At the Department of Energy and Climate Change, civil servants are wringing their hands about the looming energy shortage, but at Aggreko, Rupert Soames, the chief executive, is rubbing his palms in anticipation of windfall profits.

Over the next decade a swath of ageing coal and nuclear power stations must be closed, but we are already years behind in building the new nuclear fleet and the Government has not even authorised the first demonstration carbon capture coal plant.

What will fill the emerging power gap over the next decade? The answer lies in India, Kenya and Uganda, where Aggreko is running large parts of the power network. Thousands of diesel generators — supplied in containers ferried around the country on flat-bed trucks — keep the lights burning while local utilities wait for new gas-fired power stations or hydroelectric dams. In Kenya, Aggreko has installed enough generators to supply the national grid with a third of its power needs, an essential back-up in periods when drought reduces hydro-power output.

International Power Projects (IPP), Aggreko’s emerging market utility business, is growing like Topsy and now represents half of the group’s revenues and two thirds of the profits. While Aggreko’s transactional business — supplying short-term and emergency power — suffered in the first half, with profits down by almost a third, IPP’s revenues were up by 40 per cent and profits were up 72 per cent to $104 million (£64 million) in constant currencies.

Aggreko had a terrific second half in 2008, helping to power the razzmatazz at the Beijing Olympics as well as providing emergency cover for storm-related power failures in the United States. In order to defend its market share in the recession that followed, it cut its prices. Meanwhile, a cooler than average summer in America and Europe has meant fewer customers wanting temporary power to run air-conditioning units. As a result, revenues in the short-term businesses in Europe and America suffered an 11 per cent first-half fall, with most of the damage in the second quarter, and Aggreko hints that there was no sign of recovery in the current period.

It’s a fair assumption that the US market will remain depressed for a while, although Aggreko is correct to point out that a lot of short-term power has been booked in advance by its customers, for example for annual sports events. The group is not fazed by the recession and expects profits in constant currency for the year to match the out-turn in 2008. That confidence and a 15 per cent boost to the interim dividend pushed the shares up 10 per cent yesterday.

Even after the rise, the shares are not too expensive on a multiple of 11.3 times full-year earnings. And if you are worried about the lights going out, this is one to have.

Persimmon

Who buys a house in August? Lots of people, says Persimmon, the Yorkshire builder, which yesterday boasted that scores of homebuyers had taken a break from the beach to visit its sites. Forward sales are up 9 per cent to £910 million in the first half and its average selling price is up 6 per cent to £174,000.

Persimmon is convinced that the storm has passed and is starting work on 40 new sites, with plans afoot for a further 50 sites in the second half. Persimmon has even begun to take on management trainees, a big sign of confidence in the future.

If one swallow does not make a summer, a good few weeks does not make a long-term recovery and Mike Farley, chief executive, admits that much depends on the banks’ willingness to lend and job prospects. Mortgage approvals stand at just over half the long-term average of 93,000 a month and the majority of buyers must provide a deposit of 25 per cent. Persimmon is getting first-home buyers over the threshold with the help of Homebuy Direct, a government scheme, under which the builder and the Government together lend 30 per cent of the deposit. Persimmon’s shared equity position rose to £47.2 million in the six months to June, up from £19.8 million. That puts Persimmon out of pocket and government funding for these schemes is also under pressure. When funds run out, it will be back to square one for first-time buyers. Stay away.

Punch Taverns

The British pub is still alive, if not yet thriving. The stock market has shrugged off rumours of its demise and snide comments that Punch, a big landlord, had become a “zombie” company, drained of value by its burdensome debts. Punch’s figures suggest that the market had good reason to push up the shares by 22 per cent. It has repaid £1 billion in borrowings by selling pubs and cancelling the dividend. The trading performance also provided grounds for optimism; the performance of its leased business has stopped getting worse and the managed estate is showing signs of improvement.

Punch raised £375 million in May in order to cut its debt and the shares are up more than fourfold since January, but Punch is not yet free of the problems besetting the industry. It moved 450 pubs into its “turnaround group” — essentially hoisting a “For Sale” sign outside another poorly performing chunk of its estate, bringing the total to 1,700.

The worst-performing pubs remain those that have been unable or unwilling to react to the smoking ban and changing demographics by introducing food and becoming more friendly to families and women.

Yet Punch, with its finances in order, is better placed than many to adapt. At nearly seven times next year’s earnings, the shares are no longer the bargain they were, but last orders remain some way off. Buy.

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