Where Intertek Group plc’s (LON:ITRK) Earnings Growth Stands Against Its Industry

Measuring Intertek Group plc’s (LSE:ITRK) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess ITRK’s recent performance announced on 30 June 2019 and compare these figures to its historical trend and industry movements.

View our latest analysis for Intertek Group

Have ITRK’s earnings improved against past performances and the industry?

ITRK’s trailing twelve-month earnings (from 30 June 2019) of UK£291m has increased by 0.6% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 25%, indicating the rate at which ITRK is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and if the entire industry is facing the same headwind.

LSE:ITRK Income Statement, September 23rd 2019
LSE:ITRK Income Statement, September 23rd 2019

In terms of returns from investment, Intertek Group has invested its equity funds well leading to a 34% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the GB Professional Services industry of 7.9%, indicating Intertek Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Intertek Group’s debt level, has increased over the past 3 years from 22% to 22%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Intertek Group to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ITRK’s future growth? Take a look at our free research report of analyst consensus for ITRK’s outlook.
  2. Financial Health: Are ITRK’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.