Aggreko looking to further growth with ‘strategic review’

Rupert Soames: bullish but unable to afford complacency
Rupert Soames: bullish but unable to afford complacency
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AGGREKO, the temporary power provider, has announced a five-year strategic review to determine how it should prepare to meet new challenges.

Chief executive Rupert Soames said that – despite the rate of growth being achieved by the company – it could not afford to be complacent.

“We need to see if there are new areas of business we need to be getting into,” he said, after unveiling a higher full-year profit helped by growing demand from developing countries.

“I have never worked for a business that has so much runway ahead of it, but no company is recession-proof. In 2008 and 2009, our businesses in North America and Europe took a whacking.

“But, generally speaking, recessions do not happen everywhere at the same time. The trick is to be present across the world so we can move equipment about.”

The firm said it was confident of strong growth in the first half of this year, but added that it was “more cautious” about the second half, given tougher comparatives.

“Our International Power Projects business has had very strong order intake in the first two months of the year, with almost 300MW of new orders taken so far, mainly in Africa, Asia and the Middle East,” the company said in a statement. It plans to spend £350 million on fleet capital expenditure in 2012, £30m more than previously announced.

Rising power demand in developing countries, where supply remains hamstrung by a lack of financing and the time required to install permanent capacity, has pushed up demand for services provided by companies such as Aggreko and market number two APR Energy.

Pre-tax profit for 2011 rose 6 per cent to £327m, slightly above estimates of £324.7m. Sales for the firm, which will provide temporary power for the London Olympics later this year, were up 14 per cent at £1.4 billion, also marginally above estimates of £1.38bn.

Shares in the company closed up a further 4 per cent at a record-high of 2,313p, valuing the business at £6.17bn, making it bigger than Sainsbury’s and Standard Life.