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Northbridge narrows losses after oil price recovers
Industrial services and rental company Northbridge Industrial Services narrowed annual losses as revenues picked as a result of higher oil prices and improvements in rental revenues at one of its subsidiaries.
After three very difficult years for the oil and gas industry, group revenues finally climbed higher, up 7.9% to £25.7m in the calendar year, helping cut pre-tax losses by 20% to £4.4m along with the much reduced cost base after cuts made in recent years.
Earnings before interest, tax, depreciation and amortisation were down 5.88% to £3.2m before exceptional costs, of which there were none compared to the £1.4m in the previous year relating to the restructuring actions taken as a result of the oil market downturn.
Northbridge reduced its net debt by 8.42% to £8.7m in 2017 and since the year end has undertaken a successful re-organisation of its debt facilities until 2021, including the issuance of £4m of loan notes supported by Royal Bank of Scotland, which is a substantial existing shareholder. Capital repayments have been reduced, which will increase free cash resources and provide flexibility to invest for growth.
Chief executive Eric Hook said, "After an unprecedented three very difficult years in the oil and gas industry, which have adversely affected both parts of our business, we now believe that a recovery is in sight.
"During 2017 we saw a stabilisation in our oil tool revenues albeit at a very low level, as actions taken by the producer nations have largely eliminated crude oil surpluses.
"The additional cash flow enjoyed by the industry due to higher oil prices; is now enabling a return to investment in exploration and production, which will benefit both Tasman Oil Tools and Crestchic Loadbanks.
"The work we have undertaken to re-organise the group and reduce costs over the last three challenging years will also help us return to profits in the future."
As of Thursday afternoon, shares in Northbridge had lost 2% to 117p, having gained 25% since the start of 2018.