Plexus shares slide on '˜significant' profit warning

Oil and gas technology firm Plexus Holdings saw its shares hammered yesterday after warning that full-year results will fall 'very significantly' below City expectations.

Plexus Holdings chief executive Ben van Bilderbeek

At one stage shares in the Aberdeen-based company almost halved as the market reacted to the surprise announcement from a firm that had been seen as relatively well insulated from the collapse in oil prices given its technology helps operators reduce costs.

Chief executive Ben van Bilderbeek – who saw more than £25 million wiped off the value of his own stake in the company – yesterday admitted he was “extremely disappointed” that the company’s finances had been so badly hit.

Plexus, which develops wellheads aimed at preventing the type of blowout behind the 2010 Gulf of Mexico disaster, said the slump in oil prices has led to a slowdown in activity among its customers to the extent that it “cannot see the reduced activity levels being recovered in the current financial year”.

The company is due to announce its half-year figures, covering the six months to 31 December, in March.

In yesterday’s trading update, it said revenues for the first half are expected to come in below £7m – compared with £13.5m for the same period a year earlier. Second-half revenues are forecast to be about 20 per cent lower than in the first six months of its financial year.

Plexus, which employs 154 people, said it was taking “significant cash conservation steps” including reducing capital and operating expenditure which the board said will stabilise the company.

Despite the downturn, which has seen the price of crude fall below $30 a barrel, the firm said it was is in talks over a number of “potentially significant” projects around the world. Last month it received a £180,000 order for its Pos-Grip wellhead system from North Sea operator Premier Oil, and van Bilderbeek insisted the North Sea will remain an important market.

“We view the current situation as cyclical and we therefore expect to see the oil price strengthen as and when demand supply dynamics enter equilibrium,” he said.

Shares in the company closed down 54.25p, or 44.2 per cent, at 68.5p. The shares had been trading at more than 240p last summer.