Last checked at 1 Apr 2014 07:00
Getech Group plc
("Getech" or the "Group" or the "Company")
Interim Report for the six months ended 31 January 2014
Getech, the geoscience services business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, announces its interim results for the six months ended 31 January 2014.
Highlights
• | Revenue for the six months of £3,110,000 (six months ended 31 January 2013: £3,967,000) |
• | Profit before tax of £233,000 (six months ended 31 January 2013: £1,398,000) |
• | Interim dividend proposed 0.44p per share (2013: 0.4p per share) |
• | Cash levels strong with gross cash of £4,103,000 (including Other financial assets) |
• | Strong demand for consultancy work through the half year |
• | Inertia in the market led to slow down in major sales |
• | Evidence that the market is strengthening as from early 2014 |
Stuart Paton, Non-Executive Chairman of Getech Group plc, said:
"We start the second half of our year with strong cash balances and a substantial pipeline of sales opportunities. More importantly, the feedback from meetings early in 2014 suggests that not only do clients remain interested in our major products, but they now have budget available to spend. The oil price has been, and is currently, above the corresponding prices last year and we do not see signs of it weakening. As such, we are optimistic that the trading performance in the first half represented a short term market-related issue and we remain confident about our medium and longer‑term prospects."
GETECH Group plc Raymond Wolfson, Chief Executive
| Tel: 0113 322 2200 |
WH Ireland Limited Katy Mitchell | Tel: 0161 832 2174
|
Walbrook PR Helen Cresswell | Tel: 020 7933 8790 Mob: 07841 917 679 helen.cresswell@walbrookpr.com |
Chairman's statement
Results
Getech reports a Group profit before tax of £233,000 (six months ended 31 January 2013: £1,398,000) after interest receivable of £16,000 (six months ended 31 January 2013: £6,000) on revenue of £3,110,000 (six months ended 31 January 2013: £3,967,000). The post-tax profit was £193,000 (six months ended 31 January 2013: £1,060,000).
The accounts have been prepared under IFRS in issue as adopted by the European Union.
Dividend
Your Board recommends an interim dividend of 0.44p per share.
Business review
Highlights:
· | major sale from our gravity and magnetic datasets: $864k gross income; |
· | Globe continues to be positively viewed by the current sponsors; |
·
| demand for consultancy services remains strong, with increasing evidence of the value of our work at basin and block scales; and |
· | pipeline of sales opportunities highly encouraging. |
During the half-year the business has been affected by what appear to be general restrictions on spending by our clients, who are in large part the major exploration and production ("E&P") companies. The performance of E&P companies has been weak during this period, for which several reasons have been put forward, including increased costs, expectation of lower oil prices and a lower exploration success rate. Likewise, the exploration services market has been negatively impacted which has led to a number of the major seismic consultancies showing large falls in revenue and profit and significant share price falls. These observations notwithstanding, our regular discussions with clients and the wider industry suggest that our products and services remain attractive and in demand.
By the end of the period the cash balance (including cash on deposit under "Other financial assets") amounted to £4.1m. The Company is hence still in a very strong financial position.
Outlook
We start the second half of our year with strong cash balances and a substantial pipeline of sales opportunities. More importantly, the feedback from meetings early in 2014 suggests that not only do clients remain interested in our major products, but they now have budget available to spend. The oil price has been, and is currently, above the corresponding prices last year and we do not see signs of it weakening. As such, we are optimistic that the trading performance in the first half represented a short term market-related issue.
During the second half year we anticipate additional sponsors will participate in Globe and, based on feedback from the current sponsors, we are confident that most will sign up for the next three year period, which will start in July 2014. In line with our existing plans, we aim to use Globe to build stronger relationships with an increasing group of clients with the aim of leveraging additional product sales and consultancy.
The plans for the second period of Globe include a more varied array of deliverables which can be provided to clients who are not currently Globe sponsors. This will substantially enhance our new product flow. Further, we will increase the resolution of the whole of Globe, adding more value to clients' smaller scale work and making it of more use outside the global new ventures teams. We have already seen the benefits of applying Globe to much smaller scale work, at basin scale and down to block level, particularly with small companies.
The consultancy side of the business has been growing and we anticipate that this will continue, with the aim of extending our portfolio of new contracts and having a range from a few days up to several man years per contract.
We remain confident about our medium and longer‑term prospects.
Stuart Paton
Non-Executive Chairman
1 April 2014
Consolidated statement of comprehensive income
For the six months ended 31 January 2014
Six months | Six months | Year | ||
ended | ended | ended | ||
31 January | 31 January | 31 July | ||
2014 | 2013 | 2013 | ||
Unaudited | Unaudited | Audited | ||
Note | £'000 | £'000 | £'000 | |
Revenue | 3,110 | 3,967 | 8,011 | |
Cost of sales | (1,137) | (870) | (2,521) | |
Gross profit | 1,973 | 3,097 | 5,490 | |
Administrative costs | (1,755) | (1,701) | (3,269) | |
Operating profit | 218 | 1,396 | 2,221 | |
Finance income | 16 | 6 | 31 | |
Finance costs | (1) | (4) | (6) | |
Profit before tax | 233 | 1,398 | 2,246 | |
Income tax expense | (40) | (338) | (611) | |
Profit for the period attributable to owners of the parent | 193 | 1,060 | 1,635 | |
Other comprehensive income | ||||
Currency translation differences on translation of foreign operations | (90) | (30) | (39) | |
Total comprehensive income for the year attributable to | 103 | 1,030 | 1,596 | |
owners of the parent | ||||
Earnings per share | 5 | |||
Basic earnings per share | 0.64p | 3.62p | 5.57p | |
Diluted earnings per share | 0.60p | 3.28p | 5.30p | |
Consolidated statement of financial position
As at 31 January 2014
Company registration number 2891368
31 January | 31 January | 31 July | |
2014 | 2013 | 2013 | |
Unaudited | Unaudited | Audited | |
£'000 | £'000 | £'000 | |
Assets | |||
Non-current assets | |||
Property, plant and equipment | 2,713 | 2,626 | 2,753 |
Intangible assets | 505 | 651 | 616 |
Deferred tax assets | 123 | 299 | 129 |
3,341 | 3,576 | 3,498 | |
Current assets | |||
Inventories | 301 | 402 | 166 |
Trade and other receivables | 1,124 | 1,180 | 2,123 |
Other financial assets | 500 | - | 500 |
Other current assets | 118 | 40 | 139 |
Cash and cash equivalents | 3,603 | 5,578 | 4,358 |
5,646 | 7,200 | 7,286 | |
Total assets | 8,987 | 10,776 | 10,784 |
Liabilities | |||
Current liabilities | |||
Borrowings | - | 262 | 119 |
Trade and other payables | 2,291 | 3,668 | 3,524 |
Current tax liabilities | 53 | 487 | 109 |
2,344 | 4,417 | 3,752 | |
Non-current liabilities | |||
Trade and other payables | - | 15 | 17 |
Deferred tax liabilities | 88 | 57 | 110 |
88 | 72 | 127 | |
Total liabilities | 2,432 | 4,489 | 3,879 |
Net assets | 6,555 | 6,287 | 6,905 |
Equity | |||
Equity attributable to owners of the parent | |||
Share capital | 76 | 73 | 76 |
Share premium account | 3,013 | 2,848 | 2,993 |
Share option reserve | 115 | 189 | 123 |
Currency translation reserve | (126) | (27) | (36) |
Retained earnings | 3,477 | 3,204 | 3,749 |
Total equity | 6,555 | 6,287 | 6,905 |
Consolidated statement of cash flows
For the six months ended 31 January 2014
Six months | Six months | Year | |
ended | ended | ended | |
31 January | 31 January | 31 July | |
2014 | 2013 | 2013 | |
Unaudited | Unaudited | Audited | |
£'000 | £'000 | £'000 | |
Cash flows from operating activities | |||
Profit before tax | 233 | 1,398 | 2,246 |
Share-based payment charges | 10 | - | 23 |
Depreciation and amortisation charges | 119 | 104 | 213 |
Finance income | (16) | (6) | (31) |
Finance costs | 1 | 4 | 6 |
Exchange adjustments | 28 | (5) | (77) |
Increase in inventories | (135) | (342) | (106) |
Decrease in trade and other receivables | 1,000 | 1,782 | 840 |
(Decrease)/increase in trade and other payables | (1,250) | 352 | 209 |
Cash (used in)/generated from operations | (10) | 3,287 | 3,323 |
Income taxes refunded | (102) | (324) | (851) |
Net cash (used in)/generated from operating activities | (112) | 2,963 | 2,472 |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (14) | (24) | (191) |
Funds transferred into fixed term deposits | - | - | (500) |
Interest received | 16 | 6 | 31 |
Net cash generated from/(used in) investing activities | 2 | (18) | (660) |
Cash flows from financing activities | |||
Proceeds from issue of share capital | 20 | 7 | 154 |
Repayment of long-term borrowings | (119) | (143) | (286) |
Dividends paid | (483) | (234) | (351) |
Interest paid | (1) | (4) | (6) |
Net cash used in financing activities | (583) | (374) | (489) |
Net (decrease)/increase in cash and cash equivalents | (693) | 2,571 | 1,323 |
Cash and cash equivalents at beginning of period | 4,358 | 3,011 | 3,011 |
Exchange adjustments to cash and cash equivalents | (62) | (4) | 24 |
at beginning of period | |||
Cash and cash equivalents at end of period | 3,603 | 5,578 | 4,358 |
Consolidated statement of changes in equity
For the six months ended 31 January 2014
Share | Share | Currency |
| ||||
Share | premium | option | translation | Retained | Total | ||
capital | account | reserve | reserve | earnings | equity | ||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
At 1 August 2013 - audited | 76 | 2,993 | 123 | (36) | 3,749 | 6,905 | |
Issue of share capital under share-based | - | 20 | (18) | - | 18 | 20 | |
payment options | |||||||
Share-based payment charge | - | - | 10 | - | - | 10 | |
Dividends paid | - | - | - | - | (483) | (483) | |
Transactions with owners | - | 20 | (8) | - | (465) | (453) | |
Profit for the period | - | - | - | - | 193 | 193 | |
Other comprehensive income | |||||||
Currency translation differences | - | - | - | (90) | - | (90) | |
Total comprehensive income for the period | - | - | - | (90) | 193 | 103 | |
At 31 January 2014 - unaudited | 76 | 3,013 | 115 | (126) | 3,477 | 6,555 | |
Notes to the interim report
For the six months ended 31 January 2014
1 Nature of operations
The principal activity of Getech Group plc ("the Company") 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 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. The Company's shares are admitted to trading on the London Stock Exchange's AIM.
The financial information for the six months ended 31 January 2014 and 31 January 2013 has not been audited and does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. These consolidated interim financial statements ("the interim financial statements") have been approved by the Board.
The financial information relating to the year ended 31 July 2013 is based on the Group's statutory accounts for that period. The statutory accounts were prepared in accordance with International Financial Reporting Standards (IFRS) in issue as adopted by the European Union. IFRS include interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). The statutory accounts received an unqualified audit report, did not contain statements under Sections 498(2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.
3 Basis of preparation
The interim financial statements are for the six months ended 31 January 2014. They have been prepared using the recognition and measurement principles of IFRS. The interim financial statements 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 2013.
The interim financial statements have been prepared under the historical cost convention except in relation to financial instruments held at face value through profit or loss. They have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 July 2013.
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 | |
2014 | 2013 | 2013 | |
Unaudited | Unaudited | Audited | |
£'000 | £'000 | £'000 | |
Paid during the period | |||
At: 1.6p per share (2013: 0.8p per share, year ended 31 July 2013: | 483 | 234 | 352 |
1.2p per share) | |||
Proposed after the period end (not recognised as a liability) | |||
At: 0.44p per share (2013: 0.4p per share, year ended | 133 | 117 | 482 |
31 July 2013: 1.6p per share) | |||
The proposed dividend is payable on 16 May 2014 to members on the register at 22 April 2014.
5 Earnings per share
Basic earnings per share is calculated on the basis of the profit for the period after tax, divided by the weighted average number of Ordinary Shares in issue in the period of 30,183,332(six months ended 31 January 2013: 29,266,455; year ended 31 July 2013: 29,323,481).
Diluted earnings per share is calculated on the basis of the profit for the period after tax, divided by the weighted average number of Ordinary Shares in issue plus the weighted average number of Ordinary 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 2014 is 1,820,077 (six months ended 31 January 2013: 3,099,028; year ended 31 July 2013: 1,494,138). At 31 January 2014 600,000 of options in issue were anti-dilutive because the conditions for exercise had not been met (31 January 2013: 600,000; 31 July 2013: 600,000).
6 Interim Report
This Interim Report is being sent to the shareholders of Getech and will be available at its registered office, Convention House, St Mary's Street, Leeds LS9 7DP, UK, and from its website, www.getech.com, from 15 April 2014.