Aggreko set for a World Cup windfall

Marion Dakers
TEMPORARY power supplier Aggreko predicted better than expected annual results yesterday, thanks to lucrative contracts to power events like the 2010 World Cup.

The FTSE 100 company said in a trading update that revenues will grow by around 10 per cent, and pre-tax profit by about 20 per cent.

The firm said it expects to see a 16 per cent increase to revenues from short term contracts, mainly through its work at the World Cup, Glastonbury Festival and the Winter Olympics in Vancouver.

Aggreko will deliver broadcasting power to all ten World Cup match venues, as well as power and temperature control at the broadcast centre – its biggest ever contract for a sporting event.

The firm also announced it had secured a record number of new contracts in the first half of the year, including large amounts of work in Bangladesh, Indonesia, and Central and South America.

Chief executive Rupert Soames is travelling to Africa today to highlight the need for its products on the continent, as part of the firm’s international expansion.

Growth in Africa has been affected by the end of several large contracts in Kenya and Yemen, after local power sources became fully operational.

Revenue for the firm’s international power project is still set to grow by around eight per cent.

The company said rentals of its generators, heaters and coolers have “accelerated markedly” during this quarter, with around 18 per cent more rentals by power volume expected by the start of the third quarter.

Capital expenditure will now rise to £265m this year, up £45m, with half going towards the introduction of low emission generators in North America and half towards the company’s international expansion.

The firm said that rates “remain weak”, but are showing modest signs of improvement.

Market expectations for full-year pre-tax profit currently range between £239m and £280m, with the consensus at £257m, according to a Thomson Reuters analyst poll.

Aggreko was founded in Holland in 1962, and the firm now has 3,500 staff worldwide.