The share price of Aggreko (AGK) was up by around a quarter in the month prior to release of full-year figures, which themselves precipitated another mark-up. The temporary power provider is still facing challenging trading in a number of locales, but it's clear that the group's warning on "slightly lower" first-half profit in 2016 fell short of investors' worst-case scenario.
Revenue declined marginally from a year ago, along with the trading margin, and although adjusted pre-tax profit of £252m settled at the lower end of guidance, it was still ahead of consensus. Moreover, the group continues to generate strong levels of operating cash flow and is on track to deliver around £80m in cash savings by 2017.
Aggreko's management may be driving down ongoing costs, but it has one eye over the horizon; fleet expenditure actually increased by 5 per cent to £237m, partly through investments designed to drive fuel efficiencies in the group's diesel fleet. Overall, the balance sheet gives no particular cause for concern, with net debt to cash profit standing at an undemanding 0.9.
Prior to these figures Barclays was anticipating adjusted pre-tax profit of £230m for 2016, giving EPS of 66.3p.
| AGGREKO (AGK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,032p | MARKET VALUE: | £2.64bn | |
| TOUCH: | 1,032-1,033p | 12-MONTH HIGH: | 1,693p | LOW: 763p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 435p | NET DEBT: | 44% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.40 | 324 | 98.0 | 20.79 |
| 2012 | 1.60 | 367 | 104 | 23.91 |
| 2013 | 1.60 | 333 | 92.2 | 26.30 |
| 2014 | 1.58 | 289 | 82.6 | 27.12 |
| 2015 | 1.56 | 226 | 63.5 | 27.12 |
| % change | -1 | -22 | -23 | - |
Ex-div: 21 Apr Payment: 24 May | ||||
