PRECISION
ENGINEERING
FROM SUBSEA
TO SPACE
Hunting PLC
Annual Report and Accounts 2024
We are Hunting
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.
Financial highlights
Revenue
$
1,048.9
m
(2023 – $929.1m)
EBITDA*
$
126.3
m
(2023 – $102.4m restated)
Diluted (loss) earnings per share
(17.6)
cents
(2023 – 65.9 cents restated)
Non-financial highlights
Total recordable incident rate
0.93
(2023 – 0.91)
Internal manufacturing reject rate
0.31
%
(2023 – 0.20%)
Scope 1 and 2 emissions
tonnes CO
2
e
22,233
(2023 – 22,599 restated)
Gross profit
$
271.9
m
(2023 – $227.7m)
(Loss) profit before tax
$
(33.5)
m
(2023 – $41.1m restated)
Sales order book*
$
508.6
m
(2023 – $565.2m)
Market highlights
Average WTI crude oil price
$
76
per bbl
(2023 – $78 per bbl)
Global drilling capital investment
$
214.5
bn
(2023 – $212.6bn)
Global average rig count
#
1,691
(2023 – 1,765)
*Non-GAAP Measure
see pages 255 to 262.
Strategic Report
At a Glance
2
Company Chair’s Statement
6
Hunting 2030 Strategy
10
Key Performance Indicators
18
Market Indicators
19
Business Model
20
Chief Executive’s Report
34
Market Summary
40
Product Review
44
Operating Segment Review
55
Group Financial Review
60
ESG and Sustainability
68
Task Force on Climate-related Financial
Disclosures (“TCFD”)
88
Risk Management
102
Viability Statement and Going Concern
110
Section 172(1) Statement
112
Corporate Governance
Introduction to Corporate Governance
114
Board of Directors
116
Executive Committee
118
Corporate Governance Report
119
Nomination Committee Report
131
Ethics and Sustainability Committee Report
133
Remuneration Committee Report
136
– Remuneration at a Glance
140
– Directors’ Remuneration Policy
142
– Annual Report on Remuneration
151
Audit and Risk Committee Report
161
Directors’ Report
167
Financial Statements
Independent Auditor’s Report to
the Members of Hunting PLC
171
Consolidated Income Statement
184
Consolidated Statement of
Comprehensive Income
185
Consolidated Balance Sheet
186
Consolidated Statement of Changes in Equity
187
Consolidated Statement of Cash Flows
189
Notes to the Consolidated Financial Statements
190
Company Balance Sheet
246
Company Statement of Changes in Equity
247
Notes to the Company Financial Statements
248
Other Information
Non-GAAP Measures
255
Financial Record
263
Shareholder and Statutory Information
264
Glossary
266
Professional Advisers
270
Our Strategy
Hunting is a constituent of the
FTSE 250 Index quoted on the
London Stock Exchange in the Equity
Shares in Commercial Companies
(“ESCC”) category. Our strategy is
to manufacture products and deliver
services to our customers, wherever
in the world they are operating.
10
Key Performance Indicators
Our primary sector of focus is the
energy industry. Many of Hunting’s
products are used across the life
cycle of an oil and gas well in
addition to geothermal and carbon
capture wells. Our performance is,
therefore, driven by high-value,
resilient end-markets.
18
Our Stakeholders
Our strategy is aimed at creating
sustainable value for our shareholders
and other stakeholders, including
employees, customers, suppliers,
governments, and communities.
24
Our Product Groups
Our five key product groups are:
Perforating Systems, OCTG,
Advanced Manufacturing, Subsea,
and Other Manufacturing.
Non-oil and gas revenue
is derived across all of these
key product groups.
44
Our Operating Segments
The Group is managed through
five operating segments:
Hunting Titan; North America;
Subsea Technologies; Europe,
Middle East and Africa (“EMEA”);
and Asia Pacific.
55
Corporate Governance
Our Board’s experience extends
from energy to aviation and other
non-oil and gas sectors. Hunting
expects to accelerate the Group’s
non-oil and gas offering in the
coming years to diversify our revenue
and profit streams, thereby reducing
the cyclicality of our earnings.
113
Contents
Hunting PLC
Annual Report and Accounts 2024
1
Corporate Governance
Financial Statements
Other Information
Strategic Report
At a Glance
Product groups
2024 has been a year of strong delivery against
several important milestones, which were announced
as part of the Hunting 2030 Strategy. Progress has
been made in growing our OCTG, Advanced
Manufacturing, and Subsea product groups, while
our Perforating Systems product group reported
trading headwinds. Hunting reports good improvement
in both revenue and EBITDA as international and
offshore markets have continued to increase drilling
activity across the energy sector. Progress has also
been made within our Energy Transition and non-oil
and gas strategies, which have contributed to our
strong results.
Perforating Systems
Hunting’s Perforating Systems product offering
includes integrated gun systems, energetics and
instruments for the energy sector. The Group’s
H-2™, H-3™, and H-4™ perforating systems
offer an integrated well completion solution to
clients, which increases safety and efficiency.
Hunting’s energetics products include the
EQUAFrac™ suite of charges, which improve
firing accuracy and efficiency. Complementing
these products, Hunting’s instruments, detonation
cord, and other important components, enable
the Group to offer the broadest range of onshore
completion solutions to clients.
OCTG
Hunting’s Oil Country Tubular Goods
(“OCTG”) product offering includes premium
connections, accessories, and tubing. The
Group’s proprietary connection technologies
include SEAL-LOCK™, WEDGE-LOCK™, and
TEC-LOCK™, which address most oil and gas
resource developments. Hunting’s connection
technology is also applicable to the energy
transition sector, serving geothermal energy
and carbon capture and storage developments.
The Group provides an independent OCTG
supply chain to clients, sourcing through either
distributors in North America or steel mills
in Asia Pacific.
Reported through:
Hunting Titan
EMEA
Reported through:
Hunting Titan
North America
EMEA
Asia Pacific
READ MORE ON PAGE 44
READ MORE ON PAGE 46
Hunting PLC
Annual Report and Accounts 2024
2
Strategic Report
Corporate Governance
Financial Statements
Other Information
Revenue
$m
EBITDA*
$m
At a Glance
continued
Advanced Manufacturing
Hunting’s Advanced Manufacturing product
offering leads the Group’s non-oil and gas
revenue diversification initiatives and includes
high performance electronics and precision
engineered products, which are utilised in both
energy related and non-oil and gas applications.
Our electronics business manufactures high
temperature/high pressure printed circuit boards
used in downhole measurement tools as well
as other sectors such as the medical sector.
Our precision engineering business, Dearborn,
manufactures MWD/LWD well tool housings,
periscope tubes, aerospace engine shafts,
power generation turbine shafts and products
used in commercial space applications.
Subsea
Hunting’s Subsea product offering comprises
three sub-groups: hydraulic couplings and
valves, used within subsea tree systems;
titanium stress joints, which are applied to
floating production, storage and offloading
facilities; and flow access modules and flow
intervention systems used in modular offshore
field developments. A key theme of all these
products is to enable the safer and quicker
delivery of oil and gas for our customers and,
therefore, cash flow from offshore developments.
Other Manufacturing
Hunting’s Other Manufacturing products include
well intervention and testing equipment, which is
either sold to, or rented by, clients. The Group’s
trenchless technologies business sells into the
global telecommunications industry and forms
part of this product group given its size and
profile. Other Manufacturing also includes our
licensed organic oil recovery (“OOR”) product,
which is an enhanced oil recovery technology
that increases oil production in a well, and
reduces H
2
S levels in the reservoir.
Reported through:
Hunting Titan
North America
Reported through:
Subsea Technologies
Reported through:
North America
EMEA
Asia Pacific
READ MORE ON PAGE 48
READ MORE ON PAGE 50
READ MORE ON PAGE 52
222.7
126.9
463.7
147.1
88.5
Product groups
Perforating Systems
OCTG
Advanced Manufacturing
Subsea
Other Manufacturing
*Non-GAAP measure see NGM C on pages 256 and 257.
1.4
80.2
11.8
30.0
2.9
Hunting PLC
Annual Report and Accounts 2024
3
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operating
sites
Distribution
centres
Year-end
employees
Hunting
Titan
3
(2023 – 4)
12
(2023 – 14)
514
(2023 – 622)
North
America
10
(2023 – 10)
2
(2023 – 2)
886
(2023 – 900)
Subsea
Technologies
2
(2023 – 3)
0
(2023 – 0)
223
(2023 – 196)
EMEA
7
(2023 – 7)
0
(2023 – 0)
277
(2023 – 270)
Asia
Pacific
3
(2023 – 3)
0
(2023 – 0)
378
(2023 – 346)
Revenue
$m
EBITDA*
$m
Operating segments
Hunting’s North America, Subsea Technologies,
and Asia Pacific operating segments reported strong
increases in revenue in the year, offsetting weaker
performances from Hunting Titan and EMEA, leading
to the overall growth reported in revenue, earnings
and cash generation.
At a Glance
continued
220.5
237.4
357.3
147.1
86.6
Operating segments
Hunting Titan
North America
Subsea Technologies
EMEA
Asia Pacific
*Non-GAAP measure see NGM C on pages 256 and 257.
0.6
62.2
30.0
(7.9)
41.4
Hunting PLC
Annual Report and Accounts 2024
4
Strategic Report
Corporate Governance
Financial Statements
Other Information
Our global
locations
Operating sites
25
Distribution centres
14
Year-end employees
(including head office)
2,367
Hunting global locations
Hunting Titan
North America
Subsea Technologies
EMEA
Asia Pacific
Joint Ventures and Associates
At a Glance
continued
Hunting PLC
Annual Report and Accounts 2024
5
Strategic Report
Corporate Governance
Financial Statements
Other Information
Company Chair’s Statement
150 years,
moving forward
The past year was very successful as the Company
achieved a number of strategic goals, which has given an
air of optimism for future success. The progress made during
2024 on the path to reach our 2030 targets, outlined in the
Capital Markets Day, demonstrates that we remain on track.
On behalf of the Directors, I would like to thank the senior
leadership team and our wider workforce for the progress
made in the year.
Revenue
$
1,048.9
m
(2023 – $929.1m)
Dividend per share declared
11.5
cents
(2023 – 10.0 cents)
Hunting PLC
Annual Report and Accounts 2024
6
Strategic Report
Corporate Governance
Financial Statements
Other Information
Company Chair’s Statement
continued
Hunting 150th anniversary
In April 2024, the Company celebrated its 150th
anniversary. The special occasion allowed a look
back at the remarkable accomplishments in our
history as well as providing an air of optimism
for the future.
There was participation in the celebrations
across all of our regions of operation by so many
individuals who are part of the fabric and culture
of the Company and who make being part of
Hunting very special.
Market environment
During 2024, there were many changes in the
geopolitical backdrop facing the Group. These
events bring a positive outlook for the future of
energy markets from both an energy security
and regulatory environment perspective.
Offshore and international markets offer multi-year
growth opportunities, with the Company delivering
success, particularly in South America, with our
Subsea products group, but also in the Middle
East with the securing of the major OCTG orders
with Kuwait Oil Company (“KOC”).
The onshore North American market was more
challenging in 2024 as lower natural gas prices
curtailed activity. We will aggressively manage
the costs within our control in this area of the
market, roll out new technology, and drive
efficiencies in the year ahead to restore
profitability to the Hunting Titan operations.
The political climate in the UK has led to a
reduction in drilling over recent years, leading
to losses for the EMEA operating segment.
This has resulted in a major restructuring, which
was announced in January 2025, with the aim
of aligning our cost base with the outlook for
the region.
Financial performance
Hunting has delivered another year of strong
financial results. Revenue grew 13% from
$929.1m in 2023 to $1,048.9m in 2024.
The major contributor to this increase was the
successful award of the $231m KOC contracts.
This award was the result of several years of
tender and vendor qualification. The planning
and execution of this contract demonstrates the
Company’s ability to manage large scale projects.
During the project, the commercial terms meant
that our working capital profile was well managed,
which is another achievement in the year, as our
strong year-end total cash and bank/(borrowings)
result makes clear. Our Subsea product group
also delivered on major projects in Guyana,
continuing the success with ExxonMobil.
EBITDA grew 23% from $102.4m in 2023 to
$126.3m, as a result of the growth in the OCTG
and Subsea product groups.
Our adjusted profit before tax was $75.6m
compared to $50.0m in 2023. Following the
$109.1m impairment within the Hunting Titan
operating segment, the loss before tax was
$33.5m (2023 – $41.1m profit).
Free cash flow of $139.7m increased by $140.2m
from 2023. Major contributors to this strong result
included working capital efficiency gains and
earnings results.
The refinancing of our committed borrowing
facilities, completed in October 2024, also
supports the Group’s 2030 ambitions. At the
year-end, our balance sheet strength gives the
Company the ability to further invest in our
strategic initiatives.
With the year-end total cash and bank/
(borrowings) results noted above of $104.7m
at 31 December 2024, we have the firepower to
execute growth both organically and through M&A.
The Company is very disciplined in identifying
acquisition opportunities that are consistent with
the Capital Markets Day commitments, and
which meet our financial targets.
Dividend
Based on our success in the year, and in line
with our Capital Markets Day commitments,
the Directors are declaring a Final Dividend of
6.0 cents per share (2023 – 5.0 cents) which
takes our total dividend for the year to 11.5 cents
per share (2023 – 10.0 cents) or an increase of
15%. The Final Dividend is subject to approval
at the Company’s Annual General Meeting
on 16 April 2025.
Board succession
Over the past four years, the Board’s succession
plan has been executed in a manner that aligns
our skill sets with future strategy.
In January 2024, Margaret Amos joined the Board.
Margaret brings significant aerospace expertise
to Hunting, which is an area we seek to grow in
the coming years as we continue to diversify our
revenue streams.
In April 2024, John (“Jay”) Glick stepped down
as Company Chair. Jay led the Company through
challenging times and set the path for the future
strategy. We thank him for his years of service to
the Company and wish him well for the future.
In February 2025, we announced the retirement of
Annell Bay after ten years’ service to the Company.
Annell’s accomplishments as Chair of the
Remuneration Committee are significant and
include the process of developing and gaining
shareholder approval for the 2024 Directors’
Remuneration Policy.
Both Jay and Annell have been instrumental in
assisting me in my transition to Company Chair.
In H2 2024, the Nomination Committee began
a process to appoint a new, independent,
non-executive Director. On 3 March 2025,
we announced the appointment of Catherine
(“Cathy”) Krajicek. Cathy brings to the Board deep
oil and gas industry knowledge and significant
international experience to assist in continuing
our long-term growth plans in the energy sector.
Cathy will automatically retire and offer herself
for reappointment by shareholders at the
Company’s 2025 Annual General Meeting.
Since my appointment as Company Chair in April
2024, I have been extremely impressed with the
quality and depth of our team. The management
team is focused on executing the Capital Markets
Day strategy and reaching the outlined targets.
The culture of technology, safety, and employee
engagement is visible across the Company. The
transparency and trust with our shareholders has
been evident in all my meetings. I look forward to
the continued success of the Company.
Stuart M. Brightman
Company Chair
6 March 2025
Hunting PLC
Annual Report and Accounts 2024
7
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting 150th anniversary
As we look to the next
150 years, this culture will
be the basis of future growth,
and like the last 150 years,
it will be our workforce and
communities which will drive
that success.
In April 2024, the Company celebrated its 150th
anniversary, commemorating the milestone of the
formation of the first Hunting company, way back
in 1874. The commercial vision of Charles Hunting,
which started in shipping, has been underpinned
by a very special culture, one which can be seen
today across all our businesses, which is our
focus on our employees.
Hunting’s commitment to its workforce has
been the main contributor to our success over
the years. Keeping our employees safe, paying
fair compensation, supporting development
and personal success are all key themes
of our businesses.
Throughout 2024, each location around the world
organised events, from the US to China, to mark
this year of celebration in their own regional style.
In London, many of our European employees
were invited to an event at the National Portrait
Gallery, where shareholders, advisers, members
of the Hunting family, and Board members came
together to share this milestone.
Our facilities in Dubai and Netherlands paid
homage to our maritime heritage with traditional
boat trips – one circling the Jumeirah Beach
area and another venturing from the Netherlands
facility into Amsterdam and back. To celebrate
our 150th anniversary in North America, a variety
of luncheons took place.
In Singapore, our employees raised their glasses
in a spirited “Yam Seng” toast, symbolising
wishes for ongoing prosperity in this timeless
tradition. Meanwhile, in Batam, employees came
together to form the iconic figures “150”, “1874”
and “We are Hunting” in a meticulously organised
formation — a visual homage to our enduring
corporate identity.
Community events were held and donations
were made across the Group, to recognise the
communities in which we operate and support.
These celebrations, showcasing cultural diversity
and a shared spirit, highlight the solid foundations
of the Group. As we look to the next 150 years,
this culture will be the basis of future growth, and
like the last 150 years, it will be our workforce and
communities which will drive that success.
We are Hunting.
Hunting PLC
Annual Report and Accounts 2024
8
Strategic Report
Corporate Governance
Financial Statements
Other Information
1
Throughout 2024 each
location around the world
organised events, from the
US to China, to mark this
year of celebration.
1.
Our employees in Batam, Indonesia celebrated
in unique style.
2.
In London, our European staff attended
an event at the National Portrait Gallery.
3.
Members of the Hunting Family also took
part in the event.
4.
Current and former Directors also attended.
5.
Our staff in Houston also held celebratory
luncheons.
6.
In Singapore, a celebratory toast was raised
looking to the next 150 years.
The Directors gathered in
London to meet employees and
members of the Hunting Family.
Hunting 150th anniversary
continued
Hunting PLC
Annual Report and Accounts 2024
9
Strategic Report
Corporate Governance
Financial Statements
Other Information
4
6
5
3
2
Hunting
Following our Capital Markets Day in September
2023, where the Directors and senior leadership
team launched the Hunting 2030 Strategy, 2024
saw impressive execution on a number of strategic
milestones, which will assist in the delivery of our
medium-term targets. The strategy is aimed at
delivering revenue and profit growth to the end
of the decade and beyond, supporting stronger
free cash flow generation and sustained returns.
Our revenue diversification strategy, which
includes building a baseload of earnings from
non-oil and gas end-markets, is targeted at
reducing the cyclicality of the Group’s financial
performance, even though the Directors see
resilient, long-term demand for our products
and services, which support the global energy
industry. The strategy, which is underpinned
by four strategic pillars, will be delivered through
Hunting’s current portfolio of businesses as well
as through targeted bolt-on acquisitions.
Jim Johnson
Chief Executive
Hunting 2030 Strategy
2030
Hunting PLC
Annual Report and Accounts 2024
10
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting 2030 Strategy
continued
Hunting 2030 Strategy
Hunting has defined four strategic pillars
to deliver growth in the long term
ESG and
sustainability
READ MORE
ON PAGE 15
Strong returns
READ MORE
ON PAGE 13
Growth
READ MORE
ON PAGE 12
Operational
excellence
READ MORE
ON PAGE 14
Hunting 2030 financial and
investment return targets
We are targeting c.$2.0 billion
of annual revenue by 2030
Our operational growth strategy is supported
by strong market fundamentals and independent
market commentary that point to sustained
demand for oil and gas and committed industry
capital expenditures. The Group has set a 2030
revenue goal of c.$2.0 billion p.a., comprising
75% sourced from oil and gas and 25% from
non-oil and gas sectors, including the energy
transition sector.
Deliver ROCE of 15% or greater by 2025
The Group is focused on retaining a strong
balance sheet and maximising its return on
capital employed through careful management
of its working capital. Management has set a
target of a working capital to annualised revenue
ratio of c.35% by 2025, to deliver superior returns
compared to our peers. To achieve this, long-term
working capital targets of 130 days for inventory,
75 days for receivables and 45 days for payables
have been set.
Increase dividend distributions by a
minimum of 10% per annum to 2030
We are seeking to return cash to shareholders,
primarily through dividend distributions, with
the Board targeting a steady increase to 2030
of 10% p.a.
Deliver a more efficient business platform
To ensure that we operate efficiently, the
Group is focused on disposing non-core
and underperforming investments and product
lines, thereby reducing the global operational
footprint by c.10% and reducing fixed costs
by c.$6 million p.a., including simplifying the
management structure and back office services.
Increase our EBITDA margin
to 15% or greater
Our focus on delivering technology that attracts
high margins, containing costs, and maximising
the output from our current operating footprint
are our key drivers to meet the EBITDA margin
target of 14-16% by the end of 2025, and
exceeding this target by 2030.
Generate c.$750 million of cumulative
free cash flow by 2030
With increased revenue and margins, supported
by stringent management of our balance sheet,
we are targeting an EBITDA to free cash flow
conversion rate of 50% and aiming to deliver
c.$750 million of cumulative free cash flow through
to the end of the decade. This target is on a
post-capex basis.
Net leverage of less than 1.5x EBITDA
through the period to 2030
By maintaining a strong balance sheet, liquidity,
and a prudent approach to debt, a long-term
net leverage of 1.5x EBITDA is targeted.
Underpinned by our diversified portfolio
of businesses and targeted bolt-on
acquisitions
Risks to the strategic pillars of the 2030 Strategy
1
Increased competition and market consolidation
2
Geopolitical instability
3
Adverse movement in commodity prices
4
Information technology and cyber security
5
Our ability to achieve our strategic goals depends
on how we react to external and internal forces
6
Legal and compliance risk
7
Loss of key executives or staff and shortage of key staff
8
Climate change and energy transition
9
Product quality and reliability
10
Work environment issues including health and safety
Hunting PLC
Annual Report and Accounts 2024
11
Strategic Report
Corporate Governance
Financial Statements
Other Information
Growth
Our aim is to continue to develop
our global presence and supply a
comprehensive range of products
used in the wellbore and through
expansion into complementary
non-oil and gas sectors.
Our diversified portfolio of products,
which are offered in strategic global
locations, will enable us to produce
high levels of profitability and free
cash flow.
Our cash generation will facilitate
our growth through investment
in our existing businesses and
through acquisition.
Retain focus on global oil and gas
opportunities, specifically growing our
subsea and offshore-focused businesses
Crude oil and natural gas are forecast to be two
critical primary energy sources for many decades
to come. As developed and emerging economies
seek growth and energy security, hydrocarbon
resources will remain part of the energy
landscape alongside other renewable and low
carbon energy sources. The Group will continue
to broaden its product offering and introduce
critical technologies through R&D and targeted
mergers and acquisitions (“M&A”). The offshore
sector of the global energy industry provides
predictable and sustained hydrocarbon
production, which have increased in importance
for project developers in recent years.
Develop a global position in the energy
transition sector
The energy transition sector is an area of
significant opportunity for Hunting, as global
efforts to decarbonise the energy supply chain
accelerate. The Group sees strong growth in
supplying products for geothermal as well as
carbon capture and storage projects, which
are increasingly demanding high-performance
technology and materials that can deliver
multi-decade benefits to the energy industry.
Progress in high-value, non-oil
and gas industries
Given the cyclicality of the oil and gas industry,
a key part of our strategy is to build a less volatile
revenue and profit profile. This will be delivered
through organic and acquisitive growth of non-oil
and gas businesses. We currently sell into several
non-oil and gas end-markets, such as the
aviation, commercial space, defence, medical,
and power generation sectors, and will continue
to leverage our world-class precision engineering
and manufacturing know-how into these
high-quality markets and industries.
Progress in the year
Related KPIs
Revenue; non-oil and gas revenue; EBITDA; adjusted
profit before tax; adjusted diluted earnings per share;
total shareholder return; and free cash flow.
SEE PAGES 18 AND 19
Related risks
1
2
3
5
7
8
9
SEE PAGES 104 TO 109
01
Maintained a strong sales order
book driven by the OCTG, Advanced
Manufacturing, and Subsea product
groups. We ended the year with
an order book of $508.6m
(2023 – $565.2m).
02
Secured record orders with Kuwait Oil
Company, with OCTG sales now 44%
(2023 – 43%) of total revenue.
03
Strong results delivered from the
Subsea product group as orders for
Hunting’s titanium stress joints for
ExxonMobil were completed through
the year.
04
Delivered large-scale
commercialisation of the Group’s
licensed Organic Oil Recovery
technology – dependent on volumes
and assumed extensions could result
in c.$60 million of contracts won
in H2 2024.
05
Accelerated our strategy in India,
with the securing of an API threading
licence at Hunting’s Nashik facility
– profit contributed from the Jindal
Hunting Energy Services joint venture
totalled $2.3m (2023 – $0.2m loss) in its
first full year of operation.
06
Non-oil and gas revenue totalled
$75.1m (2023 – $75.9m) in the year, with
an increase in the sales order book for
aviation clients.
07
Recorded $14.7m of energy transition
revenue in the year, predominantly for
geothermal projects in Asia Pacific,
Europe and North America.
08
Secured exclusive sales,
manufacturing and distribution rights
for CRA-Tubulars’s titanium-lined
carbon fibre tubing technology
in North America and Europe for
five years. Further investment in
Cumberland Additive was also made.
Hunting 2030 Strategy
continued
Hunting PLC
Annual Report and Accounts 2024
12
Strategic Report
Corporate Governance
Financial Statements
Other Information
Strong returns
In the growth phase of the oil and
gas cycle, our business has the
capability to produce high levels of
profitability, strong cash generation,
and solid returns on capital, leading
to increased distributions to
shareholders. To reduce the
impact of oil and gas cyclicality
on profitability, the Group is targeting
opportunities in the energy transition
sector in addition to growing its
revenue from the commercial space,
defence, medical, and power
generation sectors. The Group
continues to look for opportunities
to reduce its fixed cost base to
ensure that it is more efficient.
Increase EBITDA
The Group is targeting strong growth in
its EBITDA profile, with an ambition of at least
$300m p.a. by the end of the decade (based on
meeting the $2.0bn of revenue and 15% EBITDA
margin ambition). This target will be delivered
through both organic growth and material
contributions from acquisitions to be secured
in the coming years.
Improve working capital efficiencies
Hunting has a working capital to annualised
revenue ratio target of 35% to be delivered
by the end of 2025. Improvements to inventory
and receivables are the key levers to delivering
this ambition, supported by the use of working
capital solutions and instruments, which
shorten the cash cycles of some of our more
capital-intensive contracts.
Deliver strong cash flow conversion
Generating and releasing cash from our capital
employed, thereby increasing EBITDA, will lead to
Hunting meeting its stated long-term objective of
a 50% EBITDA to free cash flow conversion rate.
Increase shareholder returns
Capital growth and increased dividends are
the primary methods of delivering returns to
our shareholders. The targeted increase in our
dividend, of at least 10% p.a. to the end of the
decade, is a key commitment by the Directors
as part of our Hunting 2030 Strategy.
Progress in the year
Related KPIs
Revenue; non-oil and gas revenue; EBITDA; adjusted
profit before tax; adjusted diluted earnings per share;
dividend per share declared; total shareholder return;
free cash flow; working capital to annualised revenue
ratio; and return on average capital employed (“ROCE”).
SEE PAGES 18 AND 19
Related risks
1
2
3
5
8
9
SEE PAGES 104 TO 109
01
Delivered 23% increase in EBITDA
to $126.3m (2023 – $102.4m restated).
02
Delivered a 3 percentage point
increase in ROCE to 9% (2023 – 6%).
03
Delivered 15% increase to total
dividends declared to 11.5 cents
(2023 – 10.0 cents).
04
Delivered $75.1m (2023 – $75.9m)
in non-oil and gas sales, which
represents 7% of external revenue.
05
Delivered year-end total cash
and bank/(borrowings) of $104.7m
(2023 – $(0.8)m).
06
Delivered a working capital to
annualised revenue ratio of 29%
(2023 – 46%).
07
Delivered a $6.5m annualised cost
base reduction within Hunting Titan.
08
Delivered a 111% EBITDA to free cash
flow conversion rate.
Hunting 2030 Strategy
continued
Hunting PLC
Annual Report and Accounts 2024
13
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operational excellence
Our people are at the heart of our
business, and we ensure that their
health, safety and well-being are a
priority. We operate in competitive
and cyclical sectors, which are high
profile and well regulated. To be
successful, we must deliver reliable
products, which are quality-assured
to the highest industry standards,
and assist safer processes for our
customers. We strive to ensure that
our working capital is managed
efficiently to enable timely delivery
of our products to our customers.
Maintain and improve our health
and safety performance
The safety of our employees remains a key
management priority as it informs our clients
of our approach to delivering a best-in-class
service offering.
Increase training and development
for our workforce
Training continues across the Group in many
areas, including HSE, quality assurance, IT and
cyber awareness, financial, and other important
operational policies covered within our Code
of Conduct training programme.
Continue to deliver strong
quality-assured products
Our products operate in some of the harshest
environments, therefore delivering products
that consistently perform and which protect
our customers, suppliers, employees and the
environment remains a key area of focus.
Our facilities continue to secure
key manufacturing accreditations
Hunting has continued to seek important
ISO accreditations including manufacturing
excellence, and environmental management.
We aim for zero recordable incidents
and fatalities
Protecting our employees and contractors
who work out of our facilities is a key focus.
Progress in the year
Related KPIs
Working capital to annualised revenue ratio; total
recordable incident rate; and internal manufacturing
reject rate.
SEE PAGES 18 AND 19
Related risks
4
5
6
7
9
10
SEE PAGES 104 TO 109
01
Our total recordable incident rate
in the year was 0.93 (2023 – 0.91),
reflecting a broadly consistent
performance for health and safety,
and averaging 0.94 over the past
three years.
02
Recorded training in the year totalled
68,834 hours (2023 – 48,013 hours) as
broad-based efforts to develop and
protect our workforce were enhanced.
03
Our internal manufacturing reject
rate was 0.31% (2023 – 0.2%),
demonstrating our production
excellence.
04
Our joint venture facility in Nashik,
India secured its API licence in May
2024, which supports our drive to
expand our customer base in-country.
05
In the year, we manufactured
15.6m (2023 – 23.0m) parts, with
only 0.0006% (2023 – 0.0006%)
of shipped parts returned.
06
We are pleased to report that there
were zero fatalities (2023 – zero)
for employees and contractors
in the year.
07
76% (2023 – 78%) of our facilities
accredited with the ISO 9001: 2015
(quality management systems)
standard.
08
Cyber and IT training also increased
in the year, as new systems
were deployed.
Hunting 2030 Strategy
continued
Hunting PLC
Annual Report and Accounts 2024
14
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and sustainability
We are committed to acting with
high standards of integrity and
creating positive, long-lasting
relationships with our customers,
suppliers, employees, and the wider
communities in which we operate.
We are also focused on managing
and reducing our carbon footprint
and impact on climate change.
Our employees are our most important
asset, and we aim to keep our voluntary
turnover rate low
Hunting strives to keep our employee attrition
rates low as it reduces the risk of injury, it reduces
costs associated with hiring and training new
employees, ensures that productivity remains
high, and a stronger company culture prevails.
Our attention to training, as noted above, supports
our drive to improve efficiency, which keeps our
workforce safe.
We continue to seek ways of reducing
our carbon footprint and encourage our
suppliers and customers to do the same
Hunting continues to improve its carbon and
climate reporting to enable our investors and
other stakeholders to understand our impact
on the environment. We are targeting a reduction
in our scope 1 and 2 greenhouse gas emissions
by 50% from our 2019 baseline year and to
purchase 50% of our energy from renewable
sources by the end of the decade.
We will enhance our carbon and climate
reporting to enable our stakeholders
to understand Hunting’s impact on
the environment
Hunting now reports scope 1, 2 and 3 emissions
and will continue to seek enhancement to our
scope 3 data collection in the year ahead.
Assurance of our 2023 scope 1 and 2 data
was completed in the year.
We are committed to ethical ways of
doing business, which includes transparent
business dealings and having a zero
tolerance to modern slavery
Hunting’s culture encourages the highest levels
of ethical behaviour and to this end has strong
anti-bribery and corruption, modern slavery
and sanctions policies.
Progress in the year
Related KPIs
Total recordable incident rate; internal manufacturing
reject rate; total scope 1 and 2 emissions; CO
2
intensity
factor; total purchased electricity; and renewable
energy purchased.
SEE PAGES 18 AND 19
Related risks
5
6
7
8
10
SEE PAGES 104 TO 109
01
Our total scope 1 and 2 GHG emissions
of 22,233 tonnes were down year-on-
year (2023 – 22,599 tonnes, restated),
despite activity and revenue
increasing 13% in the year.
02
Our reporting of scope 3 emissions
was expanded in the year, with data
collected from four out of five
operating segments against 11
of the 15 scope 3 pillars.
03
Our CO
2
intensity factor was
21.2kg/$k of revenue (2023 – 24.3kg/$k
of revenue, restated) demonstrating
a further reduction in the year as our
operating efficiencies increased.
04
Electricity purchased from renewable
sources was 21% (2023 – 23%).
05
Zero environmental fines or incidents
in the year (2023 – zero).
06
The recordable incident rate was
0.93 (2023 – 0.91) and our internal
manufacturing reject rate was
0.31% (2023 – 0.2%) in the year.
07
In the year, our voluntary turnover
rate was 10.3% (2023 – 13.5%), and
the average tenure of our employees
is nine years (2023 – nine years),
which helps us mitigate HSE risk.
08
Hunting had zero (2023 – zero)
bribery-related fines in the year.
Hunting 2030 Strategy
continued
Hunting PLC
Annual Report and Accounts 2024
15
Strategic Report
Corporate Governance
Financial Statements
Other Information
Investment proposition
Hunting PLC’s investment case
is based on technology, precision
engineering core competencies,
and a deep knowledge of the
global energy and advanced
manufacturing industries.
Our strategy and expertise will
drive long-term growth, providing
leverage to deliver our value
proposition into new sectors.
Our core competencies
Our strategic differentiators
position us competitively
Our sectors of focus
are resilient
Our financial returns
are gaining momentum
Leadership in:
• Systems, design and precision
engineering;
• Bespoke manufacturing; and
• Metallurgy and materials.
Investing in our people to provide:
• Innovation and a competitive edge,
protected through patents and
trademarks;
• Engineering and technical leadership
to attract blue-chip customers from
multiple end-markets; and
• A premium service culture.
Global operating presence
in key locations and exposure to
high-growth markets with proven
controls over:
• Quality assurance;
• Health and safety; and
• Carbon emissions.
Strong, experienced management
team to:
• Pursue growth across complex
and competitive sectors;
• Diversify revenue to ensure long-term
resilience;
• Navigate through market cycles; and
• Ensure M&A targets are aligned with
our long-term strategy.
Diversified portfolio:
Hunting has a diversified portfolio of
market-leading technologies, products
and services that address many areas
of the energy and non-oil and gas supply
chain. The Group holds over 400 patents
and trademarks across key technologies
and geographies.
Efficiency:
Our precision-engineered products are
highly reliable and assist in higher safety
protocols and more efficient procedures
for our customers, wherever they
are deployed.
Commercial agility:
Hunting is able to leverage its world-
class engineering and manufacturing
capabilities into the energy transition
sector and into high-quality non-oil and
gas markets and industries through its
global presence. Our commercial agility
within the markets we serve helps us
to remain a technology leader, often
with a compelling market share.
Our ESG principles:
Hunting has an established culture based
on its highly skilled and trained workforce,
resulting in strong quality-assured
products and a robust HSE record.
Our ESG principles help us drive growth
and internal efficiencies, increase safety
for both our workforce and that of our
customers, and lower carbon emissions
through operational effectiveness and
technological innovation.
Oil and gas:
The global energy industry, particularly
oil and gas, is a long-term driver of
economic growth. This is likely to
be the case for many years to come.
Energy transition:
Energy transition opportunities are
complementary to our core oil and gas
markets, which is a further area of
long-term growth for the Group.
Other non-oil and gas:
Aviation, commercial space, defence,
medical, and power generation sectors
have long-term growth prospects.
These are resilient markets that support
economic prosperity and use our
precision engineering expertise, which
will reduce cyclicality in our earnings.
Strong growth profile:
Hunting has increased its revenue, profits
and cash flows as market conditions
have improved across the year.
Improved margins:
Stronger pricing and higher facility
utilisation levels have enhanced
operating margins and earnings.
Improved earnings:
Increased earnings have led to higher
shareholder and capital returns in the
form of dividend distributions and
capital growth.
Cash generation:
Consistently turning profit into free
cash flow.
Strong balance sheet:
• Improving balance sheet efficiency;
• Financial stability; and
• Revolving Credit Facility and Term
Loan provide liquidity.
Progressive financial returns:
• Revenue and profit growth;
• Fixed cost reduction strategy, delivering
a more efficient business platform;
• Increasing EBITDA to free cash flow
conversion; and
• Dividend growth.
Hunting 2030 Strategy
continued
Hunting PLC
Annual Report and Accounts 2024
16
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting’s proprietary premium and semi-premium
connections include our SEAL-LOCK™,
WEDGE-LOCK™ and TEC-LOCK™ families of
connections. Our strategy, which has extended
over many years, is to provide customers with a
connection that will assist in the development of
any resource type, whether that be conventional
vertical wells, highly deviated deep-water wells
or high-torque extended length wells. We pride
ourselves on being able to assist in the supply
of a connection, no matter how challenging
the well environment is.
In recent years, we have evolved our offering to
better address customer needs by providing raw
material OCTG feedstock at the most competitive
price, while applying our best-in-class premium
connections for our customers.
In North America, this has meant focusing
our sales of connections using the extensive
OCTG distributor network across the US, where
a customer relies on Hunting to source the OCTG
at a competitive price, with our connection being
added. This gives Hunting and the client
independence from any one steel mill or OCTG
producer and gives maximum cost flexibility to
the customer when it is planning a well design.
Internationally, Hunting uses several Chinese
steel mills as its strategic supply channel for
OCTG, where Hunting has developed compelling
relationships over many years. Combining
Hunting’s connections with this competitively
priced OCTG feedstock has enabled Hunting
to challenge larger players in the OCTG market
and has allowed Hunting to be highly competitive
within much larger OCTG contracts – the success
with Kuwait Oil Company (“KOC”) being a key
example of our success in recent years.
In May/June 2024, we announced the securing of
orders totalling $231m, supplying c.90,000 tonnes
of OCTG with Hunting’s SEAL-LOCK XD™
connection applied. The winning of this order
was the result of five years of qualification of both
the Chinese OCTG from Henyang Valin Steel,
and Hunting’s premium connections. The project
was for deepwater gas developments offshore
Kuwait, which is part of a wider strategy to
increase domestic production in-country. Project
teams from KOC, Hunting and Henyang worked
hard to complete the qualification processes,
with Hunting also completing a smaller order
at the start of the year for KOC to confirm quality
and supply logistics.
The KOC orders are being completed in eight
shipments, four of which were delivered in 2024,
with the remainder to be completed in H1 2025
– supporting our 2025 financial targets.
Hunting would like to thank KOC for its support
and confidence.
Growing OCTG internationally
Hunting PLC
Annual Report and Accounts 2024
17
Strategic Report
Corporate Governance
Financial Statements
Other Information
Key Performance Indicators
Financial
Revenue
$m
1,048.9
2024
2023
929.1
2022
725.8
Revenue is earned from products and services sold
to customers from the Group’s principal activities
(see notes 2 and 3).
Dividend per share declared*
cents
11.5
2024
2023
10.0
2022
9.0
The amount in cents returned to Ordinary shareholders
in relation to the financial year (see NGM Q).
Sales order book*
$m
508.6
2024
2023
565.2
2022
473.0
The sales order book comprises the value of all orders
booked and expected to be recognised as revenue
in future periods (see NGM T).
Total cash and bank/(borrowings)*
$m
104.7
2024
2023
(0.8)
2022
24.5
Total cash and bank/(borrowings) comprises cash
at bank and in hand, fixed-term funds, money market
funds and short-term deposits less bank overdrafts
and bank borrowings (see NGM K).
Free cash flow*
$m
139.7
2024
2023
(0.5)
2022
(60.4)
All cash flows before transactions with shareholders
and investments by way of acquisition (see NGM P).
Adjusted diluted earnings per share*
cents
31.4
2024
2023
20.3
2022
4.7
Adjusted earnings attributable to Ordinary
shareholders, divided by the weighted average number
of Ordinary shares in issue during the year adjusted
for all potentially dilutive Ordinary shares (NGM B).
Non-oil and gas revenue
$m
75.1
2024
2023
75.9
2022
47.6
Revenue earned from products and services sold
to customers in non-oil and gas sectors (see note 2).
EBITDA*
$m
126.3
2024
2023
102.4
2022
49.3
Adjusted results before interest, tax, depreciation,
impairment and amortisation (see NGM C). EBITDA
has been restated to include the Group’s share
of associates’ and JVs’ results for the year.
Adjusted profit before tax*
$m
75.6
2024
2023
50.0
2022
10.2
Profit before tax excluding adjusting items
(see NGM B).
Working capital to annualised revenue ratio*
%
29
2024
2023
46
2022
44
Working capital as a percentage of annualised revenue
(see NGM E).
Total shareholder return*
%
0
2024
2023
(9)
2022
102
Total shareholder return is a measure of the
Company’s performance over time. It factors in
share price appreciation and dividends paid to show
the total return to the shareholder expressed as an
annualised percentage.
Return on average capital employed*
%
9
2024
2023
6
2022
1
Adjusted profit before interest and tax, for the previous
12 months, as a percentage of average gross capital
employed (see NGM S).
*Non-GAAP measure (“NGM”) see pages 255 to 262.
Hunting PLC
Annual Report and Accounts 2024
18
Strategic Report
Corporate Governance
Financial Statements
Other Information
Key Performance Indicators
continued
Non-financial
Global onshore capital investment
$bn
147.7
2024
2023
145.1
2022
135.0
The estimated onshore/land-based drilling and
production expenditures of the industry as reported
by Spears & Associates in their
Drilling & Production
Outlook – December 2024
.
Global offshore capital investment
$bn
66.8
2024
2023
67.5
2022
53.5
The estimated offshore drilling and production
expenditures of the industry as reported by
Spears & Associates in their
Drilling & Production
Outlook – December 2024
.
Global onshore average rig count
#
1,490
2024
2023
1,560
2022
1,517
The average onshore global rig count during 2024
as reported by Baker Hughes Inc.
Average WTI crude oil price
$ per barrel
76
2024
2023
78
2022
94
The average price recorded in the year for West Texas
Intermediary crude oil.
Global offshore average rig count
#
201
2024
2023
205
2022
189
The average offshore global rig count during 2024
as reported by Baker Hughes Inc.
Average Henry Hub natural gas price
$ per mmBtu
2.41
2024
2023
2.66
2022
6.54
The average price recorded in the year for Henry Hub
natural gas.
Market Indicators
Total recordable incident rate (OSHA method)
#
0.93
2024
2023
0.91
2022
0.97
The US Occupational Safety and Health Administration
(“OSHA”) incident rate is calculated by multiplying
the number of recordable incidents by 200,000 and
then dividing that number for the number of labour
hours worked.
Internal manufacturing reject rate
%
0.31
2024
2023
0.20
2022
0.13
Percentage of parts rejected during the manufacturing
process.
CO
2
e intensity factor
kg/$k of revenue
21.2
2024
2023
24.3
2022
30.9
CO
2
e intensity factor is defined as kilogrammes CO
2
of scope 1 and 2 greenhouse gas emissions, divided
by $’000 of revenue.
Total purchased electricity
GWh
50.2
2024
2023
49.4
2022
43.4
The Group’s total electricity purchased during the year.
Renewable electricity purchased
GWh
10.5
2024
2023
11.4
2022
8.7
The Group’s electricity purchased from renewable
or sustainable sources during the year.
Total scope 1 and 2 emissions
tonnes CO
2
e
22,233
2024
2023
22,599
2022
22,422
Scope 1 and 2 greenhouse gas emissions in tonnes,
reported in line with the Greenhouse Gas Protocol,
published by the World Resources Institute.
Hunting PLC
Annual Report and Accounts 2024
19
Strategic Report
Corporate Governance
Financial Statements
Other Information
Business Model
What we do
Hunting is a global engineering
group that provides precision-
manufactured equipment and
premium services, which create
sustainable value for our
customers. We are focused
on high-value end-markets
that recognise and value our
manufacturing capabilities.
Our
markets
Our pillars
for value
creation
Delivering
value for our
stakeholders*
Shareholders and
lenders
Employees
Customers and
suppliers
Environment and
climate
Government
and communities
Proprietary
technology
Strategic locations
Quality assured
products
Training
Critical
supply chains
Blue-chip
customers
and suppliers
Expertise in
materials
and engineering
Responsible
and sustainable
practices
Energy –
oil and gas
Energy –
transition
technologies
Non-oil
and gas
*Monitoring is through KPIs
(see pages 18 and 19) and
achievement of Hunting 2030
Strategy objectives
(see pages 10 to 16).
Hunting PLC
Annual Report and Accounts 2024
20
Strategic Report
Corporate Governance
Financial Statements
Other Information
2050
1990
2000
2010
2020
2030
2040
300
500
450
400
350
250
200
150
100
50
0
60%
100%
90%
80%
70%
50%
40%
30%
20%
10%
0%
Exajoules
Business Model
continued
Our markets
Energy – oil and gas
Our primary market focus is the oil and gas
sector of the global energy industry. Affordable
and secure energy has been the foundation
of economic growth for many decades, with
a technology and geographic landscape that
constantly changes. Global crude oil demand
is currently c.100 million barrels per day and,
as the chart opposite demonstrates, this is likely
to remain unchanged for decades to come.
Our products and services are developed to
support this global need. The oil and gas industry
is a complex, well-regulated, multi-faceted sector
with a wide range of technological needs to
address the extraction of hydrocarbons in a safe
and responsible manner. Hunting’s products are,
therefore, aimed at addressing the needs of our
customers, whether that be integrated energy
groups, international service companies, or
national or independent oil and gas companies.
To deliver this daily demand for oil and gas, the
industry needs technology and equipment that
are high-performance, engineered solutions.
Hunting’s major product groups are summarised
on pages 44 to 53, and range from onshore-
focused well completion solutions produced by
our Perforating Systems business (our Hunting
Titan operating segment) to equipment used
in deepwater developments produced by our
Subsea businesses (our Subsea Technologies
operating segment). A key market indicator for
Hunting’s businesses is the annual capital
expenditures allocated by the industry’s
stakeholders. In 2024, the global investment
in crude oil and natural gas production was
c.$214.5 billion. This is likely to be stable for many
years to come as the world maintains its reliance
on traditional energy solutions.
Energy – transition technologies
As western economies increase efforts
to decarbonise their energy needs, exciting
market opportunities are opening to the Group.
Geothermal energy is a primary energy source
that is seeing strong growth potential in the short
term, to deliver cleaner sources of heat and
energy. These developments are presenting
complex engineering challenges to the energy
industry. Hunting sees high growth opportunities
for its OCTG product group as our premium
connections and strategic supply channels offer
critical solutions to many clients. Carbon capture,
usage and storage (“CCUS”) is another solution
being accelerated to reduce atmospheric carbon.
CCUS projects demand high-end materials and
engineered solutions that will enable these
projects to operate for many decades.
Non-oil and gas
Hunting has manufactured products and
technologies for the aviation industry for many
years. The Group has key defence-related
accreditations within its Advanced Manufacturing
businesses, which enable Hunting to participate
in government contracts including the naval
and air force segments, supplying engine shafts
for military aircraft and periscope tubes for
submarines. In recent years, the Group has also
manufactured components for the commercial
space sector, which demands our unique
precision engineering skills and expertise.
Hunting manufactures key components for the
power generation sector, including turbine shafts,
and is also focused on developing accessories
for the medical sector.
IEA projected fossil fuel demand: 1990-2050
Source: IEA – World Energy Outlook
Oil
Coal
Natural gas
Share of fossil fuels (right axis)
Hunting PLC
Annual Report and Accounts 2024
21
Strategic Report
Corporate Governance
Financial Statements
Other Information
01
We develop proprietary
technology
The development of new technology and
products is a key element of our business model
and strategy.
This intellectual property and know-how is
introduced to our blue-chip customers as the
drive for more efficient and safer delivery of oil
and gas continues, as well as addressing the
challenging environments that the geothermal
and CCUS sectors operate in.
In 2024, the Group held 412 patents
and trademarks.
Related risks
1
3
4
5
6
7
8
9
10
02
We manufacture close to where
our clients need us
Hunting has a global operating presence in
strategic locations to ensure that we are close to
where our customers are drilling and developing
any resource type. Our established operating
footprint ensures that we can support our
customers in the oil and gas industry and it can
be leveraged to address global geothermal and
CCUS projects.
At 31 December 2024, we manufactured in
11 countries (2023 – 11), from 25 operating sites
(2023 – 27) and supplied through 14 distribution
centres (2023 – 16).
Related risks
1
2
6
Risks to our pillars for value creation
1
Increased competition and market consolidation
2
Geopolitical instability
3
Adverse movement in commodity prices
4
Information technology and cyber security
5
Our ability to achieve our strategic goals depends
on how we react to external and internal forces
6
Legal and compliance risk
7
Loss of key executives or staff and shortage of key staff
8
Climate change and energy transition
9
Product quality and reliability
10
Work environment issues including health and safety
03
We leverage our brand and reputation
through strong quality assured products
The Hunting brand is supported by our strong
reputation for quality assurance and health and
safety. These credentials drive customer loyalty and
form the basis of most industry tenders, which
support our success in increasing our market share
in key product lines and multiple end-markets.
During 2024, the Group manufactured
15.6m parts (2023 – 23.0m) with an internal
manufacturing reject rate of 0.31% (2023 – 0.20%).
The reject rate for goods shipped was 0.0006%
in the year (2023 – 0.0006%). These metrics
demonstrate the impressive quality and reliability
of our products. This performance strengthens
Hunting’s standing in its end-markets.
Related risks
1
4
5
7
9
10
04
We train our employees and
keep them safe
Our health and safety protocols have
been developed to keep our employees safe,
with our safety performance measured using
an industry-wide performance indicator,
which is monitored closely.
In 2024, the Group had 25 recordable incidents
(2023 – 24) leading to a total recordable incident
rate of 0.93 (2023 – 0.91) compared to the
industry standard of 4.0.
Related risks
4
5
7
10
Business Model
continued
Our pillars for value creation
Hunting PLC
Annual Report and Accounts 2024
22
Strategic Report
Corporate Governance
Financial Statements
Other Information
06
We target blue-chip customers
and suppliers
Hunting is a trusted supplier to some of the
world’s leading energy companies, including
integrated energy companies, national oil
companies, international services groups,
independent oil and gas producers, as well as
leading engineering companies who operate in
the global aviation, commercial space, defence,
medical, and power generation sectors.
We target clients and end-markets who value
strongly assured products and services, and
who demand high-performance technology
and products.
We have developed long-standing relationships
with our customers through our market-leading
reputation for HSE, quality assurance and
reliability, differentiated technology, availability
and delivery, and customer service and support.
Related risks
1
3
4
5
9
10
07
We leverage our expertise
in materials and engineering
Hunting’s workforce comprises highly
skilled engineers and machinists who lead
the development and manufacture of our
high-performance technology and products.
Our expertise in mechanical and materials
engineering and metallurgy ensures that
our products will perform in high-pressure,
high-temperature environments.
We can leverage this expertise into energy
transition markets as well as high-value,
non-oil and gas markets, such as aviation,
commercial space, defence, and medical,
for diversification opportunities.
Related risks
1
4
5
7
10
08
We operate in a responsible
and sustainable way
Hunting’s responsible and sustainable approach
to its global operations includes the monitoring
of waste and emissions to ensure we have a
minimal impact on the environment.
We have recycled for many years and, more
recently, have started to monitor our carbon and
climate impact, with initiatives being introduced
to reduce this impact.
The Group announced new carbon intensity
targets in March 2025 as part of the Board’s
drive to improve our carbon reduction credentials
and to assist in the preparation of a Net Zero
transition plan.
Related risks
4
6
7
8
9
10
05
We provide critical
supply channels
Our products are often manufactured using critical
raw materials, which enable them to perform in
highly challenging environments.
We work hard to provide competitive supply
channels to lower our customer’s project costs
without compromising on quality.
Hunting is an independent provider of premium
and semi-premium connections and precision
engineered accessories for all energy resource
types, providing cost agility for our customers.
The Group has several strategic partnerships,
including our joint venture partner Jindal SAW in
India, which produces OCTG pipe and tubulars,
to which Hunting’s premium connections are
applied, for the local Indian energy market.
This venture meets local content requirements.
The Group also has strategic supply chain
partners to support the accelerating energy
transition sector, including the ten-year alliance
with Jiuli and the five-year strategic partnership
with CRA-Tubulars, whereby Hunting has secured
exclusive sales, manufacturing and distribution
rights over their TCT (titanium-lined carbon fibre
tubing) technology in North America and Europe.
Related risks
1
2
5
7
9
Risks to our pillars for value creation
1
Increased competition and market consolidation
2
Geopolitical instability
3
Adverse movement in commodity prices
4
Information technology and cyber security
5
Our ability to achieve our strategic goals depends
on how we react to external and internal forces
6
Legal and compliance risk
7
Loss of key executives or staff and shortage of key staff
8
Climate change and energy transition
9
Product quality and reliability
10
Work environment issues including health and safety
Business Model
continued
Hunting PLC
Annual Report and Accounts 2024
23
Strategic Report
Corporate Governance
Financial Statements
Other Information
Delivering value for
our stakeholders
The Group’s stakeholders enable
the delivery of Hunting’s business
model and strategy. Stakeholder
engagement forms a key element
of our culture and is an area that
has increased over the past few
years. Understanding the needs
of our shareholders, customers,
suppliers, and workforce is
achieved through regular dialogue.
Shareholders
and lenders
Employees
Customers
and suppliers
Environment
and climate
Governments
and communities
Our shareholders and
lenders provide equity and
loan capital to the Group.
The Directors regularly
engage with shareholders
and lenders to discuss
performance, strategy,
governance, and other
matters. This feedback
is used to refine our
strategic plans.
Hunting’s employees deliver
our strategic plans and are
the Group’s most important
asset. We are committed
to diversity across the
organisation, the training
and development of our
workforce, and keeping
them safe through stringent
health and safety policies.
The Board meets regularly
with management and the
workforce through site
visits and engagement
programmes.
Our customers are critical
to the financial success
of the Group. Customer
dialogue helps us shape
our product development
strategy and provides focus
to our service offering.
Hunting continuously strives
to deliver a secure supply
chain for our customers
and in the year signed new
strategic agreements.
The Group is committed
to strong environmental
stewardship. Our operating
principals are focused on
containing and reducing
our carbon footprint,
maximising recycling,
reducing waste streams
and increasing our climate
change commitments.
The Group continued
its engagement with local
regulators, tax authorities
and governments in the
year. Hunting continues to
assist communities through
a wide range of activities,
including fund-raising
events and donations. Each
region develops their own
community initiatives to align
with local cultural practices.
11.5 cents
2024 dividend per
share declared
9 years
Average employee tenure
412
Patents and trademarks
21%
Electricity from
renewable resources
$70k
Charitable donations
Business Model
continued
Hunting PLC
Annual Report and Accounts 2024
24
Strategic Report
Corporate Governance
Financial Statements
Other Information
Shareholders
Hunting’s shareholders provide a key source
of capital to enable growth for the longer term.
The Group is a listed public company, with
one class of Ordinary shares quoted on the
London Stock Exchange in the Equity Shares
Commercial Companies category.
At 31 December 2024, the total number
of Ordinary shares in issue was 164.9m
(2023 – 164.9m), with 1,237 (2023 – 1,263)
shareholders on the register.
The Board is responsible for setting the
Company’s dividend policy. The Group’s current
practice is to declare dividends in US dollars but
pay in Sterling.
Returns achieved by shareholders, by holding
the Company’s Ordinary shares, are measured
through total shareholder return (“TSR”).
A TSR performance metric forms a large portion
of the longer-term remuneration paid to the
executives of the Group, with demanding vesting
targets measured against our industry peers.
In 2024, Hunting PLC’s Ordinary shares achieved
a TSR of 0% on an annualised basis. For the
definition of TSR please see page 18.
Total shareholder return
%
0
2024
2023
(9)
2022
102
Shareholder engagement
Regular shareholder engagement meetings are
organised through an annual calendar of work
arranged through our investor relations function.
The Chief Executive and Finance Director
meet with institutional investors following the
publication of the Group’s half- and full-year
financial results and throughout the year; attend
investor conferences in the UK, Europe and the
US to meet potential and existing shareholders;
hold one-to-one meetings with existing and
potential shareholders; and engage with private
and retail investors through channels such as
Investor Meets Company.
The Company holds a hybrid AGM in April each
year, which enables investors to attend in-person
or engage online through a webcast.
During the year, the Company hosted a facility
tour in the US for an institutional investor.
Further, the Company Chair and Senior
Independent Director meet investors annually to
discuss governance, succession, remuneration
and other matters. No specific agenda is set for
these meetings and they are designed to offer
open discussion and engagement.
Topics covered at the meetings held in the
year included, among others, the Company’s
progress against the Hunting 2030 Strategy, the
new Directors’ Remuneration Policy, and capital
allocation focusing on dividends, share buybacks
and M&A activity.
Dividend per share declared
cents
11.5
2024
2023
10.0
2022
9.0
Business Model
continued
Shareholders
and lenders
Board engagement and decision making
– shareholders
The Directors receive a report from the investor
relations function detailing the Company’s
major shareholders at each Board Meeting,
with a briefing by the Chief Executive, Finance
Director and Company Secretary on meetings
with shareholders that have occurred recently.
The Audit and Risk Committee reviews
dividend proposals as part of its regular
programme of work and makes a
recommendation to the Board following
a review of the financial performance for
the relevant reporting period. Dividends
are announced along with each set of Group
results and are usually paid in May and
October. The Directors are proposing a 2024
Final Dividend of 6.0 cents per share, which
will be subject to approval by shareholders
at the 2025 AGM.
During Q1 2024, the Directors concluded
a consultation and engagement process with
the Company’s major institutional investors
in respect of a new Directors’ Remuneration
Policy (“Policy”) and Long-Term Incentive
Plan (“Plan”). Strong shareholder support
was received for the new Policy, with an 85%
vote in favour and a 96% vote in favour of the
new Plan at the 2024 AGM. The 2023 Annual
Report on Remuneration received a 76% vote
in favour, which led to a further shareholder
engagement process being undertaken by
the Directors in June 2024. A response
statement to this engagement process was
posted on the Company’s website in August
2024, in line with the requirements of the 2018
UK Corporate Governance Code.
Hunting PLC
Annual Report and Accounts 2024
25
Strategic Report
Corporate Governance
Financial Statements
Other Information
Business Model
continued
Lenders
In October 2024, the Group entered into a new
funding arrangement for $300m of committed
borrowing facilities to finance the ongoing working
capital requirements of the existing business and
to support Hunting’s stated organic and
inorganic growth strategy.
The new funding arrangements comprise a
$200m revolving credit facility (“RCF”) and a
$100m term loan. These facilities replaced the
$150m Asset Based Lending (“ABL”) facility and
increase the Company’s access to committed
liquidity, extending the maturity of bank
borrowing facilities to 2028.
The new facilities are provided by a four-bank
syndicate including Wells Fargo, HSBC, First Abu
Dhabi Bank, and Emirates NBD.
A conventional earnings-based covenant regime
is attached to the facilities and includes a leverage
test (being the ratio of total net debt to adjusted
EBITDA not exceeding 3.0:1) and an interest
cover test (being the ratio of consolidated
EBITDA to consolidated net finance charges
not being less than 4.0:1).
The $200m RCF has been arranged with an
initial tenor of four years, expiring on 16 October
2028, with an option that allows the Company
to extend the contracted maturity date by an
additional 12-month term.
The $100m term loan has been arranged with a
three-year tenor and, pursuant to the conditions
of the facility agreement, was fully drawn on
signing of the facilities. After an initial 12-month
period, the term loan amortises with eight
quarterly repayments of $9.4m (the first such
payment due in September 2025) and a final
$25.0m repayment in September 2027.
On signing of the new facilities, the Group’s
$150m ABL facility was repaid and cancelled,
with drawings under the new term loan used,
in part, for this purpose. Combined with the
$104.7m of total cash and bank/(borrowings)
recorded at year-end, the Group now has
$344.8m of liquidity available to pursue growth
opportunities, including bolt-on acquisitions
noted above.
Board engagement and decision making
– lenders
The Directors are briefed at each Board
meeting by the Finance Director on the
Group’s financial position and the relationship
with members of the bank lending group.
During H2 2024, an extensive schedule of
meetings with potential lenders was organised
by the Group Treasurer, where the Company’s
medium-term strategy and funding needs
were presented ahead of final agreement
with the new lending group for the RCF
and term loan.
Hunting PLC
Annual Report and Accounts 2024
26
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting’s reputation, which has been built over
many years, is underpinned by its highly skilled
employees, who are key to fulfilling the Group’s
strategic objectives. At 31 December 2024,
the Group had 2,367 employees (2023 – 2,420)
across its global operations.
The Group is committed to training and
developing all employees, which includes
Health and Safety training, professional
development, and general career development
initiatives. To retain our staff, our employees are
fairly remunerated with a competitive base salary.
Given the competitive landscape of our industry,
our base levels of pay are well above minimum
wage thresholds. Employees are offered benefits
on joining the Group, including healthcare cover,
post-retirement benefits and, in certain instances
when Group outperformance in terms of
operational or financial targets has been delivered,
participation in annual bonus arrangements.
The Group has a strong reputation for being
a responsible employer, which is reflected in the
average tenure of nine years (2023 – nine years)
and voluntary workforce turnover rate of 10.3%
(2023 – 13.5%). This demonstrates Hunting’s
commitment to its employees and its drive
to nurture a mutually beneficial relationship
between the Company and its employees.
Hunting takes diligent steps to achieve full
compliance with all relevant regional laws
covering employment and minimum wage
legislation. As a responsible employer, full
and fair consideration is given to applications
for positions from disabled persons.
The Group’s ethics policies support equal
employment opportunities across all of Hunting’s
operations. While the Board, through the work
of the Ethics and Sustainability Committee,
monitors the Group’s culture, including our
procedures to comply with our published Code
of Conduct, responsibility for our employees lies,
for the most part, with local management to
enable local matters to be addressed, with all
businesses complying with the Group’s ethical
employment and human rights policies as
published in the Hunting PLC Code of Conduct
(www.huntingplc.com).
Year-end employees
#
2,367
2024
2023
2,420
2022
2,258
Training
The Group operates an embedded Health and
Safety training programme for its employees, with
an on-boarding programme for new employees.
The Group also provides ethics training through
a Code of Conduct course, to ensure awareness
of our published policies. The programme
incorporates anti-bribery and corruption, modern
slavery, fraud, and tax modules to ensure our
employees understand their responsibilities
on joining the Group.
Following feedback gathered in the 2023 employee
engagement survey, additional training courses
were offered to employees, including financial
training and personal development training.
Extensive IT and cyber-related training courses
are published for completion by all employees
of the Group.
Further, the Director of QAHSE implemented
new data collection procedures to collate all HSE
training sessions completed with our machinists
and shop-floor workers, which includes daily
and weekly toolbox briefings.
For further information on employee attraction,
retention and development, and employee
engagement, see pages 78 to 80.
Health and safety
The Group is committed to achieving and
maintaining the highest standards of safety for
its employees and other stakeholders. Hunting
has a culture of aiming for best practice and
employs rigorous Health and Safety practices.
We work very hard to ensure that there are no
fatalities and the Group targets zero recordable
incidents, with each local business required to
develop tailored Health and Safety policies to suit
their environment. These incorporate the Group’s
approach to putting safety first and, at a minimum,
comply with local regulatory requirements.
The Group monitors health and safety through
a number of key performance metrics, which
are reported to the Ethics and Sustainability
Committee twice a year.
Please see pages 86 and 87 for more
information on compliance with the SASB
reporting framework.
For further reporting on Health and Safety,
see page 79.
Business Model
continued
Employees
Hunting PLC
Annual Report and Accounts 2024
27
Strategic Report
Corporate Governance
Financial Statements
Other Information
Business Model
continued
Diversity and inclusion
The Company recognises the benefits of having
a diverse workforce, which include attracting and
retaining the best people for the job, supporting
and delivering high performance, and increasing
the effectiveness of the Company.
To this end, Hunting aims to build and maintain
a working culture that is inclusive of all and values
diversity. Hunting believes that promoting and
developing diversity is everyone’s responsibility.
The Company’s aim is to promote equality and
good relations between employees of a diverse
background and eliminate discrimination.
Hunting is committed to providing a safe working
environment where staff are treated with respect
and ensuring that our employees enjoy prejudice-
free decision making, taking into account all
stakeholder interests.
Hunting is also committed to building a working
environment in which all individuals can make
best use of their skills, free from discrimination,
victimisation, harassment and/or bullying, and
in which all appointments are based on merit.
Hunting has an embedded culture of equal
opportunities for all employees, regardless of
gender, sexual orientation, race, colour, nationality,
disability, neurodiversity, age, religion or belief,
marital or civil partnership status, pregnancy
or on maternity/paternity leave.
Hunting’s policies promote the gender and
ethnicity suggestions made in the Hampton
Alexander Review and the Parker Review, and
these are taken into consideration as the Board
is refreshed over the coming years, along with
the requirements published by the Financial
Conduct Authority noted on page 122.
For further reporting on diversity and inclusion,
see page 80.
Human rights
We are committed to respecting and upholding
the human rights of all our employees.
As part of the Code of Conduct training,
a module on human rights is included.
For further reporting on our approach to human
rights, see page 77.
Modern slavery
Our Modern Slavery statement can be found
on our website (www.huntingplc.com).
Whistleblowing
The Board of Hunting has established procedures
whereby employees can raise concerns, in
confidence, by contacting the Company Chair
or Senior Independent Director.
The Group also uses an independent
whistleblowing service operated by SafeCall.
Contact information for both these lines of
reporting is published on staff noticeboards
across the Group’s facilities and within the Group’s
magazine published twice yearly, the “
Hunting
Review
”, which is available to all employees.
Employee engagement survey
During 2023, Hunting completed its second
all-employee engagement survey using the
Gallup Q12 poll.
The survey asked several key questions about
employee engagement and satisfaction, including
the question: “On a five-point scale, how satisfied
are you with your organisation as a place to
work?”. The Directors were pleased that the
score for this question was 4.07 out of 5 points,
which is consistent with our 2019 score of 4.06.
The average score across all 12 questions
was 3.88 out of 5, a 0.10 increase from 2019.
This result is statistically significant because
most companies experienced a downward
trend between pre- and post-pandemic
surveys, and we are delighted that we saw
a slight improvement instead.
Other feedback was received through the
survey, including areas of improvement, which
management are currently working to address.
The survey is to be repeated in 2025.
In April 2024, the Company celebrated its 150th
anniversary with employee engagement events
organised at most of the Group’s facilities. For
further information on this important milestone,
please see the case study on pages 8 and 9.
Gallup Q12 employee engagement results –
average score out of 5
3.88
2023
2019
3.78
2022
0.00
Board engagement and decision making
– employees
Through the Ethics and Sustainability
Committee, the Board has formalised the
reporting of Human Resources and HSE
matters, with the Group’s Chief HR Officer
and Director of QAHSE providing reports
at each meeting.
These senior managers are also members
of the Executive Committee.
The Directors organised an employee
engagement event at the Group’s OCTG
facility in AmeriPort in December 2024,
where employees were able to ask
questions to the Board.
All reports to the Group’s SafeCall service
are taken seriously, with care being taken
to retain confidentiality and anonymity of all
callers. Each report is investigated thoroughly,
with the Board receiving briefings from Keith
Lough, the Company’s Senior Independent
Director. During the year, the Group received
three reports to the SafeCall service
(2023 – six). One additional report was received
outside of the SafeCall service. For further
reporting on our approach to business ethics,
see pages 76 and 77.
Hunting PLC
Annual Report and Accounts 2024
28
Strategic Report
Corporate Governance
Financial Statements
Other Information
Business Model
continued
Customers
and suppliers
Our customers
As a key participant in the equipment supply
chain, Hunting’s broad portfolio of products
and services enables the Group to cover a large
proportion of the needs of the global energy
industry, including onshore and offshore drilling
projects and conventional and unconventional
resource development, supported by selected
high-value services to help our customers
achieve their strategic objectives.
A common theme across all our businesses
is our ability to add value for our customers,
which is achieved by providing high-technology
products that lower the cost of operation, resolve
technical problems, or simply enable a job to
be completed more quickly or safely, without
compromising on quality. Hunting continues
to engage its customer base proactively to assist
its customers in meeting their strategic objectives
and we continue to liaise with customers regarding
technology developments that will lower their
production costs or increase in-field safety.
Customer engagement
Customer engagement is key to the Group’s
understanding of the short- to medium-term
needs of our various clients. This dialogue helps
us shape our strategy and focus our product
research and development programmes. In the
year, the Group continued to launch new products
that directly addressed customer needs, some of
which resulted from close customer collaboration
in response to in-field technical challenges.
During the year, the Company was awarded two
orders from KOC totalling $231m as a result of
over five years of engagement with KOC to get our
suppliers’ steel pipe and our connections certified
to enable us to participate in relevant tenders.
As part of our active dialogue and engagement
with our customer base, key clients are usually
invited to our facilities to review our production
capabilities and processes, review new
technology and brainstorm on future projects.
Customer contact reports are a regular feature of
our sales function, which often include issues or
concerns, in-field performance feedback and
overall customer satisfaction.
Customer perception and satisfaction surveys
undertaken by an independent third party are
also employed to provide customer feedback
to the Company.
Hunting’s customer-facing sales teams are directly
supported by the Group’s engineering, quality
assurance and health, safety and environment
teams, who all assist in the provision of key
operational performance information that supports
global tenders and the overall sales function.
During the year, the Group’s sales teams attended
several international trade shows, including
ADIPEC in Abu Dhabi and the Geothermal Rising
Conference in Hawaii, which enables engagement
with existing, as well as potential, customers
to take place.
Anti-bribery and corruption (“ABC”)
The Group has processes and procedures in
place to monitor and assess the risk of bribery
and corruption occurring.
Hunting’s Code of Conduct training course
includes detailed modules on ABC compliance
and risk assessment procedures.
Twice a year, each major business unit
completes a risk assessment process, detailing
management’s views on its risk profile against
16 key ABC considerations, and the mitigating
controls in place for each of these risks.
As part of the Group’s Internal Audit function’s
work programme, a review of these risk registers
is undertaken where the bribery and corruption
risk profile is challenged.
Customer-related ethics and governance
Hunting’s close relationship with its customers
is also enhanced by our ethical policies and
transparent ways of doing business.
All our major customers receive our Code
of Conduct, which includes a commitment
to be transparent in our business dealings.
Due diligence on new customers is also
completed to ensure the Group complies with
international trading and sanctions legislation.
Where relevant, we ask our clients to complete
“end-user” declarations to confirm that Hunting’s
products do not conflict or breach trading
restrictions or sanctions legislation. The Group
also has strong entertainment and hospitality
approval policies, which support our
commitment to conduct business with the
highest ethical standards.
Our suppliers
Hunting’s supplier base facilitates the Group in
achieving its purpose of providing highly trusted
and innovative products for our customers.
The Group ensures that critical materials are not
sourced from a single supplier, which provides
assurance to our customers that Hunting will
always be able to deliver.
Long lead-time material supplies are regularly
reviewed to ensure market pricing remains
competitive. Hunting’s management of its supply
chain includes working with a wide range of
suppliers with regular two-way dialogue on
quality expectations.
Hunting PLC
Annual Report and Accounts 2024
29
Strategic Report
Corporate Governance
Financial Statements
Other Information
Often, supply chain managers visit the facilities
of our suppliers to review procedures, including
quality assurance, HSE performance and
employment practices.
In the case of new suppliers, including those who
provide key components, first article inspection
procedures are in place prior to issuing the order,
to ensure quality and delivery expectations are met.
During the year, Hunting’s premium threading facility
in Nashik, India, received its API licence, which
has enabled the joint venture with Jindal SAW
to tender for additional opportunities in-country
as drilling accelerates across the sub-continent.
In August, Hunting expanded its strategic
partnership with CRA-Tubulars B.V., who are
developing and testing their titanium composite
pipe technology to support commercialisation
and to accelerate opportunities within the CCUS
sub-sector of the market.
The Company was a signatory to the UK’s
Prompt Payment Code and will begin reporting
on our payment practices in 2025 under the
new The Reporting on Payment Practices and
Performance (Amendment) Regulations 2024.
The Company remains committed to paying
at least 95% of its suppliers within the agreed
payment terms and to promptly advise them
if there is a dispute to ensure that disruptions
to the supply chain are kept to a minimum.
Supplier-related ethics and governance
As with the Group’s customer base, Hunting
completes due diligence on its supplier base
and communicates its ethics policies to its
major suppliers.
The Group’s Supplier Code of Conduct was
rolled out to major suppliers during 2023 and
2024, and is issued to suppliers together with
our Modern Slavery policy, which highlights the
Group’s ethical trading and fair labour policies.
Board engagement and decision making
– customers and suppliers
In parallel with the commercial dialogue and
engagement undertaken by our leadership
teams with our customers, the Board of
Hunting, in support of its statutory stakeholder
duty, has approved the development of the
Group’s strategy by reviewing and approving
capital investment projects that directly
support future customer needs. The Board
approved these capital investments, either
as part of the approval of the Strategic Plan
or Annual Budget process.
Board approvals are also required for contracts
over a certain monetary value, such as with
the two KOC orders.
In each case, the Board was satisfied that there
was good alignment between the final capital
allocation and the Board’s consideration of
customer matters.
The Board, through the work of the Ethics
and Sustainability Committee, reviews the
Group’s supply chain risk profile and reviews
engagement reports on the Group’s dialogue
with suppliers. This leads to discussion and
challenge by the Directors.
For further reporting on our approach
to business ethics, see pages 76 and 77.
Business Model
continued
Hunting PLC
Annual Report and Accounts 2024
30
Strategic Report
Corporate Governance
Financial Statements
Other Information
Business Model
continued
Carbon and climate matters have become
an area of close scrutiny in recent years, with
the Board overseeing the development and
introduction of strong governance and reporting
initiatives that will support Hunting’s commitment
to these issues for the long term. As part of this
commitment to manage and reduce its carbon
footprint, the Board announced a new carbon
intensity reduction ambition in March 2025,
whereby Hunting will now target a factor of
20kg/$k of revenue or less by 2030. The Directors
are mindful that all commitments made by the
Group should remain proportionate to the size
and profile of our operations, but also to protect
our earnings and shareholder returns, which form
the basis of our investment case.
In 2024, the Group expanded its work to collect
scope 3 emissions data, with the Hunting Titan,
Subsea Technologies, EMEA and Asia Pacific
operating segments now in-scope. This work
will be expanded during 2025 to cover the
North America operating segment. The Group
continues to migrate its primary and secondary
energy sources to lower carbon sources, with
the Group targeting the purchase of 50% of our
electricity requirements from renewable sources
by 2030.
Total scope 1 and 2 emissions
tonnes CO
2
e
22,233
2024
2023
22,599
2022
22,422
Group climate policy and commitment
to the Paris Accords
The Board of Hunting has committed to the
principles published in the 2015 Paris Agreement,
which aims to limit the increase in global
temperatures. The Group’s Climate Policy
can be found at www.huntingplc.com.
Annual greenhouse gas emissions
To monitor the impact of Hunting’s operations
on the environment, and in compliance with UK
Company Law, the Group collates greenhouse gas
(“GHG”) data in accordance with the principles
of the Kyoto Protocol and the methodologies
published by the World Resources Institute.
Hunting is committed to addressing environmental
issues and embedding a low carbon culture
within our Company. New facilities, such as the
facility currently under construction in Dubai, take
into account environmental impact considerations,
including protection from extreme weather
events, such as windstorms and flooding. The
Company discloses the breakdown of its GHG
emissions, to enable stakeholders to understand
the overall mix of emissions and the likely areas
of emissions reduction, as the Group continues
to evolve its initiatives to contain and reduce its
carbon footprint. The Company has a process
to independently assure its scope 1 and 2 data,
with a view to assuring its scope 3 data ahead of
setting science-based targets in the near future.
The Group submits its greenhouse gas data to
the Carbon Disclosure Project, which is available
at www.cdp.net.
The data reported and the carbon dioxide
conversion factors used to report the Group’s
carbon footprint are based on those published
by the UK government and the International
Energy Agency.
CO
2
e intensity factor
kg/$k of revenue
21.2
2024
2023
24.3
2022
30.9
For further information on Hunting’s climate,
ESG and wider sustainability efforts, please
see pages 68 to 101.
Board engagement and decision making
– environment
The Board has continued to oversee the
development of carbon and climate initiatives
in the year. Through the work of the Ethics
and Sustainability Committee, the Group
monitors all emissions and climate-related
disclosures, including compliance with the
Company’s TCFD reporting and agreed a
roadmap to enhance the Group’s external
reporting of this area.
Tonnes CO
2
e
2024
2023*
2019
(baseline year)
Scope 1
Fuel consumption, including natural gas
2,046
2,037
4,128
Vehicle fuel consumption
1,584
2,132
2,972
Total scope 1
3,630
4,169
7,100
Scope 2
Electricity consumption
18,603
18,430
28,774
Total scope 1 and 2
22,233
22,599
35,874
Scope 3
Scope 3 (extrapolated)**
534,835
353,346
n/a
Total scope 1, 2 and 3
557,068
375,945
n/a
*
The 2023 scope 1 value have been restated to reflect lower fuel usage recorded.
**
The scope 3 emissions have been extrapolated using data from four of Hunting’s five operating segments.
Environment
and climate
Hunting PLC
Annual Report and Accounts 2024
31
Strategic Report
Corporate Governance
Financial Statements
Other Information
Governments
and communities
Governments
Hunting’s global operating footprint extends
across 11 countries. As a consequence of this,
the Group interacts with a number of local
regulators, governments and tax authorities to
ensure that Hunting retains a good reputation
and business standing within each region of
operation and also seeks to comply with all
applicable and relevant local laws and regulations.
As a UK listed public company, the Financial
Conduct Authority (“FCA”) is the Group’s primary
regulator. With the assistance of the Group’s
brokers and legal advisers, the relationship with
the FCA is closely managed as and when
relevant matters arise.
Each business unit retains a close relationship
with the relevant local tax and legal authorities.
Given the sensitivity of interacting with
government officials, with respect to the risk of
bribery, the Group’s internal procedures include
analysis of which customers and suppliers are
government-owned, with all external-facing
employees trained in the Group’s anti-bribery
and corruption policies.
Tax strategy
Hunting is committed to acting with integrity
and transparency and to paying the right amount
of tax at the right time. Hunting’s tax strategy is
to fully comply with the tax laws, regulations,
and disclosure requirements of the countries
in which we operate. Hunting may engage
with reputable professional firms on areas of
significant complexity, uncertainty, or materiality
to support it in complying with its tax strategy.
Hunting seeks to engage with tax authorities with
professionalism, honesty and respect. It works
with all tax authorities in a timely and constructive
manner to resolve disputes when they arise.
Hunting does not tolerate tax evasion or the
facilitation of tax evasion. Hunting’s Code of
Conduct training course includes training modules
on this area to help employees understand the
risks and procedures in this regard.
Board engagement and decision making
– governments
The Group’s tax governance is managed
as follows:
• The Board reviews Hunting’s tax strategy
and policies on an ongoing basis, with
regular updates on the tax position
provided at each Board meeting by either
the Finance Director or Group Head of Tax;
• As part of the work of the Audit and Risk
Committee, tax matters are also monitored.
Further details can be found in the Audit and
Risk Committee Report on pages 161 to 166;
• Day-to-day matters are delegated to
Hunting’s Group Head of Tax and a small
team of in-house tax professionals who
hold a combination of accounting and
tax qualifications;
• The local financial controllers, supported
by their finance and operational teams, are
responsible for managing their operational
taxes in line with local laws and regulations
alongside the Group’s tax governance and
tax policies. They are supported by the
Group’s central tax team and local advisers,
as required;
• An annual review of our tax policies form
part of our internal Group Manual review
procedures; and
• Ongoing monitoring of tax legislation that
will impact us, including engaging specialist
advisers when appropriate.
Communities
The Board encourages community-focused
initiatives, with the Executive Committee
responsible for identifying local activities and
projects to support. This delegation allows
regional cultural practices to be considered.
A number of the Group’s businesses undertake
intern programmes whereby students at local
colleges and universities work within the
Company. Please see the case study
on page 33 for further information.
Local community sponsorships or charitable
donations are encouraged, following approval by
a member of the Board or Executive Committee.
Most businesses within the Group host “Open
House” days at facilities to allow customers,
suppliers, employees’ families, and other
members of the local community to see
our operations.
Community initiatives are regularly reported in the
Group’s magazine, the “
Hunting Review
”, which
profiles the Group’s operations, employees, and
community work.
For further reporting on community engagement,
see page 80.
Board engagement and decision making
– communities
The Board has a policy whereby unclaimed
dividends returned to the Company from its
registrar are donated to UK charities, with a
small committee, led by the Finance Director,
agreeing the beneficiaries of the charitable
donations.
Business Model
continued
Hunting PLC
Annual Report and Accounts 2024
32
Strategic Report
Corporate Governance
Financial Statements
Other Information
Shaping tomorrow’s workforce – Subsea Technologies
The offshore sector of the global energy market
continues to accelerate, with Hunting focused
on broadening its product offering in the subsea
sector through R&D and targeted mergers and
acquisitions, as part of our Hunting 2030 Strategy.
The Company recognises that there is strong
competition for skilled labour and, to address
this, Hunting is proactively fostering new pipelines
of skilled labour for our manufacturing facilities.
To support our commitment to promoting our
local communities and workforce development,
a formal internship programme was formulated
for roll out across the Subsea Technologies
operating segment.
Management formed a strategic partnership with
Houston Community College (“HCC”) to launch
a paid internship programme, with our first
recruitment event held in July 2024.
The internship involved hosting five HCC students
from various manufacturing programmes, such
as welding, logistics, and smart manufacturing,
for 16 weeks at our Stafford facility, for 20 hours
a week. For the Fall 2024 internship, the selected
students began in August and completed the
programme in December 2024. During their time
with Hunting, the interns were able to develop
and hone their skills in a supportive environment.
Going forward, we anticipate hosting interns for
each long semester (Fall and Spring).
Our objective is to cultivate interns who, upon
completing their degree courses at HCC, will
transition seamlessly into permanent positions
at Hunting. We look forward to working with
HCC in shaping the manufacturing professionals
of the future.
Hunting PLC
Annual Report and Accounts 2024
33
Strategic Report
Corporate Governance
Financial Statements
Other Information
A year
of growth
Chief Executive’s Report
2024 has seen the delivery of several key growth objectives,
which were presented to our stakeholders at the Company’s
Capital Markets Day (“CMD”) in September 2023. Hunting’s
long-term strategy involves our continued participation in the
global energy market, as well as growing our presence in non-oil
and gas markets, as a trusted innovator and key precision
manufacturer of critical technology and products.
EBITDA
$
126.3
m
(2023 – $102.4m restated)
EBITDA margin
12
%
(2023 – 11%)
Hunting PLC
Annual Report and Accounts 2024
34
Strategic Report
Corporate Governance
Financial Statements
Other Information
Chief Executive’s Report
continued
On behalf of the Board I would like to thank our
workforce for their commitment in the year and
delivering an excellent set of results, Their efforts
have, collectively, enabled the Group to deliver
another year of growth and allows us to look to
the future with continued confidence.
A reflection of the Group’s success in 2024 can
be seen in the sales order book, which reached
record levels of c.$700m during H1 2024 following
the award of two contracts from the Kuwait Oil
Company (“KOC”) totalling $231m. The growth
seen within our OCTG, Subsea, Advanced
Manufacturing, and Other Manufacturing product
groups has contributed to a robust year-end
order book of $508.6m (2023 – $565.2m).
Although this is slightly down on the prior year,
it provides a solid underpin to the year ahead.
The Company made excellent progress
by increasing its revenue and profits in the
international and offshore segments of the energy
market, highlighted by the record orders from
KOC for the provision of OCTG with Hunting’s
proprietary premium connections, as well as
solid execution of key orders for ExxonMobil
and TPAO for our titanium stress joints through
our Subsea product group.
In addition to the progress seen within the
OCTG and Subsea product groups, Hunting has
delivered growth within other product groups in
the year. Our Advanced Manufacturing product
group has seen a further increase in its financial
results, supported by increases in non-oil and gas
markets, with our Dearborn precision engineering
business unit reporting a sales order book mostly
comprised of aviation and commercial space
contracts. This provides a good indication of the
Group’s ability to enhance, over time, its non-oil
and gas revenue and profit base, which is
another pillar of our long-term strategy.
In the year, Hunting secured material orders
for its licensed Organic Oil Recovery (“OOR”)
technology, to supply the technology to major
exploration and production companies who
operate in the North Sea. The announcement
in August is another milestone and example of
Hunting’s commercial leverage and innovation,
given the years of pilot testing completed with
many blue-chip clients. The production uplift
delivered by the technology creates value for our
customers at a relatively low cost and has great
potential for most brown field production assets.
We look forward with confidence, recognising
that this technology will be a major profit driver
of the Group in the medium term.
Hunting has started to deliver on its Energy
Transition strategic ambition. In the year, the
Group secured a number of OCTG orders for
geothermal projects in North America, Europe,
and Asia Pacific, as the drive for lower carbon
energy accelerated. The global Energy Transition
market has seen a slowing of carbon capture
projects, but the Directors note that the long-term
storage capacity ambition for global projects
remains unchanged, with Hunting well placed
to gain market share, benefit from an uptick in
activity as bottlenecks clear, and deliver more
qualified connections to the market.
The Group has also seen success with its joint
venture in India, where the business, in partnership
with Jindal SAW, delivered a profit contribution of
$2.3m in its first full year of operations. Along with
our joint venture partners we are looking at further
opportunities in the fast-growing Indian market.
The global oil and gas industry is a dynamic,
and often volatile, industry to operate in and in
the year, this volatility was evident within the US
onshore completions market. With the average
WTI crude oil price and the average Henry Hub
natural gas price being lower than 2023, activity
within the US shale basins has been subdued as
the US onshore rig count declined year-on-year.
Our Perforating Systems product group, mostly
delivered through our Hunting Titan operating
segment, was adversely impacted by this market
decline and reduction in activity. Hunting Titan
reported lower revenue in the year than in 2023,
as volumes reduced leading to lower average
margins and a lower EBITDA result compared
to the prior year.
The EMEA operating segment also reported
an extremely challenging year, as activity in
the North Sea continued to decline as the UK
government’s tax regime drove clients to reduce
activity and even fully exit the region. The
long-term outlook for EMEA has led to the
decision to restructure Hunting’s operations
in the region, as announced in January 2025.
This will likely see a smaller number of operating
sites across this operating segment.
Despite some headwinds faced by the Group,
Hunting’s strategic initiatives have contributed
to a year-on-year improvement in revenue and
EBITDA, which have supported an increase in
our dividend distributions, a commitment made
to our shareholders at the CMD.
Hunting’s achievements in the year taken
together have led to improved results, which
are summarised below. But the strength of our
differentiated technology and diversified product
portfolio has again been proven, as we have
captured major opportunities with customers
across many global regions.
Market overview
The Group’s key market metrics, as noted on
page 19, are predominantly driven by prevailing
commodity prices, which reflect the supply/
demand dynamics of the global oil and gas industry
as well as other factors, including geopolitics.
In our Market Summary section on pages 40 to 42,
we note that the average WTI crude oil price was
$76 per barrel in the year, or 3% lower than 2023.
This was driven by weakening sentiment due to
lower economic growth in countries like China,
being offset by conflicts in Ukraine and the Middle
East, which has supported prices in the year.
In September 2024, a notable step-down in
sentiment and pricing was observed as OPEC
indicated that it would start to unwind its
production cuts. This led to a more negative
outlook in the second half of 2024.
The Henry Hub natural gas price has also
reported highly volatile pricing, but for different
reasons. The strong production levels seen in
the US onshore in the year led to excess gas
production, which drove pricing lower, which in
turn led to a lower average rig count, particularly
in the gas-focused basins such as the
Haynesville and Marcellus shale basins. With the
absence of appropriate levels of offtake to LNG
terminals, gas drilling declined in the year, which,
as noted above, reduced the demand for our
Perforating Systems products.
In the round, the global price of crude oil has
been at levels which has supported continued
activity within international markets. Activity
in South America and the Middle East has
continued to grow, providing opportunities
for many of our product groups.
Hunting PLC
Annual Report and Accounts 2024
35
Strategic Report
Corporate Governance
Financial Statements
Other Information
Chief Executive’s Report
continued
Operational review
The Group’s North America operating segment,
which comprises OCTG and Advanced
Manufacturing product groups, delivered a solid
year of growth, as both energy-related and non-oil
and gas sales initiatives continued to be rolled
out. The Group’s onshore-focused premium and
semi-premium connections businesses reported
good progress as market share gains were
captured, while our Electronics and Dearborn
business units also increased revenue and profits.
Hunting’s Canadian OCTG business, which uses
third-party licensed threading partners, also
delivered another strong year.
Hunting’s Asia Pacific operating segment has
been the stand-out performer for the Group
during the year and will provide good support to
the Group’s results for 2025, as the KOC orders
are concluded in the first half of the year. By
leveraging the segment’s strategic supply chain,
Hunting has applied its proprietary premium
connections to Chinese steel mills’ pipe, leading
to record revenue, profits, and margins being
delivered by the operating segment.
Hunting’s Subsea Technologies operating
segment, which comprises our Stafford, Spring
and Enpro business units, delivered an exceptional
year of growth as offshore markets grew
considerably. The Spring business unit executed
on a number of orders for titanium stress joints
for ExxonMobil (“Exxon”), which helped drive
revenue and EBITDA margin growth in the year.
The Hunting Titan operating segment reported
lower revenue and profits due to subdued
onshore drilling across North America in the year.
The US industry therefore has been highly
competitive due to the lower activity reported.
However, Hunting Titan’s international sales, into
countries such as Argentina and Saudi Arabia,
were robust and have grown year-on-year. Due
to the lower results and margins, coupled with
a more subdued short-term outlook in the US,
the carrying value of the goodwill relating to the
Hunting Titan operating segment was impaired,
as noted in the Finance Report.
As noted above, the EMEA operating segment
reported a challenging year, with the downturn
in EMEA’s performance impacting both the
OCTG and Other Manufacturing product groups,
leading to operating losses for the segment.
Partially offsetting this, the Group’s Netherlands
OCTG business reported good success in
capturing geothermal orders for in the
Netherlands, with end-users from the agriculture
and utility sectors, demonstrating the multi-sector
interest in low carbon energy.
Delivering the Hunting 2030 Strategy
The Hunting 2030 strategic pillars are
summarised on pages 10 to 16. During 2024,
the Group delivered on several key objectives,
which align with our 2030 ambitions. As noted
above, Hunting has made notable progress
in growing its OCTG product group. Hunting
has delivered good growth in the US domestic
market, despite difficult trading conditions across
the North American shale basins. Demand for
our TEC-LOCK Wedge™ connection in the
US continued to grow during the year, with the
length of laterals steadily increasing as drilling
efficiencies continued to be captured. In Canada,
our performance was ahead of 2023, as the rig
count and well count were supported by
sustained levels of activity. Hunting’s Asia Pacific
operating segment secured the $231m orders
from KOC in May/June 2024, which transformed
the financial performance of the product group
and the Asia Pacific operating segment.
The product group also saw increased sales
of accessories and well completion packages
to South America in support of the intense activity
levels in Brazil and Guyana. In summary, our 2030
ambitions remain on track, given the progress
within the OCTG product group in the year.
Hunting’s Subsea product group also reported
an impressive year of growth, as key orders
from Exxon were delivered. The Subsea Spring
business unit delivered its titanium stress joints
to the Yellowtail project in the year, which
contributed to the increase in revenue and
profitability of the product group. The Subsea
Stafford business unit reported a decent year,
as demand for hydraulic valves and couplings
remained robust, while the Enpro business unit
also delivered a further year of growth as projects
in West Africa and South America were
developed. A notable success in the year has
been the cross selling of our products to Exxon,
with Enpro’s Flow Intervention System being
utilised on the Liza project, following the
development of Hunting’s relationship with Exxon
through its Spring business. Late 2025 should
see further orders coming from Exxon for the
Group’s titanium stress joints, reflecting the
lumpier nature of Subsea Spring’s order book
and results profile. However, given the long-term
development plan for Guyana and other
deepwater plays, the outlook for the product
line remains extremely robust.
With the depressed results from the Perforating
Systems product group and EMEA operations,
Hunting’s drive to deliver a stronger EBITDA
margin has been partially held back, although
the year-on-year increase in the reported EBITDA
margin to 12% reflects another step towards our
goal of 15%.
The Directors note that both the OCTG and
Subsea product groups have delivered EBITDA
margins well in excess of our stated goal of 15%,
and with the cost cutting and efficiency measures
announced for the Hunting Titan and EMEA
operating segments, 2025 should see a year
of further progress towards our medium-term
goal of EBITDA margins greater than 15%.
With working capital totalling $355.5m in the year
(2023 – $415.9m), the Group’s working capital
to revenue ratio was 29% (2023 – 46%), which
is ahead of our CMD target of 40%.
Our EBITDA to free cash flow conversion rate was
111% in the year (2023 – (0.5)%), which meets our
ambition of delivering c.50% conversion. In the
year, our cash flows have improved thanks to the
continued focus by management on containing
and substantially improving our working capital
profile, partly achieved through the use of financial
instruments to accelerate the collections of cash,
leading to total cash and bank/(borrowings) of
$104.7m at 31 December 2024 (2023 – $(0.8)m).
With the improved performance of the Group
in the year, coupled with the substantial increase
in the year-end cash position, the Directors have
increased the Final Dividend proposed by 20% to
6.0 cents per share (2023 – 5.0 cents per share),
which gives the total dividend paid for the year of
11.5 cents per share (2023 – 10.0 cents per share),
an increase of 15% year-over-year.
The Directors are, therefore, confident that
our 2030 ambitions remain on track, with further
progress to be delivered in the coming years.
Hunting PLC
Annual Report and Accounts 2024
36
Strategic Report
Corporate Governance
Financial Statements
Other Information
Chief Executive’s Report
continued
2024
Operational
Highlights
Retain focus on global oil and gas
opportunities, specifically growing
international, subsea and offshore business
$231m of contracts secured with Kuwait
Oil Company
Product group: OCTG
In H1 2024, the Group announced the securing
of record orders with KOC for OCTG threaded with
Hunting’s proprietary SEAL-LOCK XD™ premium
connection. The orders are a result of over five years
of collaboration between Hunting, KOC and Hengyang
Valin Steel in China to qualify the Group’s connections
and OCTG raw material. The order commenced in
July 2024 and will continue into 2025.
Continuation of major orders from ExxonMobil and
TPAO for Hunting’s titanium and steel stress joints
Product group: Subsea
Throughout 2024, the Group continued to execute
on major orders for its titanium and steel stress joints
(“TSJs”). The large orders for TSJs received in 2023
were worked on through the year for Guyana and the
Black Sea. Orders were completed for the Yellowtail
project in Guyana in the year, with work on the Uaru
and Whiptail projects continuing into 2025.
API threading licence at Nashik, India,
facility secured
Product group: OCTG
The Group’s joint venture facility in Nashik, India,
received its API threading licence in May 2024,
which will support new tender activity across India.
Management anticipates that the addressable market
in India is c.$300-$400m per year for OCTG and
accessories manufacturing, with the Jindal Hunting
Energy Services joint venture being an early mover
in-country, as local content requirements increase
to meet India’s growing energy requirements.
Five-year manufacturing agreement
with Chevron
Product group: OCTG
Hunting’s US OCTG business entered into a new
five-year manufacturing agreement with Chevron in the
Gulf of Mexico, which will support the OCTG product
group to the end of the decade.
Deliver sales order book and revenue
progress in non-oil and gas, energy
transition and low carbon solutions
Orders with an expected total value of $60m
for licensed Organic Oil Recovery technology
Product group: Other Manufacturing
In August 2024, the Group received orders which,
dependent on volumes and assumed extensions,
could result in up to $60m of revenue for the
deployment of its licensed OOR technology into the
North Sea. The orders were secured with two major
operators on the UK Continental Shelf and will be
delivered over the next five years.
$14.7m of energy transition sales completed
in the year
Product group: OCTG
Hunting continued to win OCTG orders for geothermal
and carbon capture projects in North America, Europe
and Asia Pacific in the year. Orders for projects in the
utility and agriculture sectors were won in the
Netherlands, supporting Hunting’s long-term strategy
of revenue diversification.
Strategic partnership expansion with
CRA-Tubulars B.V.
Product group: OCTG
In August 2024, Hunting secured the exclusive sales,
manufacturing, and distribution rights for $0.3m for
CRA-Tubular’s novel titanium-lined carbon fibre tubing,
which has strong long-term market growth
opportunities in carbon capture projects in North
America and Europe, for five years. The collaboration
will enable the Company to accelerate further testing
of tubulars and connections against key connection
standards.
$0.9m investment in Cumberland Additive
Product group: Advanced Manufacturing
In September 2024, Hunting invested a further $0.9m
in Cumberland Additive, taking our interest to 30.7%,
which will enable us to access 3D manufacturing
opportunities across multiple sectors and applications.
Strong focus on long-term profitability
of the Group
Restructuring of the Hunting Titan
operating segment
Product group: Perforating Systems
Over the last 12 months Hunting has delivered cost
savings in the segment to align with the long-term
outlook for the US onshore completions market. The
Wichita Falls operating site and a number of distribution
centres were closed in the year. In March 2025 as part
of wider cost savings initiatives, further restructuring
was announced which included a 5% reduction in
headcount to deliver additional SG&A savings.
Restructuring of the EMEA operating segment
Product group: OCTG
With the further decline in North Sea oil and gas
activity, primarily driven by UK political ambitions to
decarbonise its energy supply chain, a restructuring
of the Group’s EMEA operations was announced
in January 2025. Annual cost savings are expected
to be c.$8-$9m.
Expansion of manufacturing in Dubai
Product group: OCTG/Other Manufacturing
During the year, the well testing product line continued
its move from the Netherlands facility to Dubai together
with Singapore’s well intervention product line to
increase efficiencies and to be closer to our customers
and pipeline of opportunities.
Expansion of collection of greenhouse gas data
Product group: All product groups
The Group expanded its scope 3 greenhouse gas data
collection to include the Subsea Technologies, EMEA
and Asia Pacific operating segments following on from
the collection of Hunting Titan’s scope 3 data for the
first time in 2023.
Hunting PLC
Annual Report and Accounts 2024
37
Strategic Report
Corporate Governance
Financial Statements
Other Information
During 2024, the Group focused on increasing
the collection of its scope 3 greenhouse gas
emissions data, with four of the Group’s five
operating segments now reporting scope 1, 2
and 3 data, with the fifth reporting scope 1 and 2
data. Hunting also increased its external QAHSE
data reporting in the year. Further details can be
found on pages 68 to 87.
The Group reported a number of lost trading
days during Q3 2024 due to Hurricanes Beryl
and Francine. Extra shifts were added to
maintain the trading performance of the affected
businesses. While these outages did not impact
the Group’s trading results, it highlights the
impact that adverse weather events can have
on Hunting’s operational profile. In the year,
the Group completed a further assessment
of its long-term physical risks, with the analysis
concluding that it is unlikely that a change to
the risk profile will be observed for a number
of decades. For further details, refer to the TCFD
reporting on page 88 to 101.
Our workforce continues to be our most
important asset, and they continue to deliver
our strategy and long-term growth ambitions to
our various stakeholders. In the year, an average
base salary increase of 5% was delivered across
the Group, as cost of living and inflationary
pressures continue to be felt by our employees.
Post-balance sheet event
On 3 March 2025, we announced the disposal
of our 23% interest in the Rival Downhole Tools
business, which was an associate company,
for $13.1m.
Chief Executive’s Report
continued
Group financial summary
Hunting reports a 13% increase in revenue in the
year as international market activity, in particular,
continued to grow strongly. Revenue in 2024
was $1,048.9m compared to $929.1m in 2023.
H1 2024 revenue was $493.8m (2023 – $477.8m),
while H2 revenue was $555.1m (2023 – $451.3m),
this result being predominantly supported by the
contribution from the KOC orders, which were
recognised from September onwards. Non-oil
and gas revenue was broadly flat in the year
at $75.1m (2023 – $75.9m).
Group EBITDA increased 23% to $126.3m in the
year (2023 – $102.4m restated) as strong increases
in the OCTG and Subsea product groups were
delivered; however, this was tempered by the
lower contribution from the Perforating Systems
product group. Group EBITDA margin increased
to 12% (2023 – 11%) as the higher margin
product groups progressed the result.
The Hunting Titan operating segment delivered
revenue of $230.3m in the year (2023 – $259.2m),
being 11% lower than the prior year. With lower
volumes and some pricing declines in gun system
product lines, the segment recorded an EBITDA
result of $0.6m in the year (2023 – $21.9m). This
led to a decline in the EBITDA margin for the
segment to 0% (2023 – 8%).
The North America operating segment reported
a 4% increase in revenue to $388.4m in the year
(2023 – $374.7m), as robust sales from the Group’s
OCTG and Advanced Manufacturing product
groups were delivered. EBITDA increased to
$62.2m (2023 – $53.8m restated) or by 16%
in the year. EBITDA margin for the segment,
therefore, increased to 16% (2023 – 14%).
The Subsea Technologies operating segment
reported an impressive year of growth as key
orders were executed in the year, leading to
revenue of $147.1m (2023 – $98.6m) or an
increase of 49%. Given the increased utilisation
of facilities and improved contractual terms for
key orders, EBITDA was $30.0m (2023 – $13.7m)
and margins advanced to 20% (2023 – 14%).
The EMEA operating segment reported
more subdued results in the year, as previously
discussed, with revenue slightly lower at $87.7m
(2023 – $88.2m). EBITDA declined to a loss of
$7.9m (2023 – $1.7m profit) following a charge
for inventory impairment within the Netherlands
OCTG business, leading to an EBITDA margin
of (9)% (2023 – 2%).
The Asia Pacific operating segment delivered a
record result in the year, with revenue increasing
53% to $240.6m (2023 – $157.6m) as the KOC
and Cairn Oil and Gas (Vedanta) Limited orders
were executed. EBITDA margins for the segment
were 17% (2023 – 7%) reflecting improved facility
utilisation and production efficiencies.
Gross profit in the year was $271.9m compared
to $227.7m in the prior year, leading to an
increase in gross margin to 26% (2023 – 25%)
or 1 percentage point higher than the 2023 result.
This reflects generally robust pricing, improved
volumes and facility utilisation in certain businesses,
being offset by the lower results from the Hunting
Titan and EMEA operating segments.
Operating loss was $21.1m (2023 – $51.5m profit
restated), and includes the Hunting Titan goodwill
impairment charge of $109.1m.
Adjusted operating profit was $88.0m compared
to $60.4m (restated) in 2023 leading to an
increase in operating margin to 8% (2023 – 7%).
In 2024, the Group changed the presentation
of its consolidated income statement, with
operating profit now including the contribution
from joint ventures and associates, which was
a loss of $0.1m in the year (2023 – $0.6m).
Net finance costs totalled $12.4m (2023 –
$10.4m), leading to a loss before tax of $33.5m
(2023 – $41.1m profit restated) and an adjusted
profit before tax of $75.6m (2023 – $50.0m).
Diluted loss per share was 17.6 cents
(2023 – 65.9 cents earnings per share restated),
with 2023 including the benefit of the recognition
of previously unrecognised US deferred tax
assets. Adjusted diluted earnings per share was
31.4 cents (2023 – 20.3 cents) or an increase of
55% year-over-year.
Working capital decreased to $355.5m, as
inventory balances in Hunting Titan and Electronics
were the focus of management which, along with
other operational cash flows, led to a free cash
inflow of $139.7m (2023 – $0.5m outflow).
At the year-end, the Group’s net assets were
$902.3m, which compares to $950.1m (restated)
in 2023. The movement reflects the Group’s loss
after tax result of $25.5m (2023 – $112.2m profit
restated), which includes the goodwill impairment
of $109.1m in the year, offset by a deferred tax
credit of $27.8m.
ESG and sustainability
Hunting continued to progress and build out
its ESG and Sustainability initiatives in line with
its 2030 ambitions.
Hunting PLC
Annual Report and Accounts 2024
38
Strategic Report
Corporate Governance
Financial Statements
Other Information
Chief Executive’s Report
continued
Outlook
The Group has delivered excellent growth
in adjusted earnings in 2024.
2025 should see steady growth in revenue and
adjusted earnings as all market indicators point to
further progress due to prevailing energy demand.
The Directors anticipate an acceleration in activity
in the second half of the year and into 2026, as
market and geopolitical tail winds increase with
robust commodity supply and demand dynamics
supporting activity in the year ahead.
In the US, the new administration is indicating
robust support for oil and gas, with energy
security and appropriate pricing to drive economic
growth. This will likely lead to continued activity
across North America, but also new
opportunities offshore as Gulf of Mexico licensing
and LNG capacity permitting should increase to
support broad-based upstream and downstream
growth. While the political narrative is strong,
company-level narrative indicates that the
industry will likely retain capital discipline.
Balancing this growth drive, OPEC+ countries will
likely unwind their production cuts during 2025,
but at a rate which maintains stability across the
market. The ongoing conflict in Ukraine and fragile
peace across the Middle East will also be key
factors in commodity pricing. Drilling discipline
across North America will likely be balanced
by pricing discipline.
A further factor is the introduction of international
tariffs. This area is highly dynamic at the time of
writing. While the Directors do not see an impact
on our businesses given how our segments and
supply channels are structured, the disruption
across international markets in general may lead
to unforeseen challenges.
For Hunting, the senior leadership team and
Directors will continue to focus on those areas
which are within our control.
As demonstrated in 2024, we have made solid
progress on our 2030 journey, but there is still
much to do in the coming year to continue this
momentum. The Company is committed to
capitalising on its proven precision engineering
capabilities in energy services to drive growth
and earnings, while further diversifying its
revenue streams. As previously outlined,
we have a disciplined capital allocation policy
and our strong balance sheet gives us firepower
to pursue value accretive M&A in the year ahead
to grow and diversify our portfolio and revenue
and earnings in line with the strategic goals
outlined at Hunting’s Capital Markets Day in
September 2023. The Group has evaluated
numerous acquisition opportunities and continues
to adopt a disciplined approach to M&A.
The Board continues to look at subsea, intelligent
well completions, and complementary non-oil
and gas opportunities to drive increased EBITDA
and capital returns in line with our 2030 targets.
We are excited about our position within global
OCTG markets and see new Subsea opportunities
opening up around the middle of the year. The
Middle East and South America remain key areas
of growth, given the tender activity across these
regions. Management is focused on optimising
the performance of our Perforating Systems
business. Hunting Titan continues to deliver
strong technology and services to our clients,
and with a higher natural gas price, coupled
with the completion of targeted cost cutting
measures, a good increase in profitability
within this important product group should be
delivered. Steady progress within the Advanced
Manufacturing group is also anticipated as more
non-oil and gas opportunities are captured.
Return on average capital employed
9
%
(2023 – 6%)
Net assets
$
902.3
m
(2023 – $950.1m restated)
The Directors are also excited about
the prospects of the Organic Oil Recovery
technology. Our progress with clients in the
North Sea in 2024 should lead to more orders
in the region and internationally as customer
acceptance accelerates.
In the year ahead we also hope to make
further progress in our chosen Energy Transition
markets as the number of geothermal projects
continues to increase and carbon capture
projects are further progressed.
The Company continues to make progress
towards the medium-term EBITDA margin
target of 15% and is pleased to announce
a 15% increase in the total dividend declared,
ahead of our 2030 target of c.10% per annum.
We have been pleased with the Group’s strong
improvement in ROCE and we continue to
target at least 15% as a short range target.
Finally, the management team remains focused
on cost reduction and efficiency gains across our
asset base. With the restructuring of our EMEA
operating segment, which will remove a drag on
the Group’s earnings and returns, coupled with
the cost reduction initiatives within Hunting Titan
and our Head Office functions, further gains in
profitability should be captured in the year ahead.
In summary, the Directors see good progress in
the year ahead to deliver our growth objectives.
We look to the future with confidence.
Jim Johnson
Chief Executive
6 March 2025
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting PLC
Annual Report and Accounts 2024
39
Market Summary
2024 has seen another year
of volatility within global energy
markets given ongoing geopolitical
instability in Europe, through
the continued conflict in Ukraine,
as well as the Middle East with
conflicts in Gaza, Lebanon and
towards the end of the year,
instability in Syria. This has given
support to the global pricing of
crude oil throughout the year.
During the year, the global energy market has
remained focused on the supply/demand dynamic
of crude oil as global demand remained in excess
of 100m barrels of oil per day, with positive
demand sentiment being offset by economic
growth concerns in China and Europe.
New production from South America, as well
as from Libya, has led to a persistent theme of
perceived oversupply in the global energy market,
which led to the price of WTI crude oil declining
in the second half of the year.
In September, Saudi Arabia indicated that it
would commence the unwinding of production
cuts agreed by the OPEC+ group, which led to
a lower average price for oil in the second half
of the year as the market anticipated new output
from major suppliers from the cartel.
In North America, daily production was over
13m barrels of oil per day, due to further gains
in production efficiencies being captured by
onshore operators.
While the price for WTI crude oil remained
within a range which enabled activity to continue,
the pricing of natural gas became more volatile,
leading to a lower average price for Henry Hub
natural gas. Activity was therefore adversely
impacted, which led to a reduced US onshore rig
count. Key basins impacted by this lower activity
were the Haynesville and Marcellus shale basins,
which reported large decreases in drilling
activity due to excess gas being produced,
with localised pricing for gas turning negative
for short periods of time in the year.
A key issue has been the lack of offtake channels
for natural gas, which includes the associated
gas offtake from oil basins such as the Permian.
This led to a small decline in oil development
activity. The operational delays and pause in
new LNG permitting in the US also slowed the
development of offtake channels for natural gas,
which had a negative impact on sentiment.
In the UK, sentiment towards oil and gas has
been extremely negative, particularly following the
election of the new Labour government, which
is pursuing a rapid energy transition. This has
decimated activity on the UK Continental Shelf,
with large operators consolidating or selling assets
and exiting the North Sea given the punitive tax
regime and lack of incentives to drill.
The net impact of these geopolitical forces has
been the decline in performance of the Group’s
Perforating Systems business which, for the most
part, generates revenue from the US shale basins.
This decline has been offset by resilient levels
of activity within International markets, with key
growth areas being Guyana, India, and Kuwait.
Hunting’s OCTG and Subsea product groups
have made excellent progress within International
markets particularly in South America and the
Middle East. Despite the trading challenges in the
US onshore market, the Group’s North America
OCTG business has made market share gains,
supporting its medium-term growth strategy, while
the Advanced Manufacturing product group also
grew in the year, due to global activity increases.
Commodity prices
In 2024, the average price for WTI crude oil was
$76 per barrel compared to $78 per barrel in
2023. The average price in H1 2024 was $79 per
barrel, which compares to $73 per barrel in H2
2024, following the announcements by OPEC+,
as noted above.
In general, this pricing range remains well above
the thresholds for operators to continue activity.
The average price for Henry Hub natural gas was
$2.41 per mmBtu in the year, which compares
with $2.66 per mmBtu in 2023. This pricing is
closer to the baseline thresholds for activity to
continue in the US and, given the lack of offtake
channels noted above, led to declines in drilling
across key shale basins in the year.
Hunting PLC
Annual Report and Accounts 2024
40
Strategic Report
Corporate Governance
Financial Statements
Other Information
100
80
60
40
20
0
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
147.7
2024
2023
145.1
2022
135.0
76
2024
2023
78
2022
94
1,490
2024
2023
1,560
2022
1,517
66.8
2024
2023
67.5
2022
53.5
2.41
2024
2023
2.66
2022
6.54
201
2024
2023
205
2022
189
5.0
4.0
3.0
2.0
1.0
0
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Market Summary
continued
Commodity prices
WTI crude oil price 2024
$ per barrel
Henry Hub natural gas price 2024
$ per mmBtu
Drilling capital investment
Commodity prices
Global onshore capital investment
$bn
Average WTI crude oil price
$ per barrel
Global onshore average rig count
#
Global offshore capital investment
$bn
Average Henry Hub natural gas price
$ per mmBtu
Global offshore average rig count
#
Source: FT.com
Source: FT.com
Source: Spears & Associates
Drilling & Production Outlook –
December 2024
Source: Spears & Associates
Drilling & Production Outlook –
December 2024
Source: Spears & Associates
Drilling & Production Outlook –
December 2024
Source: Spears & Associates
Drilling & Production Outlook –
December 2024
Rig counts
Source: FT.com
Source: FT.com
Hunting PLC
Annual Report and Accounts 2024
41
Strategic Report
Corporate Governance
Financial Statements
Other Information
2024
2025
2026
2027
2028
2029
2030
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
0
0.5
1.0
1.5
2.0
2.5
3.0
2024
2034
2049
2044
2039
2029
CCS delayed transition
CCS base case
Market Summary
continued
Energy transition
Hunting remains focused on developing major
businesses in geothermal and carbon capture
and storage end-markets, due to the applicability
of its products to these markets, particularly its
OCTG product group.
In the year, as noted in the Chief Executive’s
Report, Hunting made progress in securing
contracts for geothermal projects in North
America, Europe and Asia Pacific. Growth is
anticipated in 2025 as the number of projects
increases. The Directors of Hunting note that
energy, utility, and agriculture companies are
progressing these projects, therefore the customer
base is likely to be more fragmented than the
Group’s traditional oil and gas businesses.
Carbon capture and storage end-markets have
seen a slowing in the pace of development in the
year, due in part to permitting, pipeline capacity,
and the pricing of this product stream. The
Directors of Hunting still believe that this market
presents a material revenue opportunity for the
Group; however, they now estimate this to be a
major contributor towards the end of the decade
given the market data available.
Other non-oil and gas
A key development in the year, as noted in our
Hunting 2030 Strategy, has been the evolution
of the Group’s non-oil and gas sales order book,
particularly within the Dearborn business unit,
which forms part of our Advanced Manufacturing
product group.
Defence and commercial space opportunities
have accelerated in the year, partly due to the
increased defence spending seen in the past
two years, which has been a consequence of the
increase in geopolitical instability noted above.
Projected global geothermal capacity
MW
Carbon capture and storage capacity buildout (base case and delayed transition scenarios)
billion tonnes
Source: Wood Mackenzie
Source: Wood Mackenzie
Hunting PLC
Annual Report and Accounts 2024
42
Strategic Report
Corporate Governance
Financial Statements
Other Information
South America – international growth delivered through multiple product groups
Brazil
With a sales presence
and a legal entity
established we will
be able to participate
in large tenders
in-country.
Suriname
Following the success
in Guyana, we see
strong growth
opportunities for
our Subsea product
group as exploration
continues.
Guyana
The exploration
success offshore led
by ExxonMobil is likely
to lead to strong
growth opportunities
over the next decade.
Argentina
The acceleration of
unconventional drilling
in-country has allowed
Hunting Titan to
increase international
sales in line with
our strategy.
South America has increasingly become an
area of focus for Hunting, with opportunities
to materially increase revenue across all of our
major product groups. In the year, we established
a sales office in Brazil and in 2025 we will be
setting up a legal entity to enable Hunting to
participate in large tenders.
Our OCTG product group delivered sales
in Guyana as large discoveries are brought
on stream by ExxonMobil (“Exxon”). Our US
business supplied well completion packages to a
number of Exxon’s projects. In Brazil, our EMEA
business has completed threading work over the
past few years for Tubacex, a relationship which
we anticipate accelerating in 2025.
Hunting’s Subsea product group deployed its
titanium stress joints to FPSOs commissioned
for the Yellowtail discovery, while in 2025 and
2026 deliveries to the Uaru and Whiptail
discoveries will be completed. These contracts
have supported the record results reported by
the product group in 2024. As a consequence
of our strong relationship with Exxon, there have
been cross-selling opportunities, with Enpro’s
Flow Intervention System being utilised in the
Liza discovery offshore Guyana during the year.
Our Perforating Systems product group
has supplied perforating systems, inclusive of
shaped charges, into Argentina’s unconventional
onshore developments over the past few years
via Weatherford.
Our Advanced Manufacturing product group,
through the Dearborn business unit, supplied
MWD/LWD tools to Suriname.
In summary, the region has been a key growth
driver for the Group and, given the developments
in Suriname, Brazil and Guyana which are under
way, Hunting will continue to drive international
sales growth through to 2030.
Hunting PLC
Annual Report and Accounts 2024
43
Strategic Report
Corporate Governance
Financial Statements
Other Information
Product Review
Perforating Systems
Technology to drive
drilling efficiency
The Group’s Perforating Systems product group, predominantly
delivering through the Hunting Titan operating segment, continues
to be a leading player in the global well completions market.
Introduction and market overview
The Perforating Systems product offering has
remained broadly unchanged in the year, as new
technologies introduced in 2023 continued to
be rolled out.
The average US onshore rig count was 579 units
in the year (2023 – 669 units), while in Canada the
rig count averaged 188 units (2023 – 177 units).
The trading environment for the product group
has, therefore, been challenging, with lower
average commodity prices, and client
consolidation disrupting purchasing channels,
coupled with the slowing of LNG permitting,
leading to the lower results in the year.
Due to this generally weak market environment
in North America and the need to right-size the
business, cost cutting initiatives across the
product group commenced in Q2 2024, where
one operating site and two distribution centres
were closed, and the headcount reduced in line
with this smaller footprint. The market outlook
continued to decline throughout the year,
resulting in lower EBITDA guidance being issued
in October, predominantly driven by the subdued
US market environment.
Partially offsetting this performance, the
segment’s international sales have been steady
in the year as activity in South America and the
Middle East continued to be robust.
Group financial performance
Due to these market conditions, revenue from the
Perforating Systems product group decreased
by 9% to $222.7m in 2024, compared to
$243.8m in 2023.
Within this, US revenue decreased from
$219.8m in 2023 to $193.2m, while Canada
revenue increased from $16.3m in 2023 to $17.9m.
International revenue grew to $45.7m in the year
(2023 – $45.0m) as efforts to globalise the
Group’s technologies continued.
EBITDA for the product group was $1.4m
compared to $25.1m in the prior year, giving
an EBITDA margin of 1% in 2024 compared to
10% in 2023. EBITDA in H1 was $3.2m with an
EBITDA margin of 3% and in H2 was a loss of
$1.8m with an EBITDA margin of (2)%, reflecting
the further slowdown in H2, with the full impact
of the cost saving initiatives being fully realised
in late Q4.
The Perforating Systems sales order book at
the year-end was $16.5m, compared to $12.7m
at the 2023 year-end. Due to its “manufacture
to stock” business model, Perforating Systems
does not carry a large order book and is,
therefore, a short cycle business overall.
Intellectual property
Intellectual property based on the Group’s
Perforating Systems product group totalled
183 patents.
Technology
The product group’s research and
development efforts in the year focused on the
further development of self-orienting perforating
technology, given the shift of US operators to
adopting these completion techniques.
Hunting Titan continued to develop high
temperature detonation cord and also introduced
a new variant of the H-3 Perforating System™,
which has partially reusable components
to alleviate cost to customers.
Hunting PLC
Annual Report and Accounts 2024
44
Strategic Report
Corporate Governance
Financial Statements
Other Information
Product Review
continued
The business commenced field testing of
a new ControlFire™ switch, which assists in
the verification of the position of the gun string.
The business also developed a new ballistic
release tool, which will be targeted as a rental
tool offering to clients.
A number of initiatives were commenced in
the year to reduce component input costs for its
H-3 and H-4 Perforating Systems™ to improve
long-term profitability.
North America
As noted above, the Wichita Falls operating site
was shuttered in Q2 2024 and two distribution
centres were closed in the year.
Additional distribution centres in North America
are earmarked for closure in 2025, dependent
on the gas price, coupled with the further 5%
headcount reduction noted in the Chief
Executive’s report to align the Group’s cost base
to the medium-term activity profile anticipated.
International
Hunting Titan continued to roll out its international
growth strategy in the year.
In the Middle East, Hunting’s E-SUB Perforating
System™ was utilised in Saudi Arabia, and Abu
Dhabi continued its adoption of the Group’s
detonators and power charges, which contributed
to the increase in international sales in the year.
In 2024, Hunting Titan successfully introduced
the H-3 Perforating System™ in Argentina
through Weatherford.
In Asia Pacific, Hunting Titan sold various
components to China and Indonesia.
Perforating Systems – revenue
$m
222.7
2024
2023
243.8
2022
251.9
Source: Company
Perforating Systems – EBITDA
$m
1.4
2024
2023
25.1
2022
27.2
Source: Company
Non-GAAP Measure see NGM C
Perforating Systems – sales order book
$m
16.5
2024
2023
12.7
2022
18.7
Source: Company
Non-GAAP Measure see NGM T
North America onshore average rig count
#
767
2024
2023
846
2022
879
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
North America footage drilled
mft
330.2
2024
2023
334.2
2022
318.8
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
US frac jobs
#
11,339
2024
2023
13,179
2022
13,156
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Hunting 2030 Strategy
Due to the challenging market conditions within
the North American well completions market,
the Perforating Systems product group is
behind on its medium-range financial targets
announced at the CMD, but remains generally
on track with its strategy to internationalise
its product offering.
Several initiatives were progressed in the year to
introduce Hunting’s well completion products to
energy transition and lithium extraction markets.
A key initiative in 2025 will be to maximise
profitability from its smaller operating footprint
and cost base.
Hunting PLC
Annual Report and Accounts 2024
45
Strategic Report
Corporate Governance
Financial Statements
Other Information
OCTG
Global growth driven
by leading premium
connection technology
Hunting’s OCTG product group comprises sales from the Group’s three
major premium and semi-premium connection families: SEAL-LOCK™,
WEDGE-LOCK™ and TEC-LOCK™ and associated accessories.
These connections are applied to many oil and gas wells and are
directly applicable to geothermal and carbon capture projects.
Introduction and market overview
The material success of the OCTG product group
in Kuwait during 2024 has been testament to the
strength of Hunting’s proprietary connections
offering and agile supply channels to compete on
the world stage against its much larger competitors.
The Directors would like to thank KOC for its
commitment to the Group in the year.
Given the success with KOC, the product group
is now the largest generator of revenue in 2024
for Hunting with a good balance between North
American and International sales – all in line with
the Hunting 2030 strategic objectives.
Hunting’s OCTG offering has delivered exceptional
growth in Asia Pacific and a steady performance
in North America, despite the challenging market
conditions reported within the US onshore market.
During the year, global drilling capital investment
increased by 1% from $212.6bn in 2023 to
$214.5bn as international and offshore projects
continued to be sanctioned.
Group financial performance
Revenue from the Group’s OCTG product
group totalled $463.7m in 2024, compared to
$395.8m in 2023. This has been primarily driven
by the OCTG contract wins within Asia Pacific
for KOC, while contracts for CNOOC and Cairn
Oil and Gas (Vedanta) Limited, which were
announced in 2023, were also completed in the
year. The Group’s US business also undertook
well completion work for ExxonMobil and SLB
in South America and saw increased re-frac
work in the US onshore market in the year.
EBITDA for the product group was $80.2m
compared to $46.3m in the prior year, giving
an EBITDA margin of 17% in 2024 compared
to 12% in 2023.
The OCTG sales order book at the year-end
was $249.7m compared to $222.0m at the 2023
year-end, which represents an increase of 12%
in the year.
North America
Hunting’s North America OCTG businesses
reported steady activity throughout the US and
Canada in the year, with revenue increasing by
2%, from $198.5m in 2023 to $202.5m in 2024.
Continued sales of the TEC-LOCK™
semi-premium connection family were reported
in the US and robust sales of the TKC4040™
connection continued in Canada. In the year, the
TEC-LOCK Wedge™ connection saw increased
interest in Canada, which contributed to a further
year of growth.
The product group continued to work with
Chevron Gulf of Mexico in the year, utilising
Hunting’s SEAL-LOCK™ premium connection.
During the year, the US OCTG business entered
into a new five-year manufacturing agreement
with Chevron, which will support the OCTG
accessories product group to the end of the
decade. This contract is an excellent result
and testament to the strong client relationship
Hunting has with Chevron and the reliability
of our products, which enable our customers
to create sustainable value.
The product group also continued to supply
OCTG well completion products into Guyana
in the year, in line with the general drilling activity
in the country.
Of note has been the increase in OCTG supply
for re-frac activity with clients such as Devon
utilising the TEC-LOCK Wedge™ semi-premium
connection in projects across the US in the year.
Product Review
continued
Hunting PLC
Annual Report and Accounts 2024
46
Strategic Report
Corporate Governance
Financial Statements
Other Information
International: Asia Pacific and EMEA
The Group’s Asia Pacific and EMEA OCTG
product groups reported an increase in total
revenue from $197.3m in 2023 to $261.2m in
2024, an increase of 32%. This has been due to
the phenomenal progress within the Asia Pacific
region as noted above.
Activity in the North Sea continued to decline,
predominantly due to the impact of the tax regime
on oil and gas explorers on the UK Continental
Shelf. Customers continue to withdraw from the
region leading the Directors to make the difficult
decision to restructure the EMEA operating
segment which was announced in January 2025.
In the Netherlands, while oil and gas activity has
also been challenging, the business has been
met with success in the geothermal market,
securing a number of orders in Germany and
the Netherlands.
India
Hunting’s JV in India had a remarkable first full
year of operation, which saw a profit contribution
to the Group of $2.3m recorded, as activity
in-country continued to accelerate. As noted
elsewhere, the venture partners are now planning
a second facility on the India East coast.
New technology
Hunting continues to develop and qualify new
premium and semi-premium connections for
both the oil and gas and energy transition sectors.
Our alliance with Jiuli in China will support the
acceleration of new geothermal and carbon
capture connections in the coming years, utilising
the Group’s test facility in Ameriport, US.
OCTG – revenue
$m
463.7
2024
2023
395.8
2022
258.8
Source: Company
OCTG – EBITDA
$m
80.2
2024
2023
46.3
2022
14.8
Source: Company
Non-GAAP Measure see NGM C
OCTG – sales order book
$m
249.7
2024
2023
222.0
2022
196.5
Source: Company
Non-GAAP Measure see NGM T
Global drilling capital investment
$bn
214.5
2024
2023
212.6
2022
188.5
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Global average rig count
#
1,691
2024
2023
1,765
2022
1,706
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Global offshore capital investment
$bn
66.8
2024
2023
67.5
2022
53.5
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Product Review
continued
Hunting 2030 Strategy
The Group’s OCTG 2030 strategy is well ahead
of plan given the success of the KOC orders in
the year.
New tender activity in North America and
Internationally will support the strong growth of
the product group in the coming year, with the
Middle East and Central Asia markets being
particularly strong.
Orders for projects in the utility and agriculture
sectors were won in the Netherlands and
Germany, in support of Hunting’s long-term
strategy of revenue diversification.
Hunting PLC
Annual Report and Accounts 2024
47
Strategic Report
Corporate Governance
Financial Statements
Other Information
Advanced Manufacturing
Precision engineering
capabilities underpin
diversification strategy
Hunting’s Advanced Manufacturing product group serves oil and gas,
aviation, commercial space, defence, medical, and power generation
markets. Hunting’s expertise is driven by its manufacturing know-how
and precision engineering skills for high-value, critical applications as
well as high temperature and high-pressure electronics applications.
Introduction and market overview
The Electronics and Dearborn business units,
which comprise the majority of Hunting’s
Advanced Manufacturing offering, form the
foundation of the Group’s non-oil and gas sales
strategy, which is one of the core pillars of the
Hunting 2030 Strategy. Hunting’s offering of
complex, high-precision engineered products
provides clients with components that are used
in mission-critical applications. The businesses
attract blue-chip clients, based on these skill sets
and know-how, and this forms the basis of our
sales diversification strategy.
Hunting’s Advanced Manufacturing offering
has again reported good progress within its
core energy markets as well as non-oil and gas
markets, including aviation, medical devices,
naval, and power generation end-markets.
The Electronics business continued to report
a strong oil and gas revenue profile, driven by
its expertise in MWD/LWD downhole tools and
printed circuit board (“PCB”) assemblies as well
as manufacturing switches for Hunting Titan
throughout the year, although this activity was
impacted by the downturn in Hunting Titan’s
sales. Non-oil and gas sales have increased as
more defence-related work was captured with
clients, including Cubic and Textron in the US.
The Dearborn business unit has also been
successful in developing its non-oil and gas sales,
in the sectors noted above, and has increased its
non-oil and gas sales order book in the year.
Advanced Manufacturing’s markets are largely
based on oil and gas capital investment, which
continues to be the foundation of both the
Electronics and Dearborn business units.
In addition, a further market indicator is the
overall level of defence spend by North America
and European governments. Both these
end-markets are likely to see robust growth
to the end of the decade.
During the year, global industry capital investment
was flat at $214.5bn in 2024 compared to
$212.6bn in 2023. This stable industry investment
has supported the Group’s Advanced
Manufacturing sales growth in the year, coupled
with strong defence and medical markets.
Group financial performance
Revenue from the Group’s Advanced
Manufacturing product group totalled $126.9m
in 2024, compared to $112.1m in 2023.
$47.9m of Electronics revenue related to the oil
and gas sector, which includes revenue from work
for Hunting Titan, and $9.2m related to non-oil
and gas markets, predominantly medical and
defence-related sales. $20.6m of Dearborn’s
revenue of related to the oil and gas sector, while
65% or $37.8m related to non-oil and gas sectors.
Further detail on the performance of the business
units is noted below.
EBITDA for the product group was $11.8m
compared to $10.6m in the prior year, giving
an EBITDA margin of 9% in 2024 compared
to 9% in 2023.
The Advanced Manufacturing sales order book
at the year-end was $130.0m compared to
$161.5m at the 2023 year-end, which represents
a reduction of 20% in the year.
Product Review
continued
Hunting PLC
Annual Report and Accounts 2024
48
Strategic Report
Corporate Governance
Financial Statements
Other Information
Advanced Manufacturing – Electronics
During 2024, the Electronics business unit
reported a stable revenue profile as activity levels
across the oil and gas sector were maintained.
Sales to Halliburton, SLB and Baker Hughes
have generally been good in the year; however,
a slowdown in forward activity was noted in
the second half of the year as commodity
prices reduced.
The business installed a new printed circuit board
manufacturing line in Q2 to increase efficiencies.
The Electronics business continues to build
its medical-related sales and has worked hard
to increase military-related revenue in the year.
Management anticipates that this effort will
be rewarded in 2025.
The Electronics business continues to complete
inter-group switch production for the Perforating
Systems product group and are also examining
new opportunities to build other components for
the Hunting Titan operating segment to support
the recovery of the business in what has been
highly challenging markets.
Advanced Manufacturing – Dearborn
The Dearborn business unit continues to be a
major driver of the Group’s efforts to build more
non-oil and gas sales, particularly in high-value
end-markets, such as the power generation and
aviation markets.
At the year-end, the order book of the business
unit was c.$93m, with 69% of this order book
to be delivered in 2025 and the rest in 2026
and beyond.
The business continued to complete work
for Solar Turbines, Pratt & Whitney, Blue Origin,
and SpaceX, as well as the major oil field service
groups for MWD/LWD tool housings.
Advanced Manufacturing – revenue
$m
126.9
2024
2023
112.1
2022
75.1
Source: Company
Advanced Manufacturing – EBITDA
$m
11.8
2024
2023
10.6
2022
0.1
Source: Company
Non-GAAP Measure see NGM C
Advanced Manufacturing – sales order book
$m
130.0
2024
2023
161.5
2022
137.6
Source: Company
Non-GAAP Measure see NGM T
Non-oil and gas revenue
$m
75.1
2024
2023
75.9
2022
47.6
Source: Company
Global drilling capital investment
$bn
214.5
2024
2023
212.6
2022
188.5
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Global average rig count
#
1,691
2024
2023
1,765
2022
1,706
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Product Review
continued
Hunting 2030 Strategy
The Group’s non-oil and gas sales of $75.1m,
including the Advanced Manufacturing product
group, has remained in line with 2023 at $75.9m.
Hunting’s strategy remains targeted at
delivering a meaningful diversification by 2030.
Hunting PLC
Annual Report and Accounts 2024
49
Strategic Report
Corporate Governance
Financial Statements
Other Information
Subsea
Unique technologies
to accelerate the
offshore cash cycle
The Group’s Subsea product offering comprises three sub-groups:
(i) hydraulic valves and couplings, manufactured by the Stafford
business unit; (ii) titanium and steel stress joints, manufactured
by the Spring business unit; and (iii) flow access modules and flow
intervention systems, manufactured by the Enpro business unit.
Introduction and market overview
Offshore drilling and production capital
investment continued to be robust in the year,
with the outlook strong for offshore drilling and
project development to the end of the decade.
The product group reported a strong increase in
its revenue and EBITDA in the year as orders for
ExxonMobil (“Exxon”) have been fulfilled in the
year. Major projects were completed for Guyana
with titanium stress joint orders being completed
for the Yellowtail discovery.
Momentum within the Stafford business was
driven by the demand for subsea trees, which
is a critical component of deepwater field
developments and is a useful market indicator
of the ongoing demand for the Group’s hydraulic
valves and couplings. The Stafford business
reported another set of good results, although
trading slowed during Q4 2024 as some clients
reduced the pace of ordering.
The Enpro business started the year slowly,
but from mid-year won several large orders
as offshore-focused clients accelerated
developments globally.
Global offshore capital investment was broadly
flat at $66.8m in 2024, with revenue growth
driven from South America and the Middle East.
Group financial performance
Revenue in the year totalled $147.1m in 2024,
compared to $98.6m in 2023, as strong
momentum was reported within the Spring
business unit continuing to progress its larger
orders for South America, and also in the
Stafford business unit. The Enpro business unit
also reported a strong increase in revenue and
EBITDA in the year, as interest in the unit’s Flow
Access Modules and Flow Intervention Systems
increased, particularly in South America and
West Africa.
EBITDA for the product group was $30.0m
compared to $13.7m in the prior year, giving
an EBITDA margin of 20% in 2024 compared
to 14% in 2023.
The order book closed 2024 lower than 2023
as major orders for ExxonMobil were completed.
The year-end position was $72.5m compared
to $152.2m in the prior year.
Management notes the lumpiness in the order
book profile of the Subsea product group, which
is driven in the most part by the large orders
received by the Spring business unit. However,
management is confident that this will continue
to build in the second half of 2025 as new
discoveries, particularly in Guyana, move from the
exploration to the development phase. In addition,
given the long-term development plan for Guyana,
the outlook remains extremely robust.
Intellectual property
Intellectual property, patents and trademarks
totalled 138 in the year.
Product Review
continued
Hunting PLC
Annual Report and Accounts 2024
50
Strategic Report
Corporate Governance
Financial Statements
Other Information
North America
The Stafford and Spring businesses are
both located in Houston, Texas, but service
international offshore markets and customers,
ranging from South America to West Africa
as well as the Gulf of Mexico.
The Stafford business saw solid demand for
its hydraulic coupling and valves in the year from
a range of international clients, including Baker
Hughes, TechnipFMC and Exxon.
The Spring business has also seen the
development of a strong relationship with Exxon
in recent years, as the business’s titanium stress
joints have become the trusted technology for
application to Floating Production, Storage and
Offloading vessels (“FPSOs”) in Guyana. In the
year, the Spring business continued its work
on stress joints for TPAO in the Black Sea.
Europe, Middle East, and Africa
Enpro Subsea’s business has continued to grow
in the year, as projects in South America and
West Africa continue to be sanctioned.
Of note was the order win with Exxon in the year,
following collaboration with the Spring business
unit. Exxon rented a Flow Intervention System
for the Liza project in Guyana, demonstrating
the cross-selling opportunities being presented
by Hunting’s wider product offering.
Hunting 2030 Strategy
Subsea is a key area for growth for the Group
to the end of the decade, with the industry
moving to more modular development plans,
along with more standardisation of field
designs. This is to ensure total project costs
for our customers are contained.
The approach of operators to engage with
a wider number of suppliers within the offshore
supply chain provides opportunities for the
Group to leverage its technology and service
offering into large, turnkey projects as
demonstrated by the success with ExxonMobil
since 2021.
As part of the Hunting 2030 Strategy, the
Group will invest in new technologies to build
the scale of Hunting’s subsea product offering,
and to capitalise on the renewed interest in
offshore projects.
Hunting sees acquisition opportunities in this
sub-segment of the market contributing to an
increase in the scale and products offered by
the Group.
Subsea – revenue
$m
147.1
2024
2023
98.6
2022
69.0
Source: Company
Subsea – EBITDA
$m
30.0
2024
2023
13.7
2022
3.4
Source: Company
Non-GAAP Measure see NGM C
Subsea – sales order book
$m
72.5
2024
2023
152.2
2022
105.1
Source: Company
Non-GAAP Measure see NGM T
Global offshore capital investment
$bn
66.8
2024
2023
67.5
2022
53.5
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Global offshore average rig count
#
201
2024
2023
205
2022
189
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Global subsea tree demand
#
216
2024
2023
240
2022
237
Source: Rystad Energy
Product Review
continued
Hunting PLC
Annual Report and Accounts 2024
51
Strategic Report
Corporate Governance
Financial Statements
Other Information
Other Manufacturing
Capabilities to support
a changing industry
Hunting’s Other Manufacturing product group includes the
Group’s well intervention and well testing offerings, along with
the trenchless and organic oil recovery businesses.
Introduction and market overview
Hunting’s Other Manufacturing revenue is
predominantly based on oil and gas capital
investment. Sales of well testing and well
intervention equipment have increased in the year,
as broad-based investment across the industry
increased. During the year, global industry capital
investment increased by 1% from $212.6bn in
2023 to $214.5bn.
The well intervention business is serviced from
the Group’s North America, Europe, and Asia
Pacific operations.
The Group’s European well testing business
is incorporated into this product group, given its
differing business model and profile to the other
product groups. This business is more focused
on European and Middle East markets.
Hunting’s trenchless business unit, which sells
drill stems, connections and drill pipe, forms part
of the Group’s non-oil and gas sales.
The organic oil recovery (“OOR”) business
is based in EMEA, commercialising a licensed
technology to optimise reservoir performance
and recovery rates and extend the life of the well.
In 2024, the organic oil recovery business secured
major contract wins with two clients in the North
Sea, who wish to roll out the technology in
brownfield projects on the UK Continental Shelf.
In August 2024, orders with a value of up to
$60m were announced, which will be completed
over the next five years.
Group financial performance
Revenue from the Group’s Other Manufacturing
product lines totalled $88.5m in 2024, compared
to $78.8m in 2023.
Business units in EMEA have contributed to
the step up in revenue in the year, with a 46%
increase year-on-year. Revenue from businesses
in Asia Pacific was flat compared to 2023 and in
North America reduced by 13% due to reduced
US onshore activity.
EBITDA for the product group was $2.9m
compared to $6.7m in the prior year, giving an
EBITDA margin of 3% in 2024 compared to 9%
in 2023. EBITDA in 2023 included a contribution
from the legacy E&P assets, with EBITDA in 2024
impacted by additional overheads in the year.
The Other Manufacturing sales order book at the
year-end was $39.9m, which compares to $16.8m
at the 2023 year-end, and represents an increase
of 138% in the year. The increase is wholly due
to the $60m of contracts relating to the Group’s
OOR technology, which will be completed over
the next five years.
Organic oil recovery (“OOR”)
The commercial traction of the Group’s licensed
OOR technology is noted in the Chief Executive’s
Report and above.
The securing of up to $60m of contracts for
clients in the North Sea is testament to the strong
drive of the management team to demonstrate
the benefits of the technology to many blue-chip
clients. Many other blue-chip customers have
been trialling the technology with laboratory and
field tests likely to accelerate strongly in the
coming years.
As well as delivering production enhancements,
the technology reduces hydrogen sulphide
concentrations, which is another attractive benefit.
Product Review
continued
Hunting PLC
Annual Report and Accounts 2024
52
Strategic Report
Corporate Governance
Financial Statements
Other Information
Well intervention
2024 has seen steady activity within the well
intervention product line. The Group transferred
its Singapore manufacturing capabilities to the
new facility in Dubai during the year. Going
forward, this will enable commercial efficiencies
to be captured, given this is where most of the
Group’s clients are located.
Well testing
In the year, the well testing business delivered
another year of revenue growth in line with the
increase in capital investment across the industry.
The business continued to transfer to Dubai in
2024, with headcounts in the Netherlands slowly
reducing as production and assembly functions
were transferred to the UAE.
Trenchless
The trenchless business reported another solid
year, supported by the ongoing roll out of 5G
across North America. Sales of connections,
drill stems and drill pipe have grown compared
to 2023, with the outlook for 2025 also strong as
investment in IT infrastructure continues across
the US.
Other Manufacturing – revenue
$m
88.5
2024
2023
78.8
2022
71.0
Source: Company
Other Manufacturing – EBITDA
$m
2.9
2024
2023
6.7
2022
3.8
Source: Company
Non-GAAP Measure see NGM C
Other Manufacturing – sales order book
$m
39.9
2024
2023
16.8
2022
15.1
Source: Company
Non-GAAP Measure see NGM T
Non-oil and gas revenue
$m
75.1
2024
2023
75.9
2022
47.6
Source: Company
Global drilling capital investment
$bn
214.5
2024
2023
212.6
2022
188.5
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Global average count
#
1,691
2024
2023
1,765
2022
1,706
Source: Spears & Associates
Drilling & Production Outlook
– December 2024
Product Review
continued
Hunting 2030 Strategy
The commercialisation of the Organic Oil
Recovery technology in the year supports the
Group’s revenue diversification and continues
the theme of our products enabling our
blue-chip customers to improve cash flow.
Hunting PLC
Annual Report and Accounts 2024
53
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting’s precision manufacturing business,
Dearborn, which is located at a c.215,000 square
foot facility in Maine, US, is equipped with
advanced manufacturing systems that deliver
mission-critical components for the energy,
defence, aerospace, and commercial
space industries.
Dearborn has cultivated a spirit of partnership
with several key aerospace customers and
turbine engine manufacturers, including
Pratt & Whitney, Solar Turbines, and Sikorsky.
This forward-looking model for long-term
business relationships has accelerated the
business’s diversification into manufacturing
aerospace components and turbine engine
shafts, with complex engine shaft and
rocket component manufacturing demanding
Dearborn’s uncompromising attention to detail
and process control.
Dearborn has also seen growth in demand
for rocket components for space craft since
2016. The need for high-precision tubular
products made of exotic alloys has led the
top two independent space exploration
companies, SpaceX and Blue Origin, to
Dearborn, with its expertise in metallurgy,
robust quality management system, exceptional
sub-vendor management, and its ability to deliver
precision-engineered turn-key parts. The rocket
component sector has matured into a regular
revenue stream for the business, with 515%
growth over the last four years.
These efforts have resulted in meaningful
non-oil and gas revenue growth over recent
years for Dearborn. The business is positioned
for steady growth as there is an increasing
demand for high-precision specialty tubing,
with an aerospace order book extending out
to 2028 and production capacity for several
more programmes in development.
Accelerating into aerospace, supplying into space
Hunting PLC
Annual Report and Accounts 2024
54
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operating Segment Review
Hunting Titan
2024
2023
Market indicators*
US onshore – average rig count
#
579
669
Canada onshore – average rig count
#
188
177
Revenue
Perforating
$m
92.0
93.6
Energetics
$m
66.3
70.0
Instruments
$m
52.8
72.5
Perforating Systems
$m
211.1
236.1
OCTG
$m
2.7
6.1
Advanced Manufacturing
$m
6.7
8.0
External revenue
$m
220.5
250.2
Inter-segment revenue
$m
9.8
9.0
Segment revenue
$m
230.3
259.2
Profitability
EBITDA**
$m
0.6
21.9
EBITDA margin
%
0
8
Operating (loss) profit
$m
(117.4)
12.7
Adjusting items
$m
109.1
–
Adjusted operating (loss) profit
$m
(8.3)
12.7
Adjusted operating margin
%
(4)
5
Other financial measures
Inventory
$m
107.8
140.5
Capital investment**
$m
3.3
3.1
*
Source: Spears & Associates
Drilling & Production Outlook – December 2024
**
Non-GAAP Measure (see pages 255 to 262)
Introduction
The Hunting Titan operating segment focuses
predominantly on the US and Canadian onshore
drilling and completion markets, but also services
international markets from its operating sites in
the US.
Hunting Titan has a network of distribution centres
throughout the US and Canada from which the
majority of the segment’s sales are derived.
Hunting Titan also utilises the global manufacturing
footprint of the wider Group to assist in meeting
customer demand and, during the year, the
Electronics business unit, which is part of the
North America operating segment, continued
to manufacture firing switches on behalf of
Hunting Titan.
Operating loss for the year was $117.4m
(2023 – $12.7m profit). Adding back the charges
for impairment noted above, the adjusted
operating loss for the year was $8.3m
(2023 – $12.7m profit).
Hunting Titan focused on reducing inventories
in the year given the slower market conditions,
with inventory decreasing from $140.5m in 2023
to $107.8m at 31 December 2024 despite the
highly challenging market conditions.
Hunting Titan recorded capital investment
of $3.3m (2023 – $3.1m) mainly relating to new
equipment purchases for the Milford and Pampa
facilities, including new lathes and robotics
installed at Pampa for Tandem production.
The segment capitalised $2.2m (2023 – $2.2m)
research and development costs in the year. This
predominantly related to the development of the
H-4 Perforating System™ and new energetics
charges launched in the year.
Operating footprint and headcount
During the year, the Wichita Falls operating
site was closed, following the restructuring
announced in Q2 2024.
The segment has also closed two distribution
centres in the year to further reduce costs.
Following these closures, at the year-end,
Hunting Titan operated from 3 (2023 – 4)
operating sites and 12 (2023 – 14) distribution
centres, located in Canada, Mexico, and the US.
Headcount within the segment decreased from
622 in 2023 to 514 in 2024, predominantly due
to the facility consolidation and cost reduction
programmes noted above.
Segment performance
Hunting Titan’s revenue streams are divided into
four sub-groups: (i) perforating; (ii) energetics;
(iii) instruments; and (iv) advanced manufacturing
and OCTG.
Perforating gun sales decreased marginally
in the year to $92.0m, with energetics sales also
declining in the year to $66.3m, reflecting the
continued reduction in activity reported across
the US onshore well completions market.
Instrument sales were also adversely impacted
in the year given the prevailing market conditions.
Segment revenue was down 11% in 2024
at $230.3m (2023 – $259.2m), as the low price
for natural gas and lower average US rig count
continued to reduce across North America.
Partially offsetting the decline in US onshore
revenue, Hunting Titan’s international sales of
$45.7m in 2024 were comparable with $45.0m
in 2023 as demand for perforating products was
sustained within Asia Pacific, the Middle East,
and South America.
EBITDA for the year was $0.6m (2023 – $21.9m),
leading to an EBITDA margin of 0% compared
to 8% in 2023.
Given the continued reduction in activity levels,
the in-year trading performance of the segment
and the medium-term outlook for the US onshore
market, an impairment review was undertaken,
resulting in a charge of $109.1m being recorded
(2023 – $nil) in respect of goodwill attached to the
Hunting Titan cash generating unit. The impairment
has been recorded as an adjusting item in the
Group’s consolidated income statement.
Hunting PLC
Annual Report and Accounts 2024
55
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operating Segment Review
continued
North America
2024
2023
Market indicators*
US onshore – average rig count
#
579
669
US offshore – average rig count
#
19
19
US – total drilling spend
$bn
102.0
103.4
Canada onshore – average rig count
#
188
177
Canada – total drilling spend
$bn
20.2
16.9
Revenue
OCTG
$m
199.8
192.4
Advanced Manufacturing
$m
120.2
104.1
Other Manufacturing
$m
37.3
42.8
External revenue
$m
357.3
339.3
Inter-segment revenue
$m
31.1
35.4
Segment revenue
$m
388.4
374.7
Profitability
EBITDA**/***
$m
62.2
53.8
EBITDA margin
%
16
14
Operating profit***
$m
45.5
33.7
Adjusting items
$m
–
–
Adjusted operating profit***
$m
45.5
33.7
Adjusted operating margin
%
12
9
Other financial measures
Inventory
$m
98.7
107.8
Capital investment**
$m
10.3
14.5
*
Source: Spears & Associates
Drilling & Production Outlook – December 2024
**
Non-GAAP Measure (see pages 255 to 262)
*** Restated to include the Group’s share of associates’ and joint venture’s results
Segment performance
Revenue within the North America operating
segment is derived from three primary product
groups being: (i) OCTG, which incorporates
premium connection and accessories
manufacturing; (ii) Advanced Manufacturing,
which incorporates the Electronics and Dearborn
business units; and (iii) Other Manufacturing,
which incorporates well intervention and
trenchless sales.
The segment’s OCTG revenue benefited from
steady sales from its premium connections
business as well as continued well completion
and accessories sales into Guyana and Brazil
during the year, as offshore developments have
progressed throughout the year. Sales of the
Group’s TEC-LOCK™; SEAL-LOCK™ and
TKC4040™ connections have been solid despite
the challenging North America onshore drilling
market. Revenue from OCTG for North and
South America has increased to $199.8m
in 2024 compared to $192.4m in 2023.
The Electronics business reported another
year of growth, as traditional oil and gas sales,
medical device sales, other non-oil and gas
sales, and inter-company sales to Titan,
continued in the year. The Dearborn business
reported further improvement in performance
during 2024 as non-oil and gas work increased.
Overall, Advanced Manufacturing revenue
increased to $120.2m in the year compared
to $104.1m in 2023.
Other Manufacturing revenue decreased to
$37.3m (2023 – $42.8m), predominantly due
to the sale of the Group’s oil and gas production
assets in 2023.
Overall, segment revenue was up by 4%
from $374.7m in 2023 to $388.4m in 2024.
EBITDA for the segment was $62.2m (2023 –
$53.8m restated) as activity increased across
most product groups. This led to an EBITDA
margin of 16% compared to 14% in 2023.
Operating profit and adjusted operating profit for
the year were $45.5m (2023 – $33.7m restated),
as there were no adjusting items in the year.
Inventory levels within the segment decreased
from $107.8m in 2023 to $98.7m, following
particular focus on reducing Electronics, well
intervention and trenchless inventories in the year.
The North America operating segment recorded
capital investment of $10.3m (2023 – $14.5m)
mainly relating to new equipment purchases and
upgrades at the segment’s Electronics and US
Manufacturing businesses.
The segment spent $6.2m (2023 – $4.1m)
on research and development in the year,
including spend to support the development
and qualification of premium connections for
application to geothermal and carbon capture
projects and a new printed circuit board
manufacturing line in Electronics.
Operating footprint and headcount
During the year, the operating footprint of the
segment remained unchanged, with 10 operating
sites and two distribution centres at year-end.
Despite the continued increase in activity reported
across most product groups, the headcount
within the segment decreased from 900 in
2023 to 886 in 2024, predominantly within the
Electronics and US Manufacturing (OCTG) sites.
Introduction
Hunting’s North America operating segment
incorporates the US and Canada OCTG
businesses and the Dearborn and Electronics
businesses, which form the majority of the
Group’s Advanced Manufacturing product group.
The segment generates a large proportion of the
Group’s non-oil and gas sales, which includes
the Advanced Manufacturing product group and
the trenchless business unit that services the
telecommunications sector, which is reported
under “Other Manufacturing”.
Hunting PLC
Annual Report and Accounts 2024
56
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operating Segment Review
continued
Subsea Technologies
2024
2023
Market indicators*
Global offshore – average rig count
#
201
205
Global offshore – total drilling spend
$bn
66.8
67.5
Revenue
Stafford – Couplings & valves
$m
47.4
42.1
Spring – Stress joints
$m
81.7
49.1
Enpro – Flow intervention systems & Flow access modules
$m
18.0
7.4
External revenue
$m
147.1
98.6
Inter-segment revenue
$m
–
–
Segment revenue
$m
147.1
98.6
Profitability
EBITDA**
$m
30.0
13.7
EBITDA margin
%
20
14
Operating profit
$m
25.6
8.0
Adjusting items
$m
–
–
Adjusted operating profit**
$m
25.6
8.0
Adjusted operating margin
%
17
8
Other financial measures
Inventory
$m
15.3
25.4
Capital investment**
$m
4.3
1.2
*
Source: Spears & Associates
Drilling & Production Outlook – December 2024
**
Non-GAAP Measure (see pages 255 to 262)
Segment performance
The segment has completed large orders
for ExxonMobil in the year, with revenue within
the Subsea Technologies operating segment
increasing 49% in the year, from $98.6m in 2023
to $147.1m in 2024.
The Stafford business unit has reported a
$5.3m increase in revenue in the year to $47.4m,
supported by the general momentum in deepwater
activity. The unit had a strong first half to the year
as contracts with major clients continued, but
noted a slowing in the final quarter of the year
as the reduced oil price started to move project
commissioning to the right.
The Spring business unit reports an exceptionally
strong financial performance in 2024, which
supported the performance of the segment as
a whole and was driven by the order completions
for ExxonMobil for its titanium stress joints.
Please see page 43 for more information.
The Enpro business unit reported a stronger
2024 compared to the prior year as orders were
completed for South America and West Africa.
EBITDA for the segment was $30.0m (2023 –
$13.7m) as key contracts were progressed and
operating efficiencies were improved through
good facility utilisation. This led to an EBITDA
margin of 20% compared to 14% in 2023.
Operating profit for the year was $25.6m
(2023 – $8.0m) and operating profit margin was
17% compared to 8% in 2023. There were no
adjusting items in the year.
Inventory levels within the segment decreased
from $25.4m in 2023 to $15.3m, as orders
were executed, particularly within the Spring
business unit.
During the year, the Subsea Technologies
operating segment recorded capital investment
of $4.3m (2023 – $1.2m) mainly relating to new
equipment purchases at the Spring facility,
including the installation of a new long bed lathe.
Operating footprint and headcount
During the year, the operating footprint of
the segment remained unchanged, following the
merging of Enpro’s operating site into the Group’s
Badentoy, Aberdeen facility in early January 2024.
Headcount within the segment increased from 196
in 2023 to 223 in 2024, reflecting the higher activity
levels reported across the operating segment.
Introduction
The Subsea Technologies operating segment
comprises three business units: (i) Stafford,
which manufactures hydraulic valves and
couplings; (ii) Spring, which manufactures
titanium and steel stress joints; and (iii) Enpro,
which manufactures flow intervention systems
and flow access modules.
These businesses occupy different parts of the
offshore/subsea equipment supply chain, with
customers ranging from tier one OEMs to
exploration and production companies.
The segment has two dedicated facilities, both
in the US, with the Enpro business operating from
the Group’s shared Badentoy, Aberdeen facility.
Hunting PLC
Annual Report and Accounts 2024
57
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operating Segment Review
continued
EMEA
2024
2023
Market indicators*
Europe – average rig count
#
95
96
Europe – spend
$bn
13.0
15.6
North Sea – average rig count
#
24
30
North Sea – spend
$bn
11.6
14.4
Middle East – spend
$bn
22.8
21.8
Revenue
OCTG
$m
27.5
46.5
Perforating Systems
$m
11.6
7.7
Other Manufacturing
$m
47.5
32.5
External revenue
$m
86.6
86.7
Inter-segment revenue
$m
1.1
1.5
Segment revenue
$m
87.7
88.2
Profitability
EBITDA**
$m
(7.9)
1.7
EBITDA margin
%
(9)
2
Operating loss – restated
$m
(12.4)
(11.2)
Adjusting items – restated
$m
–
8.9
Adjusted operating loss – restated**
$m
(12.4)
(2.3)
Adjusted operating margin
%
(14)
(3)
Other financial measures
Inventory
$m
19.7
28.1
Capital investment**
$m
2.0
2.4
*
Source: Spears & Associates
Drilling & Production Outlook – December 2024
**
Non-GAAP Measure (see pages 255 to 262)
Segment performance
Revenue within the EMEA operating segment is
derived from three primary product groups being:
(i) OCTG, incorporating premium connection and
accessories manufacturing; (ii) Perforating Systems,
supporting the sales of products on behalf of
Hunting Titan; and (iii) Other Manufacturing, which
incorporates well intervention, well testing and
organic oil recovery sales.
OCTG revenue has been lower in the year, given
the declining activity in the North Sea. Revenue
for the product group was $27.5m in the year
(2023 – $46.5m) reflecting this reduced activity.
Within this sales figure, however, is $7.1m of
geothermal revenue, which the Group’s
Netherlands business captured in the year.
Sales of Perforating Systems have increased
in the year, as demand for Hunting Titan’s
components improved across the Middle East
and in Norway. Revenue from this product group
increased by $3.9m in the year to $11.6m.
Revenue from the Other Manufacturing product
group, which includes well intervention sales and
rental in addition to well testing, trenchless and
organic oil recovery sales, increased by $15.0m
during the year to $47.5m.
EBITDA for the segment was a loss of $7.9m
(2023 – $1.7m profit), driven by lower trading
results and an impairment of inventory within
the segment’s Netherlands business unit, which
was treated as an unadjusted item. This led to an
EBITDA margin of (9)% compared to 2% in 2023.
The operating loss and adjusted operating loss
were $12.4m in the year. In 2023, the adjusted
operating loss was $2.3m. As discussed further
in the Group Financial Review, the prior year
operating loss has been restated to include
an import tax provision of $8.9m relating to not
having followed the tax authority’s interpretation
of the correct processes for importing goods into
their jurisdiction and thus not paying amounts
which would have been due based on the tax
authority’s guidance in place at the time. The
restated operating loss for 2023, including the
provision, was $11.2m.
Inventory levels within the segment decreased
from $28.1m in 2023 to $19.7m, as activity
slowed, and also includes the inventory write
down in the Netherlands.
During the year, the EMEA operating segment
recorded capital investment of $2.0m (2023 –
$2.4m) mainly relating to equipment purchases
at the segment’s new Dubai facility.
Operating footprint and headcount
During the year, the operating footprint of the
segment remained unchanged, with seven
operating sites at the year-end.
The headcount within the segment increased
marginally from 270 in 2023 to 277 in 2024.
Introduction
Hunting’s EMEA operating segment comprises
businesses in the Netherlands, Norway, Saudi
Arabia, UAE and UK. The segment provides
OCTG (including threading, storage and
accessories manufacturing) in the Netherlands,
Saudi Arabia and the UK.
In the UAE, the Group operates an equipment
assembly function for well testing and intervention
products as well as a global sales office for all of
the Group’s product lines and operates a service
and distribution function in Norway. The Group’s
operations in Saudi Arabia are through a 65%
joint venture arrangement with Saja Energy.
Hunting PLC
Annual Report and Accounts 2024
58
Strategic Report
Corporate Governance
Financial Statements
Other Information
Operating Segment Review
continued
Asia Pacific
2024
2023
Market indicators*
Far East – spend
$bn
27.3
24.7
Middle East – spend
$bn
22.8
21.8
Revenue
OCTG
$m
233.7
150.8
Other Manufacturing
$m
3.7
3.5
External revenue
$m
237.4
154.3
Inter-segment revenue
$m
3.2
3.3
Segment revenue
$m
240.6
157.6
Profitability
EBITDA**/***
$m
41.4
11.3
EBITDA margin
%
17
7
Operating profit
$m
37.6
8.3
Adjusting items
$m
–
–
Adjusted operating profit**
$m
37.6
8.3
Adjusted operating margin
%
16
5
Other financial measures
Inventory
$m
64.4
29.2
Capital investment**
$m
4.7
2.2
*
Source: Spears & Associates
Drilling & Production Outlook – December 2024
**
Non-GAAP Measure (see pages 255 to 262)
*** Restated to include the Group’s share of associates’ and joint venture’s results
Segment performance
Revenue within the Asia Pacific operating
segment is derived from two primary product
groups being: (i) OCTG, which incorporates
premium connection and accessories
manufacturing; and (ii) Other Manufacturing,
which incorporates well intervention equipment
manufacturing.
Due to the successful award of the $231m
KOC orders in H1 2024, followed by the
commencement of delivery in September 2024,
revenue increased significantly for the operating
segment in 2024, growing by 53% to $240.6m
from $157.6m in 2023. The segment continued to
complete orders for other major clients, including
Cairn Oil and Gas (Vedanta) Limited, which is a
three-year contract announced in 2023.
EBITDA for the segment was $41.4m
(2023 – $11.3m restated) as higher margin
contracts were delivered, with production
efficiencies and higher facility utilisation reported
in the year. This led to an EBITDA margin of 17%
compared to 7% in 2023.
Operating profit and adjusted operating profit
for the year were $37.6m (2023 – $8.3m restated),
as there were no adjusting items in either year,
and operating margin was 16% compared to 5%.
Inventory levels within the segment increased
from $29.2m in 2023 to $64.4m, predominantly
due to the large raw material requirements
attached to the KOC orders.
During the year, the Asia Pacific operating
segment recorded capital investment of $4.7m
(2023 – $2.2m) as new production lines were
commissioned in China.
Operating footprint and headcount
During the year, the operating footprint of the
segment remained unchanged, with three
operating sites at year-end.
The headcount within the segment increased
from 346 in 2023 to 378 in 2024, in support of
the large OCTG orders secured during the year.
India joint venture
The segment has Group oversight of the Jindal
Hunting Energy Services joint venture in India,
in which Hunting holds a 49% interest.
In 2023, the venture commissioned its premium
connection threading facility with plans in 2025
to open a new facility on the east coast of India.
The India joint venture contributed $2.3m
(2023 – $0.2m loss) to the operating segment’s
EBITDA result noted above.
Introduction
Hunting’s Asia Pacific operating segment covers
three operating sites across China, Indonesia and
Singapore and services customers predominantly
in Africa, Asia Pacific, India, and the Middle East.
In Singapore, Hunting manufactures OCTG
premium connections and accessories.
The Group’s Indonesia facility also completes
threading and accessories work. In China,
the Group operates from a facility in Wuxi,
which has OCTG threading and perforating
gun manufacturing capabilities.
Hunting PLC
Annual Report and Accounts 2024
59
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
Revenue
$
1,048.9
m
(2023 – $929.1m)
Adjusted operating profit
$
88.0
m
(2023 – $60.4m restated)
The Group delivered strong operational performance in 2024
and reported year-on-year growth in revenue, adjusted operating
profit and adjusted earnings. This was driven by heightened
industry activity, especially in the offshore and international
markets, and was achieved despite the more subdued North
America onshore market during the year, demonstrating the
robust demand for the Group’s diverse portfolio of products.
Solid
balance sheet
to drive growth
Hunting PLC
Annual Report and Accounts 2024
60
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
continued
Financial performance measures
The following are financial key performance indicators as identified on page 18.
2024
$m
2023
$m
Revenue
1,048.9
929.1
EBITDA
i
(NGM C)
126.3
102.4
EBITDA margin
ii
12%
11%
Adjusted profit before tax
iii
(NGM B)
75.6
50.0
Adjusted diluted earnings per share – cents
iii
(NGM B)
31.4c
20.3c
Free cash flow (NGM P)
139.7
(0.5)
Working capital to annualised revenue ratio (NGM E)
29%
46%
Total cash and bank/(borrowings) (NGM K)
104.7
(0.8)
Dividend per share declared – cents (NGM Q)
11.5c
10.0c
Sales order book (NGM T)
508.6
565.2
Financial performance measures derived from IFRS
2024
$m
2023
$m
Operating (loss) profit
iv
(21.1)
51.5
(Loss) profit before tax
(33.5)
41.1
Diluted (loss) earnings per share – cents
(17.6)c
65.9c
Net cash inflow from operating activities
188.5
49.3
i.
EBITDA has been restated in 2023 to include the Group’s share of associates’ and joint venture’s results, see NGM C.
ii. EBITDA as a percentage of revenue.
iii.
Results are presented on a statutory basis as reported under UK adopted International Financial Reporting Standards. Adjusted results
reflect adjusting items determined by management, which are described in Non-GAAP Measures (“NGM”) on pages 255 to 262.
iv.
Operating profit has been restated in 2023 to include the Group’s share of associates’ and joint venture’s results and the import tax
provision, see note 41 for further details.
Three of the Group’s operating segments
delivered increases to revenue during the year.
The Subsea Technologies and Asia Pacific
operating segments saw compelling growth
in the year as demand for the Group’s products
accelerated in response to increased activity in
the offshore and international markets.
The Subsea Technologies operating segment
delivered on contracts for its titanium and steel
stress joints, and Asia Pacific began delivery
of the $231m KOC orders in September, as the
operating segment reported its highest revenue
and margins.
The North America operating segment
benefited from revenue growth in the Advanced
Manufacturing businesses, supported by the
expansion of non-oil and gas sales in 2024.
Hunting Titan’s revenue reduced in 2024, as
demand for its Perforating Systems was impacted
by a reduction in the North American rig count
due to low natural gas prices, and EMEA’s
revenue was flat compared to 2023.
Following the annual impairment review of
non-current assets, impairment charges totalling
$109.1m were recognised in relation to the
Hunting Titan cash-generating unit (“CGU”).
These charges have been recorded against the
backdrop of a subdued North American market
with reduced rig counts and sluggish gas prices,
and reduced oil focused drilling due to limitations
on flaring in certain US onshore basins, such as
the Permian, leading to projections declining for
the business. For further information on the
impairment review, please see note 15.
Basis of preparation
The Board continues to monitor the Group’s
progress using adjusted profitability measures
and reviews and approves the adjusting items
proposed by management, as the Group believes
these adjusted measures aid the comparison of
the Group’s operating performance from one
period to the next.
The Group’s adjusted trading results have been
highlighted in the management narrative below,
with reconciliations between the statutory and
adjusted results detailed in NGM A.
The definition and calculation of a range of NGMs
including EBITDA, working capital, total cash and
bank/(borrowings), and free cash flow can be
found on pages 255 to 262.
Prior year restatements
(a) Import tax provision
In July 2024, as part of an internal review,
an EMEA business unit was identified as not
following the tax authority’s interpretation of
the correct process for importing goods, under
specific contracts, in their jurisdiction and thus
had not paid amounts which would have been
due based on the tax authority’s guidance in
place at the time. The business is working with
the tax authority to regularise the position.
While no incremental profit or cash flow
was recognised, resolution is dependent
upon discretion by the authority, and therefore
an exposure exists. A provision of $9.5m was
recognised at 30 June 2024, which represented
the Group’s best estimate of the potential liability.
The carrying value of the provision at
31 December 2024 reduced to $8.6m following
ongoing dialogue with the tax authority and a
review of the assumptions.
Of the total provision of $9.5m recognised at
30 June 2024, $9.1m related to the year ended
31 December 2023, and $0.4m to the six months
ended 30 June 2024. The prior period financial
statements were restated to reflect the
recognition of the provision, together with the
corresponding deferred tax impact, which have
been disclosed as adjusting items (see NGM A).
The impact on the 2023 balance sheet has been
an increase in provisions by $9.1m to $16.6m
and net tax assets have increased by $2.1m to
$84.8m at 31 December 2023, with net assets
decreasing by $7.0m to $950.1m. The impact on
the income statement is a reduction in operating
profit by $8.9m and a reduction in the tax charge
of $2.1m, therefore the net reduction to profit for
the year was $6.8m.
All periods that could potentially be impacted
by this import tax matter have been reviewed and
there is no further exposure. For further details,
please see notes 1 and 41.
(b) Presentation of associates’
and joint venture’s results
During the year, the Company changed
its accounting policy to present its share of
associates’ and joint venture’s results as part
of operating profit and has represented the 2023
results on this basis to aid comparability, with
operating profit and EBITDA decreasing by
$0.6m, see note 41 and NGM C.
Hunting PLC
Annual Report and Accounts 2024
61
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
continued
Operating results
Summary Group operating results
2024
$m
2023
$m
Revenue
1,048.9
929.1
Cost of sales
(777.0)
(701.4)
Gross profit
271.9
227.7
Selling and distribution costs
(53.5)
(49.3)
Administrative expenses
i
(127.9)
(128.7)
Impairment of goodwill (note 15)
(109.1)
–
Net operating income and other expenses
(2.4)
2.4
Share of associates’ and joint venture’s results
(0.1)
(0.6)
Operating (loss) profit
ii
(21.1)
51.5
Adjusting items
iii
(NGM A)
109.1
8.9
Adjusted operating profit
iii/iv
(NGM B)
88.0
60.4
EBITDA
iv
(NGM C)
126.3
102.4
Diluted (loss) earnings per share – cents
v
(note 10)
(17.6)c
65.9c
Adjusted diluted earnings per share – cents
i
(NGM B)
31.4c
20.3c
i.
Administrative expenses were restated in 2023 to include the import tax provision, as shown in note 41.
ii.
Operating profit was restated in 2023 to include the import tax provision and the Group’s share of associates’ and joint venture’s results,
see note 41.
iii.
Results are presented on a statutory basis as reported under UK adopted International Financial Reporting Standards. Adjusted results
reflect adjusting items determined by management, which are described in Non-GAAP Measures (“NGM”) on pages 255 to 262.
iv. Restated in 2023 to include the Group’s share of associates’ and joint venture’s results.
v.
Restated in 2023 to include the import tax provision.
2023 administrative expenses were restated to
include the $8.9m import tax provision, as noted
above. Excluding this item, the 10% increase in
administrative expenses reflects further investment
in support functions and infrastructure to
underpin the growth agenda.
As the Hunting Titan operating segment had
recorded deteriorating results in the year due
to reduced activity levels in the US onshore, and
the reduction in the medium-term trading outlook
for the business, the carrying value of the CGU’s
goodwill was assessed for impairment as part
of the annual goodwill impairment review. This
resulted in a goodwill impairment charge totalling
$109.1m being recognised. Further details are
provided in note 15.
As noted above, the Group’s share of associates’
and joint venture’s results has been included
within operating profit from 1 January 2024,
with the 2023 comparative restated. In 2024, the
Group’s share of associates’ and joint venture’s
results was a $0.1m loss (2023 – $0.6m loss),
with a profit contribution from the India joint
venture in 2024 of $2.3m, in its first full year of
trading, offset by losses attributed to the Group’s
investments in Cumberland Additive of $1.4m
and Rival Downhole Tools of $1.0m, which was
impacted by the subdued US onshore market.
Net finance expense
Net finance expense was $12.4m (2023 – $10.4m),
with the higher expense reflecting the increase
in the costs associated with working capital
programmes utilised during the year and
derivative fair value losses.
(Loss) profit before tax
Following the charges for the net interest expense,
the Group’s loss before tax for the year was
$33.5m (2023 – $41.1m profit restated).
Taxation
The tax credit for the year was $8.0m (2023
– $71.1m credit restated) and includes a deferred
tax credit of $27.8m in relation to the Hunting Titan
goodwill impairment charge. The resulting effective
tax rate (“ETR”) for the year is 24% compared to
the weighted average tax rate of 29%, with the
main difference in the rates relating to deferred
tax not recognised in the year. The 2023 ETR
was (173)% (restated) and was impacted by the
recognition of previously unrecognised deferred
tax assets in the US totalling $83.1m. The
Group’s ETR in 2023 was significantly different to
that which might be expected when applying the
weighted average tax rate of 23% to the profits
made by the Group as a result of this.
(Loss) profit for the year
Following the tax charge noted above, the loss
for the year was $25.5m (2023 – $112.2m profit
restated), with a loss of $28.0m (2023 – $110.3m
profit restated) attributable to Hunting’s
shareholders.
(Loss) earnings per share
The attributable loss of $28.0m resulted in a
diluted loss per share of 17.6 cents, compared to
diluted earnings per share of 65.9 cents (restated)
in 2023, with 2023 including the benefit of the
recognition of the previously unrecognised
US deferred tax assets. The weighted average
number of Ordinary shares in issue, inclusive of
all dilutive potential Ordinary shares, was 169.5m
(2023 – 167.3m).
Revenue
Trading in 2024 was ahead of 2023, with revenue
for 2024 increasing by 13% to $1,048.9m (2023
– $929.1m) reflecting the positive performance
in the Group’s OCTG, Subsea and Advanced
Manufacturing product groups as international
and offshore demand for oil and gas products
continued to grow. However, the Perforating
Systems product group reported headwinds
in the year driven by industry capital discipline
and the lower average natural gas price recorded
across the period, leading to restricted drilling
activity, and a reduction in the North American
rig count compared to the prior year. Non-oil and
gas revenue of $75.1m in the year was broadly
flat compared to $75.9m in 2023.
Gross profit
Gross profit for the year increased to $271.9m
compared to $227.7m in 2023 and gross margin
was 26% in the year (2023 – 25%), the increase
being driven by higher revenue, product mix, the
impact of previous price increases and increased
facility utilisation, leading to a better profit
drop-through.
Operating (loss) profit
The operating loss in 2024 was $21.1m compared
to a profit of $51.5m (restated) in 2023. The
charges for selling and distribution, administration,
and other net operating income and other
expenses totalling $183.8m (2023 – $175.6m
restated) increased in the year, reflecting the
increase in activity across the Group.
Hunting PLC
Annual Report and Accounts 2024
62
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
continued
Adjusting items
The Board continues to monitor the Group’s
progress using adjusted profitability measures
and reviews and approves the adjusting items
proposed by management. The Group’s adjusted
trading results have also been discussed
throughout as the Group believes these adjusted
measures aid the comparison of the Group’s
operating performance from one period to the
next. Reconciliations between the statutory and
adjusted results have been presented in NGM B.
The definition and calculation of a range of other
NGMs including EBITDA, working capital, total
cash and bank/(borrowings), free cash flow and
ROCE can be found on pages 255 to 262.
Given the quantum of Hunting Titan’s goodwill
impairment charge of $109.1m, together with the
associated deferred tax credit of $27.8m, these
items have been treated as adjusting items in
the 2024 income statement.
As discussed above, a provision of $8.9m was
recognised in the income statement in 2023 as a
prior year adjustment in relation to an import duty
matter, together with the corresponding deferred
and corporation tax impact of a $2.1m credit. The
tax credit of $83.1m in relation to the recognition
of US deferred tax assets in 2023 was also
treated as an adjusting item (see NGM A).
Adjusted operating profit for 2024 was, therefore,
$88.0m (2023 – $60.4m restated), adjusted
profit before tax was $75.6m (2023 – $50.0m),
and with the adjusted tax charge (NGM D) of
$19.8m (2023 – $14.1m) and adjusted ETR of
26% (2023 – 28%), adjusted profit for the year
attributable to owners of the parent was $53.3m
(2023 – $34.0m), as shown in NGM B.
Non-GAAP profit measures
In 2024, the Group generated EBITDA of
$126.3m compared to an EBITDA of $102.4m
(restated) in 2023, a year-on-year increase of
23%. EBITDA was driven by strong trading
results within the Group’s OCTG, Subsea and
Advanced Manufacturing product groups, offset
by the lower performance of the Perforating
Systems product group.
The EBITDA margin of the Group has improved
in the year and in 2024 was 12% compared to
11% in 2023. The increase in EBITDA generated
in the year was driven by an increase in the
overall demand for the Group’s diverse product
portfolio, improved facility utilisation, higher
margin orders increasing their weighting in
revenue and the impact of select product price
increases put through last year.
Free cash flow
$
139.7
m
(2023 – $(0.5)m)
Total cash and bank/(borrowings)
$
104.7
m
(2023 – $(0.8)m)
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting PLC
Annual Report and Accounts 2024
63
Group Financial Review
continued
The sales order book comprises orders from
customers yet to be completed, which are
expected to be recognised as revenue in future
periods. The sales order book is determined as
the opening sales order book, plus new orders
booked, less amounts recognised as revenue,
adjusted for any order modifications/variations
and foreign exchange impacts (NGM T).
The Group sales order book peaked during
the year, following the award of the $231m of
KOC orders followed by the OOR orders of $60m.
The Group has been working through these
KOC orders, as well as the Yellowtail order for
ExxonMobil, finishing the year with an order book
of $508.6m at 31 December 2024 compared to
$565.2m at 31 December 2023.
The sales order book at the year-end comprises
3% Perforating Systems (2023 – 2%); 49% OCTG
(2023 – 39%); 26% Advanced Manufacturing
(2023 – 29%); 14% Subsea (2023 – 27%), and
8% Other Manufacturing (2023 – 3%).
Of this order book, approximately 86% is
expected to be recognised as revenue in 2025,
11% during 2026 and 3% from 2027 onwards,
underpinning Hunting’s revenue visibility.
Detailed commentary on the financial performance
of Hunting’s product groups can be found on
pages 44 to 53.
Detailed commentary on the financial performance
of each operating segment can be found on
pages 55 to 59.
Group funding
In October 2024, the Group entered into $300m
of new committed borrowing facilities to finance
the ongoing working capital requirements of the
existing business and to support Hunting’s stated
organic and inorganic growth strategy. The new
funding arrangements comprise a $200m
revolving credit facility (“RCF”) and a $100m term
loan. These facilities have replaced our $150m
Asset Based Lending (“ABL”) facility. The new
facilities are provided by a four-bank syndicate,
expanding the number of banks participating in
our core funding arrangements. Wells Fargo and
HSBC (who participated in our prior facilities and
have acted as joint coordinators in these new
facilities) were joined by First Abu Dhabi Bank
and Emirates NBD. The Company is pleased
to welcome these new banks into our lending
group. The new, upsized facilities and expanded
bank group provides Hunting with committed
liquidity and headroom that will enable us to
pursue Hunting’s stated growth ambition, as
outlined in the Hunting 2030 Strategy at the
Capital Markets Day in September 2023.
A conventional earnings-based covenant
regime is attached to the facilities and includes
a leverage test (being the ratio of total net debt
to adjusted EBITDA not exceeding 3.0:1) and an
interest cover test (being the ratio of consolidated
EBITDA to consolidated net finance charges
not being less than 4.0:1). The RCF has been
arranged with an initial tenor of four years,
expiring on 16 October 2028, with an option that
allows the Company to extend the contracted
maturity date by an additional 12-month term.
Operating segment, product line financial data
and sales order book
The Hunting business is organised and managed by segment but has a consistent product structure
that runs across the organisation.
In order to provide better insight and visibility, management has provided additional information for
revenue and EBITDA by product group, which clarifies the relationship between Hunting’s operating
segments and key product groups.
Segmental operating results
2024
2023
Revenue
$m
EBITDA
i
$m
Adjusted
operating
result
ii
$m
Sales
order
book
$m
Revenue
$m
EBITDA
i
$m
Adjusted
operating
result
ii
$m
Sales
order
book
$m
Hunting Titan
230.3
0.6
(8.3)
16.7
259.2
21.9
12.7
17.6
North America
388.4
62.2
45.5
207.3
374.7
53.8
33.7
288.7
Subsea Technologies
147.1
30.0
25.6
72.5
98.6
13.7
8.0
152.2
EMEA
87.7
(7.9)
(12.4)
50.2
88.2
1.7
(2.3)
29.9
Asia Pacific
240.6
41.4
37.6
186.9
157.6
11.3
8.3
115.8
Inter-segment
elimination
(45.2)
–
–
(25.0)
(49.2)
–
–
(39.0)
1,048.9
126.3
88.0
508.6
929.1
102.4
60.4
565.2
i.
EBITDA is a non-GAAP measure, see NGM C. EBITDA has been restated in 2023 to include the Group’s share of associates’ and joint
venture’s results.
ii.
Results are presented on a statutory basis as reported under UK adopted International Financial Reporting Standards. Adjusted results
reflect adjusting items determined by management, which are described in NGM A.
Results by product group
2024
2023
Revenue
$m
EBITDA
i
$m
Sales
order
book
$m
Revenue
$m
EBITDA
i
$m
Sales
order
book
$m
Perforating Systems
222.7
1.4
16.5
243.8
25.1
12.7
OCTG
463.7
80.2
249.7
395.8
46.3
222.0
Advanced Manufacturing
126.9
11.8
130.0
112.1
10.6
161.5
Subsea
147.1
30.0
72.5
98.6
13.7
152.2
Other Manufacturing
88.5
2.9
39.9
78.8
6.7
16.8
1,048.9
126.3
508.6
929.1
102.4
565.2
i.
EBITDA is a non-GAAP measure, see NGM C. EBITDA has been restated in 2023 to include the Group’s share of associates’ and joint
venture’s results.
Hunting PLC
Annual Report and Accounts 2024
64
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
continued
EBITDA
Hunting reported EBITDA of $126.3m during
2024 (2023 – $102.4m restated), as discussed
above. When adjusted for non-cash share-based
payment charges, the inflow for the year was
$140.4m (2023 – $115.9m restated).
Working capital
During 2024, cash generation improved
as management focused on working capital
efficiency, especially receivables collections,
leading to a working capital inflow of $53.3m
compared to the outflow of $55.0m in 2023.
In the year, a number of working capital
instruments were utilised to shorten the cash
cycle of the KOC contract, including discounting
letters of credit to accelerate payments and
bank acceptance drafts to defer OCTG
supplier payments.
In addition, and following the good progress
in receivables collections, working capital as
a percentage of annualised revenue decreased
to 29%, down from the position at the end of
2023 of 46% (NGM E).
The $100m term loan has been arranged with a
three-year tenor and, pursuant to the conditions
of the facility agreement, was fully drawn on
signing of the facilities. After an initial 12-month
period, the term loan amortises with eight
quarterly repayments of $9.4m (the first such
payment due on 30 September 2025) and a final
$25m repayment on 30 September 2027.
On signing of the new facilities, the Group’s
$150m ABL facility was repaid and cancelled,
with drawings under the new term loan used
in part for this purpose.
It is management’s view that the new facilities
are resilient and will provide a strong foundation
on which the strategic growth aspirations of
the Group may be established.
Further details relating to all the Group’s facilities,
as well as information on the Group’s financial
risk management are disclosed in note 30.
Consideration of the likelihood that the Group
will require access to the facilities, or any other
sources of external funding, to support our
existing operations in the next 12 months are
covered in the going concern assessment
on page 111.
Cash flow
Summary Group cash flow statement
2024
$m
2023
$m
EBITDA
i
(NGM C)
126.3
102.4
Add: share-based payment expense
14.1
13.5
140.4
115.9
Working capital movements (NGM M)
53.3
(55.0)
Lease payments
(8.9)
(10.4)
Net interest and bank fees paid
(12.9)
(7.3)
Net tax paid
(3.5)
(9.1)
Capital investment (NGM N)
(25.3)
(23.7)
Intangible asset investment
(4.8)
(10.9)
Proceeds from asset disposals
1.7
1.9
Net gains on asset disposals
(0.9)
(1.7)
Other operating and non-cash movements (NGM O)
0.6
(0.2)
Free cash flow (NGM P)
139.7
(0.5)
Investment in associates and joint ventures
(0.9)
(1.6)
Dividends received from associates
–
0.6
Dividends paid to equity shareholders
(16.7)
(15.0)
Net purchase of treasury shares
(13.9)
(8.7)
Net cash flow
108.2
(25.2)
Foreign exchange
(2.7)
(0.1)
Movement in total cash and bank/(borrowings) (note 26)
105.5
(25.3)
Opening total cash and bank/(borrowings)
(0.8)
24.5
Closing total cash and bank/(borrowings) (NGM K)
104.7
(0.8)
i.
EBITDA is a non-GAAP measure. EBITDA has been restated in 2023 to include the Group’s share of associates’ and joint venture’s results,
with the reversal included in non-cash movements.
Inventory days moved from 175 days at
31 December 2023 to 123 days at 31 December
2024 (NGM F), reflecting the changing product
mix and the decline in inventory in the Hunting
Titan and Electronics businesses.
Receivables days have decreased to 67 days
compared to 89 days at 31 December 2023
(NGM G) reflecting the shortening of the cash
receipt cycle through the use of accelerated
receivables programmes and discounted letters
of credit. Trade payables days have also
increased, moving from 49 days to 81 days
(NGM H), due to the benefit of the bank
acceptance drafts. Payments made on account
to suppliers have increased from $12.4m in 2023
to $16.8m at the end of 2024 in support of the
KOC orders. Advances from customers have
reduced from $31.0m in 2023 to $12.4m at the
end of 2024, as longer lead time orders are
worked through.
Lease payments
During the year, the Group’s leasing
arrangements gave rise to cash payments
of $8.9m compared to $10.4m in 2023, which
included a one-off payment made to exit a lease
for a surplus property in Canada.
Net finance costs
Net interest and bank fees paid in the year were
higher at $12.9m (2023 – $7.3m), mainly due to
the arrangement fees and legal fees of $4.3m
paid in relation to the new $200m RCF and $100m
term loan, discussed above. These fees were
capitalised on the balance sheet and will amortise
over the expected life of these borrowing facilities.
Hunting PLC
Annual Report and Accounts 2024
65
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
continued
Balance sheet
Summary Group balance sheet
2024
$m
2023
i
$m
Property, plant and equipment
252.8
254.5
Right-of-use assets
28.3
26.2
Goodwill
45.1
154.4
Other intangible assets
39.4
40.8
Investments in associates and joint ventures
9.2
20.5
Asset held for sale
12.1
–
Working capital (NGM E)
355.5
415.9
Taxation (current and deferred)
98.0
84.8
Provisions
(14.3)
(16.6)
Other net assets (NGM I)
5.5
3.0
Capital employed (NGM J)
831.6
983.5
Total cash and bank/(borrowings) (NGM K)
104.7
(0.8)
Lease liabilities
(30.1)
(28.7)
Shareholder loan from non-controlling interest
(3.9)
(3.9)
Net cash (debt) (note 26)
70.7
(33.4)
Net assets
902.3
950.1
i.
2023 has been restated to reflect the import tax provision of $9.1m and the corresponding increase in deferred tax of $2.1m (see note 41).
Taxation
Net tax payments of $3.5m in 2024 were notably
lower than the prior year of $9.1m, reflecting the
change in jurisdictions where profits have arisen
and the utilisation of historic tax losses offsetting
taxable profits.
Purchases of property, plant and equipment
Purchases of property, plant and equipment in
the year totalled $25.3m in 2024 and were in line
with 2023 totalling $23.7m. Hunting Titan spent
$3.3m, with $1.9m in relation to four new lathes
and robots installed at the Pampa facility for
Tandem production; $10.3m was in North
America, with $2.6m spent by Electronics on
a new printed circuit board manufacturing line
and $4.2m spent by US Manufacturing on new
machines and upgrades; $4.3m was in Subsea
Technologies, with $2.2m on a long bed lathe;
$2.0m was in EMEA; $4.7m by Asia Pacific,
to support the KOC orders in Wuxi, China;
and $0.7m centrally.
Purchases of intangible assets
Intangible asset investments in the year were
$4.8m (2023 – $10.9m), with $1.9m on software
and global data centres, $0.3m on the sales,
manufacturing and distribution rights for
CRA-Tubulars’ titanium-lined carbon fibre tubing,
and $2.6m by Hunting Titan on internally
generated technology.
Asset disposals
Proceeds from the disposal of assets totalled
$1.7m (2023 – $1.9m), and gains on asset
disposals of $0.9m (2023 – $1.7m) relate to gains
on the disposal of property, plant and equipment.
Free cash flow
The resulting free cash inflow was $139.7m
in the year, compared to a free cash outflow
in 2023 of $0.5m.
Investments in associates and joint ventures
In 2024, the Group made a further investment
in Cumberland Additive of $0.9m (2023 – $1.6m),
thereby increasing Hunting’s investment to 30.7%
(2023 – 30.4%).
Dividends
There were increased returns to shareholders
in 2024, with dividends paid to Hunting PLC
shareholders amounting to $16.7m (2023 – $15.0m),
representing an increase of 11% in the year.
Purchases of treasury shares
During the year, 2.9m Ordinary shares
(2023 – 2.9m) were purchased as treasury
shares through Hunting’s Employee Benefit Trust
for a total consideration of $14.2m (2023 – $9.0m).
These shares will be used to satisfy future
awards under the Group’s share award
programme. The purchase of treasury shares
was offset by proceeds received on the disposal
of treasury shares of $0.3m (2023 – $0.3m).
Net cash flow
Overall, in the year, the Group recorded a net
cash inflow of $108.2m (2023 – $25.2m outflow),
which was predominantly driven by the release
of cash from working capital, as noted above.
As a result of the above cash inflows and
$2.7m of adverse foreign exchange movements
(2023 – $0.1m), total cash and bank/(borrowings)
increased from the borrowing position of $0.8m
(NGM K) at 31 December 2023 to a net cash
position of $104.7m at the year-end.
Property, plant and equipment
Property, plant and equipment was $252.8m
at 31 December 2024 (2023 – $254.5m) following
additions of $25.2m and other items of $1.1m,
offset by depreciation of $25.2m, and disposals
of $2.8m. Capital investment during the year was
made to support the growth agenda.
Right-of-use assets
Right-of-use assets have slightly increased and
totalled $28.3m at 31 December 2024 compared
to $26.2m at 31 December 2023. Additions in the
year of $2.7m and lease modifications of $7.0m
were offset by depreciation of $7.2m and adverse
foreign exchange movements of $0.4m.
Goodwill
Following the annual carrying value review of
goodwill, given the prevailing trading conditions
and future expectations for the Hunting Titan
CGU, an impairment charge of $109.1m was
recognised. The goodwill balance at the year-end
was $45.1m compared to $154.4m in 2023
following the impairment charge and adverse
foreign exchange movements of $0.2m. See note
15 for further details.
Other intangible assets
Other intangible assets were $39.4m at
31 December 2024 compared to $40.8m at the
2023 year-end. Amortisation charges of $5.9m
and adverse foreign exchange movements of
$0.3m were offset by additions of $4.8m,
primarily related to the capitalisation of
technology and IT data centres.
Hunting PLC
Annual Report and Accounts 2024
66
Strategic Report
Corporate Governance
Financial Statements
Other Information
Group Financial Review
continued
Trade, contract and other payables have
increased significantly to $210.2m from $164.0m,
as payments for the purchases of the Chinese
pipe in relation to the large KOC orders were
deferred through the use of bank acceptance
drafts, which are due to be settled six months
after receipt of the materials beginning in Q1 2025.
Taxation
Net tax assets on the balance sheet were
$98.0m at 31 December 2024 compared to
$84.8m (restated) in the prior year, and reflect
the deferred tax credit of $27.8m arising on the
goodwill impairment charge and the US deferred
tax assets recognised in 2023 as profit
expectations in the region improved.
Provisions
As noted above, provisions for the year ended
31 December 2023 have been restated to
include a provision for import tax of $9.1m that
was identified in July 2024. The restated amount
for provisions at the 2023 year-end was $16.6m.
Provisions have reduced by $2.3m in the year
to $14.3m at 31 December 2024.
Capital employed
As a result of the above changes, capital
employed in the Group decreased by $151.9m
to $831.6m. The return on average capital
employed was 9% in 2024 compared to 6%
in 2023 (NGM S).
Net cash (debt)
The Company has moved from a net debt position
(note 26) at 31 December 2023 of $33.4m, to a
net cash position of $70.7m at 31 December 2024,
a significant improvement due to strong cash
generation in the second half of the year and net
working capital inflows, reflecting strong cash
collections and good management of the working
capital cycle through the use of accelerated
receivables programmes and discounted letters
of credit in relation to the KOC order. Net cash
includes $30.1m (2023 – $28.7m) of lease liabilities,
which have increased by $1.4m during the year
due to new leases of $2.6m, lease modifications
of $7.0m, and an interest charge of $1.4m offset
by lease payments of $8.9m and foreign
exchange movements of $0.7m.
Net assets
Net assets have, therefore, decreased by $47.8m
to $902.3m at 31 December 2024, compared
to $950.1m (restated) at the 2023 year-end.
This has been driven by the loss in the year of
$25.5m, dividends paid in the year of $16.7m to
equity shareholders of Hunting PLC, and the net
purchase of treasury shares of $13.9m offset by
foreign exchange and other items totalling $8.3m.
Dividends
A Final Dividend of 6.0 cents per share
(2023 – 5.0 cents) has been proposed by the
Board, making the total dividends declared for
the year ending 31 December 2024 11.5 cents
per share (2023 – 10.0 cents per share), an
increase of 15% over 2023. Subject to shareholder
approval at the 2025 Annual General Meeting,
the Final Dividend will be paid on 9 May 2025.
This distribution will amount to an estimated
cash return of $9.5m (2023 – $8.0m).
The dividend will be paid in Sterling with the
Sterling value of the dividend payable per share
fixed and announced approximately two weeks
prior to the payment date, based on the average
spot exchange rate over the three business days
preceding the announcement date. The dividend
will be paid to those shareholders on the register
at the close of business on 11 April 2025, with
an ex-dividend date of 10 April 2025.
Bruce Ferguson
Finance Director
6 March 2025
Investments in associates and joint ventures
Investments in associates and joint ventures have
decreased by $11.3m, reflecting the reclassification
of the investment in Rival Downhole Tools (“Rival”)
as an asset held for sale and the Group’s share
of associates’ and joint venture’s net losses for
the year of $0.1m (2023 – $0.6m), offset by the
additional investment of $0.9m in Cumberland
Additive. The net loss for the year is attributable
to the loss of $1.0m by Rival and $1.4m by
Cumberland Additive, offset by the share
of profits in the Indian JV of $2.3m.
Asset held for sale
The Group’s 23% investment in Rival Downhole
Tools of $12.1m was classified as an asset held
for sale at the year-end due to the active marketing
and sales process that was underway. The
investment was sold for $13.1m on 3 March 2025.
Working capital
Working capital (NGM E) decreased by $60.4m
to $355.5m, despite the growth in activity in the
business. Inventory levels decreased by $25.1m
to $303.3m as the sales order book was worked
through; however, inventory provision levels have
increased by $4.6m reflecting some additional
provisions in Hunting Titan and EMEA.
Trade, contract and other receivables have
increased in 2024 to $262.4m from $251.5m
in line with the increase in revenue; however,
the Company has discounted some receivables
in relation to the KOC orders to manage the
extended working capital cycle for these
large orders.
Hunting PLC
Annual Report and Accounts 2024
67
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
Hunting is committed to operating responsibly,
ethically and sustainably to create long-term value.
Our management team embed these principles into our
strategy and culture. We are committed to relevant and
transparent disclosures and continue to improve our
ESG-related reporting procedures, aligning these with
current and new disclosure regulations and standards
as well as the needs of our stakeholders.
In 2024, we have expanded our scope 3 reporting, which
provides further insight to our stakeholders on our supply
chain emissions. This enables management to focus on
long-term reduction initiatives where our most concentrated
emission sources are derived, for example, from our raw
material feedstocks.
While our focus on carbon emissions and
climate impact are fairly new areas for us, other
strategic areas of focus such as HSE and Quality
Assurance have been embedded in our culture
for many decades. Keeping our people safe,
while providing strongly assured products have
contributed to our success in the past, and will
do so for many years to come.
Jim Johnson
Chief Executive
Hunting PLC
Annual Report and Accounts 2024
68
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
ESG and sustainability at a glance
Governance
People and society
Responsible products
The environment
Continued focus on Board
accountability for ESG
Ethics and
Sustainability
Committee met twice
in 2024 (2023 – twice)
Safety remains a priority
Zero
fatalities
(2023 – zero)
25
recordable incidents
(2023 – 24)
3.15
near-miss frequency rate (employees)
(2023 – 2.69)
Improved levels of
employee engagement
76%
of our facilities are
compliant with ISO 9001:2015,
a globally recognised standard
for quality management
Scope 1 and 2
GHG data
assurance
being
completed for
a second year.
To review our assurance
report please see
www.huntingplc.com
The 2023 employee engagement
survey recorded an engagement
score of 42%, compared to 36%
recorded in 2019.
Board diversity
50%
of the Board are women*
(29 February 2024 – 44%)
*At 6 March 2025
Workforce diversity
25%
of workforce are women
(2023 – 25%)
ISO 14001:2015
Our Quality Management
System is aligned with
ISO 14001:2015
(Environmental management
system) with 68% of facilities
accredited
Waste and
environmental
impact:
Zero environmental
fines or non-
compliance
environmental
incidents (2023 – zero)
Senior management diversity
32%
of senior management
are women (2023 – 32%)
Voluntary turnover rate
10.3%
down from 13.5% in 2023
We also align our Quality
Management System
with ISO 50001:2018 the
international standard
for designing, implementing,
and maintaining an energy
management system
Hunting PLC
Annual Report and Accounts 2024
69
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Our contribution to the SDGs
The United Nations’ 2030 Agenda
for Sustainable Development
provides a shared blueprint for
peace and prosperity for people and
the planet, now and into the future.
At its heart are the 17 Sustainability
Development Goals (“SDGs”),
which are an urgent call for action
by all countries – developed and
developing – in a global
partnership. These goals recognise
that ending poverty and other
deprivations must go hand-in-hand
with strategies that improve health
and education, reduce inequality,
and spur economic growth –
while tackling climate change and
working to preserve our oceans
and forests.
At Hunting, we believe that, no matter how small,
every contribution can have a positive impact on
society and the environment. We believe we can
contribute to achieving these goals.
We have identified nine SDGs to which we can
make a positive contribution.
Good health and well-being
Affordable and clean energy
Responsible consumption
and production
We are responsible for the health and safety
of those who use or are affected by our services
and equipment. Through the systems we have
in place, the training, support and access to
healthcare we provide, we believe we can
address employee and community health and
build on and implement safety-enhancing features
in the work we do. The health and safety of our
employees is of the utmost importance to us.
Through the technology, products and services
we provide to the energy sector, we assist in the
safe and reliable extraction of resources, while
minimising environmental impacts. To this end,
we have a number of readily available technologies
and products to supply to the tangential
geothermal and carbon capture and storage
markets in the emerging energy transition sector.
As a provider of products and services to the
energy sector we aim to limit the consumption of
resources, by responsibly sourcing the materials
we use and increase recycling and integration
into the circular economy. We recycle where
possible and ensure all other waste is removed
in a safe and responsible manner so that it does
the least environmental damage possible.
Gender equality
Decent work and economic
growth
Climate action
While operating in 11 countries, we strive to
ensure that all workplaces and decision-making
processes are free from discrimination and that
all hiring and promotions are based on merit. We
are focused on improving gender representation
in our business, as well as seeking to promote
diversity on our Board and within the senior
leadership team.
We have a diverse and skilled workforce.
We place great emphasis on attracting and
retaining talented employees, ensuring that
they are engaged and able to develop to their
full potential. Protocols are in place to identify
and guard against modern slavery and
human trafficking.
Climate change is a global challenge and a risk
to our business, and we can make the most
positive contribution towards climate change
mitigation by improving our energy efficiency
mix and reducing our greenhouse gas emissions.
We also recognise the need to understand and
plan for climate change opportunities, impacts
and transition.
Clean water and sanitation
Industry, innovation and
infrastructure
Partnership for the goals
We understand that water is a valuable and
restricted resource especially in some of the
regions in which we operate. We oversee and
manage our water usage by protecting water
resources, and guarding against potentially
hazardous and polluting emissions entering
water bodies.
We support inclusive and sustainable
industrialisation. We produce and work with
innovative technology that is safe and efficient.
We recognise that the achievement of the
SDGs requires partnership and collaboration.
Through Hunting’s TEK-HUB™, we seek to
attract innovative individuals and companies
to develop technology partnerships. By working
in true collaboration, we will bring innovations
to market under licence. An example of this
is the Organic Oil Recovery technology that
has achieved commercialisation in the year.
Hunting PLC
Annual Report and Accounts 2024
70
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Focus on material issues
In 2023, Hunting completed a materiality
assessment on its ESG framework and
disclosures. We adopt a “double materiality”
approach, which considers:
• Impact materiality, that is the actual or
potential, positive or negative impacts of the
business on people or our environments over
the short, medium or long term; and
• Financial materiality, that is whether an issue
may be material from a financial perspective,
and could potentially trigger financial effects
on Hunting, either as a risk or opportunity,
in the short, medium or long term.
Our process involves:
• An assessment of new and impending
reporting disclosure regulations and standards;
a review of peer reporting; and an analysis
of feedback from ratings agencies;
• Interviews undertaken with senior executives
across the Group in core disciplines:
compliance; investor relations; human
resources; health, safety, environment
and quality; IT; and customer engagement
and marketing;
• We undertook an online survey of key
executives to determine their assessment of
the issues through the lenses of impact and
financial materiality; and
• The survey resulted in the identification
and ranking of issues. We have focused
on the top 14 issues, which were reviewed
by the Executive Committee prior to their
being submitted to the Board for consideration
and approval.
These issues are illustrated on the right, in
alignment with our sustainability framework. The
materiality assessment will be repeated in 2025.
The environment
• Ensuring environmental compliance
and good practice
• Pursuing the responsible transition,
and growth in, less carbon-intensive
sectors
Responsible products
• Ensuring the quality and consistency
of our products
• Ensuring customer and market
responsiveness
• Delivering innovation
People and society
• Protecting the health and safety
of our customers
• Protecting the health, safety and
well-being of employees
• Promoting and ensuring employee
engagement
Governance and
our ethical behaviour
• Safeguarding cyber security
• Protecting and enhancing
our reputation
• Complying with regulations
• Promoting business ethics and
anti-bribery and corruption
• Assuring due diligence in our
supply chain
• Promoting Board leadership
and accountability for ESG
Material issues – adopting a “double materiality” approach
Our ESG disclosures
• We make an annual submission to the Carbon
Disclosure Project, which can be reviewed at
www.cdp.net.
• We have adopted and report against the Task
Force on Climate-related Financial Disclosures
(“TCFD”) standard. See pages 88 to 101.
• We report in line with the SASB standards
most relevant to our business: SASB Oil & Gas
– Services and Industrial Machinery & Goods
standards. Our SASB content index can be
found on pages 86 and 87.
• Our annual Modern Slavery Act Statement,
which is approved by the Board, is available
on our website at www.huntingplc.com.
• As a publicly-listed company providing
products and services primarily to the oil
and gas sector, up to 2024 we disclosed a
Payments made to Governments statement
on a country-by-country and project-by-project
basis under the Payments to Government
Regulation 2015. This is available at
www.huntingplc.com.
Our ESG assurance
The Group assures a number of ESG-related
data points, including QAHSE audits and also
scope 1 and 2 data audits, with our 2023 scope
1 and 2 carbon emissions data assured during
the year against the ISO 14064-3 standard,
with no material issues identified.
Our ESG materiality
assessment
We have identified four important areas of
focus to ensure our environmental, social and
governance initiatives remain relevant. The
Group’s senior leadership team contributes to the
development and enhancement of these areas,
with the executive Directors incentivised to deliver
continuous improvement over the medium term.
Hunting PLC
Annual Report and Accounts 2024
71
Strategic Report
Corporate Governance
Financial Statements
Other Information
Our ambition
Responsibly creating long-term,
sustainable value
G
O
V
E
R
N
A
N
C
E
A
N
D
O
U
R
P
E
O
P
L
E
A
N
D
S
O
C
I
E
T
Y
R
E
S
P
O
N
S
I
B
L
E
P
R
O
D
U
C
T
S
T
H
E
E
N
V
I
R
O
N
M
E
N
T
Our commitment
Strong governance along with
ethical and transparent conduct in
our business and our supply chain
Our commitment
Delivering innovative, high-quality
and reliable products
Our commitment
Ensuring the safety and
health of employees and
customers, engaging
with and supporting
our people and the
communities around us
Our commitment
Sound environmental
stewardship and
a responsible
transition to a lower
carbon economy
E
T
H
I
C
A
L
BE
H
A
V
I
O
U
R
ESG and Sustainability
continued
Our sustainability framework
We continue to refine and simplify our ESG
framework, aligning this with the outcomes
of our materiality process.
Our prevailing ESG ambition is to create
long-term, sustainable value and this is applied
in four areas of focus:
• Governance and our ethical behaviour;
• People and society;
• Responsible products; and
• The environment.
Our commitments remain unchanged and are
aligned with each of these focus areas, which
form the basis of our ongoing disclosure. For
each focus area, we indicate the relevant SDG.
Hunting PLC
Annual Report and Accounts 2024
72
Strategic Report
Corporate Governance
Financial Statements
Other Information
Expanding our emissions data collection
1%
1%
4%
2%
2%
90%
Scope 3 inventories – 534,835 tonnes CO
2
e
Scope 3 pillars
Pillar 1a: Purchased goods and services (products)
Pillar 1b: Purchased goods and services
(non-product)
Pillar 3: Fuel and energy-related activities
Pillar 4: Upstream transportation and distribution
Pillar 6: Business travel
Other: Pillars 2, 5, 7, 9, 12, 13 and 15
In 2023, the Ethics and Sustainability Committee
approved the appointment of the Carbon Trust
as an independent specialist adviser to assist in
determining our carbon inventories, with a focus
on scope 3 emissions. A five-year phased project
began with the initial aim of establishing an
emissions baseline by the end of 2025, attaining
assurance against ISO 14064-3 in 2026, and
publishing a Net Zero plan by 2027.
The scope 3 emissions data collection project
initially comprised the Hunting Titan operating
segment as a proxy for the Group’s scope 3
inventories for 2023, with the Carbon Trust
calculating Hunting Titan’s scope 3 footprint
based on its 2022 data. The methodology used
was based on the GHG Protocol Corporate Value
Chain (scope 3) Standard. Hunting Titan reported
on eight of the 15 category emission levels for
scope 3, with the scope 3 emissions calculated
to be c.95,000 tonnes CO
2
e. This figure was
extrapolated by Hunting using Hunting Titan’s
cost of sales as a proportion of the rest of the
Group’s cost of sales resulting in an estimated
total scope 3 footprint of c.353,000 tonnes CO
2
e
for 2023.
In 2024, this approach was extended to include
scope 3 emissions data from the Subsea
Technologies, EMEA, and Asia Pacific operating
segments in addition to Hunting Titan. This aimed
to build on the work done in the previous year with
Hunting Titan and also to improve the accuracy
of the footprint data. In 2024, the Group gathered
data on 11 out of the 15 category emission levels
for scope 3. The data reviewed covered the nine
months to 30 September 2024 and were scaled
up to a full year to 31 December 2024.
The initial challenges for our scope 3 project
focused on what we should measure, how to
identify and source relevant data from existing
records, training employees to recognise and
extract this data, and accurately reporting it in
a format that assisted the Carbon Trust to identify
products, materials, quantities, weights and
measures. Where detailed data was not available,
financial (spend) data was used as an alternative.
The results identified that category 1a emissions
(purchased goods and services – products)
accounted for c.90% of total scope 3 emissions.
Management are now assessing the potential to
assure this category as part of the drive to fully
assure the Group’s scope 1, 2 and 3 emissions
inventories. The total scaled scope 3 emissions
for 2024 were assessed at 351,446 tonnes CO
2
e.
This result was then extrapolated by Hunting
using relative cost of sales for the four operating
segments compared to the Group total, and the
total scope 3 footprint for 2024 was determined
to be 534,835 tonnes CO
2
e.
Next steps
• In 2025, data collection will include the
North America operating segment to complete
scope 3 reporting for the whole of the Group
and set a scope 3 emissions baseline.
• Plan new data collection procedures for
information held within our ERP system.
• Produce standard emissions data reports
from our business intelligence platforms.
• Allocate additional resources to include further
scope 3 training for staff from various
departments including procurement, finance,
transport, human resources, sales, IT, HSE,
and governance.
• Collaborate closely with our external suppliers,
customers and business partners across our
value chain.
• In 2026, we will follow the science-based
target setting methodology subject to the
release of the Science Based Targets initiative’s
oil and gas sector guidance.
Hunting PLC
Annual Report and Accounts 2024
73
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
AREA
OUR COMMITMENTS
MATERIAL ISSUES ADDRESSED
WHAT WE MEASURE
PERFORMANCE IN 2024
Governance
and our ethical
behaviour
To demonstrate Board-level
ownership and accountability
for sustainability issues
To set and deliver long-term
sustainability goals
To link key ESG metrics to
the remuneration of the senior
leadership team
To foster mutually beneficial
partnerships
• Safeguarding cyber security
• Protecting and enhancing
our reputation
• Promoting business ethics
and anti-bribery and corruption
• Promoting Board leadership
and accountability for ESG
• Number of employees that completed
cyber security training
• SafeCall whistleblowing reports
• Number of employees that completed
Code of Conduct training
• Total number of bribery-related fines
• Total value of bribery-related fines
• ESG metrics linked to remuneration and
included in short- and long-term
incentive plans
• 1,370 employees (2023 – 1,119 employees)
• Three reports (2023 – six reports)
• 2,091 employees (2023 – 285 employees,
launched in Q4 2023)
• Zero (2023 – zero)
• $nil (2023 – $nil)
• See the Remuneration Committee Report on
page 154
People and society
Operating safely
• Protecting the health and safety
of our customers
• Protecting the health, safety and
well-being of our employees
• Employee fatalities
• Contractor fatalities
• Total fatalities
• Total recordable incidents – employees
• Total recordable incident rate –
employees
• Near-miss incidents – employees
• Near-miss incidents – contractors
• Near-miss incidents – total
• Near-miss frequency rate – employees
• Near-miss frequency rate – contractors
• Near-miss frequency rate – total
• Lost-time incidents – employees
• Lost-time incidents – contractors
• Lost-time incidents – total
• Lost-time days – employees
• Lost-time incident rate – employees
• Vehicle incidents – employees
• Vehicle incidents – contractors
• Vehicle incidents – total
• Total number of HSE fines
• Total value of HSE fines
• Zero (2023 – zero)
• Zero (2023 – zero)
• Zero (2023 – zero)
• 25 (2023 – 24)
• 0.93 (2023 – 0.91)
• 85 (2023 – 71)
• 3 (2023 – 15)
• 88 (2023 – 86)
• 3.15 (2023 – 2.69)
• 0.11 (2023 – 0.57)
• 3.26 (2023 – 3.26)
• 7 (2023 – 6)
• 0 (2023 – 0)
• 7 (2023 – 6)
• 214 days (2023 – 267 days)
• 0.26 (2023 – 0.23)
• 4 (2023 – 0)
• 0 (2023 – 0)
• 4 (2023 – 0)
• 1 (2023 – 0)
• $9k (2023 – $nil)
Progress against our commitments
Hunting PLC
Annual Report and Accounts 2024
74
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
AREA
OUR COMMITMENTS
MATERIAL ISSUES ADDRESSED
WHAT WE MEASURE
PERFORMANCE IN 2024
People and society
continued
Supporting and developing our people
Supporting communities around us
• Protecting the health and safety
of our customers
• Protecting the health, safety and
well-being of our employees
• Promoting and ensuring
employee engagement
• Total HSE training hours
• HSE training hours per employee
• Voluntary turnover
• Representation of women on the Board,
in senior management, and in the
workforce
• Engagement level
• Charitable donations
• 68,834 hours (2023 – 48,013 hours)
• 28 hours (2023 – 20 hours)
• 10.3% (2023 – 13.5%)
• 50% women on the Board at 6 March 2025
(2024 – 44%) ; 32% women in senior
management (2023 – 32%); 25% women
in workforce (2023 – 25%)
• 42% engagement score in 2023 (2019 – 36%)
• $70k paid in charitable donations (2023 – $81k)
Responsible
products
Delivering high-quality products
and services
• Ensuring the quality and consistency
of our products
• Ensuring customer and market
responsiveness
• Delivering innovation
• Internal manufacturing reject rate
• % of shipped goods returned
• % of facilities accredited to
ISO 9001:2015 (Quality management
systems)
• % of facilities accredited to
ISO 14001:2015 (Environmental
management systems)
• Non-oil and gas revenue
• Research and development expenditure
• 0.31% (2023 – 0.20%)
• 0.0006% (2023 – 0.0006%)
• 76% (2023 – 78%)
• 68% (2023 – 40%)
• $75.1m (2023 – $75.9m)
• $8.8m (2023 – $6.9m)
The environment
Managing our environmental
performance and mitigating our
impacts
• Ensuring environmental compliance
and good practice
• Pursuing the responsible transition
to and growth of our business in less
carbon-intensive sectors
• Environmental non-compliance incidents
• Significant environmental
non-compliance incidents
• Number of environmental fines
• Value of significant environmental fines
• Total value of all environmental fines
• Total scope 1, 2 and 3 GHG emissions
• CO
2
e intensity factor
• Water consumption
• Metal recycling
• Wood recycling
• Plastic recycling
• Zero (2023 – zero)
• Zero (2023 – zero)
• Zero (2023 – zero)
• $nil (2023 – $nil)
• $nil (2023 – $nil)
• 557,068 tonnes CO
2
e
(2023 – 375,945 tonnes CO
2
e)
• 21.2kg/$k revenue (2023 – 24.3kg/$k revenue)
• 90,411m
3
(2023 – 91,746m
3
)
• 2,967 tonnes (2023 – 2,827 tonnes)
• 85 tonnes (2023 – 75 tonnes)
• 30 tonnes (2023 – 23 tonnes)
Hunting PLC
Annual Report and Accounts 2024
75
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Our commitments
To demonstrate Board-level ownership
and accountability for sustainability issues
All the Directors attend the Ethics and
Sustainability Committee meetings and challenge
management on the scope and progress of
ESG issues.
To set and deliver long-term sustainability goals
In 2023, the Group exceeded its long-range
carbon intensity goal and in March 2025 the
Directors announced a new long-term target of
achieving an intensity factor of 20 or less, which
equates to 33% lower than our 2023 target.
To link key ESG metrics to the remuneration
of the senior leadership team
The 2024 Hunting Performance Share Plan
incorporates medium-term Safety and Quality
goals to ensure management remains focused
on delivering safe products and a safe
workplace. The 2024 Annual Bonus to the
executive Directors included carbon emission
and intensity targets, which were partially met.
To foster mutually beneficial partnerships
We foster sound and positive partnerships with
our customers and suppliers, industry bodies,
and regulators in the regions in which we operate.
We respect human rights and believe we create
an open, fair and safe environment for all.
SDGs
Material issues
Safeguarding cyber security
Protecting and enhancing our reputation
Complying with regulations
Promoting business ethics and anti-bribery
and corruption
Assuring due diligence in our supply chain
Promoting Board leadership and accountability
for ESG
Ethical behaviour
We promote honest, ethical and transparent
conduct in our business and our supply chain.
We foster sound and positive partnerships with
our customers, suppliers, industry bodies, and
regulators in the regions in which we operate.
Governance and
our ethical behaviour
Fostering mutually beneficial partnerships
Hunting PLC
Annual Report and Accounts 2024
76
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Governance
The Directors have delegated key ESG
and Sustainability matters to the Ethics
and Sustainability Committee.
Meetings of the Committee are attended
by the Group’s Director for QAHSE, Hunting’s
Chief HR Officer, General Counsel and members
of the central compliance function who oversee
carbon and climate reporting.
The Committee has stewardship of the Group’s
strategic approach to ESG matters. The Committee
monitors and guides those matters that are
both financially material to the value of the
Group’s businesses over time, and those that
are important to our markets, our employees,
other stakeholders and the environment.
The Committee met on two occasions in 2024.
For more details see pages 133 to 135.
The management of ESG matters is led by the
Chief Executive and the Executive Committee,
supported by an ESG Steering Committee and
TCFD Working Group.
Business ethics
Hunting’s Code of Conduct (the “Code”)
contains policies and procedures covering
how the Group conducts business, internally
and externally, and maintains its relationships
with business partners.
The Code of Conduct includes operating
guidelines and details of key ethics policies in
place across the Group, including anti-bribery
and corruption and modern slavery procedures,
with a parallel training course in place to ensure
education and awareness of and compliance
with the Hunting Code of Conduct.
All employees and business partners are
provided with a copy of the Code and are
expected to adhere to it.
In September 2024, we rolled out a new Code
of Conduct training course, which all employees
are required to complete, with 285 employees
completing the training in 2023 and 2,091 of
our employees completing the course in 2024.
Module two of the new course is due to be
rolled out in 2025.
Human rights
We are committed to upholding the human
rights of all our stakeholders, we achieve this by
providing a safe and positive working environment
for all employees and contractors; respecting the
rights of each individual, with a zero tolerance
approach to any form of discrimination,
harassment or bullying; providing training
and development programmes to our global
workforce; respecting and upholding the rights
of employees to engage in collective bargaining
where relevant; and acting with honesty,
transparency and integrity in all of our dealings
with our workforce, and anyone else who is
in contact with and reliant on our business.
We have a zero tolerance stance on slavery and
trafficking, and we expect the same from our
business and trading partners. We demonstrate
our compliance with corporate regulations
through our Ethical Employment and Trading
Policy; our Modern Slavery, Human Trafficking
Transparency Statement; and our Ethics
Reporting Procedures.
Cyber security
As we become more reliant on globally-connected
IT infrastructure, our business is more vulnerable
to cyber threats and our cyber risk profile
increases. We safeguard against these threats
by training employees and by having in place the
necessary processes and procedures to protect
our systems and data from cyber attacks.
We also recognise that we are custodians
of data, on behalf of our employees, customers
and suppliers, and that we must protect their
information in order to secure and maintain trust.
During the year, we engaged a third party
to assist in the development of a cyber attack
response plan and enhanced employee cyber
security training, with 1,370 employees with
access to computers completing cyber security
training, compared to 1,119 in 2023.
The Group’s IT policies, systems and training
are managed by the Chief IT Officer, who reports
annually to the Directors on progress made in
the year, as well as quarterly reporting to the
Executive Committee.
Our approach is proactive and precautionary
and we engage only with Tier 1 suppliers.
Export and sanctions compliance
With the increasing complexity of international
trade, the Group has enhanced its due diligence
of customers and suppliers, which includes
end-user declarations and export checks.
Given the geopolitical volatility seen in recent years,
the risk of the diversion of goods to higher risk
countries or companies, or dual-use of products
such as Hunting’s perforating product lines,
the Group has increased its review and internal
checking, improved training and awareness
of these risks and continued to adopt adequate
procedures to mitigate the risks in this area.
Hunting avoids any form of sanctions risk and
constantly reviews current laws and regulations
applied by the EU, UK and US to ensure we
remain compliant. The Group uses the services
of third-party legal experts to ensure key contracts
and tenders are reviewed from the perspective
of sanctions risk.
Whistleblowing
The Group received three reports from the
SafeCall system in the year (2023 – six reports)
and an additional report outside of the SafeCall
service. All SafeCall reports related to HR
matters, which were investigated and resolved
by Hunting’s Chief HR Officer. All reports are
reviewed by the Senior Independent Director,
with a summary also reported to the Board,
via the Ethics and Sustainability Committee.
Hunting PLC
Annual Report and Accounts 2024
77
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Our commitments
Operating safely
We seek to achieve and maintain the highest
standards of safety for our employees,
contractors, customers, suppliers and the public.
We constantly monitor the quality assurance and
health and safety procedures across the Group.
Supporting and developing our people
We want to attract and retain a highly skilled
workforce. We provide training and development
to our employees to help them sustain and
grow their careers. We promote diversity and
workplaces that are free from prejudice. HR
reports provide the information the Board needs
to review key metrics relating to our people.
Supporting communities around us
We make a positive contribution to the
communities in which we operate.
Material issues
Protecting the health and safety of our customers
Protecting the health, safety and well-being
of our employees
Promoting and ensuring employee engagement
SDGs
Anti-bribery and corruption
We endeavour to transact business in a
transparent and fair manner, and to this end
we have strong anti-bribery policies and training
across the Group. The Directors have made clear
that there is a zero tolerance to bribery, including
not paying facilitation payments in any form,
while working with public officials in a transparent
manner. During the year, the Group did not incur
any bribery-related fines. It is also the Group’s
policy not to make political or lobbying donations.
Modern slavery
Protecting our people from modern slavery and
trafficking is another area of focus for our human
resources functions. We review all employment
documentation to ensure we avoid trafficking or
forced labour and ensure pay is provided directly
to the individual. Hunting’s Code of Conduct
training includes a module on identifying those
at risk of modern slavery and the procedures
to follow.
The Group’s central compliance function, overseen
by Hunting’s Company Secretary manages
anti-bribery and modern slavery compliance.
Our people
At 31 December 2024, the Group employed
2,367 people across our global operations
(2023 – 2,420 people). Of these, 37% are
employed in our North America operations,
22% at Hunting Titan, 16% in Asia Pacific,
12% in EMEA, 9% at Subsea Technologies,
and 4% in regional headquarters. Our people
are at the heart of our business, and ensuring
the safety, health and well-being of every person
employed by the Company, or associated with
our business, is a priority. We understand that
people are essential to the development of our
business and success as a company.
People and society
Looking after our people
Hunting PLC
Annual Report and Accounts 2024
78
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Health and safety
Our health, safety and environment (“HSE”)
goals of “No Accidents, No Harm to People”,
and “No Damage to the Environment” continues
to drive our HSE agenda and support our pursuit
of high standards of performance.
Our HSE policy guides the way we work,
putting safety first. We place great emphasis
on ingraining HSE best practice in our culture
and employ rigorous health and safety practices.
Our approach includes:
• Regular audit and maintenance reviews
of facilities;
• Appropriate training and education of all staff;
• Accreditation and alignment of long-standing
internal programmes with internationally
recognised standards; and
• Regular reporting to the Board and Ethics
and Sustainability Committee.
Our Group Health, Safety and Environmental
Global Manual is accredited to ISO 14001:
Environmental Management System, and was
compiled in accordance with the ISO 45001:
Occupational Health and Safety Management
System. This manual specifies requirements for
HSE training, the need for protective equipment,
and procedures and practices associated with
high-risk operations.
As a minimum, we comply with local regulatory
requirements, but we strive for more with each
local business having a tailored health and safety
policy to suit their particular working environment.
To ensure both regulatory compliance and
achievement of our own high internal standards,
climate, noise and air quality testing is regularly
completed at our operations.
We are pleased to report that there were
no fatalities in the Group during 2024 or 2023.
Our target is also to achieve zero recordable
incidents. While this was not achieved in 2024,
our overall safety performance, as measured
by the total recordable incident rate, was
comparable to last year.
Total recordable incident rate
#
0.93
2024
2023
0.91
2022
0.97
Recordable incidents in 2024 rose to 25
(2023 – 24), while the total recordable incident
rate increased slightly to 0.93 (2023 – 0.91).
The number of hours worked increased from 5.3m
hours in 2023 to 5.4m hours during the year.
The average number of employees increased
by 3% in the year, while the number of parts
manufactured decreased from 23.0m to 15.6m,
as volumes declined within our Perforating
Systems business, partially offset by the increase
in production of OCTG and Subsea orders, which
require fewer parts, being completed in the year.
Although the total recordable incident rate
increased in the year, the Company is significantly
below the industry average of 4.0 (2023 – 4.0)
as published by the US Bureau of Labor Statistics,
and well below the Group’s long-range goal
of 2.0 or less.
There was a rise in employee near-miss incidents
in 2024 from 71 in 2023 to 85, with a higher
number of vehicle near-misses recorded, which
translates into a total near-miss frequency rate
of 3.15 (2023 – 2.69).
Total near-miss frequency rate
#
3.15
2024
2023
2.69
2022
2.79
All the incidents are investigated, rectification
processes are implemented where required, and
learnings are utilised in safety training sessions,
including in the weekly “Tool Box” sessions that
each shop-floor member of staff attends where
HSE messaging is reinforced.
We place a great deal of emphasis on training
and learning from incidents. We have a rigorous
safety training curriculum in place, including an
embedded Health and Safety training programme
for all employees. In 2024, Hunting conducted
a total of 68,834 hours (2023 – 48,013 hours)
of HSE training, with each employee receiving,
on average, 28 hours (2023 – 20 hours) of
HSE training in the year.
The Group’s SASB reporting includes vehicle
incident data, with four vehicle incidents
(2023 – nil) reported in the year.
Through our internal HSE Management System,
OnBase, processes, communication, training
and reporting are now captured seamlessly
within one application across the Group, helping
to ensure that all operations are in compliance
with local regulatory agencies.
Using the OnBase system, we have been able
to enhance the number of HSE measures that
we report on, as shown on page 74.
The Group also has an emergency response
plan in place which is overseen by the Director of
QAHSE. The plan incorporates disaster recovery,
employee safety and quality assurance matters,
in addition to IT plans.
The Group’s ERP system is managed by
the Chief IT Officer, with input from the central
finance function, with risks and controls
overseen by the Head of Risk and separate
Internal Control Manager. Regular training
is arranged for IT matters.
Attracting, retaining,
and developing employees
Our ability to successfully deliver on our
objectives, and the reputation that we have
built over many years, rests on the values and
behaviours of our highly skilled and committed
employees. We take diligent steps to comply with
all relevant regional laws covering employment
and minimum wage legislation.
Recruiting, retention, training and development
have been important areas of focus during the
year. Competition for talent remains strong globally.
Nonetheless, while finding talent may currently
take longer than it has previously, Hunting
continues to find and place good candidates.
We use voluntary turnover as a measure to
understand the Company’s retention profile.
Immediately following the pandemic, the voluntary
turnover increased but has reduced to more
normal levels during 2024. Our voluntary turnover
in the year was at 10.3%, (2023 – 13.5%).
Hunting has a reputation for long service of
its employees and the tenure of our employees
is another good indicator of our positive work
culture. The average tenure of an employee
is currently nine years (2023 – nine years).
We maintain this success through competitive
compensation, excellent benefits, and a
commitment to a safe environment.
Hunting PLC
Annual Report and Accounts 2024
79
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
To retain our staff, we ensure that our employees
are fairly remunerated. Given the competitive
landscape of our industry, our base levels of
pay are well above minimum wage thresholds.
Employees are offered benefits upon joining the
Group, including healthcare cover, post-retirement
benefits and, in certain instances, participation
in annual bonus arrangements. We are continuing
to enhance the benefits we offer, such as
maternity and paternity leave.
Our remuneration practices are highly consistent
throughout the organisation, with short- and
long-term incentives offered, the quantum of
which depends on the employees’ level within
the Group.
During the year, some of our employees were
selected from different business units across the
globe, to participate in the Energy Workforce and
Technology Council Executive Leadership
programmes, which are designed to develop and
enhance leadership skills as well as engagement
in networking opportunities within the industry.
Following the outcome of the 2023 engagement
survey it was highlighted that there is a need for
more recognition of employees, which is being
achieved by focusing on leadership training
and assisting managers on how to give good
feedback and daily recognition.
Additionally, we are placing our senior managers
in a programme for executive leadership and our
mid-level managers in an operations leadership
programme.
Code of Conduct, anti-harassment and
discrimination, and unconscious bias training
are also continuing to support our diversity
and inclusion efforts.
We are further committed to supporting all
our employees, with training and development
covering Health and Safety training, professional
development, and general career development
initiatives.
Employee engagement
Hunting places a great deal of emphasis on
employee engagement, recognising that high
levels of engagement are related to bottom line
outcomes such as job performance, client
satisfaction and financial returns, while also
improving employees’ own quality of life. During
the year, the Board visited the Ameriport site,
which enabled them to meet face-to-face with
employees, and also learn about some of the
R&D projects that are underway.
In 2023, Hunting undertook an all-employee
Gallup Q12 survey following the survey completed
in 2019. A total of 1,866 employees responded to
the survey, resulting in a participation rate of 83%
(2019 – 80%). Both the engagement score and
engagement index ratio (which defines engaged
workers to actively disengaged workers) improved.
Since 2019, we have increased our engagement
activities through perception surveys and town hall
meetings. In addition, engagement processes
have been embedded within all business units to
enhance transparent two-way dialogue between
the Board and the Group’s employees.
Another important result from the survey is the
employee engagement ratio of engaged workers
versus actively disengaged workers. Hunting’s
Engagement Index Ratio was 3.5:1, which
means there are 3.5 engaged employees for
each actively disengaged employee. This is again
an improvement from our 2019 result of 2.25:1.
An optimal ratio and our goal for future surveys
is a ratio of 4:1.
We encourage our employees to engage
in dialogue with management to raise issues
of concern. These procedures are supported
by an independent reporting service operated
by SafeCall, where confidential matters can
be raised with the Board.
Diversity and inclusion
Hunting prides itself on being a fair and
responsible employer. We are committed to
creating a positive workplace environment for
all our employees, one that is safe, respectful,
fair and inclusive, and free from any form of
harassment, bullying, or discrimination.
Furthermore, we actively seek to increase the
diversity of our workforce through recruitment,
training and development, and conditions of
work. The Group’s ethics policies support
equal employment opportunities across
all of Hunting’s operations.
As a responsible employer, Hunting gives
full and fair consideration to applications from
disabled persons.
Hunting’s Gender Diversity Policy commits us to:
• An embedded culture of equal opportunities
for all employees, regardless of gender;
• Require external recruitment consultants to
submit their diversity policies to the Group prior
to appointment;
• Ensure that external consultants appointed
by Hunting provide the Board with shortlists
comprising an appropriate gender balance; and
• A periodic review by the Nomination
Committee of its progress in complying
with best practice recommendations.
Community engagement and support
Hunting continues to engage with and support
the communities located around our operations
through a wide range of activities, including
fund-raising events or community donations.
Each region is encouraged to develop their own
community engagement initiatives to align with local
cultural practices as well as Hunting’s corporate
values. Examples of this approach include:
• Our long-standing relationship with three
orphanages in Batam, the largest city in
the province of Riau Islands in Indonesia.
• Teams from Singapore, China, and Indonesia
organised various events to celebrate
International Women’s Day, including team
building exercises, speakers, activities, and
workshops, which addressed several topics
including diversity and equality in the workplace.
• Hunting’s World Heart Day campaign focused
on raising heart health awareness across our
locations in Singapore, Indonesia, and Wuxi,
China. The campaign featured various
engaging activities, including health-focused
workshops and knowledge-sharing sessions.
These efforts enable employees to take
proactive steps towards improving their
cardiovascular health and foster a collective
commitment to well-being.
• In the US, during Breast Cancer Awareness
month, through the generosity of our
employees, $8,000 was raised to support
individuals with breast cancer. With these
funds, we delivered 100 Chemo Care Baskets,
and also donated to the Cancer Resource
Center to support their vital programmes.
We hosted a lunch for the dedicated staff
who work tirelessly.
• A new internship programme was introduced
by Subsea in the US, which we anticipate
rolling out to other businesses. Further details
on this initiative can be found on page 33.
Hunting PLC
Annual Report and Accounts 2024
80
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Responsible products
Delivering high-quality products and services
Our commitment
Delivering high-quality products and services
We meet with customers and pre-empt their
needs as well as the environments in which we
both operate, through innovation, customisation
and the highest levels of quality control. We
monitor the Group’s interaction with customers,
with a risk analysis being completed in the year.
Material issues
Ensuring the quality consistency of our products
Transition to and growth of business in less
carbon-intensive sectors
Promoting innovation to develop new products
and applications
Being responsive to the needs of our customers
and market
SDGs
Reliable and sustainable products
Our purpose is to be a highly trusted innovator
and manufacturer of technology and products
that create sustainable value for our stakeholders.
Our customers rely on us to meet and even
pre-empt their needs, consistently, reliably and
sustainably. We recognise that achieving this
requires both innovation and trust, which, in turn,
is delivered through consistent quality delivery.
A critical part of the customer engagement
strategy is to use our core competencies in
systems manufacture, precision engineering
and print-part manufacturing to deliver innovative
solutions in existing and new markets.
Focus on quality
Our Quality Management System (“QMS”)
underpins every aspect of our business. Certain
minimum requirements are mandated at a Group
level, with site and product-specific quality
measures in place across all of our manufacturing
facilities. Our QMS encompasses procedure
specification, job descriptions, and work
processes. It states how we control every aspect
of a product, from risk assessment to engineering
changes and design to new product delivery. Every
product is logged and tracked, and its journey can
be audited. The Group’s internal manufacturing
reject rate was 0.31% (2023 – 0.20%) and the
percentage of goods shipped that were returned
by customers was 0.0006% (2023 – 0.0006%).
Technology development
While Hunting has access to a very wide
range of technologies and products, whose
applications continue to expand, we know
that technology development is an important
foundation of our business.
Hunting’s TEK-HUB™ is an innovative
company-customer partnership that seeks
to attract individuals and companies in
co-developing and accelerating the
commercialisation of new technologies. Hunting
also has a number of strategic partnerships, with
companies such as Jiuli and CRA-Tubulars,
which support bringing products for the energy
transition sector to market. By collaborating with
technology developers, we are able to deliver
a range of benefits, including reducing the time
frames required to deliver technologies to market
and into the field; and avoiding duplication of
effort, resulting in significant financial, time
and opportunity cost and energy/CO
2
savings,
which frees up resources to solve new problems.
For developers, the benefits of partnering
with Hunting are significant, including access
to capital, an international presence and an
established and extensive customer base.
Hunting PLC
Annual Report and Accounts 2024
81
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
The environment
Expanding our data collection to drive down emissions
Our commitment
Managing our environmental performance
and mitigating our impacts
We aim to protect and minimise our impact
on the environment in which we operate, and
where our products are used. We support the
responsible transition to a low carbon economy
by setting and achieving emissions reduction
targets, mitigating climate-related risks, and
transitioning our business to less carbon
intensive sectors. These targets are amended
and updated where necessary.
Material issues
Ensuring environmental compliance and good
practice (emissions, water, waste)
Pursuing the responsible transition to and growth
of our business in less carbon-intensive sectors
SDGs
Our comprehensive and integrated approach
to quality, safety, health and environmental
management and compliance is underpinned
by our sound enterprise risk management
framework. This supports our aim to ensure
compliance with all environmental regulation
in the regions in which we operate.
We are committed to the efficient use of natural
resources, such as energy, water and raw
materials, and to reducing our overall
environmental footprint.
The Group’s Quality Management System is
aligned with the globally recognised ISO 14001
(Environmental management systems) standard
and the ISO 50001:2018 (Energy management
systems) standard. In 2024, 76% (2023 – 78%)
of facilities complied with ISO 9001:2015 (Quality
management systems) and 68% (2023 – 40%)
of facilities complied with ISO 14001:2015.
Climate change
At Hunting, we support a science-based
approach to climate change and recognise that
responsible companies have a role to play in
mitigating our contribution to climate change and
its impact on business and society. The Hunting
Board has committed to the principles published
in the 2015 Paris Agreement, which aims to limit
the increase in global warming to below 2°C and
to pursue efforts to limit the increase to 1.5°C.
Our Climate Policy was updated in January 2023,
and is available at www.huntingplc.com. Having
adopted and progressed our TCFD reporting,
additional strong governance and reporting
initiatives have been put in place to further
support our commitment to addressing and
mitigating our impact on climate change, as well
as the impact of climate change on our business
in the short, medium and long term. Our TCFD
reporting is available on pages 88 to 101.
These disclosures also comply with the UK’s
climate-related financial disclosures (UKCFD).
We seek to manage our climate-related impact
by setting and achieving emissions reductions,
and mitigating climate-related risks. While
Hunting’s businesses have historically operated
in the oil and gas sector, the Group is deliberately
seeking to transition to lower carbon products
and services. We are committed to pursuing
energy transition opportunities as well as
diversifying revenue sources to include further
non-oil and gas sales.
Hunting PLC
Annual Report and Accounts 2024
82
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Measuring our greenhouse gas emissions
and setting targets
Hunting has disclosed its scope 1 and 2 GHG
emissions since 2013, in accordance with the
principles of the Kyoto Protocol.
We report our emissions, based on operational
control, in line with the recommendations
published by the World Resources Institute.
The process for the reporting of these emissions
is integrated into our non-financial reporting
framework. As our scope 1 and 2 emissions
are within our control, our aim is to reduce them
as a priority. Our progress to date is as follows:
• In 2022, the Board approved a target to reduce
our GHG emissions by 50% by 2030, from
levels reported in 2019, the baseline year.
This equates to a target of 17,937 tonnes
in total scope 1 and 2 emissions by the end
of the decade;
• The Group continues to drive an intensity
factor of less than 20 (calculated as total
scope 1 and 2 emissions divided by revenue);
• In 2023, we assured our 2022 scope 1 and 2
GHG emissions data using S&P Global;
• In 2024, we appointed the Carbon Trust
to assure our scope 1 and scope 2
GHG emissions data. This assurance has
been completed against ISO 14064-3; and
• Following completion of the reporting of Hunting
Titan’s scope 3 GHG emission inventories in
2023, scope 3 reporting for 2024 was extended
to the Group’s Subsea Technologies, EMEA
and Asia Pacific operating segments.
This will enable the Group to develop and publish
a credible Net Zero plan by 2027.
Our scope 1 and 2 carbon footprint
To reduce our scope 1 and 2 emissions footprint,
we aim to improve our energy efficiency and,
at the same time, increase the contribution of
renewables to our energy mix. Importantly, we
aim to introduce a “low carbon” culture within our
operating facilities and among our employees.
Our energy efficiency is mainly improved by
(1) making production more efficient, such as
through new equipment and zero emissions
vehicles; (2) building new facilities incorporating
energy efficiency measures or enhancing existing
facilities, such as by adding solar panels; and
(3) closing facilities that are no longer considered
viable, such as in Hunting Titan during the year.
The construction of the new facility in Dubai has
taken into account environmental considerations
to meet the Group’s ambitions for a sustainable
operating site, which aims to be a highly
efficient facility.
In the US, where most of the Group’s facilities are
located, wind generation capacity is substantial,
giving the Board confidence that a large
proportion of our carbon footprint (predominantly
scope 2 electricity usage) can be substantially
eliminated by moving to renewable energy.
In the UK, the Group’s Aberdeen and London
operations have secured renewable energy
supplies. The Group also participates in
several initiatives, including the Energy Saving
Opportunity Scheme, which requires Hunting’s
UK facilities to be audited for energy efficiency,
with recommendations provided to reduce
energy usage.
Total purchased electricity
GWh
50.2
2024
2023
49.4
2022
43.4
In 2024, our total electricity usage was 50.2GWh
(2023 – 49.4GWh). The 2% increase in electricity
usage was lower than the Group’s 13% increase
in revenue in the year. Of the total figure, total
renewable electricity purchased was 10.5GWh,
(2023 – 11.4GWh), or 21% of electricity purchased
(2023 – 23%), a slight reduction over 2023.
Renewable electricity purchased
GWh
10.5
2024
2023
11.4
2022
8.7
The data reported and the carbon dioxide
conversion factors used to report the Group’s
carbon footprint, are based on those published
by the International Energy Agency, and BEIS
and DESNZ in the UK (www.gov.uk).
Total scope 1 and 2 emissions
tonnes CO
2
e
22,233
2024
2023
22,599
2022
22,422
The Group’s total scope 1 and 2 emissions in
2024 were 22,233 tonnes CO
2
e (2023 – 22,599
tonnes CO
2
e, restated), representing a 2%
decrease, despite the increase in revenue,
as the number of parts manufactured reduced
from 23.0m to 15.6m. We continue to submit
yearly to the Carbon Disclosure Project and
our latest submission is available at www.cdp.
net. The Group’s CO
2
e intensity factor decreased
from 24.3kg/$k of revenue (restated) to 21.2kg/$k
of revenue in the year, see below. In the UK, total
scope 1 and 2 emissions were 733 tonnes CO
2
e
(2023 – 787 tonnes CO
2
e).
2013
2019
2021
2022
2023
2024
2025
2026
2027
Began scope 1 and
2 GHG emissions
reporting.
Publication of
maiden carbon
reduction and
intensity targets.
Initial TCFD
disclosures
published.
Publication of
enhanced TCFD
disclosures.
Commenced
carbon assurance
against AA1000
standard with
S&P Global.
Maiden scope 3
GHG reporting,
based on Hunting
Titan operating
segment data.
Completed 2022
scope 1 and scope 2
assurance.
Expansion of
scope 3 reporting
and full compliance
with TCFD.
Completed 2023
scope 1 and 2
assurance against
ISO-14064-3.
Complete roll out
of scope 3 GHG
data collection.
Full scope 1, 2
and 3 reporting.
Development
of Net Zero plan.
Proposed
publication of
Net Zero Plan.
Hunting PLC
Annual Report and Accounts 2024
83
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Our scope 3 carbon footprint
In 2024, the Group collected scope 3 data from
four of our five operating segments, which
include the Hunting Titan, Subsea Technologies,
EMEA and Asia Pacific operating segments.
Working with a third-party expert, the Group has
been able to gather data on 11 of the 15 pillars of
scope 3 inventories including: purchased goods
and services, product and non-product; fuel and
energy-related activities; upstream transportation
and distribution; and business travel. Four pillars
were determined not to be relevant to the
business profile: upstream leased assets;
downstream transportation and distribution;
processing of sold products; and franchises.
Emissions from the investments pillar have been
included within our scope 1 and 2 emissions
and have, therefore, been excluded from the
scope 3 reporting.
Based on these ten reported pillars, scope 3
inventories were calculated to be 351,446 tonnes
CO
2
e, for the in-scope operating segments, with
our process detailed in the case study on page 73.
As the scope 3 emissions are derived from
materials purchased, the result above has been
extrapolated by Hunting to obtain a Group scope
3 inventory based on the relative proportions
of cost of sales of the four in-scope operating
segments to the Group total, as this is
considered to be a reasonable proxy for materials
purchased. The Group’s total scope 3 inventory
has been calculated to be 534,835 tonnes CO
2
e
on this basis. This compares with the estimated
emissions of 353,346 tonnes CO
2
e in 2023. The
estimated total Group scope 1, 2 and 3 emissions
for 2024 were, therefore, 557,068 tonnes CO
2
e
(2023 – 375,945 tonnes CO
2
e), with the increase
largely due to the rise in raw material steel
purchases in Asia Pacific for its large orders.
Management will be extending this assessment
exercise to include the North America operating
segment in 2025, which will complete the
Group’s scope 3 footprint. As part of this project,
further work is planned to broaden the number
of reporting pillars of scope 3 emissions
being assessed.
Carbon intensity factor
Hunting’s CO
2
e intensity factor is based on total
carbon dioxide equivalent emissions divided
by Group revenue.
In 2024, this was 21.2kg/$k of revenue
(2023 – 24.3kg/$k of revenue). Despite the
increase in activity in the year, our scope 1 and 2
GHG emissions reduced by 2%, with the carbon
intensity factor reducing by 13%, demonstrating
that the Group is more energy efficient. This is
based on our scope 1 and 2 CO
2
e tonnage only.
In March 2025, the Group announced a revised
carbon intensity factor target for 2030 of 20kg/$k
of revenue to further encourage a reduction in
our emissions.
CO
2
e intensity factor
kg/$k of revenue
21.2
2024
2023
24.3
2022
30.9
Climate change impact and transition
Hunting is currently transforming its business
model to pursue opportunities in a lower carbon
economy in response to, and to mitigate, climate
change. Currently, around $75.1m or 7%
(2023 – $75.9m or 8%) of our revenue contribution
is from non-oil and gas sectors, and this is set
to steadily increase in the years to come.
Our efforts to align our business model to take
into account and pre-empt this transition and the
opportunities that this potential for diversification
has for the business, are described in our Climate
Change statement on page 82.
An integral part of our risk management
approach ensures that all new facilities take into
account environmental impact considerations.
Water management
Hunting has a number of water supplies,
some provided by utility networks and some
from boreholes drilled at certain locations. We
recognise that water is a valuable and sometimes
scarce resource in some areas in which we
operate. While Hunting is not considered to be a
significant water user, we are mindful of the need
to actively reduce our freshwater consumption,
to reuse/recycle water as far as possible, and to
ensure that no contaminated water is discharged
into any water source. Any water contaminated
during industrial activities is collected and treated
or contained as special waste. Our intention is to
recycle as much as we are able to internally or
facilitate treatment and recycling off site. We are
mindful of the potential impact on our facilities
of extreme weather events, and ensure that
any run-off from our facilities is captured and
contained, prior to treatment, through secondary
containment measures. A feature of all new and
planned facilities is the likely impact of severe
storms. In 2024, freshwater consumption was
90,411m
3
(2023 – 91,746m
3
), a decrease of 1% as
overall activity levels in EMEA reduced in the year.
Water consumption*
thousand m
3
90
2024
2023
92
2022
58
*Water consumption for 2022 and 2023 has been restated
following a correction for the conversion to cubic metres within
one business unit.
Waste management and recycling
We are conscious of the need to responsibly
source and consume materials, to increase and
optimise reuse and recycle, and to responsibly
dispose of waste.
All our operations have recycling programmes
in place and recycling data is collated for metal,
wood and plastics. Our industrial waste is largely
in the form of liquid waste streams. We continue
to explore ways of reusing chemicals and
materials. For example, we have introduced a
mechanism to capture and reuse cutting fluids
in the year, that not only limits this waste stream,
but is also cost-effective. Where a waste stream
is unavoidable, we dispose of this responsibly
using appropriately vetted suppliers. We take
the view that we are responsible for materials
throughout their life cycles. Hunting’s joint venture
manufacturing facility in Nashik, India, is aiming to
be entirely waste free. The JV facility produces and
supplies pipes, tubes and premium connections.
Metal recycling
tonnes
2,967
2024
2023
2,827
2022
2,032
Wood recycling
tonnes
85
2024
2023
75
2022
41
Plastic recycling
tonnes
30
2024
2023
23
2022
10
Hunting PLC
Annual Report and Accounts 2024
84
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Annual energy summary
Units
2024
2023*
2022
2021
2020
2019
baseline year
Energy type
Natural gas – Group
GWh
7.3
7.2
7.9
8.5
13.7
17.8
Natural gas – UK
GWh
0.9
0.8
0.8
0.9
2.6
4.2
Vehicle consumption and process emissions – Group
tonnes CO
2
e
1,584
2,132
3,367
2,491
3,338
2,972
Vehicle consumption and process emissions – UK
tonnes CO
2
e
95
76
76
28
34
60
Electricity purchased – Group
GWh
50.2
49.4
43.4
40.5
48.6
55.7
Electricity purchased – UK
GWh
1.1
1.7
0.5
1.4
1.4
1.6
Renewable electricity purchased – Group
GWh
10.5
11.4
8.7
6.5
5.8
2.1
Renewable electricity purchased – UK
GWh
1.1
1.7
0.5
0.3
0.4
0.5
Greenhouse gas emissions
Scope 1
**
tonnes CO
2
e
3,630
4,169
5,778
4,171
6,605
7,100
Scope 2
***
tonnes CO
2
e
18,603
18,430
16,644
14,688
18,811
28,774
Total scope 1 and 2
tonnes CO
2
e
22,233
22,599
22,422
18,859
25,416
35,874
Scope 3
tonnes CO
2
e
534,835
353,346
277,143
n/a
n/a
n/a
Total scope 1, 2 and 3
tonnes CO
2
e
557,068
375,945
299,565
n/a
n/a
n/a
CO
2
e intensity factor
(based on scope 1 and 2 emissions only)
kilograms per $k revenue
21.2
24.3
30.9
36.2
40.6
37.4
Water consumption
thousand cubic metres
90
92
58
69
257
319
*
Following an internal review of our carbon data collection methods, double counting was found in two business units and therefore the 2023 figure has been restated to reflect this.
**
Total scope 1 greenhouse gas emissions include UK scope 1 emissions of 498 tonnes CO
2
e (2023 – 441 tonnes CO
2
e).
*** Total scope 2 greenhouse gas emissions include UK scope 2 emissions of 235 tonnes CO
2
e (2023 – 346 tonnes CO
2
e).
Hunting PLC
Annual Report and Accounts 2024
85
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Sustainability Accounting Standards Board information
Oil & Gas – Services
Topic
Accounting metric
SASB code
Reported
by Hunting
Section
Page navigation
Emissions Reduction Services
& Fuel Management
Total fuel consumed, percentage renewable, percentage used in:
(1) on-road equipment and vehicles; and
(2) off-road equipment.
EM-SV-110a.1
Yes
Environment
85
Discussion of strategy or plans to address air emissions-related risks,
opportunities, and impacts.
EM-SV-110a.1
Yes
Task Force on
Climate-related
Financial Disclosures
88 to 101
Percentage of engines in service that meet Tier 4 compliance
for non-road diesel engine emissions.
EM-SV-110a.3
n/a
n/a
n/a
Water Management
Services
(1) Total volume of fresh water handled in operations; and
(2) percentage recycled.
EM-SV-140a.1
Yes
Water management
84
Discussion of strategy or plans to address water consumption
and disposal-related risks, opportunities and impacts.
EM-SV-140a.2
Yes
Water management
84
Chemicals Management
Volume of hydraulic fracturing fluid used, percentage hazardous.
EM-SV-150a.1
n/a
n/a
n/a
Discussion of strategy or plans to address chemical-related risks,
opportunities and impacts.
EM-SV-150a.2
Yes
Waste management
and recycling
84
Ecological Impact
Management
Average disturbed acreage per:
(1) oil; and
(2) gas well site.
EM-SV-160a.1
n/a
n/a
n/a
Discussion of strategy or plan to address risks and opportunities
related to ecological impacts from core activities.
EM-SV-160a.2
n/a
n/a
n/a
Workforce
Health & Safety
(1) Total recordable incident rate;
(2) fatality rate;
(3) near-miss frequency rate;
(4) total vehicle incident rate; and
(5) average hours of health, safety and emergency response training for:
(a) full-time employees;
(b) contract employees; and
(c) short-service employees.
EM-SV-320a.1
Yes
Yes
Yes
n/a
Yes
Health and safety
Health and safety
Health and safety
n/a
Health and safety
79
79
79
n/a
79
Description of management systems used to integrate a culture
of safety throughout the value chain and project life cycle.
EM-SV-320a.2
Yes
Training
Health and safety
27 and 79
27 and 79
Business Ethics & Payments
Transparency
Amount of net revenue in countries that have the 20 lowest rankings
in Transparency International’s Corruption Perception Index.
EM-SV-510a.1
n/a
n/a
n/a
Description of the management system for prevention of corruption
and bribery throughout the value chain.
EM-SV-510a.2
Yes
Anti-bribery and
corruption (“ABC”)
29 and 78
No political or lobbying donations were made.
EM-SV-510a.2
Yes
Anti-bribery and
corruption (“ABC”)
78 and 169
Management of the Legal
& Regulatory Environment
Discussion of corporate positions related to government regulations and/or policy
proposals that address environmental and social factors affecting the industry.
EM-SV-530a.1
Yes
Business model
20 to 32
Critical Incident
Risk Management
Description of management systems used to identify and mitigate catastrophic
and tail-end risks.
EM-SV-540a.1
n/a
n/a
n/a
Hunting PLC
Annual Report and Accounts 2024
86
Strategic Report
Corporate Governance
Financial Statements
Other Information
ESG and Sustainability
continued
Oil & Gas – Services: metrics
Activity metric
SASB code
Reported
by Hunting
Section
Page navigation
Number of active rig sites
EM-SV-000.A
n/a
n/a
n/a
Number of active well sites
EM-SV-000.B
n/a
n/a
n/a
Total amount of drilling performed
EM-SV-000.C
n/a
n/a
n/a
Total number of hours worked by all employees
EM-SV-000.D
Yes
Health and safety
79
Industrial Machinery & Equipment
Topic
Accounting metric
SASB code
Reported
by Hunting
Section
Page navigation
Energy Management
(1) Total energy consumed;
(2) percentage grid electricity; and
(3) percentage renewable.
RT-IG-130a.1
Yes
Yes
Yes
Annual energy summary
Annual energy summary
Annual energy summary
85
Employee Health & Safety
(1) Total recordable incident rate;
(2) fatality rate; and
(3) near-miss frequency rate.
RT-IG-320a.1
Yes
Yes
Yes
Health and safety
Health and safety
Health and safety
79
79
79
Fuel Economy &
Emissions in Use-phase
Sales-weighted fleet fuel efficiency for medium- and heavy-duty vehicles.
RT-IG-410a.1
n/a
n/a
n/a
Sales-weighted fuel efficiency for non-road equipment.
RT-IG-410a.2
n/a
n/a
n/a
Sales-weighted fuel efficiency for stationary generators.
RT-IG-410a.3
n/a
n/a
n/a
Sales-weighted emissions of:
(1) nitrogen oxides (NOx); and
(2) particulate matter (PM) for:
(a) marine diesel engines;
(b) locomotive diesel engines;
(c) on-road medium- and heavy-duty engines; and
(d) other non-road diesel engines.
RT-IG-410a.4
n/a
n/a
n/a
Industrial Machinery & Equipment: metrics
Activity metric
SASB code
Reported
by Hunting
Section
Page navigation
Number of units produced by product category
RT-IG-000.A
n/a
n/a
n/a
Number of employees
RT-IG-000.B
Yes
Employees
Our people
27
78
Hunting PLC
Annual Report and Accounts 2024
87
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
2024 has seen further expansion
of carbon emissions data collection,
with four of the Group’s five
operating segments reporting
scope 3 emissions inventories.
We have updated our physical risk
analysis with the assistance of a
third-party expert and increased
our financial impact analysis.
Based on these reporting
enhancements, Hunting is now
fully compliant with all TCFD
reporting requirements.
Compliance
Under the FCA’s UK Listing Rule 6.6.6R(8)
for companies with the listing of equity shares
in the Equity Shares Commercial Companies
category, Hunting is required to report on a
“comply or explain” basis against the TCFD
Recommendations and Recommended
Disclosures in respect of the financial year
ended 31 December 2024.
The climate-related financial disclosures, which
follow, are consistent with the four reporting
pillars contained within the TCFD Recommended
Disclosures, being:
(i) Governance (page 90);
(ii) Strategy (pages 91 to 99);
(iii) Risk Management (pages 99 and 100); and
(iv) Metrics and Targets (pages 100 and 101).
The Directors consider Hunting to be fully
compliant with UK Listing Rule 6.6.6R(8),
following enhancements to its reporting
procedures completed during 2024, as well as
the climate-related financial disclosures required
by sections 414CA and 414CB(2A)-(2H) of the
Companies Act 2006.
Climate policy
In 2020, the Directors approved a Climate Policy
(located at www.huntingplc.com), which commits
the Board to Group-level monitoring of climate
related opportunities and risks.
This Policy acknowledges the goal to limit global
warming to 1.5°C above pre-industrial levels in
line with the 2015 Paris Accord and commits the
Group to assisting in the delivery of this ambition
through a reduction in its global carbon footprint.
Progress in Hunting 2030 Strategy
In 2023, the Board of Hunting announced
the Hunting 2030 Strategy, which commits
to the development of revenue from the
energy transition sector, including low carbon
geothermal and carbon capture projects,
and non-oil and gas end-markets.
In 2024, the Group announced the
commercialisation of its licensed Organic Oil
Recovery technology, with c.$60m of contracts
announced with clients in the North Sea. This
technology enhances production of brownfield
sites of oil and gas and has the potential to curtail
the number of greenfield developments.
To increase the Group’s long-term sustainability
investment profile, Hunting is now targeting 25%
of total revenue to be derived from non-oil and
gas sources by 2030 as announced at our
Capital Markets Day in September 2023. This is
targeted at reducing the cyclicality of the Group’s
revenue and profit profile, to ensure Hunting
remains an investable business through the
energy cycle.
For more information on the Hunting 2030
Strategy please see pages 10 to 16.
Risk management
To capture potential climate change risks,
the Group rolls out an annual climate change
risk management survey to all businesses.
The survey explores the impact of climate change
on the long-term outlook of each business unit,
using the “business as usual” and “1.5°C” global
warming scenarios.
The survey captures the risk profile of the
proposed pivot to lower oil and gas-related sales,
in addition to the physical risks associated with
Hunting’s asset base.
The risk assessment presented on pages 92 to 96
incorporates these disclosures and also reflects
the financial impact of these risks in the short,
medium and long term.
The Group has further developed its financial
model, which analyses the carrying values of
the assets held by each business and provides
a perspective on the financial impact of each
business unit based on these climate scenarios.
Metrics and targets
The Directors of Hunting announced new
greenhouse gas (“GHG”) emissions reduction
targets in 2023, which include a reduction of
scope 1 and 2 emissions to 50% of the baseline
year of 2019 by 2030.
In March 2025, the Company set a new
long-term emissions intensity target of 20kg/$k
of revenue or less, based on the Group’s scope 1
and 2 emissions to revenue ratio. Our intensity
factor is calculated using our total scope 1 and 2
greenhouse gas emissions in kilogrammes
divided by our total revenue in $’000.
Carbon data collection and assurance
The Group assured its 2023 scope 1 and 2
carbon emissions data in 2024, aligning with the
ISO 14064-3 standard, a more stringent standard
to report against, demonstrating the commitment
by the Directors to enhance its procedures.
The Group elected to use a different third-party
expert from last year to provide this assurance,
with no material issues identified.
Hunting PLC
Annual Report and Accounts 2024
88
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Scope 3 emissions reporting
Hunting appointed the Carbon Trust to assist
in determining scope 3 emissions inventories for
its Hunting Titan, Subsea Technologies, EMEA,
and Asia Pacific operating segments in 2024.
This data was used by Hunting to extrapolate
a total 2024 scope 3 emissions data point for the
Group. Please refer to the case study on page 73
for further details.
These four operating segments account for c.53%
of the Group’s scope 1 and 2 GHG emissions,
providing a significant level of coverage for the
extrapolation of the Group’s scope 3 footprint.
Management has taken the scope 3 data
for the nine months to 30 September 2024 for
these four operating segments and scaled this
to a 12-month period to arrive at a total for
these operating segments. The total was then
extrapolated using the relative cost of sales
amount for 2024 for all five operating segments
to determine the Group’s total scope 3 footprint.
The Carbon Trust was appointed to assist in
the data collection work and provide support to
the conversion of the data into scope 3 emissions
for each of the pillars reported. In 2025, all of the
Group’s operating segments will be included
in the data collection process.
New physical risk assessment
In 2021, the Group appointed WillisTowersWatson
(“WTW”) to assess the physical risk profile of
Hunting’s global asset base. This process was
repeated in 2024, as climate models were evolved,
coupled with the changing profile of Hunting’s
asset base, as new facilities were opened and
others consolidated or divested.
The report from WTW was reviewed by the Ethics
and Sustainability Committee in December 2024,
which summarised the updated risk profile for the
Group, reported under three climate scenarios:
(i) RCP2.6 or a 1.5°C scenario; (ii) RCP4.5 or a
2.0 – 3.0°C scenario; and (iii) RCP8.5 or a
4.0°C scenario.
The timescales applied were 2030, 2050 and
2100 in the completed analysis. Fourteen climate/
natural hazards were assessed, including: river
flood, sea level rise, heavy precipitation, heat
stress, drought stress, fire weather stress,
tropical cyclone, extratropical cyclone, hailstorm,
lightning, coastal flood, tornado, wildfire, and
flash floods.
The analysis has concluded the following
risk profile for the Group based on the
current climate:
• 79% of Hunting’s total insured asset base is
exposed to material heat stress (2021 – 74%);
• 47% of our asset base is exposed to drought
stress (2021 – 10%);
• 29% is exposed to fire stress (2021 – 22%);
• 71% is exposed to material precipitation risk
(2021 – 70%); and
• 33% of our asset base is exposed to material
tropical storms (2021 – 9%).
In the 2050 RCP8.5 scenario, the above
values change to:
• 80% of Hunting’s total insured asset base
is exposed to material heat stress;
• 67% of our asset base is exposed
to drought stress;
• 62% is exposed to fire stress;
• 84% is exposed to material precipitation
risk; and
• 33% of our asset base is exposed to material
tropical storms.
The Directors, therefore, noted that for Hunting
the key climate/natural hazards are drought
stress, fire stress, and tropical cyclones under
the more aggressive climate change scenario,
as analysed by WTW.
The geographic split of our asset base is shown
in the chart on the right, which highlights that
approximately 81% of the Group’s assets are
located in North America, with the balance
mostly located in Europe and Asia Pacific.
Geographic split of asset base
%
Climate exposure of asset base by weather event – under RCP8.5 (4.0°C) climate scenario
Extratropical
Cyclone
River Flood
Sea Level
Rise
Heat
Fire
Tropical
Cyclone
Drought
Precipitation
60%
100%
90%
80%
70%
50%
40%
30%
20%
10%
0%
Percentage
Source: WillisTowersWatson
81
8
11
North America
EMEA
Asia Pacific
2024
2030
2050
2100
Hunting PLC
Annual Report and Accounts 2024
89
Strategic Report
Corporate Governance
Financial Statements
Other Information
Ethics and Sustainability
Committee
Hunting Executive
Committee
Remuneration
Committee
TCFD Working
Group
Audit and Risk
Committee
ESG Steering
Group
Nomination
Committee
Hunting PLC Board
Climate governance framework
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Governance
The Board of Hunting has put
in place a robust climate-related
governance framework to oversee
and deliver on its objectives going
forward. This governance
framework is summarised below.
Disclosure (a) – Board oversight
The Chief Executive has been charged with
oversight and responsibility for all TCFD matters.
Since 2020, the Board has been briefed by
the Group’s central compliance and finance
functions on TCFD reporting requirements and
the workstreams underway across the Group
to assess compliance.
This includes evaluation of the transition
and physical risks facing the Group and the
opportunities climate change presents to
the Company.
Climate change perspectives and strategic
initiatives, including the pursuit of energy transition
opportunities as well as the pivot of revenue to
more non-oil and gas sales, are therefore included
in the Board’s strategic planning discussions,
which include merger and acquisition
opportunities being considered.
In 2024, the Company appointed WTW to assist
in the reassessment of the Group’s physical risk
profile, based on the location of its current and
non-current assets. This exercise will be repeated
in 2027.
The Board maintains an Ethics and Sustainability
Committee to monitor Hunting’s overall
governance and reporting framework in the area
of climate change and wider ESG issues.
The Ethics and Sustainability Committee
comprises the non-executive Directors of the
Company, excluding the Company Chair,
(pages 116 and 117) and is chaired by
Dr Margaret Amos.
The Committee meets twice a year, with carbon,
climate and TCFD matters being regular agenda
items. This Committee also monitors, on behalf
of the Board, Hunting’s progress against its
current emissions reduction targets.
All members of the Board attend each meeting
of this Committee, with its activities and actions
completed during the year detailed on
pages 133 to 135.
While the Ethics and Sustainability Committee
reviews these important non-financial matters,
the Audit and Risk Committee retains key
oversight of Hunting’s public disclosures in
these areas, including the information contained
in its Annual Report and other Stock Exchange
announcements and the evaluation of the risk
profile of the Group in respect of climate change.
Further, the Audit and Risk Committee reviews
the TCFD reporting, which includes the climate-
related risk assessment prepared by the Group’s
central finance function.
Disclosure (b) – Management’s role in
assessing climate risks and opportunities
Members of the Group’s senior leadership team
including the Group Company Secretary, Chief
HR Officer, General Counsel and Director of
QAHSE are invited to meetings of the Ethics
and Sustainability Committee.
These managers, in turn, are supported by
the Hunting Executive Committee; a formal ESG
internal steering group comprising operational
and finance staff; and a TCFD steering group,
the latter being charged with developing formal
reporting and new strategies to curtail the Group’s
carbon footprint, to reduce its impact on the
environment and to provide direction on
Hunting’s sustainability ambitions.
The responsibility of managing climate risks
is vested in the Executive Committee, which
comprises the senior operational leaders
of the Company.
The Group’s central compliance function oversees
TCFD external reporting and compliance matters
and works with the Executive Committee to
develop the Company’s climate-related objectives.
Management completed a Group-level and
business unit-level climate risk register, which
is detailed on pages 92 to 96. As part of this
process, strategic opportunities were considered
by each business unit, which formed part of the
Group’s wider plan to pivot revenue to more
non-oil and gas revenue and the new market
opportunities that underpin this strategy.
For more information on the Group’s wider
governance framework, please refer to
the Corporate Governance Report on
pages 119 to 130.
Hunting PLC
Annual Report and Accounts 2024
90
Strategic Report
Corporate Governance
Financial Statements
Other Information
Base Case Scenario
Pledges Scenario
Net Zero Scenario
2000
2010
2020
2030
2040
2050
120
100
80
60
20
40
0
millions of bopd
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Strategy
Disclosure (a) – Description of risks
and opportunities over the short, medium
and long term
Disclosure (b) – The impact of
climate-related risks and opportunities
Hunting has not presented risks and
opportunities based on the geographic split
of its global operations or by the various industry
sectors where it sells products and services,
as recommended by part (a) of Strategy.
Hunting is a global energy services group
focused largely on the oil and gas industry and,
therefore, each of its global operating segments
are faced with the same climate change risks
and opportunities.
The physical and chronic risk assessment
highlights the profile of the Group’s asset base
by region and presents a detailed risk assessment
of the Group’s total asset base.
Non-oil and gas revenue was c.7% of the Group’s
total sales in 2024 and therefore remains at a
level which is not sufficiently material to analyse
as a separate sector or geography.
The opportunity to transition to non-oil
and gas-related sales exists in all operating
segments across the Group, but notably in the
North America, EMEA and Asia Pacific operating
segments, which currently represent all of the
Group’s non-oil and gas revenue, and in the
segments with high proportions of OCTG-related
revenue. As such, the non-oil and gas segment
of Hunting’s revenue profile is not a separate
business unit.
Therefore, the Board believes that the
geographical/sectoral split approach to climate
change analysis is not relevant to Hunting.
Climate scenarios for evaluating transition
risks and opportunities
The Group uses three scenarios to evaluate
transition risks and opportunities:
•
Business as usual scenario
(aligned to
2.5°C warming) – evolution of current policies
and a steady advancement of current and
nascent technologies;
•
Middle case scenario
(aligned to 2.0°C
warming) – global Net Zero achieved by 2060,
which incorporates policy response to the
current energy crisis as well as decarbonisation
commitments, but not as swift as under the
rapid transition scenario; and
•
Rapid transition scenario
(aligned to
1.5°C warming) – global Net Zero achieved
by 2050 as prescribed by the Paris Agreement.
This reflects immediate peak energy, rapid
hydrogen and carbon removal deployment
and a consumer shift.
In selecting these scenarios, the Group used
energy demand analysis from Wood Mackenzie
(see graph on the right), which analyses a range
of climate change scenarios, as well as the latest
energy transition projections and oil and gas
demand scenarios from the International Energy
Agency (“IEA”), see graph on page 97, which is
assumed to be in a Stated Policies Scenario.
The IEA research included three scenarios:
the Stated Policies Scenario, the Announced
Pledges Scenario, and the Net Zero Emissions
by 2050 Scenario.
Climate scenarios for evaluating physical
risks and opportunities
WTW has evaluated the longer-range climate risk
to the Group’s operating locations, applying various
climate scenarios up to 2100, as noted earlier.
Other known risks are evaluated by the
Board under the Group’s current operational
risk programme, with estimates being made
as to the likely quantitative impact.
The scenarios have been used to evaluate
climate-related risks and opportunities over the
short (0 – 5 years), medium (5 – 10 years) and
long term (10+ years).
The short-term period aligns with the Group’s
usual business and financial planning time frame,
the medium term aligns with the business
outlook beyond the short term, and the long-term
period represents the time frame by which the
wide range of uncertainties surrounding the
energy transition are expected to materialise.
Risks have been categorised as follows:
• Low – small to no impact on the Group’s
profitability ($0–$10m EBITDA) and/or ability
to achieve strategic objectives;
• Medium – some impact felt to the Group’s
profitability ($10–$20m EBITDA) and/or ability
to achieve strategic objectives, requiring some
mitigation plans and action; and
• High – significant impact to the Group’s
profitability (>$20m EBITDA) and/or ability to
achieve strategic objectives, therefore requiring
critical and urgent mitigation plans and action.
Where risks have no impact on profitability, they
have been categorised based on the impact on the
Group’s ability to achieve its strategic objectives.
Scenarios for oil demand: 2020 to 2050
Source: Wood Mackenzie
Hunting PLC
Annual Report and Accounts 2024
91
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Climate change risk analysis
Transitional risks
Category
Description of risk
Management actions
Impact
1. Market
Risk rating:
Medium
Time frame:
Long term
Financial impact:
Revenue
Hunting’s primary revenue streams
are derived from the oil and gas
industry, which can be highly cyclical
and is driven by commodity prices.
Oil and gas demand is also
driven by geopolitical events and
economic growth, which influence
energy supply/demand dynamics.
The drive by many global
governments and economies
to reduce emissions may impact
long-term oil and gas demand,
which in turn will impact Hunting’s
long-term revenue profile.
The Board reviews a number of primary energy demand
scenarios developed by Wood Mackenzie and the IEA, which
include energy transition projections and oil and gas demand
scenarios to 2050. The former is presented on page 91 and
the latter on page 97. The Directors also regularly receive
reports from the Chief Executive on the short- to medium-term
outlook for oil and gas demand, given that this is a key revenue
driver for the Group.
From this analysis, the Directors believe that in the Business
as Usual scenario there is a robust outlook for oil and gas in
the long term i.e. to 2050 and beyond, which will drive strong
demand for Hunting’s energy-focused products through
this time frame. The Directors will continue to monitor these
projections and government legislation and will also track
its customers and suppliers who are also tracking energy
transition developments.
As noted on pages 10 to 16, the Board is putting initiatives
in place to diversify its revenue streams, which do not rely
on the global oil and gas market, to minimise earnings volatility
over time.
As noted in the Market Summary on pages 40 to 42, market data,
including rig count and drilling and production spend, published by Spears
& Associates, support the Group’s wider financial reporting needs in the
short term, including impairment reviews. In October 2024, the IEA issued
its annual energy outlook which provides a perspective on the long-term
changes to energy demand and its primary energy inputs. This shows that
the outlook for oil and gas, in a Stated Policies Scenario as defined by the
IEA, remains robust to 2050 with oil demand remaining flat for this
timescale, with a small decline in natural gas demand.
The analysis from Wood Mackenzie provides a high-level view of the
possible changes to global oil and gas demand and therefore to Hunting’s
revenue profile to 2050, which indicates possible reductions in oil and gas
revenue of c.50–60% from 2023 in the Middle Case and Rapid Transition
scenarios. These energy demand scenarios have implications for Hunting’s
long-term strategy, as the Group’s products and services, and overall
revenue profile, are currently largely driven by oil and gas demand and
investment in the exploration and production of hydrocarbons,
notwithstanding the opportunities in non-oil and gas markets as described
below. The Board believes that the primary energy mix to 2050 supports
Hunting’s long-term focus on energy, underpinned by the pivot to non-oil
and gas sales in this timescale (see opportunities below). The split of
revenue between oil and gas and non-oil and gas sectors, the relevant
metric for managing the risk, is disclosed in note 2 on page 18.
2. Technology
Risk rating:
Medium
Time frame:
Long term
Financial impact:
Revenue
Hunting’s products and services
are primarily targeted at the oil and
gas industry, given its expertise and
know-how of this sector.
Should the pace of the energy
transition be more rapid than what
is currently projected, certain of
the Group’s product lines and
technologies will be less adaptable
to a lower carbon energy world
or could become obsolete.
The Directors believe that Hunting’s engineering excellence,
particularly within the Advanced Manufacturing product group,
has the ability to diversify the long-term revenue streams of
the Group. As part of the business unit level risk assessment,
the adaptability to non-oil and gas markets was explored.
Most businesses across the Group believe that revenues from
new markets, using Hunting’s core competencies, will enable
a level of transition to occur and are, therefore, well placed
to develop non-oil and gas sales. In 2022, a global Energy
Transition sales group was formed to pursue carbon capture
and geothermal revenue.
International commentators believe that climate reduction commitments are
very challenging, given (a) the pace of global warming and (b) the absence of
technologies to assist in material carbon mitigation and reduction. The Directors
of Hunting believe that its strategic ambition to assist its clients in making
drilling operations safer and more efficient will place Hunting in a valuable part
of the energy transition, as brownfield developments extract oil and gas
more efficiently, reducing the need for greenfield project developments.
Hunting’s current technology offering enables the efficient and safe delivery
of hydrocarbons. While there is a risk that certain products could become
obsolete in the long term, the Directors believe that a number of its product
lines are directly applicable to the energy transition and non-oil and gas
markets which provides a level of resilience to its long-range revenue profile.
Hunting PLC
Annual Report and Accounts 2024
92
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Climate change risk analysis
continued
Transitional risks
continued
Category
Description of risk
Management actions
Impact
3. Labour and expenses
Risk rating:
Medium
Time frame:
Short to medium term
Financial impact:
Expenditure
Historically, the oil and gas sector
has provided highly competitive
rates of pay and benefits and,
therefore, has always been an
attractive sector to work in.
However, with recent volatility
across the industry, along with the
global climate agenda, there has
been a change in perception of
the global oil and gas sector, which
may present a continuing risk of
attracting and retaining skilled
talent. The consequence of this
risk is that employee costs may
rise in the short to medium term
to ensure Hunting can achieve
its strategic objectives.
The Directors have monitored labour risk during 2024, through
the Remuneration and Ethics and Sustainability Committees,
to ensure possible labour market issues in Hunting’s various
regions of operation are minimised.
Labour costs – Hunting’s products and services are delivered by a highly
skilled workforce comprising engineers, machinists and professional
services staff. The competition for talent remains a principal risk to the
Company as noted on page 108, with employment costs likely to increase
in the long term, to attract and retain employees to the oil and gas industry.
Hunting’s employee costs are disclosed in note 7 on pages 196 and 197.
Energy costs – in 2024 total utilities costs amounted to c.$5.9m.
It is possible that as the energy transition progresses, the cost of electricity
will increase as more expensive primary energy sources are adopted.
It is expected that the energy cost impact will increase in each scenario,
with the largest impact expected in the rapid transition scenario.
4. Insurance and tax
Risk rating:
Low
Time frame:
Short to medium term
Financial impact:
Expenditure
Hunting is faced with the likelihood
of increased operating costs,
including insurance and tax costs. It
is possible that Hunting’s insurance
costs could rise in the future, given
its presence in the global energy
supply chain in addition to the
location of certain facilities in the
Gulf of Mexico. Further, it is possible
that western governments will
introduce taxation on companies
based on carbon footprint.
The Board has announced a 2030 Strategy, which will target
a material increase in non-oil and gas revenue by the end of
the decade.
This initiative, in part, is to support a less volatile earnings
profile, but also to minimise sector-related cost increases
such as Directors’ & Officers’ liability insurance seen across
the energy sector.
Further, given that the Group has a relatively low carbon
footprint, compared to other energy companies such as
exploration and production businesses, any carbon-related
taxation is likely to be modest, given Hunting’s drive to reduce
scope 1 and 2 emissions.
Given the modest level of emissions produced by the Group, the Directors
believe that the potential tax cost to the Group is low.
The Group maintains a broad-based insurance programme covering many
risk areas. Property damage and business interruption policies are in place,
which cover potential losses due to severe weather events. Given the
location of certain of the Group’s facilities in Texas and Louisiana, which are
subject to wind storms, it is possible that the cost of this insurance cover
will increase over time as the long-term risk profile of these operations
increases. However, the Directors believe that given Hunting’s diversified
operational footprint, the risk of loss of operations is low.
Hunting PLC
Annual Report and Accounts 2024
93
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Climate change risk analysis
continued
Transitional risks
continued
Category
Description of risk
Management actions
Impact
5. Financial markets
Risk rating:
High
Time frame:
Short to long term
Financial impact:
Capital and financing
With the increased attention climate
change is being given by financial
markets, the standing of energy
related companies has come under
increased scrutiny in recent years.
Many investors who wish to invest
in the oil and gas sector look for
evidence of a Net Zero plan as
part of their investment screening.
Energy transition risk imputed by
shareholders, lenders and market
commentators has the potential to
impact equity/debt funding support
from financial institutions.
The Directors believe that investors and lenders will be more
demanding in respect of the provision of financing in the
future. However, this risk is partially mitigated by the Board’s
Hunting 2030 Strategy and its ongoing access to equity
capital markets.
The Group relies on equity and debt capital markets to fund
its businesses. The Group currently has access to a $300m
committed lending facility, comprising a $200m RCF and
$100m term loan, which provides a strong funding base
into the medium term.
The Hunting 2030 Strategy, climate policy, and the ability to diversify
revenue streams to non-oil and gas markets are considered to partially
mitigate the impact.
Capital investment
– it is likely that new investment in facilities will occur
over time to align with the physical risk to the Group’s facilities noted on
page 89. However, the Directors believe that Hunting’s diverse operational
footprint will, in the short to medium term, mitigate the majority of
operational risks as many sites are configured in similar ways, minimising
the requirement for access to capital for this purpose.
Acquisitions
– Hunting has a strategy to develop its non-oil and gas
revenue which, in part, will be funded by internally generated cash flows.
6. Regulatory, legal and compliance
Risk rating:
Medium
Time frame:
Short to medium term
Financial impact:
Expenditure, capital
and financing
Regulatory and compliance
risk with respect to climate has
increased, including the introduction
of TCFD reporting requirements and
the demand for long-term planning
disclosures to address climate
change. The Directors of Hunting
believe that regulatory and
compliance costs are likely to
increase over time as companies
address carbon and climate issues,
which will likely require additional
human capital to meet stakeholder
expectations as well as to develop
and implement Net Zero strategies.
As noted in the Risk Management section on pages 99
and 100, the Directors believe that regulatory compliance
with climate change legislation could differ substantially
given the various government and political agendas where
Hunting’s stakeholders are located.
Management are continuously monitoring regulatory
and compliance changes across its various jurisdictions.
International policies and legislation in respect of climate change and
climate action have increased at pace, examples of which include new
reporting procedures introduced into the UK for publicly-listed companies
along with the encouragement for all businesses to commit to a Net Zero
ambition. Further to this, initiatives such as the UK’s Energy Savings
Opportunities Scheme, which requires energy audits of businesses
to identify carbon-reduction measures, provide an indication of western
governments’ ambitions to achieve carbon containment.
It is likely that climate-related legislation will increase over time, which
will lead to higher compliance, legal, operational, and administrative
costs to keep pace with these new regulations.
Climate-related litigation is a further potential cost pressure, which may
materialise over time, as activism increases.
Hunting PLC
Annual Report and Accounts 2024
94
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Climate change risk analysis
continued
Transitional risks
continued
Category
Description of risk
Management actions
Impact
7. Reputation
Risk rating:
High
Time frame:
Short to long term
Financial impact:
Capital and financing
Many stakeholders have become
more aware of climate change,
linking a Company’s response to
the climate debate to its reputation.
Further, with the continued focus
on oil and gas, investors in certain
geographies will not invest in
a traditional energy company,
which may lead to a lower
market capitalisation.
The Directors believe that a proportionate response to climate
change planning is being implemented, which protects
shareholders’ interests, including earnings and capital returns.
Over time, the Directors will increase the disclosures in this
area as longer-term plans are agreed.
The Directors and the Board monitor the Company’s
market capitalisation against the value of its net assets,
which provides an indication of how various investors
view Hunting’s response to climate change.
Management are focused on close investor relationships
and more regular interactions, and further transparency
on strategy.
Reputation risk is not easily quantified.
Hunting’s association with the oil and gas industry is believed to be high risk
in the long term with respect to investor and shareholder perceptions, given
the negative media attention of traditional primary energy sources. Recent
global shifts in positive sentiment around the oil and gas industry support
Hunting’s ongoing development and innovation in its core products and
markets, while continuing to diversify into products and technology relevant
to the energy transition. The Directors believe that Hunting’s strong
relationships with customers and suppliers will support its ambition to play a
key role in the energy transition, which will contribute to the Board’s strategy
of pivoting revenue to more non-oil and gas sources. Further, the Directors
believe that secure energy sources from regions such as North America
continue to play a key role in global economic stability.
Hunting PLC
Annual Report and Accounts 2024
95
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Climate change risk analysis
continued
Physical risks
Category
Description of risk
Management actions
Impact
8. Assets
Risk rating:
Medium
Time frame:
Long term
Financial impact:
Revenue
Assets and liabilities
The global operating footprint of the
Group is potentially exposed to the
acute and chronic physical risks
of more volatile and severe weather
events due to climate change.
These events have the ability to
damage the Group’s operating
facilities and property, plant and
equipment, thus impairing Hunting’s
ability to generate revenue.
Additionally, in terms of chronic
physical risks, higher temperatures
are likely to increase the
requirement for operational and
office cooling, but there will likely
be a minor reduction in requirement
for space heating in winter.
In December 2024, the Board and the Ethics and
Sustainability Committee reviewed an independent report
from WillisTowersWatson (“WTW”) that presented the Group’s
physical risk profile with respect to climate change and which
presented analysis of Hunting’s operating locations and their
respective risk profiles against a variety of weather events. The
report also detailed a longer-range risk analysis incorporating
a number of climate scenarios and how this could potentially
impact the Group’s operations. The graph on page 89
presents the Group’s facilities’ exposure to various severe
weather events based on the physical risk climate scenarios.
Given the concentration of facilities in Texas and Louisiana,
c.80% of the Group’s operating locations are considered to be
in higher-risk areas. In 2024, a number of facilities closed due
to Hurricanes Beryl and Francine; however, these closures
were for only a few days. All facilities are built to withstand
these weather events, which minimises production downtimes
when these events occur.
The Directors believe that Hunting’s long-term presence
in Louisiana and Texas has given the Group considerable
experience in managing this risk.
Considered as part of the Group’s strategic planning, it is
expected that the majority of products and services offered
by Hunting can be manufactured in multiple facilities, which
mitigates the risk of loss of revenue.
The Group has completed a new physical risk assessment, the results
of which are summarised on page 89.
The analysis shows that a large percentage of Hunting’s facilities are
exposed to heat stress, drought, flood, and precipitation risks, which can
mean that in any one year, certain facilities may be offline for a short period
of time if a severe weather event occurs. The Directors note the Group’s
international footprint, and believe that this does not have a material impact
on the Group’s ability to generate revenue.
Longer range physical and chronic risks, as summarised in the risk
assessment, show increases in the risk profile of certain weather events,
including drought and fire stress, and flooding.
Further, the Group has a number of specialist manufacturing facilities,
including our Electronics, Energetics, Subsea and Perforating Systems
products, which if a weather event was to hit one of these facilities, it would
take a number of months to restore production. However, given that these
separate product lines or operating facilities do not contribute to a
significant level of profit before tax, the overall impact on the Group’s
financial statements is believed to be low risk.
The Directors, therefore, believe that given the diverse product groups,
different geographic locations, both in North America and internationally,
the physical risk profile of the Group is sufficiently mitigated.
Hunting PLC
Annual Report and Accounts 2024
96
Strategic Report
Corporate Governance
Financial Statements
Other Information
2050
1990
2000
2010
2020
2030
2040
300
500
450
400
350
250
200
150
100
50
0
60%
100%
90%
80%
70%
50%
40%
30%
20%
10%
0%
Exajoules
P
o
w
e
r
G
e
n
e
r
a
t
i
o
n
N
a
v
a
l
A
v
i
a
t
i
o
n
S
p
a
c
e
M
e
d
i
c
a
l
G
e
o
t
h
e
r
m
a
l
a
n
d
C
a
r
bo
n
C
a
p
t
u
r
e
C
a
r
b
o
n
C
a
p
t
u
r
e
D
a
t
a
A
n
a
l
y
t
i
c
s
M
a
c
h
i
n
e
L
e
a
r
n
i
n
g
G
e
o
t
h
e
r
m
a
l
a
n
d
C
a
r
b
o
n
C
a
p
t
u
r
e
G
e
o
t
h
e
r
m
a
l
a
n
d
C
a
r
b
o
n
C
a
p
t
u
r
e
E
n
e
r
g
y
E
n
e
r
g
y
E
n
e
r
g
y
E
n
e
r
g
y
E
n
e
r
g
y
A
d
v
a
n
c
e
d
M
a
n
u
f
a
c
t
u
r
i
n
g
S
u
b
s
e
a
O
C
T
G
S
y
s
t
e
m
s
P
e
r
f
o
r
a
t
i
n
g
Core
Competencies
Systems Engineering
Bespoke Manufacturing
Metallurgy & materials expertise
Innovation
Premium service culture
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
IEA projected fossil fuel demand: 1990–2050
Source: IEA – World Energy Outlook
Climate opportunities
Resource efficiency
The Group retains an ongoing lean manufacturing
programme that is aimed at increasing
productivity and reducing costs of operation.
In 2024, the cost saving estimated by this
programme was $0.5m (2023 – $1.4m).
Key resource inputs for the Group include
the availability of power and water.
Energy source
The Group’s carbon emissions footprint is noted
on pages 100 and 101.
The Board believes that simple, but meaningful,
carbon reduction strategies will drive down the
Group’s emissions and include:
i.
Moving electricity contracts for Group facilities
to renewable-based energy arrangements;
ii.
Building a zero emission vehicle fleet over time,
including heavy and light duty vehicles and the
provision of all-electric cars to relevant staff;
iii.
Installation of solar panels on relevant facilities,
for a zero emission base load energy feed; and
iv.
A tree and grass planting strategy at Group
facilities to offset residual carbon emissions.
ii. Participation in carbon capture
and storage projects
As noted in the Market Summary, on page 42,
a number of carbon capture and storage projects
are to be completed within the 2030 time frame,
to offset carbon dioxide build-up in the
atmosphere.
These projects, which require carbon dioxide
re-injection into known oil and gas fields, or
greenfield developments, present a long-term
opportunity for the Company to provide OCTG,
premium and semi-premium connections and
accessories to operators.
The Group’s Energy Transition sales group is
exploring increased participation in this market.
Products and services
The Directors of Hunting have assessed the
opportunities that climate change presents to
the Group. These opportunities are considered
to exist in each scenario but would be expected
to accelerate and happen more swiftly in the
Rapid Transition and Middle Case scenarios.
i. Participation in non-oil and gas primary
energy development
An area of focus within the global energy
industry is geothermal energy development.
These projects present a long-term opportunity
for the Company to provide OCTG premium and
semi-premium connections and accessories to
operators. Hunting has industry-leading products
and expertise in this area and, therefore,
accessing these markets is believed to be
relatively low risk. The Group has analysed the
global market for geothermal energy and believes
that the Asia Pacific and North America regions
hold good opportunities to develop revenue in
this sector given the number of projects
announced over the past two years.
The Directors also note that a number of the
Group’s major customers are also commencing
their climate journey, with energy transition plans
being announced. Hunting’s relationship with
key exploration and production companies and
international energy service groups has been
established over many years, with Hunting being
a trusted member of the global energy supply
chain. The Board, therefore, believes that
Hunting can successfully leverage its brand
and reputation to remain a key participant
in the energy transition.
Hunting’s core competencies – current and
target markets
Oil
Coal
Natural gas
Share of fossil fuels in Total Energy Supply (right axis)
Hunting PLC
Annual Report and Accounts 2024
97
Strategic Report
Corporate Governance
Financial Statements
Other Information
High
Low
Low/Moderate
Moderate
Moderate/High
6
5
4
3
2
1
0
Level of Adaptability
Number of business units
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Business unit resilience and adaptability
Source: Company
Traditionally, these materials constitute a very
low risk in terms of availability and price changes.
Over the past few years, due to geopolitical and
market factors, we have seen significant supply
chain disruptions, including supply chain inflation
and the extension of lead times of critical
components. This has resulted in a surge in
demand, price increases, and uncertain availability.
Measuring and reducing carbon emissions
across the Company’s supply chain is intricate
and challenging, but Hunting’s role in this effort
is driven by products that deliver more efficient
drilling procedures. The Company is increasing
its efforts to communicate its carbon reduction
ambitions to its supplier base, through a Supplier
Code of Conduct, which was introduced in 2022.
A small number of our products contain
electronic components that may contain critical
materials as defined by the National Research
Council. These are a very small proportion of our
purchased materials and constitute a low risk to
the Company. However, for critical materials such
as tungsten, required for Hunting Titan’s charge
production, we carry out regular risk assessments
to identify potential supply chain risks. In addition,
all other identified critical raw materials and/or
components are regularly reviewed, forecasted
for sales, availability, and projected market
pricing, to create a purchase plan.
At all times, Hunting has existing mitigation
plans in place should there be a supply chain
interruption. For example, we maintain, and
in some circumstances have increased, a safe
stock, or buffer stock, for critical materials and
components. We also have a highly diverse range
of approved suppliers in place as part of our
supply chain, for example sourcing from Chinese
to domestic US steel mills. In some areas, we
have expanded our approved supplier list.
Adaption and mitigation
As noted above, the Group is pivoting revenue
to more non-oil and gas sources, including the
development of Energy Transition revenue from
geothermal and carbon capture opportunities.
Investment in research and development for new
products and technologies is a strategic objective
to maintain market leadership in the Group’s
core markets.
In 2024, research and development expenditure
totalled $8.8m (2023 – $6.9m).
Acquisitions and divestments
As noted elsewhere, the Group’s ambition
to develop more non-oil and gas sales will be
achieved through targeted acquisitions and an
overall strategic expansion of the Group’s portfolio.
The Group continues to review and monitor
opportunities in this area.
Access to capital
The Group currently has access to $300m of
committed lending facilities. The Directors believe
that Hunting continues to have access to both
equity and debt markets, given the strength
of its position in the oil and gas sector, and wider
energy industry.
Disclosure (c) – climate resilience based
on a 1.5°C scenario
As part of the TCFD risk assessment process,
disclosures from each of the Group’s business
units were requested, which included details
of the resilience of its operations and business
model in a 1.5°C climate scenario by 2050. While
Hunting is currently focused on the oil and gas
sector, the Group retains diverse manufacturing
capabilities and participates in sectors as diverse
as aerospace, medical and space.
iii. Diversification into other non-oil
and gas sectors
The chart on the previous page illustrates
the Group’s key product groups and core
competencies and demonstrates that the
majority of Hunting’s businesses have expertise
to diversify into other growth sectors, such as
medical, space, aviation and naval. Hunting has
launched a medium-term strategy to materially
increase non-oil and gas sales by 2030, which
is supported by this analysis and has taken steps
to drive new sales, particularly within the Group’s
Advanced Manufacturing group.
These opportunities are explained further as part
of the Hunting 2030 Strategy on pages 10 to 16.
Supply chain
Our commitment to the delivery of innovative,
high-quality, and reliable products is of material
importance to the achievement of our “total
customer satisfaction” goal, and this is reflected in
our Quality Policy and our Sustainability Framework.
Hunting’s total commitment to quality is
shown through operational excellence, and
a comprehensive Quality Management System
(“QMS”) supported by strong management
oversight, which includes supply chain
risk management.
The Group’s supply chain is predominantly related
to raw material supplies, including the responsible
resourcing of readily available materials such as
carbon steel, nickel, and chrome-based specialist
steel alloys, which are used in the manufacture
of Hunting’s various products.
Hunting PLC
Annual Report and Accounts 2024
98
Strategic Report
Corporate Governance
Financial Statements
Other Information
TCFD risk assessment chart
Policy and legal
Resource efficiency
Technology
Energy source
Market
Products/services
Reputation
Markets
Acute
Revenues
Resilience
Assets and liabilities
Balance
Sheet
Opportunities
Income
Statement
Risks
Strategic planning
Risk management
Financial impact
Statement of
Cash Flows
Chronic
Expenditures
Capital and financing
Source: TCFD – Recommendations of the Task Force on Climate-related Financial Disclosures – 2017
Transition risks
Physical risks
Opportunities
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
A key factor that determines the impact on the
Group is the adaptability of our businesses to
transition to different sectors. Until our plans are
further developed, we have taken a conservative
approach and have considered how adaptable our
businesses are with minimal capital investment.
Furthermore, for some of our businesses,
the opportunities to adapt will depend on the
potential development of new markets such
as carbon capture and storage, the use of
hydrogen as an energy source together with
the expansion of the geothermal market
and our ability to compete in these areas.
The majority of the Group’s businesses report
that they have a moderate or high level of
adaptability if energy markets change materially.
We have progressed scenario analysis in 2024
to allow us to further test the resilience of our
strategy against the three climate scenarios
identified above with reference to evaluating
transition risks and opportunities, one being a
1.5°C scenario. The scenario analysis leverages
the Group’s extended forecast out to 2029 and is
extrapolated to the long term using growth rates
and assumptions that are consistent with other
forward-looking financial statement elements.
In the analysis modelled, the Group is considered
resilient to climate-related scenarios.
Risk management
Hunting’s climate-related Risk Management
disclosures are detailed on page 90. As part
of Hunting’s TCFD reporting, Hunting’s central
compliance function prepares an annual
business unit climate risk assessment, which
assesses the short-, medium-, and long-term
risks and opportunities of climate change. The
assessment also gives a deeper consideration
to Hunting’s longer-range risks, including revenue
and expenditure risks in addition to analysis of
major cash generating units within the Group
with respect to the impact of climate change.
Given the Group’s focus on the changing oil and
gas industry and the scrutiny of climate change
by investors and lenders, the Directors’ view is
that climate change risk is a principal risk to the
Group and has been embedded into our Risk
Management processes to which the Group’s
senior leadership team can respond in an
appropriate manner. Further information on
climate change and energy transition risk can
be found on page 108 within Risk Management.
The Group’s central compliance function rolls
out a specific climate-change risk assessment
process to be completed by each business unit
within the Group to enable an integrated risk
register to be assembled.
Disclosure (a) – climate risk identification
Each business unit within the Group completes
a broad-based risk assessment twice a year.
The results of the process are consolidated into
a Group-level risk register, which includes details
of the risk and the associated mitigating controls.
This includes financial, reputational, strategic,
legal and insurance risk as well as other
operational risks faced by the Company.
The Group’s Audit and Risk Committee reviews
the Group-level risk register twice a year as part
of its annual schedule of work with input from the
Group Finance Director, Group Financial Controller,
Group Risk Manager and the Internal Auditor.
In 2022, the Group’s central compliance function
introduced a climate-specific risk questionnaire
to all businesses within the Group, which asked
for key information on transition and physical risks
related to climate change, as well as strategic
opportunities as the energy transition accelerates.
In 2023, a bi-annual Group-level broad-risk
assessment was also introduced, bringing
together responses from global heads of functions.
The risk assessment framework was based
on the TCFD guidance as illustrated below.
Hunting PLC
Annual Report and Accounts 2024
99
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
The results of this process are reviewed and
consolidated by the Group’s central compliance
and finance functions and fed into the scenario
analysis presented on pages 98 and 99.
This analysis was reviewed by the Directors
at its meeting in June 2024 and was debated
at the meeting of the Ethics and Sustainability
Committee in December 2024.
The analysis will continue to be completed
annually as part of the Group’s wider risk
management procedures.
To prioritise climate risk, in consideration of the
principal risks, climate questionnaires feed into the
Group-level risk matrix. As a result, climate change
and energy transition risk is included in the principal
annual risk list, with further Group-level discussion
around inter-dependencies to understand how
this risk impacts other principal risks.
Disclosure (b) – climate risk management
Following the risk identification process,
management has been challenged to develop
processes and procedures to mitigate and
reduce its climate-related risks and impact.
This includes the reduction of the carbon
footprint of each business unit; management of
the physical risk profile of each business or facility,
includes dialogue with the Group’s insurers and
other business units to develop production
synergies for Hunting’s product portfolio; and
the broader efforts to decarbonise the Group’s
supply chain, whether that be to develop non-oil
and gas sales such as geothermal or carbon
capture or to make our activities more efficient
or less carbon intensive.
The central compliance function oversees
the Group’s annual insurance renewal for all of
Hunting’s businesses, working with specialists
from WTW and, in 2024, completed a second
physical climate risk assessment for Hunting’s
climate exposures which extends to 2100.
Disclosure (c) – integration of climate
risk identification and management
The climate-related governance processes
highlighted on page 90 have been introduced
to allow the Board to have direct oversight of the
risks, opportunities, and climate-related strategies
being considered by the Group’s management.
There is also direct access between the Directors,
Chief Executive and senior management team
to enable climate matters to be challenged.
Further, the senior management team has
empowered each business unit leader to address
climate matters on a decentralised basis, to enable
regional considerations to be integrated into the
Group’s overall processes. In addition, the Board
has ensured that financially-orientated risks are
reviewed by the Audit and Risk Committee,
with the broader strategic and operational risks
being reviewed by the Ethics and Sustainability
Committee to ensure broad-based challenge
is given to management and all levels of the
workforce in this important area.
Metrics and targets
Disclosure (a) – metrics
To monitor Hunting’s climate-related risks and
opportunities, the Group has elected to adopt
a broad set of metrics to enable climate-related
risks and opportunities to be monitored. These
are presented in the accompanying table on
page 101.
Disclosure (b) – scope 1, 2 and 3 emissions
The Group currently collects scope 1 and 2
GHG emissions data based on the Greenhouse
Gas Protocol, published by the World Resources
Institute. The data is consolidated on an
operational control basis, through the Group’s
central financial consolidation system. Carbon
dioxide equivalent emissions are calculated using
factors published by DESNZ in the UK to derive
its total scope 1 and 2 emissions.
Scope 1 emissions in 2024 were 3,630 tonnes
CO
2
e (2023 – 4,169 tonnes CO
2
e) and scope 2
emissions were 18,603 tonnes CO
2
e
(2023 – 18,430 tonnes CO
2
e).
Hunting’s total scope 1 and 2 emissions have
been assessed to be 22,233 tonnes CO
2
e
(2023 – 22,599 tonnes CO
2
e, restated).
Scope 1 and 2 emissions, when comparing
2024 outcomes to the prior year, have decreased
by 2% despite activity increasing in the year.
The Group also reported its scope 3 emissions
based on extrapolated data collected from its
Hunting Titan, Subsea Technologies, EMEA
and Asia Pacific operating segments.
Based on this analysis, scope 3 emissions for
the Group are estimated to be 534,835 tonnes
CO
2
e (2023 – 353,346 tonnes CO
2
e).
In 2025 all businesses within the Group will submit
scope 3 emissions data.
Disclosure (c) – targets
In 2023, the Company announced new GHG
emissions targets, with the Group’s scope 1
and 2 emissions reduction now targeted at 50%
below the 2019 baseline year by 2030. This
equates to absolute scope 1 and 2 emissions
of 17,937 tonnes CO
2
e by 2030.
With 2024 scope 1 and 2 emissions of 22,233
tonnes CO
2
e, Hunting has reduced its emissions
by 38% since 2019 and needs to reduce its
emissions by a further 19% to meet its
medium-term target.
In March 2025, the Group published a new
long-term Intensity Factor target of less than
20 by 2030.
The Group has also set a non-oil and gas
revenue target of 25% by 2030. Due to the
growth in Hunting’s oil and gas revenue in 2024,
the Group’s non-oil and gas sales were 7%
of total revenue or $75.1m (2023 – $75.9m/8%).
The Directors remain committed to the
medium-term goal of 25%.
Hunting PLC
Annual Report and Accounts 2024
100
Strategic Report
Corporate Governance
Financial Statements
Other Information
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Sector specific and cross-sector metrics and targets
Metric
Description of metrics/reason for adoption
2024
2023
Revenue – oil and gas:
$m
Hunting’s core markets are oil and gas related, therefore the long-term monitoring of this measure assists in the understanding
of the Group’s resilience.
973.8
853.2
Revenue – non-oil and gas:
$m
Hunting’s longer-term resilience can, in part, be monitored by the development of non-oil and gas sales as the Group seeks
to diversify its revenue streams.
75.1
75.9
Expenditure – total cost of electricity:
$m
The long-term cost of energy, including the purchasing of renewable energy, is a key metric to understanding the financial
impact of the energy transition.
5.9
5.6
Expenditure – insurance premiums:
£m
The cost of insurance, including product liability and property damage/business interruption cover, is a key metric in
understanding the Group’s financial and asset risk profile.
4.0
4.4
Expenditure – research and development:
$m
The long-term diversification to non-oil and gas revenue will require investment in new technology and will form part of the
Group’s research and development activities.
8.8
6.9
Assets and liabilities – capital expenditures:
$m
The investment in non-current assets provides an indication of the long-term viability of the Company’s investment case.
30.1
34.6
Scope 1 GHG emissions:
tonnes CO
2
e
Hunting’s scope 1 carbon footprint provides investors with data on the Group’s contribution to climate change.
3,630
4,169
Scope 2 GHG emissions:
tonnes CO
2
e
Hunting’s scope 2 carbon footprint provides investors with data on the Group’s contribution to climate change.
18,603
18,430
Scope 3 GHG emissions:
tonnes CO
2
e
Hunting’s scope 3 carbon footprint provides investors with data on the Group’s contribution to climate change.
534,835
353,346
Water consumption:
’000s cubic metres
Hunting’s water consumption provides investors with data on this impact on the planet.
90
92
Lean manufacturing savings:
$m
The Group’s drive for higher efficiencies in its operations provides an indication of its efforts to lower its environmental impact.
0.5
1.4
Carbon emissions offset cost:
€m
The cost of purchasing carbon credits (scope 1 and 2 emissions only) to become a Net Zero business.
1.7
1.4
Market capitalisation:
$m
The value of the Group’s equity provides an indication of the future value of the Group’s cash generating assets.
597.6
620.5
Net asset value:
$m
The book value of the Group’s assets, compared to the Company’s market capitalisation, provides an indication of the future
value investors place on the Group’s assets.
902.3
950.1
Renewable electricity purchased:
GWh
The level of renewable energy purchased provides an indication of the Group’s drive to lower emissions.
10.6
11.4
Assets exposed to heat stress risk:
%
The proportion of assets exposed to heat stress risk provides an indication of the physical risk exposure of the Group.
79
74
Assets exposed to precipitation risk:
%
The proportion of assets exposed to precipitation risk provides an indication of the physical risk exposure of the Group.
71
70
Hunting PLC
Annual Report and Accounts 2024
101
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk Management
Managing risks and
opportunities from subsea
to space
We operate in a complex global
environment which is highly regulated
and demands high specification
products across a wide product
portfolio that meet stringent quality
criteria. Hunting’s risk management
and internal control processes are
designed to appropriately mitigate
risks inherent in this sector, while
allowing the Group to achieve its
strategic objectives and deliver
value to shareholders.
Identifying our risks
Effective risk identification aims to enable Hunting
to make meaningful and informed strategic
decisions and deliver long-term success.
Under Hunting’s decentralised philosophy, risk
management acts as a “challenger” to pressure
test business risks and mitigation, while local
management is empowered to manage the
risks in their respective markets. Effective risk
management further helps us comply with the
UK Corporate Governance Code requirements,
implement relevant controls and pursue new
opportunities, while mitigating risks in a changing
industry and external environment.
We take both a bottom-up and a top-down
approach to risk management and we continue
to improve alignment and communication
between them. Twice a year, local management
formally reviews risks faced by their business,
based on current trading, prospects and the local
market environment. The review is a qualitative
and quantitative assessment of the likelihood
of a risk materialising and the probable financial,
operational, strategic and reputational impact.
All assessments are performed on a pre- and
post-controls basis and consider the effectiveness
of current control mitigation.
These principal local risks are reported to Group
management, where a Group-level workshop
is performed to pressure test the risks and their
controls as well as fill in any gaps. In addition,
to heighten Group monitoring of the potential for
fraud, local management reports on local fraud
risk irrespective of its perceived potential low
impact on the local business.
To further understand Group-level risks and the
interdependencies between them, a Group-level
risk assessment was introduced in 2023 and is
now fully embedded in the ongoing risk process.
The Group-level risk assessment includes input
from heads of functions to include a top-down
and strategic input into the risk register.
In 2024, a Board-level risk assessment workshop
was undertaken to gain insight into the top risks
and opportunities from non-executive Directors.
The input was included in the risk register and
helped prioritise top strategic risks and
mitigation practices.
Reporting on our risks
Principal and business risks identified are
reported into the overall Group Risk Register,
which is reviewed and challenged by the Audit
and Risk Committee twice a year. Additionally,
top business risks are reported bi-annually into
the Executive Committee to ensure alignment
between top-down and bottom-up risk reporting
practices. An appropriate executive Director,
together with local management, is allocated
responsibility for managing each separate risk
identified in the Group Risk Register.
Managing our risks
The management of each business unit has
responsibility for establishing an effective system
of controls and processes for its business, which,
at a minimum, meets the requirements set out
in the Group Manual and complies with any
additional local requirements. Strategic plans,
annual budgets and long-term viability financial
projections are formally presented to the Board
for adoption and approval and form the basis
for monitoring performance. The Board’s robust
assessment of principal and emerging risks
ensures adequate review of the risk management
framework and allows the Board to put in place
safeguards to manage the risks, if necessary,
and to make informed decisions to mitigate
potential damage.
Hunting’s internal control system, which has
been in place throughout 2024 and up to the
date of approval of these accounts, is designed
to identify, evaluate, and manage the principal
risks to which the Group is exposed, as well as
identify and consider emerging risks to which the
Group may be exposed to in the future. Internal
controls are regularly assessed to ensure they
remain appropriate and effective.
Business unit management completes an
annual self-assessment of the financial controls
in place at their business unit. The assessment
is qualitative and is undertaken in the context
of the recommended controls identified within
the Group Manual. Gaps between the
recommended controls and those in place are
assessed and improvements are actioned within
a targeted time frame when these are identified
as a necessary requirement.
Hunting PLC
Annual Report and Accounts 2024
102
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk Management
continued
Emerging risks
Alongside the process of identifying the Group’s
current risks in the bi-annual risk assessments,
business- and Group-level risk identification
questionnaires identify emerging risks that
may impact the Company.
Management also monitors emerging risks
through observing press comments, including
industry specific journals; discussions with
shareholders, advisers, customers and suppliers;
attendance at structured forums; review of
comments published by other companies; review
of insurance company risk assessments; and
internal debate by senior executives.
Several emerging risks are monitored, including
the progress of Artificial Intelligence (“AI”) and
its capabilities. AI presents privacy and cyber
concerns, but also opportunities to enhance
operational efficiency. Due to the current
unsettled regulatory environment, including
changing political and global power dynamics,
the emerging risk of unsettled regulatory and
legal environments, alongside an increase in
compliance and legal costs is key. Lastly, with
the ongoing focus on acquisitions and current
global joint ventures, change management and
associated regulatory and legal emerging risks
are monitored for both risks and opportunities.
Results of the assessments are summarised
and presented to the Audit and Risk Committee
annually. A number of control gaps were identified
as part of the year-end audit procedures in the
Netherlands, as discussed on page 163 in the
Audit and Risk Committee Report.
This system of internal control is designed to
manage rather than eliminate risks, therefore
it can only provide reasonable but not absolute
assurance against material misstatement or loss
in the consolidated financial statements and
meeting internal control objectives.
The Board recognises that a number of risks
are not within the direct control of management,
including energy market factors such as
commodity pricing and daily supply/demand
dynamics driven by economic or geopolitical
movements and climate change.
These factors are regularly assessed by the
Board and are considered alongside the risk
management framework operated by the Group.
We also use insurance as a risk mitigation tool.
The Group monitors and reviews new UK Listing
Rules, the Disclosure Guidance and Transparency
Rules sourcebook, accounting standards,
interpretations and amendments, legislation
and other statutory requirements.
Strengthening our risk management
framework in 2024
We continue to enhance and develop our
risk management programme with a focus on
continuous process improvements, dynamic
data collection, and improved communication
channels to make our risk processes more
valuable to both the business and long-term
strategy. Over the course of the year, we have:
• Signed-off a Board-approved risk appetite
process, to be deployed and operationalised
in 2025;
• Selected Governance, Risk and Compliance
software to support the dynamic identification
of risks and better alignment with mitigation
and controls;
• Fully deployed and integrated a Group-level
risk assessment, which serves to understand
strategic and operational principal and
emerging risks from the Group level;
• Held a Board workshop to understand top
risks and opportunities and their alignment
to the strategic vision of the Company;
• Reworded our risk scoring system, to provide
more context to the classification of the risks,
and enable for better risk rating and
comparison; and
• Run a first of its kind risk workshop with a
business segment to pressure-test business
risks and understand risks and opportunities
from both a bottom-up and top-down approach.
Hunting PLC
Annual Report and Accounts 2024
103
Strategic Report
Corporate Governance
Financial Statements
Other Information
Low
Movement in risks (post-control) during the year
Risk Management
continued
Principal risks
The extent of Hunting’s exposure to any one risk
may increase or decrease over a period of time.
This movement is due either to a shift in the profile
of the risk arising from external influences or is due
to a change in the effectiveness of the Group’s
internal control processes in mitigating the risk.
A detailed description of each principal risk, the
controls and actions in place and the movement
in the year are given in the following section.
Key changes to our principal risks
Due to the ongoing Risk Management maturity
and evolving alignment of the risk function to the
Hunting 2030 Strategy and goals, several risks
have changed in rating and importance. Due to
continuous improvement of risk management and
ongoing development of the risk management
framework, principal risks reported have declined
from twelve risks in the prior year to ten key risks.
The change does not come from a lower risk
exposure, but rather from developed definitions
and an ongoing breakdown of principal risks and
supporting sub risks. This includes the inclusion
of “acquisition risk” and “third-party risk” under
the “Our ability to achieve our strategic goals”.
The following risks have either evolved, been
escalated, or de-escalated due to the evolving
strategic initiatives, internal and external pressures,
and enhancements to risk identification processes,
with the following changes being observed:
•
Information technology and cyber security
has been slightly escalated due to growing
importance and impact. Components of
this risk include the potential of high-impact
cyber security attacks, AI, data leakage,
and server outages;
•
Our ability to achieve our strategic goals
depends on how we react to external and
internal forces
has been an area of focus,
and the definition of supporting sub-risks has
been expanded to include acquisition and
third-party related risks;
•
Legal and compliance risk
is the new wording
of the previous annual risk of “Increased
quantity and complexity of changing global
rules and regulations” to include a more
inclusive risk portfolio. Due to internal and
external factors, this risk is escalated;
•
Loss of key executives or staff and
shortage of key staff
has marginally gone
down in rating, due to ongoing mitigation; and
•
Climate change and energy transition
has been marginally de-escalated, due to
ongoing mitigations, strategy, and escalation
of other risks.
All other principal risks remain broadly unchanged
from last year.
The Group’s principal risks are identified on the
pages following. While we have presented these
as separately identified risks, internal and external
events will often affect multiple risks and the risk
relationship is considered by the Board when
assessing the impact on the Group.
Likelihood
Impact
Low
Low
High
High
Current status
Prior year status
1
Increased competition
and market consolidation
2
Geopolitical instability
3
Adverse movement
in commodity prices
4
Information technology
and cyber security
5
Our ability to achieve
our strategic goals
depends on how we
react to external and
internal forces
6
Legal and compliance
7
Loss of key executives
or staff and shortage
of key staff
8
Climate change and
energy transition
9
Product quality
and reliability
10
Work environment issues
including health and safety
Post-control status
Pre-control status
Effectiveness of internal controls
9
9
10
10
1
2
2
Likelihood
Impact
3
3
10
6
4
7
9
High
Low
High
1
5
2
3
8
4
4
4
8
8
8
7
6
6
6
5
5
5
7
7
1
Hunting PLC
Annual Report and Accounts 2024
104
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk Management
continued
Risk description
The provision of goods and services to oil
and gas drilling companies is highly competitive.
Aggressive competitor pricing continues,
competition remains high, and market
consolidations threaten certain products and
segments. Competitors may also be customers
and/or suppliers, which can increase the risk
of any potential impact.
Competition to secure raw materials and
components for the oil and gas services industry
was strong throughout 2024.
Sourcing of supplies such as raw materials
and labour is highly competitive when markets
are tight, and supply chains are constrained.
Technological advancements including
operational efficiency and use of AI in the oil
and gas industry continue at pace and failure
to remain ahead will result in lost revenue
and market share.
Additionally, the oil and gas industry is
undergoing continuing consolidation that could
impact our operations and financial results.
Key mitigations
Management has been working to ensure that
the Group has a robust supply chain, and has
introduced structured training programmes
to develop the proficiency of new machinists
to improve operational efficiencies. The Group
continually invests in research and development
that enables it to provide technological
advancement and a strong, evolving, product
offering. Hunting continues to maintain its
standards of delivering high-quality products,
which has gone some way in protecting against
the impact of pricing pressure on margins.
Key changes during 2024
Hunting’s operations are established close to
their end-markets, which traditionally enables the
Group to offer reduced lead-times and a focused
product range appropriate to each region. With
supply chain issues, including a tight labour
market, Hunting management continues to work
closely with customers to place orders with the
Group earlier than usual and to be more flexible
in agreeing to longer lead-times in the short term.
Senior management maintains close dialogue
with key customers and seeks to maintain the
highest level of service to preserve Hunting’s
reputation for quality.
The Group continues to widen its product
offering beyond the oil and gas market, with a
focus on strategic partnerships, as detailed within
the Chief Executive’s Report on pages 34 to 39.
1
Increased competition
and market consolidation
Risk category
Strategic
Change from last year
Link to strategy
Growth
Strong
returns
Risk description
The past year continued to bring uncertainty
to the global stage. Key worldwide elections,
political division and government dysfunction
in many countries led to changing global power
dynamics and geopolitical and ongoing military
conflicts. In the industry, this risk further
impacts the appetite for oil and gas investment,
aggressive competitor pricing continues,
and competition remains high.
Hunting’s products must go where drilling
companies choose to operate. To compete
effectively, Hunting often establishes a local
operation in those regions; however, significantly
volatile environments are avoided. The Board
has a strategy to develop its global presence and
diversify geographically. Operations have been
established in key geographic regions around the
world, including expansion into India, recognising
the high growth potential these territories offer.
The Group carefully selects which countries to
operate from, considering the differing economic
and geopolitical risks associated with each
geographic territory.
Key mitigations
Areas exposed to high political risk are noted by
the Board and are strategically avoided. Global
sanctions and international disputes are also
closely monitored with compliance procedures
in place to ensure Hunting avoids high risk
countries or partners.
The Board and management closely monitor
projected economic trends in order to match
capacity to regional demand. In the medium
term, the Group’s investment in Jindal Hunting
Energy Services Limited, a joint venture in India,
is reducing reliance on Chinese mills for export
business, and new market entry is ongoing.
Recent EMEA restructuring is driven by a focus on
growth markets as well as strategic cost-cutting.
The Group’s exposure to different geographic
regions is described on pages 44 to 59.
Key changes during 2024
Geopolitical issues remain a feature of the modern
world in which Hunting operates. Continuous
Middle East conflicts contributed to oil price
volatility, supply chain security, and political
alignment. Recent UK government policy in
the North Sea is impacting future oil and gas
extraction, leading to a significant decline in
investment and activity in the industry and
is a driving force in the EMEA restructuring.
Political pressures and shifting power dynamics
continuously contributed to increased threats
of global sanctions, tax pressures, and ongoing
technology wars, most notably between China
and the US. Continued volatility is expected to
continue into the next year, and global dynamics
are closely monitored.
2
Geopolitical instability
Risk category
Operational
Change from last year
Link to strategy
Growth
Strong
returns
Hunting PLC
Annual Report and Accounts 2024
105
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk Management
continued
Risk description
Hunting is exposed to the movement in oil
and gas prices, as the supply and demand for
energy is a key driver of demand for Hunting’s
products. The continued volatility of commodity
prices, inclusive of both oil and gas and raw
materials, cause a number of ongoing risks
for the business.
Oil and gas exploration companies may
reduce or curtail operations if prices become,
or are expected to become, uneconomical and,
therefore, continuation of prices above these
levels is critical to the industry and the financial
stability of the Hunting Group. Adverse
movements in commodity prices may also
heighten the Group’s exposure to the risks
associated with shale drilling. Decreasing oil
prices, due to moderating demand growth and
higher production from non-OPEC+ countries,
are also contributing to pricing pressures
and changes.
Key mitigations
The Group’s products are used throughout the
life cycle of the wellbore and each phase within
the life cycle generates demand for a different
range of products and services. The Board and
management closely monitor market reports
on current and forecast activity levels associated
with the various phases of the life cycle of the
wellbore to plan for and predict improvements
or declines in activity levels.
The Group is undertaking a measured
diversification into non-oil and gas markets,
including geothermal and carbon capture, which
helps mitigate this risk. In addition, management
continues to reduce production costs and
develop new technologies, including automation
and robotics that help mitigate the impact of any
further adverse movement in commodity prices
in the future.
Key changes during 2024
Hunting’s exposure to this risk was relatively
high at the start of the year and has remained
as such during the year. Oil price forecasts
and geopolitical uncertainty have a high impact
on Hunting’s operations, share price, and the
industry and, as such, this is a top risk and
is closely monitored.
3
Adverse movement
in commodity prices
Risk category
Strategic
Change from last year
Link to strategy
Growth
Strong
returns
Risk description
Our continued dependence on Information
Technology systems for our operations mean
we rely heavily on secure and resilient IT systems.
Risks range from high-impact cyber security
attacks, data leakage, network and server
outage to the emerging risk and opportunity
of Artificial Intelligence. Due to the ever-present
risk of cyber attacks, amplified by Hunting’s
international presence, acquisitions and growth,
and the increasing sophistication of attacks,
this risk is escalated.
Through increased disaster recovery procedures,
ongoing business analysis, cyber awareness
training, regular monitoring, content filtering,
domain name system (“DNS”) security solutions,
and improvements in communication, risk
mitigation has grown significantly over the past
several years and most components of the risk
have lowered net risk likelihoods although cyber
attack risk remains high.
Key mitigations
Risks associated with cyber security range
from loss of control of financial data, reputational
damage and lost client and supplier trust, and
financial loss.
Key mitigating actions include regular monitoring,
back-ups and offsite servers and disaster recovery
procedures including security awareness training,
secure mail gateway, content filtering, and DNS
security solutions. The ongoing efforts have led
Hunting to alignment with industry benchmarks
through working partnerships with top-tier
industry specialists.
Key changes during 2024
Hunting’s exposure to this risk was relatively high
due partly to the external factors impacting cyber
risk and increased threat and sophistication of AI
cyber attacks. Mitigation was stepped up, with a
focus on human behaviour, targeting negligence
and human error which are leading causes of
phishing occurrences. Additionally, a leadership
cyber workshop was performed in 2024, and
we engaged a third party to assist with the
development of a cyber attack response plan.
Cyber security training, alongside a phishing
campaign, continues to evolve and includes
AI training introduced in 2024. With the stronger
focus by leadership and a clearer tone-from-the-
top on IT risk and ongoing mitigation, cyber risk
culture and Company-wide awareness is
steadily improving.
4
Information technology
and cyber security
Risk category
Operational
Change from last year
Link to strategy
Operational
excellence
Hunting PLC
Annual Report and Accounts 2024
106
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk Management
continued
Risk description
Hunting’s ability to achieve its strategic goals
depends on how we react to external and internal
forces. This presents itself both as a risk as well
as an opportunity. Hunting has set out a clear
strategy with long-term growth objectives to
investors during its Capital Markets Day and
those plans need to be executed on, including
the delivery of financial targets for profitability
and cash generation.
With public targets, strategy execution is closely
linked with share price and not meeting financial
targets communicated to shareholders could
impact investor confidence. The escalation of
this risk is based on both the importance to the
Company as well as the inclusion of key sub-risks,
including merger and acquisition goals, R&D and
innovation goals, financial risk, and execution risk.
Internal and external risks could cause Hunting
to miss financial and acquisition targets previously
communicated to shareholders. This could
impact investor confidence and, therefore,
impact the Hunting share price. Additionally,
Hunting has a range of external stakeholders
and shareholders, whose interests and definitions
of success are different. There is a risk that our
definition of success is not aligned to the
changing external perspective.
Key mitigations
Hunting’s first Capital Markets Day hosted
in 2023 enabled the sharing of strategy and
long-term goals to inform the market. Increased
focus on continuously developing investor and
analyst relations further influenced the ongoing
collection of market intelligence to enable
Hunting to address any change in shareholder
expectations more quickly.
Key changes during 2024
Strong operational performance across most of
the product groups, including OCTG and Subsea,
has delivered several strategic milestones.
Strong cash generation in the year has led to
improvements in free cash flow and a positive
total cash and bank/(borrowings) position,
which contribute to considerable balance sheet
strength. Additionally, the restructuring of the
EMEA operating segment is focusing on
reorganising Hunting’s global O&G footprint.
A stronger focus on monitoring both internal
and external environments and stakeholder
expectations has been a priority for 2024.
5
Our ability to achieve our
strategic goals depends
on how we react to external
and internal forces
Risk category
Strategic
Change from last year
Link to strategy
Growth
Strong
returns
Operational
excellence
ESG and
sustainability
Risk description
Hunting operates globally in complex regulatory
environments, and there is an ongoing risk that
we are not compliant with global rules and
regulations. Acquisition targets, new and extended
market entries, and changing external compliance
laws and new regulations keep this risk high.
External factors range from increased tax
regulations, labour regulatory risks and their
long-term impacts, and increased climate
regulatory requirements and changing international
rules and regulations such as TCFD. Fragmentation
of data governance regulations globally and cyber
security disclosures and governance requirements
are additional emerging risks. The development
of climate change regulations also differs globally,
influencing varied shareholder expectations,
especially between the US and the UK.
Key mitigations
Ongoing monitoring and increased resource
allocation for internal monitoring has helped
in efforts to continuously track any evolving
regulatory requirements and associated controls.
Additional employee conduct training is also
in development.
Key changes during 2024
Sub-components of legal and compliance risk
have been escalated due to internal and external
factors. Ongoing mitigation improvements are
a Group focus, including: management of tax
and compliance issues in a changing global
environment; contract standardisation and
contractual due diligence, especially when
entering new markets; and acquisitions, joint
venture and business-not-as-usual scenarios.
Additional training to relevant parties has also
been introduced and is ongoing.
6
Legal and compliance risk
Risk category
Legal and compliance
Change from last year
Link to strategy
Operational
excellence
ESG and
sustainability
Hunting PLC
Annual Report and Accounts 2024
107
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk description
The Group is highly reliant on the continued service
of its key executives and senior management
who possess commercial, engineering, technical
and financial skills that are critical to the success
of the Group. Ensuring that the critical roles in the
Company have candidates chosen and prepared
to step into roles to ensure continuation of good
management is key. Similarly, skilled labourers,
especially machinists, are critical to operations and
their shortage has the potential to compromise
product quality in the near term. Competition for
skilled labour including mechanists remains high
globally in the industry, although Hunting has
an above-average retention rate and tenure.
Key mitigations
Remuneration packages are regularly reviewed
to ensure that key executives are remunerated
in line with market rates including healthcare and
pension arrangements. External consultants are
engaged to provide guidance on best practice.
Hunting provides a competitive compensation
and benefits package, employee engagement
initiatives, and merit increases. A new Directors’
Remuneration Policy has been introduced in
2024, and closer work with recruitment agents
is ongoing. Senior management regularly reviews
the availability of the necessary skills within the
Group and seeks to engage suitable staff where
they feel there is vulnerability.
Details of executive Director remuneration are
provided in the Remuneration Committee Report
on pages 136 to 160.
Key changes during 2024
Succession planning and senior management
retention and growth are key areas of focus
across the Group. Recruitment of new machinists
and operators, together with evolving machine
and industry requirements, are business priorities
and a shortage of skilled labour is a continuously
increasing risk. Succession planning and
leadership development programmes are in place
and are continuously developed. An increased
focus on these development programmes is partly
due to ensuring we can meet our growth targets
and also as a result of restructuring initiatives.
7
Loss of key executives
or staff and shortage
of key staff
Risk category
Strategic
Change from last year
Link to strategy
Growth
Operational
excellence
ESG and
sustainability
Risk description
Failure to adapt to climate change and energy
transition or to mitigate the Company’s impact
on the environment has the potential to damage
the Company’s reputation and cause financial
and strategic issues.
Exposure to climate risk for Hunting is primarily
driven by non-revenue matters, such as regulation
and reputation, and includes an assortment of
sub-risks and opportunities. A key sub-risk this
year has been the physical risk to assets from
more volatile weather conditions, causing both
IT network outages and affecting operations.
Financial and reputation aspects lead to more focus
on investor relations as fund managers and other
stakeholders challenge the Group’s approach
to mitigating its impact on climate-related issues.
Funding risk is escalating as the oil and gas
industry is under increased scrutiny with
decreasing access to borrowing facilities.
Legal and compliance risk has also increased,
as more regulations and targets are directed
by governments.
Key mitigations
The Group takes seriously its commitment
to environmental compliance and stewardship.
We have continued to increase and refine our
climate-related disclosures. Since 2023, the
Company announced new GHG emissions
targets, and in 2024, we have widened the
collection of data for our scope 3 emissions
reporting to four out of five operating segments.
In addition, workgroups, including the Ethics
and Sustainability Committee, are monitoring
climate-based matters. Refinancing to diversify
borrowing facilities has also been performed
in 2024.
The Group’s environmental, climate and TCFD
disclosures are described in detail on page 31
and pages 82 to 101.
Key changes during 2024
Climate and energy risk continues to be a
strategic and operational concern. The Hunting
2030 Strategy outlined key targets for ongoing
energy transition, including long-term investment
in geothermal and carbon capture opportunities.
Further alignment between risk management
and climate risk is being implemented, with
improvements in climate risk assessment,
questionnaire quality, and more aligned inclusion
of climate risks in Group risk registers. The Group
has also performed a physical climate risk
assessment, to better understand the value at risk
and key climate risk adaptation considerations.
In October 2024, the Group entered into $300m
of new committed borrowing facilities to replace
our existing $150m Asset Based Lending (“ABL”)
facility, which reduces the funding risk.
8
Climate change
and energy transition
Risk category
Strategic
Change from last year
Link to strategy
Growth
Strong
returns
ESG and
sustainability
Risk Management
continued
Hunting PLC
Annual Report and Accounts 2024
108
Strategic Report
Corporate Governance
Financial Statements
Other Information
Risk Management
continued
Risk description
Due to the broad nature of the Group’s activities
and the industry in which we operate, Hunting is
subject to a range of HSE risks and the laws and
regulations issued by each of the jurisdictions in
which the Group operates.
The Group’s exposure to risk, therefore,
includes the potential for the occurrence of a
reportable incident, the financial risk of a breach
of HSE regulations, and the risk of unexpected
compliance expenditure whenever a law
or regulation is renewed or enhanced.
Key mitigations
The Board targets achieving a record of
nil incidents and full compliance with the laws
and regulations in each jurisdiction in which
the Group operates.
Every Group facility is overseen by a Health and
Safety Officer with the responsibility for ensuring
compliance with current and newly issued HSE
standards. Local management is focused on the
training of new employees in Hunting’s stringent
safety procedures.
The Board receives a Group HSE compliance
report at every Board meeting.
The Group’s HSE performance is detailed
on pages 27 and 79.
Key changes during 2024
The Group recorded an HSE total recordable
incident rate of 0.93 in the year, which is
significantly below the industry average and is
broadly similar to the prior year. This particular risk
pertaining to HSE incidents, therefore, continues
to be relatively low, post-controls. Ongoing audits
and Group reporting have highlighted no material
weakness or significant deficiencies.
10
Work environment issues
including health and safety
Risk category
Operational
Change from last year
Link to strategy
Operational
excellence
ESG and
sustainability
Risk description
The Group has an established reputation for
producing high-quality products across many
specialist and niche environments. A failure of any
one of these products could adversely impact the
Group’s reputation and demand for the Group’s
entire range of products and services.
Risk of developing or innovating products or
differentiating existing products could have an
adverse effect on responding to customers’ needs
and could result in a loss of customers, as well as
adversely affecting future success and profitability.
Key mitigations
Quality assurance standards are monitored,
measured and regulated within the Group under
the authority of the Quality Assurance Director
who reports directly to the Chief Executive.
Key mitigation includes Quality Management
System adherence, competency training, and
continued personnel training for ensuring quality
product manufacture. Where appropriate, a formal
programme of machine maintenance and asset
replacement is established in order to mitigate
the risk of machine breakdowns affecting
product quality including raising the appropriate
capital expenditure for replacing machines.
Key changes during 2024
The risk of product quality or reliability has
remained unchanged during the year, with no
significant issues raised by the Group’s customers
or during the Board’s internal monitoring process.
The Group’s commitment to product quality
is detailed on page 81.
9
Product quality and reliability
Risk category
Operational
Change from last year
Link to strategy
Growth
Strong
returns
Operational
excellence
Hunting PLC
Annual Report and Accounts 2024
109
Strategic Report
Corporate Governance
Financial Statements
Other Information
Viability Statement and Going Concern
Viability Statement
Introduction
Hunting has a diverse global customer base
underpinned by strong, long-term relationships.
The Group provides a large range of products
and services through its manufacturing and
distribution facilities, which are located in a
number of countries across the globe.
In considering the Group’s viability, the Board
regularly assesses the risks to its business
model, strategy, future performance, solvency
and liquidity. These assessments are supported
by the risk management processes described
on pages 102 and 103 and include a review of
the Group’s exposure to the oil and gas industry,
competitor action, customer plans, geopolitics,
the robustness of the supply chain, the impact of
climate change, the Group’s quality of information
technology systems and security, and key
executives and staff.
Assessment period
The Group’s customers are principally involved in
the exploration for, and production of, oil and gas.
Given the nature of the industry and the planning
cycles involved, these activities can cover periods
of no more than several weeks up to several
years from start to end.
Hunting’s management works closely with its
customers, discussing their operational plans
and related capital expenditure programmes,
with a natural focus on the earlier years in which
projects will be in progress, or committed, and
for which requirements for goods or services
from Hunting will be more certain.
The outlook for the Group beyond this period
is generated from management’s assessment
of industrial data and projections published by
industry commentators and analysts, including
statistics on exploration and production
expenditure, footage drilled and rig activity.
These macro, longer-term forecasts are subject
to significant volatility.
Due to the uncertainty in projecting forward
any meaningful outlook beyond three years,
the Group’s bank funding facilities are generally
limited to a similar period. This enables the Group
to reduce the risk of either being underfunded
or overfunded, thereby mitigating non-utilisation
fees, beyond the foreseeable future by being
able to negotiate new facilities to accommodate
revised operational and strategic changes
expected during that additional period. During
the year, the Group completed a process to
refinance its borrowing facilities. The new
earnings-based facility which commenced in
October 2024 comprises a revolving credit facility
(“RCF”) with an initial tenor of four years and a
three-year term loan.
Financial projections beyond this period are too
uncertain for the Group to commit to a longer
facility. The Group’s Treasury department
generally aims to initiate negotiations for a facility
renewal approximately 12 months before the
maturity date and the most recent outlook would
contribute to those discussions.
Taking these factors into consideration, the
Board believes that a three-year forward-looking
period, commencing on the date the financial
statements are approved, is the appropriate length
of time to reasonably assess the Group’s viability.
Assessment
The nature of the Group’s operations exposes
the business to a variety of risks which are
noted on pages 104 to 109. The Board regularly
reviews the principal risks and assesses the
appropriate controls and further actions as
described on pages 104 to 109 given the Board’s
appetite for risk as described on pages 102
and 103. The Board has further considered their
potential impact within the context of the Group’s
viability assessment.
In assessing the viability of the Group, the Board
consider internal financial projections to the end
of 2028 which made the following assumptions:
• Global exploration and production spend,
excluding Russia, China and Central Asia,
is expected to rise by 24% from 2024 to 2028;
• Demand for energy service products improves
in the medium term, given the global outlook
for oil and gas demand, which is driven by
growth within emerging markets and sustained
demand from developed markets. These are
the fundamental drivers of Hunting’s core
business of manufacturing, supplying and
distributing products and services which
enable the extraction of oil and gas;
• The Group continues to widen its customer
base beyond the oil and gas industry, including
into non-oil and gas, aerospace, military and
medical markets;
• The Group’s cost base is expected to
benefit from improved efficiency resulting
from reductions in fixed costs, simplified
management structures and back-office
services, which together with the improved
operating leverage, is expected to drive
EBITDA margins up; and
• The Group will continue to have a low to
medium exposure to higher risk countries
given the proportion of its current revenues
and profits derived from politically stable
regions such as North America, Europe,
the Middle East and South East Asia.
A downside case of the financial projections was
also produced to model a severe but plausible
deterioration in market conditions relevant to
the Group’s principal risks. The downside case
models a reduction in revenue of between 10%
and 15% per year in 2027 and 2028 and the
resulting impact on EBITDA and total cash and
bank/(borrowings) assuming a modest reduction
in discretionary corporate cash outflows such
as dividends and treasury share purchases.
If conditions were worse than anticipated in
the downside case, corporate cash outflows,
capital expenditure and operating costs would
be reassessed resulting in additional financial
flexibility. In the downside scenario, the Group
continued to generate cash and had significant
headroom under its committed facilities and
financial covenants.
A downside case has not been modelled for
2025 or 2026 as the near-term is more certain,
underpinned by the sales order book, and such
a scenario would result in a cash inflow from
working capital.
Hunting PLC
Annual Report and Accounts 2024
110
Strategic Report
Corporate Governance
Financial Statements
Other Information
Viability Statement and Going Concern
continued
Going concern
Introduction
The Group’s principal cash outflows include capital
investment, labour costs, inventory purchases
and dividends. The Group’s principal cash inflows
are generated from the sale of its products and
services, the level of which is dependent on overall
market conditions, the variety of its products and
its ability to retain strong customer relationships.
Cash inflows are further supported by the Group’s
credit insurance cover against customer default
that, at 31 December 2024, covered the majority
of its trade receivables, subject to certain limits.
Current and forecast cash balances are reported
on a weekly basis by each of the business units
to a centralised treasury function that uses the
information to manage the Group’s day-to-day
liquidity and longer-term funding needs.
The Group has access to sufficient financial
resources, including a $200m revolving credit
facility and a $100m term loan, the latter being
fully drawn during 2024. At 31 December 2024,
the Group had total cash and bank/(borrowings)
of $104.7m (NGM K). The Group’s internal
financial projections indicate that the Group is
expected to continue to deliver a cash positive
position and consequently has sufficient
resources to meet its liabilities as they fall due
over the 12 months following the date of approval
of the financial statements.
Review
In conducting its review of the Group’s ability to
remain as a going concern, the Board assessed
the Group’s recent trading performance and
its latest forecasts and took account of
reasonably predictable changes in future trading
performance. The Board also considered the
principal risks faced by the Group and the
potential financial impact of the estimates,
judgements and assumptions that were used to
prepare these financial statements and concluded
that, given the significant financial headroom, the
Group is able to maintain sufficient cash resources
to meet its liabilities as they fall due over the
12 months following the date of approval of the
financial statements. The Board is also satisfied
that no material uncertainties have been identified.
Conclusion
The Board is satisfied that it has conducted
a robust review of the Group’s going concern
and has a high level of confidence that the Group
has the necessary liquid resources to meet its
liabilities as they fall due. Consequently, the
Board has considered it appropriate to adopt the
going concern basis of accounting in preparing
the financial statements.
Liquidity and solvency
The new earnings-based facility is a bank
borrowing facility which commenced in October
2024 and comprises a $200m RCF with an initial
tenor of four years, with an option that allows the
Group to extend the contracted maturity date by
an additional 12 months, and a $100m term loan
with a three-year tenor. The previous ABL facility
has been retired. Like the ABL facility, the new
RCF contains an accordion feature. This allows
the Company to increase the facility quantum
by an additional $100m (subject to further credit
approval from the relevant lenders) enabling
the Group to increase the total RCF to $300m.
The term loan was fully drawn on signing of the
facilities. On signing of the new facilities, the
Group’s ABL facility was repaid and cancelled,
with drawings under the new term loan used
in part for this purpose. At 31 December 2024,
the Group had total cash and bank/(borrowings)
of $104.7m (NGM K). The Group’s internal
financial projections indicate that the Group is
expected to continue to deliver a cash positive
position.
Conclusion
The Board believes that the Group’s strategy for
growth, its positive approach towards mitigating its
impact on climate change, the diverse customer,
supplier and product base, the resilience of its
business model against the principal risks, the
availability of borrowing facilities and the positive
outlook for the oil and gas industry, in the medium
term provide Hunting with a strong platform on
which to continue its business. The Directors,
therefore, have a reasonable expectation that
Hunting will be able to continue in operation
and meet its liabilities as they fall due over
the three-year period of their assessment.
Hunting PLC
Annual Report and Accounts 2024
111
Strategic Report
Corporate Governance
Financial Statements
Other Information
Section 172(1) Statement
This statement has been
prepared in compliance with
the Companies (Miscellaneous
Reporting) Regulations 2018.
The Board of Hunting PLC considers
that, in complying with its statutory
duty during 2024 and under section
172 of the Companies Act 2006
(the “Act”), the Directors have acted
fairly and in good faith and in a
manner which they believe will
promote the continued success
of the Company, for the benefit
of its members and stakeholders
as a whole.
The Board engages with its stakeholders when
considering major strategic decisions, in the
following ways:
• Each year the Board reviews its short- and
long-term strategy. In recent years these have
remained consistent, with a focus on maintaining
a firm financial foundation, improving facilities,
and investing in the development of new
technology and in our workforce;
• The Board aims to ensure that our employees
work in a safe environment, that they receive
appropriate training and are rewarded for
their efforts;
• Over the years, we have fostered long-standing
relationships with our customers, suppliers and
our external advisers. We base our philosophy
on sharing our core values with our key
stakeholders throughout the supply chain and
by keeping in regular contact with suppliers
and customers, advising them of our market
strategy and product innovation;
• As a Company operating in the oil and gas
industry, we regularly monitor the impact of
our activities on the environment and on the
communities in which we operate, in particular
where we maintain active manufacturing
facilities; and
• As a Board, we endeavour to operate
responsibly and to make carefully considered
decisions. We encourage high standards of
business conduct from our employees and
ensure we lead by example.
Following engagement with a wide range of
stakeholders, the following actions were taken:
• Each year the Company Secretary provides the
Board with a stakeholder engagement report
which is completed by all the Group entities.
This enables the Board to monitor senior
management engagement with customers,
suppliers, investors and other stakeholders;
• Our global Human Resources function
continues to monitor workforce remuneration,
hiring and retention policies to ensure our
employees are paid fairly when compared
to similar companies in our sector;
• Charitable donations were made in line with
the policy to distribute unclaimed dividends
to UK-based charities;
• The Group continued to expand its carbon
data and climate reporting. In March 2025,
the Company announced its new carbon
intensity target;
• Following the completion of the Group’s
first carbon data assurance project in 2023,
Hunting engaged a third party in the latter half
of 2024 to complete assurance of the Group’s
2023 data;
• Following the analysis of the Hunting Titan
operating segment scope 3 emissions in 2023,
senior management extended this project for
2024 to also include the Group’s EMEA,
Asia Pacific, and Subsea Technologies
operating segments;
• Hunting’s TEK-HUB™ continues to build
relationships with innovative individuals and
organisations that are developing technologies
that align with our customers’ and wider
stakeholders’ requirements;
• Outlined during the previous year’s Capital
Markets Day, the Hunting 2030 Strategy
presented a robust growth strategy designed
for long-term resilience. The Company has
actively engaged in several projects,
demonstrating its technological prowess
and commitment to unlocking the full potential
of geothermal and carbon capture, usage,
and storage;
• Teams from Singapore, China and Indonesia
organised various events to celebrate
International Women’s Day, which included
team building exercises, speakers and
activities. The workshops addressed several
topics including diversity and equality in regard
to the workplace;
• To commemorate the founding of the first
Hunting company in 1874, the Company
organised an event at the National Portrait
Gallery in London which was attended by
current and former employees and other
stakeholders. In addition, our global companies
engaged in numerous local and community
events and initiatives as part of the 150th
anniversary celebrations (see pages 8 and 9);
• In Dubai, sustainability was at the heart
of the design of the new facility, with a number
of carbon reducing features incorporated to
meet the Group’s ambitions for a sustainable
operating site. It ensures a safe and comfortable
working environment for employees as well as
building a facility that focuses on reducing
water and electricity consumption; and
• During December, the Board visited the Group’s
Ameriport facility, which provided an opportunity
to meet and engage with employees.
The following sections and cross references
provide a summary of where details of key
stakeholder and associated engagement and
decision making is located within the 2024
Annual Report and Accounts, and also some of
the considerations taken by the Board in fulfilling
their duty under section 172(1) of the Act:
• Shareholders (page 25);
• Lenders (page 26);
• Employees (pages 27, 28 and 78 to 80);
• Customers (pages 29 and 81);
• Suppliers (pages 29 and 30);
• Environment and climate change
(pages 31 and 82 to 87);
• Governments (page 32); and
• Communities (pages 32 and 80).
On behalf of the Board
Jim Johnson
Chief Executive
Bruce Ferguson
Finance Director
6 March 2025
Hunting PLC
Annual Report and Accounts 2024
112
Strategic Report
Corporate Governance
Financial Statements
Other Information
Corporate
Governance
Introduction to Corporate Governance
114
Board of Directors
116
Executive Committee
118
Corporate Governance Report
119
Nomination Committee Report
131
Ethics and Sustainability Committee Report
133
Remuneration Committee Report
136
– Remuneration at a Glance
140
– Directors’ Remuneration Policy
142
– Annual Report on Remuneration
151
Audit and Risk Committee Report
161
Directors’ Report
167
Hunting PLC
Annual Report and Accounts 2024
113
Strategic Report
Corporate Governance
Financial Statements
Other Information
Introduction to Corporate Governance
Introduction
In my first year as Company Chair of Hunting
PLC, it is my great privilege to introduce you to
the Company’s Corporate Governance Report.
Over the past 150 years, Hunting companies
have continued to evolve and adapt in the face
of economic, political, and social changes and
recent extraordinary technological advances.
This year your Company has delivered further
revenue and earnings growth, increased free
cash flow generation, and improved its return
on capital employed, demonstrating both the
strength and critical nature of, and our
commitment to, our current end-markets.
During his term as Chair, my predecessor
Jay Glick continued in a long-standing tradition
of encouraging a positive corporate culture in
Hunting’s conduct towards its shareholders,
employees, customers, suppliers, and other
stakeholders. With my fellow Directors, I hope to
continue with this tradition and help Hunting PLC
to further develop and progress as a profitable
and socially responsible enterprise well into
the future.
To this end, the Board has progressed a number
of operational and governance related initiatives
in the year, in support of the Hunting 2030
Strategy, which has seen positive responses
from our shareholders.
Delivering on the Hunting 2030 Strategy
The past year has seen strong delivery against a
number of critical milestones in our Hunting 2030
strategic ambitions.
In May, we announced a record order from
Kuwait Oil Company, which was followed by
a further material order, in total being $231m for
OCTG and premium connections for deepwater
gas projects offshore Kuwait.
2024 has been a year of strong
delivery of a number of milestones
which were presented as part
of our Hunting 2030 Strategy at
our Capital Markets Day in 2023.
Strong execution on our OCTG
and Subsea ambitions has helped
Hunting deliver another year of
revenue and earnings growth,
along with increased returns.
Offsetting this performance has
been lower trading results from our
Hunting Titan (Perforating Systems)
and EMEA operating segments.
The Board governance structure
and its activities have supported
our long-term strategy, with a new
Directors’ Remuneration Policy
and long-term incentive plan being
approved by shareholders. Further,
the Board continued its refreshing
in the year, as our strategy
increasingly looks to markets
outside of the energy industry.
This success was a result of over five years of
dialogue and collaboration between the customer
and Hunting’s technical and production teams
in Singapore, China and Houston.
Our Subsea businesses have also reported
excellent progress in the year as they build their
international presence. We have spent much
of the year completing orders for ExxonMobil in
Guyana, which has supported the strong results
from the segment.
In addition, we have demonstrated
commercialisation of our licensed Organic
Oil Recovery technology in the year through
the receipt of some significant orders. This new
revenue stream is material to the Group and is
testament to the efforts of our team in Europe.
As we look forward, we anticipate completing
other milestones on our 2030 journey, with the
Directors focused on delivering strongly on all the
objectives outlined at the Capital Markets Day.
Board succession and refreshing
On 10 January 2024, Margaret Amos was
appointed as a new independent, non-executive
Director of the Company. Margaret brings
significant aviation, corporate planning and
emerging market experience to the Board.
In line with the Company’s Articles of Association,
Margaret automatically retired as a Director and
was reappointed by shareholders at the 2024
Annual General Meeting (“AGM”).
At the AGM in April 2024, we saw the retirement
of Jay Glick as Company Chair. Jay joined the
Company in 2015 and became Company Chair
in 2017, overseeing some of the most challenging
trading backdrops in the Company’s history.
The Directors would like to thank Jay for his hard
work, wise counsel, and industry insight and we
wish him a happy retirement.
Stuart M. Brightman
Company Chair
Dividends declared in the year
11.5
cents
(2023 – 10.0 cents)
Total distributions payable to shareholders
in respect of the financial year
$
18.2
m
(2023 – $15.8m)
Hunting PLC
Annual Report and Accounts 2024
114
Strategic Report
Corporate Governance
Financial Statements
Other Information
Introduction to Corporate Governance
continued
The Directors would like to thank our
shareholders for their support and engagement
through this time.
The Board is committed to strong stewardship
of the new Policy, given the new incentive
structure in place.
Dividends
With the continued improvement in the Company’s
financial performance in the year, and in line with
the dividend ambition announced as part of the
Hunting 2030 Strategy, the Directors are
proposing a Final Dividend with respect to 2024
of 6.0 cents per share. This distribution is being
submitted to shareholders for approval at the
2025 AGM.
An Interim Dividend of 5.5 cents per share was
paid on 25 October 2024, equating to a cash
distribution of $8.7m.
The total distribution for the year to shareholders
is, therefore, 11.5 cents per share, which is a 15%
increase over 2023, equating to total distributions
payable of approximately $18.2m (2023 – $15.8m).
ESG and sustainability
As noted in the ESG and Sustainability Report
on pages 68 to 87, the Directors have overseen
the wider implementation of the collection of our
scope 3 carbon data. Our management team
is fully engaged with this important initiative and
as we progress our reporting in the coming years,
our commitment to carbon and climate change
initiatives are likely to be enhanced.
Board and Committee effectiveness review
In line with the recommendations of the
UK Corporate Governance Code, an externally
facilitated Board and Committee Effectiveness
review was completed in H2 2024 by Clare
Chalmers Limited. The review included interviews
with the Directors and key members of the senior
leadership team to gain perspectives on the
governance and operating procedures of the
Group. Board and management succession
remains a key area of development in the short
term given the tenure of members of the
leadership team.
Employee engagement
The Directors visited the Group’s AmeriPort
manufacturing facility in Houston, Texas in
December 2024, which provided an opportunity
for the Board to meet and talk to the workforce.
As part of the feedback from our 2023 employee
survey, new engagement opportunities, including
more employee town halls were introduced
in the year.
New UK Corporate Governance Code
In January 2024, the Financial Reporting Council
issued the 2024 UK Corporate Governance Code.
Management has spent a good deal of time
reviewing the new Code provisions, particularly
around risk management and internal control
and in August and December 2024 received
presentations on the approach and strategy
of the Company to be compliant over time.
The Company is investing in people and
technology to enhance our control environment,
with new governance procedures being reviewed,
which will enhance the work of the Audit and
Risk, and Ethics and Sustainability Committees
as well as new workstreams for the main Board.
As part of our Corporate Governance Report on
pages 119 to 130, we have published a “Roadmap
to Compliance” with the Code focusing on the
new internal control requirements.
In summary, the governance framework, along
with the Board and Committee processes and
procedures, have remained robust during 2024
with progress being made on many fronts.
We look to the future with confidence.
On behalf of the Board
Stuart M. Brightman
Company Chair
6 March 2025
I am honoured to take on
the role of Company Chair
on behalf of shareholders and
the Company’s stakeholders
and look forward to assisting
in delivery of the Hunting
2030 Strategy.
On 1 February 2025, Annell Bay also retired
as a Director. I would like to thank Annell for her
sterling work with the Remuneration Committee
since 2018, and particularly over the past two
years as the Directors prepared a new Directors’
Remuneration Policy and Long-term Incentive
Plan, which were both approved by shareholders
at the 2024 AGM with strong levels of support.
During H2 2024, the Nomination Committee
commenced a new search process to appoint
an additional, independent, non-executive
Director. On 3 March 2025, the Company
announced the appointment of Cathy Krajicek
with immediate effect. Cathy has joined all of
the Board’s Committees and brings significant
international, oil and gas and public company
experience to the Company.
New Directors’ Remuneration Policy
The Directors began their consultation with
shareholders in July 2023, with closing dialogue
occurring up to April 2024. Feedback from all our
investors and proxy voting agencies was received
and considered through this time, with major
amendments being made to align with the views
of stakeholders.
Hunting PLC
Annual Report and Accounts 2024
115
Strategic Report
Corporate Governance
Financial Statements
Other Information
Board of Directors
Key to committees:
N
Nomination Committee
E
Ethics and Sustainability Committee
R
Remuneration Committee
A
Audit and Risk Committee
I
By invitation
Chair
Arthur James (Jim) Johnson
Chief Executive
Nationality
American
Length of service
33 years; appointed to the Board as a Director
and Chief Executive in 2017. Age 64.
Skills and experience
Jim held senior management positions within
Hunting from 1992 up to his appointment as
Chief Operating Officer of the Group in 2011.
In this role, he was responsible for all day-to-day
operational activities of the Company. Jim is a
member of and chairs the Executive Committee.
External appointments
None.
Bruce Ferguson
Finance Director
Nationality
British
Length of service
31 years; appointed to the Board as a Director
and Finance Director in 2020. Age 53.
Skills and experience
Bruce is a Chartered Management Accountant
and has held senior financial and operational
positions within the Group since 1994.
From 2003 to 2011, Bruce was the financial
controller of the Group’s European operations.
From 2011, Bruce held the position of managing
director of Hunting’s EMEA operating segment
and has been a member of the Executive
Committee since its formation in 2018.
External appointments
None.
Margaret Amos
Non-executive Director
Nationality
British
Length of service
1 year; appointed to the Board as a non-executive
Director in January 2024 and is viewed as
independent. Margaret is Chair of the Ethics
and Sustainability Committee. Age 55.
Skills and experience
Margaret spent the majority of her career
at Rolls-Royce plc, where she held a number
of senior positions including Finance Director –
Engineering, IT and Corporate as well as Director
of Business Planning.
External appointments
Margaret is currently a non-executive director
of Pod Point Group Holdings PLC.
Stuart M. Brightman
Non-executive Company Chair
Nationality
American
Length of service
2 years; appointed to the Board as a
non-executive Director in 2023 and appointed
Company Chair in April 2024, and is viewed
as independent. Age 68.
Skills and experience
Stuart has spent the majority of his career
at TETRA Technologies Inc. (“TETRA”),
Dresser Inc. and Cameron Iron Works. During
his time at TETRA, Stuart held the position of
chief operating officer between 2005 and 2009,
when he was appointed chief executive officer,
a position he held to 2019, before his retirement
from the business.
External appointments
None.
N
I
I
I
N
R
A
E
Hunting PLC
Annual Report and Accounts 2024
116
Strategic Report
Corporate Governance
Financial Statements
Other Information
Board of Directors
continued
Key to committees:
N
Nomination Committee
E
Ethics and Sustainability Committee
R
Remuneration Committee
A
Audit and Risk Committee
I
By invitation
Chair
Carol Chesney
Non-executive Director
Nationality
American and British
Length of service
7 years; appointed to the Board as a
non-executive Director in 2018 and is viewed as
independent. Carol is Chair of the Audit and Risk
Committee. In April 2024, Carol was reappointed
for a final three-year term. Age 62.
Skills and experience
Carol is a Fellow of the Institute of Chartered
Accountants in England and Wales. Carol was
formerly the Group Financial Controller and,
latterly Company Secretary of Halma plc.
External appointments
Carol is currently a non-executive director
of IQE plc and Hill & Smith plc.
Paula Harris
Non-executive Director
Nationality
American
Length of service
3 years; appointed to the Board as a
non-executive Director in April 2022 and is viewed
as independent. Paula was appointed Chair
of the Remuneration Committee in February
2025 and is also the Company’s designated
non-executive Director for employee engagement.
In March 2025, Paula was reappointed for a
second three-year term. Age 61.
Skills and experience
Paula has extensive oilfield services experience
following a 33-year career at SLB, the international
energy services group, where latterly she was
Director of Stewardship.
External appointments
Paula is currently a non-executive director of
Chart Industries, Inc and Helix Energy Solutions
Group, Inc.
Keith Lough
Senior Independent non-executive Director
Nationality
British
Length of service
7 years; appointed to the Board as a
non-executive Director in April 2018 and appointed
Senior Independent Director in August 2018.
In April 2024, Keith was reappointed for a final
three-year term. Age 66.
Skills and experience
Keith was formerly the non-executive
Chairman of Gulf Keystone Petroleum Limited
and Rockhopper Exploration plc as well as a
non-executive director of Capricorn Energy PLC.
He has previously held a number of executive
positions within other energy-related companies,
including British Energy plc and LASMO plc.
External appointments
Keith is currently the non-executive chair
of Southern Water.
Catherine (Cathy) Krajicek
Non-executive Director
Nationality
American
Length of service
<1 year; appointed to the Board as a
non-executive Director on 3 March 2025
and is viewed as independent. Age 63.
Skills and experience
Cathy has deep experience of the exploration
and production segment of the oil and gas
industry, spending 22 years at ConocoPhillips
and 11 years at Marathon Oil Company. During
this time, Cathy held technical, major project,
and asset management roles in the US and
Indonesia. As well as asset manager roles
at Marathon, Cathy held roles within HSE &
Security and Technology & Innovation functions.
Cathy was formerly a non-executive director
at Capricorn Energy PLC.
External appointments
Cathy is currently a non-executive Director
of Gulf Keystone Petroleum Limited.
N
N
N
N
E
E
E
E
R
R
R
A
A
A
A
R
Hunting PLC
Annual Report and Accounts 2024
117
Strategic Report
Corporate Governance
Financial Statements
Other Information
Executive Committee
Adam Dyess
Managing Director – Hunting Titan
Nationality
American
Length of service
14 years; joined Hunting in 2011
Age 40.
Ryan Elliott
Chief IT Officer
Nationality
American
Length of service
12 years; joined Hunting in 2013.
Age 47.
Daniel Tan
Managing Director – Asia Pacific
Nationality
Singaporean
Length of service
17 years; joined Hunting in 2008.
Age 62.
Scott George
Managing Director – North America
Nationality
American
Length of service
15 years; joined Hunting in 2010.
Age 51.
Gregory T. Farmer
Global Director – QAHSE/Compliance/ESG
Nationality
American
Length of service
37 years; joined Hunting in 1993.
Age 58.
Liese Borden
Chief HR Officer
Nationality
American
Length of service
7 years; joined Hunting in 2018.
Age 63.
Dane Tipton
Managing Director – Subsea Technologies
Nationality
American
Length of service
15 years; joined Hunting in 2010.
Age 53.
Jim Johnson and Bruce Ferguson are also
members of the Hunting Executive Committee.
Ben Willey
Company Secretary
Nationality
British
Length of service
15 years; joined Hunting in 2010 and was
appointed Company Secretary in 2013.
Age 51.
N
E
R
A
Hunting PLC
Annual Report and Accounts 2024
118
Strategic Report
Corporate Governance
Financial Statements
Other Information
Our purpose
Stakeholder engagement
Non-executive
Directors
Executive
Directors
1
Strategic intent
2
Challenge and
decision making
3
Short/long-term plans
Remuneration
Committee
Execution and
value creation
(Business Model)
Risk
management
Strategic and
financial
performance
Business
strategy
Audit and Risk
Committee
Nomination Committee
Ethics and
Sustainability
Committee
Market environment and
other external factors
KPIs
Corporate Governance Report
Compliance
The Board of Hunting PLC has adopted
governance principles aligned with the 2018 UK
Corporate Governance Code (“the Code”), which
can be found at www.frc.org.uk. Hunting PLC is
reporting its corporate governance compliance
against this Code. The Board notes that it has
complied with all provisions within the Code
except for the following from which there has
been a departure as at 6 March 2025:
• The pension contribution rate of the Chief
Executive (who is resident in the US) currently
does not align with the workforce as required
by provision 38 of the Code. Mr Johnson was
appointed prior to the implementation of the
2018 Code. It should be noted that since his
appointment to the Board in 2017, the pension
contribution Jim Johnson received from the
Company averaged 12% of base salary, which
is the same as the contribution rate of the
Finance Director. The Board has agreed that
the pension contribution rates for all new
executive Director appointments will be
capped at 12% of base salary, in line with the
UK workforce. In 2023, a new deferred savings
plan was implemented in the US, which fully
aligns the workforce and management across
the region. The Remuneration Committee
notes that this plan will be offered to future
US-based executive Directors, which will make
the Company fully compliant with the Code.
Governance framework
Introduction
Subject to the Company’s Articles of Association,
UK legislation and any directions prescribed by
resolution at a general meeting, the business of
the Company is managed by the Hunting PLC
Board (“the Board”).
The Board is responsible for the management
and strategic direction of the Company, to ensure
long-term success by generating value for its
shareholders, while giving due consideration
to other stakeholders, as prescribed by UK law.
The Board discusses strategic planning and
long-term growth objectives. Once the Board has
agreed on these strategic plans, they are rolled
out across the Group’s operations and relayed
to key stakeholders more generally.
Embedded within strategic planning is the
Group’s appetite for risk. The Group’s Risk
Management framework (see pages 102 and
103), and supporting procedures, help the Board
refine its decision making, as the opportunities
and risks for long-term success and growth are
evaluated against the risk appetite and culture of
the Group. Following this, the Group’s Business
Strategy and Model are put into action.
The Board has four sub-committees to which
it delegates governance and compliance
procedures:
• The Nomination Committee, whose report
can be found on pages 131 and 132;
• The Ethics and Sustainability Committee,
whose report can be found on
pages 133 to 135;
• The Remuneration Committee, whose report
can be found on pages 136 to 160; and
• The Audit and Risk Committee, whose report
can be found on pages 161 to 166.
These Board Committees support the Directors
in their decision making.
Hunting governance framework
Hunting PLC
Annual Report and Accounts 2024
119
Strategic Report
Corporate Governance
Financial Statements
Other Information
The work of the Nomination Committee supports
the Board’s responsibility for ensuring that a
framework for the recruitment and retention of
talent is in place to run the Company and that
succession is well planned and executed in
a timely manner.
The Ethics and Sustainability Committee
supports the Group’s environmental, social
and governance (“ESG”) decision making.
The Committee also monitors the Group’s
long-term strategies to reduce our impact on the
environment and improve our sustainability. The
Committee monitors stakeholder engagement
procedures and the Company’s culture, and
oversees our ethics policies.
The Remuneration Committee ensures that
executive pay remains aligned with Company
performance, workforce remuneration and the
broader shareholder experience. The
Remuneration Committee ensures the executive
Directors remain motivated and incentivised, as
the senior leadership team executes the Board
approved strategy on a day-to-day basis.
The Audit and Risk Committee’s responsibilities
include reviewing the Group’s financial results,
risk management and internal control procedures,
challenging management and overseeing the
internal audit and external audit functions.
The Board and its Committees are further
supported by an Executive Committee,
comprising senior leaders across the Group.
The Executive Committee oversees the
implementation of the Group’s strategy and
growth objectives and ensures that the risks
and also opportunities presented are
actively managed.
Board leadership
and Company purpose
(Section 1 of the Code)
Responsibilities of the Board
The Board of Hunting PLC has clearly defined
areas of responsibility, which are separate to
those of the Company Chair, executive Directors
and the Committees of the Board. The non-
executive Directors approve the strategic goals
and objectives of the Company, as proposed
by the executive Directors.
The Board approves all major acquisitions,
divestments, dividends, capital investments,
annual budgets and strategic plans.
The Board exercises overall leadership of
the Company, setting the values of the Hunting
Group, providing a strong tone from the top
which all businesses within the Group, and their
employees, are encouraged to adopt.
Governance principles of the Company are set
by the Board and key Group-level policies are
reviewed and approved by the Directors.
The Directors monitor Hunting’s trading
performance, including progress against the
annual budget, reviewing regular management
accounts and forecasts, comparing these
forecasts to market expectations, and assessing
other financial matters. They review and approve
all public announcements, including financial
results and trading statements, and set the
dividend policy of the Group.
The internal control and risk management
framework and associated procedures are
reviewed by the Board. However, key monitoring
procedures are delegated to the Audit and Risk
Committee. Compensation of the executive
Directors is set by the Remuneration Committee,
who also review and monitor the remuneration of
the Executive Committee, as well as monitoring
the remuneration structure of the workforce.
The Board approves all key recommendations
from the Nomination, Ethics and Sustainability,
Remuneration, and Audit and Risk Committees
and approves all appointments to these
Committees.
Board activities
Board and Committee materials are circulated
in a timely manner ahead of each meeting.
At each meeting, the Chief Executive updates
the Board on key operational developments,
provides an overview of the global markets,
reports on health and safety, and highlights
milestones reached towards the delivery of
Hunting’s strategic objectives.
The Finance Director provides an update on the
Group’s financial performance, position, trading
outlook, banking arrangements, legal issues,
analyst discussions, tax matters, and statutory
reporting developments relevant to Hunting.
These topics lead to discussion, debate and
challenge among the Directors.
The Group’s governance framework includes
the Board and the Executive Committee.
Medium-term planning initiatives are formalised
within the Executive Committee, which are then
reviewed regularly by the Board and are supported
by periodic presentations by members of the
Executive Committee.
The Board met nine times in 2024 (2023 – nine
times), with the attendance record noted below:
Number of meetings held
9
Number of meetings attended
(actual/possible):
Margaret Amos (from 10 January 2024)
8/8
Annell Bay (to 1 February 2025)
8/9
Stuart Brightman
9/9
Carol Chesney
8/9
Bruce Ferguson
9/9
Jay Glick (to 17 April 2024)
4/4
Paula Harris
9/9
Jim Johnson
9/9
Cathy Krajicek (from 3 March 2025)
0/0
Keith Lough
8/9
Tenure
The average tenure of the Board, at 6 March 2025,
is four years (29 February 2024 – five years).
Within the non-executive Directors, the average
tenure is three years (29 February 2024 – five years).
For the appointment of executive Directors, the
Company enters into a service contract with the
Director, which reflects the terms of employment,
remuneration and termination, taking into
account the country of residence and local
employment laws applicable at the time of the
appointment. For more information on the service
contracts of the current executive Directors,
please see the Remuneration Committee Report
on page 149.
For the appointment of non-executive Directors,
a letter of appointment is agreed with the
Director, which sets out the time commitment,
fees, and term of appointment.
Corporate Governance Report
continued
Hunting PLC
Annual Report and Accounts 2024
120
Strategic Report
Corporate Governance
Financial Statements
Other Information
2024 Board meetings and agenda items
8 Jan
22 Jan
28 Feb
17 Apr
4 Jun
28 Jun
28 Aug
21 Oct
4 Dec
Standing items
Chief Executive’s Report
•
•
•
•
•
•
•
•
Finance Director’s Report
•
•
•
•
•
•
•
•
Operational Reports
•
•
•
•
Quality Assurance, Health, Safety & Environmental Reports
•
•
•
•
Shareholder Report and Investor Relations Update
•
•
•
•
•
•
•
Other items
Board rotation and succession
•
Annual/Interim Report and Accounts
•
•
Board Evaluation
•
•
Risk Review
•
AGM Preparation
•
Trading Statement
•
•
Strategy
•
•
•
•
•
•
•
•
Organisation and Personnel Review and Succession
•
Annual Budget
•
Company Chair/Senior Independent Director Investor Feedback
•
As at 6 March 2025, the gender balance of
the Board comprises four female Directors (50%)
and four male Directors (50%).
For further information on the biographical
details of the Board of Directors, please see
pages 116 and 117.
Board tenure
at 6 March 2025
Less than 3 years
3-5 years
6-9 years
50%
12%
38%
Corporate Governance Report
continued
Average tenure of the Board
4
years
at 6 March 2025
(29 February 2024 – 5 years)
Average tenure of the non-executive
Directors
3
years
at 6 March 2025
(29 February 2024 – 5 years)
Composition and diversity
Margaret Amos was appointed as a Director
on 10 January 2024. Following the Company’s
Articles of Association, Dr Amos automatically
retired at the 2024 AGM and offered herself
for reappointment by shareholders.
Jay Glick retired as a Director on 17 April 2024
and Annell Bay retired on 1 February 2025.
Cathy Krajicek was appointed as a Director on
3 March 2025. Following the Company’s Articles
of Association, Ms Krajicek will automatically retire
at the 2025 AGM and will offer herself for
reappointment by shareholders.
Heidrick & Struggles supported the Board
in these search processes.
Heidrick & Struggles does not have any
other connection to the Group or the individual
Directors, other than in executive search
processes completed in the year.
Board gender diversity
at 6 March 2025
%
Male
Female
50%
50
%
Hunting PLC
Annual Report and Accounts 2024
121
Strategic Report
Corporate Governance
Financial Statements
Other Information
Corporate Governance Report
continued
Board of Directors and Executive Committee
In accordance with the UK Listing Rules, the Company is required to provide the information below, with the applicable reference date for this data being 31 December 2024. To collect this data, the Company
asked members of the Board and Executive Committee to respond, in confidence, to a questionnaire.
Gender
Number of
Board members
% of Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management*
% of executive
management
Men
4
50
4
9
90
Women
4
50
0
1
10
Other categories
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
Ethnicity
Number of
Board members
% of Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management*
% of executive
management
White British or other White (including minority-white groups)
7
89
4
9
90
Mixed/Multiple Ethnic Groups
–
–
–
–
–
Asian/Asian British
–
–
–
1
10
Black/African/Caribbean/Black British
1
11
–
–
–
Other ethnic group
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
*
‘Executive management’ refers to members of the Executive Committee, excluding the Executive Directors. The number of members reduced by one on 1 January 2025, following a retirement.
With this gender balance and current allocation of roles within the composition of the Board, Hunting is compliant with two of the three targets specified within the UK Listing Rule 6.6.6R(9)(a), with the
target of at least one senior Board position being held by a woman not being met. The current Board profile of senior positions has been in place for a number of years, with the Directors anticipate that
this non-compliance being resolved by no later than 2027 as further refreshing of the Board continues.
The Board continues to review the Group-wide ethnicity profile and will likely target a diversity profile for the senior management team similar to the whole workforce.
Hunting PLC
Annual Report and Accounts 2024
122
Strategic Report
Corporate Governance
Financial Statements
Other Information
Creation of sustainable value for our stakeholders
Purpose
At the heart of Hunting’s long-term strategy
and success is a reputation based on trust
and reliability.
Hunting’s products are designed to operate in
a safe and reliable way, to ensure our customers
meet their strategic objectives, while protecting
people and the environment. Our strategy aims
to offer technically differentiated products that
meet these customer demands.
We choose to operate in the oil and gas industry,
which supports the energy demands of today’s
global community. We also supply mission critical
parts to other sectors, such as defence, medical
and aerospace.
Our customers are constantly pursuing higher
levels of safety and reliability and better
efficiencies, leading to a lower cost of operation for
themselves, while aiming to be good stewards of
the environment, through a safe and responsible
approach to oil and gas field development.
This drives our ambition to deliver innovative
technologies and products to enable us to lead
the market and be the supplier of choice.
Our products and services include precision
engineered components that are quality-assured
to exceed the highest levels of industry
regulation. Our employees are highly trained to
ensure our operations are safe and deliver total
customer satisfaction.
The Directors have approved Hunting’s continued
focus on energy-related markets, while using the
earnings generated from that sector to diversify
into other non-oil and gas sectors that utilise our
core competencies and offer an attractive return.
Corporate Governance Report
continued
Our purpose – to be a highly trusted innovator and manufacturer of technology
and products that create sustainable value for our stakeholders.
Purpose
Our purpose shapes our strategic decisions
and drives our business model
Our culture and values are aligned with our purpose
Business strategy
(page 10)
Business model
(page 20)
Risk management
(page 102)
Our culture and values
underpin our business model
Culture and values
(page 124)
Hunting PLC
Annual Report and Accounts 2024
123
Strategic Report
Corporate Governance
Financial Statements
Other Information
Corporate Governance Report
continued
Culture and values
Our culture is the shared way that we do things in the Company and is underpinned by our core values of respect, honesty, integrity, innovation and reliability.
The Company has been operating since 1874 and has a long history with a strong culture of excellence. At the heart of Hunting’s culture is our people.
Our culture is shaped and determined by the way we:
Attract and retain people
Training and development
To ensure we deliver for our
customers, we train and develop
our people to make sure we
maintain a highly skilled workforce
ready to deliver quality-assured
products and services.
Fair remuneration
To retain our staff, our employees
are fairly remunerated, which,
in addition to a competitive base
salary, can comprise a range of
benefits. Given the competitive
landscape of our industry, our
base levels of pay are well above
minimum wage thresholds.
Safety
Zero harm to our employees.
Key metrics
• HSE hours of training per
employee;
• Voluntary turnover rate;
• Average employee tenure;
• Salary and benefits;
• Talent development;
• Succession planning;
• Total recordable incident
rate; and
• Total near-miss frequency rate.
Work together
Speak up
Our culture encourages a
“speak up” environment to enable
our processes to be improved, but
also to address possible concerns
from all levels of staff.
Equity and inclusion
Hunting prides itself on being a fair
and responsible employer. We are
committed to creating a positive
workplace environment for all of
our employees; one that is safe,
respectful, fair and inclusive, and
free from any form of harassment,
bullying or discrimination.
Diversity and inclusion
The Company recognises the
business benefits of having a
diverse workforce, including a
diverse Board, as this supports
the delivery of high performance
and increases the effectiveness
of the Company.
Key metrics
• Diversity of employees;
• Diversity at management level;
• SafeCall reports; and
• Employee engagement survey.
Do business in a responsible
and sustainable way
Strong HSE and quality
assurance ethic
We seek to achieve and maintain
the highest standards of safety
for our employees, customers,
suppliers, and the public.
Looking after local communities
The Board encourages community
focused initiatives, with the
Executive Committee responsible
for identifying local activities and
projects to support. This delegation
allows regional cultural practices
to be taken into account.
Commitment to minimising
our impact on the environment
We protect and minimise our
impact on the environment in
which we operate, and where our
products are used. We focus on
setting targets for, and achieving,
emissions reductions and
mitigating climate-related risks.
Key metrics
• Total recordable incident rate;
• Total near-miss frequency rate;
• Internal manufacturing reject rate;
• Charitable donations;
• Scope 1, 2 and 3 emissions; and
• ISO accreditation of facilities.
Make decisions
Flat management structure
The Group’s flat management
structure has short chains of
command, which allows for rapid,
considered decision making that
empowers and enables our
employees to be part of the process
to take the Company forward.
Ongoing engagement with
our shareholders, customers,
suppliers, and employees
Stakeholder engagement is
a key element for our culture as
our stakeholders enable Hunting
to deliver its strategy.
Incorporating environmental
concerns into our business
decisions
Our operating principles are
focused on containing and
reducing our carbon footprint.
Key metrics
• Employee engagement survey;
• Town hall meetings;
• NED engagement meetings;
• Hunting 2030 Strategy targets;
and
• Customer satisfaction surveys.
Maintain high business
standards
Code of Conduct and Supplier
Code of Conduct
Hunting’s Code of Conduct
underpins all our engagements,
internally and externally.
Internal and external audit
& assurance, risk assessment
Hunting is committed to carrying
out its business in a responsible
way and holds itself to high
standards of honesty and integrity.
Long-term relationships
with core stakeholders
Creating positive, long-term
relationships with our key
stakeholders ensures that
we are sustainable.
Key metrics
• Code of Conduct training;
• Rolling out Supplier Code
of Conduct;
• Cyber security training;
• Prompt payment of suppliers;
• Total recordable incident rate;
• Total near-miss frequency
rate; and
• ESG metrics linked to
remuneration and included
in short- and long-term
incentive plans.
Hunting PLC
Annual Report and Accounts 2024
124
Strategic Report
Corporate Governance
Financial Statements
Other Information
Corporate Governance Report
continued
Board engagement
The Directors have oversight of all stakeholder
engagement activities and receive reports
on regional activities throughout the year.
The Board meets shareholders as part of
an investor relations programme of work which
includes the Company Chair, Senior Independent
Director, Chief Executive, Finance Director,
Company Secretary, and Deputy
Company Secretary.
All the Directors participate in employee
engagement initiatives.
Engagement with Customers and Suppliers
is primarily delegated to the Chief Executive
and Executive Committee members.
The Board has considered its engagement
mechanisms with its various stakeholders
and confirm that they remain effective.
Stakeholder engagement
Details of engagement activities between all our
key stakeholders and the Board can be found
within the Strategic Report, on pages 25 to 32.
Engagement processes have been embedded
within all business units to enhance transparent
two-way dialogue between the Board and the
Group’s employees.
During the year, the Board met with employees
at our AmeriPort, Texas facility, as part of ongoing
engagement programmes. Annell Bay in her role
as designated Director for employee engagement
(up to 1 February 2025) met members of the
workforce on a number of occasions throughout
the year.
Our employees are also encouraged to engage
in dialogue with management to raise issues
of concern. Keith Lough, the Senior Independent
Director, is the primary point of contact for staff
or other key stakeholders to raise, in confidence,
any concerns they may have over any possible
improprieties.
These procedures are supported by an
independent reporting service operated by
SafeCall, where confidential matters can be
raised with the Board.
In the year, the Directors reviewed the
organisational structure of the Group, noting its
simplicity, with short chains of command to allow
for rapid business decision making. It was noted
that this also allowed all levels of the workforce
to communicate with the senior management
team directly.
As part of its regular Board meeting schedule,
the Directors review HSE and Quality Assurance
reports from the Group’s global operations.
In line with the recommendations of the
Code, the Board has established procedures
to monitor culture and to ensure the views of
the workforce are understood by the Directors.
In 2023, the Group completed a second,
all-employee engagement survey. The results
of the survey were reviewed by the Directors,
with improvements in engagement being noted
since the last survey in 2019. This process will
be repeated in 2025.
Shareholder views
The Company Chair and Senior Independent
Director met with shareholders in January 2024
and January 2025 to discuss governance,
remuneration strategy, and other matters.
Between July 2023 and April 2024, Annell Bay,
as Chair of the Remuneration Committee,
met with shareholders to discuss the new
Directors’ Remuneration Policy and Long-term
Incentive Plan.
During the year, the Chief Executive, Finance
Director, Company Secretary, and Deputy
Company Secretary also regularly met
shareholders to discuss performance and
strategy. Following these meetings, investor
feedback reports are prepared by the Group’s
advisers and are circulated to the Directors.
Annual General Meeting
The Annual General Meeting (“AGM”) of the
Company is the normal forum for all shareholders
to meet the Directors and to ask questions about
the strategy and performance of the Group.
The formal business of the AGM includes
receiving the Annual Report and Accounts,
approving remuneration policies and outcomes,
re-electing Directors, appointing the auditor and
providing the Directors with powers to transact
Company business on behalf of its members.
The Chief Executive normally provides
a presentation on the Group’s performance
and answers questions from shareholders.
At the Company’s AGM in April 2024, an open
meeting was held where shareholders had the
opportunity to meet the Directors and to ask
questions. All resolutions were passed at the
AGM with good majorities.
Resolution 4 of the AGM, to approve the annual
report on remuneration, received 76% votes
in favour. As required by the UK Corporate
Governance Code when shareholder support
is less than 80%, an engagement process was
initiated in April 2024 to understand the views
of shareholders and the reasons for this lower
level of support. In June 2024, Stuart Brightman,
Hunting’s Company Chair, met with
shareholders, where one shareholder noted
that the level of annual bonus deferral ought to
be increased; however, following discussion it
was agreed that this would be kept under review.
Please see page 139 for further detail.
The process concluded in August 2024, with
a statement being published on the Company’s
website at www.huntingplc.com.
Details of the resolutions put to shareholders
at the meeting can be found within the Notice
of Meeting located within the “General Meetings”
section of the Company’s website
www.huntingplc.com.
The Company’s 2025 AGM is again being
planned as an open meeting. In addition to going
to the AGM venue, shareholders are also able to
access the AGM via a webcast, where questions
can be submitted, ahead of and during the
meeting, to be answered by the Board.
Speak up/whistleblowing service
An independent and anonymous whistleblowing
reporting service has been in place for many
years, allowing any employee access to the
Board to raise matters of concern. During the
year, there were three reports received through
the SafeCall service (2023 – six reports). Reports
received are reviewed by Keith Lough, the
Group’s Senior Independent Director, who also
receives and approves all investigation reports
and corrective actions.
Hunting PLC
Annual Report and Accounts 2024
125
Strategic Report
Corporate Governance
Financial Statements
Other Information
Responsibilities of the Company Chair
• Lead and build an effective and balanced Board;
• Chair meetings of the Board, ensuring the agenda and materials are fit for purpose;
• Ensure the Directors are provided with accurate, timely and relevant information;
• Promote good dialogue between all Directors, with strong contributions encouraged
from all Board members;
• Meet the non-executive Directors without the executive Directors present;
• Discuss training and development with the non-executive Directors;
• Arrange Director induction programmes;
• Arrange an annual Board evaluation and act on its findings; and
• Ensure shareholders and other stakeholders are communicated with effectively.
Responsibilities of the Chief Executive
• Manage the day-to-day activities of the Group;
• Make strategic planning recommendations to the Board and implement the agreed Board strategy;
• Identify and execute new business opportunities, acquisitions and disposals;
• Ensure appropriate internal controls are in place;
• Report to the Board regularly on the Group’s performance and position; and
• Present to the Board an annual budget and operating plan.
Responsibilities of the non-executive Directors
• Provide independent challenge to executive management on the proposed strategy;
• Monitor the execution of the approved strategy and of the financial performance of the Company
on an ongoing basis;
• Ensure executive management remains motivated and incentivised through a responsible
remuneration policy; and
• Ensure the integrity of financial information and that internal control and risk management
processes are effective and defensible.
Responsibilities of the Senior Independent Director
• Provide a sounding board for the Company Chair and serve as an intermediary to other Directors;
• Be available to shareholders, should the normal channels through the Company Chair and Chief
Executive not be appropriate;
• Chair meetings of the Board in the absence of the Company Chair;
• Lead an annual performance evaluation of the Company Chair, supported by the other
non-executive Directors;
• Oversee the Group’s whistleblowing reports and responses; and
• Attend meetings with shareholders to develop a balanced understanding of any issues or concerns.
Responsibilities of the Company Secretary
The Company Secretary is appointed by the Board and supports the Company Chair in providing
all materials and information flows between the executive and non-executive Directors, specifically
on matters of governance and regulatory compliance. The Company Secretary is also available
to the Board and all its Committees for advice and ensures that all procedures are followed.
Directors’ and officers’ liability insurance
Hunting maintains insurance against certain
liabilities which could arise from a negligent act
or a breach of duty by the Directors and Officers
in the discharge of their duties. This is a qualifying
third-party indemnity provision that was in force
throughout the year, for both the parent Company
and its subsidiaries.
External appointments
The Group has procedures in place that permit
the executive Directors to join one other company
board. In the year, neither the Chief Executive
nor the Finance Director held any external
board appointments.
Corporate Governance Report
continued
Conflicts of interest
Each Director is required to declare any potential
conflict of interest that exists, or which may arise.
These are formally recorded by the Company
Secretary. Appropriate decision making, in light
of this declaration, is undertaken which could
include a Director not participating in a Board
decision or vote. Each Director is required
to complete a declaration of known conflicts
of interest annually.
Given that Mr Lough and Ms Krajicek are
both former Directors of Capricorn Energy PLC,
and Mr Lough being a former Director of Gulf
Keystone Petroleum Limited, the Board
discussed a possible conflict of interest in
the appointment of Ms Krajicek. Following
discussion, the Board agreed that no conflicts
of interest existed and both Mr Lough and
Ms Krajicek are fully independent.
Division of responsibilities
(Section 2 of the Code)
At 6 March 2025, the Hunting Board comprises
the independent non-executive Company Chair,
Chief Executive, Finance Director and five
independent non-executive Directors, one
of whom is the Senior Independent Director.
The profiles and experience of each Director
are found on pages 116 and 117. In line with the
Code’s recommendations, the Notice of Annual
General Meeting incorporates details of the
contribution in the year by each Director and the
Board’s reasons for proposing the re-election
of each Director.
There is a clear division of responsibilities between
the Company Chair and Chief Executive, with the
Company Chair required to lead the Board, while
the Chief Executive runs the Group’s businesses,
as shown on the right.
Hunting PLC
Annual Report and Accounts 2024
126
Strategic Report
Corporate Governance
Financial Statements
Other Information
Executive Committee
The Group has an Executive Committee (“ExCo”)
comprising the senior leaders of the Group, the
executive Directors, and the Company Secretary.
The ExCo meets formally four times a year to
discuss the quarterly performance of each
operating segment, strategic initiatives, including
the progress of capital investment programmes,
Quality Assurance and HSE performance, in
addition to Human Resources, Information
Technology and Risk Management reports.
For further information on the biographical details
of the Executive Committee, please see page 118.
Composition, succession
and evaluation
(Section 3 of the Code)
Board appointments
All appointments to the Board are in accordance
with the Company’s Articles of Association and
the Code and are made on the recommendation
of the Nomination Committee. Recruitment of
new Directors follows Group policy, including
the formulation of a detailed description of the
role that gives consideration to the required skills,
experience and diversity requirements for the
process. The Directors usually review a list of
candidates, prior to a shortlist being recommended
by the Nomination Committee, ahead of
face-to-face interviews with each Director.
Board independence
(including Company Chair)
at 6 March 2025
Independent
Non-independent
Board independence
(excluding Company Chair)
at 6 March 2025
Independent
Non-independent
75%
25%
71%
29%
Corporate Governance Report
continued
Margaret Amos was appointed on 10 January
2024, and Cathy Krajicek was appointed on
3 March 2025 as new, independent, non-executive
Directors of the Board, in line with the succession
and rotation recommendations tabled by the
Nomination Committee.
Jay Glick stepped down as a Director at
the conclusion of the AGM on 17 April 2024.
On 2 February 2024, Annell Bay was appointed
for a further 12-month period, and stepped down
as a Director on 1 February 2025.
Board skills and experience
The expertise and competencies of the
non-executive Directors are noted in the table
below, and underpin the balance of skills and
knowledge of the Board.
Director
Expertise
Margaret Amos
Accounting and finance, corporate planning, aviation markets,
and UK quoted companies.
Stuart Brightman
Oilfield services and manufacturing, investor relations, business transformation,
and US quoted companies.
Carol Chesney
Accounting and finance, UK corporate governance, ethics compliance,
and UK quoted companies.
Paula Harris
Oilfield services and manufacturing, US energy market development,
investor stewardship, and ESG.
Cathy Krajicek
Upstream oil and gas, health and safety, technology and innovation,
and UK quoted companies.
Keith Lough
Accounting and finance, upstream oil and gas, UK energy regulation and market
development, and UK quoted companies.
Board evaluation
In H2 2024, the Board undertook a Board and Committee Effectiveness Review, which was
completed by Clare Chalmers Limited. All Directors and key members of the senior leadership team,
who regularly present to the Board, were interviewed as part of the process, with Board and Committee
meeting observations taking place in August 2024. A review of internal documents was also undertaken,
including Board papers, financial and other reports, and meeting minutes. Key areas highlighted for
improvement included training and succession planning, suggestions of more Board visits to Group
facilities, and the possible streamlining of certain Board information. These recommendations will
be implemented in the coming years. Ms Chalmers has no other connection to the Company
or the individual Directors, other than in this process.
Board independence
On 5 December 2023, the Nomination
Committee recommended the appointment of
Annell Bay for a further 12-month period from
2 February 2024, which gave a total tenure of ten
years. Ms Bay stepped down as a Director on
1 February 2025.
Following the appointments of Margaret Amos
on 10 January 2024 and Cathy Krajicek on
3 March 2025, at the date of signing these
accounts, being 6 March 2025, the Board,
including the Company Chair, comprises 75%
independent non-executive Directors. Excluding
the Company Chair, the Board comprised 71%
independent non-executive Directors.
The Board, including the Chair, has access
to professional advisers, at the Company’s
expense, to fulfil their various Board and
Committee duties.
Hunting PLC
Annual Report and Accounts 2024
127
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration
(Section 5 of the Code)
Clarity and simplicity
The Directors’ Remuneration Policy is based on fixed and variable emoluments. Fixed emoluments
are benchmarked against other global energy services companies and UK listed companies,
to ensure the Company can attract and retain talent. Variable emoluments are based on
two structures, an annual bonus and a long-term incentive plan.
Both variable structures are based on the Group’s disclosed key performance indicators,
including both financial and non-financial measures, and only pay out when performance
has been achieved. The Chief Executive’s remuneration is benchmarked against global peers,
who are mostly headquartered in the US, while the Finance Director is benchmarked against
comparable roles within UK listed companies of similar size and complexity.
Non-executive Director fees are set at levels that take into account the time commitment and
responsibilities of each role. The non-executive Directors do not receive cash bonuses or other
variable emoluments. The fees are benchmarked against other companies of a similar size,
profile and profitability and are reviewed annually by the executive Directors.
The Company Chair’s fee is set by the Remuneration Committee.
The pay structures of the senior management team and wider workforce are generally based
on the Company’s shareholder approved Directors’ Remuneration Policy, and can include pension
and healthcare benefits as well as an annual bonus and long-term incentives. Shareholder
engagement is a key theme of the Directors’ Remuneration Policy, with proactive engagement
occurring whenever major changes to the Policy or Committee decision making are contemplated.
The Committee is satisfied that, over time, shareholder feedback has been reflected in the
Directors’ Remuneration Policy.
Risk, predictability and proportionality
The Committee believes that the Directors’ Remuneration Policy aligns with the risk profile of the
Company, encouraging growth in the long term and discouraging excessive risk taking. The Policy
is weighted towards variable pay on the delivery of long-term growth. As noted in the chart on
page 129, the remuneration paid to the Chief Executive over time has aligned well with the Group’s
performance, with annual bonus and long-term incentives only vesting on performance.
Alignment
The Board and the Remuneration Committee have reviewed the Company’s purpose, values and
culture and believe that the remuneration framework operated by the Company encourages strong
performance, based on a culture of honesty and integrity and putting stakeholder needs at the
forefront of our strategic priorities.
Corporate Governance Report
continued
The current Directors’ Remuneration Policy
was approved by shareholders on 17 April 2024.
The Policy aligns Hunting’s remuneration
practices with the 2018 UK Corporate
Governance Code, and includes:
• Increasing the alignment of the pension
arrangements of executive Directors with
the workforce; and
• Introducing a post-employment shareholding
policy for the executive Directors.
In respect of the 2024 Directors’ Remuneration
Policy and the 2018 Code, the Committee notes
the following:
• The Company’s long-term incentive
arrangements extend to a five-year time frame,
with a three-year vesting period and a two-year
post-vesting holding period;
• Malus and clawback provisions are in place
for all variable remuneration, with additional
triggers introduced to reflect best practice;
• The Committee has flexibility within the
Directors’ Remuneration Policy to exercise
appropriate discretion; and
• Pension provisions for new executive Director
appointments will align with the workforce.
Further, in 2021 the Remuneration Committee
introduced ESG and carbon-focused deliverables
into the executive Directors’ personal objectives
contained in the annual bonus plan.
Audit, risk and internal control
(Section 4 of the Code)
The Group’s policies, procedures and approach
to audit, risk and internal control is described
within the Risk Management section (pages 102
to 109) and the Audit and Risk Committee Report
(pages 161 to 166) of the Annual Report and
Accounts. The Risk Management section
includes information on the Group’s principal
and emerging risks, as required by the Code.
Hunting PLC
Annual Report and Accounts 2024
128
Strategic Report
Corporate Governance
Financial Statements
Other Information
The following chart summarises the components of executive remuneration and the key performance
indicators that are inputs to the remuneration outcomes.
The Board believes that the remuneration
framework aligns with the purpose and culture
of the Group, which is based on fair remuneration
and reflects performance in the long term.
This framework is also in place for the senior
management of the Group, with participation
in annual bonuses and inclusion in the long-term
incentive scheme operated by the Company also
featuring in emolument structures in many levels
of the workforce.
Fixed
Variable
Summary of remuneration structure and KPIs
0
1,000
3,000
2,000
4,000
5,000
6,000
7,000
8,000
$k
2024
2023
-40
-60
-20
0
20
40
60
80
Chief Executive Pay – $k (left axis)
Adjusted PBT – $m (right axis)
2022
2021
$m
100
Adjusted result before tax ($m) vs Chief Executive pay ($k)
Corporate Governance Report
continued
Source: Company
Base salary
Benefits
Pension provision
Annual bonus
Long-term
incentive plan
KPIs:
Adjusted profit before tax
ROCE
Personal performance
objectives
KPIs:
ROCE
TSR
Adjusted diluted EPS
FCF
Safety and Quality
Hunting PLC
Annual Report and Accounts 2024
129
Strategic Report
Corporate Governance
Financial Statements
Other Information
Roadmap to compliance
with the 2024 UK Corporate
Governance Code
The 2024 UK Corporate
Governance Code (“2024 Code”)
was published in January 2024,
with the Directors reviewing the
key changes to the Provisions
and Principles early in the year.
The Directors will be reporting the
Company’s compliance with the
2024 Code, with the exception of
Provision 29, in the 2025 Annual
Report and Accounts, to be
published in March 2026.
Policies
In 2024, the Group’s central compliance
function completed a review process of the
Group’s policies, in line with the requirement
of Principle A of the 2024 Code.
The Directors are satisfied that appropriate
policies covering all key operational, financial,
and compliance matters are in place.
The Group utilises a Group Manual, which
contains all of the key accounting policies and
procedures, which is also being revised in the
year, ahead of 2026, when Provision 29 is
to be reported against.
Culture
The Directors approved a framework to monitor
and report on culture, in line with Principle C of
the 2024 Code. The Board, through the Ethics
and Sustainability Committee, has agreed that
the metrics noted on page 124 will be adopted
for reporting across the year. Further, the Board
also agreed that each Director would increase
visits to key facilities to ensure the views of
employees are directly fed to the Board going
forward, in parallel to the use of the Gallup Q12
survey, which is to be repeated in 2025.
Risk management
During the year, the Group’s risk management
procedures have been enhanced, following the
appointment of a Group Risk Manager in 2023.
New risk identification processes were
introduced, with the Directors completing a risk
workshop to agree the strategic and principal
risks facing the Group, as the Hunting 2030
Strategy is being executed.
This has led to a fully integrated risk
management framework being implemented
across the Group which covers financial,
operational, and compliance risks, including
climate and environmental risks.
In 2025, further work on the Group’s risk universe
and culture will be completed.
The Group has also commenced workshops
with each of the product groups and operating
segments in support of this work.
These workstreams have directly interfaced
with the work on internal control noted below.
Internal control
Provision 29 of the 2024 Code requires boards
to monitor and review their company’s risk
management and internal controls. We are
aiming to report our compliance with Provision
29 within the 2026 Annual Report and Accounts,
to be published in March 2027.
In the year, a process to identify material controls
across the Group commenced, including the
determination of the internal controls over financial
reporting and entity level controls. A review
of Group IT controls was also undertaken and
an initial determination of non-financial controls,
including QAHSE information and compliance
procedures was commenced.
A Group Internal Controls Manager was
appointed in mid-2024 to assist in the review and
documentation of the Group’s internal controls,
and in January 2025 a new software platform
(AuditBoard) was purchased, which will be used
by the Group’s central finance and internal audit
functions to assess compliance and provide
internal assurance to the Board about the
Group’s internal control environment.
As part of the review of the Group’s internal control
environment as part of the compliance procedures
for the 2024 UK Corporate Governance Code,
we will also look to address some of the control
deficiencies identified in the 2024 year-end audit.
In January 2025, a Group IT Systems Manager was
also appointed to commence the standardisation
of the D365 ERP system, to enhance consistency
of reporting across the Group’s business units
and to input into the wider financial controls
enhancement, which is being undertaken.
In H1 2025, it is anticipated that preliminary testing
of assurance procedures against a number
of material financial controls will be completed,
prior to wider roll out.
Remuneration
In 2024, the Company gained strong shareholder
approval for the new Directors’ Remuneration
Policy (“Policy”) and Long Term Incentive Plan.
The new Policy was drafted with the requirements
of the 2024 Code in mind and contains malus
and clawback provisions (Provision 37).
On behalf of the Board
Stuart M. Brightman
Company Chair
6 March 2025
Hunting PLC
Annual Report and Accounts 2024
130
Strategic Report
Corporate Governance
Financial Statements
Other Information
Nomination Committee Report
Member
Invitation
Number of meetings held
6
Number of meetings attended
(actual/possible):
Margaret Amos
(from 10 January 2024)
5/5
–
Annell Bay (to 1 February 2025)
6/6
–
Stuart Brightman (Committee Chair
from 17 April 2024)
6/6
–
Carol Chesney
6/6
–
Bruce Ferguson
–
6/6
Jay Glick (Committee Chair
to 17 April 2024)
3/3
–
Paula Harris
6/6
–
Jim Johnson
–
6/6
Cathy Krajicek (from 3 March 2025)
0/0
–
Keith Lough
5/6
–
The work of the Nomination
Committee during 2024 has been
focused on delivering a seamless
succession of the Company
Chair, and the commencement
of a new process to appoint a
new independent non-executive
Director. This latter process was
completed on 3 March 2025,
when we announced the
appointment of Cathy Krajicek as
a new, independent, non-executive
Director of the Company.
Introduction
Since our last Annual Report, Hunting has seen
the retirement of Jay Glick (Company Chair) and
Annell Bay (Remuneration Committee Chair).
Their wise counsel and expertise on many critical
issues facing Hunting over the past decade has
assisted in the success the Company sees today,
with strong markets and a solid balance sheet
on which to grow.
We continue to refresh the profile of the Board,
with Margaret Amos joining in January 2024 and
Cathy Krajicek joining in March 2025. Therefore
we look to the future with a strong roster of
Directors with deep skills and experience within
our chosen end-markets, supported by an
experienced senior leadership team.
Composition and frequency of meetings
The Committee comprises the Company Chair
and the independent non-executive Directors
of the Company. Stuart Brightman chairs the
Committee. The Committee meets as required
to discuss succession matters at both the Board
and Executive Committee levels.
During 2024, the Committee met six times
(2023 – six times).
The Committee operates under written
Terms of Reference approved by the Board,
which are published on the Company’s website
at www.huntingplc.com. The attendance of the
Nomination Committee during 2024 is noted
in the table on the left.
Terms of reference
At its December 2024 meeting, the Committee
reviewed its terms of reference.
Externally facilitated effectiveness review
In H2 2024, the Board completed an externally
facilitated Board effectiveness review, using Clare
Chalmers Limited. The Nomination Committee’s
processes and procedures were reviewed as
part of this wider process, and the results were
reported to the Directors at a briefing in
December 2024. The review was co-ordinated
by the Company Chair, Company Secretary,
and Deputy Company Secretary. Clare Chalmers
Limited has no other connection to the Company.
For further information, please see page 115.
Company Chair succession
During 2023, the Nomination Committee
completed a process to appoint a new Company
Chair. The details of the process are contained
in the 2023 Annual Report and Accounts.
On Monday 8 January 2024, the Nomination
Committee met to receive the recommendation
of the sub-Committee appointed to complete
the process, with Stuart M. Brightman being
recommended as the successor to John (“Jay”)
F. Glick as Hunting PLC’s Company Chair. This
recommendation was agreed by the Nomination
Committee, and then by the wider Board at the
Meeting of Directors on Monday 8 January 2024.
Mr Brightman, therefore, succeeded Mr Glick
as Company Chair at the conclusion of the 2024
AGM on 17 April 2024, when Mr Glick retired as
a Director and stepped down from the Board.
Appointment of Margaret Amos
As noted in last year’s Annual Report and
Accounts, Margaret Amos was appointed
as a Director of the Company on Wednesday
10 January 2024, and automatically retired and
offered herself for appointment by shareholders
at the 2024 AGM.
Heidrick & Struggles assisted the Committee
in the search process for Dr Amos.
Stuart M. Brightman
Chair of the Nomination Committee
Hunting PLC
Annual Report and Accounts 2024
131
Strategic Report
Corporate Governance
Financial Statements
Other Information
Reappointment of Carol Chesney
and Keith Lough
The Committee met in February 2024, to
consider the reappointment of Carol Chesney
and Keith Lough for a third three-year term,
commencing on 23 April 2024.
The Committee considered the independence
of Mrs Chesney and Mr Lough, and their ongoing
contribution to the Board, and recommended the
reappointment to the wider Board at its meeting
in February 2024.
Hunting’s current Board
profile reflects a good balance
between energy and non-oil
and gas expertise as well as
an excellent gender profile.
With the appointment of
Cathy Krajicek we have
strengthened our oil and gas
expertise and look forward
to her wise counsel as the
energy industry evolves.
Reappointment of Annell Bay
Annell Bay was appointed to the Board on
2 February 2015 and was appointed Chair of
the Remuneration Committee in August 2018.
To provide continuity to the Board and
Remuneration Committee as the shareholder
consultation on the new Directors’ Remuneration
Policy (the “new Policy”) concluded in Q1 2024,
the Nomination Committee proposed the
reappointment of Ms Bay for an additional
12-month period, to oversee the completion of
discussions with shareholders and attend the
2024 AGM to answer possible shareholder
questions on the new Policy.
Ms Bay was duly reappointed for a final
12 months on 2 February 2024 and, in line with
the Company’s normal re-election procedures,
automatically retired and offered herself for
re-election at the 2024 AGM. Ms Bay received
the necessary votes for re-election and retired
from the Board on 1 February 2025, after
completion of ten years’ service to the Company.
The Directors would like to thank Annell for
her excellent contribution to the Company during
her tenure as a Director, offering her skills and
expertise through the COVID-19 pandemic and
as the Company implemented its Hunting 2030
Strategy, which management continues
to execute.
Retirement of Jay Glick
As noted above, Jay Glick retired as a Director
at the 2024 AGM on 17 April 2024. Jay was
appointed to the Board on 2 February 2015 and
was appointed Company Chair on 1 September
2017. Through Jay’s tenure as Company Chair,
he led the Group through the COVID-19
pandemic, which was an extremely challenging
time for the Board of Directors, the senior
leadership team and wider workforce.
Jay’s experience and leadership through the 2020
to 2021 period, and since this time as Hunting
has returned to strong growth, is testament to the
wise advice offered.
The Directors wish Jay a happy retirement
and thank him for his effective leadership
since appointment.
Appointment of Catherine Krajicek
With the retirement of Jay Glick in April 2024
and Annell Bay in February 2025, the Board
has lost over 60 years of energy-related sector
expertise, in both the exploration and production
and energy services sub-sectors of the industry.
In September 2024, therefore, the Committee
initiated a new search process to appoint a new,
independent non-executive Director of the
Company, with specific focus on energy
expertise. Heidrick & Struggles was appointed
to support the Directors in this new process.
During Q4 2024, a long list of potential
candidates was reviewed by the Directors
and a shortlist assembled in November 2024.
Interviews with the shortlist candidates were
conducted in December 2024 and January 2025.
On 28 February 2025, the Nomination
Committee recommended to the Board the
appointment of Catherine (“Cathy”) Krajicek,
with Cathy joining the Board on 3 March 2025.
Cathy has joined all of the Board’s Committees
from this date.
Further, Cathy will automatically retire at the 2025
AGM and will offer herself for reappointment by
shareholders, in line with the Company’s Articles
of Association.
Board roles
Dr Amos was appointed Chair of the Ethics
and Sustainability Committee on 17 April 2024,
with Mr Brightman retaining the Chair of the
Nomination Committee as well as his main
Company Chair duties.
Gender balance
With the appointments of Dr Amos and
Ms Krajicek, and following the retirement of
Mr Glick on 17 April 2024, the Hunting Board
reports an equal gender balance.
Senior management development
and succession
During the year, the Nomination Committee
and wider Board have received reports on the
development of the Group’s senior management
team, with Russell Reynolds being appointed to
assist executive management with this process.
Throughout the year, all managing directors
of the Group, who lead each operating segment,
have presented to the Board as part of a broader
initiative to increase interaction between the
Directors and the Company’s senior leadership
team. The Group’s Chief HR Officer also
submitted detailed succession plans for key
positions across the Hunting organisation.
On behalf of the Board
Stuart M. Brightman
Chair of the Nomination Committee
6 March 2025
Nomination Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
132
Strategic Report
Corporate Governance
Financial Statements
Other Information
Ethics and Sustainability Committee Report
Member
Invitation
Number of meetings held
2
Number of meetings attended
(actual/possible):
Margaret Amos
(Committee Chair from 17 April 2024)
2/2
–
Annell Bay (to 1 February 2025)
2/2
–
Stuart Brightman
–
2/2
Carol Chesney
2/2
–
Bruce Ferguson
–
2/2
Jay Glick (Committee Chair
to 17 April 2024)
–
–
Paula Harris
2/2
–
Jim Johnson
–
2/2
Cathy Krajicek (from 3 March 2025)
0/0
–
Keith Lough
2/2
–
The work of the Ethics and
Sustainability Committee has
focused on the expansion of our
carbon reporting and to improve
our external reporting of key
environmental and sustainability
metrics to enable our stakeholders
to better understand the excellent
work which underpins our business
model and strategy.
Introduction
In the year, the Committee received reports on
management’s initiative to expand our scope 3
emissions reporting. In 2023, we began a
process of determining the scope 3 emissions
of the Group’s Hunting Titan operating segment,
predominantly due to the straightforward nature
of the organisation, but also due to the
contribution of Hunting Titan to the Group’s total
emissions. This data was used to extrapolate
Group-level scope 3 emissions for 2023,
as reported last year.
During 2024, management expanded
scope 3 data collection to include the Subsea
Technologies, EMEA and Asia Pacific operating
segments. The 2024 scope 3 carbon emissions
data is, therefore, based on four of the five
operating segments of the Group and provides
a solid foundation for the reporting of Hunting’s
total scope 1, 2 and 3 greenhouse gas (“GHG”)
emissions footprint, from which further carbon
reduction initiatives will be derived in the
coming years.
In 2025, the North America operating segment
will be added to our data collection scope.
The Committee also oversaw procedures to
improve Hunting’s external ESG ratings, based
on better external disclosures, but also improving
our understanding of how we are scored by
a range of third-party reporting agencies.
A clear path to improve our externally published
information has been formulated, which in part
can be seen with the new disclosures in our ESG
and Sustainability Report on pages 68 to 87.
The Committee continues to monitor our human
resources, quality assurance, health and safety,
sanctions and other ethics-related matters.
New workstreams are being agreed with
management that will input into the wider project
on internal control and risk management, which
will include operational and compliance-related
control matters.
In summary, the Committee is well placed to
contribute to the enhanced expectations of the
2024 UK Corporate Governance Code.
Composition and frequency of meetings
The Committee comprises the independent,
non-executive Directors of the Company and
is chaired by Margaret Amos.
Dr Amos joined the Committee on her
appointment as a Director on 10 January 2024.
Jay Glick stepped down from the Committee on
17 April 2024 when he retired as a Director, with
Margaret Amos succeeding him as Committee
Chair on the same date. Stuart Brightman also
stepped down from the Committee on his
appointment as Company Chair.
Annell Bay retired as a Director on 1 February 2025
and stepped down from the Committee on the
same date.
Cathy Krajicek joined the Committee on her
appointment to the Board on 3 March 2025.
The Committee met twice in the year, as planned,
in June and December 2024.
The attendance of the Ethics and Sustainability
Committee is noted in the table on the left.
Margaret Amos
Chair of the Ethics and Sustainability Committee
Hunting PLC
Annual Report and Accounts 2024
133
Strategic Report
Corporate Governance
Financial Statements
Other Information
The 2024 scope 3 carbon
emissions data is based
on four of the five operating
segments of the Group and
provides a solid foundation
for Hunting’s total scope 1, 2
and 3 GHG emissions
footprint, from which further
carbon reduction initiatives
can be derived in the
coming years.
Terms of reference and
Committee effectiveness
The Committee operates under written terms
of reference approved by the Board, which
are published on the Company’s website at
www.huntingplc.com.
At its December 2024 meeting, the Committee
reviewed its terms of reference and, as part
of the externally facilitated Board effectiveness
evaluation completed by Clare Chalmers Limited,
considered its effectiveness in H2 2024,
concluding that its performance had been
satisfactory during the year.
Responsibilities
The principal responsibilities of the Ethics
and Sustainability Committee are to:
• Monitor the Group’s scope 1, 2 and 3 GHG
emissions and the initiatives to contain and
reduce its carbon footprint;
• Monitor public disclosures in respect of
the Task Force on Climate-related Financial
Disclosures (“TCFD”) framework and the UK
Climate-related Financial Disclosures (“UKCFD”);
• Monitor the risks and opportunities which climate
change presents to the Group’s operations;
• Monitor the quality assurance and health,
safety and environmental reports prepared
by the Executive Committee;
• Monitor the Group’s employee and human
capital matters, including engagement with
Hunting’s workforce;
• Monitor the Group’s interaction with certain
key stakeholders, including customers,
suppliers and communities;
• Monitor the Group’s modern slavery
act initiatives;
• Monitor the Group’s policies and procedures
in respect of sanctioned territories;
• Monitor the Group’s culture;
• Monitor the Group’s whistleblowing
procedures; and
• Monitor the Group’s anti-bribery
and corruption initiatives.
Work undertaken by the Committee
during 2024
The Committee discussed, reviewed, and made
a number of decisions on key areas in 2024,
which are set out below:
Jun
Dec
Carbon and climate
Procedures for measuring and
monitoring the Group’s scope 1, 2
and 3 GHG emissions
•
•
TCFD and UKCFD analysis and
reporting
•
•
Climate scenario reports
•
•
Review resourcing needs
•
Stakeholders
Employee and workforce reports
•
•
Code of Conduct training reports
•
•
Whistleblowing summary reports
•
•
Quality assurance and health and
safety reports
•
•
Community reports
•
•
Ethics
Anti-bribery and corruption reports
•
•
Entertainment and hospitality
summary
•
•
Modern slavery analysis
•
•
Customer and supplier risk analysis
•
•
Sanctions and export compliance
•
•
Review resourcing needs
•
SASB reporting framework
During the year, the Group reported against the
SASB reporting standards for Oil & Gas – Services
and Industrial Equipment & Machinery, which are
noted on pages 86 and 87.
The ISSB has issued its S1 and S2 reporting
standards, which are still being evaluated by
the UK regulator. However, the Committee
anticipates that reporting against these standards
will align with the SASB reporting framework and,
on this basis, is implementing plans to report
S1 disclosures aligned with data reported
under SASB.
Carbon and climate
As noted above, a major workstream has been
completed in 2024 to expand the collection of the
Group’s scope 3 carbon emissions data to four
of the five of the Group’s operating segments.
A third-party expert was commissioned to assist
with the evaluation and processing of the data,
with the results reported in the Strategic Report
on pages 31, 73 and 84.
In 2025, the North America operating segment
will be included in the data collection process,
after which a carbon reduction plan for the whole
Group will be prepared.
The Committee also reviewed the work
completed in the year with respect to the TCFD
and UKCFD reporting requirements, which are
included on pages 88 to 101. Hunting’s TCFD
reporting aligns with the four recommended
pillars of governance, strategy, risk management
and targets. Further, the TCFD disclosures
include the 11 recommended areas of narrative
proposed by the TCFD panel, which was issued
in 2017 and updated in 2021.
For further information on the areas of carbon
and climate, please refer to the Strategic Report.
Employees
The Committee received workforce reports from
the Group’s Chief HR Officer in the year, which
included details of employee changes, tenure and
engagement initiatives undertaken. Of note has
been the focus on the development of talent across
the Company, with training and development
programmes being a key area of consideration.
The HR reports also included diversity and
inclusion planning, which are to be put in place
in the coming years.
Ethics and Sustainability Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
134
Strategic Report
Corporate Governance
Financial Statements
Other Information
Quality assurance and HSE (“QAHSE”)
As part of its review work, the Committee
received quality assurance and health and safety
reports from the Group’s Director for QAHSE.
As noted in the introduction, efforts to increase
our external disclosures on QAHSE, to include
contractor HSE statistics and other key information
monitored by external agencies, has led to
additional information being disclosed in the ESG
and Sustainability Report on pages 68 to 87.
For further information on QAHSE performance,
please refer to the Strategic Report.
Code of Conduct
The Group’s Code of Conduct contains
policies and procedures covering how the Group
conducts business and maintains its relationships
with business partners.
The Code of Conduct deals with a broad range
of issues, including:
• Preventing corruption, including measures that
prevent bribery and corruption in our dealings
with government officials;
• Personal integrity, including money laundering;
• Conflicts of interest;
• Employee share dealing;
• Human rights;
• Harassment and equal opportunity;
• Tax evasion and facilitation of tax evasion; and
• Our approach to national and international
trade, including compliance with laws and
regulations, competition, and export and
import controls.
The Code of Conduct is available on the Group’s
website and is distributed to most customers.
The Committee was pleased that the first phase
of the Code of Conduct training for employees
was completed in the year.
Supplier Code of Conduct
In 2023, the Company also introduced a Supplier
Code of Conduct, which commits businesses
within Hunting’s supply chain to many of the
principles contained in the Company’s Code
of Conduct.
Whistleblowing
The Company’s Senior Independent Director,
Keith Lough, is the primary point of contact for
staff or other key partners of the Group to raise,
in confidence, concerns they may have over
possible improprieties, financial or otherwise.
In addition, the Group engages the services
of SafeCall Limited to provide an independent
and anonymous whistleblowing service available
to staff across all of Hunting’s operations.
All employees have been notified of these
arrangements through the corporate magazine,
Group noticeboards and the Group’s website.
During the year, the posters detailing these
arrangements were refreshed.
Communities
The Committee also reviewed a report that
summarised Community initiatives, which
were undertaken by the Group’s businesses
throughout the year. A number of these initiatives
are described in the Section 172(1) Statement
on page 112.
Bribery Act
In compliance with the UK Bribery Act, Hunting
has procedures in place, including the publication
of anti-bribery and corruption policies and
detailed guidelines on interacting with customers,
suppliers and agents, including specific policies
for gifts, entertainment and hospitality.
Senior managers across the Group are required
to report their compliance activities, including
an evaluation of risk areas.
The Group has completed a screening exercise to
identify relevant employees who face a heightened
risk of bribery, with all relevant personnel
completing a formal training and compliance
course, as part of the Code of Conduct training,
in line with the Group’s procedures.
The Committee reviewed the compliance
procedures relating to the Bribery Act at its
December meeting, which incorporates risk
assessments completed by each business unit
and gifts and entertainment disclosures made
during the reporting period.
The Group’s internal audit function reviews
local compliance with the Bribery Act and reports
control improvements and recommendations
to the Committee, where appropriate.
Modern Slavery Act
The Modern Slavery Act 2015 was enacted in
2016 and requires companies to evaluate internal
and external risks related to human trafficking
and modern slavery. Procedures were introduced
during 2016 and continued in 2024, whereby each
business unit across the Group completed due
diligence on its workforce to highlight employment
risks in relation to trafficking and slavery.
All businesses within the Group also completed
a risk-mapping exercise of their known supply
chain to evaluate those customers and suppliers
to the Group who operate in jurisdictions
where trafficking and slavery is more prevalent.
Hunting published its Modern Slavery Act report
in March 2024, located at www.huntingplc.com.
The new Code of Conduct training course
rolled out during 2023 and 2024 incorporates
information on modern slavery and trafficking
and is completed by all members of staff.
Sanctions and export compliance
The Group sells products to over 70 countries,
which presents a general risk of export and
sanctions compliance.
Hunting has detailed procedures in place that
monitor sales in medium- to high-risk territories,
where end-user disclosures, and company
evaluation and analysis are completed prior
to a sales order being agreed.
Culture
The Board has delegated the monitoring of the
Group’s culture to the Committee. A framework
to monitor and report on culture has been
agreed and the metrics noted on page 124 will
be adopted for reporting across the coming year.
As part of this, the Committee will also assess
how the Company’s culture is embedded across
the Group.
On behalf of the Board
Margaret Amos
Chair of the Ethics and
Sustainability Committee
6 March 2025
Ethics and Sustainability Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
135
Strategic Report
Corporate Governance
Financial Statements
Other Information
Member
Invitation
Number of meetings held
5
Number of meetings attended
(actual/possible):
Margaret Amos
(from 10 January 2024)
5/5
–
Annell Bay
(Committee Chair to 1 February 2025)
5/5
–
Stuart Brightman
(member to 17 April 2024)
3/3
2/2
Carol Chesney
5/5
–
Bruce Ferguson
–
5/5
Jay Glick (to 17 April 2024)
–
3/3
Paula Harris
(Committee Chair from 2 February
2025)
Jim Johnson
5/5
–
–
5/5
Cathy Krajicek (from 3 March 2025)
0/0
–
Keith Lough
5/5
–
Paula Harris
Chair of the Remuneration Committee
Remuneration Committee Report
On behalf of the Board,
I am pleased to present the
Remuneration Committee Report
to shareholders for the year ended
31 December 2024. This letter
provides a summary of the work
completed by the Remuneration
Committee (the “Committee”) in the
year, including the context for the
2024 remuneration, major decisions
taken in the year, determining
remuneration outcomes, and
details of how the new Directors’
Remuneration Policy and new
Hunting Performance Share Plan
were implemented following receipt
of strong shareholder support
at our AGM.
Introduction
2024 has been a year of strong growth in the
Group’s revenue, earnings and returns as our
core energy markets remained generally buoyant
throughout the year.
The Company launched the Hunting 2030
Strategy in 2023, which laid out the strategic
ambitions of the Board to the end of the decade.
The 2030 Strategy highlighted OCTG (Oil Country
Tubular Goods) and Subsea as growth areas
for the Group, and in 2024 the Group delivered
on a number of key milestones, including growth
in these two product groups offset by the
performance in Perforating Systems. The overall
strength in OCTG and Subsea contributed to
the impressive improvement in our financial
results when compared to the prior year.
This demonstrates the increased resilience from
Hunting’s strategy to strengthen and diversify
its revenue streams.
Supporting this new strategy was the formulation
of the new Directors’ Remuneration Policy (the
“new Policy”), which was approved at the 2024
AGM, and aligns the compensation of Hunting’s
most senior executives with its global peers. At
the 2024 AGM, the Committee and wider Board
received compelling support, with 85% of votes
cast in favour of the new Policy. This outcome
provided a clear mandate from investors for our
new remuneration framework. The 2024 Hunting
Performance Share Plan (“2024 HPSP”) was also
approved at last year’s AGM, replacing the 2014
HPSP which had reached the end of its ten-year
life. The 2024 HPSP provides the Committee
with flexibility to grant both performance- and
time-based awards to the executive Directors
in line with the new Policy.
Context of remuneration and key decisions
The total remuneration for 2024 includes one-off
adjustments to base salary that were discussed
with shareholders during the new Policy review.
The total remuneration for 2024 also reflects the
in-year performance that was above the 2024
annual budget and a strong vesting of the 2022
HPSP, which was due to the growth in earnings,
cash flows and returns delivered over the
three-year vesting period of 2022 to 2024.
Approval and implementation of the new
Directors’ Remuneration Policy
The proposals submitted to shareholders
with respect to the new Policy received strong
levels of support at the AGM on 17 April 2024,
aligned levels of remuneration of the executive
Directors with their respective markets, and
also addressed the longer-term succession
needs of the Company. The Chief Executive’s
remuneration is benchmarked against global
peers, who are mostly headquartered in the
US. The Finance Director’s remuneration is
benchmarked against UK listed companies
of a similar size and complexity. Following
the implementation of the new Policy the total
remuneration opportunity of the executive
Directors is around the median against their
peers, which is the long-term strategy of
the Committee.
In establishing pay practices for the executive
Directors, the Remuneration Committee has
endeavoured to align our incentive practices
with the Company’s peers and the wider
workforce. Of particular note was that the Chief
Executive and Finance Director were previously
the only members of the mid-level and senior
leadership team who did not receive Restricted
Stock Units (“RSUs”).
The Group has also delivered
a solid performance across
the three years in the 2022
HPSP grant’s performance
period, with the Company
having positioned itself well
to take advantage of strong
market movements.
Hunting PLC
Annual Report and Accounts 2024
136
Strategic Report
Corporate Governance
Financial Statements
Other Information
To this end, and following detailed shareholder
consultation and approval, the Remuneration
Committee has, under the provisions of the new
Directors’ Remuneration Policy, approved the
grant of RSUs (time-based share awards) to
Messrs Johnson and Ferguson in the year.
Workforce base salary increases were also
awarded in 2024, which averaged 5%. As part
of our consultation process, which took into
account benchmarked data from Mercer and
Pearl Meyer, a 3.5% base salary increase over
the workforce increase was awarded to the
executive Directors. This was discussed with
and approved by shareholders in 2024.
Financial performance
The Company recorded a 51% increase in
adjusted profit before tax year-on-year and
ROCE of 8.86%, a 2.38 percentage point
improvement on 2023’s result. This represents
an “Above Target” performance compared to
the annual budget targets set by the Board in
December 2023. The Committee believes the
financial progress made by the senior leadership
and executive teams in the year also reflect
a significant delivery of the annual strategic
targets and advancement in the delivery of the
operational progress published at the Company’s
Capital Markets Day in 2023 despite the headwinds
in the Perforating Systems product group.
The personal performance objectives set by
the Committee also delivered an “Above Target”
result given the performance in the operational
excellence, succession, GHG emissions
reduction, and other matters delivered by the
executive Directors in the year, and are discussed
in the Annual Report on Remuneration.
As a result of this notable in-year performance,
the 2024 Annual Bonus has vested at 69.0%
of maximum opportunity.
The Group has also delivered a solid
performance across the three years in the 2022
HPSP grant’s performance period, with the
Company having positioned itself well to take
advantage of strong market movements and
delivering on its key priorities. As a result, the 2022
HPSP grant has vested at 98.3% of maximum.
Three-year growth in adjusted diluted EPS is
216%; for ROCE, a 13.23 percentage point
increase; and cash generation, on a cumulative
basis over the three years, was $165.5m on a
pre-capex basis. The Company’s TSR against its
peer group was ranked third against a basket of
13 comparator companies and delivered a return
of 100.4% over the three-year period. Thanks
to impressive ESG performance in the period,
the scorecard also reported a strong vesting,
delivering the near-maximum vesting noted
above. The table below and the graphs to the
right highlight this growth path, emphasising
the impressive execution by management.
The single figure total remuneration outcomes
for the executive Directors for 2024 are:
2024
2023
Chief Executive
$7,522k
$3,561k
Finance Director
$2,212k
$1,239k
The Committee is conscious that the vesting of
the 2022 HPSP is close to maximum performance
and, in determining the final vesting of the awards,
considered whether any discretion should be
applied. The main points of consideration for
the Committee were as follows:
• The historic vesting average of the HPSP is
c.30% (based on the grants vesting between
2016 and 2023), with the current vesting level
exceeding 50% for the first time since 2019,
indicating that, over time, targets have been
stretching and there is strong alignment
between remuneration and performance;
• Discretion was exercised in both 2020 and
2021 to reduce the face value of the grants
under the HPSP by 20% and 22% respectively,
given the subdued share price through the
pandemic, and to prevent a windfall gain being
generated in 2023 and 2024. The share price
of 219.5p on the date of the 2022 grant had
increased by 33% compared to the price
used for the 2021 grants and, therefore, the
Committee did not consider there to be any
potential for windfall gains at the date of grant
requiring a similar reduction at that time;
Remuneration Committee Report
continued
Adjusted diluted earnings per share*
cents
31.4
2024
2023
20.3
2022
4.7
Source: Company
Return on average capital employed*
%
9
2024
2023
6
2022
1
Source: Company
Free cash flow (pre-capex)*
$m
169.8
2024
2023
34.1
2022
(38.4)
Source: Company
Total shareholder return (1-year)*
%
0
2024
2023
(9)
2022
102
Source: Company
Total recordable incident rate
#
0.93
2024
2023
0.91
2022
0.97
Source: Company
Internal manufacturing reject rate
#
0.31
2024
2023
0.20
2022
0.13
Source: Company
Performance and remuneration outcomes
2021
2022
2023
2024
1-year growth
Absolute
3-year growth
Link to remuneration
Adjusted profit (loss) before tax
$(40.6)m
$10.2m
$50.0m
$75.6m
51%
286%
Annual bonus
ROCE
(4.37)%
1.45%
6.48%
8.86%
2.38 points
13.23 points
Annual bonus and HPSP
Adjusted diluted (LPS) EPS
(27.1)c
4.7c
20.3c
31.4c
55%
216%
HPSP
FCF (pre-capex)*
$54.4m
$(38.4)m
$34.1m
$169.8m
398%
212%
HPSP
Share price (31 December)
169p
333p
296p
289p
(2)%
71%
HPSP
*Free cash flow as per the financial statements for the relevant year, excluding tangible and intangible capital expenditure, as defined for the 2022 HPSP grant.
*Non-GAAP measure see pages 255 to 262.
Hunting PLC
Annual Report and Accounts 2024
137
Strategic Report
Corporate Governance
Financial Statements
Other Information
Base salary
Following approval of the new Policy at the AGM
in April 2024, and as outlined to shareholders as
part of the consultation on the Policy changes
and in our 2023 Annual Report on Remuneration,
the executive Directors received a one-off
increase of 3.5% above the workforce (8.5% in
total) effective from 1 January 2024. This
represents only the third time Hunting’s executive
Directors’ salaries have increased since April
2019 (the Directors not having received an
increase in 2020 or 2023, in line with the wider
workforce) as the Committee took a cautious
approach to Directors’ salary increases due to
the effects of COVID-19.
Following the increases and changes to the Policy
in 2024, Hunting’s total remuneration for both
executive Directors is aligned with the median
total remuneration of its global energy peers.
Annual bonus
The 2024 Annual Budget targets, which were set
in December 2023, were linked to the Company’s
KPIs (see pages 153 to 155) that focused on
increased profitability and returns, and which
reflected a further strengthening in the Company’s
core energy markets. In January 2025, the
Committee reviewed the financial out-turn for
2024, which included improvements in adjusted
profit before tax profitability and positive returns
on capital employed, reflecting the notable
performance of the Group’s OCTG, Subsea
and Advanced Manufacturing product groups.
As a result of this performance, an award
of 56.0% of the maximum opportunity of 80%
for the financial portion of the Annual Bonus
was recorded.
• The three-year growth targets were based
on an extended forecast for the Group’s
projected trading performance. This included
independent market data on industry
investment and activity in the medium term,
published by Spears & Associates, who issue
regular projections on which the trading
outlook of the Group is measured. The Group’s
performance has materially exceeded those
market projections reviewed by the Committee
at the time of the grant;
• Management’s strategy of diversifying the
portfolio allowed it to take advantage of the
subsequent growth in oil and gas markets
over the performance period;
• The Committee noted that adjusted diluted
EPS has increased by 216%, with the Group’s
share price appreciating 71% over the same
timescale, strongly outperforming the energy
market increase; and
• Quality and safety both underpin Hunting’s
standing and reputation in the global energy
industry which, in turn, support the Group’s
long-term strategy. Each year, the Committee,
with advice from Mercer, reviews the formulaic
outcome for the quality and safety metrics
within the HPSP against broader contextual
factors when determining the final outcome
and determined that there were no such
factors that would warrant adjusting the
outcome. Details of these performance
metrics can be found on page 155.
Having considered these factors, the Committee
believes that the quantum of the 2022 grant, the
performance targets set, and the final out-turn
provide a fair reflection of performance across
the three-year vesting period and, given the
strong outperformance against expectations,
believe that the vesting at 98.3% is a fair outcome
and that no downward discretion should be
applied to the outcome.
Activities undertaken by the Remuneration Committee during 2024
Jan
Feb
Apr
Aug
Dec
Overall remuneration
•
Annual base salary review
•
Review senior management annual emoluments
•
Review total remuneration against benchmarked data
•
•
Shareholder and proxy group feedback on new Policy
•
•
Items specific to the annual bonus
Approve annual bonus including delivery
of personal performance targets
•
•
Review Annual Bonus Plan rules
•
Agree strategic/personal performance targets for the year ahead
•
•
Items specific to long-term incentives
Approve HPSP vesting and new annual grant
•
Review HPSP performance conditions
•
•
Review HPSP grant performance targets
•
•
•
Governance and other matters
Approve Annual Report on Remuneration
•
Review and approve Remuneration Policy (if required)
•
Review governance voting reports
•
Review AGM proxy votes received for Annual Report
on Remuneration and Policy
•
Review Committee effectiveness
•
Review terms of reference
•
Review resourcing needs
•
Remuneration Committee Report
continued
Adjusted result before tax ($m) vs Chief Executive pay ($k)
0
1,000
3,000
2,000
4,000
5,000
6,000
7,000
8,000
$k
2024
2023
-40
-60
-20
0
20
40
60
80
Chief Executive Pay – $k (left axis)
Adjusted PBT – $m (right axis)
2022
2021
$m
100
Source: Company
Hunting PLC
Annual Report and Accounts 2024
138
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
The Committee also reviewed the delivery of
the executive Directors’ personal performance
objectives applicable to the remaining 20% of
the annual bonus. In line with the outcome of
the financial bonus targets, the Committee noted
the Above Target delivery of the objectives set
at the start of the year, including delivery of
certain milestones in respect of the Hunting 2030
Strategy, and awarded 13% of the maximum of
20% of this portion of the Annual Bonus.
As the threshold targets of each goal set at the
start of the year were exceeded, the Committee
approved the vesting of 69.0% of the maximum
Annual Bonus opportunity for the executive
Directors, which resulted in an Annual Bonus
of $1,213k receivable in the year for the Chief
Executive and $456k receivable for the Finance
Director. This will be delivered in cash, with 25%
of the post-tax cash bonus to be utilised to
purchase Ordinary shares of the Company, which
must be held for two years from the date that the
award vests, in line with the usual operation of
the Annual Bonus Plan.
2022 HPSP awards vesting
As noted above, the vesting of the 2022 HPSP
was near-maximum. The performance conditions
used in the 2022 HPSP were as follows:
Return on Average Capital Employed
(“ROCE”) 25%; adjusted diluted Earnings per
Share (“EPS”) 20%; Free Cash Flow, pre-capex
(“FCF”) 20%; relative Total Shareholder Return
(“TSR”) 20%; and Strategic Scorecard 15%.
The Committee adjusted the balance and
number of performance conditions for this grant
to include Free Cash Flow to provide strategic
focus on cash generation – an important and
widely used metric of the investor community
in the energy sector.
With the exception of the Free Cash Flow
performance condition, the performance recorded
a maximum vesting, with the Committee being
satisfied that performance matched growth and
the shareholder experience through the
performance period.
The 2022 HPSP grant, therefore, recorded a
98.3% vesting. As noted above, the Committee
satisfied itself that there were no circumstances
justifying the application of any downward
discretion.
2024 HPSP award grant
Following approval of the new Policy and
the new long-term incentive plan at the AGM,
on 18 April 2024 the Committee granted awards
under the new 2024 Hunting Performance Share
Plan (the “2024 HPSP”). These awards comprised
performance shares (“PSP”) and restricted
shares (“RSP”).
The 2024 PSP grant was 350% and 160% of
base salary for the Chief Executive and Finance
Director, respectively. Vesting of these awards
depends on achievement of stretching
performance conditions against a number of
metrics, which include: TSR 30%; ROCE 25%;
EPS 15%; FCF, post-capex, 15%; and Strategic
Scorecard 15%. The Committee considers that
these metrics continue to provide a balance of
performance targets for the executive Directors
to achieve.
The awards encourage a good balance between
earnings and cash generation growth. These
metrics were implemented following a shareholder
consultation process on our Remuneration Policy,
where shareholders requested that TSR be
increased to ensure a focus on delivering growth.
The 2024 RSP grant was 100% and 50% of
base salary for the Chief Executive and Finance
Director, respectively. These will vest after three
years and are subject to an underpin based on
holistic Company performance assessed by the
Committee prior to vesting, and are subject to
a two-year post-vesting holding period.
Non-executive Directors fees
As noted in the 2023 Annual Report on
Remuneration, from 1 January 2024 the Board
agreed to increase the additional fees paid to
the Committee Chairs and Senior Independent
Director from £10,000 to £11,000 per annum
in recognition of the added workload and
responsibilities associated with these roles.
The annual basic fee remained unchanged
at £64,000 per annum.
The fee on the appointment of the new Company
Chair was benchmarked to UK listed companies
and was increased from £205,000 to £225,000
per annum, which includes chairing the
Nomination Committee.
2024 AGM result
At the Company’s AGM held on 17 April 2024,
the Company received 85% of votes in favour
of the resolution to approve the new Directors’
Remuneration Policy, 96% of votes in favour of
the resolution to approve the new 2024 Hunting
Performance Share Plan and 76% of votes in
favour of the resolution to approve the 2023
Annual Report on Remuneration.
Given the outcome in respect of the Annual
Report on Remuneration, the Directors, in line
with the 2018 UK Corporate Governance Code,
engaged with shareholders to understand their
views, with the result of this consultation being
posted to the Company’s website in August 2024
and on page 151 of the 2024 Directors’
Remuneration Report.
During the consultation, the majority of
shareholders expressed that they were broadly
satisfied with the remuneration proposals. One
major shareholder did not support the resolution
due to the levels of deferral under the annual
incentive being below their preferred level. This
feedback was considered by the Board and the
Remuneration Committee, and it was decided
that the deferral levels remain appropriate;
however, they will be kept under review.
Shareholders will note that future base salary
increases are expected to be in line with the
workforce, as confirmed by the Committee
to shareholders during the recent investor
consultation process.
Terms of reference and
committee effectiveness
The Committee reviewed its Terms of Reference
at its December meeting.
As part of the externally facilitated
Board effectiveness review, the Committee’s
Effectiveness was discussed, with the Committee
and wider Board concluding that the remit and
work of the Committee was effective.
On behalf of the Board
Paula Harris
Chair of the Remuneration Committee
6 March 2025
Hunting PLC
Annual Report and Accounts 2024
139
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Remuneration at a glance
Remuneration paid to the executive Directors in the year was consistent
with the 2024 Directors’ Remuneration Policy. Base salaries for the
executive Directors were unchanged throughout 2023; however, following
a benchmarking exercise carried out in parallel with the new Directors’
Remuneration Policy, which was approved at the 2024 AGM, salaries
were increased by 8.5%. The 2024 Annual Bonus award is 69.0%
of the maximum bonus opportunity, which reflects an “Above Target”
performance compared to the Annual Budget, approved by the Directors
at the end of 2023. The awards under the HPSP granted in 2022 vested
on 4 March 2025, with an “Above Target” vesting outcome of 98.3%.
Adjusted profit before tax*
$
75.6
m
(2023 – $50.0m)
Return on average capital employed*
8.86
%
(2023 – 6.48% restated)
Total shareholder return (three-year)
100.4
%
(2023 – 81.3%)
Safety: total recordable incident rate
(three-year average)
0.94
(2023 – 0.96)
Adjusted diluted earnings per share*
31.4
cents
(2023 – 20.3 cents)
Cumulative three-year FCF (pre-capex)
$
165.5
m
(2023 – $50.1m)
Quality: internal manufacturing reject rate
(three-year average)
0.21
%
(2023 – 0.15%)
Performance metrics
Total shareholder return
(rebased to 100 at 31 December 2014)
Hunting PLC
DJ US Oil Equipment & Services
31/12/14
31/12/16
31/12/18
31/12/20
31/12/22
31/12/24
125
100
75
50
25
0
2024 AGM voting results
The voting results, in respect of the new Policy and 2023 Annual Report on Remuneration
are noted below.
Directors’ Remuneration Policy
Annual Report on Remuneration
Date
% of votes
in favour
Date
% of votes
in favour
% of votes cast in favour
17 April 2024
84.6
17 April 2024
76.0
Details of the Policy can be found on pages 142 to 150 and at www.huntingplc.com.
Link to strategy and KPIs
The Group’s key performance indicators (“KPIs”) are described in detail on pages 18 and 19,
and incorporate financial measures including:
Performance metrics
Annual bonus
HPSP
Rationale
Adjusted profit
before tax (“PBT”)
x
Reflects the achievements of the Group in a given
financial year and recognises sustained profitability
measured against an agreed annual budget.
Return on average capital
employed (“ROCE”)
x
x
Reflects the value created on funds invested
in the short and medium term.
Total shareholder return
(“TSR”)
x
Reflects the Group’s long-term goal to achieve
superior levels of shareholder return.
Adjusted diluted earnings
per share (“EPS”)
x
Encourages sustained levels of earnings growth
over the medium term.
Free cash flow (“FCF”)
x
Encourages sustained levels of cash generation
to fund growth and shareholder distributions.
Strategic/personal
objectives
x
x
Incentivises delivery of key strategic milestones
that contribute to long-term success.
*Non-GAAP measure see pages 255 to 262.
Hunting PLC
Annual Report and Accounts 2024
140
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Remuneration at a glance
continued
Following the benchmarking exercise conducted
in parallel with the new Directors’ Remuneration
Policy which received shareholder approval at
the 2024 AGM, the base salaries of the executive
Directors were increased with effect from
1 January 2024.
Base Salaries
$
879,217
(2023 – $810,338)
Arthur James (Jim) Johnson
Chief Executive
$
1,213
k
(2023 – $1,467k)
1,196,368
shares
(2023 – 259,145 shares)
£
344,623
(2023 – £317,625)
Bruce Ferguson
Finance Director
£
357
k
(2023 – £431k)
284,488
shares
(2023 – 58,894 shares)
Annual Bonus
Hunting
Performance
Share Plan
In 2024, the financial targets set by the Board
within the annual budget were exceeded, with
increases in adjusted profit before tax and
average return on capital employed being
recorded. The Committee also reviewed the
delivery of the personal performance objectives
by the executive Directors. Overall, a 69.0%
payout of the Annual Bonus opportunity
was recorded.
On this basis, Jim Johnson will receive a bonus
of $1,213k and Bruce Ferguson will receive a
bonus of £357k ($456k). The Annual Bonus will
be delivered in cash, as per the normal operation
of the annual bonus plan, with 25% of the
post-tax bonus to be utilised to purchase
Ordinary shares, to be retained for two years
from the award vesting date.
The Group’s 2022 HPSP grant’s performance
conditions incorporated ROCE, and adjusted
diluted EPS, measured for the year ended
31 December 2024, and FCF, relative TSR, and
a Strategic Scorecard measured over the three
financial years ending 31 December 2024.
Recorded
performance
Vesting
ROCE
8.86%
25%
Relative TSR*
Upper quartile
20%
Adjusted diluted EPS
31.4 cents
20%
FCF (pre-capex)*
$165.5m
18.3%
Strategic
Scorecard**
– Safety
0.94
7.5%
– Quality
0.21%
7.5%
*
Cumulative FCF over the three-year vesting period.
**
Average over the three-year vesting period.
Following measurement of the performance
conditions, the 2022 HPSP grant will vest
at 98.3%.
Dividend equivalents accrued over the vesting
period totalling 28.5 cents per vested share will
be added to this award.
Hunting PLC
Annual Report and Accounts 2024
141
Strategic Report
Corporate Governance
Financial Statements
Other Information
Directors’ Remuneration Policy
Policy overview
This section sets out the Directors’ Remuneration Policy (the “Policy”) applicable to Hunting’s executive
and non-executive Directors, which was approved by shareholders at the Company’s Annual General
Meeting (“AGM”) on 17 April 2024.
The Policy aligns with the rules of the 2024 Hunting Performance Share Plan (the “2024 HPSP”),
which was also approved at the 2024 AGM.
The Policy is designed to take account of the principles of the 2024 UK Corporate Governance Code
and the provisions of the Companies Act 2006 regarding remuneration, and is designed to promote
the strategy and long-term sustainable success of the Company by ensuring that rewards are
competitive within the relevant market for talent, and comprise fixed and variable incentives that link
total reward with corporate and individual performance as well as shareholder value creation.
Executive Director pay is overseen by the Remuneration Committee. The Chief Executive’s
remuneration is benchmarked against global peers, the majority of which are headquartered or listed
in the US, and who are of a similar profile and size to Hunting. The Finance Director’s remuneration
is benchmarked against UK listed companies of a similar size. Non-executive Director fees are set
at levels that take into account the time commitment and responsibilities of each role. Given the
international scope of the business, each non-executive Director is required to give an above average
time commitment to Group matters. Non-executive Directors do not receive bonuses or other variable
emoluments. The fees are benchmarked against other UK companies of a similar size, profile and
profitability and are reviewed annually by the Board. The Company Chair fee is set by the
Remuneration Committee. The Remuneration Policy tables that follow provide an overview of each
element of the Directors’ Remuneration Policy. As no Director is involved in the setting of their own
pay, this mitigates conflicts of interest as required by the relevant regulations.
Remuneration Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
142
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Executive Director Remuneration Policy table
Fixed emoluments
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Changes to policy proposed
Base salary
• To attract, retain and
reward executives with
the necessary skills to
effectively deliver the
Company strategy.
• Base salaries are set at competitive rates, which
take into account the individual’s country of
residence and primary operating location as well
as pay for similar roles in comparable companies.
• Aimed at the market mid-point.
• Annual increases take into account Company
performance, inflation in the UK and US, and
increases across the wider workforce.
• Relocation and tax equalisation agreements
are also in place for employees working across
multiple geographic jurisdictions.
• There is no prescribed
maximum annual increase.
Increases will normally
be guided by the general
increase for the broader
employee population, but
on occasions may need
to recognise, for example,
development in role, change
in responsibility, and/or
specific retention issues.
• Individual and Group performance are taken into
account when determining appropriate salaries.
• None.
401k and tax-deferred savings plans (US-based roles)
• To provide a tax efficient
long-term savings
arrangement for
US-based Directors.
• The Group provides matching contributions
(subject to limitations) to a US qualified 401k
deferred savings plan and an additional
non-qualified tax-deferred savings plan
as allowed under US tax laws to US-based
executive Directors.
• The Company previously
agreed to grandfather the
incumbent Chief Executive’s
original 401k and deferred
compensation arrangements.
• Any future executive Director
appointees in the US will have
a contribution cap set at the
same level offered to the
wider workforce.
• None.
• None.
Hunting PLC
Annual Report and Accounts 2024
143
Strategic Report
Corporate Governance
Financial Statements
Other Information
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Changes to policy proposed
Pension (roles based outside of the US)
• To provide a normal
pension scheme
appropriate to the
country of residence.
• Company contribution or an annual cash sum in
lieu of contributions to a company pension scheme.
• The Finance Director currently elects to receive
a cash sum.
• Equivalent arrangements would be offered to any
future executive Director based outside of the US.
• UK executive Directors
receive a company pension
contribution or cash
alternative of up to 12%
of salary, in line with the
rest of the UK workforce.
• None.
• None.
Benefits
• To provide standard
benefits appropriate to
the country of residence.
• Each executive Director is provided with
healthcare insurance and a company car
with fuel benefits or allowance in lieu.
• Additional benefits may be provided to ensure
the Group remains competitive within the relevant
local market and/or where these are introduced
to the wider workforce.
• There is no maximum value
set on benefits. They are set
at a level that is comparable
to market practice.
• None.
• None.
Executive Director Remuneration Policy table
continued
Fixed emoluments
continued
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Hunting PLC
Annual Report and Accounts 2024
144
Strategic Report
Corporate Governance
Financial Statements
Other Information
Executive Director Remuneration Policy table
continued
Variable emoluments
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Changes to policy proposed
Annual bonus
• To incentivise annual
delivery of financial and
operational targets.
• To provide high reward
potential for exceeding
demanding targets.
• At least 25% of any after-tax Annual Bonus must
be used to acquire shares in Hunting. These
shares are required to be held for two years.
• Malus and claw back provisions are incorporated
and allow the Committee to reduce the bonus,
potentially down to zero, in cases of material
financial misstatement, calculation error, corporate
failure, gross misconduct or actions that cause
reputational damage to the Company.
• The Chief Executive and
Finance Director have a
maximum opportunity of
200% and 150% of salary,
respectively.
• For an on-target performance,
50% of the maximum
opportunity will be paid.
• Typically, 80% of the Annual Bonus will be based
on financial measures, with the remainder based on
personal performance objectives, selected annually
by the Remuneration Committee to reflect key
performance targets for the year ahead.
• The vesting of the personal component is normally
subject to a financial underpin. Should all financial
targets not be met, a 50% vesting cap of the personal
component would normally be implemented.
• None.
Long-term incentive plan
• To align the interests
of executives with
shareholders in growing
the value of the business
over the long term and
provide a competitive total
package that enables the
Company to compete for
talent in its key market
of the US.
• Awards of performance shares (“PSP”) or
restricted shares (“RSP”), may be granted in the
form of nil cost options or conditional awards to
eligible participants. The performance conditions
which apply to PSP awards will normally be
measured over a period of at least three years.
• Awards normally vest three years after grant and
are retained, subject to settlement of any tax
liabilities on vesting, in shares for up to two years.
• Awards are subject to malus and clawback
provisions for five years from grant, which
cover cases of material financial misstatement,
calculation error, gross misconduct actions that
cause reputational damage to the Company,
or corporate insolvency or failure.
• In respect of vested shares, participants are
eligible to receive an amount equivalent to
dividends paid by the Company during the vesting
period, (and where relevant, the post-vesting
holding period) once the final vesting levels
have been determined, either in cash or shares.
This dividend equivalent payment may assume
the reinvestment of dividends in shares.
• In respect of any financial
year of the Company:
–
Chief Executive:
PSP up to 350% and RSP
up to 100% of base salary.
–
Finance Director:
PSP up to 160% and RSP
up to 50% of base salary.
• PSP awards will vest on achievement of financial
and strategic performance targets, measured over
a performance period of three years. Financial
measures for PSP awards will be aligned with the
strategy and, for 2024, include measures such as
adjusted diluted EPS, FCF, and ROCE. A TSR element
has also been included. Strategic performance
targets may also be included and will not normally
account for more than 15% of each award.
• Achievement of threshold performance for PSP
targets results in a 25% vesting.
• In the event that all of the financial performance
targets are not met in respect of a PSP grant, the
vesting of the Strategic performance measures will
be reduced by 50%.
• RSP awards are subject to an underpin based
on the Committee’s assessment of the underlying
performance of the business over the performance
period having regard for a number of factors also
measured over three financial years.
• The Committee has the ability to exercise
discretion to override the PSP or RSP outcome
in circumstances where strict application of the
performance conditions or underpin would produce
a result inconsistent with the Company’s remuneration
principles. Any upward discretion would normally
be subject to prior shareholder consultation.
• None.
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Hunting PLC
Annual Report and Accounts 2024
145
Strategic Report
Corporate Governance
Financial Statements
Other Information
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Changes to policy proposed
Minimum stock ownership requirement
• To encourage the
retention of shares
under award to the
executive Directors.
• To align the long-term
interests of the Directors
with shareholders.
• Executive Directors have five years to achieve
the required holding level from the date of their
appointment to the Board.
• The Board has discretion to extend this period
if warranted by individual circumstances.
• The target holding of the Chief
Executive is equal to a market
value of 500% of base salary
and for the Finance Director
200% of base salary.
• None.
• None.
Post-employment shareholding requirement
• To align the long-term
interests of the executive
Directors with
shareholders for
a period after they
have left the Group.
• To incentivise good
succession planning.
• Directors are required to hold Hunting
shares for a period after stepping down
as an executive Director.
• The Committee will have discretion
to reduce/waive the requirement
in exceptional circumstances.
• Executive Directors must
continue to hold shares equal
to the lesser of their actual
holding on stepping down
as an executive Director
or 200% of base salary,
for a minimum of 24 months.
• This requirement applies
to shares acquired under
incentives granted after
the 2024 AGM.
• None.
• None.
Executive Director Remuneration Policy table
continued
Variable emoluments
continued
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Hunting PLC
Annual Report and Accounts 2024
146
Strategic Report
Corporate Governance
Financial Statements
Other Information
Non-executive Director Remuneration Policy table
The remuneration of the non-executive Directors is designed to reflect the time and commitment of each of their respective roles.
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Changes to policy proposed
Company Chair and non-executive Director fees
• To attract and retain
high-calibre non-executive
Directors by offering a
market competitive fee.
• Fees for the non-executive Directors are
determined by the Board as a whole and fees
for the Company Chair are determined by the
Remuneration Committee, following receipt of
external fee information and an assessment of the
time commitment and responsibilities involved.
• The Company Chair is paid a single consolidated
fee for his responsibilities, including chairing the
Nomination Committee.
• The non-executive Directors are paid a basic fee.
• Non-executive Directors may be paid an
additional fee to reflect their responsibilities –
for example Directors who chair the Board’s
Audit and Risk, Ethics and Sustainability, and
Remuneration Committees and the Senior
Independent Director.
• The non-executive Directors and Company Chair
do not participate in the Group’s share plans and
do not receive a cash bonus or any other benefits.
Any travel or hospitality costs (including any tax
thereon) related to the performance of their duties
may be reimbursed by the Company.
• Fees paid to the non-
executive Directors are
benchmarked against other
UK companies of a similar
size, profile and profitability
to the Group.
• The aggregate maximum fees
for all non-executive Directors,
including the Company Chair,
within the Company’s Articles
of Association are £750,000.
• None.
• None.
Minimum stock ownership requirements
• To align the non-executive
Directors’ interests with
the long-term interests
of shareholders.
• Non-executive Directors are required to build up
a holding of shares in the Company and have
five years to achieve the required holding level
from the date of their appointment to the Board.
• The target holding for
the Company Chair and
non-executive Directors
is equal to 100% of their
annual fee.
• None.
• None.
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Hunting PLC
Annual Report and Accounts 2024
147
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Detailed Policy
Amendments to the Policy
The oil and gas industry remains a competitive marketplace, therefore recruiting and retaining the
right individuals to deliver long-term growth for its shareholders is a key focus of management and
the Remuneration Committee. It is anticipated that recruitment and retention will remain a challenge
for the sector and, therefore, the Committee will continue to keep the Policy under review and will
make any necessary revisions after appropriate consultation and approval from shareholders
has been received.
Remuneration Committee discretion
The Committee has defined areas of discretion within the Directors’ Remuneration Policy. Where
discretion is applied, the Committee will disclose the rationale for the application of discretion. The
Committee will operate the Annual Bonus Plan, HPSP and HRSP in accordance with the relevant plan
rules and this Policy. The Committee retains discretion as to the operation and administration of these
plans in several areas, including:
• Selecting the participants in the incentive plans on an annual basis;
• Determining the timing of grants of awards and/or payments;
• Determining the quantum of awards and/or payments (within the limits set out in the Policy table
on pages 143 to 147);
• Reviewing performance against any performance targets;
• Determining the extent of vesting based on the assessment of performance and to adjust the
amount of any incentive pay-out to reflect any fact or circumstance that the Committee considers
to be relevant, and to ensure that the outcome is a fair reflection of performance;
• Making the appropriate adjustments required in certain circumstances, for instance for changes
in capital structure;
• Determining “Good Leaver” status for incentive plan purposes, including assessing part-year
performance for bonus awards and applying the appropriate treatment; and
• Undertaking the annual review of weighting of performance measures and setting targets
for the incentive plans, where applicable, from year-to-year.
If an event occurs that results in the Annual Bonus Plan or PSP performance conditions and/or targets
being deemed no longer appropriate (e.g. material change acquisition or divestment), the Committee
will have the ability to appropriately adjust the measures, peer groups, and/or targets and alter
weightings, provided that the revised conditions are not materially less challenging than the original
conditions. In addition, the oil and gas industry is a highly cyclical industry, where sentiment is driven
by oil and gas commodity prices and activity levels across the industry. Given that these market
conditions are outside management’s control, the Committee retains the discretion to partially adjust
the performance targets of the performance conditions adopted for the PSP to align with the general
market outlook, while continuing to be a demanding and stretching incentive. Any upward discretion
would be subject to prior shareholder consultation.
Other
The Committee reserves the right to honour any remuneration commitments (including exercising any
discretions available to it in connection with such payments) that are not in line with the Policy outlined
above, where the terms of the payment were agreed either (i) before the Policy came into effect; or
(ii) at a time when the relevant individual was not a Director of the Company and, in the opinion of
the Committee, the payment was not in consideration for the individual becoming a Director of the
Company. The Committee may also make any payments that it is required to make as a result of its
statutory obligations or by way of settlement for any claim of breach of a Director’s legal entitlements.
Choice of performance metrics
The corporate strategy includes promoting the long-term success of the Group by investing in its
existing products and services portfolio through capital investment or by acquisition and growing the
business in a way that is aligned with the evolving global energy industry. For 2024, the performance
of the executive Directors in executing this strategy were evaluated using a number of key
performance indicators (“KPIs”) shown in the table below, which drive the variable components
of the executive Directors’ emoluments. The PSP performance conditions and growth targets can
be amended by the Remuneration Committee over the life of the Policy, with the targets set annually
when each award is granted, following an assessment of the growth prospects of the Group. Taken
together, the Committee believes that the executive Directors are appropriately incentivised to deliver
both short- and long-term performance based on these metrics.
Performance metrics
Variable incentive
Rationale
Adjusted profit
before tax (“PBT”)
Annual Bonus
Adjusted PBT is a management KPI used to measure
the performance of the Group. Adjusted PBT reflects the
achievements of the Group in a given financial year and
recognises sustained profitability measured against an
agreed Annual Budget.
Return on average
capital employed
(“ROCE”)
Annual Bonus/
PSP
ROCE is a management KPI used to measure the
performance of the Group. ROCE reflects the value
created on funds invested in the short and medium term.
Total shareholder
return (“TSR”)
PSP
TSR reflects the Group’s long-term goal to achieve
superior levels of shareholder return.
Adjusted diluted
earnings per share
(“EPS”)
PSP
To encourage sustained levels of earnings growth
over the medium term.
Free cash flow
(“FCF”)
PSP
To encourage sustained levels of cash generation
to fund growth and shareholder distributions.
Strategic/personal
objectives
Annual Bonus/
PSP
To capture and incentivise delivery of key strategic
milestones that contribute to long-term success.
Underlying Group
performance
RSP
Ensures that executives are not rewarded where the
underlying performance of the Company is not satisfactory.
Hunting PLC
Annual Report and Accounts 2024
148
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Detailed Policy
continued
Relevance to employee pay
The Policy table on pages 143 to 147 summarises the remuneration structure that operates for
executive Directors within Hunting and which also applies to senior executives of the Group. While
bonus and pension arrangements are in place for most of the Group’s employees, lower aggregate
remuneration operates below the executive Director and senior manager level, with total remuneration
driven by market comparatives and the individual responsibilities of each role.
Executive Director service contracts
All existing executive Directors’ service contracts are rolling one-year agreements and contain standard
provisions allowing the Company to terminate summarily for cause, such as gross misconduct. The
service contracts can be reviewed at the Company’s registered office, on request by a shareholder.
Jim Johnson and Bruce Ferguson entered into service contracts with the Company on 7 December
2017 and 2 June 2020, respectively. Under the terms of these service contracts, both the Company
and the Directors are required to give one year’s notice of termination. Messrs Johnson and Ferguson
are entitled to receive a Performance Bonus on an annual basis, the quantum being determined by
the Remuneration Committee. Messrs Johnson and Ferguson are also eligible to participate in the
Hunting Performance Share Plan and any other long-term incentive schemes operated by the
Company. Under the terms of their service contracts, benefits may include the provision of a company
car and fuel benefits or allowance in lieu, long-term disability and healthcare benefits offered by the
Company, as well as participation in pension schemes operated by the Company or an allowance in
lieu. Following a change of control, in line with standard UK practice, all stock options and stock-based
awards granted will be tested for performance and pro-rated for time unless the Committee, acting
fairly, decides otherwise.
Non-executive Director letters of appointment
On appointment, each non-executive Director is provided with a letter of appointment, which is retained
by the Company Secretary at Hunting PLC’s registered head office, that sets out the responsibilities
and time commitments for the role. Additional duties, as requested by the Nomination Committee,
including chairing a Board Committee, are also incorporated into the letters of appointment and fees
paid. Non-executive Director appointments are usually for a fixed three-year term, which can be
terminated with immediate effect by either party at any time.
External board appointments
The Company may authorise an executive Director to undertake a non-executive directorship outside
of the Group provided it does not interfere with their primary duties. During the year, neither executive
Director held any external positions.
Payment for loss of office
The Committee has considered the Company’s policy on remuneration for executive Directors
leaving the Company and is committed to applying an approach consistent with best practice
to ensure that the Company pays no more than is necessary. In line with normal market practice,
the policy distinguishes between “Good Leavers” and “Bad Leavers”. A “Good Leaver” is defined
as an employee who has ceased to be employed by the Group due to death, ill-health, injury,
disability, redundancy, retirement, the employee’s employing company or business ceasing to be
part of the Group, or for any other reason if the Committee so decides. In the case of a “Good Leaver”,
taking account of local conditions, the Policy normally allows:
• Payment in lieu of notice equal to 12 months’ base salary, pension contributions, contractual
benefits and any other legal entitlements; and
• Payment of a bonus for the period worked taking into account the achievement of the relevant
performance conditions which may be delivered in such proportions of cash and shares,
and subject to such deferral arrangements, as the Committee may determine; and
• Any unvested long-term incentives that vest at the normal time taking into account the achievement
of the relevant performance conditions and any other relevant factors, and will, unless the Committee
determines otherwise, be pro-rated by reference to the performance period applicable to the award
which has elapsed. If an executive Director dies (or any other exceptional circumstances prevail),
awards will vest at the time the executive Director ceases to be a Director on the same basis
as set out above for other “Good Leavers”.
The Company may also provide assistance with any reasonable legal costs and a contribution
towards outplacement services. If an executive Director departs the Group for any other reason,
no bonus would be payable, and their unvested long-term incentives would lapse immediately
on cessation of employment.
Corporate events
If there is a change of control of the Company, PSP and RSP awards will normally vest early.
The extent to which awards vest in these circumstances will be determined by the Remuneration
Committee, taking into account the extent to which the performance conditions have been satisfied,
the underlying performance of the Company and the participant, any other relevant factors, and,
unless the Remuneration Committee determines otherwise, the proportion of the performance period
that has elapsed. If other corporate events affect the Company, such as a demerger, the Remuneration
Committee may decide that awards vest on the same basis as for a change of control of the Company.
Consideration of employment conditions elsewhere in the Group
The Committee considers the general basic salary increases for the broader workforce when
determining the annual salary increases for the executive Directors. Employees have not been
consulted in respect of the design of the Company’s senior executive remuneration policy.
Hunting PLC
Annual Report and Accounts 2024
149
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Directors’ Remuneration Policy
continued
Detailed Policy
continued
Shareholder consultation and feedback
When determining remuneration, the Committee takes into account views of leading shareholders
and best practice guidelines issued by institutional shareholder bodies. The Committee is always
available for feedback from shareholders on the remuneration policy and arrangements and will
undertake a consultation with our largest shareholders in advance of any significant future changes
to the remuneration policy. The Committee will continue to monitor trends and developments in
corporate governance and market practice to ensure the structure of executive remuneration
remains appropriate.
New Director policies
As the Board of Hunting is refreshed with new executive and non-executive Director appointments,
the Policy for remuneration for the new Board members will align with those detailed above. Hunting
needs to be able to attract and retain the best executive and non-executive Directors in the market
place. The Remuneration Committee believes that the Policy will enable the Company to achieve
its recruitment aims.
For executive Director appointments, the fixed component of total emoluments will target the
market mid-point, subject to geographic considerations of the candidate and relevant labour market
practices. Where new appointees have initial base salaries set below market, any shortfall may be
managed with phased increases, normally, over a period of two to three years, subject to the
individual’s development and performance in the role. The service contracts will be rolling one-year
agreements with standard provisions. Fixed pay will comprise base salary, including any appropriate
relocation or tax equalisation agreements, benefits (including healthcare insurance, pension
contributions, and car benefits) and any other components deemed necessary to secure an
appointment. Variable pay will be in line with the policies above, subject to any future amendments
to these arrangements being approved by shareholders. Any specific change of control provisions
within new service contracts would be consistent with UK market norms.
In addition, for new appointees, the Committee may offer additional cash and/or share-based
elements when it considers these to be in the best interests of the Company and shareholders.
Any such payments would take account of remuneration relinquished when leaving the former
employer and would be structured to take account of the nature, time horizons, and performance
requirements attaching to that remuneration. Shareholders will be informed of any such payments
at the time of appointment.
For non-executive Director appointments, the benchmarked fees against companies of similar size,
profile, and profitability to Hunting will be applied.
Remuneration scenarios for executive Directors
The remuneration scenarios of the executive Directors for a fixed, target and maximum performance
are presented in the charts below, based on the 2024 Directors’ Remuneration Policy.
Chief Executive
Fixed
Target
Maximum
Maximum
Stretch
$1,074k
100%
25%
16%
12%
20%
35%
20%
26%
45%
13%
20%
53%
15%
$4,371k
$6,789k
$8,767k
0
3,000
2,000
1,000
5,000
4,000
6,000
9,000
8,000
7,000
Finance Director
Fixed
Target
Maximum
Maximum
Stretch
$511k
100%
36%
24%
20%
23%
25%
16%
32%
34%
10%
26%
41%
13%
$1,414k
$2,096k
$2,559k
0
1,000
500
1,500
2,000
3,000
2,500
Total Fixed
Annual Bonus
PSP
RSP
Assumptions made for each scenario are as follows:
• Fixed: latest salary, benefits or payment in lieu of benefits, and normal pension contributions
or payments in lieu of pension contributions;
• Target: fixed remuneration plus half of maximum annual cash bonus opportunity plus 50% vesting
of awards under the PSP plus 100% vesting of awards under the RSP;
• Maximum: fixed remuneration plus maximum annual cash bonus opportunity plus 100% vesting
of all long-term incentives; and
• Maximum Stretch: including the impact of a hypothetical 50% increase in share price on the value
of the PSP and RSP in accordance with the reporting regulations.
The Finance Director is paid in Sterling and the equivalent total remuneration scenarios are as follows
– fixed £400k; target £1,106k, maximum £1,640k and maximum stretch of £2,002k.
On behalf of the Board
Paula Harris
Chair of the Remuneration Committee
6 March 2025
Hunting PLC
Annual Report and Accounts 2024
150
Strategic Report
Corporate Governance
Financial Statements
Other Information
Remuneration Committee Report
continued
Annual Report on Remuneration
Introduction
The principles set out in the new Directors’ Remuneration Policy (the “Policy”) have been applied
throughout the year. As noted in the Letter from the Remuneration Committee Chair, the new Directors’
Remuneration Policy and the 2024 Hunting Performance Share Plan were approved at the Company’s
Annual General Meeting (“AGM”) on 17 April 2024. The changes to the Company’s compensation
arrangements mainly focused on the long-term incentive arrangements to the executive Directors,
meaning that, for the most part, the remuneration framework and outcomes reported this year were
not materially different to those reported in recent years.
Role
The Committee is responsible for developing and implementing the Directors’ Remuneration
Policy and has direct oversight of the remuneration of the executive Directors, Company Chair,
and Company Secretary. The Company Chair and Chief Executive are consulted on proposals relating
to the remuneration of the Finance Director and designated senior management. Where appropriate,
the Company Chair and the other Directors are invited by the Committee to attend meetings but are
not present when their own remuneration is considered.
The Committee also reviews and monitors the remuneration framework of the Company’s Executive
Committee and monitors base salary increases across the Company’s workforce. The remuneration
of the non-executive Directors is agreed by the Board as a whole and follows the Articles of
Association of the Company, which were last approved by shareholders on 18 April 2018. The full
scope of the role of the Committee is set out in its Terms of Reference, which are reviewed annually,
and can be found on the Group’s website at www.huntingplc.com.
Membership and attendance
The Committee consists entirely of independent non-executive Directors. Ms Harris, Ms Krajicek and
Mr Lough have relevant energy sector expertise, while Mrs Chesney has relevant financial expertise.
Dr Amos has non-oil and gas and finance expertise. On 10 January 2024, Margaret Amos was
appointed as a new independent non-executive Director and joined the Committee from this date.
Stuart Brightman stepped down as a member of the Committee on 17 April 2024, following his
appointment as Company Chair at Hunting PLC’s 2024 AGM. Annell Bay retired as a Director on
1 February 2025 and stepped down from the Committee on the same date. Cathy Krajicek joined
the Committee on her appointment to the Board on 3 March 2025.
Ms Harris was appointed Committee Chair on 1 February 2025. Ms Harris was first appointed
to the Committee when she was appointed a Director on 20 April 2022.
Carol Chesney and Keith Lough were reappointed as Directors on 23 April 2024 for a final three-year
term and both retain membership of the Committee.
The Committee met five times during 2024 and attendance details are shown on page 136.
On 6 March 2025, being the date of signing the accounts, the members of the Committee and
their unexpired terms of office were:
Director
Latest appointment date
Unexpired term as at
6 March 2025
months
Margaret Amos
10 January 2024
23
Annell Bay
2 February 2024
0/retired
Stuart Brightman
3 January 2023
10
Carol Chesney
23 April 2024
26
Bruce Ferguson
i
20 April 2020
12
Jay Glick
1 September 2023
0/retired
Paula Harris
20 April 2022
2
Jim Johnson
i
1 September 2017
12
Cathy Krajicek
3 March 2025
36
Keith Lough
23 April 2024
26
i
Messrs Ferguson and Johnson hold service contracts with the Company, which contain a 12-month notice period.
Shareholder voting at the 2024 AGM
At the Company’s AGM held in April 2024, the resolutions to approve the new Directors’ Remuneration
Policy and the 2023 Annual Report on Remuneration received the following votes from shareholders:
Directors’ Remuneration Policy
Annual Report on Remuneration
Number of
votes cast
% of
votes cast
Number of
votes cast
% of
votes cast
For
101,177,583
84.6
90,371,397
76.0
ii
Against
18,392,295
15.4
28,500,673
24.0
Total votes cast
119,569,878
72.5
118,872,070
72.1
Votes withheld
i
5,549
–
703,357
–
i.
A vote withheld is not a vote in law and is not included in the percentage for votes cast.
ii.
Following this outcome the Directors completed a shareholder engagement process, in line with the requirements of the 2018 UK
Corporate Governance Code.
Compliance statement
The new Directors’ Remuneration Policy and the 2024 Annual Report on Remuneration reflect the
Remuneration Committee’s reporting requirements under the Companies Act 2006 and the Large
and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended),
the Shareholder Rights Directive II, as enacted on 10 June 2019, and also the 2018 UK Corporate
Governance Code, which became effective for the Company from 1 January 2019. The 2024 Annual
Report on Remuneration, which includes the Letter from the Chair of the Remuneration Committee
on pages 136 to 139, describes how the approved Directors’ Remuneration Policy was applied
during the year. This report was approved by the Remuneration Committee at its meeting on
Monday 3 March 2025. The Committee reviews the compensation paid to the executive Directors,
the senior leadership team and wider workforce to ensure consistency throughout the organisation.
Hunting PLC
Annual Report and Accounts 2024
151
Strategic Report
Corporate Governance
Financial Statements
Other Information
Single figure remuneration (audited)
Fixed
Variable
Total Remuneration
Base Salary
i
Pension Provision
ii
Benefits
iii
Sub Totals
Annual Bonus
HPSP Awards
Sub Totals
$k
2024
2023
2024
2023
2024
2023
2024
2023
2024
iv
2023
v
2024
vi
2023
vii
(restated)
2024
2023
(restated)
2024
2023
(restated)
Executive Directors
Jim Johnson
879
810
126
137
70
72
1,075
1,019
1,213
1,467
5,234
1,075
6,447
2,542
7,522
3,561
Bruce Ferguson
440
395
53
47
18
17
511
459
456
536
1,245
244
1,701
780
2,212
1,239
Non-executive Directors
Margaret Amos (from 10 January 2024)
89
–
–
–
–
–
89
–
–
–
–
–
–
–
89
–
Annell Bay
96
92
–
–
–
–
96
92
–
–
–
–
–
–
96
92
Stuart Brightman
226
80
–
–
–
–
226
80
–
–
–
–
–
–
226
80
Carol Chesney
96
92
–
–
–
–
96
92
–
–
–
–
–
–
96
92
Jay Glick (to 17 April 2024)
86
255
–
–
–
–
86
255
–
–
–
–
–
–
86
255
Paula Harris
82
80
–
–
–
–
82
80
–
–
–
–
–
–
82
80
Keith Lough
96
92
–
–
–
–
96
92
–
–
–
–
–
–
96
92
Totals
2,090
1,896
179
184
88
89
2,357
2,169
1,669
2,003
6,479
1,319
8,148
3,322
10,505
5,491
The remuneration of the Finance Director and non-executive Directors is determined in UK Sterling, as shown in the table below.
Fixed
Variable
Total Remuneration
Base Salary
i
Pension Provision
ii
Benefits
iii
Sub Totals
Annual Bonus
HPSP Awards
Sub Totals
£k
2024
2023
2024
2023
2024
2023
2024
2023
2024
iv
2023
v
2024
vi
2023
vii
(restated)
2024
2023
(restated)
2024
2023
(restated)
Executive Directors
Bruce Ferguson
345
318
41
38
14
14
400
370
357
431
974
191
1,331
622
1,731
992
Non-executive Directors
Margaret Amos (from 10 January 2024)
70
–
–
–
–
–
70
–
–
–
–
–
–
–
70
–
Annell Bay
75
74
–
–
–
–
75
74
–
–
–
–
–
–
75
74
Stuart Brightman
177
64
–
–
–
–
177
64
–
–
–
–
–
–
177
64
Carol Chesney
75
74
–
–
–
–
75
74
–
–
–
–
–
–
75
74
Jay Glick (to 17 April 2024)
67
205
–
–
–
–
67
205
–
–
–
–
–
–
67
205
Paula Harris
64
64
–
–
–
–
64
64
–
–
–
–
–
–
64
64
Keith Lough
75
74
–
–
–
–
75
74
–
–
–
–
–
–
75
74
i.
Following a benchmarking exercise conducted in parallel to the 2024 Directors’ Remuneration Policy, which was approved at the 2024 AGM, the base salaries of the executive Directors were increased by 8.5%, with effect from 1 January 2024. Stuart Brightman’s fee was increased from
17 April 2024, following his appointment as Company Chair.
ii.
Mr Johnson’s single figure pension remuneration represents Company contributions payable to his US pension arrangements. Mr Ferguson’s pension figure represents a cash sum in lieu of a Company pension contribution, which is set at 12% of his annual base salary.
iii.
Benefits include the provision of healthcare insurance, subscriptions, and a company car with fuel benefits or allowance in lieu.
iv.
With the Company recording another year of earnings growth, including an increase in adjusted profit before tax (“PBT”) and return on average capital employed (“ROCE”), both of which exceeded the Annual Budget targets set in December 2023, a 69.0% vesting of the maximum
opportunity has been recorded. On this basis, Mr Johnson will receive a bonus payment of $1,213k, being 138% of his base salary paid in 2024, and Mr Ferguson will receive a bonus payment of $456k (£357k), being 103% of his base salary. The bonuses will be paid in March 2025 and,
in line with the usual operation of the Annual Bonus Plan, 25% of the after-tax bonus will be utilised to purchase Ordinary shares in the Company, to be retained for two years.
v.
In 2023, Mr Johnson’s Annual Bonus was $1,467k and Mr Ferguson’s Annual Bonus was $536k (£431k). The after-tax bonuses were utilised to purchase 52,652 and 16,434 Ordinary shares respectively in the Company, to be retained for two years.
vi.
The share awards granted in 2022 under the PSP had a three-year performance period to 31 December 2024 and vested on 4 March 2025. The 2022 grant comprised the following five performance conditions: ROCE, EPS, FCF, TSR, and a Strategic Scorecard, with the FCF
performance condition recording an 18.3% vesting, while the other performance conditions recorded a maximum vesting. The total vesting was, therefore, 98.3%. On this basis, Mr Johnson will receive 1,196,368 Ordinary shares and Mr Ferguson will receive 284,488 Ordinary shares.
A cash payment of 28.5 cents per vested share, equating to the dividends paid on each vested share across the vesting period was added to the gross vested amount. In total, the value of Mr Johnson’s vested 2022 long-term incentive was $5,234k and Mr Ferguson’s was $1,245k.
The average mid-market closing price of £3.1927 during Q4 2024 has been applied to the number of vested shares and converted to dollars using the average £/$ exchange during Q4 2024, being £1.2811. Further details of the vesting calculation are shown on page 155.
vii.
The share awards granted in 2021 at £2.619 under the PSP had a three-year performance period to 31 December 2023 and incorporated four performance conditions. The awards were measured against the relevant performance conditions, with a 34.2% vesting. On this basis,
Messrs Johnson and Ferguson received 259,145 and 58,894 Ordinary shares, respectively. For the purposes of the single figure calculation, the average mid-market closing price of £3.0344 was applied to the share awards vested on 4 March 2024, with the 2023 single figure table
being restated to reflect the actual vested amount. The £/$ exchange rate of £1.2798 was also applied.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
152
Strategic Report
Corporate Governance
Financial Statements
Other Information
Salary and fees
As outlined in our 2023 Directors’ Remuneration Report, following a rigorous shareholder engagement
process on the new Directors’ Remuneration Policy, which concluded in Q1 2024, base salary
increases of 3.5% in excess of the workforce increase (8.5% in total) were approved by the Committee
with effect from 1 January 2024. This was only the third increase in executive Director salaries since
April 2019, the Directors not having received an increase in either 2020 or 2023. Mr Johnson’s base
salary following this increase was $879,217 and Mr Ferguson’s was $440,359 (£344,623) during
the year.
In December 2024, the Committee reviewed base salary increases for the workforce as part of
the preparation of the 2025 Annual Budget. The Chief Executive proposed a Group-wide average
increase of 4%, which was implemented in January 2025. The Committee will meet in April 2025
to discuss and agree the base salary increases for the executive Directors.
The non-executive Directors are paid an annual base fee of £64,000 with an additional fee
of £11,000 per annum for chairing a Committee or for the role of Senior Independent Director.
On appointment Stuart Brightman’s base fee as Company Chair was set at £225,000 following receipt
of benchmarked data from Mercer.
Pensions (audited)
In line with other similarly long-tenured employees in the US, Jim Johnson is a member of a deferred
compensation scheme in the US, which is anticipated to provide a lump sum on retirement, and also
contributes to a US 401k matched deferred savings plan. Company contributions to the former
arrangement are $104,831 (2023 – $116,823) for the year. There are no additional benefits provided
on early retirement from this arrangement. In the year, the Group contributed to Mr Johnson’s 401k
matched savings plan, totalling $20,700 (2023 – $19,800).
Mr Ferguson receives a cash sum in lieu of pension contributions, representing 12% of his annual
base salary. This contribution level aligns with the UK workforce, as required by the 2018 UK
Corporate Governance Code. In the year, Mr Ferguson’s company contribution in lieu of pension
was $52,843/£41,355 (2023 – $47,385/£38,115).
Annual performance-linked bonus plan (audited)
The annual performance-linked bonus plan for 2024 was based on the following metrics:
Proportion of award
Performance metric
60%
Adjusted profit before tax
20%
Return on average capital employed
20%
Personal performance objectives
Delivery of financial objectives
The annual bonus targets are normally based on the Annual Budget agreed by the Board in
December of the prior financial year. The 2024 Annual Budget agreed by the Board in December 2023
contained financial targets of adjusted profit before tax of $70.3m and ROCE of 8.1%. The financial
performance targets for the 2024 Annual Bonus were thus set as follows:
Threshold
vesting
Target
vesting
Maximum
vesting
Actual
outcome
% vesting
Adjusted profit before tax
(“PBT”)
$56.2m
$70.3m
$84.4m
$75.6m
41.3%
Return on average capital
employed (“ROCE”)
6.4%
8.1%
9.6%
8.86%
14.7%
Given the continued growth of the Company’s core markets, the Annual Bonus targets were exceeded,
with 56.0% of a possible 80% outcome of the financial component of the Annual Bonus award.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
153
Strategic Report
Corporate Governance
Financial Statements
Other Information
Delivery of personal performance objectives
The personal performance objectives agreed by the Committee with the executive Directors in early 2024 are summarised in the table below.
Objective
Jim Johnson
(Chief Executive)
Bruce Ferguson
(Finance Director)
Performance achieved
Outcome
Revenue
growth and
product
diversification
(35%)
• Build revenue from non-energy markets to
continue the path to 2030 goal of $250m
per annum; present progress through the
year, including delivery of non-oil and gas
revenue of greater than $70m.
• Present other material diversification
opportunities.
• Build revenue from non-energy markets to
continue the path to 2030 goal of $250m
per annum; present progress through the
year, including delivery of non-oil and gas
revenue of greater than $70m.
• Present other material diversification
opportunities.
• The executive Directors delivered a Corporate Plan to the Board, which
presented the growth opportunities and cost reduction measures that
will contribute to the delivery of the Hunting 2030 Strategy.
• Group revenue has grown by 13% in the year, with non-oil and gas being
$75.1m. The Hunting Dearborn business unit has successfully pivoted
its sales order book to aerospace and commercial space sales.
• The Group has also delivered c.$60m of organic oil recovery orders,
which represents a new, more diversified revenue to Hunting.
• Management continues to evaluate non-oil and gas acquisition
opportunities, but none were completed in the year.
Target
Progressing
operating
excellence
(25%)
• Work with senior leadership team to
present long-term plans to increase
revenue, grow market share, explore M&A
opportunities in each product group and
region as outlined at the Capital Markets
Day, with a tie-in to the Annual Budget.
• Enhance operating dashboard for senior
leadership to present forecasts of
budgets, actual revenue, utilisation,
receivables, working capital, inventory.
• Work with senior leadership team to
present long-term plans to increase
revenue, grow market share, explore M&A
opportunities in each product group and
region as outlined at the Capital Markets
Day, with a tie-in to the Annual Budget.
• Enhance operating dashboard for senior
leadership to present forecasts of
budgets, actual revenue, utilisation,
receivables, working capital, inventory.
• Strategic growth plans were presented to the Directors through the year
by members of the Executive Committee.
• Merger and acquisition opportunities were also presented by the
executive Directors.
• Enhanced financial and operational reporting was delivered in the year,
to enable the Directors to monitor progress of key income statement
and balance sheet performance metrics.
• Working capital financing solutions were presented to the Directors
and implemented, leading to a strong year-end total cash and
bank/(borrowing) position.
Above Target
Leadership
development
and
succession
(25%)
• Present Chief Executive succession
candidates and development plans.
• Chief HR Officer to present succession
candidates for Chief Executive’s direct
reports and next level down.
• Senior leadership team to develop and
present specific internal succession plans
for each of their key reports.
• Chief HR Officer to develop an emerging
leaders programme with identified
high performers.
• Present Finance Director internal
succession plans for direct reports and
next level down.
• Ensure the necessary size and skill set
of financial talent is hired to drive
improvements to performance analysis
and financial reporting.
• Investor Relations: develop activities as
per the Capital Markets Day framework.
• Succession plans for the senior leadership team were presented
by the Chief Executive and Finance Director.
• Executive development programmes were put in place to develop
key management talent.
• Enhanced investor relations and shareholder marketing initiatives were
put in place, leading to new, material shareholders entering the register.
• Executive and middle management leadership training programmes
were implemented across the Group.
Target
Corporate
Responsibility
and ESG (15%)
• Continue to track and reduce GHG
emissions to meet the 2030 goal of 17,937
tonnes (from 35,874 tonnes in baseline
year of 2019), targeting a 3% reduction
during the year.
• Work to contain carbon intensity to <30.
• Continue to track and reduce GHG
emissions to meet the 2030 goal of 17,937
tonnes (from 35,874 tonnes in baseline
year of 2019), targeting a 3% reduction
during the year.
• Maintain and upgrade cyber security.
• Scope 1 and 2 GHG emissions decreased 2%, while revenue and
activity increased 13%, indicating that management was successfully
managing the Group’s scope 1 and 2 emissions.
• The intensity factor of 21.2 delivered in the year exceeded the Group’s
2030 target with a new, more demanding target being announced
in March 2025.
Above Target
The Committee awarded a 13% outcome of the 20% vesting of the personal performance component of the Annual Bonus award.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
154
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Bonus outcome (audited)
Based on this outcome of a vesting of 69.0%, the following bonus awards were made to the
executive Directors:
Proportion of award
Performance metric
Percentage of annual
bonus awarded
60%
Adjusted profit before tax
41.3%
20%
Return on average capital employed
14.7%
20%
Personal performance objectives
13.0%
Mr Johnson was, therefore, awarded a bonus for the year of $1,213k (2023 – $1,467k),
and Mr Ferguson was awarded a bonus of $456k (2023 – $536k).
In line with the normal operation of the Annual Bonus, and the Directors’ Remuneration Policy,
25% of the post-tax bonus is required to be utilised to purchase Ordinary shares in the Company,
to be retained for two years.
2022 HPSP vesting (audited)
The 2022 awards under the PSP have been measured against the performance conditions following
completion of the three-year performance period ended 31 December 2024. The 2024 awards were
based on five performance conditions – ROCE (25%); adjusted diluted EPS (20%); Free Cash Flow,
pre-capex (20%); relative TSR (20%) and a Strategic Scorecard (15%) comprising two sub-measures
being the Group’s Safety and Quality performance. Performance is measured for the year ended
31 December 2024 for ROCE and adjusted diluted EPS and over three financial years ending
31 December 2023 for free cash flow, relative TSR and the Strategic Scorecard. A summary
of the performance achieved is detailed below:
% of award
Threshold
vesting target
Maximum
vesting target
Recorded
performance
% vesting
outcome
ROCE
25%
4.0%
8.0%
8.86%
25%
Relative TSR
20%
Median
Upper quartile
Upper quartile
20%
Adjusted diluted EPS
20%
16.6 cents
24.9 cents
31.4 cents
20%
Free Cash Flow
20%
$115m
$172m
$165.5m
18.3%
Strategic Scorecard
– Safety
7.5%
2.00
<1.00
0.94
7.5%
– Quality
7.5%
0.8%
0.5%
0.21%
7.5%
The ROCE and EPS components of the 2022 grant under the PSP have recorded a 100% vesting
based on the performance of the Company in the year-ended 31 December 2024. The Free Cash
Flow component has recorded an 18.3% vesting, based on the cumulative free cash flow across
the three-year performance period.
The Strategic Scorecard components of the PSP grant of Safety and Quality, which are based
on an average of the past three years, have vested in full.
The Total Shareholder Return (“TSR”) performance condition was measured by Mercer in January
2025, following completion of the three-year performance period. Hunting’s TSR performance against
the 13 comparator companies was then ranked, resulting in a “Upper Quartile” performance
corresponding to a 100% vesting of this portion of the grant. The comparator group included Akastor,
Expro, Flotek Industries, Forum Energy Technologies, Innovex International Inc, Nine Energy Services,
NOV, Oceaneering, Oil States International, Schoeller-Bleckmann, TechnipFMC, Tenaris and Vallourec.
Overall, the total vesting of the 2022 PSP award is 98.3%. The vesting date of the 2022 PSP award
is 4 March 2025. Mr Johnson will, therefore, receive 1,196,368 Ordinary shares and Mr Ferguson
will receive 284,488 Ordinary shares on 6 March 2025. A cash equivalent of dividends paid by the
Company during the vesting period, totalling 28.5 cents per vested share, will be added to the award
on the vesting date. The 2022 PSP vesting has been calculated as follows:
Number of
shares
granted in
2022
Vesting
%
Number of
shares
vested
Value of vested
shares at
31 December
2024
$*
Value of
dividends at
28.5 cents
per share
$
Total award
value
$
Value
attributable
to share price
growth
$
Jim Johnson*
1,217,058
98.3 1,196,368
4,893,346
340,965
5,234,311
1,529,142
Bruce Ferguson*
289,408
98.3
284,488
1,163,604
81,079
1,244,683
363,620
*
As per the methodology for reporting the values of unvested awards, the average price of a Hunting PLC share during Q4 2024 of £3.1927
has been applied and converted to US dollars at an exchange rate of £1.2811 for the period.
**
The weighted average share price on the date of grant was £2.26.
In accordance with the Directors’ Remuneration Policy, these vested shares (net of tax) are to be held
for two years from the vesting date.
2021 HPSP vesting (audited)
The 2021 awards under the HPSP were measured against the performance conditions, following
completion of the three-year performance period, resulting in the following outcome:
Number of
shares
granted in
2021
Vesting
%
Number of
shares
vested
Value of vested
shares at
4 March
2024
$*
Value of
dividends at
26.0 cents
per share
$
Total award
value
$
Value
attributable
to share price
growth
$
Jim Johnson*
757,732
34.2
259,145
1,006,343
68,662
1,075,005
137,755
Bruce Ferguson*
172,203
34.2
58,894
228,704
15,604
244,308
31,306
*
The value of awards have been restated at the market price of £3.034366 per share with an FX rate of $1.27978 on 4 March 2024.
Further details have been included under the share interests table.
**
The weighted average share price on the date of grant was £2.619.
In accordance with the Directors’ Remuneration Policy, these vested shares (net of tax) are to be held
for two years from the vesting date.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
155
Strategic Report
Corporate Governance
Financial Statements
Other Information
2024 HPSP grant (audited)
On 18 April 2024, the Committee approved the grant of nil-cost share awards to Jim Johnson and
Bruce Ferguson under the rules of the new 2024 Hunting Performance Share Plan (the “new HPSP”)
which was approved by shareholders at the Company’s AGM on 17 April 2024.
Under the new HPSP, performance-based (“PSP”) and time-based (“RSP”) awards have been granted
to the executive Directors, with a three-year vesting period. Further, the historic award quantum of the
grants to the executive Directors has not been altered, with the Chief Executive receiving a face-value
grant quantum of 450% of base salary and the Finance Director receiving a face-value grant of 210%
of base salary.
The 2024 grant will vest on 18 April 2027, with the performance-based awards being subject to the
achievement of the performance metrics, and the time-based awards being subject to a holistic view
of performance across the performance period, including consideration of the TSR performance of
the Group and other matters.
A two-year holding period will then be applied to the post-tax vested shares. The details of the
long-term arrangements of the executive Directors is contained in the Directors’ Remuneration Policy
on pages 142 to 150.
Award
as a % of
base salary
Number of
shares under
grant
Face value of award
at threshold vesting
$
Face value of award
at maximum
vesting
$
Jim Johnson
Performance-based awards (PSP)
350
665,858
769,316
3,077,260
Time-based awards (RSP)
100
190,245
879,217
879,217
Total
450
856,103
1,648,533
3,956,477
Bruce Ferguson
Performance-based awards (PSP)
160
155,105
179,205
716,818
Time-based awards (RSP)
50
48,470
224,004
224,004
Total
210
203,575
403,209
940,822
The PSP performance awards include a TSR performance metric, which is utilised to reflect
shareholder returns over the performance period. The other performance conditions and targets
encourage capital efficiency (ROCE), cash generation (FCF), and strong growth in earnings (EPS)
in addition to the important ESG metrics within the Strategic Scorecard, namely Quality and Safety
performance. The targets for each performance condition are as follows:
Performance condition
Proportion of award
%
Threshold
vesting target
Maximum
vesting target
Relative TSR
ii
30
Median
Upper Quartile
ROCE
i
25
13.5%
15.0%
FCF
ii
15
$220m
$270m
Adjusted diluted EPS
i
15
50.0 cents
60.0 cents
Strategic Scorecard
ii
– Safety
7.5
2.00
<1.00
– Quality
7.5
0.8%
0.5%
i.
Measured for the year ended 31 December 2026.
ii.
Measured across the three-year vesting period.
Following shareholder feedback the comparator group has been fully aligned to the companies used
in the benchmarking process completed in 2023–24.
The following quoted businesses comprise the TSR comparator group for the 2024 award:
Akastor
Liberty Energy
Schoeller Bleckmann
Cactus
Nine Energy Services
TechnipFMC
Core Laboratories
NOV
Tenaris
Dril-Quip (Innovex)*
Oceaneering International
TETRA Technologies
Expro Group Holdings
Oil States International
Vallourec
Flotek Industries
Patterson-UTI Energy
Forum Energy Technologies
Petrofac
*
Dril-Quip Inc merged with Innovex Downhole Solutions on 6 September 2024 and began trading as Innovex International Inc
on 9 September 2024. The comparator TSR tracks Dril-Quip until the date of the merger and Innovex International Inc afterwards.
The time-based RSP awards are subject to an underpin based on holistic company performance
assessed by the Committee prior to vesting taking account of both relative business performance
in terms of the Company’s financial KPIs and shareholder returns and key ESG-related performance
indicators; which include sustainability, health and safety, quality assurance, and reputation.
The face value of the 2024 award is based on the closing mid-market share price on 17 April 2024,
which was 355.5 pence per share.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
156
Strategic Report
Corporate Governance
Financial Statements
Other Information
Changes to Director and employee pay
The table below is presented in compliance with the Shareholder Rights Directive II. The changes to
the pay of the executive Directors includes base salaries, benefits in kind, and bonuses and excludes
pension contributions and share awards. If a Director has not served for the entire year, the change
in annual salary or fee is based on the date of appointment or retirement.
2019 to 2020
2020 to 2021
2021 to 2022
2022 to 2023
2023 to 2024
Executive Directors
Jim Johnson
Base salary
+1%
+1%
+4%
+5%
+8.5%
Annual cash bonus
-74%
+5%
+906%
-5%
-22%
Benefits
+31%
-7%
+1%
+6%
+3%
Bruce Ferguson
i
Base salary
–
+3%
+8%
+5%
+8.5%
Annual cash bonus
–
+55%
+913%
-5%
-17%
Benefits
–
+44%
0%
+8%
0%
Average global employee
Base salary
-2%
+9%
+5%
+3%
+2%
Annual cash bonus
-81%
+9%
+726%
-21%
-11%
Benefits
+7%
+4%
-3%
+9%
+33%
Non-executive Directors (fees)
Margaret Amos
ii
–
–
–
–
0%
Annell Bay
0%
0%
0%
+6%
+1%
Stuart Brightman
iii
–
–
–
–
+183%
Carol Chesney
0%
0%
0%
+6%
+1%
Jay Glick
iv
0%
0%
0%
+11%
0%
Paula Harris
v
–
–
–
0%
0%
Cathy Krajicek
vi
–
–
–
–
–
Keith Lough
0%
0%
0%
+6%
+1%
i.
Bruce Ferguson was appointed to the Board on 15 April 2020.
ii.
Margaret Amos was appointed to the Board on 10 January 2024.
iii.
Stuart Brightman was appointed to the Board on 3 January 2023. He was appointed Company Chair on 17 April 2024.
iv. Jay Glick retired from the Board after the 2024 AGM on 17 April 2024.
v.
Paula Harris was appointed to the Board on 20 April 2022.
vi. Catherine (“Cathy”) Krajicek was appointed to the Board on 3 March 2025.
The average salary for employees in 2024 reflects a change in the average monthly global employee
headcount of 2,423 compared to the prior year of 2,361, coupled with base salary increases applied
to the existing workforce in January 2024. Hunting PLC, the parent Company, does not have
any employees.
Directors’ shareholdings, ownership policy and share interests (audited)
The beneficial interests of the Directors in the issued Ordinary shares of the Company are as follows:
Director
At 31 December
2024
i
At 31 December
2023
i
Executive Directors
Jim Johnson
iii
777,557
567,988
Bruce Ferguson
iii
266,439
215,554
Non-executive Directors
Margaret Amos
–
–
Annell Bay
21,347
21,347
Stuart Brightman
–
–
Carol Chesney
24,000
24,000
Jay Glick
ii
(to 17 April 2024)
75,923
75,923
Paula Harris
3,300
–
Keith Lough
24,000
24,000
i.
Beneficial share interests are those Ordinary shares owned by the Director or spouse, which the Director is free to dispose of.
ii.
As at cessation date.
iii.
The shareholdings for Messrs Johnson and Ferguson include shares restricted from sale, in line with the rules of the Annual Bonus Plan
and Hunting Performance Share Plan. At 31 December 2024, 308,094 restricted-from-sale Ordinary shares are held by Mr Johnson and
70,922 are held by Mr Ferguson.
There have been no further changes to the Directors’ share interests in the period 31 December 2024
to 6 March 2025. The Group operates a share ownership policy that requires Directors and certain
senior executives within the Group to build up a holding in shares equal in value to a certain multiple
of their base salary or annual fee. The multiple takes into account the post-tax value of vested but
unexercised share awards or options. The required shareholding of each Director expressed as
a multiple of base salary or annual fee as at 31 December 2024 is presented below:
Director
Required holding
expressed as a multiple
of base salary or fee
Requirement met*
Jim Johnson
5
N
Bruce Ferguson
2
Y
Margaret Amos
1
N
Stuart Brightman
1
N
Carol Chesney
1
Y
Paula Harris
1
N
Keith Lough
1
Y
*
The value of the holding of the Directors has been determined using the value on purchase of Ordinary shares or the share price at
31 December 2024 of £2.89.
Mr Johnson’s shareholding requirement has not been met within the prescribed five-year time period,
given the low levels of vesting of the 2014 HPSP. However, following the vesting of the 2022 grant
under the 2014 HPSP, Mr Johnson will be in compliance with the requirement.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
157
Strategic Report
Corporate Governance
Financial Statements
Other Information
Directors’ shareholdings, ownership policy and share interests (audited)
continued
The interests of the executive Directors in Hunting PLC Ordinary shares under the HPSP are set out below. The vesting of options and awards are subject to performance conditions set out within the Policy.
All share awards automatically vest and expire on the third anniversary of the grant, with the exception of options awarded to Mr Ferguson, which expire on the tenth anniversary of grant.
Director
Interests at
1 January
2024
Options/awards
granted in year
Options/awards
exercised in year
Options/awards
lapsed in year
Interests at
31 December
2024
Exercise price
p
Grant date
Date exercisable
Expiry date
Scheme
Jim Johnson
757,732
–
(259,145)
(498,587)
–
Nil
04.03.2021
04.03.2024
–
PSP^
1,217,058
–
–
–
1,217,058
Nil
04.03.2022
04.03.2025
–
PSP^
994,687
–
–
–
994,687
Nil
06.03.2023
06.03.2026
–
PSP^
–
665,858
–
–
665,858
Nil
18.04.2024
18.04.2027
–
New PSP^
–
190,245
–
–
190,245
Nil
18.04.2024
18.04.2027
–
New RSP^
Total
2,969,477
856,103
(259,145)
(498,587)
3,067,848
Bruce Ferguson
172,203
–
(58,894)
(113,309)
–
Nil
04.03.2021
04.03.2024
04.03.2031
PSP~
289,408
–
–
–
289,408
Nil
04.03.2022
04.03.2025
04.03.2032
PSP~
236,529
–
–
–
236,529
Nil
06.03.2023
06.03.2026
06.03.2033
PSP~
–
155,105
–
–
155,105
Nil
18.04.2024
18.04.2027
–
New PSP^
–
48,470
–
–
48,470
Nil
18.04.2024
18.04.2027
–
New RSP^
Total
698,140
203,575
(58,894)
(113,309)
729,512
^
Nil-cost share awards that are not yet vested or exercisable and still subject to the performance conditions being measured in accordance with the PSP/new PSP/new RSP schemes.
~
Nil-cost share options that are not yet vested or exercisable and still subject to the performance conditions being measured in accordance with the PSP scheme.
Executive Director remuneration and shareholder returns
The following chart compares the TSR of Hunting PLC between 2014 and 2024 to the DJ US Oil
Equipment and Services indices. In the opinion of the Directors, this index is the most appropriate
against which the shareholder return of the Company’s shares should be compared because it
comprises other companies in the oil and gas services sector. The accompanying table details
remuneration of the Chief Executive.
Total shareholder return
(rebased to 100 at 31 December 2014)
Hunting PLC
DJ US Oil Equipment & Services
31/12/14
31/12/16
31/12/18
31/12/20
31/12/22
31/12/24
125
100
75
50
25
0
Single figure
remuneration
$000
i
Annual cash
bonus
%
ii
HPSP
% vesting
iii
LTIP award
%
iv
2024 – Jim Johnson
7,522
69
98
n/a
2023 – Jim Johnson
v
3,561
91
34
n/a
2022 – Jim Johnson
2,710
100
8
n/a
2021 – Jim Johnson
1,165
10
8
n/a
2020 – Jim Johnson
1,179
10
16
n/a
2019 – Jim Johnson
2,229
39
66
n/a
2018 – Jim Johnson
3,715
100
75
n/a
2017 – Jim Johnson (from 1 September)
819
33
4
n/a
2017 – Dennis Proctor (to 1 September)
3,972
67
13
n/a
2016 – Dennis Proctor
941
Nil
Nil
n/a
2015 – Dennis Proctor
1,031
Nil
Nil
Nil
i.
Single figure remuneration reflects the aggregate remuneration paid to the Chief Executive as defined within the Directors’ Remuneration Policy.
ii.
Annual cash bonus percentages reflect the bonus received by the Chief Executive each year expressed as a percentage of maximum
bonus opportunity.
iii.
Percentage vesting reflects the percentage of the HPSP that vested in the financial year where a substantial portion of the performance
period was completed at the financial year-end. Messrs Johnson’s and Proctor’s awards have been pro-rated for their period of service
as Chief Executive in 2017.
iv.
LTIP award percentage reflects the award value expressed as a percentage of maximum award opportunity received each year measured
at 31 December. The LTIP expired in 2015 with no further awards outstanding.
v.
Restated as per single figure table disclosure on page 152.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
158
Strategic Report
Corporate Governance
Financial Statements
Other Information
Chief Executive workforce pay ratio
Year
Method
25th percentile
pay ratio
50th percentile
pay ratio
75th percentile
pay ratio
2019
Option A
49:1
38:1
22:1
Workforce Pay Quartiles
$45,663
$58,603
$99,521
2020
Option A
22:1
18:1
10:1
Workforce Pay Quartiles
$51,239
$61,329
$107,314
2021
Option A
21:1
17:1
11:1
Workforce Pay Quartiles
$52,699
$63,718
$102,807
2022
Option A
55:1
43:1
26:1
Workforce Pay Quartiles
$48,736
$62,108
$105,704
2023
Option A
70:1
54:1
33:1
Workforce Pay Quartiles
$49,837
$64,467
$106,492
2024
Option A
143:1
107:1
66:1
Workforce Pay Quartiles
$52,689
$70,398
$114,493
The Company has elected to voluntarily disclose the pay ratio of the Group’s Chief Executive and
workforce, in line with The Companies (Miscellaneous Reporting) Regulations 2018 and has adopted
Option A from the regulations as the basis for presenting the pay ratio.
Hunting is not required to present this information, given that its UK workforce is below the reporting
threshold, as detailed in the regulations. Option A has been selected by the Committee as it believes
this methodology aligns closely with the Chief Executive’s single figure remuneration calculation. The
Remuneration Committee believes that the compensation framework in operation across the Group
is appropriate and, in addition to a base salary and benefits appropriate to the relevant jurisdiction of
operation, can include annual bonuses and participation in long-term incentive programmes. External
benchmarking is a regular feature of the Group’s overall pay framework to ensure Hunting remains
competitive in its chosen markets.
This data has been collated as at 31 December 2024 based on 223 UK employees (2023 – 203),
which represents 9% (2023 – 8%) of the Group’s total workforce. The basis of the workforce pay
calculations is aligned with the basis of preparation of the single figure table on page 152, comprising
fixed and variable emoluments and calculated on a full-time equivalent basis, in line with the
requirements of the regulations. Further, the above disclosure assumes a maximum company pension
contribution of 12% of base salary. However, it is noted that not all UK employees elect to receive this
level of contribution.
The changes to the Chief Executive pay ratios in the year mainly reflect a higher HPSP vesting
percentage of 98.3% compared to 34.2% in 2023. In addition, no annual bonuses were paid to
employees within the EMEA operating segment, given the losses recorded in the year, lowering
the overall compensation paid in the year to the workforce.
Relative importance of spend on pay
The table below shows the relative importance of spend on employee remuneration in relation to
corporate taxation, dividends and capital investment. The choice of performance metrics represents
certain operating costs of the Group and the use of operating cash flows in delivering long-term
shareholder value.
2024
$m
2023
$m
Change
Employee remuneration
i
268.2
254.8
5%
Net tax paid
ii
3.5
9.1
(62)%
Dividends paid to Hunting PLC shareholders
ii
16.7
15.0
11%
Capital investment
ii
25.3
23.7
7%
i.
Includes staff costs for the year (note 7) plus benefits in kind of $39.7m (2023 – $35.8m), which primarily comprises US medical insurance
costs.
ii.
Please refer to NGM N.
Payments to past Directors (audited)
There were no payments to past Directors in the year.
Payments for loss of office
There were no payments for loss of office in the year.
External advisers
Mercer and Pearl Meyer are engaged by the Committee to provide remuneration consultancy
services. Their appointments were subject to formal tenders and both companies are regarded as
independent, having been appointed by and acting under direction of the Committee. Mercer is a
signatory to the UK Remuneration Consultants’ Group Code of Conduct and provides UK governance
advice and compensation benchmarking, while Pearl Meyer provides US remuneration data for
consideration by the Committee. The total cost of advice to the Committee during the year to
31 December 2024 was $202,989 (2023 – $300,553) and includes fees paid in respect of review work
in salary benchmarking, Policy review, share plans, and remuneration reporting disclosure requirements.
Fees are charged on a time basis for consultancy services received. Fees paid to Mercer totalled
$190,214 (2023 – $300,553) in the year, while fees paid to Pearl Meyer were $12,775 (2023 – $nil).
Neither Mercer nor Pearl Meyer have any other connection to the Company or any Director.
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
159
Strategic Report
Corporate Governance
Financial Statements
Other Information
Implementation of policy in 2025
The remuneration policy for 2025 will be applied in line with those detailed on pages 143 to 147.
Salary and fees
Base salary increases for 2025 will be determined by the Committee in April 2025. Any increase will
be in line with the wider workforce.
Pension and benefits
Jim Johnson will continue to receive contributions towards a US deferred compensation scheme and
a US 401k matched deferred savings plan, in line with previous years. Bruce Ferguson will continue
to receive a cash sum in lieu of a pension contribution, which will be fixed at 12% of his base salary.
No changes are anticipated to the provision of benefits that will continue to include healthcare
insurance, a company car and fuel benefits or allowance in lieu.
Annual bonus
The annual performance-linked bonus for 2025 will operate in line with the 2024 Directors’
Remuneration Policy. The Committee will disclose details of performance against the pre-set financial
targets and personal performance objectives after the year-end, as the Board believes that forward
disclosure of the financial targets is commercially sensitive.
The annual performance-linked bonus plan for 2025 is based on the following metrics:
Proportion of award
Performance metric
60%
Adjusted profit before tax
20%
Return on average capital employed
20%
Personal performance objectives
Long-term incentive plan
In April 2025, an award under the 2024 HPSP will be granted to the executive Directors and wider
members of the Group. The performance-based awards to the Chief Executive and Finance Director
will be granted over shares with a face value of 350% of base salary for Mr Johnson and 160% of base
salary for Mr Ferguson. The performance conditions to be adopted for these awards are expected
to include relative TSR (30%); ROCE (25%); adjusted diluted EPS (15%); Free Cash Flow (15%);
and the Strategic Scorecard (15%). The proposed TSR peer group will comprise: Akastor, Cactus,
Core Laboratories, Expro Group Holdings, Flotek Industries, Forum Energy Technologies, Innovex
International Inc, Liberty Energy, Nine Energy Services, NOV, Oceaneering International, Oil States
International, Patterson-UTI Energy, Petrofac, Schoeller Bleckmann, TechnipFMC, Tenaris, TETRA
Technologies, and Vallourec. Time-based awards will also be granted to the executive Directors,
being 100% of base salary for the Chief Executive and 50% for the Finance Director, which are subject
to an underpin based on holistic company performance assessed by the Committee prior to vesting
taking account of both relative business performance in terms of the Company’s financial KPIs and
shareholder returns and key ESG-related performance indicators; which include sustainability, health
and safety, quality assurance and reputation.
The performance targets will be detailed in the Stock Exchange announcement that accompanies
the award, which can be located at www.huntingplc.com.
On behalf of the Board
Paula Harris
Chair of the Remuneration Committee
6 March 2025
Remuneration Committee Report
continued
Annual Report on Remuneration
continued
Hunting PLC
Annual Report and Accounts 2024
160
Strategic Report
Corporate Governance
Financial Statements
Other Information
Member
Invitation
Number of meetings held
4
Number of meetings attended
(actual/possible):
Margaret Amos
(from 10 January 2024)
4/4
–
Annell Bay (to 1 February 2025)
4/4
–
Stuart Brightman
2/2
2/2
Carol Chesney (Committee Chair)
4/4
–
Bruce Ferguson
–
4/4
Jay Glick (to 17 April 2024)
–
2/2
Paula Harris
4/4
–
Jim Johnson
–
4/4
Cathy Krajicek (from 3 March 2025)
0/0
–
Keith Lough
4/4
–
Carol Chesney
Chair of the Audit and Risk Committee
Audit and Risk Committee Report
With the Group’s improved
financial performance in the year,
the Committee’s work has focused
on Hunting’s working capital and
cash generation cycles, particularly
following the receipt of $231m of
orders from Kuwait Oil Company.
The deteriorating performance of the
Hunting Titan operating segment led
to closer monitoring of its underlying
market, its cost base, and its balance
sheet. The impairment to goodwill
recorded at the year-end reflects
a balanced view by management
and the Board of the carrying
values of the operating segment
on the consolidated balance sheet.
The projections reflect a level of
improvement in the US market,
as noted in the outlook statement.
The Committee received several
briefings in the year to prepare for
compliance with Provision 29
‘Internal Controls’ of the 2024
UK Corporate Governance Code.
There is much work to do in the
coming years, but the Board
remains confident of being
compliant with most provisions
in the medium term.
Introduction
Hunting has delivered another year of increased
revenue and adjusted profits, in line with the
Group’s medium-term strategy for growth.
Of note is the improved cash generation of the
Company and the year-end total cash and bank/
(borrowing) position of $104.7m, which reflects a
robust balance sheet, maintained through strong
working capital management.
While Hunting’s OCTG, Subsea and Advanced
Manufacturing product groups have performed
well during the year, the Perforating Systems
product group saw extremely challenging
markets, driven by lower commodity prices and rig
counts across North America. This led to a below
target trading performance for the product group,
which led to a restructuring being announced
during Q2 2024 and an impairment to the
carrying value of goodwill for the associated
cash generating units at the year-end. Despite
this, the Committee and wider Board believe that
Hunting remains in a solid position to execute the
Hunting 2030 Strategy.
The $300m of new, committed borrowing
facilities secured in October 2024 also reflect
management’s strong performance in increasing
liquidity and securing funding to execute our
growth strategy. At the year-end, Hunting was
able to record total liquidity of c.$344.8m, which
represents the combined cash and borrowing
capacity at 31 December 2024.
In April 2024, the Committee reviewed Deloitte’s
internal controls report and responded with
endorsing new procedures being implemented
in the year by management. An update to the
implementation of these new controls was
presented at the December 2024 meeting of the
Committee. Further, new procedures are being
put in place in respect of the provisions of the
2024 UK Corporate Governance Code.
In the year, the Committee continued to review the
financial reporting, risk management, and internal
control framework in place across the Group.
During the year, enhanced risk management
procedures were presented to the Committee,
which included a refreshed understanding of
the risk culture and risk universe of the Group.
Further, the Committee also received briefings
by the central finance function on the plans
for compliance with the 2024 UK Corporate
Governance Code. The Committee noted the
major changes included in the new Code, which
centre on risk management and internal control
– with a requirement by the Board to make a
declaration on the robustness of the internal
control environment in the coming years.
The briefings held in the year focused on the
approach management will take to enhance
the internal control procedures and operating
environment, and also the investment required
to meet this compliance.
The Committee, therefore, proposed to the
Board that its title be renamed as the Audit
and Risk Committee, reflecting the enhanced
workstreams to be included in the years ahead.
Composition and frequency of meetings
The Committee currently comprises five
independent non-executive Directors (at 6 March
2025) and is chaired by Carol Chesney.
Following appointment to the Board on
10 January 2024, Margaret Amos joined the
Committee. On 17 April 2024, Stuart Brightman
stepped down from the Committee following his
appointment as Company Chair, which followed
the retirement of Jay Glick on the same date.
Hunting PLC
Annual Report and Accounts 2024
161
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annell Bay also stepped down from the
Committee on 1 February 2025, following ten
years’ service to the Company. Cathy Krajicek
joined the Committee on her appointment
as a Director on 3 March 2025.
Mrs Chesney is a qualified Chartered Accountant
and is considered to have recent and relevant
financial experience. Ms Harris (Chair of the
Remuneration Committee), Ms Krajicek and
Mr Lough have experience of the global energy
industry, with particular expertise in UK and US
oil and gas markets. Dr Amos brings accounting,
aviation and broader non-oil and gas experience
to the Board.
Further details of the Committee’s experience
can be found in the biographical summaries
set out on pages 116 and 117.
The Committee normally meets four times a year
and operates under written terms of reference
approved by the Board, which are published on
the Company’s website at www.huntingplc.com.
During 2024, the Committee met four times, in
February, April, August, and December; and the
attendance record of the Committee members
and Board invitees is noted in the table on the
previous page.
All Directors and internal and external auditors
are normally invited to attend meetings.
Responsibilities
The principal responsibilities of the Audit and Risk
Committee are to:
• Monitor and review reports from the
executive Directors, including the Group’s
financial statements and Stock Exchange
announcements;
• Consider and approve any adjusting items
proposed by management;
• Provide the Board with a recommendation
regarding the Half Year and Annual Report
and Accounts, including whether they are
fair, balanced and understandable;
• Review the Company’s and Group’s
Going Concern and Viability Statement;
• Monitor, review and assess the Group’s
systems of risk management and
internal control;
• Review reports from the Group’s external
and internal auditors, including approving the
proposed audit plans, scope and resourcing;
and review whether the external and internal
auditors have met their respective audit plans;
• Consider and recommend to the Board the
appointment or reappointment of the external
auditor as applicable;
• Agree the scope and fees of the external audit;
• Monitor and approve engagement of the
external auditor for the provision of non-audit
services to the Group; review the external
auditor’s independence and objectivity as
well as the effectiveness of the external audit
process; and review the external auditor’s
management letter; and
• Monitor corporate governance and accounting
developments.
Review of the 2024 financial statements
The Committee reviews final drafts of the Group’s
Report and Accounts for both the half and full
year. As part of this process, the performance
of the Group’s major operating segments is
considered, with key judgements, estimates
and accounting policies being approved by
the Committee ahead of a recommendation
to the Board.
In addition to briefings and supporting reports
from the central finance team on significant
issues, the Committee engages in discussion
with Deloitte LLP, the Group’s external auditor.
Work undertaken by the Committee during 2024
Feb
Apr
Aug
Dec
Financial report
Annual Report and Full Year Results announcement
•
Going Concern basis
•
•
Viability Statement
•
Half Year Report and Half Year Results announcement
•
Review accounting policies
•
Internal controls and risk management
Risk management and internal controls report
•
•
•
Key risks and mitigating controls
•
Effectiveness of internal controls and internal audit function
•
Monitoring the proposed procedures and investments required
for the new UK Corporate Governance Code procedures
•
•
Internal audit report
•
•
•
Internal audit resourcing
•
•
•
•
Internal audit plan
•
External auditor
Auditor’s objectivity, independence, and appointment
•
Full Year and Half Year report to the Audit and Risk Committee
•
•
Final Management letter on internal controls
•
Auditor’s performance and effectiveness
•
Proposed year-end audit plan including scope, fees and engagement letter
•
•
Risk of auditor leaving the market
•
Other business
Non-Audit Services Policy Review
•
Employment of Former Audit Staff Policy Review
•
Committee effectiveness and terms of reference
•
Review resourcing needs
•
Significant matters reviewed by the Committee in connection with the 2024 Annual Report and
Accounts were as follows:
Impairment reviews
The Committee receives reports on the review of impairment of goodwill and other assets held on
the consolidated balance sheet. A review for impairment triggers was undertaken at the half-year which
indicated limited headroom over the carrying value of the Hunting Titan group of CGUs. As part of
the annual goodwill impairment review, and further reviews for impairment triggers through to the
year-end, management determined there to be an impairment to the carrying value of the Hunting
Titan group of CGUs. This was due to the Hunting Titan operating segment recording deteriorating
results in the year, the subdued North American market reported in the year which led to a reduced
medium-term trading outlook for the business and the likely lower gross margins to be generated
by the segment in the medium term.
Audit and Risk Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
162
Strategic Report
Corporate Governance
Financial Statements
Other Information
As a result, the full-year assessment concluded
that a $109.1m impairment to the carrying value
of goodwill should be recorded. As part of the
year-end audit process, the external auditor
reviewed management’s impairment models,
in particular the Hunting Titan impairment model,
and concluded that the impairment to goodwill
recorded at the year-end was appropriate.
The Committee challenged management on
the medium-term revenue and margin forecasts
for the Hunting Titan operating segment, the tax
treatment of the impairment and the discount rates
used to derive the quantum of the impairment.
The Committee noted the other business units
where headroom for the carrying value of goodwill
was more limited, with these units undergoing
detailed modelling as part of the year-end process
to support the values recorded.
Management continues to utilise independent
drilling and production projections published
by Spears & Associates to support its analysis,
with summaries presented in the Market Summary
section of the Strategic Report on pages 40 to 42.
Given the quantum of the impairment, the
Committee reviewed the recognition of the
impairment as an adjusting item and agreed
that this treatment was appropriate.
Review of import duties
During the year, the Committee reviewed
procedures in respect of the treatment of import
duties within certain subsidiaries and concluded
that it would be necessary to record a prior year
provision in respect of outstanding payments
to be made to a tax authority. The Committee
challenged management on its local control
procedures in respect of import/export
documentation, in addition to the corrective
actions to the control environment.
Due to the nature and quantum of the provision,
the Committee agreed that the provision of
$9.6m be treated as an adjusting item, and
noted that the restatement of the prior year
results was appropriate.
The external auditor reviewed the treatment of
the prior year provision and the restatement of the
prior-period financial statements and concluded
that the adjustments were appropriate.
Netherlands inventory and internal control
As part of the year-end audit procedures, which
includes inventory cycle counts and stock taking,
it was found that some items of OCTG inventory
had been recorded in error at the Group’s facility
in the Netherlands. A full review of inventory and
internal control procedures was completed in
January 2025, with management determining
that c.$4.2m of stock should be written off
due to this error. The Committee challenged
management on the control environment in place
in the Netherlands and the corrective actions
required, given the future reporting and
attestation requirements on internal control.
The Audit and Risk Committee and the wider
Board of Directors were briefed on this issue
during January/February 2025, with the
Committee agreeing that the total error should be
booked within the operating result of the EMEA
operating segment, and not as an adjusting item.
Revenue recognition
Given that a material proportion of the Group’s
revenue originates from the OCTG, Subsea
Technologies and Advanced Manufacturing
products groups, revenue recognition remains an
area of focus for the Committee, and in particular
the “on-time” or “over time” revenue recognition
of key longer-term contracts.
The Committee noted that the enhanced
procedures implemented in recent years,
including the external review of certain contracts
to agree the appropriate accounting treatment,
enabled a rigorous assessment to be made of
the appropriate accounting treatment, with the
Committee being comfortable that longer-term
contracts had been recorded appropriately.
Additional scrutiny of the Kuwait Oil Company
(“KOC”) contracts was applied due to their size,
and is an example of the application of our
enhanced procedures. The Committee challenged
management on its recognition approach to the
KOC contracts, with the Committee being
comfortable with the accounting treatment.
Tax
The Committee continues to monitor both direct
and indirect tax risk, tax audits and provisions
held for taxation in view of the international
spread of operations. In 2023, the Company
recognised $81.3m of deferred tax assets
(“DTAs”) in respect of Hunting’s US businesses
on the consolidated balance sheet. Given the
deteriorating results in Hunting Titan that led to
the adjusting item being recorded in the year, the
Committee reviewed reports to support the
ongoing recognition of these DTAs.
Following a briefing from the Group’s Head of
Tax, the Committee concluded that, given the
medium-term projections of the Group’s US
businesses, it remained appropriate for the DTAs
to continue to be recognised on the Company’s
balance sheet.
Inventory valuation and provisioning
procedures
During 2024, inventory valuation and provisioning
procedures continued to be an area of close
review for the Committee. The Committee
reviewed reports by both management and the
external auditor on inventory valuation and was
satisfied that the inventory valuation model was
being deployed appropriately by management,
that the judgements being applied were balanced,
and the carrying values of inventories at the
year-end were appropriate.
Inventories
At the year-end, the Group held $303.3m
(2023 – $328.4m) of inventory. This represents
approximately 34% of the Group’s net assets
(2023 – 35%).
Inventory levels have decreased despite the
increase in activity levels in the Group and certain
inventory purchases were increased to meet the
requirements of the sales order book. However,
there was increased focus in the year on
reducing inventory carried in Hunting Titan.
As noted above, the inventory provisioning
methodology continued to be refined through
the year, with the Committee satisfied that a
robust process was now embedded, which
encompassed all key product lines sold by
the Group.
Property, plant and equipment (“PPE”)
The year-end balance sheet includes $252.8m
(2023 – $254.5m) for PPE. This represents
approximately 28% of the Group’s net assets
(2023 – 27%). The movement in PPE reflects
depreciation of $25.2m and disposals of $2.8m
offset by additions of $25.2m and other items
totalling $1.1m.
Audit and Risk Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
163
Strategic Report
Corporate Governance
Financial Statements
Other Information
The Committee reviewed the PPE impairment
tests and, following discussion, was satisfied
that the assumptions and the disclosures in
the year-end accounts were appropriate.
Goodwill
The year-end balance sheet includes $45.1m
(2023 – $154.4m) of goodwill, following the
impairment recorded within the Hunting Titan
cash generating unit, as noted above. The
year-end carrying value represents approximately
5% of the Group’s net assets (2023 – 16%).
The Committee considered and challenged the
discount rates and the other assumptions used
in the goodwill review process. After discussion,
it was satisfied that the carrying values recorded
and the disclosures in the year-end accounts
were appropriate.
Other intangible assets
The year-end balance sheet includes other
intangible assets of $39.4m (2023 – $40.8m).
This represents approximately 4% of the Group’s
net assets (2023 – 4%). Additions in the year were
$4.8m (2023 – $10.9m) and the amortisation
charge recorded in the consolidated income
statement was $5.9m (2023 – $6.6m). The
Committee considered and confirmed the
appropriateness of the assumptions and factors
used in the impairment review process and were
comfortable with the carrying values, as recorded.
Right-of-use assets
The year-end balance sheet includes right-of-use
assets of $28.3m (2023 – $26.2m). This represents
approximately 3% of the Group’s net assets
(2023 – 3%). The movement in the year is
predominantly attributed to additions of $2.7m
(2023 – $6.2m) and lease modifications of $7.0m
(2023 – $0.9m), offset by depreciation of $7.2m
(2023 – $6.6m).
The Committee reviewed the movement in the
carrying values of these items and confirmed the
appropriateness of the assumptions and factors
used in the review process and were comfortable
with the items, as recorded.
Adjusting items and presentation
of financial statements
The Committee is responsible for reviewing
and approving any adjusting items proposed by
management. As noted above, an adjusting item,
in respect of the impairment of goodwill within
the Hunting Titan operating segment, totalling
$109.1m, was recorded as part of the year-end
audit procedures, together with a deferred tax
credit of $27.8m. Further, management noted
the positive contribution from the Group’s joint
ventures and associates projected for the
medium term and proposed to the Committee
that the profit/(loss) contribution from this line
item be included in the Group’s operating result
within the consolidated income statement from
1 January 2024. A restatement of the prior-period
financial statements was recorded in the year,
following approval by the Committee. As noted
above, the 2023 financial statements were
restated to reflect the $9.1m provision in respect
of a revised import duty assessment conducted
in the year. The Committee reviewed the
appropriateness of the above restatements to
the financial statements, and the adjusting items
recorded in the year, and following discussion,
approved the accounting treatment.
Area of judgement
The determination of when control is transferred
to a customer and when revenue is recognised is
an area of judgement. The determination can be
complex in contracts where goods are shipped
and confirming shipping documentation is
produced after the goods have been loaded onto
a vessel, potentially in a different financial period.
This was an area of challenge from the external
auditor during the year.
Viability Statement and Going Concern basis
The Committee monitored assumptions around
Going Concern at the half and full year, as well as
those around the Group’s Viability Statement for
the full year. Driven by the improved profitability
of the Group, led by the performance of the North
America, Subsea Technologies and Asia Pacific
operating segments, the Committee concluded
that good support for Hunting’s longer-term
viability exists. In particular, the Committee noted
the increase to total cash and bank/(borrowings)
at 31 December 2024, reflecting improved
receivable collections and the use of working
capital instruments to shorten the cash receipt
cycle of the orders received from KOC and noted
that the consolidated balance sheet at the
year-end was robust.
The Committee also noted the refinancing
of the Group’s borrowing facilities, including the
cancellation of the $150m Asset Based Lending
facility and the agreement of $300m of new,
committed borrowing facilities in October 2024,
which comprised a $200m revolving credit facility
and a $100m term loan, which in combination
provides Hunting with c.$344.8m of liquidity to
fund its longer-term strategic objectives. The
Committee noted these positive developments
in the year and their impact on going concern
and viability.
As part of the Company’s 2024 half-year and
full-year procedures, management presented
various trading scenarios to support the Going
Concern assumption, which were reviewed
by the Committee and the external auditor.
This included a downside trading scenario.
The Going Concern review period covers a period
of at least 12 months after the date of approval
of these financial statements, and the Directors
consider that the Going Concern assumption
continues to be suitable for the Group. The
Directors have reached their conclusion on Going
Concern after assessing the Group’s principal
risks, as set out in detail on pages 104 to 109.
As part of Hunting’s Viability Statement
procedures, management prepared an extended
forecast that provided trading projections to
2028. The Board approved this in January 2025
and it was used to support the carrying values of
assets held on the consolidated balance sheet.
On 3 March 2025, the Committee approved the
Viability Statement, detailed on pages 110 to 111
of the Strategic Report, noting that it presented
a reasonable outlook for the Group for the next
three years.
Fair, balanced and understandable
assessment
The Committee reviewed the financial
statements, together with the narrative contained
within the Strategic Report set out on pages 2 to
112, and believes that the 2024 Annual Report
and Accounts, taken as a whole, is fair, balanced
and understandable. In arriving at this conclusion,
the Committee undertook the following:
• Review and dialogue in respect of the monthly
management accounts and supporting
narrative circulated to the Board;
• Review of early drafts of the Annual Report
and Accounts, providing relevant feedback
to the executive Directors;
• Regular review and discussion of the financial
results during the year, including briefings by
Group finance and operational management;
• Receipt and review of reports from the external
and internal auditors.
Audit and Risk Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
164
Strategic Report
Corporate Governance
Financial Statements
Other Information
The Committee advised the Board of its
conclusion that the 2024 Annual Report and
Accounts, taken as a whole, was fair, balanced
and understandable at a Meeting of Directors
on 3 March 2025.
Risk management and effectiveness
of internal control
In determining its opinion on the effectiveness
of the risk management and internal financial
controls during 2024, the Committee considered
the results of internal audit work, the key risk and
areas of judgement and estimation uncertainty,
issues identified by management or reported
through whistleblowing arrangements (including
the associated investigations) and the output of
the external audit work.
The Group has an established risk management
framework and internal control environment
which it continues to invest in, through
improvements to the general IT environment
and its people and processes. In assessing the
effectiveness of the internal control environment
in the current year the Committee noted control
deficiencies both in the specific areas outlined
within this report, and more broadly in relation
to revenue recognition and General IT Controls.
As noted elsewhere, a review of the Group’s
internal control environment is underway as part
of the compliance procedures for the 2024 UK
Corporate Governance Code, and due to the
control deficiencies identified in the year.
During the year, the Group’s risk management
reporting procedures have been enhanced,
following the appointment of a Group Risk
Manager in 2023. Enhanced risk identification
processes were introduced, with the Directors
completing a risk workshop to agree the strategic
and principal risks facing the Group, as the
Hunting 2030 Strategy is being executed.
On 3 March 2025, the Committee met and
considered the Company’s risk management
and internal control environment in operation
throughout the year. Following discussion, the
Committee agreed that overall the Company’s
risk and control framework remained effective,
despite the control matters recorded within
the EMEA operating segment discussed on
page 163. The Committee noted the control
enhancements to be implemented in the
Netherlands and UK operations and concluded
that the remedial actions to the local control
environment were appropriate.
Internal audit
An annual programme of internal audit
assignments in respect of 2024 was reviewed
and approved by the Committee in February 2024.
During the year, the Committee received reports
from the Internal Audit function. The Chair of the
Committee also had regular dialogue with the
function throughout the year. During the year,
11 field audits were completed in line with the
2024 Internal Audit Plan.
In addition, further work on revenue recognition
and control review procedures was carried out,
given the ongoing implementation of the Group’s
new ERP system within a number of businesses.
In the year, one business unit was reviewed
in detail for revenue recognition and allocation
of labour costs, given the increase in activity
reported. The Committee met with the Head
of Internal Audit, without the presence of the
executive Directors, on three occasions during
the year. The Committee reviews the internal audit
process and effectiveness as part of the Group’s
internal control and risk assessment programme.
The effectiveness of the Internal Audit function
was considered by the Committee at its February
2024 meeting, and included a review of the
scope of work completed in the year, the control
recommendations proposed and implemented
by management and the speed of response by
management to reports agreed. Following this
review, the Committee concluded that the
function remained effective.
External audit
Deloitte LLP was appointed by the Group’s
shareholders as external auditor in 2019,
therefore, no tenders have been undertaken
in the year due to their current tenure.
During 2024, the audit engagement partner
rotated from the Hunting account, with Thomas
Murray being appointed as lead audit partner
following conclusion of the 2023 year-end audit.
As part of a wider refreshing of the Deloitte
account, the senior audit manager rotated off
following the 2024 half-year review process.
The external auditor presented reports at the
February, April, August and December meetings
of the Audit Committee during 2024. Further, the
Chair of the Committee also had regular dialogue
with the audit engagement partner throughout
the year. In April 2024, Deloitte LLP presented its
Management Controls Report, which highlighted
control improvements that they recommend be
made by the Group. On 3 March 2025, a full-year
report by Deloitte LLP was considered ahead of
publication of the Group’s 2024 Annual Report
and Accounts.
The Committee normally meets with the external
auditor, without executive Directors present, at
the end of each formal meeting. During the year,
the Company complied with the provisions of the
Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of
Competitive Tender Process and Audit
Committee Responsibilities) Order 2014.
Materiality
The Committee discussed materiality with the
external auditor regarding both accounting errors
to be brought to the Audit and Risk Committee’s
attention and amounts to be adjusted so that
the financial statements give a true and fair view.
Overall, audit materiality was set at $4.0m
(2023 – $4.5m), which equates to 5.3% of the
adjusted profit before tax result, and approximately
0.4% (2023 – 0.5%) of the Group’s total external
revenue reported in 2024. Furthermore, the
auditor agreed to draw to the Audit and Risk
Committee’s attention all identified, uncorrected
misstatements greater than $0.2m and any
misstatements below that threshold considered
to be qualitatively material.
Audit scope
The Audit and Risk Committee considered the
audit scope and materiality threshold. The audit
scope addressed Group-wide risks and local
statutory reporting, enhanced by desktop reviews
for smaller, low risk entities. 87% of the Group’s
reported revenue and 85% of the Group’s net
assets were audited, covering 20 reporting units,
including a number of investment holding
companies, across five countries.
Audit and Risk Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
165
Strategic Report
Corporate Governance
Financial Statements
Other Information
Audit effectiveness and independence
The external auditor’s full-year report includes
a statement on their independence, their ability
to remain objective and their ability to undertake
an effective audit. The Committee considers and
assesses this independence statement on behalf
of the Board, taking into account the level of fees
paid, particularly for non-audit services. Having
considered these factors, the Committee
concluded that Deloitte LLP was independent
from the Group throughout the year and to the
date of their audit report.
Auditor reappointment
Following discussion in March 2025, the
Committee approved the recommendation
to propose the reappointment of Deloitte LLP
at the Company’s 2025 Annual General Meeting.
The effectiveness of the audit process was
considered throughout the year, with a formal
review undertaken by the Company at the April
meeting of the Committee. The assessment
summarises management feedback and
considers the performance of the external
auditor, including:
• The external auditor’s understanding of
the Group’s business and industry sector;
• The planning of the audit and execution of
the audit plan by the external auditor approved
by the Committee; and
• The communication between the Group
and audit engagement team.
In addition, the Committee reviewed and
took account of the reports from the Financial
Reporting Council on Deloitte LLP, and reviewed
the Transparency Report prepared by Deloitte LLP.
After considering these matters, the Committee
was satisfied with the effectiveness of the
year-end audit process.
Non-audit services
The Committee closely monitors fees paid
to the auditor in respect of non-audit services.
With the exception of non-audit services which
included the interim review process and the
ESEF assurance report, which totalled $0.3m
(2023 – $0.2m), there were no non-audit service
fees paid during the year (2023 – $nil). The scope
and extent of non-audit work undertaken by the
external auditor was monitored by, and required
prior approval from, the Committee to ensure that
the provision of such services did not impair the
external auditor’s independence or objectivity.
Review of Committee effectiveness
In H2 2024, the Committee reviewed its
effectiveness as part of the wider externally
facilitated Board and Committee Effectiveness
Review, which was completed by Clare Chalmers
Limited. The review’s findings were reported to
the Committee and wider Board at the
December 2024 Meeting of Directors. No issues
were identified as part of this review process.
2024 UK Corporate Governance Code
In January 2024, the Financial Reporting Council
issued a new version of the UK Corporate
Governance Code, which included a number
of revisions that will impact the work of the
Audit and Risk Committee in the coming years.
The most significant change proposed in the
new Code is the introduction of enhanced Internal
Control and Risk Management procedures and
reporting, with the recommendation that by 2026
UK public companies should make a declaration
in their external reporting of the robustness
and effectiveness of material financial and
non-financial controls.
In 2024, Hunting’s central finance function
commenced a project to review the Group’s
internal control environment, with the intention of:
1)
Reviewing and enhancing the documentation
of the Group’s internal controls;
2)
Identifying material financial and non-financial
controls in line with the requirements of
the Code;
3)
Enhancing management oversight and
consistency of risk reporting and the grading
of principal risks; and
4)
Correlating material controls with relevant
assurance procedures.
New personnel were hired in the central finance
function to assist in this work, including a new
Internal Controls Manager, an IT Systems
Manager, in addition to a Group Risk Manager
who was appointed in 2023, to bring together the
reporting of the new internal control procedures.
New software to assist in the reporting of controls
was purchased in January 2025 as part of this
important project. At the August and December
2024 meetings of the Committee and wider
Board, an update was given by management
on the proposed procedures and investments
required for the new Code procedures.
As noted on page 130, a roadmap to compliance
with the 2024 UK Corporate Governance Code
has been published, with the Committee and
wider Board targeting compliance with the new
Code provisions on appropriate Group-level
policies, risk management and internal controls
by 2026. Further briefings are planned in 2025,
given the extra work anticipated by management
to comply with the 2024 Code.
Audit Committees and the External Audit:
Minimum Standard
The Audit Committee has complied with the
requirements of the Minimum Standard during
the year, giving consideration to the non-audit
relationships held by the Company to ensure
there is a fair choice as and when an audit tender
is undertaken. No tender was completed in the
year, therefore the requirements on appointment
and remuneration are not relevant in 2024.
The Audit and Risk Committee has ensured that
the external auditor has had access to Company
staff and records and encourages challenge
to management’s position. Ahead of the AGM,
the Audit and Risk Committee also considers
the objectivity and independence of the external
auditor, prior to recommending to the Board
of Directors the reappointment of the auditor.
The effectiveness of the external audit is also
considered annually.
On behalf of the Board
Carol Chesney
Chair of the Audit and Risk Committee
6 March 2025
Audit and Risk Committee Report
continued
Hunting PLC
Annual Report and Accounts 2024
166
Strategic Report
Corporate Governance
Financial Statements
Other Information
Directors’ Report
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the
Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under
that law the Directors are required to prepare the
group financial statements in accordance with
United Kingdom adopted international
accounting standards. The Directors have also
chosen to prepare the parent Company financial
statements under United Kingdom adopted
international accounting standards. Under
company law the Directors must not approve the
financial statements unless they are satisfied that
they give a true and fair view of the state of affairs
of the Company and of the profit or loss of the
Company for that period.
In preparing these financial statements,
International Accounting Standard 1 requires
that Directors:
• Properly select and apply accounting policies;
• Present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
• Provide additional disclosures when
compliance with the specific requirements of
the financial reporting framework is insufficient
to enable users to understand the impact of
particular transactions, other events and
conditions on the entity’s financial position
and financial performance; and
• Make an assessment of the Company’s ability
to continue as a going concern.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Company’s transactions
and disclose, with reasonable accuracy at any
time, the financial position of the Company
and enable them to ensure that the financial
statements comply with the Companies Act
2006. They are also responsible for safeguarding
the assets of the Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the
maintenance and integrity of the corporate and
financial information included on the Company’s
website. Legislation in the United Kingdom
governing the preparation and dissemination
of financial statements may differ from legislation
in other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
• The financial statements, prepared in
accordance with the relevant financial
reporting framework, give a true and fair
view of the assets, liabilities, financial position
and profit or loss of the Company and the
undertakings included in the consolidation
taken as a whole;
• The Strategic Report includes a fair review
of the development and performance of the
business and the position of the Company and
the undertakings included in the consolidation
taken as a whole, together with a description
of the principal risks and uncertainties that
they face; and
• The Annual Report and Accounts, taken as a
whole, are fair, balanced and understandable
and provide the information necessary for
shareholders to assess the Company’s
position and performance, business model
and strategy.
This responsibility statement was approved
by the Board of Directors at their meeting
on Tuesday 4 March 2025.
Directors
The Directors of the Company, as at the date of
signing these accounts, are listed on pages 116
and 117.
Powers of the Directors
Subject to the Articles, UK legislation and any
directions prescribed by resolution at a general
meeting, the business of the Company is
managed by the Board. The Articles may only
be amended by special resolution at a general
meeting of shareholders. Where class rights are
varied, such amendments must be approved by
the members of each class of share separately.
The Directors have been authorised to allot and
issue Ordinary shares and to disapply statutory
pre-emption rights. These powers are exercised
under authority of resolutions of the Company
passed at its AGM. During the financial year
ended 31 December 2024, no Ordinary shares
were issued pursuant to the Company’s various
share plans.
The Company has authority, renewed annually,
to purchase up to 14.99% of the issued share
capital, equating to 24,724,518 shares. Any
shares purchased will either be cancelled and
the number of Ordinary shares in issue reduced
accordingly, held in treasury, sold for cash, or
(provided UK Listing Rule requirements are met)
transferred for the purposes of or pursuant
to an employee share scheme.
These powers are effective for 15 months from
the date of shareholder approval, or up to the
next general meeting where new authorities are
sought. The Directors will be seeking a renewal
for these powers at the 2025 AGM.
Appointment and replacement of Directors
The rules about the appointment and replacement
of Directors are contained in the Articles. On
appointment, in accordance with the Articles,
Directors may be appointed by a resolution of the
Board but are then required to be reappointed by
ordinary resolution by shareholders at the
Company’s next AGM.
Directors’ interests
Details of Directors’ remuneration, service
contracts and interests in the Company’s shares
and share options are set out in the Directors’
Remuneration Policy and Annual Report on
Remuneration, located at www.huntingplc.com.
Further information regarding employee
long-term incentive schemes is given in note 37
of the financial statements.
Directors’ conflict of interest
All Directors have a duty under the Companies
Act 2006 to avoid a situation in which they have,
or could have, a direct or indirect conflict of
interest with the Company. The duty applies,
in particular, to the exploitation of any property,
information or opportunity, whether or not the
Company could take advantage of it. The Articles
provide a general power for the Board to
authorise such conflicts.
Directors are not counted in the quorum for
the authorisation of their own actual or potential
conflicts. Authorisations granted are recorded
by the Company Secretary in a register and are
noted by the Board. On an ongoing basis, the
Directors are responsible for informing the
Company Secretary of any new, actual or
potential conflicts that may arise, or if there are
any changes in circumstances that may affect
an authorisation previously given.
Hunting PLC
Annual Report and Accounts 2024
167
Strategic Report
Corporate Governance
Financial Statements
Other Information
Even when provided with authorisation, a Director
is not absolved from his or her statutory duty to
promote the success of the Company. If an actual
conflict arises post-authorisation, the Board may
choose to exclude the Director from receipt of
the relevant information and participation in the
debate, or suspend the Director from the Board,
or, as a last resort, require the Director to resign.
As at 31 December 2024, no Director of the
Company had any beneficial interest in the
shares of Hunting’s subsidiary companies.
Auditors
A resolution for the reappointment of Deloitte LLP
as auditor to the Company and a resolution
which gives the Audit and Risk Committee the
authority to determine the remuneration of the
auditor will be proposed at the 2025 AGM.
Statement of disclosure of information
to auditors
In accordance with the Companies Act 2006,
all Directors in office as at the date of this report
have confirmed, so far as they are aware, there
is no relevant audit information of which the
Group’s auditors are unaware and each Director
has taken all reasonable steps necessary in order
to make themselves aware of any relevant audit
information and to establish that the Group’s
auditors are aware of that information. This
confirmation should be interpreted in accordance
with the provisions of Section 418 of the
Companies Act 2006.
Share capital
Hunting PLC is a listed public company limited
by shares, with its Ordinary shares quoted on
the London Stock Exchange in the Equity Shares
Commercial Company category. The Company’s
issued share capital comprises a single class,
which is divided into 164,940,082 Ordinary
shares of 25 pence each.
All of the Company’s issued Ordinary shares
are fully paid up and rank equally in all respects.
Details of the issued share capital of the
Company and the number of shares held in
treasury as at 31 December 2024 can be found
in note 33 to the financial statements.
Subject to applicable statutes, shares may be
issued with such rights and restrictions as the
Company may, by ordinary resolution, decide,
or (if there is no such resolution or so far as it
does not make specific provision) as the Board
(as defined in the Articles) may decide.
Voting rights and restrictions on transfer
of shares
Holders of Ordinary shares are entitled to
receive dividends (when declared), receive the
Company’s Annual Report and Accounts, attend
and speak at general meetings of the Company,
and appoint proxies or exercise voting rights.
On a show of hands at a general meeting of the
Company, every holder of Ordinary shares present
in person or by proxy and entitled to vote has one
vote and, on a poll, every member present in
person or by proxy and entitled to vote has one
vote for every Ordinary share held. None of the
Ordinary shares carry any special rights with
regard to control of the Company.
Proxy appointments and voting instructions
must be received by the Company’s Registrars
no later than 48 hours before a general meeting.
A shareholder can lose their entitlement to vote
at a general meeting where that shareholder has
been served with a disclosure notice and has
failed to provide the Company with information
concerning interests in those shares.
Shareholders’ rights to transfer shares are
subject to the Articles of Association. Transfers
of uncertificated shares must be carried out
using CREST and the Directors can refuse to
register a transfer of an uncertificated share in
accordance with the regulations governing the
operation of CREST. The Directors may decide
to suspend the registration of transfers, for up
to 30 days a year, by closing the register of
shareholders. The Directors cannot suspend
the registration of transfers of any uncertificated
shares without obtaining consent from CREST.
There are no restrictions on the transfer of
Ordinary shares in the Company other than:
• Certain restrictions that may, from time to time,
be imposed by laws and regulations, for
example insider trading laws;
• Pursuant to the Company’s share dealing code
whereby the Directors and certain employees
of the Company require approval to deal in
the Company’s shares; and
• Where a shareholder with at least a 0.25%
interest in the Company’s certificated shares
has been served with a disclosure notice
and has failed to provide the Company
with information concerning interests
in those shares.
Interests in voting rights
Other than as stated in the table on page 169,
the Company is not aware of any further
agreements between shareholders that may
result in restrictions on the transfer of Ordinary
shares or on voting rights.
Market capitalisation
The market capitalisation of the Company at
31 December 2024 was £0.5bn (2023 – £0.5bn).
Share price
2024
p
2023
p
At 1 January
295.5
333.0
At 31 December
289.0
295.5
High during the year
459.0
351.5
Low during the year
274.0
197.4
Dividends
The Company normally pays dividends
semi-annually. Details of the Company’s dividend
policy is set out on page 11.
The Company paid the 2023 Final Dividend
of 5.0 cents per share on 10 May 2024, which
absorbed $8.0m of cash. At the Group’s 2024
Half Year Results, the Board declared an Interim
Dividend of 5.5 cents per share, which was paid
to shareholders on 25 October 2024, and
absorbed $8.7m of cash. The Board is
recommending a Final Dividend for 2024 of
6.0 cents per share, to be paid to shareholders
on 9 May 2025, subject to approval by
shareholders at the Company’s 2025 AGM.
Employee Benefit Trust
The Group operates an Employee Benefit
Trust (the “Trust”) as a vehicle to satisfy share
options and awards granted to employees
who participate in the Company’s share-based
incentive schemes. At 31 December 2024,
the Trust held 7,191,845 Ordinary shares in
the Company (2023 – 6,591,918). The Trust
has a policy to purchase shares in the market
or subscribe for new shares to partially meet the
future requirements of these incentive schemes.
The Trust has waived all dividends payable
by the Company and voting rights in respect
of the Ordinary shares held by it.
Directors’ Report
continued
Hunting PLC
Annual Report and Accounts 2024
168
Strategic Report
Corporate Governance
Financial Statements
Other Information
Major shareholders
The Company’s major shareholders, as at 31 December 2024, are listed in the table below.
Notes
Number of
Ordinary shares
% of ISC
Abrdn
14,540,689
8.82
Schroder Investment Management
13,377,973
8.11
BlackRock
1
12,475,269
7.56
Franklin Templeton
11,697,897
7.09
Hunting Investments Limited
2/3/4
11,003,487
6.67
Hunting Employee Benefit Trust
5
7,191,845
4.36
Slaley Investments Limited
4
6,424,591
3.89
Dimensional Fund Advisors
5,459,505
3.31
David R L Hunting
2/3/4/6/7
194,120
0.12
– as trustee
3,157,750
1.91
– other beneficial
1,875,950
1.14
James Trafford – as trustee
5,175,966
3.14
Orbis Investment Management
5,170,596
3.13
1.
On 28 January 2025, BlackRock notified the Company that their shareholding had reduced to 6.16% of the issued share capital.
Further, on 5 March 2025, BlackRock confirmed that its shareholding had reduced to below 5% of the issued share capital.
2.
Included in this holding are 9,437,743 Ordinary shares held by Huntridge Limited, a wholly-owned subsidiary of Hunting Investments
Limited. Neither of these companies is owned by Hunting PLC either directly or indirectly.
3. David RL Hunting is a director of Hunting Investments Limited.
4.
In 2014, Hunting Investments Limited, Slaley Investments Limited, certain Hunting family members, including Richard H Hunting and David
RL Hunting and the Hunting family trusts, to which James Trafford is a trustee (together known as “the Hunting Family Interests”), entered
into a voting agreement. The voting agreement has the legal effect of transferring all voting rights of Hunting PLC Ordinary shares held by
the Hunting Family Interests to a voting committee. The beneficial ownership of Hunting PLC Ordinary shares remains as per the table
shown above. At 6 March 2025, the Hunting Family Interests, party to the agreement, totalled 24,135,770 Ordinary shares in the Company,
representing 14.6% of the total voting rights.
5.
The Company has an agreement with the Employee Benefit Trust (“EBT”), whereby the EBT purchases Hunting shares on a monthly basis,
and since 31 December 2024 has purchased 562,745 shares.
6. After elimination of duplicate holdings, the total Hunting family trustee interests shown above amount to 5,175,966 Ordinary shares.
7.
David RL Hunting and his children are or could become beneficiaries under the relevant family trusts of which Mr Hunting is also a trustee.
Payments to governments
In accordance with the UK’s Disclosure and
Guidance Transparency Rule 4.3A, Hunting PLC
is required to report annually on payments made
to governments with respect to its oil and gas
activities. Hunting’s report on “Payments to
Governments” for the year ended 31 December
2023 was published on 19 April 2024. Following
the disposal of the Company’s exploration and
production assets, which were held by Hunting’s
wholly owned subsidiary Tenkay Resources, Inc.
in 2024, the Group did not make any material
payments to governments and Payments to
Governments were below the threshold required
by the legislation.
Research and development
Group subsidiaries undertake, where appropriate,
research and development to meet particular
market and product needs. The Group’s research
and development costs in the year totalled $8.8m
(2023 – $6.9m), with the amount expensed in the
year totalling $6.6m (2023 – $4.7m).
Companies Act 2006 Section 415
In compliance with section 415 of the Companies
Act 2006, the Directors present their report and
the audited financial statements of Hunting PLC
for the year ended 31 December 2024.
The Strategic Report incorporates the Hunting
2030 Strategy, Key Performance Indicators,
Company Chair’s Statement, Chief Executive’s
Review and Outlook, Market Summary,
Business Model and Strategy, Stakeholders
and Engagement protocols, Product Review,
Operating Segment Review, Group Financial
Review, ESG and Sustainability, and Risk
Management and is located on pages 2 to 112.
As permitted by legislation, the Board has
chosen to set out, within the Strategic Report
and Corporate Governance Report, some of the
matters required to be disclosed in the Directors’
Report, which it considers to be complementary
to communicating Hunting’s financial position
and performance, as follows:
• Changes in the Group and its interests
(pages 36, 37 and 38);
• Dividends (page 7);
• Future developments (page 39);
• Risk management, objectives and policies
(pages 102 to 109);
• Bribery and corruption
(pages 27 to 30, 77 and 78);
• Employment of disabled persons
(pages 28 and 80);
• Ethnicity and diversity (pages 28 and 80); and
• Greenhouse gas emissions and environmental
matters (pages 31, 73, and 82 to 101).
For further information, please see the
Shareholder and Statutory Information section
located on pages 264 and 265. The Company’s
Non-financial Information and Sustainability
Statement can be found on page 265.
The Companies (Miscellaneous Reporting)
Regulations 2018
As required by The Companies (Miscellaneous
Reporting) Regulations 2018 (the “Regulations”),
the Board of Hunting PLC has prepared a
Section 172(1) Statement, which can be found
on page 112 and also on the Group’s website
www.huntingplc.com.
The Directors’ Stakeholder Engagement and
Decision Making disclosures are summarised
within the Strategic Report on pages 25 to 32,
and include cross references to the various
engagement activities across the Group’s
operations. Additional disclosures in respect
of customers, suppliers and other key business
relationships can also be found within the
Strategic Report.
Approval of accounts
The 2024 Annual Report and Accounts were
approved by the Directors at their meeting on
Tuesday 4 March 2025.
By order of the Board
Ben Willey
Company Secretary
6 March 2025
Other information
Significant agreements
The Company is party to the Revolving Credit
Facility and Term Loan in which the counterparties
can determine whether or not to cancel the
agreements where there has been a change of
control of the Company. The service agreements
of the executive Directors include provisions for
compensation for loss of office or employment
as a result of a change of control.
Political contributions
It is the Group’s policy not to make political
donations. Accordingly, there were no political
donations made during the year (2023 – $nil).
Directors’ Report
continued
Hunting PLC
Annual Report and Accounts 2024
169
Strategic Report
Corporate Governance
Financial Statements
Other Information
Financial
Statements
Independent Auditor’s Report to
the Members of Hunting PLC
171
Consolidated Income Statement
184
Consolidated Statement of
Comprehensive Income
185
Consolidated Balance Sheet
186
Consolidated Statement of Changes
in Equity
187
Consolidated Statement of Cash Flows
189
Notes to the Consolidated Financial
Statements
190
Company Balance Sheet
246
Company Statement of Changes in Equity
247
Notes to the Company Financial Statements
248
Hunting PLC
Annual Report and Accounts 2024
170
Strategic Report
Other Information
Financial Statements
Corporate Governance
Independent Auditor’s Report to the Members of Hunting PLC
Report on the audit of the financial statements
1. Opinion
In our opinion:
• the financial statements of Hunting plc (the ‘parent Company’) and its subsidiaries (the ‘Group’)
give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at
31 December 2024 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with United Kingdom
adopted international accounting standards;
• the parent Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101
“Reduced Disclosure Framework”; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements which comprise:
• the consolidated income statement;
• the consolidated statement of comprehensive income;
• the consolidated and parent Company balance sheets;
• the consolidated and parent Company statements of changes in equity;
• the consolidated statement of cash flows; and
• the related notes 1 to 41 to the consolidated financial statements, and notes C1 to C15 to the parent
Company financial statements.
The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and United Kingdom adopted international accounting standards.
The financial reporting framework that has been applied in the preparation of the parent Company
financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the auditor’s
responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and the parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the Financial
Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit
services provided to the Group for the year are disclosed in note 6 to the financial statements.
We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical
Standard to the Group or the parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
• Impairment of goodwill and non-current assets of Titan’s group of cash
generating units (“CGU”);
• Revenue recognition on specific point in time and over time contracts; and
• Inventory provision valuation in Titan US and pressure control equipment
in US Manufacturing.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Materiality
The materiality that we used for the Group financial statements was $4.0 million
which was determined on the basis of profit before tax, adjusted for the
impairment of goodwill.
Scoping
The scope of our Group audit includes account balances of 20 reporting units
across six countries, including a number of head office entities. In aggregate
these account for 87% of the Group’s revenue and 85% of net assets.
Significant
changes in
our approach
As a result of the reduced performance and market outlook for Titan US,
goodwill associated with Titan has been written down by $109m, as noted
on page 55 of the strategic report. Due to the significance of the judgements
and estimates made in relation to the impairment assessment, we consider
the impairment of goodwill and non-current assets of the Titan group of
CGUs as a key audit matter.
In addition, the specific contracts to which our revenue recognition key
audit matter relates have been updated to reflect changes in the portfolio
of contracts this year.
We have changed the basis on which materiality is determined.
Refer to section 6 of this report.
Hunting PLC
Annual Report and Accounts 2024
171
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and parent Company’s ability to continue
to adopt the going concern basis of accounting included:
• Enquiries as to the process followed by management and obtained an understanding of the relevant
controls over the preparation of budgets and forecasts cover the foreseeable future, the
assumptions on which the assessment is based and management’s plans for future actions;
• Evaluating the cash flow forecasts that drive the going concern assessment, including the reliability
of the underlying data and challenging management on the assumptions applied by comparing to
external industry data where relevant and considering how these have been sensitised to determine
reasonable downside scenarios including the impact of the profit warning;
• Assessing the terms of the term loan and revolving credit facility and whether any amounts had
been drawn down in order to determine whether covenants in the agreement have been breached
and therefore could impact the going concern assessment; and
• Assessing the appropriateness of the disclosures in the financial statements, and whether these
were sufficiently detailed.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the Group’s and
parent Company’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the Directors’ statement in the
financial statements about whether the Directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Hunting PLC
Annual Report and Accounts 2024
172
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
5.1. Impairment of goodwill and non-current assets of Titan’s group of cash generating units (“CGU”)
Key audit matter description
The Group recognises goodwill of $45.1 million (2023: $154.4 million), which is tested annually for impairment. As outlined in Note 15, in 2024, the Group recognised
a net impairment for the Titan CGU of $81 million ($109 million reduction in goodwill, offset by deferred tax liability release of $28 million).
Testing goodwill for impairment requires determination of its recoverable amount, which involves judgement and key sources of estimation uncertainty that depend
on the forecast future financial performance of the CGU, future market performance, market share analysis and relevant terminal growth rates. As such, we identified
this as a key audit matter related to the potential risk of fraud.
In addition, this key audit matter relates to the sensitivity of the valuation refer to Note 15 on page 205 of the Annual Report to changes in:
• forecast revenue growth assumptions, particularly in FY25;
• forecast gross margin improvements;
• the long-term growth rate applied; and
• planned reductions in inventory levels over the forecast period.
Refer to the Key Sources of Estimation Uncertainty on page 190 in respect of the estimates of future cash flows. Refer to page 163 of the Audit and Risk Committee
Report and notes 1 and 15 to the financial statements.
How the scope of our
audit responded to the
key audit matter
We performed the following procedures to assess the impairment of goodwill and non-current assets of the Titan’s group of CGU:
• we obtained an understanding of relevant controls over the impairment assessment, including understanding management’s process and relevant controls
over forecasting future cash flows and determination of the key assumptions as detailed above;
• we challenged forecast revenue growth performance with reference to the recent and historical performance of Titan, market share analysis and a range
of industry outlook and competitor information;
• for forecast improvements in gross margins we engaged in dialogue with operational staff to understand changes being made to the production process;
• tested a sample of purchase orders that evidenced achieved reductions in component costs;
• challenged the ability for the business to reduce production variances based on recent and historical performance;
• in conjunction with our valuation specialists, we challenged the long-term growth rate assumption and discount rate with reference to market, industry
and economic data;
• challenged the planned reductions in inventory levels through operational discussions and analysis of past performance trends, and a detailed analysis
of the component parts of inventory and the relative improvements required;
• tested the integrity of management’s impairment model used to derive the recoverable amount;
• in assessing the total value in use (and therefore recoverable amount), we considered observable enterprise value (EV) and EBITDA multiples for comparable
listed groups, as well as a public offer made on a competitor during 2024 and considered how that compared to the value in use valuation;
• completed a search for potentially contradictory information by considering external, third party data and considered that in the context of the assumptions made.
Key observations
We are satisfied that the assumptions are reasonable and supportable based on available evidence, both internal and external. As such, we conclude the impairment
charge recognised for Titan is appropriate.
Hunting PLC
Annual Report and Accounts 2024
173
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
5.2. Revenue recognition on specific point in time and over time contracts
Key audit matter description
The revenue recognised by the Group in 2024 is $1,048.9 million (2023 – $929.1 million).
There is complexity involved in the application of the Group’s revenue recognition policy. This complexity arises most notably in those contracts where revenue
is recognised over time due to the judgement involved in estimating a contract’s costs to complete; and where revenue is recognised at a point in time, in the timing
of recognition including judgement relating to the transfer of control.
Our revenue recognition key audit matter specifically relates to:
• The application of IFRS 15 “Revenue from contracts with customers” in determining the appropriate basis for revenue recognition for the $231 million KOC contract
as disclosed on page 35. As outlined in the Group’s Critical Accounting Judgement on page 190 significant judgement was applied in relation to the timing of the
recognition of revenue for shipments made close to the year-end (where goods were at sea prior to the year end, yet shipping documents were provided post year
end). For this contract, having obtained legal advice over the transfer of title, the Group’s judgement was that control had not passed and therefore revenue was not
recognised in the current year; and
• Whether the Group had appropriately estimated the forecast costs to complete, including material costs, labour costs and outside services in their over time revenue
for three contracts in Spring.
Given the judgement taken around the timing of revenue recognition close to year-end and the estimates involved in forecasting the cost to complete on the three
contracts in Spring, this is considered a key audit matter related to the potential risk of fraud.
Refer to the Critical Accounting Judgement on page 190 in respect of the timing of revenue recognition at a point in time where significant judgement was applied.
(Refer to page 163 of the Audit and risk committee report and notes 3 and 40 to the financial statements).
Hunting PLC
Annual Report and Accounts 2024
174
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
How the scope of our
audit responded to the
key audit matter
We performed the following procedures to assess the revenue recognition on specific point in time and over time contracts.
Application of IFRS 15 to the KOC contract, including the timing of recognition of revenue for shipments made close to the year-end:
• obtained an understanding of the relevant controls over the revenue recognition process relating to the KOC contract, including the controls over the preparation
and review of management’s accounting paper, and the process for aligning revenue recognition with the transfer of control outlined in the contract;
• assessed the interpretation of terms in the related contract and analyses from management to determine whether the conclusions were appropriate
and in accordance with the requirements of IFRS 15;
• assessed management’s Critical Accounting Judgement in relation to the timing of recognising revenue by inspecting shipping documents and evaluating legal advice
taken by the Group to establish when legal title and the ability to direct the goods transferred to the customer; and
• for other shipments close to the year-end where revenue was recognised, we tested a sample of the shipments to the relevant shipping documents made available
and provided to the customer prior to the year-end.
Assessing the completeness and accuracy of forecast costs to complete:
• met with the project managers to understand progress on the projects and areas of risk or opportunity;
• assessed changes to the expected total contract costs relative to the prior year, and validated changes in the year to the trigger event and associated supporting
information (i.e. change orders or successful test events);
• on a sample basis, tested estimated cost line items and agreed them to supporting evidence, such as:
–
for estimated material costs, a committed purchase order or an equivalent purchase order incurred on a similar project;
–
for estimated labour hours, the relevant completed labour hours information from other similar projects; and
–
for outside services, the relevant equivalent costs incurred on other similar projects or services already incurred to date which will reoccur.
• Performed a stand back analysis of the overall cost to complete estimates and how they compare to our knowledge of the contracts and the other information
obtained through our testing.
Key observations
We are satisfied that revenue in relation to the KOC contract, including for the shipment that represents a Critical Accounting Judgement, has been recognised
appropriately and in accordance with IFRS 15 “Revenue from Contracts with Customers”.
The judgements and estimates taken in respect of estimated costs to complete, and the associated revenue recognised on the three contracts in Spring are appropriate.
A number of control findings were identified in respect of the timing of revenue recognised of the KOC contract which were reported to the Audit and Risk Committee,
which the Group is assessing for future remediation.
Hunting PLC
Annual Report and Accounts 2024
175
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
5.3. Inventory provision valuation in Titan US and pressure control equipment in US Manufacturing
Key audit matter description
The Group holds inventory of $302.8 million at 31 December 2024 (2023 – $328.4 million), net of a provision of $57.5 million (2023 – $52.5 million). The cyclical and
current trading environment and market conditions in the United States continue to expose the Group to the risk of over-valuation of aged inventory and therefore
it is key that the Group has an appropriate provisioning model.
We identified inventory provision valuation in Titan US and pressure control equipment in US Manufacturing as a key audit matter given the risk that certain inventory
lines held may remain technically relevant but demand in the marketplace may be low and therefore there could be excess inventory on hand that will never be sold
at or above its carrying amount.
The Directors’ judgement in assessing the valuation of inventory is primarily based on expectations of future sales, the forecast turn period and inventory utilisation plans,
combined with their consideration of historical sales and their assessment of the continued technological relevance of the Group’s products. Given the level of inherent
judgement that is applied to the determination of the provision, it is considered to be a key audit matter related to the potential risk of fraud.
Refer to page 163 of the Audit and risk committee report and notes 1, 20 and 40 to the financial statements for disclosures relating to the Directors’ critical judgements
and key assumptions, inventory and principal accounting policies respectively.
How the scope of our
audit responded to the
key audit matter
We performed the following procedures to assess the valuation of management’s inventory provision valuation in Titan US and pressure control equipment
in US Manufacturing:
• obtained an understanding of relevant controls over the inventory valuation process, including how management estimate their inventory reserves;
• assessed the mechanical accuracy of the inventory provisioning models and detailed analysis prepared by management, to determine whether the Group’s
provisioning policy has been applied appropriately and whether the approach taken appropriately reflect current market conditions;
• challenged key assumptions in the model such as the historical sales period used to drive expected forward turns, the forecast turn period applied and any additional
uplifts or decreases factored in by management to adjust historical sales run rates to better reflect future trading expectations. This included consideration of
historically achieved revenue levels, any significant changes in business structure or markets, inventory utilisation plans, third-party industry forecasts, production
capacity levels and current revenue run rates to demonstrate whether the inferred future revenue levels are reasonable;
• evaluated management’s comparison of forecast sales against relevant third-party forecasts as a stand-back assessment on the future utilisation of current inventory
levels;
• evaluated the data provided by management, including current sales transactions, used to determine an appropriate net realisable value to assess whether inventory
is being held at an appropriate amount. We also made direct enquiries of sales and operational personnel; and
• assessed the disclosure relating to inventory.
Key observations
We are satisfied that the judgements taken by the Directors in relation to inventory valuation are appropriate in light of current market conditions. As such, we conclude
the inventory provision is appropriate.
Hunting PLC
Annual Report and Accounts 2024
176
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes
it probable that the economic decisions of a reasonably knowledgeable person would be changed
or influenced. We use materiality both in planning the scope of our audit work and in evaluating
the results of our work.
Based on our professional judgement, we determined materiality for the financial statements
as a whole as follows:
Group
financial statements
Parent Company
financial statements
Materiality
$4.0 million (2023: $4.5 million).
$3.6 million (2023: $4.1 million).
Basis for
determining
materiality
5.3% of profit before tax, adjusted
for the impairment of goodwill
(Refer to note 15).
In the prior year, 0.5% of revenue
was used as our primary
benchmark. Current year materiality
represents 0.4% of revenue.
Parent Company materiality
determined based on 0.5% of net
assets (2023: 0.4% of net asset),
which is capped at 90% of
Group materiality.
Rationale for the
benchmark applied
We changed the basis for
determining materiality given the
improvement in and stabilisation of
underlying operations. A profit-based
measure is therefore the key metric
for users of the financial statements.
We adjusted profit before tax for
the impairment of goodwill as this is
not part of the underlying business
operations and is a non-recurring
item. The users of the financial
statements now consider this to
be their key metric. This represents
a change from prior years where
revenue was the key metric.
Given that the parent Company’s
balance sheet is mostly made up
of investments and intercompany
receivables, we consider net assets
to be the most relevant benchmark.
$4.0m
Group materiality
$4.0m
Component
materiality range
$1.2m to $2.4m
Audit Committee
reporting threshold
$0.20m
Profit before tax excluding goodwill impairment $76m
Group materiality
Hunting PLC
Annual Report and Accounts 2024
177
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that,
in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial
statements as a whole.
Group
financial statements
Parent Company
financial statements
Performance
materiality
67.5% (2023: 70%)
of Group materiality
67.5% (2023: 70%)
of parent Company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered the following
factors:
• our knowledge obtained from the prior year audit;
• the level of corrected and uncorrected misstatements identified
in the prior years; and
• the reliability of the entity’s controls over financial reporting and the
control findings identified in the year, including the prior year control
deficiencies identified which continued to impact the current year.
6.3. Error reporting threshold
We agreed with the Audit and Risk committee that we would report to the Committee all audit
differences in excess of $200,000 (2023: $225,000), as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds. We also report to the Audit and Risk
committee on disclosure matters that we identified when assessing the overall presentation
of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
The Group has 57 (2023: 56) reporting units and the financial statements reflect a consolidation of
entities covering centralised functions, operating units and non-trading legal entities. The reporting units
of the Group are diverse and operate across a number of geographies. The reporting units do not share
service centres and controls are designed and implemented at each reporting unit independently.
The parent Company is located in London and audited directly by the Group audit team.
Our scoping consisted of performing a risk-based approach considering both quantitative and
qualitative factors to obtain sufficient appropriate audit evidence to address the risk of material
misstatement over the Group financial statements. Our audit work covered Group operations in six
(2023: five) countries, covering 20 (2023: 18) reporting units, including a number of head office entities.
Six (2023: three) reporting units were audited by the Group engagement team, and included overseas
reporting units in the Netherlands and Canada. The other 14 (2023: 15) were audited by respective
Deloitte component audit teams in the US, the UK, Singapore and China.
For the 20 reporting units, procedures on one or more classes of transactions, account balances
or disclosures were performed. Together, they represent 87% (2023: 79%) of revenue, and 85%
(2023: 79%) of net assets. Our audit work at the 20 reporting units were executed at levels of
performance materiality applicable to each reporting unit which were lower than Group performance
materiality and ranged from $1.2m to $2.4m (2023: $1.6m to $4.1m). The remaining reporting units
were subject to analytical procedures by the Group engagement team. Further, specific audit
procedures over the central functions and areas of significant judgement including taxation, treasury
and goodwill and non-current asset impairment were performed by the Group audit team centrally.
In 2024, Hunting BV (The Netherlands) reporting unit was brought into scope for audit procedures over
certain account balances. As outlined in Audit and Risk Committee report on page 163, during the year
errors were found by management in inventory, such that an adjustment to inventory of $4.2 million
has been recorded through the current year. As a result, the Group engagement team revised their
risk assessment and increased the extent of audit work beyond what was initially planned.
87%
13%
85%
15%
Revenue
Specified audit procedures
Review at Group level
Net assets
Specified audit procedures
Review at Group level
Hunting PLC
Annual Report and Accounts 2024
178
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
7.2. Our consideration of the control environment
We identified the main Enterprise Resource Planning (“ERP”) system (“D365”) and the consolidation
tool (“Cognos”) as the key IT systems relevant to our audit. We have involved our IT specialists to
obtain an understanding of the associated general IT controls (“GITCs”) for D365 and Cognos.
The Group continues to invest in its IT systems and there is a proactive programme of remediating any
control findings where they are identified. During the current year the Group has been implementing its
plan to remediate control findings identified in the prior year in relation to workflow approvals within D365,
which has impacted a number of reporting units. Where the remediation activity remained ongoing
during the current year, or the remediated controls were not in place for a sufficient enough period
prior to the year-end, we did not seek to place reliance on the GITCs for D365 at those reporting units.
A number of control findings were identified in relation to the GITCs over Cognos this year which are
planned to be remediated in the coming year.
Where reporting units migrated from their legacy ERP system to D365 during the year, we assessed
certain implementation controls over the data conversion and the data migration. This included GITCs
and manual controls. This principally related to reporting units in the UK, Europe and Middle East.
Where we were able to rely on relevant GITCs and automated controls within D365, controls
were tested in support of our control reliance approach across the revenue processes within certain
reporting units (Titan US, US Connections and Dearborn). For certain other reporting units we were
unable to adopt a controls reliance approach to revenue in the current year due to the existence
of manual revenue control deficiencies.
Across the Group, we also obtained an understanding of relevant manual controls within the financial
reporting processes, controls relevant to our significant risks, and any other controls we deemed
relevant. Whilst there are reporting units where we are able to rely on controls, there are a number
of reporting units where a number of control findings were identified which require remediation.
As discussed in the Audit and Risk Committee report on page 163, significant control weaknesses
were identified in the Hunting BV business unit in the Netherlands, relating to the existence of
inventory. We did not place reliance on any manual controls at that reporting unit and we modified the
nature, timing and extent of our audit procedures over inventory existence and increased the extent
of audit work in the other account balances in the reporting unit as described in section 7.1 above.
As acknowledged in the Audit and Risk Committee report on page 163 an overall review of the
Group’s internal control environment is underway both as a result of the changes to the UK Corporate
Governance code and due to the control deficiencies identified in the year.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s
business and its financial statement. The Group continues to develop its assessment of the potential
impacts of climate change with specific transitional and physical climate related risks identified in the
Strategic Report on pages 92 to 96.
As a part of our audit we obtained management’s climate-related risk assessment and held
discussions with management to understand the process of identifying climate-related risks,
the determination of mitigating actions and the impact on the Group’s financial statements.
As explained in note 1 on page 190, the Directors’ view is that the external long-term forecasts used
in preparing their forecasts incorporate climate change developments, supporting the view that there
will be a robust demand for the Group’s oil and gas products over the short and medium term.
Estimates made using these forecasts do not currently identify any concerns regarding the carrying
values or expected lives of longer-lived assets.
We performed our own qualitative risk assessment of the potential impact of climate change on
the Group’s account balances and classes of transaction and did not identify any reasonably possible
risks of material misstatement. Our procedures were performed with the involvement of our climate
change specialists and included evaluating whether appropriate climate-related disclosures have been
made in the financial statements and reading disclosures included in the Strategic Report to consider
whether they are materially consistent with the financial statements and our knowledge obtained
in the audit.
Hunting PLC
Annual Report and Accounts 2024
179
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
7.4 Working with other auditors
We directed and supervised our component audit teams through regular discussions and interactions
during the planning phase of our audit and throughout the year end process. The lead audit partner
visited our component teams in the US, Singapore and China during the year. Other senior members
of the audit team visited our component team in the UK.
We performed a detailed review of their work over areas including key judgements and significant
and higher risks, using technology to access component auditors’ working papers remotely, where
relevant. Underlying audit working papers were all prepared in English, except in China where we
utilised Mandarin-speaking Deloitte UK resources to review the underlying work.
8. Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The Directors are responsible for the other information
contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view,
and for such internal control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and
the parent Company’s ability to continue as a going concern, disclosing as applicable, matters related
to going concern and using the going concern basis of accounting unless the Directors either intend
to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative
but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located
on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
Hunting PLC
Annual Report and Accounts 2024
180
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
11. Extent to which the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the
design of the Group’s remuneration policies, key drivers for Directors’ remuneration, bonus levels
and performance targets;
• results of our enquiries of management, internal audit, the Directors and the audit and risk
committee about their own identification and assessment of the risks of irregularities, including
those that are specific to the Group’s sector;
• any matters we identified having obtained and reviewed the Group’s documentation of their policies
and procedures relating to:
–
identifying, evaluating and complying with laws and regulations and whether they were aware
of any instances of non-compliance, including the incorrect treatment of import taxes resulting
in a prior year adjustment of $9.1m as disclosed in note 41 of the financial statements.
–
detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud.
–
the internal controls established to mitigate risks of fraud or non-compliance with laws and
regulations, including the Group’s whistleblowing procedures.
• the matters discussed among the audit engagement team including component audit teams and
relevant internal specialists, including tax, valuations, IT, fraud and industry specialists regarding
how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within
the organisation for fraud and identified the greatest potential for fraud in the following areas: revenue
recognition in relation to forecast cost to complete on over time contracts and sales made close to
period end for point in time contracts; inventory provision valuation and impairment as it relates to the
Titan cash-generating units. In common with all audits under ISAs (UK), we are also required to
perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates
in, focusing on provisions of those laws and regulations that had a direct effect on the determination
of material amounts and disclosures in the financial statements. The key laws and regulations we
considered in this context included the UK Companies Act, UK Listing Rules, pensions legislation
and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect
on the financial statements but compliance with which may be fundamental to the Group’s ability to
operate or to avoid a material penalty. These included employment legislation, health, safety and the
environment (“HSE”) regulations, international trading laws, patent law and environmental regulations.
Hunting PLC
Annual Report and Accounts 2024
181
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
11.2. Audit response to risks identified
As a result of performing the above, we identified impairment of goodwill and non-current assets
of Titan’s group of CGUs, revenue recognition on specific point in time and over time contracts and
inventory provision valuation in Titan US as key audit matters related to the potential risks of fraud.
The key audit matters section of our report explains the matters in more detail and also describes
the specific procedures we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect
on the financial statements;
• enquiring of management and the audit and risk committee concerning actual and potential
litigation and claims and worked with our tax specialists to review and challenge management’s
determination of the prior year import duties adjustment of $9.1 million. We obtained the external
data received by management from the relevant authority and assessed, on a sample basis,
the completeness and accuracy of management’s calculation of the provision applying our
understanding of the legislative requirements and likely outcome of the assessment;
• performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports
and reviewing correspondence with HMRC; and
• in addressing the risk of fraud through management override of controls, testing the
appropriateness of journal entries and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members including internal specialists and component audit teams, and remained
alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared
in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and their
environment obtained in the course of the audit, we have not identified any material misstatements
in the strategic report or the Directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-
term viability and that part of the Corporate Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial statements
and our knowledge obtained during the audit:
• the Directors’ statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on page 111;
• the Directors’ explanation as to its assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 110;
• the Directors’ statement on fair, balanced and understandable set out on page 167;
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 102 to 110;
• the section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 166; and
• the section describing the work of the audit and risk committee set out on page 162.
Hunting PLC
Annual Report and Accounts 2024
182
Strategic Report
Corporate Governance
Financial Statements
Other Information
Independent Auditor’s Report to the Members of Hunting PLC
continued
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the parent Company financial statements are not in agreement with the accounting records
and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures
of Directors’ remuneration have not been made or the part of the Directors’ remuneration report
to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit and Risk committee, we were appointed by the Directors
on 17 April 2019 to audit the financial statements for the year ending 31 December 2019 and
subsequent financial periods. The period of total uninterrupted engagement including previous
renewals and reappointments of the firm is six years, covering the years ending 31 December 2019
to 31 December 2024.
15.2. Consistency of the audit report with the additional report to the audit and risk committee
Our audit opinion is consistent with the additional report to the Audit and Risk Committee we are
required to provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state
to the Company’s members those matters we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule
(DTR) 4.1.15R – DTR 4.1.18R, these financial statements will form part of the Electronic Format Annual
Financial Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R
– DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format Annual
Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R. We have been
engaged to provide assurance on whether the Electronic Format Annual Financial Report has been
prepared in compliance with DTR 4.1.15R – DTR 4.1.18R and will publicly report separately to the
members on this.
Thomas Murray, ACA
(Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
6 March 2025
Hunting PLC
Annual Report and Accounts 2024
183
Strategic Report
Corporate Governance
Financial Statements
Other Information
Consolidated Income Statement
For the year ended 31 December
Notes
2024
$m
Restated
i
2023
$m
Revenue
3
Cost of sales
(777.0 )
(701.4 )
Gross profit
Selling and distribution costs
(53.5 )
(49.3 )
Administrative expenses
(127.9 )
(128.7 )
Net operating income and other expenses
4
(2.4 )
Share of associates’ and joint venture’s results
16
(0.1 )
(0.6 )
Impairment of goodwill
15
(109.1 )
Operating (loss)/profit
6
(21.1 )
Finance income
8
Finance expense
8
(15.6 )
(11.3 )
(Loss)/profit before tax
(33.5 )
Taxation
9
(Loss)/profit for the year
(25.5 )
Attributable to:
Owners of the parent
(28.0 )
Non-controlling interests
(25.5 )
cents
cents
(Loss)/earnings per share
Basic
10
(17.6 )
Diluted
10
(17.6 )
i.
Comparative balances have been restated, see note 1.
The notes on pages 190 to 245 are an integral part of these consolidated financial statements.
Hunting PLC
Annual Report and Accounts 2024
184
Strategic Report
Corporate Governance
Financial Statements
Other Information
Consolidated Statement of Comprehensive Income
For the year ended 31 December
Notes
2024
$m
Restated
i
2023
$m
(Loss)/profit for the year
(25.5 )
Other comprehensive (expense)/income, after tax:
Items that may subsequently be reclassified to profit or loss:
Exchange adjustments
(4.3 )
Fair value losses arising on cash flow hedges during the year
(0.7 )
(0.3 )
Fair value gains arising on cash flow hedges reclassified to profit or loss
(0.1 )
(0.2 )
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit pension schemes
32,35
(0.1 )
Other comprehensive (expense)/income, after tax
(5.2 )
Total comprehensive (expense)/income for the year
(30.7 )
Attributable to:
Owners of the parent
(32.9 )
Non-controlling interests
(30.7 )
i.
Comparative balances have been restated, see note 1.
Total comprehensive (expense)/income attributable to owners of the parent arises from the Group’s continuing operations.
Hunting PLC
Annual Report and Accounts 2024
185
Strategic Report
Corporate Governance
Financial Statements
Other Information
Notes
2024
$m
Restated
i
2023
$m
ASSETS
Non-current assets
Property, plant and equipment
11
Right-of-use assets
12
Goodwill
13
Other intangible assets
14
Investments in associates and joint ventures
16
Investments
17
Trade, contract and other receivables
18
Deferred tax assets
19
Current assets
Inventories
20
Trade, contract and other receivables
18
Cash and cash equivalents
21
Current tax assets
Assets held for sale
16
Consolidated Balance Sheet
At 31 December
Notes
2024
$m
Restated
i
2023
$m
LIABILITIES
Current liabilities
Trade, contract and other payables
22
(208.5 )
(163.4 )
Lease liabilities
24
(7.4 )
(8.0 )
Borrowings
25
(11.3 )
(46.3 )
Provisions
27
(12.6 )
(13.9 )
Current tax liabilities
(9.0 )
(3.3 )
(248.8 )
(234.9 )
Net current assets
Non-current liabilities
Trade, contract and other payables
22
(5.5 )
(3.7 )
Lease liabilities
24
(22.7 )
(20.7 )
Borrowings
25
(94.5 )
(3.9 )
Provisions
27
(1.7 )
(2.7 )
Deferred tax liabilities
19
(3.7 )
(8.4 )
(128.1 )
(39.4 )
Net assets
Equity attributable to owners of the parent
Share capital
33
Share premium
33
Other components of equity
34
Retained earnings
35
Total attributable to owners of the parent
Non-controlling interests
Total equity
i.
Comparative balances have been restated, see note 1.
The notes on pages 190 to 245 are an integral part of these consolidated financial statements. The
financial statements on pages 184 to 245 were approved by the Board of Directors on 6 March 2025
and were signed on its behalf by:
Jim Johnson
Bruce Ferguson
Director
Registered number: 00974568
Hunting PLC
Annual Report and Accounts 2024
186
Strategic Report
Corporate Governance
Financial Statements
Other Information
Year ended 31 December 2024
Notes
Share
capital
$m
Share
premium
$m
Other
components
of equity
ii
$m
Retained
earnings
$m
Total
attributable
to owners of
the parent
$m
Non-
controlling
interests
$m
Total
equity
$m
At 1 January 2024, restated
i
(Loss)/profit for the year
(28.0 )
(28.0 )
(25.5 )
Other comprehensive expense
(4.8 )
(0.1 )
(4.9 )
(0.3 )
(5.2 )
Total comprehensive (expense)/income
(4.8 )
(28.1 )
(32.9 )
(30.7 )
Transfer of cash flow hedging gains to the initial carrying value of hedged items
(0.2 )
(0.2 )
(0.2 )
Dividends paid to Hunting PLC shareholders
36
(16.7 )
(16.7 )
(16.7 )
Treasury shares:
– purchase of treasury shares
35
(14.2 )
(14.2 )
(14.2 )
– disposal of treasury shares
Share options and awards:
– value of employee services
– discharge
(9.6 )
(0.6 )
(0.6 )
– taxation
At 31 December 2024
Consolidated Statement of Changes in Equity
For the year ended 31 December
Hunting PLC
Annual Report and Accounts 2024
187
Strategic Report
Corporate Governance
Financial Statements
Other Information
Restated
i
Year ended 31 December 2023
Notes
Share
capital
$m
Share
premium
$m
Other
components
of equity
ii
$m
Retained
earnings
$m
Total
attributable
to owners of
the parent
$m
Non-
controlling
interests
$m
Total
equity
$m
At 1 January 2023
Profit for the year
Other comprehensive income/(expense)
(0.2 )
Total comprehensive income
Transfer of cash flow hedging losses to the initial carrying value of hedged items
Dividends paid to Hunting PLC shareholders
36
(15.0 )
(15.0 )
(15.0 )
Treasury shares:
– purchase of treasury shares
35
(9.0 )
(9.0 )
(9.0 )
– disposal of treasury shares
Share options and awards:
– value of employee services
– discharge
(8.3 )
(0.4 )
(0.4 )
– taxation
Transfer between reserves
(14.5 )
At 31 December 2023
i.
Comparative balances have been restated, see note 1.
ii.
An analysis of other components of equity is provided in note 34.
Consolidated Statement of Changes in Equity
continued
Hunting PLC
Annual Report and Accounts 2024
188
Strategic Report
Corporate Governance
Financial Statements
Other Information
Consolidated Statement of Cash Flows
For the year ended 31 December
Notes
2024
$m
Restated
i
2023
$m
Operating activities
Operating (loss)/profit
(21.1 )
Adjusting items (NGM A)
Depreciation, amortisation and impairment (NGM C)
EBITDA (NGM C)
Share-based payment expense
37
Decrease/(increase) in inventories
(56.7 )
Increase in receivables
(11.4 )
(19.2 )
Increase in payables
(Decrease)/increase in provisions
(2.0 )
Net taxation paid
(3.5 )
(9.1 )
Net gain on disposal of property, plant and equipment
(0.9 )
(1.7 )
Proceeds from disposal of property, plant and equipment
held for rental
Purchase of property, plant and equipment
held for rental (NGM N)
(1.7 )
(0.6 )
Share of associates’ and joint venture’s results
Payment of US pension scheme liabilities
32
(0.2 )
Other non-cash items
(1.3 )
Net cash inflow from operating activities
Investing activities
Interest received
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investments
Dividend received from associates
16
Investment in associates and joint ventures
16
(0.9 )
(1.6 )
Purchase of property, plant and equipment (NGM N)
(23.6 )
(23.1 )
Purchase of intangible assets
(4.8 )
(10.9 )
Net cash outflow from investing activities
(25.5 )
(32.4 )
Notes
2024
$m
Restated
i
2023
$m
Financing activities
Interest and bank fees paid
(15.3 )
(8.0 )
Payment of lease liabilities, principal and interest
(8.9 )
(10.4 )
Increase in bank borrowings
Repayments of bank borrowings
(44.5 )
Dividends paid to Hunting PLC shareholders
36
(16.7 )
(15.0 )
Purchase of treasury shares
35
(14.2 )
(9.0 )
Proceeds on disposal of treasury shares
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rates
(2.7 )
(0.1 )
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of the year comprise:
Cash and cash equivalents included in current assets
21
Bank overdrafts included in borrowings
25
(1.5 )
(1.4 )
i.
Comparative balances have been restated, see note 1.
Hunting PLC
Annual Report and Accounts 2024
189
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting PLC
190
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
Shares in Commercial Companies (ESCC) category. Hunting PLC was incorporated in the United Kingdom
under the Companies Act and is registered in England and Wales. The address of the Company’s
registered office is 30 Panton Street, London, SW1Y 4AJ , United Kingdom. The principal activities of the
referred to as the “Group”), including the Group’s interests in associates and joint ventures and are
adopted international accounting standards and in conformity with the requirements of the Companies
cost convention as modified by the revaluation of the US deferred compensation plan and those
financial assets and financial liabilities held at fair value (note 29). The Board’s consideration of the
The material accounting policies applied in the preparation of these financial statements are set out
in note 40. These policies have been consistently applied to all the years presented.
Critical accounting judgements are those that the Directors have made in the process of applying the
Group’s accounting policies and that have the most significant effect on the amounts recognised in
the Group’s financial statements. Key estimates are those concerning future expectations and other
key sources of estimation uncertainty at the end of the reporting period, that may have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year. Critical accounting judgements were made in the following areas:
• In determining the point in time at which control is transferred to customers and revenue is
recognised, as described in note 40. In the majority of Hunting’s contracts this is straightforward.
However, the determination can become more complex in contracts where goods are shipped
and confirming shipping documentation, indicating transfer of legal title and an ability to direct the
goods, can take a short period of time to be produced and provided to the customer, which can
be after the ship has departed port and the transfer of risk has occurred. In applying the Group’s
revenue recognition policy, in these instances, the Group’s judgement is to recognise revenue at the
point in time when the confirming shipping documentation is provided to the customer which could
potentially be in a different accounting period to when the goods are loaded onto the ship and risk
transfers, in accordance with incoterms. At 31 December 2024, there was a shipment at sea
containing goods with a revenue value of c.$32m. Risk had transferred to the customer per the
stated incoterms; however, the confirming shipping documentation had not been produced and,
therefore, the Group still had the ability to direct the goods. Management considered the different
indicators of control in accordance with IFRS 15 and concluded that Hunting retained control
of the goods at 31 December 2024 and, therefore, revenue was recognised in 2025;
• In determining if the contractual terms for various significant Subsea contracts met the requirements
for over time revenue recognition, as described in note 40; and
• In considering whether the conditions were appropriate to recognise deferred tax assets
(see note 9).
The key estimates used in the preparation of the accounts were:
• The estimates of future cash flows in the budget and extended forecasts considered in the
impairment test for cash generating units and the recoverable amounts (see note 15); and
• Estimates of future turn rates by inventory line item in determining inventory provisions (see note 20).
The Directors believe that there are no other critical accounting judgements or key estimates applied
New and Amended Standards adopted by the Group
There are no new standards that came into effect for the current financial year. A number of amended
standards became effective for the financial year beginning on 1 January 2024, however, the Group
did not have to change its accounting policies or make retrospective adjustments as a result of
adopting these amendments.
Future Standards, Amendments and Interpretations
The following standards, amendments and interpretations are effective subsequent to the year-end,
and have not been early adopted. The Directors do not expect that the adoption of the standards
and amendments listed below will have a material impact on the financial statements of the Group
in future periods, except for IFRS 18, which the Group is assessing.
• IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
i
• IFRS S2 Climate-related Disclosures
i
• IFRS 18 Presentation and Disclosures in Financial Statements
i
• IFRS 19 Subsidiaries without Public Accountability: Disclosures
i
• Amendments to IAS 21: Lack of Exchangeability
ii
• Amendments to SASB standards to enhance their international applicability
i
• Amendments to IFRS 9 and IFRS 7 regarding the classification and measurement of financial
instruments
i
• Annual Improvements to IFRS Accounting Standards – Volume 11
i
i.
Not yet endorsed by the UK as at the date of authorisation of the financial statements.
ii.
Mandatory adoption date and effective date for the Company is 1 January 2025.
Hunting PLC
191
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
1. Basis of Preparation
continued
Climate Change
The impact of climate change is presented in the Strategic Report on pages 88 to 101.
The Directors have considered the potential impact that climate change could have on the financial
statements of the Group and recognise that climate change is a principal risk that the Group will
monitor and react to appropriately. In the judgement of the Directors, the external mid- and long-term
forecasts used by the Company incorporate climate change developments, and support the view that
there will be robust demand for the Group’s oil- and gas-based products for a significant time span.
The Group utilises mid-term forecasts to consider whether there are any concerns regarding the
carrying values or expected lives of longer-lived assets, including goodwill. Climate-related risks are
not expected to have a significant adverse impact on the Group’s revenue or EBITDA in the medium-
term. The Directors also believe there is significant operational adaptability in the Group’s asset base
to move into other non-hydrocarbon product lines, if required.
Prior Period Restatements
(a) Import Tax Provision
In July 2024, as part of an internal review, an EMEA business unit was identified as not following
the tax authority’s interpretation of the correct process for importing goods, under specific contracts,
in their jurisdiction and thus had not paid amounts which would have been due based on the tax
authority’s guidance in place at the time. The business is working with the tax authority to regularise
the position. While no incremental profit or cash flow was recognised, resolution is dependent upon
discretion by the authority, and therefore an exposure exists. A provision of $9.5m was recognised
at 30 June 2024, which represented the Group’s best estimate of the potential liability at that date.
The carrying value of the provision at 31 December 2024 reduced to $8.6m following ongoing dialogue
with the tax authority and a review of the assumptions. This amount is expected to be settled within
12 months.
The provision contains uncertainties with respect to the amount of the liability, including whether there
are any mitigations available, relief that can be utilised or penalties which may be incurred. The Group
has reviewed all the periods which could potentially be impacted and evaluated its controls such that
no further exposure existed after 30 June 2024.
Of the total provision, an amount totalling $9.1m related to 2023. As the information necessary
to identify this issue and make a provision existed in prior periods, and management considers the
impact to prior periods to be material to the Group, the 2023 financial statements and related notes
have been corrected by restating the respective financial statement line items in accordance with
IAS 8 (see note 41). There is no material impact to the opening position at 1 January 2023. The above
stated values are the amounts that would be recognised on the balance sheet as a provision at the
end of each period. The actual amounts charged to the income statement in each period differ due
to the impact of foreign exchange rate changes.
The corresponding expense has been included in administrative expenses within the income
statement as this presentation most appropriately reflects the nature of the adjustment.
Additionally, a deferred tax asset and related income statement tax credit were recognised in 2023
as management expects the expense to reduce future taxable income when the provision is released
or utilised. Due to their size and nature, the amounts relating to 2023 have been disclosed separately
as required by IAS 1 and have been presented as adjusting items (NGM A), as described in note 5.
Further information regarding the process relating to the recognition of deferred tax assets is included
in note 9.
On 1 January 2024, the Group changed its accounting policy to present its share of associates’
and joint venture’s results as part of operating profit and has represented the results for the year
ending 31 December 2023 on this basis, with operating profit and EBITDA decreasing by $0.6m.
With the mobilisation of the joint venture with Jindal SAW in the second half of 2023, the
reclassification reflects a more appropriate presentation of the share of associates’ and joint venture’s
results, aligning them with Hunting’s core operating business. The share of associates’ and joint
venture’s results arose in the North America operating segment ($0.4m loss) and the Asia Pacific
operating segment ($0.2m loss) in the year ending 31 December 2023. This reclassification had
no impact on the profit for the year, the net assets or cash and cash equivalents in 2023.
For the year ended 31 December 2024 , the Group has been reporting on five operating segments
in its internal management reports, which are used to make strategic decisions by the Hunting PLC
Board, the Group’s Chief Operating Decision Maker. The Hunting PLC Board examines the Group’s
performance mainly from a geographic perspective, based on the location of the operating activities,
as well as by product group, in order to understand the drivers of Group performance and trends.
Due to their size and/or nature of their operations, Hunting Titan and Subsea Technologies are
reported separately. There is no aggregation of operating segments.
The Board assesses the performance of the operating segments based on revenue and adjusted
operating results. Adjusted operating result is reported operating profit excluding adjusting items
(see NGM A).
Finance income and finance expense are not allocated to operating segments as this type of activity
is overseen by the Group’s central treasury function which manages the funding position of the Group.
Inter-segment sales are priced in line with the transfer pricing policy on an arm’s length basis and are
eliminated on consolidation. Costs and overheads are apportioned to the operating segments on the
basis of level of activity and time attributed to those operations by senior executives.
Accounting policies used for segmental reporting reflect those used for the Group. The domicile
Hunting PLC
192
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2. Segmental Reporting
continued
(a) Segment Revenue and Profit
| 2024 | ||||||
Total | Inter- | Total | Adjusted | Reported | ||
segment | segment | external | operating | Adjusting | operating | |
revenue | revenue | revenue | result | items i | result | |
$m | $m | $m | $m | $m | $m | |
Hunting Titan | 230.3 | (9.8) | 220.5 | (8.3) | (109.1) | (117.4) |
North America | 388.4 | (31.1) | 357.3 | 45.5 | – | 45.5 |
Subsea Technologies | 147.1 | – | 147.1 | 25.6 | – | 25.6 |
EMEA | 87.7 | (1.1) | 86.6 | (12.4) | – | (12.4) |
Asia Pacific | 240.6 | (3.2) | 237.4 | 37.6 | – | 37.6 |
Total | 1,094.1 | (45.2) | 1,048.9 | 88.0 | (109.1) | (21.1) |
Net finance expense | (12.4) | – | (12.4) | |||
Profit/(loss) before tax | 75.6 | (109.1) | (33.5) | |||
| Restated ii | ||||||
| 2023 | ||||||
Total | Inter- | Total | Adjusted | Reported | ||
segment | segment | external | operating | Adjusting | operating | |
revenue | revenue | revenue | result | items i | result | |
$m | $m | $m | $m | $m | $m | |
Hunting Titan | 259.2 | (9.0) | 250.2 | 12.7 | – | 12.7 |
North America | 374.7 | (35.4) | 339.3 | 33.7 | – | 33.7 |
Subsea Technologies | 98.6 | – | 98.6 | 8.0 | – | 8.0 |
EMEA | 88.2 | (1.5) | 86.7 | (2.3) | (8.9) | (11.2) |
Asia Pacific | 157.6 | (3.3) | 154.3 | 8.3 | – | 8.3 |
Total | 978.3 | (49.2) | 929.1 | 60.4 | (8.9) | 51.5 |
Net finance expense | (10.4) | – | (10.4) | |||
Profit before tax | 50.0 | (8.9) | 41.1 | |||
i.
Adjusting items are disclosed in note 5.
ii.
Comparative balances have been restated, see note 1.
Hunting PLC
193
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2. Segmental Reporting
continued
(a) Segment Revenue and Profit
continued
A breakdown of external revenue by products and services is presented below:
2024 | 2023 | |
$m | $m | |
Perforating Systems | 222.7 | 243.8 |
OCTG | 463.7 | 395.8 |
Advanced Manufacturing | 126.9 | 112.1 |
Subsea | 147.1 | 98.6 |
Other Manufacturing | 88.5 | 78.8 |
Total | 1,048.9 | 929.1 |
Revenue from products is further analysed between: | ||
Oil and gas | 973.8 | 853.2 |
Non-oil and gas | 75.1 | 75.9 |
Total | 1,048.9 | 929.1 |
(b) Other Segment Items
| 2024 | 2023 | |||||||
Impairment | Impairment | Impairment | Impairment | |||||
of non-current | of current | of non-current | of current | |||||
Depreciation i | Amortisation | assets ii | assets iii | Depreciation i | Amortisation | assets ii | assets iii | |
$m | $m | $m | $m | $m | $m | $m | $m | |
Hunting Titan | 7.2 | 1.7 | 109.1 | 2.6 | 7.5 | 1.7 | – | 2.9 |
North America | 15.7 | 1.0 | – | 3.4 | 17.9 | 2.0 | 0.2 | 1.6 |
Subsea Technologies | 2.3 | 2.1 | – | 0.4 | 2.4 | 1.9 | 1.4 | 0.2 |
EMEA | 3.9 | 0.6 | – | 2.0 | 3.4 | 0.6 | – | 0.3 |
Asia Pacific | 3.3 | 0.5 | – | 0.6 | 2.6 | 0.4 | – | 1.6 |
Total | 32.4 | 5.9 | 109.1 | 9.0 | 33.8 | 6.6 | 1.6 | 6.6 |
i.
Depreciation in 2024 comprises depreciation of property, plant and equipment of $25.2m (2023 – $27.2m) and depreciation of right-of-use assets of $7.2m (2023 – $6.6m).
ii.
Impairment of non-current assets comprises impairment of goodwill of $109.1m (2023 – $1.4m) and impairment of right-of-use assets of $nil (2023 – $0.2m). The $109.1m impairment of goodwill in 2024 is presented as an adjusting item, see note 5.
iii.
Impairment of current assets comprises the net impairment of inventories of $8.2m (2023 – $5.7m) and the net impairment of trade and other receivables of $0.8m (2023 – $0.9m).
Hunting PLC
194
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2. Segmental Reporting
continued
(c) Geographical Segment Information
Information on the physical location of non-current assets is presented below. The allocated non-current assets below exclude deferred tax assets.
Restated i | ||
2024 | 2023 | |
$m | $m | |
Hunting Titan – US | 67.9 | 177.2 |
Hunting Titan – Canada | 1.8 | 2.4 |
Hunting Titan – Other | 2.0 | 2.7 |
Hunting Titan | 71.7 | 182.3 |
North America – US | 199.7 | 213.4 |
North America – Canada | 1.5 | 0.7 |
North America | 201.2 | 214.1 |
Subsea Technologies – US | 39.4 | 38.0 |
Subsea Technologies – UK ii | 20.2 | 21.4 |
Subsea Technologies | 59.6 | 59.4 |
EMEA – UK ii | 20.6 | 19.6 |
EMEA – Rest of Europe | 4.4 | 5.0 |
EMEA – Middle East | 4.3 | 4.3 |
EMEA | 29.3 | 28.9 |
Asia Pacific – China | 10.8 | 9.4 |
Asia Pacific – Indonesia | 3.4 | 2.9 |
Asia Pacific – Singapore | 9.0 | 5.6 |
Asia Pacific | 23.2 | 17.9 |
Unallocated assets: | ||
Deferred tax assets | 108.5 | 95.2 |
Total non-current assets | 493.5 | 597.8 |
i.
Comparative balances have been restated, see note 1.
ii.
The value of non-current assets located in the UK, the Group’s country of domicile, is $40.8m (2023 – $41.0m).
Revenue from external customers attributable to the UK, the Group’s country of domicile, included in the Subsea Technologies and EMEA operating segments, is $41.3m (2023 – $34.7m). Revenue attributable
to foreign countries totalled $1,007.6m (2023 – $894.4m). Revenue attributable to the US, the Group’s largest individual foreign country where revenue is earned, is $646.2m (2023 – $619.8m), which represents
62% (2023 – 67%) of the Group’s revenue from external customers. Revenue attributed to an individual country is based on where the invoice is raised, however, customers can either be domestic or
international customers.
(d) Major Customer
Included in external revenue is revenue of $140.7m which arose from sales to our distributor for orders to Kuwait Oil Company (2023 – $79.8m sales to Halliburton Company Group (“Halliburton”)), the Group’s
largest customer. This represents 13% (2023 – 9%) of the Group’s revenue from external customers. All of this revenue arose within the Asia Pacific operating segment (2023 – all of Hunting’s operating
Hunting PLC
195
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
In the following tables, a breakdown of the Group’s different revenue streams by segment has been
given, including the disaggregation of revenue from contracts with customers.
| 2024 | ||||
Revenue | Total | |||
from contracts | Rental | Other | external | |
with customers | revenue | revenue | revenue | |
$m | $m | $m | $m | |
Hunting Titan | 220.0 | 0.5 | – | 220.5 |
North America | 355.1 | 2.2 | – | 357.3 |
Subsea Technologies | 147.1 | – | – | 147.1 |
EMEA | 82.8 | 3.8 | – | 86.6 |
Asia Pacific | 237.2 | 0.2 | – | 237.4 |
Total | 1,042.2 | 6.7 | – | 1,048.9 |
| 2023 | ||||
Revenue | Total | |||
from contracts | Rental | Other | external | |
with customers | revenue | revenue | revenue | |
$m | $m | $m | $m | |
Hunting Titan | 248.9 | 1.3 | – | 250.2 |
North America | 336.6 | 1.7 | 1.0 | 339.3 |
Subsea Technologies | 98.6 | – | – | 98.6 |
EMEA | 82.0 | 4.7 | – | 86.7 |
Asia Pacific | 154.1 | 0.2 | – | 154.3 |
Total | 920.2 | 7.9 | 1.0 | 929.1 |
Revenue is typically recognised for products when the product is shipped or made available to
customers for collection, or over time as control of the product is transferred to customers, and for
services either on completion of the service or, at a minimum, monthly for services covering more than
one month.
Of the total external revenue, $805.6m (2023 – $726.3m) was recognised at a point in time and
$243.3m (2023 – $202.8m) was recognised over time. The Group’s revenue recognised over time
is predominantly within the North America and Subsea Technologies operating segments.
The amount of consideration is not adjusted for the effects of a significant financing component as,
at contract inception, the period between when the entity transfers a promised good or service to
2024 | 2023 | |
$m | $m | |
Operating income from leasing assets (note 24) | 1.4 | 2.7 |
Gain on disposal of property, plant and equipment | 1.3 | 2.2 |
Government grants | 0.1 | 0.2 |
Foreign exchange gains i | 2.6 | 1.1 |
Other income ii | 2.4 | 1.8 |
Total operating income | 7.8 | 8.0 |
Loss on disposal of property, plant and equipment | (0.4) | (0.5) |
Foreign exchange losses iii | (3.1) | (0.3) |
Research and development costs expensed | (6.6) | (4.7) |
Other operating expenses iv | (0.1) | (0.1) |
Total other operating expenses | (10.2) | (5.6) |
Net operating income and other expenses | (2.4) | 2.4 |
i.
Includes fair value gains on derivatives designated in a cash flow hedge of $0.2m (2023 – $0.3m).
ii.
Includes fair value gains on derivatives not designated in a hedge of $0.1m (2023 – $0.1m).
iii.
Includes fair value losses on derivatives designated in a fair value hedge of $0.7m (2023 – $nil).
iv.
Hunting PLC
196
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
Due to their size and nature, the following items have been disclosed separately, as required by IAS 1.
2024 | ||
Gross | Tax | |
amount | impact | |
$m | $m | |
Impairment of goodwill | (109.1) | 27.8 |
Following the annual review of goodwill, an impairment charge of $109.1m was recognised in relation
to Hunting Titan (note 15). The impairment charge relates entirely to goodwill and has been presented
separately on the face of the consolidated income statement. An associated deferred tax credit of
$27.8m has been recognised reflecting the reduction in the book value for deferred tax purposes for
tax deductible goodwill in the US.
Restated i | ||
2023 | ||
Gross | Tax | |
amount | impact | |
$m | $m | |
Recognition of US deferred tax assets | – | 83.1 |
Import tax provision | (8.9) | 2.1 |
Total | (8.9) | 85.2 |
i.
Comparative balances have been restated, see note 1.
During 2023, previously unrecognised US deferred tax assets of $83.1m were recognised on
the balance sheet, reflecting the improved profitability in the US which resulted in the criteria for
recognition being met (note 9). The related tax credit in the income statement was presented
as an adjusting item (NGM A).
Adjusting items for the year ended 31 December 2023 have been restated to include a provision
of $8.9m for import tax relating to one of the business units in the EMEA operating segment, which
had not followed the correct processes for importing goods (NGM A), see note 1. These costs were
included within administrative expenses. Additionally, a deferred tax asset and related income
statement tax credit of $2.1m were recognised as management expects the expense to reduce
2024 | 2023 | |
$m | $m | |
Staff costs (note 7) | 228.1 | 218.5 |
Depreciation of property, plant and equipment (note 11) | 25.2 | 27.2 |
Amortisation of intangible assets (included in cost of sales | ||
and administrative expenses) (note 14) | 5.9 | 6.6 |
Impairment of goodwill (included in administrative expenses in 2023) | ||
(note 13) | 109.1 | 1.4 |
Impairment of trade and other receivables (note 18) | 0.8 | 0.9 |
Net gain on disposal of property, plant and equipment (note 4) | (0.9) | (1.7) |
Net lease charges included in operating profit (note 24) | 9.3 | 8.6 |
Research and development costs expensed (note 4) | 6.6 | 4.7 |
2024 | 2023 | |
$m | $m | |
The audit of these financial statements | 3.1 | 2.8 |
The audit of the financial statements of the Company’s subsidiaries | 0.7 | 0.5 |
Total audit | 3.8 | 3.3 |
Audit-related assurance services | 0.3 | 0.2 |
Total audit and audit-related services | 4.1 | 3.5 |
2024 | 2023 | |
$m | $m | |
Wages and salaries (including annual cash bonuses) | 189.9 | 183.4 |
Social security costs | 14.8 | 13.6 |
Share-based payments (note 37) | 14.1 | 13.5 |
Pension costs | ||
– defined contribution schemes (note 32) | 9.3 | 8.2 |
– unfunded defined benefit schemes – US and Middle East (note 32) | 0.5 | 0.3 |
Net gains on the unfunded defined benefit schemes included | ||
in net finance expense (note 32) | (0.1) | – |
Staff costs for the year | 228.5 | 219.0 |
Hunting PLC
197
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
7. Employees
continued
Staff costs for the year included in the financial statements are as follows:
2024 |
2023 |
|
$m |
$m |
|
Total staff costs included in operating profit (note 6) |
228.1 |
218.5 |
Net gains on the unfunded defined benefit schemes included |
||
in net finance expense (note 32) |
(0.1) |
– |
Staff costs capitalised as R&D |
0.5 |
0.5 |
228.5 |
219.0 |
the year was:
2024 |
2023 |
|
Number |
Number |
|
North America |
1,661 |
1,672 |
Europe |
286 |
261 |
Asia Pacific |
365 |
324 |
Central America, Middle East and Africa |
111 |
104 |
2,423 |
2,361 |
The average monthly number of employees by operating segment (including executive Directors)
during the year was:
2024 |
2023 |
|
Number |
Number |
|
Hunting Titan |
565 |
647 |
North America |
911 |
868 |
Subsea Technologies |
217 |
180 |
EMEA |
276 |
261 |
Asia Pacific |
365 |
324 |
Central |
89 |
81 |
2,423 |
2,361 |
during the year (2023 – ten). Their aggregate remuneration in the year was:
2024 |
2023 |
|
$m |
$m |
|
Salaries, annual cash bonuses and short-term employee benefits |
9.5 |
9.8 |
Post-employment benefits |
0.8 |
0.4 |
Share-based payments |
6.7 |
5.7 |
17.0 |
15.9 |
Remuneration of the Board, included as part of key management compensation, can be found in the
Annual Report on Remuneration on pages 136 to 160. The Annual Report on Remuneration disclosures
do not include Executive Committee members who are not part of the Board and disclose share
scheme remuneration on a vested rather than an accruals basis.
Short-term employee benefits comprise healthcare insurance, company cars and fuel benefits.
Post-employment benefits comprise employer pension contributions. Share-based payments
comprise the charge to the consolidated income statement.
The total amounts for Directors’ remuneration in accordance with Schedule 5 to the Accounting
Regulations were as follows:
2024 |
2023 |
|
$m |
$m |
|
Salaries, annual cash bonuses and short-term employee benefits |
3.9 |
4.0 |
Gains on exercise of share awards i |
6.5 |
1.3 |
Post-employment benefits |
0.2 |
0.2 |
10.6 |
5.5 |
i.
The gain on exercise of share awards in 2023 has been restated to $1.3m (previously reported $1.2m).
The Group contributes on behalf of the Chief Executive to a US 401k deferred savings plan and an
additional deferred compensation scheme. The Finance Director receives an annual cash sum in lieu
Hunting PLC
198
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2024 |
2023 |
|
$m |
$m |
|
Finance income: |
||
Interest received on bank balances and deposits |
0.5 |
0.2 |
Foreign exchange gains i |
0.6 |
0.1 |
Fair value gains on money market funds |
0.9 |
– |
Fair value gains on non-hedging derivative financial instruments |
0.9 |
0.4 |
Other finance income |
0.3 |
0.2 |
3.2 |
0.9 |
|
Finance expense: |
||
Interest on lease liabilities |
(1.4) |
(1.3) |
Bank fees and commissions |
(3.4) |
(2.9) |
Interest on bank borrowings |
(4.9) |
(5.2) |
Foreign exchange losses |
(1.2) |
(0.6) |
Other finance expense ii |
(4.7) |
(1.3) |
(15.6) |
(11.3) |
|
Net finance expense |
(12.4) |
(10.4) |
i.
ii.
Other finance expense includes fair value losses on derivatives not designated in a hedge of $0.5m (2023 – $0.2m), fair value losses
on derivatives designated in a cash flow hedge of $1.7m (2023 – $0.1m) and in a fair value hedge of $0.6m (2023 – $nil) and losses
on derecognition of financial assets recognised at amortised cost arising on letter of credit discounting and interest incurred in respect
Restated i |
||
2024 |
2023 |
|
$m |
$m |
|
Current tax: |
||
Current year charge |
(8.7) |
(8.4) |
Adjustments in respect of prior years |
(0.1) |
0.4 |
(8.8) |
(8.0) |
|
Deferred tax: |
||
Origination and reversal of temporary differences |
15.9 |
(4.6) |
Adjustments in respect of prior years |
0.9 |
0.6 |
Recognition of US deferred tax assets |
– |
83.1 |
16.8 |
79.1 |
|
Taxation credit |
8.0 |
71.1 |
i.
Comparative balances have been restated, see note 1.
The tax credit for the year was $8.0m (restated 2023 – $71.1m) and the effective tax rate (“ETR”) was
24% (restated 2023 – minus 173%). The Group’s ETR is broadly in line with what might be expected
from prevailing jurisdictional rates and the difference arises from distortion caused when deferred tax
is not fully recognised in loss-making jurisdictions, as was the situation in prior years. In 2023, the
Group’s ETR was significantly different to that which might be expected from prevailing jurisdictional
rates as the recognition of the US deferred tax asset during the year distorted the IFRS reported
effective tax rate considerably.
When adjusting items are excluded, the Group’s adjusted ETR is 26% (2023 – 28%). The calculation
of the adjusted tax charge and adjusted effective tax rate can be found in NGM D.
The adjustments in respect of prior years within both current tax and deferred tax, totalling a credit
of $0.8m (2023 – $1.0m) mainly relate to true-ups of prior year balances.
The table below reconciles the tax on the Group’s (loss)/profit before tax to a weighted average tax
rate for the Group based on the tax rates applicable to each entity in the Group. A weighted average
applicable rate for the year of 29% (2023 – 23%) was used as this reflects the applicable rates for the
countries applied to their respective profits/losses in the year. The total tax credit for the year
is different to the weighted average rate of tax of 29% (2023 – 23%) for the following reasons:
Restated i |
||
2024 |
2023 |
|
$m |
$m |
|
(Loss)/profit before tax |
(33.5) |
41.1 |
Tax at 29% (2023 – 23%) |
9.8 |
(9.4) |
Permanent differences including tax credits |
(0.2) |
(2.7) |
Current year deferred tax not recognised |
(2.3) |
(0.6) |
Recognition of previously unrecognised deferred taxes |
– |
83.1 |
Difference in tax rates |
(0.1) |
(0.3) |
Adjustments in respect of prior years |
0.8 |
1.0 |
Taxation credit |
8.0 |
71.1 |
i.
Comparative balances have been restated, see note 1.
Hunting PLC
199
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
9. Taxation
continued
| Restated i |
||||||
| 2024 |
2023 |
|||||
Before tax |
Tax credited |
After tax |
Before tax |
Tax credited |
After tax |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Exchange adjustments |
(4.3) |
– |
(4.3) |
3.4 |
– |
3.4 |
Fair value losses arising on cash flow hedges during the year |
(0.8) |
0.1 |
(0.7) |
(0.3) |
– |
(0.3) |
Fair value gains reclassified to profit or loss |
(0.2) |
0.1 |
(0.1) |
(0.3) |
0.1 |
(0.2) |
Remeasurement of defined benefit pension schemes |
(0.1) |
– |
(0.1) |
– |
– |
– |
(5.4) |
0.2 |
(5.2) |
2.8 |
0.1 |
2.9 |
|
i.
Comparative balances have been restated, see note 1.
The tax relating to the components of other comprehensive income comprises a deferred tax credit of $0.2m (2023 – $0.1m).
Tax-related Judgements
The Group is subject to income taxes in numerous jurisdictions and significant judgement is required in determining the worldwide provision for those taxes, as tax legislation can be complex and open
to different interpretation. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available, against which the temporary differences can be utilised. The
recoverability of deferred tax assets is supported by deferred tax liabilities against which the reversal can be offset as well as the expected level of future profits. This is considered by jurisdiction, or by entity,
dependent on the tax laws of the jurisdiction. Where there is both a history of loss making and continued loss making in the year, stronger supporting evidence is required to meet recognition policy criteria.
Supporting evidence reviewed includes: whether actual results, when excluding non-recurring items, meet or exceed budget; the level of taxable profits generated in the base case and downside case of
longer-term forecasts; and the nature of how the deferred tax assets arose and how this relates to the ongoing activities of the business.
The recognition of deferred tax assets as at 31 December 2024 has been based on the forecast accounting profits in the 2025 and 2026 budget and the extended forecast period as presented to the Board.
This is the same forecast that is used to derive cash flows for the impairment testing of non-current assets, per note 15. For periods beyond the extended forecast period, profits have been assumed to grow
in a manner consistent with the terminal growth rate assumptions used for impairment testing. In addition, a risk factor has been applied to reduce future profits for the extended forecast period and beyond.
These adjustments are to reflect the potential decrease in reliability of forecasts for future periods beyond the Board-approved budget period.
Historical tax losses make up the majority of the deductible temporary differences. These losses mainly arose from varying factors including non-recurring events such as losses arising at the start of
newly-formed businesses and losses arising from periods of economic downturn, such as during the COVID-19 pandemic. Historically, the majority of the deferred tax not recognised in the Group was in
relation to deferred tax arising in the US. As a result of the recognition of deferred tax in the US in the year ended 31 December 2023, the level of deferred tax not recognised across the Group significantly
reduced. The level has increased slightly in the year ended 31 December 2024, largely due to current year losses in jurisdictions where deferred tax was not recognised in the prior year. Management will
continue to monitor the position in those jurisdictions where deferred tax is not recognised.
The main jurisdiction where there was a change in deferred tax recognition in the year ended 31 December 2023 is the US. The estimated taxable profits in the year ended 31 December 2024 and revised
Hunting PLC
200
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
Basic (loss)/earnings per share (“(LPS)/EPS”) is calculated by dividing (loss)/earnings attributable to Ordinary shareholders by the weighted average number of Ordinary shares outstanding during the year.
For diluted (loss)/earnings per share, the weighted average number of outstanding Ordinary shares was adjusted to assume conversion of all dilutive potential Ordinary shares. Dilution arises through
the possible issue of shares to satisfy awards made under the Group’s long-term incentive plans.
Reconciliations of the (loss)/earnings and weighted average number of Ordinary shares used in the calculations are set out below:
| Restated i |
||||||
| 2024 |
2023 |
|||||
Loss attributable |
Basic weighted |
Earnings attributable |
Basic weighted |
|||
to Ordinary |
average number of |
Loss |
to Ordinary |
average number of |
Earnings |
|
shareholders |
Ordinary shares |
per share |
shareholders |
Ordinary shares |
per share |
|
$m |
millions |
cents |
$m |
millions |
cents |
|
Basic (LPS)/EPS |
(28.0) |
159.1 |
(17.6) |
110.3 |
158.6 |
69.5 |
Effect of dilutive long-term incentive plans ii |
– |
10.4 |
– |
– |
8.7 |
(3.6) |
Diluted (LPS)/EPS |
(28.0) |
169.5 |
(17.6) |
110.3 |
167.3 |
65.9 |
i.
Comparative balances have been restated, see note 1.
ii.
For the year ended 31 December 2024, the Group reported a loss, therefore, the effect of dilutive long-term incentive plans was anti-dilutive. As such, they were disregarded in the calculation of diluted loss per share.
| 2024 |
||||
Plant, machinery |
||||
Land and |
and motor |
|||
buildings |
vehicles |
Rental tools |
Total |
|
$m |
$m |
$m |
$m |
|
Cost: |
||||
At 1 January 2024 |
258.3 |
345.3 |
26.3 |
629.9 |
Exchange adjustments |
(0.8) |
(1.7) |
(0.4) |
(2.9) |
Additions |
1.4 |
22.1 |
1.7 |
25.2 |
Disposals |
(6.8) |
(6.6) |
(1.8) |
(15.2) |
Reclassification from inventories (note 20) |
– |
– |
1.7 |
1.7 |
Reclassifications |
0.3 |
0.4 |
(0.7) |
– |
At 31 December 2024 |
252.4 |
359.5 |
26.8 |
638.7 |
Accumulated depreciation and impairment: |
||||
At 1 January 2024 |
(85.5) |
(271.6) |
(18.3) |
(375.4) |
Exchange adjustments |
0.5 |
1.6 |
0.2 |
2.3 |
Depreciation charge for the year |
(6.2) |
(17.3) |
(1.7) |
(25.2) |
Disposals |
4.9 |
5.8 |
1.7 |
12.4 |
Reclassifications |
– |
(0.4) |
0.4 |
– |
At 31 December 2024 |
(86.3) |
(281.9) |
(17.7) |
(385.9) |
Net book amount |
166.1 |
77.6 |
9.1 |
252.8 |
Hunting PLC
201
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
11. Property, Plant and Equipment
continued
| 2023 |
|||||
Plant, machinery |
Oil and gas |
||||
Land and |
and motor |
exploration and |
|||
buildings |
vehicles |
Rental tools |
development |
Total |
|
$m |
$m |
$m |
$m |
$m |
|
Cost: |
|||||
At 1 January 2023 |
255.5 |
331.7 |
24.1 |
112.3 |
723.6 |
Exchange adjustments |
2.0 |
1.5 |
0.8 |
– |
4.3 |
Additions |
1.0 |
21.4 |
0.6 |
0.1 |
23.1 |
Disposals |
(0.1) |
(9.6) |
(0.5) |
(112.4) |
(122.6) |
Reclassification from inventories (note 20) |
– |
– |
1.5 |
– |
1.5 |
Reclassifications |
(0.1) |
0.3 |
(0.2) |
– |
– |
At 31 December 2023 |
258.3 |
345.3 |
26.3 |
– |
629.9 |
Accumulated depreciation and impairment: |
|||||
At 1 January 2023 |
(77.9) |
(262.9) |
(16.2) |
(109.9) |
(466.9) |
Exchange adjustments |
(1.3) |
(1.3) |
(0.5) |
– |
(3.1) |
Depreciation charge for the year |
(6.3) |
(16.7) |
(2.2) |
(2.0) |
(27.2) |
Disposals |
– |
9.4 |
0.5 |
111.9 |
121.8 |
Reclassifications |
– |
(0.1) |
0.1 |
– |
– |
At 31 December 2023 |
(85.5) |
(271.6) |
(18.3) |
– |
(375.4) |
Net book amount |
172.8 |
73.7 |
8.0 |
– |
254.5 |
The net book amount of property, plant and equipment at 1 January 2023 was $256.7m.
During 2023, the Group disposed of oil and gas exploration and development assets with a net book value of $0.5m. These legacy assets were owned by Tenkay Resources, Inc and reported as part
of the North America operating segment.
Included in the net book amount is expenditure relating to assets in the course of construction of $0.2m (2023 – $0.2m) for buildings and $0.8m (2023 – $0.7m) for plant and machinery.
The net book amount of land and buildings of $166.1m (2023 – $172.8m) comprises freehold land and buildings of $163.1m (2023 – $169.2m) and capitalised leasehold improvements of $3.0m (2023 – $3.6m).
In accordance with the requirements of the Group’s committed ABL bank facility, security was granted over specific items of property, plant and equipment that had a carrying value of $137.8m
Hunting PLC
202
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
| 2024 |
|||
Plant, machinery |
|||
Land and |
and motor |
||
buildings |
vehicles |
Total |
|
$m |
$m |
$m |
|
Cost: |
|||
At 1 January 2024 |
65.0 |
3.0 |
68.0 |
Exchange adjustments |
(1.5) |
– |
(1.5) |
Additions |
2.6 |
0.1 |
2.7 |
Lease cessations |
(9.1) |
(0.1) |
(9.2) |
Modifications |
7.0 |
– |
7.0 |
At 31 December 2024 |
64.0 |
3.0 |
67.0 |
Accumulated depreciation and impairment: |
|||
At 1 January 2024 |
(40.3) |
(1.5) |
(41.8) |
Exchange adjustments |
0.9 |
0.2 |
1.1 |
Depreciation charge for the year |
(6.6) |
(0.6) |
(7.2) |
Lease cessations |
9.1 |
0.1 |
9.2 |
At 31 December 2024 |
(36.9) |
(1.8) |
(38.7) |
Net book amount |
27.1 |
1.2 |
28.3 |
| 2023 |
|||
Plant, machinery |
|||
Land and |
and motor |
||
buildings |
vehicles |
Total |
|
$m |
$m |
$m |
|
Cost: |
|||
At 1 January 2023 |
60.7 |
2.1 |
62.8 |
Exchange adjustments |
0.4 |
0.1 |
0.5 |
Additions |
5.4 |
0.8 |
6.2 |
Lease cessations |
(2.2) |
(0.2) |
(2.4) |
Modifications |
0.7 |
0.2 |
0.9 |
At 31 December 2023 |
65.0 |
3.0 |
68.0 |
Accumulated depreciation and impairment: |
|||
At 1 January 2023 |
(35.8) |
(1.0) |
(36.8) |
Exchange adjustments |
(0.4) |
(0.2) |
(0.6) |
Depreciation charge for the year |
(6.1) |
(0.5) |
(6.6) |
Impairment of assets |
(0.2) |
– |
(0.2) |
Lease cessations |
2.2 |
0.2 |
2.4 |
At 31 December 2023 |
(40.3) |
(1.5) |
(41.8) |
Net book amount |
24.7 |
1.5 |
26.2 |
The net book amount of right-of-use assets at 1 January 2023 was $26.0m.
The Group sub-leases certain right-of-use assets under operating leases. The net book amount
of items that are sub-leased included in the table above is $1.4m (2023 – $2.1m) for land and buildings.
Included in land and buildings in 2024 were lease cessations relating to facilities in Canada, the US
and Singapore that were fully depreciated and lease modifications in Hunting Titan and the US where
property leases were extended.
In 2023, land and buildings additions included $2.1m for a new lease for Hunting’s Dubai operations,
2024 |
2023 |
|
$m |
$m |
|
Cost: |
||
At 1 January |
529.1 |
527.1 |
Exchange adjustments |
(2.2) |
2.0 |
At 31 December |
526.9 |
529.1 |
Accumulated impairment: |
||
At 1 January |
(374.7) |
(371.6) |
Exchange adjustments |
2.0 |
(1.7) |
Impairment of assets (note 15(b)) |
(109.1) |
(1.4) |
At 31 December |
(481.8) |
(374.7) |
Net book amount |
45.1 |
154.4 |
The net book amount of goodwill at 1 January 2023 was $155.5m.
Details of the allocation of goodwill by cash-generating unit (“CGU”), the impairment testing of goodwill
Hunting PLC
203
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
14. Other Intangible Assets
| 2024 |
||||||
Patented |
||||||
Customer |
technology and |
Unpatented |
||||
relationships |
trademarks |
technology |
Software |
Other |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Cost: |
||||||
At 1 January 2024 |
7.5 |
75.2 |
84.8 |
23.1 |
4.6 |
195.2 |
Exchange adjustments |
(0.1) |
(0.2) |
(0.2) |
(0.1) |
(0.1) |
(0.7) |
Additions |
– |
0.4 |
2.2 |
1.9 |
0.3 |
4.8 |
Disposals |
– |
(0.4) |
– |
(0.4) |
(0.1) |
(0.9) |
At 31 December 2024 |
7.4 |
75.0 |
86.8 |
24.5 |
4.7 |
198.4 |
Accumulated amortisation and impairment: |
||||||
At 1 January 2024 |
(2.9) |
(63.6) |
(75.0) |
(10.7) |
(2.2) |
(154.4) |
Exchange adjustments |
0.1 |
0.1 |
0.1 |
0.1 |
– |
0.4 |
Amortisation charge for the year |
(0.8) |
(1.7) |
(0.7) |
(2.3) |
(0.4) |
(5.9) |
Disposals |
– |
0.4 |
– |
0.4 |
0.1 |
0.9 |
At 31 December 2024 |
(3.6) |
(64.8) |
(75.6) |
(12.5) |
(2.5) |
(159.0) |
Net book amount |
3.8 |
10.2 |
11.2 |
12.0 |
2.2 |
39.4 |
| 2023 |
||||||
Patented |
||||||
Customer |
technology and |
Unpatented |
||||
relationships |
trademarks |
technology |
Software |
Other |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Cost: |
||||||
At 1 January 2023 |
7.1 |
73.7 |
82.4 |
16.6 |
3.5 |
183.3 |
Exchange adjustments |
0.4 |
0.7 |
0.2 |
0.2 |
0.2 |
1.7 |
Additions |
– |
0.8 |
2.2 |
7.0 |
0.9 |
10.9 |
Disposals |
– |
– |
– |
(0.7) |
– |
(0.7) |
At 31 December 2023 |
7.5 |
75.2 |
84.8 |
23.1 |
4.6 |
195.2 |
Accumulated amortisation and impairment: |
||||||
At 1 January 2023 |
(2.0) |
(61.7) |
(73.3) |
(8.8) |
(1.8) |
(147.6) |
Exchange adjustments |
(0.2) |
(0.2) |
(0.2) |
(0.3) |
– |
(0.9) |
Amortisation charge for the year |
(0.7) |
(1.7) |
(1.5) |
(2.3) |
(0.4) |
(6.6) |
Disposals |
– |
– |
– |
0.7 |
– |
0.7 |
At 31 December 2023 |
(2.9) |
(63.6) |
(75.0) |
(10.7) |
(2.2) |
(154.4) |
Net book amount |
4.6 |
11.6 |
9.8 |
12.4 |
2.4 |
40.8 |
Hunting PLC
204
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
14. Other Intangible Assets
continued
The net book amount of other intangible assets at 1 January 2023 was $35.7m.
All intangible assets are regarded as having a finite life and are amortised accordingly. Amortisation
charges relating to intangible assets were charged to cost of sales and administrative expenses
in the consolidated income statement.
Internally generated intangible assets have been included within patented and unpatented technology
as shown in the table below:
2024 |
2023 |
|||
Internally |
Internally |
Internally |
Internally |
|
generated |
generated |
generated |
generated |
|
patented |
unpatented |
patented |
unpatented |
|
technology |
technology |
technology |
technology |
|
$m |
$m |
$m |
$m |
|
Cost: |
||||
At 1 January |
13.0 |
31.4 |
12.1 |
29.0 |
Exchange adjustments |
(0.1) |
(0.2) |
0.2 |
0.2 |
Additions |
0.4 |
2.2 |
0.7 |
2.2 |
At 31 December |
13.3 |
33.4 |
13.0 |
31.4 |
Accumulated amortisation |
||||
and impairment: |
||||
At 1 January |
(7.2) |
(21.6) |
(6.5) |
(19.9) |
Exchange adjustments |
0.1 |
0.1 |
– |
(0.2) |
Amortisation charge for the year |
(0.7) |
(0.7) |
(0.7) |
(1.5) |
At 31 December |
(7.8) |
(22.2) |
(7.2) |
(21.6) |
Net book amount |
5.5 |
11.2 |
5.8 |
9.8 |
(a) Impairment Testing Process
(i) Cash-generating Units (“CGUs”)
The Group has an annual impairment testing date of 30 September.
In Hunting, CGUs are generally separate business units. In certain cases, combinations of business
units that are tightly integrated through inter-company trading, shared management or cost base are
treated as a CGU. In 2024, the US Subsea CGU was split into two separate CGUs; Subsea Stafford
and Subsea Spring. The goodwill previously held in the US Subsea CGU arose on the acquisition
of Subsea Stafford and, therefore, has been allocated entirely to this CGU.
The recoverable amount of each CGU was determined using a value-in-use method which uses
discounted cash flow projections. The key assumptions for the value-in-use calculations are revenue
growth rates, taking into account the impact these have on margins, terminal growth rates and the
discount rates applied.
For 2025 and 2026, cash flows are based on the latest detailed budget, as approved by the Board.
For 2027 to 2029, management made revenue projections using Spears & Associates Drilling
& Production Outlook independent reports as a default basis, selecting the most appropriate
geographic markets and drivers (rig count, footage drilled or exploration and production spend) for
each CGU. Management applied judgemental changes to revenue growth expectations, if appropriate,
to reflect circumstances specific to the CGU.
Having determined the projected revenues, management modelled the expected impact on margins
and cash flow from the resulting revenue projections. This process can give a diverse range of
outcomes depending on market or business specific conditions. Compound annual growth rates
(“CAGR”) for revenue for the CGUs from 2024 to 2029 vary between (3)% and 22% (2023 – CAGR
from 2023 to 2028 vary between 5% and 20%). The weighted average growth rate for revenue from
2024 to 2029 was 4% (2023 – from 2023 to 2028 was 9%). After 2029, a terminal value was calculated
assuming growth of 2% (2023 – 50 basis points above assumed inflation, giving nominal growth rates
between 2% and 6%). Fundamentally, this long-term growth is based on a proxy for global long-term
inflation taking into consideration more developed and developing markets.
Cash flows were discounted using nominal pre-tax rates between 9% and 14% (2023 – 12% and
17%). The discount rates reflected current market assessments of the equity market risk premiums,
the volatility of returns, the risks associated with the cash flows, the likely external borrowing rate of
the CGU and expected levels of leverage. Consideration was also given to other factors such as a size
premium, currency risk, operational risk and country risk. Required returns on equity were determined
using the capital asset pricing model, which is then incorporated into a weighted average cost of
capital calculation. Risk free rates are determined using long-dated government borrowing
instruments.
Management have also considered indicators of impairment in the carrying value of the assets,
including the excess of the value calculated under the value-in-use methodology described above,
compared to the Group’s market capitalisation, and any changes after the impairment testing date
(ii) Impairment Tests for Individual Assets
For individual assets, an impairment test is conducted if there are indicators of impairment. Impairment
arises when the carrying value of the asset is greater than the higher of either its fair value less costs
of disposal, or its value-in-use. The fair value less costs of disposal or the value-in-use is a Level 3
measurement per the fair value hierarchy as defined within IFRS 13 due to unobservable inputs used
in the valuation. If the cash flows of an asset cannot be assessed individually, then the asset or a group
of assets are aggregated into a CGU and tested as described above.
Hunting PLC
205
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
15. Impairment of Non-current Assets
continued
(i) Allocation
Goodwill is allocated to the Group’s CGUs as follows:
Operating |
2024 |
2023 |
|
CGU |
segment |
$m |
$m |
Hunting Titan |
Hunting Titan |
5.7 |
114.9 |
Subsea Stafford |
Subsea Technologies |
15.0 |
15.0 |
Enpro |
Subsea Technologies |
4.3 |
4.4 |
Dearborn |
North America |
7.6 |
7.6 |
US Manufacturing |
North America |
12.5 |
12.5 |
At 31 December |
45.1 |
154.4 |
Goodwill is tested at least annually for impairment. A charge of $109.1m was recognised in 2024
(2023 – $1.4m) in relation to the Hunting Titan CGU (2023 – Enpro CGU). The impairment charge
relates solely to goodwill and has been presented separately on the face of the consolidated income
statement (2023 – within administrative expenses). The goodwill balance also decreased by $0.2m
during the year due to foreign exchange movements.
(ii) Hunting Titan
The trading performance at Hunting Titan continued to decline through the second half of 2024
following decreased activity in the US onshore well completions market and a resulting fall in demand
for its Perforating Systems products. As a result of this, management has reassessed its short and
medium-term forecasts. The revised outlook for Hunting Titan is underpinned by modest growth in the
US onshore market and management expects margins to improve due to ongoing efficiencies in the
production cost of gun systems, combined with operating cost improvements, which include the
benefits from the actions taken in the first half of 2024. The compound annual growth rate for revenue
for Hunting Titan from 2024 to 2029 was 3% (2023 – 2023 to 2028 was 8%). EBITDA margin is
expected to reach low double digits by 2029.
Management is of the view that the impact of climate change to Hunting Titan is minimal given the
outlook for demand for oil and gas related products in the medium-term and the ability of Hunting to
pivot to non-oil and gas in this timescale. Further details on climate-related risks and opportunities are
disclosed on pages 92 to 96.
The ensuing recoverable amount, determined on a value-in-use basis, was lower than the carrying value
at 30 September 2024, indicating an impairment was necessary. Additionally, there were indicators of
further impairment in the period to 31 December due to an increase in the discount rate used to
discount the cash flow projections, driven largely by a rise in the risk-free rate. This led to management
recalculating the value-in-use at 31 December resulting in an impairment charge of $109.1m. There
was also an associated deferred tax credit of $27.8m reflecting the reduction in the book value for
deferred tax purposes for tax deductible goodwill in the US. Taking this into consideration, the overall
write down of the Hunting Titan CGU was $81.3m.
The projected cash flows for Hunting Titan were discounted using a nominal pre-tax rate of
11% (2023 – 13%). The recoverable amount of the Hunting Titan CGU, after the impairment charge,
is equal to its carrying value of $228.0m. Consequently, any adverse changes in key assumptions
would, in isolation, cause a further impairment charge to be recognised.
(iii) Other CGUs
The recoverable amounts were in excess of the carrying values for the other CGUs and there were
no indicators of impairment in the period to 31 December 2024.
(c) CGU Sensitivities
(i) Hunting Titan
At 31 December 2024, the Group was carrying $5.7m (2023 – $114.9m) of goodwill and $13.0m
(2023 – $11.7m) of other intangible assets in respect of the Hunting Titan CGU.
The following changes to key assumptions would, in isolation, lead to an increase in the impairment
charge at Hunting Titan:
Additional |
||
impairment |
||
Sensitivity |
$m |
|
Pre-tax discount rate |
Increase of 1.0% |
(20.4) |
Terminal value growth rate |
Decrease of 0.5% |
(3.8) |
Revenue growth rates (CAGR from 2024 to 2029) |
Decrease of 1.0% |
(14.8) |
EBITDA margin (reduction in 2029 and into perpetuity) |
Decrease of 1.0% |
(25.6) |
(ii) Other CGUs
For the other CGUs that carry goodwill, management has concluded that there are no reasonably
(d) Impairment of Other Non-Current Assets
There was no impairment of other non-current assets in 2024. In 2023, an impairment charge of $0.2m
Hunting PLC
206
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
Movement on investments in associates and joint ventures:
2024 | 2023 | |
$m | $m | |
At 1 January | 20.5 | 20.1 |
Additions | 0.9 | 1.6 |
Share of associates’ and joint venture’s results for the year | (0.1) | (0.6) |
Dividends received from associates | – | (0.6) |
Transferred to held for sale | (12.1) | – |
At 31 December | 9.2 | 20.5 |
During 2024, the Group invested a further $0.9m in Cumberland Additive Holdings LLC (“Cumberland”),
increasing its share of equity to 30.7% (2023 – 30.4%). During 2023, the Group invested a further
$1.6m in Cumberland.
At 31 December 2024, the Group’s investment in Rival met the criteria to be classified as held for sale,
in accordance with IFRS 5. Accordingly, the investment of $12.1m has been presented within current
assets on the face of the consolidated balance sheet.
The investments in associates and joint ventures, including the name, country of incorporation and
proportion of ownership interest, are disclosed in note C14.
Rival Downhole Tools LC (“Rival”) is a provider of drilling and thru tubing tools and motors to the
upstream oil and gas industry. Cumberland is a contract manufacturer which specialises in metal and
polymer 3D printing and computer numerical control machining to support the aerospace, defence,
space and energy markets. The joint venture with Jindal SAW, leaders in pipe manufacturing, is to
deliver OCTG products in India.
(a) Material Associates and Joint Ventures
The tables below provide summarised financial information for Rival which is considered to be a
material associate of the Group. The Group has a 23.0% (2023 – 23.0%) interest in the equity shares
of Rival. The information disclosed reflects the amounts presented in the financial statements of Rival
and not Hunting PLC’s share of those amounts. They have been amended to reflect adjustments
made by Hunting when using the equity method, including fair value adjustments and modifications
for differences in accounting policy.
Rival | ||
2024 | 2023 | |
$m | $m | |
Summarised statement of comprehensive income: | ||
Revenue | 40.8 | 53.5 |
Operating (loss)/profit | (2.9) | 6.7 |
Total comprehensive (expense)/income | (2.9) | 6.7 |
The Group’s share of Rival’s post-tax loss was $0.7m (2023 – $1.4m profit). Amortisation of $0.3m
(2023 – $0.3m) was charged to the Group’s income statement during the year in relation to the
intangible assets recognised at the time the investment in Rival was made.
Rival | ||
2024 | 2023 | |
$m | $m | |
Summarised balance sheet: | ||
Non-current assets | 18.1 | 26.6 |
Current assets | 27.1 | 25.4 |
Total assets | 45.2 | 52.0 |
Non-current liabilities | (5.1) | (7.1) |
Current liabilities | (4.1) | (6.0) |
Total liabilities | (9.2) | (13.1) |
Net assets | 36.0 | 38.9 |
Reconciliation to carrying amounts: | ||
Opening net assets at 1 January | 38.9 | 32.2 |
(Loss)/profit for the year | (2.9) | 6.7 |
Net assets | 36.0 | 38.9 |
Group’s share of equity % | 23.0% | 23.0% |
Group’s share of net assets | 8.2 | 8.9 |
Goodwill | 2.1 | 2.1 |
Other intangible assets | 1.8 | 2.1 |
Carrying amount at 31 December | 12.1 | 13.1 |
(b) Individually Immaterial Associates and Joint Ventures
In addition to the material associates disclosed above, the Group also has interests in a number of
individually immaterial associates and joint ventures, all of which are unlisted, that are accounted for
using the equity method. The Group’s share of the results and its aggregated assets and liabilities,
are as follows:
2024 | 2023 | |
$m | $m | |
Aggregate carrying amount of individually immaterial associates | 5.2 | 5.7 |
Aggregate carrying amount of individually immaterial joint ventures | 4.0 | 1.7 |
Share of immaterial associates’ and joint venture’s results for the year | 0.9 | (1.7) |
Hunting PLC
207
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2024 | 2023 | |
$m | $m | |
Listed equity investments and mutual funds | 2.6 | 2.2 |
Well Data Labs convertible financing | 2.2 | 2.2 |
4.8 | 4.4 |
The listed equity investments and mutual funds are held in relation to the US defined benefit scheme
(note 32).
In February 2021, the Group entered into a strategic alliance with Wells Data Labs, a data analytics
business focused on the onshore drilling market, through the provision of $2.5m in convertible
2024 | 2023 | |
$m | $m | |
Non-current: | ||
Prepayments | 3.0 | 1.8 |
Other receivables | 2.4 | – |
5.4 | 1.8 |
| 2024 | ||||
Contracts with | Rental | Other | ||
customers | receivables | receivables | Total | |
$m | $m | $m | $m | |
Current: | ||||
Trade receivables | 193.1 | 1.9 | – | 195.0 |
Accrued revenue | 2.8 | 0.4 | – | 3.2 |
Gross receivables | 195.9 | 2.3 | – | 198.2 |
Less: provisions for impairment | (3.4) | (0.3) | – | (3.7) |
Net receivables | 192.5 | 2.0 | – | 194.5 |
Prepayments | – | – | 36.9 | 36.9 |
Other receivables | – | – | 6.4 | 6.4 |
Total trade and other receivables | 192.5 | 2.0 | 43.3 | 237.8 |
Contract assets (note 23) | 23.7 | – | – | 23.7 |
Trade, contract and other receivables | 216.2 | 2.0 | 43.3 | 261.5 |
| 2023 | ||||
Contracts with | Rental | Other | ||
customers | receivables | receivables | Total | |
$m | $m | $m | $m | |
Current: | ||||
Trade receivables | 202.7 | 2.0 | – | 204.7 |
Accrued revenue | 2.5 | – | – | 2.5 |
Gross receivables | 205.2 | 2.0 | – | 207.2 |
Less: provisions for impairment | (3.2) | (0.3) | – | (3.5) |
Net receivables | 202.0 | 1.7 | – | 203.7 |
Prepayments | – | – | 27.1 | 27.1 |
Other receivables | – | – | 3.1 | 3.1 |
Total trade and other receivables | 202.0 | 1.7 | 30.2 | 233.9 |
Contract assets (note 23) | 17.5 | – | – | 17.5 |
Trade, contract and other receivables | 219.5 | 1.7 | 30.2 | 251.4 |
activities of the Group and comprise receivables from tax (VAT, GST, franchise taxes, and sales and
use taxes) of $3.5m (2023 – $1.0m), derivative financial assets of $0.5m (2023 – $0.5m) and other
receivables of $4.8m (2023 – $1.6m), the latter of which are classified as financial assets measured
During the year, the Group sold trade receivables amounting to $59.2m (2023 – $9.9m) to third parties
under trade receivables purchasing programmes in order to accelerate collections. Upon sale, the
receivables were derecognised from the balance sheet.
In accordance with the requirements of the Group’s committed ABL bank facility, security was granted
over certain US and Canadian trade and other receivables, which had a carrying value of $77.6m at
31 December 2023. For the receivables pledged as security, their carrying value approximates their
fair value. The ABL facility was cancelled in October 2024 and replaced with an earnings-based facility
that does not require security over assets.
Hunting PLC
208
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
18. Trade, Contract and Other Receivables
continued
provision matrices for recognising ECLs on its receivables, which are based on actual credit loss experience over the past two years, at a minimum. Receivables are appropriately grouped by geographical
region, product type or type of customer, and separate calculations produced, if historical or forecast credit loss experience shows significantly different loss patterns for different customer segments.
Actual credit loss experience is then adjusted to reflect differences in economic conditions over the period the historical data was collected, current economic conditions, forward-looking information based
on macro-economic information and the Group’s view of economic conditions over the expected lives of the receivables. The contract assets relate to unbilled work in progress and have substantially the same
risk characteristics as the trade receivables and accrued revenue for the same types of contracts. It has, therefore, been concluded that the expected loss rates for trade receivables are a reasonable
At 31 December 2024, the ageing of the Group’s gross financial assets, based on days overdue, is as follows:
Not | 1 – 30 | 31 – 60 | 61 – 90 | 91 – 120 | More than | Total gross | |
overdue | days | days | days | days | 120 days | financial assets | |
$m | $m | $m | $m | $m | $m | $m | |
Trade receivables – contracts with customers | 118.8 | 28.4 | 18.6 | 6.2 | 7.3 | 13.8 | 193.1 |
Trade receivables – rental receivables | 1.5 | 0.2 | 0.1 | 0.1 | – | – | 1.9 |
Total trade receivables | 120.3 | 28.6 | 18.7 | 6.3 | 7.3 | 13.8 | 195.0 |
Accrued revenue – contracts with customers | 2.8 | – | – | – | – | – | 2.8 |
Accrued revenue – rental receivables | 0.4 | – | – | – | – | – | 0.4 |
Other receivables i | 4.7 | – | 0.1 | – | – | – | 4.8 |
Contract assets | 23.7 | – | – | – | – | – | 23.7 |
151.9 | 28.6 | 18.8 | 6.3 | 7.3 | 13.8 | 226.7 |
i.
Other receivables excludes $3.5m in relation to receivables from tax as these are not considered financial assets and $0.5m in relation to derivative assets as these are not subject to the impairment requirements of IFRS 9.
Since 31 December 2023, there has been a decrease in the ageing of trade receivables with trade receivables not overdue at the year-end comprising 62% of gross trade receivables compared to 55%
at 31 December 2023. Overdue debts arise due to a number of different factors, including the time taken in resolving any disputes, a culture of slow/late payment in some jurisdictions and some debtors
experiencing cash flow difficulties.
At 31 December 2023, the ageing of the Group’s gross financial assets, based on days overdue, was as follows:
Not | 1 – 30 | 31 – 60 | 61 – 90 | 91 – 120 | More than | Total gross | |
overdue | days | days | days | days | 120 days | financial assets | |
$m | $m | $m | $m | $m | $m | $m | |
Trade receivables – contracts with customers | 111.0 | 40.9 | 23.9 | 9.7 | 8.5 | 8.7 | 202.7 |
Trade receivables – rental receivables | 0.7 | 0.1 | 0.5 | 0.3 | 0.2 | 0.2 | 2.0 |
Total trade receivables | 111.7 | 41.0 | 24.4 | 10.0 | 8.7 | 8.9 | 204.7 |
Accrued revenue – contracts with customers | 2.5 | – | – | – | – | – | 2.5 |
Other receivables i | 1.6 | – | – | – | – | – | 1.6 |
Contract assets | 17.5 | – | – | – | – | – | 17.5 |
133.3 | 41.0 | 24.4 | 10.0 | 8.7 | 8.9 | 226.3 |
i.
Other receivables excludes $1.0m in relation to receivables from tax as these are not considered financial assets and $0.5m in relation to derivative assets as these are not subject to the impairment requirements of IFRS 9. This balance has been restated in 2023 to exclude derivatives.
Concentrations of credit risk with respect to trade receivables are limited due to the Group’s wide and unrelated customer base. The maximum exposure to credit risk is the carrying amount of each class
Hunting PLC
209
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
18. Trade, Contract and Other Receivables
continued
Impairment of Trade, Contract and Other Receivables
continued
under the terms of the debt are more than 90 days overdue. Usually, no further deliveries are made
or services provided to customers that are more than 90 days overdue unless there is a valid reason
to do so, such as billing issues that have prevented the customer from settling the invoice. Permission
from the local financial controller can be obtained to continue trading with customers with debts that
are more than 90 days overdue, and the outstanding debts may also be rescheduled with the
While a proportion, 11% (2023 – 9%), of the Group’s trade receivables are more than 90 days overdue,
the majority of these have not been impaired. Some of these debts have become overdue due to
billing and other issues or due to general slow payment by the customer. Where there is no history of
bad debts and there are no indicators that the debts will not be settled, the receivables have not been
impaired. These customers are monitored very closely for any indicators of impairment.
receivables are generally not recoverable include the failure of the debtor to engage in a repayment
plan, failure to make contractual payments for a period greater than 180 days past due and the debtor
being placed in administration. Where receivables have been written off, the Group will continue to try
to recover the outstanding receivable. Impairment losses on receivables are presented net of unused
provisions released to the consolidated income statement within administrative expenses. Subsequent
Credit risk arises on accrued revenue where goods or services have been provided to a customer but
the amount is yet to be invoiced. The accrued revenue balance is short term and relates to customers
with a strong credit history. Therefore, the ECLs on this balance are immaterial and no provision for
impairment has been recognised.
During the year, the movements on the provisions for impairment were as follows:
| 2024 | |||
Contracts | |||
with | Rental | ||
customers | receivables | Total | |
$m | $m | $m | |
At 1 January 2024 | (3.2) | (0.3) | (3.5) |
Charge to the consolidated income statement | |||
– lifetime expected credit losses | (1.1) | – | (1.1) |
Utilised against receivables written off | 0.6 | – | 0.6 |
Unused provisions released to the | |||
consolidated income statement | 0.3 | – | 0.3 |
At 31 December 2024 | (3.4) | (0.3) | (3.7) |
The provision for the impairment of trade and other receivables has marginally increased by $0.2m
to $3.7m at 31 December 2024. Management is of the view that the credit risk is largely unchanged
during the year.
| 2023 | |||
Contracts | |||
with | Rental | ||
customers | receivables | Total | |
$m | $m | $m | |
At 1 January 2023 | (3.3) | (0.4) | (3.7) |
Charge to the consolidated income statement | |||
– lifetime expected credit losses | (0.9) | – | (0.9) |
Utilised against receivables written off | 1.0 | 0.1 | 1.1 |
At 31 December 2023 | (3.2) | (0.3) | (3.5) |
Deferred income tax assets and liabilities are only offset when there is a legally enforceable right
to offset, when the deferred income taxes relate to the same fiscal authority and there is an intention
to settle the balance net. The offset amounts are as follows:
Restated i | ||
2024 | 2023 | |
$m | $m | |
Deferred tax assets | 108.5 | 95.2 |
Deferred tax liabilities | (3.7) | (8.4) |
104.8 | 86.8 |
i.
Comparative balances have been restated, see note 1.
The movement in the total deferred tax shown in the balance sheet is as follows:
Restated i | ||
2024 | 2023 | |
$m | $m | |
At 1 January | 86.8 | 7.3 |
Exchange adjustments | (0.4) | – |
Credit to the consolidated income statement (note 9) | 16.8 | 79.1 |
Taken direct to equity | 1.6 | 0.4 |
At 31 December | 104.8 | 86.8 |
i.
Comparative balances have been restated, see note 1.
Hunting PLC
210
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
19. Deferred Tax
continued
Deferred tax assets of $65.1m gross and $9.4m tax (2023 – $57.8m gross and $7.1m tax) have not been recognised as the assessment of recoverability at 31 December 2024 is that it is uncertain and
therefore does not meet the criteria for recognition under IAS 12. This includes $64.7m gross and $9.3m tax (2023 – $57.5m gross and $7.0m tax) in respect of trading losses, the majority of which do not have
an expiry date. A deferred tax asset of $65.3m (2023 – $69.4m) has been recognised in respect of tax losses in various locations where recognition assessment has provided support that sufficient future
taxable profits will be available against which the tax losses could be utilised. See note 9 for further details on the recognition assessment performed at each balance sheet date.
The movements in deferred tax assets and liabilities, prior to taking into consideration the offsetting of balances within the same tax jurisdictions, are shown below:
At 1 January | Exchange | (Charge)/credit to | Taken direct | At 31 December | Net deferred | Net deferred | |
2024 | adjustments | income statement | to equity | 2024 | tax assets | tax liabilities | |
$m | $m | $m | $m | $m | $m | $m | |
Tax losses | 69.4 | (0.3) | (3.8) | – | 65.3 | 64.8 | 0.5 |
Inventory | 13.8 | – | (0.4) | – | 13.4 | 13.4 | – |
Goodwill and intangibles i | (11.5) | – | 18.9 | – | 7.4 | 10.2 | (2.8) |
Interest deductible in future periods | 17.1 | – | 0.8 | – | 17.9 | 17.9 | – |
Property, plant and equipment | (15.9) | – | (0.1) | – | (16.0) | (14.8) | (1.2) |
Share-based payments | 4.6 | – | 0.1 | 1.4 | 6.1 | 6.1 | – |
Other | 9.3 | (0.1) | 1.3 | 0.2 | 10.7 | 10.9 | (0.2) |
86.8 | (0.4) | 16.8 | 1.6 | 104.8 | 108.5 | (3.7) |
| Restated i | |||||||
At 1 January | Exchange | (Charge)/credit to | Taken direct | At 31 December | Net deferred | Net deferred | |
2023 | adjustments | income statement | to equity | 2023 | tax assets | tax liabilities | |
$m | $m | $m | $m | $m | $m | $m | |
Tax losses | 24.2 | 0.3 | 44.9 | – | 69.4 | 51.2 | 18.2 |
Inventory | 0.8 | – | 13.0 | – | 13.8 | 13.8 | – |
Goodwill and intangibles | (19.7) | (0.1) | 8.3 | – | (11.5) | 13.8 | (25.3) |
Interest deductible in future periods | – | – | 17.1 | – | 17.1 | 17.1 | – |
Property, plant and equipment | (0.9) | – | (15.0) | – | (15.9) | (14.6) | (1.3) |
Share-based payments | 1.0 | (0.1) | 3.4 | 0.3 | 4.6 | 4.6 | – |
Other | 1.9 | (0.1) | 7.4 | 0.1 | 9.3 | 9.3 | – |
7.3 | – | 79.1 | 0.4 | 86.8 | 95.2 | (8.4) | |
i.
Included within the credit to the income statement of $18.9m is a credit of $27.8m relating to the release of deferred tax liabilities associated with the goodwill impairment recognised in 2024, disclosed as an adjusting item, see note 5.
ii.
Hunting PLC
211
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2024 | 2023 | |
$m | $m | |
Raw materials | 133.3 | 150.9 |
Work in progress | 83.8 | 94.0 |
Finished goods | 143.3 | 136.0 |
Gross inventories | 360.4 | 380.9 |
Less: provisions for impairment | (57.1) | (52.5) |
Net inventories | 303.3 | 328.4 |
2024 | 2023 | |
$m | $m | |
Gross inventories: | ||
At 1 January | 380.9 | 322.1 |
Exchange adjustments | (2.9) | 1.6 |
Additions | 713.9 | 719.1 |
Charged to cost of sales in the consolidated income statement | (729.8) | (660.4) |
Reclassification to property, plant and equipment (note 11) | (1.7) | (1.5) |
At 31 December | 360.4 | 380.9 |
Provisions for impairment: | ||
At 1 January | (52.5) | (50.0) |
Exchange adjustments | 0.5 | (0.4) |
Charged to cost of sales in the consolidated income statement | (10.2) | (7.5) |
Provisions utilised against inventories written off | 3.1 | 3.6 |
Provisions released to the consolidated income statement | 2.0 | 1.8 |
At 31 December | (57.1) | (52.5) |
Net inventories | 303.3 | 328.4 |
The Group’s inventory is highly durable and it can hold its value well with the passing of time.
The nature of our market is that demand for products depends on the technical requirements of
the projects being developed. For some markets and product lines there may be a limited number
of sales, or even no sales, to form a benchmark in the current year. Management looks at relevant
historical activity levels and has to form a judgement as to likely future demand in light of market
forecasts and likely competitor activities.
Within gross inventories charged to cost of sales is $4.2m (2023 – $nil) relating to inventory written off
in the year.
During 2024, inventory provisions increased by $4.6m to $57.1m at 31 December 2024, which
represents 16% of gross cost balances (2023 – 14%). The increased provision in the year reflects new
charges exceeding the utilisation of provisions and the reversal of unutilised provisions. Management
has considered the judgements and estimates made in each of the Group’s businesses and, other
than pressure control equipment, has not identified any individual estimates, which in the event of
a change, would lead to a material change in the next financial period. Provisions for inventories held
at NRV are subject to change if expectations change.
Inventories of $225.7m are expected to be realised within 12 months of the balance sheet date
(2023 – $245.2m) and $77.6m after 12 months (2023 – $83.2m). Inventories of $279.1m (2023 – $306.0m)
are carried at cost and $24.2m (2023 – $22.4m) are carried at net realisable value.
In accordance with the requirements of the Group’s committed ABL bank facility, security was granted
over inventories which had a carrying value of $172.3m at 31 December 2023, held in certain US and
Canadian subsidiaries. The ABL facility was cancelled in October 2024 and replaced with an
2024 | 2023 | |
$m | $m | |
Cash at bank and in hand | 78.1 | 45.5 |
Money market funds | 76.7 | – |
Short-term deposits with less than 3 months to maturity | 51.8 | – |
Cash and cash equivalents | 206.6 | 45.5 |
Cash at bank and in hand and short-term deposits are carried at amortised cost. Money market funds
are financial assets carried at fair value through profit or loss. The maximum exposure to credit risk is
the carrying amount. Please see note 30(c)(i) for further disclosures on credit risk.
As shown in note 26, cash and cash equivalents for cash flow statement purposes also includes bank
overdrafts shown in borrowings in note 25.
At 31 December 2024, the Group held cash balances totalling $44.1m (2023 – $24.4m) within China.
As such, this cash was subject to the usual exchange controls and other regulatory restrictions that
Hunting PLC
212
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
2024 | 2023 | |
$m | $m | |
Non-current: | ||
US deferred compensation plan obligation (note 32(b)(i)) | 2.6 | 2.2 |
Social security and other taxes | 0.3 | 0.4 |
Other payables | 2.6 | 1.1 |
5.5 | 3.7 |
2024 | 2023 | |
$m | $m | |
Current: | ||
Trade payables | 41.4 | 62.5 |
Accruals | 47.1 | 50.7 |
Social security and other taxes | 8.3 | 7.4 |
Other payables i | 98.4 | 3.2 |
Total trade and other payables | 195.2 | 123.8 |
Contract liabilities (note 23) | 13.3 | 39.6 |
Trade, contract and other payables | 208.5 | 163.4 |
i.
Other payables includes derivative financial liabilities of $3.4m (2023 – $0.1m).
Within other payables are amounts totalling $92.4m (2023 – $nil) in relation to payments due to
financial institutions arising under bank acceptance drafts, which represent payments to suppliers
The following table provides information about receivables, accrued income, contract assets and
contract liabilities arising from contracts with customers.
2024 | 2023 | 2022 | |
$m | $m | $m | |
Contract assets (note 18) | 23.7 | 17.5 | 8.6 |
Contract liabilities (note 22) | (13.3) | (39.6) | (8.8) |
Trade receivables – contracts with customers (note 18) | 193.1 | 202.7 | 180.1 |
Provisions for impairment (note 18) | (3.4) | (3.2) | (3.3) |
Net trade receivables – contracts with customers | 189.7 | 199.5 | 176.8 |
Accrued revenue – contracts with customers (note 18) | 2.8 | 2.5 | 2.0 |
(a) Significant Changes in Contract Assets and Contract Liabilities
Contract assets increased from $17.5m at 31 December 2023 to $23.7m at 31 December 2024 due
to an increase in bespoke customer work-in-progress at Subsea Technologies invoiced in arrears.
Contract liabilities represent deposits received from customers (or amounts presently due under
non-cancellable contracts) in excess of the value of the work completed to date at Subsea
Technologies, as well as deposits received from customers for the purchase of pipe in the Asia Pacific
businesses. Contract liabilities decreased by $26.3m in the year to $13.3m at 31 December 2024,
reflecting the progress made and revenue recognised on contracts during the year.
(b) Revenue Recognised in Relation to Contract Liabilities
During the year, $39.6m of revenue was recognised in relation to amounts that were included
in the contract liabilities balance at the beginning of the year (2023 – $8.8m). There was no revenue
recognised from performance obligations satisfied or partially satisfied in previous years (2023 – none).
(c) Unsatisfied Performance Obligations
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose
information about remaining performance obligations that are part of contracts that have original
expected durations of one year or less. This is the vast majority of Hunting’s contracts with customers.
In the prior year, the Group disclosed the aggregate amount of the transaction price allocated
to partially or fully unsatisfied performance obligations as equal to the sales order book (NGM T).
As such, the amount disclosed included orders that were wholly unperformed where either Hunting
or the customer had the unilateral enforceable right to terminate the contract without compensating
the other party. In 2024, these amounts have been excluded from the disclosure and, as a result,
the comparatives below have been restated.
For the contracts that have original expected durations of greater than one year, the aggregate
amount of the transaction price allocated to partially or fully unsatisfied performance obligations as
at the year-end is $203.7m (restated 2023 – $152.6m). It is expected that $184.5m of the transaction
price allocated to unsatisfied performance obligations as of 31 December 2024 will be recognised
as revenue in 2025 (restated 2023 – $82.0m in 2024) and the remaining $19.2m in future years
Hunting PLC
213
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
The Group leases various offices, warehouses, equipment and vehicles. Rental contracts for offices
and warehouses are typically made for fixed periods of between three and ten years, but may have
extension options as described below. Rental contracts for equipment and vehicles are typically made
for fixed periods of between three and seven years. The Group also has short-term leases and leases
of low-value assets. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. The lease agreements do not impose any covenants. As at 31 December
2024, the Group did not have any commitments for leases that were due to commence in 2025 or
Extension and termination options are included in a number of property and equipment leases across
the Group. These terms are used to maximise operational flexibility in terms of managing contracts.
For extension and termination options that are exercisable only by the Group and not by the respective
lessor, management considers all facts and circumstances that create an economic incentive for the
Group to exercise an extension option, or not exercise a termination option, in determining the lease
term. The lease term is determined according to management’s expectation of exercising any available
extension and termination options. Extension or termination options are only adjusted in the lease term
if the lease option is reasonably certain to be exercised.
(a) Amounts Recognised in the Consolidated Balance Sheet
The analysis of right-of-use assets is presented in note 12.
2024 | 2023 | |
$m | $m | |
Lease liabilities | ||
Current | 7.4 | 8.0 |
Non-current | 22.7 | 20.7 |
30.1 | 28.7 |
(b) Amounts Recognised in the Consolidated Income Statement
2024 | 2023 | |
$m | $m | |
Depreciation of right-of-use assets (note 12) | (7.2) | (6.6) |
Expense relating to short-term leases and leases of low-value assets | (2.1) | (1.8) |
Impairment of right-of-use assets (note 12) | – | (0.2) |
Lease charges included in operating profit (note 6) | (9.3) | (8.6) |
Interest on lease liabilities (included in finance expenses) (note 8) | (1.4) | (1.3) |
Foreign exchange gains on lease liabilities (note 8) | 0.1 | – |
Lease charges included in (loss)/profit before tax | (10.6) | (9.9) |
(c) Amounts Recognised in the Consolidated Statement of Cash Flows
2024 | 2023 | |
$m | $m | |
Payments for short-term and low-value leases | (2.1) | (1.8) |
Payment of lease liabilities, principal and interest | (8.9) | (10.4) |
(11.0) | (12.2) |
Payments for short-term leases, payments for leases of low-value assets and variable lease payments
that are not included in the measurement of the lease liabilities are presented within cash flows from
operating activities. Payments for the principal and interest elements of lease liabilities and proceeds
on disposal of lease liabilities are presented within cash flows from financing activities.
The analysis of the contractual, undiscounted cash flows relating to lease liabilities is shown
in note 30(d)(iii).
Hunting PLC
214
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
24. Leases
continued
(d) The Group as Lessor
A number of the Group’s properties included within property, plant and equipment and right-of-use
assets are leased to third parties under operating lease agreements. Income from leasing these assets
during the year was $1.4m (2023 – $2.7m) and is included within operating income (note 4). The Group
also earns revenue from the rental of tools, which are items of property, plant and equipment (note 11).
Rental revenue during the year was $6.7m (2023 – $7.9m) (note 3).
The table below shows the maturity analysis of the undiscounted future lease payments expected
to be received in relation to non-cancellable operating leases:
Property | Property | |
2024 | 2023 | |
$m | $m | |
Year one | 1.4 | 2.5 |
Year two | 0.2 | 0.8 |
Year three | 0.1 | 0.7 |
Year four | – | 0.7 |
Year five | – | 0.7 |
Total lease income receivable | 1.7 | 5.4 |
The Group also leases a property in the US to a third party under a finance lease arrangement. The
net investment in the lease amounted to $2.3m at 31 December 2024 (31 December 2023 – $nil) and
is presented within other receivables (note 18). Additional disclosures for the finance lease receivable
2024 | 2023 | |
$m | $m | |
Non-current: | ||
Bank borrowings secured (note 30(d)(i)) | 90.6 | – |
Shareholder loan from non-controlling interest | 3.9 | 3.9 |
94.5 | 3.9 | |
Current: | ||
Bank borrowings secured (note 30(d)(i)) | 9.8 | 44.9 |
Bank overdrafts secured | 1.5 | 1.4 |
11.3 | 46.3 | |
Total borrowings | 105.8 | 50.2 |
In accordance with the requirements of the Group’s committed ABL bank facility, at 31 December 2023
security was granted over certain freehold property, receivables and inventories. The carrying amounts
of the assets pledged as security are disclosed in notes 11, 18 and 20.
All of the borrowings are financial liabilities measured at amortised cost and are denominated
Hunting PLC
215
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
Hunting operates a centralised treasury function that manages all cash and borrowing positions throughout the Group and ensures funds are used efficiently through the use of cash concentration account
structures and other such measures. Net cash/(debt) (NGM L) is a non-GAAP measure; however, management and the Group treasury function monitor total cash and bank/(borrowings) (NGM K) to ensure
there is sufficient liquidity to meet business requirements. As the Group manages funding on a total cash and bank/(borrowings) basis, internal reporting focuses on changes in total cash and bank/(borrowings)
and this is presented in the Strategic Report. The net cash/(debt) reconciliation below provides an analysis of the movement in the year for each component of net cash/(debt) split between cash and non-cash
items. Net cash/(debt) comprises total cash and bank less total lease liabilities and the shareholder loan from a non-controlling interest.
At | Non-cash | At | |||
1 January | movements on | Exchange | 31 December | ||
2024 | Cash flow | lease liabilities i | movements | 2024 | |
$m | $m | $m | $m | $m | |
Cash and cash equivalents (note 21) | 45.5 | 163.8 | – | (2.7) | 206.6 |
Bank overdrafts secured (note 25) | (1.4) | (0.1) | – | – | (1.5) |
Cash and cash equivalents – per cash flow statement | 44.1 | 163.7 | – | (2.7) | 205.1 |
Total lease liabilities (note 24) | (28.7) | 8.9 | (11.0) | 0.7 | (30.1) |
Shareholder loan from non-controlling interest (note 25) | (3.9) | – | – | – | (3.9) |
Total bank borrowings (note 25) | (44.9) | (55.5) | – | – | (100.4) |
Liabilities arising from financing activities | (77.5) | (46.6) | (11.0) | 0.7 | (134.4) |
Total net debt/(cash) | (33.4) | 117.1 | (11.0) | (2.0) | 70.7 |
i.
Non-cash movements on lease liabilities comprise new leases of $2.6m, lease modifications of $7.0m and interest expense of $1.4m.
During the year, $2.1m of bank borrowing facility fees were amortised (2023 – $1.7m) and $4.3m (2023 – $nil) was paid in respect of arrangement fees for the new facility. The fees for the borrowing facility were
capitalised in prepayments and amortised over the expected useful life of the facility.
At | Non-cash | At | |||
1 January | movements on | Exchange | 31 December | ||
2023 | Cash flow | lease liabilities i | movements | 2023 | |
$m | $m | $m | $m | $m | |
Cash and cash equivalents (note 21) | 29.4 | 16.2 | – | (0.1) | 45.5 |
Bank overdrafts secured (note 25) | (2.1) | 0.7 | – | – | (1.4) |
Cash and cash equivalents – per cash flow statement | 27.3 | 16.9 | – | (0.1) | 44.1 |
Total lease liabilities (note 24) | (30.6) | 10.4 | (8.4) | (0.1) | (28.7) |
Shareholder loan from non-controlling interest (note 25) | (3.9) | – | – | – | (3.9) |
Total bank borrowings (note 25) | (2.8) | (42.1) | – | – | (44.9) |
Liabilities arising from financing activities | (37.3) | (31.7) | (8.4) | (0.1) | (77.5) |
Total net debt | (10.0) | (14.8) | (8.4) | (0.2) | (33.4) |
i.
Hunting PLC
216
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
(a) Provisions
Asset |
||||
decommissioning |
||||
and |
Import |
|||
remediation |
tax |
Other |
Total |
|
$m |
$m |
$m |
$m |
|
At 1 January 2024, restated i |
1.5 |
9.1 |
6.0 |
16.6 |
Exchange adjustments |
(0.1) |
(0.1) |
(0.1) |
(0.3) |
Charged to the consolidated income |
||||
statement |
– |
0.5 |
0.1 |
0.6 |
Charged other |
0.1 |
– |
– |
0.1 |
Provisions utilised |
– |
– |
(1.5) |
(1.5) |
Unutilised amounts reversed |
(0.1) |
(0.9) |
(0.2) |
(1.2) |
At 31 December 2024 |
1.4 |
8.6 |
4.3 |
14.3 |
Provisions are due as follows:
Restated i |
||
2024 |
2023 |
|
$m |
$m |
|
Current |
12.6 |
13.9 |
Non-current |
1.7 |
2.7 |
14.3 |
16.6 |
i.
Comparative balances have been restated, see note 1.
Asset decommissioning and remediation provisions of $1.4m (2023 – $1.5m) relate to the Group’s
obligations to restore leased properties. The restoration provisions are expected to be utilised at the
end of the respective leases, with $0.7m current and $0.7m non-current. Provisions are made on a
discounted basis; however, the impact of discounting is not material.
Other provisions include provisions for onerous contracts of $0.1m (2023 – $0.5m), restructuring
provisions of $0.3m (2023 – $0.3m), a provision for a pension fund for officers and ratings in the
mercantile marine industry from a legacy subsidiary of $0.9m (2023 – $0.9m), warranties and
tax indemnities of $0.1m (2023 – $0.3m), litigation costs of $2.3m (2023 – $2.3m) and $0.6m
(2023 – $1.7m) for various other items.
The provision for import tax of $8.6m (restated 2023 – $9.1m) relates to an ongoing review which
commenced in July 2024 and identified that an EMEA business unit had not followed the tax
authority’s interpretation of the correct processes for importing goods, under specific contracts, in
their jurisdiction and thus had not paid amounts which would have been due based the tax authority’s
guidance in place at the time. The business is working with the tax authority to regularise the position.
While no incremental profit or cash flow was recognised, resolution is dependent upon discretion by
the authority, and therefore an exposure exists. The provision represents the best estimate of the
potential liability and is expected to be settled within 12 months. The provision contains uncertainties
with respect to the amount of the liability, including whether there are any mitigations available, relief
The Group recognises provisions for liabilities when it is more likely than not a settlement will be
required and the value of the economic outflow can be estimated reliably. Liabilities that are not
provided for in the financial position of the Group are disclosed, unless the probability of an economic
outflow is considered to be remote.
The Group has entered into a number of guarantee and performance bond arrangements arising in
the normal course of business which have not been provided for as any significant liability is considered
The Group uses derivatives for economic hedging purposes and there are no speculative positions
entered into by the Group. However, where derivatives do not meet the hedge accounting criteria, they
are classified as “held for trading” for accounting purposes and are accounted for at fair value through
profit or loss. The Group has used spot and forward foreign exchange contracts to hedge its exposure
to exchange rate movements during the year. Foreign exchange outright contracts are used to
manage exposures, with funding swaps being used to produce required currencies when needed.
The fair values of outstanding derivative financial instruments are set out below:
2024 |
2023 |
|||
Total |
Total |
Total |
Total |
|
assets |
liabilities |
assets |
liabilities |
|
$m |
$m |
$m |
$m |
|
Forward foreign exchange contracts |
||||
– cash flow hedges |
0.1 |
(2.6) |
0.3 |
– |
Forward foreign exchange contracts |
||||
– fair value hedges |
– |
(0.7) |
– |
– |
Foreign exchange swaps – not in a hedge |
0.4 |
(0.1) |
0.2 |
(0.1) |
0.5 |
(3.4) |
0.5 |
(0.1) |
|
Derivative financial assets are presented within current other receivables (note 18) and derivative financial
liabilities are presented within current other payables (note 22).
Net fair value gains on contracts that are not designated in a hedge relationship of $0.4m (2023 – $0.2m)
were recognised in the consolidated income statement during the year, within net operating income
Hunting PLC
217
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
28. Derivatives and Hedging
continued
(b) Fair Value Hedge
Forward foreign exchange contracts have also been designated in a fair value hedge to hedge
the foreign exchange movement in foreign currency trade receivables and payables during the year.
The value of the forward foreign exchange contract matches the value of the trade receivables and
payables and they move in opposite directions as a result of movements in the CAD/USD or CNY/USD
exchange rates, being the hedged risk. Fair value losses of $1.3m (2023 – $nil) were recognised in the
consolidated income statement in net operating income and other expenses (note 4) and net finance
expenses (note 8) during the year. At the year-end, the fair value of derivative liabilities designated
in a fair value hedge was $0.7m (2023 – $nil).
(c) Cash Flow Hedge
The Group entered into contracts to purchase materials from suppliers in a currency other than
the relevant subsidiary’s functional currency. Certain of these highly probable forecast transactions
have been designated in a cash flow hedge relationship and hedged using forward foreign exchange
contracts during the year. The value of the forward foreign exchange contract matches the value of
the forecast inventory purchase and they move in opposite directions as a result of movements in the
CAD/USD, EUR/USD, EUR/GBP, SGD/USD and the CNY/USD exchange rates, being the hedged
risk. This will effectively result in recognising inventory at the fixed foreign currency rate for the hedged
purchases. It is anticipated that the materials will be sold within 12 months after purchase, at which
time the amount previously deferred in equity and included as part of the cost of inventory, will impact
profit or loss as part of the cost of inventories sold.
The Group also entered into forward foreign exchange contracts to hedge certain receipts from
customers and these highly probable forecast transactions have been designated in a cash flow
hedge relationship. The value of the forward foreign exchange contract matches the value of the
forecast cash flow and they move in opposite directions as a result of movements in the GBP/USD,
and USD/EUR exchange rates, being the hedged risk. It is anticipated that the trade receivables will
be collected within 12 months after the invoice is issued, at which time the amount previously deferred
in equity, will be taken to profit or loss.
The Group’s cash flow hedge reserve, which is disclosed as part of other components of equity
in note 34, relates to the spot component of forward foreign exchange contracts. The movements
in the hedging reserve during the year are shown in note 34.
Fair value losses of $1.5m (2023 – $0.2m gains) were recognised in the consolidated income
statement in net operating income and other expenses (note 4) and net finance expenses (note 8)
during the year.
The effects of outstanding forward foreign exchange contracts on the Group’s financial position
and performance are as follows:
2024 |
2023 |
||
Carrying amount of the forward foreign |
|||
exchange contracts (net) |
$m |
(2.5) |
0.3 |
Notional amount of the forward |
|||
foreign exchange contracts |
$m |
90.7 |
23.1 |
Maturity date |
2 January 2025 to |
2 January 2024 to |
|
30 July 2025 |
24 June 2024 |
||
Hedge ratio i |
1:1 |
1:1 |
|
Change in value of hedged item used |
|||
to determine hedge effectiveness |
$m |
(2.5) |
(0.3) |
i.
The forward foreign exchange contracts are denominated in the same currency as the highly probable forecast transactions to match the
exposed currency risk, therefore the hedge ratio is 1:1.
Immaterial changes in the forward points, the differential between the forward rate and the market spot
rate, have been recognised in the consolidated income statement during the year and previous year.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic
prospective effectiveness assessments to ensure that an economic hedge relationship exists between
the hedged item and the hedging instrument.
For hedges of foreign currency purchases, the Group enters into hedge relationships where the
critical terms of the hedging instrument match exactly with the terms of the hedged item. The Group,
therefore, performs a qualitative assessment of effectiveness. If changes in circumstances affect the
terms of the hedged item such that the critical terms no longer match exactly with the critical terms
of the forward foreign exchange contract, then the Group uses the hypothetical derivative method
to assess effectiveness. Ineffectiveness may arise if there is a change in the timing of the forecast
transaction from what was originally estimated or from a change in the US Dollar amount charged
and invoiced. A possible source of ineffectiveness is also a change in credit risk of either party to
Hunting PLC
218
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
29. Financial Instruments
This note provides information about the Group’s financial instruments, including an overview of all
financial instruments held by the Group; specific information about each type of financial instrument;
and information about determining the fair value of the instruments, including judgements and
estimation uncertainty involved.
The Group’s exposure to various risks associated with the financial instruments is disclosed in note 30.
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each
class of financial asset. Contract assets are not financial assets; however, they are explicitly included
in the scope of IFRS 7 for the purpose of the credit risk disclosures in note 30.
(a) Financial Instruments at Amortised Cost
2024 | 2023 | |
$m | $m | |
Financial assets at amortised cost: | ||
Trade and other receivables (note 18): | ||
Trade receivables | 195.0 | 204.7 |
Accrued revenue | 3.2 | 2.5 |
Other receivables – non-current i | 2.4 | – |
Other receivables – current | 2.4 | 1.6 |
Less: provisions for impairment | (3.7) | (3.5) |
Cash and cash equivalents (note 21): | ||
Cash at bank and in hand | 78.1 | 45.5 |
Short-term deposits with less than 3 months to maturity | 51.8 | – |
329.2 | 250.8 | |
Financial liabilities at amortised cost: | ||
Trade and other payables ii (note 22): | ||
Trade payables | (41.4) | (62.5) |
Accruals – current iii | (22.8) | (24.2) |
Other payables – current iv | (94.8) | (2.8) |
Lease liabilities – current and non-current (note 24) | (30.1) | (28.7) |
Borrowings (note 25): | ||
Shareholder loan from non-controlling interest | (3.9) | (3.9) |
Bank borrowings secured | (100.4) | (44.9) |
Bank overdrafts secured | (1.5) | (1.4) |
(294.9) | (168.4) |
ii. Excludes non-current payables of $2.6m (2023 – $1.1m) as these are non-financial liabilities.
iii.
Excludes accruals of $24.3m (2023 – $26.5m) recognised under IAS 19 and IFRS 2 that are outside the scope of IFRS 7.
iv. Excludes non-financial liabilities of $0.2m (2023 – $0.3m) and financial liabilities measured at fair value of $3.4m (2023 – $0.1m).
2024 | 2023 | |
$m | $m | |
Net foreign exchange (losses)/gains included in operating income | ||
and other operating expenses (note 4) | (0.5) | 0.8 |
Net foreign exchange losses included in net finance expense | ||
(note 8) | (0.6) | (0.5) |
Interest received on bank balances and deposits (note 8) | 0.5 | 0.2 |
Bank fees and commissions (note 8) | (3.4) | (2.9) |
Other finance expense (note 8) | (1.7) | (0.1) |
(i) Valuation Techniques used to Determine Fair Values
There have been no changes to the valuation techniques used during the year.
Money market funds are debt instruments measured at fair value through profit or loss (“FVTPL”), with
the fair value based on their current bid prices in an active market, which is considered to be the most
representative of fair value, at the balance sheet date.
The listed equity investments and mutual funds (note 17) are equity instruments measured at FVTPL,
with the fair value based on their current bid prices in an active market, which is considered to be the
most representative of fair value, at the balance sheet date.
The fair value of the convertible financing provided to Wells Data Labs was determined by considering
the probability weighted average discounted cash flows of the different scenarios using a discount
rate of 13% (2023 – 13%). The most significant unobservable inputs to the fair value calculation are
the probabilities of a conversion to equity and change of control assumptions. The fair value at
31 December 2024 was $2.2m (2023 – $2.2m) (note 17), with a fair value loss of $nil (2023 – $0.7m)
recognised in net finance expense during the year (note 8). At 31 December 2024, management
considers there to be no reasonable changes in unobservable inputs that would result in a significant
change in fair value.
The following instruments do not qualify for measurement at either amortised cost or at fair value
through other comprehensive income (“FVTOCI”). Therefore, they are financial instruments that have
mandatorily been measured at FVTPL:
• The fair value of forward foreign exchange contracts is determined by comparing the cash flows
generated by the contract with the coterminous cash flows potentially available in the forward
foreign exchange market on the balance sheet date. Details of the fair value gains and losses
recognised during the year on derivative contracts are given in note 28; and
• The fair value of foreign currency swaps is determined by calculating the present value of the estimated
future cash flows in each currency for both legs of the swap based on observable yield curves.
One leg’s present value is converted into the other currency using the current spot exchange rate.
Hunting PLC
219
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
29. Financial Instruments
continued
(b) Financial Instruments Measured at Fair Value
continued
The following tables present the Group’s net financial assets and liabilities that are measured and
recognised at fair value at the year-end and show the level in the fair value hierarchy in which the fair
value measurements are categorised. There were no transfers between levels during the year.
Fair value at | ||||
31 December | ||||
2024 | Level 1 | Level 2 | Level 3 | |
$m | $m | $m | $m | |
Equity instruments at FVTPL | ||||
Listed equity investments and mutual funds | 2.6 | 2.6 | – | – |
Debt instruments at FVTPL | ||||
Wells Data Labs convertible financing | 2.2 | – | – | 2.2 |
Money market funds | 76.7 | 76.7 | – | – |
Current derivatives in a hedge | ||||
Derivative financial assets | 0.1 | – | 0.1 | – |
Derivative financial liabilities | (3.3) | – | (3.3) | – |
Current derivatives held for trading | ||||
Derivative financial assets | 0.4 | – | 0.4 | – |
Derivative financial liabilities | (0.1) | – | (0.1) | – |
78.6 | 79.3 | (2.9) | 2.2 |
Fair value at | ||||
31 December | ||||
2023 | Level 1 | Level 2 | Level 3 | |
$m | $m | $m | $m | |
Equity instruments at FVTPL | ||||
Listed equity investments and mutual funds | 2.2 | 2.2 | – | – |
Debt instruments at FVTPL | ||||
Well Data Labs convertible financing | 2.2 | – | – | 2.2 |
Current derivatives in a hedge | ||||
Derivative financial assets | 0.3 | – | 0.3 | – |
Current derivatives held for trading | ||||
Derivative financial assets | 0.2 | – | 0.2 | – |
Derivative financial liabilities | (0.1) | – | (0.1) | – |
4.8 | 2.2 | 0.4 | 2.2 |
The fair value hierarchy has the following levels:
Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
Level 3 – unobservable inputs used in the valuation.
• The fair values of non-US Dollar denominated financial instruments are translated into US dollars
using the year-end exchange rate.
• The inputs used to determine the fair value of derivative financial instruments are inputs other than
quoted prices that are observable and so the fair value measurement is categorised in Level 2 of the
fair value hierarchy.
• The fair value of listed equities and mutual funds and money market funds are based on quoted
market prices and therefore the fair value measurements are categorised in Level 1 of the fair value
hierarchy.
• Due to unobservable inputs used in the valuation, the fair value of the Wells Data Labs convertible
(iii) Amounts Recognised in Profit or Loss
During the year, the following gains and losses were recognised in relation to financial instruments
measured at FVTPL:
2024 | 2023 | |
$m | $m | |
Fair value gains on the listed equity investments and mutual funds (note 8) | 0.2 | 0.1 |
Fair value loss on Wells Data Labs convertible financing (note 8) | – | (0.7) |
Fair value gains on money market funds (note 8) | 0.9 | – |
Fair value gains on financial instruments mandatorily measured at FVTPL: | ||
Net fair value (losses)/gains on derivative financial instruments (note 4) | (0.5) | 0.3 |
Net fair value (losses)/gains on derivative financial instruments (note 8) | (1.9) | 0.1 |
The fair value gains on the listed investments and mutual funds and the Wells Data Labs convertible
financing are unrealised gains recognised in profit or loss attributable to balances held at the end
of the reporting period.
Due to their short-term nature, the carrying values of trade receivables, accrued revenue, other
receivables considered to be financial assets, cash and cash equivalents, trade payables, accruals,
other payables considered to be financial liabilities, lease liabilities, bank overdrafts and bank
Hunting PLC
220
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
The Group’s activities expose it to certain financial risks, namely market risk (including foreign exchange risk and interest rate risk), as well as credit risk and liquidity risk. The Group’s risk management strategy
seeks to mitigate potential adverse effects on its financial performance. As part of its strategy, both primary and derivative financial instruments are used to hedge certain risk exposures.
There are clearly defined objectives and principles for managing financial risks established by the Board of Directors, with policies, parameters and procedures covering the specific areas of funding, banking
relationships, foreign exchange and interest rate exposures and cash management, together with the investment of surplus cash. The Group’s treasury function is responsible for implementing the policies and
for providing a centralised service to the Group for funding, foreign exchange and interest rate management and counterparty risk management. It is also responsible for identifying, evaluating and hedging
financial risks in close cooperation with the Group’s operating companies.
The Group’s international base is exposed to foreign exchange risk from its investing, financing and operating activities, particularly in respect of Sterling, Chinese Renminbi, Saudi Arabia Riyal and Canadian
Dollars. Foreign exchange risks arise from future commercial transactions and cash flows, and from recognised monetary assets and liabilities that are not denominated in the functional currency of the
Group’s local operations.
Foreign exchange rates that the Group has the largest exposures to are:
Sterling |
Chinese Renminbi |
Saudi Arabia Riyal |
Canadian Dollars |
|||||
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
|
Average exchange rate to US Dollars |
0.79 |
0.80 |
7.18 |
7.07 |
3.75 |
3.75 |
1.36 |
1.35 |
Year-end exchange rate to US Dollars |
0.80 |
0.79 |
7.30 |
7.08 |
3.75 |
3.75 |
1.44 |
1.33 |
(i) Transactional Risk
The exposure to exchange rate movements in significant future commercial transactions and cash flows is hedged by using forward foreign exchange contracts. Certain forward foreign exchange contracts
have been designated as hedging instruments of highly probable forecast transactions. Treasury engages with business units to help identify transactional exposures. External hedging activity is then
performed by Treasury on behalf of the business units to ensure that transactional risk is managed appropriately and in accordance with Treasury policy. Exposures are also identified and hedged, if necessary,
on an ad hoc basis, such as when a purchase order in a foreign currency is placed. Currency exposures arise where the cash flows are not in the functional currency of the entity. Exposures arising from
committed long-term projects beyond a 12-month period are also identified.
Hunting PLC
221
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
30. Financial Risk Management
continued
(a) Market Risk: Foreign Exchange Risk
continued
(i) Transactional Risk
continued
The table below shows the carrying values of the Group’s financial instruments at 31 December, including derivative financial instruments, on which exchange differences would potentially be recognised in the
consolidated income statement in the following year.
| Currency of denomination |
||||||||
US |
UAE |
Singapore |
Saudi Arabia |
Chinese |
Other |
|||
Sterling |
Dollars |
Dirham |
Dollars |
Riyal |
Renminbi |
currencies |
Total |
|
At 31 December 2024 |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
Functional currency of Group’s entities: |
||||||||
Sterling |
– |
2.5 |
– |
– |
– |
– |
0.2 |
2.7 |
US Dollars |
(1.3) |
– |
(3.7) |
0.5 |
– |
(40.5) |
1.3 |
(43.7) |
Saudi Riyals |
(0.3) |
(2.0) |
(0.1) |
– |
– |
– |
– |
(2.4) |
Euro |
(0.2) |
3.9 |
– |
– |
– |
– |
(0.2) |
3.5 |
Other currencies |
– |
(1.0) |
– |
– |
– |
– |
– |
(1.0) |
(1.8) |
3.4 |
(3.8) |
0.5 |
– |
(40.5) |
1.3 |
(40.9) |
|
| Currency of denomination |
||||||||
US |
UAE |
Singapore |
Saudi Arabia |
Chinese |
Other |
|||
Sterling |
Dollars |
Dirham |
Dollars |
Riyal |
Renminbi |
currencies |
Total |
|
At 31 December 2023 |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
Functional currency of Group’s entities: |
||||||||
Sterling |
– |
(1.0) |
– |
– |
– |
– |
– |
(1.0) |
US Dollars |
(2.0) |
– |
(1.7) |
(0.6) |
2.2 |
(1.6) |
(0.2) |
(3.9) |
Canadian Dollars |
– |
(0.5) |
– |
– |
– |
– |
– |
(0.5) |
Euro |
(0.2) |
1.1 |
– |
– |
– |
– |
– |
0.9 |
Chinese Renminbi |
– |
(0.5) |
– |
– |
– |
– |
– |
(0.5) |
(2.2) |
(0.9) |
(1.7) |
(0.6) |
2.2 |
(1.6) |
(0.2) |
(5.0) |
|
Financial instruments comprise cash balances, trade and other receivables, accrued revenue, trade and other payables, accrued expenses, finance lease liabilities and intra-Group balances. Derivatives
designated in a cash flow hedge are excluded as fair value gains and losses arising on these are recognised in other comprehensive income.
(ii) Translational Risk
Foreign exchange risk also arises from financial assets and liabilities not denominated in the functional currency of an entity’s operations. Forward foreign exchange contracts are used to manage the exposure
to changes in foreign exchange rates. Where appropriate, hedge accounting is applied to the forward foreign exchange contracts and the hedged item to remove any accounting mismatch.
Foreign exchange risk also arises from the Group’s investments in foreign operations. This has previously been hedged using foreign exchange swaps that have been designated in a net investment hedge
to hedge the foreign currency translation risk. The foreign exchange exposure arising from the translation of its net investments in foreign operations into the Group’s presentation currency of US Dollars
has also previously been managed by designating any borrowings that are not US Dollar denominated as a hedge of the net investment in foreign operations. The foreign exchange exposure primarily arises
from Sterling and Canadian Dollar denominated net investments. The accumulated foreign exchange net pre-tax gains included in the currency translation reserve in respect of net investment hedges at the
beginning and end of the year is $25.0m.
(b) Market Risk: Interest Rate Risk
Variable interest rates on cash at bank, short-term deposits, overdrafts and borrowings expose the Group to cash flow interest rate risk, and fixed interest rates on loans and short-term deposits expose
Hunting PLC
222
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
30. Financial Risk Management
continued
The Group’s credit risk arises from its cash at bank and in hand, money market funds, short-term
deposits, investments, derivative financial instruments, accrued revenue, outstanding trade
receivables, other receivables and contract assets.
At the year-end, the Group had credit risk exposure to a wide range of counterparties. Credit risk
exposure is continually monitored and no individual exposure is considered to be significant in the
context of the ordinary course of the Group’s activities whether through exposure to individual
customers, specific industry sectors and/or regions.
(i) Credit Risk: Total Cash and Bank
Hunting PLC’s Board approves the treasury policies that determine which counterparties can be used.
Due diligence is carried out prior to the authorisation of a bank or financial institution as an approved
counterparty. For banks and financial institutions, exposure limits are set for each approved
counterparty, as well as the types of transactions that may be entered into. Approved institutions that
the Group’s treasury function can invest surplus cash with must all have a minimum A2, P2 or F2
short-term rating from Standard & Poor’s, Moody’s or Fitch rating agencies, respectively.
(2023 – $31.2m) deposited with banks with Fitch short-term ratings of F1 to F1+. Of the remaining
$14.5m (2023 – $14.3m), $5.3m (2023 – $11.6m) was held with one (2023 – two) financial institution
within mainland China which, given the Group’s operations in this jurisdiction, were deemed
necessary. Despite not having formal credit ratings from any of the ratings agencies mentioned above,
an internal assessment determined that the banks’ credit profiles were appropriate for the amounts
held on deposit. There are no formal restrictions on this cash as such; however, prior approval would
be required from various state authorities in China before any cash could be paid offshore. This cash
balance could be used by the Group to service intercompany loans, which total $1.6m at the year-end.
During the year, the treasury function invested surplus cash in-line with its cash management and
investment policies in short-term deposits and money market funds. The use of these deposits and
funds enables the treasury function to diversify its counterparty concentration risk by depositing funds with
various financial institutions and improve the yields on a portion of its surplus cash. The credit ratings of the
financial institutions where the Group’s total cash and bank balances have been invested are listed below:
2024 |
2023 |
|||
Credit rating |
$m |
$m |
||
Cash at bank and in hand |
Fitch |
F1 to F1+ |
63.6 |
31.2 |
Cash at bank and in hand |
n/a |
14.5 |
14.3 |
|
Short-term deposits with less than |
||||
3 months to maturity |
Fitch |
F1 to F1+ |
51.8 |
– |
Money market funds |
Fitch |
AAAmmf |
76.7 |
– |
Derivative financial assets |
Fitch |
AA-(dcr) |
0.4 |
0.5 |
Derivative financial assets |
Fitch |
A+(dcr) |
0.1 |
– |
The credit risk of foreign exchange contracts is calculated before the contract is acquired and
compared to the credit risk limit set for each counterparty. Credit risk is calculated as a fixed
percentage of the nominal value of the instrument.
(ii) Credit Risk: Receivables
The Group makes sales to a large number of different customers; however a significant proportion of
sales are made to service companies in the oil and gas sector. The majority of the Group’s customers
are based in North America. On a quarterly basis, the Group’s entities submit information to the head
office on individual receivables balances greater than $0.2m, on individual receivable balances that
are both greater than $32,000 and 60 days overdue, and on quarterly average receivables balances.
At the year-end, trade receivables of $137.7m (2023 – $179.4m) comprised individual balances greater
than $0.2m, with no individual customer balance representing more than 8% (2023 – 9%) of the
year-end receivables balance of $195.0m (2023 – $204.7m).
The risk of customer default for outstanding trade receivables, accrued revenue and contract assets is
continuously monitored. Credit account limits are set locally by management and are primarily based
on the credit quality of the customer taking into account past experience through trading relationships
and the customer’s financial position. The probability that a customer would default has remained
broadly flat in 2024. The Group used Credit Benchmark software to monitor the creditworthiness and
changing credit profiles of its customers. Credit Benchmark uses a similar ratings framework to the
main credit ratings agencies for classifying the credit quality of a business. However, Credit Benchmark
ratings are based on contributed risk views from leading global financial institutions, including
15 Global Systemically Important Banks domiciled in the US, Continental Europe, Switzerland,
UK, Japan, Canada, Australia and South Africa. The contributions are anonymised, aggregated
and published twice monthly in the form of Credit Consensus Ratings and Aggregate Analytics.
Although in most cases the Credit Benchmark consensus rating of a business is based on a number
of contributing views, there are instances where there is only a single source on which the rating is
based. During 2024, 44% of sales, which is more than $463m (2023 – 38%/$347m) of the Group’s
revenue, were made to customers with a Credit Benchmark investment-grade rating of bbb or higher,
as shown in the table below. This includes customers with a single-source rating, whereby the rating is
based on only a single source rather than a consensus rating which has been derived from a number
of contributing views.
% of Revenue |
||
Credit Benchmark – Credit Consensus Ratings |
2024 |
2023 |
aa |
1 |
8 |
a |
39 |
22 |
bbb |
4 |
8 |
bb |
8 |
7 |
b |
3 |
– |
No rating |
45 |
55 |
Hunting PLC
223
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
30. Financial Risk Management
continued
(c) Credit Risk
continued
(ii) Credit Risk: Receivables
continued
To reduce credit risk exposure from outstanding receivables, the Group has taken out credit insurance
with an external insurer, subject to certain conditions. Details of the impairment of trade and other
receivables can be found in note 18.
(iii) Credit Risk: Other Financial Assets
The Group operates a defined benefit pension scheme in the US, which is unfunded. Contributions
are paid into a separate investment vehicle and invested in a wide portfolio of US mutual funds.
Investments at the year-end amounted to $2.6m (2023 – $2.2m) and are expected to be fully recovered.
The Group has provided Wells Data Labs with $2.5m in convertible financing, the fair value of which
was $2.2m at 31 December 2024 (2023 – $2.2m). The investment is considered to have a low credit
risk, although the credit risk of the debt instrument has increased since the loan was advanced.
(i) Bank Facilities
The Group’s treasury function ensures that there are sufficient committed facilities available to the
Group, with an appropriate maturity profile, to provide operational flexibility and to support investment
in key Group projects.
The Group has sufficient credit facilities to meet both its long- and short-term requirements. The
Group’s treasury function ensures flexibility in funding by maintaining availability under committed
credit facilities. The Group’s credit facilities are provided by a variety of funding sources and total
$432.4m (2023 – $193.8m) at the year-end.
The Group’s undrawn facilities at the year-end were as follows:
2024 |
2023 |
|
$m |
$m |
|
Secured committed facilities |
200.0 |
103.1 |
Unsecured uncommitted facilities |
40.1 |
34.4 |
240.1 |
137.5 |
Secured Committed Facilities: Term Loan and Revolving Credit Facility (“RCF”)
In October 2024, the Group entered into $300m of new committed borrowing facilities to finance
the ongoing working capital requirements of the existing business and to support Hunting’s growth
strategy. The new funding arrangements comprise a $200m RCF and a $100m term loan. These
facilities replace the now cancelled $150m Asset Based Lending (“ABL”) facility, increasing the Group’s
access to committed liquidity and extending the maturity of bank borrowing facilities.
A conventional earnings-based covenant regime governs the new facilities and includes a leverage
test (being the ratio of total net debt to adjusted EBITDA not exceeding 3.0:1) and an interest cover test
(being the ratio of consolidated EBITDA to consolidated net finance charges not being less than 4.0:1).
The RCF has been arranged with an initial tenor of four years, expiring on 16 October 2028, with an
option that allows the Group to extend the contracted maturity date by an additional twelve-month
term. Like the ABL facility, the new RCF contains an accordion feature. This allows the Group to
increase the facility quantum by an additional $100m (subject to further credit approval from the
relevant lenders) enabling an increase of the total RCF to $300m.
The $100m term loan has been arranged with a three-year tenor and pursuant to the conditions
of the facility agreement, was fully drawn on signing of the facilities. After an initial twelve-month grace
period, the term loan is repaid with eight quarterly repayments of $9.4m and a final repayment of
$25.0m in September 2027. On signing of the new facilities, the ABL facility was repaid and cancelled,
with drawings under the new term loan used in part for this purpose.
Management has detailed the wider considerations regarding going concern and future covenant
compliance in the Going Concern Statement on page 111.
In order to support the sizable orders from Kuwait Oil Company received during 2024, the Group
utilises letter of credit discounting arrangements and bank acceptance drafts with financial institutions
to assist with management of the working capital cycle.
Unsecured Uncommitted Facilities
Bank of Jiangsu for CNY80.0m, ICBC for CNY210.0m, HSBC China for CNY540.0m and a final facility
with China Merchants Bank for CNY100.0m. All of these facilities mature in 2025. These facilities,
totalling CNY930.0m ($127.4m; 31 December 2023 – $38.9m), have all been arranged on an
uncommitted, unsecured basis and are only available to the Group’s Chinese subsidiary. Utilisation
of the facilities can occur through cash borrowing or trade finance, including bank acceptance drafts.
Hunting PLC
224
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
30. Financial Risk Management
continued
(d) Liquidity Risk
continued
(ii) Management of Cash
The Group needs to ensure that it has sufficient liquid funds available to support its working capital
and capital expenditure requirements and that adequate liquidity levels are maintained. All subsidiaries
submit weekly cash forecasts to the treasury function to enable it to monitor the Group’s requirements.
A consolidated 12-week forecast, produced weekly, is maintained by the Group’s treasury function,
which monitors long- and short-term liquidity requirements of the Group and also identifies any
unexpected variances week-on-week.
Treasury’s cash management objective is to centrally manage and, where possible, to concentrate
the Group’s cash and bank balances back to the treasury function to ensure that funds are managed
in the best interests of the Group. Short-term cash balances, together with undrawn facilities, enable
the treasury function to manage its day-to-day liquidity risk. Any short-term surplus is invested in
accordance with Board-approved treasury policy. This strategy is subject to legislative and regulatory
constraints in certain jurisdictions such as exchange control restrictions and minimum capital
requirements. Where cash concentration cannot be applied, Group treasury approves all local
banking arrangements, including the opening and closing of bank accounts and the investment
of surplus cash via bank deposits.
Cash Management Arrangements
In respect of the UK business units and head office companies, the treasury function has arranged
a cash concentration structure with HSBC Bank UK whereby, at the close of each business day, any
surplus balances held in certain subsidiaries’ bank accounts are swept to treasury-owned accounts
(“pool header” accounts), with a corresponding adjustment to the intercompany loan receivable,
or payable, between that subsidiary and treasury. Similarly, any end-of-day deficit in the same group
of subsidiary accounts is funded by a cash sweep from the treasury-owned pool header accounts,
and the corresponding intercompany loan is adjusted accordingly. This arrangement enables more
efficient utilisation of UK-based entities’ surplus cash and at the same time allows the treasury function
to meet any short-term funding needs of the UK business units in a more coordinated fashion and
from one single pool of liquidity.
In addition, a similar cash concentration structure has been organised with Wells Fargo Bank, N.A.
in the US, whereby surplus and deficit cash balances are swept to and from a single pool header
account, held by one central US subsidiary, with a corresponding movement in the respective
companies’ intercompany loan balance. Treasury has systems in place that allow for same-day
centralisation of net surplus cash balances in the US to the UK, or indeed to fund any net cash deficit
in the US cash concentration structure. As above, this arrangement allows treasury to efficiently
repatriate surplus operational cash from the US to the UK on a daily basis, if deemed cost effective
to do so, and the most appropriate application of that cash can then be decided upon by treasury.
This arrangement also allows treasury to meet any short-term funding needs of the Group’s US-based
business units from cash resources held in, or borrowing facilities that have been arranged by,
treasury in the UK.
For other regions, such as Canada and Singapore, while formal sweeping arrangements are not in
place, treasury monitors balances on a daily basis and periodically transfers surplus cash to the centre
using similar intercompany loan arrangements as described above. The Group’s interests in China are
subject to the most highly regulated environment of all the Group’s active jurisdictions, in regards to
cash management operations. The free movement of cash both to and from China is a highly
restricted activity and, as a consequence, treasury is unable to arrange intercompany loans in the
same way as it does for the rest of the Group. Treasury has organised banking arrangements with
HSBC in China on behalf of the Group’s Chinese business units and, therefore, has visibility of any
cash balances held with HSBC and transaction data for these accounts via HSBC’s proprietary online
banking system. For balances held at other Chinese banks, treasury has visibility either via its SWIFT
connection or from information supplied by Hunting’s local entity.
Deposits and Investments of Surplus Cash
Short-term deposits and money market funds are held for the purpose of meeting short-term cash
commitments, minimising counterparty concentration risk and improving cash investment returns.
Short-term deposits of surplus cash are made for varying periods of between one day and three
months, depending on the immediate cash requirements of the Group. These deposits earn interest at
the respective short-term deposit rates. The Group has invested surplus cash in money market funds
as they are considered to be highly liquid since cash can be redeemed from each fund on a same-day
basis. The yield on the funds is calculated on the daily performance of the various instruments with
a particular fund.
During the year, the treasury function has invested surplus cash in short-term deposits ($51.8m)
and money market funds ($76.7m) in line with its cash management and investment policies that
would enable a fair return, while maintaining the ability to access the cash easily. At the end of 2023,
no surplus cash was held in deposits or money market funds. The use of these deposits and funds
enables the treasury function to diversify its counterparty concentration risk by depositing funds with
various financial institutions and improve the yields on a portion of its surplus cash. The interest
received and gains made during the year are disclosed in note 8.
Cash at bank earns interest at floating rates based on daily bank deposit rates.
The following tables analyse the expected timings of cash outflows for each of the Group’s non-
derivative financial liabilities. The tables analyse the cash outflows into relevant maturity groupings
based on the remaining period at the balance sheet date to the contractual maturity dates of the
financial liabilities. The amounts disclosed in the tables are the contractual, undiscounted cash flows
and include interest cash flows and other contractual payments, where applicable, so will not always
reconcile with the amounts disclosed in the consolidated balance sheet. The carrying values are the
amounts in the consolidated balance sheet and are the discounted amounts. Balances due within one
year have been included in the maturity analysis at their carrying amounts, as the impact of
discounting is not significant.
Hunting PLC
225
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
30. Financial Risk Management
continued
(d) Liquidity Risk
continued
(iii) Future Cash Flows of Financial Liabilities
continued
2024 | |||||
On demand | Between | ||||
or within | one and | After | Carrying | ||
one year | five years | five years | Total | value | |
$m | $m | $m | $m | $m | |
Non-derivative | |||||
financial liabilities: | |||||
Trade payables | 41.4 | – | – | 41.4 | 41.4 |
Accruals | 22.8 | – | – | 22.8 | 22.8 |
Other payables | 94.8 | – | – | 94.8 | 94.8 |
Lease liabilities | 7.7 | 19.9 | 8.2 | 35.8 | 30.1 |
Bank borrowings secured | 18.2 | 108.5 | – | 126.7 | 100.4 |
Bank overdrafts secured | 1.5 | – | – | 1.5 | 1.5 |
Shareholder loan from | |||||
non-controlling interest | – | – | 3.9 | 3.9 | 3.9 |
Total | 186.4 | 128.4 | 12.1 | 326.9 | 294.9 |
2023 | |||||
On demand | Between | ||||
or within | one and | After | Carrying | ||
one year | five years | five years | Total | value | |
$m | $m | $m | $m | $m | |
Non-derivative | |||||
financial liabilities: | |||||
Trade payables | 62.5 | – | – | 62.5 | 62.5 |
Accruals | 24.2 | – | – | 24.2 | 24.2 |
Other payables | 2.8 | – | – | 2.8 | 2.8 |
Lease liabilities | 8.2 | 16.2 | 10.3 | 34.7 | 28.7 |
Bank borrowings secured | 48.6 | 4.1 | – | 52.7 | 44.9 |
Bank overdrafts secured | 1.4 | – | – | 1.4 | 1.4 |
Shareholder loan from | |||||
non-controlling interest | – | – | 3.9 | 3.9 | 3.9 |
Total | 147.7 | 20.3 | 14.2 | 182.2 | 168.4 |
The Group had no net settled financial liabilities at the year-end (2023 – none).
The table below analyses the Group’s derivative financial instruments, which will be settled on a gross
basis, into maturity groupings based on the period remaining from the balance sheet date to the
contractual maturity date.
The amounts disclosed in the table are the contractual, undiscounted cash flows.
| 2024 | 2023 | |||||
On demand | Between | On demand | Between | |||
or within | one and | or within | one and | |||
one year | five years | Total | one year | five years | Total | |
$m | $m | $m | $m | $m | $m | |
Currency | ||||||
derivatives: | ||||||
Inflows | 276.3 | – | 276.3 | 58.2 | – | 58.2 |
Outflows | (279.7) | – | (279.7) | (57.9) | – | (57.9) |
The Group’s objectives, policies and processes for managing capital are outlined in the Strategic
Report within the Group Funding section on pages 64 and 65. Within this section, the Group provides
a definition of capital, provides details of the external financial covenants imposed, key measures for
managing capital and the objectives for managing capital. Quantitative disclosures are made together
The following sensitivity analysis is intended to illustrate the sensitivity to changes in market variables
on the Group’s financial instruments and show the impact on profit or loss and shareholders’ equity.
Financial instruments affected by market risk include cash at bank and in hand, trade and other
receivables, trade and other payables, lease liabilities, borrowings and derivative financial instruments.
The sensitivity analysis relates to the position as at 31 December 2024. The analysis excludes the
impact of movements in market variables on the carrying value of pension and other post-retirement
obligations, provisions and non-financial assets and liabilities of foreign operations.
The following assumptions have been made in calculating the sensitivity analysis:
• Foreign exchange rate and interest rate sensitivities have an asymmetric impact on the Group’s
results, that is an increase in rates does not result in the same amount of movement as a decrease
in rates;
• For floating rate assets and liabilities, the amount of asset or liability outstanding at the balance
sheet date is assumed to be outstanding for the whole year;
• Fixed-rate financial instruments that are carried at amortised cost are not subject to interest rate risk
for the purpose of this analysis; and
• The carrying values of financial assets and liabilities carried at amortised cost do not change
as interest rates change.
Positive figures represent an increase in profit or equity.
Hunting PLC
226
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
31. Financial Instruments: Sensitivity Analysis
continued
(a) Interest Rate Sensitivity
(i) UK Interest Rates
The sensitivity rate of 1.0% (2023 – 2.0%) for UK interest rates represents management’s assessment
of a reasonably possible change, based on historical volatility and a review of analysts’ research and
banks’ expectations of future interest rates.
The impact on the consolidated income statement, with all other variables held constant, in applying
the sensitivity above results in a $0.5m (2023 – $nil) increase or decrease in post-tax profit for an
increase or decrease in US interest rates. There is no impact on other comprehensive income (“OCI”)
for a change in US interest rates.
(ii) Other Interest Rates
For all other interest rates, there is an immaterial impact on post-tax profit or loss for any reasonably
possible changes in other interest rates, based on historical volatility and a review of analysts’ research
and banks’ expectations of future interest rates. There is no impact on OCI for a change in other
interest rates.
(b) Foreign Exchange Rate Sensitivity
Management has considered the impact of changes to the various foreign exchange rates on the
exposed financial assets and liabilities disclosed in note 30(a)(i). The sensitivity rates selected range
between 2% and 7% and represent management’s assessment of a reasonably possible change,
based on historical volatility and a review of analysts’ research and banks’ expectations of future
foreign exchange rates. There is an immaterial impact on post-tax profit or loss and on OCI for
A number of defined contribution arrangements, which are open to current employees, are operated
across the Group. Employer contributions to these arrangements are charged directly to profit and
(b) Unfunded Defined Benefit Schemes
(i) US Defined Benefit Scheme
The Group operates a cash balance arrangement in the US for certain executives. Members build up
benefits in this arrangement by way of notional contributions and notional investment returns. Actual
contributions are paid into an entirely separate investment vehicle held by the Group, which is used
to pay benefits due from the arrangement when a member retires. Under IAS 19, the cash balance
arrangement is accounted for as an unfunded defined benefit scheme.
The amounts charged to the consolidated income statement during the year were $0.1m
(2023 – $0.2m) reflecting the employer’s current service cost of $0.2m (2023 – $0.2m) charged to
administrative expenses and a net $0.1m credit (2023 – $nil) relating to fair value gains on the listed
equities and mutual funds and interest charged on the benefit obligations.
Movements in the present value of the obligation for the unfunded defined benefit US deferred
compensation plan
2024 |
2023 |
|
$m |
$m |
|
Present value of the obligation at the start of the year |
2.2 |
1.9 |
Current service cost (equal to the notional contributions) |
0.2 |
0.2 |
Contributions by plan participants |
0.2 |
– |
Remeasurement – excess of notional investment returns |
||
over interest cost |
0.1 |
– |
Interest on benefit obligations |
0.1 |
0.1 |
Benefits paid |
(0.2) |
– |
Present value of the obligation at the end of the year |
2.6 |
2.2 |
The obligation of $2.6m (2023 – $2.2m) is presented in the consolidated balance sheet in non-current
payables (note 22).
(ii) Middle East Defined Benefit Schemes
The Group operates two unfunded defined benefit pension schemes in Dubai and Saudi Arabia,
whereby local law requires payment to be made to an employee when they leave their employment
with the business unit based on their salary and number of years of service. The combined obligation
at the year-end was $1.1m (2023 – $0.8m), with $0.3m (2023 – $0.1m) recognised in the consolidated
The Company’s share capital comprises a single class of Ordinary shares, which are classified as equity.
Ordinary |
Ordinary |
||
shares of |
shares of |
Share |
|
25p each |
25p each |
premium |
|
Number |
$m |
$m |
|
At 1 January 2023 and 2024 |
164,940,082 |
66.5 |
153.0 |
Disposal of treasury shares |
– |
– |
0.1 |
At 31 December 2024 |
164,940,082 |
66.5 |
153.1 |
There are no restrictions attached to any of the Ordinary shares in issue and all Ordinary shares
carry equal voting rights. The rights attached to the Company’s Ordinary shares are summarised
on page 168. All of the Ordinary shares in issue are fully paid.
Benefit Trust. Details of the carrying amount are set out in note 35.
During 2024, the Company sold treasury shares where the proceeds exceeded the purchase price
Hunting PLC
227
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
| 2024 |
||||||
Share-based |
Currency |
Capital |
||||
Merger reserve |
payments reserve |
translation reserve |
redemption reserve |
Hedge reserve |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
At 1 January 2024 |
– |
19.9 |
(12.1) |
0.8 |
0.1 |
8.7 |
Exchange adjustments |
– |
– |
(4.0) |
– |
– |
(4.0) |
Share options and awards: |
||||||
– value of employee services |
– |
12.3 |
– |
– |
– |
12.3 |
– discharge |
– |
(9.6) |
– |
– |
– |
(9.6) |
Fair value gains and losses: |
||||||
– losses arising on cash flow hedges during the year |
– |
– |
– |
– |
(0.8) |
(0.8) |
– gains arising on cash flow hedges transferred to initial carrying value of hedged items |
– |
– |
– |
– |
(0.2) |
(0.2) |
– gains arising on cash flow hedges reclassified to profit or loss |
– |
– |
– |
– |
(0.2) |
(0.2) |
– taxation |
– |
– |
– |
– |
0.2 |
0.2 |
At 31 December 2024 |
– |
22.6 |
(16.1) |
0.8 |
(0.9) |
6.4 |
| Restated i |
||||||
| 2023 |
||||||
Share-based |
Currency |
Capital |
||||
Merger reserve |
payments reserve |
translation reserve |
redemption reserve |
Hedge reserve |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
At 1 January 2023 |
11.8 |
15.9 |
(13.0) |
0.8 |
0.3 |
15.8 |
Exchange adjustments |
– |
– |
3.6 |
– |
– |
3.6 |
Share options and awards: |
||||||
– value of employee services |
– |
12.3 |
– |
– |
– |
12.3 |
– discharge |
– |
(8.3) |
– |
– |
– |
(8.3) |
Fair value gains and losses: |
||||||
– losses arising on cash flow hedges during the year |
– |
– |
– |
– |
(0.3) |
(0.3) |
– losses arising on cash flow hedges transferred to initial carrying value of hedged items |
– |
– |
– |
– |
0.3 |
0.3 |
– gains arising on cash flow hedges reclassified to profit or loss |
– |
– |
– |
– |
(0.3) |
(0.3) |
– taxation |
– |
– |
– |
– |
0.1 |
0.1 |
Transfer between reserves (note 35) |
(11.8) |
– |
(2.7) |
– |
– |
(14.5) |
At 31 December 2023 |
– |
19.9 |
(12.1) |
0.8 |
0.1 |
8.7 |
i.
Comparative balances have been restated, see note 1.
The merger reserve comprises the proceeds received, net of transaction costs, in excess of the nominal value of the Ordinary shares issued by way of the share placing completed on 31 October 2016. In
accordance with section 612 of the Companies Act 2006, the premium was credited to the merger reserve, instead of to the share premium account, because the share placing was pursuant to the Company
securing over 90% of another entity. The proceeds were used to pay down the Group’s borrowings at that time. The reserve is currently non-distributable and is transferred to distributable retained earnings
when the proceeds meet the definition of qualifying consideration. During 2023, the remaining balance of $11.8m was transferred from the merger reserve to retained earnings. This portion of the reserve was
considered to be realised, as the equivalent amount of the proceeds from the share placing in 2016 met the definition of qualifying consideration.
Hunting PLC
228
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
34. Other Components of Equity
continued
The share-based payments reserve represents the Group’s obligation to settle share-based awards
issued to its employees. When employees exercise their awards, the portion of the share-based
payments reserve which represents the share-based payment charge for those awards is transferred
to retained earnings and the Group discharges its obligation.
The currency translation reserve contains the accumulated foreign exchange differences that arise
from the translation of the financial statements of the Group’s foreign operations into US Dollars when
the Group’s entities are consolidated, together with exchange differences arising on foreign currency
loans used to finance foreign currency net investments. The currency translation reserve also includes
the accumulated foreign exchange net gains in respect of net investment hedges, which will be
released to the income statement on the disposal or dissolution of the relevant subsidiary. During
2023, there was a transfer of $2.7m between the currency translation reserve and retained earnings.
The capital redemption reserve is a statutory, non-distributable reserve into which amounts are
transferred following the purchase of the Company’s own shares out of distributable profits.
The hedge reserve represents the accumulated fair value gains and losses in relation to the spot
component of forward foreign exchange contracts designated in a cash flow hedge that were taken
out to hedge the purchase of an asset, such as property, plant and equipment or inventory, in a
foreign currency. The fair value gain or loss accumulated in the hedge reserve is transferred to the
35. Retained Earnings
Restated i | ||
2024 | 2023 | |
$m | $m | |
At 1 January | 718.6 | 609.3 |
(Loss)/profit for the year | (28.0) | 110.3 |
Remeasurement of defined benefit pension schemes net of tax (note 32) | (0.1) | – |
Dividends paid to Hunting PLC shareholders | (16.7) | (15.0) |
Treasury shares: | ||
– purchase of treasury shares | (14.2) | (9.0) |
– proceeds on disposal of treasury shares | 0.2 | 0.3 |
Share options and awards: | ||
– discharge | 9.0 | 7.9 |
– taxation | 2.0 | 0.3 |
Transfer between reserves (note 34) | – | 14.5 |
At 31 December | 670.8 | 718.6 |
i.
Comparative balances have been restated, see note 1.
2024 | 2023 | |
$m | $m | |
Cost: | ||
At 1 January | (22.2) | (19.2) |
Purchase of treasury shares | (14.2) | (9.0) |
Cost of treasury shares disposed | 7.9 | 6.0 |
At 31 December | (28.5) | (22.2) |
At 31 December 2024, 7,191,845 Ordinary shares were held by the Employee Benefit Trust
(2023 – 6,591,918). The Company purchased 2,917,742 (2023 – 2,935,096) additional treasury shares
during the year for $14.2m (2023 – $9.0m). The loss on disposal of treasury shares during the year,
2024 | 2023 | |||
Cents | Cents | |||
per share | $m | per share | $m | |
Ordinary dividends: | ||||
2023 final dividend | 5.0 | 8.0 | – | – |
2024 interim dividend | 5.5 | 8.7 | – | – |
2022 final dividend | – | – | 4.5 | 7.1 |
2023 interim dividend | – | – | 5.0 | 7.9 |
16.7 | 15.0 | |||
A final dividend for 2024 of 6.0 cents per share has been proposed by the Board, amounting to an
estimated distribution of $9.5 m. The proposed final dividend is subject to approval by the shareholders
at the Annual General Meeting to be held on 16 April 2025 and has not been provided for in these
financial statements. If approved, the dividend will be paid in Sterling on 9 May 2025, to shareholders
on the register on 11 April 2025, and the Sterling value of the dividend payable per share will be fixed,
and announced approximately two weeks prior to the payment date, based on the average spot
exchange rate over the three business days preceding the announcement date. Guidance on the
Company’s position on declaring and paying future dividends is provided within the Strategic Report
Hunting PLC
229
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
(a) 2009 Performance Share Plan (“PSP”)
(i) Time-based Awards and Options
The Company granted nil-cost, time-based share awards and options under the PSP between 2009
and 2013. Annual awards were made to employees, subject to continued employment during the
vesting period. There were no performance conditions attached. The final grant under the PSP
occurred in 2013 and vested in 2016 and option holders had seven years in which to exercise their
vested awards. Share awards can only be exercised by the employees to whom they were granted.
The PSP was replaced by the 2014 Hunting Performance Share Plan following shareholder approval
at the Annual General Meeting (“AGM”) of the Company on 16 April 2014. Details of the time-based
share option movements during the year are as follows:
2024 |
2023 |
|
Number of |
Number of |
|
shares |
shares |
|
Outstanding at the beginning of the year |
– |
1,001 |
Vested and exercised during the year |
– |
(1,001) |
Outstanding and exercisable at the end of the year |
– |
– |
The weighted average share price at the date of exercise during 2023 was 332.0 pence.
There are no time-based PSP awards or options outstanding at 31 December 2024 and there was no
fair value charge to the consolidated income statement attributable to the time-based PSP (2023 – $nil).
(b) 2014 Hunting Performance Share Plan (“HPSP”)
The Company granted share awards annually to executive Directors and senior employees under
the rules of the 2014 HPSP between 2014 and 2023. Awards were granted as either performance
or time-based options or awards at nil cost under the HPSP and can only be exercised by the
employees to whom they were granted. Share options, which are subject to tax on exercise, are
granted to UK employees. Share option holders have seven years in which to exercise their vested
awards. Share awards, which are subject to tax on vesting, are granted to employees resident in
some other tax jurisdictions.
(i) Performance-based Awards
The performance-based HPSP awards, which were granted to the executive Directors and senior
employees, are divided into five tranches of differing proportions. Each tranche is subject to a
three-year vesting period and Company performance is measured against various performance
metrics, as shown in the table below.
The award weightings for the years 2022 and 2023 are in the table below.
Award |
Award |
|
weighting |
weighting |
|
2023 |
2022 |
|
Performance measure |
% |
% |
Total Shareholder Return (“TSR”) |
||
of a bespoke comparator group |
20 |
25 |
Adjusted diluted earnings per share (“EPS”) |
20 |
20 |
Return on average capital employed (“ROCE”) |
25 |
20 |
Free cash flow (“FCF”) |
20 |
20 |
Balanced strategic scorecard – non-financial KPIs |
||
comprising Quality and Safety performance |
15 |
15 |
Details of the performance-based HPSP award movements during the year are set out below:
2024 |
2023 |
|
Number of |
Number of |
|
shares |
shares |
|
Outstanding at the beginning of the year |
7,829,492 |
7,641,325 |
Granted during the year to executive Directors |
– |
1,231,216 |
Granted during the year to senior employees |
– |
1,263,083 |
Vested and exercised during the year |
(755,432) |
(178,211) |
Lapsed during the year |
(1,648,749) |
(2,127,921) |
Outstanding at the end of the year |
5,425,311 |
7,829,492 |
Hunting PLC
230
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
37. Share-based Payments
continued
(b) 2014 Hunting Performance Share Plan (“HPSP”)
continued
(i) Performance-based Awards
continued
Details of the performance-based HPSP awards outstanding at 31 December 2024 are as follows:
2024 | 2023 | |||
Number of | Number of | Normal | ||
shares | shares | vesting date | Expiry date | |
Date of grant: | ||||
3 March 2020 – options | – | 1,566 | 3 March 2023 | 3 March 2030 |
4 March 2021 – options | – | 365,499 | 4 March 2024 | 4 March 2031 |
4 March 2021 – awards | – | 1,838,743 | 4 March 2024 | – |
4 March 2022 – options | 505,420 | 505,420 | 4 March 2025 | 4 March 2032 |
4 March 2022 – awards | 2,636,297 | 2,662,151 | 4 March 2025 | – |
6 March 2023 – options | 425,229 | 425,229 | 6 March 2026 | 6 March 2033 |
6 March 2023 – awards | 1,858,365 | 2,030,884 | 6 March 2026 | – |
Outstanding at the end | ||||
of the year | 5,425,311 | 7,829,492 | ||
Exercisable at the end | ||||
of the year | – | 1,566 | ||
Weighted average remaining | ||||
contractual life of options | ||||
outstanding at the end | ||||
of the year | 7.64 years | 8.25 years |
In 2024, a total of 755,432 awards were exercised (2023 – 178,211). The weighted average share price
at the date of exercise during 2024 was 310.8 pence (2023 – 230.4 pence).
(ii) Time-based Awards
The Company also grants time-based share awards annually to senior employees under the 2014 HPSP,
which are subject to a three-year vesting period. Annual awards of shares may be made to employees
subject to continued employment during the vesting period. There are no performance conditions
attached. Details of the time-based HPSP award movements during the year are set out below:
2024 | 2023 | |
Number of | Number of | |
shares | shares | |
Outstanding at the beginning of the year | 5,698,418 | 5,382,246 |
Granted during the year | – | 2,143,469 |
Vested and exercised during the year | (1,492,105) | (1,434,673) |
Lapsed during the year | (278,458) | (392,624) |
Outstanding at the end of the year | 3,927,855 | 5,698,418 |
In 2024, a total of 1,492,397 awards were exercised (2023 – 1,434,673). The weighted average share
price at the date of exercise during 2024 was 316.1 pence (2023 – 251.1 pence).
Details of the time-based HPSP awards outstanding at 31 December 2024 are as follows:
2024 | 2023 | |||
Number of | Number of | Normal | ||
shares | shares | vesting date | Expiry date | |
Date of grant: | ||||
11 March 2016 – options | – | 1,411 | 11 March 2019 | 11 March 2026 |
3 March 2017 – options | – | 1,859 | 3 March 2020 | 3 March 2027 |
19 April 2018 – options | 2,816 | 4,341 | 19 April 2021 | 19 April 2028 |
21 March 2019 – options | 5,719 | 13,384 | 21 March 2022 | 21 March 2029 |
3 March 2020 – options | 19,429 | 68,328 | 3 March 2023 | 3 March 2030 |
4 March 2021 – options | 31,895 | 219,433 | 4 March 2024 | 4 March 2031 |
4 March 2021 – awards | 2,105 | 1,005,865 | 4 March 2024 | – |
4 March 2022 – options | 347,465 | 363,760 | 4 March 2025 | 4 March 2032 |
4 March 2022 – awards | 1,698,214 | 1,961,409 | 4 March 2025 | – |
6 March 2023 – options | 342,346 | 356,321 | 6 March 2026 | 6 March 2033 |
6 March 2023 – awards | 1,477,866 | 1,702,307 | 6 March 2026 | – |
Outstanding at the end | ||||
of the year | 3,927,855 | 5,698,418 | ||
Exercisable at the end | ||||
of the year | 131,012 | 89,323 | ||
Weighted average remaining | ||||
contractual life of options | ||||
outstanding at the end | ||||
of the year | 7.51 years | 8.14 years |
Hunting PLC
231
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
37. Share-based Payments
continued
(b) 2014 Hunting Performance Share Plan (“2014 HPSP”)
continued
(iii) Fair Value of HPSP Awards
The fair value of awards granted under the 2014 HPSP was calculated using two separate models:
(1)
The fair value of awards subject to a market-related performance condition, specifically Company
performance against the TSR of a bespoke peer group, was calculated using the Stochastic pricing
model (also known as the “Monte Carlo” model).
The assumptions used in this model were as follows:
2023 | |
Date of grant/valuation date | 6 March 2023 |
Weighted average share price at grant | 277.0p |
Exercise price | nil |
Expected dividend yield | nil |
Expected volatility | 54.8% |
Risk-free rate | 3.84% |
Expected life | 3 years |
Weighted average fair value at grant | 156.6p |
(2)The fair value of performance-based awards not subject to a market-related performance condition
include the EPS, ROCE, FCF and balanced strategic scorecard performance targets, and the
time-based HPSP awards, with the fair value being calculated using the Black-Scholes pricing model.
The assumptions used in this model were as follows:
2023 | |
Date of grant/valuation date | 6 March 2023 |
Weighted average share price at grant | 277.0p |
Exercise price | nil |
Expected dividend yield | nil |
Expected volatility | 54.8% |
Risk-free rate | 3.84% |
Expected life | 3 years |
Weighted average fair value at grant | 277.0p |
The methods used to calculate the assumptions are described on page 234.
(c) Cash Conditional Share Awards 2014 HPSP
The Company granted cash conditional awards annually to employees in certain overseas tax
jurisdictions. These awards are aligned with the rules of the 2014 HPSP and are subject to employees’
continued employment during the vesting period. Awards are granted at nil cost and are settled at the
closing mid-market price of a Hunting PLC Ordinary share on the third anniversary of the date of grant.
(i) Performance-based Awards
The performance-based cash conditional awards to senior employees are divided into five tranches of
differing proportions. Each tranche is subject to a three-year vesting period and Company performance
is measured against various performance measures as shown in the table below.
The award weightings for the 2022 and 2023 awards were as follows:
Award | Award | |
weighting | weighting | |
2023 | 2022 | |
Performance measure | % | % |
TSR of a bespoke comparator group (“TSR”) | 20 | 25 |
Adjusted diluted earnings per share (“EPS”) | 20 | 20 |
Return on average capital employed (“ROCE”) | 25 | 20 |
Free cash flow (“FCF”) | 20 | 20 |
Strategic scorecard – non-financial KPIs | ||
comprising Quality and Safety performance | 15 | 15 |
Details of the cash conditional performance-based award movements during the year are set out below:
2024 | 2023 | |
Number of | Number of | |
shares | shares | |
Outstanding at the beginning of the year | 540,150 | 546,402 |
Granted during the year | – | 158,991 |
Vested and exercise during the year | (60,501) | (12,392) |
Lapsed during the year | (129,191) | (152,851) |
Outstanding at the end of the year | 350,458 | 540,150 |
Hunting PLC
232
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
37. Share-based Payments
continued
(c) Cash Conditional Share Awards 2014 HPSP
continued
(i) Performance-based Awards
continued
Details of the cash conditional performance-based awards outstanding at 31 December 2024
are as follows:
2024 | 2023 | ||
Number of | Number of | Normal | |
shares | shares | vesting date | |
Date of grant: | |||
4 March 2021 | – | 176,897 | 4 March 2024 |
4 March 2022 | 202,235 | 204,262 | 4 March 2025 |
6 March 2023 | 148,223 | 158,991 | 6 March 2026 |
Outstanding at the end of the year | 350,458 | 540,150 |
The fair value of the cash conditional performance-based awards is calculated at the date of grant
using the same assumptions and model as the fair value of the performance-based awards not
subject to a market-related condition (see 37(b)(iii) above for 2023 grant). The weighted average fair
value of the award at 31 December 2023 was 244.0 pence (2023 – 295.5 pence).
(ii) Time-based Awards
The Company also grants time-based cash conditional awards annually, which are subject to a
three-year vesting period. Annual cash awards may be made to employees subject to continued
employment during the vesting period. There are no performance conditions attached.
Details of the cash conditional time-based award movements during the year are set out below:
2024 | 2023 | |
Number of | Number of | |
shares | shares | |
Outstanding at the beginning of the year | 706,822 | 532,437 |
Granted during the year | – | 265,816 |
Vested and exercised during the year | (116,097) | (89,036) |
Lapsed during the year | (25,833) | (2,395) |
Outstanding at the end of the year | 564,892 | 706,822 |
The weighted average share price at the date of exercise during 2024 was 318.1 pence
(2023 – 282.0 pence).
Details of the cash conditional time-based awards outstanding at 31 December 2024 are as follows:
2024 | 2023 | ||
Number of | Number of | Normal | |
shares | shares | vesting date | |
Date of grant: | |||
4 March 2021 | 7,043 | 117,837 | 4 March 2024 |
4 March 2022 | 313,596 | 325,564 | 4 March 2025 |
6 March 2023 | 244,253 | 263,421 | 6 March 2026 |
Outstanding at the end of the year | 564,892 | 706,822 | |
Exercisable at the end of the year | 40,319 | – |
The fair value of the cash conditional awards is calculated at the date of grant using the same
assumptions and model as the fair value of performance-based awards not subject to a market-related
performance condition (see 37(b)(iii) above for 2023 grant). The weighted average fair value of the
award at 31 December 2024 was 289.0 pence (2023 – 295.5 pence).
(d) 2024 Hunting Performance Share Plan (“HPSP”)
The Company grants share awards annually to executive Directors and senior employees under the
rules of the 2024 HPSP, following shareholder approval at the Annual General Meeting (“AGM”) of the
Company on 17 April 2024. Awards are granted as either performance or time-based awards at nil
cost under the HPSP and can only be exercised by the employees to whom they were granted.
(i) Performance-based Awards
The performance-based HPSP awards granted to the executive Directors and senior employees
are divided into five tranches of differing proportions. Each tranche is subject to a three-year vesting
period and Company performance is measured against various performance metrics, as shown
in the table below.
The performance period for awards granted on 18 April 2024 under the HPSP is 1 January 2024
to 31 December 2026. The vesting date of the 2024 award is 18 April 2027.
The award weightings for the 2024 awards are as follows:
Award | |
weighting | |
2024 | |
Performance measure | % |
Total Shareholder Return (“TSR”) | |
of a bespoke comparator group | 30 |
Return on average capital employed (“ROCE”) | 25 |
Adjusted diluted earnings per share (“EPS”) | 15 |
Free cash flow (“FCF”) | 15 |
Strategic scorecard – non-financial KPIs | |
comprising Quality and Safety performance | 15 |
Hunting PLC
233
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
37. Share-based Payments
continued
(d) 2024 Hunting Performance Share Plan (“HPSP”)
continued
(i) Performance-based Awards
continued
Details of the performance-based HPSP award movements during the year are set out below:
2024 | |
Number of | |
shares | |
Outstanding at the beginning of the year | – |
Granted during the year to executive Directors | 820,963 |
Granted during the year to senior employees | 1,085,471 |
Lapsed during the year | (149,050) |
Outstanding at the end of the year | 1,757,384 |
Details of the performance-based HPSP awards outstanding at 31 December 2024 are as follows:
2024 | |||
Number of | Normal | ||
shares | vesting date | Expiry date | |
Date of grant: | |||
18 April 2024 – awards | 1,757,384 | 18 April 2027 | – |
Outstanding at the end of the year | 1,757,384 | ||
Exercisable at the end of the year | – |
In 2024, no awards were exercised.
(ii) Time-based Awards
The Company also grants time-based share awards annually to senior employees under the HPSP,
which are subject to a three-year vesting period. Annual awards of shares may be made to employees
subject to continued employment during the vesting period. There are no performance conditions
attached. Details of the time-based HPSP award movements during the year are set out below:
2024 | |
Number of | |
shares | |
Outstanding at the beginning of the year | – |
Granted during the year | 1,993,209 |
Vested and exercised during the year | (3,662) |
Lapsed during the year | (157,924) |
Outstanding at the end of the year | 1,831,623 |
In 2024, a total of 3,662 awards were exercised. The weighted average share price at the date
of exercise during 2024 was 392.2 pence.
Details of the time-based HPSP awards outstanding at 31 December 2024 are as follows:
2024 | |||
Number of | Normal | ||
shares | vesting date | Expiry date | |
Date of grant: | |||
18 April 2024 – awards | 1,831,623 | 18 April 2027 | – |
Outstanding at the end of the year | 1,831,623 | ||
Exercisable at the end of the year | 1,991 |
(iii) Fair Value of HPSP Awards
The fair value of awards granted under the HPSP is calculated using two separate models:
(1)
The fair value of awards subject to a market-related performance condition, specifically Company
performance against the TSR of a bespoke peer group, has been calculated using the Stochastic
pricing model (also known as the “Monte Carlo” model).
The assumptions used in this model were as follows:
2024 | |
Date of grant/valuation date | 18 April 2024 |
Weighted average share price at grant | 354.0p |
Exercise price | nil |
Expected dividend yield | nil |
Expected volatility | 50.82% |
Risk-free rate | 4.35% |
Expected life | 3 years |
Weighted average fair value at grant | 274.37p |
Hunting PLC
234
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
37. Share-based Payments
continued
(d) 2024 Hunting Performance Share Plan (“HPSP”)
continued
(iii) Fair Value of HPSP Awards
continued
(2)The fair value of performance-based awards not subject to a market-related performance condition
include the EPS, ROCE, FCF and balanced strategic scorecard performance targets, and the
time-based HPSP awards, with the fair value being calculated using the Black-Scholes pricing model.
The assumptions used in this model were as follows:
2024 | |
Date of grant/valuation date | 18 April 2024 |
Weighted average share price at grant | 354.0p |
Exercise price | nil |
Expected dividend yield | nil |
Expected volatility | 50.82% |
Risk-free rate | 4.35% |
Expected life | 3 years |
Weighted average fair value at grant | 354.0p |
The methods to calculate the assumptions for both models are:
• The expected volatility was calculated using historic weekly volatility, equal in length to the remaining
portion of the performance period at the date of grant;
• The expected life of the award has been calculated commensurate with the vesting period;
• The risk-free rate is based on the zero coupon UK government bond yield commensurate with
the vesting period prevailing at the date of grant;
• Participants are entitled to a dividend equivalent over the number of shares that make up their
award. It is accumulated over the vesting period and released subject to the achievement of the
performance conditions. This is factored into the fair value calculation and as a result the dividend
yield assumption is set to zero; and
• The initial accounting charge of the performance-based HPSP awards granted under the HPSP
incorporates an estimate of the number of shares that are expected to lapse for those participants
who cease employment during the vesting period. The estimate of the expected forfeiture rate is
5% per annum. The subsequent accounting charge includes an adjustment to the initial accounting
charge to allow for actual lapses rather than estimated lapses.
(e) Cash Conditional Share Awards 2024 HPSP
The Company also grants cash conditional awards annually to employees in certain overseas tax
jurisdictions. These awards are aligned with the rules of the 2024 HPSP and are subject to employees
continued employment during the vesting period. Awards are granted at nil cost and are settled at the
closing mid-market price of a Hunting PLC Ordinary share on the third anniversary of the date of grant.
(i) Performance-based Awards
The performance-based cash conditional awards to senior employees are divided into five tranches of
differing proportions. Each tranche is subject to a three-year vesting period and Company performance
is measured against various performance measures as shown in the table below. The performance
period for the 2024 awards is 1 January 2024 to 31 December 2026.
The award weightings for the 2024 awards are shown in the table below:
Award | |
weighting | |
2024 | |
Performance measure | % |
TSR of a bespoke comparator group | 30 |
Return on average capital employed (“ROCE”) | 25 |
Adjusted diluted earnings per share (“EPS”) | 15 |
Free cash flow (“FCF”) | 15 |
Balanced strategic scorecard – non-financial KPIs | |
comprising Quality and Safety performance | 15 |
Details of the cash conditional performance-based award movements during the year are set out below:
2024 | |
Number of | |
shares | |
Outstanding at the beginning of the year | – |
Granted during the year | 126,120 |
Lapsed during the year | (16,662) |
Outstanding at the end of the year | 109,458 |
Hunting PLC
235
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
37. Share-based Payments
continued
(e) Cash Conditional Share Awards 2024 HPSP
continued
(i) Performance-based Awards
continued
Details of the cash conditional performance-based awards outstanding at 31 December 2024
are as follows:
2024 |
||
Number of |
Normal |
|
shares |
vesting date |
|
Date of grant: |
||
18 April 2024 |
109,458 |
18 April 2027 |
Outstanding at the end of the year |
109,458 |
The fair value of the cash conditional performance-based awards is calculated at the date of grant
using the same assumptions and model as the fair value of the performance-based awards not
subject to a market-related condition (see 37(d)(iii) above). The weighted average fair value of the award
at 31 December 2024 was 86.7 pence.
(ii) Time-based Awards
The Company also grants time-based cash conditional awards annually, which are subject to a
three-year vesting period. Annual cash awards may be made to employees subject to continued
employment during the vesting period. There are no performance conditions attached.
Details of the cash conditional time-based award movements during the year are set out below:
2024 |
|
Number of |
|
shares |
|
Outstanding at the beginning of the year |
– |
Granted during the year |
223,353 |
Vested and exercised during the year |
(1,419) |
Lapsed during the year |
(21,722) |
Outstanding at the end of the year |
200,212 |
The weighted average share price at the date of exercise during 2024 was 406.0 pence.
Details of the cash conditional time-based awards outstanding at 31 December 2024 are as follows:
2024 |
||
Number of |
Normal |
|
shares |
vesting date |
|
Date of grant: |
||
18 April 2024 |
200,212 |
18 April 2027 |
Outstanding at the end of the year |
200,212 |
|
Exercisable at the end of the year |
3,407 |
The fair value of the cash conditional awards is calculated at the date of grant using the same
assumptions and model as the fair value of performance-based awards not subject to a market-related
performance condition (see 37(d)(iii) above). The weighted average fair value of the award at
31 December 2024 was 289.0 pence.
(f) Amounts Included in the Accounts
The charge to the consolidated income statement attributable to the cash conditional share awards
is $1.8m (2023 – $1.2m) and the total charge attributable to the equity-settled awards is $12.3m
(2023 – $12.3m). The total charge to the consolidated income statement for the year for share-based
payments is $14.1m (2023 – $13.5m), see note 7. The total liability in relation to the cash-settled awards
included in accruals at the year-end is $2.8m (2023 – $1.8m), of which $nil (2023 – $nil) related to
Hunting PLC
236
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
The following related-party transactions took place between wholly-owned subsidiaries of the Group
and associates and joint ventures during the year:
2024 |
2023 |
|
$m |
$m |
|
Additional investment in Cumberland (note 16) |
(0.9) |
(1.6) |
Revenue from sales to joint ventures |
4.2 |
0.6 |
Dividends received from Tianjin Huaxin (note 16) |
– |
0.6 |
Year-end balances: |
||
Shareholder loan from non-controlling interest note 25) |
(3.9) |
(3.9) |
The outstanding balances at the year-end are unsecured and have no fixed date for repayment.
During the year, revenue of $4.3m (2023 – $9.2m) was generated from sales to BestLink Tube Pte.
Ltd., the minority interest holder in Hunting Energy Services (China) Pte. Ltd. Additionally, revenue
of $2.1m (2023 – $3.0m) was recognised from sales to Jindal SAW, the Indian joint venture partner.
interests in associates, joint ventures and subsidiaries are set out in notes C14 and C15 of the
Committee. Details of their compensation are disclosed in note 7. The Hunting PLC Directors and the
members of the Executive Committee had no material transactions other than as a result of their
Hunting PLC is the parent company of the Hunting PLC Group. The Company is listed on the London
Stock Exchange, with none of the shareholders owning more than 20% of the issued share capital
of the Company (see page 169). Accordingly, the Directors do not consider there to be an ultimate
(a) Rival divestment
On 3 March 2025, the Group sold its investment in associate, Rival Downhole Tools LC, for
consideration of $13.1m. Hunting received $12.0m cash at closing and will receive a further $1.1m
contingent on the completion and outcome of any outstanding matters, which is expected to be within
12 months. The sale had no impact on the carrying value of Rival at 31 December 2024.
(b) EMEA restructuring
On 14 January 2025, the Group announced that a major restructuring of the EMEA operating segment
had commenced. The restructuring followed a detailed review of the outlook for the Group’s European
operations, which took into account the confirmation of the tax regime of the UK North Sea oil and
gas industry and the parallel strategy of the UK government to decarbonise its energy supply. Total
cost savings are expected to be in the region of up to c.$10m, including a contribution from a review
The Group’s material accounting policies are described below:
• The Group financial statements include the results of the Company and its subsidiaries, together
with its share of associates and joint ventures.
• Subsidiaries are consolidated from the date on which control is transferred to the Group and are
de-consolidated from the date control ceases.
• The Group uses the acquisition method of accounting for business combinations. Consequently,
the consideration is determined as the fair value of the net assets transferred to the vendor and
includes an estimate of any contingent consideration. The net assets acquired are also measured
at their respective fair values for initial recognition purposes on the acquisition date, unless stated as
an exception to this in IFRS 3.
• Acquisition-related costs arising on business combinations are expensed to the consolidated
(i) Revenue from Contracts with Customers
• Revenue is recognised as performance obligations are satisfied when control of promised goods
or services is transferred to the customer and is measured at the amount that reflects the
consideration to which the Group expects to be entitled in exchange for those goods or services.
• For each performance obligation within a contract, the Group determines whether it recognises revenue:
1. Wholly at a single point in time when the Group has completed its performance obligation; or
2. Piecemeal over time during the period that control incrementally transfers to the customer while
the good is being manufactured or the service is being performed.
• Hunting’s activities that require revenue recognition over time comprise:
1. The supply of goods that are specifically designed for, and restricted to, the use of a particular
customer, and for which Hunting has an enforceable right to payment for the work completed to
date, for example, the design and manufacture of bespoke products such as titanium stress joints;
2. The provision of services in which Hunting creates or enhances an asset that the customer controls
as the asset is created or enhanced, such as the lathing of a thread onto the ends of customer-owned
plain-end pipe and assembling or welding components that are owned by the customer; and
3. The provision of services in which the customer obtains the benefit while the service is being
performed, such as the storage and management services of customer-owned products.
Hunting PLC
237
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
40. Material Accounting Policies
continued
(b) Revenue
continued
(i) Revenue from Contracts with Customers
continued
• In respect of revenue that is recognised over time, Hunting uses an input method for measuring the
progress towards completion of its performance obligations and consequently for measuring the
amount of revenue that is recognised. Specifically, revenue is recognised in proportion to the total
expected consideration that mirrors the costs incurred to date relative to the total expected costs
to complete the performance obligation. This method is considered to be the most appropriate
as the inclusion of all costs, being materials, labour and direct overheads, best reflects the activities
required in performing the promise to the customer.
• Hunting’s activities that require revenue recognition at a point in time comprise:
1. The sale of goods that are not specifically designed for use by one particular customer. These
products include tubulars acquired by Hunting as plain-end pipe on which lathing work has been
applied and which are resold as threaded pipe; and
2. The manufacture of goods that are specifically designed for one particular customer but for which
Hunting does not have an enforceable right to payment for the work completed to date.
• In determining the point in time in which control is transferred to customers and revenue is
recognised, the Group evaluates all relevant facts and circumstances.
• The events that trigger the recognition of revenue at a point in time are most commonly: (i) delivery
of the product in accordance with the contractual terms, or (ii) when confirming shipping
documents, which indicate transfer of legal title and an ability to direct the goods, are made
available to a customer, before which the Group retains the ability to direct the use of, and obtain,
substantially all of the remaining benefits from, the goods, or (iii) when the product is made available
to the customer for collection.
• When revenue from a customer is recognised, the amount is reported on the balance sheet as a
contract asset if the performance obligation is incomplete as this asset reflects that it is conditional
upon Hunting completing the work. The revenue is recognised on the balance sheet as a trade
receivable if a sales invoice has been issued as this asset reflects that it is unconditional other than
the passage of time. The revenue is reported on the balance sheet as accrued income if the
performance obligation has been completed but a sales invoice has not yet been issued. Accrued
income is a sub-category of trade receivables, where receipt of cash is dependent only upon the
passage of time. The Group recognises a contract liability on the balance sheet when amounts
received and receivable from the customer exceed the value of the work done to date, reflecting
that the Group is obligated to transfer goods or services in order to settle the prepayment from
the customer.
(ii) Rental Revenue
• Rental revenue from operating leases, being leases in which Hunting does not transfer substantially
all of the risks and rewards of the leased asset to the customer, is recognised as the income is earned.
For Hunting this comprises the leases of properties to third parties and tools to customers.
• Revenue from finance leases, being leases in which Hunting, as a manufacturer/dealer-lessor,
transfers substantially all of the risks and rewards of the leased asset to the customer, is measured
as the fair value of the underlying asset or, if lower, the present value of the lease payments. The
carrying value of the leased asset minus the unguaranteed residual value is charged to cost of sales
• Interest income and expense is recognised in the consolidated income statement using the effective
• The financial statements for each of the Group’s subsidiaries, associates and joint ventures are
denominated in their respective functional currencies.
• The functional currency is the currency of the primary economic environment in which the entity
• Transactions denominated in currencies other than the functional currency are translated into the
functional currency at the exchange rate ruling at the date of the transaction.
• Monetary assets and liabilities, except borrowings designated as a hedging instrument in a net
investment hedge, denominated in non-functional currencies are retranslated at the exchange rate
ruling at the balance sheet date and exchange differences are taken to the consolidated income
statement.
• Borrowings designated as a hedging instrument in a net investment hedge are retranslated at the
(ii) Group Consolidated Financial Statements
• The presentation currency of the Group is US Dollars.
• The net assets of non-US Dollar denominated subsidiaries, associates and joint ventures
are translated into US Dollars at the exchange rates ruling at the balance sheet date.
• The income statements of subsidiaries, associates and joint ventures are translated into US Dollars
at the average exchange rates for the year.
• Exchange differences are recognised directly in equity in the currency translation reserve (“CTR”),
together with exchange differences arising on foreign currency loans used to finance foreign
currency net investments.
• Upon adoption of IFRS on 1 January 2004, accumulated exchange differences arising on
consolidation prior to 31 December 2003 were reset to zero and the CTR recommenced under
IFRS on 1 January 2004.
• The balance on the CTR represents the exchange differences arising on the retranslation of non-US
Dollar amounts into US Dollars since 1 January 2004.
• On the disposal of a business, the cumulative exchange differences previously recognised in the
CTR relating to that business are transferred to the consolidated income statement as part of the
Hunting PLC
238
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
40. Material Accounting Policies
continued
• The taxation recognised in the consolidated income statement comprises current tax and deferred
tax arising on the current year’s result before tax and adjustments to tax arising on prior years’ results.
• Current tax is the expected tax payable or receivable arising in the current year on the current year’s
result before tax, using tax rates enacted or substantively enacted at the balance sheet date, plus
adjustments to tax in respect of prior years’ results.
Group’s consolidated balance sheet are realised, using tax rates enacted or substantively enacted at
the balance sheet date that are expected to apply when the asset is realised or the liability is settled.
• Full provision is made for deferred tax, using the liability method, on all taxable temporary
differences. Deferred tax assets and liabilities are recognised separately in the consolidated balance
sheet and are reported as non-current assets and liabilities.
• Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that the unwind of taxable temporary
differences, and/or future suitable and sufficient taxable profits, will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit and at the time of transaction does not give rise to equal amounts of taxable and deductible
temporary differences. In addition, a deferred tax liability is not recognised if the temporary
difference arises from the initial recognition of goodwill.
• Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries and associates, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments
are only recognised to the extent that it is probable that there will be sufficient taxable profits against
which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future. The recoverability of deferred tax assets is reviewed at each balance sheet date
and deferred tax assets are recognised to the extent that sufficient taxable profit is expected to be
available to allow the deferred tax asset to be utilised.
• When items of income and expense are recognised in other comprehensive income, the current
• Property, plant and equipment is stated at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition and
installation of the asset.
• Land and assets under construction are not depreciated.
• With the exception of oil and gas exploration and development, assets are depreciated using
the straight-line method at the following rates:
Freehold buildings | – 2% to 10% |
Leasehold buildings | – life of lease |
Plant, machinery and motor vehicles | – 6% to 331⁄ 3 % |
Rental tools | – 3% to 25% |
• The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
• Lessees:
With regard to lessee contracts, the Group recognises a lease obligation as a liability and a
right-of-use asset at the inception of the contract, except with regard to the two exemptions noted
below. In measuring the lease liability, the Group takes account of all fixed payments and the known
amount of variable payments which depend on an index or rate. Management also assesses the
likelihood of the Group exercising extension options, early termination options and purchase options
when contractually offered, and incorporates the relevant assumed cash flows in the initial
measurement. These future gross cash flows are then discounted using the incremental borrowing
rate (“IBR”) that is relevant to each lease. The interest rate implicit in the lease is not used as the
Group is unable to access the specific financials of the lessor that would be required in order to
determine that rate. The IBR is determined by reference to: (i) the weighted average period of the
lease term; (ii) the risk-free rate of the currency of the lease, adjusted for country-specific
government bond yields for contracts denominated in the Euro; (iii) the market risk premium
associated with the currency of denomination of the contract; (iv) a financing spread associated with
the financial status and country of location of the lessee entity; and (v) an asset-specific adjustment
associated with the perceived security that each type of asset provides to the lessor. The right-of-
use asset is usually initially measured as equal to the initial measurement of the lease liability plus
any contracted remediation work that would be required at the end of the lease term as there are
usually no initial direct costs or lease payments made prior to the inception of the contract.
Hunting PLC
239
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
40. Material Accounting Policies
continued
(g) Leases
continued
• Lessees: continued
Whenever circumstances change post-inception, for example when the judged likelihood of
whether an option will or will not be exercised, or indices relevant to the measurement of variable
payments change, or the lease term is extended with regard to a contract that does not offer an
extension option, the lease liability is remeasured and the right-of-use asset is correspondingly
amended. Remeasurement of the lease liability is typically based on a revised IBR as the change
in circumstances has most commonly resulted from a change in the lease term.
charged on the lease liability and as depreciation charged on the right-of-use asset. Depreciation is
charged on a straight-line basis over the lease term; to date the Group has not and is not expected
Hunting has adopted the two exemptions that permit lessees to charge the cost of certain leases
directly to the consolidated income statement on a straight-line basis over the lease term. The two
exemptions apply to:
–
leases that have a duration of one year or less; and
–
leases of assets that would have cost $5,000 or less, when new, to acquire if the asset had been
purchased rather than leased.
• Lessors:
Hunting enters into lease arrangements as a lessor with respect to some of its owned and leased
land and buildings and where it leases equipment to customers in the capacity of a manufacturer/
dealer lessor.
Leases for which Hunting is a lessor are classified as finance leases or operating leases. Whenever
the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other leases are classified as operating leases. Rental
income from operating leases is recognised on a straight-line basis over the term of the relevant
lease. Amounts due from lessees/customers under finance leases are recognised as receivables at
the amount of the Group’s net investment in the leases, after derecognition of the underlying asset.
Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of
• Goodwill arises when the fair value of the consideration paid for a business exceeds the fair value
of the Group’s share of the net assets acquired.
• Goodwill is recognised as an asset and is carried at cost less accumulated impairment losses.
• Goodwill is allocated to cash generating units (“CGUs”) for the purpose of impairment testing. The
allocation is made to the CGUs or groups of CGUs that are expected to benefit from the business
combination in which the goodwill arose. Goodwill is not allocated to a CGU or CGU group larger
than an operating segment.
• A CGU is the smallest identifiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets.
• On the disposal of a business, goodwill relating to that business that remains in the consolidated
• Other intangible assets, whether obtained through acquisition or internal development, are
capitalised when it is probable that the future economic benefits that are attributable to the asset
will be generated, provided the cost of the asset can be measured reliably.
• Capitalisation occurs from the point when technical and commercial feasibility of the asset has been
established. Prior to this, costs are expensed. For internally generated assets, only costs directly
attributable to the development of the asset are capitalised. This typically includes employee
remuneration and the cost of materials and services, such as testing, consumed in generating the
intangible asset.
• Other intangible assets are stated at cost less accumulated amortisation and any impairment losses.
• These assets have a finite life and are amortised in accordance with the pattern of expected future
economic benefits, or when this cannot be reliably estimated, by using the straight-line method.
• Intangible assets are amortised over the following periods:
Customer relationships | – eight to ten years |
Unpatented technology | – eight to ten years |
Patents | – eight to ten years |
Trademarks and domain names | – one to five years |
Software | – three to eight years |
Hunting PLC
240
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
40. Material Accounting Policies
continued
• An associate is an entity over which the Group has significant influence but not control or joint
control. A joint venture is a joint arrangement whereby the parties that have joint control have rights
to the net assets of the arrangement.
• The Group’s interests in these investments are accounted for using the equity method of accounting.
• Upon initial recognition as at the date of acquisition, the interests are recognised in the balance
sheet at cost plus directly incurred acquisition-related expenses. The excess of cost above the
share of net assets is ascribed to goodwill and other intangible assets, as appropriate. The
intangible assets are subsequently amortised and presented in the consolidated income statement
as part of the post-tax share of the acquiree’s results.
• Subsequently, the carrying amount of the investment is adjusted to include the Group’s share of
the net assets after the date of acquisition and is assessed for impairment as a single asset at each
balance sheet date. The Group recognises its share of the acquiree’s net profit or loss after taxation
as a separate line in the consolidated income statement. The Group’s share of the acquiree’s net
assets plus direct acquisition expenses, goodwill and other acquisition-related intangible assets is
• The Group assesses at least annually whether there is any indication that an asset is impaired,
and undertakes an assessment for an impairment if such an indication exists.
• In addition, the Group undertakes an annual impairment assessment of goodwill, whether or not
an indication of impairment actually exists.
• Where assets do not generate their own independent cash flows, they are tested at a CGU level
and, if impairment is identified, the carrying amount of the CGU is reduced to its recoverable
amount. For assets that generate independent cash flows, the specific asset is impaired to its
recoverable amount if an impairment is identified.
• Where an impairment exists, an asset or CGU is written down to its recoverable amount being
the higher of: (a) its fair value less costs to sell; and (b) its value-in-use. Details of how value-in-use
is determined are given in note 15.
• Impairments are recognised immediately in the consolidated income statement.
• An impairment of goodwill is never reversed. When applicable, an impairment of any other asset
or CGU is reversed, but only to the extent that the consequent carrying value does not exceed
• Inventories are stated at the lower of cost and net realisable value.
• Cost is determined using the first-in-first-out method and net realisable value is the estimated selling
price less costs of disposal in the ordinary course of business. The cost of inventories includes
• Cash and cash equivalents comprise cash at bank and in hand, short-term deposits, qualifying
fixed term funds and money market funds, with a maturity of less than three months from the date
of deposit.
• Short-term deposits, fixed term funds and money market funds have been classified as cash and
cash equivalents as they are short-term, highly liquid, are readily convertible to a known amount of
cash and are subject to an insignificant risk of change in value. These instruments are held for the
purpose of settling current or potential cash commitments in the short term by the treasury function.
• At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss (“FVTPL”), transaction costs. Transaction costs
of financial assets at FVTPL are expensed immediately to the consolidated income statement.
• Subsequent measurement of debt instruments depends on each Group entity’s business model for
managing the asset in order to generate cash flows and the cash flow characteristics of the financial
asset. The Group’s debt instruments are classified into amortised cost or FVTPL.
• Debt instruments that are held for the collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, are subsequently measured at amortised cost.
Interest income from these financial assets is included in finance income using the effective interest
method. If collection is expected in one year or less they are classified as current assets, otherwise
they are presented as non-current assets. Debt instruments held for collection of contractual cash
flows include contract assets, trade receivables, accrued revenue and other receivables.
• Any other debt instruments, including the convertible financing, fixed term funds and money market
funds, which are subsequently not measured at amortised cost have been measured at FVTPL.
• The Group’s financial assets that are equity instruments, or debt instruments that are convertible
into equity, are subsequently measured at FVTPL. Changes in the fair value of these instruments
are recognised in other operating income, operating expenses, finance income or finance expense,
as appropriate. Financial assets that are equity instruments comprise listed equity investments and
mutual funds. The convertible debt instrument is currently a loan on which interest is earned prior to
its potential conversion into equity, the conversion of which is dependent upon events outside of the
Group’s control.
• The Group applies lifetime expected credit losses (“ECLs”) to trade receivables, accrued revenue,
the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the
risks and rewards of ownership and continues to control the transferred asset, the Group recognises
its retained interest in the asset and an associated liability for amounts it may have to pay. If the
Group retains substantially all the risks and rewards of ownership of a transferred financial asset,
the Group continues to recognise the financial asset and also recognises a collateralised borrowing
Hunting PLC
241
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
40. Material Accounting Policies
continued
• Financial liabilities are initially recognised at fair value at the trade date, which is normally the
consideration received less, in the case of financial liabilities that are not measured at FVTPL,
transaction costs. The Group subsequently remeasures all of its non-derivative financial liabilities,
including trade payables, at amortised cost.
• Payables are classified as current liabilities if payment is due within one year, otherwise they are
• Payments due to financial institutions arising under bank acceptance drafts are presented as trade
and other payables as they represent payments to suppliers for materials and form part of the
working capital used in the Group’s normal operating cycle. Such amounts are presented as other
payables.
• Transaction costs in relation to the arrangement of borrowing facilities are capitalised and
subsequently amortised on a straight-line basis over the expected life of the facility. The charge
is recognised within finance expense in the income statement. Capitalised costs are presented
• Derivatives are initially recognised at fair value on the date the derivative contract is entered into
and are subsequently remeasured to their fair value at the end of each reporting period.
• The full fair value of a derivative is classified as a non-current asset or liability when the remaining
maturity of the derivative is more than 12 months from the balance sheet date.
• The accounting for subsequent changes in fair value depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged.
• Where the derivatives are not designated in a hedge and accounted for using hedge accounting,
they are classified as “held for trading” and are accounted for at fair value through profit or loss,
with changes in the fair value recognised immediately within the consolidated income statement.
• The Group designates certain derivatives as:
i. hedges of the fair value of recognised assets and liabilities; or
ii.
hedges of a particular risk associated with the cash flows of highly probable forecast transactions; or
iii. a hedge of the net investment in a foreign operation.
• The Group has not disclosed the accounting polices relating to fair value hedges and cash flow
• Provisions are recognised when the Group has a present obligation as a result of a past event
and it is probable that an outflow of resources will be required to settle the obligation.
• The measurement of a provision is based on the most likely amount and timing of the expenditures.
Payments that are expected to arise after more than one year are discounted to their present
value using a risk-free interest rate that is relevant to the region in which the past event occurred.
• Payments to defined contribution retirement schemes are charged to the consolidated income
• The Group issues equity-settled and cash-settled share-based payments (HPSP awards) to
certain employees as consideration for services received from the employees. The fair value of
the employees’ services is recognised as an expense in the consolidated income statement on
a straight-line basis over the vesting period, and in the case of non-market based vesting conditions,
based on the Group’s estimate of awards that will ultimately vest. The obligation to settle these
awards is recognised within other components of equity; the obligation to settle the cash-settled
• Incremental costs directly attributable to the issue of new shares are charged to equity as a deduction
(v) Merger Reserve
• The merger reserve comprises the proceeds received, net of transaction costs, in excess of the
nominal value of the Ordinary shares issued by way of the share placing completed on 31 October
2016. In accordance with section 612 of the Companies Act 2006, the premium was credited to the
merger reserve, instead of to the share premium account, because the share placing was pursuant
to the Company securing over 90% of another entity. The proceeds were used to pay down the
Group’s borrowings at that time. The reserve is non-distributable and is transferred to distributable
retained earnings when the proceeds meet the definition of a qualifying consideration.
• Dividends to the Group’s shareholders are recognised as liabilities in the Group’s financial statements
in the period in which the dividends are approved by shareholders. Interim dividends are recognised
• The Hunting PLC Employee Benefit Trust (“EBT”) holds treasury shares, which are shares in Hunting
PLC, for the purpose of issuing shares to employees of the Group under share-based remuneration
schemes. The EBT is consolidated in accordance with note 40(a) above.
• The cost of treasury shares is presented as a deduction from retained earnings in the consolidated
balance sheet.
Hunting PLC
242
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
The impacts to the Group’s financial statements for the import tax provision and the reclassification of the share of associates’ and joint venture’s results in 2023 are outlined below. See note 1 for further details.
Consolidated Income Statement (extract)
| Year ended 31 December 2023 | ||||
Adjustments | ||||
Presentation of | ||||
As previously | Import tax | associates’ and joint | ||
reported | provision | venture’s results | Restated | |
$m | $m | $m | $m | |
Gross profit | 227.7 | – | – | 227.7 |
Administrative expenses | (119.8) | (8.9) | – | (128.7) |
Net other operating expenses | (46.9) | – | – | (46.9) |
Share of associates’ and joint venture’s results | – | – | (0.6) | (0.6) |
Operating profit | 61.0 | (8.9) | (0.6) | 51.5 |
Net finance expenses | (10.4) | – | – | (10.4) |
Share of associates’ and joint venture’s results | (0.6) | – | 0.6 | – |
Profit before tax | 50.0 | (8.9) | – | 41.1 |
Taxation | 69.0 | 2.1 | – | 71.1 |
Profit for the year | 119.0 | (6.8) | – | 112.2 |
Attributable to: | ||||
Owners of the parent | 117.1 | (6.8) | – | 110.3 |
Non-controlling interests | 1.9 | – | – | 1.9 |
119.0 | (6.8) | – | 112.2 | |
| Earnings per share | cents | cents | cents | cents |
Basic | 73.8 | (4.3) | – | 69.5 |
Diluted | 70.0 | (4.1) | – | 65.9 |
Hunting PLC
243
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
41. Prior Period Restatements
continued
Consolidated Statement of Comprehensive Income (extract)
| Year ended 31 December 2023 | ||||
Adjustments | ||||
Presentation of | ||||
As previously | Import tax | associates’ and joint | ||
reported | provision | venture’s results | Restated | |
$m | $m | $m | $m | |
Profit for the year | 119.0 | (6.8) | – | 112.2 |
Other comprehensive income, after tax | ||||
Exchange adjustments | 3.6 | (0.2) | – | 3.4 |
Other components of other comprehensive income | (0.5) | – | – | (0.5) |
Other comprehensive income, after tax | 3.1 | (0.2) | – | 2.9 |
Total comprehensive income for the year | 122.1 | (7.0) | – | 115.1 |
Attributable to: | ||||
Owners of the parent | 120.4 | (7.0) | – | 113.4 |
Non-controlling interests | 1.7 | – | – | 1.7 |
122.1 | (7.0) | – | 115.1 | |
Hunting PLC
244
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
41. Prior Period Restatements
continued
Consolidated Balance Sheet (extract)
| At 31 December 2023 | ||||
Adjustments | ||||
Presentation of | ||||
As previously | Import tax | associates’ and joint | ||
reported | provision | venture’s results | Restated | |
$m | $m | $m | $m | |
ASSETS | ||||
Non-current assets | ||||
Other non-current assets | 502.6 | – | – | 502.6 |
Deferred tax assets | 93.1 | 2.1 | – | 95.2 |
595.7 | 2.1 | – | 597.8 | |
Current assets | 626.6 | – | – | 626.6 |
LIABILITIES | ||||
Current liabilities | ||||
Other current liabilities | (221.0) | – | – | (221.0) |
Provisions | (4.8) | (9.1) | – | (13.9) |
(225.8) | (9.1) | – | (234.9) | |
Net current assets | 400.8 | (9.1) | – | 391.7 |
Non-current liabilities | (39.4) | – | – | (39.4) |
Net assets | 957.1 | (7.0) | – | 950.1 |
Equity attributable to owners of the parent | ||||
Other equity balances | 219.5 | – | – | 219.5 |
Other components of equity | 8.9 | (0.2) | – | 8.7 |
Retained earnings | 725.4 | (6.8) | – | 718.6 |
Total attributable to owners of the parent | 953.8 | (7.0) | – | 946.8 |
Non-controlling interests | 3.3 | – | – | 3.3 |
Total equity | 957.1 | (7.0) | – | 950.1 |
Hunting PLC
245
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Consolidated Financial Statements
continued
41. Prior Period Restatements
continued
Consolidated Statement of Cash Flows (extract)
| Year ended 31 December 2023 | ||||
Adjustments | ||||
Presentation of | ||||
As previously | Import tax | associates’ and joint | ||
reported | provision | venture’s results | Restated | |
$m | $m | $m | $m | |
Operating activities | ||||
Operating profit | 61.0 | (8.9) | (0.6) | 51.5 |
Adjusting items (NGM A) | – | 8.9 | – | 8.9 |
Depreciation, amortisation and impairment (NGM C) | 42.0 | – | – | 42.0 |
EBITDA (NGM C) | 103.0 | – | (0.6) | 102.4 |
Other cash flows from operating activities | (53.7) | – | – | (53.7) |
Share of associates’ and joint venture’s results | – | – | 0.6 | 0.6 |
Net cash inflow from operating activities | 49.3 | – | – | 49.3 |
Net cash outflow from investing activities | (32.4) | – | – | (32.4) |
Net cash flow from financing activities | – | – | – | – |
Net increase in cash and cash equivalents | 16.9 | – | – | 16.9 |
Cash and cash equivalents at the beginning of the year | 27.3 | – | – | 27.3 |
Effect of foreign exchange rates | (0.1) | – | – | (0.1) |
Cash and cash equivalents at the end of the year | 44.1 | – | – | 44.1 |
Notes
2024
$m
2023
$m
ASSETS
Non-current assets
Investments in subsidiaries
C4
205.3
205.3
Other receivables
C5
609.5
599.7
814.8
805.0
Current assets
Other receivables
C5
0.6
1.4
Current tax asset
0.1
0.5
0.7
1.9
LIABILITIES
Current liabilities
Other payables
C6
(3.4)
(2.7)
Provisions
(0.1)
(0.2)
(3.5)
(2.9)
Net current liabilities
(2.8)
(1.0)
Non-current liabilities
Provisions
(0.7)
(0.7)
Net assets
811.3
803.3
Equity attributable to owners of the parent
Share capital
C9
66.5
66.5
Share premium
C9
153.1
153.0
Other components of equity
C10
4.2
1.5
Retained earnings
C11
587.5
582.3
Total equity
811.3
803.3
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting its own income statement and statement of comprehensive income. Profit and total
comprehensive income for the year of $26.9m (2023 – $27.5m) has been accounted for in the financial statements of the Company.
The notes on pages 248 to 253 are an integral part of these financial statements. The financial statements on pages 246 and 247 were approved by the Board of Directors on 6 March 2025 and were signed
on its behalf by:
Jim Johnson
Bruce Ferguson
Director
Director
Registered number: 00974568
Company Balance Sheet
At 31 December
Hunting PLC
Annual Report and Accounts 2024
246
Strategic Report
Corporate Governance
Financial Statements
Other Information
Notes
Year ended 31 December 2024
Share
capital
$m
Share
premium
$m
Other
components
of equity
i
$m
Retained
earnings
$m
Total
equity
$m
At 1 January 2024
66.5
153.0
1.5
582.3
803.3
Profit for the year and total comprehensive income
–
–
–
26.9
26.9
Dividends paid to Hunting PLC shareholders
C12
–
–
–
(16.7)
(16.7)
Treasury shares:
– purchase of treasury shares
C11
–
–
–
(14.2)
(14.2)
– disposal of treasury shares
C9, C11
–
0.1
–
0.2
0.3
Share options and awards:
– value of employee services
C10
–
–
12.3
–
12.3
– discharge
C10, C11
–
–
(9.6)
9.0
(0.6)
At 31 December 2024
66.5
153.1
4.2
587.5
811.3
Notes
Year ended 31 December 2023
Share
capital
$m
Share
premium
$m
Other
components
of equity
i
$m
Retained
earnings
$m
Total
equity
$m
At 1 January 2023
66.5
153.0
9.3
558.8
787.6
Profit for the year and total comprehensive income
–
–
–
27.5
27.5
Dividends paid to Hunting PLC shareholders
C12
–
–
–
(15.0)
(15.0)
Treasury shares:
– purchase of treasury shares
C11
–
–
–
(9.0)
(9.0)
– disposal of treasury shares
C11
–
–
–
0.3
0.3
Share options and awards:
– value of employee services
C10
–
–
12.3
–
12.3
– discharge
C10, C11
–
–
(8.3)
7.9
(0.4)
Transfer between reserves
C10
–
–
(11.8)
11.8
–
At 31 December 2023
66.5
153.0
1.5
582.3
803.3
i.
An analysis of other components of equity is provided in note C10.
Company Statement of Changes in Equity
For the year ended 31 December
Hunting PLC
Annual Report and Accounts 2024
247
Strategic Report
Corporate Governance
Financial Statements
Other Information
C1. Basis of Preparation
Hunting PLC is a public company limited by shares, quoted on the London Stock Exchange in the
Equity Shares in Commercial Companies category. Hunting PLC was incorporated in the United
Kingdom under the Companies Act and is registered in England and Wales. The address of the
Company’s registered office is 30 Panton Street, London, SW1Y 4AJ, United Kingdom. The Company
acts as a holding company for the Hunting PLC Group. Details of the Company’s associates and joint
ventures are given in note C14 and details of subsidiaries are given in note C15.
The Company meets the definition of a qualifying entity under Financial Reporting Standard 100
“Application of Financial Reporting Requirements” (FRS 100). Accordingly, these financial statements
have been prepared in accordance with FRS 101 “Reduced Disclosure Framework” (FRS 101).
In preparing these financial statements, the Company applies the recognition and measurement
requirements of United Kingdom adopted International Financial Reporting Standards (“IFRS”), with a
reduced level of disclosure, but makes amendments where necessary to comply with the Companies
Act 2006. For all periods up to and including the year ended 31 December 2023, the Company
prepared its financial statements in accordance with IFRS. The transition from IFRS to FRS 101
required no adjustments to amounts previously reported in the financial statements for the year
ended 31 December 2023, and as such no reconciliation of Equity has been presented.
As permitted by FRS 101, the Company has taken advantage of the following disclosure exemptions,
and not disclosed:
• A cash flow statement and related notes;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRS; and
• Disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements include the equivalent disclosures, the Company has also
taken the FRS 101 exemptions available for the following disclosures:
• IFRS 2 “Share-based Payment” in respect of Group settled share-based payments; and
• The disclosures required by IFRS 7 ‘Financial Instruments: Disclosures’ and certain disclosures
required by IFRS 13 ‘Fair Value Measurement’.
The financial statements have been prepared on a going concern basis under the historical cost
convention. The Board’s consideration of going concern is detailed further in the Strategic Report on
page 111. The financial statements are presented in US Dollars, the currency of the primary economic
environment in which the Company operates.
Notes to the Company Financial Statements
From the perspective of the Company, the principal risks and uncertainties are integrated with
the principal risks of the Hunting PLC Group and are not managed separately. The principal risks
and uncertainties of the Hunting PLC Group, which include those of the Company, are discussed
on pages 104 to 109 in the Risk Management section of the Annual Report.
The Company’s material accounting policies applied in the preparation of these financial statements
are the same as those set out in note 40 of the Group’s financial statements, except for investments
in subsidiaries that are stated at cost, which is the fair value of the consideration paid, less provision
for impairment. These policies have been consistently applied to all the years presented.
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Critical accounting judgements are those that the Directors have made in the process of applying the
Company’s accounting policies and have the most significant effect on the amounts recognised in the
Company’s financial statements. Key estimates are those concerning future expectations and other
key sources of estimation uncertainty at the end of the reporting period, that may have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
Management believes that there are no critical accounting judgements or key sources of estimation
uncertainty applied in the preparation of the Company’s financial statements.
C2. Employees
The Company had no employees during the current or prior year.
C3. Auditor’s Remuneration
2024
$m
2023
$m
Fees payable to the Company’s independent auditor
and its associates are for:
The audit of these financial statements
0.5
0.5
Hunting PLC
Annual Report and Accounts 2024
248
Strategic Report
Corporate Governance
Financial Statements
Other Information
C4. Investments in Subsidiaries
2024
$m
2023
$m
Cost:
At 1 January and 31 December
436.8
436.8
Impairment:
At 1 January and 31 December
(231.5)
(231.5)
Net book amount
205.3
205.3
The Company’s subsidiaries are detailed in note C15. Investments in subsidiaries are recorded at cost,
which is the fair value of the consideration paid, less impairment.
(a) Impairment Tests
In respect of the carrying value of the Company’s investments in subsidiaries, assessments
are undertaken at least annually to determine whether there have been any events or changes
in circumstances that indicate that the carrying value may be impaired. An impairment review
is carried out when such indicators are present by comparing the carrying value of a subsidiary
to its recoverable amount. The recoverable amount for the investments are determined using a
value-in-use method which uses discounted cash flow projections.
For the investment in Hunting Energy Holdings Limited, the Company has utilised the recoverable
amounts determined by the Group impairment review. The Group impairment testing process and the
key assumptions are outlined on page 205. The impairment charge recognised in the Hunting Titan
CGU does not impact the Company’s investment in Hunting Energy Holdings Limited, as the
recoverable amount of the US Group is greater than the investment carrying value. In the opinion
of the Directors, following the impairment review, the recoverable amount of the investment held in
Hunting Energy Holdings Limited is in excess of the carry value and, as a result, no impairment charge
has been recognised in 2024. There was no impairment charge in 2023.
(b) Sensitivities
Management has reviewed various downside sensitivities versus the base case assumptions used
in the projections. These covered revenue growth rates, terminal revenue growth rates, discount rates
and foreign exchange rates. Management has concluded that there are no reasonably foreseeable
changes in key assumptions that would give rise to an impairment charge.
C5. Other Receivables
2024
$m
2023
$m
Non-current:
Loans receivable from a subsidiary – interest-bearing
609.4
599.6
Prepayments
0.1
0.1
609.5
599.7
Current:
Receivables from subsidiaries
0.1
0.1
Prepayments
0.4
1.2
Other receivables
0.1
0.1
0.6
1.4
Receivables from subsidiaries’ current accounts are unsecured, interest free and repayable on
demand. The Company does not hold any collateral as security and no assets have been acquired
through the exercise of any collateral previously held.
(a) Impairment of Receivables
Default on a financial asset is usually considered to have occurred when any contractual payments
under the terms of the debt are more than 90 days overdue. Receivables are written off when there
is no reasonable expectation of recovery. Indicators that receivables are generally not recoverable
include the failure of the debtor to engage in a repayment plan, failure to make contractual payments
for a period greater than 180 days past due and the debtor being placed in administration. Where
receivables have been written off, the entity will continue to try to recover the outstanding receivable.
(b) Impairment of Loan Receivable
The Company assesses on a forward-looking basis the expected credit losses (“ECLs”) at each
balance sheet date associated with its loan receivable from a subsidiary company carried at
amortised cost. The impairment methodology applied, following the adoption of the general model
under IFRS 9, will depend upon whether there has been a significant increase in credit risk.
To assess whether there has been a significant increase in credit risk, the risk of default occurring as
at 31 December 2024 is compared with the risk of default occurring at the date of initial recognition.
Indicators of a significant increase in credit risk include events that have a negative impact on the
estimated future cash flows and if any payments under the terms of the debt are more than 30 days
overdue. Macro-economic information is also considered.
At 31 December 2024, the Company’s loan receivable was not overdue and the Company does
not consider it necessary to provide for any impairment. The loan receivable is expected to be fully
recovered, as there is no recent history of default or any indications that the contractual payments will
not be made. The Company’s maximum exposure to credit risk is the fair value of the loan receivable.
Notes to the Company Financial Statements
continued
Hunting PLC
Annual Report and Accounts 2024
249
Strategic Report
Corporate Governance
Financial Statements
Other Information
(c) Impairment of Receivables from Subsidiaries and Other Receivables
None of the Company’s receivables from subsidiaries and other receivables (2023 – none) were overdue
at the year-end and the Company does not consider it necessary to provide for any impairments as
there is no recent history of default or any indications that the contractual payments will not be made.
The Company’s maximum exposure to credit risk is the fair value of each class of receivable.
C6. Other Payables
2024
$m
2023
$m
Current:
Payables to subsidiaries
2.0
1.3
Accruals
1.2
1.1
Other payables
0.2
0.3
3.4
2.7
Current payables due to subsidiaries are unsecured, interest free and repayable on demand.
C7. Derivatives and Hedging
The Company has used forward foreign exchange contracts to hedge its exposure to exchange
rate movements during the year. At 31 December 2024, the Company had no outstanding forward
foreign exchange contracts (2023 – none). Gains and losses on contracts that are not designated in
a hedge relationship are taken directly to the income statement. Changes in the fair value of currency
derivatives not designated in a hedge relationship amounting to $nil (2023 – $0.1m net loss) were
recognised in the income statement during the year.
C8. Post-employment Benefits
The Company has no employees and therefore does not participate in any of the post-employment
benefit schemes shown in note 32 of the Group’s financial statements, although it does guarantee
the contributions due by the participating employers.
C9. Share Capital and Share Premium
Please see note 33 of the Group’s financial statements.
C10. Other Components of Equity
2024
Merger
reserve
$m
Share-based
payments
reserve
$m
Currency
translation
reserve
$m
Capital
redemption
reserve
$m
Total
$m
At 1 January 2024
–
19.9
(19.2)
0.8
1.5
Share options and awards:
– value of employee services
–
12.3
–
–
12.3
– discharge
–
(9.6)
–
–
(9.6)
At 31 December 2024
–
22.6
(19.2)
0.8
4.2
2023
Merger
reserve
$m
Share-based
payments
reserve
$m
Currency
translation
reserve
$m
Capital
redemption
reserve
$m
Total
$m
At 1 January 2023
11.8
15.9
(19.2)
0.8
9.3
Share options and awards:
– value of employee services
–
12.3
–
–
12.3
– discharge
–
(8.3)
–
–
(8.3)
Transfer between reserves
(11.8)
–
–
–
(11.8)
At 31 December 2023
–
19.9
(19.2)
0.8
1.5
The merger reserve comprises the proceeds received, net of transaction costs, in excess of the
nominal value of the Ordinary shares issued by way of the share placing completed on 31 October
2016. In accordance with section 612 of the Companies Act 2006, the premium was credited to the
merger reserve, instead of to the share premium account, because the share placing was pursuant to
the Company securing over 90% of another entity. The proceeds were used to pay down the Group’s
borrowings at that time. The reserve is currently non-distributable and is transferred to distributable
retained earnings when the proceeds meet the definition of a qualifying consideration. In 2023,
$11.8m was transferred from the merger reserve to retained earnings. This portion of the reserve was
considered to be realised, as the equivalent amount of the proceeds from the share placing in 2016
met the definition of qualifying consideration.
The share-based payments reserve represents the Company’s obligation to settle share-based
awards issued to employees of the Hunting PLC Group. When employees exercise their awards,
the portion of the share-based payments reserve which represents the share-based payment
charge for those awards is transferred to retained earnings and the Group discharges its obligation.
Notes to the Company Financial Statements
continued
C5. Other Receivables
continued
Hunting PLC
Annual Report and Accounts 2024
250
Strategic Report
Corporate Governance
Financial Statements
Other Information
The currency translation reserve contains the accumulated foreign exchange differences arising on
foreign currency loans used to finance foreign currency net investments and also foreign exchange
differences arising on the Company’s change in presentational currency from Sterling to US Dollars
on 1 January 2013.
The capital redemption reserve is a statutory, non-distributable reserve into which amounts are
transferred following the purchase of the Company’s own shares out of distributable profits.
C11. Retained Earnings
2024
$m
2023
$m
At 1 January
582.3
558.8
Profit for the year
26.9
27.5
Dividends paid to Hunting PLC shareholders (note C12)
(16.7)
(15.0)
Treasury shares:
– purchase of treasury shares
(14.2)
(9.0)
– proceeds on disposal of treasury shares
0.2
0.3
Share options and awards:
– discharge
9.0
7.9
Transfer between reserves
–
11.8
At 31 December
587.5
582.3
Retained earnings include the following amounts in respect of the carrying amount of treasury shares:
2024
$m
2023
$m
Cost:
At 1 January
(22.2)
(19.2)
Purchase of treasury shares
(14.2)
(9.0)
Cost of treasury shares disposed
7.9
6.0
At 31 December
(28.5)
(22.2)
At 31 December 2024, 7,191,845 Ordinary shares were held by the Employee Benefit Trust
(2023 – 6,591,918). The Company purchased 2,917,742 (2023 – 2,935,096) additional treasury shares
during the year for $14.2m (2023 – $9.0m). The loss on disposal of treasury shares during the year,
which is recognised in retained earnings, was $7.7m (2023 – $5.7m).
C12. Dividends Paid to Hunting PLC Shareholders
Please see note 36 of the Group’s financial statements.
C13. Related-party Transactions
The following related-party transactions took place between the Company and subsidiaries of the
Group during the year:
2024
$m
2023
$m
Transactions:
Royalties receivable
10.0
12.6
Management fees payable
(11.2)
(11.0)
Recharges of share options and awards and administrative expenses
14.5
15.8
Loans to subsidiary
(10.0)
(18.2)
Interest receivable on intercompany loans
43.6
40.2
Year-end balances:
Payables to subsidiaries
(2.0)
(1.3)
Receivables from subsidiaries
0.1
0.1
Loans owed by subsidiaries
609.4
599.6
All balances between the Company and its subsidiaries are unsecured.
The Company serves as the intermediary for certain Group insurances and is also the head of the VAT
group for the UK central companies and Enpro Subsea Limited, which joined in 2024.
Hunting PLC is the parent company of the Hunting PLC Group. The Company is listed on the London
Stock Exchange, with none of the shareholders owning more than 20% of the issued share capital of
the Company (see page 169). Accordingly, the Directors do not consider there to be an ultimate
controlling party.
Notes to the Company Financial Statements
continued
C10. Other Components of Equity
continued
Hunting PLC
Annual Report and Accounts 2024
251
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting PLC
252
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Company Financial Statements
continued
Associates are entities over which the Group has significant influence but not control or joint control.
This is generally the case where the Group holds between 20% and 50% of the voting rights. Joint
ventures are entities where the Group has joint control over the entity.
Changes during the year
(a) Hunting Airtrust Tubulars Pte. Ltd
Hunting Airtrust Tubulars Pte. Ltd, in which the Company held a 50% interest, was dissolved in
February 2024.
(b) Cumberland Additive
The Group increased its investment in Cumberland Additive Holdings LLC during the year by $0.9m.
The Group’s effective shareholding has increased to 30.7% as a result of the additional investment.
Associates and joint ventures i/ii | Registered address iii |
Rival Downhole Tools LC iv (23.0%) | 5535 Brystone Drive, Houston, Texas, 77041- |
7013, USA | |
Cumberland Additive Holdings LLC (30.7%) | 3813 Helios Way, Suite B200, Pflugerville, Texas, |
78660, USA | |
Jindal Hunting Energy Services Limited (49.0%) | A-1, UPSIDC Industrial Area, Nand Gaon Road, |
Kosi Kalan, Mathura, Uttar Pradesh, 281403 India |
i.
All interests are in the Ordinary equity shares of those companies.
ii.
Interest in company is held indirectly by Hunting PLC.
iii. Associates and joint ventures are incorporated and operate in the countries indicated.
iv. The Group divested of its investment in Rival Downhole Tools on 3 March 2025.
C15. Subsidiaries
Changes to the Group
(a) Hunting Energy Services (Thailand) Limited
Hunting Energy Services (Thailand) Limited, in which the Company had a 49% interest, was dissolved
in April 2024.
(b) Hunting Energy Services Production Technology, Inc.
Hunting Energy Services Production Technology, Inc. was incorporated in January 2025.
All companies listed below are wholly owned by the Group, except where otherwise indicated.
Subsidiaries i/ii | Registered address |
Operating activities | |
Hunting Energy Services (Australia) Pty Ltd | Level 40, Governor Macquarie Tower, 1 Farrer |
Place, Sydney, NSW, 2000, Australia | |
Hunting Energy Services (Canada) Ltd. | 5550 Skyline Way NE, Calgary, Alberta, T2E 7Z7, |
Canada | |
Hunting Energy Services (Wuxi) Co., Ltd (70%) | Plot 48, Phase 5, Shuofang Industrial Park, Wuxi |
New District, Jiangsu Province, China 214142 | |
Hunting Energy Completion Equipment (Wuxi) | Plot 48, Phase 5, Shuofang Industrial Park, Wuxi |
Co., Ltd. | New District, Jiangsu Province, China 214142 |
Hunting Energy Services (UK) Limited iv | 30 Panton Street, London SW1Y 4AJ, England |
Enpro Subsea Limited | Badentoy Avenue, Badentoy Industrial Estate, |
Portlethen, Aberdeen, AB12 4YB, Scotland | |
Enpro Subsea Operations Limited iv | Badentoy Avenue, Badentoy Industrial Estate, |
Portlethen, Aberdeen, AB12 4YB, Scotland | |
Enpro Subsea Group Limited iv | Badentoy Avenue, Badentoy Industrial Estate, |
Portlethen, Aberdeen, AB12 4YB, Scotland | |
Enpro Subsea Ghana Ltd (83%) | House No. F676/1, Angola Road, Kuku Hill, Osu, |
Accra, Ghana | |
Enpro Subsea Group Ghana Limited | House No. F676/1, Angola Road, Kuku Hill, Osu, |
Accra, Ghana | |
PT Hunting Energy Asia | Complex Dragon Industrial Park, Block D, Jalan |
Pattimura, Kabil Batam, 29467, Indonesia | |
Hunting Alpha (EPZ) Limited (60%) v | Block XLVIII/150, Off Mbaraki Road, P.O. Box |
83344-80100, Mombasa, Kenya | |
Hunting Energy de Mexico | Avenida Los Olmos #105, Parque Industrial |
El Sabinal, Apodaca, Nuevo Leon, Monterrey, | |
Mexico | |
Hunting Energy Services B.V. | Olieweg 10, 1951 NH Velsen-Noord, Netherlands |
Hunting Energy Services (Norway) AS | Arabergveien 6, 4050 Sola, Norway |
Hunting Energy Saudi Arabia LLC (65%) | Dhahran, Building No: 7612, P.O. Box: 3104, Zip |
Code: 34521, Saudi Arabia | |
Hunting Energy Services Limited | Badentoy Avenue, Badentoy Park, Portlethen, |
Aberdeen, AB12 4YB, Scotland | |
Hunting Energy Services Pte. Ltd | 16E Tuas Avenue 1, #01-61 Singapore 639537 |
Hunting Energy Services (China) Pte. Ltd. (70%) | 16E Tuas Avenue 1, #01-61 Singapore 639537 |
Hunting Energy Services India Private Limited | 602, Block A, Naurang House, |
21 KG Marg, Canaught Place, New Delhi, | |
Central Delhi 110001, India | |
Hunting Energy Services FZE | S40432, Jebel Ali Freezone, Dubai, UAE |
Hunting PLC
253
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual Report and Accounts 2024
Notes to the Company Financial Statements
continued
C15. Subsidiaries
continued
Subsidiaries i/ii | Registered address |
National Coupling Company, Inc. | 1316 Staffordshire Road, Staffordshire, Texas, |
77477, USA | |
Hunting Energy Services, LLC | 16825 Northchase Drive, Suite 600, Houston, |
Texas, 77060, USA | |
Premium Finishes, Inc. | 16825 Northchase Drive, Suite 600, Houston, |
Texas, 77060, USA | |
Hunting Dearborn, Inc. | 6 Dearborn Drive, Fryeburg, Maine, 04037, USA |
Hunting Energy Services (Drilling Tools), Inc. | 16825 Northchase Drive, Suite 600, Houston, |
Texas, 77060, USA | |
Hunting Innova, Inc. | 8383 North Sam Houston Parkway West, |
Houston, Texas, 77064, USA | |
Hunting Specialty Supply, Inc. | 100 E. Wally Wilkerson Parkway, Conroe, Texas, |
77303, USA | |
Hunting Titan, Inc. | 16825 Northchase Drive, Suite 600, Houston, |
Texas, 77060, USA | |
Tenkay Resources, Inc. | 16825 Northchase Drive, Suite 600, Houston, |
Texas, 77060, USA | |
Corporate activities | |
Hunting Energy Holdings Limited iii | 30 Panton Street, London SW1Y 4AJ, England |
Hunting Energy Services (International) Limited iv | 30 Panton Street, London SW1Y 4AJ, England |
Hunting Energy Services Overseas Holdings | 30 Panton Street, London SW1Y 4AJ, England |
Limited iv | |
Hunting Oil Holdings Limited iii/iv | 30 Panton Street, London SW1Y 4AJ, England |
Hunting Knightsbridge Holdings Limited | 30 Panton Street, London SW1Y 4AJ, England |
Huntaven Properties Limited iv | 30 Panton Street, London SW1Y 4AJ, England |
HG Management Services Ltd | 30 Panton Street, London SW1Y 4AJ, England |
Huntfield Trust Limited iv | 30 Panton Street, London SW1Y 4AJ, England |
Stag Line Limited iv | 30 Panton Street, London SW1Y 4AJ, England |
Hunting U.S. Holdings, Inc. | 16825 Northchase Drive, Suite 600, Houston, |
Texas, 77060, USA |
i.
Except where otherwise stated, companies are wholly owned, being incorporated and operating in the countries indicated. All subsidiary
undertakings have been included in the consolidated financial statements.
ii.
All interests in subsidiaries are in the Ordinary equity shares of those companies. The proportion of voting rights is represented by the
interest in the Ordinary equity shares of those companies.
iii. Interest in company is held directly by Hunting PLC.
iv.
Hunting Energy Services (UK) Limited (registered number 00908371), Enpro Subsea Operations Limited (registered number SC563049),
Enpro Subsea Group Limited (registered number SC592391), Hunting Energy Services (International) Limited (registered number
01678668), Hunting Energy Services Overseas Holdings Limited (registered number 03532045), Hunting Oil Holdings Limited (registered
number 01103530), Huntaven Properties Limited (registered number 00841865), Huntfield Trust Limited (registered number 00372215) and
Stag Line Limited (registered number 00151320) are dormant companies that are exempt from being audited, are exempt from the
requirements to prepare individual accounts under section 394A of the Companies Act 2006 and are exempt from filing individual accounts
under section 448A of the Companies Act 2006.
v.
Hunting PLC
Annual Report and Accounts 2024
254
Strategic Report
Corporate Governance
Financial Statements
Other Information
Other
Information
Non-GAAP Measures
255
Financial Record
263
Shareholder and Statutory Information
264
Glossary
266
Professional Advisers
270
The performance of the Group is assessed by the Directors using a number of measures, which
are not defined under IFRS, and are therefore considered to be non-GAAP measures (“NGMs”).
The measures used by the Group may not be comparable with similarly described measures
presented by other businesses.
The Group presents adjusted profitability measures below, which exclude adjusting items (see NGM A).
The adjusted results, when considered together with results reported under IFRS, provide investors,
analysts and other stakeholders with complementary information which aids comparison of the
Group’s financial performance from one period to the next. These adjusted measures are used by
management for planning, reporting and performance management purposes. The adjusted
profitability measures are reconciled to unadjusted IFRS results presented on the face of the income
statement, with details of the adjusting items provided in NGM A. Adjusted results can be higher or
lower than the IFRS results as they often exclude significant items and should not be regarded as a
complete picture of the Group’s financial performance, which is presented by the IFRS results in the
income statement.
In addition, the Group’s results and financial position are analysed using certain other measures that
are not defined under IFRS and are, therefore, considered to be NGMs. These measures are used
by management to monitor ongoing business performance. This section provides a definition of each
NGM presented in this report, the purpose for which the measure is used and a reconciliation of the
NGM to the reported IFRS numbers.
The auditors are required to consider whether these non-GAAP measures are prepared consistently
with the financial statements.
Income Statement Non-GAAP Measures
A. Adjusting Items
Due to their size and nature, the following items are considered to be adjusting items and have been
presented separately.
2024
$m
Restated
i
2023
$m
Impairment of goodwill
(109.1)
–
Import tax provision
–
(8.9)
Total adjustments to operating profit
(109.1)
(8.9)
Tax impact of adjusting items (note 5)
27.8
2.1
Recognition of US deferred tax assets
–
83.1
Adjusting items after tax
(81.3)
76.3
Adjusting items after tax attributable to owners of the parent
(81.3)
76.3
Adjusting items after tax attributable to non-controlling interests
–
–
(81.3)
76.3
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Non-GAAP Measures
Hunting PLC
Annual Report and Accounts 2024
255
Strategic Report
Corporate Governance
Financial Statements
Other Information
B. Adjusted Profitability Measures
Certain reported profit and loss measures are adjusted for the items described in NGM A. This is the
basis used by the Directors in assessing performance.
2024
$m
Restated
i
2023
$m
Operating (loss)/profit – consolidated income statement
(21.1)
51.5
Add back adjusting items (NGM A)
109.1
8.9
Adjusted operating profit
88.0
60.4
(Loss)/profit before tax – consolidated income statement
(33.5)
41.1
Add back adjusting items (NGM A)
109.1
8.9
Adjusted profit before tax
75.6
50.0
(Loss)/profit for the year attributable to owners of the parent
– consolidated income statement
(28.0)
110.3
Add back/(deduct) adjusting items after tax attributable to owners of the
parent (NGM A)
81.3
(76.3)
Adjusted profit for the year attributable to owners of the parent
53.3
34.0
cents
cents
Adjusted earnings per share:
Adjusted basic EPS
33.5
21.4
Adjusted diluted EPS
31.4
20.3
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Non-GAAP Measures
continued
Income Statement Non-GAAP Measures
continued
C. EBITDA
Purpose:
This profit measure is used as a simple proxy for pre-tax cash flows from operating activities.
EBITDA is frequently used by analysts, investors and other interested parties.
Calculation definition:
Adjusted results before interest, tax, depreciation, impairment of non-current
assets and amortisation.
2024
$m
Restated
i
2023
$m
Operating (loss)/profit – consolidated income statement
(21.1)
51.5
Add back adjusting items (NGM A)
109.1
8.9
Adjusted operating profit (NGM B)
88.0
60.4
Add back:
Depreciation of property, plant and equipment (note 11)
25.2
27.2
Depreciation of right-of-use assets (note 12)
7.2
6.6
Amortisation of other intangible assets (note 14)
5.9
6.6
Impairment of right-of-use assets (note 12)
–
0.2
Impairment of goodwill (note 13)
–
1.4
38.3
42.0
EBITDA
126.3
102.4
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Hunting PLC
Annual Report and Accounts 2024
256
Strategic Report
Corporate Governance
Financial Statements
Other Information
C. EBITDA
continued
EBITDA by Operating Segment
2024
Hunting
Titan
$m
North
America
$m
Subsea
Technologies
$m
EMEA
$m
Asia
Pacific
$m
Total
$m
Operating (loss)/profit (note 2)
(117.4)
45.5
25.6
(12.4)
37.6
(21.1)
Add back adjusting items (NGM A)
109.1
–
–
–
–
109.1
Adjusted operating (loss)/profit (NGM B)
(8.3)
45.5
25.6
(12.4)
37.6
88.0
Add back:
Depreciation of property, plant and equipment and right-of-use assets (note 2)
7.2
15.7
2.3
3.9
3.3
32.4
Amortisation of other intangible assets (note 2)
1.7
1.0
2.1
0.6
0.5
5.9
8.9
16.7
4.4
4.5
3.8
38.3
EBITDA
0.6
62.2
30.0
(7.9)
41.4
126.3
Restated
i
2023
Hunting
Titan
$m
North
America
$m
Subsea
Technologies
$m
EMEA
$m
Asia
Pacific
$m
Total
$m
Operating profit/(loss) (note 2)
12.7
33.7
8.0
(11.2)
8.3
51.5
Add back adjusting items (NGM A)
–
–
–
8.9
–
8.9
Adjusted operating profit/(loss) (NGM B)
12.7
33.7
8.0
(2.3)
8.3
60.4
Add back:
Depreciation of property, plant and equipment and right-of-use assets (note 2)
7.5
17.9
2.4
3.4
2.6
33.8
Amortisation of other intangible assets (note 2)
1.7
2.0
1.9
0.6
0.4
6.6
Impairment of non-current assets (note 2)
–
0.2
1.4
–
–
1.6
9.2
20.1
5.7
4.0
3.0
42.0
EBITDA
21.9
53.8
13.7
1.7
11.3
102.4
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Non-GAAP Measures
continued
Income Statement Non-GAAP Measures
continued
Hunting PLC
Annual Report and Accounts 2024
257
Strategic Report
Corporate Governance
Financial Statements
Other Information
D. Adjusted Tax Charge and Effective Tax Rate
Purpose:
The weighted average effective tax rate represents the level of tax, both current and deferred,
being borne by operations on an adjusted basis.
Calculation definition:
The adjusted taxation charge divided by adjusted profit before tax, expressed
as a percentage.
2024
$m
Restated
i
2023
$m
Taxation credit – consolidated income statement
8.0
71.1
Deduct tax impact of adjusting items (NGM A)
(27.8)
(2.1)
Deduct recognition of US deferred tax assets (NGM A)
–
(83.1)
Adjusted taxation charge
(19.8)
(14.1)
Adjusted profit before tax for the year (NGM B)
75.6
50.0
Adjusted effective tax rate
26%
28%
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Adjusting items are taxed on an item-by-item basis as shown in NGM A.
Balance Sheet Non-GAAP Measures
E. Working Capital
Purpose:
Working capital is a measure of the Group’s liquidity identifying whether the Group has
sufficient assets to cover liabilities as they fall due.
Calculation definition:
Trade, contract and other receivables excluding receivables from associates and
joint ventures, derivative financial assets not in a hedge and deferred bank fees, plus inventories less
trade, contract and other payables excluding payables due to associates and joint ventures, derivative
financial liabilities not in a hedge and retirement plan obligations.
2024
$m
2023
$m
Trade, contract and other receivables – non-current (note 18)
5.4
1.8
Trade, contract and other receivables – current (note 18)
261.5
251.4
Inventories (note 20)
303.3
328.4
Trade, contract and other payables – current (note 22)
(208.5)
(163.4)
Trade, contract and other payables – non-current (note 22)
(5.5)
(3.7)
Add: non-working capital US deferred compensation plan obligation
(note 22)
2.6
2.2
Less: non-working capital current other receivables and other payables
(3.3)
(0.8)
Working capital
355.5
415.9
Revenue for the last three months of the year
301.8
228.2
Working capital as a percentage of annualised revenue
29%
46%
For the purposes of the above calculation, annualised revenue is calculated as revenue for the last
three months of the year multiplied by four.
F. Inventory Days
Purpose:
This is a working capital efficiency ratio that measures inventory balances relative
to business activity levels.
Calculation definition:
Inventory at the year-end divided by cost of sales for the last three months
of the year multiplied by the number of days in the last quarter, adjusted for the impact of acquisitions
and disposals when applicable.
2024
$m
2023
$m
Inventories (note 20)
303.3
328.4
Cost of sales for the last three months of the year
227.1
172.7
Inventory days
123 days
175 days
Non-GAAP Measures
continued
Income Statement Non-GAAP Measures
continued
Hunting PLC
Annual Report and Accounts 2024
258
Strategic Report
Corporate Governance
Financial Statements
Other Information
G. Trade Receivables Days
Purpose:
This is a working capital efficiency ratio that measures receivable balances relative
to business activity levels.
Calculation definition:
Trade receivables, accrued revenue and contract assets at the year-end,
less provisions for impairment, divided by revenue for the last three months of the year multiplied
by the number of days in the last quarter, adjusted for the impact of acquisitions and disposals
when applicable.
2024
$m
2023
$m
Trade receivables (note 18)
195.0
204.7
Accrued revenue (note 18)
3.2
2.5
Contract assets (note 18)
23.7
17.5
Less: provisions for impairment (note 18)
(3.7)
(3.5)
Trade and contract receivables
218.2
221.2
Revenue for the last three months of the year
301.8
228.2
Trade receivables days
67 days
89 days
H. Trade Payables Days
Purpose:
This is a working capital efficiency ratio that measures payables balances relative to business
activity levels.
Calculation definition:
Trade payables, bank acceptance drafts and accrued goods received not
invoiced (“accrued GRN”) at the year-end divided by purchased materials and cash costs for the last
three months of the year multiplied by the number of days in the last quarter, adjusted for the impact
of acquisitions and disposals when applicable.
2024
$m
2023
$m
Trade payables (note 22)
41.4
62.5
Bank acceptance drafts (note 22)
92.4
–
Accrued GRN
6.9
6.3
Total payables
140.7
68.8
Purchased materials and cash costs for the last three months of the year
159.4
128.5
Trade payables days
81 days
49 days
I. Other Net Assets
Purpose:
Provides an analysis of other net assets in the Summary Group Balance Sheet in the
Strategic Report.
2024
$m
2023
$m
Non-current investments (note 17)
4.8
4.4
Non-working capital US deferred compensation plan obligation (NGM E)
(2.6)
(2.2)
Non-working capital current other receivables and other payables (NGM E)
3.3
0.8
5.5
3.0
J. Capital Employed
Purpose:
Used in the calculation of the return on average capital employed (see NGM S).
Calculation definition:
Capital employed is total equity excluding net (cash)/debt as applicable.
The Group’s capital comprised:
2024
$m
Restated
i
2023
$m
Total equity – consolidated balance sheet
902.3
950.1
Net (cash)/debt (note 26)
(70.7)
33.4
831.6
983.5
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Non-GAAP Measures
continued
Balance Sheet Non-GAAP Measures
continued
Hunting PLC
Annual Report and Accounts 2024
259
Strategic Report
Corporate Governance
Financial Statements
Other Information
K. Total Cash and Bank/(Borrowings)
Purpose:
Total cash and bank/(borrowings) is a key metric for management and for the Group treasury
function, which monitors this balance on a daily basis and reviews weekly forecasts to ensure there is
sufficient liquidity to meet business requirements. As the Group manages funding on a total cash and
bank/(borrowings) basis, internal reporting focuses on changes in total cash and bank/(borrowings)
and this is presented in the Strategic Report.
Calculation definition:
Cash and cash equivalents, comprising cash at bank and in hand, short-term
deposits of less than three months to maturity from the date of deposit and money market funds; and
short-term deposits of more than three months to maturity from the date of deposit; less bank overdrafts
and bank borrowings.
The Group’s total cash and bank/(borrowings) comprised:
2024
$m
2023
$m
Cash and cash equivalents (note 21)
206.6
45.5
Bank overdrafts secured – current borrowings (note 25)
(1.5)
(1.4)
Cash and cash equivalents – consolidated statement of cash flows
205.1
44.1
Bank borrowings – current borrowings (note 25)
(9.8)
(44.9)
Bank borrowings – non-current borrowings (note 25)
(90.6)
–
104.7
(0.8)
L. Net Cash/(Debt)
Purpose:
Net cash/(debt) is a measure of the Group’s liquidity and reflects the Group’s cash and liquid
assets that would remain if all of its debts were to be immediately paid off.
Calculation definition:
Net cash/(debt) comprises total cash and bank/(borrowings) (NGM K) less total
lease liabilities and the shareholder loan from a non-controlling interest.
The Group’s net cash/(debt) comprised:
2024
$m
2023
$m
Total cash and bank/(borrowings) (NGM K)
104.7
(0.8)
Total lease liabilities (note 24)
(30.1)
(28.7)
Shareholder loan from non-controlling interests – non-current borrowings
(note 25)
(3.9)
(3.9)
70.7
(33.4)
Cash Flow Non-GAAP Measures
M. Cash Flow Working Capital Movements
Purpose:
Reconciles the working capital movements in the Summary Group Cash Flow
in the Strategic Report.
2024
$m
2023
$m
Working capital – opening balance
415.9
362.8
Foreign exchange
(1.7)
1.7
Adjustments:
Transfer to property, plant and equipment (note 11)
(1.7)
(1.5)
Capital investment receivables/payables cash flows
0.1
0.6
Asset disposals receivables/payables cash flows
2.1
(1.5)
Other non-cash flow movements
0.3
(1.5)
Other cash flow movement
(6.2)
0.3
Working capital – closing balance (NGM E)
(355.5)
(415.9)
Cash flow
53.3
(55.0)
Non-GAAP Measures
continued
Balance Sheet Non-GAAP Measures
continued
Hunting PLC
Annual Report and Accounts 2024
260
Strategic Report
Corporate Governance
Financial Statements
Other Information
N. Capital Investment
Purpose:
Capital investment identifies the cash resources being absorbed organically within
the business to maintain or enhance operating activity levels.
Calculation definition:
Capital investment is the cash paid on tangible non-current assets to maintain
existing levels of operating activity and to grow the business from current operating levels and
enhance operating activity.
2024
$m
2023
$m
Property, plant and equipment additions (note 11)
25.2
23.1
Capital investment receivables/payables cash flows (NGM M)
0.1
0.6
Cash flow
25.3
23.7
Per the consolidated statement of cash flows:
Purchase of property, plant and equipment held for rental
– operating activities
1.7
0.6
Purchase of property, plant and equipment – investing activities
23.6
23.1
Cash flow
25.3
23.7
Capital investment by operating segment:
Hunting Titan
3.3
3.1
North America
10.3
14.5
Subsea Technologies
4.3
1.2
EMEA
2.0
2.4
Asia Pacific
4.7
2.2
Central
0.7
0.3
Cash flow
25.3
23.7
O. Other Operating Cash and Non-cash Movements
Purpose:
Reconciles other operating cash and non-cash movements in the Summary Group Cash
Flow in the Strategic Report.
2024
$m
2023
$m
(Decrease)/increase in provisions – consolidated statement of cash flows
(2.0)
0.5
Share of associates’ and joint venture’s results
0.1
0.6
Payment of US pension scheme liabilities
(0.2)
–
Other non-cash flow items
2.7
(1.3)
0.6
(0.2)
P. Free Cash Flow
Purpose:
Free cash flow is a measure of financial performance and represents the cash that the
Group is able to generate. Free cash flow represents the amount of cash the Group has available
to either retain for investment, or to return to shareholders and is a KPI used by management.
Calculation definition:
All cash flows before transactions with shareholders and investment by way
of acquisition. All the below items appear in the consolidated statement of cash flows, unless stated.
2024
$m
Restated
i
2023
$m
EBITDA (NGM C)
126.3
102.4
Add: share-based payment charge (note 37)
14.1
13.5
140.4
115.9
Working capital movements (NGM M)
53.3
(55.0)
Payment of lease liabilities, principal and interest
(8.9)
(10.4)
Net interest and bank fees paid
(12.9)
(7.3)
Net taxation paid
(3.5)
(9.1)
Purchase of property, plant and equipment
(23.6)
(23.1)
Purchase of property, plant and equipment held for rental
(1.7)
(0.6)
Purchase of intangible assets
(4.8)
(10.9)
Proceeds from asset disposals
1.7
1.9
Net gains on asset and investment disposals
(0.9)
(1.7)
Other operating cash and non-cash movements (NGM O)
0.6
(0.2)
Free cash flow
139.7
(0.5)
Reconciliation to the consolidated statement of cash flows:
Net cash inflow from operating activities
188.5
49.3
Net interest and bank fees paid
(12.9)
(7.3)
Proceeds from disposal of property, plant and equipment
1.2
1.9
Proceeds from disposal of investments
0.2
–
Purchase of property, plant and equipment
(23.6)
(23.1)
Purchase of intangible assets
(4.8)
(10.9)
Payment of lease liabilities, principal and interest
(8.9)
(10.4)
Free cash flow
139.7
(0.5)
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
Non-GAAP Measures
continued
Cash Flow Non-GAAP Measures
continued
Hunting PLC
Annual Report and Accounts 2024
261
Strategic Report
Corporate Governance
Financial Statements
Other Information
Other Non-GAAP Measures
Q. Dividend Per Share Declared
Purpose:
Identifies the total amount of dividend declared in respect of a period. This is also used
in the calculation of dividend cover (see NGM R).
Calculation definition:
The amount in cents returned to Ordinary shareholders.
2024
cents
2023
cents
Interim dividend
5.5
5.0
Final dividend
6.0
5.0
11.5
10.0
R. Dividend Cover
Purpose:
An indication of the Company’s ability to maintain the level of its dividend and indicates
the proportion of earnings being retained in the business for future investment versus that returned
to shareholders.
Calculation definition:
Earnings/(loss) per share attributable to Ordinary shareholders divided
by the cash dividend per share to be returned to Ordinary shareholders, on an accruals basis.
2024
Restated
i
2023
Adjusted
cents
Reported
cents
Adjusted
cents
Reported
cents
Earnings/(loss) per share
Basic (NGM B/note 10)
33.5
(17.6)
21.4
69.5
Diluted (NGM B/note 10)
31.4
(17.6)
20.3
65.9
Dividend
(NGM Q)
11.5
11.5
10.0
10.0
Dividend cover
Basic
2.9x
(1.5)x
2.1x
7.0x
Diluted
2.7x
(1.5)x
2.0x
6.6x
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
S. Return on Average Capital Employed (“ROCE”)
Purpose:
Measures the levels of return the Group is generating from its capital employed.
Calculation definition:
Adjusted profit before interest and tax as a percentage of average gross
capital employed. Average gross capital employed is a monthly average of capital employed based
on 13 balance sheets from the closing December balance in the prior year to the closing December
balance in the current year.
2024
$m
Restated
i
2023
$m
Average monthly gross capital employed (13-point average)
992.8
932.8
Adjusted operating profit (NGM B)
88.0
60.4
Return on average capital employed
9%
6%
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
T. Sales Order Book
Purpose:
The sales order book comprises the value of all unsatisfied orders from customers and
is expected to be recognised as revenue in future periods. It is presented by operating segment and
product group. Where amounts are not fixed in the contract, the Group exercises judgement on the
amount of the order that is booked.
Calculation definition:
Opening sales order book, add new orders booked, less amounts recognised
as revenue, adjusted for any order modifications/variations and foreign exchange impacts.
2024
$m
Restated
i
2023
$m
Operating segment
Hunting Titan
16.7
17.6
North America
207.3
288.7
Subsea Technologies
72.5
152.2
EMEA
50.2
29.9
Asia Pacific
186.9
115.8
Inter-segment elimination
(25.0)
(39.0)
508.6
565.2
2024
$m
2023
$m
Product group
Perforating Systems
16.5
12.7
OCTG
249.7
222.0
Advanced Manufacturing
130.0
161.5
Subsea
72.5
152.2
Other Manufacturing
39.9
16.8
508.6
565.2
i.
Comparative balances have been restated to exclude intra-segment sales orders.
The sales order book does not agree to the total transaction price allocated to unsatisfied and partially
satisfied performance obligations as defined by IFRS 15, disclosed in note 23(c), due to the practical
expedient that was applied and the Group’s assessment of contract enforceability.
Non-GAAP Measures
continued
Hunting PLC
Annual Report and Accounts 2024
262
Strategic Report
Corporate Governance
Financial Statements
Other Information
Financial Record
Income statement line items are presented after the impact of adjusting items.
2024
$m
Restated
i
2023
$m
Restated
ii
2022
$m
Restated
ii
2021
$m
2020
$m
Revenue
1,048.9
929.1
725.8
521.6
626.0
EBITDA (NGM C)
126.3
102.4
49.3
(0.4)
26.1
Depreciation and non-adjusting amortisation and impairment
(38.3)
(42.0)
(37.4)
(38.2)
(42.5)
Operating profit/(loss)
88.0
60.4
11.9
(38.6)
(16.4)
Net finance expense
(12.4)
(10.4)
(1.7)
(2.0)
(3.0)
Profit/(loss) before tax
75.6
50.0
10.2
(40.6)
(19.4)
Taxation (charge)/credit (NGM D)
(19.8)
(14.1)
(1.3)
(4.9)
0.9
Profit/(loss) for the year
55.8
35.9
8.9
(45.5)
(18.5)
cents
cents
cents
cents
cents
Basic earnings/(loss) per share (NGM B)
33.5
21.4
5.0
(27.1)
(10.0)
Diluted earnings/(loss) per share (NGM B)
31.4
20.3
4.7
(27.1)
(10.0)
Dividend per share
iii
11.5
10.0
9.0
8.0
9.0
$m
$m
$m
$m
$m
Balance sheet
Property, plant and equipment
252.8
254.5
256.7
274.4
307.1
Right-of-use assets
28.3
26.2
26.0
24.7
29.8
Goodwill and other intangible assets
84.5
195.2
191.2
200.3
207.1
Working capital (NGM E)
355.5
415.9
362.8
278.0
358.3
Associates and joint ventures
9.2
20.5
20.1
19.4
18.1
Assets held for sale
12.1
–
–
–
–
Taxation (current and deferred)
98.0
84.8
4.0
1.4
6.0
Provisions
(14.3)
(16.6)
(8.9)
(8.1)
(8.9)
Other net assets (NGM I)
5.5
3.0
4.3
2.7
1.6
Capital employed (NGM J)
831.6
983.5
856.2
792.8
919.1
Total cash and bank/(borrowings) (NGM K)
104.7
(0.8)
24.5
114.2
101.7
Lease liabilities
(30.1)
(28.7)
(30.6)
(31.8)
(40.3)
Other borrowings
(3.9)
(3.9)
(3.9)
(3.9)
(3.9)
Net cash/(debt)
70.7
(33.4)
(10.0)
78.5
57.5
Net assets
902.3
950.1
846.2
871.3
976.6
Non-controlling interests
(5.5)
(3.3)
(1.6)
(1.4)
(12.2)
Equity attributable to owners of the parent
896.8
946.8
844.6
869.9
964.4
cents
cents
cents
cents
cents
Net assets per share
547.2
576.2
513.2
528.4
592.2
i.
Comparative balances have been restated, see note 1 of the consolidated financial statements.
ii.
Comparative EBITDA balances have been restated to include share of associates’ and joint venture’s results. EBITDA for 2022 has been restated to include a $2.7m loss and 2021 has been restated to include a $3.5m loss. There was no impact in 2020.
iii. Dividend per share is stated on a declared basis.
Hunting PLC
Annual Report and Accounts 2024
263
Strategic Report
Corporate Governance
Financial Statements
Other Information
Shareholder and Statutory Information
Registered office
30 Panton Street
London
SW1Y 4AJ
Company Number: 00974568 (Registered in England and Wales)
Telephone: +44 (0)20 7321 0123
Email: lon.ir@hunting-intl.com
LinkedIn: https://www.linkedin.com/company/hunting-energy-services/
Financial calendar
The Company’s 2025 financial calendar is as follows:
Date
Event
6 March 2025
2024 Full Year Results Announcement
6 March 2025
2024 Final Dividend – Announcement date
18 March 2025
Publication of Annual Report and Notice of AGM
10 April 2025
Final Dividend – Ex-dividend date
11 April 2025
Final Dividend – Record date
16 April 2025
Trading Statement
16 April 2025
AGM and Proxy Voting Results of AGM
9 May 2025
Final Dividend – Payment date
14 July 2025
Trading Statement
28 August 2025
2025 Half Year Results Announcement
28 August 2025
2025 Interim Dividend – Announcement date
25 September 2025
Interim Dividend – Ex-dividend date
26 September 2025
Interim Dividend – Record date
23 October 2025
Trading Statement
24 October 2025
Interim Dividend – Payment date
Financial reports
The Company’s 2024 Annual Report and Accounts is available on the Company’s website from the
date of publication. Shareholders may elect to receive a copy by contacting the Registrar. Copies of
previous financial reports are available at www.huntingplc.com. In common with many public companies
in the UK, the Company no longer publishes a printed version of its half-year report. The half-year
report is only available online from the Company’s website at www.huntingplc.com.
Registrar
The Company’s Registrar, Equiniti, offers a range of shareholder information and dealing services
at www.shareview.co.uk. The address and contact details of Equiniti are as follows:
Equiniti Limited
Aspect House
Spencer Road, Lancing
West Sussex BN99 6DA
Telephone: +44 (0)371 384 2173
Equiniti is also the Company’s single alternative inspection location where, with prior appointment,
individuals can inspect the register of members.
Analysis of Ordinary shareholders
At 31 December 2024, the Company had 1,237 Ordinary shareholders (2023 – 1,263) who held
164.9m (2023 – 164.9m) Ordinary shares analysed as follows:
2024
2023
% of total
shareholders
% of total
shares
% of total
shareholders
% of total
shares
Size of holdings
1 – 4,000
69.6
0.4
71.3
0.5
4,001 – 20,000
11.3
0.8
10.0
0.7
20,001 – 40,000
3.6
0.7
4.2
0.9
40,001 – 200,000
7.7
5.1
7.4
5.4
200,001 – 500,000
3.5
8.0
2.3
5.4
500,001 and over
4.3
85.0
4.8
87.1
Further information on share capital can be found in note 33.
Hunting PLC
Annual Report and Accounts 2024
264
Strategic Report
Corporate Governance
Financial Statements
Other Information
Annual General Meeting 2025
The AGM of the Company will take place on Wednesday 16 April 2025 at the Royal Automobile Club,
89 Pall Mall, London SW1Y 5HS, commencing at 10.30 a.m.
Format and business of meeting
The 2025 AGM is planned to be an open meeting, with shareholders welcome to attend.
The formal business of the AGM will involve putting to the meeting a number of ordinary and special
resolutions. Details of the resolutions will be communicated to shareholders ahead of the meeting in
a formal “Notice of AGM”. The Notice will also contain explanatory notes that will provide details to
shareholders on how to lodge their vote. Those shareholders who have elected to continue to receive
hard copy documentation will also receive a proxy form, which will contain details of how to lodge a
vote by proxy.
The AGM is to be broadcast via the internet. Details of the web-link will be included in the Notice of
AGM. Prior to the formal business of the AGM, a presentation will be delivered by the Chief Executive.
The Directors have made available to shareholders the ability to submit questions ahead of the AGM.
These questions will be answered during the presentation noted above. Shareholders are therefore
asked to submit all questions, in relation to the business to be considered at the AGM, by Monday
14 April 2025, to the Company’s registered office, for the attention of the Company Secretary.
Alternatively, questions can be submitted via email at lon.agm@hunting-intl.com.
Shareholder voting procedures follow the provisions of the Articles of Association of the Company
(the “Articles”) and the UK Corporate Governance Code, including a separate resolution on each
material item of business, the availability of voting via proxy and the offer of a “vote withheld”.
Voting on all resolutions at the AGM will be completed via a poll. Shareholders may submit proxy
voting instructions in advance of the meeting by completing a proxy form, alternatively via the internet
at www.shareview.co.uk, or, shares held in CREST may be voted through the CREST Proxy Voting
Service, or, for Institutional Investors via the Proxymity platform. To be valid, all votes must be received
no later than 10:30 a.m. on Monday 14 April 2025.
As part of the routine business to be considered at the AGM, all Directors’ will submit themselves
for reappointment.
Documents on display
Copies of the executive Directors’ service contracts and letters of appointment of non-executive
Directors will be available for inspection at the Company’s registered office from the date the Notice
of AGM is issued (being 21 clear days’ notice ahead of the meeting) until the time of the AGM and
at the Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS from 15 minutes before the AGM
starts until it ends.
Non-financial information and sustainability statement
In accordance with section 414CA of the Companies Act 2006, the Company is required to provide a
non-financial information statement. The Company has chosen to present this information throughout
the Strategic Report as follows:
• Environmental matters, including the impact of the Company’s business on the environment
(pages 31, 73, and 82 to 101);
• Employees (pages 27, 28, and 78 to 80);
• Social matters (pages 32, and 78 to 80);
• Respect for human rights (pages 28 and 77); and
• Anti-bribery and corruption matters (pages 27 to 30, 77 and 78).
Included within these disclosures are details of policies, outcomes, risk factors and related
key performance indicators.
A description of the Group’s business model is provided on pages 20 to 32, non-financial
key performance indicators are on page 19, and the Group’s principal risks can be found
on pages 104 to 109.
In compliance with The Companies (Strategic Report) (Climate-related Financial Disclosure)
Regulations 2022, the Company has disclosed information that covers the eight areas required under
section 414CB of the Companies Act 2006. These disclosures form part of the Company’s TCFD
reporting for 2024, which can be found on pages 88 to 101 of this report. Hunting has reported
against all four pillars and 11 reporting areas as required by TCFD.
Shareholder and Statutory Information
continued
Hunting PLC
Annual Report and Accounts 2024
265
Strategic Report
Corporate Governance
Financial Statements
Other Information
Glossary
A
ABC
Anti-Bribery and Corruption.
ABL
Asset Based Lending.
ADIPEC
Abu Dhabi International Petroleum Exhibition
and Conference.
Adjusted*
Results for the year, as reported under IFRS,
adjusted for certain items as determined by
management, is the basis used by the Directors
in assessing performance and aids a more
effective comparison of the Group’s financial
performance from one period to the next.
AGM
Annual General Meeting.
AI
Artificial Intelligence.
API
Application Programming Interface.
B
Basic EPS/(LPS)*
Basic earnings/(loss) per share – calculated
by dividing the earnings/(loss) attributable
to Ordinary shareholders by the weighted
average number of Ordinary shares in issue
during the year.
bbl
Barrel of crude oil – one barrel of oil equals
159 litres or 42 US gallons.
BEIS
The UK Government’s Department for Business,
Energy & Industrial Strategy.
bn
Billion.
bopd
Barrels of Oil per Day.
C
c
Cents.
c.
Circa.
°C
The degree Celsius is a unit commonly used
to measure temperature. The Celsius scale is
created by defining 0°C as the freezing point of
water and 100°C as the boiling point of water.
CAD
Canadian dollar.
CAGR
Compound Annual Growth Rate.
Capital employed*
See NGM J.
Capital investment – “Capex”*
See NGM N.
CCUS
Carbon Capture, Usage and Storage.
CEO
Chief Executive Officer.
CFO
Chief Financial Officer.
CGU
Cash-generating unit.
CMD
Capital Markets Day.
CNOOC
Chinese National Offshore Oil Corporation.
CNY
Chinese Yuan Renminbi.
CO
2
Carbon dioxide.
CO
2
e
Carbon dioxide equivalent.
CO
2
e intensity factor
Scope 1 and 2 carbon dioxide equivalent metric,
reported as kilogrammes per $’000 of revenue.
CTR
Currency Translation Reserve.
D
DESNZ
UK Government’s Department for Energy
Security and Net Zero.
Diluted EPS/(LPS)*
Diluted earnings/(loss) per share – calculated
by dividing earnings/(loss) attributable to Ordinary
shareholders by the weighted average number
of Ordinary shares in issue during the year, as
adjusted to assume conversion of all dilutive
potential Ordinary shares. Dilution arises through
the potential issue of shares to satisfy awards
made under the Group’s long-term incentive
plans. When the effect of dilutive share options
and long-term incentive plans is anti-dilutive,
they are not included in the calculation of diluted
earnings/(loss) per share.
Dividend Cover*
See NGM R.
Dividend Per Share Declared*
See NGM Q.
DNS
Domain Name System security, this refers to the
technique of defending DNS infrastructure from
cyber attacks.
Downhole
Downhole refers to something that is located
within the wellbore.
DTA
Deferred Tax Asset.
E
E&P
Exploration and Production.
EBITDA*
See NGM C.
EBITDA margin*
EBITDA defined in NGM C divided by revenue,
expressed as a percentage.
Hunting PLC
Annual Report and Accounts 2024
266
Strategic Report
Corporate Governance
Financial Statements
Other Information
Glossary
continued
EBT
Employee Benefit Trust.
ED
Executive Director.
EMEA
Europe, Middle East and Africa.
EPS
Earnings Per Share.
ERP
Enterprise Resource Planning.
ESCC
Equity Shares in Commercial Companies.
ESEF
European Single Electronic Format.
ESG
Environmental, Social and Governance.
ETP
Effluent Treatment Plant.
ETR
Effective Tax Rate.
EUR
Euro.
Exajoules
A unit used to measure energy. 1 exajoule is
equivalent to approximately 163.46 million barrels
of oil equivalent.
ExCo
The Hunting Executive Committee.
F
5G
Fifth generation of cellular network technology.
FCA
Financial Conduct Authority.
FCF
Free Cash Flow.
FPSO
Floating Production, Storage and Offloading.
FRC
Financial Reporting Council.
Free cash flow*
See NGM P.
FRS
Financial Reporting Standard.
FTSE 250
The Financial Times Stock Exchange 250 share
index is a weighted index of the 250 largest
companies by free float market capitalisation
after the top 100.
FVTOCI
Fair Value Through Other Comprehensive
Income.
FVTPL
Fair Value Through Profit or Loss.
G
GAAP
Generally Accepted Accounting Principles.
GBP
British pound sterling.
GHG
Greenhouse Gas.
GRN
Goods Received Note.
GST
Goods and Services Tax.
GW
Gigawatts.
GWh
Gigawatt hour – 1 billion watt hours.
H
H1
The first half of the year, comprising the first
and second quarter.
H2
The second half of the year, comprising the
third and fourth quarter.
HCC
Houston Community College.
HPSP
Hunting Performance Share Plan.
HR
Human Resources.
HRSP
Hunting Restricted Share Plan.
HSE
Health, Safety and Environment.
I
IAS
International Accounting Standards.
ICBC
Industrial and Commercial Bank of China.
IEA
International Energy Agency.
IFRS
International Financial Reporting Standards
as adopted by the United Kingdom.
Incident rate
An OSHA recordable incident rate (or incident
rate) is calculated by multiplying the number
of recordable incidents by 200,000 and then
dividing that number by the number of labour
hours worked.
Intensity factor
The total controlled scope 1 and scope 2
emissions divided by the total revenue of
the Group.
Internal manufacturing reject rate
Percentage of parts rejected during
manufacturing processes.
Inventory days*
See NGM F.
ISO
International Organization for Standardization.
IT
Information Technology.
Hunting PLC
Annual Report and Accounts 2024
267
Strategic Report
Corporate Governance
Financial Statements
Other Information
J
JV
Joint Venture.
K
k
Thousand.
KOC
Kuwait Oil Company.
KPI
Key Performance Indicator.
Kyoto Protocol
International agreement between nations
to mandate country-by-country reductions
in greenhouse gas emissions.
L
Lean
A production practice that eliminates wasteful
processes, thereby reducing production time
and costs, and improving efficiency.
LNG
Liquified Natural Gas.
LTIP
Long-term Incentive Plan.
M
m
Million.
m3
Cubic Metre.
M&A
Mergers and Acquisitions.
mft
Millions of Feet.
mmBtu
1 million British Thermal Units.
MW
Megawatts.
MWD/LWD
Measurement-While-Drilling/Logging-While-
Drilling.
N
Net Cash/(Debt)*
See NGM L.
NGM
Non-GAAP Measure – see pages 255 to 262.
Near-Miss Frequency Rate
Near-Miss Frequency Rate is calculated by
multiplying the number of near-miss incidents
by 200,000 and then dividing that number
by the number of labour hours worked.
Non-GAAP Measure
The performance of the Group is assessed by
the Directors using a number of measures, which
are not defined under IFRS, and are therefore
considered to be non-GAAP measures
(see pages 255 to 262).
O
OCI
Other Comprehensive Income.
OCTG
Oil Country Tubular Goods – pipe and tubular
goods and products used in the oil and gas
industry, such as drill pipe, pipe casing and
production pipes.
OEM
Original Equipment Manufacturer.
OOR
Organic Oil Recovery.
OPEC
The Organization of the Petroleum Exporting
Countries. Comprises 12 member countries.
OPEC+
Comprises the OPEC 12 member countries plus
an additional 10 oil-producing countries.
OSHA
The US Occupational Safety and Health
Administration.
P
p
Pence.
p.a.
Per Annum.
PBT
Profit Before Tax.
PCB
Printed Circuit Board.
PPE
Property, Plant and Equipment.
PSP
Performance Share Plan.
PSU
Performance Stock Unit.
Q
Q1
The first quarter of the year, comprising January,
February and March.
Q2
The second quarter of the year, comprising April,
May and June.
Q3
The third quarter of the year, comprising July,
August and September.
Q4
The fourth quarter of the year, comprising
October, November and December.
QAHSE
Quality Assurance, Health, Safety and
Environment.
QMS
Quality Management System.
R
R&D
Research and Development.
RCF
Revolving Credit Facility.
Recordable incidents
An OSHA recordable incident is recorded if it
results in any of the following: death, days away
from work, restricted work or transfer to another
job, medical treatment beyond first aid, or loss of
consciousness. Also included are any significant
injuries or illnesses diagnosed by a physician or
other licensed health care professional, even if
it does not result in death, days away from work,
restricted work or job transfer, medical treatment
beyond first aid, or loss of consciousness.
Glossary
continued
Hunting PLC
Annual Report and Accounts 2024
268
Strategic Report
Corporate Governance
Financial Statements
Other Information
ROCE*
See NGM S.
RSU
Restricted Stock Unit.
S
S&P
Standard & Poor’s.
Sales order book
The value of all orders booked and expected
to be recognised as revenue in future periods.
See NGM T.
SASB
Sustainability Accounting Standards Board.
Scope 1
Scope 1 emissions are direct GHG emissions
from sources that are owned or controlled by
the entity. Scope 1 emissions include fossil fuels
burned on site, emissions from vehicles and
other direct sources.
Scope 2
Scope 2 emissions are indirect GHG emissions
resulting from the generation of electricity,
heating and cooling or steam generated off site
but purchased by the entity.
Scope 3
Scope 3 emissions are all other indirect
emissions that are not produced by the entity itself
and are not the result of activities from assets
owned or controlled by them, but by those that
it’s indirectly responsible for up and down its
value chain.
SDG
The United Nations Sustainable Development Goal.
SID
Senior Independent Director.
T
3D
Three-dimensional.
TCFD
Task Force on Climate-related Financial
Disclosures.
TCT
Titanium-lined Carbon Fibre Tubing.
TES
Total Energy Supply.
Total cash and bank/(borrowings)*
See NGM K.
Trade payables days*
See NGM H.
Trade receivables days*
See NGM G.
TSJ
Titanium Stress Joint.
TSR*
Total Shareholder Return – the net share price
change plus the dividends paid during that period.
U
UAE
United Arab Emirates.
UK
United Kingdom.
UKCFD
UK Climate-related Financial Disclosures.
US
United States.
USA
United States of America.
USD
US Dollars.
V
VAT
Value Added Tax.
W
Well completion
Well completion refers to the processes of
preparing a well for production. This involves the
assembly of downhole tubulars and equipment
required to enable safe and efficient production
from an oil or gas well.
Well construction
Well construction refers to the initial drilling and
processes of constructing the wellbore in an oil
and gas well. These processes typically include
drilling and logging the hole; running, cementing
and logging the casing; hydraulic fracturing or
stimulating the well and monitoring well
performance and integrity.
Well intervention
Well intervention refers to any operation carried
out on an oil or gas well that maintains or
enhances the production of the well or provides
well diagnostics.
Wellbore
The wellbore refers to the drilled hole.
Working capital*
See NGM E.
WTI
West Texas Intermediate – the price per barrel
of Texas light sweet crude oil.
WTW
WillisTowersWatson.
X
XHTML
Extensible HyperText Markup Language.
*Non-GAAP measure.
Glossary
continued
Hunting PLC
Annual Report and Accounts 2024
269
Strategic Report
Corporate Governance
Financial Statements
Other Information
Professional Advisers
Solicitors
CMS Cameron McKenna Nabarro Olswang LLP
Independent Auditors
Deloitte LLP
Joint Corporate Brokers
Canaccord Genuity Limited and
RBC Capital Markets
Financial Advisers
DC Advisory Limited
Insurance Brokers
WillisTowersWatson
Pension Advisers and Actuary
Lane Clark & Peacock LLP
Financial Public Relations
Burson Buchanan Limited
Registrars and Transfer Office
Equiniti Limited
Aspect House
Spencer Road, Lancing
West Sussex BN99 6DA
Telephone:
+44 (0)371 384 2173
Hunting PLC
Annual Report and Accounts 2024
270
Strategic Report
Corporate Governance
Financial Statements
Other Information
Hunting PLC
30 Panton Street
London SW1Y 4AJ
United Kingdom
Tel: +44 (0)20 7321 0123
Fax: +44 (0)20 7839 2072
www.huntingplc.com
Designed and produced by Gather
www.gather.london
Printed by Park Communications
This product is made of material from well-managed,
FSC
®
-certified forests and other controlled sources
Park Communications is certified to ISO 14001
Environmental Management System and the
EU Eco-Management and Audit Scheme (EMAS)
Independent auditor’s reasonable assurance report to the Members of Hunting PLC on the compliance of the Electronic Format Annual Financial Report with
Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R-DTR 4.1.18R
To the Members of Hunting PLC
Report on compliance with the requirements for iXBRL mark up (‘tagging’) of consolidated financial statements included in the Electronic Format Annual
Financial Report
We have undertaken a reasonable assurance engagement on the iXBRL mark up of consolidated financial statements for the year ended 31
st
December 2024
of Hunting PLC (the “company”) included in the Electronic Format Annual Financial Report prepared by the company.
Opinion
In our opinion, the consolidated financial statements for the year ended 31
st
December 2024 of the company included in the Electronic Format Annual
Financial Report, are marked up, in all material respects, in compliance with DTR 4.1.15R-DTR 4.1.18R.
The directors’ responsibility for the Electronic Format Annual Financial Report prepared in compliance with DTR 4.1.15R-DTR 4.1.18R
The directors are responsible for preparing the Electronic Format Annual Financial Report. This responsibility includes:
the selection and application of appropriate iXBRL tags using judgement where necessary;
ensuring consistency between digitised information and the consolidated financial statements presented in human-readable format; and
the design, implementation and maintenance of internal control relevant to the application of DTR 4.1.15R-DTR 4.1.18R.
Our independence and quality control
We have complied with the independence and other ethical requirements of Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We apply International Standard on Quality Monitoring (ISQM) 1 and, accordingly, maintain a comprehensive system of quality control including documented
policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Our responsibility
Our responsibility is to express an opinion on whether the iXBRL mark up of consolidated financial statements complies in all material respects with DTR
4.1.15R-DTR 4.1.18R based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with International
Standard on Assurance Engagements (UK) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information (‘ISAE (UK) 3000’)
issued by the FRC.
A reasonable assurance engagement in accordance with ISAE (UK) 3000 involves performing procedures to obtain reasonable assurance about the
compliance of the mark up of the consolidated financial statements with the DTR 4.1.15R-DTR 4.1.18R. The nature, timing and extent of procedures selected
depend on the practitioner's judgement, including the assessment of the risks of material departures from the requirements set out in DTR 4.1.15R-DTR
4.1.18R, whether due to fraud or error. Our reasonable assurance engagement consisted primarily of:
obtaining an understanding of the iXBRL mark up process, including internal control over the mark up process relevant to the engagement;
reconciling the marked up data with the audited consolidated financial statements of the company dated 06
th
March 2025;
evaluating the appropriateness of the company’s mark up of the consolidated financial statements using the iXBRL mark-up language;
evaluating the appropriateness of the company’s use of iXBRL elements selected from a generally accepted taxonomy and the creation of extension
elements where no suitable element in the generally accepted taxonomy has been identified; and
evaluating the use of anchoring in relation to the extension elements.
In this report we do not express an audit opinion, review conclusion or any other assurance conclusion on the consolidated financial statements. Our audit
opinion relating to the consolidated financial statements of the company for the year ended 31
st
December 2024 is set out in our Independent Auditor’s
Report dated 06
th
March 2025.
Use of our report
Our report is made solely to the company’s members, as a body, in accordance with ISAE (UK) 3000. Our work has been undertaken so that we might state to
the company those matters we are required to state to them in this report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company and the company’s members as a body for our work, this report, or for the conclusions we have
formed.
Thomas Murray, ACA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
29 April 2025