Plexus margins squeezed by increased investment

Oil and gas engineering services business Plexus will fall short of earnings expectations in its current trading year as a result of an increased investment into its POS-Grip wellhead sealing technology.

Plexus told investors on Monday that revenues were on track, with enquiries for its POS-Grip technology on the rise, but warned that promotional costs and a higher level of investment had impacted the group's margins, EBITDA and pre-tax losses.

Chief executive Ben Van Bilderbeek said: "We believe that the company's short-term financial performance should not be seen as the key indicator, with the critical strategic goal being the continued and growing interest in Plexus' POS-GRIP technology.

"Our overall objective, therefore, is to establish our 'gas proof' POS-GRIP equipment as an enabling technology for the wider energy industry."

The AIM-listed group also revealed that the sale of its equipment services business to TechnipFMC for £14m upfront had helped it end the year with cash in the bank despite the recent KMS and share buyback.

As of 0940 GMT, Plexus shares had sunk 8.29% to 44.94p.