Strong data from Getech as group on acquisition trail

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EXPLORATION data group Getech surged to record annual results and said it has good scope to expand further as oil giants continue to spend on its studies.

The company, spun out of the University of Leeds, is on the hunt for acquisitions as it sits on a £2.6m net cash pile.

It posted 21 per cent revenue growth to £6.4m in the year to the end of July. Pre-tax profits increased 86 per cent to £1.2m.

Getech designs and sells studies featuring complex magnetic, geological and geophysical data to help firms drill for oil and gas. It counts companies including Shell, BP and Exxon Mobil among its customers.

Getech said companies large and small are increasingly spending on its data. It has high hopes for its Globe programme, originally called Global Programmes, which provides firms with an overview of the whole planet. Globe also contains regional studies so companies can assess areas in varying levels of resolution.

This week it revealed two Globe deals worth a total $2.75m (£1.7m) with an unnamed ‘supermajor’ oil firm and a major regional oil firm.

Chief executive Raymond Wolfson described Globe as an “ecosystem”. “It’s a structure into which all of our knowledge and data (fits). Essentially all the work we do is part of Globe.”

Despite recent weakness in the oil price – down to about $85 per barrel – Getech said it remains at a level where firms are prepared to spend on exploration, “as long as the oil price is where it is and does not fall to the levels it did in 2008”. “At the moment we do not see any signs of the slowdown.”

Getech’s share price has surged over the past year, and yesterday added another 2p to close at 51.5p.

“Now we’re on the radar, (with) the prospect of this being a very positive growth proposition, I think we will see more interest,” said Mr Wolfson.

Mr Wolfson admitted a lack of liquidity in its shares is “something we have to do something about”.

Only about 25 per cent of its shares are in public hands, he said, with the rest held by staff, directors and IP Group. Founder Derek Fairhead has 30 per cent, while IP Group, which turns university research into business, has 25 per cent.

Mr Wolfson added the group is “definitely on the look-out for more acquisitions”, and “at this price we would definitely consider using paper for an acquisition”.

“While something opportunistic could turn up it’s companies which are either directly synergistic or would extend the scope of our work in directions we are planning to move in.”

The company has a workforce of about 67, after adding eight staff over the past year.

Getech hiked its final dividend to 0.8p per share from 0.2p.

Eric Burns, Leeds-based analyst at house broker WH Ireland, said: “Getech is enjoying strong momentum driven not only by supportive oil and gas prices (ex-US) but also self-help measures such as increased sales and marketing effort.”