More on Aggreko
Aggreko trading statement
A brief trading statement suggests that a lot is now going right Aggreko (which supplies power, heating, air conditioning and compressed air systems on rent) - after an extended period of disappointments.
The better than usual revenues from the North American storm season are not surprising given the extensive destruction seen this year. The company has also benefited from high temperatures in the Southern US so, despite the company’s claims of underlying growth, we would expect little growth next year.
The European operation looks like it will turn around and produce some year-on-year growth after a decline in the first half. It will also produce more cost savings than previously expected, however Aggreko does not quantify the extra expected gains.
At 240p Aggreko is trading on a prospective PE of 20× which is not outright cheap. The 2.6% expected dividend yield also does little to support the price. However Aggreko has good medium term prospects. In addition Aggreko International Power Projects, which builds larger scale generation (i.e. for national grids rather than for end users has a great deal of growth potential, and on a more permanent basis) has a great deal of long term potential and is performing strongly at the moment.
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