Cavendish has reiterated its upbeat view on Plexus Holdings PLC (AIM:POS) following Thursday’s operational update, arguing that the oil equipment group remains well placed to benefit from a looming wave of North Sea decommissioning work.
The broker kept its 22p price target, implying almost a four-fold rise from the current 5.6p, and repeated its 'buy' rating.
The note highlights forecasts that spending on decommissioning, essentially the dismantling and safe closure of old wells, is expected to jump from about 15% of total North Sea expenditure today to roughly 30% by 2030.
That shift creates a sizeable opportunity for companies such as Plexus, whose speciality is rental wellhead systems used in plugging and abandonment projects.
Cavendish says the group has suffered some “timing volatility” this year as operators push projects into the second half of 2026, partly because of policy decisions such as the Energy Profits Levy and the ban on new exploration licences. Even so, it thinks the long-term direction of travel remains positive.
The broker also notes that Plexus has taken out a new £2 million loan facility from OFM Holdings, a company controlled by its chairman, to ensure working capital is available as activity picks up.
The extra cash will allow Plexus to continue expanding its rental fleet from 12 to 16 units next year, while keeping preparations on track for work in the Middle East.
With management expecting 2026 results to land in line with forecasts and reporting a healthy sales pipeline, Cavendish says the investment case is intact. The shares, it adds, offer “291% upside” to its target price.