Aggreko Powers Ahead on Excellent Results
LONDON -- Aggreko , the global power and temperature control equipment rental company, rose more than 8% on the week, following this week's release of its final results for 2012.
Group revenue grew by 13%, to 1,583 million pounds, with trading profit also up 13%, to 388 million pounds, and pre-tax profit 11% higher at 367 million pounds.
In its "Local" business, which operates 194 rental service centers in 47 countries, the company reported a "flawless execution" of its London Olympics contract, a strong performance in its North American operations, and more than 30% growth in emerging-markets business.
Aggreko's "Power Projects" division reported that revenues were up 15%, although trading profit was down 1%, partly because of increased debt provision. It also said there had been "strong growth" in demand for gas-powered generation.
Earnings per share put on 16%, to 104 pence, and the company is raising its dividend 15% to 23.91 pence, covered a comfortable 4.2 times.
Rupert Soames, Aggreko's chief executive, commented:
The Local business has had a very strong start to the year, with almost 20% more power on rent than a year ago, helped in part by our acquisition of Poit Energia in April 2012. Encouragingly, growth in the Local business has been broadly spread, with most areas other than Europe showing healthy year-on-year increases in MW on hire.
In Power Projects, we have signed new contracts totalling 140 MW in the year to date, and importantly, we have secured our first large order for our new Heavy Fuel Oil engine, with a 56 MW contract in the Caribbean. We have also secured a contract for 57 MW of diesel-powered generation in Djibouti. Trading continues to be subdued and is likely to remain so in the first half; however, in recent weeks there has been some improvement in the prospect pipeline.
Our expectations for the year as a whole remain unchanged from previous guidance.
The company's share price is still slightly down on the year to date, owing to a slump at the end of January, and is down almost 20% on this time last year, almost entirely because of a huge sell-off in December, when Aggreko's management said 2013's results may well be below 2012's. Today's results may well help restore some investor confidence in the company.
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