Shares in Aggreko pushed ahead yesterday after the temporary power supply firm reported an “encouraging start” to the year ahead of a £200 million shareholder payout.
The Glasgow-based firm, which has supplied electricity generating plant to Olympics and World Cups, said it had seen strong underlying revenue growth in two of its three main operating regions.
The firm said its operations in the Americas had enjoyed an uplift of 11% in the period, while the EMEA (Europe, Middle East and Africa) business had seen a 15% increase.
However, trading had remained difficult in the Asia Pacific region, with total income down 21% on the year previous.
“The group has made an encouraging start to the year,” the company said in an update to the markets yesterday.
“Overall, the Local business has had a good start to the year.
“Order intake year to date in Power Projects has been strong, but a significant proportion of this is for relatively short-term work, so we continue to be cautious.”
The firm’s figures show the Local power supply division delivered an overall 11% revenue uplift in the first quarter, while margins had been maintained year-on-year.
The Power Projects arm of the business did not fare as well, with quarterly income down 3% on last year driven in large part by a drop in demand from Indonesia, Japan and a reduction in military orders.
However, while new orders in the first quarter were similar to those seen a year ago, the company said demand had since picked up significantly and was now 150MW ahead of 2013 levels.
Included in the major new contracts is a 50MW supply agreement in Senegal and a 170MW award for short-term summer power production in Saudi Arabia and Oman.
The firm also said it was now beginning to deploy on a 120MW contract in Libya which had been previously announced but which had been held back due to political uncertainties in the region.
Aggreko also said it had made progress on its debt, with strong cash generation helping it to reduce the overall figure by £43m in the first quarter of the year to £320m.
The figure is £277m lower than a year earlier.
The firm said it now expected to return £200m to shareholders in June, assuming investors give their backing to the move.
Shares in Aggreko were up 18p at 1,528p following yesterday’s trading session.