RUPERT Soames, the new chief executive of Aggreko, has brought in a consultant to carry out a thorough review of the Glasgow-based temporary equipment hire business.
The review, carried out by Bain & Co which has recently been advising whisky company Kyndal on its strategy, will be completed by next spring when Soames will tell investors about its results.
Soames, who took over as chief executive on July 1, commissioned the review - costing (pounds) 1.5m - after a whistle-stop five-week tour of the company's operations, visiting 26 cities in the US, Europe, Asia, and the Middle East.
He said the timing of the review was right, coming six years after the business floated. The consultancy had been asked to consider every aspect of the company.
Soames said: ''We are not ruling things in and we are not ruling things out. We want to look at things in a different way. I want to check that we are spending (pounds) 65m of capital expenditure on the right things.''
He added that the review
will look at Aggreko's geographical spread, the impact of alternative fuel technology, and new environmental regulations.
One example might be more investment in predictive analysis, such as weather forecasting. Studying weather patterns could help Aggreko predict more quickly where demand will next come from for its emergency generators.
Soames' decision appears to have heeded analysts' calls for a fresh pair of eyes to look over the company, which has issued profits warnings in June this year and last year.
News of the review - which was not contained in the firm's stock exchange announcement of its half-year results - prompted Aggreko's shares to surge 6% to close up 9p at 159p.
The shares also enjoyed a spurt two weeks ago after investors speculated that the firm would be a major beneficiary from the power cuts in cities on America's East Coast.
Aggreko provided between 50 megawatts and 60 megawatts of power during the crisis - the equivalent of a small power station. However, the company hinted yesterday that extra revenues would amount to less than $1m ((pounds) 637,000).
Soames said that the company only benefited from power cuts when the problems took weeks rather than days to be fixed. The revenues from the power cuts were similar in size to providing emergency power after a hurricane. ''And we get about nine of those a year,'' he said.
The near-negligible impact of the power cuts meant that the company forecast ''no material change to the outlook for the business'' since a trading statement in June.
Analysts are forecasting pre-tax profits of between (pounds) 37m and (pounds) 41m for the full year. Aggreko yesterday reported a 33% slump in pre-tax profits for the six months ended on June 30 to (pounds) 17.2m against turnover of (pounds) 159.3m, down 5%.
Aggreko's revenues are split in three equal chunks between the US, Europe, and the rest of the world. The US was the worst-performing division. Trading profits collapsed from $11.3m ((pounds) 7.2m) to $900,000 on turnover down 17% to $79.6m.
Aggreko said the division was still suffering from over-capacity in the power market. Profits were also hit by the absence of a comparable contract to the Salt Lake City winter olympics, which boosted revenues in the first half of last year.
Europe was also hit by the loss of some contracts from utility companies in Spain. Trading profits fell by a third to e8.4m ((pounds) 5.8m) on turnover up 4% to e75.9m.
One bright spot was in the international arm, where profits were up 15% to (pounds) 11.5m on turnover 9% ahead to (pounds) 57.9m. Aggreko has won some contracts with US contractors in southern Iraq.
However, despite the surging share price, analysts were downbeat about the company's prospects. Paul Jones, an analyst at Numis Securities, said the stock appeared overvalued.
He said: ''The shares remain too expensive,'' blaming excess capacity in the US and lower margins in Europe after some large projects in Spain ended.
Analysts at Gerrard agreed, suggesting that the stock's high price/earnings ratio left the company ''looking fully valued, given the continued lacklustre earnings outlook''.
The interim dividend was unchanged at 2.2p a share.
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