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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 May 2019 to May 2024
TIDMNBI
RNS Number : 0616C
Northbridge Industrial Services PLC
27 September 2018
27 September 2018
Northbridge Industrial Services Plc
("Northbridge" or the "Group")
Improved Performance Continues
Unaudited Interim Results for the six months ended 30 June 2018
Northbridge, the industrial services and rental company, today announces its unaudited interim results for the six-month period ended 30 June 2018.
Highlights
-- Group revenue up 4.5% to GBP12.6 million (2017: GBP12.0 million) -- Gross profit increased by 11.5% to GBP5.0 million (2017: GBP4.5 million) -- EBITDA up materially by 24.3% to GBP1.8 million (2017: GBP1.4 million)
-- Significantly increased cash generation from operations of GBP1.9 million (2017: GBP0.6 million)
-- Reduced operating loss of GBP1.2 million (2017: GBP2.0 million) -- Issue of GBP4 million convertible loan notes on 12 April 2018
-- Net debt reduced substantially to GBP6.2 million (GBP9.5 million at 30 June 2017; GBP8.7 million at 31 December 2017)
-- Placing of 2 million shares at 125 pence which raised GBP2.4 million after expenses
-- Final GBP1.1 million paid for deferred consideration on the acquisition of Tasman New Zealand in September 2014
-- Improving conditions in the drilling tool market, with rental revenue up 19% year on year
Commenting on the results and the outlook, Eric Hook, Chief Executive of Northbridge, said:
"We are very pleased to see that improved sentiment in the oil and gas markets has begun to translate into increased activity in our oil tool rental division, Tasman, providing sufficient confidence to invest selectively in our hire fleet for the first time in four years in order to supply contracts won in Malaysia and Australia. Crestchic, our power reliability side of the business, continued to show a resilient performance, with growth being achieved in particular within the rental division.
"Having raised further capital and refinanced our debt during the first six months, we have a strong balance sheet which leaves Northbridge securely positioned. We look forward to a successful second half of the year and remain confident for the long-term prospects for the business."
For further information
Northbridge Industrial Services plc Eric Hook, Chief Executive Officer Iwan Phillips, Finance Director 01283 531645 Stockdale Securities Limited (Nominated Adviser and Broker) Robert Finlay / Antonio Bossi / Henry Willcocks 020 7601 6100 Buchanan Charles Ryland / Stephanie Watson / Catriona Flint 020 7466 5000
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
We are pleased to present our unaudited interim results for the six-month period to 30 June 2018.
As stated in the trading update issued on 2 August 2018, improvement in sentiment in the oil and gas market has continued and begun to be evidenced in increased activity in our rental businesses of Tasman Oil Tools ("Tasman"). As we also commented at the AGM in May, we felt confident enough in the future of Tasman to selectively invest further capital in our hire fleet for the first time in four years. This was specifically to meet new contracts won in Malaysia and Australia, which in turn will benefit the second half of 2018.
The power reliability business of Crestchic Loadbanks ("Crestchic") continued to be resilient, with its European division showing encouraging growth in rental, supported by a successful project in Russia for the World Cup.
Having taken the opportunity to refinance our debt and to raise further equity during the six-month period under review, our gearing has been reduced substantially and our balance sheet considerably strengthened.
The two core activities, Crestchic Loadbanks and Tasman Oil Tools, both have good opportunities to grow their businesses into an ever-growing power reliability market and a recovering oil and gas industry.
Crestchic is a specialist provider of electrical equipment which is used primarily to commission, test and service independent power plants. It has a strong position in the power reliability market, particularly in Western economies. In addition, it also provides loadbanks and transformers for testing large power projects across the globe, typically in shipyards, oil refineries and mines. Crestchic has a manufacturing base in Burton on Trent in the UK, and sells, services and rents its equipment from its depots in the UK, Europe, the Middle East, Singapore, China and the USA.
Tasman Oil Tools is a "down hole" tool rental specialist, which rents equipment to the Oil & Gas and Geothermal industries from its depots in Australia, New Zealand and the Middle East, and through a recently established Joint Venture with Olio Resources in Malaysia.
Financial results
Northbridge's revenue for the half year ended 30 June 2018 totalled GBP12.6 million (2017: GBP12.0 million) with gross profits of GBP5.0 million (2017: GBP4.6 million). Oil tool revenues and gross profit were GBP2.8 million and GBP0.4 million respectively (2017: GBP2.6 million and GBP0.1 million). Group losses before tax were significantly reduced to GBP1.5 million (2017: GBP2.4 million). There were no exceptional charges in the first six-month period of 2018 (2017: Nil).
Net assets at 30 June 2018 were GBP36.2 million (31 December 2017: GBP35.7 million). The basic and diluted loss per share (LPS) was 5.7 pence (2017: 8.9 pence). Net assets per share were GBP1.29 (31 December 2017: GBP1.38) and EBITDA per share increased to 6.3 pence for the period (2017: 5.5 pence).
Financing and cash flow
Cash flow during the period continued to be positive and showed a marked improvement on last year, despite the continued slow market conditions in the period. Cash flow from operating activities was GBP1.9 million (2017: GBP0.6 million).
Capital expenditure on the hire fleet remained unchanged at GBP0.2 million (2017: GBP0.2 million).
Earnings before interest, taxation, depreciation and amortisation (EBITDA) and before exceptional costs in the first six months of 2018 were GBP1.8 million (2017: GBP1.4 million). Depreciation and amortisation in the period totalled GBP3.0 million (2017: GBP3.5 million), of which depreciation alone was GBP2.6 million (2017: GBP3.1 million).
Debt repayments and issue of new equity
During the period, the Group issued a convertible loan note for GBP4.0 million carrying a fixed interest rate of 8%. This, in conjunction with the early renewal of our banking facilities with our senior lender, Royal Bank of Scotland ("RBS"), enabled the group to consolidate future bank funding solely with the RBS Group, fully repaying KBC Bank in the process, and to reduce capital repayments, which in turn, allows for further investment into the recovering market. The loan notes are convertible into ordinary 10p shares in Northbridge at the discretion of the bond holders at a conversion price of 125p.
Additionally, on 20 June 2018 the company announced a placing of a further 2 million shares to raise GBP2.5 million in new equity. Approximately GBP1.05 million of the proceeds from the placing was used to pay the outstanding deferred consideration due to the vendor of the Tasman Oil Tools companies in New Zealand.
The placing of new equity and improved operating cashflow has enabled gearing to be reduced to 17.1% (30 June 2017: 24.5%) and the half year closing cash balances were GBP3.9 million and net debt was GBP6.2m.
Dividends
No interim dividend is being declared for 2018 (2017: Nil).
Operations
Crestchic loadbanks and transformers
The electrical equipment business of Northbridge, manufactures, sells and rents loadbanks and transformers, and supplies two main markets. Firstly, the developed world, where it is focussed on supporting the power reliability and power security markets and increasingly renewables; and secondly, emerging markets (EM), where it is mostly focussed on resources related businesses, typically oil and gas facilities and mines, as well as shipyards,
Total turnover during the period was GBP9.8 million (2017: GBP9.5 million) and gross profit was GBP4.6 million (2017: GBP4.5 million). Underlying this performance was a change in revenue mix, with a recovery in the higher margin rental activity to GBP5.9 million (2017: GBP5.2 million). Sales of manufactured units were down on the previous year at GBP3.9 million (2017: GBP4.3 million) and represents a continuation of the slow demand from EM for Crestchic's products. There is evidence that these markets for our products, which have traditionally been strong, will return to growth over the medium term.
Rental in the UK and Western Europe continued to perform well, and the contract to supply the FIFA World Cup stadiums helped rental revenue during the period. The new venture in the USA continued its progress and is expected to provide a long-term growth opportunity for Crestchic. Relocation of underutilised equipment from the Asia-Pacific region has doubled our fleet size in North America at minimal cost.
The continuing growth in data centres throughout Western Europe has given Northbridge two additional opportunities, firstly, in heat load management, by using loadbanks to simulate the heat from computer servers, and then, secondly, managing and proving the backup power sources. Investments in this type of "big data" facilities is likely to grow for many years to come providing ongoing demand for our equipment.
The more recent growth in renewable power generation in advanced economies is continuing to gather pace and has created new markets for our equipment and services. This also represents another long-term growth opportunity for the company, and we are currently supporting this growth through the further technical development of our products.
Tasman Oil Tools
Our oil tool rental operations in Australia, New Zealand and the Middle East, which suffered heavily during the downturn in the oil market over the last 3 years, have shown signs of recovery. Total revenue in the six months was GBP2.8 million (2017: GBP2.6 million). Rental, on its own during the period was up 19% to GBP2.5 million (2017: GBP2.1 million). Within this, Australia, achieved an increase in revenue of 96.5% to GBP1.2 million (2017: GBP0.6 million) and we have been able to support this growth with further capital expenditure for specific contracts.
During the period, volumes still remained too low in aggregate to make a material difference to our overall profitability, but we are encouraged that these are moving in the right direction. Rental rates remain depressed and are expected to take some time to recover to previous levels. The relative stability in crude oil prices currently being experienced by the industry we believe will, in the longer term, encourage further exploration and production. By maintaining our infrastructure and hire fleet whilst cutting costs, we have put the company in a strong position for when market demand recovers more significantly.
The Joint Venture in Malaysia with our local partner, Olio Resources SDN BHD, started trading well during the six months. Early results are encouraging, and the proportion of revenue generated by our own oil tools is beginning to increase. Further modest capital expenditure will ensure this momentum continues. The JV's revenue for the first 6 months was RM3.9 million (GBP0.7 million) and the after-tax loss consolidated in these accounts was GBP0.1 million.
Outlook
The sentiment in the Oil & Gas industry has continued to improve and this is beginning to translate into increased activity in exploration and production. With a strengthened balance sheet and additional resources, we believe that we have weathered the worst of the down turn and look forward to the future with more optimism. We are now in a position to invest judiciously into growth areas of our business, and the outlook remains in line with expectations.
Peter Harris
Chairman
27 September 2018
Consolidated statement of comprehensive income
For the six months ended 30 June 2018
Hot Features
Premium
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Revenue 12,594 12,046 25,669
Cost of sales (7,589) (7,559) (16,331)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Gross profit 5,005 4,487 9,338
Operating costs (6,087) (6,533) (12,934)
Share of post-tax results of joint ventures (139) - (188)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss from operations (1,221) (2,046) (3,784)
Finance costs (288) (312) (597)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss before taxation (1,509) (2,358) (4,381)
Income tax credit/(charge) 37 50 (245)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss for the period attributable to the equity holders of the parent (1,472) (2,308) (4,626)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Other comprehensive income
Exchange differences on translating foreign operations (473) (539) (1,519)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Other comprehensive income for the period, net of tax (473) (539) (1,519)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Total comprehensive income for the period attributable to equity
holders of the parent (1,945) (2,847) (6,145)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
Loss per share attributable to the equity holders of the parent 2
- basic (pence) (5.7) (8.9) (17.9)
- diluted (pence) (5.7) (8.9) (17.9)
--------------------------------------------------------------------- ------ ----------- ----------- -------------
All amounts relate to continuing operations.
Consolidated balance sheet
As at 30 June 2018
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------------------------- ---------- ---------- ------------
ASSETS
Non-current assets
Intangible assets 12,277 13,757 12,833
Property, plant and equipment 26,903 32,242 29,281
39,180 45,999 42,114
----------------------------------------------------- ---------- ---------- ------------
Current assets
Inventories 4,031 3,758 3,429
Trade and other receivables 8,560 8,798 9,322
Cash and cash equivalents 3,855 1,198 1,903
----------------------------------------------------- ---------- ---------- ------------
16,446 13,754 14,654
----------------------------------------------------- ---------- ---------- ------------
Total assets 55,626 59,753 56,768
----------------------------------------------------- ---------- ---------- ------------
LIABILITIES
Current liabilities
Trade and other payables 6,000 4,927 5,383
Financial liabilities 2,494 2,810 3,617
Other financial liabilities - 1,126 1,053
Current tax liabilities 674 488 1,015
----------------------------------------------------- ---------- ---------- ------------
9,168 9,351 11,068
----------------------------------------------------- ---------- ---------- ------------
Non-current liabilities
Financial liabilities 7,528 7,932 7,013
Deferred tax liabilities 2,765 3,484 3,002
----------------------------------------------------- ---------- ---------- ------------
10,293 11,416 10,015
----------------------------------------------------- ---------- ---------- ------------
Total liabilities 19,461 20,767 21,083
----------------------------------------------------- ---------- ---------- ------------
Total net assets 36,165 38,986 35,685
----------------------------------------------------- ---------- ---------- ------------ Equity attributable to equity holders of the parent Share capital 2,811 2,611 2,611 Share premium 29,974 27,779 27,779 Merger reserve 2,810 2,810 2,810 Treasury share reserve (451) (451) (451) Foreign exchange reserve 2,537 3,990 3,010 Retained earnings (1,516) 2,247 (74) ----------------------------------------------------- ---------- ---------- ------------ Total equity 36,165 38,986 35,685 ----------------------------------------------------- ---------- ---------- ------------
Consolidated cash flow statement
For the six months ended 30 June 2018
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------------------ ----------- ----------- ------------
Cash flows from operating activities
Net loss from ordinary activities before taxation (1,509) (2,358) (4,381)
Adjustments for:
- amortisation and impairment of intangible
fixed assets 354 383 750
- amortisation of capitalised debt fee 78 69 229
- depreciation of property, plant and equipment 2,645 3,093 6,227
- profit on disposal of property, plant and
equipment (343) (121) (255)
- share of post-tax results of joint ventures 139 - 188
- finance costs 288 312 597
- share option expense 30 48 45
------------------------------------------------------ ----------- ----------- ------------
1,682 1,426 3,400
------------------------------------------------------ ----------- ----------- ------------
(Increase)/decrease in inventories (609) (260) 42
Decrease/(increase) in receivables 694 12 (620)
Increase/(decrease) in payables 164 (566) (204)
------------------------------------------------------ ----------- ----------- ------------
Cash generated from operations 1,931 612 2,618
Finance costs (288) (312) (597)
Taxation (460) (251) (309)
Hire fleet expenditure (236) (180) (542)
Sale of assets within hire fleet 443 175 350
------------------------------------------------------ ----------- ----------- ------------
Net cash from operating activities 1,390 44 1,520
------------------------------------------------------ ----------- ----------- ------------
Cash flows from investing activities
Investment in joint ventures - - (183)
Increase in receivables from joint ventures (62) - (123)
Payment of deferred consideration (1,053) - -
Sale of property, plant and equipment 5 2 70
Purchase of property, plant and equipment (32) (26) (123)
------------------------------------------------------ ----------- ----------- ------------
Net cash used in investing activities (1,142) (24) (359)
------------------------------------------------------ ----------- ----------- ------------
Cash flows from financing activities
Proceeds from share capital issued 2,395 - -
Proceeds from bank and other borrowings 8,739 599 820
Repayment of bank and other borrowings (8,547) (1,089) (2,154)
Payment of finance lease creditors (149) (472) (780)
Net cash from/(used in) financing activities 2,438 (962) (2,114)
------------------------------------------------------ ----------- ----------- ------------
Net increase/(decrease) in cash and cash equivalents 2,686 (942) (953)
Cash and cash equivalents at beginning of
period 1,173 2,146 2,146
Exchange losses on cash and cash equivalents (4) (6) (20)
------------------------------------------------------ ----------- ----------- ------------
Cash and cash equivalents at end of period 3,855 1,198 1,173
------------------------------------------------------ ----------- ----------- ------------
Notes to the unaudited interim statements
For the six months ended 30 June 2018
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 2017.
These policies are in accordance with International Financial Reporting Standards and 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 2018.
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 2018 and the six months ended 30 June 2017 has not been audited.
The financial information for the year ended 31 December 2017 does not constitute the full statutory accounts for that period. The annual report and financial statements for 2017 has been filed with the Registrar of Companies.
The Independent Auditor's Report on the annual report and financial statement for 2017 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 2018 was approved by the Board of Directors on 27 September 2018.
2. Earnings per share
The earnings per share figure has been calculated by dividing the loss after taxation, GBP1,472,000 (2017: GBP2,308,000), by the weighted average number of shares in issue, 25,999,050 (2017: 25,899,602).
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 had no effect on the weighted average number of shares in issue (2017: nil). At the end of the period, the Company had in issue 1,819,451 (2017: 1,594,451) 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.
3. Dividends
No interim dividend (2017: nil) will be paid to shareholders.
4. 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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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September 27, 2018 02:00 ET (06:00 GMT)
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