TIDMFSJ
RNS Number : 9080K
Fisher (James) & Sons plc
07 September 2021
7 September 2021
James Fisher and Sons plc
Half year results for the six months ended 30 June 2021
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'),
the leading marine service provider, announces its unaudited
results for the six months ended 30 June 2021 ('the period').
H1 2021 H1 2020 % change
Revenue GBP233.7m GBP258.1m (9.5)%
Underlying operating profit margin 5.7% 7.6% (190)bps
Return on capital employed 5.4% 6.6% (120)bps
Underlying operating profit * GBP13.3m GBP19.5m (31.8)%
Underlying profit before tax * GBP9.2m GBP15.1m (39.1)%
Underlying diluted earnings per share ** 12.8p 23.6p (45.8)%
Statutory operating profit GBP12.2m GBP11.5m 6.1%
Statutory profit before tax GBP8.1m GBP7.1m 14.1%
Statutory diluted earnings per share 26.8p 9.9p 170.7%
Interim dividend per share Nil 8.0p -
* excludes separately disclosed items of GBP1.1m loss (2020:
GBP8.0m loss) (note 5)
** excludes separately disclosed items of GBP7.1m (2020: GBP6.9m
loss) (note 5)
Highlights:
-- First half results in line with the Board's expectations
against the backdrop of end markets that remain impacted by
Covid-19
-- Q2 performance showed a marked improvement over Q1
-- Strengthening order books, particularly in decommissioning
and offshore wind, following high tender wins in H1
-- New strategy to deliver sustainable profitable growth announced in June 2021
-- Sale of the Paladin dive support vessel completed in the period for $17.3m
-- GBP130m of revolving credit facilities renewed for three-year
term, providing access to facilities of GBP287.5m in total and
GBP247.5m through to at least 2024
Commenting on the results, Chief Executive Officer, Eoghan
O'Lionaird, said:
"Our first half result was in line with the Board's
expectations, with Q2 showing a marked improvement over Q1. The
Group is expecting performance to improve during the second half of
the year as our end markets recover from the disruption caused by
the effects of the global pandemic.
However, we experienced weaker than anticipated trading in
Fendercare and lower short-cycle order intake at JFD during the
important summer period and this, combined with project suspensions
in Mozambique, lead the Board to now expect underlying operating
profit for 2021 to be around the same level as that achieved in
2020.
Looking beyond 2021, forward-looking order books in our
long-cycle businesses are strengthening following high levels of
tendering activity and contract wins year-to-date which gives the
Board confidence in the Group's future prospects.
James Fisher's new strategy to deliver sustainable profitable
growth is progressing well. The Group is focused on capitalising on
its leading market positions within the marine, energy and defence
markets and is well placed to benefit from the market recovery and
meet its mid-term financial targets."
For further information:
Chief Executive
Officer
James Fisher and Eoghan O'Lionaird Chief Financial
Sons plc Duncan Kennedy Officer 020 7614 9508
Richard Mountain
FTI Consulting Susanne Yule 0203 727 1340
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Notes:
1. James Fisher uses alternative performance measures (APMs) as
key financial indicators to assess the underlying performance of
the business. APMs are used by management as they are considered to
better reflect business performance and provide useful additional
information. APMs include underlying operating profit, underlying
profit before tax, underlying diluted earnings per share,
underlying return on capital employed and cash conversion. An
explanation of APMs is set out in note 3 in these half year
results.
2. Certain statements contained in this announcement constitute forward-looking statements. Forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of James Fisher to be materially different from future results, performance or achievements expressed or implied by such statements. Such risks, uncertainties and other factors include exchange rates, general economic conditions and the business environment.
Review of the six months ended 30 June 2021
Overview
The Group's performance in the first half of 2021 was in line
with the Board's expectations with Q2 showing a marked improvement
on Q1 across the Group. The end-markets in which we operate are
recovering as the world continues to manage the global pandemic. We
have seen encouraging levels of tendering in the offshore wind and
decommissioning markets in particular, for projects starting later
in 2021 and into 2022 and beyond, and Group tender wins in the
first half were at a record level within Marine Contracting.
Strategic progress
The Group announced its new strategy to deliver sustainable
profitable growth at a Capital Markets Event held on 29 June 2021.
The new strategy aims to refocus the Group and reinforce its
competitive advantages in attractive niches within the Energy,
Defence and Marine markets and to deliver stronger sustainable
returns.
A full portfolio review has been undertaken and the Group is
committed to addressing underperforming assets and businesses and
accelerating investments into the energy transition. To that end
the Paladin dive support vessel, against which a significant
impairment charge was taken last year, was sold for $17.3m during
the period. The Group is in discussions with regard to the
potential sale of the Swordfish dive support vessel, which has the
benefit of a long-term framework agreement for its use with a major
contractor.
Good progress has been made within the rapidly growing global
renewables sector, with the Group winning a number of offshore wind
projects in France and the UK, including St. Brieuc and Fecamp off
the French coast and the Sofia wind farm in the Dogger Bank. The
Group has also seen increased usage of its 'bubble curtains'
product offering, which uses compressed air to create a wall of
bubbles around noisy subsea works, protecting local wildlife and
reducing the environmental impact of such activity. The Group's
decommissioning activities, supporting the safe and
environmentally-friendly deconstruction of oil wells, is also
seeing growing momentum in an area of growing global demand.
Over the last 18 months the Group has created a solid platform
from which James Fisher will benefit as our markets continue to
recover, and the Board remains confident of meeting its mid-term
financial targets of underlying operating profit margin in excess
of 10% and return on capital employed in excess of 15%.
Financial performance
Revenue in the first half of 2021, at GBP233.7m, was 9.5% below
H1 2020 and 7.2% below at constant currency. Performance in Q1 2021
was particularly affected by the return of the UK to a Covid-driven
lockdown. Revenue in Q2 was 14% higher than Q1 and showed a
much-reduced variance to prior year (Q2 2021: 3% adverse to Q2
2020; Q1 2021: 16% adverse to Q1 2020).
At a divisional level, Specialist Technical and Offshore Oil
both provided constant currency revenue growth compared to H1 2020
and Tankships is now trading broadly in line with 2020 following an
improved performance in Q2. Marine Support experienced a more
challenging half year, with ship-to-ship transfers significantly
below the record performance achieved in H1 2020. This division was
also affected by the suspension of projects in Mozambique following
an insurgency in the region.
Statutory operating profit of GBP12.2m was GBP0.7m ahead of
prior year, with a significant reduction in separately disclosed
items (2021: GBP1.1m loss; 2020: GBP8.0m loss). Within separately
disclosed items in H1 2021 the Group recognised a profit on sale of
the Paladin dive support vessel of GBP0.3m (2020: nil) offset by
amortisation of acquired intangible assets of GBP1.4m (2020:
GBP1.5m). Included in 2020 were impairment charges, restructuring
costs and acquisition costs of GBP6.5m (2021: nil).
Underlying operating profit excludes separately disclosed items,
and at GBP13.3m was GBP6.2m below prior year. In line with the
improvement in revenue, Q2 showed a much-improved profit
performance compared to Q1. Underlying operating profit margin was
5.7% for the period compared to 7.6% in H1 2020, reflecting the
reduced overall levels of profit. Encouragingly, the Group achieved
an underlying operating profit margin of 9% in Q2 2021.
Statutory profit before tax, profit after tax and earnings per
share all showed improvement over 2020. Statutory profit before tax
increased by 14% to GBP8.1m. Statutory profit after tax increased
by GBP8.5m, which included a benefit of GBP7.9m arising on the
recognition of a deferred tax asset. This is shown as a separately
disclosed item. Statutory earnings per share increased to 26.8
pence per share, up 170%, also reflecting the separately disclosed
deferred tax asset recognition.
Dividends
The Board is committed to reintroducing a sustainable and
progressive dividend policy at the appropriate time. Given our
markets are still recovering from Covid-19 and taking into account
our current absolute levels of net debt and the resulting leverage
ratio, the Board has not declared an interim dividend for 2021
(2020: 8.0 pence per share).
Environmental, Social and Governance
The Group continued to prioritise the health and safety of its
employees in the period. Additional Covid-19 safety measures have
remained in place throughout the first half, including
quarantining, regular testing of employees at all sites and the
continuation of social distancing and hygiene measures. The safety
of our staff was of primary concern when terrorist attacks hit
Mozambique during the period and we were pleased to evacuate
everyone safely.
Through its stakeholder strategy, the Group continues to
recognise the importance of the contribution that employees,
customers and suppliers, the environment and local communities all
make towards supporting shareholder value. The first draft of the
formal sustainability strategy will be published with the Annual
Report. To date we have completed an initial materiality assessment
and revamped the Sustainability Committee.
As a group of businesses that is closely affiliated with the
energy transition, the environmental elements of the sustainability
strategy will be prominent, underpinned by robust social and
governance processes and commitments. We continue to work towards
meaningful environmental targets through our commitment to the
Science Based Targets Initiative, while improving our reporting for
the Carbon Disclosure Project and have joined the Council for
Inclusive Capitalism.
James Fisher continues to focus on diversity and inclusion. In
the first half of 2021, women represented 29% of our Board
membership and 33% of our Executive Committee.
Liquidity
Underlying net borrowings at 30 June 2021 was GBP178.7m, showing
a marginal increase of GBP3.7m compared to 31 December 2020
(GBP175.0m). On an IFRS16 basis, including the Group's operating
lease liabilities, net debt has increased from GBP198.1m at 31
December 2020 to GBP211.0m at 30 June 2021.
Revolving credit facilities totalling GBP130m have been
refinanced in the period on a three year term, with options to
extend by up to two years. In aggregate, the Group has GBP287.5m of
committed facilities, of which GBP247.5m is now secured through to
at least 2024.
At 30 June 2021, the Group had headroom against its committed
revolving credit facilities of GBP117.0m (2020: GBP115.6m). The
ratio of net debt (including bonds and guarantees) to Ebitda was
2.9 times (31 December 2020: 2.8 times; 30 June 2020: 2.5 times).
The covenant requirement at 30 June 2021 was 3.75 times, which
reduces to 3.5 times at 31 December 2021.
Board changes
The Group has seen two changes to the Board during the period.
Angus Cockburn replaced Malcolm Paul as Chairman and Duncan Kennedy
joined as Chief Financial Officer, replacing Stuart Kilpatrick. The
Board would like to express its sincere thanks to both Malcolm and
Stuart for their outstanding contributions to the Group's strategy
and growth over the course of the last decade.
Outlook
The Group is expecting performance to improve during the second
half of the year as our end markets recover from the disruption
caused by the effects of the global pandemic.
However, we experienced weaker than anticipated trading in
Fendercare and lower short-cycle order intake at JFD during the
important summer period and this, combined with project suspensions
in Mozambique, lead the Board to now expect underlying operating
profit for 2021 to be around the same level as that achieved in
2020.
Looking beyond 2021, forward-looking order books in our
long-cycle businesses are strengthening following high levels of
tendering activity and contract wins year-to-date which gives the
Board confidence in the Group's future prospects.
James Fisher's new strategy to deliver sustainable profitable
growth is progressing well. The Group is focused on capitalising on
its leading market positions within the marine, energy and defence
markets and is well placed to benefit from the market recovery and
meet its mid-term financial targets.
Business review
Marine Support
H1 2021 H1 2020 change
Revenue (GBPm) 97.7 122.5 (20.2)%
Underlying operating profit (GBPm) 2.1 4.8 (56.3)%
Underlying operating margin 2.1% 3.9%
Return on capital employed 3.7% 4.4%
Revenue was 20% below prior year at GBP97.7m. The GBP24.8m
revenue shortfall resulted in a GBP2.7m reduction in underlying
operating profit to GBP2.1m (2020: GBP4.8m).
The Marine Support division has seen mixed results across its
businesses. The ship-to-ship transfer market has seen volumes well
below prior year, and although we believe that Fendercare has
maintained its market share, H1 revenues were 39% below the record
performance in H1 2020, when significant volatility in the oil
price led to the highest volumes of ship-to-ship transfers that the
business had ever experienced. The market recovery in ship-to-ship
transfers during 2021 has been slow and revenues in July and August
remained lower than anticipated.
The Marine Contracting and Digital & Data Services
businesses are broadly in line with last year, although the
suspension of projects in Mozambique due to an insurgency in the
local area has adversely affected performance. We expect to
continue to benefit from this contract when the suspension is
lifted on the major LNG project. In the meantime, there are
on-going dispute resolution discussions with our clients to seek
recovery of amounts contractually due for work completed to date,
and this could provide some variability to 2021 performance.
There have been a number of contract wins in the period in the
renewables space, which is showing encouraging growth and continued
high levels of tenders. EDS, the provider of specialist high
voltage cabling and related services, delivered strong revenue and
profit growth in the period and has a strong order book for 2022
and beyond.
Specialist Technical
H1 2021 H1 2020 change
Revenue (GBPm) 67.8 65.7 3.2%
Underlying operating profit (GBPm) 5.6 7.5 (25.3)%
Underlying operating margin 8.3% 11.4%
Return on capital employed 11.2% 13.4%
Revenue increased by 3.2% in the period to GBP67.8m (2020:
GBP65.7m). JFD, our defence and diving equipment provider, is
approaching significant milestones in a number of major projects,
including the final milestone on the 500m saturation diving system
and the delivery of a submarine rescue vessel. Recent contract wins
include a GBP20m, four-year contract with the UK Ministry of
Defence to provide life support services for the Astute class of
submarines. The business has a sales pipeline in excess of GBP400m
across both its long and short cycle business lines. However, order
intake in the diving equipment and services sector has been weaker
than anticipated over recent months as customers continue to delay
spending decisions as a result of Covid-19.
JFN, our nuclear decommissioning business, has remained
resilient. It has progressed all of its major projects including
the on-going decommissioning work at Sellafield where it recently
secured two new contracts. One being a multi-million pound project
for the mechanical and electrical design and commissioning of the
New Civil Nuclear Constabulary Operational Unit at Sellafield and
the other being the renewal of its contract for the provision and
management of ROVs targeted at the clean-up of legacy ponds on
site. These legacy ponds provide some of the most complex
decommissioning challenges in the world.
Underlying operating profit was GBP1.9m below H1 2020 at
GBP5.6m, principally a result of an increase in project-based
equipment revenues within the JFN projects, which carry lower
margins.
Offshore Oil
H1 2021 H1 2020 change
Revenue (GBPm) 39.6 40.0 (1.0)%
Underlying operating profit (GBPm) 5.3 5.4 (1.8)%
Underlying operating margin 13.4% 13.1%
Return on capital employed 9.2% 8.6%
The Offshore Oil division performed well in the period, with
revenue of GBP39.6m broadly in line with 2020 and 4% higher at
constant currency. This reflects strong growth in both our Scantech
and Fisher Offshore businesses, partially offset by RMSpumptools,
where the comparator period in 2020 saw the completion of a number
of projects that had been started prior to Covid-19 disruptions.
The RMSpumptools order book going into the second half is robust
and in line with that of 2020 and ordering activity early in H2 has
provided the business with confidence for the second half.
The Scantech businesses saw strong demand for their air
compressors, principally because of increased usage in the
generation of 'bubble curtains', which reduce subsea noise around
construction and protect marine life. Such measures are legal
requirements in most jurisdictions around the world and represent
an exciting mid-term growth opportunity for the Group. The combined
forward order books of the Scantech businesses, at approximately
GBP16m, are more than 40% higher than at this point in 2020.
Fisher Offshore saw a continuation of the strong demand for its
specialist cutting tools, which are used in the decommissioning of
existing oil platforms and wells, tendering for GBP31m of business
in the period, which compares to GBP26m for the whole of 2020. The
Group further strengthened its customer offering with the purchase
of Subsea Engenuity during the period for a consideration of up to
GBP0.75m. Subsea Engenuity's innovative technology significantly
reduces risk in well abandonment operations and is expected to be
launched commercially in early 2022.
Tankships
H1 2021 H1 2020 change
Revenue (GBPm) 28.6 29.9 (4.3)%
Underlying operating profit (GBPm) 2.1 3.6 (41.7)%
Underlying operating margin 7.3% 12.0%
Return on capital employed 20.1% 24.3%
The Tankships division saw challenging trading conditions in Q1
as the UK was placed back into lockdown. Following the gradual
easing of restrictions in Q2, we saw an improvement in demand and
revenue ended the period only 4% below 2020 at GBP28.6m. Volumes
are now approaching pre-pandemic levels.
Underlying operating profit was GBP1.5m below 2020 at GBP2.1m
for the period, which reflects both the largely fixed cost nature
of the business and an increase in operating costs due to Covid
quarantining and enhanced safety measures put in place as we
continue to prioritise the safety and wellbeing of our staff.
Cashflow and borrowings
Underlying net borrowings at 30 June 2021 was GBP178.7m, showing
a marginal increase of GBP3.7m compared to 31 December 2020
(GBP175.0m). On an IFRS16 basis, including the Group's operating
lease liabilities, net debt increased from GBP198.1m at 31 December
2020 to GBP211.0m at 30 June 2021.
As anticipated, the Group saw a working capital outflow during
the period. A number of projects across the Group have not yet met
invoicing milestones, resulting in an increase in accrued income of
GBP17.1m in the period. Debtor days, at 87, showed some improvement
over H1 2020 and creditor days are in line at 97 (30 June 2020:
98).
Capital expenditure was much reduced at GBP6.5m (2020: GBP11.8m)
as the business continues to prioritise its capital investments.
The sale of the Paladin was completed in the period and proceeds of
$17.3m (GBP12.6m) were received prior to the period end.
Acquisition spend was lower at GBP0.4m (2020: GBP4.5m).
Tax and interest payments were broadly in line with prior year
at GBP7.6m (2020: GBP8.8m).
At 30 June 2021 the Group had headroom against its committed
revolving credit facilities of GBP117.0m (2020: GBP115.6m). The
ratio of net debt (including bonds and guarantees) to Ebitda was
2.9 times (31 December 2020: 2.8 times; 30 June 2020: 2.5 times).
The covenant requirement at 30 June 2021 was 3.75 times, which
reduces to 3.5 times at 31 December 2021.
Balance sheet
Non-current assets reduced from GBP389.6m at 31 December to
GBP369.7m at 30 June 2021, due principally to a reduction in
tangible fixed assets of GBP31.5m offset by an increase in
right-of-use assets of GBP8.3m.
Current assets increased from GBP302.5m at 31 December 2020
(restated - see note 12) to GBP313.3m at 30 June 2021. This
reflects an increase in receivables of GBP20.8m, principally in
accrued income as major long-term contracts work towards invoicing
milestones in the second half of the year. In addition, GBP15.2m
assets held for sale have been recognised at 30 June 2021 (refer to
note 13 for details), offset by lower cash at bank and in hand
balances (see note 12).
Current and non-current liabilities decreased by GBP21.0m in the
period, from GBP456.2m at 31 December 2020 (restated - see note 12)
to GBP435.2m at 30 June 2021. The principal movement is a decrease
in bank overdrafts (refer note 12), offset by an increase of
GBP8.2m in lease liabilities, which broadly matches against the
increase in right-of-use assets of GBP8.3m.
Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance in the second half of the year are the same
as disclosed in the 2020 Annual Report and Accounts on pages 43-48.
The principal risks set out in the 2020 Annual Report and Accounts
were:
-- Operational - project delivery, recruitment and retention of
key staff, health, safety and environment, contractual risk, cyber
security and pandemic risk;
-- Strategic - climate change, operating in emerging markets; and
-- Financial - foreign currency and interest rates.
The Board considers that the principal risks and uncertainties
set out in the 2020 Annual Report and Accounts remain the same.
Directors' Responsibilities
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted
by the European Union.
(b) The interim management report includes a fair review of the
information required by:
a. DTR 4.2.7R of the 'Disclosure and Transparency Rules', being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b. DTR 4.2.8R of the 'Disclosure and Transparency Rules', being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
the period; and any changes in the related party transactions
described in the last annual report that could do so.
Approved by the Board of Directors and signed on its behalf
by:
E P O'Lionaird D Kennedy
Chief Executive Officer Chief Financial Officer
6 September 2021
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
Revenue 4 233.7 258.1 518.2
Cost of sales (177.6) (187.2) (423.8)
----------- ----------- -------------
Gross profit 56.1 70.9 94.4
Administrative expenses (44.9) (60.1) (139.5)
Share of post-tax results of joint ventures 1.0 0.7 1.6
----------- ----------- -------------
Operating profit/(loss) 4 12.2 11.5 (43.5)
Analysis of operating profit:
Underlying operating profit 13.3 19.5 40.5
Separately disclosed items (1.1) (8.0) (84.0)
Net finance expense 6 (4.1) (4.4) (9.0)
----------- ----------- -------------
Profit/(loss) before taxation 8.1 7.1 (52.5)
Analysis of profit before tax:
Underlying profit before taxation 9.2 15.1 31.5
Separately disclosed items 5 (1.1) (8.0) (84.0)
Income tax 7 5.5 (2.0) (4.8)
Profit/(loss) for the period 13.6 5.1 (57.3)
=========== =========== =============
Attributable to:
Owners of the Company 13.5 5.0 (57.5)
Non-controlling interests 0.1 0.1 0.2
13.6 5.1 (57.3)
=========== =========== =============
Earnings/(loss) per share pence pence pence
Basic 8 26.8 9.9 (114.2)
Diluted 8 26.8 9.9 (114.2)
Underlying earnings per share
Basic 8 12.8 23.6 48.0
Diluted 8 12.8 23.6 47.9
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2021
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
Profit/(loss) for the period 13.6 5.1 (57.3)
Items that will not be reclassified to the
income statement
Actuarial gain/(loss) in defined benefit
pension schemes 10 2.8 (0.4) (9.3)
Tax on items that will not be reclassified - 0.1 1.1
-------- ----------- ------------
2.8 (0.3) (8.2)
Items that may be reclassified subsequently to
the income statement
Exchange differences on foreign currency
net investments (2.3) 1.8 (7.8)
Effective portion of changes in fair value
of cash flow hedges (1.2) (3.6) 0.6
Effective portion of changes in fair value of
cash flow hedges in joint ventures 0.1 (0.3) (0.2)
Net change in fair value of cash flow hedges transferred
to income statement (0.6) 0.6 (0.1)
Deferred tax on items that may be reclassified 0.1 0.7 1.1
-------- ----------- ------------
(3.9) (0.8) (6.4)
Total comprehensive income for the period 12.5 4.0 (71.9)
======== =========== ============
Attributable to:
Owners of the Company 12.4 3.9 (72.0)
Non-controlling interests 0.1 0.1 0.1
12.5 4.0 (71.9)
======== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2021
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
Non-current assets restated* restated*
Goodwill 11 165.8 182.8 166.5
Other intangible assets 18.2 25.6 20.1
Property, plant and equipment 126.7 208.2 158.2
Right-of-use assets 39.0 24.4 30.7
Investment in joint ventures 7.7 8.9 7.5
Other investments 1.4 1.4 1.4
Deferred tax assets 10.9 5.6 5.2
369.7 456.9 389.6
-------- ---------- ------------
Current assets
Inventories 51.5 52.3 46.6
Trade and other receivables 183.6 201.2 162.8
Assets held for sale 13 15.2 - -
Cash and cash equivalents 12 63.0 70.1 93.1
313.3 323.6 302.5
-------- ---------- ------------
Current liabilities
Trade and other payables (142.3) (173.6) (140.1)
Provisions for liabilities and charges (0.6) (0.9) -
Liabilities associated with assets held
for sale 13 (1.7) - -
Current tax (4.8) (7.1) (7.6)
Borrowings (51.2) (57.5) (79.8)
Lease liabilities (8.9) (8.4) (7.2)
(209.5) (247.5) (234.7)
-------- ---------- ------------
Net current assets 103.8 76.1 67.8
Total assets less current liabilities 473.5 533.0 457.4
-------- ---------- ------------
Non-current liabilities
Other payables (3.3) (3.7) (3.6)
Provisions (1.4) - (1.6)
Retirement benefit obligations 10 (6.6) (5.2) (10.3)
Cumulative preference shares (0.1) (0.1) (0.1)
Borrowings (182.0) (182.8) (178.8)
Lease liabilities (31.8) (19.8) (25.3)
Deferred tax liabilities (0.5) (5.2) (1.8)
(225.7) (216.8) (221.5)
-------- ---------- ------------
Net assets 247.8 316.2 235.9
======== ========== ============
Equity
Called up share capital 12.6 12.6 12.6
Share premium 26.8 26.6 26.7
Treasury shares (0.6) (0.3) (0.2)
Other reserves (20.5) (11.0) (16.5)
Retained earnings 228.7 287.4 212.6
-------- ---------- ------------
Equity attributable to owners of the Company 247.0 315.3 235.2
Non-controlling interests 0.8 0.9 0.7
Total equity 247.8 316.2 235.9
======== ========== ============
* cash and cash equivalents and borrowings (current) have been
restated for the 2020 comparative periods to reflect a gross up of
cash at bank and in hand and overdraft balances (see note 12).
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2021
Share Share Retained Other Treasury Shareholders' Non-controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2021 12.6 26.7 212.6 (16.5) (0.2) 235.2 0.7 235.9
Profit for the
year - - 13.5 - - 13.5 0.1 13.6
Other
comprehensive
income - - 2.8 (3.9) - (1.1) - (1.1)
Contributions by
and distributions
to owners:
Remeasurement of
non-controlling
interest
put option - - - (0.1) - (0.1) - (0.1)
Share based
payments - - 0.3 - - 0.3 - 0.3
Tax effect of
share
based payments - - 0.1 - - 0.1 - 0.1
Purchase of
shares
by ESOT - - - - (0.5) (0.5) - (0.5)
Notional purchase
of own shares - - (0.5) - - (0.5) - (0.5)
Arising on the
issue
of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.1) - 0.1 - - -
-----
At 30 June 2021 12.6 26.8 228.7 (20.5) (0.6) 247.0 0.8 247.8
====== ====== ======= ======= ========== ========= =============== =======
Share Share Retained Other Treasury Shareholders' Non- controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2020 12.6 26.5 284.7 (10.6) - 313.2 0.8 314.0
Profit for the
year - - 5.0 - - 5.0 0.1 5.1
Other
comprehensive
income - - (0.8) (0.3) - (1.1) - (1.1)
Contributions by
and distributions
to owners:
Remeasurement of
non-controlling
interest
put option - - - (0.1) - (0.1) - (0.1)
Share based
payments - - 0.2 - - 0.2 - 0.2
Tax effect of
share
based payments - - (0.3) - - (0.3) - (0.3)
Purchase of
shares
by ESOT - - - - (0.9) (0.9) - (0.9)
Notional purchase
of own shares - - (0.8) - - (0.8) - (0.8)
Arising on the
issue
of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.6) - 0.6 - - -
At 30 June 2020 12.6 26.6 287.4 (11.0) (0.3) 315.3 0.9 316.2
====== ====== ======= ======= ========== ========= =============== =======
Other reserve
movements
Translation Hedging Put option
reserve reserve liability Total
Other reserves GBPm GBPm GBPm GBPm
At 1 January 2020 (7.8) (0.2) (2.6) (10.6)
Other
comprehensive
income (6.5) 0.7 - (5.8)
Remeasurement of non-controlling interest
put option - - (0.1) (0.1)
---------- --------- --------------- -------
At 31 December
2020 (14.3) 0.5 (2.7) (16.5)
Other
comprehensive
income (2.3) (1.6) - (3.9)
Remeasurement of non-controlling interest
put option - - (0.1) (0.1)
At 30 June 2021 (16.6) (1.1) (2.8) (20.5)
========== ========= =============== =======
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2021
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2021 2020 2020
restated*
Note GBPm GBPm GBPm
Profit/(loss) before tax for the period 8.1 7.1 (52.5)
Adjustments to reconcile profit/(loss) before
tax to net cash flows
Depreciation and amortisation 21.1 23.3 48.0
Separately disclosed items (excluding amortisation) (0.3) 6.5 81.1
Other non cash items 3.0 6.0 7.1
(Increase)/decrease in inventories (5.3) (3.4) 2.0
(Increase)/decrease in trade and other receivables (24.8) 14.5 30.9
Increase/(decrease) in trade and other payables 2.8 13.6 (13.4)
Defined benefit pension cash contributions
less service cost (1.0) (1.2) (4.8)
----------- ----------- ------------
Cash generated from operations 3.6 66.4 98.4
Cash outflow from separately disclosed items - (1.1) (3.9)
Income tax payments (4.5) (5.2) (7.9)
----------- ----------- ------------
Cash flow (used in)/from operating activities (0.9) 60.1 86.6
Investing activities
Dividends from joint venture undertakings 0.7 0.6 1.8
Proceeds from the disposal of a subsidiary - - 1.3
Proceeds from the disposal of property,
plant and equipment 14.3 0.6 2.6
Finance income 0.2 0.1 0.3
Acquisition of subsidiaries, net of cash
acquired (0.4) (4.0) (7.9)
Investment in joint ventures and other investments - (0.5) (0.5)
Acquisition of property, plant and equipment (6.5) (11.8) (17.5)
Development expenditure (0.8) (1.5) (2.9)
Cash flows from/(used in) investing activities 7.5 (16.5) (22.8)
Financing activities
Proceeds from the issue of share capital 0.1 0.1 0.2
Finance costs (3.3) (3.7) (7.0)
Purchase of own shares by Employee Share
Ownership Trust (0.5) (0.9) (0.9)
Notional purchase of own shares for LTIP
vesting (0.5) (0.8) (1.0)
Capital element of lease repayments (6.6) (6.2) (13.0)
Proceeds from borrowings 10.5 43.9 34.3
Repayment of borrowings (7.9) (70.1) (64.5)
Dividends paid - - (4.0)
Dividend paid to non-controlling interest - - (0.2)
----------- ----------- ------------
Cash flows used in financing activities (8.2) (37.7) (56.1)
Net decrease in cash and cash equivalents (1.6) 5.9 7.7
Cash and cash equivalents at beginning of
period 13.5 7.5 7.5
Net foreign exchange differences - (0.6) (1.7)
Cash and cash equivalents at end of period 12 11.9 12.8 13.5
=========== =========== ============
* Cash and cash equivalents restated for the period ended 30 June 2020.
NOTES TO THE CONDENSED CONSOLIDATED HALF YEAR STATEMENTS
1 Basis of preparation
James Fisher and Sons Plc (the Company) is a public limited
company registered and domiciled in England and Wales and listed on
the London Stock Exchange. The condensed consolidated half year
financial statements of the Company for the six months ended 30
June 2021 comprise the Company and its subsidiaries (together
referred to as the Group) and the Group's interests in jointly
controlled entities.
Statement of compliance
The condensed consolidated financial statements, which have been
reviewed and not audited, have been prepared in accordance with
International Financial Reporting Standard (IFRS) IAS 34 "Interim
Financial Reporting" as adopted by the European Union (EU). As
required by the Disclosure and Transparency Rules of the Financial
Services Authority, the condensed consolidated set of financial
statements has been prepared applying the accounting policies and
presentation that were applied in the preparation of the Group's
published consolidated financial statements for the year ended 31
December 2020 with the exceptions described below. They do not
include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 December
2020.
The comparative figures for the financial year ended 31 December
2020 are not the Group's statutory accounts for that financial
year. Those accounts which were prepared under International
Financial Reporting Standards (IFRS) as adopted by the EU (adopted
IFRS), have been reported on by the Group's auditors and delivered
to the Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The consolidated financial statements of the Group for the year
ended 31 December 2020 are available upon request from the
Company's registered office at Fisher House, PO Box 4,
Barrow-in-Furness, Cumbria LA14 1HR or at www.james-fisher.co.uk
.
The half year financial information is presented in Sterling and
all values are rounded to the nearest million pounds (GBPm) except
where otherwise indicated.
Going concern
In light of the Covid-19 global pandemic experienced in 2020 and
subsequent uncertainty, the Group has undertaken a detailed
viability review and taken appropriate mitigating actions to
protect the business and liquidity. Operations have been impacted
by travel restrictions, supply chain logistics and actions to
protect employees to ensure safe working conditions. The Group's
quick response to Covid-19 has mitigated some of the impact on
financial performance, however the potential impact of a post
pandemic recession gives on-going risk to future financial
performance. Liquidity is monitored through daily balance
reporting, quarterly forecasting and monthly cashflow
forecasting.
The Directors base case forecast reflected financial performance
in the year ended 31 December 2020 and the associated impacts of
Covid-19. A number of severe but plausible downside scenarios were
calculated compared to the base case forecast of profit and cash
flow to assess headroom and covenants against facilities for the
going concern assessment period of the next 12 months from the date
of this report. Against these negative scenarios, which reduced
operating profit by GBP10m in 2021 and GBP20m in 2022, adjusted
projections showed no breach of covenants. Additional sensitivities
which reduced cash receipts by GBP10m in 2021 and GBP20m in 2022
and delayed project delivery reducing profit by GBP10m in 2021 and
GBP20m in 2022 and deferring debtor collection by GBP3m in 2021 and
by GBP6m in 2022 were also run separately in combination with the
severe but plausible downside and adjusted projections showed no
breach of covenants and headroom against committed facilities
throughout the 12 month going concern assessment period. Further
controllable mitigating actions could also be taken in such
scenarios should it be required, including reducing capital
expenditure, reducing dividend payments and not carrying out any
acquisitions.
The Directors are of the opinion that the Group has sufficient
financial resources to continue trading for at least 12 months from
the date of this report. Accordingly, the Directors believe it
remains appropriate to prepare the interim condensed financial
statements on a going concern basis.
The Group meets its day to day working capital requirements
through operating cash flows with borrowings in place to fund
acquisitions and capital expenditure. The Group had GBP117.0m of
undrawn committed facilities at 30 June 2021 (2020: GBP115.6m).
During September, revolving credit facilities totalling GBP130m
have been refinanced on a three year term with options to extend by
up to two years.
Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for
the year ended 31 December 2020.
2 Accounting estimates and judgements
The preparation of half year financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ materially from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements as at and for the year ended 31 December
2020.
3 Alternative performance measures
The Group presents a number of alternative (non-Generally
Accepted Accounting Practice (non-GAAP)) performance measures which
are not defined within IFRS. These measures are presented to assist
investors in gaining a clear and balanced view of the underlying
operational performance of the Group and are consistent year on
year with how business performance is measured internally. The
adjustments are separately disclosed (note 5) and are usually items
that are significant in size or non-recurring in nature. The
following non-GAAP measures are referred to in the half year
results.
3.1 Underlying operating profit and underlying profit before taxation
Underlying operating profit is defined as operating profit
before acquisition related income and expense (amortisation or
impairment of acquired intangible assets, acquisition expenses,
adjustments to contingent consideration), the costs of a material
restructuring, litigation, or asset impairment and the profit or
loss relating to the sale of businesses. As acquisition related
income and expense fluctuates with activity and to provide a better
comparison to businesses that are not acquisitive, the Directors
consider that these items should be separately disclosed to give a
better understanding of operating performance. Underlying profit
before taxation is defined as underlying operating profit less net
finance expense.
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Operating profit/(loss) 12.2 11.5 (43.5)
Separately disclosed items before
taxation 1.1 8.0 84.0
Underlying operating
profit 13.3 19.5 40.5
Net finance expense (4.1) (4.4) (9.0)
Underlying profit before taxation 9.2 15.1 31.5
=========== =========== =============
3.2 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total
of underlying profit before tax, less income tax, but excluding the
tax impact on separately disclosed items included in the
calculation of underlying profit less profit attributable to
non-controlling interests, divided by the weighted average number
of ordinary shares in issue during the year. Underlying earnings
per share is set out in note 8.
3.3 Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use
assets, less cash and short-term deposits and after adding back
borrowings. Average capital employed is adjusted for the timing of
businesses acquired and after adding back cumulative amortisation
of customer relationships. Segmental ROCE is defined as the
underlying operating profit, divided by average capital employed.
The key performance indicator, Group post-tax ROCE, is defined as
underlying operating profit, less notional tax, calculated by
multiplying the effective tax rate by the underlying operating
profit, divided by average capital employed.
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Net assets 247.8 316.2 235.9
Less right-of-use
assets (39.0) (24.4) (30.7)
Plus net borrowings 211.0 198.5 198.1
Capital employed 419.8 490.3 403.3
----------- ----------- -------------
Underlying operating
profit 13.3 19.5 40.5
Notional tax at the effective
tax rate (3.9) (4.1) (9.2)
----------- ----------- -------------
9.4 15.4 31.3
Average capital employed 459.2 471.9 467.6
Return on average capital employed 5.4% 6.6% 6.7%
----------- ----------- -------------
3.4 Cash conversion
Cash conversion is defined as the ratio of operating cash flow
to underlying operating profit. Operating cash flow comprises:
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Cash generated from operations 3.6 66.4 98.4
Dividends from joint venture
undertakings 0.7 0.6 1.8
Capital element of lease repayments (6.6) (6.2) (13.0)
Other 1.0 0.1 0.5
----------- ----------- -------------
Operating cash flow (1.3) 60.9 87.7
Underlying operating
profit 13.3 19.5 40.5
Cash conversion (10)% 312% 217%
3.5 Underlying earnings before interest, tax, depreciation and amortisation (Ebitda)
Underlying Ebitda is defined as the underlying operating profit
before interest, tax, depreciation and amortisation.
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Underlying operating
profit 13.3 19.5 40.5
Depreciation and
amortisation 21.1 23.3 48.0
Less: Deprecation on right-of-use
assets (5.6) (5.3) (10.9)
Amortisation of acquired intangibles
(note 5) (1.4) (1.5) (2.9)
----------- ----------- -------------
Underlying
Ebitda 27.4 36.0 74.7
----------- ----------- -------------
3.6 Underlying dividend cover
Underlying dividend cover is the ratio of the underlying diluted
earnings per share to the dividend per share.
pence pence pence
Underlying earnings
per share 12.8 23.6 47.9
Dividends per share - 8.0 8.0
Underlying dividend cover (times) - 3.0 6.0
3.7 Organic constant currency
Organic constant currency growth represents absolute growth,
adjusted for current and prior year acquisitions and for constant
currency. Constant currency takes the non-sterling results of the
prior year and re-translates them at the average exchange rate of
the current year.
3.8 Underlying net borrowings
Underlying net borrowings is net borrowings as set out in note
12, excluding right-of-use operating leases. The Group's banking
arrangements are based on underlying net borrowings.
2021 2020 2020
Six months Six months
ended 30 ended 30 Year ended
June June 31 December
GBPm GBPm GBPm
Net borrowings (note 12) 211.0 198.5 198.1
Less: right-of-use operating
leases (32.3) (25.4) (23.1)
178.7 173.1 175.0
----------- ----------- -------------
4 Segmental information
Management has determined that the Group has four operating
segments reviewed by the Board; Marine Support, Specialist
Technical, Offshore Oil and Tankships. Their principal activities
are set out in the Strategic Report within the consolidated
financial statements of the Group for the year ended 31 December
2020.
The Board assesses the performance of the segments based on
underlying operating profit. The Board believes that such
information is the most relevant in evaluating the results of
certain segments relative to other entities which operate within
these industries. Inter-segmental sales are made using prices
determined on an arms-length basis. Sector assets exclude cash,
short-term deposits and corporate assets that cannot reasonably be
allocated to operating segments. Sector liabilities exclude
borrowings, retirement benefit obligations and corporate
liabilities that cannot reasonably be allocated to operating
segments.
Six months ended 30 June 2021
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue
reported
- point in time 81.7 22.9 39.7 - - 144.3
- over time 16.1 45.4 - 28.6 - 90.1
Inter-segmental sales (0.1) (0.5) (0.1) - - (0.7)
97.7 67.8 39.6 28.6 - 233.7
======== =========== ========= ========== ========== ========
Underlying operating
profit 2.1 5.6 5.3 2.1 (1.8) 13.3
Separately disclosed
items (0.7) - (0.4) - - (1.1)
Operating profit 1.4 5.6 4.9 2.1 (1.8) 12.2
Net finance expense (4.1)
--------
Profit before tax 8.1
Income tax 5.5
Profit for the period 13.6
========
Assets & liabilities
Segmental assets 238.1 165.7 141.2 65.9 64.4 675.3
Investment in joint
ventures 2.1 3.3 2.3 - - 7.7
-------- ----------- --------- ---------- ---------- --------
Total assets 240.2 169.0 143.5 65.9 64.4 683.0
Segmental liabilities (77.3) (62.4) (27.6) (31.7) (236.2) (435.2)
162.9 106.6 115.9 34.2 (171.8) 247.8
======== =========== ========= ========== ========== ========
Other segmental information
Capital expenditure 2.3 0.8 2.3 0.9 0.2 6.5
Depreciation and amortisation 6.7 3.4 5.8 5.1 0.1 21.1
======== =========== ========= ========== ========== ========
Six months ended 30 June 2020
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue
reported
- point in time 106.0 18.7 40.2 - - 164.9
- over time 16.6 47.5 - 29.9 - 94.0
Inter-segmental sales (0.1) (0.5) (0.2) - - (0.8)
122.5 65.7 40.0 29.9 - 258.1
======== =========== ========= ========== ========== ========
Underlying operating
profit reported 4.8 7.5 5.4 3.6 (1.8) 19.5
Separately disclosed
items (4.3) (1.1) (2.6) - - (8.0)
Operating profit 0.5 6.4 2.8 3.6 (1.8) 11.5
Net finance expense (4.4)
--------
Profit before tax 7.1
Income tax (2.0)
Profit for the period 5.1
========
Assets & liabilities
Segmental assets 320.7 163.5 153.4 58.6 75.4 771.6
Investment in joint
ventures 3.5 3.0 2.4 - - 8.9
-------- ----------- --------- ---------- ---------- --------
Total assets 324.2 166.5 155.8 58.6 75.4 780.5
Segmental liabilities (101.5) (55.6) (30.4) (28.8) (248.0) (464.3)
222.7 110.9 125.4 29.8 (172.6) 316.2
======== =========== ========= ========== ========== ========
Other segment information
Capital expenditure 4.9 1.3 3.2 2.4 - 11.8
Depreciation and amortisation 8.0 3.3 6.5 5.3 0.2 23.3
======== =========== ========= ========== ========== ========
Year ended 31 December 2020
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue
reported
- point in time 225.3 42.2 80.1 - - 347.6
- over time 24.5 89.2 - 60.4 - 174.1
Inter-segmental sales (0.4) (1.0) (2.1) - - (3.5)
249.4 130.4 78.0 60.4 - 518.2
======== =========== ========= ========== ========== ========
Underlying operating
profit/(loss) 10.1 14.0 11.2 8.0 (2.8) 40.5
Separately disclosed
items (79.6) (1.6) (2.8) - - (84.0)
-------- ----------- --------- ---------- ---------- --------
Operating (loss)/profit (69.5) 12.4 8.4 8.0 (2.8) (43.5)
Net finance expense (9.0)
--------
Loss before tax (52.5)
Income tax (4.8)
Loss for the year (57.3)
========
Assets & liabilities
Segmental assets 246.7 156.0 139.4 53.5 89.0 684.6
Investment in joint
ventures 2.1 3.0 2.4 - - 7.5
-------- ----------- --------- ---------- ---------- --------
Total assets 248.8 159.0 141.8 53.5 89.0 692.1
Segmental liabilities (90.5) (57.6) (24.9) (22.2) (261.0) (456.2)
158.3 101.4 116.9 31.3 (172.0) 235.9
======== =========== ========= ========== ========== ========
Other segment information
Capital expenditure 7.1 1.9 5.4 3.1 - 17.5
Depreciation and amortisation 17.8 6.7 12.7 10.5 0.3 48.0
======== =========== ========= ========== ========== ========
5 Separately disclosed items
Certain items are disclosed separately in the financial
statements to provide a clearer understanding of the underlying
financial performance of the Group, referred to in note 3. They are
items that are non-recurring and significant by virtue of their
size and include acquisition related income or charges, costs of
material litigation, restructure or material impairment and related
items. Separately disclosed items comprise:
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Acquisition related income and (expense):
Costs incurred on acquiring businesses - (0.2) (1.0)
Amortisation of acquired intangibles (1.4) (1.5) (2.9)
(1.4) (1.7) (3.9)
Marine Support restructure - (1.5) (3.9)
Disposal of businesses - - (3.5)
Disposal of dive support vessel 0.3 - -
Impairment charges - (4.8) (72.7)
Separately disclosed items before
taxation (1.1) (8.0) (84.0)
----------- ----------- ------------
Taxation 8.2 1.1 2.4
Separately disclosed items after taxation 7.1 (6.9) (81.6)
=========== =========== ============
During the six months ended 30 June 2021, the Group has
recognised a gain of GBP0.3m on disposal of one of its dive support
vessels, the Paladin. The vessel had operated in the Marine Support
division. Tax on separately disclosed items includes a credit of
GBP7.9m, which represents deferred tax recognised on the timing
differences created following the impairment of dive support
vessels during the year ended 31 December 2020 and the Group's
current expectations regarding Dive Support operations.
During 2020, following the impact of Covid-19 combined with a
sharp fall in energy prices, project work with Marine Support
sharply declined and the Group commenced a material restructure of
the division. A charge of GBP1.5m was recognised at June 2020 and
GBP3.9m at December 2020 in respect of this. There has been no
equivalent charge in 2021.
6 Net finance expense
2021 2020 2020
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Finance income:
Interest receivable on short-term
deposits 0.2 0.1 0.2
Finance expense:
Interest payable on bank loans and
overdrafts (3.2) (3.4) (7.2)
Net interest on pension obligations (0.1) (0.2) (0.1)
Unwind of discount on right-of-use
lease liability (1.0) (0.8) (1.8)
Unwind of discount on contingent consideration - (0.1) (0.1)
----------- ----------- ------------
(4.3) (4.5) (9.2)
Net finance expense (4.1) (4.4) (9.0)
=========== =========== ============
7 Taxation
The Group's effective rate on profit before income tax is
(67.3)% (30 June 2020: 28.2%, 31 December 2020: 9.1%) which
includes an exceptional tax credit of GBP7.9m as detailed in note
5. The effective income tax rate on underlying profit before income
tax, based on an estimated rate for the year ending 31 December
2021, is 29.3% (30 June 2020: 20.7%, 31 December 2020: 22.8%). This
is based on the estimated effective tax rate for the year to 31
December 2021. Of the total tax charge, GBP1.3m relates to overseas
businesses (30 June 2020: GBP2.0m). Taxation on profit has been
estimated based on rates of taxation applied to the profits
forecast for the full year.
8 Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year, after
excluding 54,571 (June 2020: 9,227, December 2020: 9,227) ordinary
shares held by the James Fisher and Sons plc Employee Share
Ownership Trust (ESOT), as treasury shares. Diluted earnings per
share are calculated by dividing the net profit attributable to
ordinary equity holders of the Company by the weighted average
number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares.
At 30 June 2021, 515,463 options (June 2020: 139,506, December
2020: 386,317) were excluded from the diluted weighted average
number of ordinary shares calculation as their effect would be
anti-dilutive. The average market value of the Company's shares for
purposes of calculating the dilutive effect of share options was
based on quoted market prices for the period during which the
options were outstanding.
Weighted average number of shares
30 June 30 June 31 December
2021 2020 2020
Number
Number of Number of of
shares shares shares
For basic earnings per ordinary share 50,350,082 50,332,654 50,342,732
Exercise of share options and LTIPs 17,692 107,576 85,973
For diluted earnings per ordinary
share 50,367,774 50,440,230 50,428,705
=========== =========== ============
Underlying earnings per share
To provide a better understanding of the underlying performance
of the Group, underlying earnings per share on continuing
activities is reported as an alternative performance measure (note
3).
2021 2020 2020
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Profit/(loss) attributable to owners
of the Company 13.5 5.0 (57.5)
Separately disclosed items 1.1 8.0 84.0
Tax on separately disclosed items (8.2) (1.1) (2.4)
Underlying profit attributable to
owners of the Company 6.4 11.9 24.1
=========== =========== ============
Earnings per share pence pence pence
Basic earnings per share 26.8 9.9 (114.2)
Diluted earnings per share 26.8 9.9 (114.2)
Underlying basic earnings per share 12.8 23.6 48.0
Underlying diluted earnings per share 12.8 23.6 47.9
9 Interim dividend
No interim dividend is proposed in respect of the period ended
30 June 2021 (2020: 8.0p).
10 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
2021 2020 2020
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Net obligation as at 1 January (10.3) (5.8) (5.8)
Expense recognised in the income statement (0.1) (0.2) (0.2)
Contributions paid to scheme 1.0 1.2 5.0
Remeasurement gains and losses 2.8 (0.4) (9.3)
At period end (6.6) (5.2) (10.3)
=========== =========== ============
The Group's net liabilities in respect of its pension schemes
were as follows:
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Shore Staff (5.3) (0.3) (8.8)
Merchant Navy Officers Pension Fund (1.1) (3.2) (1.3)
Merchant Navy Ratings Pension Fund (0.2) (1.7) (0.2)
(6.6) (5.2) (10.3)
=========== =========== ============
The principal assumptions in respect of these liabilities are
disclosed in the December 2020 Annual Report. The Group has not
obtained an interim valuation for the period ended 30 June 2021. In
the first half of 2021, the Group paid contributions to defined
benefit schemes of GBP1.0m (June 2020: GBP1.2m).
11 Goodwill
Movements during the period in the Group's goodwill are set out
below:
2021 2020 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
At 1 January 166.5 185.5 185.5
Impairment - - (17.0)
Exchange differences (0.7) (2.7) (2.0)
At period end 165.8 182.8 166.5
=========== =========== ============
At the half year, the results of the impairment tests carried
out in respect of the year ended 31 December 2020, were
reconsidered based on the Group's trading performance and revised
outlooks.
The recoverable amount of the cash generating units (CGU's) has
been assessed based on value in use calculations using cash
projections based on 5-year strategic plans which take into account
the impact of climate change and are approved by the Board. For all
CGU's a terminal value of cash flows beyond that date have been
calculated at a growth rate in line with management's long-term
expectations for the relevant market, using a growth rate of 0.6%.
The key assumptions used in the value in use calculations include
gross margin, discount rate, inflation of overheads and payroll and
growth rates.
Sensitivity to impairment
The Directors have carried out sensitivity analysis to determine
the impact on the carrying value of goodwill.
Sensitivities carried out across all CGU's included increasing
the discount rate by 2.0% and reducing the terminal growth to zero
and reducing operating profit by 25.0%. In all of the scenarios
analysed headroom remained positive.
12 Reconciliation of net borrowings
1 January Cash Other Exchange 30 June
2021 flow non-cash movement 2021
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 13.5 (1.6) - - 11.9
Debt due after 1 year (178.9) (2.7) (0.5) - (182.1)
Debt due within 1 year (0.2) 0.1 - - (0.1)
---------- ------ --------- --------- ------------
(179.1) (2.6) (0.5) - (182.2)
Lease liabilities (32.5) 6.6 (15.0) 0.2 (40.7)
Net borrowings (198.1) 2.4 (15.5) 0.2 (211.0)
========== ====== ========= ========= ============
1 January Cash Other Exchange 30 June
2020 flow non-cash movement 2020
*Restated
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 7.5 5.9 - (0.6) 12.8
Debt due after 1 year (207.4) 26.1 (0.1) (1.5) (182.9)
Debt due within 1 year (0.3) 0.1 - - (0.2)
---------- ------ --------- --------- ------------
(207.7) 26.2 (0.1) (1.5) (183.1)
Lease liabilities (30.2) 6.2 (3.8) (0.4) (28.2)
Net borrowings (230.4) 38.3 (3.9) (2.5) (198.5)
========== ====== ========= ========= ============
1 January Cash Other Exchange 31 December
2020 flow non-cash movement 2020
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 7.5 7.7 - (1.7) 13.5
Debt due after 1 year (207.4) 30.1 (0.7) (0.9) (178.9)
Debt due within 1 year (0.3) 0.1 - - (0.2)
---------- ------ --------- --------- ------------
(207.7) 30.2 (0.7) (0.9) (179.1)
Lease liabilities (30.2) 13.0 (15.4) 0.1 (32.5)
Net borrowings (230.4) 50.9 (16.1) (2.5) (198.1)
========== ====== ========= ========= ============
*Cash and cash equivalents restated for the period ended 30 June
2020 to include bank overdrafts repayable on demand.
Cash and cash equivalents comprise:
2021 2020 2020
As at As at Year ended
30 June 31 December
30 June Restated Restated
GBPm GBPm GBPm
Cash at bank and in hand 63.0 70.1 93.1
Overdrafts (51.1) (57.3) (79.6)
At period end 11.9 12.8 13.5
======== ========== ============
The Group operates a notional pooling and net overdraft facility
whereby cash and overdraft balances held with the same bank have a
legal right of offset. Where there is no intention to settle
amounts net, IAS 32 requires gross balance sheet presentation to
separate overdrafts and cash balances. The Group has restated both
the cash at bank and in hand and overdraft balances for 2020 to
show these amounts gross.
This adjustment has no impact on the Group's prior year net
profit or loss, net assets or cash flow statements.
The prior periods have been restated for this adjustment as
follows:
As
Restated
2020 2020
As at As at
30 June Adjustment 30 June
GBPm GBPm GBPm
Cash at bank and in hand 20.8 49.3 70.1
Overdrafts (8.0) (49.3) (57.3)
12.8 - 12.8
======== =========== =========
As
Restated
2020 2020
Year ended Year ended
31 December Adjustment 31 December
GBPm GBPm GBPm
Cash at bank and in hand 23.9 69.2 93.1
Overdrafts (10.4) (69.2) (79.6)
13.5 - 13.5
============ =========== ============
13 Assets held for sale
In June 2021, management agreed a plan to sell the dive support
vessel known as the Swordfish within the Marine Support division
and consequently GBP10.5m relating to vessels has been reclassified
from property, plant and equipment.
In May 2021, management agreed to dispose of certain non-core
businesses within the Marine Support division. The disposal group
comprises GBP4.7m of assets and GBP1.7m of liabilities.
Both disposals are expected to complete by the end of 2021.
14 Commitments and contingencies
Capital commitments at 30 June 2021 were GBPnil (2020: GBP0.9m;
31 December: GBPnil).
Contingent liabilities
(a) In the ordinary course of the Company's business, counter
indemnities have been given to banks in respect of custom bonds,
foreign exchange commitments and bank guarantees.
(b) A Group VAT registration is operated by the Company and six
Group undertakings in respect of which the Company is jointly and
severally liable for all amounts due to HM Revenue & Customs
under the arrangement.
(c) A guarantee has been issued by the Group and Company to
charter parties in respect of obligations of a subsidiary, James
Fisher Everard Limited, in respect of charters relating to nine
vessels. The charters expire between 2021 and 2024.
(d) Subsidiaries of the Group have issued performance and
payment guarantees to third parties with a total value of GBP38.4m
(June 2020: GBP81.3m, December 2020: GBP48.2m).
(e) The Group is liable for further contributions in the future
to the MNOPF and MNRPF if additional actuarial deficits arise or if
other employers liable for contributions are not able to pay their
share. The Group and Company remains jointly and severally liable
for any future shortfall in recovery of the MNOPF deficit.
(f) The Group has given an unlimited guarantee to the Singapore
Navy in respect of the performance of First Response Marine Pte
Ltd, its Singapore joint venture, in relation to the provision of
submarine rescue and related activities.
(g) In the normal course of business, the Company and certain
subsidiaries have given parental and subsidiary guarantees in
support of loan and banking arrangements.
(h) The Company and its subsidiaries may be parties to legal
proceedings and claims which arise in the ordinary course of
business, and can be material in value. Disclosure of contingent
liabilities or appropriate provision has been made in these
accounts where, in the opinion of the Directors, liabilities may
materialise. Other than provisions made against certain receivables
and claims, described in note 33 (b) estimates of the last filed
annual report, there are no other significant provisions and no
individually significant contingent liabilities that required
specific disclosure.
15 Related parties
Excepting the change of Directors and the acquisition of Subsea
Engenuity, there were no material changes to related parties or
associated transactions from those disclosed in the Annual Report
for the year ended 31 December 2020.
Independent review report to James Fisher and Sons plc
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2021 which comprises condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated cash flow statement, the condensed
consolidated statement of changes in equity and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU and
the Disclosure Guidance and Transparency Rules ("the DTR") of the
UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
company are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The directors are
responsible for preparing the condensed set of financial statements
included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
The annual financial statements of the group are prepared in
accordance with International Financial Reporting Standards as
adopted by the EU. The directors are responsible for preparing the
condensed set of financial statements included in the half-yearly
financial report in accordance with IAS 34 as adopted by the
EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it 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 for our
review work, for this report, or for the conclusions we have
reached.
Mike Barradell
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peters Square
Manchester
M2 3AE
6 September 2021
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END
IR FLFEAADIRIIL
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