Aggreko cheers boost in profitability
● Glasgow-based power supplier sees profits jump but revenue slide
Glasgow-headquartered temporary power specialist Aggreko, one of Scotland’s largest industrial companies, said it expects its full-year earnings to tally with market expectations after seeing progress on profits in its first half.
The business provides power, temperature control and energy services internationally. It has been the exclusive power supplier for the Glastonbury Festival since 2007 and is working with the likes of the Rugby World Cup in Japan and Solheim Cup at Gleneagles this year.
In the six months to 30 June, Aggreko saw group revenue drop to £768 million, a yearon-year fall of 10 per cent, or 4 per cent on an underlying basis.
Pre-tax profit was up by 2 per cent, or 9 per cent on an underlying basis, at £60m. Dividend per share was flat at 9.38p.
Return on capital employed [ROCE] came in at 10.2 per cent, up by 0.6 percentage points on an underlying basis.
Underlying revenue in its rental solutions arm was up by 1 per cent, mainly driven by the US, where revenue was up 7 per cent with strong growth in oil and gas.
However, underlying revenue was down in its power solutions industrial division (by 9 per cent) and power solutions utility (by 7 per cent).
The group also highlighted how, during the first six months, it generated an operating cash inflow of £210m, up from £160m 12 months previously. Aggreko mainly attributed the increase to a year-onyear jump in core earnings of £23m and a reduction in working capital outflows of £31m, partially offset by a higher cash outflow of £9m relating to mobilisation (fulfilment assets) and demobilisation activities.
Chief executive Chris Weston said: “We have had a good start to the year and are on track to deliver full-year earnings in line with market expectations.
“Focus on delivery in our key sectors, combined with operational and cost efficiencies and the benefit from our investments in systems, has delivered improved profitability.
“We continue to innovate to meet our customers’ evolving needs through the energy transition, and during the period we launched the Y.cube, our new modular and mobile energy storage system. Progress on receivables has also been encouraging, particularly in Africa, and this all underpins our confidence in achieving our mid-teens ROCE target in 2020.”
Aggreko was established in the Netherlands in 1962, powering greenhouses, creating its moniker by combining the Dutch word for generator – “aggregaten” – and the name of founder Luc Koopmans.
It relocated its headquarters to Scotland in the 1970s, and has helped deliver power for Pink Floyd touring the US in the 1980s and the Grateful Dead the following decade.
Aggreko is now present in more than 200 sites globally, helping with disaster relief after Hurricane Katrina struck in 2005, for example. Sporting events it has supplied include the London 2012 Olympics, Gold Coast Commonwealth Games and the European Championships in Glasgow, while it recently renewed its partnership with Cirque du Soleil.
Last year it secured a key $200m (£164m) supply contract for the 2020 Olympic and Paralympic Games in Tokyo.
“We have had a good start to the year and are on track to deliver full-year earnings in line with market expectations”
CEO CHRIS WESTON