5th Apr 2016 09:14
LONDON (Alliance News) - Getech Group PLC on Tuesday said it swung to an interim loss as revenue fell amid delays to orders within a tough oil and gas market environment.
Getech, which provides data, studies and services to the mining and oil and gas sectors, said its pretax loss for the half year to the end of January was GBP704,000, compared to a GBP707,000 profit a year earlier.
Revenue for the half fell to GBP3.3 million from GBP3.6 million, with a number of significant sales deferred as oil and gas clients look to keep a cap on spending amid the low oil price. Getech's swing to loss was driven by a substantial deterioration in its gross margin in the half. Despite revenue falling, cost of sales for the company jumped to GBP2.0 million from GBP1.1 million.
On a more positive note, Getech said it has made a good start to the second half and secured a new USD1.0 million contract in April, most of which will be delivered in the current financial year.
In addition, the group has made significant cost cuts in the first months of 2016 in order to better position it within the difficult operating conditions.
"The directors are also optimistic that a number of other opportunities which either did not complete in the first half or have been generated recently, will complete in the second half year," said Chairman Stuart Paton, though he cautioned it remains uncertain when any sustained recovery in the oil price will emerge.
Getech shares were flat at 29.50 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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