REG - Fisher (James) - Half year results
10/09/2024 07:00
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RNS Number : 5041D Fisher (James) & Sons plc 10 September 2024
James Fisher and Sons plc
Half year results for the six months ended 30 June 2024
10 September 2024
James Fisher and Sons plc (FSJ.L) ("James Fisher", "the Group", "the
Company"), the leading marine service provider, announces its results for the
six months ended 30 June 2024 ('the Period', "1H 2024").
Continued progress on the turn-around strategy and financial strengthening
• Underlying performance in the Period in line with expectations
• Significant value realised from sale of non-core business and assets, with
aggregate cash proceeds before transaction costs of c.£100m to be realised in
2024 from sale of RMSpumptools (£82.8m), Martek (£10.6m) and remaining
Subtech Europe assets (£7.1m)
• Group refinancing expected to be completed in due course, on more favourable
terms
• Targeted investment in high value growth areas across Divisions
• Expertise strengthening, with continued focus on cash management, pooling of
resources and other self-help measures
• Positive market fundamentals support medium term growth opportunities across
all Divisions
• The Company is making continued progress on the business turn-around and the
outlook for the full year remains in line with market expectations
Underlying results(1) Reported results
Six months ended Six months ended
Continuing operations 30.06.24 30.06.23 Change 30.06.24 30.06.23 Change
Revenue (£m) 221.5 252.0 (12.1%) 221.5 252.0 (12.1%)
Operating profit (£m) 16.8 14.0 20.0% 12.7 3.2 296.9%
Profit/(loss) before tax (£m) 4.3 6.4 (32.8%) 0.2 (4.4) n/m
Profit/(loss) for the period (£m) 3.0 (1.7) n/m (1.0) (9.6) 89.6%
Operating margin 7.6% 5.6% 200 bps 5.7% 1.3% 440 bps
Return on capital employed 7.5% 4.7% 280 bps n/a n/a n/a
Net debt - covenant basis 144.8 154.5 6.2% n/a n/a n/a
Earnings/(loss) per share 6.4 21.5 (70.2%) (1.7) (6.3) 73.0%
Financial highlights
• Revenue down 12.1% to £221.5m driven by a 17.8% decline in the Energy
Division, predominantly due to the closure of IRM activities in December 2023.
Excluding the impact of Subtech Europe and Swordfish (diving support vessel),
revenue was flat
• Underlying operating profit up 20.0% to £16.8m which included a £3.0m gain
on the sale of 'Life of Field' rental assets and also reflects the impact of
the underperformance of Subtech Europe in 1H 2023
• 200 bps improvement in operating margin (included RMSpumptools) to 7.6%
reflecting the benefit of the removal of Subtech Europe's underperformance in
1H 2023. Excluding RMSpumptools, operating margin was 5.1% in 1H 2024
• 280 bps improvement in ROCE to 7.5% reflecting our focus on increasing
underlying profitability and capital discipline
• Reported profit before tax of £0.2m reflecting net finance costs of £12.5m
and refinancing costs of £2.5m
• Net debt (for covenant purposes) at £144.8m, with Net Debt : EBITDA at 2.6x,
before contribution from RMSpumptools and Martek sale proceeds reduces net
debt to c.£65m in 2H 2024
Strategic highlights
• Generally supportive market backdrop in the Period, with good performance from
Energy well services, Maritime Transport tankships and Defence submarine
rescue and platforms
• Continued streamlining of the portfolio with year end net debt expected to be
significantly reduced, towards our communicated Net Debt : EBITDA leverage
range of 1.0 - 1.5x
• Targeted capital investment to support organic growth and returns in high
value air compressors and bubble curtain technology, and fleet replacement
programme
• Strengthening of Executive Committee now complete, including appointments of
Chief Human Resources Officer and Head of Operations
• Continued focus on improving cash management and productivity efficiencies
• Focus on managing underperforming businesses
Jean Vernet, Chief Executive Officer, commented:
"We have made important strategic progress on our business turn-around this
year, significantly deleveraging our balance sheet through the sale of
non-core assets, to provide a stronger financial foundation for growth.
With the full Executive Committee now in place, we are committed to delivering
on our Company priorities and I am particularly pleased to see progress on our
financial foundations. We are driving a step change in our capital allocation
and discipline, targeting investment in high value markets that will deliver
our financial targets.
Our focus on strengthening the supply chain will drive greater efficiency and
operational excellence. This will complement a broader company self-help
programme launched in June 2024 and our continued focus on underperforming
businesses.
We will continue to prioritise Exceptional Safety across all our operations by
investing in our talent development, training and employee engagement.
Combined, this will develop a long-term safety culture together as One James
Fisher.
As we enter the second half, trading in July and August was in line with
expectations and the Group's full year outlook remains unchanged.
Across all three Divisions we continue to operate in supportive end markets,
with a long-term customer base that is evolving for the future. This provides
the framework for continued delivery and through our growth pillars of people,
innovation and targeted geographical growth, we will drive the second phase of
our business turn-around."
Results presentation: A webcast presentation for investors and analysts will
be held on 10 September 2024 at 09:00 am (UK time). The presentation will be
webcast live and will be available on demand at www.james-fisher.com. A
transcript of the presentation and Q&A will also be made available on our
website.
For further information:
James Fisher & Sons plc Jean Vernet Chief Executive Officer 020 7614 9503
Karen Hayzen-Smith Chief Financial Officer
FTI Consulting Richard Mountain 020 3727 1340
Susanne Yule
1 The Group uses a number of alternative (non-Generally Accepted Accounting
Practice (non-GAAP)) performance measures (APMs) which are not defined within
IFRS. The APMs should be considered in addition to and not as a substitute for
or superior to the information presented in accordance with IFRS, as APMs may
not be directly comparable with similar measures used by other companies. The
APMs are described more fully and reconciled to GAAP performance measures in
Note 2 of the Condensed Consolidated Financial Statements.
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.
Chief Executive's statement
Strategy update
James Fisher is halfway through its turn-around programme to build a stronger,
more sustainable business focused on improved operational and financial
performance. Delivered through the One James Fisher strategy to 'focus,
simplify and deliver', the first half of 2024 has seen the Group take further
actions which will significantly strengthen its financial position, simplify
the business portfolio further and focus investment on high value and growth
areas.
The sale of non-core businesses and assets will generate aggregate cash
proceeds of c.£100m to be realised in 2024 from the sale of RMSpumptools
(£82.8m), Martek (£10.6m) and remaining Subtech Europe assets (£7.1m), and
will reduce the Group's leverage towards our target range of 1.0-1.5x Net Debt
: EBITDA. The Company's focus remains centred on increasing efficiency while
reducing cost, through standardisation, resource sharing, and cash and working
capital management. In combination, this will accelerate sustainable recovery
for the Group and provide the right platform to refinance our Group facilities
on more favourable terms which will be completed in due course.
To align James Fisher for growth, the Group is targeting capital investment in
key areas across Energy and Maritime Transport, including new air compressors
and bubble curtains for deployment in the global energy industry. We have also
invested in four dual-fuel sub-intermediate tankers as part of our fleet
replacement programme that will service the ports of Northwest Europe. These
investments also align with the Group's sustainability strategy, to
decarbonise its operations and transition to net zero by 2050. Further new
product development is underway across all Divisions, with some due to market
in 2025.
The Company is making continued progress on the business turn-around and the
outlook for the full year remains in line with market expectations.
Market backdrop and business highlights
With a continued backdrop of geopolitical instability and heightened focus on
security of energy supply, James Fisher's end markets remained supportive.
Within the Energy Division, demand for generation-related services, including
artificial lift, compressors and bubble curtains was strong, while the market
for decommissioning continues to be challenging. In Defence, the requirement
for subsea and special operations capabilities is accelerating in core
markets, with particular interest in submarine rescue and special forces
platforms. Maritime Transport saw stable long-term demand for its tankship
fleet, while LNG ship-to-ship operations remained lower year-on-year, due to
slow market conditions.
Energy
The Energy Division provides safe, sustainable technologies and services
across two core markets: energy services and renewables. 1H 2024 highlights
include:
• Continued strong demand for well services, intervention and artificial lift
well services
• Key contract awards for bubble curtains, inspection repair and maintenance,
and offshore wind services, in North America, Brazil and Europe,
respectively
• Targeted capital investment in high value growth areas, including air
compressors and bubble curtains
• Continued challenging decommissioning market, with business turn-around plan
in place
• Broader Division reorganisation under way to right size support costs, pool
resources and increase efficiencies
Defence
The Defence Division provides underwater systems and life support capabilities
for the defence and commercial diving markets. 1H 2024 highlights include:
• Strong base in existing home markets, with growth in the US reflecting demand
for special forces platforms
• Demand for additional submarine rescue services with a long-term customer
• Continued solid performance from commercial and defence diving
• New strategy and senior leadership team in place, with encouraging pipeline to
be realised over the next two years
Maritime Transport
Maritime Transport is a leading provider of targeted coastal shipping and
global oil and natural gas ship-to-ship (STS) transfer services. 1H 2024
highlights include:
• Robust performance from Tankships with high utilisation across the fleet
• Fleet replacement programme under way with four dual-fuel sub-intermediate
tankers due from early 2026
• Ship-to-ship revenue lower year-on-year due to high LNG winter inventories and
poor weather in Brazil, both limiting operations in 1H 2024
• Strong profit in Cattedown Wharves
Progress on the business turn-around strategy
The Group's One James Fisher 'Business Excellence' programme is now embedded,
enabling the business to deliver the initial foundation work for its
turn-around programme. In 2024, the Company launched five unified objectives
that prioritise safety, integrate the supply chain, improve legal, compliance
and financial controls, build employee engagement and deliver a pipeline of
talent that is critical to the business' long-term growth. Key achievements
in 1H 2024 include:
• Exceptional Safety - implemented a Company-wide training platform and
reporting tool, with 89% of employees now trained on the Company's 'Life
Saving Rules'. The Group continues to see a mixed safety performance and is
leading a global stand-down for safety in 2H 2024 focused on driving cultural
change across international operations.
• Financial Foundations - alongside deleveraging the balance sheet, the Group
has strengthened its foundations through a combination of improvements to its
financial, legal and compliance functions. An end-to-end review of Group
policies and procedures is on schedule to be completed by the end of 2024. The
Investment Committee continues to ensure that we allocate capital in a
disciplined way, that aligns with the Group's strategic financial targets for
underlying operating profit (10%) and return on capital employed (15%). We
have clear path forward to meet our underlying operating profit margin target
of 10% through the following four key set of actions: self-help, focus on
business performance, defence rebound and supply chain initiatives.
• Pipeline of Talent - a new Chief Human Resources Officer was appointed in 2Q
2024 and is leading key programmes to attract and retain the right talent.
This includes a comprehensive job architecture programme that will build a
diverse and geographically mobile workforce. This will allow visibility on
career pathing and will be measured through the Group's attrition and gender
diversity measures reported at year end.
• Employee engagement - this remains key to enabling the business change
programme, with the Company's annual survey taking place in November 2024. In
1H 2024 the Group focused on engaging with employees at Group and Divisional
level, with 2H 2024 plans to strengthen senior line management training and
change management support.
• Supply Chain - following the appointment of a new Head of Operations in 1Q
2024, new initiatives are under way, including the launch of central
procurement for indirect services that will strengthen the Group's supply
chain, reduce cost and increase efficiency.
These priorities are underpinned by three Division-led pilots that will unlock
key areas of opportunity, including commercial excellence, new product
development and carbon reduction. This will prepare the Group for long-term
strategic growth, aligned to its core customer markets.
Environmental, Social and Governance
The Group published its second Annual Sustainability Report in May 2024,
outlining progress made on its Sustainability strategy, which is delivered
through three key focus areas - People, Planet and Partnerships.
Gender diversity has improved at the most senior levels of the Group. Women
now represent 50% of the Board and 40% of the Executive Committee, increasing
from 38% and 29% respectively, year-on-year.
The Group also published its Scope 1 and 2 greenhouse gas ("GHG") emissions
reductions targets, aligned to achieving net zero by 2050. The Maritime
Transport Division has a long-term, tankship fleet replacement programme under
way that will form the backbone of the Group's carbon emissions pathway. The
Energy Division delivered its first Life Cycle Assessment to inform its
product line emissions reduction programme.
Work to progress the Scope 3 GHG emissions reduction targets is underway,
including a supply chain mapping exercise with the Group's top 60
suppliers. A New Product Development process was also launched in early 2024
and we will partner with customers to understand their future technology
needs.
Board changes
On 1 March 2024, the Board appointed Shian Jastram as an Independent
Non-Executive Director and member of the Audit Committee, Remuneration
Committee and Nominations Committee. Shian has worked in a variety of
leadership positions at Ørsted, one of the world's leading renewable energy
companies, bringing a wealth of strategic and technical expertise to the
Board.
Summary and outlook
The Group's 1H 2024 underlying performance was in line with expectations, led
by good performances in Well Services, tankships and submarine rescue
platforms. Overall, market conditions remain generally supportive, alongside
an attractive long-term customer base that provides the framework for
continued delivery. As we enter the second half, trading in July and August
was in line with expectations and the Group's full year outlook remains
unchanged.
Key strategic progress was made to significantly deleverage the balance sheet
towards our target range of 1.0 - 1.5x Net Debt: EBITDA, creating a more
sustainable financial platform for future growth. We expect the Group
refinancing to be completed on more favourable terms in due course.
The full Executive Committee is now in place, driving progress on the
Company's 2024 business priorities into 2H 2024. Future growth remains centred
on targeted investment in high value growth areas, including air compressors,
bubble curtains and tankships. The launch of a new product development process
earlier this year will drive long-term growth across all Divisions, from 2025
onwards.
While the geopolitical and economic climate remains uncertain, the Board
remains committed to delivering the second stage of the Group's business
turn-around strategy.
Jean Vernet
Chief Executive Officer
A summary of the Group's performance from continuing operations is set out
below
Underlying results(1) Reported results
Six months ended Six months ended
Continuing operations 30.06.24 30.06.23 Change 30.06.24 30.06.23 Change
Revenue (£m) 221.5 252.0 (12.1%) 221.5 252.0 (12.1%)
Operating profit (£m) 16.8 14.0 20.0% 12.7 3.2 296.9%
Profit/(loss) before tax (£m) 4.3 6.4 (32.8%) 0.2 (4.4) n/m
Profit/(loss) for the period (£m) 3.0 (1.7) 276.5% (1.0) (9.6) 89.6%
Operating margin 7.6% 5.6% 200 bps 5.7% 1.3% 430 bps
Return on capital employed 7.5% 4.7% 280 bps n/a n/a n/a
Net debt - covenant basis 144.8 154.5 6.2% n/a n/a n/a
Earnings/(loss) per share 6.4 21.5 (70.2%) (1.7) (6.3) 73.0%
1 The Group uses a number of alternative (non-Generally Accepted Accounting
Practice ("non-GAAP")) performance measures ("APMs") which are not defined
within International Financial Reporting Standards ("IFRS"). The APMs should
be considered in addition to and not as a substitute for or superior to the
information presented in accordance with IFRS, as APMs may not be directly
comparable with similar measures used by other companies. The APMs are
described more fully and reconciled to GAAP performance measures in Note 2 of
the Condensed Consolidated Financial Statements
Reported results from continuing operations
The Group generated revenue of £221.5m in 1H 2024, a decrease of 12.1%
compared to £252.0m in 1H 2023 largely due to the closure of Subtech Europe
in December 2023. Energy had a slower start to 2024 than anticipated due to
contract phasing in Mozambique for the development of a new LNG plant which
will now run into 2025, rather than finishing in December 2024. Although
Tankships in Maritime Transport performed well, Fendercare was impacted by low
levels of LNG ship-to-ship activity as global stocks remain high. Defence
revenues were flat.
Gross margin increased to 29.8% from 26.0% in 1H 2023 and 27.4% for FY23.
Margin improvement continues to be an area of focus for the Group.
The Group made a reported operating profit of £12.7m, an increase of £9.5m
over 1H 2023. The improvement has been driven by a reduction in net adjusting
items of £6.7m1 and the impact of the Group's focus on higher margin
activity.
Reported profit before tax was £0.2m (1H 2023: loss of £4.4m). The increase
in profit before tax was driven by the reported operating profit performance
noted above offset by an increase in net finance expense. The increase in net
finance expense was the result of increased interest rates and higher
amortisation of financing fees arising from the refinancing undertaken in
2023. There was also an increase due to the unwinding of discount on lease
liabilities due to the Group entering into and extending several vessel and
office leases during 2023.
Reported loss per share from continuing activities was 1.7 pence compared to a
loss of 6.3 pence in 1H 2023 reflecting the improved operating profit
performance and decrease in adjusting items.
1 Refer to the Underlying operating results from continuing operations section
below for a breakdown of the adjusting items
Underlying operating results from continuing operations
Reconciliation of underlying operating profit (continuing operations) to Six months ended
operating profit (continuing operations)
30.06.24 30.06.23
£m £m
Underlying operating profit (continuing operations) 16.8 14.0
Impairment charges - 0.3
Refinancing costs (2.5) (9.3)
Restructuring costs (0.4) (1.4)
Disposal of businesses and assets (0.5) 1.1
Other (0.7) (1.5)
Operating profit (continuing operations) 12.7 3.2
Underlying operating profit improved by 20.0% to £16.8m (1H 2023: £14.0m).
The Energy Division delivered growth in both underlying operating profit and
margin, whereas both Defence and Maritime Transport saw declines in underlying
operating profit and margin. The Group's overall underlying operating profit
margin improved by 200 bps, from 5.6% in 2023 to 7.6% in 2024 reflecting the
impact of the underperformance of the Subtech Europe business in 1H 2023
results.
The adjusting items for 1H 2024 amounted to £4.1m, with £2.5m of costs
associated with the refinancing of the Revolving Credit Facility ("RCF").
Summary of underlying operating results from continuing operations
Continuing operations Revenue Underlying operating profit/(loss)
Six months ended Six months ended
30.06.24 30.06.23 Change 30.06.24 30.06.23 Change
£m £m % £m £m %
Energy 110.2 134.0 (17.8) 15.0 7.5 100.0
Defence 36.5 37.0 (1.4) (0.4) 0.6 n/m
Maritime Transport 74.8 81.0 (7.7) 8.2 10.0 (18.0)
Corporate - - - (6.0) (4.1) (46.3)
Total 221.5 252.0 (12.1) 16.8 14.0 20.0
Six months operating performance by Division
Energy
Strong performance in Well Services
The Energy Division provides services to the energy services and renewables
markets, and mainly comprises of the Well Services (Scantech), Inspection
Repair and Maintenance (JF Subtech), Renewables (JF Renewables) and Subsea
& Decommissioning Services (JF Offshore) product lines. The Artificial
Lift (RMSpumptools) product line, which is included in the 1H results, was
subsequently disposed of on 8 July 2024 for net consideration of £82.8m.
Six months ended Change
30.06.24 30.06.23
£m £m
Revenue 110.2 134.0 (17.8%)
Revenue (excl. Subtech Europe and Swordfish) 110.2 101.9 8.1%
Revenue (excl. Subtech Europe, Swordfish and RMSpumptools) 87.4 81.6 7.1%
Underlying operating profit 15.0 7.5 100.0%
Underlying operating profit (excl. Subtech Europe and Swordfish) 15.0 9.0 66.7%
Underlying operating profit (excl. Subtech Europe, Swordfish and RMSpumptools) 8.3 4.7 76.6%
Underlying operating profit margin 13.6% 5.6% 800 bps
Underlying operating profit margin (excl. Subtech Europe and Swordfish) 13.6% 8.8% 480 bps
Underlying operating profit margin (excl. Subtech Europe, Swordfish and 9.5% 5.8% 370 bps
RMSpumptools)
Return on capital employed(1) 14.1% 8.2% 590 bps
1 Please refer to Note 2 of the Condensed Consolidated Financial Statements for
further information on this alternative performance measure
The Energy Division showed a 7.1% increase in revenue (excluding Subtech
Europe, Swordfish and RMSpumptools) with strong performances in Well Services
and Subsea & Decommissioning Services offsetting reduced revenues in the
remaining Inspection Repair and Maintenance businesses. Underlying operating
profit growth (excluding Subtech Europe, Swordfish and RMSpumptools) for the
Division was 76.6%.
Well Services revenue, which includes Well Services and Bubble Curtain
solutions in Taiwan and the USA, increased by 14.4% to £35.8m (2023:
£31.3m). This increase was driven by sustained demand for Well Testing and
bubble curtain services, facilitated by ongoing capital investment in new
technology compressors as well as continuing strong demand in more traditional
markets in Africa and the Middle East.
Inspection, Repair and Maintenance (excluding Subtech Europe and Swordfish)
showed an increase in revenue of 29.6% to £25.8m (2023: £19.9m), there was
good growth in Africa and Brazil facilitated by new contract wins.
Renewables revenues declined to £11.4m (2023: £15.2m) mainly due to lower
levels of construction activity, with the completion of two significant
projects delivered in 2023 (Seagreen and Hollandse-Kust) not replaced in 2024.
Following a review, the business restructured its portfolio with a focus on
growth in key target markets (blades, cable and O&M services) and a move
away from higher risk/lower margin projects to ensure a sustainable basis for
future growth.
Subsea and Decommissioning Services revenue grew by 14.6% to £10.2m (2023:
£8.9m).
The now divested RMSpumptools product line reflected a 12.3% increase in
revenue to £22.8m (2023: £20.3m). The sale of the business has significantly
decreased Group financial leverage.
Defence
Opportunities are progressing and pipeline remains strong
The Defence Division provides underwater systems and life support
capabilities, for the defence and commercial diving markets. The main business
lines are submarine rescue, defence diving, special operations vehicles,
submarine systems, and commercial diving and hyperbaric systems.
Six months ended Change
30.06.24 30.06.23
£m £m
Revenue 36.5 37.0 (1.4%)
Underlying operating (loss)/profit (0.4) 0.6 n/m
Underlying operating profit margin (1.1%) 1.6% (270 bps)
Return on capital employed(1) 0.6% 1.8% (120 bps)
1 Please refer to Note 2 of the Condensed Consolidated Financial Statements for
further information on this alternative performance measure
The Defence Division's revenue declined by 1.4%, to £36.5m in 1H 2024, with
an underlying operating loss of £0.4m, a decrease of £1.0m compared to 1H
2023. The revenue decline was predominately due to the cancellation of a US
defence contract award, partially offset by the delivery of additional
services to existing defence customers, as well as strong performances from
our commercial diving and hyperbaric systems.
Submarine rescue service contracts progressed well, with the first anniversary
of the renewed NATO submarine rescue contract occurring in the period. We
anticipate these projects to be completed in the second half of 2024.
Significant progress has been made on the new enhanced facility in Australia
that further strengthens our commitment and service offering to the Royal
Australian Navy.
Significant project awards that were anticipated for the period have yet to be
secured due to delayed procurement processes, but several opportunities are
well progressed for delivery in 2H 2024. The underlying drivers for the market
remain buoyant, and the Group is focused on securing new contracts as
customers around the world prioritise undersea defence and energy security.
Maritime Transport
Focus on margin improvement and portfolio rationalisation
The Maritime Transport Division comprises the Tankship business, Cattedown
Wharves ("Cattedown"), JF Fendercare and Martek Marine ("Martek").
Six months ended Change
30.06.24 30.06.23
£m £m
JF Tankships (incl. Cattedown) 40.4 39.6 2.0%
JF Fendercare (incl. Martek) 34.4 41.4 (16.9%)
Revenue 74.8 81.0 (7.6%)
Underlying operating profit 8.2 10.0 (18.0%)
Underlying operating profit margin 11.0% 12.3% (130 bps)
Return on capital employed(1) 27.8% 24.1% 370 bps
1 Please refer to Note 2 of the Condensed Consolidated Financial Statements for
further information on this alternative performance measure
The Tankships business delivered a solid performance in the first six months.
Revenue was marginally up year-on-year, from £39.6m to £40.4m, with both
vessel utilisation and day rates being in line with 1H 2023. The tanker fleet
utilisation during the period was 90% (1H 2023: 91%). Cattedown performed well
in 1H 2024 with an increase in the number of vessels through the port
year-on-year, in particular for dry cargo.
Tankships continues the replacement programme for its new fleet, with
contracts signed for four new sub-intermediate tankers funded through leasing
with delivery expected during 2026 and early 2027.
JF Fendercare experienced a £7.0m reduction in revenue year-on-year, impacted
by a lull in LNG ship-to-ship activity as global stocks remained high, poor
weather in Brazil, and reduction in volumes of oil ship-to-ship in the Middle
East and delays in large product orders.
Corporate
Corporate costs were £6.0m compared to £4.1m in 1H 2023. The increase
reflects the effect of investments the Group made during 2023 to strengthen
capability within enabling functions. The investment builds a foundation for
growth through stronger business performance and efficiencies leading to group
wide margin improvement.
Non-underlying items included within operating profit
The Group has recognised a net operating loss of £4.1m in relation to
adjusting items, significantly lower than the £10.8m recognised in 1H 2023.
Six months ended
30.06.24 30.06.23
£m £m
Impairment charges - (0.3)
Refinancing costs 2.5 9.3
Restructuring costs 0.4 1.4
Loss/(Gain) on disposal of businesses and assets 0.5 (1.1)
Other 0.7 1.5
Total 4.1 10.8
During 1H 2024, the Group incurred £2.5m of legal and advisory costs relating
to the refinancing of the existing RCF. In 2023, the £9.3m of costs related
to the legal and advisory costs associated with the implementation of the RCF,
refinancing strategy and facilities maintenance.
Restructuring costs of £0.4m in 1H 2024 and £1.4m in 1H 2023 relate to the
transformation programme aimed at simplification, rationalisation and
integration of the Group's businesses.
Disposal of businesses and assets includes £4.2m of costs incurred on the
disposal of RMSpumptools which will be part of the gain on disposal
calculation in 2H 2024 following completion of the sale in July; the estimated
gain on disposal is around £49m. The 1H 2024 incurred costs are offset by
£3.6m gains recognised on the disposal of residual fixed assets from Subtech
Europe. The £1.1m gain recognised in 1H 2023 largely relates to a gain on the
disposal of a vessel in the Maritime Transport Division.
Capital expenditure
Capital expenditure in the period was £16.9m and £0.7m on development
expenditure. The capital expenditure to depreciation ratio was 1.4x (excluding
intangibles additions and amortisation). Most of the growth expenditure was in
relation to investment in a new fleet of compressors to support expansion of
the bubble curtain product line and in relation to deposits on the Tankships
rebuild programme.
Net finance charges
The Group's net finance charges increased by £4.9m to £12.5m (2023: £7.6m).
Finance charges in the six months to June 2024 primarily comprise £9.4m of
interest expense on loans and overdrafts (2023: £5.8m), £2.2m for deferred
financing fees to be paid under the terms of the new credit facilities (2023:
£0.3m), £0.6m of loan arrangement fees (2023: £1.2m), and £1.8m interest
expense on lease liabilities (2023: £1.4m), partially offset by £1.5m (2023:
£1.1m) interest income on cash balances and pensions.
The increase in interest expense on loans and overdrafts and interest income
on cash balances was largely the result of higher comparable interest rates
and costs of borrowing in the first six months of 2024. Interest expense on
lease liabilities increased during the year due to new vessel leases and
extensions to existing vessel and property leases.
The Group's interest cover ratio, an alternative performance measure which is
fully described and reconciled in Note 2 of the Condensed Consolidated
Financial Statements, and is calculated by dividing rolling 12 months
underlying operating profit by rolling 12 months net finance charges
(excluding IFRS 16 finance charges), is 2.0x (2023: 3.2x), which compares to
banking covenants that require the ratio to be greater than 1.5x (2023: 2.5x).
Taxation
The Group has recognised an overall net tax expense in respect of continuing
operations of £1.2m in the period (2023: credit of £1.2m). The tax expense
on underlying profits from continuing operations for the period is £1.3m
(2023: £1.7m) representing an underlying effective tax rate of 29.5% (2023:
27.2%), with the Group incurring charges in Australia, Brazil and Norway.
The increase in the overall tax expense is primarily driven by the fact that a
deferred tax credit cannot be imputed against the net UK accounting loss
incurred in the period. Given the volume of cumulative UK tax losses at the
December 2023 balance sheet date, which were mostly generated by the
discontinued businesses and exceptional costs, it was decided not to recognise
the UK deferred tax asset in respect of the UK losses carried forward. The
Group still has the ability to recognise these losses in future periods as the
turn-around strategy develops, and the UK group is able to demonstrate short
to medium term future UK profitability against which the losses can be offset.
Dividends and earnings per share
The Board has not recommended dividends in 2024 or 2023, given the overall
financial position of the Group. The Board remains committed to reintroducing
a sustainable dividend policy at the right time.
Basic loss per share, on a statutory basis, reduced to 1.7 pence (2023: 19.0
pence) reflecting lower loss after tax. Underlying basic earnings per share
decreased to 6.4 pence (2023: 21.5 pence) primarily due to higher interest and
tax charges in the year, partially offset by an improvement in the underlying
operating profit.
Cash flow and borrowings
Six months ended
30.06.24 30.06.23
£m £m
Cash flow from operating activities 28.0 3.5
Cash flows (used in)/from investing activities (1.0) 1.6
Cash flows used in financing activities (19.4) (7.4)
Net increase in cash and cash equivalents 7.6 (2.3)
Cash and cash equivalents at 1 January 26.4 22.8
Net foreign exchange differences 0.1 (0.7)
Cash transferred to assets held for sale (4.1) -
Cash and cash equivalents at 30 June 30.0 19.8
The Group generated £28.0m (2023: £3.5m) of cash from operating activities,
with a working capital inflow of £12.2m (2023: outflow of £8.4m). The
increase in operating profit for the period was the key driver of the improved
cash flow. The working capital inflow arose due to an improvement in debtor
days including advanced payments received from customers, partially offset by
a modest reduction in creditor days. Debtor balances continued to show some
positive progress during the year due to the business focus on collections.
Creditor balances have increased since year end but are consistent with the
balances at 1H 2023. Tax payments were slightly higher than last year at
£6.0m (2023: £4.1m).
Cash outflows for investing activities during the year were £1.0m (2023:
inflow of £1.6m). Capital expenditure, at £16.9m, was in line with the
£16.8m invested in 2023. Key expenditure in 1H 2024 included investment in
energy efficient compressors in the Energy Division, which is expected to
yield attractive returns. Other capex investments included deposits on new
build vessels, dry docking of the Group's vessels and equipment purchases. The
Group realised £14.2m of proceeds from the disposal of property, plant and
equipment (2023: £21.3m).
The Group's net borrowings at 30 June 2024, including all lease liabilities,
was £186.6m (30 June 2023: £203.5m; 31 December 2023: £201.1m). During the
period, bank borrowings increased by £0.5m and lease liabilities decreased by
£7.3m.
On 30 June 2024, the Group had £183.0m of committed credit facilities (30
June 2023: £210.0m; 31 December 2023: £192.7m) and £15.0m of undrawn
committed credit facilities (30 June 2023: £40.9m; 31 December 2023:
£24.7m).
The Group's net debt for the purposes of its banking covenants consists of net
bank borrowings, finance lease liabilities (on an IAS 17 basis), and bonds and
guarantees, as summarised below.
Six months ended
30.06.24 30.06.23
£m £m
Net borrowings 186.6 203.5
Less: right-of-use operating leases (51.7) (50.6)
Add: Guarantees and collateral deposits(1) 9.9 1.6
Net debt - covenant basis 144.8 154.5
Covenant EBITDA 54.7 55.4
Net Debt : EBITDA(2) 2.6x 2.8x
1 Includes one-time John Fisher Nuclear Limited settlement of £5.0m in 2024
2 Defined as leverage Alternative Performance Measure ("APM") in Note 2.3 of the
Condensed Consolidated Financial Statements
On a covenant basis, net debt has decreased by £9.7m compared to 1H 2023. The
ratio of Net Debt : EBITDA (defined as leverage APM, which is explained and
reconciled in Note 2 of the Condensed Consolidated Financial Statements) has
decreased to 2.6x (2023: 2.8x), which compares to banking covenants requiring
the ratio to be less than 4.0x.
Following the disposal of RMSpumptools, net debt further decreased to c.£70m.
Liquidity
In June 2023, the Group agreed borrowing facilities with its lending banks of
£209.9m, with a maturity date of March 2025. As at 30 June 2024, agreed
amortisation had reduced the available facility amount to £198.0m. The
continued access to liquidity has been included as a Group Principal Risk in
the Annual Report and Accounts due to the relatively short-term nature of the
new facilities.
With the current RCF maturing early next year, the Group will be refinancing
its debt in 2024. We are underway with the deleveraging of our balance sheet
with the sale of the entire issued share capital of RMSpumptools Limited (RMS)
completing in July 2024 for proceeds of £82.8m of which £72.8m have been
used to repay the RCF. Deleveraging will provide the Group with greater
business resilience and greater headroom on its existing facilities, while
reducing the Group's debt levels towards our mid-term target Net Debt : EBITDA
range of 1.0x - 1.5x. The Group's refinancing is well progressed and will be
completed in due course on more favourable terms in comparison to the current
facility.
Balance sheet
The Group's net assets decreased by £3.8m in the period to £144.8m (30 June
2023: £200.1m; 31 December 2023: £148.6m). The loss for the period of £1.0m
was increased by other comprehensive losses of £3.4m in relation to foreign
exchange movements and hedging of £1.4m, net of tax, and an actuarial loss
from the Group's defined benefit pension fund of £2.0m in the period, net of
tax.
Non-current assets
Non-current assets decreased by £13.8m in the period from £295.3m at 31
December 2023 to £281.5m. Goodwill reduced by £9.5m to £68.8m (31 December
2023: £78.3m) as a result of a reclassification to held-for-sale assets of
£8.3m and foreign exchange differences of £1.2m. Other intangible assets
reduced to £6.2m from £6.3m, largely due to additions and transfers of
£0.7m, which was offset by amortisation charges of £0.6m.
Within property, plant and equipment, the Group invested £17.8m in additions.
These additions were offset by disposals with a net book value of £3.3m,
depreciation of £9.9m, reclassifications to intangible assets and assets held
for sale of £1.8m and foreign exchange differences of £0.8m.
Right-of-use assets decreased by £5.4m due to additions of £3.6m relating to
property leases and leased vessel dry docks, which were partially offset by
depreciation of £7.7m, reclassifications to held for sale assets of £1.0m
and foreign exchange differences of £0.3m.
Investments in joint ventures has reduced by £1.0m to £7.4m due to the
receipt of a dividend of £1.0m in the period.
The Group has recognised a £7.3m asset in relation to the James Fisher and
Sons plc Pension Fund for Shore Staff defined benefit pension scheme in
accordance with IFRIC 14 following movements in actuarial assumptions. The
Group continues to make deficit repair payments in line with agreed profiles
with £1.5m expected to be paid in contributions this year following the most
recent triennial actuarial valuation for Merchant Navy Ratings Pension Fund.
Current assets and current liabilities
The Group has net current liabilities of £88.0m, a decrease of £162.2m from
the £74.2m of net current assets at 31 December 2023. This decrease arose
from the £186.0m increase in current liabilities to £374.7m, partially
offset by a £23.8m increase in current assets to £286.7m.
The £23.8m increase in current assets in the period was mainly driven by a
£35.6m increase in assets held for sale due to the reclassification of the
RMSpumptools business to held for sale and a £4.4m increase in corporation
tax receivable offset by a £6.6m decrease in inventories and £8.9m decrease
in receivables.
The £186.0m increase in current liabilities in the period was mainly driven
by a £162.8m increase in the amount of current borrowings which includes
£166.6m of bank borrowings due to mature in March 2025 reclassified from
non-current liabilities , a £13.3m increase in trade and other payables to
£126.7m, a £12.2m increase in liabilities associated with assets held for
sale and a £0.2m increase in provisions to £9.6m. This was partially offset
by a £1.1m reduction in current tax liabilities to nil and a £1.4m reduction
in lease liabilities to £11.6m.
Short-term bank borrowings (i.e. overdrafts) have reduced to £46.8m from
£51.1m at 31 December 2023, with the net position of short-term cash and
short-term borrowings increasing to £30.0m (31 December 2023: £26.4m).
Non-current liabilities
Long-term liabilities, at £48.7m, are £172.2m lower than at 31 December
2023. The change in the period is largely the result of the reclassification
of bank borrowings to current liabilities of £166.6m, decrease of £5.9m in
long-term lease liabilities and £0.7m reduction in provisions offset by a
£1.0m increase in retirement benefit obligations.
Technical guidance for 2H 2024
The 2H 2024 results will reflect the following portfolio actions:
• The exit from Subtech Europe, which ceased operations in December 2023 (the
business contributed c.£40.0m of revenue to continuing operations in 2023);
and
• The sale of RMSpumptools (the business contributed revenue of £22.8m and
£6.7m of EBITDA to continuing operations in 1H 2024).
• The sale of non-core Maritime Transport business Martek (the business
contributed revenue of £5.6m and £0.5m of EBITDA to continuing operations in
1H 2024).
The net proceeds of the RMSpumptools and Martek disposals have been used to
reduce the drawn balance under the RCF. As such, the net interest expense is
expected to reduce.
The refinancing of facilities is expected to complete in due course on
improved terms, with an interest cost improvement of c.150bps.
Capital expenditure in 2024 is expected to be at similar levels to 2023.
The underlying effective tax rate for the full year 2024 is 29.0% representing
the Group operating in higher tax rate overseas territories.
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 those disclosed in
the 2023 Annual Report and Accounts on pages 56 - 66. The principal risks set
out in the 2023 Annual Report and Accounts were:
• Operational - Group transformation programme, health and safety, cyber
security, contractual risk, project delivery, recruitment and retention of
staff, regulatory and compliance and product risk;
• Strategic - operating in emerging markets, climate change, acquisitions and
disposals; and
• Financial - maintaining access to adequate funding, interest rate, foreign
exchange and credit risks.
The Board considers that the principal risks and uncertainties set out in the
2023 Annual Report and Accounts remain unchanged. Emerging risks such as the
macroeconomic financial environment and geopolitical tensions affecting global
stability and commodity pricing continue to be monitored.
Directors' Responsibilities
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared in accordance with
IAS 34 'Interim Financial Reporting' as adopted for use in the United Kingdom;
(b) The interim management report includes a fair review of the information
required by:
a. DTR 4.2.7R of the 'Disclosure and Transparency Rules', being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
b. DTR 4.2.8R of the 'Disclosure and Transparency Rules', being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during the period; and any changes in the related
party transactions described in the last annual report and accounts that could
do so.
Approved by the Board of Directors and signed on its behalf by:
J Vernet K Hayzen-Smith
Chief Executive Officer Chief Financial Officer
INDEPENDENT REVIEW REPORT TO JAMES FISHER AND SONS PLC
Conclusion
We have been engaged by James Fisher and Sons plc ("the Company") to review
the condensed set of financial statements in the half-yearly financial report
for the six months ended 30 June 2024 which comprises the condensed
consolidated income statement, the condensed consolidated statement of
comprehensive income, the condensed consolidated statement of financial
position, the condensed consolidated statement of changes in equity, the
condensed consolidated cash flow statement and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with IAS 34 Interim Financial Reporting as
adopted for use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Material uncertainty related to going concern
We draw attention to note 1 of the condensed set of financial statements which
describes the material uncertainty in respect of formal documentation and
completion in relation to the refinancing of the existing RCF, which matures
within the going concern assessment period, which is not in the direct control
of the Group. These events and conditions, along with other matters explained
in note 1, constitute a material uncertainty that may cast doubt on the
Group's ability to continue as a going concern.
Our conclusion is not modified in respect of this matter.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the Directors
have inappropriately adopted the going concern basis of accounting, or that
the Directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The Directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the Directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Andrew Campbell-Orde
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
10 September 2024
Condensed consolidated income statement
for the six months ended 30 June 2024
Six months ended
Notes 30.06.24 30.06.23(1) 31.12.23
£m £m £m
Continuing Operations
Revenue 3 221.5 252.0 496.2
Cost of sales (155.5) (186.5) (360.3)
Gross profit 66.0 65.5 135.9
Administrative expenses (51.3) (52.0) (109.6)
Impairment charges - (0.1) (28.4)
Refinancing costs (2.5) (9.3) (12.2)
Restructuring costs (0.4) (1.4) (5.7)
Share of post-tax results of associates 0.9 0.5 1.4
Operating profit/(loss) 12.7 3.2 (18.6)
Investment income 5 1.5 1.1 3.2
Finance expense 5 (14.0) (8.7) (24.5)
Profit/(loss) before taxation 0.2 (4.4) (39.9)
Tax (expense)/income 6 (1.2) 1.2 (11.0)
Loss for the period from continuing operations (1.0) (3.2) (50.9)
Loss for the period from discontinued operations, net of tax 4 - (6.4) (11.4)
Loss for the period (1.0) (9.6) (62.3)
Attributable to:
Owners of the Company (0.8) (9.6) (62.4)
Non-controlling interests (0.2) - 0.1
(1.0) (9.6) (62.3)
Loss per share pence pence pence
Basic and diluted 7 (1.7) (19.0) (123.9)
Loss per share - continuing operations pence pence pence
Basic and diluted 7 (1.7) (6.3) (101.2)
( )
1 Refinancing costs (£9.3m), impairment credit (£0.3m) and restructuring costs
(£1.4m) for the six months ended 30 June 2023 which were previously included
within administrative expenses have been represented to conform with the
current year presentation of these costs.
Condensed consolidated statement of other comprehensive income
for the six months ended 30 June 2024
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Loss for the period (1.0) (9.6) (62.3)
Other comprehensive (expense) / income:
Items that will not be classified to the income statement
Actuarial (loss)/gain in defined benefit pension schemes (2.0) (1.1) 1.6
Tax on items that will not be reclassified - - (0.3)
(2.0) (1.1) 1.3
Items that may be reclassified to the income statement
Exchange differences on foreign currency net investments (2.4) (10.1) (8.1)
Effective portion of changes in fair value of cash flow hedges 0.8 4.8 (0.3)
Effective portion of changes in fair value of cash flow hedges in joint - (0.1) (0.1)
ventures
Net changes in fair value of cash flow hedges transferred to income statement 0.2 (1.3) (0.9)
Tax on items that may be reclassified - (1.3) (0.3)
(1.4) (8.0) (9.7)
Total other comprehensive expense for the period (3.4) (9.1) (8.4)
Total comprehensive expense for the period (4.4) (18.7) (70.7)
Attributable to:
Owners of the Company (4.2) (18.7) (70.8)
Non-controlling interests (0.2) - 0.1
(4.4) (18.7) (70.7)
Condensed consolidated statement of financial position
at 30 June 2024
Notes 30.06.24 30.06.23 31.12.23
£m £m £m
Non-current assets
Goodwill 9 68.8 112.5 78.3
Other intangible assets 6.2 7.5 6.3
Property, plant and equipment 120.0 120.3 118.0
Right-of-use assets 62.0 61.6 67.4
Investment in joint ventures 7.4 8.5 8.4
Other investments 1.4 1.4 1.4
Retirement benefit surplus 12 7.3 5.3 7.4
Other receivables 3.9 1.4 4.0
Deferred tax assets 4.5 11.5 4.1
281.5 330.0 295.3
Current assets
Inventories 40.1 51.8 46.7
Trade and other receivables 115.1 162.1 124.0
Assets held for sale 10 50.3 2.2 14.7
Current tax assets 4.4 - -
Cash and cash equivalents 13 76.8 90.3 77.5
286.7 306.4 262.9
Current liabilities
Trade and other payables (126.7) (127.2) (113.4)
Provisions 11 (9.6) (11.5) (9.4)
Liabilities associated with assets held for sale 10 (12.9) - (0.7)
Taxation liabilities - (1.9) (1.1)
Borrowings 13 (213.9) (70.5) (51.1)
Lease liabilities (11.6) (11.9) (13.0)
(374.7) (223.0) (188.7)
Net current (liabilities)/assets (88.0) 83.4 74.2
Total assets less current liabilities 193.5 413.4 369.5
Non-current liabilities
Provisions 11 (3.6) (1.4) (4.3)
Retirement benefit obligations 12 (2.6) (0.5) (1.6)
Cumulative preference shares (0.1) (0.1) (0.1)
Borrowings 13 - (167.0) (166.6)
Lease liabilities (42.3) (44.3) (48.2)
Deferred tax liabilities (0.1) - (0.1)
(48.7) (213.3) (220.9)
Net assets 144.8 200.1 148.6
Equity
Called up share capital 12.6 12.6 12.6
Share premium 26.8 26.8 26.8
Treasury shares (0.5) (0.6) (0.5)
Other reserves (17.8) (14.8) (16.4)
Retained earnings 123.3 175.6 125.5
Total shareholders' equity 144.4 199.6 148.0
Non-controlling interests 0.4 0.5 0.6
Total equity 144.8 200.1 148.6
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2024
Share Share Retained Other Treasury Total Non- Total
capital premium earnings reserves shares shareholders' controlling equity
£m £m £m £m £m equity interests £m
£m £m
At 1 January 2023 12.6 26.8 185.8 (6.8) (0.6) 217.8 0.5 218.3
Loss for the period - - (9.6) - - (9.6) - (9.6)
Other comprehensive expense - - (1.1) (8.0) - (9.1) - (9.1)
Total comprehensive expense for the period - - (10.7) (8.0) - (18.7) - (18.7)
Contributions by and distributions to owners:
Share-based payments - - 0.5 - - 0.5 - 0.5
At 30 June 2023 12.6 26.8 175.6 (14.8) (0.6) 199.6 0.5 200.1
Loss for the period - - (52.8) - - (52.8) 0.1 (52.7)
Other comprehensive income/(expense) - - 2.4 (1.7) - 0.7 - 0.7
Total comprehensive expense for the period - - (50.4) (1.7) - (52.1) 0.1 (52.0)
Contributions by and distributions to owners:
Remeasurement of non-controlling interest put option - - - 0.1 - 0.1 - 0.1
Share-based payments - - 0.5 - - 0.5 - 0.5
Sale of shares by ESOT - - (0.2) - 0.1 (0.1) - (0.1)
At 31 December 2023 12.6 26.8 125.5 (16.4) (0.5) 148.0 0.6 148.6
Loss for the period - - (0.8) - - (0.8) (0.2) (1.0)
Other comprehensive expense - - (2.0) (1.4) - (3.4) - (3.4)
Total comprehensive expense for the period - - (2.8) (1.4) - (4.2) (0.2) (4.4)
Contributions by and distributions to owners:
Share-based payments - - 0.6 - - 0.6 - 0.6
At 30 June 2024 12.6 26.8 123.3 (17.8) (0.5) 144.4 0.4 144.8
Other reserve movements
Other reserves Translation Hedging Put option Total
reserve reserve liability £m
£m £m £m
At 1 January 2023 (8.2) 2.5 (1.1) (6.8)
Other comprehensive (expense)/income (10.1) 2.1 - (8.0)
At 30 June 2023 (18.3) 4.6 (1.1) (14.8)
Other comprehensive income/(expense) 2.0 (3.7) - (1.7)
Remeasurement of non-controlling interest put option - - 0.1 0.1
At 31 December 2023 (16.3) 0.9 (1.0) (16.4)
Other comprehensive (expense)/income (2.4) 1.0 - (1.4)
At 30 June 2024 (18.7) 1.9 (1.0) (17.8)
Condensed consolidated cash flow statement
for the six months ended 30 June 2024
Six months ended
Notes 30.06.24 £m 30.06.23 31.12.23
£m £m
Loss for the period (1.0) (9.6) (62.3)
Tax expense/(income) 1.2 (1.2) 12.0
Adjustments for:
Depreciation and amortisation 18.3 20.8 41.2
Impairments - (0.3) 28.1
Net finance expense 12.5 7.6 21.3
Net Loss on disposal of businesses - 2.1 2.1
Gains on disposals of property, plant and equipment (8.3) - (2.5)
Other non-cash items (0.1) (2.6) (1.3)
(Increase)/decrease in inventories (5.2) (3.0) 0.1
(Increase)/decrease in trade and other receivables (1.2) (20.8) 10.7
Increase/(decrease) in trade and other payables 18.6 15.4 (4.1)
Defined benefit pension cash contributions less service cost (0.8) (0.8) 1.1
Cash generated from operations 34.0 7.6 46.4
Income taxes paid (6.0) (4.1) (8.6)
Cash flow from operating activities 28.0 3.5 37.8
Investing activities
Dividends from joint venture undertakings 1.0 - 1.2
Net proceeds from the disposal of a subsidiary - (3.2) (3.2)
Proceeds from the disposal of property, plant and equipment(1) 14.2 21.3 25.6
Interest income 1.4 1.2 2.9
Acquisition of property, plant and equipment (16.9) (16.8) (29.4)
Development expenditure (0.7) (0.9) (1.8)
Cash flows (used in)/from investing activities (1.0) 1.6 (4.7)
Financing activities
Interest paid (9.5) (6.3) (15.7)
Repayment of lease liabilities (9.9) (8.5) (18.1)
Proceeds from borrowings 4.0 192.0 198.1
Repayment of borrowings (4.0) (184.6) (191.7)
Cash flows used in financing activities (19.4) (7.4) (27.4)
Net increase/(decrease) in cash and cash equivalents 13 7.6 (2.3) 5.7
Cash and cash equivalents at beginning of period 26.4 22.8 22.8
Net foreign exchange differences 0.1 (0.7) (1.7)
Cash transferred to assets held for sale (4.1) - (0.4)
Cash and cash equivalents at end of period 30.0 19.8 26.4
1 Proceeds from disposal of property, plant and equipment includes £3.3m (June
2023: £18.4m, December 2023: £19.8m) from assets held for sale.
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 condensed consolidated financial statements of the Company for
the six months ended 30 June 2024 comprise the Company and its subsidiaries
(together referred to as "the Group") and the Group's interests in jointly
controlled entities.
Statement of compliance
These condensed consolidated interim financial statements, which have been
reviewed and not audited, have been prepared in accordance with International
Financial Reporting Standard IAS 34 "Interim Financial Reporting" as adopted
for use in the UK. As required by the Disclosure and Transparency Rules of the
Financial Conduct 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 2023 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
2023.
The comparative figures for the financial year ended 31 December 2023 are not
the Group's statutory accounts for that financial year. Those accounts which
were prepared in accordance with UK-adopted International Financial Reporting
Standards ("IFRS"), have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) included reference to a matter to which the auditor drew
attention by way of emphasis without qualifying their report in respect of a
material uncertainty in respect of going concern 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 2023 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 0.1 million pounds (£0.1m) except where otherwise
indicated.
New standards and amendments effective from 1 January 2024 have not had a
material impact on the interim consolidated financial statements of the Group.
Going concern
In determining the appropriate basis of preparation of the condensed interim
financial statements for the six months ended 30 June 2024, the Board is
required to consider whether the Group can continue in operational existence
for a period of at least 12 months from the date of approval of the Financial
Statements. The Board has concluded that it is appropriate to adopt the going
concern basis, having undertaken a rigorous assessment of the financial
forecasts, key uncertainties and sensitivities, as set out below.
The Group signed a £209.9m secured revolving credit facility in June 2023,
which matures on 31 March 2025 ("the RCF"). There are a number of mandatory
repayments (both scheduled and where cash is generated from disposals)
incorporated into the facility terms. At the time when the facility terms were
negotiated, the timing of these repayments were intended to align with
forecast cash inflows. However, as cash inflows can vary from forecast due to
timings of projects and revenue receipts, prior to the December 2023 year end,
the Group obtained appropriate waivers to alter the phasing and quantum of the
December 2023 mandatory repayment. The quantum of this mandatory repayment was
reduced, and repayment made in June 2024. As a result, the Group had £15.0m
of undrawn committed facilities at 30 June 2024 (30 June 2023: £40.9m; 31
December 2023: £24.7m) and £183.0m of committed facilities (30 June 2023:
£210.0m; 31 December 2023: £192.7m).
On 8 July 2024, the Group completed the sale of the entire issued share
capital of RMSpumptools Limited (RMS) for £82.8m. These proceeds have been
used to reduce facilities to £112.5m as at 15 July 2024 and deleverage the
Group's balance sheet.
The RCF contains a restriction on capital expenditure spend as well as minimum
liquidity requirements. It also contains reducing Net Debt : EBITDA covenants
and increasing interest cover requirements throughout the facility and certain
non-financial covenants. During the period, the Group has agreed with the
banking syndicate to reset these to less onerous levels for the remaining
duration of the facility. The testing requirement has also been altered from
monthly to quarterly for the Net Debt : EBITDA covenant.
The Group's net debt for the purposes of banking covenants consists of net
bank borrowings adjusted for finance lease liabilities (on a pre-IFRS 16
basis) and advance payment guarantees. The net debt for covenant purposes was
£144.8m as at 30 June 2024 (30 June 2023: £154.5m; 31 December 2023:
£149.8m) and the net debt/ EBITDA ratio of 2.6x (30 June 2023: 2.8x; 31
December 2023: 2.8x).
The Group, with the ongoing support of the banking syndicate, has remained in
compliance with all covenants during the period and remained so at the 30 June
2024 measurement date.
Going concern assessment period
Accounting standards require the Directors to assess the Group's ability to
continue to operate as a going concern for at least 12 months from the date of
approval of the financial statements. The Board has considered an appropriate
period for going concern assessment considering any known liquidity events
that will occur after the 12-month period. Given that the RCF matures on 31
March 2025, the Directors concluded that the 12-month going concern assessment
period to 30 September 2025 is appropriate with a realistic prospect that the
RCF will be refinanced prior to 31 March 2025 based on discussions with
participating banks and financial advisors.
Board assessment
Base case
The Group has prepared its base case based on the latest performance and
forecasts for the period to 30 September 2025.
The base case also considers downside risks to business performance that could
arise in the period and restricts capital expenditure in line with the revised
limits for 2024 in the RCF. Given parts of the Group's business involves
securing new contracts which can be delayed or cancelled, cash flows have been
adjusted to take account of such risks materialising. Although the intention
of the Group is to continue the disposals of non-strategic assets and
businesses, the base case does not include such disposals or acquisitions as
these are not in the direct control of the Group.
The forecasts also take account of the macro-economic environment such as
potential inflationary pressures and shifts in market trends. The base case
demonstrated the Company would have headroom against its facilities and would
comply with financial covenants over the going concern assessment period.
Severe but plausible downside scenario
The Group also modelled severe but plausible downside scenarios in which the
Board has taken account of the following:
• trading downside risks, which assume the Group is not successful in delivering
the anticipated profitability levels due to risks associated with contract
wins and/or delays and forecast margin achievement resulting in operating
profit reduction of around 20% during the going concern period; and
• cash inflow disruptions that may result from late payments from customers or
project delivery challenges.
Under a combination of all of the above downside scenarios ("the combined
severe but plausible scenario"), prior to mitigating actions within the
control of management, the forecasts indicate that until the end of the
current RCF in March 2025, the Directors will not need to seek additional
funding in order for the Group to continue to meet its liabilities as they
fall due. The combined severe but plausible scenario also results in limited
headroom on financial covenant compliance in the going concern assessment
period, prior to mitigating actions.
In addition, due to the quarterly and monthly covenant testing requirements
within the RCF, there is an inherent timing risk associated with both profits
and large project related customer receipts. Therefore, there is a risk that
should the combined severe but plausible scenario outlined above materialise,
additional support from the lender group may be necessary to avoid any
temporary non-compliance with covenants. The Group will continue to actively
manage its cashflow to mitigate this risk and operate within the terms of the
RCF.
As part of the RCF, there is a non-financial covenant that requires the Group
to provide signed audited financial statements for all guarantors party to the
banking arrangement within 180 days of the year end. As at 30 June 2024, the
Group has obtained a waiver from the banks for certain guarantors where this
covenant requirement has not been met in respect of 31 December 2022 and 2023
audited financial statements. The Board believe that they can meet the revised
signing dates as outlined in this waiver however acknowledge that should the
revised signing dates not be met then an additional waiver will need to be
obtained to prevent a breach to the Group's banking facility.
Expiry of RCF during the going concern assessment period
As noted above, the RCF expires on 31 March 2025. As at the date of this
report, the Group has been progressing with a refinance of the existing RCF
and has received a draft agreement from the lenders to enter into a single
three year RCF of £75m, alongside a five year £20m term loan facility. The
terms of the new facilities are subject to formal agreement with completion
and drawdown of the new facilities subject to legal documentation being
finalised. The Directors expect to complete the refinancing in due course.
Assessment Conclusion
Based on their assessment, the Directors believe it remains appropriate to
prepare the condensed interim financial statements on a going concern basis.
However, the Directors recognise that the formal documentation and completion
in relation to the refinancing of the existing RCF, which matures within the
going concern assessment period, is not in the direct control of the Group and
therefore indicates the existence of a material uncertainty, related to events
or conditions that may cast significant doubt on the Group's ability to
continue as a going concern and, therefore, that the Group may be unable to
realise its assets and discharge its liabilities in the normal course of
business. The financial statements do not include any adjustments that would
result from the basis of preparation being inappropriate.
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 major sources of estimation uncertainty were the
same as those applied to the consolidated financial statements as at and for
the year ended 31 December 2023.
An additional key judgement impacting the period is the classification of
RMSpumptools as a continuing operation. The Directors considered the
requirements of the accounting standard and assessed if RMSpumptools
represents a separate major line of business for the Group. This determination
required judgement due to the overall financial contribution of the business
to the Group. The Directors concluded that based on the business operating as
a product line within the wider Energy Division, rather than being a major
line of business, it was appropriate to include within continuing operations.
RMSpumptools generated £22.8m in revenue, and £6.8m in profit before tax
during the period and consequently the Group's continuing results would have
reduced by this amount had RMSpumptools been presented as a discontinued
operation.
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
International Financial Reporting Standards ("IFRS"). The alternative
performance measures ("APMs") should be considered in addition to and not as a
substitute or superior to the information presented in accordance with IFRS,
as APMs may not be directly comparable with similar measures used by other
companies.
The Group believes that APMs, when considered together with IFRS results,
provide the readers of the financial statements with complementary information
to better understand and compare the financial performance and position of the
Group from period to period. The adjustments are usually items that are
significant in size and/or non-recurring in nature. These measures are also
used by management for planning, reporting and performance management
purposes. Some of the measures form part of the covenant ratio calculations
required under the terms of the Group's loan agreements.
As APMs include the benefits of restructuring programmes or use of the
acquired intangible assets but exclude certain significant costs, such as
amortisation of intangible assets, litigation, material restructuring and
transaction items, they should not be regarded as a complete picture of the
Group's financial performance, which is presented in its IFRS results. The
exclusion of adjusting items may result in underlying profits/(losses) being
materially higher or lower than IFRS earnings.
The following APMs are referred to in the Annual Report and Accounts and
described in the following paragraphs.
2.1 Underlying operating profit
Underlying operating profit is defined as operating profit from continuing
operations adjusted for 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, asset impairment and profit/loss relating to the sale of
businesses or any other significant one-off adjustments to income or expenses
(adjusting items).
Underlying operating profit is used as a basis for Net Debt : EBITDA and
interest cover covenant calculations, required under the terms of the Group's
loan agreements. This APM is also used internally to measure the Group's
performance against previous years and budgets, as the adjusting items
fluctuate year-on-year and may be unknown at the time of budgeting.
Six months ended 30 June 2024
As Refinancing Restructuring Disposal of businesses Other/Tax Underlying
reported £m £m and assets £m results
£m £m £m
Continuing operations
Revenue 221.5 - - - - 221.5
Cost of sales (155.5) - - - - (155.5)
Gross profit 66.0 - - - - 66.0
Administrative expenses (51.3) - - 0.5 0.7 (50.1)
Refinancing costs (2.5) 2.5 - - - -
Restructuring costs (0.4) - 0.4 - - -
Share of post-tax results of associates 0.9 - 0.9
- - -
Operating profit 12.7 2.5 0.4 0.5 0.7 16.8
Investment income 1.5 - - - - 1.5
Finance expense (14.0) - - - - (14.0)
Profit before taxation 0.2 2.5 0.4 0.5 0.7 4.3
Tax expense (1.2) - - - (0.1) (1.3)
(Loss)/profit for the period from continuing operations (1.0) 2.5 0.4 0.5 0.6 3.0
Discontinued operations
(Loss)/profit for the period from discontinued operations, net of tax - - - - - -
(Loss)/profit for the period (1.0) 2.5 0.4 0.5 0.6 3.0
Operating margin (%) 5.7% 7.6%
Segmental underlying operating profit is calculated as follows:
Energy 14.4 - 0.2 0.2 0.2 15.0
Defence (0.5) - 0.1 - - (0.4)
Maritime Transport 8.1 - 0.1 - - 8.2
Corporate (9.3) 2.5 - 0.3 0.5 (6.0)
Continuing operations 12.7 2.5 0.4 0.5 0.7 16.8
The underlying results include £3.0m of operating profit from the sale of
life of field rental related assets which occurred in the ordinary course of
business.
During the six months ended 30 June 2024, adjusting items were in relation to:
• Refinancing - Costs associated with refinancing activities and completion of
various requirements and conditions of the existing Revolving Credit Facility
("RCF").
• Restructuring - Costs related to the transformation programme aimed at
simplification, rationalisation and integration of the Group's businesses
across all Divisions.
• Disposal of Businesses and Assets - mainly comprises of a £3.6m PPE disposal
gain arising on closure of the Subtech Europe business in the Energy Division,
offset by £4.2m costs incurred during the period associated with the disposal
of the RMSpumptools business which completed on 8 July 2024 (refer to note
16).
• Other - includes £0.3m amortisation of acquired intangibles.
Six months ended 30 June 2023
As Impairment Refinancing Restructuring Disposal of businesses Other/Tax Underlying
reported reversals £m £m and assets £m results
£m £m £m £m
Continuing operations
Revenue 252.0 - - - - - 252.0
Cost of sales (186.5) - - - (1.1) - (187.6)
Gross profit 65.5 - - - (1.1) - 64.4
Administrative expenses (52.0) - - - - 1.5 (50.5)
Impairment charges (0.1) (0.3) - - - - (0.4)
Refinancing costs (9.3) - 9.3 - - - -
Restructuring costs (1.4) - - 1.4 - - -
Share of post-tax results of associates 0.5 - - - - - 0.5
Operating profit 3.2 (0.3) 9.3 1.4 (1.1) 1.5 14.0
Investment income 1.1 - - - - - 1.1
Finance expense (8.7) - - - - - (8.7)
(Loss)/Profit before taxation (4.4) (0.3) 9.3 1.4 (1.1) 1.5 6.4
Tax income/(expense) 1.2 - - - - (2.9) (1.7)
(Loss)/profit for the period from continuing operations (3.2) (0.3) 9.3 1.4 (1.1) (1.4) 4.7
Discontinued operations
Loss for the period from discontinued operations, net of tax (6.4) - - - - - (6.4)
Loss for the period (9.6) (0.3) 9.3 1.4 (1.1) (1.4) (1.7)
Operating margin (%) 1.3% 5.6%
Segmental underlying operating profit is calculated as follows:
Energy 6.9 (0.5) - 0.4 0.4 0.3 7.5
Defence 0.7 (0.3) - 0.2 - - 0.6
Maritime Transport 10.0 0.5 - 0.8 (1.5) 0.2 10.0
Corporate (14.4) - 9.3 - - 1.0 (4.1)
Continuing operations 3.2 (0.3) 9.3 1.4 (1.1) 1.5 14.0
During the six months ended 30 June 2023, adjusting items were in relation to:
• Impairment Reversals - Reversal of impairment charges on tangible assets and
assets held for sale
• Refinancing - Costs of the refinancing strategy and obtaining a waiver from
the Group's lenders.
• Restructuring - Costs related to the transformation programme aimed at
simplification, rationalisation and integration of the Group's businesses
across all Divisions.
• Disposal of Businesses and Assets - a gain of £1.1m on disposal of a vessel
in the Maritime Transport Division.
• Other - Primarily £0.4m costs of litigation, £0.6m legal and advisory costs
related to compliance with the new RCF and amortisation of acquired
intangibles.
Year ended 31 December 2023
As Impairment Refinancing Restructuring Disposal of businesses Other/Tax Underlying
reported charges £m £m and assets £m results
£m £m £m £m
Continuing operations
Revenue 496.2 - - - - - 496.2
Cost of sales (360.3) - - - (1.8) - (362.1)
Gross profit 135.9 - - - (1.8) - 134.1
Administrative expenses (109.6) - - - 0.1 3.9 (105.6)
Impairment charges (28.4) 28.1 - - - - (0.3)
Refinancing costs (12.2) - 12.2 - - - -
Restructuring costs (5.7) - - 5.7 - - -
Share of post-tax results of associates 1.4 - - - - - 1.4
Operating (loss)/profit (18.6) 28.1 12.2 5.7 (1.7) 3.9 29.6
Investment income 3.2 - - - - - 3.2
Finance expense (24.5) - - - - - (24.5)
(Loss)/profit before taxation (39.9) 28.1 12.2 5.7 (1.7) 3.9 8.3
Tax (expense)/income (11.0) - - - - 5.0 (6.0)
(Loss)/profit for the year from continuing operations (50.9) 28.1 12.2 5.7 (1.7) 8.9 2.3
Discontinued operations
Loss for the year from discontinued operations, net of tax (11.4) - - - - - (11.4)
Loss for the year (62.3) 28.1 12.2 5.7 (1.7) 8.9 (9.1)
Operating margin (%) (3.7%) 6.0%
Segmental underlying operating profit is calculated as follows:
Energy 9.5 2.1 - 3.6 (0.4) 0.9 15.7
Defence (23.7) 24.7 - 0.5 - - 1.5
Maritime Transport 21.7 1.3 - 1.5 (1.4) 0.2 23.3
Corporate (26.1) - 12.2 0.1 0.1 2.8 (10.9)
Continuing operations (18.6) 28.1 12.2 5.7 (1.7) 3.9 29.6
During the year ended 31 December 2023, adjusting items were in relation to:
• Impairment Charges - These relate to goodwill, right-of-use vessels, tangible
assets and investments in associates.
• Refinancing - Costs of signing of the new RCF, refinancing strategy, obtaining
a waiver from the Group's lenders and completion of various requirements and
conditions of the RCF.
• Restructuring - Costs related to the transformation programme aimed at
simplification, rationalisation and integration of the Group's businesses
across all three Divisions and includes £3.0m in relation to the closure of
the Subtech Europe business in December 2023 in the Energy Division.
• Disposal of Businesses and Assets - includes a gain of £1.4m on disposal of a
vessel in the Maritime Transport Division.
• Other - Primarily relates to past service costs for the Merchant Navy Ratings
Pension Fund ("MNRPF") scheme as part of a review of the Fund's administrative
and benefit practices carried out by the Fund's lawyers. £4.7m of the tax
charge relates to de-recognition of the brought forward net UK deferred tax
asset as at 31 December 2022. An assessment was undertaken leading to
de-recognition of a deferred tax asset which has a significant and
non-recurring impact.
2.2 Covenant EBITDA (Earnings before Interest, Tax, Depreciation and
Amortisation)
Covenant EBITDA is calculated in line with the Group's banking covenants. It
is defined as the continuing operations underlying operating profit before
interest, tax, depreciation and amortisation, adjusted for the impacts of IFRS
16. The covenants require that EBITDA is calculated excluding the effects of
IFRS 16. The IFRS 16 adjustment is calculated as the difference between ROU
depreciation and operating lease payments.
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Underlying operating profit from continuing operations 16.8 14.0 29.6
Depreciation and amortisation 18.3 20.8 41.2
Less: Depreciation on right-of-use assets (7.7) (8.2) (16.3)
Amortisation of acquired intangibles (0.3) (0.5) (1.1)
IFRS 16 impact removed 0.2 0.9 1.0
Covenant EBITDA 27.3 27.0 54.4
2.3 Leverage
Leverage is calculated in line with the Group's banking covenants. It is
defined as rolling 12 month Covenant EBITDA divided by underlying net
borrowings. Underlying net borrowings are net borrowings including guarantees,
and excluding right-of-use operating leases, which are the leases which would
be considered operating leases under IAS 17, prior to the introduction of IFRS
16. Guarantees are those issued by a bank or financial institution to
compensate a stakeholder in the event of a Group company not fulfilling its
obligations in the ordinary course of business in relation to either advance
payments or trade debtors.
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Net borrowings 186.6 203.5 201.1
Less: right-of-use operating leases(1) (51.7) (50.6) (56.9)
Add: Guarantees and collateral deposits 9.9 1.6 5.6
Net debt - covenant basis 144.8 154.5 149.8
Covenant EBITDA 54.7 55.4 54.4
Net Debt : EBITDA 2.6 2.8 2.8
1 In accordance with IFRS 16 Leases, the Group has recognised total lease
liabilities of £53.9m at 30 June 2024 (30 June 2023: £56.2m; 31 December
2023: £61.2m). Under the calculation of "net debt - covenant basis", only
those leases which would be classified as finance leases under IAS 17 Leases,
the standard superseded by IFRS 16, are considered to be debt. Of the £53.9m
lease liability recognised under IFRS 16 (30 June 2023: £56.2m; 31 December
2023: £61.2m), only £2.2m would be classified as finance leases under IAS 17
(30 June 2023: £5.6m; 31 December 2023: £4.3m) and accordingly £51.7m is an
adjustment in the net debt calculation (30 June 2023: £50.6m; 31 December
2023: £56.9m).
2.4 Underlying 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 rolling 12 month underlying operating profit from continuing
activities, divided by average capital employed. Group ROCE is defined as the
rolling 12 month underlying operating profit, less notional tax, calculated by
multiplying the underlying effective tax rate by the underlying operating
profit, divided by average capital employed, as calculated below. Group ROCE
is a KPI that is used internally and externally and forms part of the
performance conditions under the Group's long-term incentive plan (LTIP)
scheme.
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Net assets 144.8 200.1 148.6
Less: right-of-use assets (62.0) (61.6) (67.4)
Add: net borrowings 186.6 203.5 201.1
Capital employed 269.4 342.0 282.3
Add: amortisation of customer relationships 0.3 0.5 1.0
269.7 342.5 283.3
Underlying operating profit 32.8 23.2 29.6
Notional tax at the underlying effective tax rate (9.8) (6.1) (8.6)
Underlying operating profit less notional tax 23.0 17.1 21.0
Average capital employed 306.1 367.3 318.4
Return on capital employed 7.5% 4.7% 6.6%
Six months ended 30 June 2024
Energy Defence Maritime Transport
£m £m £m
Net assets 153.5 54.5 85.5
Less: right-of-use assets (12.8) (4.4) (44.1)
Add: net borrowings 13.0 4.6 35.6
Capital employed 153.7 54.7 77.0
Add: amortisation of customer relationships 0.3 - -
154.0 54.7 77.0
Underlying operating profit 23.5 0.4 21.6
Average capital employed 166.4 71.9 77.9
Return on capital employed 14.1% 0.6% 27.7%
Six months ended 30 June 2023
Energy Defence Maritime Transport
£m £m £m
Net assets 175.2 88.9 87.7
Less: right-of-use assets (8.3) (2.5) (49.9)
Add: net borrowings 11.8 2.6 40.6
Capital employed 178.7 89.0 78.4
Add: amortisation of customer relationships 0.3 - 0.2
179.0 89.0 78.6
Underlying operating profit 15.2 1.6 20.1
Average capital employed 184.9 93.0 83.6
Return on capital employed 8.2% 1.7% 24.0%
Year ended 31 December 2023
Energy Defence Maritime Transport
£m £m £m
Net assets 156.6 51.6 83.8
Less: right-of-use assets (14.3) (3.8) (48.7)
Add: net borrowings 16.4 3.9 39.7
Capital employed 158.7 51.7 74.8
Add: amortisation of customer relationships 0.5 - 0.4
159.2 51.7 75.2
Underlying operating profit 15.7 1.5 23.3
Average capital employed 168.4 68.5 77.1
Return on capital employed 9.3% 2.1% 30.3%
2.5 Interest cover
Interest cover is calculated in line with the Group's banking covenants. It is
defined as a ratio of the rolling 12 month underlying operating profit,
adjusted for IFRS 16 impact, to rolling 12 month covenant interest.
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Interest payable on bank loans less interest receivable on short-term deposits 22.1 10.8 17.6
Finance lease interest - 0.2 0.1
Loan arrangement and other financing fees (6.0) (1.7) (4.4)
Covenant interest 16.1 9.3 13.3
Underlying operating profit 32.4 29.0 29.6
IFRS 16 impact removed (0.3) 0.5 0.3
32.1 29.5 29.9
Interest cover 2.0 3.2 2.2
2.6 Underlying earnings per share
Underlying earnings per share ("EPS") is calculated as the total of underlying
profit before tax from continuing operations, less income tax, but excluding
the tax impact on adjusting items and adjusted for deferred tax on finance
charges, less profit attributable to non-controlling interests, divided by the
weighted average number of ordinary shares in issue during the period.
Underlying earnings per share is a performance condition used for the Long
Term Incentive Plan schemes.
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Loss attributable to owners of the Company - continuing (0.8) (3.2) (51.0)
Adjusting items 4.1 16.9 48.2
Tax on adjusted items (0.1) (2.9) 5.0
Deferred tax on finance charges - - 3.6
Underlying profit attributable to owners of the Company 3.2 10.8 5.8
Basic weighted average number of shares 50,385,544 50,347,663 50,358,388
Diluted weighted average number of shares 51,109,257 50,712,253 50,634,837
Underlying basic earnings per share 6.4 21.4 11.4
Underlying diluted earnings per share 6.3 21.3 11.4
3. Segmental information
The Group has three operating segments reviewed by the Board based on their
core competencies: Energy, Defence, and Maritime Transport. The Board assesses
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 arm's 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 2024
Energy Defence Maritime Transport Corporate Continuing Discontinued Total
£m £m £m £m total total £m
£m £m
Segmental revenue 110.2 36.6 74.8 - 221.6 - 221.6
Inter-segmental sales - (0.1) - - (0.1) - (0.1)
Revenue 110.2 36.5 74.8 - 221.5 - 221.5
Underlying operating profit/(loss) 15.0 (0.4) 8.2 (6.0) 16.8 - 16.8
APMs (see Note 2) (0.6) (0.1) (0.1) (3.3) (4.1) - (4.1)
Operating profit/(loss) 14.4 (0.5) 8.1 (9.3) 12.7 - 12.7
Investment income 1.5
Finance expense (14.0)
Profit before tax 0.2
Tax expense (1.2)
Loss for the period (1.0)
Assets and liabilities
Segmental assets 235.8 80.0 152.4 92.6 560.8 - 560.8
Investment in joint ventures 1.9 3.4 2.1 - 7.4 - 7.4
Total assets 237.7 83.4 154.5 92.6 568.2 - 568.2
Segmental liabilities (84.2) (28.9) (69.0) (241.3) (423.4) - (423.4)
153.5 54.5 85.5 (148.7) 144.8 - 144.8
Other segmental information
Capital expenditure 11.4 3.2 7.2 0.3 22.1 - 22.1
Depreciation and amortisation 7.5 2.2 8.7 (0.1) 18.3 - 18.3
Six months ended 30 June 2023
Energy Defence Maritime Transport Corporate Continuing Discontinued Total
£m £m £m £m total total £m
£m £m
Segmental revenue 134.0 37.1 81.0 - 252.1 6.8 258.9
Inter-segmental sales - (0.1) - - (0.1) (0.1) (0.2)
Revenue 134.0 37.0 81.0 - 252.0 6.7 258.7
Underlying operating profit/(loss) 7.5 0.6 10.0 (4.1) 14.0 (6.5) 7.5
APMs (see Note 2) (0.6) 0.1 - (10.3) (10.8) - (10.8)
Operating profit/(loss) 6.9 0.7 10.0 (14.4) 3.2 (6.5) (3.3)
Investment income 1.1
Finance expense (8.7)
Loss before tax (10.9)
Tax income 1.3
Loss for the period (9.6)
Assets and liabilities
Segmental assets 253.8 110.9 161.1 102.1 627.9 - 627.9
Investment in joint ventures 2.5 3.6 2.4 - 8.5 - 8.5
Total assets 256.3 114.5 163.5 102.1 636.4 - 636.4
Segmental liabilities (81.1) (25.6) (75.8) (253.8) (436.3) - (436.3)
175.2 88.9 87.7 (151.7) 200.1 - 200.1
Other segmental information
Capital expenditure 13.0 0.7 2.5 0.2 16.4 - 16.4
Depreciation and amortisation 8.8 2.0 9.7 0.3 20.8 - 20.8
Year ended 31 December 2023
Energy Defence Maritime Transport Corporate Continuing Discontinued Total
£m £m £m £m total total £m
£m £m
Segmental revenue 266.5 72.6 157.2 - 496.3 6.8 503.1
Inter-segmental sales - (0.1) - - (0.1) (0.1) (0.2)
Revenue 266.5 72.5 157.2 - 496.2 6.7 502.9
Underlying operating profit/(loss) 15.7 1.5 23.3 (10.9) 29.6 (11.4) 18.2
APMs (see Note 2) (6.2) (25.2) (1.6) (15.2) (48.2) - (48.2)
Operating profit/(loss) 9.5 (23.7) 21.7 (26.1) (18.6) (11.4) (30.0)
Investment income 3.2
Finance expense (24.5)
Loss before tax (51.3)
Tax expense (11.0)
Loss for the year (62.3)
Assets and liabilities
Segmental assets 226.8 80.0 154.5 88.5 549.8 - 549.8
Investment in joint ventures 2.6 3.3 2.5 - 8.4 - 8.4
Total assets 229.4 83.3 157.0 88.5 558.2 - 558.2
Segmental liabilities (72.8) (31.7) (73.2) (231.9) (409.6) - (409.6)
156.6 51.6 83.8 (143.4) 148.6 - 148.6
Other segmental information
Capital expenditure 28.7 6.3 27.9 0.1 63.0 - 63.0
Depreciation and amortisation 17.4 4.2 19.3 0.4 41.3 - 41.3
4. Discontinued operations
On 6 March 2023, the Group announced that the entire share capital of James
Fisher Nuclear Holdings Limited and related properties ("JFN") was sold to
Myneration Limited, a wholly-owned investment vehicle of Rcapital Partners LLP
for consideration of £3. The Group has retained certain parent company
guarantees which historically were given to support the obligations of JFN.
No items have been presented as discontinued in 2024.
Discontinued operations 30.06.23 31.12.23
£m £m
Revenue 6.8 6.8
Inter-segmental sales (0.1) (0.1)
6.7 6.7
Expenses (13.2) (17.1)
Loss before taxation (6.5) (10.4)
Tax income/(expense) 0.1 (1.0)
Loss from operating activities after tax (6.4) (11.4)
Loss on remeasurement to fair value less costs to sell - -
Loss for the period from discontinued operations (6.4) (11.4)
Attributable to:
Owners of the Company (6.4) (11.4)
Non-controlling interests - -
(6.4) (11.4)
Cash flows used in discontinued operations 30.06.23 31.12.23
£m £m
Net cash from operating activities (0.4) (0.4)
Net cash from investing activities - -
Net cash from financing activities - -
Net cash flows for the period (0.4) (0.4)
5. Net finance expense
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Investment income:
Interest receivable on short-term deposits 1.4 1.0 2.9
Net interest on pension surplus 0.1 0.1 0.3
1.5 1.1 3.2
Finance expense:
Interest payable on bank loans and overdrafts (9.4) (5.8) (15.8)
Loan arrangement and other financing fees (2.8) (1.5) (4.4)
Unwind of discount on right-of-use lease liability (1.8) (1.4) (4.0)
Other - - (0.3)
(14.0) (8.7) (24.5)
Net finance expense - continuing operations (12.5) (7.6) (21.3)
6. Taxation
The Group's effective rate on profit before income tax is 600% (30 June 2023:
27.3%, 31 December 2023: (27.6)%). The effective income tax rate on underlying
profit before income tax, based on an estimated rate for the year ending 31
December 2024, is 29.5% (30 June 2023: 27.2%, 31 December 2023: 29.0%). Of the
total tax charge, £1.2m relates to overseas businesses (30 June 2023: £3.9m;
31 December 2023: £7.8m). Taxation on profit has been estimated based on
rates of taxation applied to the profits forecast for the full year.
7. Earnings per share
Basic earnings per share is calculated by dividing the profit/(loss)
attributable to shareholders by the weighted average number of ordinary shares
in issue during the year, after excluding 12,519 (June 2023: 47,855, December
2023: 12,519) 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/(loss) attributable to shareholders
by the weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares ("options") into
ordinary shares.
At 30 June 2024, 4,119,172 options (30 June 2023: 3,168,869, 31 December 2023:
2,649,876) 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.
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Loss after tax attributable to shareholders (0.8) (9.6) (62.4)
Number of Number of Number of
shares shares shares
Basic and diluted weighted average number of shares 50,385,544 50,347,663 50,358,388
pence pence pence
Basic and diluted earnings per share (1.7) (19.0) (123.9)
Basic and diluted earnings per share - continuing operations (1.7) (6.3) (101.2)
Basic and diluted earnings per share - discontinued operations - (12.7) (22.7)
8. Interim dividend
No interim dividend is proposed in respect of the period ended 30 June 2024
(2023: nil).
9. Goodwill
Movements during the period in the Group's goodwill are set out below:
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
At 1 January 78.3 116.3 116.3
Impairment - - (28.0)
Reclassification to assets held for sale (8.3) - (7.6)
Foreign exchange differences (1.2) (3.8) (2.4)
At period end 68.8 112.5 78.3
At 31 December 2023, the Group impaired JFD's goodwill by £25m after
factoring impact from delayed projects and considering management's decision
not to pursue certain opportunities. A further £3m impairment was recognised
in relation to three other cash generating units.
At 30 June 2024, the goodwill balance was reviewed for any indicators of
impairment. Although impairment indicators were identified, there have not
been any material changes to the forecasts and key assumptions from the 31
December 2023 assessment and therefore it was concluded that no impairments
were required. Sensitivities associated to the 31 December 2023 assessment are
disclosed on page 151 of the 2023 Annual Report and Accounts.
A full annual impairment test will be performed again at 31 December 2024.
10. Assets and liabilities held for sale
At 30 June 2024, £37.9m assets and £12.1m liabilities relates to the
RMSpumptools business within the Energy Division, which was disposed of on 8
July 2024 (see Note 16 for further details).
At 30 June 2024, £12.4m assets and £0.8m liabilities relate to the Martek
business within the Maritime Transport Division, which was disposed of on 6
September 2024 (see Note 16 for further details).
Year ended 31 December 2023
At 31 December 2023, £12.3m assets and £0.7m liabilities relate to the
Martek business within the Maritime Transport Division, which was disposed of
on 6 September 2024 (see Note 16 for further details).
At 31 December 2023, a vessel with net book value £0.6m in the Maritime
Transport division was classified as held for sale.
At 31 December 2023, £1.1m of property in the Energy Division was classified
as held for sale.
At 31 December 2023, a vessel with net book value of £0.7m in the Energy
Division was classified as held for sale.
The sale of the vessel in the Maritime Transport Division and vessel and
property in the Energy Division that were classified as held for sale at 31
December 2023 completed during 1H 2024.
11. Provisions
Cost of material litigation Warranty Other Total
£m £m £m £m
At 01.01.24 2.0 2.2 9.5 13.7
Utilised during the year - (0.4) (0.1) (0.5)
At 30.06.24 2.0 1.8 9.4 13.2
Provisions due within one year were £9.6m (30 June 2023: £11.5m; 31 December
2023: £9.4m) and provisions due greater than one year were £3.6m (30 June
2023: £1.4m; 31 December 2023: £4.3m).
Following the sale of the entire issued share capital of James Fisher Nuclear
Holdings Limited and related properties ("JFN") on 6 March 2023, a limited
number of performance guarantees covering an event of default by JFN in
performing its contractual duties and obligations remained within the Group.
JFN subsequently entered administration on 9 August 2023. As at 30 June 2024,
a provision of £6.4m (30 June 2023: £4.0m, 31 December 2023: £6.4m) has
been recognised in line with the final settlement that has been agreed.
Within the Defence Division, some international customers require defence
contractors to comply with their industrial co-operation regulations, often
referred to as offset requirements. The intention of offset requirements is to
enhance the social and economic environment of the foreign country by
requiring the contractor to promote investment in the country. The offset
requirements can be satisfied through purchasing supplies and services from
in-country vendors, providing financial support for in-country projects,
establishment of joint ventures with local companies (direct investment) and
establishing facilities for in-country operations. It can also involve
technology and technical knowledge transfer. In the event contractors fail to
perform in accordance with offset requirements, penalties may arise unless a
negotiated position can be reached with the respective authorities. Offset
obligations are calculated based on regulations, normally a fixed percentage
of the revenue contract value. Similarly, penalties are calculated on standard
methodology, normally a fixed percentage of the unfulfilled offset obligation.
Offset contractual compliance is monitored separately from the revenue
contract counterparty.
The Group has entered into foreign offset agreements as part of securing some
international business. As at 30 June 2024, a provision of £3.0m (30 June
2023: £2.5m, £31 December 2023: £3.1m) has been recognised in regard to
offset agreement penalties. The liability is expected to be settled over the
next one to two years (30 June 2023: one to two years,31 December 2023: one to
two years).
12. Retirement benefit obligations
The Group 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") which are regulated under UK pension legislation. The financial
statements incorporate the latest full actuarial valuations of the schemes
which have been updated to 31 December 2023 by qualified actuaries using
assumptions set out in the table below. These defined benefit schemes expose
the Company to actuarial risks, such as longevity risk, currency risk,
interest rate risk and market (investment) risk. In addition, by participating
in certain multi-employer industry schemes, the Company can be exposed to a
pro rata share of the credit risk of other participating employers. There are
no plans to withdraw from the MNOPF or MNRPF schemes in the foreseeable
future.
Movements during the period in the Group's defined benefit pension schemes are
set out below:
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Net surplus as at 1 January 5.8 5.1 5.1
Expense recognised in the income statement (0.1) (0.2) (2.4)
Contributions paid to schemes 1.0 1.0 1.5
Remeasurement (losses)/gains (2.0) (1.1) 1.6
Net surplus at period end 4.7 4.8 5.8
The Group's net surplus/(deficit) in respect of its pension schemes were as
follows:
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Shore staff 7.3 5.3 7.4
MNOPF (0.1) (0.3) -
MNRPF (2.5) (0.2) (1.6)
4.7 4.8 5.8
The principal assumptions in respect of these liabilities are disclosed in the
December 2023 Annual Report and Accounts. The Group has not obtained an
interim valuation for the period ended 30 June 2024. In the first half of
2024, the Group paid contributions to defined benefit schemes of £1.0m (June
2023: £1.0m; December 2023: £1.5m).
The Shore Staff plan assets and obligations have been updated to 30 June 2024
resulting in a surplus being recognised. A surplus, when calculated on an
accounting basis, is recognised when the Group can realise the economic
benefit at some point during the life of the plan or when the plan liabilities
are all settled and there are no remaining beneficiaries. Based on a review
of the plan's governing documentation, the Company has a right to a refund of
surplus assuming the gradual settlement of the plan liabilities over time
until all members have left. The Directors therefore take the view that it
is appropriate to recognise the surplus.
The most recent triennial actuarial valuation of the MNRPF scheme as at 31
March 2023 was finalised during the period. The share of the Group in the net
defined benefit obligation of the MNRPF has increased to 1.63% from 1.45% at
31 December 2023 resulting in an increase to the deficit and remeasurement
loss within OCI.
In 2018, the Trustees became aware of historic legal uncertainties relating to
changes to ill-health early retirement benefits payable from the MNRPF. In
order to resolve the issue, the Trustee sought directions from the Court, and
in February 2022, the High Court approved a settlement in principle.
During the period, nothing has been recognised within administrative expenses
relating to the Group's share of additional liabilities which have been
estimated to date (30 June 2023: £nil; 31 December 2023: £0.3m credit).
New issues were identified in 2021 in relation to the Fund's administrative
and benefit practices as part of the benefit review carried out by the Fund's
lawyers. The Trustee is undertaking further investigations, and the potential
quantum of these issues is uncertain. During the year ended 31 December 2023,
a £2.5m past service cost (30 June 2023: £nil) was recognised within
administrative expenses relating to the Group's share of additional
liabilities which have been estimated to date. This £2.5m combined with the
£0.3m credit regarding ill-health early retirement represents a net £2.2m
charge during the year ended 31 December 2023 (30 June 2023: £nil). No
further amounts relating to these matters were charged to profit during the
six months ended 30 June 2024.
13. Reconciliation of net borrowings
For the purposes of the cash flow statement and net borrowings, cash and cash
equivalents comprise:
Six months ended
30.06.24 30.06.23 31.12.23
£m £m £m
Cash at bank and in hand 76.8 90.3 77.5
Bank overdrafts (46.8) (70.5) (51.1)
30.0 19.8 26.4
Net borrowings comprise interest bearing loans and borrowings (including
cumulative preference shares) less cash and cash equivalents.
Six months ended 30 June 2024
01.01.24 £m Cash Other Transfers(2) Foreign exchange 30.06.24
flow non-cash(1) £m differences £m
£m £m £m
Cash and cash equivalents 26.4 7.6 - (4.1) 0.1 30.0
Cash and cash equivalents included within assets held for sale 0.4 - - 4.1 - 4.5
Debt due within one year - - - (167.1) - (167.1)
Debt due after one year (166.7) - (0.5) 167.1 - (0.1)
(166.7) - (0.5) - - (167.2)
Lease liabilities (61.2) 10.0 (2.6) - (0.1) (53.9)
Net borrowings (201.1) 17.6 (3.1) - - (186.6)
Six months ended 30 June 2023
01.01.23 Cash Other Transfers(2) Foreign exchange 30.06.23
£m flow non-cash(1) £m differences £m
£m £m £m
Cash and cash equivalents 22.8 (2.3) - - (0.7) 19.8
Cash and cash equivalents included within assets held for sale 2.8 - - (2.8) - -
Debt due within one year (36.6) 36.6 - - - -
Debt due after one year (121.9) (44.0) (1.1) - - (167.0)
(158.5) (7.4) (1.1) - - (167.0)
Lease liabilities (52.9) 8.5 (15.1) - 3.2 (56.3)
Net borrowings (185.8) (1.2) (16.2) (2.8) 2.5 (203.5)
Year ended 31 December 2023
01.01.23 Cash Other Transfers(2) Foreign exchange 31.12.23
£m flow non-cash(1) £m differences £m
£m £m £m
Cash and cash equivalents 22.8 5.7 - (0.4) (1.7) 26.4
Cash and cash equivalents included within assets held for sale 2.8 - - (2.4) - 0.4
Debt due within one year (36.6) 36.6 - - - -
Debt due after one year (121.9) (43.0) (1.8) - - (166.7)
(158.5) (6.4) (1.8) - - (166.7)
Lease liabilities (52.9) 18.1 (28.9) - 2.5 (61.2)
Net borrowings (185.8) 17.4 (30.7) (2.8) 0.8 (201.1)
1 Other non-cash includes lease additions and finance expense related to the
unwind of discount on right-of-use lease liability and amortisation of
financing fees.
2 Transfers during the period includes the reclassification of £4.1m cash and
cash equivalent balances from cash and cash equivalents to assets held for
sale (30 June 2023: £nil; 31 December 2023: £0.4m) and nothing in respect of
cash disposed of from assets held for sale (30 June 2023: £2.8m; 31 December
2023: £2.8m).
14. Commitments and contingent liabilities
Capital commitments for which no provision has been made at 30 June 2024
amounted to £2.0m (30 June 2023: £4.1m; 31 December 2023: £16.4m).
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) Subsidiaries of the Group have issued performance and payment guarantees to
third parties with a total value of £25.4m (30 June 2023: £26.8m, 31
December 2023: £27.1m).
c) 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.
d) 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.
e) The Group operates and has overseas investments in multinational and less
developed markets which presents increased operational and financial risk in
complying with regulation and legislation and where local practices in those
markets may be inconsistent with laws and regulations that govern the Group.
Given this risk, from time-to-time matters are raised and investigated
regarding potential non-compliance with the legal and regulatory framework
applicable to the Group. In preparing the financial statements, judgements and
estimates were required to be made in respect of such potential regulatory
matters. The Directors' judgement, relying on the findings of an independent
audit as well as the Group's own investigations, is that the likelihood of
adverse findings against the Company in respect of such matters is not
probable albeit possible, and no provision has been included in the financial
statements of the Group.
As described in Note 11, the Group has entered into foreign offset
arrangements as part of securing some international business. The remaining
contractual offset obligation at 30 June 2024 is £20.7m (30 June 2023:
£23.4m; 31 December 2023: £22.0m). The penalties which could be incurred if
the fulfilment of the remaining offset obligation is similar to the historical
spend profile, is estimated to be £3.0m (30 June 2023: £3.6m; 31 December
2023: £3.0m). The contingent liabilities disclosed assume no change from the
current contractual obligations. However, contract time extensions have been
requested and plans are in place to mitigate the penalty risk as far as
possible.
In the normal course of business, the Company and certain subsidiaries have
given parental and subsidiary guarantees in support of loan and banking
arrangements and the following:
• A guarantee has been issued by the Group to charter parties in respect of
obligations of a subsidiary, James Fisher Everard Limited, in respect of
charters relating to 12 vessels. The charters expire between 2024 and 2033.
• The Group has given an unlimited performance guarantee to the Singapore Navy
in the event of default by First Response Marine Pte Ltd (its Singapore joint
venture), in providing submarine rescue and related services under its
contract.
There have been no amounts recognised during the year in relation to these
guarantees.
15. Related party transactions
Except the appointment of a new Non-Executive Director, there were no changes
to related parties or the nature of associated transactions from those
disclosed in the Annual Report and Accounts for the year ended 31 December
2023.
16. Post balance sheet events
On 8 July 2024, the Group disposed of its 100% shareholding in RMSpumptools
Ltd from its Energy Division to ChampionX Corporation for £82.8m cash
consideration.
The net assets of RMSpumptools on 8 July 2024 and provisional gain on disposal
that will be recorded in the income statement in 2H 2024 were as follows:
£m
Goodwill 8.3
Property, plant and equipment 1.3
Right-of-use assets 0.9
Inventories 12.1
Trade and other receivables 11.0
Cash and cash equivalents 3.3
Trade and other payables (8.6)
Lease liabilities (1.0)
Taxation liabilities (1.2)
Net assets disposed 26.1
Costs in relation to businesses sold 7.1
Gain on disposal 49.6
Consideration received 82.8
Cash flow from the disposal of businesses
Cash received 82.8
Cash and cash equivalents disposed of (3.3)
Costs in relation to businesses sold (7.1)(1)
72.4
(1) £7.1m disposal costs of which £4.2m was incurred during the period (see
Note 2).
On 6 September 2024, the Group disposed of its 100% shareholding in Martek
Holdings Limited and its subsidiaries from its Maritime Transport Division to
a regional fund managed by Foresight Group for £12.1m gross consideration, of
which £1.5m is deferred consideration payable in equal instalments on the
first and second anniversary of the disposal. Total costs of disposal are
expected to be around £1.0m. Due to the timing of this disposal, it has not
been possible to calculate the provisional gain or loss on disposal as at the
date of this announcement.
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AnnouncementREG - Fisher (James) - Full Year Results
AnnouncementREG - Fisher (James) - Notice of Analyst and Investor Presentations
AnnouncementREG - Fisher (James) - Full Year Trading Update and Notice of Results
Announcement