Trading Update: 17 months to 31 December 2017

Getech Group plc

("Getech" or the "Company" and with its subsidiaries the "Getech Group")

Trading Update: 17 months to 31 December 2017

 

5 February 2018

The Getech Group (AIM; GTC) provides geoscience and geospatial products and services to a wide variety of companies and governments, which they use to de-risk their exploration programmes and improve their management of natural resources.

On 20 September 2017 Getech announced steps to align its reporting cycle with its customers' budget cycle. To do this the Group's Accounting Reference Date was moved to 31 December and Getech has already reported interim financial results (12 months to 31 July 2017).

This Trading Update concerns the 17-month accounting period to 31 December 2017 (referred to as AP 2017), the previously reported accounting period being the 12 months to 31 July 2016 (referred to as FY 2016). Audited final results for AP 2017 will be published on or before 28 February 2018. All figures stated in this Trading Update are unaudited.

In AP 2017, under the leadership of a new management team, Getech undertook a wide-ranging programme of organisational and cultural change. Through cost control, customer engagement and a repositioning of how we invest our operating cash flow, we have significantly enhanced both the Group's cash profitability and the commercial positioning of our Products and Services.

 

Revenue

Revenue in AP 2017 totalled £10.9 million (12 months FY 2016: £7.0 million). Products remained a key engine of growth, accounting for 69% of Group revenue in AP 2017. Pro-rata, this is an increase of 24% on FY 2016. Within our Services division, the geoscience services market remained challenging, but work completed in AP 2017 has laid the foundation for a number of important 2018 sales opportunities - principal amongst which is the recently launched Fourth Sierra Leone Licensing Round.

 

Cost base

Actions taken in the first 12 months of AP 2017 reduced Getech's underlying like-for-like cost base by 32%, when compared to 12 months to 31 July 2016. Across the next five months we continued our programme of product investment and enhanced our sales and project management capabilities. The cost base, excluding one-off restructuring costs, remained on a flat trajectory, totalling £10.6 million across the 17 months. Within this figure product investment was £1.2 million.

Before product investment and restructuring costs, Getech delivered a 17-month net operating cash inflow of £2.1 million, which compares to a £0.3 million net cash out-flow for the 12-months of 2016.

 

Restructuring costs, final M&A payments, and debt repayments

Restructuring costs in AP 2017 totalled £0.5 million, all outstanding M&A cash payments were settled (£0.5 million), and a further £0.3 million of debt was repaid.

 

Cash balances

Net of these cash movements, cash balances at 31 December 2017 totalled £2.4 million. This was flat on the figure reported in September 2017 and compares to an opening cash balance of £2.8 million.

 

Balance sheet adjustments

To keep our balance sheet in step with the Group's new investment and sales strategies, management has decided at year-end to write-down inventories totalling £0.5 million that had built up on the Group balance sheet through the sector downturn.

 

 

Jonathan Copus, Getech CEO, commented:

 

"In 2017 we undertook a programme of commercial, operational and cultural change that has significantly strengthened the Getech Group. These steps align our products and services more firmly with the practical commercial needs of our customers, and we have entered 2018 with a full and diverse pipeline of opportunities - to which our cash profitability is strongly leveraged."

 

 

Notes to Editors:

The Getech Group provides the expertise, support and knowledge that companies and governments need to better discover, develop and manage natural resources. Our data-rich products, GIS solutions and government advisory services help our customers to achieve their business goals of cost control, operational excellence, regulatory compliance and environmental responsibility.

For more information, please visit our website at www.getech.com.