Glasgow's Aggreko cheers £230m boost from Tokyo Olympics contract
Aggreko, the Glasgow-headquartered temporary power provider, has sealed a $315 million (£231m) contract for this summer’s rejigged Olympics in Japan.
The group confirmed that it had agreed and signed the necessary contract revisions with the event’s organising committee to reflect “scope changes and the impact of the delay of the games into this year”. The total revenue value to the group is now expected to be around $315m, higher than previously thought.
In August, Aggreko said it remained hopeful of a $250m boost from the Olympics after reporting a slide in first-half revenue and profits.
In its latest update, the firm said preparation work for the games was progressing well and bosses remain confident of delivering to the revised schedule.
As previously noted, guidance for the group’s profit before tax for 2021 of £170m to £190m assumes that the games proceed as planned at the increased overall contract value.
In a trading update in November, the firm said underlying group revenue – excluding the impact of currency and pass-through fuel – for the nine months to the end of September was down 14 per cent on the year before, driven by the “significant” impact of the pandemic in the last two quarters and the lower oil price. Reported revenue was down 15 per cent.
Interim results released last summer showed that underlying group revenue fell 12 per cent to £667m, driven by the impact of the virus and lower oil prices. Underlying operating profit of £64m was down 15 per cent and profit before tax declined by 13 per cent to £47m.
Chief executive Chris Weston said the firm had responded to the pandemic by taking immediate steps to reduce its cost base and increase its focus on cash generation.
He told investors: “The immediate steps we took to reduce our cost base and increase our focus on cash generation have enabled us to maintain the strong financial position in which we entered the crisis, while supporting national efforts through practical assistance and without drawing on UK government financial support.”
At the same time, the firm announced the appointment of Mark Clare as a non-executive director and chairman designate.
A message from the Editor:
Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.u2swisshome.com/subscriptions
Want to join the conversation? Please or to comment on this article.