Our contrarian sell advice on temporary power provider Aggreko (AGK), at the time one of the fastest growing and strongest momentum shares in the FTSE 350, proved well founded as a profit warning and a sharp sell-off followed. But now Aggreko has reassured the market that it is on target to hit earnings targets after it reported an 8 per cent increase in underlying group revenues in the first quarter to March, driven by strength in the local power business.
There was also some encouraging news from the power projects business. While trading at the division remains subdued, but in line with analysts’ expectations, the company has pointed to an improved pipeline of prospective work.
Aggreko also provided more detail on its fleet investment plans, saying that it expects to spend £260m in the full year. This is short of JPMorgan Cazenove's expectation of £295m, but analysts there left adjusted pre-tax profit forecasts unchanged at £354m, giving EPS of 95.8p.
