Investment Column: Aggreko has some powerful attractions


Aggreko

Our view: buy

Share price: 1,678p (+84p)

The earthquake and tsunami in Japan were so horrific it feels wrong even to recognise that there may be beneficiaries. But as life goes on, and the recovery swings into action, beneficiaries there will be.

One such is Aggreko. The temporary power provider's shares rallied yesterday as the market welcomed the news that the company is to supply power to Japan to make up for some of the shortfall from the nuclear plants crippled by the disaster.

Under the deal with the Tokyo Electric Power Company (Tepco) – which faces criticism over radiation leakage from the worst-hit nuclear facility at Fukushima Daiichi – Aggreko will install gas and diesel-fired power plants in the Tokyo Bay area to supply 200 megawatts of power.

"Within a few days of the disaster, Aggreko entered into discussions with Tepco to bring additional power to the grid," Rupert Soames, the Aggreko chief executive, said yesterday. "Aggreko is pleased it is able to be of assistance to the country at this very difficult time."

The group is already on a roll. Its shares have rocketed by more than a third over the past 12 months. And Aggreko's Japanese contract win comes hot on the heels of full-year financial results showing revenues up by 17 per cent and profits up a quarter – funding a 50 per cent dividend rise and an extra £150m return of capital.

The only slight drag is that 2010 saw a whopping £87m boost from power supply contracts for no less than three major sporting events, the World Cup, the Winter Olympics and the Asian Games, which will make the comparators tougher this year. But leaving that aside, Aggreko still expects similar trading profits throughout 2011. Moreover, the London Olympics power supply contract kicks in next year.

To be sure, there have been questions from analysts about the impact from the upheavals in the Middle East. But with so many growth opportunities, Aggreko still has plenty of potential headroom.



Cranswick

Our view: hold

Share price: 790p (-41p)

The last time we looked at Cranswick, the food producer had impressed us enough to merit a positive view. Yesterday, it issued an update on the final quarter of its financial year, reporting higher volumes, but slower revenue growth. The key talking point, in our view, was the cautious outlook statement, which sent the shares lower. Cranswick, which supplies major supermarkets, warned that, while it expected the performance in the year to March to be broadly in line with the board's hopes, the picture for the 12 months to next March suggested that the period may prove "more demanding than usual".

This should not be surprising as the UK consumer environment remains far from inspiring. Moreover, Cranswick trades on undemanding multiples of under 12 times forward earnings, according to Panmure Gordon.

The broker did, however, revise its view in light of the outlook. We are inclined to agree. This is a good company with an affordable stock, but we think investors should remain mindful of the wider economic picture.



YouGov

Our view: hold

Share price: 51.25p (+0.5p)

If you took a straw poll of YouGov's management, they would probably say they were looking to the future with some confidence, especially after yesterday's solid first-half results, showing a 27 per cent rise in revenues.

In particular, the group's plan to target the US looks to have been vindicated. With strong organic growth, and several acquisitions, it is now the company's largest region. Yesterday, YouGov also unveiled the takeover of Definitive Insights, which will bring market research strength on the US West Coast. In the UK, revenues rose 20 per cent in the first half, while Scandinavia was up 12 per cent. The company was also helped by a lower than expected tax charge.

The real problem area for YouGov has been Germany. It looks like it needs more time and, crucially, more money to resolve the issues. Despite the businesses remaining profitable, revenues fell 12 per cent. The company will hope the imminent announcement of a new chief executive will mark a turning point. That, and a pretty full valuation of 17 times forward earnings, means that we would hold back from buying just yet.

PROMOTED VIDEO
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
News
i100
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Sport
Louis van Gaal watches over Nani
transfers
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
transfersColombian World Cup star completes £63m move to Spain
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst - Banking - Scotland - £380-£480

£380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...

Risk Analyst - (Multi Asset class) £70k - £80k

£70000 - £80000 per annum: Harrington Starr: My client is a leading financial ...

Programme Director - Conduct Risk - London

£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

Application Support Engineer (Windows Server, Networking, Perl)

Negotiable: Harrington Starr: Application Support Engineer (Windows Server, Ne...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn