TIDMFSJ
RNS Number : 3244E
Fisher (James) & Sons plc
10 March 2022
10 March 2022
James Fisher and Sons plc
Full year results for the year ended 31 December 2021
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'),
the leading marine service provider, announces its results for the
year ended 31 December 2021.
GBPm unless otherwise stated 2021 2020 % change
Revenue 494.1 518.2 (4.7)
Underlying operating profit margin 5.7% 7.8% (210bps)
Return on capital employed 3.6% 6.7% (310bps)
Underlying operating profit * 28.0 40.5 (30.9)
Underlying profit before tax * 19.7 31.5 (37.5)
Underlying diluted earnings per share (p) ** 20.0 47.9 (58.2)
Statutory operating loss (20.7) (43.5) 52.4
Statutory loss before tax (29.0) (52.5) 44.8
Statutory diluted loss per share (p) (55.2) (114.2) 51.7
Dividend per share (p) - 8.0p
* excludes separately disclosed items of GBP48.7m loss (2020:
GBP84.0m loss)
** excludes separately disclosed items of GBP37.8m loss (2020:
GBP81.6m loss)
Performance summary:
-- Challenging year, with revenue 4.7% lower at GBP494.1m and
underlying operating profit 30.9% lower at GBP28.0m. Loss before
tax was GBP29.0m (2020: GBP52.5m)
-- Disruption to the business from the ongoing global pandemic,
markets not recovering at expected rates, and an underestimation of
the headwinds faced by some of the businesses
-- UK lockdown affected H1; project delays and provisions further affected H2
-- Further provisions required against asset carrying values due
to prolonged impact of reduced profitability
-- Good strategic progress, creating the foundations for sustainable profitable growth:
o Significant contract wins in EDS (> GBP40m over the next 15
years) further validate our renewables value proposition
o Sale of the Paladin dive support vessel and two businesses generated cash proceeds of c.GBP20m
o Swordfish dive support vessel on hire for 2022
-- Good access to banking facilities, with GBP287.5m in total
and GBP200m through to at least 2024
Commenting on the results, Chief Executive Officer, Eoghan
O'Lionaird, said:
" 2021 was a challenging and disappointing year for the Group.
We experienced ongoing disruption from the global pandemic, our
markets did not recover at expected rates, and we underestimated
the headwinds faced by some of our businesses.
In June 2021, we outlined a roadmap to achieve our objective of
greater than 10% operating profit margin and greater than 15%
return on capital employed. This roadmap is based on three phases:
"Reset, Reinforce and Realise". Throughout the year we continued to
execute the Reset and Reinforce phases to create the foundations
for sustainable profitable growth.
Having sold Paladin and two of our businesses, during 2022 we
will continue to optimise our portfolio to focus on businesses
where we have a competitive advantage, strong growth prospects and
attractive returns. The internal change agenda will continue at
pace. We are executing several self-help initiatives, focusing on
operational and commercial excellence, including a LEAN programme,
to improve the underlying performance of the Group.
Performance in January and February 2022 was in line with
management's expectations. The full year outcome will be influenced
by ship-to-ship transfer business performance; JFD securing new
project wins from its pipeline; the strength of our subsea business
during the busy mid-year period, our ability to manage inflationary
pressures on the cost base; and the uncertainty arising from the
current geopolitical environment.
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."
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 2 in the full year
results.
2. Cautionary statement: This announcement contains certain
forward-looking statements with respect to the operations,
performance and financial condition of the Group. By their nature,
these statements involve uncertainty since future events and
circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this announcement and James Fisher and Sons plc
undertakes no obligation to update these forward-looking
statements. Nothing in this statement should be construed as a
profit forecast.
Chairman's review
Introduction
I joined James Fisher on 1 May 2021, with the Company amid some
major strategic and operational challenges. As with many
businesses, Covid-19 has been very disruptive from an operational
perspective, and we owe a debt of gratitude to our employees for
their commitment to minimising the impact on our customers by
continuing to deliver our critical services throughout the
pandemic.
2021 Performance
2021 was a disappointing year. Revenue declined by 4.7% to
GBP494.1m (2020: GBP518.2m) driven by the Marine Support division
being GBP34.9m (14.0%) behind 2020. Within Marine Support, the
Fendercare ship-to-ship transfer revenues were some 36% behind a
record year in 2020. Underlying operating profit fell by 30.9% to
GBP28.0m (2020: GBP40.5m) with the profitability of our Fendercare,
JFD and Tankships businesses being particularly challenged. As a
result of those performance challenges, combined with a high level
of financial leverage, the Company did not pay an interim dividend
for 2021 and the Board is not recommending the payment of a final
dividend for the year. The Board recognises the importance of
paying dividends and is committed to reinstating the dividend when
appropriate.
There is no doubt that the performance of James Fisher has been
impacted by Covid-19 over the past couple of years, but this is not
the sole reason for the Company's recent poor performance.
The Company has in the past made a number of acquisitions which
have enhanced earnings per share in the short term, but which have
contributed to an increase in debt levels and a long-term decline
in return on capital employed. Poor performance in a number of
these acquired businesses, combined with weakness in trading in our
traditional Tankships, Fendercare and JFD businesses, led to a
disappointing financial performance in 2021 and a high level of
debt. Our over-riding short term priorities are; firstly to reduce
our debt and optimise our portfolio through a series of disposals;
and secondly to focus on improving our operational and financial
performance.
In 2021 we sold the Paladin dive support vessel and the
Materials Testing and NDT businesses. Looking forward, we have
reviewed our portfolio with a view to executing further disposals
to both reduce debt and to optimise the portfolio and simplify the
Group by refocusing on markets where James Fisher can deliver
sustained, differentiated value to our customers.
In terms of performance improvement, we have begun an
operational excellence pilot program which will see Lean
methodologies being rolled out across the Group, with the objective
of improving product and service quality, customer service and cost
efficiency. We will soon embark on a Group-wide commercial
excellence programme, aimed at improving our capability in sales
effectiveness, creating customer value and commercial contracting.
During the year, we also undertook another Group-wide employee
engagement survey, the first to be externally-supported, and this
has highlighted several areas that we can address to improve
employee engagement.
Our CEO, Eoghan O'Lionaird, has expanded the Executive Committee
by including the divisional managing directors, thereby increasing
the focus on operational management. This, in turn, will bring the
Group functions closer to the operations and will unlock synergies
through operating more effectively as an integrated leadership
team.
We are putting these foundations in place to turnaround and
improve Group performance. However, it will take time for the
changes to take effect and, like any turnaround, to bear fruit.
Nonetheless the Board is pleased that these challenges are being
tackled head on with the objective of creating a platform from
which we can sustainably grow the business in the future.
Future direction
With a backdrop of ever-increasing focus on climate change, and
the acceleration of an energy transition to a low carbon economy,
the oil and gas services industry is likely to decline over the
long-term. However, it will take time for the required global low
carbon energy infrastructure to be developed. Over that period of
development, the energy transition requires the continued provision
of environmentally responsible products and services that support
our existing oil and gas customers. As the pace of the energy
transition towards sustainable energy sources accelerates, we are
equally focused on accelerating our own transition, as new
opportunities emerge for our well-established and fast-developing
services supporting the growth of renewable energy. We see those
opportunities most notably in offshore wind and the responsible
decommissioning of redundant oil and gas assets. We are
well-positioned in these fast-emerging sectors, where the Group can
combine its traditional oil and gas-oriented subsea capabilities
with newer, renewable-energy specific solutions, such as the
installation, monitoring and management of high voltage cabling in
offshore wind, and the provision of bubble curtains that protect
sea life from the noise impact of pile driving during the
construction of the wind farms. The key strategic challenge for the
Company over the next decade is in defining the optimal approach to
address the energy transition, capitalising on the many
opportunities that are available in renewables whilst enabling our
customers to make their own transitions in a financially and
environmentally responsible manner. It is a challenge on which our
management team is keenly focused and will continue to define with
more precision as the shape of the energy transition becomes
clearer.
Board changes
I am very grateful to my predecessor, Malcolm Paul, for all that
he did for James Fisher after being appointed to the Board in 2011.
After becoming Chairman in 2018, Malcolm played a key role in
supporting Eoghan O'Lionaird following his appointment as Chief
Executive in 2019. In addition, Stuart Kilpatrick stepped down from
the Board early in the year. Stuart, the Group Finance Director
since 2010, played an important role in the development of James
Fisher over the last decade. On behalf of the Board, I would like
to thank Malcolm and Stuart for their contributions, and to wish
them every success for the future.
Duncan Kennedy joined the Board as Chief Financial Officer on 4
May 2021. Duncan brings considerable international and listed
company experience to the Company, and will play a key role in
strengthening the performance culture across the Group.
I was also pleased to welcome two new Non-Executive Directors to
the Board. Kash Pandya was appointed to the Board on 1 November
2021 and brings a wealth of international experience as a FTSE 250
Chief Executive, having operated in many of the same geographies
and sectors as James Fisher.
Claire Hawkings, who was appointed to the Board on 1 January
2022, brings extensive international oil and gas experience, as
well as expertise in sustainability, health and safety and the
challenges of the energy transition.
Mike Salter will step down as a non-Executive Director at the
AGM in May 2022 after serving nine years on the Board. He has made
a considerable contribution to James Fisher, and his experience of
the marine and oil and gas services industries will be much
missed.
I am very grateful to the Board for its support and their
commitment in dealing with the challenges faced during what was a
difficult year.
Employees
I would like to finish this statement where I started, by again
expressing my gratitude, on behalf of the Board, to the employees
of James Fisher for all they have done in dealing with the
challenges of the past year, including those resulting from the
Covid-19 pandemic. Working for a Group that delivers critical
solutions to customers' complex problems in harsh environments is
always challenging, and I have huge respect for how our employees
go about this in their day-to-day jobs.
Conclusion
The last two years have been among the most challenging that the
Company has experienced in its 175-year history. The Board is
committed to delivering a successful turnaround of the James Fisher
Group and believes that the steps it is taking strategically,
operationally, and financially are in the best long-term interests
of all stakeholders. In taking these steps we will continue to live
by our purpose and values. I look forward to being able to report
on our progress over the coming years and to returning the Group to
sustainable profitable growth.
Chief Executive's review
It has been, without question, a most disappointing and
difficult year. The challenges we have faced during 2021 have been
both unprecedented in magnitude and unpredictable in nature. We
underestimated the headwinds faced by some of our businesses,
employees and management teams, who have been profoundly tested by
ongoing restrictions on travel; uncertainty in investment
decisions; disruption to supply chains; inflationary pressures;
competition for skilled resources; and a fundamental shift in
working practices.
With that as the backdrop, the Group's revenue, at GBP494.1m,
was 4.7% below 2020. Underlying operating profit of GBP28.0m was
30.9% below the GBP40.5m achieved in 2020. The Group recorded a
loss before tax of GBP29.0m compared to a loss before tax of
GBP52.5m.
The Group has borne through very difficult circumstances largely
thanks to the extraordinary efforts of our people. The headwinds we
faced have served to further strengthen our resolve and commitment
to focusing our business portfolio on markets where we have a
highly differentiated value proposition and can achieve
sustainable, profitable growth.
We are confident that the efforts of governments worldwide will
gradually enable businesses and their supply chains to serve their
customers in a more normalised way, leading to a recovery in our
core markets. Following two supremely challenging years, we are
focusing our efforts in areas that we can directly influence and
control in order to place the Group on a firm footing for 2022 and
beyond.
At our capital markets day in June 2021 we outlined a roadmap to
achieve this based on three phases: "Reset, Reinforce and Realise".
Throughout the year we have continued to execute the Reset and
Reinforce phases to create the foundations for sustainable
profitable growth.
Health and Safety
Our overarching goal remains to maintain the health and safety
of our employees, contractors, suppliers and customers at all
times. The nature of our operations means that we frequently face
hazards and harsh environments for which we are well prepared,
trained and equipped. The work that we have done in coordinating
health and safety statistics, incident information and best
practice is beginning to yield results in reducing the number of
incidents, and, crucially, in promoting further strengthening of
our safety culture.
However, the most significant challenge to our goal remains the
more human aspects of complacency, routine, familiarity and
distraction. These are inherently more difficult to address,
requiring active participation and personal engagement to assess
and act on potential threats to individuals and those around them.
In response we have launched a Group-wide awareness campaign with
the aim of bringing health and safety to the forefront of
employees' minds and making it relatable to their specific job role
and work environment, whilst equipping people with the ability to
identify hazards and empowering them to voice concerns and to take
the appropriate action regardless of seniority.
These measures, in addition to enhanced training of existing
employees and as part of the on-boarding process for new hires,
will further reinforce our commitment to health and safety and will
strengthen its foundation in our culture.
Short term initiatives:
Portfolio Management
During the year we completed the disposal of two businesses: a
materials testing business in the UK and Ireland and a
non-destructive testing business predominantly serving the
aerospace and process industries. Both were very sound businesses,
but they were neither connected to the key markets we are pursuing,
nor did they add to the wider Group as a source of competitive
advantage.
We value all our businesses including those we divest, and it is
important to us that we consider all stakeholders in making
decisions, including in finding the right future owner for those
that leave the Group so that they can continue their journeys and
flourish. In both cases I believe we have achieved the best
possible outcome and I would like to thank the employees of these
businesses for their contribution and wish both them and their new
owners every success for the future.
In June we concluded the sale of the dive support vessel (DSV)
Subtech Paladin to its new owners, Indian offshore service provider
Seamec, marking the first step in the return to a more asset light
strategy, focusing on the delivery of high-end niche services. This
strategy makes extensive use of partnerships to facilitate
preferential access to vessels on an as-needed basis. Since this
approach was adopted, we have successfully completed several
complex subsea projects in the West Africa region as a customer of
the Paladin's new owner. We continue to explore similar
opportunities, including the potential for a sale and leaseback
option for the DSV Subtech Swordfish, which was also acquired in
2019. We have secured a framework agreement with an important tier
1 contractor that will see the vessel utilised on a long-term basis
in the Middle East region.
As 2022 progresses, we will continue to critically evaluate the
portfolio against our tests of strategic fit and business
attractiveness (which we define as offering a combination of
competitive advantage, growing markets, and attractive financial
returns). Further divestments are likely, with the aim of reducing
net debt, simplifying the Group's portfolio, and allowing us to
allocate capital to strong growth prospects, such as
decommissioning and renewable energy.
Operational and Commercial Excellence
During 2021 a number of initiatives have been commenced with
specific focus on improving the underlying performance of the
Group:
-- An Operational Excellence programme to drive improvement in
capacity, delivery performance and customer satisfaction through
the implementation of LEAN principles.
-- Investment in upskilling our project delivery and commercial
resources to ensure that progress and project budgets are
effectively controlled, and that delivery, margins and customer
satisfaction are improved.
-- Continuous improvement in our risk management, contracting
principles and internal controls frameworks to provide robust
governance and mitigate margin erosion.
-- A Commercial Excellence programme focused on identifying and
capturing value in our key markets including cross-Group
co-ordination of sales resources to address specific market
opportunities where the Group can capture additional value.
-- Implementation of best practice tools and methodologies to
drive sales and commercial effectiveness.
-- Adoption of customer engagement metrics to inform and improve
satisfaction scores, as well as retention and referral rates.
Longer Term Focus
Our three markets of choice are energy, marine and defence.
These markets offer strong growth potential and we are making
progress in developing differentiated niche propositions that are
highly valued and rewarded by our customers.
The 'energy transition' is creating new growth prospects for our
businesses. As a Group, we are well positioned to take advantage of
the opportunities that will arise in a more responsible oil and gas
sector and the expected transition away from oil and gas into
renewable and other energy supplies. Within oil and gas, we see
continued and new opportunities for our services in the production,
transportation and decommissioning sectors. The global need for
decommissioning of old and abandoned oil and gas assets is
significant and we believe that our solutions in high-speed
cutting, lifting and well-abandonment are well placed to serve this
growing demand under our newly formed James Fisher Decommissioning
brand.
There is unquestionably an accelerated global investment in
offshore wind powered energy production, a key solution to the
world's challenge to decarbonise against a backdrop of ever-growing
demand for energy. James Fisher has a growing presence in the
offshore wind market and the long-term expectation is that this
will ultimately compensate for any reduction in demand for our oil
and gas-related products and services over the coming decades.
Whilst activity levels during 2021 were more subdued than
anticipated, there is increased visibility of future requirements
and confirmation of projects for delivery in 2022 and beyond. We
have consolidated our market offering under the James Fisher
Renewables brand, which for the first time brings all the relevant
operating companies and services under one go-to-market brand.
Demand in the marine sector softened considerably in 2021 due to
reduced economic activity. However, we anticipate that the general
increase in investment in offshore infrastructure, recovery of
commodity prices post-pandemic, and a return to a more normal
pattern of global trade should underpin a steady increase in demand
and completion of projects that were deferred or delayed due to
Covid-19.
In the defence sector, the Group holds leading positions in
submarine rescue, and life support and diving equipment. Our
innovative solutions for defence customers frequently address
challenges in the commercial subsea sector, particularly in terms
of safety and reliability in extremely hazardous environments. We
continue to supply our commercial diving equipment in over 40
countries globally. The business has a number of active product
innovation opportunities aimed at maintaining our leading position
and the pipeline for subsea vessel construction projects is
strong.
Sustainability
We recognise the environment as one of our key stakeholders, but
also consider sustainability to encompass financial security,
robust governance and workforce stability. In 2021, the year of
COP26, we have developed with the support of external experts an
ambitious and considered sustainability strategy with science-based
targets, which will be included in the 2021 Annual Report and
Accounts. Work is ongoing in 2022 to build on these
foundations.
We firmly believe that by investing in local communities,
working closely with our customers and suppliers, and having a
strong employee strategy, our shareholders will also benefit. In
this way we are creating an intrinsically sustainable company.
A special thanks to our people
At the onset of the Covid-19 pandemic, like many other
businesses, the Group needed to prioritise employee health and
safety, and to adapt to a remote working environment. The hybrid
working model that evolved during that time is proving itself to be
less transitory than perhaps some had assumed. We see this working
model as a step towards creating a more sustainable work/life
balance, as well as yielding benefits for our other stakeholders.
That said, we also recognise that this new working model has, at
times, created its own stresses and to address this, we very
quickly stepped up our mental health support and employee
engagement programme and this has continued to develop in 2021. We
know that we have work to do to fulfil our ambitions in this
critical area and are grateful for the feedback received from our
employees during 2021's employee engagement survey, in response to
which action plans across the Group are being implemented during
2022.
Rather than being discouraged by the challenges of the pandemic
and remote working, our extraordinary people have been emboldened
by them. They have doubled down in understanding and meeting our
customers' needs. They have given up their time to offer assistance
in our communities, bring food to the needy and help the unwell. I
am immensely proud of our people. It is in times of adversity that
our true values are evident, and throughout this past year, James
Fisher's people have time and again demonstrated their pioneering
spirit, integrity, energy and resilience and they continue to do so
in support of those affected by the war in Ukraine. Although the
path has been difficult it is to the great credit of our people
that we have advanced so far on our journey to becoming a
purpose-led, values-driven business serving all our stakeholders. I
cannot thank them enough.
Looking Ahead
2021 was a challenging and disappointing year for the Group. We
experienced ongoing disruption from the global pandemic, our
markets did not recover at expected rates, and we underestimated
the headwinds being faced by some of our businesses.
In June 2021, we outlined a roadmap to achieve our objective of
greater than 10% operating profit margin and greater than 15%
return on capital employed. This roadmap is based on three phases:
"Reset, Reinforce and Realise". Throughout the year we continued to
execute the Reset and Reinforce phases to create the foundations
for sustainable profitable growth.
Having sold Paladin and two of our businesses, during 2022 we
will continue to optimise our portfolio to focus on businesses
where we have a competitive advantage, strong growth prospects and
attractive returns. The internal change agenda will continue at
pace. We are executing a number of self-help initiatives, focusing
on operational and commercial excellence, including a LEAN
programme, to improve the underlying performance of the Group.
Performance in January and February 2022 was in line with
management's expectations. The full year outcome will be influenced
by ship-to-ship transfer business performance; JFD securing new
project wins from its pipeline; the strength of our subsea business
during the busy mid-year period, our ability to manage inflationary
pressures on the cost base; and the uncertainty arising from the
current geopolitical environment.
In 2022 we celebrate 175 years since James Fisher founded the
company in Barrow-in-Furness. In the intervening years, largely
thanks to the pioneering spirit, integrity, energy and resilience
of its employees, the Company has continually adapted to overcome
some of the most challenging events the world has ever known, and I
have no doubt that we will do so again to deliver sustainable,
profitable growth for our investors and value creation for all our
stakeholders.
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.
Operating Review
Marine Support
Change
2021 2020 %
Revenue (GBPm) 214.5 249.4 (14.0)
Underlying operating profit (GBPm) 5.0 10.1 (50.5)
Operating loss (GBPm) (21.0) (69.5) 69.8
The Marine Support division consists of three businesses, all
aimed at supporting the marine and energy markets. Marine
Contracting principally provides subsea services to both the oil
& gas and offshore wind markets; Fendercare provides essential
ship-to-ship transfer services and related products; and Digital
and Data Services provides innovative technological solutions aimed
at improving the efficiency and productivity of our customers'
offshore assets. The division saw a significant decline in both
revenue and underlying operating profit in 2021, although there was
a reduced level of separately disclosed items, with non-cash
provisions of GBP26.0m against goodwill, doubtful receivables and
tangible assets recognised in the year.
Marine Contracting
The business showed positive progress during 2021. Revenue
increased by 4.0% to GBP113.3m and after a particularly challenging
year in 2020, operating losses were significantly reduced. As part
of our strategy to reduce the asset-intensity of this business and
to focus more on partnering and the provision of differentiated
services, the business sold one of its dive support vessels in June
and the other is now on long-term hire for the majority of
2022.
EDS, the high voltage cabling specialist providing services to
the offshore wind industry, continued its positive momentum with
three new multi-year contracts to maintain offshore windfarm
electrical infrastructure over periods of 13 to 15 years. The
contracts are worth more than GBP40m over the period, which
includes "availability" bonuses of around GBP8m for ensuring a
pre-agreed level of uptime that could be earned and recognised in
future periods.
In Mozambique, the major LNG project remains suspended due to
the ongoing security issues in the region. The Group settled all
outstanding claims against its customer prior to the end of 2021
and is ready to support the remobilisation of the project in due
course.
The order book for 2022 is strong, with several projects
deferred from 2021 expected to commence in the first half of the
year and a good level of identified tendering targets.
Fendercare
Following a record year in 2020, the Fendercare business
experienced a significant decline in 2021. Not only was the
comparative year of 2020 boosted by crude oil trading on the back
of the significant volatility in the oil price in 2020, but the
business was also challenged in 2021 by unfavourable market
developments in Malaysia and Brazil. Revenue from the Fendercare
group was GBP77.9m, some 32% below 2020. Within this, the
ship-to-ship revenues were down 36%.
The business is responding to the challenges by focusing on
securing new sites to conduct STS operations in Malaysia, and has
been successful in securing new contracts in Brazil. Although a
return to the record highs seen in 2020 is not expected (absent
significant volatility in the oil price) the business is expected
to show some growth in 2022. A steady increase in the number of
enquiries for LNG STS operations provides some encouragement for
the future.
The sale of related products such as fenders also declined in
2021 as customers sought to defer capital expenditure. An inventory
provision of GBP2.7m has been recognised in the period, reflecting
a prolonged reduction in expectations for product sales as a direct
result of the pandemic.
Digital and Data Services ("DDS")
DDS is a collection of businesses aimed at providing technology
solutions to the oil and gas and renewable energy markets. Revenue
in 2021 fell by 9% to GBP23.3m, principally due to Strainstall, the
provider of load and asset monitoring solutions, which experienced
difficult market conditions with the downturn in construction
activity reducing demand for its products. Other businesses, such
as AIS, which has developed and sells Digital Twin software,
providing operators with an online, real-time asset management
solution aimed at reducing their operating costs by allowing asset
condition to be monitored from anywhere in the world rather than on
site, showed good growth, with new contract wins servicing offshore
oil BP and Chevron in particular.
Specialist Technical
Change
2021 2020 %
Revenue (GBPm) 133.2 130.4 2.1
Underlying operating profit (GBPm) 9.9 14.0 (29.3)
Operating profit (GBPm) 7.0 12.4 (43.5)
Specialist Technical saw modest revenue growth of 2.1%, but a
reduction in underlying operating profit of GBP4.1m, adversely
affected by the write-off of GBP2.5m in relation to customer claims
previously recognised but ultimately not agreed. Separately
disclosed items of GBP2.9m recognised in the year included the
impairment of tangible and intangible assets within the JFD
business.
JFD experienced a mixed year. Work continued on its significant
long-term projects, with three submarine rescue vessels (SRVs) and
a 500m saturation diving spread all progressing well towards final
milestones. One of the SRVs was delivered to its Korean customer in
December and only relatively minor work is required in 2022 to
complete all other projects, triggering final payment milestones.
The business is looking to secure new projects during 2022, with a
strong sales pipeline, although with no new orders in hand, the
projects side of the business is at a cyclical low point. Demand
for diving equipment was subdued during 2021 as many customers had
fewer divers in the water, largely due to Covid-19 restrictions,
and deferred spend on new equipment.
The Group's nuclear decommissioning business, JFN, showed some
positive momentum during the first half of the year, but results
for the full year were ultimately held back by the decision of a
major customer to defer to 2022 new project awards expected in H2
2021. The level of tendering activity early in 2022 is encouraging,
with new contracts for engineering design work already won early in
the year.
Offshore Oil
Change
2021 2020 %
Revenue (GBPm) 86.3 78.0 10.6
Underlying operating profit (GBPm) 11.1 11.2 (0.9)
Operating profit (GBPm) (5.2) 8.4 (161.9)
Offshore Oil achieved strong revenue growth of 10.6% during the
year, driven by increased demand for its bubble curtain solutions
and well-testing services. This traditional oil and gas service
business has seen significant success in repositioning itself into
new markets, such as the supply of bubble curtain solutions to
offshore wind construction projects which protect subsea wildlife
from the noise of piling, as well as an earlier stage opportunity
in aquaculture which is showing promising signs of future demand.
Bubble curtain revenues increased from GBP3.9m in 2020 to GBP7.4m
in 2021.
James Fisher Offshore, which offers decommissioning services to
the oil and gas industry experienced a somewhat frustrating year,
with projects delayed at short notice during the second half of the
year and the impact of a bad debt provision against amounts
receivable from a financially distressed customer holding back
profitability. Despite the project delays in Q4 2021, demand for
decommissioning services continues to increase, with 13% growth in
revenue to GBP8.0m in 2021 (2020: GBP7.1m).
RMSpumptools (RMS) saw strong demand for its market-leading
artificial lift products, which both prolong the useful life of oil
wells and prevent the unwanted escape of methane gas during
production. As the oil industry increasingly focuses on minimising
its environmental impact, we believe that demand for RMS products
will continue to increase.
Separately disclosed items of GBP16.3m have been recognised in
relation to goodwill impairment (GBP13.9m) and receivables
(GBP2.4m). The impairment in respect of receivables relates to a
specific counterparty risk and receivables billed over 12 months
ago in relation to certain projects.
Tankships
Change
2021 2020 %
Revenue (GBPm) 60.1 60.4 (0.5)
Underlying operating profit (GBPm) 4.8 8.0 (40.0)
Operating profit (GBPm) 1.3 8.0 (83.8)
Revenue for the year was broadly in line with 2020, however
profitability was adversely affected by a combination of the UK
lockdown in Q1 2020, increased operating costs due to enhanced
Covid-19 safety protocols and quarantine requirements, and a
short-term dip in utilisation during September. Utilisation rates
across the fleet increased over the course of the year from an
average of 86% in Q1 to 95% in Q4. The business's exposure to the
shorter-term spot-rate charters has increased slightly in the year
to c. 23% (2020: c. 21%) as a result of contracts that have not
been renewed. During the first two months of 2022, utilisation
rates were strong and spot charter rates are showing good signs of
recovery.
Impairment charges of GBP3.5m have been recognised in the year,
reflecting a reassessment of residual values of older vessels that
are reaching end of life. The two newly-commissioned dual-fuel
(marine gasoil and LNG) vessels are well into the construction
phase and are due for delivery late in 2022, replacing two vessels
that are approaching the end of their useful operational lives.
Cattedown Wharves, which serves the South-West of England,
performed well in the year, notwithstanding the lockdown in Q1
2021. Volumes of cargo transported through the port have now
largely recovered to pre-pandemic levels.
Financial Review
2021 was another challenging year for the Group. The global
pandemic continued to adversely affect trading conditions,
resulting in both revenue and underlying operating profit being
below 2020. Despite the reduction in performance, our businesses
have remained resilient throughout, which is testament to the hard
work and dedication of all employees.
Underlying performance in 2021
Revenue was 4.7% below 2020 at GBP494.1m (2020: GBP518.2m). It
was a mixed performance across the divisions, with Specialist
Technical and Offshore Oil showing growth, Tankships being in line
and Marine Support behind 2020. Within Marine Support, the
ship-to-ship ("STS") transfer revenues in the Fendercare business
showed a significant decline due to 2020 being a record year,
compounded by market challenges in Malaysia and Brazil.
Gross margin was down by 220 bps to 24.4% compared to 26.6% in
2020. Contributing factors include the reduction in higher margin
STS revenues and a provision against slow-moving inventory
reflecting reduced demand for Fendercare's related fender products,
together with increased operating costs as a result of enhanced
COVID safety protocols across the world, particularly in our
offshore project-based businesses and Tankships division which both
rely on mobilising significant numbers of people over the course of
a year.
Admin expenses were 4.3% below 2020 at GBP94.5m, as the Group
continued to keep tight control over its operating expenses
following cost reductions achieved in 2020. No general pay increase
was awarded to employees in 2021, which is something that the Board
has sought to rectify in 2022, with an average pay increase of 3%
being awarded in January against a backdrop of increasing inflation
and competition for talent.
Foreign exchange provided a modest headwind in the year, with an
average GBGBP:US$ rate of GBP1:$1.37 compared to GBP1:$1.29 in
2020. This adversely affected revenue by 2.1% and underlying
operating profit by 4.5% respectively.
Underlying operating profit fell from GBP40.5m in 2020 to
GBP28.0m in 2021.
Separately disclosed items
Principally as a result of a second year of reduced
profitability and the ongoing impacts from the pandemic, the Group
has recognised a net charge in relation to separately disclosed
items of GBP48.7m, reduced from GBP84.0m in 2020.
In 2021, non-cash goodwill and intangible asset impairments of
GBP29.2m (2020: GBP19.4m) have been recognised principally in
relation to the Marine Support and Offshore Oil divisions, as
future growth expectations have been tempered by the ongoing
effects of the pandemic. Impairment provisions have also been made
against tangible fixed assets, principally vessels, of GBP9.3m
(2020: GBP34.0m including GBP31.6m in relation to two dive support
vessels). The carrying value of these assets prior to impairment
exceeded both the value in use and likely recoverable amount.
Bad debt impairments of GBP4.3m have been made in respect of
receivables relating to a specific counterparty risk and
receivables billed over 12 months ago in relation certain projects
(2020: GBP19.3m provision against three specific projects). All
balances, including those provided for in 2020, continue to be
pursued, with a number of ongoing legal actions to support
recovery. The Group reassessed the methodology applied to expected
credit losses and now requires all debt over 180 days overdue to be
provided for unless there is compelling evidence to support future
collection.
Costs of material litigation of GBP3.1m (2020: nil) have been
incurred in relation to a number of resolved and ongoing
disputes.
The Group sold the Paladin dive support vessel and two
businesses during the year. These sales generated net proceeds of
GBP20.8m. After deducting the carrying values of the related
assets, liabilities and goodwill, the Group recognised a net profit
of GBP0.6m in relation to the disposals.
The net cash outflow in relation to other separately disclosed
items was GBP1.7m (2020: GBP3.3m).
Statutory operating loss
The Group's operating loss, which is the sum of underlying
operating profit and separately disclosed items, reduced to
GBP20.7m (2020: GBP43.5m) as a result of lower separately disclosed
items partially offset by the reduction in underlying operating
profit.
Finance charges
The Group's net finance charges reduced by GBP0.7m to GBP8.3m
(2020: GBP9.0m). Bank interest reduced from GBP7.0m to GBP6.0m
during the year as a result of lower borrowings. Non-cash pension
and lease liability charges are broadly in line with 2020 at
GBP2.3m (2020: GBP2.0m). The Group's interest cover ratio, which is
calculated by dividing underlying operating profit by net finance
charges (excluding IFRS16 finance charges) is 5.4 times (2020: 6.1
times), which compares to banking covenants that require the ratio
to be greater than 3.0 times.
Taxation
The Group has recognised an overall net tax credit of GBP0.8m in
the year (2020: net charge of GBP4.8m). The underlying tax charge
for the year is GBP10.1m (2020: GBP7.2m) representing an underlying
effective tax rate of 51.2% (2020: 22.8%). Compared to the UK
Corporation Tax rate of 19%, the following principal factors have
had an adverse impact in 2021:
- Losses incurred during 2021 but not provided for as a deferred tax asset (+13pps)
- Higher effective tax rate in overseas jurisdictions (+11pps)
- Retranslation of the Group's net deferred tax liability to 25%
from 19%, reflecting the forthcoming UK Corporation Tax increase
(+7pps)
Tax on separately disclosed items is a net credit of GBP10.9m,
relating principally to the recognition of a deferred tax asset in
the UK on certain fixed assets that were impaired in 2020. This
follows a review of the likely future profitability of the UK group
and likely duration of the ongoing business associated with those
fixed assets. Corporation Tax payments during the year were in line
with 2020 at GBP7.9m.
Dividend and EPS
Having regard to the financial position of the Group, the Board
has recommended no dividends during 2021 (2020: interim dividend
GBP4.0m; no final dividend). The Board remains committed to
reintroducing a sustainable dividend policy at the right time.
Basic and diluted earnings per share are a loss of 55.2p, compared
to a loss of 114.2p in 2020.
Cashflow and borrowings
The Group generated GBP48.9m (2020: GBP88.0m) from operating
activities. The reduction is due to lower profits and a negative
working capital movement in the year. Net working capital was an
outflow in 2021 of GBP8.1m (2020: net inflow GBP19.9m), driven
primarily from timing of payments on long-term projects. A number
of cash milestones are due in 2022 from long-term projects.
Net cashflow from separately disclosed items (excluding the sale
of assets and businesses which is included in "investing
activities") was GBP1.7m (2020: GBP3.9m) and tax payments were in
line with 2020 at GBP7.9m.
Cashflows from investing activities generated a GBP1.9m outflow
(2020: GBP24.2m outflow) as the disposal of the Paladin dive
support vessel and two businesses between them generated GBP20.9m
in proceeds. This was balanced against the deployment of GBP22.1m
(2020: GBP18.9m) of capital expenditure, principally aimed at
ensuring the sea-worthiness of our vessels (GBP4.3m), investment in
decommissioning and related equipment (GBP3.8m), upgrading our
bubble-curtain equipment (GBP1.8m) and the purchase of ship-to-ship
transfer equipment, for both LNG and oil operations (GBP2.5m).
Investment in M&A was much reduced, with GBP1.1m being deployed
in 2021, principally in relation to the acquisition of Subsea
Engenuity, compared to GBP7.9m in 2020 which related to the
purchase of Fathom and deferred consideration on previously
completed transactions.
The Group reduced net debt, including all lease liabilities, by
GBP12.9m to GBP185.6m. Within this, the net bank borrowing position
improved by GBP26.0m to GBP139.6m (2020: GBP165.6m). Additional
lease liabilities principally relate to a new charter vessel in the
Caribbean and the renewal of seven existing leases within the
Tankships division.
GBPm 2021 2020 Movement
Bank net borrowings (139.6) (165.6) 26.0
-------- -------- ---------
Finance leases (IAS17
basis) (7.8) (9.4) 1.6
-------- -------- ---------
Right of use liabilities (38.2) (23.1) (15.1)
-------- -------- ---------
Net debt (185.6) (198.1) 12.5
-------- -------- ---------
The Group's net debt for the purposes of its banking covenants
consists of net bank borrowings, finance lease liabilities (on an
IAS17 basis), and bonds and guarantees, as summarised in the table
below. On a covenants basis, net debt has reduced by GBP47.8m. The
ratio of net debt : EBITDA has remained broadly steady at 2.9
times, which compares to banking covenants requiring the ratio to
be less than 3.5 times.
GBPm 2021 2020 Movement
Bank net borrowings (139.6) (165.6) 26.0
-------- -------- ---------
Finance leases (IAS17
basis) (7.8) (9.4) 1.6
-------- -------- ---------
Bonds and guarantees (8.4) (28.3) 19.9
-------- -------- ---------
Net debt - covenants
basis (155.8) (203.6) 47.8
-------- -------- ---------
EBITDA - covenants
basis 54.3 73.2
-------- -------- ---------
Net debt : EBITDA 2.9 2.8
-------- -------- ---------
Liquidity
The Group has retained good access to borrowing facilities. A
new GBP130m revolving credit facility was signed during 2021 with
three of the Group's existing lenders (replacing GBP142.5m of
expiring bilateral facilities). The table below summarises
borrowing facilities by year of maturity, with and without the
inclusion of available "+1" extensions. It is the Board's current
expectation that extension periods will be exercised in the normal
course.
GBPm 2022 2023 2024 2025 2026 Total
No extensions 40.0 47.5 200.0 - - 287.5
----- ----- ------ ----- ------ ------
With extensions 40.0 - 87.5 30.0 130.0 287.5
----- ----- ------ ----- ------ ------
Balance sheet
The Group's net assets reduced by GBP27.3m to GBP210.6m (31
December 2020: GBP237.9m), broadly in line with the loss for the
year of GBP28.2m.
Non-current assets
Non-current assets reduced by GBP51.7m in the year. Goodwill
reduced by GBP33.0m to GBP133.5m (31 December 2020: GBP166.5m) as a
result of impairment charges of GBP29.2m, disposals of businesses
that had GBP3.9m of goodwill allocated to them and foreign exchange
differences of GBP1.6m. Intangible assets reduced to GBP13.3m from
GBP20.1m due to amortisation and impairment charges of GBP9.1m
offset by additions of GBP2.2m, including GBP0.7m in respect of the
acquisition of Subsea Engenuity.
Within Property, Plant and Equipment the Group invested GBP19.4m
in additions. This was offset by disposals with a net book value of
GBP15.0m (principally the Paladin dive support vessel),
depreciation of GBP23.6m, impairment charges of GBP5.1m against
underutilised assets, the reclassification of the Swordfish dive
support vessel to "Held for sale" within current assets (GBP10.7m)
and foreign exchange differences of GBP1.0m.
Right of use assets increased by GBP9.9m, principally as a
result of movements in the Group's Tankships fleet. One new vessel
was taken on a long-term operating lease in the Caribbean to
service a newly won, long-term commercial chartering arrangement,
and seven existing vessel leases were renewed in the period.
Depreciation of GBP8.4m against vessels was provided in the normal
course and an impairment provision of GBP4.2m was booked to reflect
the latest view of the likely residual values of a number of
vessels in the fleet.
Current assets and current liabilities
The Group's net current assets increased by GBP17.7m to
GBP85.5m. Short term cash and borrowings increased by GBP21.1m to a
net position of GBP34.4m of cash. Assets held for sale with a value
of GBP10.7m at 31 December 2021 were transferred from non-current
assets, representing the Swordfish dive support vessel.
Non-current liabilities
Long-term borrowings reduced slightly to GBP173.9m (2020:
GBP178.8m). An increase in long-term lease liabilities of GBP10.8m
represents the new charters within the Tankships division. Net
pension liabilities, as measured under IAS19, reduced to GBP1.9m
compared to GBP10.3m at 31 December 2020. The Group continues to
make deficit repair payments in line with agreed profiles.
Principal risks and uncertainties
The most significant risks that the Board considers may affect
our business are listed below. No new principal risks have been
identified during the year.
-- Health and safety risk
-- Cyber security risk
-- Operating in emerging markets
-- Climate change
-- Contractual risk
-- Project delivery risk
-- Recruitment and retention of key staff
-- Financial risk
-- Pandemic risk
A full description of the principal risk and uncertainties, the
changes during 2021, and their management and mitigation as well as
emerging risks will be set out in the 2021 Annual Report and
Accounts.
Directors' Responsibilities
The following is an extract of the full statement prepared in
connection with the Company's Annual Report and Accounts for the
year ended 31 December 2021.
The Directors of the Company confirm that, to the best of their
knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic report and the Directors' report include a fair
review of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
The Directors of James Fisher and Sons plc and their respective
responsibilities are set out in the 2021 Annual Report and
Accounts.
The responsibility statement was approved by the Board on 9
March 2022 and signed on its behalf by:
E P O'Lionaird D Kennedy
Chief Executive Officer Chief Financial Officer
9 March 2022
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2021
Year ended Year ended
31 December 2021 31 December 2020
----------------------------------- -----------------------------------
Before Before
separately Separately separately Separately
disclosed disclosed disclosed disclosed
items items Total items items Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 3 494.1 - 494.1 518.2 - 518.2
Cost of sales (373.6) (11.0) (384.6) (380.6) (43.2) (423.8)
-------- -----------
Gross profit 120.5 (11.0) 109.5 137.6 (43.2) 94.4
Administrative expenses (94.5) (37.7) (132.2) (98.7) (40.8) (139.5)
Share of post-tax
results of associates 2.0 - 2.0 1.6 - 1.6
Operating profit/(loss) 28.0 (48.7) (20.7) 40.5 (84.0) (43.5)
Net finance expense 3 (8.3) - (8.3) (9.0) - (9.0)
Profit/(loss) before
taxation 19.7 (48.7) (29.0) 31.5 (84.0) (52.5)
Income tax 5 (10.1) 10.9 0.8 (7.2) 2.4 (4.8)
------------ ------------
Profit/(loss) for
the year 9.6 (37.8) (28.2) 24.3 (81.6) (57.3)
============ =========== ======== ============ =========== ========
Attributable to:
Owners of the Company 10.0 (37.8) (27.8) 24.1 (81.6) (57.5)
Non-controlling interests (0.4) - (0.4) 0.2 - 0.2
9.6 (37.8) (28.2) 24.3 (81.6) (57.3)
============ =========== ======== ============ =========== ========
Loss per share 6 pence pence
Basic (55.2) (114.2)
Diluted (55.2) (114.2)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2021
Year ended Year ended
31 December 31 December
2021 2020
GBPm GBPm
Loss for the year (28.2) (57.3)
------------ ------------
Items that will not be classified to the income statement
Actuarial gain/(loss) in defined benefit pension schemes 6.3 (9.3)
Tax on items that will not be reclassified (0.5) 1.1
------------ ------------
5.8 (8.2)
Items that may be reclassified to the income statement
Exchange differences on foreign currency net investments (2.6) (7.8)
Effective portion of changes in fair value of cash
flow hedges (2.6) 0.6
Effective portion of changes in fair value of cash
flow hedges in joint ventures 0.3 (0.2)
Net changes in fair value of cash flow hedges transferred
to income statement 0.3 (0.1)
Deferred tax on items that may be reclassified 0.4 1.1
------------ ------------
(4.2) (6.4)
Total comprehensive income for the year (26.6) (71.9)
============ ============
Attributable to:
Owners of the Company (26.1) (72.0)
Non-controlling interests (0.5) 0.1
------------
(26.6) (71.9)
============ ============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2021
31 December 2021 31 December 2020
restated*
Notes GBPm GBPm
Non-current assets
Goodwill 133.5 166.5
Other intangible assets 13.3 20.1
Property, plant and equipment 122.2 158.2
Right-of-use assets 41.8 31.9
Investment in joint ventures 8.0 7.5
Other investments 1.4 1.4
Other receivables 10.1 0.8
Deferred tax assets 9.6 5.2
339.9 391.6
----------------- -----------------
Current assets
Inventories 49.0 46.6
Trade and other receivables 157.3 162.0
Assets held for sale 8 10.7 -
Cash and cash equivalents 10 68.0 93.1
285.0 301.7
----------------- -----------------
Current liabilities
Trade and other payables (149.5) (139.3)
Provisions (2.0) -
Current tax (4.5) (7.6)
Borrowings 10 (33.6) (79.8)
Lease liabilities (9.9) (7.2)
(199.5) (233.9)
----------------- -----------------
Net current assets 85.5 67.8
----------------- -----------------
Total assets less current liabilities 425.4 459.4
----------------- -----------------
Non-current liabilities
Other payables (1.3) (3.6)
Provisions (1.1) (1.6)
Retirement benefit obligations 9 (1.9) (10.3)
Cumulative preference shares (0.1) (0.1)
Borrowings (173.9) (178.8)
Lease liabilities (36.1) (25.3)
Deferred tax liabilities (0.4) (1.8)
(214.8) (221.5)
----------------- -----------------
Net assets 210.6 237.9
================= =================
Equity
Called up share capital 12.6 12.6
Share premium 26.8 26.7
Treasury shares (0.6) (0.2)
Other reserves (20.4) (16.5)
Retained earnings 191.5 214.6
Total shareholders equity 209.9 237.2
Non-controlling interests 0.7 0.7
Total equity 210.6 237.9
================= =================
* cash and cash equivalents and borrowings (current) have been
restated for the 2020 comparative period to reflect a gross up of
cash at bank and in hand and overdraft balances. Right-of-use
assets, trade and other payables (current) and retained earnings
have been restated for the 2020 comparative to reflect a change in
accounting policy in respect of dry dock overhauls (see note
1).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2021
31 December 31 December
2021 2020
restated*
Note GBPm GBPm
(Loss)/profit before tax (29.0) (52.5)
Adjustments to reconcile (loss)/profit
before tax to net cash flows
Depreciation and amortisation 44.2 49.0
Separately disclosed items (excluding
amortisation) 45.8 81.1
Other non-cash items 7.8 7.1
(Increase)/decrease in inventories (2.7) 2.0
(Increase)/decrease in trade and other
receivables (15.4) 30.9
Increase/(decrease) in trade and other
payables 10.0 (13.0)
Defined benefit pension cash contributions
less service cost (2.2) (4.8)
------------ ------------
Cash generated from operations 58.5 99.8
Cash outflow from separately disclosed
items (1.7) (3.9)
Income tax (payments)/receipts (7.9) (7.9)
------------ ------------
Cash flow from operating activities 48.9 88.0
Investing activities
Dividends from joint venture undertakings 1.6 1.8
Proceeds from the disposal of a subsidiary,
net of cash disposed 6.2 1.3
Proceeds from the disposal of property,
plant and equipment 14.7 2.6
Finance income 0.3 0.3
Acquisition of subsidiaries, net of cash
acquired (1.1) (7.9)
Investment in joint ventures and other
investments - (0.5)
Acquisition of property, plant and equipment (22.1) (18.9)
Development expenditure (1.5) (2.9)
------------ ------------
Cash flows used in investing activities (1.9) (24.2)
Financing activities
Proceeds from the issue of share capital 0.1 0.2
Finance costs (5.6) (7.0)
Net purchase of own shares by Employee
Share Ownership Trust (0.5) (0.9)
Notional purchase of own shares for LTIP
vesting (0.5) (1.0)
Capital element of lease repayments (13.7) (13.0)
Proceeds from borrowings 84.0 34.3
Repayment of borrowings (89.9) (64.5)
Dividends paid - (4.0)
Dividends paid to non-controlling interest - (0.2)
------------ ------------
Cash flows used in financing activities (26.1) (56.1)
Net increase in cash and cash equivalents 10 20.9 7.7
Cash and cash equivalents at 1 January 13.5 7.5
Net foreign exchange differences 0.1 (1.7)
Cash and cash equivalents at 31 December 34.5 13.5
============ ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Total Non-
Share Share Retained Other Treasury shareholders controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January
2020
as reported 12.6 26.5 284.7 (10.6) - 313.2 0.8 314.0
Accounting
policy
change -
Right-of-use
refit
capitalisation - - 2.0 - - 2.0 - 2.0
------ -------- --------- --------- --------- ------------- ------------ -------
At 1 January
2020 12.6 26.5 286.7 (10.6) - 315.2 0.8 316.0
Loss for the
year - - (57.5) - - (57.5) 0.2 (57.3)
Other
comprehensive
income - - (8.7) (5.8) - (14.5) (0.1) (14.6)
Contributions by
and
distributions
to owners:
Ordinary
dividends
paid - - (4.0) - - (4.0) - (4.0)
Dividend paid to
minority
interest - - - - - - (0.2) (0.2)
Remeasurement of
non-controlling
interest
put option - - - (0.1) - (0.1) - (0.1)
Share based
payments - - 0.1 - - 0.1 - 0.1
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 - - (1.0) - - (1.0) - (1.0)
Arising on the
issue
of shares - 0.2 - - - 0.2 - 0.2
Transfer - - (0.7) - 0.7 0.0 - 0.0
At 31 December
2020 12.6 26.7 214.6 (16.5) (0.2) 237.2 0.7 237.9
Loss for the
year - - (27.8) - - (27.8) (0.4) (28.2)
Other
comprehensive
income - - 5.8 (4.1) - 1.7 (0.1) 1.6
Contributions by
and
distributions
to owners:
Remeasurement of
non-controlling
interest
put option - - - 0.2 - 0.2 - 0.2
Changes in
ownership
interest
without
a change in
control - - (0.7) - - (0.7) 0.5 (0.2)
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 31 December
2021 12.6 26.8 191.5 (20.4) (0.6) 209.9 0.7 210.6
====== ======== ========= ========= ========= ============= ============ =======
NOTES TO THE PRELIMINARY RESULTS
1. General information
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 consolidated financial statements
comprise the financial statements of the Company, its subsidiary
undertakings and its interest in associates and jointly controlled
entities (together the Group), for the year ended 31 December 2021.
The Company's shares are listed on the London Stock Exchange. The
Company and consolidated financial statements were approved for
publication by the Directors on 9 March 2022.
The Group financial statements have been prepared in accordance
with UK-adopted international accounting standards. The Company
financial statements have been prepared in accordance with
UK-adopted international accounting standards and as applied in
accordance with the provisions of the Companies Act 2006. The
financial statements are prepared on a going concern basis and on a
historical cost basis, modified to include revaluation to fair
value of certain financial instruments. As permitted by section 408
of the Companies Act 2006, a separate income statement and related
notes for the holding company have not been presented in these
financial statements. The profit after taxation in the Company was
GBP12.2m (2020: GBP15.9m loss). The Group and Company financial
statements are presented in Sterling and all values are rounded to
the nearest million pounds (GBPm) except when otherwise
indicated.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 December 2021
or 2020. Statutory accounts for 2020 have been delivered to the
registrar of companies, and those for 2021 will be delivered in due
course. The auditor has reported on those accounts; their reports
were (i) unqualified, (ii) did not include a reference to any
matters to which the auditor 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.
Going concern
The Directors have, at the time of approving these Financial
Statements, a reasonable expectation that the Group and Company
have adequate resources to continue in operational existence for at
least 12 months from this reporting date and have therefore
continued to adopt the going concern basis of preparation.
In light of the continuing Covid-19 global pandemic 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 ongoing risk to future financial
performance. Liquidity is monitored through daily balance
reporting, weekly forecasting and 12 month cash flow
forecasting.
The Group had GBP111.5m of undrawn committed facilities at 31
December 2021 (2020: GBP120.2m). The Group refinanced GBP130m of
revolving credit facilities during the year. At 31 December 2021,
the Group had GBP287.5m of committed facilities, a small decrease
from the GBP300m at 31 December 2020. GBP40m revolving credit
facilities are due for renewal within twelve months from the date
of this report. Forecasts have been prepared which continue to show
headroom should they not be renewed. All revolving credit
facilities are linked to covenant compliance requirements, being a
net debt to EBITDA ratio and interest cover. The Group has been in
compliance with covenant requirements in the year, post year end,
and is forecasting to be compliant for at least 12 months from the
date of approval of these financial statements. Post year end, as
at the date of approval of the financial statements, the Group has
approximately GBP102m of undrawn credit facilities available.
The Directors' base case forecast reflects financial performance
in the year ended 31 December 2021 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 against facilities for the next 12 months.
Against these negative scenarios, which reduced operating profit by
GBP5m in 2022 and GBP1m in 2023, adjusted projections showed no
breach of covenants. Additional sensitivities which reduced cash
receipts by GBP10m in 2022 and GBP20m in 2023 and delayed project
delivery reducing profit by GBP10m in 2022 and GBP20m in 2023 and
deferring debtor allocation by GBP3m in 2022 and by GBP6m in 2023
were also run separately in combination with the severe but
plausible downside and adjusted projections showed no breach of
covenants. Further mitigating actions could also be taken in such
scenarios should it be required, including reducing capital
expenditure, continuing to sell non-core, underperforming
businesses and reducing forecast dividend payments and not carrying
out any acquisitions.
Taking into account the level of cash and available facilities
outlined above and having undertaken rigorous assessment, the
Directors consider that the Group and Company have sufficient funds
to allow them to meet their liabilities as they fall due for at
least 12 months from the date of approval of the financial
statements and therefore continue to adopt the going concern basis
of accounting in preparing these Financial Statements.
Change in accounting policy
The accounting policy in respect of dry dock overhauls on leased
vessels has been changed to defer the overhaul costs as a component
of the related tangible fixed asset and depreciate over their
useful economic lives until the next estimated overhaul rather than
build up a provision in preparation for the next estimated
overhaul. The prior year comparatives have been restated to reflect
this change. The change in accounting policy is considered to
provide more relevant and reliable information as the dry docks are
directly attributable to the use of the vessel and this change
aligns the accounting policy for both owned and leased vessels. As
a result previous dry dock overhaul provisions (recognised in trade
and other payables) of GBP0.8m have been reversed and the
right-of-use assets has increased by GBP1.2m. The impact on
consolidated total equity is an increase from GBP235.9m to
GBP237.9m. There is no impact on the company only total equity.
2. Alternative performance measures
The Group uses a number of alternative (non-Generally Accepted
Accounting Practice (non-GAAP)) performance measures which are not
defined within IFRS. The Directors use these measures in order to
assess the underlying operational performance of the Group and, as
such, these measures are important and should be considered
alongside the IFRS measures. The adjustments are separately
disclosed and are usually items that are significant in size and/or
non-recurring in nature. The following non-GAAP measures are
referred to in the Annual Report and Accounts.
2.1 Underlying operating profit and underlying profit before
taxation
Underlying operating profit is defined as operating profit
before separately disclosed items, which comprise: 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
GBPm GBPm
Operating loss (20.7) (43.5)
Separately disclosed items before taxation 48.7 84.0
Underlying operating profit 28.0 40.5
Net finance expense (8.3) (9.0)
Underlying profit before taxation 19.7 31.5
------- -------
2.2 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 less profit attributable
to non-controlling interests, divided by the weighted average
number of ordinary shares in issue during the year. The Directors
believe that underlying EPS provides a better understanding of the
underlying earnings capability of the Group. Underlying earnings
per share is set out in note 6.
2.3 Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use
assets, less cash and cash equivalents 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
GBPm GBPm
Net assets 210.6 237.9
Less right-of-use assets (41.8) (31.9)
Plus net borrowings 185.6 198.1
Capital employed 354.4 404.1
------- -------
Underlying operating profit 28.0 40.5
Notional tax at the underlying effective tax rate (14.3) (9.2)
13.7 31.3
Average capital employed 377.4 467.6
Return on average capital employed 3.6% 6.7%
------- -------
2.4 Underlying Cash conversion
Cash conversion is defined as the ratio of operating cash flow
to underlying operating profit. Operating cash flow comprises:
2021 2020
GBPm GBPm
Cash generated from operations 58.5 99.8
Dividends from joint venture undertakings 1.6 1.8
Capital element of lease repayments (13.7) (13.0)
Other 0.7 0.5
------- -------
Operating cash flow 47.1 89.1
Underlying operating profit 28.0 40.5
Cash conversion 168% 220%
------- -------
2.5 Underlying earnings before interest, tax, depreciation and
amortisation (Underlying EBITDA)
Underlying EBITDA, in line with the Group's banking covenants,
is defined as the underlying operating profit before interest, tax,
depreciation and amortisation.
2021 2020
GBPm GBPm
Underlying operating profit 28.0 40.5
Depreciation and amortisation 44.2 49.0
Less: Deprecation on right-of-use assets (13.2) (11.9)
Amortisation of acquired intangibles (note 5) (2.9) (2.9)
IFRS 16 impact removed (1.8) (1.5)
------- -------
Underlying EBITDA 54.3 73.2
------- -------
2.6 Underlying dividend cover
Underlying dividend cover is the ratio of underlying diluted
earnings per share to the total dividend per share.
2021 2020
pence pence
Underlying earnings per share 20.0 47.9
Total dividends per share* 0.0 8.0
Underlying dividend cover (times) 0.0 6.0
------ ------
2.7 Underlying net borrowings
Underlying net borrowings is net borrowings as set out in note
10, excluding right-of-use operating leases. The Group's banking
arrangements are based on underlying net borrowings.
2021 2020
GBPm GBPm
Net borrowings (note 10) 185.6 198.1
Less: right-of-use operating leases (38.4) (23.1)
------- -------
147.2 175.0
------- -------
2.8 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. Segmental information
The Group has four operating segments reviewed by the Board:
Marine Support, Specialist Technical, Offshore Oil and Tankships.
The Board assess the performance of the segments based on
underlying operating profit, underlying operating margin and return
on capital employed. It considers that this information is the most
relevant in evaluating the performance of its segments relative to
other entities which operate in similar markets. 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.
Year ended 31 December 2021 Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Segmental revenue
- point in time 173.7 46.3 86.5 - - 306.5
- over time 41.0 88.3 - 60.1 - 189.4
Inter-segmental sales (0.2) (1.4) (0.2) - - (1.8)
Revenue 214.5 133.2 86.3 60.1 - 494.1
======== =========== ========= ========== ========== ========
Underlying operating profit/(loss) 5.0 9.9 11.1 4.8 (2.8) 28.0
Separately disclosed items (26.0) (2.9) (16.3) (3.5) - (48.7)
-------- ----------- --------- ---------- ---------- --------
Operating (loss)/profit (21.0) 7.0 (5.2) 1.3 (2.8) (20.7)
Net finance expense (8.3)
--------
Loss before tax (29.0)
Income tax 0.8
Loss for the year (28.2)
========
Assets and liabilities
Segmental assets 189.7 154.8 124.2 75.1 73.4 617.2
Investment in joint ventures 2.6 3.2 2.2 - - 8.0
-------- ----------- --------- ---------- ---------- --------
Total assets 192.3 158.0 126.4 75.1 73.4 625.2
Segmental liabilities (77.4) (60.3) (26.4) (39.2) (211.3) (414.6)
-------- ----------- --------- ---------- ---------- --------
114.9 97.7 100.0 35.9 (137.9) 210.6
======== =========== ========= ========== ========== ========
Other segmental information
Capital expenditure 6.1 2.7 6.3 4.3 - 19.4
Depreciation and amortisation 12.3 6.9 12.1 12.4 0.5 44.2
======== =========== ========= ========== ========== ========
Revenue disclosed in the income statement is comprised of goods
and services of GBP370.0m (2020: GBP398.9m), equipment hire of
GBP68.5m (2020: GBP40.2m) and construction contract income of
GBP55.6m (2020: GBP79.1m).
Year ended 31 December 2020 Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Segmental revenue
- 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)
Revenue 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 and liabilities
Segmental assets 246.7 156.0 139.4 54.7 89.0 685.8
Investment in joint ventures 2.1 3.0 2.4 - - 7.5
-------- ----------- --------- ---------- ---------- --------
Total assets 248.8 159.0 141.8 54.7 89.0 693.3
Segmental liabilities (90.5) (57.6) (24.9) (21.4) (261.0) (455.4)
-------- ----------- --------- ---------- ---------- --------
158.3 101.4 116.9 33.3 (172.0) 237.9
======== =========== ========= ========== ========== ========
Other segmental information
Capital expenditure 7.1 1.9 5.4 3.1 - 17.5
Depreciation and amortisation 17.8 6.7 12.7 11.5 0.3 49.0
======== =========== ========= ========== ========== ========
4. Separately disclosed items
In order for a better understanding of the underlying
performance of the Group certain items are disclosed separately
(note 2). Separately disclosed items are as follows:
2021 2020
GBPm GBPm
Acquisition related income and (expense):
Costs incurred in acquiring/disposing of businesses (0.5) (1.0)
Amortisation of acquired intangibles (note 2) (2.9) (2.9)
-------------- -------
(3.4) (3.9)
Marine support restructure - (3.9)
Gain/(loss) on disposal of businesses 0.3 (3.5)
Gain on disposal of Dive support vessel 0.3 -
Costs of material litigation (3.1) -
Impairment charges:
Intangible assets (29.2) (19.4)
Dive support vessels - (31.6)
Tangible fixed assets (9.3) (2.4)
Receivables (4.3) (19.3)
-------------- -------
Separately disclosed items before taxation (48.7) (84.0)
Tax on separately disclosed items 10.9 2.4
-------------- -------
(37.8) (81.6)
============== =======
During the year, separately disclosed items were in relation to
the following matters:-
Acquisition related income and expense comprises costs incurred
on the acquisition/disposal of businesses including external due
diligence costs, amortisation of acquired intangibles and any
adjustment for contingent consideration. As set out in note 2 these
items fluctuate with acquisition activity and are disclosed
separately to provide a better comparison to businesses that are
not acquisitive.
Disposal of businesses relates to the disposal during 2021 of
James Fisher Testing Services Ltd which was sold for proceeds of
GBP5.7m and resulted in a gain of GBP0.8m. Also, the sale of James
Fisher NDT Ltd for which proceeds were GBP1.2m and loss on disposal
of GBP0.5m.
Disposal of DSV is the sale of the Paladin vessel for $17.3m
proceeds and a GBP0.3m gain.
Costs of material litigation are costs arising from the process
of exiting a number of historic joint venture companies.
Impairment charges: Intangible assets comprise goodwill of
GBP27.5m and GBP1.7m development costs. Tangible fixed assets
comprise assets in the Marine support, Specialist technical and
Tankship divisions fair value is less than carrying net book value.
The 2021 impairment in respect of receivables relates to a specific
counterparty risk and receivables billed over 12 months ago in
relation to certain projects.
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.
In 2020 separately disclosed items were in relation to the
following matters:-
(i) Acquisition related income and expense comprises costs
incurred on the acquisition of businesses including external due
diligence costs, amortisation of acquired intangibles and any
adjustment for contingent consideration. As set out in note 2 these
items fluctuate with acquisition activity and are disclosed
separately to provide a better comparison to businesses that are
not acquisitive.
(ii) Due to the deferral of subsea projects in oil and gas and
renewables, a material restructure of marine support activities was
completed during 2020. The charge of GBP3.9m related to redundancy
and notice costs in relation to 202 employees.
(iii) Disposal of businesses relates to the disposal in 2020 of
JF Nuclear GmbH for proceeds of GBP1.6m which resulted in a loss of
GBP1.2m. The balance includes GBP2.0m in respect of the exchange of
interests in an associate and GBP0.3m relating to cost adjustments
in respect of businesses disposed of in previous years.
(iv) Impairment charges
(a) Intangible assets comprise goodwill of GBP17.0m and other
intangible asset impairments of GBP2.4m in relation to development
expenditure and intellectual property where expected future cash
flows no longer justify carrying value. The goodwill impairment in
2020 related to the Subtech (GBP10.0m) and James Fisher Testing
Services (GBP7.0m) cash generating units.
(b) Dive support vessels: In 2019, the Group acquired two dive
support vessels with the strategic aim of targeting the market of
subsea projects in the oil and gas sector in West Africa and the
Middle East. The combination of changes in energy prices in the
first half of 2020 and the onset of the global pandemic resulted in
lower utilisation of these vessels than expected and gave rise to
an impairment charge of GBP31.6m based on their recoverable
amount.
(c) the tangible fixed asset impairment in 2020 relates to
certain assets in Marine Support and Offshore Oil where latest
forecasts of future cash flows in respect of these assets is less
than carrying net book value.
(d) the 2020 impairment in respect of receivables relates to a
number of projects commenced by the Group during 2019 where payment
for amounts invoiced or considered due under the contract have yet
to be paid and for part of what the Board considers it appropriate
to make provision. A number of these issues are subject to legal
process and the outcome is uncertain.
5. Taxation
(a) The tax charge is based on profit for the year
and comprises: 2021 2020
GBPm GBPm
Current tax:
UK corporation tax (0.7) (1.1)
Overseas tax (6.0) (7.9)
Adjustment in respect of prior years:
UK corporation tax 1.3 2.7
Overseas tax (0.3) (1.1)
------
Total current tax (5.7) (7.4)
------ ------
Deferred tax:
Origination and reversal of temporary differences:
Current year
UK corporation tax 8.3 1.9
Overseas tax 0.0 1.1
Prior year
UK corporation tax (0.6) (0.3)
Overseas tax (1.2) (0.1)
Total tax on profit for the year 0.8 (4.8)
====== ======
The total tax charge in the income statement includes a further
GBP0.3m (2020: GBP0.1m) which is stated within the share of
post-tax results of joint ventures.
Current year UK tax 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.
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to shareholders by the weighted average number of
ordinary shares in issue during the year, after excluding 54,571
(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 shareholders 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 31 December 2021, 650,513 options (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
2021 2020
Number Number
of of
shares shares
Basic weighted average number of shares 50,345,477 50,342,732
Potential exercise of share based payment schemes 10,560 85,973
Diluted weighted average number of shares 50,356,037 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
2).
2021 2020
GBPm GBPm
Profit attributable to owners of the Company (27.8) (57.5)
Separately disclosed items 48.7 84.0
Tax on separately disclosed items (10.9) (2.4)
Underlying profit attributable to owners of the
Company 10.0 24.1
======= =======
Earnings per share
pence pence
Basic earnings per share (55.2) (114.2)
Diluted earnings per share (55.2) (114.2)
Underlying basic earnings per share 20.0 48.0
Underlying diluted earnings per share 20.0 47.9
------- --------
7. Dividends paid and proposed
2021 2020 2021 2020
pence per pence
share per share GBPm GBPm
Equity dividends on ordinary shares declared
and paid:
Interim dividend for 2020 - 8.0 - 4.0
Less dividends on own shares held by ESOP - -
- 4.0
===== =====
No final dividend is proposed in respect of the year ended 31
December 2021 (2020: GBPnil).
8. Assets held for sale
In June 2021, management agreed a plan to sell the Dive Support
Vessel (DSV) known as the Swordfish within the Marine Support
division and consequently GBP10.7m of vessels have been
reclassified from property plant and equipment. The vessel is being
actively marketed by a third party ship broker.
9 Retirement benefit obligations
The Group and Company defined benefit pension scheme obligations
relate to the James Fisher and Sons plc Pension Fund for Shore
Staff (Shore Staff), the Merchant Navy Officers Pension Fund
(MNOPF) and the Merchant Navy Ratings Pension Fund (MNRPF). The
financial statements incorporate the latest full actuarial
valuations of the schemes which have been updated to 31 December
2021 by qualified actuaries using assumptions set out in the table
below. The Group's obligations in respect of its pension schemes at
31 December 2021 were as follows:
Group
---------------
2021 2020
GBPm GBPm
Shore staff (1.0) (8.8)
MNOPF (0.9) (1.3)
MNRPF 0.0 (0.2)
------ -------
(1.9) (10.3)
====== =======
10. Reconciliation of net borrowings
Net debt comprises interest bearing loans and borrowings less
cash and cash equivalents.
31 December Cash Other Exchange 31 December
2020 flow non-cash movement 2021
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 13.5 20.9 - 0.1 34.5
Debt due within one year (0.2) 0.1 - - (0.1)
Debt due after one year (178.9) 5.8 (0.9) - (174.0)
------------ ----- --------- --------- ------------
(179.1) 5.9 (0.9) - (174.1)
Lease liabilities (32.5) 13.7 (27.0) (0.2) (46.0)
---------
Net borrowings (198.1) 40.5 (27.9) (0.1) (185.6)
------------ ----- --------- --------- ------------
31 December Cash Other Exchange 31 December
2019 flow non-cash Movement 2020
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 7.5 7.7 - (1.7) 13.5
Debt due within one year (0.3) 0.1 - - (0.2)
Debt due after one year (207.4) 30.1 (0.7) (0.9) (178.9)
------------ ----- --------- --------- ------------
(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)
------------ ----- --------- --------- ------------
11. Share capital
Allotted, called up and fully
paid
GBP1 Cumulative
25p Ordinary shares Preference shares
In millions of shares 2021 2020 2021 2020
In issue at 1 January 50.4 50.3 0.1 0.1
Exercise of share options 0.0 0.1 - -
In issue at 31 December 50.4 50.4 0.1 0.1
========== ========== ========= =========
2021 2020 2021 2020
GBPm GBPm GBPm GBPm
Issued share capital 12.6 12.6 0.1 0.1
========== ========== ========= =========
The preference shareholders are entitled to receive 3.5%
cumulatively per annum, payable in priority to any dividend on the
ordinary shares. The ordinary shareholders are entitled to receive
dividends as declared from time to time by the Directors.
Shares all carry equal voting rights of one vote per share held.
They also have the right to attend and speak at general meetings,
exercise voting rights and appoint proxies. Neither type of share
is redeemable. In the event of a winding-up order the amount
receivable in respect of the cumulative preference shares is
limited to their nominal value. The ordinary shareholders are
entitled to an unlimited share of the surplus after distribution to
the cumulative preference shareholders.
2021 2020
Treasury shares GBPm GBPm
54,571 (2020: 9,227) ordinary shares of
25p 0.6 0.2
===== =====
The Company has an established Employee Share Ownership Trust,
the James Fisher and Sons plc Employee Share Ownership Trust, to
meet potential obligations under share option and long-term
incentive schemes awarded to employees. The historic cost of these
shares at 31 December 2021 was GBP0.6m (2020: GBP0.2m). The trust
has not waived its right to receive dividends.
In the year ended 31 December 2021, 26,738 (2020: 34,670)
ordinary shares with an aggregate nominal value of GBP6,685 (2020:
GBP8,668) were issued to satisfy awards made under the Company's
Executive Share Option Scheme at option prices of 521.67p and 567p
(2020: 410p and 522p) per share giving rise to total consideration
of GBP530,055 (2020: GBP404,024).
During the year the Trust purchased 50,000 (2020: 50,000) of its
own shares in the market at an average cost per share of GBP9.87
(2020: GBP17.82) and a total cost of GBP0.5m (2020: GBP0.9m).
12. Related party transactions
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 2020 Annual
Report.
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