Getech eyes up new acquisitions

Getech maps oil sources around the globe
Getech maps oil sources around the globe
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Oil mapping firm Getech Group said it is exploring a range of acquisition opportunities and organic growth to boost its products and services.

The Leeds-based firm said revenue in the six months to June 30 is expected to fall by £400,000 to £2.5m, reflecting a reduction in the size of its Geoscience Services team, which was a decision taken in the fourth quarter of 2018 to address the team's loss-making position.

The group said it has won £1.6m in new forward sales, a significant amount of which should unwind to revenue in the second half of 2019.

Analyst Eric Burns at WH Ireland said:"Getech has announced a first half update this morning ahead of interim results expected at the end of next month with first half revenue guided around £400,000 lower.

"This is largely a function of last year’s restructuring of Geoscience Services which also lowered first half costs by around £300,000 in the first half. This means that the first half loss should be in line with the comparative of a year ago with a £531,000 pre-tax loss.

"Importantly, Getech closed an additional £1.6m of new forward sales in the period (up from £1.4m a year ago) with a significant proportion of this expected to unwind in the second half. As a result, the total order book grew by £1.0m to stand at £3.0m.

"This, together with the prospect of sales of products and services in the second half relating to a number of well-defined campaigns such as the Sierra Leone Fourth Licencing Round, gives us confidence that our expectations for the full year will be met."

The group said it is trading in line with current market expectations.

Getech said it is growing revenue by broadening its customer base and expanding its geographic reach.

With global macroeconomic uncertainty driving crude price volatility, Getech said its oil and gas customers continue to carefully manage the release of their investment budgets.

Getech's CEO Jonathan Copus said: "We have reshaped Getech around a suite of high-value products and skills.

"This is changing the mix and timing of our sales and revenues.

"Although first half revenue was lower, new sales have strengthened Getech's forward earnings path."