Repositioning of company
Plexus facing ‘new beginning’ as oil price rises
Ben van Bilderbeek: game changing deal
Plexus Holdings is repositioning itself as an IP-led research and development company, says its chief executive.
Ben van Bilderbeek will tell shareholders at today’s AGM that the company had been unable to combat a depressed exploration drilling market.
However, the current financial year “very much represents a new beginning for Plexus, not just in terms of the strengthening of the oil price which, thanks to improving sentiment, today trades above US$60 per barrel, but also in terms of corporate activity and a new strategic direction.”
The slump in the oil price saw a fall in full year revenues to £4.75m (2016: £11.23m); an EBITDA loss of £2.48m (2016: £1.56m loss); a loss after tax of £5.7m (2016: £5.79m loss) after incurring £4.47m of depreciation and amortisation; and a basic loss per share of 5.41p (2016: 6.39p loss per share).
Mr van Bilderbeek will say the figures reflect the depressed levels of exploration activity experienced over the course of the year to 30 June.
He said the sale of its jack-up exploration business to oil and gas engineer Technip FMC, announced in October, is game-changing.
It generates an immediate cash payment to Plexus of £15m less certain adjustments, which has the potential through a three year earn out to increase the total value of the transaction to as much as £42.5m. There is a collaboration agreement with Technip.
“Importantly this milestone repositions Plexus as an IP-led research and development licensing business,” Mr van Bilderbeek says.
“Our goal has been and continues to be to build on our near 100% market share of the high pressure/high temperature market in the North Sea.
“Having won orders for wells in hydrocarbon jurisdictions as far afield as Asia, Africa and Australia, notable progress has been made.
“We believe the sale of our jack-up exploration rental business and the Collaboration Agreement with a global company with the market reach and expertise of Technip will accelerate the roll-out of our family of products, not just in jack-up exploration but across the wider energy sector.
“Together with an improving outlook for the industry that is founded on supply and demand moving closer towards equilibrium, Plexus is well placed to fully realise the potential of its ground-breaking technology and in the process generate significant value for all its shareholders.”