Aggreko boss told to go at firm’s AGM

Shareholder calls for power group to bring Soames back as chief executive

AGGREKO chief executive Chris Weston faced calls for him to stand down at the company’s annual meeting in Glasgow, as one shareholder offered the board the phone number of former boss Rupert Soames and demanded that the company calls it.

Shareholder Alan Rae stood up at the Radisson Blu hotel in Glasgow and slammed the strategy being pursued by Mr Weston, who succeeded Mr Soames two years ago.

It came after Mr Weston reiterated to shareholders that profits this year would be lower than 2016 as a result of “headwinds” caused by the renegotiation of contracts in Argentina, which will offset the recovery it started to see in the North American oil and gas market in the first quarter.

The presentation failed to impress Mr Rae, who said: “I’ve listened to Mr Weston’s view with interest. I’ve got a different vision, a better vision. I believe in making Aggreko great again. In my vision for Aggreko, you only need one number,” he continued, proceeding to read out a number. “If you have not figured it out already, that’s the phone number for Rupert Soames.”

Claiming that earnings per share rose “nine-fold” during Mr Soames’ tenure, while turnover and generator numbers steadily increased, he added: “In the Rupert Soames years, Aggreko did extremely well.

“These were great years, these were not years of excuses. I urge you to phone Mr Soames.”

The criticism of Mr Weston continued from another shareholder, and former employee, who said she had recently retired after 27 years’ service. She said Mr Weston was the “wrong man” for the job, stating he had the “wrong skill set” and would be better suited to “public service”.

She stated: “I have seen many leaders come and go, including Rupert Soames whom I personally thought was absolutely wonderful. I would have to say your skill set Mr Weston is well suited to public service. I think Aggreko is a very difficult company to run… It is a special skill set that is needed and you don’t have it.”

The former employee went on to urge Aggreko chairman Ken Hanna to dispense with Mr Weston’s services, claiming that she had seen him regularly deal with executives who were “not up to the job”.

She added: “Why you are dragging your feet this time is a little beyond me. I hope you wake up and smell the coffee the pair of you.”

Mr Weston, who was re-elected as a director with more than 99 per cent of the votes cast in his favour, received a staunch defence from Mr Hanna. Responding to the shareholder calling for Mr Soames, now boss of Serco, to be brought back, Mr Hanna noted Mr Soames had left the business voluntarily. He added: “The whole power industry has gone through very significant structural changes over the past five years.

“Let me assure you the board of Aggreko are fully behind the strategy Chris and his team are following.”

But Mr Rae said: “With respect sir that strategy doesn’t seem to be working. The dividend has not gone up, the earnings per share are down. Turnover in a depreciating currency is also down. You are not doing well. Why do we not go back to the glory days?”

Mr Weston himself was sanguine about the views expressed from the floor. Speaking after the meeting concluded, he said: “Everyone is entitled to their own view. If you look at the vote it was over 99.9 per cent in favour. It’s just part of life’s tapestry.”

The company yesterday withdrew proposals for a new director share award scheme in the face of investor opposition without putting this to a vote.

Aggreko reported yesterday revenue up in the first quarter, excluding the impact of currency and pass through fuel.

Revenue generated by its rental solutions business was up three per cent on last year, with oil and gas revenues stabilising in North America. Those revenues were down one-third compared with the first quarter of 2016, but up on the fourth quarter of last year.

“The Q1 figures are promising, but it is very, very early in the year”, Mr Weston said, adding that he expects the recovery in rental solutions in North America to continue throughout the year.

However Mr Weston said this would be offset by the challenges faced by its power solutions utility business, where revenues were down seven per cent due to “repricing and off-hires” in Argentina.

The company has been repricing contracts signed in 2008 in Argentina, where it had 450 megawatts of LLOYDS Banking Group has doubled first quarter profits in a success that underlines how much faster it has recovered from the financial crisis than Royal Bank of Scotland.

Lloyds made £1.3 billion pre-tax profit in the three months to March from a portfolio that includes Bank of Scotland and Scottish Widows, compared with £0.65bn in the same period last year.

Chief executive António Horta-Osório said the bank had reaped the rewards for operating a plain vanilla banking business focused on the UK.

While he described the operating environment as challenging, Mr HortaOsorio observed: “The UK economy continues to benefit from low unemployment and reduced levels of indebtedness, and asset quality remains strong.”

Lloyds noted it provided £100 million in the first quarter to compensate victims of a £245m fraud at the former Halifax Bank of Scotland impaired assets operation in Reading.

Mr Horta-Osorio said: “We are determined that the victims of HBOS Reading are fairly, swiftly and appropriately compensated.”

However, the first quarter results provide further evidence the group has overcome the problems that it faced after requiring a £20.3 billion taxpayer bail out in 2008 following the takeover of HBOS.

In February, Lloyds posted its highest annual profit in a decade.

The UK Government finished recouping the cost of the bailout last week. Its holding has been sold down from 43 per cent to less than two per cent. By contrast

power in play last year – its peak deployment in the market.

Those contracts were initially brokered on more favourable terms because of the economic instability prevailing at the time, when there was a power shortage in Argentina.

Mr Weston said: “You’ve now got a new government who have come in, they have gone back on to the international financial markets and so they are beginning to build permanent power. And that’s not what we do.”

Elsewhere, Aggreko said revenue in its power solutions industrial division were up 17 per cent, amid strong performances in Eurasia, the Middle East and Africa. Conditions were more challenging in Asia and Latin America, it added.

Shares in Aggreko closed down 20.5p at 884p.