The Opportunity

With a bias towards industrial businesses, we first became aware of Northbridge Industrial Services plc in 2010 and were attracted by their strong margins and oil and gas exposure where it rented out equipment such as load banks and specialist tools.

Why we invested

The business was growing strongly and generated good margins with a high ROCE.

Our Investment Approach

We started purchasing the shares in the summer of 2010 and continued buying them up to November 2013.

What Happened

The 2014-16 oil price crash resulted in brent crude dropping from $115 / barrel to $27 / barrel. Tasman Tools (acquired by Northbridge in 2010) were severely impacted and by the end of 2014 we had sold our entire position at prices up to £5.74/share. By the mid/end of 2016 the shares were just 65p.

In late 2019 / early 2020 we started buying the shares again at prices from 75p, Tasman was put up for sale and in 2022 the company changed their name to ‘Crestchic’ to reflect their load bank business which was growing again and had assets considerably more valuable than identified on the balance sheet.

Outcome & Return

In December 2022 the Board announced that they had agreed terms with Aggreko to sell the entire issued share capital of Crestchic for 401p/share in cash. Our total return (TR) including dividends was 161%, a CAGR of 14.7% over our circa 7 year holding period.