Shares in Aggreko, the temporary power supply firm run by Winston Churchill's grandson Rupert Soames, have blown a fuse despite an upbeat trading statement.
The company said after a strong performance in the third quarter, with underlying revenues up 20% excluding the one-off impact of last year's football World Cup, it now expected full year profits to reach £320m, up from a previous estimate of £315m. The upgrade came despite the continuing uncertain prospects for the global economy. Soames said:
I am delighted to see both our businesses [local and international] producing underlying growth of 20% or more, and we have good momentum going into the fourth quarter.
But with the shares already on a high rating, investors decided to cash in some of their gains, and the company's shares have slipped 14p to £16.90. Andrew Nussey at Peel Hunt said:
In light of the strong management, excellent global positions and inherent cash generation capabilities we feel a premium is justified. However, despite the confident outlook there are now few catalysts to medium term re-rating. We rate the shares a hold with a 1700p target.
Aggreko remains a quality proposition but on 18 times December 2012 [earnings] this is largely in the price.
