TIDMNBI
RNS Number : 8020Z
Northbridge Industrial Services PLC
29 September 2009
29 September 2009
Northbridge Industrial Services Plc.
("The Group" or "Northbridge")
Unaudited Interim Results for the six months ended 30 June 2009
Northbridge Industrial Services plc, the industrial services and rental company
today announces its unaudited interim results for the six month period ended 30
June 2009.
Financial Highlights
* Profit before tax up 8.3% to GBP1.1 million (2008: GBP1.0 million)
* Basic earnings per share up 8.1% to 10.7 pence (2008: 9.9 pence) and diluted
earnings per share of 10.6 pence (2008: 9.7 pence)
* Gross Margin up by 9.9% to 64.0% (2008: 54.1%)
* Group Revenue down 11.2% to GBP6.1million (2008: GBP6.9 million)
* Strong cash position with net operational cash inflow of GBP2.0 million (2008:
GBP0.7 million)
* Successful open offer to shareholders raising GBP1.5 million after costs
* Interim dividend increased by 7.7% to 1.4 pence (2008: 1.3 pence)
Operational Highlights
* Strong growth in higher margin rental revenues, up 38% compared with first half
of 2008.
* Continuing good performance from Northbridge Middle East and RDS
* Significant contract win by Northbridge Middle East
* Acquisition of a controlling interest in Tyne Technical Equipment Rental in
Dubai
* Further investment in the Group's hire fleet of GBP2.9 million (2008 GBP0.74
million), including acquisition of a high pressure/high capacity compressor
rental fleet from Sullair for GBP1.2 million
* Established sales capability in India following encouraging enquiry levels
Eric Hook, Chief Executive Officer, commented:
"We expect the Group to turn in a solid performance for the whole of 2009
despite the economic conditions, and based on enquiries and forward orders we
already expect a strong 2010".
For more information please contact:
+-------------------------------------------------------+--------------------------+
| Northbridge Industrial Services plc | 01283 531 645 |
| Eric Hook, CEO / Ash Mehta, Finance Director | |
| | |
+-------------------------------------------------------+--------------------------+
| Smith & Williamson Corporate Finance Limited | 020 7131 4000 |
| | |
| (Nominated Adviser) | |
| Azhic Basirov / David Jones | |
| | |
+-------------------------------------------------------+--------------------------+
| Arbuthnot Securities Limited (Broker) | 020 7012 2000 |
| Alasdair Younie / Ed Burbidge | |
| | |
+-------------------------------------------------------+--------------------------+
| Buchanan Communications | 020 7466 5000 |
| Charles Ryland / James Strong | |
+-------------------------------------------------------+--------------------------+
Chairman's statement
I am pleased to report a period of further good progress in the Group's trading
for the six months ended 30 June 2009 and strategic objectives being achieved.
Against a background of continued economic uncertainty the Group's businesses
have held up well.
The Group's higher margin rental business is still experiencing good growth and
the proportion of rental in the overall revenue mix is now well over 50%,
leading to a substantial increase in the Group's gross margin. We are reaping
the benefits of our ongoing investment in the Group's hire fleet over previous
years. This level of expansion has continued into 2009 with a further investment
of GBP1.7 million together with the GBP1.2 million acquisition of compressors
which added to our portfolio of products.
Although sales of manufactured units by Crestchic, our largest subsidiary, are
as expected lower than last year's record levels, we are still receiving an
encouraging level of sales enquiries.
Northbridge Middle East ("NME"), which started trading in 2007, continues to
grow rapidly and in April 2009 won a substantial rental contract to provide
generators, transformers and associated equipment to the Jabali Salab zinc mine
in Yemen. This contract will commence fully in January 2010 and is due to
increase to the maximum level during 2010. It includes a minimum service period
which has recently been increased from 12 months to 36 months. In April 2009,
NME also acquired Tyne Technical Equipment Rental Services ("TTERS"), a Dubai
registered company whose principal business is the rental of generators and the
sale of associated services to the infrastructure and oil and gas industries in
the United Arab Emirates.
RDS (Technical) Ltd, ("RDS") which supplies generators and associated equipment
to the oil and gas industry in the Caspian Region, continued to perform well. A
new phase of investment planned to start in 2010 will benefit the Company next
year and beyond.
The Group's cashflow has been very strong in the first half, helped by the
growth in rental activities. Opportunities for further rental growth are
encouraging, particularly overseas, and to help fund this potential the Group
raised additional capital via an open offer of new ordinary shares to existing
shareholders in June 2009 raising GBP1.52 million before costs. During the
period the Group purchased an existing specialist compressor hire fleet from
Sullair at a cost of GBP1.2 million, 90 per cent of which was financed by a five
year hire purchase agreement with Lloyds Banking Group.
Financial results
Northbridge's revenue for the half year was GBP6.1 million (2008: GBP6.9
million) with gross profits of GBP3.9 million (2008: GBP3.7 million). Profit
before taxation was GBP1.1 million (2008: GBP1.0 million). Net assets at 30 June
2009 were GBP11.9 million (2008: GBP8.7 million)
Basic earnings per share increased 8.1% at 10.7 pence (2008: 9.9 pence) and
diluted earnings per share increased to 10.6 pence (2008: 9.7 pence)
Financing and cash flow
During the period cash generated from operations amounted to GBP2.7 million
(2008 GBP0.9 million) and a further GBP1.5 million was raised through the open
offer. GBP2.9 million was invested in the hire fleet and a final payment of
GBP0.9 million was made for the Group's business premises in Dubai. Net gearing
at the end of the period was 24.0% (2008: 29.3%).
Dividends
The Board has declared an increased interim dividend of 1.4 pence (2008: 1.3
pence); an increase of 7.7%, to be paid on 13 November 2009 to shareholders on
the register as at 16 October 2009.
Operations
Crestchic
Crestchic, Northbridge's main subsidiary, saw rental demand continue to grow and
rental revenue increased by 31% compared with last year. This benefited the
rental/sales mix in total Group turnover and resulted in the Group's gross
margins increasing by 9.9% to 64.0%. Crestchic experienced a reduction in the
sale of manufactured units compared with the record level of last year. This was
largely down to the current economic environment which has reduced demand in
some overseas markets, principally South East Asia. The additional production
capacity released by the fall in sales has been utilised by building more units
for the hire fleet from which we expect a long term benefit.
RDS (Technical) Ltd ("RDS")
RDS which provides generators and associated equipment to the oil and gas
industry in the Caspian region continues to trade well. A new phase of
investment is about to start in the region from which RDS is well placed to
benefit. During the period the holding company, which was previously a Jersey
registered company, has been transferred to Dubai under the control of
Northbridge Middle East. At the same time a trading branch of RDS was
established in the Jebel Ali Free Zone.
Northbridge (Middle East) ("NME")
NME now acts as an agent for Crestchic products and since its formation at the
end of 2007 has experienced good growth, with turnover in the first six months
of 2009 increasing significantly. The final payment of GBP0.9 million has been
made on the premises in the Jebel Ali Free zone which is now shared with RDS.
The portfolio of products offered by Northbridge has been enhanced by the
acquisition of a 66.7% shareholding in TTERS for a consideration of GBP170,000
which was satisfied by GBP62,000 in cash and the issue of 80,000 Northbridge
shares at 135 pence per share. TTERS, which is also based in Dubai, rents
generators and associated equipment to the infrastructure and oil and gas
industries in the United Arab Emirates. Northbridge will acquire the remaining
33.3% of the shares for a multiple of net profit in the year to March 2011
subject to a maximum cost of GBP680,000 giving a total maximum consideration of
GBP850,000. Based on an assessment at 30 June 2009, GBP135,000 has been
included as the expected fair value of the contingent consideration. In the year
to December 2008 the unaudited turnover and net profits of TTERS were GBP600,000
and GBP57,000 respectively. As part of the transaction RDS has provided an
intercompany loan of GBP250,000 for further investment in the hire fleet. In
order for the maximum consideration to be payable TTERS will need to generate
pre tax profits of GBP250,000 in the year to March 2011.
In April 2009 the new branch of RDS won a significant contract for the supply of
generators, transformers and associated equipment together with a maintenance
agreement to the Jabali Zinc Project in Yemen, which is controlled by Zincox
Resources plc, an AIM-quoted company. The contract is due to start later this
year and will increase to the maximum capacity in 2010. There is a minimum
service period, at the maximum capacity, of 12 months with a value of US $2.9
million p.a. In September 2009, the contract was extended for a further 24
months.
Rest of the World
As well as having sales agents and salespeople in North America, South America,
Continental Europe and the Far East, the Group has recently employed a sales
representative in India. This follows a number of successful conferences and
exhibitions held in India over the last few months. Based on those events we
believe that India offers interesting opportunities for the Group.
Outlook
Trading has remained stable in all our activities during the first half of 2009
and our enquiry level remains high despite the global economic uncertainty.
Higher margin rental continues to grow and the extra investment made this year
will show early returns in 2010 and beyond. We look forward to reporting further
progress in the Group's activities for the year ending 31 December 2009, and
based on sales enquiries and our order book we already expect a strong 2010.
Peter Harris
Chairman
Northbridge Industrial Services plc
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2009
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | 6 | 6 | Year |
| | Months | Months | to |
| | ended | ended | 31st |
| | 30th | 30th | December |
| | June | June | 2008 |
| | 2009 | 2008 | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | Unaudited | Unaudited | Audited |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | GBP000's | GBP000's | GBP000's |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Revenue | 6,101 | 6,870 | 15,734 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Cost of sales | (2,195) | (3,152) | (7,711) |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Gross profit | 3,906 | 3,718 | 8,023 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Selling and distribution costs | (1,596) | (1,765) | (2,747) |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Administrative expenses | (1,113) | (886) | (2,129) |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Profit from operations | 1,197 | 1,067 | 3,147 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Finance income | - | 17 | 23 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Finance costs | (78) | (50) | (203) |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Profit before income tax | 1,119 | 1,034 | 2,967 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Income tax expense (Note 3) | (313) | (286) | (1,049) |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Profit for the period attributable | 806 | 748 | 1,918 |
| to the equity holders of the parent | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Other comprehensive income: | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Exchange differences on translating | (200) | - | 178 |
| foreign operations | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Other comprehensive income for the | (200) | - | 178 |
| period, net of tax | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Total comprehensive income for the | 606 | 748 | 2,096 |
| period attributable to equity | | | |
| holders of the parent | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Earnings per share (Note 5) | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| - basic (pence) | 10.7 | 9.9 | 25.3 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| - diluted (pence) | 10.6 | 9.7 | 25.0 |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------------+--------------------+--------------------+-------------------+
| Dividend per share | 1.4p | 1.3p | 2.6p |
+-----------------------------------------------+--------------------+--------------------+-------------------+
All revenue and operating profit is derived from continuing operations.
Northbridge Industrial Services plc
Consolidated Balance sheet as at 30th June 2009
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | 30th | 30th | 31st |
| | June | June | December |
| | 2009 | 2008 | 2008 |
| | | | Audited |
| | Unaudited | Unaudited | |
+ +------------------------------------------+--------------------+-------------------+
| | GBP000's | GBP000's | GBP000's |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Assets | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Non-current assets | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Intangible assets | 3,526 | 3,210 | 3,159 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Property plant & equipment | 11,332 | 7,387 | 8,675 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Total non-current assets | 14,858 | 10,597 | 11,834 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Current assets | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Inventories | 1,290 | 1,477 | 1,096 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Trade & other receivables | 3,547 | 4,270 | 4,085 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Cash and cash equivalents | 1,885 | 1,209 | 2,078 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Total current assets | 6,722 | 6,956 | 7,259 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Total assets | 21,580 | 17,553 | 19,093 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Liabilities | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Current liabilities | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Bank overdraft | - | (597) | - |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Trade & other payables | (2,555) | (2,710) | (2,384) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Financial liabilities | (603) | (316) | (1,966) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Other financial liabilities | (1,941) | (810) | (988) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Tax liabilities | (1,135) | (703) | (1,386) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | (6,234) | (5,136) | (6,724) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Non-current liabilities | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Financial liabilities | (2,420) | (2,859) | (1,502) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Long-term provisions | (347) | (212) | (212) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Deferred tax liability | (683) | (604) | (683) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | (3,450) | (3,675) | (2,397) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Total liabilities | (9,684) | (8,811) | (9,121) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Total net assets | 11,896 | 8,742 | 9,972 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Equity attributable to equity | | | |
| holders of the parent | | | |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Share capital | 909 | 763 | 763 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Share premium account | 6,966 | 5,546 | 5,546 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Treasury share reserve | (201) | (59) | (117) |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Foreign exchange reserve | (22) | (17) | 178 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Retained earnings | 4,244 | 2,509 | 3,602 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| Total equity | 11,896 | 8,742 | 9,972 |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+------------------------------------------+------------------------------------------+--------------------+-------------------+
Northbridge Industrial Services plc
Consolidated Statement of Cash Flows
For the six months ended 30 June 2009
+-----------------------------------------+--------------------+--------------------+-------------------+
| | 6 | 6 | Year |
| | Months | Months | to |
| | ended | ended | 31st |
| | 30thJune | 30thJune | December |
| | 2009 | 2008 | 2008 |
| | Unaudited | Unaudited | Audited |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | GBP000's | GBP000's | GBP000's |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Operating activities | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Net profit from ordinary | 1,119 | 1,034 | 2,967 |
| activities before taxation | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Adjustments for: | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Foreign exchange gains | 28 | - | (620) |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Amortisation of intangible | 63 | 58 | 95 |
| fixed assets | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Amortisation of capitalised | 1 | 10 | 92 |
| debt fee | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Depreciation of property | 399 | 374 | 715 |
| plant and equipment | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| (Loss)/profit on disposal of | 10 | - | (54) |
| property plant and equipment | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Finance income | - | (16) | (23) |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Finance costs | 78 | 50 | 203 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Share option expense | 30 | 25 | 45 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | 1,728 | 1,535 | 3,420 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| (Increase)/decrease in | (187) | (341) | 40 |
| inventories | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Decrease/(increase) in | 1,022 | (998) | (424) |
| receivables | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Increase in payables | 90 | 740 | 385 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Cash generated from operations | 2,653 | 936 | 3,421 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Finance costs | (78) | (50) | (203) |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Taxation | (565) | (172) | (173) |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Net cash from operating | 2,010 | 714 | 3,045 |
| activities | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Cash flows from investing | | | |
| activities | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Finance income | - | 16 | 23 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Acquisition of subsidiary | (1,061) | (1,164) | (1,150) |
| undertaking (net of cash | | | |
| acquired) | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Sale of property, plant and | 45 | 39 | 480 |
| equipment | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Purchase of property, plant | (1,947) | (1,592) | (2,925) |
| and equipment (Note 4) | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Net cash used in investing | (2,963) | (2,701) | (3,572) |
| activities | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Cash flows from financing | | | |
| activities | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Proceeds from share capital | 1,459 | - | - |
| issued | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Proceeds from bank borrowings | - | 1,750 | 1,626 |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Repayment of bank borrowings | (41) | (50) | (64) |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Payment of finance lease | (178) | (50) | (196) |
| obligations | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Purchase of own shares | (85) | - | (58) |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Dividends paid to equity | (194) | (153) | (250) |
| shareholders | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | ------- | ------- | ------- |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Net cash flow (used in)/from | 961 | 1,497 | 1,058 |
| financing activities | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Net (decrease)/ increase in | 8 | (490) | 531 |
| cash | | | |
| and cash equivalents | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Cash and cash equivalents at | 2,078 | 1,102 | 1,102 |
| beginning of period | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Exchange differences on cash | (201) | - | 445 |
| and cash equivalents | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
| Cash and cash equivalents at | 1,885 | 612 | 2,078 |
| end of period | | | |
+-----------------------------------------+--------------------+--------------------+-------------------+
Notes to the unaudited interim statements
Northbridge Industrial Services plc
1. Basis of preparation
This half-yearly financial report has been prepared in accordance with the
accounting policies disclosed in the full statutory accounts for the year ended
31 December 2008.
These policies are in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations (collectively
IFRSs) issued by the International Accounting Standards Board as endorsed for
use in the European Union, that are expected to be applicable for the year ended
31 December 2009.
The Group has chosen not to adopt IAS 34 'Interim Financial Statements' in
preparing the interim consolidated financial information.
The comparatives for the full year ended 31 December 2008 are not the Group's
full statutory accounts for that year. A copy of the statutory accounts for that
year has been delivered to the Registrar of Companies. The auditors' report on
those accounts was unqualified, did not include references to any matters to
which the auditors drew attention by way of emphasis without qualifying their
report and did not contain a statement under section 237(2)-(3) of the Companies
Act 1985.
The interim report for the period ended 30 June 2009 was approved by the board
of directors on 29 September 2009.
2. Acquisitions
Tyne Technical Equipment Rental Services
During the period, the Group purchased 66.67% of the interests of TTERS. TTERS
is a Dubai registered company whose principal business is the rental of
generators and the sale of associated services to the infrastructure and the oil
and gas industries in the United Arab Emirates. The total consideration was
GBP170,000, which was satisfied by GBP62,000 in cash and by the issue of 80,000
new ordinary shares at a price of 135 pence per ordinary share. Additionally,
Northbridge will acquire the remaining 33.33% of the shares in the company on 13
April 2011 for a price based on a multiple of net profits in the preceding 12
months, subject to a maximum cost of GBP680,000 (and a total maximum cost of
GBP850,000). At this level of consideration the profit before taxation of TTERS
would be GBP250,000. Based on an assessment at 30 June 2009, GBP135,000 has been
included as the expected fair value of the contingent consideration. The shares
issued to the vendors as consideration are to be held for a minimum period of 24
months.
Details of the fair value of identifiable assets and liabilities acquired,
purchase consideration and goodwill are as follows:
+---------------------------------------------------+--------------+--------------+
| Fair value of assets acquired | GBP'000 | GBP'000 |
+---------------------------------------------------+--------------+--------------+
| | | |
+---------------------------------------------------+--------------+--------------+
| Property, plant and equipment | 297 | |
+---------------------------------------------------+--------------+--------------+
| Current assets | 108 | |
+---------------------------------------------------+--------------+--------------+
| Contract and customer related intangible assets | 124 | |
| (recognised on acquisition) | | |
+---------------------------------------------------+--------------+--------------+
| Other payables | (340) | |
+---------------------------------------------------+--------------+--------------+
| Deferred tax liability | (35) | |
+---------------------------------------------------+--------------+--------------+
| | | 154 |
+---------------------------------------------------+--------------+--------------+
| Consideration paid | | |
+---------------------------------------------------+--------------+--------------+
| | | |
+---------------------------------------------------+--------------+--------------+
| Cash | 62 | |
+---------------------------------------------------+--------------+--------------+
| Shares | 108 | |
+---------------------------------------------------+--------------+--------------+
| Fair value of contingent consideration | 135 | |
+---------------------------------------------------+--------------+--------------+
| Costs of acquisition | 12 | |
+---------------------------------------------------+--------------+--------------+
| | | 317 |
+---------------------------------------------------+--------------+--------------+
| Goodwill | | 163 |
+---------------------------------------------------+--------------+--------------+
The net cash sum expended on the acquisition was as follows:
+------------------------------+------------+------------+---------+--------------+
| | | GBP'000 |
+--------------------------------------------------------+---------+--------------+
| | | |
+--------------------------------------------------------+---------+--------------+
| Cash paid as consideration | | 62 |
+--------------------------------------------------------+---------+--------------+
| Cash paid as acquisition expenses | | 12 |
+--------------------------------------------------------+---------+--------------+
| Less cash acquired on acquisition | | (1) |
+--------------------------------------------------------+---------+--------------+
| Net cash movement | | | | 73 |
+------------------------------+------------+------------+---------+--------------+
The main factors leading to the recognition of goodwill are the presence of
certain intangible assets in the acquired entity, such as trading licenses
required to operate in Dubai, and the assembled work force of the acquired
entity which do not qualify for separate recognition.
It is impractical to determine the IFRS carrying amounts of the assets and
liabilities (other than the contracts and customer lists) of TTERS immediately
prior to acquisition as the business did not prepare accounts under IFRS.
3. Tax on profit on ordinary activities
The anticipated taxation rate on profits is estimated to be approximately 28%.
4. Property, plant and Equipment
During the period the Group acquired property, plant and equipment with an
aggregate cost of GBP3,186,000 (2008: GBP2,402,000) of which GBP1,239,000 (2008:
GBP810,000) was acquired by means of finance leases. Cash payments of
GBP1,947,000 (2008: GBP1,592,000) were made to purchase property, plant and
equipment.
5. Earnings per share
The earnings per share figure has been calculated by dividing the profit after
taxation, GBP806,000, (2008: GBP748,000) by the weighted average number of
shares in issue, 7,527,908 (2008: 7,550,149). The diluted earnings per share
assumes all share options are exercised at the start of the period or, if later,
the date of issue of the share options. At the end of the period, the company
had in issue 469,229 (2008: 40,000) share options which have not been included
in the calculation of the diluted earnings per share because their effects are
anti-dilutive. These share options could be dilutive in the future.
6. Dividends
An interim dividend of 1.4 pence per share (2008: 1.3 pence) will be paid on
13 November 2009 to shareholders on the register as at 16 October 2009. In
accordance with IFRS, no provision for the interim dividend has been made in
these financial statements
7. Interim report
Copies of the interim report are being sent to all shareholders and are
available to the public from the offices of Northbridge Industrial Services plc
at Second Avenue, Centrum 100, Burton-on-Trent, Staffordshire, DE14 2WF. The
interim report and this interim announcement will also be available from the
Group's website at www.northbridgegroup.co.uk .
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUCABUPBGQR
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