Shares in temporary power provider Aggreko dived by more than 6 per cent in early trading after it warned that bad debt provision and adverse exchange rates would take the edge of its performance this year.
The Glasgow-based firm its contract to support the London Olympics helped it deliver “a robust performance” in the third quarter, boosting revenues by 22 per cent against last year. It confirmed the Olympics work had been worth £59 million to the company.
“Overall, trading continues to run broadly in line with our expectations,” it said.
But it added: “Since our last trading update in early August, however, exchange rates have moved against us, and we have also increased our bad debt provisions; we expect that, between them, these two factors will impact our anticipated profits for the year by about 2.5 per cent.”
Analyst John Lawson, at Investec, recommended buying Aggreko shares on the weakness.
He said: “Aggreko has had a robust Q3 (in line with expectations), but extra bad debt provisions and adverse forex rates adversely hit our 2012 estimated profits.
“That said, the group remains very active, with 17 per cent more equipment on rent in international power projects than a year ago and the local business is holding up well.
“In summary, overall trading is broadly in line with expectations, but forecast adjustments are likely to take the edge off this story today.”
