Plexus Holdings (AIM:POS) has entered a two-year engineering agreement with Cactus Wellhead to develop and qualify a range of wellhead products for offshore energy applications.
after signing a two-year engineering agreement with Cactus Wellhead. The agreement included an initial £1m commitment payment secured by a debenture, with about £1.5m of further revenue expected over the two-year programme.
The AIM-listed wellhead services business, based in Aberdeen, will receive an initial commitment payment of £1m, secured by a debenture over all of Plexus's assets until the work is discharged.
Additional revenue of approximately £1.5m is expected over the course of the programme, with scope for the work to expand further depending on Cactus's requirements.
Cactus is described as an international service company; the agreement covers engineering, analysis and testing services drawing on Plexus's core wellhead expertise, all carried out at its Aberdeen facility.
Chief executive Craig Hendrie said the award reflects "our reputation for technology excellence and successful product development and qualification testing over many decades", adding that the work helps "continue to retain and build our capabilities in Aberdeen at a time when investment in the North Sea has been under pressure."
Work under the agreement has already begun, with completion of the contracted scope expected within the two-year term.
In London, Plexus shares surged 15.3% to close Monday's trading at 3.4p.
News Intelligence what this means for the company
Plexus Holdings has secured a two-year engineering contract with Cactus Wellhead worth up to £2.5m—£1m upfront (secured by debenture over all assets) plus £1.5m in additional revenue conditional on scope expansion. Work has already begun at its Aberdeen facility. The deal provides near-term cash and anchors headcount in a region where North Sea investment has weakened, but the contract value is modest against the company's small-cap status and the upfront payment carries a material encumbrance on the balance sheet.
The contract demonstrates Plexus can win work in a pressured market and validates its subsea engineering credentials, but without disclosed cash position or leverage metrics. The £1m secured payment is real revenue, yet the conditional £1.5m and scope-expansion upside will need to be proven over time.
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