Aggreko warns on profits

The firm that supplied power for the Olympic Games yesterday warned over profits as it said bad debts and a currency hit would impact full year results.

Aggreko shares plunged 8 per cent after it said full-year profits were expected to be knocked by 2.5 per cent, despite a £59m boost from its London 2012 contract.

The Glasgow-based group, which also provided power generation and temperature control systems at events such as the football World Cup and US Superbowl, said underlying revenues rose 13 per cent in the third quarter helped by the Olympics work.

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But it warned that results were being impacted by unfavourable currency movements and as bad debt provisions increased.

Tony Shephard, analyst at Charles Stanley, said the profit warning was accompanied by signs of a slowdown, with the 13 per cent rise in revenues lower than 15 per cent at the half-year stage.

But John Lawson, at Investec Securities, said the underlying performance was robust, adding the shares sell-off should be seen “as an opportunity to top-up holdings”.

Aggreko said its local division – which handled the Olympics – delivered a better-than-expected performance in the quarter, with underlying revenues up 11 per cent. The local business operates from around 133 service centres in 31 countries and rents out products ranging from small generators to large cooling plants.

Its international power arm – which serves governments, armed forces and major industrial customers with power plants ranging from 10 megawatts to 100 megawatts on a single site – saw order intake below a year earlier.