Northbridge Industrial Services has issued an encouraging trading update that highlights: strength of demand for manufactured loadbanks (Crestchic); maintained factory production; strong liquidity; tight control of costs; continued deliveries/pick-ups within rental; a degree of uncertainly at Tasman regarding medium-term projects.
Although trading had begun to dip by the end of March, overall the momentum built during 2019 continued. Significantly, the volume uplift within Tasman had resulted in that division moving into profitabiliy ahead of our expectations.
The record manufacturing order book at Crestchic, which further improved in recent weeks, is impressive and requiring the factory to work at, or close to, full capacity for the remainder of the year. The factory has remained operational throughout the lockdown period, testimony to the newly introduced working practices and the critical nature of some of the end markets for the loadbanks (including healthcare).
We remain encouraged by the management actions to date, coupled with healthy financial liquidity and the ongoing strong performance of manufacturing. The share price stands at a substantial discount to the NAV and a price-to-book ratio of just 0.6x.
