Aggreko reports robust growth despite European weakness

Temporary power and temperature control group Aggreko delivered a strong performance in its first half and said it continues to expect another year of 'good growth' in 2012, but did note 'patchy' growth in Europe.

Group revenues increased by 15% from £637m to £734m in the six months to June 30th, up 16% on an underlying basis (adjusted for currency movements, pass-through fuel, the Poit Energia acquisition, the London Olympics and the Asian Games).

The group said that the Europe & Middle East division will have a strong year, helped by £55m contract for generators for the Olympic Games, £21m of which was recognised in the first half.

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However, underlying growth in Europe, in line with the first half of last year, is said to be "patchy" due to the poor economic environment. "Geographic area performance continued to be mixed with increases in Scotland, Norway and Spain offset by decreases in other parts of the UK, Germany and Italy."

Underlying revenue growth in North America, International Local Business and International Power Projects (excluding fuel)was more robust though, up 12%, 27% and 17%, respectively.

Pre-tax profit rose 25% (+23% on an underlying basis) from £127m to £159m, while diluted earnings per share jumped 30% from 32.03p to 41.48p. The group trading margin improved from 20% to 21%.

Aggreko decided to raise its interim dividend by 15% from 7.2p per share to 8.28p per share.

Chief Executive Rupert Soames said: "It's been a very successful six months. We substantially expanded our Latin American business with the acquisition of Poit Energia in Brazil; we have built a new temporary power plant in Mozambique, which, uniquely, is providing power both to both the South African and Mozambique utilities, and which will deliver revenues of over $200 million over the next two years; our order-book is at record levels; we have opened our new manufacturing facility in Scotland; and we have delivered what will be the world's largest contract for temporary power for a major sporting event, in the form of our work as the exclusive supplier of temporary power for the London Olympics."

Net debt stood at £678m at June 30th and, at that date, un-drawn committed facilities totalled £230m.

BC