Autumn floods in Canada’s Alberta province and destocking in the well-construction industry knocked at least $20m (£12m) off Hunting’s (HTG) full-year profits. Performance was further checked by a dwindling rig count in the North Sea and project deferrals. Yet the oilfield-equipment provider still managed to beat consensus-earnings forecasts, thanks to a strong performance from the Titan explosives business and continued expansion around the Pacific rim.
The year ended with underlying cash profits flat at $243m. But a weighting towards lower-tax jurisdictions, particularly Singapore, resulted in a lower-than-expected tax rate of 27 per cent, boosting earnings per share 3 per cent to 93.5¢.
The pivot towards the Asia Pacific region not only bolsters Hunting’s bottom line, but also opens up a major avenue for future growth. The region accounted for 16 per cent of group revenues in 2013 - up from 11 per cent the previous year. The proportion of group business generated in the Far East should continue to grow rapidly, in line with the take-up of horizontal drilling technologies.
Meanwhile, Hunting maintained margins in the embattled well-construction division through staff cuts, but electronic component sales - the main victim of de-stocking - are expected to remain sluggish until the second half of the current year.
| HUNTING (HTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 873p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 873-874p | 12-MONTH HIGH: | 947p | LOW: 719p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 937¢* | NET DEBT: | 15% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 360 | 39.1 | 18.2 | 10.5 |
| 2010 | 420 | 33.0 | 15.6 | 12.0 |
| 2011 | 609 | 38.8 | 20.7 | 15.0 |
| ($bn) | ($m) | (¢) | (¢) | |
| 2012 | 1.3 | 127 | 64.6 | 28.5 |
| 2013 | 1.3 | 135 | 70.0 | 29.5 |
| % change | +2 | +6 | +8 | +4 |
Ex-div: 30 Apr Payment: 27 May £1 = $1.67 *Includes intangible assets of $758m, or 513¢ a share | ||||
