16th Oct 2008 07:00
Aggreko plc
INTERIM MANAGEMENT STATEMENT,
BOARD CHANGES & ADJUSTMENTS TO REGIONAL STRUCTURE
Aggreko plc, the world leader in the supply of temporary power, temperature control and oil-free compressed air services, is today issuing its Interim Management Statement covering the period from 1 July 2008 to date.
Trading
The third quarter has been stronger than expected, with total Group revenue in the three months to 30 September 2008 growing by 39%, and by 30% in constant currency. The Local business grew constant currency revenue by 17%, and the International Power Projects business, excluding pass-through fuel, by 54%.
The growth in Local business revenue was driven by strong demand in the Middle East, Asia-Pacific and Central & South America, where revenues grew by 59% in the third quarter, or by 26% excluding $22 million of revenue from the Beijing Olympics. In North America, revenues grew by 10%, as customers needed support following Hurricanes Gustav and Ike. Revenue in Europe was down 3% on the same quarter last year. The strong growth in the International Power Projects business reflects the large amount of capacity contracted in the first half which has now become operational.
Financial position
Net debt at £310 million has increased by £32 million in the three months from 30 June 2008 and is £94 million higher than at 30 September 2007, reflecting increased investment in new rental fleet, and the rapid growth of the business. During the third quarter Aggreko secured additional funding of £60 million from its relationship banks to bring its total facilities to £463 million.
Outlook for 2008
In our interim results announcement on 26th August we stated that we expected our North American and European businesses to trade at similar levels to last year in the second half, with no storm revenue assumed in our forecasts at that time. Since then, in North America, storm-related revenues have been strong and underlying demand is currently holding up better than we expected. In Europe, we expect revenues in the second half to be similar to last year in constant currency. Accordingly, we now anticipate that constant currency profits in Europe will be similar to the second half last year, and North America's profits will be well ahead.
Momentum remains very strong in Aggreko International, with our Local businesses in the Middle East, Asia, and Central & South America all expected to make further strong progress throughout the remainder of the second half, helped in part by a very rapid redeployment of the fleet used to support the Beijing Olympics. In International Power Projects, margins and revenues are likely to be stronger than we expected at the time of the last statement, in part because of a high rate of project extensions and expansions.
Overall, we now anticipate that Aggreko's performance for the year will exceed current market expectations with profit before tax likely to be at least 50% higher than last year.
Board Changes and Adjustments to Regional Structure
As planned, Derek Shepherd, aged 65, will retire from the Group at the AGM in April 2009. Derek has worked for the company for over 20 years, and has served on the Board since 1997. For the last 10 years, Derek has been responsible for Aggreko International, and under his leadership, its revenues have grown from £35m to over £500m. In addition, after eleven years as a Director of the Group, Andrew Salvesen has indicated his desire to step down from the Board at the AGM in April 2009.
Derek will be succeeded in his role by Kash Pandya, who joined the Board in 2005 and over the last three years has led the turnaround in the performance of our European Region. At the same time, Aggreko is taking steps to rebalance and strengthen the regional structure of the Group. The rapidly-growing Middle East local business, currently part of Aggreko International, will be merged with our European local business to create a Europe & Middle East region. To manage this enlarged region, Bill Caplan will be joining the Group as Regional Director, Europe & Middle East, and will serve as an Executive Director.
Bill, aged 50, has spent the last 18 years working for United Parcel Service (UPS) in Pittsburgh, London, Shanghai and Singapore. He has been responsible for large parts of their business in Europe, and for several years led the development of their global supply-chain business. He has extensive experience managing complex multi-site businesses, operating in a B2B environment where excellence in logistics and customer service are essential. Bill was born and educated in the United States, has an MBA from Harvard University, and has spent most of the last 18 years living and working in Europe.
Commenting on the appointment, Rupert Soames, Chief Executive, said:
"We are delighted that Bill will be joining Aggreko, and to see Kash moving to run our largest and fastest-growing business. The merging of our Middle East and European businesses will create a local business with improved scale, and will equip us better to build our presence in developing markets across the region. It will also enable Aggreko International to focus on International Power Projects and on developing its key markets in Asia-Pacific, Africa and Central & South America."
- ENDS -
Enquiries to:
Rupert Soames / Angus Cockburn
Aggreko plc
Tel. 0141 225 5900
Neil Bennett / Charlotte Walsh
Maitland
Tel: 020 7379 5151
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