Strong First Quarter Powers Aggreko
LONDON -- FTSE 100 company Aggreko saw a boost in its share price this morning following a positive interim management statement, gaining 1.6% in early trade to reach 1,789 pence.
The world's largest temporary power generation supplier announced that underlying group revenues grew 8% in the first three months of the year (excluding revenues from the London Olympics, the Poit Energia acquisition, pass-through fuel and currency movements), while trading margins were in line with expectations, and the outlook remains the same from previous guidance.
The firm revealed that local business saw a 17% increase of power on rent in the quarter year on year as Q1 underlying revenues rose 10%, with "most areas other than Europe showing healthy year-on-year increases in MW on hire".
Order intake was enhanced by big contracts (or Power Projects) -- including 122 MW of cross-border power to Namibia and Mozambique, and a new heavy fuel oil contract for 56 MW in the Caribbean -- and underlying revenues were 5% ahead of last year. Elsewhere, the Americas grew underlying revenues by 9%; Asia, Pacific and Australia was 1% ahead of last year; and Europe, Middle East and Africa grew 13%.
Management confirmed intentions to spend around £130 million in the first half on fleet capital expenditure, and around £260 million for the year as a whole, although "as always we will increase or decrease our rate of investment depending on market conditions". Net debt increased £4 million to £597 million in the quarter and £169 million against the same period last year, but that's taking into account the £139 million Poit Energia purchase with the rest attributed to "higher working capital requirements".
Last month Aggreko lifted its full-year dividend by 15%, but despite moving in the right direction -- the firm's dividend payout has risen for five years straight now -- it still yields less than 1.5%, while it's on a fairly costly valuations of 20 times earnings... neither hugely appealing to income or value investors alike.
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The article Strong First Quarter Powers Aggreko originally appeared on Fool.com.Sam Robson has no position in any stocks mentioned. The Motley Fool recommends Aggreko. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.