Shares of Aberdeen-based Plexus Holdings plc, the AIM quoted oil and gas engineering services business, fell about 17% on Tuesday despite the firm saying its revenue increased in the 12 months to June 30, 2024, to £12.7 million from £1.5 million in the prior year.
Plexus also said it made a profit before tax of £2.8 million compared to loss of £4.2 million in the prior year despite what the company called “the current climate of negativity towards offshore oil and gas.”
Plexus Holdings CEO Craig Hendrie said: “This return to profitability is due to an exceptional licence deal and a large special project, in addition to progress made in the underlying revenue of the core business of Jack-up rental wellheads.
“The conclusion of the $5.2m licencing deal to SLB in December 2023 was a welcome cash boost, which also enabled us to begin consolidating Plexus’ remaining products and licence rights into a new business direction.
“This strategy builds upon our long-standing success in the Jack-up wellhead market while adapting to the changing trends in the global offshore oil and gas drilling market. Notably, it addresses the North Sea’s shift from traditional drilling to Carbon Capture Storage (CCS) and Plug and Abandonment (P&A) projects.
“The £8m major rental contract has been a highlight as it has combined Plexus’ POS-GRIP Technology and ‘HG’ Seals deployed in a subsea application for P&A work, whilst also heavily supported by its specialised engineering capability. Once this project is completed, it will free up resources to pursue other similar work.
“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 HG-R production wellhead remediation technology, HG Trees, the P&A 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.
“In closing, we recently announced changes in the Plexus Board, and as the new CEO, I would like to thank Ben van Bilderbeek and Graham Stevens for their contribution and leadership and look forward to working with Mike Park and Stas van Bilderbeek as we build the Company, our technology and products towards an exciting future.”