REG - Plexus Holdings Plc - Preliminary Results
22/11/2021 07:05
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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® 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 £2,017k (2020: £525k)
o Discontinued operations sales revenue £nil (2020: £nil)
· Adjusted EBITDA on continuing activities £2.69m loss (2020:
£3.08m loss)
· Continuing operations operating loss £4,546k (2020: £5,681k)
o Discontinued operations operating profit £20k (2020: loss £2,432k)
· Continuing operations operating loss after tax £4,110k (2020:
£4,058k)
o Discontinued operations loss after tax £392k (2020: £2,549k 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 £5.18m (2020: £4.09m)
· Bank borrowing of £2.04m (2020: nil) relating to a drawn down
Lombard facility
· The Group has £3.04m invested in financial assets (2020: £3.0m)
OPERATIONAL OVERVIEW
Building a portfolio of licensing and direct sales revenue streams centred
around establishing Plexus' leak-proof POS-GRIP® 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 £2 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®
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®
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 YEAR ENDED 30 JUNE 2021
2021 2020
£'000 £'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
(http://www.plexusplc.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 9772
Isabel de Salis St Brides Partners Ltd Tel: 020 7236 1177
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 £2,017k (2020: £525k). 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 £100,000 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 £2,017k, an increase from £525k 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 £5.50m (2020: £5.98m). Within this total,
the continuing salary component remained the largest at £2.79m compared to
£2.90m 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 £2.69m,
compared to a loss of £3.08m in the previous year. Adjusted EBITDA on
continuing operations is calculated as follows:
2021 2020
£'000 £'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
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Adjusted EBITDA on continuing operations (2,692) (3,076)
------- -------
Loss Before Tax
Loss before tax on continuing operations of £4.37m compared to a loss in the
prior year of £5.05m. The loss on discontinued operations was £nil compared
to a loss of £2.55m in the prior year.
Tax
The Group shows a total income tax charge of £0.15m for the year compared to
a tax credit of £0.87m for the prior year. The income tax charge has been
split between continuing activities (£0.26m, 2020: £0.99m) and discontinued
activities (£0.41m charge, 2020: £0.12m 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 £735k plus
associated legal fees of £50k. At the year-end a share in loss of associate
of £77k (2020: profit £265k) 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 £nil (2020: £134k).
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 £9.64m, a decrease
of 6.7% from £10.33m last year. This movement represents investment of
£0.24m less the annual amortisation charge of £0.92m.
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 £0.36m in 2020 to
£0.24m 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 £2.96m compared to £3.27m last year. Capital expenditure on
tangible assets decreased to £0.17m compared to £0.19m last year.
Cash and Cash Equivalents
Net cash at the year-end was £3.14m (cash and cash equivalents of £5.18m
less the bank Lombard facility of £2.04m) compared to net cash of £4.09m
(cash and cash equivalents of £4.09m with no borrowing - in the prior year
reflecting a net cash outflow for the year of £0.95m (net increase in cash of
£1.09m per Statement of Cash Flows plus net increase in bank borrowings of
£2.04m).
The increase in bank borrowing represents £2.04m 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 £3.04m (2020: £3.00m) 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(®) subsea wellhead as well as the POS-SET
Connector(®) 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® 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® 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
£'000 £'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 (4,502) (6,607)
income for the year attributable to the owners of the parent
------- -------
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
£'000 £'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 Up Shares Held in Treasury Share Based Payments Reserve Retained Total
Earnings
Share Capital
£'000 £'000 £'000 £'000 £'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 £'000 £'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
£'000 £'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
£'000 £'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
£'000 £'000
Customer 1 1,485 489
Customer 2 386 -
3. Income tax credit
(i) The taxation charge for the year comprises: 2021 2020
£'000 £'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 on continuing activities for the year 2021 2020
£'000 £'000
Loss on ordinary activities before tax (4,372) (5,050)
Tax on (loss)/profit at standard rate of UK (831) (960)
corporation tax of 19% (2020: 19%)
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 balance 2021 2020
£'000 £'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
£'000 £'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 £1,290k 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 £1,290k 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 £15m, with an additional sum of up to £27.5m
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
£'000 £'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
£'000 £'000
Operating activities - -
Investing activities - -
Financing activities - -
----- -----
Net cash generated/(used) from discontinued activities - -
----- -----
5. Loss per share
2021 2020
£'000 £'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 Other
Intellectual Property Development Computer
Software
Total
£'000 £'000 £'000 £'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 under construction Motor vehicles
Buildings Improvements Equipment £000 £000 Total
£000 £000 £000 £000
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
£'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
£735k 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 £134k. 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
£'000 £'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 £19k (2020: £24k). 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
£'000 £'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
£'000 £'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
£'000 £'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 of year Cashflow At end of year
£'000 £'000 £'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 of year Cashflow At end of year
£'000 £'000 £'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® 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® 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® 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® 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™ 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.
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