REG - GETECH Group plc - Final Results
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RNS Number : 3090H GETECH Group plc 06 May 2025
06 May 2025
Getech Group plc
("Getech" or the "Company")
Final Results
Getech (AIM: GTC), a world-leading locator of subsurface resources, is
pleased to announce its Final Results for the 12 months ended 31 December
2024.
Financial highlights
· Revenue up 16% to £4.7 million (2023: £4.0 million)
· Annually Recurring Revenue increased to £2.9 million (2023:
£2.8 million)
· EBITDA loss decreased significantly to -£0.56 million (2023:
-£2.7 million)
· Cash at bank increased to £0.9 million (2023: £0.4 million)
· Sale of Kitson House in January 2024 for £0.65 million
· Raised gross proceeds of £1.7 million in August 2024 from new
and existing shareholders to enhance working capital position and invest in
our sales team.
Operational highlights
· Invested in advancing the Group's services and solutions,
including extending the capabilities of the Globe exploration platform,
enhancing key software products (Exploration Analyst, Unconventionals Analyst
and Data Assistant) and evolving AI capabilities to maintain our leadership in
machine learning-enabled subsurface resource exploration.
· Revenues from Petroleum sector grew by 16% while revenues from
all other sectors grew by 14%, when compared to 2023.
· Strategic Natural Hydrogen agreements with Sound Energy plc
("Sound Energy") to pursue natural hydrogen accumulations in Morocco and
Kingfisher in North America.
· Established new business partnerships with Natural Hydrogen
Ventures, RED Engineering and Expro.
· New Mining sector contract wins with Sandfire Resources Ltd
("Sandfire") and East Star Resources plc ("East Star"), supporting copper
exploration.
· Won new and repeat Expert Services projects across multiple
geoenergy sectors.
FY 2025 current trading
· Appointment of Chris Jepps as CEO (previously COO) in January
2025.
· Sale and leaseback of Nicholson House in February 2025 for
£0.725 million which, when coupled with the previous sale of Kitson House,
enabled the repayment of all debt and leave the Group debt free.
· The leadership team has initiated a new sustainable business
strategy, successfully completing in Q1 2025 a project to reduce the Group's
annual cost base by c. £1 million.
· Unaudited revenues in the first 3 months of 2025 are 8% ahead of
the same period 2024, driven by an expanded sales team and new management.
Michael Covington, Chairman of Getech, said, "In 2024, we made solid progress
in advancing our services and solutions, achieving a 16% increase in sales. In
2025, the appointment of Chris Jepps as CEO has already had a positive impact.
Within the first three months of the year, we've reduced our annual cost base
by a further £1 million, without compromising our ability to deliver for
clients, and in doing so have set a clear path to being EBITDA positive by the
end of 2025. In parallel, the new executive management team has introduced a
new, sustainable, business strategy, which re-focuses the Group on its
traditional core Oil & Gas and Mining client base, while continuing to
pursue high-quality, selective, opportunities in Natural Hydrogen. It is still
early days, but the new team's momentum is encouraging."
Investor Meet Company presentation
Chris Jepps (Chief Executive Officer), Max Brouwers (Chief Business
Development Officer) and Simon Brown (Finance Director) will provide a live
presentation relating to the Full Year Results via Investor Meet Company
on 09 May 2025, 11:30am.
Questions can be submitted pre-event via your Investor Meet Company dashboard
up until 08 May 2025, 09:00 BST, or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to
meet GETECH GROUP PLC via:
https://www.investormeetcompany.com/getech-group-plc/register-investor
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For further information, please contact:
Getech Group plc
Chris Jepps, CEO Tel: 0113 322 2200
Michael Covington, Chairman
Cavendish Capital Markets Limited
Neil McDonald / Pete Lynch (Corporate Finance) Tel: 0207 397 8900
Michael Johnson / Dale Bellis (Sales)
Novella Communications Tel: 0203 151 7008
Tim Robertson / Safia Colebrook
getech@novella-comms.com
Notes to Editors:
About Getech
Getech is a leading locator of subsurface resources essential for the world's
energy security and sustainable transition. The Company combines unique
geoscience expertise, AI-driven analytics, and extensive geospatial insight to
identify new energy and mineral resources and streamline exploration
processes. Serving clients across corporates, government and regulators in a
wide range of industries, Getech is committed to enabling energy and mineral
security while supporting a shift towards low carbon sources.
Chairman's Statement
2024 was an active but challenging year and a tougher trading environment than
we expected at the outset of the year. Nevertheless, against that backdrop, we
made good progress in several important strategic areas.
Through 2024 we completed a cost-reduction programme first initiated in FY23
to take c. £2m of annualised costs out of the Group. Whilst this programme
took longer than anticipated to deliver, such that the total savings in 2024
were £1.5m, the monthly run rate at the end of FY24 was equivalent to the
£2m annualised savings expected. The majority of the savings related to the
closure of our green hydrogen activities.
In addition, our working capital was improved during the period; firstly, in
January 2024 with the sale of our Kitson House office for gross proceeds of
£650,000 and, secondly, in August 2024 when we raised gross proceeds in a
combined placing and retail offer of £1.7m from new and existing
shareholders. The new funds raised enhanced our working capital position and
facilitated investment in expanding our sales team.
Post the year end, in February 2025, we also announced the completion of the
sale and partial leaseback of our Nicholson House office for gross proceeds of
£725,000. The sale of our office properties has enabled the Group to repay
all loans and become debt-free - an appropriate position for the current size
of the business.
I welcomed Chris Jepps as the Group's new CEO in January 2025 following the
departure of Richard Bennett from the role. I was also pleased to announce
that Max Brouwers would be joining the Board as an Executive Director once all
arrangements were in place. Both Chris and Max are internal appointments and
therefore their talents and skillsets are already well known to the Group.
They have hit the ground running and share a positive strategic vision for the
Group's future.
I would like to take this opportunity to thank Richard Bennett for all his
efforts and dedication during his tenure as CEO and, on behalf of the Board
and the entire team, I wish him the very best in his future.
In his CEO's statement, Chris provides further details on how he intends to
take the business forward, a key plank of which is to first re-balance the
business in terms of anticipated revenues against the current cost-base. To
this end, in Q1 2025, the management team has already implemented a programme
of cost cutting to remove approximately an additional £1million of costs on
an annualised basis.
From a trading perspective, we are seeing an improving outlook for Oil &
Gas in the current financial year. In particular, there has been an increase
in sales enquiries for Globe from super-major and national oil companies,
perhaps reflecting some "green shoots" of market improvement for exploration
and new ventures projects.
We remain excited about the potential of Natural Hydrogen. Indeed, a recent
study by the U.S. Geological Survey estimates that there could be millions of
mega-tonnes of Natural Hydrogen in accumulations in the Earth's crust. They
state that "even only a small fraction of the estimated amount of subsurface
hydrogen could potentially meet all global projected demand for hundreds of
years". Our data is ideal for locating potential hydrogen source rocks and
this has helped the Group build a strong presence in this nascent market and
secure several contracts and partnerships.
Finally on behalf of the Board, I would like to thank everyone in the business
for their dedication and hard work. We are entering a new period, under a new
team, and I am optimistic the business will be better for it.
Michael Covington
Chairman
CEO's Statement
I am pleased to be reporting this year's Final Results for the first time as
CEO of Getech. Having worked as COO of the Group since 2018, I have a deep
understanding of our operations and value propositions, and I am confident
that this is an exciting time to be heading the business as a leading locator
of the subsurface resources that are essential for the world's energy security
and a sustainable energy transition.
Trading
2024 was an improved, but still challenging, year for Getech, and our revenues
grew by 16% to £4.7m (2023: £4.0m). This growth was driven by strong
contract renewals, increased service project revenues, and was underpinned by
our annual recurring revenue (ARR), reaching £2.9m (2023: £2.8m) from our
product subscription models. The Group orderbook at 31 December 2024 was
£4.1m (2023: £4.5m), with the slight reduction due to the successful
unwinding of the contracted orderbook to revenue during the year.
We continued to leverage our extensive geoscience and geospatial expertise for
clients across corporates, governments and regulators. Our Globe platform
delivered robust contract renewals, with the platform's search capabilities
being expanded with new commodities and the support of AI and Machine Learning
techniques. Elsewhere within our product stack, we significantly grew our
Unconventionals customer base, reflecting a growing demand for our onshore oil
and gas technology. We were also pleased to see our services divisions
experience their busiest Q3 and Q4 for at least 6 years.
As part of rebalancing the business, we completed the sale of Kitson House and
Nicholson House, unlocking valuable capital to eliminate our debt and provide
a stronger foundation for operations. Additionally, the final closure of our
Green Hydrogen business, H2 Green, marked a further step in streamlining our
focus. Through 2024 we identified and initiated two Natural Hydrogen projects
with select partners, a sector that we see as a potential high-growth low
carbon opportunity more aligned to our core capabilities of subsurface data
and expertise.
The market
Market conditions in 2024 were mixed but, importantly, the market for Oil
& Gas continued to strengthen on the back of global energy security
concerns. This has been further evidenced by high profile moves of BP and
Shell moving away from Renewables and pivoting back towards Oil & Gas. At
the same time, the US onshore oil and gas sector is expected to grow further,
following the Trump administration's push to alleviate regulation on natural
gas and oil production.
Against this backdrop, we have seen Exxon and Chevron announce plans to
restructure and reduce staff, underlining that Oil & Gas players are still
pushing to be as efficient as possible. Meanwhile, over the last month or so,
further uncertainty has been introduced into global economics with the
tariff-led changes to global trade, the medium to long-term effects of which
are yet unknown.
The Mining sector has also had a mixed year, with some major players
downsizing and margins remaining narrow. Meanwhile, growth in Energy
Transition and Decarbonisation sectors, such as Green Hydrogen and Geothermal,
has been slower than anticipated due to changing global energy market dynamics
and again, some regulatory uncertainty with governments seemingly slow to
follow through on previously anticipated decarbonisation policies.
A sustainable business strategy
For many years, servicing the Oil & Gas sector has been the foundation of
our business and revenues. In recent years we have perhaps slightly lost focus
on this in our desire to diversify and follow a broad range of opportunities
in emerging low carbon energy sectors. I believe that a sustainable strategic
positioning for the business is to re-double our focus on our core markets
such as Oil & Gas and Mining, whilst maintaining interest in low carbon
sectors by selecting only the highest quality opportunities.
However, we must first stabilise our financial position. Rebalancing the
Group's finances is our key priority by ensuring that we operate within our
means.
In 2024, we delivered cost savings of c. £1.5 million as we pivoted away from
Green Hydrogen, but to achieve our goal to be EBITDA positive by the end of FY
2025, further work has been needed.
To this end, in Q1 2025, we began a new cost reduction programme with the aim
of reducing the Group's annualised cost base by a further c.£1 million, while
protecting our ability to deliver our core capabilities and products. In
tandem, we have restructured our Sales team to drive revenue growth from
existing and new customers, introducing new sales management processes and
expanding the team. We have been successful in attracting back former Sales
Director, Paul Carey, a senior and experienced sales leader and someone with a
detailed understanding of our Globe exploration platform and the commercial
power of our gravity and magnetic data holdings.
The basis of our sustainable business strategy is to focus on what we do best
and our key differentiators - i.e. our combination of geoscience, geophysics,
Globe, geospatial and AI/machine learning - and doing so across fewer market
sectors with a more streamlined and focused team.
Globe and our gravity and magnetic data holdings remain key assets for the
Group and represent unique and highly valuable intellectual property (IP) that
can be applied across a range of natural resource sectors. Developing this IP
through continued innovation remains a central plank in our strategy to ensure
our technology can be applied to new sectors, while remaining relevant and
essential to our existing client-base.
The Geospatial sector represents an excellent opportunity for Getech with the
global Geographic Information System (GIS) market valued at c. $10 billion and
predicted to grow year-on-year by c. 15%. We are well placed to leverage this
market by growing revenues via Exprodat - our Group company that specialises
in GIS. Exprodat is a well-established brand and long-standing 'Gold Partner'
with market-leading GIS technology provider Esri. In 2024, Exprodat
contributed approximately one third of Group revenues.
Our interest in the best quality low carbon opportunities continues as we
believe they provide significant potential future upside for the business. I
look forward to advancing these by working closely with Max Brouwers, our
Chief Business Development Officer. Max's geoscience background and 25 years
of leadership experience in international energy will be crucial in
progressing our portfolio of high potential growth Natural Hydrogen projects.
Outlook
As part of a strategic refresh following my appointment in January we reviewed
the future financial outlook for the business. The business is sound, but we
believe that, particularly in relation to low-carbon projects, past trading
assumptions were overly optimistic and led to unachievable long-term revenue
projections. Instead, over the next year with a further reduced cost base, we
are targeting mid-to-high single digit organic revenue growth which should
ensure that the Group is EBITDA positive from its core business - that is,
excluding any upside from our portfolio of low carbon equity projects.
With this modest and achievable forecasting there remains, however, excellent
potential for significant out-performance. Firstly, we have several large
opportunities in the pipeline for our core technology asset, Globe, which
could transform our revenues and materially add to our ARR. Secondly, our
project initiation activities in Natural Hydrogen are progressing well and
could also lead to high value growth in the mid-term.
However, the priority for now is on rebalancing the business, and I am excited
at the prospect of leading a more streamlined business with greater focus, to
position Getech for long-term success.
I would like to thank all our staff for their hard work and support for the
business and look forward to us all working together on the next stage of our
success.
Chris Jepps
Chief Executive Officer
Operational Review
Introduction
The last year saw good progress towards an evolved strategy. Our sales and
business development teams delivered an increase in revenues compared to 2023,
while the Group maintained high oil and gas customer retention rates,
including of our Globe exploration platform, and added new software customers.
In addition, we increased Annually Recurring Revenue (ARR) and continued to
repurpose our offerings for the energy transition, including making
significant progress in enhancing our mineral exploration capabilities with
artificial intelligence and machine learning.
As the global energy transition continues to gradually unfold, we expanded our
operational reach in 2024 by providing solutions to clients in emerging energy
supply sectors such as natural hydrogen and geothermal, at the same time
continuing to support customers in the core business areas of petroleum and
critical minerals.
At the same time, we expanded our business partnerships, to help reach more
prospective clients and provide a more comprehensive offering.
Globe exploration platform
Getech delivered material updates to its Globe exploration platform and
associated software products to increase the value-add these solutions have
for its customers. This suite of Getech products supports organisations in
conducting their own exploration for subsurface resources.
Globe is Getech's flagship product, a platform designed to enhance resource
exploration by providing a 'digital twin' of Earth history. Developed over the
last c. 15 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, including
petroleum, carbon storage, geothermal, natural hydrogen and critical mineral
assets. Globe is an innovative product that collects geoscience and earth
observation data, and through proprietary computational modelling and AI-led
machine learning techniques, identifies favourable exploration opportunities
for our customers
The latest release, called Globe 2024, further solidifies Globe as the go-to
solution for petroleum, mineral, hydrogen and geothermal explorers. This
release offers even more value to its customers through, Enhanced Dynamic
Plate Models, Expanded Paleogeographies and Paleo-surface Geology, Improved
Crustal Architecture Mapping, Advanced Thermal Mapping Powered by AI and data
specific for Natural Hydrogen exploration.
Globe is now also used as the basis for compiling country-wide data packages
for use in specific exploration projects. These information packages offered
to petroleum, geothermal and mining sectors provide explorers with a
comprehensive and integrated insight to accelerate their exploration efforts.
They are, in particular, useful for exploration bid-rounds when clients need
to very quickly hone-in on the areas they want to apply for. Starting with the
first information set for Zambia in 2024, Getech has built on this with
dedicated packages for Brazil and the USA Lower 48 in early 2025.
Exploration Analyst is used by energy and mining companies to help identify
new locations of petroleum, minerals, carbon storage and geothermal
resources. The 2024 update retains the key capabilities to customise
exploration maps on the fly and easily re-run analyses at the click of a
button when new data becomes available. Additional capabilities include the
ability to incorporate raster (grid) based analyses, as well as making search
and filter tools available across the toolset.
Unconventionals Analyst is used by petroleum operators and financial
institutions to manage onshore shale oil and gas projects and investments. The
2024 update builds on its already powerful functionality with a host of new
capabilities designed to increase the productivity of its user-base of
geoscientists, reservoir engineers and GIS professionals. The new release
includes enhanced Gun Barrel capabilities, a new Realize Wells tool, an
enhanced Create Well Sticks tool and a new standalone Trim Wells tool.
Data Assistant is used by energy resource organisations to integrate
geoscience data with Esri's market-leading GIS technology. The 2024 update
includes the ability to import a seismic 3D survey into voxels, to seamless
display seismic data as a cube within ArcGIS Pro. Alongside this, the new
version contains new capabilities for importing 2D cross-sections into 3D
space and for batch importing well deviation surveys.
Getech continues to enhance these products to be aligned with customer needs,
in order to deliver ever increasing value to subscribers and further build the
Group's annually recurring revenue (ARR).
Gravity and magnetic data
Getech has the world's largest commercially available database of potential
fields (gravity and magnetics) data, assembled over c. 30 years. This data has
been Getech's longest standing revenue source which it monetises through a
combination of spot-sales and data subscriptions.
Annual revenues from gravity and magnetic data sales have been in decline for
some time and in 2024 were disappointing. However, as many international oil
and gas companies begin pivoting back to petroleum activities with the
increase in focus on energy & mineral supply security, we anticipate the
outlook for data-sales will improve.
Expert services
Getech offers expert services that support customers in locating subsurface
resources and applying geospatial technology. This proposition builds fully on
the data, products and staff expertise the Group has. In 2024, Getech secured
a significant increase in services projects in energy transition sectors such
as natural hydrogen, geothermal and critical minerals. Repeat purchases by
several customers of these services provide confidence on the competitiveness
of the Group's offering.
Getech has a number of long-standing service contracts with energy companies
across the globe, whereby the Group provides its GIS expertise as a fully
embedded solution. This ensures the client benefits from a geospatial service
that is fully tailored to their processes and workflow. These services give
Getech strong future revenue visibility.
As well as long-term service agreements, Getech undertakes short-term
project-based engagements with some customers. These projects are important to
Getech - not only as they help build relationships, but also as they enable
Getech to address and solve new business challenges with innovative
approaches. Some examples of short-term expert services projects are
highlighted below:
Natural Hydrogen: Getech secured multiple separate contracts related to the
exploration of natural hydrogen (also known as 'geologic' or 'white' hydrogen)
with companies ranging from well-established international petroleum companies
to pure-play natural hydrogen start-ups. These contract awards to help locate
natural hydrogen resources for commercial development demonstrate that the
Group is at the forefront of this exciting new subsurface energy transition
opportunity.
A global Fast Moving Consumer Goods (FMCG) company wanted to evaluate the
possibility of sourcing cooling water for its own operations in one of its
industrial complexes, to reducing reliance on external water supplies and to
reduce operational costs. Getech delivered a comprehensive study, providing
the FMCG company with critical insights into the feasibility of self-producing
cooling water.
Sandfire contracted Getech to identify favourable sites for sedimentary-hosted
copper deposits in Australia. This analysis led to Sandfire applying for c.
7,000 sq. km of copper exploration permits.
East Star awarded Getech a project to locate porphyry copper deposits in
Kazakhstan. The project, backed by the BHP Xplor 2024 accelerator programme,
was the first time Getech's Globe geoscience platform had been used to
locate porphyry copper.
It is expected that Getech will see continued success with expert services,
with the ongoing global pursuit of both Petroleum and Energy Transition
projects.
Partnerships
Getech established partnerships with various companies that provide strong
synergistic value to the Group. These partnerships have the potential to
generate stronger, more comprehensive market offerings and can also ensure
access to a broader pool of revenue opportunities.
Natural Hydrogen Ventures (NHV), the world's first natural hydrogen investment
fund. NHV provides early-stage funding to natural hydrogen exploration
companies. Through this partnership Getech will: (i) screen NHV's prospective
natural hydrogen projects thereby helping them to de-risk their portfolio;
(ii) enhance its position with its own natural hydrogen exploration clients
through the ability to introduce NHV as a potential key investor; and (iii)
expand its contact and the potential for revenue generation within the sector
through direct contact with NHV's client base.
NHV launched also the Natural Hydrogen Index (NHV NatH2 Index), the first
index tracking the 10 most relevant publicly traded companies in the natural
hydrogen sector. Getech is among these companies. The equal-weighted index
includes those with the highest exposure to natural hydrogen, based on the
estimated percentage of their activities dedicated to this emerging resource.
The index is measured in USD, providing investors with a clear view of the
sector's top players.
RED Engineering, a Tractebel company and part of the ENGIE Group, formed a
strategic partnership with Getech. This collaboration focuses on advancing the
decarbonisation of energy sources through innovative geothermal solutions. By
leveraging the complementary strengths of both companies, this partnership
merges Getech's expertise in locating subsurface resources with RED's
proficiency in engineering solutions. Together, they offer comprehensive
capabilities to enable organizations to significantly reduce their carbon
footprints through the implementation of cost-effective low carbon geothermal
energy solutions.
Expro (NYSE: XPRO), a leading provider of energy services, has strategically
partnered with Getech to propel low carbon geoenergy projects, including
geothermal energy, natural hydrogen and carbon capture and storage (CCS). This
collaboration brings together Expro's excellence in well evaluation and
integrity with Getech's expertise in locating valuable subsurface resources,
leveraging proprietary data, geoscience acumen and cutting-edge machine
learning technologies.
Sound Energy (AIM: SOU) is a prominent UK-based gas producer with extensive
operations in Morocco. Through the deal with Getech, both companies will
combine their expertise to explore for natural hydrogen and helium resources
across onshore Morocco.
Kingfisher Energy Corporation (Kingfisher), the private international
exploration company, and Getech signed a strategic collaboration agreement to
facilitate extending its working relationship beyond Q1 2025. Getech will
continue to support Kingfisher with its data, software and consultancy to
locate natural hydrogen and helium accumulations in Canada.
ThinkOnward - As part of enhancing Getech's Artificial Intelligence
capabilities, the Group partnered with ThinkOnward, a Shell spin-off company
dedicated to solving challenges in subsurface exploration, to jointly leverage
the global community of data scientists to solve challenges in critical
mineral exploration.
Outlook
Energy security, affordability and limiting climate change will remain
fundamental global themes in the coming years. Getech is uniquely positioned
to help organisations locate the subsurface natural resources the world needs
as it grapples with this energy trilemma.
The Group's data, software and expertise have proven its value to the
petroleum, mining and energy transition sectors in 2024 and Getech's continued
investment to enhance its offering will ensure it continues to provide
material value to its clients in the future.
Max Brouwers
Chief Business Development Officer
Financial Review
2024 proved to be another year of transition for Getech, refocussing the
business on core activities and advancing the use of our Globe geoscience
platform, our extensive geophysical data and new Machine Learning techniques
to assist in the identification of areas with the optimal geologic conditions
for natural hydrogen production and other materials vital to sustainable
power. However, as trading conditions were not as favourable as expected it
became clear that additional working capital was required to both support
ongoing operations and investment in Sales team to help grow revenues.
Therefore, a combined placing and retail offer of £1.7m was successfully
concluded in August 2024, putting the business on a more secure financial
footing.
Revenue
In 2024, Group revenue rose from £4.0 million to £4.7 million, an increase
of 16%. The growth in revenue was largely driven by an increase in sales from
the Oil and Gas sector, including increased subscription revenues from Globe,
Unconventionals Analyst and across our expert services.
Gravity and magnetic data spot sales decreased 42.5%, from £1.1m in 2023 to
£0.6m in 2024. This was offset by a significant increase in expert services
projects across all sectors, resulting in expert services revenues increasing
to £1.2m in 2024, from £0.5m in 2023.
On an annualised basis, recurring revenues (ARR) increased from £2.8 million
at 31 December 2023 to £2.9 million at 31 December 2024.
Revenue by segment 2024 2023 Variance
£'000
£'000
%
Recurring subscriptions 2,820 2,409 17.1
Expert services 1,220 532 129.3
Spot sales 623 1,083 (42.5)
Total revenue/profit before exceptional items 4,663 4,023 15.9
Orderbook and pipeline
Group orderbook is the amount of secured revenue which has not yet been
recognised. It comprises the value of legally binding contracts in place that
are yet to unwind to recognised revenue. The period covered by orderbook is
usually within the range 1 to 5 years, with the highest proportion of
orderbook assigned to year 1, and the lowest proportion to year 5.
Orderbook has a strong seasonality component and can vary both upwards - as
new contracts are secured 'won' from the sales pipeline - and downwards - as
contracts commence and orderbook is converted to revenue. As such, a downwards
variation in orderbook is not necessarily a negative indicator.
The sales pipeline consists of potential commercial deals at various stages of
the sales process, representing opportunities rather than confirmed revenue.
It includes leads and prospects in different pipeline stages, such as
analysis, proposal and negotiation. We use pipeline metrics to help forecast
our likely future sales based on percentage risking (likelihood of success)
and average conversion rates. Unlike the orderbook, which tracks secured
contracts, the pipeline reflects potential revenue that has yet to be closed.
Our regular pipeline reviews allow us to measure sales team performance, track
conversion rates and assess whether strategic targets are being met. In
parallel, we are working hard to improve our management of the sales pipeline,
introducing new best practice to help ensure consistency of approach across
our sales team. These changes will enable us to better predict future revenues
and increase the likelihood of converting opportunities into secured
contracts.
The Group orderbook at 31 December 2024 was £4.1m (2023: £4.5m), with the
slight reduction due to the successful unwinding of the contracts to revenue
during the year. Revenue of £2.6m will unwind from orderbook in 2025.
Cost base
During 2024, the Group's cost base was reduced to £5.9 million from £7.6
million in 2023. Cost base reconciliation below shows how our cost base aligns
with the financial statements. The full year 2024 saving is lower than the
previously reported annualised saving target of £2m as the savings took
longer to implement than planned. However, the monthly run rate at the end of
FY24 compared to the run rate prior to the cost saving initiative represented
an annualised saving of £2m.
Variance % 2024 2023
£'000 £'000
Cost of sales 3,016 3,034
Development costs capitalised 763 881
Administrative costs 3,024 4,716
Depreciation and amortisation charges (817) (939)
Share-based payments (52) (84)
Total cost base excluding exceptional items -22% 5,934 7,608
Cost base is measured as, cost of sales, administrative costs and development
costs, less depreciation, amortisation and movement in provisions.
EBITDA
As a result of the significant cost reduction programme referred to elsewhere
in this report the Group saw the EBITDA loss reduced to £0.67 million (2023:
£2.7m loss). It is considered vital that our core business can be
self-supporting and therefore further cost saving measures have been enacted
in Q1 2025. It is therefore expected that we will reach positive levels of
EBITDA in the 2(nd) half of 2025.
Operating cash flows
Getech's cash outflow from operations, before working capital adjustments,
reduced significantly by £2.7m, at £0.5m million (2023: £3.2 million
outflow). FY23 included c. £0.9 million of impairment adjustments relating to
Goodwill (£0.3m) and the Freehold property being held for resale (£0.6m).
After adjusting for these, the reduction in cash outflows is £1.7m, resulting
from the cost reduction measures taken.
This cost reduction programme, expected to deliver c £2.0 million in
annualised savings, took longer to implement than initially estimated. Further
cost saving initiatives, amounting to an additional £1m of annualised
savings, have been implemented in Q1 FY25 and Getech expects to be cash flow
break-even from operations by end Q4 2025.
Liquidity and going concern
At the end of 2024, Getech held £0.9 million in cash and cash equivalents
(2023: £0.4 million).
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.
After reviewing the Groups forecasts and projections, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, being a period of at least
twelve months from the date of approval of these financial statements. The
group therefore continues to adopt the going concern basis in preparing its
financial statements. Information used to make this decision is detailed
below.
In making the going concern assessment, the Board of Directors has considered
Group budgets and detailed cash flow forecasts to 30 April 2026. 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. Included in these forecasts is the sale of
the freehold property, Nicholson House successfully concluded in February 2025
delivering net proceeds of £0.3m.
The Directors then further apply sensitivity testing to the revenue profiles
based on the achievement of various levels of revenue from noncontractually
committed sources. Alongside managements base case forecast which incorporates
the positive impact of the cost saving measures implemented in Q1 of 2025,
management prepared an extreme downside scenario where, outside of committed
revenue and an historically validated rate of renewal for existing contracts,
reduced revenue across recurring and services of £600k was modelled. Under
this less probable and very negative scenario the Group has considered the
potential actions available to management to mitigate the impact of these
sensitivities.
Financial performance in 2025 is not expected to be materially impacted from
2024 levels due to the long-range revenue visibility through its recurring
revenue business model alongside strong demand for services from its existing
client base and historical performance that supports its projections. Based on
current trading, the extreme downside scenario is considered very unlikely.
The Group continues to monitor the collection of monies from clients with no
material delays in payments being cited and a significant proportion of its
recurring revenue fees are billed annually in advance.
Simon Brown
Finance Director
Group Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
£'000 £'000
Revenue 4,662 4,023
Cost of sales excluding amortisation (2,257) (2,289)
Gross profit excluding amortisation 2,405 1,734
Amortisation charged to cost of sales (759) (745)
Gross profit 1,646 989
Other operating income - 65
Administrative expenses excluding depreciation (2,966) (3,785)
EBITDA * (561) (2,731)
Depreciation (charged to administrative expenses) (58) (186)
Amortisation (charged to cost of sales) (759) (745)
Exceptional items (139) (1,526)
Operating loss (1,517) (5,188)
Investment revenues 3 17
Finance costs (65) (55)
Other gains and losses - 125
Loss before taxation (1,579) (5,101)
Income tax income/(expense) 1 (48)
Loss for the year (1,578) (5,149)
Other comprehensive income:
Items that may be reclassified to profit or loss
Currency translation differences:
- Translation gain arising in the year 131 78
Total other comprehensive income for the year 131 78
Total comprehensive income for the year (1,447) (5,071)
Loss for the financial year is all attributable to the owners of the parent
company.
Earnings per share
Basic (pence per share) (1.66) (7.64)
Diluted (pence per share) (1.66) (7.64)
* EBITDA refers to Earnings Before Interest, Tax, Amortisation, and
Depreciation. The notes provided herein form part of these group financial
statements.
Group Statement of Financial Position
as at 31 December 2024
2024 2023
£'000 £'000
Non-current assets
Goodwill 296 296
Intangible assets 3,604 3,606
Property, plant and equipment 37 83
Investments 248 -
Deferred tax asset 51 109
4,236 4,094
Current assets
Trade and other receivables 1,455 1,351
Current tax recoverable 123 74
Cash and cash equivalents 898 385
Assets held for sale 687 1,475
3,163 3,285
Current liabilities
Trade and other payables 2,613 2,364
Current tax liabilities 1 -
Borrowings 413 589
Lease liabilities 14 32
3,041 2,985
Net current assets 122 300
Net assets 4,358 4,394
Equity 382 169
Called up share capital
Share premium account 9,831 8,685
Merger reserve 2,601 2,601
Share-based payment reserve 53 158
Currency translation reserve 317 186
Retained earnings (8,826) (7,405)
Total equity 4,358 4,394
The financial statements were approved by the board of directors and
authorised for issue on 2(nd) May 2025 and are signed on its behalf by:
Chris Jepps
Chief Executive Officer
Group Statement of Changes in Equity
for the year ended 31 December 2024
Share capital Share premium Merger reserve Share-based payment reserve Currency Retained earnings Total
account translation
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 168 8,685 2,601 196 108 (2,378) 9,380
Year ended 31 December 2023:
Loss - - - - - (5,149) (5,149)
Other comprehensive income: Currency translation differences
- - - - 78 - 78
Total comprehensive income Transactions with owners: Issue of share capital - - - - 78 (5,149) (5,071)
1 - - - - - 1
Share-based payment charge - - - 84 - - 84
Transfer of exercised and lapsed share-based payments - - - (122) - 122 -
Balance at 31 December 2023 169 8,685 2,601 158 186 (7,405) 4,394
Share capital Share premium Merger reserve Share-based payment reserve Currency Retained earnings Total
account translation
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Year ended 31 December 2024:
Loss - - - - - (1,578) (1,578)
Other comprehensive income: Currency translation differences
- - - - 131 - 131
Total comprehensive income Transactions with owners: - - - - 131 (1,578) (1,447)
Issue of share
capital
213 1,146 - - - - 1,359
Share-based payment charge - - - 52 - - 52
Transfer of exercised and lapsed share-based payments - - - (157) - 157 -
Balance at 31 December 2024 382 9,831 2,601 53 317 (8,826) 4,358
Group Statement of Cash Flows
for the year ended 31 December 2024
2024 2023
£'000 £'000 £'000 £'000
Loss for the year before taxation (1,579) (5,101)
Adjustments for:
Finance 65 55
costs
Investment (3) (17)
income
Gain on disposal of property, plant and equipment
- 8
Amortisation of intangible 759 745
assets
Impairment of intangible assets - 335
Depreciation of property, plant
and
58 186
equipment
Impairment of property, plant and equipment - 626
Impairment of held-for-sale properties 139 -
Other gains and losses - (125)
Equity settled share based payment
expense 52 84
Decrease in provisions - 25
Cash flow from operations before working capital movement
(509) (3,179)
Movements in working capital:
Increase in contract 231 (231)
assets
Decrease in trade and other receivables (213) 82
Increase in contract 552 904
liabilities
Decrease in trade and other payables (551) (692)
Cash absorbed by operations (490) (3,116)
Income taxes refunded 11 278
Net cash outflow from operating activities (479) (2,838)
Investing activities
Capitalisation of internally developed
intangible assets (763) (881)
Purchase of property, plant and equipment (8) (27)
Proceeds from disposal of property, plant and equipment
1 -
Proceeds from disposal of held-for-sale property
650 -
Interest received 3 17
Net cash used in investing activities (117) (891)
2024 2023
£'000 £'000 £'000 £'000
Financing activities
Proceeds from issue of shares 1,700 1
Share issue costs (342) -
Proceeds from new bank loans 390 -
Repayment of bank loans (566) (91)
Payment of lease liabilities (23) (160)
Interest paid (65) (55)
Net cash generated from/(used in) financing activities
1,094 (305)
Net increase/(decrease) in cash and cash equivalents
498 (4,034)
Cash and cash equivalents at beginning of year 385 4,322
Effect of foreign exchange rates 15 97
Cash and cash equivalents at end of year 898 385
Notes to the Group Financial Statements
for the year ended 31 December 2024
Basis of preparation
Whilst the financial information included in this preliminary results
announcement has been prepared in accordance with the recognition and
measurement requirements of UK-adopted International Accounting Standards this
announcement does not itself contain sufficient information to comply with
UK-adopted International Accounting Standards and does not constitute
statutory accounts for the purposes of section 434 of the Companies Act 2006.
The principal accounting policies used in preparing this preliminary results
announcement are those that the Company has adopted for its statutory accounts
for the year ended 31 December 2024 and are unchanged from those previously
disclosed in the Group's Annual Report and Accounts for the year ended 31
December 2023.
Statutory accounts for 2023 have been delivered to the Registrar of Companies
and those for 2024 will be delivered in due course. The Company's auditors
have reported on the 2024 accounts; their report was unqualified, did not draw
attention to any matters by way of emphasis without qualifying their report
and did not contain statements under s498 (2) or (3) Companies Act 2006. The
2023 audit report was unqualified, but did draw attention to a material
uncertainty related to going concern without qualifying their report and did
not contain statements under s498 (2) or (3) Companies Act 2006.
The statutory accounts for the year ended 31 December 2024 were approved by
the board on 2 May 2025.
Going concern
After reviewing the Groups forecasts and projections, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, being a period of at least
twelve months from the date of approval of these financial statements. The
group therefore continues to adopt the going concern basis in preparing its
financial statements. Information used to make this decision is detailed
below.
In making the going concern assessment, the Board of Directors has considered
Group budgets and detailed cash flow forecasts to 30 April 2026. 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. Included in these forecasts is the sale of
the freehold property, Nicholson House successfully concluded in February 2025
delivering net proceeds of £0.3m.
The Directors then further apply sensitivity testing to the revenue profiles
based on the achievement of various levels of revenue from noncontractually
committed sources. Alongside managements base case forecast which incorporates
the positive impact of the cost saving measures implemented in Q1 of 2025,
management prepared an extreme downside scenario where, outside of committed
revenue and an historically validated rate of renewal for existing contracts,
reduced revenue across recurring and services of £600k was modelled. Under
this less probable and very negative scenario the Group has considered the
potential actions available to management to mitigate the impact of these
sensitivities.
Financial performance in 2025 is not expected to be materially impacted from
2024 levels due to the long-range revenue visibility through its recurring
revenue business model alongside strong demand for services from its existing
client base and historical performance that supports its projections. Based on
current trading, the extreme downside scenario is considered very unlikely.
The Group continues to monitor the collection of monies from clients with no
material delays in payments being cited and a significant proportion of its
recurring revenue fees are billed annually in advance.
Earnings per share
2024 2023
Number Number
Number of shares
Weighted average number of ordinary shares for basic earnings per share 95,186,704 67,381,385
2024 2023
Earnings £'000 £'000
Continuing operations
Loss for the period from continued operations (1,578) (5,149)
2024 2023
Pence per Pence per
share share
Basic and diluted earnings per share
From continuing operations (1.66) (7.64)
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' and 'Adjusted Earnings per share' as a
Key Performance Measure, which is defined as earnings before exceptional
items. The calculated Adjusted Earnings for the year is as follows:
2024 2023
£'000 £'000
Loss for the period from continued operations (1,578) (5,149)
Adjusted for:
Exceptional items (139) 1,526
Adjusted earnings (3,623)
(1,439)
Basic adjusted earnings per share (pence/share) (1.51) (5.38)
Events after the reporting date
In February 2025 the asset held for sale (Nicholson House) was sold for
£725,000 less costs to sell, expected to be £38,000.
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including directors, is set out
below in aggregate for each of the categories specified in IAS 24 Related
Party Disclosures.
2024 2023
£'000 £'000
Short-term employee benefits 920 1,257
Post-employment benefits 29 42
Share-based payments 26 48
975 1,347
Other information
The Company has taken advantage of the exemption available in FRS 101 whereby
it has not disclosed transactions with the ultimate Parent Company or any
wholly owned subsidiary undertaking of the Group, which would otherwise be
required by IAS 24 'Related Party Disclosures'.
Notice of Annual General Meeting
The notice convening the Annual General Meeting of the Company has been posted
to shareholders and the Annual Report and Accounts will be posted to
shareholders shortly, with both soon to be available at the Company's website
www.getech.com (http://www.getech.com) . The Annual General Meeting of Getech
Group plc will be held on 29 May 2025 at 10.00 a.m.
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