Readers may remember that we featured Northbridge Industrial (145.5p) in July last year when the share price was 170.5p.

At the same time the FTSE AIM All Share Index was 905.0 and as I write it stands at 388.7 a fall of 57.0 per cent. Northbridge Industrial's share price has fallen just 14.7 per cent over the same period so the company has held up well under difficult conditions for the AIM market in general.

Northbridge was established in January 2005 for the purpose of acquiring companies that hire specialist industrial equipment, such as loadbanks, which essentially test whether independent power supplies are working correctly such as diesel generators. Major uses of such equipment include off-shore oil and gas installations and ships, and include the South Korean shipyards owned by companies such as Daewoo, Samsung and Hyundai. Other customers are those that are in need of independent or secondary back up power systems, such as hospitals or banks. The company also works in the Middle East providing equipment such as generators to buy or rent for the oil industry.

The most recent results for the six-month period ended June 30, 2008, were encouraging and trading continued to be strong with intake and enquiries for rental at a record level and trading ahead of market expectations. The group reported revenue up 44 per cent to £6.9m (2007: £4.8m) with profit before tax up 66 per cent to £1.0m (2007: £0.6m). Earnings per share were up 71 per cent to 9.9p (2007: 5.8p) and the company said that they hope to increase the dividend to 1.3p from 1.0p.

The new financial year has started with a much larger hire fleet following the investment in recent years whilst the group has substantial cash balances and a low level of net gearing. We think earnings per share for 2008 are going to be higher than forecast, putting the shares on a very low p/e ratio.

Given the fall in the share price since October last year, which was mainly due to market sentiment and loss of confidence in the AIM market in general, the shares look good value at their current price.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.