Never miss an issue of Master Investor Magazine – sign-up now for free!
Shares in FTSE 250 power generation specialist Aggreko (LON:AGK) surged upwards by 10.12% to 818.40p (as of 13:00 BST) after group revenues for the first half of 2018 climbed by 10% to £857 million. Pre-tax profits over the six months ended 30th June dropped by 7% to £59 million, but rose by 8% on an underlying basis.
Management were confident that they were en route to at least match 2017’s profit levels and fleet capital expenditure would be roughly 10% lower than previously estimated. However, they did warn that the group’s effective tax rate was likely to rise by around 4 percentage points for roughly 35% from next year due to the shifting geographic mix of the company’s business.
Chief Executive Officer Chris Weston said that: “These are encouraging results that keep us well on track to deliver our full year guidance. As we continue to execute on our strategy, we have also completed a comprehensive review of the Group’s expected performance over the medium term. Based on this review, and the detailed action plans we have developed, we are confident that the Group can deliver a return on capital employed in the mid-teens in 2020 with potential for further improvement beyond this.”