Aggreko PLC (LON:AGK) have seen their shares jump following an impressive annual update from the firm.
Aggreko plc is a supplier of temporary power generation equipment and of temperature control equipment.
The FTSE 250 listed firm said that it had seen a 9% rise in annual profit, which had been driven by strong performance in its Rental Solutions sector.
Across 2019, Aggreko reported pretax profit of £199 million. This figure showed a rise from the £182 million figure recorded in 2018 – which will come as good reading for shareholders.
On an even better note, operating profit rose 10% to £241 million across 2019.
Looking at divisional figures, the Glasgow based firm praised the success of its Rental Solutions unit. This division recored 22% growth in annual underlying operating profit, while Power Solutions Industrial saw a 7% fall.
However, Power Solutions Utility reported that operating profit was up by 21%.
Annual revenue slipped 8% to £1.61 billion from £1.76 billion – however profit margins did see a rise from 12.5% to 14.9% following improved underlying margins in both Rental Solutions and Power Solutions Utility businesses.
Aggreko did also note that the firm is working with he Tokyo 2020 Olympic and Paralympic Games Organising Committees – and preparations are commencing on schedule.
“Our underlying performance during 2019 provides good momentum into 2020 and our preparations for the Tokyo 2020 Olympic and Paralympic Games are progressing well. Notwithstanding this, we are monitoring closely the development and potential impact of the coronavirus outbreak, both in terms of the Tokyo Olympics and the Group more widely. At this point, however, we currently expect to deliver results in-line with expectations for 2020.”
The firm added that it will assess the impact of the coronavirus on the Tokyo Olympic Games and the firm more generally.
Chris Weston, Chief Executive Officer, commented:
“Our 2019 results demonstrate the significant progress we have made to improve the Group’s financial performance. 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. We are well-positioned to meet our customers’ evolving needs in the changing energy market, with 185 MW of hybrid work secured and 30 Y.Cubes now under contract, reflecting the growing interest in lower-carbon technology and our new battery storage product. 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.”
Aggreko sign power supply agreement with Resolute Mining
In December, Resolute Mining (LON:RSG) updated the market about a deal with Aggreko to supply power.
Resolute announced the plans at the end of November, when it saw announced heads of terms being signed with Aggreko.
The plans come into action following an ensured effort to lower operating costs for Resolute, and the new plans will help reduce power costs by around 40%.
Resolute Chief Executive John Welborn said: “Aggreko is the right partner to support our power ambitions at Syama. I am delighted work has commenced and that we will deliver the power cost savings we have promised at Syama”.
The initial phase of the power station is expected to be worked on and completed in 2020.
Stage two is dependent on when existing tailing storage facilities at Syama is decommissioned which could take up to three or four years.
Shares in Aggreko plc trade at 721p (+6.99%). 3/3/20 11:25BST.
