British energy services firms, Amec and Hunting, raised their interim dividends after solid first-half results, defying concerns that lower spending on oil and gas exploration would hit their activities.
Amec sounded the more bullish note of the two on its outlook on Thursday, saying it was on track to meet its 2010 EBITA margin goal of 8.5 per cent and that it expected a stronger performance in the second half.
Hunting said that shares in FTSE 100-listed Amec, which provides consultancy, engineering and project management services, dropped by over 6 percent on profit-taking. Its shares have gained 63 per cent so far this year.Hunting said that its second half would largely depend on drilling activity in the U.S., where it expects only â€œmodestâ€ activity. We are going to see the same activity that we are looking at now, which is certainly down from the same period last year,â€ Chief Executive Dennis Proctor told Reuters in an
interview. Analysts welcomed the results from both, highlighting improved margins at Amec. â€œWe believe that Amec possesses superior EPS visibility & growth potential across the group and it is our top pick,â€ Deutsche Bank analysts wrote in a note.Mike Stoddard at Daniel Stewart said Huntingâ€™s results were much better than he expected, with its core oil services division surprising on the upside. We expect both our forecasts and target price (currently 477 pence) to go up and for the shares to become a â€˜Buyâ€™,â€ he said.
Shares in mid-cap Hunting were up 2.9 per cent at 470.8 pence at 0852 GMT.For some, a disappointing performance from Amecâ€™s Power and Process division, which is focused on the Americas and the UK, took the gloss off robust numbers from its key Natural Resources division, which comprises its oil and gas services activities.