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Company Spotlight: Aggreko


THE RECENT heatwave in the UK and the loss of electricity across the eastern seaboard of North America is prompting some analysts to reconsider their double-digit growth forecast for the power rental and temperature controls industries.

But will shareholders in Glasgow-based Aggreko be chilling after seeing the specialist plant hirer's interim results on August 27?

The firm is well placed in North America but is facing stiff competition in all its markets from major opposition with blue-chip credentials such as GE Capital and Caterpillar.

Prior to the recent power cuts, this market was suffering from excess capacity.

Aggreko is also being hit by claims from rival engine turbine manufacturers that demand continues to weaken. This is not helped by the company's lack of exposure to the environmentally friendly gas turbine rental sector.

This has led to widespread despondency and before the US power problems just two of 11 covering brokers were positive, four were sitting on the fence and five more were urging investors to sell.

Investment bank Dresdner Kleinwort Wasserstein predicts pre-tax profits at Aggreko will plunge to £40 million this year and rise just £700,000 in 2004 before touching £43.4 million in 2005.

This estimate is still well short of the £55.3 million profit posted last year and investors will be looking as closely at Aggreko's forward outlook as the actual results next week.