Downgraded FY outlook Hunting updated 1H profit guidance at the mid-July pre-close trading update so the 1H adjusted EBITDA loss of $3.6m was in line with this lowered guidance. Activity levels across its end markets have been improving, but at a slower rate than previously anticipated. This has led to a revised full year outlook, which looks likely a significant downgrade to FY21 adjusted EBITDA expectations. The Hunting Board now anticipate EBITDA to be $10m lower than in FY20 ($26m). We put our forecasts under review and see scope for consensus (currently $31m on FactSet) to reduce by c.50% to c.$16m. 1H outturn as expected 1H revenue was $244m, down significantly in 1H20 but broadly flat H-o-H. Adjusted EBITDA was a $3.6m loss, in line with mid-July pre-close guidance for a modest loss. Towards the end of the period, growth is seen across most end markets. CV19 is still impacting International (non-US) activities, although a steady improvement through 2H21 and into FY22 is still expected. Strengthening order book On a more positive note, the order book for FY22 is improving visibility and management are encouraged by progress. We do see new products and services, like Organic Oil Recovery, providing medium-term growth opportunities. Net cash provides protection and strategic options A net cash (pre-IFRS 16 adjustments) balance sheet of $106m gives strategic options and is allowing selected M&A, like the Cumberland additive manufacturing investment two days ago. It also allows for the continued payment of dividends (1H dividend 4.0c, as expected). The company is also launching an ADR programme. Forecasts, TP and Rec under review We put our forecasts under review given this latest downward revision to guidance. We also put our Buy rating and TP under review and will be looking for increased disclosure on Hunting’s energy transition strategy in today’s presentation. While the strong balance sheet provides some protection from making significant shifts in business activity, we believe the valuation could be held back by the continued focus on conventional oil & gas end markets.