Aggreko shares slide despite profit forecasts powering on

Despite the positive update, shares in the company fell back, with analysts saying the good progress was already priced into the shares which have been one of the FTSE100's strongest performers this year.

The lack of major sporting events scheduled for next year - compared to the current year which has seen Aggreko supply power to the World Cup and the Vancouver Winter Olympics - was also cited as a factor.

Despite yesterday's fall of 70p, or 4.2 per cent, to 1,592p , the shares are still at more than twice the level they were a year ago and up by almost 20 per cent since late August.

In its interim management statement, the company said revenues in the three months to 30 September were 30 per cent higher than in the same period in 2009 on a constant currency basis and that trading margins were at similar levels to last year.

It said the strength of recent trading and expectations for the fourth quarter means that it now believes that pre-tax profits for the year will be around 300 million, ahead of the consensus 290m pencilled in by analysts.

But analysts at Bank of America Merrill Lynch said that, with the shares trading on 20 times prospective earnings for 2011, the trading update was "probably not enough to let the shares push on from here".

JPMorgan also said it expected lower revenues from major events next year.

"We believe the rating continues to look full given the headwind that the group faces in the coming year. For that reason we remain comfortable with our neutral recommendation on the shares," it said in a note.

Aggreko said revenues in its international power projects business, which provides power plant to developing countries, grew by about 11 per cent in the quarter.

Major orders in the period included projects in Cameroon, Indonesia, India and Martinique.

Earlier this week the company also announced it was in the final stages of formalising a three-year contract for 150MW of gas-powered generation in Bangladesh which is expected to be worth around 114m and which follows an earlier power supply agreement in the country.

The update said conditions in its local business, which rents out small-scale generation or refrigeration plant for customers to operate themselves, also continues to improve with revenues growing by 34 per cent.

Performance in North America was particularly strong and revenues in the quarter grew by 36 per cent after a poor year in 2009. High temperatures drove strong demand for temperature control and demand across all products was strong in the manufacturing and petrochemical sectors.Revenues in Europe and the Middle East grew by 11 per cent

"We expect the local business to make further strong progress in the fourth quarter, and all three regions are performing ahead of our expectations," said the company.

The division was buoyed recently by the award of a contract for the Asian Games and the Asian Para Games in November and December and will provide power generation and distribution at 16 stadiums. It will also be providing power to support the opening and closing ceremonies of both games.

Aggreko said that it expects the international power projects business will continue to perform in line with expectations thanks to recent strong order intake. The update also revealed that net debt at the end of the quarter fell to 155m, down by 4m on the previous quarter, 72m lower than last year.