Reflecting on another arduous year for his industry, Hunting 's (HTG) chairman described the oil and gas services outfit's performance as "unsurprisingly, dismal...on most financial metrics". What that observation fails to mention is that market sentiment steadily built in 2016, culminating in conditions that allowed Hunting to raise $84m (£68m) in a 485p a share placing in October.
Such opportunism was anything but dismal from a financial perspective, given the deteriorating capital position. Despite encouraging signs of onshore activity levels in the US in general, and West Texas in particular, operating losses continued in the second half of the year. In fact, figures in the table below are pretty much double the half-year numbers. Those losses made the placing all the more crucial, eliminating the majority of long-term borrowings and allowing the company to restructure its committed facilities. A suspension of debt covenants has also put paid to the dividend, although given that management does not anticipate "monthly profitability" until later in the year, that's probably for the best.
Consensus forecasts are for a pre-tax loss of $12m and an adjusted loss per share of 4.8¢ this year, shifting to a profit of $44.5m and 21.6¢ in 2018.
HUNTING (HTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 533p | MARKET VALUE: | £872m | |
| TOUCH: | 533-534p | 12-MONTH HIGH: | 650p | LOW: 253p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 670¢* | NET DEBT: | $1.9m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 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 |
| 2016 | 0.46 | -144 | -76.8 | nil |
| % change | -44 | - | - | -100 |
*Includes intangible assets of $381m, or 232¢ a share £1=$1.23 | ||||
