TIDMPOS
RNS Number : 0418T
Plexus Holdings Plc
22 November 2021
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
22 November 2021
Plexus Holdings plc ('Plexus' or 'the Group')
Preliminary Results
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 preliminary results for the
year ending 30 June 2021.
FINANCIAL AND CORPORATE OVERVIEW
Following the sale in 2018 of Plexus' wellhead exploration
equipment services business for Jack-up applications ('the Jack-up
Business') to FMC Technologies Limited ('TFMC'), a subsidiary of
one of the leading oil and gas service and equipment companies
TechnipFMC (Paris:FTI) (NYSE:FTI), the year-end results and
comparative prior year period have been reported as required on a
continuing and a discontinued operations basis.
-- Continuing operations sales revenue GBP2,017k (2020: GBP525k)
o Discontinued operations sales revenue GBPnil (2020: GBPnil)
-- Adjusted EBITDA on continuing activities GBP2.69m loss (2020: GBP3.08m loss)
-- Continuing operations operating loss GBP4,546k (2020: GBP5,681k)
o Discontinued operations operating profit GBP20k (2020: loss GBP2,432k)
-- Continuing operations operating loss after tax GBP4,110k (2020: GBP4,058k)
o Discontinued operations loss after tax GBP392k (2020: GBP2,549k loss)
-- Basic loss per share from continuing activities 4.09p (2020: 3.92p loss)
o Basic loss per share from discontinued activities 0.39p (2020: 2.47p earning)
-- Cash and cash equivalents of GBP5.18m (2020: GBP4.09m)
-- Bank borrowing of GBP2.04m (2020: nil) relating to a drawn down Lombard facility
-- The Group has GBP3.04m invested in financial assets (2020: GBP3.0m)
OPERATIONAL OVERVIEW
Building a portfolio of licensing and direct sales revenue
streams centred around establishing Plexus' leak-proof POS-GRIP(R)
wellhead equipment as the go-to technology for energy markets
whilst making a genuine contribution to the oil and gas industry's
ESG and NetZero goals by championing "through the BOP" (Blow-out
Preventer) designs, and lifetime leak-proof wellhead metal-to-metal
sealing systems.
Licence Agreements
New Licence Agreement
-- November 2020 - non-exclusive licence signed with Cameron
International Limited ('Cameron') for POS-GRIP surface production
wellhead technology - Cameron is a group company of Schlumberger,
the world's leading oilfield services provider
o Agreement allows Cameron to use the Company's POS-GRIP and
"HG" metal to metal seal method of engineering for the development
of conventional and unconventional oil and gas surface
wellheads
o Currently collaborating with Cameron on the development of an
inaugural low-cost wellhead design incorporating the POS-GRIP
method of engineering
Existing Licence Agreements
-- Continued focus on IP and R&D to support licensees and
generate future revenue through royalties and new Plexus
products
-- Existing IP Collaboration Agreement in place with TFMC
-- In Russia, strategy centred on supporting licensing partner
Gusar's ongoing efforts to pursue contract opportunities for
POS-GRIP Jack-up exploration rental wellheads
o Following successful installation of first wellhead in 2019
under inaugural contract secured by Gusar with global energy giant
Gazprom, a planned second well did not go ahead in 2020 due to
COVID-19
o Drilling programmes have begun to resume this year, which
potentially will deliver further revenues under this contract
New markets
-- Active targeting of new markets in line with strategy to
deliver safe, reliable and cost-effective solutions to the energy
industry resulted in post period end re-entry into the Jack-up
Exploration (Adjustable) Wellhead rental business
o August 2021 - Agreement with Cameron will see Exact-15
("Exact") system rental wellhead inventory and Centric-15
("Centric") mudline system equipment transferred to Plexus -
Cameron to provide manufacturing support and assistance in sales
lead generation in return for royalty fee
o Exact is a 'through the BOP' ("Blow-out Preventer") wellhead
system originally designed by Plexus that delivers improved rig
personnel safety by enabling the BOP to be kept in place during
operations and thereby importantly reducing the risk of blow
outs
o Plexus intends to build on the historic success of the Jack-up
Business which the Company sold to TFMC in 2018
Direct sales activity
-- Focused on securing orders for surface production wellheads,
particularly in the UK and European North Sea regions
o Surface production wellhead system order awarded by Spirit
Energy in July 2020 for North Sea
o Participating in the tender process for a range of projects
which have been delayed due to COVID-19 associated economic
downturn
Post period end
-- July 2021 - Plexus received London Stock Exchange's Green
Economy Mark in recognition of contributing to the global green
economy, and demonstrating alignment with Net Zero and ESG
principles
"There were a number of positive milestones during the year - a
near quadrupling in full year revenues to GBP2 million; the signing
of a non-exclusive licensing agreement with top tier supplier
Cameron for our POS-GRIP surface production wellhead technology;
and the award of a surface production wellhead order from Spirit
Energy. However, I am particularly proud of one more - Plexus
receiving the London Stock Exchange's Green Economy Mark in July
2021 in recognition of its contribution to the global green
economy. This achievement best sums up what the Company is about,
what we are looking to achieve, and the important role our green
leak proof technology can play in the energy transition as the
focus on ESG and NetZero goals intensifies. This is particularly
relevant in view of this year's COP 26 climate change conference in
Glasgow where the reduction of methane emissions is high on the
agenda.
"What we are about. Plexus is the developer and owner of
POS-GRIP, a friction grip method of engineering, which has been
deployed on over 400 wells by blue-chip operators all around the
world. Our wellhead equipment has raised the bar in terms of gas
proof sealing performance, safety, and reliability not only out in
the field but also in testing, both in-house and externally. Apart
from offering safer "through the BOP" (Blow-out Preventer)
operating procedures, POS-GRIP can also deliver true and verifiable
leak-proof performance during the life of a well and beyond where
patented HG(R) metal-to-metal seals are used. This is achieved by
applying an external force to squeeze a housing until it engages
with the components inside (casing or tubing hangers in wellheads).
This generates a gripping force that eliminates assembly clearances
and activates the "HG" seals, delivering what is believed to be a
lifetime leak-proof metal seal solution. As the process is
controlled by hydraulic pressure and occurs within the elastic
limits of the material, the connection is reversible. Compare all
this with rival 'conventional' systems, which typically comprise a
far higher number of individual components - the more components,
the more chance there is for seal integrity to be compromised and
for individual pieces to succumb to fretting/movement caused by
temperature and pressure variations, requiring in some cases
expensive 'shut-ins' and regular seal maintenance.
"What we are looking to achieve. Having set a higher standard in
terms of wellhead performance, reliability, and safety and by
offering operators considerable cost savings via reduced
installation and downtime, we are looking to establish POS-GRIP as
the go-to leak-proof technology for the energy sector as a whole.
Wherever metal to metal wellhead sealing and Tie-Back capabilities
are required, POS-GRIP can deliver a leak-proof solution whether at
the surface or subsea. Existing wells: the POS-GRIP "HG" Tubing
Spool delivers leak-free performance at the "HG" seals for the
entire field life, eliminating the requirement for any annual
maintenance, which in turn generates substantial savings for
operators. New wells: used on over 400 wells, Plexus' exploration
and production wellheads are proven to deliver superior performance
and cost savings. Abandoned wells: our POS-SET Connector
facilitates abandonment operations by delivering a best-in-class
solution to re-establish a connection onto rough conductor casing
that has been previously cut above the seabed - in full testing,
the POS-SET Connector achieved 80% of the bending and tensile
strength of the parent pipe, a significantly superior capability
when compared to conventional alternatives. Renewables: focus is
being given to develop POS-GRIP applications for the renewables
sector, including geothermal, hydrogen and nuclear. Such
initiatives can also extend to the important gas storage sector
whether for gas, CO2 or hydrogen. Here the need for equipment that
can offer decades of leak-proof integrity is obviously critical,
both for commercial and green reasons, and especially where
equipment is inaccessible subsea. Clearly, there is no point in
using conventional equipment that may have been designed to have a
lifespan of 25 years, when a storage facility may be required for
100 years or more.
"The important role we can play in the energy transition. EU:
net zero greenhouse gas emissions by 2050. US: 50-52 percent
reduction from 2005 levels in economy-wide net greenhouse gas
pollution by 2030. China: peak carbon emissions by 2030 and net
zero by 2060. There can be no doubt an energy transition is
underway. Hitting the above self-imposed targets however will
require an enormous effort and considerable will, particularly when
one considers that the energy transition is set to coincide with a
period of sustained energy demand growth - in its annual
International Energy Outlook report, the US Energy Information
Administration states, 'If current policy and technology trends
continue, global energy consumption and energy-related carbon
dioxide emissions will increase through 2050 as a result of
population and economic growth.' The report's accompanying
presentation attaches a number to the forecast, 'By 2050, global
energy use increases nearly 50%.'
"Renewables will not on their own be able to meet the forecast
rise in energy demand. The EIA report goes on to say that while
renewables are expected to become 'the primary source for new
electricity generation...oil and natural gas production will
continue to grow...' Liquid fuels will therefore have to play a
major role in energy generation for decades to come. This does not
mean, however, that a rise in harmful carbon emissions has to be a
given. The oil and gas industry is in a position to take meaningful
steps to satisfy rising demand for energy while at the same time
reduce its carbon footprint. The solution is centred around natural
gas, the cleanest fossil fuel by far in terms of carbon emissions
when combusted. At least that is the case in the laboratory. In the
real world, the benefits to the environment from using natural gas
are less clear cut as by allowing harmful emissions, notably
methane which comprises circa 80% of natural gas, to escape into
the atmosphere from leaky equipment, the advantages of natural gas
over dirtier fossil fuels, such as coal, are largely negated. This
is particularly the case because methane is estimated to be up to
circa 80 times more potent in relation to climate change than
carbon dioxide. If the world is serious about reaching net zero,
and if all that additional demand for energy is to be satisfied,
eliminating harmful emissions from gas operations from the well
site, and in particular the wellhead all the way through to the
consumer, is critical.
"For that to happen, a change of mindset among operators is
required. The tried but no longer wholly trusted approach of
monitoring hardware for leaks and, when one is detected, taking
remedial action which cannot be guaranteed to be effective, is no
longer sufficient. Preventing leaks from happening in the first
place by ensuring leak-proof equipment is deployed whenever and
wherever possible across the supply chain is surely what is
required. Prevention after all is the best medicine and by
delivering a leak-proof POS-GRIP seal wellhead solution, POS-GRIP
is the best medicine for a well site. As Benjamin Franklin famously
said in 1736 "An ounce of prevention is worth a pound of cure". If
the industry changes its ways and takes action to eliminate methane
leaks from the supply chain, the prize is potentially huge, not
just in terms of value generation for stakeholders simply by
avoiding economic gas loss, but also in terms of making meaningful
inroads towards achieving carbon neutrality and combatting climate
change. Leak prevention promises to set off a virtuous circle for
both the industry and the environment: eliminating leaks from
operations would bolster the argument for natural gas to be
formally classified as a transition fuel, which in turn would
likely spur much needed investment in gas exploration and
production activity, resulting in higher levels of supply to meet
the strong growth in demand for energy expected during the
transition.
"Gas supply is of course highly relevant to today's markets, and
I believe will be a key component of Plexus' future success. There
are many reasons behind this year's extraordinary spike in global
gas prices to unprecedented levels, but years of underinvestment
have contributed to today's keenly felt shortages. The need for
more gas exploration drilling has been a central tenet of ours for
some time and it was in anticipation of this that we signed a
second agreement with Cameron post period end in August 2021 to
re-enter the jack-up exploration rental wellhead market, a market
we know well having run our Jack-up Business successfully for many
years before selling it on to TFMC in 2018. This latest Cameron
agreement involves Plexus acquiring and marketing proven wellhead
technology which we pioneered years ago and are therefore extremely
familiar with. Together with the agreement we signed with Cameron
for our POS-GRIP surface production wellhead equipment in November
2020, Plexus is well on the road to becoming the provider of
enabling technology for the oil and gas industry that we set out to
build.
"Our post period end July 2021 announcement stated that the LSE
Green Economy Mark 'is designed to recognise both pure-play green
technology companies, as well as those across all industries that
make significant contributions to the transition to a sustainable,
low carbon economy...For over 30 years, Plexus has been protecting
the environment, initially with its 'through the BOP' (Blow-out
Preventer) wellhead designs, and subsequently with its POS-GRIP(R)
proprietary metal-to-metal leak-proof wellhead sealing system.'
Despite being in the business for many years, we believe our work
is only half done. We have developed proven proprietary technology
to support the transition to a sustainable low carbon economy. Now
we need the industry to embrace our equipment wholeheartedly to
enable us to finish the job, and by doing so this would, in my
opinion, evidence 'real washing' as opposed to 'green washing'. As
the respective agreements we have in place with both Cameron and
TFMC demonstrate, tier one suppliers recognise the value of our
technology. Now is the time for the industry to do the same."
SUMMARY OF RESULTS FOR THE YEARED 30 JUNE 2021
2021 2020
GBP'000 GBP'000
Revenue (continuing operations) 2,017 525
Adjusted EBITDA (continuing operations) (2,692) (3,076)
Operating Loss (continuing operations) (4,546) (5,681)
Loss after taxation (continuing operations) (4,110) (4,058)
Loss profit after taxation (discontinued
operation) (392) (2,549)
Loss after taxation (combined) (4,499) (6,607)
Basic loss per share (pence) (continuing
operations) (4.09p) (3.92p)
Basic (loss) / earning per share (pence)
(discontinued operation) (0.39p) (2.47p)
For further information please visit www.plexusplc.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795 6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795 6890
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Derrick Lee Cenkos Securities PLC Tel: 0131 220 9100
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Pete Lynch Cenkos Securities PLC Tel: 0131 220 9772
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Isabel de Salis St Brides Partners Ltd Tel: 020 7236 1177
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CHAIRMAN'S STATEMENT
Business progress
With the impact of the Covid-19 pandemic on the energy market
beginning to stabilise, the Company achieved a material increase in
revenues in the 12 months to 30 June 2021 amounting to GBP2,017k
(2020: GBP525k). Significantly, the global outlook on the
requirement for further oil and gas development in the coming years
is becoming more positive, especially for operators and products
which manage to achieve this in the most environmentally conscious
and responsible ways. There is a growing recognition that gas has
an important transitional role to play as the world moves from
traditional hydrocarbon energy sources to greener alternatives such
as solar, wind, tidal, hydrogen, and even nuclear, but that this
has to be done as cleanly as possible, which is where leak free
equipment, and in particular wellheads and connectors, are so
essential.
The Company's goal is to add a diverse set of revenue streams to
its portfolio: the licence agreement with Cameron for the first
time brings a focus to the US and Middle East markets and
complements the licence already in place in Russia with our partner
Gusar, Plexus' organic growth in the local market in the UK and the
North Sea, and specialised projects worldwide. The post period end
re-entry into the Jack-up exploration rental wellhead business adds
another dimension to this, especially as it is a market that has
already been successfully tried and tested by Plexus in the past,
and where a good reputation was established.
The August 2021 cooperation agreements with Cameron allows
Plexus to immediately enter the Jack-up exploration rental wellhead
market, with the proven Exact and Centric wellhead and mudline
suspension products. Plexus knows these products well, as they were
initially invented and developed by Plexus in the 1980s, before
being acquired by Cameron in 1996. The Exact 15 wellhead was the
first through the BOP wellhead to be introduced for Jack-up
drilling, and with some modernisation and additions to the product
range over the years, together with Plexus' reputation for agility
and customer focus on a per well basis, there is significant
potential for rapid expansion of this business and revenue
stream.
Beyond exploration activities, the Board remains convinced that
POS-GRIP Technology is a key enabler for the surface production and
subsea wellhead markets, especially with the increasing pressure of
Net Zero and requirements for positive ESG (Environmental, Social,
and Governance) credentials. Not only can POS-GRIP deliver the
technically best solution, which makes it the safest and highest
integrity solution - it can also become the most cost-effective
solution. When life cycle costs are taken into account, Plexus'
technology can be significantly better than conventional solutions.
With a focus on greener, leak-free, and more efficient operations,
operators are increasingly looking to embrace the full potential of
products they specify in their procurement strategies. Plexus
believes that such considerations should extend beyond simply
looking at Capex and Opex costs but should extend to Totex (total
capital and operating costs over the life of a well), which is
where leak free equipment comes into its own as a result of
minimising the need for intervention and lost production down
time.
This year saw signs of a pick-up in activity in Russia, and it
is hoped that there will be a resumption of Jack-up exploration
drilling opportunities for Gusar, our licensee for Russian and the
CIS with Gazprom. This would build on the successful POS-GRIP
wellhead deployment for a Gazprom offshore gas shallow water
exploration well that took place in the prior year. We are hopeful
that this bodes well for significant further potential for Gusar
and its developing relationship not only with Gazprom, but also
with other local Russian operators.
Plexus' 49% shareholding investment in Kincardine Manufacturing
Services Limited ('KMS') resulted in the receipt of GBP100,000
dividends in the period despite KMS revenues and profits being
adversely impacted by the Covid pandemic related downturn, which
resulted in a scaling back of staff and operations. However, on a
positive note, KMS is seeing a pickup in activity and expects 2021
going into 2022 to deliver a significant uplift in revenues as its
order book continues to build. It is anticipated that dividend
payments will continue, and hopefully at an increased level.
Plexus' primary and core strength is its patented POS-GRIP
Intellectual Property ('IP'), together with the broad family of
products and associated equipment, which is enabled by this
technology. Although individual product patents inevitably expire
over time, importantly continuations and ongoing R&D form a key
part of our ongoing IP strategy, and of course it is the body of
additional registered IP, including new apparatus and method
patents which we file, together with unregistered and confidential
test results, know-how and experience which give us the ability to
continue to supply uniquely different friction grip technology.
Overview
Plexus is a wellhead technology business, but unlike all other
wellhead companies, our value is underpinned by POS-GRIP and
associated and derived proprietary products. Where others compete
on a volume manufacturing basis and fight for margins with very
similarly conventional products, Plexus' POS-GRIP proposition is
truly different and delivers enhanced value to customers. The
Company has demonstrated that its products perform and can be
profitable without a low-cost volume manufacturing base not only
organically, but also by adopting a licensing model to reach
markets that Plexus cannot naturally access.
Plexus has already demonstrated significant commercial success
with POS-GRIP in the Jack-up exploration drilling wellhead market,
and we now believe that the time is right for similar success in
the Production Wellhead market - both surface and in due course
subsea. The Production Wellhead licensing deal with Cameron will
shortly see the world's largest oilfield service provider begin to
market products using POS-GRIP. Meanwhile there is also renewed
urgency in Plexus' direct sales markets, as operators react to the
increase in energy prices, together with demands for improved leak
free and maintenance free products as part of Net Zero goals,
particularly in relation to methane. Plexus also continues to see
significant future potential for the patented POS-GRIP Python
wellhead in the subsea market.
With significant experience and a profitable track record in the
Jack-up exploration wellhead market, Plexus' return to this sector
using Cameron's tried and tested through the BOP products is an
opportunity to expand our revenue base further as well as to
re-engage with customers at the exploration stage of their
development cycle.
Staff
On behalf of the Board, I would once again like to thank all our
employees for their dedication and hard work during another very
challenging year. While ongoing Covid lockdown measures where
appropriate and working from home have made online video meetings
the norm, there has continued to be pressure on the industry and
employment uncertainty. We are in the process of reconsolidating
all Aberdeen staff back into the Plexus House facility, which will
allow a transition back to more frequent face to face meetings.
Having weathered this difficult period, I am sure that the coming
developments and increase in activity will be positive for our
staff, and for future employment opportunities within Plexus.
Outlook
The recent downturn in the oil and gas sector, which was
exacerbated by the global Covid-19 pandemic and the resultant fall
in economic activity, seems to be nearing the end as we start to
see a cycle of rapidly rising oil and gas prices. It is now obvious
there will continue to be demand for hydrocarbons for decades to
come, particularly gas although the focus will be increasingly on
extracting these resources in the most environmentally responsible
way possible, which in the case of oil and gas drilling should
logically mean specifying leak-free equipment whenever and wherever
possible. We are far from being the only ones to believe this.
The below extract taken from the website of the UK's Oil and Gas
Authority is not only in line with this view, but it also
highlights the important role technology must play if the sector is
to contribute to the NetZero energy transition whilst meeting ESG
goals:
"The Oil and Gas Authority's ('OGA') role is to work with the
industry and government on economic recovery of the UK's oil and
gas resources, whilst also supporting the move to net zero carbon
by 2050. Our ambition is to be a world-leading authority setting
the framework for a sustainable and competitive UK oil and gas
industry.
"We believe that economic recovery of oil and gas is not in
conflict with the transition to net zero carbon and that the
industry has the skills, technology and capital to help unlock
solutions to help the UK achieve the net zero target. All forecasts
show that oil and gas will remain a vital part of the UK's energy
mix as we move towards net zero".
In terms of the industry having the skills and technology, we
wholeheartedly concur with the OGA: our POS-GRIP enabled equipment
can prevent leaks and reduce maintenance at the wellhead; our
re-entry into the Jack-up exploration market via Cameron's 'through
the BOP' ("Blow-out Preventer") wellhead systems will enable us to
deliver improved rig personnel safety by allowing the BOP to be
kept in place during operations and thereby cutting the risk of
blow outs, and in particular 'super-emitters' which can leak
methane in kilotons.
Reducing the risk of super-emitters neatly encapsulates the
argument for using technology to prevent harmful emissions
occurring in the first place. So too does the specifying and
installation of leak-free wellheads for long term production, as
well as gas storage whether gas, CO2 or hydrogen. Prevention is a
win-win for all. For operators it complements the status quo that
is monitoring and potentially having to administer time consuming
and costly cures. For the environment it helps avoid emissions
incidents which in the case of 'super-emitters' are believed to
account for 75% of all methane emissions.
Interestingly, there is a growing recognition that the move to
NetZero does not need to be all about 'grand gestures' which can
arguably create too many bumps in the road for a smooth transition.
An opinion piece in the Financial Times in September was headlined
as "Forget COP26 boasts - decarbonising takes thousands of tiny,
boring steps", and that "Truly green companies redesign their
products rather than buying offsets or planting trees". This was
clearly intended to start a debate, and Plexus would certainly
subscribe to the concept in relation to the oil and gas supply
chain that every piece of equipment should be the best it can be,
especially in relation to leak-proof performance and long-term
integrity. We believe that Plexus can meet such a challenge,
particularly in relation to our wellheads and connector
applications.
This increased scrutiny and targeting of methane emissions gives
us confidence that as the oil and gas market starts to recover and
subsequent investment by operators begins to gain momentum, we
should see those sales prospects for our leak-proof solutions that
had been on hold for the duration of the downturn begin to make
progress. As well as new opportunities arising in oil and gas, we
see opportunities arising in alternative energy markets and
applications, such as geothermal and gas storage. Even if activity
only partially returns, Plexus requires only a small percentage of
market share to see significant growth in the specialised wellhead
market, as well as the considerable growth and market share
potential arising from the licence agreements we have in place with
Cameron.
Following the two Cameron deals, the focus for the year ahead
will be to use these, along with our own organic sales activities,
as a platform with which to capitalise on both the recovery in the
global economy and also the need to satisfy the world's clear need
for the ongoing recovery of hydrocarbons, particularly cleaner
natural gas, in a responsible and sustainable manner, as evidenced
by our gaining the LSE "Green Economy Mark". Taking into
consideration standard industry lead times, this would suggest
shareholders will start to see the benefits of the IP-led strategy
we have put in place gain traction in the 2022/2023 financial
year.
In conclusion, challenging times are often generators of
significant change. We feel that now is the time for POS-GRIP
technology to come into its own. The combination of POS-GRIP's
operational, environmental, and financial benefits ought to
resonate strongly with companies operating across the energy
sector. The Board is confident that there will be an increased
focus on equipment integrity and guaranteed leak-free operation,
and that this will lead to the further monetisation of our POS-GRIP
technology through licensing and direct sales which in turn will
lead to growth and value for our shareholders.
J Jeffrey Thrall
Non-Executive Chairman
19 November 2021
PRINCIPAL ACTIVITY
The Group markets oil and gas industry wellhead and associated
equipment that utilises its patented friction grip method of
engineering known as POS-GRIP Technology. This involves squeezing
one tubular member against another within the elastic range to
effect gripping between the components, and can also set metal to
metal seals, known as "HG" Seal Technology. This superior method of
load support and sealing for wellheads offers several important and
unique advantages to operators, particularly for HP/HT surface and
subsea production applications, and can include improved technical
performance, improved integrity of metal-to-metal seals,
significant installation time savings, reduced operating and
maintenance costs and enhanced safety.
The Company has developed a range of products based on this
technology, and is focused on pursuing surface production,
abandonment, subsea and geothermal wellhead opportunities, as well
as connectors and the subsea market.
In addition to Plexus' organic activities, the Company also
pursues licencing opportunities, and in November 2020 granted a
non-exclusive licence for certain surface wellhead applications to
Cameron International Limited, a Schlumberger group company to
enable Cameron to use the Company's technology for the development
of conventional and unconventional oil and gas surface production
wellheads. Cameron has since been working on developing its own
surface wellhead products incorporating POS-GRIP technology.
Following successful testing of its new POS-GRIP products, Cameron
will begin to market these products, which should lead to a royalty
revenue stream for the Company.
As the relationship with Cameron develops, it is anticipated
that further opportunities will arise. This has already resulted in
Plexus entering a cooperation agreement with Cameron in August
2021, which gives Plexus access to Exact -15 system wellhead
inventory, and Centric-15 mudline system suspension products. This
enables the Company to return to the Jack-up Exploration
(Adjustable) Wellhead market where wellheads are rented for the
duration of the well, rather than sold with proven technology.
Cameron will provide manufacturing support and assist in sales
leads generation in return for a licence royalty fee.
The Company retains the right to pursue Jack-up exploration
rental wellhead related business with POS-GRIP products in Russia
and the CIS where it has existing licence agreements with LLC Gusar
and CJSC Konar.
FINANCIAL RESULTS
Statement of Comprehensive Income
Revenue
Continuing revenue for the year was GBP2,017k, an increase from
GBP525k in the previous year. The increase in continuing sales
revenue is a result of operational project work taking place during
the year compared to none in the prior year, with the main
component being licensing income.
Margin
Gross margin on continuing operations decreased to 47.3%
(compared to 57.1% in the previous year). The decrease in margin is
largely driven by a change in the sales mix, with a significant
portion of the prior year revenue including royalty income which
has no associated cost of sale.
Overhead expenses
Continuing activities administrative expenses have decreased
when compared to the prior year with expenditure of GBP5.50m (2020:
GBP5.98m). Within this total, the continuing salary component
remained the largest at GBP2.79m compared to GBP2.90m in the prior
year.
Adjusted EBITDA
The Directors use, amongst other things, Adjusted EBITDA on
continuing operations as a non-GAAP measure to assess the Group's
financial performance. The Directors consider Adjusted EBITDA on
continuing operations, which approximates the operational cash
generated by, or used in the business, to be the most appropriate
measure of the underlying financial performance of the Group in the
period.
Adjusted EBITDA on continuing operations for the year was a loss
of GBP2.69m, compared to a loss of GBP3.08m in the previous year.
Adjusted EBITDA on continuing operations is calculated as
follows:
2021 2020
GBP'000 GBP'000
Operating loss (4,546) (5,681)
Add back:
-Depreciation 482 680
-Amortisation 1,219 1,216
Share in (loss) / profit of associate (77) 265
Fair value adjustment on financial
assets and investments 19 159
Other income 211 285
----- -----
Adjusted EBITDA on continuing operations (2,692) (3,076)
------- -------
Loss Before Tax
Loss before tax on continuing operations of GBP4.37m compared to
a loss in the prior year of GBP5.05m. The loss on discontinued
operations was GBPnil compared to a loss of GBP2.55m in the prior
year.
Tax
The Group shows a total income tax charge of GBP0.15m for the
year compared to a tax credit of GBP0.87m for the prior year. The
income tax charge has been split between continuing activities
(GBP0.26m, 2020: GBP0.99m) and discontinued activities (GBP0.41m
charge, 2020: GBP0.12m charge). The total income tax charge for the
year is driven by the receipt of the deferred consideration from
TFMC.
Investments
In December 2018 Plexus acquired a 49% shareholding in
Kincardine Manufacturing Services Limited ('KMS'), for a
consideration of GBP735k plus associated legal fees of GBP50k. At
the year-end a share in loss of associate of GBP77k (2020: profit
GBP265k) has been recognised. The loss in the period has been
driven by a reduction in business during the peak of the Covid
pandemic Following an impairment review of the investment overhead
expenses include an impairment charge of GBPnil (2020:
GBP134k).
EPS
The Group reports basic loss per share on continuing activities
of 4.09p compared to a loss per share of 3.92p in the prior year.
The basic loss per share on discontinued activities of 0.39p,
compared to a loss per share of 2.47p in the prior year.
STATEMENT OF FINANCIAL POSITION
Intangible Assets and Intellectual Property ('IP')
The net book value of goodwill and intangible assets was
GBP9.64m, a decrease of 6.7% from GBP10.33m last year. This
movement represents investment of GBP0.24m less the annual
amortisation charge of GBP0.92m.
Plexus owns an extensive range of IP which includes many
registered patents and trademarks across a number of jurisdictions,
and actively works to develop and protect new POS-GRIP methods and
applications where deemed commercially advantageous to do so. In
addition to registered IP, Plexus has developed over many years a
vast body of specialist know-how in relation to the POS-GRIP
friction grip method of engineering and related activities.
The Directors have considered whether there have been any
indications of impairment of its IP and have concluded, following a
detailed annual asset impairment review, that there is no evidence
of impairment. Therefore, the Directors consider the current
carrying values to be appropriate.
Research and Development ('R&D')
R&D expenditure including patents decreased from GBP0.36m in
2020 to GBP0.24m in 2021. Continued investment as and where
necessary in R&D demonstrates the Group are protecting,
developing, and broadening the range of proprietary POS-GRIP
friction-grip method of engineering applications and related
IP.
Tangible Assets
The net book value of property, plant and equipment including
items at the year-end was GBP2.96m compared to GBP3.27m last year.
Capital expenditure on tangible assets decreased to GBP0.17m
compared to GBP0.19m last year.
Cash and Cash Equivalents
Net cash at the year-end was GBP3.14m (cash and cash equivalents
of GBP5.18m less the bank Lombard facility of GBP2.04m) compared to
net cash of GBP4.09m (cash and cash equivalents of GBP4.09m with no
borrowing - in the prior year reflecting a net cash outflow for the
year of GBP0.95m (net increase in cash of GBP1.09m per Statement of
Cash Flows plus net increase in bank borrowings of GBP2.04m).
The increase in bank borrowing represents GBP2.04m which has
been drawn down on a Lombard facility.
It should also be noted that the Group has financial asset
investments with a value of GBP3.04m (2020: GBP3.00m) at the
reporting date. These investments are included in non-current
financial investments in the statement of financial position.
The expected future cash inflows and the cash balances held are
anticipated to be adequate to meet current on-going working
capital, capital expenditure, R&D and project related
commitments.
Dividends
The Company has not paid any dividends in the year and does not
propose to pay a final dividend at this time. Whilst the Company
remains committed to distributing dividends to its shareholders
when appropriate, the Directors believe that it is prudent to
consider the payment of dividends in light of the ongoing capital
and operational requirements of the business.
OPERATIONS
Progress has continued during the year with the Company's
strategy to build a portfolio of revenue streams based on its
POS-GRIP technology and associated products and services.
The Company's main focus continues to be the marketing of its
POS-GRIP-enabled products and supporting licensees of the
technology. Plexus continues to supply surface production wellheads
and is also pursuing supplemental business opportunities relating
to well abandonments and decommissioning, which are anticipated to
be growth areas as the North Sea's older producing oil and gas
fields come to the end of their lives.
Licensing opportunities remain a key strategy for the Company.
The markets with the most potential are thought to be in
geographical locations and low-cost volume markets that Plexus
cannot reach. Important progress was made during the financial year
with the conclusion of a licensing deal with Cameron, a division of
Schlumberger in November 2020. The non-exclusive licence allows
Cameron to use POS-GRIP technology in a specific range of
conventional and unconventional oil and gas surface production
wellhead applications. Plexus has since been working with Cameron
to develop Cameron products incorporating the Plexus technology,
and it is anticipated that Cameron will begin start marketing these
products in the first quarter of calendar year 2022 after
successful protype testing and qualification.
Plexus continued to invest in R&D during the year, albeit it
at a lower level than prior years in reflection of reduced
activity, and the fact that Plexus' product portfolio is well
developed. Nevertheless, R&D remains an important operational
activity and further develops the value of our IP and ability to
extend the range of applications of POS-GRIP technology. Innovation
in the oil and gas industry continues to be an essential part of
developing both cost saving initiatives and ever safer drilling
methods, particularly in relation to greener leak-proof
technologies and equipment, and the Board is confident that Plexus
can continue to play an important role in delivering such solutions
whilst raising wellhead standards to a level that conventional
technology cannot reach, such as passing test standards equivalent
to those used for premium couplings.
Staff at the end of June 2021 (excluding non-executive
directors) comprised of 33 employees, including 1 international
employee, which compared to a weighted average total of 33 in the
current year and 34 in the prior year.
The OPITO accredited competency system was updated after the
disposal transaction to TechnipFMC in order to better reflect
production equipment and to enhance the robust assessment of
employees in safety critical roles. A thorough review of all
standards across the system took place which resulted in a complete
restructure and rework of the workshop and field service technician
scopes. The revised system underwent monitoring audits in 2019 and
2020 and post year end in September 2021 and resultantly the
Company has successfully maintained its OPITO approval throughout
this period.
As part of the continuing commitment to the health and wellbeing
of employees, the Healthy Working Lives programme aims to encourage
habits of wellbeing and inspires individuals to take responsibility
for their own health. Plexus continues to hold the Gold Award.
Health and Safety continues to be a pivotal part of the business
and remains at the centre of everything we do. Plexus remains fully
committed to continually improving safety standards and the safety
culture across the business, and this is reflected in the business
being once again lost time injury ('LTI') free this year. Plexus
has now passed the sixth anniversary of this milestone, in
September 2021.
Plexus enhanced its Business Management System (BMS) in order to
comply with the new ISO 45001 standard which replaces OHSAS
18001:2007 which became discontinued in 2021. Plexus achieved
accreditation under the new standard in May 2020. This followed the
Quality Management System achieving API Q1 accreditation in
February 2020. Plexus continues to hold Licences for both API 6A
and 17D. These accreditations demonstrate Plexus' capability and
determination to operate under the highest standards.
The IT Department provides technology leadership for Plexus,
including governance, information security, software development
and expertise in deploying modern information technologies to
improve company efficiency. During these challenging times for all
industries due to COVID-19, Plexus has continued to develop its
in-house systems to ensure the Company is able to react swiftly to
changing market requirements, and to enhance the capability of all
office-based employees to work from home as necessary, safely and
securely.
STRATEGY AND FUTURE DEVELOPMENTS
Technology
Plexus' proprietary POS-GRIP technology involves applying
compressive force to the outside of a wellhead or pipe, to flex it
inwards. As the bore of the vessel moves inwards, it makes contact
with an inner pipe (or hanger) on the inside. Sufficient contact
force is generated to hold the inner member in place through
friction between the two components, whilst at the same time
creating a superior metal to metal seal. The Company's strategy is
primarily focused on delivering the highest standard of wellhead
design for the upstream oil and gas markets around the world, and
one which has already proven to be uniquely advantageous in terms
of safety features, operational efficiency, and cost savings for
Jack-up drilling, especially HP/HT applications. The Company is now
focused on replicating this past success in other wellhead markets
including surface production, subsea and geothermal, as well as
other initiatives such as a POS-GRIP Crown Plugs and POS-GRIP
Lateral Trees.
POS-GRIP wellhead designs deliver many advantages over
conventional "slip and seal" and "mandrel hanger" wellhead
technologies for surface exploration and land and platform
production applications. These include larger metal to metal seal
contact areas, virtual elimination of movement between parts, fewer
components, simplified design and assembly, enhanced corrosion
resistance, simpler manufacture, long term integrity, annulus
management, and reduced installation and maintenance costs. Plexus'
POS-GRIP enabled product suite also includes the innovative Python
(R) subsea wellhead as well as the POS-SET Connector (R) for use in
the growing decommissioning market. We believe the Python subsea
wellhead is important as it can eliminate the need for wear
bushings, pack-offs, lock-rings, and lockdown sleeves, whilst
delivering instant rigid lock-down in all directions, and is fully
reversible for ease of workover, side-tracking or abandonment.
These design simplifications and features not only reduce the risk
of installation problems and safety issues, they also significantly
reduce installation time and the number of trips that are needed
such that it has been independently estimated that over ten days of
savings per well can be achieved in deep-water under certain
conditions which, depending on water depth, Plexus estimates could
result in a saving of over $10m for the operator. The POS-SET
Connector, which is designed to re-connect to bare conductor pipe
for well re-entry or permanent abandonment operations, creates a
solid connection with reliable sealing directly against the pipe,
and retains bend and load capabilities at 80% of pipe strength. The
Directors believe that such features mean that Plexus' wellhead
equipment sets and delivers a new and superior standard. Apart from
the operational time savings and related safety benefits, at an
engineering level the Company has demonstrated that its technology
can raise and even exceed the integrity of wellhead testing and
sealing to that of premium couplings, which supports its claim that
wellheads no longer need to be the weak link in the well
architecture chain.
POS-GRIP friction-grip technology has wide ranging applications
both within and outside the oil and gas industry. As POS-GRIP is a
method of engineering and not a product in its own right, where
there is an opportunity for the technology to improve the
performance of conventional products the Company will look to
integrate POS-GRIP so that the benefits together with "HG" sealing
can be realised organically or in conjunction with partners,
including licensees. In line with this strategy, in November 2020
Plexus entered into a licence agreement with Cameron International
Limited, which grants the Schlumberger group company a
non-exclusive licence to use the POS-GRIP and HG(R) metal-to-metal
seal method of wellhead engineering for the development of
conventional and unconventional oil and gas surface wellheads.
In addition to POS-GRIP Technology, Plexus is now in the process
of re-entering the Jack-up Exploration Wellhead market with
Cameron's Exact and Centric wellhead and mudline suspension
products following the Cooperation Agreement with Cameron agreed in
August 2021. These products are tried and tested, and well suited
to the exploration market as they are "through the BOP" products
which deliver crucial time savings and safety benefits over
conventional wellhead products.
Business Model and Markets
The Company is proprietary technology driven and its extensive
patent protected IP and many years' worth of specialist know-how
has been successfully deployed in hundreds of wells around the
world. Its superior performance, safety and operational advantages
led to the Company becoming established initially as a leading
equipment and services provider to the niche Jack-up exploration
wellhead market. The Directors believe that this success can be
replicated and extended to the wider and much larger energy sectors
including surface production, subsea, geothermal and fracking
applications based on its POS-GRIP technology.
The licensing deal agreed with Cameron in November 2020 is an
important advancement in the Company's aim to achieve widespread
use of POS-GRIP Technology. The licence allows Cameron to pursue
opportunities for low-cost wellheads in the volume market, as well
as develop POS-GRIP equipment in larger Schlumberger EPIC
(Engineering, Procurement, Installation & Commissioning)
contracts which Plexus could not otherwise access.
Plexus has a good reputation for the agility and customer focus
required to succeed in the Jack-up Exploration Wellhead market, and
so the recent collaboration agreement announced in August 2021with
Cameron to allow Plexus to re-enter this market with field proven
products is welcome and should see an addition to revenues as
global exploration activity increases.
Strategy
Plexus' long-term goal is to establish POS-GRIP technology as a
new industry standard for wellhead and metal sealing designs,
whilst continuing to develop new products, which can also offer
multiple benefits and advantages to the industry in terms of
improved safety, functionality, and cost and time savings. An
example of such extensions for POS-GRIP technology is the Company's
connector technology, which is ideal for high integrity, low
fatigue applications. The Directors believe wellhead connectors,
riser connectors, subsea jumper connectors, pipeline connectors,
tether tensioners and even vessel mooring connectors can all
benefit from the simplicity of POS-GRIP. Plexus continues to pursue
direct sales to customers, and the November 2020 licensing deal
with Cameron will further help develop this goal.
Following the sale of the Jack-up Wellhead Business to TFMC in
2018, Plexus has signed in August 2021 a collaboration agreement
with Cameron to take on Cameron's Exact and Centric adjustable
wellhead and mudline suspension products to re-enter the market. We
expect that the increase in activity and revenue from this business
will be positive and will also allow Plexus to reengage with
customers at the exploration stage, which then has the potential to
lead to further production and subsea opportunities. In view of
lead times associated with such projects the benefits of this new
Cameron relationship will most likely be seen in the next financial
year.
As the world and the oil and gas industry strives to implement a
range of ESG initiatives, particularly in relation to achieving
Net-Zero in relation to climate change, Plexus believes that its
technology can make a valuable contribution in terms of its
leak-free sealing capabilities, and its 'through the BOP' (Blow-out
Preventer) wellhead designs. These 'green' features were recognised
in July 2021 with the receipt of the London Stock Exchange's "Green
Economy Mark" in recognition of contributing to the global green
economy
Key Performance Indicators
The Directors monitor the performance of the Group by reference
to certain financial and non-financial key performance indicators.
The financial indicators include revenue, EBITDA, profit and loss,
earnings per share, cash balances, and working capital resources
and requirements. The analysis of these is included in the
financial results section of this report. Non-financial indicators
include Health and Safety statistics, equipment utilisation rates,
geographical diversity of revenues and customers, the level of
ongoing customer interest and support, geo-political considerations
such as emissions concerns and awareness, effectiveness of various
research and development initiatives, for example, in relation to
new patent activity and inventions, and appropriate employee
headcount numbers and turnover rates. The non-financial key
performance indicators are included within the strategic
report.
PRINCIPAL RISKS AND RISK MANAGEMENT
There are a number of potential risks and uncertainties that
could have an impact on the Group's performance which include the
following.
(a) Political, legal and environmental risks
Plexus participates in a global market where the exploration and
production of oil and gas reserves, and even the access to those
reserves can be adversely impacted by changes in political,
operational, and environmental circumstances. The current global
political and environmental landscape, particularly in relation to
climate change issues and Net-Zero goals, and the relentless move
away from hydrocarbons to, for example renewables, continues to
demonstrate how any combination of such factors can generate risks
and uncertainties that can undermine commercial opportunities and
trading conditions. Some risks are of course unforeseen, and one
such significant risk took the form of the global pandemic caused
by COVID-19 which materialised last year and continued throughout
the current year. Although Plexus has taken all reasonable steps to
mitigate the effects of this risk, both economic and to the health
and well-being of our employees, customers and suppliers by
complying with legislation and taking measures to ensure business
continuity, the negative impact has clearly been felt. Such risks
also extend to legal and regulatory issues, and it is important to
understand that these can change at short notice. To help address
and balance such risks, the Group where possible seeks to broaden
its geographic footprint and customer base, as well as actively
looking to forge commercial relationships with large industry
players.
The Company continues to closely monitor the potential impact
and risks of the UK's exit ('Brexit') from the European Union
('EU'). This includes assessing the potential impact of the
introduction of trade tariffs and the potential supply chain
disruption that could result from increased customs checks at
borders and related matters. Plexus has an IP-led business model
which provides it with operational flexibility and the ability to
respond to and mitigate some of the potential impacts of the
different scenarios resulting from the UK's exit from the EU. In
the meantime, Plexus has amongst other activities obtained an
Economic Operator Registration and Identification ('EORI') number
to enable the Company to continue to import and export with the
EU.
(b) Oil and Gas Sector Trends
It is readily understood that the world continues to move away
from coal as part of the COP21 as well as the recent COP26
pronouncements, together with other climate change objectives in
relation to the ongoing need to urgently reduce CO2 and CH4
(methane) emissions. However, the commercial and environmental
dynamics between traditional hydrocarbons in terms of coal, oil and
gas is not the only trend to consider. New technologies,
particularly in relation to renewables such as wind and solar,
alternative energies and developments such as the increasing use of
electric vehicles and corresponding improvements in battery storage
life, and wave energy, could all in the future prove very
disruptive to the traditional oil and gas industry and the
corresponding demand for exploration and production equipment and
services. However, it is also recognised that the world will
continue to need hydrocarbons as an energy and materials source,
and in particular gas for many years to come, and indeed currently
global demand for hydrocarbons is forecast to continue to grow for
the foreseeable future. It should be noted that the climate change
impact
of methane is now better understood by environmentalists,
regulators and the oil and gas industry and that it is essential
that methane wellhead leaks are prevented whenever and wherever
possible. As part of this movement, the impending Methane Emissions
Reduction Act in the United States and similar legislation being
progressed in Europe demonstrate, regulations are increasingly
becoming more stringent.
(c) Technology
Having originally proved the superior qualities of POS-GRIP
technology within the Jack-up wellhead exploration market which
culminated in the sale of that business to FMC Technologies
Limited, a subsidiary of TechnipFMC (Paris:FTI, NYSE:FTI) (jointly
"TFMC"), in early 2018, the Company has focused on establishing its
technology and equipment in other markets including surface
production wellheads, subsea and de-commissioning, both organically
and through licence partners. In line with this, in November 2020
Plexus entered into a licence agreement with Cameron International
Limited, which grants the Schlumberger group company a
non-exclusive licence to use the POS-GRIP and HG(R) metal-to-metal
seal method of wellhead engineering for the development of
conventional and unconventional oil and gas surface wellheads.
(d) Competitive risk
The Group operates in highly competitive markets and often
competes directly with large multi-national corporations who have
greater resources and are more established, and who are more
resilient to extended adverse trading conditions. This risk has
become more concentrated over recent years as a result of the large
oil service company competitors becoming even larger and more
influential through a series of mergers and acquisitions. These
major oil service and equipment company consolidations have
therefore magnified such issues as competitors reduce in number but
increase in size, influence, and reach. Unforeseen product
innovation or technical advances by competitors could adversely
affect the Group, and lead to a slower take up of the Group's
proprietary technology. To mitigate this risk Plexus maintains an
extensive suite of patents and trademarks, and actively continues
to develop and improve its IP, including adding to its existing
extensive 'know-how' to ensure that it continues to be able to
offer unique superior wellhead design solutions.
(e) Operational
Plexus, like many other oil service companies, has had to make
significant reductions in its workforce numbers over the past few
years as a result of a lower oil price and a corresponding
reduction in drilling activity and related levels of capex spend.
These adverse trading conditions have been magnified since early
2020 by the Covid-19 pandemic, which in turn has coincided with an
acceleration in the world's desire to reduce its dependence on
hydrocarbons. Therefore, although there are now some encouraging
signs of a pick-up in drilling activity, it is possible that the
industry and Plexus could experience difficulties in rehiring past
or new employees and this could deprive Plexus of the key personnel
necessary for expanding operational activities, as well as research
and development initiatives, at the rate that may be required. To
help mitigate this risk Plexus has developed effective recruitment
and training procedures, which combined with the appeal of working
in a company with unique technology and engineering solutions will
hopefully help to mitigate such risks.
(f) Liquidity and finance requirements
In an economic climate that in many ways remains uncertain it
has become increasingly possible for potential sources of finance
to be closed to businesses for a variety of reasons that have not
been an issue in the past. Some of these may even relate to the
lender itself in terms of its own capital ratios and lending
capacity where financial pressures and constraints can apply.
Furthermore, a number of large and influential institutions have
actively divested oil and gas investments and declared that further
investments and funding will not be made available for oil and gas
projects as a result of climate change concerns and as part of the
move to Net-Zero.
(g) Credit
The main credit risk is attributable to trade receivables. Where
the Group's customers are large international oil and gas companies
the risk of non-payment is significantly reduced, and therefore is
more likely to be related to client satisfaction and/or trade
sanction issues. Where smaller independent oil and gas companies
are concerned, credit risk can be a factor. Customer payments can
potentially involve extended periods of time especially from
countries where exchange control regulations can delay the transfer
of funds outside those countries. As Plexus begins to establish
international licensee relationships there may be instances whereby
certain capital and royalty payments could be due some way into the
future and as such greater credit risk than exists under normal
payments terms could apply. The Group's exposure to credit risk is
monitored continuously.
(h) Risk assessment
The Board has established an on-going process for identifying,
evaluating and managing the more significant risk areas faced by
the Group. One of the Board's control documents is a detailed
"Risks assessment & management document", which categorises
risks in terms of - business (including IT), compliance, finance,
cash, debtors, fixed assets, other debtors/prepayments, creditors,
legal, and personnel. These risks are assessed and updated on a
regular basis and can be associated with a variety of internal and
external sources including regulatory requirements, disruption to
information systems including cyber-crime, control breakdowns and
social, ethical, environmental and health and safety issues.
(i) COVID-19
Plexus places the health and safety of its employees as its
highest priority and in line with this has implemented various
protocols in relation to the ongoing COVID-19 pandemic.
Accordingly, a business continuity programme has been put in place
to protect employees whilst ensuring the safe operation of the
Company. Following consultations with, amongst others, relevant
authorities, staff and contractors, strict protocols have been
implemented to reduce the risk of transmission of COVID-19 at all
the Company's operations. The situation in respect of COVID-19
continues to be an evolving one and the Board will therefore
continue to review its potential impact on its staff and the
business.
Section 172 Statement
This section serves as the section 172 statement and should be
read in conjunction with the full Strategic Report and the
Corporate Governance Report. Section 172 of the Companies Act 2006
requires directors to take into consideration the interests of
stakeholders in their decision making. The Directors continue to
have regard to the interests of the Company's employees and other
stakeholders, including shareholders, customers and suppliers,
Licence Partners and the community and environment, through
positive engagement and when making decisions. Acting in good faith
and fairly between members, the Directors consider what is most
likely to promote the success of the Company for its members in the
long term and to protect the reputation of the Company.
Shareholders
Plexus seeks to develop an investor base of long-term holders
that are aligned to our strategy. By communicating our strategy and
objectives, we seek to maintain continued support from our investor
base. Important issues include financial stability and protecting
and strengthening the value of our intellectual property.
Engagement with shareholders is a key element to this objective and
methods of engagement are detailed in the Corporate Governance
Report, although as a result of the Covid pandemic such
interactions have been adversely impacted. During the year, the
Finance Director supported by other members of the executive team,
the Company's broker, and the Investor Relations advisor, engaged
where possible with investors by email, presentations, direct
conversations and ad-hoc meetings. The Company has in recent times
re-launched its website to provide investors and other stakeholders
with an improved platform to access information about the Company.
The website includes details of the LSE "Green Economy Mark"
status, which was awarded in July 2021, and associated Net-Zero
commentary.
Employees
The Group's UK staff are engaged by the Company's subsidiary
Plexus Ocean Systems Limited based in Aberdeen, Scotland. Being a
relatively small company with just over 30 employees largely
operating in one location, there is a high level of visibility
regarding employee engagement and satisfaction. The Company is
engaged with a specialist firm of benefits advisers who are able to
offer a comprehensive service to employees as well as to the
Company. The Company consults with employees on matters of
competency, training, and health and safety as detailed in the
Corporate Governance Report. During the year, the Company
successfully achieved six continuous years with no Lost Time
Incidents (LTI's) and this successful safety culture has continued
beyond that anniversary to the date of writing. In the previous
year, the impact of COVID-19 and Government regulations caused a
sudden migration of many staff to be required to work from home and
this has continued throughout the year under review. The challenges
of maintaining close contact with employees presented by this have
been very successfully managed by use of appropriate software such
as Microsoft Teams alongside the use of a secure VPN and other
network security protocols. A gradual easing of restrictions has
enabled more in-person contact to be achieved and the Company plans
to have a full return to normality as the conditions allow both
internally and externally.
Customers and Suppliers
The Company is committed to acting ethically and with integrity
in all business dealings and relationships. Fostering good business
relationships with key stakeholders including customers and
suppliers is important to the Company's success. The Board seeks to
implement and enforce effective systems and controls to ensure its
supply chain is maintaining the highest standard of business
conduct in line with best practice including in relation to
anti-bribery and modern slavery.
Licence Partners
The Company engages with Licence Partners in a way that follows
the same principles as those applied to relationships with other
customers and suppliers. Additionally, the Company engages with its
Licence Partners to support their efforts to achieve commercial
success by holding as and when required technical workshops,
technical training and data transfer. As part of the transaction
with TFMC in 2018, a five-year Collaboration Agreement was signed
between the two companies to explore areas where new products with
commercial opportunities can be jointly developed. The
Collaboration Steering Committee contains representatives from both
companies and meets on a regular basis at each quarter. In
addition, following the entering into the non-exclusive surface
wellhead licencing agreement with Cameron in November 2020 regular
Teams meetings have been held as part of the process of
transferring Plexus' relevant IP so that Cameron can design and
develop their own low-cost wellhead with POS-GRIP technology
inside.
Community and Environment
The Company has minimal environmental impact in the localities
in which it operates. This clearly helps the Company meet its
corporate objectives in this regard but is never taken for granted.
In the year under review, the Company met its target for waste
management and in general continues to operate in a manner that is
open, honest, and socially responsible.
G Stevens
Director
19 November 2021
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
Notes 2021 2020
GBP'000 GBP'000
Revenue 1 2,017 525
Cost of sales (1,062) (225)
------- -------
Gross profit 955 300
Administrative expenses (5,501) (5,981)
------- -------
Operating loss (4,546) (5,681)
Finance income 143 192
Finance costs (103) (111)
Share in (loss) / profit of associate (77) 265
Other income 211 285
------- -------
Loss before taxation (4,372) (5,050)
Income tax credit 3 262 992
------- -------
Loss after taxation from continuing
operations (4,110) (4,058)
Loss after taxation from discontinued
operations (392) (2,549)
------- -------
Loss for year (4,502) (6,607)
Other comprehensive income - -
------- -------
Total comprehensive
income for the year attributable to
the owners of the parent (4,502) (6,607)
------- -------
Loss per share 5
Basic from continuing operations (4.09p) (3.92p)
Diluted from continuing operations (4.09p) (3.92p)
Basic from discontinued operations (0.39p) (2.47p)
Diluted from discontinued operations (0.39p) (2.47p)
Consolidated Statement of Financial Position
at 30 June 2021
Notes 2021 2020
GBP'000 GBP'000
Assets
Goodwill 767 767
Intangible assets 6 9,644 10,325
Property, plant and equipment 7 2,961 3,273
Financial assets 9 3,042 2,995
Investment in associate 8 721 898
Deferred tax asset 3 1,899 2,130
Right of use asset 1,245 1,548
------- -------
Total non-current assets 20,279 21,936
------- -------
Inventories 575 870
Trade and other receivables 1,051 2,982
Current income tax asset - 76
Cash and cash equivalents 5,175 4,087
------- -------
Total current assets 6,801 8,015
------- -------
Total Assets 27,080 29,951
------- -------
Equity and Liabilities
Called up share capital 10 1,054 1,054
Shares held in treasury 11 (2,500) (2,500)
Share based payments reserve 674 674
Retained earnings 23,764 28,266
------- -------
Total equity attributable to equity
holders of the parent 22,992 27,494
------- -------
Liabilities
Lease liabilities 1,085 1,401
------- -------
Total non-current liabilities 1,085 1,401
------- -------
Trade and other payables 643 778
Lease liabilities 316 278
Bank Lombard facility 2,044 -
------- -------
Total current liabilities 3,003 1,056
------- -------
Total liabilities 4,088 2,457
------- -------
Total Equity and Liabilities 13 27,080 29,951
------- -------
These financial statements were approved and authorised for
issue by the board of directors on 19 November 2021 and were signed
on its behalf by:
G Stevens C Hendrie
Director Director
Company Number: 03322928
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
Called Shares Share Retained Total
Up Held Based Earnings
Share in Treasury Payments
Capital Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
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 year - - - (4,502) (4,502)
------- ------- ------- ------ ------
Balance as at 30
June 2021 1,054 (2,500) 674 23,764 22,992
------- ------- ------- ------- -------
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
2021 2020
Notes GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation from continuing
activities (4,372) (5,050)
Loss before taxation from discontinued
activities 20 (2,432)
------- -------
Loss before tax (4,352) (7,482)
Adjustments for:
Depreciation and amortisation charges 1,701 1,896
(Profit) / loss on disposal of property,
plant and equipment (1) 6
Share in loss / (profit) of associate 77 (265)
Property rental income (123) (285)
Impairment of associate - 134
Write-down of other receivable - 2,432
Lease liability re-assessment 25 -
Fair value adjustment on financial
assets 19 24
Investment income (143) (192)
Interest expense 84 87
Changes in working capital:
Decrease / (increase) in inventories 295 (172)
(Increase) in trade and other receivables (255) (191)
(Decrease) in trade and other payables (135) (1,328)
------- -------
Cash used in operating activities (2,808) (5,336)
Income taxes refunded 157 545
------- -------
Net cash used from operating activities (2,651) (4,791)
------- -------
Cash flows from investing activities
Funds invested in financial instruments (66) (183)
Property rental income 123 285
Purchase of intangible assets (235) (361)
Purchase of property, plant and equipment (170) (138)
Dividend income from associate 100 140
Deferred proceeds from sale of discontinued
operation 2,186 4,240
Proceeds of sale of property, plant
and equipment 1 6
Interest and investment income received 143 192
------- -------
Net cash generated in investing activities 2,082 4,181
------- -------
Cash flows from financing activities
Draw down of Lombard facility 2,044 -
Repayment of loans and banking facilities - (75)
Repayments of lease liabilities (342) (315)
Interest paid (45) (65)
------- -------
Net cash inflow / (outflow) from financing
activities 1,657 (455)
------- -------
Net increase / (decrease) in cash and
cash equivalents 1,088 (1,065)
Cash and cash equivalents at 1 July
2020 4,087 5,152
------- -------
Cash and cash equivalents at 30 June
2021 13 5,175 4,087
------- -------
Notes to the Consolidated Financial Statements
1.
2021 2020
GBP'000 GBP'000
By geographical area
UK 1,992 13
Europe - 489
Rest of World 25 23
----- -----
2,017 525
----- -----
The revenue information above is based on the location of the
customer.
2021 2020
GBP'000 GBP'000
By revenue stream
Rental 401 -
Service 235 9
Sold Equipment 835 26
Royalty Fees 386 476
Rebillables 19 14
Support services and Engineering 141
----- -----
2,017 525
----- -----
Substantially all of the revenue in the current and previous
periods derives from the sale, rental and the provision of services
relating to the Group's patent protected equipment.
2. Segment Reporting
The Group derives revenue from the sale of its POS-GRIP
technology and associated products, the rental of equipment
utilising the POS-GRIP technology and service income principally
derived in assisting with the commissioning and on-going service
requirements of our equipment. These income streams are all derived
from the utilisation of the technology which the Group believes is
its only segment.
Per IFRS 8, the operating segment is based on internal reports
about components of the group, which are regularly reviewed and
used by the board of directors being the Chief Operating Decision
Maker ("CODM").
All of the Group's non-current assets are held in the UK.
The following customers each account for more than 10% of the
Group's continuing revenue:
2021 2020
GBP'000 GBP'000
Customer 1 1,485 489
Customer 2 386 -
3. Income tax credit
(i) The taxation charge for the year 2021 2020
comprises:
GBP'000 GBP'000
UK Corporation tax:
Adjustment in respect of prior years (83) (76)
----- -----
(83) (76)
----- -----
Foreign tax
Current tax on income for the year 1 -
Adjustment in respect of prior years - 72
----- -----
1 72
----- -----
Total current tax credit (82) (4)
----- -----
Deferred tax:
Origination and reversal of timing
differences (23) (648)
Adjustment in respect of prior years 255 (223)
----- -----
Total deferred tax 232 (871)
----- -----
Total tax charge / (credit) 150 (875)
----- -----
The effective rate of tax is 19% (2020:
19%)
Tax credit on discontinued activities 412 117
Tax credit on continuing activities (262) (992)
----- -----
Total tax charge / (credit) 150 (875)
----- -----
(ii) Factors affecting the tax charge 2021 2020
on continuing activities for the year
GBP'000 GBP'000
Loss on ordinary activities before tax (4,372) (5,050)
Tax on (loss)/profit at standard rate
of UK
corporation tax of 19% (2020: 19%) (831) (960)
Effects of:
Expenses not deductible for tax purposes 186 163
Effect of change in tax rate (816) (153)
Tax adjustments on share-based payments 4
Adjustments in respect of prior year (92) (46)
Foreign tax rates - -
Deferred tax not recognised 1,291
----- -----
Total tax credit on continuing activities (262) (992)
----- -----
(iii) Movement in deferred tax asset 2021 2020
balance
GBP'000 GBP'000
Deferred tax asset at beginning of year (2,130) (1,259)
Debit / (credit) to Statement of Comprehensive
Income 231 (871)
----- -----
Deferred asset at end of year (1,899) (2,130)
----- -----
(iv) Deferred tax asset balance 2021 2020
GBP'000 GBP'000
The deferred tax asset balance is made
up of the following items:
Difference between depreciation and
capital allowances 1,131 902
Tax provisions (1) (2)
Tax losses (3,029) (3,030)
----- -----
Deferred tax asset at end of year (1,899) (2,130)
----- -----
As outlined in the accounting policy the deferred tax asset is
reviewed at the end of each reporting period. Following a review of
the Group's financial models and taxable profitability the Group
has a further GBP1,290k not recognised. The group has recognised a
deferred tax asset based upon its mid-term forecast profitability.
Where recoverability is dependent upon profits arising beyond this
period, the group has determined that the threshold for recognition
is not met and so restricted the deferred tax asset recognised. An
amount of deferred tax of GBP1,290k has not been recognised but
remains available for future loss utilisation.
4 . Discontinued Operations
On 1(st) February 2018 the Group sold its "Jack-up Business" to
TFMC for an initial gross consideration of GBP15m, with an
additional sum of up to GBP27.5m payable dependent on the future
performance of the Jack-up Business during a three year earn-out
period.
The recognised profit on discontinued operations in the current
year represents the deferred consideration received which exceeded
the debtor receivable.
The recognised loss on discontinued operations in the prior year
represents the impairment of deferred consideration receivable
presented in prepayments and other amounts.
2021 2020
GBP'000 GBP'000
Revenue - -
Expenses 20 (2,432)
Gain / (loss) before tax of discontinued
operations 20 (2,432)
Income tax charge (412) (117)
Loss after tax of discontinued operations (392) (2,549)
----- -----
Loss after taxation from discontinued
operations (392) (2,549)
----- -----
The Statement of cash flows includes the following amounts
related to discontinued operations:
2021 2020
GBP'000 GBP'000
Operating activities - -
Investing activities - -
Financing activities - -
----- -----
Net cash generated/(used) from discontinued - -
activities
----- -----
5. Loss per share
2021 2020
GBP'000 GBP'000
Loss attributable to shareholders -
continuing operations (4,110) (4,058)
Loss attributable to shareholders -
discontinued operations (392) (2,549)
----- -----
Loss attributable to shareholders (4,502) (6,607)
------ ------
Number Number
Weighted average number of shares in
issue 100,435,744 103,406,041
Dilution effects of share schemes - -
---------- ----------
Diluted weighted average number of shares
in issue 103,406,041 103,406,041
---------- ----------
Loss per share
Basic Loss per share for continuing
operations (4.09p) (3.92p)
Diluted Loss per share for continuing
operations (4.09p) (3.92p)
------ ------
Basic Loss per share for discontinued
operations (0.39p) (2.47p)
Diluted loss per share for discontinued
operations (0.39p) (2.47p)
------ ------
Basic loss per share is calculated on the results attributable
to ordinary shares divided by the weighted average number of shares
in issue during the year.
Diluted earnings per share calculations include additional
shares to reflect the dilutive effect of share option schemes. As a
loss was made on continuing operations for the current year the
option schemes are considered to be anti-dilutive.
6. Intangible Assets
Patent and
Intellectual Other Computer
Property Development Software Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 30 June 2019 4,600 13,096 332 18,028
Additions - 359 2 361
Disposals - - (73) (73)
----- ----- ----- -----
As at 30 June 2020 4,600 13,455 261 18,316
Additions - 235 - 235
Disposals - - - -
----- ----- ----- -----
As at 30 June 2021 4,600 13,690 261 18,551
----- ----- ----- -----
Amortisation
As at 30 June 2019 3,076 3,758 318 7,152
Charge for the year 237 664 11 912
On disposals - - (73) (73)
----- ----- ----- -----
As at 30 June 2020 3,313 4,422 256 7,991
Charge for the year 237 676 3 916
On disposals - - - -
----- ----- ----- -----
As at 30 June 2021 3,550 5,098 259 8,907
----- ----- ----- -----
Net Book Value
As at 30 June 2021 1,050 8,592 2 9,644
----- ----- ----- -----
As at 30 June 2020 1,287 9,033 5 10,325
----- ----- ----- -----
When assessing the valuation of the Group's assets the key
assumptions on which the valuation is based are that:
-- Industry acceptance will result in continued growth of the
business above long-term industry growth rates Management considers
this to be appropriate for a new technology gaining industry
acceptance,
-- Prices will rise with inflation,
-- Costs, in particular direct costs and staff costs are based
on past experiences, and management's knowledge of the
industry,
-- Staff wage inflation will be higher than general inflation
but will not rise in line with sales.
These assumptions were determined from the directors' knowledge
and experience.
The value in use calculation is based on cash flow forecasts
derived from the most recent financial model information available.
Although the Group's technology is proven and has proven commercial
value the exploitation of opportunities beyond the rental wellhead
exploration equipment services market are at a relatively early
stage and the commercialisation process is expected to be a long
term one. The cash flow forecasts therefore extend to 2040 to
ensure the full benefit of all current projects is realised. The
rationale for using a timescale up to 2040 with growth projections
which increase in the first five years and decline thereafter, is
that as time
progresses, Plexus expects to gain an increasing foothold in the
surface, subsea and other equipment markets, including the recent
re-entry into the Jack-up exploration rental wellhead sector. As
the Group is starting from a base point of trading the growth rates
are expected to be high in the initial years (varying from 50% to
400% depending on the model employed) then in later years where the
technology becomes established the expected rate of growth declines
(varying from 5% to 10 depending on the model employed).
The key assumptions used in these calculations include discount
rate, revenue projections, growth rates, expected gross margins and
the lifespan of the Group's technology. Management estimates the
discount rates using pre-tax rates that reflect current market
assessments of the time value of money and risks specific to the
Group and the markets in which it operates. Revenue projections,
growth rates, margins and technology lifespans are all estimated
based on the latest business models and the most recent discussions
with customers, suppliers and other business partners.
Management regularly assesses the sensitivity of the key
assumptions and the probability that any of them would change to
the degree that the carrying value would exceed the recoverable
amount. It would require significant adjustments to key assumptions
before the goodwill and other intangibles would be impaired.
Patent and other development costs are internally generated
.
7. Property plant and equipment
Tenant Assets Motor
Buildings Improvements Equipment under construction vehicles Total
GBP000 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 - - 42 128 - 170
Transfers - - 128 (128) - -
Disposals - - (2) - - (2)
----- ----- ----- ----- ----- -----
As at 30 June
2021 3,740 714 5,561 - 17 10,032
----- ----- ----- ----- ----- -----
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 153 41 284 - 4 482
On disposals - - (2) - - (2)
----- ----- ----- ----- ----- -----
As at 30 June
2021 1,643 566 4,851 - 11 7,071
----- ----- ----- ----- ----- -----
Net book value
As at 30 June
2021 2,097 148 710 - 6 2,961
----- ----- ----- ----- ----- -----
As at 30 June
2020 2,250 189 824 - 10 3,273
----- ----- ----- ----- ----- -----
The value in use of property, plant and equipment is not
materially different from the carrying value.
8. Investment in associate
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 loss for the period (77)
Dividends received (100)
-----
Investment in associate at 30 June
2021 721
-----
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 are a
precision engineering company which serves the oil and gas
industry. This is viewed as a long-term strategic investment by
Plexus. KMS are based at Sky House, Spurryhillock Industrial
Estate, Stonehaven, Aberdeenshire AB39 2NH
Following the investment Graham Stevens PLC 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 was revalued using a profit after tax earnings model.
This resulted in an impairment charge of GBP134k. There was no
impairment for the period to 30 June 2021.
The summary financial information of KMS, extracted on a 100%
basis from the accounts for the 6 months to 30 June 2021 are as
follows:
9. Financial Asset
2021 2020
GBP'000 GBP'000
Financial instruments held at fair
value 3,042 2,995
----- -----
3,042 2,995
----- -----
The financial asset relates to cash invested in an investment
portfolio, made up of high-yield bonds held at fair value in the
statement of financial position. The portfolio can be divested to
cash at any time. Included in the statement of comprehensive income
is a write-down in the carrying value of the financial asset of
GBP19k (2020: GBP24k). The fair value of the investment is
evaluated by reviewing the portfolio on a quarterly basis,
including the reporting date of 30 June 2021.
10. Share Capital
2021 2020
GBP'000 GBP'000
Authorised:
Equity: 110,000,000 (2020: 110,000,000)
Ordinary shares of 1p each 1,100 1,100
----- -----
Allotted, called up and fully paid:
Equity: 105,386,239 (2020: 105,386,239)
Ordinary shares of 1p each 1,054 1,054
----- -----
11. Shares held in treasury
2021 2020
GBP'000 GBP'000
Buyback of shares 2,500 2,500
----- -----
On 1 February 2019 Plexus Holdings PLC completed the acquisition
of 4,950,495 Ordinary Shares beneficially held by LLC Gusar.
Following the above transaction, the Company's issued share capital
comprises 105,386,239 Ordinary Shares, of which 4,950,495 Ordinary
Shares are held in treasury. The Company now has a total of
100,435,744 Ordinary Shares in issue with voting rights. This
figure, 100,435,744, should be used by shareholders as the
denominator when determining whether they are required to notify
their interest in, or a change to their interest in the Company
under the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
12 . Reconciliation of net cash flow to movement in net cash/debt
2021 2020
GBP'000 GBP'000
Movement in cash and cash equivalents 1,088 (1,065)
Repayment of bank loans - 75
Drawdown of Lombard facility (2,044)
----- -----
(Decrease)/increase in net cash
in year (956) (990)
Net cash at start of year 4,087 5,077
----- -----
Net cash at end of year 3,131 4,087
----- -----
13. Analysis of net cash/(debt)
2021: At beginning Cashflow At end of
of year year
GBP'000 GBP'000 GBP'000
Cash in hand and at bank 4,087 1,088 5,175
Bank Lombard facility - (2,044) (2,044)
Lease Liability (1,679) 278 (1,401)
----- ----- -----
Total 2,408 (678) 1,730
----- ----- -----
2020: At beginning Cashflow At end of
of year year
GBP'000 GBP'000 GBP'000
Cash in hand and at bank 5,152 (1,065) 4,087
Bank loans (75) 75 -
Lease Liability (1,948) 269 (1,679)
----- ----- -----
Total 3,129 (721) 2,408
----- ----- -----
The financial information above does not constitute the
company's statutory accounts for the year ended 30 June 2021 but is
derived from those statements.
The statutory financial statements and this preliminary
statement for the year ended 30 June 2021 were approved by the
Board on 19 November 2021. On the same date the company's auditors,
Crowe U.K. L.L.P issued an unqualified report on those financial
statements. The audit report did not include reference to any
matters to which the auditor drew attention by way of emphasis
without qualifying the report or contain a statement under section
498(2) or (3) of the Companies Act 2006.
The financial information for the year ended 30 June 2020 is
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors reported on
those accounts; their report was unqualified and did not draw
attention to any matters be way of emphasis and not contain a
statement under s498(2) or (3) of the Companies Act 2006 or
equivalent preceding legislation. The Company's financial
statements have been prepared in accordance with International
Financial Reporting Standards, as adopted by the EU. A copy of the
statutory accounts will be delivered to the Registrar of Companies
in due course.
The Annual Report will be circulated to all shareholders and
thereafter, copies will be available from the registered office of
the company, Highdown House, Yeoman Way, Worthing, West Sussex,
BN99 3HH.
NOTES:
AIM-traded oil and gas engineering services company Plexus (AIM:
POS) is an IP led company that has developed a range of wellheads
and related products and applications based on its patent-protected
POS-GRIP(R) friction-grip technology. In July 2021, Plexus was
recognised by the London Stock Exchange as contributing to the
global green economy with a "Green Economy Mark" accreditation.
Plexus has been protecting the environment for over 30 years,
initially with its 'through the BOP' (Blow Out Preventer) wellhead
designs, and subsequently with its POS-GRIP(R) proprietary
metal-to-metal leak-proof wellhead sealing system.
The Company is focused on establishing its technology and
wellhead equipment in a range of markets including surface
production, subsea and de-commissioning, both organically and
through licence partners. In line with this, in November 2020
Plexus entered into a licence agreement with Cameron International
Limited ('Cameron'), which grants the Schlumberger group company a
non-exclusive licence to use the POS-GRIP and HG(R) metal-to-metal
seal method of wellhead engineering for the development of
conventional and unconventional oil and gas surface wellheads.
Further, in August 2021, Plexus entered into a Cooperation
Agreement with Cameron, which enabled Plexus to return to the
Jack-Up Exploration (Adjustable) Wellhead rental business for
'through the BOP' jack-up applications. Cameron will also help to
provide Plexus with sales leads and market insight through a formal
Sales Advisory Board.
Plexus' suite of ongoing products and applications include: "HG"
wellheads, which combine POS-GRIP technology with gas tight leak
free metal-to-metal sealing; the Python(R) subsea wellhead (a new
standard for subsea wellheads - developed in a Joint Industry
Project supported by Royal Dutch Shell, BG (now owned by Shell),
Wintershall, Total, Maersk (now owned by Total), Tullow Oil, eni,
Senergy (now Lloyds Register), and Oil States Industries Inc); the
POS-SET(TM) connector for the growing de-commissioning and
abandonment market; and Tersus-PCT, an innovative HP/HT tie back
connector product. The Company also has a collaboration agreement
in place with TFMC, which provides a platform to further develop
and commercialise these and other applications.
This information is provided by RNS, the news service of the
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END
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