Shares in Plexus Holdings (POS) are down by around a quarter year-on-year, reflecting a general derating of oil services stocks. Yet the designer of proprietary wellhead systems increased its interim operating profits by 14 per cent to £2.1m in the last six months of 2014 - a period in which crude oil prices nearly halved.
Aberdeen-based Plexus isn't immune to the effects of Brent crude's slide, but should be somewhat insulated by its focus on technical innovation and safety. The company's POS-GRIP wellhead system is a disruptive technology, and its latest product variants, which are being jointly developed with industry heavyweights like BP (BP.), are targeted at the increasingly lucrative markets for subsea and high-pressure or high-temperature drilling. Commercialisation of these areas is expected to gain momentum through 2015.
During the period, Plexus was awarded contracts by both BG Group (BG.) and Det Norske Oljeselskap, each worth around £1.9m. Since the year-end further deals worth around £2.3m have been signed, including a purchase order for the company's new POS-SET Connector product from Centrica Energy for use on a well originally drilled 32 years ago offshore of Holland. Given the number of ageing wells in the North Sea and other regions, the Centrica deal could point the way to another significant revenue stream.
Broker Cenkos anticipates EPS of 5.9p in 2015, down from 6.0p last year.
| PLEXUS HOLDINGS (POS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 200p | MARKET VALUE: | £170m | |
| TOUCH: | 192-200p | 12-MONTH HIGH: | 325p | 165p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 41p* | NET DEBT: | 12% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 12.6 | 1.9 | 1.85 | 0.48 |
| 2014 | 13.5 | 2.2 | 2.32 | 0.51 |
| % change | +7 | +16 | +25 | +6 |
Ex-div: 6 Apr Payment: 22 Apr *Includes intangible assets of £12m, or 14p a share. | ||||
