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Aggreko on standby for profits jump

Temporary power provider Aggreko today said it expected a 40 per cent rise in half-year profits.

The Glasgow-based company, which is helping to power the Euro 2008 football championships, said growth had been "broad-based" but picked out profits in Europe as being "significantly higher".

Other regions including Middle East, Asia and Australia were all making "good progress, the firm said, with North America the only territory where profits were lower so far this year.

Aggreko's other notable power provision projects include the Glastonbury music festival this coming weekend, and the Beijing Olympics where it is installing 140MW of power across 37 venues.

The firm made £47.5 million of pre-tax profits during the six months to June 30 last year.

Aggreko said: "The board now believes that profits for the full year are likely to be above current market expectations."

Aggreko, which also provides air conditioning, said revenues were ahead by about 25 per cent during the first six months this year.

In both Europe and North America a "modest" reduction in power demand was more than offset by strong demand for temperature control, the firm said.

Full year results will be influenced by the summer season, which had got off to an "encouraging start" thanks to the Euro 2008 championships in Switzerland and Austria and high temperatures in North America.

Aggreko, which employs around 2,200 people, said it was hoping trading profits in North America would end up being flat this year, with "good progress" being made in Europe. The regions each contribute around a quarter of group revenues.

The firm's International Power Projects division, which specialises in providing large scale, long term temporary power supplies and makes up around 40 per cent of total turnover, should also deliver "outstanding" profits growth this year.

Preparations were "well in hand" for the Beijing Olympics, which start in August. The contract was one of the largest ever awarded for temporary power at a sporting event, and is expected to be worth in the region of £17.7 million.

Aggreko will employ around 200 staff on the project, many recruited in China, to install, maintain and operate the equipment.

The firm's pre-tax profits haul last year was £124.2 million.

Broker Altium Securities said Aggreko's sales and profits were well ahead of expectations.

Analyst Nick Spoliar said growth for the group's local power supply businesses reflected "the hunger for energy which is widespread in the world today".

He upped his forecast for Aggreko's pre-tax profits this year by 9 per cent, to £144.5 million.

Shares in the firm were up 9 per cent today.