JAMES FISHER AND SONS PLC Pioneering safe and trusted solutions
11 March 2021
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Income statement
2020 £m
2019 £m
revenue | 518.2 | 617.1 | ||
cost of sales | (380.6) | (432.4) | ||
gross profit | 137.6 | 26.6% | 184.7 | 29.9% |
administrative expenses | (98.7) | (119.2) | ||
associates / jvs | 1.6 | 0.8 | ||
underlying operating profit * | 40.5 | 7.8% | 66.3 | 10.7% |
net finance charge | (9.0) | (7.8) | ||
underlying profit before taxation * | 31.5 | 58.5 | ||
tax on underlying pbt * | (7.2) | (11.6) | ||
underlying profit after tax * | 24.3 | 46.9 | ||
effective tax rate | 22.8% | 19.8% |
£20.5m (17%) reduction
Gross margin impacted by lower volumes; prices held up
No material currency impact -
GBP:USD average of $1.29 (2019: $1.28)
Due to increased borrowings at
start of year
Separately disclosed items and statutory operating profit
2020 £m
2019 £m
underlying * | 40.5 | 66.3 |
acquisition related | (3.9) | (0.2) |
business disposals | (3.5) | - |
impairments: | ||
DSVs | (31.6) | - |
intangible assets | (19.4) | - |
tangible fixed assets | (2.4) | (2.7) |
receivables | (19.3) | (6.3) |
Marine Support restructure | (3.9) | - |
costs of material litigation | - | (1.5) |
total separately disclosed items | (84.0) | (10.7) |
statutory | (43.5) | 55.6 |
c. 200 people; annualised saving of £8.0m
£3.5m credit for deferred consideration in 2019
German instrumentation business
£17m Marine Support goodwill; £2.4m of IP and devex
£17m on 3 projects in challenging locations
cash flow | 2020 £m |
acquisition related | (0.7) |
Marine Support restructure | (3.9) |
business disposals | 1.3 |
Net | (3.3) |
* before separately disclosed items
Summarised cash flow
2020 £m
2019 £m
* before separately disclosed items
underlying operating profit * | 40.5 | 66.3 |
depreciation and amortisation | 34.2 | 29.9 |
underlying ebitda * | 74.7 | 96.2 |
working capital | 19.5 | (21.3) |
pension / other | (6.5) | (9.1) |
operating cash flow | 87.7 | 65.8 |
cash outflow on separately disclosed | (3.9) | (7.4) |
interest paid & tax | (14.6) | (14.6) |
net capital expenditure | (17.8) | (90.2) |
businesses acquired / disposed | (7.1) | (19.1) |
dividends paid | (4.0) | (18.4) |
other | (1.9) | (0.6) |
decrease / (increase) in debt | 38.4 | (84.5) |
net borrowings # at 1 January | (203.0) | (113.6) |
non-cash movements | (10.4) | (4.9) |
net borrowings # at 31 December | (175.0) | (203.0) |
# before operating leases of £23.1m (2019: £27.4m)
Ebitda 22% lowerCash conversion of 217% (2019: 99%)Fathom £1.2m, deferred consideration £6.0m, jv's £0.5m, m&a costs £0.7m,disposals (£1.3)m
Interim divided of 8.0p per share
times)
Net debt : ebitda 2.3 times (2019: 2.1
Liquidity and balance sheet
Liquidity
2020 £m
2019 £m
unsecured RCFs | 300.0 | 250.0 |
headroom | 120.2 | 41.7 |
covenant calculations: | ||
net debt : ebitda * | 2.7 | 2.7 |
interest cover (>3.0) | 6.1 | 12.3 |
Expiry
£m
2021 (December) | 20.0 |
2022 (£50m Jan, £112.5m Jul/Aug) | 162.5 |
2023 | - |
2024 (July) | 87.5 |
2025 (March) | 30.0 |
300.0 |
net debt : ebitda covenant
31.12.20 | 3.95 |
30.06.21 | 3.75 |
31.12.21 | 3.50 |
* includes bonds and guarantees £28.3m (2019: £54.8m)
Balance Sheet
31.12.20 £m
31.12.19 £m
intangible assets | 186.6 | 215.2 |
property, plant and equipment | 188.9 | 237.7 |
investments | 8.9 | 9.9 |
working capital | 65.7 | 106.3 |
deferred consideration | (1.7) | (8.2) |
tax | (4.1) | (10.7) |
pensions | (10.3) | (5.8) |
capital employed | 434.0 | 544.4 |
net borrowings # | (175.0) | (203.0) |
right-of-use operating leases | (23.1) | (27.4) |
equity | 235.9 | 314.0 |
▪ Working capital : sales 13% (2019: 17%)
# before operating leases
Operational review
revenueunderlying operating profit *
2020 £m
2019 £m
% change
2020 £m
2019 £m
% change
Marine Support | 249.4 | 311.6 | (20) | 10.1 | 24.5 | (59) |
Specialist Technical | 130.4 | 149.4 | (13) | 14.0 | 18.4 | (24) |
Offshore Oil | 78.0 | 88.2 | (12) | 11.2 | 14.2 | (21) |
Tankships | 60.4 | 67.9 | (11) | 8.0 | 12.0 | (33) |
Corporate costs | - | - | (2.8) | (2.8) | ||
Group | 518.2 | 617.1 | (16) | 40.5 | 66.3 | (39) |
▪ Three divisions (ST, OO,T) resilient through pandemic
▪ Revenue 12% down
▪ UOP 25% lower
▪ Marine Support
▪ Subsea projects c. £70m lower
▪ One-off restructuring
▪ SG&A lower in all divisions
Marine Support
▪ Ship-to-ship services
▪ Strong H1 helped by energy price-driven trading activity
▪ Making promising inroads into growing LNG markets
▪ Subsea
▪ Many projects delayed or cancelled due to weak oil & gas market
▪ Dive support vessels underutilised
▪ Actions taken on costs; new management in place with focus on sustainable growth
▪ Renewables
▪ Offshore wind projects delayed by Covid-19
▪ Leveraging strength in niche applications
▪ Growing order backlog in UK, Taiwan, US
* before separately disclosed items
2020 | 2019 | |
revenue (£m) | 249.4 | 311.6 |
underlying operating profit * (£m) | 10.1 | 24.5 |
underlying operating margin * (%) | 4.0 | 7.9 |
Specialist Technical
▪ JFD
▪ Resilient financial performance in challenging environments
▪ Covid-19 impact felt in Asia Pacific project delays, product supply chain disruptions, and sub rescue service delivery
▪ World-first 500m saturation diving system delivered for commissioning
▪ Customer handover completed for six swimmer delivery vehicles
▪ JF Nuclear
▪ Excellent customer collaboration helped mitigate Covid-19 impacts
▪ Good revenue growth and improving profitability
▪ Growing volumes at Dounreay rig hall
* before separately disclosed items
2020 | 2019 | |
revenue (£m) | 130.4 | 149.4 |
underlying operating profit * (£m) | 14.0 | 18.4 |
underlying operating margin * (%) | 10.7 | 12.3 |
Offshore Oil
▪ Scantech AS
▪ Strong customer relations sustained business through series of lockdowns in Norway
▪ New opportunities outside core oil & gas market
▪ Scantech Offshore
▪ Strong financial performance underpinned by long-term fleet rental model
▪ New opportunities in offshore wind bubble-curtains
▪ JF Offshore
▪ High demand for decommissioning cutting services
▪ Strong improvement in subsea excavation
▪ RMSpumptools
▪ Sustained strong demand for artificial lift technology which extends life of production wells
* before separately disclosed items
2020 | 2019 | |
revenue (£m) | 78.0 | 88.2 |
underlying operating profit * (£m) | 11.2 | 14.2 |
underlying operating margin * (%) | 14.4 | 16.1 |
Tankships
▪ Sharp drop in demand in May 2020 due to Covid-19
▪ Gradual recovery thereafter
▪ c. 90% utilisation through Q4
▪ Ongoing fleet renewal
▪ One older vessel (Galway Fisher) sold
▪ Developing plan to access dual fuel tonnage by 2022
▪ Cattedown operations resilient notwithstanding lockdowns
* before separately disclosed items
2020 | 2019 | |
revenue (£m) | 60.4 | 67.9 |
underlying operating profit * (£m) | 8.0 | 12.0 |
underlying operating margin * (%) | 13.2 | 17.7 |
Strategic review - introduction
▪ Embarked on full portfolio review early 2020; objective to revisit and retest our Group strategy
▪ Good progress made prior to Covid-19
▪ Management focus shifted to deal with Covid-19 disruption, but significant work continued
▪ Commenced cultural transition to a purpose-led, values-driven, sustainable company
▪ Focus on delivering sustainable financial returns and more effective engagement with all stakeholders
▪ Capital Markets Day H1 2021
Strategic review - context
Strong fundamentals | Scope for significant improvement |
Strong track record of EPS and dividend growth, and cash generation since 2001 |
|
Innovative, niche player responding to demanding and technical challenges |
|
Highly skilled, dedicated and pioneering workforce |
|
Operating in diverse end markets |
|
Strategic review - opportunities
▪ Refocus on structurally growing niche segments in marine, defence and energy markets
▪ Drive growth across the energy mix
▪ Invest in current and adjacent activities benefiting from the energy transition
▪ Support growing focus on efficiency improvement and emissions reductions
▪ Broaden offshore wind capabilities, deploying new technologies and supporting maturing installed base
▪ Accelerate growth in developing geographies
▪ Asia, Africa, Latin America - extend to maximise profitable growth
▪ Partner to leverage local knowledge and resources
▪ Explore potential to expand into adjacent end markets
Strategic review - critical enablers
▪ Four strategic enablers and their supporting processes will assist delivery
1. Strategy and planning
▪ Robust, data-driven process to underpin investment priorities
2. Capital allocation
▪ Focus on capital efficiency and increasing returns on investments
▪ Invest in organic growth opportunities
▪ Selective M&A - fill gaps in portfolio, broaden geographies, increase service offering
3. Commercial excellence
▪ Value selling, stakeholder management, price optimisation
4. Operational excellence
▪ Project management, performance management, risk management
Strategic review - back to basics
Refocus on:
Invest where:
▪ Quality of earnings
▪ Markets are growing
▪ Driving gross margin improvements
▪ We have competitive advantage
▪ Sustainable, profitable growth derived from USPs
▪ Opportunity for higher margins
Summary and outlook
▪ Resilient performance during Covid-19 by majority of the business
▪ Trading in line with expectations
▪ Broad spread of end markets, customers and geographies
▪ Track record of converting operating profit into cash
▪ Continued focus on ESG
▪ Strategic review aims to deliver significant improvement
▪ Quality of our business
▪ Grow operating margins
▪ Sustainably increase the return to our stakeholders
Free cash flow
Appendix 1
£m | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Underlying ebitda | 49.9 | 57.6 | 64.4 | 72.6 | 68.8 | 75.4 | 81.4 | 90.5 | 94.3 | 74.7 |
Working capital movement | (9.3) | 1.6 | 7.6 | (11.9) | (22.9) | (19.0) | (43.9) | 11.1 | (21.3) | 19.5 |
DB pensions / other | (2.7) | (2.8) | (9.4) | (4.1) | (2.7) | (4.4) | (6.2) | (5.4) | (6.7) | (6.5) |
Operating cash flow | 37.9 | 56.4 | 62.6 | 56.6 | 43.2 | 52.0 | 31.2 | 96.2 | 66.3 | 87.7 |
Interest & tax | (9.3) | (8.3) | (10.1) | (9.1) | (12.2) | (10.9) | (12.9) | (13.3) | (14.6) | (14.6) |
Maintenance capex | (8.4) | (11.8) | (9.9) | (11.4) | (9.8) | (7.4) | (6.9) | (21.3) | (13.3) | (7.4) |
Other | (1.2) | (0.5) | (2.2) | (2.9) | (2.3) | (0.5) | (0.8) | (0.8) | (9.9) | (5.8) |
Free cash flow | 19.0 | 35.8 | 40.4 | 33.2 | 19.0 | 33.3 | 10.5 | 60.8 | 28.5 | 59.9 |
3 year average 49.7
5 year average 38.6
10 year average 34.1
Net borrowings
Appendix 2
2020 £m | 2019 £m | % change | |
net borrowings - IFRS 16 basis | 198.1 | 230.4 | (32.3) |
right of use * operating leases | (23.1) | (27.4) | 4.3 |
net borrowings - IAS 17 basis | 175.0 | 203.0 | (28.0) |
bonds / guarantees under bank covenants | 28.3 | 54.8 | (26.5) |
net borrowings for bank covenants | 203.6 | 257.8 | (54.5) |
* Total right of use lease liabilities of £32.5m (2019: £30.2m) include £9.4m (2019: £2.8m) classified as finance lease under IAS 17
Disclaimer
This presentation is confidential and is delivered to interested parties for information only. It is delivered solely on the basis that neither the whole nor any part of the information contained in this presentation may be disclosed to, or used or relied upon by, any other person or used for any purpose without the prior written consent of James Fisher and Sons plc (JFS).
The information contained in this presentation, and upon which this presentation is based, has been derived from publicly available information. None of the information on which this presentation is based has been independently verified. Accordingly, neither JFS nor any member of JFS nor any of its connected persons makes any representation or warranty, assurance or undertaking, express or implied, with respect to the accuracy, adequacy, completeness or reasonableness of the presentation or of the information contained in the presentation, or on which the presentation is based, or that this information remains unchanged after the issue of this presentation.
This presentation is not to be construed as carrying the endorsement of JFS or any of its connected persons. Consequently, neither JFS nor any of its connected persons accepts any responsibility or liability to any person to whom the presentation is made available for the accuracy, adequacy, completeness or reasonableness of the information contained in it or otherwise.
The presentation is not intended to recommend any strategic decision by JFS or any of its connected persons and should not be considered as a recommendation supporting any of the options discussed herein by any member of JFS or any of its connected persons. Each person to whom the presentation or any part thereof is made available, is responsible for and must make their own independent assessment of the presentation and of the information contained within it.
Nothing in the presentation is, or should be relied upon as a promise or representation as to the future.
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James Fisher & Sons plc published this content on 11 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2021 10:03:05 UTC.
