We first flagged the attractions of the Leeds-based group, which sells complex geological and geophysical data to the oil and gas industry, in August last year at 30p and our faith was rewarded by a bullish trading update in January (24 Jan).
In February, after the stock had more than doubled and citing a lack of immediate catalysts, we suggested it might drift lower and so banked a 116.7% profit at 65p. After all, no matter how attractive the story is, there has to be a point at which the shares have run ahead of themselves. Deciding when this threshold has been reached is almost as important as spotting the opportunity in the first place.
Our reasoning initially proved sound as it fell from 65p to 55p in early June (7 Jun) but news (20 Jun) of a £962,000 sale from its global data library and this latest update have helped propel it to fresh highs.
The transformation of the company, which historically had a lumpy revenue profile associated with the sale of individual data sets, has been based on a successful roll-out its Globe (previously Global Programmes) interpretative data project. This initiative, launched last year, seeks to explain how the geology and geography of an oil basin has changed over time. Backed by 10 sponsorship agreements, which see the individual sponsors commit to three-year packages, it has provided a stable and visible revenue stream.
Globe has therefore been a key factor in the earnings upgrades and helped the group post a 290% year-on-year increase in profits to £1.4 million in the six months to 31 January. In response to today's news house broker WH Ireland reiterated its 'buy' rating, increased July 2013 and July 2014 earnings per share estimates by 14% and 16% respectively and upped its price target from 72p to 86p.