Trading Update

RNS Number : 3834V

GETECH Group plc

07 August 2015

 



Getech Group plc

("Getech" or the "Company")

Trading update

Getech, the geoscience services business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, provides a trading update.

The Directors anticipate that the Company will return trading figures for the year to 31 July 2015 which show a very significant year on year improvement. The current estimate, which is subject to review and audit, is profit before tax of £2.0m (2014: £1.0m) on income of £8.5m (2014: £6.6m), representing a 100% increase in profit before tax and a 29% increase in income. This result would be slightly below current market expectations.

The Directors regard this as a strong performance given the current market conditions, which include the rapid fall and volatility in the oil price, and an extended period of retrenchment and redundancies throughout the oil and gas market globally.

Getech had previously stated that it aimed to reduce its exposure to volatility in the market through a number of means. Specific strategies included focussing on major contracts with National Oil Companies ("NOCs"), and signing multi-year contractual commitments with clients. In both respects the Company has achieved successes - three major NOC contracts were announced during the year and longer term contracts include the commitments to Globe as well as the highly successful multi-satellite project. While these have not guaranteed isolation from movements in the market, the impact has been substantially reduced and as a result the Company has been very much more resilient than in 2009.

The Company also notes that although three major contracts with NOCs were announced during the year to July 2015, only the Sonangol contract (announced in September 2014) generated income during the year. The Company anticipates that all three clients will generate significant income in the coming year.

In May 2015 the Company completed the acquisition of ERCL, the Henley based consultancy. The Directors are delighted with progress on the integration programme and although, like other service companies, it is seeing the impact of the market downturn, in its first four months as part of the Getech group it has made a positive contribution to group profits.

Overall, the directors believe that the market conditions in the year ahead will remain challenging but, based on the existing contracts and continued client interest, the directors remain optimistic for the future.

Stuart Paton, Non-Executive Chairman of Getech Group plc, said "In market conditions as difficult as these, we are delighted with the performance for the year and the resilience that this demonstrates to market volatility. I am particularly pleased that we have achieved this while two of the three new NOC contracts we announced during the year are still to start generating income. The market is expected to remain tight, with uncertainty about the timing of recovery of the oil price. However, we are increasingly confident about the prospects for 2016 as a number of significant discussions have already, at the request of our clients, been aimed at inclusion of Getech products in their 2016 budgets. This will supplement the income already committed to the Globe and Multi-satellite projects as well as the anticipated returns from the three NOC clients who signed contracts in the year to July 2015."

Enquiries:

Getech Group plc Raymond Wolfson, Chief Executive	Tel:  [phone]
WH Ireland Limited Katy Mitchell	Tel:  [phone]

 

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