GETECH posts solid first half

published 29 March 2012

Geosciences firm GETECH, which specialises in improving the efficiency of exploration activies with the oil and mining sectors, has reported a strong half year ended January 31st.

Revenue rose from £2.65m to £3.19m, up 20%, while pre-tax profit was up 22%, from £0.29m to £0.36m.

Chief Executive Raymond Wolfson told Sharecast the period had been a strong one for the company and explained how he plans to move the company forward.

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"We believe we have the largest global source of commercially available gravity and magnetic data, including onshore US," he said.

"We have a high quality client base which stretches across the globe and remain confident about the medium and long-term. Our strategic three-year project helps ease any concerns over future income visibility because clients are signed up for at least that length of time. We've seem good revenue growth and rising profits, which has led us to propose a dividend of 0.2p.

"We are looking to expand into new areas, including appropriate acquisitions and extending our proprietary and consultancy work. Whilst there is inevitably a degree of uncertainty over future trading, month-on-month volatility has been reduced as more opportunities arise."

Cash levels at the end of the period increased from £1m to £1.8m year-on-year.

The company suffered a serious setback in 2009 following the recession, when many of its major clients, which include ExxonMobil, Shell, and BP, slashed their budgets. The firm was able to make cuts and took out a loan, half of which has since been repaid, in order to ride out the troubles, returning to profit in 2010.

House broker WH Ireland believes the firm has made "decent progress" during the period, and said its dividend was ahead of expectations. The broker attributed the improvement in sales to increased demand for its data products, including two significant sales of Iraqi and Russian data. WH Ireland reiterated its buy rating, saying the stock is undervalued at just 11.3 x current year earnings.

The share price has risen 49% over the past year, equivalent to 7.50p, and is up 10% following today's results, at 23.50p.