Testing firm Intertek sees pick up in growth this year

(Adds CEO comments, detail, background, shares)

By Li-mei Hoang

LONDON, March 2 (Reuters) - British product-testing firm Intertek Group (Other OTC: IKTSF - news) said demand from the textile, electrical and building industries should offset a drop in business from some oil and gas customers this year, sending its shares to a three-month high.

The company, which tests products from barrels of oil to children's toys to check they comply with regulations, said on Monday it expected a small improvement in underlying revenue growth this year after a 2.3 percent increase in 2014.

"We think that the organic growth rate will gradually improve over the year, and that means that our organic growth rate should be a bit higher than last year overall," said Chief Executive Wolfhart Hauser, who will retire in May after 10 years in the role.

Revenues totalled 2.1 billion pounds ($3.2 billion) in 2014.

Intertek shares were up 3.4 percent to 26.18 pounds at 0916 GMT, the biggest rise on the UK's FTSE 100 index.

But Hauser warned of challenging conditions in the company's oil and gas capital spending business, which represents around 13 percent of group revenues. Energy companies have been slashing investment budgets following a plunge in oil prices.

Intertek, which employs more than 36,000 people around the world, raised its full-year dividend by 6.7 percent to 49.1 pence per share.

Hauser, who will be succeeded by Inchcape CEO André Lacroix (Paris: FR0000066607 - news) , said the company planned to invest in its transportation, textiles, telecoms and food and agriculture divisions, which all showed strong demand last year.

"Those businesses will continue to grow strongly, and we will also continue to make the necessary organic investments, maybe also acquisitions in those areas," he said.

($1 = 0.6495 pounds) (Editing by Paul Sandle and Mark Potter)