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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Crestchic Plc | LSE:LOAD | 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% | 399.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMNBI
RNS Number : 4480V
Northbridge Industrial Services PLC
18 April 2016
18 April 2016
Northbridge Industrial Services Plc
("Northbridge" or the "Group")
Preliminary Results for the Year Ended 31 December 2015
Northbridge Industrial Services plc, the industrial services and rental company, today announces its preliminary results for the year ended 31 December 2015.
Key points:
-- Group revenue 24.0% lower at GBP34.1 million (2014: GBP44.9 million)
-- Loss before tax of GBP8.6 million (2014: profit of GBP6.3 million) including exceptional costs of GBP7.2 million (2014: GBP0.7 million)
-- Pre-exceptional EBITDA of GBP6.0 million (2014: GBP13.8 million)
-- Basic loss per share of 44.3 pence (2014: earnings per share of 28.8 pence)
-- Net debt reduced to GBP14.3 million (2014: GBP14.7 million; 30 June 2015: GBP16.2 million)
-- Closure of non-core activities which raised around GBP1.5 million cash
-- Reduction of operating expenses actioned in 2015 with full benefit to be seen in 2016
-- Fund raising by Placing and Open Offer announced separately today
Eric Hook, Chief Executive Officer, commenting on the results and outlook said:
"As previously announced the dramatic fall in the price of oil during 2015 was the single biggest event to impact Northbridge's trading performance. Our rental operations in Australia, New Zealand, the Middle East and the Asia Pacific region bore the brunt of the decline in demand for drilling tools and load testing equipment focused towards the oil and gas sector. Rental is the most profitable and cash generative part of Northbridge and with high operational gearing; a decline in this income stream disproportionately affects profit and cash flow.
However, other parts of our business, most notably the rental activities in Europe, which are less dependent on the oil sector performed well, continuing to generate cash. Additionally, funds raised through the proposed Placing and Open offer and the refocused Company will place Northbridge in a position of strength in light of any market recovery.
We have taken the opportunity during 2015 to accelerate the rationalisation of our structure and product offering and have exited non-core businesses and disposed of under utilised assets. We have also streamlined the core businesses to reflect the much lower revenue expected in the near-term. The annualised effect of the cost savings made to date are substantial and, whilst this does not make up for the decline in rental revenue, it will protect our cash flow and put us in a much stronger position when the trading environment improves.
Our debt naturally amortises quickly over the next two years whilst the market stabilises. This will then enable us to resume investing in our business using our own cash flow as demand begins to increase."
Outlook:
The price of crude oil continued to fall from the start of 2016 and reached a nine year low in January. This led to further cut backs in investment from the oil majors and oil services companies. We in turn have instigated further cost savings in order to reduce the impact on Northbridge.
Despite a small rebound during March, the oil price is unlikely to recover materially until supply and demand are back in balance. The market's overwhelming assumption now is that a recovery is unlikely to happen before 2017.
In preparation for a further year of low rental volumes and the consequential effect on our cash flow and profits, the Board has decided not to propose a final dividend for 2015 and will raise further equity via a Placing and Open Offer also announced this morning. The funds raised will be used to strengthen the business going forward, make the deferred consideration payment for Tasman New Zealand when due and support hire fleet development as the need arises. It will have the additional benefit of making bank covenant compliance easier over future periods.
Both the core businesses of Crestchic and Tasman have good sustainable growth opportunities in the future when their markets recover to more normal dynamics. Over the last 12 months we have made very substantial cost savings in our operational overheads but these have been done without compromising our ability to benefit from a future up turn.
This has been the most difficult period in our 10 years of trading and we would like to thank all our staff, both past and present, for their contribution and support.
For further information
Northbridge Industrial Services plc 01283 531645
Eric Hook, Chief Executive Officer
Stockdale Securities Limited (Nominated Adviser and Broker) 020 7601 6100
Robert Finlay / Antonio Bossi / Henry Willcocks
Buchanan 020 7466 5000
Charles Ryland / Stephanie Watson
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. It has grown 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 AND CHIEF EXECUTIVE'S REVIEW
We are pleased to present our review of the Group's trading performance for 2015.
BUSINESS REVIEW
The main background for the Group during 2015 has been the collapse in the crude oil price and its impact on the Group's revenues. From the end of June 2014 up to the 31 December 2015, the price of Brent crude fell from $113.30 per barrel to $37.28 per barrel and since the year end reached a low point of $28.94 per barrel in January 2016. This was mirrored by a reduction of investment by the oil and gas majors, which particularly impacted drilling activities for both exploration and production. In addition it also had a disruptive effect on marine engineering relating to the oil industry and a materially adverse effect on our business.
Outside of Western Europe, much of our business is conducted with customers involved in some way with the oil, gas and extractive industries, usually marine or other power intensive industries, as well as oil tools. Northbridge is fortunate to have other activities mostly operating from Western Europe which have been less impacted by the malaise of the oil industry, as they are more focussed towards power reliability and utilities. Some of these activities have been counter cyclical and have benefitted from the much lower fuel price, with numerous contracts having been extended as well as winning new ones.
We took the opportunity during the year to accelerate the rationalisation and streamlining of the Group to focus exclusively on electrical equipment, principally loadbanks and transformers, as well as oil tools. This strategy, which was implemented during 2014, has now been completed. We now operate through two main divisions, Crestchic loadbanks and transformers (Crestchic) and Tasman Oil Tools (Tasman).
As a result we have now exited all our non-core activities, closed down non performing locations and sold all surplus assets. We have also significantly reduced our overhead costs and our overall head count has been reduced by 40, approximately 15% of the total. Capital investment, which is normally subject to long lead times, has been considerably slowed and no further acquisitions were pursued.
There have obviously been costs associated with this process, particularly due to its accelerated nature and these are shown as exceptional costs in the consolidated statement of comprehensive income. Inevitably, with uncertainty as to when a recovery begins and to its strength, the Board has reviewed the carrying value of the investments in subsidiaries and decided that an impairment of GBP4.9 million to the intangibles, relating to the oil and gas industries, is appropriate. This has mostly affected our operations in Australia and New Zealand.
The impact of these factors on the Group as a whole has resulted in total revenue reducing by 24.0% to GBP34.1 million (2014:GBP44.9 million). Included in this figure, Tasman's revenue was GBP10.5 million (2014: GBP14.7 million), a decline of 28.4%, Crestchic's revenue was GBP22.8 million (2014: GBP28.6 million), a decline of 20.4%. The decline in volumes for both businesses was primarily due to the down turn in oil and gas activity which also had an adverse impact on the revenue mix away from higher margin rental (55.6%) and towards sales (44.4%) (2014: 60.9%:39.1% rental to sales mix). Total rental revenue for the group was GBP19.0 million, down 30.5% (2014: GBP27.3 million) despite a full year's contribution from Tasman in New Zealand.
Overall gross margins of 43.4% were down (2014: 48.4%), the improvement in manufacturing margins being offset by the decline in rental margins, which were due to lower utilisation. Operating expenses at GBP15.5 million (2014: GBP14.2 million) were higher due to a full year's costs from Tasman New Zealand acquired in September 2014 as well as the Crestchic start up in China and the USA.
(MORE TO FOLLOW) Dow Jones Newswires
April 18, 2016 02:00 ET (06:00 GMT)
Pre-exceptional losses for the year were GBP1.4 million (2014: GBP7.0 million profit). Exceptional costs relating to the rationalisation and restructuring programme described above amounted to GBP7.2 million (2014: GBP0.7) including an impairment charge to intangible assets of GBP 4.9 million (GBP4.7 million on on-going business and GBP0.2m relating to entities that have ceased to trade). Pre-exceptional EBITDA was GBP6.0 million down 56.8% (2014: GBP13.8 million) with some of this decline relating to non-core rental businesses exited during the year.
Crestchic Loadbanks and Northbridge Transformers (Crestchic)
Crestchic was also impacted by the oil and gas slowdown, with overall turnover 20.4% lower at GBP22.8 million (2014: GBP28.6 million). However, rental from the European depots, which is more directed towards power reliability and utilities, performed at a record level; despite weakness in the Euro, revenue from this division was up 6.8% to GBP7.7 million (2014: GBP7.2 million). Revenue from Crestchic's Middle and Far Eastern locations was down 58.2% to GBP4.4 million (2014: GBP10.5 million), of which almost all was oil related. Sales of manufactured units were GBP10.3 million (2014: GBP13.4 million).
Overall gross margins were 38.9% compared with 2014 at 39.5%. This was due to a reduction in utilisation affecting the rental margin, compensated for by an increase in the manufacturing margin to 28.0% from 24.3% in 2014, when the sales mix included some packaged transformers following a single large order gained during that year.
Crestchic designs, manufactures, sells and hires loadbank equipment, which is primarily used for the commissioning and maintenance of independent power sources such as diesel generators and gas turbines. The need to test and maintain standby and independent power systems, together with the associated switchgear and controls, has become an increasingly important element within the power critical technology used by the banking, medical, marine and defence industries. This has resulted in continued strong demand for Crestchic's range of equipment and services throughout the world. Additionally, Crestchic continues to benefit from a background of an increasingly unreliable global power infrastructure and an increase in the size and remoteness of certain projects. All our loadbank activities are now branded as "Crestchic" and we are able to promote that service in an integrated way throughout the world.
Northbridge Transformers ("NT"), which offers specialist transformers for rental throughout the world, continued to perform well during 2015. With European demand improving, it is also able to use Crestchic's depots in the Middle East and in Singapore as a conduit for its activities. It won a significant contract in the last quarter of 2015 to provide step down transformers for the COP 21 climate change conference in Paris. Using the transformers in this way enabled organisers to avoid using the less environmentally friendly diesel generators.
Working alongside CME and CAP, NT also provides packaged transformers for large independent power projects ("IPP"), where diesel generators are used to supplement national grids at high voltages in times of power shortage. Substantial investment in this activity over the last few years means we have been able to grow this business from its original base in Belgium to a worldwide audience, leveraging off our other depots throughout the world.
Tasman Oil Tools (Tasman)
Tasman now operates from a single corporate structure, with depots in Australia, Dubai and New Zealand offering a full range of downhole oil tools to the oil, gas and geothermal industries throughout the Middle East, Far East and Australasia. This is predominately a rental business and revenue has suffered as a result of the down turn in drilling activities in the regions it serves. Total turnover was GBP10.5 million, down from GBP14.7 million in 2014. This was despite benefitting from a full year's revenue from the New Zealand business acquired in September 2014.
Gross margin fell to 44.1% from 54.2% in 2014, due to lower utilisation of equipment. In addition, lower rental volumes lead to lower service charges to the customer, which also impact both turnover and gross profits. Pre-exceptional losses were GBP (0.7) million compared to a profit in 2014 of GBP3.7 million. Exceptional costs amounted to GBP1.0 million, mostly related to redundancy and reorganisation costs.
FINANCIAL REVIEW
Revenue and profit before tax
The Group's revenues are derived principally from the rental of its hire fleet and also from the sale of manufactured and new equipment and the split of these revenues between the various reportable segments and activities compared to 2014 is shown in note 2.
As many of the Group's costs are largely of a fixed nature in the short to medium term (with significant movements in the cost base being attributable to acquisitions and divestments) any revenue movement, however small, will be highlighted at the gross profit level. This impact is often referred to as operational gearing. Gross profit for the year decreased to GBP14.8 million from GBP21.7 million, following the reduction of overall revenue. There was also an adverse shift in sales mix away from the higher margin rental revenue.
Net finance costs for the year rose slightly to GBP0.7 million (2014: GBP0.5 million), due to an increase in the level of average net debt across the period following the acquisition of Tasman New Zealand in the second half of 2014.
The Group incurred exceptional items during the year totalling GBP7.2 million (2014: GBP0.7 million). This was due to the costs of exiting non-core businesses, sale of surplus assets, impairment of intangible assets and the cost reduction exercise.
After amortisation charges, losses before tax (pre-exceptional) totalled GBP1.4 million (profit 2014: GBP7.0 million), Total losses before tax totalled GBP8.6 million (2014: profit of GBP6.3 million).
Earnings per share
The basic LPS of 44.3 pence (2014: EPS of 28.8 pence) and diluted LPS of 44.3 pence (2014: EPS of 28.0 pence) have been arrived at in accordance with the calculations contained in note 10.
Balance sheet and debt
Total net assets have decreased by GBP10.5 million during the year to GBP35.9 million primarily due to a pre-exceptional loss of GBP1.4 million, a negative movement on the foreign exchange reserve of GBP1.1 million and exceptional costs of GBP7.2 million (including a total impairment charge of GBP4.9 million). Net assets per share at the year end are 192 pence (2014: 263 pence).
The reorganisation programme led to hire fleet assets with a cost value of GBP5.6 million being disposed of. Hire fleet additions of GBP5.4 million (2014: GBP8.3 million) were concentrated in the first half of the year.
Trade receivables have reduced to GBP8.1 million (2014: GBP11.2 million) impacted by the decrease in revenue during the year. Debtor days have decreased from 91 days to 87 days during the year.
Cash and cash equivalents increased marginally to GBP3.9 million (2014: GBP3.5 million) with the opportunity for good cash generation remaining in the current financial year.
Notwithstanding the trading losses seen during the year, the asset sales and cost reductions have led to net debt decreasing to GBP14.3 million (2014: GBP14.7 million). Net gearing, calculated as net debt divided by total equity, increased from 31.6% to 39.8% due to net asset reduction described previously. A reduction in net debt and gearing is targeted for 2016.
Cash flow
The Group continues to generate cash and cash from operating activities totalled GBP6.9 million (2014: GBP8.6 million) during the year. GBP4.1 million was used to purchase new hire fleet equipment (mainly in the first half of the year) and GBP2.5 million was generated from the sale of surplus assets.
The Group closely monitors cash management and prioritises the repatriation of cash to the UK from its overseas subsidiaries.
During the year the Group changed its main UK bank and the cash flow includes the repayment of the previous facilities and the drawdown of the new facilities. Cash outflow from financing activities totalled GBP3.6 million (2014: inflow of GBP4.2 million).
In December The Group agreed revised covenants with its banks and the first testing took place on 31 March 2016 and were passed.
The Group paid out GBP0.9 million (2014: GBP1.1 million) in dividends to shareholders and GBP0.9m (2014: GBP2.3 million) of deferred consideration.
Income tax expense
The overall income tax credit for the year totalled GBP0.4 million (2014: charge of GBP1.2 million). The Group manages taxes such that it pays the correct amount of tax in each country that it operates, utilising available reliefs and engaging with local tax authorities and advisors as appropriate.
STRATEGY
The Northbridge strategy is to consolidate and build its specialist industrial equipment businesses by:
-- Driving growth organically through investing in the hire fleet, improving quality systems and customer service
-- Using partnerships to increase geographical exposure
When considering further acquisitions, the main criteria will be:
-- Involvement in specialist electrical services or in drilling tools -- Active in the oil and gas or power related industry -- Capable of supplying a worldwide customer base
In achieving this strategy we will be able to capitalise on the market opportunity to become a significant industrial services business serving an international market. The Board reviews this strategy periodically and believes it is still the correct one for the Group.
OUTLOOK
The price of crude oil continued to fall from the start of 2016 and reached a nine year low in January. This led to further cut backs in investment from the oil majors and oil services companies. We in turn have instigated further cost savings in order to reduce the impact on Northbridge.
(MORE TO FOLLOW) Dow Jones Newswires
April 18, 2016 02:00 ET (06:00 GMT)
Despite a small rebound during March, the oil price is unlikely to recover materially until supply and demand are back in balance. The market's overwhelming assumption now is that a recovery is unlikely to happen before 2017.
In preparation for a further year of low rental volumes and the consequential effect on our cash flow and profits, the Board has decided not to propose a final dividend for 2015 and will raise further equity via a Placing and Open Offer also announced this morning. The funds raised will be used to strengthen the business going forward, make the deferred consideration payment for Tasman New Zealand when due and support hire fleet development as the need arises. It will have the additional benefit of making bank covenant compliance easier over future periods.
Both the core businesses of Crestchic and Tasman have good sustainable growth opportunities in the future when their markets recover to more normal dynamics. Over the last 12 months we have made very substantial cost savings in our operational overheads but these have been done without compromising our ability to benefit from a future up turn.
This has been the most difficult period in our 10 years of trading and we would like to thank all our staff, both past and present, for their contribution and support.
Peter Harris Eric Hook Chairman Chief Executive 18 April 2016 18 April 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2015
Hot Features
Premium
2015 2014
Note GBP'000 GBP'000
----------------------------------------------- ----- --------- ---------
Revenue 2 34,090 44,871
Cost of sales (19,286) (23,150)
----------------------------------------------- ----- --------- ---------
Gross profit 14,804 21,721
Operating costs
----------------------------------------------- ----- --------- ---------
Excluding exceptional items (15,549) (14,229)
Exceptional items 3 (7,189) (655)
----------------------------------------------- ----- --------- ---------
Total operating costs (22,378) (14,884)
----------------------------------------------- ----- --------- ---------
(Loss)/profits from operations (7,934) 6,837
Finance income 8 33
Finance costs (655) (570)
----------------------------------------------- ----- --------- ---------
(Loss)/profits before income tax excluding
exceptional items (1,392) 6,955
Exceptional items 3 (7,189) (655)
----------------------------------------------- ----- --------- ---------
(Loss)/profits before income tax (8,581) 6,300
Income tax expense 4 430 (1,228)
----------------------------------------------- ----- --------- ---------
(Loss)/profits for the year attributable
to the equity holders of the parent (8,151) 5,072
Other comprehensive income
Exchange differences on translating foreign
operations (1,156) 472
----------------------------------------------- ----- --------- ---------
Other comprehensive income for the year,
net of tax (1,156) 472
----------------------------------------------- ----- --------- ---------
Total comprehensive income for the year
attributable to equity holders of the parent (9,307) 5,544
----------------------------------------------- ----- --------- ---------
(Loss)/Earnings per share
- basic (pence) 5 (44.3) 28.8
- diluted (pence) 5 (44.3) 28.0
----------------------------------------------- ----- --------- ---------
All amounts relate to continuing operations.
CONSOLIDATED BALANCE SHEET
As at 31 December 2015
2015 2014
------------------ ------------------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- -------- -------- --------
ASSETS
Non-current assets
Intangible assets 12,797 19,618
Property, plant and equipment 35,556 39,113
Deferred tax asset 316 -
----------------------------------- -------- -------- -------- --------
48,669 58,731
----------------------------------- -------- -------- -------- --------
Current assets
Inventories 4,440 4,249
Trade and other receivables 9,933 12,858
Cash and cash equivalents 3,852 4,391
------------------------------------ -------- -------- -------- --------
18,225 21,498
----------------------------------- -------- -------- -------- --------
Total assets 66,894 80,229
------------------------------------ -------- -------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables 6,950 6,510
Financial liabilities 6,044 5,690
Other financial liabilities 1,160 1,021
Current tax liabilities 538 887
------------------------------------ -------- -------- -------- --------
14,692 14,108
----------------------------------- -------- -------- -------- --------
Non-current liabilities
Financial liabilities 12,090 13,372
Other financial liabilities 928 2,244
Deferred tax liabilities 3,303 4,082
------------------------------------ -------- -------- -------- --------
16,321 19,698
----------------------------------- -------- -------- -------- --------
Total liabilities 31,013 33,806
------------------------------------ -------- -------- -------- --------
Total net assets 35,881 46,423
------------------------------------ -------- -------- -------- --------
Capital and reserves attributable
to equity holders of the Company
Share capital 1,864 1,859
Share premium 23,266 23,188
Merger reserve 2,810 2,810
Foreign exchange reserve (2,317) (1,161)
Treasury share reserve (451) (201)
Retained earnings 10,709 19,928
------------------------------------ -------- -------- -------- --------
Total equity 35,881 46,423
------------------------------------ -------- -------- -------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2015
Shares Foreign Treasury
Share to be Share Merger exchange share Retained
capital issued premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- -------- -------- --------- --------- --------- ---------
Changes in equity
Balance at 1
January 2015 1,859 - 23,188 2,810 (1,161) (201) 19,928 46,423
Loss for the
year - - - - - - (8,151) (8,151)
Other comprehensive
income - - - - (1,156) - - (1,156)
--------------------- -------- -------- -------- -------- --------- --------- --------- ---------
Total comprehensive
income for the
year - - - - (1,156) - (8,151) (9,307)
Issue of share
capital 5 - 78 - - - - 83
Purchase of
own shares - - - - - (250) - (250)
Deferred tax
on share options - - - - - - (245) (245)
Share option
expense - - - - - - 96 96
Dividends paid - - - - - - (919) (919)
--------------------- -------- -------- -------- -------- --------- --------- --------- ---------
Balance at 31
(MORE TO FOLLOW) Dow Jones Newswires
April 18, 2016 02:00 ET (06:00 GMT)
December 2015 1,864 - 23,266 2,810 (2,317) (451) 10,709 35,881 --------------------- -------- -------- -------- -------- --------- --------- --------- ---------
For the year ended 31 December 2014
Shares Foreign Treasury
Share to be Share Merger exchange share Retained
capital issued premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- -------- -------- -------- --------- --------- --------- ---------
Changes in equity
Balance at 1
January 2014 1,740 311 19,318 849 (1,633) (201) 17,009 37,393
Profit for the
year - - - - - - 5,072 5,072
Other comprehensive
income - - - - 472 - - 472
--------------------- --------- -------- -------- -------- --------- --------- --------- ---------
Total comprehensive
income for the
year - - - - 472 - 5,072 5,544
Issue of share
capital 119 (311) 4,102 1,961 - - - 5,871
Share issue
costs - - (232) - - - - (232)
Deferred tax
on share options - - - - - - (200) (200)
Purchase of
non-controlling
interest - - - - - - (968) (968)
Share option
expense - - - - - - 96 96
Dividends paid - - - - - - (1,081) (1,081)
--------------------- --------- -------- -------- -------- --------- --------- --------- ---------
Balance at 31
December 2014 1,859 - 23,188 2,810 (1,161) (201) 19,928 46,423
--------------------- --------- -------- -------- -------- --------- --------- --------- ---------
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2015
2015 2014
GBP'000 GBP'000
------------------------------------------------------ --------- ---------
Cash flows from operating activities
Net (loss)/profit from ordinary activities
before taxation (8,581) 6,300
Adjustments for:
- amortisation and impairment of intangible
assets 5,733 895
- amortisation of capitalised debt fee 208 55
- depreciation of property, plant and equipment 5,881 5,451
- profit on disposal of property, plant and
equipment (458) (423)
- non-cash movement in deferred consideration (3) (190)
- investment income (8) (33)
- finance costs 570 570
- share option expense 96 96
------------------------------------------------------- --------- ---------
3,523 12,721
------------------------------------------------------ --------- ---------
Increase in inventories 348 (215)
Decrease/(increase) in receivables 2,796 1,096
(Decrease)/increase in payables 306 (5,016)
------------------------------------------------------- --------- ---------
Cash generated from operations 6,939 8,586
Finance costs (655) (570)
Taxation (942) (1,180)
Hire fleet expenditure (4,080) (5,966)
Sale of assets within hire fleet 2,493 2,154
------------------------------------------------------- --------- ---------
Net cash from operating activities 3,755 3,024
------------------------------------------------------- --------- ---------
Cash flows from investing activities
Finance income 8 33
Acquisition of subsidiary undertaking (net
of cash acquired) - (4,126)
Payment of deferred consideration (941) (2,306)
Purchase of property, plant and equipment (494) (1,052)
Sale of property, plant and equipment 109 112
------------------------------------------------------- --------- ---------
Net cash used in investing activities (1,320) (7,339)
------------------------------------------------------- --------- ---------
Cash flows from financing activities
Proceeds from share capital issued 83 3,721
Proceeds from bank and other borrowings 12,957 4,721
Purchase of own shares (250) -
Repayment of bank borrowings (13,957) (1,962)
Repayment of finance lease creditors (1,555) (1,166)
Dividends paid in the year (919) (1,081)
------------------------------------------------------- --------- ---------
Net (used in)/from financing activities (3,641) 4,233
------------------------------------------------------- --------- ---------
Net (decrease)/increase in cash and cash equivalents (1,206) (82)
Cash and cash equivalents at beginning of period 3,427 3,513
Exchange losses on cash and cash equivalents (46) (4)
------------------------------------------------------- --------- ---------
Cash and cash equivalents at end of period 2,175 3,427
------------------------------------------------------- --------- ---------
During the period the Group acquired property, plant and hire equipment with an aggregate cost of GBP5,365,000 (2014: GBP8,324,000) of which GBP791,000 (2014: GBP1,306,000) was acquired by means of finance leases. This includes GBP4,791,000 (2014: GBP7,029,000) of hire fleet additions of which GBP711,000 (2014: GBP1,063,000) was acquired by means of finance lease.
Cash and cash equivalents includes cash and cash equivalents as disclosed in current assets on the balance sheet and overdraft balances of GBP1,677,000 (2014: GBP964,000) held with financial liabilities.
1. ACCOUNTING POLICIES
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
While the financial information included in the annual financial results announcement has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as endorsed for use in the European Union (IFRSs), this announcement does not contain sufficient information to comply with IFRSs.
The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2015 or 2014, but is derived from those accounts. Statutory accounts for the year ended 31 December 2014 have been delivered to the Registrar of Companies and those for the year ended 31 December 2015 will be delivered following the company's annual general meeting.
The auditors have reported on those accounts; their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports.
Their report for the year end 31 December 2015 and 31 December 2014 did not contain statements under s498 (2) or (3) of the Companies Act 2006.
1.2 BASIS OF CONSOLIDATION
Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the company considers all relevant facts and circumstances, including:
- The size of the company's voting rights relative to both the size and dispersion of other parties who hold voting rights substantive potential voting rights held by the company and by other parties.
- Other contractual arrangements - Historic patterns in voting attendance
The consolidated financial statements present the results of the company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
(MORE TO FOLLOW) Dow Jones Newswires
April 18, 2016 02:00 ET (06:00 GMT)
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.
2. SEGMENT INFORMATION
The Group currently has two main reportable segments:
-- Crestchic loadbanks and transformers - this segment is involved in the manufacture, hire and sale of loadbanks and transformers. It is the largest proportion of the Group's business and generated 67% (2014: 64%) of the Group's revenue. This includes Crestchic, NT, Crestchic France, NME, CME, CAP, NAP and China businesses;
-- Tasman oil tools and loadcells - this segment is involved in the hire and sale of oil tools and loadcells and contributes 31% (2014: 33%) of the Group's revenue. This includes the TOTAU, TOTNZ, TOTAE and NLS businesses.
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer different products and services.
Measurement of operating segment profit or loss, assets and liabilities
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.
The Group evaluates performance on the basis of profit or loss before tax.
Segment assets and liabilities include an aggregation of all assets and liabilities relating to businesses included within each segment. Other adjustments relate to the non-reportable head office along with consolidation adjustments which include goodwill and intangible assets. All inter-segment transactions are at arm's length.
Other
Crestchic Tasman including
loadbanks oil tools Other trading consolidation 2015
and transformers and loadcells Total entities adjustments Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
Revenue from external
customers 22,750 10,534 33,284 806 - 34,090
Finance income - 6 6 - 2 8
Finance expense (194) (32) (226) (8) (421) (655)
Depreciation (3,508) (1,912) (5,420) (76) (385) (5,881)
Amortisation and impairment (154) (81) (235) - (5,263) (5,733)
Profit/(loss) before
tax before exceptional
items 2,075 (702) 1,373 (157) (2,608) (1,392)
Exceptional items (360) (986) (1,346) (850) (4,993) (7,189)
Profit/(loss) before
tax 1,715 (1,688) 27 (1,007) (7,601) (8,581)
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
Balance sheet
Assets 55,223 20,781 76,004 4,333 (13,443) 66,894
Liabilities (24,983) (12,357) (37,340) (4,108) 10,435 (31,013)
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
30,240 8,424 38,664 225 (3,008) 35,881
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
Non-current asset additions
Property, plant and equipment
additions 1,600 3,675 5,275 90 - 5,365
Intangible asset additions - - - - - -
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
The reconciling adjustments between the total segmental loss before tax and the loss before tax of the Group include a trading loss from other trading entities (GBP157,000), amortisation (GBP1,255,000), exceptional costs (GBP5,843,000) and head office expenditure (GBP1,188,000). The reconciling adjustments between the total segmental net assets and the net assets of the Group include the head office net assets, other trading entity net assets and consolidation adjustments.
Other
Crestchic Tasman including
loadbanks oil tools Other trading consolidation 2014
and transformers and loadcells Total entities adjustments Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
Revenue from external
customers 28,578 14,707 43,285 1,586 - 44,871
Finance income 12 21 33 - - 33
Finance expense (232) (32) (264) (8) (298) (570)
Depreciation (3,453) (1,581) (5,034) (311) (106) (5,451)
Amortisation and impairment (29) (207) (236) - (659) (895)
Profit/(loss) before
tax before exceptional
items 5,542 3,658 9,200 (209) (2,036) 6,955
Exceptional items - (99) (99) (71) (485) (655)
Profit/(loss) before
tax 5,542 3,559 9,101 (280) (2,521) 6,300
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
Balance sheet
Assets 56,566 22,560 79,126 5,365 (5,226) 79,265
Liabilities (28,515) (6,919) (35,434) (4,554) 7,146 (32,842)
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
28,051 15,641 43,692 811 1,920 46,423
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
Non-current asset additions
Property, plant and equipment
additions 4,022 3,767 7,789 531 4 8,324
Intangible asset additions - - - - 9,905 9,505
------------------------------ ----------------- -------------- -------- ------------- -------------- --------
The reconciling adjustments between the total segmental profit before tax and the profit before tax of the Group include a pre-exceptional trading loss from other trading entities of (GBP209,000), amortisation (GBP659,000), exceptional costs (GBP556,000) and head office expenditure (GBP1,156,000). The reconciling adjustments between the total segmental net assets and the net assets of the Group include the head office net assets, other trading entity net assets and consolidation adjustments.
External revenue
by location of Non-current assets
sale origination by location
------------------- --------------------
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- -------- --------- ---------
UK 15,341 17,951 11,502 14,879
Australia 4,427 8,902 5,485 8,652
United Arab Emirates 4,726 7,763 11,319 11,112
Azerbaijan 715 1,057 - 564
Singapore 4,831 6,491 5,985 7,808
New Zealand 2,186 1,409 8,833 11,939
Belgium 1,221 794 4,263 3,767
China 110 - 959 -
Other 533 504 7 10
--------------------- --------- -------- --------- ---------
34,090 44,871 48,353 58,731
--------------------- --------- -------- --------- ---------
External revenue External revenue
by type by type
------------------ ------------------
2015 2014 2015 2014
(MORE TO FOLLOW) Dow Jones Newswires
April 18, 2016 02:00 ET (06:00 GMT)
GBP'000 GBP'000 % %
------------------ -------- -------- -------- --------
Hire of equipment 18,970 27,308 55.6 60.9
Sale of product 15,120 17,563 44.4 39.1
------------------ -------- -------- -------- --------
34,090 44,871 100.0 100.0
------------------ -------- -------- -------- --------
3. EXCEPTIONAL COSTS
Exceptional costs incurred during the year were as follows:
2015 2014
GBP'000 GBP'000
Acquisition costs(1) 227 454
Reorganisation costs(2) 1,266 102
Redundancy costs(3) 768 -
Impairment of intangible assets(4) 4,729 99
Banking costs(5) 199 -
Exceptional costs 7,189 655
------------------------------------ -------- --------
(1) The exceptional costs relate to aborted acquisition costs and costs relating to the acquisition of Tasman Oil Tools Limited and Tasman Oil Tools Leasing Limited in 2014 (2014: the acquisition of Tasman Oil Tools Limited and Tasman Oil Tools Leasing Limited).
(2) During the year the Group has conducted a reorganisation of activities and these costs have been disclosed as exceptional. The Group has sold the assets of its compressor hire business in the UK and its generator hire businesses in Dubai and Azerbaijan as well as closing the Vietnamese branch of its Singapore based Loadcell business. (2014: Relocation costs relating to Crestchic (Asia-Pacific) Pte Limited Oilfield Material Management Limited and a loss on disposal of non-core assets).
(3) During the year the Group has suffered redundancy costs relating to on-going subsidiaries that are deemed to be exceptional.
(4) As part of the ongoing review of the Group's Non-current assets, the Board has recognised that the recoverable amount relating to certain Intangible assets are less than their carrying value. A full impairment totalling GBP483,000 has been made against Goodwill and Customer Relationships recognised on the acquisition of Loadcell in 2011, a full impairment of GBP2,642,000 has been made against goodwill recognised on the acquisition of Tasman Australia in 2010 and an impairment of GBP1,604,000 has been made against the goodwill recognised on the acquisition of Tasman New Zealand in 2014 (2014: impairment of goodwill recognised on the acquisition of Loadcell in 2011). The total impairment charge included in note 11 of GBP4,894,000 also includes GBP165,000 of impairment of intangible assets relating to entities that no longer trade and is included within exceptional reorganisation costs.
(5) Debt fees relating to loans superseded by new facilities agreed in May 2015 as well as costs associated with resetting bank covenants have been written off during the year and deemed to be exceptional.
4. INCOME TAX EXPENSE
2015 2014
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Current tax expense 855 1,342
Prior year under/(over) provision of tax (144) 73
----------------------------------------------------- -------- --------
711 1,415
Deferred tax expense resulting from the origination
and reversal of temporary differences (1,141) (187)
----------------------------------------------------- -------- --------
Tax on profit on ordinary activities (430) 1,228
----------------------------------------------------- -------- --------
Factors affecting tax charge for the year
The tax assessed for the year is different to the standard rate of corporation tax in the UK (20.25%). The differences are explained below:
2015 2014
GBP'000 GBP'000
------------------------------------------------------------ -------- --------
Profit on ordinary activities before tax (8,581) 6,300
------------------------------------------------------------ -------- --------
Profit on ordinary activities multiplied by standard
rate of corporation tax in the UK of 20.25% (2014: 21.5%) (1,737) 1,355
Effects of:
- group adjustments not allowable for tax - 19
- income not subject to tax (315) (384)
- expenses not allowable for tax purposes 1,532 265
- difference in tax rates 234 (100)
- prior year under/(over) provision of tax and deferred
tax (144) 73
------------------------------------------------------------ -------- --------
Total tax charge for the year (430) 1,228
------------------------------------------------------------ -------- --------
The standard rate of corporation tax in the UK is now 20% since 1 April 2015. The rate will decrease to 19% from 1 April and 2017 and to 18% from 1 April 2020.
5. EARNINGS PER SHARE
2015 2014
GBP'000 GBP'000
---------------------------------------------- ------- -------
Numerator
(Loss)/earnings used in basic and diluted EPS (8,151) 5,072
---------------------------------------------- ------- -------
2015 2014
Number Number
------------------------------------------------------ ---------- ----------
Denominator
Weighted average number of shares used in basic EPS 18,405,384 17,628,831
Effects of share options - 457,729
------------------------------------------------------ ---------- ----------
Weighted average number of shares used in diluted EPS 18,405,384 18,086,560
------------------------------------------------------ ---------- ----------
At the end of the year, the Company had in issue 1,156,801 (2014: 180,500) share options which have not been included in the calculation of diluted EPS because their effects are anti-dilutive. These share options could be dilutive in the future.
6. DIVIDENDS
2015 2014
GBP'000 GBP'000
----------------------------------------------------------------------- ------- -------
Final dividend of 4.00 pence (2014: 3.90 pence) per ordinary
share proposed and paid during the year relating to the previous
year's results 735 676
Interim dividend of 1.00 pence (2014: 2.20 pence) per ordinary
share paid during the year 184 405
----------------------------------------------------------------------- ------- -------
919 1,081
----------------------------------------------------------------------- ------- -------
The Directors are not proposing a final dividend (2014: 4.00 pence totalling GBP735,000), resulting in dividends for the whole year of 1.00 pence (2014: 6.20 pence) per share.
7. ANNUAL REPORT AND ACCOUNTS
The annual report and accounts will be posted to shareholders shortly
and will be available for members of the public at the Company's registered
office Second Avenue, Centrum 100, Burton on Trent, DE14 2WF, and
on the company's website www.northbridgegroup.co.uk.
8. ANNUAL GENERAL MEETING
The Company's Annual General Meeting is to be held at the offices
of Buchanan Communications, 107 Cheapside, London, EC2V 6DN on 26
May 2016, commencing at 12.00 noon.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAELXFSDKEAF
(END) Dow Jones Newswires
April 18, 2016 02:00 ET (06:00 GMT)
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