Aggreko shares hit by slowing sales growth

The world’s largest supplier of temporary power yesterday said sales for the first six months would likely be 15 per cent up on the previous year.

But this signalled slower growth in the second quarter. Analysts said all regions appeared to have decelerated, particularly North America.

Glasgow-based Aggreko was also hesitant on the outlook for the second half, noting the “weakening macro-economic environment” would reduce underlying growth in its local business.

However, the firm added that this should be offset by the impact of the London Olympics – a contract valued at £50 million – and the acquisition of South American rival Poit Energia.

Its international division is expected to deliver faster growth in the second half of the year, leading the group to boost its investment in new generating equipment by a further £50m.

Analysts said the update was in line with previous expectations, but noted that investors were accustomed to upgraded forecasts from Aggreko.

While yesterday’s news did not amount to a downgrade, the lack of a fillip weighed on the shares, pushing them down more than 4 per cent or 94p to 2,066p.

Nonetheless, analyst John Lawson of Investec said Aggreko was still turning in a “robust performance”.

He said: “Aggreko continues to perform strongly and, whilst some may be disappointed at the lack of earnings upgrades, it is worth noting that the group has increased its 2012 fleet investment plans by £50m to £415m.”

Aggreko provides generators to cover electricity shortfalls and to power live events around the world, including a number of major sporting competitions. It latest contract, announced yesterday, is to supply 75 megawatts to Japanese utility Hokkaido Electric Power Company.

Its generators are made at a newly-opened facility employing 400 people at Dumbarton near Glasgow.

Trading profit is expected to rise by 20 per cent in the first half, despite an apparent slowing in growth from 21 to 9 per cent between the first and second quarters. Demand in the international division is expected to exceed 700 megawatts in the first half.

Analysts at Seymour Pierce have pencilled in a pre-tax profit of £387.5m for the full year against a consensus estimate of £371.8m, while Peel Hunt is sticking with its more subdued forecast of £370m.

Aggreko reported a 6 per cent rise in profits to £327m in 2011 despite servicing fewer large one-off events than in the previous year.