Oil deal is providing cause for optimism at equipment specialist

The pace of the recovery in the oil and gas industry is expected to be slow, despite the improvements following the agreement between OPEC and other producer countries to reduce surpluses.

Northbridge Industrial Services, which hires and sells specialist industrial equipment, will tell its shareholders at its AGM this afternoon that it “is seeing a modest upturn in the investment plans amongst our customer base leading into 2018”.

It credits the OPEC agreement, which began on January 1 for an initial six months and has now been extended for an additional nine months.

The Burton-upon-Trent-based business believes its strong balance sheet and “substantial portfolio of rental assets” mean it is well-placed when the recovery strengthens.

It said: “We have substantially reduced our overhead costs and streamlined the core business and, while short term trading visibility remains challenging, our performance will be highly sensitive to modest improvements in revenue.

“Whilst we believe this will be unlikely before the last quarter of 2017, we remain optimistic that Northbridge will benefit from this strengthened position when market conditions begin to improve.”