Emerging markets power Aggreko
Shares in Aggreko shot up 10 per cent yesterday when the generators giant said soaring demand in India, Africa and other emerging markets would help it to enjoy double-digit growth over the next five years.
In 2012, when Aggreko earned almost £60m supplying generators to power the London Olympics, pre-tax profit rose 11 per cent to £367m off revenues of £1.6bn.
There were fears about its outlook, as the world's biggest temporary power provider issued two profit warnings late last year, warning that fewer United States troops in Afghanistan, generators being packed up in Japan as it recovers from its 2011 earthquake, and the lack of a summer Olympics would combine to take £100m off 2013 revenues. But it covers electricity shortfalls as well as major sporting events, and said business is still booming in emerging markets.
Aggreko's new contracts this year include the Caribbean and Djibouti, and the conclusions of the business review, which the firm carries out every five years, saw it predict double-digit growth in revenues and trading profit each year between now and 2018.
Aggreko also said it expects "to be able to increase significantly cash returns to shareholders over the next five years". That, said the chief executive, Rupert Soames, "is better than a slap in the face with a wet fish".
He added that the FTSE 100 company was seeing "burgeoning demand in emerging markets where there are inadequate power supplies. Our local business division is 20 per cent ahead on a year ago, with a lot of work in South America, India, Asia, and Africa."
It hikes its dividend 15 per cent to 23.9p. The shares rose 181p to 1,939p.
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