American opportunities offer long-term growth potential
Stoke-on-Trent industrial services and rental company, Northbridge has forecast that full year results are expected to be in line with expectations.
The company said in a pre-close trading statement that recent trading had been consistent with the group’s predictions.
Northbridge has two core activities, Crestchic Loadbanks and Tasman Oil Tools.
Crestchic is a specialist electrical equipment business which manufactures and rents loadbanks and transformers from its base in Burton upon Trent. It has depots in France, Germany, Belgium, UAE and Singapore. It also has satellite locations in China and the United States.
Tasman Oil Tools rents drilling equipment to the oil, gas and geothermal industries from its sites in Australia, New Zealand and the UAE.
It has also recently entered a joint venture in Malaysia with Olio Resources to offer similar services throughout the South East Asia region. Olio already holds a number of contracts for the provision of drilling tools to the oil majors in the region and the JV will have access to Tasman’s existing hire fleet.
The operation is expected to begin benefiting Northbridge during 2018 as the industry begins to recover in the local market.
It said that within Crestchic, the power reliability side of its European, UK and USA activities had continued to grow and was being supported by growth of new markets.
“We are beginning to access new rental and sales markets in the USA which are expected to provide a long-term growth opportunity for Crestchic,” said the statement.
“In addition, the growth of renewable power generation in advanced economies is opening a new market opportunity. It has already provided profitable opportunities and is expected to continue to do so in the years to come.”
Some of the group’s other overseas markets, particularly in the oilfields and shipyards which use its loadbanks and transformers, continued to experience lower levels of activity in power projects during 2017. However, the company said it expected these markets would begin to recover in the medium term.
Also giving rise to optimism, it said sentiment in the oil and gas markets had maintained its gradual improvement since the end of 2016 and the price of crude oil had now risen nearer to 2014 levels.
“Though the pace of recovery in the drilling industry still remains cautious, confidence in stable commodity prices and improving cash flow within the industry is likely to enable the oil majors and the Exploration and Production companies to increase capital spending during 2018,” it added.
The group said it had also continued to see modest improvement in its oil tool rental revenues, although this was set against record lows in 2016.
The group will issue its preliminary results for the year ended December 31, 2017, during the week commencing April 9, 2018.
“Recent trading has been consistent with the group’s forecasts and, consequently, the group expects the results for the full year ended December 31, 2017 to be in line with management’s expectations,” it said.
