News blog

GETECH Group

  • BY: Andrew Hore |
  • POSTED: 29/10/2013 |

Geological information and services provider GETECH Group reported better than expected annual figures and house broker WH Ireland has upgraded its current year forecast.

The oil and gas price remains high enough to generate strong demand for GETECH’s services. In the year to July 2013, revenues increased by one-quarter to £8.01m, while pre-tax profit jumped from £1.25m to £2.25m. The final dividend was doubled to 1.6p a share, taking the total for the year to 2p a share, against 1p a share last time.

Net cash was £4.74m at the end of July 2013. The business is highly cash generative and capital investment requirements are minimal. The final dividend will cost around £500,000.

At 89p a share, up 10.5p, GETECH is valued at £26.8m.

WH Ireland has increased its 2013-14 profit forecast from £2.25m to £2.39m, which values the shares at less than 15 times prospective earnings. The forecast dividend has been increased from 1.5p a share to 2.1p a share and there is scope for that dividend to be higher.

The Globe product provides an element of recurring revenues and five further sponsors were added during the year taking the total to 10. An Earth Systems Model covering climate, tide and predictive modelling was recently added to the product. The multi-client backed Cryosat project to improve the resolution of satellite data has been converted to a full global study which will generate more than £500,000 over a three year period. There has also been growth in consultancy demand.

Even so, one-off sales are still important to the business so revenues can still be lumpy even if they are not as lumpy as a few years ago. This makes longer-term forecasting difficult. A recently announced data products sale will generate $864,000 in the first half of this year.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFOctober2013_49.pdf

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