Plexus Holdings PLC (AIM:POS) reported a smaller annual loss and said it expects to return to profits this year as the drive to reduce leaks and other emissions from the oil and gas industry is opening a new chapter in its story.
The AIM-quoted engineering firm, known for its POS-GRIP wellhead technology, reported revenue of £1.5 million for the 12 months to 30 June 2023, compared to the prior year's £2.3 million.
Pre-tax losses were narrowed to £4.2 million from £5.6 million.
Although revenues were down, chief executive Ben van Bilderbeek said, “the board's focus on reversing these losses and the decisions taken as part of the revised strategy has begun to have a positive impact with significantly increased revenues and a return to profitability anticipated for the 2023/24 financial year”.
Cash reserves ended the year at £1.45 million, down from £5.8 million last year, though bank borrowings were reduced to nil from £4 million a year earlier.
Just before year-end, technology collaboration partner SLB (Schlumberger) exercised its option to extend its non-exclusive licence agreement for an additional six years, with confirmation that its testing programme was making good progress.
And there has been a flurry of activity post period end, including £850,000 of revenue in September from Plexus' Mud Containment System used sequentially on four different wells, the securing of a £700,000 loan from CEO van Bilderbeek for working capital, and a £549,230 fundraising in October.
Plexus also reported the value of a key rental contract had jumped from £5 million to £8 million in August and in the past two months showed momentum with two contracts worth £100,000 and £175,000 respectively for rental of its Exact adjustable wellhead system and Centric Mudline Suspension equipment for plug & abandonments in the North Sea.
Summing up, van Bilderbeek said the company’s technology can “help address society's demands for O&G operators to be responsible players through the supply of our unique technology which can contribute to achieving emission reduction targets”.
He added: “Although there is still some debate about the extent of the impact humanity has on global warming, the current 1.5-degree centigrade cap will be bolstered by better technology, and in this respect, I have no doubt that Plexus' proprietary POS-GRIP IP and its wellhead equipment designs will achieve the recognition they deserve, and I look forward to reporting further progress over the coming months.”