Final Results

RNS Number : 7473O
Plexus Holdings Plc
16 October 2012
 



Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services

 

16 October 2012

 

Plexus Holdings plc ('Plexus' or 'the Group')

Preliminary Results for the year to 30 June 2012

 

Plexus Holdings plc, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® method of wellhead engineering, announces its preliminary results for the year ending 30 June 2012.

 

Results

·    Record revenue, EBITDA, and profit after tax

·    27.8% increase in revenue to £19.71m (2011: £15.42m)

·    96.8% increase in profit before tax to £3.09m (2011: £1.57m)

·    95.9% increase in profit after tax to £2.43m (2011: £1.24m)

·    33.0% increase in EBITDA to £6.24m (2011: £4.69m)

·    Gross margin increase to 70.9% (2011: 60.1%)

·    92.9% increase in basic earnings per share to 2.99p (2011: 1.55p)

 

Highlights

·    Strong forward order book as POS-GRIP® friction-grip wellhead equipment continues to gain market share, winning business from new international oil and gas operators in new territories, as well as repeat business from existing customers

·    Increased industry receptiveness to new and superior technology as a result of regulatory and government initiatives focused on safety standards and operational performance in a number of oil equipment related areas, particularly subsea following the Gulf of Mexico incident in 2010

·    First relief well standby contract with a value in excess of £4.0m over three years for the supply of back-up High Pressure/High Temperature ('HP/HT') wellhead equipment with a leading global oil and gas operator as part of contingency planning arrangements in the event that a relief well is needed during the drilling programme in the North Sea

·    Joint Industry Project ('JIP') for the new Plexus POS-GRIP subsea wellhead design ('HGSS™') gains significant support - major consulting partners now include Shell International Exploration and Production B.V., Maersk Oil North Sea UK Ltd. ('Maersk'), Wintershall Noordzee B.V., the UK entity of the world's largest offshore drilling company, Tullow Oil plc, Eni S.p.A., and Oil States International Inc.

·    Maersk agreed as part of the on-going JIP to contribute £0.26m towards the development and final testing of the HP/HT Tie-Back wellhead system; subsea related activities extended to the award of a £0.5m engineering design contract for a subsea wellhead HP/HT crossover system from Wintershall Noordzee B.V. which includes prototype qualification testing

·    New HP/HT customer contract wins with Vantage Drilling Company Inc. for the supply of wellhead equipment to a major Malaysian national oil and gas operator, and Santos Ltd for offshore Australia (following on from a first time contract in Australia for Apache Energy Australia in 2010)

·    HP/HT contract wins with existing customers included Gaz de France Suez E&P Ltd, Centrica Energy, Bowleven plc; a further X-HP/HT contract with BG International Ltd, a 10,000 psi standard pressure contract win with Niko Resources (Trinidad and Tobago) Limited; and for the fourth time, a two year extension framework agreement with Applied Drilling Technology International (the turnkey drilling division of Transocean Drilling U.K. Limited)

·    Post period end, secured a further 4 year contract with Brunei Shell Petroleum Sdn Bhd for the supply of HP/HT and standard pressure exploration wellhead equipment and services with a minimum value of £2m; a £1.15m two well standard pressure and HP/HT order from Talisman Energy Inc.; and a £1.0m HP/HT equipment contract for new customer Lotos Exploration and Production Norge AS

·    First licensing, manufacturing, distribution, and agency agreement signed with Breda Energia S.p.A ('Breda') for the supply and servicing of POS-GRIP products worldwide to Italian oil and gas major ENI S.p.A

·    American Petroleum Institute ('API') awarded the Plexus Aberdeen facility two licences in relation to the API Monogram Programme so that all equipment designed and manufactured in accordance with the relevant licences can now be stamped with an API Monogram - should further improve Plexus' equipment marketability internationally where such Monogramming is required

·    Successful placing of £6.2m of new and existing ordinary shares - £2.0m raised before expenses to support growth strategy, increase liquidity and broaden the institutional shareholder base

·    Board changes - Robert Adair retired as non-executive Chairman, Christopher Fraser joined as a non-executive director, and Jeff Thrall moved from non-executive director to non-executive Chairman

·    Capital investment increased by 97.6% to £4.62m (2011: £2.34m)

·    Research and Development ('R&D') spend increased by 68.7%, excluding costs of building new test fixtures, to £1.20m (2011: £0.67m)

·    The Board is today proposing a 16.3% increased final dividend of 0.5p per share (2011: 0.43p), which will be subject to shareholder approval at the Annual General Meeting ('AGM') to be held on 28th November 2012. If approved the dividend will be paid on 14th December 2012 to all members appearing on the register of members on the record date 26th October 2012. The ex-dividend date for the shares is 24th October 2012

For further information please visit www.posgrip.com or contact:

Ben van Bilderbeek

Plexus Holdings PLC    

Tel: 020 7795 6890

Graham Stevens

Plexus Holdings PLC

Tel: 020 7795 6890

Jon Fitzpatrick

Cenkos Securities PLC

Tel: 020 7397 8900

Ken Fleming

Cenkos Securities PLC

Tel: 0131 220 6939

Felicity Edwards

St Brides Media & Finance Ltd

Tel: 020 7236 1177

Frank Buhagair

St Brides Media & Finance Ltd

Tel: 020 7236 1177

 

Chief Executive Ben van Bilderbeek said:

"I am pleased to report an excellent set of financial results for the year which include a record performance in terms of revenues, margins, and profitability. Such strong on-going progress means that I am delighted to announce that the Board proposes a 16.3% increase in the final dividend of 0.5p per share for the year ended 30 June 2012, which will be submitted for approval at the Annual General Meeting.

"These results were achieved during a period where the Group has been particularly active at both the organic and strategic levels. Important rental exploration contracts were secured with both existing and new major international oil and gas operators across the world, particularly for HP/HT applications where our reputation goes from strength to strength, and we also increased the number of consulting partners to our pioneering HGSS subsea wellhead design JIP, signed an inaugural POS-GRIP licensing agreement with Breda, progressed our HP/HT Tie-Back wellhead system JIP, and achieved API Monogram Licence status.

"At the corporate level, we successfully completed a share placing in January 2012 which had the benefit of increasing the liquidity in our shares whilst helping to finance our various R&D projects and growing rental inventory. This placing broadened our institutional shareholder base and I would like to warmly welcome our new blue chip investors and thank our existing shareholders for their continued support. Such developments are part of the on-going development of Plexus both at an operational and corporate level and come at a time when there are growing signs of merger and acquisition activity in the oil services sector where the need for innovative technology such as ours is becoming increasingly recognised.

"These positive developments continue to reinforce our belief that whether the growing support for the POS-GRIP friction-grip method of engineering comes from our customers or investors, the unique advantages that our technology offers in terms of operational performance, safety, time, and cost savings will continue to drive market share gains both for existing surface and in due course subsea applications, whilst significantly improving current wellhead standards. However, it is important to stress that even though customer demand continues to exceed our current capacity to deliver as a result of our equipment being selected in preference to established conventional alternatives, we will continue to ensure that we maintain the high standards that we set ourselves and which our customers expect from us.

"In summary the Board remains confident that the future looks highly positive for Plexus. Our message to the industry is simple and gaining traction - wellhead equipment qualification test standards need to match as close as possible those of real field life conditions, as well as the same higher standards required of other critical performance items in the well such as casing and tubing couplings. Indeed, a major international oil and gas operator has recently issued a new set of test standard requirements for Surface and Subsea Wellhead and Christmas Tree Equipment, and we believe that Plexus is in a unique position to address this challenge. Such developments can only help accelerate our goal of becoming a leading specialist oil and gas services company by generating further interest from potential commercial and licensing partners, thereby delivering significant shareholder value in the years to come.

"Finally I would to thank Robert Adair who retired from the board this year after six years' service, and welcome Christopher Fraser onto the board as a new non-executive director."

Summary of Results for the year ended 30 June 2012


2012

2011


£'000

£'000

Revenue

19,706

15,421

EBITDA - before the effect of IFRS 2

6,238

4,690

EBITDA - after the effect of IFRS 2

5,987

4,504

Profit before taxation

3,088

1,569

Basic earnings per share (pence)

2.99

1.55

 



Chairman's Statement

Business progress

I am pleased to report that the Group made significant financial progress during the year as the increase in activity levels seen in the first half continued into the second half, resulting in a 27.8% increase in turnover to £19.71m for the year to 30 June 2012 (2011: £15.42m), a 33.0% increase in EBITDA to £6.24m (2011: £4.69m), and a 96.8% increase in profit before tax to £3.09m (2011: £1.57m), delivering a 92.9% increase in basic earnings per share of 2.99p (2011: 1.55p). In addition to making excellent organic progress with our exploration wellhead rental activities including the winning of new customers, which has ensured a healthy forward order book, we have continued to raise the awareness of our proprietary POS-GRIP method of engineering which has led to a significant level of industry support for various product development initiatives, in particular our new HGSS subsea wellhead design JIP. Such initiatives further extend the reach of our proprietary technology and, importantly, enable us to continue to further expand our extensive patent suite.

Strategy

Plexus owns a patented proprietary friction-grip method of engineering called POS-GRIP which to date we have applied with increasing success to the design and development of innovative wellhead equipment for supply to the oil and gas industry where we have secured a growing reputation with many major international and national operators around the world. Although conventional wellhead technologies have been around for decades, and the wellhead market is dominated by major international oil service supply companies, the benefits of POS-GRIP in terms of safety, operational efficiencies, and time savings, particularly for HP/HT and X-HP/HT applications, have enabled Plexus to compete directly against these formidable competitors and gain increasing market share around the world where we have chosen to focus to date on exploration jack-up surface drilling.

It has always been a key strategic goal of ours to firstly secure a place in the industry for POS-GRIP technology through our organic jack-up drilling activities, where we are now seeing clear evidence of a growing momentum. Our second aim was to leverage that success into other applications such as the volume production wellhead market, the fast growing subsea market, and related new product development opportunities, where we are now making significant progress. The end goal, which we feel increasingly confident of achieving, is the establishment of POS-GRIP as a new wellhead standard, where we move from being what we see as a wellhead of necessity to a natural wellhead of choice, and indeed preference. This strategy has been given a material boost by a significant increase in the level of governmental and regulatory scrutiny of oil and gas industry safety standards since the Gulf of Mexico incident in 2010, both in terms of preventative and response initiatives with regard to both personnel and the environment. Such events have had a direct impact on Plexus' activities and have already resulted in the launch of a number of directly related product and JIP initiatives, as well as additional rental contract activity such as the recently announced £4.0m relief well standby contract in the North Sea where it was determined that as a contingency planning measure back-up equipment needs to be readily available. We also believe that the proven safety benefits of 'through the blow-out-preventer' wellhead equipment will continue to gain ground, especially following the offshore Australia Montara incident where removing the blow out preventer ('BOP') was highlighted in the subsequent report.

When looking at the tremendous commercial opportunities that exist for expanding the range of POS-GRIP applications, the increased scrutiny by regulatory bodies regarding for example the selection of the 'best available and safest' technology ('BAST'); the renewed focus on addressing well known challenges and issues such as sustained casing pressure, known as SCP; and the proper installation, sealing, and locking down of the casing or lining has already ensured direct encouragement and input from major international operators as well as a greater receptiveness to new technology. These initiatives are particularly relevant to the predictable nature and simplicity of our technology, and the benefits of non rotation and preloaded lockdown as friction works in all directions (i.e. tubular members are held axially and radially).

The first of these announced some time ago is our HP/HT Tie-Back system to enable HP/HT exploration and pre-drilled production wells to be converted to either subsea or platform producing wells. No product currently exists on the market which can achieve a casing string tie-back to such wells in HP/HT conditions this is due in part to conventional technology using threaded connections which cannot be reliably engaged and disengaged in the uncontrolled remote environment in which subsea tie-back operations take place. The design contains unique patented features, and will utilize Plexus' metal-to-metal HG® seals which uniquely elevate the POS-GRIP Tie-Back connection to a standard that exceeds those of casing or tubing couplings. By 'saving' or 'converting' such wells significant financial benefits can be delivered to operators who would previously have abandoned such a well and 'written off' the cost, which we estimate as ranging from £50m to £300m, whilst also shortening the development cycle of an oil and gas field by several years with resultant significant cash flow benefits for the operator. This tie-back project was given a further boost in January 21012 when Maersk provided £0.26m of funding towards the development programme which is now approaching its final stages. There have been some delays due to issues relating to the test fixture, which interestingly can be a problem where the first time qualifying of equipment to such high specifications means that the test fixture itself has to be able to be built to endure the testing of such equipment. However, failure mode, effects, and criticality analysis (FMECA) is complete, hydraulic function and gas testing to high pressure has been successful, and temperature and bending testing is now underway. Encouragingly the anticipated first time user of the system estimates a saving per well in the region of £80m for the scope of work being considered. In addition the ability to 'make and break' high pressure connections remotely could in our opinion play an increasingly critical role in the emerging Artic exploration and subsequent production projects where there is already consensus that there is a need for equipment to be engaged and re-engaged as a result of various factors such as ice flows.

The second JIP that we are particularly excited about is the new subsea wellhead HGSS design project. This is gaining momentum and working towards the goal of taking our proven surface technology and equipment subsea by 2014. The POS-GRIP HGSS subsea wellhead is currently being designed to be safer and have fewer parts in the well bore than any other competing system whilst also sealing and locking down hangers as soon as cementing of the well is complete. The system will be inherently resistant to contamination as it will have no moving parts exposed to well bore fluids. The support from the industry is significant and the consulting partners to the project who attend and contribute to the regular JIP meetings both in terms of the design and engineering process now include Maersk, Shell, Wintershall, ENI, Tullow, and Oil States. It is our intention that the members of the JIP will potentially become end-users and commercial partners once the wellhead is fully built, tested and commercialised. Importantly, all intellectual property generated by the project will be owned by Plexus and will be added to our extensive and unchallenged patent suite. The project is making good progress - the technical specification of the 'base product' has been finalised, detailed engineering design is now underway, the conceptual detail of the subsea hydraulics and interface with control systems is complete, design of qualification test fixtures has begun and it is expected that physical testing of various elements of the system will begin in Q1 2013. The next stage is to complete full qualification testing, after which an opportunity to field test the system will be sought. Commercially, it is of further encouragement that in addition to the range of safety and operational features that are being engineered, initial assessments of the HGSS system also show significant time savings on installation as being achievable - estimated currently at over 3 days in 10,000 ft of water which would mean that, as with our HP/HT surface wellhead systems, the installation time savings alone could be greater than the capital value of the equipment.

We have identified a third sizeable commercial opportunity concerning subsea well abandonments and we have already received encouragement from a number of UK operators for this new project. In the future operators will benefit from tax incentives to abandon depleted wells that have been drilled in the North Sea and are deemed non-commercial. Plexus has been led to believe that there have been various major issues with re-attaching to these old wells in order to provide integrity so that abandonment work can then be safely carried out. Initial analysis suggests that wells may take some 30 days to be abandoned properly, resulting in costs of more than £15m per well. Some of these wells are 20-30 years old and there is much uncertainty as to the condition of the wellhead gasket and subsea wellhead profile resulting in damaged or corroded seal surfaces. Indeed the subsea wellhead may even be of an obsolete design. The nature of POS-GRIP technology is such that re-engagement to such wells could be deployed more safely, easily, and with significant time savings, so we are now assessing the opportunity for the development of a "POS-GRIP Subsea Well Abandonment Overshot Connector and Spool" product which would grip and seal direct to the old wellhead body outside diameter and offer a far larger seal area.

To support these various growth and product expansion strategies it is essential that we continue to invest in the business to ensure that we can meet the growing demand for our products and services, whilst executing our contracts in an efficient and safe manner. The key areas for such investment include the expansion of our HP/HT wellhead rental inventory pool where we have committed further significant capex, whilst also increasing our overhead including human resources ('HR') activities, R&D, IP, IT, and infrastructure. The benefits of such investment can already be seen, and in the case of HR we were able to increase our staff numbers by approximately 25% this year which was our largest annual percentage increase to date in one of the tightest labour markets in the world. Post period end we have continued this momentum and have already further increased staff numbers by over 7% during the first quarter of the current financial year. Importantly, we have recently appointed a HR Director in the Group whose main focus will be to ensure that our HR strategy is aligned with the business strategy, and that proactive HR plans are implemented to enable us to attract, recruit, retain, and develop the Plexus team. R&D continues to be a core part of our activities and ensures that we are continually innovating and expanding the range of POS-GRIP applications, as well as generating new IP such as subsea technology, that we can patent and protect for a further 20 years. We are also hopeful that the Group will in due course be able to benefit from the pending 'Patent Box' tax regime whereby subject to suitable qualification from 2013 profits generated may attract a reduced corporation tax rate from as low as 10%. The importance of successful R&D cannot be underestimated and, as Sir James Dyson recently wrote it is essential that engineers should both invent new technology and also evolve existing ones and that "too much focus on one and not the other you risk stagnation", whilst "investment into research and development, old and new, is the surest bet a technology company can make". I am pleased to say this is the ethos that Plexus has been pursuing for many years and will most certainly continue to do so, and which longer term we believe will take us into new markets such as geothermal, fracking, and CO2 storage where long-term seal performance is so important.

We are confident that we can fund such activities through existing cash resources, increased cash flow from operations, and that we will continue to operate comfortably within our established bank facilities which are currently £6.0m with Bank of Scotland Corporate.

Staff

On behalf of the Board, I would like to thank all our employees for their dedication and hard work during another successful year that has not only delivered record financial results but, importantly, has also seen us increase our staff numbers by a quarter as we continue to expand our organic business activities and progress various strategic initiatives to meet growing industry support for and acceptance of our friction-grip method of engineering. In addition to welcoming our new employees, I would also like to welcome Christopher Fraser as a non-executive director to the board who has the experience to help us navigate the various international regulatory and legislative initiatives that are being placed on our industry.

Outlook

As this year's results have demonstrated, the benefits that POS-GRIP wellhead equipment and friction-grip technology can deliver to major oil and gas operators are becoming increasingly clear and better understood, not just by our expanding customer base but also by regulators and industry partners.

This progress is taking place against a global back-drop where the growing demand for energy is underpinning the need for increased exploration and production activity, as evidenced by higher capital expenditure projections than previously reported in key regions of the world, and in particular Europe and Asia which we see as important markets for Plexus over the coming years. In Asia we recently incorporated a Brunei subsidiary, Plexus Ocean Systems (Brunei) Sdn Bhd, to build on the on-going business we have secured with Brunei Shell Petroleum, and are strengthening and expanding our interests in Malaysia, as well as looking at establishing a base in Singapore. Positive geo-political developments include the opening up of new acreage such as more than 68,000 sq. miles in the Barent Sea following the settlement of a forty year dispute between Russia and Norway, and the recently announced tax allowances for the North Sea to encourage the successful extraction of the remaining estimated 24 billion barrels of oil and gas. Recovering these UK reserves is technically demanding and ever more expensive and, therefore, it is important to deliver investment conditions that allow the UK to compete against other less costly regions in the world. With this in mind it was gratifying to hear the Chancellor speak of the government's "absolute determination to get more investment in the North Sea, a huge national asset". Furthermore, a recent North Sea licencing round attracted 224 applications covering 418 blocks of the UK Continental Shelf, and it was reported that the UK Department of Energy and Climate Change believes it was the largest licensing round that it has seen since beginning offshore licencing in 1964. This certainly bodes well for increased exploration activity over the coming years in the UK, a region which accounted for 47% of our sales during the year.

As shareholders will note, a number of organic, strategic, and geo-political factors are combining together to reinforce our positive view of the future, which in turn is being reflected by our existing order book, and recent post period end contract awards, providing us with excellent visibility for the current year. This level of activity has to be balanced with our ability to execute in terms of staffing, infrastructure and inventory levels as these directly influence our organic growth rate. We are addressing such constraints by continuing to invest significantly in capacity expansion and therefore we expect to see on-going steady organic growth in sales and profitability, whilst at the same time progressing various strategic projects which have the potential of being transformational in terms of shareholder value.

A good summary of the reasons for the increasingly exciting prospects for an innovative oil services company like Plexus with a suite of patented proprietary technology was provided recently by the head of KKR's energy group in Europe following their acquisition of a 52% interest in offshore oil and gas services group Acteon Group Limited when he said - "as exploration and production shifts into more complex environments, like deepwater offshore, the oil and gas industry will increasingly need more third-party expertise and specialised services". Such developments support our view that we will in the future be able to secure the interest of potential licencees and alliance partners as a way of accelerating the roll out of our technology. The 16.3% proposed final dividend increase is a clear indication of the Board's positive view of the future.

J Jeffrey Thrall

Non-Executive Chairman

15 October 2012

 



Chief Executive's Review

Plexus has continued to make strong progress in the second half of the year and this, combined with an excellent second half performance, has resulted in record revenues and profits for the Group. These results have been achieved against a back-drop of continuing volatility in oil prices that, according to Oil and Gas UK, has seen the price for Brent crude oil swing from USD$127 a barrel in May 2011 in response to the Arab uprisings, up from a low of USD$93 in January 2011, and then fall by 25% in early June 2012 compared with its peak earlier in the year.

Despite a challenging macro environment, Plexus' sales increased both in the UK continental shelf ('UKCS') where sales rose by 27.3% to £9.17m compared to £7.21m last year, and the Norwegian North Sea and Netherlands where sales grew 233.3% to £7.01m compared to £2.10m last year. This success has been largely driven by the growing reputation of our HP/HT rental wellhead equipment where the operational, safety, and time saving advantages are becoming more obvious to the oil and gas operators leading to an increase in repeat business activity and the winning of new customers. It is also pleasing to note that the vibrant Asia region also saw growth in revenues to £1.34m compared to £0.83m last year, an increase of 63.4%.

The financial progress made during the year must importantly be considered alongside various strategic and commercial initiatives both on-going and newly launched. Such initiatives will, I believe, deliver considerable shareholder value over the coming years and are supported by our cash generative rental business model where we are pursuing a strategy of considered and controlled growth that balances infrastructure, personnel, and operational efficiencies. The most significant contract wins which underpin our forward order book were as follows:

●     July 2011 - contract signed to supply Niko Resources Limited in Trinidad, with a value of between £1m and £3.25m

●     August 2011 - HP/HT contract win with Gaz de France Suez E&P Ltd for the North Sea with a value of £1.7m

●     August 2011 - fourth successive two year framework agreement signed with Transocean Drilling U.K. Limited for the supply of standard 10,000 psi wellhead equipment to Applied Drilling Technology International ('ADTI') with an estimated value of £2m

●     September 2011 - new customer win via Vantage Drilling Company Inc. to supply HP/HT wellhead equipment to the major Malaysian oil and gas operator with a value in excess of $1m

●     September 2011 - second contract with Centrica Energy for an HP/HT well in the North Sea with a value of £800k

●     December 2011 - new customer win with Santos Ltd for the supply of HP/HT equipment with a value of £800k, which is the second contract in Australia

●     April 2012 - contract with Bowleven plc for supply of HP/HT equipment in Cameroon with a value of £1.05m

●     May 2012 - following on from a five year framework agreement signed in 2006 BG International Ltd ordered additional 20,000 psi X-HP/HT wellhead equipment for the North Sea with a value of £1.3m

Post year end, we continue to be very encouraged by the level of new enquiries and this activity supports our on-going organic growth plans, particularly in terms of continued high levels of capital expenditure, where we plan to increase the number of HP/HT wellhead sets in our rental inventory by a record number over the next twelve months:

●     October 2012 - Brunei Shell Petroleum Sdn Bhd have awarded a further four year contract for the supply of HP/HT and standard pressure wellhead systems for a multi-well exploration programme in Brunei. The value of the initial contract is already estimated at £2m over the next eighteen months

●     October 2012 - Talisman Energy Inc. contract for a standard pressure and an HP/HT well in the Norwegian North Sea with a value of £1.15m

●     October 2012 - new customer Lotos Exploration and Production Norge AS contract for supply of HP/HT equipment in the Norwegian North Sea with a value of £1m

The most notable business and strategic developments during the period fall into three broad categories: the growing importance of increased regulatory scrutiny; subsea; and POS-GRIP IP leveraging which together create significant commercial opportunities for our proprietary technology. Of particular relevance is the fact that there is now a worldwide focus on creating and delivering the safest standards possible to address real concerns about safety issues relating to personnel and the environment. As Oil and Gas IQ recently reported post the Gulf of Mexico incident, "it is an inescapable reality that HP and/or HT drilling environments could pose significant dangers to people, property and the natural world" and that "these risks make equipment more likely to fail, which may lead to pressure issues and spills…".

These circumstances have led to an increase in the declared need for operators to select BAST which has in turn heightened interest in our POS-GRIP method of engineering and increased receptiveness as to how we can expand our success with jack-up exploration activities at the surface to other applications, particularly subsea. This combination of factors enables us to report a number of related developments as follows:

●     July 2011 - award of a £0.5m engineering design contract by Wintershall Noordzee B.V. for the development of an HP/HT subsea wellhead crossover system that will enable Wintershall to complete and then produce from a previously drilled temporarily abandoned exploration well

●     August 2011 - new customer Dana Petroleum PLC contracts for the supply of standard pressure wellhead equipment also with subsea crossover to production well capability, initially for one well, with an approximate value of £0.25m. The enabling abilities of POS-GRIP technology means that a surface wellhead, surface BOP and casing riser are used, eliminating the requirement for a high pressure drilling riser or a subsea BOP, delivering significant time and cost savings

●     December 2011 - signed licensing, manufacturing, distribution, and agency agreement with Breda for the supply and servicing of POS-GRIP products worldwide to Italian oil and gas major ENI S.p.A

●     January 2012 - Maersk agreed to contribute £0.26m towards the development and final testing of our HP/HT Tie-Back wellhead system development JIP programme

●     June 2012 - £4.0m three year agreement with a leading oil and gas operator for the supply of HP/HT relief well standby equipment and drilling equipment which forms part of contingency planning in the event that a relief well is needed during their oil and gas development programme in the UK North Sea

●     June 2012 - ENI S.p.A and Oil States Industries Inc. join existing consulting partners Shell International Exploration and Production B.V., Maersk, Wintershall Noordzee B.V., and Tullow Oil plc as members of the Plexus new HGSS subsea wellhead design JIP, the objective of which is to develop and commercialise a new and safer subsea wellhead utilising Plexus' patented POS-GRIP technology

These initiatives bode well for future business opportunities, development, and growth. The combination of current organic and strategic activities are ensuring that our POS-GRIP technology is making real progress in persuading the industry that we offer a very real alternative to established conventional wellhead systems, and one which we have demonstrated is genuinely safer and better. During the year, we also had the opportunity to promote these technical advantages at the bi-annual international "Offshore Europe" trade show that took place in Aberdeen in September 2011. Plexus had one outdoor and one indoor stand and it was gratifying to see a tremendous level of interest in our method of engineering and wellhead equipment. In addition the quality of the operating systems and procedural capabilities at our Aberdeen facility were demonstrated in April 2012 by the award of two API Monogram Programme licences so that all equipment designed and manufactured in accordance with these licences can now be stamped with an API Monogram which can be helpful in some markets.

The momentum generated throughout the year has delivered a record set of results with a 27.8% year on year revenue increase resulting in sales of £19.71m, out of which rental of HP/HT exploration equipment accounted for the majority at £16.11m, an increase of 51.4% over the prior year. The fast growing HP/HT business activities, supported by the growth in the number of new HP/HT capable jack-up rigs coming into service, helped to further increase gross margins to 70.9% as compared to 60.1% last year, while EBITDA increased by 33.0% to £6.24m from £4.69m. Profits before tax increased by 96.8% to £3.09m compared to £1.57m last year and profit after tax increased 95.9% to £2.43m, against £1.24m last year. The spread of sales by territory continued to ensure that the UK accounted for less than half of sales at 47%, with Europe at 36%, Asia 7%, Africa 6%, Americas 3%, and Australia 1%.

As I have always stressed it is essential with the introduction of a new technology into a major market such as the oil and gas industry (which is known to be slow moving where the adoption of new technology is concerned), that our growth strategy is properly supported by necessary investment in people and infrastructure. It is no good being able to win contracts and then have difficulties fulfilling them and not meeting the needs of the customer. Significant investment, therefore, continues to be made in supporting our operational activities, particularly in the areas of IT hardware and software, and human resources in organisation, development, communication, recruitment, as well as competency and training disciplines. For these reasons, our total overheads increased as planned to £10.78m from £7.59m in the previous year, and our employee headcount increased to 113 at the year end as compared to 91 in the prior year. This increase was a great achievement in what is recognised as being one of the tightest labour markets and our employee numbers will be increased further in line with our planned organic and strategic growth activities. Alongside overhead and staff costs, we also continued with our capital expenditure programme of which the biggest element is the addition of new rental wellhead sets, and where year on year capex spend increased by 97.6% to £4.62m compared to £2.34m last year. Significant capex spend will continue in 2012/13 as we continue to add to our rental wellhead inventory to help meet customer demand. A further important element which has always been a key component in the development of Plexus is R&D where spend, (inclusive of new test fixtures), totalled £1.38m, a 104.6% increase over the £0.67m in the prior year.

In summary, I am extremely pleased with this record set of results which have been achieved as a result of increasing organic activity combined with various strategic initiatives which together enabled Plexus to advance its reputation and gain market share which is key to the future growth of our company. Such progress is being made at a time when the oil and gas industry is entering a new phase in which it faces greater challenges than ever before in terms of operating in more extreme environments (of which the Artic is a good example), whilst at the same time having to embrace new health and safety standards and regulatory scrutiny. This new paradigm is helpful for an innovative technology such as POS-GRIP as it encourages the support of the industry and lowers barriers to entry in terms of the willingness of operators and standard setters to consider and assess the development and adoption of superior proprietary technology. In addition to moving from surface to subsea, I am confident that the unique features and benefits of our non rotational method of engineering in terms of operational performance, safety, and time savings has the potential to expand our target markets to areas outside traditional oil and gas including fracking, CO2 storage, and geothermal where long term metal-to-metal sealing is essential. I am further encouraged by a step-up in activity amongst exploration and production ('E&P') companies around the world, and indeed the "Barclays Global 2012 E&P Spending Outlook" reported that global E&P spending in 2012 will increase to circa USD$600 billion versus USD$544 billion in 2011. I am in no doubt that these positive developments will help ensure that Plexus and POS-GRIP will continue to play an increasingly important role in the supply of wellhead technology and equipment and that this is likely to be, at some point in the future, in conjunction with suitable industry partners, as our first licencing agreement with Breda has demonstrated.

Ben van Bilderbeek

Chief Executive

15 October 2012

 



Financial Review

Revenue

Revenue for the year was £19.71m, up 27.8% from £15.42m in the previous year, reflecting a strong sales performance underpinned by a series of on-going and new contract wins including the gaining of new customers in new territories around the world.

The rental of exploration wellhead equipment and related equipment and services accounted for over 92.9% of revenue which was essentially unchanged from last year and which continues to reflect the fact that the company's business model is currently centred on the supply of rental exploration equipment and services as opposed to sold production well equipment. This is anticipated to change over the coming years as the Group begins to extend the reach of its POS-GRIP technology beyond the rental of surface wellhead equipment. HP/HT equipment sales generated the largest year on year sales increase of £16.11m up from £10.64m last year, an increase of 51.4%, and accounted for 81.7% of total sales. This growth resulted from the increase in demand for our equipment and services from our broadening customer base combined with our greater ability to meet that demand as we continue to invest in building our HP/HT wellhead set rental inventory fleet. Standard pressure equipment sales reduced by 35.2% to £2.35m from £3.63m in the prior year, and accounted for 11.9% of total sales. This decline reflected the UKCS reduced exploration activity during the period, and which in 2011 according to Oil & Gas UK was 50% less than 2010 making it the lowest year for exploration since the mid-1960s. This decline is anticipated to reverse in the future. This year, revenues of £0.70m were generated by engineering and testing as opposed to none last year as tangible customer support for the on-going development of our technology continues to gather momentum.

Margin

Gross margins have increased strongly to 70.9% from 60.1% in the previous year as HP/HT rental activity continues to dominate sales and generate higher margins than low pressure equipment contracts, and as operational efficiencies flow through as a result of increased sales revenues. Further margin enhancing factors include lower equipment refurbishment costs for on-going contracts where equipment has not yet had to be returned to the Plexus Aberdeen facility and where costs related to equipment mobilisation and logistics are inevitably lower.

Overhead expenses

As anticipated overhead expenses have increased to provide the necessary additional infrastructure and personnel to support various new product development projects, and in particular the new subsea wellhead as well as increasing numbers of customers around the world. This resulted in total overheads increasing to £10.78m from £7.59m in the previous year, of which overhead staff costs increased to £4.81m from £3.39m, demonstrating the need to ensure that the Group's increased activity levels are able to be managed in line with customer and operational requirements. The staff cost increase can be clearly seen in the employee headcount which at the year end was 113 compared to 91 for the prior year, an increase of 24.2%. Other items which increased significantly year on year as a result of the increased activity levels and staff increases were recruitment fees, training, travel and subsistence, rent and rates, freight and couriers.

EBITDA

EBITDA for the year (before IFRS2 share based payment charges of £0.25m) was ahead of market expectations at £6.24m, increased from £4.69m (before IFRS2 share based payment charges of £0.19m) the previous year, an increase of 33.0%. EBITDA margin for the year was also higher at 31.6% as compared to 30.4% last year. This further strong EBITDA performance was delivered as a result of a combination of higher margins associated with HP/HT rental activity, operational efficiencies gained from on-going contracts, and the proprietary nature of the Plexus POS-GRIP friction-grip technology which has the advantage of delivering enhanced safety, operational, and time saving advantages which customers value.

Profit before tax

Profit before tax increased significantly to a record £3.09m compared to a profit last year of £1.57m, an increase of 96.8%. This increase has been achieved after absorbing rental asset and other property, plant and equipment depreciation and amortisation charges of £2.71m, down marginally from £2.83m last year, and which in particular continues to reflect the on-going investment in Plexus' rental inventory. The profit before tax is stated after an IFRS2 charge for share based payments under reporting standard IFRS 2; the charge for the full year is £0.25m compared to £0.19m last year.

Tax

Group UK Corporation Tax resulted in a tax charge of £0.66m for the year as compared to £0.33m for the prior year. The Group has provided for a charge to UK Corporation tax at a rate of 21% for the full year, which continues to be below normal corporation tax rates mostly as a result of R&D related tax credits resulting from the Group's continued investment in and development of its proprietary technology.

EPS

The Group reports basic earnings per share of 2.99p compared to 1.55p in the prior year, an increase of 92.9%.

Cash and Statement of Financial Position

The statement of financial position reflects the growth in operations during the year. The net book value of property, plant and equipment including items in the course of construction increased by 14.4% to £9.14m compared to £7.99m last year. Capital expenditure on tangibles totalled £3.47m compared to £1.64m last year, an increase of 111.6%. Of this significant increase £2.49m was for the addition of three more HP/HT wellhead equipment sets as a result of a necessary step up in capital expenditure levels to meet increased order levels. Receivables increased to £6.05m as compared to £3.54m. Net bank borrowings closed at £0.26m compared to £0.56m last year reflecting net cash inflow for the year of £0.3m after absorbing a significant increase in total capital expenditure of £4.62m (2011: £2.34m), and receipt of £1.68m from the placing of new shares in January 2012. This compares to net cash inflow of £2.34m last year. In recognition of the continuing difficulties in the credit markets and the constraints on banks' lending capacities the Group has decided to retain its existing £6.0m lending facilities structure with Bank of Scotland Corporate. These facilities are anticipated to be more than adequate to meet on-going capital expenditure, R&D, and related project commitments.

Intellectual Property

The Group carries in its statement of financial position goodwill and intangible assets of £8.52m, increased from £7.89m last year reflecting the Group's on-going investment in the development of its POS-GRIP technology. The Directors have considered whether there have been any indications of impairment and have concluded that there have been no such indications. The Directors therefore consider the current carrying values to be appropriate. Indications of impairment are considered annually.

Research and Development

Significant on-going R&D investment continues to play a key role in Plexus' future growth plans both for existing wellhead equipment sales activities, and the on-going development of new patent initiatives for the Group's proprietary method of engineering in conjunction with various product design and development programmes that utilise and incorporate the unique advantages of POS-GRIP technology. A key example of this strategy is the important JIP for the development of a new POS-GRIP HGSS subsea wellhead design which was launched in response to the 2010 incident in the Gulf of Mexico, and which is planning to deliver specific safety, operational, and cost saving features in a way that conventional equipment does not. The R&D investment being made in this project has been validated by a number of major international oil and gas operators joining the JIP as consulting partners and they are contributing their experience and future requirements to the design and development process. A second project is the HP/HT Mudline Tie-Back wellhead system product which has benefitted from Maersk contributing £0.26m towards the final development stage and on-going testing. A third project is a £0.5m design project for a subsea wellhead HP/HT crossover system for Wintershall Noordzee B.V. R&D spend increased by 104.6%, including cost of building new test fixtures, to £1.38m from £0.67m in the prior year, and is expected to continue during the 2012/13 financial year.

IFRS 2 (Share Based Payments)

IFRS2 charges have been included in the accounts, in line with reporting standards. The "fair value" of share based payments has been computed independently by specialist consultants and is amortised evenly over the expected vesting period from the date of grant. The charge for the year was £0.25m which compares to £0.19m last year.

Dividends

The Company announced on 29 March 2012 the payment of an increased interim dividend of 0.39p per share which was approved for payment on 27 April 2012.

In further recognition of the Group's on-going progress the Directors have decided to propose a 16.3% increase in the final dividend of  per share for the year ending 30 June 2012 compared to 0.43p last year, which will be recommended for formal approval at the Annual General Meeting to be held on 28 November 2012. Subject to this the dividend will be paid on 14 December 2012.

Graham Stevens

Finance Director

15 October 2012

 



Consolidated Statement of Comprehensive Income

for the year ended 30 June 2012


 

2012

2011


Notes

£'000

£'000


 

 

 

Revenue

1

19,706

15,421

Cost of sales

 

(5,727)

(6,152)


 

 

 

Gross profit

 

13,979

9,269

Administrative expenses

 

(10,770)

(7,594)


 

 

 

Operating profit

 

3,209

1,675

Finance income

 

8

16

Finance costs

 

(129)

(121)

Share of loss of associate

 

-

(1)


 

 

 

Profit before taxation

 

3,088

1,569

Income tax expense

3

(657)

(326)


 

 

 

Profit after taxation and comprehensive income for the year attributable to the owners of the parent

 

 

2,431

 

1,243


 

 

 


 

 

 

Earnings per share

5

 

 

Profit for the year attributable to Plexus Holdings shareholders

 

 

 

Basic

 

2.99p

1.55p

Diluted

 

2.92p

1.53p

 

All income arises from continuing operations.

 



Consolidated Statement of Financial Position

at 30 June 2012


 

2012

2011


Notes

£'000

£'000


 

 

 

Assets

 

 

 

Goodwill

 

760

760

Intangible assets

6

7,762

7,128

Financial assets

 

60

60

Property, plant and equipment

7

9,145

7,992

Deferred tax asset

 

473

-


 

 

 

Total non-current assets

 

18,200

15,940


 

 

 

Inventories

 

6,047

4,049

Trade and other receivables

 

6,060

3,543

Cash and cash equivalents

 

3,739

3,441


 

 

 

Total current assets

 

15,846

11,033


 

 

 

Total Assets

 

34,046

26,973


 

 

 

Equity and Liabilities

 

 

 

Called up share capital

8

827

802

Share premium account

 

17,280

15,596

Share based payments reserve

 

1,201

950

Retained earnings

 

4,582

2,293


 

 

 

Total equity

 

23,890

19,641


 

 

 

Liabilities

 

 

 

Deferred tax liabilities

 

-

299

Bank loans

 

4,000

4,000


 

 

 

Total non-current liabilities

 

4,000

4,299


 

 

 

Trade and other payables

 

5,332

2,687

Current income tax liabilities

 

824

346


 

 

 

Total current liabilities

 

6,156

3,033


 

 

 

Total liabilities

 

10,156

7,332


 

 

 

Total Equity and Liabilities

 

34,046

26,973

 



Consolidated Statement of Changes in Equity

for the year ended 30 June 2012


Called Up Share Capital £'000

 

Share Premium Account £'000

Share Based Payments Reserve £'000

 

 

Retained Earnings £'000

 

 

 

Total

£'000

Balance as at 1 July 2010

802

15,596

764

1,674

18,836

Total comprehensive income for the period

-

-

-

1,243

1,243

Share based payments reserve charge

-

-

186

-

186

Deferred tax movement on share options

-

-

-

(31)

(31)

Dividends

-

-

-

(593)

(593)

Balance as at 30 June 2011

802

15,596

950

2,293

19,641


 

 

 

 

 

Total comprehensive income for the period

-

-

-

2,431

2,431

Share based payments reserve charge

-

-

251

-

251

Issue of ordinary shares

25

1,975

-

-

2,000

Share issue costs

-

(291)

-

-

(291)

Deferred tax movement on share options

-

-

-

525

525

Dividends

-

-

-

(667)

(667)

Balance as at 30 June 2012

827

17,280

1,201

4,582

23,890

 



Consolidated Statement of Cash Flows

for the year ended 30 June 2012


2012

2011


£'000

£'000

Cash flows from operating activities

 

 

Profit before taxation

3,088

1,569

Adjustments for:

 

 

 Depreciation, amortisation and impairment charges

2,709

2,830

 Loss on disposal of property, plant and equipment

70

83

 Charge for share based payments

251

186

 Investment income

(8)

(16)

 Interest expense

129

121

Changes in working capital:

 

 

 Increase in inventories

(1,998)

(717)

 (Increase)/decrease in trade and other receivables

(2,517)

3,090

 Increase/(decrease) in trade and other payables

2,645

(2,086)

Cash generated from operating activities

4,369

5,060

Income taxes (paid)/repaid

(426)

268

Net cash generated from operating activities

3,943

5,328


 

 

Cash flows from investing activities

 

 

Acquisition of subsidiary entity

-

(10)

Adjustment to value of associate undertaking

-

(18)

Purchase of intangible assets

(1,150)

(699)

Purchase of property, plant and equipment

(3,471)

(1,640)

Proceeds of sale of property, plant and equipment

55

83

Net cash used in investing activities

(4,566)

(2,284)


 

 

Cash flows from financing activities

 

 

Proceeds from issue of new ordinary shares

2,000

-

Transaction costs from issue of new ordinary shares

(291)

-

Interest paid

(129)

(121)

Interest received

8

14

Equity dividends paid

(667)

(593)

Net cash generated from/(used in) financing activities

921

(700)


 

 

Net increase in cash and cash equivalents

298

2,344


 

 

Cash and cash equivalents at 1 July 2011

3,441

1,097

Cash and cash equivalents at 30 June 2012

3,739

3,441

 



Notes to the Consolidated Financial Statement

 

1.     Revenue


2012

2011


£'000

£'000

By geography

 

 

UK

9,172

7,209

Europe

7,009

2,103

Rest of World

3,525

6,109


19,706

15,421

Revenue is shown by destination as the origin of revenues is all from the UK.

 

 

2.     Segment reporting

The Group derives revenue from the sale of its POS-GRIP technology and associated products, the rental of wellheads utilising the POS-GRIP technology and service income principally derived in assisting with the commissioning and ongoing service requirements of our equipment. These income streams are all derived from the utilisation of the technology which the Group believes is its only segment.

Per IFRS 8, the operating segment is based on internal reports about components of the group, which are regularly reviewed and used by the board of directors being the Chief Operating Decision Maker ("CODM").

All of the Group's non-current assets are held in the UK.

The following customers each account for more than 10% of the Group's revenue:


2012

2011


£'000

£'000


 

 

Customer 1

2,978

2,502

Customer 2

2,929

193

Customer 3

2,554

2,199

Customer 4

2,108

-

 

 

3.     Income tax expense

(i) The taxation charge for the year comprises:

2012

2011


£'000

£'000

UK Corporation tax:

 

 

 Current tax on income for the year

919

582

 Adjustment in respect of prior years

(42)

(245)


877

337

Foreign tax:

 

 

 Current tax on income for the year

27

190

Total current tax

904

527

Deferred tax:

 

 

 Origination and reversal of timing differences

(243)

(236)

 Adjustment in respect of prior years

(4)

35

Total deferred tax

(247)

(201)

Total tax charge

657

326


 

 

The effective rate of tax is 21% (2011: 21%)

 

 


 

 

(ii) Factors affecting the tax charge for the year

 

 


 

 

Profit on ordinary activities before tax

3,088

1,569

Current tax charge at 24% (2011: 26%)

741

408

Effects of:

 

 

Expenses not deductible for tax purposes

98

101

Capital allowances for the year less than depreciation

40

120

Foreign tax

12

119

Adjustments in respect of prior year

(42)

(245)

Effect of change in tax rate

55

24

Current tax charge for the year

904

527


 

 

(iii) Movement in deferred tax balance

 

 


 

 

Deferred tax liability at beginning of year

299

469

Charge to Statement of Comprehensive Income

(247)

(201)

Deferred tax movement on share options

(525)

31

Deferred tax (asset)/liability at end of year

(473)

299


 

 

(iv) Deferred tax balance

 

 

The deferred tax balance is made up of the following items:

 

 

Difference between depreciation and capital allowances

336

423

Share based payments

(776)

(88)

Tax losses

(33)

(36)

Deferred tax (asset)/liability at end of year

(473)

299

 

 

4.    Dividends


2012

2011


£'000

£'000

Ordinary Shares



Interim paid of 0.39p (2011: 0.35p) per share for the year ended 30 June 2012

 

322

 

281

Ordinary Shares



Final dividend after the year end of 0.5p (2011: 0.43p) per share

414

345

 

The proposed final dividend has not been accrued at the balance sheet date.

 

 

5.    Earnings per share


2012

2011


£'000

£'000

Profit attributable to shareholders

2,431

1,243


Number

Number

Weighted average number of shares in issue

81,331,287

80,182,569

Dilution effects of share schemes

2,054,063

789,827

Diluted weighted average number of shares in issue

83,385,350

80,972,396

Basic earnings per share

2.99p

1.55p

Diluted earnings per share

2.92p

1.53p

 

Basic earnings per share is calculated on the results attributable to ordinary shares divided by the weighted average number of shares in issue during the year.

 

Diluted earnings per share calculations include additional shares to reflect the dilutive effect of employee share schemes and share option schemes.

 

 

6.     Intangible fixed assets


 

Intellectual

Property

£'000

Patent and

Other

Development

£'000

 

Computer

Software

£'000

 

 

Total

£'000

Cost





As at 1 July 2010

6,440

2,084

119

8,643

Additions

-

674

25

699

 

As at 1 July 2011

6,440

2,758

144

9,342

Additions

-

1,137

13

1,150

 

As at 30 June 2012

6,440

3,895

157

10,492

 

Amortisation





As at 1 July 2010

1,372

277

97

1,746

Charge for the year

330

122

16

468

 

As at 1 July 2011

1,702

399

113

2,214

Charge for the year

330

163

23

516

 

As at 30 June 2012

2,032

562

136

2,730

 

Net Book Value

As at 30 June 2012

 

4,408

 

3,333

 

21

 

7,762

As at 30 June 2011

4,738

2,359

31

7,128

As at 30 June 2010

5,068

1,807

22

6,897

 

Patent and other development costs are internally generated.

 

 

7.     Property, plant and equipment


 

 

 

Buildings

£'000

 

Tenant

Improvements

£'000

 

 

 

Equipment

£'000

Assets

under

Construction

£'000

 

 

Motor

Vehicles

£'000

 

 

 

Total

£'000

Cost







As at 1 July 2010

661

-

14,246

176

14

15,097

Arising on acquisition

 

-

 

-

 

-

 

-

 

14

 

14

Additions

24

81

212

1,323

-

1,640

Transfers

-

-

947

(947)

-

-

Disposals

-

-

(666)

-

(1)

(667)

 

As at 1 July 2011

685

81

14,739

552

27

16,084

Additions

-

132

573

2,734

32

3,471

Transfers

-

-

2,435

(2,435)

-

-

Disposals

-

-

(653)

-

(12)

(665)

 

As at 30 June 2012

685

213

17,094

851

47

18,890

 

Depreciation







As at 1 July 2010

10

-

6,209

-

12

6,231

Charge for the year

125

-

2,233

-

4

2,362

On disposals

-

-

(500)

-

(1)

(501)

 

As at 1 July 2011

135

-

7,942

-

15

8,092

Charge for the year

124

39

2,022

-

9

2,194

On disposals

-

-

(530)

-

(11)

(541)

 

As at 30 June 2012

259

39

9,434

-

13

9,745

 

Net book value

As at 30 June 2012

 

426

 

174

 

7,660

 

851

 

34

 

9,145

As at 30 June 2011

550

81

6,797

552

12

7,992

As at 30 June 2010

651

-

8,037

176

2

8,866

 

 

8.    Share Capital


2012

2011


£'000

£'000

Authorised:



Equity: 110,000,000 (2011: 110,000,000) Ordinary shares of 1p each

1,100

1,100

Allotted, called up and fully paid:



Equity: 82,746,672 (2011: 80,182,569) Ordinary shares of 1p each

827

802

 

Share issue during the year:


Number

of shares

Share

capital

£'000

Share

premium

£'000

 

Total

£'000

At 1 July 2011

80,182,569

802

15,596

16,398

On 17 January 2012

2,564,103

25

1,975

2,000

Less share issue costs

-

-

(291)

(291)

At 30 June 2012

82,746,672

827

17,280

18,107

 

On 17 January 2012, 2,564,103 ordinary shares with an aggregate nominal value of £25,641 were issued at a price of 78p per share, with an aggregate value of £2m before expenses. The excess net proceeds have been credited to the share premium account.

 

 

9.     Reconciliation of net cash flow to movement in net debt


2012

2011


£'000

£'000

Increase in cash in the year

298

2,344

Cash inflow from increase in net debt

-

-

Movement in net debt in year

298

2,344

Net debt at start of year

(559)

(2,903)

Net debt at end of year

(261)

(559)

 

 

10.   Analysis of net debt


At

beginning

of year

£'000

 

 

Cash flow

£'000

At

end

of year

£'000

Cash in hand and at bank

3,441

298

3,739

Overdrafts

-

-

-


3,441

298


Bank loans

(4,000)

-

(4,000)

Total

(559)

298

(261)

 

 

The financial information above does not constitute the company's statutory accounts for the year ended 30 June 2012 but is derived from those statements.

The statutory financial statements and this preliminary statement for the year ended 30 June 2012 were approved by the Board on 15 October 2012. On the same date the company's auditors, Crowe Clark Whitehill LLP issued an unqualified report on those financial statements. The audit report did not include reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report or contain a statement under section 498(2) or (3) of the Companies Act 2006. The Company's financial statements have been prepared in accordance with International Financial Reporting Standards, as adopted by the EU. A copy of the statutory accounts will be delivered to the Registrar of Companies in due course.

The Annual Report will be circulated to all shareholders and thereafter, copies will be available from the registered office of the company, Thames House, Portsmouth Road, Esher, Surrey, KT10 9AD.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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