The response to a profit warning from geo-physical data specialist Getech (GTC:AIM) is a reminder not to take anything for granted when it comes to the financial markets as it advances 3.2% to 49p.
The company, which sells its data to oil and gas companies, says its results for the year to 31 July will be slightly below current market expectations. It expects to post pre-tax profits of £2 million on revenue of £8.5 million - Thomson Reuters had consensus forecasting £2.2 million of profit from £9.3 million of revenue.
The sanguine response from investors reflects the fact this is a creditable performance in extremely difficult circumstances. The business is operationally geared- generating high margin data sales on a fixed cost base - so a 29% year-on-year increase in revenue translates into a 100% increase in pre-tax profits.
Getech’s recent strategy has involved reducing its exposure to volatility in oil and gas spending by focusing on big bits of business with national oil companies (NOCs) and signing multi-year contracts with clients.
Three major NOC contracts were announced during the financial year just ended and longer term contracts include the commitments to its Globe interpretative data project. While these have not entirely spared the firm from any impact it has made it more resilient than in the previous big industry downturn in 2009.
