Northbridge, the industrial services and rental company, is pleased to issue the following pre-close trading update in advance of its interim results announcement for the six months ended 30 June 2019, which is scheduled to be released on 26 September 2019.
Trading in the six months under review continued to show a much improved performance since last year and has been consistent with the Group’s forecasts. As mentioned in the AGM statement on 4 June 2019, the impact of a recovery in revenue results in our operational gearing benefitting cash flow significantly as well as continuing to improve EBITDA.
Recovery in our key end markets including the oil and gas market, supported by stable pricing and a gradual improvement in overall rig counts, is now beginning to have a beneficial impact on both of Northbridge’s businesses, Crestchic Loadbanks (“Crestchic”) and Tasman Oil Tools (“Tasman”). Consequently, the Group is confident that the results for the full year ended 31 December 2019 will be in line with management’s expectations.
Northbridge has two core activities, Crestchic Loadbanks and Tasman Oil Tools. Crestchic is a specialist electrical equipment business which manufactures, sells and rents loadbanks and transformers from its base in Burton on Trent and has depots in France, Germany, Belgium, UAE and Singapore. Crestchic also has 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, Malaysia and the UAE.
Crestchic – Electrical power reliability
The UK and European activities of Crestchic continue to perform well and are largely resilient to market conditions. Over the last few years the data centre sector has proved a strong market for Crestchic in both power and heat load testing, and we are seeing this as an emerging core sector for Crestchic both in Europe and other more developed economies. The US operation, which was started in 2016, has continued to grow and year on year revenues have increased. Our other overseas markets for power projects, principally relating to natural resources and shipyards, have begun to show some signs of renewed activity and this has continued into 2019, as the recovery in the energy market continues. Crestchic started 2019 with its largest ever new year order book for the sale of manufactured equipment.
Tasman – Drilling tool rental
The improvement in sentiment in the oil and gas market experienced during 2018 has continued into the first half of 2019. The rig counts in Tasman’s immediate areas of operation have seen improvements year on year, particularly in Australia, and are set to continue with a renewed focus on gas and LNG exports.
As a result, activity levels in our rental business of Tasman continue to improve. Our focus on quality, service levels, customer relationships and ongoing selective investment, has enabled Tasman to increase its market share in our key operations in Asia Pacific. As a result, year-on-year revenues are showing significant gains in large parts of our core markets, albeit from a low base.
The Group remains confident in the resilience of the recovery in our markets and we expect to make good progress for the rest of 2019 and look forward to a profitable future.