Plexus Holdings slips into losses but confident of oil rebound

AIM-listed Plexus Holdings’ revenue decreased due to the drop in oil prices and the reduction in the oil and gas engineer’s drilling activities.

The sharp fall in oil industry exploration activity following the slump in oil prices has seen the North Sea UK continental shelf especially hard hit, which resulted in revenue falling 61% to £11.23m in the year ended 30 June.

The company swung to a loss after tax of £5.79m and a basic loss per share of 6.39p from a £5.43m profit and 6.40p earnings per share last year.

The company had net cash of £9.9m at the year end.

During the year the company restructured which resulted in a near 50% reduction in personnel costs and general overheads to £7.4m, while research and development costs, excluding costs of building test fixtures, totalled £1.98m, a reduction of 52%.

The company said it believes that the sharp fall seen in the number of exploration wells drilled across the world had sown the seeds for the next upturn due to an impending 'supply crunch' which is already seeing a recovery in the price of oil.

Chief executive Ben van Bilderbeek said: "Whilst we are disappointed with this set of results, particularly following on from a record prior year we regard the current cyclical downturn as just one backwards step in what we believe will prove to be a highly rewarding journey for our shareholders.

“Cycles will come and go within our sector, however the benefits of our Pos-Grip technology will endure meaning that demand for Plexus' wellhead equipment should increase as the global demand for hydrocarbons continues to rise.”

Shares in Plexus Holdings were down 8.9% to 55p at 0812 BST.