4 Feb 2016 07:00
4 February 2016
Northbridge Industrial Services Plc
("Northbridge" or the "Group")
Pre- Close Trading Update
Northbridge, the industrial services and rental company, is pleased to issue the following pre-close trading statement in advance of its preliminary results announcement for the year ended 31 December 2015, which is scheduled to be released during the week commencing 11 April 2016.
The Group expects the result for 2015 to be substantially in line with management's expectations but it is too early to predict when any recovery may come to our markets in 2016.
Following the last statement regarding the agreement of revised covenants issued on 17 December 2015, there has been a further fall in the price of oil and turmoil in the commodity markets in general. Though this has continued to affect much of our customer base, following completion of the Group's restructuring and the further cost cutting measures undertaken in the second half of 2015, Northbridge now is a much more slim-lined and focused group and, despite these challenging markets, is now much better placed to take advantage of any upturn when it arrives. Further cost cutting measures have already been actioned which will benefit 2016 if the downturn is prolonged.
Northbridge has now been consolidated down to two main core activities, operating through the main subsidiaries, Crestchic Ltd and Tasman Oil Tools. Crestchic, the specialist electrical equipment business, manufactures and rents loadbanks and transformers from its base in Burton on Trent, with depots in France, Germany, Belgium, Dubai and Singapore and satellite locations in China and the USA.
Tasman Oil Tools rents drilling equipment to the oil, gas and geothermal industries from its sites in Australia, New Zealand and Dubai. All other non-core activities have now been closed and the assets sold and cash released back to the Group.
The slowdown in the oil & gas industry has had a substantial impact on all of Northbridge's businesses serving that market, where there has been an estimated $400 billion cut in capital expenditure since July 2014. The current surplus of oil supply compared with demand, which is caused by an increase in global production and an economic slowdown in the oil importing countries, has negated the immediate need for much further exploration and production drilling. This in turn has led to a decline in the world wide active rig count. The marine fabrication yards working in the offshore energy area have also experienced a slowdown in new orders and conversions together with delays, postponements and cancellation of existing orders.
Against this backdrop, our rental activities relating to the energy sector continue to suffer, and this affects both oil tools and loadbanks. In contrast, the loadbanks and transformers operating out of Europe have had a good year, where the lower cost of fuel oil has increased investment in load testing generators, and transformer rental contracts have been extended leading to a record level of activity for the Group.
Change of name of Nominated Adviser and Broker
The Company also notifies that its Nominated Adviser and Joint Broker has changed its registered name from Westhouse Securities Limited to Stockdale Securities Limited.
For further information
Northbridge Industrial Services plc 01283 531645
Eric Hook, Chief Executive Officer
Stockdale Securities Limited (Nominated Adviser and Broker) 020 7601 6100
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, 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 recorded increased earnings and dividends based on providing a high level of service, responsiveness and flexibility to customers. It has grown by the acquisition of companies in the UK, Dubai, Australia, Belgium 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