Temporary power generator provider Aggreko (AGGK.L: Quote, Profile, Research) expects its eighth set of earnings upgrades from analysts in 18 months after saying 2008 will be better than expected, its CEO told Reuters, despite predicting a weaker North American market.
It posted profit growth of 51 percent for 2007 on Thursday, in line with its forecast to grow by around 50 percent.
Chief Executive Rupert Soames said on Thursday analysts would be "scurrying to their calculators" to work out how much to raise earnings forecasts after saying Aggreko would spend more on improving its fleet of generators in 2008 than it forecast last December.
"It's our eighth upgrade in 18 months, the business has very strong momentum," said Soames by phone.
The shares rose as much as 3.5 percent in early trading, but were down 2.5 percent at 584.5p by 0925 GMT.
The company will spend 235 million pounds ($468 million) on improving its fleet of generators in 2008, 10-15 million pounds higher than the company had expected last December. Aggreko intends to spend 1 billion pounds over 5 years.
The company, which can supply a small generator or build a 100 MW power station, also unveiled a medium term target of annual double-digit growth, in the teens, over the next five years on Thursday. It expects profit margins to come down but Soames would not give specific details.
"We are putting our hand up and saying we are seeing some early signs of weakening in North America," said Soames. "We will have a solid first quarter, the numbers are fine but my sense is things are starting to turn."
"Absent of a plague of frogs we should be able to cover any downside in North America elsewhere," he said.
Aggreko said pretax, pre-amortisation, profits grew 51 percent to 125.5 million pounds in the year to Dec. 31, 2007, in line with the mean market forecast of 125.3 million pounds, according to a Reuters Estimates poll.
