QUESTIONS about the living wage, earthquakes and Russia were among those put to directors of energy rental business Aggreko at yesterday’s annual meeting as it reported trading in line with expectations but said conditions in some of its markets remained tough.
“Will you be extending the living wage to cleaners and caterers who work with Aggreko?” asked Disni Jayasuriya, a representative of ShareAction, a lobby group that helps pension companies consider human rights, business ethics and the environment in their policies.
Chairman Ken Hanna said the Glasgow-business – which has 7,300 staff, including 450 in Scotland – paid the minimum wage to all its employees, and the National Living Wage to all its UK employees.
“We do properly screen and check contractors and suppliers,” he added. “But we can’t guarantee that everyone supplying a service to Aggreko pays the minimum living wage. We’ve got literally thousands of suppliers and we require them to be compliant. But we don’t have the resources to check them.”
Alastair Salvesen, whose family owns a 10 per cent stake in Aggreko worth around £270 million after the Glasgow-based business was spun off from the former Christian Salvesen Scottish shipping and logistics empire in the 1990s – asked whether Aggreko’s mobile power generators would be deployed in the recent earthquake zones in Ecuador or Japan.
“It’s very sensitive when these things happen, but we do get people on the ground very quickly,” chief executive Chris Weston replied. “We have had people on the ground in Ecuador and Japan to see whether there are any power requirements, but it’s too early to tell at the moment how that might progress.”
Another Salvesen family member, Robin Salvesen, former head of the Christian Salvesen shipping division, noted Aggreko’s ‘extraordinary’ progress in Russia.
“Our business in Russia is growing and was up about 40 per cent year on year in the first quarter,” Mr Weston said. “Most of that work is with large oil and gas customers. Businesses are financially stretched and they’re looking to rent a product from the likes of Aggreko rather than buying. We’re a beneficiary of that at the moment but we’re very careful about sanctions and who we’re dealing with.”
Asked about Brexit, Mr Hanna said: “Unlike the Scottish referendum, where we put our head above the parapet, we’ve decided we’ll handle [the outcome of the EU referendum] either way and it shouldn’t have a material impact on our business.”
Small shareholder Richard Evans asked why accountancy firm PwC, which has audited the firm for 19 years, was standing down. Mr Hanna explained the need to rotate auditors after a certain period had started under EU legislation and had since been adopted in the UK.
The company, which supplies temporary power generators, chillers, heaters and dehumidifiers to clients in more than 100 countries, said its guidance of slightly lower full year pre-tax profits for 2016 was unchanged. In the first quarter, underlying revenues declined 14 per cent in line with expectations.
“Aggreko is a great business,” Mr Weston said. “We clearly fulfil a critical need to provide power where it’s needed most anywhere in the world. I’m pleased with the progress we’re making in some challenging market conditions.”
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