Tempus wonders if the market's long love affair with the Aggreko growth story is coming to an end.
The company, which provides temporary power supplies both to emerging economies and to one-off events, such as t the Olympic Games rattled the markets on Friday. It increased the provision for bad debts and said that capital spending would be lower next year than the £415m expected on the fleet in 2012.
Rupert Soames, the Chief Executive, talked of a tap on the brakes and it is plain that prospects for the world economy are not as good as they were in the spring.
The long-term driver for the business, the growing need for power generation, is still there. With the shares
now on a more realistic 20 times this year's earnings, this might be seen as a buying opportunity. But short-term, recovery could be slow.
Questor in The Telegraph says that infrastructure fund HICL is worth its place in a portfolio for the long-term income stream it offers.
HICL's management is targeting a dividend this year of about 7p, up from 6.85p last year. This leaves the shares trading on a prospective yield of about 5.6%. The last portfolio update in March showed the group had a net asset value of 112.8p, so the shares are trading at a premium.
However, when the next portfolio valuation is released, Questor expects this premium to reduce. First tipped at 109.5p in June 2009, the shares remain a buy for the company's long-term income stream, although they have risen 13% since the tip. Such funds should show capital appreciation over time as well. Questor last recommended a purchase in May when the shares stood at 117.6p.
Tempus in The Times writes that the market is relieved that Senior did not issue a thumping profits warning like Cookson Group and Morgan Crucible. Unlike them it get two thirds of its profits from the aerospace sector, which is still growing.
Senior's trading statement for the third quarter was mixed but generally positive. The number of aircraft delivered by Boeing and Airbus was up by 16% in the first nine months of the year. The other third of the group is Flexonics, which produces flexible components for automotive and other industries. Again, the picture is mixed.
Analysts were edging their forecasts for this year down a touch, but the consensus is still for pre-tax profits of about £89m, a rise of 15%, with more progress expected in 2013; Senior has perhaps £120m for infill acquisitions. The group is one of those British success stories that can perform on a global stage and the shares are on about 12 times this year's earnings, which looks like good value long-term.
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