Leeds-based oil mapping firm Getech says its full year results will be below market expectations

Getech is based in Leeds
Getech is based in Leeds
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Oil mapping firm Getech today said its results for 2019 will be below market expectations after talks over several substantial deals overran.

Leeds-based Getech has issued a financial update ahead of the announcement of its results for the year ended December 31 2019.

In a statement, Getech said: "Against what remains a volatile macroeconomic and commercial backdrop for oil and gas exploration spending, Getech increased its new forward sales by 41 per cent, expanded its order book by 48 per cent and the group's cash balance closed the year at c£3.6 million

"By strategically driving order book growth, with a focus on annually recurring revenue, we are working to increase visibility and progressively lessen Getech's exposure to lumpy transactions.

The statement added: "Highlighting the importance of this, negotiations on several substantial transactions overran from December 2019. We remain in negotiation on these sales, the value of which had the potential to deliver material 2019 revenue growth.

"The fact that they did not complete in 2019 however is expected to result in a c£2 million year-on-year fall in revenue."

"Getech's results for the period ended December 31 2019 will therefore be below market expectations. Lower total costs and continued investment in the drivers of multi-year sales will however limit the year-on-year impact on profitability, and across H2 2019 cash balances rose by £0.6 million."

Based on early unaudited management accounts, revenue for the 12 months to December 31 2019 is expected to total around £6 million

The statement added: "In addition, Getech closed another c £2.4 million of new forward sales - a significant portion of which will unwind to revenue in 2020.

Getech's order book grew to around £3.1 million at December 31 2019, compared with £2.1 million at the end of 2018.

Jonathan Copus, Getech's CEO, commented: "Getech began December 2019 financially ahead year-on-year and with a high-value sales pipeline that was commercially well-advanced. The shortfall in 2019 revenue is therefore disappointing.

"Alongside the growth delivered in 2018, this highlights how Getech's earnings remain exposed to lumpy transactions, the exact timings of which can be difficult to influence. We are however strategically driving significant growth in our order book to progressively lessen this exposure. We also work to protect Getech and its profitability from year-end risk through careful capital management.

"We have begun 2020 with a full and diverse sales pipeline, this benefiting from 2019 sales campaigns in new regions, with new potential customers. Our focus is to realise the value of this pipeline and in January 2020 we have already added a new supe rmajor globe customer.

"We are committed to maintaining operational discipline, and we have a slate of initiatives through which we are targeting growth. Getech's balance sheet is strong and the Group's cash-leverage to growth remains substantial."