Shares blip as Aggreko adopts cautious outlook

Legacy contracts drag on result but group still investing for the future

Scottish temporary power supplier Aggreko saw its shares fall more than 5% in intra-day trading yesterday after failing to impress investors with lower profits and a cautious outlook.

The Glasgow-headquartered group yesterday revealed an 11% fall to £154 million in statutory pre-tax profits for the year to December 31.

The drop came despite a 14% uplift in revenues to £1.73 billion.

Aggreko confirmed it was maintaining its full-year dividend at 27.12p and said it expected profits for 2018 to be in line with the past year.

The group said its 2017 performance had been “materially impacted” by the previously flagged drag from 10-year-old contracts in Argentina.

Stripping that out, Aggreko said operating profits for the year were 13% higher.

Chief executive Chris Weston said he was pleased to see overall revenue growth and said the Rental Solutions and Power Solutions Industrial units had delivered strong performances.

However, he said “the challenges in Power Solutions Utility” had held back the group overall.

“Over the last three years we have stabilised the business, enhanced our service offering and positioned ourselves to prosper in rapidly changing energy markets,” Mr Weston said.

“We have delivered over £100 million in cost savings, invested in new systems and processes and developed new technology, all of which enables us to provide high-quality solutions for customers.”

Aggreko also confirmed it was investing further in new technologies as the power market transitions to a less carbon-reliant future.

It expects to invest £9m this year on new energy solutions, a £2m uptick on the spend in 2017.

“The global provision and consumption of power is experiencing a significant transition as markets seek to decarbonise, decentralise and digitalise,” Mr Weston said.

“As a result, we are investing for future growth, particularly in distributed energy solutions, where our modular, mobile fleet combined with storage and renewables integration capability, position us well in this changing landscape.”

Shares closed down 28.6p at 695.4p.

An Aggreko technician checks over a power unit. The company has provided support to major world sporting events including the Olympics, World Cup and Open golf championship.