Oil and gas services group Hunting remains confident of better trading conditions in the second half of 2010, despite the ongoing moratorium on deepwater drilling in the Gulf of Mexico. With its fortunes closely aligned to oil and gas drilling activity, the group's confidence is based on an increase of 86 per cent in the average North American rig count since mid-2009, and a 15 per cent increase in the international rig count over the same period.
The group attributes improving conditions to the recovery in the oil price and new developments from shale gas, which have provided operators with the confidence to increase their exploration and production budgets. Margins have improved and work in progress is returning to historical levels. The well intervention arm reported the strongest profit growth, benefiting from the acquisitions of National Coupling and Welltonic. Activity in well completion, the largest division, remained strong in Asia Pacific although Europe saw lower activity. Poor trading in Canada dragged on improving US trading in the well construction unit.
The $125m (£80m) acquisition of Innova-Extel announced after the period end will extend Hunting's well construction capability, particularly in increasingly important high-pressure, high-temperature environments.
Prior to these results, Evolution Securities was forecasting full-year pre-tax profits of £41m and EPS of 19p.
| HUNTING (HTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 561p | MARKET VALUE: | £741m | |
| TOUCH: | 560-561p | 12-MONTH HIGH: | 660p | LOW: 429p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 423p | NET CASH: | £314m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 209 | 25.4 | 11.7 | 3.50 |
| 2010 | 214 | 16.0 | 7.3 | 3.70 |
| % change | +2 | -37 | -38 | +6 |
Ex-div: 27 Oct Payment: 19 Nov | ||||
