TIDMPOS
RNS Number : 7087T
Plexus Holdings Plc
29 March 2021
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
29 March 2021
Plexus Holdings PLC ('Plexus', 'the Company' or 'the Group')
Interim Results for the 6 months to 31 December 2020
Plexus Holdings plc, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R) method
of wellhead engineering, announces its interim results for the six
months to 31 December 2020.
Financial Results
-- Following the sale of the wellhead Jack-up exploration rental
wellhead application business (the "Jack-up Business") to FMC
Technologies Limited ('TFMC'), a subsidiary of major oil services
provider TechnipFMC (Paris:FTI)(NYSE:FTI), on 1 February 2018, the
interim results and prior periods are reported as required on a
continuing and a discontinued operations basis.
-- Continuing operations sales revenue GBP419k (2019: GBP49k)
-- Continuing operations EBITDA loss (GBP1,214k) (2019: GBP1,809k loss)
-- Continuing operations loss before tax (GBP1,995k) (2019: Loss GBP2,763k)
-- Basic loss per share from continuing activities (1.99p) (2019: 2.75p loss)
-- Net cash of GBP2.3m (2019: GBP4.5m)
-- The Group in addition has GBP3.04m in financial assets (2019: GBP2.96m)
Operational overview
Advancing IP-led strategy to establish POS-GRIP technology in
new markets via licensing and direct sales - building on historical
success of North Sea Jack-up exploration where Plexus' leak proof
wellhead equipment raised standards, delivered substantial cost
savings for operators and gained a significant market share. At the
same time Plexus continues to reduce overhead costs without
impacting on operational and R&D capabilities which are
expected to be available to our partners and customers.
Licencing Agreements
Licencing/Collaborative Agreements for POS-GRIP and other
proprietary Plexus IP now in place with two of the top three major
international service companies:
-- Signing of a non-exclusive licence for POS-GRIP surface
production wellhead technology with Cameron International Limited
('Cameron') (a Schlumberger group company) in November 2020
-- Good progress being made with Cameron regarding the
development of an inaugural wellhead design incorporating the
POS-GRIP method of engineering
-- The new Cameron licence compliments existing IP Collaboration Agreement with TFMC
Russia and the CIS
-- Strategy centred on supporting licensing partner Gusar's
ongoing efforts to pursue contracts for POS-GRIP Jack-up
exploration wellheads in the Russian market
o First wellhead successfully installed as part of the inaugural
contract for POS-GRIP rental wellhead equipment secured by Gusar
with global energy giant Gazprom in 2019
o Follow on well planned for 2020 did not go ahead due to
COVID-19 impact on drilling programmes, but activity is anticipated
to return this year which potentially would deliver further
revenues under this contract
Initiatives underway to expand licencing activities for
additional POS-GRIP products and applications
Direct Sales Activity
-- Targeting organic growth via direct sales of surface
production wellheads to customers, particularly for UK and European
North Sea regions
o Surface production wellhead system order secured from Spirit
Energy in July 2020
o Sales pipeline of project activity is preserved despite delays
due to the COVID-19 led economic downturn
o Operators have generally delayed, rather than cancelled
development plans due to COVID-19, meaning that most prospects
remain live
o Participating in the tender process for a range of
projects
o Interest being expressed by operators where total cost of
ownership considerations, maintenance and leak free integrity, and
remote monitoring are likely to become increasingly important
Outlook
R ecent strengthening of the oil price, combined with the need
to address the impact of reduced capital expenditure over the past
year is being seen as a sign that 2022 will see a major recovery
for the oil and gas sector
-- Hydrocarbons, and in particular natural gas are expected to
play an important role in the world economy for many years to come
despite the ongoing focus on renewables
-- Like many companies the full extent of the impact of COVID-19
on the Company's trade, customers and suppliers is not yet
known
Chief Executive Ben van Bilderbeek said:
"In what has been without doubt a challenging 12 months for the
global economy, and in particular for our industry due to the
effects of the COVID-19 pandemic, the UK is, at the time of
writing, making excellent progress with the rollout of its mass
vaccination programme which provides cause for optimism that the
green shoots of recovery can begin to surface and grow into the
second half of 2021. In tandem, momentum continues to grow for a
carbon neutral world, and the oil and gas industry is positioning
itself to be in the mainstream rather than on the fringes of this
movement. For our industry to be able to make this journey, there
is a growing recognition that out-dated technologies are no longer
fit for purpose and must be replaced by cleaner, more efficient,
and more reliable methods and equipment in order for the industry
to have any realistic chance of meeting net-zero targets. We
believe that Plexus, with our field proven POS-GRIP leak-proof
technology, is well positioned to maximise the opportunities that
are now beginning to open up to us, especially in relation to
natural gas, the cleanest fossil fuel, which it is widely reported
will increasingly be used to produce hydrogen, over the coming
years.
"The ongoing pandemic and associated lockdowns both in the UK
and around the world, while highly disruptive, did not prevent
progress being made towards rolling out the dual focused strategy
we have put in place to establish our POS-GRIP technology in new
markets through licencing and direct sales activity. In July 2020
we announced the award of an order for a POS-GRIP surface
production wellhead system from Spirit Energy. The contract is
progressing as planned, and as a result we would expect to
recognise the majority of revenues from this contract in the second
half of FY21.
"In terms of licencing, in November 2020 we were delighted to
announce an important initial Licence Agreement with Cameron, a
Schlumberger group company, the world's leading oil services
provider. We are excited about the potential that this new
relationship offers for POS-GRIP technology in the surface
production wellhead sector, and indeed have been very encouraged by
the level of positive engagement to date by our newest licencee in
these early days of the partnership. Good progress has been made in
relation to the technology transfer process, and the design of an
initial low-cost wellhead product is advancing. We very much look
forward to updating our shareholders on progress in the months and
years to come.
"The Cameron licence agreement is the third we have secured for
our technology in recent years, alongside the collaboration
agreement with top tier services provider TFMC and the agreement
with our licence partner Gusar for the Russian and CIS markets.
Building a portfolio of diversified revenue streams both in
conjunction with licencees and partners, as well as organically, is
central to our business model. Our technology lends itself to this.
Being able to deliver a higher standard wellhead solution,
particularly wherever metal to metal sealing is required opens a
host of potential markets for POS-GRIP, including in the
fast-growing 'green' space such as carbon storage, as well as
geothermal which is one of many sub sectors and applications we
have identified where POS-GRIP can make a difference. Nuclear
energy is another, especially where exotic materials are relevant,
and which do not always lend themselves to threaded connectors.
"For now, the half year results, including revenues of GBP419k,
are in line with internal budgets and the Group's revenues are
projected to be higher in the second half of the financial year;
results for the full year are anticipated to be in line with market
expectations. I look forward to providing further updates on our
progress."
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
Derrick Lee Cenkos Securities PLC Tel: 0131 220 9100
Pete Lynch Cenkos Securities PLC Tel: 0131 220 9100
Frank Buhagiar 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
This time last year we reported to you that we were well
underway with our 'reset and rebuild' strategy. Of course, at the
same time the very early stages of the COVID-19 pandemic were
underway, and there was little clarity on how this may affect not
just Plexus, or even our industry, but the world economy as a
whole. Oil and gas industry business activity has of course
continued, but at a slower pace. From the many interactions we
continue to have with customers, potential customers, and other
relevant parties, it is our view that the great majority of planned
activity has been delayed rather than cancelled. Whilst there is
not yet clear visibility on when these delayed activities may
return, there is certainly a growing feeling that our industry
should be optimistic that an upturn in activity is edging ever
closer, especially now that multiple vaccines have been approved
and rollout programmes are well underway.
Set against this backdrop, it is therefore clear that progress
in the past 12 months has not been as strong as we had been aiming
for, but our view is that this is a temporary situation and that
all the fundamentals supporting our strategy are still very much in
place, and that we are well positioned as both the economy and our
industry begin to recover.
The award of a contract from Spirit Energy in July 2020 for the
supply of a POS-GRIP surface production wellhead system provided a
welcome and positive start to the financial year. Much of the
activity in the period under review has been devoted to the
planning, procurement and manufacturing associated with this
contract and I am pleased to report that we are on course to
deliver on this contract as scheduled in the second half of the
financial year. Along the way, we have had the opportunity to work
closely with our associate engineering and manufacturing company,
Kincardine Manufacturing Services Ltd ('KMS'), in which we retain a
49% stake, as KMS has been a prominent contractor in the
manufacturing phase. This has proven to be a beneficial
relationship for both KMS and Plexus, and most crucially, for our
customers. During the period under review the Group has received a
dividend of GBP50k from KMS with a further GBP50k paid post period
end.
In November 2020 we announced the launch of a Licence Agreement
with Cameron, a Schlumberger group company which we see as a
tremendous validation of POS-GRIP technology. The licence is
non-exclusive and grants Cameron rights to use POS-GRIP and HG
metal-to-metal sealing technology for both conventional and
unconventional oil and gas surface wellheads. Along with a capital
licence fee, Plexus will earn royalties based on the number of
wellheads sold, leased, rented or otherwise supplied in each
calendar year up to and including 2029. The first joint development
project is the design and development of competitive and
technically differentiating wellhead systems, which incorporate our
proprietary POS-GRIP friction-grip technology for the volume
surface production market. We have been very impressed with the
level of engagement and enthusiasm of our new licence partner, and
we very much look forward to working closely with them on
developing this initial licence agreement and hope to expand the
relationship further in the years to come.
Licencing agreements are not the only path open to us to
penetrate the major target market, namely surface production.
Direct sales activity offers an additional route to market and,
increasingly, we are being invited to tender for production
projects, which can be sizeable in scale. We have a number of
enquiries ongoing not only in relation to POS-GRIP wellheads for
oil and gas, but also geothermal wellheads and other pressure
control applications. It should be noted that production contracts
generally involve longer sales cycles, and although we have no
control over the timings of such awards, securing just one larger
scale project would be of major significance for Plexus.
Significant not just in terms of boosting our revenue profile, but
also in terms of demonstrating to the industry that Plexus can
supply major projects with state-of-the-art equipment as part of a
full-service package that would likely include trees and
valves.
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 which we call 'Competency@Plexus'
('C@P'). This is monitored and accredited by OPITO, the training
and qualifications standards board. The annual monitoring audit was
conducted in October 2020 and despite the difficulties caused by
the need to carry out the audit remotely, due to the pandemic, full
accreditation was maintained with no findings having been raised by
the auditor. This is testament to the hard work of the Plexus C@P
team led by HR in developing and implementing the system over the
past six years, and a reflection of management's commitment to the
programme.
QHSE is an important function of the Company and one that
carries significant credibility in the industry. Without robust
policies and procedures, it would not be possible to be considered
for any contract awards by operators. With that in mind, and of
course with a commitment to provide a truly safe, practical, and
competent workplace for our employees, management has developed and
adopted very rigorous procedures in this field. I am delighted to
report that in September 2020 the Company achieved five unbroken
years of zero lost time incidents ('LTIs'). Additionally, Plexus
has been awarded ISO 45001:2018 certification, transitioning from
OHSAS 18001.
With most employees working from home during the pandemic, as
directed by the Government, 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. Plexus
continues to review and develop its computer network and security
monitoring systems and staff have been able to do this both from
the office and remotely. No unscheduled downtime has been recorded
during the period.
IP - our proprietary POS-GRIP IP is of course at the core of
Plexus, and fundamental to everything we do. We continue to develop
our suite of IP both through patent protection and ongoing research
and development. R&D activities have been able to continue
throughout the period despite lockdown and many employees working
from home.
Interim Results
Plexus' results for the six months to December 2020, 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, in particular the significantly larger
surface production wellhead market, both organically and with
partners.
Continuing operations revenue for the six-month period ended 31
December 2020 increased to GBP419k, compared to the previous year's
figure of GBP49k. The increase largely related to the revenue
generated from the licensing agreement with Cameron .
During the period Plexus continued to focus on preserving Group
cash by minimising spending, reducing overheads 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 2020 to GBP2.64m (2019: GBP3.02m).
Personnel numbers, including non-executive board members are in
line with the prior year at 36 (2019: 37). This staff structure has
been balanced in anticipation of ongoing and future organic
operational opportunities, whilst also being able to further
develop and support our POS-GRIP IP-led strategy involving external
partners and licensees. The current staff levels are also 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 operational requirements.
For continuing operations, the Group has reported a loss of
GBP2.0m which is a decrease on the prior year loss of GBP2.8m. The
decrease in loss is driven by an increase in sales revenue in
addition to some overhead costs savings. The loss comes after
absorbing depreciation and amortisation costs of circa GBP0.9m.
The Group has not provided for a charge to UK Corporation tax at
the prevailing rate of 19%. This is consistent with the prior
year.
Basic loss per share for continuing operations was 1.99p per
share which compares to a 2.75p loss per share for the same period
last year.
The balance sheet continues to remain strong, with the current
level of intangible and tangible property, plant and equipment
asset values at GBP9.9m and GBP3.0m respectively illustrating the
amount of cumulative investment that has been made in the business.
Total asset values at the end of the period stood at GBP29.4m.
As at 31 December 2020 the Group has cash and cash equivalents
of GBP3.4m, financial assets with a value of GBP3.0m and has drawn
down GBP1.1m on a Lombard banking facility provided by EFG.
Outlook
To date, POS-GRIP wellheads have been deployed on over 400 wells
worldwide by many blue-chip operators including BP, ENI, Gazprom,
Royal Dutch Shell, and Total. While this record is a source of
great pride, we firmly believe the best days for our technology lie
in the future rather than in the past.
Despite having to face a number of challenges since TFMC
acquired our Jack-up Business, our confidence is based on an
increasingly positive narrative, both for the short and medium
term. Over the next 12 months, industry indicators and commentary
point towards a strong rebound in capex and drilling activity, as
the drastic cutbacks seen over the previous 12 months are reversed,
and as the roll-out of the global COVID-19 vaccination programme
gathers pace, enabling a sustainable pick-up in economic activity
and therefore in oil and gas demand to take hold.
The strength of such reports is relevant from an outlook
perspective and some are worth reporting here. In the January 2021
FT article 'Oil services companies signal worst is over for
sector', Jeffrey Miller, Halliburton chief executive, is quoted as
saying, "2020 was the worst in our history...We view 2021 as a bit
of a transition year . . . and we view 2022 as when we see the
global rebalancing of supply and demand, which creates the sort of
underpinning of a multiyear upcycle." According to a November 2020
report, energy consultancy Rystad agrees, "2022 should be a banner
year. Spending commitments will jump to almost US$200 billion,
exceeding pre-pandemic levels, as companies push ahead with
previously postponed projects." Further, the FT's Derek Brower,
writing on 9 February 2021, extends the bullish timeframe further
out, "The world's state-owned energy companies are set to spend
$1.9tn on new oil and gas projects by 2030." It is this forecast
rebound in drilling activity that underlies our confidence in a
pick-up in orders for POS-GRIP enabled wellheads, either via direct
sales or via our licensing partners.
In tandem with the expected recovery in capex and drilling
activity, there is an important strategic shift taking place both
within and outside the energy industry whereby the narrative is
increasingly being driven by the need for the world to move to net
zero carbon emissions to combat climate change. For this to be
achieved, the energy sector's carbon footprint needs to be
eliminated or at the very least drastically reduced. A growing
Environmental, Social and Corporate Governance ('ESG') movement is
putting pressure on the industry and calling for operations at all
stages of the oil and gas production cycle to reduce emissions by
the adoption of greener, leak proof equipment and technology. For
operators, ignoring climate change is no longer an option.
Fortunately for them, help in the form of advanced technical
solutions and improved technology, such as POS-GRIP, is at
hand.
The need for this energy transition has gained widespread
acceptance in a relatively short space of time, as evidenced by the
growing adoption of electric vehicles ('EV's). Conversely, so too
has the acceptance that, for as long as the world is transitioning
to net zero, the global economy will continue to rely on
hydrocarbons for energy generation. This does not have to be a case
of one step forward, two steps back for not all hydrocarbons are
created equal, at least in terms of carbon emissions: natural gas
sits at the top end of the clean scale with coal and oil occupying
the dirtier end of the spectrum. In the words of Frans Timmermans,
the European Commission's executive vice-president for the European
Green Deal, as reported by the FT on 28 October 2020, "natural gas
will play the role of a transitional fuel". Add to this the role
natural gas plays in the production of hydrogen, which is
increasingly being viewed as a viable source of clean energy, it
would seem clear that the demand for natural gas is set for a
further boost. To satisfy the expected step-up in demand, gas
exploration and production wells will need to continue to be
drilled. To satisfy the increased level of scrutiny the energy
industry is under, we believe that leak-proof technologies will
gain more and more attention.
With the above in mind, the Board is positive for the future.
Thanks to our leak-proof applications for cleaner natural gas
exploration and production wells, our tubing spools which can
enhance the integrity of existing wells, and products applicable
for geothermal and industries beyond oil and gas, we believe that
Plexus has a role to play today and for tomorrow. The pandemic may
have temporarily frozen our pipeline of bidding activity for large
surface production projects, but the signs are that this situation
is beginning to thaw.
While current uncertainty continues to impact timings, we are
confident that a combination of returning energy demand, operators
focusing on reducing costs throughout the life of a well which can
be enormous where leaks result in shut-ins, and the inexorable move
to net zero we will add to our range of revenue streams, both
organically and with our licencees. We believe that the recent
licence deal with Cameron demonstrates that our technology is
highly relevant to those suppliers and operators looking to play
their own part in the energy transition. Together with a
capital-light licensing model, a debt-free balance sheet and a
proven technology track record, Plexus is soundly placed to succeed
for the benefit of our shareholders, and all stakeholders in the
energy transition.
J Jeffrey Thrall
Non-Executive Chairman
26 March 2021
Plexus Holdings Plc
Unaudited Interim Consolidated Statement of Comprehensive
Income
For the Six Months Ended 31 December 2020
Six months Six months Year to
to to 30 June
31 December 31 December 2020
2020 2019
GBP'000 GBP'000 GBP'000
Revenue 419 49 525
Cost of sales (36) (51) (225)
------- ------- -------
Gross profit 383 (2) 300
Administrative expenses (2,641) (3,024) (5,981)
Operating loss (2,258) (3,026) (5,681)
Finance income 106 100 192
Finance costs (40) (43) (111)
Other income 180 126 285
Share in profit of associate 17 80 265
------- ------- -------
Loss before taxation (1,995) (2,763) (5,050)
Income tax credit (note 6) - - 992
------- ------- -------
Loss after taxation from continuing
operations (1,995) (2,763) (4,058)
Loss after taxation from discontinued
operations - - (2,549)
------- ------- -------
Loss for Year (1,995) (2,763) (6,607)
Other comprehensive income - - -
------- ------- -------
Total comprehensive income (1,995) (2,763) (6,607)
------- ------- -------
Loss per share (note 7)
Basic from continuing operations (1.99p) (2.75p) (3.92p)
Diluted from continuing operations (1.99p) (2.75p) (3.92p)
Basic from discontinued operations - - (2.47p)
Diluted from discontinued operations - - (2.47p)
Plexus Holdings PLC
Unaudited Interim Consolidated Statement of Financial
Position
As at 31 December 2020
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
ASSETS
Goodwill 767 767 767
Intangible assets 9,920 10,569 10,325
Property, plant and equipment
(note 9) 3,076 3,618 3,273
Non-current financial asset 3,044 2,964 2,995
Investment in associate 865 937 898
Deferred tax asset 2,130 1,259 2,130
Other Receivables - 4,515 -
Right of use asset 1,397 1,700 1,548
------- ------- -------
Total non-current assets 21,199 26,329 21,936
------- ------- -------
Inventories 1,385 733 870
Trade and other receivables 3,396 2,822 2,982
Current income tax asset - - 76
Cash and cash equivalents 3,384 4,481 4,087
------- ------- -------
Total current assets 8,165 8,036 8,015
------- ------- -------
TOTAL ASSETS 29,364 34,365 29,951
------- ------- -------
EQUITY AND LIABILITIES
Called up share capital (note
12) 1,054 1,054 1,054
Shares held in treasury (2,500) (2,500) (2,500)
Share based payments reserve 674 674 674
Retained earnings 26,271 32,110 28,266
To tal equity attributable ------- ------- -------
to equity holders
of the parent 25,499 31,338 27,494
Lease liabilities 1,220 1,557 1,401
------- ------- -------
Total non-current liabilities 1,220 1,557 1,401
Trade and other payables 1,239 1,198 778
Bank Lombard facility 1,094 - -
Current income tax liability - 14 -
Lease liabilities 312 258 278
------- ------- -------
Total current liabilities 2,645 1,470 1,056
------- ------- -------
Total liabilities 3,865 3,027 2,457
------- ------- -------
TOTAL EQUITY AND LIABILITIES 29,364 34,365 29,951
------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Change in Equity
For the Six Months Ended 31 December 2020
Called Shares Share Based Retained Total
Up Held in Payments Earnings
Share Capital Treasury Reserve
Balance as at 30 June
2019 1,054 (2,500) 674 34,873 34,101
Total comprehensive
income for the year - - - (6,607) (6,607)
------- ------- ------- ------ ------
Balance as at 30 June
2020 1,054 (2,500) 674 28,266 27,494
Total comprehensive
income for the period - - - (1,995) (1,995)
------- ------- ------- ------- -------
Balance as at 31 December
2020 1,054 (2,500) 674 26,271 25,499
------- ------- ------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Cash Flows
For the Six months ended 31 December 2020
Six months Six months Year to
to 31 December to 31 December 30 June
2020 2019 2020
GBP 000's GBP 000's GBP 000's
Cash flows from operating activities
Loss before taxation from continuing
activities (1,995) (2,763) (5,050)
Loss before taxation from discontinued
activities - - (2,432)
------- ------- -------
Loss before tax (1,995) (2,763) (7,482)
Adjustments for:
Depreciation, amortisation and
impairment charges 864 962 1,896
(Gain) / loss on disposal of
property, plant and equipment (1) - 6
Fair value adjustment of on financial
assets (41) (20) 24
Share in profit of associate (17) (80) (265)
Other income (180) (126) (285)
Impairment of associate - - 134
Investment income (65) (80) (192)
Interest expense 40 43 87
Write-down of other receivable - - 2,432
Changes in working capital:
Increase in inventories (515) (35) (172)
(Increase) / Decrease in trade
and other receivables (414) 2,126 (191)
Decrease / (increase) in trade
and other payables 461 (912) (1,328)
------- ------- -------
Cash generated from operations (1,863) (885) (5,336)
Net income taxes received 76 631 545
------- ------- -------
Net cash used in operating activities (1,787) (254) (4,791)
------- ------- -------
Cash flows from investing activities
Funds invested in financial instruments (8) (109) (183)
Other income 180 126 285
Dividend received from associate 50 50 140
Purchase of intangible assets (53) (147) (361)
Deferred proceeds from sale of
discontinued operation - - 4,240
Interest and investment income
received 65 80 192
Purchase of property, plant and
equipment (58) (166) (138)
Net proceeds from of sale of
property, plant and equipment 1 - 6
------- ------- -------
Net cash generated / (used) from
investing activities 177 (166) 4,181
------- ------- -------
Cash flows from financing activities
Drawdown of banking facility 1,094 - -
Repayment of loans (75) (75)
Repayments of lease liability (147) (157) (315)
Interest paid (40) (19) (65)
------- ------- -------
Net cash inflow / (outflow) from
financing activities 907 (251) (455)
------- ------- -------
Net decrease in cash and cash
equivalents (703) (671) (1,065)
Cash and cash equivalents at
brought forward 4,087 5,152 5,152
------- ------- -------
Cash and cash equivalents carried
forward 3,384 4,481 4,087
------- ------- -------
Notes to the Interim Report December 2020
1. This interim financial information does not constitute
statutory accounts as defined in section 435 of the Companies Act
2006 and is unaudited.
The comparative figures for the financial year ended 30 June
2020 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the company's
auditors, Crowe U.K. LLP, and delivered to the registrar of
companies. The report of the auditors was (i) unqualified, (ii) did
not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498(2) or (3) of
the Companies Act 2006.
The interim financial information is compliant with IAS 34 -
Interim Financial Reporting.
The accounting policies are based on current International
Financial Reporting Standards ("IFRS"), International Financial
Reporting Interpretation Committee ("IFRIC") interpretations and
current International Accounting Standards Board ("IASB") exposure
drafts that are expected to be issued as final standards and
adopted by the EU such that they are effective for the year ending
30 June 2021. These standards are subject to on-going review and
endorsement by the EU and further IFRIC interpretations and may
therefore be subject to change.
2. Except as described below the accounting policies applied in
these interim financial statements are the same as those applied in
the Group's consolidated financial statements as at and for the
year ended 30 June 2020 and which are also expected to apply for 30
June 2021.
The changes in accounting policy set out below will also be
reflected in the Group's consolidated financial statements for the
year ended 30 June 2021.
IFRS 16: COVID-19 related rent concessions
This amendment introduced a voluntary practical expedient, for
lessees only, which can be applied to rent concessions granted as a
direct result of COVID-19 if certain criteria are met. This is
effective for annual periods beginning on or after 1 June 2020, and
can be applied earlier - see a summary of the key changes.
A number of other amendments to standards which are discussed in
a previous article include IFRS 3: Definition of a Business,
Amendments to IAS 1 & IAS 8: Definition of Material, and
Amendments to IAS 39, IFRS 9 and IFRS 7: Interest Rate Benchmark
Reform - Phase 1.
The Directors have considered those standards, amendments and
interpretations, which have not been applied in the financial
statements but are relevant to the Group's operations, that are in
issue but not yet effective and do not consider that they will have
a material impact on the future results of the Group.
3. This interim report was approved by the board of directors on 26 March 2021.
4. The directors do not recommend payment of an interim dividend
in relation to this reporting period.
5. There were no other gains or losses to be recognised in the
financial period other than those reflected in the Statement of
Comprehensive Income.
6. No corporation tax provision has been provided for the six
months ended 31 December 2020 (2019: nil). As a result, there is no
effective rate of tax for the six months ended 31 December 2020
(2019: 0%).
7. Basic earnings per share are based on the weighted average of
ordinary shares in issue during the half-year of 100,435,744 (2019:
100,435,744).
8. The Group derives revenue from the sale of its POS-GRIP
friction-grip technology and associated products, and licence
income derived from its various licensing agreements. These income
streams are all derived from the utilisation of the technology
which the Group believes is its only segment. Business activity is
not subject to seasonal fluctuations.
9. Property plant and equipment
Tenant Assets under Motor vehicles
Buildings Improvements Equipment construction GBP000 Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
As at 30 June
2019 3,699 716 5,432 - 17 9,864
Additions 41 - 144 - - 185
Disposals - (2) (183) - - (185)
----- ----- ----- ----- ----- -----
As at 30 June
2020 3,740 714 5,393 - 17 9,864
Additions - - 19 39 - 58
Transfers - - 39 (39) - -
Disposals - - - - - -
----- ----- ----- ----- ----- -----
As at 31 December
2020 3,740 714 5,451 - 17 9,922
----- ----- ----- ----- ----- -----
Depreciation
As at 30 June
2019 1,338 466 4,252 - 4 6,060
Charge for the
year 152 61 464 - 3 680
On disposals - (2) (147) - - (149)
----- ----- ----- ----- ----- -----
As at 30 June
2020 1,490 525 4,569 - 7 6,591
Charge for the
year 76 22 155 - 2 255
On disposals - - - - - -
----- ----- ----- ----- ----- -----
As at 31 December
2020 1,566 547 4,724 - 9 6,846
----- ----- ----- ----- ----- -----
Net book value
As at 31 December
2020 2,174 167 727 - 8 3,076
----- ----- ----- ----- ----- -----
As at 30 June
2020 2,250 189 824 - 10 3,273
----- ----- ----- ----- ----- -----
As at 30 June
2019 2,361 250 1,180 - 13 3,804
----- ----- ----- ----- ----- -----
10. Investments
GBP'000
Investment in associate at 30 June
2019 907
Share of profit for the period 265
Dividends received (140)
Impairment of investment (134)
-----
Investment in associate at 30 June
2020 898
Share of profit for the period 17
Dividends received (50)
-----
Investment in associate at 31 December
2020 865
-----
On 14 December 2018 Plexus Ocean Systems Limited acquired a 49%
interest in Kincardine Manufacturing Services Limited ('KMS') for a
consideration of GBP735k plus associated legal fees. KMS is a
precision engineering company which serves the oil and gas
industry. This is viewed as a long-term strategic investment by
Plexus. KMS is based at Sky House, Spurryhillock Industrial Estate,
Stonehaven, Aberdeenshire AB39 2NH
Following the investment Graham Stevens, Plexus' Finance
Director was appointed to the board of KMS. The company remains
under the control and influence of the 51% majority
shareholders.
On 30 June 2020, an impairment review was undertaken. The
investment has been revalued using a profit after tax earnings
model. This has resulted in an impairment charge of GBP134k.
The summary financial information of KMS, extracted on a 100%
basis from the accounts for the year to 31 December 2020 is as
follows:
2020
GBP'000
Assets 2,800
Liabilities 1,621
Revenue 4,517
Profit after tax 444
11. Discontinued operations
Six months Six months Year to
to 31 December to 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Revenue - - -
Expenses - - (2,432)
(Loss)/Profit before tax of discontinued
operations - - (2,432)
I ncome tax credit - - (117)
(Loss)/Profit after tax of discontinued
operations - - (2,549)
12. Share Capital
Six months Six months Year to
to 31 December to 30 June
2020 31 December 2020
2019
GBP'000 GBP'000 GBP'000
Authorised:
Equity: 110,000,000 (June 2020
& Dec 2019: 110,000,000) Ordinary
shares of 1p each 1,100 1,100 1,100
Allotted, called up and fully ----- ----- -----
paid:
Equity: 105,386,239 (June 2020
& Dec 2019: 105,386,239) 1,054 1,054 1,054
----- ----- -----
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END
IR FLFLDVTIRFIL
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