Takeover target Aggreko’s revenue falls to £1.3bn

Glasgow-based mobile power giant Aggreko said on Monday its revenue fell about 15% to £1.36 billion in the year to December 31, but the firm reported an underlying pretax profit of £102 million that was slightly ahead of its initial guidance of £80 million to £100 million.

Loss before tax and post-exceptional items was £73 million.

Aggreko is proposing a final dividend for 2020 of 10p, resulting in a full year dividend of 15p.

On February 5, Aggreko shares rose about 35% after it confirmed it is discussions with a consortium that includes TDR Capital LLP and I Squared Capital (US) LLC in relation to a possible cash offer for Aggreko at £8.80 per share worth about £2.25 billion.

The consortium has until March 5 to either announce a firm intention to make an offer for Aggreko or announce that it does not intend to make an offer.

On Monday, Aggreko said: “We are encouraged by the recovery we are seeing in our markets, despite wider macro uncertainty.

“The positive momentum we have experienced in early trading, together with the work to date on our strategic initiatives, underpins our confidence in making progress in 2021, notwithstanding the recent strengthening of sterling.

“In Rental Solutions, we are seeing good recovery in a number of our key sectors, in Power Solutions the major contracts delayed by the pandemic are now mobilising, and our global events team is busy and progressing well with its preparations for the Tokyo Olympics.

“Reflecting this positive outlook, together with the group’s financial strength, the board has proposed a final dividend for 2020 of 10 pence per share.”

Aggreko CEO Chris Weston said on Monday: “Aggreko has demonstrated resilience, professionalism and the critical nature of its services through the pandemic and I am very proud of our performance this year.

“We quickly established near-term priorities: we looked after our people, maintaining high levels of engagement; supported our customers, achieving our highest Net Promoter Score to date; and maintained our financial strength, delivering a strong cash performance in 2020.  

“We enter 2021 well positioned for the recovery which we are seeing in our markets and this momentum supports our confidence in the business going forward. 

“We have also set out our strategy for the energy transition, providing industry-leading commitments to be net zero by 2050, while achieving profitable growth and mid-teens ROCE in the medium-term.

“We are pleased with our progress in the transition to date, recently winning a solar-hybrid contract for a mine in Chile, and starting work on upgrading our Dumbarton facility into a hub for our net-zero initiatives.

“Reflecting the Board’s confidence in the outlook for the business and our financial strength, we are proposing a final dividend for the year of 10 pence per share.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.