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The analysis consists of three different companies. They operate in oil and
gas sector and we investigated those companies profile which includes
Customers, Market, Growth and Risk and Profitability of the companies.
We have also provided spread sheet analysis of the company for the last
three years and even last year annual report and accounts of each. We
analysed the net asset value per share and share price which represents
an investment opportunity worth pursu.

Plexus Holdings plc
Company overview:
Plexus Holdings PLC (Plexus) is a service oriented company. The company
has developed and patented a method of engineering for oil and gas field
wellheads and connectors, named POS GRIP, which involves deforming
one tubular member against another to effect gripping and sealing. The
company derives its turnover from the sale of its POS-GRIP technology
and associated products, the rental of wellheads utilizing the POS-GRIP
technology and its services. The company also assists with the
commissioning and ongoing service requirements of its equipment. In the
fiscal year 2008, the company had acquired Plexus Deepwater
Technologies Limited along with Plexus Holdings USA, Inc. and Plexus
Ocean Systems US, LLC. The company is headquartered at London in
United Kingdom.

Financial Performance:
The company reported revenues of (British Pounds) GBP 13.28 million
during the fiscal year ended June 2008, an increase of 29.21% over 2007.
The operating profit of the company was GBP 2.11 million during the
fiscal year 2008, an increase of 172.67% over 2007. The net profit of the
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company was GBP 1.29 million during the fiscal year 2008, an increase of
15.50% over 2007.

Products and Services:
The Group markets a patented method of engineering for oil and gas field
wellheads and connectors, named POS-GRIP which involves deforming
one tubular member against another within the elastic range to effect
gripping and sealing. Plexus is a UK based service oriented company. The
companys key products include the following:
POS-GRIP Adjustable Wellhead (13-5/8" 10000 psi)
POS-GRIP HPHT Adjustable Wellhead (15000 psi)
POS-GRIP HG Production Wellhead (18-3/4 15000psi)
POS-GRIP HG Production Wellhead (13-5/8 5000/10000 psi)
(Source: Annual Report, Company Website, Primary and Secondary
Research. Global Markets Direct).

Now-a-days competition in the market for oil and gas industry is
increasing on day to day basis. In such a competitive market the demand
for oil and gas has always been on the rise and will continue. The major
competitors for Plexus Holdings plc are: Caledus Holdings plc and
Lamprell plc. Plexus Holdings plc are committed to oil and gas distribution
model and they deal only through intermediaries and to hold their
competitors, throughout the world regional offices have been opened by
the company. Plexuss main listed US competitors also trade on
substantially lower ratios, however the difference in growth rates between
Plexus and its US competitors is stark, and a clear indication that such a
high PE ratio is justified.

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Risks and Uncertainties:
There are a number of potential risks and uncertainties that could have an
impact on the Groups performance which include the following:
(a) Political risks
Participation in a global market is done where the oil and gas reserves
and their extraction can be severely impacted by changes in the political
and operational landscape. As a supplier to the industry the company can
be adversely affected by such events, as was seen at the beginning of the
year with the disruption caused to North Sea exploration activity as a
result of rig availability shortages. To help address such risks, the Group
has continued to expand its geographic footprint and customer base.
(b) Technology
The Company is still at a relatively early stage in the commercialisation,
marketing and application of its technology. Current and future contracts
may be adversely affected by factors outside the Groups control. These
may include unforeseen equipment design issues, test delays during the
contract and final testing and delayed acceptances of deliveries, which
could lead to possible abortive expenditure, reputational risk and potential
customer claims or onerous contractual terms. Such risks may materially
impact on the Company. To mitigate this risk the Group continues to
invest in developing the technology and has a policy of ongoing training of
our own personnel and where appropriate our customers.
(c) Competitive risk
The Company operates in highly competitive markets and often competes
directly with large multi-national corporations. Product innovation or
technical advances by competitors could adversely affect the Company.
(d) Liquidity and finance requirements
In the current economic climate it has become increasingly possible for
both existing and potential sources of finance to be closed to businesses
for a variety of reasons that have not been an issue in the past. Some of
these may even relate to the lender itself in terms of its own capital ratios
and lending capacity. Although this is a potential risk the Group took
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appropriate steps towards the end of the last calendar year to mitigate
this risk by successfully renewing, increasing, and extending its bank
facilities with the Bank of Scotland Corporate. The successful outcome of
this initiative resulted in a 25% increase in the Groups banking facilities
Structured on a longer term basis of a 4 million credit facility on a three
year revolving basis with an additional 1 million overdraft facility agreed
on a yearly term.

Nature of Average/Transaction:

Plexus has developed a unique enabling technology POS-GRIP, which
has the potential to become a new standard in the oil and gas wellhead
market. The high performance metal-to-metal seals achieved with POS-
GRIP and the simplicity of design lends the technology to a range of
engineering applications. The fact that Plexuss order book contains
repeat orders from existing customers who hold strategic roles in the oil
industry for example BP and ConocoPhillips is testament to the
benefits of the POS-GRIP system. The fundamentals of POS-GRIP are
simple a wedge and taper system on the outside of a housing are
compressed, the wedge is forced downward over a tapered surface and
this, in turn, deforms the outer tube. Because this deformation is within
tolerances of the steel, the deformation is elastic (e.g., its like
squeezing a rubber ball, rather than crushing a plastic cup). Furthermore,
because this deformation is elastic, the compression is a spring-like
movement i.e. if the wedge is forced back to the original position, all
other components will also spring back therefore the compression
process is fully reversible and non-damaging.

Market Volatility:
Estimates of market size rely on interpretation of segmented financial
accounts of the main suppliers and the estimated income derived from
wellhead and associated product sales. We estimate the size of the global
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wellhead market in 2004 to have been c. $3bn with subsea sales of c.
$1.8bn and dry (non-subsea) of c. $1.2bn. The immediate market
opportunity for Plexus and POS-GRIP technology is fixed platform, jack-up
exploration and land based projects. However, the subsea market is a
major area of focus given the large number of deepwater developments
requiring this type of equipment. For example, during the 1980s, c. 50
subsea trees were sold per year versus c. 100 in 1990s. Quest Offshore
Resources10 estimates that from 1999 - 2010, the total global subsea
production capital expenditure will have been c. $22.4bn, with Xmas trees
and control equipment accounting for c.$11bn of that total.

Profits are expected to show sustained growth for the next three years
and beyond, as the high-margin rental business yields strong returns. We
expect overheads to increase as engineering and staff costs grow, and we
forecast that by 2009 an overseas facility may be necessary in order to
leverage the companys foreign markets. Depreciation will impact
profitability heavily rental stock is written off over 7 years straight-line
basis, however as POS-GRIP by its nature is non-deformative, the rental
assets have a lifetime far in excess of that timeframe.

Turnover for the year was 15.1m, up 14% from 13.3m in the previous
year. The rental business and related equipment and services accounted
for over 85% of turnover which was unchanged from last year. Rental of
HP/HT exploration equipment once again generated the largest year on
year sales increase of 35% as Plexus continued to gain market share in
this specialised field. Turnover includes 0.1m of engineering and testing
which is significantly reduced from the prior years level of 1.5m as the
need for ongoing development of POS-GRIP technology reduces as a
result of our technology being developed to a level where we can now
offer POS-GRIP wellhead equipment from inventory across a range of
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Markets served:
The specific attributes of the POS-GRIP wellhead system offer a number
of significant advantages over existing wellhead technology, but
principally relate to performance, safety and cost. These attributes are
particularly relevant to technically challenging well environments such as
the high-energy situations associated with HP/HT projects. Extreme
component stress and the degradation of component materials (due to
elevated temperatures and the effect of corrosive constituents2) are
beyond the limits of current well control equipment. In this respect the
company believes to be uniquely positioned to address these challenges.
In recent years spending has shifted away from mature areas towards
new, large scale projects in deepwater frontiers evidenced by the growth
in subsea completions and deepwater drilling. This trend has been
gathering momentum as mature areas such as the North Sea and shallow
water Gulf of Mexico (GOM) have steadily depleted. We believe
investment by the integrated oil majors is set to rise significantly in order
to meet the challenges to replace reserves and increase production. Out
of necessity operators have moved towards deeper water exploration,
resulting in frontier developments in provinces such as deepwater Gulf of
Mexico, West Africa and Brazil.

Net Asset Value per Share:
Years 2009 2008 2007
Net asset value
336p 318p 263p
(Net Asset Value per share = Net Assets / Total Shares)
As per the analysis of the NAV share (last three years) it gives the rise
from 263p in 2007 to 336 p in 2009, indicating higher NAV per share.
NAV is quite good from 2007-2009 and is expected to be high in coming

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Directors Interest:
The directors who served during the year and to the date of this report
are listed below. The interests of the directors who held office during the
year in the shares of the Company at 30 June 2009 were as follows:
No. Of Ordinary
shares of 1p each,
No. Of Ordinary
shares of 1p each,
Robert Adair1 3,505,425 3,505,425
Ben van Bilderbeek2 60,000,001 60,000,001
Graham Stevens 12600 12600
Craig Hendrie 12600 12600
J Jeffrey Thrall3 60,700,001 60,700,001
Augusto DaMota Nil Nil

Substantial shareholdings and interests:
At the date of this report the Group had been notified that the following
had an interest of 3%ormore of the issued share capital:
% issued share
Mutual Holdings Ltd 60,000,001 74.83
Skye Investments Limited 3,505,425 4.37
The Bank ofNew York
(Nominees) Limited 3,174,800 3.96

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Share Price:
2009 2008 2007
Share price 34p 33.5p 38.5p

The graph above shows that the share price for Plexus Holdings has been
steadily coming down from 25
NOV. till date. However due to subprime
crisis there has been immense fall in the share price for the company.

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NAME OF COMPANY Plexus Holdings plc
Date of balance sheet 30-06-2009 30-06-2008 30-06-2007
(State if qualified) n/q n/q n/q
Currency (in GBP 000's)
Cash & bank 2655 456 128
Prepayments 494 974 1572
Other receivables 0 0 0
Debtors/Accounts Receivable/Bills Receivable 4305 5933 3404
TOTAL QUICK ASSETS 7454 7363 5104
Raw materials & consumables 1389 860 577
Work-in-progress 214 325 27
finished goods & goods for resale (inventory) 2191 2293 2519
investment portfolios of stamps 0 0 0
TOTAL CURRENT ASSETS 11248 10841 8227
Trade & Other Payables 1006 1803 1992
Bank loans & overdrafts 4000 3600 1901
Current portion long term loan 0 0 0
Provisions & charges 0 0 0
Accruals and deferred income 2325 1718 715
Other Current Liabilities 660 510 104
Property & Leasehold Improvements 8355 7329 6549
Reference Stamp Collection(Goodwill) 722 722 722
Intagibles assets 6618 6661 5611
Trade & other receivables 0 0 0
Long term investments 61 0 0

15756 14712 12882
Long term investments 0 0 0
Retirement Benefit Obligation 0 0 0
Defered tax liabilities 546 377 322
Provisions & charges 0 0 0
Minority Interests
Financed by
Share Capital - Issued 802 802 802
Share Premium Account 15596 15596 15596
Capital Reserves(RETAINED EARNING) 1499 787 -501
Distributable Reserves(RETAINED EARNINGS) 570 360 178
Shares to be issued 0 0 0

Check line 0 0 0
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Opening NTA's 0 18467 17545

PBIT / Operating Profit 1942 2105 772
Exceptional items
Investment Income and Interest Receivable 0 0 0
Profit Before Interest Paid 1,942 2,105 772
(Interest Paid) (144) (200) 794
Profit Before Tax (PBT) 1,798 1,905 1,566
(Taxation) (780) (616) (450)
'Attributable Profit/Loss After Tax (APAT) 1,018 1,289 1,116
(Dividends) 0 0 0
Residual Profit/Loss 1,018 1,289 1,116
Asset revaluation 0 0 0
Taxation adjustment 780 (616) (450)
Shares Issued & sold 15,596 1595 2136
Pension Fund Adjustment 0 0 0
Share based payments (acquisitions/employees) 1,073 0 0
Sundry matters (3,190) (4,272)
Closing NTA's 18,467 17,545 16,075
Checkline 0 0 0
Sales 15105 13275 10274
Cost of Goods Sold 6364 6003 5640
Gross Profit 8741 7272 4634
Depreciation 1706 1238 681
Capital Employed 22993 17922 16397
Gross Profit Margin
(Gross Profit Sales x 100 57.9 54.8 45.1
Net Profit Margin
(Residual profit Sales x 100) 6.7 9.7 10.9
Return on Capital Employed
(Profit Before Interest & Tax
Capital Employed )x 100) 8.4 11.7 4.7
Credit Given
(Debtors Sales x 360) 124 128 104
Credit Taken
(Creditors Cost of Goods Sold x 360) 57 108 127
Stock Turnover
(Stock Cost of Goods Sold x 360) 208.54 200.68 141.11

Current Ratio
(Current Assets Current Liabilities) 2.8 1.4 1.7
Liquid Ratio
(Quick Assets Current Liabilities) 1.7 0.8 0.8
Gross Gearing
(Total Borrowings Surplus) 0.00 0.00 0.00
Net Gearing
(Net Borrowings Surplus) 0.00 0.00 0.00
Gearing (Total Liabilties)
Capital Expenditure (per cash flow statement) 0 0 0
Capital Commitments: Contracted 0 0 0
Authorised 0 0 0
Contingent Liabilities: Guarantess 0 0 0
Other 0 0
Leasing Obligations 0 0 0
Directors Remuneration 558 517 417.5
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Ratio Analysis:
1. Profitability ratio
The objective of profitability relates to a companys ability to earn a
satisfactory profit so that the investors and shareholders will continue to
provide capital to it. The gross profit margin for the company rises to 57.9
in 2009 from 54.8 in 2008 whereas the net profit margin decreases from
9.7 to 6.7 due to subprime crisis in the financial markets.
2. Return On Capital Employed (ROCE)
It is impossible to assess profits or profit growth properly without relating
them to the amount of funds (capital) that were employed in making
profits. ROCE is one of the most important profitability ratios which assess
how much the capital invested has earned during the period. ROCE for the
year 2008 being 10.20% went down to 4.30% due to financial crisis.
3. Gross profit margin and Net profit percentage
These ratios are used to measure the financial performance of the
business. The ratios show how aggressive the entity was in its sales
promotion. For service sectors the gross profit margin will not be
calculated as it is not involved in trading activities.

Earnings per share 1.27 1.61 1.8
Return on assets 3.88 5.52 6.05
Return on equity 5.66 7.67 7.21
Return on Capital Employed 4.30% 10.20% 8.90%
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4. Current Ratio
This compares assets which will become liquid within approximately
twelve months with liabilities which will be due for payment in the same
period and is intended to indicate whether there are sufficient short term
assets to meet the short- term liabilities. The current ratio for the
company is 2.8 in 2009 as compared to 1.4 in 2008. Recommended
current ratio being 2:1 this year ratio is quite good for the company as
compared to the last year financial analysis data.
5. Acid Test Ratio
This shows that, provided creditors and debtors are paid approximately
the same time, a view might be made as to whether the business has
sufficient liquid resources to meet its current liabilities. Referring to quick
ratio being 1:1 in nature the quick asset ratio for the company is 1.7 in
2009 as 0.8 in 2008.
6. Inventory turnover ratio
The ratio is aimed at checking how vigorous the entity is trading. It
measures approximately the number of times an entity is able to acquire
the inventories and convert them into sales. In the above the stock
turnover for the company is 208.54 days in 2009 as compared to 200.68
in 2008.
7. Receivable days ratio
Another asset management ratio which is used estimates how long it
takes for the credit customers to settle their balances. As outlined above
it is very difficult to establish the optimum level of receivables days, it will
always depend with the nature of the business an enterprise is involved.
The above company reveals 57 days in 2009 as compared to 108 in 2008
which is quite better in terms of receivables days.
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8. Payable days ratio
Measures how long it takes for an entity to settle its creditors. The
payable days should always be more than the receivable days. the cash
received from the customers will be used in settling the suppliers so it is
imperative that the company should always ensure than they secure more
payable days than the days they allow their customers. In the above
scenario the company takes 124 days in 2009 as compared to 128 days in
9. Earnings per Share
The earnings per share for the company has moved on the declining
trends, as compared to 2008 the earnings per share being 1.61 has fallen
down to 1.27 as due to the financial and subprime crisis which led to
affect the growth of the company.

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Northcote, Annual Report, (2007) [online], Available from:
[Accessed on: 13
February 2010]
OneSource, Plexus Holding plc, [online], Available from:
[Accessed on 14
February 2010]
Google, Plexus Holdings plc, [online], Available from:
[Accessed on 15
February 2010]
Financial Times, Plexus Holdings plc, [online], Available from:
[Accessed on 15
February 2010]
Pandey. I.M (2001), financial management, Eighth Edition, India, Vikas
Publication house Pvt Ltd.
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Holmes, Geoffery, (2005), Interpreting Company reports and
Accounts, Ninth Edition, London, Prentice Hall.