Plexus Holdings Plc Trading Update (1998F)

TIDMPOS

RNS Number : 1998F

Plexus Holdings Plc

16 May 2017

Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services

This announcement contains inside information

16 May 2017

Plexus Holdings PLC ('Plexus' or 'the Company')

Trading Update

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP(R) friction-grip method of wellhead engineering, known for its safety, time and cost saving capabilities, provides the following update on trading.

The Company confirms that the challenging trading conditions in the sector have, as has been widely reported, continued in the second half of the current financial year, ending June 2017 ("FY17"). Although Plexus continues to pursue a number of specific opportunities in the North Sea and overseas, where discussions are progressing well, some of these are taking longer than anticipated to conclude as operators continue to show caution when committing to new capex and projects. In addition, a number of encouraging new contracts are currently being negotiated and are now likely to be concluded early in the next financial year, to June 2018 ("FY18").

This has resulted in a further material reduction of revenues for FY17. However, as a result of the Company's successful cost cutting and efficiency drive programme, which has already reduced costs to align them with a reduced revenue profile, the impact on EBITDA and LBT is expected to be less significant.

The Company remains in a robust financial position, with reduced capital spending commitments alongside a strong cash position and debt free balance sheet. Importantly, the Company's visibility of existing and potential sales opportunities around the world is currently greater than at the same time last year.

The Directors continue to believe that Plexus' POS-GRIP technology enables the Company to deliver best in class solutions to the industry and, notwithstanding these ongoing difficult trading conditions, the Directors are confident of improving results for Plexus during FY18.

Chief Executive Ben van Bilderbeek said:

"As a result of various project timetables changing, and the expected uplift in exploration activity being slower than anticipated, it is taking longer to for us to see the recovery in Plexus' order book. Whilst this is frustrating, we are convinced that the actions taken by management are prudent and leave the Company in a strong position to recover quickly and strongly once activity in the sector resumes.

Plexus has a unique and superior technology, an inventory of 62 wellhead sets, a blue-chip customer base, licensing agreements in place with established local partners in important hydrocarbon regions, a growing suite of products and a strong balance sheet. These capabilities and proven track record supplying rental wellhead equipment for some of the most technically challenging HPHT wells, means that Plexus is very well placed to help operators with their future jack-up exploration needs, as well as surface and subsea applications where the company will be also focusing its attention so as to generate value for all its shareholders."

**ENDS**

For further information please visit www.posgrip.com or contact:

 
 Ben van Bilderbeek   Plexus Holdings PLC   Tel: [phone] 
                                             6890 
 Graham Stevens       Plexus Holdings PLC   Tel: [phone] 
                                             6890 
 Nick Tulloch         Cenkos Securities     Tel: [phone] 
                       PLC                   9772 
 Derrick Lee          Cenkos Securities     Tel: [phone] 
                       PLC                   9100 
 Frank Buhagiar       St Brides Partners    Tel: [phone] 
                       Ltd                   1177 
 Isabel de Salis      St Brides Partners    Tel: [phone] 
                       Ltd                   1177 
 

NOTES:

Plexus Holdings PLC

Plexus Holdings PLC is an AIM traded oil and gas engineering and services business, which supplies wellhead and mudline suspension equipment together with associated equipment and services for exploration and production applications. Based in Aberdeen, with a presence in London, Cairo, Kuala Lumpur, Singapore and Texas, it has developed and patented a friction-grip method of engineering for oil and gas field wellheads and connectors, POS-GRIP(R), which involves deforming one tubular member against another to effect gripping and sealing.

To date, POS-GRIP wellhead systems have been used in over 400 oil and gas wells by numerous international companies. In particular, the technology has advantages in High Pressure/High Temperature (HPHT) and Extreme HPHT (X-HPHT) oil and gas environments, for which there is growing global demand and where Plexus is being increasingly recognised as the supplier of choice. Plexus has recently successfully completed the supply of an X-HPHT exploration wellhead to Total for the Solaris well which is believed to be the deepest and highest pressure well ever drilled in the North Sea.

Plexus is also extending its technology into an increasing number of other applications:

-- In September 2015 it launched a prototype of the 'Python(TM) Subsea Wellhead' developed as part of a Joint Industry Project in collaboration with BG, Royal Dutch Shell, Wintershall, Maersk, TOTAL, Tullow Oil, ENI, LR Senergy, Transocean and Oil States Industries Inc.

-- It recently also completed a JIP in conjunction with Maersk to develop a downhole HPHT Tieback connector which for the first time allows the reconnection of production casing to HPHT exploration and production wells.

-- It developed and qualified a new product called POS-SET Connector(TM) which is designed to re-establish a connection onto rough conductor casing previously cut above the seabed to facilitate tieback or abandonment operations.

Having proven its POS-GRIP technology in the niche jack-up exploration market Plexus is now focused on extending its applications into the much larger multi-billion dollar land and platform production well market as well as actively pursuing a first time use of the new Python subsea wellhead into the important subsea sector. Such strategic initiatives will be pursued both organically and with trading partners and licencees.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 16, 2017 02:01 ET (06:01 GMT)