SHARES in temporary power provider Aggreko surged more than 10 per cent as the firm reassured investors that its should average double digit growth up to 2017 despite the hangover from a bumper year.
The Glasgow-based company hiked its dividend in a show of confidence after a “flawlessly executed” Olympics contract helped pre-tax profits grow by 11 per cent to £367 million last year. Revenues added 13 per cent to £1.6 billion. Shares closed up 181p at 1,939p.
The results were in line with City expectations but analysts were reassured by guidance that double-digit revenue growth should continue over the next five years.
The group saw more than £1 billion wiped off its market value in December after warning that a “double whammy” of American troops leaving
Afghanistan and a lack of sporting events to replicate the
success of the London Games will reduce demand for its
generators during 2013.
Chief executive Rupert Soames said: “Our results in 2013 are going to be slightly below those of 2012. We’re reiterating that guidance from December.”
But he added that the year had started well for Aggreko’s “local business” division, which operates mainly in mature markets, with almost 20 per cent more power on rent than a year ago.
“Encouragingly, growth in the local business has been broadly spread, with most areas other than Europe showing healthy year-on-year increases in MW [megawatts] on hire,” he said.
The “power projects” arm, which provides electricity in developing countries were there is often a lack of capital to build the necessary power stations, has started 2013 with new contracts totalling 140 MW in the Carribean and East Africa.
The board is recommending a 15 per cent increase in the dividend for the year as a whole, with a final dividend of 15.63p per share.
Investec Analyst John Lawson upgraded Aggreko to “buy” in a note titled “Relief”. He said: “The group has re-iterated its fundamental stance that the structural growth drivers for power projects remain intact.”