Aggreko adds £30m to fleet spend budget

AGGREKO, the temporary power supplier that provides energy for the Glastonbury festival, yesterday announced plans to boost investment in its fleet of equipment by £30m.

The higher spending, which comes on top of a £70m increase announced in April, is intended to soothe fears that principal rival APR could steal market share.

Despite reporting accelerated growth over the last six months, shares in the FTSE 100 company fell 3.7 per cent, suggesting that investors remain cautious following the acquisition of APR by entrepreneur Hugh Osmond.

Aggreko’s share price has been in decline since the £527m deal was announced last week, on fears that Osmond will invest to make APR a more serious threat.

Group revenue for the first half of the year was nine per cent higher than in 2010 and the £30m spending boost means capital expenditure will jump this year by £100m to £420m.

Underlying profit is expected to be “a little higher” than the firm forecast in April, although the weakness of the US dollar, which is the company’s preferred currency worldwide, will hamper growth.

Mike Murphy, analyst at Numis, estimates that this factor will reduce profit growth by three per cent.