Aggreko profit up amid coronavirus Olympic threat

Shares of Glasgow-based Aggreko, the world’s largest temporary power firm, rose 5% on Tuesday after it said its profit before tax rose 9% to £199 million in 2019 despite revenue falling 8% to £1.6 billion.

Full year dividend per share rose 2% to 27.7p.

However, Aggreko warned in its outlook: “Our underlying performance during 2019 provides good momentum into 2020 and our preparations for the Tokyo 2020 Olympic and Paralympic Games are progressing well. 

“Notwithstanding this, we are monitoring closely the development and potential impact of the coronavirus outbreak, both in terms of the Tokyo Olympics and the group more widely.  

“At this point, however, we currently expect to deliver results in-line with expectations for 2020. 

“We expect to make further progress on working capital and will continue our capital expenditure discipline with expected fleet capital expenditure of around £200-£250 million.

“This, combined with our performance outlook, underpins our confidence in delivering our mid-teens ROCE target this year and beyond, and we look forward to providing an update on our strategic priorities alongside our interim results in August.”

Aggreko CEO Chris Weston said: “Our 2019 results demonstrate the significant progress we have made to improve the group’s financial performance.

“We delivered underlying profit growth of 13%, driven by a strong performance in Rental Solutions, and a significant working capital improvement.  

“We are proposing a 3% increase in the final dividend, reflecting the board’s confidence in the sustainability of our performance.  

“We are well-positioned to meet our customers’ evolving needs in the changing energy market, with 185 MW of hybrid work secured and 30 Y.Cubes now under contract, reflecting the growing interest in lower-carbon technology and our new battery storage product.

“Going forward we believe that a continued focus on the four strategic priorities first set out in 2015 will underpin the achievement of our mid-teens ROCE target in 2020 and beyond.”