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

Planning in place for further success

The CEO and founder of NBI, Eric Hook, has decided to retire from his Board position, although he will remain a strategic advisor to the Group. Eric also plans to remain a significant shareholder of the Group. The divisional leaders 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.

The Divisional MDs and the CFO, Iwan Phillips, will report to the new Executive Chairman (previously NED Chairman), Peter Harris. Peter is a highly experienced operator, having previously been a Main Board Director and Divisional MD for the RAC Plc and Chief Executive of Dawson Holdings Plc.

Furthermore, we continue to expect Crestchic to deliver good growth in FY21, with Tasman benefitting from an H2 recovery as deferred contracts come on stream. Although Q1 2021 started slowly for the Group, reflecting Lockdown 3, the Crestchic manufacturing order book is markedly higher y-o-y. The load bank rental order book suggests a stronger Q2 (reflecting standard lead times) and Tasman is also likely to see a stronger H2 bias as deferred LNG/natural gas contracts start and as rigs become fully manned as the vaccination roll-out continues.

We feel that neither the strong operational gearing within the business nor potential for a strong recovery in profitability are yet reflected in the share price. Reassurance for that view comes from an unwarranted 13% discount to net assets.

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