Having followed it closely for decades, this global precision engineering group is another one of my favourites.
Set up in 1874, the company maintains a corporate office in Houston and is headquartered in London.
Apart from its UK base, the it has operations in China, India, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, the UAE and the USA.
Two weeks ago, it announced that it had secured $60m of new Organic Oil Recovery contracts from North Sea operators.
The OOR process is a proven enhanced oil recovery technology which optimises reservoir performance, improves recovery rates and reduces in-situ hydrogen sulphide levels for operators.
A year ago, when the company held a Capital Markets Day, it identified OOR as one of the key strategic growth pillars of the Hunting 2030 Strategy, emphasising its commitment to offering a diverse array of products and services, including cutting-edge technologies, to drive revenue and profit growth as the energy transition continues to progress.
At the time of the contract announcement, CEO Jim Johnson stated that:
"Today's announcement is a significant step in the expansion of the OOR technology and shows confidence in Hunting's ability to deliver new technologies to the energy industry.
These major OOR orders support our Hunting 2030 strategic initiatives to deliver revenue and profit growth, with strong margins and cash flows, through new sectors and product lines."
The £640m capitalised group’s Interim Results to end-June reported a record level in its Order Book, standing 32% higher at a record $699.5m.
Its half-time pre-tax profits were 131% higher at $36.2m ($15.7m), the adjusted pre-tax profits were 57% better at $36.2m ($23.1m), while its adjusted earnings were 61% better at 15.5c (9.6c) per share.
Analyst Alex Brooks at Canaccord Genuity Capital Markets rates the group’s shares as a Buy, looking for 600p a share in due course.
For the current year, he estimates $1,075m ($929.1m) of revenues and $92.9m ($50.0m) of adjusted pre-tax profits, more than doubling earnings to 0.42c (0.20c) and lifting the dividend to 0.11c (0.10c) per share.
For 2025 his figures are $1,236m sales, $136.9m profits, 0.61c earnings and 0.12c dividend.
We will have to wait until the end of next month for the Q3 Trading Update.
This group’s shares are currently around 404p, at which level they still hold significant upside prospects.
(Profile 15.03.21 @ 275p set a Target Price of 350p*)
(Profile 12.04.23 @ 240p set a Target Price of 300p*)
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