Geophysical data specialist Getech (GTC:AIM) slumps 15.1% to 41.2p as it warns pre-tax profit for the year to July will be 'significantly below market expectations'.

The company blames wider weakness in the upstream oil and gas service industry and despite identifying £2 million worth of leads says the expected cycle time to convert this pipeline into revenue will lead to the flagged shortfall. The business is highly operationally geared – with high margin data sales on a fixed cost base (mainly technical staff) – so the impact on the bottom line is likely to be significant.

Today's announcement follows an earlier warning on interim numbers in February as the usual pattern of companies vainly looking for a strong second half to rescue a weak first half repeats itself. Ultimately the numbers for the six months to 31 January saw revenues down 21.6% and pre-tax profits off by 83.3% at £233,000.

The company says it is seeing increased signs clients are disposed to start spending again and the market is returning to normal but investors may take some convincing given the run of bad news. Year-to-date the share price has more than halved.

House broker WH Ireland puts its 'buy' recommendation, 92p price target and forecasts under review. Analyst Eric Burns comments: 'Prior to today’s warning we were looking for revenue £8.4 million; pre-tax profit £2.4 million; earnings per share 6.1p; dividend per share 2.1p. We put those forecasts under review this morning pending greater clarity emerging of how GTC trades out the final seven weeks of the year – clearly there will likely be material downside.

'Whilst the share price will undoubtedly run into trouble this morning, arguably the 50%+ decline since February already built in a large degree of investor scepticism of GTC’s ability to hit its FY numbers after a weak first half hence we believe the damage should be limited.'

Issue Date: 10 Jun 2014