Aggreko ups profits guidance

25th Aug 2011 07:30

The absence of big sporting events meant that first half profits for Aggreko, the high-flying supplier of temporary power and temperature control, took a bit of a dip, but that did not stop the company from increasing its full-year profits guidance."Although the prospects for the global economy in the months ahead are uncertain, we believe that we are well placed to deliver a strong second half, and that profit before tax and amortisation for the year as a whole will be higher than we indicated at the time of our trading update at the end of June; we now expect it to be around £315 million," said Aggreko's chairman, Philip Rogerson. "This would equate to a rate of growth in underlying profits of around 24%," he added.Profit before tax eased 5.0% to £120.7m from £127.1m in the first half of last year. Trading profit, defined as operating profit before any gains on the sale of property, plant and equipment, eased 3.1% to £127.1m from £131.2m, but underlying trading profit, which excludes exchange rate fluctuations and the impact of big sporting events such as the World Cup, rose 17.1%.Group revenue rose 9.2%, or 21.1% on an underlying basis, to £637.2m from £583.6m last year. "We generated nearly £50m of revenue from one-off sporting events in the first half of 2010, and consequently the headline numbers in 2011 were always going to make tough comparators," explained Aggreko's chief executive, Rupert Soames. "However, the underlying rate of growth in revenues is running at over 20%, and it is also encouraging to note that this growth is being delivered by both the Local business and International Power Projects," Soames continued, adding that the company is "well placed to deliver a strong second half."Underlying revenue grew by 27.0% to $185.3m in North America while underlying trading profit surged 66.8% to $27.6m. In contrast, although underlying revenue in Europe and the Middle East rose 7.9% to £132.1m, underlying trading profit tumbled 26.8% to £9.7m.The International Local business saw underlying revenue rise 29.4% to £78.2m, while underlying trading profit advanced 23.3% to £14.6m. The International Power Projects (excluding fuel) division saw underlying trading profit improve 17.2% to $136.7m on the back of a 24.0% rise in underlying revenue to $418.5m.Further good progress in the International Local business has been made in the first weeks of the second half, with double-digit percentage growth in megawatts of power on rent, and most Local businesses showing some improvement in rates; temperature control volumes are at similar levels to last year, the company said.The International Power Projects "has good momentum" with megawatts on rent now more than 25% higher than at the corresponding stage of last year. Net debt increased by £125.0m to £257.2m in the period. Aggreko had bank facilities and private placement funding totalling £762.8m at 30 June 2011, giving it plenty of debt headroom. The interim dividend has been increased by 10% to 7.20p. --jh