Aggreko plc Begins Year From A Sprint Start

Aggreko plc (LON: AGK) is among the morning’s top risers on boosted revenues.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Shares in Aggreko (LSE: AGK) added 39p, or 2.6%, to 1,550p during early trade this morning, after the temporary power supplier reported revenue growth of 5% in the three months to 31 March.

AggrekoThe firm, whose power generators are used in major events, including the 2012 Olympics, saw particularly strong performance from its business in the Americas (revenue up 11%) and Europe (up 15%), while difficult trading conditions in Asia (down 21%) pegged back progress.

Agrekko added that net debt decreased by £43m to £320m, compared to debt of £587m at the same point last year. The easing of debt was attributed to a “disciplined” approach to capital expenditure.

Aggreko noted the encouraging start to the year, commenting:

“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.”

“We expect fleet capital expenditure in 2014 to be at similar levels to last year, with around £130 million in the first half and around £215 million for the year as a whole; as always, we will adjust our rate of investment depending on market conditions.”

Based on this morning’s share price movement shares in Aggreko may trade on a P/E of 19, while analysts project a 2014 full-year dividend of 28p, covered three times by earnings.

As announced in the firm’s full-year results, £200m will be returned to shareholders, approval pending, to be paid in June 2014. Owing to its impressive cash generation, Aggreko is an income stock that, while not yielding the highest around (1.9%), is predicted to grow impressively in the coming years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Mark does not own shares in Aggreko. The Motley Fool has recommended shares in Aggreko.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »