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

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

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

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

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

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

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

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

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

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

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

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

KeyFacts Energy Industry Directory: GETECH