Northbridge Industrial Services demonstrated fast growth in recent years. Will the growth continue?
21 Apr 2015 • About Northbridge Industrial Services (
$NBI) • By InTwits
Northbridge Industrial Services is a growth stock in Industrial Engineering industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Northbridge Industrial Services showed fast growth in the last financial year. The company's revenue surged on 19.4% in FY2014. The growth also happened in EBITDA of 32.7% for the same period.
In the last 3 years Northbridge Industrial Services showed fast revenue growth of 21.7% from 2011 to 2014 annually. EBITDA surged on 23.6% from 2011 to 2014 annually.
Northbridge Industrial Services ($NBI) financials for the last 5 years
| mln. £ | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 19 | 25 | 31 | 38 | 45 |
|---|
| Revenue growth, % | | 28.9% | 23.7% | 22.0% | 19.4% |
|---|
| Gross margin, % | 62.4% | 59.0% | 57.0% | 54.0% | 48.4% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 6 | 8 | 9 | 11 | 15 |
|---|
| EBITDA growth, % | | 25.6% | 21.2% | 17.4% | 32.7% |
|---|
| EBITDA margin, % | 31.7% | 30.9% | 30.3% | 29.2% | 32.4% |
|---|
| Net Income | 3 | 2 | 4 | 5 | 5 |
|---|
| Net Income margin, % | 15.7% | 9.32% | 12.0% | 14.0% | 11.3% |
|---|
| |
| CAPEX | 0 | 0 | 2 | 0 | 1 |
|---|
| CAPEX/Revenue, % | 1.30% | 1.46% | 6.75% | 1.12% | 2.34% |
|---|
| Debt | 6 | 13 | 14 | 16 | 22 |
|---|
| Cash | 3 | 1 | 0 | 4 | 4 |
|---|
| Net Debt/EBITDA | 0.6x | 1.6x | 1.5x | 1.1x | 1.2x |
|---|
| |
| ROIC, % | 16.1% | 13.0% | 12.6% | 12.5% | 12.6% |
|---|
| ROE, % | 16.4% | 9.2% | 13.5% | 15.9% | 12.1% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Northbridge Industrial Services's EBITDA margin surged on 3.20 pp from 29.2% to 32.4% in 2014. If we look for the longer period the company's EBITDA margin increased slightly on 1.50 pp from 30.9% in 2011 to 32.4% in 2014.
Northbridge Industrial Services shows attractive ROIC at 12.6% for the last 12 months which assumes stable development model. Three years ago it was about the same at 13.0%. For the last three years the average ROIC was 12.6%.
The company's Net Income margin dropped on 2.70 pp from 14% to 11.3% in 2014. In the longer period the company showed fast Net Income margin growth of 2 pp from 9.30% in 2011 to 11.3% in 2014.
Northbridge Industrial Services operates at ROE of 12.1%. It's average level of ROE for the last three years was 13.8%.
Capital expenditures (CAPEX)
In FY2014 the company had CAPEX/Revenue of 2.34%. Northbridge Industrial Services's CAPEX/Revenue surged on 0.883 pp from 1.46% in 2011 to 2.34% in 2014. It's average CAPEX/Revenue for the last three years was 3.40%.
Leverage (Debt)
Having such a fast growth profile Northbridge Industrial Services keeps medium debt level at 1.2x Net Debt/EBITDA. In the last 3 years Northbridge Industrial Services's leverage dropped on 0.33x from 1.57x in 2011 to 1.23x in 2014.
Valuation vs. comparable companies
The company trades at 5.4x EV/EBITDA which is 65.9% lower than 16.0x Industrial Engineering industry avearge calculated based on 44 companies. The company trades at 12.1x P/E which is not surprisingly 32.4% higher than 9.1x Industrial Engineering industry avearge calculated based on 6 companies.
Peers in Industrial Engineering
Below we provide Northbridge Industrial Services benchmarking against other companies in Industrial Engineering industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Pressure Technologies ($PRES) | | 6.5% | 31.6% | 12.9% | 57.1% |
| Avingtrans ($AVG) | | 26.9% | -11.3% | 40.8% | 33.1% |
| Somero Enterprise Inc ($SOMA) | | 4.0% | 47.1% | 40.1% | 31.5% |
| Energy Technique ($ETQ) | | 10.2% | 22.6% | 6.4% | 26.7% |
| Mitsubishi Electric Corp ($MEL) | | 8.7% | -0.2% | -2.0% | 13.7% |
| |
|---|
| Median (17 companies) | | 10.3% | 11.7% | 6.1% | -0.1% |
|---|
| Northbridge Industrial Services ($NBI) | | 28.9% | 23.7% | 22.0% | 19.4% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Somero Enterprise Inc ($SOMA) | 46.8% | 46.7% | 48.7% | 52.2% | 54.0% |
| Rotork ($76ID) | | | 46.8% | 47.4% | 48.0% |
| Hydro International ($HYD) | 42.9% | 40.0% | 37.3% | 39.4% | 45.3% |
| Mincon Group ($MCON) | 43.3% | 51.6% | 42.6% | 49.1% | 43.2% |
| Amiad Water Systems Ltd ($AFS) | 43.4% | 43.6% | 42.8% | 40.8% | 38.9% |
| |
|---|
| Median (16 companies) | 27.3% | 30.0% | 31.3% | 30.0% | 31.7% |
|---|
| Northbridge Industrial Services ($NBI) | 62.4% | 59.0% | 57.0% | 54.0% | 48.4% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Rotork ($76ID) | | | 27.0% | 27.6% | 28.0% |
| Somero Enterprise Inc ($SOMA) | 4.6% | 3.8% | 12.6% | 23.9% | 27.4% |
| Mincon Group ($MCON) | 20.8% | 34.0% | 22.9% | 30.0% | 22.7% |
| Pressure Technologies ($PRES) | 18.0% | 8.4% | 9.9% | 13.0% | 14.5% |
| Ms International ($MSI) | 12.4% | 14.7% | 18.4% | 12.5% | 10.1% |
| |
|---|
| Median (17 companies) | 5.7% | 7.6% | 8.6% | 8.0% | 7.4% |
|---|
| Northbridge Industrial Services ($NBI) | 31.7% | 30.9% | 30.3% | 29.2% | 32.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Avingtrans ($AVG) | 4.6% | 2.7% | 8.6% | 4.6% | 5.0% |
| Mincon Group ($MCON) | 13.8% | 3.4% | 8.0% | 4.1% | 4.3% |
| Mitsubishi Electric Corp ($MEL) | 3.3% | 3.0% | 4.4% | 4.2% | 3.7% |
| Pressure Technologies ($PRES) | 3.0% | 5.0% | 2.4% | 2.3% | 3.3% |
| Renold ($RNO) | | | 1.8% | 1.6% | 3.3% |
| |
|---|
| Median (17 companies) | 1.4% | 2.6% | 2.4% | 2.0% | 2.4% |
|---|
| Northbridge Industrial Services ($NBI) | 1.3% | 1.5% | 6.7% | 1.1% | 2.3% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Somero Enterprise Inc ($SOMA) | -6.0% | -7.0% | 6.0% | 34.1% | 51.7% |
| Energy Technique ($ETQ) | -2.6% | -14.3% | 18.9% | 19.3% | 47.5% |
| Rotork ($76ID) | | | 50.0% | 45.4% | 38.1% |
| Pressure Technologies ($PRES) | 21.9% | 6.4% | 11.6% | 20.7% | 22.1% |
| Molins ($MLIN) | 9.0% | 14.7% | 14.6% | 16.6% | 12.5% |
| |
|---|
| Median (17 companies) | 2.0% | 6.4% | 14.2% | 13.7% | 10.8% |
|---|
| Northbridge Industrial Services ($NBI) | 16.1% | 13.0% | 12.6% | 12.5% | 12.6% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tricorn Group ($TCN) | 1.0x | 0.0x | -0.3x | 0.9x | 5.8x |
| Renold ($RNO) | | | 1.3x | | 5.4x |
| Amiad Water Systems Ltd ($AFS) | | | 1.2x | 1.4x | 3.0x |
| 600 Group ($SIXH) | 4.2x | 2.7x | | 3.2x | 2.2x |
| Avingtrans ($AVG) | 4.6x | 2.0x | 3.1x | 0.7x | 1.2x |
| |
|---|
| Median (14 companies) | 0.2x | 0.0x | -0.4x | -0.4x | -0.1x |
|---|
| Northbridge Industrial Services ($NBI) | 0.6x | 1.6x | 1.5x | 1.1x | 1.2x |
