Hunting is hitting its marks strategically whilst also continuing to improve near term profitability. H1’25 contained operational progress, M&A execution and an updated capital allocation programme to include faster dividend growth and prospective share buybacks.
Market conditions remain mixed, but Hunting’s focus on successfully executing its order book while also addressing underperforming business areas drove progress in H1. The indicated U$68m-70m expected EBITDA for the period represents a c.16% y-o-y uplift, including a c.80bp margin improvement.
A return to profitability at Perforating Systems and progress with the EMEA restructuring are welcome developments. Strategically, the acquisition of FES boosts Hunting’s Subsea offering and, along with other corporate actions, is clearly aligned with the 2030 strategy.
In addition to M&A activity, an updated capital allocation (including faster expected dividend growth at 13% pa and a proposed share buyback programme) caught the eye. This indicates confidence in the group’s cash generation credentials and a balanced approach to the application of funds.
We have not adjusted our existing 347p per share fair value at this stage but will revisit modelling following the H1’25 results announcement next month. The current share price sits on a 13% discount to this metric and a 25% discount to the end FY24 NAV.
