Aggreko Share Discussion Threads

[luckyvince] 07/1/2009 17:11

deckergj. Good call,looks like you won the chocolate watch though didn't think it would be quite so quick.

[luckyvince] 07/1/2009 10:34

Thing is, i agree with both of you. Got well and truly shafted last 6 months always trying to catch the bottom and not taken profits when I had them. Typical novice stuff. in no-mans land today so i'll sit on the fence (again) and watch the charts. Thanks guys.

[deckergj] 07/1/2009 07:57

lucky, i sold yesterday at the resistance of 500 and hoping to get back in around 460ish but who knows, in these difficult times I am taking profit where I can,

ATB

deck

[targatarga] 06/1/2009 23:28

lucky - i like the chart. It's so easy to sell too early. I'm now in gbg and cre. Good luck

[luckyvince] 06/1/2009 17:56

Any thoughts on last few days and where share price may go. I bought in ages ago at 498 and nearly dumped them today. Would at least like to make something for my trouble but not sure the upside is worth holding on for with oil shares flying.

[beaudelaire] 20/12/2008 11:59

Well done targa -
A sell at Collins Stewart but who can trust any of these charlatans ?

[targatarga] 12/12/2008 15:54

premature again....

[targatarga] 12/12/2008 15:28

beau - i'm out at 424p.regards

[scburbs] 12/12/2008 13:12

Beaudelaire,

I quoted what AGK themselves had stated about the link between global GDP and AGK's performance!

You claim that 90% of the AGK business doesn't follow the world economy. Now it is clear the AGK do not agree with you, but what is your justification for your 90%?

If you want a closer look at where AGK get their revenue look at the helpful table on page 6. The 29% of utility revenue may be less cyclical, a lot of the rest look pretty cyclical to me except military which will be exposed to reduce government spending anyway.

[beaudelaire] 12/12/2008 10:38

scburbs-
AGK mainstream business is rather connected to
disasters in the whole world.
Africa, Asia (India) and the US have loads of
outages due to flooding, tornados and hurricans.
Thus 90% of AGK business doesn't follow the trend of the world economy.
AGK help is needed regardless of recession or no recession.
I think AGK wants to be conservative in its update as the whole world
is in a severe recession. they don't want to blow too much their
trumpet in the midst of what's happening.
So I am very confident about AGK as a solid company
that will deliver solid numbers for years to come.

[scburbs] 12/12/2008 08:48

Always worth remembering that Aggreko is a late cycle performer and you would expect it to continue to outperform in the early stage of any downturn. This is because the relevant decisions for the investment projects will have been made months or years earlier.

There is a very good summary of the GDP link to Aggreko's performance on pages 9 and 10 of the attached accounts.



Whilst there are clear potential future benefits in terms of power outages there is a more immediate concern based on the following statement:

"[projection not statement] .... in times of negative growth, our revenues would fall faster than the economy as a whole. And the impact on profits would be severe"

The apparent resilience of AGK's model is that this point has not really been hit yet due to the investment decision timescale. However, I suspect that come H2 next year this factor will be in play. Given this is potentially to come into play in H2, in my view, AGK should be sharply cutting capex to preserve cashflow. It is not which leads to a danger of much lower utilisation rates in future.

[beaudelaire] 12/12/2008 08:27

I think the resilience of the business will weather
any hick ups next year as the recession fads away
around second half of 09.
However, we can feel AGK flagging some possible weakness in this
paragraph.
"Our North American and European businesses have been more resilient than we expected in the face of negative GDP growth, but it is unlikely that they will be able to defy the economic headwinds indefinitely."

But under current worldwide severe recession AGK is doing far far better
than any other industrial. This is a good hold to me.

[scburbs] 12/12/2008 08:07

It is indeed an excellent trading performance, but in twitchy times investors may focus on the fact that they are set to be hit by economic headwinds perhaps in H2 next year, their capex expenditure remains high and will reduce free cash flow at a time of uncertainty and they have nearly half of their debt being short term debt with just over 9 months to maturity. I remain short.

"Looking ahead, we expect that the Group will make further progress in the first half of 2009. Our North American and European businesses have been more resilient than we expected in the face of negative GDP growth, but it is unlikely that they will be able to defy the economic headwinds indefinitely. However, we expect that International Power Projects, which will enter 2009 with over 30% more capacity on rent than at the start of 2008, will perform strongly in the first half, and that it will more than offset any weakness in the Local businesses.

In March 2008, we gave a strategy update in which we indicated that we planned to spend an average of £200m a year on fleet capex between 2008 and 2012. In 2008, we will spend about £260m, and our current plan is to invest around £170m in 2009, a level similar to 2007.

...

We anticipate that net debt at 31 December 2008 will be around £340m, against committed facilities of £506m. £157m of these facilities are due to be refinanced in September 2009. Discussions concerning the re-financing are proceeding well and, having added £60m to our facilities in recent months, we are confident that arrangements will be completed in the first half."

[beaudelaire] 12/12/2008 07:29

An excellent Trading Update.
Hope this won't be offset by the tanking in the US and Asia.

[targatarga] 11/12/2008 16:14

beau - yeh, hopefully tomorrow am....

[beaudelaire] 11/12/2008 16:03

targa -
Take your profits when you can.
This markets are impredictable.

[targatarga] 11/12/2008 15:53

thanks beau [9k at 413]

[beaudelaire] 11/12/2008 15:49

Good luck targa -

[targatarga] 11/12/2008 15:48

beau - very wise....unfortunately i'm an impatient investor so i'm in for 9k.... regards

[beaudelaire] 11/12/2008 15:44

targa -
I would wait until I see what comes out tomorrow.
The Trading Update even excellent could be overlaping
with a down market if the dow and asia tank tonight.
On the other hand if it's a bit cloudy because of the
economy downturn, expect a big swing down.
I may buy on Monday pm if the price is right and the trading
update is promising.

[targatarga] 11/12/2008 15:17

beau - these swing all over the shop! Missed my buying opportunity friday but may add later on weakness...regards

[beaudelaire] 11/12/2008 15:15

Strange sudden drop a day before the Trading Update.

[beaudelaire] 20/11/2008 08:32

In the sector, National Grid meeting expectations today
plus this excellent acquisition in India (new huge market),
plus disposal bringing £12.3 million extra cash should see
AGK fly today.

[beaudelaire] 18/11/2008 16:09

The Sterling weakness alone, compared to
other major currencies, ($ and Euro) will give
AGK an extra 10% on top of already
above expectation numbers next year.