"We are in a wilderness without a single path to guide us," was the standout line in Hunting (HTG) chief executive Dennis Proctor's remarkably candid outlook for 2016. It's tempting to link such honesty to the small share price bounce following full-year results, but these numbers and the broader contraction in oil and gas project work give scant short-term optimism.
One of the few costs the oil services group can control is labour. In 2015 it cut headcount by 30 per cent, and could increase that figure to 40 per cent by the end of this quarter if current conditions persist. Last year's capital expenditure also fell by a third to $81.1m (£58m) and could be as low as $10m in 2016, according to finance director Peter Rose.
Additional steps are being taken to protect the balance sheet. Following a review of capital management, the group booked a non-cash impairment charge of $253m and maintained gearing at 9 per cent, despite the renegotiation of a $350m revolving credit facility in October.
Arden Partners expects full-year pre-tax profits of $21.4m and EPS of 9.6¢, against $9.4m and 3.1¢ in 2015.
HUNTING (HTG) | ||||
---|---|---|---|---|
ORD PRICE: | 372p | MARKET VALUE: | £554m | |
TOUCH: | 370-372.5p | 12-MONTH HIGH: | 677p | LOW: 232p |
DIVIDEND YIELD: | 1.5% | PE RATIO: | NA | |
NET ASSET VALUE: | 767¢* | NET DEBT: | 9% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2011 | 609 | 38.8 | 20.7 | 15.0 |
($bn) | ($m) | (¢) | (¢) | |
2012 | 1.30 | 127 | 64.6 | 28.5 |
2013 | 1.30 | 136 | 71.0 | 29.5 |
2014 | 1.39 | 109 | 45.9 | 31.0 |
2015 | 0.81 | -289 | -156 | 8.0 |
% change | -42 | - | - | -74 |
Ex-div: 9 Jun Payment: 6 Jul £1=$1.41. *Includes intangible assets of $411m, or 276¢ a share. |