Getech Group plc

("Getech" or the "Company")

Final Results for the 12 months ended 31 December 2023

Getech (AIM: GTC), a world-leading locator of subsurface resources, is pleased to announce its Final Results for the 12 months ended 31 December 2023.

Financial highlights

·      Revenue £4.0 million (2022: £5.1 million)

·      Orderbook £4.6 million (2022: £4.6 million)

·      Annualised Recurring Revenue £2.8 million (2022: £2.4 million)

·      Cash at bank £0.4 million (2022: £4.3 million)

·      Kitson House sold for £0.65 million in January 2024, Nicholson House remains an asset for sale valued at £0.85 million

Operational highlights

·      New Globe and gravity & magnetics data customers added, plus 42% year-on-year increase in subscription licenses

·      Globe 2023 released on plan, with new features applicable across multiple energy sectors (oil & gas, mining, carbon capture and storage (CCS) & geothermal)

·      Added new capabilities to our minerals exploration capabilities, including artificial intelligence & machine learning, as well as new solutions for lithium, porphyry copper and clean gases (such as natural hydrogen and helium)

·      Joint exploration venture agreement signed with East Star Resources to pursue copper exploration in Kazakhstan

·      Strategic minerals exploration projects delivered for multiple organisations, including East Star Resources, Asian Battery Metals and Western Australia's Centre for Exploration Targeting

·      Signed joint exploration agreement with a major European-headquartered global industrial and energy company focussing on natural hydrogen exploration

·      Strategic collaboration with Cozairo to identify CCS opportunities

·      Strategic partnership with Eavor to jointly locate and appraise a portfolio of geothermal projects in Latin America, with additional Geothermal partnerships signed with Expro and RED Engineering Design

·      Completed a geothermal screening project for the manufacturing sites of a multinational FMCG company

FY 2024 Current Trading

·      Unaudited revenues in the first 4 months 17% ahead of the same period last year

·      Benefit of the rationalisation actions in 2023 taking effect in full for 2024

·      New business wins in H1 with strong H2 pipeline

·      Targeting EBITDA/Cash positive

Michael Covington, Chairman of Getech, said, "Getech is a different business now compared to the start of 2023. We have taken important decisions to lighten the cost base and refocus the business on its strengths which are to help our clients locate sub-surface energy and mineral resources. Whether it is more sustainable sources of hydrocarbons, critical minerals for the energy transition such as copper or lithium, geothermal resources or extractable geologic sources deposits of hydrogen, we are already supporting our clients. We are particularly excited about using new AI tools and resources that have the potential to accelerate key aspects of our unique geo data driven approach." 

Strategic Report

Chairman's Statement

Introduction

I am pleased to report on a year of significant progress against a challenging market backdrop. This began with changes to the management team in February 2023 with the appointment of Richard Bennett as CEO having previously been Non-executive Chairman and I moved from Non-Executive Director to become Non-Executive Chairman in February 2024.

During this period, the Company has been significantly refocused and restructured back onto a tight focus on its core competencies.  We are now at a point of inflection and our strategy will remain being absolutely focused on sustainably growing underlying profitability whilst investing in enhancing our advanced geoscience technological and product distribution capabilities.

In 2021, the Company acquired H2 Green, a developer of green hydrogen transportation hubs. This early-stage company has required significant investment to progress whilst being affected by significant delays in key Government incentive policies. Operating both the core business and H2 Green was overstretching our resources and so we took the decision either to seek operational partners to help us develop or exit the H2 Green projects, while at the same time significantly reducing the H2 Green headcount and cost-base. This contributed to reducing the ongoing costs of the business by 25%, a reduction of c. £2 million per annum, thereby resetting the financial base of the business.

We have refocused on our core competence of data-led sub-surface exploration. We continue to target diversification of our customer base beyond oil and gas, with the ambition that at least 50% of our business should come from exploration companies focused on finding the natural resources that are vital for the energy transition such as critical minerals, geothermal and carbon storage.

Our financial performance in 2023 reflected the transition we undertook. We generated revenues of £4.0 million (2022: £5.1 million), held our order book at £4.6 million and increased our Annualised Recurring Revenue (ARR) to £2.8 million (2022: £2.4 million). As previously reported, we recorded an adjusted EBITDA loss of £2.7 million, reflecting the cost of investment in H2 Green, and a period of reduced revenue from core customers and the early stages of transitioning the business.

Cash resources have been depleted by the above commercial factors so we are keeping a tight rein on discretionary expenditures and budgets generally and pursuing a sale of Nicholson House.   Working capital remains lower than in the past and the Board naturally views rebuilding it as a priority in 2024.  Alongside the sale of Nicolson House, the Board is exploring other options to enhance our working capital. A restoration of cash resources would facilitate further investment into sales and business development, as well as advance our AI and Machine Learning enhancements to make our products more relevant to our key markets, and in particular critical minerals and natural hydrogen. 

There are signs in 2024 that customers are returning to investing in exploration activities.  Unaudited revenues in the first 4 months of 2024 were ahead of the same period last year, and we continue to see good upside potential in our principal markets.

Data-led sub-surface exploration

We are applying the Company's core geoscience data and skills to support exploration of these vital energy resources. To achieve the energy transition, a substantial number of new, very large discoveries are required. Whilst the more easily identifiable discoveries have been made, the future depends on finding deeper and less obvious resources, which is where Getech can deploy its global geoscience data and proven expertise.

Getech has the largest commercially available database of potential fields data (magnetic and gravity data) that is accessed through our Globe platform usually as a "Software as a Service" (SaaS) type subscription which we provide via our new cloud based Maptium^TM platform. Moreover, when AI and Machine Learning techniques are applied, these can rapidly search our data for the indications of specific minerals and improve exploration success rates. Over the last year, we have continued to develop our Globe platform, advance our AI/ML technology and introduce new search capabilities for critical minerals including copper and lithium, as well as well as the source rocks for natural hydrogen (also called 'white' or 'geologic' hydrogen). We expect to continue development throughout 2024 and add search capabilities for other high-demand commodities to our platform.

Business model

We have continued to migrate Globe and our geoscience data products to a subscription model which has significantly increased annual recurring revenue (ARR), improving the Group's financial stability. A core focus is to grow ARR to in-excess of the cost-base over time and we are confident of being able to do so. Alongside this, we have also introduced to specific customers or projects an equity participation model in return for lower initial fees. This is creating a future share in assets with the potential to generate substantially higher returns from our data than has been achieved historically.

Outlook

Energy security remains a key concern, catalysing, in our opinion, increased activity over the last 12 months in the traditional oil and gas exploration sector. Meanwhile, the mining sector continues to report significant anticipated supply gaps across multiple commodities that should all be essential to delivering the Energy Transition.

Getech's corporate strategy is a response to these strong underlying trends and focuses on monetising the Company's capabilities across the geo-energy sector as well as seeking opportunities for transformational growth in critical minerals and potentially geological hydrogen. We are working on resolving our near-term liquidity concerns while at the same time evolving our offerings and unique propositions; growing our order book; expanding our pipeline; innovating our business models; and despite some near-term uncertainty over the route through to working capital self-sufficiency, we see exciting strategic prospects for the business.

Michael Covington

Chairman

Operational Review

The last year was a transitional period while making significant progress towards an evolved strategy. New sales wins were more challenging to find than in previous years, but the Company maintained high oil and gas customer retention rates, added new software customers, increased annually recurring revenue and continued to repurpose its offerings for the energy transition, including making significant progress in enhancing its mineral exploration capabilities with artificial intelligence and machine learning.

Business overview

Getech's strategy focuses on monetising its proprietary data and expertise through subscription sales, solutions and selective asset participation. We generate revenue by locating new energy and mineral resources using the world's largest commercially available database of potential fields (gravity and magnetics) data assembled over c. 30 years and our proprietary Earth digital twin, called 'Globe'.

Developed over the last c. 14 years, Globe uniquely models Earth's evolution over the past 400 million years, combining extensive data with a user-friendly software interface. Its integrated geological, climatic and oceanographic data offer valuable insights for locating natural resources in the subsurface, including petroleum, carbon storage, geothermal, natural hydrogen and critical mineral assets. Globe is an innovative product that collects geoscience and earth observation data, and through proprietary computational modelling and AI-led machine learning techniques, identifies favourable exploration opportunities for our customers.

Getech's subsurface expertise is crucial for numerous net zero strategies, positioning the Company to advance decarbonisation across multiple industries.

Oil and gas

In response to a renewed focus on energy security, Getech saw high customer retention rates in its oil and gas activities in 2023. 

This was underpinned by the continuing development of our flagship product 'Globe'. The latest release, Globe 2023, included new content and analytical tools designed to aid in the exploration of oil and gas, including updated palaeosurface geology layers that can also assist in identifying potential carbon storage sites by better understanding the composition and quality of reservoirs. During the year, new Globe customers were added, including a new three-year subscription for an Asian oil and gas company.

In H2 2023, Getech signed a strategic collaboration agreement with US headquartered Cozairo, a specialist in carbon capture and storage (CCS) and a blue hydrogen project development company. Through this partnership agreement, the two companies will work collaboratively to identify CCS opportunities, providing a more complete market offering for CCS solutions to address the challenge of climate change.

2023 saw a 42% year on year increase in the number of subscription licenses for Getech's other software products: Data Assistant, Exploration Analyst and Unconventionals Analyst. This was largely driven by strong growth in the US onshore shale gas operations and investment banking sectors.  This licence expansion was underpinned by new releases of all three software products, delivering enhanced functionality and performance across the product suite.

Our GIS Services team increased its revenues over the prior year and saw renewals of key strategic contracts - including the Company's largest single services contract with a major energy joint venture, which was renewed for multiple years and so helps ensure strong future revenue visibility.

Unfortunately, in 2023, our Gravity and Magnetic Solutions team had a challenging year. While data sales were increased compared to the prior year, the team's customer project work was adversely affected by the delay of several large contracts - due to factors outside of our control - leading to below forecast performance for our expert G&M services. In 2024 to date, we have seen stronger demand for these services and have a solid pipeline of opportunities from which to win new services revenue.

Critical minerals

Crucial to electrification required for the energy transition, the copper market has an expected supply gap of 6.5 million tonnes per year by 2031. Getech's unique data and analytics are ideal for discovering new sedimentary-hosted copper deposits in unexplored areas, which account for about 20% of total copper production today. However, this source is more widely distributed than others and can be processed with a lower carbon footprint. Additionally, 80% of cobalt, a key component of batteries that also plays a critical role in the energy transition, comes from sediment-hosted copper mines.

In H2 2023, Getech successfully completed an exploration project for Asian Battery Minerals, a participant in the 2023 BHP Xplor accelerator program, targeting potential nickel deposits in Mongolia. Also in H2 2023, Getech joined a consortium of academia and industry to speed up the understanding of copper deposits required for the discovery of critical metal needed for renewable technologies. The three-year Kupferschiefer project aims to create maps of mineral prospective areas within the Central European Basin. The project, led by the University of Western Australia's Centre for Exploration Targeting (CET), has university funding as well as industry sponsors, including the University of Warsaw, First Quantum Minerals, Teck Resources and BHP.

In the first few months of 2024, Getech has built on these successes by entering into a joint venture agreement with East Star Resources plc, a London listed copper exploration company, to pursue copper exploration in Kazakhstan. Using our proprietary data, enhanced by in-house Artificial Intelligence (AI) capabilities, we are conducting a mineral systems analysis and structural interpretation for sedimentary-hosted copper to pinpoint prospective areas in mineral rich, yet underexplored, basins in Kazakhstan. East Star will lead the application process for the tenements / licences and spearhead operational activities. In return for our services, we will have a call option to obtain shares at nil cost in the JV Company, equivalent to 5% of its issued capital, once exploration licenses are secured within the project areas. Getech's 5% share is protected against dilution until a decision to mine has been made at one or more of the mining licenses. 

This transaction is the first example of our equity participation strategy and demonstrates a change from generating fee income from subsurface searches to asset participation with the potential to generate substantially more value from our unique data and expertise.

Lithium is forecast to experience a 40-fold demand increase by 2050, driven by its essential role in renewable energy storage and electric vehicles. Finding new resources of lithium is time critical as it takes five to ten years to develop and commission a mine. According to the IEA's recent critical minerals review, exploration spending for lithium increased by 90% in 2022, the highest growth rate among all energy transition minerals.

In H2 2023, Getech launched a solution to identify global sedimentary lithium deposits. Using its Globe earth model as key input data, Getech's novel solution integrates additional structural interpretation, paleoclimate modelling and advanced geospatial analysis to predict resource locations.

To assist with its continuing efforts in the sector, Globe 2023 introduced numerous features aimed specifically at mineral exploration - such as a new dynamic plate model, enhanced paleogeographies and extended palaeosurface geology coverage. These improvements are designed to deepen understanding of the ancient land surface and its composition, a crucial aspect in successful resource exploration. The enhancements to the plate model in particular shed light on how tectonic movement has influenced the location of resources in the present day. In addition, Globe 2023 contains significant enhancements to its stratigraphic lexicon. This updated data, combined with its paleogeographic and palaeosurface geology reconstructions, offers exhaustive details about the composition of sedimentary basins, which is instrumental in locating basin ores such as sedimentary copper as well as lithium.

Geothermal and corporate decarbonisation

Getech's subsurface expertise combined with advanced analytics enables the rapid and cost-effective identification of locations that are potentially prospective for geothermal energy.

In January 2023 Getech and Eavor - a global geothermal technology company - signed a strategic partnership to jointly locate and appraise a portfolio of geothermal projects in Latin America. Eavor was already a customer of Getech's data and services, and through this work Getech has generated revenue and demonstrated its geothermal expertise. This has now translated to an asset-based partnership that is broader, more strategic and more valuable for both parties.

In H2 2023, Getech completed a geothermal study for Angus Energy, demonstrating significant potential in a UK development. Angus Energy is committed to leveraging its oil & gas drilling and engineering expertise to develop geothermal energy projects. To achieve this, the company enlisted Getech's subsurface expertise to locate and assess promising areas for geothermal energy production in Southwest England. Getech identified favourable locations for geothermal energy applications and delivered an in-depth geoscientific interpretation that included structural mapping, depth estimation and heat flow analysis. The assessment, which featured 2D modelling and 3D inversions, enables Angus Energy to make informed and cost-effective decisions regarding future development phases. Leveraging market-leading geologic and geophysical data, advanced geoscientific techniques and state-of-the-art technology, Getech is uniquely positioned to locate the energy and mineral resources necessary for the energy transition.

In H1 2024, we have extended the capabilities that we can offer low carbon geoenergy projects by partnering with Expro and RED Engineering Design. Expro is a leading provider of energy services with expertise in well evaluation and integrity. Initially, the primary focus of this partnership is to identify and expedite opportunities within the emerging low carbon energy sector. The partnership with RED Engineering Design, part of the ENGIE Group, focuses on advancing the decarbonisation of energy sources through innovative geothermal solutions.

Getech also offers tailored decarbonisation solutions that help non-explorer customers replace high-emission energy sources with low-carbon alternatives, such as geothermal, green hydrogen, CCS, wind and solar energy. These solutions include global screening of manufacturing sites and logistics operations, as well as location-specific feasibility studies. With expertise in geospatial energy optimisation, Getech can determine the most efficient approach to lower the emissions of assets.

In 2023, Getech completed a geothermal screening project for the manufacturing sites of a multinational FMCG company. We rapidly ranked c.130 sites worldwide based on their potential to replace current energy consumption with geothermal energy for decarbonisation purposes. The ranking was determined through the evaluation of numerous subsurface and above-ground factors. In addition to assessing the geothermal potential of each site, Getech provided a comparison against the relative potential for solar and wind energy.

We believe there are many industries that could benefit from our integrated decarbonisation solution - from consumer goods and manufacturing to logistics companies. Our proprietary data and unparalleled expertise in applying geoscience and geospatial analytics to solve specific energy challenges make Getech a perfect partner in the net zero transition.

Green hydrogen (electrolytic)

H2 Green Ltd, a Getech subsidiary, was established to develop green hydrogen transportation hub projects in the UK, in order to profit from the continued decarbonisation of transport and industrial processes.

During 2023, and following our change in CEO, we conducted a review of strategic business priorities for the Group, which concluded that a) a sufficient number of offtake partners had not materialised to progress our green hydrogen projects in the short-term, and b) support for green hydrogen from Government was not emerging quickly enough nor strongly enough to support our portfolio of projects.

As a result, we took the decision to focus on seeking operational partners to help us develop or exit the Inverness and Shoreham Port projects; while at the same time significantly reducing the H2 Green head count and cost-base; and made an accounting impairment against the goodwill recognised on the acquisition of H2 Green.

Inverness project

In March 2023, the Inverness project was chosen to receive a UK Government grant from the Net Zero Hydrogen Fund. However, our strategic review (which began after we had submitted the grant funding application) concluded that as the grant was awarded on a 'match funding' basis it would have required an unsustainable level of up-front capital from Getech and so we withdrew our application.

Since then, we have exited the Inverness project by transferring all the rights, obligations and liabilities of our MOU with The Highland Council to a confidential third-party in exchange for financial considerations that apply if and as project development milestones are achieved over the coming years - comprising two milestone related payments, totalling £615k.

Shoreham Port project

H2 Green had previously secured exclusive development rights for green hydrogen, renewable energy and importing ammonia at Shoreham Port in West Sussex to help establish a green energy hub.

We continue to maintain our project exclusivity and are working with Shoreham Port to find a development partner to advance the project. We expect the project to develop at a scale commensurate for the local demand of green hydrogen within the vicinity of the Port.

Natural hydrogen (geologic)

Natural hydrogen (also called 'white' or 'geological' hydrogen) is emerging as a potential game-changer in the energy transition, offering clean power with only water as a byproduct, at expected 'finding costs' a fraction of that currently being anticipated for green hydrogen.

In H2 2023, Getech commenced a natural hydrogen exploration project in Eastern Europe for a prominent European energy company. The project leverages Getech's extensive subsurface data and geoscience expertise to exploit the distinct magnetic characteristics of ophiolites - igneous rock formations considered sources of natural hydrogen. By mapping the extents and geometry of these formations, Getech provides vital data to identify potential hydrogen sources. As part of the project Getech undertakes 3D inversion modelling to distinguish the magnetic properties of such ophiolites from other sources of magnetic anomalies.

Also in H2 2023, Getech signed an agreement with LIAG (Leibniz Institute for Applied Geophysics), a partner in the HyAfrica consortium, to accelerate the exploration and development of natural hydrogen resources in Africa. The project aims to discover viable natural hydrogen deposits in Morocco, Mozambique, South Africa and Togo while assessing their economic and social impact. These findings will shape strategic plans for harnessing hydrogen as a sustainable energy source. Getech will contribute its best-in-class potential fields data, machine learning capabilities and geoscience expertise to support the consortium's research efforts, bolstering the project's ability to identify promising hydrogen resources.

In 2024, Getech built on these efforts by signing a joint natural hydrogen exploration agreement with a major European-headquartered global industrial and energy company, which aims to locate and develop economic accumulations. In addition to earning fees for its exploration services, Getech will also earn 5% equity interest in any licenses obtained within the designated area and will be 'carried' through the exploration phase, including field sampling, exploration drilling and well-testing.

Outlook

Energy security remains a key concern, leading to increased activity over the last 12 months in the traditional oil and gas exploration sector. Meanwhile, the mining sector continues to report significant anticipated supply gaps across multiple commodities that will be essential to deliver the energy transition.

Getech's corporate strategy reflects these underlying trends and focuses on monetising the Company's capabilities across the geoenergy sector as well as seeking opportunities for transformational growth: we are investing to evolve our offerings and unique propositions;  growing our order book; expanding our pipeline; and innovating our business models.

Richard Bennett                                                        Chris Jepps

Chief Executive Officer                                      Chief Operating Officer

Sustainability

Getech remains committed to sustainability and ESG principles, which form the backbone of our corporate strategy. Our focus on planet and people ensures that we continuously strive for a sustainable future and create value for our stakeholders.

Planet: Innovating for sustainability

Building on our pledge to become carbon neutral by 2030, Getech has made progress in reducing scope 1 and 2 emissions. This year, we have implemented further initiatives to minimise our environmental footprint:

·      Enhanced energy efficiency through optimised workspace design

·      Increased employee participation in our green commuting schemes

·      Continued to use renewable electricity and green gas suppliers

In 2023, in line with our mission to unlock the world's subsurface geoenergy potential and locate essential energy and mineral resources needed for decarbonisation, we expanded our product portfolio by introducing innovative solutions that contribute to a greener and more sustainable future. Our research and development efforts have yielded the following advancements:

·      A novel solution for locating natural hydrogen.

·      Expanded critical minerals exploration services that now include sedimentary-hosted lithium.

Natural hydrogen

Hydrogen is celebrated as a clean fuel: when burned, its only byproduct is water. However, there's a challenge: the majority of hydrogen currently used globally is grey hydrogen, produced by splitting methane with fossil fuels - a process that emits significant greenhouse gases. Green hydrogen, though environmentally friendly since it is produced using renewable energy sources, remains costly to produce at scale.

Natural hydrogen - also known as white, gold or geological hydrogen - stands out as a particularly promising source. It boasts not only low production costs but also minimal environmental impact due to its lack of associated greenhouse gas emissions. Recognising its potential, Getech has pioneered a robust workflow through the application of Mineral Systems Analysis approach. This innovative method predicts the locations of natural hydrogen deposits in the subsurface, which appear similar to mineral or hydrocarbon deposits.

Our approach utilises the Globe geoscience platform, extensive geophysical data and AI technologies to identify areas with the optimal geologic conditions for natural hydrogen production. This strategy not only supports sustainable energy development but also aligns with global efforts to transition to cleaner energy sources.

If the underground natural hydrogen deposits are substantial and can be extracted safely, they hold the potential to be transformative, offering a significant leap forward in the energy transition. This could drastically reduce reliance on fossil fuels and accelerate the adoption of hydrogen as a mainstream energy source.

Beyond our commercial ventures, Getech is committed to advancing scientific understanding and technological capabilities in this field. We actively engage in research collaborations with leading universities, aiming to refine our techniques and expand our impact on global energy solutions.

Sedimentary-hosted lithium

As the demand for renewable energy sources escalates, lithium has become indispensable due to its pivotal role in battery technology, particularly for electric vehicles and energy storage systems. Among the various sources of lithium, sedimentary-hosted deposits offer a promising avenue due to their significant advantages in terms of scalability, extraction efficiency and environmental impact.

Sedimentary-hosted lithium, often found in clay or hectorite deposits within sedimentary basins, represents a sustainable alternative to traditional hard rock or brine sources. These deposits can potentially be developed with a smaller environmental footprint, as they are typically located in regions with lower biodiversity and less ecological sensitivity. Moreover, the extraction and processing of sedimentary-hosted lithium generally consume less water and energy compared to other lithium sources, aligning with global environmental standards and reducing the overall carbon footprint of lithium production.

Getech is at the forefront of exploring sedimentary-hosted lithium, leveraging our subsurface expertise and advanced technological capabilities to locate these valuable resources.

People: Empowering our workforce and communities

Health, safety and wellbeing

At Getech, we are passionate about our people and truly value each individual contribution to the wider success of the business. Employee satisfaction and commitment are crucial for driving Getech's growth and fostering a thriving work environment, resulting in the retention and happiness of our valued employees. As such, our attractive benefits package, alongside our continued efforts to make Getech a great place to work, aims to incentivise our current talent to stay onboard, while attracting new, high calibre individuals to join us.

Getech remains committed to providing a physically and psychologically safe and supportive work environment, investing in the following initiatives:

•      Regular health and safety training

•      Mental health and well-being assistance programme

•      Enhanced flexible working arrangements to promote work-life balance

•      Financial advice from experienced wealth management

•      Life, private medical and business travel insurance

•      Bereavement support

•      Discounts on gym memberships and physiotherapy

Several initiatives benefit our employees while advancing energy transition goals:

•      Cycle to Work Scheme

•      Electric Vehicle Salary Sacrifice Scheme

We also support a range of extracurricular activities including a workplace cricket league and a sports and social club, which provide team building opportunities for all staff.

Equality, inclusion and diversity

Equality, inclusion and diversity are vital to Getech to create a safe and inclusive workplace. The Group's Equality, Inclusion and Diversity Policy sets out the expectations of all employees and Board to create this environment. We actively support diversity and inclusion and ensure that all employees are valued with dignity and respect.

The employment practices and procedures as part of our Quality Management System (QMS) exemplify fairness and transparency throughout the employment lifecycle, including recruitment and promotion.

We have consistently provided equal pay raises based on experience and performance. In 2023, a 4% pay rise was granted equally to all employees, excluding those with less than six months of service.

Transparency in remuneration is also essential to our commitment. We include salaries in job postings, basing them on the most recent salary for existing roles or conducting benchmarking for new positions.

The robust appraisal system at Getech directly supports inclusion and diversity by providing equal opportunities for growth and advancement to all employees, regardless of their background. By engaging regularly with their managers, employees from diverse backgrounds can openly discuss their career aspirations and receive tailored guidance to achieve their goals.

This appraisal system emphasizes the recognition of individual skills and achievements, ensuring that employees are evaluated based on merit, rather than on factors unrelated to their performance. This merit-based approach fosters an inclusive work environment where diverse perspectives and talents are valued. These appraisals help employees understand their career development path, which is vital in promoting diversity and inclusion. When employees can see how their unique skills and experiences align with Getech's vision, they feel more engaged and motivated to contribute to the company's success. This alignment also encourages a sense of belonging, enabling employees from diverse backgrounds to thrive in their roles.

Lastly, by identifying skills gaps or areas requiring further training, Getech ensures that all employees have equal access to resources that enable them to reach their full potential. This commitment to continuous learning and development further supports an inclusive workplace culture where every employee can succeed, irrespective of their background or identity.

Community engagement

Getech continues to give back to our communities through charity partnerships and volunteering efforts. During 2023, in response to the tragic earthquake and its aftermath in Turkey and Syria, Getech supported the DEC's Earthquake Appeal. Our Leeds office held a cake sale to raise funds. Getech staff donated a total of £335, with Getech contributing an additional £250. Employees across all offices were encouraged to donate directly to the DEC, with the added benefit of being able to Gift Aid their contributions.

Since 2016, our staff have also volunteered for MapAction - providing assistance with mapping, data and training. During 2023, Getech staff provided remote support to the charity in the aftermath of the Turkey-Syria earthquake, providing life-saving geospatial data, visualisation and mapping. We are seeking ways to increase our role in supporting MapAction including donations and training.

Financial Review

2023 was a year of transition for Getech, refocussing the business on core activities, taking action to reduce the cost base for 2024, and setting a course to return the business to profitability.

Revenue

In 2023, Getech's group revenue fell from £5.1 million to £4.0 million, a reduction of 21%. The fall in revenue was as a result of a reduction in expert services and spot sales of gravity and magnetic data. A significant contributing factor to these reductions were delays to customer projects and the lack of availability of funding for customer projects, which had a knock-on affect to our own revenue and sales.

As Getech continues to evolve its subscription model, despite the overall fall in revenue, revenue from recurring subscriptions increased by 7.5% from £2.2 million to £2.4 million. On an annualised basis, recurring revenues increased from £2.4 million at 31 December 2022 to £2.8 million at 31 December 2023.

Getech also maintained the value of its order book at £4.6 million from 31 December 2022, through to 31 December 2023.

Cost base

During H2 2023, Getech took steps to significantly reduce its cost base, removing c.£2 million of costs from the business on an annualised basis. Whilst it takes time for the cost benefit of these actions to be realised in 2024, during 2023 the Group's cost base was reduced to £7.6 million from £7.9 million in 2022.

Cost base reconciliation below shows how our cost base aligns with the financial statements.

Cost base is measured as, cost of sales, administrative costs and development costs, less depreciation, amortisation and movement in provisions.

Operating cash flows

Getech's cash outflow from operations, before working capital adjustments was £3.2 million (2022: £2.0 million outflow), which includes costs of sales totalling £0.7 million related to Getech's asset development business (2022: £1.2 million).

Having taken actions to remove c.£2 million of costs from the business, from which the group will benefit in 2024, Getech expects to be cash flow break-even from operations in 2024.

Liquidity and going concern

At the end of 2023, Getech held £0.4 million in cash and cash equivalents (2022: £4.3 million). In June 2024, Getech re-financed Nicholson House to secure a £0.5 million working capital facility, repayable in June 2025 or on the sale of the property.

Getech's business activities and the factors likely to affect our future development, performance and position are set out in the Operational Review. The financial position of the Group, our cash flows and liquidity position are described in the financial statements.

In making the going concern assessment, the Board of Directors has considered Group budgets and detailed cash flow forecasts to 30 June 2025. The detailed forecasting models are built from Board approved budgets. From these budgets, revenue forecasting is regularly updated to take into consideration new contractually committed revenues, market sentiment, our current sales pipeline and any other influencing factors. Included in these forecasts is the re-financing and/or sale of the freehold property, Nicholson House. The Directors then further apply sensitivity testing to the revenue profiles based on the achievement of various levels of revenue from noncontractually committed sources.

However, there remains a material uncertainty around the timing and sale value of Nicholson House and the level of non-contractually committed revenue, both of which could impact going concern. While the Directors have plans in place to manage any reasonably foreseeable circumstances, they forecast that there may be a need to secure additional funding in the short-term. 

Despite the uncertainties as described above, the Directors have a reasonable expectation that the Group has, or will be able to secure, adequate resources to continue in operational existence for the forecast period. For these reasons, they continue to adopt the going concern basis of accounting in preparing this financial information on behalf of the Board.

Andrew Darbyshire

Chief Financial Officer

For further information, please contact:

Notes to editors:

About Getech

Getech is a leading locator of the energy and mineral resources essential for the world's energy transition. Getech's unique data encompassing the most recent 400 million years of Earth's evolution, coupled with its geoscience expertise, AI-driven analytics and extensive GIS capabilities, enables the company to provide valuable and actionable insights to support resource discovery and development.

The company's client portfolio is wide-ranging, from governments, municipalities, natural resources and energy companies to consumer goods and computing services companies, all striving to become energy and minerals self-sufficient and drive towards net zero.

Founded in 1994 Getech is listed on the Alternative Investment Market of the London Stock Exchange ("AIM"), with ticker symbol GTC.

For further information, please visit www.getech.com.

Group statement of Comprehensive Income

for the year ended 31 December 2023

All activities are continuing operations.