Aggreko outperforms guidance
By Thomas Allen06 March 2019
Aggreko has reported 10% growth in underlying profits, outperforming the guidance it gave at the start of 2018.
Chris Weston, CEO of the company, said, “We are pleased to report results which continue the positive momentum demonstrated at the interims.”
On an underlying basis, which accounts for items that distort the figures, group revenue rose by 8% to £1.8 billion, from £1.7 billion in 2017.
Within that, underlying revenue from Rental Solutions, which represents 52% of group revenue, was up 22%. Meanwhile, Power Solutions Industrial, which represents 27% of group revenue, saw a 7% rise in underlying revenue, and Power Solutions Utility, representing 21% of group revenue, enjoyed an increase of 14% in underlying revenue.
Return on Capital Employed (ROCE) fell by 0.4 percentage points from 10.7% in 2017 to 10.3% in 2018, but it was up 0.5 percentage points on an underlying basis. Aggreko is currently implementing plans to improve its ROCE, including the launch of a £50 million cost reduction programme.
Fleet capital expenditure came to £196 million. Although this was down on the £246 million recorded in 2017, Aggreko said it reflected the company’s increased discipline and focus on utilisation.
Weston said, “With the wide-ranging initiatives we are implementing to improve our operational and capital efficiency, we are confident we can meet our mid-teens ROCE target in 2020.”
Towards the end of last year, Aggreko was awarded the supply contract for temporary electricity generation for the Olympic and Paralympic Games in Tokyo, worth an expected US$200 million revenue in 2020.