Northbridge confident in its markets as it enters new year
Industrial services and rental company Northbridge Industrial Services updated the market for the year ended 31 December on Friday, reporting that trading during the second half continued to achieve the improved performance it experienced in the first six months, and remained in line with the group's forecasts, showing a “considerable improvement” on 2018.
The AIM-traded firm said the “positive impact” of consistent revenue generation enabled its operational gearing to benefit group cash flow, resulting in trading EBITDA continuing to increase.
Recovery in the oil and gas market remained on track, with the Brent crude price around $60 per barrel, and investment by the main oil and gas majors continuing to flow through.
As a result, the group said it was “confident” that the results for the full year ended 31 December would be in line with management's expectations.
Northbridge explained that it has two core activities - Crestchic Loadbanks and Tasman Oil Tools.
It described Crestchic as a “specialist” electrical equipment business, which manufactures, sells and rents loadbanks and transformers from its base in Burton on Trent, with depots in France, Germany, Belgium, the United Arab Emirates and Singapore.
Crestchic also has satellite locations in China and the United States.
Tasman Oil Tools, meanwhile, rents drilling equipment to the oil, gas and geothermal industries from its sites in Australia, New Zealand, Malaysia and the United Arab Emirates.
“The UK and European activities of Crestchic continued to perform well as it is largely resilient to market conditions,” the board said in its statement.
“The US operation, which we started in 2016, has continued to grow and revenues have increased further.
“Our other overseas markets for power projects, principally relating to natural resources and shipyards, have shown signs of renewed activity and this has continued into 2020, as the recovery in the energy market remains evident.”
Northbridge said Crestchic had started 2020 with its largest ever new year order book for the sale of manufactured equipment, surpassing its 2019 record.
At Tasman, the company said the improvement in sentiment in the oil and gas market experienced during the first half of 2019 continued into the second six months.
“Australia in particular continued on its improvement, supported by increasing demand for natural gas and LNG for both domestic consumption and for export.
“As a result, activity levels in our rental business of Tasman continued to improve.
“Our focus on quality, service levels and modest ongoing investment, enabled Tasman to increase its market share in our key Asia Pacific region of operation.”
As a result, year-on-year revenues were now showing “significant gains” in large parts of the market, albeit from a low base.
Looking ahead, Northbridge said underlying sentiment in its main markets continued to improve, adding that despite recent events regarding global trade currently having an impact on business confidence, it believed the resilience of the recovery in its markets was “not in doubt”.
“We expect further good progress during 2020, and look forward to a profitable future.”
Northbridge said it would release its results for the year ended 31 December on 7 April.
At 0955 GMT, shares in Northbridge Industrial Services were up 4.29% at 158p.