Oilfield service companies live in challenging times, but you wouldn't guess that from Plexus's (POS) robust full-year figures. The Aberdeen-based developer of POS-GRIP wellhead technology delivered another year of record metrics, with cash profit having jumped 19 per cent to £9m. The group gross margin remained stable at over 71 per cent, too. That's because most sales are linked to high pressure and high temperature POS-GRIP equipment, where profit margins are higher than for low pressure equipment contracts.
Plexus is also successfully expanding its international footprint. Sales outside of the UK and Europe now generate 38 per cent of total revenue, representing a 17 per cent year-on-year increase. Management is particularly encouraged by the steady uptake of its technology in Asia. For now, though, Plexus's key market remains the UK Continental Shelf (UKCS), which generates 37 per cent of group revenues.
While the level of exploration drilling on the UKCS has fallen, management is hopeful that activity should pick up now the Scottish independence issue has been resolved. Moreover, it's likely that the government will offer improved fiscal incentives for offshore drillers in response to Wood Report recommendations published earlier this year.
Broker Numis Securities expects pre-tax profit for 2015 of £6.5m, giving EPS of 6.3p (5.8p in 2014).
| PLEXUS HOLDINGS (POS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 250p | MARKET VALUE: | £212m | |
| TOUCH: | 250-255p | 12-MONTH HIGH: | 325p | LOW: 230p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 41p* | NET CASH: | £2.4m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 13.1 | 0.7 | 0.9 | 0.72 |
| 2011 | 15.4 | 1.6 | 1.6 | 0.78 |
| 2012 | 19.7 | 3.1 | 3.0 | 0.89 |
| 2013 | 25.6 | 4.3 | 3.7 | 0.99 |
| 2014 | 27.0 | 5.4 | 6.0 | 1.1 |
| % change | +5 | +26 | +63 | +11 |
Ex-div: 6 Nov Payment: 17 Dec *Includes intangible assets of £11.2m, or 13p a share | ||||
