Northbridge Industrial Services (NBI ) has described the six month period to 30 June 2021 as one of ‘strong recovery’ most notably in Crestchic, the Company’s electrical power reliability division.
The industrial services and rental company reported revenue for the period up by 22% to £19.6m compared to £16m in 1H21, with particular progress across the Crestchic division which saw hire revenue up by 74% to £8.7m compared to £5m in the prior 2020 period.
After entering the year with a record order book for the sales of Crestchic equipment, demand in this area remained strong during the first half of the year and continued into 2H22. Despite production constraints due to the pandemic, sales rose 19% from £6m to £7.1m in 1H22.
The Group said its factory expansion programme remains on schedule and on budget and that the benefits of the expansion are expected to reach sales and the hire fleet from 2H22.
The Company said it started to see activity levels returning on major hire projects, which had fallen off sharply in the second quarter of 2020 as a result of the pandemic. This was most noticeable in Crestchic, initially in the Far East and then more generally on a global scale.
In 1H21, gross margin, which has benefitting both from the overall increase in revenue and the resurgence of higher margin rental revenues, has risen by 27% to £8.8m from £6.9m in 2020 while operating profit has quadrupled from £0.4m in 2020 to £1.6m in 2021, it noted.
The Group said it has also seen strong cash generation during 1H21, with net cash from operating activities increasing to £2.8m compared to £1.2m in 2020. This, together with the refinancing of the convertible loan notes, has led to a significant reduction in Group net debt.
During 1H21, net debt decreased significantly from £6.8m to £4.5m in the six month period.
Northbridge outlined that today’s results have come in ahead of management expectations and that continued positive performance since August 2021 has now given management ‘sufficient visibility’ into 2H21 to further increase expectations of profits for FY21. It added that this factor has also increased its confidence that this momentum will continue into 2022.
Northbridge said it continues to expand its range of products and services, geographic reach and its production capacity to enable it to harvest the benefits on offer. Planning permission has already been received for factory expansion with construction having started early in 2H.
Despite a slower than anticipated recovery within Tasman, the drilling tool rental division, Northbridge said there is ‘emerging evidence’ that deferred exploration and production projects are starting to be rescheduled to begin towards the end of the year and into 2022.
As first announced within its 2020 results on 13 April 2021, Northbridge initiated a process to explore the possible divestment of its loss-making Tasman division. With discussions underway, the Company said it is hopeful that this process is now nearing a conclusion.
Northbridge said a successful conclusion of the disposal process will see it emerge debt free and move forward with a clear strategy, focused on the exciting opportunities for
Crestchic that, it believes, will deliver growth in revenue and profit and superior returns on capital.
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