TIDMFSJ
RNS Number : 5167Y
Fisher (James) & Sons plc
07 September 2022
7 September 2022
James Fisher and Sons plc
Half year results for the six months ended 30 June 2022
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'),
the leading marine service provider, announces its unaudited
results for the six months ended 30 June 2022 ('the period').
H1 2022 H1 2021 % change
Revenue GBP238.4m GBP233.7m 2.0%
Underlying operating profit margin 4.0% 5.7% (170)bps
Return on capital employed 2.7% 5.4% (270)bps
Underlying operating profit * GBP9.5m GBP13.3m (28.6)%
Underlying profit before tax * GBP4.8m GBP9.2m (47.8)%
Underlying diluted earnings per share ** 6.7p 12.8p (47.7)%
Statutory operating profit GBP7.9m GBP12.2m (35.2)%
Statutory profit before tax GBP3.2m GBP8.1m (60.5)%
Statutory diluted earnings per share 3.7p 26.8p (86.2)%
Interim dividend per share Nil Nil -
* excludes separately disclosed items of GBP1.6m loss (2021:
GBP1.1m loss) (note 5)
** excludes separately disclosed items of GBP1.4m loss (2021:
GBP7.1m profit) (note 5)
Financial summary:
-- Revenue growth of 2.0% but business mix held back operating profit
-- Strong growth in Offshore Oil and Tankships offset by lower
contribution from Specialist Technical, as expected, and subdued
ship-to-ship transfer activities in Marine Support
-- Net debt at 30 June 2022 of GBP172.4m (30 June 2021: GBP189.2m)
Operational progress:
-- Turnaround activities continue:
o Restructuring activities expected to deliver c.GBP3m in
annualised savings
o Operational and commercial excellence programmes to be
expanded to additional businesses by year end
o Ongoing programme to rationalise the portfolio
Outlook
-- H2 anticipated to be materially stronger than H1
o July and August trading was in line with expectations
o Strong order books in Offshore Oil and Marine Contracting
o Tankships expected to continue trading well
o Encouraging pipeline of potential projects in Specialist
Technical, albeit timing remains subject to risk
-- Given the limited visibility on the timing of new contracts
in Specialist Technical, the Group's full year underlying operating
profit is now expected to be broadly in line with 2021
-- Seasonally driven operational cash flows are expected to lead
to reduced year end net debt and leverage, which would be further
decreased by any portfolio disposals in H2
-- Although the ongoing geopolitical and economic climate is
likely to remain uncertain, the Board is confident that it is
taking the right steps to stabilise the business and create a
platform for sustained recovery
Commenting, Angus Cockburn, Chairman said:
"The first half saw an increase in Group revenue but a decrease
in profit, due to portfolio mix. Offshore Oil and Tankships
produced strong revenue growth and improved profitability and
Marine Contracting continued its turnaround. However, Fendercare's
markets remained subdued and the cyclical nature of project work in
Specialist Technical was reflected in its performance.
The Board and management team are taking decisive actions to
address the ongoing issues affecting the Group's performance,
including rolling out an operational excellence programme across
the Group; continuing to explore ways to rationalise the portfolio;
and restructuring the Fendercare and JFD businesses. More strategic
actions will be completed in the second half.
Trading and order intake in the busy summer months of July and
August were in line with expectations. H2 is anticipated to be
materially stronger than H1. We expect to see continued strong
demand within the Offshore Oil and Tankships divisions throughout
the rest of the year. Order book coverage in Marine Contracting is
good. Whilst Specialist Technical's sales pipeline remains strong,
the timing of new, significant, long-term project wins is
uncertain. As a result, full year underlying operating profit is
now expected to be broadly in line with 2021.
The seasonality of working capital and collection of one JFD
project milestone are expected to deliver a reduction in net debt
by the end of the year. The debt position could be further improved
by our ongoing portfolio rationalisation activities, which aim to
reduce net debt and simplify and focus the Group.
Although the ongoing geopolitical and economic climate is likely
to remain uncertain, the Board is confident that it is taking the
right steps to stabilise the business and create a platform for
sustained recovery."
Notes:
1. James Fisher uses alternative performance measures (APMs) as
key financial indicators to assess the underlying performance of
the business. APMs are used by management as they are considered to
better reflect business performance and provide useful additional
information. APMs include underlying operating profit, underlying
profit before tax, underlying diluted earnings per share,
underlying return on capital employed and cash conversion. An
explanation of APMs is set out in note 3 in these half year
results.
2. Certain statements contained in this announcement constitute
forward-looking statements. Forward-looking statements involve
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of James Fisher to be
materially different from future results, performance or
achievements expressed or implied by such statements. Such risks,
uncertainties and other factors include exchange rates, general
economic conditions and the business environment.
For further information:
Chief Executive
Officer
James Fisher and Jean Vernet Chief Financial
Sons plc Duncan Kennedy Officer 020 7614 9500
Richard Mountain
FTI Consulting Susanne Yule 020 3727 1340
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A virtual analyst presentation of the Half Year Results will
take place today at 9.00am. The presentation can be accessed
via:
Webcast link: https://storm-virtual-uk.zoom.us/j/81409724071
Or call in (audio only)
US: +1 646 876 9923
UK: +44 208 080 6591
Webinar ID: 814 0972 4071
Review of the six months ended 30 June 2022
Overview
Revenue increased by 2.0% in the first half to GBP238.4m (H1
2021: GBP233.7m) but portfolio mix held back operating margins,
resulting in a reduction in underlying operating profit to GBP9.5m
(H1 2021: GBP13.3m).
Strong double digit revenue growth and improved profitability in
our Offshore Oil and Tankships divisions was offset by a more
challenging period for the Specialist Technical division, as
expected, where the cyclical nature of project work is reflected in
its lower result. Operating profit in the Marine Support division
was broadly in line with 2021. The Marine Contracting businesses
continued their turnaround towards profitability, benefitting from
ongoing restructuring activities and the Swordfish DSV being on
hire. However, this was offset by subdued market demand for
ship-to-ship transfer services in the higher margin Fendercare
business, where current geopolitical events and a relatively
stable, high oil price have adversely affected performance.
The reduced profitability and seasonal nature of the business
contributed to an increase in net bank borrowings of GBP19.9m in
the first half. COVID lockdowns in China also adversely impacted
borrowings, delaying the Group's ability to complete the final
steps of two long-term JFD projects that trigger final cash
milestones. As a result, net debt on a covenant basis was GBP172.4m
(31 December 2021: GBP155.8m; 30 June 2021: GBP189.2m) representing
3.3x EBITDA, compared to a covenant limit of 3.5x. One JFD
milestone was invoiced in August and this, together with the
seasonal profile of the Group's subsea business activities, is
expected to support a working capital inflow over the second half
and an improved net debt and leverage position at year end. The net
debt position could be further improved by our ongoing portfolio
rationalisation activities
Operational progress
The Group's focus remains on the intersection of the Energy,
Defence and Marine markets. Good progress has been made in the
renewables and decommissioning businesses, with a number of
successfully completed projects in the period. The Group has
continued to roll out its operational excellence programme,
building on the pilot programme at RMSpumptools where we are
already seeing positive results. Additional businesses are now in
the process of deploying LEAN methodologies, aimed at making
process improvement and efficiencies.
In line with the commitment to rationalise the portfolio, the
Group is exploring strategic options for several businesses, which
may result in their future sale. The Swordfish Dive Support Vessel
is now on rent until Summer 2023, although discussions continue
with regards to a potential sale of the vessel. In May, the Group
signed a Memorandum of Understanding with National Marine Dredging
Corporation of Abu Dhabi, with a view to jointly pursuing
commercial opportunities, initially in the Middle East, but with
the potential to expand geographically in future.
In response to the extended period of subdued activity, the
Fendercare business completed a restructuring programme during H1,
which yielded annualised cost savings of c.GBP1.5m. Post period-end
the JFD business also completed a restructuring programme, with
annualised cost savings expected to be c.GBP1.5m. Costs of
achieving the restructurings in the full year results are
anticipated to be c.GBP3m, of which approximately half is cash.
Financial performance
Revenue increased by 2.0% to GBP238.4m (H1 2021: GBP233.7m).
Compared to H1 2021 the Group delivered strong growth in Offshore
Oil (+28.0%) and Tankships (+32.5%) offset by reductions in Marine
Support (-4.1%) and Specialist Technical (-17.4%). The mixed
performance across divisions reflects market conditions and, in the
case of Specialist Technical, a low point in the long-term projects
cycle following several years of high levels of activity.
Demand for the products and services of the Offshore Oil
division was high, with a significant increase in well-testing
activity and record order intake for RMSpumptools in the period.
Tankships performed well and showed significant growth against a
comparator period that was adversely affected by lockdowns in the
UK. The Marine Support division continued to experience lower
levels of activity, particularly in the high-margin ship-to-ship
transfer business. The Group expected a reduction within the
Specialist Technical division as a number of long-term projects are
now all-but complete and have yet to be replaced with new project
wins, however the operating loss in that division was more
pronounced due to GBP2m of provisions against underperforming
contracts.
Underlying operating profit, which excludes separately disclosed
items, was GBP9.5m, GBP3.8m behind H1 2021, resulting in an
underlying operating profit margin of 4.0% compared to 5.7% in the
prior period. The reduction in higher margin Specialist Technical
long-term projects outweighed the positive progress within the
Offshore Oil and Tankships divisions. Planned pay increases for the
first time in two years cost GBP1.5m in the first half of the year.
High levels of inflation are predicted to continue, and the Board
is actively exploring measures to provide support to employees,
which could have some impact on financial performance during
H2.
Statutory operating profit, at GBP7.9m, is GBP4.3m below prior
year, reflecting the reduction in underlying operating profit
performance discussed above, and net separately disclosed items of
GBP1.6m (H1 2021: GBP1.1m). The Group generated a gain of GBP1.0m
on the sale of a Tankships vessel (H1 2021: GBP0.3m profit on
vessel disposal), which was offset by amortisation of acquired
intangible assets of GBP1.1m (2021: GBP1.4m) and a past service
cost of GBP1.5m recognised in relation to the MNRPF pension fund,
of which the Group is a participant following a High Court ruling
in February clarifying additional ill health benefits. There has
been no cash outflow in relation to the pension fund past service
cost.
Profit before tax was GBP3.2m (H1 2021: GBP8.1m) and the
underlying effective tax rate was 28.4% compared to 29.3% in the
period to 30 June 2021. The prior period included a GBP8.2m credit
through the income tax in relation to the recognition of a deferred
tax asset. This was shown as a separately disclosed item in H1
2021. There are no similar one-offs in H1 2022.
Earnings per share was 3.7p compared to 26.8p in H1 2021,
reflecting the reduced operating profit performance and
non-repeating tax credit recognised in the prior period.
Dividends
The Board remains committed to reintroducing a sustainable and
progressive dividend policy at the appropriate time. However,
considering our current absolute levels of net debt and the
resulting leverage ratio, the Board has not declared an interim
dividend for 2022 (2021: Nil).
Liquidity
At 30 June 2022 the Group had revolving credit facilities
totalling GBP287.5m (31 December 2021: GBP287.5m; 30 June 2021:
GBP300.0m). Undrawn facilities were GBP115.5m. Given the level of
undrawn facilities, a GBP40m revolving credit facility that expired
in July 2022 was not replaced.
Bank borrowings of GBP159.5m were GBP19.9m higher than 31
December 2021, but GBP10.8m below 30 June 2021. The Group typically
experiences a working capital outflow in the first half of each
year due to the seasonality of the business.
GBPm 30 June 31 Dec 30 June 30 June 31 Dec 30 June
2022 2021 2021 2022 2021 2021
Net bank borrowings 159.5 139.6 170.3 159.5 139.6 170.3
-------- ------- -------- -------- ------- --------
Finance leases (IAS
17) 7.7 7.8 8.4 7.7 7.8 8.4
-------- ------- -------- -------- ------- --------
Right of use liabilities 38.3 38.2 32.3 - - -
-------- ------- -------- -------- ------- --------
Bonds/guarantees - - - 5.2 8.4 10.5
-------- ------- -------- -------- ------- --------
Net debt 205.5 185.6 211.0
-------- ------- -------- ---------------------------
Net debt - covenant
basis 172.4 155.8 189.2
--------------------------- -------- ------- --------
EBITDA - covenant
basis 52.9 54.3 65.0
-------- ------- -------- -------- ------- --------
Net debt : EBITDA 3.3 2.9 2.9
-------- ------- -------- -------- ------- --------
When measured on a covenant basis, the ratio of net debt to
EBITDA was 3.3 times (31 December 2021: 2.9 times; 30 June 2021:
2.9 times) compared to a covenant limit of 3.5 times.
Environmental, Social and Governance
The Group published its sustainability report with its Annual
Report. This report sets out our commitment to improving the impact
that our products and services have on the environment and the
areas in which we operate.
Improvements in the Group's governance are ongoing, with third
party support received during the period in relation to risk
management and internal controls enhancements. The Group has also,
for the first time, completely outsourced its Internal Audit
programme to a third party, with the aim of providing robust
independent challenge to the business, including a review of the
budgeting and forecasting processes conducted during H1.
James Fisher continues to focus on diversity and inclusion. In
the first half of 2022, women represented 38% of our Board
membership and 36% of our Executive Committee, both showing an
increase from the 29% and 33% in H1 2021 respectively.
Board changes
There have been two changes to the Board this year. Jean Vernet
joined on 5 September 2022 as the Group's Chief Executive Officer,
replacing Eoghan O'Lionaird who had announced his intention to step
down in June. Claire Hawkings replaced Mike Salter as a
Non-Executive Director following Mike's nine years of service to
the Group. The Board would like to express its sincere thanks to
both Eoghan and Mike for their contributions to the Group during
their respective tenures.
Summary and Outlook
The first half saw an increase in Group revenue but a decrease
in profit, due to portfolio mix. Offshore Oil and Tankships
produced strong revenue growth and improved profitability and
Marine Contracting continued its turnaround. However, Fendercare's
markets remained subdued and the cyclical nature of project work in
Specialist Technical was reflected in its performance.
The Board and management team are taking decisive actions to
address the ongoing issues affecting the Group's performance,
including rolling out an operational excellence programme across
the Group; continuing to explore ways to rationalise the portfolio;
and restructuring the Fendercare and JFD businesses. More strategic
actions will be completed in the second half.
Trading and order intake in the busy summer months of July and
August were in line with expectations. H2 is anticipated to be
materially stronger than H1. We expect to see continued strong
demand within the Offshore Oil and Tankships divisions throughout
the rest of the year. Order book coverage in Marine Contracting is
good. Whilst Specialist Technical's sales pipeline remains strong,
the timing of new, significant, long-term project wins is
uncertain. As a result, full year underlying operating profit is
now expected to be broadly in line with 2021.
The seasonality of working capital and collection of one JFD
project milestone are expected to deliver a reduction in net debt
by the end of the year. The debt position could be further improved
by our ongoing portfolio rationalisation activities, which aim to
reduce net debt and simplify and focus the Group.
Although the ongoing geopolitical and economic climate is likely
to remain uncertain, the Board is confident that it is taking the
right steps to stabilise the business and create a platform for
sustained recovery.
Business review
Marine Support
H1 2022 H1 2021 change
Revenue (GBPm) 93.6 97.7 (4.1%)
Underlying operating profit (GBPm) 1.5 2.1 (28.6%)
Underlying operating margin 1.6% 2.1%
Return on capital employed 3.0 % 3.7%
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 ("DDS") provides innovative technological
solutions aimed at improving the efficiency and productivity of our
customers' offshore assets.
Marine Contracting
The Marine Contacting business continued its turnaround in
profitability. In particular, profit growth was delivered in the
Middle East, where the Swordfish dive support vessel is now on
full-time hire; Africa, which was aided by the release of
project-related contingencies no longer required; and Brazil, where
demand for its diving services remained strong. The suspended LNG
project in Mozambique has yet to restart. In Europe, although
revenue was marginally above the prior year, a combination of poor
operational delivery and delayed/rescoped projects held back
profitability. EDS, the high voltage cabling business, experienced
a difficult six months due to some specific staffing issues. This
matter is now resolved, with vacancies filled, and the EDS business
is looking forward to H2 with greater confidence.
Fendercare
Revenue of GBP38.4m was GBP0.4m below H1 2021. This included a
6.2% reduction in ship-to-ship (STS) transfer revenues offset by
good product sales growth across the Fendercare products and Martek
businesses. The Group purchases global STS operations data from a
third party, which estimates that the total number of global STS
operations was 27% behind the peak of 2020. We believe that levels
of commodity trading (each trade is accompanied by a physical
transfer of oil) were low due to the relatively high and stable
price of crude oil during the period. In response to lower demand,
management completed a restructuring programme towards the end of
H1 which has reduced annualised operating costs by c.GBP1.5m.
The Group's policy in relation to the current conflict in
Ukraine meant that Fendercare chose not to bid for a number of STS
operations, particularly during March and April. More recently, the
business has seen increasing momentum, starting in June, in both
crude oil STS and LNG operations, where Fendercare is well
positioned to deliver on the expected increase in demand as Europe
seeks to secure its winter energy supplies.
DDS
Revenue in the period was GBP11.0m (H1 2021: GBP12.7m, including
GBP0.6m from a business sold in December 2021), with growth in AIS,
Prolec and Mimic offset by an expected reduction from Strainstall,
which ended the period in line with our expectations. Demand for
the digital twin solutions offered by AIS remained strong, with
several new installations completed in the period for international
energy companies. The business also released an enhanced new
version of its software.
Specialist Technical
H1 2022 H1 2021 change
Revenue (GBPm) 56.1 67.8 (17.4%)
Underlying operating (loss)/profit (GBPm) (2.5) 5.6 (144.6%)
Underlying operating margin (4.5)% 8.3%
Return on capital employed 1.6% 11.2%
Performance in the Specialist Technical division was
disappointing in the period. Although 2022 revenue was expected to
be lower than 2021 due to the cyclical nature of long-term
projects, GBP2m of provisions were required against underperforming
contracts, resulting in a loss for the period of GBP2.5m compared
to a GBP5.6m profit in H1 2021.
JFD, the diving and defence business, saw improved demand for
its short-cycle diving equipment which had experienced a
challenging 2021. No new significant project wins were secured in
H1 although the sales pipeline remains strong, with more than
GBP250m of qualified new business opportunities. The completion of
two long-term projects, triggering final invoicing and cash
milestones, was expected during the period. However, lockdowns in
China prevented either being delivered. One of the milestones was
invoiced in August following shipment of a completed vessel to its
customer, but the other milestone is now most likely delayed until
H1 2023. As previously mentioned, management completed a
restructuring programme early in Q3, aimed at delivering annualised
cost savings of GBP1.5m.
JFN, the Group's nuclear decommissioning business, has continued
to work on its long-term projects during the period. Tenders have
been submitted for significant new opportunities, for which we
await customer decisions. The team has made good progress during
the period on implementing a programme of internal improvements to
both the commercial and project management processes. Revenue in
the period was GBP23.4m compared to GBP27.1m in 2021. The smaller
"run-rate" projects that were postponed at the end of 2021 began to
be awarded during Q1, however, more recently the industry is again
showing signs of slowing down as inflationary pressures on fixed
budgets are forcing customers to reassess how many new projects
will be awarded during 2022.
Offshore Oil
H1 2022 H1 2021 change
Revenue (GBPm) 50.8 39.6 28.0%
Underlying operating profit (GBPm) 8.2 5.3 54.7%
Underlying operating margin 16.2% 13.4%
Return on capital employed 12.2% 9.2%
The Offshore Oil division delivered strong growth, with revenue
up 28.0% to GBP50.8m (H1 2021: GBP39.6m) and underlying operating
profit growth of 54.7% to GBP8.2m (H1 2021: GBP5.3m). Demand for
well-testing services was high throughout the period, and bubble
curtain projects also showed an increase from GBP3.2m to GBP4.0m in
the period. The Scantech business is investing in a new fleet of
proprietary, fuel-efficient compressors aimed at both replacing its
current aging fleet and improving the customer offering into the
renewables market.
RMSpumptools achieved record order intake for its artificial
lift technology in the period. The business is continuing to deploy
LEAN methodologies in its manufacturing operations and has so far
delivered improved order fulfilment (On Time In Full). Geographic
expansion activities continued, with a new manufacturing site in
Saudi Arabia planned to be fully operational during the second half
of the year.
The Decommissioning business has delivered good growth following
a frustrating second half of 2021 which saw several projects
delayed. Revenue in the period was GBP7.0m compared to GBP2.6m in
H1 2021 and GBP8.0m for the full year in 2021.
Second half order books for the Offshore Oil companies are
strong, with RMSpumptools at record levels.
Tankships
H1 2022 H1 2021 change
Revenue (GBPm) 37.9 28.6 32.5%
Underlying operating profit (GBPm) 4.2 2.1 100.0%
Underlying operating margin 11.1% 7.3%
Return on capital employed 20.3% 20.1%
The Tankships division performed well against a comparative
period that was adversely affected by UK lockdowns. Tanker
utilisation was strong (88% vs 80%) and the day rate for charters
remained at high levels. Cattedown Wharves has also seen some
recovery in the period. Overall, revenue increased by 32.5% to
GBP37.9m (H1 2021: GBP28.6m).
The combination of strong utilisation, high day rates, and an
easing of the Covid-related operating costs incurred in the prior
year resulted in underlying operating profit doubling to GBP4.2m in
the period (H1 2021: GBP2.1m).
Progress on the two new-build dual-fuel vessels has been good,
with both on track from a timeline and budget perspective. The
first of the vessels (The Sir John Fisher) is undergoing fit-out
and sea trials now ahead of anticipated delivery in Q4. The new
vessels will replace two aging vessels that are reaching the end of
their commercial life. The first of those, The Thames Fisher, was
sold in the period, yielding a GBP1.0m profit on sale, which is
shown within "Separately disclosed items" in the Income Statement,
with sale proceeds collected over a two-year lease period.
Cashflow and borrowings
Net bank borrowings as at 30 June 2022 were GBP159.5m,
representing a GBP19.9m increase in borrowings from 31 December
2021, but an improvement of GBP10.8m compared to the same point in
2021.
As anticipated, the Group saw a working capital outflow during
the period. The seasonality of the offshore projects businesses
means that receivables build during May and June as summer projects
commence. Debtor days continued to show some positive progress,
being 83 in June 2022 vs 87 days in June 2021. Creditor days are in
line with 30 June 2021 at 97 days.
Capital expenditure, at GBP10.1m, was higher than the GBP6.5m in
H1 2021 and more in line with 2020, which was GBP11.8m. The Board
approved one significant capital expenditure project in the period,
being investment in next-generation, fuel-efficient compressors to
replace an aging fleet within ScanTech Offshore. The Group
generated GBP1.5m in asset disposal proceeds, which compares to
GBP14.5m in the prior period, which included GBP12.6m in relation
to the Paladin Dive Support Vessel. There were no acquisitions in
the period, or in the prior period, with net outflows of GBP1.4m in
2022 and GBP0.4m in 2021 representing deferred consideration on
acquisitions completed in prior years.
Tax and interest payments were broadly in line with prior year
at GBP7.5m (2021: GBP7.8m).
Balance sheet
Non-current assets increased by GBP3.7m during the period, from
GBP339.9m to GBP343.6m. This is principally due to the recognition
of a defined benefit pension fund asset of GBP5.8m. A surplus, when
calculated on an accounting basis, is recognised when the Group has
a right to receive surplus funds from the pension scheme in the
hypothetical situation that there are no remaining pensioners and
pension fund assets remain undistributed. The asset has been
recorded in accordance with the requirements of IAS19 and
IFRIC14.
Current assets have increased by GBP19.5m to GBP304.5m (31
December 2021: GBP285.0m; 30 June 2021: GBP313.3m). The principal
movements are increases in inventory and receivables, offset by a
reduction in short-term cash balances. Inventory has increased as a
result of increased activity, particularly in RMSpumptools, which
has received record orders in the period and is purchasing
additional components to ensure demand is met. Receivables of
GBP184.3m are in line with 30 June 2021 and GBP27.0m above 31
December 2021, principally reflecting the seasonality of the
business.
Current liabilities have increased by GBP12.7m to GBP212.2m and
again are more closely aligned to the position as at 30 June 2021
(GBP209.5m). The increase in trade creditors is consistent with the
increase in trade debtors and reflects the seasonality of the
business. Short-term bank borrowings (i.e. overdrafts) have
increased to GBP42.7m from GBP33.6m at 31 December 2021, with the
net position of short-term cash and short-term borrowings having
reduced to GBP11.0m at 30 June 2022 (31 December GBP34.4m; 30 June
2021: GBP11.8m) as cash received close to the year end was used to
subsequently pay down borrowings.
Long-term liabilities, at GBP210.5m, are GBP4.3m lower than as
at 31 December 2021, principally reflecting the movement in
long-term borrowings in the period.
Overall, the Group's net assets have increased in the period
from GBP210.6m at 31 December 2021 to GBP225.4m at 30 June
2022.
Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance in the second half of the year are the same
as disclosed in the 2021 Annual Report and Accounts on pages 61-69.
The principal risks set out in the 2021 Annual Report and Accounts
were:
-- Operational - project delivery, recruitment and retention of
key staff, health and safety, contractual, cyber security and
pandemic risks;
-- Strategic - climate change, operating in emerging markets; and
-- Financial - interest rate, foreign exchange and credit risks.
The Board considers that the principal risks and uncertainties
set out in the 2021 Annual Report and Accounts remain the same.
Directors' Responsibilities
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted
for use in the United Kingdom;
(b) The interim management report includes a fair review of the
information required by:
a. DTR 4.2.7R of the 'Disclosure and Transparency Rules', being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b. DTR 4.2.8R of the 'Disclosure and Transparency Rules', being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
the period; and any changes in the related party transactions
described in the last annual report that could do so.
Approved by the Board of Directors and signed on its behalf
by:
J Vernet D Kennedy
Chief Executive Officer Chief Financial
Officer
6 September 2022
Independent review report to James Fisher and Sons plc
Conclusion
We have been engaged by the company to review the condensed
consolidated interim financial statements in the half-yearly
financial report for the six months ended 30 June 2022 which
comprises the condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the
condensed consolidated statement of financial position, the
condensed consolidated statement of changes in equity, the
condensed consolidated cash flow statement and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2022 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the
UK and the Disclosure Guidance and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity ("ISRE (UK) 2410") issued for use in the UK. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. We
read the other information contained in the half-yearly financial
report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed
set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis of conclusion
section of this report, nothing has come to our attention that
causes us to believe that the directors have inappropriately
adopted the going concern basis of accounting, or that the
directors have identified material uncertainties relating to going
concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern, and the above conclusions are not a guarantee that the
group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with UK-adopted international
accounting standards.
The directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report
in accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the
directors are responsible for assessing the group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. Our conclusion, including our
conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion section of this report.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Ailsa Griffin
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
6 September 2022
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note
GBPm GBPm GBPm
Revenue 4 238.4 233.7 494.1
Cost of sales (182.7) (177.6) (384.6)
----------- ----------- -------------
Gross profit 55.7 56.1 109.5
Administrative expenses (49.2) (44.9) (132.2)
Share of post tax results of joint
ventures 1.4 1.0 2.0
Operating profit/(loss) 4 7.9 12.2 (20.7)
Analysis of operating profit:
Underlying operating profit 9.5 13.3 28.0
Separately disclosed items (1.6) (1.1) (48.7)
Net finance expense 6 (4.7) (4.1) (8.3)
----------- ----------- -------------
Profit/(loss) before taxation 3.2 8.1 (29.0)
Analysis of profit before tax:
Underlying profit before taxation 4.8 9.2 19.7
Separately disclosed items 5 (1.6) (1.1) (48.7)
Income tax 7 (1.2) 5.5 0.8
Profit/(loss) for the period 2.0 13.6 (28.2)
=========== =========== =============
Attributable to:
Owners of the Company 1.9 13.5 (27.8)
Non-controlling interests 0.1 0.1 (0.4)
2.0 13.6 (28.2)
=========== =========== =============
(Loss)/earnings per share pence pence pence
Basic 8 3.7 26.8 (55.2)
Diluted 8 3.7 26.8 (55.2)
Underlying earnings per share
Basic 8 6.7 12.8 20.0
Diluted 8 6.7 12.8 20.0
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note GBPm GBPm GBPm
Profit/(loss) for the period 2.0 13.6 (28.2)
Items that will not be reclassified to the
income statement
Actuarial gain in defined benefit pension
schemes 10 7.6 2.8 6.3
Tax on items that will not be reclassified (0.9) (0.5)
-------- ----------- ------------
6.7 2.8 5.8
Items that may be reclassified subsequently to
the income statement
Exchange differences on foreign currency
net investments 6.6 (2.3) (2.6)
Effective portion of changes in fair value
of cash flow hedges (1.7) (1.2) (2.6)
Effective portion of changes in fair value of
cash flow hedges in joint ventures 0.2 0.1 0.3
Net change in fair value of cash flow hedges transferred
to income statement 0.7 (0.6) 0.3
Deferred tax on items that may be reclassified 0.3 0.1 0.4
-------- ----------- ------------
6.1 (3.9) (4.2)
Total comprehensive income for the period 14.8 12.5 (26.6)
======== =========== ============
Attributable to:
Owners of the Company 14.6 12.4 (26.1)
Non-controlling interests 0.2 0.1 (0.5)
14.8 12.5 (26.6)
======== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
Note GBPm GBPm GBPm
restated*
Non-current assets
Goodwill 11 135.1 165.8 133.5
Other intangible assets 11.4 18.2 13.3
Property, plant and equipment 120.9 126.7 122.2
Right-of-use assets 39.5 41.0 41.8
Investment in joint ventures 9.6 7.7 8.0
Retirement benefit surplus 10 5.8 - -
Other investments 1.4 1.4 1.4
Deferred tax assets 8.9 10.9 9.6
Other receivables 11.0 - 10.1
343.6 371.7 339.9
-------- ---------- ------------
Current assets
Inventories 54.3 51.5 49.0
Trade and other receivables 183.4 183.6 157.3
Assets held for sale 13 13.0 15.2 10.7
Cash and cash equivalents 12 53.8 63.0 68.0
304.5 313.3 285.0
-------- ---------- ------------
Current liabilities
Trade and other payables (155.9) (142.3) (149.5)
Provisions for liabilities and charges (2.0) (0.6) (2.0)
Liabilities associated with assets held
for sale 13 - (1.7) -
Current tax (1.6) (4.8) (4.5)
Borrowings (42.7) (51.2) (33.6)
Lease liabilities (10.0) (8.9) (9.9)
(212.2) (209.5) (199.5)
-------- ---------- ------------
Net current assets 92.3 103.8 85.5
Total assets less current liabilities 435.9 475.5 425.4
-------- ---------- ------------
Non-current liabilities
Other payables (1.6) (3.3) (1.3)
Provisions (1.3) (1.4) (1.1)
Retirement benefit obligations 10 (0.7) (6.6) (1.9)
Cumulative preference shares (0.1) (0.1) (0.1)
Borrowings (170.5) (182.0) (173.9)
Lease liabilities (36.0) (31.8) (36.1)
Deferred tax liabilities (0.3) (0.5) (0.4)
(210.5) (225.7) (214.8)
-------- ---------- ------------
Net assets 225.4 249.8 210.6
======== ========== ============
Equity
Called up share capital 12.6 12.6 12.6
Share premium 26.8 26.8 26.8
Treasury shares (0.6) (0.6) (0.6)
Other reserves (14.4) (20.5) (20.4)
Retained earnings 200.1 230.7 191.5
-------- ---------- ------------
Equity attributable to owners of the
Company 224.5 249.0 209.9
Non-controlling interests 0.9 0.8 0.7
Total equity 225.4 249.8 210.6
======== ========== ============
* Right-of-use assets and retained earnings have been restated
for the 30 June 2021 comparative to reflect a change in accounting
policy in respect of dry dock overhauls (see note 1 to the Annual
Report 2021).
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2022
Share Share Retained Other Treasury Shareholders' Non-controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January
2022 12.6 26.8 191.5 (20.4) (0.6) 209.9 0.7 210.6
Profit for the
year - - 1.9 - - 1.9 0.1 2.0
Other
comprehensive
income - - 6.7 6.0 - 12.7 0.1 12.8
Contributions
by and
distributions
to owners:
Changes in
ownership
interest
without
a change in
control - - (0.3) - - (0.3) - (0.3)
Share based
payments - - 0.3 - - 0.3 - 0.3
At 30 June
2022 12.6 26.8 200.1 (14.4) (0.6) 224.5 0.9 225.4
======== ====== ======= ======= ====== ================ ============= ======
Share Share Retained Other Treasury Shareholders' Non-controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January
2021 12.6 26.7 212.6 (16.5) (0.2) 235.2 0.7 235.9
Accounting
policy
change - Right
of use Refit
capitalisation - - 2.0 - - 2.0 - 2.0
-------- ------ ------- ------- ------ ---------------- ------------- ------
At 1 January
2021 12.6 26.7 214.6 (16.5) (0.2) 237.2 0.7 237.9
Profit for the
year 13.5 - 13.5 0.1 13.6
Other
comprehensive
income - - 2.8 (3.9) - (1.1) - (1.1)
Remeasurement
of
non-controlling
interest put
option - - - (0.1) - (0.1) - (0.1)
Share based
payments - - 0.3 - - 0.3 - 0.3
Tax effect of
share based
payments - - 0.1 - - 0.1 - 0.1
Purchase of
shares
by ESOT - - - - (0.5) (0.5) - (0.5)
Notional
purchase
of own shares - - (0.5) - - (0.5) - (0.5)
Issue of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.1) - 0.1 - - -
At 30 June 2021 12.6 26.8 230.7 (20.5) (0.6) 249.0 0.8 249.8
======== ====== ======= ======= ====== ================ ============= ======
Other reserve movements
Translation Hedging Put option
reserve reserve liability Total
Other reserves GBPm GBPm GBPm GBPm
At 1 January 2021 (14.3) 0.5 (2.7) (16.5)
Other comprehensive income (2.6) (1.5) - (4.1)
Remeasurement of non-controlling
interest put option - - 0.2 0.2
------------ -------- ----------- -------
At 31 December 2021 (16.9) (1.0) (2.5) (20.4)
Other comprehensive income 6.6 (0.6) - 6.0
Remeasurement of non-controlling
interest put option - - - -
At 30 June 2022 (10.3) (1.6) (2.5) (14.4)
============ ======== =========== =======
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2022
Six months Six months Year
Note ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBPm GBPm GBPm
Profit/(loss) before tax for the period 3.2 8.1 (29.0)
Adjustments to reconcile profit/(loss) before
tax to net cash flows
Depreciation and amortisation 20.4 21.1 44.2
Separately disclosed items (excluding amortisation) 0.5 (0.3) 45.8
Other non-cash items 4.2 3.0 7.8
Increase in inventories (3.9) (5.3) (2.7)
Increase in trade and other receivables (21.2) (24.8) (15.4)
Increase in trade and other payables 0.5 2.8 10.0
Defined benefit pension cash contributions
less service cost (1.0) (1.0) (2.2)
----------- ----------- ------------
Cash generated from operations 2.7 3.6 58.5
Cash outflow from separately disclosed items - - (1.7)
Income tax payments (4.4) (4.5) (7.9)
----------- ----------- ------------
Cash flow from operating activities (1.7) (0.9) 48.9
Investing activities
Dividends from joint venture undertakings 1.0 0.7 1.6
Proceeds from the disposal of a subsidiary - - 6.2
Proceeds from the disposal of property, plant
and equipment 1.5 14.3 14.7
Finance income 0.2 0.2 0.3
Acquisition of subsidiaries, net of cash acquired (1.4) (0.4) (1.1)
Acquisition of property, plant and equipment (10.1) (6.5) (22.1)
Development expenditure (0.6) (0.8) (1.5)
Cash flows (used in)/from investing activities (9.4) 7.5 (1.9)
Financing activities
Proceeds from the issue of share capital - 0.1 0.1
Finance costs (3.1) (3.3) (5.6)
Purchase of own shares by Employee Share Ownership
Trust - (0.5) (0.5)
Notional purchase of own shares for LTIP vesting - (0.5) (0.5)
Capital element of lease repayments (7.0) (6.6) (13.7)
Proceeds from borrowings 17.0 10.5 84.0
Repayment of borrowings (21.0) (7.9) (89.9)
----------- ----------- ------------
Cash flows used in financing activities (14.1) (8.2) (26.1)
Net (decrease)/increase in cash and cash equivalents (25.2) (1.6) 20.9
Cash and cash equivalents at beginning of
period 34.5 13.5 13.5
Net foreign exchange differences 1.8 - 0.1
Cash and cash equivalents at end of period 12 11.1 11.9 34.5
=========== =========== ============
NOTES TO THE CONDENSED CONSOLIDATED HALF YEAR STATEMENTS
1 Basis of preparation
James Fisher and Sons Plc (the Company) is a public limited
company registered and domiciled in England and Wales and listed on
the London Stock Exchange. The condensed consolidated half year
financial statements of the Company for the six months ended 30
June 2022 comprise the Company and its subsidiaries (together
referred to as the Group) and the Group's interests in jointly
controlled entities.
Statement of compliance
These condensed consolidated interim financial statements, which
have been reviewed and not audited, have been prepared in
accordance with International Financial Reporting Standard (IFRS)
IAS 34 "Interim Financial Reporting" as adopted for use in the UK.
As required by the Disclosure and Transparency Rules of the
Financial Services Authority, the condensed consolidated set of
financial statements has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the
year ended 31 December 2021. They do not include all of the
information required for full annual financial statements, and
should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2021.
The comparative figures for the financial year ended 31 December
2021 are not the Group's statutory accounts for that financial
year. Those accounts which were prepared in accordance with
UK-adopted International Financial Reporting Standards (IFRS), have
been reported on by the Group's auditors and delivered to the
Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The consolidated financial statements of the Group for the year
ended 31 December 2021 are available upon request from the
Company's registered office at Fisher House, PO Box 4,
Barrow-in-Furness, Cumbria LA14 1HR or at www.james-fisher.co.uk
.
The half year financial information is presented in Sterling and
all values are rounded to the nearest 0.1 million pounds (GBPm)
except where otherwise indicated.
Going concern
The Group had GBP115.5m of undrawn committed facilities at 30
June 2022 (June 2021: GBP115.6m; December 2021: GBP111.5m). At 30
June 2022, the Group had GBP287.5m of committed facilities,
unchanged from December 2021. GBP40m of revolving credit facilities
which existed at 30 June 2022 were due for renewal in July 2022,
however it was decided not to pursue the renewal.
The committed credit facilities mentioned above 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 at the 30 June 2022 measurement date and is
forecasting to be compliant for at least 12 months from the date of
approval of these condensed interim financial statements. As at the
date of approval of the financial statements, the Group has GBP46m
of undrawn credit facilities available with sufficient headroom
forecasted for the 12 months from the date of this report.
The Group continues to closely monitor and manage its liquidity.
The Group has prepared base case cash flow forecasts for a period
of at least 12 months from the date of approval of the condensed
interim financial statements, taking into account the impacts of
wider macro-economic environment. The base case was prepared under
conservative assumptions that no disposals of non-core businesses
would materialise in the assessment period and any expiring
facilities would not be renewed. The Group continues to work on
rationalisation of its business portfolio and expects to renew the
expiring facilities. The base case demonstrated the Company would
have headroom against facilities and comply with covenants. A
number of severe but plausible downside scenarios were modelled
compared to the base case forecast of profit and cash flow to
assess headroom against facilities and covenant compliance for at
least the next 12 months.
These scenarios included reducing operating profit by 30% and
reducing cash receipts by GBP10m in 2022 and GBP20m in 2023. A
combination of these scenarios was considered as the downside case
which showed headroom and no breach of covenants.
Further mitigating actions could also be taken in such scenarios
should they be required.
Taking into account the level of cash and available facilities
outlined above and having undertaken rigorous assessment as
detailed above, the Directors are confident that the company will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the
condensed interim financial statements and therefore have prepared
the condensed interim financial statements on a going concern
basis.
Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for
the year ended 31 December 2021.
2 Accounting estimates and judgements
The preparation of half year financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ materially from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements as at and for the year ended 31 December
2021.
3 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 (note 5) 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 half year results.
3.1 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.
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Operating profit/(loss) 7.9 12.2 (20.7)
Separately disclosed items before
taxation 1.6 1.1 48.7
Underlying operating
profit 9.5 13.3 28.0
Net finance
expense (4.7) (4.1) (8.3)
Underlying profit before taxation 4.8 9.2 19.7
=========== =========== =============
3.2 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total
of underlying profit before tax, less income tax, but excluding the
tax impact on separately disclosed items included in the
calculation of underlying profit less profit attributable to
non-controlling interests, divided by the weighted average number
of ordinary shares in issue during the year. Underlying earnings
per share is set out in note 8.
3.3 Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right of use
assets, less cash and short-term deposits and after adding back
borrowings. Average capital employed is adjusted for the timing of
businesses acquired and after adding back cumulative amortisation
of customer relationships. Segmental ROCE is defined as the
underlying operating profit, divided by average capital employed.
The key performance indicator, Group post-tax ROCE, is defined as
underlying operating profit, less notional tax, calculated by
multiplying the effective tax rate by the underlying operating
profit, divided by average capital employed.
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Net assets 225.4 247.8 210.6
Less right-of-use assets (39.5) (39.0) (41.8)
Plus net borrowings 205.5 211.0 185.6
Capital employed 391.4 419.8 354.4
----------- ----------- -------------
Underlying operating
profit 9.5 13.3 28.0
Notional tax at the effective
tax rate (2.7) (3.9) (14.3)
----------- ----------- -------------
6.8 9.4 13.7
Average capital employed 408.6 459.2 377.4
Return on average capital employed 2.7% 5.4% 3.6%
----------- ----------- -------------
3.4 Cash conversion
Cash conversion is defined as the ratio of operating cash flow
to underlying operating profit. Operating cash flow comprises:
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Cash generated from operations 2.7 3.6 58.5
Dividends from joint venture undertakings 1.0 0.7 1.6
Capital element of lease repayments (7.0) (6.6) (13.7)
Other - 1.0 0.7
----------- ----------- -------------
Operating cash
flow (3.3) (1.3) 47.1
Underlying operating
profit 9.5 13.3 28.0
Cash conversion (35)% (10)% 168%
3.5 Underlying earnings before interest, tax, depreciation and amortisation (EBITDA)
Underlying EBITDA is defined as the underlying operating profit
before interest, tax, depreciation and amortisation.
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Underlying operating
profit 9.5 13.3 28.0
Depreciation and amortisation
(excluding depreciation of ROU
assets) 14.3 15.5 31.0
Amortisation - separately disclosed
items (note 5) (1.1) (1.4) (2.9)
IFRS16 impact 2.8 (0.5) (1.8)
----------- ----------- -------------
Underlying EBITDA 25.5 26.9 54.3
----------- ----------- -------------
4 Segmental information
Management has determined that the Group has four operating
segments reviewed by the Board; Marine Support, Specialist
Technical, Offshore Oil and Tankships. Their principal activities
are set out in the Strategic Report within the consolidated
financial statements of the Group for the year ended 31 December
2021.
The Board assesses the performance of the segments based on
underlying operating profit. The Board believes that such
information is the most relevant in evaluating the results of
certain segments relative to other entities which operate within
these industries. Inter-segmental sales are made using prices
determined on an arms-length basis. Sector assets exclude cash,
short-term deposits and corporate assets that cannot reasonably be
allocated to operating segments. Sector liabilities exclude
borrowings, retirement benefit obligations and corporate
liabilities that cannot reasonably be allocated to operating
segments.
Six months ended 30 June 2022
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue reported 93.7 56.7 50.9 37.9 - 239.2
Inter-segmental sales (0.1) (0.6) (0.1) - - (0.8)
93.6 56.1 50.8 37.9 - 238.4
======== =========== ========= ========== ========== ========
Underlying operating
profit/(loss) 1.5 (2.5) 8.2 4.2 (1.9) 9.5
Separately disclosed
items (0.9) - (0.2) 1.0 (1.5) (1.6)
--------
Operating profit/(loss) 0.6 (2.5) 8.0 5.2 (3.4) 7.9
Net finance expense (4.7)
--------
Profit before tax 3.2
Income tax (1.2)
Profit for the period 2.0
========
Assets & liabilities
Segmental assets 198.8 160.4 140.5 73.2 65.6 638.5
--------
Investment in joint
ventures 2.8 3.9 2.9 - - 9.6
-------- ----------- --------- ---------- ---------- --------
Total assets 201.6 164.3 143.4 73.2 65.6 648.1
Segmental liabilities (75.6) (56.9) (29.8) (40.0) (220.4) (422.7)
126.0 107.4 113.6 33.2 (154.8) 225.4
======== =========== ========= ========== ========== ========
Other segmental information
Capital expenditure 2.7 1.6 3.4 2.5 - 10.1
Depreciation and amortisation 5.4 3.2 5.7 5.9 0.2 20.4
======== =========== ========= ========== ========== ========
Six months ended 30 June 2021
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue reported 97.8 68.3 39.7 28.6 - 234.4
Inter-segmental sales (0.1) (0.5) (0.1) - - (0.7)
97.7 67.8 39.6 28.6 - 233.7
======== =========== ========= ========== ========== ========
Underlying operating
profit reported 2.1 5.6 5.3 2.1 (1.8) 13.3
Separately disclosed
items (0.7) - (0.4) - - (1.1)
Operating profit 1.4 5.6 4.9 2.1 (1.8) 12.2
Net finance expense (4.1)
--------
Profit before tax 8.1
Income tax 5.5
Profit for the period 13.6
========
Assets & liabilities
Segmental assets 238.1 165.7 141.2 67.9 64.4 677.3
Investment in joint
ventures 2.1 3.3 2.3 - - 7.7
-------- ----------- --------- ---------- ---------- --------
Total assets 240.2 169.0 143.5 67.9 64.4 685.0
Segmental liabilities (77.3) (62.4) (27.6) (31.7) (236.2) (435.2)
162.9 106.6 115.9 36.2 (171.8) 249.8
======== =========== ========= ========== ========== ========
Other segment information
Capital expenditure 2.3 0.8 2.3 0.9 0.2 6.5
Depreciation and amortisation 6.7 3.4 5.8 5.1 0.1 21.1
======== =========== ========= ========== ========== ========
Year ended 31 December 2021
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue reported 214.7 134.6 86.5 60.1 - 495.9
Inter-segmental sales (0.2) (1.4) (0.2) - - (1.8)
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 & 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 segment 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
======== =========== ========= ========== ========== ========
5 Separately disclosed items
Certain items are disclosed separately in the financial
statements to provide a clearer understanding of the underlying
financial performance of the Group, referred to in note 3. They are
items that are non-recurring and significant by virtue of their
size and include acquisition related income or charges, costs of
material litigation, restructure or material impairment &
related items. Separately disclosed items comprise:
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Acquisition related income and (expense):
Costs incurred on acquiring/disposing
of businesses - - (0.5)
Amortisation of acquired intangibles (1.1) (1.4) (2.9)
(1.1) (1.4) (3.4)
Gain on disposal of businesses - - 0.3
Gain on disposal of vessel 1.0 0.3 0.3
Costs of material litigation - - (3.1)
Defined benefit obligation - past
service cost (1.5) - -
Impairment charges
Intangible assets - - (29.2)
Tangible fixed assets - - (9.3)
Receivables - - (4.3)
Separately disclosed items before
taxation (1.6) (1.1) (48.7)
----------- ----------- ------------
Taxation 0.2 8.2 10.9
Separately disclosed items after
taxation (1.4) 7.1 (37.8)
=========== =========== ============
During the six months ended 30 June 2022, the Group has
recognised a gain of GBP1.0m on disposal of one of its vessels.
A GBP1.5m past service cost has been recognised for the MNRPF
scheme in respect of ill health early retirement benefits (see note
10).
During the year end 31 December 2021, 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.
- 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 vessel is the sale of the Paladin vessel for $17.3m proceeds and a GBP0.3m gain.
- Costs of material litigation relates to various matters as
described in the Annual report and Accounts note 31: Commitment and
contingencies.
- 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 where 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.
6 Net finance expense
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Finance income:
Interest receivable on short-term
deposits 0.2 0.2 0.3
Finance expense:
Interest payable on bank loans and
overdrafts (3.8) (3.2) (6.3)
Net interest on pension obligations - (0.1) (0.1)
Unwind of discount on right-of-use
lease liability (1.1) (1.0) (2.2)
----------- ----------- ------------
(4.9) (4.3) (8.6)
Net finance expense (4.7) (4.1) (8.3)
=========== =========== ============
7 Taxation
The Group's effective rate on profit before income tax is 37.3%
(30 June 2021: (67.3)%, 31 December 2021: 2.6%) which includes a
separately disclosed tax credit of GBP0.2m as detailed in note 5.
The effective income tax rate on underlying profit before income
tax, based on an estimated rate for the year ending 31 December
2022, is 28.4% (30 June 2021: 29.3%, 31 December 2021: 51.2%). Of
the total tax charge, GBP0.8m relates to overseas businesses (30
June 2021: GBP1.3m). Taxation on profit has been estimated based on
rates of taxation applied to the profits forecast for the full
year.
8 Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year, after
excluding 47,855 (June 2021: 54,571, December 2021: 54,571)
ordinary shares held by the James Fisher and Sons plc Employee
Share Ownership Trust (ESOT), as treasury shares. Diluted earnings
per share are calculated by dividing the net profit attributable to
ordinary equity holders of the Company by the weighted average
number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares.
At 30 June 2022, 2,180,603 options (June 2021: 515,463, December
2021: 650,513) were excluded from the diluted weighted average
number of ordinary shares calculation as their effect would be
anti-dilutive. The average market value of the Company's shares for
purposes of calculating the dilutive effect of share options was
based on quoted market prices for the period during which the
options were outstanding.
Weighted average number of shares
30 June 30 June 31 December
2022 2021 2021
Number
Number of Number of of
shares shares shares
For basic earnings per ordinary share 50,344,286 50,350,082 50,345,477
Exercise of share options and LTIPs - 17,692 10,560
For diluted earnings per ordinary
share 50,344,286 50,367,774 50,356,037
=========== =========== ============
Underlying earnings per share
To provide a better understanding of the underlying performance
of the Group, underlying earnings per share on continuing
activities is reported as an alternative performance measure (note
3).
2022 2021 2021
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Profit/(loss) attributable to owners
of the Company 1.9 13.5 (27.8)
Separately disclosed items 1.6 1.1 48.7
Tax on separately disclosed items (0.2) (8.2) (10.9)
Underlying profit attributable to
owners of the Company 3.3 6.4 10.0
=========== =========== ===========
Earnings per share pence pence pence
Basic earnings per share 3.7 26.8 (55.2)
Diluted earnings per share 3.7 26.8 (55.2)
Underlying basic earnings per share 6.7 12.8 20.0
Underlying diluted earnings per share 6.7 12.8 20.0
9 Interim dividend
No interim dividend is proposed in respect of the period ended
30 June 2022 (2021: nil).
10 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
2022 2021 2021
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Net obligation as at 1 January (1.9) (10.3) (10.3)
Expense recognised in the income
statement (1.6) (0.1) (0.2)
Contributions paid to scheme 1.0 1.0 2.3
Remeasurement gains and losses 7.6 2.8 6.3
At period end 5.1 (6.6) (1.9)
=========== =========== ============
The Group's net surplus/(deficit) in respect of its pension
schemes were as follows:
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Shore Staff 5.8 (5.3) (1.0)
Merchant Navy Officers Pension Fund (0.7) (1.1) (0.9)
Merchant Navy Ratings Pension Fund - (0.2) -
5.1 (6.6) (1.9)
=========== =========== ============
The principal assumptions in respect of these liabilities are
disclosed in the December 2021 Annual Report. The Group has not
obtained an interim valuation for the period ended 30 June 2022. In
the first half of 2022, the Group paid contributions to defined
benefit schemes of GBP1.0m (June 2021: GBP1.0m).
The Shore staff plan assets and obligations have been updated to
30 June resulting in a surplus being recognised. A surplus, when
calculated on an accounting basis, is recognised when the Group can
realise the economic benefit at some point during the life of the
plan or when the plan liabilities are all settled and there are no
remaining beneficiaries. Based on a review of the plan's governing
documentation, the company has a right to a refund of surplus
assuming the gradual settlement of the plan liabilities over time
until all members have left. The directors therefore take the view
that it is appropriate to recognise the surplus.
During February 2022, the High Court approved a settlement in
respect of ill health early retirement benefits which were subject
to legal uncertainties and related to the MNRPF scheme. During the
first half, a past service cost has been recognised within
separately disclosed items (Note 5) relating to the Group's share
of additional liabilities which have been estimated to date.
11 Goodwill
Movements during the period in the Group's goodwill are set out
below:
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
At 1 January 133.5 166.5 166.5
Impairment - - (27.5)
Disposals - - (3.9)
Exchange differences 1.6 (0.7) (1.6)
At period end 135.1 165.8 133.5
=========== =========== ============
At the half year, the results of the impairment tests carried
out in respect of the year ended 31 December 2021, were updated
based on the Group's trading performance and revised outlooks.
The recoverable amount of the cash generating units (CGU's) has
been assessed based on value in use calculations using cash
projections based on five-year strategic plans which take into
account the impact of climate change and are approved by the Board.
For all CGUs a terminal value of cash flows beyond that date have
been calculated at a growth rate in line with management's
long-term expectations for the relevant market, using a growth rate
of 2.4%. The key assumptions used in the value in use calculations
include gross margin, discount rate, inflation of overheads and
payroll and growth rates.
Sensitivity to impairment
The Directors have carried out sensitivity analysis to determine
the impact on the carrying value of goodwill.
Sensitivities carried out across all CGU's included increasing
the discount rate by 2.0% and reducing the terminal growth to zero
and reducing operating profit by 25.0%.
One CGU within the Marine Support division was identified as
having a higher risk of impairment. The sensitivities identified
that the headroom is most sensitive to changes in the discount
rate, which would need to be increased by 1.0% to give rise to a
goodwill impairment in respect of this CGU.
One CGU within the Offshore Oil division was identified as
having a high risk of impairment. The sensitivities identified that
the headroom is most sensitive to changes in the discount rate,
which would need to be increased by 2.0% to give rise to a goodwill
impairment in this CGU and this is considered to be unlikely.
12 Reconciliation of net borrowings
1 January Cash Other Exchange 30 June
2022 flow non-cash movement 2022
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 34.5 (25.2) - 1.8 11.1
Debt due after 1 year (174.0) 3.9 (0.5) - (170.6)
Debt due within 1 year (0.1) 0.1 - - -
---------- -------- --------- --------- --------
(174.1) 4.0 (0.5) - (170.6)
Lease liabilities (46.0) 7.0 (3.8) (3.2) (46.0)
Net borrowings (185.6) (14.2) (4.3) (1.4) (205.5)
========== ======== ========= ========= ========
1 January Cash Other Exchange 30 June
2021 flow non-cash movement 2021
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 13.5 (1.6) - - 11.9
Debt due after 1 year (178.9) (2.7) (0.5) - (182.1)
Debt due within 1 year (0.2) 0.1 - - (0.1)
---------- -------- --------- --------- --------
(179.1) (2.6) (0.5) - (182.2)
Lease liabilities (32.5) 6.6 (15.0) 0.2 (40.7)
Net borrowings (198.1) 2.4 (15.5) 0.2 (211.0)
========== ======== ========= ========= ========
1 January Cash Other Exchange 31 December
2021 flow non-cash movement 2021
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 13.5 20.9 - 0.1 34.5
Debt due after 1 year (178.9) 5.8 (0.9) - (174.0)
Debt due within 1 year (0.2) 0.1 - - (0.1)
---------- ----- --------- --------- ------------
(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)
========== ===== ========= ========= ============
Cash and cash equivalents comprise:
2022 2021 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Cash at bank and in
hand 53.8 63.0 68.0
Overdrafts (42.7) (51.1) (33.5)
11.1 11.9 34.5
=========== =========== ============
13 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. As at the date of this report management continues to
actively pursue the sale of Swordfish. The value of the asset
increased from GBP10.7m in December 2021 to GBP13.0m in June 2022
reflecting the capitalisation of dry docking costs. The asset held
for sale value in June 2021 included certain non-core businesses
within the Marine Support division which were disposed of during
the second half of 2021.
14 Commitments and contingencies
Capital commitments at 30 June 2022 were GBP1.6m (2021: GBPnil;
31 December: GBP1.6m).
Contingent liabilities:
(a) In the ordinary course of the Company's business, counter
indemnities have been given to banks in respect of custom bonds,
foreign exchange commitments and bank guarantees.
(b) A Group VAT registration is operated by the Company and six
Group undertakings in respect of which the Company is jointly and
severally liable for all amounts due to HM Revenue & Customs
under the arrangement.
14 Commitments and contingencies (continued)
(c) A guarantee has been issued by the Group and Company to
charter parties in respect of obligations of a subsidiary, James
Fisher Everard Limited, in respect of charters relating to eleven
vessels. The charters expire between 2023 and 2032.
(d) Subsidiaries of the Group have issued performance and
payment guarantees to third parties with a total value of GBP33.0m
(June 2021: GBP38.4m, December 2021: GBP33.5m).
(e) The Group is liable for further contributions in the future
to the MNOPF and MNRPF if additional actuarial deficits arise or if
other employers liable for contributions are not able to pay their
share. The Group and Company remains jointly and severally liable
for any future shortfall in recovery of the MNOPF deficit.
(f) The Group has given an unlimited guarantee to the Singapore
Navy in respect of the performance of First Response Marine Pte
Ltd, its Singapore joint venture, in relation to the provision of
submarine rescue and related activities.
(g) In the normal course of business, the Company and certain
subsidiaries have given parental and subsidiary guarantees in
support of loan and banking arrangements.
(h) The Company and its subsidiaries may be parties to legal
proceedings and claims which arise in the ordinary course of
business, and can be material in value. Disclosure of contingent
liabilities or appropriate provision has been has been made in
these accounts where, in the opinion of the Directors, liabilities
may materialise. Other than provisions made against certain
receivables and claims, described in note 34 (b) of the last filed
annual report, there are no other significant provisions and no
individually significant contingent liabilities that required
specific disclosure.
15 Related parties
There were no changes to related parties or associated
transactions from those disclosed in the Annual Report for the year
ended 31 December 2021.
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