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Intertek expects coronavirus hit

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Via Yahoo Finance

The boss of Intertek has said he expects the business to be hit by the global spread of coronavirus.

Chief executive Andre Lacroix said: “Intertek is not immune to the impact of the novel coronavirus and our 2020 performance will be affected by the temporary disruption to the supply chains of our clients in China and any impact it might have on global trade activities.”

However, he added that it is “to early” to say exactly what impact the virus will have on the FTSE 100 company, which works in 100 different countries.

The outbreak, officially known as Covid-19, has spread to at least 70 countries since it began in China at the end of last year.

So far 90,000 cases have been reported worldwide, with 3,100 deaths. A vast majority of these have been in China.

The World Health Organisation is especially concerned about outbreaks in South Korea, Italy, Iran and Japan.

Intertek said pre-tax profit had increased by 9.6% in 2019 to £443.3 million, on revenue of almost £3 billion, a 6.6% rise.

Robin Speakman, an analyst at Shore Capital Markets, said: “The outlook remains our core concern for Intertek at present, given that the group’s operations leverage the global trade environment with the coronavirus set to impact this.”

He added: “We agree that the impact should be seen as a temporary effect at present, though we retain some concern over whether this may have a slightly longer, margin impact as the group’s customers strain to get back to normal trading with an eye on their own cost lines and cash management.”

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Shares fell by 0.7%, or 36p, to 5,288p on Tuesday morning after the news.

After an employee caught the disease last month, Intertek shut a Hong Kong site for two weeks.

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