Northbridge Industrial Services

Despite recessionary pressure, international industrial services and rental play Northbridge has remained profitable while investing in its hire fleet ahead of upturn.

Annual numbers to December showed adjusted pre-tax profits maintained at £2.3m, a creditable result given the economic backdrop. Sales came in lower at £12.7m (2008: £15.7m), though the fall reflected reduced manufactured unit sales, with higher margin hire revenues holding reassuringly firm at £7.7m.

Northbridge's resilience arises from its focus on hiring and selling equipment to a non-cyclical customer base including utilities, the public sector and the oil and gas industries. Hence both main subsidiaries, Crestchic and its Dubai-based product distributor Northbridge Middle East (NME), performed as expected last year.

Crestchic, which makes, sells and hires ‘load bank’ equipment used to test and maintain power systems, experienced strong rental demand, due to the increased global reliance on 'power critical' technology within the medical, banking and defence industries.

And whilst earnings at Caspian region-focused RDS, Northbridge’s specialist generator and transformer rental arm, were lower in comparison to a record 2008, it remained profitable and should benefit from expected 2010 upturn, with oil majors said to be ramping up investment levels.

Last year, Northbridge pushed on with its buy-and-build strategy, purchasing a UK-based specialist air compressor fleet for £1.2m and acquiring 66.67%, for £170,000 in cash and shares, of TTERS, which rents out generators to the United Arab Emirates’ oil and gas and infrastructure industries.

Confident enough to have upped its 2009 total dividend from 3.9p to 4.1p, Northbridge now looks nicely positioned for global recovery and its shares, originally recommended by Growth Company Investor at 128.5p in 2006, remain very good value indeed.