24th Mar 2015 08:52
LONDON (Alliance News) - Geoscience services company GETECH Group PLC on Tuesday saw its shares rise in early trade after it reported better pretax profit and revenue for the first half of its financial year and as it said it has struck a deal to buy upstream oil and gas consultancy ERCL Ltd.
GETECH said its pretax profit for the six months to the end of January was GBP707,000, compared to a GBP233,000 profit a year earlier. Revenue increased to GBP3.6 million from GBP3.1 million, though the company said "inertia" within the oil and gas market meant a slowdown in major sales in the half, which was offset by strong demand for consultancy work.
GETECH, which provides data, studies and surveys to the oil and gas and mining exploration sectors, said its business was hit in the first half by difficult market conditions. It echoed most other oil and gas services companies in saying the cuts made to capital expenditure plans by oil and gas explorers in response to the fall in the oil price are hurting the services industry. It said it would retain a cautious stance for the second half, given the continued low oil price.
But the rise in profit in the first half, in spite of the tough market conditions, meant the company has proposed a small hike to its interim dividend to 0.46 pence per share from 0.44 pence a year earlier.
In a separate statement Tuesday, GETECH said it has struck a deal to acquire upstream oil and gas consultancy ERCL for an undisclosed amount. GETECH said it expects the deal to complete on April 7, conditional on payment of the consideration.
GETECH said the deal would expand its presence in basin and block scale evaluation work, where it sees higher expenditure and more focus on drilling risk reduction.
"We start the second half of our year with strong cash balances and a substantial pipeline of sales opportunities," said Chairman Stuart Paton.
GETECH shares were up 13% to 49.00 pence in early trade, one of the best performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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