(Alliance News) - Northbridge Industrial Services PLC said on Thursday a recovery in the oil and gas market is leading to improved trading for the equipment services and rental firm.
Northbridge posted a pretax profit of just GBP22,000 for the six months to June, after a loss of GBP1.5 million the year prior. However, this is the firm's first pretax profit since 2014.
Revenue for the half-year climbed by 33% to GBP16.8 million, with revenue in the drilling tool market improving by 29%.
Chief Executive Eric Hook commented: "Northbridge is starting to see the benefits from the recovery in activity in the oil and gas markets across both our operating divisions of Tasman and Crestchic. Northbridge's operational gearing is also now beginning to have a significant beneficial impact on our cash generation."
Crestchic, Northbridge's electrical equipment unit, posted a 34% rise in revenue to GBP13.1 million, with gross profit rising 37% to GBP6.3 million. Performance was helped by a recovery in higher margin activities.
In the Tasman oil tool rental business - which focuses on Australia, New Zealand, Asia Pacific, and the Middle East - there has been a "sea change" in market conditions. Revenue was up 29% to GBP3.7 million, and earnings before interest, tax, depreciation, and amortisation were positive for the first time in five years.
"There has now been a significant improvement in the group's performance, as our traditional energy markets begin to improve, and this has benefited both Crestchic and Tasman. In addition, the new markets which Crestchic was able to exploit during the downturn, most noticeably in data centres and North America, remain available to us and will also provide additional future growth," added CEO Hook.
"We are confident of trading volumes for the remainder of 2019 and with a much-strengthened balance sheet, a growing cash flow and further organic opportunities to grow the business, we look forward to the future with optimism."
Shares were 0.5% higher on Thursday morning in London at a price of 135.14 pence each.
By George Collard; georgecollard@alliancenews.com
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