News blog
GETECH Group
- BY: Andrew Hore |
- POSTED: 04/04/2010 |
Oil exploration data services provider GETECH Group is still waiting to see any benefit from an uplift in oil exploration expenditure.
Revenues slumped from £2.42m to £1.17m in the six months to January 2010. That meant that a profit of £187,000 was turned into a loss of £392,000. This was despite a positive contribution from the US business, Lisle. Staff took pay cuts during the period but the former pay levels have been reinstated.
There was net cash of £7,000 at the end of January 2010. Net tangible assets are £3m - including a property worth £2m. At 12.5p a share, GETECH is valued at £3.6m.
Client budgets were reduced in 2008 but the stabilisation of the oil price has helped to create a more positive outlook for 2010. However, gas prices are still weak. There are more opportunities for contracted work on specific exploration studies.
Six new geological studies are due to be launched in the second half of the year to July 2010. The Equatorial Atlantic Phase I study has already achieved four sales and there are two pre-sales for Phase II. The South Atlantic study has seven sales and the East African one a further four sales.
House broker WH Ireland has downgraded its full year forecast from breakeven to a £200,000 loss. Selling an additional study could have a significant positive effect on the outcome for the year.
Management says that it will restore the dividend but GETECH will need to generate cash before this happens.
At 12.25p a share, GETECH is valued at £3.58m.
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