GETECH Group plc GTC Final Results

  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

                                 helen.westaway@walbrookpr.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