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Opinion

Aggreko dealt another blow

Aggreko dealt another blow
December 18, 2015
Aggreko dealt another blow
IC TIP: Sell at 904p

The group has had a torrid year of trading, primarily due to its exposure to weak oil and gas markets. One-off contracts such as those from sporting events, usually provide an uplift to the group's earnings. For example, Aggreko gained £60m in revenue for contracts to provide power to the London 2012 Olympic and Paralympic Games. This accounted for more than a quarter of the group's European revenue that year. Aggreko has also faced security troubles in Yemen and Libya. Management are forecasting trading profit of between £250m and £270m for 2015, compared with £306m in 2014. As the chart below shows, adjusted earnings per share are forecast to fall to 74p, according to Bloomberg consensus figures.