Stock Exchange Announcements 2016

RNS Announcements for 2016

13-12-16 AGM result
13-12-16 AGM update
08-11-16 Final results
07-10-16 Directorate change
21-09-16 Change of registered office
12-08-16 Adoption of FRS 101
02-08-16 Directorate change
14-06-16 Acquisition of Exprodat Consulting Limited
10-06-16 Trading Update
05-04-16 Interim Report
09-02-16 Board Changes

13-12-16 AGM result

AGM Result

Getech (AIM; GTC), a provider of data, studies and services to the natural resources and energy sectors, is pleased to announce that all resolutions presented at the Company’s AGM held earlier today were approved.

Enquiries:

GETECH Group plc
Jonathan Copus, Chief Executive Officer Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

13-12-16 AGM Update

AGM Statement

At today’s Annual General Meeting, Jonathan Copus, the Chief Executive Officer of Getech (AIM; GTC), a provider of data, studies and services to the natural resources and energy sectors, will give the following update:

 “In 2016 Getech focused its operations on targeted investment in our core business, counter-cyclical M&A, and the active management of costs. These actions combined to deliver a significant rebound in profitability in the second half of our 2016 financial year. Since reporting 2016 results, we have secured several strategically important new contracts and our day-to-day activities continue to be focused around the customer, profitability and diversified growth.

Business update

In 2016 Globe entered its sixth year of continuous customer support, the MultiSat programme was delivered, a wide range of new Regional Reports were released and we completed an extensive, multi-disciplinary basin review for Sonangol. We continued to support the Mozambique Government’s petroleum activities, captured new World Bank funded consultancy opportunities in Sierra Leone and in June 2016 we strengthened our offering through the acquisition of Exprodat, a provider of cutting-edge Geographic Information Systems (GIS) services and software products.

Since the completion of this transaction, Getech has focused its geoscience, GIS, software and consulting skills on growing the Group’s operations both within and beyond our core oil & gas exploration customer base. It is pleasing therefore to announce that we are ending the calendar year having secured a new sale of Globe phase-two to a super-major, and we have been contracted by the UK Oil and Gas Authority (the “OGA”) to develop and implement a GIS information management strategy. This work for the OGA extends our operations beyond our core exploration market, being focused on spatial data that spans the full E&P asset life-cycle. In addition, having won our first contract within the nuclear industry in the previous financial year, Getech is currently at an advanced stage of discussions to expand on this work.

Financials

As previously announced, financially, 2016 was a year of two distinct halves. In the first half, slow trading and higher costs lead to a loss before tax of £704,000. In response, Getech took a range of hard decisions and implemented a significant programme of cost control measures. From a lower cost base, and with a 14% rebound in revenues, our underlying performance significantly improved in H2-16; the Group reporting a full year profit before tax of £671,000.

We believe these operational and financial highlights illustrate that despite the challenges faced by the wider natural resources market, our clients continue to see value in our integrated, multi-disciplinary approach, which in turn is underpinned by excellent data, high quality staff, and a strong GIS platform.

The Board however also continues to act with prudence. The Group remains focused on cost control throughout the business and the Board decided to not propose a 2016 dividend.

Outlook

Looking to 2017, although the outlook for our core exploration market remains uncertain, feedback from customers leaves us cautiously encouraged by the market mood. We have no intention however to sit back and wait for a rebound.

With an expanded operational skill set, Getech is entering a period where we are focused on profitability and opportunities to enhance and diversify our commercial offering. We will do this through an improved value proposition around our activities, the provision of better access to our data/analysis and refocusing of our products and services so that they more practically address the day-to-day commercial challenges faced by our customers; our goal being to deliver products and services with practical applications and demonstrable value”.

Stuart Paton, Chairman of Getech Group plc, said: “I am extremely pleased with the progress that the Company has made in the last four months under the leadership of our new CEO Dr Jonathan Copus. The market remains challenging and we continue to have to make difficult decisions to ensure the robustness of the business. However, with new leadership, diversification into new areas, and a stronger oil price, I am confident in the future growth of Getech. Central to achieving this is cultural change, and at the heart of this lies the continued integration of activities across our project teams and offices. I would like to take this opportunity to thank all of Getech’s staff for their continued hard work and dedication.”

Enquiries:

GETECH Group plc
Jonathan Copus, Chief Executive Officer Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

08-11-16 Final Results

GETECH, the oil services business specialising in the provision of exploration data and petroleum systems studies and evaluations, announces its Preliminary Results for the year ended 31 July 2016.

Financial highlights

Revenue £7,031,000 (2015: £8,639,000)

Profit before tax £671,000 (2015: £1,992,000)

Earnings per share 3.25p (2015: 5.77p)

Operational highlights

Knowledge base growth: year six of Globe, five new Regional Reports, Multi-Sat completed

Sonangol multi-disciplinary review completed (our largest single contract to date)

New business with National Oil Companies: World Bank funded contract in Sierra Leone

Diversification into new markets: new contract in the nuclear energy sector

Counter cyclical M&A

Acquisition of Exprodat, a leading specialist in geographic information systems

Chairman’s statement

With oil prices remaining low and volatile throughout the financial year ended 31 July 2016, the market backdrop to my sixth report as Chairman remained challenging for a Group largely focussed on the provision of products and services to the natural resources industries. In the first half of the financial year, Getech acted decisively to strengthen its operations through innovation around its core products and by implementing significant cost control measures. These steps resulted in a considerable improvement in Getech’s trading performance in the second half of the year, when compared to the first half of the year. Building on this momentum, the Group acquired Exprodat Consulting Limited (Exprodat), largely by issue of new shares. We believe this counter-cyclical acquisition redefines our skill base within geographic information systems (GIS), which is already transforming the value proposition around the Group’s core activities and opening new opportunities to markets outside of oil and gas.

 Beyond 2016, having built an unparalleled suite of global geological and geophysical data, analysis and products, Getech is now focussed on enhancing this offering through providing better access to its data sets and refocussing its offering to more practically address the day-to-day commercial challenges faced by our customers. I am excited by the value potential that this looks to unlock.

 Results

For the financial year ended 31 July 2016, the Group reports a profit before tax of £671,000 (2015: £1,992,000) on revenue of £7,031,000 (2015: £8,639,000). The post-tax profit was £1,089,000 (2015: £1,813,000), giving earnings per share of 3.25p (2015: earnings per share of 5.77p).

 Dividends

The Directors are not proposing a final dividend in respect of the financial year to 31 July 2016 (2015: final dividend of 1.74p per share). Getech intends to continue its policy of progressive dividends as appropriate, but given the ongoing market conditions, the Directors do not consider it prudent to pay a dividend at this time.

 Business Review

The continuing low oil price throughout the 2016 financial year resulted in challenging conditions for the Group. Getech was initially affected by the reduction in exploration expenditure in late 2013. The sustained low oil price since the middle of 2014 led to ongoing low levels of capital expenditure across the whole exploration and production (E&P) sector, with exploration expenditure particularly hard hit. There have been numerous major redundancy rounds in many E&P and service companies. A wide range of service companies have been severely affected, both in terms of their incomes and their profits, with a number going bankrupt and consolidation taking place across the sector. The low oil price has also detrimentally influenced national oil companies’ (NOCs’) abilities to finance exploration efforts as their national budgets have been severely impacted.

 The Group has relentlessly pursued sales opportunities in all markets in which it operates. Many clients express strong support for the Group’s products but they do not currently have any budget available to make purchases. Our strong relationships with clients ensure that we stay up-to-date with their requirements and hence we believe we are well positioned to act on an improvement in the market. The acquisition of Exprodat in June 2016 has significantly strengthened the Group’s capabilities, both in terms of the range of services we can offer and by creating synergies to the Group’s existing services. A key focus in the coming year will be to develop these synergies to create new products and services and to broaden Exprodat’s software offering. Exprodat also provides very close links to ESRI, a key geographical information services platform, which has already brought connections to other businesses outside E&P.

 Getech has made some very hard decisions during the year, including making a number of staff redundant, reducing staff hours and salaries, and cutting back nonessential expenditure. It is incredibly difficult to make these decisions as they directly impact individual people and their families; however, these steps have had to be taken to ensure the resilience of the Group.

 Outlook

The oil price has strengthened recently, from lows of around US$30/bbl in early 2016 to around US$50/bbl by the end of Getech’s financial year in July 2016. This strengthening in the oil price, combined with a reduced cost profile, should make future E&P investment more attractive. Many analysts and market commentators consider that US onshore will become the ‘swing producer’ and hence should be the focus of short-term capital; however, there has been very limited exploration spend across the whole sector for the last two or more years. Therefore, in the medium term, as has happened in previous cycles, we are likely to see the oil price strengthen further due to supply constraints caused by the reduced level of investment. This strengthening in oil price will presumably also affect the level of investment from NOCs, who will need to maintain production levels while encouraging new investment through license rounds to increase longer-term production.

 At the same time, the deep cuts to staffing in many companies, including the International Oil Companies (IOCs) and large US Independents, mean that their capability to undertake exploration is severely curtailed. In the medium term, this provides a real opportunity for Getech to provide focussed, high-quality advice to these companies. The Group continues to believe that its range of products provides a strong foundation upon which it can grow the business. We work with a wide range of clients across the world, from NOCs and Super Majors to mid-size and small companies.

 The Group’s key focus in the coming year will be to maximise the value of combining the knowledge and data from Getech with the skills we have gained through the ERCL and Exprodat acquisitions to create a portfolio of products that are an essential part of the exploration process. This will involve a clear understanding of the issues faced by explorationists and the application of our integrated approach to address these issues in a timely and cost-efficient manner.

 We believe the Group will require organisational changes and strong leadership to identify, build and deliver these products. The appointment of Dr Jonathan Copus as CEO provides the leadership required to make these organisational changes and to drive the business forward for its next stage of growth. Jonathan brings extensive industry, corporate finance and capital markets experience, having worked as an Exploration Geologist at Shell, as the top-rated E&P Sell-side Equity Analyst at a number of City companies (including Investec and Deutsche Bank) and most recently as Chief Financial Officer at Salamander Energy plc, which was acquired by Ophir plc in 2015. His professional training as a geologist, his industry experience with both Super Major and UK-listed Independent Oil and Gas Companies, and his extensive City experience make him uniquely suited for this role. The Board is very pleased to have been able to attract an individual of this calibre to the role and look forward to working with him to grow the Group.

 I am very pleased that Mr Chris Flavell joined the Board in November 2015. Chris has 35 years’ experience in operating E&P companies and consultancies, and he brings a wealth of knowledge and industry contacts. Most recently, he managed Tullow Oil’s exploration geoscience team from 2007 to 2013, which was a period of outstanding success and growth for the company. In 2013, he left Tullow Oil to form a geoscience-focussed recruitment consultancy.

 The last year has seen many changes in Directors and staff in the business. I would like to reiterate our thanks to Mr Raymond Wolfson for his outstanding contribution and commitment to Getech over many years. I would also like to thank both Mr Colin Glass, who stepped down as a Director in November 2015 after 16 years of involvement with Getech, and Dr Paul F. Carey, who announced that he is stepping down as a Director and leaving the Group with effect from 1 January 2017. A number of staff have also left the business through the redundancy process; I would like to thank each and every one of them for their commitment to the Group.

 Finally, I would like to say how pleased I am to continue to be involved with the Group and to thank the staff and my fellow Directors for all their hard work and dedication. I am delighted to welcome the Exprodat staff based in London. The whole organisation has shown great fortitude in challenging circumstances.

 Dr Stuart M. Paton
Non-executive Chairman

 

Getech Group plc

Jonathan Copus, CEO

 

Tel:  0113 322 2200

WH Ireland Limited

Katy Mitchell

Tel:  0161 832 2174

 

 

  

Operating Review

 I am pleased to make my first report as CEO of Getech, having joined the Group at the beginning of

August 2016. I take up the reins in what continues to be a challenging business environment for both our customers and the Group. Across Getech’s financial year to July 2016, budgets for drilling exploration wells did not see any significant signs of recovery and the market for proprietary consulting work remained weak. Our customers, however, continue to refresh and rework their views around the opportunity sets within and outside of their exploration portfolios, which has resulted in continued demand for our data and regional multiclient consulting activities. Across our broad client base, our customers have continued to value Getech’s core products and services, many of which form important components of their day-to-day operational workflows.

 Getech’s focus is to deliver to our customers value creative products from a diversified and stable business platform. To achieve this, the Group must produce a high-quality, innovative, technical offering and maintain a steady focus on costs. It must also retain the vision to see this market as an opportunity to significantly strengthen the Group’s offering. The most recent step along this path was the acquisition of Exprodat Consulting Limited (Exprodat), a geographical information systems (GIS) services and software specialist.

 In partnership with our customers to deliver data and analysis at a global scale

Getech remains committed to the continued expansion of our unrivalled inventory of gravity and magnetics data and expertise, and our Globe products and services.

 In 2016, the Group enhanced its capabilities in gravity and magnetics through the formation of a dedicated centre of excellence. As a low-cost alternative to seismic data, gravity and magnetic data continues to be seen as an attractive purchase for Getech’s natural resources clients. As such, data sales remain an important revenue stream for the Group. In July 2016, Getech also delivered the three-year Multi-Satellite Altimeter Gravity Programme (Multi-Satproject), which has provided a route for our customers to greatly enhance the quality of their satellite data.

 Globe, as a client-funded product suite, is now in its sixth year of support and continues to gain more interest and use. Activity throughout 2016 was pre-funded by a broad grouping of International Oil Company and large Independent Oil Company customers. Through Globe, Getech delivers to its customers the most comprehensive reconstruction of past geography, depositional environments, tectonics and climate undertaken by any organisation to date. Globe continues to provide an environment that encourages regular interaction with our clients. The work also feeds through into Getech’s multiclient Regional Report products and focussed consultancy work, both of which draw on the full spectrum of Getech’s knowledge bases and operations.

 Within consulting, 2016 saw the completion of work on Getech’s extensive, multi-disciplinary Angolan basin review for Sonangol. This contract was one of the largest Getech have had and it is testament to our strong relationship with Sonangol. Against a depressed consultancy market, we have recently been awarded further consultancy work by the government of Sierra Leone (see below). We remain confident that as the market improves, we will secure other contracts with national oil companies (NOCs) who see the value of our integrated, multi-disciplinary approach that is underpinned by excellent data and a strong GIS platform.

 The continued demand throughout 2016 for Getech’s Regional Reports indicates that although our customers are not drilling, they continue to refresh and rework their views around the opportunity sets within and outside of their exploration portfolios. This pattern has continued into the first half of Getech’s 2017 financial year, although the market remains both fragile and volatile.

 Finding Opportunity within a Turbulent Market

Against this backdrop, Getech’s Board took an active decision to not just hunker-down and wait for an oil-price driven market recovery. Instead, the Board saw a number of clear partnership or transactional opportunities across a range of companies. The Board’s focus continues to be on companies that are not in direct competition with Getech and where there is the potential to deliver significant value enhancement through complementary skills and customer relationships.

 The first of these acquisitions, ERCL, was completed in 2015. Its operations were progressively integrated into the Group during the course of 2016. ERCL has extended Getech’s commercial reach beyond its traditional regional gravity and magnetics new business venture market into a more seismic-linked sphere where the Group is now able to offer detailed well planning, field development and asset and data management advice to companies, governments and NOCs.

 Throughout 2016, under the ERCL brand, Getech continued to support the Mozambique Government’s petroleum activities through the provision of commercial and geotechnical advice and training. As part of this work, 2016 saw the completion of the country’s fifth licensing round (a program assisted by ERCL) and work commenced on the preparation of data products for future rounds. In addition to this work, ERCL recently won a World Bank contract to support the government of Sierra Leone in its petroleum activities and it has ongoing work in a number of other countries, including Lebanon, Namibia, Palestine and Pakistan. Complementing these government and NOC projects, ERCL also provides exploration and development-based technical/commercial assistance to a range of independent upstream companies; recent activity includes operations in China, Equatorial Guinea, Mexico, Morocco and Spain.

 In June 2016, Getech completed a second significant transaction: the acquisition of Exprodat. Exprodat specialises in the provision of services and consultancy relating to data management and the use of GIS. GIS, in the form of ESRI’s ArcGIS™ product suite, is an industry-standard tool that is fundamental in supporting many aspects of oil and gas operations. Getech already has a long-standing and highly skilled GIS team, but this team had to date been focussed on servicing Getech’s internal business needs. Exprodat therefore brings an additional skilled GIS resource that is dedicated to generating an external income stream for the Group.

 As a key part of its activities, Exprodat has developed, and licenses commercially, several GIS software packages that support petroleum exploration. During the current downturn, the client retention of these subscription-based software products has been approximately 95%; this brings a substantial client base to Getech, with a significant proportion of recurring income. For Getech, it is particularly relevant that although the Exprodat staff specialise in GIS and software skills, they are also predominantly geologists by training, giving them an understanding of our clients’ commercial and data management needs. Exprodat also delivers GIS training in both public and private environments; since 2007, Exprodat has trained approximately 2,500 oil and gas professionals in GIS.

 Exprodat is an ESRI Gold Partner (one of only two in Europe) and it has ISO 9001 certification. Each of these features represents an external validation and recognition of the quality of the company’s services. With GIS being used in many industries other than the exploration and production (E&P) service sector, it is very pleasing to note that through the acquisition of Exprodat, Getech is now using its geoscience, GIS, software and consulting skills to extend its operations beyond its core oil and gas customer base; the Group is currently engaged in operations within the nuclear, mining, agriculture and water management industries.

 A Focus on Costs

Getech’s management team is focussed on opportunities that strengthen and broaden the Group’s product offering, while at the same time taking steps that balance the Group’s cost base with our customer’s ability to pay for our products.

 By taking advantage of the current turbulent market to build a broader service offering, the two acquisitions completed to date have also brought increased operational costs into the Group. Management has therefore kept a close watch on Group profitability, and in the first half of the 2016 financial year, a significant cost reduction program was launched. In the second half of the 2016 financial year, the delivery of this program resulted in a material step-down in the Group’s cost structure: staff, general and administrative costs were lowered by 22% on an annualised basis.

 Continuing the Group’s focus on profitability, following the acquisition of Exprodat, a further series of cost reduction measures are currently being enacted across the Group.

 Outlook

While the market is at best uncertain, our dialogue with our customers remains vigorous and the Group has a pipeline of significant sales proposals awaiting approval. As we approach the end of our customers’ budget year, for the first time in several years, feedback from clients leaves us encouraged by the market mood; the recent increase in the oil price gives our customers more confidence that their budgets will become available in 2017.

 Getech’s management, however, is focussed on optimising the Group’s positioning regardless of any potential recovery in the market. Having built an unparalleled suite of global geological and geophysical knowledge bases, Getech is now moving towards a model where the Group is focussed on enhancing this offering through providing better access to its data sets and refocussing its products and services so that they more specifically address the commercial challenges faced by our customers.

 Key to achieving this goal will be further integration of both ERCL and Exprodat into the Getech Group. The 2017 financial year has seen far greater movement of staff between the Group’s offices and a blurring of the project staffing and management lines between Leeds, Henley-on-Thames and London.

 Test marketing has already demonstrated that the application of Exprodat’s software and advanced GIS skills to Getech’s core products and services has the potential to revolutionise the way that our customers access these offerings. This is expected, in turn, to open up new potential for the commercial application of information held within the Group’s knowledge bases, which subsequently should redefine the value proposition to our customers. This potential is evident on a single-product basis (e.g. Globe or Regional Reports) as well as through multi-disciplinary/multi-product programs of work (e.g. proprietary work for government agencies and NOCs).

 Although not yet significant as standalone revenue streams, Getech’s recent advances into sectors beyond oil and gas highlight the fact that the Group’s geoscience and GIS skills have the potential to be applied to a much broader spectrum of activities. These opportunities are under investigation and have the potential to diversify the Group’s revenue base.

 

 Dr Jonathan Copus
Chief Executive Officer

 

 Financial Review

With oil prices falling a further 38% across the 2016 financial year, the exploration budgets of our customers remained under considerable pressure. For Getech, the financial year was one of two halves: the first half reflected lower revenues and pre-integration costs associated with the acquisition of ERCL; the second half saw a revenue-driven trading improvement and the benefits of a program of significant cost management.

 Operating Income and Cash Flow

Revenue for the 2016 financial year amounted to £7,031,000 (2015: £8,639,000), a reduction of 19% from the previous financial year. While we have seen continued interest in Getech’s industry-leading products and services, the restricted exploration budgets for the majority of E&P companies have had a direct effect on Getech’s operating income.

 In the first half of the 2016 financial year, slow trading conditions compounded a post-acquisition expansion in the Group’s cost base, resulting in a first half loss before tax of £704,000 on revenues of £3,288,000. Getech rationalised its cost base towards the end of the first half of the 2016 financial year, which led to a cost base reduction of 17%¹ in the second half of the financial year. The combination of these reductions and a 14% increase in revenues to £3,743,000 resulted in improved underlying performance in the second half of the year. Getech’s second half profit before tax amounted to £1,375,000. This included an £845,000 write-down adjustment made to the fair value of the ERCL acquisition earn-out provision (the amount by which the total cash consideration for the ERCL acquisition has reduced from our original expectation). Full year profit before tax was £671,000 (2015: £1,992,000).

 The Group’s cost base is predominantly in pound sterling, but a significant proportion of its revenue is denominated in US dollars. Recently, currency markets have been favourable to the Group, with gain on foreign exchange movement reaching £123,000 for the 2016 financial year (2015: £99,000).

 Having reported a net operating cash out-flow of £488,000 in the first half of the 2016 financial year (prior to the changes in working capital, which are detailed below), this was more than reversed by a £978,000 in-flow in the second half of the year; the full year operating cash in-flow figure totals £489,000 (2015: £2,348,000).

 During the year, trade and other receivables balances reduced by £1,491,000 (2015: £202,000). A significant contributing factor to this was the payment during 2016 of the debtor balances from National Oil Companies that had been outstanding at the end of the 2015 financial year. Trade and other payables balances fell by £1,164,000 during the year (2015: increased by £483,000); the primary reason for this decrease was the release of deferred income relating to Globe deliverables throughout the 2016 financial year. Inventories have increased by £775,000 over the year (2015: £112,000) due to the timing of the multiclient Regional Reports product cycle, with several new reports nearing completion at the end of the financial year, creating new products to be sold in 2017.

 Taking these changes in working capital into account, Getech’s total cash in-flow from pre-tax operations during the 2016 financial year was £41,000 (2015: £2,921,000).

 During the 2016 financial year, Getech made cash tax payments of £326,000 (2015: tax refund of £456,000). These payments relate to: profits in the 2015 financial year (predominantly payable in the US), payments on account for the current financial year and tax withheld in Angola. We anticipate tax refunds in the 2017 financial year from both the US and UK tax authorities as a result of our Group-wide research and development commitments as well as refunds for tax overpaid through payments on account – the £434,000 current tax asset in the Consolidated Statement of Financial Position.

 Investment and Capital Expenditure

During the 2016 financial year, Getech continued its strategy of identifying counter-cyclical investment opportunities, and on 14 June 2016, it completed the acquisition of Exprodat Consulting Limited (Exprodat) in a deal valued at £1,760,000. The deal brought new areas of expertise to the extended Group, allowing us to offer a wider suite of products and services to exploration customers and other markets. The acquisition presents new opportunities for Getech, which are discussed in the Chairman’s Statement and the Operating Review. The financial statements reflect the revenue and expenses incurred from the Exprodat assets for the 6 week period from the acquisition until the end of the financial year. Full year pro-forma numbers are also stated in the relevant sections of the notes to the financial statements.

 Net cash out-flow from all investing activities was £1,061,000 (2015: £2,481,000). Within this figure, acquisition costs net of cash received were £240,000 (2015: £1,130,000), relating to the acquisitions of ERCL and Exprodat.

 Getech has continued to invest in its Globe platform, with expenditure of £824,000 (2015: £977,000). The Globeplatform is amortised over a 3 to 7 year period, and the first full year of amortisation has resulted in an increase in the Group amortisation costs from £186,000 in the 2015 financial year to £479,000 in the 2016 financial year. TheGlobe platform continues to be a key asset to Getech, forming the basis for many of the Company’s cutting-edge products.

 Financing

In the 2015 financial year, Getech used a £1,100,000 loan to partially fund the ERCL acquisition. During the 2016 financial year, capital repayments of the loan amounted to £132,000 (2015: £68,000).

Cash dividend payments totalled £572,000 (2015: £683,000).

 Liquidity and Going Concern

At the end of the 2016 financial year, Getech held £2,788,000 in cash and cash equivalents, and a gross debt of £900,000 (2015: £4,727,000 in cash and cash equivalents, and a gross debt of £1,032,000).

 The Group’s business activities and the factors likely to affect its future development, performance and position are set out in the Chairman’s Statement and the Operating Review. The financial position of the Group, its cash flows and its liquidity position are described in the financial statements.

 In making the going concern assessment, the Board of Directors has considered Group budgets and cash flow forecasts. As a result of this review, the Directors consider that the Company and the Group are going concerns and the financial statements are prepared on that basis.

 

 Andrew Darbyshire
Finance Manager

 ¹ Cost base is measured as cost of sales, administrative costs and development costs capitalised, less depreciation and amortisation, and adjusted for movement in work in progress, foreign exchange (as this predominantly relates to income for the Group) and fair value adjustments. The 6 weeks of Exprodat’s costs were also excluded for comparative purposes.

  

Consolidated statement of comprehensive income

For the year ended 31 July 2016

2016

2015

£’000

£’000

Revenue

7,031

8,639

Cost of sales

(3,503)

(3,002)

Gross profit

3,528

5,637

Administrative costs

(2,835)

(3,650)

Operating profit

693

1,987

Finance income

8

14

Finance costs

(30)

(8)

Profit before tax

671

1,992

Income tax (expense)/credit

418

(179)

Profit for the year attributable to owners of the Parent

1,089

1,813

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Currency translation differences on translation of foreign operations

110

20

Total comprehensive income for the year attributable to owners of the Parent

1,199

 1,833

Earnings per share

Basic earnings per share

3.25p

5.77p

Diluted earnings per share

3.17p

5.61p

All activities relate to continuing operations.

Consolidated statement of financial position

As at 31 July 2016

Company registration number 02891368

2016

2015

£’000

£’000

Assets

Non-current assets

Property, plant and equipment

2,691

2,853

Goodwill

3,428

3,132

Intangible assets

2,948

2,046

Deferred tax assets

283

160

9,350

8,190

Current assets

Inventories

1,067

292

Trade and other receivables

3,372

4,235

Current tax assets

434

118

Cash and cash equivalents

2,788

4,727

7,661

9,371

Total assets

17,011

17,561

Liabilities

Current liabilities

Borrowings

133

266

Trade and other payables

3,549

4,628

Current tax liabilities

13

395

3,695

5,289

Non-current liabilities

Borrowings

767

766

Trade and other payables

980

Deferred tax liabilities

387

319

1,154

2,065

Total liabilities

4,849

7,354

Net assets

12,162

10,207

Equity

Equity attributable to owners of the Parent

Share capital

94

82

Share premium account

3,053

3,037

Merger relief reserve

2,407

1,159

Share option reserve

173

155

Currency translation reserve

(1)

(111)

Retained earnings

6,435

5,885

Total equity

12,162

10,207

The financial statements were approved by the Board of Directors on 7 November 2016.

Dr Stuart Paton

Director

Consolidated statement of cash flows

For the year ended 31 July 2016

2016

2015

£’000

£’000

Cash flows from operating activities

Profit before tax

671

1,992

Share-based payment charge

52

59

Depreciation and amortisation charges

671

367

Disposal of fixed assets

(4)

Impairment of intangible assets

298

Fair value adjustments

(845)

(304)

Finance income

(8)

 (13)

Finance costs

30

 8

Exchange adjustments

(77)

(59)

Increase in inventories

(775)

(112)

Decrease/(increase) in trade and other receivables

1,491

202

Increase/(decrease) in trade and other payables

(1,164)

483

Cash generated/(used in) from operations

41

 2,921

Income taxes paid

(326)

456

Net cash generated/(used in) from operating activities

(285)

 3,377

Cash flows from investing activities

Purchase of property, plant and equipment

(32)

(259)

Proceeds from sale of fixed assets

27

Purchase of intangible assets

(128)

Development costs capitalised

(824)

(977)

Acquisition costs, net of cash received

(240)

(1,130)

Interest received

8

 13

Net cash (used in)/generated from investing activities

(1,061)

 (2,481)

Cash flows from financing activities

Proceeds from issue of share capital

16

24

New term loan

1,100

Repayment of long-term borrowings

(132)

(68)

Equity dividends paid

(572)

(683)

Interest paid

(30)

(8)

Net cash generated from/(used in) financing activities

(718)

365

Net increase/(decrease) in cash and cash equivalents

(2,064)

1,261

Cash and cash equivalents at beginning of year

4,727

3,423

Exchange adjustments to cash and cash equivalents at beginning of year

125

 43

Cash and cash equivalents at end of year

2,788

 4,727

Consolidated statement of changes in equity

For the year ended 31 July 2016

Share

Merger

Share

Currency

Share

premium

relief

option

translation

Retained

capital

account

reserve

reserve

reserve

earnings

Total

£’000

£’000

£’000

£’000

£’000

£’000

£’000

At 1 August 2014

76

3,013

126

(131)

4,726

7,810

Dividends

(684)

(684)

Issue of capital under sharebased payment options

1

24

(30)

30

25

Share-based payment charge

59

59

Issue of share capital

5

1,159

1,159

Transactions with owners

6

24

1,159

29

(654)

564

Profit for the year

1,813

1,813

Currency translation differences

20

20

Total comprehensive income for the year

20

1,813

1,813

At 31 July 2015

82

3,037

1,159

155

(111)

5,885

10,207

Dividends

(572)

(572)

Issue of capital under sharebased payment options

16

(34)

34

16

Share-based payment charge

52

52

Issue of share capital

12

1,248

1,260

Transactions with owners

12

16

1,248

18

(538)

756

Profit for the year

1,089

1,089

Currency translation differences

110

110

Total comprehensive income for the year

110

1,089

1,199

At 31 July 2016

94

3,053

2,407

173

(1)

6,435

12,162

Notes to the consolidated financial statements

For the year ended 31 July 2016

 Nature of operations

The principal activity of Getech Group plc and its subsidiary companies Geophysical Exploration Technology Inc., ERCL Limited and Exprodat Consulting Limited (collectively “Getech” or “the Group”) is the provision of gravity and magnetic data, services and geological studies to the petroleum and mining industries to assist in their exploration activities.

 General information

Getech Group plc is the Group’s ultimate Parent Company (“the Parent Company”). It is incorporated in England and Wales and domiciled in England (CRN: 2891368). The address of its registered office and principal place of business Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LJ. Getech Group plc shares are admitted to trading on the London Stock Exchange’s AIM.

 Basis of preparation

These consolidated financial statements (“the financial statements”) have been prepared in accordance with International Financial Reporting Standards (IFRS) in issue as adopted by the European Union. IFRS include interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).

 The financial statements have been prepared under the historical cost convention.

 The Directors have instituted regular reviews of trading and cash flow forecasts and have considered the sensitivity of these forecasts to different assumptions about future income and costs. With continued prospects for profitable trading, the Directors are fully satisfied that the Group is a going concern and will be able to continue trading for the foreseeable future.

 Financial information

The financial information set out above, which was approved by the Board on 7 November 2016, is derived from the full Group accounts for the year ended 31 July 2016 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2016, will be delivered to the Registrar of Companies in due course.

 The statutory accounts for the year ended 31 July 2015, which have been delivered to the Registrar of Companies, contained an unqualified audit report and did not include a statement under s498(2) or s498(3) of the Companies Act 2006.

 The annual report will be posted to shareholders and available on the web site on 12 November 2016.

 Dividends

2016

2015

£’000

£’000

Paid during the year

Final dividend in respect of the year ended 31 July 2015 at 1.74p per share (2014: 1.76p)

572

534

No interim dividend (2015: 0.46p per share)

150

572

684

Proposed after the year end (not recognised as a liability)

No final dividend in respect of the year ended 31 July 2016 (2015: 1.74p per share)

572

 There is no final dividend proposed.

 Earnings per share

A basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of the Ordinary Shares in issue in the year.

2016

2015

Profit attributable to equity holders of the Group

£1,089,000

£1,813,000

Weighted average number of Ordinary Shares in issue

33,490,000

31,417,000

Basic earnings per share

3.25p

5.77p

Diluted earnings per share

3.17p

5.61p

 Diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of the Ordinary Shares which would be in issue if all the options granted, other than those which are anti-dilutive, were exercised. The addition to the weighted number of the Ordinary Shares used in the calculation of diluted earnings per share for the year ended 31 July 2016 is 884,259 (2015: 918,010).

 Notice of Annual General Meeting

The Annual Report and Accounts, and notice convening the Annual General Meeting of the Company will be posted to shareholders on 12 November 2016 and will be available from the Company’s website www.getech.com, from that date. The Annual General Meeting of Getech Group plc (“the Company”) will be held at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LJ on 13 December 2016 at 12 noon.

07-10-16 Directorate change

Directorate change

 Getech Group plc (AIM: GTC), a leading provider of subsurface data and risk-management services to the energy and natural resources industries, announces that Dr Paul Carey has advised the Board of his intention to leave the Group. Paul will step down from the board on 31 December 2016.

 Succeeding Paul as the Sales and Marketing Director will be Jules Cullen. Jules is currently Getech’s Marketing Director and also heads up sales for products and services produced under the Group’s ERCL and Exprodat brands.

 Jonathan Copus, Getech CEO commented:

 “Paul has been a valued member of the Board, and I would like to thank him for all he has done for the Getech Group. On his departure, Paul will not be replaced on the Board. Across five years of service, Paul has worked to reposition Getech’s sales and marketing activities around an expanding suite of products and services. I and the Board wish Paul every success in his future endeavours.

 I am pleased to be welcoming Jules Cullen to Getech’s Senior Management Team. Jules joined the Group through the recent acquisition of Exprodat and brings with her 25 years of product-focused sales and marketing experience in the petroleum industry. In her 10 years at Exprodat Jules established a global client base for its software products and technical services and expanded the company’s commercial reach into new markets within the natural resources sector, including the nuclear industry and agriculture.” 

Enquiries:

GETECH Group plc
Jonathan Copus, Chief Executive Officer Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

21-09-16 Change of registered office

Change of registered office address

Getech Group plc (AIM: GTC) announces that it has changed its registered office address to Kitson House, Elmete Hall, Elmete Lane, Leeds, LS8 2LJ.

Enquiries:

GETECH Group plc
Jonathan Copus, Chief Executive Officer Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

12-08-16 Adoption of FRS 101

Adoption of Financial Reporting Standard (“FRS”) 101

Following the publication of FRS 100 “Application of Financial Reporting Requirements” by the Financial Reporting Council, Getech is required to change its accounting framework for its entity financial statements and those of its subsidiaries which currently adopt United Kingdom Generally Accepted Accounting Standards (UK GAAP).

It is intended for the period ending 31 July 2016 and future years, that the parent entity and its subsidiaries adopt FRS 101 “Reduced Disclosure Framework”, based on International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The Group’s consolidated financial statements are unaffected by this change, and will continue to be prepared in accordance with IFRSs as adopted by the European Union.

The decision to adopt FRS 101 does not require shareholder approval. However objections to its adoption may be served by a shareholder or shareholders holding in aggregate 5% or more of the total allotted shares of the Group, in writing, to Andrew Darbyshire, the Company Secretary, at the registered office at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LJ.

Enquiries:

GETECH Group plc
Jonathan Copus, Chief Executive Officer Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

02-08-16 Directorate change

Appointment of new Chief Executive Officer             

 Getech plc (AIM: GTC), a leading provider of subsurface data and risk-management services to the natural resources industries, is pleased to announce the appointment of Dr Jonathan Copus as Chief Executive Officer with immediate effect. Jonathan succeeds Raymond Wolfson who stepped down from the Board on 31 July 2016.

 Dr Copus brings extensive industry, corporate finance and capital markets experience having worked as an exploration geologist at Shell, as the top-rated Exploration & Production sell-side equity analyst at a number of City companies including Investec and Deutsche Bank and most recently as  Chief Financial Officer at Salamander Energy plc, which was acquired by Ophir plc in 2015.

 Stuart Paton, Chairman, said “I am extremely pleased to announce Jonathan’s appointment as CEO of Getech. In February 2016 we set out to find a new CEO who brings direct industry experience and knowledge and who is capable of taking the company forward to the next stage of its development. Jonathan’s professional training as a geologist, his industry experience with both super-major and UK-listed independent oil and gas companies, and his extensive City experience, makes him uniquely suited for this role. The board is very pleased that we have been able to attract an individual of this calibre to the role and look forward to working with him to grow the Group.”

 I would also like to reiterate our thanks to Raymond for his outstanding contribution and commitment to Getech over many years. His dedication and professionalism has continued in the last 6 months as we have undertaken the search for a new CEO. I am also very pleased that Raymond will be remaining with Getech in a part-time advisory role.”

  Jonathan Copus said “I am delighted to have the opportunity to lead Getech through what is a pivotal point in its growth story. I believe Getech is a company defined by the quality of both its people and products. From this foundation, and against a challenging market backdrop, the Group is committed to redoubling its efforts to find innovative ways to deliver fresh subsurface insights that lead to shared value creation across its broad customer base. With the recent acquisitions of ERCL and Exprodat further strengthening the Group’s product offering I am excited by Getech’s potential and I look forward to directing its future development.”  

Disclosures under the AIM Rules
Dr. Jonathan Michael Copus, aged 44, was previously a director of the following companies in the last five years:

Salamander Energy plc; Bontang Energy Limited*; Salamander Energy (Bengara) Limited; Salamander Energy (Bualuang) Limited; Salamander Energy (Bualuang Holdings) Limited; Salamander Energy (E&P) Limited*; Salamander Energy (Glagah Kambuna Holdings) Limited; Salamander Energy Group Limited; Salamander Energy (Holdco) Limited; Salamander Energy (Indonesia) Limited*; Salamander Energy (JS) Limited; Salamander Energy (Kutai) Limited*; Salamander Energy (Malaysia) Limited; Salamander Energy (North East Bangkanai) Limited; Salamander Energy (Philippines) Limited; Salamander Energy (S.E. Asia) Limited; Salamander Energy (S.E. Sangatta) Limited*; Salamander Energy (Simenggaris) Limited*; Salamander Energy (South Sokang) Limited*; Salamander Energy (Vietnam) Limited); and Salamander Energy (West Bangkanai) Limited

Jonathan is not, and has not been in the past five years, a director or partner of any other company or partnership.

Jonathan does not hold any shares in the Company but will be granted options in the Company as defined below.

The Options

On his appointment, the Company will grant Jonathan Copus 1.4 million share options consisting of 1 million approved share options and 400,000 unapproved share options over ordinary shares in the Company .

These options become exercisable over a period of three years:
• 500,000 are exercisable after the first anniversary of grant
• 500,000 become exercisable after the second anniversary of grant
• 400,000 become exercisable after the third anniversary of grant

All the options are exercisable pursuant to the provisions of the option scheme, are exercisable at a price of 24.5p per Ordinary Shares (being the closing price on 1st August 2016) and cannot be exercised later than the tenth anniversary of grant.

There is no further information required to be disclosed in accordance with Schedule 2, paragraph (g) of the AIM Rules for Companies.

 * indicates companies which, since 2015, have been renamed as Ophir Energy Group companies.

Enquiries:

GETECH Group plc
Stuart Paton, Chairman Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

14-06-16 Acquisition of Exprodat Consulting Limited

Getech (AIM; GTC), the geoscience business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, is pleased to announce the execution and completion of an agreement to acquire the entire issued share capital of Exprodat Consulting Limited, a company specialising in the provision of geographical information systems (“GIS”) software and services to the oil and gas industry (the “Agreement”).

Getech has previously stated a strategic aim of acquiring companies with clear commercial fit and synergies, in parallel with the strategic aim of organic growth. In April 2015 it completed the acquisition of ERCL Limited, an oil and gas consultancy based in Henley on Thames.

In common with its clients, Getech’s work depends on the ability to manage, present and interpret geographical data. Throughout the oil and gas industry, GIS systems are used as part of the work at all stages from exploration through to production, and virtually all clients use the ArcGIS software platform, provided by ESRI.

Exprodat

Exprodat was founded in 2002 and is a London-based consultancy with 20 staff, specialising in the provision of services and consultancy relating to data management and the use of GIS systems. It provides training in both public and private environments, and has developed, and licences commercially, several software packages which support petroleum exploration.

It has developed a substantial client base, with a significant proportion of recurring income. For Getech, it is particularly relevant that the staff are predominantly geologists by training, giving them an understanding of the client scientific as well as data management needs.

Exprodat is an ESRI Gold Partner, and it has ISO 9001 certification. Each of these represents an external validation and recognition of the quality of the company’s services.

Prior to the current market downturn which we believe started in 2014, Exprodat had a long and profitable trading history. In the year to December 2014 it reported income of £4,629,000 and profit before tax of £107,000. However, with the worsening state of the market and exceptional costs in 2015, Exprodat’s most recent accounts to December 2015 are expected to report income of £3,419,000 and a loss before tax of £109,000. However, the 2015 result is stated after the impact of one-off restructuring expenses in December to reduce its ongoing costs.

Getech will acquire Exprodat from its existing shareholders Gareth Smith, Nicholas Cribbens, Christopher Jepps, Julie Cullen and Ross Smail.

The Directors believe that the enlarged Getech group will deliver a number of synergies, both in relation to internal group performance and in terms of the products and services provided to our clients.

The terms of the Agreement

Getech will pay consideration as follows:

  • A cash payment equal to the value by which net assets exceed £500,000 payable in two instalments, as follows:
    – £250,000 immediately on completion
    – the balance on 14 January 2017
  • The issue of 4,666,667 Getech shares (“New Shares”). Application will be made to admit these shares to trading on AIM and it is anticipated that trading in the shares will commence on 20 June 2016. It is agreed that the shares will be retained by the Exprodat shareholders for a minimum period of one year from completion.

On this basis, using the closing share price on Monday 13 June 2016, the aggregate potential consideration will be valued at £1,760,000.

Exprodat’s gross assets total £1,570,000 with net assets of £1,008,000.

There are no shares held in treasury, therefore the total number of voting rights in the Company following the issue of the New Shares will be 37,562,415. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest under the Disclosure and Transparency Rules.

Immediately following completion, Gareth Smith, Nicholas Cribbens, Christopher Jepps, Julie Cullen and Ross Smail will be interested in the capital of the Company as follows:

Existing ordinary shares Ordinary shares issued on completion % issued share capital
Gareth Smith                                         – 1,430,108 3.81%
Nicholas Cribbens                                         – 1,430,108 3.81%
Christopher Jepps                                         – 903,226 2.40%
Julie Cullen                                         – 677,419 1.80%
Ross Smail                                         – 225,806 0.60%
                                        – 4,666,667 12.42%

 

Stuart Paton, Chairman of Getech Group plc, said: “We are delighted that we have completed the transaction with Exprodat. We see a very strong strategic fit and believe that this will enable the enlarged group to provide improved products, services, software and training more broadly across client workflows in the petroleum sector. Exprodat also brings skills which are directly applicable outside the petroleum industry, providing the potential for the group to extend into other markets. The enlarged group will have a strong asset base, a broader range of skills and products, and enhanced potential to take advantage of a market recovery.”

Enquiries:

GETECH Group plc
Stuart Paton, Chairman Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

10-06-16 Trading Update

Getech, the geoscience services business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, provides a trading update with regard to the year to July 2016.

As previously reported, the Company delivered a loss before tax of £704,000 in the first half of the year, but had an extremely successful third quarter from February to April 2016. However, the market has continued to remain very depressed and a number of potential sales for the fourth quarter have now either been deferred or cancelled. As a result, the Directors confirm that the Company is trading below current market expectations. Nevertheless the Company expects to generate a profit before tax for the year to July 2016.

Stuart Paton, Non-Executive Chairman of Getech Group plc, said “We were pleased to have made such an exceptional start to the second half of the financial year, but the market has remained very depressed and clients in general continue to delay expenditure. However, interest in our products remains strong, and this is reflected in the heavy schedule of planned client meetings over the next few months.

The oil price has shown signs of strengthening but this is unlikely to have an immediate impact on purchasing behaviour. However, if it shows signs that the price rises are sustainable, we anticipate that the demand for our products will convert from a wish to buy to actual purchases when budgets are available.”

For further information, please contact:

GETECH Group plc
Stuart Paton, Chairman Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174

05-04-16 Interim Report

Interim Report for the six months ended 31 January 2016
New $1million Contract signed

Getech, the geoscience services business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, announces its interim results for the six months ended 31 January 2016.

Highlights

Revenue for the six months of £3,288,000 (six months ended 31 January 2015: £3,619,000)
Loss before tax of £704,000 (profit six months ended 31 January 2015: £707,000)
Gross cash £2,700,000 (net cash after bank debt £1,800,000)
Significant sales deferred rather than cancelled
Strong start to the second half-year with record February sales and US$1m new contract in April
Significant reductions in the cost base in early 2016

Stuart Paton, Non-Executive Chairman of Getech Group plc, said:

“Although the oil price has increased by almost 50% since its low point in January 2016, there is still considerable uncertainty as to the timing of a stronger recovery, and this continues to affect the availability of client budgets in 2016.

However, we entered the second half of our year with strong cash balances and a substantial pipeline of sales opportunities. A number of new sales, including the signature and delivery of a data licence valued at US$720k, led to a record February for sales and income. We can also announce that we have now signed a US$1million new contract, which includes parts of Globe and two regional reports, the global depth to basement study and our multi-satellite project,, most of which will be delivered in the half year to July 2016. The Directors are also optimistic that a number of other opportunities which either did not complete in the first half or have been generated recently, will complete in the second half year.”

GETECH Group plcRaymond Wolfson, Chief Executive Tel:  0113 322 2200
WH Ireland LimitedKaty Mitchell Tel:  0161 832 2174

Chairman’s statement
Results

Getech reports a Group loss before tax of £704,000 (six months ended 31 January 2015: profit of £707,000) after interest receivable of £5,000 (six months ended 31 January 2015: £5,000) on revenue of £3,288,000 (six months ended 31 January 2015: £3,619,000). The post-tax loss was £704,000 (six months ended 31 January 2015: profit of £691,000).

The accounts have been prepared under IFRS in issue as adopted by the European Union.

Dividend

Your Board does not propose an interim dividend. The Board intends to continue its policy of proposing a progressive dividend but will take into account prevailing market conditions.

Business review

Highlights:

Half year loss before tax £704,000
Gross cash at 31 January of £2.7m, net cash after bank debt of £1.8m and net assets of £9.0m
Global oil and gas services continue to suffer a severe downturn with no certainty as to the timing of the recovery
Significant sales were deferred rather than cancelled
Strong start to second half year with record sales in February and a US$1m contract signed in April
Significant reductions in the cost base in early 2016 while maintaining capability in all business streams

During the period under review the business continued to be adversely affected by the difficult market conditions. After the significant decline in the oil price in the second half of 2014, it fell further during 2015, which resulted in a considerable tightening of exploration budgets by our oil and gas clients. As a consequence, there has been a large number of further redundancies both in the operators and the service companies that support them. Client budgets therefore continued to be affected throughout our first half year to January 2016.

ERCL Limited, which was acquired in April 2015, is subject to the same market conditions, but this subsidiary company primarily addresses a different part of the exploration cycle. The programme of integration with ERCL has continued, including a number of joint projects, and the Directors are confident that it will continue to be a major asset for the Group.

The Company remains in a strong financial position. By the end of the period the Group cash balance amounted to £2.7m (£1.8m net of £0.9m debt), notably after the payment of a dividend costing £572,000 in December 2015 and group net assets stood at £9.0m, supporting the underlying strength of the Company.

Outlook

Although the oil price has increased by almost 50% since its low point in January 2016, there is still considerable uncertainty as to the timing of a stronger recovery, and this continues to affect the availability of client budgets in 2016.

However, the Company entered the second half of its year with strong cash balances and a substantial pipeline of sales opportunities. A number of new sales, including the signature and delivery of a data licence valued at US$720,000, led to a record February for sales and income. We can also announce that we have now signed a new US$1m contract, which includes parts of Globe, two regional reports, the global depth to basement study and our multi-satellite project, most of which will be delivered in the half year to July 2016. The Directors are also optimistic that a number of other opportunities, which either did not complete in the first half or have been generated recently, will complete in the second half year.

In light of the challenging market conditions, the Company has significantly lowered its cost base through a range of measures, including cutting marketing costs and reducing staff costs through reduced working hours and voluntary and compulsory job losses. As a result, our month-on-month cost base will be down more than 20% from its peak in the period under review. However, the Directors believe they have been able to manage this in a way that has enabled the Company to retain the breadth of skills and experience necessary to allow all our current business streams to pick up again once the market recovers.

The Directors remain fully aware of the need to be vigilant about the impact of the current market conditions on the business, and plans continue to recognise a worst case position where the oil and gas market does not begin to recover until 2017. However, the Directors believe the Company’s strong position means that the current market can still be seen as an opportunity. They continue to seek complementary acquisitions which have minimal impact on cash and risk, but which will present significant upside once the market recovers.

We remain confident about our medium and longer term prospects.

Dr Stuart Paton
Non-executive Chairman
5 April 2016

Consolidated statement of comprehensive income
For the six months ended 31 January 2016

Income statement

Consolidated statement of financial position
As at 31 January 2016
Company registration number 2891368

Financial position

Consolidated statement of cash flows
For the six months ended 31 January 2016

Cash flow

Consolidated statement of changes in equity
For the six months ended 31 January 2016

SOCIE

Notes to the interim report
For the six months ended 31 January 2016

1 Nature of operations
The principal activity of Getech Group plc (“the Company”) and its subsidiary companies, Geophysical Exploration Technology Inc. and ERCL Limited (collectively “Getech” or “the Group”), is the provision of gravity and magnetic data, services and geological studies to the petroleum and mining industries to assist in their exploration activities.

2 General information
Getech Group plc is the Group’s ultimate Parent Company. It is incorporated in England and Wales and domiciled in England (CRN: 2891368). The address of its registered office is Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LJ. The Company’s shares are admitted to trading on the London Stock Exchange’s AIM.

The financial information for the six months ended 31 January 2016 and 31 January 2015 has not been audited and does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. These consolidated interim financial statements (“the interim financial statements”) have been approved by the Board.

The financial information relating to the year ended 31 July 2015 is based on the Group’s statutory accounts for that period. The statutory accounts were prepared in accordance with International Financial Reporting Standards (“IFRS”) in issue as adopted by the European Union. IFRS include interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). The statutory accounts received an unqualified audit report, did not contain statements under Sections 498(2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

3 Basis of preparation
The interim financial statements are for the six months ended 31 January 2016. They have been prepared using the recognition and measurement principles of IFRS. The interim financial statements do not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 31 July 2015.
The interim financial statements have been prepared under the historical cost convention except in relation to financial instruments held at fair value through profit or loss. They have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 July 2015.
The accounting policies have been applied consistently throughout the Group for the purpose of preparation of the interim financial statements.

4 Dividends
Dividend

There is no interim dividend proposed.

5 Earnings per share
Basic earnings per share is calculated on the basis of the profit for the period after tax, divided by the weighted average number of Ordinary Shares in issue in the period of 32,886,729 (six months ended 31 January 2015: 30,327,196; year ended 31 July 2015: 31,416,845).

Diluted earnings per share is calculated on the basis of the profit for the period after tax, divided by the weighted average number of Ordinary Shares in issue plus the weighted average number of Ordinary Shares which would be issued if all options granted were exercised. The addition to the weighted average number of Ordinary Shares used in the calculation of diluted earnings per share for the six months ended 31 January 2016 is 650,725 (six months ended 31 January 2015: 905,712; year ended 31 July 2015: 1,510,171).

6 Interim Report
This Interim Report will be available on the Company’s website, www.getech.com, from 5 April 2016.

09-02-16 Board Changes

The Board announces that Raymond Wolfson is stepping down as Chief Executive Officer and director of the Company with effect from no later than 31 July 2016. In the interim until a new CEO is appointed Mr Wolfson will continue in the role of CEO and the Chairman, Stuart Paton, will increase his level of day to day involvement.

Mr Wolfson was appointed CEO of Getech in 2007 having been a non-executive director since it started trading as a separate company in the year 2000. Following his resignation as CEO, Mr Wolfson will take on the role of Commercial Director which will be a non-board position and will provide continuity for the new CEO, as well as advice and support on a range of matters including commercial, financial, regulatory and contractual.

Stuart Paton, Chairman said “The Board is extremely grateful to Raymond for his outstanding contribution and commitment over many years. He has been a key part of the growth of the company following its spin out from the University of Leeds in 2000. The Board will now actively seek a replacement and considers that, for the next stage in the Company’s development, a person with direct industry experience and knowledge is required.  A specialist recruitment agency has been exclusively retained for this search.

I have very much valued working with Raymond during my time at Getech and have the highest regard for him. I am very pleased that he will continue to provide invaluable support to the Company after stepping down as CEO.”

A further announcement will be made when a new CEO is appointed.

For further information, please contact:

GETECH Group plc
Stuart Paton, Chairman Tel: 0113 322 2200

WH Ireland Limited
Katy Mitchell Tel: 0161 832 2174