Hunting (HTG) H2 2010 earnings summary

Executive summary

• 2010 marked a strong recovery: revenue rose 28% to £461.6m and continuing-operations profit before exceptional items increased 30% to £50.0m.

• Growth reflected stronger energy markets, expanded facilities, proprietary products and acquisitions; Innova-Extel added harsh-environment electronics to Well Construction.

• Net cash remained £212.2m at year-end, supporting further investment and expansion while the proposed full-year dividend rose 14% to 12.0p per share.

Financial highlights

• Revenue was £461.6m, up 28% YoY; EBITDA was £68.3m versus £50.6m in 2009.

• Continuing-operations profit before exceptional items rose to £50.0m from £38.5m; after exceptional items, profit before tax was £38.5m versus £39.1m.

• Profit for the year was £24.3m versus £31.7m; continuing-operations profit was £27.0m, including an £11.5m exceptional loss before tax.

• Capital expenditure increased to £49.7m from £21.6m; working capital absorbed £48.0m, contributing to a £152.8m net cash outflow.

Outlook and guidance

• Momentum in 2010 was expected to continue through 2011, supported by stronger oil prices, emerging-market demand and forecast record industry capital expenditure.

• North American shale activity, high-capability offshore rigs, renewed North Sea exploration and Middle East and Asia-Pacific demand were expected to support products and services.

• Ongoing investment and integration of recent acquisitions were expected to improve operating efficiency and position the business for continued growth.

• Field Aviation’s 2011 modification outlook was challenging amid fewer new programmes linked to reduced government spending.