Getech Group’s Share Price Crashed 29.7% After Trading Update

The GETECH Group Plc (LON: GTC) share price crashed 29.7% after releasing its trading update for the fiscal year ending December 31, 2023. The report highlights current positive and negative trends that are expected to impact the company's performance.

Getech, a global leader in subsurface resource location, revealed that In recent months, caution has grown among its client base, primarily located outside the UK, due to global economic and political uncertainties. Consequently, several projects initially scheduled for this fiscal year are now anticipated to shift to 2024.

As a result, annual sales for the current fiscal year are projected to range between £4.0 million to £4.4 million, falling below market expectations.

Despite the lower revenue expectations for 2023, the demand for Getech's services and data is rising for 2024 and beyond. The company's order book currently stands at £3.7 million (£4.4 million as of June 30, 2023), with approximately half expected to convert into revenue in 2024.

Getech has re-focused its strategy on its core business of subsurface resource location, targeting an annual cost reduction of £2 million, with £1.3 million benefiting the current fiscal year. This involves scaling back personnel on the H2 Green projects and leveraging Getech's existing management team. The company is actively seeking equity partners for these projects.

Efforts are underway to manage working capital, including monetising Kitson House, accessing receivables finance, and reducing costs in 2024. The aim is to achieve positive cash flow from operations in 2024.

In August, Getech introduced natural hydrogen as a new search genome on the Globe platform, completing its first commercial project in Eastern Europe. This project serves as a valuable case study for prospective customers.

Richard Bennett, Getech’s 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.”

Getech Group share price. 

The Getech Group share price crashed 29.66% to trade at 5.10p from Thursday’s closing price of 7.25p.