REG - GETECH Group plc - Final Results
05/06/2023 07:00
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RNS Number : 5703B GETECH Group plc 05 June 2023
5 June 2023
Getech Group plc
("Getech" or the "Company")
Final Results for the 12 months ended 31 December 2022
Getech (AIM: GTC), the geoenergy company and owner of hydrogen developer, H2
Green, is pleased to announce its Final Results for the 12 months ended 31
December 2022.
Financial Highlights
· Double-digit revenue growth, ahead of market expectations: £5.1
million (FY2021: £4.3 million) with a 66%/23% split between transitional
petroleum and critical minerals
· Record orderbook: £4.6 million, a 39% increase (31 December
2021: £3.3 million)
· Annualised recurring revenue: up 14% to £2.4 million (FY2021:
£2.1 million)
· Strong cash position: £4.3 million at 31 December 2022, with
cash held flat across H2 2022 by sales momentum and careful capital management
(31 December 2021: £5.9 million)
Operational Highlights
· 42% YoY increase in the number of software subscriptions sold
· New solutions developed to locate copper, gold, cobalt and helium
· $900k largest-to-date critical minerals contract, with a
multi-mineral global mining company
· Strategic partnership with global geothermal technology company
Eavor to jointly locate and appraise a portfolio of geothermal projects in
Latin America (post-period end)
· First contract for integrated decarbonisation solution for a
global FMCG company (post-period end)
· Wholly owned subsidiary, hydrogen developer H2 Green progress:
o Dr Graham Cooley appointed as H2 Green's Chair. As the former CEO of ITM
Power, Graham played a key role in transforming ITM Power into a hydrogen
market leader (post-period end)
o Inverness Green Hydrogen Project has been selected for a UK Government grant
from its Net Zero Hydrogen Fund (post-period end)
o At Shoreham Port, H2 Green increased phase 1 capacity from 0.8 tonne/day to
2.5 tonne/day due to bigger local demand and extended its commercial
exclusivity to 2027
Outlook
· Strong balance sheet, sales pipeline growth, plus good customer
and partner momentum
· Work to sell Kitson House is progressing
· The macro environment outlook remains strong for Getech with its
clear focus on the energy transition
Richard Bennett, Getech Executive Chairman, commented:
"As we transition to clean energy, the importance of geoscience in solving the
energy "trilemma", the quest for affordable, clean and secure energy source,
is undisputed. Getech has spent the last 30 years collecting and analysing
data primarily for use within the petroleum sector, but we are now making a
strategic shift to evolve our solutions and our client base to encompass a
much wider range of corporates looking to reduce their carbon footprint.
Strong revenue performance and a record order book in 2022 reflects a robust
environment for petroleum market activities alongside new corporate demand to
use our data to identify critical minerals, geothermal and hydrogen locations,
as well as CCS projects. We have a very promising pipeline of opportunities
and are excited about the potential for developing our portfolio in 2023."
Richard Bennett will provide a live investor presentation relating to the
financial results via the Investor Meet Company (IMC) platform on Thursday, 8
June 2023 at 10.00am UK time.
Investors can sign up to Investor Meet Company for free and add to meet Getech
via:
https://www.investormeetcompany.com/getech-group-plc/register-investor
(https://www.investormeetcompany.com/getech-group-plc/register-investor)
Chairman's Statement
This is my first statement as Executive Chairman of the Company since my
appointment in February following the resignation of Dr Jonathan Copus. The
Board and I would like to thank Jonathan for his seven years of service. Two
years ago, Getech made the strategic shift to also sell its subsurface global
knowledge to industries outside of the oil and gas sector. The success of this
shift in focus is reflected in our excellent financial performance with
revenues up 19% to £5.1 million, together with a record order book up by 39%
to £4.6 million alongside maintaining a strong cash position of £4.3
million.
Historically, Getech generated 90+% of income from the oil & gas sector,
whereas this proportion now stands at 66% as new demand for our services
across a much broader corporate landscape increases. This demand for our
services is being driven by the energy transition to clean energy, as
companies need to locate new materials and find new sources of energy. They
also need our data to know where to look for them underground.
It is clear that there is a valuable commercial opportunity in front of Getech
involving different markets and companies with very different capabilities
compared to our historic client base. Getech therefore needs to adapt its
commercial model to support those companies and to participate fully in the
upside of the global energy transition.
Strategic Shift
In 2021, we devised a strategy to align our core competencies with the energy
transition. It was a logical step, with subsurface knowledge being
instrumental in most decarbonisation paths - from finding critical minerals to
locating sources of geothermal energy. Today, we can confidently state that it
was the right decision and well executed by Getech's team.
In 2022, 23% of sales came from critical minerals solutions. The phrase
'metals are the new oil' is now commonly used, as low carbon technologies
require significantly more metals than fossil fuel-based ones. The production
of metals must increase four-fold in the next 20 years, potentially rivalling
crude oil production. To achieve this, substantial investment is required but
also a radically new approach to mineral exploration. There is therefore a
clear opportunity and need for Getech's extensive data on 400 million years of
Earth's evolution, in helping to locate critical minerals in previously
unexplored territories.
In 2023, we are selling our data and expertise to an even wider range of
customers, from consumer goods to computing services companies, all looking to
become energy self-sufficient. With the war in Ukraine and the energy and
climate crisis, large corporates are investing in taking control of their
energy needs, exploring ways to power their operations with geothermal,
hydrogen, wind or solar energy sources in proximity to their sites.
Positioned to Support New Market Entrants
According to a non-profit net zero tracker, 91% of the global economy is now
covered by net zero pledges by corporates. Government commitments globally
have further boosted the market led by the US Inflation Reduction Act and EU
Green Deal Industrial Plan, reinforcing the ever-growing demand for subsurface
expertise.
There is no line of business that will remain unaffected by climate or energy
challenges and Getech is well-positioned to assist, providing expertise
through 4 operational hubs:
Critical Minerals Metals and Mining companies need to locate significant volumes of critical
minerals and battery metals, such as Lithium, Cobalt, Copper & Gold
Geothermal (includes Corporate decarbonisation) Assessing and locating sites that are highly prospective for low-carbon
geothermal energy for geothermal companies and any company looking to generate
power from land they own to meet net zero targets
H2 Green Wholly owned hydrogen project developer and operator of two projects in
Inverness and Shoreham Port
Transitional Petroleum Locating oil & gas and carbon capture and storage opportunities for global
energy companies who are decarbonising their products
Having concluded the year with a record order book, we have an even more
promising pipeline of opportunities. Specifically, the Company is seeking to
support the expanding customer base on a long-term basis working on each
project with, using a flexible revenue model that could range from encompass
selling data on a subscription basis toto working on a longer -term basis on
selective projects using on an asset participation basis. A portfolio
appraisal, based on future asset participation and/or royalty revenue streams,
is expected in time to become a central part of Getech's value.
The Getech advantage
Given the size and substantial value of the energy transition market, there is
increasing competition. However, Getech has natural advantages having spent
the last 30 years meticulously collecting data, refining analytics, testing
hypotheses and building relationships. We use AI and machine learning in our
work, but our core strengths lie in our unique data and exceptional team with
the knowledge and vision to use that data to address specific energy
challenges. Entering our market without a similar depth of experience is
challenging.
Relationships are key and the team is proud to count most blue-chip energy
companies among its long-standing clients. In these partnerships, we
contribute our extensive exploration expertise and deep understanding of
subsurface challenges, while our partners bring their cutting-edge operational
capabilities and innovative technologies. As a result, we are not only seen as
a trusted partner, but we have also cultivated a vast network of complementary
skills and expertise.
Among the new partners we've signed after the reporting period is the global
geothermal technology company Eavor.
H2 Green
H2 Green has an exciting portfolio of hydrogen and renewable energy projects
and to maximise its potential as a 'pure play' UK project developer, one of my
first actions as Executive Chairman was to appoint Dr Graham Cooley as H2
Green's Chair. As the former CEO of ITM Power, Graham played a crucial role in
transforming the company into a hydrogen market leader. That Graham accepted
the role, reflects well on H2 Green and its future potential. With experience
in the sector and working with the UK government, Graham brings invaluable
expertise to support H2 Green's expansion and development.
Corporate governance
I would like to emphasise that at Getech, we place great importance on
corporate governance, aiming to maintain a high level of transparency and
accountability. We believe that effective governance is crucial for the
long-term success and sustainability of our business. We value open
communication and robust engagement with our shareholders, understanding that
their support is fundamental to our success. To that end, we are committed to
fostering a constructive dialogue with our investors, ensuring they receive
timely and accurate information about our business, performance, and
prospects.
Outlook
I am very optimistic with regard to Getech's future as I believe the business
is naturally well placed to seize opportunities within the rapidly evolving
energy and climate tech landscape.
In the upcoming year, we will continue to focus on growing and diversifying
our revenue streams. While remaining financially prudent, we will also
continue to invest in research and development to ensure that our products and
services remain at the forefront of the industry, allowing us to provide the
best solutions for our clients as they navigate the energy transition.
In conclusion, I would like to express gratitude to our shareholders, partners
and employees for their unwavering support and dedication and that with your
continued support we will continue to achieve great success in our pursuit of
a sustainable and prosperous future.
Richard Bennett
Executive Chairman
Operational Review
Getech has had a successful year, showcasing significant progress in all
operational areas. The company maintained high petroleum customer retention
rates while repurposing its data, software and analytics to identify critical
minerals and ideal locations for geothermal, hydrogen and carbon capture and
storage (CCS) projects. In 2022, customers purchased Getech's latest energy
transition solutions to locate copper, gold, cobalt and helium; manage carbon
storage licensing rounds; and explore for geothermal energy.
Business Overview
Getech's strategy focuses on monetising its proprietary data and expertise
through subscription sales, solutions and selective asset participation. We
generate revenue by locating new energy and mineral resources using our
proprietary Earth digital twin, called "Globe". Developed over nearly 13
years, Globe uniquely models Earth's evolution over the past 400 million
years, combining extensive data with a user-friendly software interface. Its
integrated geological, climatic and oceanographic data offer valuable insights
for locating natural resources in the subsurface. These solutions are provided
in an accessible digital map format using energy industry standard geographic
information system technology.
Getech's subsurface expertise is crucial for numerous net zero strategies,
positioning the company to advance decarbonisation across multiple industries.
Transitional Petroleum and CCS
In response to a renewed focus on energy security, Getech saw a strong
recovery in its petroleum market activities in 2022, accompanied by an
expansion into the emerging CCS sector. CCS is crucial for achieving net-zero
targets by capturing carbon dioxide emissions from industrial processes and
storing them safely underground. Integrating CCS into our portfolio allows us
to expand our engagement with our key oil and gas customers while working to
reduce the carbon footprint of industrial sectors as part of the energy
transition. Getech's solutions were employed by the North Sea Transition
Authority to support the UK's first carbon storage licensing round and we also
gained new software customers in the carbon storage sector.
Getech's work in exploration, development optimisation and operational spatial
management has resulted in Getech adding two new Globe customers - including a
global supermajor energy company - and a 42% YoY increase in software
subscriptions. In addition to new software sales in the petroleum exploration
market, Getech expanded its customer base in the US onshore shale gas
operations and investment banking sectors. A key strategic contract with a
major energy company joint venture was renewed for multiple years, ensuring
strong future revenue visibility.
Critical Minerals
Crucial to electrification required for the energy transition, the copper
market has an expected supply gap of 7.8 million tonnes by 2030. Getech's
unique data and analytics are ideal for discovering new sedimentary-hosted
copper deposits in unexplored areas, which account for only about 20% of total
copper production today. However, this source is more widely distributed than
others and can be processed with a lower carbon footprint. Additionally, 80%
of cobalt, a key component of batteries that also plays a critical role in the
energy transition, comes from sediment-hosted copper mines.
In 2022, Getech sold its sediment-hosted copper solution to three critical
minerals companies, producing high-confidence targeting maps for unexplored
areas in Australia, North America and Canada. Based on this work, some of
these companies have licensed significant land positions for mineral
exploration, demonstrating the value-add of Getech's unique offering. These
companies have also become repeat customers.
Furthermore, Getech secured its largest-ever critical minerals contract, a
$900,000 data and software deal with a multi-mineral global mining company.
Getech has also expanded its copper solutions into iron oxide-copper-gold and
epithermal gold deposits. Getech delivered data and analytics to Helium One -
a native helium explorer - and advanced R&D work on solutions to predict
the location of lithium and natural ("white") hydrogen resources. Getech
anticipates bringing these new solutions to market in 2023.
H2 Green
H2 Green Ltd, a Getech subsidiary, designs and develops green hydrogen hubs in
the UK. Utilising renewable power, these hubs produce hydrogen for
decarbonising transport and industry. Post year end, Dr Graham Cooley has been
appointed as H2 Green's Chair. As the former CEO of ITM Power, Graham played a
key role in transforming the company into a hydrogen market leader. With
experience in the cleantech sector and ties to the UK government, Graham
brings valuable expertise to H2 Green's expansion and development.
Inverness Project
H2 Green is currently developing a major green hydrogen hub in central
Inverness. The project encompasses green hydrogen production, storage,
dispensing and on-site renewable energy generation. Initially, the hub will
supply green hydrogen to key Scottish rail, bus and HGV transport customers,
supporting their decarbonisation efforts. This marks the first phase of H2
Green's green energy Highlands network, which will also distribute surplus
hydrogen from the Inverness hub to a broader region.
The hydrogen facility will scale from a 6 MW alkaline electrolyser capacity
(equivalent to generating up to 2.5 tonnes of green hydrogen per day) to more
than 10 tonnes per day (equivalent to 24 MW) over time. The facility will
utilise wind and/or solar PV renewable energy generation assets and be backed
by a grid-connected renewable energy supply.
In 2022, H2 Green's partner, SGN, completed the deconstruction of Inverness's
former gas holder, paving the way for converting the site into a green
hydrogen storage and distribution facility. After the reporting period, the
project was chosen to receive a UK Government grant from the Net Zero Hydrogen
Fund - Strand 1 Development Expenditure.
Shoreham Port Project
Expanding into the port and maritime energy sector, H2 Green secured exclusive
development rights for hydrogen, renewable energy and importing ammonia at
Shoreham Port in West Sussex to establish a green energy hub.
In 2022, after completing engineering and commercial feasibility work,
Shoreham Port extended H2 Green's exclusivity on all hydrogen, ammonia and
renewable energy activities until August 2027. Due to faster-than-anticipated
growth in hydrogen demand - supported by offtake pledges, letters of intent
and MoUs - H2 Green increased the Phase 1 design capacity from 0.8 tonnes/day
to 2.5 tonnes/day and started planning Pre-FEED (Front End Engineering Design)
studies.
The macro environment continues to be supportive for hydrogen development,
with the UK hydrogen strategy targeting 10GW of low carbon hydrogen production
capacity by 2030.
Geothermal and Corporate Decarbonisation
Getech's subsurface expertise combined with advanced analytics enables the
rapid and cost-effective identification of locations that are potentially
prospective for geothermal energy. In 2022, Getech successfully completed
projects for clients on multiple continents and expects continued expansion of
its geothermal offering, given the projected double-digit annual growth rate
towards 2030 in geothermal energy investments.
In January 2023 Getech and Eavor - a global geothermal technology company -
signed a strategic partnership to jointly locate and appraise a portfolio of
geothermal projects in Latin America. Eavor was already a customer of Getech's
data and services, and through this work Getech has generated revenue and
demonstrated its geothermal expertise. This has now translated to an
asset-based partnership that is broader, more strategic and more valuable for
both parties.
Eavor has attracted venture capital funding from BP, Chevron and BHP (all
customers of Getech petroleum and/or mineral exploration solutions) and
recently secured development financing, totalling up to €1bn, for the
development of at least five geothermal projects in North America and Europe.
Getech also offers tailored decarbonisation solutions that help customers
replace high-emission energy sources with low-carbon alternatives, such as
geothermal, green hydrogen, CCS, wind and solar energy. These solutions
include global screening of manufacturing sites and logistics operations, as
well as location-specific feasibility studies. With expertise in geospatial
energy optimisation, Getech can determine the most efficient approach to lower
the emissions of assets. Our new integrated decarbonisation solution is
valuable for many industries and will help us to grow and diversify our
revenue streams.
Post-period end, Getech completed a geothermal screening project for the
manufacturing sites of a multinational FMCG company. We rapidly ranked c.130
sites worldwide based on their potential to replace current energy consumption
with geothermal energy for decarbonisation purposes. The ranking was
determined through the evaluation of numerous subsurface and above-ground
factors. In addition to assessing the geothermal potential of each site,
Getech provided a comparison against the relative potential for solar and wind
energy.
We believe there are many industries that could benefit from our integrated
decarbonisation solution - from consumer goods, manufacturing, to logistics
companies. Our proprietary data and unparalleled expertise in applying
geoscience and geospatial analytics to solve specific energy challenges makes
Getech a perfect partner in the net zero transition.
Outlook
Goldman Sachs has forecast that resolving the dual challenge of energy
affordability and security, across both clean energy and hydrocarbons, will
require a $1 trillion per year increase in energy investment. At the same
time, the incremental cost of achieving net zero carbon continues to improve,
making it more financially attractive. The US Inflation Reduction Act is
potentially the most transformational policy in clean tech, making green
hydrogen, carbon capture and geothermal energy some of the more cost-effective
paths for energy transition in the US. Meanwhile, the European Union has
launched its Green Deal Industrial Plan, aiming to become the world's first
climate-neutral continent by 2050 and reduce emissions by at least 55% by
2030. The UK Government has updated its net-zero strategy, allocating a £20
billion budget for capturing and storing CO2 beneath the North Sea, as well as
investing in hydrogen, offshore wind and expanding the electric vehicle
charging network.
Getech's corporate strategy reflects this underlying trend and focuses on
monetising the company's core capabilities in the most efficient and valuable
ways. We are investing to evolve our offerings and unique propositions,
growing our order book, expanding our pipeline and are confident in the
outlook for the business.
Chris Jepps
Chief Operating Officer
Financial Review
In 2022, Getech remained committed to growth and diversification by
strategically investing in sales, business development, and marketing
initiatives. This focus has yielded a significant revenue growth of 19%,
building on the 20% growth achieved in 2021. Our efforts have culminated in a
record order book of £4.6m, reflecting a substantial 39% growth.
Additionally, our Annual Recurring Revenue (ARR) has increased by 14% to
£2.4m, thanks to the addition of new Globe and other software customers,
further strengthening our financial position and setting the stage for
continued success.
Table 1 - Financial summary 2022 2021
Reported Reported Adjusted ((1)) (unaudited)
(audited) (audited)
£'000
£'000
£'000
Revenue 5,070 4,280 4,280
Cost base (see table 3) 7,915 6,455 6,455
Loss after tax (2,828) (1,949) (1,649)
Earnings per share (4.21)p (3.27)p (2.77)p
Net cash outflow from operating activities (468) (799) (799)
Development costs (785) (847) (847)
Net (decrease)/increase in cash (1,645) 3,665 3,665
Cash and cash equivalents 4,322 5,864
Net cash 3,642 5,095
Orderbook 4,591 3,333
Annualised recurring revenue 2,409 2,094
(1) Exceptional items
In 2021 Getech incurred a one-off amortisation charge of £300,000 related to
the acquisition of H2 Green Limited.
Revenue
In 2022, Getech signed over 100 new contracts with a total value of £6.5
million, driving a 19% increase in revenue to £5.1 million (2021: £4.3
million). This marks the second consecutive year of double-digit revenue
growth since Getech completed its £6.25 million equity raise in 2021.
Transitional petroleum accounted for 66% of revenue, while critical minerals
contributed 23%. The Company aims to further diversify its revenue streams.
A significant portion of this growth has been license-based and recurring in
nature. In 2022, the number of software licences sold rose by 42% and Getech
secured two new customers for Globe.
Consequently, Getech's order book expanded by 39% to a record year-end
position of £4.6 million (31 December 2021: £3.3 million). Annualised
recurring revenue also increased by 14% to £2.4 million (31 December 2021:
£2.1 million).
Gross margin
Cost of sales included costs associated with the asset development business of
£1.2m (2021: £0.4m), which impacts Group profit margin. However, underlying
profit margins for both products and services were healthy, summarised in the
table below:
Table 2 - Segmental analysis 2022 2021
Revenue Profit/(loss) Gross margin % Revenue Profit Gross margin %
£'000
£'000
£'000
£'000
Products 3,684 2,012 55% 3,509 2,267 65%
Services 1,286 480 37% 771 145 19%
Asset development 100 (1,103) - - (447) -
Group total 5,070 1,389 27% 4,280 1,965 46%
The new reporting segment "asset development" includes the activities of
Getech's subsidiary H2 Green, a green hydrogen developer.
Cost base
Getech's cost base has increased to £7.9m from £6.5m. Table 3 - Cost base
reconciliation shows how our cost base aligns with the financial statements.
In addition to expanding its asset development capabilities through H2 Green,
Getech has invested in its Business Development, Marketing and Sales
capabilities to drive revenue growth in 2023.
Table 3 - Cost base reconciliation % variance 2022 2021
£'000
£'000
Cost of sales 3,681 2,315
Development costs capitalised 785 847
Administrative costs (excluding exceptional items) 4,779 4,733
Depreciation and amortisation charges (excluding exceptional items) (1,137) (1,225)
Movement in provisions (104) (88)
RDEC adjustments (22) (127)
Share based payments (67) -
Cost base, excluding exceptional items 23% 7,915 6,455
Cost base is measured as: cost of sales, administrative costs and development
costs capitalised, less depreciation and amortisation, movement in provisions.
Getech reported an adjusted loss after tax of £2.8m (2021: £1.6m loss).
Operating cash flows
Getech's cash outflow from operations was £0.5m (2021: £0.8m outflow), which
includes costs of sales totalling £1.2m related to Getech's asset development
business (2021: £0.4m).
Liquidity and going concern
At the end of 2022, Getech held £4.3m in cash and cash equivalents (2021:
£5.9m). Net of debt, Getech's cash balance was £3.6m (2020: £5.1m).
Getech's business activities and the factors likely to affect our future
development, performance and position are set out in the Operational Review.
The financial position of the Group, our cash flows and liquidity position are
described in the financial statements.
In making the going concern assessment, the Board of Directors has considered
Group budgets and detailed cash flow forecasts to 30 June 2024. The detailed
forecasting models are built from Board approved budgets. From these budgets,
revenue forecasting is regularly updated to take into consideration new
contractually committed revenues, market sentiment, our current sales
pipeline, and any other influencing factors. The Directors then further apply
sensitivity testing to the revenue profiles based on the achievement of
various levels of revenue from noncontractually committed sources.
Getech's bank loan includes a balloon payment of £0.5m that falls due in
October 2024. The Group intends to either repay this amount early on
successful sale of Kitson House, or re-financing the balance to achieve a
similar repayment profile to that currently being paid.
These cash flow projections and sensitivities, when considered in conjunction
with Getech's existing cash balances and its ability to adjust costs in
accordance with forecast levels of revenue, demonstrate that the Group has
sufficient working capital for the forecast period. Consequently, the
Directors are fully satisfied that it is appropriate to prepare the accounts
on a going concern basis.
Andrew Darbyshire
Chief Financial Officer
Sustainability
Getech remains committed to sustainability and ESG principles, which form the
backbone of our corporate strategy. Our focus on planet and people ensures
that we continuously strive for a sustainable future and create value for our
stakeholders.
Planet: Innovating for Sustainability
Building on our pledge to become carbon neutral by 2030, Getech has made
progress in reducing scope 1 and 2 emissions. This year, we have implemented
further initiatives to minimise our environmental footprint:
• Enhanced energy efficiency through optimised workspace design
• Increased employee participation in our green commuting schemes
• Switching to renewable electricity and green gas suppliers
In 2023, we have outlined the following objectives to further our
sustainability efforts:
• Assess and quantify our Scope 1 and 2 emissions
• Establish ESG metrics grounded in a materiality assessment
• Begin developing an auditable roadmap to fulfil Getech's
commitment to achieving net-zero emissions by 2030
In 2022, in line with our mission to unlock the world's subsurface geoenergy
potential and locate essential energy and mineral resources needed for
decarbonisation, we expanded our product portfolio by introducing innovative
solutions that contribute to a greener and more sustainable future. Our
research and development efforts have yielded the following advancements:
• A novel solution for identifying future facing minerals, including
sedimentary hosted copper deposits
• An enhanced geothermal screening solution that locates and
high-grades geothermal opportunities
• A comprehensive approach to industrial decarbonisation
• An improved methodology for locating and monitoring subsurface
sites for carbon storage
Sedimentary Hosted Copper
With the looming copper deficit, sedimentary hosted copper deposits offer a
promising and sustainable alternative for meeting the increasing global demand
for this energy transition critical mineral. These deposits account only for
20% of the world's total copper production today and offer several advantages
compared to non-sedimentary deposits such as porphyry deposits found in
igneous settings, including:
• Sedimentary-hosted copper deposits, being more widely distributed,
often present fewer ESG issues, minimising environmental problems, promoting
equitable economic distribution and reducing transport emissions.
• These deposits typically require less energy-intensive processing
methods.
Another critical aspect of sedimentary hosted copper deposits is their
significant cobalt content. Approximately 80% of the world's cobalt, a key
component in batteries, comes from these deposits. This positions Getech at
the forefront of supporting the growing demand for essential minerals in the
clean energy and electric vehicle industries.
Geothermal Screening
Geothermal energy is a reliable and renewable energy source that utilises the
Earth's natural heat to generate electricity and provide heating solutions
with minimal environmental impact. By tapping into this vast resource, we can
significantly reduce our reliance on fossil fuels and contribute to global
efforts in mitigating climate change.
Our advanced geothermal screening technology enables the efficient evaluation
of subsurface conditions, allowing us to pinpoint areas with high potential
for geothermal development. Furthermore, our expertise allows us to tailor our
screening approach to the specific requirements of different geothermal
technologies, such as closed-loop and open-loop systems. Closed-loop systems
involve circulating a heat transfer fluid through a sealed underground network
of pipes, while open-loop systems extract geothermal fluid directly from the
ground, utilising its heat before returning it to the subsurface.
By identifying optimal locations for these various technologies, we can
minimise exploration risks and reduce the overall costs associated with
geothermal projects, making them more accessible and attractive to investors
and energy producers. Our tailored approach also ensures that the most
suitable and efficient geothermal technology is employed for each specific
site, maximising the potential benefits and minimising the environmental
impact.
Our expertise in geothermal screening not only benefits our customers by
providing them with valuable insights into promising geothermal resources and
tailored solutions, but also makes this energy source more affordable and
competitive when compared to fossil fuels.
Integrated Decarbonisation for Industry
At Getech, we recognise the critical role that industries play in the global
effort to reduce greenhouse gas emissions and transition to a low-carbon
future. To support this transition, we offer tailored, integrated
decarbonisation solutions that help our customers replace high-emission energy
sources with sustainable, low-carbon alternatives, such as geothermal, green
hydrogen, carbon capture and storage (CCS), wind and solar energy.
Our comprehensive approach to decarbonisation involves global screening of
manufacturing sites and logistics operations, combined with location-specific
feasibility studies. With our expertise in geospatial optimisation and
advanced analytics, we can determine the most efficient and cost-effective
strategies to lower emissions across various assets and operations.
By providing industries with customised, data-driven insights, we enable them
to make informed decisions about their energy mix and emission reduction
initiatives. This empowers companies to not only meet their sustainability
goals but also improve their overall environmental performance and long-term
competitiveness in a rapidly changing global landscape.
Carbon Capture and Storage
As the urgency to address greenhouse gas emissions and combat climate change
grows, carbon capture and storage (CCS) technologies have become an
indispensable component in the pursuit of a sustainable and comprehensive
solution to mitigate the detrimental effects of carbon dioxide emissions. CCS
involves the capture of CO2 generated by industrial activities, power
generation, and other sources, followed by the transportation and secure
storage of the CO2 in underground geological formations, thus preventing its
release into the atmosphere.
Getech is at the forefront of this critical initiative - identifying potential
storage sites, modelling subsurface structures and monitoring operations. The
selection of an appropriate site is of utmost importance, with three primary
factors to consider: storage capacity, injectivity and containment.
Identifying the ideal geological formation entails finding rocks with ample
storage potential, characterised by high porosity and permeability, an
effective caprock and a stable environment to ensure long-term secure storage
of CO2. Through this rigorous screening process, we can confidently ensure
that captured CO2 remains contained within designated geological formations,
minimising the risk of leakage and maximising the overall effectiveness of CCS
solutions.
Moreover, our dedication to collaboration enables us to forge partnerships
with a diverse range of stakeholders - such as government authorities,
industry leaders and research institutions - in order to advance CCS
technology and promote its global adoption. By joining forces, we can expedite
the transition towards a sustainable, low-carbon economy.
People: Empowering Our Workforce and Communities
Health, Safety and Wellbeing
At Getech, we are passionate about our people and truly value each individual
contribution to the wider success of the business. Employee satisfaction and
commitment are crucial for driving Getech's growth and fostering a thriving
work environment, resulting in the retention and happiness of our valued
employees. As such, our attractive benefits package, alongside our continued
efforts to make Getech a great place to work, aims to incentivise our current
talent to stay onboard, while attracting new, high calibre individuals to join
us. Our retention rate for 2022 was 92% (2021: 95%).
Getech remains committed to providing a physically and psychologically safe
and supportive work environment, investing in the following initiatives:
• Regular health and safety training
• Mental health and well-being assistance programme
• Enhanced flexible working arrangements to promote work-life
balance
• Financial advice from experienced wealth management
• Life, private medical and business travel insurance
• Bereavement support
• Discounts on gym memberships and physiotherapy
Several initiatives benefit our employees while advancing energy transition
goals:
• Cycle to Work Scheme
• Electric Vehicle Salary Sacrifice Scheme
We also support a range of extracurricular activities including a workplace
cricket league and a sports and social club, which provide team building
opportunities for all staff.
Equality, Inclusion and Diversity
Equality, inclusion and diversity are vital to Getech to create a safe and
inclusive workplace. The Group's Equality, Inclusion and Diversity Policy sets
out the expectations of all employees and Board to create this environment. We
actively support diversity and inclusion and ensure that all employees are
valued with dignity and respect.
The employment practices and procedures as part of our Quality Management
System (QMS) exemplify fairness and transparency throughout the employment
lifecycle, including recruitment and promotion.
To strengthen our commitment to equality, we have initiated pay gap analysis
reports this year to ensure equal pay across gender, race, and ethnicity.
Although we have not yet completed pay gap checks, we have consistently
provided equal pay raises based on experience and performance. In 2023, a 4%
pay rise was granted equally to all employees, excluding those with less than
six months of service.
Transparency in remuneration is also essential to our commitment. We include
salaries in job postings, basing them on the most recent salary for existing
roles or conducting benchmarking for new positions.
The robust appraisal system at Getech directly supports inclusion and
diversity by providing equal opportunities for growth and advancement to all
employees, regardless of their background. By engaging regularly with their
managers, employees from diverse backgrounds can openly discuss their career
aspirations and receive tailored guidance to achieve their goals.
This appraisal system emphasizes the recognition of individual skills and
achievements, ensuring that employees are evaluated based on merit, rather
than on factors unrelated to their performance. This merit-based approach
fosters an inclusive work environment where diverse perspectives and talents
are valued. These appraisals help employees understand their career
development path, which is vital in promoting diversity and inclusion. When
employees can see how their unique skills and experiences align with Getech's
vision, they feel more engaged and motivated to contribute to the company's
success. This alignment also encourages a sense of belonging, enabling
employees from diverse backgrounds to thrive in their roles.
Lastly, by identifying skills gaps or areas requiring further training, Getech
ensures that all employees have equal access to resources that enable them to
reach their full potential. This commitment to continuous learning and
development further supports an inclusive workplace culture where every
employee can succeed, irrespective of their background or identity.
Investing in People
At Getech, we are committed to fostering the professional development of our
employees. We achieve this by offering targeted training programs that not
only enhance team day-to-day performance but also prepare them for new roles
and responsibilities.
Following the reporting period, we implemented an improved appraisal process
that emphasises values and behaviours, ensuring improved development and
training opportunities while maintaining adaptability in a dynamic
environment. To facilitate continuous growth and open communication,
appraisals will be conducted multiple times per year, providing ample
opportunities for two-way feedback.
Community Engagement
Getech continues to give back to our communities through charity partnerships
and volunteering efforts. During 2022, financial support was provided to
Freedom4Girls, a charity fighting against period poverty. The fundraiser
helped to provide safe period products and menstrual health education to
thousands of women and girls across Leeds, Kenya, and Uganda - enabling them
to attend school and work without the stigma and gender inequalities
associated with period poverty.
In December 2022, Getech staff raised £300 for a local community foodbank to
provide Christmas dinner and additional food supplies to their service users
in Harehills, one of the most financially deprived areas of Leeds.
After the reporting period, in response to the tragic earthquake and its
aftermath in Turkey and Syria, Getech supported the DEC's Earthquake Appeal.
Our Leeds office held a cake sale to raise funds. Getech staff donated a total
of £335, with Getech contributing an additional £250. Employees across all
offices were encouraged to donate directly to the DEC, with the added benefit
of being able to gift aid their contributions.
Since 2016, our staff have also volunteered for MapAction - providing
assistance with mapping, data, and training. The charity is currently involved
with supporting humanitarian efforts in relation to the Ukraine conflict,
providing life-saving geospatial data, visualisation, and mapping. We are
seeking ways to increase our role in supporting MapAction charity, including
donations and training.
For further information, please contact:
Getech Group plc
Irina Logutenkova, Head of Investor Relations 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) generates revenue by locating new energy and
mineral resources using its proprietary Earth digital twin. The Group works
for governments and companies who seek to decarbonise their operations. Getech
has expanded the use of data and technologies built for the petroleum industry
to critical minerals, geothermal, hydrogen, and carbon storage.
For further information, please visit www.getech.com (http://www.getech.com/)
.
H2 Green Limited, a wholly owned subsidiary, that is a designer and developer
of Green Hydrogen Hubs in the UK. Each hub utilises renewable power to produce
large volumes of hydrogen that is uses to decarbonise transport and industrial
applications.
Group Statement of Comprehensive Income
For the year ended 31 December 2022
2022 2021
£'000
£'000
Revenue 5,070 4,280
Cost of sales (3,681) (2,315)
Gross profit 1,389 1,965
Other operating income 205 176
Administrative expenses (4,779) (4,733)
Operating loss before exceptional items (3,185) (2,592)
Exceptional items - (300)
Operating loss (3,185) (2,892)
Finance income 8 -
Finance costs (45) (55)
Other gains and losses 125 60
Loss before taxation (3,097) (2,887)
Income tax income 269 938
Loss for the year (2,828) (1,949)
Other comprehensive income:
Items that may be reclassified to profit or loss
Currency translation differences 110 24
Total items that may be reclassified to profit or loss 110 24
Total other comprehensive income for the year 110 24
Total comprehensive income for the year attributable to owners of the Parent (2,718) (1,925)
Company
Earnings per ordinary share (EPS)
Basic EPS (4.21)p (3.27)p
Diluted EPS (4.21)p (3.27)p
All activities relate to continuing operations.
Group Statement of Financial Position
as at 31 December 2022
2022 2021
£'000
£'000
Non-current assets
Goodwill 631 631
Intangible assets 3,413 3,431
Property, plant and equipment 2,282 2,355
Investment property 69 174
Deferred tax asset 200 214
6,595 6,805
Current assets
Trade and other receivables 1,202 1,591
Current tax recoverable 318 793
Cash and cash equivalents 4,322 5,864
5,842 8,248
Total assets 12,437 15,053
Current liabilities
Trade and other payables 2,304 2,127
Current tax liabilities 9 -
Borrowings 110 110
2,423 2,237
Net current assets 3,419 6,011
Non-current liabilities
Borrowings 570 659
Trade and other payables 39 102
Long-term provisions 25 25
634 786
Net assets 9,380 12,030
Called up share capital 168 167
Share premium account 8,685 8,685
Merger reserve 2,601 2,601
Share-based payment (SBP) reserve 196 258
Currency translation reserve 108 (2)
Retained earnings (2,378) 321
Total equity 9,380 12,030
The financial statements were approved by the Board of Directors and
authorised for issue on 2 June 2023 and are signed on its behalf by:
Mr A L Darbyshire
Director
Group Statement of Changes in Equity
For the year ended 31 December 2022
Share capital Share premium account Merger reserve SBP reserve Currency translation reserve Retained earnings Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
1 January 2021 94 3,053 2,407 251 (26) 2,270 8,049
Loss for the year − − − − − (1,949) (1,949)
Other comprehensive income − − − − 24 − 24
Total comprehensive income − − − − 24 (1,949) (1,925)
Transactions with owners:
Issue of share capital 73 6,179 194 − − − 6,446
Share-based payment charge − − − 7 − − 7
Costs of share issue deducted from share premium − (547) − − − − (547)
31 December 2021 167 8,685 2,601 258 (2) 321 12,030
Loss for the year − − − − − (2,828) (2,828)
Currency translation differences − − − − 110 − 110
Total comprehensive income − − − − 110 (2,828) (2,718)
Transactions with owners:
Issue of share capital 1 − − − − − 1
Share-based payment charge − − − 67 − − 67
Transfer of exercised and lapsed share-based payment charges − − − (129) − 129 −
31 December 2022 168 8,685 2,601 196 108 (2,378) 9,380
Group Statement of Cash Flow
For the year ended 31 December 2022
2022 2021
£'000
£'000
Operating activities
Loss before tax (3,097) (2,887)
Adjusted for non-cash items:
Fair value gains and losses (125) (60)
Depreciation charge 329 299
Amortisation of intangible assets 808 1,226
Share-based payment expense 67 7
Finance income (8) -
Finance costs 45 55
RDEC adjustments within administrative expenses (22) (127)
(2,003) (1,487)
(Increase)/decrease in trade and other receivables 390 (245)
Increase/(decrease) in trade and other payables 357 710
Cash generated from operations (1,256) (1,022)
Income tax refunded 788 223
Net cash outflow from operating activities (468) (799)
Investing activities
Business combinations (net of cash received) - (54)
Development costs capitalised (785) (847)
Purchase of property, plant and equipment (73) (29)
Interest received 8 -
Net cash used in investing activities (850) (930)
Financing activities
Proceeds from issue of shares 1 6,250
Share issue costs - (547)
Repayment of bank loans (89) (66)
Payment of lease liabilities (199) (199)
Interest paid (40) (44)
Net cash generated from/(used in) financing activities (327) 5,394
Increase/(decrease) in net cash and cash equivalents (1,645) 3,665
Cash and cash equivalents at the beginning of the year 5,864 2,192
Effect of exchange rates 103 7
Cash and cash equivalents at the end of the year 4,322 5,864
Notes to the Group Financial Statements
for the year ended 31 December 2022
Basis of preparation
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined by section 434 of the Companies Act
2006. The financial information above has been extracted from the Group's 2022
statutory financial statements, which have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006. The principal accounting policies of the Group have
remained unchanged from those set out in the Group's 2021 annual report as
delivered to the Registrar of Companies.
The financial statements are prepared in sterling, which is the functional
currency of the Group. Monetary amounts in these financial statements are
rounded to the nearest £'000.
The financial statements have been prepared under the historical cost
convention, except for the revaluation of investment property and financial
instruments.
Statutory accounts for the years ended 31 December 2022 and 31 December 2022
have been reported on by the Independent Auditor. The Independent Auditor's
Reports on the Annual Report and Financial Statements for the periods ended 31
December 2022 and 31 December 2021 were unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement under 498(2)
or 498(3) of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2022 were approved by
the board on 2 June 2023 but have not yet been delivered to the Registrar of
Companies. The statutory accounts for the year ended 31 December 2021 have
been delivered to the Registrar of Companies.
Going concern
In making the going concern assessment, the Board of Directors has considered
Group budgets and detailed cash flow forecasts to 30 June 2024. The detailed
forecasting models are built from Board approved budgets. From these budgets,
revenue forecasting is regularly updated to take into consideration new
contractually committed revenues, market sentiment, our current sales
pipeline, and any other influencing factors. The Directors then further apply
sensitivity testing to the revenue profiles based on the achievement of
various levels of revenue from noncontractually committed sources.
Getech's bank loan includes a balloon payment of £0.5m that falls due in
October 2024. The Group intends to either repay this amount early on
successful sale of Kitson House, or re-finance the balance to achieve a
similar repayment profile to that currently being paid.
These cash flow projections and sensitivities, when considered in conjunction
with Getech's existing cash balances and its ability to adjust costs in
accordance with forecast levels of revenue, demonstrate that the Group has
sufficient working capital for the forecast period. Consequently, the
Directors are fully satisfied that it is appropriate to prepare the accounts
on a going concern basis.
Earnings per share
2022 2021
Number
Number
Number of shares
Weighted average number of ordinary shares for basic EPS 67,251,505 59,612,590
2022 2021
£'000
£'000
Earnings (all attributable to equity shareholders of the company)
Loss for the period from continued operations (2,828) (1,949)
Basic and diluted EPS
From continuing operations (pence/share) (4.21) (3.27)
Basic EPS is calculated by dividing the profit attributable to equity holders
of the parent by the weighted average number of ordinary shares outstanding
during the year.
Diluted EPS is calculated by dividing the profit attributable to equity
holders of the parent by the weighted average number of ordinary shares
outstanding plus the weighted average number of shares that would be issued on
conversion of all the dilutive share options into ordinary shares. In the
current and comparative year the Group has incurred losses and as such has not
presented any dilution of earnings per share in accordance with IAS 33
'Earnings per share'. However, these dilutive shares would dilute the earnings
per share should the Group become profitable.
Adjusted Earnings per share
The Directors use "Adjusted Earnings" as a Key Performance Measure, which is
defined as earnings before exceptional items. In the current year this
includes a material component of non-recurring amortisation which has only
arisen because of the business combination with H2 Green Limited. Adjusted
Earnings is considered to represent and measure the ongoing profitability and
performance more faithfully.
The calculated Adjusted Earnings for the current period is as follows:
2022 2021
£'000
£'000
Loss for the period from continued operations (2,828) (1,949)
Adjusted for:
Exceptional items - 300
(2,828) (1,649)
Basic adjusted earnings per share (pence/share) (4.21) (2.77)
Notice of Annual General Meeting
The Annual Report and Accounts and notice convening the Annual General Meeting
of the Company will be posted to shareholders on 8 June 2023 and will be
available from the Company's website www.getech.com (http://www.getech.com/)
from that date. The Annual General Meeting of Getech Group plc will be held
on 29 June 2023 at 12.00 noon.
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