Shares in oil services company Hunting rose more than 7 per cent on half-year results, even though finance director Peter Rose admitted: "I am trying to manage expectations downwards for the second half." This is because while, as expected, the well construction business - heavily dependent on the currently stagnant US gas drilling market - flagged in the first half, the well completion segment was actually up year-on-year. But, as Mr Rose explained, this was due to a backlog of boom time contracts being worked through, and with this backlog now cleared the second half is unlikely to be as good as the first.
Nevertheless, the downturn has its upside. As chief executive Dennis Proctor explains, perennially acquisitive Hunting is finding that whereas some months ago potential target companies in the US were still demanding unreasonable valuations, some are so hard hit now that Hunting can contemplate simply buying their hard asset base and not bothering with a formal acquisition. And, while the subsea well business in the Asia Pacific region remains a particular bright spot, many of the customers Hunting is supplying there are actually Middle Eastern companies, so a fabrication capability in the Middle East remains an acquisition priority.
Evolution Securities anticipates full-year 2009 EPS of 13p.
More analysis of company results
More share tips and updates...
| HUNTING (HTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 489p | MARKET VALUE: | £645.5m | |
| TOUCH: | 487-490p | 12-MONTH HIGH: | 905p | LOW: 322p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 403p | NET CASH: | £387.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 201 | 21.4 | 9.7 | 2.9 |
| 2009 | 220 | 26.5 | 12.3 | 3.5 |
| % change | +9 | +24 | +27 | +21 |
Ex-div: 28 Oct Payment: 20 Nov | ||||
