Aggreko (AGK) 910.5p

Loss to date: 7.8%

Original entry point: Buy at 987p, 12 January 2017

Glasgow-based temporary power solutions provider Aggreko (AGK) has started to make some interesting acquisitions, albeit relatively small compared to its £2.3bn market cap.

Last month it bought Indonesia-based power rental firm KBT, allowing Aggreko to cement its position with local utility firm PLN. KBT had 200MW of diesel and gas contracts with PLN which will add to the 140MW that Aggreko had already contracted with the provider.

The company has also spent £40m acquiring Younicos, a smart energy firm that uses battery storage.

Younicos is based in Germany and the US and made an operating loss of £15m last year. However, there is growing interest in energy storage, hence why we feel this acquisition is not simply a small bolt-on deal.

Aggreko expects the company to remain loss making in the short term and therefore dilute earnings.

Aggreko’s chief executive Chris Weston says the acquisition ‘will allow us to open up new markets and provide our customers around the world with a reliable, cheaper and cleaner source of energy.’

We remain bullish on the investment case, despite a profit warning in March.

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