The challenges facing specialist oil equipment supplier Hunting (HTG) have been well-flagged - notably a decline in the North American rig count and a fall in North Sea capital expenditure budgets. The group's cost-cutting measures carried out during the first half included a 25 per cent reduction in headcount, which resulted in an annualised saving of $41m (£26.6m). As a result of the downturn in the oil and gas sector, the group booked a $35.2m goodwill impairment charge and a further $28.9m writedown on other assets. Underlying cash profits fell 64 per cent to $44.1m.
Hunting's well completion business reported a $2.2m loss, compared with a $42.8m profit in 2014. The Hunting Titan business has been hit by a marked decline in onshore drilling programmes, as the North American rig count has more than halved since December. In a bid to streamline operations, the business has combined its electronic-related manufacturing with the existing Hunting Electronics facility and has started to rationalise its distribution network across North America.
However, it wasn't all bad news for the group. Hunting Subsea held up well as deepwater drilling activity in the Gulf of Mexico continued apace. The business has purchased new equipment and hired new personnel to meet demand for subsea products and services.
Broker Numis expects adjusted EPS of 12.6p for the full year, compared with 100p in 2014.
HUNTING (HTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 458p | MARKET VALUE: | £681m | |
| TOUCH: | 457.3-458.3p | 12-MONTH HIGH: | 918p | LOW: 376p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 893p* | NET DEBT: | 12% | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 (restated) | 664 | 68.9 | 35.6 | 8.1 |
| 2015 | 464 | -65.8 | -35.5 | 4.0 |
| % change | -30 | - | - | -51 |
Ex-div: 8 Oct Payment: 28 Oct *Includes intangible assets of £614m, or 412p a share | ||||
