Northbridge Industrial Services
Ticker: NBI Exchange: AIM

Northbridge Industrial Services is a holding company focused on two divisions. Crestchic, the larger division, is a specialist provider of electrical equipment used primarily to commission, test and service within power reliability and power security markets globally. Tasman Oil Tools is a rental specialist of down-hole tools to the oil & gas, geothermal energy and coal bed methane markets

Another encouraging update

NBI has issued a trading update covering the first 5 months of the year. Key points include an excellent y-o-y uplift in Q1 revenues and resilient trading during April and May. Management acted early to reduce costs, while cash flow proved strong. The outlook for H2 appears positive, reflecting a catch-up on delayed orders at Crestchic and contracts at Tasman.

Net debt was broadly unchanged at £6.4m from the year-end, with the improved cash flows invested in a combination of capex and working capital. Trailing EBITDA increased to £7.4m in the year to April, which compares to £7m in the year to December and £5.7m a year earlier.

The strong cash flow has enabled the Group to extend its existing banking arrangement by a further year and the convertible loan agreement was extended to July 2022 on amended terms.

The Group is trading on a trailing EV/EBITDA multiple of 3.7x, which amounts to a significant discount (36.0%) to its peers. The shares currently trade at 35% discount to a book value that is backed by the rental fleet and properties, and which compares to a 41% premium to NAV for its peers. 

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