Shares in Scottish temporary power supplier Aggreko jumped 3.5% yesterday despite it missing out on a 10th successive year of growth.
The Glasgow-based company increased in size each year during the recessionary downturn, but its run of form came to a halt yesterday when it revealed a small fall in overall revenues to £1.53 billion and an 8% drop off in pre-tax profits to £338 million.
The firm’s bottom line was impacted by the lower revenues from its Power Projects division and the fact its 2012 results included £60m of revenues derived from providing power to the London Olympics.
However, the result was in line with previous guidance and investors were buoyed after the firm revealed it was returning £200m of capital to shareholders in June, a pay-out equivalent to 75p per share.
“After nine consecutive years of growth, 2013 proved to be a challenging year,” chairman Ken Hanna said.
“Despite this, Aggreko delivered a creditable performance and good progress on many fronts. Our local business delivered underlying revenue growth of 7% and margins strengthened.
“Trading in our Power Projects business was, however, more challenging, with underlying revenues at similar levels to last year and margins a little lower.”
The company’s Power Projects division took a particular hit in its Asia Pacific reporting segment after a draw back in contracts from Japan.
Aggreko had provided temporary power generation support to the country in the wake of the 2011 tsunami that devastated much of the eastern seaboard and crippled the Fukushima nuclear power plant.
However, the need for temporary solutions has dropped as the Japanese utilities move to rebuild generating capacity.
Aggreko also saw an “inevitable” decline in military contracts last year.
Overall order intake during the year was 725MW, down from the 1,029MW contracted from Power Projects in 2012.
The performance of the company’s Local Business division was stronger, with underlying revenue which strips out currency exchange, London Olympics and acquisition-related income increasing by 7% during the year to £904m.
Trading profit on an underlying basis was 11% ahead at £158m, but the margin made was squeezed slightly to 18%.
As it published its annual results yesterday, Aggreko said it is currently performing in line with expectations, and the current financial year is likely to return a trading profit similar to the £357m seen in 2013.
The firm said chief financial officer Angus Cockburn would take over as interim CEO following the company’s annual meeting on April 24 when long-term chief executive Rupert Soames will stand down.
“Overall, since we last reported in December, the business has performed in line with our expectations,” the firm said yesterday.
“For the full year we expect trading profit to be similar to 2013 on a constant currency basis, as growth in the Local Business is offset by weaker trading in Power Projects,” it added.
Shares in Aggreko closed the day up 55p at 1,628p.