REG - Fisher (James) - Half year results for the 6 months ended 30 Jun 21
07/09/2021 07:00
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RNS Number : 9080K Fisher (James) & Sons plc 07 September 2021
7 September 2021
James Fisher and Sons plc
Half year results for the six months ended 30 June 2021
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'), the leading
marine service provider, announces its unaudited results for the six months
ended 30 June 2021 ('the period').
H1 2021 H1 2020 % change
Revenue £233.7m £258.1m (9.5)%
Underlying operating profit margin 5.7% 7.6% (190)bps
Return on capital employed 5.4% 6.6% (120)bps
Underlying operating profit * £13.3m £19.5m (31.8)%
Underlying profit before tax * £9.2m £15.1m (39.1)%
Underlying diluted earnings per share ** 12.8p 23.6p (45.8)%
Statutory operating profit £12.2m £11.5m 6.1%
Statutory profit before tax £8.1m £7.1m 14.1%
Statutory diluted earnings per share 26.8p 9.9p 170.7%
Interim dividend per share Nil 8.0p -
* excludes separately disclosed items of £1.1m loss (2020: £8.0m loss) (note
5)
** excludes separately disclosed items of £7.1m (2020: £6.9m loss) (note 5)
Highlights:
· First half results in line with the Board's expectations against
the backdrop of end markets that remain impacted by Covid-19
· Q2 performance showed a marked improvement over Q1
· Strengthening order books, particularly in decommissioning and
offshore wind, following high tender wins in H1
· New strategy to deliver sustainable profitable growth announced
in June 2021
· Sale of the Paladin dive support vessel completed in the period
for $17.3m
· £130m of revolving credit facilities renewed for three-year
term, providing access to facilities of £287.5m in total and £247.5m through
to at least 2024
Commenting on the results, Chief Executive Officer, Eoghan O'Lionaird, said:
"Our first half result was in line with the Board's expectations, with Q2
showing a marked improvement over Q1. The Group is expecting performance to
improve during the second half of the year as our end markets recover from the
disruption caused by the effects of the global pandemic.
However, we experienced weaker than anticipated trading in Fendercare and
lower short-cycle order intake at JFD during the important summer period and
this, combined with project suspensions in Mozambique, lead the Board to now
expect underlying operating profit for 2021 to be around the same level as
that achieved in 2020.
Looking beyond 2021, forward-looking order books in our long-cycle businesses
are strengthening following high levels of tendering activity and contract
wins year-to-date which gives the Board confidence in the Group's future
prospects.
James Fisher's new strategy to deliver sustainable profitable growth is
progressing well. The Group is focused on capitalising on its leading market
positions within the marine, energy and defence markets and is well placed to
benefit from the market recovery and meet its mid-term financial targets."
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 3 in these half year
results.
2. Certain statements contained in this announcement constitute
forward-looking statements. Forward-looking statements involve risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of James Fisher to be materially different from
future results, performance or achievements expressed or implied by such
statements. Such risks, uncertainties and other factors include exchange
rates, general economic conditions and the business environment.
Review of the six months ended 30 June 2021
Overview
The Group's performance in the first half of 2021 was in line with the Board's
expectations with Q2 showing a marked improvement on Q1 across the Group. The
end-markets in which we operate are recovering as the world continues to
manage the global pandemic. We have seen encouraging levels of tendering in
the offshore wind and decommissioning markets in particular, for projects
starting later in 2021 and into 2022 and beyond, and Group tender wins in the
first half were at a record level within Marine Contracting.
Strategic progress
The Group announced its new strategy to deliver sustainable profitable growth
at a Capital Markets Event held on 29 June 2021. The new strategy aims to
refocus the Group and reinforce its competitive advantages in attractive
niches within the Energy, Defence and Marine markets and to deliver stronger
sustainable returns.
A full portfolio review has been undertaken and the Group is committed to
addressing underperforming assets and businesses and accelerating investments
into the energy transition. To that end the Paladin dive support vessel,
against which a significant impairment charge was taken last year, was sold
for $17.3m during the period. The Group is in discussions with regard to the
potential sale of the Swordfish dive support vessel, which has the benefit of
a long-term framework agreement for its use with a major contractor.
Good progress has been made within the rapidly growing global renewables
sector, with the Group winning a number of offshore wind projects in France
and the UK, including St. Brieuc and Fecamp off the French coast and the Sofia
wind farm in the Dogger Bank. The Group has also seen increased usage of its
'bubble curtains' product offering, which uses compressed air to create a wall
of bubbles around noisy subsea works, protecting local wildlife and reducing
the environmental impact of such activity. The Group's decommissioning
activities, supporting the safe and environmentally-friendly deconstruction of
oil wells, is also seeing growing momentum in an area of growing global
demand.
Over the last 18 months the Group has created a solid platform from which
James Fisher will benefit as our markets continue to recover, and the Board
remains confident of meeting its mid-term financial targets of underlying
operating profit margin in excess of 10% and return on capital employed in
excess of 15%.
Financial performance
Revenue in the first half of 2021, at £233.7m, was 9.5% below H1 2020 and
7.2% below at constant currency. Performance in Q1 2021 was particularly
affected by the return of the UK to a Covid-driven lockdown. Revenue in Q2 was
14% higher than Q1 and showed a much-reduced variance to prior year (Q2 2021:
3% adverse to Q2 2020; Q1 2021: 16% adverse to Q1 2020).
At a divisional level, Specialist Technical and Offshore Oil both provided
constant currency revenue growth compared to H1 2020 and Tankships is now
trading broadly in line with 2020 following an improved performance in Q2.
Marine Support experienced a more challenging half year, with ship-to-ship
transfers significantly below the record performance achieved in H1 2020. This
division was also affected by the suspension of projects in Mozambique
following an insurgency in the region.
Statutory operating profit of £12.2m was £0.7m ahead of prior year, with a
significant reduction in separately disclosed items (2021: £1.1m loss; 2020:
£8.0m loss). Within separately disclosed items in H1 2021 the Group
recognised a profit on sale of the Paladin dive support vessel of £0.3m
(2020: nil) offset by amortisation of acquired intangible assets of £1.4m
(2020: £1.5m). Included in 2020 were impairment charges, restructuring costs
and acquisition costs of £6.5m (2021: nil).
Underlying operating profit excludes separately disclosed items, and at
£13.3m was £6.2m below prior year. In line with the improvement in revenue,
Q2 showed a much-improved profit performance compared to Q1. Underlying
operating profit margin was 5.7% for the period compared to 7.6% in H1 2020,
reflecting the reduced overall levels of profit. Encouragingly, the Group
achieved an underlying operating profit margin of 9% in Q2 2021.
Statutory profit before tax, profit after tax and earnings per share all
showed improvement over 2020. Statutory profit before tax increased by 14% to
£8.1m. Statutory profit after tax increased by £8.5m, which included a
benefit of £7.9m arising on the recognition of a deferred tax asset. This is
shown as a separately disclosed item. Statutory earnings per share increased
to 26.8 pence per share, up 170%, also reflecting the separately disclosed
deferred tax asset recognition.
Dividends
The Board is committed to reintroducing a sustainable and progressive dividend
policy at the appropriate time. Given our markets are still recovering from
Covid-19 and taking into account our current absolute levels of net debt and
the resulting leverage ratio, the Board has not declared an interim dividend
for 2021 (2020: 8.0 pence per share).
Environmental, Social and Governance
The Group continued to prioritise the health and safety of its employees in
the period. Additional Covid-19 safety measures have remained in place
throughout the first half, including quarantining, regular testing of
employees at all sites and the continuation of social distancing and hygiene
measures. The safety of our staff was of primary concern when terrorist
attacks hit Mozambique during the period and we were pleased to evacuate
everyone safely.
Through its stakeholder strategy, the Group continues to recognise the
importance of the contribution that employees, customers and suppliers, the
environment and local communities all make towards supporting shareholder
value. The first draft of the formal sustainability strategy will be published
with the Annual Report. To date we have completed an initial materiality
assessment and revamped the Sustainability Committee.
As a group of businesses that is closely affiliated with the energy
transition, the environmental elements of the sustainability strategy will be
prominent, underpinned by robust social and governance processes and
commitments. We continue to work towards meaningful environmental targets
through our commitment to the Science Based Targets Initiative, while
improving our reporting for the Carbon Disclosure Project and have joined the
Council for Inclusive Capitalism.
James Fisher continues to focus on diversity and inclusion. In the first half
of 2021, women represented 29% of our Board membership and 33% of our
Executive Committee.
Liquidity
Underlying net borrowings at 30 June 2021 was £178.7m, showing a marginal
increase of £3.7m compared to 31 December 2020 (£175.0m). On an IFRS16
basis, including the Group's operating lease liabilities, net debt has
increased from £198.1m at 31 December 2020 to £211.0m at 30 June 2021.
Revolving credit facilities totalling £130m have been refinanced in the
period on a three year term, with options to extend by up to two years. In
aggregate, the Group has £287.5m of committed facilities, of which £247.5m
is now secured through to at least 2024.
At 30 June 2021, the Group had headroom against its committed revolving credit
facilities of £117.0m (2020: £115.6m). The ratio of net debt (including
bonds and guarantees) to Ebitda was 2.9 times (31 December 2020: 2.8 times; 30
June 2020: 2.5 times). The covenant requirement at 30 June 2021 was 3.75
times, which reduces to 3.5 times at 31 December 2021.
Board changes
The Group has seen two changes to the Board during the period. Angus Cockburn
replaced Malcolm Paul as Chairman and Duncan Kennedy joined as Chief Financial
Officer, replacing Stuart Kilpatrick. The Board would like to express its
sincere thanks to both Malcolm and Stuart for their outstanding contributions
to the Group's strategy and growth over the course of the last decade.
Outlook
The Group is expecting performance to improve during the second half of the
year as our end markets recover from the disruption caused by the effects of
the global pandemic.
However, we experienced weaker than anticipated trading in Fendercare and
lower short-cycle order intake at JFD during the important summer period and
this, combined with project suspensions in Mozambique, lead the Board to now
expect underlying operating profit for 2021 to be around the same level as
that achieved in 2020.
Looking beyond 2021, forward-looking order books in our long-cycle businesses
are strengthening following high levels of tendering activity and contract
wins year-to-date which gives the Board confidence in the Group's future
prospects.
James Fisher's new strategy to deliver sustainable profitable growth is
progressing well. The Group is focused on capitalising on its leading market
positions within the marine, energy and defence markets and is well placed to
benefit from the market recovery and meet its mid-term financial targets.
Business review
Marine Support
H1 2021 H1 2020 change
Revenue (£m) 97.7 122.5 (20.2)%
Underlying operating profit (£m) 2.1 4.8 (56.3)%
Underlying operating margin 2.1% 3.9%
Return on capital employed 3.7% 4.4%
Revenue was 20% below prior year at £97.7m. The £24.8m revenue shortfall
resulted in a £2.7m reduction in underlying operating profit to £2.1m (2020:
£4.8m).
The Marine Support division has seen mixed results across its businesses. The
ship-to-ship transfer market has seen volumes well below prior year, and
although we believe that Fendercare has maintained its market share, H1
revenues were 39% below the record performance in H1 2020, when significant
volatility in the oil price led to the highest volumes of ship-to-ship
transfers that the business had ever experienced. The market recovery in
ship-to-ship transfers during 2021 has been slow and revenues in July and
August remained lower than anticipated.
The Marine Contracting and Digital & Data Services businesses are broadly
in line with last year, although the suspension of projects in Mozambique due
to an insurgency in the local area has adversely affected performance. We
expect to continue to benefit from this contract when the suspension is lifted
on the major LNG project. In the meantime, there are on-going dispute
resolution discussions with our clients to seek recovery of amounts
contractually due for work completed to date, and this could provide some
variability to 2021 performance.
There have been a number of contract wins in the period in the renewables
space, which is showing encouraging growth and continued high levels of
tenders. EDS, the provider of specialist high voltage cabling and related
services, delivered strong revenue and profit growth in the period and has a
strong order book for 2022 and beyond.
Specialist Technical
H1 2021 H1 2020 change
Revenue (£m) 67.8 65.7 3.2%
Underlying operating profit (£m) 5.6 7.5 (25.3)%
Underlying operating margin 8.3% 11.4%
Return on capital employed 11.2% 13.4%
Revenue increased by 3.2% in the period to £67.8m (2020: £65.7m). JFD, our
defence and diving equipment provider, is approaching significant milestones
in a number of major projects, including the final milestone on the 500m
saturation diving system and the delivery of a submarine rescue vessel. Recent
contract wins include a £20m, four-year contract with the UK Ministry of
Defence to provide life support services for the Astute class of submarines.
The business has a sales pipeline in excess of £400m across both its long and
short cycle business lines. However, order intake in the diving equipment and
services sector has been weaker than anticipated over recent months as
customers continue to delay spending decisions as a result of Covid-19.
JFN, our nuclear decommissioning business, has remained resilient. It has
progressed all of its major projects including the on-going decommissioning
work at Sellafield where it recently secured two new contracts. One being a
multi-million pound project for the mechanical and electrical design and
commissioning of the New Civil Nuclear Constabulary Operational Unit at
Sellafield and the other being the renewal of its contract for the provision
and management of ROVs targeted at the clean-up of legacy ponds on site. These
legacy ponds provide some of the most complex decommissioning challenges in
the world.
Underlying operating profit was £1.9m below H1 2020 at £5.6m, principally a
result of an increase in project-based equipment revenues within the JFN
projects, which carry lower margins.
Offshore Oil
H1 2021 H1 2020 change
Revenue (£m) 39.6 40.0 (1.0)%
Underlying operating profit (£m) 5.3 5.4 (1.8)%
Underlying operating margin 13.4% 13.1%
Return on capital employed 9.2% 8.6%
The Offshore Oil division performed well in the period, with revenue of
£39.6m broadly in line with 2020 and 4% higher at constant currency. This
reflects strong growth in both our Scantech and Fisher Offshore businesses,
partially offset by RMSpumptools, where the comparator period in 2020 saw the
completion of a number of projects that had been started prior to Covid-19
disruptions. The RMSpumptools order book going into the second half is robust
and in line with that of 2020 and ordering activity early in H2 has provided
the business with confidence for the second half.
The Scantech businesses saw strong demand for their air compressors,
principally because of increased usage in the generation of 'bubble curtains',
which reduce subsea noise around construction and protect marine life. Such
measures are legal requirements in most jurisdictions around the world and
represent an exciting mid-term growth opportunity for the Group. The combined
forward order books of the Scantech businesses, at approximately £16m, are
more than 40% higher than at this point in 2020.
Fisher Offshore saw a continuation of the strong demand for its specialist
cutting tools, which are used in the decommissioning of existing oil platforms
and wells, tendering for £31m of business in the period, which compares to
£26m for the whole of 2020. The Group further strengthened its customer
offering with the purchase of Subsea Engenuity during the period for a
consideration of up to £0.75m. Subsea Engenuity's innovative technology
significantly reduces risk in well abandonment operations and is expected to
be launched commercially in early 2022.
Tankships
H1 2021 H1 2020 change
Revenue (£m) 28.6 29.9 (4.3)%
Underlying operating profit (£m) 2.1 3.6 (41.7)%
Underlying operating margin 7.3% 12.0%
Return on capital employed 20.1% 24.3%
The Tankships division saw challenging trading conditions in Q1 as the UK was
placed back into lockdown. Following the gradual easing of restrictions in Q2,
we saw an improvement in demand and revenue ended the period only 4% below
2020 at £28.6m. Volumes are now approaching pre-pandemic levels.
Underlying operating profit was £1.5m below 2020 at £2.1m for the period,
which reflects both the largely fixed cost nature of the business and an
increase in operating costs due to Covid quarantining and enhanced safety
measures put in place as we continue to prioritise the safety and wellbeing of
our staff.
Cashflow and borrowings
Underlying net borrowings at 30 June 2021 was £178.7m, showing a marginal
increase of £3.7m compared to 31 December 2020 (£175.0m). On an IFRS16
basis, including the Group's operating lease liabilities, net debt increased
from £198.1m at 31 December 2020 to £211.0m at 30 June 2021.
As anticipated, the Group saw a working capital outflow during the period. A
number of projects across the Group have not yet met invoicing milestones,
resulting in an increase in accrued income of £17.1m in the period. Debtor
days, at 87, showed some improvement over H1 2020 and creditor days are in
line at 97 (30 June 2020: 98).
Capital expenditure was much reduced at £6.5m (2020: £11.8m) as the business
continues to prioritise its capital investments. The sale of the Paladin was
completed in the period and proceeds of $17.3m (£12.6m) were received prior
to the period end. Acquisition spend was lower at £0.4m (2020: £4.5m).
Tax and interest payments were broadly in line with prior year at £7.6m
(2020: £8.8m).
At 30 June 2021 the Group had headroom against its committed revolving credit
facilities of £117.0m (2020: £115.6m). The ratio of net debt (including
bonds and guarantees) to Ebitda was 2.9 times (31 December 2020: 2.8 times; 30
June 2020: 2.5 times). The covenant requirement at 30 June 2021 was 3.75
times, which reduces to 3.5 times at 31 December 2021.
Balance sheet
Non-current assets reduced from £389.6m at 31 December to £369.7m at 30 June
2021, due principally to a reduction in tangible fixed assets of £31.5m
offset by an increase in right-of-use assets of £8.3m.
Current assets increased from £302.5m at 31 December 2020 (restated - see
note 12) to £313.3m at 30 June 2021. This reflects an increase in receivables
of £20.8m, principally in accrued income as major long-term contracts work
towards invoicing milestones in the second half of the year. In addition,
£15.2m assets held for sale have been recognised at 30 June 2021 (refer to
note 13 for details), offset by lower cash at bank and in hand balances (see
note 12).
Current and non-current liabilities decreased by £21.0m in the period, from
£456.2m at 31 December 2020 (restated - see note 12) to £435.2m at 30 June
2021. The principal movement is a decrease in bank overdrafts (refer note 12),
offset by an increase of £8.2m in lease liabilities, which broadly matches
against the increase in right-of-use assets of £8.3m.
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
2020 Annual Report and Accounts on pages 43-48. The principal risks set out in
the 2020 Annual Report and Accounts were:
· Operational - project delivery, recruitment and retention of key
staff, health, safety and environment, contractual risk, cyber security and
pandemic risk;
· Strategic - climate change, operating in emerging markets; and
· Financial - foreign currency and interest rates.
The Board considers that the principal risks and uncertainties set out in the
2020 Annual Report and Accounts remain the same.
Directors' Responsibilities
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by the
European Union.
(b) The interim management report includes a fair review of the information
required by:
a. DTR 4.2.7R of the 'Disclosure and Transparency Rules', being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
b. DTR 4.2.8R of the 'Disclosure and Transparency Rules', being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during the period; and any changes in
the related party transactions described in the last annual report that could
do so.
Approved by the Board of Directors and signed on its behalf by:
E P
O'Lionaird
D Kennedy
Chief Executive
Officer
Chief Financial Officer
6 September 2021
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2021
Six months ended Six months ended Year
30 June 2021
30 June 2020
ended
31 December 2020
Note £m £m £m
Revenue 4 233.7 258.1 518.2
Cost of sales (177.6) (187.2) (423.8)
Gross profit 56.1 70.9 94.4
Administrative expenses (44.9) (60.1) (139.5)
Share of post-tax results of joint ventures 1.0 0.7 1.6
Operating profit/(loss) 4 12.2 11.5 (43.5)
Analysis of operating profit:
Underlying operating profit 13.3 19.5 40.5
Separately disclosed items (1.1) (8.0) (84.0)
Net finance expense 6 (4.1) (4.4) (9.0)
Profit/(loss) before taxation 8.1 7.1 (52.5)
Analysis of profit before tax:
Underlying profit before taxation 9.2 15.1 31.5
Separately disclosed items 5 (1.1) (8.0) (84.0)
Income tax 7 5.5 (2.0) (4.8)
Profit/(loss) for the period 13.6 5.1 (57.3)
Attributable to:
Owners of the Company 13.5 5.0 (57.5)
Non-controlling interests 0.1 0.1 0.2
13.6 5.1 (57.3)
Earnings/(loss) per share pence pence pence
Basic 8 26.8 9.9 (114.2)
Diluted 8 26.8 9.9 (114.2)
Underlying earnings per share
Basic 8 12.8 23.6 48.0
Diluted 8 12.8 23.6 47.9
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2021
Six months ended Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
Note £m £m £m
Profit/(loss) for the period 13.6 5.1 (57.3)
Items that will not be reclassified to the income statement
Actuarial gain/(loss) in defined benefit pension schemes 10 2.8 (0.4) (9.3)
Tax on items that will not be reclassified - 0.1 1.1
2.8 (0.3) (8.2)
Items that may be reclassified subsequently to the income statement
Exchange differences on foreign currency net investments (2.3) 1.8 (7.8)
Effective portion of changes in fair value of cash flow hedges (1.2) (3.6) 0.6
Effective portion of changes in fair value of cash flow hedges in joint 0.1 (0.3) (0.2)
ventures
Net change in fair value of cash flow hedges transferred to income statement (0.6) 0.6 (0.1)
Deferred tax on items that may be reclassified 0.1 0.7 1.1
(3.9) (0.8) (6.4)
Total comprehensive income for the period 12.5 4.0 (71.9)
Attributable to:
Owners of the Company 12.4 3.9 (72.0)
Non-controlling interests 0.1 0.1 0.1
12.5 4.0 (71.9)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2021
30 June 30 June 31 December
2021 2020 2020
Note £m £m £m
Non-current assets restated* restated*
Goodwill 11 165.8 182.8 166.5
Other intangible assets 18.2 25.6 20.1
Property, plant and equipment 126.7 208.2 158.2
Right-of-use assets 39.0 24.4 30.7
Investment in joint ventures 7.7 8.9 7.5
Other investments 1.4 1.4 1.4
Deferred tax assets 10.9 5.6 5.2
369.7 456.9 389.6
Current assets
Inventories 51.5 52.3 46.6
Trade and other receivables 183.6 201.2 162.8
Assets held for sale 13 15.2 - -
Cash and cash equivalents 12 63.0 70.1 93.1
313.3 323.6 302.5
Current liabilities
Trade and other payables (142.3) (173.6) (140.1)
Provisions for liabilities and charges (0.6) (0.9) -
Liabilities associated with assets held for sale 13 (1.7) - -
Current tax (4.8) (7.1) (7.6)
Borrowings (51.2) (57.5) (79.8)
Lease liabilities (8.9) (8.4) (7.2)
(209.5) (247.5) (234.7)
Net current assets 103.8 76.1 67.8
Total assets less current liabilities 473.5 533.0 457.4
Non-current liabilities
Other payables (3.3) (3.7) (3.6)
Provisions (1.4) - (1.6)
Retirement benefit obligations 10 (6.6) (5.2) (10.3)
Cumulative preference shares (0.1) (0.1) (0.1)
Borrowings (182.0) (182.8) (178.8)
Lease liabilities (31.8) (19.8) (25.3)
Deferred tax liabilities (0.5) (5.2) (1.8)
(225.7) (216.8) (221.5)
Net assets 247.8 316.2 235.9
Equity
Called up share capital 12.6 12.6 12.6
Share premium 26.8 26.6 26.7
Treasury shares (0.6) (0.3) (0.2)
Other reserves (20.5) (11.0) (16.5)
Retained earnings 228.7 287.4 212.6
Equity attributable to owners of the Company 247.0 315.3 235.2
Non-controlling interests 0.8 0.9 0.7
Total equity 247.8 316.2 235.9
* cash and cash equivalents and borrowings (current) have been restated for
the 2020 comparative periods to reflect a gross up of cash at bank and in hand
and overdraft balances (see note 12).
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2021
Share Share Retained Other Treasury Shareholders' Non-controlling Total
capital premium earnings reserves shares equity interests equity
£m £m £m £m £m £m £m £m
At 1 January 2021 12.6 26.7 212.6 (16.5) (0.2) 235.2 0.7 235.9
Profit for the year - - 13.5 - - 13.5 0.1 13.6
Other comprehensive income - - 2.8 (3.9) - (1.1) - (1.1)
Contributions by and distributions to owners:
Remeasurement of non-controlling interest put option - - - (0.1) - (0.1) - (0.1)
Share based payments - - 0.3 - - 0.3 - 0.3
Tax effect of share based payments - - 0.1 - - 0.1 - 0.1
Purchase of shares by ESOT - - - - (0.5) (0.5) - (0.5)
Notional purchase of own shares - - (0.5) - - (0.5) - (0.5)
Arising on the issue of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.1) - 0.1 - - -
At 30 June 2021 12.6 26.8 228.7 (20.5) (0.6) 247.0 0.8 247.8
Share Share Retained Other Treasury Shareholders' Non- controlling Total
capital premium earnings reserves shares equity interests equity
£m £m £m £m £m £m £m £m
At 1 January 2020 12.6 26.5 284.7 (10.6) - 313.2 0.8 314.0
Profit for the year - - 5.0 - - 5.0 0.1 5.1
Other comprehensive income - - (0.8) (0.3) - (1.1) - (1.1)
Contributions by and distributions to owners:
Remeasurement of non-controlling interest put option - - - (0.1) - (0.1) - (0.1)
Share based payments - - 0.2 - - 0.2 - 0.2
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 - - (0.8) - - (0.8) - (0.8)
Arising on the issue of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.6) - 0.6 - - -
At 30 June 2020 12.6 26.6 287.4 (11.0) (0.3) 315.3 0.9 316.2
Other reserve movements
Translation Hedging Put option
reserve reserve liability Total
Other reserves £m £m £m £m
At 1 January 2020 (7.8) (0.2) (2.6) (10.6)
Other comprehensive income (6.5) 0.7 - (5.8)
Remeasurement of non-controlling interest put option - - (0.1) (0.1)
At 31 December 2020 (14.3) 0.5 (2.7) (16.5)
Other comprehensive income (2.3) (1.6) - (3.9)
Remeasurement of non-controlling interest put option - - (0.1) (0.1)
At 30 June 2021 (16.6) (1.1) (2.8) (20.5)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2021
Six months ended Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
restated*
Note £m £m £m
Profit/(loss) before tax for the period 8.1 7.1 (52.5)
Adjustments to reconcile profit/(loss) before tax to net cash flows
Depreciation and amortisation 21.1 23.3 48.0
Separately disclosed items (excluding amortisation) (0.3) 6.5 81.1
Other non cash items 3.0 6.0 7.1
(Increase)/decrease in inventories (5.3) (3.4) 2.0
(Increase)/decrease in trade and other receivables (24.8) 14.5 30.9
Increase/(decrease) in trade and other payables 2.8 13.6 (13.4)
Defined benefit pension cash contributions less service cost (1.0) (1.2) (4.8)
Cash generated from operations 3.6 66.4 98.4
Cash outflow from separately disclosed items - (1.1) (3.9)
Income tax payments (4.5) (5.2) (7.9)
Cash flow (used in)/from operating activities (0.9) 60.1 86.6
Investing activities
Dividends from joint venture undertakings 0.7 0.6 1.8
Proceeds from the disposal of a subsidiary - - 1.3
Proceeds from the disposal of property, plant and equipment 14.3 0.6 2.6
Finance income 0.2 0.1 0.3
Acquisition of subsidiaries, net of cash acquired (0.4) (4.0) (7.9)
Investment in joint ventures and other investments - (0.5) (0.5)
Acquisition of property, plant and equipment (6.5) (11.8) (17.5)
Development expenditure (0.8) (1.5) (2.9)
Cash flows from/(used in) investing activities 7.5 (16.5) (22.8)
Financing activities
Proceeds from the issue of share capital 0.1 0.1 0.2
Finance costs (3.3) (3.7) (7.0)
Purchase of own shares by Employee Share Ownership Trust (0.5) (0.9) (0.9)
Notional purchase of own shares for LTIP vesting (0.5) (0.8) (1.0)
Capital element of lease repayments (6.6) (6.2) (13.0)
Proceeds from borrowings 10.5 43.9 34.3
Repayment of borrowings (7.9) (70.1) (64.5)
Dividends paid - - (4.0)
Dividend paid to non-controlling interest - - (0.2)
Cash flows used in financing activities (8.2) (37.7) (56.1)
Net decrease in cash and cash equivalents (1.6) 5.9 7.7
Cash and cash equivalents at beginning of period 13.5 7.5 7.5
Net foreign exchange differences - (0.6) (1.7)
Cash and cash equivalents at end of period 12 11.9 12.8 13.5
* Cash and cash equivalents restated for the period ended 30 June 2020.
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 2021 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, which have
been reviewed and not audited, have been prepared in accordance with
International Financial Reporting Standard (IFRS) IAS 34 "Interim Financial
Reporting" as adopted 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 2020 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 2020.
The comparative figures for the financial year ended 31
December 2020 are not the Group's statutory accounts for that financial year.
Those accounts which were prepared under International Financial Reporting
Standards (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 2020 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 (http://www.james-fisher.co.uk) .
The half year financial information is presented in Sterling
and all values are rounded to the nearest million pounds (£m) except where
otherwise indicated.
Going concern
In light of the Covid-19 global pandemic experienced in 2020
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 on-going risk to future financial performance.
Liquidity is monitored through daily balance reporting, quarterly forecasting
and monthly cashflow forecasting.
The Directors base case forecast reflected financial
performance in the year ended 31 December 2020 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 and covenants against facilities for the going concern
assessment period of the next 12 months from the date of this report.
Against these negative scenarios, which reduced operating profit by £10m in
2021 and £20m in 2022, adjusted projections showed no breach of covenants.
Additional sensitivities which reduced cash receipts by £10m in 2021 and
£20m in 2022 and delayed project delivery reducing profit by £10m in 2021
and £20m in 2022 and deferring debtor collection by £3m in 2021 and by £6m
in 2022 were also run separately in combination with the severe but plausible
downside and adjusted projections showed no breach of covenants and headroom
against committed facilities throughout the 12 month going concern assessment
period. Further controllable mitigating actions could also be taken in such
scenarios should it be required, including reducing capital expenditure,
reducing dividend payments and not carrying out any acquisitions.
The Directors are of the opinion that the Group has
sufficient financial resources to continue trading for at least 12 months from
the date of this report. Accordingly, the Directors believe it remains
appropriate to prepare the interim condensed financial statements on a going
concern basis.
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 £117.0m of undrawn committed facilities at
30 June 2021 (2020: £115.6m). During September, revolving credit facilities
totalling £130m have been refinanced on a three year term with options to
extend by up to two years.
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 2020.
2 Accounting estimates and judgements
The preparation of half year financial statements requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ materially from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those applied to the consolidated financial statements as at and
for the year ended 31 December 2020.
3 Alternative performance measures
The Group presents a number of alternative (non-Generally
Accepted Accounting Practice (non-GAAP)) performance measures which are not
defined within IFRS. These measures are presented to assist investors in
gaining a clear and balanced view of the underlying operational performance of
the Group and are consistent year on year with how business performance is
measured internally. The adjustments are separately disclosed (note 5) 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
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 2020
Six months ended Six months ended Year
30 June 30 June ended
31 December
£m £m £m
Operating profit/(loss) 12.2 11.5 (43.5)
Separately disclosed items before taxation 1.1 8.0 84.0
Underlying operating profit 13.3 19.5 40.5
Net finance expense (4.1) (4.4) (9.0)
Underlying profit before taxation 9.2 15.1 31.5
3.2 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total of
underlying profit before tax, less income tax, but excluding the tax impact on
separately disclosed items included in the calculation of underlying profit
less profit attributable to non-controlling interests, divided by the weighted
average number of ordinary shares in issue during the year. Underlying
earnings per share is set out in note 8.
3.3 Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use assets,
less cash and short-term deposits and after adding back borrowings. Average
capital employed is adjusted for the timing of businesses acquired and after
adding back cumulative amortisation of customer relationships. Segmental
ROCE is defined as the underlying operating profit, divided by average capital
employed. The key performance indicator, Group post-tax ROCE, is defined as
underlying operating profit, less notional tax, calculated by multiplying the
effective tax rate by the underlying operating profit, divided by average
capital employed.
2021 2020 2020
Six months ended Six months ended Year
30 June 30 June ended
31 December
£m £m £m
Net assets 247.8 316.2 235.9
Less right-of-use assets (39.0) (24.4) (30.7)
Plus net borrowings 211.0 198.5 198.1
Capital employed 419.8 490.3 403.3
Underlying operating profit 13.3 19.5 40.5
Notional tax at the effective tax rate (3.9) (4.1) (9.2)
9.4 15.4 31.3
Average capital employed 459.2 471.9 467.6
Return on average capital employed 5.4% 6.6% 6.7%
3.4 Cash conversion
Cash conversion is defined as the ratio of operating cash flow to
underlying operating profit. Operating cash flow comprises:
2021 2020 2020
Six months ended Six months ended Year
30 June 30 June ended
31 December
£m £m £m
Cash generated from operations 3.6 66.4 98.4
Dividends from joint venture undertakings 0.7 0.6 1.8
Capital element of lease repayments (6.6) (6.2) (13.0)
Other 1.0 0.1 0.5
Operating cash flow (1.3) 60.9 87.7
Underlying operating profit 13.3 19.5 40.5
Cash conversion (10)% 312% 217%
3.5 Underlying earnings before interest, tax, depreciation and
amortisation (Ebitda)
Underlying Ebitda is defined as the underlying operating profit
before interest, tax, depreciation and amortisation.
2021 2020 2020
Six months ended Six months ended Year
30 June 30 June ended
31 December
£m £m £m
Underlying operating profit 13.3 19.5 40.5
Depreciation and amortisation 21.1 23.3 48.0
Less: Deprecation on right-of-use assets (5.6) (5.3) (10.9)
Amortisation of acquired intangibles (note 5) (1.4) (1.5) (2.9)
Underlying Ebitda 27.4 36.0 74.7
3.6 Underlying dividend cover
Underlying dividend cover is the ratio of the underlying diluted
earnings per share to the dividend per share.
pence pence pence
Underlying earnings per share 12.8 23.6 47.9
Dividends per share - 8.0 8.0
Underlying dividend cover (times) - 3.0 6.0
3.7 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.
3.8 Underlying net borrowings
Underlying net borrowings is net borrowings as set out in note 12, excluding
right-of-use operating leases. The Group's banking arrangements are based on
underlying net borrowings.
2021 2020 2020
Six months ended 30 June Six months ended 30 June Year ended
31 December
£m £m £m
Net borrowings (note 12) 211.0 198.5 198.1
Less: right-of-use operating leases (32.3) (25.4) (23.1)
178.7 173.1 175.0
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 2020.
The Board assesses the performance of the segments based on underlying
operating profit. The Board believes that such information is the most
relevant in evaluating the results of certain segments relative to other
entities which operate within these industries. Inter-segmental sales are made
using prices determined on an arms-length basis. Sector assets exclude cash,
short-term deposits and corporate assets that cannot reasonably be allocated
to operating segments. Sector liabilities exclude borrowings, retirement
benefit obligations and corporate liabilities that cannot reasonably be
allocated to operating segments.
Six months ended 30 June 2021
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
£m £m £m £m £m £m
Revenue
Segmental revenue reported
- point in time 81.7 22.9 39.7 - - 144.3
- over time 16.1 45.4 - 28.6 - 90.1
Inter-segmental sales (0.1) (0.5) (0.1) - - (0.7)
97.7 67.8 39.6 28.6 - 233.7
Underlying operating profit 2.1 5.6 5.3 2.1 (1.8) 13.3
Separately disclosed items (0.7) - (0.4) - - (1.1)
Operating profit 1.4 5.6 4.9 2.1 (1.8) 12.2
Net finance expense (4.1)
Profit before tax 8.1
Income tax 5.5
Profit for the period 13.6
Assets & liabilities
Segmental assets 238.1 165.7 141.2 65.9 64.4 675.3
Investment in joint ventures 2.1 3.3 2.3 - - 7.7
Total assets 240.2 169.0 143.5 65.9 64.4 683.0
Segmental liabilities (77.3) (62.4) (27.6) (31.7) (236.2) (435.2)
162.9 106.6 115.9 34.2 (171.8) 247.8
Other segmental information
Capital expenditure 2.3 0.8 2.3 0.9 0.2 6.5
Depreciation and amortisation 6.7 3.4 5.8 5.1 0.1 21.1
Six months ended 30 June 2020
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
£m £m £m £m £m £m
Revenue
Segmental revenue reported
- point in time 106.0 18.7 40.2 - - 164.9
- over time 16.6 47.5 - 29.9 - 94.0
Inter-segmental sales (0.1) (0.5) (0.2) - - (0.8)
122.5 65.7 40.0 29.9 - 258.1
Underlying operating profit reported 4.8 7.5 5.4 3.6 (1.8) 19.5
Separately disclosed items (4.3) (1.1) (2.6) - - (8.0)
Operating profit 0.5 6.4 2.8 3.6 (1.8) 11.5
Net finance expense (4.4)
Profit before tax 7.1
Income tax (2.0)
Profit for the period 5.1
Assets & liabilities
Segmental assets 320.7 163.5 153.4 58.6 75.4 771.6
Investment in joint ventures 3.5 3.0 2.4 - - 8.9
Total assets 324.2 166.5 155.8 58.6 75.4 780.5
Segmental liabilities (101.5) (55.6) (30.4) (28.8) (248.0) (464.3)
222.7 110.9 125.4 29.8 (172.6) 316.2
Other segment information
Capital expenditure 4.9 1.3 3.2 2.4 - 11.8
Depreciation and amortisation 8.0 3.3 6.5 5.3 0.2 23.3
Year ended 31 December 2020
Marine Specialist Offshore
Support Technical Oil Tankships Corporate Total
£m £m £m £m £m £m
Revenue
Segmental revenue reported
- 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)
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 & liabilities
Segmental assets 246.7 156.0 139.4 53.5 89.0 684.6
Investment in joint ventures 2.1 3.0 2.4 - - 7.5
Total assets 248.8 159.0 141.8 53.5 89.0 692.1
Segmental liabilities (90.5) (57.6) (24.9) (22.2) (261.0) (456.2)
158.3 101.4 116.9 31.3 (172.0) 235.9
Other segment information
Capital expenditure 7.1 1.9 5.4 3.1 - 17.5
Depreciation and amortisation 17.8 6.7 12.7 10.5 0.3 48.0
5 Separately disclosed items
Certain items are disclosed separately in the financial statements to provide
a clearer understanding of the underlying financial performance of the Group,
referred to in note 3. They are items that are non-recurring and significant
by virtue of their size and include acquisition related income or charges,
costs of material litigation, restructure or material impairment and related
items. Separately disclosed items comprise:
2021 2020 2020
Six months ended Six months ended Year
ended
30 June 30 June 31 December
£m £m £m
Acquisition related income and (expense):
Costs incurred on acquiring businesses - (0.2) (1.0)
Amortisation of acquired intangibles (1.4) (1.5) (2.9)
(1.4) (1.7) (3.9)
Marine Support restructure - (1.5) (3.9)
Disposal of businesses - - (3.5)
Disposal of dive support vessel 0.3 - -
Impairment charges - (4.8) (72.7)
Separately disclosed items before taxation (1.1) (8.0) (84.0)
Taxation 8.2 1.1 2.4
Separately disclosed items after taxation 7.1 (6.9) (81.6)
During the six months ended 30 June 2021, the Group has recognised a gain of
£0.3m on disposal of one of its dive support vessels, the Paladin. The
vessel had operated in the Marine Support division. 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.
During 2020, following the impact of Covid-19 combined with a sharp fall in
energy prices, project work with Marine Support sharply declined and the Group
commenced a material restructure of the division. A charge of £1.5m was
recognised at June 2020 and £3.9m at December 2020 in respect of this. There
has been no equivalent charge in 2021.
6 Net finance expense
2021 2020 2020
Six months ended Six months ended Year ended
30 June 30 June 31 December
£m £m £m
Finance income:
Interest receivable on short-term deposits 0.2 0.1 0.2
Finance expense:
Interest payable on bank loans and overdrafts (3.2) (3.4) (7.2)
Net interest on pension obligations (0.1) (0.2) (0.1)
Unwind of discount on right-of-use lease liability (1.0) (0.8) (1.8)
Unwind of discount on contingent consideration - (0.1) (0.1)
(4.3) (4.5) (9.2)
Net finance expense (4.1) (4.4) (9.0)
7 Taxation
The Group's effective rate on profit before income tax is (67.3)% (30 June
2020: 28.2%, 31 December 2020: 9.1%) which includes an exceptional tax credit
of £7.9m as detailed in note 5. The effective income tax rate on underlying
profit before income tax, based on an estimated rate for the year ending 31
December 2021, is 29.3% (30 June 2020: 20.7%, 31 December 2020: 22.8%). This
is based on the estimated effective tax rate for the year to 31 December 2021.
Of the total tax charge, £1.3m relates to overseas businesses (30 June 2020:
£2.0m). Taxation on profit has been estimated based on rates of taxation
applied to the profits forecast for the full year.
8 Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the year, after excluding 54,571 (June
2020: 9,227, December 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 ordinary equity holders of the Company by the weighted average
number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
At 30 June 2021, 515,463 options (June 2020: 139,506, December 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
30 June 30 June 31 December 2020
2021 2020
Number of Number of Number of
shares shares shares
For basic earnings per ordinary share 50,350,082 50,332,654 50,342,732
Exercise of share options and LTIPs 17,692 107,576 85,973
For diluted earnings per ordinary share 50,367,774 50,440,230 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 3).
2021 2020 2020
Six months ended Six months ended Year ended
30 June 30 June 31 December
£m £m £m
Profit/(loss) attributable to owners of the Company 13.5 5.0 (57.5)
Separately disclosed items 1.1 8.0 84.0
Tax on separately disclosed items (8.2) (1.1) (2.4)
Underlying profit attributable to owners of the Company 6.4 11.9 24.1
Earnings per share pence pence pence
Basic earnings per share 26.8 9.9 (114.2)
Diluted earnings per share 26.8 9.9 (114.2)
Underlying basic earnings per share 12.8 23.6 48.0
Underlying diluted earnings per share 12.8 23.6 47.9
9 Interim dividend
No interim dividend is proposed in respect of the period
ended 30 June 2021 (2020: 8.0p).
10 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
2021 2020 2020
Six months ended Six months ended Year ended
30 June 30 June 31 December
£m £m £m
Net obligation as at 1 January (10.3) (5.8) (5.8)
Expense recognised in the income statement (0.1) (0.2) (0.2)
Contributions paid to scheme 1.0 1.2 5.0
Remeasurement gains and losses 2.8 (0.4) (9.3)
At period end (6.6) (5.2) (10.3)
The Group's net liabilities in respect of its pension schemes were as follows:
2021 2020 2020
Six months ended Six months ended Year
ended
30 June 30 June 31 December
£m £m £m
Shore Staff (5.3) (0.3) (8.8)
Merchant Navy Officers Pension Fund (1.1) (3.2) (1.3)
Merchant Navy Ratings Pension Fund (0.2) (1.7) (0.2)
(6.6) (5.2) (10.3)
The principal assumptions in respect of these liabilities are disclosed in the
December 2020 Annual Report. The Group has not obtained an interim valuation
for the period ended 30 June 2021. In the first half of 2021, the Group paid
contributions to defined benefit schemes of £1.0m (June 2020: £1.2m).
11 Goodwill
Movements during the period in the Group's goodwill are set
out below:
2021 2020 2020
Six months Six months ended Year
ended ended
30 June 30 June 31 December
£m £m £m
At 1 January 166.5 185.5 185.5
Impairment - - (17.0)
Exchange differences (0.7) (2.7) (2.0)
At period end 165.8 182.8 166.5
At the half year, the results of the impairment tests carried out in respect
of the year ended 31 December 2020, were reconsidered based on the Group's
trading performance and revised outlooks.
The recoverable amount of the cash generating units (CGU's) has been assessed
based on value in use calculations using cash projections based on 5-year
strategic plans which take into account the impact of climate change and are
approved by the Board. For all CGU's a terminal value of cash flows beyond
that date have been calculated at a growth rate in line with management's
long-term expectations for the relevant market, using a growth rate of 0.6%.
The key assumptions used in the value in use calculations include gross
margin, discount rate, inflation of overheads and payroll and growth rates.
Sensitivity to impairment
The Directors have carried out sensitivity analysis to determine the impact on
the carrying value of goodwill.
Sensitivities carried out across all CGU's included increasing the discount
rate by 2.0% and reducing the terminal growth to zero and reducing operating
profit by 25.0%. In all of the scenarios analysed headroom remained
positive.
12 Reconciliation of net borrowings
1 January Cash Other Exchange 30 June
2021 flow non-cash movement 2021
£m £m £m £m £m
Cash and cash equivalents 13.5 (1.6) - - 11.9
Debt due after 1 year (178.9) (2.7) (0.5) - (182.1)
Debt due within 1 year (0.2) 0.1 - - (0.1)
(179.1) (2.6) (0.5) - (182.2)
Lease liabilities (32.5) 6.6 (15.0) 0.2 (40.7)
Net borrowings (198.1) 2.4 (15.5) 0.2 (211.0)
1 January Cash Other Exchange 30 June
2020 flow non-cash movement 2020
*Restated
£m £m £m £m £m
Cash and cash equivalents 7.5 5.9 - (0.6) 12.8
Debt due after 1 year (207.4) 26.1 (0.1) (1.5) (182.9)
Debt due within 1 year (0.3) 0.1 - - (0.2)
(207.7) 26.2 (0.1) (1.5) (183.1)
Lease liabilities (30.2) 6.2 (3.8) (0.4) (28.2)
Net borrowings (230.4) 38.3 (3.9) (2.5) (198.5)
1 January Cash Other Exchange 31 December
2020 flow non-cash movement 2020
£m £m £m £m £m
Cash and cash equivalents 7.5 7.7 - (1.7) 13.5
Debt due after 1 year (207.4) 30.1 (0.7) (0.9) (178.9)
Debt due within 1 year (0.3) 0.1 - - (0.2)
(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)
*Cash and cash equivalents restated for the period ended 30 June 2020 to
include bank overdrafts repayable on demand.
Cash and cash equivalents comprise:
2021 2020 2020
As at As at Year ended
30 June 30 June 31 December
Restated Restated
£m £m £m
Cash at bank and in hand 63.0 70.1 93.1
Overdrafts (51.1) (57.3) (79.6)
At period end 11.9 12.8 13.5
The Group operates a notional pooling and net overdraft
facility whereby cash and overdraft balances held with the same bank have a
legal right of offset. Where there is no intention to settle amounts net,
IAS 32 requires gross balance sheet presentation to separate overdrafts and
cash balances. The Group has restated both the cash at bank and in hand and
overdraft balances for 2020 to show these amounts gross.
This adjustment has no impact on the Group's prior year net
profit or loss, net assets or cash flow statements.
The prior periods have been restated for this adjustment as
follows:
As
Restated
2020 2020
As at As at
30 June Adjustment 30 June
£m £m £m
Cash at bank and in hand 20.8 49.3 70.1
Overdrafts (8.0) (49.3) (57.3)
12.8 - 12.8
As
Restated
2020 2020
Year ended Year ended
31 December Adjustment 31 December
£m £m £m
Cash at bank and in hand 23.9 69.2 93.1
Overdrafts (10.4) (69.2) (79.6)
13.5 - 13.5
13 Assets held for sale
In June 2021, management agreed a plan to sell the dive
support vessel known as the Swordfish within the Marine Support division and
consequently £10.5m relating to vessels has been reclassified from property,
plant and equipment.
In May 2021, management agreed to dispose of certain non-core
businesses within the Marine Support division. The disposal group comprises
£4.7m of assets and £1.7m of liabilities.
Both disposals are expected to complete by the end of 2021.
14 Commitments and contingencies
Capital commitments at 30 June 2021 were £nil (2020: £0.9m;
31 December: £nil).
Contingent liabilities
(a) In the ordinary course of the Company's business, counter indemnities
have been given to banks in respect of custom bonds, foreign exchange
commitments and bank guarantees.
(b) A Group VAT registration is operated by the Company and six Group
undertakings in respect of which the Company is jointly and severally liable
for all amounts due to HM Revenue & Customs under the arrangement.
(c) A guarantee has been issued by the Group and Company to charter parties
in respect of obligations of a subsidiary, James Fisher Everard Limited, in
respect of charters relating to nine vessels. The charters expire between
2021 and 2024.
(d) Subsidiaries of the Group have issued performance and payment guarantees
to third parties with a total value of £38.4m (June 2020: £81.3m, December
2020: £48.2m).
(e) The Group is liable for further contributions in the future to the MNOPF
and MNRPF if additional actuarial deficits arise or if other employers liable
for contributions are not able to pay their share. The Group and Company
remains jointly and severally liable for any future shortfall in recovery of
the MNOPF deficit.
(f) The Group has given an unlimited guarantee to the Singapore Navy in
respect of the performance of First Response Marine Pte Ltd, its Singapore
joint venture, in relation to the provision of submarine rescue and related
activities.
(g) In the normal course of business, the Company and certain subsidiaries
have given parental and subsidiary guarantees in support of loan and banking
arrangements.
(h) The Company and its subsidiaries may be parties to legal proceedings and
claims which arise in the ordinary course of business, and can be material in
value. Disclosure of contingent liabilities or appropriate provision has been
made in these accounts where, in the opinion of the Directors, liabilities may
materialise. Other than provisions made against certain receivables and
claims, described in note 33 (b) estimates of the last filed annual report,
there are no other significant provisions and no individually significant
contingent liabilities that required specific disclosure.
15 Related parties
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 Annual Report for the year
ended 31 December 2020.
Independent review report to James Fisher and Sons plc
Conclusion
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 2021 which comprises condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated cash flow statement,
the condensed consolidated statement of changes in equity and the related
explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2021 is not prepared, in all
material respects, in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
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.
We read the other information contained in the half-yearly financial report
and consider whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
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 company are
prepared in accordance with International Financial Reporting Standards as
adopted by the EU. The directors are responsible for preparing the condensed
set of financial statements included in the half-yearly financial report in
accordance with IAS 34 as adopted by the EU.
The annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards as adopted by the EU. The
directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted 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.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Mike Barradell
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peters Square
Manchester
M2 3AE
6 September 2021
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