Hunting PLC ($HTG)

And I would like to welcome you to the 2026 Annual General Meeting of Hunting plc, and I declare the meeting open. My name is Stuart Brightman, and I'm the hunting nonexecutive company Chair. This is my second AGM as Chair, and I'm delighted to report that 2025 saw a further year of strong financial performance by the company. Increased shareholder distributions, further delay of our long-term 2030 growth initiatives, Jim Johnson, our Chief Executive, will outline these strategic milestones in his presentation, and I'm very proud of the achievements of the company over the past 12 months. which we've seen continued share increase, which I know makes everybody happier. So a great year by the management. The executive management team is supported by a strong, experienced Board of Directors I'm going to introduce those. Seated on my far right is Paul Harris, who's a Non-Executive Director and has the wonderful task of being the Chair of the Remuneration Committee, which he does very well. Beside Paul is Cathy Kacha, who joined us last year as a Nonexecutive Director. Besides Cathy is Keith Lof, who is Hunting senior independent director and a wonderful resource to me as Chair. Besides Keith is Jim Johnson, our Chief Executive. Seated on my far left is Carol Chesney,a Non-Executive Director and Chair of the Audit and Risk Committee. Next to her is Margaret Amos, a Non-Executive Director and Chair of the Ethics and Sustainability Committee. Beside Margaret is Bruce Ferguson, our Finance Director; and finally, next to Bruce is Ben Willy, our Company Secretary, who, again, were at the Board were all grateful for his ongoing assistance and keeping us very organized. In advance of this meeting, shareholders were invited to submit questions in writing. We will continue to take questions from shareholders during the AGM. These can be submitted to the e-mail address which is shown on the bottom of most of the slides contained in the presentation. The next slide shows the agenda for the meeting outlined there in a few minutes. I will comment on the quarter that we just posted this morning on the trading update. Following that, Jim will provide a presentation on the 2025 annual report and accounts. After Jim's presentation, there will be an opportunity to take questions from the floor with respect to the trading update in the 2025 annual report. Following the question-and-answer session, we will then move to the main business of the which will include a poll. The poll will close at the conclusion of the meeting. Refreshments will be served following the conclusion of the meeting, and we look forward as Directors to be available to further talk, answer questions and socialize. So I will now provide commentary on the trading statement, which was issued at 7 a.m. this morning. The group has delivered a solid performance during Q1, with Hunting delivering an EBITDA of $23 million at a margin of 10% during the quarter. As is typical for this time of year, the group has invested in working capital in the period to satisfy committed orders, which has led to a net cash outflow in the quarter and coupled with the ongoing share buyback program has led to quarter end cash and bank position of $8 million, all fairly typical of our first quarter, no surprises from our end. All product groups have traded as expected with perforating systems sales in North America reporting a performance ahead of expectations is higher quality revenue, and stronger production efficiencies continue to lift profitability and the group has done a wonderful job taking market share and being a tremendous successful entity in a tough business. Our full year market guidance remains unchanged with an EBITDA range of $145 million to $155 million being maintained. And as indicated at our results, this will be second half weighted with approximately 40% of the earnings being in the first half, 60% being in the second half. again, consistent with what our expectations were for the year. of April 14, the group sales order book stood at $428 million, this compares to $358 million at the end of December 2025. As we announced in early April, the group has secured new orders for its Titanium stress joints for its fifth major project in Guyana. Jim will talk about some of the subsea successes and where we're going there. And these orders will be completed through 2026 and into 2027. And with this comment on the Q1 trading statement, I will now hand the meeting over to Jim for a review of 2025. Thank you.

Thanks, Stu. Good morning, everybody. I appreciate you taking the time to be here and listen to our results and our story, and what we're thinking about the future. I think before I get started, I just want to again thank the Board for their support over the year. We're very fortunate because I see some of the Boards for some of our peers. But we're very fortunate with the depth of talent we have in this Board and how they contribute to the success of the company. And on top of that, I would really be remiss if I didn't thank all the employees globally that have made hunting a great story and a success over the years. So your company has a very dedicated workforce and they are very proud of the fact that they work for hunting. So I just wanted to pass that on. Starting off, again, we're going to talk about some of the different business units. The operational highlights are there. I'm horrible at reading PowerPoint presentation, so I'm just going to talk about it. But going into this presentation right now, I think one of the key takeaways needs to be the fact that there's probably never been a better time to be an investor at Hunting -- in Hunting. The fact that world events have once again shined the light on the fact that energy security matters and that the age of hydrocarbons is not disappearing anytime soon. So obviously, we're big believers of that. We want to continue to focus on that core part of our business, but yet look at other areas such as our AMG business where we can diversify. Going forward, last year, I thought was a very, very good year of performance from the group. We were able to tick the box on a number of things that we had planned to accomplish in our 2030 strategy that we laid out. Amongst that was getting 2 acquisitions completed. And as you all know, I've talked a long time about getting acquisitions, how we need to build out product lines. We further expanded our footprint in the Subsea business with the acquisition of FES. We're very pleased with how that integration has gone. Organic oil recovery, which I know is a big topic of discussion around the world right now is really something that we were able to get a hold of, bring that all in-house. And really put the Hunting emphasis on the business because in case you don't know, it was one where we didn't own that technology. We were basically a licensee, and we were limited geographically as far as what we could do. So the chains are off. Right now, we're going full speed ahead on that, and we're excited that we were able to complete that acquisition. Throughout the rest of the year, we completed a number of orders for KOC. Those were the biggest orders in the company's history for OCTG. It's a very unique client. And again, with the Middle East turmoil that's going on, we are anticipating more orders this year, but the timing is not as certain as what we would normally like to see and those are things out of our control. But we're constantly in contact with KOC and we have the products and the supply chain to hopefully be successful with them for a long time to come. We opened up our new Dubai facility. That's kind of a good news, bad news story. It's good because we needed to be in that market where the activity is at. The bad part was it was partly driven by our need to downsize our European operation. And I won't bore you all with my thoughts about U.K. energy policy today. You can ask me that afterwards. But it's part of that move that we've made to the Middle East to be closer to our client base. We were able to dispose of rival for some of you that have been around a long time that know it. We were in the drilling tools business for many years. It was a very cash-intensive business. It was one where there were a number of in the business that we needed to consolidate. We did it with a company called Rival. And last year, we were able to crystallize that investment, sell it and exit the drilling tools business in total. Revenue numbers, cash flow, those numbers are all there. One of the things that's been very different in the last 12-plus months has been our capital allocation model that we've chosen to put in place and that's been with the share buybacks. And you can see the data up there right now. We've done -- for last year, we did the 40 and then the 20 and the share buyback, I think, has been a successful event for the company as far as showing the investors out there, there is a buyer in the marketplace for our shares as well. Just moving on OCTG over the year, really proud of what the team has done globally, whether it's Daniel Tan and his group, either Asia Pac or Travis Kelley and the U.S. team heading up the engineering-wise. Our products are definitely world-class. We have really done a good job of growing in some very, very harsh application needs for OCTG. That was some of the testing that we did for the KOC business. But it's been amazing to me to see the market share gains that we've made in North America. And as clients are continuing to go with longer and longer laterals, some of them -- one of our clients is actually one of the ones doing the U-shape wells, you can't have a failure. And so customers continue to rely on Hunting for our reliability and quality and product. Our completion and accessory business remains strong. It has been really benefited a lot from the work in Guyana through other service companies such as Schlumberger and Halliburton and some of the other international locations. So that business has continued or performed well last year. And our Indian JV continues to remain busy and contributed to our earnings in the past year. Subsea, as everybody knows, it's been one of our strategic pivots when we looked at our portfolio to not be so focused on North America land to how do we play more globally. And that is what you've seen us put in place with all the acquisitions we made really since 2019 in the Subsea business. But we continue to win new orders. We continue to look at synergies within the product line. So we're doing more bundling in front of clients out there, and we're excited about the future. Again, [ EnPro ] business has seen an uptick in abandonment work in the North Sea. But most of the other work is all new development going on globally and especially driven by all the activities in Guyana right now. Titan has been one of the best stories in the last 12 months. Adam Dice, who runs that business, has done an amazing job, and that team has done -- has delivered a stellar performance, in my opinion. And I can say that with all clarity looking at the performance of my peers that are publicly traded. So we've done a great job there. It's been one where in a market that hasn't grown. We have actually grown our market share in North America. And again, it gets down to dependability and the quality of the product and our technology, and that's really been driving the upside of the Titan business, as well as the fact that we have seen nice steady growth in the international business, which I'll show you a little bit about that later. Advanced manufacturing, one of those areas that is very focused on the non-oil and gas side. We saw a great uptick last year in areas like the nuclear business, which is something we have legacy work with for decades ago that we're starting to see that come back into play now. But also the traditional aerospace business continues to be strong for us there with more opportunities coming out daily with new part numbers we can make. And I think one of the other exciting things is we're a player in this natural gas-fired generation play, thanks to our customer Caterpillar. So as the -- as you read about the data centers and the like and the need for more electricity generation, we're actually a player and a supplier to Caterpillar, making the products to generate that electricity. Other manufacturing. We talk about there. It's been a year where things like our trenchless business had a good year. Our well testing business that we have in Dubai, improving is what I would say right now. But we really on this slide, highlight the 2 new areas, which is the FES. Again, order book wise, there are orders in place. We have a big tender pipeline, and we're expecting some good awards to come in Q2. Organic oil recovery. I talked about. I'd like to say that Bruce's baby so after the meeting, please hit and Bruce if he has more details on it than I do. But it's something that we're very, very excited about. We're getting more exposure to large clients globally, and I'm just really excited about the future potential of that business and what the earnings for that can be as far as it relates to Hunting. Looking at our 2030 scorecard quickly. Again, we talked about, one of the things we never do. I mentioned to people a while back. We're in the 17th year of our lean manufacturing journey within the organization. We continue to look throughout our company on how to do things quicker, faster and better. And so that's a journey that never ends. But we continue also to focus on other areas of the house we reduce our cost basis to be more competitive in the marketplace and deliver more earnings back to you, our owners. We've been able to improve our EBITDA cash flow conversion. Our EBITDA margin last year ended at 13% on our journey to get to 15%. We've got some that are up, some that are down. But overall, we're confident we're going to continue to drive that in the right direction. I've already talked about the acquisitions. And again, our dividend plan is to continue to raise that dividend payment and make those earnings generated back to you as shareholders to show you, hopefully, in a cyclical business, there will always be a return being a shareholder of Hunting. Other strategic steps, new technology. I'll show you a little bit on another slide about that, but we continue to focus developing new products with a big emphasis on the development of new premium connections. And you would think after all these years, the world is done with that, but it's really not. There's constant changes in metallurgy that people are requiring for well designs. We're in the forefront of that, working with suppliers globally to make sure we have the right products. But it's also developments and things modifications we're doing with products in Subsea. The Titan business continues to look at how to have the best-in-class perforating technology and charge technology. So it's really a corporate-wide view that we're looking at everything to make sure that we are a leader in technology. I mentioned earlier about the growth at Titan internationally, there's a slide coming up. We'll talk more about that. But those are some of the key areas that we're looking at to deliver on our ambitions for 2030. Subsea bundling I mentioned earlier, now we have more to bundle, thanks to FES, thanks to OOR, and even some of our recent OOR candidates that we're working with came about because of work that we did for this client in areas like titanium stress joints and the like. So it's a case of having your resume established and then being able to crystallize that with new opportunities that come forward. Some of the new technology is listed up there. On the Subsea side, the bottom one, I'll talk most about is the stack AM unit or flow access module. The key to that is some of these you've seen in the past, but that one is really key for brownfield and developments and tiebacks. And as the industry looks to do more with less far as infrastructure for subsea platforms and offshore platforms and just working with existing pipeline capacity and things like that, it becomes a really good economical decision to do more tiebacks. And that is what that product is developed for to allow that to happen easier. I talked about OCTG and the new products or the products we continue to test there. Well intervention is one that is very focused on business in the Middle East. And so those are some of the tools there to advance business in that market. There should be opportunities there with wells having to start back up. You all know that there's a lot of activity shut in right now in the Middle East. So that should have a good opportunity for some wireline activity. Once this clears up, and it should play well into our well intervention business. And then the perforating side, always working on some new tools there based on what the client tells us. One of the things I will say is when we look at all new technology, we don't do a lot of science projects. So what we do is talk to our clients, stay intimate with our client base and what are their problems and how can we solve it. So that's how we come up with all these different things. International sales, we have there the Titan business, just kind of an overview on where we've come in that business over the last couple of years and where we think it's going. And as I like to tell people, remind people, there are unconventional shale resources globally. I'm talking Algeria, Libya, Mexico, Australia is now a new market for us growing. So we see the international marketplace continuing to expand as the world needs more hydrocarbons. And in areas like Argentina and Saudi Arabia, where we've already seen significant growth, we see that going to continue to accelerate for years to come. OCTG, again, a great business for us. I would say that we probably have some of the highest margins in the industry when it comes to the whole OCTG platform that we have. We're starting to see even some of our tech lock product. We had a client, I don't want to say their names because I don't want my competitors there. But we've had business already with our tech lock product line in the Middle East and the Gulf region for unconventional applications. We see that growing as the years go on, as I mentioned recently about the Titan business. But again, our infrastructure in Asia Pac is driving a lot of our ability to deliver product to customers globally, as you've seen with the KOC orders recently. Non-oil and gas, there's a number of things up there. I mentioned earlier about the nuclear business. We're excited about that. We think that, that's going to be a continued growing area of interest for us in the years to come. Power generation always has been a big deal. Caterpillar through their solar division has been a client of ours for decades. They rely on Hunting for our deliveries, our quality we put into the products. And if you've read anything about Caterpillar, they're just going crazy with orders for power gen equipment and we're playing a part of that. There's a couple of things there about some of the defense opportunities in aerospace that we're working on. But we're -- again, we're happy to be in that business. We're excited to be in that business. We see margin improvement going on in that business. And really, it's been the Dearborn side driving most of that. The electronics business didn't have such a great year last year, and that's primarily because it is still more heavily oil and gas focused. But the team in our electronics business is changing that, and we've recently won some business for some space work out of our electronics business unit. Subsea bundling, I mentioned, again, I'm not going to spend a lot of time talking about this because I already have, but it just highlights some of the projects. The nice thing is to be able to go into a client and say, "Here's a broad suite of opportunities or things we can supply to you. " One of the real keys in the bundling was the fact with we literally told the potential -- I call it the potential cash register ringing on a per FPSO basis of now exceeding $100 million for each one of those. So between titanium stress joints between the connectors that we make at FES and all the rest of the year that we can provide, we see that as a big potential marketplace for us. And again, we're going in. We're talking to the engineers and bundling all these opportunities together. Order book is up, thanks to our recent orders that we announced with Long tail down in South America. We see that continuing to expand this year. What you need to remember with that order book is it does not include basically much, if anything, from Titan because it's a very short-cycle business. So as Titan continues to remain busy. I will say we had a great March. But anyhow, we're expecting that order book to continue, and we await some things from KOC hopefully this year that will even add further to that and more Subsea. So in summary, I think we had a very strong year last year. I'd like to tell people, "Hey, today, the shares are on sale so us time to buy". I think that it is a great company that you are the owners of and we're thankful for your support and all that you guys do. But I think our story is yet to really play out. And as I mentioned, it's early days. We've transformed a lot of the business with our bigger focus on areas like Subsea, the organic oil recovery. So I'm very thankful to be here in this position and visiting with all of you. And with that, I think we're going to go to questions and answers. So if I may have a question, I'm going to sit down and thanks.

Thanks, Jim. Very well done. We now have time for questions on the trading update and Jim's presentation, if you have any questions, please raise your hand, state your name and the shareholder you represent.

I'm Richard Morris. I'm the son of the light, Derek Morris, who used to be Managing Director of Hunting Geology and Geophysics, until he was made redundant and he shifted your view into -- from what I can say you've gone very much into just the oil industry. I'm kind of worried about the very long-term future like 50 years in the future. If by what I just heard, you seem to think the oil industry is carrying on... [Audio Gap]

[Audio Gap] energies will continue to be very important. So I look at it in the medium long term is all of the above. Leader, having higher margins using the global footprint, bundling the products that we have, focused on how do we operate in the lowest cost environment with the capabilities we have, getting into digital technology and look at how that primary across the organization. And as Jim showed in his presentation, we've got a lot of focus on non-oil and gas. We think that's a very important part of that. organically, there's a lot of stuff going on, a lot of expansion, some new customers, some new markets, a little more challenging for us, quite honestly, on non gas M&A than it is on oil and gas just because of the connectivity we have to that asset base, but time being spent and looking at that. So that non-oil and gas piece, I think geothermal will be part of that for us. And as the energy transition nuclear, we'll have some opportunities on. So I think it's the best of both worlds, all of the above, doing what we're doing, I think there's going to be those type of opportunities over that time period and the alternative will continue to develop. We'll play in it, leverage our footprint technology, manufacturing, engineering expertise. So I'm bullish over all terms as well as far out as 50.

I think you said it well, Stu. Nothing else to add.

Yes. The next question, I would request to be a little easier, please. Good. Thank you.

Lindsey Hunting from Hunting Investments Limited. Really a question for Bruce. Just 2 points. First one being the trading statement this morning. You guys mentioned a figure of 10% margin, which feels like a bit of a miss given recent quarters. So first of all, I could just ask some narrative around that. And then the second question, which Jim touched upon is really, could we get some further analysis or explanation from yourself around the OR and how we see that playing out in full year '26.

Sure. I think, well, on the first one, the margin was -- the blended was 10% for quarter 1. Part of that is seasonal and product mix, Lindsay. Good to see that March was a strong month. We go up to 15% EBITDA margin. So that's where we want to be. So we see that momentum strengthening. We see that continuing throughout the year. So I think we will be above budget and close to that 15% EBITDA margin target for the year. So that's the first thing. In terms of OR, we continue to be very excited about the opportunities with the -- we've done a lot of work with customers. The customer engagement we're seeing is huge, and that's all around the world. We saw Buccaneer in the U.S., some fantastic results coming through and still coming through after that first treatment, we doubled production. So that was a U.S. land well. Other customers, we're getting great engagement in the Middle East, Oman, we're also in Pakistan. Some high-profile customers in North Sea as well. We mentioned Harbor. Those trials have been ongoing for 6 to 9 months. We had 2 treatments. We're now observing the well production. And we are seeing that breakthrough in terms of the microbial breakthrough, which is good to see. So we're all in target in terms of what we want to see. The next stage on that one, we'll be seeing that translate into increased production, reduced water cuts. So that will be happening over the next few weeks. Again, other customers out of West Africa, Brazil, more on U.S. as well. So we're really at that stage. We're getting real traction from our customer base and real good technical results coming through as well. So that will translate. It does take time. The science we'd love to hurry up, we're getting patient but we'll see that play out throughout '26, certainly in '27 and beyond. So we'll see in our budget, we're looking at around about $20 million for '26. We're comfortable we'll get there, but we do see an exponential growth going through '27 and beyond. As we mentioned a target of $100 million revenue by the end of 2030. I think that's -- what we're seeing now is very deliverable. So very excited. We'll see a tangible benefit in '26 and real uptake from '27 and beyond.

Other questions, please? Okay. With no further questions, I can confirm that no additional questions have been submitted ahead of the AGM, and therefore, I would like to begin the formal business of the 2026 Annual General Meeting.

I can confirm that a quorum is present. As the notice calling the meeting has been available to all members, I propose it'd be taken as read. Thank you. As we stated in the notice of meeting, voting on all resolutions will be on a poll rather than a show of hands. On a poll, each shareholder has one vote for every share held. -- voting on a poll, ensures that the votes of the shareholders are counted, including the majority of our institutional shareholders who cannot attend the meeting but have submitted a form of proxy. Before describing the procedure that will be adopted in taking the poll, I'd like to appoint Equiniti, our registrars to poll scrutineer. Equiniti will collate all the votes received during the meeting. Those of you who are entitled to vote will have been given a poll card at registration. If you do not have a poll card or if you need additional poll cards, please raise your hand now and someone will come and hand those out. Seeing none, we'll continue. If you've already voted by proxy and you do not wish to change your vote, then you do not need to complete the poll card. Your vote will be taken into account automatically. If you have voted by proxy and wish to change your vote, you can now complete the poll card and new voting instructions will be taken into account. Please complete the poll card by inserting your full name, address and signature. If you're a proxy or a corporate representative, please insert your full name and the full name and address of the shareholder you are representing. Please ensure that your poll card is signed and handed to our registrars at the exit as you leave the room. I now propose formally that each of the resolutions set out in the notice of meeting and also numbered on the poll card are put to the meeting. Resolutions 1 to 14 ordinary resolutions and require a simple majority of the votes cast to be in favor to be passed. Resolutions 15 to 18 require 75% of the votes cast to be in favor to be passed. I now declare the poll formally open. The poll will close 10 minutes after the end of the meeting. If you have any questions about filling in the poll card or if you require any assistance, please speak to the registrar. The registrar will calculate the results at the close of the poll. These will be announced to the stock exchange later today and will also be published on the company's website. That concludes the formal business of the 2026 Annual General Meeting. And on behalf of the Board, I would like to thank everyone for attending, everybody's ongoing support, which we greatly appreciate and now declare the meeting closed. Please can I remind you to hand your poll card to one of the representatives from Equiniti as you exit the room. Thank you all again.