Northbridge's announcement of the intention to seek a disposal of the drilling tools hire subsidiary, Tasman, should allow the Group to focus entirely on its core market of power reliability testing equipment, served by the Crestchic division. We believe this sector offers greater long-term growth, including supporting renewable power generation and datacentres, and, importantly, greatly reduces exposure to the oil cycle. In this note we examine international opportunities for the business and t
Companies: Northbridge Industrial Services plc
Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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The headline news associated with the pre-close H1 update is that strong trading at Crestchic, plus a positive order book, results in an upgrade to our estimates for FY21. Revenues improved by 22% at Group level to £19.6m (the highest level since H1 2014) and by 44% to £15.8m within Crestchic alone. The latter’s progress was led by sales into the data centre market but was widespread across several sectors. The outlook remains similarly impressive, particularly within Crestchic, and as a result
We have increased our FY21F estimate for adjusted PBT by 19%, from £2.1m to £2.5m and cut our net debt projection from £3.6m to £3.3m following this morning’s interim trading and strategic update. It confirms that the encouraging start to the year has been maintained, with a positive forward pipeline and momentum in the core Crestchic electrical reliability testing division boding well for the second half. Meanwhile, the Group reported it is “actively negotiating with potential buyers” for the T
The trading update from Northbridge ahead of its AGM was positive, with activity levels within the core Crestchic loadbank division markedly higher YoY. Good order visibility into Q3 underlines their confidence in the outlook. The timetable to dispose of Tasman at a sensible price remains intact whilst work is expected to commence on the extension of manufacturing in Burton-on-Trent during Q3, adding 50% to capacity. Although global economic recovery is building nicely, we are not yet changing r
Power reliability and drilling tools specialist Northbridge has confirmed in today’s AGM update that it is “firmly on track to meet management expectations” for FY21F and indicated momentum is likely to continue beyond that, driven by growth in datacentres and renewables and a 50% enlargement of its UK factory. It has also announced a £10m refinancing, including the redemption of its convertible loan notes. Lower interest costs nudge up our FY21F adjusted PBT from £2.0m to £2.1m. Northbridge als
Power reliability and drilling tools specialist Northbridge Industrial Services has signalled a more focused strategy to exploit further growth opportunities in the USA and Europe for its higher return Crestchic electrical testing division and to pursue the potential disposal of the Tasman drilling tools unit. Its FY 2020A results, released this morning, were in line with our expectations for a modest increase in adjusted PBT and fall in net debt. We have introduced estimates for FY2021F, which
Northbridge’s results for FY20 were in line with market expectations, showing both revenues and adj. PBT higher y-o-y despite the impact of the pandemic on trading. Of greater significance was news of a strategic review of the business, with the Board examining the disposal of Tasman, the Group’s oilfield services unit. Crestchic has several opportunities for further growth, and with focused investment we expect it to continue its strong progress. Based on the current valuation, Crestchic on its
The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are fa
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The CEO and founder of NBI, Eric Hook, has decided to retire from his Board position, although he will remain an advisor to the Group. Eric also plans to remain a significant shareholder of the Group. The divisional Directors have overseen the growth and recovery of their divisions for several years, so no material changes on a day-to-day basis are expected as a result. We continue to expect Crestchic to deliver good growth in FY21, with Tasman benefitting from a H2 recovery as deferred contract
Power reliability and drilling tools specialist Northbridge has announced the retirement of CEO and founder Eric Hook, who will step down from the Board at the end of March. He will continue as a strategic advisor to the Board and his expertise will be called upon as required. He plans to remain a significant shareholder in the Company.
The Budget offered a clear picture of the state of the economy. Put simply, the economy will be 3% smaller in three years’ time than it would have been without the impact of the pandemic. However, it is forecast to return to pre-pandemic levels by mid-2022, six months earlier than previously thought. The OBR forecasts that the UK economy will grow by 4.1% in 2021, (lower than the 5.5% outlined in November 2020). It has set its GDP forecasts in 2022, 2023 and 2024 at 7.3%, 1.7% and 1.6%. Positive
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The year-end close trading update from Northbridge IS confirms a second consecutive year of profitability, with estimates increasing in reflection of the strong end to the year. Tasman’s momentum seen in H2 19 and Q1 20 faltered in Q2 20 due to pandemic-related manning issues at rigs, albeit with a degree of recovery emerging in Q4 20. Crestchic performed strongly, particularly within manufacturing, with datacentre testing proving to be a strong market. While Q1 21 has started slowly, owing to t
We have increased our estimate for FY 2020F from break-even to an adj PBT of £0.4m following today’s positive trading update, which also issues an early indication of further encouraging momentum heading into FY 2021F. Although not issuing formal guidance at this point, the Group also highlights improving trends for both divisions, such as a 22% rise in loadbank orders, driven by datacentre demand. On a trailing EV/EBITDA of 5.1x FY 2020F – likely to reflect higher profitability in the current y
Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch
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AFC Energy’s statements and recent integration work with ABB highlight growing interest from customers which bodes well for orders in the months ahead. The forthcoming S-series of products will expand the Group’s portfolio and should deliver much high power densities and improved economics. The deployment of fuel cell technology is increasingly recognised by Governments and industry as a key tool in reducing global greenhouse gas emissions, which we expect will drive momentum for deployment in a
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Structuring the BUY case
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AFC Energy announced that it has entered a hydrogen fuel cell supply and
collaboration agreement with partner, Urban-Air Port Limited (“Urban-Air”), a
leading UK developer of ground infrastructure for the growing demand in
autonomous airborne drones and electric take-off and landing passenger
XPD has reported strong H1 earnings with revenue up c.27% and adjusted PBT up c.74%; results were in line with our estimates. Revenue growth was strong across all three divisions - Freight Forwarding, Warehousing & Logistics and Transport Solutions. XPD benefited from continuing strong shipment and pallet flows in the CEE region, extra UK customs work related to Brexit, a partial turnaround in UK warehousing, and more DKV-linked fuel cards activity. Profit increased in Freight Forwarding and Tra
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Powerhouse’s partner HUI’s funding of long lead time items shows a commitment to the company’s first European project in our view. As with Powerhouse’s own funding of similar items at the initial UK project, this helps to de-risk the timeline and moves the company towards establishing a wider European market.
Companies: Powerhouse Energy Group PLC
Velocys continues to see supportive policies develop with the recent US proposed Sustainable Aviation Fuel tax credit adding to the potential attractiveness of projects in America. The company continues to progress its reference projects at Bayou in Mississippi and has provided technology under licence to Red Rock Biofuels in Oregon. Further policy support can only be helpful in growing opportunities for the company in North America in our view.
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Xpediator has announced a solid set of interim results, with revenue growing strongly across all three divisions, and group Adj PBT up c74% YoY to £3.6m. Xpediator has reaffirmed its FY21E Adj PBT guidance of in excess of £8.5m, with H2 being a seasonally busier period for the company. We update our forecasts to reflect increased expected working capital requirements during the year, leaving all other projections unchanged. Trading on a T+1 EV/EBIT of 10.8x, Xpediator remains at a 32% discount t
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Despite the challenges presented by the pandemic, TP Group Plc delivered strong organic revenue growth of c14% YoY in H1/21A, with Adj EBITDA increasing to £1.7m (H1/20A: £1.4m). Improving visibility leads us to upgrade our revenue forecasts by c4% for FY21E to £66.0m (90%+ of which was covered by the order book at H1/21A). Expanding margins in the Consulting division are expected to be offset by temporary margin pressure on Engineering contracts during FY21E (our £4.2m FY21E EBITDA remains unch
Companies: TP Group Plc
Here we go again
Oil gained a third week as investors focused on the ongoing production shut-ins in the US Gulf of Mexico as more refineries have resumed operations nearly two weeks after Hurricane Ida tore through the region.
Futures in New York posted its longest set of weekly gains since July after ending Friday 2.3% higher. More than a million barrels a day of US offshore crude production remains shut in after Ida swept through the area nearly two weeks ago. Meanwhile, more Louisiana refineries are resumi
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