Northbridge expects long-term growth from US operations

Industrial equipment retailer and hiring company Northbridge issued a pre-close update on Wednesday, reporting trading levels consistent with forecasts for its full trading year.

While not mentioning any specific numbers, Northbridge, which operates in two major segments, Crestchic Loadbanks and Tasman Oil Tools, said results for its full-year ended 31 December would be in line with management expectations.

Crestchic, a specialist electrical equipment business which rents loadbanks and transformers from its base in Burton-on-Trent, saw increased access to rental and sales opportunities in the USA, with the group expecting the North American market to provide it long-term growth opportunities moving forward.

"Some of our other overseas markets, particularly in the oilfields and shipyards which use our loadbanks and transformers, continued to experience lower levels of activity in power projects during 2017, as we have previously stated, but we do believe these markets will begin to recover in the medium term," the group noted.

Initial trading levels at Tasman Oil Tools, which began trading on 1 October 2017 and rents drilling equipment to the oil, gas and geothermal industries from sites in Australia, New Zealand and the UAE, were said to be immaterial on a group basis, but Northbridge did not expect this to be the case long, projecting the industry to bounce back in 2018 as local markets recover.

"Though the pace of recovery in the drilling industry still remains cautious, confidence in stable commodity prices and improving cash flow within the industry is likely to enable the oil majors and the Exploration and Production companies to increase capital spending during 2018," Northbridge wrote.

Northbridge said modest improvements in oil tool rental revenues alluded to in its interim results had continued.

As of 1240 GMT, shares had gained 2.86% to 111.60p.