Hopes that Scottish temporary power supplier Aggreko could surge forward on Olympic momentum have been dashed by further warnings it will struggle to fill the sporting void going into next year.
Shares dived at the Glasgow-based company following its second profit warning in as many months.
The company voiced caution over the withdrawal of US military troops from Afghanistan and the lack of one-off contracts for events such as the London Olympic and Paralympic Games, which could knock as much as 6%, or£100 million, from its 2013 revenues.
The firm also said it is waiting to learn whether Japanese clients intend to extend their contracts into the second half of next year.
“We are taking a number of steps to respond both to these one-off items and to a temporary weakening in demand in some of our markets,” it said.
The supplier of back-up generators for electricity shortfalls and major sporting events had already warned during October that unfavourable exchange rates and an increase in bad-debt provisions would affect results for this financial year.
Figures for this year were buoyed by a £59m contract to supply back-up power for London’s Olympics, including for the opening and closing ceremonies.
In a trading update the group said: “After a year of strong growth in 2012, the economic environment we will be facing in 2013 is particularly uncertain in many of our markets, and it is difficult at this stage to provide a definitive view of the likely pattern of trading in 2013”.
But by missing out on repeat revenues, the group said its performance for 2013 is likely to be lower than this year.
Rupert Soames, Aggreko chief executive, said: “As always, markets look forwards, not backwards.”
He identified cutbacks in western military spending as one of the group’s key concerns going forward to next year.
The group, which has also provided power generation and temperature control systems at events such as the football World Cup and US Superbowl, expects to increase revenues by 12% to £1.6 billion for the 12 months to December 31, 2012.
It said underlying profits for this year should be around 12% higher at £365m, with revenues from its local division, which handled the Olympics, up 24%.
The profit warning caused analysts to downgrade their 2013 revenue expectations from £400m to closer to £350m.
John Lawson, analyst at Investec, cut his recommendation on the stock from ‘buy’ to ‘hold’ and said the announcement would be seen as “something of a setback”.
“That said, there are many structural drivers that should continue to drive earnings in the years to come,” he said.
Paul Jones, analyst at Panmure Gordon, said: “With military work coming off, Japanese renewals not expected, and the year-on-year effect of the Olympics, we now expect 2013 to be below 2012 something not seen at Aggreko for some time.”
Shares closed down 461p at 1,664p.
business@thecourier.co.uk