Hunting unveils 43% increase in full year revenues

published 8 March 2012

Oil field services group Hunting has this morning unveiled a 43.7% increase in its full year revenues, to £608.8m, resulting in an 18% increase in its profit before tax, to £38.8m.

Acquisitions contributed £64.8m to that revenue growth.

The companys operating profits are reported to have grown by a third, to £41m.

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Huntings diluted earnings per share (before amortisation and exceptional items) grew 74% in 2011, to 38.7p.

Amortisations and exceptional items almost tripled, to £40m.

Excluding those charges operating margins improved to 13.3%, from 10.6% in 2010.

During the past year the company acquired four rivals, for a total consideration of £597.9m. The largest of these was Titan, a manufacturer of perforating gun systems and shaped charges; Hunting paid £508.6m for the firm. The firm took out new borrowings to the tune of £266.7m to finance the new acquisition, with the rest being paid for through the issue of new share capital (£86.8m) and its own existing cash surplus.

The companys cash position changed significantly as a result, moving into the red by £218.4m, from a surplus of £212.2m the year before.

By segments of activity, and in terms of continuing operations, the rates of growth in revenue achieved were the following: well construction (75% to £194.5m), well completion (45.9% to £327.2m), well intervention (-9.8% to £52.9m) and exploration and production (2.6% to £8.2m).

MANAGEMENT COMMENTS

Commenting on the results Dennis Proctor, Chief Executive, said that, "The Group has started 2012 on a solid footing as the demand for energy remains firm and therefore is well positioned to deliver a further year of growth."

Mr. Proctor also highlights the acquisition of Titan, which in his opinion has enhanced the Group's profile as a key supplier of well construction and completion products.

With a view to the long-term the firm states that, "Oil and gas demand is forecast to continue to grow as we continue through the year, subject to the economic and geopolitical climate not declining further. In the medium to long term industry commentators are forecasting a 70% increase in investment in capital spending over the next decade to meet anticipated hydrocarbon demand, which provides confidence that Hunting's products will be required in the future."

The company has proposed a final dividend for the year of 11p per share, bringing the total pay-out for the year to 15p, versus 2010s 12p.