SHARES in Aggreko surged to a record high yesterday after the Scottish supplier of temporary power said it expects this year's profits to be ahead of 2010, despite the absence of major global sporting events in 2011.
Aggreko hopes to provide more power to disaster-hit Japan.
The update from the Glasgow-based company, whose generators have lit up events such as the inauguration ceremony of US President Barack Obama and last summer’s football World Cup in South Africa, came just ahead of its annual meeting yesterday.
Rupert Soames, Aggreko’s chief executive, told shareholders at the city’s Radisson Hotel that last year had been an “annus mirabilis” (Latin for wonderful year), and that the trading profit for this year was expected to be “slightly ahead” of 2010.
Aggreko reaped £87 million in revenues in 2010 from a hat-trick of major sporting events – the Vancouver Winter Olympics, World Cup and Asian Games – and revenues, stripping out these events, were up by 9% on the same period a year ago.
At the same time, revenues from the International Power Projects unit were up by 19% with orders in the Bahamas, Argentina, Oman and Indonesia. Local business revenues were 18% higher, with North America and Australia enjoying particularly strong growth.
Aggreko shares yesterday surged 4.4%, or 76p, to 1786p, valuing the company at around £4.6 billion.
Mr Soames said strong order intake in recent months and the healthy pipeline of enquiries had prompted Aggreko to make plans to raise the rate of its fleet capital expenditure in the second half by £70m, and to spend around £390m across the group this year.
“That means the workforce in Dumbarton will be working flat out,” said Mr Soames, who is the grandson of wartime prime minister Winston Churchill.
Aggreko’s Dumbarton operation, where last year it added a new £20m generator-assembly facility, has recently increased its workforce from 120 to 300.
Meanwhile Mr Soames said its deal to supply 200MW emergency power to the Tokyo Electric Power Company to aid earthquake-struck northern Japan for a year has been valued at $100m (£60m), and that since last week’s announcement of a letter of intent, the agreement with the Japanese utility had since become a formal contract.
Asked if Aggreko planned to provide further emergency power to Japan, Mr Soames said: “Let’s get through the summer first. The first shipment of generators will be there in June and the balance will arrive in July.
“At the moment, we don’t have the capacity, but whether they will want power later in the year, we just don’t know. We will have to see.”
The reactors at the Fukushima nuclear plant affected by the earthquake and tsunami last month each produce between 460MW and 1100MW.
Mr Soames said: “We are able to supply 200MW right now and will talk to them later in the year to see if they would like some more.”
He added that Aggreko had been approached by a number of private companies in Japan, but had decided to “concentrate on the utilities”.
The group is planning to return £150m to shareholders in July via a B share scheme. Further funds will be returned in the next two to three years.
Mr Soames added: “Aggreko has a lot of private shareholders, and I think they appreciate we are not some monstrous group that only cares about its institutional investors.”
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