Plexus swings to profit in robust first half

18th Mar 2024 12:36

(Sharecast News) - Oil and gas engineering service provider Plexus Holdings reported a surge in sales revenue in its interim results on Monday, to £5.9m, compared to £0.71m a year ago.

The AIM-traded company also reported a significant turnaround in EBITDA, reaching £3.08m compared to a loss of £1.1m year-on-year.

Operating profit surged to £2.25m for the six months ended 31 December, swinging from a loss of £2.02m, while profit before tax stood at £2.22m, improving from the £2.07m loss a year earlier.

Earnings per share rose to 2.19p from a 2.06p loss.

Despite a slight decrease in cash reserves to £0.83m from £1.14m, Plexus saw a growth in total assets to £22.5m from £17.3m, while total liabilities increased to £7.8m from £3.9m.

Operationally, Plexus reported several significant milestones including the expansion of the value of a specialised subsea project application, an increase in loan agreements with entities related to CEO Ben van Bilderbeek, and the successful completion of the Oceaneering plug and abandonment campaign, resulting in a 70% revenue increase.

Plexus also secured contracts for rental exploration and plug and abandonment projects in the North Sea, bolstering its market presence and revenue streams.

Since the period ended, Plexus announced a £1m-plus contract for specialised equipment and services for multiple plug and abandonment activities in the North Sea.

It also completed a customer-sponsored research and development project aimed at developing an upgraded Tubing Hanger Neck Seal.

Looking ahead, Plexus remained optimistic after its performance for the first half aligned with management expectations.

The company said it expected its full year performance to be in line with current market forecasts.

Notable catalysts contributing to the positive outlook included the anticipated revenue increase from the special subsea project application and the successful IP licensing agreement with SLB, which generated substantial revenue in the first half.

Plexus said it was actively pursuing opportunities in the rental exploration and plug and abandonment sectors, both with existing and new clients.

It also maintained a robust research and development strategy aimed at further enhancing its product suite.

"While the shift to sustainable energy is underway, oil and gas remain vital to the global energy mix, albeit with a growing emphasis on efficiency, safety, and environmental responsibility," said chief executive officer Ben van Bilderbeek.

"Accordingly, Plexus is positioned to play a pivotal role in this revived industry given its ability to prevent and mitigate wellhead related methane leaks at O&G sites.

"Looking ahead, Plexus remains committed to advancing its POS-GRIP friction-grip engineering methodology to align with the energy sector's increased focus on sustainability and regulatory compliance, especially in relation to reducing methane emissions and anticipates broader adoption of our technology across the value chain."

At 1205 GMT, shares in Plexus Holdings were up 8.97% at 17.98p.

Reporting by Josh White for Sharecast.com.