Shares in temporary power provider APR Energy (APR) slumped as much as 12 per cent as the risks of operating in unstable countries hit home. Particular hot spots include Libya, which appears to be teetering on the brink of another civil war and Western Africa where a resurgent Boko Haram terrorist group and the Ebola outbreak are making conditions challenging.
Chief executive Laurence Anderson says that the impact on APR is twofold. Firstly, potential customers are taking longer to make decisions and secondly, it is costing APR more to insure its equipment and people and provide security.
Mr Anderson certainly had a tough story to sell on his first day in the job having moved over from the President role in a shake-up triggered by the exit of chairman Mike Fairey. There was some better news on contract wins though. APR announced a record level of contract renewals at 1,206 megawatt so far this year and a renewal rate of over 90 per cent.
Elsewhere, a new contract in Australia is complicated by the fact that the previous counterparty Forge Group went bust earlier this year and APR is involved in a wrangle with the receivers over the ownership of the assets. Mr Anderson says the legal case is likely to drag on for some time but that he is; "optimistic about the outcome."
Broker Peel Hunt expects adjusted earnings per share of 93.3¢ this year (from 60¢ in 2013).
| APR ENERGY (APR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 502p | MARKET VALUE: | £473m | |
| TOUCH: | 501-503p | 12-MONTH HIGH: | 1,177p | LOW:423p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 1,524¢* | NET DEBT: | 36% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 87 | -16 | -15.1 | 3.3 |
| 2014 | 254 | 54 | 50.1 | 3.3 |
| % change | +192 | - | - | |
Ex-div: 10 Sep Payment: 10 Oct *Includes intangible assets of $676m, or 717¢ a share £1 = $1.67 | ||||
