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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Aggreko Plc | LSE:AGK | London | Ordinary Share | GB00BK1PTB77 | ORD 4 329/395P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 869.50 | 869.00 | 869.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAGK
RNS Number : 2287O
Aggreko PLC
05 August 2014
5 August 2014
Results for the six months ended 30 June 2014
GOOD UNDERLYING GROWTH IN THE FIRST 6 MONTHS
FULL YEAR EXPECTATIONS UNCHANGED
GBPm unless otherwise stated 20141 20131 As Reported1 Underlying1,2 Group revenue 768 760 1% 12% Group revenue excl. pass through fuel 745 745 -% Trading profit3 142 157 (10)% 6% Profit before tax 132 146 (9)% Diluted earnings per share (p) 36.93 39.94 (7)% Dividend per share (p) 9.38 9.11 3% --------------------------------------- ------ ------ ------------- -------------- -- Good underlying growth in revenue and trading profit: - Underlying revenue and trading profit up 12% and 6% respectively; - Strong growth in EMEA and Americas; - Reported results reflect significant adverse impact from currency translation. -- Double digit revenue growth in Local business: - Broadly spread across developed and emerging markets; - FIFA World Cup and Commonwealth Games contracts executed successfully. -- Encouraging first half for Power Projects with 14% revenue growth: - Order intake of c. 500MW in the first half, c.400MW in half one 2013;
- Contract wins include 120MW Libya, 50MW Senegal, 42MW Philippines and 170MW summer peak shaving in Saudi Arabia and Oman;
- Contract extensions in Mozambique and Bangladesh also secured; - As anticipated margins and returns slightly lower as revenue from Japan and Military declines. -- GBP200m cash return to shareholders completed in quarter two. -- Interim dividend of 9.4p declared. -- Continue to expect full year underlying trading profit to be similar to last year. -- As previously announced, Chris Weston appointed Chief Executive Officer.
- Angus Cockburn to step down as Interim Chief Executive Officer on 30 September 2014, after 14 successful years;
- Ken Hanna to assume role of Executive Chairman from 1 October 2014 until Chris Weston's arrival;
- Carole Cran appointed Chief Financial Officer with effect from 1 June 2014.
Angus Cockburn, Interim Chief Executive Officer, commented:
"Aggreko has made an encouraging start to the year and delivered a good performance in the first half. The Local business has performed well, particularly in the Americas and EMEA regions which have delivered strong growth. We are proud to have been involved in the provision of broadcast and stadium power for both the FIFA World Cup and the Glasgow Commonwealth Games. One of the highlights of the first half has been our success in executing two ground-breaking contracts. In Panama we are the first temporary power provider to be awarded a wholesale contract, and we are selling into the spot market to help alleviate the hydro power shortages. In Southern Africa, we are supplying 230MW of cross-border power into three countries as part of the Southern African Power Pool from our plant in Mozambique, where we have just extended the first 108MW."
"Looking forward, the third quarter is important for the Local business and, whilst we expect to deliver growth in the second half, comparators are more challenging. In Power Projects, whilst we take some encouragement from the order intake in the first half and a healthy enquiry pipeline, customers generally remain cautious. Overall, we continue to expect underlying trading profit for the full year to be similar to 2013."
Regional performance metrics:
Hot Features
Premium
GBPm Revenue Underlying Trading Profit Underlying
2014 2013 2014 2013
Americas 340 317 25% 68 69 26%
APAC 125 166 (16)% 24 56 (53)%
EMEA excl fuel 280 262 14% 53 34 69%
Power Projects excl
fuel 314 312 14% 86 95 7%
Local business 431 433 10% 59 64 5%
--------------------- ----- ----- ----------- -------- ------- -----------
1 All figures are before amortisation of intangible assets arising from business combinations
(2014: GBP2m pre-tax, GBP2m post-tax; 2013: GBP2m pre-tax, GBP2m post-tax). On a statutory
basis, post amortisation trading profit was GBP140m (2013: GBP155m), profit before tax was
GBP130m (2013: GBP144m) and diluted earnings per share were 36.45p (2013: 39.27p).
2 "Underlying" is defined as: adjusted for currency movements and pass-through fuel.
3 Trading profit represents operating profit before gain on sale of property, plant and equipment.
Future Reporting
The Group will report its Q3 IMS on Friday 14 November 2014.
Enquiries
Investors & Analysts Louise Bryant, Aggreko plc +44 7876 478 272 Media Neil Bennett / Tom Eckersley, Maitland +44 20 7379 5151
Analyst Presentation
A presentation will be held for analysts by invitation today at 9am (BST) at UBS, 100 Liverpool Street, London EC2M 2RH. A live web-cast and a copy of the slides will be available on our website from 8.45am at www.aggreko.com/investors.
Interim management report
Group Trading Performance
Aggreko delivered a good underlying1 performance in the first half of 2014 with revenue and trading profit2 increasing by 12% and 6% respectively. Underlying excludes the impact of currency translation and pass-through fuel3. On the same basis, revenue in our Local business increased 10% and trading profit increased 5% while revenue and trading profit in our Power Projects business increased 14% and 7% respectively. As anticipated, reported results were significantly impacted by adverse currency movements with reported revenue increasing 1% on the prior year, and reported trading profit decreasing 10%.
2014 2013 Movement
-------------------------
GBPm GBPm As reported Underlying
change
-------------------------------- ------ ------ ------------ -----------
Revenue 768 760 1% 12%
Revenue excl pass-through fuel 745 745 -%
Trading profit 140 155 (10)% 6%
Operating profit 140 157 (11)%
Net interest expense (10) (13) 30%
Profit before tax 130 144 (9)%
Taxation (33) (39) 14%
Profit after tax 97 105 (8)%
Diluted earnings per share
(pence) 36.45 39.27 (7)%
-------------------------------- ------ ------ ------------ -----------
Reported Group revenue increased by 1% to GBP768 million (2013: GBP760 million), while trading profit of GBP140 million (2013: GBP155 million) was down 10% on the prior year; reported trading margin was 18% (2013: 20%). Underlying revenue increased by 12% and trading profit increased by 6%; underlying trading margin was 19% (2013: 20%).
Group profit before tax decreased by 9% to GBP130 million (2013: GBP144 million) and profit after tax decreased by 8% to GBP97 million (2013: GBP105 million), reflecting a decrease in the tax rate from 27% to 26%. Group return on capital employed (ROCE4), measured on a rolling 12-month basis, was 21% (2013: 22%). The ratio of revenue (excluding pass-through fuel) to average gross rental assets decreased from 67% to 63% mainly due to a reduction in Military, Japan and Indonesia revenues in our Power Projects business.
The movement in exchange rates in the period had a significant impact on results, reducing revenue by GBP80 million and trading profit by GBP23 million. This was driven by the adverse movement in all our major currencies, 5against sterling, compared to the average rates for the first half of 2013. Pass-through fuel, related to our contracts in Mozambique, accounted for GBP23 million (2013: GBP15 million) of reported revenue of GBP768 million.
We spent GBP107 million on new fleet in the period (2013: GBP111 million), equivalent to 87% of the depreciation charge (June 2013: 87% of the depreciation charge). Net debt at 30 June 2014 of GBP537 million was GBP15 million lower than the same period last year, despite having returned GBP200 million to shareholders during the second quarter. Cash flow from operating activities in the twelve months to 30 June 2014 was GBP546 million, which helped fund capital expenditure of GBP226 million, the GBP200 million return of value to shareholders, a final ordinary dividend of GBP70 million and interest and tax payments as well as currency movements over the same period.
1 Underlying excludes pass-through fuel revenue from Power Projects
as well as currency. A bridge between reported and underlying
revenue and trading profits is provided at page 10 of the Financial
Review.
2 Trading profit represents operating profit of GBP140 million
(2013: GBP157 million) excluding gain on sale of property, plant
and equipment of GBPnil million (2013: GBP2 million).
3 Pass-through fuel relates to two contracts in our Power Projects
business where we provide fuel on a pass-through basis.
4 ROCE is calculated by taking the operating profit on a rolling
12-month basis and expressing it as a percentage of the average
net operating assets at 30 June, 31 December and the previous
30 June.
5 Major currencies are the US Dollar, Euro, Australian Dollar,
Argentinian Peso and Brazilian Real. The table on page 10 of
the Financial Review sets out these major exchange rates.
Regional Trading Performance
The performance of our three regions is detailed below, along with an analysis of the global performance of our Power Projects and Local businesses.
Regional Trading Performance as reported in GBP million
Revenue
As
Reported Underlying
2014 2013 Change Change
By Region GBP million GBP million % %
Americas 340 317 7% 25%
Europe, Middle East & Africa 303 277 9% 14%
Asia, Pacific & Australia 125 166 (25)% (16)%
Group 768 760 1% 12%
------------ ------------ --------- -----------
By Business Line
Local Business 431 433 -% 10%
Power Projects excl pass-through
fuel 314 312 1% 14%
Pass-through fuel 23 15 50% 62%
Group 768 760 1% 12%
------------ ------------ --------- -----------
Group excluding pass-through
fuel 745 745 -% 12%
------------ ------------ --------- -----------
Trading profit
As
Reported Underlying
2014 2013 Change Change
By Region GBP million GBP million % %
Americas 66 67 (2)% 26%
Europe, Middle East & Africa 50 32 57% 69%
Asia, Pacific & Australia 24 56 (58)% (53)%
Group 140 155 (10)% 6%
------------ ------------ --------- -----------
By Business Line
Local Business 57 62 (8)% 5%
Power Projects excl pass-through
fuel 86 95 (11)% 7%
Pass-through fuel (3) (2) (25)% (35)%
Group 140 155 (10)% 6%
------------ ------------ --------- -----------
Group excluding pass-through
fuel 143 157 (10)% 6%
------------ ------------ --------- -----------
The performance of each of these regions is described below:
Americas
As As As
reported reported reported Underlying(1)
2014 2013 Change Change
GBP million GBP million % %
Revenues
Local 218 215 2% 14%
Power Projects 122 102 20% 51%
Total 340 317 7% 25%
------------ ------------ --------- --------------
Trading profit 66 67 (2)% 26%
Trading margin 19% 21%
---------------- ------------ ------------ --------- --------------
(1) Underlying excludes currency.
Our Americas business delivered a strong performance in the first half. Underlying revenue increased by 25% and trading profit by 26%. Reported trading margin decreased from 21% to 19%, with the decrease driven by the currency mix of our contracts.
Revenue in our Americas Local business increased 14% with rental revenue up 10% and services revenue up 25%. Rental revenue growth was driven by power rental revenue, which increased by 14%. Temperature control revenue grew by 3% but cooler ambient temperatures in North America resulted in a slower than usual start to the crucial summer season. Oil-free compressed air revenue declined 1%.
Growth was again strong in the oil and gas sector with continuing strength in shale in North America. This growth was supported by strong performances in petrochemical and refining as well as events, notably the FIFA World Cup contract in Brazil for which we provided all the broadcast power.
In North America growth was broadly based with the stand out performance coming from gas-fuelled generation which grew 80% over the prior year driven by both shale and encouragingly a number of industrial and construction applications. Our base business in Brazil was flat on the prior year in the face of very challenging economic conditions. Elsewhere in South America the local business continued to grow strongly, notably in Argentina, Peru and Colombia.
Power Projects revenue, on an underlying basis, was up 51% on last year, despite an GBP11 million ($18 million) decline in our Military revenues as the US withdrawal from Afghanistan continues. The growth in Power Projects was driven by a number of new projects which we secured during 2013, notably in Panama, Curacao and Peru, as well as incremental revenue from our contracts in Argentina. In Panama, we are operating as a licensed generator to the Panamanian wholesale electricity market, a first for Aggreko and the temporary power industry. The hydro shortage in the country during the second quarter meant that the plant operated continuously, which had a significant impact on revenue given the volume of fuel required.
Europe, Middle East & Africa (EMEA)
As As As
reported reported reported Underlying(1)
2014 2013 Change Change
GBPmillion GBPmillion % %
Revenues
Local 161 149 8% 14%
Power Projects excl pass through fuel 119 113 6% 15%
Pass through fuel 23 15 50% 62%
Total 303 277 9% 14%
----------- ----------- --------- --------------
Trading profit
Excl pass-through fuel 53 34 55% 69%
Pass-through fuel (3) (2) (25)% (35)%
Total 50 32 57% 69%
----------- ----------- --------- --------------
Trading margin excl. pass-through
fuel 19% 13%
--------------------------------------- ----------- ----------- --------- --------------
(1) Underlying excludes currency and pass-through fuel.
Our EMEA business had a very strong first half with underlying revenue increasing by 14% and trading profit by 69%. Reported trading margin increased from 13% to 19% mainly driven by a better mix of higher margin rental revenue compared to lower margin services revenue as well as a lower level of mobilisation costs compared to the same period last year, with 220MW of gas projects being mobilised in Mozambique and Ivory Coast during the first half of 2013.
Revenue in our EMEA Local business, on an underlying basis, increased 14% on last year. Rental revenue increased by 20% with services revenue up 3%. Within rental revenue, power increased by 23% and temperature control increased by 4%.
Growth was broadly spread across the whole region. We experienced strong growth in the oil and gas sector, notably in Russia where we continue to grow our business in Siberia as well as in our newly established Romanian business and our Middle Eastern and Norwegian businesses. We are also seeing encouraging growth in gas-fuelled generation, notably, in Russia and Romania, building on our success in North America. Growth was also strong in the utilities sector with a key element being the provision of temporary power to support the continued commissioning of off-shore wind farms in Germany and the UK, as well as our first contract for wind farm commissioning in South Africa. We continue to expand our work in mining and we have been awarded a number of contracts in Africa. We are also encouraged by the early progress of our new local businesses in Turkey, Kenya, Namibia, Nigeria and Angola. Our fastest growing new business is Iraq, where we are supporting the development of the oil and gas sector in Southern Iraq and Kurdistan. We are clearly cognisant of the security situation not just in Iraq but also in other countries such as Libya, across both our Local and Power Project businesses and continue to monitor developments closely.
At the time of writing this report the Glasgow 2014 Commonwealth Games has just ended. Aggreko provided 27MW of temporary power across the Games' 29 venues and the International Broadcast Centre.
Revenue in our Power Projects business, excluding fuel, was up 15% driven by the impact of the half two 2013 on hires of 122MW in Mozambique for the provision of power to Namibia and Mozambique, and an additional 100MW in Ivory Coast. Furthermore there were new contract wins in the second half of 2013 and the first half of 2014, such as 50MW of diesel in Guinea and 170MW of summer peak shaving work in Oman and Saudi. The impact of these new contracts was partly offset by off-hires in Angola and Kenya. In Southern Africa, we are supplying cross-border power into three countries as part of the Southern African Power Pool from our plant in Mozambique, where we have just extended the first 108MW until summer 2015.
Asia, Pacific & Australia (APAC)
As As As
reported reported reported Underlying(1)
2014 2013 Change Change
GBPmillion GBPmillion % %
Revenues
Local 53 69 (24)% (11)%
Power Projects 72 97 (26)% (20)%
Total 125 166 (25)% (16)%
----------- ----------- --------- --------------
Trading profit 24 56 (58)% (53)%
Trading margin 19% 34%
---------------- ----------- ----------- --------- --------------
(1) Underlying excludes currency.
Our APAC business had a challenging first half with underlying revenue and trading profit declining by 16% and 53% respectively. The reported trading margin fell from 34% to 19% largely driven by the Power Projects business and the Australia Pacific Local business.
The Local business saw revenue decrease on an underlying basis by 11%. Rental revenue decreased by 14% and services revenue was in line with the same period last year. Within rental revenue power decreased by 14% and temperature control decreased by 6%.
Around 75% of APAC local revenue is generated by the Australia Pacific business which faced very challenging market conditions driven by the slowdown in the mining sector. The focus of our mining business in Australia has changed to support the operation of existing mines rather than the larger projects associated with the construction phase of new mines, which have significantly reduced. On a more positive note, our business in China grew strongly in the first half and we are encouraged by the early progress of our new Local business in South Korea, which was established earlier this year.
Power Projects in APAC had a difficult six months with revenue decreasing 20%, largely driven by Japan and Indonesia. Our largest contract in terms of value in Japan, for 100MW of post-tsunami gas-fired generation, finished at the end of the first quarter of 2013. Encouragingly, we still have 148MW of diesel power on rent in Hokkaido providing stand-by power. In Indonesia, a combination of permanent power generation replacing temporary power on some of our sites in the second half of 2013, as well as intense price competition for both new contracts and extensions, resulted in a sharp year-on-year drop in revenues. Combined, the impact of reduced revenue and margins in Japan and Indonesia had a material impact on APAC's trading result in the first half of 2014. We are pleased, however, that new contracts were signed in the Philippines (42MW), Bangladesh (30MW) and Myanmar (21MW) in the first half of the year.
Power Projects Business
As As As
reported reported reported Underlying(1)
2014 2013 Change Change
GBPmillion GBPmillion % %
Revenues
Excl pass-through fuel 314 312 1% 14%
Pass-through fuel 23 15 50% 62%
Total 337 327 3% 14%
----------- ----------- --------- --------------
Trading profit
Excl pass-through fuel 86 95 (11)% 7%
Pass-through fuel (3) (2) (25)% (35)%
Total 83 93 (11)% 7%
----------- ----------- --------- --------------
Trading margin excl pass-through fuel 27% 31%
--------------------------------------- ----------- ----------- --------- --------------
(1) Underlying excludes currency and pass-through fuel.
Our Power Projects business had an encouraging six months with underlying revenue increasing by 14% and trading profit increasing by 7%. Reported trading margin decreased to 27% (2013: 31%). The main reasons for the margin decline were the completion of contracts in Japan and Military and pricing pressure, in particular in Indonesia, as well as the currency mix of our contracts which had a two percentage point impact. These factors were in part offset by a lower charge to the income statement for the provision of bad debts in the six months to 30 June 2014 as compared to the prior year.
Order intake for the first half was 488MW, ahead of the 397MW secured in the same period last year. This includes the previously announced 120MW Libyan contract, 50MW in Senegal and 170MW of summer peak shaving work in Oman and Saudi. We are also pleased to have extended our gas powered contracts in Bangladesh and Mozambique. At the end of the period, our order book was over 26,000MW months, the equivalent of 9 months' revenue (2013: 11 months) at the current run-rate.
We go into the second half with 895MW of gas-fuelled generation on rent, and revenue from gas up 19% on the prior year in the first half. We are currently converting our existing diesel fleet into G3+ and HFO-capable sets at a rate of about 6 sets a week, and we currently have 538MW of HFO/G3+ sets in the fleet across both businesses. We continue to experience some early stage challenges with our HFO product, due to the difficulty in securing the appropriate grade of fuel for our engines. We are working to resolve these issues and the product continues to be very attractive to our customers.
Local Business
As As As
reported reported reported Underlying(1)
2014 2013 Change Change
GBP million GBP million % %
Revenue 431 433 -% 10%
Trading profit 57 62 (8)% 5%
Trading margin 13% 14%
---------------- ------------ ------------ --------- --------------
(1) Underlying excludes currency.
Our Local business delivered a strong first half with underlying revenue increasing by 10%. Rental revenue increased by 9% and services revenue by 13%. Within rental, power increased 11%, driven by EMEA and the Americas, whilst temperature control increased by 2% and oil-free air decreased 1%. Trading profit increased by 5% and trading margin reduced slightly from 14% to 13%. This increase in revenue was driven by good growth in emerging markets1 as well as our more mature businesses and was helped by the GBP9 million of revenue in half one from the FIFA World Cup in Brazil and the Glasgow 2014 Commonwealth Games. It is also pleasing to note that the segment of "mini-projects"2 has continued to show growth over the period despite the decline in Australian mining projects with 290MW of mini projects on rent as at June 2014 (June 2013: 260MW).
1 Emerging Local business markets defined as: Russia, Middle East,
Asia, Africa and Latin America.
2 Mini projects are defined as Local business projects which are
12MW and above in size and 3 months or longer in duration.
Outlook
Overall, the Group performance in the first half of the year has been encouraging. The Local business has performed well in the first half but, as ever, the third quarter is important and, whilst we expect to deliver growth in the second half, comparators are more challenging. In Power Projects, whilst we take some encouragement from the order intake in the first half and a healthy enquiry pipeline, customers generally remain cautious.
We now plan to spend around GBP235 million on fleet capital expenditure for the full year, which is an increase of GBP20 million on our previous guidance reflecting some additional investment in our gas fleet in North America and our projects diesel fleet. As a result of our disciplined approach to capital expenditure, we also expect to deliver strong cash generation in the second half.
We continue to expect underlying trading profit for the full year to be similar to 2013.
Financial Review
The movement in exchange rates during the period reduced revenue by GBP80 million and trading profit by GBP23 million. The largest currency impact on revenue came from the US dollar followed by the Argentinean Peso and then the Australian dollar and Brazilian Reais. Currency translation also gave rise to a GBP24 million decrease in net assets from December 2013 to June 2014. Set out in the table below are the principal exchange rates affecting the Group's overseas profits and net assets:
June 2014 June 2013 Dec 2013
(per GBP sterling)
Average Period Average Period Average Period
End End End
Principal Exchange
Rates
United States Dollar 1.67 1.70 1.55 1.53 1.57 1.65
Euro 1.22 1.25 1.18 1.17 1.18 1.19
UAE Dirhams 6.13 6.25 5.67 5.60 5.75 6.08
Australian Dollar 1.83 1.81 1.52 1.65 1.62 1.86
Brazilian Reais 3.83 3.74 3.14 3.33 3.38 3.89
Argentinian Peso 13.05 13.84 7.92 8.20 8.57 10.70
(Source: Bloomberg)
---------------------- -------- ------- -------- ------- -------- -------
Reconciliation of underlying growth to reported growth
The table below reconciles the reported and underlying revenue and trading profit growth rates:
Revenue Trading profit
GBP million GBP million
2013 760 155
Currency (80) (23)
2013 pass-through fuel (15) 2
2014 pass-through fuel 23 (3)
Underlying growth 80 9
2014 768 140
------------ ---------------
As reported growth 1% (10)%
------------ ---------------
Underlying growth 12% 6%
------------ ---------------
Interest
The net interest charge for the first half of 2014 was GBP10 million, a decrease of GBP3 million on 2013, reflecting lower average net debt period on period, and arrangement fees included in the 2013 interest number for debt refinanced during the period. Interest cover, measured against rolling 12-month EBITDA, remains strong at 28 times (June 2013: 25 times)relative to the financial covenant attached to our borrowing facilities that EBITDA should be no less than 4 times interest.
Effective Tax Rate
The current forecast of the effective tax rate for the full year, which has been used in the interim accounts is 26% as compared with 27% in the same period last year.
Return to shareholders
In June 2014 we completed a GBP200 million return of value to shareholders,by way of a B share scheme, equivalent to 75 pence per ordinary share; a further GBP2 million will be paid in 2015 to those shareholders who elected to defer all or part of their return. Following the return, at 30 June 2014 our net debt stands at 0.9 times EBITDA on a rolling 12-month basis (June 2013: 0.8 times).
Dividends
The Board has decided to pay an interim dividend of 9.38 pence per ordinary share which represents an increase of 3% compared with the same period in 2013; dividend cover is 3.9 times (30 June 2013: 4.3 times) and is consistent with our strategy of reducing our full year dividend cover to around 3 times (31 December 2013: 3.5 times). This interim dividend will be paid on 3 October 2014 to shareholders on the register at 5 September 2014, with an ex-dividend date of 3 September 2014.
Cashflow
The net cash inflow from operations during the period totalled GBP213 million (2013: GBP270 million). This funded capital expenditure of GBP121 million which was down GBP2 million on the same period in 2013. Of the GBP121 million, GBP107 million was spent on fleet with about 60% going to the Local business and 40% to the Power Projects business. Within Power Projects, a substantial portion of the spend was for the conversion of 158 of our diesel sets to our new HFO and G3+ engines. Net debt of GBP537 million at 30 June 2014 was GBP15 million lower than the same period last year.
There was a GBP61 million working capital outflow in the six months to 30 June 2014 (6 months to 30 June 2013: GBP21 million outflow) driven by an increase in debtor balances. This increase is mainly driven by the current element of our gross debtors balance due to higher levels of activity, notably our contract in Panama which is running continuously and for which we have responsibility for fuel management. In addition debtor days in the Power Projects business have increased by 5 days to 100 days since December 2013 (30 June 2013: 111 days) which was the net impact of a better payment profile in the Americas and slower payments by a small number of customers.
Overall, the Power Projects bad debt provision at 30 June 2014 was similar to the provision at 31 December 2013 (GBP16 million lower than 30 June 2013).
Financial Resources
The Group maintains sufficient facilities to meet its normal funding requirements over the medium term. At 30 June 2014, these facilities totalled GBP798 million in the form of committed bank facilities arranged on a bilateral basis with a number of international banks and private placement notes. The financial covenants attached to these facilities are that EBITDA should be no less than 4 times interest and net debt should be no more than 3 times EBITDA; at 30 June 2014, these stood at 28 times and 0.9 times respectively. The Group does not consider that these covenants are restrictive to its operations. The maturity profile of the borrowings is detailed in Note 13 in the Accounts.
Net debt amounted to GBP537 million at 30 June 2014 and, at that date, un-drawn committed facilities were GBP259 million.
Net Operating Assets
The net operating assets of the Group at 30 June 2014 totalled GBP1,616 million, down GBP157 million on the same period in 2013. The main components of net operating assets are:
Movement
GBP million 2014 2013 Headline Const Curr.(1)
Rental fleet 1,035 1,219 (15)% (6)%
Property and
plant 89 85 5% 20%
Inventory 157 163 (4)% 7%
Net trade debtors 308 293 5% 22%
------------------- ------ ------ --------- ---------------
(1) Constant currency takes account of the impact of translational
exchange movements in respect of our businesses which operate
in currency other than sterling.
A key measure of Aggreko's performance is Return on Capital Employed (ROCE) (expressed as operating profit as a percentage of average net operating assets). For each first half, we calculate ROCE by taking the operating profit on a rolling 12-month basis and expressing it as a percentage of the average net operating assets at 30 June, 31 December and the previous 30 June. For the full year, we state the year's operating profit as a percentage of the average net operating assets as at 31 December, the previous 30 June and 31 December. The average net operating assets for the 12 months to 30 June 2014 were GBP1,662 million, down 3% on the same period in 2013; operating profit for the same period was GBP341 million.
In the first half of 2014 the ROCE decreased to 21% compared with 22% for the same period in 2013. This decrease was mainly driven by lower trading margins in our Power Projects business and our Local business in Australia Pacific.
Shareholders' Equity
Shareholders' equity decreased by GBP168 million to GBP972 million in the six months ended 30 June 2014, represented by the net assets of the Group of GBP1,509 million before net debt of GBP537 million. The movements in shareholders' equity are analysed in the table below:
Movements in Shareholders' Equity GBP million GBP million
As at 1 January 2014 1,140
Profit for the financial period 97
Dividend (1) (46)
Retained earnings 51
Employee share awards 2
Issue of shares to employees under share
option schemes 2
Return of value to shareholders (198)
Remeasurement of retirement benefits 1
Currency translation difference (24)
Movement in hedging reserve (4)
Other (2) 2
As at 30 June 2014 972
------------------------------------------ ------------ ------------
(1) Reflects the dividend of 17.19 pence per share (2013:
15.63 pence) that was paid during the period.
(2) Other includes tax on items taken directly to reserves.
Principal Risks and Uncertainties
In the day to day operations of the Group, we face risks and uncertainties. Our job is to mitigate and manage these risks and to aid this the Board has developed a formal risk management process which is described on page 70 of the 2013 Annual Report and Accounts. Also set out on pages 34 to 39 of that report are the principal risks and uncertainties which we believe could potentially impact the Group, and these are summarised below:
-- Economic conditions; -- Political risk; -- Failure to collect payments or to recover assets; -- Events; -- Failure to conduct business dealings with integrity and honesty; -- Safety; -- Competition; -- Product technology and emissions regulation; and -- People.
We do not believe that the principal risks and uncertainties facing the business have changed materially since the publication of the Annual Report and we believe these will continue to be the same in the second half of the year.
Shareholder information
Our website can be accessed at www.aggreko.com. This contains a large amount of information about our business, including a range of charts and data, which can be downloaded for easy analysis. The website also carries copies of recent investor presentations, as well as Stock Exchange announcements.
Angus Cockburn Carole Cran Interim Chief Executive Chief Financial Officer 5 August 2014
Group Income Statement
For the six months ended 30 June 2014 (unaudited)
6 months 6 months Year
ended ended ended
30 Jun 30 June 31 Dec
2014 2013 2013
Notes GBP million GBP million GBP million
Revenue 6 768 760 1,573
Cost of sales (334) (312) (643)
Gross profit 434 448 930
Distribution costs (197) (200) (395)
Administrative expenses (97) (93) (183)
Other income - 2 6
Operating profit 6 140 157 358
Net finance costs
- Finance cost (11) (13) (26)
- Finance income 1 - 1
Profit before taxation 130 144 333
Taxation 9 (33) (39) (87)
Profit for the period 97 105 246
All profit for the period is attributable to the owners of the Company.
Basic earnings per share
(pence) 8 36.48 39.32 92.15
Diluted earnings per
share (pence) 8 36.45 39.27 92.03
Group Statement of Comprehensive Income
For the six months ended 30 June 2014 (unaudited)
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Profit for the period 97 105 246
Other comprehensive (loss)/income
Items that will not be reclassified to profit
or loss
Remeasurement of retirement benefits (net of
tax) 1 (1) (4)
Items that may be reclassified subsequently
to profit or loss
Cashflow hedges (net of tax) (4) 9 8
Net exchange (losses)/gains offset in reserves
(net of tax) (22) 23 (87)
Other comprehensive (loss)/income for the period
(net of tax) (25) 31 (83)
Total comprehensive income for the period 72 136 163
Group Balance Sheet (Company Number: SC177553)
As at 30 June 2014 (unaudited)
30 June 30 Jun 31 Dec
2014 2013 2013
Notes GBP million GBP million GBP million
Non-current assets
Goodwill 10 133 147 133
Other intangible assets 18 24 18
Property, plant and equipment 11 1,124 1,304 1,165
Derivative financial instruments - 3 -
Deferred tax asset 22 11 23
1,297 1,489 1,339
Current assets
Inventories 157 163 149
Trade and other receivables 12 478 461 417
Cash and cash equivalents 5 38 32 38
Derivative financial instruments 4 16 11
Current tax assets 15 23 21
692 695 636
Total assets 1,989 2,184 1,975
Current liabilities
Borrowings 13 (36) (78) (36)
Derivative financial instruments - - (1)
Trade and other payables (318) (343) (300)
Current tax liabilities (62) (54) (68)
Provisions - (2) -
(416) (477) (405)
Non-current liabilities
Borrowings 13 (539) (506) (365)
Derivative financial instruments (8) (10) (8)
Deferred tax liabilities (51) (51) (51)
Retirement benefit obligation 16 (3) (2) (6)
Provisions - (1) -
(601) (570) (430)
Total liabilities (1,017) (1,047) (835)
Net assets 972 1,137 1,140
Shareholders' equity
Share capital 14 42 49 49
Share premium 20 20 20
Treasury shares (15) (24) (24)
Capital redemption reserve 13 6 6
Hedging reserve (net of deferred
tax) (5) - (1)
Foreign exchange reserve (94) 38 (72)
Retained earnings 1,011 1,048 1,162
Total shareholders' equity 972 1,137 1,140
Group Cash Flow Statement
For the six months ended 30 June 2014 (unaudited)
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
Notes GBP million GBP million GBP million
Cash flows from operating activities
Cash generated from operations 4 213 270 603
Tax paid (30) (31) (68)
Interest received 1 - 1
Interest paid (10) (13) (27)
Net cash generated from operating
activities 174 226 509
Cash flows from investing activities
Purchases of property, plant and
equipment (PPE) (121) (123) (228)
Proceeds from sale of PPE 4 7 14
Net cash used in investing activities (117) (116) (214)
Cash flows from financing activities
Net proceeds from issue of ordinary
shares 2 1 1
Increase in long-term loans 392 280 430
Repayment of long-term loans (204) (331) (637)
Net movement in short-term loans 8 (4) (4)
Dividends paid to shareholders (46) (42) (66)
Return of capital to shareholders (198) - -
Purchase of treasury shares - - (1)
Net cash used in financing activities (46) (96) (277)
Net increase in cash and cash equivalents 11 14 18
Cash and cash equivalents at beginning
of the period 12 1 1
Exchange loss on cash and cash equivalents (3) - (7)
Cash and cash equivalents at end
of the period 5 20 15 12
Reconciliation of net cash flow to movement in net debt
For the six months ended 30 June 2014 (unaudited)
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
Notes GBP million GBP million GBP million
Increase in cash and cash equivalents 11 14 18
Cash (inflow)/outflow from movement
in debt (196) 55 211
Changes in net debt arising from
cash flows (185) 69 229
Exchange gain/(loss) 11 (28) 1
Movement in net debt in period (174) 41 230
Net debt at beginning of period (363) (593) (593)
Net debt at end of period 13 (537) (552) (363)
Group Statement of Changes in Equity
For the six months ended 30 June 2014 (unaudited)
As at 30 June 2014
Attributable to equity holders of the Company
Foreign
exchange
reserve
(translation)
GBP million
Ordinary Share
share premium Treasury Capital Hedging Total
capital account shares redemption reserve Retained equity
GBP GBP GBP reserve GBP earnings GBP
million million million GBP million million GBP million million
Balance at 1
January
2014 49 20 (24) 6 (1) (72) 1,162 1,140
Profit for the
period - - - - - - 97 97
Other comprehensive
income:
Fair value
gains
on foreign
currency
cash flow
hedge - - - - 1 - - 1
Transfers from
hedging
reserve
to revenue - - - - (5) - - (5)
Currency
translation
differences - - - - - (24) - (24)
Deferred tax on
items taken to
or transferred
from equity - - - - - 2 - 2
Remeasurement
of
retirement
benefits(net
of tax) - - - - - - 1 1
Total
comprehensive
income for the
period ended
30
June 2014 - - - - (4) (22) 98 72
Transactions
with
owners:
Employee share
awards - - - - - - 2 2
Issue of
ordinary
shares to
employees
under share
option
schemes (Note
(i)) - - 9 - - - (7) 2
Return of
capital
to
shareholders
(Note 14) - - - - - - (198) (198)
Capital
redemption
reserve (Note
14) (7) - - 7 - - - -
Dividends paid
during the
period - - - - - - (46) (46)
(7) - 9 7 - - (249) (240)
Balance at 30
June
2014 42 20 (15) 13 (5) (94) 1,011 972
(i) During the period 269,681 Ordinary shares have been transferred
from the Employee Benefit Trust to satisfy the exercise of options
under the Sharesave Schemes by eligible employees. In addition
174,147 shares were transferred from the Employee Benefit Trust
to participants in the Long Term Incentive Plan.
Group Statement of Changes in Equity
For the six months ended 30 June 2014 (unaudited)
As at 30 June 2013
Attributable to equity holders of the Company
Foreign
exchange
reserve
(translation)
GBP million
Ordinary Share
share premium Treasury Capital Hedging Retained Total
capital account shares redemption reserve earnings equity
GBP GBP GBP reserve GBP GBP GBP
million million million GBP million million million million
Balance at 1
January
2013 49 19 (34) 6 (9) 15 999 1,045
Profit for the
period - - - - - - 105 105
Other
comprehensive
income:
Fair value gains
on foreign
currency
cash flow hedge - - - - 12 - - 12
Transfers from
hedging
reserve to
revenue - - - - (3) - - (3)
Fair value gains
on interest rate
swaps - - - - 3 - - 3
Currency
translation
differences - - - - - 23 - 23
Deferred tax on
items taken to or
transferred from
equity - - - - (3) - - (3)
Remeasurement of
retirement
benefits(net
of tax) - - - - - - (1) (1)
Total
comprehensive
income for the
period
ended 30 June
2013 - - - - 9 23 104 136
Transactions with
owners:
Employee share
awards - - - - - - (3) (3)
Issue of ordinary
shares to
employees
under share
option
schemes - - 10 - - - (10) -
Current tax on
items
taken to or
transferred
from equity - - - - - - 3 3
Deferred tax on
items taken to or
transferred from
equity - - - - - - (3) (3)
New share capital
subscribed (Note
(i)) - 1 - - - - - 1
Dividends paid
during
the period - - - - - - (42) (42)
- 1 10 - - - (55) (44)
Balance at 30 June
2013 49 20 (24) 6 - 38 1,048 1,137
(i) During the period 298,327 Ordinary shares of 13 549/775 pence
each have been issued at prices ranging from GBP4.37 to GBP14.32
to satisfy the exercise of options under the Sharesave Schemes
by eligible employees. In addition 360,441 shares were allotted
at par to US participants in the Long-term Incentive Plan.
Notes to the Interim Accounts
For the six months ended 30 June 2014 (unaudited)
1 General information
The Company is a public limited company which is listed on the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is 120 Bothwell Street, Glasgow, G2 7JS, UK.
This condensed interim financial information was approved for issue on 5 August 2014.
This condensed consolidated interim financial information does not comprise Statutory Accounts within the meaning of Section 434 of the Companies Act 2006. Statutory Accounts for the year ended 31 December 2013 were approved by the Board on 6 March 2014 and delivered to the Registrar of Companies. The report of the auditors on those Accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.
The condensed consolidated interim financial information is unaudited but has been reviewed by the Group's auditors, whose report is on page 30.
2 Basis of preparation
This condensed consolidated interim financial information for the six months ended 30 June 2014 has been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority (previously the Financial Services Authority) and IAS 34 'Interim financial reporting' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2013, which have been prepared in accordance with IFRSs as adopted by the European Union.
Going concern basis
The Group's banking facilities are primarily in the form of committed bank facilities arranged on a bilateral basis with a number of international banks and private placement notes; facilities totalled GBP798 million at 30 June 2014. The financial covenants attached to these facilities are that EBITDA should be no less than 4 times interest (30 June 2014: 28 times) and net debt should be no more than 3 times EBITDA (30 June 2014: 0.9 times). The Group does not consider that these covenants are restrictive to its operations. The maturity profile of the borrowings is detailed in Note 13 to the Accounts. The Group's forecasts and projections show that the facilities in place are currently anticipated to be ample for meeting the Group's operational requirements for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its consolidated interim financial statements.
3 Accounting policies
Except as described below, the accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2013, as described in those annual financial statements.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective date (or date of early adoption). There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would be expected to have a material impact on the Group.
4 Cashflow from operating activities
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Profit for the period 97 105 246
Adjustments for:
Tax 33 39 87
Depreciation 130 137 273
Amortisation of intangibles 2 2 5
Finance income (1) - (1)
Finance cost 11 13 26
Profit on sale of PPE - (2) (6)
Share based payments 2 (3) (2)
Changes in working capital (excluding the effects of exchange
differences on
consolidation):
(Increase)/decrease in inventories (12) 20 23
Increase in trade and other receivables (81) (30) (32)
Increase/(decrease) in trade and other
payables 32 (8) (10)
Net movement in provisions for liabilities
and changes - (3) (6)
___ ___ ___
Cash generated from operations 213 270 603
5 Cash and cash equivalents
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Cash at bank and in hand 34 27 23
Short-term bank deposits 4 5 15
38 32 38
Cash and bank overdrafts include the following for the purposes
of the cashflow statement:
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Cash and cash equivalents 38 32 38
Bank overdrafts (Note 13) (18) (17) (26)
20 15 12
6 Segmental reporting
(a) Revenue by segment
External revenue
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP GBP
million million
Americas 340 317 645
Europe, Middle
East and Africa 303 277 625
Asia, Pacific
and Australia 125 166 303
Group 768 760 1,573
Local business 431 433 904
Power Projects 337 327 669
Group 768 760 1,573
(i) Inter-segment transfers or transactions are entered into under
the normal commercial terms and conditions that would also be
available to unrelated third-parties. All inter-segment revenue
was less than GBP1 million.
(ii) Trading profit in table 6(b) below is defined as operating profit
of GBP140 million. (30 June 2013: GBP157 million, 31 December
2013: GBP358 million) excluding gain on sale of property, plant
and equipment of GBPnil million (30 June 2013: GBP2 million, 31
December 2013: GBP6 million).
(b) Profit by segment
Trading profit pre Amortisation of
intangible intangible assets
asset amortisation arising from business Trading profit
combinations
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec
2014 2013 2013 2014 2013 2013 2014 2013 2013
GBP GBP GBP GBP GBP GBP GBP million GBP GBP
million million million million million million million million
Americas 68 69 151 (2) (2) (4) 66 67 147
Europe,
Middle
East and
Africa 50 32 114 - - - 50 32 114
Asia,
Pacific
and
Australia 24 56 92 - - (1) 24 56 91
Group 142 157 357 (2) (2) (5) 140 155 352
Local
business 59 64 163 (2) (2) (5) 57 62 158
Power
Projects 83 93 194 - - - 83 93 194
Group 142 157 357 (2) (2) (5) 140 155 352
Gain on sale of PPE Operating profit
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec
2014 2013 2013 2014 2013 2013
GBP million GBP million GBP GBP million GBP million GBP million
million
Americas - 1 3 66 68 150
Europe, Middle East and Africa - - 2 50 32 116
Asia, Pacific and Australia - 1 1 24 57 92
Group - 2 6 140 157 358
Local business - 2 4 57 64 162
Power Projects - - 2 83 93 196
Operating profit - 2 6 140 157 358
Finance costs - net (10) (13) (25)
Profit before taxation 130 144 333
Taxation (33) (39) (87)
Profit for the period 97 105 246
(c) Depreciation and amortisation by segment
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Americas 51 53 107
Europe, Middle East and Africa 54 53 109
Asia, Pacific and Australia 27 33 62
Group 132 139 278
Local business 69 72 144
Power Projects 63 67 134
Group 132 139 278
(d) Capital expenditure on property, plant & equipment and intangible assets by segment
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Americas 64 56 103
Europe, Middle East and Africa 32 35 68
Asia, Pacific and Australia 25 32 57
Group 121 123 228
Local business 80 69 117
Power Projects 41 54 111
Group 121 123 228
(i) The net book value of total Group disposals of PPE during the
period were GBP4 million (30 June 2013: GBP5 million, 31 December
2013: GBP8 million).
(e) Assets/(Liabilities) by segment
Assets Liabilities
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec
2014 2013 2013 2014 2013 2013
GBP million GBP million GBP GBP million GBP million GBP
million million
Americas 859 918 819 (117) (121) (107)
Europe, Middle East and Africa 728 764 726 (164) (172) (160)
Asia, Pacific and Australia 361 449 375 (51) (65) (55)
Group 1,948 2,131 1,920 (332) (358) (322)
Local business 1,092 1,160 1,071 (148) (154) (144)
Power projects 856 971 849 (184) (204) (178)
Group 1,948 2,131 1,920 (332) (358) (322)
Tax and finance payable 37 34 44 (117) (110) (123)
Derivative financial instruments 4 19 11 (8) (10) (9)
Borrowings - - - (557) (567) (375)
Retirement benefit obligation - - - (3) (2) (6)
Total assets/(liabilities)
per balance sheet 1,989 2,184 1,975 (1,017) (1,047) (835)
7 Dividends
The dividends paid in the period were:
6 months 6 months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2014 2013 2013
Total dividend (GBP million) 46 42 66
Dividend per share (pence) 17.19 15.63 24.74
An interim dividend in respect of 2014 of 9.38 pence (2013: 9.11 pence), amounting to a total dividend of GBP24 million (2013: GBP24 million) was declared during the period. This interim dividend will be paid on 3 October 2014 to shareholders on the register on 5 September 2014, with an ex-dividend date of 3 September 2014.
8 Earnings per share
Basic earnings per share have been calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during the period, excluding shares held by the Employee Share Ownership Trusts which are treated as cancelled.
30 Jun 30 Jun 31 Dec
2014 2013 2013
Profit for the period (GBP million) 97 105 246
Weighted average number of ordinary shares in
issue (million) 266 267 267
Basic earnings per share (pence) 36.48 39.32 92.15
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
30 Jun 30 Jun 31 Dec
2014 2013 2013
Profit for the period (GBP million) 97 105 246
Weighted average number of ordinary shares in
issue (million) 266 267 267
Adjustment for share options (million) - - -
Diluted weighted average number of ordinary shares
in issue (million) 266 267 267
Diluted earnings per share (pence) 36.45 39.27 92.03
9 Taxation
The taxation charge for the period is based on an estimate of the Group's expected annual effective rate of tax for 2014 based on prevailing tax legislation at 30 June 2014. This is currently estimated to be 26% (2013: 27%).
10 Goodwill
30 Jun 30 Jun 31 Dec
2014 2013 2013
Cost GBP million GBP million GBP million
Balance at beginning of period 133 145 145
Exchange adjustments - 2 (12)
At end of period 133 147 133
___ ___ ___
Accumulated impairment losses - - -
___ ___
Net book value at end of period 133 147 133
11 Property, plant and equipment
Six months ended 30 June 2014 Short Vehicles,
Freehold leasehold Rental plant
&
properties properties Fleet equipment Total
GBP million GBP million GBP GBP million GBP
million million
Cost
At 1 January 2014 63 19 2,373 84 2,539
Exchange adjustments (1) - (65) - (66)
Additions 5 1 107 8 121
Disposals - - (27) (3) (30)
At 30 June 2014 67 20 2,388 89 2,564
Accumulated depreciation
At 1 January 2014 19 12 1,291 52 1,374
Exchange adjustments (1) - (37) - (38)
Charge for the period 1 1 123 5 130
Disposals - - (24) (2) (26)
At 30 June 2014 19 13 1,353 55 1,440
Net book values
At 30 June 2014 48 7 1,035 34 1,124
At 31 December 2013 44 7 1,082 32 1,165
Short Vehicles,
Freehold Leasehold Rental plant
&
properties Properties fleet equipment Total
Six months ended 30 June 2013 GBP million GBP million GBP million GBP million GBP
million
Cost
At 1 January 2013 59 18 2,328 95 2,500
Exchange adjustments 2 - 93 1 96
Additions 5 1 111 6 123
Disposals (2) - (24) (4) (30)
At 30 June 2013 64 19 2,508 98 2,689
Accumulated depreciation
At 1 January 2013 18 10 1,134 62 1,224
Exchange adjustments 1 - 47 1 49
Charge for the period 1 1 129 6 137
Disposals (1) - (21) (3) (25)
At 30 June 2013 19 11 1,289 66 1,385
Net book values
At 30 June 2013 45 8 1,219 32 1,304
At 31 December 2012 41 8 1,194 33 1,276
12 Trade and other receivables
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP
million
Trade receivables 369 366 346
Less: provision for impairment of receivables (61) (73) (61)
Trade receivables - net 308 293 285
Prepayments 38 32 26
Accrued income 95 91 64
Other receivables 37 45 42
Total receivables 478 461 417
Provision for impairment of receivables
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP
million
Americas 29 40 35
Europe, Middle East and Africa 22 25 20
Asia, Pacific and Australia 10 8 6
Group 61 73 61
Local business 13 9 12
Power Projects 48 64 49
Group 61 73 61
13 Borrowings
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP
million
Non-current
Bank borrowings 319 260 138
Private placement notes 220 246 227
539 506 365
Current
Bank overdrafts 18 17 26
Bank borrowings 18 61 10
36 78 36
Total borrowings 575 584 401
Short-term deposits (4) (5) (15)
Cash at bank and in hand (34) (27) (23)
Net borrowings 537 552 363
Overdrafts and borrowings are unsecured.
The maturity of financial liabilities
The maturity profile of the borrowings
was as follows:
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP
million
Within 1 year, or on demand 36 78 36
Between 1 and 2 years 231 - 38
Between 2 and 3 years 56 195 100
Between 3 and 4 years 76 26 -
Between 4 and 5 years 15 89 45
Greater than 5 years 161 196 182
575 584 401
Fair value estimation
The carrying value of non-derivative financial assets and liabilities, comprising cash and cash equivalents, trade and other receivables, trade and other payables and borrowings is considered to materially equate to their fair value. Derivative financial instruments, which are measured at fair value, comprise interest rate swaps representing a liability of GBP8 million categorised as level 2 and forward foreign currency contracts and options representing an asset of GBP4 million, which are considered to be level 1. The fair value of interest rate swaps is calculated at the present value of estimated future cash flows using market interest rates. The valuation techniques employed are consistent with the year end Annual Report. There are no financial instruments measured as level 3.
14 Share Capital
2014 2014
Number of
Shares GBP'000
(i) Ordinary shares
At 1 January (ordinary shares of 13 549/775) 269,029,545 36,880
Employee share option scheme 56,870 8
Share consolidation (79 for 83 shares as (12,968,020) -
at 27 May 2014*)
Share split:
Deferred ordinary shares (Note (i)) - (17,147)
B Shares (Note (iii)) - (181)
Transfer to capital redemption reserve
(Note (ii)) - (7,182)
At 30 June (ordinary shares of 4 329/395) 256,118,395 12,378
* Based on 269,086,415 ordinary shares
of 13 549/775 pence each on record date
of 27 May 2014.
(ii) Deferred ordinary shares of 6 18/25
pence (2013: 6 18/25 pence)
At 1 January and 30 June 182,700,915 12,278
(iii) Deferred ordinary shares of 1/775
pence (2013: 1/775 pence)
At 1 January and 30 June 18,352,057,648 237
(iv) Deferred ordinary shares of 9 84/775
pence (2013: nil)
At 1 January - -
Share split (Note (i)) 188,251,587 17,147
At 30 June 188,251,587 17,147
(v) B shares of 9 84/775 pence (2013: nil)
At 1 January - -
Share split (Note (iii)) 1,989,357 181
At 30 June 1,989,357 181
In June 2014 the Group completed a return of capital using a B share structure. The main terms of the return of capital and related consolidation of ordinary shares were:
- the issue of 1 B share of par value 9 84/775 pence for every 1
existing ordinary share held on the record date. This resulted
in the creation of 269,086,415 B shares; and
- the issue of 79 new ordinary shares of par value 4 329/395 pence
for every 83 existing ordinary shares held on the record date.
As a result of the return of capital:
(i) From the 269,086,415 B shares created a special dividend of 75
pence per B share was paid on 188,251,587 B shares, which then
converted into deferred shares of negligible value resulting in
a cash payment from the Company of GBP141.2 million on 6 June
2014;
(ii) A further 78,845,471 B shares were bought back at 75 pence each
resulting in a cash payment from the Company of GBP59.1 million
on 6 June 2014. As a result of this transaction GBP7,182k was
transferred from ordinary share capital to the capital redemption
reserve being 78,845,471 shares at par value 9 84/775 pence and
;
(iii) The Company intends to further offer to purchase the remaining
1,989,357 B shares in the future at 75 pence each.
GBP2 million has been transferred back to the Group from the Group Employee Benefit Trust. Such amount represents the portion of the 2011 return of capital received by the Employee Benefit Trust in respect of the B shares created out of the ordinary shares held in the Employee Benefit Trust at the time of the 2011 return; and is equivalent to 55 pence per B share.
15 Capital commitments
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
Contracted but not provided for (property,
plant and equipment) 40 25 15
16 Pension commitments
Analysis of movement in retirement benefit obligation in the period:
30 Jun 30 Jun 31 Dec
2014 2013 2013
GBP million GBP million GBP million
At start of period (6) (4) (4)
Income statement expense (1) (1) (2)
Contributions 3 4 5
Total remeasurements 1 (1) (5)
At end of period (3) (2) (6)
17 Related party transactions
Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. There were no other related party transactions in the period.
18 Seasonality
The Group is subject to seasonality with the third quarter of the year being our peak demand period, accordingly revenue and profits have historically been higher in the second half of the year.
Statement of Directors' Responsibilities
The Directors confirm that to the best of their knowledge, these condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- An indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- Material related party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The Directors of Aggreko plc are listed in the Aggreko plc Annual Report for 31 December 2013 with the exception of the following changes in the period: Rupert Soames and David Hamill resigned from the Board on 24 April 2014; Carole Cran was appointed to the Board on 1 June 2014.
By order of the Board
Angus Cockburn
Interim Chief Executive
Carole Cran
Chief Financial Officer
5 August 2014
Independent review report to Aggreko Plc
Report on the condensed set of financial statements
Our conclusion
We have reviewed the condensed set of financial statements, defined below, in the Interim Report of Aggreko Plc for the six months ended 30 June 2014. Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. This conclusion is to be read in the context of what we say in the remainder of this report.
What we have reviewed
The condensed set of financial statements, which are prepared by Aggreko plc, comprise:
-- the Group Balance Sheet as at 30 June 2014;
-- the Group Income Statement and Group Statement of Comprehensive Income for the period then ended;
-- the Group Cash Flow Statement for the period then ended; -- the Group Statement of Changes in Equity for the period then ended; and -- the explanatory notes to the condensed set of financial statements.
As disclosed in note 2, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The condensed set of financial statements included in the Interim Report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
What a review of condensed set of financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Responsibilities for the condensed set of financial statements and the review
Our responsibilities and those of the directors
The Interim Report, including the condensed set of financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the Interim Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
5 August 2014
Glasgow
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAPPLEEDLEFF
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