Leeds-based Getech Group plans to accelerate diversification plans

Getech Group has announced its final results for the 12 months ended December 31 2019.

Last year, revenue was £6.1 million, compared with £8.0 million the previous year. Getech said its order book had increased by 48 per cent to £3.1 million at 31 December 2019.

The company said the Covid-19 pandemic had led to unprecedented restrictions on social and business activity.

The statement added: "These have deeply disrupted the global economy, and, in the face of sharp falls in oil demand, a relatively short-lived but untimely OPEC-Russia supply war added unwelcome complexity."

In a statement, the company said: "Getech provides products and services that commercialise our expertise in the development, application and deployment of the earth sciences and geospatial technology.

"To date we have principally used these skills to build and sell data, knowledge and analytical products that address specific petroleum market workflows and data management challenges. Our customers use these products and services to de-risk exploration programmes and improve the management of their assets and resources.

The statement added: "We have also been successful in diversifying into new markets. Getech sells data products and geoscience services to mining companies, and we have utilised our geospatial skills in the water, transportation, nuclear, pipeline and electricity infrastructure sectors.

"While these end markets are not yet material in the context of the group, we have the expertise and technologies to create significant value in these new markets."

The pace at which the Covid-19 pandemic has reshaped the global business environment is unprecedented, the company said.

"In energy markets the speed at which demand has fallen has triggered cuts to capital investment and, in oil and gas specifically, these have been faster and deeper than followed either the 2008 or 2014 oil price falls and our customers have placed many regional 'project-based' investment plans on hold.

The statement added: "Although it remains too early to estimate how deep or long the downturn in our core markets will be, our order book is larger and our sales pipeline remains diverse and continues to benefit from 2019 campaigns in new regions, with new potential customers.

"We expect May's sharp rebound in oil prices, which has continued into June, to take time to filter through to our customer conversations. Getech's revenue is normally weighted 40:60 between H1 and H2 and there is the likelihood this weighting becomes accentuated into H2 in 2020. In H1 2020 we have focused on the replenishment of our orderbook and protecting annually recurring revenue.

"Year-to-date, we are cautiously encouraged by the renewal rate across our software products and we have won service extensions that deliver monthly revenue to year-end. We are also negotiating various licence renewals to our globe knowledge product.

"These discussions would normally conclude in June and July. Globe contracts are an important part of our order book, and they set the shape and scale of our H2 2020 investment. As we plan this investment, we are confident that Getech's financial strength, our flexibility and the transferable nature of our skills and technologies give us the toolkit to successfully navigate what are exceptional commercial conditions.

"We also see an opportunity to accelerate our diversification and growth plans - both through organic expansion and acquisition."

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