7th May 2019 12:03
LONDON (Alliance News) - Geosciences services firm Getech Group PLC said Tuesday it had swung to a profit in 2018 as costs subsided, despite revenue falling amid constrained budgets in the natural resources sector.
In 2018, the firm swung to a GBP225,000 pretax profit from a loss of GBP693,000 the year prior. This was despite revenue falling 27% to GBP8.0 million from GBP10.9 million the year before.
Profit performance was helped by a general reduction in costs in line with reduced revenue as well as the non-recurrence of a GBP461,000 intangible impairment booked in 2017 and a fall in restructure costs to GBP197,000 from GBP487,000 the year before.
"In 2018, crude prices strengthened year-on-year, but price volatility left customer exploration and new business budgets constrained," Getech Chair Stuart Paton and Chief Executive Officer Jonathan Copus said. "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."
Getech did not propose a dividend for 2018, in line with the year prior. The firm does, however, see the "potential to reinstate dividend payments" after having last made a payment in 2015.
"We have entered 2019 with a busy schedule of sales campaigns and we consider Getech to be well positioned to deliver diversified organic growth," Paton and Copus added. "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 USD60 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," the pair added, "the lengthening of the sales cycle that emerged in the fourth quarter of 2018 has persisted into 2019; the directors believe that customers remain cautious over the early release of their exploration and new business budgets.
Shares in Getech were 3.0% lower at 29.10 pence on Tuesday.
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