Marine seismic specialist Thalassa (THAL:AIM) gains 17.3% to 44.6p as it ups 2016 revenue and profit guidance for its WGP Group subsidiary and says there could be further upgrades to come.
Thalassa is a holding group for two businesses - WGP is its core operation and sits alongside an autonomous underwater vessel venture, Autonomous Robotics.
WGP’s portable modular source (PMSS) equipment is installed on vessels and the seismic information generated by this offshore kit is analysed to shape production strategy on mature assets. This approach is known within the industry as permanent reservoir monitoring (PRM).
In addition to its PRM activities the firm also carries out more traditional 2D and 3D seismic services, as well as project management and technical consultancy work.
A string of contract wins saw the shares top £3.00 in early 2014 but the company has been hit hard by the intervening industry downturn.
Having stabilised the business, the board is confident on the outlook for 2017, barring a sustained collapse in the oil price below $40 per barrel.
For 2016 revenue is now expected to hit $13.9m from the $10.5m flagged on 19 September and pre-tax profit is expected at $1.6m rather than $1.1m. This is thanks to $2m of late data sales (10 Oct) and strong cost control.
The new estimate includes substantial provisions for costs for personnel, maintenance, repairs and equipment upgrades. The group says it has taken a ‘very conservative view’ on these provisions and if they are more than the final requirement pre-tax profit could be boosted by a further $1.5m.
