Last checked at 31 Mar 2010 07:00
GETECH Group plc
("GETECH", the "Company" or the "Group")
Interim results
for the 6 months ended 31 January 2010
GETECH Group plc (AIM: GTC), a leading geosciences business specialising in the provision of data, studies and interpretation services to the oil and mining exploration sectors, announces its Interim results for the six months ended 31 January 2010.
Financial Highlights
·; Revenue for the six months of £1,174,000 (six months ended 31 January 2009: £2,419,000)
·; Loss before tax of £392,000 (six months ended 31 January 2009: Profit of £187,000)
·; No interim dividend proposed (2009: interim 0.6p per share)
·; Trading affected by continued impact of economic crisis, volatility in oil prices and prolonged inactivity by oil company clients with budgets set for the calendar year 2009
·; Debt facility of £1m completed on favourable terms in September 2009
·; Cash levels sustained giving a balance of £1m at the end of the period
Operational highlights
·; Losses down 52% from previous half year
·; Six new geological studies under development during the period and due for completion in the second half year
·; US domestic data business, Lisle Gravity, returned notable profit in the period
Commenting on the outlook, Peter Stephens, Non-Executive Chairman of GETECH Group plc, said:
"Although during this period we suffered from continued restrictions in major oil company budgets that had been set for the calendar year, we are happy to be able to report a considerable reduction in the loss compared with the prior half year. We plan to have six new geological studies available for sale in the second half of this financial year for which specific interest has been received. In addition the Company currently holds a larger forward order book for proprietary work than has been typical in previous years; accordingly we remain confident about our medium and long term prospects."
For further information:
| GETECH Group plc |
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| Raymond Wolfson, Chief Executive Officer | Tel: 0113 322 2211 |
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| WH Ireland |
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| Katy Mitchell | Tel: 0161 819 8875 |
| Eric Burns | Tel: 0113 394 6608 |
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| Walbrook PR |
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| Ben Knowles | Tel: 020 7933 8788 or Mob: 07900 346 978 |
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| ben.knowles@walbrookpr.com |
| Paul McManus | Tel: 020 7933 8787 or Mob: 07980 541 893 |
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| paul.mcmanus@walbrookpr.com |
CHAIRMAN'S STATEMENT
I report the interim accounts of GETECH Group plc and its subsidiary company (collectively "GETECH"), the geoscience business specialising in the provision of data, studies and services to the petroleum and mining exploration sectors, for the six month period ended 31 January 2010.
Results
GETECH is disappointed to report a Group loss before tax of £392,000 (six months ended 31 January 2009: profit £187,000) after interest receivable of £3,000 (six months ended 31 January 2009: £17,000) on revenue of £1,174,000 (six months ended 31 January 2009: £2,419,000). The post-tax loss was £330,000 (six months ended 31 January 2009: profit £73,000).
The accounts have been prepared under IFRS.
Dividend
Your Board does not recommend an interim dividend.
Business review
During the half year under review, we continued to suffer from the restrictions in the budgets of our clients. These clients are, in the main, major international oil companies and their budgets are typically set for whole calendar years. As a result, the period from August to December 2009 followed a similar pattern to the period from January to July 2009. However, the loss in the six month period ended 31 January 2010 was substantially less than the loss of £815,000 in the previous half year.
During the period we have been developing the next generation of geological studies, six of which are planned for completion during the second half year. Indications from our clients are that these will be well received. We have also been successful in developing relationships which have led to an increase in proprietary work; these will in large part fall in the second half year.
Despite the low and volatile gas price, and the downturn in exploration, the US gravity data business that we acquired in December 2008 returned a notable profit in this period. We have now recruited additional staff to support the sales activity in Denver, Colorado.
As reported in September 2009, we completed a £1m debt facility with the National Westminster Bank plc at extremely favourable rates. Although we drew this down in November 2009 we have maintained a cash level generally in excess of £1m since then, with a closing balance at 31 January 2010 slightly in excess of £1m. In February 2010 we also received a corporation tax refund amounting to £176,000.
Outlook
Looking forward to the second half of this financial year, we plan to complete six new geological studies by the end of July 2010 which, with sales from our existing library and increased levels of proprietary work, we anticipate will lead to substantially more income than in the first half year.
The first new study in the current financial year was completed in February (Equatorial Atlantic Phase I). This has already attracted significant interest in view of major discoveries in the area, with deliveries to four clients in February and March making a significant contribution to revenue for the second half year. The next study due to be completed is our South East Asia Structure and Tectonics study, which already has four clients under contract.
The oil price appears to be less volatile and has remained generally above $70 per barrel for several months, and we believe we are now seeing a return towards normality of client buying patterns. The gas price, however, has not rallied in the same way as the oil price due in part to a world surplus of liquefied natural gas (LNG).
GETECH's result for the full year to July 2010 is, as usual, dependent on the crystallisation of a number of deals and the pattern of demand in the remaining few months of the year. However, we have a larger forward order book for proprietary work than has been typical in prior years, and we have clear statements from a number of clients of their wish to purchase our studies and services.
We remain confident about our medium and long-term prospects.
PETER STEPHENS
NON-EXECUTIVE CHAIRMAN
31 MARCH 2010
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 JANUARY 2010
| Six months | Six months | Year | |
| ended | ended | ended | |
| 31 January | 31 January | 31 July | |
| 2010 | 2009 | 2009 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Revenue | 1,174 | 2,419 | 3,306 |
| Cost of sales | (175) | (335) | (511) |
| Gross profit | 999 | 2,084 | 2,795 |
| Administrative costs | (1,389) | (1,908) | (3,441) |
| Operating (loss)/profit | (390) | 176 | (646) |
| Finance income | 3 | 17 | 28 |
| Finance costs | (5) | (6) | (10) |
| (Loss)/profit before tax | (392) | 187 | (628) |
| Income tax income/(expense) | 62 | (114) | 256 |
| (Loss)/profit for the period attributable to owners of the | |||
| parent | (330) | 73 | (372) |
| (Loss)/earnings per share | |||
| Basic (loss)/earnings per share | (1.13)p | 0.26p | (1.30)p |
| Diluted (loss)/earnings per share | (1.13)p | 0.26p | (1.30)p |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 JANUARY 2010
| Six months | Six months | Year | |
| ended | ended | ended | |
| 31 January | 31 January | 31 July | |
| 2010 | 2009 | 2009 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| (Loss)/profit for the period | (330) | 73 | (372) |
| Other comprehensive income | |||
| Currency translation differences | (2) | 120 | (19) |
| Income tax relating to components of other comprehensive | |||
| income | - | (33) | - |
| Other comprehensive income, net of tax | (2) | 87 | (19) |
| Total comprehensive income for the period attributable | |||
| to owners of the parent | (332) | 160 | (391) |
All activities relate to continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2010
| 31 January | 31 January | 31 July | |
| 2010 | 2009 | 2009 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 2,711 | 2,788 | 2,748 |
| Intangible assets | 1,035 | 1,890 | 1,098 |
| Deferred tax assets | 228 | 47 | 168 |
| 3,974 | 4,725 | 4,014 | |
| Current assets | |||
| Inventories | 454 | 20 | 293 |
| Trade and other receivables | 831 | 1,125 | 655 |
| Other current assets | 189 | - | 190 |
| Cash and cash equivalents | 1,007 | 1,626 | 580 |
| 2,481 | 2,771 | 1,718 | |
| Total assets | 6,455 | 7,496 | 5,732 |
| Liabilities | |||
| Current liabilities | |||
| Current portion of long-term borrowings | 190 | - | - |
| Trade and other payables | 1,323 | 1,751 | 1,270 |
| Current tax liabilities | - | 122 | - |
| 1,513 | 1,873 | 1,270 | |
| Non-current liabilities | |||
| Long-term borrowings | 810 | - | - |
| Trade and other payables | 83 | 558 | 99 |
| Deferred tax liabilities | 28 | 27 | 27 |
| 921 | 585 | 126 | |
| Total liabilities | 2,434 | 2,458 | 1,396 |
| Net assets | 4,021 | 5,038 | 4,336 |
| Equity | |||
| Equity attributable to owners of the parent | |||
| Share capital | 73 | 73 | 73 |
| Share premium account | 2,841 | 2,841 | 2,841 |
| Share option reserve | 211 | 169 | 194 |
| Currency translation reserve | (22) | 87 | (20) |
| Retained earnings | 918 | 1,868 | 1,248 |
| Total equity | 4,021 | 5,038 | 4,336 |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 JANUARY 2010
| Six months | Six months | Year | |
| ended | ended | ended | |
| 31 January | 31 January | 31 July | |
| 2010 | 2009 | 2009 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Cash flows from operating activities | |||
| (Loss)/profit before tax | (392) | 187 | (628) |
| Share-based payments | 17 | 36 | 60 |
| Depreciation and amortisation charges | 105 | 73 | 209 |
| Impairment loss recognised | - | - | 463 |
| Finance income | (3) | (17) | (28) |
| Finance costs | 5 | 5 | 10 |
| Exchange adjustments | (4) | 120 | 189 |
| (Increase)/decrease in inventories | (161) | 421 | 148 |
| (Increase)/decrease in debtors | (175) | 500 | 947 |
| Increase/(decrease) in creditors | 53 | (382) | (497) |
| Cash (used in)/generated from operations | (555) | 943 | 873 |
| Income taxes refunded/(paid) | 3 | (172) | (181) |
| Net cash (used in)/generated from operating activities | (552) | 771 | 692 |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment | (3) | (36) | (39) |
| Purchase of data holdings, trade and domain names | - | (1,004) | (1,893) |
| Interest received | 3 | 17 | 28 |
| Net cash used in investing activities | - | (1,023) | (1,904) |
| Cash flows from financing activities | |||
| Proceeds from issue of share capital | - | 384 | 384 |
| Proceeds from long-term borrowings | 984 | - | 99 |
| Equity dividends paid | - | (194) | (369) |
| Interest paid | (5) | - | (10) |
| Net cash generated from financing activities | 979 | 190 | 104 |
| Net increase/(decrease) in cash and cash equivalents | 427 | (62) | (1,108) |
| Cash and cash equivalents at beginning of period | 580 | 1,688 | 1,688 |
| Cash and cash equivalents at end of period | 1,007 | 1,626 | 580 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 JANUARY 2010
|
| Unaudited | |||||
| Share | Share | Currency |
| |||
| Share | premium | option | translation | Retained | Total | |
| capital | account | reserve | reserve | earnings | equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 1 August 2009 | 73 | 2,841 | 194 | (20) | 1,248 | 4,336 |
| Share-based payments | - | - | 17 | - | - | 17 |
| Transactions with owners | - | - | 17 | - | - | 17 |
| Loss for the period | - | - | - | - | (330) | (330) |
| Other comprehensive income | ||||||
| Currency translation differences | - | - | - | (2) | - | (2) |
| Total comprehensive income for the period | - | - | - | (2) | (330) | (332) |
| Balance at 31 January 2010 | 73 | 2,841 | 211 | (22) | 918 | 4,021 |
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 31 JANUARY 2010
1 Nature of operations
The principal activity of GETECH Group plc and its subsidiary company Geophysical Exploration Technology Inc. (collectively "GETECH" or "the Group") is the provision of gravity and magnetic data, services and geological studies to the petroleum and mining industries to assist in their exploration activities.
2 General information
GETECH Group plc, a limited liability company, is the Group's ultimate Parent Company. It is incorporated in England and Wales and domiciled in England (CRN: 2891368). The address of its registered office is Convention House, St Mary's Street, Leeds LS9 7DP. Its principal place of business is Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LJ. GETECH's shares are admitted to trading on the London Stock Exchange's AIM.
The financial information for the six months ended 31 January 2010 and 31 January 2009 has not been audited and does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. These condensed consolidated interim financial statements (the "interim financial statements") have been approved by the Board.
The financial information relating to the year ended 31 July 2009 does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. This information is based on the Group's statutory accounts for that period. The statutory accounts were prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS) and received an unqualified audit report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These financial statements have been filed with the Registrar of Companies.
3 Basis of preparation
The interim financial statements are for the six months ended 31 January 2010. They have been prepared using the recognition and measurement principles of IFRS. They do not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 31 July 2009.
The interim financial statements have been prepared under the historical cost convention.
The interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 July 2009 except for the adoption of IAS 1 'Presentation of Financial Statements' (revised 2007) which became effective for accounting periods commencing on or after 1 January 2009.
The adoption of IAS 1 (revised 2007) does not affect the financial position of the Group but gives rise to additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged. Under IAS 1 (revised 2007) a statement of comprehensive income is required. This includes some income and expenses previously recognised in equity without effect on income. IAS 1 (revised 2007) also requires a statement of changes in equity. The condensed consolidated statement of changes in equity shows all changes affecting the shareholders in their capacity as owners and all other changes in equity are presented in the condensed consolidated statement of comprehensive income.
The accounting policies have been applied consistently throughout the Group for the purpose of preparation of the interim financial statements.
4 Dividends
| Six months | Six months | Year | |
| ended | ended | ended | |
| 31 January | 31 January | 31 July | |
| 2010 | 2009 | 2009 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Paid during the period | |||
| Final (2009: 0.7p per share) | - | 194 | 194 |
| Interim (2009: 0.6p per share) | - | - | 175 |
| - | 194 | 369 | |
| Proposed after the period end (not recognised as a liability) | |||
| Interim (2009: 0.6p per share) | - | 175 | - |
5 Earnings per share
Basic earnings per share is calculated on the basis of the loss for the period after tax, divided by the weighted average of ordinary shares in issue in the period of 29,237,151 (six months ended 31 January 2009: 28,076,922; year ended 31 July 2009: 28,651,166).
Diluted earnings per share is calculated on the basis of the loss for the year after tax, divided by the weighted average number of shares in issue plus the weighted average number of shares which would be issued if all options granted were exercised. The addition to the weighted average number of ordinary shares used in the calculation of diluted earnings per share for the six months ended 31 January 2010 is 1,256,573 (six months ended 31 January 2009: 338,294; year ended 31 July 2009: 780,849). All options in issue at 31 January 2010 and 31 July 2009 were anti-dilutive.
6 Interim Report
This Interim Report is being sent to the shareholders of GETECH and will be available at its registered office.