REG - Fisher (James) - Full year results for the year ended 31 Dec 21
10/03/2022 07:00
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RNS Number : 3244E Fisher (James) & Sons plc 10 March 2022
10 March 2022
James Fisher and Sons plc
Full year results for the year ended 31 December 2021
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'), the leading
marine service provider, announces its results for the year ended 31 December
2021.
£m unless otherwise stated 2021 2020 % change
Revenue 494.1 518.2 (4.7)
Underlying operating profit margin 5.7% 7.8% (210bps)
Return on capital employed 3.6% 6.7% (310bps)
Underlying operating profit * 28.0 40.5 (30.9)
Underlying profit before tax * 19.7 31.5 (37.5)
Underlying diluted earnings per share (p) ** 20.0 47.9 (58.2)
Statutory operating loss (20.7) (43.5) 52.4
Statutory loss before tax (29.0) (52.5) 44.8
Statutory diluted loss per share (p) (55.2) (114.2) 51.7
Dividend per share (p) - 8.0p
* excludes separately disclosed items of £48.7m loss (2020: £84.0m loss)
** excludes separately disclosed items of £37.8m loss (2020: £81.6m loss)
Performance summary:
· Challenging year, with revenue 4.7% lower at £494.1m and
underlying operating profit 30.9% lower at £28.0m. Loss before tax was
£29.0m (2020: £52.5m)
· Disruption to the business from the ongoing global pandemic,
markets not recovering at expected rates, and an underestimation of the
headwinds faced by some of the businesses
· UK lockdown affected H1; project delays and provisions further
affected H2
· Further provisions required against asset carrying values due to
prolonged impact of reduced profitability
· Good strategic progress, creating the foundations for sustainable
profitable growth:
o Significant contract wins in EDS (> £40m over the next 15 years)
further validate our renewables value proposition
o Sale of the Paladin dive support vessel and two businesses generated
cash proceeds of c.£20m
o Swordfish dive support vessel on hire for 2022
· Good access to banking facilities, with £287.5m in total and
£200m through to at least 2024
Commenting on the results, Chief Executive Officer, Eoghan O'Lionaird, said:
"2021 was a challenging and disappointing year for the Group. We experienced
ongoing disruption from the global pandemic, our markets did not recover at
expected rates, and we underestimated the headwinds faced by some of our
businesses.
In June 2021, we outlined a roadmap to achieve our objective of greater than
10% operating profit margin and greater than 15% return on capital employed.
This roadmap is based on three phases: "Reset, Reinforce and Realise".
Throughout the year we continued to execute the Reset and Reinforce phases to
create the foundations for sustainable profitable growth.
Having sold Paladin and two of our businesses, during 2022 we will continue to
optimise our portfolio to focus on businesses where we have a competitive
advantage, strong growth prospects and attractive returns. The internal
change agenda will continue at pace. We are executing several self-help
initiatives, focusing on operational and commercial excellence, including a
LEAN programme, to improve the underlying performance of the Group.
Performance in January and February 2022 was in line with management's
expectations. The full year outcome will be influenced by ship-to-ship
transfer business performance; JFD securing new project wins from its
pipeline; the strength of our subsea business during the busy mid-year period,
our ability to manage inflationary pressures on the cost base; and the
uncertainty arising from the current geopolitical environment.
The Board remains confident in the Group's strategy to deliver sustainable
profitable growth from the significant market opportunities that are available
to it and remains committed to executing on its long-term strategy."
For further information:
James Fisher and Sons plc Eoghan O'Lionaird Chief Executive Officer 020 7614 9508
Duncan Kennedy Chief Financial Officer
FTI Consulting Richard Mountain 0203 727 1340
Susanne Yule
Notes:
1. James Fisher uses alternative performance measures (APMs) as key
financial indicators to assess the underlying performance of the business.
APMs are used by management as they are considered to better reflect business
performance and provide useful additional information. APMs include
underlying operating profit, underlying profit before tax, underlying diluted
earnings per share, underlying return on capital employed and cash
conversion. An explanation of APMs is set out in note 2 in the full year
results.
2. Cautionary statement: This announcement contains certain
forward-looking statements with respect to the operations, performance and
financial condition of the Group. By their nature, these statements involve
uncertainty since future events and circumstances can cause results and
developments to differ materially from those anticipated. The forward-looking
statements reflect knowledge and information available at the date of
preparation of this announcement and James Fisher and Sons plc undertakes no
obligation to update these forward-looking statements. Nothing in this
statement should be construed as a profit forecast.
Chairman's review
Introduction
I joined James Fisher on 1 May 2021, with the Company amid some major
strategic and operational challenges. As with many businesses, Covid-19 has
been very disruptive from an operational perspective, and we owe a debt of
gratitude to our employees for their commitment to minimising the impact on
our customers by continuing to deliver our critical services throughout the
pandemic.
2021 Performance
2021 was a disappointing year. Revenue declined by 4.7% to £494.1m (2020:
£518.2m) driven by the Marine Support division being £34.9m (14.0%) behind
2020. Within Marine Support, the Fendercare ship-to-ship transfer revenues
were some 36% behind a record year in 2020. Underlying operating profit fell
by 30.9% to £28.0m (2020: £40.5m) with the profitability of our Fendercare,
JFD and Tankships businesses being particularly challenged. As a result of
those performance challenges, combined with a high level of financial
leverage, the Company did not pay an interim dividend for 2021 and the Board
is not recommending the payment of a final dividend for the year. The Board
recognises the importance of paying dividends and is committed to reinstating
the dividend when appropriate.
There is no doubt that the performance of James Fisher has been impacted by
Covid-19 over the past couple of years, but this is not the sole reason for
the Company's recent poor performance.
The Company has in the past made a number of acquisitions which have enhanced
earnings per share in the short term, but which have contributed to an
increase in debt levels and a long-term decline in return on capital employed.
Poor performance in a number of these acquired businesses, combined with
weakness in trading in our traditional Tankships, Fendercare and JFD
businesses, led to a disappointing financial performance in 2021 and a high
level of debt. Our over-riding short term priorities are; firstly to reduce
our debt and optimise our portfolio through a series of disposals; and
secondly to focus on improving our operational and financial performance.
In 2021 we sold the Paladin dive support vessel and the Materials Testing and
NDT businesses. Looking forward, we have reviewed our portfolio with a view to
executing further disposals to both reduce debt and to optimise the portfolio
and simplify the Group by refocusing on markets where James Fisher can deliver
sustained, differentiated value to our customers.
In terms of performance improvement, we have begun an operational excellence
pilot program which will see Lean methodologies being rolled out across the
Group, with the objective of improving product and service quality, customer
service and cost efficiency. We will soon embark on a Group-wide commercial
excellence programme, aimed at improving our capability in sales
effectiveness, creating customer value and commercial contracting. During the
year, we also undertook another Group-wide employee engagement survey, the
first to be externally-supported, and this has highlighted several areas that
we can address to improve employee engagement.
Our CEO, Eoghan O'Lionaird, has expanded the Executive Committee by including
the divisional managing directors, thereby increasing the focus on operational
management. This, in turn, will bring the Group functions closer to the
operations and will unlock synergies through operating more effectively as an
integrated leadership team.
We are putting these foundations in place to turnaround and improve Group
performance. However, it will take time for the changes to take effect and,
like any turnaround, to bear fruit. Nonetheless the Board is pleased that
these challenges are being tackled head on with the objective of creating a
platform from which we can sustainably grow the business in the future.
Future direction
With a backdrop of ever-increasing focus on climate change, and the
acceleration of an energy transition to a low carbon economy, the oil and gas
services industry is likely to decline over the long-term. However, it will
take time for the required global low carbon energy infrastructure to be
developed. Over that period of development, the energy transition requires the
continued provision of environmentally responsible products and services that
support our existing oil and gas customers. As the pace of the energy
transition towards sustainable energy sources accelerates, we are equally
focused on accelerating our own transition, as new opportunities emerge for
our well-established and fast-developing services supporting the growth of
renewable energy. We see those opportunities most notably in offshore wind and
the responsible decommissioning of redundant oil and gas assets. We are
well-positioned in these fast-emerging sectors, where the Group can combine
its traditional oil and gas-oriented subsea capabilities with newer,
renewable-energy specific solutions, such as the installation, monitoring and
management of high voltage cabling in offshore wind, and the provision of
bubble curtains that protect sea life from the noise impact of pile driving
during the construction of the wind farms. The key strategic challenge for the
Company over the next decade is in defining the optimal approach to address
the energy transition, capitalising on the many opportunities that are
available in renewables whilst enabling our customers to make their own
transitions in a financially and environmentally responsible manner. It is a
challenge on which our management team is keenly focused and will continue to
define with more precision as the shape of the energy transition becomes
clearer.
Board changes
I am very grateful to my predecessor, Malcolm Paul, for all that he did for
James Fisher after being appointed to the Board in 2011. After becoming
Chairman in 2018, Malcolm played a key role in supporting Eoghan O'Lionaird
following his appointment as Chief Executive in 2019. In addition, Stuart
Kilpatrick stepped down from the Board early in the year. Stuart, the Group
Finance Director since 2010, played an important role in the development of
James Fisher over the last decade. On behalf of the Board, I would like to
thank Malcolm and Stuart for their contributions, and to wish them every
success for the future.
Duncan Kennedy joined the Board as Chief Financial Officer on 4 May 2021.
Duncan brings considerable international and listed company experience to the
Company, and will play a key role in strengthening the performance culture
across the Group.
I was also pleased to welcome two new Non-Executive Directors to the Board.
Kash Pandya was appointed to the Board on 1 November 2021 and brings a wealth
of international experience as a FTSE 250 Chief Executive, having operated in
many of the same geographies and sectors as James Fisher.
Claire Hawkings, who was appointed to the Board on 1 January 2022, brings
extensive international oil and gas experience, as well as expertise in
sustainability, health and safety and the challenges of the energy transition.
Mike Salter will step down as a non-Executive Director at the AGM in May 2022
after serving nine years on the Board. He has made a considerable contribution
to James Fisher, and his experience of the marine and oil and gas services
industries will be much missed.
I am very grateful to the Board for its support and their commitment in
dealing with the challenges faced during what was a difficult year.
Employees
I would like to finish this statement where I started, by again expressing my
gratitude, on behalf of the Board, to the employees of James Fisher for all
they have done in dealing with the challenges of the past year, including
those resulting from the Covid-19 pandemic. Working for a Group that delivers
critical solutions to customers' complex problems in harsh environments is
always challenging, and I have huge respect for how our employees go about
this in their day-to-day jobs.
Conclusion
The last two years have been among the most challenging that the Company has
experienced in its 175-year history. The Board is committed to delivering a
successful turnaround of the James Fisher Group and believes that the steps it
is taking strategically, operationally, and financially are in the best
long-term interests of all stakeholders. In taking these steps we will
continue to live by our purpose and values. I look forward to being able to
report on our progress over the coming years and to returning the Group to
sustainable profitable growth.
Chief Executive's review
It has been, without question, a most disappointing and difficult year. The
challenges we have faced during 2021 have been both unprecedented in magnitude
and unpredictable in nature. We underestimated the headwinds faced by some of
our businesses, employees and management teams, who have been profoundly
tested by ongoing restrictions on travel; uncertainty in investment decisions;
disruption to supply chains; inflationary pressures; competition for skilled
resources; and a fundamental shift in working practices.
With that as the backdrop, the Group's revenue, at £494.1m, was 4.7% below
2020. Underlying operating profit of £28.0m was 30.9% below the £40.5m
achieved in 2020. The Group recorded a loss before tax of £29.0m compared to
a loss before tax of £52.5m.
The Group has borne through very difficult circumstances largely thanks to the
extraordinary efforts of our people. The headwinds we faced have served to
further strengthen our resolve and commitment to focusing our business
portfolio on markets where we have a highly differentiated value proposition
and can achieve sustainable, profitable growth.
We are confident that the efforts of governments worldwide will gradually
enable businesses and their supply chains to serve their customers in a more
normalised way, leading to a recovery in our core markets. Following two
supremely challenging years, we are focusing our efforts in areas that we can
directly influence and control in order to place the Group on a firm footing
for 2022 and beyond.
At our capital markets day in June 2021 we outlined a roadmap to achieve this
based on three phases: "Reset, Reinforce and Realise". Throughout the year we
have continued to execute the Reset and Reinforce phases to create the
foundations for sustainable profitable growth.
Health and Safety
Our overarching goal remains to maintain the health and safety of our
employees, contractors, suppliers and customers at all times. The nature of
our operations means that we frequently face hazards and harsh environments
for which we are well prepared, trained and equipped. The work that we have
done in coordinating health and safety statistics, incident information and
best practice is beginning to yield results in reducing the number of
incidents, and, crucially, in promoting further strengthening of our safety
culture.
However, the most significant challenge to our goal remains the more human
aspects of complacency, routine, familiarity and distraction. These are
inherently more difficult to address, requiring active participation and
personal engagement to assess and act on potential threats to individuals and
those around them. In response we have launched a Group-wide awareness
campaign with the aim of bringing health and safety to the forefront of
employees' minds and making it relatable to their specific job role and work
environment, whilst equipping people with the ability to identify hazards and
empowering them to voice concerns and to take the appropriate action
regardless of seniority.
These measures, in addition to enhanced training of existing employees and as
part of the on-boarding process for new hires, will further reinforce our
commitment to health and safety and will strengthen its foundation in our
culture.
Short term initiatives:
Portfolio Management
During the year we completed the disposal of two businesses: a materials
testing business in the UK and Ireland and a non-destructive testing business
predominantly serving the aerospace and process industries. Both were very
sound businesses, but they were neither connected to the key markets we are
pursuing, nor did they add to the wider Group as a source of competitive
advantage.
We value all our businesses including those we divest, and it is important to
us that we consider all stakeholders in making decisions, including in finding
the right future owner for those that leave the Group so that they can
continue their journeys and flourish. In both cases I believe we have achieved
the best possible outcome and I would like to thank the employees of these
businesses for their contribution and wish both them and their new owners
every success for the future.
In June we concluded the sale of the dive support vessel (DSV) Subtech Paladin
to its new owners, Indian offshore service provider Seamec, marking the first
step in the return to a more asset light strategy, focusing on the delivery of
high-end niche services. This strategy makes extensive use of partnerships to
facilitate preferential access to vessels on an as-needed basis. Since this
approach was adopted, we have successfully completed several complex subsea
projects in the West Africa region as a customer of the Paladin's new owner.
We continue to explore similar opportunities, including the potential for a
sale and leaseback option for the DSV Subtech Swordfish, which was also
acquired in 2019. We have secured a framework agreement with an important tier
1 contractor that will see the vessel utilised on a long-term basis in the
Middle East region.
As 2022 progresses, we will continue to critically evaluate the portfolio
against our tests of strategic fit and business attractiveness (which we
define as offering a combination of competitive advantage, growing markets,
and attractive financial returns). Further divestments are likely, with the
aim of reducing net debt, simplifying the Group's portfolio, and allowing us
to allocate capital to strong growth prospects, such as decommissioning and
renewable energy.
Operational and Commercial Excellence
During 2021 a number of initiatives have been commenced with specific focus on
improving the underlying performance of the Group:
· An Operational Excellence programme to drive improvement in
capacity, delivery performance and customer satisfaction through the
implementation of LEAN principles.
· Investment in upskilling our project delivery and commercial
resources to ensure that progress and project budgets are effectively
controlled, and that delivery, margins and customer satisfaction are improved.
· Continuous improvement in our risk management, contracting
principles and internal controls frameworks to provide robust governance and
mitigate margin erosion.
· A Commercial Excellence programme focused on identifying and
capturing value in our key markets including cross-Group co-ordination of
sales resources to address specific market opportunities where the Group can
capture additional value.
· Implementation of best practice tools and methodologies to drive
sales and commercial effectiveness.
· Adoption of customer engagement metrics to inform and improve
satisfaction scores, as well as retention and referral rates.
Longer Term Focus
Our three markets of choice are energy, marine and defence. These markets
offer strong growth potential and we are making progress in developing
differentiated niche propositions that are highly valued and rewarded by our
customers.
The 'energy transition' is creating new growth prospects for our businesses.
As a Group, we are well positioned to take advantage of the opportunities that
will arise in a more responsible oil and gas sector and the expected
transition away from oil and gas into renewable and other energy supplies.
Within oil and gas, we see continued and new opportunities for our services in
the production, transportation and decommissioning sectors. The global need
for decommissioning of old and abandoned oil and gas assets is significant and
we believe that our solutions in high-speed cutting, lifting and
well-abandonment are well placed to serve this growing demand under our newly
formed James Fisher Decommissioning brand.
There is unquestionably an accelerated global investment in offshore wind
powered energy production, a key solution to the world's challenge to
decarbonise against a backdrop of ever-growing demand for energy. James
Fisher has a growing presence in the offshore wind market and the long-term
expectation is that this will ultimately compensate for any reduction in
demand for our oil and gas-related products and services over the coming
decades. Whilst activity levels during 2021 were more subdued than
anticipated, there is increased visibility of future requirements and
confirmation of projects for delivery in 2022 and beyond. We have consolidated
our market offering under the James Fisher Renewables brand, which for the
first time brings all the relevant operating companies and services under one
go-to-market brand.
Demand in the marine sector softened considerably in 2021 due to reduced
economic activity. However, we anticipate that the general increase in
investment in offshore infrastructure, recovery of commodity prices
post-pandemic, and a return to a more normal pattern of global trade should
underpin a steady increase in demand and completion of projects that were
deferred or delayed due to Covid-19.
In the defence sector, the Group holds leading positions in submarine rescue,
and life support and diving equipment. Our innovative solutions for defence
customers frequently address challenges in the commercial subsea sector,
particularly in terms of safety and reliability in extremely hazardous
environments. We continue to supply our commercial diving equipment in over 40
countries globally. The business has a number of active product innovation
opportunities aimed at maintaining our leading position and the pipeline for
subsea vessel construction projects is strong.
Sustainability
We recognise the environment as one of our key stakeholders, but also consider
sustainability to encompass financial security, robust governance and
workforce stability. In 2021, the year of COP26, we have developed with the
support of external experts an ambitious and considered sustainability
strategy with science-based targets, which will be included in the 2021 Annual
Report and Accounts. Work is ongoing in 2022 to build on these foundations.
We firmly believe that by investing in local communities, working closely with
our customers and suppliers, and having a strong employee strategy, our
shareholders will also benefit. In this way we are creating an intrinsically
sustainable company.
A special thanks to our people
At the onset of the Covid-19 pandemic, like many other businesses, the Group
needed to prioritise employee health and safety, and to adapt to a remote
working environment. The hybrid working model that evolved during that time is
proving itself to be less transitory than perhaps some had assumed. We see
this working model as a step towards creating a more sustainable work/life
balance, as well as yielding benefits for our other stakeholders. That said,
we also recognise that this new working model has, at times, created its own
stresses and to address this, we very quickly stepped up our mental health
support and employee engagement programme and this has continued to develop in
2021. We know that we have work to do to fulfil our ambitions in this critical
area and are grateful for the feedback received from our employees during
2021's employee engagement survey, in response to which action plans across
the Group are being implemented during 2022.
Rather than being discouraged by the challenges of the pandemic and remote
working, our extraordinary people have been emboldened by them. They have
doubled down in understanding and meeting our customers' needs. They have
given up their time to offer assistance in our communities, bring food to the
needy and help the unwell. I am immensely proud of our people. It is in times
of adversity that our true values are evident, and throughout this past year,
James Fisher's people have time and again demonstrated their pioneering
spirit, integrity, energy and resilience and they continue to do so in support
of those affected by the war in Ukraine. Although the path has been difficult
it is to the great credit of our people that we have advanced so far on our
journey to becoming a purpose-led, values-driven business serving all our
stakeholders. I cannot thank them enough.
Looking Ahead
2021 was a challenging and disappointing year for the Group. We experienced
ongoing disruption from the global pandemic, our markets did not recover at
expected rates, and we underestimated the headwinds being faced by some of our
businesses.
In June 2021, we outlined a roadmap to achieve our objective of greater than
10% operating profit margin and greater than 15% return on capital employed.
This roadmap is based on three phases: "Reset, Reinforce and Realise".
Throughout the year we continued to execute the Reset and Reinforce phases to
create the foundations for sustainable profitable growth.
Having sold Paladin and two of our businesses, during 2022 we will continue to
optimise our portfolio to focus on businesses where we have a competitive
advantage, strong growth prospects and attractive returns. The internal
change agenda will continue at pace. We are executing a number of self-help
initiatives, focusing on operational and commercial excellence, including a
LEAN programme, to improve the underlying performance of the Group.
Performance in January and February 2022 was in line with management's
expectations. The full year outcome will be influenced by ship-to-ship
transfer business performance; JFD securing new project wins from its
pipeline; the strength of our subsea business during the busy mid-year period,
our ability to manage inflationary pressures on the cost base; and the
uncertainty arising from the current geopolitical environment.
In 2022 we celebrate 175 years since James Fisher founded the company in
Barrow-in-Furness. In the intervening years, largely thanks to the pioneering
spirit, integrity, energy and resilience of its employees, the Company has
continually adapted to overcome some of the most challenging events the world
has ever known, and I have no doubt that we will do so again to deliver
sustainable, profitable growth for our investors and value creation for all
our stakeholders.
The Board remains confident in the Group's strategy to deliver sustainable
profitable growth from the significant market opportunities that are available
to it and remains committed to executing on its long-term strategy.
Operating Review
Marine Support
2021 2020 Change %
Revenue (£m) 214.5 249.4 (14.0)
Underlying operating profit (£m) 5.0 10.1 (50.5)
Operating loss (£m) (21.0) (69.5) 69.8
The Marine Support division consists of three businesses, all aimed at
supporting the marine and energy markets. Marine Contracting principally
provides subsea services to both the oil & gas and offshore wind markets;
Fendercare provides essential ship-to-ship transfer services and related
products; and Digital and Data Services provides innovative technological
solutions aimed at improving the efficiency and productivity of our customers'
offshore assets. The division saw a significant decline in both revenue and
underlying operating profit in 2021, although there was a reduced level of
separately disclosed items, with non-cash provisions of £26.0m against
goodwill, doubtful receivables and tangible assets recognised in the year.
Marine Contracting
The business showed positive progress during 2021. Revenue increased by 4.0%
to £113.3m and after a particularly challenging year in 2020, operating
losses were significantly reduced. As part of our strategy to reduce the
asset-intensity of this business and to focus more on partnering and the
provision of differentiated services, the business sold one of its dive
support vessels in June and the other is now on long-term hire for the
majority of 2022.
EDS, the high voltage cabling specialist providing services to the offshore
wind industry, continued its positive momentum with three new multi-year
contracts to maintain offshore windfarm electrical infrastructure over periods
of 13 to 15 years. The contracts are worth more than £40m over the period,
which includes "availability" bonuses of around £8m for ensuring a pre-agreed
level of uptime that could be earned and recognised in future periods.
In Mozambique, the major LNG project remains suspended due to the ongoing
security issues in the region. The Group settled all outstanding claims
against its customer prior to the end of 2021 and is ready to support the
remobilisation of the project in due course.
The order book for 2022 is strong, with several projects deferred from 2021
expected to commence in the first half of the year and a good level of
identified tendering targets.
Fendercare
Following a record year in 2020, the Fendercare business experienced a
significant decline in 2021. Not only was the comparative year of 2020 boosted
by crude oil trading on the back of the significant volatility in the oil
price in 2020, but the business was also challenged in 2021 by unfavourable
market developments in Malaysia and Brazil. Revenue from the Fendercare group
was £77.9m, some 32% below 2020. Within this, the ship-to-ship revenues were
down 36%.
The business is responding to the challenges by focusing on securing new sites
to conduct STS operations in Malaysia, and has been successful in securing new
contracts in Brazil. Although a return to the record highs seen in 2020 is not
expected (absent significant volatility in the oil price) the business is
expected to show some growth in 2022. A steady increase in the number of
enquiries for LNG STS operations provides some encouragement for the future.
The sale of related products such as fenders also declined in 2021 as
customers sought to defer capital expenditure. An inventory provision of
£2.7m has been recognised in the period, reflecting a prolonged reduction in
expectations for product sales as a direct result of the pandemic.
Digital and Data Services ("DDS")
DDS is a collection of businesses aimed at providing technology solutions to
the oil and gas and renewable energy markets. Revenue in 2021 fell by 9% to
£23.3m, principally due to Strainstall, the provider of load and asset
monitoring solutions, which experienced difficult market conditions with the
downturn in construction activity reducing demand for its products. Other
businesses, such as AIS, which has developed and sells Digital Twin software,
providing operators with an online, real-time asset management solution aimed
at reducing their operating costs by allowing asset condition to be monitored
from anywhere in the world rather than on site, showed good growth, with new
contract wins servicing offshore oil BP and Chevron in particular.
Specialist Technical
2021 2020 Change %
Revenue (£m) 133.2 130.4 2.1
Underlying operating profit (£m) 9.9 14.0 (29.3)
Operating profit (£m) 7.0 12.4 (43.5)
Specialist Technical saw modest revenue growth of 2.1%, but a reduction in
underlying operating profit of £4.1m, adversely affected by the write-off of
£2.5m in relation to customer claims previously recognised but ultimately not
agreed. Separately disclosed items of £2.9m recognised in the year included
the impairment of tangible and intangible assets within the JFD business.
JFD experienced a mixed year. Work continued on its significant long-term
projects, with three submarine rescue vessels (SRVs) and a 500m saturation
diving spread all progressing well towards final milestones. One of the SRVs
was delivered to its Korean customer in December and only relatively minor
work is required in 2022 to complete all other projects, triggering final
payment milestones. The business is looking to secure new projects during
2022, with a strong sales pipeline, although with no new orders in hand, the
projects side of the business is at a cyclical low point. Demand for diving
equipment was subdued during 2021 as many customers had fewer divers in the
water, largely due to Covid-19 restrictions, and deferred spend on new
equipment.
The Group's nuclear decommissioning business, JFN, showed some positive
momentum during the first half of the year, but results for the full year were
ultimately held back by the decision of a major customer to defer to 2022 new
project awards expected in H2 2021. The level of tendering activity early in
2022 is encouraging, with new contracts for engineering design work already
won early in the year.
Offshore Oil
2021 2020 Change %
Revenue (£m) 86.3 78.0 10.6
Underlying operating profit (£m) 11.1 11.2 (0.9)
Operating profit (£m) (5.2) 8.4 (161.9)
Offshore Oil achieved strong revenue growth of 10.6% during the year, driven
by increased demand for its bubble curtain solutions and well-testing
services. This traditional oil and gas service business has seen significant
success in repositioning itself into new markets, such as the supply of bubble
curtain solutions to offshore wind construction projects which protect subsea
wildlife from the noise of piling, as well as an earlier stage opportunity in
aquaculture which is showing promising signs of future demand. Bubble curtain
revenues increased from £3.9m in 2020 to £7.4m in 2021.
James Fisher Offshore, which offers decommissioning services to the oil and
gas industry experienced a somewhat frustrating year, with projects delayed at
short notice during the second half of the year and the impact of a bad debt
provision against amounts receivable from a financially distressed customer
holding back profitability. Despite the project delays in Q4 2021, demand for
decommissioning services continues to increase, with 13% growth in revenue to
£8.0m in 2021 (2020: £7.1m).
RMSpumptools (RMS) saw strong demand for its market-leading artificial lift
products, which both prolong the useful life of oil wells and prevent the
unwanted escape of methane gas during production. As the oil industry
increasingly focuses on minimising its environmental impact, we believe that
demand for RMS products will continue to increase.
Separately disclosed items of £16.3m have been recognised in relation to
goodwill impairment (£13.9m) and receivables (£2.4m). The impairment in
respect of receivables relates to a specific counterparty risk and receivables
billed over 12 months ago in relation to certain projects.
Tankships
2021 2020 Change %
Revenue (£m) 60.1 60.4 (0.5)
Underlying operating profit (£m) 4.8 8.0 (40.0)
Operating profit (£m) 1.3 8.0 (83.8)
Revenue for the year was broadly in line with 2020, however profitability was
adversely affected by a combination of the UK lockdown in Q1 2020, increased
operating costs due to enhanced Covid-19 safety protocols and quarantine
requirements, and a short-term dip in utilisation during September.
Utilisation rates across the fleet increased over the course of the year from
an average of 86% in Q1 to 95% in Q4. The business's exposure to the
shorter-term spot-rate charters has increased slightly in the year to c. 23%
(2020: c. 21%) as a result of contracts that have not been renewed. During the
first two months of 2022, utilisation rates were strong and spot charter rates
are showing good signs of recovery.
Impairment charges of £3.5m have been recognised in the year, reflecting a
reassessment of residual values of older vessels that are reaching end of
life. The two newly-commissioned dual-fuel (marine gasoil and LNG) vessels are
well into the construction phase and are due for delivery late in 2022,
replacing two vessels that are approaching the end of their useful operational
lives.
Cattedown Wharves, which serves the South-West of England, performed well in
the year, notwithstanding the lockdown in Q1 2021. Volumes of cargo
transported through the port have now largely recovered to pre-pandemic
levels.
Financial Review
2021 was another challenging year for the Group. The global pandemic continued
to adversely affect trading conditions, resulting in both revenue and
underlying operating profit being below 2020. Despite the reduction in
performance, our businesses have remained resilient throughout, which is
testament to the hard work and dedication of all employees.
Underlying performance in 2021
Revenue was 4.7% below 2020 at £494.1m (2020: £518.2m). It was a mixed
performance across the divisions, with Specialist Technical and Offshore Oil
showing growth, Tankships being in line and Marine Support behind 2020. Within
Marine Support, the ship-to-ship ("STS") transfer revenues in the Fendercare
business showed a significant decline due to 2020 being a record year,
compounded by market challenges in Malaysia and Brazil.
Gross margin was down by 220 bps to 24.4% compared to 26.6% in 2020.
Contributing factors include the reduction in higher margin STS revenues and a
provision against slow-moving inventory reflecting reduced demand for
Fendercare's related fender products, together with increased operating costs
as a result of enhanced COVID safety protocols across the world, particularly
in our offshore project-based businesses and Tankships division which both
rely on mobilising significant numbers of people over the course of a year.
Admin expenses were 4.3% below 2020 at £94.5m, as the Group continued to keep
tight control over its operating expenses following cost reductions achieved
in 2020. No general pay increase was awarded to employees in 2021, which is
something that the Board has sought to rectify in 2022, with an average pay
increase of 3% being awarded in January against a backdrop of increasing
inflation and competition for talent.
Foreign exchange provided a modest headwind in the year, with an average
GB£:US$ rate of £1:$1.37 compared to £1:$1.29 in 2020. This adversely
affected revenue by 2.1% and underlying operating profit by 4.5% respectively.
Underlying operating profit fell from £40.5m in 2020 to £28.0m in 2021.
Separately disclosed items
Principally as a result of a second year of reduced profitability and the
ongoing impacts from the pandemic, the Group has recognised a net charge in
relation to separately disclosed items of £48.7m, reduced from £84.0m in
2020.
In 2021, non-cash goodwill and intangible asset impairments of £29.2m (2020:
£19.4m) have been recognised principally in relation to the Marine Support
and Offshore Oil divisions, as future growth expectations have been tempered
by the ongoing effects of the pandemic. Impairment provisions have also been
made against tangible fixed assets, principally vessels, of £9.3m (2020:
£34.0m including £31.6m in relation to two dive support vessels). The
carrying value of these assets prior to impairment exceeded both the value in
use and likely recoverable amount.
Bad debt impairments of £4.3m have been made in respect of receivables
relating to a specific counterparty risk and receivables billed over 12 months
ago in relation certain projects (2020: £19.3m provision against three
specific projects). All balances, including those provided for in 2020,
continue to be pursued, with a number of ongoing legal actions to support
recovery. The Group reassessed the methodology applied to expected credit
losses and now requires all debt over 180 days overdue to be provided for
unless there is compelling evidence to support future collection.
Costs of material litigation of £3.1m (2020: nil) have been incurred in
relation to a number of resolved and ongoing disputes.
The Group sold the Paladin dive support vessel and two businesses during the
year. These sales generated net proceeds of £20.8m. After deducting the
carrying values of the related assets, liabilities and goodwill, the Group
recognised a net profit of £0.6m in relation to the disposals.
The net cash outflow in relation to other separately disclosed items was
£1.7m (2020: £3.3m).
Statutory operating loss
The Group's operating loss, which is the sum of underlying operating profit
and separately disclosed items, reduced to £20.7m (2020: £43.5m) as a result
of lower separately disclosed items partially offset by the reduction in
underlying operating profit.
Finance charges
The Group's net finance charges reduced by £0.7m to £8.3m (2020: £9.0m).
Bank interest reduced from £7.0m to £6.0m during the year as a result of
lower borrowings. Non-cash pension and lease liability charges are broadly in
line with 2020 at £2.3m (2020: £2.0m). The Group's interest cover ratio,
which is calculated by dividing underlying operating profit by net finance
charges (excluding IFRS16 finance charges) is 5.4 times (2020: 6.1 times),
which compares to banking covenants that require the ratio to be greater than
3.0 times.
Taxation
The Group has recognised an overall net tax credit of £0.8m in the year
(2020: net charge of £4.8m). The underlying tax charge for the year is
£10.1m (2020: £7.2m) representing an underlying effective tax rate of 51.2%
(2020: 22.8%). Compared to the UK Corporation Tax rate of 19%, the following
principal factors have had an adverse impact in 2021:
- Losses incurred during 2021 but not provided for as a deferred
tax asset (+13pps)
- Higher effective tax rate in overseas jurisdictions (+11pps)
- Retranslation of the Group's net deferred tax liability to 25%
from 19%, reflecting the forthcoming UK Corporation Tax increase (+7pps)
Tax on separately disclosed items is a net credit of £10.9m, relating
principally to the recognition of a deferred tax asset in the UK on certain
fixed assets that were impaired in 2020. This follows a review of the likely
future profitability of the UK group and likely duration of the ongoing
business associated with those fixed assets. Corporation Tax payments during
the year were in line with 2020 at £7.9m.
Dividend and EPS
Having regard to the financial position of the Group, the Board has
recommended no dividends during 2021 (2020: interim dividend £4.0m; no final
dividend). The Board remains committed to reintroducing a sustainable dividend
policy at the right time. Basic and diluted earnings per share are a loss of
55.2p, compared to a loss of 114.2p in 2020.
Cashflow and borrowings
The Group generated £48.9m (2020: £88.0m) from operating activities. The
reduction is due to lower profits and a negative working capital movement in
the year. Net working capital was an outflow in 2021 of £8.1m (2020: net
inflow £19.9m), driven primarily from timing of payments on long-term
projects. A number of cash milestones are due in 2022 from long-term projects.
Net cashflow from separately disclosed items (excluding the sale of assets and
businesses which is included in "investing activities") was £1.7m (2020:
£3.9m) and tax payments were in line with 2020 at £7.9m.
Cashflows from investing activities generated a £1.9m outflow (2020: £24.2m
outflow) as the disposal of the Paladin dive support vessel and two businesses
between them generated £20.9m in proceeds. This was balanced against the
deployment of £22.1m (2020: £18.9m) of capital expenditure, principally
aimed at ensuring the sea-worthiness of our vessels (£4.3m), investment in
decommissioning and related equipment (£3.8m), upgrading our bubble-curtain
equipment (£1.8m) and the purchase of ship-to-ship transfer equipment, for
both LNG and oil operations (£2.5m). Investment in M&A was much reduced,
with £1.1m being deployed in 2021, principally in relation to the acquisition
of Subsea Engenuity, compared to £7.9m in 2020 which related to the purchase
of Fathom and deferred consideration on previously completed transactions.
The Group reduced net debt, including all lease liabilities, by £12.9m to
£185.6m. Within this, the net bank borrowing position improved by £26.0m to
£139.6m (2020: £165.6m). Additional lease liabilities principally relate to
a new charter vessel in the Caribbean and the renewal of seven existing leases
within the Tankships division.
£m 2021 2020 Movement
Bank net borrowings (139.6) (165.6) 26.0
Finance leases (IAS17 basis) (7.8) (9.4) 1.6
Right of use liabilities (38.2) (23.1) (15.1)
Net debt (185.6) (198.1) 12.5
The Group's net debt for the purposes of its banking covenants consists of net
bank borrowings, finance lease liabilities (on an IAS17 basis), and bonds and
guarantees, as summarised in the table below. On a covenants basis, net debt
has reduced by £47.8m. The ratio of net debt : EBITDA has remained broadly
steady at 2.9 times, which compares to banking covenants requiring the ratio
to be less than 3.5 times.
£m 2021 2020 Movement
Bank net borrowings (139.6) (165.6) 26.0
Finance leases (IAS17 basis) (7.8) (9.4) 1.6
Bonds and guarantees (8.4) (28.3) 19.9
Net debt - covenants basis (155.8) (203.6) 47.8
EBITDA - covenants basis 54.3 73.2
Net debt : EBITDA 2.9 2.8
Liquidity
The Group has retained good access to borrowing facilities. A new £130m
revolving credit facility was signed during 2021 with three of the Group's
existing lenders (replacing £142.5m of expiring bilateral facilities). The
table below summarises borrowing facilities by year of maturity, with and
without the inclusion of available "+1" extensions. It is the Board's current
expectation that extension periods will be exercised in the normal course.
£m 2022 2023 2024 2025 2026 Total
No extensions 40.0 47.5 200.0 - - 287.5
With extensions 40.0 - 87.5 30.0 130.0 287.5
Balance sheet
The Group's net assets reduced by £27.3m to £210.6m (31 December 2020:
£237.9m), broadly in line with the loss for the year of £28.2m.
Non-current assets
Non-current assets reduced by £51.7m in the year. Goodwill reduced by £33.0m
to £133.5m (31 December 2020: £166.5m) as a result of impairment charges of
£29.2m, disposals of businesses that had £3.9m of goodwill allocated to them
and foreign exchange differences of £1.6m. Intangible assets reduced to
£13.3m from £20.1m due to amortisation and impairment charges of £9.1m
offset by additions of £2.2m, including £0.7m in respect of the acquisition
of Subsea Engenuity.
Within Property, Plant and Equipment the Group invested £19.4m in additions.
This was offset by disposals with a net book value of £15.0m (principally the
Paladin dive support vessel), depreciation of £23.6m, impairment charges of
£5.1m against underutilised assets, the reclassification of the Swordfish
dive support vessel to "Held for sale" within current assets (£10.7m) and
foreign exchange differences of £1.0m.
Right of use assets increased by £9.9m, principally as a result of movements
in the Group's Tankships fleet. One new vessel was taken on a long-term
operating lease in the Caribbean to service a newly won, long-term commercial
chartering arrangement, and seven existing vessel leases were renewed in the
period. Depreciation of £8.4m against vessels was provided in the normal
course and an impairment provision of £4.2m was booked to reflect the latest
view of the likely residual values of a number of vessels in the fleet.
Current assets and current liabilities
The Group's net current assets increased by £17.7m to £85.5m. Short term
cash and borrowings increased by £21.1m to a net position of £34.4m of cash.
Assets held for sale with a value of £10.7m at 31 December 2021 were
transferred from non-current assets, representing the Swordfish dive support
vessel.
Non-current liabilities
Long-term borrowings reduced slightly to £173.9m (2020: £178.8m). An
increase in long-term lease liabilities of £10.8m represents the new charters
within the Tankships division. Net pension liabilities, as measured under
IAS19, reduced to £1.9m compared to £10.3m at 31 December 2020. The Group
continues to make deficit repair payments in line with agreed profiles.
Principal risks and uncertainties
The most significant risks that the Board considers may affect our business
are listed below. No new principal risks have been identified during the year.
· Health and safety risk
· Cyber security risk
· Operating in emerging markets
· Climate change
· Contractual risk
· Project delivery risk
· Recruitment and retention of key staff
· Financial risk
· Pandemic risk
A full description of the principal risk and uncertainties, the changes during
2021, and their management and mitigation as well as emerging risks will be
set out in the 2021 Annual Report and Accounts.
Directors' Responsibilities
The following is an extract of the full statement prepared in connection with
the Company's Annual Report and Accounts for the year ended 31 December
2021.
The Directors of the Company confirm that, to the best of their knowledge:
· the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole; and
· the Strategic report and the Directors' report include a fair
review of the development and performance of the business and the position of
the Company and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties
that they face.
The Directors of James Fisher and Sons plc and their respective
responsibilities are set out in the 2021 Annual Report and Accounts.
The responsibility statement was approved by the Board on 9 March 2022 and
signed on its behalf by:
E P
O'Lionaird
D Kennedy
Chief Executive
Officer
Chief Financial Officer
9 March 2022
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2021
Year ended Year ended
31 December 2021 31 December 2020
Before separately Separately Before separately Separately
disclosed disclosed disclosed disclosed
items items Total items items Total
Notes £m £m £m £m £m £m
Revenue 3 494.1 - 494.1 518.2 - 518.2
Cost of sales (373.6) (11.0) (384.6) (380.6) (43.2) (423.8)
Gross profit 120.5 (11.0) 109.5 137.6 (43.2) 94.4
Administrative expenses (94.5) (37.7) (132.2) (98.7) (40.8) (139.5)
Share of post-tax results of associates 2.0 - 2.0 1.6 - 1.6
Operating profit/(loss) 28.0 (48.7) (20.7) 40.5 (84.0) (43.5)
Net finance expense 3 (8.3) - (8.3) (9.0) - (9.0)
Profit/(loss) before taxation 19.7 (48.7) (29.0) 31.5 (84.0) (52.5)
Income tax 5 (10.1) 10.9 0.8 (7.2) 2.4 (4.8)
Profit/(loss) for the year 9.6 (37.8) (28.2) 24.3 (81.6) (57.3)
Attributable to:
Owners of the Company 10.0 (37.8) (27.8) 24.1 (81.6) (57.5)
Non-controlling interests (0.4) - (0.4) 0.2 - 0.2
9.6 (37.8) (28.2) 24.3 (81.6) (57.3)
Loss per share 6 pence pence
Basic (55.2) (114.2)
Diluted (55.2) (114.2)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2021
Year ended Year ended
31 December 2021 31 December 2020
£m £m
Loss for the year (28.2) (57.3)
Items that will not be classified to the income statement
Actuarial gain/(loss) in defined benefit pension schemes 6.3 (9.3)
Tax on items that will not be reclassified (0.5) 1.1
5.8 (8.2)
Items that may be reclassified to the income statement
Exchange differences on foreign currency net investments (2.6) (7.8)
Effective portion of changes in fair value of cash flow hedges (2.6) 0.6
Effective portion of changes in fair value of cash flow hedges in joint 0.3 (0.2)
ventures
Net changes in fair value of cash flow hedges transferred to income statement 0.3 (0.1)
Deferred tax on items that may be reclassified 0.4 1.1
(4.2) (6.4)
Total comprehensive income for the year (26.6) (71.9)
Attributable to:
Owners of the Company (26.1) (72.0)
Non-controlling interests (0.5) 0.1
(26.6) (71.9)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2021
31 December 2021 31 December 2020
restated*
Notes £m £m
Non-current assets
Goodwill 133.5 166.5
Other intangible assets 13.3 20.1
Property, plant and equipment 122.2 158.2
Right-of-use assets 41.8 31.9
Investment in joint ventures 8.0 7.5
Other investments 1.4 1.4
Other receivables 10.1 0.8
Deferred tax assets 9.6 5.2
339.9 391.6
Current assets
Inventories 49.0 46.6
Trade and other receivables 157.3 162.0
Assets held for sale 8 10.7 -
Cash and cash equivalents 10 68.0 93.1
285.0 301.7
Current liabilities
Trade and other payables (149.5) (139.3)
Provisions (2.0) -
Current tax (4.5) (7.6)
Borrowings 10 (33.6) (79.8)
Lease liabilities (9.9) (7.2)
(199.5) (233.9)
Net current assets 85.5 67.8
Total assets less current liabilities 425.4 459.4
Non-current liabilities
Other payables (1.3) (3.6)
Provisions (1.1) (1.6)
Retirement benefit obligations 9 (1.9) (10.3)
Cumulative preference shares (0.1) (0.1)
Borrowings (173.9) (178.8)
Lease liabilities (36.1) (25.3)
Deferred tax liabilities (0.4) (1.8)
(214.8) (221.5)
Net assets 210.6 237.9
Equity
Called up share capital 12.6 12.6
Share premium 26.8 26.7
Treasury shares (0.6) (0.2)
Other reserves (20.4) (16.5)
Retained earnings 191.5 214.6
Total shareholders equity 209.9 237.2
Non-controlling interests 0.7 0.7
Total equity 210.6 237.9
* cash and cash equivalents and borrowings (current) have been restated for
the 2020 comparative period to reflect a gross up of cash at bank and in hand
and overdraft balances. Right-of-use assets, trade and other payables
(current) and retained earnings have been restated for the 2020 comparative to
reflect a change in accounting policy in respect of dry dock overhauls (see
note 1).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2021
31 December 2021 31 December 2020
restated*
Note £m £m
(Loss)/profit before tax (29.0) (52.5)
Adjustments to reconcile (loss)/profit before tax to net cash flows
Depreciation and amortisation 44.2 49.0
Separately disclosed items (excluding amortisation) 45.8 81.1
Other non-cash items 7.8 7.1
(Increase)/decrease in inventories (2.7) 2.0
(Increase)/decrease in trade and other receivables (15.4) 30.9
Increase/(decrease) in trade and other payables 10.0 (13.0)
Defined benefit pension cash contributions less service cost (2.2) (4.8)
Cash generated from operations 58.5 99.8
Cash outflow from separately disclosed items (1.7) (3.9)
Income tax (payments)/receipts (7.9) (7.9)
Cash flow from operating activities 48.9 88.0
Investing activities
Dividends from joint venture undertakings 1.6 1.8
Proceeds from the disposal of a subsidiary, net of cash disposed 6.2 1.3
Proceeds from the disposal of property, plant and equipment 14.7 2.6
Finance income 0.3 0.3
Acquisition of subsidiaries, net of cash acquired (1.1) (7.9)
Investment in joint ventures and other investments - (0.5)
Acquisition of property, plant and equipment (22.1) (18.9)
Development expenditure (1.5) (2.9)
Cash flows used in investing activities (1.9) (24.2)
Financing activities
Proceeds from the issue of share capital 0.1 0.2
Finance costs (5.6) (7.0)
Net purchase of own shares by Employee Share Ownership Trust (0.5) (0.9)
Notional purchase of own shares for LTIP vesting (0.5) (1.0)
Capital element of lease repayments (13.7) (13.0)
Proceeds from borrowings 84.0 34.3
Repayment of borrowings (89.9) (64.5)
Dividends paid - (4.0)
Dividends paid to non-controlling interest - (0.2)
Cash flows used in financing activities (26.1) (56.1)
Net increase in cash and cash equivalents 10 20.9 7.7
Cash and cash equivalents at 1 January 13.5 7.5
Net foreign exchange differences 0.1 (1.7)
Cash and cash equivalents at 31 December 34.5 13.5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Total Non-
Share Share Retained Other Treasury shareholders controlling Total
capital premium earnings reserves shares equity interests equity
£m £m £m £m £m £m £m £m
At 1 January 2020 as reported 12.6 26.5 284.7 (10.6) - 313.2 0.8 314.0
Accounting policy change - Right-of-use refit capitalisation - - 2.0 - - 2.0 - 2.0
At 1 January 2020 12.6 26.5 286.7 (10.6) - 315.2 0.8 316.0
Loss for the year - - (57.5) - - (57.5) 0.2 (57.3)
Other comprehensive income - - (8.7) (5.8) - (14.5) (0.1) (14.6)
Contributions by and distributions to owners:
Ordinary dividends paid - - (4.0) - - (4.0) - (4.0)
Dividend paid to minority interest - - - - - - (0.2) (0.2)
Remeasurement of non-controlling interest put option - - - (0.1) - (0.1) - (0.1)
Share based payments - - 0.1 - - 0.1 - 0.1
Tax effect of share based payments - - (0.3) - - (0.3) - (0.3)
Purchase of shares by ESOT - - - - (0.9) (0.9) - (0.9)
Notional purchase of own shares - - (1.0) - - (1.0) - (1.0)
Arising on the issue of shares - 0.2 - - - 0.2 - 0.2
Transfer - - (0.7) - 0.7 0.0 - 0.0
At 31 December 2020 12.6 26.7 214.6 (16.5) (0.2) 237.2 0.7 237.9
Loss for the year - - (27.8) - - (27.8) (0.4) (28.2)
Other comprehensive income - - 5.8 (4.1) - 1.7 (0.1) 1.6
Contributions by and distributions to owners:
Remeasurement of non-controlling interest put option - - - 0.2 - 0.2 - 0.2
Changes in ownership interest without a change in control - - (0.7) - - (0.7) 0.5 (0.2)
Share based payments - - 0.3 - - 0.3 - 0.3
Tax effect of share based payments - - (0.1) - - (0.1) - (0.1)
Purchase of shares by ESOT - - - - (0.5) (0.5) - (0.5)
Notional purchase of own shares - - (0.5) - - (0.5) - (0.5)
Arising on the issue of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.1) - 0.1 - - -
At 31 December 2021 12.6 26.8 191.5 (20.4) (0.6) 209.9 0.7 210.6
NOTES TO THE PRELIMINARY RESULTS
1. General information
James Fisher and Sons plc (the Company) is a public limited
company registered and domiciled in England and Wales and listed on the London
Stock Exchange. The consolidated financial statements comprise the financial
statements of the Company, its subsidiary undertakings and its interest in
associates and jointly controlled entities (together the Group), for the year
ended 31 December 2021. The Company's shares are listed on the London Stock
Exchange. The Company and consolidated financial statements were approved for
publication by the Directors on 9 March 2022.
The Group financial statements have been prepared in accordance with
UK-adopted international accounting standards. The Company financial
statements have been prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the provisions of the
Companies Act 2006. The financial statements are prepared on a going concern
basis and on a historical cost basis, modified to include revaluation to fair
value of certain financial instruments. As permitted by section 408 of the
Companies Act 2006, a separate income statement and related notes for the
holding company have not been presented in these financial statements. The
profit after taxation in the Company was £12.2m (2020: £15.9m loss). The
Group and Company financial statements are presented in Sterling and all
values are rounded to the nearest million pounds (£m) except when otherwise
indicated.
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 December 2021 or 2020. Statutory
accounts for 2020 have been delivered to the registrar of companies, and those
for 2021 will be delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
Going concern
The Directors have, at the time of approving these Financial Statements, a
reasonable expectation that the Group and Company have adequate resources to
continue in operational existence for at least 12 months from this reporting
date and have therefore continued to adopt the going concern basis of
preparation.
In light of the continuing Covid-19 global pandemic and subsequent
uncertainty, the Group has undertaken a detailed viability review and taken
appropriate mitigating actions to protect the business and liquidity.
Operations have been impacted by travel restrictions, supply chain logistics
and actions to protect employees to ensure safe working conditions. The
Group's quick response to Covid-19 has mitigated some of the impact on
financial performance, however the potential impact of a post pandemic
recession gives ongoing risk to future financial performance. Liquidity is
monitored through daily balance reporting, weekly forecasting and 12 month
cash flow forecasting.
The Group had £111.5m of undrawn committed facilities at 31 December 2021
(2020: £120.2m). The Group refinanced £130m of revolving credit facilities
during the year. At 31 December 2021, the Group had £287.5m of committed
facilities, a small decrease from the £300m at 31 December 2020. £40m
revolving credit facilities are due for renewal within twelve months from the
date of this report. Forecasts have been prepared which continue to show
headroom should they not be renewed. All revolving credit facilities are
linked to covenant compliance requirements, being a net debt to EBITDA ratio
and interest cover. The Group has been in compliance with covenant
requirements in the year, post year end, and is forecasting to be compliant
for at least 12 months from the date of approval of these financial
statements. Post year end, as at the date of approval of the financial
statements, the Group has approximately £102m of undrawn credit facilities
available.
The Directors' base case forecast reflects financial performance in the year
ended 31 December 2021 and the associated impacts of Covid-19. A number of
severe but plausible downside scenarios were calculated compared to the base
case forecast of profit and cash flow to assess headroom against facilities
for the next 12 months. Against these negative scenarios, which reduced
operating profit by £5m in 2022 and £1m in 2023, adjusted projections showed
no breach of covenants. Additional sensitivities which reduced cash receipts
by £10m in 2022 and £20m in 2023 and delayed project delivery reducing
profit by £10m in 2022 and £20m in 2023 and deferring debtor allocation by
£3m in 2022 and by £6m in 2023 were also run separately in combination with
the severe but plausible downside and adjusted projections showed no breach of
covenants. Further mitigating actions could also be taken in such scenarios
should it be required, including reducing capital expenditure, continuing to
sell non-core, underperforming businesses and reducing forecast dividend
payments and not carrying out any acquisitions.
Taking into account the level of cash and available facilities outlined above
and having undertaken rigorous assessment, the Directors consider that the
Group and Company have sufficient funds to allow them to meet their
liabilities as they fall due for at least 12 months from the date of approval
of the financial statements and therefore continue to adopt the going concern
basis of accounting in preparing these Financial Statements.
Change in accounting policy
The accounting policy in respect of dry dock overhauls on leased vessels has
been changed to defer the overhaul costs as a component of the related
tangible fixed asset and depreciate over their useful economic lives until the
next estimated overhaul rather than build up a provision in preparation for
the next estimated overhaul. The prior year comparatives have been restated to
reflect this change. The change in accounting policy is considered to provide
more relevant and reliable information as the dry docks are directly
attributable to the use of the vessel and this change aligns the accounting
policy for both owned and leased vessels. As a result previous dry dock
overhaul provisions (recognised in trade and other payables) of £0.8m have
been reversed and the right-of-use assets has increased by £1.2m. The impact
on consolidated total equity is an increase from £235.9m to £237.9m. There
is no impact on the company only total equity.
2. Alternative performance measures
The Group uses a number of alternative (non-Generally
Accepted Accounting Practice (non-GAAP)) performance measures which are not
defined within IFRS. The Directors use these measures in order to assess the
underlying operational performance of the Group and, as such, these measures
are important and should be considered alongside the IFRS measures. The
adjustments are separately disclosed and are usually items that are
significant in size and/or non-recurring in nature. The following non-GAAP
measures are referred to in the Annual Report and Accounts.
2.1 Underlying operating profit and underlying profit
before taxation
Underlying operating profit is defined as operating profit
before separately disclosed items, which comprise: acquisition related income
and expense (amortisation or impairment of acquired intangible assets,
acquisition expenses, adjustments to contingent consideration), the costs of a
material restructuring, litigation, or asset impairment and the profit or loss
relating to the sale of businesses. As acquisition related income and
expense fluctuates with activity and to provide a better comparison to
businesses that are not acquisitive, the Directors consider that these items
should be separately disclosed to give a better understanding of operating
performance. Underlying profit before taxation is defined as underlying
operating profit less net finance expense.
2021 2020
£m £m
Operating loss (20.7) (43.5)
Separately disclosed items before taxation 48.7 84.0
Underlying operating profit 28.0 40.5
Net finance expense (8.3) (9.0)
Underlying profit before taxation 19.7 31.5
2.2 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the
total of underlying profit before tax, less income tax, but excluding the tax
impact on separately disclosed items less profit attributable to
non-controlling interests, divided by the weighted average number of ordinary
shares in issue during the year. The Directors believe that underlying EPS
provides a better understanding of the underlying earnings capability of the
Group. Underlying earnings per share is set out in note 6.
2.3 Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use
assets, less cash and cash equivalents and after adding back borrowings.
Average capital employed is adjusted for the timing of businesses acquired and
after adding back cumulative amortisation of customer relationships.
Segmental ROCE is defined as the underlying operating profit, divided by
average capital employed. The key performance indicator, Group post-tax
ROCE, is defined as underlying operating profit, less notional tax, calculated
by multiplying the effective tax rate by the underlying operating profit,
divided by average capital employed.
2021 2020
£m £m
Net assets 210.6 237.9
Less right-of-use assets (41.8) (31.9)
Plus net borrowings 185.6 198.1
Capital employed 354.4 404.1
Underlying operating profit 28.0 40.5
Notional tax at the underlying effective tax rate (14.3) (9.2)
13.7 31.3
Average capital employed 377.4 467.6
Return on average capital employed 3.6% 6.7%
2.4 Underlying Cash conversion
Cash conversion is defined as the ratio of operating cash
flow to underlying operating profit. Operating cash flow comprises:
2021 2020
£m £m
Cash generated from operations 58.5 99.8
Dividends from joint venture undertakings 1.6 1.8
Capital element of lease repayments (13.7) (13.0)
Other 0.7 0.5
Operating cash flow 47.1 89.1
Underlying operating profit 28.0 40.5
Cash conversion 168% 220%
2.5 Underlying earnings before interest, tax, depreciation and amortisation
(Underlying EBITDA)
Underlying EBITDA, in line with the Group's banking covenants, is defined as
the underlying operating profit before interest, tax, depreciation and
amortisation.
2021 2020
£m £m
Underlying operating profit 28.0 40.5
Depreciation and amortisation 44.2 49.0
Less: Deprecation on right-of-use assets (13.2) (11.9)
Amortisation of acquired intangibles (note 5) (2.9) (2.9)
IFRS 16 impact removed (1.8) (1.5)
Underlying EBITDA 54.3 73.2
2.6 Underlying dividend cover
Underlying dividend cover is the ratio of underlying diluted earnings per
share to the total dividend per share.
2021 2020
pence pence
Underlying earnings per share 20.0 47.9
Total dividends per share* 0.0 8.0
Underlying dividend cover (times) 0.0 6.0
2.7 Underlying net borrowings
Underlying net borrowings is net borrowings as set out in note 10, excluding
right-of-use operating leases. The Group's banking arrangements are based on
underlying net borrowings.
2021 2020
£m £m
Net borrowings (note 10) 185.6 198.1
Less: right-of-use operating leases (38.4) (23.1)
147.2 175.0
2.8 Organic constant currency
Organic constant currency growth represents absolute growth,
adjusted for current and prior year acquisitions and for constant currency.
Constant currency takes the non-sterling results of the prior year and
re-translates them at the average exchange rate of the current year.
3. Segmental information
The Group has four operating segments reviewed by the
Board: Marine Support, Specialist Technical, Offshore Oil and Tankships. The
Board assess the performance of the segments based on underlying operating
profit, underlying operating margin and return on capital employed. It
considers that this information is the most relevant in evaluating the
performance of its segments relative to other entities which operate in
similar markets. Inter-segmental sales are made using prices determined on an
arms-length basis. Sector assets exclude cash, short-term deposits and
corporate assets that cannot reasonably be allocated to operating segments.
Sector liabilities exclude borrowings, retirement benefit obligations and
corporate liabilities that cannot reasonably be allocated to operating
segments.
Year ended 31 December 2021 Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
£m £m £m £m £m £m
Segmental revenue
- point in time 173.7 46.3 86.5 - - 306.5
- over time 41.0 88.3 - 60.1 - 189.4
Inter-segmental sales (0.2) (1.4) (0.2) - - (1.8)
Revenue 214.5 133.2 86.3 60.1 - 494.1
Underlying operating profit/(loss) 5.0 9.9 11.1 4.8 (2.8) 28.0
Separately disclosed items (26.0) (2.9) (16.3) (3.5) - (48.7)
Operating (loss)/profit (21.0) 7.0 (5.2) 1.3 (2.8) (20.7)
Net finance expense (8.3)
Loss before tax (29.0)
Income tax 0.8
Loss for the year (28.2)
Assets and liabilities
Segmental assets 189.7 154.8 124.2 75.1 73.4 617.2
Investment in joint ventures 2.6 3.2 2.2 - - 8.0
Total assets 192.3 158.0 126.4 75.1 73.4 625.2
Segmental liabilities (77.4) (60.3) (26.4) (39.2) (211.3) (414.6)
114.9 97.7 100.0 35.9 (137.9) 210.6
Other segmental information
Capital expenditure 6.1 2.7 6.3 4.3 - 19.4
Depreciation and amortisation 12.3 6.9 12.1 12.4 0.5 44.2
Revenue disclosed in the income statement is comprised of goods and services
of £370.0m (2020: £398.9m), equipment hire of £68.5m (2020: £40.2m) and
construction contract income of £55.6m (2020: £79.1m).
Year ended 31 December 2020 Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
£m £m £m £m £m £m
Segmental revenue
- point in time 225.3 42.2 80.1 - - 347.6
- over time 24.5 89.2 - 60.4 - 174.1
Inter-segmental sales (0.4) (1.0) (2.1) - - (3.5)
Revenue 249.4 130.4 78.0 60.4 - 518.2
Underlying operating profit/(loss) 10.1 14.0 11.2 8.0 (2.8) 40.5
Separately disclosed items (79.6) (1.6) (2.8) - - (84.0)
Operating (loss)/profit (69.5) 12.4 8.4 8.0 (2.8) (43.5)
Net finance expense (9.0)
Loss before tax (52.5)
Income tax (4.8)
Loss for the year (57.3)
Assets and liabilities
Segmental assets 246.7 156.0 139.4 54.7 89.0 685.8
Investment in joint ventures 2.1 3.0 2.4 - - 7.5
Total assets 248.8 159.0 141.8 54.7 89.0 693.3
Segmental liabilities (90.5) (57.6) (24.9) (21.4) (261.0) (455.4)
158.3 101.4 116.9 33.3 (172.0) 237.9
Other segmental information
Capital expenditure 7.1 1.9 5.4 3.1 - 17.5
Depreciation and amortisation 17.8 6.7 12.7 11.5 0.3 49.0
4. Separately disclosed items
In order for a better understanding of the underlying
performance of the Group certain items are disclosed separately (note 2).
Separately disclosed items are as follows:
2021 2020
£m £m
Acquisition related income and (expense):
Costs incurred in acquiring/disposing of businesses (0.5) (1.0)
Amortisation of acquired intangibles (note 2) (2.9) (2.9)
(3.4) (3.9)
Marine support restructure - (3.9)
Gain/(loss) on disposal of businesses 0.3 (3.5)
Gain on disposal of Dive support vessel 0.3 -
Costs of material litigation (3.1) -
Impairment charges:
Intangible assets (29.2) (19.4)
Dive support vessels - (31.6)
Tangible fixed assets (9.3) (2.4)
Receivables (4.3) (19.3)
Separately disclosed items before taxation (48.7) (84.0)
Tax on separately disclosed items 10.9 2.4
(37.8) (81.6)
During the year, separately disclosed items were in relation to the following
matters:-
Acquisition related income and expense comprises costs incurred on the
acquisition/disposal of businesses including external due diligence costs,
amortisation of acquired intangibles and any adjustment for contingent
consideration. As set out in note 2 these items fluctuate with acquisition
activity and are disclosed separately to provide a better comparison to
businesses that are not acquisitive.
Disposal of businesses relates to the disposal during 2021 of James Fisher
Testing Services Ltd which was sold for proceeds of £5.7m and resulted in a
gain of £0.8m. Also, the sale of James Fisher NDT Ltd for which proceeds were
£1.2m and loss on disposal of £0.5m.
Disposal of DSV is the sale of the Paladin vessel for $17.3m proceeds and a
£0.3m gain.
Costs of material litigation are costs arising from the process of exiting a
number of historic joint venture companies.
Impairment charges: Intangible assets comprise goodwill of £27.5m and £1.7m
development costs. Tangible fixed assets comprise assets in the Marine
support, Specialist technical and Tankship divisions fair value is less than
carrying net book value. The 2021 impairment in respect of receivables relates
to a specific counterparty risk and receivables billed over 12 months ago in
relation to certain projects.
Tax on separately disclosed items includes a credit of £7.9m, which
represents deferred tax recognised on the timing differences created following
the impairment of dive support vessels during the year ended 31 December 2020
and the Group's current expectations regarding Dive Support operations.
In 2020 separately disclosed items were in relation to the following matters:-
(i) Acquisition related income and expense comprises costs incurred on
the acquisition of businesses including external due diligence costs,
amortisation of acquired intangibles and any adjustment for contingent
consideration. As set out in note 2 these items fluctuate with acquisition
activity and are disclosed separately to provide a better comparison to
businesses that are not acquisitive.
(ii) Due to the deferral of subsea projects in oil and gas and
renewables, a material restructure of marine support activities was completed
during 2020. The charge of £3.9m related to redundancy and notice costs in
relation to 202 employees.
(iii) Disposal of businesses relates to the disposal in 2020 of JF Nuclear
GmbH for proceeds of £1.6m which resulted in a loss of £1.2m. The balance
includes £2.0m in respect of the exchange of interests in an associate and
£0.3m relating to cost adjustments in respect of businesses disposed of in
previous years.
(iv) Impairment charges
(a) Intangible assets comprise goodwill of £17.0m and other intangible
asset impairments of £2.4m in relation to development expenditure and
intellectual property where expected future cash flows no longer justify
carrying value. The goodwill impairment in 2020 related to the Subtech
(£10.0m) and James Fisher Testing Services (£7.0m) cash generating units.
(b) Dive support vessels: In 2019, the Group acquired two dive support
vessels with the strategic aim of targeting the market of subsea projects in
the oil and gas sector in West Africa and the Middle East. The combination
of changes in energy prices in the first half of 2020 and the onset of the
global pandemic resulted in lower utilisation of these vessels than expected
and gave rise to an impairment charge of £31.6m based on their recoverable
amount.
(c) the tangible fixed asset impairment in 2020 relates to certain assets
in Marine Support and Offshore Oil where latest forecasts of future cash flows
in respect of these assets is less than carrying net book value.
(d) the 2020 impairment in respect of receivables relates to a number of
projects commenced by the Group during 2019 where payment for amounts invoiced
or considered due under the contract have yet to be paid and for part of what
the Board considers it appropriate to make provision. A number of these
issues are subject to legal process and the outcome is uncertain.
5. Taxation
(a) The tax charge is based on profit for the year and comprises: 2021 2020
£m £m
Current tax:
UK corporation tax (0.7) (1.1)
Overseas tax (6.0) (7.9)
Adjustment in respect of prior years:
UK corporation tax 1.3 2.7
Overseas tax (0.3) (1.1)
Total current tax (5.7) (7.4)
Deferred tax:
Origination and reversal of temporary differences:
Current year
UK corporation tax 8.3 1.9
Overseas tax 0.0 1.1
Prior year
UK corporation tax (0.6) (0.3)
Overseas tax (1.2) (0.1)
Total tax on profit for the year 0.8 (4.8)
The total tax charge in the income statement includes a further £0.3m (2020:
£0.1m) which is stated within the share of post-tax results of joint
ventures.
Current year UK tax includes a credit of £7.9m, which represents deferred tax
recognised on the timing differences created following the impairment of dive
support vessels during the year ended 31 December 2020 and the Group's current
expectations regarding Dive Support operations.
6. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
shareholders by the weighted average number of ordinary shares in issue during
the year, after excluding 54,571 (2020: 9,227) ordinary shares held by the
James Fisher and Sons plc Employee Share Ownership Trust (ESOT), as treasury
shares. Diluted earnings per share are calculated by dividing the net profit
attributable to shareholders by the weighted average number of ordinary shares
that would be issued on conversion of all the dilutive potential ordinary
shares into ordinary shares.
At 31 December 2021, 650,513 options (2020: 386,317) were excluded from the
diluted weighted average number of ordinary shares calculation as their effect
would be anti-dilutive. The average market value of the Company's shares for
purposes of calculating the dilutive effect of share options was based on
quoted market prices for the period during which the options were outstanding.
Weighted average number of shares
2021 2020
Number of Number of
shares shares
Basic weighted average number of shares 50,345,477 50,342,732
Potential exercise of share based payment schemes 10,560 85,973
Diluted weighted average number of shares 50,356,037 50,428,705
Underlying earnings per share
To provide a better understanding of the underlying performance of the Group,
underlying earnings per share on continuing activities is reported as an
alternative performance measure (note 2).
2021 2020
£m £m
Profit attributable to owners of the Company (27.8) (57.5)
Separately disclosed items 48.7 84.0
Tax on separately disclosed items (10.9) (2.4)
Underlying profit attributable to owners of the Company 10.0 24.1
Earnings per share
pence pence
Basic earnings per share (55.2) (114.2)
Diluted earnings per share (55.2) (114.2)
Underlying basic earnings per share 20.0 48.0
Underlying diluted earnings per share 20.0 47.9
7. Dividends paid and proposed
2021 2020 2021 2020
pence per share pence per share £m £m
Equity dividends on ordinary shares declared and paid:
Interim dividend for 2020 - 8.0 - 4.0
Less dividends on own shares held by ESOP - -
- 4.0
No final dividend is proposed in respect of the year ended 31 December 2021
(2020: £nil).
8. Assets held for sale
In June 2021, management agreed a plan to sell the Dive Support
Vessel (DSV) known as the Swordfish within the Marine Support division and
consequently £10.7m of vessels have been reclassified from property plant and
equipment. The vessel is being actively marketed by a third party ship broker.
9 Retirement benefit obligations
The Group and Company defined benefit pension scheme
obligations relate to the James Fisher and Sons plc Pension Fund for Shore
Staff (Shore Staff), the Merchant Navy Officers Pension Fund (MNOPF) and the
Merchant Navy Ratings Pension Fund (MNRPF). The financial statements
incorporate the latest full actuarial valuations of the schemes which have
been updated to 31 December 2021 by qualified actuaries using assumptions set
out in the table below. The Group's obligations in respect of its pension
schemes at 31 December 2021 were as follows:
Group
2021 2020
£m £m
Shore staff (1.0) (8.8)
MNOPF (0.9) (1.3)
MNRPF 0.0 (0.2)
(1.9) (10.3)
10. Reconciliation of net borrowings
Net debt comprises interest bearing loans and borrowings less cash and cash
equivalents.
31 December Cash Other Exchange 31 December
2020 flow non-cash movement 2021
£m £m £m £m £m
Cash and cash equivalents 13.5 20.9 - 0.1 34.5
Debt due within one year (0.2) 0.1 - - (0.1)
Debt due after one year (178.9) 5.8 (0.9) - (174.0)
(179.1) 5.9 (0.9) - (174.1)
Lease liabilities (32.5) 13.7 (27.0) (0.2) (46.0)
Net borrowings (198.1) 40.5 (27.9) (0.1) (185.6)
31 December Cash Other Exchange 31 December
2019 flow non-cash Movement 2020
£m £m £m £m £m
Cash and cash equivalents 7.5 7.7 - (1.7) 13.5
Debt due within one year (0.3) 0.1 - - (0.2)
Debt due after one year (207.4) 30.1 (0.7) (0.9) (178.9)
(207.7) 30.2 (0.7) (0.9) (179.1)
Lease liabilities (30.2) 13.0 (15.4) 0.1 (32.5)
Net borrowings (230.4) 50.9 (16.1) (2.5) (198.1)
11. Share capital
Allotted, called up and fully paid
£1 Cumulative
25p Ordinary shares Preference shares
In millions of shares 2021 2020 2021 2020
In issue at 1 January 50.4 50.3 0.1 0.1
Exercise of share options 0.0 0.1 - -
In issue at 31 December 50.4 50.4 0.1 0.1
2021 2020 2021 2020
£m £m £m £m
Issued share capital 12.6 12.6 0.1 0.1
The preference shareholders are entitled to receive 3.5% cumulatively per
annum, payable in priority to any dividend on the ordinary shares. The
ordinary shareholders are entitled to receive dividends as declared from time
to time by the Directors.
Shares all carry equal voting rights of one vote per share held. They also
have the right to attend and speak at general meetings, exercise voting rights
and appoint proxies. Neither type of share is redeemable. In the event of a
winding-up order the amount receivable in respect of the cumulative preference
shares is limited to their nominal value. The ordinary shareholders are
entitled to an unlimited share of the surplus after distribution to the
cumulative preference shareholders.
2021 2020
Treasury shares £m £m
54,571 (2020: 9,227) ordinary shares of 25p 0.6 0.2
The Company has an established Employee Share Ownership Trust, the James
Fisher and Sons plc Employee Share Ownership Trust, to meet potential
obligations under share option and long-term incentive schemes awarded to
employees. The historic cost of these shares at 31 December 2021 was £0.6m
(2020: £0.2m). The trust has not waived its right to receive dividends.
In the year ended 31 December 2021, 26,738 (2020: 34,670) ordinary shares with
an aggregate nominal value of £6,685 (2020: £8,668) were issued to satisfy
awards made under the Company's Executive Share Option Scheme at option prices
of 521.67p and 567p (2020: 410p and 522p) per share giving rise to total
consideration of £530,055 (2020: £404,024).
During the year the Trust purchased 50,000 (2020: 50,000) of its own shares in
the market at an average cost per share of £9.87 (2020: £17.82) and a total
cost of £0.5m (2020: £0.9m).
12. Related party transactions
Excepting the change of Directors and the acquisition of
Subsea Engenuity, there were no material changes to related parties or
associated transactions from those disclosed in the 2020 Annual Report.
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