TIDMNBI
RNS Number : 8251H
Northbridge Industrial Services PLC
08 December 2020
8 December 2020
Northbridge Industrial Services Plc.
("Northbridge" or the "Company")
Trading and Strategic Update
Impact of Covid-19 continues to reduce
Northbridge, the industrial services and rental company, is
pleased to announce the following positive trading update for the
year to date. Additionally, the range of near- and medium-term
strategic opportunities continues to increase.
Although the pandemic continues to influence the business, its
markets, and customer activity, it is pleasing to see that the
impact on the Group continues to reduce as the year progresses.
Overseas, as expected, international travel restrictions are still
causing some delays to project start dates, but local activity in
China, Australia and New Zealand has returned to normal, and
business in the USA continues to be active. Crestchic rental
activity in Europe, the UK, and the USA is largely back to
pre-covid-19 levels. Factory output was briefly impacted in the
fourth quarter after a small number of employees tested positive or
needed to self-isolate, but Northbridge's contingency plans
contained the outbreaks, which therefore did not have a material
effect on profitability.
Trading update
Following a good and profitable first quarter for the Group, the
second quarter, as previously announced was the most severely
affected by the lockdowns. Northbridge experienced some stability
returning to the markets during the third quarter, and it was
pleasing to see some particularly good progress towards normality
in the fourth quarter to date. This is especially noticeable at
Crestchic, the Group's power reliability business, where routine
testing has been buoyant and two large rental projects, in leisure
and utility power support in Europe and the USA, were undertaken.
Tasman's performance in a market impacted by international travel
restrictions and lower energy prices, was resilient, and trading
will be ahead of 2019. Overall, the Board confidently expects the
Group to be profitable for the year as a whole before exceptional
costs. For the third year in a row we expect to start 2021 with a
record new-year order book for the sale of loadbanks and a backlog
of enquiries for rental projects.
Continued market repositioning of the Group
There is a renewed sense of urgency from national governments to
move quickly to a sustainable Net Zero Carbon by 2050, and this has
been enhanced by plans to "build back greener" following Covid-19
and the increasing global focus and regulation on ESG measures.
Crestchic's reliance on customers from the oil and gas industry
has decreased naturally over the past five years, as growth in its
power reliability markets in advanced economies continues and new
services are added to its portfolio.
The addition of multiple renewable power generation sources to
national grids and other fragmentation issues will lead inevitably
to reliability concerns for commercial users. This is happening at
a time when digitalisation and data capture drive a requirement for
100% power reliability.
Recent expansion in the demand for datacentres has been further
accelerated by increased online working and shopping patterns in
response to the pandemic. Crestchic's electrical engineering design
and technology capabilities have put the Group in a prime position
to increasingly benefit from this rapidly growing demand for
reliability and sustainability in the advanced economies.
Whichever power sources and fuels are used for national grids,
off-grid power installations and back-up power generators in the
future, Crestchic products will be required to test them and, the
more complex the systems, the more crucial the testing becomes to
ensure a reliable and efficient output.
Crestchic already benefits from some new opportunities where
energy storage battery farms are being integrated into the UK grid
and require high voltage load tests. Crestchic is also considering
an expansion of its service offering to include further work with
high voltage systems and batteries. Longer term opportunities are
likely to arise for Crestchic when there is a stronger penetration
of hydrogen fuel cells into back-up power systems in place of the
current reliance on diesel generators.
Tasman's hire fleet is now predominately used to drill for gas
and geothermal fluids rather than oil and, more recently, for
carbon capture projects in its main markets in Australasia. Since
2015, Tasman's revenue has moved away from an 80% dependence on oil
exploration to a similar position in gas and geothermal targeted
projects. Investment in LNG and natural gas, particularly in its
core market of Australia, is set to increase for the immediately
foreseeable future, as it is both a key transitional fuel to
replace high carbon content alternatives, and a prime component for
"blue"-hydrogen (H2) manufacture. Substantial investment is now
being allocated by governments to kick start a move towards a
hydrogen-based economy.
A substantial proportion of the future capital investment of the
Group is now targeted towards increasing revenue in these high
growth markets related to power reliability where there are
longer-term opportunities with higher returns on capital.
For further information
Northbridge Industrial Services plc 01283 531645
Eric Hook, Chief Executive Officer
Iwan Phillips, Finance Director
Shore Capital (Nominated Adviser and Broker)
020 7408 4050
Robert Finlay / Antonio Bossi / Henry Willcocks
Buchanan Communications
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, The
Middle East, Belgium, Germany, France, Australia, New Zealand,
Singapore, China, Brazil and South Korea, Northbridge has a global
customer base. This includes utility companies, renewables, the oil
and gas sector, data centres, shipping, banking, mining,
construction and the public sector. The product range includes
loadbanks, transformers, and drilling 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 also 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.
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