Northbridge Industrial S... Share Discussion Threads

[saadia110] 26/4/2022 16:30

Why the big drop today,?

[owenski] 22/4/2022 10:04

NBI @ 7.15

[x54v] 22/4/2022 09:49

Excellent Capital Markets Event. It gives you a real sense of the growth potential here. Well worth a watch.

[x54v] 21/4/2022 14:15

Breaking out after a wide consolidation.

Can move pretty quickly once it gets going as the rapid move up from August last year shows.

[x54v] 21/4/2022 09:37

Good to see Harwood as keen buyers at the current price.

Clearly they see price going a lot higher from here.

[robertspc1] 21/4/2022 08:51

Harwood topping up, should mop up any further profit taking

[x54v] 20/4/2022 19:37

Volume rising strongly in March and April.



Another swing up on the cards perhaps.

[gleach23] 18/4/2022 13:07

Yes, thanks for highlighting NC. It's been a few trading days since the tip and it's publicly available now so here it is in full.

"A key indicator of a company’s ability to create shareholder value is how its return on investment (ROI) compares with its cost of capital. The trick is to identify companies that are growing organically, and cover the blended cost of debt and equity to deliver an excess return.

A good example is Northbridge Industrial Services (NBI:176p). Having sold off its non-core Tasman tools drilling operations, the group is focused on Burton upon Trent-based Crestchic, a fast-growing business that manufactures, sells and rents load banks and transformers to domestic and international customers for the commissioning, testing and maintenance of independent, off-grid power sources.

The accelerating transition from fossil-based energy sources towards cleaner renewable energy (12 per cent of sales) is leading to a proliferation of smaller energy generators whose sites require commissioning and connection into distribution networks. This is driving higher demand for testing both the primary and backup generators to ensure the resilience of supply. Northbridge is a major beneficiary.

The group is also expanding its geographic penetration and range of products and services supplied to the rapidly growing data centres market (30 per cent of sales). Crestchic’s rental revenue surged a third in 2021, and it plans to invest £4mn in its hire fleet this year.


Crestchic buoyant demand drives upgrades

Annual revenue up 20 per cent to £29.5mn
Underlying pre-tax profit surges eightfold to £3.3mn (10 per cent beat)
Analysts at Equity Development upgrade 2022 and 2023 EPS estimate by 12 and 11 per cent to 12.4p and 13.8p, up from 9.3p in 2021
Annual dividend of 1p a share expected to double in 2022
Cash from disposal of Tasman Drilling to be recycled into new hire rental fleet and factory expansion
Such is demand for Crestchic’s load banks that the group started the year with a record order book of £8mn and is scaling up manufacturing capacity by 60 per cent. The 25,000 sq ft expansion of its Burton-on-Trent facility completes in June and means that current lead times of 22 weeks could be halved by the year-end.

The benefit of longer than average lead times is that management can factor in higher input costs in the prices charged to customers in a tight market. The inflationary backdrop is working in the group’s favour, too, given that Crestchic has a £6mn hire fleet that cost £30mn (and is insured for £40mn). Disposals of hire fleet equipment is regularly at double book value, or more.

So, with revenue from higher margin hire rentals surging to account for £15.5mn of annual revenue of £29.5mn, gross margin improved from 44.9 to 47.2 per cent which, on a relatively fixed cost base, resulted in underlying operating profit soaring from £1.8mn to £3.8mn. That equates to an 18 per cent ROI, well above Northbridge’s 12.5 per cent cost of capital. It doesn’t take a genius to work out the returns to be made by recycling £4.5mn disposal proceeds from Tasman into additional hire fleet capacity and the £2.2mn manufacturing facility expansion.

During our results call, chairman Peter Harris also highlighted the group’s expansion plans. For instance, Crestchic has signed a lease on a new rental depot in Texas and has a supply agreement in place with a US manufacturer, Mosebach, for the purchase of a fleet of smaller load banks targeted specifically at data centre testing. Importantly, demand for the sale of equipment into the USA remains robust, thus offering additional growth opportunities as manufacturing supply constraints from the UK ease with the factory expansion.

The shares are up 40 per cent since I initiated coverage ('Alpha Report: A high-growth play on the battery storage boom’, 7 September 2021), and have outperformed the FTSE Aim All-Share index by 18 per cent since my last article (‘High-growth play on decarbonisation, battery storage and data centres’, 1 0ctober 2021). I expect the outperformance to continue, so much so that I am lifting my target from 200p to 220p which equates to a 2023 price/earnings (PE) ratio of 16. Buy."

[zho] 12/4/2022 18:45

Thanks for that NC. It's a good article, which finishes:

"I expect the outperformance to continue, so much so that I am lifting my target from 200p to 220p which equates to a 2023 price/earnings (PE) ratio of 16. Buy."

[norbert colon] 12/4/2022 17:58

Tipped by Simon T in the IC who raises his TP from 200p to 220p

[brummy_git] 12/4/2022 09:34

Crestchic is in the right place, offering the right services/products at the right time.

www.linkedin.com/posts/paul-hill-a5994116_qa-with-northbridge-industrial-exec-chairman-activity-6919562483883982848-JlB-?utm_source=linkedin_share&utm_medium=member_desktop_web

or

www.voxmarkets.co.uk/articles/q-a-with-northbridge-industrial-exec-chairman-peter-harris-cfo-iwan-phillips-d1ad011

[robertspc1] 12/4/2022 08:28

2021 was transformational as we know. New factory on time and budget and Q1 trading ahead of expectations. With everything going on in the world that is fantastic news

[edmonda] 12/4/2022 07:42

Agreed, as they say: 'successful on all fronts' with highest profit level since FY14 and ’22 has begun well. Equity Development raises forecasts and fair value to 200p/share.
Read / hear the new note here:

[brummy_git] 12/4/2022 07:14

Electrifying 2021 results & outlook for power reliability specialist Crestchic_UK
driven by L/T secular tailwinds.

Find out here all the news, together with NBI's forecasts, valuation & sector multiples/KPIs.

Plenty to look forward to.

www.linkedin.com/posts/paul-hill-a5994116_crestchic-forecasts-valuations-sector-activity-6919526449666228224-JasQ?utm_source=linkedin_share&utm_medium=member_desktop_web

[bookbroker] 08/4/2022 07:36

I hope you are correct!

[jacktrublu] 08/4/2022 04:18

Early bird catches the worm.

[bookbroker] 08/4/2022 03:50

Ur up early!

[jacktrublu] 08/4/2022 03:44

Takeover will clear the air, and prosper.

[gleach23] 07/4/2022 22:10

NBI results in 5 days? ie 12th April

[napoleon 14th] 07/4/2022 13:09

Soon to be Crestchic, NBI results in 60 days per Sharepad.

The 24.19p hoped for in 2010 would be useful in 2022!...

[bookbroker] 30/3/2022 15:27

Getting annoying this selling, maybe there are a few issues with inflationary effect on material prices. Despite trading statements being strong it needs to keep going, half year results will shed more light on the outlook.

[robertspc1] 28/3/2022 17:28

Short term indigestion as some shareholders take profits. Can't blame them given all the macro headwinds etc. But the core business is superbly positioned in growth sectors and has big operational gearing so I'm happy holding on as expect takeover in due course

[bookbroker] 28/3/2022 16:32

Very disappointing, results cannot come quick enough to provide an update, I just wonder if the price reflects some lost opportunity or a weakening in the global economy as a result of China covid/Ukraine, etc. Consolation is that markets they are in continue to be more essential sectors. See a data centre business has failed, Sunguard, but that is unlikely a reflection of anything more serious in that sector.

[bookbroker] 28/3/2022 16:26

What an absolutely 💩 performance today, I thought this was going to break out, now I realise it has stalled, several attempts to go up and each time been knocked back by untidy selling.