Aggreko (AGK) disappoints for once…the valuation remains too rich for us
The world leader in the supply of temporary power and temperature control has issued an Interim Management Statement which fell short of its normal high standards. Trading at 20x current year estimates there is little room for disappointment.Trading in the Group’s Local businesses, helped by the London 2012 Olympics, was the key driver with revenues up 22%, however, the outlook was less positive than usual and news of a rise in bad provisions didn’t sound good either.
The Group’s Local Business rents power and temperature control systems, ranging from small generators up to large industrial cooling towers, to customers who are typically within a few hours’ driving time of their service centres. The International Power Projects business builds and then operates temporary power plants, selling their capacity and electricity to utilities, the military and major mining and oil companies. International Power Projects’ revenues in the third quarter grew 15% and order intake in the third quarter was below last year. However, after the quarter end they signed two contracts including a second contract for 74 MW with…