Aggreko powers ahead as it raises profit forecasts again

AGGREKO is on course for bumper annual profits of almost £300 million after the world's biggest supplier of temporary power yesterday upgraded its outlook for the second time this year.

• Glastonbury was one of string of high-profile events for which Aggreko provided temporary power sources Picture: PA

The Glasgow-based firm, which is fast becoming one of Scotland's biggest corporate success stories, said major sporting events such as the Vancouver Winter Olympics and the World Cup in South Africa boosted pre-tax profits 18 per cent in the first six months of the year to 127.1m.

Revenues jumped 17 per cent to 583.6m as its "local business", which supplies generators and chillers from 133 service centres in 31 countries, made a strong recovery following the recession.

The operation suffered during the economic downturn, with fourth-quarter revenues in 2009 sliding 21 per cent. However, strong demand in North America in particular saw the business rake in revenues of 48m during the six months to 30 June, boosted by a string of high-profile events - also including Glastonbury, both the UK's Open golf tournament and its US equivalent and the Eurovision Song Contest.

Aggreko chief executive Rupert Soames, who is a particular fan of the Glastonbury music festival, expects the local business to be the main driver of growth in the second half of the year.

"The local business is going to grow pretty sharply in the second half," he said.

The operation has been involved in supplying equipment to those working on the Gulf of Mexico clean-up, which Soames said, has "brought quite a lot of business" for the firm.

Despite the encouraging first-half figures, Soames sounded a warning over 2011, which is likely to be more difficult for Aggreko given the lack of international sporting events such as the Olympics.

"The events stuff tends to come in a two-year cycle," he told The Scotsman. "We know we are not going to get a re-run of these big events next year. Our first-half statement (in 2011] will start with: 'Against tough comparatives'."

Shares in the FTSE 100 firm, which have gained strongly this year, fell 5.8 per cent to 1,346p amid profit-taking and concerns about the outlook for 2011.

Aggreko's "international power" business has also made headway this year, hitting a record order intake of 860 megawatts in 18 countries. The operation supplies temporary power stations to developing countries and has been building up its presence in areas of "strategic importance" such as South and Central America and Asia over the past few years.

Soames said this investment was now paying off with more than three-quarters of contracts in the first half coming from these areas. The operation had previously been largely dependent on African countries.

The firm yesterday announced a 50 per cent hike in its final and interim dividend, with the latter rising to 6.55p.

Chairman Philip Rogerson said in a statement to the stock exchange that results for the full-year were likely to be "slightly better than our previous expectations".

Prior to yesterday's results, the City had pencilled in annual figures of 285m, up from 246.5m in 2009, but one analyst said consensus could rise by 2 per cent following the half-year update.