Drop in profit at Plexus

Plexus reported a two-thirds fall in profit in the year to June 2010 but it says that BP's travails in the Gulf of Mexico have increased the awareness of its POS-GRIP blow-out preventer. Revenues fell from £15.1m to £13.1m with a sharp decline in the UK offset by higher sales in the rest of the world. There was a £1.1m shortfall from a contract which is winding down. R&D spending more than doubled to £750,000. Pre-tax profit dropped from £1.8m to £645,000. The final dividend was edged up from 0.38p a share to 0.39p a share. AIM-quoted Plexus has developed a new type of wellhead connector used in oil and gas exploration drilling. The wellhead is at the surface of the well bore and supports and seals the casings as well as providing the connection to the blow out preventer, which seals the well in an emergency. Plexus argues that its POS-GRIP friction grip technology is better at gripping and sealing than its established rivals. This is because it has no moving parts. A new assembly and test facility opened in Aberdeen in May.Net debt more than doubled to 32.9m at the end of June 2010 as Plexus continued to invest in new equipment but did not generate enough cash to cover that expenditure. The bank facilities were recently renewed. The revolving facility was increased from £4m to £5m and there is an overdraft facility of £1m.