Temporary power supply hire company Aggreko has celebrated its seemingly inexorable growth with a hefty dividend hike. The plan is to mimic this rise with the final dividend, too - that underlines the earnings growth achieved in recent years and the rosy outlook.
The international power projects business, which has been thriving in a world of decaying and underdeveloped infrastructure, saw a 12 per cent rise in trading profits on a constant currency basis to £78m. A record order intake promises strong trading in the second half, although some of this will be offset as two large contracts finish. Increased use of Aggreko's power generators helped lift divisional margins from 33 per cent to 34 per cent.
Meanwhile, the local power business benefited from the Vancouver Winter Olympics and the Fifa World Cup, as well as disasters such as the Nashville floods and the BP oil spill. Trading profits surged 47 per cent to £52m and, while the underlying business is showing signs of recovery, this will make for tough comparisons in 201l. New markets in Russia and India are also performing well.
Reflecting management's optimism, full-year capital expenditure is set to rise from £150m to £265m. Broker Investec forecasts full-year pre-tax profits of £290m and EPS of 74.2p (£247m and 63.3p in 2009).
| AGGREKO (AGK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,426p | MARKET VALUE: | £3.9bn | |
| TOUCH: | 1,422-1,426p | 12-MONTH HIGH: | 1,637p | LOW: 640p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 252p | NET DEBT: | 23% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 500 | 106 | 26.8 | 4.37 |
| 2010 | 584 | 126 | 32.5 | 6.55 |
| % change | +17 | +19 | +21 | +50 |
Ex-div: 20 Oct Payment: 22 Sep | ||||
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