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LONDON (Alliance News) - Plexus Holdings PLC Thursday said its pretax profit increased in its first-half as high pressure high temperature wellhead equipment sales helped company finances.
The oil and gas engineering group said its pretax profit increased 5.8% to GBP1.9 million for the six months ended December 31 from GBP1.7 million the previous year as revenues jumped 12% to GBP12.6 million from GBP11.3 million during the same period in 2012.
The company said its revenues increased as high pressure high temperature wellhead equipment sales increased by 15% to GBP10.9 million from GBP9.5 million the previous year.
The news comes as the UK 2014 budget announced tax incentives and allowances for firms seeking out development of ultra high pressure, high temperature wells in the UK North Sea, which should have a positive impact on Plexus' ongoing sales.
High pressure, high temperature wells have potential pressure of greater than 15,000 pounds per square inch with a potential flowing temperature of greater than 177 degrees Celsius at the wellhead. The sites are technically more difficult to develop but can reach reservoirs that are deeper and further away than ever before.
However, the company noted that revenue generated from its rental of 10,000 pounds per square inch standard pressure wells decreased by 24% to GBP1.1 million from GBP1.5 million the previous year, reflecting reduced activity in North Sea exploration activities.
Plexus also said that its cost of sales increased 18% to GBP3.9 million from GBP3.3 million and administrative expenses increased 11% to GBP6.9 million from GBP6.2 million but that its operating profit increased 3.4% to GBP1.9 million from GBP1.8 million during the period.
As a result, the company said it plans a 9% increase in its interim dividend to 0.48 pence per share, to be paid to shareholders at the end of April.
The firm added that it is buoyed on for the future, as it announced a range of new contract deals in the first few months of 2014, including a purchase order with Centrica PLC worth GBP900,000 and a GBP1.1 million contract with Maersk Group.
Plexus shares were up 4.5% to 284.23 pence Thursday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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