Plexus Holdings PLC (LON:POS) chief executive Ben van Bilderbeek says there’s “some way to go” before improving oil market sentiments equate to stronger financial results, but the company has seen a marked increase in enquiries.
In this morning’s results statement, for the six months to December 31, van Bilderbeek told investors that several enquiries are moving forward, but he expects those deals will move into the 2017/18 financial year.
For the first half, Plexus reported sales revenues of £3.77mln (H1 2015: £6.76mln) and a £2.5mln loss after tax (H1 2015: £3.5mln). The company ended the first half with £10.1mln, up from £4.4mln.
Plexus added that whilst it remains committed to distributing income to shareholders, though it said that in view of the ongoing reduction in industry activity it is prudent to suspend dividend payments.
The company added that it will look to reinstate the dividend at the earliest opportunity.
"Looking to the future I am hopeful that the bottom of the cycle has been reached,” van Bilderbeek said.
“The industry has realigned itself to an oil price that is closer to US$50 oil as opposed to the US$100 a barrel that had prevailed for much of this decade, and capex and opex costs have been significantly reduced.
“It will take time for the next upswing to take root, but with demand for oil and gas forecast to continue rising, new discoveries will have to be made not only to cover the natural decline of mature fields but also to make up for the exceptional drop in exploration activity we have seen over the last two years.
He added: “Quite simply - new wells will have to be drilled.
“With unique and superior technology, an inventory of 62 wellheads, a blue-chip customer base, licensing agreements in place with established local partners in important hydrocarbon regions, a growing suite of products and a strong balance sheet, Plexus is well placed to help operators deliver these wells around the world and in the process, generate value for all its shareholders."