Plexus Reports Excellent Financial Results (UK)

Plexus Holdings plc, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® method of wellhead engineering, announces its preliminary results for the year ending 30 June 2012.

Highlights

– Strong forward order book as POS-GRIP® friction-grip wellhead equipment continues to gain market share, winning business from new international oil and gas operators in new territories, as well as repeat business from existing customers

– Increased industry receptiveness to new and superior technology as a result of regulatory and government initiatives focused on safety standards and operational performance in a number of oil equipment related areas, particularly subsea following the Gulf of Mexico incident in 2010

– First relief well standby contract with a value in excess of £4.0m over three years for the supply of back-up High Pressure/High Temperature (‘HP/HT’) wellhead equipment with a leading global oil and gas operator as part of contingency planning arrangements in the event that a relief well is needed during the drilling programme in the North Sea

– Joint Industry Project (‘JIP’) for the new Plexus POS-GRIP subsea wellhead design (‘HGSS™’) gains significant support – major consulting partners now include Shell International Exploration and Production B.V., Maersk Oil North Sea UK Ltd. (‘Maersk’), Wintershall Noordzee B.V., the UK entity of the world’s largest offshore drilling company, Tullow Oil plc, Eni S.p.A., and Oil States International Inc.

– Maersk agreed as part of the on-going JIP to contribute £0.26m towards the development and final testing of the HP/HT Tie-Back wellhead system; subsea related activities extended to the award of a £0.5m engineering design contract for a subsea wellhead HP/HT crossover system from Wintershall Noordzee B.V. which includes prototype qualification testing

– New HP/HT customer contract wins with Vantage Drilling Company Inc. for the supply of wellhead equipment to a major Malaysian national oil and gas operator, and Santos Ltd for offshore Australia (following on from a first time contract in Australia for Apache Energy Australia in 2010)

– HP/HT contract wins with existing customers included Gaz de France Suez E&P Ltd, Centrica Energy, Bowleven plc; a further X-HP/HT contract with BG International Ltd, a 10,000 psi standard pressure contract win with Niko Resources (Trinidad and Tobago) Limited; and for the fourth time, a two year extension framework agreement with Applied Drilling Technology International (the turnkey drilling division of Transocean Drilling U.K. Limited)

– Post period end, secured a further 4 year contract with Brunei Shell Petroleum Sdn Bhd for the supply of HP/HT and standard pressure exploration wellhead equipment and services with a minimum value of £2m; a £1.15m two well standard pressure and HP/HT order from Talisman Energy Inc.; and a £1.0m HP/HT equipment contract for new customer Lotos Exploration and Production Norge AS

– First licensing, manufacturing, distribution, and agency agreement signed with Breda Energia S.p.A (‘Breda’) for the supply and servicing of POS-GRIP products worldwide to Italian oil and gas major ENI S.p.A

– American Petroleum Institute (‘API’) awarded the Plexus Aberdeen facility two licences in relation to the API Monogram Programme so that all equipment designed and manufactured in accordance with the relevant licences can now be stamped with an API Monogram – should further improve Plexus’ equipment marketability internationally where such Monogramming is required

– Successful placing of £6.2m of new and existing ordinary shares – £2.0m raised before expenses to support growth strategy, increase liquidity and broaden the institutional shareholder base

– Board changes – Robert Adair retired as non-executive Chairman, Christopher Fraser joined as a non-executive director, and Jeff Thrall moved from non-executive director to non-executive Chairman

– Capital investment increased by 97.6% to £4.62m (2011: £2.34m)

– Research and Development (‘R&D’) spend increased by 68.7%, excluding costs of building new test fixtures, to £1.20m (2011: £0.67m)

– The Board is today proposing a 16.3% increased final dividend of 0.5p per share (2011: 0.43p), which will be subject to shareholder approval at the Annual General Meeting (‘AGM’) to be held on 28th November 2012. If approved the dividend will be paid on 14th December 2012 to all members appearing on the register of members on the record date 26th October 2012. The ex-dividend date for the shares is 24th October 2012

Chief Executive Ben van Bilderbeek said:

“I am pleased to report an excellent set of financial results for the year which include a record performance in terms of revenues, margins, and profitability. Such strong on-going progress means that I am delighted to announce that the Board proposes a 16.3% increase in the final dividend of 0.5p per share for the year ended 30 June 2012, which will be submitted for approval at the Annual General Meeting.

“These results were achieved during a period where the Group has been particularly active at both the organic and strategic levels. Important rental exploration contracts were secured with both existing and new major international oil and gas operators across the world, particularly for HP/HT applications where our reputation goes from strength to strength, and we also increased the number of consulting partners to our pioneering HGSS subsea wellhead design JIP, signed an inaugural POS-GRIP licensing agreement with Breda, progressed our HP/HT Tie-Back wellhead system JIP, and achieved API Monogram Licence status.

“At the corporate level, we successfully completed a share placing in January 2012 which had the benefit of increasing the liquidity in our shares whilst helping to finance our various R&D projects and growing rental inventory. This placing broadened our institutional shareholder base and I would like to warmly welcome our new blue chip investors and thank our existing shareholders for their continued support. Such developments are part of the on-going development of Plexus both at an operational and corporate level and come at a time when there are growing signs of merger and acquisition activity in the oil services sector where the need for innovative technology such as ours is becoming increasingly recognised.

“These positive developments continue to reinforce our belief that whether the growing support for the POS-GRIP friction-grip method of engineering comes from our customers or investors, the unique advantages that our technology offers in terms of operational performance, safety, time, and cost savings will continue to drive market share gains both for existing surface and in due course subsea applications, whilst significantly improving current wellhead standards. However, it is important to stress that even though customer demand continues to exceed our current capacity to deliver as a result of our equipment being selected in preference to established conventional alternatives, we will continue to ensure that we maintain the high standards that we set ourselves and which our customers expect from us.

“In summary the Board remains confident that the future looks highly positive for Plexus. Our message to the industry is simple and gaining traction – wellhead equipment qualification test standards need to match as close as possible those of real field life conditions, as well as the same higher standards required of other critical performance items in the well such as casing and tubing couplings. Indeed, a major international oil and gas operator has recently issued a new set of test standard requirements for Surface and Subsea Wellhead and Christmas Tree Equipment, and we believe that Plexus is in a unique position to address this challenge. Such developments can only help accelerate our goal of becoming a leading specialist oil and gas services company by generating further interest from potential commercial and licensing partners, thereby delivering significant shareholder value in the years to come.

“Finally I would to thank Robert Adair who retired from the board this year after six years’ service, and welcome Christopher Fraser onto the board as a new non-executive director.”

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Press Release, October 16, 2012