TIDMFSJ
RNS Number : 0283Q
Fisher (James) & Sons plc
25 October 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
25 October 2021
James Fisher and Sons plc
Trading update
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'),
the leading marine service provider, today publishes a trading
update.
-- Following a difficult start to the year, improvement in the
Fendercare ship-to-ship transfer business remains below the rate
previously expected, with some growing evidence of market shifts in
some key territories.
-- JFD has reached an impasse in negotiations over c.GBP2m due
on a long-term project and is no longer forecasting a resolution in
2021.
-- Customers of the Group's Marine Contracting, Decommissioning
and Nuclear businesses have further delayed projects in recent
weeks. The projects were previously expected to commence, and in
some cases finish, in 2021. The continuing challenges presented by
the global pandemic, particularly in the safe mobilisation of teams
to work sites, have influenced customer decision-making
processes.
-- A recent deterioration in the condition of a financially
distressed customer has increased bad debt risk by c.GBP2m.
-- Tankships experienced a poor month in September and as a
result has a more cautious outlook for the full year.
-- Revenue in the quarter ended 30 September 2021 was 7.6%
higher than Q3 2020 and 8.7% higher than Q2 of 2021. Year to date
revenue is 3.9% below prior year.
-- The Board now anticipates Underlying Operating Profit for the
full year, before separately disclosed items, to be in the range of
GBP27m - GBP32m.
The Group continues to trade within its banking covenants (which
are formally measured at each half year end) and at 30 September
had headroom of c.GBP100m against its revolving credit
facilities.
In response to the latest short-term trading outlook, management
is performing a detailed review of the Group's cost base and
balance sheet. Aligned with the Board's commitment to 'fix or exit'
non-core and underperforming businesses, the Group is continuing to
advance at pace the divestment of non-core businesses and assets
aimed at generating significant proceeds over the next year, to
reduce net debt and financial leverage as well as to simplify the
business.
Notwithstanding some revenue opportunity moving from Q4 2021 to
2022, the Board currently expects this to be materially offset by
the continuation of challenges the Group is currently experiencing
with customer demand and the safe mobilisation of teams to work
sites.
The Board remains confident in the Group's strategy to deliver
sustainable profitable growth from the significant market
opportunities that are available to it and remains committed to
executing on its long-term strategy.
Divisional Summary
Marine Support
The Fendercare ship-to-ship transfer business has continued to
improve, but still not at the rate previously expected. There is
growing evidence of market shifts in some key territories and the
management team is conducting a detailed review of locations and
trading partners to ensure that the business has the optimal mix of
each.
Marine Contracting is trading ahead of prior year but has
suffered from recent customer and weather delays that have pushed
projects into H1 2022. Within our Renewables franchise EDS, the
high voltage specialist, continues to perform well and has recently
signed two multi-year, multi-million pound contracts with tier 1
contractors for monitoring services in Northern Europe, and more of
these contracts remain in the sales pipeline. There has been no
material change in the situation in Mozambique. The LNG projects
remain suspended and dispute resolution discussions with our
clients are ongoing. The Digital and Data Services businesses are
in line with expectations and have strong order books.
Offshore Oil
The ScanTech businesses continue to perform well, showing strong
growth over 2020 as demand for well-testing services, compressors
and other asset rentals continues. ScanTech's bubble curtain
offering to the Renewables market is continuing to see high demand
with YTD revenue twice that achieved in the same period of 2020.
RMSpumptools remains in line with expectations. The James Fisher
Offshore business has experienced multiple delays to awarded
projects and, following a recent deterioration in the condition of
a financially distressed customer has increased bad debt risk of
c.GBP2m. The most recent example being a customer delaying a
multi-million dollar decommissioning project scheduled for Q4 2021
into 2022. Although frustrating, the order book is strong and
demand for decommissioning services continues to show growth.
Specialist Technical
JFD's short-cycle diving equipment and training revenues remain
soft, as previously announced, and are expected to remain so until
well into 2022. In addition, the business has reached an impasse in
negotiations over c.GBP2m due on a long-term project and is no
longer forecasting a resolution in 2021.
The nuclear decommissioning business is in line with
expectations at the end of Q3, however a major customer has
unexpectedly deferred the award of new projects planned for Q4 2021
into 2022, leaving JFN with a shortfall for the remainder of the
year. The business is focusing on short-term cost saving measures
to mitigate the impact.
Tankships
Following a consistent trend of improvements in trading from
February to August, the Tankships division experienced lower
volumes of cargo and subdued market spot rates in September. It is
not expected that the business will be able to recover the
September shortfall and management has a more cautious outlook for
the remainder of the year.
Group Revenue (unaudited)
GBPm 2020 2021 Quarter on Cumulative
quarter variance
variance
Q1 129.4 109.3 -15.5% -15.5%
------ ------ ----------- -----------
Q2 128.7 124.4 -3.3% -9.5%
------ ------ ----------- -----------
Q3 125.7 135.2 +7.6% -3.9%
------ ------ ----------- -----------
Q4 134.4
------ ------ ----------- -----------
For further information
Chief Executive
Officer
James Fisher and Eoghan O'Lionaird Chief Financial
Sons plc Duncan Kennedy Officer 020 7614 9508
FTI Consulting Richard Mountain 020 3727 1340
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