(Alliance News) - Northbridge Industrial Services PLC on Tuesday swung to profit in 2019, but warned that its 2020 performance may be hurt due to issues arising from the Covid-19 outbreak.
The stock was trading 14% higher at 77.00 pence each on Tuesday afternoon in London.
The industrial services and rental firm posted pretax profit of GBP315,000 for 2019, versus a loss of GBP2.7 million in 2018. The improved performance was on the back of an increase in revenue to GBP33.6 million from GBP26.9 million the year prior.
Northbridge Industrial said revenue for electrical equipment unit Crestchic during the period was GBP25.4 million, adding that the Crestchic business saw "good progress" in the US. Revenue for the Tasman Oil Tools rental business amounted to GBP8.2 million.
It added that it's Malaysian joint venture with Olio Resources SDN BHD showed "good progress" as rental revenue increased by GBP2.7 million from GBP2.1 million.
Looking ahead, the Burton on Trent-based company said that while trading in the first quarter of 2020 showed improvement, restrictions arising from the Covid-19 outbreak have led to difficulty in moving equipment across borders and reduced staffing. It added that it therefore expects its performance in the second quarter and third quarter of 2020 to be hurt, but noted that its business may recover in the fourth quarter.
Northbridge said it will implement cash conservation methods such as negotiating reductions in contracted fixed costs, restricting capital expenditure and taking advantage of available government support.
"2019 was a strong year with much positive momentum achieved throughout the group. However, the impact of Covid-19 and its consequences, coming in the midst of our accelerating recovery, comes at an unfortunate time. However, Northbridge is as well set as it can be; it is much leaner now, with a low cost base and a strong balance sheet, manageable bank debt, a full equipment sales order book and a very experienced management team. I have no doubt that we can weather the storm and return to growth once the crisis is over, said Chief Executive Eric Hook.
Net debt as at the end of December was GBP6.4 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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