Hunting (LSE:HTG) — Investor Presentation

0:00 Good afternoon, and welcome to the HUNTING PLC Investor Presentation. Question, and press send. Company The may not be in a position to answer every question received during the meeting itself. I will review all questions submitted today and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Jim Johnson, CEO. Good afternoon.

0:30 Good afternoon. And I wanna thank everybody for taking part in this, presentation today. I'm gonna start kind of basic on on hunting itself and where we're at in the marketplace, why we're relevant to the energy story today. And it goes back to our a lot to our heritage that hunting next year will celebrate its one hundred and fifty year anniversary. And through that time, it's been a company that's been able to diversify, change with the times, and flex in its business model. But from the from day one to today, the focus has always been on high end engineering, bespoke products, high technology. HUNTING entered the oil field service business in the mid nineteen sixties. As the North Sea drilling boom was getting underway, there was a need for companies or businesses to establish to take care of one of the biggest cost drivers of an oil and gas well, which was oil country tubular goods or OCTG as we call it. Today, the company has evolved to a point where through acquisitions and through organic growth, the bulk of our sales, and human resource talents and facilities are actually outside of with the biggest preference being in North America, where about 80% of our headcount sits today.

1:47 I've been fortunate to have been with the company now thirty five years. I started as a young boy and worked my way up through the company through various positions. I'm joined today with by Bruce Ferguson, our CFO, which will be coming in on some of this to do some of the financial, questions and and and narrative. So as I go to the first slide, just to kind of brief you on where we're at right now, we have a very diversified product offering. The bulk of what we do is focused on the oil and gas extraction industry. We are one of the top players globally in perforating systems. We actually manufacture explosive charges at a facility in Texas. We manufacture perforating guns, and we are a leading supplier of those products to both conventional and unconventional wells.

2:37 The shale boom that has been unlocked over the last decade or so has been a huge plus to us, and now we're seeing that being transformative in places like Argentina, in Saudi Arabia, in Mexico, and unconventionals, and so the outlook is great there. There's a lot of IP. And first and foremost, we have the safest gun system out there in the industry today. Next on subsea, we're gonna show a lot more details on this, but our subsea platform consists of three businesses. One of them based in Houston, Texas that makes components to attach as as couplings to subsea trees. So it helps control the production trees that are sitting on the ocean floor, and we work with companies such as FMC.

3:25 The second part of our business is based in Aberdeen, Scotland, a company called EnPro. And EnPro makes kit that attaches to a subsea tree, but it allows the operator to more finely tune the tree's functions later in the production phase once more reservoir characteristics are known. The third part and maybe the most exciting part of the of this, subsea platform now is what we call our spring business. It's actually named after a town in Texas called Spring, Texas where it's located. But the main product there is, of evolves around revolves around titanium stress joints. So these stress joints are about 40 feet long, 30 feet long, made out of titanium, proprietary connections on the end, and their main goal in life is to add stability and safety for the production operations on a floating production unit offshore in deepwater.

4:23 And so with titanium, you have the corrosion resistance. And with our welding and machining technology, you have fatigue resistance that makes a life of these things twenty, thirty years. And another big section going back to where we started from and is still today our biggest revenue driver and profit driver through the first half of this year is OCTG, which stands for oil country tubular goods. In there, we supply accessories. We supply premium connections, which are really it's really a technology designed to join the tubing and the casing, but it it is those type of technologies that can withstand extremely high pressures, high temperature, and high compression and tension loads, which you find in geothermal, carbon capture, deepwater type applications.

5:13 Additionally, we have a part of our business where we focused on advanced manufacturing consists of an electronics facility in Houston, Texas and a machining facility in Freiburg, Maine. Those facilities are our biggest driver of non oil and gas business with a big emphasis on military, defense, aviation, and space, along with the fact that we supply key components that are mission critical for areas in drilling and completions as a manufacturer of logging tools and measurement when while drilling equipment for people like Halliburton Schlumberger. When I look at our core competencies on this slide three, I've talked about that to a degree. But, really, it boils down to the fact that we're experts on metallurgy.

6:01 We're experts on manufacturing and quality assurance, and we take all of that with and and work that in our product development. We have nearly 400 patents as a company. We focus on technology because that is what is gonna grow and maintain healthy margins in the business. Some of the fundamentals we're looking at, we are big believers in the oil and gas market lasting for decades and decades. We see continued strong demand for oil and gas. Oil demand today is at record levels even with an economy that's not really firing globally on all all cylinders. The world has a desire to get out of poverty. You're seeing massive growth in oil and gas consumption in places like India.

6:47 And we just believe that while there is a transition, that transition is gonna be a long time down the road. We will also participate in that, but we see the need for constant drilling to replace reserves that are being depleted. And in some cases, like in the shale plays in North America, these wells play out in just a matter of a few years. We are big believers in the ultra deepwater market. For us, those are the highest margin products. 70% of the world's covered by water. We just see that as a growing area. And, I mentioned a little bit about geothermal and carbon capture. We'll talk about that, but we literally have the products today to participate in that market. And in areas like geothermal, we are have historically been known as a supplier in the geothermal market on the subterranean side for more than twenty five years.

7:37 And additionally, as I mentioned, we're big believers in the in our non oil and gas business as well, which is our advanced manufacturing group. Highlights, we announced our earnings today. We came out with a very, very good set of earnings. In all honesty, the company is better positioned today than it may ever have been. We've went capital light in some of the areas of our business compared to where we were at four years ago, but we had strong results coming out of what was no doubt the worst downturn in my thirty plus years in this industry fall driven by the events of COVID, the lockdowns, and the collapse of oil and gas prices. But our revenue was up 42% year over year, strong growth. We're so confident in our order book and in our ability to generate profits. We have again raised our dividend to 5¢ for the half year. We have a we're looking at a dividend plan to continue to increase that at, hopefully, a 10% pace going forward.

8:35 Lots of international business coming forward as we talk about orders in India with Vendada. We had another order earlier this year that was nearly a record number with Chinese national oil company offshore China. We're seeing a lot of momentum in the international market for all of our product lines. We've signed up some partners for strategic alliances that will affect our OCTG business, and those alliances give us now all the tools in place to be able to take advantage of opportunities in the carbon capture and in the geothermal market. We talked on our earnings. We did some restructuring. We had some fine tuning to do. We we've we've had some E and P assets that were a small part of the business that we got rid of the first half of the year. We made some pit we're pivoting more to The Middle East where the activity for oil and gas is definitely growing by relocating a facility from The Netherlands to to Dubai.

9:34 And we did some, fine tuning of our Titan perforating gun business in The States with the closure of a facility in Oklahoma City, that we just didn't really need due to our focus on being a lean manufacturer and investment in places like Pampa, Texas and Monterrey, Mexico, where we also have these assets. We next slide, we talk about some KPIs. The biggest one for ours that I like to show is our sales order book. Our working capital numbers have increased a little bit year over year because we've had to get the orders, and we need to buy the materials in that to be able to go to market. So if you look at 2020 versus '23 where we're at now, huge increase. And as far as I can see or know, this is a record backlog level for the company.

10:19 Offshore global spending, talk about up up over 50% from '21 to '23. That's gonna continue to grow. Annual footage drill continuing to grow. We just see no signs of that slowing down, and those are good drivers for our business going forward. Next slide, we talk about revenue by product group. It shows you there the growth that we've seen since '22. The bottom line is our Titan business, which has been the main driver of our business through the recovery from the COVID downturn because it was the one area of the market that had strength that was a short cycle business. But the key message here is the massive growth we've seen in the OCTG business and how the other segments are also responding.

11:06 Slide number eight, we talked about our EBITDA margin increase. We went through the horrors of 2020 and 2021. We've reached we did some restructuring. We took cost out of the business, and the volumes have improved along with pricing for all of our items that we're now at a 10% EBITDA margin. Our goals are to have that 15% or better by 2025. On revenue growth by area, you can see that the, explanation of the revenue expansion by different product lines, the five main product lines there. I think enough it says enough by just looking at the graphs. And the the key is all of those businesses have a driver focused not only on domestic North America, but on the whole international market.

11:53 On the bottom of this slide, we also break out numbers showing our nonoil and gas revenue to oil and gas revenue. I talked earlier about our record order book. Pretty clean there, but there it gives you an idea of what it is by product line. One of the key things to note is our perforating business, which is the Titan business, really never has a backlog. So that's a business that is very it's not sporadic, but it's based on well designs and when customers complete wells, when they get wireline trucks. So you have you don't have a lot of visibility more than thirty days out. So that's why you're never gonna see probably a $100,000,000 backlog at Titan. But the rest of them, you can see the steady growth and where we're at with that. And with that, I'm passing it over to Bruce Ferguson.

12:41 Thanks, Jim. This is Bruce Ferguson. I've been I'm finance director at HUNTING PLC, and I've been with HUNTING for almost thirty years. I'm gonna take you through through the key financial statements to give you a feel for the the company in terms of the financial main KPIs. The first slide we have is the adjusted group income statements, and this shows the the momentum that Jim is describing in terms of the commercial activity in the sales order book. So we see first first column there is first half twenty twenty three. We see that revenue growth that Jim is talking around, a 42% increase in the first half of twenty two, showing good momentum. We show all our our profit and margin percentages improving year on year. We've now got EBITDA back to a 10% margin.

13:30 Just to put in context, before COVID, that EBITDA margin being close to 15%, and that's a trajectory we're now on as we see that recovery coming through. The figures we show the profit for tax increasing significantly, that's now leading to an earnings per share of 9.6¢. And that confidence in the earnings, the order book allows us to declare a dividend of 5¢. We are keen to return cash to our shareholders. The next slide talks to the international demand that's driving the activity. Those KPIs that Jim is talking around, the international markets, the Brazils, the Guyana, The Middle East, the strong activity there. I believe that demand will continue to increase going forward. So again, that's broken down into the various segments.

14:17 The one that's holding firm despite The US rig count falling is HUNTING TITAN. You can see the sales and EBITDA holding the line there, and all other segments are increasing in line with those KPIs we just discussed.

14:32 Our next slide is looking at our results on a product line basis. We've got four key product lines that Jim described. We've got our OCDG, which is round about 45% of our revenue. That is international. That covers US. It covers Asia Pac. It covers Middle East, and that's showing fantastic growth doubling from our h one twenty two figures to what we saw at the end of June in '23. The perfecting systems relates to the perfecting business in The States, but also we've got good growth coming through in terms of international business for perforating systems. If you take those two product lines together, that's between 7075% of our total revenue. The other two key product lines, the first one is advanced manufacturing, and that relates to a high precision engineering product lines, electronics, making components for the aerospace and other non oil and gas divisions.

15:32 That's that's seeing good growth. It's also showing a major order book, so we we can fly in the sight for that business coming forward for not just the remainder of this year, but future for future periods as well. The subsea is a product line we're very excited about. Again, good growth from from prior periods, good order book of over 100,000,000, and that is gonna benefit from the major projects we're seeing in the likes of Guyana, Brazil, and elsewhere. I'm just gonna take you quickly through the balance sheets. Again, the couple of key items here we draw out. One, we've got a very strong balance sheet. We've got very low debt. When we look at compared to EBITDA, we're running at a one times EBITDA level, so very strong platform for future growth. We've got net assets of $85.06, so we're we're heavily discounted in terms of our current market cap to that.

16:24 But it's a really strong balance sheet. We've got levels of debt that we can contain and that we're gonna unwind in terms of the of the next six months and drive that back into a positive cash position by the end of the year. The cash flow is always key for us in terms of driving through that cash, and we're starting to see the earnings increase. That's benefiting our cash flow. We have for the working capital absorption as the business increased. We know that that's required in terms of funding that expansion. But we still if you look further down the the cash flow, we've got small amounts of capital investments comparison to some of the other outlays that's running below our depreciation levels It's not a capital intensive business, so it does throw off good cash.

17:13 Our typical yield would be 70% in terms of EBITDA to free cash flow. That's a normalized position. So we do generate good cash, and that does give us optionality in terms of returning cash to shareholders and funding future growth for the business. Our closing cash and borrowings at the moment is $5,051,000,000. In terms of the slide I'll finish on is our guidance to the market. We were successful in hitting our guidance for the the first half year. We're now guiding a similar h two performance for the remainder of the year to give us EBITDA performance of 96 to a 100,000,000 for the full year. As I said earlier, EBITDA margins are improving. Period on periods, we're looking at 10%, so 11% by the end of the year.

18:02 That's reflecting sales price increases we're seeing coming through, improved throughput through our facilities, and the general comps we have and market activity. Year end cash will be between 0 and 25 as we unwind that working capital on the balance sheet. And we are confident and we're confident enough to declare the guidance for next year, and that is showing further significant growth from the 100,000,000 in '23 up to level of between 125 and $135,000,000 next year. And that's supported by the key fundamentals on the market, but also a strong order book and the momentum going into next year. Okay. Thanks, Bruce. Now back to me. We're we're gonna now take some time and go over some more product on by product information to give you more update on that and what we're doing right now. On the OCTG business, again, it's been strong. Asia, US and US have both been strong.

19:00 A lot of completion OCTG activity in South America this year and Middle East. Guyana has been an extremely strong market for us dealing with the Exxon project down there. And if you saw the news yesterday, Exxon just announced another $16,000,000,000 they're gonna spend on phase six of Guyana. So it's gonna be many, many years of development in that market. The thing about our OCTG businesses, it all circles and comes back to our technology, our proprietary technology, and the way in our in our ability to be a premier manufacturer. And so we have premium connection technology whether it's in a well in 5,000 feet of water in a 30,000 foot depth or it's an onshore shale well in the Permian Basin, we have the right products for the right applications for that.

19:50 Next slide, I wanna talk about perforating systems we mentioned about earlier. It is, good to note that actually our q two numbers where our revenue was up 3% over q one. There was a question, I think, part of it about our peers. One of our biggest competitors was also up 3% q two to q one. The other two public competitors were down 1020% respectively in that period. One of the areas in the Titan business that we are proud of, but it always affects our second quarter performance is we are number one by a far range in the Canadian market. But in Canada, if you know anything about the oil industry up there, it suffers in q two every year for what's called breakup period. So there's road bans, there's no drilling, nothing happens. So it's technically always a weaker quarter in Canada matters to us.

20:43 Perforating guns, we've made a change to the h three system replacing our h one gun system. Again, integrated gun system, high technology, hundreds and hundreds of thousands of both of these guns shot without any incident rates, no failures. We, we went to the h three primarily as a benefit for us internally to lower cost. It wasn't so much of an improvement performance wise for the comp for the client as it was our second generation with cost savings and lean manufacturing embedded in to the design of that. The h four gun will be really just hitting the market now. That is a a gun for a more precise orientation of the perforating gun downhole. And, again, we've had some big major sponsor clients like Apache, like like Diamondback in the Permian. They've used the product already. It works great. We're excited about our opportunities for that going forward.

21:39 Saying that, we anticipate this year to be relatively flat on the Titan side for the second half, probably as most analysts are saying, maybe down a little in q three and then a rebound in q four. But based on depletion, based on the growth we've seen in our international Titan sales, we are set up, we think, for a very good 2024. Advanced manufacturing, our Dearborn facility in Maine, electronics facility in Houston, high portion of non oil and gas. But really everything we do there, we have a reputation for providing mission critical equipment. Our electronics business is what we call famous for shake and bake. So lots of lots of shaking, you know, just people trying to destroy these tools downhole as well as heat and temperature issues. And so your run of the mill electronics manufacturer cannot provide this type of equipment. We provide the boards for some of the most advanced MWD equipment in the world as well as applications in medical and in defense.

22:44 The Dearborn business, as we mentioned, more non oil and gas than oil and gas. We're extremely well known in the world, thanks to our certifications on the in as far as military goes as well as different other energy qualifications that we've done. Great businesses. Struggled through supply chain issues for the last two years because of steel mills being shut down, labor issues. You could not get third party approvals on products from clients. All of that is starting to go away, and so we're pretty optimistic on our AMG business going forward. Subsea, I talked about earlier. Again, three avid or three three legs to that stool that we sit on. All three of them seeing a big increase. The EnPro business was pretty stagnant for about the last year until really starting in July, and we've had a nice uptick in orders there.

23:37 And, again, it's been a it's been just a part of the cycle. The titanium business going strong. We're expecting substantial orders coming out of, Guyana here soon for different phases of the work down there. And, again, our Stafford business where we make the couplings has a huge increase in backlog boding well for the activity next year. Other manufacturing, we have a trenchless business that makes small diameter drill pipe for the onshore utility business, like running fiber optic cables and the like. That business is doing a okay. It could be better. Well intervention, it's a business with product lines manufactured in The US, Aberdeen, Scotland, and in Singapore. It's tied into the more of the workover type side of the business, the completion side of the oil and gas wells. And it's these are these are capital equipment items that we sell primarily to the other major service companies.

24:34 After a couple years of flat activity because nobody was spending CapEx, that's back right now. And then, again, our well testing business, we're actually in the process of relocating that from Holland to Dubai because that's where the market has shifted to. The better opportunities are there. The cost basis is lower. So that's the plans for that. Energy transition, talked about briefly about the alliances that we made with people. There's some examples of connections that have been tested. But really the key is is we have everything in place to benefit from these opportunities. We think it's going to be a substantial market going forward. It's small today, but I wanna remind you all that HUNTING has been in the geothermal business for over twenty five years, supplying proprietary products in places like The Philippines, Indonesia, Southern California.

25:27 Again, focus on strategy and our strong investment proposition. We have a we are a company with a great heritage, a great legacy, and a great culture, and our people drive the successes that we had. When the business turned down from COVID, we knew that we needed to preserve our intellectual property, only just in patents and product lines, but in people as well who who are these these teams that drive innovation in our company. So we were very very cautious. We took dramatic steps, but still cautious that we could have the tools needed to come back and build a $500,000,000 backlog, that we did have the tools to bring out new products like the h three and h four gun or new subsea products. So that's kind of how we've positioned the company right now. We've seen, we've as they say in Texas, this wasn't our first rodeo in this downtime. So we're also fortunate with a very experienced management team that knows how to run businesses in this environment.

26:25 We have a blue chip customer base, from the majors, the Chevrons, the Total's of the world, to major service companies like Schlumberger and Halliburton to international players like CNOC, Kuwait Oil Company, and others. So there's hardly anybody out there in the energy side that doesn't know us or that we haven't supplied or are supplying at one time. HS and E, I mentioned at our announcement today, we literally have the best safety record today in the company's history. We're looking at incident rates that and how how our team reacts to being in the shops working safely every day. We put a lot of emphasis on HS and a, a lot of emphasis on quality, doing things right the first time because at the end of the day, they're the right thing to do from a corporate citizen point of view, but they also hit the hit the the, p and l statement if you don't do it right. And you wanna make sure you're keeping your clients.

27:19 And today, ESG rolling into the whole ESG platform is an important part of what we do. And so, again, high exposure to a lot of great markets that are really, we feel, in early days of of taking off to bigger and better lengths. And I think we've shown with this first half results, we can generate profits. We can improve our margins, and that's our goal going forward. So with that, I think I'm done. And Ben, I'll pass it to you or That's fantastic. Jim, Bruce, thank you very much indeed for the presentation. And ladies and gentlemen, do please continue to submit your questions just using that Q situated in the right hand corner of the screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you, recording of the presentation, along with a copy of the slides and the published Q and A can be accessed via your investor dashboard.

28:06 I'd now like to hand you over to Ben Romney to host the Q and A. Ben, as you can see, we had a number of questions come through throughout today's presentation. Thanks to all the investors for submitting those. If I can ask you just to read out the question where appropriate to do so and direct it to a member of the team, and I'll pick up from you at the end. Absolutely. Thank you very much.

28:24 Jim, can you comment on North America activity and how the lower rig count, the longer laterals and concentration of larger public producers impact HUNTING's outlook? Yes. So I mean, obviously, the North American rig count has been a disappointment this year. I mean, I think we're down, you know, week it seems like week after week, we and we apparently haven't found the bottom yet. So I don't know where that's at. The the feeling from most analysts are that we are close to being there or definitely will be in q three. A lot of that bottom was driven by the fact that we had oil prices fell down starting with a six in the first half of the year. We had a big fall off in natural gas prices, Then you have

29:07 uncertainty about just the macro banking issues, China, lots of factors as well as some consolidation in the industry issues from the E and P players, which slowed some things down. When a Chevron buys a company like PDC in The Rockies, there's a there's a falloff in rig activity. On the lateral lengths, I just, some data last last week that I saw, we're only up about five or 600 feet more year over year as far as the average extended length. We're a little over 10,000 foot in lateral lengths on the existing compared to year over year. That's all good. The longer, the better for us. We think that there there runs in the issues with lease limitations and the like, but that trend should continue, and that's a good thing for hunting.

29:58 The longer those laterals, it's gonna be more guns, longer completion strings, and so we we like that. And I think the out I think, again, the outlook, they're not gonna be getting shorter. So that's only gonna expand. Thank you. I've got a question here, which you already touched on regarding performance in q two versus some of your peers. But I guess the wider question is how do you how do you maintain and and grow market share for hunting?

30:24 Well, market share is one of those things that there's one way to do it by price, which I'm not really concerned about. And I'd I'd be I wanna be more profitable rather than have market share. But we have a very commanding, very large market share position. We have had a transition going on by the changing of gun technology. We think and and be quite honest, we had some stumbles in there from supply chain issues and the like. We think all those are behind us. The other thing, HUNTING from its other competitors, we definitely had a larger market share in many of the natural gas plays in North

30:56 America, like the Haynesville, like the Marcellus back back in Appalachia. Those areas got pretty, pretty well hit in the downturn because of gas prices and the percentage dropping as far as rig count goes. But we're pretty confident we will continue to be a leader in in the perforating gun business. And that segues quite nicely to the next question, which is profitability has been pretty flat for Titan. I mean, how do you grow that business going forwards? And how much of an impact has inflation had on performance over the last year or so? Well, the inflation factor seems to be falling away. So not a lot of inflation issues to talk about right now. It seems to be pretty stable. Being that we're a manufacturer, one of the things that helps profitability is volumes.

31:42 And again, following the rig count, demand has been flat lined more this year. So we really just again, we need the market to continue to expand, and we will have our fair share with that going forward. Okay. And

31:56 got a question on deflation. O OCTG was named as one of the main categories where producers see deflation. Can you comment a bit on where where you see this and its impact on hunting? Yes. So let me just make it very clear because I don't want our OCTG business to be factored into what Tenaris or Valeric do. We don't really care what the price of OCTG is because I'm not the mill. So at the end of the day, what we do is provide our technology, which is the premium connections on other people's pipe. And in cases where we do buy pipe and supply the whole package, like in Asia Pac, we buy for a specific order. We don't have inventory,

32:34 speculative inventory on the ground. And so my exposure to the pipe price is pretty minimal, if any. Because at the end of the day, in the in North America, for example, we work through distributors primarily owned by Japanese trading companies. So the risk of the pipe price is not my concern. Great. Bruce, this is one for you. You talked about the EBITDA '24 guidance, which How obviously shows strong confident can you be in achieving that given you know, the the volatile North American exposure and and Titan outlet?

33:12 Yeah. We are confident, and that's why we decided to put the guidance out there, Ben. We we do recognize the fact that Titan has been flat, but what is growing our business and why we're confident putting the guidance out there is that international offshore subsea growth. We've got a very good order book, a record order book going into second half of this year that will lead into to next year as well. We're seeing the benefits of substantial cost reductions over the last few years to the COVID period. That's gonna help our bottom line profitability.

33:44 And all that together with high utilization along with modeling the the markets, the KPIs, and the market share that we'll get from those strengths and order books gives us the confidence that we can achieve that guidance. Great. Thank you. In terms of Asia Pac, you obviously had two very large OCTG orders. Has profitability from those orders been realized in h one, or will they roll into h two? Majority of that will be h two. And then we've got the we've got a $990,000,000 order for Kiran India that is gonna be spread over three years. So one third will be through this year, and then, obviously, the two thirds will be equally split through '24 and '25. Okay.

34:31 How much extra revenue could you generate from your existing cost base and infrastructure, and and how do you manage the sales process globally?

34:40 Well, the sales process is different by each product line. But for hunting, we have sales specialists by product line. For example, a guy selling premium connections needs to know all the intricacies of premium connections, the performance of materials, and the like. And so he is different from the guy out there talking about the ballistic capabilities of our perforating gun charges. The same with a guy doing subsea. So globally, in the places that we need to have salespeople, we have business development salespeople focused on their product lines. And and what we find is by our customers as well,

35:16 customers, for example, buy by product line. There are people with Exxon. All they do is OCTG. They'll go in there and talk about perforating guns. They don't wanna know. But in certain ways, we can do some bundling of our knowledge and especially in areas like subsea where you do get people on the same teams that do do that. What was the first part of the question again? First question was about how much extra revenue can you generate from your existing cost base and infrastructure? Infrastructure.

35:43 As they say in Louisiana, we have lots of room to raise our revenue numbers up right now. Our utilization as a company, depending on how you wanna do it, is probably right now around 40. So we have plenty of capacity in our operations in Asia for the OCTG business, our perforating gun business, subsea, the whole bit. So I hope I have those challenges ahead of me. I've got a question here, which is probably something that we're all asking ourselves. It's it's the share price reaction on on the

36:13 back of what has been a a very solid half year and and even more positive out there. What what are your thoughts on that? I can't tell you how disappointed I am today with the share price. So I guess for all of you out there, the 70 so are you that are out there today, I I'll tell you, shares are on sale by now. You'll probably you might never get a better price because, honestly, I don't understand what people were expecting or looking at. The company is performing extremely well. We gave great guidance. There's concern, oh, you got working capital. Well, that working capital has funded and is funding

36:45 the 500 plus million dollars in orders that we have in our backlog right now. So it's it's it's perplexing to us on why it is down today. One of the things that I think is important, all of our analysts have us right now on a buy. I think there's nine of them. All of us have it as a buy based on today's results and earlier with a target of £4 or more. So it's like, man, there's money on the you know, people are leaving money on the table today. And the other thing that we did that I think is appropriate and good, we

37:17 raised our dividend today. So that to me was another vote of confidence in what we do. We're we're selling today at a 40% discount to our net asset value, and I just don't understand. So I'm perplexed. And you've got a commitment to shareholder returns, presumably, you know, the scope to grow those as you deliver the strategy and the growth?

37:40 Absolutely. Yeah. The business will generate excellent cash over the next decade. And one thing we like to do is return that cash to shareholders and dividends as a progressive growing dividend policy. So that is something that's definitely on the cards. Great. Well, I think we've addressed all the questions that have come through so far. I'll hand back to to our operator. That's fantastic, Ben. Thank you very much, Jim, Bruce as well. Thank you for covering our first questions. Of course, any further questions do come through, you will have the ability to review those, and we'll publish those responses where appropriate on the Investor Meet company platform. Jim, I know you have given a few closing comments, but and a very positive one of that. But just before redirecting investors to provide you with their feedback, which I know is particularly important to you and the company, if there's anything further to add, please do let us know. No, I will.

38:26 I mean, again, I want to thank for their time. We have an exciting story. We're a company that's been around a long time, but it's a it's we're also very aggressive and focused on the future. That's fantastic. Jim Bruce, look, thanks for updating investors' stake. Can I please ask investors not to close the sessions? You'll automatically be redirected to provide your feedback in order the management team can better understand your views and expectations. This will take only a few moments to complete, and we know it's greatly valued by the company. On behalf of the management team of HUNTING PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.