Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Northbridge Industrial Services – cracking news of contract win

The AIM quoted industrial services and rental company announced that its wholly owned Middle East subsidiary has been awarded a rental contract to supply generators, transformers and associated equipment together with a maintenance agreement to the Jabali Zinc Project in Yemen. The good news never stops with this one!

The contract which is due to start in September 2009 has a minimum service period of 12 months and a minimum value of US $2.9 m. The customer and main contractor is the Jabal Salab Company (Yemen) Ltd whose majority shareholder is AIM quoted Zincox Resources Plc, a business Investor’s Champion issued a commentary on back in July 2008. Zincox was also the beneficiary of good news today having signed feed agreements for the supply of zinc bearing waste dust with the nine largest electric arc furnace operators in.

Having only setup in their new premises in the region in June 2008 this appears a highly encouraging contract win for Northbridge, a business with full year revenues of £15.7m in 2008. The group continues to perform admirably and if the good news continues they should surely start to benefit from increased interest.

Consensus estimates for 2009 are for earnings per share of 22.5p and dividend per share of 4.25p. At the current share price of 148p this leaves the shares trading at 6.5x current year estimates and yielding just under 3%. Following on from today’s announcement estimates are surely likely to be upgraded.


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