TIDMGTC
RNS Number : 5448O
GETECH Group plc
08 November 2016
Getech Group plc
("Getech" or the "Company"
and with its subsidiaries the "Group")
Final Results for the 12 months ended 31 July 2016
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
2016.
Financial highlights
-- Revenue GBP7,031,000 (2015: GBP8,639,000)
-- Profit before tax GBP671,000 (2015: GBP1,992,000)
-- Earnings per share 3.25p (2015: 5.77p)
Operational highlights
-- Knowledge base growth: year six of Globe,
five new Regional Reports, Multi-Sat completed
-- Sonangol multi-disciplinary review completed
(our largest single contract to date)
-- New business with National Oil Companies:
World Bank funded contract in Sierra Leone
-- Diversification into new markets: new contract
in the nuclear energy sector
--
Counter cyclical M&A
-- Acquisition of Exprodat, a leading specialist
in geographic information systems
Chairman's statement
With oil prices remaining low and volatile throughout the
financial year ended 31 July 2016, the market backdrop to my sixth
report as Chairman remained challenging for a Group largely
focussed on the provision of products and services to the natural
resources industries. In the first half of the financial year,
Getech acted decisively to strengthen its operations through
innovation around its core products and by implementing significant
cost control measures. These steps resulted in a considerable
improvement in Getech's trading performance in the second half of
the year, when compared to the first half of the year. Building on
this momentum, the Group acquired Exprodat Consulting Limited
(Exprodat), largely by issue of new shares. We believe this
counter-cyclical acquisition redefines our skill base within
geographic information systems (GIS), which is already transforming
the value proposition around the Group's core activities and
opening new opportunities to markets outside of oil and gas.
Beyond 2016, having built an unparalleled suite of global
geological and geophysical data, analysis and products, Getech is
now focussed on enhancing this offering through providing better
access to its data sets and refocussing its offering to more
practically address the day-to-day commercial challenges faced by
our customers. I am excited by the value potential that this looks
to unlock.
Results
For the financial year ended 31 July 2016, the Group reports a
profit before tax of GBP671,000 (2015: GBP1,992,000) on revenue of
GBP7,031,000 (2015: GBP8,639,000). The post-tax profit was
GBP1,089,000 (2015: GBP1,813,000), giving earnings per share of
3.25p (2015: earnings per share of 5.77p).
Dividends
The Directors are not proposing a final dividend in respect of
the financial year to 31 July 2016 (2015: final dividend of 1.74p
per share). Getech intends to continue its policy of progressive
dividends as appropriate, but given the ongoing market conditions,
the Directors do not consider it prudent to pay a dividend at this
time.
Business Review
The continuing low oil price throughout the 2016 financial year
resulted in challenging conditions for the Group. Getech was
initially affected by the reduction in exploration expenditure in
late 2013. The sustained low oil price since the middle of 2014 led
to ongoing low levels of capital expenditure across the whole
exploration and production (E&P) sector, with exploration
expenditure particularly hard hit. There have been numerous major
redundancy rounds in many E&P and service companies. A wide
range of service companies have been severely affected, both in
terms of their incomes and their profits, with a number going
bankrupt and consolidation taking place across the sector. The low
oil price has also detrimentally influenced national oil companies'
(NOCs') abilities to finance exploration efforts as their national
budgets have been severely impacted.
The Group has relentlessly pursued sales opportunities in all
markets in which it operates. Many clients express strong support
for the Group's products but they do not currently have any budget
available to make purchases. Our strong relationships with clients
ensure that we stay up-to-date with their requirements and hence we
believe we are well positioned to act on an improvement in the
market. The acquisition of Exprodat in June 2016 has significantly
strengthened the Group's capabilities, both in terms of the range
of services we can offer and by creating synergies to the Group's
existing services. A key focus in the coming year will be to
develop these synergies to create new products and services and to
broaden Exprodat's software offering. Exprodat also provides very
close links to ESRI, a key geographical information services
platform, which has already brought connections to other businesses
outside E&P.
Getech has made some very hard decisions during the year,
including making a number of staff redundant, reducing staff hours
and salaries, and cutting back nonessential expenditure. It is
incredibly difficult to make these decisions as they directly
impact individual people and their families; however, these steps
have had to be taken to ensure the resilience of the Group.
Outlook
The oil price has strengthened recently, from lows of around
US$30/bbl in early 2016 to around US$50/bbl by the end of Getech's
financial year in July 2016. This strengthening in the oil price,
combined with a reduced cost profile, should make future E&P
investment more attractive. Many analysts and market commentators
consider that US onshore will become the 'swing producer' and hence
should be the focus of short-term capital; however, there has been
very limited exploration spend across the whole sector for the last
two or more years. Therefore, in the medium term, as has happened
in previous cycles, we are likely to see the oil price strengthen
further due to supply constraints caused
by the reduced level of investment. This strengthening in oil
price will presumably also affect the level of investment from
NOCs, who will need to maintain production levels while encouraging
new investment through license rounds to increase longer-term
production.
At the same time, the deep cuts to staffing in many companies,
including the International Oil Companies (IOCs) and large US
Independents, mean that their capability to undertake exploration
is severely curtailed. In the medium term, this provides a real
opportunity for Getech to provide focussed, high-quality advice to
these companies. The Group continues to believe that its range of
products provides a strong foundation upon which it can grow the
business. We work with a wide range of clients across the world,
from NOCs and Super Majors to mid-size and small companies.
The Group's key focus in the coming year will be to maximise the
value of combining the knowledge and data from Getech with the
skills we have gained through the ERCL and Exprodat acquisitions to
create a portfolio of products that are an essential part of the
exploration process. This will involve a clear understanding of the
issues faced by explorationists and the application of our
integrated approach to address these issues in a timely and
cost-efficient manner.
We believe the Group will require organisational changes and
strong leadership to identify, build and deliver these products.
The appointment of Dr Jonathan Copus as CEO provides the leadership
required to make these organisational changes and to drive the
business forward for its next stage of growth. Jonathan brings
extensive industry, corporate finance and capital markets
experience, having worked as an Exploration Geologist at Shell, as
the top-rated E&P Sell-side Equity Analyst at a number of City
companies (including Investec and Deutsche Bank) and most recently
as Chief Financial Officer at Salamander Energy plc, which was
acquired by Ophir plc in 2015. His professional training as a
geologist, his industry experience with both Super Major and
UK-listed Independent Oil and Gas Companies, and his extensive City
experience make him uniquely suited for this role. The Board is
very pleased to have been able to attract an individual of this
calibre to the role and look forward to working with him to grow
the Group.
I am very pleased that Mr Chris Flavell joined the Board in
November 2015. Chris has 35 years' experience in operating E&P
companies and consultancies, and he brings a wealth of knowledge
and industry contacts. Most recently, he managed Tullow Oil's
exploration geoscience team from 2007 to 2013, which was a period
of outstanding success and growth for the company. In 2013, he left
Tullow Oil to form a geoscience-focussed recruitment
consultancy.
The last year has seen many changes in Directors and staff in
the business. I would like to reiterate our thanks to Mr Raymond
Wolfson for his outstanding contribution and commitment to Getech
over many years. I would also like to thank both Mr Colin Glass,
who stepped down as a Director in November 2015 after 16 years of
involvement with Getech, and Dr Paul F. Carey, who announced that
he is stepping down as a Director and leaving the Group with effect
from 1 January 2017. A number of staff have also left the business
through the redundancy process; I would like to thank each and
every one of them for their commitment to the Group.
Finally, I would like to say how pleased I am to continue to be
involved with the Group and to thank the staff and my fellow
Directors for all their hard work and dedication. I am delighted to
welcome the Exprodat staff based in London. The whole organisation
has shown great fortitude in challenging circumstances.
Dr Stuart M. Paton
Non-executive Chairman
Getech Group plc Tel: 0113 322 2200
Jonathan Copus, CEO
--------------------- -------------------
WH Ireland Limited Tel: 0161 832 2174
Katy Mitchell
--------------------- -------------------
Operating Review
I am pleased to make my first report as CEO of Getech, having
joined the Group at the beginning of
August 2016. I take up the reins in what continues to be a
challenging business environment for both our customers and the
Group. Across Getech's financial year to July 2016, budgets for
drilling exploration wells did not see any significant signs of
recovery and the market for proprietary consulting work remained
weak. Our customers, however, continue to refresh and rework their
views around the opportunity sets within and outside of their
exploration portfolios, which has resulted in continued demand for
our data and regional multiclient consulting activities. Across our
broad client base, our customers have continued to value Getech's
core products and services, many of which form important components
of their day-to-day operational workflows.
Getech's focus is to deliver to our customers value creative
products from a diversified and stable business platform. To
achieve this, the Group must produce a high-quality, innovative,
technical offering and maintain a steady focus on costs. It must
also retain the vision to see this market as an opportunity to
significantly strengthen the Group's offering. The most recent step
along this path was the acquisition of Exprodat Consulting Limited
(Exprodat), a geographical information systems (GIS) services and
software specialist.
In partnership with our customers to deliver data and analysis
at a global scale
Getech remains committed to the continued expansion of our
unrivalled inventory of gravity and magnetics data and expertise,
and our Globe products and services.
In 2016, the Group enhanced its capabilities in gravity and
magnetics through the formation of a dedicated centre of
excellence. As a low-cost alternative to seismic data, gravity and
magnetic data continues to be seen as an attractive purchase for
Getech's natural resources clients. As such, data sales remain an
important revenue stream for the Group. In July 2016, Getech also
delivered the three-year Multi-Satellite Altimeter Gravity
Programme (Multi-Sat project), which has provided a route for our
customers to greatly enhance the quality of their satellite
data.
Globe, as a client-funded product suite, is now in its sixth
year of support and continues to gain more interest and use.
Activity throughout 2016 was pre-funded by a broad grouping of
International Oil Company and large Independent Oil Company
customers. Through Globe, Getech delivers to its customers the most
comprehensive reconstruction of past geography, depositional
environments, tectonics and climate undertaken by any organisation
to date. Globe continues to provide an environment that encourages
regular interaction with our clients. The work also feeds through
into Getech's multiclient Regional Report products and focussed
consultancy work, both of which draw on the full spectrum of
Getech's knowledge bases and operations.
Within consulting, 2016 saw the completion of work on Getech's
extensive, multi-disciplinary Angolan basin review for Sonangol.
This contract was one of the largest Getech have had and it is
testament to our strong relationship with Sonangol. Against a
depressed consultancy market, we have recently been awarded further
consultancy work by the government of Sierra Leone (see below). We
remain confident that as the market improves, we will secure other
contracts with national oil companies (NOCs) who see the value of
our integrated, multi-disciplinary approach that is underpinned by
excellent data and a strong GIS platform.
The continued demand throughout 2016 for Getech's Regional
Reports indicates that although our customers are not drilling,
they continue to refresh and rework their views around the
opportunity sets within and outside of their exploration
portfolios. This pattern has continued into the first half of
Getech's 2017 financial year, although the market remains both
fragile and volatile.
Finding Opportunity within a Turbulent Market
Against this backdrop, Getech's Board took an active decision to
not just hunker-down and wait for an oil-price driven market
recovery. Instead, the Board saw a number of clear partnership or
transactional opportunities across a range of companies. The
Board's focus continues to be on companies that are not in direct
competition with Getech and where there is the potential to deliver
significant value enhancement through complementary skills and
customer relationships.
The first of these acquisitions, ERCL, was completed in 2015.
Its operations were progressively integrated into the Group during
the course of 2016. ERCL has extended Getech's commercial reach
beyond its traditional regional gravity and magnetics new business
venture market into a more seismic-linked sphere where the Group is
now able to offer detailed well planning, field development and
asset and data management advice to companies, governments and
NOCs.
Throughout 2016, under the ERCL brand, Getech continued to
support the Mozambique Government's petroleum activities through
the provision of commercial and geotechnical advice and training.
As part of this work, 2016 saw the completion of the country's
fifth licensing round (a program assisted by ERCL) and work
commenced on the preparation of data products for future rounds. In
addition to this work, ERCL recently won a World Bank contract to
support the government of Sierra Leone in its petroleum activities
and it has ongoing work in a number of other countries, including
Lebanon, Namibia, Palestine and Pakistan. Complementing these
government and NOC projects, ERCL also provides exploration and
development-based technical/commercial assistance to a range of
independent upstream companies; recent activity includes operations
in China, Equatorial Guinea, Mexico, Morocco and Spain.
In June 2016, Getech completed a second significant transaction:
the acquisition of Exprodat. Exprodat specialises in the provision
of services and consultancy relating to data management and the use
of GIS. GIS, in the form of ESRI's ArcGIS(TM) product suite, is an
industry-standard tool that is fundamental in supporting many
aspects of oil and gas operations. Getech already has a
long-standing and highly skilled GIS team, but this team had to
date been focussed on servicing Getech's internal business needs.
Exprodat therefore brings an additional skilled GIS resource that
is dedicated to generating an external income stream for the
Group.
As a key part of its activities, Exprodat has developed, and
licenses commercially, several GIS software packages that support
petroleum exploration. During the current downturn, the client
retention of these subscription-based software products has been
approximately 95%; this brings a substantial client base to Getech,
with a significant proportion of recurring income. For Getech, it
is particularly relevant that although the Exprodat staff
specialise in GIS and software skills, they are also predominantly
geologists by training, giving them an understanding of our
clients' commercial and data management needs. Exprodat also
delivers GIS training in both public and private environments;
since 2007, Exprodat has trained approximately 2,500 oil and gas
professionals in GIS.
Exprodat is an ESRI Gold Partner (one of only two in Europe) and
it has ISO 9001 certification. Each of these features represents an
external validation and recognition of the quality of the company's
services. With GIS being used in many industries other than the
exploration and production (E&P) service sector, it is very
pleasing to note that through the acquisition of Exprodat, Getech
is now using its geoscience, GIS, software and consulting skills to
extend its operations beyond its core oil and gas customer base;
the Group is currently engaged in operations within the nuclear,
mining, agriculture and water management industries.
A Focus on Costs
Getech's management team is focussed on opportunities that
strengthen and broaden the Group's product offering, while at the
same time taking steps that balance the Group's cost base with our
customer's ability to pay for our products.
By taking advantage of the current turbulent market to build a
broader service offering, the two acquisitions completed to date
have also brought increased operational costs into the Group.
Management has therefore kept a close watch on Group profitability,
and in the first half of the 2016 financial year, a significant
cost reduction program was launched. In the second half of the 2016
financial year, the delivery of this program resulted in a material
step-down in the Group's cost structure: staff, general and
administrative costs were lowered by 22% on an annualised
basis.
Continuing the Group's focus on profitability, following the
acquisition of Exprodat, a further series of cost reduction
measures are currently being enacted across the Group.
Outlook
While the market is at best uncertain, our dialogue with our
customers remains vigorous and the Group has a pipeline of
significant sales proposals awaiting approval. As we approach the
end of our customers' budget year, for the first time in several
years, feedback from clients leaves us encouraged by the market
mood; the recent increase in the oil price gives our customers more
confidence that their budgets will become available in 2017.
Getech's management, however, is focussed on optimising the
Group's positioning regardless of any potential recovery in the
market. Having built an unparalleled suite of global geological and
geophysical knowledge bases, Getech is now moving towards a model
where the Group is focussed on enhancing this offering through
providing better access to its data sets and refocussing its
products and services so that they more specifically address the
commercial challenges faced by our customers.
Key to achieving this goal will be further integration of both
ERCL and Exprodat into the Getech Group. The 2017 financial year
has seen far greater movement of staff between the Group's offices
and a blurring of the project staffing and management lines between
Leeds, Henley-on-Thames and London.
Test marketing has already demonstrated that the application of
Exprodat's software and advanced GIS skills to Getech's core
products and services has the potential to revolutionise the way
that our customers access these offerings. This is expected, in
turn, to open up new potential for the commercial application of
information held within the Group's knowledge bases, which
subsequently should redefine the value proposition to our
customers. This potential is evident on a single-product basis
(e.g. Globe or Regional Reports) as well as through
multi-disciplinary/multi-product programs of work (e.g. proprietary
work for government agencies and NOCs).
Although not yet significant as standalone revenue streams,
Getech's recent advances into sectors beyond oil and gas highlight
the fact that the Group's geoscience and GIS skills have the
potential to be applied to a much broader spectrum of activities.
These opportunities are under investigation and have the potential
to diversify the Group's revenue base.
Dr Jonathan Copus
Chief Executive Officer
Financial Review
With oil prices falling a further 38% across the 2016 financial
year, the exploration budgets of our customers remained under
considerable pressure. For Getech, the financial year was one of
two halves: the first half reflected lower revenues and
pre-integration costs associated with the acquisition of ERCL; the
second half saw a revenue-driven trading improvement and the
benefits of a program of significant cost management.
Operating Income and Cash Flow
Revenue for the 2016 financial year amounted to GBP7,031,000
(2015: GBP8,639,000), a reduction of 19% from the previous
financial year. While we have seen continued interest in Getech's
industry-leading products and services, the restricted exploration
budgets for the majority of E&P companies have had a direct
effect on Getech's operating income.
In the first half of the 2016 financial year, slow trading
conditions compounded a post-acquisition expansion in the Group's
cost base, resulting in a first half loss before tax of GBP704,000
on revenues of GBP3,288,000. Getech rationalised its cost base
towards the end of the first half of the 2016 financial year, which
led to a cost base reduction of 17%(1) in the second half of the
financial year. The combination of these reductions and a 14%
increase in revenues to GBP3,743,000 resulted in improved
underlying performance in the second half of the year. Getech's
second half profit before tax amounted to GBP1,375,000. This
included an GBP845,000 write-down adjustment made to the fair value
of the ERCL acquisition earn-out provision (the amount by which the
total cash consideration for the ERCL acquisition has reduced from
our original expectation). Full year profit before tax was
GBP671,000 (2015: GBP1,992,000).
The Group's cost base is predominantly in pound sterling, but a
significant proportion of its revenue is denominated in US dollars.
Recently, currency markets have been favourable to the Group, with
gain on foreign exchange movement reaching GBP123,000 for the 2016
financial year (2015: GBP99,000).
Having reported a net operating cash out-flow of GBP488,000 in
the first half of the 2016 financial year (prior to the changes in
working capital, which are detailed below), this was more than
reversed by a GBP978,000 in-flow in the second half of the year;
the full year operating cash in-flow figure totals GBP489,000
(2015: GBP2,348,000).
During the year, trade and other receivables balances reduced by
GBP1,491,000 (2015: GBP202,000). A significant contributing factor
to this was the payment during 2016 of the debtor balances from
National Oil Companies that had been outstanding at the end of the
2015 financial year. Trade and other payables balances fell by
GBP1,164,000 during the year (2015: increased by GBP483,000); the
primary reason for this decrease was the release of deferred income
relating to Globe deliverables throughout the 2016 financial year.
Inventories have increased by GBP775,000 over the year (2015:
GBP112,000) due to the timing of the multiclient Regional Reports
product cycle, with several new reports nearing completion at the
end of the financial year, creating new products to be sold in
2017.
Taking these changes in working capital into account, Getech's
total cash in-flow from pre-tax operations during the 2016
financial year was GBP41,000 (2015: GBP2,921,000).
During the 2016 financial year, Getech made cash tax payments of
GBP326,000 (2015: tax refund of GBP456,000). These payments relate
to: profits in the 2015 financial year (predominantly payable in
the US), payments on account for the current financial year and tax
withheld in Angola. We anticipate tax refunds in the 2017 financial
year from both the US and UK tax authorities as a result of our
Group-wide research and development commitments as well as refunds
for tax overpaid through payments on account - the GBP434,000
current tax asset in the Consolidated Statement of Financial
Position.
Investment and Capital Expenditure
During the 2016 financial year, Getech continued its strategy of
identifying counter-cyclical investment opportunities, and on 14
June 2016, it completed the acquisition of Exprodat Consulting
Limited (Exprodat) in a deal valued at GBP1,760,000. The deal
brought new areas of expertise to the extended Group, allowing us
to offer a wider suite of products and services to exploration
customers and other markets. The acquisition presents new
opportunities for Getech, which are discussed in the Chairman's
Statement and the Operating Review. The financial statements
reflect the revenue and expenses incurred from the Exprodat assets
for the 6 week period from the acquisition until the end of the
financial year. Full year pro-forma numbers are also stated in the
relevant sections of the notes to the financial statements.
Net cash out-flow from all investing activities was GBP1,061,000
(2015: GBP2,481,000). Within this figure, acquisition costs net of
cash received were GBP240,000 (2015: GBP1,130,000), relating to the
acquisitions of ERCL and Exprodat.
Getech has continued to invest in its Globe platform, with
expenditure of GBP824,000 (2015: GBP977,000). The Globe platform is
amortised over a 3 to 7 year period, and the first full year of
amortisation has resulted in an increase in the Group amortisation
costs from GBP186,000 in the 2015 financial year to GBP479,000 in
the 2016 financial year. The Globe platform continues to be a key
asset to Getech, forming the basis for many of the Company's
cutting-edge products.
Financing
In the 2015 financial year, Getech used a GBP1,100,000 loan to
partially fund the ERCL acquisition. During the 2016 financial
year, capital repayments of the loan amounted to GBP132,000 (2015:
GBP68,000).
Cash dividend payments totalled GBP572,000 (2015:
GBP683,000).
Liquidity and Going Concern
At the end of the 2016 financial year, Getech held GBP2,788,000
in cash and cash equivalents, and a gross debt of GBP900,000 (2015:
GBP4,727,000 in cash and cash equivalents, and a gross debt of
GBP1,032,000).
The Group's business activities and the factors likely to affect
its future development, performance and position are set out in the
Chairman's Statement and the Operating Review. The financial
position of the Group, its cash flows and its liquidity position
are described in the financial statements.
In making the going concern assessment, the Board of Directors
has considered Group budgets and cash flow forecasts. As a result
of this review, the Directors consider that the Company and the
Group are going concerns and the financial statements are prepared
on that basis.
Andrew Darbyshire
Finance Manager
(1) Cost base is measured as cost of sales, administrative costs
and development costs capitalised, less depreciation and
amortisation, and adjusted for movement in work in progress,
foreign exchange (as this predominantly relates to income for the
Group) and fair value adjustments. The 6 weeks of Exprodat's costs
were also excluded for comparative purposes.
Consolidated statement of comprehensive income
For the year ended 31 July 2016
2016 2015
GBP'000 GBP'000
----------------------------------- -------- --------
Revenue 7,031 8,639
Cost of sales (3,503) (3,002)
----------------------------------- -------- --------
Gross profit 3,528 5,637
Administrative costs (2,835) (3,650)
----------------------------------- -------- --------
Operating profit 693 1,987
Finance income 8 14
Finance costs (30) (8)
----------------------------------- -------- --------
Profit before tax 671 1,992
Income tax (expense)/credit 418 (179)
----------------------------------- -------- --------
Profit for the year attributable
to owners of the Parent 1,089 1,813
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Currency translation differences
on translation of foreign
operations 110 20
----------------------------------- -------- --------
Total comprehensive income
for the year attributable
to owners of the Parent 1,199 1,833
----------------------------------- -------- --------
Earnings per share
Basic earnings per
share 3.25p 5.77p
----------------------------------- -------- --------
Diluted earnings per
share 3.17p 5.61p
----------------------------------- -------- --------
All activities relate to continuing operations.
Consolidated statement of financial position
As at 31 July 2016
Company registration number 02891368
2016 2015
GBP'000 GBP'000
------------------------------- -------- --------
Assets
Non-current assets
Property, plant and
equipment 2,691 2,853
Goodwill 3,428 3,132
Intangible assets 2,948 2,046
Deferred tax assets 283 160
----------------------------- -------- --------
9,350 8,190
------------------------------- -------- --------
Current assets
Inventories 1,067 292
Trade and other receivables 3,372 4,235
Current tax assets 434 118
Cash and cash equivalents 2,788 4,727
----------------------------- -------- --------
7,661 9,371
----------------------------------------- --------
Total assets 17,011 17,561
------------------------------- -------- --------
Liabilities
Current liabilities
Borrowings 133 266
Trade and other payables 3,549 4,628
Current tax liabilities 13 395
----------------------------- -------- --------
3,695 5,289
----------------------------------------- --------
Non-current liabilities
Borrowings 767 766
Trade and other payables - 980
Deferred tax liabilities 387 319
----------------------------- -------- --------
1,154 2,065
----------------------------------------- --------
Total liabilities 4,849 7,354
------------------------------- -------- --------
Net assets 12,162 10,207
------------------------------- -------- --------
Equity
Equity attributable to owners of the Parent
Share capital 94 82
Share premium account 3,053 3,037
Merger relief reserve 2,407 1,159
Share option reserve 173 155
Currency translation reserve (1) (111)
Retained earnings 6,435 5,885
------------------------------- -------- --------
Total equity 12,162 10,207
------------------------------- -------- --------
The financial statements were approved by the Board of Directors
on 7 November 2016.
Dr Stuart Paton
Director
Consolidated statement of cash flows
For the year ended 31 July 2016
2016 2015
GBP'000 GBP'000
------------------------------------- -------- ---------
Cash flows from operating activities
Profit before tax 671 1,992
Share-based payment charge 52 59
Depreciation and amortisation
charges 671 367
Disposal of fixed assets (4) -
Impairment of intangible assets - 298
Fair value adjustments (845) (304)
Finance income (8) (13)
Finance costs 30 8
Exchange adjustments (77) (59)
Increase in inventories (775) (112)
Decrease/(increase) in trade
and other receivables 1,491 202
Increase/(decrease) in trade
and other payables (1,164) 483
------------------------------------- -------- ---------
Cash generated/(used in) from
operations 41 2,921
Income taxes paid (326) 456
------------------------------------- -------- ---------
Net cash generated/(used in)
from operating activities (285) 3,377
------------------------------------- -------- ---------
Cash flows from investing activities
Purchase of property,
plant and equipment (32) (259)
Proceeds from sale of fixed 27 -
assets
Purchase of intangible assets - (128)
Development costs capitalised (824) (977)
Acquisition costs, net of
cash received (240) (1,130)
Interest received 8 13
------------------------------------- -------- ---------
Net cash (used in)/generated
from investing activities (1,061) (2,481)
------------------------------------- -------- ---------
Cash flows from financing activities
Proceeds from issue of share
capital 16 24
New term loan - 1,100
Repayment of long-term borrowings (132) (68)
Equity dividends paid (572) (683)
Interest paid (30) (8)
------------------------------------- -------- ---------
Net cash generated from/(used
in) financing activities (718) 365
------------------------------------- -------- ---------
Net increase/(decrease) in
cash and cash equivalents (2,064) 1,261
Cash and cash equivalents
at beginning of year 4,727 3,423
Exchange adjustments to cash
and cash equivalents at beginning
of year 125 43
------------------------------------- -------- ---------
Cash and cash equivalents
at end of year 2,788 4,727
------------------------------------- -------- ---------
Consolidated statement of changes in equity
For the year ended 31 July 2016
Share Merger Share Currency
Share premium relief option translation Retained
capital account reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- ------------ --------- --------
At 1 August
2014 76 3,013 - 126 (131) 4,726 7,810
--------------------- --- -------- -------- -------- ------------ --------- --------
Dividends - - - - - (684) (684)
Issue of
capital
under share--based
payment
options 1 24 - (30) - 30 25
Share-based
payment
charge - - - 59 - - 59
Issue of
share capital 5 - 1,159 - - - 1,159
--------------------- --- -------- -------- -------- ------------ --------- --------
Transactions
with owners 6 24 1,159 29 - (654) 564
--------------------- --- -------- -------- -------- ------------ --------- --------
Profit for
the year - - - - - 1,813 1,813
Currency
translation
differences - - - - 20 - 20
--------------------- --- -------- -------- -------- ------------ --------- --------
Total comprehensive
income for
the year - - - - 20 1,813 1,813
--------------------- --- -------- -------- -------- ------------ --------- --------
At 31 July
2015 82 3,037 1,159 155 (111) 5,885 10,207
--------------------- --- -------- -------- -------- ------------ --------- --------
Dividends - - - - - (572) (572)
Issue of
capital
under share--based
payment
options - 16 - (34) - 34 16
Share-based
payment
charge - - - 52 - - 52
Issue of
share capital 12 - 1,248 - - - 1,260
--------------------- --- -------- -------- -------- ------------ --------- --------
Transactions
with owners 12 16 1,248 18 - (538) 756
--------------------- --- -------- -------- -------- ------------ --------- --------
Profit for
the year - - - - - 1,089 1,089
Currency
translation
differences - - - - 110 - 110
--------------------- --- -------- -------- -------- ------------ --------- --------
Total comprehensive
income for
the year - - - - 110 1,089 1,199
--------------------- --- -------- -------- -------- ------------ --------- --------
At 31 July
2016 94 3,053 2,407 173 (1) 6,435 12,162
--------------------- --- -------- -------- -------- ------------ --------- --------
Notes to the consolidated financial statements
For the year ended 31 July 2016
Nature of operations
The principal activity of Getech Group plc and its subsidiary
companies Geophysical Exploration Technology Inc., ERCL Limited and
Exprodat Consulting Limited (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.
General information
Getech Group plc is the Group's ultimate Parent Company ("the
Parent Company"). It is incorporated in England and Wales and
domiciled in England (CRN: 2891368). The address of its registered
office and principal place of business 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 the
International Financial Reporting Interpretations Committee
(IFRIC).
The financial statements have been prepared under the historical
cost convention.
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 continued prospects for profitable trading, the Directors are
fully satisfied that the Group is a going concern and will be able
to continue trading for the foreseeable future.
Financial information
The financial information set out above, which was approved by
the Board on 7 November 2016, is derived from the full Group
accounts for the year ended 31 July 2016 and does not constitute
the statutory accounts within the meaning of section 434 of the
Companies Act 2006. The Group accounts on which the auditors have
given an unqualified report, which does not contain a statement
under section 498(2) or (3) of the Companies Act 2006 in respect of
the accounts for 2016, will be delivered to the Registrar of
Companies in due course.
The statutory accounts for the year ended 31 July 2015, which
have been delivered to the Registrar of Companies, contained an
unqualified audit report and did not include a statement under
s498(2) or s498(3) of the Companies Act 2006.
The annual report will be posted to shareholders and available
on the web site on 12 November 2016.
Dividends
2016 2015
GBP'000 GBP'000
--------------------------------------- --------
Paid during the year
Final dividend in respect of
the year ended 31 July 2015 at
1.74p per share (2014: 1.76p) 572 534
No interim dividend (2015: 0.46p
per share) - 150
--------------------------------- ---- --------
572 684
--------------------------------------- --------
Proposed after the year end (not recognised
as a liability)
No final dividend in respect
of the year ended 31 July 2016
(2015: 1.74p per share) - 572
--------------------------------- ---- --------
There is no final dividend proposed.
Earnings per share
A 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.
2016 2015
---------------------------------------------------- -------------
Profit attributable to equity GBP1,089,000 GBP1,813,000
holders of the Group
Weighted average number of Ordinary
Shares in issue 33,490,000 31,417,000
Basic earnings per share 3.25p 5.77p
Diluted earnings per share 3.17p 5.61p
------------------------------------- ------------- -------------
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 2016 is 884,259 (2015: 918,010).
Notice of Annual General Meeting
The Annual Report and Accounts, and notice convening the Annual
General Meeting of the Company will be posted to shareholders on 12
November 2016 and will be available from the Company's website
www.getech.com, from that date. The Annual General Meeting of
Getech Group plc ("the Company") will be held at Kitson House,
Elmete Hall, Elmete Lane, Leeds LS8 2LJ on 13 December 2016 at 12
noon.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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November 08, 2016 02:00 ET (07:00 GMT)
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