AGGREKO chief executive Chris Weston has revealed the firm will deploy more than 500 staff in Japan under its contract to provide power solutions to the Tokyo 2020 Summer Olympics, while facing criticism from a familiar detractor at the company’s annual meeting in Glasgow.
Speaking after the meeting, Mr Weston hailed the coup of landing the $200 million (£155m) Olympic deal, which will see the company provide power to 44 venues – up from 35 at the London Olympics in 2012 – as well as the athletes’ village and international broadcast centre. Aggreko, which will supply power to this year’s Rugby World Cup in Japan, will also work on the Games’ opening and closing ceremonies.
Mr Weston, who joined Aggreko from Centrica in January 2015, said work on the project had already commenced. He said: “I was really excited we won that. A $200m contract is a big contract. It is going to take a lot of hard work, which we are beginning to do now. We already moving people into country. We have a depot there, [and] we have an office there all designed to support the Olympics.
“The mobilisation is going as well as we would expect it to at this stage.”
READ MORE: Aggreko hails US resurgence as profits hit by currency headwinds
Mr Weston had earlier faced criticism during the meeting from a familiar shareholder, who notoriously called for Mr Weston to stand down and offered the board the phone number of former boss Rupert Soames at the company’s AGM in 2017. The investor questioned the board yesterday on succession planning for Mr Weston and asked whether his departure would be in a matter of weeks or months. He also criticised the firm’s earnings per share performance.
Mr Weston received strong backing from chairman Ken Hanna, who declared that the chief executive had the full backing of the board and major shareholders.
Responding to the observation that the share price was once £25 per share, which it reached around the time of 2012 Olympics, Mr Hanna said: “It is a different market now.”
READ MORE: Glasgow power giant boosted by US oil and gas recovery
He added that Mr Weston had inherited a legacy of contracts coming to an end in countries such as Argentina, Bangladesh and Japan, which were signed amid more favourable conditions.
Mr Weston, who saw 99.9% of voted shares go in favour of his re-election, said: “The results were good this year. The share price is going in the right direction. 99.99% of people voted in favour and everyone is entitled to their own view.”
All resolutions at the meeting were carried.
Meanwhile, in a week of increasing protests calling for action on climate change, Mr Weston said demand from customers for more environmentally-sound solutions was still “largely on the fringe”. He said: “Most of our customers are industrial customers, and they have an urgent short-term need for power. If they are doing maintenance or a turnaround on a pet-chem (petrochemical) and refining plant, you can’t even begin to think of deploying renewables or storage. It is not reliable enough, and they won’t have the space to do it.
“But you do find instances where customers who are off-grid, like a mine site, are increasingly concerned about it. So, we are seeing it more and more. The pipeline probably has about 100 opportunities in it. They (customers) will often show an interest, as long as it doesn’t cost more.”
Mr Weston highlighted the development of its hybrid power products as part of its environmental agenda, and pointed to the capability brought by its £40 million acquisition of Younicos, the battery solutions provider, in 2017.
Asked whether climate change is a concern for investors, he said: “Almost every interaction I have with an investor, they will ask about it. It is not asked from a position of concern. It is more interest because they know it is a growing issue in the energy market. [They ask whether] it is an opportunity or a threat, and I see it very much as an opportunity. Investors see it the same way.”
Aggreko’s results for 2018 revealed the resurgence of activity in the US shale market, which helped its rental solutions arm increase revenue by 19% to £822m. Mr Weston said that momentum has carried into the current year.
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