TIDMGTC
RNS Number : 0246M
GETECH Group plc
19 May 2022
Getech Group plc
("Getech" or "the Company" and with its subsidiaries "the
Group")
Final Results for the 12 months ended 31 December 2021
The Getech Group (AIM; GTC) announces its Final Results for the
12 months ended 31 December 2021.
Highlights
A transformational year, investing for future growth.
Key financial highlights
-- FY2021 revenue rose c. 20% to GBP4.3m (2020: GBP3.6m);
-- Orderbook grew by 25% to GBP3.3m at 31 December 2021 (31 December 2020: GBP2.7m);
-- Annualised recurring revenue * stable at GBP2.1m at 31
December 2021 (31 December 2020: GBP2.1m);
-- Cost base increased to GBP6.5m, through equity funded low carbon investment (2020: GBP5.2m);
-- Loss for the year of GBP1.6m, adjusted for exceptional items ** (2020: GBP1.5m loss);
-- Reported loss for the year of GBP1.9m (2020: GBP1.6m loss); and
-- Strong net cash *** position of GBP5.1m at 31 December 2021 (31 December 2020: GBP1.4m).
Key corporate and operational highlights
-- Repositioned strategy with new 'locate-develop-operate'
business model designed to accelerate a secure and sustainable path
to decarbonisation;
-- Expanded the application of geoscience data and software
products into essential tools enabling the energy transition and
enhancing the security of energy supply;
-- Acquired a green hydrogen developer, and secured the first two development projects;
-- Developed key strategic partnerships with Shoreham Port, SGN
Commercial Services (SGN) , Eversholt Rail and the Highland
Council; and
-- Continued to invest in new talent and skills.
Strong outlook
-- Focused on accelerating the global energy transition and
ensuring a secure supply of energy; all whilst delivering
transformative shareholder value through:
o expanding our robust pipeline of products and services for the
energy transition;
o ambition to establish at least 500MW of new geoenergy and
green hydrogen assets by 2030 by:
-- replicating and scaling up our green hydrogen asset
development model, both in UK and internationally;
-- building strategic partnerships to secure and develop
geothermal energy projects; and
-- pursuing energy co-location opportunities in the critical
minerals sector.
Getech CEO, Dr Jonathan Copus commented:
"2021 was a transformational year for Getech, during which we
invested to diversify the application of our world-leading
petroleum products into new geoenergy and green hydrogen growth
sectors. We also established a new 'locate-develop-operate'
business model.
We delivered this against a turbulent macroeconomic backdrop
that continues to highlight the urgent need for the world to
significantly increase energy investment. To ensure energy security
and the transition to a low carbon future, governments have
materially increased their clean energy targets and are
fast-tracking policies to accelerate the pace of energy system
investment.
In this environment, demand for Getech's products increased -
revenue grew 20% and our orderbook expanded by 25%. We also
acquired a hydrogen development company, H2 Green, and signed a
range of valuable strategic partnerships, securing exclusivity over
our first two hydrogen development projects.
Building on this momentum, our ambition is to establish a
portfolio of at least 500MW of new geoenergy and green hydrogen
assets by 2030. These could save c.2 million tonnes of CO2
production annually, and would deliver transformational value to
our shareholders.
Getech moved into 2022 with confidence and we look forward to
building our position in a primary energy market that is undergoing
unprecedented change and growth."
Letter from Chair and CEO
Getech - a geoenergy and green hydrogen company
FY2021 was a year of strategic advancement and robust delivery
for Getech. With a diversification plan focused on green hydrogen,
geothermal, critical minerals and energy/carbon storage, our
shareholders supported us in a GBP6.25 million capital raise to
position Getech at the vanguard of the energy transition.
Through this investment, we are repurposing our world-leading
geoscience data and unique geospatial software products, and
successfully extending their application to geoenergy sectors
beyond petroleum, and green hydrogen. During the year, we have
added new content, modules and workflows to our platforms,
solutions and software and have grown our customer base in the
energy transition sectors. Our mission is now firmly set on
delivering an accelerated , secure and sustainable path to
decarbonisation through the application of our products,
technologies, and skills.
As we strengthen our status as a trusted partner in the energy
transition, this in turn enables us to establish new
revenue-generative relationships that we can expand into strategic
partnerships and build our own portfolio of scalable repeatable low
carbon projects. Our locate-develop-operate business model has been
designed to maximise the value of our unique offering and to
deliver transformational growth in shareholder value.
In FY2021, we purchased H2 Green, a company developing green
hydrogen networks of production, storage, and distribution
facilities. Since this acquisition, we have secured exclusive
development rights on two green hydrogen hubs - at Shoreham Port
and in Inverness.
We have also invested in new talent: adding senior executives
with significant engineering, economics, project delivery and
business development experience; and Board skills in business scale
up, ESG and low carbon asset management. We have also enhanced our
marketing and communication resources.
Through the recruitment of Max Brouwers - who joined Getech as
Chief Business Development Officer, having previously led the
Energy Transition at Shell Global Exploration - we have established
a physical presence in Europe, which we are growing further in
2022.
Our progress during the year and into 2022 is notable, as
evidenced by growth in revenue, an expanding orderbook, and new
asset agreements. We anticipate further upward momentum as the pace
to net zero accelerates.
Business environment
The need to substantially increase energy investment on a global
scale has never been clearer or more urgent. Governments across the
world are responding with new strategy statements, to deliver
affordable, secure, and sustainable low carbon energy. War in
Ukraine has heightened this, and in 2022 energy investment could
total as much as 13% of global GDP - the highest level on
record.
This action is underlain by governments' broader commitments to
address climate change. The EU has pledged to be climate-neutral by
2050, with each member state required to develop a national
long-term strategy on how they plan to achieve this.
Similar trends can be mapped around the world, with
decision-makers defining the budgets, incentives and regulatory
structures that are needed to enable the required investments to
proceed within the aspired timetables to deliver on their energy
security and decarbonisation goals. The energy transition presents
governments, regional authorities, cities, and companies with a
complex web of decision making, which Getech can help unlock using
its data, knowledge and analytics.
There is a growing momentum behind the view that low-carbon
hydrogen will play a significant role in the decarbonisation of the
energy system, and as a result, global projections for growth in
hydrogen capacity have been revised upwards in each of the last
three years.
This momentum is backed by governments' policies, incentives and
funding support. REPowerEU has quadrupled the EU's green hydrogen
supply target to 75GW by 2030 - half of which will be supplied by
imported hydrogen. The EU Commission has also pledged to fast-track
market reforms to promote development of hydrogen projects and
infrastructure such as storage.
In the UK, the government has announced various funding
programmes and incentives for low-carbon hydrogen, including the
GBP240 million Net Zero Hydrogen Fund, a GBP26 million Industrial
Hydrogen Accelerator innovation programme, and the launch of the
world's first national subsidy for clean hydrogen production. This
is aimed at advancing the UK government's ambition to have up to
2GW of low-carbon hydrogen production capacity by 2025 and up to
10GW installed by 2030 - at least half of which is to be from green
hydrogen.
By using our geospatial and economic analytics to identify
optimal sites, Getech is ideally positioned to accelerate the
adoption of green hydrogen, both in UK and internationally.
Our ambition is to establish at least 500MW of new geoenergy and
green hydrogen assets by 2030.
Moving from pledge to action on our sustainability
objectives
In 2021, Getech joined the United Nations' Race to Zero
campaign, pledging to become carbon neutral by 2030. To support the
delivery of this, we established an ESG committee and appointed an
ESG expert to our non-executive directors' team.
As we build an ESG-centric business, we are establishing metrics
and KPIs that set a clear and auditable roadmap to assess Getech's
2030 net zero delivery. We look forward to implementing this
enhanced sustainability framework during FY2022 and reporting on
progress in the next annual report.
Outlook
Getech is an established, cash-generative, and diversified
growth-focused business that is well-funded to deliver on our
strategy. In 2022, we plan to continue growing our share of the
global energy transition market.
In our foundation products and services business, this means
expanding the low carbon application of our geoscience data and
geospatial software products, through new content, new geoenergy
capabilities and delivering innovations around other key energy
transition themes such as CCS.
In asset development, we are progressing our projects in
Shoreham Port and across the Scottish Highlands. Together these
projects represent c. 50 MW of full capacity - equivalent to 10% of
our 500 MW ambition .
The tangible progress we are making in the decarbonisation of
commercial transport places us firmly on the hydrogen map. This is
widening our engagement to include larger volume off-takers - such
as industrial players seeking clean hydrogen to decarbonise their
operations and organisations outside of the UK looking to import
green hydrogen. In the coming months, we will progress these
discussions as we work to expand our hydrogen portfolio.
We are also evaluating asset participation opportunities in
geothermal energy and energy co-location projects in the critical
minerals sector. As further projects are secured, we will continue
to report on our progress towards the 500MW ambition.
On behalf of the board, we would like to thank our shareholders
for their support and our employees for their continued commitment
during this exciting and transformative period for the Group.
Being at the heart of the high growth geoenergy and green
hydrogen sectors, we have moved into 2022 with confidence and
believe we are ideally positioned to deliver substantial growth and
value to our shareholders in the coming years.
Richard Bennett Jonathan Copus
Chairman CEO
* Annualised Recurring Revenue is the annualised value of
Getech's recurring contracts, typically this is Globe contracts,
Software and Product subscriptions, and recurring support
services.
** Adjusted for exceptional items.
*** Net cash is the balance of cash and cash equivalents after
deducting borrowings.
Getech Group plc Tel: 0113 322 2200
Jonathan Copus, Chief Executive
Cenkos Securities plc
Neil McDonald / Pete Lynch (Corporate Finance)
Michael Johnson / Dale Bellis (Sales) Tel: 0207 397 8900
Camarco Tel: 020 3781 8331
James Crothers / Toby Strong / Charles Dingwall
Operations review - Locate. Develop. Operate.
During 2021, our operational activities have been focused on
accelerating the energy transition by locating, developing and
operating geoenergy and green hydrogen projects.
To achieve this, we began a programme of investment to reshape
our unique petroleum products into essential tools for the energy
transition, expanding their application to high-growth geoenergy
sectors beyond petroleum - targeting geothermal, critical minerals,
hydrogen and carbon storage. We have broadened our operations
through a 'locate, develop, operate' business model, which has
enabled us to strengthen our market share in the energy transition
- as demonstrated by growth in revenue, expansion of the orderbook
and securing of new asset agreements.
In 2021, sales of geophysical data and services to both deep and
shallow geothermal operators, as well as new contract wins with
leading mining companies, demonstrated the versatility and
applicability of our products and solutions to locating and
de-risking a diverse range of geoenergy resources across a global
spread of geographies.
In turn, this helped with building strategic relationships,
through which we can evaluate unique participation opportunities in
decarbonisation projects. In the year, this led to our first low
carbon development investment - the acquisition of H2 Green, a
green hydrogen network developer.
With a number of new senior executive appointments completed in
the UK, Europe and the US, we have strengthened Getech's
geographical presence and extended our talent in engineering,
economics, project delivery and business development to ensure
success.
LOCATE
We apply our world-leading geoscience data and unique geospatial
software to help locate, de-risk and optimise geoenergy and green
hydrogen projects to deliver an accelerated energy transition.
Our product model is built on Getech's world-leading global
geoscience data - the value of which we have enhanced through the
development of intuitive geospatial delivery platforms and analytic
software. The products are shaped around our customers' most
pressing commercial needs, and new content and functionality is
delivered through robust project management.
We deliver and manage energy and natural resources projects
through the following proprietary platforms, software products and
solutions:
Our platforms - Globe and Maptium:
Globe is Getech's flagship earth modelling platform. It provides
customers with a powerful analytic application through which they
can access valuable global geoscience data and knowledge.
Demand and sales for Globe are growing amongst customers in the
critical minerals, geothermal and Carbon Capture and Storage (CCS)
sectors. These customers use Globe to help them understand the
physical conditions and processes that control subsurface energy
extraction, energy and carbon storage, and critical minerals
recovery. This resulted in significant new contract wins during
2021.
Globe's 2021 release was delivered on time and to cost, and
further work on expanding the product's content and functionality
is currently underway. Globe's 2022 release is scheduled for July
2022, and this will mark another a key stepping-stone in ensuring
the platform remains in step with the changing landscape of the
energy transition.
Maptium is a new Getech platform that leverages cutting-edge
geospatial technology to provide cost-effective modular access to
essential targeted data, workflows and analytics that previously
were only available through our global petroleum solutions.
Via a secure web-based gateway, users of Maptium can better
visualise and analyse energy and mineral resource information,
which maximises their understanding and the value of their projects
and operations.
The platform's first modules were released in 2021. These
modules target data access and critical minerals workflows - with
specific applications to sedimentary copper exploration, a metal
that is key to almost every aspect of the energy transition.
Maptium's content is now being expanded to enhance exploration for
new critical minerals, and applications to the geothermal sector
and carbon capture and storage.
Our software:
Getech's geospatial software empowers customers to streamline
common workflows across a variety of geoenergy projects - improving
customers decision making while increasing project efficiency and
understanding of technical risk. The three software products
are:
Exploration Analyst is a favourability mapping tool that helps
companies quantitatively rank information essential to day-to-day
business decisions. Applications include resource prospectivity
assessment, license evaluation, and company/peer benchmarking. In
2021, we incorporated Exploration Analyst's analytics into our
critical minerals, geothermal and carbon storage activities. This
demonstrates the product's versatility across the energy
transition, which has widened Energy Analyst's target markets and
user base.
Unconventionals Analyst is a production operations optimisation
tool used in unconventional resource projects, including shale gas
and shale oil. Customers use the product to reduce capital spending
by delivering more efficient well inventory planning and reserve
evaluation.
Data Assistant enables easy data transfer between Esri's
market-leading geographic information system technology and
commonly used subsurface interpretation systems used in geoenergy
operations, including CCS, petroleum and geothermal. It helps users
eliminate human error from data integration workflows, and enhances
operational data integration and analysis.
Solution delivery - leveraging our capabilities into the energy
transition:
In 2021, we released Heat Seeker(TM) , which unifies our data,
platforms, software and analytics to provide a proprietary
geothermal project location solution. Heat Seeker's' value lies in
our ability to identify potential geothermal resource sites that
are within commercial reach of readily available customer markets
for heat or power.
Heat Seeker achieves this by integrating advanced geospatial
analysis and machine learning with geophysical, geological,
commercial and social data, to create favourability maps of
geothermal suitability.
By helping users rapidly identify and evaluate development
locations, this saves them operational time/costs, increases
profit-margins and reduces pay-back times for geothermal
projects.
DEVELOP AND OPERATE
Our products and services enable us to establish
revenue-generative relationships with both natural resource asset
owners and energy consumers, which we can then expand into
strategic alliances to build our own portfolio of low carbon
assets.
Green Hydrogen
During 2021, we completed our first direct asset investment -
purchasing H2 Green, a company working to develop green hydrogen
networks of production, storage, and distribution facilities to
decarbonise commercial transport.
Since the acquisition, we have strengthened and advanced H2
Green's activities by leveraging Getech's core geospatial
analytical capabilities, and building streams of excellence in
facility design, project management, economic modelling, and
business development. Drawing on our collective experience in
developing energy assets, we have deployed a rigorous project
maturation process to identify the optimum investment opportunities
with maximum capital efficiency and impact.
These steps resulted in us signing milestone strategic alliances
with several industry and government partners - including SGN,
Eversholt Rail, Shoreham Port and the Highland Council - and
securing exclusivity across a wide portfolio of hub locations. We
now hold a compelling position in the emergent green hydrogen
project pipeline.
Regional green hydrogen network in the Highlands
Under the agreement with the Highland Council, we are working to
establish a world-class regional green hydrogen network in the
Scottish Highlands. At the core of this network is a hydrogen hub
with SGN in Inverness, the capital of the Scottish Highlands.
The Inverness site will supply green hydrogen to large-volume
commercial transport customers, such as trains, buses, trucks and
heavy goods vehicles. In line with these goals, we secured
agreements with Eversholt Rail to facilitate the wide-scale
deployment of their hydrogen-powered trains on the Far North and
West Highland Lines of Scotland.
Our activities, combined with the Highland Council
decarbonisation initiatives, are set to establish the Scottish
Highlands as a leading UK centre for decarbonisation and innovation
- supporting job creation, energy security and providing a
sustainable path for the region's net zero transition.
Groundworks began at the Inverness site in April 2022, with our
strategic partner SGN undertaking demolition of the former gas
holder, expected to be completed during 2H 2022.
Concurrently, we have continued to progress with finalising the
Joint Venture Agreement with the Highland Council, ahead of the
commencement of Front-End Engineering Design (FEED) for the
Inverness hub later in 2022. During 2023-2024, we expect to apply
for planning and regulatory approvals, make Final Investment
Decision (FID), procure the equipment, and commence construction
and installation of the production facilities. The first hydrogen
production at the Inverness hub is currently anticipated in H1
2025.
Shoreham Port - Green Energy Hub
At the other end of the country, we have entered the port and
maritime energy sector - securing exclusive development rights for
hydrogen, renewable energy, and ammonia importation at Shoreham
Port in West Sussex to create a Green Energy Hub.
We have been working with our strategic partner Shoreham Port on
the phase 1 development plan for onsite hydrogen production, solar
roof development and installation of 6 onshore wind turbines, and
we expect to complete this by the end of June 2022. The phase 1
development is projected to supply green hydrogen to a significant
proportion of over 800 heavy goods vehicles and over 50 forklift
trucks that operate within the port daily.
In parallel, we have been working towards a final commercial
structure with Shoreham Port with the intention of completing it in
H2 2022, followed by the commencement of Front-End Engineering
Design (FEED) and application for planning and regulatory approvals
later in the year. During 2023-2024, we expect to make Final
Investment Decision (FID), procure the equipment, and commence
construction and installation of the hydrogen production facilities
and rooftop solar. The first hydrogen production, together with
installation of onshore wind is currently anticipated in 1H
2025.
We continue to identify further opportunities in the green
hydrogen space including early production systems. Each opportunity
is assessed for economic potential, so the optimum assets can be
selected to progress to development. The resulting asset funnel
passes through a rigorous project maturation process to quantify
the highest value green hydrogen asset opportunities for our
investment.
Geothermal
Combining subsurface understanding with an in-depth overview of
above-ground commercial and operational factors allows us to
identify the most prospective geothermal opportunities.
Since the launch of Heat Seeker, we have been successful in
engaging with governments and private companies and have built a
portfolio of business opportunities around the world, comprised of
services and equity entry. We are currently involved in geothermal
projects for clients across numerous continents, ranging from
shallow ground source heat pumps to closed-loop systems in hot-dry
rocks.
Operational focus for FY2022
In 2022, we look forward to advancing our work and alliances
across each of our focus sectors by:
-- Expanding product offering for the energy transition:
o releasing new modules on Maptium;
o adding new geoenergy capabilities to Globe;
o increasing adoption of Heat Seeker; and
o delivering innovations around other key energy transition
themes such as CCS.
-- Replicating, scaling up and diversifying our green hydrogen
portfolio, both in the UK and internationally;
-- Building strategic partnerships to secure and develop geothermal energy projects; and
-- Pursuing energy co-location opportunities within the critical minerals sector.
Chris Jepps
Chief Operating Officer
Sustainability
In recognition of the commercial and societal importance of
sustainability and ESG, Getech's focus is to both help our
customers deliver their ESG commitments and to define and live by
our own ESG principles.
These principles are key to promoting value and resilience for
Getech. Our goal is to grow responsibly - delivering a company that
cares about our people, communities, customers, and the
environment.
Getech's support to create a cleaner, greener and sustainable
future
The world requires a secure and sustainable path to
decarbonisation to create a cleaner and greener future. In 2021,
Getech joined the United Nations' Race to Zero campaign - pledging
to become carbon neutral by 2030. In line with this commitment, we
have a number of initiatives to reduce scope 1 and 2 emissions:
-- Reducing transportation footprint. We offer electric car and
cycle to work schemes for employees, which provide a tax efficient
path for staff to reduce their carbon footprint. We also encourage
use of videoconferencing in place of travel, where practical.
-- Reducing energy consumption. Low energy LED lighting is used
in our workspace, and waste is recycled.
-- Reducing emissions and carbon footprint . We switched to
renewable electricity and green gas suppliers.
-- Developing our own portfolio of net zero assets. During the
year, we made targeted direct investments in carbon neutral energy
projects to accelerate decarbonision of our own operations.
We also support customers in reducing their emissions by
applying our data, technologies and skills to:
-- Optimise existing, and deliver new energy assets in the transitioning primary energy sector;
-- Expand the range of low carbon energy sources: to produce
heat and power through geothermal energy; to decarbonise transport
and heat through the development of green hydrogen hubs;
-- Future proof energy systems through subsurface energy and
carbon storage; and locate new deposits of metals critical to the
energy transition; and
-- Innovate technologies and reshape our unique foundation products for the energy transition.
Moving from pledge to action - FY 2022 objectives
During 2021, Getech established an ESG committee. The committee
is chaired by Emma Parker, who was appointed to the Board as
non-executive independent director during the year. Emma brings
more than 18 years' experience as an ESG and mining operations
specialist, with a focus on leading innovative approaches to
sustainability-led value creation, responsible sourcing, and
ethical value chains.
The purpose of the ESG committee is to assist the Board of
Directors in ensuring the business delivers on the commitments and
responsibilities related to material ESG matters relevant to the
activities of the Group. This may include climate change impacts,
emissions, environmental and supply chain sustainability, human
rights and diversity and inclusion objectives.
During FY2022, we plan to reshape our business to be ESG-centric
through the following actions:
-- Establishing a unified view of ESG;
-- Development and continuous appraisal of ESG strategy;
-- Establishing ESG metrics and KPIs;
-- Overseeing ESG; and
-- Defining a clear and auditable roadmap to deliver on Getech's 2030 net zero commitment.
Getech aims to provide a caring, thriving and diverse work
environment for its staff
Health, safety and wellbeing
Getech provides support for health, safety and wellbeing to its
people and a thriving work environment through:
-- Employee Assistance Programmes to help staff deal with
personal and professional problems that could be affecting their
life;
-- Comprehensive private medical insurance and an extensive medical cash plan;
-- 24 / 7 bereavement support; and
-- Discounts on gym memberships.
We also support a range of extracurricular activities including
a workplace cricket league and a sports and social club, which
provide team building opportunities for all staff.
Equality, inclusion and diversity
Equality, inclusion and diversity is vital to Getech to create a
safe and inclusive workplace. The Group's Equality, Inclusion and
Diversity Policy sets out the expectations of all employees and
Board to create this environment . We actively support diversity
and inclusion and ensure that all employees are valued with dignity
and respect.
The employment practices and procedures as part of quality
management system demonstrate fairness and transparency in all
areas of the employment lifecycle, including recruitment. Internal
equal pay audits are conducted where possible across teams and
skill sets.
We encourage openness and engagement and provide staff with a
fair voice through various face to face and digital channels such
as the intranet, regular meetings, workshops and performance
appraisals. Keeping staff motivated and properly remunerated is key
to the success of Getech's business.
Investing in people's professional development and training
The Company encourages and supports the career development of
our staff. We do this through training, to enhance the delivery of
day-to-day employment, as well as to prepare for new roles and
activities. Performance appraisals are conducted annually and a
Personal Development Plan is generated for each member of staff,
which includes objectives for additional training, and career
development.
Trusted corporate partner
Getech has a Charity Committee and participates in various
fundraising events throughout the year - in support of the wider
community. During 2021, financial support was provided to
Freedom4Girls, a charity fighting against period poverty. The
fundraiser helped to provide safe period products and menstrual
health education to thousands of women and girls across Leeds,
Kenya and Uganda - enabling them to attend school and work without
the stigma and gender inequalities associated with period poverty.
Getech also provided support to Save the Children and Red Nose
Day.
In light of the current conflict in Ukraine, which has had
devastating life-changing consequences for civilians, we provided
financial assistance to the Disasters Emergency Committee's Ukraine
humanitarian appeal. The aim of the appeal is to provide food,
water, shelter, healthcare and protection to families affected by
the conflict.
Since 2016, our staff have also volunteered for MapAction -
providing assistance with mapping, data and training. The charity
is currently involved with supporting humanitarian efforts in
relation to the Ukraine conflict, providing life-saving geospatial
data, visualisation, and mapping. We are seeking ways to increase
our role in supporting MapAction charity, including donation s and
training.
Financial review
Getech is focused on growing and diversifying its product and
service offering to both foundation petroleum customers, and new
customer markets in the low carbon economy - where we target the
geothermal energy, green hydrogen, storage, and critical minerals
sectors.
Supporting the delivery of this diversification and growth
programme, Getech raised GBP6.25 million of equity finance in April
2021, which is being used to build new products and content. Getech
has also invested in sales, marketing and business development
capabilities. Following success from these steps, and progress from
our programme of investment, the Board is pleased to report
positive revenue growth by 20% to GBP 4.3 million, together with
25% growth in the orderbook to GBP3.3 million. 46 new customers
were added during the year, taking the total to 94 - this includes
customers across geothermal, critical minerals, carbon capture and
storage and energy sectors.
The Group's robust revenue generation and our strong balance
sheet, with net cash of GBP5.1 million, provide a solid platform to
deliver on our set plans and future growth and expansion.
Table 1 - Financial summary 2021 2020
======================================
Reported Adjusted (1) (unaudited) Reported Adjusted (1) (unaudited)
(audited) GBP'000 (audited) GBP'000
GBP'000 GBP'000
====================================== =========== ========================= =========== =========================
Revenue 4,280 4,280 3,563 3,563
Cost base (see table 2) 6,455 6,455 5,154 5,154
Gross margin 46% 46% 53% 53%
Loss after tax (1,949) (1,649) (1,644) (1,529)
Earnings per share (3.27)p (2.77)p (4.38)p (4.07)p
Net cash outflow from operating
activities (799) (799) (185) (185)
Development costs (847) (847) (902) (902)
Net (decrease)/increase in cash 3,655 3,655 (1,311) (1,311)
Cash and cash equivalents 5,864 2,192
Net cash 5,095 1,357
Orderbook 3,333 2,665
Annualised recurring revenue 2,094 2,082
====================================== =========== ========================= =========== =========================
(1) Exceptional items
During the year, Getech incurred a one-off amortisation charge
related to the acquisition of H2 Green Limited. In 2020, Getech
incurred costs in relation to restructuring the business.
These exceptional items totalled GBP300,000 (2020:
GBP115,000).
Operating results
Revenue
2021 revenue totalled GBP4.3m, an increase of 20% from GBP3.6m
in 2020. This growth was largely driven by increased product sales,
which in 2021 accounted for 82% of the revenue mix.
Toward the end of 2021, we also saw a significant increase in
services sales activity and multi-year product licence renewals.
Whilst this had little impact on 2021 revenue, it drove a 25%
expansion in our sales orderbook - from GBP2.7m at the end of 2020
to GBP3.3m by 31 December 2021. We expect a significant proportion
of this orderbook to unwind to revenue during 2022.
In the period, we continued to work closely with our customers
through a broad programme of engagement, and this was rewarded by a
high renewal rate on our subscription revenues. Annualised
recurring revenue totalled GBP2.1m at 31 December 2021 (31 December
2020: GBP2.1m).
Gross margin
In 2021, Getech embarked upon multiple diversification projects
and rapidly expanded our hydrogen technical team through the
acquisition of H2 Green. As a result, cost of sales increased by
37% from GBP1.7m in 2020 to GBP2.3m in 2021. This reduced Group
gross profit margins from 53% in 2020, to 46% in 2021.
Administrative costs
Administrative expenses include GBP1.5m (2020: GBP1.2m) of
depreciation and amortisation charges. Excluding these charges and
exceptional items, administrative expenses totalled GBP3.5m, (2020:
GBP2.4m). The additional expenditure reflects progress across a
broad front of equity-funded growth investment. We have absorbed
additional expenditure relating to the acquisition of H2 Green -
the costs of which in 2021 we fully expensed, as well as expanding
our Business Development team, and strengthening our marketing
capabilities. In H2 2021, staff returned to full pay, having
previously agreed to salary reductions in May 2020 as part of our
Covid cost saving measures implemented at that time.
Through this period of investment, Getech has also kept focus on
prudent capital management; in February 2021 Getech sub-let the
London office and has made rates savings on the Leeds office
throughout the year.
Cost base analysis
Getech's cost base has increased to GBP6.5m from GBP5.2m, this
includes research and development costs totalling GBP1.6m (2020:
GBP0.5m). The table below reconciles our cost base to the financial
statements.
Table 2 - Cost base reconciliation % variance 2021 2020
GBP'000 GBP'000
========================================================= ============ ========= =========
Cost of sales 2,315 1,681
Development costs capitalised 847 902
Administrative costs (excluding exceptional items) 4,733 3,551
Payment of lease liabilities* - 136
Depreciation and amortisation charges (excluding exceptional items) (1,225) (1,174)
Movement in provisions (88) -
RDEC adjustments* (127) 52
Exchange adjustments - 6
Cost base, excluding exceptional items 25% 6,455 5,154
========================================================= ============ ========= =========
Cost base is measured as: cost of sales, administrative costs,
development costs capitalised and payment of lease liabilities,
less depreciation and amortisation, movement in provisions, and
non-cash foreign exchange adjustments.
* Lease liabilities have been excluded from the 2021 cost base
reconciliation due to the London office now being sub-let. RDEC
adjustments have been excluded from the cost base to help give a
better like for like comparison of in-year costs.
Income tax
To help our customers understand and resolve their geoenergy and
green hydrogen exploration and operational challenges requires
Getech to undertake pioneering research and development. Against
the cost of this work, we obtained corporation tax relief, and
subsequently realised a tax credit relating to the 2021 tax year of
GBP873,000 (2020: GBP241,000 credit).
Getech reported an adjusted loss after tax of GBP1.6m (2020:
GBP1.5m loss).
Operating cash flows
Due to Getech's investment in diversification strategy, and the
acquisition of H2 Green cash outflow from operations increased to
GBP0.8m (2020: GBP0.2m outflow).
Financing
In April 2020, to protect the Group from the uncertainties
arising from Covid and a low oil price, Getech took a 12-month
capital repayment holiday on the loan secured against Kitson House.
Getech recommenced capital repayments in April 2021. Repayments
against the loan facility amounted to GBP66,000 (2020:
GBP20,000).
Payment of lease liabilities totalled GBP199,000 (2020:
GBP136,000) and relate to the London and Houston office leases. In
February 2021, Getech sub-leased the London office as part of the
continued capital efficiency measures, rental payments received are
included in other operating income.
In April 2021, Getech successfully completed an equity raise,
with net proceeds, totalling GBP5.7m.
Business combinations
In March, Getech purchased 100% of the ordinary share capital of
H2 Green, a company developing green hydrogen networks of
production, storage, and distribution facilities. This acquisition
has been accounted for as a business combination in the 2021
financial year, this includes a GBP335,000 addition to
Goodwill.
Liquidity and Going Concern
At the end of 2021, Getech held GBP5.9m in cash and cash
equivalents (2020: GBP2.2m). Net of debt, Getech's cash balance was
GBP5.1m (2020: GBP1.4m)
Getech's business activities and the factors likely to affect
our future development, performance and position are set out in the
Chairman's and Chief Executive's Review. The financial position of
the Group, our cash flows and liquidity position are described in
the financial statements.
In making the going concern assessment, the Board of Directors
has considered Group budgets and detailed cash flow forecasts to 30
June 2023. The Board has considered the sensitivity of these
forecasts with regards to different assumptions about future income
and costs.
These cash flow projections, when considered in conjunction with
Getech's existing cash balances, and continued careful cash
management, demonstrate that the Group has sufficient working
capital for the foreseeable future. Consequently, the Directors are
fully satisfied that Getech is a going concern.
Andrew Darbyshire
Chief Financial Officer
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
2021 2020
GBP'000 GBP'000
====================================================================================== ========= ==========
Sales revenue 4,280 3,563
Cost of sales (2,315) (1,681)
Gross profit 1,965 1,882
Other operating income 176 -
Administrative expenses (4,733) (3,551)
Operating loss before exceptional items (2,592) (1,6 69 )
Exceptional items (300) (115)
======================================================================================= ========= ==========
Operating loss (2,892) (1,784)
--------------------------------------------------------------------------------------- --------- ----------
Finance revenue - 1
Finance costs (55) (45)
Other gains and losses 60 10
======================================================================================= ========= ==========
Loss before taxation (2,887) (1,818)
Income tax income 938 174
======================================================================================= ========= ==========
Loss for the year (1,949) (1,644)
Other comprehensive income:
Currency translation differences 24 (57)
======================================================================================= ========= ==========
Total comprehensive income for the year attributable to owners of the Parent Company (1,925) (1,701)
======================================================================================= ========= ==========
Earnings per ordinary share (EPS)
Basic EPS (3.27)p (4.38)p
Diluted EPS (3.27)p (4.38)p
======================================================================================= ========= ==========
All activities relate to continuing operations.
Consolidated Statement of Financial Position
as at 31 December 2021
2021 2020
GBP'000 GBP'000
=================================== ========= =========
Non-current assets
Goodwill 631 296
Intangible assets 3,431 3,509
Property, plant and equipment 2,355 2,716
Investment property 174 -
Deferred tax asset 214 364
==================================== ========= =========
6,805 6,885
=================================== ========= =========
Current assets
Trade and other receivables 1,591 1,353
Current tax recoverable 793 278
Cash and cash equivalents 5,864 2,192
==================================== ========= =========
8,248 3,823
=================================== ========= =========
Total assets 15,053 10,708
==================================== ========= =========
Current liabilities
Trade and other payables 2,127 1,366
Borrowings 110 85
2,237 1,451
=================================== ========= =========
Net current assets 6,011 2,372
Non-current liabilities
Borrowings 659 750
Trade and other payables 102 282
Deferred tax liabilities - 176
Long-term provisions 25 -
=================================== ========= =========
786 1,208
=================================== ========= =========
Net assets 12,030 8,049
==================================== ========= =========
Called up share capital 167 94
Share premium account 8,685 3,053
Merger reserve 2,601 2,407
Share-based payment (SBP) reserve 258 251
Currency translation reserve (2) (26)
Retained earnings 321 2,270
==================================== ========= =========
Total equity 12,030 8,049
==================================== ========= =========
The financial statements of Getech Group plc (company number:
02891368) were approved by the Board of Directors and authorised
for issue on 18 May 2022.
Andrew Darbyshire
Chief Financial Officer
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Share Currency
Share premium Merger translation Retained
capital account reserve SBP reserve reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=============== ============= ============= ============= ============ ============ ============= =============
1 January 2020 94 3,053 2,407 242 31 3,892 9,719
Loss for the
year - - - - - (1,644) (1,644)
Other
comprehensive
income - - - - (57) - (57)
=============== ============= ============= ============= ============ ============ ============= =============
Total
comprehensive
income - - - - (57) (1,644) (1,701)
Transactions
with owners:
Share-based
payment
charge - - - 31 - - 31
Transfer of
reserves - - - (22) - 22 -
=============== ============= ============= ============= ============ ============ ============= =============
31 December
2020 94 3,053 2,407 251 26 2,270 8,049
=============== ============= ============= ============= ============ ============ ============= =============
Loss for the
year - - - - - (1,949) (1,949)
Currency
translation
differences - - - - 24 - 24
=============== ============= ============= ============= ============ ============ ============= =============
Total
comprehensive
income - - - - 24 (1,949) (1,925)
Transactions
with owners:
Issue of share
capital 73 6,179 194 - - - 6,446
Share-based
payment
charge - - - 7 - - 7
Cost of share
issue
deducted from
share premium - (547) - - - - (547)
=============== ============= ============= ============= ============ ============ ============= =============
31 December
2021 167 8,685 2,601 258 (2) 321 12,030
=============== ============= ============= ============= ============ ============ ============= =============
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
2021 2020
GBP'000 GBP'000
=============================================================== ========= =========
Operating activities
Loss before tax (2,887) (1,818)
Adjusted for non-cash items:
Fair value gains and losses (60) (10)
Depreciation charge 299 214
Amortisation of intangible assets 1,226 960
Expected credit loss provisions on loans and loan commitments - 70
Share-based payment expense 7 31
Finance income - (1)
Finance costs 55 45
RDEC adjustments within administrative expenses (127) -
Foreign exchange adjustments - (6)
================================================================ ========= =========
(1,487) (515)
(Increase)/decrease in trade and other receivables (245) 600
Increase/(decrease) in trade and other payables 710 (352)
================================================================ ========= =========
Cash generated from operations (1,022) (268)
Income tax refunded 223 83
================================================================ ========= =========
Net cash outflow from operating activities (799) (185)
================================================================ ========= =========
Investing activities
Business combinations (net of cash received) (54) -
Development costs capitalised (847) (902)
Purchase of property, plant and equipment (29) (24)
Interest received - 1
================================================================ ========= =========
Net cash used in investing activities (930) (925)
================================================================ ========= =========
Financing activities
Proceeds from issue of shares 6,250 -
Share issue costs (547) -
Repayment of bank loans (66) (20)
Payment of lease liabilities (199) (136)
Interest paid (44) (45)
================================================================ ========= =========
Net cash generated from/(used in) financing activities 5,394 (201)
================================================================ ========= =========
Increase/(decrease) in net cash and cash equivalents 3,665 (1,311)
Cash and cash equivalents at the beginning of the year 2,192 3,554
Effect of exchange rates 7 (51)
Cash and cash equivalents at the end of the year 5,864 2,192
================================================================ ========= =========
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Basis of preparation
The financial statements set out in this preliminary
announcement do not constitute statutory accounts as defined by
section 434 of the Companies Act 2006. It has been prepared in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006. The principal
accounting policies of the Group have remained unchanged from those
set out in the Group's 2020 annual report as delivered to the
Registrar of Companies. The financial statements have been prepared
under the historical cost convention and are presented in
sterling.
Statutory accounts for the years ended 31 December 2021 and 31
December 2020 have been reported on by the Independent Auditor. The
Independent Auditor's Reports on the Annual Report and Financial
Statements for the periods ended 31 December 2021 and 31 December
2020 were unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2021 were
approved by the board on 18 May 2022 and the information included
in this preliminary announcement was extracted therefrom.
The Board of Directors has considered Group budgets and detailed
cash flow forecasts to 30 June 2023. The Board has considered the
sensitivity of these forecasts with regards to different
assumptions about future income and costs.
The detailed forecasting models are built from Board approved
budgets. From these budgets, revenue forecasting is regularly
updated to take into consideration new contractually committed
revenues, market sentiment, our current sales pipeline, and any
other influencing factors. The Directors then further apply
sensitivity testing to the revenue profiles based on the
achievement of various levels of revenue from noncontractually
committed sources.
These cash flow projections and sensitivities, when considered
in conjunction with Getech's existing cash balances, the net
proceeds of the equity raise totalling GBP5.7m and resulting year
end cash balance of GBP5.9m, demonstrate that the Group has
sufficient working capital for the foreseeable future.
Consequently, the Directors are fully satisfied that Getech is a
going concern.
Earnings per share (EPS)
2021 2020
Number Number
Number of shares
Weighted average number of ordinary shares for basic EPS 59,612,590 37,564,000
========================================================== =========== ===========
2021 2020
GBP'000 GBP'000
Earnings (all attributable to equity shareholders of the company)
Loss for the period from continued operations (1,949) (1,644)
=================================================================== ========= =========
Basic and diluted EPS
From continuing operations (pence/share) (3.27) (4.38)
========================================== ======= =======
Basic EPS is calculated by dividing the profit attributable to
equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable to
equity holders of the parent by the weighted average number of
ordinary shares outstanding plus the weighted average number of
shares that would be issued on conversion of all the dilutive share
options into ordinary shares. In the current and comparative year,
the Group has incurred losses and as such has not presented any
dilution of earnings per share in accordance with IAS 33 'Earnings
per share'. However, these dilutive shares would dilute the
earnings per share should the Group become profitable.
Adjusted Earnings per share
The Directors use "Adjusted Earnings" as a Key Performance
Measure, which is defined as earnings before exceptional items. In
the current year this includes a material component of
non-recurring amortisation which has only arisen because of the
business combination with H2 Green Limited. Adjusted Earnings is
considered to represent and measure the ongoing profitability and
performance more faithfully.
The calculated Adjusted Earnings for the current period is as
follows:
2021 2020
GBP'000 GBP'000
Loss for the period from continued operations (1,949) (1,644)
Adjusted for:
Exceptional items 300 115
================================================= ========= =========
(1,649) (1,529)
================================================= ========= =========
Basic adjusted earnings per share (pence/share) (2.77) (4.07)
================================================= ========= =========
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 31
May 2022 and will be available from the Company's website
www.getech.com from that date. The Annual General Meeting of Getech
Group plc will be held on 23 June 2022 at 12 noon.
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END
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