Growth heating up at Aggreko

20th Jun 2011 07:05

Temporary power and temperature control provider Aggreko saw an acceleration in the rate of underlying growth in the second quarter.The group now expects that revenue in constant currency and excluding pass-through fuel in the first half of 2011 will be about 9% higher than in the corresponding period of 2010. Trading profit is expected to be similar to 2010, representing 20% growth in revenue and 17% growth in trading profit on an underlying basis (i.e. in constant currency and excluding revenues from pass-through fuel and major events held in 2010, such as the Vancouver Winter Olympics, FIFA World Cup and the Asian Games). The International Power Projects (IPP) division is expected to see 22% year-on-year growth in the first half of 2010, in constant currency terms and excluding pass-through fuel.The year-on-year growth in megawatts (MW) on hire has accelerated from 14% at the start of the year, and is likely to be around 25% at the start of the second half for the IPP division; order intake for the first half will be at least 530 MW, the company said. Trading margin, excluding pass-through fuel, will be at a similar level to that achieved in the first half of last year.Moving on to the Local Businesses unit, revenues in the first half will be broadly similar to 2010 in constant currency, but will grow by around 17% on an underlying basis (i.e. in constant currency and excluding the revenues generated from the major events previously noted). Trading margin in the first half in the Local business is expected to be at similar levels to last year on an underlying basis.In view of the encouraging performance and taking into account a healthy pipeline of enquiries, the group has decided to raise the rate of fleet investment by a further £30m, on top of the £70m increase it already announced in April, taking its forecast fleet capital expenditure for the year to around £420m."We now believe that the rate of growth in underlying profits for the year as a whole will be a little higher than the 20% underlying trading profit growth that we expected at the time of our interim management statement on 27th April 2011," the company said. "We reiterate our previous guidance for headline trading profit for the year to be slightly ahead of 2010, as the further strengthening of underlying profits will be offset by the weakness of the US dollar, which affects the translation into sterling of the profits of our International Power Projects and North American businesses," the company added. --jh