TIDMPOS
RNS Number : 2425I
Plexus Holdings Plc
24 March 2015
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
24 March 2014
Plexus Holdings plc ('Plexus' or 'the Group')
Interim Results for the six months ended 31 December 2014
Plexus Holdings plc, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R)
friction-grip method of wellhead engineering announces its interim
results for the six months to 31 December 2014.
Financial Results
-- 7% increase in sales revenue to GBP13.51m (2013: GBP12.64m)
-- 14% increase in EBITDA to GBP4.16m (2013: GBP3.66m)
-- 28% increase in profit after tax to GBP1.97m (2013: GBP1.54m)
-- 25% increase in basic earnings per share to 2.32p (2013: 1.85p)
-- 6% increase in interim dividend to 0.51p per share approved
for payment on 22 April 2015 to all shareholders appearing on the
register of members on the record date 7 April 2015
Highlights
-- Strong financial performance for POS-GRIP friction-grip
rental wellhead equipment as a result of a combination of new and
on-going contracts with a range of major international oil and gas
operators particularly for High Pressure/High Temperature ('HP/HT')
applications
-- Two purchase orders for HP/HT rental wellhead systems secured
from Det Norske Oljeselskap ASA ('Det Norske') for two wells in
Norwegian sector of the North Sea with a value of circa GBP1.9m
-- Contract received from a major oil and gas operator for the
supply of HP/HT 15,000 psi wellhead equipment for the UK
Continental Shelf ('UKCS') for circa GBP1.9m - the operator who is
a long standing customer was the first operator to use Plexus HP/HT
equipment on the Norwegian Continental Shelf
-- Additional order secured from Centrica Energy Exploration and
Production ('Centrica') for the Southern North Sea, offshore UK for
standard pressure equipment with a value of circa GBP0.6m
-- Contract received from BG Group (UK) for the supply of HP/HT
exploration wellhead equipment in the UKCS with a value of circa
GBP1.9m
-- Post period end additional purchase orders received for three
standard pressure and HP/HT exploration wells with a total value of
circa GBP1.5m from long standing customer Brunei Shell Petroleum
Sdn Bhd ('Shell Brunei') under an existing four year contract which
runs to 2016
-- Shell China Exploration and Production Company Limited
('Shell China') HP/HT gas exploration well announced in May 2014
offshore Hainan Island has commenced operations, and Plexus hopes
that this will lead to further opportunities in this increasingly
important Asian region where Plexus has also supplied wellhead
equipment to Australia, Brunei and Malaysia
-- The new subsea wellhead design HGSS(TM) Joint Industry
Project ('JIP') continues to make excellent progress with the two
remaining key test interfaces, to verify performance, entering
their final stages with target completion by July this year - the
building of a prototype single string system commenced in February
2015 and is expected to be completed in readiness for display at
the SPE Offshore Europe Exhibition and Conference in Aberdeen
('OE2015') in September. Following launch, we hope that in
conjunction with our JIP partners to deploy the prototype in the
field in 2016
-- Industry support for the HGSS JIP continues to be strong as
demonstrated by the addition of BG International Ltd as a new
consulting partner to the JIP in September alongside Eni S.p.A.,
Maersk, Senergy Holdings Limited ('Senergy'), Shell International
Exploration and Production B.V. ('Shell'), Total E&P Recherche
Developpement SAS ('Total'), Tullow Oil plc, Wintershall and Oil
States Industries Inc.
-- HP/HT Tie-Back JIP connector product is now ready for
customisation and manufacture to suit specific requirements
associated with an individual customer's HP/HT project - the unique
advantages of this POS-GRIP product will now begin to be marketed
to the industry
-- New POS-GRIP product - POS-SET Connector(TM) - which is
designed to enable operators to re-establish a connection onto
rough conductor casing that has been previously cut above the
seabed to facilitate abandonment operations, offers uniquely
superior features and moves Plexus into the growing abandonment
market
-- Significant increase in research and development ('R&D')
spend, excluding costs of building test fixtures, increased by 94%
to GBP1.36m reflecting the innovative and proprietary technology
driven nature of Plexus at a time when increased effort is being
made to expand the portfolio of Plexus POS-GRIP based products
Corporate
-- Asian business hub strategy made further important progress
with the establishment of Plexus Products (Asia) Sdn Bhd ('PPA'), a
new Malaysian Joint Venture ('JV') company between Plexus Ocean
Systems (Singapore) Pte Ltd ('Plexus Singapore') and a local oil
and gas services business partner, Integrated Petroleum Services
Sdn Bhd ('IPS') - PPA is currently working towards securing the
necessary local licences for the supply of Plexus wellhead
equipment
-- Growing global awareness of both Plexus and the safety and
operational benefits of POS-GRIP technology not only in relation to
organic exploration drilling activities, but also in relation to
production and subsea applications
-- Plexus invited to present on POS-GRIP metal sealing in
September 2014 at the "World Oil HP/HT Drilling and Completions
Conference" in Houston, Texas, and also to make a similar
presentation in London at the Oil and Gas iQ "HP/HT Wells Summit
2014" regarding pioneering techniques and technology in HP/HT
drilling and completions
-- Doubled the size of operational headquarters in Dyce,
Aberdeen following the acquisition in September of a circa 36,000
sq. ft. work shop and office facility from leading oilfield
services company Baker Hughes for GBP2.4m - the new building is
importantly situated immediately adjacent to the existing main
facility which will deliver efficiency gains and facilitate future
growth plans
-- Plexus wins the "Commitment to Innovative Use of Research and
Development" award at the 11(th) annual Northern Star Business
Awards 2014, the flagship event for the Aberdeen & Grampian
Chamber of Commerce in recognition of Plexus' long standing
commitment to R&D
-- Following the publication of Sir Ian Wood's "UKCS Maximising
Recovery Review: Final Report" in February 2014 which emphasised
the importance of making more of HP/HT resource potential,
deploying the best and most cost effective technology, and
leveraging the capabilities of the UK's own oil and gas supply
chain, the UK Government finally announced in the Budget last week
a series of measures and tax cuts aimed at reviving the UKCS and
encouraging more investment - such initiatives, if effective will
be beneficial for Plexus as exploration activity is predicted to
increase
-- Appointment of additional non-executive director to the Board
- Charles Jones has over 30 years of senior management and board
experience in the US energy sector and is advising and assisting
the Board in building relationships in the US with potential
commercial and licencing partners
-- Bank facilities renewed and increased with the Bank of
Scotland in September, comprising a GBP5m revolving credit facility
on a three year term and a GBP2m overdraft on a yearly term - in
addition a five year GBP1.5m term loan was put in place to part
fund the purchase of the additional Aberdeen facility
Plexus' Chief Executive Ben van Bilderbeek said,
"This has been a further period of growth for Plexus, one in
which we have continued to deliver on our strategy to build Plexus
into a leading international oil and gas wellhead engineering
company, supplying the best in class and safest wellhead equipment
for exploration, production and subsea applications.
"We are delighted to report another set of record results for
the six months to the end of December 2014. This excellent
financial performance is the result of new business generation
supplying our proprietary POS-GRIP wellhead systems, primarily into
the exploration jack-up drilling market. Our wellhead equipment
continues to gain traction with leading international oil and gas
majors as it meets the critical safety and performance demands
required of wellhead technology across all pressure spectrums. As
the exploration for, and production of, oil and gas goes deeper and
becomes more complex, particularly in HP/HT environments, the need
for such innovative, safe and effective wellhead technology is
being increasingly recognised. In the North Sea we enjoy a dominant
position within the increasingly important HP/HT arena, which we
believe we can replicate in other key regions around the world.
During the period we secured multiple contract wins in the North
Sea, particularly offshore Norway, including wins with Centrica,
Maersk, Det Norske Oljeselskap ASA Norway, and BG Group (UK). In
addition we gained a further important contract win in Asia with
Shell Brunei for an additional three exploration wells under an
existing four year contract which bodes well for further business
in the future. These contract wins highlight the strength of our
core POS-GRIP rental exploration business model in terms of revenue
generation and market penetration.
"Importantly in the UKCS, as originally recommended by the 2014
Wood Report the UK Government confirmed in the Budget last week a
series of tax cuts and incentives. The supplementary charge tax
('SCT') will be cut to 20% from 30%, the petroleum revenue tax
('PRT') charged on so called "super-profits" will be reduced to 35%
from 50% (reducing the effective tax rate on these fields from 81%
to 52.5%), and a new 'Investment Allowance' is being introduced to
replace all existing allowances and which will allow for the
offsetting of 62.5% of all qualifying capex against profits
(subject to SCT) for a field. Of particular relevance to Plexus is
the introduction of legislation to create a new cluster allowance
to support the development of HP/HT projects and encourage
exploration and appraisal activity in the surrounding area or
'cluster'. These welcome and long awaited measures will help drive
further investment in exploration and production, and Plexus
expects to benefit over the coming years.
"As the inventor of POS-GRIP technology, I feel that it is my
duty to continue to articulate the core principles that lie behind
our success, and why I am confident that POS-GRIP wellheads will
become a new global standard. In essence POS-GRIP friction-grip
method of engineering enables us to attach casing to the wellhead
and form metal-to-metal interface seals, in a simple and cost
effective way, to match the integrity of the other connections in
the system. Throughout history design efforts have focused on the
integrity of the wellhead body and its connection to the blowout
preventers ('BOP') that sit on top. In addition hundreds of
millions of dollars have been spent on the development of
dependable casing couplings of which hundreds are used in a casing
string, and which cannot be tested until the whole string is
cemented in the well. Conversely however, the connection between
the wellhead and the casing strings, in terms of qualification
standards, has 'fallen between two stools' and presents a clear
weak link in the system. Uniquely POS-GRIP technology is able to
deliver a scientific approach to deal with this anomaly, which
remains poorly understood in our industry because Plexus wellheads
provide a convenient releasable engagement of the casing hanger to
the wellhead bore, instantly providing a metal interface seal,
which is based on the same principles as those employed in premium
casing couplings design.
"As a result our wellheads not only deliver significant cost
savings for operators, which can total millions of pounds, but
uniquely and critically deliver a controlled and reversible
gripping force, which holds casing hangers and metal seals rigid.
This remotely delivered and calibrated force eradicates destructive
seal movement, and protects seal integrity to ensure long-term
safety over the lifetime of a production well and beyond. Although
the American Petroleum Institute ('API') is beginning to recognise
the need to address this challenge in some of its new and on-going
API standard developments, I do not see how conventional
engineering solutions can address casing hanger design in a way
that can match premium coupling standards. This is because the
casing hanger and annular seal are the last critical connection to
be assembled inside the wellhead bore, and unlike couplings are
manipulated remotely. This 'out of sight' procedure makes it ever
so more important that the system is designed to be assembled in a
controlled manner, in accordance with a calibrated procedure, to be
verified and recorded (which POS-GRIP wellheads are able to do).
Proof must be delivered that 'face to face' seals are stressed
within Hertzian contact stress limits, otherwise metal to metal
sealing which is critical to HP/HT operations cannot be claimed.
The ability to deliver true metal sealing means that particularly
in subsea applications Plexus offers unique capability. We can
guarantee metal sealing up to 20,000 psi at high temperature,
because we measure the force delivered remotely to the seal
interface, through the application of hydraulics. The system is
fully reversible, which means many wells can be drilled in various
directions from a single location, saving millions of dollars in
exploration costs - a true industry first.
"Such unique technical features underpin not only the growing
value of our Intellectual Property ('IP') suite, but also the keen
interest shown by the industry in taking our wellhead equipment
from the surface to subsea which resulted in our HGSS subsea
wellhead design JIP. This JIP is nearing completion in terms of
both testing, and the building of the prototype which will be
launched at OE2015 in September where there will be a focus on the
latest drilling, completion, intervention, and production
technologies for subsea developments. Once the prototype is
completed an opportunity will be pursued with our JIP consulting
partners to run the HGSS prototype in the field in 2016.
"Whilst we are making significant progress in terms of our
existing and new product opportunities, it should be noted that
during the period, and continuing post period end, the oil price
has fallen over 50% creating a turbulent environment for operators
and service companies. Importantly for Plexus, evidence suggests
that the two main sectors that are taking the brunt of the impact
of lower oil prices are tight gas (fracking) where wells deplete
very quickly, and long term multi-billion dollar projects in
challenging areas of the world such as the Arctic. Conversely, we
are fortunately currently focused on supplying equipment for
shallow water offshore drilling from jack-up rigs, (often for
prolific long term gas wells which have a relatively lower life
time capital cost per barrel) and these activities have proven to
be more resilient to the industry's current challenging trading
conditions. Despite this we are not at all complacent and are
making every effort to communicate to our increasingly cost
conscious customers, the time and operational efficiency savings
that our wellhead equipment delivers, which often can be cost
negative to the operator, whilst at the same time offering uniquely
superior metal-to-metal sealing capabilities and safety
features.
"I would like to take this opportunity to thank my fellow Board,
Plexus management team and engineers for without them today's
positive statement would not be possible. Plexus prides itself on
its operational and engineering excellence, and this is evidenced
by our workforce which includes some of the most talented oil and
gas engineers in the industry today, without whom new and exciting
new product developments such as our POS-SET Connector designed to
facilitate abandonment operations would not be possible. For these
reasons I am delighted to welcome Charles Jones as an additional
non-executive director onto the Board, and who brings over 30 years
of senior management and board experience in the US drilling
equipment sector which will be extremely valuable as we begin to
look at pursuing opportunities in the US. I look forward to
updating our valued shareholders on our latest organic and
strategic developments throughout 2015.
"Finally I am delighted to announce that as a demonstration of
the Board's confidence in the future, the directors of the Group
have approved a 6.3% increase in the interim dividend of 0.51p per
share which will be paid on 22 April 2015."
For further information please visit www.plexusplc.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795
6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795
6890
Derrick Lee Cenkos Securities PLC Tel: 0131 220
9100
Nick Tulloch Cenkos Securities PLC Tel: 0131 220
9772
Felicity Winkles St Brides Partners Ltd Tel: 020 7236
1177
Frank Buhagiar St Brides Partners Ltd Tel: 020 7236
1177
Chairman's Statement
Business Progress
I am pleased to report that the Group continued to make good
progress in the first half of the year despite challenging market
conditions in terms of the widely reported oil price volatility,
with falls of over 50% since July last year, which have resulted in
operators reducing their capital expenditure programmes. Plexus was
able to build on the record performance and activity levels
reported at the last year end at both the organic rental wellhead
business activity level, and also in relation to on-going and new
strategic initiatives. This performance resulted in a 7% increase
in turnover to GBP13.51m, a 14% increase in EBITDA to GBP4.16m
(before IFRS 2 share based payment charges), a 28% increase in
profit after tax to GBP1.97m, and a 25% increase in basic earnings
per share. Investment in IP, R&D, product development, and our
rental wellhead inventory continues, and I am particularly pleased
to note that BG International Ltd joined our on-going new subsea
wellhead design JIP alongside a blue chip group of existing
consulting partners comprised of major international oil and gas
operators. Encouragingly for the longer term prospects of our
company, we are also beginning to witness increased global
awareness of Plexus and our POS-GRIP wellhead technology not only
in relation to our organic jack-up exploration drilling activities,
but also in relation to production and subsea applications. Such
developments all help underpin the decision to increase the interim
dividend by 6.3% to 0.51p share.
On-going and new rental wellhead exploration contracts continue
to be focused on the supply of HP/HT equipment. Here our experience
and dominance in the North Sea as the supplier of choice is being
used as a technological and reputational springboard into other
major markets that we are targeting both geographically, such as
China, Russia, and the USA, and by application in terms of surface
production and subsea applications. To place the scale of this
opportunity into perspective the global jack-up drilling market is
relatively small at circa US$400m, whereas the global wellhead
market is estimated at US$4.5bn. Importantly we believe that we are
making the transition (in what is recognised as being one of the
most conservative industries in terms of the speed of adoption of
new technology), from being viewed as new to being regarded as
proven and established, which of course helps the marketing of our
POS-GRIP technology as a superior standard. Such sales initiatives
include the expansion of the reach and capabilities of our Asian
business hub where we have subsidiaries in Brunei, Malaysia, and
Singapore, and the pending incorporation of a subsidiary in Russia
where despite sanctions, (which relate particularly to the fracking
and Arctic arenas), Western companies' involvement in conventional
projects continues apace. Goldman Sachs recently reported in a
research note that it expects Russia to maintain its global market
share in 2015 and even see production rise by 1%.
Alongside such organic and strategic activities it is important
to remember that Plexus is a technology company and that its
proprietary POS-GRIP friction-grip method of engineering is able to
be applied to a wide range of products, both within and outside the
oil and gas industry. For example we have developed a new product
called POS-SET Connector which is designed to facilitate tie-back
or abandonment operations, and which will be a new revenue stream.
As we begin to turn our attention to such activities, and look to
utilise the significant design and development engineering skills
that we have harvested as part of our HGSS subsea JIP, we have
incorporated Plexus Applied Technologies Limited for such
initiatives.
Operating Review
Sales and profits growth has been supported by necessary
on-going investment in personnel, rental wellhead inventory, and
infrastructure both in the UK and increasingly abroad where we are
looking in particular to grow sales in the important Asian region.
Plexus' recognition of the importance of such investment, and the
willingness to commit to it, underpins our confidence in the
superior nature of our technology and its ability to become a new
global standard. Such investment also enhances our ability to
respond to and support customer requirements, which are becoming
ever more demanding in terms of safety, time savings and
operational performance, and which we believe we are uniquely able
to address. Our sales mix for the first half period illustrates the
importance of both the UKCS and the European Continental Shelf
('ECS') in the North Sea where sales to offshore Norway were
particularly strong and increased by 95% compared to the same
period in the prior year. We believe that the tax structure in
Norway encourages exploration drilling as a result of allowances
available where 'dry' wells are concerned. We hope that the latest
tax incentive changes in the UKCS as announced in last week's
Budget will have a similar positive impact which Plexus will
benefit from. HP/HT equipment revenues continued to account for
circa 87% of all sales and, as such field conditions are the most
technically challenging demonstrates the technical advantages
offered by our proprietary POS-GRIP friction-grip method of
engineering and wellhead equipment design.
During the period we expanded our operational headquarters in
Dyce, Aberdeen at a total cost of GBP2.79m, more than doubling the
size of our facilities to circa 70,000 sq. ft. The acquisition of
the ex-Baker Hughes building is an important part of the Company's
growth strategy, and strengthens our ability to support and respond
to the demand for our products and services. The new facility also
enables Plexus to rationalise its work facilities, thereby
significantly improving its logistical efficiencies, creating
additional workshop, warehouse and service bay capacity, and
providing further office space. The additional warehousing has
already allowed our inventory, previously stored offsite, to be
consolidated leading to greatly reduced material handling time.
In tandem with expanding our main Aberdeen operational base, the
July to September 2014 period saw us deliver on our near-term
strategy of building a fully operational Asian business hub to
facilitate the supply of our POS-GRIP wellhead equipment and
services capabilities to the important Australian, Brunei,
Indonesian, Malaysian, Thai, and Singaporean oil and gas markets.
In August 2014 we completed the formation of a new Malaysian Joint
Venture company Plexus Products (Asia) Sdn Bhd which in conjunction
with our local oil and gas services partner Integrated Petroleum
Services Sdn Bhd is currently working towards securing necessary
local equipment supply licences. We believe that our Malaysian base
will complement our already established Singaporean regional HQ and
service base, and enable us to provide an enhanced product,
servicing, and marketing service to the important Asian and Oceanic
oil and gas markets. Plexus' global expansion ambitions also extend
to targeting new major exploration and production markets,
including Russia and China.
It is important to note that in addition to our organic
exploration wellhead business activities, Plexus is an innovative,
technology led business which is continually working on new
applications of its proprietary POS-GRIP friction-grip method of
engineering for use within, and outside, the oil and gas industry.
For example we have recently completed a JIP in conjunction with
oil and gas major Maersk to develop a downhole HP/HT Tie-Back
connector which for the first time allows the reconnection of
production casing to pre-drilled HP/HT exploration and production
wells to the same standards as casing couplings. Full product
development and qualification testing has now been completed, and
the system is ready for customisation and manufacture to suit the
specific requirements associated with any individual customer's
HP/HT project. The connector will deliver significant savings for
operators in terms of capital expenditure and accelerate the
process of bringing a well into production. At a time when the
industry is focusing strongly on cost and capex saving
opportunities the benefits of such an innovative product are clear,
and we will begin marketing this product on the basis that it is
the only method available of achieving a remote casing connection
with the same integrity and capacities as premium casing
couplings.
A further new product that has been developed and qualified, for
which interest is already being seen, is our POS-SET Connector
which is designed to re-establish a connection onto rough conductor
casing previously cut above the seabed to facilitate tie-back or
abandonment operations. Full scale testing has shown that our
connector can achieve 80% of the bending and tensile strength of
the parent pipe, which is significantly better than conventional
connector options. The market for permanent plugging and
abandonment of wells is increasing significantly in the North Sea
and beyond, and could be an important new revenue stream for the
company. Oil and Gas UK in their "UK Decommissioning Insight 2013"
report stated that wells plugging and abandonment is the largest
category of such expenditure totalling GBP4.5bn, and represents 43%
of the total forecast decommissioning expenditure from 2013 to
2022.
Our on-going JIP to design and develop a safer new generation
HGSS subsea wellhead, which was established at the request of Shell
post the 2010 Gulf of Mexico incident continues to make good
progress. We were particularly pleased to welcome BG Group
International Ltd as a new consulting partner to the JIP in
September. BG joins eight other major oil and gas operators and
service companies working towards delivering a new subsea wellhead
that can be tested for the first time to standards that match those
of premium connectors, so that the wellhead is no longer the weak
link in the well architecture chain. Additional features of the
HGSS design, which are not able to be provided by conventional
subsea wellheads include instant casing hanger lockdown, avoidance
of lock rings and lock down sleeves, ability to open and reseal the
casing annulus to enable remedial cement job procedures and in due
course annulus monitoring and bleed-off capability to address
sustained casing pressure ('SCP') situations, with diagnostic
capability. The building of the frozen design HGSS prototype
started in February, and verification of the performance of the
design has focused on two key interfaces: the high pressure/low
pressure ('HP/LP') housing lock mechanism, and the POS-GRIP/HG
metal seal load support and sealing mechanism for the production
casing string. In addition over the past six months Plexus has
successfully completed function testing and four million pound
tension testing, and the test fixture is now being upgraded for a
seven million foot pound bend testing, scheduled to commence in
April. The prototype will be a standard pressure single string
subsea wellhead. Importantly, due to the simplicity and modular
nature of the design it will be able to be adapted to a two string
full system through the addition of a further POS-GRIP activation
mechanism and larger housing body, which then enables the system to
be suitable for HP/HT applications.
The need for such standardisation and reliability is
increasingly recognised by the industry and only last week in
London at the "2015 SPE/IADC Drilling Conference & Exhibition"
the leaders from oil and gas operators and drilling contractors
were empanelled to tackle the issue of delivering wells in a
changing world. Of particular interest to Plexus was the panels
comment where it was reported that Ivan Tan, vice-president of
wells HSE for Shell, said collaboration has led to standardisation
in areas such as safety, but that when you move into performance
there is less and less alignment, and he specifically pointed to
the need for standardised subsea wellheads. Furthermore, Jack
Winton, head of operations division for KCA Drilling was said to
have commented that technology is only reliable when it is
repeatable, and that finding a technology that works well and can
be done safely and efficiently, over and over, is the core of
standardisation. It is precisely such sentiments and scientific
principles that lie behind the design of premium couplings, and we
have adopted these exact same principals in the design of our
wellheads which is something that conventional wellheads are
incapable of achieving.
Key functions and operational areas were further expanded and
developed including personnel, human resources, health and safety,
IT and IP. Personnel numbers increased by 14 to 153 and currently
stands at 158 having increased by 5 since the period end. Training,
development, and retention is essential for a growing business.
Pressures to recruit suitably skilled personnel in a traditionally
tight labour market have eased somewhat following the oil price
falls and subsequent impact on the sector, and we were able to
recruit five Field Service Technicians which is a pivotal role
within Plexus. In addition to Aberdeen recruitment continues for
our Asia hub, and we are currently in the process of filling 4
positions in Singapore. The safety of all our staff is of course of
critical importance, and we remain committed to delivering the
highest practical safety standards. We continue to manage our
safety risks through assessment, implementation of controls,
continual monitoring, and hiring and developing staff to meet the
competency levels required. We encourage our personnel to intervene
and to challenge any unsafe act or condition and to ensure
transparent reporting that meets our desired safety culture. As
Plexus grows internationally, the dependence on the availability of
our IT systems at all times is essential as we operate over many
time zones. Investment in our IT infrastructure has therefore
increased with added emphasis on securing the confidentiality,
integrity and availability of our systems, and our in-house
software development allows for the rapid creation of bespoke
systems that can be tailored specifically for the ever evolving
demands of the business. Plexus continues to generate new and
innovative IP, and where we believe it to be of value we invest in
expanding our extensive patent suite with both continuations, and
new patents.
These various on-going and planned operational initiatives, and
continued investment in tangible and intangible assets, are funded
through free cash flow and bank facilities where we work to ensure
that a suitable level of headroom is maintained. In September we
renewed and increased our bank facilities with the Bank of
Scotland, and comprise a GBP5m revolving credit facility on a three
year term and a GBP2m overdraft on a yearly term. In addition a
five year GBP1.5m term loan was put in place to part fund the
purchase of the additional Aberdeen facility.
Interim Results
Revenue for the six month period ended 31 December 2014 was
GBP13.51m, a 7% increase on the previous year's figure of
GBP12.64m. The rental wellhead equipment and associated services
business activities for exploration drilling contracts accounted
for over 97% of sales revenues. The largest sales component remains
the supply of our HP/HT wellhead equipment which increased by 9% to
GBP11.80m compared to GBP10.86m last year, and accounted for
approximately 87% of total revenues compared to 86% last year.
Revenue generated by the rental of 10,000 psi standard pressure
wells increased by 13% to GBP1.25m from GBP1.10m last year.
Geographically the North Sea during this period was the most
significant source of sales revenues as compared to the Rest of the
World where a number of contract activities came to an end and new
ones, such as Shell China, are now in the process of initiating.
Within the North Sea, UKCS sales rose by 29% to GBP5.77m, and in
the ECS, sales rose by 22% to GBP6.51m. Importantly within the ECS
sales to offshore Norway, where it is widely recognised that safety
and operating standards are particularly stringent, rose by
95%.
First half gross margins remained strong at 67.9% compared to
69.0% in the comparative period last year. The level of gross
margin achieved once again reflects the activity levels associated
with higher margin HP/HT rental operations as opposed to low
pressure equipment contracts.
As anticipated there was an increase in administration and
overhead expenses during the six month period to GBP7.05m compared
to GBP6.87m last year as we continued to invest in personnel and
infrastructure to support future growth plans and increased
operational and sales activities outside of the UK, notably in Asia
where travel and subsistence increased 40%. Staff overhead costs
were once again the most significant increase by value reflecting
the importance of the need to ensure that staff numbers are
appropriate for the Group's growth plans, and that they are well
trained and supported to ensure our ability to execute in line with
customer and company operational requirements. Personnel numbers
increased by 6% during the period from 144 to 153, and increased by
14 compared to the previous year as part of our on-going plan to
increase our organic activities capacity as well as various
strategic initiatives. Post period end, personnel numbers have
increased by a further 5 to 158. The proportion of these expenses
as a percentage of sales revenues decreased marginally to 52.2% as
opposed to 54.3% in the previous year reflecting efficiency
gains.
Profit before tax increased 16% to GBP2.20m compared to the
equivalent period last year (2013: GBP1.90m). This improved
performance was achieved after absorbing higher rental asset and
other property, plant and equipment depreciation and amortisation
costs totalling GBP1.85m up from GBP1.68m for the same period last
year, an increase of 10%. The higher level of depreciation and
amortisation reflects the impact of a record increase in capital
expenditure and the resultant addition of over ten wellhead sets
during the last two years. On-going investment in Plexus' rental
wellhead equipment inventory equipment, and totalled GBP1.35m as
compared to GBP1.80m for the prior year. Total capital expenditure
increased to GBP6.55m compared to GBP2.53m during the same period
last year an increase of 159%. However it is important to note that
GBP2.79m of this expenditure was the total cost including
improvements of acquiring circa 36,000 sq. ft. additional work shop
and facility space in Dyce, Aberdeen. If this is excluded from the
analysis capex increased by 49% demonstrating on-going investment
in the business. Profit before tax is stated after charges for
share based payments under IFRS2; the charge for the half year to
December 2014 is GBP0.01m, which compares to GBP0.01m for the
corresponding period last year. The Group has provided for a charge
to UK Corporation tax at the prevailing rate of 20% which is
expected to be the rate of tax for the full year, and compares to a
rate of 22% last year. The effective rate of tax for the six months
is 11% (2013: 19%) after the application of both R&D tax
credits relating to both the current and prior years, and offsets
for disallowable expenditure. In addition Plexus continues to
assess the degree to which the relatively new 'Patent Box' regime
will apply during the current financial year where we believe that
an element of our profits should qualify for a lower rate of
Corporation Tax. A share of profits from the associate has been
recorded as GBP0.16m (2013: GBP0.11m). Profit after tax increased
28% to GBP1.97m compared to the equivalent period last year (2013:
GBP1.54m). Basic earnings per share amounted to 2.32p per share
(2013: 1.85p).
The balance sheet continues to reflect the on-going investment
in operations, R&D and IP related strategic initiatives in line
with our growth strategy. Property, plant and equipment including
items in the course of construction stood at GBP16.93m as at the
end of December 2014, compared to GBP13.43m at the end of December
2013, an increase of 26%. This increase is mainly due to the
acquisition from Baker Hughes of new office and work shop premises
totalling circa 36,000 sq. ft., which doubled the size of the
operational headquarters in Dyce. This major investment follows on
from the last financial year's record level of capital expenditure,
and which in this period continued to be focussed primarily on the
expansion of rental inventory assets and which totalled GBP1.35m
compared to GBP1.80m last year, as well as related R&D activity
which increased by 94% to GBP1.36m against GBP0.71m in the same
period last year. A similar level of capex is envisaged in the next
financial year. IP continues to be an important component of our
balance sheet. The on-going development and protection of newly
created IP and twenty year patents will in particular support and
protect our business development plans for our targeted
participation in the subsea arena where, at the request of the
industry, we are developing our new HGSS subsea wellhead design.
This continued investment reflects our confidence in the superior
and proven nature of our proprietary technology and equipment, as
well as the scale of the market opportunity that exists outside of
our existing core organic jack up exploration rental wellhead
business. With regards to cash flow, GBP2.62m was paid for
capex,
excluding GBP2.79m in relation to the total cost including
improvements of the new premises, unchanged from the same period
last year. The Group closed the period with net borrowings of
GBP4.07m after paying a final dividend of GBP0.53m during the
period and incurring capital expenditure, including the new
premises and R&D totalling GBP5.41m. Bank facilities totalling
GBP8.425m (comprising a three year revolving GBP5.00m credit
facility, an additional GBP2.00m overdraft facility agreed on a
yearly term, and a five year term loan with a current balance of
GBP1.425m) will be deployed to fund future activities. These
include on-going R&D activity, rental inventory additions,
continued capital expenditure related to the HGSS subsea JIP
project including the building of a prototype for launch at SPE
Offshore Europe Aberdeen oil show in September, and anticipated
increased support for our Asian hub sales and service strategy.
Outlook
Plexus is fortunate that our organic rental exploration business
is based on drilling activities that are proving to be more
resilient to the current oil price collapse namely shallow water
offshore from jack-up rigs and involvement in prolific long term
HP/HT gas fields which can have a twenty five year life over which
to recover capital costs. This means that we continue to have good
visibility of future business opportunities and remain confident
for the current financial year, subject of course to any unforeseen
delays, which we have seen some evidence of. However in view of
continued oil and gas price volatility and uncertainty it is
firstly essential, when considering the future, that it is placed
in the context of past events during the period and post period
end. In view of the significance of these developments I make no
apologies for my outlook deliberations being longer than usual.
This is important as there is inevitably a correlation between
relative higher oil prices and drilling activity and associated
capital expenditure commitments by the international and national
oil and gas operators. It should be noted of course, and this does
not seem to attract much comment in the press, that much oil and
gas production is for domestic consumption around the world and in
essence whatever the price in the market such drilling has to
continue so as to be able to provide heat, power, and fuel for such
populations.
In terms of understanding the events over the last circa nine
months, and importantly where things may now be heading, the
starting point is to try and understand why oil prices have fallen
by over 50% since last summer. Many commentators will point out
that The Organisation of the Petroleum Exporting Countries
('OPEC'), which still accounts for over 40% of the world oil
market, and is likely to do so for the next twenty years, is there
to maintain price stability within certain parameters. Therefore at
a time when the US was materially increasing domestic production of
tight oil why would in particular Saudi Arabia, UAE, and Kuwait
keep oil flowing thereby driving prices down so far and so quickly?
There are of course a number of conspiracy theories and
explanations that have been put forward to explain these events.
However, after analysing and assimilating a significant amount of
data, my preference is for the simplest explanation based on market
dynamics and to look at how any supplier in any market may choose
to respond to an aggressive competitor, who in their opinion has
created an imbalance of supply. In the case of Saudi Arabia it is
reasonable to assume that they viewed the significant growth in US
tight oil production as irresponsible and even reckless, and that
by maintaining Saudi production levels, where break even prices are
reported to be less than US$10 per barrel, they are not only
protecting their market share, but also are allowing market forces
to operate to enforce some discipline in the market and to in
effect 'teach them a lesson'. This view is supported by very recent
comments made by the Saudi oil minister, Ali al-Naimi who
reiterated that stability and market balance were the key drivers
of the kingdom's oil policy and expansion plans. This tactic has of
course been very effective and the US has been impacted by this
strategy more than any other region, with a significant reduction
in drilling activity and large numbers of land rigs becoming
inactive, to the degree that Cannacord expects the US rig count to
average 40% lower in 2015 than it did in 2014. The key question
however is when will the reduced number of rigs result in lower
production as productivity has been increasing due to improved
drilling techniques and technological advances.
So what happens next? A consensus seems to be forming that
supply dynamics are such that production declines will overwhelm
new capacity being brought on stream and that this could be as soon
as May or June. As Core Labs the US leading provider of reservoir
description, production enhancement, and reservoir management
services said "the decline curve never sleeps, and the decline
curve always wins". This as the Saudis realise is particularly the
case with unconventional tight oil wells because as the Group Chief
Economist of BP, Spencer Dale recently pointed out, these onshore
wells have "exceptionally high rates of decline" and a "good well
may produce 700 barrels of oil per day when it first starts, but
that may be down to 100 by the end of the first year". As he put it
"you have to run very fast to stand still in Texas and North
Dakota".
The current weakness in oil prices, in what is a cyclical
industry therefore may well not last. The issue then becomes what
level are they likely to recover to and will they stay there? Of
course such deliberations are not certain, but what is clear is
that the optimal outcome for the industry is an oil price which is
high enough to incentivise enough US production to balance
inexorable growing global demand. Perhaps in the medium term that
would be in the US$75 to US$85 per barrel range, subject to the
impact of the overhang that exists due to current very high crude
storage levels. Should the oil price overshoot such a level a
further question is whether the same overproduction cycle would
start all over again? My view is that it would not necessarily, as
the uncertainty created by the unexpectedness and the depth of the
current oil price decline has severely impacted the independent
companies' confidence in a stable high oil price environment, and
therefore the attractiveness of marginal developments will not be
there either for the companies themselves or for the banks and
investors who would be asked to fund such projects. Importantly I
think that such an outcome would in the medium term be better for
oil service companies than for the smaller exploration and
production companies.
Despite these events, and the fact that no company in the oil
and gas sector can be immune from the current uncertainties in
terms of pricing pressures and potential contract delays, there are
a number of positive dynamics that are encouraging for Plexus'
organic jack up exploration market, as well as for new strategic
opportunities that we are targeting such as subsea exploration and
production. From a macro perspective global demand for energy is
only going to increase significantly as a result of growth in
developing economies. As ExxonMobil forecast in its 2014 "The
Outlook for Energy: A View to 2040" by 2040 the global population
will increase by two billion, resulting in 35% greater demand for
energy, and critically that 60% of this extra demand will be
supplied by oil and natural gas. Such demand drives global
exploration and production spending which, at US$619.43bn, remains
a massive market despite Barclays in its "E&P Spending Outlook"
in January, which is based on a survey of 225 oil and gas
companies, forecasting this could fall 9% in 2015.
At the more micro level much of the industry's capital
reductions are expected to occur in North America where Plexus
currently chooses not to operate. Plexus currently specialises in
offshore jack up exploration drilling especially for HP/HT gas
operations, where long term prolific wells are found. It is
specifically these market opportunities that have been identified
as being particularly resilient. E&P magazine recently reported
that "the jack-up drilling market is forecasted to weather the
storm better than others", and encouragingly Prospector Offshore in
a statement said that "we expect E&P company capital
expenditures for jack-up drilling to continue to be less influenced
by the slowdown in capital expenditures relative to many other
subsectors because jack-ups are typically used to develop oil
reserves that are cheaper to develop than alternative oil
reserves....". Only last month, Rystad Energy went further when it
said it believes that offshore will be the most important source of
new production by 2020-2025. Prospector also stated that there is a
"push by some oil and gas companies into HP/HT environments" and
that evidence shows that higher specification jack-up rigs that are
ideal for our HP/HT wellheads have shown the most robust
utilisation and rig rates, and I agree that in the current
environment offshore shallow water exploration is more protected.
Such HP/HT wells in particular are prolific by any measure, but
where they win over shale tight gas wells is that they can last for
many, many years. This means that even though the upfront capex
costs can be high, when amortised from a 'whole of life'
perspective they are very economic, and remain extremely viable as
the peak cash generation period is spread over a longer
timeline.
For these reasons our core organic jack-up exploration business
is well positioned for growth in the coming years, and that the
continuing importance of HP/HT fields, where we are recognised as
the leading supplier in both the demanding UKCS and ECS, will
support our strategic plans for both geographic expansion in
regions like Asia and Eurasia, and expansion into subsea and
production well markets. With this in mind it was encouraging to
read in February an Oil & Gas IQ Report based on an industry
survey that the two biggest areas for HP/HT expansion in the coming
years would be the North Sea and the Asia Pacific ('APAC'). Plexus
is of course already dominant in the North Sea where encouragingly
a range of tax cuts designed to stimulate exploration and
production were announced in last week's Budget, especially for
HP/HT exploration and appraisal activity. We now therefore look
forward to focussing on the APAC market opportunity, where we have
already gained customers in Australasia, Brunei, China, and
Malaysia. In addition to such organic sales opportunities, we of
course continue to pursue licencing and joint venture partnerships
with appropriate entities that either are already in the oil
services and wellhead business, or who wish to move into it with a
superior product, and we are confident that such initiatives will
bear fruit in the future.
It is clear therefore that arguably more factors than ever
before have to be taken into consideration when looking into the
future. However what is irrefutable is that in a world where
regulation, safety, and technical innovation are increasingly
recognised as paramount, our POS-GRIP method of engineering
continues to deliver superior wellhead solutions not only for
surface but soon subsea applications, and that whereas trading
cycles come and go the veracity of what we offer the industry will
not. Although operators around the world have been quick to realign
their budgets to the lower oil price environment by cutting capex
and reducing operating costs, the fact that our wellhead equipment
also offers material cost and time savings means that in our view
we are ideally placed to win a greater share of the market as such
cost considerations become increasingly important. It is such
features that lead to the development of new POS-GRIP based
products such as our POS-SET Connector to facilitate abandonment
operations where we believe we can actively participate in this new
and significant market opportunity.
I would like to thank all those involved with Plexus for their
hard work and commitment during this period. We remain confident of
on-going growth and in our ability to secure a larger share of the
global wellhead market, even if unforeseen geopolitical factors do
arise from time to time, such as those the industry has experienced
since last summer. On a final note, in one of his last speeches to
senior oil and gas industry executives in 2013, Peter Voser, the
former chief executive of Royal Dutch Shell perhaps best
articulated how the wider industry should respond to such
developments. He said the industry's first priority "must be to
invest heavily in new supplies, and to maintain it through economic
and political turbulence. Failing to do so would be a sure path to
another crunch and major price volatility". On this basis
establishing the right balance between supply and demand is one of
today's biggest challenges for OPEC and the global oil and gas
industry, but inevitably a suitable equilibrium level will be
found.
Jeff Thrall
Chairman
24 March 2015
Plexus Holdings Plc
Unaudited Interim Consolidated Statement of Comprehensive
Income
For the six months ended 31 December 2014
Six months Six months Year to
to 31 December to 31 December 30 June
2014 2013 2014
GBP 000's GBP 000's GBP 000's
Revenue 13,506 12,643 27,024
Cost of sales (4,334) (3,923) (7,817)
--------------- --------------- ---------
Gross profit 9,172 8,720 19,207
Administrative expenses (7,052) (6,865) (13,928)
--------------- --------------- ---------
Operating profit 2,120 1,855 5,279
Finance income 2 3 5
Finance costs (83) (65) (124)
Share of profit of associate 165 105 215
Profit before taxation 2,204 1,898 5,375
Income tax expense (note 5) (238) (360) (329)
Profit after taxation 1,966 1,538 5,046
Other comprehensive income - - -
Total comprehensive income 1,966 1,538 5,046
=============== =============== =========
Earnings per share (pence)
Basic (note 6) 2.32p 1.85p 6.01p
Diluted (note 6) 2.23p 1.76p 5.75p
Plexus Holdings Plc
Unaudited Interim Consolidated Statement of Financial Position
As at 31 December 2014
31 December 31 December 30 June
2014 2013 2014
GBP 000's GBP 000's GBP 000's
ASSETS
Goodwill 760 760 760
Intangible assets 11,466 9,173 10,437
Investment in associate 1,106 830 941
Property, plant and equipment
(note 8) 16,931 13,426 13,284
Deferred tax assets - 789 751
Total non-current assets 30,263 24,978 26,173
----------- ----------- ---------
Inventories 6,065 5,352 5,256
Trade and other receivables 6,571 4,462 6,463
Cash and cash equivalents 2,352 6,734 6,353
Total current assets 14,988 16,548 18,072
----------- ----------- ---------
TOTAL ASSETS 45,251 41,526 44,245
=========== =========== =========
EQUITY AND LIABILITIES
Called up share capital 849 849 849
Share premium account 20,138 20,138 20,138
Share based payments reserve 1,641 2,803 2,476
Retained earnings 12,557 7,612 11,117
Total equity attributable to
equity holders
----------- ----------- ---------
of the parent 35,185 31,402 34,580
----------- ----------- ---------
Bank loans 6,125 4,000 4,000
Deferred tax liabilities 96 - -
Total non-current liabilities 6,221 4,000 4,000
----------- ----------- ---------
Bank loans 300 - -
Trade and other payables 3,202 5,459 5,482
Current income tax liabilities 343 665 183
Total current liabilities 3,845 6,124 5,665
----------- ----------- ---------
Total liabilities 10,066 10,124 9,665
----------- ----------- ---------
TOTAL EQUITY AND LIABILITIES 45,251 41,526 44,245
=========== =========== =========
Plexus Holdings Plc
Unaudited Interim Statement of Changes in Equity
For the six months ended 31 December 2014
Called Share Share Based
Up Share Premium Payments Retained
Capital Account Reserve Earnings Total
GBP 000's GBP 000's GBP 000's GBP 000's GBP 000's
Balance as at 1 July 2013 828 17,288 2,741 6,335 27,192
Total comprehensive income
for the year - - - 5,046 5,046
Share based payments reserve
charge - - 26 - 26
Transfer of share based
payments reserve charge
on exercise of options - - (599) 599 -
Issue of ordinary shares
(net of issue costs) 21 2,850 - - 2,871
Net deferred tax movement
on share options - - 308 - 308
Dividends - - - (863) (863)
--------- --------- ----------- --------- ---------
Balance as at 30 June 2014 849 20,138 2,476 11,117 34,580
Total comprehensive income
for the period - - - 1,966 1,966
Share based payments reserve
charge - - 12 - 12
Net deferred tax movement
on share options - - (847) - (847)
Dividends - - - (526) (526)
Balance as at 31 December
2014 849 20,138 1,641 12,557 35,185
========= ========= =========== ========= =========
Plexus Holdings Plc
Unaudited Interim Statement of Cash Flows
For the six months ended 31 December 2014
Six months Six months Year to
to 31 December to 31 December 30 June
2014 2013 2014
GBP 000's GBP 000's GBP 000's
Cash flows from operating activities
Profit before taxation 2,204 1,898 5,375
Adjustments for:
Depreciation, amortisation and
impairment charges 1,848 1,683 3,405
Loss on disposal of property,
plant and equipment 20 60 95
Charge for share based payments 12 12 26
Investment income (2) (3) (5)
Interest expense 60 65 124
Share of result in associate (165) (105) (215)
Changes in working capital:
(Increase) / decrease in inventories (809) 680 776
(Increase) / decrease in trade
and other receivables (108) 460 (1,541)
(Decrease) / increase in trade
and other payables (2,280) 233 256
Cash generated from operations 780 4,983 8,296
Income taxes paid (78) (4) (353)
Net cash generated from operating
activities 702 4,979 7,943
--------------- --------------- ---------
Cash flows from investing activities
Acquisition of associate - (725) (726)
Purchase of intangible assets (1,413) (796) (2,403)
Purchase of property, plant and
equipment (5,136) (1,729) (3,016)
Proceeds of sale of property,
plant and equipment 5 42 57
Net cash used in investing activities (6,544) (3,208) (6,088)
--------------- --------------- ---------
Cash flows from financing activities
Drawdown of loans 2,500 - -
Repayment of loans (75) - -
Net proceeds from issue of new
ordinary shares - 2,330 2,330
Proceeds from share options exercised - 541 541
Interest paid (60) (65) (124)
Interest received 2 3 5
Equity dividends paid (526) (455) (863)
Net cash generated from financing
activities 1,841 2,354 1,889
--------------- --------------- ---------
Net (decrease) / increase in
cash and cash equivalents (4,001) 4,125 3,744
Cash and cash equivalents at
1 July 6,353 2,609 2,609
Cash and cash equivalents at
31 December 2,352 6,734 6,353
=============== =============== =========
Notes to the Interim Report December 2014
1. This interim financial information does not constitute
statutory accounts as defined in section 435 of the Companies Act
2006 and is unaudited.
This unaudited interim report has been prepared on the basis of
the accounting policies set out in the annual report for the year
ended 30 June 2014 and which are also expected to apply for 30 June
2015.
The interim financial information is compliant with IAS 34 -
Interim Financial Reporting.
The accounting policies are based on current International
Financial Reporting Standards ("IFRS"), International Financial
Reporting Interpretation Committee ("IFRIC") interpretations and
current International Accounting Standards Board ("IASB") exposure
drafts that are expected to be issued as final standards and
adopted by the EU such that they are effective for the year ending
30 June 2015. These standards are subject to on-going review and
endorsement by the EU and further IFRIC interpretations and may
therefore be subject to change.
2. This interim report was approved by the board of directors on
23rd March 2015.
3. During the interim period the Group paid a final dividend on
ordinary shares of GBP526k. The directors have approved the payment
of an interim dividend of 0.51p per share which will be paid on
22nd April 2015 to members appearing in the register on the record
date of 7th April 2015.
4. There were no other gains or losses to be recognised in the
financial period other than those reflected in the Statement of
Comprehensive Income.
5. Taxation on the operating profit after interest has been
provided at a rate of 20% for the six months ended 31 December 2014
(2013: 22%) which is the estimated rate of UK tax for the full
year. The effective rate of tax for the six months is 11% (2013:
19%) after adjustments made to reflect R&D tax credits received
relating to the current and prior years and offsets for
disallowable expenditure.
6. Basic earnings per share are based on the weighted average of
ordinary shares in issue during the half-year of 84,892,673 (2013:
83,208,567). The calculation of fully diluted earnings per share is
based on the weighted average number of ordinary shares in issue
plus the dilutive effect of outstanding share options being
3,282,919 (2013: 4,196,929). The number of shares included in the
calculation of fully diluted earnings per share was 88,175,592
(2013: 87,405,496).
7. The Group derives revenue from the sale of its POS-GRIP
friction-grip technology and associated products, the rental of
wellheads utilising the POS-GRIP friction-grip technology and
service income principally derived in assisting with the
commissioning and on-going service requirements of its equipment.
These income streams are all derived from the utilisation of the
technology which the Group believes is its only segment. Business
activity is not subject to seasonal or cyclical fluctuations.
8. Property, plant and equipment
Assets
Tenant under
Improve-ments Constru-ction Motor
Buildings GBP'000 Equipment GBP'000 Vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 1 July 2013 972 353 22,594 659 42 24,620
Additions 2 77 430 2,505 2 3,016
Transfers - - 2,904 (2,904) - -
Disposals - - (535) - - (535)
As at 30 June 2014 974 430 25,393 260 44 27,101
Additions 2,788 - 745 1,592 11 5,136
Transfers - - 1,488 (1,488) - -
Disposals - - (133) - (7) (140)
As at 31 December
2014 3,762 430 27,493 364 48 32,097
Depreciation
As at 1 July 2013 325 76 11,028 - 23 11,452
Charge for the
year 80 50 2,612 - 6 2,748
On disposals - - (383) - - (383)
As at 30 June 2014 405 126 13,257 - 29 13,817
Charge for the
year 39 27 1,393 - 5 1,464
On disposals - - (111) - (4) (115)
As at 31 December
2014 444 153 14,539 - 30 15,166
Net book value
As at 31 December
2014 3,318 277 12,954 364 18 16,931
As at 30 June 2014 569 304 12,136 260 15 13,284
As at 30 June 2013 647 277 11,566 659 19 13,168
9. The comparative figures for the financial year ended 30 June
2014 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the company's
auditors, Crowe Clark Whitehill LLP, and delivered to the registrar
of companies. The report of the auditors was (i) unqualified, (ii)
did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report
and (iii) did not contain a statement under section 498(2) or (3)
of the Companies Act 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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