Crestchic, the world’s largest loadbank manufacturer for sale or rent, has seen profitability explode in the past couple of months. This month’s interims saw a second upgrade since I made the shares a main buy in July, with Shore Capital lifting eps for this year and next by 25% to 24.6p and 27.4p, following the 40% upgrade in September.
H1 revenues rose 35% to £21.3m for the six months to end June, with a greater mix of Hire (+43% to £12.4m) versus Sale and operational gearing driving a 163% increase in pretax profits to £4m.
Executive chairman Peter Harris notes that these upgrades haven’t been driven by the data centre side (Texas only opens in October) but by two very large contracts in the oil & gas sector. The elevated price of gas following the Ukraine war has driven needs not just for remote generators from the sector but loadbanks are also used for testing wind power turbines and so on. Looking ahead, huge productivity improvements following the Burton factory expansion will ensure a bumper H2, as will the fact that its contracts in dollars or Euros are seeing windfall cash generation and further ‘beats’ to forecasts. Keep on buy list.
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