Hunting (LON:HTG) outlined what executives described as a “very, very good year” in 2025, pointing to improved margins, continued cash generation, and progress on its strategic repositioning toward higher-return product lines and a broader geographic footprint.
Management also opened the discussion with comments on geopolitical uncertainty in the Middle East, noting the company has personnel in Saudi Arabia and Dubai who were reported to be safe. While leaders said near-term developments are difficult to predict, they framed recent events as reinforcing the importance of energy security and long-term demand for oilfield services.
2025 performance: improved profitability and cash generation
The company highlighted cash generation as a central theme. CEO Jim Johnson said Hunting generated $63 million in cash after acquisitions, dividend increases, and share buybacks, describing the balance sheet as “in a very, very healthy place.” Ferguson provided a walk-through of cash movements, noting the company ended 2024 with $104 million of cash, added $135 million of EBITDA, and benefited from a working capital inflow, before deploying cash for disposals, buybacks, dividends, and other items to finish with $63 million of cash on the balance sheet.
Working capital efficiency was also emphasized. Ferguson said working capital as a percentage of sales has fallen to 33% from more than 70% in 2020, and inventory was reduced by $65 million over the year. He attributed part of the improvement to decisions since 2020 to exit higher-capital product lines and to the use of working capital instruments to finance Kuwait Oil Company (KOC) orders.
Order book normalizes; management expects strong Q2 tender conversion
Executives said the year-end sales order book declined from the prior year to a “more normalized level,” with Ferguson putting the number at $358 million, about 20% lower than at the end of December 2024. Management said the reduction reflected completion of KOC activity and the exclusion of much of the short-cycle Titan business from the order book measure.
Both Johnson and Ferguson said they expect order intake to accelerate through the second quarter, citing a tender pipeline of more than $1 billion. Ferguson said the company expects “a big conversion in quarter two into orders,” and he suggested the order book could approach $500 million by Q3, depending on awards.
In Q&A, Johnson said tender activity was heavy in Brazil and also included the Gulf of America, West Africa, Suriname, and Guyana. When asked to break down the pipeline, he said he recalled about $200 million on the subsea side and indicated the “bulk” was in OCTG, with additional activity cited in markets including Turkmenistan and Indonesia. He also said the Flexible Engineered Solutions (FES) pipeline alone was “nine-figure.”
Portfolio actions: acquisitions, divestment, and restructuring
Hunting highlighted two acquisitions completed during the year: Flexible Engineered Solutions and Organic Oil Recovery (OOR). Johnson said the FES integration proceeded without “hiccups” and that the opportunity set remains large, including expected upside tied to Brazil and Guyana FPSO-related work. On OOR, Johnson said the business is seeing traction, referencing a client announcement from Buccaneer in East Texas that discussed reduced water cut and doubled production. He said Hunting has trials underway in Brazil and a large trial in Angola with a major oil company.
On the divestment side, Johnson said the company disposed of its interest in Rival Downhole, fully exiting the downhole drilling tools business and generating cash for other acquisitions viewed as a better long-term fit.
Restructuring in Europe remained a major operational focus. Johnson said the company opened a new facility in Dubai as a “cornerstone” move following the closure of two facilities in the Netherlands, and Ferguson later noted that four facilities have been closed as equipment and activity were moved from Aberdeen to Dubai. He said EMEA results were pressured by a weak market and restructuring disruption, but that a full year benefit of $11 million of cost savings is expected to support improvement in 2026.
Cost reduction and shareholder returns
Management announced an additional $15 million cost savings plan, described as spanning shop-floor efficiency, organizational changes, and shared services, with implementation over the next 12 to 18 months. Separately, executives discussed a $5 million cost savings plan tied to the electronics business, though Johnson said he would not provide detailed breakdowns given the sensitivity around staffing.
On capital allocation, Hunting said it is nearing completion of the first two tranches of a $60 million share buyback program and announced an intention to undertake a further $40 million buyback to be completed by March 2028. Johnson stressed that the company still intends to be acquisitive and does not view the buyback as a signal that M&A opportunities are lacking.
The company also highlighted dividend growth. Ferguson said the total dividend declared for the year was $0.13 and reiterated a goal of dividend growth alongside buybacks, describing a targeted dividend increase rate of 13% per annum from 2025 onwards.
Segment commentary: OCTG strength, subsea awards expected, Titan recovery continues
Executives cited strong profitability in key segments. Ferguson said OCTG represented “over 46%” of sales, crediting the company’s “virtual mill” approach, TEC-LOCK performance in longer laterals, and contributions from India and completion accessories. Johnson added that OCTG posted some of the strongest margins in company history, driven by North America and Southeast Asia.
Subsea was described as moving “in the right direction,” with Johnson pointing to coupling activity at Stafford accelerating as follow-on work from subsea tree awards. Ferguson said tender activity in subsea is “very, very high,” contributing meaningfully to the over-$1 billion inquiry base, and Johnson noted plans to open an office in Kuala Lumpur to increase exposure to Asian shipbuilding and FPSO construction. In Q&A, Johnson said Hunting has relocated a salesperson from Houston to Kuala Lumpur to work with the Singapore team as it integrates bundled offerings.
For Titan, executives emphasized operational improvement. Johnson said the business has improved materially versus peers in recent quarters, while Ferguson described Titan margins improving from 0% last year to around 6% in 2025, with a goal to reach 15%. Johnson cited efficiency gains, new equipment for perforating gun manufacturing, and a market environment where customers place greater value on reliability for longer wells.
Hunting also discussed non-oil and gas activity, describing Dearborn as a “star” with work in space, nuclear, and power generation. Johnson said the company is working on first-article production for new jet engine business but did not disclose the customer. He also noted space-related activity, including that Blue Origin is a larger customer than SpaceX, while the company’s investment in a 3D printing business (Cumberland) is now profitable and seeing growth.
Looking ahead, Ferguson said guidance remains unchanged from January, calling for 2026 EBITDA of $145 million to $155 million and an EBITDA margin of 13% to 14%, with a back-end-loaded year expected as awards arrive in Q2 and revenue recognition skews to the second half. CapEx is expected to rise to $40 million to $50 million, driven by automation, replacement spending, and capacity additions, including at the company’s Chinese facility.
About Hunting (LON:HTG)
Hunting is a global precision engineering group, which provides quality-assured products and services for the energy, aviation, commercial space, defence, medical, and power generation sectors.
Our strong focus on quality assured products, supported by rigorous health and safety procedures, ensures we assist in the delivery of energy safely and it is also the basis of our standing in this critical, global industry.
Our intellectual property portfolio enables the Hunting Group to maintain a leading technology edge, so that energy projects are delivered quicker and at lower cost with minimal impact on the environment.
Our people are our most important asset.
