Aggreko plays down cost of 're-jigging'

Click to follow

Aggreko, the world's biggest supplier of portable electricity generators, yesterday sought to allay fears that an impending restructuring of the business would wipe out most of its profits, saying the cost of the measures would not exceed £15m.

The strategic review of the plant hire group, begun by its new chief executive, Rupert Soames, will be unveiled next March and will result in a reduction in Aggreko's worldwide network of 120 depots.

Mr Soames said it was not yet possible to say how many depots would close or how many jobs would be lost from the 2,000-strong workforce. But he downplayed the scale of the exercise, saying: "This is a re-jigging of the business rather than wholesale plunder. There will be job losses but they will be reasonably spread." Aggreko shares, which fell 5 per cent last Friday on fears over the cost of the restructuring, made up all of the lost ground yesterday, closing 7p higher at 146.5p.

The restructuring will focus on Aggreko's North American and European divisions, which include its UK operations. The group has 40 depots in the US and 13 in the UK.

Aggreko, which was demerged from the haulage company Christian Salvesen, said results for the year to the end of December would be in line with analysts' forecasts of £38m-£41m in pre-tax profits. In the US, reported profits will be lower in the second half because of price pressures and exchange rate movements but underlying profits will be higher. In Europe, where Aggreko has been hit by the change from high-margin project work to lower-margin depot-based business, profits will be in line with the forecast given in June.

In the group's international business, a 90 per cent reduction in demand from Sri Lanka was largely offset by increased Middle East business.