Aggreko achieves Olympic success again


Aggreko has won a £37m exclusive contract to provide temporary power for the 2012 London Olympics and the Paralympic Games. This will be the fourth successive summer Olympics to be powered by the Glasgow-based hirer. Last year the company undertook similar contracts for the Winter Olympics in Vancouver, the FIFA World Cup in South Africa and the Asian Games. These three events accounted for £90m of revenues. A recent trading statement from Aggreko suggests it will have put in another excellent performance in 2010. The company said it expected profits before tax to have risen by 25% in 2010 to £305m. It told investors that trading in the final quarter had been better than anticipated; group revenues for last year are expected to have increased by 20% to £1.22bn. At the same time, the company has strengthened its balance sheet with net debt at the end of the year standing at approximately £145m, £30m less than at the end of 2009. This is after fleet capital expenditure of £260m and a further £15m spent on an acquisition in the US. Aggreko’s Local business division saw underlying revenue growth of 20% in the final quarter, with its largest regional business, North America, achieving 30% and a similar level being reached by Aggreko International. Underlying growth in the European and Middle Eastern businesses was more restricted at 10%. The company indicated that underlying volumes and rates had improved in most markets, and that underlying trading margins across the division were expected to show year-on-year improvements. In calculating the underlying growth figures, Aggreko excludes the revenues and profits coming from the major international sporting events referred to above because there will be no events of comparable size in 2011. Trading at Aggreko’s other division, International Power Projects, improved in the last quarter with revenues up 12%; growth for the full year was said to be approximately 10%. Aggreko expects to invest £320m in its fleet next year. In particular, it is looking to expand the proportion of its generators powered by gas, rather than diesel, in response to customer demand for the use of more environmentally friendly fuel. Currently, 5% of the fleet is gas- powered but Aggreko plans to raise this to 9% by the end of this year.


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