Full year results in line with expectations;
o Underlying revenue up 4% on prior year; trading profit up 1%;
o Good underlying growth in trading profit in EMEA (+14%) and Americas (+20%); challenging conditions in APAC (-27%);
o Reported results reflect impact of lower revenues from Military and Japan, as well as no revenues from London Olympics (£60 million in 2012);
Good Local business performance particularly in the Americas and EMEA;
o Underlying revenue up 7% and trading profit up 11%;
Power Projects trading was subdued with order intake of 725MW in the year; underlying revenue similar to prior year; margins down 2pp;
Good progress on low-cost power generation technology;
o Over 1,000MW of gas on rent and revenues up 30%;
o New HFO product well received in both the Local and Power Projects businesses with eight contracts signed;
Strong cash generation resulted in a £230m reduction in net debt and net debt : EBITDA of 0.6 times;
Substantial increase in returns to shareholders;
o £200m return of capital in June 2014, equivalent to 75p per share;
o Dividend up 10% with full year dividend of 26.30p per share;
Business performing in line with our expectations: trading for the full year is expected to be at similar levels to 2013 on a constant currency basis;
As previously announced, Rupert Soames to step down as Chief Executive after 11 successful years;
o Angus Cockburn, Group CFO appointed Interim CEO;
o Carole Cran, Group Director of Finance appointed Interim CFO.
Ken Hanna, Chairman, commented:
"After nine consecutive years of growth, 2013 proved to be a challenging year; despite this Aggreko delivered a creditable performance and good progress on many fronts. Our Local business delivered underlying revenue growth of 7% and margins strengthened; trading in our Power Projects business was, however, more challenging, with underlying revenue at similar levels to last year and margins a little lower. As a result of a disciplined approach to capital expenditure, we generated strong cashflow and net debt reduced by £230 million; I am therefore delighted that we can announce a £200 million return of cash to shareholders as well as a 10% increase in the dividend."
"The Group has made an encouraging start to 2014. The Local business has continued to show good growth with volumes on rent currently up 7% on the prior year. In Power Projects, year to date order intake is 64MW; in addition, we have recently signed a contract in Libya for 120MW which we would normally have taken into the order book. However, given the volatile situation in the country, we will not include it in order intake until we are certain we will be able to execute it. Assuming that we are able to proceed in Libya, we expect that order intake for the first quarter will be at a similar level to the final quarter of 2013. Off-hires in the first quarter are expected to run at a lower rate than has been the case for the last few years and our 150MW of diesel contracts in Japan have now been extended until December 2014. Whilst this is all welcome, customers in the Power Projects market continue to be cautious, and at this early stage in the year, so do we."
"Overall, since we last reported in December, the business has performed in line with our expectations. For the full year we expect trading profit to be similar to 2013 on a constant currency basis, as growth in the Local business is offset by weaker trading in Power Projects. However, the latest spot rates for some of our major trading currencies4 have moved against the average exchange rates of 2013; if these rates pertain for the rest of the year, we would see a marked translational impact on our 2014 reported results."