TIDMPOS
RNS Number : 7687V
Plexus Holdings Plc
01 February 2017
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
This announcement contains inside information
1 February 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.
With continued difficult trading conditions in the oil & gas
industry as indicated in our recent AGM trading update, the Company
notes that its revenue for the current financial year, ending 30
June 2017, is currently running materially behind expectations. The
Company is in negotiations for the conclusion of several new
contracts which if they fall within this financial year will go
some way to recovering this shortfall for the year, or will help to
underpin visibility for the next financial year. Furthermore, due
to cost cutting measures which have already been implemented, and
further actions by management, the impact on LBT is expected to be
proportionally less significant. In addition, the Company has
successfully implemented the cash conservation measures announced
previously and as a result the cash position of the Company, which
remains debt free, is expected to be closer to expectations.
The Directors 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,
activity in oil & gas industry has shown signs of improving and
levels of customer interest in Plexus' technology have increased in
recent months. The directors see the second half of the current
financial year falling in line with the bottom of the exploration
drilling down cycle, especially in the North Sea, and this view is
supported by the fact that the Company has more visibility at this
time this year than at the same time last year. With the oil price
stabilising at levels which are profitable for many exploration
& production companies as a result of the recent OPEC
production reduction strategy, the Directors are confident of
improving results for Plexus during the next 2017/18 financial
year.
Plexus' CEO Ben Van Bilderbeek said,
"As we have indicated previously, while the downturn has
undoubtedly significantly impacted on our progress and financial
performance, we are confident that once sentiment within the sector
begins to recover and operators renew their appetite for
exploration, Plexus will in turn regain the momentum that existed
before the downturn set in. Consensus is building that such a
turnaround is underway, and it was only a few weeks ago that Mr
Khalid-al-Falih the Saudi energy minister stated that the (down)
cycle is now switching to the opposite extreme, and warned that the
world needs $1 trillion of fresh investment in oil projects each
year just to keep up with growing demand.
Whilst the sector as a whole continues to experience challenging
trading conditions, it is our view that the bottom of the cycle has
now been reached and Plexus will be well placed to capitalise on a
more positive and robust trading environment. Alongside the views
of major producing countries like Saudi, I was also encouraged to
see that the Saudi warning was echoed by Fatih Birol, head of the
International Energy Agency who fears a looming oil shortage after
a collapse in spending on exploration and development, and was
quoted as saying that "Alarm bells will be ringing if there is no
major new investment this year".
The new business opportunities that Plexus is seeing at present
are increasing, with pricing levels in line with our expectations.
The continued underinvestment in the sector will, we believe,
result in an increased level of activity from operators in the
second half of 2017 onwards, which Plexus is undoubtedly well
placed to capitalise on."
**ENDS**
For further information please visit www.posgrip.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795
6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795
6890
Nick Tulloch Cenkos Securities Tel: 0131 220
PLC 9772
Derrick Lee Cenkos Securities Tel: 0131 220
PLC 9100
Frank Buhagiar St Brides Partners Tel: 020 7236
Ltd 1177
Isabel de Salis St Brides Partners Tel: 020 7236
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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