With its business split across local and international contracts, Aggreko has always had a challenge in balancing its short and longer-term contracts.
The former is the reason that this quarter’s comparisons were so tough – last year’s Olympics contract was a huge coup and one that added £37m in revenues to last summer. But the latter is the reason that investors have been selling out of the stock – sending it down more than nine per cent since the start of the year as contracts in Japan, Afghanistan and Iraq come to an end.
Aggreko seems confident in its pipeline, but some investors are clearly waiting to see whether that can be converted. In the meantime, others are seeing opportunities in the slump and focusing on improving figures in both North and South America, as well as that impressive performance against tough comparatives.
Trading may have been light, but there’s no doubt the latter group won out yesterday, putting Aggreko well in favour among the buyers who made it into the City.
If it keeps churning out solid results like this, they’ll be glad they made the effort.