Northbridge Industrial (NBI:AIM) is bracing for a tough year as supply chain deflation feeds through the oil and gas sector.

Oil tools businesses acquired in the last two years, which now account for 30% of revenues, will bear the brunt of weaker prices and oil industry consolidation, chief executive Eric Hook says.

The remainder of the business may also be hit as Hook admits the final industrial application of its loadbanks and transformers is not well known.

NORTHBRIDGE INDLSVS1 - Comparison Line Chart (Rebased to first)

Speaking to Shares after Northbridge’s analyst call, Hook said the main talking point was the lack of earnings visibility.

‘It looks similar to 2009, where decisions were being slowed down by customers and we received little notice of what was happening ,’ says Hook.

First half profit will be lower than in the same period last year, Hook says, even with the benefit of its 23 September £12 million acquisition of New Zealand-based Tasman Oil Tools, which made around £1.8 million last calendar year.

First half adjusted profit before tax last year was £3.3 million and second half profitability for the year just reported was also £3.3 million, some 7% ahead of the same period in 2013.

Northbridge shares trade 15.6% lower at 403p.

Issue Date: 14 Apr 2015