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Business News

Aggreko feels £100m drag on revenues after Olympic boost

Aggreko suffered post-Olympics blues yesterday as the power supplier warned that revenues next year will be £100m lower than this year's.

Shares in the FTSE 100 company dropped 22 per cent after it warned: "The economic outlook we will be facing in 2013 is particularly uncertain in many of our markets."

The generator supplier said that without the boost provided by the Olympics, the reduction of the number of American troops in Afghanistan and the likelihood that some of its Japanese contracts might not be renewed would together account for the £100m fall in revenues in the coming year.

Aggreko said it still expected its local and international power projects businesses to grow in 2013, but it added: "This growth will be unlikely to be able to mitigate entirely the reduction of £100m of revenue and associated margin, and on a reported basis we believe that group performance in 2013 is likely to be slightly lower than in 2012."

The broker Seymour Pierce said it expected consensus for 2013 pre-tax profit to come down to about £355m from about £400m. Panmure Gordon cut its estimate from £379m to £340m.

Aggreko said it still expected 2012 profits before tax and amortisation to rise by 12 per cent to about £365m on revenues 13 per cent higher at £1.6bn. It also expects net debt to be up by £250m at £620m, reflecting an acquisition and higher capital spending.

Unusually, the company did not provide an update on how much it plans to spend next year on its fleet of generators and power plants, sticking with the £150m spend in the first half which it announced in October.

Its shares fell 461p to 1,664p.