While revenue from Aggreko's (AGK) core rental solutions division remained flat in 2019, underlying operating profit jumped more than a fifth to £133m thanks to higher pricing in North America and cost savings. This offset a 6 per cent drop in the average megawatts (MW) on hire and lower utilisation.
Over in ‘power solutions’ – which deals with emerging markets – the industrial segment saw underlying operating profit dip 7 per cent to £64m amid a lower order intake and increased competition in Eurasia. Pricing pressure also drove a 1.4 percentage point contraction in the margin to 14.8 per cent.
Payment delays from certain regions continued in utility power solutions, but better overall cash collection contributed to a £107m working capital inflow. This pushed cash generated from operations up by almost half to £628m. Capital expenditure on the fleet was a touch lower at £189m, but is expected to rise to between £200m and £250m this year. Including £101m in lease liabilities, net debt ticked down 15 per cent to £584m, in line with adjusted cash profits.
Peel Hunt forecasts adjusted pre-tax profit of £241.5m and EPS of 60.6p in 2020, falling to £227.1m and 56.8p in 2021.
| AGGREKO (AGK) | |||||
| ORD PRICE: | 722p | MARKET VALUE: | £1.8bn | ||
| TOUCH: | 721-722p | 12-MONTH HIGH: | 881p | LOW: | 658p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 14 | ||
| NET ASSET VALUE: | 536p | NET DEBT: | 43%* | ||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) | |
| 2015 | 1.56 | 226 | 63.3 | 27.1 | |
| 2016 | 1.52 | 172 | 49.0 | 27.1 | |
| 2017 | 1.70 | 149 | 40.0 | 27.1 | |
| 2018 | 1.76 | 182 | 49.1 | 27.1 | |
| 2019 | 1.61 | 199 | 50.8 | 27.7 | |
| % change | -9 | +9 | +3 | +2 | |
| Ex Div: | 23 Apr | ||||
| Payment: | 21 May | ||||
| *Includes lease liabilities of £101m | |||||
