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Intertek is just the kind of business one would expect to see flourishing in the wake of COVID-19.

One of the lesser-known companies in the FTSE 100, in spite of having a stock market valuation of £9bn, it is the world’s biggest provider of quality assurance.

It employs nearly 44,000 people around the world in more than 1,000 offices and laboratories, providing assurance, testing, inspection and certification services to clients in sectors as wide-ranging as chemicals, food, healthcare, transportation, energy and construction.

Globally, an estimated $12trillion is now invested in index funds
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The firm went public in 2002 and joined the top-flight index in 2009

On Friday morning it reported a 23% rise in pre-tax profits, to £186.3m, for the six months to the end of June.

However, despite what appeared to be a confident trading update, the company’s share price plunged by more than 9% at one point – wiping £849m from its stock market value.

So what went wrong?

In a word, it seems that expectations were just a little too high.

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According to Oscar Val Mas, analyst at investment bank JP Morgan Cazenove, underlying earnings came in 7% lower than the market had been expecting and noted that the company had not changed its guidance to investors on profit margins for the year.

Steve Clayton, manager of the HL Select UK Growth Shares fund, which owns shares in Intertek, added: “These interim (results) were always going to be a tough act for Intertek to pull off.

“Demand has been highly volatile and only relatively recently translated into robust growth.

“But expectations for Intertek’s ability to translate any recovery into higher (profit) margins were high.

“So far, the group is lagging a little on the margin front, even though pretty much all parts of the business are now seeing demand bouncing back.

“Full year forecasts are likely to edge down, so no surprise to see the market pushing the stock lower.”

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Expectations were too high and the market pushed stock lower

It is a rare setback for a company which, since going public in 2002 and joining the Footsie in 2009, has been a stock market darling.

It has a strong track record of growing both via takeovers and organically and also of predicting accurately what its customers will be demanding next.

Yet Andre Lacroix, the chief executive, insisted today he was confident demand will keep growing and said the company had “exciting growth opportunities” in the post-COVID-19 environment.

He told analysts today: “The total value of the global product assurance market is $250bn.

“Only $50bn of this is outsourced.

“Given the increased complexity in global corporations, we expect companies to continue to invest in new quality assurance areas to mitigate risk in the supply chain.

“These are what we call untapped quality assurance opportunities. And, indeed, COVID-19 has demonstrated there were major risks in the operations of our clients, which were not all mitigated.

“We expect the increased focus on quality assurance essentially in three areas moving forward – safer supply chain, better personal safety and sustainability.

“And this is why the industry is expected to grow faster post-COVID-19.”

Andre Lacroix
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Intertek boss Andre Lacroix is a former chairman and chief executive of Euro Disney

Mr Lacroix, who joined in May 2015 from Inchcape – coincidentally the company from which Intertek was spun out of 25 years ago – said a recent survey of customers had revealed that 87% of them were planning to invest in the next two years to strengthen their supply chains.

He said that recent shortages in supply around the world – a good example currently being how shortage in chips is hampering car production around the world – had highlighted the need for supply chains to be more resilient.

He went on: “We need to ensure health, safety and well-being for employees and consumers. COVID-19 has raised the bar for health and safety in public and factories and workplaces forever.

“And they all face higher operational complexity, which is driven by the explosion of e-commerce and, of course, the ever-faster innovation cycle.”

One area where investors appear to be concerned, in the immediate term, is inflation.

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As firms put net zero plans in place, Intertek will have a vital role to play, say experts

Intertek employs a lot of specialist and highly-qualified people, such as scientists with PhDs, while it also has a policy of giving employees pay rises every year.

The expectation is that it will be seeing a high level of wage inflation.

Mr Lacroix insisted that this was not the case – pointing out that, when lots of businesses were undergoing large restructurings with a lot of redundancies during the pandemic, Intertek had deliberately not gone down that road.

He went on: “To basically reduce our capability and then start hiring again was going to be very costly and not the right thing from a customer service standpoint.

“So we are not seeing any issues with shortages of labour. We have to hire, we do it all the time, but we don’t have a huge gap in our capability.”

He said the company would be quite capable of returning to its pre-pandemic productivity level without having to take on more employees.

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And there could be another big growth opportunity in coming years, too.

As Mr Clayton put it: “There is a quiet revolution going on in business, as firms start to put net zero plans into place.

“Intertek has a vital role to play here, with its ability to provide quality assurance of supply chains and audits of key environmental performance data.

“In short, there are whole new markets opening up for the business and the shares should increasingly recognise the potential of these opportunities, as well as the issues the existing business faces day to day.”

So, a tough day for Mr Lacroix, a former chairman and chief executive of Euro Disney.

But, once the dust has settled, he has plenty of opportunities to prove to sceptics that his company’s prospects are anything but Mickey Mouse.

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Post Office inquiry: Former complaints handler executive says she never ‘knowingly’ did anything wrong

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Post Office inquiry: Former complaints handler executive says she never 'knowingly' did anything wrong

A former top Post Office executive has told the Horizon scandal inquiry she never “knowingly” did anything wrong and did not remember a 2010 email saying that cash balances in sub-postmasters’ branch accounts could be remotely accessed.

Angela van den Bogerd, who held various roles over 35 years at the organisation, made the comments after opening her evidence on Thursday by saying she was “truly, truly sorry” for the “devastation” caused to wrongly convicted sub-postmasters.

Her roles at the Post Office included handling complaints about its Horizon software, which was provided by Japanese firm Fujitsu.

More than 700 Post Office managers were prosecuted between 1999 and 2015, after the system made it seem like money was missing from branches. At the time, the company insisted Horizon was robust.

Ms van der Bogerd, who was played by Coronation Street actress Katherine Kelly in the ITV drama Mr Bates Vs The Post Office, had previously not spoken publicly since a 2019 High Court case.

At the time, Judge Peter Fraser criticised her testimony and said she “did not give me frank evidence, and sought to obfuscate matters, and mislead me”.

Jason Beer KC, lead counsel to the inquiry, challenged Ms van den Bogerd’s opening statement, as he accused her of not saying sorry for her own role in the scandal.

Ms van den Bogerd, who resigned as the Post Office’s business improvement director in 2020, said she regretted missing significant documents and apologised for “not getting to the answer more quickly”.

She said: “But with the evidence I had and the parameters of my role at the time, I did the best I could to the best of my ability.”

Ms van den Bogerd added: “I didn’t knowingly do anything wrong and I would never knowingly do anything wrong.”

Read more on this story:
Review ordered into another Post Office IT system

Scandal victim demands jail for those who denied her justice
Leaked Post Office recordings revealed

The inquiry heard that Ms van den Bogerd was sent an email in December 2010 informing her Fujitsu could remotely amend cash balances in branch accounts via Horizon.

She told the inquiry she had no memory of it and only became aware of the issue in a January 2011 email.

The inquiry was shown a transcript of a meeting that same month between her and sub-postmistress Rachpal Athwal, who was sacked after being wrongly accused of stealing £710 before being reinstated.

In the meeting, Ms van den Bogerd said Horizon could not be accessed remotely by anyone from the Post Office, without mentioning that Fujitsu could, the inquiry heard.

Mr Beer asked: “Are you saying that what you said overall there is accurate?”

Ms van den Bogerd replied: “So that is accurate. I go on to talk later about Fujitsu, I believe”. Mr Beer said it was inaccurate because she had not given the full picture.

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Scandal ‘tip of the iceberg’

The inquiry also heard that, prior to a High Court case in 2019, Ms van den Bogerd made a witness statement in 2018 in which she said the first she knew of the possibility of inserting transactions into the system remotely was in the year or so before.

Mr Beer told the inquiry: “That was false.”

She replied: “Well, at the time I didn’t think it was.”

Pressed further on the issue, she said the messaging on remote access was “constantly changing” and that colleagues had been “very strong” that such access was “impossible”.

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‘I have had breakdowns’

Ms van den Bogerd was also asked about an October 2014 email she and other senior staff were sent by Post Office media officer Melanie Corfield, which discussed what the response should be if anyone asked about remote access to Horizon.

The email said: “Our current line if we are asked about remote access potentially being used to change branch data/transactions is simply: ‘This is not and never has been possible’.”

Mr Beer said: “You knew that was false from multiple sources by then, by now, didn’t you?”

Ms van den Bogerd appeared flustered, before replying: “Clearly I was aware of that and just didn’t pick this up… it didn’t register with me at the time, but obviously from what we’ve discussed then this was incorrect terms of reference of a flow of information, yes.”

She added she was “certainly not trying to cover up… it wasn’t just me, there were other people party to the same information”.

Meanwhile, earlier in the hearing, the former executive said she agreed with Mr Beer that using words such as “exception” or “anomaly” to describe computer bugs had been an “attempt to control the narrative”.

The inquiry continues.

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Post Office inquiry: Former complaints handler executive says she never ‘knowingly’ did anything wrong

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Post Office inquiry: Former complaints handler executive says she never 'knowingly' did anything wrong

A former top Post Office executive has told the inquiry into the Horizon scandal that she never “knowingly” did anything wrong.

Angela van den Bogerd, who held various roles over 35 years at the organisation, made the comment after opening her evidence on Thursday by saying she was “truly, truly sorry” for the “devastation” caused to wrongly convicted sub-postmasters.

Her roles at the Post Office included handling complaints about its Horizon software, which was provided by Japanese firm Fujitsu.

More than 700 Post Office managers were prosecuted between 1999 and 2015, after the system made it seem like money was missing from branches. At the time, the company insisted Horizon was robust.

Ms van der Bogerd, who was played by Coronation Street actress Katherine Kelly in the ITV drama Mr Bates Vs The Post Office, had previously not spoken publicly since a 2019 High Court case.

At the time, Judge Peter Fraser criticised her testimony and said she “did not give me frank evidence, and sought to obfuscate matters, and mislead me”.

Jason Beer KC, lead counsel to the inquiry, challenged Ms van den Bogerd’s opening statement, as he accused her of not saying sorry for her own role in the scandal.

Ms van den Bogerd, who resigned as the Post Office’s business improvement director in 2020, said she regretted missing significant documents and apologised for “not getting to the answer more quickly”.

She said: “But with the evidence I had and the parameters of my role at the time, I did the best I could to the best of my ability.”

Ms van den Bogerd added: “I didn’t knowingly do anything wrong and I would never knowingly do anything wrong.”

Read more on this story:
Review ordered into another Post Office IT system

Scandal victim demands jail for those who denied her justice
Leaked Post Office recordings revealed

The inquiry heard that Ms van den Bogerd was sent an email in December 2010 informing her Fujitsu could remotely amend cash balances in branch accounts via Horizon.

She told the inquiry she had no memory of it and only became aware of the issue in a January 2011 email.

The inquiry was shown a transcript of a meeting that same month between her and sub-postmistress Rachpal Athwal, who was sacked after being wrongly accused of stealing £710 before being reinstated.

In the meeting, Ms van den Bogerd said Horizon could not be accessed remotely by anyone from the Post Office, without mentioning that Fujitsu could, the inquiry heard.

Mr Beer asked: “Are you saying that what you said overall there is accurate?”

Ms van den Bogerd replied: “So that is accurate. I go on to talk later about Fujitsu, I believe”. Mr Beer said it was inaccurate because she had not given the full picture.

Please use Chrome browser for a more accessible video player

Scandal ‘tip of the iceberg’

The inquiry also heard that, prior to a High Court case in 2019, Ms van den Bogerd made a witness statement in 2018 in which she said the first she knew of the possibility of inserting transactions into the system remotely was in the year or so before.

Mr Beer told the inquiry: “That was false.”

She replied: “Well, at the time I didn’t think it was.”

Pressed further on the issue, she said the messaging on remote access was “constantly changing” and that colleagues had been “very strong” that such access was “impossible”.

Please use Chrome browser for a more accessible video player

‘I have had breakdowns’

Ms van den Bogerd was also asked about an October 2014 email she and other senior staff were sent by Post Office media officer Melanie Corfield, which discussed what the response should be if anyone asked about remote access to Horizon.

The email said: “Our current line if we are asked about remote access potentially being used to change branch data/transactions is simply: ‘This is not and never has been possible’.”

Mr Beer said: “You knew that was false from multiple sources by then, by now, didn’t you?”

Ms van den Bogerd appeared flustered, before replying: “Clearly I was aware of that and just didn’t pick this up… it didn’t register with me at the time, but obviously from what we’ve discussed then this was incorrect terms of reference of a flow of information, yes.”

She added she was “certainly not trying to cover up… it wasn’t just me, there were other people party to the same information”.

Meanwhile, earlier in the hearing, the former executive said she agreed with Mr Beer that using words such as “exception” or “anomaly” to describe computer bugs had been an “attempt to control the narrative”.

The inquiry continues.

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Unions vow to fight ‘rejection’ of plan to save Tata Steel jobs

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Unions vow to fight 'rejection' of plan to save Tata Steel jobs

Unions have warned of a bitter fight ahead, saying their plans to avert thousands of job losses at Tata Steel have been rejected by the company.

Tata had announced in January a consultation on cutting up to 2,800 jobs in the UK, the majority of them at the country’s biggest steelworks in Port Talbot, South Wales.

It followed confirmation that the Indian-owned firm wanted to close down the blast furnaces at the plant and replace them with electric arc furnaces under a plan to reduce emissions and costs.

GMB, Unite and Community union representatives met Tata counterparts at a London hotel to discuss the way forward on Thursday morning.

But the GMB said Tata informed them that the blast furnaces would be closed by the end of September, describing the decision as an “unwelcome but not expected slap in the face”.

Tata Steel was yet to comment.

It has consistently argued that its £1.25bn investment would secure the future of UK steelmaking.

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“It would protect the majority of jobs, reduce the UK’s carbon emissions by five million tonnes a year and could kickstart a green industrial revolution in South Wales,” a spokesperson said.

However, its operations are now widely expected to face strike action.

Members of Community and the GMB are being balloted on whether to walk out over the plans.

Unite members have already voted in favour of industrial action.

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Why is green steel such a big issue?

The unions had urged Tata to abandon the government-supported switch to so-called green steel by signing up to an alternative plan that would raise productivity and protect jobs across the supply chain.

They argued that Tat’s proposals would rid the UK economy of its last remaining ‘virgin’ steelmaking facility and commit thousands of jobs to the scrap heap for no reason.

Community general secretary Roy Rickhuss said: “It’s incredibly disappointing that Tata have chosen to reject the multi-union plan, which is an ambitious and viable alternative to their destructive bad deal for steel.

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Port Talbot: Community ‘smashed to pieces’

“We do not accept the company’s assertion our plan was too expensive – in fact, it would have returned the company to profits, and the additional capital expenditure needed to make it a reality could have been funded by an additional £450m from the government – a drop in the water compared to what other European countries are investing in their domestic steel industries.

“Tata have made their decision, and our members will decide on our collective response.

“Tata made a proposal to negotiate a package with the unions to give us firm assurances on jobs and future investment, and we will consult our members on how we proceed

“We want to make one thing absolutely clear to the company: this isn’t over – not by a long shot. We will never stop fighting for our jobs, our industry, and our proud steel communities.”

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