Reduction in cash 'temporary', says Getech

Geoscience and geospatial provider Getech Group updated the market on its 2017 financial year on Wednesday, confirming it closed sales with a total value of £8.5m, of which £7.7m would be recognised in its results.

The AIM-traded firm said the balance of £0.8m related to full year 2018 deliverables.

It said a “significant programme” of cost saving measures were implemented in the year to 31 July, which resulted in underlying costs on a like-for-like basis being 32% below those in the 2016 year.

However, restructuring costs of £0.5m, merger and acquisition payments of £0.5 and debt repayments £0.1m resulted in an additional £1.1m cash outflow.

Cash balances at year-end totalled £1.7m, which compared to an opening cash balance for the year of £2.8m.

The board said the reduction in cash was temporary, reflecting the timing impact of several “unforeseen and exceptional” payment delays, which at year-end totalled £1.0m.

It said the late payments had now been received, and at 18 September group cash balances totalled £2.4m, which was said to be reflective of more normal working capital conditions.

Adjusting the 2017 financial year for £1.0m of delayed customer payments and a combined £1.1m of redundancy, M&A and debt costs, Getech said its operations delivered an underlying year-on-year net cash inflow of £1.0m.

“Having been distorted by year-end cash timing issues that lay outside of the group's control, and after one off restructuring and M&A payments, our current cash balance of £2.4m highlights how the 2017 programme of cost reductions and operational enhancements have strengthened Getech's underlying financial position,” said CEO Jonathan Copus.

“When combined with a healthy inventory of revenue to pre-fund FY 2018 product development the group is well positioned to target a variety of fresh operational opportunities.”