Intertek shares leap after underlying revenue growth improves

(Adds CEO, analyst comments)

By Li-mei Hoang

LONDON, Aug 3 (Reuters) - Shares (Berlin: DI6.BE - news) in British product-testing firm Intertek Group (Other OTC: IKTSF - news) jumped by 9 percent to their highest level since May after it posted an improvement in first-half underlying revenue growth and maintained its full-year guidance.

Intertek, which tests anything from oil to children's toys to check they comply with regulatory standards, said its underlying revenue growth rose by 1.4 percent to 1.06 million pounds ($1.66 billion) from 1.02 million pounds in the first-half of its financial year.

Chief Executive Andre Lacroix noted a strong performance in its products-related business, particularly in consumer goods, electricals and commodities, which had helped offset challenging conditions in its oil and gas capital spending business.

Energy companies have been slashing investment budgets following a plunge in oil prices.

"This is obviously a situation that we cannot ignore. This is 10 percent part of our earnings in total," Lacroix (Paris: FR0000066607 - news) told Reuters.

"It is reasonable to believe that the capex reductions will continue in the next few months ...We have to cycle through that time, and over time minerals and oil and gas will start growing again," he added.

Pretax profit rose to 139.1 million pounds ($217.5 million) in the first half of its financial year, compared with 119.8 million pounds a year earlier.

Shares in the company rose more than 9 percent in early trade and stood at 2669 pence by 0904 GMT, making it the highest riser on the FTSE 100 index, and the best day's trading ever for the stock.

"There has been momentum on the organic growth as we have moved through the quarter and there has been a very strong margin performance," said Numis analyst Steven Woolf.

"The results themselves are towards the top end of expectations so there's an element of recovery on that side of things," he added.

Analysts on average expect Intertek to post full-year pretax profit of 297.05 million pounds, according to a Thomson Reuters (Dusseldorf: TOC.DU - news) poll of 17 analysts. ($1 = 0.6395 pounds) (Reporting by Li-mei Hoang; editing by Kate Holton and Susan Thomas)