek Posts Double-Digit EPS Growth, Shares Plunge

Intertek (ITRK) shares declined sharply, falling over 11% despite the company announcing robust full-year 2025 results, characterized by double-digit earnings per share (EPS) growth.

The market reaction appears to be driven by concerns that future growth may not sustain the levels achieved in 2025.

The company reported revenue of £3,432 million, a 4.3% increase at constant currency and 1.1% at actual rates. Like-for-like (LFL) growth stood at 3.9%, with Consumer Products and Corporate Assurance leading the way with 6.3% and 6.8% growth, respectively. Health and Safety, Industry and Infrastructure, and World of Energy also contributed positively.

Adjusted operating profit reached £620 million, up 9.3% at constant currency and 5.0% at actual rates. The adjusted margin improved by 90 basis points to 18.1%, driven by a favorable mix, pricing strategies, operating leverage, cost control, and productivity gains. Recent acquisitions in high-growth, high-margin segments have also performed well.

Intertek achieved its third consecutive year of double-digit adjusted EPS growth, with a 10.1% increase at constant currency and 5.4% at actual rates. The company's strong cash performance continued, with a 110% cash conversion rate resulting in adjusted operating cash flow of £762 million.

Disciplined capital allocation saw £300 million invested in growth, including £144 million in capital expenditures and £156 million on four acquisitions. These acquisitions have demonstrated value accretion, with the past three years' acquisitions delivering a 34% margin. The balance sheet reflects net financial debt of £1 billion and a net debt/EBITDA ratio of 1.3x after these investments. Return on invested capital (ROIC) remains strong at 21.3%.

Intertek delivered a total shareholder return of £602 million, including a full-year dividend of 165.0p, a 5.4% year-on-year increase, aligning with the dividend policy of approximately 65% payout ratio. Additionally, a £350 million share buyback program was completed.

The company's AAA Strategy execution remains on track, delivering quality growth ahead of targets for the 2023-2025 period, including 6.0% average revenue growth, 240bps margin accretion, 12.1% average EPS growth, and £2.3 billion in cumulative operating cash flow.

Looking ahead to 2026, Intertek anticipates mid-single-digit LFL revenue growth, continuous margin progression, strong earnings growth, and strong free cash flow. Guidance for Consumer Products has been upgraded to mid-single-digit LFL revenue growth. The company reiterated its medium-term targets of mid-single-digit annual LFL revenue growth, an 18.5%+ margin, strong cash generation, and strong ROIC.

André Lacroix, Intertek's CEO, stated, “Our 2025 results demonstrate, once again, Intertek's ability to consistently deliver quality growth,” reinforcing the company’s commitment to its AAA strategy.