UK: Plexus Announces Interim Results

Plexus Holdings plc, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® friction-grip method of wellhead engineering announces its interim results for the six months to 31 December 2011.

Highlights

Financial

· 24% increase in sales revenue to £9.3m (2010: £7.5m)

· 17% increase in EBITDA to £3.0m (2010: £2.6m) – (before IFRS2 share based payment charges)

· 33% increase in profit before tax to £1.5m (2010: £1.1m)

· 70% increase in capital investment of £1.7m (2010: £1.0m) – of which £0.9m (2010: £0.6m) was rental inventory

· 67% increase in Research and Development (‘R&D’) to £0.5m (2010: £0.3m)

Operating

· Strong forward order book including:

o New High Pressure/High Temperature (‘HP/HT’) customer wins with Vantage Drilling Company Inc. to supply a major Malaysian national oil and gas operator for offshore East Malaysia, and Santos Ltd for offshore Western Australia

o HP/HT contract wins with existing blue chip customers Gaz de France Suez E&P Ltd and Centrica Energy in the North Sea, and 10,000 psi standard pressure contract wins for existing customers Niko Resources (Trinidad & Tobago) Limited offshore Trinidad, and two year extension of framework agreement with Applied Drilling Technology International the turnkey drilling division of Transocean Drilling U.K. Limited

o POS-GRIP subsea crossover to production technology and well capability project gained further traction with a £0.5m HP/HT 15,000 psi engineering design contract award from Wintershall Noordzee B.V

· Joint Industry Project (‘JIP’) to develop and commercialise a new and safer POS-GRIP subsea wellhead (‘HGSS™’) gaining significant momentum – secured major consulting partners Shell International Exploration and Production B.V., Maersk Oil North Sea UK Ltd., Wintershall Noordzee B.V., the UK entity of the world’s largest offshore drilling company, and post period end Tullow Oil plc

· Signed licensing, manufacturing, distribution, and agency agreement 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

· Post period end, Maersk Oil North Sea UK Limited agreed to contribute £0.26m towards the development and final testing of up to 20,000 psi mudline tieback wellhead system development JIP programme – commercialisation is targeted for mid-2012

Corporate

· Successful post period end placing of £6.2m of new and existing ordinary shares – £2m raised before expenses to support growth strategy, increase liquidity and broaden the institutional shareholder base

· Board changes post period end – 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

· Bank facilities renewed in September 2011 comprising a £5m credit facility on a three year revolving basis with an additional £1m overdraft on a yearly term

· Basic earnings per share of 1.46p (2010: 1.32p)

· 11.4% increase in interim dividend of 0.39p per share approved for payment on 27 April 2012 to members appearing on the register on 10 April 2012

Plexus’ Chief Executive Ben van Bilderbeek said:

“I am pleased to report an excellent set of results for the first six months of our financial year. This period has been particularly active for the Company on a number of fronts, including new contract wins with leading industry players in new territories; the completion of a breakthrough licensing agreement with Breda; the progressing of two key JIP’s regarding our HP/HT Tieback wellhead system and our new innovative HGSS subsea wellhead design initiative. Additionally, at the corporate level, post period end we completed a successful share placing which has increased the liquidity in our shares and also broadened our institutional shareholder base.

“Whether the growing support for our proprietary POS-GRIP friction grip technology comes from our customers or our investors, there is an increasing recognition that Plexus has the potential to become a leading specialist oil and gas wellhead services company that will offer a new wellhead standard for surface and in time, subsea applications. This progress I believe will see Plexus transformed from offering equipment that is often selected as a wellhead of necessity to that of a wellhead of choice. The unique advantages our equipment offers in terms of safety, operational performance, and cost savings will, I am certain, become more relevant in a world where greater regulation and health and safety requirements drive the need for, and use of, the best and safest available technology.

“For these reasons, I am looking to the future with confidence. This view is further enhanced by a number of recently published reports that point to increasing levels of capital expenditure by oil and gas operators around the world, particularly in the global deep water arena. ‘Barclays 2012 E&P Spending’ report estimates that global expenditure will reach a new record of US$598bn in 2012, an increase of 10% from 2011’s previous record. Importantly Barclays sees “considerable upside” to these spending forecasts believing that operators are being conservative with their estimates. Furthermore, increasing oil prices will drive further capital spending increases, and Barclays’ view is that exploration is likely to be at the forefront of such spending growth which bodes well for our Company and its future growth.

“In turn, I would like to take this opportunity to thank Robert Adair who recently retired from the board after six years’ service, and to welcome Christopher Fraser onto the board as a new non-executive director. Christopher will in particular be able to help us with various international regulatory and legislative related initiatives that have become ever more pertinent over the last two years, post major incidents including the Gulf of Mexico and offshore Australia.

“Finally, due to the positive trading over the last six month period and strong outlook, I am delighted to announce that the directors of the Group have approved the payment of an increased interim dividend of 0.39p per share which will be paid on 27 April 2012.”

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Subsea World News Staff , March 29, 2012;  Image: Plexus