Plexus Holdings reports record interim results

By Amy McLellan

Another six months and another set of record interims for Plexus Holdings, the specialist wellhead engineering group. The AIM-quoted engineering group has reported a seven per cent increase in revenues to £13.5 million for the last six months of 2014, a 14 per cent increase in EBITDA to £4 million and a 28 per cent surge in post-tax profits to £1.97 million. The company has agreed a six per cent increase in the interim dividend.

Plexus, which developed its proprietary POS-GRIP friction grip technology to ensure a safer, more robust and highly efficient wellhead solution, particularly for challenging high pressure/high temperature wells, continues to add to its order book. Contract wins over the second half of 2014 included HP/HT wellhead systems from Det Norske for two wells in the Norwegian North Sea and a series of contract wins from operators on the UKCS, including Centrica and BG Group. In recent months it has also picked up contracts with Shell Brunei and Shell China, further vindication of its decision to build a hub in Asia.

The company is eyeing new product markets, with its long-planned move into the lucrative subsea wellhead market gaining traction as its JIP, which brings together a roll call of some of the biggest names in international exploration, is reported to be making “excellent progress”. The subsea wellhead JIP is now entering its final stages: the building of a prototype single string system started last month and should be ready for display at the SPE Offshore Europe Exhibition and Conference in Aberdeen in September. Plexus hopes to deploy the prototype in the field in 2016.

The company is also developing a HP/HT Tie-Back connector product and its POS-SET Connector™ , which is designed to enable operators to re-establish a connection onto rough conductor casing that has been previously cut above the seabed to facilitate abandonment operations – this will give Plexus an opening into the growing abandonment market that, given the slump in the oil price, may prove an astute move. The scale of the company’s product and market push was reflected in a 94 per cent growth in its R&D spend over the period.

Ben van Bilderbeek, chief executive of Plexus, hailed the “excellent financial performance”. “Our wellhead equipment continues to gain traction with leading international oil and gas majors as it meets the critical safety and performance demands required of wellhead technology across all pressure spectrums,” said the Plexus founder.

Bilderbeek, who invented POS-GRIP, re-iterated the benefits of the technology, which is gaining favour with operators around the world. These include significant cost savings for operators, which can total millions of pounds, as well as delivering a controlled and reversible gripping force, which holds casing hangers and metal seals rigid, thereby protecting seal integrity to ensure long-term safety over the lifetime of a production well and beyond. This, plus the system’s suitability for challenging reservoir conditions, means Plexus is winning repeat business from Big Oil players and expanding beyond its geographic stronghold in the UK North Sea.

Despite the lower oil price, the company demonstrated its confidence in the future, with the Board approving a 6.3 per cent increase in the interim dividend of 0.51p per share.