3rd Mar 2020 09:24
(Alliance News) - Aggreko PLC, a supplier of temporary power generation and temperature control equipment, on Tuesday said it is monitoring potential impact of the coronavirus outbreak, as it reported a 9% rise in annual profit, driven by a strong performance in its Rental Solutions division.
Shares in the Scottish company were up 7.1% at 722.50 pence each in London.
For 2019, pretax profit increased to GBP199 million from GBP182 million in the year ago period, while operating profit jumped 10% to GBP241 million.
The Rental Solutions unit recorded 22% growth in annual underlying operating profit, while Power Solutions Industrial saw a 7% dip by the same measure. Power Solutions Utility underlying operating profit was up 21%.
The Rental Solutions business contributes 55% to Aggreko's annual operating profit. Power Solutions Industrial contributes 27% and Power Solutions Utility 18%.
Annual revenue fell 8% to GBP1.61 billion from GBP1.76 billion, but profit margins jumped to 14.9% from 12.5% on improved underlying margins in both Rental Solutions and Power Solutions Utility businesses.
Aggreko said it continues to work closely with the Tokyo 2020 Olympic and Paralympic Games Organising Committees with preparations progressing as expected, while monitoring potential impact of the coronavirus outbreak both in terms of the Tokyo Olympics and the company more widely.
At this point, however, Aggreko said it currently expects to deliver results in-line with expectations for 2020.
Aggreko Chief Executive Officer Chris Weston said: "We delivered underlying profit growth of 13%, driven by a strong performance in Rental Solutions, and a significant working capital improvement. We are proposing a 3% increase in the final dividend, reflecting the board's confidence in the sustainability of our performance. Going forward we believe that a continued focus on the four strategic priorities first set out in 2015 will underpin the achievement of our mid-teens ROCE target in 2020 and beyond." For 2019, return on capital employed stood at 11.2% versus 10.3%.
The Glasgow-based company declared a final dividend of 18.3p per share, giving a total 2019 payout of 27.7p, up 2.2% on 27.1p paid in 2018.
By Tapan Panchal; [email protected]
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