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Northbridge looks East

RESULTS: A busy year for Northbridge positions it well in growing Asia Pacific markets and the shares look attractively valued.
April 8, 2014

Northbridge Industrial Services's (NBI) top strategic objective is to acquire and consolidate niche industrial equipment businesses. So last year marked a major milestone when it snapped up Singapore-based Crestchic Asia Pacific (CAP) for £6.5m. CAP was set up 20 years ago as an independent distributor of Crestchic products. Northbridge already had the other part of the jigsaw, having acquired the UK Crestchic business at the time of the IPO in 2006. So the deal, which Northbridge says it had been "working on for some time", neatly tied up some loose ends.

IC TIP: Buy at 449p

The original UK Crestchic business, which is the world's largest maker and supplier of loadbanks, used to test back-up power systems, sold 26 per cent more units last year, driven by an expansion of the Burton-on-Trent production facility and a pick-up in demand. The rental business in Europe remains subdued, but Northbridge says it directed surplus equipment to the Middle East and Asia Pacific regions, where markets remain buoyant. Northbridge is now well represented globally, but there is still a gap in North America - something chief executive Eric Hook says the company is "looking at".

By WH Ireland's measure, underlying pre-tax profit rose 18 per cent to £6.6m last year, with earnings per share of 32.3p. The broker expects £7.6m and 38.2p this year.

NORTHBRIDGE (NBI)
ORD PRICE:449pMARKET VALUE:£78m
TOUCH:442-455p12-MONTH HIGH:495pLOW: 315p
DIVIDEND YIELD:1.3%PE RATIO:14
NET ASSET VALUE:216p*NET DEBT:32%

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200912.72.2119.14.1
201019.33.6825.84.6
201124.92.8915.15
201230.84.8824.05.425
201337.66.6132.75.9
% change+22+35+36+9

Ex-div: 12 May

Payment: 4 Jun

*Includes intangible assets of £10.7m, or a 62p share