Magnus Linklater, The Times, 3 June 2013
Rupert Soames believes in making his company reports not only intelligible, but frank. So while Aggreko’s annual results for 2012 (much of them written up by Mr Soames himself) record impressive turnover, profits and continued growth, they are also refreshingly honest. The figures for potential markets are described as “dodgy”, the projections “a bit flimsy” and its sales targets as “the best we can come up with”.
Of course, you can only come as clean as that if you’re confident you are doing the right thing. And Mr Soames, chief executive of Scotland’s most consistently successful engineering company, is nothing if not self-confident.
Last year, Aggreko, which provides temporary power wherever it is needed, was the company that kept the Olympic Games going; it exports generators across the world; it pitches in when there are disasters, such as the tsunami or the Japanese nuclear meltdown; and it was on the spot when help was needed last month after the Oklahoma tornado.
With a market cap of £4.9 billion, Aggreko has grown tenfold since Mr Soames took over. It is, as the Economist put it recently, the biggest company you’ve never heard of.
Not that it is all plain sailing. Last year a couple of bad debts pulled the figures back, and Mr Soames saw his bonus drop from £638,000 to a miserly £51,000.
But, as he admits cheerfully: “If you don’t get the target, then you don’t get the bonus. That’s what happens.”
It was a rare setback. As demand for power grows across the world, so Aggreko grows with it. Emerging countries demand more power. Expanding economies expect it – and, if national power supplies can’t match the appetite for electricity, Aggreko is there to fill the gap.
“Electricity is possibly quite the finest drug ever invented,” jokes Mr Soames.
He is an unusual creature in the business world. A scion of the Churchill family – his grandfather was Winston Churchill – who went into business rather than politics; a product of Eton and Oxford, who preferred to try his hand at management rather than making money in the City; a chief executive who enjoys getting involved in political debate; an advocate of a diverse energy policy, who is nevertheless highly critical of the way that governments – including Scotland’s — are making a dash for wind at the expense of other sources such as nuclear.
“Do you know the first person to talk about diversity?” he demands. “It was Winston Churchill. When he became First Lord of the Admiralty and they were going to convert all the Dreadnoughts from coal-fired to oil-fired boilers, people said, ‘What if we can’t get the oil?’. And he said the secret of all energy supply is diversity.”
That, he says, is as true today as it was then. “You need to have a sensible regime — you want to have some nuclear, you want to have some wind, you want to have some gas ... and you have diversity of supply, and you know that at some point one of them is going to be looking bloody stupid, another one’s going to look like a genius.”
Because wind is an uncertain commodity, it needs a stable and reliable power source to back it up. Too much wind puts too great a strain on the grid, and in his view Scotland’s ambitions for wind far outstrip the capacity of the grid to handle them.
Worse, he believes that conventional supplies of energy — coal-fired, nuclear, natural gas — are reaching their limits. “The ship is not only close to the rocks, it has gone towards the rocks faster than even I in my wildest imaginings would have thought it would two or three years ago,” he says.
“One reason is that the old power stations have been closed down much faster than anybody foresaw. In my back-of-the-fag-packet calculations I was thinking that they were going to be closed down by 2015-2016. But in the month of April alone Britain lost 10 per cent of its generating capacity.”
None of this, of course, is bad news for Mr Soames’s company. If power does run short, Aggreko is well placed to fill some of the gaps. It has weathered the recession well, and its Scottish base, he believes, is one of its strengths. The company has just completed a factory in Dumbarton, and its Scottish employees are working all over the world supplying and servicing generators.
“When we built our new factory in Dumbarton, we said, ‘Where shall we move it to? China, India, wherever ... and we decided to move it from Dumbarton to Dumbarton. For the sort of work that we do it’s as good a place as any. And in terms of having our head office here, the answer is well, why wouldn’t you?”
That might, he admits, change if the Scottish economy dips in the aftermath of independence, but for the moment, he sees no reason to believe that the political debate in Scotland will have any effect on the company’s performance. “Not in prospect,” he pronounces briskly.
Far more serious, in his view, is the uncertainty over Europe. He is himself a pronounced Europhile and he believes that any move to abandon Europe would be disastrous.
“I am by nature and instinct a Europhile,” he says, “and I see every day the manifold benefits that we get, in trading terms, from being part of the EU. So I see the upside of it every day, and I have done for the last 20 years, running businesses. It’s much easier to run a business being part of the EU than it was before.”
What, then, are the skills that he is looking for, and what did he, as a young executive, bring to the job when he first went into business?
“We want people who have boundless energy, enthusiasm and commitment, who are more interested in work than balance. And that doesn’t mean we want people to be boring — we work hard and play hard.
“I’ve never not had fun. I really enjoy what I do. And I find it really interesting. There’s a tornado over in Oklahoma and the lines are buzzing, and photographs are coming through saying what we’re doing about it and the people who are out there I know, and it’s really exciting.”
Source: The Times