Product tester Intertek sees stronger growth in 2014
Product-testing company Intertek forecast stronger revenue growth and profitability in 2014 after weak commodities markets prompted it to shrink its minerals business last year.
The British company, which tests anything from oil to children's toys to check they comply with regulatory standards, said it expected no growth this year at the minerals division.
"The minerals business worsened over the whole year. We don't expect a growth rate (in minerals), but we don't expect a further decline," Chief Executive Wolfhart Hauser told Reuters.
"We have taken costs out, made redundancies, closed labs and that means that the margins in that business, even if it stays flat this year, will be better than 2013," he said.
Adjusted operating profit in the minerals division, which accounts for 5 percent of the business, fell 9 percent to 70 million pounds ($117.31 million) last year.
However, strong growth in toys, textiles and chemicals and pharmaceuticals in emerging markets like China and India helped the company post a 2.1 percent rise in pre-tax profit to 314.9 million pounds, a touch above an average analyst estimate of 312 million, according to a Thomson Reuters poll.
Hauser said he saw growth in 2014 driven by demand for testing shale oil and increased production of goods in North America, as well as textile and toy testing in China and India.
Shares in Intertek rose 2.3 percent to 3,011 pence by 0905 GMT, making it one of the biggest gainers on the FTSE 100 index.
"Management highlight that as markets stabilise and the impact of restructuring and cost reductions come through, 2014 should be a year of progressively improving growth and profitability," said Cantor Fitzgerald analyst Caroline de La Soujeole.
By Li-mei Hoang