Getech Grp Regulatory News (GTC)

31 Oct 2007 07:01

GETECH Group plc31 October 2007 31 October 2007 GETECH Group Plc Preliminary ResultsFor the year ended 31 July 2007 Highlights • Turnover for the year £3,561,159 (2006: £3,228,573). • Profit before tax £805,399 (2006: £972,013). • Proposed final dividend of 0.8p per share, a total of 1.2p for the year. • £1 million sale of newly obtained Russian Arctic magnetic data. • Significant sales of and pre-commitments for PSEG studies. • Purchase of and relocation to larger premises at Elmete Hall. FOR FURTHER INFORMATION, PLEASE CONTACT Derek Fairhead, Managing Director (Executive Chairman from 5 November 2007),GETECH Group plc 0113 322 2200 Raymond Wolfson, Non-Executive Director (Chief Executive Officer from 5 November2007), GETECH Group plc 0113 322 2200 Thilo Hoffmann/Sebastian Jones, Landsbanki Securities (UK) Limited 0207 426 9000 www.getech.com Chairman's statement I am pleased to report the second full year results since its Admission to AIMof GETECH Group plc ("the Company" or "GETECH") for the period to 31 July 2007.GETECH is in the oil services sector, specialising in the licensing andinterpretation of gravity and magnetic data, undertaking proprietary geophysicalservice work and the evaluation of petroleum systems. Results The Company, including its US subsidiary, reported a profit before tax of£805,399 (2006: £1,010,013; restated: £972,013) after interest receivable of£158,946 (2006: £140,124) on a turnover of £3,561,159 (2006: £3,228,573). Thepost-tax profit was £562,431 (2006: £733,560; restated £695,560) giving earningsper share of 2.03p (2006: £2.65p; restated 2.62p). Dividends The Company is pleased to announce a final dividend of 0.8p to make 1.2p for the year, subject to shareholder approval at the Annual General Meeting on 29November 2007. This will be paid to shareholders on the register on 9 November2007. It will cost £221,538 in total and be payable on 7 December 2007. Thisdividend payment is in line with GETECH's commitment to a progressive dividendpolicy. Business review The year resulted in good progress in all areas of operation. In particular, after prolonged negotiation, the Company acquired the rights tomarket a large and valuable aeromagnetic data set over the Arctic region. Thiswas licensed once in the year under review to an oil major and discussionsregarding further licences are underway. Sales of archive gravity and magneticdata have continued to provide substantial revenue. Dr Paul Markwick assumed responsibility for the Petroleum Systems EvaluationGroup ("PSEG") in September 2006. Under his leadership PSEG is growing rapidlyand has begun to realise its potential. Dr Markwick and his team have nowcompleted three non-exclusive studies and a further four are scheduled to becompleted in the first half of 2008. The completed studies have been wellreceived, especially the East Vietnam study, which has already been sold toeight customers. These studies are providing valuable information to companiesundertaking bids for oil exploration blocks. Management As previously announced Raymond Wolfson takes up his appointment as ChiefExecutive Officer on 5 November moving from his current position asNon-executive Director. Mr Wolfson has been involved with the Company since itsinception and the Board is extremely pleased that he has agreed to take on thiskey role. Dr Derek Fairhead will become Executive Chairman and will concentrate on hisrole of acquiring new data and clients, and building and maintaining linkswithin the oil industry, which he has done so successfully to date. I remain asNon-executive Chairman. Following the year end it was announced that Dr Chris Green had resigned fromthe Board in order to undertake a period of study at the University of Leeds togain additional skills. We are pleased that Dr Green will remain in a part-timeposition with the Company. The Board would like to thank Dr Green for his very significant contribution toGETECH since its inception and for agreeing to work with the Company through hisperiod of study. We are also delighted to welcome Dr Paul Markwick's appointment to the Board asGeological Director. Since taking on the management of PSEG, Dr Markwick hasdemonstrated a strong all-round ability in addition to his technical skills, andthis has been exemplified by the successful development of the PSEG under hismanagement. We are confident that this appointment will add value to the Boardand assist the Company in developing and implementing its strategies for growth. Premises In January 2007 the Company moved into Kitson House and Nicholson House,Elmete Hall in Leeds which has provided a secure, comfortable workingenvironment with ample room for expansion. Acquisitions We recognise the importance of growing the Company, both organically and byacquisition. A number of possible acquisition targets have been examined by yourBoard but, as yet, no suitable fit has been found. Outlook Your Board is very pleased with the progress in all of GETECH's areas ofactivity and looks forward to the future with confidence. GETECH is extremely fortunate to have a dedicated team of employees whom I wouldlike to thank for their commitment and hard work. Peter Stephens Non-Executive Chairman Operating review I am pleased to report that, in its second year as a publicly quoted company,GETECH Group plc ("the Company" or "GETECH"), returned a pre-tax profit of£805,399 (2006: £1,010,013; restated £972,013) for the year ended 31 July 2007. BUSINESS SETTING Hydrocarbon exploration is continuing to experience significant investment dueto strong global demand for oil and gas, high commodity prices and the need forcompanies to replace their depleting reserves. These factors have resulted inexploration companies searching more widely for new resources and, consequently,many companies are entering countries for the first time. Our global productsand services provide these companies with the grounding they require in a costeffective manner and in a way that will help them reduce their exploration risk. GETECH's products and interpretational services have been developed over 20years, in which time the Company has compiled one of the world's most extensiveglobal gravity and magnetic databases. These data enable remote and non-invasiveimaging of subsurface geological structures, which can be detected by theirspatial changes in rock density (gravity) and rock magnetisation (magnetic).Qualitative and quantitative analysis of these data enable the three-dimensionalmapping of tectonic structures, and the determination of the shape and evolutionof sedimentary basins. The Petroleum Systems Evaluation Group ("PSEG") uses thisgeophysical expertise, together with geological data, and innovative methods, toassess the hydrocarbon potential of basins. Oil and mining companies license our data and reports when they are evaluating new exploration areasand/or when they wish to expand their current exploration activities intoneighbouring regions. COMPANY HISTORY GETECH has its origins as a research group at the University of Leeds,Department of Earth Sciences, which in 1986 initiated the compilation of gravitydata for the continent of Africa supported by a group of international oil andmining company sponsors. In 1996, the Company opened an office in Houston,Texas. In 2000, GETECH spun-out from the University of Leeds as a privatecompany (Geophysical Exploration Technology Limited), and subsequent businesssuccess resulted in the flotation of the Company on AIM in September 2005 with a name change to GETECH Group plc. GETECH was the first spin-out company from the University of Leeds to float on AIM. BUSINESS ACTIVITY GETECH's business can be described as: • Licensing global gravity and magnetic data to oil and mineral companies; • Undertaking proprietary geophysical service work; and • Evaluating the structure and petroleum systems of hydrocarbon basins. The first two elements have traditionally contributed and continue tocontribute, the majority of the Company's revenue. During the year we made asale of our global gravity database, to Malaysia's state oil company Petronas.We commenced exclusive marketing of aeromagnetic data over the Russian ArcticShelf and Deep Arctic regions. The Company achieved one full sale, of over £1million, of the data to a major international oil company. We are confident thatthe current year will bring further sales of these data sets. Smaller sales ofour archive continental-scale compilations were steady throughout the year,which again we expect to maintain during the coming twelve months. Proprietary service work during the year included the re-processing of over 100marine and airborne gravity and magnetic surveys along the coast of West Africa,and the securing of a major contract to process circa 150,000km of marinegravity and magnetic data in Southeast Asia, which will continue until early2008. Our Curie Point Research and Development study commissioned by Shell continuesinto its second year, and we hope that 2008 will see the first revenue from ourChinese geological and geochemical database marketing agreement. The third element relates to the PSEG which was formed in 2004 and provides oilcompanies with detailed insights into the key source, reservoir and seal issuesrelating to hydrocarbon basins. During the year the PSEG team has almost doubledin size and experienced significant sales success towards the end of ourfinancial year with multiple sales of its East Vietnam and Gulf of Thailandstudies. The PSEG's success has been its ability to integrate and analysegeological and geophysical data using Geographic Information System ("GIS")technology to generate non-exclusive frontier exploration studies that can bere-sold many times. In November 2006 GETECH was delighted to be short-listed, and subsequentlyawarded with The Yorkshire Post Annual Excellence In Business Award for 'University Spin-Out Company of the Year'. THE FUTURE The move into our freehold premises of Kitson House and Nicholson House, thatform the major part of Elmete Hall, to the north-east of Leeds city centre,provides us with the ability to expand within a single site for the foreseeablefuture under enhanced working conditions for our growing team. With a sustained high oil price, our prognosis for the current year is forcontinued growth of the PSEG due to further and wider acceptance of itspetroleum systems studies within the industry. Data sales to both oil and miningcompanies should remain strong on the back of strong commodity prices.Discussions are well advanced with organisations in many countries to allow usto increase our data holdings, especially over key exploration areas whereclients have expressed strong interest in obtaining data. Following the sales success of our Southeast Asian PSEG studies, we have securedsignificant pre-commitment of our new South Vietnam study. We believe thisunderwriting, together with a third sponsor of our Circum Arctic study,confirmed in the current year, will ensure a good future for the PSEG Groupthrough 2008. BOARD CHANGES Since the year end, GETECH announced that Chris Green had relinquished hisposition on the Board to undertake a period of study at the University of Leeds.I have worked with Chris for many years and his contribution to the Company hasbeen invaluable. Therefore I am delighted that he has agreed to work with theCompany on a part-time basis throughout his period of study so that we cancontinue to benefit from his expertise. I am also delighted to welcome Paul Markwick to the Board as GeologicalDirector. Paul has done an excellent job leading PSEG and I am confident he willprove a valuable addition to the Board. Finally, I look forward to working more closely with Raymond Wolfson, whom Ihave known for over 15 years. In his new position as Chief Executive Officer,his wealth of commercial experience will be a great asset to the Company as itmoves forward to an exciting future. The changes to the Board will allow me, inmy new role of Executive Chairman, to concentrate on the acquiring of new dataand clients as well as continuing to build and maintain links within the oilindustry. PROFESSOR J DEREK FAIRHEAD MANAGING DIRECTOR Consolidated profit and loss account For the year ended 31 July 2007 2007 2006 (restated) £ £Turnover - continuing activities 3,561,159 3,228,573Cost of sales (970,532) (783,875)Gross profit 2,590,627 2,444,698Distribution costs - (870)Administrative expenses (1,944,174) (1,611,910)Operating profit - continuing activities 646,453 831,918Interest receivable 158,946 140,124Interest payable - (29)Profit on ordinary activities before taxation 805,399 972,013Tax on profit on ordinary activities (242,968) (276,453)Profit on ordinary activities after taxation 562,431 695,560 Basic earnings per share 2.03p 2.62pDiluted earnings per share 2.03p 2.62p Statement of total recognised gains and losses for the year ended 31 July 2007 2007 2006 (restated) £ £Profit for the year and total recognised gains and losses 562,431 695,560relating to the yearExchange rate adjustment (21,771) -Total gains and losses recognised since last annual report 540,660 695,560 The statement of total recognised gains and losses for the year ended 31 July2006 was restated in 2007 for the adoption of FRS 20. All the Group's activities are classed as continuing for the period. Consolidated balance sheet As at 31 July 2007 2007 2006 (restated) £ £ £ £Fixed assetsIntangible assets 1,054 1,415Tangible assets 2,800,587 37,907 2,801,641 39,322Current assetsStocks 192,592 166,504Debtors 2,038,124 807,905Investments 21,941 23,880Cash at bank and in hand 920,681 4,317,913 3,173,338 5,316,202Creditors - amounts falling due within one 1,671,853 1,357,135yearNet current assets 1,501,485 3,959,067Total assets less current liabilities 4,303,126 3,998,389Representing:Capital and reservesCalled up share capital 69,231 69,231Share premium account 2,460,927 2,460,927Capital redemption reserve 6 6Share option reserve 79,000 38,000Profit and loss account 1,693,962 1,430,225Shareholders' funds 4,303,126 3,998,389 Consolidated cash flow statement For the year ended 31 July 2007 2007 2006 £ £ £ £Net cash (outflow)/inflow from operating (214,209) 653,496activitiesReturns on investments and servicing offinanceInterest received 158,946 140,124Interest paid - (29) 158,946 140,095Taxation - corporation tax paid (267,968) (222,453)Capital expenditure and financialinvestmentPayments to acquire tangible fixed assets (2,797,078) (46,317) (2,797,078) (46,317)Equity dividends paid (276,923) (110,769)Net cash (outflow)/inflow before use of (3,397,232) 414,052liquid resources and financingFinancingIssue of share capital - 3,000,000Costs of share issue - (519,842) - 2,480,158(Decrease)/increase in cash in the year (3,397,232) 2,894,210 The above financial information does not constitute statutory accounts for theyear ended 31 July 2007 or 2006. Statutory accounts for the year ended 31 July2006 have been delivered to the Registrar of Companies. The auditors have reported on the year ended 31 July 2007 financial statementsand their report was unqualified and did not contain a statement under Section237 (2) or (3). The statutory accounts for the year ended 31 July 2007 will bedelivered to the Registrar of Companies following the Company's Annual GeneralMeeting. EARNINGS PER SHARE Basic earnings per share is calculated on the basis of the profit for the yearafter tax, divided by the weighted average number of the ordinary shares inissue in the year. Diluted earnings per share is calculated on the basis of the profit for the yearafter tax, divided by the weighted average number of shares which would beissued if all options granted were exercised. All options were anti-dilutive at 31 July 2007. Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below: 2007 2006 Weighted Weighted average average Per share number of Per share Earnings number of amount Earnings shares amount (restated) shares (restated) £ £Profit attributable to 562,431 695,560shareholdersBasic earnings per shareEarnings attributable to 562,431 27,692,307 2.03p 695,560 26,575,666 2.62pordinary shareholders DIVIDENDS 2007 2006 £ £Paid during the year:Final dividend in respect of the year ended 31 July 2006 at 0.6p per share 166,154 -(2006: Nil)Interim dividend at 0.4p per share (2006: 0.4p) 110,769 110,769 276,923 110,769Proposed after the year end (not recognised as a liability):Final dividend in respect of the year ended 31 July 2007 at 0.8p per share 221,538 166,154(2006: 0.6p) INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) The Group will be required to report under IFRS for the year ending 31 July 2008and continues to plan for adoption and implementation. This report will be available at the Company's registered office: ConventionHouse, St Mary's Street, Leeds, LS9 7DP. This report will also be madeavailable on the Company's website www.getech.com. This information is provided by RNS The company news service from the London Stock Exchange