Plexus Holdings PLC on Tuesday said it has swung to annual profit during its 2024 financial year despite a rise in costs, following increased momentum in contract revenue.
The Aberdeen-based oil and gas engineering services company swung to a pretax profit of £2.8 million in the financial year that ended June 30, from a loss of £4.2 million the year before. Revenue multiplied to £12.7 million from £1.5 million last year.
Cost of sales increased more than sevenfold to £3.5 million from £400,000 last year, and administrative expenses increased 5.7% to £5.6 million from £5.3 million.
It said the return to profitability was due to the conclusion of a $5.2 million licencing deal with Schlumberger Ltd in December 2023; the value of a ‘major’ but unspecified rental contract increasing to around £8 million from around £5 million; and progress made to the underlying revenue of its core Jack-up rental wellhead business.
Plexus said it was optimistic for future growth, despite the ‘current climate of negativity’ towards offshore oil and gas.
Shares in Plexus fell 18% to 11.11 pence each in London on Tuesday afternoon.
Plexus also said on Tuesday that the loan notes issued in October 2022, which were intended to raise £1.6 million, have provided the company with the additional working capital it sought to capitalise on an increasing pipeline of market opportunities. The loan notes had a two-year term, and Plexus has extended the maturity date for the repayment of its remaining £700,008 in loan notes to April 19, 2025.
Craig Hendrie was appointed new chief executive officer of Plexus in July, alongside Ben van Bilderbeek as the new chair.
Hendrie said: ‘The strategy now is to focus on short-term growth in Jack-up rental revenue, to maintain profitability, and to establish a diversified mix of income that can be more resilient to future cycles of the energy market and local government policies. This solid base will allow us to incubate and develop more of the underlying value in applications of POS-GRIP technology that Plexus retains, including [leak-proof replacement tubing hanger neck seal assembly] production wellhead remediation technology, HG Trees, the [plug & abandonment] market, and subsea infrastructure, such as the Python subsea wellhead system.
‘Our recent achievements, including securing a major contract for subsea wellhead rental equipment and specialised P&A services for a North Sea operator, underscore Plexus’ commitment to innovation and growth. By focusing on expanding our Exact rental wellhead inventory and forging strong global partnerships, we are not only advancing our technology but also positioning ourselves to deliver exceptional value to our shareholders. The momentum we are building is the beginning of an exciting new chapter for Plexus.’
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