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Aggreko

Aggreko confident on hitting full-year numbers after "encouraging" first half

The company is currently in the midst of a turnaround programme that will see £50mln extracted from its cost base

aggreko generator
The company's generators were used at the Winter Olympics

The temporary generator specialist Aggreko PLC (LON:AGK) said it was on course to meet full-year earnings expectations after an “encouraging” first-half performance.

Reiterating its plan to deliver a return on its invested capital in the mid-teens by 2020, the company weighed in with a pre-tax profit of £59mln for the six months ended June 30.

The figure was down 7% year-on-year, but if you ignore rising fuel costs, which are passed on to the end user of the kit, underlying growth was 8%.

Revenues were £857mln, up 14% on an underlying basis, with the rental solutions business (up 32%) leading the way. The laggard was power solutions utility, where sales were off 15%.

Investors will receive a 9.8p interim payout – in line divi with this time last year.

On track to deliver full-year guidance

"These are encouraging results that keep us well on track to deliver our full-year guidance,” said chief executive Chris Weston.

“As we continue to execute on our strategy, we have also completed a comprehensive review of the group's expected performance over the medium term. 

“Based on this review, and the detailed action plans we have developed, we are confident that the group can deliver a return on capital employed in the mid-teens in 2020 with potential for further improvement beyond this."

The company is currently in the midst of a turnaround programme that will see £50mln extracted from its cost base.

The ultimate plan is to create a business with fatter operating margins that delivers a punchier return on capital.

Quick facts: Aggreko

Price: £7.93

Market: LSE
Market Cap: £20.18 m
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