Aggreko powers on to FTSE 100 as shares hit record high

Published on Friday 18 December 2009 21:25

AGGREKO will storm into the FTSE 100 on Monday, after a bullish trading statement sent the temporary power provider's shares to a record high yesterday.

The Glasgow-based group said that strong demand for power in the developing world meant it was on track to record revenue of more than 1 billion for the first time this year.

Chief executive Rupert Soames said earnings were likely to be a third higher than in 2008, sending its shares up 7.9 per cent to 900p.

Aggreko was formed as a division of trucking company Christian Salvesen. Since demerging in 1997, it has become the world leader in the sector, providing gas and diesel-powered generators the size of shipping containers around the world.

Shares plunged earlier this year, falling below 350p in March, as hedge funds bet that a recession would hit demand for power. In April, around 18 per cent of its shares were "out on loan", making Aggreko one of the most short-sold companies on the London Stock Exchange.

However, shares have recovered strongly, with strong demand in Africa and South America offsetting a downturn in Europe and the Middle East.

Soames said yesterday: "The recession has had a very different impact on the developing world than on the developed."

Earlier this month, Aggreko narrowly earned its promotion into the FTSE 100 index, displacing cleaning and delivery company Rentokil Initial.

Since then, its shares have risen another 13 per cent.

Aggreko signalled yesterday that it expected further growth in the developing world, while in the developed world conditions were "getting no worse".

It plans to spend 180 million on capital expenditure in 2010, 30m more than this year.