Industrial services group Northbridge proposes 10% dividend rise after strong year

STAFFORDSHIRE industrial services and rentals company Northbridge has recommended a 10% increase in final year dividend after seeing group revenue rise by almost a quarter.

The firm, which hires and sells specialist industrial equipment to a non-cyclical customer base, said that for the year ended December 2012 consolidated group revenue rose 24% to £30.8m (2011: £24.9m). Operating cash flow was up 76% to £8.4m (2011: £4.8m).

It has recommended the dividend increase to 3.575p, raising the total dividend for the year to 5.425p (2011: 5.0p, an overall increase of 8.5%.

It said the performance had been helped by a strong second half, although the year as a whole had seen a large increase in costs due to hire fleet expenditure increasing to £7.8m (2011: £2.4m). The rise was mainly due to expenditure on oil tools and transformers.

Eric Hook, Chief Executive Officer, said: “We are pleased with the performance achieved and the group’s continued progress during 2012 at a time when the economies in certain geographies has continued to prove challenging.”

He said that during the year there had been a number of step changes to the business, including new UK premises.

“Having started 2013 with good levels of continuing rental projects and demand for our manufactured products we expect continued growth this year. We continue to be confident in the group’s prospects and remain committed to the group’s stated strategy and objectives,” he added.

He said the first quarter of 2013 had started well with a number of large contracts continuing from last year and new contracts were set to begin in the first half of 2013.

“There are signs of recovery and improvement in most of our markets and the shortfall of larger rental projects in power testing and commissioning has already eased. Delays in projected start dates of certain contracts are still being experienced, but with an increased fleet size we are better able to manage utilisation. Further hire fleet investment is planned for this year and our increased production capacity and additional marketing activity will lead to continued growth,” he added.
“As a sign of the board’s confidence in the group’s prospects, an increase in the final dividend for 2012 of 10% has been proposed.”