Plexus : Interim Results to December 2021

21 March 2022



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 interim results for the six months to 31 December 2021.

Financial Results

  • Continuing operations sales revenue £734k (2020: £419k)
  • Continuing operations EBITDA loss (£1,061k) (2020: £1,214k loss)
  • Continuing operations loss before tax (£1,953k) (2020: £1,995k loss)
  • Basic loss per share from continuing activities (1.94p) (2020: 1.99p loss)
  • Cash of £3.38m (2020: £3.38m), and £3.29m (2020: £2.04m) drawn down from the Lombard banking facility
  • The Group has £4.71m in financial assets (2020: £3.04m)
  • Total assets of £26.3m (2020: £29.4m)
  • Total liabilities of £5.3m (2020: £3.9m)

Operational overview

  • July 2021 – received the London Stock Exchange’s Green Economy Mark
  1. Awarded to companies and funds where 50% or more of their revenues are attributable

to environmental solutions which contribute to the global green economy

    1. Recognition of Plexus’ ‘through the BOP’ (Blow-out Preventer) wellhead designs, as well as its POS-GRIP proprietary HG® metal-to-metal leak proof sealing system
  • August 2021 – diversified future revenue stream by re-entering the Jack-up Exploration (Adjustable) Rental Wellhead market, through a collaboration agreement with Cameron
    International Corporation (“Cameron”), a Schlumberger company
  • December 2021 – scope of surface production low-cost volume wellhead licencing agreement with Cameron expanded worldwide increasing the target market for Plexus’ technology and royalty rates for the expanded activities
    1. Terms and milestones of the previous agreement with Cameron announced 10 November 2020 include:
      • Non-ExclusiveAgreement enabling Cameron to design, market and sell Plexus’ POS-GRIP and HG metal-to-metal seal method of wellhead engineering for surface wellheads to its existing clients
    • Royalty payment in the range of 3% to 6% of the revenues generated from the sale, lease, or rental of surface wellheads
    • Cameron design, testing and preparation of marketing material underway and it is anticipated that sales activity will begin in the first half of the next financial year
  • December 2021 – won a further contract with a leading North Sea Operator for the provision of a Plexus’ POS-GRIP 10,000 psi leak proof “HG®” metal to metal sealing surface production wellhead, together with associated spares and valve equipment
    o Wellhead equipment on schedule for delivery by Q2 2022
  • Global concern about methane emissions continues to gather momentum as part of the drive towards Net Zero and meeting ESG goals, and Plexus believes that leak proof equipment with scientifically proven long-term integrity will over time only become more relevant to oil and gas exploration and production activities
  • The war in Ukraine has resulted in the suspension of sales and marketing activities in Russia with our licencee LLC Gusar (“Gusar”) – further updates will follow as the tragic situation unfolds. The suspension is not expected to have a material impact on Plexus’ financial trading performance in the year ending 30 June (“FY22”) which the Board anticipates will remain in line with market expectations

Chief Executive Ben van Bilderbeek said: “Despite another challenging six months trading period in which COVID-19 continued to impact on the global economy, there is now at least a clear sign that the pandemic is beginning to subside, and although we must still all be vigilant, the economy is returning to some sort of normality. However, just as COVID recedes, what the world did not anticipate post period end, was Russia waging war on Ukraine and the ensuing tragic consequences that are ongoing; it is not yet clear what this will mean for the world, the oil and gas industry or our relationship with our Russian licensee Gusar where we have suspended business activities for the foreseeable future.

“Notwithstanding these challenging circumstances, we are pleased with our progress during the period both organically, with the winning of a further surface production wellhead contract for the North Sea, and strategically, with the strengthening of our relationship with Cameron with the signing of two new agreements. The first of these, signed in August enables Plexus to re-enter the exploration rental wellhead market sector where we had built up an excellent reputation within the industry over many years up until 2018 when the division was sold to TechnipFMC. The second agreement signed in December, expanded the scope of the existing Cameron license which now extends worldwide, whilst at the same time increasing royalty rates for an expanded set of activities.

“The deployment of our proprietary wellhead and associated equipment designs for surface and subsea applications remains a key focus, and we are already pursuing a number of new tender opportunities for exploration rental wellheads. Growing oil and gas supply constraints, combined with gas being recognised as the transition fuel of choice suggest that the UKCS and ECS still have an important role to play over the coming decades. Indeed, the Chancellor Rishi Sunak recently said that “We have resources in the North Sea, and we want to encourage investment in that because we’re going to need natural gas as part of our transition to getting to NetZero”. The revitalised recognition of the role hydrocarbons still have to play in the world economy has been underlined by Oystein Noreng, professor of petroleum economics at BI Norwegian School of Management in Oslo who has gone as far to say

We have misled ourselves that we will have windmills and solar and that will be it. But globally we are not out of the coal age; we are in the middle of the oil age and just starting the gas age”.

“In addition to these opportunities, we are also confident that in the longer term our technology can play a crucial role in supporting emerging industries such as carbon capture, gas storage, hydrogen and geothermal. The unique combination of leak proof performance and long-term integrity, which can avoid expensive intervention and maintenance measures, is particularly important for such applications.

“Moreover, in the last six months, the importance of aiming for a net-zero future has never been more apparent, with the November COP26 summit in Glasgow putting the spotlight on another opportunity: decommissioning. Left unplugged, oil and gas wells are at risk of leaking methane into the atmosphere, which currently accounts for at least 25% of global warming. All of this indicates that if natural gas is now viewed as a key transitional energy source in the shift to a sustainable future, then exploration and production methods must be conducted as responsibly as possible, and that should mean that leak proof equipment of whatever nature should be used whenever and wherever possible throughout the supply chain.

“Despite opportunities finally emerging after an extended industry downturn, we undoubtedly face obstacles: historically, the industry has not been the most forward-thinking; project financing is getting harder; funding in the decommissioning space has been constrained; and as a small ‘disruptive technology provider’ we can sometimes be regarded as an inconvenient and ‘riskier’ partner.

“However, I believe that the tide is now turning. New oil and gas exploration and production drilling activities are increasing, oil is back at record prices and meeting ESG requirements is no longer optional, with regulation and investor sentiment becoming ever more rigorous. If they are to survive, companies will also need to explore alternative options to reach NetZero such as carbon capture and storage and the use of depleted formations, and geothermal power where Plexus is assessing ways in which its technology can be adapted to deliver unique solutions. With superior, leak-free technology at its core, escalating organic opportunities, strengthening blue-chip partnerships, dynamic R&D advances, our reentering of the Jack-up exploration wellhead rental business, and with ESG goals on the agenda of governments worldwide, I am increasingly confident that Plexus has reached a tipping point that positions us well to rebuild significant value to shareholders over the next 18 months.”

For further information please visit www.posgrip.comor contact:

Ben van Bilderbeek

Plexus Holdings PLC

Tel: 020 7795 6890

Graham Stevens

Plexus Holdings PLC

Tel: 020 7795 6890

Derrick Lee

Cenkos Securities PLC

Tel: 0131 220 9100

Pete Lynch

Cenkos Securities PLC

Tel: 0131 220 9100

Max Bennett

St Brides Partners Ltd

Tel: 020 7236 1177

Isabel de Salis

St Brides Partners Ltd

Tel: 020 7236 1177

Chairman’s Statement

Business Progress and Operating Review

“Plexus remains well-positioned to benefit from the opportunities being created by the supply-demand deficit facing the oil and gas industry. There is continued pressure for oil and gas operators to increase production from existing wells whilst improving their green credentials, and we believe this will have to extend to increased exploration activity. A Shell presentation last month titled “Shell LNG Outlook 2022” supports this view and warned that an LNG supply-demand gap was set to emerge in the mid- 2020s, especially as many countries rebound from the economic impact of the coronavirus pandemic. Shell’s CEO van Beurden went as far to say that “We are struggling as an industry to keep up with supply.

“Evidence is building that the supply-demand deficit is awakening investment activity by the large oil and gas exploration and production companies, even before the war in Ukraine. Rystad Energy analysts have reported that global oil and gas investment will increase by $26bn this year to $628bn, and in the meantime drilling rig use is climbing with some recent reports indicating a circa 50% increase in North America and internationally. Eni head Claudio Descalzi said the imbalance predated the pandemic and was a result of falling investment since 2015, and it is now clear that this needs to be addressed, especially for natural gas where Plexus wellhead equipment and products excel.

“Plexus’ wellheads, which have been used in over 400 gas wells globally, are leakproof, deliver operational time savings, have lower maintenance costs, and importantly, can significantly reduce the escape of methane gas – increasing safety for personnel, and limiting the negative impact on the environment. In recognition of the Company’s ongoing commitment to improving standards in the oil and gas industry through the development and implementation of innovative green technologies, on 21 July 2021, Plexus received the London Stock Exchange’s Green Economy Mark, an accolade awarded to companies and funds where 50% or more of their revenues are attributable to environmental solutions.

“On 9 August 2021, the Company announced that it was to re-enter the Jack-up Exploration (Adjustable) Rental Wellhead market, through a Co-operation Agreement with Cameron. Under the terms of the Agreement, Cameron will licence and transfer Plexus’ original designed Exact-15 (“Exact”) system rental wellhead inventory and Centric-15 (“Centric”) mudline system equipment, as well as provide manufacturing support. Cameron will also assist Plexus with sales leads generation and market insight through a formal Sales Advisory Board. Plexus will contract directly with customers, manage the full job execution cycle using its in-house field technicians and infrastructure, and will assume responsibility for the maintenance, repairs, and logistics of the equipment provided. Plexus will pay Cameron a licence royalty fee based on revenue generated from the sale and rental of the licenced equipment. This is an important strategic move for Plexus and returns the Company to a business sector it understands very well and in which it has a proven track record.

“During the reporting period, the Company announced that it had won a contract with a leading North Sea operator for the provision of Plexus’ POS-GRIP 10,000 psi leak-proof “HG” metal to metal sealing surface production wellhead, together with associated spares, and valve equipment. This is a cash generative, short-term contract of 120 days, with a tiered payment structure, and deliverable by Q2 2022. Plexus is pleased to report that this contract will be delivered on time and with revenues as anticipated.”

Key functions that support our operations are Human Resources (‘HR’), Quality Health and Safety (‘QHSE’), Information Technology (‘IT’) and Intellectual Property (IP’).

The Company maintains its Competency Management System through an internally developed system ‘Competency@Plexus’ (‘C@P’). This is monitored and accredited by OPITO, the training and qualifications standards board. The annual monitoring audit was successfully conducted in September 2021, full accreditation was maintained with no findings raised by the auditor.

QHSE is an important function of the Company and Plexus’ strong track record enables it to demonstrate a high degree of compliance and credibility in the oil and gas industry. Without the appropriate certifications, it would not be possible for Plexus to be considered for certain contract awards by operators. With this in mind, and with a commitment to provide a safe, practical, and competent workplace for our employees, management has developed and adopted very rigorous QHSE procedures in this field. In September 2021 the Company achieved six consecutive years of zero lost time incidents (‘LTIs’) and, following successful audits, Plexus has retained its API Q1 and ISO 45001 certifications.

The Group has continued to follow Government COVID-19 guidelines, with a gradual transition from working from home during the pandemic towards a full time return to the office. Plexus has been able to rely on robust IT and security systems to ensure that neither work performance nor data security has been compromised during this period.

We continue to develop our suite of IP both through patent protection and ongoing research and development. Capitalised R&D salary costs for the 6 months ended 31 December 2021 was £223k.

Interim Results

Plexus’ results for the six months to December 2021, and the activities carried out during this period, reflect the Group’s ongoing strategy of moving towards the development of new revenue streams and new markets.

Continuing operations revenue for the six-month period ended 31 December 2021 increased to £734k, compared to the previous year’s figure of £419k following an increase in operational activity.

During the period Plexus continued to focus on preserving Group cash by minimising spending, and controlling investment on capex, opex and non-essential R&D, without compromising operations.

Continuing activities administrative expenses have decreased for the six months to December 2021 to £2.51m (2020: £2.64m). Personnel numbers, including non-executive board members are broadly in line with the prior year at 38 (2020: 36). This staff structure has balanced the anticipation of ongoing and future organic operational opportunities, particularly with the move back into the rental wellhead exploration market, and development and support for our POS-GRIPIP-led strategy involving external partners and licensees, against the need to carefully manage the Group’s costs and cash resources. The current staff levels are around the minimum required to maintain the operational infrastructure that has been developed to date, including maintaining the Group’s Business Management System, and retaining all relevant and necessary accreditations, in addition to meeting operational requirements.

For continuing operations, the Group has reported a loss of £2.0m in the period which is in line with the prior year. The loss comes after absorbing depreciation and amortisation costs of circa £0.8m.


Plexus Holdings plc published this content on 21 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2022 11:07:05 UTC.

Publicnow 2022


Sales 2022 2,50 M
3,29 M
3,29 M
Net income 2022 -4,20 M
-5,53 M
-5,53 M
Net cash 2022 2,70 M
3,56 M
3,56 M
P/E ratio 2022 -1,30x
Yield 2022
Capitalization 5,47 M
7,21 M
7,21 M
EV / Sales 2022 1,11x
EV / Sales 2023
Nbr of Employees 33
Free-Float 34,0%


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