REG - Plexus Holdings Plc - Interim Results
21/03/2022 07:00
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RNS Number : 3244F Plexus Holdings Plc 21 March 2022
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment &
services
21 March 2022
Plexus Holdings PLC
('Plexus', 'the Company' or 'the Group')
Interim Results for the 6 months to 31 December 2021
Plexus Holdings plc, the AIM quoted oil and gas engineering services business
and owner of the proprietary POS-GRIP® method of wellhead engineering,
announces its interim results for the six months to 31 December 2021.
Financial Results
· Continuing operations sales revenue £734k (2020: £419k)
· Continuing operations EBITDA loss (£1,061k) (2020: £1,214k loss)
· Continuing operations loss before tax (£1,953k) (2020: £1,995k
loss)
· Basic loss per share from continuing activities (1.94p) (2020: 1.99p
loss)
· Cash of £3.38m (2020: £3.38m), and £3.29m (2020: £2.04m) drawn
down from the Lombard banking facility
· The Group has £4.71m in financial assets (2020: £3.04m)
· Total assets of £26.3m (2020: £29.4m)
· Total liabilities of £5.3m (2020: £3.9m)
Operational overview
· July 2021 - received the London Stock Exchange's Green Economy Mark
o Awarded to companies and funds where 50% or more of their revenues are
attributable to environmental solutions which contribute to the global green
economy
o Recognition of Plexus' 'through the BOP' (Blow-out Preventer) wellhead
designs, as well as its POS-GRIP proprietary HG® metal-to-metal leak proof
sealing system
· August 2021 - diversified future revenue stream by re-entering the
Jack-up Exploration (Adjustable) Rental Wellhead market, through a
collaboration agreement with Cameron International Corporation ("Cameron"), a
Schlumberger company
· December 2021 - scope of surface production low-cost volume wellhead
licencing agreement with Cameron expanded worldwide increasing the target
market for Plexus' technology and royalty rates for the expanded activities
o Terms and milestones of the previous agreement with Cameron announced 10
November 2020 include:
§ Non-Exclusive Agreement enabling Cameron to design, market and sell Plexus'
POS-GRIP and HG metal-to-metal seal method of wellhead engineering for surface
wellheads to its existing clients
§ Royalty payment in the range of 3% to 6% of the revenues generated from the
sale, lease, or rental of surface wellheads
§ Cameron design, testing and preparation of marketing material underway and
it is anticipated that sales activity will begin in the first half of the next
financial year
· December 2021 - won a further contract with a leading North Sea
Operator for the provision of a Plexus' POS-GRIP 10,000 psi leak proof "HG®"
metal to metal sealing surface production wellhead, together with associated
spares and valve equipment
o Wellhead equipment on schedule for delivery by Q2 2022
· Global concern about methane emissions continues to gather momentum
as part of the drive towards Net Zero and meeting ESG goals, and Plexus
believes that leak proof equipment with scientifically proven long-term
integrity will over time only become more relevant to oil and gas exploration
and production activities
· The war in Ukraine has resulted in the suspension of sales and
marketing activities in Russia with our licencee LLC Gusar ("Gusar") - further
updates will follow as the tragic situation unfolds. The suspension is not
expected to have a material impact on Plexus' financial trading performance in
the year ending 30 June ("FY22") which the Board anticipates will remain in
line with market expectations
Chief Executive Ben van Bilderbeek said: "Despite another challenging six
months trading period in which COVID-19 continued to impact on the global
economy, there is now at least a clear sign that the pandemic is beginning to
subside, and although we must still all be vigilant, the economy is returning
to some sort of normality. However, just as COVID recedes, what the world did
not anticipate post period end, was Russia waging war on Ukraine and the
ensuing tragic consequences that are ongoing; it is not yet clear what this
will mean for the world, the oil and gas industry or our relationship with our
Russian licensee Gusar where we have suspended business activities for the
foreseeable future.
"Notwithstanding these challenging circumstances, we are pleased with our
progress during the period both organically, with the winning of a further
surface production wellhead contract for the North Sea, and strategically,
with the strengthening of our relationship with Cameron with the signing of
two new agreements. The first of these, signed in August enables Plexus to
re-enter the exploration rental wellhead market sector where we had built up
an excellent reputation within the industry over many years up until 2018 when
the division was sold to TechnipFMC. The second agreement signed in December,
expanded the scope of the existing Cameron license which now extends
worldwide, whilst at the same time increasing royalty rates for an expanded
set of activities.
"The deployment of our proprietary wellhead and associated equipment designs
for surface and subsea applications remains a key focus, and we are already
pursuing a number of new tender opportunities for exploration rental
wellheads. Growing oil and gas supply constraints, combined with gas being
recognised as the transition fuel of choice suggest that the UKCS and ECS
still have an important role to play over the coming decades. Indeed, the
Chancellor Rishi Sunak recently said that "We have resources in the North Sea,
and we want to encourage investment in that because we're going to need
natural gas as part of our transition to getting to NetZero". The revitalised
recognition of the role hydrocarbons still have to play in the world economy
has been underlined by Oystein Noreng, professor of petroleum economics at BI
Norwegian School of Management in Oslo who has gone as far to say We have
misled ourselves that we will have windmills and solar and that will be it.
But globally we are not out of the coal age; we are in the middle of the oil
age and just starting the gas age".
"In addition to these opportunities, we are also confident that in the longer
term our technology can play a crucial role in supporting emerging industries
such as carbon capture, gas storage, hydrogen and geothermal. The unique
combination of leak proof performance and long-term integrity, which can avoid
expensive intervention and maintenance measures, is particularly important for
such applications.
"Moreover, in the last six months, the importance of aiming for a net-zero
future has never been more apparent, with the November COP26 summit in Glasgow
putting the spotlight on another opportunity: decommissioning. Left unplugged,
oil and gas wells are at risk of leaking methane into the atmosphere, which
currently accounts for at least 25% of global warming. All of this indicates
that if natural gas is now viewed as a key transitional energy source in the
shift to a sustainable future, then exploration and production methods must be
conducted as responsibly as possible, and that should mean that leak proof
equipment of whatever nature should be used whenever and wherever possible
throughout the supply chain.
"Despite opportunities finally emerging after an extended industry downturn,
we undoubtedly face obstacles: historically, the industry has not been the
most forward-thinking; project financing is getting harder; funding in the
decommissioning space has been constrained; and as a small 'disruptive
technology provider' we can sometimes be regarded as an inconvenient and
'riskier' partner.
"However, I believe that the tide is now turning. New oil and gas exploration
and production drilling activities are increasing, oil is back at record
prices and meeting ESG requirements is no longer optional, with regulation and
investor sentiment becoming ever more rigorous. If they are to survive,
companies will also need to explore alternative options to reach NetZero such
as carbon capture and storage and the use of depleted formations, and
geothermal power where Plexus is assessing ways in which its technology can be
adapted to deliver unique solutions. With superior, leak-free technology at
its core, escalating organic opportunities, strengthening blue-chip
partnerships, dynamic R&D advances, our re-entering of the Jack-up
exploration wellhead rental business, and with ESG goals on the agenda of
governments worldwide, I am increasingly confident that Plexus has reached a
tipping point that positions us well to rebuild significant value to
shareholders over the next 18 months."
For further information please visit www.posgrip.com or contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795 6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795 6890
Derrick Lee Cenkos Securities PLC Tel: 0131 220 9100
Pete Lynch Cenkos Securities PLC Tel: 0131 220 9100
Max Bennett St Brides Partners Ltd Tel: 020 7236 1177
Isabel de Salis St Brides Partners Ltd Tel: 020 7236 1177
Chairman's Statement
Business Progress and Operating Review
"Plexus remains well-positioned to benefit from the opportunities being
created by the supply-demand deficit facing the oil and gas industry. There is
continued pressure for oil and gas operators to increase production from
existing wells whilst improving their green credentials, and we believe this
will have to extend to increased exploration activity. A Shell presentation
last month titled "Shell LNG Outlook 2022" supports this view and warned that
an LNG supply-demand gap was set to emerge in the mid-2020s, especially as
many countries rebound from the economic impact of the coronavirus pandemic.
Shell's CEO van Beurden went as far to say that "We are struggling as an
industry to keep up with supply.
"Evidence is building that the supply-demand deficit is awakening investment
activity by the large oil and gas exploration and production companies, even
before the war in Ukraine. Rystad Energy analysts have reported that global
oil and gas investment will increase by $26bn this year to $628bn, and in the
meantime drilling rig use is climbing with some recent reports indicating a
circa 50% increase in North America and internationally. Eni head Claudio
Descalzi said the imbalance predated the pandemic and was a result of falling
investment since 2015, and it is now clear that this needs to be addressed,
especially for natural gas where Plexus wellhead equipment and products excel.
"Plexus' wellheads, which have been used in over 400 gas wells globally, are
leakproof, deliver operational time savings, have lower maintenance costs, and
importantly, can significantly reduce the escape of methane gas - increasing
safety for personnel, and limiting the negative impact on the environment. In
recognition of the Company's ongoing commitment to improving standards in the
oil and gas industry through the development and implementation of innovative
green technologies, on 21 July 2021, Plexus received the London Stock
Exchange's Green Economy Mark, an accolade awarded to companies and funds
where 50% or more of their revenues are attributable to environmental
solutions.
"On 9 August 2021, the Company announced that it was to re-enter the Jack-up
Exploration (Adjustable) Rental Wellhead market, through a Co-operation
Agreement with Cameron. Under the terms of the Agreement, Cameron will licence
and transfer Plexus' original designed Exact-15 ("Exact") system rental
wellhead inventory and Centric-15 ("Centric") mudline system equipment, as
well as provide manufacturing support. Cameron will also assist Plexus with
sales leads generation and market insight through a formal Sales Advisory
Board. Plexus will contract directly with customers, manage the full job
execution cycle using its in-house field technicians and infrastructure, and
will assume responsibility for the maintenance, repairs, and logistics of the
equipment provided. Plexus will pay Cameron a licence royalty fee based on
revenue generated from the sale and rental of the licenced equipment. This is
an important strategic move for Plexus and returns the Company to a business
sector it understands very well and in which it has a proven track record.
"During the reporting period, the Company announced that it had won a contract
with a leading North Sea operator for the provision of Plexus' POS-GRIP 10,000
psi leak-proof "HG" metal to metal sealing surface production wellhead,
together with associated spares, and valve equipment. This is a cash
generative, short-term contract of 120 days, with a tiered payment structure,
and deliverable by Q2 2022. Plexus is pleased to report that this contract
will be delivered on time and with revenues as anticipated."
Key functions that support our operations are Human Resources ('HR'), Quality
Health and Safety ('QHSE'), Information Technology ('IT') and Intellectual
Property (IP').
The Company maintains its Competency Management System through an internally
developed system 'Competency@Plexus' ('C@P'). This is monitored and accredited
by OPITO, the training and qualifications standards board. The annual
monitoring audit was successfully conducted in September 2021, full
accreditation was maintained with no findings raised by the auditor.
QHSE is an important function of the Company and Plexus' strong track record
enables it to demonstrate a high degree of compliance and credibility in the
oil and gas industry. Without the appropriate certifications, it would not be
possible for Plexus to be considered for certain contract awards by operators.
With this in mind, and with a commitment to provide a safe, practical, and
competent workplace for our employees, management has developed and adopted
very rigorous QHSE procedures in this field. In September 2021 the Company
achieved six consecutive years of zero lost time incidents ('LTIs') and,
following successful audits, Plexus has retained its API Q1 and ISO 45001
certifications.
The Group has continued to follow Government COVID-19 guidelines, with a
gradual transition from working from home during the pandemic towards a full
time return to the office. Plexus has been able to rely on robust IT and
security systems to ensure that neither work performance nor data security has
been compromised during this period.
We continue to develop our suite of IP both through patent protection and
ongoing research and development. Capitalised R&D salary costs for the 6
months ended 31 December 2021 was £223k.
Interim Results
Plexus' results for the six months to December 2021, and the activities
carried out during this period, reflect the Group's ongoing strategy of moving
towards the development of new revenue streams and new markets.
Continuing operations revenue for the six-month period ended 31 December 2021
increased to £734k, compared to the previous year's figure of £419k
following an increase in operational activity.
During the period Plexus continued to focus on preserving Group cash by
minimising spending, and controlling investment on capex, opex and
non-essential R&D, without compromising operations.
Continuing activities administrative expenses have decreased for the six
months to December 2021 to £2.51m (2020: £2.64m). Personnel numbers,
including non-executive board members are broadly in line with the prior year
at 38 (2020: 36). This staff structure has balanced the anticipation of
ongoing and future organic operational opportunities, particularly with the
move back into the rental wellhead exploration market, and development and
support for our POS-GRIP IP-led strategy involving external partners and
licensees, against the need to carefully manage the Group's costs and cash
resources. The current staff levels are around the minimum required to
maintain the operational infrastructure that has been developed to date,
including maintaining the Group's Business Management System, and retaining
all relevant and necessary accreditations, in addition to meeting operational
requirements.
For continuing operations, the Group has reported a loss of £2.0m in the
period which is in line with the prior year. The loss comes after absorbing
depreciation and amortisation costs of circa £0.8m.
The Group has not provided for a charge to UK Corporation Tax at the
prevailing rate of 19%. This is consistent with the prior year.
Basic loss per share for continuing operations was 1.94p per share which
compares to a 1.99p loss per share for the same period last year.
The balance sheet continues to remain strong, with the current level of
intangible and tangible property, plant and equipment asset values at £9.4m
and £2.8m respectively illustrating the amount of cumulative investment that
has been made in the business. Total asset values at the end of the period
stood at £26.3m.
As at 31 December 2021, the Group had cash and cash equivalents of £3.4m,
financial assets with a value of £4.7m and had drawn down £3.3m on a Lombard
banking facility provided by EFG.
Outlook
"It is now widely accepted that the transition to clean energies will take
several decades, with natural gas being recognised as the key transitional
hydrocarbon energy source. It is hard to believe that mid-pandemic in 2020,
demand for oil plummeted and traders were paying buyers to take storage of
oil, and that Brent crude was trading at US$23, a historical low. At the same
time global oil and gas investments fell from US$780 billion in 2019 to US$680
billion. Moving to the present, as economies recover post pandemic, global
energy demand together with uncertainties surrounding established supply
sources has resulted in huge price increases particularly in relation to gas.
In the UK gas prices have for practically two decades traded around 50p per
therm and lower, and this month, magnified by the Ukraine crisis gas briefly
hit over 550p per therm.
"At the same time, the oil price shot up earlier this month to circa US$139 a
barrel before settling closer to $100. In response to this growing demand, and
the need for the West to diversify its strategic supply sources, both oil and
gas investments are showing signs of a strong recovery for example in terms of
growing rig utilisation, and this will translate into more activity for oil
services companies. Importantly, natural gas is likely to be used for a longer
period as a transition fuel while renewable energies mature technologically
and economically. This endorsement was underlined by the BBC in a report in
early February, confirming that the European Commission had decided to
classify gas as a 'sustainable investment' if it meets certain targets.
"Perhaps none of this should be such a surprise in a world where fossil fuels
combined make up 83% of the energy mix, and oil and gas alone account for 56%.
These are fast declining assets once they are producing, and our industry
needs to invest enough to offset the 5m to 6m barrels per day ('b/d') normal
rate of decline. Hardly a surprise therefore that Opec said earlier in the
year that demand for its oil in 2022 will be about 1mn b/d higher than last
year, and that longer term Opec sees current global demand of 100m b/d rising
to 108m b/d, or 28 per cent of energy requirements by 2045. It would appear
that a combination of an over assumption that a COVID 'shackled' global
economy was pointing to ongoing lower energy use, combined with an 'overshoot'
of green initiatives resulting in a sharp pivot away from hydrocarbons has all
conspired to create energy supply constraints that perhaps should have been
better anticipated.
"The upshot of all this is that despite current aspirations, hydrocarbons have
a role to play in the transition to NetZero and are likely to remain an
important part of the world's energy mix for much longer than some pundits had
predicted. These challenges have of course been sadly magnified by the war in
Ukraine, and the realisation that Europe's dependence on Russian oil and gas
is not strategically sensible or acceptable. For oil services companies such
developments point to a better future than many would liked to have believed,
and is evidenced by a recent green light given by the Government for six North
Sea oil and gas projects to proceed later this year. Further, the Prime
Minister has just announced the setting up of an energy task force headed up
by two industry experts to boost the UK's oil and gas supplies which will
include the North Sea.
"There will still however rightly be a push for operators to be greener, safer
and to use technology to optimise wells and reduce harmful emissions. Perhaps,
it is unsurprising that the USA has led the clean agenda by pledging US$1.15
billion to clean up orphaned oil and gas wells, and we are hopeful that other
countries will follow suit, although Plexus has always maintained that the
prevention of such environmental issues is far better than supposed cures
which are not guaranteed, especially for the long term. A key backdrop to
these developments is that Plexus owns an extensive IP suite which has and
will continue to deliver innovative solutions for the oil and gas industry,
and which can also involve retrofitting of bespoke equipment. This has been
recognised by our licensees, and we will be doing everything we can to
capitalise on this important asset.
"In summary, Plexus believes it will benefit from strong market drivers across
the oil and gas industry, including the demand for oil and gas being likely to
outstrip supply for some time. This, coupled with the recognition that gas
will continue to play a key transitional role in the provision of sustainable
green energy makes us optimistic about the future as drilling activities gain
a new momentum."
J Jeffrey Thrall
Non-Executive Chairman
18 March 2022
Plexus Holdings Plc
Unaudited Interim Consolidated Statement of Comprehensive Income
For the Six Months Ended 31 December 2021
Six months to Six months to Year to
31 December 31 December 2020 30 June
2021 2021
£'000 £'000 £'000
Revenue 734 419 2,017
Cost of sales (130) (36) (1,062)
------- ------- -------
Gross profit 604 383 955
Administrative expenses (2,512) (2,641) (5,501)
Operating loss (1,908) (2,258) (4,546)
Finance income 81 106 143
Finance costs (159) (40) (103)
Other income 11 180 211
Share in profit of associate 22 17 (77)
------- ------- -------
Loss before taxation (1,953) (1,995) (4,372)
Income tax credit (note 6) - - 262
------- ------- -------
Loss after taxation from continuing operations (1,953) (1,995) (4,110)
Loss after taxation from discontinued operations - - (392)
------- ------- -------
Loss for Year (1,953) (1,995) (4,502)
Other comprehensive income - - -
------- ------- -------
Total comprehensive income (1,953) (1,995) (4,502)
------- ------- -------
Loss per share (note 7)
Basic from continuing operations (1.94p) (1.99p) (4.09p)
Diluted from continuing operations (1.94p) (1.99p) (4.09p)
Basic from discontinued operations - - (0.39p)
Diluted from discontinued operations - - (0.39p)
Plexus Holdings PLC
Unaudited Interim Consolidated Statement of Financial Position
As at 31 December 2021
31 December 2021 31 December 2020 30 June
2021
£'000 £'000 £'000
ASSETS
Goodwill 767 767 767
Intangible assets 9,435 9,920 9,644
Property, plant and equipment (note 9) 2,798 3,076 2,961
Non-current financial asset 4,705 3,044 3,042
Investment in associate 743 865 721
Deferred tax asset 1,899 2,130 1,899
Other Receivables - - -
Right of use asset 1,093 1,397 1,245
------- ------- -------
Total non-current assets 21,440 21,199 20,279
------- ------- -------
Inventories 663 1,385 575
Trade and other receivables 852 3,396 1,051
Current income tax asset - - -
Cash and cash equivalents 3,379 3,384 5,175
------- ------- -------
Total current assets 4,894 8,165 6,801
------- ------- -------
TOTAL ASSETS 26,334 29,364 27,080
------- ------- -------
EQUITY AND LIABILITIES
Called up share capital (note 12) 1,054 1,054 1,054
Shares held in treasury (2,500) (2,500) (2,500)
Share based payments reserve 674 674 674
Retained earnings 21,811 26,271 23,764
Total equity attributable to equity holders ------- ------- -------
of the parent 21,039 25,499 22,992
Lease liabilities 1,015 1,220 1,085
------- ------- -------
Total non-current liabilities 1,015 1,220 1,085
Trade and other payables 670 1,239 643
Bank Lombard facility 3,294 1,094 2,044
Current income tax liability - - -
Lease liabilities 316 312 316
------- ------- -------
Total current liabilities 4,280 2,645 3,003
------- ------- -------
Total liabilities 5,295 3,865 4,085
------- ------- -------
TOTAL EQUITY AND LIABILITIES 26,334 29,364 27,080
------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Change in Equity
For the Six Months Ended 31 December 2021
Called Up Shares Held in Treasury Share Based Payments Reserve Retained Total
Earnings
Share Capital
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
Total comprehensive income for the period - - - (1,953) (1,953)
------- ------- ------- ------- -------
Balance as at 31 December 2021 1,054 (2,500) 674 21,811 21,039
------- ------- ------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Cash Flows
For the Six months ended 31 December 2021
Six months to 31 December 2021
Six months to 31 December 2020 Year to
30 June
2021
£ 000's £ 000's £ 000's
Cash flows from operating activities
Loss before taxation from continuing activities (1,953) (1,995) (4,372)
Loss before taxation from discontinued activities - - 20
------- ------- -------
Loss before tax (1,953) (1,995) (4,352)
Adjustments for:
Depreciation, amortisation and impairment charges 838 864 1,701
Gain on disposal of property, plant and equipment (1) (1) (1)
Fair value adjustment of on financial assets 112 (41) 19
Lease liability re-assessment - - 25
Share in (profit) / loss of associate (22) (17) 77
Other income (11) (180) (123)
Investment income (81) (65) (143)
Interest expense 47 40 84
Changes in working capital:
(Increase) / decrease in inventories (88) (515) 295
Decrease / (increase) in trade and other receivables 199 (414) (255)
Increase / (decrease) in trade and other payables 27 461 (135)
------- ------- -------
Cash used in operating activities (933) (1,863) (2,808)
Net income taxes received - 76 157
------- ------- -------
Net cash used in operating activities (933) (1,787) (2,651)
------- ------- -------
Cash flows from investing activities
Funds invested in financial instruments (1,775) (8) (66)
Other income 11 180 123
Dividend received from associate - 50 100
Purchase of intangible assets (252) (53) (235)
Deferred proceeds from sale of discontinued operation - - 2,186
Interest and investment income received 81 65 143
Purchase of property, plant and equipment (62) (58) (170)
Net proceeds from of sale of property, plant and equipment 2 1 1
------- ------- -------
Net cash (used) / generated from investing activities (1,995) 177 2,082
------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Cash Flows (continued)
For the Six months ended 31 December 2021
Cash flows from financing activities
Drawdown of banking facility 1,250 1,094 2,044
Repayments of lease liability (87) (147) (342)
Interest paid (31) (40) (45)
------- ------- -------
Net cash inflow / (outflow) from financing activities 1,132 907 1,657
------- ------- -------
Net decrease in cash and cash equivalents (1,796) (703) 1,088
Cash and cash equivalents at brought forward 5,175 4,087 4,087
------- ------- -------
Cash and cash equivalents carried forward 3,379 3,384 5,175
------- ------- -------
Notes to the Interim Report December 2021
1. This interim financial information does not constitute statutory accounts
as defined in section 435 of the Companies Act 2006 and is unaudited.
The comparative figures for the financial year ended 30 June 2021 are not the
Company's statutory accounts for that financial year. Those accounts have been
reported on by the company's auditors, Crowe U.K. LLP, and delivered to the
registrar of companies. The report of the auditors was (i) unqualified, (ii)
did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498(2) or (3) of the Companies Act 2006.
The interim financial information is compliant with IAS 34 - Interim Financial
Reporting.
The accounting policies are based on current International Financial Reporting
Standards ("IFRS"), International Financial Reporting Interpretation Committee
("IFRIC") interpretations and current International Accounting Standards Board
("IASB") exposure drafts that are expected to be issued as final standards and
adopted by the EU such that they are effective for the year ending 30 June
2022. These standards are subject to on-going review and endorsement by the EU
and further IFRIC interpretations and may therefore be subject to change.
2. Except as described below the accounting policies applied in these
interim financial statements are the same as those applied in the Group's
consolidated financial statements as at and for the year ended 30 June 2021
and which are also expected to apply for 30 June 2022.
The changes in accounting policy set out below will also be reflected in the
Group's consolidated financial statements for the year ending 30 June 2022.
Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16
A number of other amendments to standards not yet endorsed include:
· Classification of liabilities as current or non-current (Amendments
to IAS 1)
· Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2)
· Definition of Accounting Estimate (Amendments to IAS 8)
· Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)
The Directors have considered those standards, amendments and interpretations,
which have not been applied in the financial statements but are relevant to
the Group's operations, that are in issue but not yet effective and do not
consider that they will have a material impact on the future results of the
Group.
3. This interim report was approved by the board of directors on 18 March
2022.
4. The directors do not recommend payment of an interim dividend in relation
to this reporting period.
5. There were no other gains or losses to be recognised in the financial
period other than those reflected in the Statement of Comprehensive Income.
6. No corporation tax provision has been provided for the six months ended
31 December 2021 (2020: nil). As a result, there is no effective rate of tax
for the six months ended 31 December 2021 (2020: 0%).
7. Basic earnings per share are based on the weighted average of ordinary
shares in issue during the half-year of 100,435,744 (2020: 100,435,744).
8. The Group derives revenue from the sale of its POS-GRIP friction-grip
technology and associated products, and licence income derived from its
various licensing agreements. These income streams are all derived from the
utilisation of the technology which the Group believes is its only segment.
Business activity is not subject to seasonal fluctuations.
9. Property plant and equipment
Tenant Assets under construction Motor vehicles
Buildings Improvements Equipment £000 £000 Total
£000 £000 £000 £000
Cost
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
Additions - - 43 19 - 62
Transfers - - 19 (19) - -
Disposals - - - - - -
----- ----- ----- ----- ----- -----
As at 31 December 2021 3,740 714 5,623 - 17 10,094
----- ----- ----- ----- ----- -----
Depreciation
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
Charge for the year 76 17 130 - 2 225
On disposals - - - - - -
----- ----- ----- ----- ----- -----
As at 31 December 2021 1,719 583 4,981 - 13 7,296
----- ----- ----- ----- ----- -----
Net book value
As at 31 December 2021 2,021 131 642 - 4 2,798
----- ----- ----- ----- ----- -----
As at 30 June 2021 2,097 148 710 - 6 2,961
----- ----- ----- ----- ----- -----
10. Investments
£'000
Investment in associate at 30 June 2020 898
Share of profit for the period (77)
Dividends received (100)
-----
Investment in associate at 30 June 2021 721
Share of profit for the period 22
-----
Investment in associate at 31 December 2021 743
-----
On 14 December 2018 Plexus Ocean Systems Limited acquired a 49% interest in
Kincardine Manufacturing Services Limited ('KMS') for a consideration of
£735k plus associated legal fees. KMS is a precision engineering company
which serves the oil and gas industry. This is viewed as a long-term strategic
investment by Plexus. KMS is based at Sky House, Spurryhillock Industrial
Estate, Stonehaven, Aberdeenshire AB39 2NH.
Following the investment Graham Stevens, Plexus' Finance Director was
appointed to the board of KMS. The company remains under the control and
influence of the 51% majority shareholders.
The summary financial information of KMS, extracted on a 100% basis from the
accounts for the year to 31 December 2021 is as follows:
2021
£'000
Assets 2,747
Liabilities 1,802
Revenue 2,819
Loss after tax (143)
11. Discontinued operations
Six months to 31 December 2021 Six months to 31 December 2020 Year to
30 June
2021
£'000 £'000 £'000
Revenue - - -
Expenses - - 20
(Loss)/Profit before tax of discontinued operations - - 20
Income tax credit - - (412)
(Loss)/Profit after tax of discontinued operations - - (392)
12. Share Capital
Six months to 31 December 2021 Six months to Year to
31 December 2020 30 June
2021
£'000 £'000 £'000
Authorised:
Equity: 110,000,000 (June 2021 & Dec 2020: 110,000,000) Ordinary shares of 1,100 1,100 1,100
1p each
Allotted, called up and fully paid: ----- ----- -----
Equity: 105,386,239 (June 2021 & Dec 2020: 105,386,239) 1,054 1,054 1,054
----- ----- -----
Notes
Plexus Holdings plc (AIM: POS) is an IP led company focussed on establishing
its patented leak-proof POS-GRIP® wellhead and associated 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 HG® metal-to-metal
sealing systems. Having protected the environment for many years through
these technological innovations, the Company was awarded the London Stock
Exchange's Green Economy Mark in July 2021 and continues to place emphasis on
its ability to reduce harmful methane emissions and unnecessary maintenance
and intervention costs.
Headquartered in Aberdeen, the Company has provided leak-free wellhead
performance in over 400 wells worldwide and worked with an array of blue-chip
oil and gas company clients. As well as generating direct revenues from
securing orders for surface production wellheads particularly in the UK and
European North Sea regions, the Company has several licencing/collaboration
agreements with major partners including FMC Technologies, which is a
subsidiary of TechnipFMC, and LLC Gusar in Russia. Furthermore, it works
closely with Cameron, a Schlumberger Group company Cameron has a non-exclusive
licence to use the POS-GRIP and HG® metal-to-metal seal method of wellhead
engineering for the development of conventional and unconventional oil and gas
surface wellheads, and Plexus entered into a Cooperation Agreement, which
enabled Plexus to return to the Jack-up Exploration (Adjustable) Wellhead
rental business for 'through the BOP' jack-up applications, where Cameron will
help to provide Plexus with sales leads and market insight through a formal
Sales Advisory Board.
Plexus' current suite of products and applications include: "HG" wellheads,
which combine POS-GRIP technology with gas tight leak free metal-to-metal
sealing; the Python® subsea wellhead, developed in a Joint Industry Project
with several industry leaders; the POS-SET™ Connector for the
de-commissioning and abandonment market; and Tersus-PCT, an innovative HP/HT
tie back connector product. Having proved the superior uniquely enabling
qualities of POS-GRIP Technology, Plexus is now also focused on establishing
its technology and equipment in other markets such as Plug and Abandonment
de-commissioning, carbon capture, gas storage, hydrogen and geothermal where
it can play an important role in reducing harmful methane emission risks as
operators strive to deliver on ESG commitments and NetZero goals in a safe and
cost-effective way.
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