RNS Number : 9747U

Plexus Holdings Plc

29 November 2023

Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services

29 November 2023

Plexus Holdings plc ('Plexus' or 'the Group')

Preliminary Results

Plexus Holdings plc, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP(R) method of wellhead engineering, announces its preliminary results for the year ending 30 June 2023.

Financial Summary

   --      Sales revenue GBP1,487k (2022: GBP2,306k) 
   --      Adjusted EBITDA GBP2,451k loss (2022: GBP2,780k loss) 
   --      Operating loss GBP4,261k (2022: GBP4,291k) 
   --      Loss before tax GBP4,228k (2022: GBP5,556k) 
   --      Loss after tax GBP4,015k (2022: GBP7,457k) 
   --      Basic loss per share 4.00p (2022: 7.42p loss) 
   --      Cash and cash equivalents of GBP1,449k (2022: GBP5,840k) 
   --      Bank borrowing of nil (2022: GBP3,958k relating to a drawn down Lombard facility) 
   --      The Group has no funds invested in financial assets (2022: GBP101k) 
   --      Convertible loan notes of GBP1,550k issued in the year (2022: nil) 

Operational Overview

Revenue streams are derived from the direct rental and sale of Plexus products together with the licencing of the Plexus' POS-GRIP(R) method of friction-grip engineering technology to third parties, including SLB (previously Schlumberger). The strategy is to establish the Company's proprietary and patented leak-proof wellhead systems, applications and specialist engineering solutions across the oil and gas industry, whilst helping to meet ESG and net zero goals by offering 'through the BOP' (Blow out Preventer) wellhead designs, and leak-proof seals capable of maintaining their integrity for the life of the well thereby avoiding costs associated with maintenance and well shut ins.

-- September 2022 - shortlisted in the 'Environmental Sustainability Innovation' and 'Significant Contribution to the Industry' categories of the Offshore Network's OWI Global Awards.

-- October 2022 - raised GBP1.55m through the issue of Convertible Loan Notes ('CLN') to Ben van Bilderbeek, CEO of Plexus, and Jeff Thrall, Non-executive Chairman of Plexus - proceeds to be used for working capital purposes as the Group seeks to capitalise on the pipeline of opportunities arising within its target markets.

-- February 2023 - agreed the sale of leasehold interest along with associated leasehold liabilities of Burnside House, a building surplus to requirements in Aberdeen for a consideration of GBP1.05m in cash.

-- March 2023 - secured a c.GBP5m contract for the rental of proprietary POS-GRIP "HG(R)" wellhead equipment and sealing technology for a specialised project application to be deployed over 12 months.

-- May 2023 - SLB exercised its option to extend its non-exclusive licence agreement with Plexus for an additional six years effective from 10 November 2023, and confirmed that its testing programme was progressing well.

Post period end

-- August 2023 - contract value of the major rental contract announced on 6 March 2023 increased materially from c.GBP5m to c.GBP8m.

-- September 2023 - entered into loan agreements with a total value of GBP700,000 with Ben van Bilderbeek related entities - funding to be used to provide additional working capital for the Group as Plexus continues to invest in rental wellhead equipment inventory, the special project contract and pursues a growing pipeline of opportunities and potential orders.

-- September 2023 - successful completion of Oceaneering Plug and Abandonment ('P&A') campaign originally announced in June 2022. Plexus Mud Containment System used sequentially on four different wells generated revenues of GBP850,000, a 70% increase on initial estimates.

-- October 2023 - successful placing of 2,750,000 Treasury Shares raising GBP549,230 gross proceeds further strengthening the balance sheet and helping to underpin future expansion plans.

-- October 2023 - contract for a P&A project secured through licensor SLB for the rental of Exact adjustable wellhead system and Centric Mudline tooling for a leading North Sea operator with a value of c. GBP100,000.

-- November 2023 - contract with a value of c. GBP175,000 awarded by Neptune Energy UK for the rental of Exact adjustable wellhead system and Centric Mudline Suspension equipment to allow the permanent abandonment of a UK North Sea well.

Chief Executive Ben Van Bilderbeek said:

During the year to 30(th) June 2023, the Group made a loss before tax of GBP4.23m, compared to a loss in the prior year of GBP5.56m. Although revenues were lower than the prior year, the board's focus on reversing these losses and the decisions taken as part of the revised strategy has begun to have a positive impact with significantly increased revenues and a return to profitability anticipated for the 2023/24 financial year. Current activities are centred around our re-entry into the drilling from Jack-up rigs exploration rental wellhead business, sale of surface production wellheads and the provision of special solutions and applications to operators, for example in the Plug and Abandonment ('P&A') market sector. At the same time, we are developing our licensee relationship with SLB where we have licenced certain surface production wellhead IP and technology.

Looking at the macroeconomic and oil and gas ('O&G') sector backdrop, the clock is ticking as the world looks to achieve its 2030-2050 net zero goals. While the shift from an established fossil-fuel intensive hydrocarbon-based energy system to one that will focus on renewables and nuclear is irrefutably the right path forward, at the same time reality must prevail as it is becoming increasingly clear that O&G will for decades continue to play a key role in the energy mix until various complex cost and infrastructure challenges are overcome, including the establishment of robust and reliable critical supply chains. Importantly, natural gas is recognised as the key transition hydrocarbon, and Plexus' proprietary wellhead and HG(R) seal designs have a unique role to play in terms of their capability of delivering leak-proof performance and solutions for the smaller molecules and higher pressure and temperatures associated with gas exploration and production drilling. Emphasising the gas opportunity, the CEO of Baker Hughes in an interview with the Financial Times earlier this month declared that that there is a long lifeline for natural gas and LNG and went one step further when he said that: "If you look at affordability, security and sustainability, natural gas and LNG is not just a transition fuel but a destination fuel".

BP believes that investment in O&G production will be needed for the next 30 years to avoid energy shortages and fluctuating prices, while the International Energy Agency ('IEA') suggests that although oil, gas and coal are on course to hit a peak in the next few years, having held a circa 80% share of the global energy mix for decades, they will continue to be just above 60% of the mix by 2050. The IEA's Oil 2023 report forecasts demand to grow to 105.7mn barrels per day in 2028 - a new global high, and 6% more than 2022 levels. Sentiment in the sector is therefore becoming more positive with Wood Mackenzie predicting that offshore exploration and drilling activity will grow 20% by 2025.

At the same time as O&G demand remains strong, there are clear signs of intensifying pressure to decarbonise, and the O&G industry is inevitably coming under increased scrutiny to drastically reduce its future carbon emissions. Consequently, it is now readily understood that whilst O&G production and consumption continues, it needs to be as green as possible in terms of reduced emissions (which are often unintentional leaks), especially regarding methane which is so much more harmful to the environment than CO2.

The US is leading this charge: Administrator Michael Regan at the Environmental Protection Agency ('EPA') recently said that no O&G infrastructure was "getting out of jail free" under pending methane rules. Meanwhile, California is looking to pass legislation that will require companies to report carbon emissions from supply chains or risk being excluded from the market; this mandate is the first of its kind in the US, but other states and countries are likely to follow suit. Such legislation according to reports seek to use consumer protection, racketeering, product liability and other laws to seek damages to pay for climate related costs. The product liability category is particularly relevant for Plexus as we believe that our leak-proof wellhead equipment seals can perform in a way that conventional equipment and seals cannot for scientifically verifiable reasons, thereby protecting both the environment and the operator.

Plexus has always argued and continues to argue that leak prevention is so much more effective than after the event questionable leak 'cures', and I must believe that at some stage where an E&P company is faced with the choice between specifying a conventional wellhead design with leak history, versus a proven design with no leak history that our time will come. A further incentive for such developments apart from O&G companies simply being motivated to do the 'right thing' by selecting equipment that can help deliver emission reduction, are powerful pending financial incentives such as President Joe Biden's Inflation Reduction Act which will introduce a charge of $900 USD per tonne of methane emitted in 2024, rising to $1,500 USD per tonne in 2026.

Bearing in mind that our proven long term leak-proof metal sealing technology for gas service wellheads has been around for many years, it begs the question as to why preventing leaks from wellhead annular seals has not been made a priority, and why the focus continues to be on monitoring and cure rather than prevention?

Our explanation is simple, and twofold:

1. Historically, I believe that the O&G industry has been conditioned to 'accept' that all wellhead systems have a point at which internal annular seals fail and that the need to re-energise seals is considered an unavoidable aspect of regular field maintenance requirements rather than being seen as a design flaw.

2. In the early days, the focus on hydrocarbon exploration and production was on oil and as such, the equipment was designed for oil, which has larger molecules and is easier to contain than gas. Therefore, because conventional gas wellhead equipment evolved rather than was designed with a leak- proof purpose in mind, the compromises that have always existed I believe have now become maintenance items, and therefore continue today.

Consequently, although over the years we have worked on some very exciting, extreme wellhead pressure and temperature contracts and specialised projects, our technology has not yet broken into the volume mainstream.

However, with the support of various forward-thinking international conglomerates, which recognise the value and unique capabilities of our technology, including SLB (previously Schlumberger), and with market sentiment moving in our favour as companies look for new ideas and opportunities to cut carbon emissions, I believe that Plexus will benefit accordingly.

Positively, Plexus' traditional home market, the North Sea, is beginning to see a revival after a severe downturn around 2015 which massively impacted the wider industry and Plexus, as we had been dependant on exploration drilling activity. While the UK Continental Shelf ('UKCS') is perhaps inevitably facing a "natural long-term decline" as suggested by Offshore Energies UK director Mike Tholen, awareness is growing that if it isn't replenished with exploration activity, the UK will have no choice but to increase its reliance on imports, which in turn is a threat to the UK's energy security. This will further exacerbate the emissions issue given O&G production closer to home is a far greener option than shipping products such as liquified natural gas ('LNG') from across the Atlantic.

Accordingly, in July 2023, the UK Government committed to granting 100 plus new licences to extract O&G from the North Sea and bolster its energy security. In September 2023, Britain's largest undeveloped oil field, Rosebank, was approved for drilling by the government regulator with production scheduled to begin by 2027, which is a strong indication of the change in sentiment. Furthermore, in October 2023 it was announced that a further twenty-seven licences for O&G production have been granted, and Energy Secretary Claire Coutinho could not have put it better when she said, "As recognised by the independent Climate Change Committee, we'll continue to need O&G over the coming decades as we deliver net zero. It's therefore common sense to reduce our reliance on foreign imports and use our own supply - it's better for our economy, the environment and our energy security". Having re-entered the Jack-up exploration rental wellhead market with SLB equipment and sales support, we are well positioned to support such opportunities, in addition to the sale of production wellheads, P&A and special projects where unique POS-GRIP solutions can be developed.

We have also been looking at options to apply our patented method of friction-grip engineering to other decarbonising emerging industries such as carbon capture and storage ('CCS'), hydrogen, geothermal and offshore wind engineering challenges. In line with this, our R&D team based in Aberdeen continue to design and develop new products that support the needs of existing and potential customers.

Another key target market is global offshore decommissioning. Valued at US$5.25 billion in 2021, this sector is forecast to grow at a CAGR of 7.6% to $10.07 billion in 2030 (source: Polaris Market Research). With around 2,100 North Sea wells expected to be decommissioned over the next decade - around 200 per year - at an average cost of GBP7.8m per well, it is hardly surprising that a third of the spend is in Europe. Once again, the market is being driven by the rising focus on initiatives to lower climate-warming emissions.

With this background, we were delighted to have won a purchase order for P&A equipment and services from Oceaneering International Services Limited at the end of the last financial year (June 2022). This successful project, which generated revenue of circa GBP850,000 for Plexus during the 2023 calendar year, was approximately 70% higher than original estimates. We envisage that this successful project will lead to other similar work in the North Sea and internationally both with Oceaneering and other customers Indeed post period end we announced two P&A related projects in the North Sea involving the rental of our Exact adjustable wellhead system, the most recent being for Neptune Energy UK announced in November 2023.

In summary, our Company's future success remains our key focus. At the same time, we can help to address society's demands for O&G operators to be responsible players through the supply of our unique technology which can contribute to achieving emission reduction targets, As a major shareholder in Plexus my interests are clearly aligned with all our shareholders, and my confidence in the future was evidenced during the year by my provision of a GBP1.5m convertible loan, and a GBP700,000 loan. Although there is still some debate about the extent of the impact humanity has on global warming, the current 1.5-degree centigrade cap will be bolstered by better technology, and in this respect, I have no doubt that Plexus' proprietary POS-GRIP IP and its wellhead equipment designs will achieve the recognition they deserve, and I look forward to reporting further progress over the coming months.

For further information please visit www.plexusplc.com or contact:

 Plexus Holdings PLC                 Tel: 020 7795 6890 
  Ben van Bilderbeek, CEO 
  Graham Stevens, CFO 
 Cavendish Capital Markets Limited   Tel: 0131 220 6939 
  Derrick Lee 
  Adam Rae 
 St Brides Partners Ltd              plexus@stbridespartners.co.uk 
  Isabel de Salis 
  Paul Dulieu 

Summary of Results for the year ended 30 June 2023

                                     2023       2022 
                                  GBP'000    GBP'000 
 Revenue                            1,487      2,306 
 Adjusted EBITDA                  (2,451)    (2,780) 
 Operating Loss                   (4,261)    (4,291) 
 Loss before taxation             (4,228)    (5,556) 
 Loss after taxation              (4,015)    (7,457) 
 Basic loss per share (pence)     (4.00p)    (7.42p) 

Chairman's Statement


Plexus is a technology and engineering driven business centred on the rental and sale of wellhead equipment for exploration and production O&G drilling and P&A markets. Historically, the industry has developed over many decades what Plexus terms conventional wellhead design and sealing solutions, and in many parts of the world the lowest technical requirement available at the cheapest price prevails when it comes to equipment selection and tender outcomes. Conversely, Plexus has always pushed for ways to significantly enhance the safety and performance of products offered and which we maintain result in a significantly improved value proposition for the end user, especially when considered over the life of a well where expensive remedial work and shut ins leading to lost production are concerned.

With strong and in many cases regulatory demands being made on the industry to reduce or avoid completely methane emissions, the main component of natural gas, leak-proof wellhead performance should be increasingly demanded, and we believe that this lies behind the recognition we have received from licensees for our technology. Plexus' proprietary products are invariably protected by patented IP, such as POS-GRIP technology applications and "HG" metal-to-metal seals. The Company has demonstrated over many years that its products and technology perform over a wide range of products and applications whilst at the same time delivering green ESG and net zero compliant features in relation to being "through the BOP" and most importantly offering leak-proof sealing throughout the life of a well.

As well as supporting licensees where the goal is to deploy the Plexus technology on a worldwide basis in markets that Plexus is best placed to reach through its licencee partners, the Company continues to pursue surface and subsea wellhead opportunities organically. In addition to this, Plexus is now gaining traction in the pursuit of rental opportunities in the Jack-up exploration wellhead business following a licensing deal with SLB, which enables Plexus to offer both Exact exploration wellhead and Centric mudline suspension systems.

Business progress

The Group's revenues decreased in the 12 months to 30 June 2023 to GBP1.49m (2022: GBP2.31m), with a reduced loss before tax of GBP4.23m compared to loss of GBP5.56m in the prior year. Importantly, GBP3.64m of revenues are included in deferred income and will be recognised in the 2023/24 financial year.

The global outlook for growth in O&G activities is now stronger than it has been for many years resulting in a pickup in activity across our core markets - exploration drilling, development wells and the P&A market. In the North Sea, where the reduction in activity was particularly pronounced over the past few years, the higher O&G prices, and the growing support for O&G development over the longer term as part of a more realistic net zero transition timetable, have resulted in a number of orders and increased tender opportunities.

The most significant contract win was the special project announced in March 2023 to supply POS-GRIP "HG" wellhead system and sealing technology for a specialised subsea application. The value of this contract was increased post year end from c.GBP5m to c.GBP8m in August 2023, which indicates the importance of the project and the capabilities of our uniquely enabling technology. Such projects are not routine business, and given the success in delivering this equipment, management believe this will further enhance the reputation and reach of the Company and should help with securing more standard and routine work amongst the other operators involved.

A major order from Oceaneering for P&A work was completed during the year, with Plexus' products delivering uniquely enabling methods of safely abandoning old wells. The project was successfully completed with both the equipment and the Plexus project team performing well, and the contract delivering significantly more revenue than originally anticipated with a final value of c.GBP850,000. The Plexus products used in this project, together with Plexus' other equipment suitable for P&A work whether from floating vessels or Jack-up rigs, will hopefully see an increase in similar project work arising.

The August 2021 Exact Adjustable Wellhead licence agreement with SLB enabled Plexus to re-enter the Jack-up exploration rental wellhead market with the proven Exact and Centric wellhead and mudline suspension products. Since then, much work has gone on improving the product range and investing capital in building an initial rental wellhead inventory. This agreement has now started to generate sales opportunities with two contracts announced in October and November 2023, which use Exact wellhead equipment and associated tools. The rental package is highly versatile and can be deployed in several applications from Jack-up rigs, including P&A work, exploration and appraisal wells, and pre-drilling of production wells, and we are excited about creating this opportunity to capitalise on the strong reputation that we had built up in the rental exploration wellhead equipment sector prior to selling the previous division to TFMC in 2018.

With Plexus established reputation in Jack-up exploration drilling and mudline suspension systems, alongside having knowledge of a number of the legacy wells in the North Sea and worldwide, there is plenty of scope for gaining contracts in this growing space over the coming years as they are now being considered for re-entry and permanent decommissioning.

The Company's 49% investment in its associate company Kincardine Manufacturing Services Limited ("KMS") was deemed to be non-core during the year. As a result, a GBP0.7m loan arrangement was entered into with Ben van Bilderbeek related entities as announced in September 2023, which at the same time granted two option arrangements whereby the loan can be converted into 70% of Plexus' 49% shareholding in KMS, with a second option for the balance of 30% of the 49% shareholding for an additional GBP0.3m. Assuming the two options are exercised then it is believed that the GBP1m of additional funds are better deployed within Plexus and to support current growth plans. Although KMS experienced an upturn in business following the end of the Covid-19 pandemic, dividends have continued not to be declared which further supported the decision to potentially monetise the Plexus KMS shareholding. In the period, Plexus' share of KMS' profits led to a credit of GBP0.18m to the statement of comprehensive income. As required under IAS36 an impairment review was undertaken, which concluded that no impairment charge was required. At the reporting date the investment in KMS has been reallocated under IFRS 5 to current asset and has been presented as asset held for sale.

Plexus' family of proprietary intellectual property ("IP") continues to underpin the value and potential of the business as evidenced by the ongoing development of products and associated equipment which have enabled the c. GBP8m special project announced during the year, together with innovative P&A solutions contract wins. The IP suite consists of a mix of patents, confidential test results and analysis methods, as well as field experience and importantly in-depth product know-how which cannot be easily replicated. A key over riding feature of our Plexus HG seal designs is their ability to provide leak-proof performance solutions, and this capability was recognised by the LSE in 2021 with the accreditation of the Green Economy Mark. Although product patents do expire over time, ongoing R&D and proprietary technical innovations continue to protect Plexus and licenced products. In addition, new Method Patents for POS-GRIP are ongoing, and are anticipated to give Plexus and its licensees further protection of the POS-GRIP method for another 20 years in the UK and worldwide.


On behalf of the Board, I would once again like to thank all our employees for their dedication and hard work during the year. Although it was another challenging period as evidenced by the financial results, I am confident that the anticipated increase in exploration and production drilling activity which we are already beginning to see the benefits of in the current year will be positive for our staff, and for future employment opportunities within Plexus.


As governments worldwide look to deliver clean transitions away from hydrocarbons, there has been a tightening of climate policies clamping down on O&G practices which is forcing the industry into change. While there has undoubtedly been a level of 'greenwashing,' ultimately the industry is now moving in the right direction, with new sustainable methods and equipment being encouraged, developed, and employed to address regulatory demands for emissions reductions, particularly in relation to methane.

In conjunction with these important developments, there is a growing realisation that demand for O&G will, as Mike Sommers, the President, and CEO of the American Petroleum Institute, recently wrote in a letter to the Financial Times "... remain massive for decades to come". Furthermore, Mr. Sommers wrote that the "... proper focus should therefore be on smart policies that focus on innovations to produce that energy cleaner, safer and more efficiently." We see POS-GRIP as falling clearly into the innovation category.

We see such developments, including the drive to reduce emissions throughout the supply chain, as opening a new chapter in Plexus' story, particularly as I believe our technology has been several steps ahead of the rest of the industry having delivered leak-proof wellhead integrity solutions for over 20 years including its HG wellhead metal annular seals.

With our experienced team of engineers and service personnel based in Aberdeen, and a growing range of products that offer multiple benefits and advantages to the O&G industry in terms of improved safety, functionality, and cost and time savings, Plexus is well positioned for growth. This includes organic growth in the UK, specialised projects in the exploration rental and surface production wellhead sectors, growing P&A activities, and opportunities across the wider global market through licencing partnerships such as the SLB licence (recently extended for a further six years).

Specifically in the UK, it is now being recognised that the reliance on imported gas, such as from the US and Qatar and the resultant implications for energy security is something that urgently needs addressing. Such considerations were brought into sharp focus with the terrorist attack on Israel in October, and it is no coincidence that the CEO of Baker Hughes in a recent interview with the Financial Times said that he sees geopolitical risks being at their highest level in half a century. However, encouragingly for the North Sea, Andy Brooks the NSTA Director of New Ventures recently stated that: "Oil and gas currently meets three-quarters of the UK's energy needs and projections suggest they will both play an important role in the energy mix for decades to come", a premise that is supported by the UK having a significant volume of unsanctioned, discovered resources as well as a wealth of infrastructure. For these reasons we believe there are clear growth prospects in the UKCS and the ECS for 'closer to home' new wells and associated leak-proof solutions, as well as opportunities arising in alternative energy markets and applications, and Plexus expects to be able to benefit accordingly.

In closing, I would like to take this opportunity to thank the Board, management team and staff for their continued hard work and support over the course of the year. I look forward to working with them all in the year ahead, as we focus on delivering on our overriding objective which remains to generate increasing value for all our shareholders.

J Jeffrey Thrall

Non-Executive Chairman

28 November 2023

Principal Activity

The Group markets oil and gas industry wellhead and associated equipment that utilises its patented friction grip method of engineering known as POS-GRIP Technology. This involves squeezing one tubular member against another within the elastic range to effect gripping between the components and can also set metal-to-metal seals, known as "HG" (R) Seal Technology. This superior method of load support and sealing for wellheads offers several important and unique advantages to operators, particularly for HP/HT surface and subsea production applications, P&A and special applications, and can include improved technical leak-proof performance, improved integrity of metal-to-metal seals, significant installation time savings, reduced operating and maintenance costs and enhanced safety.

The Company has developed a range of products based on this technology, and is focused on pursuing surface production, P&A, subsea and geothermal wellhead opportunities, as well as connectors and the subsea market. Plexus has also re-entered the rental exploration wellhead from Jack-up rigs market through a licence arrangement with SLB for Exact adjustable wellhead systems and Centric Mudline tooling and this is the main focus for Plexus over the coming years and where Plexus' past reputation and success in this market can be leveraged.

In addition to Plexus' organic activities, the Company pursues licencing opportunities and is supporting SLB, with a POS-GRIP "HG" wellhead licence, a non-exclusive licence for the development of conventional and unconventional oil and gas surface production wellheads. SLB is carrying out a testing programme, which is near completion, based around its own wellhead designs incorporating the POS-GRIP method; after some delays, SLB is expected to commercialise new products developed with the technology in the coming months.

Financial Results

Statement of Comprehensive Income


Revenue for the year was GBP1,487k, a decrease from GBP2,306k in the previous year. Importantly, deferred income includes GBP3,637k of revenues that will be recognised in the following financial year.


Gross margin increased to 73.1% (compared to 64.7% in the previous year). The increase in margin is largely driven by higher margins achieved on rental incomes which make up a higher proportion of sales income in the current year compared to the prior year.

Overhead expenses

Administrative expenses have decreased compared to the prior year with expenditure of GBP5,348k (2022: GBP5,784k).

Continuing salary and benefit costs remain the largest component of administrative expenses at GBP2,930k compared to GBP2,863k in the prior year.

Non-recurring item

The statement of comprehensive income includes a fair value adjustment on an asset, which was held for sale, of GBP50k, relating to the write-down in a building's value to its fair value prior to its sale in February 2023.

Loss Before Tax

Loss before tax of GBP4,228k compared to a loss in the prior year of GBP5,556k.

Adjusted EBITDA

The Directors use, amongst other things, Adjusted EBITDA on continuing operations as a non-GAAP measure to assess the Group's financial performance. The Directors consider Adjusted EBITDA on continuing operations, which approximates the operational cash generated by, or used in the business, to be the most appropriate measure of the underlying financial performance of the Group in the period.

Adjusted EBITDA on continuing operations for the year was a loss of GBP2,451k, compared to a loss of GBP2,780k in the previous year. Adjusted EBITDA on continuing operations is calculated as follows:

                                                   2023       2022 
                                                GBP'000    GBP'000 
 Operating loss                                 (4,261)    (4,291) 
 Add back: 
 -Depreciation                                      307        449 
 -Amortisation                                    1,253      1,230 
 Share in profit of associate                       182        111 
 Fair value adjustment on financial 
  assets                                            (1)      (513) 
 Impairment charge on associate undertaking           -        109 
 Other income                                        69        125 
                                                  -----      ----- 
 Adjusted EBITDA on continuing operations       (2,451)    (2,780) 
                                                -------    ------- 


The Group shows a total income tax credit of GBP213k for the year compared to a tax credit of GBP1,901k for the prior year.


In December 2018, Plexus acquired a 49% shareholding in Kincardine Manufacturing Services Limited ("KMS"), for a consideration of GBP735k plus associated legal fees of GBP50k. At the year-end, a share in profit of associate of GBP182k (2022: profit GBP111k) has been recognised. No dividends were declared or received. Following an impairment review no impairment charge was recognised in the year (2022: GBP109k). The investment in KMS meets the criteria outlined in IFRS 5 and has been reallocated as an asset held for sale.


The Group reports basic loss per share of 4.00p compared to a loss per share of 7.42p in the prior year.

Statement of Financial Position

Intangible Assets and Intellectual Property ("IP")

The net book value of intangible assets was GBP8,731k, a decrease of 5% from GBP9,165k last year. This movement represents investment of GBP516k less the annual amortisation charge of GBP950k.

Plexus owns an extensive range of IP which includes many registered patents and trademarks across a number of jurisdictions, and actively works to develop and protect new methods and applications. In addition to registered IP, Plexus has developed over many years a vast body of specialist know-how in relation to the POS-GRIP friction grip method of engineering and related activities. Plexus is also currently pursuing the registration of Method Patents, which would further extend the scope of current patent protections.

The loss in the year and the market capitalisation of the Company being less than the carrying value of the assets are indicators of impairment. Following a thorough review, including a discounted cashflow model which has included cashflows for 20 years, the Directors have concluded no impairment of IP is required. Therefore, the Directors consider the current carrying values to be appropriate.

Research and Development ("R&D")

R&D expenditure including patents increased from GBP447k in 2022 to GBP516k in 2023. Continued investment in R&D demonstrates the Group is protecting, developing, and broadening the range of proprietary POS-GRIP friction-grip method of engineering applications, related IP, and Plexus products.

Tangible Assets

The net book value of property, plant and equipment including items at the year-end was GBP1,404k compared to GBP821k last year. Capital expenditure on tangible assets increased to GBP890k compared to GBP253k in the prior year.

Cash and Cash Equivalents

Net cash at the year-end was GBP1,449k (cash and cash equivalents of GBP1,449k with no bank borrowings) compared to net cash of GBP1,882k (cash and cash equivalents of GBP5,840k less the bank Lombard facility of GBP3,958k) in the prior year, reflecting a net cash outflow for the year of GBP433k.

The decrease in bank borrowing represents full repayment of the bank Lombard facility which had a balance of GBP3.96m at 30 June 2022.

It should also be noted that the Group has financial asset investments with a value of GBPnil (2022: GBP0.10m) at the reporting date.

The expected future cash inflows and the cash balances held are anticipated to be adequate to meet current on-going working capital, capital expenditure, R&D, and project related commitments.


The Company has not paid any dividends in the year and does not propose to pay a final dividend at this time. Whilst the Company remains committed to distributing dividends to its shareholders when appropriate, the Directors believe that it is prudent to suspend the payment of dividends in light of the ongoing capital and operational requirements of the business.


Progress has continued during the year with the Company's strategy to build a portfolio of revenue streams based on its POS-GRIP technology and associated products and services.

The Company's primary focus continues to be the marketing of its POS-GRIP-enabled products and supporting licensees of the technology, as well as the re-entry to the rental exploration market with its non-POS-GRIP equipment designs. Plexus continues to supply surface production wellheads and is also pursuing supplemental business opportunities relating to well abandonment and decommissioning, which are anticipated to be growth areas as the world's older producing oil and gas fields, such as in the North Sea, come to the end of their lives.

Plexus continued to invest in R&D during the year, with significant focus on optimising the Exact rental exploration wellhead product range for the current market, and also to complete product development and testing required for the Oceaneering decommissioning work and the forthcoming specialised project. R&D remains an important operational activity and further develops the value of our IP and ability to extend the range of applications of POS-GRIP technology. Innovation in the oil and gas industry continues to be an essential part of developing both cost saving initiatives and ever safer drilling methods, particularly in relation to greener leak-proof technologies and equipment, and the Board is confident that Plexus can continue to play an important role in delivering such solutions whilst raising wellhead standards to a level that conventional technology cannot reach, such as passing test standards equivalent to those used for premium couplings.

Staff at the end of June 2023 (excluding non-executive directors) comprised of 36 employees, including 1 international employee, with a weighted average total of 36 in the current year and 35 in the prior year.

Staff development remains a significant focus with the completion of a comprehensive evaluation and revision of the in-house training modules to ensure they continue to provide the necessary underpinning knowledge and skills which is required of those fulfilling technical roles.

The Company continues to maintain the OPITO accreditation for its competency management system, with continual developments and improvements to the process, ensuring a robust assessment of employees in safety--critical roles.

Health and Safety continues to be a pivotal part of the business and remains at the centre of everything we do. Plexus remains fully committed to continually improving safety standards and the safety culture across the business. This is reflected in the business being once again lost time injury ("LTI") free this year. Plexus has now passed its eighth anniversary of this milestone in September 2023.

Plexus continues to comply with the requirements of the API Q1/ISO 9001 and ISO 45001 standards to include the retention of both API 6A and 17D Licences. These accreditations demonstrate Plexus' capability and determination to operate under the highest standards. Post period end API conducted an audit with 1 minor finding, resulting in Plexus retaining their accreditation.

The IT Department provides technology leadership for Plexus, including governance, information security, software development and expertise in deploying modern information technologies to improve company efficiency. Plexus has continued to develop its in-house systems to ensure the Group is able to react swiftly to changing market requirements, and constantly review the Company's IT infrastructure. No significant IT infrastructure projects were undertaken in the year.

Strategy and Future Developments


Plexus' proprietary POS-GRIP technology involves applying compressive force to the outside of a wellhead or pipe, to flex it inwards. As the bore of the vessel moves inwards, it makes contact with an inner pipe (or hanger) on the inside. Sufficient contact force is generated to hold the inner member in place through friction between the two components, whilst at the same time creating a superior metal-to-metal seal. There are numerous advantages associated with being able to connect two tubular members without the need for threads or rotation. The Company's strategy is primarily focused on delivering the highest standard of wellhead and associated Plexus products design for the upstream oil and gas markets around the world. These have already proved to be uniquely advantageous in terms of safety features, operational efficiency, and cost savings, especially for HP/HT applications. The Company is now focused on replicating this past success in the exploration drilling from Jack-up rigs sector, as well as other wellhead and related markets including surface production, subsea, plug & abandonment, gas storage and geothermal, together with other initiatives such as a POS-GRIP Crown Plugs and POS-GRIP Lateral Trees. Plexus' re-entry into the exploration rental wellhead for the Jack-up drilling market will be built on non-POS-GRIP technology but with specific benefits and features including "through the BOP" safety features.

POS-GRIP wellhead designs deliver many advantages over conventional "slip and seal" and "mandrel hanger" wellhead technologies for surface exploration and land and platform production applications. These include larger metal-to-metal "HG" seal contact 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 and maintenance costs. Plexus' HG seals offer leak preventative capabilities for the life of the well which is a key consideration when addressing Net Zero and ESG responsibilities, especially where methane emissions are concerned.

Plexus' POS-GRIP enabled product suite also includes the innovative Python (R) Subsea Wellhead as well as the POS-SET Connector (R) for use in the growing decommissioning market. We believe the Python subsea wellhead has tremendous potential as it can eliminate the need for wear bushings, pack-offs, lock-rings, and lockdown sleeves, whilst delivering instant rigid lock-down in all directions, and is fully reversible for ease of workover, side-tracking, or abandonment. These design simplifications and features not only reduce the risk of installation problems and safety issues, they also significantly reduce installation time and the number of trips that are needed such that it has been independently estimated that over ten days of time savings per well can be achieved in deep-water under certain conditions which, depending on water depth, Plexus estimates could result in a saving of over $10m for the operator. The POS-SET Connector, which is designed to re-connect to bare conductor pipe for well re-entry or permanent abandonment operations, creates a solid connection with reliable sealing directly against the pipe, and retains bend and load capabilities at 80% of pipe strength. The Directors believe that such features mean that Plexus' wellhead equipment sets and delivers a superior standard. Apart from the operational time savings and related safety benefits, at an engineering level the Company has demonstrated that its technology can raise and even exceed the integrity of wellhead testing and sealing to that of premium couplings, which supports its claim that wellheads no longer need to be the weak link in the well architecture chain.

POS-GRIP friction-grip technology has wide ranging applications both within and outside the oil and gas industry. As POS-GRIP is a method of engineering as opposed to a product in its own right, there is an opportunity for the technology to improve the performance of conventional products. The Company will look to integrate POS-GRIP so that the range of benefits, together with "HG" metal-to-metal sealing can be realised organically or in conjunction with partners, including licensees. In line with this strategy, in November 2020 Plexus entered into a licence agreement with Cameron International Limited, which grants the Schlumberger ('SLB') group company a non-exclusive licence to use the POS-GRIP and HG(R) metal-to-metal seal method of wellhead engineering for the development of conventional and unconventional oil and gas surface production wellheads. The scope of this licence was further expanded in December 2021, and subsequently in May 2023 was extended for a further period of six years. SLB continues to make good progress with the engineering and testing programme of their new wellhead design which will incorporate Plexus technology. The programme has taken longer than originally anticipated, and therefore marketing and sales activity by SLB to its customers should begin in the first half of 2024 calendar year.

In addition to POS-GRIP Technology, Plexus is now re-entering the Jack-up exploration rental wellhead market with SLB's Exact and Centric wellhead and mudline suspension products. These products are tried and tested, and well suited to the exploration market as they are "through the BOP" products which deliver crucial time savings and safety benefits over conventional wellhead products. As the exploration market rebounds in the North Sea, especially following the recent issue of new licence, as well as internationally, these products, combined with Plexus' experience and reputation in this sector means that we are well placed to win a significant share of the work now beginning to be planned, and where the Company is seeing a number of contract opportunities arise.

Business Model and Markets

The Company is proprietary technology driven and its extensive patent protected IP and many years' worth of specialist know-how has been successfully deployed in hundreds of wells around the world. Its superior performance, safety and operational advantages led to the Company becoming established initially as a leading equipment and services provider to the niche Jack-up exploration rental wellhead market. The Directors believe that this success can over time be replicated and extended to the wider and much larger energy sectors including surface production, subsea, geothermal, and fracking applications based on its POS-GRIP technology. In addition to this there is a surge in interest in subsurface storage wells for gas, CO2, and hydrogen, for which POS-GRIP technology is also ideally placed to address the need for leak-proof equipment designs.

Plexus has a good reputation for offering the agility and customer focus required to succeed in the Jack-up exploration rental wellhead market, and so the licence agreement with SLB to allow Plexus to re-enter this market with field proven products is welcome and is anticipated to see an addition to revenues as global exploration activity increases. Importantly SLB are also referring potential order enquiries to Plexus which is a further route to market.

An emerging market sector where Plexus' technology is beginning to gain traction is 'special solutions' where the Company's innovative IP and product designs and applications can prove uniquely beneficial. A key special project contract of this nature was announced in March 2023 with a value of c. GBP5m and was subsequently increased by a further c. GBP3m in August 2023, and may increase further.


Plexus' long-term goal is to establish POS-GRIP technology as a new industry standard for wellhead and metal sealing designs, whilst continuing to develop new Plexus products, which can also offer multiple benefits and advantages to the industry in terms of improved safety, functionality, and cost and time savings. An example of such extensions for POS-GRIP technology is the Company's connector technology, which is ideal for high integrity, low fatigue applications. The Directors believe wellhead connectors, riser connectors, subsea jumper connectors, pipeline connectors, tether tensioners and even vessel mooring connectors can all benefit from the simplicity of the POS-GRIP method of engineering.

The Company has taken on the SLB Exact adjustable wellhead and Centric mudline suspension products. It has been necessary to invest time and money into building an initial rental inventory to create capacity to meet anticipated demand. This has resulted in initial orders for P&A and decommissioning work associated with this equipment. We expect that the increase in activity and revenue from this business will be positive and will also allow Plexus to re-engage with customers at the exploration stage, which then has the potential to lead to follow on production and subsea opportunities.

As the world and the oil and gas industry strives to implement a range of ESG compliant initiatives, particularly in relation to achieving net zero, Plexus believes that its technology can make a valuable contribution in terms of its leak-proof sealing capabilities, and its 'through the BOP' wellhead designs.

Key Performance Indicators

The Directors monitor the performance of the Group by reference to certain financial and non-financial key performance indicators. The financial indicators include revenue, adjusted EBITDA, profit and loss, earnings per share, cash balances, and working capital resources and requirements. The analysis of these is included in the financial results section of this report. Non-financial indicators include Health and Safety statistics, R&D activity, equipment utilisation rates, geographical diversity of revenues and customers, the level of ongoing customer interest and support, geo-political considerations such as emissions concerns and awareness, effectiveness of various research and development initiatives, for example, in relation to new patent activity and inventions, and appropriate employee headcount numbers and turnover rates. The non-financial key performance indicators are included within the strategic report.

Principal Risks and Risk Management

There are a number of potential risks and uncertainties that could have an impact on the Group's performance which include the following.

   (a)     Political, legal, and environmental risks 

Plexus aims to participate in a global market where the exploration and production of oil and gas reserves, and even the access to those reserves can be adversely impacted by changes in political, operational, and environmental circumstances. This has for example been evidenced by the impact of the war in Ukraine, ongoing Russian sanctions, and the recent terrorist activity against Israel. The current global political and environmental landscape, particularly in relation to climate change issues and net zero goals, and the relentless plan to move away from hydrocarbons to, for example renewables, continues to demonstrate how any combination of such factors can generate risks and uncertainties that can undermine commercial opportunities and trading conditions. Some risks are of course unforeseen, and one such significant risk took the form of the global pandemic caused by COVID-19 which materialised in 2020 and where its social and economic impact continues to be felt today. Although Plexus has taken all reasonable steps to mitigate the effects of this risk, both economic and to the health and well-being of our employees, customers, and suppliers by complying with legislation and taking measures to ensure business continuity, the negative impact has clearly been felt. Such risks also extend to legal and regulatory issues, and it is important to understand that these can change at short notice. For example, ongoing and future changes to oil and gas industry windfall taxes may have an adverse impact on investment levels, as of course does a country's decision-making process in relation to granting new exploration and production drilling opportunities. To help address and balance such risks, the Group where possible seeks to broaden its geographic footprint and customer base, as well as actively looking to forge commercial relationships with large industry players, and potential licencees.

The Company continues to closely monitor the potential impact and risks of the UK's exit ("Brexit") from the European Union ("EU"). This includes assessing and monitoring the potential impact of the introduction of trade tariffs and the potential supply chain disruption that could result from increased customs checks at borders and related matters which are being indicated for 2024. Plexus has an IP-led business model, which provides it with operational flexibility and the ability to respond to and mitigate some of the potential impacts of the different scenarios resulting from the UK's exit from the EU. In the meantime, Plexus has amongst other activities obtained an Economic Operator Registration and Identification ("EORI") number to enable the Company to continue to import and export with the EU.

   (b)     Oil and Gas Sector Trends 

It is readily understood that the world continues to move away from coal as part of the COP21 as well as the COP26 and COP 27 pronouncements, together with other climate change objectives in relation to the ongoing need to urgently reduce CO2 and CH4 (methane) emissions. Importantly legislation is now beginning to be introduced which can impose large fines on companies that do not control their emissions, particularly methane and such developments logically suggest that E&P operators should be more interested than ever before in preventative leak solutions rather than temporary 'cures.' However, the commercial and environmental dynamics between traditional hydrocarbons in terms of coal, oil and gas is not the only trend to consider. New technologies, particularly in relation to renewables such as wind and solar, alternative energies and developments such as the increasing use of electric vehicles and corresponding improvements in battery storage life, and wave energy, could all in the future prove very disruptive to the traditional oil and gas industry and the corresponding demand for exploration and production equipment and services. However, it is also now clearly recognised that the world will continue to need hydrocarbons as an energy and materials source, and in particular gas for decades to come, and indeed currently global demand for hydrocarbons is forecast to continue to grow for the foreseeable future. It should be noted that the adverse climate change impact of methane compared to CO2 is now better understood by environmentalists, regulators and the oil and gas industry and that it is essential that methane wellhead leaks are prevented whenever and wherever possible. The impending Methane Emissions Reduction Act in the US and similar legislation being progressed in Europe demonstrate regulations are increasingly becoming more stringent.

   (c)     Technology 

Having originally proved the superior qualities of POS-GRIP technology within the Jack-up rental wellhead exploration market which culminated in the sale of that business to FMC Technologies Limited, a subsidiary of TechnipFMC (Paris:FTI, NYSE:FTI) (jointly "TFMC"), in early 2018, the Company has focused on establishing its technology and equipment in other markets including surface production wellheads, subsea and de-commissioning, both organically and through licence partners. Plexus has since re-entered the rental exploration wellhead market with non-POS-GRIP designed equipment following a licence agreement with SLB in August 2021. Further, in November 2020 Plexus entered into a licence agreement with Cameron International Limited, which grants the SLB group company a non-exclusive licence to use the POS-GRIP and HG(R) metal-to-metal seal method of wellhead engineering for the development of conventional and unconventional oil and gas surface production wellheads. The scope of this licence was further expanded in December 2021, and was subsequently extended by a further six years in May 2023.

   (d)   Competitive risk 

The Group operates in highly competitive markets and often competes directly with large multi-national corporations who have greater resources and are more established, and who are more resilient to extended adverse trading conditions. This risk has become more concentrated over recent years as a result of the large oil service company competitors and the target customer base becoming even larger and more influential through a series of mergers and acquisitions. The major oil service and equipment company consolidations have therefore magnified such issues as competitors reduce in number but increase in size, influence, and reach. Unforeseen 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 has an active R&D programme, and maintains an extensive suite of patents and trademarks, and actively continues to develop and improve its IP, including adding to its existing extensive 'know-how' to ensure that it continues to be able to offer unique superior wellhead design solutions.

   (e)   Operational 

Plexus, like many other oil service companies, had to make significant reductions in its workforce numbers over the past few years as a result of a volatile oil price and market challenges and a corresponding reduction in drilling activity and related levels of capex spend. These adverse trading conditions were magnified since early 2020 by the Covid-19 pandemic, which in turn coincided with an acceleration in the world's clearly expressed desire to reduce its dependence on hydrocarbons, particularly following the start of the war in Ukraine in February 2022. However, there are now encouraging signs of a global pick up in drilling activity, although it is possible that the industry and Plexus could experience difficulties in rehiring past or new employees and which could deprive Plexus of the key personnel necessary for expanding operational activities, as well as R&D initiatives, at the rate that may be required. To help mitigate this risk, Plexus has developed effective recruitment and training procedures, which combined with the appeal of working in a company with unique technology and

engineering solutions will hopefully help to mitigate such risks. In addition, there are signs that certain pressure groups such as Just Stop Oil and Extinction Rebellion are increasing their level of activity, and this may also impact on oil and gas investment and drilling activities, at least in the West.

   (f)    Going Concern, liquidity, and finance requirements 

In an economic and global geopolitical climate that in many ways remains uncertain, it has become increasingly possible for potential sources of finance to be closed to businesses for a variety of reasons that have not historically been an issue. Some of these may even relate to the lender itself in terms of its own capital ratios and lending capacity where financial pressures and constraints can apply. Also, Plexus' smaller market cap can be a negative factor if consideration is given to raising additional funds in the public markets. Furthermore, a number of large and influential institutions have actively divested oil and gas investments and declared that further investments and funding will not be made available for oil and gas projects as a result of climate change concerns and as part of the move to net zero. Positively however there are signs that the capital markets are once again opening up to oil services companies should raising capital be necessary. The Group undertakes cashflow forecasting throughout the year to ensure the going-concern assumption is still appropriate. The recent raising of funds from convertible loans, and the sale of Treasury shares is an example of this and helps to ensure the Group has adequate working capital headroom to see it through the next 12 months. However as disclosed in note 1b the group is reliant on raising additional funding, an event that was indicated at the time the convertible loan arrangements were entered into in October 2022, and there can be no certainty regarding the timing and quantum of future funding and therefore this indicates a material uncertainty which may cast significant doubt regarding the Group's ability to continue as a going concern.

   (g)   Credit 

The main credit risk is attributable to trade receivables. Where the Group's customers are large international oil and gas companies the risk of non-payment is significantly reduced, and therefore is more likely to be related to client satisfaction and potentially in a volatile world trade sanction issue. Where smaller independent oil and gas companies are concerned, credit risk can be a factor. Customer payments can potentially involve extended periods of time especially from countries where exchange control regulations can delay the transfer of funds outside those countries. As Plexus begins to establish international licensee relationships there may be instances whereby certain capital and royalty payments could be due some way into the future and as such greater credit risk than exists under normal payment terms could apply. The Group's exposure to credit risk is monitored continuously, and to date its collections record has been extremely reliable.

   (h)     Risk assessment 

The Board has established an on-going process for identifying, evaluating, and managing the more significant risk areas faced by the Group. One of the Board's control documents is a detailed "Risks assessment & management document," which categorises risks in terms of - business (including IT), compliance, finance, cash, debtors, fixed assets, other debtors/prepayments, creditors, legal, and personnel. These risks are assessed and updated as and when appropriate and can be associated with a variety of internal and external sources including regulatory requirements, disruption to information systems including cyber-crime, control breakdowns and social, ethical, environmental and health and safety issues.

   (i)      COVID-19 

Although the regulations around COVID-19 were relaxed in 2022, Plexus continues to place the health and safety of its employees as its highest priority and in line with this has implemented various protocols. The Board continuously monitors the situation, should Government guidance change.

Section 172 Statement

This section serves as the section 172 statement and should be read in conjunction with the full Strategic Report and the Corporate Governance Report. Section 172 of the Companies Act 2006 requires directors to take into consideration the interests of stakeholders in their decision making. The Directors continue to have regard to the interests of the Company's employees and other stakeholders, including shareholders, customers and suppliers, Licence Partners and the community and environment, through positive engagement and when making decisions. Acting in good faith and fairly between members, the Directors consider what is most likely to promote the success of the Company for its members in the long term and to protect the reputation of the Company.


Plexus seeks to develop an investor base of long-term shareholders that are aligned to our strategy, whether institutional or private retail investors. By communicating our strategy and objectives, we seek to maintain continued support from our investor base. Such opportunities have been made more challenging by the financial performance of Plexus over the past few years, and the resultant decline in the size of the market cap of the business. However, now that positive news flow is beginning to be generated the Directors believe that a fresh approach can be made to the investment community both to existing and new potential shareholders in conjunction with its advisors. Important issues include financial stability and the strength of the balance sheet and protecting and strengthening the value of our intellectual property. Engagement with shareholders is a key element to this objective and methods of engagement are detailed in the Corporate Governance Report, although over the past years, as a result of the Covid pandemic's impact on working practices, such interactions in common with many other businesses have lessened. Encouragingly there are signs that "normal" interaction levels will begin to reassert themselves. During the year, the Finance Director supported by other members of the executive team, the Company's broker, and the Investor Relations advisor, engaged where possible with investors by email, presentations, direct conversations, and ad-hoc meetings. The Company also continues to update its website to provide investors and other stakeholders with access to information about the Company. The website includes details of the LSE "Green Economy Mark" status, which was awarded in July 2021, and associated NetZero commentary. During the year, several key decisions were made by the Board, including the raising of funds through the issue of GBP1.55m of Convertible Loan Notes; the sale of a leasehold interest along with associated leasehold liabilities for GBP1m cash and post year the entering into loan agreements with a total of GBP700k. All of these fund-raising related decisions are aimed at increasing shareholder value.


The Group's UK staff are engaged by the Company's subsidiary Plexus Ocean Systems Limited based in Aberdeen, Scotland. Being a relatively small company with just over 30 employees largely operating in one location, there is a high level of visibility regarding employee engagement and satisfaction. The Company is engaged with a specialist firm of benefits advisers who can offer a comprehensive service to employees as well as to the Company. The Company consults with employees on matters of competency, training, and health and safety as detailed in the Corporate Governance Report. During the year, the Company successfully achieved eight continuous years with no Lost Time Incidents (LTI's) and this successful safety culture has continued beyond that anniversary to the date of writing.

Customers and Suppliers

The Company is committed to acting ethically and with integrity in all business dealings and relationships. Fostering good business relationships with key stakeholders including customers and suppliers is important to the Company's success. The Board seeks to implement and enforce effective systems and controls to ensure its supply chain is maintaining the highest standard of business conduct in line with best practice including in relation to anti-bribery and modern slavery.

Licence Partners

The Company engages with Licence Partners in a way that follows the same principles as those applied to relationships with other customers and suppliers. Additionally, the Company engages with its Licence Partners to support their efforts to achieve commercial success by holding as and when required technical workshops, technical training, and data transfer. Following the announcement in November 2020 of entering into a non-exclusive surface wellhead licencing agreement with Cameron (SLB) and the extension of this agreement in December 2021, regular Teams meetings and occasional face to face meetings have been held as part of the process of transferring Plexus' relevant IP so that Cameron can design and develop its own low-cost wellhead with POS-GRIP technology inside. In May 2023 SLB exercised its option to extend its non-exclusive licence agreement with Plexus for an additional six years effective from November 2023.

Community and Environment

The Company has minimal environmental impact in the localities in which it operates. This clearly helps the Company meet its corporate objectives in this regard but is never taken for granted. In the year under review, the Company met its target for waste management and in general continues to operate in a manner that is open, honest, and socially responsible.

G Stevens


28 November 2023

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2023

                                           Notes       2023       2022 
                                                    GBP'000    GBP'000 
 Revenue                                     1        1,487      2,306 
 Cost of sales                                        (400)      (813) 
                                                    -------    ------- 
 Gross profit                                         1,087      1,493 
 Administrative expenses                            (5,348)    (5,784) 
                                                    -------    ------- 
 Operating loss                                     (4,261)    (4,291) 
 Finance income                                           7        164 
 Finance costs                                        (175)      (640) 
 Share in profit of associate                           182        111 
 Other income                                            69        125 
 Non-recurring item 
 Fair-value adjustment on asset held 
  for sale                                             (50)    (1,025) 
                                                    -------    ------- 
 Loss before taxation                               (4,228)    (5,556) 
 Income tax credit / (charge)                3          213    (1,901) 
                                                    -------    ------- 
 Loss for year                                      (4,015)    (7,457) 
 Other comprehensive income                               -          - 
                                                    -------    ------- 
 Total comprehensive 
  Loss for the year attributable to the 
  owners of the parent                              (4,015)    (7,457) 
                                                    -------    ------- 
 Loss per share                              5 
 Basic                                              (4.00p)    (7.42p) 
 Diluted                                            (4.00p)    (7.42p) 

Consolidated Statement of Financial Position

at 30 June 2023

                                        Notes       2023       2022 
                                                 GBP'000    GBP'000 
 Goodwill                                            767        767 
 Intangible assets                        6        8,731      9,165 
 Property, plant and equipment            7        1,404        821 
 Financial assets                        10            -        101 
 Investment in associate                  9            -        723 
 Right of use asset                                  638        941 
                                                 -------    ------- 
 Total non-current assets                         11,540     12,518 
                                                 -------    ------- 
 Asset held for sale                      8          905      1,100 
 Corporation tax                                     153          - 
 Inventories                                       2,265      1,394 
 Trade and other receivables                       2,318        971 
 Cash and cash equivalents                         1,449      5,840 
                                                 -------    ------- 
 Total current assets                              7,090      9,305 
                                                 -------    ------- 
 Total assets                                     18,630     21,823 
                                                 -------    ------- 
 Equity and liabilities 
 Called up share capital                 11        1,054      1,054 
 Shares held in treasury                 12      (2,500)    (2,500) 
 Share based payments reserve                        674        674 
 Retained earnings                                12,292     16,307 
                                                 -------    ------- 
 Total equity attributable to equity 
  holders of the parent                           11,520     15,535 
                                                 -------    ------- 
 Convertible loans                       14        1,702          - 
 Lease liabilities                                   428        761 
                                                 -------    ------- 
 Total non-current liabilities                     2,130        761 
                                                 -------    ------- 
 Trade and other payables                          4,647      1,245 
 Lease liabilities                                   333        324 
 Bank Lombard facility                                 -      3,958 
                                                 -------    ------- 
 Total current liabilities                         4,980      5,527 
                                                 -------    ------- 
 Total liabilities                                 7,110      6,288 
                                                 -------    ------- 
 Total equity and liabilities                     18,630     21,823 
                                                 -------    ------- 

Consolidated Statement of Changes in Equity

for the year ended 30 June 2023

                                Called      Shares   Share Based    Retained     Total 
                                    Up     Held in      Payments    Earnings 
                         Share Capital    Treasury       Reserve 
                               GBP'000     GBP'000       GBP'000     GBP'000   GBP'000 
 Balance as at 30 
  June 2021                      1,054     (2,500)           674      23,764    22,992 
 Total comprehensive 
  loss for the year                  -           -             -     (7,457)   (7,457) 
                               -------     -------       -------      ------    ------ 
 Balance as at 30 
  June 2022                      1,054     (2,500)           674      16,307    15,535 
 Total comprehensive 
  loss for the year                  -           -             -     (4,015)   (4,015) 
                               -------     -------       -------      ------    ------ 
 Balance as at 30 
  June 2023                      1,054     (2,500)           674      12,292    11,520 
                               -------     -------       -------     -------   ------- 

Consolidated Statement of Cash Flows

for the year ended 30 June 2023

                                                             2023       2022 
                                                 Notes    GBP'000    GBP'000 
 Cash flows from operating activities 
 Loss before taxation                                     (4,228)    (5,556) 
 Adjustments for: 
    Depreciation and amortisation charges                   1,560      1,679 
    Redemption premium on convertible loans                   152 
    Profit on disposal of property, plant 
     and equipment                                              -        (4) 
    Share in profit of associate                            (182)      (111) 
    Other income                                             (69)      (114) 
    Lease liability re-assessment                               -          - 
    Fair value adjustment on asset held 
     for sale                                                  50      1,025 
    Impairment of associate                                     -        109 
    Fair value adjustment on financial 
     assets                                                     1        513 
    Investment income                                         (7)      (164) 
    Interest expense                                           23        127 
 Changes in working capital: 
    Increase in inventories                                 (871)      (819) 
    (Increase) / decrease in trade and 
     other receivables                                    (1,347)         80 
    Increase in trade and other payables                    3,401        602 
                                                          -------    ------- 
 Cash used in operating activities                        (1,517)    (2,633) 
 Income taxes refunded / (paid)                                80        (2) 
                                                          -------    ------- 
 Net cash used in operating activities                    (1,437)    (2,635) 
                                                          -------    ------- 
 Cash flows from investing activities 
 Funds divested from financial instruments                    102      2,428 
 Property rental and dilapidations income                      50        114 
 Purchase of intangible assets                              (516)      (447) 
 Purchase of property, plant and equipment                  (890)      (253) 
 Preparation costs for asset held for 
  sale                                                          -      (180) 
 Proceeds of sale of property, plant 
  and equipment                                             1,052          3 
 Interest and investment income received                        7        164 
                                                          -------    ------- 
 Net cash (used) / generated in investing 
  activities                                                (195)      1,829 
                                                          -------    ------- 
 Cash flows from financing activities 
 (Repayment) / draw down of Lombard 
  facility                                                (3,958)      1,914 
 Funds raised from convertible loans                        1,550          - 
 Repayments of lease liabilities                            (347)      (347) 
 Interest paid                                                (4)       (96) 
                                                          -------    ------- 
 Net cash (outflow) / inflow from financing 
  activities                                              (2,759)      1,471 
                                                          -------    ------- 
 Net (decrease) /increase in cash and 
  cash equivalents                                        (4,391)        665 
 Cash and cash equivalents at 1 July 
  2022                                                      5,840      5,175 
                                                          -------    ------- 
 Cash and cash equivalents at 30 June 
  2023                                           15         1,449      5,840 
                                                          -------    ------- 

Notes to the Consolidated Financial Statements

   1.         Revenue 
                            2023      2022 
                         GBP'000   GBP'000 
 By geographical area 
 UK                          963     1,984 
 Europe                      524       277 
 Rest of World                 -        45 
                           -----     ----- 
                           1,487     2,306 
                           -----     ----- 

The revenue information above is based on the location of the customer.

                                        2023      2022 
                                     GBP'000   GBP'000 
 By revenue stream 
 Rental                                  589       417 
 Service                                 146       167 
 Sold equipment                          540     1,289 
 Royalty fees                              -       277 
 Rebillables                              36        24 
 Support services and engineering        176       132 
                                       -----     ----- 
                                       1,487     2,306 
                                       -----     ----- 

Substantially all of the revenue in the current and previous periods derives from the sale, short-term rentals and the provision of services relating to the Group's patent protected equipment.

2. Segment Reporting

The Group derives revenue from the sale of its POS-GRIP technology and associated products, the rental of equipment utilising the POS-GRIP technology and service income principally derived in assisting with the commissioning and on-going service requirements of our equipment. These income streams are all derived from the utilisation of the technology which the Group believes is its only segment.

Per IFRS 8, the operating segment is based on internal reports about components of the group, which are regularly reviewed and used by the board of directors being the Chief Operating Decision Maker ("CODM").

All of the Group's non-current assets are held in the UK.

The following customers each account for more than 10% of the Group's continuing revenue:

                  2023      2022 
               GBP'000   GBP'000 
 Customer 1        524     1,471 
 Customer 2        444       277 
 Customer 3        235         - 
 Customer 4        156         - 
   3.   Income tax credit 
 (i) The taxation (credit) / charge                   2023      2022 
  for the year comprises: 
                                                   GBP'000   GBP'000 
 UK Corporation tax: 
 Adjustment in respect of prior years                (217)         - 
                                                     -----     ----- 
                                                     (217)         - 
                                                     -----     ----- 
 Foreign tax 
 Current tax on income for the year                      -         2 
                                                     -----     ----- 
                                                         -         2 
                                                     -----     ----- 
 Total current tax (credit) / charge                 (217)         2 
                                                     -----     ----- 
 Deferred tax: 
 Origination and reversal of timing differences          4      (14) 
 Deferred tax asset write-down                           -   (1,866) 
 Adjustment in respect of prior years                    -      (23) 
                                                     -----     ----- 
 Total deferred tax                                      4   (1,903) 
                                                     -----     ----- 
 Total tax credit                                    (213)   (1,901) 
                                                     -----     ----- 
 The effective rate of tax is 20.50% 
  (2022: 19%) 
 (ii) Factors affecting the tax charge                2023      2022 
  on continuing activities for the year 
                                                   GBP'000   GBP'000 
 Loss on ordinary activities before tax            (4,228)   (5,784) 
 Tax on (loss)/profit at standard rate 
  of UK 
  corporation tax of 20.50% (2021: 19%)              (867)   (1,098) 
 Effects of: 
 Fixed asset differences                                18         - 
 Expenses not deductible for tax purposes              133       282 
 Effect of change in tax rate                        (171)     (257) 
 Tax adjustments on share-based payments 
 Adjustments in respect of prior year                (217)      (22) 
 Foreign tax rates 
 Deferred tax asset write-down                           -   (1,866) 
 Deferred tax not recognised                           891     1,060 
                                                     -----     ----- 
 Total tax credit                                    (213)   (1,901) 
                                                     -----     ----- 
 (iii) Movement in deferred tax asset           2023      2022 
                                             GBP'000   GBP'000 
 Deferred tax asset at beginning of year           -   (1,899) 
 Debit to Statement of Comprehensive 
  Income                                           -     1,899 
                                               -----     ----- 
 Deferred asset at end of year                     -         - 
                                               -----     ----- 
 (iv) Deferred tax asset balance             2023      2022 
                                          GBP'000   GBP'000 
 The deferred tax asset balance is made 
  up of the following items: 
 Difference between depreciation and        2,055         - 
  capital allowances 
 Tax losses                               (2,055)         - 
                                            -----     ----- 
 Deferred tax asset at end of year              -         - 
                                            -----     ----- 

As outlined in the accounting policy (note 1f) deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available. The deferred tax asset relates to losses to the value of the deferred tax losses and is reviewed at the end of each reporting period. The Group has previously recognised a deferred tax asset based upon its mid-term forecast profitability. On the basis losses have not been utilised in the current financial year management consider that the probable threshold is not met and have released the asset to the extent there are not sufficient taxable temporary differences. Once this threshold can be demonstrated an asset will be recognised. At 30 June 2023 the Group has tax losses available of GBP24.5m (2022: GBP21.5m).

4. Loss per share

                                                 2023          2022 
                                              GBP'000       GBP'000 
 Loss attributable to shareholders            (4,015)       (7,457) 
                                               Number        Number 
 Weighted average number of shares in 
  issue                                   100,435,744   100,435,744 
 Dilution effects of share schemes                  -             - 
                                           ----------    ---------- 
 Diluted weighted average number of 
  shares in issue                         100,435,744   100,435,744 
                                           ----------    ---------- 
 Loss per share 
 Basic Loss per share for continuing 
  operations                                  (4.00p)       (7.42p) 
 Diluted Loss per share for continuing 
  operations                                  (4.00p)       (7.42p) 
                                               ------        ------ 

Basic loss per share is calculated on the results attributable to ordinary shares divided by the weighted average number of shares in issue during the year.

Diluted earnings per share calculations include additional shares to reflect the dilutive effect of share option schemes. As a loss was made on continuing operations for the current year the option schemes are considered to be anti-dilutive.

5. Intangible Assets

                          Intellectual      and Other     Computer 
                              Property    Development     Software     Total 
                               GBP'000        GBP'000      GBP'000   GBP'000 
 As at 30 June 2021              4,600         13,690          261    18,551 
 Additions                           -            447            -       447 
 Disposals                           -              -         (17)      (17) 
                                 -----          -----        -----     ----- 
 As at 30 June 2022              4,600         14,137          244    18,981 
 Additions                           -            516            -       516 
                                 -----          -----        -----     ----- 
 As at 30 June 2023              4,600         14,653          244    19,497 
                                 -----          -----        -----     ----- 
 As at 30 June 2021              3,550          5,098          259     8,907 
 Charge for the year               238            687            1       926 
 On disposals                        -              -         (17)      (17) 
                                 -----          -----        -----     ----- 
 As at 30 June 2022              3,788          5,785          243     9,816 
 Charge for the year               238            712            -       950 
                                 -----          -----        -----     ----- 
 As at 30 June 2023              4,026          6,497          243    10,766 
                                 -----          -----        -----     ----- 
 Net Book Value 
 As at 30 June 2023                574          8,156            1     8,731 
                                 -----          -----        -----     ----- 
 As at 30 June 2022                812          8,352            1     9,165 
                                 -----          -----        -----     ----- 

When assessing the carrying value of the Group's assets the key assumptions on which the valuation is based are that:

-- Industry acceptance will result in continued growth of the business above long-term industry growth rates Management considers this to be appropriate for a new technology gaining industry acceptance,

   --     Prices will rise with inflation, 

-- Costs, in particular direct costs and staff costs are based on past experiences, and management's knowledge of the industry,

These assumptions were determined from the directors' knowledge and experience.

The value in use calculation is based on cash flow forecasts derived from the most recent financial model information available. Although the Group's technology is proven and has proven commercial value the exploitation of opportunities beyond the rental wellhead exploration equipment services market are at a relatively early stage and the commercialisation process is expected to be a long term one. Based on the level secured income for the next financial year, management expect this will lead to a wider uptake and acceptance of the of the technology. The cash flow forecasts therefore extend to 2043 to ensure the full benefit of all current projects is realised. The rationale for using a timescale up to 2043 with growth projections which increase in the first five years and decline thereafter, is that as time progresses, Plexus expects to gain an increasing foothold in the surface, subsea and other equipment markets, including the recent re-entry into the Jack-up exploration rental wellhead sector. As the Group is starting from a base point of trading the growth rates are expected to be high in the initial years (varying from 50% to 400% depending on the model employed) then in later years where the technology becomes established the expected rate of growth declines (varying from 5% to 10 depending on the model employed).

The key assumptions used in these calculations include discount rate (10.87%), revenue projections, growth rates, expected gross margins and the lifespan of the Group's technology.

Management estimates the discount rates using pre-tax rates that reflect current market assessments of the time value of money and risks specific to the Group and the markets in which it operates. Revenue projections, growth rates, margins and technology lifespans are all estimated based on the latest business models and the most recent discussions with customers, suppliers and other business partners.

Management regularly assesses the sensitivity of the key assumptions, including a sensitivity analysis, and the probability that any of them would change to the degree that the carrying value would exceed the recoverable amount. It would require significant adjustments to key assumptions before the goodwill and other intangibles would be impaired.

Patent and other development costs are internally generated Note 1h provides additional information on intangible assets.

6. Property plant and equipment

                                     Tenant                           Assets            Motor 
                      Buildings    Improvements     Equipment    under construction    vehicles     Total 
                       GBP000         GBP000         GBP000            GBP000           GBP000      GBP000 
 As at 30 June 
  2021                    3,740             714         5,561                     -          17     10,032 
 Additions                    -             130            69                    54           -        253 
 Transfers                    -               -            54                  (54)           -          - 
  to assets held 
  for sale              (3,055)               -           (3)                     -           -    (3,058) 
 Disposals                    -               -         (321)                     -           -      (321) 
                          -----           -----         -----                 -----       -----      ----- 
 As at 30 June 
  2022                      685             844         5,360                     -          17      6,906 
 Additions                    -              15       123                       752           -        890 
 Transfers                    -               -           367                 (367)           -          - 
                          -----           -----         -----                 -----       -----      ----- 
 As at 30 June 
  2023                      685             859         5,850                   385          17      7,796 
                          -----           -----         -----                 -----       -----      ----- 
 As at 30 June 
  2021                    1,643             566         4,851                     -          11      7,071 
 Charge for 
  the year                  153              40           252                     -           4        449 
  to assets held 
  for sale              (1,111)               -           (3)                     -           -    (1,114) 
 On disposals                 -               -         (321)                     -           -      (321) 
                          -----           -----         -----                 -----       -----      ----- 
 As at 30 June 
  2022                      685             606         4,779                     -          15      6,085 
 Charge for 
  the year                    -              74           231                     -           2        307 
                          -----           -----         -----                 -----       -----      ----- 
 As at 30 June 
  2023                      685             680         5,010                     -          17      6,392 
                          -----           -----         -----                 -----       -----      ----- 
 Net book value 
 As at 30 June 
  2023                        -             179           840                   385           -      1,404 
                       -----              -----         -----                 -----       -----      ----- 
 As at 30 June 
  2022                        -             238           581                     -           2        821 
                          -----           -----         -----                 -----       -----      ----- 

The value in use of property, plant and equipment is not materially different from the carrying value.

7. Asset held for sale

                                                 2023      2022 
                                              GBP'000   GBP'000 
 Cost                                               -     3,058 
 Accumulated depreciation                           -   (1,114) 
                                                -----     ----- 
 Reclassified from investment in associate        905         - 
 Net book value                                     -     1,944 
 Preparation costs                                  -       172 
 Cost of sale                                       -         9 
                                                -----     ----- 
 Fair value adjustment                              -   (1,025) 
                                                -----     ----- 
  Fair value                                      905     1,100 
                                                -----     ----- 

During the year the Directors were committed to a plan to sell the Group's investment in associate (note 13), this along with the other recognition criteria included within "IFRS 5, Non-current assets held for sale and discontinued operations" including the asset being available for immediate sale in its present condition and the sale is considered to be highly probable meant the asset has been presented as an asset held for sale.

The asset held for sale in the prior year relates to a property that was sold on 28 February 2023 for a consideration of GBP1.05m. The Group had agreed a sale in principle in the prior year. The building was previously marketed for sale. In line with IFRS5 the asset was held for sale at the lower of its carrying value and fair value. A further fair value adjustment of GBP50k to reduce the carrying value of the asset to its fair value has been recognised in the current financial year.

8. Investment in associate

 Investment in associate at 30 June 
  2021                                      721 
 Share of profit for the period             111 
 Impairment of investment                 (109) 
 Investment in associate at 30 June 
  2022                                      723 
 Share of profit for the period             182 
 Reclassified to asset held for sale 
  (note 15)                               (905) 
 Investment in associate at 30 June           - 

On 14 December 2018 Plexus Ocean Systems Limited acquired a 49% interest in Kincardine Manufacturing Services Limited ("KMS") for a consideration of GBP735k plus associated legal fees. KMS are a precision engineering company which serves the oil and gas industry. This is viewed as a long-term strategic investment by Plexus. KMS are based at Sky House, Spurryhillock Industrial Estate, Stonehaven, Aberdeenshire AB39 2NH.

Following the investment Graham Stevens PLC Finance Director was appointed to the board of KMS. The company remains under the control and influence of the 51% majority shareholders.

On 30 June 2023, an impairment review has been undertaken. The investment has been valued using a profit after tax earnings model. This highlighted no impairment charge was required.

9. Financial Assets

                                           2023      2022 
                                        GBP'000   GBP'000 
 Financial instruments held at fair 
  value                                       -       101 
                                          -----     ----- 
                                              -       101 
                                          -----     ----- 

The financial asset related to cash invested in an investment portfolio, made up of high-yield bonds held at fair value in the statement of financial position. The portfolio was fully divested in the year. Included in the statement of comprehensive income is a write-down in the carrying value of the financial asset of GBP1k (2022: GBP513k).

   10.            Share Capital 
                                               2023      2022 
                                            GBP'000   GBP'000 
 Equity: 110,000,000 (2022: 110,000,000) 
  Ordinary shares of 1p each                  1,100     1,100 
                                              -----     ----- 
 Allotted, called up and fully paid: 
 Equity: 105,386,239 (2022: 105,386,239) 
  Ordinary shares of 1p each                  1,054     1,054 
                                              -----     ----- 
   11.            Shares held in treasury 
                         2023      2022 
                      GBP'000   GBP'000 
 Buyback of shares      2,500     2,500 
                        -----     ----- 

On 1 February 2019 Plexus Holdings PLC completed the acquisition of 4,950,495 Ordinary Shares beneficially held by LLC Gusar. Following the above transaction, the Company's issued share capital comprises 105,386,239 Ordinary Shares, of which 4,950,495 Ordinary Shares are held in treasury. The Company now has a total of 100,435,744 Ordinary Shares in issue with voting rights. This figure, 100,435,744, should be used by shareholders as the denominator when determining whether they are required to notify their interest in, or a change to their interest in the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules. Post year end Plexus sold 2,750,000 of the treasury shares.

   12.            Reconciliation of net cash flow to movement in net cash/debt 
                                              2023      2022 
                                           GBP'000   GBP'000 
 Movement in cash and cash equivalents     (4,391)       665 
 Repayment / (drawdown) of Lombard 
  facility                                   3,958   (1,914) 
                                             -----     ----- 
 (Decrease) in net cash in year              (433)   (1,249) 
 Net cash at start of year                   1,882     3,131 
                                             -----     ----- 
 Net cash at end of year                     1,449     1,882 
                                             -----     ----- 
   13.            Analysis of net cash/(debt) 
 2023:                       At beginning   Cashflow   At end of 
                                  of year                   year 
                                  GBP'000    GBP'000     GBP'000 
 Cash in hand and at bank           5,840    (4,391)       1,449 
 Bank Lombard facility            (3,958)      3,958           - 
 Lease Liability                  (1,085)        324       (761) 
                                    -----      -----       ----- 
 Total                                797      (109)         688 
                                    -----      -----       ----- 
 2022:                       At beginning   Cashflow   At end of 
                                  of year                   year 
                                  GBP'000    GBP'000     GBP'000 
 Cash in hand and at bank           5,175        665       5,840 
 Bank Lombard facility            (2,044)    (1,914)     (3,958) 
 Lease Liability                  (1,401)        316     (1,085) 
                                    -----      -----       ----- 
 Total                              1,730      (933)         797 
                                    -----      -----       ----- 
   14.            Convertible loans 
                               2023      2022 
                            GBP'000   GBP'000 
 Convertible loans issued     1,550         - 
 Redemption premium             152         - 
                              -----     ----- 
                              1,702         - 
                              -----     ----- 

In October 2022 Plexus raised GBP1,550,000 through the issue of 1,550,000 convertible loan notes. The loan notes are non-interest bearing and have a maturity date being 24 months after issue.

The loan notes can be settled in cash, with an additional 20% redemption interest on the principal amount or converted into new shares where the principal amount will be settled at a 20% discount to the share price paid by investors in a qualifying financing even. The 20% discount noted about equates to a 25% premium on the principal amount. Therefore, a redemption premium of GBP387,500 will be recognised over the two-year term. At the reporting date finance costs include GBP152k in relation to the accrued redemption premium.

The financial information above does not constitute the company's statutory accounts for the year ended 30 June 2023 but is derived from those statements.

The statutory financial statements and this preliminary statement for the year ended 30 June 2023 were approved by the Board on 28 November 2023 . On the same date the company's auditors, Crowe U.K. L.L.P issued an unqualified report on those financial statements. The audit report includes a material uncertainty related to going concern. Attention is drawn to note 1(b) in the financial statements, which indicates that the Group and Parent Company will require further funding to continue its operations and meet its obligations. As stated in note 1(b), these events or conditions, along with the other matters as set forth in note 1(b), indicate that a material uncertainty exists that may cast significant doubt on the Group's and company's ability to continue as a going concern. The auditors' opinion is not modified in respect of this matter.

The financial information for the year ended 30 June 2023 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not draw attention to any matters be way of emphasis and not contain a statement under s498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation. The Company's financial statements have been prepared in accordance with International Financial Reporting Standards, as adopted by the EU. A copy of the statutory accounts will be delivered to the Registrar of Companies in due course.

The Annual Report will be circulated to all shareholders and thereafter, copies will be available from the registered office of the company, Highdown House, Yeoman Way, Worthing, West Sussex, BN99 3HH.

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(END) Dow Jones Newswires

November 29, 2023 02:00 ET (07:00 GMT)

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