TIDMFSJ
RNS Number : 2282P
Fisher (James) & Sons plc
30 August 2017
30 August 2017
James Fisher and Sons plc
Half Year Results 2017
James Fisher and Sons plc (FSJ.L) ("James Fisher" or "the
Group"), the leading marine service provider, announces its results
for the six months ended 30 June 2017.
H1 2017 H1 2016 % change
Group revenue GBP235.8m GBP209.3m +13%
Underlying operating profit * GBP21.3m GBP19.9m +7%
Underlying profit before tax * GBP18.6m GBP17.5m +6%
Underlying diluted earnings per share
* 30.1p 29.4p +2%
Interim dividend per share 9.40p 8.55p +10%
Statutory profit before tax GBP17.6m GBP17.4m +1%
* underlying profit excludes separately disclosed items.
Highlights:
-- Revenue up 13% at GBP235.8m (2016: GBP209.3m)
-- Underlying operating profit 7% higher at GBP21.3m (2016: GBP19.9m)
-- Strong profit growth in Specialist Technical
-- Underlying diluted earnings per share up 2% to 30.1p (2016: 29.4p) per share
-- Interim dividend raised by 10% to 9.4p per share
Commenting on the results, Nick Henry, Chief Executive Officer
said:
"James Fisher had a positive start to the year with revenue
increasing by 13% to GBP235.8m and underlying operating profit by
7%. The phasing of renewables projects within Marine Support
combined with a degree of recovery in maintenance activity in the
oil and gas sector indicates stronger growth for the Group in the
second half leading to a good improvement in the result for the
year."
For further information:
Chief Executive
Officer
James Fisher and Nick Henry Group Finance 020 7614
Sons plc Stuart Kilpatrick Director 9508
------------------ -------------------- ----------------- ---------
Susanne Yule 0203 727
FTI Consulting Richard Mountain 1340
------------------ --------------------------------------- ---------
Chairman's Statement
Half Year Results for the six months ended 30 June 2017
Results
I am pleased to report that James Fisher had a positive start to
the year with revenue in the first half increasing by 13% to
GBP235.8m (2016: GBP209.3m) and underlying profit before tax by 6%
to GBP18.6m (2016: GBP17.5m) compared with the same period last
year.
Three of our divisions continued to trade well, with Marine
Support and Tankships profits at similar levels to last year and
Specialist Technical significantly ahead. Offshore Oil reported
similar revenue but reduced profits after a slow start in the first
four months of the year reduced utilisation levels. Trading in May
and June in this division gives grounds for some optimism for an
improved second half.
Strategic Developments
James Fisher continues to pursue a consistent strategy of
investing in niche businesses operating in demanding environments
where strong marine service skills are valued and rewarded. Whilst
organic growth has driven the majority of James Fisher's
development, the Group continues to be alert for incremental
acquisitions which will strengthen our range of products, services
or geographical coverage.
The first half saw the Group's investments of recent years bear
fruit with significantly higher volumes of work in Asia Pacific for
our Specialist Technical businesses and the opening of an important
new market in Brazil for ship-to-ship oil transfer services. In
March we strengthened our product offering to the offshore
renewables sector with the acquisition of Rotos 360, a high
technology specialist in the repair and reconditioning of wind
turbine rotor blades.
Outlook
Profit in the second half is likely to benefit from the phasing
of projects across our renewables businesses due to seasonal
factors and across our offshore oil businesses due to some
improvement in oil and gas sector demand. We would therefore expect
to see good growth from our Marine Support division. In Offshore
Oil, orders in our Norwegian and our downhole equipment businesses
have begun to show clear signs of recovery. Our Specialist
Technical businesses continue to trade well despite some slowing in
our nuclear decommissioning activities. Tankships maintain its good
performance of recent years. Overall, we therefore expect to see
stronger growth for the Group in the second half leading to a good
improvement in the result for the year.
Dividend
The Board believes that James Fisher remains well placed to
provide further growth and value for its shareholders. The Board
has agreed a 10% increase in the interim dividend to 9.40 pence per
share (2016: 8.55p) payable on 3 November 2017 to shareholders on
the register on 6 October 2017.
C J Rice
29 August 2017
Operating and Financial Review
Half Year Results for the six months ended 30 June 2017
Operating performance
The Group's financial performance in the first half progressed
well with a 7% increase in underlying operating profit on revenue
that was 13% higher at GBP235.8m (2016: GBP209.3m). The overall
growth rates reported have been positively impacted by exchange
rates as a significant proportion of the Group's revenue is
received in US Dollars. Changes at constant exchange rates have
been calculated by retranslating the results for the six months
ended 30 June 2016 at the average rates for the comparator in
2017.
Change
H1 H1 at constant
Revenue 2017 2016 Change currency
Group 235.8 209.3 +13% +8%
------------------------ -------- -------- --------- -------------
Marine Support 105.6 92.4 +14% +9%
Specialist Technical 75.7 62.9 +20% +19%
Offshore Oil 27.1 27.0 - (7)%
Tankships 27.4 27.0 +1% (2)%
------------------------ -------- -------- --------- -------------
Change
Underlying operating H1 H1 at constant
profit 2017 2016 Change currency
Group 21.3 19.9 +7% +4%
------------------------ -------- -------- --------- -------------
Marine Support 9.1 9.3 (2)% (6)%
Specialist Technical 8.5 6.1 +39% +38%
Offshore Oil 1.1 2.1 (47)% (52)%
Group revenue increased
by 13% compared to
prior period and by
8% at constant currency.
The contribution from
businesses acquired
was 5% and organic
growth, driven by
Marine Support and
Specialist Technical,
was 3%. Offshore Oil
revenue was flat but
7% lower excluding
currency effects reflecting
reduced demand in
the first four months,
in particular.
Underlying operating
profit increased by
7% to GBP21.3m (2016:
GBP19.9m). Underlying
operating profits
at Marine Support
and Tankships were
broadly similar to
prior period and a
38% increase at Specialist
Technical more than
offset the lower result
Tankships 3.9 3.8 +3% +1% at Offshore Oil.
Common costs (1.3) (1.4)
------------------------ -------- -------- --------- -------------
Marine Support
H1 2017 H1 2016
Revenue (GBPm) 105.6 92.4
Underlying operating profit (GBPm) 9.1 9.3
Underlying operating margin 8.6% 10.1%
Return on capital employed 12.0% 13.6%
Revenue in Marine Support grew by 14%. Volumes in ship-to-ship
transfers were weaker in Asia Pacific, but this was offset by the
commencement of operations for the Brazilian market. Whilst the
businesses acquired in the renewables sector contributed to some
increase in revenue, the phasing of projects within both the UK
renewables and international marine service sectors, suppressed
profits in the first half. Subtech, our South African based marine
service business, contributed to the first half growth with project
wins in the Middle East and West Africa.
Underlying operating profit was marginally lower at GBP9.1m
(2016: GBP9.3m) as the benefit from increased ship-to-ship
transfers and businesses acquired was offset by a lower level of
marine service projects and by a slow start from our mass-flow
excavation business which suffered from the weakness in the oil
& gas sector, particularly in the first four months of the
year. The Group's marine services and support contract in relation
to the construction of the Galloper Wind Farm performed well in the
period but did not see the benefit of additional work.
On 22 March 2017, the Group acquired Rotos 360 for an initial
consideration of GBP1.5m with potential further consideration of
GBP5.0m dependant on profit targets for the three years ending 31
December 2019. Rotos 360 uses the latest technological innovation
to provide solutions in the inspection, repair and reconditioning
of wind farm rotor blades, primarily in the offshore environment.
The company was established in 2013 as part of a UK Government
funded research project to reduce the cost of operation and
maintenance of offshore wind turbines.
Specialist Technical
H1 2017 H1 2016
Revenue (GBPm) 75.7 62.9
Underlying operating profit (GBPm) 8.5 6.1
Underlying operating margin 11.2% 9.7%
Return on capital employed 18.8% 15.6%
Specialist Technical revenue was 20% higher than prior period at
GBP75.7m (2016: GBP62.9m). Our defence and diving equipment
business, JFD, was 24% ahead of 2016, reflecting a full six months
from the Indian submarine rescue project compared to three months
in 2016, the start of a saturation diving system for China and
including 5% relating to businesses acquired. In nuclear
decommissioning, whilst the Winfrith reactor project continued to
perform well, the business saw a 5% reduction in revenue as a
change in UK policy has reduced projects awarded across the supply
chain.
Underlying operating profit was 39% ahead of the equivalent six
months in 2016 at GBP8.5m (2016: GBP6.1m) reflecting good
contributions from JFD's service contracts, products and submarine
rescue and diving equipment projects which more than offset a small
reduction in nuclear profitability.
JFD successfully completed the first operational dive of its
Compact Bailout Rebreathing Apparatus (Cobra) which provides 45
minutes of fully independent breathing gas to a diver in an
emergency to enable them to return to the diving bell. Our nuclear
decommissioning business, JFN, won its first order to supply a
manipulator to China in the second half.
Offshore Oil
H1 2017 H1 2016
Revenue (GBPm) 27.1 27.0
Underlying operating profit (GBPm) 1.1 2.1
Underlying operating margin 4.1% 7.8%
Return on capital employed 1.6% 3.3%
Offshore Oil had a slow start to the year and although revenue
was similar to 2016, after adjusting for currencies, it was 7%
lower. The majority of the reduction was due to low utilisation
levels in the early months of the year which decreased margins.
Underlying operating profit was GBP1.0m lower at GBP1.1m (2016:
GBP2.1m) and underlying earnings before interest, tax, depreciation
and amortisation was GBP6.4m (2016: GBP7.6m). Overheads in the half
were reduced by a further 10%. Whilst the first half result was
lower, the business remains profitable and orders received since
May, together with indications from customers, suggest a stronger
second half.
Tankships
H1 2017 H1 2016
Revenue (GBPm) 27.4 27.0
Underlying operating profit (GBPm) 3.9 3.8
Underlying operating margin 14.2% 14.1%
Return on capital employed 29.2% 28.3%
Tankships reported a similar result to the first half of 2016
with an operating margin of around 14%. The business operated 14
vessels (2016: 15) in the period and received some benefit from
lower bareboat charter costs in the period. It also won a contract
to supply two vessels for the refuelling of the HMS Queen Elizabeth
during the second half of 2017.
Finance
Interest and taxation
Net interest was GBP0.2m higher at GBP2.6m (2016: GBP2.4m) due
to increased borrowings mainly arising from the funding of working
capital for the project to design and assemble two submarine rescue
vessels for the Indian Navy and from other large projects.
The effective tax rate on underlying profit before tax in the
period increased to 17.2% (2016: 15.4%). This rate is based on
estimates for the full year and has increased due to a greater
proportion of profits being earned in higher tax jurisdictions such
as Brazil and Ghana. The first half of 2016 also benefitted from
adjustments to tax provisions in respect of prior years which has
not been repeated in 2017. The Group's tanker operations continue
to be taxed with respect to tonnage rather than profits and this
reduces the effective rate by 2.3 (2016: 2.4) percentage points in
the period.
Separately disclosed items
The directors consider that alternative performance measures
described in note 3 assist an understanding of the underlying
trading performance of the businesses. These measures exclude
separately disclosed items which consist of gains or losses on the
sale of a business, asset impairments and charges or income
relating to the acquisition of businesses. The net charge for
separately disclosed items after tax in the six months ended 30
June 2017 was GBP0.8m (2016: GBPnil).
Earnings per share and dividends
Underlying profit before taxation increased 6% to GBP18.6m
(2016: GBP17.5m) due to the strong operating profit growth at
Specialist Technical. Underlying diluted earnings per share rose by
2% to 30.1 pence per share (2016: 29.4p), which was lower than the
uplift in underlying profit before taxation due to the higher
effective tax rate and a larger minority interest charge in the
period.
Diluted earnings per share after separately disclosed items were
28.5 pence per share (2016: 29.4p). The interim dividend has
increased by 10% to 9.40 pence per share (2016: 8.55p) and will be
paid on 3 November 2017 to shareholders on the register on 6
October 2017.
Cash flow and borrowings
Summary cash flow
----------------------------- -------- --------
H1 2017 H1 2016
GBPm GBPm
----------------------------- -------- --------
Underlying operating
profit 21.3 19.9
Depreciation & amortisation 13.1 12.1
-----------------------------
Ebitda * 34.4 32.0
Working capital (18.9) (10.1)
Working capital
- Indian Navy (6.7) -
Pension / other (2.3) (1.7)
-----------------------------
Operating cash flow 6.5 20.2
Interest & tax (5.1) (5.1)
Capital expenditure (11.3) (8.6)
Acquisitions (4.2) (7.7)
Dividends (8.8) (8.0)
Other 0.3 (2.4)
-----------------------------
Net outflow (22.6) (11.6)
Net borrowings at
start of period (105.7) (93.9)
----------------------------- -------- --------
Net borrowings at
end of period (128.3) (105.5)
============================= ======== ========
Underlying earnings before
interest, tax depreciation
and amortisation (Ebitda)
increased by 8% to GBP34.4m
(2016: GBP32.0m). This funded
the seasonal increase in
working capital of GBP10.2m
and a project related increase
of GBP15.4m, including,
as previously stated, working
capital in relation to the
submarine rescue project
for the Indian Navy.
Cash conversion, the proportion
of underlying operating
profit converted into operating
cash, excluding the project
for the Indian Navy was
62% (2016: 102%). Capital
expenditure was 31% up on
prior period GBP11.3m (2016:
GBP8.6m) and GBP4.2m (2016:
GBP7.7m) was spent on business
acquisitions, inclusive
of GBP1.5m of deferred consideration
* Underlying earnings before in respect of a business
interest, tax, that had been acquired in
depreciation and amortisation 2013.
After dividends paid in the period of GBP8.8m (2016: GBP8.0m),
the net cash outflow was GBP22.6m (2016: GBP11.6m) and net
borrowings increased to GBP128.3m (2016: GBP105.5m). The ratio of
net borrowings (which includes project related bonds and
guarantees) to ebitda increased in line with management
expectations, to 2.2 times (2016: 1.8 times) reflecting the working
capital bonds and guarantees in relation to the Indian Navy
project. Excluding this project, the ratio would be 1.8 times. Net
gearing, the ratio of net debt to equity was to 49% (2016:
46%).
Balance sheet
30 30
June June
2017 2016
-------------------
GBPm GBPm
------------------- ------- --------
Intangible assets 185.6 163.8
Other assets 136.6 135.7
Working capital 112.8 75.3
Other liabilities (42.3) (38.7)
-------------------
Capital employed 392.7 336.1
------------------- ------- --------
Borrowings 128.3 105.5
Equity 264.4 230.6
-------------------
392.7 336.1
------------------- ------- --------
Intangible assets have increased
by GBP21.8m since June 2016
due to the acquisitions of
Lexmar and Hughes in the
second half of 2016 and the
acquisition of Rotos 360
in March 2017.
Working capital was GBP37.5m
higher than prior year due
to the project for the Indian
Navy which cumulatively is
GBP13.4m and from businesses
acquired in the last twelve
months amounting to GBP6.9m.
The balance relates to project
related outflows, mainly
in Specialist Technical and
Marine Support reflecting
the uneven cash flows of
a more project led business.
Delivery of the two submarine rescue vessels for the Indian Navy
is scheduled for March 2018 and December 2018 and as previously
stated, a further increase of working capital in the second half of
2017 of around GBP15m-GBP18m is expected which reverses when the
vessels are delivered during 2018.
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 2016 Annual Report and Accounts on pages 20-22.
The principal risks set out in the 2016 Annual Report and Accounts
were:
-- Strategic - energy markets, operations in emerging markets;
-- Operational - project delivery, recruitment and retention of
key staff, reputational risk and cyber security;
-- Financial - foreign currency and interest rates.
The Directors consider that the principal risks and
uncertainties set out in the 2016 Annual Report and Accounts have
not changed and remain relevant for the second half of the
financial year.
Directors' Responsibilities
We confirm to the best of our knowledge:
The interim financial report has been prepared in accordance
with IAS 34 "Interim Financial Reporting" as adopted by the
European Union.
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.
N P Henry S C Kilpatrick
Chief Executive Officer Group Finance Director
29 August 2017
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
Note 2017 2016 2016
----------- -----------
GBP000 GBP000 GBP000
Revenue 4 235,775 209,317 465,969
Cost of sales (168,064) (144,999) (324,239)
----------- ----------- -------------
Gross profit 67,711 64,318 141,730
Administrative expenses (47,379) (45,083) (94,641)
Share of post tax results
of joint ventures 924 647 1,414
Acquisition related income
and (expense) 7 (1,009) (83) 1,456
----------- ----------- -------------
Operating profit 4 20,247 19,799 49,959
Analysis of operating
profit:
Underlying operating
profit 21,256 19,882 50,781
Separately disclosed
items (1,009) (83) (822)
----------- ----------- -------------
Net finance expense 5 (2,640) (2,421) (5,026)
----------- ----------- -------------
Profit before taxation 17,607 17,378 44,933
Analysis of profit before
tax:
Underlying profit before
taxation 18,616 17,461 45,755
Separately disclosed
items (1,009) (83) (822)
----------- ----------- -------------
Income tax 6 (3,014) (2,567) (6,786)
Profit for the period 14,593 14,811 38,147
=========== =========== =============
Attributable to:
Owners of the Company 14,387 14,835 39,753
Non-controlling interests 206 (24) (1,606)
14,593 14,811 38,147
=========== =========== =============
Earnings per share
pence pence pence
Basic 8 28.7 29.6 79.4
Diluted 8 28.5 29.4 78.7
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE
INCOME
for the six months ended 30 June 2017
Note 2017 2016 2016
Six months Six months
ended ended Year ended
30 June 30 June 31 December
----------- -----------
GBP000 GBP000 GBP000
Profit for the period 14,593 14,811 38,147
Items that will not be reclassified
to the income statement
Remeasurement loss on defined
benefit pension schemes 10 - - (3,054)
Actuarial loss in defined
benefit pension schemes - (697) -
Tax on items that will not
be reclassified 28 (553) (124)
----------- ----------- ------------
28 (1,250) (3,178)
Items that may be reclassified
subsequently to the income statement
Exchange differences on foreign
currency net investments (2,798) 7,158 16,771
Effective portion of changes
in fair value of cash flow hedges 5,262 (2,783) (3,249)
Effective portion of changes
in fair value of cash flow hedges
in joint ventures (229) (213) (139)
Net change in fair value of cash
flow hedges transferred to income
statement (282) (6) 551
Deferred tax on items that
may be reclassified (742) 488 432
----------- ----------- ------------
1,211 4,644 14,366
Total comprehensive income
for the period 15,832 18,205 49,335
=========== =========== ============
Attributable to:
Owners of the Company 15,642 18,062 50,725
Non-controlling interests 190 143 (1,390)
15,832 18,205 49,335
=========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2017
2017 2016 2016
30 June 30 June 31 December
---------- ----------
Note GBP000 GBP000 GBP000
Non-current assets
Goodwill 163,661 147,832 165,047
Other intangible assets 21,908 15,979 15,453
Property, plant and equipment 128,536 128,191 131,026
Investment in joint ventures 6,678 6,031 6,424
Available for sale financial
assets 1,377 1,478 1,377
Deferred tax assets 1,850 3,588 2,852
324,010 303,099 322,179
---------- ---------- ------------
Current assets
Inventories 56,392 49,786 54,092
Trade and other receivables 178,674 150,029 157,384
Cash and cash equivalents 11 14,861 29,720 21,848
249,927 229,535 233,324
---------- ---------- ------------
Current liabilities
Trade and other payables (122,218) (124,582) (129,332)
Current tax (8,394) (6,515) (8,426)
Loans and borrowings (2,891) (10,800) (3,086)
(133,503) (141,897) (140,844)
---------- ---------- ------------
Net current assets 116,424 87,638 92,480
Total assets less current
liabilities 440,434 390,737 414,659
---------- ---------- ------------
Non-current liabilities
Other liabilities (10,280) (9,141) (4,962)
Retirement benefit obligations 10 (25,395) (26,416) (26,770)
Cumulative preference shares (100) (100) (100)
Loans and borrowings (140,192) (124,345) (124,380)
Deferred tax liabilities (111) (153) (111)
(176,078) (160,155) (156,323)
---------- ---------- ------------
Net assets 264,356 230,582 258,336
========== ========== ============
Equity
Called up share capital 12,550 12,543 12,543
Share premium 25,690 25,573 25,573
Treasury shares (75) (610) (554)
Other reserves 4,024 (6,877) 2,797
Retained earnings 221,233 197,422 216,979
---------- ---------- ------------
Equity attributable to owners
of the Company 263,422 228,051 257,338
Non-controlling interests 934 2,531 998
Total equity 264,356 230,582 258,336
========== ========== ============
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2017
2017 2016 2016
Six months Six months Year
Note ended ended ended
30 June 30 June 31 December
----------- -----------
GBP000 GBP000 GBP000
Profit before tax for the
period 17,607 17,378 44,933
Adjustments to reconcile profit
before tax to net cash flows
Depreciation and amortisation 13,942 12,647 25,821
Acquisition costs charged 135 60 727
Profit on disposal of fixed
assets (818) (61) (556)
Provision for contract cessation - - 2,278
Adjustment to provision for
contingent consideration - (522) (3,384)
Net finance expense 2,640 2,421 5,026
Share of post tax results
of joint ventures (924) (647) (1,414)
Share based payments 218 577 1,144
Increase in inventories (2,550) (4,177) (54)
Increase in trade and other
receivables (23,556) 41 (5,675)
Decrease/(increase) in trade
and other payables 454 (5,962) (13,291)
Defined benefit pension cash
contributions less service
cost (1,686) (1,691) (4,233)
----------- ----------- ------------
Cash generated from operations 5,462 20,064 51,322
Cash outflow from acquisition
costs (231) - (631)
Income tax payments (2,848) (3,376) (6,930)
----------- ----------- ------------
Cash flow from operating activities 2,383 16,688 43,761
Investing activities
Dividends from joint venture
undertakings 988 172 700
Proceeds from the disposal of
property, plant and equipment 1,509 724 1,678
Proceeds from the disposal
of investments - - 144
Finance income 190 87 180
Acquisition of subsidiaries,
net of cash acquired (4,020) (7,689) (19,093)
Acquisition of property, plant
and equipment (9,706) (7,964) (13,859)
Development expenditure (1,622) (1,376) (2,672)
------------
Cash flows used in investing
activities (12,661) (16,046) (32,922)
Financing activities
Proceeds from the issue of
share capital 124 49 50
Finance costs (2,403) (1,815) (4,115)
Purchase of own shares by Employee
Share Ownership Trust (709) (635) (556)
Capital element of finance
lease repayments (50) (81) (174)
Proceeds from other non-current
borrowings 15,868 16,460 2,363
Dividends paid (8,830) (8,026) (12,303)
Dividend paid to minority
interest (416) - -
----------- ----------- ------------
Cash flows from financing
activities 3,584 5,952 (14,735)
Net increase in cash and cash
equivalents (6,694) 6,594 (3,896)
Cash and cash equivalents
at beginning of period 21,848 22,962 22,962
Net foreign exchange differences (293) 164 2,782
Cash and cash equivalents
at end of period 11 14,861 29,720 21,848
=========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2017
Share Share Retained Other Treasury Shareholders' Non-controlling Total
capital premium earnings reserves shares equity interests equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2017 12,543 25,573 216,979 2,797 (554) 257,338 998 258,336
Total
comprehensive
income - - 14,415 1,227 - 15,642 190 15,832
Contributions
by and
distributions
to owners:
Ordinary
dividends
paid - - (8,830) - - (8,830) - (8,830)
Dividend paid
to minority
interest - - - - - - (416) (416)
Acquisition
of minority
interest (318) - - (318) 162 (156)
Share based
payments - - 218 - - 218 - 218
Tax effect
of share
based
payments - - (43) - - (43) - (43)
Purchase of
shares by
ESOT - - - - (1,094) (1,094) - (1,094)
Sale of shares
by ESOT - - - - 385 385 - 385
Arising on
the issue
of shares 7 117 - - - 124 - 124
-------- -------- --------- --------- --------- -------------- ---------------- --------
7 117 (8,973) - (709) (9,558) (254) (9,812)
Transfer - - (1,188) - 1,188 - - -
--------- --------- --------------
At 30 June
2017 12,550 25,690 221,233 4,024 (75) 263,422 934 264,356
======== ======== ========= ========= ========= ============== ================ ========
Non-
Share Share Retained Other Treasury Shareholders' controlling Total
capital premium earnings reserves shares equity interests equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2016 12,541 25,525 192,908 (11,354) (1,613) 218,007 2,388 220,395
Total
comprehensive
income - - 13,585 4,477 - 18,062 143 18,205
Contributions
by and
distributions
to owners:
Ordinary
dividends
paid - - (8,026) - - (8,026) - (8,026)
Share based
payments - - 577 - - 577 - 577
Tax effect
of share
based
payments - - 16 - - 16 - 16
Purchase of
shares by
ESOT - - - - (1,153) (1,153) - (1,153)
Sale of shares
by ESOT - - - - 518 518 - 518
Arising on
the issue
of shares 2 48 - - - 50 - 50
-------- -------- --------- --------- --------- -------------- ---------------- --------
2 48 (7,433) - (635) (8,018) - (8,018)
Transfer - - (1,638) - 1,638 - - -
At 30 June
2016 12,543 25,573 197,422 (6,877) (610) 228,051 2,531 230,582
======== ======== ========= ========= ========= ============== ================ ========
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 2017 comprise the Company and its subsidiaries (together
referred to as the Group) and the Group's interests in jointly
controlled entities.
Statement of compliance
The condensed consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standard (IFRS) IAS 34 "Interim Financial Reporting" as adopted by
the European Union (EU). As required by the Disclosure and
Transparency Rules of the Financial Services Authority, the
condensed consolidated set of financial statements has been
prepared applying the accounting policies and presentation that
were applied in the preparation of the Group's published
consolidated financial statements for the year ended 31 December
2016 with the exceptions described below. They do not include all
of the information required for full annual financial statements,
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2016.
The comparative figures for the financial year ended 31 December
2016 are not the Group's statutory accounts for that financial
year. Those accounts which were prepared under IFRS as adopted by
the EU (adopted IFRS), have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The report of
the auditors was (i) unqualified, (ii) did not include a reference
to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not contain
a statement under section 498 (2) or (3) of the Companies Act
2006.
The consolidated financial statements of the Group for the year
ended 31 December 2016 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 thousand pounds (GBP000)
except where otherwise indicated.
The half year report was approved for issue by the Board of
Directors on 29 August 2017.
Going concern
After making enquires, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly they continue to adopt the going concern basis in
preparing the condensed consolidated financial statements.
The Group meets its day to day working capital requirements
through operating cash flows with borrowings in place to fund
acquisitions and capital expenditure. The Group had GBP34.0m of
undrawn committed facilities at 30 June 2017 and no revolving
credit facilities due for renewal within the next twelve
months.
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 2016.
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 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
2016.
3 Alternative performance measures
The Group uses a number of alternative (non-Generally Accepted
Accounting Practice (non-GAAP)) financial 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 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 amortisation or impairment of acquired intangible assets,
acquisition expenses, adjustments to deferred consideration
(together, acquisition related income and expense), the costs of a
material restructuring, asset impairment or rationalisation of
operations and the profit or loss relating to the sale of
businesses. Amortisation of acquired intangible assets and
acquisition expenses are recurring in nature where business
combinations are part of a group's strategy. As acquisition
expenses fluctuate with activity and to provide a better comparison
to businesses that are not acquisitive, the Directors consider that
both of these items should be separately disclosed to give a better
understanding of operating performance. The Directors believe that
the underlying operating profit is an important measure of the
operational performance of the Group. Underlying profit before
taxation is defined as underlying operating profit less net finance
expense.
2017 2016 2016
Six months Six months
ended 30 ended 30 Year ended
June June 31 December
GBP000 GBP000 GBP000
-------------------------- ----------- ----------- -------------
Operating
profit 20,247 19,799 49,959
Separately disclosed
items before taxation 1,009 83 822
----------------------------- ----------- ----------- -------------
Underlying operating
profit 21,256 19,882 50,781
Net finance expense (2,640) (2,421) (5,026)
----------------------------- ----------- ----------- -------------
Underlying profit before
taxation 18,616 17,461 45,755
----------------------------- ----------- ----------- -------------
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. The Directors believe
that underlying EPS provides an important measure of the underlying
earnings capability of the Group. 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 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.
3.4. Cash conversion
Cash conversion is defined as the ratio of operating cash flow
to underlying operating profit. Operating cash flow comprises cash
generated from operations adjusted for dividends from joint venture
undertakings.
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
2016.
The Board assesses the performance of the segments based on
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 2017
Marine Specialist Offshore Tankships Corporate Total
Support Technical Oil
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental revenue 105,791 75,993 27,115 27,418 - 236,317
Inter-segmental
sales (182) (300) (60) - - (542)
Revenue 105,609 75,693 27,055 27,418 - 235,775
========= =========== ========= ========== ========== ==========
Underlying operating
profit 9,060 8,496 1,080 3,860 (1,240) 21,256
Acquisition costs (12) - - - (123) (135)
Amortisation
of acquired intangibles (594) (132) (148) - - (874)
--------- ----------- --------- ---------- ---------- ----------
Operating profit 8,454 8,364 932 3,860 (1,363) 20,247
Net finance expense (2,640)
----------
Profit before
tax 17,607
Income tax (3,014)
Profit for the
period 14,593
==========
Assets and liabilities
Segmental assets 222,589 155,808 131,209 33,173 24,480 567,259
Investment in
joint ventures 3,688 2,990 - - - 6,678
--------- ----------- --------- ---------- ---------- ----------
Total assets 226,277 158,798 131,209 33,173 24,480 573,937
Segmental liabilities (61,027) (53,207) (8,176) (6,469) (180,702) (309,581)
---------
165,250 105,591 123,033 26,704 (156,222) 264,356
--------- ----------- ---------- ---------- ----------
Other segmental
information
Capital expenditure 3,450 3,270 729 1,975 287 9,711
Depreciation
and amortisation 4,785 1,905 5,328 1,652 272 13,942
--------- ----------- --------- ---------- ---------- ----------
Six months ended 30
June 2016
Marine Specialist Offshore Tankships Corporate Total
Support Technical Oil
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental revenue 92,600 63,441 27,082 26,991 - 210,114
Inter-segmental
sales (161) (525) (102) (9) - (797)
Revenue 92,439 62,916 26,980 26,982 - 209,317
========= =========== ========= ========== ========== ==========
Underlying operating
profit 9,313 6,149 2,089 3,759 (1,428) 19,882
Acquisition costs - - - - (60) (60)
Adjustment to
provision for
contingent consideration - 522 - - - 522
Amortisation
of acquired intangibles (192) (353) - - - (545)
--------- ----------- --------- ---------- ---------- ----------
Operating profit 9,121 6,318 2,089 3,759 (1,488) 19,799
Net finance expense (2,421)
----------
Profit before
tax 17,378
Income tax (2,567)
Profit for the
year 14,811
==========
Assets and liabilities
Segmental assets 204,243 109,756 134,062 33,073 45,469 526,603
Investment in
joint ventures 3,380 2,651 - - - 6,031
--------- ----------- --------- ---------- ---------- ----------
Total assets 207,623 112,407 134,062 33,073 45,469 532,634
Segmental liabilities (68,877) (36,308) (8,169) (6,549) (182,149) (302,052)
---------
138,746 76,099 125,893 26,524 (136,680) 230,582
----------- ---------- ---------- ----------
Other segmental
information
Capital expenditure 2,687 918 2,969 1,143 95 7,812
Depreciation
and amortisation 3,490 1,780 5,463 1,652 262 12,647
--------- ----------- --------- ---------- ---------- ----------
Year ended 31
December 2016
Marine Specialist Offshore Tankships Corporate Total
Support Technical Oil
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental revenue 203,926 152,678 55,490 55,492 - 467,586
Inter-segmental
sales (354) (893) (362) (8) - (1,617)
Revenue 203,572 151,785 55,128 55,484 - 465,969
========= =========== ========= ========== ========== ==========
Underlying operating
profit 20,956 19,950 4,200 8,188 (2,513) 50,781
Contract cessation
costs (2,278) - - - - (2,278)
Acquisition costs (249) (312) (166) - - (727)
Amortisation of
acquired intangibles (400) (801) - - - (1,201)
Adjustment to
provision for
contingent consideration 2,865 519 - - - 3,384
--------- ----------- --------- ---------- ---------- ----------
Operating profit 20,894 19,356 4,034 8,188 (2,513) 49,959
Net finance expense (5,026)
----------
Profit before
tax 44,933
Income tax (6,786)
Profit for the
year 38,147
==========
Assets and liabilities
Segmental assets 208,605 141,792 133,611 33,398 31,673 549,079
Investment in
joint ventures 3,744 2,680 - - - 6,424
--------- ----------- --------- ---------- ---------- ----------
Total assets 212,349 144,472 133,611 33,398 31,673 555,503
Segmental liabilities (48,440) (60,335) (8,363) (7,160) (172,869) (297,167)
163,909 84,137 125,248 26,238 (141,196) 258,336
--------- ----------- --------- ---------- ---------- ----------
Other segmental
information
Capital expenditure 4,622 2,077 5,599 1,413 160 13,871
Depreciation and
amortisation 7,437 4,002 10,978 3,166 239 25,822
--------- ----------- --------- ---------- ---------- ----------
5 Net finance expense
2017 2016 2016
Six months Six months
ended ended Year ended
30 June 30 June 31 December
----------- ----------- ------------
GBP000 GBP000 GBP000
Finance income:
Interest receivable on
short-term deposits 188 88 205
Finance expense:
Bank loans and overdrafts (2,365) (1,901) (3,982)
Preference dividend (2) (2) (3)
Finance charges payable
under finance leases (1) (11) (36)
Net interest on pension
obligations (309) (453) (993)
Unwind of discount on contingent
consideration (151) (142) (217)
----------- ----------- ------------
(2,828) (2,509) (5,231)
Net finance expense (2,640) (2,421) (5,026)
=========== =========== ============
6 Taxation
The effective tax rate on underlying profit before income tax,
based on an estimated rate for the year ending 31 December 2017, is
17.2% (30 June 2016: 15.4%, 31 December 2016: 15.4%). The effective
rate on profit before income tax (after separately disclosed items)
is 17.1% (30 June 2016: 14.8%, 31 December 2016: 15.1%). Of the
total tax charge, GBP2.0m relates to overseas businesses (2016:
GBP1.5m), and GBP1.0m relates to UK businesses (2016: GBP1.1m).
7 Separately disclosed items
2017 2016 2016
Six months Six months
ended ended Year ended
30 June 30 June 31 December
----------- ----------- ------------
GBP000 GBP000 GBP000
Included in operating profit:
Administrative expenses:
Contract cessation costs
in Angola - - (2,278)
Acquisition related income
and (expense):
Costs incurred on acquiring
businesses (135) (60) (727)
Amortisation of acquired
intangibles (874) (545) (1,201)
Adjustment to provision
for contingent consideration - 522 3,384
----------- ----------- ------------
(1,009) (83) 1,456
----------- ----------- ------------
Separately disclosed items
before taxation (1,009) (83) (822)
Tax on separately disclosed
items 188 117 267
(821) 34 (555)
=========== =========== ============
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 period, after
excluding ordinary shares held by the Employee Share Ownership
Trust as treasury shares.
Diluted earnings per share is calculated by dividing the profit
attributable to 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.
The calculation of basic and diluted earnings per share is based
on the following profits and numbers of shares:
Weighted average number of shares
30 June 30 June 31 December
2017 2016 2016
Number Number Number
of of of
shares shares shares
For basic earnings per ordinary
share* 50,144,671 50,066,388 50,096,089
Exercise of share options
and LTIPs 401,397 332,104 387,067
For diluted earnings per
ordinary share 50,546,068 50,398,492 50,483,156
=========== =========== ============
* Excludes 5,950 (June 2016: 46,619; December 2016: 45,368)
shares owned by the James Fisher and Sons plc
Employee Share Ownership Trust.
To provide a better understanding of the performance of the
Group, underlying earnings per share on continuing activities are
presented as set out in note 3.
2017 2016 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
----------- -----------
GBP000 GBP000 GBP000
Profit attributable to owners
of the Company 14,387 14,835 39,753
Separately disclosed
items 1,009 83 822
Non-controlling interest
in separately disclosed items - - (1,800)
Tax on separately disclosed
items (188) (117) (267)
Underlying profit attributable
to owners of the Company 15,208 14,801 38,508
=========== =========== ============
Basic earnings per
share 28.7 29.6 79.4
Diluted earnings
per share 28.5 29.4 78.7
Underlying basic
earnings per share 30.3 29.6 76.9
Underlying diluted
earnings per share 30.1 29.4 76.3
9 Interim dividend
The interim dividend of 9.40p (2016: 8.55p) per 25p ordinary
share is payable on 3 November 2017 to those shareholders on the
register of the Company at the close of business on 6 October 2017.
The dividend recognised in the Condensed Consolidated Statement of
Changes in Equity is the final dividend for 2016 of 17.60p which
was paid on 9 May 2017.
10 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
2017 2016 2016
Six months
Six months ended ended Year ended
30 June 30 June 31 December
----------------- ----------- ------------
GBP000 GBP000 GBP000
Net obligation as at
1 January (26,770) (26,956) (26,956)
Expense recognised in
the income statement (368) (507) (1,172)
Contributions paid to
scheme 1,743 1,744 4,412
Remeasurement gains
and losses - (697) (3,054)
At period
end (25,395) (26,416) (26,770)
================= =========== ============
The Group's net liabilities in respect of its pension schemes at
30 June 2017 were as follows:
2017 2016 2016
Six months
Six months ended ended Year ended
30 June 30 June 31 December
----------------- ----------- ------------
GBP000 GBP000 GBP000
Shore Staff (9,435) (8,498) (10,057)
Merchant Navy Officers
Pension Fund (7,634) (9,163) (8,464)
Merchant Navy Ratings
Pension Fund (8,326) (8,755) (8,249)
(25,395) (26,416) (26,770)
================= =========== ============
The principal assumptions in respect of these liabilities are
disclosed in the December 2016 Annual Report. The Group has not
obtained an interim valuation for the period ended 30 June 2017 as
there are no material changes to the principal assumptions.
11 Reconciliation of net debt
1 January Cash Other Exchange 30 June
2017 flow non-cash movement 2017
GBP000 GBP000 GBP000 GBP000 GBP000
Cash and cash equivalents 21,848 (6,694) - (293) 14,861
Debt due after 1
year (124,380) (16,051) (311) 534 (140,208)
Debt due within
1 year (2,994) 183 - 4 (2,807)
---------- --------- --------- --------- ------------
(127,374) (15,868) (311) 538 (143,015)
Finance leases (192) 50 (25) (1) (168)
Net debt (105,718) (22,512) (336) 244 (128,322)
========== ========= ========= ========= ============
1 January Cash Other Exchange 30 June
2016 flow non-cash movement 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Cash and cash equivalents 22,962 6,594 - 164 29,720
Debt due after 1
year (116,650) (5,724) (125) (1,873) (124,372)
Debt due within
1 year - (10,736) - - (10,736)
---------- --------- --------- --------- ------------
(116,650) (16,460) (125) (1,873) (135,108)
Finance leases (201) 81 - (17) (137)
Net debt (93,889) (9,785) (125) (1,726) (105,525)
========== ========= ========= ========= ============
1 January Cash Other Exchange 31 December
2016 flow non-cash movement 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Cash and cash equivalents 22,962 (3,896) - 2,782 21,848
Debt due after 1
year (116,650) (4,066) (12) (3,652) (124,380)
Debt due within
1 year - 1,703 (4,765) 68 (2,994)
---------- --------- --------- --------- ------------
(116,650) (2,363) (4,777) (3,584) (127,374)
Finance leases (201) 174 (127) (38) (192)
Net debt (93,889) (6,085) (4,904) (840) (105,718)
========== ========= ========= ========= ============
12 Commitments and contingencies
Commitments and contingencies are as set out in the 2016 Annual
Report other than for the following changes. At 30 June 2017, the
Group had capital commitments of GBP8.8m (30 June 2016: GBP1.6m, 31
December 2016: GBP0.2m) and the Group had issued performance and
payment guarantees to third parties with a total value of GBP44.7m
(30 June 2016: GBP16.9m, 31 December 2016: GBP42.4m).
13 Related parties
There have been no significant changes in the nature of related
party transactions in the period ended 30 June 2017 from that
disclosed in the 2016 Annual Report.
Independent review report to James Fisher and Sons plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2017 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated statement of
financial position, the condensed consolidated cash flow statement,
the condensed consolidated statement of movements in equity and the
related explanatory notes. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
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 Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("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.
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 IFRSs as adopted by the EU.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) 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.
Conclusion
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 2017 is not prepared, in all material respects, in accordance
with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Mike Barradell
for and on behalf of KPMG LLP
Chartered Accountants
1 St. Peter's Square
Manchester
M2 3AE
29 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
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