Shares of Aggreko (LSE: AGK) rose by up to 4% in early trade, after the temporary power supply outfit unveiled better results than the market was expecting. Underlying revenue rose by 12% in the six months to 30 June, driven by Aggreko’s local business, which rents products such as small generators and temperature control equipment to everyone from small butchers to large utility and oil companies.
Aggreko’s power arm, meanwhile, installs and operates equipment to deliver power to communities which don’t have ready access to electricity. Underlying revenue from power projects increased 14%, although a decline in military business hurt margins.
On a reported basis Aggreko suffered from currency fluctuations and, allowing for currency translation, group revenue increased 1% to £768m. The interim chief executive, Angus Cockburn, played down the issue. “It doesn’t affect the long-term operational performance of the company,” he said.
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Mr Cockburn is leaving Aggreko on 30 September 2014 after 14 years with the company. Ken Hanna will assume the role of executive chairman until the arrival Chris Weston from Centrica, who is presently serving a 12 month notice period, after which he will take centre stage as Aggreko’s new CEO.
Aggreko has some tough comparators in the second half of the year, but still expects to deliver growth. After this morning’s price movement Aggreko shares trade on a P/E of 22.
The stock has performed tremendously well historically, rising almost ten fold over the last decade, although year-to-date it’s down 3%.
