Scots oil services firm suffers setback

SHARES in Plexus Holdings have fallen around 10 per cent after the oil and gas engineering business issued a profit warning although directors said the long term outlook for the firm was good.

Aberdeen-base Plexus said it anticipated that earnings before interest, tax, depreciation and amortisation for the current year would be below market expectations due to a combination of lower than anticipated profit margins on sales and higher overheads.

The company, which specialises in technology used in wells, said revenues were running broadly in line with expectations. The earnings shortfall was partly due to investments it is making in support of its growth strategy. Plexus said it had brought forward some investment costs from the next financial year as it prepared for the possibility of having to service a higher than expected pipeline of opportunities.

Plexus was hit by the slowdown in exploration activity in the North Sea amid the crude price plunge. The company sold its exploration wellhead business to Technipfmc for an initial £15m in 2017.

Chief executive Ben van Bilderbeek said yesterday that Plexus was confident of winning orders for its technology for use in a range of sectors including oil and gas production and renewables after receiving more enquiries than expected.

Shares in Plexus Holdings closed down 4.5p at 44.5p on the Aim market.