We feel now is a pretty good time to analyse Northbridge Industrial Services plc's (LON:NBI) business as it appears the company may be on the cusp of a considerable accomplishment. Northbridge Industrial Services plc, together with its subsidiaries, engages in the manufacture, hiring, and sale of specialist industrial equipment worldwide. On 31 December 2020, the UK£28m market-cap company posted a loss of UK£7.5m for its most recent financial year. The most pressing concern for investors is Northbridge Industrial Services' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 2 of the British Electrical analysts is that Northbridge Industrial Services is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of UK£1.5m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 83% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Northbridge Industrial Services' upcoming projects, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 32% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of Northbridge Industrial Services which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Northbridge Industrial Services, take a look at Northbridge Industrial Services' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Valuation: What is Northbridge Industrial Services worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Northbridge Industrial Services is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Northbridge Industrial Services’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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