Aggreko shareholders to be powered by £150m windfall

POWER plant company Aggreko unveiled a £150 million windfall for shareholders yesterday following record profits and dividends.

But the 55p-per-share special dividend failed to stop shares in the Scottish company retreating sharply after it said global unrest was causing some uncertainty in the outlook.

Pre-tax profits jumped 24.6 per cent to 307.1m in a year when the company benefited from major tournaments such as the World Cup.

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A lack of blue-ribbon events this year means the company expects headline trading profits for 2011 to be broadly flat.

An element of profit-taking after a strong performance from the company's share price over recent months was also blamed for contributing to the stock falling by 6.6 per cent - or 99p - to close at 1,390p.

Chairman Philip Rogerson said the company, which employs 300 at a new plant in Dumbarton, had produced another strong set of results.

But he struck a note of caution and said the current instability in some countries in the Middle East and Africa made the task of predicting the outcome for the year more difficult than normal.

Chief executive Rupert Soames later stressed that exposure to countries where there are current issues was "pretty small and limited".

"Between Yemen and Cote d'Ivoire, the only countries where we have any concerns at the moment, we have about 140mW of equipment, compared with about 6,700mW in our total fleet. We have no exposure to Libya or Tunisia," he stressed.

Last year's major sporting events, which also included the Winter Olympics, added 87m to 2010 revenues which rose 19.7 per cent to 1.15bn. Although the company will not benefit from similar-scale events this year, it pointed out it was still expecting underlying profits to increase by about 15 per cent.

Both its international power projects business, which provides power plant to developing countries, and its local business, which rents out small-scale generation or refrigeration plant for customers to operate themselves, are expected to deliver "good" growth in 2011.

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"We go into 2011 with strong momentum, a record order book in international power projects, and continued strong demand driven by the world-wide shortage of power," said Soames. Fleet capital investment is expected to increase by 26 per cent this year to a record 320m.

After a review of its balance sheet and given strong trading, the company also said it plans to increase its gearing over the next two to three years and the board is recommending a payout of around 55p a share to investors as part of a restructuring.

Shareholders are also in line to receive a final recommended dividend of 12.3p, making a total of 18.9p for the year - up by 50 per cent on 2009.

Tony Shepherd of Charles Stanley maintained his hold recommendation on the shares which have been among the FTSE100's strongest performers.He said: "The excellent share price performance over the last 12 months and the high share rating has possibly led to some profit taking but overall we were pleased with the dividend decision and the return of capital and the outlook remains positive."

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