A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
A N N U A L R E P O R T
2 0 1 5
2 0 1 5
2 0 1 5
2 0 1 5
2 0 1 5
S A F E R P E R F O R M A N C E
F A S T E R S E R V I C E
R E D U C E D C O S T S
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
Changing global drilling
standards in the oil
and gas industry by
delivering in novative
equipment and services
which dramatically
improve safety and
reduce costs.
P L E X U S H O L D I N G S PL C I S L I S T E D O N T H E A I M M A R K E T O F T H E
LO N D O N S TO C K E XC H A N G E ( AI M : P O S)
C O N T E N T S
P L E X U S AT A G L A N C E
B U S I N E S S R E V I E W
F Y 2 0 1 5 H i g h l i g h t s
P l e x u s a t a G l a n c e
P O S - G R I P / P r o d u c t O f f e r i n g
S t a r S a f e t y
S T R AT E G I C R E P O R T
P r i n c i p a l A c t i v i t y
F i n a n c i a l R e s u l t s
O p e r a t i o n s R e v i e w
S t r a t e g y a n d F u t u r e
D e v e l o p m e n t s
K e y P e r f o r m a n c e
I n d i c a t o r s
2
4
6
9
2 8
2 8
3 5
3 9
4 3
C E O M e s s a g e
C h a i r m a n ’ s S t a t e m e n t
1 2
1 7
FINANCIAL STATEMENTS
C o n s o l i d a t e d S t a t e m e n t o f
C o m p r e h e n s i v e I n c o m e
C o n s o l i d a t e d S t a t e m e n t o f
F i n a n c i a l P o s i t i o n
C o n s o l i d a t e d S t a t e m e n t o f
C h a n g e s i n E q u i t y
C o n s o l i d a t e d S t a t e m e n t o f
C a s h F l o w s
N o t e s t o C o n s o l i d a t e d
F i n a n c i a l S t a t e m e n t s
6 6
6 7
6 8
6 9
7 0
I n d e p e n d e n t A u d i t o r ’s R e p o r t 1 0 0
CORPORATE GOVERNANCE
B o a r d o f D i r e c t o r s
D i r e c t o r s ’ R e p o r t
C o r p o r a t e G o v e r n a n c e
R e p o r t
R e m u n e r a t i o n C o m m i t t e e
R e p o r t
S t a t e m e n t o f D i r e c t o r s ’
R e s p o n s i b i l i t i e s
4 8
5 0
5 3
5 6
6 1
P a r e n t C o m p a n y S t a t e m e n t
o f F i n a n c i a l P o s i t i o n
P a r e n t C o m p a n y S t a t e m e n t
o f C h a n g e s i n E q u i t y
P a r e n t C o m p a n y S t a t e m e n t
o f C a s h F l o w s
N o t e s t o t h e P a r e n t C o m p a n y
F i n a n c i a l S t a t e m e n t s
Inde pendent Auditor ’s Report 62
C o m p a n y I n f o r m a t i o n
1 0 2
1 0 3
1 0 4
1 0 5
1 1 5
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2
F I N A N C I A L R E S U L T S
● R e c o r d r e v e n u e , E B I T D A , p r o f i t b e f o r e t a x a n d p r o f i t a f t e r t a x
●
P AT i n c r e a s e d 18.8% t o £5.43m ( 2 0 1 4 : £ 4 . 5 7 m a s r e s t a t e d )
● R e v e n u e s i n c r e a s e d 5.6% t o £28.53m ( 2 0 1 4 : £ 2 7. 0 2 m )
● E B I T D A i n c r e a s e d 5.7% t o £9.53m ( 2 0 1 4 : £ 9 . 0 2 m )
● P B T i n c r e a s e d 10.5% t o £5.94m ( 2 0 1 4 : £ 5 . 3 8 m )
● E P S i n c r e a s e 17.5% t o 6.40p ( 2 0 1 4 : 5 . 4 4 p a s r e s t a t e d )
● F i n a l d i v i d e n d p r o p o s e d i n c r e a s e o f 182.3% t o 1.75p p e r s h a r e
( 2 0 1 4 : 0 . 6 2 p )
C O R P O R A T E H I G H L I G H T S
● G r o w i n g g l o b a l a w a r e n e s s o f b o t h P l e x u s a n d t h e s a f e t y a n d
o p e r a t i o n a l b e n e f i t s o f P O S - G R I P ® t e c h n o l o g y
●
J e r e h , C h i n a ( n e w l i c e n c i n g p a r t n e r ) s u b s c r i b e d f o r 5 % i s s u e d
s h a r e c a p i t a l o f P l e x u s f o r £ 8 . 0 4 m
●
S i z e o f A b e r d e e n o p e r a t i o n a l h e a d q u a r t e r s d o u b l e d - £ 2 . 4 m
a c q u i s i t i o n o f a c i r c a 3 6 , 0 0 0 s q . f t w o r k s h o p a n d o f f i c e f a c i l i t y
f r o m B a k e r H u g h e s
●
P r e s e n t e d a t t w o m a j o r o i l a n d g a s c o n f e r e n c e s - “ W o r l d O i l H P / H T
D r i l l i n g a n d C o m p l e t i o n s C o n f e r e n c e ” i n H o u s t o n , Te x a s , a n d t h e
“ H P / H T W e l l s S u m m i t 2 0 1 5 ” i n L o n d o n
●
W o n t h e “ C o m m i t m e n t t o I n n o v a t i v e U s e o f R e s e a r c h a n d
D e v e l o p m e n t ” a w a r d a t t h e 1 1 t h a n n u a l N o r t h e r n S t a r B u s i n e s s
A w a r d s 2 0 1 4 , i n A b e r d e e n
● S t r e n g t h e n e d B o a r d w i t h t h e a p p o i n t m e n t o f C h a r l e s J o n e s a s a
n o n - e x e c u t i v e d i r e c t o r
● B a n k f a c i l i t i e s r e n e w e d p o s t p e r i o d e n d w i t h t h e B a n k o f S c o t l a n d
● £ 5 m r e v o l v i n g c r e d i t f a c i l i t y o n 3 y r. t e r m
●
A d d i t i o n a l £ 1 m o v e r d r a f t o n a y e a r l y t e r m
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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H I G H L I G H T S F Y 2 0 1 5
3
O P E R A T I O N A L H I G H L I G H T S
● S t r o n g f i n a n c i a l p e r f o r m a n c e d r i v e n b y c o r e b u s i n e s s r e n t i n g
p r o p r i e t a r y P O S - G R I P ® f r i c t i o n - g r i p w e l l h e a d e x p l o r a t i o n e q u i p m e n t -
c o n t r a c t s s e c u r e d i n c l u d e :
●
●
●
●
●
●
●
●
●
£ 0 . 6 m C e n t r i c a f o r N o r t h S e a
£ 0 . 9 m D e t N o r s k e i n N o r w a y
S i g n i f i c a n t c o n t r a c t w i t h B G G r o u p f o r N o r t h S e a
£ 1 . 9 m o r d e r w i t h u n d i s c l o s e d c u s t o m e r f o r N o r t h S e a
£ 1 . 5 m f o r B r u n e i S h e l l i n B r u n e i
U S $ 0 . 8 m f o r C a r d o n I V i n V e n e z u e l a
£ 1 . 0 m P r e m i e r O i l N o r g e A S f o r N o r t h S e a
£ 1 . 2 5 m M a e r s k f o r N o r t h S e a
£ 3 . 3 m n e w c u s t o m e r To t a l i n N o r w a y
● A c c e l e r a t i o n o f p l a n n e d i n t e r n a t i o n a l e x p a n s i o n t h r o u g h s t r a t e g i c
i n i t i a t i v e s :
●
●
●
M a j o r C h i n e s e l i c e n c e a g r e e m e n t s i g n e d w i t h J e r e h
F o r m a t i o n o f a n e w M a l a y s i a n J o i n t V e n t u r e c o m p a n y
S e c u r e d M a l a y s i a n P E T R O N A S l i c e n c e
● £ 1 . 5 m d i s p o s a l o f 2 5 % s h a r e h o l d i n g i n t e r e s t i n p r i v a t e m a n u f a c t u r i n g
c o m p a n y
● R e s e a r c h a n d d e v e l o p m e n t a n d n e w p r o d u c t i n n o v a t i o n :
●
L a u n c h e d n e w P y t h o n ™ S u b s e a W e l l h e a d – J I P p a r t n e r s i n c l u d e
B G , e n i , M a e r s k , R o y a l D u t c h S h e l l , T O TA L , Tu l l o w O i l , W i n t e r s h a l l
a n d S e n e r g y
●
£ 0 . 8 m a g r e e m e n t w i t h C e n t r i c a f o r n e w P O S - S E T C o n n e c t o r ™ f o r
g r o w i n g a b a n d o n m e n t m a r k e t
●
●
●
C o l l a b o r a t i o n w i t h A q u a t e r r a t o d e v e l o p H P / H T d u a l m a r i n e r i s e r s
H P / H T T i e - B a c k c o n n e c t o r p r o d u c t b e i n g m a r k e t e d t o t h e i n d u s t r y
C a p i t a l i n v e s t m e n t i n a d d i t i o n a l P O S - G R I P r e n t a l w e l l h e a d a s s e t s
f o r e x p l o r a t i o n w a s £ 2 . 5 3 m ( 2 0 1 4 : £ 2 . 3 2 m )
●
R & D s p e n d i n c r e a s e d b y 4 6 . 7 % t o £ 3 . 4 7 m ( 2 0 1 4 : £ 2 . 3 7 m )
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P L E X U S A T A G L A N C E
O U R V I S I O N
O U R S T R A T E G Y
T o bu i ld Plexus in to a l eadin g international
wel lh e ad engi neerin g com pany s u pp lying POS-
GR IP frict io n-grip techn ol ogy as the best in
c las s and s afest we llh ead e q ui p ment across
ex pl orati on, pr oduc ti on and su b s ea.
A ccelerate the adop tion of PO S-GRIP technology
by the wider oil and gas market through organic
growth, global expansion,
forming strategic
partners and licencing agreements as well as new
product development and innovat ion to generate
additional revenue streams.
MIES O F S C
O
N
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L
A
AFER + C O S T E
S
D R I V E C LIENT LOYALTY
E
I V
T
C
E
F
F
L E V ERAGING GROUP SKILL
S
N E W PRODUCTS
S
D
A
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P E
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V
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D
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RODUCTION WELLHEA
SA
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C
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IN
EMIUM COUPLINGS STANDARDS
MATCHIN
G P
R
P L E X U S
B U S I N E S S M O D E L
P L E X U S ’ B U S I N E S S M O D E L
P lex u s operates a
r en tal su pply busines s
Plexus has a strong and experienced B oard and
mo de l for its proprietary POS- GR I P® wellhead
management structure with which to d rive gr owth.
equ i pmen t pri m arily for th e e xp loration jack-
Our Board has a diverse skill set allowing each
u p m arket, sells in to th e pr od u ct i on wellhead
member to help deliver on Plexu s’ vision which is
marke t and w ill so on rent an d s ell into the
to be at the forefront of wellhead technology and
s ubs e a wel lhead m arket . C e n t ral to Plexus’
establish our patented and best in class POS-
reven ue
busin es s m od el
i s R &D and new
GRIP technology as a new ind us try standard for
pro du c t i nnovat ion . Recen t e xam ples includ e
wellhead d esign, thanks to it s products which
t he lau nch of th e Pytho n Su bs ea w ellhead, POS-
offer multiple benefits and advan tag es in te rms
GR I P C onnect or and Mari ne Ri s e rs . Plex us is
of improved safety, functionality, operational
als o l ooki ng t o ac celerate its g l ob al expansion
efficiency, and cost and time s av ings.
t hr ou gh l i cenci ng and st rat egi c p ar tnership s.
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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5
G L O B A L E X P A N S I O N
W e continue to receive enquiries from across
for jack-up d rilling exploration activities. In ter ms
th e gl o be from oil and gas operators that are
of sales achieved during financial year 2 015, a
co nsi deri ng POS-GRIP technolog y for its u nique
strong p erformance was seen in Eur ope which,
tec hn ic al, safety and time saving cap abilities.
excluding the UK, grew 110 % and accounted for
E xpandi ng fro m ou r dominant p osition in the
51% of sales as comp ared to the UK North Sea
No rth S ea i nto n ew ge ograph ical areas is cen tral
which grew by 7% and accounted for 37 % of
to ou r growt h strategy, esp ecially at a time wh en
sales. Sales in the rest of world accounted for
th e No rth Sea is u nder p ress ur e f rom a low oil
12% of sales, of which Asia comprised 9.2% an
pri ce. Our prim ary revenue st ream is derived
increase of 22% against last year.
fro m o ur POS -GRIP fric tion grip wellhead s ys tems
G O M
U K C S
A S I A & R U S S I A
Th e Gulf of Mexico
account s
for
t he
majority of oil and
ga s
on
the
Cont inental
prod uction
Ou ter
S helf.
Th e p ropos ed 2 017-
20 22 offs hore lease
program me
is also
project ed t o u nlock
ap proximat ely
80
pe rcen t of estimated
u n d i s c o v e r e d
t e c h n i c a l
l y
recoverable oil and
gas resources on the
OCS.
A M E R I C A S
We
secu red
our
firs t
contract with
a
Sou th
Ame rican com p any C ardon
IV (a 5 0:5 0 j oin t ventu re
be tween e ni and Rep so l)
for an e xplorat ion well in
Ven ezuela.
R E G I O N A L B A S E S
H E A D Q U A R T E R S
L I C E N C I N G A G R E E M E N T
P E R C E N T A G E O F G R O U P
R E V E N U E S A L E S F Y
2 0 1 5
We
have
successful ly
secured a
l eading market
share
of
the
HP/HT
explo ratio n well head
jack-
up in the N orth Sea regio n
sup plying
our
POS-GRIP
equip ment to many o f the
lead ing oi l and g as o perato rs
that o perate in the area.
We have
iden tified
these
as reg ions with signific ant
grow th potent ial. We have
an
acti ve dialogue with
regards
to
licen cing an d
strategic
partn ership s
to
help
acce lerat e
the
dep loyments of POS -GRIP
in the se r egions inc ludin g
the J ereh Chi nese licenc ing
agreement in July 2015.
E U R O P E
A U S T R A L A S I A
Thi s was our
larg est g rowth re gio n
in
terms
o f
revenues
for
2015,
com prisi ng o f N orway, Denmar k, and
the Netherlands. It represented a 51%
share with the majority of co ntract w ins
bei ng secured in N orway. With our
headquarters in Aberdeen, where we
have recently d oubled our o perati onal
capacity, Euro pe will continue to rem ain
a focus fo r Plexus and POS-G RIP N orth
Sea contract w ins.
In
2014,
Plexus
secur ed
its
third POS-G RIP su pply
contract
in
the Australian
regi on.
IBISWo rld
has
forecast revenues of $40.3
bi lli on for the Australian oil
and g as industry fo r 2015 and
expects a grow th rate of 12.8
per cent year o n year, with
revenues expected to ju mp to
$45.4 bi lli on for 2016.
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6
P O S G R I P /
P R O D U C T O F F E R I N G
POS-GRIP Technology i s a p at ente d me t ho d o f eng i nee ri n g w hich
has th e potenti al for a wi de ra nge o f a pp li ca t i o ns b o t h w i t hi n
and ou ts ide t he oil and gas ind us t ry. Fo r t he up s t rea m o i l an d
gas markets POS-GRIP ha s b een d e velo pe d t o de li ve r a met ho d o f
wellhead engineering whi ch is s a fe r, fa s t e r an d mo re co s t ef fe c tive to
use for drilling ac ti vit i es ac ros s ex p lo ra t i o n, p ro d uc t i o n a nd s ub sea.
P O S - G R I P T E C H N O L O G Y A N D H G ® S E A L S
P OS -G R I P is bas ed on t wo ve ry s i m pl e engineering
c on c epts – el asti city of m at e ri als and friction.
Ever y o b ject moves a smal l am ou n t wh en a force
is appl ied to it , and PO S-GRIP u s es this to f lex a
h igh pres sure body in and ou t w i thin th e elastic
ran ge.
In well heads,
POS-GR IP
c an
replace
t he
c o nven t io nal l oad shoulde r or s l i ps to creat e a
h igh - l oad hanger su ppor t m e ch an is m which is
adju st abl e, fu ll-bo re, fu lly el as t i c, and p rovides
in s t ant , hi gh-c apaci ty l oc kd ow n.
H G s eals are robust metal -to -m e tal seals which
c an be m achi ne d direc tl y in to th e h ang er, an d
are en er gised by u se of an ex te rnal PO S-GRIP
me ch ani sm. E xternal ac ti vati on r esult s in direct
c o nt ro l of con tac t stresses at t he s ealing su rface,
le adin g to exc ep tio nal reliab ili ty an d r epeatability.
Th i s s i mpl e and el egan t s eal i n g m echan ism has
been q u ali fied for X-HPHT servi ce u sing valid ation
c ri te ria wel l above and be yond s tand ard in dustry
s eal perfo rman ce verifi cat ion re q ui r ement s.
P OS - GR IP Tech nolo gy and HG s e al s have alread y
been appl ied to a w ide ran ge o f wellhead and
c o nn ec to r pr oduc ts, w here th e s i mp licity of t he
s ys tem result s
i n rob us t p ro du cts which are
s afer t o o perate, c heaper t o in s t all an d offer
u n prec edent ed int egr ity for th e l i fe of f ield .
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
P L E X U S
P O S - G R I P ® T E C H N O L O G Y
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7
S U R F A C E W E L L H E A D S
P O S - G R I P E X P L O R A T I O N
W E L L H E A D S Y S T E M S
Well integrity and safety i s criti cal wh en dr il l ing
exploratio n wells. Pl exus has p i onee red th e
use of a ‘thr ough the BOP ’ we ll head syste ms
for jack-up exp loration d rill ing . A we lcom e
benef it fro m this desi gn ph iloso phy i s tim e
and cost saving s. Our wel lhead syste m save s
a BOP li ft for every c asing str in g i nstal l ed
to conventi onal systems. Thi s
compar ed
P O S - G R I P H G
P R O D U C T I O N
W E L L H E A D S
for
equ ipment
l ong
i s
Integrity of
ter m
esse nt ial
pro ducti on well s, where many
hundreds of pressure and
temperature cycle s can b e
see n th roughout the l ife of a
fie ld. PO S-GRIP HG Produc tion
Wellheads are d esig ne d an d
ti me
saves o ne to four d ays
per w ell,
do wn
sig ni fic ant
ge ne rating
co st red uc tions, and
i n
many c ases can make th e
rental co st negati ve for
the cust omer. The systems
are available from existing
stock o n a rental b asis,
for
red uci ng
customers.
le ad times
tested to mee t worst case c ondi ti on s, an d
pr ovid e the safest p ossibl e sol uti on du ri ng
dr il li ng and pr oducti on.
As well as offer ing the hi ghest st andards in
safety and i nteg rity, HG Pr oduct i on Well heads
are desig ne d to be quic k and sim pl e to in stall .
The throug h the BOP design co mb ined wit h
ex tremely simpl e hang ers and ru nnin g tool s
can generate d ays of ti me-savi ng s per well.
The systems are availab le for sale and requi re
mini mal mai ntenanc e d uring fi el d li fe.
T E R S U S ™ M U D L I N E S Y S T E M S
The Plexus range of Tersus Mud lin e Su spen sion
Systems
is designed wi th pr oacti ve well
contr ol and safe ty in mi nd. Where ver p ossib le ,
all pr ocedures are carried out u nd e r ful l BOP
pro tect ion, which is sad ly not the c ase wi th
most o ther commercially avai lab le syste ms.
Mudline Systems are often thoug ht of as
being cheap and si mple, bu t si gnif i cant
value can be add ed thr oug h d esig n detai ls
whi ch enhanc e safety, c reate
savi ngs and redu ce risk. For
ex amp le, the Ple xus Tersus-
TRT combi ned TA Cap is safer
to use and q ui cke r to instal l
than mul ti c ap option s. The
Tersus PCT system has the
po tential fo r huge saving s by
all owi ng the r ec overy of HP/
HT ex plorati on wel ls, and
enabl i ng p re-d ril ling of H P/HT
de ve lop ment wells.
T E R S U S P C T H P / H T
T I E - B A C K
C O N N E C T O R
Our HP/HT up to 20, 000 p si
is an
Tie-B ack Connec tor,
innovati ve and uni que produ ct
sponsored b y Maersk. The
Tie-B ack Connector fe atur es
our metal-to-metal HG seals
and for the first time all ows
HP/HT expl orati on and p re-
dr il led pro duction wells to b e converted to
ei ther subsea or p latform p rod uc ing wells
del i ve ring sig nifican t saving s in terms o f
cap ital exp enditure an d the acce leration of
br ingi ng a well into prod uc ti on. At a time
when the i ndustry i s focusing str ongly on
cost and cape x savi ng op p ort un ities
the
bene fits of such an inn ovati ve p rodu ct are
cl ear, and w e are mar keting t hi s p rodu ct on
the basis that it is the only meth od avail abl e
of achi eving a re mote casing c onne ction with
the same in teg rity and capac it ie s as premi um
casing c oupli ngs.
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
due to the remote loc ati on of th e w ellh ead.
Pl exus has therefore combi ne d th e safety
and rel iab ili ty b en efi ts of POS-G RIP an d
HG seali ng into a well he ad syst em which is
rob ust and ful ly tested to meet the co ndit ions
ex pecte d i n de epwater and HP /HT we ll s.
As wel l as offer ing the hi gh est st andards
in safety and i nte grity, the Pyt hon su bsea
wel lhead is desi gned to b e sim p le wh ilst
del i ve ring i nstant c asing hange r lo ck down .
Many
are
el iminate d, resul ting i n e nha nced rel iability
and fewer tri ps. Time savings d uri ng d ril lin g
are up to four days in shall ow water, an d u p
to 12 days p er d ee pwater well , c omp ared t o
conventi onal systems.
c onventi onal
com p onent s
8
S U B S E A W E L L H E A D S
P Y T H O N S U B S E A W E L L H E A D
Wellhead equipment is criti cal for the safe
drilling and pr oduction of sub sea w el ls. Lo ng
ter m per fo rman ce and in teg ri ty are cr uc i al,
M 2 S S U B S E A W E L L H E A D S
M2S wellheads are des ig ne d t o b e jac k-up
deploye d and enab le the conve rsi on of pr e-
drilled well s us ing mud lin e e qui pm en t to
subsea pro duction. M2S syste ms u se POS-
GRIP and HG sealing to provid e many of th e
unique safety features and be nefi t s of Pl ex us’
othe r sur face and subsea POS-GRIP p ro ducts.
M2S benefits f rom the ad justab le n ature of
POS-GRIP to enable M udl ine Tie b ack Tool s
to be easily re- connected t o the mu dl in e
the stri ngs are preci sel y
hangers befor e
tensio ned and locked into p lac e i n the hi g h
press ure subsea well head housi ng . T hi s saves
time and r educe s the risk of p ro bl em s, to
maxi mise value for our users.
P O S - S E T
C O N N E C T O R
retai ns bend and load cap abi lit i es at 80%
of p ip e str eng th, for the safe st po ssi ble re-
establ ishment of we ll control .
The POS-SET Connec tor
is desig ne d to re-connect
to bare c onductor pi pe
for well
r e-entry or
permanent abandonment
operati ons.
It cr eates
a sol id c onnection with
re liabl e seali ng dir ectly
against the pip e, and
POS-SE T can acc ommodate l arg e variati on s i n
di ameter, wall thic kness and oval i ty wh ich can
be expe rienc ed with c onducto r p i pe , whil e
cr eating a dir ect seal ing and l oad -bearin g
int erface. Thi s w id e window of op eration
ti eback pr oblems are min im ised,
means
result ing in mo re cost-effec tive op e ration s.
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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A T P L E X U S W E A R E C O M M I T T E D
T O P R O V I D I N G O U R P E O P L E
W I T H
T H E
K N O W L E D G E
A N D R E S O U R C E S
T O M A K E
T H E W O R K P L A C E
A
S A F E
E N V I R O N M E N T , B O T H O N A N D
O F F S H O R E .
S A F E T Y I S A T T H E F O R E F R O N T
O F W H A T W E D O A S P A R T O F
O U R D A I L Y W O R K I N G L I F E ;
I T I S A S H A R E D C O M M I T M E N T
B A S E D O N T A K I N G P E R S O N A L
R E S P O N S I B I L I T Y
F O R
O U R
A C T I O N S T O M A K E A P O S I T I V E
I M P A C T O N O U R E N V I R O N M E N T
A N D O N A L L O F T H O S E A R O U N D
U S .
St ar S afety i s t he global um br ella und er
w hi ch w e co mmu ni cate and promote all of
ou r safety i nformat ion and initiat ives helping
to su ppo rt posi tive s afety b ehaviours and
S T A R
S A F E T Y
9
Case St udy
During FY 2015 we were delighted
to
achieve
the
accreditation
and approval by
the Offshore
Petroleum
Industry
Training
Organisation
(‘OPITO’)
for
our
competency management
sy stem
known
as
Competency@Plexus.
OPITO is glob ally recognised and
the
accred itation
is
continually
requested by our customers during
tender and contract reviews
ke ep sa fe ty at t he forefront of every thing
staff, policies, procedures an d the shar ing
w e d o.
of best practice and lessons learned. Recent
audits by Lloyds Register Quality Assurance
We create trans parency for safety issues, and
(‘LRQA’),
the world
leading
independent
a han ds- on appr oac h to safety leadership
provider of Business Assurance serv ices,
and behaviou rs. T hrou gh effective training,
demonstrate that we are operating to the
ro bust systems and processes , and a focus
recognised industry and national standards.
on con ti nual i mp rove ment, we all live our
safety cu lt ure.
Ou r QHS E sys te m is c ertified to BS EN I SO
9 00 1: 20 08 and B S OHSA S 18001:2007 and we
st ri ve for c ontin uous improvement throug h
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
“P lexus ’ long-term goal is to deve lo p
POS-GRIP techn ol ogy as a n ew in dus try
standard for wellhead design”
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
10
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B U S I N E S S
R E V I E W
Contents
C E O M E S S A G E
C H A I R M A N ’ S S T A T E M E N T
1 2
1 7
11
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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“A S A C O M PA N Y W E P R I D E O U R S E LV E S O N
O U R M A N AG E M E N T A N D E N G I N E E R I N G
E XC E L L E N C E . I W O U L D L I K E TO E X T E N D
T H E B OA R D ’ S G R AT I T U D E TO O U R
D E D I C AT E D W O R K F O R C E W H I C H I N C L U D E S
S O M E O F T H E M O S T TA L E N T E D O I L A N D
G A S E N G I N E E R S I N T H E I N D U S T RY TO DAY.”
12
C E O M E S S A G E
“I am de li gh ted to report
another
set
of
record
fi nan ci al resul ts i n ter ms of
revenues, margins,
and
prof it abil ity.
This
perform ance is all th e more
i mpr essi ve as it has been
ach i eved dur in g w hat has
been , and co nt in ue s to be a
di ff ic ul t tradin g cyc le for the
gl obal oi l and g as sec tor,
dri ven by th e sig nific ant fall
i n th e oi l pri ce an d re lated
geopo li ti cal ci rc ums tanc es.
Despi te
the
chal len ging
backd rop, th e year un der
revi ew
h as
been
a
tran sformat io nal
one
for
superior
nature
of
technology
and
our
the
technology
is
being
increasingly recognised by
important role it will p lay in
both
regulator s
and
the coming years, not only
operators.
H owever
in our traditional European
conventional technology has
market, but glob ally as we
known
limitations and we
look to continue to increase
maintain that for a variety
our international footprint.
of
technical
reasons
Following
this
strong
wellheads have been, and
performance, we are pleased
continue to be the weak link
to report a 182% increase in
in
the well architecture
the final dividend to 1.75p
chain which I b elieve needs
per share which includes a
addressing.
special dividend payment to
deliver an additional return
to shareholders supported
by our current strong cash
position.
“Specifically
there
is
a
massive
divide
between
qualif ication test standards
to which wellheads and their
casing hangers
(the
last
Pl exus
in
term s of new
“Our proprietary POS-GRIP
connection of
the casing
st rategi c
and
pro duct
wellhead systems meet the
pipe) and annular seals have
devel opme nt s. We c onti nue
critical
safety
and
historically been held by
to devel op the Com pany into
performance
demands
common
industry
test
a
l eadi ng
in te rn ati onal
required
of
wellhead
standards as compared to
w ell he ad
engi neering
technology
across
co mpany su ppl ying the best
pressure
spectrums.
all
As
those required for premium
casing
couplings,
i n cl ass an d safe st w ellh ead
exploration and production
(notwithstanding that both
equi pm ent
ac ross
of oil and gas continues to
products effectively do the
expl orati on, pr odu ctio n and
pursue ever deeper and
same job in a well). Further
su bsea arenas, utili sin g our
more complex
formations,
our design makes the casing
propr ie tar y pate nt ed POS-
particularly
for
HP/HT
hanger
a much
simpler
GRIP m etho d o f e ngi neering.
environments, the need for
object, which rather than
As
su ch w e
re mai n as
innovative,
safe
and
being made up of as many
co nfi den t as ever
in
the
effective
wellhead
as
twenty parts
is made
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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from
a
si ngle
piece,
standards set at levels to
as happens in the field. It is
si gni fi c ant ly
red uc in g
the
which they can comply, even
therefore disappointing that
nu m ber of ins tal l ati on steps
if not applicable
to
‘real
operators are planning to
required by
conventional
world’ conditions.
sys tem s. Therefore on the
rely on
these absolutely
critical
seal
systems
in
basi s
of
current
test
“I maintain that in the oil
subsea
applications
that
st andard l evel s, all su bsea
and
gas
industry
key
may in the future operate
ann ul ar s eal s currentl y used
standard
setters
have
under 20,000 to 30,000 psi
i n th e mar ket are a weak
managed to d o both where
gas
pressures.
The
l in k, and on e t hat in su bsea
wellheads
and wellhead
importance of meaningful
appl ic ati ons i s neve r truly
seals are concerned. Firstly
and
realistic
testing was
tes ted afte r ins tal lati on, and
they managed to convince
underlined recently by Sir
w hi ch fu rtherm ore has no
the
regulator
that casing
James Dyson who was
m eans of m onit or ing
for
hangers and their seals only
quoted as saying, “It seems
i nteg ri ty
and
remedial
need three temperature and
that
industry
is r ife with
i nterven ti on .
pressure cycles to be proven
manufacturers engineer ing
suitable for use forever and
to
f ind their way ar ound
“For t hese reas on s it is very
a
day.
Conversely,
as
pert in ent and to pical for us
operating conditions have
th at th e r ec ent Vol ks wagen
moved
onto
HP/HT
‘em i ss ion s ri ggi ng’ sc andal
conditions, casing coupling
has throw n a spotl ight on
(under pressure of
end
th e ve rac ity o f l aboratory
users), have now advanced
tes t
st andar ds.
This
to more
than 1,700
test
develo pin g s to ry s up ports
cycles.
Secondly,
casing
w hat I have be en s aying for
hangers and annular seals
a l ong t im e and dem on strates
are tested in f ixtures which
to m e
that wh en
test
have no connection to ‘real
st andards
an d
operating
world’
conditions. Rather
co ndi ti ons move
b eyond
than
testing
the
full
w hat
techn ology
can
assemblies as a system,
ach i eve, then m an ager s and
annular seals are allowed to
tests,
rather
than
engineering better, more
efficient
technology. This
behaviour
is
seriously
misleading customers”. This
statement is of course in
relation
to
a
consumer
product and
its
relative
performance, whereas in our
industry we
should
be
placing
safety
and
the
environment
first
and
foremost, which should lead
to the genuine desire to
only use the best and safest
en gin eers wi l l c on spi re to
be qualified as a single
available technology.
arti fi ci al ly
m eet
st andards
so
such
that
component,
in
specially
configured
fixtures, which
“The significant
time and
qual i fi cati on te st s c an be
eliminates movement and
cost savings that we can
pass ed
w ith
inferior
without
any
axial
and
deliver
are
of
course
so lu ti ons , or i ndeed industry
bending loads b eing ap plied
extremely
relevant
to a
th en lobbi es to have test
during pressure cycle testing
trading environment where
S T R A T E G I C M I L E S T O N E S
Contract Win - Cardon IV South America
Contract Win - Premier Oil Norge £1.0m
Collab oration Agreement Aquaterra
Shell Brunei £1.5m
Contract Win Maersk Oil £1.25m
Agreement with COSL, RST & Jereh
2015
2016
Framework Agreement - Jereh
Python Subsea Wellhead Launch
Licen ce Agreement Signed - Jereh
Contract Win Total £3.3m
New Product Win POS-SET
Connector - Centrica
PETRONAS Licen ce Secured
13
B
U
S
I
N
E
S
S
R
E
V
I
E
W
S
T
R
A
T
E
G
I
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
14
C E O M E S S A G E
operators are
l oo kin g
to
minds will soon find out how
dri ve dow n th e cost s o f new
to arbitrage the two. To this
proj ec ts by 20 -30 %. This
end
it
is positive
that
m eans that at the s urface
standard
setters
are
and
su bsea,
PO S-GRIP
beginning to recognise that
tec hn ol ogy s im ply sets a
new standards are required
st andard no other we llh ead
to address the new more
tec hn ol ogy
can m atch.
challeng ing
d rilling
E nco uragi ngly i t h as been
conditions
and
enhanced
repo rted th at fol low ing the
regulatory scrutiny, and we
Vol kswagen
in ci dent
believe that we are already
E urop ean regulat or s want to
in a position to meet these
bri ng i n real wo rl d tests by
in a way that conventional
2 01 8 t hat lo ok at em issions
wellhead designs cannot.
opportunities. In line with
this
and
following
establishment
of
the
our
Malaysian and Singaporean
hubs, we have substantially
built on our existing position
in the Asian region where we
have achieved a number of
significant
milestones
throughout 2014 and 2015.
“Post-period end
in
July
2015 we had a
flurr y of
activity starting with
the
signing of a pivotal licencing
agreement with Yantai Jer eh
Oilfield Services G roup Co.,
Ltd
(‘Jereh’),
a
leading
Chinese oil services provider
to facilitate the rental, sale,
and manufacture of our
wellhead equipment into the
important Chinese, wider
Asian, Brazilian, Indian and
Middle Eastern oil and gas
markets. I see this latest
agreement as an important
build ing
block
for
the
transition of Plexus
from
being a niche supplier of
specialist rental exploration
wellhead equipment into the
main stream volume market,
allowing us to engineer and
manufacture our best
in
class high standards whilst
capitalising on b eing able to
reduce
operator ’s
costs.
Alongside
this
fir st major
licencing agreement a share
from cars on
the
road,
rath er than in l aborato ries,
and I bel ieve t hat the oil
and gas i ndu st ry regu lators
sh ou ld be takin g a si milar
st ance
i n
relati on
to
w ell he ad s eal test st andards
and m etho dol ogy. Perhaps
th e regul ators ar e
fin ally
begi n ni ng to re alis e, as a
j ourn al ist rece nt ly reported,
th at
arti fic ial
o ut comes
oft en s tar t i n laboratories,
and th e gap bet ween a w ell-
desi gn ed
test and
r eality
nee d not be hu ge, b ut b right
“In tandem with positioning
subscription agreement was
Plexus as the supplier of
also
entered
into,
and
choice
in
the
standard
another entity in the Jereh
pressure
and
HP/HT
Group subscribed
in July
exploration
markets
in
post period end for 5 % of
Europe, we have also been
the issued share capital of
highly active during the past
Plexus for a consideration of
year in beginning to more
£8.04m.
actively market our products
into new operating regions
in line with our strategy to
significantly
increase
the
global reach of our wellhead
equipment,
significant
offering
g rowth
“This was closely followed
by a collaboration agreement
with China O ilfield Serv ices
Limited
(‘COSL’) a major
integrated oilfield
serv ice
solution provider which is
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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m ajo rity ow ned by Chi nese
partnership
enters
the
placed
to
continue
to
st ate
ow ne d
com pany
second decade this year, let
increase our global reach.
CN OOC Group, Red Sea
us seize
the opportunity,
Tec hno lo gi es Ltd, a l eading
and work together to usher
oi l fi eld des ign an d se rvices
in an even brighter future
co mpany i n S outh E ast Asia,
for China-UK relationship”.
and Jereh. Th is wi l l s ee all
For such reasons I am very
parti es expl ore com mercial
excited
about
our
new
oppo rtu ni ti es
for
shallow
relationship
with
Jereh
water subsea an d crossover
which only commenced in
w ell h ead produ ctio n systems
July, and I am confident
fo r o il and gas fi el d ac tivities
that
Jereh’s
considerab le
i n Ch i na.
manufacturing
and
commercial skills will blend
“I am especially proud to
report on the launch of our
new Python subsea wellhead
at SPE Offshore Europe
Conference &
Exhibition
2015 (‘OE2015’), Europe’s
biggest oil and gas trade
show. This was the result of
over four years of r esear ch
and development supported
by
our
Joint
I ndustr y
“Th e i mpo rt ance of China
well with our technology to
Partners, BG, eni, Royal
and Ch i nese trad ing partners
create considerable value
Dutch Shell, Maersk , Total,
has o f co urse been brought
for both companies over the
Wintershall,
Tullow
Oil,
i nto sh arp foc us du ring the
coming years.
rec ent
fi ve day vi sit
in
Senergy, and Oil States
Industries
Inc. The new
Sep tem ber
to C hi na b y
“A third Asian develop ment
Python Subsea Wellhead has
Geo rge
Os borne
who
at the end of July 2015, was
been designed to address
dec lare d that t he UK should
the announcement that we
key
technical
issues and
not be running away from
had secured in August 2014
requirements highlighted by
“The yea r u nder
revi ew has been a
tran sformat io nal o ne
for Plex us in terms
of new strategic an d
produc t develo pmen ts.”
regulators
following
the
GOM incident in April 2010
and to achieve a new best in
class standard for subsea
wellheads.
Entering
the
global subsea market has
always been part of our
strategy
to
expand
the
Company ’s suite of POS-
GRIP wellhead equipment
into
larger
fast growing
markets. Subsea exploration
and production has grown
rapidly since 200 0 in ter ms
Ch i na, t hat Bri tain sh ou ld be
a local Petronas licence to
of total expenditure
from
“Ch i na’s best partner i n the
supply
our
POS-GRIP
USD$7billion
to
We st ”, an d that we should
equipment
in
Malaysia
approximately USD$45billion
“cr eate a gol de n dec ade for
through PPA. As a result of
in 2014. According
to a
bot h of ou r countrie s”. I
these three major strategic
report by Rystad Energy in
ce rtai nl y
ec ho
t hose
moves,
and
on-going
May 2014 this str ong growth
sen ti m en ts and t his m onth’s
relationship
building
is expected
to continue,
m il es ton e s tat e v isit b y the
initiatives in other areas of
with
subsea
expenditure
Ch i nes e Presi den t Mr Xi
regional importance such as
forecast
to grow by an
Ji npi ng
fur th er unde rlined
the Gulf of Mexico (‘GOM’)
annual
rate of 15%
to
th e
s cal e
of
these
and Russia, (where in the
USD$115 billion by 2020,
oppo rtun iti es
when
the
coming years, and of course
making it a highly attractive
Pres iden t sai d “As an old
subject
to sanctions
the
market,
and
one
that
Ch i nes e
adag e
goes,
Arctic will become
very
demands new
technology
oppo rtun ity m ay kno ck just
important requiring the very
and engineering solutions.
on ce; grab i t before i t slip s
best and most convenient
We
anticipate
that
our
away ”, and that as “China-
wellhead sealing technology)
ground-breaking technology,
UK co mprehen sive s trategic
I believe that we are ideally
as it moves from prototype
15
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U
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
to produ ct w il l be r eady for
Connector
for
the
updating
our
valued
16
offs hor e depl oym ent
in a
decommissioning
market,
shareholders on our latest
tri al w el l du rin g the s ec ond
are clearly exponential and
organic
and
strategic
hal f of 2 016 an d we look
we believe
that we will
developments
throughout
fo rward
to updat ing
the
continue
to attract new
the
rest
of
2015
and
m arket fu rther.
customers worldwide either
beyond.”
directly or through licensees
“Fi nal ly as a Com pany we
as the wider industry places
B E N V A N B I L D E R B E E K
pri de
our selve s
on
our
increasing emphasis on the
m anagem en t
and
develop ment
of
HP/HT
engi n eeri ng exc el lence .
I
reserves. I look forward to
C H I E F E X E C U T I V E
27 October 2015
w oul d
like to exte nd the
B oard’s grati tu de
to our
dedi cat ed w or kforce w hich
i nc lu des s ome o f t he most
tal ent ed
o il
an d
gas
engi n eers
i n
the
i ndu stry
to day. Wi thout our te am we
w oul d no t be ab le to win
m il es ton e con tract s wh ere
on ly the best equipm ent will
su ff ic e such as w ith
the
rec ent ly anno unc ed £3.3m
co ntrac t wi th Total fo r the
So lar is wel l offshore N orway
fo r w h ic h our
tec h no logy
was s peci fic ally ch os en , and
w hi ch i s thou ght wil l be the
hi gh est pressu re w ell ever
dri l led in the North Sea at
up to 1 7,00 0 to 19,0 00 psi.
Th e futu re opp ortu ni ties for
Pl exus,
i n both our c ore
m arkets and wi th anc illary
new POS -GRIP developments
su ch
as
ou r
PO S-SET
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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17
17
C H A I R M A N ’ S S T A T E M E N T
B U S I N E S S P R O G R E S S
financial year and I am also
the securing of a Petronas
I am pl eased to rep ort that
delighted to say that this
licence to enable the supply
period and post period end
of equipment in Malaysia;
desp it e chal l en ging trad ing
were the most active since
entering into a collaboration
co ndi ti ons
the
Group
we were admitted to the
with Aquater ra
for
the
del i vere d an excel lent set of
London AIM market, and
supply of HP/HT marine
res ul ts whi l st mak ing strong
have laid firm found ations
risers; and impor tantly the
progress
in
terms
of
for our
future expansion
official launch of our new
ope rat io nal ,
financial, and
both geographically and in
Python subsea wellhead at
st rategi c
developments.
terms
of
new
p roduct
OE2015
last month
in
Th is perform anc e resulted in
development. It is clear to
Aberdeen.
a 5 .6% i ncrease in revenue
me tha t industry interest in
to £ 2 8.53 m fo r the year to
our proprietary POS-GRIP
O V E R V I E W
3 0
Ju ne
2 015
(2014:
friction-grip method
of
£ 27.0 2 m) wi th th e UK and
engineering is increasing in
European
revenues
tangible ways beyond our
i ncr easin g by 4 9 .2%; a 5.7%
traditional organic
jack-up
i ncr ease
in
EBITDA
to
exploration rental wellhead
£ 9.5 3m (2 01 4: £9.02m); a
business. Examples of such
1 0.5 %
i nc re ase
in profit
exciting initiatives which I
before tax to £ 5.94m (2014:
w i l l e x p a n d o n i n c l u d e B G
£ 5.3 8m );
and
a
18.8%
joining our Python subsea
i ncr ease in profit after tax
wellhead JIP; first contract
to £5 .43 m (2 014: £4.57m)
for
our
new
PO S-SET
he lpe d by a lo wer effective
Connector
prod uct
to
tax rate, del iveri ng a 17.5%
facilitate
decommissioning
i ncr ease i n bas ic earnings
and aband onment; securing
per s hare o f 6.4 0p (2014:
of a major licensee in China
5 .44 p). Such key financial
(Jereh); a collaboration with
perform anc e in dicators are
COSL for the development
of cou rse onl y part of the
and supply of a shallow
pro gress made during the
subsea wellhead for China;
T he 2015 financial year
has seen Plexus achieve a
number
of
signif icant
milestones, not
least,
in
terms
of
establishing
strategic partnerships and
investing time and resources
into
research
develop ment
for
and
new
product
innovation, which
we believe will help us
further cement our position
as the best in class supplier
of wellhead equipment to
the oil and gas industry, not
just for jack-up exploration
but also in due course for
surface
production
and
B
B
U
S
I
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E
S
S
S
S
R
R
E
E
V
V
I
I
E
W
S
S
SS
S
SSSS
S
S
S
S
S
T
T
T
T
T
T
T
T
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T
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
18
C H A I R M A N ’ S
S T A T E M E N T
“ I N A D D I T I O N TO S E T T I N G O U R
S I G H T S O N A S I A N , R U S S I A N A N D
C I S E X PA N S I O N I N T H E N E A R -
T E R M , W E A R E A L S O LO O K I N G
TO T H E A M E R I C A N A N D G O M
M A R K E T S A S PA R T O F O U R
demonstrates our confidence
in the superior natur e of our
POS-GRIP technology and its
ability
to become a new
global standard.
In terms of rental sales and
revenues for the financial
year, we have b een focussed
on expanding beyond our
traditional UK North Sea
market,
winning
more
contracts
in Europe and
pursuing
new
business
opportunities
in
Afr ica,
Australia, North America and
Asia.
Our
sales
mix
illustrates
the
continued
importance of both the UKCS
LO N G E R -T E R M S T R AT E GY F O R
and
the
European
G R O W T H AC R O S S E X P LO R AT I O N ,
P R O D U C T I O N A N D S U B S E A”.
Continental Shelf (‘ECS’) in
the North Sea where sales to
offshore
Norway,
the
Netherlands and Denmark
were particularly strong and
subsea.
This
progress
market.
Our
surface
increased by 53.1%, 89.3%
ho wever
can no t
b e
exploration
offshore
and
1, 217%
respectively
co ns idered i n is ol ation, and
wellhead
customer
base
compared to the same period
i t is im portant to no te that
continues
to grow,
and
in the prior year. We believe
th e
variou s m acro
and
includes many of the world ’s
that the tax structures for
geopo li ti cal neg ati ves that
largest global oil and gas
example
in
Norway
w e i den ti fi ed t hi s tim e last
companies
to which we
encourage
exploration
ye ar p er sist , not only
in
added new customers Total
drilling
as
a
result
of
term s of th e muc h reduced
and Cardon IV (a 50:50 JV
allowances available where
oi l pri ce but al so i n term s of
between Repsol and eni)
‘dry ’ wells are concerned.
redu ced
operators
capex
during the year. Of these oil
With Brent Crude trading at
spen d and c ons ume r dem and
and gas companies we have
circa USD$50 per barrel ,
l evel s.
serviced over 400 wells
following publication of the
globally
offering
our
Wood Review, we hope that
Si nc e o ur adm i ss ion to AIM
customers standard pressure
the
latest
tax
incentive
at t he en d of 200 5, Pl exus
wellheads
and
HP/HT
changes
in
the UKCS, as
has gro wn
in
t er ms of
wellheads, and we estimate
announced
in
the
UK
revenu es and profitabi lity
that we hold a c. 10% market
Government ’s 2015 Budget
th rough
our
POS- GRIP
share of the c.USD$400m
which
outlined measur es
su rface expl oratio n j ack-up
global
jack-up exploration
worth £1.3bn over five year s
w ell he ad
rental
bus in ess
market, as compared to the
aimed at boosting flagging
m odel . Thi s grow th has b een
vast majority of the markets
North Sea oil production by
su pporte d by n ec essary on-
in
the North Sea which
15% by
the end of
the
goi n g
investme nt
in R&D,
underlines
the
significant
decade, will have a similar
pers onn el, ren tal w ell head
growth opportunity within
positive impact which Plexus
i nven tory, and i nfras tructure
this arena. Our recognition
will benefit
from. HP/HT
bot h
i n
the
U K
and
of
the
imp ortance
of
equipment
r evenues
i nc reasi ngl y
w orldwid e
investment, and in particular
continued
to account
for
w here we are
looki ng to
R&D, and the willingness to
over 85% of all sales and, as
grow
sal es
b eyo nd
our
commit
to
it
clearly
such field conditions are the
tradi ti on al
North
Sea
most technically challenging,
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dem on strates t he tec hnical
Plexus and Jereh, a world-
activities which, from 2012
advantages offer ed by our
class supplier of oil and gas
to 2018, has been estimated
pro priet ary
POS -GRIP
field equipment and services
to amount to USD$146bn.
fri ct io n- gri p method
of
with a market cap of c.
Indeed not so
long ago
en gin eeri ng a nd we llhead
USD$4bn, operating in more
Infield
indicated
that
equ ipm ent des ign .
than 60 countries, share the
operations
in
Asia
are
19
As well as the significant
contract wins for our POS-
GRIP
surface
exploration
jack-up over the period, the
two other areas where we
have
invested
significant
time and resources over the
past year is our continued
expansion into Asia, and on-
going
product
innovation
which saw us enter a new
ambition of delivering oil
increasingly
moving
and gas drilling equipment
exploration and production
and services, which are best
into deeper waters in a bid
in class in terms of safety,
to
boost
oil
and
gas
performance and reliability.
production, and that as a
By
incorporating
our
result Malaysia, Indonesia,
patented
POS-GRIP
India,
and
China
are
technology,
the
licencing
becoming major
subsea
agreement will push
the
industry hotspots attracting
boundaries
in
terms
of
a range of operators from
wellhead performance and
national oil companies such
safety standards to facilitate
as CNOOC and ONGC,
to
lucrative market
post period end
following
launch
of
the
our
uniquely
superior
Python
Subsea
Wellhead
which
addresses
a
number of issues
identified following
the Gulf of Mexico
incident
in 2010.
Our
expansion
Asian
has
been demonstrated
over
three
“ Secured our first
contract for our
ne w POS-SET
Connector product
to facilitate
decommissioning
and abandonment”
international
oil
companies such as
Shell and Chevron.
As such whilst we
will
continue
to
expand our global
presence we believe
this
licence
agreement can over
time
generate
substantial revenues
from the partnership
with
Jereh, who
have an exceptional
track
record
as
licensees for major
significant
news
events
the
rental,
sale,
and
partners around the world.
which have been explained
manufacture
of
Plexus’
by
our
CEO
Ben
Van
wellhead equipment into the
In
line with our Asian
Bilderbeek
in
his
CEO
major Chinese, wider Asian,
expa nsion we wer e also
commentary. Most notably
Brazilian, Indian and Middle
delighted
to
report
the
was
the post period end
Eastern oil and gas markets.
formation of a new Malaysian
signing of our first licencing
This
relationship will be
company PPA in conjunction
agreement with a major
focused not just on rental
with a local Malaysian oil
Chinese oil and gas
field
wellhead
exploration
and gas partner, IPS. PPA
services company Jereh in
activities, but also on surface
was formed to create a fully
July 2015. Licencing has
production
and
shallow
operational
Plexus Asian
been
central
to
Plexus’
water
subsea,
and
business hub with the aim of
growth strategy as a way to
connectors.
In
terms of
supplying
POS-G RIP
penetrate the global market
positive market
growth
wellhead
equipment
and
whist maintaining our best in
opportunities, according to
services to the Australian,
class
service,
brand
Infield, the energy analysts,
Brunei,
I ndonesian,
reputation and indeed strong
China and wider Asia is in
Malaysian,
Thai,
and
patent protection where we
the process of implementing
Singaporean oil and gas
have a growing patent suite
the largest regional offshore
exploration and production
in place to protect our POS-
capital
expenditure
markets. This was signed in
GRIP
technology.
friction-grip
programme for oil and gas
August 2014 and as further
progress have since been
B
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E
G
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R
E
P
O
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T
C
O
R
P
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R
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T
E
G
O
V
E
R
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I
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20
C H A I R M A N ’ S S T A T E M E N T
“ The o rganic jack-
u p ren ta l business is
n ow b e ing focused
on Asi a, Russia
and potentially
No rth America”
grant ed a
l ocal Pet ro nas
2015. The Python
launch
l ic enc e post period end to
wa s attended by Fergus
m anu factur e
and
su pply
Ewing, the Scottish Minister
Pl exu s’ POS- GRIP w ell head
for Business, Energy and
equ ipm ent. The secu ri ng of
Tourism where he stated,
su ch a
li ce nc e has been
“this new
technology will
vi ewe d as a maj or m ile st one
allow oil and gas companies
fo r our c ompany and we
around the world to increase
bel i eve thi s w il l pos iti on us
the safety and reliability of
w ell
to sec ure ad di tional
their operations and it is a
bus in ess an d c on tract wins
great testament to the skills
i n thi s re gion.
and knowledge of Ben Van
Bilderbeek and his team ”.
In
additi on
to
our
The Python Subsea launch
i ntern ati onal
expansion
had been
supported by
pl ans a defi ni ng m ome nt of
Plexus’
joint
industry
Pl exu s’ year was t he lau nch
partners which include BG,
of
the
Python
Subsea
eni, Maersk, Royal Dutch
Well h ead durin g E urope’s
Shell, Total, Wintershall,
bi ggest Oi l an d Gas trade
Senergy and Tullow O il.
sh ow, OE2 01 5, in S eptember
Interestingly
it was
the
industry that came to Plexus
post
the 2010 Macondo
disaster to ask us to help
design a safer, new best in
class standard for subsea
wellheads. The
patented
POS-GRIP
fr iction-grip
method
of
engineer ing
offers ‘instant casing hanger
lockdown’ and is used to
secure hangers with HG
Seals which provide direct,
metal-to-metal,
weld-
quality,
high
integr ity
sealing. Many components
used
in
competing
conventional
subsea
wellhead designs such as
lock rings and wear bushings
are eliminated, resulting in
enhanced
reliability
and
fewer
installation trips to
the sea bed by seven to ten
trips on a complex well
which will
likely
save
operators using the Py thon
Subsea wellhead between
USD$2-10m per wellhead.
Python’s
formal
launch
marked the first commercial
availability of our POS-GRIP
enabled
subsea wellhead
system,
and
Plexus
is
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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Ca s e Stu d y
M O V I N G I N T O
S U B S E A
In Septe mber 2015 , w e
l aun ched o ur si mpl e
and
tech nol ogic ally
su peri or
POS-GR IP
Pyth on
We ll he ad.
Subsea
Th e
paten ted
tec hnol ogy
was
en gineered
to
ach i eve be st in c lass
and safest standar d
fo r su bsea well heads
w it h
th at
featu res
al so
reduc e
co sts
and
d eliver
operati onal effi cien cy
fo r o perato rs.
The
paten ted
tec hnol ogy
was
in devel opm en t
fo r four year s pr ior to
i ts l aun ch, in respons e
to the G ulf of Mexic o
i nc iden t that oc curred
i n 2 011 and deve loped
as a
j oi nt
i nd us try
proj ec t
supp ort ed
by
i nte rn ati on al o il
m ajo rs incl udi ng BG,
eni , Maersk, Oi l S tates
Indu stri es ,
Royal
Dut ch Shel l, S en er gy,
TOTA L,
Tul lo w Oil
and Wi ntershall an d
Pl exus
an ti ci pates
th at Pyth on w il l b e
ready
for
offshore
depl oym en t in a tr ial
w ell dur ing the se cond
hal f o f cal endar year
2 01 6.
confid ent that Python will be
and commercially attractive
ready for offshore prototype
markets.
deployment in a trial well
during 2016, where the next
steps will be
finding an
operator to secure this first
deployment.
In
tandem with
securing
strategic
partnerships
for
future
international growth
and
new
product
development, the continuing
Further to the launch of our
communication of our unique
Python Subsea Wellhead and
offering
is
equally
as
expa nsion
into new target
important to Plexus’ future
markets, we have also been
success.
The
Board,
working on the extension of
management
team
and
POS-GRIP friction technology
dedicated engineers
invest
and other new product areas.
significant
time
into
These products
include: a
communicating and educatin g
low cost wellhead system for
the wider oil and gas industry.
the
volume
production
Such
activities
included
market - WellTree™ which we
attending and presenting at
are currently working on with
the ‘World Oil HP/HT Drilling
Jereh; this is in addition to
and Completions Conference’
products such as the HP/HT
in Houston, Texas, and
in
Tie-Back connector where we
London at the ‘Oil and Gas iQ
previously
signed a
joint
“HP/HT Wells Summit 2014
industry p roject with Maersk,
and
2015’,
as well
as
which for the first time allows
important events such as the
the
reconnection
of
St Petersburg
International
production casing to HP/HT
Economic Forum in June, and
exploration and production
the
Beijing
China
wells which
is now being
International Offshore Oil &
marketed; the new POS-SET
Gas Exhibition in March.
Connector which is designed
to enable operators to re-
STAFF
establish a connection onto
rough conductor casing for
the abandonment market,
O n behalf of the B oard, I
would like to thank all our
where
the market
for
employees
for
their
permanent
plugging
and
dedication and hard wor k
abandonment of wells
is
during
another
successful
increasing in the North Sea
year. This has not only
and beyond and could be an
delivered another
set of
important
new
revenue
record financial results, but
stream for the Comp any; and
has importantly taken us into
the recent agreement with
the subsea market with the
Aquaterra to jointly supp ly
launch of our new Python
HP/HT dual barrier marine
subsea wellhead at OE2015
risers utilising Plexus’ PO S-
in September 2015, and will
GRIP technolog y to provid e a
in the near future accelerate
safer,
technically
superior
our goal of also becoming a
and cost efficient solution for
major supplier to the surface
the use on jack-up rigs. All of
production wellhead market.
these product
innovations
Such efforts by all our staff
are
in
line with Plexus’
contributed
to
Plexus
strategy to extend our POS-
achieving
a
significant
GRIP product reach into new
milestone with
the award,
post period end, of
the
21
B
U
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I
N
E
S
S
R
E
V
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E
W
S
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R
A
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G
I
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22
C H A I R M A N ’ S
S T A T E M E N T
gl obal l y r ec ogni sed OPITO
interacting with US oil and
challenging
given
the
approval for o ur Comp etency
gas operators and service
significant reduction in the
Managem en t Sys tem (‘C MS’)
companies, industry bodies,
oil price and related on-
kno wn
as
Com pet en c y@
and regulators, particularly
going economic pressures
Pl exus. Thi s is a qu alifi cation
in relation to the subsea
which surround the oil and
th at our cust ome rs request
arena.
dur in g
the
te nde r
and
co ntrac t
revi ew
proc ess,
OUTLOOK
espe ci all y in re spo nse to the
fi ndi ngs from the Deepwater
Hori zon
in ci den t
in 20 10.
I remain confident about
the
major
growth
gas ind ustry and the support
services underpinning
it,
and this cannot be ignored.
This is especially the case in
the UK North Sea which
traditionally has been an
Furt herm or e
i n September
opportunities available
to
important market
for us,
2 01 4 I was del ig ht ed to see
Plexus and our on-going
and as recently as September
th at ou r team ’s effo rts led
ability
to market
our
2015 Oil
and Gas UK
to
Pl exus winnin g
the
proprietary POS-GRIP based
reported
that “exploration
“Co m mi tme nt t o In novative
wellhead equip ment as a
for new resources has fallen
Us e
of
Res ear ch
and
new and superior standard
to its lowest level since the
Development ” award at the
for the industry. We are in
1970s” and
that
capital
No rther n
Star
Bu siness
no doubt
that we
can
expenditure will pr obably
Awards 2014. Such work
ultimately
penetrate
all
decline by £2bn
to £4bn
un derpi ns
t he
on -going
wellhead markets
from
annually to 2017. Looking
devel opme nt an d app li cation
surface
to
sub sea, both
forwards, the UK North Sea
of our pro pri et ary fric ti on-
organically
and
in
should not be written off
gri p m ethod of e ng ineeri ng.
conjunction with partners
just yet. Last year ’s Wood
I w oul d also l i ke to wel come
and
licensees around
the
Review of the North Sea
as a n on-execu tive di re ctor
world. Notwithstanding our
estimated that there were
Ch arl es Jones who
j oi ned
year on year growth and
still between 12bn and 24bn
th e B oard
i n Se pte mber
indeed
record
FY
2015
barrels of oil that could still
2 01 4
and who w ill be
financial results, FY 2016
be pumped in UK territorial
advi si ng Plexus in re spe ct of
trading conditions are more
wa ters compared to 45bn
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barrel s of c rude extract ed to
S U P P LY G A P : M I L L I O N S B A R R E L O I L E Q U I V A L E N T A D A Y
date – l ogi c dic tat es there is
Source: EIA estimates, April 2015
m uc h dri l li ng ac tivity
to
co me.
More enco uraging ly in recent
w eeks
th er e has b een a
m ore pos it ive s en time nt with
regards to oil price forecasts
from a number of sources
i ncl u di ng
UBS
Wealth
Managem ent an d B arc lays.
On ly t hi s m onth a B arclays
anal ys t repor t argu ed that
w it h pric es at the ir c urrent
hi st ori c l ow l eve ls, energy
co mpan i es w ill
not
be
su ffi c ien tl y enc ou rag ed
to
co nti n ue t o pr odu ce oil , and
w it h “capex expected t o fall
2 0% global ly in 2 01 5 and a
fu rth er 5 -1 0% in 2016, the
st age is se t for a supply
cr unc h”, meani ng that after
“so me excess st oc ks are
us ed u p i n 20 1 6 an d 2017,
110
105
100
95
90
85
80
75
70
65
60
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Required Incremental Production
Current Sources of Production
Speaking to sharehold ers in
strategies would certainly
The Hague Mr van Beurd en
be favourable in ter ms of
said we “will need sustained
the
growth
outlook
for
and
substantial
(oil)
Plexus, and indeed the wider
investment
to
support
oil and gas sector as a whole
economic growth” and that
as
exploration
drilling
the world could
face a
activity would
inevitably
catastrophic 70m barrel per
increase.
w e
beli eve
the
price
day shortfall in crude by
apprec iati on seen thereafter
2040. According
to
the
i s l ikel y to be pe rm an ent ”.
International Energy Agency
Su ch s en ti m ent
i s
further
who
said glob al energ y
en dorsed by
th e
in dustry
demand will
increase by
i t s e l f, w i t h S h e ll C E O B e n
40% through to 2040, and
van
B eu rde n
dec laring
an influential Exxon rep ort
“ A berd een ope ratio n al
hea dquarte rs d o ubl ed
with the acqu is itio n
in Sep 201 4 of a circa
36,00 0 s q .ft wo rk s ho p
and o ff ice fa ci li t y”
rec entl y that the w orl d faces
further estimates that world
an
en er gy
c ris is
u nless
population will
increase
i nvest m en t
in
fossil
fuels
by
30%
from 2010
to
pro duct io n
i s mai nt ained
2040, with global GDP rising
bec ause of
th e dramatic
by
circa
140%.
The
i ncr ease i n dem and t hat will
achievement of hig her oil
come
from
3bn
people
prices,
alongside
our
emerging from poverty over
international growth
and
th e
next
fe w
dec ades.
new product development
Our vision is to become a
leading international oil and
gas wellhead and related
equipment
engineer ing
company, supplying the best
in class and safest POS-
GRIP wellhead equipment
for exploration, production
and
subsea
applications
around
the world.
In a
global market d ominated by
a few large multi-national
oil service and wellhead
supply companies, Plexus
reputation is growing, and
the awareness of our ability
to meet the demand for and
provide critical
innovative
solutions
required
from
wellhead
technology,
particularly
for
H P/HT
applica tions is evidenced by
a
number
of
important
collaborations
that
we
entered into over the last
twelve months. As extracting
hard-to-reach oil and gas
goes d eeper and becomes
more complex,
innovative,
23
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24
C H A I R M A N ’ S S T A T E M E N T
safe and effect ive w ellh ead
Arctic
opportunity
is
given the high profile import
tec hn ol ogy
is ever more
enormous, and
this was
replacement
programme
i mpo rtant ,
and
i ndeed
clear to see from a recent
that is currently underway
ess enti al , par ti cu larl y
for
report for the Secretary of
in Russia, and wher e last
l ocat io ns suc h as th e Arctic
Energy in Washington by the
November Vladimir M arkov,
w here s afety i s param ount,
US
National
Petroleum
the head of gas giant
and w here w ell heads cannot
Council in March 2015 titled
Gazprom was quoted as
afford to be th e w eak link in
“Arctic Potential – Realizing
saying that within the next
th e sys te m.
the Promise of U.S. Arctic
two to three years “we can
Wi th t hi s vi si on i n m in d, the
expan si on o f
the organic
ja ck-u p rental b us in es s is
no w being fo cused on Asia,
Oil and Gas Resources”
substitute up to 90% of all
which
highlig hted
two
imports,
considering
the
important statistics. Firstly
government
has
begun
that most of
the Arctic
develop ing production of its
offshore
oil
and
gas
own complex equ ipment ”.
Ru ss ia and poten ti all y North
potential
lies
in water
Am eri c a, i ncl udin g fostering
depths of
less
than 100
In addition to setting our
l ic ens in g agree ments with
metres, and that the Russian
sights on Asian, Russian and
th e li ke s of J ereh . Whilst
Arctic
shelf
is
even
CIS expansion in the near-
ou r r ental sale s show ed an
shallower. Secondly,
that
term, we are also looking to
i ncr ease du ri ng
t he
last
when analysing the g lob al
the North American and
fi nan ci al ye ar in t er ms of
arctic conventional oil and
GOM markets as part of our
E uro pean an d Asian sales,
gas resource potential by
longer-term
strategy
for
ou r next areas of geographic
country in terms of “billion
growth across exploration,
fo cu s w i ll be Rus sia and the
barrels of oil
equivalent ”,
production and subsea. This
CI S
co untri es w he re
I
Russia
towers above
the
longer-term strategy will be
bel i eve
si gnifi cant
other major players.
In
boosted
by
our
active
oppo rtu ni ti es
exis t
Pl exu s’
e qui pme nt
for
and
terms of ranked estimated
billions of barrels Russia
presence in Houston where
we have appointed a new
tec hn ol ogy, particu larl y
in
wa s estimated at a massive
USA non-executive director
the
Arctic
where
the
287, USA 94, Greenland 39,
to the Board, Char les Jones,
sel ec ti on o f n ew, enabling
Cana da 34, and Norway 25.
who has over 30 years of
and safer tech nolog y w ill be
I believe the opp ortunity is
senior management
and
param oun t. The sc ale of the
additionally
comp elling
board experience in the US
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en ergy sec tor, and h ave also
these
new
prod uct
challenges for the industry I
rec entl y
en gaged
the
develop ments and marketing
am confident of Plexus’ long
ser vic es o f Mr Law rence
initiatives which include the
term future prospects and
Ru ci ns ki , w ho previ ously
launch of
the new and
our
ability
to
deliver
he ld the po si ti on o f D irector,
superior
Python
subsea
significant
shareholder
Sal es a nd Marketing fo r the
wellhead;
our
surface
value
from our patented
Gl obal S ubsea bu si ne ss of
production
wellhead
POS-GRIP
technology.
I
FMC Tech nol ogie s Inc., and
WellTree; HP/HT Tie-Back
would
like
to extend my
w il l acti vel y promo te our
JIP connector; and the new
gratitude to my fellow Board
tec hn ol ogy
to
A me rican
POS-SET
Connector.
To
members,
Plexus
ope rat ors . B oth Ch arles and
support
such
future
management
team, office
Law renc e w i ll be ad vising
initiatives,
and
as
an
support and our excellent
and ass isti ng
t he Plexus
indication of our confidence
engineers, without whom,
team i n r el ati on to potential
in the future we doubled the
our significant progress to
US c om merc ial and li cencing
size
of
our
Aberdeen
date would not be possible.
partn ers.
operational
headq uarters
with
the
acquisition
in
As wel l as expandi ng Pl exus
September 2014 of a circa
through
new
regional
36,000 sq.ft work shop and
J J E F F R E Y T H R A L L
oppo rtu ni ti es, as alread y
facility from Baker Hughes
N O N - E X E C U T I V E
st ated
n ew
pro duct
for £2.4m.
i nnovati on i s jus t as central
to our gro wth st rategy. We
therefore
look forward to
updat i ng s harehol der s on
For the reasons outlined in
my
statement,
despite
widely
reported on-going
C H A I R M A N
27 October 2015
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
“At the surface and subsea, POS-GRIP
technology simply sets a standard no other
wellhead technology can match.”
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
Contents
P R I N C I P A L A C T I V I T Y
F I N A N C I A L R E S U L T S
O P E R A T I O N S R E V I E W
S T R A T E G Y A N D
F U T U R E D E V E L O P M E N T S
K E Y P E R F O R M A N C E
I N D I C A T O R S
2 8
2 8
3 5
3 9
4 3
26
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S T R A T E G I C
R E P O R T
27
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28
S T R A T E G I C R E P O R T
“ POS-GRIP technolog y is b ein g
increasingly recognise d by
the industry, and the va rio us
initiatives and agreements that
we entered into during th e year
clearly supp ort our view tha t th e
POS-GRIP friction-gr ip method
of engineering technolo gy ha s
many more ap plication s beyond
ou r tradi tional organic ja ck-
u p e xploration activities, in
par tic ular subsea.”
P R I N C I P A L A C T I V I T Y
Th e Group markets a patented met hod of
en gin eeri ng for oi l and gas field wellh eads
and c onnec tors , n am ed PO S-GRIP, which
i nvol ve s deform ing one
tub ular memb er
agai nst an other wit hi n the elast ic rang e to
effect gri ppin g and sealing. This su perior
m etho d of engi neering for wellheads offers a
Plexus is now actively pursuin g or ganically
and with
international partners such as
Jereh, China. The Directors b elieve that
the Company ’s proprietary tech nology has
additional wide ranging app lications both
within and outside the oil and gas industr y.
F I N A N C I A L R E S U L T S
nu m ber of i mpo rt ant advantag es to op erators,
parti c ul arly for H P/ HT applications an d can
R e v e n u e
i ncl u de
i mpr oved
tec h nical p erformance,
i mproved in te gri ty of m et al seals , s ig nif icant
i nst all ati on tim e s avi ng s, reduced operat ing
co sts
an d
en hanc ed
safety. Revenues
predomi nantly derive from the rental of
POS- GRIP w ell he ads for j ack-up exp loration,
al tho ugh th e rang e of co mmercial and safety
ben efi ts of POS -GRI P also app ly to surface
pro duct io n and s ubs ea wellheads wh ich are
si gni fi c ant ly bi gger market sectors wh ich
Revenue for the year was £28. 53m, up 5.6%
from £27.02m in the previous year. The
growth in sales was supp orted by a number
of on-going and new contra ct wins both
from existing and new customers around
the world. Geographically, a particularly
strong year on year p erformance was seen in
Europe excluding the UK which grew 1 10%
as compared to the UK North Sea which grew
by 7% and accounted for 37. 2% of total
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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1 5 k s i H P / H T W E L L H E A D I N S T A L L A T I O N
sal es , an i nc rease of 7.1% on th e prior year.
It is rel evan t to note that the UK North Sea
has e xperi enc ed a sl ow down in activ ity, and
as hi gh ligh ted l ast year in the Wood Rev iew
C E O B E N V A N B I L D E R B E E K
th ere i s a need for add itional incen tives to
en cou rage th e pu rs ui t of remaining oil an d
gas re serves wh ic h last year the Office of
B udget Res pon si bili ty estimated as up to
growth
in HP/HT revenue resulted from
2 4bn barr el s re mai ni ng eq uat ing t o 30-40
contracts for a numb er of exis ting and new
ye ars of product ion.
customers including Statoil, Maersk, G DF
Suez, and ConocoPhillips. Standard pressur e
Th e rent al of expl oration wellh ead and
equipment sales
increased b y 13.3% to
rel ated equi pme nt and
services ag ain
£1.94m from £1.71m in the p rior year, and
acc ou nted fo r ap proxi mately 95% of reven ue
accounted for 6.8% of total sales. Sales
refl ec tin g the fac t that t he Comp any ’s org anic
relating to services provided to support
bus in ess mode l is foc used on the supply of
existing production wellhead installations
ja ck-u p rental su rface exploration wellhead
totalled £0.10m compared to £0.35m last
equ ipm ent and s ervic es . Lookin g to t he future
year. This year revenues of £0.02m were
th e Co mpany ’s ado pte d strategy is to b road en
generated by engineering and
testing
i ts w el lhead eq ui pme nt p rodu ct rang e to
compared to £0.37m last year with the
begi n to addre ss th e surface p roduction,
balance of revenues made up of £1.24 m for
su bsea,
and
dec ommissioning m arket s
rebillable expenses comp ared to £1.29m last
bot h i n the North S ea and internationally.
year for items such as freig ht, shipping and
Pl exu s’ w ell head d esig ns are already proven
equipment hire. D espite the widely r epor ted
fo r prod uc ti on we lls, a signif icantly larger
cyclical downturn driven by the major fall in
m arket th an j ack-u p rental exploration . The
oil and gas prices, we continued to invest
gl obal jac k-up dri llin g market is relatively
for the future and increased our capital
sm al l at c .USD$400 m, whereas the global
expenditure on rental assets t o £2.53m as
w ell h ead m arket is es timated at USD$4.5bn .
compared to £2.32m in the prior year, a year
Im port antly we lau nc hed last month ou r
on year increase of 9.1%.
ne w Pyt ho n subs ea wellhead following an
exten si ve an d succ essful tes t programme
M a r g i n
and w here we ant ic ipate having a prototyp e
i n the fi eld som e ti me i n calend ar year 2016.
HP/HT r en tal equ ipm en t and related service
co nti n ued to ac count for th e majority of
sal es re venues, risin g to £25.23m up f rom
£ 23 .30 m l ast ye ar, an increase of 8. 3%,
and ac coun ted for 8 8.4% of total sales,
co mpare d to 8 6. 2% i n the prior year. The
Gross margins have slightly reduced at
69.9% (compared to 71.1% in the prev ious
year) as a result of lower margin mudline
equipment sales and contract mix. The
majority of rental activity sales continued to
be HP/HT which deliver higher mar gins than
lower pressure equipment contracts.
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
30
O v e r h e a d e x p e n s e s
In l i ne w it h t he in cr eas ed level of sales activity an d th e in curr in g of in cr eased overhead
ass oci ated w ith th e buil d out of an in tern ational g rowth s trat egy, p art icu lar ly in relation to
As ia wh ere year on year revenues increased 22.4%, total overh eads in crease d to £14.9 3m
fro m £ 13.9 3m in th e p rev ious year. T he ad d itional overhead relates t o ad dit ion al infrastructure
and personne l to sup port the organic b us iness and the ad dit ion al act ivities sur rounding
and su pporti ng ne w p roduct develop ment and inves tment . Incre ased overh ead spe nd was
abl e to be co n troll ed rel ative to sales and accoun ted for 52 .3% of reven ues compared to
5 1.5 % for the p rior year. Overhead s taff cos ts red uced t o £ 7.53m from £8. 17m partly due
to re lat ed R&D allo cat ion and reduced b onus levels, wh ils t t he emp loye e he adcount at the
ye ar-en d was 1 5 7 com pared to 144 for t he prior year, an in crease of 9. 0%. Other items
w hi ch i ncreased year o n year as a res ult of t he increas ed act ivity levels, st aff increases, and
expan si on of i nfrastruct ure were con tract staff, train in g, h ealth and s afety, overseas base
co sts , advertis ing and m arketing , professional fees , and travel and s ubs is ten ce.
E B I T D A
E BITDA for t he year (before IFRS 2 s hare b ased paymen t charg es of £0 .02m ) was £9.53m,
co mpar ed to £9.0 2m (before IFRS 2 share b ased p ay ment ch arg es of £0.0 3m) the prev ious
ye ar, an i nc rease of 5.7% . EBITD A marg in for the year was con sist ent at 33. 4% as com pared to
3 3.4 % l ast year. T he E BITDA performance is the result of maint ained operat ion al e fficiencies,
co upl ed wi th the hi ghe r marg in s as sociated with HP/HT ren tal act iv ity where t he proprietar y
nat ure of the Plexu s POS-GRIP fr ict ion -g rip tech nology enab le s Plexus t o delive r superior
perform anc e in terms of enhanced s afety, time saving s, a nd op erat ion al efficien cie s. EBITDA
i s cal cu lated as follo ws :
Operati ng profi t
Add back :
– Depr ec iat io n
– A mo rti satio n
– Lo ss on di spos al
– S hare based paym en ts charges
– S hare of pro fit of ass ociate
– G ain on dispos al o f as sociate
– Rou ndi ng
E BIT DA
2 0 1 5
£ ’ 0 0 0
5,020
3,070
811
20
21
236
352
1
2 0 1 4
£ ’ 0 0 0
5,279
2,748
657
95
26
215
–
(1)
9,531
9,019
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T E S T B A Y F A C I L I T I E S
P r o f i t b e f o r e t a x
Profi t befo re t ax increased to a record
£ 5.9 4m com pared to a profit last year of
£ 5.3 8m , an i ncrease of 10.5%. This increase
has been ac hie ved after absorb ing higher
deprec iat ion and am ortisation ch arg es of
£ 3.8 8m , up from £ 3.4 0m last year, the larg est
O F F S H O R E O P E R A T I O N S
co mpo nent bei ng depreciation of
ren tal
in
respect of prior year ’s
tax charge.
ass ets w hi ch i n cr eas ed by 2. 2%, ref lect in g
Excluding this amount would have increased
th e co nti nu ed i nve st ment in P lexu s’ wellh ead
the effective tax rate to 15% (2014:11%
ren tal inve ntory. Sh are of profit of associate
measured after amending for adjustments in
co ntr ibu te d £ 0.24m an d the d isp osal of the
respect of prior year ’s tax charge).
ass oci ate prov ided a gain of £0.35m while
fi nan ce in com e in c ludes a gain of £0.51m
It
is currently anticipated
t hat
for
the
rel ati ng to the derec og nition of a financial
foreseeable future, the Group will continue
l iabi l i ty. The pr ofit before tax is s tated af ter
to report an effective tax rate that is lower
an IFRS 2 char ge fo r share bas ed p ay ments
than the prevailing UK corporat ion tax rate.
un der repo rtin g s tan dard IFRS 2; the ch arg e
This lower effective rate will depend upon
fo r t he fu ll year is £0. 02m compared to
the continuing eligibility to claim enhanced
£ 0.0 3m last year.
T a x
The Group shows an income tax expense of
£0.51m for the year as compared to £0.80m
for the prior year. The Group has an effective
tax rate for the year of 9% (2014: 15%)
which is below UK corporation tax rates.
The effective rate of tax was lower due to
a reduced tax charge arising as a result of
SME enhanced R&D tax credits, which arise
from the Group’s significant R&D programme.
Following
the preparation of
the prior
year ’s financial statements Plexus engaged
external consultants to assess the level of
the R&D claim that could be made for the
2014 financial year. This resulted in a higher
level of claim being made than anticipated.
As a result a credit of £393k is recognised in
these financial statements as an adjustment
R&D tax credits as part of the on-going
R&D programme and the expected potential
reductions in tax rates arising from the
Patent Box tax regime.
The prior year tax charge has been restated
by £475k relating to a tax credit ar ising
on
the exercise of share options. This
credit was originally
recognised
in
the
Consolidated Statement of Comprehensive
Income whereas, in accordance with IAS
12
Income Taxes,
the am ount
should
have more approp riately been recognised
directly in Equity. Full details relating to the
restatement are disclosed in note 2 to the
financial statements.
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32
E P S
Th e Group r eports bas ic earning s p er share
of 6.4 0p c ompared to 5.4 4p in t he p rior year,
an i nc rease of 17.5%.
C a s h a n d S t a t e m e n t o f
F i n a n c i a l P o s i t i o n
Th e st atement o f financ ial p osition ref lects
th e i nvestme nt in operation s du ring t he
ye ar and
i n par tic u lar on-going capital
expen ditu re . The n et boo k valu e of p rop erty,
pl ant and equ ipm en t in cluding it ems in t he
co urs e of co nstruct ion increased to £17.15m
co mpare d to £1 3.28m
last year. Cap ital
expen ditu re o n t angib le ass ets increased
to £ 7.02 m c om pare d to £3.02m las t year
i ncl u di ng the acquis iti on of a 36,000 sq. ft
w ork s ho p an d o ffic e facility in Aberdeen
i n S eptem ber 201 4 for £2.40m. Th e net
boo k val ue of i ntangi ble assets, including
IP ri ghts and R&D, increased by 26. 1% to
£ 13 .17 m c om pared to £10.44m las t year.
Capi tal expen diture o n intangib les totalled
£ 3.5 4m c ompar ed t o £ 2.40m last year, an
i ncr ease o f 4 7.5 %, of which imp ort antly
6 8.3 % rel ated to addi tions in respect of th e
Pyth on subsea w ell head JIP. Receivables
i ncr eased t o £ 7. 30 m co mpared t o £6. 46m
l ast ye ar. Net bo rrowi ngs closed at £2.95m
(bank l oan s o f £6 .28m l ess cash and cash
equ ival en ts o f £3. 33m ) comp ared to net
cas h at bank of £2 .35m last year (cash an d
cas h equi val ent s of £ 6.3 5m less ban k loan s
of £ 4.00m ) r efl ectin g net cash outf low for
th e year of £ 5.30m (net decrease in cas h of
£ 3.0 2m per S tateme nt of Cash F lows p lus n et
i ncr ease i n bank bo rrowings of £2.28m). This
cl os in g cash pos iti on was after ab sorbing a
ne ar do ubli ng o f total c apital ex pen diture of
£ 10 .56 m (2 0 14: £ 5.4 2m) of which £3.02m
rel ated to the addi ti onal work shop and
offi ce
faci l ity, and disposing
in June a
2 5% s harehol di ng i nterest in a p rivate UK
oil and gas equipment manufactur ing and
engineering company b ased
in Sc otland
for £1.5m cash. The Group ’s cash position
changed materially p ost per iod end with
the subscription by Jereh for new or dinary
shares
representing 5% of
the
issued
share capital of Plexus for circa £ 8m net
of expenses as part of the ter ms of the
Licencing
Agreement
transaction
also
entered into post period end with Jere h.
Post period end, the Group’s bank facilities
have been renewed with Bank of Scotland
Corporate and comp rise £6m working capital
lending facilities, and a £1.5m five year te rm
loan which was entered into during the last
financial year to p art fund the acquisition
of the additional Aberdeen facilities and
which currently stands at £1.275m. These
facilities combined with cash balances ar e
anticipated to be adequate to meet on-going
capital expend iture, R&D and related pr oject
commitments.
I n t e l l e c t u a l P r o p e r t y ( ‘ I P ’ )
The Group carries in its statemen t of financial
position goodwill and
intang ible assets
of £13.93m, an increase of 24.4% from
£11.20m last year, reflecting the Group’s
on-going investment in and commitment to
the development of its propriet ary POS-GRI P
technology, the most important elements
of which continued to be in relation to
the POS-GRIP
friction-grip method of
engineering and the new Python subsea
wellhead d evelopment JIP. The Directors
have considered whether there have be en
any indications of impairment of its IP and
have concluded , following a d etailed asset
impairment review, that there h ave been no
such indications. The Directors ther efore
consider the current carrying values to be
appropriate. Indications of impair ment ar e
considered annually.
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P O S - G R I P W E L L H E A D O N R I G
R e s e a r c h a n d D e v e l o p m e n t
R&D expendi tu re con ti nues to b e an important
and n ecessar y
i nves tment
in protecting ,
develo pin g, and b road ening the rang e of
appl ic ati ons for our p roprietary PO S-GRIP
fri ct io n- gri p metho d of eng ineering and
rel ated IP. A s Steph en Boyle th e RBS Ch ief
E con omi st re cently sai d when ad dr essin g t he
oi l an d gas i ndu st ry i n Ab erdeen, “Dou bling
dow n on i nnovat ion and produ ctivity are
bec om ing o f greater
importance
than
ever before”, and we certainly subs cribe
to
th at sentim e nt . Indeed Plex us ’ R&D
rel ated acti vity p rio r to and during t he
ye ar cu lm i nat ed in the achievement of a
nu m ber o f mi le st on es and con tract s which
w oul d not have be en possib le without such
i nvest m en t an d re lated prod uct d eveloping
and te sti ng. Of part icular note in relation t o
ou r o rgani c bus iness a new cus tomer Total
awarded a £3.3 m co nt ract for the supply
of j ack-up dri l lin g we llhead equipmen t for
a Ul tra HP/HT (17,000 – 19, 000p si) gas
expl oratio n wel l i n the North Sea, offshore
No rway w here Pl exus was iden tified as the
m ost su it able su ppli er due to the un ique
abi li ty to o ffer a th ro ugh the BOP cap ability
w hi le s upporti ng cas ing at th e ocean floor
on it s pro pri et ary mu dline han ger system.
As we ll as ne w and s uperior app licat ion s
rel ated to ou r organi c jack-up exp loration
dri l li n g busi nes s, we also gained traction
w it h a num be r o f ne w R&D driven p roduct
develo pm en ts . On e of these is our POS-SET
Co nn ecto r w hic h is d es igned to re-establish
a con nec ti on onto rou gh conductor casin g
previ ou sl y cut above th e seabed to facilitate
T E S T B A Y A B E R D E E N
tie-back
or
aband onment
operations.
Further p roof of the unique advantages and
capabilities of our friction-grip technology is
the fact that full scale testing has show n
that our connector can achieve 80% of the
bending and tensile strength of the parent
pipe, which
is significantly better
than
conventional connector options can achieve.
This could be a significant opportunity for
Plexus, and Oil and Gas UK have stated that
well plugging and abandonment expenditure
could total £4. 5bn from 2013 t o 2022 . This
product
follows on
from our previously
announced HP/HT Tie-Back connector which
for the first time allows the reconnection
of production casing to pre-dr illed HP/H T
exploration and production wells to the same
standards as casing couplings . Full pr oduct
develop ment and qualification testing has
been completed , and as this pr oduc t can
deliver significant time and cost savings to an
operator interest continues to be shown by
the industry. A second product extension is a
post p eriod end collaboration with Aquater ra
to jointly supply HP/HT dual barr ie r mar ine
risers utilising Plexus’ POS-GRI P technology
to provide a safer, technically supe rior and
cost efficient solution for us e on jack-up
rigs, initially in the North Sea market. What
is important here in terms of the uniquely
33
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34
en abli ng c apabili tie s of POS-GRIP is that
I F R S 2 ( S h a r e B a s e d P a y m e n t s )
IFRS 2 charg es have been in clu ded in the
accounts, in line with rep orting standards.
The fair value of share based payments has
been computed indep endently b y spec ialist
consultants and is amortised evenly over the
expected vesting period from the date of
grant. The cha rge for the year was £0.02m
which compares to £0.03m las t year.
D i v i d e n d s
The Company announced on 24 Marc h 2015
the payment of an increased interim dividend
of 0.51p per share which was approved for
payment on 22 April 2015.
In further recognition of the Group’s on-
going progress and confid ence in the future
the Directors have decid ed to propose a
182.3% increase in the final div idend of
1.75p per share for the year end ing 30 June
2015 compared to 0.62p last year, making
a total dividend for the financial year of
2.26p. The final dividend has b een enhanc ed
this year
in recognition of the G roup’s
strong balance sheet and cash p osition, and
will be recommended for formal approval
at the Annual General Meeting to be held
on 10 Decemb er 2015. Subject to this the
dividend will be paid on 16 December 2015
to all members appearing on the register of
members on the record date 6 November
2015. The ex-dividend date for the shares is
5 November 2015.
w hi ls t mari ne ris ers exist for low pressure
appl ic ati ons, as wel l as cer tain besp oke
he avy wall hi gher pre ss ure risers, the ‘Du al
B arri er High Press ur e Riser ’ will b e t he f irst
i n th e in dustry fo r HP/HT wells . The maj ority
of o ur R&D expe ndi tu re has b een r elat ed
to the im portant subs ea market and pos t
peri od end w e anno un c ed a collab oration
agreem ent wi th CN OOC and RST to ex plore
co mm erci al opportun ities for shallow water
su bsea an d c ro ssover wellhead p rod uction
sys tem s for oi l and gas activities in China
w hi ch fi ts w ell w i th our st rateg ic focus
on A si an opportu ni ties. Finally our most
si gni fi c ant R&D dri ven p roject, the new
Pyth on subsea w ellh ead
JI P, not on ly
gai ned BG as an addit ional and valuable
JIP m em ber, but t he c ompleted desig n was
offi ci al l y
l aun ch ed at OE2015, Europ e’s
bi ggest o il and gas sh ow last month. Py thon
has been desi gn ed to a new b est in class and
safest standard for subs ea wellheads, and is
en gin eered to be s im ple, whils t offer in g a
range of u ni que and su perior techn olog ically
advance d features, i nc luding ‘instant casing
han ger l ock dow n’, an d secures hangers with
HG seal s w hi ch provi de direct, metal-to-
m etal , wel d- qu ali ty, high integ rity s ealing.
Un i quel y, m any com plex comp onents used
i n co mpeti ng c onvent ional sub sea wellh ead
desi gn s such as lo ck rin gs, lock down s leeves
and wear bus hi ngs ar e elim in ated, which
res ul ts
in great er
re liability an d
fewer
i nst all ati on tri ps. R&D spend increased by
2 8.9 %, inc ludi ng the c o st of build ing new
tes t fi xtu res, t o £4. 12 m from £3.19m in
th e prio r year, an d will continue d urin g the
2 01 5/ 1 6 fi nan cial year as the Pyt hon s ub sea
JIP ne ars co m pletion and th e POS-GRIP
pro duct expands in to the surfa ce production
and c onne ctors m arket s ectors.
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T E S T P R O C E D U R E
O P E R A T I O N S R E V I E W
Th e m ain operation al developmen ts during
th e year were of both an org anic an d
T E S T B A Y F A C I L I T I E S
an i nt ernati onal st rategic natu re. As the
repu tat ion of o ur proprietary PO S-GRIP
fri ct io n- gri p me th od of engineering con tinu es
to gr ow an d as ou r tar get market exp and s f rom
ou r tradi ti onal jac k- up exploration sector to
su rfac e produc ti on an d subsea exp loration
and rel ated new pro duct developments, it is
i mpo rtant that our operational cap abilities
acr oss al l dis ci pl ines, wheth er b uildin gs ,
pl ant, and equ ipm en t or personnel are able
•
November 2014 – £0. 9m Det Nor ske,
Norway orders HP/HT equipment for
an oil and gas ap praisal well offshor e
Norway and is the seventh Det Norske
well to use Plexus equipme nt since
2012
to su pport s uch develop ments. O ur ability to
•
January 2015 – £1.6m contract with
co nti n ue to inves t in operations during the
Shell Brunei und er an existing four year
ye ar was dri ven b y our core j ack-up drilling
contract which runs to 2016 for three
bus in ess and co nt rac ts awarded b y existin g
additional exploration wells
and new cus to m ers th e most s ign if ican t of
w hi ch w ere as fo llo ws:
•
April 2015 – USD$0.8m new customer
contract Cardon IV in new ter ritor y
•
Ju ly 20 14 – £0 .6m additional well ord er
Venezuela awarded for the supply of
si gne d w ith Centrica to supply s urface
equipment
for a development well
w ell h ead
and mudline
equipment
offshore Venezuela
ser vic es
for So uthern North Sea
expl oratio n
•
May 2015 – £1.0m Premier Oil Nor ge
order HP/HT wellhead equipment for
•
August 2014 – £1.0m order
from
an exploration well in the N orwegian
Det Nor ske for the supp ly of HP/HT
Central North Sea
equ ipm ent fo r an oil and g as app rais al
w ell o ffs ho re Nor way with a value of
£ 1.0 m
•
May 2015 – £1.25m third well equipment
order from Maersk Oil under a contract
signed in 2014 for an offshor e well in
•
Oc tober 2 0 14 – si gnificant ord er sig ned
the Danish sector of the Nor th Sea
w it h B G Gr oup to supply HP/HT s ur face
w ell h ead
and mudline
equipment
services
for
a
standard pressure
expl oratio n wel l in the UKCS
•
June 2015 – £3.3m ultra H P/HT
wellhead equipment order
rece ived
from new customer Total for potentially
the highest pressure well ever drilled
•
Novem ber 2 01 4 – £1.9m HP/HT wellhead
in the North Sea estimated at 17,000 –
equ ipm ent order fo r an exploration well
19,000psi, offshore Norway
i n th e UKC S fr om a major oil an d gas
ope rat or
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To date our core org anic jack-up exp loration
into the Malaysian market and we hope over
bus in ess ,
an d
ass ociated
on-g oin g
time will act as a springboard to becoming
i nvest m en t
i n w ellh ead
rent al
inventor y
a major supplier of wellhead equipment in
to geth er w ith th e i nfrastructure, s ys tems,
the region. To support these plans Plexus is
and processes ne ede d to su pport it have
slowly building the number of employees in
co nti n ued to generate the majority of ou r
the region, and will also be sending more
revenu es. Howe ver as t h e North Sea b egan
personnel to China from Aberdeen to support
to experi ence a sig nificant and widely
the training and knowledge transfer process
repo rted sl ow dow n, i t was ess ential that
with Jereh at its headquarters in Yantai. It
w e i ncr eas ed o ur effo rts to ext end our
is anticipated that the Singapore business
i ntern ati onal pre se nc e. As such , we secur ed
unit will in the future establish its ability to
a m aj or l ic ensi ng ag ree ment with our new
refurbish and inspect wellhead equipment for
m ajo r tradi ng part ne r J ereh for China and
servicing the local market, which simplifies
ot her i m portan t terr itori es p ost per iod end.
logistics from Aberdeen and reduces costs,
In ternat io nal growth continued with wells
whilst being able to offer customers a more
w on i n Br unei w ith S hell Br unei, an d our
responsive service.
fi rst ventur es i nto C h ina with Shell Chin a,
and in to Ve nezu ela wit h Card on IV (a 50:50
In anticipation of future growth, not only
Jo in t Vent ure be tw een Repsol, S. A. and eni
internationally but also in Europe we doubled
S.p.A ). The o peratio nal base in Sing ap ore
the size of our operational head quarters in
su pport ed we lls in South Eas t Asia an d
Dyce, Aberdeen through the purchase of
i nvest m en t i n p ersonn el and inf ras tructure
a circa 36,000 sq.ft work shop and off ice
pos it io ns Sin gapor e as a hu b to supp ort
facility for £2.4m. The new facility is situated
ant ic ipat ed growth in the region. Sup ply
immediately adjacent to the ex is ting 36,500
ch ai n rati on ali sation and emphasis on for ging
sq.ft site in Ab erdeen, and was previously
partn ersh ips w ith o ur su ppliers has res ulted
occupied by leading oil services company
i n reduc ti on of overal l risk and cos ts in the
Baker Hughes. This major increase in Plexus’
cr it ic al areas of our sup ply chain.
operational capacity is necessary not only for
supporting our rental wellhead b usiness, but
Further emphasis was placed on Asia with the
also to ensure that we are able to support
formation of a new Malaysian company PPA
and respond to greater anticipated activity
in conjunction with a local Malaysian oil and
associated with our
recently
launc hed
gas partner, IPS. The establishment of PPA is
Python subsea wellhead , and other new
a key milestone in Plexus’ strategy to create
product developments such as the POS-SET
a fully operational Asian business presence
Connector. At a time when cost control and
to increase the supply of our pioneering POS-
indeed cost savings are param ount w ithin
GRIP wellhead equipment and services to the
the industry, the additional space will also
important Australian, Brunei, Indonesian,
enable Plexus to consolidate its wor k facilitie s
Malaysian, Thai, and Singaporean oil and gas
in Aberdeen, thereb y significan tly impr oving
exploration and production markets. At the
our logistical efficiencies especially due to
time of the establishment of PPA the key task
the close proximity of our existing building.
was the necessity to obtain a local Petronas
licence, and importantly post period end
As
reviewed
in
the R&D
section of
in July PPA was awarded the licence. The
our Strategic Report, as a proprietar y
licence enables PPA to manufacture and
technology led b usiness investment, time
supply Plexus’ POS-GRIP wellhead technology
and effort continually go into engineering
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i mproveme nts
and
new
invent ion s.
Dur in g t he ye ar a n umb er of s uch product
develo pm en t
i nit iati ves cam e
to
f ruit ion
and have now eit he r arrived at a p oint
P O S - G R I P I N V E N T O R Y
w here act ive promoti on to the wid er global
m arket plac e can b egin , for example, our HP/
HT Ti e-B ack pr odu c t ori ginally s pon sored by
Maersk as w el l as ou r POS-SET Conn ector
Staff and staff develop ment is essential for
to fac il i tate aband on ment which has already
our current and future success. During the
been ordered by Ce ntrica; or will be able
year there was further focus on re cr uitment
to be mar kete d in the near futur e such
with year end
total employee numbers
as ou r ne w Pyth on s ubsea wellhead . Su ch
increasing from 144 to 157. As we expand
develo pm en ts h ave to be prop erly s up p orted ,
our business internationally and suppor t
and ou r abi li ty t o respond to t echnical
the development of our op era tional base in
en qui ri es and t he phys ical deploy ment and
Singapore, we have recruited a number of
i nst all ati on of eq uipm ent is key, and we
local personnel each of which have enjoyed
therefore ensure that appropriate training,
a significant induction and train ing period in
m etho ds, pro cedu res and systems are in
the UK to supp ort an effective transition of
pl ace, and con ti nu ally reviewed t o meet our
established working practices in the region.
cu sto m er expectatio ns and requirements.
Particular emphasis was placed on our sales
An i n teresti ng de velopment that we have
and marketing capabilities and a new sales
rec entl y seen du rin g the current cycle of
strategy based around more forwar d looking
l ow o il pri ces an d focus on cos t saving s,
market data for forthcoming projects was
and w hi ch i s rele vant t o the uniq ue natu re
implemented post period end. This initiative
of ou r tech nol ogy and product d esigns, is
is already showing positive signs of enabling
on e w here operators’ eng ineers are looking
us to engage with customers at an early
m ore c losel y at te chn ology that can offer
stage of their well planning and equipment
a range o f tec hnic al benefits fr om featur es
specification
and
selection
pr ocess.
su ch as mo ni to rin g, tog ether with simp licity
Legislative changes have featured heav ily
and avoi dance of ‘ in the field prob lem s’
during this period and in par ticular, we
cau sed by convent ion al wellhead equip ment
met our pension auto enrolment targets as
th at c an arise for example from t he u se of
stipulated by government. The role of field
l ock ri ngs and lock do wn sleeves. The more
service technicians within Plexus is one of the
co mpl i cated n atu re of conventional wellhead
most pivotal roles within the organisation,
equ ipm ent des igns can lead to sign if ican t
being integral to the safe operation of our
co st penal ti es whether direct or in direct
equipment and the d irect inter face with
th rou gh delaye d or l os t production. We hope
our customers. The focus on training and
th is wi l l prove pos iti ve for Plex us in the
competence within this group remains a
l ong- term .
key targ et for the business, bolster ed by
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a new assessm ent centre led recru it ment
staff numbers and
infrastructure. The
pro cess w hic h su ccess fully saw five new
IT
infrastructure has underg one major
fi el d serv ice tech nici ans being recr uited . In
networking and telecommunicatio n upgrades
rec ogni ti on of t he im portance that we place
to support the continued growth of Plexus
on su ch in iti atives at a time wh en safety
internationally. These up grades are required
i s so key for th e i ndu stry, we were also
to ensure delivery of flexible an d integrated
del i ghte d to ac hieve a m ajor milestone with
business information systems. T he bespoke
the accreditation and approval by Offshore
nature of our in-house softwa re d evelopment
Pet rol eum I ndus try Training Organisat ion
allows the IT department to q uick ly r eact to
(‘OPITO’ ) for our comp etency management
the ever changing demands of the busine ss.
sys tem (‘CMS’ ) kn ow n as Competen cy@
It provides
important
information
for
Pl exu s. OPITO is g lob all y recog nised and the
decision making, p roviding managers access
acc redi tati on i s c on ti nu ally requ ested d ur in g
to accurate business data
for planning
ten der and c ontract revi ews b y cu stomer s.
and analysis. The recent upd ates to our
sales system have given better v isibility
Heal th and Safety
i s a key op erational
of worldwide sales op portunities to both
di sci pl i ne an d Pl exus re mains fu lly com mitted
the sales team and senior management.
to del i verin g t he hi ghest safety stand ard s.
Plexus is committed to ensuring a safe
We co nti nue t o manage our safety risks
and secure electronic environment and as
th rou gh assessm en t,
implementation of
a wide range of cyber risks are an ever
co ntr ol s, c onti nual m onitoring, an d hiring
evolving and on-going risk for all companies
and devel opi ng staff to m eet the competen cy
the IT department is working towar ds ISO
l evel s requi red. We enco urage our p erson nel
27001:2013 accreditation which will help
to get i nvol ved, have c onfidence to intervene
ensure
that both
internal and exter nal
and t o c hal lenge any un safe act or condition
risks a re minimised. Certification provides
and
t o en sure
transparent rep orting of
customers and key stakeholders with the
i nci den ts that meets our desired s afety
confidence that security ris ks are taken
cu l ture . Recen t au dits by Lloyd s Regis ter
and addressed seriously. The cer tification
Qu ali ty Assu ran ce
(‘ LRQ A’),
th e world
process is rigorous and is exp ected to be
l eadi ng i ndependen t pr ovid er of Bus iness
completed in financial quarter 4 2016 .
As su ran ce servic es d em onstra te that we are
ope rat in g to the re cognised ind ustry and
Finally, Plexus has to d ate, chosen not to
nat io nal st andar ds, with our ISO 90001 and
own its own manufacturing capacity but
B S OHSA 1 800 1 c er ti ficat ion maintained. We
it had previously acquired a 25% inter est
rec ogni se that th e health and well-b ein g
in a private UK engineering company
of our e mpl oye es i s a crucial feature of
which manufactures
specia list oil and
ou r HSE and HR st rat egy, and bu ild ing on
gas equipment. As Plexus becomes mor e
ou r achi eveme nt o f our Bronze and Silver
international, and with stronger relationships
Healthy Working Lives Awards presented
developing with partners such as Jereh in
i n 2 01 3, we recei ved during the year our
China and IPS in Malaysia it was decided
Heal thy Worki ng Live s G old Award .
that higher cost base UK manu factur ing was
non-core and this interest wa s disposed of
IT s ervi ces and supp ort are of course
in June 2015.
ess enti al
for any m odern b us iness and
i nvest m en t in IT has continued in b oth
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E X P A N D I N G I N T O G L O B A L M A R K E T S
S T R A T E G Y A N D
F U T U R E D E V E L O P M E N T S
T e c h n o l o g y
Pl exu s’ un iqu e an d patented POS-GRIP
fri ct io n- gri p tec hn ol ogy has wid e rang ing
appl ic ati ons both wi thin and outside of
th e oi l and gas ind us tr y. It is imp ortant to
rem em ber t hat POS -GRIP is a method of
en gin eeri ng an d no t a produ ct in its own
ri ght , and wh er e t he re is an op por tunity for
th e tec hnol ogy to imp rove upon conventional
pro duct s, we lo ok to i ntegrate POS-GRIP into
th e produ ct so th at t he benefits together
w it h HG seal ing can be realised. In simp le
term s POS-G RIP tech nology is b ased on a
ve ry s i mpl e c onc ept . A comp ressive force
i s appl i ed on the out si de of a wellhead or
pi pe, to fl ex it in wards. As th e bore of the
ve ssel m oves in war ds, it makes contact with
an i nn er pi pe (or han ger) on t he in sid e.
Su ff ic ie nt c ontact force is generated to fix
th e in ner m ember (hanger) in place through
fri ct io n betw ee n the two componen ts . The
Co m pany ’s strategy is primarily focused on
del i veri ng th e hi ghest standard of wellhead
desi gn fo r the u pstream oil and gas markets ,
w hi ch i s al ready proven to b e u niq uely
advantageou s i n term s of sa fety featu res,
ope rat io nal effic ienc y, and cost saving s for
ja ck-u p dril l in g HP/HT applications where
Pl exu s has the majo rity market s hare in the
No rth Sea.
POS-GRIP wellhead designs deliver many
advantages over conventional “slip and seal”
and “mandrel hanger ” wellhead technologies
for
surface exploration and production
activities, and in due course for subsea
operation with our new Python subsea
wellhead. These
include
larger metal-to-
metal seal areas, virtual elimination of
movement between parts, fewer components,
simplified design and assembly, enhanced
corrosion resistance, simpler manufacture,
long term integrity, annulus management,
and reduced installation cost. In particular
our subsea wellhead eliminates the need
for wearbushings, pack-offs, lock-rings, and
lockdown sleeves, whilst delivering instant
rigid
lock-down
in all directions whilst
being fully reversible for ease of workover,
side-tracking or abandonment. At a time
when unconventional HP/HT and deep-
water reservoir developments are growing
in importance, the oil and gas industry is
facing
increasing technical challenges to
meet rigorous regulatory and health and
safety requirements, while having to ensure
the commerciality of operations during the
current volatile oil price environment. POS-
GRIP wellheads address many of
these
challenges, whilst also being able to deliver
significant cost savings which in the case
of our new subsea wellhead design have
been
independently estimated at up
to
USD$10m for a deep-water well. In our view,
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Plexus’ equipment sets a new standard and,
B u s i n e s s M o d e l a n d M a r k e t s
having secured a leading position in jack-
up exploration drilling, is well placed to
break into the significantly larger and more
mainstream volume production wellhead and
subsea markets, particularly in conjunction
with partners such as our new licensee Jereh.
Th e su per io ri ty and pot en tial of our PO S-GRIP
tec hn ol ogy i s b ein g in creasing ly recog nised
by t he i ndus tr y, and the various initiatives
and agreem en ts t hat we entered in to during
th e year w i th a range o f industry partners
su ch as Jereh, C OSL, and Aq uaterra clearly
su pport our vie w th at t he POS-GRIP f riction-
gri p method of engi n eering
techn olog y
has many m o re applic ations b eyond our
tradi ti on al
organ ic
jack-up
ex plorat ion
act i vi t ies . Of co ur se as w ith any major ‘game
ch angi ng’ te chnolo gy that has the potential
to becom e a n ew st and ard, ther e have to
be so un d an d gen uine reasons for cus tomers
sel ec ti ng our e quip ment. Apart from our
operati onal ti me sav ing and r elat ed safety
bene fit s, at the engin ee ring level we b elieve
th at o ur techn ol ogy can uniq uely raise the
i ntegr ity o f w el lhe ad testing and sealing to
th at of pr em i um c ou pli ngs, which supports
ou r cl ai m that well he ads should not be, an d
i ndeed now do n ot need to b e, th e ‘weak link’
i n the wel l ar chit ec ture chain. In s up por t of
th ese i mpo rtant prin cip les an in d ept h repor t
co mm i ssi on ed by th e Company from OTM
Co ns ul ti ng In c, (‘OT M’), an inter national
i ndepen den t
engin ee ring
cons ultancy,
co nc lu ded t hat Ple xus wellhead s usin g its
HG m etal seals , offer the “bes t possible
seal i ng perfo rm an ce through a metal-to-
m etal seal th at none of t he exist ing design s
can matc h. Mo reove r, sealing performance
is not affected by pressure/temperature
cycl es as there are n o movable comp onents”.
OTM c onc lu des th at aft er evaluatin g POS-
GRIP s eali ng tech nolog y ag ain st existing
co mpe ti ng te chn olo gies, “it is the b est and
safest tech nol ogy d ue to its en han ced safety
perform ance”.
Plexus’ traditional market has been the
supply
of
adjustable
ren tal wellhead
equipment and associated running tools for
jack-up exploration drilling in th e UKCS. The
exploration wellhead contracts ar e supplied
from a rental fleet inventory, the majority
of which are HP/HT wellheads as these ar e
increasingly demanded not
j ust
for HP/
HT drilling but also for sta nd ard pressure
wells where added benefits are appreciated.
Initially this was only for stand ard pressure
equipment of 10,000 psi or less, but with
the development
of
POS-G RIP HP/HT
equipment, Plexus has secured n ear ly 10 0%
of the UKCS market, and commands a large
share of the European North Sea thanks to
the sup erior nature of its technology. The
rental business has since expand ed globally
into other territories such as Australia,
Brunei, Cameroon, China, Eg yp t, Malaysia,
and Venezuela. Plexus also p rovides serv ic e
technicians who install and maintain our
equipment at various stag es during the
drilling of a well.
The Company ’s focus on rent al ex ploration
allows
customers
to
experience
for
themselves
the many benef its of POS-
GRIP technolog y on temporary exploration
wells, rather than those used for pr oduc tion
where typically the wellhead eq uipme nt is in
place for the life of the well. However with
new partner Jereh we are working closely
to develop a Plexus POS-GRIP sur face
production wellhead suitable for the volume
Chinese land market. In addition re nting out
equipment from a growing inventory enables
Plexus to outsource all of
its wellhead
manufacturing to a select numb er of third
parties, and as a result avoid h aving to invest
in and d evelop
in-house manufac tur ing
capabilities with attendant fixed overheads.
Such a strategy led to the d ispos al of a 25 %
shareholding interest in a privat e UK oil and
gas equip ment manufacturing company.
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P O S - G R I P 1 5 k s i H P / H T E X P L O R A T I O N W E L L H E A D S Y S T E M
Th e j ack-up wellh ead exploration market
there is an industry wide push for savings at
i s esti m ated to be w orth cir ca USD $400m
all levels of drilling operations. With this in
per annu m. B y co ntras t the combined value
mind, it is compelling that Plexus’ equipment
of t he gl obal e xpl oration and p rod uction
generates material cost sav ings
for the
w ell h ead market was estima ted b y OTM at
operator, while at the same t ime deliver ing
US D$4.5 bn i n 20 14. C learly th e s ize of the
a superior wellhead solution. I mportantly,
m arket s that Ple xus i s only now beg innin g
Plexus’ surface jack-up wellheads can be
to address is far i n excess of its t rad itional
supplied at a rental cost that equates to
or gani c busi ness, an d even with the well
less than the time savings for the operator,
repo rted dec lin e i n capex by t he operating
thereby making
them
cost
negative.
co mpan i es the u psi de of moving into these
Similarly, our new Python subs ea we llhead
m arket secto rs i s subs tantial. As a resu lt,
will also deliver substantial cost savings
i n t andem w i th c ont inuing to gr ow the jack-
benefits, and we hope to b e ab le to r un the
up ren tal bu sine ss i n bo th its t rad itional and
first prototype in the second half of calendar
ne w market t er rit or ies , Plexus is focused in
year 2016. Cost saving and safety features
parti c ul ar on expandin g into th e mainstream
such as these underpin the va lue of Plexus’
vo l ume pr oductio n wel lheads market, and
IP and underpins Plexus’ growth potential as
th e i nc re asi ngly imp ortant s ub sea m arket.
it enters new international markets directly
In t he cas e of th e sub sea market Dou glas -
or through licensees.
Westw ood expe cts deep-water cap ex t o ris e
pos t 2 01 6, and s ee s expenditu re gr owing by
S t r a t e g y a n d t h e F u t u r e
al mo st 6 9% c ompar ed with the preceding
fi ve year period ,
totalling USD $210bn
betw een 2 01 5 and 2019, d riven b y Af rica
and th e Am eric as w hi ch account for 82% of
cape x.
In l ig ht of vol ati le o il markets which saw
B rent Crude fall d uring the f inancial year
from circa USD$112 on 1 July 2014 to circa
US D$6 3 on 3 0 Ju ne 2015, op erator s are
i ncr easin gly focu se d on securing sig nificant
co st s av in gs across their op erations, an d
Plexus has p ioneered a safer, more cost
effective, reliable and technically super ior
wellhead utilising POS-GRIP
technology
which we rent to many lead in g oil and gas
operators worldwide for surface exploration
jack-up drilling activities. Having battled with
incumbent suppliers which have dominated
the industry for d ecades, (where for example
just five comp anies account for over 90%
of the subsea wellhead business), Plexus’
wellhead equipment
is gaining
traction
and major operators awaren ess of our
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w ell h ead system s is i nc reasing. To date our
In an effort to continue to g row inter national
equ ipm ent has been u sed in over 400 wells
revenues as a p roportion of sales, and in
w orl dw ide by t he likes of BG, BHP Billiton,
particular access the growth of the Asian
B P, Con oco Phi l lips , Mae rsk, Sh ell, Stat oil,
HP/HT market, we have establish ed an Asian
Pet ronas , Tul lo w Oil, and Wintersh all, which
hub with offices in Singap ore and Malay sia
w e bel ieve i s a tes tame nt to the commercial
as we seek to further p osition our selves in
st rengt h o f Ple xus ’ offering.
a number of countries including Australia,
Brunei,
Indonesia, Malaysia, Singapor e
Pl exu s’ l ong-term go al is to develop PO S-GRIP
and Thailand. With this in mind, we are
tec hn ol ogy as a new in dustry s tandard for
working to re-locate a p ropor tion of our
w ell h ead des ign , and t o continu e to d evelop
wellhead renta l equipment to Singapore to
addi ti onal n ew p rod uc ts , which will also offer
support and strengthen our cu rrent regional
m ul ti pl e benefit s an d advantages in terms of
rela tionships a nd broaden our cu stomer base
i mproved safety, func tionality, and cost and
outside of the UK.
ti m e s avi ngs. For exam ple Plexu s’ connector
tec hn ol ogy i s ideal for high integ rity, low
Importantly, a s well as estab lishing new
fat igu e con nector ap plications. Wellhead
regional hubs, and pursuing
licencing
co nn ecto rs , ri ser con ne ctors, sub sea jum per
agreements and strategic partners as a key
co nn ecto rs , pi pelin e c onnectors , and even
part of strateg y to continue increasing our
ve ssel m oori ng c on nectors can all b enefit
global footprint, post period en d we se cured
fro m t he s im pli city o f POS-GRIP. A key factor
Jereh as a licencing partner in China; and
i n many o f th es e c om m ercial op por tunities
secured a Petronas Licence
in M alaysia
i s our
superior me tal-to-metal
sealing
through our joint venture entity. We ar e also
capabi l ity w i th u npreced ented reliab ility, an d
in active dialogue with reg ard s expansion
tru e w eld qual i ty seal ing , resu lt ing from t he
into Russia and CIS countries as par t of
hu ge am o un t of preload that we g enerate
our wider focus on b ecoming less re liant on
w hi ch preven ts any possible movement at
the declining North Sea area and seizing a
th e seal i nterface over the life of th e field .
foothold in major and emerg ing oil and gas
We bel i eve we h ave m erely scrat ched the
economies.
su rfac e despi te the excellent growth seen to
In addition
to our
future strategy
to
date , and that des pit e the current ind ustry
accelerate the adoption of our POS-GRIP
w ide sl owdo wn we beli eve that we can still
technology by the wider oil and gas mar ket
m ake i nro ads i nto t he sizeable mar kets th at
through licencing agreements, we are also
to date w e have not ad dressed. As a company
developing new p roduct lines to generate
w e ar e i mpl emen tin g a strategy t o expand
new revenue streams for Plexus . The launch
fro m a do mi nant pos iti on in t he Nort h Sea
of our Python Subsea Wellhea d mar ks such
i nto ne w geographi cal areas, as evid enced
a step. As mentioned the formal launch
by th e growt h we h ave r eported in FY 2015
marked
the
first commercial availability
i n Eu rope and Asia.
of our POS-GRIP enabled subs ea wellhead
system, where we are looking to deploy a
prototype offshore d uring the second half of
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P O S - G R I P I N V E N T O R Y
cal en dar year 2 016. With over six majors ,
i ncl u di ng the li ke s of B G, eni, Maers k, Sh ell,
and Tot al, h avi ng suppo rted the development
of t he wel lh ead an d its launch at OE2015,
T E S T B A Y F A C I L I T I E S
w e are acti vel y worki ng toward s find ing an
ope rat or to s ecu re t his first d eployment
by ei th er o ne o f t he original JIP partn ers
or an other op erator. In terms of market
wellhead. All of these prod uct innovations
co mpe tit ors the re are five maj or su pp lier s of
are in line with Plexus’ stra tegy to extend
su bsea wel lhe ad s, th es e are Aker, Cameron,
our POS-GRIP product reach into new and
Dri l lQ ui p, FMC , and GE who are all maj or
commercially attractive markets . Successful
m ul ti -bi ll i on do llar c orporations . However
R&D activity lead s to new inventions, product
w it h a un ique techn ol ogy tha t is safer an d
designs, and IP. Plexus continues to pursue
m ore c ost e ffec ti ve we have a powerful s tory
an active strategy of protecting existing
to t el l and th e p rogress we have made to
and securing new IP and p atents, and we
date dem ons trates h ow large the poten tial
have a number of exciting and we be lieve
i s fo r fu ture growth and value creation. The
valuable patent applications reg iste red or in
su bsea system s m arket had b een estimated
the process of being applied for.
to be value d at US D$ 41.6bn between 2009-
2 01 3, in cl udi ng su bsea trees , manifolds ,
w ell h eads , pu mps, cho kes and valves . T he
K E Y P E R F O R M A N C E I N D I C A T O R S
su bsea wel lh ead market
is
therefor e a
The Directors monitor the performance of the
su b-s ec tor o f t hi s market, which brok ing
Group b y reference to certain financial and
ho use Num is has es ti mated to be valued
non-financial key p erformance indicators.
at c.U SD$1 0- 12b n bet ween 2014-2017. If
The financial indicators include r evenue,
Pyth on i s suc cessful l y commercialised this
EBITDA, profit and earning s per share.
w oul d be a si gnifi cant s tep toward s achieving
Non-financial indicators include H ealth and
ou r st rategy of i nc reasing ad opt ion and
Safety statistics, equip ment ut ilisation rate ,
brand awareness of our POS-GRIP product
geographical diversity of customer revenues,
gi ven the market s iz e at hand .
R&D spend i s also c en tral to our st rateg y of
i nvest in g ti me and c apital into new product
develo pm en t. E xc lu ding the cost of b uilding
tes t fixt ur es R&D sp end increased 46.7% to
£ 3.4 7m durin g the l ast financial year. R&D
has been s pen t o n su ch products as WellTree,
th e HP/ HT T ie-B ack connector, th e new
POS-SE T C onn ec tor and the Py thon subs ea
effectiveness of a range of research and
development
initiatives
for example
in
rela tion
to new p atent and proprietary
intellectual prop erty activity, and employee
headcount and turnover rates.
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44
P r i n c i p a l R i s k s a n d
R i s k M a n a g e m e n t
Th ere ar e a num ber of poten tial r is ks and
un cer taint ies th at c ould have an impact on
th e Group’s pe rfor manc e which includ e the
fo ll o wi ng.
( a ) P o l i t i c a l a n d e n v i r o n m e n t a l
r i s k s
We participate in a global market where the
oil and gas reserves and their extraction and
oil and gas prices can be severely impacted
by changes in the political, operational, and
These may include unforeseen equipment
design issues, test delays during a contract
and final testing and delayed acceptances
of deliveries, which could lead to possible
abortive expenditure and write downs,
reputational risk and potential customer
claims or onerous contractual terms. Such
risks may materially impact on the Gr oup.
To mitigate this risk the Group continues
to invest in d eveloping and proving the
technology and has a policy of on-going
training of our own personnel and where
appropriate our customers.
environmental
landscape, particularly
in
( c ) C o m p e t i t i v e r i s k
relation to climate change and CO 2 emissions
relating to the oil and gas industry. The
introduction of sanctions is one example of
such a risk, and in extreme circumstances
even regime change, and a volatile oil price
is another where a severe fall in oil prices
can have a significant adverse impact on
customers’ drilling activities and associated
capital expenditure. As a supplier to the
industry we in turn can be adversely affected
by such events which can disrupt
the
markets, and affect our ability to execute
work for customers and/or collect payment
for services performed. To help address such
risks, the Group has continued to broaden its
geographic footprint and customer base and
The Group operates in highly competitive
markets and often competes d irectly with
large multi-national corporation s who have
greater resources and ar e more established.
Product innovation or technical advances
by competitors could adversely affect the
Group and lead to a slower take up of the
Group’s proprietary technology. To mitigate
this risk Plexus maintains an ex tensive suite
of patents and trademarks, and actively
continues to d evelop and imp rove its IP to
ensure that it continues to be able to offer
unique superior wellhead design solutions.
( d ) O p e r a t i o n a l
applies a stringent approach to credit control.
Shortage of experienced pers onne l in the oil
( b ) T e c h n o l o g y
Th e Group i s s til l at a re latively early stage
i n t he com mercial isat ion, marketin g an d
appl ic ati on of
i ts PO S-GRIP
f rict ion -grip
tec hn ol ogy beyo nd jack-up rent al exp loration
w ell h ead equ ipm en t, both with reg ard to
expan ding in to t he s urface prod uct ion an d
su bsea m arkets, as we ll as new p rod uct
develo pm en t. Current and fut ure contracts
m ay be adver sely affec ted b y techn olog y
rel ated fact ors outs ide the Grou p’s con trol.
and gas industry is widely recognised and could
deprive Plexus of key personnel necessary
for operational activities and r esearch and
development initiatives. To mitig ate this r isk
Plexus has developed effective r ecr uitment
and training procedures, wh ich combined
with the appeal of working in a company with
unique technology and engineering solutions
has enabled us to continue to grow our staff
numbers, and achieve to date a low rate of
turnover of personnel.
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( e ) L i q u i d i t y a n d f i n a n c e
R i s k a s s e s s m e n t
r e q u i r e m e n t s
The Board has established an on-going
In an eco nom ic
c limate
t hat
remains
process
for
identifying, evaluating and
vo l ati le an d u np red ictable it has become
managing the significant risks faced by the
i ncr easin gly po ss ible for both exist ing an d
Group. One of the Board’s control documents
pot ent ial sou rc es of finance to b e closed
is a detailed “Risks assessment & management
to busi ness es fo r a var iety of reasons t hat
document ” which categorises risks in terms
have n ot been an iss ue in the past. Some of
of – business (including IT ), compliance,
th ese m ay even r elat e to the lend er itself in
finance, cash, debtors, fixed assets, other
term s o f i ts o wn cap ital ratios an d lendin g
debtors/prepayments, creditors, legal, and
capac i ty. Al thou gh th is is a p otential risk
personnel. These risks are assessed on a
th e Grou p took ap pro priate steps d uring the
regular basis and could be associated with
ye ar to m iti gate this risk by successfully
a variety of internal and external sources
ren ewi ng an d extendi ng its b ank facilit ies
including regulatory requirements, disruption
w it h B ank o f S co tl and. The Grou p is required
to information systems, control breakdowns
to m eet certain fi nan ci al criteria ag reed as
and social, ethical, environmental and health
covenan ts in con nectio n with it s ban k loans
and safety issues.
and m onthl y management account s are
prepared and re vi ewed against the covenant
requirements to ensure that the Group’s
obl i gati ons c an be met.
( f ) C r e d i t
Th e mai n c redit ris k
is attributab le
to
Ben van Bilderbeek
trade re ceivables . As the maj ority of the
Chief Executive
Gro up’s cu st ome rs are larg e international oil
27 October 2015
co mpan i es th e r isk of non-p ay ment is much
redu ced, and t he refor e is more likely to be
rel ated to cl i en t satis faction and/or trade
san cti o ns. Cu stome r p ayments can involve
exten ded peri od of ti mes es pecially fr om
co un tri es w here exc hange cont rol regulations
can delay t he transfe r of funds out sid e
th ose coun trie s. The Group has cred it ris k
m anageme nt polic ies in place and exposure
to c redit ri sk i s mo nitored continuously.
45
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“POS-GRIP method of engineering offers
‘instant casing hanger lockdown’ and is used
to secure hangers with HG Seals which
provide direct, metal-to-metal, weld-quality,
high integrity sealing.”
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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C O R P O R A T E
G O V E R N A N C E
Contents
B O A R D O F D I R E C T O R S
D I R E C T O R S ’ R E P O R T
4 8
5 0
C O R P O R A T E G O V E R N A N C E
5 3
R E P O R T
R E M U N E R A T I O N
C O M M I T T E E R E P O R T
S T A T E M E N T O F
D I R E C T O R S ’
R E S P O N S I B I L I T I E S
5 6
6 1
I N D E P E N D E N T A U D I T O R ’ S
6 2
R E P O R T
47
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48
B O A R D O F D I R E C T O R S
J e r o m e J e f f r e y T h r a l l B B A M B A
has been involved in a range of industr ies as
( a g e d 6 5 ) , N o n - E x e c u t i v e C h a i r m a n
a director, investor and advisor, and over seen
Jeff joi ned Thrall Ent erp rises, In c. (‘TEI’), a
fam i ly ow ned h ol ding comp any headquartered
i n Ch ic ago, USA, in 1980 as vice p resid ent of
co rporate develo pment of TEI’s subs idiary,
Nazdar Co mpany, a manufacturer and
di stri bu to r of i nk je t, s creen prin ting , flexo
i nks and suppl ies. Jeff was named Presid ent
of TE I i n 19 95 . Jeff is also Managing D irector
of GS I Techn ol ogi es, a printer of functional
el ectr oni c produ cts and ind ustrial g rap hics.
Pri or
t o
j oin in g TEI, Jeff ’s p rofes sional
car eer inc lude d a nu mber of app ointmen ts
i n investm en t bank ing, commercial lend in g
and adm i nist rat ion .
B e r n a r d H e r m a n v a n B i l d e r b e e k
B S c M . E n g ( a g e d 6 7 ) ,
C h i e f E x e c u t i v e
B en foun ded th e Plexu s business in 1986. He
has m ore than 40 years’ experience in the
i ndu stry in bot h engin eeri ng and management
ro les and pr evi ou sly h eld senior pos it ion s
w it h Vetco Offsh ore Ind ustries, Dril-Qu ip,
and Ingram Cac tu s. Following a career at
Vetc o, wh er e B en r os e to the position of
Gen eral Manager of U K Engineering , h e went
a number of acquisitions and d isposals, as
well as the implementation of turn around
and growth strategies. Graham is a non-
executive director of Netplay TV PLC, the
AIM listed largest UK intera ctive TV gaming
company. He was previously a non-executive
director of NRX Global Inc. the worldwide
leader in Asset Information M anage ment
solutions used by lead ing companies in asset
intensive industries, including oil and gas.
C r a i g F r a n c i s B r y c e H e n d r i e
M . E n g ( O x o n ) ( a g e d 4 2 ) ,
T e c h n i c a l D i r e c t o r
After gaining a Masters Deg ree in Enginee ring
Science from the University of Oxfor d, Craig
began his career with ICI plc in 1996 as a
machines engineer. He joined Plex us in 1 998
and was instrumental in the developme nt,
testing and analysis of the original POS-
GRIP prod ucts. As Technical Dir ector, Craig
is responsible for overseeing new technology
and concept development, pr oduct te sting
and analysis, as well as pursuing new
applications for POS-GRIP technology both
internally and externally.
on t o fou nd hi s ow n oil and gas consultancy,
G e o f f r e y E d m u n d T h o m p s o n
VB C C on sul tants, i n 19 82. During this t ime,
B S c ( H o n s ) M . E n g ( a g e d 6 1 ) ,
hi s c li ents i nclu ded Amoco, Marat hon O il,
N o n - E x e c u t i v e D i r e c t o r
FMC Co rpo rat ion and D ril -Q uip. In 1986, Ben
fo und ed Pl exus and went on to merg e th e
w ell h ead di vis io n of h is company with In gram
Cac tu s wh er e he bec ame Presid ent Eastern
Hem is phere. In 1996 Ben regained
the
Pl exu s Oce an Systems Limited nam e th roug h
w hi ch POS-GR IP te ch nology was invented
and th en devel oped and commer cialised for
th e oi l serv ic es we llh ead equipment market.
G r a h a m P a u l S t e v e n s B A ( H o n s )
( a g e d 5 7 ) , F i n a n c e D i r e c t o r
Geoff has over 40 years’ exp erie nce in the
international oil and gas ar ena. Geoff ’s
expertise lies in the field of well equipment
and well design, including Hig h Pressur e
High Temperature wellhead
equipme nt
technology. He is currently contracted as an
independent consultant to Maers k Oil UK for
their Culzean HP/HT development, having
been, until recently, a Principal Drilling
Equipment Eng ineer with Maersk Oil
in
Denmark. Prior to this, Geoff was contrac ted
as an indep endent consultant for 31 year s
Grah am has br oad experience in f inancial,
advising
international operators and oil
co rporate, and operational management
service companies including a numbe r of
w it hi n both pub lic and private compan ies
Shell Group Operating Companies on we ll
i ncl u di ng J Sai nsbu ry plc , BSM Group Limited ,
equipment and all mechanical aspects of
Sketch l ey Gro up plc , and Fii Group plc. H e
well desig n and technology.
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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C h r i s t o p h e r J a m e s W a t t s F r a s e r
B A ( H o n s ) O B E ( a g e d 5 2 ) ,
N o n - E x e c u t i v e D i r e c t o r
Ch ri sto pher has expe rience
in manag ing
l arge, diverse corporate projects in complex
bus i nes s envir on ments on a g lob al scale. His
w ide -rangi ng caree r includes t wo terms as a
Memb er o f Par liam ent, as well as a nu mber
of years as a man agement consultant an d
co rporate advis or. C h ristopher also foun ded
and ra n an
i nter national marketing and
co mm u ni catio ns gro up, which had clients in
th e o i l and gas sector.
C h a r l e s E d w a r d J o n e s B S c M . E n g
( A g e 5 6 ) , N o n - E x e c u t i v e D i r e c t o r
Ch arl es has over 30 years of
senior
m anagem en t an d Board experience in the
ene rgy secto r. In 2007, Charles was CEO of
Hou sto n-based Fo ru m Oilfield Technolog y,
a gl obal o il fi eld products company which
he s ucc es sful ly me rge d with three other
co mpan ies i n 201 0 to create Forum Energ y
Tech no logi es (N Y SE: FET ) and where he
rem ai ned as Pres ident until 2013. Prior
to Fo rum, Charl es was COO of privately
ow ned Hy dri l Comp any LP, wh ere he played
a l eadi ng role i n the U S based d rilling an d
dow n hol e pro duct s company ’s IPO in 2000
and s ubseque nt s ale for USD$2.1 billion.
B efor e j oi ni ng Hyd ril, Charles s erved as
Di rect or o f Su bse a B usinesses for Cooper
Ca mero n Cor poratio n where he develop ed
th e gl obal su bsea production b usiness.
Ch arl es
i s a
form er Chairman of
the
Pet rol eum E qui pme nt Sup pliers Association,
a Di s ti nguis hed Alumn i of the Cullen Colleg e
of E ngi neeri ng at the University of Hous ton
and graduate of the Advanced Manag ement
Program at Harvard B us iness Sch ool.
49
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50
D I R E C T O R S ’ R E P O R T
Th e di rector s present their annual r eport
R E S U L T S A N D D I V I D E N D S
to geth er wi th
the
audited
finan cial
st atem en ts for the year ended 30 June 2015.
B U S I N E S S R E V I E W
A revi ew of the d evelopment an d performance
dur in g th e ye ar c on si stent with the size
and c ompl exity of the b usines s t ogether
w it h co mm entary on fu ture d evelop ment s
The results for the year, showing a profit
before taxation of £5. 94m (2014: £5.37m),
are set out on pag e 66.
The directors have proposed a final dividend
for the year ended 30 June 2015 of 1.75p
per share (2014: 0.62p).
i ncl u di ng
t he mai n
trends and
factors
C O R P O R A T E G O V E R N A N C E
l ikel y to affect the business is g iven in the
Ch ai rman’s Stat em en t o n p age 17 and th e
St rategic Report on page 28. I n ad dit ion
th e St rat egi c Re por t on page 28 in clu des
This is the subject of a separate report se t
out on page 48.
referen ces to and additi onal ex planations of
R E L A T E D P A R T Y T R A N S A C T I O N S
am oun ts i ncl uded in th e annu al accounts .
Wh ere gui del i nes make reference t o th e
Details of related p arty transactions ar e se t
provi si on of key pe rfor mance in dicators the
out in Note 27 in the financial st atements.
di rect ors are of th e o pini on certain financial
and n on- fin anc ial ind icators in clu ded in the
F I N A N C I A L I N S T R U M E N T S A N D R I S K
hi gh li ghts o n page s 2 and 3, th e Strategic
M A N A G E M E N T
Report o n page 28, and the Director s’ Rep ort
on page 5 0 m eet this requiremen t. T he
The Group maintains a commercial objective
di rect ors have pr ovi ded a descr iption of the
of contracting in sterling when ever possible .
pri nc ipal ri sks an d u nce rtaint ies facing the
In circumstances where this is not possible,
Gro up in t he St rat egi c Report on page 44.
the Group
converts
foreign
currency
R E S E A R C H A N D D E V E L O P M E N T
balances into sterling on receipt so far as
they will not be used for future payme nts in
the foreign currency. The Group maintains
Th e Gr oup acti vely en gages in an on-going
risk management policies which are set out
res earch
and
de velopment
pr ogramme
in more detail in note 23 to the accounts.
desi gn ed to expand and develop th e range
of com me rc ial applic ations deriving f rom
i ts
propri et ary
POS-GRIP
technology.
G O I N G C O N C E R N
For the year r es earch and develop ment
The directors, having made appr opriate
expen ditur e i nc ludi ng the cost of build ing
enquiries, believe
that
the Group has
new t est fixt ures t ot alled £4.12m (2014:
adequate resources to continue in operational
£ 3.1 9m ), bei ng am oun ts exp ensed throug h
existence for the foreseeab le future. The
th e St ate ment of Com pre hensive I ncome and
Group continues to adopt the going concern
cap it ali sed on the St atement of Financial
basis in preparing the financial s tate ments.
Po si ti on duri ng the year.
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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D I R E C T O R S ’ I N T E R E S T S
Th e dir ec tors who s erved during th e year and to the d ate of th is r eport are list ed below.
Th e i nt erests of th e dir ectors who held off ice d uring the year in t he sh ares of t he Com pany
at 3 0 Jun e 2 015 were as follows:
J. J effr ey Thral l 1
B e n va n B i l d e r b e e k 2
Grah am Steven s
Crai g Hendrie
Geo ff T hom pson
Ch ri sto pher Fraser
Ch arl es Edward Jones
N U M B E R O F
N U M B E R O F
O R D I N A R Y
O R D I N A R Y
S H A R E S
S H A R E S
O F 1 P E A C H
O F 1 P E A C H
2 0 1 5
2 0 1 4
42,704,001
58,700, 001
42,704,001
58,700 ,001
15,100
12,600
–
10,000
–
15,100
12,600
–
10,000
–
1. J. Je ffre y T hrall, has an ind ir ect b enef ic ial intere st in a c o m pany whic h c on tr ols 32 .47 7% of Mutual Hold ings
L imi te d. T he num ber o f s hares held by M utual Hold in gs L imit ed in th e Co mp any at 30 J une 2 015 was 42,700 ,00 1
(20 14: 42,700, 001). A dd itio nally, J. J effr e y Thrall h old s 4, 0 00 sh are s dir ec tly.
2. Be n van B ilde rbe e k is on e o f the b enef iciar ie s o f a tr ust whic h co ntr o ls 5 9.9 62% of t he shares of Mutual
H ol dings L im ited and the e ntire issue d s hare c ap ital of OF M I nve stm en t Lim ite d. At 30 J une 2 015 , Mutual
H ol dings L imit ed he ld 42,700 ,00 1 shar es and O FM Inves tme nt Lim it ed he ld 1 6,00 0,00 0.
R E T I R E M E N T A N D R E - E L E C T I O N
Mr. Hen dri e an d Mr. Fraser will retire by rot ation at the Annual General Meet ing and, being
el igi bl e, wi l l offer t he mselves for re-elect ion .
S U B S T A N T I A L S H A R E H O L D I N G S A N D I N T E R E S T S
S h a r e s
At t he date o f this An nual Report th e Company is aware of the following shareholdings in
exc ess of 3 % o f t he C ompany ’s is su ed or dinary share cap ital:
Mutu al Ho ldin gs Lim it ed 42,700, 001
OFM I nvestme nt Li mi te d 15,069,767
St ate Street Nom inees Limited 9,709, 694
Jere h Internat ional (Hong Kong ) Co., Ltd 4, 468,537
Hargreave Hal e Nomi nees Limited 4, 163, 024
% I S S U E D
S H A R E
C A P I T A L
47.8%
16.9%
10.9%
5.0%
4.7%
51
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52
E X E C U T I V E 2 0 0 5 S H A R E O P T I O N
is no relevant audit information of which
S C H E M E A N D N O N - E X E C U T I V E 2 0 0 5
the Company ’s auditor is unaware; and each
S H A R E O P T I O N S C H E M E
director has taken steps tha t he ought to
Deta il s o f th e E xec utive and Non-Execu tive
Sc hem es c an be foun d in the Remu nerat ion
have taken as a director to make himself
aware of any relevant audit in formation and
to establish that the Comp any ’s auditor is
Co m mi ttee Repo rt on page 56.
aware of that information.
E M P L O Y E E S
A N N U A L G E N E R A L M E E T I N G
Pl exu s
is a n on-dis criminat ory employer
w hi ch ai m s to eli mi nate unfair dis crimination,
haras sm ent, vic ti mis ation and b ullying. T he
Co m pany i s com m itt ed t o ens uring th at all
i ndi vi dual s are tr eat ed fairly, with res pect
The Annual General Meeting of the Company
will be held on 10 Decemb er 201 5. The
Notice convening the meeting can be found
at the back of these financial statements.
and are val ued irr es pective of disability,
In addition to the ordinary business of the
race, gender, he alth, s ocial class, s ex ual
meeting which is set out in the proposed
preferenc e, mar ital
status,
nationality,
resolutions numbered 1 to 7 (inclusive) there
rel i gi on,
em ployment
status ,
ag e
or
are three items of special business, namely
m em bership or non-m embersh ip of a trad e
the proposed resolutions numbered 8, 9 and
un i on.
E V E N T S S U B S E Q U E N T T O 3 0 J U N E
2 0 1 5
Su bseq ue nt to th e ye ar end, th e Company
en tered into a Sub sc ri ption Ag reement wit h
10, the effects of which are to renew the
authority given to the directors to allot shares
in the capital of the Company, to authorise
the Company to make market purchases, of
shares and, to dis-apply pre-emption rights.
Your attention is drawn to the Notes on each
of these resolutions at the foot of the Notice
Jer eh Intern ation al (Hong Kong ) Co. L td .
and to the Notes generally.
(“Jere h”) date d 1s t July 2015. Und er the
Su bsc ri pti on Agr ee ment, Jereh s ub scrib ed
fo r 5 % of the enlar ged share capital of th e
Co m pany; the n um ber of shares subscrib ed
fo r was 4,4 68,537 at a price of 180p p er
sh are. T he total num ber of shar es in is su e
fo ll o wi ng th is su bscr iption, and as at the date
of t hi s re por t, i s 89 ,3 70,733. Additionally, as
part o f t he S ubs cript ion Agreement, Jer eh
has th e ri ght to n om in ate one Non-Executive
Di rect or to th e Bo ard. Pursuant to this rig ht,
th e proce ss of appoi nt ing the nominee is
w ell advanced.
A U D I T O R S
Crowe Clark Whitehill LLP has indicated its
willingness to be reappointed as statutor y
auditor. In accordance with Section 4 89 of the
Act, two resolutions for the re-appointme nt
of Crowe Clark Whitehill LLP as auditor of
the Company and authorising the director s to
determine its remuneration will be proposed
at the forthcoming Annual General Meeting.
C O M P A N Y N U M B E R
D I S C L O S U R E O F I N F O R M A T I O N T O
Wales under Company Number 033229 28.
The Company is registered in England and
A U D I T O R S
Th e di rector s wh o held office at the date
of approval o f thi s Dir ec tors’ Report conf irm
Ben van Bilderbeek
that, so far as they are each aware, there
Chief Executive
27 October 2015
By order of the Board
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C O R P O R A T E G O V E R N A N C E
R E P O R T
53
I N T R O D U C T I O N
A U D I T C O M M I T T E E
Al th oug h the rul es of AIM do n ot requir e the
The Audit Committee compris es two Non-
Co m pany to c ompl y w ith the UK C orporate
executive Directors, J. Jeffrey Thrall and
Governan ce Code (the ‘ Code’), th e Company
Christopher Fraser and is sched uled to meet
fu ll y s upports t he principles set ou t in the
twice a year. It is the Audit Committee’s
Co de and wi l l atte mpt to comp ly wher ever
role
to provide
formal and
transparent
pos si ble , gi ven bo th the size and resources
arrangements for considering how to apply
avai l able to the C ompany.
financial reporting and internal control best
T H E B O A R D
Th e B oard of D ire ctors comprises three
E xecu ti ve Di rectors and four ind ependent
No n-e xe cuti ve D irect ors, one of wh om is the
Ch ai rman.
Th e B oard m ee ts re gularly throug hout t he
ye ar and r ec ei ves a Board pack in res pect
practice, whilst maintaining an appr opr iate
rela tionship with the ind ependent auditor s
of the Group. In order to com ply with best
practice that at
least one member has
relevant financial exp erience, the Chairman
of the Board sits on the Audit Committee.
During the year to 30 June 2015 the Audit
Committee met on two occasion s.
of e ach meetin g t oge ther with any other
R E M U N E R A T I O N C O M M I T T E E
m ateri al deeme d n ec es sary for the Board to
di sch arge i ts du tie s. The Board is responsible
The Remuneration Committee compr ises two
fo r form ul atin g, r evi ewi ng and approving t he
Non-executive D irectors, J. Jeffrey Thrall and
Gro up’s strategy, bu dgets, major items of
Christopher Fraser and meets at least once
expen ditu re an d ac qui sitions.
a year. It is the Remuneration Committee’s
Dur in g the year t o 30 June 2015 th e Board
policy on Executive remuneration and to
m et a total of twel ve ti mes.
set remuneration packages for individual
role to establish a formal and transparent
Directors.
B O A R D C O M M I T T E E S
Th e B oard has establi shed two committees;
During
the year
to 30 June 2015
the
Remuneration Committee met on
three
Au di t a nd Rem un eratio n each h av ing written
occasions.
term s o f del egated res ponsibilities.
It i s co nsi de re d that the compos ition and
si ze of the B oard does not warrant the
appoi nt m en t of a Nominations Committee
and appoi ntme nts are dealt with by the
w hol e of t he B oard .
B
U
S
I
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E
S
S
R
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V
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W
S
T
R
A
T
E
G
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R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
F
I
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A
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I
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T
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M
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54
B O A R D A N D C O M M I T T E E M E E T I N G A T T E N D A N C E
Th e t able bel ow sh ow s t he attend ance recor d of ind ividual d ir ector s at Board mee tings and
co mm i tt ee s of w hi ch the y are members.
B O A R D
A U D I T
R E M U N E R A T I O N
C O M M I T T E E
C O M M I T T E E
E L I G I B L E
A T T E N D E D
E L I G I B L E
A T T E N D E D
E L I G I B L E
A T T E N D E D
T O
A T T E N D
T O
A T T E N D
T O
A T T E N D
12
12
12
12
12
12
11
8
11
12
9
7
7
7
2
–
–
–
–
2
–
2
–
–
–
–
2
–
3
–
–
–
–
3
–
3
–
–
–
–
3
–
J. Jeffrey Thrall
B en van B i lderbe e k
Grah am Steven s
Crai g Hendrie
Geo ff T hom pson
Ch ri sto pher Fraser
Ch arl es Jones
A P P O I N T M E N T O F N O N - E X E C U T I V E D I R E C T O R
Ch arl es Jones was appoi nted as a Non-executive Direct or on 18 Sept emb er 2 014. As required
by Art i cl e 69 .(B) o f the Comp any ’s Art icles of As sociation, Ch arles Jone s r etir ed at the
An nu al General Me et ing held on 11 December 2014 and, b eing elig ib le, offer ed himself for
re- elec ti on. T he r es olu tion to re-elect him as a direct or was pass ed wit hout dissent.
R E T I R E M E N T A N D R E - E L E C T I O N
Crai g Hen dri e and C hristopher Fras er are to ret ire by rotat ion at t h e Ann ual G eneral Meeting
and, bei ng eli gi bl e, will offer t hemselves for re-election.
S H A R E H O L D E R R E L A T I O N S
Th e Com pany me et s with it s ins titu tional shareh old ers and an aly st s as ap propriate and
en cou rages co mmu ni cation with pr ivate sharehold ers via t he AGM. In ad dit ion , t he Company
us es the annu al re por t and accoun ts , int erim s tat ement and web site (www.p lexusplc.com ) to
provi de furthe r info rm ation to s har eholders.
H E A L T H A N D S A F E T Y
Th e C om pany is active in asses sing and minimising the r is ks in all ar eas of t he business and
edu cati ng the w orkforc e to provide as safe a wor king environm ent as p os sible.
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F I N A N C I A L R E P O R T I N G
The Group maintains appropr iate insurance
Th e di rec tors have a commitment to best
pract ic e for th e Group’s external finan cial
cover in respect of legal actions against the
Directors as well as against mate rial loss or
claims against the Group and reviews the
repo rti ng i n o rde r t o p resent a balanced
adequacy of the cover regularly.
and com prehensibl e assessmen t of
t he
Gro up’s fi nanc ial posit ion and p ros pects t o
The Group has established procedures
i ts sh arehol de rs , em ployees, cust omers,
whereby employees may in con fidence raise
su ppli er s and o th er
third par ties. This
concerns rela ting to matters of potential
co mm i tm ent en com passes all pub lis hed
fraud or other imp roprieties , as well as
i nfo rm at ion i nc ludi ng b ut not limited to the
health and safety issues.
ye ar e nd and in teri m financial stat ements ,
regu l atory n ew s an nouncemen ts and other
publ i c
i nfo rm ati on . The Statement
of
Di rect ors’ Responsi bili ties for preparing th e
acc ou nts may be fou nd on pag e 61.
I N T E R N A L C O N T R O L A N D R I S K
M A N A G E M E N T
R E S E R V E D M A T T E R S
The board has a formal sched ule of matters
reserved for its decision which includes
the setting of Company goals, objectives,
budgets and other plans. Boar d paper s,
comprising an agenda and formal r eports and
briefing pap ers, are sent to the directors in
Th e Bo ard is respons ible for t he s ys tems
advance of each meeting. All directors have
of i nt ernal co ntrol and for reviewing their
access to independent professional adv ice at
effect i ven es s. Su ch s ys tems ar e desig ned to
the Company ’s exp ense, if requ ired, as well
m anage rather than el i minate ris ks and can
as to the advice and services of the company
provi de o nly r eas on able and n ot abs olu te
secretary.
R I S K A S S E S S M E N T
The Board has estab lished an on-going
process
for
identifying, evaluating and
managing the sig nificant risks faced by the
Group. The risks are assessed on a regular
basis and could be associated with a variety
of internal and external sources including
regulatory
requirements,
disruption
to
information systems, control br eakdowns
and social, ethical, environmen tal and health
and safety issues.
ass uranc e again st mat erial mis -s tat ement or
l oss . Eac h year, o n b ehalf of the Board , the
Au di t Com m ittee reviews the effect iveness
of th ese sy st em s . Th is is achieved p rimarily
by co nsi deri ng th e ri sks p otentially affecting
th e Gro up and dis cus si ons with th e exter nal
audi to rs.
Th e G ro up does n ot currently h ave an
i ntern al audi t fun ctio n due to the small s ize
of th e admi ni st rative function an d th e h igh
l evel of Di rect or review and auth orisat ion of
tran sac ti on s.
A
com prehensi ve bu dgeting p rocess
is
co mpl eted onc e a year and is rev iewed and
co mm en ded by t he Audit Committ ee for
approval by t he B oard. The Group’s res ults ,
as c om pared a gai nst b udg et, are rep orted t o
th e B oard o n a month ly basis and d is cus sed
i n detai l at each m ee ti ng of the Board .
55
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56
R E M U N E R A T I O N
C O M M I T T E E R E P O R T
I N T R O D U C T I O N
Co m pan ie s t radin g o n AIM are not required
to provide a fo rm al remuneration report.
How ever, in l i ne w ith c u rrent best p ractice
th is report provi des information to enab le
a gre ater l evel of u nderstanding as t o how
Di rect ors’ rem uneration is det ermined .
Th e Rem unerati on C o mmittee of the Boar d
i s re sponsi bl e
for c onsidering D irectors ’
rem un erati on pac kages a nd makes
its
rec om mendati ons
to
the
Board .
The
Co m mi ttee c om pr ises
two Non-executive
Di rect ors J. Je ffrey Thrall and Christopher
Fraser, and is requ ire d to meet at least on ce
a year.
R E M U N E R A T I O N P O L I C Y
Th e Gr ou p’s poli cy is t o attract, retain and
m oti vate hi gh cali bre e xecut ives cap able of
ach i evi ng the Group’s objectives. Executive
Di rect ors re ceive sal aries, annual bonuses
(as and w hen appropriate), med ical cover,
and pensi on sc hem e c on t ribution s which ar e
i nten ded to be c om petit ive within t he s ector
i n wh i ch the Gro up op erates.
Th e C om mi ttee determines
t he p olicy
of the overall remu neration p ackag e for
E xecu ti ve Di re ctors
and
ot her
senior
exec uti ves . B asic salaries and benef its
of all em pl oye es ar e reviewed every year,
and the Gr oup an d th e Comm ittee as part
of th is annual process seeks advice f rom
extern al
rem un erati on
con sult ants.
In
revi ew i ng s alar ies , c on siderat ion is given to
pers onal performanc e, the Group ’s overall
perform anc e
and
external
comparative
i nfo rm at ion.
An annual performance bonus is payable to
Executive Directors and senior staff, and
each year an exercise is under taken, again
in conjunction with external remuneration
consultants to look at market comparisons,
benchmarks, relative performance as well as
consideration of strategic prog ress in addition
to simply financial ones. Comparator group
analyses includes oil and gas exploration
companies with broad ly similar mar ket
capitalisations and numbers of employees,
as well as oil and gas service companies
where althoug h the market capitalisation
range is wide it is relevant as t hese are the
sort of companies with which Plexus may
compete for talent. A further comparator
group for the Committee to consider is the
F TSE AIM 100.
S E R V I C E C O N T R A C T S
The Executive Directors have
ser vice
agreements with
the Company
dated
25 November 2005 sub ject t o termination
upon twelve months’ notice being given by
either party.
P E N S I O N S
The Group offers a contributor y group
stakeholder pension scheme,
into which
the Group makes matching contributions
up to a pre-agreed level of b ase salary ; the
scheme is open to Executive D irectors and
permanent emp loyees. Directors may choose
to have contributions paid
into ex isting
personal pension plans.
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N O N - E X E C U T I V E D I R E C T O R S
Th e N on-execu ti ve Ch airman, J. Jeff rey Th rall, entered in to a Letter of App oin tm ent with the
Co m pany dated 25 November 2005 for an in itial term th roug h t o th e fir st AG M and having
been re-ele cted as a director either party can terminat e u pon t hr ee mont hs’ notice being
gi ven . The su bsequen tl y appointed Non-executive D irect ors, G eoff T homp son, Christopher
Fraser and Ch arl es Jo nes, entered into t heir Letters of Ap point ment with the Com pany
date d 8 Jun e 2 010, 15 March 2012 and 18 September 2014 r esp ect ively, an d, having been
re- elec ted as a d irect or at the AGMs h eld in 2010, 2012 and 20 14 r esp ectively, are subject
to t he sam e term inatio n conditions as applicable to Mr T hrall.
D I R E C T O R S ’ R E M U N E R A T I O N
Deta il s of Di rect or s’ remuneration for the year ar e set out below:
S H O R T - T E R M
P O S T -
S H A R E -
E M P L O Y E E
B E N E F I T S
E M P L O Y -
B A S E D
M E N T
P A Y M E N T
B E N E F I T S
S A L A R Y
B E N E F I T S
P E N S I O N
I F R S 2
& F E E S
( I N C L .
A N N U A L
B O N U S )
£
£
£
C H A R G E
F O R
S H A R E
O P T I O N S
2 0 1 5
T O T A L
£
2 0 1 4
T O T A L
£
Ex ecu tive Directo rs
B en van Bi lderb eek
732,263
12,891
–
Grah am Steven s
354,365
9, 286
26,050
Crai g Hendrie
249,899
881
24, 875
Non -ex ec ut ive
Direct ors
J. J effr ey Thral l
Geo ff T hom pson
Ch ri sto pher Fraser
Ch arl es Jones
32,500
20,000
30,000
34,976
–
–
–
–
–
–
–
–
£
–
–
–
–
–
21,016
–
745,154
649,116
389,701
358,218
275,655
342,046
32,500
20,0 00
51,016
34,976
32,500
20,000
54,016
–
Total
1,454,003
23,058
50,925
21,016 1,549,002 1,455,896
57
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F
I
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A
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D I R E C T O R S ’ I N T E R E S T I N S H A R E O P T I O N S
Th e opt io ns and awards have b een granted p ur su ant to th e Exe cu t ive 2 005 Share Option
Sc hem e an d No n-E xec utive 2005 Share Option Scheme to th e followin g Direct ors:
E X E C U T I V E 2 0 0 5 S H A R E O P T I O N S C H E M E
NAME
NO OF
GRANTED
LAPSED
EXERCISED
NO OF OPTIONS
GRANTED
LAPSED
OPTI ONS AT
DURING
DURING
DURING
AT 30/06/14
DURING
DURING
30/ 06/13
13/14
13/14
13/14
14/15
14/15
B. van B ilderbeek
3 88, 304
B. van Bilderbeek
B. van Bilderbeek
B. van Bilderbeek
G. Stevens
G. Stevens
G. Stevens
G. Stevens
C. Hendr ie
C. Hendr ie
C. Hendr ie
C. Hendr ie
65, 902
33 2, 110
16 9, 642
254, 407
43,177
217,795
101,042
254, 407
43,177
217,795
105,853
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
( 194,152)
–
–
–
(116,000)
–
–
–
–
–
–
–
194, 152
65,902
332,110
169,642
138, 407
43,177
217,795
101,042
254, 407
43,177
217,795
105,853
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
NAME
EXERCISED
NO OF
DATE OF
NO OF
EXPIRY DATE
EXERCISE
D URING
OPTIONS AT
GRANT
OPTIONS
14/15
30/06/15
VESTED AT
30/06/15
B. van B ilderbeek
B. van Bilderbeek
B. van Bilderbeek
B. van Bilderbeek
G. Stevens
G. Stevens
G. Stevens
G. Stevens
C. Hendr ie
C. Hendr ie
C. Hendr ie
C. Hendr ie
–
–
–
–
–
–
–
–
–
–
–
–
194, 152
09/12/05
194, 152
08/12/25
65, 902
20/06/07
65, 902
19/06/17
332, 110
17/12/09
332,110
16/12/19
169, 642
25/03/11
169, 642
24/03/21
138, 407
09/12/05
138, 407
08/12/25
43, 177
20/06/07
43, 177
19/06/17
0.385
217,795
17/12/09
217,795
16/12/19
101, 042
25/03/11
101, 042
24/03/21
254, 407
09/12/05
254, 407
08/12/25
43, 177
20/06/07
43, 177
19/06/17
217,795
17/12/09
217,795
16/12/19
105, 853
25/03/11
105, 853
24/03/21
0.41
0.60
0.59
0.385
0.41
0.60
PRICE
(£)
0.59
0.385
0.41
0.60
0.59
Th e fol l ow ing direc to rs made g ains on exercise of option s in t he curr ent and pr ior year:
B. van Bi lderbeek: £nil (2014: £355k)
G. St even s: £n il (2 014 : £212k)
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N O N - E X E C U T I V E 2 0 0 5 S H A R E O P T I O N S C H E M E
NAME
NO OF
GRANTED
LAPSED
EXERCISED
NO OF OPTIONS
GRANTED
LAPSED
OPTIONS AT
DURING
DURING
DURING
AT 30/06/14
DURING
DURING
30/06/13
13/14
13/14
13/14
14/15
14/15
J. Thrall
G. Thomps on
C. Fraser
40,169
100,000
100,000
–
–
–
–
–
–
–
–
–
40,169
100, 000
100,000
–
–
–
–
–
–
NAME
EXERCISED
NO OF
DATE OF
NO OF
EXPIRY DATE
EXERCISE
DURING
OPTIONS AT
GRANT
OPTIONS
14/15
30/06/15
VESTED AT
30/06/15
J. Thrall
G. Thomps on
C. Fras er
–
–
–
40, 169
09/12/05
40,169
08/12/25
100, 000
08/06/10
100, 000
07/06/20
100, 000
05/07/12
66, 666
04/07/22
PRICE
(£)
0.59
0.60
1.18
No o pti ons are e xpec te d to lapse at the AGM .
59
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60
Th e exerci se o f th e o ptions grant ed on 5 July 2012 are s ub ject to t he following ve sting
co ndi ti ons bei ng satis fi ed:
D ate Optio n ca pa ble of exerc ise
Number of Shares over which Opt ion
could be capable of exercise depending
on TSR Growth
1 4 days after Com pany AGM following end
Up to 1⁄3 of Shares under Option
of Fi rst Assess m en t Pe riod – 1 July 2012 to
3 0 Jun e 201 3
1 4 days after Company AGM followin g end
Up to 1⁄3 of Shares under Option
of Se con d Asse ss ment Period – 1 J uly 2013
to 3 0 J une 2 01 4
1 4 days after Company AGM following end
Up to 1⁄3 of Shares under Option
of T hi rd Ass es sm ent Period – 1 July 2014 to
3 0 Ju ne 2 0 15
1 4 days after Company AGM following end
Up to all Shares under Option LESS Annual
of C om plete Ass es sm ent Period – 1 July
Shares already capable of exercis e.
2 01 2 to 30 June 201 5
Th e l ow est mi d- market price of the Company ’s s hares in t he year to 30 J un e 201 5 was 1 65.5 p
on 9 Febr uary 2015, and the high in the p eriod to 30 Jun e 2015 was 2 95.3 8p on 5 July 201 4.
Th e mi d-m arket pric e on 30 Jun e 2015 was 220p.
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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S T A T E M E N T O F
D I R E C T O R S ’
R E S P O N S I B I L I T I E S
61
The directors are responsible for preparing
The directors are resp onsible for kee ping
th e Dir ec tors’ Report, Strateg ic Report and
proper accounting
records
that disclose
th e fi nanc ial stateme nt s in accordance with
with reasonable accuracy at any time the
appl ic able law and re gulations.
financial position of the parent company
and enable them to ensure that its f inancial
Company
law
requires
the directors
to
statements comply with
the Companies
prepare
financ ial
st atements
for each
Act 2006. They have a general responsibility
fi nan ci al year. U nde r t hat law th e directors
for taking such step s as are reasonably open
have el ected
to pr epare
th e
f inancial
to them to safeguard the assets of the gr oup
st atem en ts i n ac c ord ance with app licab le
and to prevent and detect fraud and other
l aw an d In tern ati on al Financial Report ing
irregularities.
St andards
(IFR Ss) as ad opt ed by
the
European Union and, as regards the Parent
Under applicab le law the directors are further
Co m pany fin ancial st atements , as ap plied
responsible for ensuring tha t the Strategic
i n ac cordanc e wit h the p rovision s of th e
Report and the Report of the Directors and
Co m pani es Ac t 20 06 . Under comp any law
other information included in the Annual
th e di rec tors m ust no t approve t he f inancial
Report and Financial Statements is pr epar ed
st atem en ts u nl es s th ey are sat is fied that
in accordance with applicable law in the
th ey gi ve a true and fai r view of the state of
United Kingdom.
affai rs of the Co mpany and of the Group and
of the profi t of th e Group for th at p eriod.
The directors are
responsib le
for
the
In prepar in g these fin ancial s tatements, t he
maintenance and integrity of the c or porate
directors are required to:
•
sel ec t s ui tabl e ac counting p olicies and
th en appl y them c onsistently;
and financial information included on the
Group’s website (www.plexusplc.com). The
work carried out by the auditor s does not
involve the consideration of these matters
•
m ake j udgem en ts and estimat es t hat
and, accordingly, the auditors accept no
are reaso nable and prudent;
responsibility for any changes that may have
•
st ate
that
th e
financial statements
co mpl y w ith I FRSs as adop ted by t he
E uro pean Un io n;
occurred in the accounts since they were
initially presented on the web site. Legislation
in the UK governing the p reparation and
dissemination of financial statements may
•
prepare the financial statement s on
differ from legislation in other jurisdictions.
th e goi ng con cern basis unless it is
i nappropr iate to presume that t he group
By order of the Board
and th e parent company will contin ue
i n bus i ness.
Ben van Bilderbeek
Chief Executive
27 October 2015
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62
I N D E P E N D E N T A U D I T O R ’ S
R E P O R T T O T H E
S H A R E H O L D E R S O F
P L E X U S H O L D I N G S P L C
We have au di te d
the group
f in ancial
statements in accordance with applicable
st atem en ts of Pl exus Holdings plc for the
law and International Standard s on Auditing
ye ar ended 3 0 Ju ne 20 15 which compris e the
(UK and Ireland). Those standards require
Co ns ol i dated Stat em en t of Comp rehen sive
us to comply with the Audit in g Prac tices
In com e,
th e
Consol idated
Stat emen t
Board’s Ethical Standard s for Aud itors.
of Fin anci al Posit ion,
the C ons olid ated
St atem ent of Ch anges
in Equity,
the
Co ns ol i dated S tat em ent of Cas h Flows an d
th e relat ed notes nu mbered 1 to 2 8.
Th e
fi nanc ial
reporti ng
framework
that
has been appl ied in their preparation is
appl ic able l aw an d In ternational F inancial
Report in g St and ards (IFRSs) as adopted by
th e Eu ropean Un ion.
Th is report i s m ade sol ely to the comp any ’s
m em bers, as a body, in accord ance wit h
Ch apter 3 o f Part 1 6 of the C ompan ies Act
2 00 6. Our audit wo rk has been und ertaken
so th at we mi ght s tat e to the comp any ’s
m em bers those matters we are req uired
to s tate to the m in an auditor ’s report and
fo r no othe r purp os e. To the fullest extent
perm i tt ed by law, we do not accep t or
ass um e respons ibil ity to anyon e other th an
th e co mpany and t he co mpany ’s member s as
a body, for our audi t w ork, for this rep ort, or
fo r the o pi ni ons we h ave formed .
S C O P E O F T H E A U D I T O F T H E
F I N A N C I A L S T A T E M E N T S
An audit involves obtaining evid ence about
the amounts and disclosures in the f inancial
statements sufficient to give reasonable
assurance that the financial statements ar e
free from material misstatement, whether
caused by fraud or error. This inc ludes an
assessment of: whether
the accounting
policies are app ropriate to the company ’s
circumstances and have been consistently
applied and adequately d isclosed;
the
reasonableness of significant accounting
estimates ma de by
the director s; and
the overall p resentation of the financial
statements.
We read all the financial and non-financial
information
in
the Directors’ Report,
Chairman’s Statement, Strategic Report,
Corporate Governance Report, Remuneration
Committee
Rep ort
and
any
other
surround information to identify material
R E S P E C T I V E R E S P O N S I B I L I T I E S O F
inconsistencies with the aud ited Financial
D I R E C T O R S A N D A U D I T O R S
Statements and to identify any infor mation
that is apparently materially incorrect based
As expl ai ned m ore ful ly in the Statemen t
on, or materially
inconsistent with, the
of Di rectors ’ Respo ns ibilities, t he d irectors
knowledge acquired by us in performing the
are r esponsi bl e for t he preparation of the
audit. If we become aware of any apparent
fi nan ci al stat em ents and for being satis fied
material misstatements or inconsistencies
th at th ey gi ve a tru e and fair view. Our
we consider the imp lications for our report.
res po ns ibi li ty
i s
t o audit
th e
f inancial
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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O P I N I O N O N F I N A N C I A L
M A T T E R S O N W H I C H W E A R E
S T A T E M E N T S
R E Q U I R E D T O R E P O R T B Y
In o ur opin io n th e fi nan cial statements:
•
gi ve a true and fair view of the state
of the grou p’s affairs as at 30 J une
2 01 5 and of i ts profit for the year then
en ded;
•
have
been
properly
prepared
in
acc ordan ce wi th IFRSs as ad opted by
th e Eu ropean Un ion; and
•
have been prepared in accordance with
th e requ ir em ent s of the Companies Act
2 00 6.
O P I N I O N O N O T H E R M A T T E R
P R E S C R I B E D B Y T H E C O M P A N I E S
A C T 2 0 0 6
In o ur opi ni on th e in formation given in the
Di rect ors’ Report and Strateg ic Rep ort for the
fi nan ci al year fo r whic h the gr oup f inancial
st atem en ts are prepare d is cons isten t with
th e group fina ncial statements .
E X C E P T I O N
We have nothing to report in respect of the
following matters where the Companies Act
2006 requires us to report to you if, in our
opinion:
•
certain
disclosures
of
Director s’
remuneration sp ecified b y law are not
made; or
•
we have not received all the information
and explanations we require for our
audit.
O T H E R M A T T E R
We have reported separately on the parent
company
financial statements of Plexus
Holdings plc for the year end ed 3 0 J une
2015.
Matthew Stallabrass
Senior Statutory Auditor
for and on behalf of
Crowe Clark Whitehill LLP, Statu tory Auditor
London
27 October 2015
63
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P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
“Res earch and Development (‘R&D’ ) spend ,
excluding cos t of bu ilding test fixt ures,
in creas ed by 46 .7 % to £3.47 m”
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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F I N A N C I A L
S T A T E M E N T S
Contents
C O N S O L I D A T E D S T A T E M E N T O F
C O M P R E H E N S I V E I N C O M E
C O N S O L I D A T E D S T A T E M E N T O F
F I N A N C I A L P O S I T I O N
C O N S O L I D A T E D S T A T E M E N T O F
C H A N G E S I N E Q U I T Y
C O N S O L I D A T E D S T A T E M E N T O F
C A S H F L O W S
N O T E S T O T H E C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
6 6
6 7
6 8
6 9
7 0
I N D E P E N D E N T A U D I T O R ’ S R E P O R T
1 0 0
P A R E N T C O M P A N Y S T A T E M E N T
1 0 2
O F F I N A N C I A L P O S I T I O N
P A R E N T C O M P A N Y S T A T E M E N T O F
1 0 3
C H A N G E S I N E Q U I T Y
P A R E N T C O M P A N Y S T A T E M E N T O F
1 0 4
C A S H F L O W S
N O T E S T O T H E P A R E N T C O M P A N Y
1 0 5
F I N A N C I A L S T A T E M E N T S
C O M P A N Y I N F O R M A T I O N
1 1 5
65
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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66
C O N S O L I D A T E D
S T A T E M E N T O F
C O M P R E H E N S I V E I N C O M E
RE VENUE
Co st o f s ales
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5
N O T E S
2 0 1 5
£ ’ 0 0 0
3
28,526
(8,581 )
2 0 1 4
£ ’ 0 0 0
A s r e s t a t e d
27,024
(7,817)
GRO SS PR OFIT
19,9 45
19,207
Adm i ni strati ve expe ns es
(14,925)
(13,9 28)
O PE RA TING P R OFIT
Fin anc e i nc ome
Fin anc e c osts
Sh are of pr ofit of as soci ate
Gai n o n di sposal of ass ociate
P RO FIT B EFOR E TA X ATION
Inc om e t ax expe ns e
P RO FIT FO R T HE YEA R ATTRIBUTABLE
TO TH E OWNERS OF THE PARENT
Oth er com prehensive income
TO TA L CO MPR EHE NSI VE INCOME FOR
TH E Y EAR AT TRIB UTA BLE TO THE
5
7
8
14
14
9
5,020
512
(182)
236
352
5,938
(509)
5,2 79
5
(124)
2 15
–
5,37 5
(804)
5,429
–
4,5 71
–
OWNER S O F THE P ARENT
5,429
4,5 71
EA R NINGS P ER SHA RE
11
B a s i c
Di l uted
A ll in co me arise s from c ont inuing op erations
6.40p
6.16p
5 .44p
5 .21p
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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C O N S O L I D A T E D
S T A T E M E N T O F
F I N A N C I A L P O S I T I O N
67
A SSE TS
Go odw il l
Int angi ble assets
Inves tm ent i n as soci ate
Prope rty, pl ant and eq uipment
Deferred tax ass et s
TO TA L NO N- CURR ENT ASSETS
Inventories
Trade an d o th er r ec ei vab les
Ca sh and cash equi valents
TO TA L CU RRENT A SSETS
TO TA L A SSE TS
EQ UI TY AND L IA BILITIES
Ca ll ed up share cap ital
Share premium account
Sh are based paym en ts reserve
Retai ned ear ni ngs
TO TA L E QUITY AT TR IBUTABLE TO EQUITY
HO LD ER S OF THE P A RENT
LIA B IL ITIES
Deferred tax l iabili tie s
B ank l oans
TO TA L NO N- CURR ENT LIABILITIES
Trade an d o th er payables
Cu rren t in com e tax l i abilities
B ank l oans
TO TA L CU RRENT LI ABILITIES
TO TA L L IAB ILI TIES
N O T E S
12
13
14
15
9
16
17
19
19
20
9
23
18
23
A T 3 0 J U N E 2 0 1 5
2 0 1 5
£ ’ 0 0 0
767
13,167
–
17,154
–
2 0 1 4
£ ’ 0 0 0
7 60
10,437
9 41
13,284
751
31,0 88
26,173
6,55 1
7,30 1
3,32 8
17,1 80
48,2 68
849
20,141
1,862
15,628
5,256
6,463
6,353
1 8,072
44,245
8 49
20,138
2,4 76
11,117
38,480
34,580
212
5,975
6,187
3,296
5
300
3,601
9,788
–
4,0 00
4,0 00
5,4 82
1 83
–
5,665
9,665
TO TA L E QUITY AND LIABILITIES
48,268
44,245
Th ese f inan ci al stateme nts were app roved an d au thorised for issue by t he board of director s
on 2 7 October 2015 and were s ign ed on its beh alf by:
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B van Bilder beek
Director
Co mpany Number: 0 3322928
G Stevens
Director
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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68
C O N S O L I D A T E D
S T A T E M E N T O F C H A N G E S
I N E Q U I T Y
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5
C A L L E D U P
S H A R E
S H A R E
R E T A I N E D
S H A R E
P R E M I U M
B A S E D
E A R N I N G S
T O T A L
£ ’ 0 0 0
C A P I T A L £ ’ 0 0 0
A C C O U N T
P A Y M E N T S
£ ’ 0 0 0
£ ’ 0 0 0
R E S E R V E
A s r e s t a t e d
£ ’ 0 0 0
BALA NCE AS A T 30 JU NE 201 3
8 2 8
1 7 , 2 88
2 , 7 4 1
6, 33 5
27 , 192
Total comprehensive
income for the year
Share based payment s
reserve charge
Transfer of sha re based
payments reserve charge
on exercise of opti ons
Tax credi t recognised
di rectly in equity
Issue of ordinary shares
(net of issue costs)
Net deferred tax movement
on share opti ons
Di vidends
–
–
–
–
–
–
–
–
2 1
2 , 85 0
–
–
–
–
–
2 6
(5 9 9)
–
–
3 0 8
–
4,5 7 1
4,57 1
–
5 9 9
4 7 5
–
–
(8 63 )
2 6
–
47 5
2,8 71
30 8
( 86 3)
BALA NCE AS A T 30 JU NE 201 4
8 4 9
2 0 , 1 38
2 ,4 76
1 1, 11 7
34 , 580
Total comprehensive income
for the year
Share based payment s
reserve charge
Transfer of sha re based
payments reserve charge on
exerci se of options
Tax credi t recognised directly
in equi ty
Transfer of share based
payments reserve charge on
lapse of options
Issue of ordinary shares
(net of issue costs)
Net deferred tax movement on
share opti ons
Di vidends
–
–
–
–
–
–
–
–
–
–
–
–
–
3
–
–
5 , 42 9
5,4 29
–
2 1
(1 )
–
–
1
2
(3 8 )
3 8
–
(5 9 6 )
–
–
–
(9 59 )
21
–
2
–
3
( 59 6)
(959 )
BALA NCE AS A T 30 JU NE 201 5
8 4 9
2 0 , 1 4 1
1 , 8 6 2
1 5 , 6 2 8
38, 4 8 0
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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C O N S O L I D A T E D
S T A T E M E N T O F
C A S H F L O W S
69
CASH FLOW S FROM OPERA TI NG A CTI V I TI ES
Profi t before taxation
Adjustment s for:
Depreciation, amortisation a nd im p ai r m e nt c har g e s
Loss on disposal of property, p lan t and e q u ip m e nt
Charge for share based paym e nt s
Investment income
Interest expense
Share of result in associ ate
Gain on di sposal of associate
Di vidend received from asso ciat e
Changes in working capit al:
(Increase)/decrease in i nven t or i e s
Increase in trade and other r e ce ivab l e s
(Decrease)/increase in trade and o the r p ayab l e s
CASH GENERATED FROM OPER A TI NG A C TI V ITI ES
Income taxes pai d
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5
N O T E S
2 0 1 5
£ ’ 0 0 0
5 , 93 8
3 , 88 1
2 0
2 1
(5 1 2 )
1 8 2
(2 3 6 )
(3 5 2 )
3 7
(1 , 29 5 )
(8 3 8 )
(1 , 67 8 )
5 , 16 8
(3 1 8 )
2 0 1 4
£ ’ 0 0 0
5,37 5
3 ,405
9 5
2 6
(5)
12 4
(2 15)
–
–
7 76
(1,54 1)
2 56
8,2 96
(35 3)
NET CASH GENERA TED F ROM OP ER A TI NG A CTI V I TI ES
4 , 85 0
7,94 3
CASH FLOW S FROM INVESTI NG A C TI V I TI ES
Acquisition of associate
Proceeds from disposal of associ ate
Acquisition of subsi diary
Purchase of intangibl e assets
Purchase of property, plant an d eq u i p m en t
Proceeds of sale of property, pl ant and eq u i p m en t
Interest received
–
1 , 49 2
(7 )
(3 , 5 41 )
(7 , 01 6 )
5 6
4
(726 )
–
–
(2,40 3)
(3,01 6)
57
5
NET CASH USED IN INVESTIN G AC TIV I TI ES
(9 , 0 12 )
(6,08 3)
CASH FLOW S FROM FINA NCI N G A CT IV IT IE S
Drawdown of loans
Repayment of loans
Net proceeds from issue of new ordinary share s
Proceeds from share options exercised
Interest paid
Equity dividends pai d
NET CASH GENERA TED F ROM FI NA N CIN G ACT IV I TI ES
NET (DECREASE)/INCREASE IN CA SH A ND CASH EQ UI VA LE NT S
2 1
Cash and cash equivalents at 1 Ju ly 2 01 4
2 , 50 0
(2 2 5 )
–
3
(1 8 2 )
(9 5 9 )
1 , 13 7
(3 , 0 25 )
6 , 35 3
CASH AND CA SH EQU IVA LENT S A T 3 0 JU NE 2 0 1 5
2 2
3 , 32 8
–
–
2,33 0
5 41
(124 )
(863 )
1,88 4
3,74 4
2 ,609
6 ,353
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N O T E S T O T H E
C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
1 . S U M M A R Y O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
Th e fol lo wi ng ac c ou ntin g p olicies have been app lied cons ist en t ly in d ealin g wit h items which
are co nsi dered material i n relation to the financial information.
a . B a s i s o f p r e p a r a t i o n
Th e c on sol idated fin ancial statements have been prepared in accordan ce wit h In te rnational
Fin anc ial Report ing Standards (IF RS) an d in terp reta tions iss ued by t he International
Ac co unt in g Stand ards Bo ard as ad opt ed by the Europ ean Union and th erefore comply with
th e EU IAS Regul ati on and are in accord ance with the Compan ie s Act 200 6.
Th e Direc to rs h ave cons idered those st and ard s and inter pret at ion s, wh ich h ave not been
appl ie d in th e fin ancial statemen ts bu t are relevant to th e Gr ou p’s op erat ion s, that are in
i ssu e bu t not yet effec ti ve and do not cons id er that any will h ave a m ater ial impact on the
future results of the Group.
Th e G roup fi nan ci al s tat ements are pr esent ed in s terling and all value s are rounded to the
ne arest th ousand p ou nds excep t where otherwis e ind icat ed.
Th e fi nanci al i nformat ion has b een prepared und er the h istor ical cost conve ntion except
where fair value adjustments are required.
Th e di rec to rs, h avi ng made app rop riate enquiries , have carefu lly con sidere d th e availability
of wo rkin g c apital alon g with future ord ers an d s atisf ied t hem selve s t hat th e Gr oup has
adequ ate resou rc es t o continue in operational existence for t h e for eseeab le future. The
Gro up con tinu es to adopt the going concern b asis in p rep aring t he financial s tat ements.
Co st of sal es i nc ludes sa lary and r elat ed costs for s ervice per sonn el, an d dep reciation and
refurbi shm ent costs on rental as sets.
b . G o i n g c o n c e r n
Th e Group’s acti vit ies and an outline of th e develop ment s tak in g place in relation to its
pro duct s, s er vi ces an d m arketplace are consid ered in the St rat egic Review on pag es 2 8 to 45
al on g w i th an exp lanat ion of revenue, t rad ing results and cash flows.
No te 23 to the Financ ial Statements sets out th e comp any ’s financial risks and the managem ent
of c apit al ris ks.
At th e year end, th e Gro up had b ank facilit ies of £7.275m co mprising a £5m re volving credi t
fac i li ty r epayable i n Se ptember 2016, a £1m overdraft repayable on de mand, and a te rm l oan
fac i li ty w hic h h ad a bal ance of £1.275m, and which is repayable in quarterly instalm ents of
£ 75 k wi th th e f inal repay ment due b y September 2019.
Po st peri od end, th e Gr oup’s cash p osition chang ed materially with the subscription by Je reh
fo r n ew ordi nary sh are s represen ting 5% of t he issued s hare capit al of P lexus for ci rc a £ 8m
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ne t o f expenses . Furthermore, th e Grou p’s bank facilities have been r enewed with Bank of
Sc otl an d Co rpo rate and compris e of a £5m revolving cr edit facility, a £1m ove rdraft, and the
rem ai nder of th e fi ve year term loan run ning until Septemb er 2019 .
Toget her w ith th e profit able trading of the busines s, these fun ds and facilit ie s ar e anticipated
to pr ov ide su ffic ient funding for th e fores eeable futu re.
Ac co rdi ngly, afte r c areful enq uiry and review of availa ble fin ancial infor mat ion, including
pro jec ti ons of pr ofit ability and cash flows for the p eriod t o 31 O ct ober 20 16, t he Directors
bel i eve that the com pany has ad equate resou rces to con tinu e t o ope rate for t he foresee able
fu tur e and that i t i s therefore app rop riate t o continue to a dopt th e going concer n basis of
acc ou nti ng in the preparation of t he cons olid ated and company fin ancial st at ements.
c . B a s i s o f c o n s o l i d a t i o n
Th e gr oup fi nanc ial statements consolidate the financial s tatem ent s of Plexus Holdings plc
and th e enti tie s it cont rols (its subs idiaries) d rawn up to 30 Ju ne each year. C on t rol comprises
th e powe r t o govern the financial and operat ing p olicies of t he inves tee s o as to obtain
ben efi t fro m i ts ac ti viti es and is ach ieved th roug h d irect and in direct own ership of voting
ri ght s; cu rr en tly exe rc isab le or convertible pot ential voting r ight s; or b y way of contractual
agreem ent. Subs idiar ies are consolid ated from the d ate of th eir acq uisition , being the date
on w hi c h the group obt ains cont rol, and continue to be cons olidat ed u nt il t he d ate that such
co ntr ol ceases. The fi nancial statemen ts of subs idiaries are prepared for the same reporting
ye ar as the parent co mpany, us ing consis tent accounting policies. All inte rcompany balanc es
and t ransact io ns, i nclu ding unrealis ed p rof its ar is ing from intra group transactions, have
been eli m inat ed in fu ll. Unrealised losses are eliminated unle ss the transaction pr ovide s
evi den ce o f an im pairment of the asset tran sferred .
Wi th in t wel ve month s of the d ate of acq uisition of a su bsidiary undertaking a re-assessm ent is
m ade of th e fai r value of the a sset s an d liabilities acq uired in orde r to asse ss any provisional
val ues u sed i n i nit ial accounting .
Th e fin anci al st ate ments of th e Company and it s s ub sid iaries are prepared in sterling (the
fu nc ti onal c ur rency ), w hich is the cu rren cy that bes t reflect s the e conomic substanc e of the
un derl yi ng e vent s and circumstances r elevant to the Group. Transactions and balances i n
fo rei gn cur rencie s are converted into sterling in accord ance wit h t he principles se t forth by
IA S 21 (“The E ffec ts of Changes in Foreig n Exchange Rates”) . Accordingly, transactions and
bal anc es h ave been c onverted as follows:
•
Mone tary ass et s and liabilities – at th e rate of exchan ge applicable at the balance sheet
date; and
•
Inc om e and expen se items – at exchang e rates app licab le as of the date of recognition
of th ose item s. Non-monetary items are conver ted at the rate of exchange used to
co nvert th e rel ate d b alance sheet items i.e. at the tim e of t he transact ion. Exchange
gai ns and lo sses from the aforementioned conversion are recognise d in the consoli date d
st atem ent o f c om prehensive in come.
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d . A s s o c i a t e
An as so ci ate is an entity over wh ich the g roup is in a p osition to exer cise sign ificant influence
th rou gh parti cip ation in the finan cial and operating policy decisions of t h e inves te e, but that
i s not a su bsi di ary or a jointly controlled entity.
Th e re sul ts, assets and liab ilities of an as sociate are incorp orated in t he se financial
st atem en ts usin g t he eq uity met hod of accoun ting . Und er t he equ ity met hod , th e investment
i n an a ss oci ate e ntity i s carried in the b alance sheet at cos t, plu s pos t-acq uisit ion changes
i n t he gro up’s share o f n et ass ets of t he as sociate, less dist rib ut ion s received and less any
i mpai rm ent in valu e of t he investment. Th e group in come s tat emen t r efle ct s t he g roup’s share
of t he resul ts aft er tax o f the as sociate ent ity. The g roup s tat emen t of oth er comprehensive
i nco m e refl ec ts t he group’s share of any in come and ex pen se r ecog nised by th e associate
en ti ty out side p rofi t an d loss.
Fin anc ial statem ents of associate entities are prep ared for th e same r eport ing year as the
gro up. Where n ec es sary, ad justmen ts are mad e to thos e fin ancial st at emen ts t o bring the
acc ou nti ng poli ci es u se d into line with those of t he g rou p.
Un real is ed gai ns on transactions between the grou p and its associate ent it ies ar e eliminated
to the ext en t of th e group ’s interest in the associat e en tit ies . Un realised los ses are also
el im i na te d unl ess th e t ransaction p rovides ev idence of an imp air ment of t he asse t t ransferr ed.
Th e gr ou p ass es ses investmen ts in ass ociate entities for imp airmen t wh enever events or
ch anges in c irc um s tan ces ind icat e that the carr ying valu e m ay n ot be r ecoverable. If any
su ch i ndi cati on of im pairment exists, the carryin g amou nt of th e invest men t is compared with
i ts recove rabl e amo unt, being t he hig her of its fair value less cost s t o sell and value in use.
Wh ere the c arr yi ng amo unt exceeds the recoverab le amount , th e inves tm ent is written down
to i ts recoverabl e amo unt.
Th e group ceas es to u se the eq uity method of accoun ting on th e dat e from wh ich it no longer
has jo in t c ontr ol ove r, o r sig nificant influen ce in the associate, or wh en th e int ere st become s
he ld for sale.
e . R e v e n u e
Reven ue repr es en ts the amounts (exclu ding valu e ad ded t ax) derived fr om wellhead r entals
and s al es of we llh eads , plus as sociated equ ipment and serv ices .
Income from rental contracts is recognised ov er the period of the rental on a straight-
l in e bas is . I nco me from eq uipmen t sales is recog nised followin g p rodu ct accept ance by the
cu sto m er. Inc ome from services is recognis ed over the p eriod of p erfor mance of the serv ices.
In com e fro m c on struc tio n contracts is recog nised in accord ance with p aragrap h ( n) be low.
f .
I n c o m e t a x e s a n d d e f e r r e d t a x a t i o n
Th e i nc ome tax expe nse for the period comp rises current and deferr ed t ax. Tax is recognised
i n t he in com e st ate ment, excep t to the extent that it relat es t o it ems r ecognise d in other
co mpre hensi ve inco me or d irectly in equ ity. In th is cas e, the t ax is also re cog nised in othe r
co mpre hensi ve inc om e or directly in equ ity, respectively.
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Th e cu rr en t i nc ome tax charg e is calcu lated on the b as is of th e t ax laws enacted or
su bstan tively enact ed at the balance sheet d ate in the count ries wh ere th e company and
i ts su bsi diari es operate and generate t axable income. Manag emen t per iod ically evaluates
pos it io ns taken i n tax returns with res pect t o s ituat ion s in wh ich app licable t ax r egulation
i s su bje ct to i nterpretation. It es tab lis hes p rovisions wh ere ap pr op riat e on the basis of
am oun ts expe cted to be paid to the t ax authorit ies .
Deferred in com e tax is recog nised , using t he liability met hod, on tem porary differ ences
ari si ng betw een the tax b ases of as sets and liab ilities and th eir car rying amounts in the
co nso l idated fin anc ial statemen ts .
Deferred in com e tax is determined using tax rates (and laws) t h at h ave been enacted or
su bstan tively enac te d by the balance s heet d ate and are exp ected t o ap ply wh en the r elated
deferred i nc om e t ax asset is realised or the d eferred income tax liab ility is settled.
Deferred i nc ome t ax assets are recognised only to the ext ent th at it is pr obable that future
taxabl e profi t w ill be availab le against wh ich the temp orary differ ences can be utilise d.
As set ou t in n ote 20 th e group operates a share op tion sch eme. Wh ere t he mar ket price of
th e s hares at the year-end exceeds the opt ion p rice there is a pot ent ial t ax d eduction. This
i s tre ated as a deferre d tax ass et. Th e por tion of the exp ecte d fu tu re t ax d eduction which
i s l ess than or equ al to the associated cumulat ive IFRS2 char ge is recogn ised in the incom e
st atem en t. Th e b alance of the credit is recog nised d irectly in eq uity.
g . G o o d w i l l
Purc has ed goodw i ll (representing the exces s of the fair value of t he cons id erat ion given over
th e fai r val ue of the s eparable as set s acquir ed) arising on b us in ess com binat ions in respect
of acq uis iti ons is c apit alised.
Go odw il l is not am orti sed, it is meas ur ed at cost less any accu mu lat ed imp airment losse s.
Go odw il l i s re vi ewe d for impairmen t at least annually.
Th e recoverable am ou nt of th e good will has b een d eterm in ed on a valu e in us e basis.
Th e key ass umpt ions on which th e valuation is b ased are t hat :
•
•
•
In dustry acc ept ance will res ult in continued growth of the business;
Pri ces wi l l rise wi th inflation; and
St aff wage in flati on will be hig her th an general inf lation but will n ot r is e in line with
sal es .
Th ese assum ptions w ere determined fr om the director s’ k nowledg e an d e xp erience .
Th e cas h fl ows are b ased upon an 11 year period which is t he p eriod cover ed b y the re levant
pate nts , and, in acc ordance with his torical tren ds and cur ren t expect ations , a revenue
gro wt h rate of 5 -10% has been applied to periods beyond th e cur ren t b ud get . T he company ’s
Weigh ted Averag e Cost of Capital for d iscounting pu rp oses has been measu red at 8.6 5%. The
cas hfl ow s are bas ed u pon approved b udg ets for the followin g 12 mont hs , b eyond this they
are bas ed upon man age ment ’s exp ectations of fut ure developm ent s.
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Managem ent reg ul arly assesses the s ensit iv ity of t he key a ssu mpt ions and th e probability
th at any o f th em w ould change to the deg ree that th e carry in g value would exceed the
rec overabl e am oun t.
h .
I n t a n g i b l e a s s e t s a n d a m o r t i s a t i o n
Pat ents are re co rde d in itially at cost and amortis ed on a s t raig ht line b asis over 20 year s
w hi ch re prese nt s th e l ife of the patent. The Group op erates a policy of cont inual patent
en hanc ement i n or der that technolog y enhancements an d m od ificat ion s ar e incorporated
w it hi n th e r egi st ered patent, thereby protecting the valu e of t echn olog y advances for a full
2 0 year perio d.
In tel lec tual Pr ope rty rig hts are initially record ed at cost an d amor tised over 2 0 years on
a strai ght l i ne bas is. Th e tech nology defined by the In tellect ual Pr operty is believed to be
abl e t o generate income streams for the Gr oup for many years ; key Int elle ct u al Pr operty
i s prot ec ted by pat en ts ; the lowest common denominator in ter ms of econom ic life of the
i ntan gibl e assets is the l ife of the original patents an d th erefor e th e life of t he Inte llectual
Prop erty has be en m atch ed to the remaining life of t he p aten ts pr otect ing it.
Develo pm en t expe ndi tu re is capitalised in resp ect of develop men t of pat ent able technology
at c ost i ncl udi ng an all ocation of own time when s uch exp end itu re is incu rre d on separately
i dent ifi abl e t ec hnol ogy and its futu re recoverability can reason ably b e regar ded as assure d.
Any expenditu re carri ed forward is amortised on a straigh t lin e b asis over it s us eful economic
l ife, wh ic h th e di re ct or s consider to b e 20 years.
Co m puter s oftwar e i s amortised over 2 to 5 years on a straigh t lin e b asis.
In al l cases the amortis ation p eriod r epresent s t he exp ected us efu l life of th e as set.
Am or ti satio n is c harged to the Admin is trative Expenses lin e of t he Stat emen t of C ompr ehensive
Income.
E xpendi ture on re se arc h and d evelopment, which does not me et t he cap it alisation cr iter ia, is
w ri tt en off to th e Statement of Comp reh ensive Income in th e p eriod in which it is incur red.
Th e carryi ng val ue of i ntangible ass ets is reviewed on an on-goin g b asis by t he dir ector s
and, where appr opr iate, provis ion is mad e for any ind icat ion of imp air men t in value . Wher e
i mpai rm ent ari se s, the recoverab le amou nt of the as set is es timat ed in ord er t o d eter mine the
exten t of the i mp airm ent loss (if any). Wh ere it is not pos sible t o est imat e t he recoverable
am oun t o f an i ndi vidual asset, an est imat e is mad e of th e recoverab le amou nt of the cash-
gen erati ng un it to w hi ch the a ss et b elon gs.
Th e r ecoverabl e am oun t is the h igher of fair valu e les s cost s t o sell an d value in use. In
ass ess in g val ue in us e, t he est imated futu re cash flows are discoun te d t o t heir p rese nt value
us in g a disco unt rat e t hat reflects the curr ent market as sess men ts of th e t im e value of
m oney and th e r isks s pecific to the ass et. If the recoverab le amou nt of an asse t is estimated
to be less than its carrying amount, the carrying amou nt of th e as set is r educed to its
rec overabl e am oun t.
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Th e key ass umpt ions on which th e valuation is b ased are t hat :
•
•
•
In dustry acc ept ance will res ult in continued growth of the business;
Pri ces wi l l rise wi th inflation; and
St aff wage in flati on will be hig her th an general inf lation but will n ot r is e in line with
sal es .
Th ese assum ptions w ere determined fr om the director s’ k nowledg e an d e xp erience .
Th e cash flo ws ar e based upon an 11 year period , the remainin g life of t he Intellectual
Prop erty, and a r evenue growth rate of 5-10% h as b een applied t o p eriods be yond the
cu rren t budget. The c ompany ’s Weighted Average Cos t of C apital for d is cou nt ing purposes
has been measured at 8.65%. The cashf lows are bas ed up on app roved b ud gets for the
fo ll o wi ng 12 m on ths , beyond this th ey are based u pon man agem ent ’s expect ations of future
develo pm en ts .
It wo ul d requi re a s ub stantial movement (over 30% ) in any of th ese assu mp tions before
th ere wo ul d be any i mpairment to in tan gib le assets.
An im pair ment l os s is recognis ed immed iately in the Stat ement of Comp reh ensive Income.
i .
P r o p e r t y , p l a n t a n d e q u i p m e n t
Prop erty, plant an d equipment are s tat ed at cost les s accu mu lat ed dep reciation. Cost
repre sen ts the c os t o f acq uisition or cons truction, includ in g t he direct cost of financing the
acqu i si tio n or c on stru c tion until the asset comes into use.
Deprec iat ion i s pr ovi ded to write off t he cost or valuation of p roper ty, plan t and equipment
l ess t he e stim ated r es idual value by equ al in st almen ts over t heir est im ate d u seful econom ic
l ives as fol l ow s:
B u i l d i n g s
Over the remaining life of the lease on the land on which the
build ing is constructed
Tenan t im proveme nt s
Over th e remaining life of the lease of the re levant building
E qui pment
7% – 50% per annum
Moto r vehi cl es
20% per annum
Th e expect ed u se fu l lives and residual values of p rop erty, plant and equipme nt ar e r ev ie we d
on an an nual basis and, if necess ary, chang es in useful life or residual value are accounte d
fo r prospect ive ly.
Th e carry ing val ue o f p roperty, plant and eq uip ment is revie wed for im pairment whenever
events or c hanges i n ci rcumstances ind icate th e carry ing value may not be recove rable.
An i tem o f property, pl ant and equip ment is d erecogn ised upon disposal or whe n no future
eco nom i c benefits are expected to arise from the con tinue d use of t he asset. Any gain or
l oss ari si ng on derecognition of th e as set (calculated as the difference betwe en the ne t
di spos al pro ceed s and the carrying amount of the item) is included in t he S tate ment of
Co mpr eh ensi ve Inc om e in the p eriod the item is d erecognised.
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j .
C a s h a n d c a s h e q u i v a l e n t s
Cas h an d c ash equival en ts comprise cash balances and call dep osits . B ank overdrafts that
are repayabl e on d em and form an in tegral part of the Grou p’s cash man agem ent and are
i ncl u ded as a compo nent of cash and cash equivalent s for t h e p urp ose of th e statem ent of
cas h fl ows .
k .
F o r e i g n c u r r e n c i e s
Tra nsac tion s in forei gn currencies are recorded usin g th e rat e of exchan ge r uling at the
date of the transac tio n. Monetary ass ets and liab ilities d en om in at ed in for eign curre ncies
are trans lated us ing th e contracted rate or th e rate of exchan ge r ulin g at t he st atem ent of
fi nan ci al posi ti on date and the g ains or los ses on trans lat ion ar e includ ed in th e Statem ent
of C om pr eh ensi ve In com e.
Th e fun cti onal c urre nc y of the Group is pou nd s ster ling.
l .
L e a s e s
Operati ng lease ren tal s are charg ed to the Statement of Comp reh ens ive In com e on a straight
l in e basi s over t he peri od of the leas e. As sets held un der finan ce leases are recognised as
ass ets of t he Gr ou p at their fair value or, if lower, at the p re sent value of t he minimum lease
paymen ts, each determin ed at the inception of th e leas e. T he corre spon ding liability to the
l esso r is i ncl uded in th e statement of f inancial pos ition as a fin ance leas e ob ligation. Lease
paymen ts are appo rt ioned between f inance charg es and red uct ion of t he leas e obligation so
as to ac hi eve a constant rate of interest on the remain in g balan ce of th e liability. Finance
ch arges are c harged di re ctly against income.
m . I n v e n t o r y
Inve nto ry i s s tat ed at the lower of cost and net realis able value. Cost is det ermined on
a fi rst i n fi rst out basis and includ es all direct costs incu rre d and att ribu tab le production
ove rheads. Net realis able valu e is bas ed on estimated s ellin g p rice allowing for all fur ther
co sts t o com pletio n and dispos al.
n . C o n s t r u c t i o n c o n t r a c t s a n d w o r k i n p r o g r e s s
Th e am ount of pro fit attributab le to th e s tag e of comp letion of a lon g t erm contract is
rec ogni sed w hen the o utcome of t he cont ract can be fores een wit h re asonab le certainty.
Reven ue for su ch c ontrac ts is s tated at t he cost app rop riate to t heir st age of com pletion plus
attri but abl e pr ofit s, l es s amou nts recognis ed in p reviou s years. Prov is ion is made for any
l oss es as s oon as they ar e for eseen.
Co ntrac t wo rk in pr ogr es s is st ated at cost s incurred , less th ose tran sferred to t he Stateme nt
of C ompr eh en si ve I nc ome, after deduct ing for eseeable los ses an d paymen t s on account not
m atch ed w i th r evenue.
Co ns truc ti on w ork in progress is includ ed in d ebtors and represent revenue recognised in
exc ess of pay ments on accou nt. W here p ay ments on account exceed revenue a pay ment
rec ei ved on acc ou nt is establis hed and included within cred itors.
Th e s tage o f comp leti on for con tract s is d etermined according t o the le ve l of pr ogre ss of
eac h i tem that is in clude d in the contract and the estimated cost to com plet e.
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o . P e n s i o n s
Th e G roup offers a c on tributor y Group stakeholder p ension s ch eme, int o wh ich t he G roup will
m ake matc hin g co ntrib utions up to a pr e-ag reed level of base salary; th e sch eme is open to
exec uti ve di rectors an d permanent employees. Director s may choose to have contributions
pai d in to per sonal pe ns ion p lans.
p . D i v i d e n d s
Di vi dends ar e rec ogn ised when they become legally payab le. In t he cas e of int erim dividends
to equi ty shar eh ol ders , this is when th ey are paid. In t he cas e of final d ivid ends, this is
w hen approved by th e shareholders at th e AGM . Divid ends u npaid at t he statement of
fi nan ci al po si ti on date are on ly recognised as a liab ility at t hat dat e t o t he extent that
th ey are appro pri atel y authoris ed and are n o long er at th e discret ion of the Company.
Un pai d divi den ds th at do not meet thes e criteria are d isclosed in t h e not es to the financial
st atem en ts.
q . C l a s s i f i c a t i o n o f f i n a n c i a l i n s t r u m e n t s i s s u e d b y t h e G r o u p
In acco rdanc e wi th IAS 32, finan cial instruments iss ued by the Group are treated as equity
(i.e . form i ng part of shareholders ’ fun ds) only to the extent t hat t hey me et the following
tw o c ondi tio ns:
(a)
th ey i n cl ude no c ontractual ob lig ations u pon th e Comp any ( or Group as the case may
be) t o del iver cash or other finan cial assets or to exchang e financial asset s or financi al
l iab il i ti es wi th ano ther party under conditions th at are p otent ially unfavourable to the
Co mpany (or Gr ou p); and
(b)
w here t he ins tr um ent will or may b e settled in the Company ’s own equity instrume nts, i t
i s ei the r a n on-derivative that includes no oblig ation to d eliver a variable number of the
Co mpany ’s ow n equity instruments or is a der ivative that will be se tt led by the Com pany
exc han gin g a fi xed amount of cash or other f inancial as sets for a fixed number of i ts
ow n eq ui ty i nstruments.
To the ext en t t hat this definition is not met, th e p roceeds of issue are classified as
a fi nanc ial liabi li ty. Where the ins trument so class if ied takes the legal form of the
Co mpany ’s own sh ares, the amounts present ed in th ese f ina ncial stat em ents for called
up s hare capi tal and share p remium account exclude am ount s in relation to those
shares.
Fin anc e pay men ts associated with financial liab ilities are dealt with as part of finance
ch arges. Finan ce p ayments associated with f inancial ins trum ents that are classifie d as
part of shar eh old ers’ funds (s ee divid end s policy ), are dealt wit h as appropr iations i n
th e r econc il i ati on of movements in s har eholders’ fund s.
r .
S h a r e b a s e d p a y m e n t s
Th e G roup i ssues share options to d ir ectors an d employees , which are m easur ed at fair value
at the dat e of gran t. The fair value of the equity settled opt ions det er mined at the grant
date is expens ed on a straig ht line b asis over the vesting per iod bas ed on an estimate of
th e n um ber o f opt ion s that will actually vest. Th e Grou p has ad opt ed a St ochastic model
77
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to c alc ul ate the fair value of opt ion s, which enab les th e Total Sh areh old er Retur n ( TSR)
perform anc e condi tion attached to the awards to be fact or ed in to th e fair valu e calculation.
s . M a n a g e m e n t o f c a p i t a l
Th e Gro up’s cap ital is composed of sh are cap ital an d retain ed e arning s along with a share
premium account. The share premium account r epresents amounts received for shar es issued
i n exc ess of t he n omin al share cap ital les s any iss ue cost s.
Th e Group’s obj ec ti ve wh en managin g capit al is to safegu ard its ability to con tinu e as a going
co nc ern so that it c an continue to p rov ide ret urns to s har eh old ers .
Th e Group sets t he amount of cap ital in p roportion to it s asses smen t of t he risks that it
fac es. The Gr oup m an ages the capit al s tructure and makes ad ju st men ts t o it in the light of
ch anges i n e con om ic conditions and t he ris k characteristics of th e u nd erlying ass ets. In order
to m ai ntai n or adj us t the cap ital s tructu re t he Group may adju st th e am ou nt of dividends
pai d or issu e ne w eq ui ty.
t .
S i g n i f i c a n t j u d g e m e n t s m a d e b y m a n a g e m e n t
E sti m ates an d judge ments are contin ually evaluated and are based on hist orical experience
and o ther fact or s, inc lu ding exp ectations of fut ure event s t hat are be lieved t o be reasonable
un der th e ci rc ums tan ces.
u . K e y a s s u m p t i o n s a n d s o u r c e s o f e s t i m a t i o n
E mpl oyee share o pti ons are valued in accord ance with a Stochas tic model and judgement
i s r equired r egard ing th e choice of some of the in pu ts t o t he mod el. W h ere doubts have
exi sted, m anagemen t have g one with the ad vice of exp ert s. Var iat ions in th e e stimated
i npu ts wo uld vary the charg es to the consolidated s tatemen t of compr ehen sive income . Full
deta il s of the m odel and inp uts are pr ovid ed in note 20.
Th e es ti mated li fe of th e Group ’s rental assets for d epreciat ion purposes is of significance
to the finan ci al s tat em ents. The life us ed is with reference to enginee ring e xpe rience of the
probabl e physi cal and commercial lifesp ans of the assets. Change s to these e st im ate s can
res ul t i n si gni fic ant vari ations in the carry ing value and amount s charge d to the consolidated
st atem ent o f c om preh en sive income in sp ecif ic p eriods .
Th e esti mat ed life of th e Group’s In tellectual Property is estim ate d wit h refere nce to the
l ifespan of the p atents which p rot ect the knowled g e and th eir forecast income generation.
Ch anges to th es e estim ates can result in sig nificant variations in the carrying value and
am oun ts ch arged to th e c onsolidated st atement of comprehensive income in specifi c per iods.
Provi si ons r equ ire m an agement est im ates an d judg ements. Provision has bee n made against
sl ow m oving i nventory b ased up on historical exp erience of the viability of the older parts
as tech nol ogic al im provements have been mad e. C hanges to t hese e st im ates can r esult
i n s ign ifi can t var iati ons in th e carrying value an d amounts charged t o the consolidated
st atem ent o f c om preh en sive income in sp ecif ic p eriods .
Wh en measur in g g ood will and intang ible as sets for impairme nt a range of assumptions ar e
requ ir ed and these are detailed ab ove in the Goodwill and Intangible Asset notes above.
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2 . P R I O R P E R I O D A D J U S T M E N T
Th e c om parati ve s fo r the year end ed 30 Ju ne 2014 have been ad ju st ed to correct the
acc ou nti ng treatme nt in relation t o a tax credit received of £47 5k arising on the exer cise
of sh are opti on s. T hi s cred it was originally recog nised wit hin ‘Income Tax Expense’ in the
Co ns ol i dated S tat em ent of C omprehens ive I ncome wh ereas t he amoun t s hould have been
rec ogni sed dir ec tl y in E quity in accordance wit h IAS 12 In com e Taxes. T his adj ustm ent ar ose
fo ll o wi ng a revi ew o f the Group ’s Ann ual Rep ort and Account s for th e year en ded 30 June
2 01 4 by th e Fi nanc ial Reporting Coun cil’s Con duct C om mittee.
Th e e ffec t o f th e restatement in the year to 30 June 2014 h as been t o in crease the income
tax expe nse wi th in t he Consolidated St atement of Comprehen sive In come by £475k , thereby
redu ci ng pr ofi t after t ax by the s ame amount. This has had t he effect of d ecreasing basic and
di lu ted earn ings p er sh are to 5.44p and 5.21p respectively (bas ic earnin gs per shar e: 6.0 1p;
di lu ted earni ngs per share: 5.75p as orig inally rep orted).
Th is adjustm ent has had no imp act on net ass ets , tax payable, or t he cas h flow statem ent of
th e prior year and no impact on op ening reserves in either t he curr ent or t he pr ior pe riod.
3 . R E V E N U E
B Y G E O G R A P H I C A L A R E A
UK
Europe
Rest o f Worl d
2 0 1 5
£ ’ 0 0 0
10,591
14,4 71
3,46 4
28,5 26
2 0 1 4
£ ’ 0 0 0
9,892
6,905
10,227
27,024
Th e r evenue in format ion above is b ased on the location of the custome r.
4 . S E G M E N T R E P O R T I N G
Th e Gr oup deri ves revenue from th e sale of its POS-GRI P t echn olog y an d associated
pro duct s, t he rent al of wellhead s utilising the POS-GRI P te ch nology and serv ice incom e
pri nc ipal l y der ive d i n assisting wit h the commissionin g and on-going ser vice req uireme nts of
ou r equ ipm en t. Th es e income s treams are all derived fr om t he ut ilis ation of th e technology
w hi ch t he Grou p be lieves is its only s egm en t.
Per IFRS 8 , th e o perating segmen t is bas ed on internal rep ort s abou t comp onents of the
gro up, w hic h are re gu larly reviewed an d u sed by the board of direct ors being the Chief
Operati ng Deci si on Maker (“CODM”).
Al l of the Grou p’s non- current assets are held in t he UK.
79
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Th e fol l ow ing cus to mers each account for more than 10% of th e G roup ’s reven ue:
Cu sto me r 1
Cu sto me r 2
Cu sto me r 3
Cu sto me r 4
Cu sto me r 5
2 0 1 5
£ ’ 0 0 0
4,224
4,175
3,593
3,356
3,342
5 . G R O U P O P E R A T I N G P R O F I T
Prof it o n ordin ary activi ti es before taxat ion is stat ed af ter ch arg in g/( cr edit in g).
D e p r e c i a t i o n o f t a n g i b l e a s s e t s
Am o rti sati on o f i nt angi ble assets:
– In tel l ectual pro per ty rights
– Rese ar ch and deve lop ment
– C om puter software
Operat in g l ease c h arges:
– l an d an d bui ldi ngs
– o th er
For eign currenc y exc hange loss /(g ain)
Los s on di spo sal of pro perty, plant and eq uip ment
Di rect ors’ em ol ume nt s
Inven to ries reco gni se d as expense
Inven to ry w rit e d ow n pr ovision
A u d i t o r s ’ r e m u n e r a t i o n :
Fees p ayabl e t o th e Comp any ’s auditors for:
Th e au dit of the Com pany ’s annual accoun ts
Th e au dit of the Com pany ’s sub sid iary pu rsuant to leg islation
Au di t rel ate d assu ran ce services
Total audi t fe es
2 0 1 5
£ ’ 0 0 0
3,070
329
454
28
554
147
68
20
1,55 2
2,36 8
105
10
30
3
43
2 0 1 4
£ ’ 0 0 0
6 92
2,2 65
3,57 6
1,7 12
1,64 2
2 0 1 4
£ ’ 0 0 0
2,74 8
330
3 08
19
5 21
91
(35)
95
1,456
2,016
200
16
30
2
48
Key m anageme nt are considered to be the Board of Dire ct ors and details of Dir ectors’
rem un eratio n are gi ven in the remun eration rep ort on page 56 and t his form s part of the
fi nan ci al statem ents.
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6 . S T A F F N U M B E R S A N D C O S T S
Th e ave rage num ber of persons, includ ing execu tive d irectors , d ur in g th e year was:
Managem en t
Tech ni cal
Adm i ni strati ve
Th e aggr egat e payr oll costs of thes e persons were as follows:
Wag es and sal aries
So ci al se curi ty c os ts
Pen si on co ntri but ions to d efined contribution plans
Sh are based paym en ts
2 0 1 5
N u m b e r
2 0 1 4
N u m b e r
12
104
38
154
2 0 1 5
£ ’ 0 0 0
10,005
867
443
21
11
1 00
31
1 42
2 0 1 4
£ ’ 0 0 0
9,973
7 49
355
24
11,336
11,101
Detai l s of Di rectors remuneration is given in the remunera tion re port on page 56 and this
fo rm s part o f the fin anc ial statements.
7 .
F I N A N C E I N C O M E
Oth er i nterest
Dere cogni ti on o f fin ancial lia bility
2 0 1 5
£ ’ 0 0 0
4
508
512
2 0 1 4
£ ’ 0 0 0
5
–
5
Th e derec ogni ti on of a financial liability of £508k (2014: nil) relate s at t he end of a contract
w here n o l egal li abi lity remains. This is a n on-cash transaction.
8 .
F I N A N C E C O S T S
On ban k l oans an d overdraft
Oth er i nterest
2 0 1 5
£ ’ 0 0 0
182
–
182
2 0 1 4
£ ’ 0 0 0
119
5
1 24
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82
9 .
I N C O M E T A X E X P E N S E
( i ) T h e t a x a t i o n c h a r g e f o r t h e y e a r c o m p r i s e s :
U K C O R P O R A T I O N T A X :
C urrent tax on i nc om e for the year
A dju stme nt i n respect of prior years
F O R E I G N T A X
C urrent tax on i nc om e for the year
A dju stme nt i n respect of prior years
T O T A L C U R R E N T T A X
D E F E R R E D T A X :
Or igi n ati on an d reve rsal of timing d ifferences includ ing
s hare optio ns
A dju stme nt i n respect of prior years
T O T A L D E F E R R E D T A X
T O T A L T A X C H A R G E
Th e e ffec ti ve rate of t ax is 9% (2014: 15%)
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
A s r e s t a t e d
353
(483)
(130)
958
(350)
6 08
263
9
272
142
286
81
367
509
81
13
94
7 02
(42)
1 44
102
8 04
( i i ) F a c t o r s a f f e c t i n g t h e t a x c h a r g e f o r t h e y e a r
Profi t o n o rdi nary acti vities b efore tax
5,938
5,37 5
Tax on p rofi t at st andar d rate of UK corporat ion tax of
2 0.7 5% (2 014 : 22 .5 %)
E ffects o f:
1,232
1,2 09
E xpe ns es no t d edu ctibl e for tax purposes
187
217
Inc om e fr om and gain on sale of associate not subject
to t ax
Dere cogni ti on o f fin anci al lia bility not subj ect to tax
E ffect of R&D tax cr edi ts
E ffect of change in t ax rate
Tax adju stm en ts on share b ased payments
For eign tax rates
Adj us tm en ts i n respect of prior year
Total ta x char ge
(122)
(105)
(521)
(10)
1
240
(393)
509
(48 )
–
(279 )
(128)
26
–
(193)
804
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83
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
A s r e s t a t e d
( i i i )
M o v e m e n t i n d e f e r r e d t a x l i a b i l i t y / ( a s s e t ) b a l a n c e
Deferred tax ass et at beg inning of year
Ch arge to Statem en t of Comprehens ive Income
Deferred tax movem ent on sha re options recognis ed
i n equi ty
(751)
367
(545)
102
596
(308)
Deferred tax l iabili ty/(asset) at end of year
212
(751)
( i v ) D e f e r r e d t a x l i a b i l i t y / ( a s s e t ) b a l a n c e
Th e de ferred tax l i ability/(asset) balance is made up of the following item s:
Di fferen ce betw een depreciation an d capital allowan ces
Sh are based paym en ts
Tax l oss es
1,60 0
(1,361)
(27)
1,232
(1,956)
(27)
Deferred tax l iabili ty/(asset) at end of year
212
(751)
1 0 . D I V I D E N D S
Ordinary Shares
Int eri m pai d for t he pe riod to 31 Decemb er 2014 of 0.51p
(20 14 : 0.48 p) per sh are
Ordinary Shares
Fin al di vi den d for t he year ended 30 June 2015 of
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
433
407
1 .75 p (20 14: 0.62p ) per sha re
1,564
5 26
Th e propos ed fi nal div idend has n ot b een accrued at the state ment of financial position date
i n acc ordance wi th IFR S.
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R
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1 1 . E A R N I N G S P E R S H A R E
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
A s r e s t a t e d
Profi t a ttri butable to sharehold ers
5,429
4,5 71
We igh ted averag e nu mber of s har es in issue
84,896,300
83,991,918
Di l uti on effe cts of sh are schemes
3,20 5,091
3,7 28,09 8
N u m b e r
N u m b e r
Di l uted wei ghted average numb er of sh ares in iss ue
88,101,391
87,720,016
B asi c earni ngs per s har e
Di l uted earni ngs p er sh are
6.40 p
6.16p
5.44p
5 .21p
B asi c earni ngs per share is calculat ed on the results attribut able t o ordinary shares div ided
by th e w eigh ted averag e number of shares in issue du ring t he ye ar.
Di l uted earni ngs p er sh are calculat ion s includ e additional shares to reflect t he dilutive effect
of em pl oyee sh are sch emes and s hare option schemes .
Th e c omparative year EPS has been restated in accordance wit h note 2 to t he f inancial
st atem ents.
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1 2 . G O O D W I L L
CO ST
As at 1 Jul y 2 013
Addi ti o ns
As at 30 June 2014
Addi ti o ns
A S AT 30 JUNE 2 015
IM PA IRME NT
As at 1 Jul y 2 013
As at 30 June 2014
A S AT 30 JUNE 2 015
NET B OOK VA LUE
A S AT 30 JUNE 2 015
As at 30 June 2014
No te 1(g) provide s information on the Good will.
85
£ ’ 0 0 0
760
–
760
7
767
–
–
–
767
760
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T
S
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1 3 . I N T A N G I B L E F I X E D A S S E T S
I N T E L L E C -
P A T E N T
C O M P U T E R
T U A L
A N D O T H E R
S O F T W A R E
P R O P E R T Y
D E V E L O P -
£ ’ 0 0 0
T O T A L
£ ’ 0 0 0
£ ’ 0 0 0
6,440
–
6,440
–
M E N T
£ ’ 0 0 0
5, 353
2,367
7,720
3,473
190
36
226
68
11,983
2,40 3
14,386
3,541
CO ST
As at 1 Jul y 2 013
Addi ti o ns
As at 30 June 2014
Addi ti o ns
A S AT 30 JUNE 2 015
6,440
11,193
294
17,927
A MO RT ISA TI ON
As at 1 Jul y 2 013
Ch arge for the year
As at 30 June 2014
Ch arge for the year
2,362
330
2,692
329
781
308
1,089
454
149
19
168
28
3,292
657
3,949
811
A S AT 30 JUNE 2 015
3,02 1
1,543
196
4, 760
NET B OOK VA LUE
A S AT 30 JUNE 2 015
3,41 9
9,650
98
13, 167
As at 30 June 2014
3,748
6,631
58
1 0,437
Pat ent and other devel opment costs are in tern ally generated.
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1 4 . I N V E S T M E N T S
In cl uded wi thin th e co nsolidated group accounts are the followin g su bsidiary an d associated
un dertaki ngs:
S U B S I D I A R Y
C O U N T R Y O F
N A T U R E O F B U S I N E S S
P E R C E N T A G E
U N D E R T A K I N G
R E G I S T R A -
T I O N
O F O R D I N A R Y
S H A R E S H E L D
Pl exus Oce an
Scotland
Supply of wellh eads and
100%
Sys tem s Li mi te d
associated equipment for oil
and gas drilling
Pl exus Li mi ted
Scotland
D ormant
Pl exus Hol din gs
USA
Investment Holding
USA, Inc.
Pl exus Oce an
USA
Investment Holding
Sys tem s U S, L LC
Pl exus Deepwater
USA
Dormant
Tech no logi es Li mi ted
100%
100%
100%
100%
Pl exus Response
Turks and
Commercial exploitation of
100%
Ser vic es Lim it ed
Caicos Islands
subsea applications
Pl exus Subs ea
Turks and
Commercial exploitation of
100%
Int erna ti on al Lim it ed
Caicos Islands
subsea applications
Pl exus Oce an
Malaysia
Supply of wellheads an d
100%
Sys tem s (Mal aysia)
associated equipment for oil
Sdn B hd
and gas drilling
Pl exus Oce an
Brunei
Supply of wellheads and
100%
Sys tem s (Bru nei)
Sdn B hd
associated equip ment for oil
and gas drilling
Pl exus Oce an
Singapore
Supply of wellheads and
100%
Sys tem s (Si ngapore )
associated equipment for oil
Pte. Ltd .
and gas drilling
Afrotel Corporation
Turks and
Investment Holding
100%
Ltd
Caicos Islands
A S S O C I A T E
C O U N T R Y O F
N A T U R E O F B U S I N E S S
P E R C E N T A G E
U N D E R T A K I N G
R E G I S T R A -
T I O N
O F O R D I N A R Y
S H A R E S H E L D
K SW E ngi ne er in g
Scotland
Manufacturer of specialis t oil
25% (disposed
Li mi t ed
and gas equipment
of in the year)
Th e gr oup’s investm ents are unlisted .
87
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E
V
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W
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I
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R
E
P
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C
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P
O
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A
T
E
G
O
V
E
R
N
A
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C
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F
I
N
A
N
C
I
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Th e sum m ary fin anci al in formation of the Grou p’s ass ociate, extract ed on a 100% basis from
th e acco unts pr epar ed under IF RS for the year end ed 30 Jun e are as follows :
No n-c urrent As se ts
Cu rren t Assets
No n-c urrent Li abilit ies
Cu rren t Li abi li ties
Reven ue
Profi t a nd to tal com pre hensive income
V A L U E O F A S S O C I A T E I N V E S T M E N T
Inves tm ent i n as soci ate at 30 J une 2014
Sh are of pr ofit of as soci ate in the year
Di vide nd r ec ei ved from associate
Gai n o n di sposal of ass ociate
Proc eeds from dis posal of associate
INVESTM ENT IN ASSOCIATE AT 30 JUNE 20 15
1 1 M O N T H S
1 1 M O N T H S
T O
T O
3 1 M A Y
3 0 J U N E
2 0 1 5
£ ’ 0 0 0
N/A
N/A
N/A
N/A
8,394
944
2 0 1 4
£ ’ 0 0 0
5,223
3,24 1
2,561
2,4 76
8,15 8
862
£ ’ 0 0 0
941
236
(37)
352
(1,492)
–
Th e in terest in ass oc iat e wa s pu rchas ed on 22 July 2013 and disposed of on 25 J une 2015,
hen ce 1 1 mo nths resu lts are d isclosed.
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2
–
–
44
11
–
3,016
–
(535 )
27,101
7,016
–
–
(7)
(54 0)
1 5 . P R O P E R T Y , P L A N T A N D E Q U I P M E N T
B U I L D -
T E N A N T
E Q U I P -
A S S E T S
M O T O R
I N G S
I M P R O V E -
M E N T
U N D E R
V E H I C L E S
£ ’ 0 0 0
M E N T S
£ ’ 0 0 0
C O N S T R U C -
£ ’ 0 0 0
T O T A L
£ ’ 0 0 0
£ ’ 0 0 0
T I O N
£ ’ 0 0 0
CO ST
As at 1 Jul y 2 013
972
Addi ti o ns
Tran sfers
Di spo sal s
2
–
–
353
77
–
–
430
2,505
2,904
(2, 904)
(535)
–
22,594
659
42
24,620
As at 30 June 2014
974
430
25, 393
Addi ti o ns
Tran sfers
Di spo sal s
A S AT
3,405
–
–
2
–
–
1, 544
2,140
(533)
260
2,054
(2, 140)
30 JUNE 2015
4,379
43 2
28,5 44
1 74
48
33,577
DEP RE CIATIO N
As at 1 Jul y 2 013
325
Ch arge for the year
On di spo sal s
As at 30 June 2014
Ch arge for the year
On di spos als
80
–
405
153
–
A S AT
76
50
–
11,028
2,612
(383)
126
13,257
56
–
2, 854
(461)
–
–
–
–
–
–
23
11,452
6
–
29
7
( 3)
2,74 8
( 383)
13,817
3,070
(464 )
30 JUNE 2015
558
18 2
15,6 50
–
33
16,423
NET B OOK VA LUE
A S AT 30
JU NE 2015
3,821
250
12 ,894
17 4
15
17,154
As at 30 June 2014
569
304
12, 136
260
15
13 ,284
89
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S
R
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V
I
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W
S
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E
P
O
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C
O
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P
O
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A
T
E
G
O
V
E
R
N
A
N
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F
I
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A
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1 6 . I N V E N T O R I E S
Raw materi als an d cons umables
Work in progress
Fin is hed goo ds and goo ds for resale
1 7 . T R A D E A N D O T H E R R E C E I V A B L E S
Trade r ec ei vables
Prepaym en ts an d o th er amounts
Th e age in g of trade rece ivables at the year end was:
No t past du e
Pas t due 0-3 0 days
Pas t due 30+ days
2 0 1 5
£ ’ 0 0 0
2,265
124
4,16 2
6,55 1
2 0 1 5
£ ’ 0 0 0
6,562
739
7,30 1
5,24 8
1,02 2
292
6,562
2 0 1 4
£ ’ 0 0 0
1,621
296
3 ,339
5,256
2 0 1 4
£ ’ 0 0 0
5,74 3
720
6,463
2,200
2,646
8 97
5,7 43
Trade and o ther recei vables are class ified as loans and r eceivables and are held at amor tised
co st. Th e c arrying valu e ap prox imates fair value.
1 8 . T R A D E A N D O T H E R P A Y A B L E S
Trade payables
No n trade payabl es and accrued expenses
2 0 1 5
£ ’ 0 0 0
1,430
1,866
3,296
Th e m atur ity o f agei ng of trad e and other payables at the ye ar e nd was:
Due w i thi n 30 d ays
Due i n 3 0 – 90 d ays
Due i n 9 0 days – 6 months
Due i n 6 m onth s – On e year
1,699
870
727
–
3,296
2 0 1 4
£ ’ 0 0 0
1,77 7
3,7 05
5,48 2
2,0 31
568
2,88 3
–
5,4 82
Trade and o ther payab les are class if ied as other f in ancial liab ilities and are held at amor tised
co st. Th e c arrying valu e ap prox imates fair value.
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1 9 . S H A R E C A P I T A L
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
A UTH ORISED :
E qui ty: 11 0,0 00, 000 (2014: 110,000,000) O rd inary shares
of 1 p eac h
1,100
1,10 0
A LLO TT ED, CA LLE D UP AND FULLY PAID :
E qui ty: 84,90 2 ,196 (2014: 84,892,673) Ordin ary sh ares
of 1 p eac h
849
849
S H A R E I S S U E D U R I N G
N U M B E R O F
S H A R E
S H A R E
T H E Y E A R :
S H A R E S
C A P I T A L
P R E M I U M
At 30 June 20 1 4
On 1 2 Fe bru ary 201 5
At 3 0 Jun e 2 015
84,892,673
9,523
84,902,196
£ ’ 0 0 0
849
–
849
£ ’ 0 0 0
20,138
3
T O T A L
£ ’ 0 0 0
20 ,9 87
3
20,141
20,990
Dur in g th e peri od th e Group issued new shares as a res ult of t he following t ransactions:
N U M B E R O F
P R I C E P E R
A G G R E G A T E
T O T A L
S H A R E S
S H A R E
N O M I N A L
A G G R E G A T E
V A L U E
V A L U E
£
£
12 F EB RUA RY 2015
– S hare optio ns
9,523
38.5p
95
3,666
Th e e xcess net proceeds have b een cred ited to the share prem ium account .
2 0 . S H A R E B A S E D P A Y M E N T S
Sh are optio ns h ave been granted t o su bs cribe for ordinary shares, which are exercisable
betw een 20 06 and 202 5 at prices rang ing f rom £0.385 to £ 1. 18. At 30 Jun e 201 5, the re were
4,07 7,73 9 o ption s ou ts tanding.
Th e C om pany h as an un approved s hare opt ion s cheme for the direct or s an d emp loyees of the
Gro up. Optio ns are exercisab le at the qu oted mid-market pr ice of th e C ompany ’s share s on
th e dat e of grant. The op tions may vest in three eq ual p ortions , at th e end of each of three
ass ess men t perio ds, provided t hat the op tion holder is st ill em ployed b y t he G roup at vesting
date an d that the Total Sharehold er Retu rn ( TSR) per forman ce con ditions are satisfie d.
Opti on s that do n ot m eet the TSR criter ia at the f irst available vest ing dat e may vest at the
en d of th e co mpl et e assessment period, p rovided that t he compou nd ed TSR per form ance is
m et ove r t he co m plete assessment p eriod. Vested but un exer cis ed op tions ordinar ily expire
on t he tent h ann ive rs ary of the dat e of g rant. The option s a re equ ity settled .
On 9 Jul y 2 0 15 th e directors approved an amen dmen t to t he ru les of t he scheme such
th at th e C ompany is permitted to ex tend the exercise p eriod for op t ion s gran ted under the
91
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A
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R
E
P
O
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T
C
O
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P
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A
T
E
G
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R
N
A
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F
I
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A
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C
I
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sc hem e by a furth er te n years. Subsequently on 9 July 2015 th e Comp any en te red into dee ds
of amen dment w ith Ben van Bild erb eek, Graham Steven s, C raig Hen drie, J. Jeffrey Thrall and
on e em ploye e in res pect of options grant ed to t hem on 9 D ece mber 20 05 u nd er t he scheme,
to en able each hol der to exercise these p articular options up u nt il 8 Decemb er 2025, subject
to al l other term s of th e scheme rules.
Deta il s of the s hare opt ions out st and ing during t he year are as follows:
N O O F
2 0 1 5
N O O F
2 0 1 5
S H A R E S
W E I G H T E D
S H A R E S
W E I G H T E D
A V E R A G E
E X E R C I S E
P R I C E
A V E R A G E
E X E R C I S E
P R I C E
Ou tst anding at the beginning
of t he peri od
4,172,540
0.53 5,300,522
0.52
Gran ted durin g the peri od
Lapse d due to fai l ur e to meet
TS R c rit eria during th e period
For fei ted durin g t he pe riod by
–
–
–
–
–
–
l eavi n g empl oyme nt
(85,278)
0.56
(24,389)
E xerci s ed duri ng the period
(9,523)
0.385 (1,103,593)
Ou tst andin g at the en d of the p eriod 4,077,739
0.53 4,172,540
E xerci s abl e at th e en d of the period 4, 044,405
0.52 4,105,873
–
–
0 .59
0.4 9
0.53
0.52
Th e w ei ghted average share price at the time of exercise was £1.81 ( 2014: £2.77).
Th e aggregate of th e es timated fair values of the op tions g rant ed that are out st andi ng at 3 0
Ju ne 201 5 i s £ 740k (2 014: £755k). The inp uts to the Stochastic model for the computation
of t he fai r val ue of t he o ptions are as follows:
Sh are pric e at date of grant
Opti on exerci se pri ce at date of grant
E xpected vol atil ity
E xpe cte d term
Risk-free interest rate
E xpected divi dend yi eld
varies from
varies from
varies from
varies from
varies from
£0.385 to £1.18
£0. 385 to £1.18
35.7% to 76.6 %
4.5 years to 6.3 year s
0.4% to 5.7%
0% to 1.7%
At the ti me of grantin g t he old er op tions , in the abs ence of sufficient historical shar e pr ice
data fo r the C om pany, expected volatility was calculat ed by analysing the m edian shar e pr ice
vo l at i li ty for si m ilar com panies prior to grant for the period of the expected term . Since then
su ff ic ie nt hist oric al s har e price data h as been built u p to enable the expected volatility to
be base d upon t he Co mp any ’s own sh are price volatility. The expe ct ed term used has be en
adj ust ed based on t he management ’s b est estimate for the effects of non-transferability,
exerc is e restric ti ons an d behav iou ral consid erations. The risk-fre e inte rest rate is taken as
th e i mpl i ed yi eld at grant availab le on governmen t securitie s with a rem aining ter m equal
to th e average expec ted term. At the time of granting the olde r options, no dividends had
been pai d and th e directors did not envisage paying one therefore the dividend yi el d was
0 %. Si nc e then the dir ec tors have introduced a divid end p olicy and at the time of the grants
awarded the expe ct ed divid end yield var ies b etween 1. 2% t o 1.7%.
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Th e St ochas ti c m odel for the fair value of the op tions incorp orates t he T SR crit eria into the
m easu rement of fai r val ue.
Th e G roup has recogn ised an exp ense in the current year of £2 1k (20 14: £26k) towards
equ ity settl ed s hare based paymen ts.
Th e w eight ed average contract ual life of the sh are op tions ou t stan ding at t he end of the
peri od i s 3 years and 11 month s.
2 1 . R E C O N C I L I A T I O N O F N E T C A S H F L O W T O M O V E M E N T I N N E T
C A S H / ( D E B T )
(Decr eas e)/i nc rease i n cash in t he year
Ca sh i nfl ow fro m inc rease in net deb t
Movem ent in n et c ash /(debt) in year
Net cash /(debt ) at start of year
Net (debt)/ cash at en d of year
2 2 . A N A L Y S I S O F N E T C A S H / ( D E B T )
2 0 1 5
£ ’ 0 0 0
(3,025)
(2,275)
(5,300 )
2,353
(2,947)
2 0 1 4
£ ’ 0 0 0
3,7 44
–
3,744
(1,391)
2,3 53
Cas h i n han d an d at bank
B ank l oans
Total
A T B E G I N N I N G
O F Y E A R
£ ’ 0 0 0
6,353
(4,000)
2,353
C A S H
F L O W
£ ’ 0 0 0
(3, 025)
(2,275)
(5, 300)
A T E N D
O F Y E A R
£ ’ 0 0 0
3,328
(6,275)
(2,94 7)
2 3 . F I N A N C I A L I N S T R U M E N T S A N D R I S K M A N A G E M E N T
T r e a s u r y m a n a g e m e n t
Th e Gr oup’s ac tivit ies give rise to a n umb er of differen t finan cial r is ks: m arket r isk ( including
fo rei gn cu rr en cy e xch ange risk, interest rate risk and p rice r is k), cred it risk and liquidity
ri sk. T he Grou p’s m anagement regu larly mon it ors the risk s and p ote nt ial exposu res to which
th e Gr oup i s exp osed and seek s to take action , wher e ap p ropr iat e, t o m in im is e any potential
adverse im pact on the Group’s performan ce.
Ri sk m anagement is carried out by Man agemen t in line with t he Gr oup’s Treas ur y policies.
Th e G roup’s Treas ur y policies cover sp ecific ar eas, s uch as for eig n exch ange r isk, inter est
rate ri sk and i nves tment of excess cas h. The Gr oup ’s p olicy does not p erm it entering into
spe cul ati ve tra ding o f fi nancial ins truments and this p olicy h as be en ap plied t hr oughout the
ye ar.
93
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I
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A
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R
E
P
O
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T
C
O
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P
O
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A
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E
G
O
V
E
R
N
A
N
C
E
F
I
N
A
N
C
I
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A
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( a ) M a r k e t r i s k s
( i ) F o r e i g n c u r r e n c y e x c h a n g e r i s k
Th e G roup i s exposed to foreig n exch ang e risk arisin g from various currencies. In order to
prot ect the Group’s s tat ement of finan cial posit ion fr om moveme nts in e xchange rates, the
Gro up co nverts fo re ign c urrency b alances into sterling on receipt so far as t hey wi ll not be
us ed fo r fu tu re paym ents in the foreign currency.
Th e Group careful l y m on itors the economic and political situation in the count ries in which
i t opera tes to ens ur e ap propriat e action is taken t o minimise any foreign currency exposure.
Th e Group’s m ain forei gn exchange risk relates to movem en ts in t he sterling/US dollar and
st erl in g/eur o e xch ange rates. Movements in these rates imp act the translat ion of US dollar
and e uro den om inat ed net assets .
As th e Gr oup d oes not use foreig n exchang e hedg es, the consolidat ed state ment of
co mpr ehensi ve inc ome would be affected by a gain/loss of approxim ately £241k (20 14:
£ (4 8)k) by a reasonab ly possib le 10 p ercent age point fluctuat ion down/up in t he e xchange
rate betw een st er lin g an d the US d ollar, and by a g ain/loss of approxim ately £79 k ( 2014:
£ 18 k) by a r eas on ably possib le 10 p ercent age p oin t fluctu ation down/up in t he exchange
rate be tween sterli ng an d the euro, b y a gain/loss of app roxim ate ly £38k (2014: £18 k) by a
reas onabl y po ssibl e 10 percentag e p oin t f lu ctuat ion d own/up in the exchange rate betwee n
st erl in g an d the Malaysi an Ringg it.
( i i ) I n t e r e s t r a t e r i s k
Th e G roup fina nc es its operations through a mix ture of ret ain ed pr ofit s and b ank bor rowings.
Th e Group borrows i n sterling at f loat ing rates of interes t.
Th e Group is als o expo sed to interest rat e risk on cash held on d eposit . Th e G roup’s policy
i s to m axi mi se the re tu rn on cash d epos its whilst ens ur in g th at cash is d eposited with a
fi nan ci al in stit utio n with a credit rating of ‘AA’ or b etter.
Th e c ons ol i dated income statement wou ld be affected by gain /los s £ 48k (2014 : £40k ) by
a reas onably possi ble 1 percentage point change d own/u p in LIB OR in te rest rat es on a full
ye ar bas is .
( i i i ) P r i c e r i s k
Th e Grou p is n ot e xposed to any s ignif icant p rice risk in relat ion t o it s finan cial instruments.
( b ) C r e d i t r i s k
Th e Gr oup’s c re dit ris k primarily relates to its trade r eceivab les . Resp onsib ility for managing
cr edit risk s l ies w it h th e Group’s managemen t.
A c ust om er evalu ation is typically obt ained from an ap p rop riate cr edit rat ing ag ency. Wher e
requ i red, appr opriat e trade fin ance ins truments s uch as lett ers of cre dit, bond s, guarante es
and c redi t i nsu ran ce w i ll be used to manage cred it r is k.
Th e G roup’s m ajor c us to mers are typ ically large compan ies wh ich h ave str ong credit ratings
ass ign ed by int er national credit rat in g ag encies. Wh ere a cus tome r d oes not h ave sufficiently
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st rong c redit rat ing s, alternative forms of security such as th e trad e fin ance instruments
referred to above m ay be obtain ed. The Grou p’s cu st omer base is con cen t rated on a few
m ajo r com pani es but m anag em ent believe that the calibre of t h ese com panies me ans that no
m ateri al cr edi t r isk provision is required.
Managem ent review trade receivables across t he Group based on receivab le d ays calculations
to ass ess per fo rm ance . There is sign if ican t manag ement focus on receivables that ar e
over due. A ll re ce ivable s are with large corporations with g ood cre dit history with which the
ent ity has no t exper ien ced any recoverability issues in the past. No debtor allowance has
been pr ovi ded fo r wi th in the a ccou nts.
Am o unt s depos ited w ith banks an d other f inancial institutions also give rise t o cre dit r isk.
Th is ri sk i s managed by limiting the ag gregat e amou nt of exposure to any such institution by
referenc e to the ir rati ng and by regular rev iew of t hese ratings. The possibility of materi al
l oss in t hi s way is c on si dered unlikely.
Th e c urren cy c om po si tion of trade receivable at th e year end was:
St erl in g
US Dol lar
Euro
Au stral ian Do llar s
( c ) L i q u i d i t y r i s k
2 0 1 5
£ ’ 0 0 0
4,605
1,777
180
–
2 0 1 4
£ ’ 0 0 0
5,37 6
65
108
194
6,56 2
5,743
Th e Gro up has hi st or ic ally financed its operations th rough equ ity finance and bank bor rowings.
Th e Group h as co ntin ue d with its policy of ens urin g that t her e ar e s ufficien t funds available
to me et the expe cted funding requ irements of the Grou p’s op erat ion s and investment
oppo rtu ni ti es. Th e Gro up monitors its liquid ity pos ition th rou gh cash flow forecasting. Based
on th e c urrent out look the Group has su ff icient fund ing in place to me et its fut u re obligations.
95
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96
F i n a n c i a l a s s e t s a n d l i a b i l i t i e s
Th e i nt er es t rat e an d cu rrency profiles of the Group ’s f in ancial ass et s at 30 June were as
fo ll o ws :
F L O A T I N G
N O N -
B O O K
R A T E S
I N T E R E S T
A N D F A I R
£ ’ 0 0 0
B E A R I N G
£ ’ 0 0 0
V A L U E
£ ’ 0 0 0
30 JUNE 2015
Ca sh and li qui d resou rc es
– Sterling
– US Dollar
– Euro
– Malaysian Ringgit
– Singapore Dollars
1,589
560
616
–
–
2,765
30 JUNE 2014
Ca sh and li qui d resou rc es
– Sterling
5,051
– US Dollar
– Euro
– Malaysian Ringgit
– Brunei Dollar
38
72
–
–
–
73
–
381
109
563
–
45
–
1,589
633
616
381
109
3,32 8
5,051
83
72
1,142
1,142
5
5
5,161
1,192
6,353
At 3 0 Jun e 201 5 th e Group had £3,328k of cash. The averag e rat e of interest e arne d in the
ye ar is o n a flo atin g rate basis and ranged b etween 0% and 0.1% on sterling de posits.
Ca sh i s categor ised as l oans and receivables .
Th e Grou p has faci liti es of £7, 275k that are secured by a fixed and floating charge over the
ass ets of the G roup. At 30 June 2015 the Grou p had drawn £6,275k on t hose facilities. The
i nter est payabl e i s o n a floatin g rate b asis and rang ed b etween 3.0% and 3.1% in the year.
Th e facil ity c omp rises of a £5, 000k r evolving cred it facility repayable in Septe mber 2016, a
bal anc e of £1,27 5k ou ts tanding on a term loan repayab le over the period to September 2019
and a £ 1,00 0k over draft repayab le on d emand .
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Th e i nterest rate an d c urrency profiles of the Group ’s finan cial liabilit ies at 30 J une 2015
are as foll ow s:
F L O A T I N G
N O N -
B O O K
R A T E S
I N T E R E S T
A N D F A I R
£ ’ 0 0 0
B E A R I N G
£ ’ 0 0 0
30 JUNE 2015
B ank revo lvi ng credi t facility – Sterlin g
B ank term l oan – S terling
5,000
1,275
30 JUNE 2014
B ank revo lvi ng credi t facility – Sterlin g
4,000
–
–
–
V A L U E
£ ’ 0 0 0
5,000
1,27 5
4,000
Matur ity o f Fin anc ial Liabilities:
D U E
D U E
D U E
W I T H I N
B E T W E E N
A F T E R
T O T A L
£ ’ 0 0 0
2 – 5
5 Y E A R S
30 J UNE 2015
B ank revol vi ng credit facility – Sterling
B ank term l oan – S terling
Total
30 J UNE 2014
1 Y E A R
£ ’ 0 0 0
–
300
300
Y E A R S
£ ’ 0 0 0
5, 000
975
5,975
B ank revol vi ng credit facility – Sterling
–
4, 000
£ ’ 0 0 0
–
–
–
–
5,000
1,27 5
6,27 5
4,000
B ank borrow ings ar e other financial liab ilities wh ich are measured at amor tised cost.
Th e c arryi ng valu e app roximates fair value.
2 4 . O P E R A T I N G L E A S E C O M M I T M E N T S / F I N A N C I A L C O M M I T M E N T S
Operati ng l eas e com mi tments wh ere th e group is the les see
The Group has the following total future lease payments under non-cancellable operating leases:
Wi th in o ne year
Wi th in t wo to fi ve year s
Aft er fi ve years
2 0 1 5
£ ’ 0 0 0
334
378
–
712
2 0 1 4
£ ’ 0 0 0
386
1 75
–
561
97
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F
I
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A
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S
T
A
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M
E
N
T
S
Th e Group had no c apit al commitment s as at 30 Jun e 2015 ( 2014: The Group had a capital
co mm i tm en t to ac quire a facility for £2, 400k ).
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98
2 5 . C O N T I N G E N T L I A B I L I T I E S
Th e Group had no c on tingent liab ilities as at 30 Jun e 2015 ( 30 Jun e 20 14: £n il) .
2 6 . P O S T B A L A N C E S H E E T E V E N T S
Su bseq ue nt to t he year e nd , the Company en tered in to a Su bs cript ion Agr eemen t with Jereh
In ternat io nal (Ho ng Kon g) Co. Ltd. (“Jereh”) d ated 1st J uly 20 15. Un der th e Subscription
Ag reeme nt, Jereh su bscribed for 5% of the enlarged sh ar e capit al of th e C ompany; the
nu m ber of sha res s ubsc ribed for was 4, 468,537 at a p rice of 180p pe r sh are. The total
nu m ber o f shares in issue following this subs cription , an d as at t he dat e of this repor t,
i s 89 ,3 70,7 3 3.
2 7 . R E L A T E D P A R T Y T R A N S A C T I O N S
C o n t r o l
At 30 June 2015, Plexus Holdings plc was controlled by Mutual Holdings Limited, a company
incorporated in the Turks and Caicos Islands. Subsequent to the issue of shares as detailed in
Note 26 above, Mutual Holdings Limited no longer owns a controlling interest in the Company.
U l t i m a t e p a r e n t c o m p a n y
At 3 0 Jun e 2 0 15, t he ul timate p arent company was M ut ual Holding s Lim it ed , a company
i nco rporated in t he Turks and C aicos Is lands. Sub sequent to th e issu e of sh ares as detailed in
No te 26 above, Mut ual Hold ings L imited no long er own s a cont rollin g int erest in the Company
and t here is no ul tim ate parent company.
Th e Grou p i s not cons olid ated into M utual H old ing s L im it ed. No ot her g rou p financial
st atem en ts incl ude th e results of th e C om pany. The f inancial s tat emen ts of Mut ual Holdings
Li mi te d are not availab le to the p ub lic.
T r a n s a c t i o n s
Dur in g t he year th e G roup had the following t ransactions wit h relat ed par ties:
Purc hase of goo ds and services f rom O ther Related Parties
Paya bles to Other Relat ed Parties
2 0 1 5
£ ’ 0 0 0
448
29
2 0 1 4
£ ’ 0 0 0
426
–
Oth er rel ated parties were @ SI PP (Pension Trustees) Limited, OF M Holdings Limited and
Pl exus Properti es Int ernational Limited . The transactions rela ted to accomm odat io n, r ent and
rel ate d c harges. @ SIPP (Pension Trus tees) Limited are the trustees of Ben van Bil der be ek’s
pens i on fu nd. OFM Ho ldings L imit ed is a t rust of wh ich Ben van Bilderbe ek’s family ar e
bene fic iar ies. Pl exus Prop erties International L imited is a company in which B en van
B il derbeek’s fam ily are s hareh old ers .
Al l o f t hese tran sac tion s were between either Plex us O cean Syste ms Lim ite d or P lexus Oc ean
Sys tem s In te rn ation al L imited and the relevant related party.
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2 8 . G E N E R A L I N F O R M A T I O N
Th ese fin anci al statements a re for Plex us Holdings p lc (“t he company”) an d subsidiary
un dertaki ngs. Th e company is regis tered , and domiciled , in En gland and Wales and
i nco rporated un der the Companies Act 2006. The nature of t he comp any ’s operations and its
pri nc ipal ac ti vi ti es are set out in the st rateg ic rep ort on pa ge 28 an d t he d ir ector s’ repor t
on pag e 5 0.
99
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100
I N D E P E N D E N T A U D I T O R ’ S
R E P O R T T O T H E
S H A R E H O L D E R S O F
P L E X U S H O L D I N G S P L C
We h ave audit ed
th e parent company
statements in accordance with applicable
fi nan ci al stateme nt s of Plex us Holding s
law and International Standard s on Auditing
pl c for th e year e nded 30 June 2015 which
(UK and Ireland). Those standards require
co mpri se the Parent C ompany St atement
us to comply with the Audit in g Prac tices
of Fi n an ci al Pos iti on , t he Par ent Comp any
Board’s Ethical Standard s for Aud itors.
St atem ent of Ch anges in Eq uity, th e Paren t
Co m pany Stateme nt of Cash Flows and th e
rel ated no te s nu mbered 1 to 13.
Th e
fi nanc ial
reportin g
framewor k
that
has been appl ied in their preparation is
appl ic able l aw an d In ternational F inancial
Report in g Stan dards (IFRSs) as adop ted
by th e Euro pean Uni on and as ap p lied
i n ac cordanc e wit h the p rovision s of th e
Co m pani es Ac t 2 006.
Th is report i s m ade sol ely to the comp any ’s
m em bers, as a body, in accord ance wit h
Ch apter 3 o f Part 1 6 of the C ompan ies Act
2 00 6. Our audit wo rk has been und ertaken
so th at we mi ght s tat e to the comp any ’s
m em bers those matters we are req uired
to s tate to the m in an auditor ’s report and
fo r no othe r purp os e. To the fullest extent
perm i tt ed by law, we do not accep t or
ass um e respons ibil ity to anyon e other th an
th e co mpany and t he co mpany ’s member s as
a body, for our audi t w ork, for this rep ort, or
fo r the o pi ni ons we h ave formed .
S C O P E O F T H E A U D I T O F T H E
F I N A N C I A L S T A T E M E N T S
An audit involves obtaining evid ence about
the amounts and disclosures in the f inancial
statements sufficient to give reasonable
assurance that the financial statements ar e
free from material misstatement, whether
caused by fraud or error. This inc ludes an
assessment of: whether
the accounting
policies are app ropriate to the company ’s
circumstances and have been consistently
applied and adequately d isclosed;
the
reasonableness of significant accounting
estimates ma de by
the director s; and
the overall p resentation of the financial
statements.
We
read all
the
financial and non-
financial
information
in
the Dir ectors’
Report, Chairman’s Statement, Strategic
Report, Corporate Governance Repor t,
Remuneration Committee Rep ort and other
surround information to identify material
inconsistencies with the aud ited Financial
R E S P E C T I V E R E S P O N S I B I L I T I E S O F
Statements and to identify any infor mation
D I R E C T O R S A N D A U D I T O R S
that is apparently materially incorrect based
As expl ai ned m ore ful ly in the Statemen t
knowledge acquired by us in performing the
of Di rectors ’ Respo ns ibilities, t he d irectors
audit. If we become aware of any apparent
are r esponsi bl e for t he preparation of the
material misstatements or inconsistencies
fi nan ci al stat em ents and for being satis fied
we consider the imp lications for our report.
on, or materially
inconsistent with, the
th at th ey gi ve a tru e and fair view. Our
res po ns ibi li ty
i s
t o audit
th e
f inancial
P L E X U S H O L D I N G S P L C A N N U A L R E P O R T 2 0 1 5
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O P I N I O N O N F I N A N C I A L
M A T T E R S O N W H I C H W E A R E
S T A T E M E N T S
R E Q U I R E D T O R E P O R T B Y
In ou r o pini on th e parent comp any f inancial
st atem en ts:
•
gi ve a true and fair view of the state
of th e com pany ’s affairs as at 30 J une
2 01 5;
•
have
been
properly
prepared
in
acc ordan ce wi th IFRSs as ad opted by
th e Eu ropean U nion and as app lied in
acc ordan ce w i th the provision s of the
E X C E P T I O N
We have nothing to report in respect of the
following matters where the Companies Act
2006 requires us to report to you if, in our
opinion:
•
adequate accounting records have not
been kept, or returns adequate for
our audit have not been received from
branches not visited by us; or
Co m pani es Ac t 2 006; and
•
the
parent
company
f inancial
•
have been prepared in accordance with
th e requ ir em ent s of the Companies Act
2 00 6.
statements are not in agreement with
the accounting records and returns; or
•
certain
disclosures
of
director s’
remuneration sp ecified b y law are not
Opi ni o n on other m atter prescribed b y the
made; or
Co m pani es Ac t 2 006
In o ur opi ni on th e in formation given in the
Di rect ors’ Report an d Strategic Rep ort for
th e fi nanc ial year for which the f inancial
•
we have not received all the information
and explanations we require for our
audit.
st atem en ts are prepare d is cons isten t with
O T H E R M A T T E R
th e fin anci al stat em en ts.
We have reported separately on the group
financial statements of Plexus Holdings plc
for the year ended 30 June 2015.
Matthew Stallabrass
Senior Statutory Auditor
for and on behalf of
Crowe Clark Whitehill LLP, Statu tory Auditor
London
27 October 2015
101
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102
P A R E N T C O M P A N Y
S T A T E M E N T O F
F I N A N C I A L P O S I T I O N
N O T E S
A SSE TS
Int angi ble assets
Investments
TO TA L NO N- CURR ENT ASSETS
Trade an d o th er r ec ei vables
Ca sh at bank and in h and
TO TA L CU RRENT A SSETS
TO TA L A SSE TS
EQ UI TY AND L IA BILITIES
Ca ll ed up share cap ital
Share premium account
Sh are based paym en ts reserve
Retai ned ear ni ngs
TO TA L E QUITY AT TR IBUTABLE TO EQUITY HOLDERS
O F TH E CO MP A NY
LIA B IL ITIES
Deferred tax l iabili tie s
TO TA L NO N- CURR ENT LIABILITIES
Trade an d o th er payable s
Cu rren t in com e tax l i abilities
TO TA L CU RRENT LI AB ILITIES
TO TA L L IAB ILI TIES
4
5
6
9
8
8
7
A T 3 0 J U N E 2 0 1 5
2 0 1 5
£ ’ 0 0 0
12,450
8,294
2 0 1 4
£ ’ 0 0 0
9,700
8,294
20,744
17,994
4,57 5
9
4,222
786
4,584
5,008
25,3 28
2 3,002
849
849
20,141
2 0,138
864
2,689
892
330
24,543
2 2,209
595
595
190
–
190
785
147
147
64 6
–
646
793
TO TA L E QUITY AND LIABILITIES
25,328
2 3,002
Th ese f inan ci al stateme nts were app roved an d au thorised for issue by t he board of director s
on 2 7 October 2015 and were s ign ed on its beh alf by:
B van Bilder beek
Director
Co mpany Number: 0 3322928
G Stevens
Director
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P A R E N T C O M P A N Y
S T A T E M E N T O F
C H A N G E S I N E Q U I T Y
103
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5
CALLED
SH ARE
SH ARE
RETAINED
TOTA L
UP SH ARE
PREMIUM
BASED
EARNINGS
£’000
CAPITAL
ACCOUNT
PAYMENTS
£’000
£’000
£’000
RESERVE
As restated
B AL ANCE AS A T 30 JUNE 201 3
828
1 7,28 8
Total c ompreh en si ve i ncome
fo r the year
Sh are based paym en ts
res erve c harge
Tran sfer of sh are bas ed payments
res erve c harge on exer cise of options
Tax cr edi t reco gni sed directly in equity
–
–
–
–
–
–
–
–
Is sue o f o rdi nar y sh ares
21
2,850
Net deferred t ax m ove ment on
sh are opti ons
Di vide nds
–
–
–
–
£’000
9 30
(6 78) 1 8,36 8
–
1,529
1,529
26
–
26
(214)
–
–
150
–
214
128
–
1 28
–
2,8 71
–
150
(863)
(863 )
B AL ANCE AS AT 3 0 JUNE 201 4
849
20,1 3 8
892
330 22, 209
Tot al co mprehens ive in come
fo r the peri od
Sh are based paym en ts reserve charge
Tran sfer of sh are bas ed payments
–
–
res erve c harge on exer cise of options
–
Tran sfer of sh are bas ed payments
ch arge on l apse of options
–
Is sue o f o rdi nar y sh ares (net of is su e costs)
Deferred tax movem ent relating t o
sh are opti ons
Di vide nds
–
–
–
–
–
–
–
–
–
–
21
–
(24)
3
(25)
–
3,294
3 ,294
–
–
24
–
21
–
–
– 3
–
(25)
(959)
(959 )
B AL ANCE AS AT 3 0 JUNE 201 5
849
20,1 4 1
864
2 ,689 24, 543
B
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P
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P
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P A R E N T C O M P A N Y
S T A T E M E N T O F
C A S H F L O W S
CA SH FL OW S FR OM O PERATING ACTIVITIES
Profi t b efore taxati on
Adj us tm en ts for:
A mo rtisat ion
C harge for sh are based payments
Investment income
Ch anges i n working cap i tal:
In cre ase in trade an d other receivab les
In cre ase/ (dec re ase ) in trade and oth er p ayab les
CA SH GE NE RAT ED FROM OPERATIONS
Inc om e t axes pai d
A T 3 0 J U N E 2 0 1 5
N O T E S
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
3,71 7
1,775
723
21
578
26
(624)
(104)
(353)
(1,184)
52
(62)
3,536
1,029
–
–
NET CASH GENER A TE D FROM OPERATIONS
3,53 6
1,029
CA SH FL OW S FR OM INVESTING ACTIVITIES
Purc hase of in tan gibl e assets
Interest received
(3,473 )
(2,36 7)
116
104
NET CASH USE D I N INVESTING ACTIVITIES
(3,357 )
(2,26 3)
CA SH FL OW S FR OM FINANCING ACTIVITIES
Net proceeds from issue of new ordinary shares
Proceeds from share options exercised
E qui ty di vi den ds paid
–
3
(959)
2,330
54 1
(863)
NET CASH (USE D IN)/GENERATED F ROM
FINANCING ACTI VITI ES
(956)
2,008
NET (D ECRE ASE )/ INCREASE IN CASH AN D
CA SH E QU IVALE NT S
Ca sh and cash equi valents at 1 July 2014
(777)
786
774
1 2
CA SH AND CA SH EQ UI VALENTS AT 30 JUNE 20 15
9
9
786
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N O T E S T O T H E P A R E N T
C O M P A N Y F I N A N C I A L
S T A T E M E N T S
105
1 . S U M M A R Y O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
Th e fol lo wi ng ac c ou ntin g p olicies have been app lied cons ist en t ly in d ealin g wit h items which
are co nsi dered material in relation to the financial information.
a . B a s i s o f p r e p a r a t i o n
Th e c om pany fin anci al statement s have been prepared in accor dan ce with I nternational
Fin anc ial Report ing Standards (IF RS) an d in terp reta tions iss ued by t he International
Ac co unt in g S tandards B oard as adop ted by the European Union an d t hey ther efore comply
w it h A rtic le 4 of the EU IAS Regulation an d are in accord ance with th e Comp anies Act 2 006.
Th e Direc to rs h ave considered those st and ard s and inter pret at ion s, wh ich h ave not been
appl ie d i n t he fin ancial statement s bu t are relevant to the C ompany ’s operat ions, that are in
i ssu e bu t not yet effec tive and do not cons id er that any will h ave a m ater ial impact on the
fu tur e resu lts of the Company.
Th e Co mpany fi nanc ial statements are p resented in sterling and all values ar e rounded to the
ne arest th ousand p ou nds excep t where otherwis e ind icat ed.
Th e fin anci al in form atio n has b een p rep ared un der th e hist orical cost conven tion.
Th e di rector s, havin g made a pp rop riate enquir ies , believe th at t h e Comp any h as ade quate
res ourc es to c on tinu e in operat ion al exist ence for the fores eeable fut ur e. T he Company
co nti n ues to adopt the going con cern bas is in prep aring t he fin ancial st ate ment s.
b .
I n c o m e t a x e s a n d d e f e r r e d t a x a t i o n
Th e i nc ome tax expe nse for the period comp rises current and deferr ed t ax. Tax is recognised
i n t he in com e st ate men t, excep t to the extent that it relat es t o it ems r ecognise d in other
co mpre hensi ve inco me or d irectly in equ ity. In th is cas e, the t ax is also re cog nised in othe r
co mpre hensi ve inc om e or directly in equ ity, respectively.
Th e cu rr en t i nc ome tax charg e is calcu lated on the b as is of th e t ax laws enacted or
su bstan tively enact ed at the balance sheet d ate in the count ries wh ere th e company and
i ts su bsi diari es operate and generate t axable income. Manag emen t per iod ically evaluates
pos it io ns taken i n tax returns with res pect t o s ituat ion s in wh ich app licable t ax r egulation
i s su bje ct to i nterpretation. It es tab lis hes p rovisions wh ere ap pr op riat e on the basis of
am oun ts expe cted to be paid to the t ax authorit ies .
Deferred in com e tax is recog nised , using t he liability met hod, on tem porary differ ences
ari si ng betw een the tax b ases of as sets and liab ilities and th eir car rying amounts in the
co nso l idated fin anc ial statemen ts .
Deferred in com e tax is determined using tax rates (and laws) t h at h ave been enacted or
su bstan tively enac te d by the balance s heet d ate and are exp ected t o ap ply wh en the r elated
deferred i nc om e t ax asset is realised or the d eferred income tax liab ility is settled.
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Deferred i nc ome t ax assets are recognised only to the ext ent th at it is pr obable that future
taxabl e profi t w ill be availab le against wh ich the temp orary differ ences can be utilise d.
As set o ut i n note 20 of the group accoun ts, the com pany operat es a s hare op tion scheme .
Wh ere t he m arket pri ce of the s hares at t he year-end exceeds t he opt ion pr ice there is a
pot ent ial tax dedu ction. This is treated as a deferred tax asset . Th e p or tion of t he expected
fu tur e t ax deduct ion wh ich is less than or equal to the ass ociat ed cu mulat ive I FRS2 charge
i s rec ognis ed i n the in come st atement . The balance of the cred it is recogn ised dir ectly in
equ ity.
c .
I n t a n g i b l e a s s e t s a n d a m o r t i s a t i o n
Pat ents are re co rde d in itially at cost and amortis ed on a s t raig ht line b asis over 20 year s
w hi ch re prese nt s th e l ife of the patent. The Group op erates a policy of cont inual patent
en hanc ement i n or der that technolog y enhancements an d m od ificat ion s ar e incorporated
w it hi n th e r egi st ered patent, thereby protecting the valu e of t echn olog y advances for a full
2 0 year perio d.
In tel lec tual Pr ope rty rig hts are initially record ed at cost an d amor tised over 2 0 years on
a strai ght l i ne bas is. Th e tech nology defined by the In tellect ual Pr operty is believed to be
abl e t o generate income streams for the Gr oup for many years ; key Int elle ct u al Pr operty
i s prot ec ted by pat en ts ; the lowest common denominator in ter ms of econom ic life of the
i ntan gibl e assets is the l ife of the original patents an d th erefor e th e life of t he Inte llectual
Prop erty has be en m atch ed to the remaining life of t he p aten ts pr otect ing it.
Develo pm en t expe ndi tu re is capitalised in resp ect of develop men t of pat ent able technology
at c ost i ncl udi ng an all ocation of own time when s uch exp end itu re is incu rre d on separately
i dent ifi abl e t ec hnol ogy and its futu re recoverability can reason ably b e regar ded as assure d.
Any expenditu re carri ed forward is amortised on a straigh t lin e b asis over it s us eful economic
l ife, wh ic h th e di re ct or s consider to b e 20 years.
Am or ti satio n is c harged to the Admin is trative Expenses lin e of t he Stat emen t of C ompr ehensive
Income.
E xpendi ture on re se arc h and d evelopment, which does not me et t he cap it alisation cr iter ia, is
w ri tt en off to th e Statement of Comp reh ensive Income in th e p eriod in which it is incur red.
Th e carryi ng val ue of i ntangible ass ets is reviewed on an on-goin g b asis by t he dir ector s
and, w here appr opr iate , p rovision is mad e for any imp airmen t in valu e. It would require a
su bstan tial m ovem en t (over 30%) in the assumptions employed in valuat ion s b efore there
w oul d be any i mp airm en t to in tangible asset s.
d .
I n v e s t m e n t s
Th e i nves tm ent i n su bsi diary and ass ociate u nd ertaking s is st ated at cost less p rovision for
i mpai rm ent. C os t is the amount of cash paid or the fair value of t he con sideration given
to acqu ire the i nves tm ent. Income from such inves tmen ts is recogn is ed on ly t o the extent
th at the Com pany r ec ei ves dis trib ut ion s from accumulat ed p rofits of t he inve ste e com pany
ari si ng aft er th e dat e o f acquis ition. D istributions received in exces s of such profit i.e. from
pre-acquisition reserves are r eg ard ed as a recovery of inves tm ent and are recognised as a
redu ct io n of th e co st o f the inves tment.
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e . C a s h a n d c a s h e q u i v a l e n t s
Cas h an d c ash equival ents comprise cash balances and call dep osits . B ank overdrafts that
are r epayable o n d em and form an in tegral part of th e Comp any ’s cash man agem ent and ar e
i ncl u ded as a compo nent of cash and cash equivalent s for t h e p urp ose of th e statem ent of
cas h fl ows .
f .
F o r e i g n c u r r e n c i e s
Tra nsac tion s in forei gn currencies are recorded usin g th e rat e of exchan ge r uling at the
date of the transac tio n. Monetary ass ets and liab ilities d en om in at ed in for eign curre ncies
are trans lated us ing th e contracted rate or th e rate of exchan ge r ulin g at t he statem ent of
fi nan ci al posi ti on date and the g ains or los ses on trans lat ion ar e includ ed in th e Statem ent
of C om pr eh ensi ve In come.
g . P e n s i o n s
Th e G roup offers a c on tributor y Group stakeholder p ension s ch eme, int o wh ich t he G roup will
m ake matc hin g co ntrib utions up to a pr e-ag reed level of base salary; th e sch eme is open to
exec uti ve di rectors an d permanent employees. Director s may choose to have contributions
pai d i n to perso nal pe ns ion p lans. Prior to 1 July 2007, the G roup offer ed a basic stakeholder
pen si on schem e, int o which the Group d id not make employer con tr ib ut ion s; none of the
di rect ors or em ployee s were memb ers.
h . D i v i d e n d s
Di vi dends ar e rec ogn ised when they become legally payab le. In t he cas e of int erim dividends
to equi ty shar eh ol ders , this is when th ey are paid. In t he cas e of final d ivid ends, this is
w hen approved by th e shareholders at th e AGM . Divid ends u npaid at t he statement of
fi nan ci al po si ti on date are on ly recognised as a liab ility at t hat dat e t o t he extent that
th ey are appro pri atel y authoris ed and are n o long er at th e discret ion of the Company.
Un pai d divi den ds th at do not meet thes e criteria are d isclosed in t h e not es to the financial
st atem en ts.
i .
C l a s s i f i c a t i o n o f f i n a n c i a l i n s t r u m e n t s i s s u e d b y t h e G r o u p
In acco rdanc e wi th IAS 32, finan cial instruments iss ued by the Group are treated as equity
(i.e . form i ng part of shareholders ’ fun ds) only to the extent t hat t hey me et the following
tw o c ondi tio ns:
(a)
th ey i n cl ude no c ontractual ob lig ations u pon th e Comp any ( or Group as the case may
be) t o del iver cash or other finan cial assets or to exchang e financial asset s or financi al
l iab il i ti es wi th ano ther party under conditions th at are p otent ially unfavourable to the
Co mpany (or Gr ou p); and
(b)
w here t he ins tr um ent will or may b e settled in the Company ’s own equity instrume nts, i t
i s ei the r a n on-derivative that includes no oblig ation to d eliver a variable number of the
Co mpany ’s ow n equity instruments or is a der ivative that will be se tt led by the Com pany
exc han gin g a fi xed amount of cash or other f inancial as sets for a fixed number of i ts
ow n eq ui ty i nstruments.
To the ext en t t hat this definition is not met, th e p roceeds of issue are classified as
a fi nanc ial liabi li ty. Where the ins trument so class if ied takes the legal form of the
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Co mpany ’s own sh ares, the amounts p resen ted in t hese f ina ncial stat em ents for calle d
up s hare capi tal and share premiu m account exclud e am ount s in relation to those
shares.
Fin anc e pay men ts associated with f inancial liabilities are dealt with as part of finance
ch arges. Finan ce payments as sociated with financial in strum ents that are classified as
part of shar eh old ers’ funds (see d ividends p olicy), are dealt wit h as appropriations in
th e r econc il i ati on of movement s in sharehold ers’ funds.
j .
S h a r e b a s e d p a y m e n t s
Th e Co mpany is su es share op tions to d irectors and emp loyees, wh ich are meas ured at fair
valu e at th e date o f grant. The fair valu e of the equity settled opt ions de ter mined at the
grant date is expens ed on a straig ht line b asis over the ves ting p eriod b ased on an estim ate
of t he n umber of opt ions that will actu ally vest. Th e Grou p h as adopt ed a Stoch astic mode l
to c alc ul ate the fair value of opt ion s, which enab les th e Total Sh areh old er Retur n ( TSR)
perform anc e condi tion attached to the awards to be fact or ed in to th e fair valu e calculation.
k . K e y a s s u m p t i o n s a n d s o u r c e s o f e s t i m a t i o n
E mpl oyee share o pti ons are valued in accord ance with a Stochas tic model and judgement
i s r equired r egard ing th e choice of some of the in pu ts t o t he mod el. W h ere doubts have
exi sted, man agem ent h ave gone with the advice of exp er ts. Fu ll det ails of t he model and
i npu ts are provid ed in n ote 20 t o th e Grou p accounts.
Th e es ti mated life of th e Company ’s Intellectual Prop erty is es timat ed wit h reference to the
l ifespan o f the patents which p rotect th e kn owled ge an d th eir for ecast income generation.
Wh en m easuri ng Intel lec tual Prop erty for im pairmen t a rang e of as sum ptions are requir ed
and t hese are de tail ed i n the I ntangib le Ass ets note above.
2 . P R I O R P E R I O D A D J U S T M E N T
Th e c om parati ve s fo r the year end ed 30 Ju ne 2014 have been ad ju st ed to correct the
acc ou nti ng treatme nt in relation t o a tax credit received of £12 8k arising on t he exer cise
of sh are opti on s. T hi s cred it was originally recog nised wit hin ‘Income Tax Expense’ in the
Co ns ol i dated S tat em ent of C omprehens ive I ncome wh ereas t he amoun t s hould have been
rec ogni sed dir ec tl y in E quity in accordance wit h IAS 12 In com e Taxes. T his adj us tm ent ar ose
fo ll o wi ng a revi ew o f th e Group ’s Ann ual Rep ort and Account s for th e year en ded 30 June
2 01 4 by th e Fi nanc ial Re porting Coun cil’s Con duct C om mittee.
Th e e ffec t o f th e restatement in the year to 30 June 2014 h as been t o in crease the income
tax expe nse wi th in t he C onsolidated St atement of Comprehen sive In come by £128k , thereby
redu ci ng profi t after t ax by the s ame amount.
Th is adjustm ent has had no imp act on net ass ets , tax payable, or t he cas h flow statem ent of
th e prior year and no im pact on op ening reserves in either t he curr ent or t he pr ior pe riod.
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3 . P R O F I T F O R T H E Y E A R
As pe rm itt ed by s ec ti on 480(4) of t he Companies Act 2006, th e par ent com pany ’s Statem ent
of Co m prehensive Inc ome has not been included in t hese finan cial st ate ment s. The par ent
co mpany ’s profit after tax for the year was £3,294k (2014: pr ofit of £1,5 29k as r estated).
4 .
I N T A N G I B L E F I X E D A S S E T S
CO ST
As at 1 Jul y 2 013
Addi ti o ns
As a t 30 Jun e 20 14
Addi ti o ns
I N T E L L E C T U A L
P A T E N T A N D
P R O P E R T Y
O T H E R
£ ’ 0 0 0
D E V E L O P M E N T
£ ’ 0 0 0
5,086
2,367
7,453
3,473
4,171
–
4,171
–
T O T A L
£ ’ 0 0 0
9,2 57
2,367
11,624
3,473
A S AT 30 JU NE 2015
4,171
10,9 26
15, 097
A MO RT ISA TI ON
As at 1 Jul y 2 013
Ch arge for the year
As at 30 June 2014
Ch arge for the year
833
270
1,103
270
513
308
821
453
1,346
578
1,924
723
A S AT 30 JUNE 2 015
1,37 3
1,274
2, 647
NET B OOK VA LUE
A S AT 30 JUNE 2 015
As at 30 June 2014
2,79 8
3,068
9,652
6,632
12,450
9,700
Pat ent and other devel opment costs are in tern ally generated.
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110
5 .
I N V E S T M E N T S
Su bsi di ary un der taki ngs
As at 1 Jul y 2 013
As at 30 June 2014
As at 30 June 2015
£ ’ 0 0 0
8,294
8,294
8,294
Th e C om pany ’s su bsi diary and as sociated un der takin gs are:
S U B S I D I A R Y
C O U N T R Y O F
N A T U R E O F B U S I N E S S
P E R C E N T A G E
U N D E R T A K I N G
R E G I S T R A -
T I O N
O F O R D I N A R Y
S H A R E S H E L D
Pl exus Oce an
Scotland
Supp ly of wellheads
100%
Sys tem s Li mi te d
and associated
equipment for oil and
gas drilling
Pl exu s Li mi ted
Scotlan d
Dor mant
Pl exus Hol din gs
USA
Investment Holding
USA, Inc.
Pl exus Oce an Sy st em s USA
Investment Hold ing
US, LLC
Pl exu s Deepwat er
USA
Dormant
Tech no logi es Li mi ted
100%
100%
100%
100%
Pl exu s Response
Turks an d
Commer cial exp loit at ion of
100%
Ser vi ces Lim i te d
C aicos Is land s
s ub sea ap p lications
Pl exu s Su bse a
Turks and
Commercial ex ploit at ion of
100%
In ternat io nal Li mi ted C aicos Islan ds
su bsea ap plications
Pl exu s Oc ean Sys te ms Malaysia
Sup ply of wellh eads and
100%
(Mal aysi a) Sdn B h d
associated equipment for oil
and gas drilling
Pl exu s Oc ean Sys te ms Brunei
Supply of wellheads and
100%
(Br une i) Sdn B hd
associated equip ment for oil
and gas drilling
Pl exu s Oc ean Sys te ms Singapore
Supp ly of wellhead s an d
100 %
(Si ngapor e) Pt e. Ltd.
associated equip ment for oil
Af rotel C orporati on
Turks and Caicos Inves tment Hold in g
100%
Ltd
Islands
and gas drilling
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6 . T R A D E A N D O T H E R R E C E I V A B L E S
Recei vabl es du e from group compan ies
Prepaym en ts an d o th er amounts
2 0 1 5
£ ’ 0 0 0
4,472
103
4,57 5
2 0 1 4
£ ’ 0 0 0
4,1 87
35
4,222
Trade and o ther recei vables are classified as loans and receivables and are held at amor tised
co st. Th e c arrying valu e app roximates fair value.
Recei vabl es due from g roup compan ies relat es to an amount due from a subsidiar y which is
no t i mp aired an d carri es no cr edit risk. Prepaymen ts relate t o prepaid am ounts for ser vice s
to be con sum ed over the next 12 months. There is no indication of im pairme nt of any of
th ese amo unts.
7 . T R A D E A N D O T H E R P A Y A B L E S
Trade payables
No n trade payabl es and accrued exp enses
Th e m atur ity o f agei ng of trade and non trade p ayables
at th e year en d was:
Due w i thi n 30 d ays
Due i n 3 0 – 90 d ays
Due i n 9 0 days – 6 months
Due i n 6 m onth s – On e year
2 0 1 5
£ ’ 0 0 0
43
147
190
43
147
–
–
190
2 0 1 4
£ ’ 0 0 0
20
6 26
646
20
42
584
–
6 46
Trade and o ther payab les are class if ied as other f in ancial liab ilities and are held at amor tised
co st. Th e c arrying valu e ap prox imates fair value.
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8 . S H A R E C A P I T A L
2 0 1 5
£ ’ 0 0 0
2 0 1 4
£ ’ 0 0 0
A UTH ORISED :
E qui ty: 11 0,0 00, 000 (2014: 110,000,000) O rd inary shares
of 1 p eac h
1,100
1,1 00
A LLO TT ED, CA LLE D U P AND FULLY PAID :
E qui ty: 84,91 1 ,719 (2014: 84, 892,673) Or dinary shares
of 1 p eac h
S H A R E I S S U E
N U M B E R O F
D U R I N G
S H A R E S
T H E Y E A R :
At 3 0 Jun e 2 014
84,892,673
On 1 2 Febr uar y 2015
9,523
AT 3 0 JUN E 201 5
84,911,719
S H A R E
C A P I T A L
£ ’ 0 0 0
849
–
849
849
849
S H A R E
P R E M I U M
£ ’ 0 0 0
T O T A L
£ ’ 0 0 0
20,138
20,987
4
4
20,142
2 0,991
Dur in g th e peri od th e Group issued n ew shares as a result of t he following t ransac tions:
N U M B E R O F
P R I C E P E R
A G G R E G A T E
T O T A L
S H A R E S
S H A R E
N O M I N A L
A G G R E G A T E
V A L U E
V A L U E
£
£
12 FEB RUAR Y 201 5
– S hare optio ns
9,523
38. 5p
95
3,666
Th e e xcess net proceeds have b een cred ited to the share prem ium account .
9 . R E C O N C I L I A T I O N O F N E T C A S H F L O W T O M O V E M E N T I N N E T C A S H
Movem ent in n et c ash i n year
Net cash at start o f ye ar
Net cash at en d of year
2 0 1 5
£ ’ 0 0 0
(777)
786
9
2 0 1 4
£ ’ 0 0 0
7 74
12
786
1 0 . F I N A N C I A L I N S T R U M E N T S A N D R I S K M A N A G E M E N T
Th e C o mpany ’s ac ti vit ies give rise to a numb er of differen t fin ancial r is ks: mar ket risk
(in cl udi ng fo reign cu rr ency exch ang e risk, int erest rate r is k and pr ice risk), credit r isk
and l i qui dity ri sk. The C omp any ’s manag ement reg ularly monit ors t he r isks an d potential
expos ures to wh ic h the C omp any is exposed and seeks t o ta ke act ion , where appr opriate, to
m in i mi se any potenti al ad verse impact on the C om pany ’s p erfor mance.
Ri sk m anageme nt is carried out by Management in lin e wit h th e C om pany ’s Treasur y policies.
Th e Com pany ’s Treasury p olicies cover specific areas , such as for eign exchan ge risk , inte rest
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rate r is k and investm en t of excess cash . Th e Comp any ’s policy does n ot per mit enter ing into
spe cul ati ve tra ding o f fi nancial ins truments and this p olicy h as be en ap plied t hr oughout the
ye ar.
( a ) M a r k e t r i s k s
( i ) F o r e i g n c u r r e n c y e x c h a n g e r i s k
Th e Com pany i s exp osed to foreign exchang e risk aris ing fr om various cu rr encies. In or der
to prot ect the Com pany ’s statement of finan cial position fr om movemen ts in e xchange rates,
th e Co mpany co nver ts foreign currency b alances in to s terling on receipt so far as they will
no t be used for fut ur e payment s in th e foreig n currency.
Th e C om pany care fully monitors t he econ omic and political sit uat ion in th e coun tr ies in which
i t ope rat es to ensu re approp riate action is taken to minimise any foreig n curr ency exposure .
Th e Com pany ’s m ain foreign exchange r isk relates to movemen t s in t he sterling/US.
Movem ents i n this rat e impacts the tran slation of US d ollar den om in at ed net liabilities.
A reason ably pos si bl e 10% fluctuation up /d own in t he exch ang e rat e bet we en ster ling and
th e US dol lar w oul d res ult in a corresp ondin g gain/loss in t he st at emen t of com prehensive
i nco m e of appr oximat el y £nil ( 2014: £58k).
( i i ) I n t e r e s t r a t e r i s k
Th e Co mpany is als o exposed to inter est rate risk on cas h h eld on d eposit . Th e Company ’s
pol i cy i s to m axim is e t he return on cash dep osits whilst en su ring t hat cas h is de posite d with
a fi nanc ial i nsti tutio n with a credit rating of ‘AA’ or b etter.
( i i i ) P r i c e r i s k
Th e C ompany is n ot exposed to any sig nificant price r isk in relat ion t o it s finan cial instrum ents.
( b ) C r e d i t r i s k
Th e Com pany ’s credit risk primarily relat es to its inter-company loan s and in ter-company
rec eivabl es. Managem ent believe that no ris k p rovision is req uired for imp airment.
Am ou nts depo si ted w it h banks and other f inancial ins titu tions als o g ive rise t o cr edit risk.
Th is ri sk is m anag ed by limiting th e ag g regate amount of exp osur e t o any su ch institution by
referen ce to th ei r rat in g and by reg ular r eview of thes e ratin gs. T he pos sibility of m ater ial
l oss i n this way i s co nsidered unlikely.
( c ) L i q u i d i t y r i s k
Th e Co mpany has h istorically f inanced its operations t hrou gh eq uity finan ce and the flow
of i nt er-c om pany loan r epayments. The Company h as cont inue d wit h its policy of ensuring
th at t here are suffici en t funds availab le to meet the exp ect ed fu nd in g req uirem ents of the
Co m pany ’s operati on s and inves tment opp ort unit ies . The Comp any mon it ors its liquidity
pos it io n th rou gh c ash flow forecastin g. Based on t he cu rren t ou tlook t he C ompany has
su ffi c ien t fu ndi ng in place to meet its future ob ligations.
Th e bank faci li ty p rov ided to th e Group includes a fixed and float in g ch arge over the assets
of th e Com pany.
113
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1 1 . O P E R A T I N G L E A S E C O M M I T M E N T S / F I N A N C I A L C O M M I T M E N T S
Th e Com pany had no c apital commitments as at 30 June 2 015 (201 4: £n il).
1 2 . C O N T I N G E N T L I A B I L I T I E S
Th e Com pany had no c on tingent liabilities as at 30 J une 2015 (201 4: £n il).
1 3 . R E L A T E D P A R T Y T R A N S A C T I O N S
C o n t r o l
At 30 Jun e 20 1 5, Plexu s Hold in gs p lc was cont rolled b y Mu tu al Holdin gs Limit ed, a com pany
i nco rporated in t he Turks and C aicos Is lands. Sub sequent to th e issu e of sh ares as detailed in
No te 2 6 to the group accounts , Mut ual Hold ing s Limited no lon ger owns a cont rolling inte rest
i n the C om pany.
U l t i m a t e p a r e n t c o m p a n y
At 3 0 Jun e 2 0 15, t he ul timate p arent company was M ut ual Holding s Lim it ed , a company
i nco rporated in t he Turks and C aicos Is lands. Sub sequent to th e issu e of sh ares as detailed in
No te 2 6 to the gr ou p accounts, Mu tual Holdin gs Limited n o longe r owns a con tr olling interest
i n the C om pany and there is no ult imate parent company.
Th e Co mpany is not consolidated in to Mutual Hold ings L im it ed . No oth er g roup financial
st atem en ts incl ude th e results of th e C om pany. The f inancial s tat emen ts of Mut ual Holdings
Li mi te d are not availab le to the p ub lic.
T r a n s a c t i o n s
Dur in g th e year t he C ompany had th e following trans actions with relat ed part ies:
Recei vabl es from Su bsi diary Und ertaking s
2 0 1 5
£ ’ 0 0 0
4,472
2 0 1 4
£ ’ 0 0 0
4,1 87
Recei vabl es from S ubs idiary Undert aking s repr esent the balances receivable on loans
provi ded to s ubsidi aries.
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C O M P A N Y I N F O R M A T I O N
115
Di rect ors
Jerome Jeffrey Thrall† (Non-Executive Chairman)
Bernard Herman van Bilderbeek (Chief Executive)
Graham Paul Stevens (Finance Direct or)
Craig Francis Bryce Hend rie ( Techn ical D irector)
Geoffrey Edmund Thompson (Non-Executive Director )
Christopher James Watts Fraser† (Non-Executive Director )
Charles Edward Jones (Non-Executive D irector)
† Memb er of Aud it and Remuneratio n c om mittee s
Regis tered Offi c e
42-50 Hersham Road
Walton-on-Thames
Surrey
KT12 1RZ
Co m pany N um ber
03322928
Co m pany S ecretary
No mi nat ed Advis er an d Broker
Publ i c Rel ati ons
Au di tor
So li c it ors to t he C om pany
Regis trars
Douglas Armour FCIS
Equiniti David Venus Limited
42-50 Hersham Road
Walton-on-Thames
Surrey
KT12 1RZ
Cen kos Securities p lc
66 Hanover Street
Edinburgh
EH2 1EL
6.7.8 Tokenhouse Yard
London
EC2R 7AS
St Brides Partners
3 St Michael’s Alley
London
EC3V 9DS
Crowe Clark Whitehill LLP
St Bride’s House
10 Salisbury Sq uare
London
EC4Y 8EH
Fox W illiams LLP
Ten Dominion Street
London
EC4M 2EE
Ledingham Chalmers LLP
52-54 Rose Street
Aberdeen
AB10 1HA
SLC Registrars
42-50 Hersham Road
Walton-on-Thames
Surrey
KT12 1RZ
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D E S I G N E D B Y
S T B R I D E S P A R T N E R S
P L E X U S 2 0 1 5 ©
C O P Y R I G H T . A L L R I G H T S R E S E R V E D
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