Plexus Holdings unveil Full Year results

Preliminary Results for the year to 30 June 2014

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 2014.

Financial Results:

· Record revenue, EBITDA, profit before tax and profit after tax
· 65.1% increase in profit after tax to £5.05m (2013: £3.06m)
· 5.7% increase in revenue to £27.02m (2013: £25.57m)
· 18.7% increase in EBITDA to £9.02m (2013: £7.60m)
· 25.9% increase in profit before tax to £5.38m (2013: £4.27m)
· 62.9% increase in basic earnings per share to 6.01p (2013: 3.69p)
· 12.7% proposed increase in final dividend to 0.62p per share (2013: 0.55p)

Highlights:

· Strong financial performance driven by core business of renting proprietary POS-GRIP® friction-grip exploration wellhead equipment, particularly High Pressure/High Temperature applications, resulting in repeat business and the winning of new major international oil and gas customers in new territories around the world

· HP/HT rental equipment contract wins with existing customers included Statoil Petroleum AS for £2.5m, Glencore Exploration Cameroon Ltd for £1.6m, Maersk Oil Danish Unit for £1.1m, GDF Suez E&P UK Ltd (‘GDF’) for £1.5m, and post period end from Det Norske Oljeselskap ASA for £1m, and BG Group UK (‘BG’) for £2m

· New customer wins included a third Australian customer Eni Australia Limited for £1.0m (adding to Apache Energy Australia and Santos Ltd), as well as new customers in new territories Galp Energia Tarfya B.V. in Morocco (£0.6m), and Shell China Exploration and Production Company Limited) offshore Hainan Island, China

· Three year contracts secured – firstly renewal of Wintershall Noordzee B.V. contract for the supply of exploration equipment for the North Sea offshore Netherlands, and secondly with leading drilling engineering company, AGR Well Management Limited, which has already generated a contract for a new user, Svenska Petroleum Exploration AB, in another new territory, Guinea Bissau in West Africa (£0.4m)

· Production wellhead equipment order secured from Centrica North Sea Gas Ltd for £0.85m which further demonstrates Plexus’ ability to supply wellhead equipment not only for exploration wells but also long term production wells which is a significantly larger addressable market

· Continuing evidence of the need for safer and better technology and equipment following the Macondo incident in the Gulf of Mexico in 2010, particularly in relation to HP/HT drilling and subsea where a number of related major industry initiatives have been launched. Plexus firmly believes that for wellheads and metal-to-metal sealing, POS-GRIP technology offers a uniquely superior solution to the challenges faced by operators in the field

· Significant progress being made with the new subsea wellhead design ‘HGSS’TM Joint Industry Project – design of the prototype frozen, testing of components well underway, and running of a prototype planned for 2015

· Strong industry support for HGSS JIP as evidenced by both Senergy Holdings Limited and post period end, BG International Ltd joining alongside existing consulting partners Eni S.p.A., Maersk Oil North Sea UK Ltd, Oil States Industries Inc., Shell International Exploration and Production B.V., Total E&P Recherche Developpement SAS, Tullow Oil plc, and Wintershall

· HP/HT Tie-Back Connector JIP reached another milestone with full product testing commencing post period end, and is due for completion before the calendar year end – technical sales discussions are in progress with an international oil and gas operator regarding opportunities in the UK and Egypt

· Capital investment in additional rental wellhead assets was £2.32m, a planned reduction on the prior year’s record level (2013: £5.72m)

· Research and Development spend, excluding cost of building test fixtures, increased by 61% to £2.37m (2013: £1.46m)

· Spending on intellectual property patent development and filings increased by 42.7% to £0.18m (2013: £0.12m)

Corporate:

· Strategy to create an Asian business hub gained momentum with Plexus Ocean Systems (Singapore) Pte Ltd post period end completing the formation of a new Malaysian Joint Venture company Plexus Products (Asia) Sdn Bhd in conjunction with a local oil and gas partner, Integrated Petroleum Services Sdn Bhd – first aim is to secure local licences for the supply of Plexus wellhead equipment

· February 2014 – Sir Ian Wood’s “UKCS Maximising Recovery Review: Final Report” published stating the need to exploit HP/HT resource potential, deploy the best and most cost effective technology, and leverage the capabilities of the UK’s own oil and gas supply chain

· Acquisition in July 2013 of a 25% interest in a private manufacturer of specialist oil and gas equipment for a consideration of £0.7m through the purchase of 100% of the share capital of Afrotel Corporation Ltd

· Placing in December raised £2.50m from the issue of new ordinary shares before expenses to support various organic and strategic growth strategies as well as broadening the shareholder base and increasing liquidity

· Expansion of Aberdeen HQ – Plexus doubled the size of its operational headquarters in Dyce through the purchase for £2.4m of a circa 36,000 sq. ft. work shop and office facility from leading oilfield services company Baker Hughes post period end in September 2014

· Strengthening of Board – Charles Jones joined the Board as a non-executive director in September with over 30 years of senior management and board experience in the US energy sector and will advise and assist in building relationships in the US wellhead equipment market

· Bank facilities renewed and increased with the Bank of Scotland, comprising an existing £5m revolving credit facility on a three year term with an additional £2m overdraft on a yearly term in September 2014 – also a five year £1.5m term loan was put in place to part fund the purchase of the additional Aberdeen facility

· Proposing a 12.7% increased final dividend of 0.62p per share (2013: 0.55p), which will be subject to shareholder approval at the Annual General Meeting to be held on 11 December 2014 – this follows on from the 9.1% increase in the interim dividend (to 0.48p) making a total dividend for the financial year of 1.1p per share. If approved the final dividend will be paid on 17 December 2014 to all members appearing on the register of members on the record date 7 November 2014. The ex-dividend date for the shares is 6 November 2014

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