Plexus Juice Cactus Juice

POS Partnership with NYSE:WHD - a potential takeover target?

Dear reader

POS is trading at around the same level as early 2023 witnessing a decline since a hiatus in late 2023. Mega ouch for people who bought at those prices.

What does the agreement with Cactus Wellhead LLC means for Plexus Holdings PLC (AIM: POS) across financial, operational, and strategic metrics?

1. Financial Impact:

POS “1H26” results to 31/12/25

• Plexus reported just £1.2m revenue in 1H26 and lost £2.1m blaming slow market conditions. The conditions included Ex-PM Starmer and Ex-Mini 4 Zero Milli.

• POS is a ~£5.4m market cap. The Cactus £2.5m initial contract over two years alongside other work keeps the wolf from the door until 2028. The £1m upfront payment alone approximately equals Plexus’ total business costs for six months. The initial £2.5m engineering contract has formal provision to expand in scope and value during the 2-year testing window depending on customer requirements

• Immediate Cash Inflow & Debt Structure: The initial £1m commitment payment provides immediate cash to the balance sheet.

• Debenture: Cactus required this £1m prepayment be secured via a debenture over all company assets. While standard in large development deals to protect prepayments, it encumbers Plexus’ asset base until the engineering deliverables are discharged over the 2-year window, and this could be seen as a risk and that POS cannot easily leverage its asset base (e.g., inventory or testing rigs) for secondary debt financing, invoice factoring, or bank loans without Cactus' explicit consent.

• The above is in addition to the other contracts orders in 2026. In March 2026 a UKCS operator issued orders under the Framework Agreement for rental wellhead equipment and services for several plug and abandonment (”P&A”) wells expected to generate £1.5m of revenue over a 12 month period, subject to rig schedules and project planning. A North American rental contract has been delayed and now scheduled for deployment in Q1 2027.

• So of POS’ twelve (with four more planned) rental wellheads most appear to be sat around waiting for orders. If all were deployed then this would drive around £15m-£18m of revenue including services and a £6.5m-£8.9m PBT. Of course historically, equipment utilisation in oilfield services rarely runs at 100% capacity due to rig availability, client delays, and maintenance windows. But it running today near zero and there is a mulish belief that North Sea Oil is doomed. BP’s announcement last week of a sale of its North Sea assets is a further blow. But Trump claims PM Burnham has promised to “reopen the North Sea”. Hope remains, and even if not there the world is a big place.

  

  

  This probably means a fast track of Rosebank and Jackdaw but also encouraging tiebacks. Labour face annihilation in Scotland it is said, partly for the actions of its out of touch ex-Minister of Zero Ed Milli (now representing the UK as Foreign Secretary). However many Labour supporters believe we should ban Oil, by instead importing Oil and Gas from overseas because fuels are traded at international prices.

2. Strategic Impact: Commercial Validation & International Reach

• Partnering with a Major US Player:

• Cactus Wellhead LLC is a major international onshore surface wellhead supplier. Partnering with them validates POS core engineering expertise and proprietary wellhead technology (such as POS-GRIP) on an international stage.

• The aim is to support Cactus’ expansion into offshore.

• Possible future distribution Channel / Market Entry: Rather than relying solely on POS direct sales POS secures a potential future route into Cactus’ global customer network both for the developed products with royalties and licences - but possibly a wider agreement might also be reached in the future? Realistically, commercial revenue from JV-developed products under the initial partnership is unlikely to materialise before late 2027 or 2028.

• Cactus recently acquired Baker Hughes Surface Pressure Control which is focused on Hydrogen and CCUS. These are areas where the expertise of Plexus would be very useful.

• Will the Takeover Titan declare Plexus a likely takeover target? If he doesn’t I shall. Plexus seems an obvious match for Cactus.

  

3. Operational Impact: Securing the Aberdeen Base

• Mitigating North Sea Headwinds: UK North Sea offshore investment has faced ongoing pressure due to taxation shifts (Windfall Tax / Energy Profits Levy) and licencing uncertainties.

• Underpinning Infrastructure & Talent: The contract directly funds high-value utilisation of POS operational facilities, testing rigs, and specialist engineering team in Aberdeen over a guaranteed two-year horizon.

• Cactus also have an Aberdeen presence.

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4. Could Emissions Legislation help POS one day?

The EU have new rules due to come into force 1st Jan 2027. All oil and gas imported into the EU must meet Monitoring, Reporting, and Verification (MRV) standards equivalent to strict EU criteria.

It was interesting to listen to Exxon’s CEO who said last week they are not compliant for the new EU emissions rules and therefore shall not sell product from 1st Jan 2027. The EU are now speaking of relaxing the penalty as opposed to cancelling the law. Exxon’s CEO commented we comply with all laws, not just those that carry sufficient penalty - so we will not sell product to the EU if it is not legal to do so.

POS’ leak-free metal-to-metal HG® seals supports methane reduction and are a way to help achieve compliance so will interest in its products grow?

Even in the US where Biden’s IRA has been partly dismantled by Trump, the Methane Waste Emissions remain. In 2026 non-compliance carries a penalty of $1,500/ton per metric ton of methane. A new law in the US (EPA Subpart OOOOb/c) mandates frequent, independent inspections of wellhead seals too.

Conclusion

POS is a £5.4m nano-cap that had tight liquidity, but has secured up to £2.5m in non-dilutive engineering revenue—backed by an upfront £1m cash payment. POS has a proven track record of monetising IP through major licencing deals (e.g., their $5.2m IP licensing agreement with SLB in late 2023 and past deals with TechnipFMC), which proves the business model isn't just theoretical.

This deal leaves all of its twelve wellheads available for hire too with expansion to sixteen, where we know at least one of these is imminently booked out on hire, and another joins later in the year (or early in 2027). Just ten more to go then.

Given the changed political climate for the North Sea, given the new partnership with Cactus and the £2.5m engineering contract, given the compliance issues around Methane but also given the third Gulf War and disruption to the Middle East there are a number of reasons to keep faith with POS.

Regards

The Oak Bloke.

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