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Aggreko looks forward to improved profits

Strong demand for temperature-control services is set to help rental company Aggreko to beat market expectations on profit growth this year.

The Glasgow company specialises in providing temporary power alongside temperature control services including air conditioning, modular cooling towers, chillers, heat exchangers and electric heating.

A trading update, released by Aggreko ahead of the end of its second quarter on June 30, said: “Looking ahead to the full year, the results in Europe and North America will be influenced by the summer season, which has got off to an encouraging start, with the UEFA football championships in Europe and high temperatures in North America.

“In both areas, a modest reduction in demand for power has been more than offset by strong demand for temperature control.”

The company said trading had been strong in the first half of the year and it expected revenues for the first six months of the year to grow by about 25 per cent and profits to be up 40 per cent on the previous year. Last year’s full-year profits before tax were £124.2 million.

The company said: “This growth has been broadly based; our local businesses in the Middle East, Asia, Australia, Central and South America have all made good progress and we also expect trading profits in Europe to be significantly higher than the prior year. As anticipated, trading profits in North America will be lower than the prior year while revenues will be slightly higher.”

The company said it still expected the North American division to achieve similar trading profits to last year if it achieved the “historical average level of storm revenues”.

It also expects growth to continue in Europe and internationally with preparations for the Beijing Olympics a key driver. The report concluded: “Overall, the board now believes that profits for the full year are likely to be above current market expectations.”