Two Industrial Engineering Stocks Under Review: Northbridge Industrial Services And Bodycote PLC

Northbridge Industrial Services Plc (LON:NBI)

The United Kingdom based Industrial Engineering organisation, Northbridge Industrial Services Plc operates as a seller and lender of specialised industrial equipment.

The group has two business divisions; the Tasman Oil Tools & loadcells and the Crestchic Load Banks & Transformers which operates out of five international hubs. The hiring and distribution of oil tools and loadcells are taken care of by its Tasman Oil Tools & Loadcells business segment. The fabrication, hiring and distribution of load banks and transformers operates under entity name Crestchic Load banks Crestchic (Asia-Pacific) Pty Limited. The company has operations outside the United Kingdom, in North America, China, and continental Europe.

The group markets its services in the banking sector, engineering sector, defence sector, energy and utilities sector. The group aims to invest in bigger and better performing fleets and is leveraging various strategic partnerships to accumulate and build value from its specialist industrial engineering business for the purpose of expanding its strong presence around the globe.

NBI-Recent News

The company reported that the tender contracts (five in numbers) originally given to its joint partner Olio Resources had been extended on an improved term relating to repair and inspection services bundled along with rental of oil tools for a further two-year period.

NBI-Business performance for H1 FY19

(Source: Company filings, London Stock Exchange)

The group declared its interim results on 26th September 2019 for the six months period ended on 30th June 2019 in a press release. The revenue of the company soared by 33 per cent to £16.8 million in the first half of the fiscal year 2019 from £12.6 million in the first half of the fiscal year 2018. The rise in revenue of the company can be attributed to the sale of manufactured equipment along with rental proceeds from the company’s fleet. During the first half of the fiscal year 2019, the rental proceeds were about 62 per cent of the total revenue generated; the rental proceeds contributed 67 per cent to the total revenue in the first half of the fiscal year 2018.

The gross profit of the company surged by 50 per cent to £7.5 million in the first half of the fiscal year 2019 from £5.0 million in the first half of the fiscal year 2018.

The group’s EBITDA (Earnings before Interest taxes, Depreciation and Amortisation) soared by 90 per cent to £3.4 million in the first half of the fiscal year 2019 from £1.8 million in the first half of the fiscal year 2018. The company recorded its first Profit before Taxation during the period since 2014, versus Loss before taxation. The company’s profit before taxation was recorded at £22,000 in the first half of the fiscal year 2019 as against a loss of £1,509 million in the first half of the fiscal year 2018.

The company’s cash generation from operating activities surged to £2.6 million during the period as against £1.9 million in the first half of the fiscal year 2018.

NBI-Stock price performance

Daily Chart as on 18-December-19, before the market closed (Source: Thomson Reuters)

On 18th December 2019, while writing at 09:37 AM GMT, NBI shares were clocking a current market price of GBX 121.50 per share. The company’s market capitalisation was at £33.90 million at the time of writing.

On 29th April 2019, the shares of NBI had touched a new peak of GBX 185.00 and reached the lowest price level of GBX 107.50 on 04th January 2019 in the last 52 weeks. The company’s shares were trading at 34.32 per cent lower from the 52-week high price mark and 13.02 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The company’s stock 5-day daily average traded volume was 6,033.20; 30 days daily average traded volume- 17,043.43- and 90-days daily average traded volume – 39,949.10.

The shares of the company have delivered a negative return of 7.60 per cent in the last quarter. The company’s stock was up by 10.45 per cent from the start of the year to date. The company’s stock has given investors 4.71 per cent of a negative return in the last month.Â

Bodycote PLC (LON:BOY)

Incepted in 1923, Industrial Engineering company, Bodycote PLC provide subcontract thermal processing services across the world. The group’s operations span across 180 plus locations with a representative base of more than 5,647 plus professionals across the globe. The company through, its expertise, deliver reliable, cost-effective and high-quality solutions to its clients. The company operates through two main divisions; the Automotive & General Industrial (AGI) business and the Aerospace, Defence & Energy (ADE) business. The company was first quoted on the London Stock Exchange in 1972.

BOY-Trading Update for the four-month period ended October 2019

The group released the trading statement on 20^th November 2019. The company’s revenue improved by 1 per cent to £244.7 million during the period in contrast to the last year, while on a constant currency basis, the revenue was down by 1 per cent. The rise in revenue can be attributed to the growth achieved in both Emerging Markets and Specialist Technologies.

The net debt, excluding lease liabilities, was £4.8 million on 31^st October 2019. The company’s revenue was flat in the 10-month period ended 31^st October 2019. The revenue from the Specialist Technologies’ surged by 6 per cent (5 per cent on Constant Currency) during the period. The revenue from the Emerging Markets’ surged by 14 per cent (12 per cent on Constant Currency) during the period.

On an operational basis, the revenues for the period increased by 6 per cent (up by 3 per cent at constant currency) to £103.4 million at actual rates in ADE, while the ADE revenue also surged by 3 per cent in the 10 months to 31 October 2019. In AGI business, the revenues declined by 3 per cent (down 4 per cent at constant currency) to £141.4 million and for the 10 months to 31 October 2019, decreased by 5 per cent.

In civil aerospace business, the revenue increased ahead of the background market. Total civil aerospace for the period surged by 14 per cent. In Energy business, the revenue decreased by 2 per cent against the same period of the last year, driven by the weakness in the North American onshore revenue. The interim dividend of 6 pence per share was paid on 8th November 2019.

BOY-Stock price performance

Daily Chart as on 18-December-19, before the market closed (Source: Thomson Reuters)

On 18th December 2019, while writing at 10:15 AM GMT, BOY shares were clocking a current market price of GBX 949.00 per share. The company’s market capitalisation was at £1.86 billion at the time of writing. The beta of the stock stood at 1.42, which meant higher volatility in comparison to the benchmark index along with a dividend yield of 2.02 per cent.

On 18^th December 2019, the shares of BOY had touched a new peak of GBX 975.00 and reached the lowest price level of GBX 638.50 on 16th October 2019 in the last 52 weeks. The company’s shares were trading at 2.67 per cent lower from the 52-week high price mark and 48.63 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The company’s stock 5-day daily average traded volume was 559,709.20; 30 days daily average traded volume- 412,485.87 - and 90-days daily average traded volume – 373,565.96. At the time of writing, the shares volume traded today stood at 23,593.

The shares of the company have delivered a positive return of 28.84 per cent in the last quarter. The company’s stock was up by 36.64 per cent from the start of the year to till date. The company’s stock has given investors 17.01 per cent of a positive return in the last month.Â