Financial Releases
Aggreko PLC Trading Update
21 Jun 2005
Aggreko plc, the world leader in the supply of temporary power, temperature control and oil-free compressed air services, is issuing the following trading update prior to meeting analysts and entering its close period in respect of the half-year ending 30th June 2005. Interim results will be announced on Thursday, 15th September, 2005.
Trading Overview
As indicated in the Trading Statement at the time of our AGM, trading performance in the first half has been encouraging, and we expect profit before tax to be ahead of last year.
Aggreko International’s trading profit in the first half will be ahead of last year in both local currency and sterling terms. This growth has been driven by the local business, which has produced strong performances in the Middle East, Singapore, and Australasia. In the International Power Projects business, revenues grew; profits, however, will be lower in the first half than in the prior year mainly as a result of costs related to the mobilisation of fleet to serve the significant number of new contracts we have recently won. These contracts will help to underpin performance in the second half, and we expect that profits in the International Power Projects business for the year as a whole will be ahead of 2004.
In North America, trading profit in the first half will be well ahead of last year in both local currency and sterling terms; this has been driven by a particularly strong first quarter. The base business continues to show good growth, but full-year comparatives will be impacted by the large military and storm-related revenues which were earned in the second half of 2004. We have now completed the acquisition of the temperature control rental fleet of Prime Energy, as previously announced, for a final consideration of $5.2m.
In Europe, first half trading performance will be lower than the prior year; however, most of the shortfall arose in the first quarter, and we expect that profit in the second quarter will be closer to the prior year. We remain confident that the investment we continue to make in the implementation of the new operating model will give the business a platform for future growth, and we expect performance in the second half to be well ahead of the first half. Our new European Managing Director, Kash Pandya, has now joined the business.
Strategy Update
The implementation of our strategy continues to make good progress. In International Power Projects, the drive for geographic expansion has resulted in us signing contracts in seven new countries in the first half, including our largest-ever contract win, worth an estimated $160m over three years including fuel, in Uganda. In North America and Europe the rollout of our new IT system continues, and during the period the system went live in the first two areas in the USA, as well as in France. In aggregate, about 35% of our business in Europe and North America is now being processed through the system, and the experience so far has been very positive. The performance of our Rental Centres also continues to improve. In International Power Projects, we have delivered and commissioned our first gas-fuelled units. We have also received orders for additional gas-fuelled capacity, and now have customer commitments to take a total of 20 MW; as a result of this, and our recent acquisition of temperature control rental assets in North America, it is likely that our capital expenditure for the full year will increase to between £75m and £80m.
Outlook
Looking forward, the business is about to enter its peak summer season, and the result for the year will clearly be heavily influenced by trading over the next three months. At this stage, we are encouraged by the progress we are making, and our expectation that we will make progress in 2005 compared with 2004, remains unchanged.
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For further information, please contact:
| Rupert Soames |
Aggreko plc |
| Angus Cockburn |
Tel: 0141 225 5900 |
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| Fiona Piper |
The Maitland Consultancy |
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Tel: 020 7379 5151 |
A copy of our Trading Update presentation, to be used in our meetings with analysts, is available on our website www.aggreko.com