TIDMGTC
RNS Number : 1044Y
GETECH Group plc
07 May 2019
Getech Group plc
("Getech" or the "Company" and with its subsidiaries the
"Group")
Final Results for the 12 months ended 31 December 2018
The Getech Group (AIM; GTC) announces its Final Results for the
12 months ended 31 December 2018.
In this RNS we summarise and discuss Getech's audited financial
results for the 12-month accounting period ended 31 December 2018.
Having moved our financial year-end to 31 December (from 31 July)
Getech's prior audited accounts are for the 17-month period to 31
December 2017 (referred to as AP-2017). To aid analysis, we include
unaudited financial comparators for the 12 months ended 31 December
2017 (referred to as FY-2017). The FY-2017 financial comparators
have been derived by deducting the five-month period to 31 December
2016 unaudited management accounts from the audited 17-month period
to 31 December 2017.
Chairman's and Chief Executive's Review
-- Revenue of GBP8.0m (11% increase on FY-2017) from a leaner
and more focused operational base.
-- Products deliver a second year of significant growth (FY-2018
24% increase on FY-2017; FY-2017 19% increase on FY-2016) and the
Group continued to build recurring revenue.
-- Services losses were addressed through a Q4 restructuring of Geoscience Services.
-- EBITDA of GBP1.3m (32% up on FY-2017 before restructuring costs and FY-2017 write-downs).
-- Year-end net cash plus net current receivables of GBP2.5
million (31 December 2017: GBP1.9 million); the mix between cash
and receivables reflective of the Q4 timing of a significant
multi-product sale.
-- Operational strategy remains to grow investment whilst
maintaining capital discipline; the focus being to build staff
skills and the practical operational value of our products and
services.
-- With the sales cycle remaining long we continue to work
closely with our customers to address their key needs and consider
Getech well positioned to deliver diversified organic growth.
-- We also look to leverage our sector knowledge and
transferrable skills through acquisitions.
Getech provides geoscience and geospatial products and services
to companies and governments who use them to de-risk exploration
programmes and improve their management of natural resources.
The Group's activities focus on a suite of data, software and
information products; the value of which we enhance through
services that leverage these products and our geoscience-geospatial
skills.
Our product-led strategy targets recurring revenue growth. Our
investment programme is shaped by a culture of customer
collaboration and a commitment to continuous product and service
enhancement. This focus on products and the customer reflects a
repositioning of Getech that began in 2016 with the appointment of
a new CEO and management team.
Since 2016 we have strengthened our business operationally,
commercially and financially. We have expanded investment in our
people and products but also lowered like-for-like fixed costs by
31%. This leaves Getech's cash profitability significantly
leveraged to growth; fixed costs accounting for c85% of the Group's
total annual costs. We have also worked to expand Getech's
activities beyond oil and gas exploration; key to diversification
have been our geospatial software products and services.
In 2018, crude prices strengthened year-on-year, but price
volatility left customer exploration and new business budgets
constrained. We managed these budget constraints by working closely
with our customers and by maintaining flexibility in our sales
conversations, which kept them relevant to our customers' changing
needs. Year-on-year this translated to new customers, 11% growth in
revenue, 32% growth in profit[1], and an increase in our baseline
of forward sales. Underpinning this performance is our central
ethos - to continuously enhance the practical operational value of
our products and services.
We have entered 2019 with a busy schedule of sales campaigns and
we consider Getech to be well positioned to deliver diversified
organic growth. With industry costs at a cyclical low, our
customers' attitude to capital spending is balanced between spot
oil prices, which have rallied since the start of 2019, and
longer-dated crude prices, which continue to trade above $60 per
barrel range. As such, and against a backcloth of falling reserve
replacement, we consider the conditions and need for upstream
investment to have strengthened. Balancing this, and as indicated
in our Trading Update of 27 March, the lengthening of the sales
cycle that emerged in Q4 2018 has persisted into 2019; the
Directors believe that customers remain cautious over the early
release of their exploration and new business budgets. Getech's
2019 sales campaigns and programme of investment are positioned to
unlock these conversations.
The Board and Senior Management are focused on ensuring that
Getech's assets and capital work hard for all shareholders. We
believe volatile macroeconomic conditions have delayed the sale of
our Leeds office and we have assumed that this will not happen
before the next balance sheet date, however we remain committed to
its disposal. We intend to build Getech through a mix of organic
and acquisitional growth, and as the markets into which we sell
stabilise, we also see potential to reinstate dividend
payments.
On behalf of the Board and Executive we would like to thank
Getech's staff for their hard work, creativity and professionalism
throughout 2018.
Dr Stuart Paton Dr Jonathan Copus
Chairman Chief Executive
Getech Group plc Tel: 0113 322 2200
Jonathan Copus, CEO
WH Ireland Limited Tel: 0161 832 2174
Katy Mitchell
-------------------
Operations Review
Our Gravity and Magnetic Solutions team performed solidly in
2018, underscoring our market leading position in this domain. Data
sales remained robust and our team's unique and leading expertise
in potential fields data processing, analysis and interpretation
was recognised by a busy programme of Gravity & Magnetic
service contracts throughout the year.
Our flagship Globe product, developed by our Geoscience
Information Products team, goes from strength-to-strength. In 2017
Globe was moved to an annual release cycle. This was to provide
more flexibility in shaping the product's development to match our
customers' evolving needs. In July 2018 the first of these annual
releases, "Globe 2018", was delivered to customers - on time and
within budget. Globe 2018 features the most diverse and innovative
inventory of new capabilities to date. By leveraging skills from
across the Group, Getech's geoscience, geospatial and software
expertise have been combined to deliver new information, analytics
tools and training options for Globe users. Globe User Group
Meetings, held in London and Houston, produced a new level of
customer engagement and helped stimulate discussion on product
uses, features and opportunities for future product enhancements.
Our work to re-position Globe was rewarded in 2018 by many of
Globe's super-major customers signing up to multi-year licence
agreements.
The focus for our GIS Software division in 2018 was to migrate
our software products to ArcGIS Pro, Esri's latest desktop GIS
application and ArcMap replacement. In the autumn of 2018 both our
Data Assistant and Exploration Analyst extensions were released on
ArcGIS Pro, providing a significant assistance to customers wishing
to upgrade their own environments. In Q3 2018 we began work on
migrating our Unconventionals Analyst software product to ArcGIS
Pro, targeting a release in Q2 2019. As with Globe, our sales
team's focus on delivering recurring revenue enabled us to secure a
number of multi-year software contracts during the year.
Our GIS Services team continues to be recognised as experts in
the use of Esri technology within the petroleum and natural
resources sectors. In 2018 we won another long-term GIS support
contract with a super-major and diversified further by securing
geospatial implementation projects with natural resources customers
outside of petroleum.
Our Geoscience Services team was relocated to our new London
office in Q4 2018, having closed our Henley office. While the
market for geoscience services has remained challenging following
the period of low and volatile oil prices, we believe this
re-organisation has put us back on the road to profitability. It
has also enabled us to re-shape this team with closer working
relationships with the rest of the Group - providing opportunities
to integrate Getech's products, Gravity & Magnetic services and
geospatial expertise into an evolving cross-disciplinary geoscience
services offering. Our work with governments also continued in
2018, and we continue to work in partnership with the Government of
Sierra Leone on its Fourth Licensing Round and with the Lebanon
Petroleum Administration.
Chris Jepps
Chief Operating Officer
Financial Review
Getech's current customers operate principally in the oil and
gas exploration sector. Their budgets and programmes of activity
are shaped by both spot and forward crude prices but also the
general cost structure of the industry and the opportunity sets in
and around their asset portfolios.
With 2018 Brent averaging $71/bbl, 42% higher than its prior
three-year average, and long-dated crude prices consistently in
excess of $60/bbl, our sales discussions for most of the year had a
more forward-looking tone. In H1 2018 we extended our pipeline of
multi-year product subscriptions, which expanded the Group's
foundation of recurring revenue. In Q4 2018 however, a sharp fall
in crude prices highlighted the fragility of global growth, Brent
tumbling from a high of $86/bbl to a low of $50/bbl. This fall
lengthened and complicated the sales cycle but by repositioning our
customer conversations Getech ended 2018 with a significant sale of
data and products, which also added a new Globe customer.
In the year to 31 December 2018, from a significantly leaner and
more focused operational base, Getech delivered 11% year-on-year
revenue growth against FY-2017, which drove a 32% expansion in
adjusted EBITDA. The Group ended 2018 with net cash plus net
current receivables of GBP2,503,000 (31 December 2017:
GBP1,922,000). Having refinanced our borrowings in H2 2018, net of
long-term debt this figure totalled GBP3,322,000 (31 December 2017:
GBP2,277,000).
To aid in the analysis of our underlying financial performance,
the table below sets out key figures from the financial statements
and the equivalent figure adjusted for exceptional items.
12 months 17 months 12 months
to 31 Dec 2018 to 31 Dec 2017 to 31 Dec 2017
(FY-2018) (AP-2017) (FY-2017)
---------------------------- ------------------------ ------------------------ --------------------------
Reported Adjusted Reported Adjusted Reported Adjusted
Table 1 - Financial (audited) (unaudited) (audited) (unaudited) (unaudited) (unaudited)
summary (1) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ---------- ------------ ---------- ------------ ------------ ------------
Revenue 8,019 8,019 10,946 10,946 7,215 7,215
EBITDA (2) (3) 1,071 1,268 645 1,593 384 958
Operating profit (2)
(3) 250 447 (661) 287 (429) 145
Profit after tax (2)
(3) 508 705 (40) 908 58 632
EPS 1.35p 1.88p (0.11)p 2.42p 0.15p 1.68p
Cash inflow from operations
(before W/C adjustments)
(2) 1,073 1,270 1,416 1,903 1,108 1,221
Development costs (861) (861) (1,154) (1,154) (804) (804)
Report building costs (13) (13) (429) (429) (427) (427)
Acquisition costs - - (500) (500) (400) (400)
Net (decrease)/increase
in cash (2) (1,040) (843) (392) 95 80 193
Cash and cash equivalents 1,400 2,393 2,393
Net cash 468 1,759 1,759
Net cash plus net current
receivables 2,503 1,922 1,922
---------------------------- ---------- ------------ ---------- ------------ ------------ ------------
(1) Change in accounting treatment and prior year adjustment
The introduction of IFRS 15 has led to a general reappraisal of
the accounting treatment for inventory costs. For Getech this has
impacted the way we account for costs associated with the building
of Reports. The 2017 accounts have been restated to reflect this
change in treatment.
Inventory assets held previously on the Balance Sheet have been
reviewed and reclassified as Intangible assets. This has minimal
effect on the Income Statement. More significantly, the cost of
building Reports, previously classified as an operational cost in
the Cash Flow statement, are now reclassified as an investment
cost.
Reflective of the lower level of investment in Reports in 2018
versus 2017, this reclassification has resulted in a minor increase
in FY-2018 cash inflow from operating activities before working
capital adjustments of GBP47,000 but the reported cash inflow from
operating activities before working capital adjustments in AP-2017
has increased by GBP823,000 versus the previously reported figure
(FY-2017: a GBP659,000 increase).
(2) Restructuring costs
In Q4 2018, the Group combined its activities in London and
Henley into one new London office, and restructured the Geoscience
Services team (previously based in Henley) to address its declining
revenues and profitability. This resulted in one-off costs of
GBP197,000 during FY-2018 and followed a larger Group-wide
restructuring programme, which was completed in late 2016/early
2017 (AP-2017: GBP487,000, FY-2017: GBP113,000).
(3) Write-down of intangible assets
In the 2017 comparative periods, following management's review
of intangible assets, it was considered prudent to impair the
carrying value of several reports and studies; the cost of which
were carried on the balance sheet. No asset impairments have been
taken in 2018 (AP-2017 and FY-2017: GBP461,000). In the comparative
periods, the impairment has been charged to cost of sales on the
Consolidated Statement of Comprehensive Income and has been
adjusted for in the comparative periods above.
Operating results
Revenue
Revenue for FY-2018 totalled GBP8,019,000, an increase of 11%
from the previous 12 months (AP-2017: GBP10,946,000, FY-2017:
GBP7,215,000). Within this figure, Products revenue grew by 24%,
compounding growth of 19% in FY-2017, and in FY-2018 Products
accounted for 80% of group revenue. In contrast, the Services
market remained challenging and despite our Geospatial and Gravity
& Magnetic Service teams both delivering revenue and profit
growth, a contraction in Geoscience Service income led to a 22%
fall in service division revenue. We restructured our Geoscience
Service activities in Q4 2018 and we are seeing signs of
improvement.
Gross margins
Getech's group gross margin in FY-2018 equalled 47% (AP-2017:
47%, FY-2017: 51% before exceptional intangible asset impairments
of GBP461,000). Underlying this is the continued strong performance
of our products division, partially offset by the continued
challenges of the services market - the gross margin (before
impairments) on product sales equalling 62% for the year (AP-2017:
65%, FY-2017: 70%), the margin on Services moving to a loss
(FY-2018: negative 14% AP-2017: positive 7%, FY-2017: positive 3%).
Getech continues to target a return to a 25% margin for the
Services division in the mid-term.
Product margin fell between FY-2017 and FY-2018 due to a rise in
third party costs, which reflects a year-on-year shift in the sales
mix. This reduced the product margin despite growth in revenues and
a reduction in fixed costs. This does not point to any specific
long-term cost trend.
Table 2 - Gross margin
by reporting segment 12 months to 17 months to 12 months to
31 Dec 2018 31 Dec 2017 31 Dec 2017
(audited) (audited) (unaudited)
-------------------------- -------------------- -------------------- --------------------
Products Services Products Services Products Services
-------------------------- --------- --------- --------- --------- --------- ---------
Revenue 6,434 1,585 7,570 3,372 5,155 2,060
Cost of sales (2,421) (1,810) (2,649) (3,152) (1,564) (1,992)
-------------------------- --------- --------- --------- --------- --------- ---------
Gross profit (before
impairments) 4,013 (225) 4,921 220 3,591 68
-------------------------- --------- --------- --------- --------- --------- ---------
Gross margin (before
impairments) 62% (14)% 65% 7% 70% 3%
Impairment of intangible
assets - - (461) - (461) -
-------------------------- --------- --------- --------- --------- --------- ---------
Gross profit 4,013 (225) 4,460 220 3,130 68
-------------------------- --------- --------- --------- --------- --------- ---------
Gross margin 62% (14)% 59% 7% 61% 3%
In AP-2017 there was Revenue attributed to other segments
totalling GBP4,000 with no costs associated.
Administrative costs
During FY-2018 we maintained fiscal discipline when managing our
administrative costs, which for the year totalled GBP3,341,000; 5%
lower than FY-2017 (AP-2017: GBP4,858,000, FY-2017:
GBP3,514,000).
Currency
Getech's cost base is predominantly in pound sterling, but a
significant proportion of its revenue is denominated in US dollars.
During the year sterling weakness was favourable to the Group, but
the timing of some larger US Dollar transactions resulted in the
Group recording a loss on foreign exchange of GBP39,000 (AP-2017:
GBP77,000 gain, FY-2017: GBP18,000 gain).
EBITDA
Having delivered revenue growth from an operational base that
has been strengthened by a multi-year programme of capital
discipline, Getech expanded its EBITDA to GBP1,071,000 (AP 2017:
GBP645,000; FY-2017: GBP384,000). This however includes
restructuring costs of GBP197,000 (AP-2017: GBP487,000, FY-2017:
GBP113,000) and in 2017, an impairment of intangibles of
GBP461,000.
Taking account of these one-off adjustments, the Group made an
adjusted EBITDA of GBP1,268,000. Year-on-year this is 32% growth
(AP-2017: GBP1,593,000; FY-2017: GBP958,000).
Depreciation and Amortisation
Depreciation and amortisation charges totalled GBP821,000 in
2018 and were allocated to administrative costs in the income
statement (AP-2017: GBP1,306,000, FY-2017: GBP813,000). Whilst
amortisation charges on Globe and software development costs have
increased, a significant proportion of our Data Holdings were fully
amortised, accounting for the overall decrease in amortisation
charge.
Operating profit
The Group reported an operating profit of GBP250,000 for the
year (AP-2017: GBP661,000 loss, FY-2017: GBP429,000 loss). Adjusted
for restructuring costs and intangible asset impairments (discussed
above), Getech delivered an adjusted operating profit of GBP447,000
(AP-2017: GBP287,000 profit, FY-2017: GBP145,000 profit).
Income tax
To help our customers understand and resolve their exploration
and operational challenges requires us undertaking pioneering
research and development. Against the cost of this work we obtained
corporation tax relief, and subsequently realised a current tax
credit for FY-2018 of GBP137,000 (AP-2017: GBP533,000). The
year-on-year reduction in the tax credit is a function of the
Group's increased profitability in 2018.
After taxation, Getech reported a profit of GBP508,000 (AP-2017:
GBP40,000 loss, FY-2017: GBP58,000 profit).
Cost base analysis
In Q4 2018 Getech merged its London and Henley offices and
reduced headcount in the Geoscience Services team. This, combined
with capital discipline, meant that the Group again reduced its
fixed cost base. A change in the mix of sales however resulted in
higher costs to third parties, which has obscured the savings made.
Closure of Henley and the restructuring of Geoscience Services had
an associated cost of GBP197,000 but these steps are expected to
deliver annualised fixed cost savings of GBP500,000.
The table below reconciles our cost base to the financial
statements.
17 months to 12 months to
12 months to 31 Dec 2018 31 Dec 2017 31 Dec 2017
(audited) (audited) (unaudited)
Table 3 - Cost base reconciliation % variance GBP'000 GBP'000 GBP'000
------------------------------------------------- ---------- ------------------------ ------------- -------------
Cost of sales 4,231 6,262 4,017
Development costs capitalised 861 1,154 804
Capitalised cost of building Reports 13 429 427
Impairment of intangibles - (700) (661)
Administrative costs 3,341 4,858 3,514
Restructuring costs 197 487 113
Depreciation and amortisation charges (821) (1,306) (813)
Exchange adjustments 16 7 (18)
Movement on provisions (34) (118) (117)
------------------------------------------------- ---------- ------------------------ ------------- -------------
Cost base 7% 7,804 11,073 7,266
------------------------------------------------- ---------- ------------------------ ------------- -------------
Deduct restructuring costs (197) (487) (113)
------------------------------------------------- ---------- ------------------------ ------------- -------------
Cost base, excluding one-off restructuring costs 6% 7,607 10,586 7,153
------------------------------------------------- ---------- ------------------------ ------------- -------------
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,
non-cash foreign exchange adjustments and fair value
adjustments.
Operating cash flows
Before working capital adjustments Getech generated GBP1,073,000
in cash from operations (AP-2017: GBP1,416,000, FY-2017:
GBP1,108,000). This includes restructuring costs of GBP197,000
(AP-2017: GBP487,000, FY-2017: GBP113,000). Adjusted for
restructuring costs, cash from operations would have been
GBP1,270,000 (AP-2017: GBP1,903,000, FY-2017: GBP1,221,000).
Note however, that as highlighted in Note 1 to Table 1, the
reclassification of expenditure on Reports from operational costs
to investment costs has led to a significant upward restatement in
operating cash inflow in AP-2017 and FY-2017. Net of the Group's
expenditure on producing Reports, adjusted cash flows generated
from operations totalled GBP1,257,000 (AP-2017: GBP1,474,000,
FY-2017: GBP794,000).
Changes in working capital
During the year there was significant movement in working
capital (FY-2018: GBP1,919,000 negative movement, AP-2017:
GBP160,000 positive movement, FY-2017: GBP472,000 positive
movement). A large proportion of this movement was due to the
timing of a high value sale of data and products towards the end of
2018, which is included in the receivables balance at the year
end.
Cash taxation
Getech received cash tax credits totalling GBP514,000 during
2018 (AP-2017: GBP467,000, FY-2017: GBP437,000) as a result of
Getech's continued investment into research and development. Getech
expects cash tax credits to be lower in 2019 due to the Group's
increased profitability in 2018; Getech's current tax asset
provision at 31 December 2018 is GBP104,000 (31 December 2017:
GBP490,000).
Investment and Capital Expenditure
In line with the Group's strategy to invest and enhance its
product offering, development expenditure on Globe and Software
increased to GBP861,000 (AP-2017: GBP1,154,000, FY-2017:
GBP804,000). Getech expects to continue with this level of
investment in its products throughout 2019.
A repositioning of the work of the Geoscience Information
Products team meant that in 2018 expenditure on Report building
fell to GBP13,000 (AP-2017: GBP429,000, FY-2017: GBP427,000).
Financing
During the year Getech refinanced its long-term loan that was
reaching maturity. This involved repaying the outstanding amounts
on the expiring loan, which totalled GBP634,000 and drawing down a
new loan facility of GBP950,000. At the year end, Getech had made
repayments of the new loan totalling GBP19,000. In 2019, GBP113,000
of the loan capital falls due. The new loan facility is repayable
over 5 years and accrues interest at 2.75% above base rate. The
loan is secured against the Leeds office, which has a net book
value of GBP2,388,000.
Liquidity and Going Concern
At the end of 2018, Getech held GBP1,400,000 in cash and cash
equivalents (AP-2017/FY-2017: GBP2,393,000). A fall in cash
balances toward the year-end was due to the timing of sales and at
31 December 2018 Getech held a material net current receivables
balance (current receivables, less current payables) totalling
GBP2,035,000 (31 December 2017: GBP163,000).
At year-end, net cash plus net current receivables (cash, less
borrowings, plus net current receivables) totalled GBP2,503,000 (31
December 2017: GBP1,922,000). Excluding long-term debt, the total
rose to GBP3,322,000 (31 December 2017: GBP2,277,000).
Getech's business activities and the factors likely to affect
its future development, performance and position are set out in the
Chairman's and Chief Executive's 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 detailed cash flow forecasts to 31
December 2020. Following 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 Director
Consolidated Statement of Comprehensive Income
For the 12 months ended 31 December 2018
17 months ended 12 months ended
31 Dec 2017 31 Dec 2017
12 months ended 31 Dec 2018 (Restated) (Unaudited)
GBP'000 GBP'000 GBP'000
-------------------------------------------------- --- --------------------------- --------------- ---------------
Revenue 8,019 10,946 7,215
Cost of sales (4,231) (5,801) (3,556)
Exceptional intangible impairments - (461) (461)
------------------------------------------------------- --------------------------- --------------- ---------------
Gross profit 3,788 4,684 3,198
Administrative expenses (3,341) (4,858) (3,514)
------------------------------------------------------- --------------------------- --------------- ---------------
Operating profit/(loss) before exceptional
administrative expenses 447 (174) (316)
Exceptional administrative expenses:
Restructure costs (197) (487) (113)
------------------------------------------------------- --------------------------- --------------- ---------------
Operating profit/(loss) 250 (661) (429)
Finance income - 2 -
Finance costs (25) (34) (30)
------------------------------------------------------- --------------------------- --------------- ---------------
Profit/(Loss) before tax 225 (693) (459)
Income tax credit 283 653 517
------------------------------------------------------- --------------------------- --------------- ---------------
Profit for the year attributable to owners of the
Parent Company 508 (40) 58
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Currency translation differences on translation of
foreign operations 36 (10) 7
------------------------------------------------------- --------------------------- --------------- ---------------
Total comprehensive income for the year attributable to
owners of the Parent Company 544 (50) 65
------------------------------------------------------- --------------------------- --------------- ---------------
Earnings per share
Basic earnings per share 1.35p (0.11)p 0.15p
------------------------------------------------------- --------------------------- --------------- ---------------
Diluted earnings per share 1.33p (0.11)p 0.15p
------------------------------------------------------- --------------------------- --------------- ---------------
All activities relate to continuing operations.
Consolidated Statement of Financial Position
As at 31 December 2018
Company registration number: 02891368
31 Dec 2017 31 Jul 2016
31 Dec 2018 (Restated) (Restated)
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --- ----------- ------------ ------------
Non-current assets
Goodwill 3,428 3,428 3,428
Intangible assets 4,018 3,827 4,015
Property, plant and equipment 3,086 2,499 2,691
Deferred tax assets 305 207 283
--------------------------------------------------------- ----------- ------------ ------------
10,837 9,961 10,417
-------------------------------------------------------- ----------- ------------ ------------
Current assets
Trade and other receivables 4,941 2,121 3,372
Current tax assets 104 490 434
Cash and cash equivalents 1,400 2,393 2,788
--------------------------------------------------------- ----------- ------------ ------------
6,445 5,004 6,594
-------------------------------------------------------- ----------- ------------ ------------
Total assets 17,282 14,965 17,011
--------------------------------------------------------- ----------- ------------ ------------
Current liabilities
Borrowings 113 279 133
Trade and other payables 2,906 1,958 3,549
Current tax liabilities - - 13
--------------------------------------------------------- ----------- ------------ ------------
3,019 2,237 3,695
-------------------------------------------------------- ----------- ------------ ------------
Non-current liabilities
Borrowings 819 355 767
Trade and other payables 565 - -
Deferred tax liabilities 137 194 387
--------------------------------------------------------- ----------- ------------ ------------
1,521 549 1,154
-------------------------------------------------------- ----------- ------------ ------------
Total liabilities 4,540 2,786 4,849
--------------------------------------------------------- ----------- ------------ ------------
Net assets 12,742 12,179 12,162
--------------------------------------------------------- ----------- ------------ ------------
Equity attributable to owners of the Parent Company
Share capital 94 94 94
Share premium account 3,053 3,053 3,053
Merger relief reserve 2,407 2,407 2,407
Share option reserve 183 164 173
Currency translation reserve 25 (11) (1)
Retained earnings 6,980 6,472 6,436
--------------------------------------------------------- ----------- ------------ ------------
Total equity 12,742 12,179 12,162
--------------------------------------------------------- ----------- ------------ ------------
The financial statements were approved and authorised for issue
by the Board of Directors on 3 May 2019.
Dr Stuart Paton
Non-executive Chairman
Consolidated Statement of Cash Flows
For the 12 months ended 31 December 2018
17 months ended 12 months ended
12 months ended 31 Dec 2017 31 Dec 2017
31 Dec 2018 (Restated) (Unaudited)
GBP'000 GBP'000 GBP'000
-------------------------------------------------------------- --- --------------- --------------- ---------------
Cash flows from operating activities
Profit/(loss) before tax 225 (693) (459)
Share-based payment charge 19 67 44
Depreciation and amortisation charges 820 1,306 813
Impairment of intangible assets - 700 661
Loss on disposal of fixed assets - 11 -
Finance income - (2) -
Finance costs 25 34 31
Exchange adjustments (16) (7) 18
------------------------------------------------------------------- --------------- --------------- ---------------
Cash inflow from operating activities before working capital
movement 1,073 1,416 1,108
Movement in working capital:
(Increase)/decrease in trade and other receivables (2,820) 1,251 919
Increase/(decrease) in trade and other payables 901 (1,091) (447)
------------------------------------------------------------------- --------------- --------------- ---------------
Cash (used in)/generated from operations (846) 1,576 1,580
Income taxes refunded 514 467 437
------------------------------------------------------------------- --------------- --------------- ---------------
Net cash (used in)/generated from operating activities (332) 2,043 2,017
------------------------------------------------------------------- --------------- --------------- ---------------
Cash flows from investing activities
Purchase of property, plant and equipment (78) (54) (9)
Development costs capitalised (861) (1,154) (804)
Capitalised cost of Reports (13) (429) (427)
Acquisition costs, net of cash received - (500) (400)
Interest received - 2 -
------------------------------------------------------------------- --------------- --------------- ---------------
Net cash used in investing activities (952) (2,135) (1,640)
------------------------------------------------------------------- --------------- --------------- ---------------
Cash flows from financing activities
Receipt of new loan 950 - -
Repayment of long-term borrowings (652) (266) (266)
Repayment of lease liabilities (29) - -
Interest paid (25) (34) (31)
------------------------------------------------------------------- --------------- --------------- ---------------
Net cash generated from/ (used in) financing activities 244 (300) (297)
------------------------------------------------------------------- --------------- --------------- ---------------
Net (decrease)/increase in cash and cash equivalents (1,040) (392) 80
Cash and cash equivalents at beginning of period 2,393 2,788 2,317
Exchange adjustments to cash and cash equivalents at beginning of
period 47 (3) (4)
------------------------------------------------------------------- --------------- --------------- ---------------
Cash and cash equivalents at end of period 1,400 2,393 2,393
------------------------------------------------------------------- --------------- --------------- ---------------
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2018
Share Share Currency
Share premium Merger relief option translation Retained
capital account reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
At 31 July 2016 94 3,053 2,407 173 (1) 6,436 12,162
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Transfer of reserves - - - (76) - 76 -
Share-based payment charge - - - 67 - - 67
Transactions with owners - - - (9) - 76 67
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Profit for the period - - - - - (40) (40)
Other comprehensive income
Currency translation differences - - - - (10) - (10)
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Total comprehensive income
for the period - - - - (10) (40) (50)
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
At 31 December 2017 94 3,053 2,407 164 (11) 6,472 12,179
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Transfer of reserves - - - - - - -
Share-based payment charge - - - 19 - - 19
Transactions with owners - - - 19 - - 19
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Profit for the year - - - - - 508 508
Other comprehensive income
Currency translation differences - - - - 36 - 36
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Total comprehensive income
for the year - - - - 36 508 544
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
At 31 December 2018 94 3,053 2,407 183 25 6,980 12,742
--------------------------------- -------- -------- ------------- -------- ------------ --------- --------
Notes to the Consolidated Financial Statements
For the year ended 31 December 2018
Corporate Information
Getech Group plc (the 'Company' and ultimate Parent of the
Group) is a public limited company domiciled and incorporated in
England and Wales. The Company's registered office and principal
place of business is Kitson House, Elmete Hall, Elmete Lane, Leeds,
LS8 2LJ.
The principal activity of the Group is to provide geoscience and
geospatial products and services that companies and governments use
to de-risk their exploration programmes and improve their
management of natural resources.
Basis of preparation
The financial statements set out in this preliminary
announcement do not constitute statutory accounts as defined by
section 434 of the Companies Act 2006. It has been prepared in
accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS) adopted for use
in the European Union, including IFRIC interpretations issued by
the International Accounting Standards Board, and in accordance
with the AIM rules and is not therefore in full compliance with
IFRS. The principal accounting policies of the Group have remained
unchanged from those set out in the Group's 2017 annual report. The
financial statements have been prepared under the historical cost
convention and are presented in sterling.
Statutory accounts for the years ended 31 December 2018 and 31
December 2017 have been reported on by the Independent Auditor. The
Independent Auditor's Reports on the Annual Report and Financial
Statements for the periods ended 31 December 2018 and 31 December
2017 were unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2018 were
approved by the board on 3 May 2019 and the information included in
this preliminary announcement was extracted therefrom.
The Directors have instituted regular reviews of trading and
cash flow forecasts and have considered the sensitivity of these
forecasts with regards 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.
The current period covers a 12-month period from 1 January 2018
to 31 December 2018. The comparative period was 17 months. To aid
analysis we include unaudited financial comparators in the main
financial statements for the 12 months ended 31 December 2017.
These comparators were derived by deducting the five-month period
to 31 December 2016 unaudited management accounts from the audited
17-month period to 31 December 2017.
The annual report will be posted to shareholders and available
on the website from 29 May 2019.
Dividends
There is no final dividend proposed for the year ended 31
December 2018.
12 months ended 17 months ended
31 Dec 2018 31 Dec 2017
GBP'000 GBP'000
------------------------------------------------------------------------------------ --------------- ---------------
Paid during the year
No final dividend in respect of the year ended 31 December 2017 (2016: GBPnil per
share) - -
- -
------------------------------------------------------------------------------------ --------------- ---------------
Earnings Per Share
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.
12 months ended 17 months ended
31 Dec 2018 31 Dec 2017
---------------------------------------------------------- --------------- ---------------
Profit/(loss) attributable to equity holders of the Group GBP508,000 GBP(40,000)
Weighted average number of Ordinary Shares in issue 37,563,615 37,562,454
Basic earnings per share 1.35p (0.11)p
Diluted earnings per share 1.33p (0.11)p
---------------------------------------------------------- --------------- ---------------
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 December 2018 is 738,949 (2017: 629,707).
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 29
May 2019 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 25 June 2019 at 12
noon.
[1] Adjusted earnings before interest, tax, depreciation and
amortisation, adjusted for exceptional items as detailed in the
financial review.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BBGDUISGBGCU
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