The disposal of the share option includes related interest free loans totalling £200,000, which on exercise of the option would convert into the shares. This transaction results in an £800,000 profit on disposal for Plexus. The £1,000,000 net cash received by Plexus will be used as additional working capital, principally to invest in additional inventory to support its sales growth. The unaudited short form management accounts of the private engineering business for the financial year-end February 28, 2007 reported that the business generated a trading profit after tax of £286,000.
Plexus CEO Ben van Bilderbeek said, "I am pleased to announce the disposal of this non-core asset, which has proven to be an excellent investment for Plexus. The proceeds of the sale will principally be re-invested in additional inventory to accelerate the expansion of our overseas activities, where recognition for our proprietary method of engineering continues to gain momentum.
"At the same time I can report that the Company is trading in line with the Board's expectations."
Plexus, which began trading on AIM in December 2005, is an established oil and gas engineering, and services business based in Aberdeen, with an office in London and a presence in Houston, Texas. It has developed and patented a method of engineering for oil and gas field wellheads and connectors, Pos-Grip, which involves deforming one tubular member against another to effect gripping and sealing.
Pos-Grip wellhead systems have to date been used in over 100 oil and gas wells by international companies including BHP Billiton, BP, Brunei Shell Petroleum, ConocoPhillips, Gaz de France, Global Santa Fe, Maersk, Petro-Canada Trinidad & Tobago, Talisman Energy, Tullow Oil, and Wintershall.
The Group plans to accelerate the roll out of Pos-Grip technology as an alternative to current wellhead technology. It has particular advantages in HP/HT oil and gas environments for which there is increasing demand throughout the world. The Company's long-term goal is to develop Pos-Grip technology as the future industry standard for wellhead design. This objective includes the distribution of the technology through licensees to maximize market penetration.
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