Trading Update

RNS Number : 2013J

GETECH Group plc

10 June 2014

 



Getech Group plc

("Getech" or the "Company")

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, announces a trading update for the twelve month period to 31 July 2014.

Trading Update

As previously reported, the Company has continued to see strong demand for its consultancy work and is still receiving high levels of interest and positive feedback on its major product, Globe. However, in common with much of the upstream oil and gas service industry, actual purchasing by clients has been slow by comparison with last year and predicting the timing of new contracts has been difficult.

The Company has now built what it regards to be a very strong sales pipeline including close to £2m of leads where clients have recently given written or oral confirmation that they intend to proceed. We are therefore confident that a number of significant contracts, including several Globe renewals, will be signed in the very near future. However, with the expected cycle time to convert the sales pipeline into contracts and then revenue, the Directors believe that the Company will deliver pre-tax profit for the 12 month period to 31 July 2014 which is significantly below the market expectation.

Outlook

The Directors are seeing increasing signs that clients are disposed to start spending again and that the market is returning to normal. This, when combined with the strength of the sales pipeline, gives confidence about the short and medium term prospects.

Looking further forward, the visibility of income is still improving. Sponsors signing up to the second period of Globe commit to funding for the period from July 2014 to July 2017. The multi-satellite project, which is a three-year project running from mid 2013 to mid 2016 now has £800k of funding. A global depth to basement project has also now started and runs from April 2014 to late 2015. The Company fully expects further clients to sign up to each of these projects which, when combined with Globe commitments and the growth in consultancy contracts, will enhance the forward visibility of income.

Raymond Wolfson, Chief Executive of Getech Group plc, said: "We continue to believe that the present position is the result of an industry-wide slowdown, and are disappointed that this has lasted longer than we expected. However, since mid-May we have signed more than $1.2m worth of new contracts, including our first contractual commitment to the second phase of Globe. There are clear signs that the inertia in the market is lifting and, given the favourable reception we are receiving from our clients, we believe normal trading conditions have resumed."

Enquiries:

Getech Group plc Raymond Wolfson, Chief Executive	Tel:  [phone]
WH Ireland Limited Katy Mitchell	Tel:  [phone]
Walbrook PR Helen Cresswell Paul Cornelius	Tel:  [phone] or [e-mail] Mob: [phone] Mob: [phone]

 

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