Getech Group plc
("Getech" or the "Company")
Pre-Close Trading update
Getech (AIM; GTC), the geoscience business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, provides a pre-close trading update for the year ended 31 July 2014.
Pre-Close Trading update to 31 July 2014
As referred to in the trading update on 10 June 2014, the first part of the financial year witnessed lower spending across the whole oil and gas exploration sector.
However, as anticipated in the trading update on 10 June 2014, the Company had a strong end to its financial yearand subsequently signed several new Globe, data and study contracts with an aggregate value in excess of $5m.
Provisional results for the 12 months to 31 July 2014
Unaudited preliminary results for the financial year are expected to show revenue of £6.6m, profit before tax of £1.0m, profit after tax of £1.4m and an estimated EPS of 4.6p.
As at 31 July 2014, the Company held cash reserves of £3.4 million which, along with committed income for the next period of Globe and other projects, provides a strong balance sheet for expanding current operations, developing new business streams related to our current activities and to consider strategic acquisition targets.
The Company recently retained specialist advice with regard to the UK Science and Technology Research and Development Tax Credits ("R&D Tax Credits") and expects to receive significant retrospective tax credits for the previous two financial periods. The provisional figures above include the impact of the anticipated tax credits. The Company also believes that it will be eligible for R&D Tax Credits at similar levels for the year 2013/14 and future financial years.
Outlook
Looking forward, the Company remains well placed for growth:
· The Company's market leading gravity and magnetic data continue to provide a major source of income, with the US gravity data being particularly strong due to ongoing growth in expenditure focussed on onshore unconventional gas and oil. The Company is also seeing the results of investment in leading edge technology such as the multi-satellite gravity data project.
· The Company is seeing strong demand for its consultancy services and is confident that this will continue to grow in the current financial period
· The first three-year period of Globe was completed successfully in July 2014 and the Company already has a significant number of commitments to the second period of Globe, with further sales expected. It also anticipates significant additional sales of Globe in its regional format, which makes it more attractive to a wider range of clients.
Raymond Wolfson, Chief Executive of Getech Group plc, said: "The tight exploration market during the period since early 2013 made trading for many exploration service companies very difficult. While we were similarly affected, we have seen a significant upturn in recent weeks and consider that, under the challenging business environment, we have delivered a strong set of results.
"Looking forward, our Globe framework provides a unique opportunity from which we can deliver bespoke client solutions. We have entered the second three-year build period and can now target a wider market by providing Globe in a regional as well as global format. We believe the regional format will appeal to a range of client companies who wouldn't normally buy global scale products, and to additional business units within our existing Globe clients. As a result, we anticipate that these regional products will be a substantial source of income in the coming years. Initial client discussions confirm the value of this approach, particularly in the current exploration market.
"With the availability of Globe in regional format, the growing library of study products and the increasing levels of consultancy work, there is a requirement for additional sales resource. We have therefore recruited two further sales staff and are actively seeking at least one more.
"We ended the year 2013/14 with strong sales performance. We enter the new financial year with a sound balance sheet, an increased product library, an enlarged sales team, and with confidence that we can deliver substantially improved performance."
Enquiries:
Getech Group plc Raymond Wolfson, Chief Executive |
Tel: 0113 322 2200 |
WH Ireland Limited Katy Mitchell |
Tel: 0161 832 2174 |
Walbrook PR Helen Cresswell Paul Cornelius |
Tel: 020 7933 8780 or [email protected] Mob: 07841 917 679 Mob: 07866 384 707 |
