GETECH Group plc (GTC) - Final Results RNS Number : 8947P GETECH Group plc 31 October 2012 Getech Group plc ("Getech" or the "Group" or the "Company") Final Results for the 12 months ended 31 July 2012 Getech, the oil services business specialising in the provision of exploration data and petroleum systems studies and evaluations, announces its Preliminary Results for the year ended 31 July 2012. Financial highlights • Revenue for the year increased by 21% to £6,441,107 (2011: £5,326,866) • Profit before tax up 86% to £1,246,838 (2011: £669,702) • Net cash after outstanding debt rose by £1,951,169 to £2,606,020 • Proposed finaldividendfortheyearof0.8p (2011: 0.2p), a total of 1.0p for the year (2011:0.2p) Operational highlights • Successful launch of the Global Programmes (Globe) with five sponsors committed by31Julyandfour post year end • Strong data sales with 45% year on year growth • Continued development of Getech's position as a technology leader • Two innovative pilot studies funded during the year - Cryosat funded by six clients andanew study in the Red Sea funded by Aramco • Major data sales included Russian Arctic Shelf aeromagnetic data ($1.28m) and GlobalContinental Margins data ($600k) • Corporate rebranding exercise initiated with successful relaunch under the new brand inSeptember 2012 • Average number of staff up 13% with minimal staff turnover Stuart Paton, Non-Executive Chairman of GETECH Group plc, said: "I am extremely pleased to present such a strong set of results for the Company, which builds on the good results from last year. Continued high oil prices have led to companies expanding their international exploration efforts, and hence to the increased requirements for our products. In particular, the development of Globe, which utilises our key skills in integration of data, has been embraced by industry. The roll out of Globe, with nine sponsors now signed up to the programme, is transformational for the Company both in terms of revenue growth and visibility of future income. The strength of our technical team, our library of geophysical data and integrated studies, and our proven ability to consistently sell products, make us very optimistic about continuing to grow the Company in the coming years." Enquiries GETECH Group plc Tel: 0113 322 2200 Raymond Wolfson, Chief Executive WH Ireland Limited Tel: 0161 832 2174 Katy Mitchell Walbrook PR Tel: 020 7933 8790 Helen Westaway Mob: 07841 917 679 email@example.com Chairman's statement I am pleased to make my second report as Chairman of Getech, on the seventh full year results since its admission to AIM, for the year ended 31 July 2012. Getech is a geoscience services business specialising in theprovision of data, studies and services to the oil, gas andmining exploration sectors. Results I report a Group profit before tax of £1,246,838 (2011: £669,702) after interest receivable of £6,016 (2011: £5,356) on revenue of £6,441,107 (2011: £5,326,866). The post-tax profit was£930,018 (2011: £574,987), giving earnings per share of 3.18p (2011: 1.97p). Dividends Getech intends to continue its policy of progressive dividends as appropriate and is proposing a final dividend of0.8p per share in respect of the year to 31 July 2012 (2011: 0.2p per share) in addition to the interim dividend of 0.2p per share announced inApril 2012. The final dividend will be paid on 20 December to shareholders on the register of members on 23 November 2012. Business review I am pleased to report very strong growth in the performance ofthe Company this year following on from the turnaround in 2010-2011. The Company generated a record level of revenue which was an increase of 21% on the previous year. Pre-tax profits also increased 86% year on year. Both revenue and profits were significantly ahead of expectations. The business is generating significant cash flow from operations and, at 31 July 2012, we had a gross cash position of £3,010,782, outstanding debt under the National Westminster Bank facility of £404,762 and hence a net cash position of £2,606,020. We announced a number of major successes during the year in three key areas. First, our strategic aim to diversify from our core business of sales of gravity and magnetic data and multi-client studies into multi-year Global Programmes has been very successful with five sponsors already signed up. Since the financial year end, we have signed up a further four major companies to the Global Programmes. We have now developed and extended the scope of the work and rebranded the Global Programmes as Globe. Globe is aimed initially at major companies but we are seeing increasing interest from smaller companies with significant international exploration portfolios who want to access our products, skills and expertise. Second, gravity and magnetic data sales, and associated proprietary studies, have continued to strengthen and demonstrate the continued requirement for our traditional products inexploration. Further, we are actively adding to ourglobal database through agreements with host countries andwe see a continuing demand for such products. Third, we strive to be thought leaders in our field. Our staff regularly present at major international conferences across a range of topics where their papers are highly regarded; we are leading a consortium on the use of new satellite-based gravity data; and we are undertaking aground-breaking study for Aramco to map sub-salt structures using new potential field methods. We believe that this intellectual lead differentiates us from our competitors and builds the basis forfuture business. Outlook The continuing high oil and gas prices (outside the USA) have resulted in an ongoing recovery in the oil and gas sector, particularly for exploration and production companies. Wecontinue to believe strong commodity prices are likely tolead to further increased spending from companies inexploration and hence on the services we offer. We are pleased to report that we have made a solid start to 2012-13. As reported, we have already signed up four further sponsors for Globe since the period end. One of these sponsors has committed to a €1m call-off contract for a range ofservices including the core Globe products. The very strong level of initial commitments to Globe covers a three year work programme which substantially improves the forward visibility of earnings. We also believe that theclose relationships with the sponsoring companies will lead to thesale offurther Globe products and proprietary contracts, and that we will establish further sales as a "provider of choice" in the field ofintegrated global geoscience. With the requirement for E&P companies to expand into new frontier basins, and to minimise cost at the early stages of such exploration, we consider that there will be a continuation of the strong trend in gravity and magnetic data sales. We believe that the combination of our ever increasing library of products anddata and our strong sales presence in the UK and USA willreinforce the growth path and we are optimistic about thecoming years. With our current strong cash position and proven ability to develop the business, we are actively looking for acquisition opportunities which will grow our core areas of expertise. Finally, I would like to say how pleased I am to be involved with the Company and to thank the staff and my fellow Directors for all their hard work and dedication. I would particularly like to thank Mr Ian Somerton and Dr David Roberts, who both left the Board of Directors during the lastyear, for their substantial contributions to the Company. Dr Stuart Paton Non-executive Chairman Operating review I report that in our seventh year as a public quoted company, Getech Group plc returned apre‑taxprofit of £1,246,838 (2011: £669,702) for the yearended 31 July 2012. Business setting The exploration market in the oil and gas sector has been strong throughout the year. This has been well supported bythe continuing firm oil price. We believe that the relative stability of the oil price at historically high levels will continue to provide a sound market environment for exploration giving a very positive outlook for our business. Business activities Getech's strength lies in its ability to provide a range of data,services and solutions at scales ranging from global to sub-regional. Key to our success is the ability to understand the needs of our clients and provide high quality solutions to help them in their goal of finding oil and gas resources. We have now developed and expanded the scope of the Global Programmes and rebranded it as Globe, which incorporates the data, knowledge and experience that we have acquired over many years and at many levels of resolution. Globe enables us to deliver the core Global Programmes to our sponsors but will also provide an effective and efficient way of delivering information and solutions to clients whose needs are regional or sub-regional. Oil, gas and mining companies license our data and studies when they are evaluating new exploration areas and when they wish toexpand their current exploration activities into neighbouring regions. We are uniquely able to provide integrated solutions across a broad range of disciplines including, amongst others, potential field geophysics, structural geology, plate tectonics, palaeolandscape analysis and geochemistry. We actively work with a number of universities that are at the forefront of their disciplines (e.g. in palaeo-climate modelling) and also attend arange of international conferences to ensure we continue ourtechnical excellence. This year continued the strong upward trend in revenue and profits. The main reasons for this were the continued strong growth in datasales and the very successful launch and market entry of ourmulti-year Global Programmes, now within the Globe brand. Data sales were up by 45% on the previous year and we made a number of significant individual data sales: • In April, we announced a licence of US gravity and magnetic data valued at $1.2m. These data were licensed out of the assets we acquired from Lisle Gravity Inc. in December 2008. While there has been a stream of licences of various sizes for these data over the period since the acquisition, this sale is the largest to date. • In July, we issued two licences for our global continental margins gravity and magnetic datasets with an aggregate value in excess of $600,000. The global continental margin datasets are part of the library of gravity and magnetic data towhich Getech has acquired access over the past 25 years and demonstrate the continuing value of global datasets toE&P companies in their exploration efforts. • Also in July, the Company signed a further licence for its Russian Arctic Shelf magnetic data set with a gross sales value of $1.28m. The Russian Arctic Shelf is a major under‑explored area which is still in the early stages of exploration for oil and gas due to its harsh climate conditions and high exploration and production costs. • We also made substantial sales of the Iraqi and Russian onshore magnetic datasets (gross values $500k and $550krespectively). The last year has seen the fruition of a number of years ofstrategic investment in Globe. This was launched to themarket in November 2011 and by July 2012 wehad fivesponsors signed up to the three year programme of deliverables. The aim of Globe is to provide exploration teamsin oil and gas companies with a robust andconstantly updated platform which supports their understanding, investigation and risking of new areas of interest. Initial development work started in 2009 and Globe now encompasses a range of products thatbuild on Getech's traditional strengths in potential field geophysics as well as itsunique global plate model andpalaeogeographic mapping techniques. These provide insights into the shape and evolution of sedimentary basins and the geographic context ofthe deposition within those basins. The palaeogeographies will then be used as the boundary conditions for state-of-the-art palaeoclimate, oceanand tide modelling. The successful market entry of Globe has resulted from a combination of the innovative thought-leading content which results from the technical work of Dr Paul Markwick and his team, combined with the sales direction and drive from Dr Paul Carey. The Company recognises that, in order to continue to grow thebusiness, it is vital to stay in the forefront of our technologies. Inthis context three particular areas are of note: • In July 2012, we announced a nine month research and development study, funded by six companies, to develop and improve methodologies and techniques to integrate the latest results of the CryoSat-2 satellite data into the existing Getech satellite gravity map of the Earth's oceans. The inclusion of the CryoSat-2 data will improve the quality of the gravity map and make such data of even greater value for oil exploration in marine areas. The R&D study has focused on four test areas chosen bythe study sponsors, who will provide terrestrial gravity data forcomparison purposes. This R&D study costs £15,000 per sponsor and it is intended that a successful outcome of this studywill lead in early 2013 to a full scale study. • In April 2012, we announced an Advanced Geophysical Services study with Aramco Overseas Company B.V. to mapthe sub-salt basin structures and depth to basement ina part of the Red Sea. The study uses new methodologies and techniques that have been developed by Getech to specifically map sub-salt basinareas that are difficult to map with conventional seismic reflection data. The Advanced Geophysical Services study results fromover two years of developing and testing new 2D and 3D potential field inversion methods allowing better imaging andclearer understanding of deep basement structures. Webelieve this method can be applied more widely andaidinternational exploration efforts. • We have implemented new studies to evaluate the potential ofunconventional resources in currently unexplored areas. Thesuccess of the shale gas business in the USA has had adramatic effect on the US economy. Although the surface aspects, in respect of permitting, access to infrastructure and drilling technology, are vital to the success of an unconventional play, understanding the subsurface is absolutely key. Getech hasarange of data, skills and expertise which can be applied tothis new and exciting exploration concept. Staff and corporate identity Our staff are critical to the development of new ideas, insights anddelivery of our products. We have strengthened our team inanumber of key areas in the last year and are increasing ourcooperation with key universities. In particular we continue to strengthen our sales team to help us to capitalise on the global interest in our products and services. At the end of the year we started a strategic rebranding exercise. This has led to a set of clear statements about our aspirations and values which in turn led to fresh and innovative new branding concepts and imagery. We are actively using these to inform ouractions at all scales from short-term plans through to long-term strategy development. The future Getech has invested heavily over the last few years in a number ofareas ranging from developing Globe, through long-term relationship building with national oil companies and other partner organisations, to thedevelopment of new and innovative methodologies and techniques across a range of disciplines. The results of these technical investments, combined with our strongly directed sales team, are increasingly being reflected in our trading performance and we anticipate this trend will continue. Since the year-end we have announced that a further four sponsors have committed to Globe, which now include, amongst others, ConocoPhillips and ENI bringing thetotal to nine. These give us a significantly improved forward visibility of income but also provide what we hope will be a series oflong-term relationships through which we can continue to develop and deliver innovative and valuable services to our clients. We believe that these sponsors will increasingly use Getech forproprietary studies which build on the strong technical basisof ourprogrammes. We continue to develop our technical skills with internal R&D but we are also working with universities that are well known intheir fields to make sure that we can deliver leading-edge solutions to our clients. We believe that these will help to reinforce our technical credibility and underpin our future growth. Finally we have delivered a record result for the year and once again would like to thank all our staff and Board colleagues for their unstinting efforts on behalf of Getech. We believe we have made it a company that people want to work for and our team looks forward to the new challenges that the future years will bring. Raymond Wolfson Chief Executive Officer Consolidated statement ofcomprehensiveincome For the year ended 31 July 2012 2012 2011 £ £ Revenue 6,441,107 5,326,866 Cost of sales (2,692,338) (2,677,516) Gross profit 3,748,769 2,649,350 Administrative costs (2,495,161) (1,966,673) Operating profit 1,253,608 682,677 Finance income 6,016 5,356 Finance costs (12,786) (18,331) Profit before tax 1,246,838 669,702 Income tax expense (316,820) (94,715) Profit for the year attributable to owners of the 930,018 574,987 parent Other comprehensive income Currency translation differences on translation of 10,949 (44,477) foreign operations Total comprehensive income for the year attributable to owners of the parent 940,967 530,510 Earnings per share Basic earnings per share 3.18p 1.97p Diluted earnings per share 2.97p 1.84p All activities relate to continuing operations. The accompanying notes form an integral part of these financial statements. Consolidated statement of financial position As at 31 July 2012 2012 2011 £ £ Assets Non-current assets Property, plant and equipment 2,639,915 2,656,227 Intangible assets 737,886 837,341 Deferred tax assets 249,470 99,519 3,627,271 3,593,087 Current assets Inventories 60,000 472,634 Trade and other receivables 2,962,928 1,600,280 Other current assets 19,416 32,461 Cash and cash equivalents 3,010,782 1,345,327 6,053,126 3,450,702 Total assets 9,680,397 7,043,789 Liabilities Current liabilities Borrowings 285,714 285,714 Trade and other payables 3,300,164 1,557,094 Current tax liabilities 410,199 52,975 3,996,077 1,895,783 Non-current liabilities Borrowings 119,048 404,762 Trade and other payables 31,833 59,102 Deferred tax liabilities 49,518 35,580 200,399 499,444 Total liabilities 4,196,476 2,395,227 Net assets 5,483,921 4,648,562 Equity Equity attributable to owners of the parent Share capital 73,093 73,093 Share premium account 2,841,538 2,841,538 Capital redemption reserve 6 6 Share option reserve 188,502 177,161 Currency translation reserve 2,812 (8,137) Retained earnings 2,377,970 1,564,901 Total equity 5,483,921 4,648,562 The financial statements were approved by the Board of Directors on 30 October 2012. Dr S M Paton Director The accompanying notes form an integral part of these financial statements. Consolidated statement of cash flows For the year ended 31 July 2012 2012 2011 £ £ Cash flows from operating activities Profit before tax 1,246,838 669,702 Share-based payment charge 11,341 19,561 Depreciation and amortisation charges 202,604 207,244 Finance income (6,016) (5,356) Finance costs 12,786 18,331 Exchange adjustments (35,259) 11,899 Decrease in inventories 412,634 37,360 (Increase) in trade and other receivables (1,362,648) (450,002) Increase in trade and other payables 1,715,801 340,204 Cash generated from operations 2,198,081 848,943 Income taxes (paid)/refunded (82,564) 7,389 Net cash generated from operating activities 2,115,517 856,332 Cash flows from investing activities Purchase of property, plant and equipment (51,256) (46,568) Interest received 6,016 5,356 Net cash used in investing activities (45,240) (41,212) Cash flows from financing activities Repayment of long-term borrowings (285,714) (285,714) Equity dividends paid (116,949) - Interest paid (12,786) (18,331) Net cash used in financing activities (415,449) (304,045) Net increase in cash and cash equivalents 1,654,828 511,075 Cash and cash equivalents at beginning of year 1,345,327 846,871 Exchange adjustments to cash and cash equivalents at beginning of year 10,627 (12,619) Cash and cash equivalents at end of year 3,010,782 1,345,327 The accompanying notes form an integral part of these financial statements. Consolidated statement of changes in equity For the year ended 31 July 2012 Share Capital Share Currency Share premium redemption option translation Retained capital account reserve reserve reserve earnings Total £ £ £ £ £ £ £ At 1 August 2010 73,093 2,841,538 6 157,600 36,340 989,914 4,098,491 Share-based payment charge - - - 19,561 - - 19,561 Transactions with owners - - - 19,561 - - 19,561 Profit for the year - - - - - 574,987 574,987 Other comprehensive income Currency translation differences - - - - (44,477) - (44,477) Total comprehensive income for the year - - - - (44,477) 574,987 530,510 At 31 July 2011 73,093 2,841,538 6 177,161 (8,137) 1,564,901 4,648,562 Share-based payment charge - - - 11,341 - - 11,341 Dividends - - - - - (116,949) (116,949) Transactions with owners - - - 11,341 - (116,949) (105,608) Profit for the year - - - - - 930,018 930,018 Other comprehensive income Currency translation differences - - - - 10,949 - 10,949 Total comprehensive income for the year - - - - 10,949 930,018 940,967 At 31 July 2012 73,093 2,841,538 6 188,502 2,812 2,377,970 5,483,921 Notes to the consolidated financial statements For the year ended 31 July 2012 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 tothepetroleum andmining industries to assist in their exploration activities. 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. Getech Group plc shares are admitted to trading on the London Stock Exchange's AIM. Basis of preparation These consolidated financial statements ("the financial statements") have been prepared in accordance with International Financial Reporting Standards (IFRS) in issue as adopted by the European Union. IFRS include interpretations issued by theInternational Financial Reporting Interpretations Committee (IFRIC). The financial statements have been prepared under the historical cost convention except in relation to financial instruments heldat fair value through profit or loss. The accounting policies set out below have been applied consistently throughout the Group for the purpose of preparation ofthefinancial statements. The Directors have instituted regular reviews of trading and cash flow forecasts and have considered the sensitivity of these forecasts to different assumptions about future income and costs. With the improved cash levels and continued prospects forprofitable trading, the Directors are fully satisfied that the Group is a going concern and will be able to continue trading fortheforeseeable future. Dividends Getech intends to continue its policy of progressive dividends as appropriate and is proposing a final dividend of0.8p per share in respect of the year to 31 July 2012. The final dividend will be paid on 20 December to shareholders on the register of members on 23 November 2012. 2012 2011 £ £ Paid during the year Final dividend in respect of the year ended 31 July 2011 at 0.2p per share (2011: £nil) 58,474 - Interim dividend at 0.2p per share (2011: £nil) 58,475 - 116,949 - Proposed after the year end (not recognised as a liability) Final dividend in respect of the year ended 31 July 2012 at 0.8p per share (2011: 0.2p) 233,897 58,474 Earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of the Ordinary Shares in issue in the year. 2012 2011 Profit attributable to equity holders of the Group £930,018 £574,987 Weighted average number of Ordinary Shares in issue 29,237,151 29,237,151 Basic earnings per share 3.18p 1.97p Diluted earnings per share 2.97p 1.84p Diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of the Ordinary Shares which would be in issue if all the options granted, other than those which are anti-dilutive, were exercised. The addition to the weighted number of the Ordinary Shares used in the calculation of diluted earnings per share for the year ended 31 July 2012 is 2,040,924 (2011: 2,088,414). Of the share options granted at 31 July 2012, 529,789 were anti-dilutive because the conditions for exercise had not been met (2011: 529,789). Notice of Annual General Meeting The Annual General Meeting of Getech Group plc ("the Company") will be held at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LJ on 12 December 2012 at 12 noon. This information is provided by RNS The company news service from the London Stock Exchange END FR EAKEEDLKAFFF -0- Oct/31/2012 07:00 GMT
GETECH Group plc GTC Final Results
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