PLEXUS Holdings has blamed a “further material reduction” in revenue on a cautious approach to project funding taken by oil and gas operators.
Shares in the wellhead engineering specialist’ fell six per cent as it said trading conditions remained challenging, but Plexus added that a number of “encouraging” new contracts would be concluded in the year to June 2018.
In a trading update, Plexus said it was pursuing a number of opportunities in the North Sea and overseas, but operators continued to show caution when committing to new capital expenditure and projects.
Plexus added that its efficiency programme, which has already reduced costs to align with a reduced revenue profile, meant the impact on earnings is expected to be less significant for the full year.
Chief executive Ben van Bilderbeek said: “As a result of various project timetables changing, and the expected uplift in exploration activity being slower than anticipated, it is taking longer to for us to see the recovery in Plexus’ order book.
“Whilst this is frustrating, we are convinced that the actions taken by management are prudent and leave the company in a strong position to recover quickly and strongly once activity in the sector resumes.”
The group’s first half revenue fell 44 per cent to £3.8 million. Full year revenue to June 2016 was £11.2m, down from £28.5m in 2015.
Plexus said its financial position remained robust, with reduced spending commitments, a strong cash position and debt free balance sheet.
It also reported that current sales opportunities around the world were currently greater than last year.
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