Getech Share Discussion Threads

[yump] 03/11/2015 20:52

Just revisiting the trading statement from earlier:

"The Company also notes that although three major contracts with NOCs were announced during the year to July 2015, only the Sonangol contract (announced in September 2014) generated income during the year. The Company anticipates that all three clients will generate significant income in the coming year."

[bookbroker] 03/11/2015 17:49

This is a crazy price for a co. that has a fantastic product, and nearly £5mln on its balance sheet, having said that we are where we are due to the complete lack of visibility over the next 6/8 months, and today's weak statement. Nonetheless this co. has been here before, but in a much weaker financial position, still the market can be harsh and this is reflected in the current share price, having said that the net assets of this co. are not far below where we are, this will be largely ignored as forward revenues are what the market is interested in, not history, however if as a contributor to exploration cos. in the oil sector principally it will be only when the wash has been taken out of the excessive inventories and production that exists in the oil market, I'm sure that a conservative management are aware of this , and let the industry take its natural passage, at least time is on this cos. side!

[cockerhoop] 03/11/2015 16:20

RCT,You do open yourself up for it by saying you sold everything oil related 12-18 months ago whilst you CR were buying PRES and GTC within the last 12 months and calling PRES a classic Phillip Pullman 3 year hold as late as May this year.

[bookbroker] 03/11/2015 16:15

Just checkin pal!

[rcturner2] 03/11/2015 15:12

bb, I bought them for 39p last Dec and sold them in Feb for 50p.

Are you a stalker?

[pugugly] 03/11/2015 15:05

Getting back to the company has anyone calculated what the results would have been without the largest ever contract.

This was the $5m of consultancy for Sonangol which was completed to schedule, and the majority of the income was recognised within the year to July 2015. So take this off the top and bottom lines.

Quick back an envelope calcuation suggests profit might have been lower than last year (ie 2014.)

Chairman is flying warning flags so I fully endorse bookbroker's 1311 above and unless they can obtain a similar sized contract this year PROFITS (SUBJECT TO REVENUE RECOGNITION TIMING) could be well below brokers estimates (imo)

[bookbroker] 03/11/2015 13:05

Well December 2014, post 1204!

[bookbroker] 03/11/2015 13:03

RCT., looking back u were accumulating stock as early as the beginning of this year!

[bookbroker] 03/11/2015 12:58

Demographics, what u on about, will not matter if u have a stong relationship with ur clients!

[rcturner2] 03/11/2015 12:23

biggest problem going forward will be demographics

[cockerhoop] 03/11/2015 12:22

Interest piece by 'very bright' Hallucigenia over at TMF on POO

[pugugly] 03/11/2015 11:38

yump:> Some very pertinent points. Here is another three (very briefly summarised below) to consider which will have (imo) will have a very significant impact on investment decisions but timeframe and direction are uncertain - at least to me - your thoughts would be appreciated.

* Improved productivity as a result of digitisation has and will continue to reduce the requirement for labour - so what happens to all the surplus labour whose purchasing power will be reduced and thus reduce demand.

* Virtually all developed economies are being supported by quantative easing so what happens when (or if) it stops and how do Central Banks deleverage their balance sheets with the consequential squeeze on liquidity

* Global warming (imo) is proven so there is a very high probability of negative climate change with a reduction in agricultural productivity and increased migration.

Just thoughts but (imo) potentially major impacts on investment returns.

[cockerhoop] 03/11/2015 10:15

PUG,

There's also still US producers who shrewdly forward sold their output for 2015 at $80 so are happily producing all they can currently, these hedges will work through in time. US output has to fall off eventually you can't reduce rig count by 60-70% without some effect.

US shale producers reportedly heavily in debt so it will probably be the banks that control their destiny.

Time will tell :-)

[cockerhoop] 03/11/2015 10:06

So what we have is a company valued at approx £12m with £4.7m in cash (£1m in borrowings) which also owns it's own HQ mortgage free and is shrewdly looking to expand footprint in the bad times when assets are cheap.

It's now on a cash adjusted historic PE of less than 4. Decent dividend to boot.

Forecasts for 2016 were £10.7m rev £2.7m PBT, obviously these will be reduced.

[pugugly] 03/11/2015 09:58

Not sure about the long term price of POO. According to Goldman at a recent conference the marginal cost of many shale producers is some $45 and they have already drilled but not fracked a large number of wells. So if the price of POO rises they can turn on production with about a month - So in their opinion along with many in the industry the price of oil will remain lower and longer than many expect. Current expectation is a top of some $60.

[cockerhoop] 03/11/2015 09:40

RCT,

From memory I'm sure you were buying PRES in December 14 at £6-£7 as I remember suggesting caution to you.

[bookbroker] 03/11/2015 09:39

They don't, hence the importance of OPEC remaining United, it is in no producing country's interest to produce oil I economically! The supply/ demand balance always remains fine, just as that the pendulum is firmly in the supply camp right now!

[rcturner2] 03/11/2015 09:16

The price is determined by supply and demand, and to my mind the large OPEC players no longer have enough leverage to control the price. I think low prices are here to stay.

[bookbroker] 03/11/2015 09:08

I agree, low oil prices will cease in 2016, Gulf nations will finally realise that their whole basis of placating a restless population is dependent on oil revenue, there is likely to be civil unrest again soon, we are talking Middle East, saudi Arabia is walking a very fine as regards its future budgets, so far their strategy of forcing capacity out the market has failed, as long as Russia keeps pumping record amounts and the advent of Iranian oil then their belief that the US shale boom is to blame, then they are deluding themselves, the price will pick up again sooner than all believe, the elastic band is stretched to near snapping point as I speak!

[rcturner2] 03/11/2015 09:06

bb, I sold ages ago and explained my reasons. I exited all commodity and related stocks 12-18 months ago, surely you can see that the landscape has changed?

[cockerhoop] 03/11/2015 09:00

Clearly oil services is a shocking area to be in at the moment but to suggest it's the end for all Oil service companies is tripe.

On a macro scale there is still no reduction in US Oil output (despite a reduction of 60-70% in rig count), eventually US output will reduce and the oil price will recover imo.

The deeper the slump, the sharper the rise will be.

GTC made £2m last year which is approximately £2m more than Pugugly's prediction in Dec.