Plexus Engineering to Cut 50 Jobs
The Aberdeen-based wellhead engineering specialist has reported a £3.49m pre-tax loss for the six months to December 31
Wellhead engineering specialist Plexus Holdings has cut 50 jobs and suspended dividend payments after booking a £3.49 million pre-tax loss for the six months to December 31.
The Aberdeen-based group notes revenues halved in the six months to £6.76 million.
The board has suspended dividend payments in response to the “current low oil price environment and resulting reduction in exploration drilling activity”.
Plexus, whose POS-GRIP wellhead technology is used all over the world, said the impact of low oil prices is “particularly felt in the UK North Sea” and it has “embarked on a series of major headcount and cost reduction measures”.
The group notes post period end it made around 50 staff redundant, effective March 2016.
“Personnel numbers have reduced from circa 130 as at 31 December 2015 to circa 80 currently”, Plexus said.
Plexus chief executive, Ben van Bilderbeek, said: “Like all companies operating in the oil and gas sector, the rapid and sharp decline seen in the oil price over the last eighteen months, and particularly since late 2015, has significantly impacted our first half performance and current outlook as previously reported to the market.
“Despite this we remain positive for the future as, unlike many other oil and gas services and engineering companies, Plexus is proprietary IP driven thanks to our patent protected POS-GRIP technology providing the heart of our best in class wellhead equipment.”
The group notes North Sea investment “is expected to fall by almost 90 per cent with fewer exploration wells anticipated than at any time since data started being collected in the late 1970’s”.
In January shares in AIM-listed Plexus dropped 40 per cent after it warned the slowdown in the oil and gas sector will have “a very significant impact” on the 2016 financial year to June 30.
Plexus notes its current bank facilities with the Bank of Scotland currently comprise a three year term £5 million revolving credit facility renewable September 2016 and a £1 million overdraft payable on demand.
The group also notes a “reducing five year £1.5 million term loan (current balance £1.12 million) which was “put in place in September 2014 to part fund the purchase of the additional facility in Aberdeen” and runs to September 2019.
Shares in Plexus were down more than seven per cent on Wednesday.
