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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Northbridge Industrial Services Plc | LSE:NBI | London | Ordinary Share | GB00B0SPFW38 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 198.00 | 196.00 | 200.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMNBI
RNS Number : 1397L
Northbridge Industrial Services PLC
29 September 2016
29 September 2016
Northbridge Industrial Services Plc
("Northbridge" or the "Group")
Unaudited Interim Results for the six months ended 30 June 2016
Northbridge, the industrial services and rental company, today announces its unaudited interim results for the six month period ended 30 June 2016.
Key Points
-- Positive cash generation from operations of GBP1.7 million (2015: GBP3.3 million) -- Group revenue 36% lower at GBP11.8 million (2015: GBP18.6 million) -- Operating loss of GBP2.4 million (2015: GBP1.7 million) -- EBITDA (pre-exceptional) of GBP1.6 million (2015: GBP3.4 million) -- Ongoing reductions in operating expenses to reach GBP4.0 million on an annualised basis
-- Net debt down 48% to GBP8.4 million (GBP16.2 million at 30 June 2015, GBP14.3m at 31 December 2015)
-- Net gearing decreased to 19.3% (39.8% at 31 December 2015)
-- Positive entry into the US rental market and continued strong performance from the Loadbank and Transformer division in the UK and Europe
-- Successful Placing and Open Offer raising net GBP5.3 million and broadening the shareholder base
Commenting on the results and the outlook, Eric Hook, Chief Executive of Northbridge, said:
"Whilst the decline in the oil and gas market continues to hold back the Group's performance, we have taken quick and decisive action to reduce our operating costs and strengthen the balance sheet and we are now more optimistic about the longer term future".
For further information
Northbridge Industrial Services plc 01283 531645
Eric Hook, Chief Executive Officer
Iwan Phillips, Finance Director
Stockdale Securities Limited (Nominated Adviser and Broker) 020 7601 6100
Robert Finlay / Antonio Bossi / Henry Willcocks
Buchanan 020 7466 5000
Charles Ryland / Stephanie Watson / Catriona Flint
About Northbridge:
Northbridge Industrial Services plc hires and sells specialist industrial equipment. With offices or agents in the UK, USA, Dubai, Belgium, Germany, France, Australia, New Zealand, Singapore, China, Brazil and South Korea, Northbridge has a global customer base. This includes utility companies, the oil and gas sector, shipping, banking, mining, construction and the public sector. The product range includes loadbanks, transformers and oil tools. Northbridge was admitted to AIM in 2006 since when it has grown by providing a high level of service, responsiveness and flexibility to customers, by the acquisition of companies in the UK, Dubai, Australia, Belgium, New Zealand and Singapore and through investing further in those acquired companies to make them more successful. Northbridge continues to seek suitable businesses for acquisition across the world.
Chairman's statement
As announced in the trading update in August 2016, despite a modest recovery in the crude oil price since its lowest point in February 2016, market conditions for the majority of global participants in the oil and gas industry deteriorated further during the first half of 2016 and investments in current projects continued to be cut. This had a detrimental "knock on" impact on our oil tool rental businesses which are involved directly in this market. In response, we are continuing to take appropriate action to reduce our costs still further. Additionally, our load testing businesses in the Middle East and Asia Pacific regions have also experienced challenging conditions which have affected both rentals and in particular sales, due to lower activity in core markets such as shipyards and the resources sector.
As stated in the Trading Update issued on 1 August 2016, we do not expect any upturn in either of these sectors during the rest of 2016. However on a more positive note, our other activities, primarily focused on power reliability, continue to perform much better and remain a defensive hedge against the more volatile resource markets. The positive free cash flow generated from these businesses helps underpin the long term strategy of the Group.
Load bank rentals in the UK and Europe continued to perform well and, as a result of ongoing R&D and product innovation, some new markets are appearing on the horizon. Our new service division based in Burton supports the aftermarket in our manufactured products and has outperformed our expectations.
The new rental operation in the USA traded well since it started operations at the end of 2015 with our new multi-voltage units, unique to the market, having had a very positive reception. We plan some further modest investment later this year to sustain the momentum we have created in this region. The North American market is the largest in the world for our products and represents a good long term growth opportunity.
The Group's small operation in China servicing the shipyards continued to grow and our business supplying rental transformers, frequently used on power projects, benefitted from lower fuel costs and our equipment remained on hire for longer periods.
The successful Placing and Open Offer in April, which raised GBP5.3 million after costs, strengthened the balance sheet and gives us confidence in our future growth and we were pleased to welcome new institutional investors onto the register. The fund raising and the fall in Sterling following the EU referendum vote has made a very material reduction to our balance sheet gearing as the majority of our net assets are held outside the UK, and net debt almost halved to GBP8.4 million (2015: GBP16.2 million). Current trading, despite the decline in revenue, is continuing to generate sufficient cash flow to pay down existing debt as scheduled.
Looking forward to 2017 and beyond, there have been some more reassuring announcements from the oil service majors who form part of our customer base. They rely more on the activity levels in the oil fields rather than the oil price itself and they believe the worst is over and are predicting a return to more positive levels of business in the future. If this is the case, we remain well positioned to benefit from the market upturn as and when it arrives. In the meantime we will continue to reduce costs and maximise cash generation whist competing hard for every opportunity.
Financial results
Northbridge's revenue for the half year ended 30 June 2016 totaled GBP11.8 million (2015: GBP18.6 million) with gross profits of GBP4.8 million (2015: GBP8.1 million). Oil Tool revenue and gross profits were GBP2.2 million and GBP0.2 million respectively (2015: GBP6.7 million and GBP3.1million). Losses before tax totaled GBP2.7 million (2015: GBP2.1 million) after exceptional charges of GBP0.6 million (2015: GBP1.5 million) relating to the reorganisation.
Net assets at 30 June 2016 were GBP43.7 million (31 December 2015: GBP35.9 million). The fall in Sterling at the end of June following the EU referendum had a positive impact of GBP4.8 million on the balance sheet as more than 90% of our net assets were outside the UK.
The basic loss per share (LPS) was 11.3 pence compared with a LPS in 2015 of 10.5 pence. Fully diluted LPS was 11.3 pence (2015: 10.4 pence).
Net assets per share at 30 June 2016 were GBP1.68 (31 December 2015: GBP 1.94).
Financing and cash flow
Cash flow during the period continued to be positive, despite the continuing depressed market conditions. Cash flow from operating activities (before movements in working capital) was GBP1.0 million (2015: GBP1.9 million) and net cash from operating activities was GBP1.4 million (2015: GBP0.9 million). Capital expenditure into the hire fleet was GBP0.2 million (2015: GBP3.3 million).
In April, a further GBP5.3 million of equity (net of expenses) was raised by way of a Placing and Open Offer at GBP0.75 per share. This further strengthened the balance sheet and provided funds to secure our longer term future growth. These funds are currently held either on deposit or available for drawdown.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) and before exceptional costs in the first six months of 2016 was GBP1.6 million (2015:GBP3.4 million).
Debt repayments and covenants
During the period a further payment of deferred consideration in respect of Tasman New Zealand of GBP1.0 million was made (2015:GBP1.0 million). The final payment of $NZ2.0 million is due in 2017.
Also during the period, scheduled capital repayments under the finance leases of GBP0.5 million (2015: GBP0.9 million) and the scheduled payments due under the senior debt facility of GBP0.9 million were paid.
The Group's bank facilities are provided by RBS Bank and KBC Bank and are due for renewal in 2019. At 30 June 2016 the Group had GBP2.5 million of undrawn funds available on its revolving credit facility.
Based upon current and expected market conditions, the Directors have updated their forecasts of trading and cash flows, which take into account all reasonably foreseeable circumstances, and indicate that the existing banking facilities provide sufficient headroom throughout the period to 31 December 2017. The Directors also believe that there is sufficient headroom on the covenants associated with these facilities for the same period.
Dividends
No interim dividend is being declared for 2016 (2015: 1.0 pence).
Operations
Crestchic Loadbanks and Transformers
The electrical equipment business of Northbridge supplies two main markets; the developed world, where it is mostly focussed on power reliability, and Emerging Markets (EM), where it is mostly focussed on resources.
Total turnover during the period was GBP9.6 million (2015: GBP11.2 million) and gross profit was GBP4.7 million (2015: GBP4.8 million).Underlying this performance was a significant change in revenue mix with sales to the EM region down compared with 2015, compensated by an increase in higher margin rentals in Western Europe.
Overall gross margin of 48.6% was an improvement on 2015 (42.6%), also due to the impact of the change of mix.
The EM operations of Crestchic continued to be affected by the downturn in the oil and gas industry, and sales of manufactured products were affected by a marked slowdown in two of its main markets, South Korea and the USA.
Rental in the UK and Western Europe continues to perform well and there are early signs of further opportunities with our rental operations in the USA.
Tasman Oil Tools
Our operations in Australia, New Zealand and the Middle East have suffered badly in the severe downturn affecting the oil and gas industries worldwide. Virtually all its services are provided to the Exploration and Production (E&P) activities of the major oil companies and the last 18 months have seen very significant cut backs in investment across the world.
Oil companies themselves have concentrated on producing oil rather than developing new fields or further exploration, this in turn adds to the excess supply and depresses the price. We believe we are at or close to the bottom of this particular cycle and we will see some improvements in the future.
Total revenue for Tasman, during the period, was GBP2.2 million (2015: GBP6.7 million), gross profits were GBP0.2 million (2015: GBP3.1 million). Our overhead reduction programme is ongoing and we will continue to cut costs where we can.
In the meantime we will maintain our customer facing skills and our hire fleet and locate it where it is most likely to generate revenue. At the same time we are positioning ourselves for the future by focusing on developing the recently obtained Master Services Agreements (MSA), maintaining our Quality Accreditation Standards (QHSE) and forming partnerships in adjacent geographies.
Outlook
Whilst the immediate outlook is still challenging and we are experiencing further downward pressure on our sales of manufactured product, which tends to be a lagging indicator, there are some signs that we may have reached the bottom of this economic cycle with regard to the oil and gas industry. Some positive statements from the oil services majors and planned drilling campaigns for 2017 give hope that the market will start to turn soon.
We have already seen some modest geothermal drilling revenue from New Zealand and a planned increase in operating rigs in the Middle East. The oil surplus and the over supply problem facing the industry is beginning to be resolved and all the oil companies have now cut costs to the extent that further investment in E&P is worthwhile, despite the low oil price.
Having maintained the size of our hire fleet, expanded its geographical reach, reduced our overhead costs significantly and strengthened our balance sheet, we are in a very good position to take advantage when the opportunity of improved trading condition arises.
Peter Harris
Chairman
29 September 2016
Consolidated statement of comprehensive income
For the six months ended 30 June 2016
Hot Features
Premium
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Revenue 11,847 18,560 34,090
Cost of sales (7,026) (10,477) (19,286)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Gross profit 4,821 8,083 14,804
Operating costs
Excluding exceptional costs (6,607) (8,336) (15,549)
Exceptional costs 2 (649) (1,475) (7,189)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Total operating costs (7,256) (9,811) (22,738)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss from operations (2,435) (1,728) (7,934)
Finance income 3 3 8
Finance costs (315) (331) (655)
Loss before taxation excluding exceptional costs (2,098) (581) (1,392)
Exceptional costs (649) (1,475) (7,189)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss before taxation (2,747) (2,056) (8,581)
Income tax credit 409 120 430
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss for the period attributable to the equity holders of the parent (2,338) (1,936) (8,151)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Other comprehensive income
Exchange differences on translating foreign operations 4,757 (2,737) (1,156)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Other comprehensive income for the period, net of tax 4,757 (2,737) (1,156)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Total comprehensive income for the period attributable to equity
holders of the parent 2,419 (4,673) (9,307)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss per share attributable to the equity holders of the parent 3
- basic (pence) (11.3) (10.5) (44.3)
- diluted (pence) (11.3) (10.4) (44.3)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
All amounts relate to continuing operations.
Consolidated balance sheet
As at 30 June 2016
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ---------- ------------
ASSETS
Non-current assets
Intangible assets 14,141 16,980 12,797
Property, plant and equipment 36,647 36,921 35,556
Deferred tax asset 355 - 316
--------------------------------------- ---------- ---------- ------------
51,143 53,901 48,669
--------------------------------------- ---------- ---------- ------------
Current assets
Inventories 4,158 4,848 4,440
Trade and other receivables 8,082 12,233 9,933
Cash and cash equivalents 4,060 2,356 3,852
--------------------------------------- ---------- ---------- ------------
16,300 19,437 18,225
--------------------------------------- ---------- ---------- ------------
Total assets 67,443 73,338 66,894
--------------------------------------- ---------- ---------- ------------
LIABILITIES
Current liabilities
Trade and other payables 6,452 7,859 6,950
Financial liabilities 3,321 5,017 6,044
Other financial liabilities 1,327 1,867 1,160
Current tax liabilities 85 219 538
--------------------------------------- ---------- ---------- ------------
11,185 14,962 14,692
--------------------------------------- ---------- ---------- ------------
Non-current liabilities
Financial liabilities 9,161 13,572 12,090
Other financial liabilities - 159 928
Deferred tax liabilities 3,483 3,993 3,303
--------------------------------------- ---------- ---------- ------------
12,644 17,724 16,321
--------------------------------------- ---------- ---------- ------------
Total liabilities 23,829 32,686 31,013
--------------------------------------- ---------- ---------- ------------
Total net assets 43,614 40,652 35,881
--------------------------------------- ---------- ---------- ------------
Equity attributable to equity holders
of the parent
Share capital 2,611 1,864 1,864
Share premium 27,786 23,266 23,266
Merger reserve 2,810 2,810 2,810
Treasury share reserve (451) (451) (451)
Foreign exchange reserve 2,440 (3,898) (2,317)
Retained earnings 8,418 17,061 10,709
--------------------------------------- ---------- ---------- ------------
Total equity 43,614 40,652 35,881
--------------------------------------- ---------- ---------- ------------
Consolidated cash flow statement
For the six months ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------------- ----------- ----------- ------------
Cash flows from operating activities
Net loss from ordinary activities
before taxation (2,747) (2,056) (8,581)
Adjustments for:
- amortisation and impairment of
intangible fixed assets 358 831 5,733
- amortisation of capitalised debt
fee 66 146 208
- depreciation of property, plant
and equipment 3,064 2,853 5,881
- profit on disposal of property,
plant and equipment (143) (343) (458)
- non-cash movement in deferred
consideration - 77 (3)
- investment income (3) (3) (8)
- finance costs 315 331 655
- share option expense 48 48 96
----------------------------------------- ----------- ----------- ------------
958 1,884 3,523
----------------------------------------- ----------- ----------- ------------
(Increase)/decrease in inventories (570) (408) 348
Decrease in receivables 2,538 217 2,762
(Decrease)/increase in payables (1,234) 1,597 306
----------------------------------------- ----------- ----------- ------------
Cash generated from operations 1,692 3,290 6,939
Finance costs (315) (331) (655)
Taxation (199) (558) (942)
Hire fleet expenditure (198) (3,322) (4,080)
Sale of assets within hire fleet 371 1,825 2,493
----------------------------------------- ----------- ----------- ------------
Net cash from operating activities 1,351 904 3,755
----------------------------------------- ----------- ----------- ------------
Cash flows from investing activities
Finance income 3 3 8
Payment of deferred consideration (974) (1,025) (941)
Sale of property, plant and equipment 197 99 109
Purchase of property, plant and
equipment (71) (230) (494)
----------------------------------------- ----------- ----------- ------------
Net cash used in investing activities (845) (1,153) (1,320)
----------------------------------------- ----------- ----------- ------------
Cash flows from financing activities
Proceeds from share capital issued 5,267 83 83
Purchase of own shares - (250) (250)
Proceeds from bank and other borrowings - 14,064 12,957
Repayment of bank and other borrowings (3,653) (12,861) (13,957)
Payment of finance lease creditors (520) (915) (1,555)
Dividends paid in the year - (735) (919)
----------------------------------------- ----------- ----------- ------------
Net cash from/(used in) financing
activities 1,094 (614) (3,641)
----------------------------------------- ----------- ----------- ------------
Net increase/(decrease) in cash
and cash equivalents 1,600 (863) (1,206)
Cash and cash equivalents at beginning
of period 2,175 3,427 3,427
Exchange gains/(losses) on cash
and cash equivalents 285 (208) (46)
----------------------------------------- ----------- ----------- ------------
Cash and cash equivalents at end
of period 4,060 2,356 2,175
----------------------------------------- ----------- ----------- ------------
During the period the Group acquired total property, plant and equipment with an aggregate cost of GBP269,000 (2015: GBP3,769,000) of which GBPNil (2015: GBP217,000) was acquired by means of finance lease. This includes GBP198,000 (2015: GBP3,459,000) of hire fleet additions of which GBPNil (2015: GBP137,000) was acquired by means of finance lease.
Notes to the unaudited interim statements
For the six months ended 30 June 2016
1. Basis of preparation
This interim report has been prepared in accordance with the accounting policies disclosed in the full statutory accounts for the year ended 31 December 2015.
These policies are in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board, as endorsed for use in the European Union, that are expected to be applicable for the year ending 31 December 2016.
The Group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing the interim consolidated financial information.
The financial information in this statement relating to the six months ended 30 June 2016 and the six months ended 30 June 2015 has not been audited. The financial information in this statement relating to the six months ended 30 June 2015 has been reviewed pursuant to guidance issued by the Auditing Practices Board.
The financial information for the year ended 31 December 2015 does not constitute the full statutory accounts for that period. The annual report and financial statements for 2015 has been filed with the Registrar of Companies.
The Independent Auditor's Report on the annual report and financial statement for 2015 was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.
The interim report for the period ended 30 June 2016 was approved by the Board of Directors on 29 September 2016.
2. Exceptional costs
The exceptional costs include GBP0.3 million of costs incurred in closing down businesses and GBP0.3 million of redundancy costs relating to continuing entities (2015: GBP0.9 million of costs incurred in closing down businesses and GBP0.2 million of redundancy costs relating to continuing entities, GBP0.1 million of acquisition costs and a GBP0.2 million impairment charge on the intangible assets relating to our loadcell business in Singapore).
3. Earnings per share
The earnings per share figure has been calculated by dividing the loss after taxation, GBP2,338,000 (2015: GBP1,936,000), by the weighted average number of shares in issue, 20,758,801 (2015: 18,384,877).
The diluted earnings per share assumes all share options are exercised at the start of the period or, if later, the date of issue of the share options. This increased the weighted average number of shares in issue by Nil (2015: 303,860). At the end of the period, the Company had in issue 1,407,601 (2015: 440,980) share options which have not been included in the calculation of the diluted earnings per share because their effects are anti-dilutive although these share options could be dilutive in the future.
4. Dividends
No interim dividend (2015: 1.00 pence) will be paid to shareholders.
5. Interim report
Copies of the interim report are being sent to all shareholders and are available to the public from the offices of Northbridge Industrial Services plc at Second Avenue, Centrum 100, Burton on Trent, Staffordshire DE14 2WF. The interim report and the interim announcement will also be available from the Group's website at www.northbridgegroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DVLFLQKFFBBZ
(END) Dow Jones Newswires
September 29, 2016 02:00 ET (06:00 GMT)
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