Getech unveils surprise leap in dividend

OIL data firm Getech announced an 80 per cent leap in annual pre-tax profits and an unexpected hike in its dividend, sending its shares up more than 13 per cent.

The Leeds-based group, which maps out areas around the world where oil may be found, said historically high oil prices and strong demand for its proprietary global information system, Globe, will continue to drive sales and pro-fits.

The group raised its final dividend from 0.8p to 1.6p, bringing the total dividend for the year to July 31 to 2.0p, up from 1.0p last year.

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The group’s shares rose 10.5p to 89p.

Getech said pre-tax profits soared to £2.25m, up from £1.25m last year, and revenues rose 24 per cent to £8m.

Analyst Eric Burns, at house broker WH Ireland, said: “The full year numbers are top drawer: Pre-tax profits of £2.25m compares very favourably with our £2.05m expectation whilst earnings per share of 5.6p is some way better than our 4.9p forecast.

“But the real surprise is the dividend where a 1.6p final takes the total payout to 2.0p, way ahead of our 1.6p full-year forecast and making Getech a decent income stock once more.”

Getech said it is on the hunt for acquisitions and has £4m in the bank.

Chairman Dr Stuart Paton said the group is looking at firms that have similar skills in order to beef up the workforce, firms that have different technical data or it could spend money on new datasets.

“It would either be people who have similar skills to us as we’re trying to recruit people, or it might be people who do technical work that is different to what we do at the moment, or it could be new data sets,” he said.

Getech has signed up another five customers for Globe, bringing the total to 10.

Getech’s chief executive Raymond Wolfson, said the new customers are all well known oil and gas companies.

“We thought we’d attract only the major companies because of the nature of the product. We have a limited target market, but it is also of interest to some of the big independents,” he said.

He added that the firm has “quite a few more” customers in its targets, but declined to say exactly how many it hopes to sign up.

Getech recently extended Globe to new areas that take into account climate and tide in the search for oil and gas.

It calls this new area Earth Systems Models (ESM), which can provide insight into the origin and development of petroleum systems.

Mr Wolfson said the first ESM delivery was made in July and the interest level from other clients gives it confidence that it will build into a “very significant” extension of Globe.

ESM takes into account temperatures, whether the climate is wet or dry (the organic material such as trees that formed the oil and gas millions of years ago would not thrive in arid conditions), and tides to try to detect where new oil and gas reserves may be found.

“The emergence of Earth Systems Model will extend Globe,” said Mr Burns at WH Ireland.

“Getech has evolved its Earth Systems Models product which comprises climate, tide and predictive modelling. This can be overlaid on to Getech’s core Globe product and is an upsell to existing Globe sponsors.

“The first such product delivery was made in July and it has already attracted a high level of interest from potential customers.” He added that continuing high oil and gas prices, with the latter recovering markedly in the US this year, are providing the “perfect backdrop” to increased spending on exploration, and in particular expansion into new frontier basins, which plays to Getech’s services.

Mr Wolfson said: “We believe that the relative stability of the oil price at historically high levels will continue to provide a sound market environment for exploration giving a very positive outlook for our business.

“Key to our success is the ability to understand the needs of our clients and provide high quality solutions to help them in their goal of finding oil and gas resources.”

Earlier this month the group held its second annual meeting for Globe clients in Leeds and Houston.