REG - GETECH Group plc - Trading Update

GetechAnnouncement

15/12/2023 07:00

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RNS Number : 9022W  GETECH Group plc  15 December 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN

 

15 December 2023

Getech Group plc

("Getech" or the "Company")

Trading Update

 

Getech (AIM: GTC), a world-leading locator of subsurface resources, provides
the following trading update for the financial year ending on 31 December
2023, outlining the current trends both positive and negative which are
expected to be reflected in the Company's trading performance for the year.

Over the last 2-3 months, there has been a growing level of caution amongst
the Company's client base, of which typically 85% are based outside the UK,
due to the more challenging economic and unstable political environment around
the world. The result has been that a number of projects expected to commence
in this financial year are now expected to occur in 2024. As a consequence,
annual sales for the current financial year are expected to be in the order of
£4.0m to £4.4m.

While revenue levels are expected to be below market expectations for 2023,
demand for the Company's services and data into 2024 and beyond is increasing.

The Group's orderbook currently stands at £3.7 million (30 June 2023 £4.4m).
Of this, approximately half is expected to convert into revenues recognised in
2024.

As announced in September with the half-year results, the Company has
re-focused its strategy on to the core business of locating sub-surface
resources and, in doing so, expects to reduce annual running costs by £2m of
which £1.3m will benefit the current year.

A significant element of the cost reduction programme is coming from scaling
back the personnel involved in the H2 Green projects and instead utilising
Getech's existing management team for these functions. The Company continues
to develop the H2 Green projects in line with market demand and is actively
seeking potential equity partners for the projects.

The Company is focused on managing working capital to maintain a positive cash
position with a number of initiatives already underway, including a
monetisation of Kitson House, accessing receivables finance, a focus on
near-term cost budgets, further reductions in the cost base during 2024
and the conversion of significant sales prospects and the order book. The
target is to be cash-flow positive from operations in 2024.

Investment in marketing in 2023 has increased and, as a result, the Company
has developed a substantial pipeline of projects across all key sectors
including petroleum, critical minerals and battery metals and geothermal. The
pipeline of opportunities is the strongest in recent history and gives the
Board confidence as Getech moves into 2024.

In August, the Company added natural hydrogen as a new search genome to the
Globe platform. Since then, the Company is pleased to have completed its first
commercial project comprising the screening of 32,000 km2 in Eastern Europe
for the mineral systems that produce natural hydrogen. This project has become
a valuable case study for further work from prospective customers.

Getech will continue to add and refine new genomes to the Globe platform to
support the exploration of sub-surface projects vital to the energy
transition. These include carbon storage, critical minerals, battery metals
and geothermal. The easy-to-find near surface projects for these resources
have largely been completed. To meet the expected supply requirements of the
energy transition, there is a significant global shortfall which Getech's
customers are looking to address through new exploration projects. Globe is
key to this search, helping companies significantly de-risk and reduce the
cost of new exploration.

Getech also continues to use the Globe platform to facilitate global
screenings for major industrial companies looking for subsurface resources
such as geothermal and carbon capture & storage solutions to decarbonise
their industrial processes. Two recent assignments for large multi-national
companies have been completed both of which are expected to lead to follow-on
projects. The Board considers this a significant growth area for the business
as companies that have committed to net-zero tackle their harder to abate
emissions.

Richard Bennett, acting CEO said, "While understandable, it is disappointing
that projects that we had anticipated monetising during H2 2023 are now moving
into 2024. The upgrading of the Globe platform to support the location of
future facing commodities such as copper, lithium and natural hydrogen,
continues apace. These resources are the growth drivers for Getech and while a
small part of the revenue base today, we expect them to grow significantly."

For further information, please contact:

 

 Getech Group plc

 Richard Bennett, CEO                               Tel:  0113 322 2200

 Cenkos Securities plc

 Neil McDonald / Pete Lynch (Corporate Finance)     Tel:  0207 397 8900

 Michael Johnson / Dale Bellis (Sales)

 Novella Communications                             Tel: 0203 151 7008
 Tim Robertson / Claire de Groot / Safia Colebrook
 getech@novella-comms.com

 

Notes to editors:

 

Getech Group plc (AIM: GTC) applies its world-leading geoscience data and
unique geospatial software products to accelerate the energy transition by
locating, developing and operating geoenergy and green hydrogen projects.

 

For further information, please visit www.getech.com (http://www.getech.com/)
.

 

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