Pre-tax profits fall at oil exploration data company
GETECH, the oil exploration company, today announced a drop in pre-tax profits in its first half as it said inertia in the market led to a slow down in major sales.
The Leeds-based business, which was a spin out from the University of Leeds and specialises in the provision of exploration data and geological exploration studies to oil companies, saw pre-tax profits fall to £233,000 in the six months to January 31, down from £1.4m last time.
Revenue came in at £3.1m, down from £3.97m.
During the period, Getech said the business has been affected by general restrictions on spending by its clients, in large part the major exploration and production (E&P) companies.
Getech said: “The performance of E&P companies has been weak during this period, for which several reasons have been put forward, including increased costs, expectation of lower oil prices and a lower exploration success rate. Likewise, the exploration services market has been negatively impacted which has led to a number of the major seismic consultancies showing large falls in revenue and profit and significant share price falls. These observations notwithstanding, our regular discussions with clients and the wider industry suggest that our products and services remain attractive and in demand.
“By the end of the period the cash balance amounted to £4.1m. The company is hence still in a very strong financial position.”
Stuart Paton, non-executive chairman, said: “We start the second half of our year with strong cash balances and a substantial pipeline of sales opportunities. More importantly, the feedback from meetings early in 2014 suggests that not only do clients remain interested in our major products, but they now have budget available to spend.
“The oil price has been, and is currently, above the corresponding prices last year and we do not see signs of it weakening. As such, we are optimistic that the trading performance in the first half represented a short term market-related issue and we remain confident about our medium and longer-term prospects.”
