TIDMFSJ
RNS Number : 8062X
Fisher (James) & Sons plc
28 April 2023
28 April 2023
James Fisher and Sons plc
Full year results for the year ended 31 December 2022
James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'),
the leading marine service provider,
announces its unaudited results for the year ended 31 December
2022.
GBPm unless otherwise stated
Continuing operations 2022 2021* Change
--------------------------------------- ------- ------- ----------
Revenue 478.1 442.4 +8.1%
Operating profit/(loss) 24.7 (20.7) +GBP45.4m
Profit/(loss) before tax 14.5 (28.9) +GBP43.4m
Diluted earnings/(loss) per share (p) 17.4 (55.0) +72.4p
Underlying operating profit ** 26.4 28.0 -5.7%
Underlying operating profit margin 5.5% 6.3% -80bps
Return on capital employed 3.9% 3.6% +30bps
--------------------------------------- ------- ------- ----------
Loss from discontinued operations (19.8) (0.1) -GBP19.7m
* restated due to a business classified as discontinued
operations
** excludes adjusting items of GBP1.7m loss (2021: GBP48.7m
loss)
Performance summary:
-- Good strategic and financial progress made in stabilising the Group
-- Sale of three non-core businesses and agreement to sell
Swordfish Dive Support Vessel in December 2022
o GBP18. 5m received in December 2022; GBP20m received in January 2023
-- Revenue from continuing operations increased 8.1% to GBP478.1m
-- Underlying operating profit 5.7% behind 2021 (2022: GBP26.4m; 2021: GBP28.0m)
-- Operating profit turnaround following loss in 2020 and 2021;
significant reduction in adjusting items
-- JFN sold in March 2023; GBP19.8m loss in the year including
significant operating loss and impairment charges
-- Reorganisation around three divisions: Energy, Defence and Maritime Transport
-- Committed financing agreed with lenders, expected to be concluded in coming weeks
Commenting on the results, Chief Executive Officer, Jean Vernet,
said:
"Since I joined the Group in September 2022, I am pleased to
report that progress has been made both strategically and
financially. We have a new leadership team in place ready to
address the challenges that we currently face.
In a macro-economic environment that remains uncertain for 2023,
we expect our industry verticals to be robust. Our 2023 priority is
to show significant progress in our turn-around plan by
implementing the simplification of our divisional structure, and by
delivering on key change management objectives. Our trading in Q1
2023 gives us confidence in the outturn for the year. "
For further information:
Chief Executive
Officer
James Fisher and Jean Vernet Chief Financial
Sons plc Duncan Kennedy Officer 020 7614 9503
Richard Mountain
FTI Consulting Susanne Yule 0203 727 1340
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Notes:
1. James Fisher uses alternative performance measures (APMs) as
key financial indicators to assess the underlying performance of
the business. APMs are used by management as they are considered to
provide useful additional information. APMs include underlying
operating profit, underlying earnings per share and underlying
return on capital employed. An explanation of APMs is set out in
Note 2 in the full year results.
2. Cautionary statement: This announcement contains certain
forward-looking statements with respect to the operations,
performance and financial condition of the Group. By their nature,
these statements involve uncertainty since future events and
circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this announcement and James Fisher and Sons plc
undertakes no obligation to update these forward-looking
statements. Nothing in this statement should be construed as a
profit forecast.
Chairman's review
Introduction
The Company I joined in 2021 faced several strategic and
operational challenges. It was a portfolio of diverse businesses
which lacked either synergies or a common Company purpose; it had
an overly leveraged Balance Sheet, a complicated organisational
structure and a lack of operational focus and commercial control -
all of which had contributed to the disappointing financial
performance over the past couple of years. I am pleased to report
that early progress has been made to address these challenges with
a new leadership team in place and progress on refinancing our
borrowing facilities to provide a stable platform for the
Group.
Given our debt maturity profile, we had originally planned to
refinance later in 2023. However, the technical restrictions and
subsequent bank waiver relating to parent company guarantees on the
disposal of James Fisher Nuclear accelerated this process. As
announced on 26 April 2023, we have agreed terms on a new, secured,
GBP210m revolving credit facility with our existing lenders.
Conditions to be completed post-signing of the loan documentation
relate to finalising security and some inter-bank arrangements. We
anticipate that the refinancing will complete over the coming
weeks.
These recent developments have led to a regrettable delay in the
publication of our Results and Annual Report for 2022 for which we
apologise. However, the business has performed well during the
first quarter of 2023 with revenue and profit above our internal
Budget and well ahead of the prior year.
Financial performance
After the three years, from 2019 to 2021, which saw the
Company's underlying operating profit fall by 58%, to GBP28
million, 2022 was a year of stabilisation. Revenues from our
continuing operations grew year on year by 8.1% to GBP478.1m,
reflecting growth in our Marine Support, Offshore Oil and Tankships
divisions, which was partially offset by a disappointing year in
our Specialist Technical division. Underlying operating profit from
continuing operations is 5.7% below 2021 at GBP26.4m (2021:
GBP28.0m). Similar to our revenue profile, improved profitability
across Marine Services, Tankships and Offshore Oil was offset by
significant profit falls in our Defence and Nuclear businesses, the
latter of which is disclosed as a Discontinued Operation. Operating
margins from continuing operations remained weak at 5.5% (2021:
6.3%) and improving our operational performance to increase margin
is a key priority for the new leadership team going forward.
As noted last year, the poor performance of several past
acquisitions has contributed to an increase in debt levels and a
long-term decline in return on operating capital employed ("ROCE"),
which fell to 3.6% in 2021. In 2022, ROCE improved to 3.9% which
remains an unsustainably low level long-term. As a result, one of
our priorities in 2022 was to dispose of non-core assets and reduce
the level of the Group's leverage. I am pleased to report that we
were successful in doing so. Three businesses were sold in December
2022, being the Mimic and Prolec businesses and the UK operations
of Strainstall; and, subsequent to the year end, the Swordfish dive
support vessel. All disposals were from the Marine Support
division. The business sales in December raised GBP18.5m in
proceeds, helping to reduce our net bank borrowings at the year end
from GBP139.6m to GBP132.9m. The sale of the Swordfish vessel has
reduced net debt further, by c.GBP20m, with these proceeds being
received in January 2023.
We have continued to streamline and focus our portfolio and sold
the Nuclear Decommissioning business in March 2023. This disposal
will not reduce debt but will help the Company streamline its
activities to improve our focus on our chosen end markets and will
help to improve our operating margin. This refocusing of the
portfolio will continue over the next couple of years.
I regret that, having not paid a dividend in 2021, we were
unable to pay an interim dividend in 2022 and the Board is not
recommending the payment of a final dividend for the year. I
recognise the disappointment this will cause our shareholders, and
I am committed to rectifying this, once circumstances permit.
A new CEO
Having joined the Company in 2019, Eoghan O'Lionaird stepped
down as Chief Executive Officer ("CEO") in early September and I
would like to thank him for having steered us through a difficult
period in the Company's history - not least of which were the
challenges presented by the Covid-19 pandemic. His place as CEO was
taken by Jean Vernet, whom I am delighted to welcome to the Board.
Jean, who was most recently Chief Executive Officer of Smiths
Group's largest division, John Crane, is an internationally
experienced business leader with extensive energy sector knowledge
and experience. His background is ideally suited to leading the
turnaround of James Fisher and then positioning the Company to
prosper in markets with growth potential where it has competitive
advantage. I am delighted to see the injection of pace that Jean
has brought and wish him every success, not only with addressing
the undoubted challenges that lie ahead, but also steering the
Company towards expansion in the future.
Reshaping the Company
Under Jean's leadership, we have embarked on reshaping the
Company, to turn it from being a collection of disparate businesses
into a group with a more coherent structure and purpose that is
able to realise the synergies inherent in being part of James
Fisher. This will take time and will require major organisational
and cultural change over the coming years against a challenging
backdrop in terms of balance sheet and operating environment. Pace
is therefore critical and, from 1 January 2023, the Company has
been reorganised into three new divisions which reflect our
customer verticals, namely Energy, Defence and Maritime Transport.
Each is now directed by a divisional leader, two of whom have been
recruited externally. We believe this integration will make our
businesses more understandable to customers and will enable us to
capture operating efficiencies. We are well placed to take
advantage of the energy transition, with businesses designed to
support the growth of offshore wind farms and making traditional
oil and gas operations more sustainable - including through safe
decommissioning. We are world leaders in a number of specialist
areas of marine and deep sea operations, both for defence and
commercial sector clients.
We now have a number of key priorities. First, we have to turn
around the Group's financial performance. Through improving
profitability and asset utilisation we will reduce net debt and
deliver a value enhancing return on capital employed. Central to
this is focusing the portfolio on businesses with attractive end
markets and competitive advantage - which means divesting
businesses which fail to meet these criteria. Secondly, we will
continue to simplify and prioritise the delivery of high quality
products and services to our customers, while capturing the
synergistic benefits of being part of James Fisher. Thirdly, we
must improve execution across the Group through our business
excellence programme, and finally we will create a clearer strategy
for recruiting and developing talented employees. These actions
will enable us to build a strong platform for future growth and
allow our stakeholders to share in the benefits after disappointing
recent financial and operational results.
We operate in some exciting growth markets described by Gunter
Pauli in his book, "The Blue Economy" as the "sustainable use of
ocean resources for economic growth, improved livelihoods and jobs
while preserving the health of the ocean ecosystem". Areas such as
maritime transport and offshore oil and gas are already well
established, while renewable energy in particular offers new
opportunities over the longer term. We are already developing
solutions to preserve the health of the ocean ecosystem, for
example, our bubble curtain solution which protects sea life from
the acoustic impact of constructing offshore windfarms.
Employees
In common with most businesses, James Fisher is dependent on the
capability and commitment of its employees. We value our employees
highly - they are the lifeblood of the Company - and the Board
spends considerable time on Health and Safety, employee well-being
and following up the results of the annual engagement survey. This
year, in the face of the global challenges posed by increases in
the cost of living, we also looked to support the most vulnerable
of our employees with one-off payments, as well as weighting annual
pay increases towards those earning the least. I am very grateful
to all our employees for their resilience in difficult times and
appreciate the hard work that is going into improving our
operational and financial performance.
Conclusion
James Fisher has experienced a challenging few years and any
turnaround of the scale we are undertaking will take time and
carries a degree of risk, meaning there will likely be bumps along
the way. However, the energy and direction that the new leadership
team, under Jean Vernet, has brought to the Company in only a few
months gives the Board confidence that the challenges we face are
being addressed at pace. We have identified the strategic
priorities and execution is already underway. We entered 2023 as a
more streamlined company with a new senior management team and a
strategy for the future based around "Focus, Simplification and
Delivery". We have made progress in refinancing our borrowing
facilities to provide a stable financial platform from which to
execute our plans.
I am confident that what we are setting out to achieve is right
for James Fisher and its stakeholders, reflecting its DNA as a
175-year-old business built on the sea and its marine environment.
Implementing our strategy and taking advantage of our position in a
number of the growing markets of the "Blue Economy" should ensure a
brighter future for James Fisher in the years to come.
Chief Executive's review
If the 175-year history of James Fisher and its distinguishing
characteristics - a love of the sea and a pioneering spirit - were
the first features that attracted me to join the Company in
September 2022, my confidence in the scale of the opportunity for
the business has only grown over the following months. I have found
an organisation with genuine expertise in complex and
unconventional facets of maritime life and businesses with unique,
creative capabilities which solve customer problems and add value.
I have also found a company of passionate and energetic people,
resilient to pressure and adaptable to changing circumstances.
I admired the ethos of one of the Company's early leaders, Sir
John Fisher, who said that in all of the years he had been in
shipping, he had 'rarely known a time when there was not a crisis
of some sort', but he believed there was always a rapid recovery
waiting around the corner, provided preparations were made during
the crisis itself. Reading up on the Company's history, I was
struck by the prompt responsiveness of James Fisher's management to
new challenges and opportunities, and the Company's traditional
adherence to financial prudence. I also discovered that on the
occasions that financial prudence was forgotten, trouble soon
emerged. It seemed to me there are lessons from the past that can
be applied today.
Straightforward analysis
In my first 90 days as CEO, I concentrated on getting to know
employees at all levels within the Group and analysing what needed
to be done to meet our commitments to stakeholders on the
financial, sustainability and operational targets we had set
ourselves. The outcome of this analysis was surprisingly
straightforward:
-- We had to re-adopt financial prudence by divesting ourselves
of non-core assets and focusing on our areas of expertise;
-- We had to restore the culture of leaders being accountable
for performance, delivered against clear corporate objectives;
and
-- We had to build a simpler, united and cohesive organisation
from what had become a series of siloes.
I am pleased to report that we have already made very good
progress in all three respects. We have been successful in
divesting non-core businesses, as well as selling significant fixed
assets, during the latter part of 2022 and into early 2023. We made
important changes at senior management level across several of our
businesses, to improve profit and loss ("P&L") accountability,
promoting energetic and disciplined leaders from inside the
organisation, as well as bringing in new talent, who have a
demonstrable track record in achieving operational targets. In
order to simplify the Company and make it more understandable to
customers, we are reorganising our businesses and building more
integrated and effective teams.
One James Fisher
As a Group that has missed profit expectations several times
over the last few years, our focus must be on rebuilding
credibility, delivering on expectations and, of course, achieving a
recovery in profitability. This means playing to our strengths of
being unconventional, responsive and bold, and delivering
operational excellence. In terms of simplification, it means that,
rather than running a collection of 20 or so businesses, we need a
mindset of being "one James Fisher". To underpin this, we have set
up a single, tight, cohesive, decision-driven Executive Committee
that concentrates on a limited set of shared priorities to achieve
results for the whole Group.
We have also reorganised the Group from 1 January 2023 into
three distinct divisions: Energy, Defence, and Maritime Transport.
These divisions were chosen to align our internal structure to the
market opportunities for the Group. The Energy division combines
the old Marine Support and Offshore Oil divisions, minus
Fendercare, which is added to the Tankships division to create
Maritime Transport. JFD is the only component of the Defence
division. Each division is led by new leaders, who were appointed
because of their commercial acumen, their extensive industry
experience and their rigorous focus on operational excellence. The
divisional leaders sit on the Executive Committee, and their
priority is to put the Group as a whole ahead of divisional
objectives.
An immediate outcome of working as one company is the pooling of
operating resources internally. In addition, support functions,
such as finance, HR, IT and legal, can be standardised and shared,
eliminating unnecessary duplication.
As one James Fisher, it is vital that we all speak a common
business language. Consequently, the LEAN Six Sigma operating
principles that have been in place in some parts of James Fisher
are now being rolled out across the entire Group. Its purpose is to
improve performance by systematically removing waste and reducing
variation. We are embedding 'black belts'- professionals with a
deep knowledge of Lean Six Sigma principles - in each of the three
divisions, complemented by a larger number of 'green belts' with a
very good understanding of the system.
Relentless pursuit of targets
Armed with these tools and working to a simpler set of common
corporate objectives, every business unit is now expected to pursue
the targets of an operating profit margin of at least 10% and a
return on capital employed of at least 15%. Businesses that are
already achieving results beyond those metrics will continue to
receive support to grow. Businesses meeting only one of those
criteria will be supported to fix their operating model before they
grow and businesses which are struggling to meet either goal will
have their strategic merits and synergy value reviewed to form an
assessment of their long-term viability within the Group.
Our immediate priorities in 2023 are to improve health and
safety at all levels, achieve better project management standards,
increase diversity and drive stronger employee engagement. At our
heart, we are a service company: giving employees the means to
realise their full potential is absolutely critical to enabling us
to make the changes we want and need. Through over 100 interviews
conducted with employees in my first 90 days, I was heartened to
find our colleagues consistently citing the impact of their
individual contribution as the main reason they joined James Fisher
and why they work for us now - to make a difference to the Company
and also to the greater good. Our strategy is to invest and build
on that wonderful foundation to create the James Fisher of the
future.
Innovation
During my deep dive into the Group, I was surprised and
impressed by the innate spirit of innovation that exists in
virtually every business. However, a lack of proper process and
insufficient coordination has caused us to miss out on many of the
market opportunities available. This can be fixed and I am
confident that innovation will represent a significant growth
driver for us over the long-term.
Looking to the future, I am very positive about the Group's
prospects, and not just because of the potential from innovation.
The markets in which we operate are attractive. We stand to benefit
from the energy transition, where we have a foot both in improving
the sustainability of oil and gas and in enabling the exponential
growth in renewables. In defence, long-term demand is strong for
the safety critical life support equipment and services we supply.
The prospects for maritime transport have been boosted by the
increased trade in liquefied natural gas, owing to the reduction of
Russian gas piped to Europe coupled with an increased emphasis on
energy security.
We have a brilliant culture of ingenuity and technology, and a
mobile workforce with an appetite for deploying globally. That
makes us an employer of choice for engineers the world over. Once
we get our house in order as I have described, consistently
achieving the highest standards of service delivery across all
geographies, there is everything to play for.
Outlook
In a macro-economic environment that remains uncertain for 2023,
we expect our industry verticals to be robust. The outlook for oil
and gas short and mid cycle is favourable. This will be driven by
strong exploration activity across international markets, and
particularly in subsea, due to record global demand, enhanced by
the urgency for energy security. Offshore wind will continue its
unabated secular growth to meet 10% of electricity demand by 2040.
Our ship-to-ship transfer activities will continue to benefit from
the increased importance of liquefied natural gas as a source of
energy, and our coastal shipping activity is well supported by a
healthy demand. Subsea deterrence is seeing an increased focus in
defence budgets, leading to an acceleration of opportunities for
our products and services.
Our 2023 priority is to show significant progress in our
turn-around plan by implementing the simplification of our
divisional structure, and by delivering on key change management
objectives. Our focus areas are to improve safety, the
predictability of our forecasts by strengthening our end-to-end
commercial process; to accelerate cash collection; and to show
progress towards our 10% underlying operating profit margin and 15%
ROCE targets across all of our business units. In addition, we are
implementing the first steps of a five-year talent and people
strategy which will be measured through our employee engagement.
Our trading in Q1 2023 gives us confidence in the outturn for the
year
Operating review
Marine Support
2022 2021 Change %
------------------------------------ ------ ------- ---------
Revenue (GBPm) 224.5 214.5 4.7
Underlying operating profit (GBPm) 7.9 5.0 58.0
Operating profit/(loss) (GBPm) 10.1 (21.0) n/m
------------------------------------ ------ ------- ---------
The Marine Support division, consisting of Marine Contracting,
Fendercare and Digital and Data Services ("DDS"), provides products
and services to the marine and renewable energy markets.
Marine Contracting principally provides subsea services to both
the oil and gas and offshore wind markets; Fendercare provides
essential ship-to-ship transfer services and related products; and
DDS provides technology aimed at enhancing efficiency and
productivity across a number of market verticals.
As part of the Group's portfolio rationalisation strategy, three
of the DDS businesses were sold in December 2022, generating
GBP18.5m in gross proceeds and a profit on sale of GBP2.5m, which
is disclosed in the financial statements within adjusting items.
The Group has retained one business of significance within DDS,
Asset Information Services ("AIS"), which provides digital twin
technology, principally to offshore oil customers, that allows
customers real-time asset monitoring capabilities.
After a difficult 2021 for this division, when revenue and
underlying operating profit both declined, it achieved revenue
growth of 4.7% in 2022 and some positive progress on profitability,
although as a division it remains below our 10% underlying
operating profit margin target. Underlying operating profit
improved to GBP7.9m, from GBP5.0m in 2021, and an operating loss of
GBP21.0m in 2021 has improved to an operating profit of GBP10.1m in
2022.
Marine Contracting
The Marine Contracting businesses continued its turnaround
during 2022. Revenue increased by 1.1% to GBP114.4m (2021:
GBP113.1m) and underlying operating losses narrowed to GBP1.1m
compared to GBP4.4m in 2021. The business successfully completed a
number of projects during the year and operated the Swordfish dive
support vessel for the whole of 2022. An agreement was reached to
sell the Swordfish in December for US$24m, with cash proceeds
received in January 2023. As a result, the value of the vessel on
the Group's balance sheet at 31 December 2022 was increased by
GBP5.4m, reflecting the uplift to market value and reversal of a
previous impairment of this vessel. This uplift has been disclosed
within adjusting items. The Group has retained access to the
Swordfish vessel through a bareboat charter agreement which runs
until the end of Q3 2023, allowing the business to service existing
customer commitments.
The subsea business in Europe had a challenging year. Having
secured a seasonal charter on a capable vessel to service diving
and related projects in the North Sea, a last-minute cancellation
by the customer resulted in under utilisation of the vessel and a
financial loss in the region. On assessing the future prospects for
this business, and having regard to a number of years of
underachievement, an impairment of GBP4.4m has been recognised in
respect of goodwill within adjusting items.
EDS, which provides high voltage cabling services to the
offshore wind industry experienced significant business disruption
due to high turnover of staff in the first quarter of the year as a
result of competitor recruitment activity. This resulted in an
increase in operating costs as the business sought to continue to
deliver on its customer commitments. The business enters 2023 in a
stronger position and with a full complement of staff and under new
leadership.
There has been little tangible progress on the major LNG project
in Mozambique. We conducted a site survey in Q4 2022 which
confirmed that there had been a significant impact on work that had
previously been completed as a result of the disruption in 2021.
The project remains on hold and the Group is ready to support
re-mobilisation in due course.
Fendercare
The Fendercare Group delivered good revenue growth in the year,
increasing by 13.5% to GBP88.4m (2021: GBP77.9m). However,
operating profit remained flat as good progress in the products
business was offset by a reduction in margins from ship-to-ship
transfer services. The Asian business in particular saw pressure
from the under-utilisation of fixed cost anchorages, with the team
reducing the number of these to mitigate this risk going into 2023.
Good progress was made with ship-to-ship transfer services of LNG,
with increasing activity over the year as energy security concerns
around the world drove greater demand. The business invested in two
additional LNG transfer kits during the year and has retainer
agreements in place with key customers to cover peak demand
periods. The sale of related products, such as fenders, buoys and
anchors showed stronger momentum during 2022. Recognising the
pressure on operating margins, a cost restructuring exercise was
completed during the year, which is expected to deliver annualised
cost savings of GBP1.5m.
DDS
Revenue from the DDS businesses declined from GBP23.3m to
GBP21.6m, principally due to Strainstall, which continued to
experience difficult market conditions for its load and asset
monitoring solutions. The UK business of Strainstall and the Mimic
and Prolec businesses were sold in December 2022, in two separate
transactions, having contributed GBP2.0m to the Group's underlying
operating profit in 2022. The retained AIS business made good
operational progress, launching an updated and improved version of
its Digital Twin technology and securing a number of new
installations.
Specialist Technical
Continuing operations
2022 2021 Change%
------------------------------------ ------ ----- --------
Revenue (GBPm) 68.1 81.5 (16.4)
Underlying operating profit (GBPm) 0.6 10.0 (94.0)
Operating (loss)/profit (GBPm) (2.6) 7.1 n/m
------------------------------------ ------ ----- --------
The JFD business experienced a very challenging twelve months.
Revenue reduced by 16.4% to GBP68.1m (2021: GBP81.5m) and
underlying operating profit reduced to GBP0.6m (2021: GBP10.0m).
The division is at a low point in its project business cycle, with
a number of large contracts substantially completing during the
year from a revenue and profit recognition perspective. Cash
milestones associated with the final completion of two projects
remain outstanding, having been delayed principally by lockdowns
during 2022 in China. A long-term service contract has experienced
challenges during the year, with the customer delaying payments
until a number of rectification items were completed and a
provision has been recognised in respect of potential future
liabilities relating to local purchasing commitments. The team has
worked diligently through this and although some work remains,
receipts of amounts owed during January and February are positive
evidence that the team is delivering well.
Looking forward, the business was awarded the third iteration of
the NATO submarine rescue service (NSRS) contract in December. This
contract, which commences in July 2023, has a revenue opportunity
of up to GBP63m across a period of up to nine years. JFD has
successfully completed the first two iterations of this contract.
In total, the business has a contracted order book of GBP245m, of
which c.GBP50m relates to 2023.
The forward-looking sales pipeline remains strong, with
c.GBP250m of well qualified opportunities across its product
portfolio.
Offshore Oil
2022 2021 Change %
--------------------------------------- ------ ------ ---------
Revenue (GBPm) 106.6 86.3 23.5
Underlying operationing profit (GBPm) 15.2 11.1 36.9
Operating profit/(loss) (GBPm) 14.7 (5.2) n/m
--------------------------------------- ------ ------ ---------
The Offshore Oil division continued its positive momentum from
2021, achieving 23.5% revenue growth to GBP106.6m (2021: GBP86.3m)
and 36.9% underlying operating profit growth to GBP15.2m (2021:
GBP11.1m).
All businesses within the division achieved growth in the year,
with RMSpumptools delivering a particularly strong 42.7% growth in
revenue, resulting in a record performance for that business. High
demand for its artificial lift products, which extend the life of
oil wells, has continued into 2023, with a strong order book to
start the year.
The ScanTech businesses, which principally provide well-testing
services to the oil and gas industry and bubble curtain services to
the offshore wind construction market achieved 17.9% revenue
growth. The Group's innovative bubble curtain solutions, which
provide a "wall of air" to protect wildlife from the noise of
piling activity in offshore wind construction projects delivered
growth of 13.9% from GBP7.2m to GBP8.2m. Demand for well-testing
services remained at high levels as the oil and gas industry more
broadly sought to minimise the impact of the conflict in Ukraine on
global energy supplies.
James Fisher Offshore, which provides equipment rentals to
offshore operators and decommissioning services to the oil and gas
industry continued to make positive progress. Revenue from
decommissioning projects in 2022 showed good growth to GBP11.7m
from GBP7.1m in 2021. We were pleased to complete at the end of the
year the first project with the new Seabass technology, which was
acquired in 2021. Decommissioning remains an early stage
opportunity for the Group, but it is a potentially significant
market opportunity over the longer term.
In 2021, adjusting items of GBP16.3m were recognised in relation
to goodwill impairment (GBP13.9m) and receivables (GBP1.9m). The
Group continues to pursue the recovery of the receivables balance,
which related to one specific counterparty that is in a scheme of
arrangement process and is hopeful of a resolution during 2023.
Tankships
2022 2021 Change %
------------------------------------ ----- ----- ---------
Revenue (GBPm) 78.9 60.1 31.3
Underlying operating profit (GBPm) 8.6 4.8 79.2
Operating profit (GBPm) 9.9 1.3 n/m
------------------------------------ ----- ----- ---------
The Tankships business has recovered well in 2022. The fleet has
been highly utilised at an average of 88% over the course of the
year (2021: 83%) and spot rates for shorter-term charters have been
high even when compared to pre-pandemic rates. During 2022 34%
(2021: 23%) of the fleet was deployed on short-term spot voyages,
with 66% (2021: 77%) contracted to longer-term charters.
The delivery of our two new dual-fuel (marine gasoil and LNG)
vessels has now been completed, with The Sir John Fisher delivered
in November 2022 and The Lady Maria Fisher delivered in January
2023. Both have now completed their first voyages and have joined
the UK-based fleet. These new vessels were commissioned as part of
our fleet renewal strategy and replace two tankers that have
reached end of life. One was sold in 2022, generating a GBP0.9m
profit on sale and the second is expected to be sold in 2023. The
recent recovery in the market has led to a GBP0.3m reversal of an
impairment recognised in 2021 against the carrying value of this
second vessel. The profit on sale of GBP0.9m and impairment
reversal of GBP0.3m have been shown as adjusting items in the
year.
Cattedown Wharves, which serves the South-West of England,
performed well, with volumes of cargoes flowing through the port in
line with pre-pandemic levels.
Discontinued operations
The results of JFN have been disclosed as a Discontinued
Operation and Held for Sale in the 2022 financial statements. The
business was sold to Rcapital in March 2023. The Group retained
several legacy parent company guarantees supporting the obligations
of JFN (the "PCGs"). It generated an underlying operating loss of
GBP7.3m in the year following challenges with its ongoing projects.
Included within adjusting items is a further GBP13.3m loss,
consisting of impairments of goodwill (GBP8.1m), property, plant
and equipment (GBP3.9m) and anticipated costs of disposal
(GBP1.3m). An income tax credit of GBP0.8m gives a total income
statement charge in respect of Discontinued Operations of GBP19.8m
in 2022 (2021: GBP0.1m).
Financial review
The Group made progress against its strategic and financial
objectives during 2022, achieving growth in revenue, operating
profit and profit before tax from its continuing operations. The
rationalisation and simplification of the portfolio included the
sale of three businesses, agreement to sell a significant fixed
asset and the Board's commitment to sell one further business. All
disposals are complete as at the date of signing the Annual Report
and the net proceeds have been used to reduce Group indebtedness.
Post the end of the year we have made good progress in refinancing
our borrowing facilities to provide a more stable platform for the
future.
Continuing operations
The Group generated revenue of GBP478.1m in 2022, an increase of
8.1% compared to GBP442.4m in 2021. Divisional performance was
somewhat mixed, with Marine Support (+4.7%), Offshore Oil (+23.5%)
and Tankships (+31.3%) all showing good growth, partially offset by
a more challenging year within Specialist Technical (-16.4%) where
JFD's business is at a low point in its large projects business
cycle.
Gross margin of 26.6% showed an improvement of 320 bps over the
23.4% achieved in 2021. This was principally due to a number of
adjusting item charges in the 2021 financial statements not being
repeated in 2022. Excluding these adjusting items, gross margin is
in line with 2021 despite the generally higher inflationary
environment. The Group has commenced a Group-wide Business
Excellence programme aimed at simplifying operations, consolidating
common activities across businesses (such as supply chain) and
delivering margin enhancements over time.
Total administrative expenses reduced from GBP118.9m in 2021 to
GBP104.4m in 2022. This includes a significant reduction in
adjusting items to a GBP8.2m loss in 2022, from a loss of GBP33.4m
in 2021. A summary of all adjusting items is included below. In
2021 a provision of GBP7.3m was made against certain trade
receivables. In 2022 the Group recognised a GBP0.3m credit in
relation to a net reversal of impairments against trade receivables
following the receipt of some balances previously provided for.
Excluding adjusting items, administrative expenses increased by
12.5% to GBP96.2m (2021: GBP85.5m). This includes the impact of
salary increases awarded in January 2021 (average 3% across the
Group, with market levelling adjustments in addition) and
performance-related bonuses accrued at year end to reward those
businesses that achieved their financial targets in 2022 (GBP2.0m
vs GBP0.8m in 2021).
The Group generated GBP24.7m in operating profit in 2022, a
GBP45.4m improvement compared to the GBP20.7m operating loss in
2021. The majority of the improvement was due to a significant
reduction in adjusting items and impairments against trade
receivables (+GBP47.0m), with the balance of GBP1.4m (-5.7%)
representing a slight reduction from underlying business
performance. The Group's underlying operating profit margin reduced
slightly to 5.7%.
Adjusting items
The Group has recognised a net operating loss of GBP1.7m in
relation to adjusting items, significantly reduced from GBP48.7m in
2021.
The Group sold three businesses, the Swordfish dive support
vessel and one tanker during the year. Cash proceeds of GBP18.5m
were received prior to the end of 2022 in relation to the three
businesses and a profit on sale of GBP2.5m was achieved. Cash
proceeds of US$24.0m were received in January 2023 in relation to
the Swordfish. This vessel was designated as Held for Sale in the
Group's balance sheet in 2021 and accordingly the 2022 results
include a GBP5.4m gain in its carrying value to reflect fair value
less costs to sell. The tanker sale generated a GBP0.9m profit. In
2021, the Paladin dive support vessel and two businesses were sold,
generating net cash proceeds of GBP20.8m and a profit on disposal
of GBP0.6m.
A non-cash goodwill impairment charge of GBP4.4m has been
recognised in the 2022 financial statements in relation to the
Marine Support division. In 2021, non-cash goodwill and intangible
asset impairments of GBP29.2m were recognised. Impairment
provisions of GBP9.3m were also recognised against tangible fixed
assets in the 2021 results.
A restructuring programme within the Fendercare and JFD
businesses, completed during 2022, resulted in GBP2.7m of
restructuring costs (2021: nil), of which GBP1.7m relates to people
costs and GBP1.0m to property costs. The Group also recognised a
GBP1.5m charge in relation to its share (c.2%) of the obligations
under a defined benefit pension fund following a settlement in
relation to benefits payable by the scheme to past members. GBP1.1m
of debts previously provided for were collected during 2022 (2021:
GBP4.3m impairment loss) and we continue to pursue other amounts
for which provisions have been made through legal and commercial
discussions. No costs were incurred in relation to ongoing
litigation and disputes, compared to GBP3.1m in 2021. One dispute
was settled in the year, with settlement proceeds covering the
Group's costs.
Finance charges
The Group's net finance charges increased by GBP2.0m to GBP10.2m
(2021: GBP8.2m). Net bank interest payable increased from GBP6.0m
to GBP8.1m during the year as a result of the Group's higher
leverage and interest rate rises. Non-cash pension and lease
liability charges are broadly in line with 2021 at GBP2.1m (2021:
GBP2.2m).
The Group's interest cover ratio, which is calculated by
dividing underlying operating profit by net finance charges
(excluding IFRS16 finance charges) is 3.5 times (2021: 5.4 times),
which compares to banking covenants that require the ratio to be
greater than 3.0 times.
Taxation
The Group has recognised an overall net tax debit in respect of
continuing operations of GBP5.5m in the year (2021: net tax credit
of GBP0.8m). The underlying tax charge for the year is GBP4.6m
(2021: GBP10.1m) representing an underlying effective tax rate of
28.4% (2021: 51.2%). Compared to the UK Corporation Tax rate of
19%, the following principal factors have had an adverse impact in
2022:
-- Higher effective tax rate in overseas jurisdictions (+14pps)
-- Losses incurred during 2021 but not provided for as a deferred tax asset (+4pps)
-- Prior year overprovision (-8pps)
Tax on adjusting items is a net charge of GBP0.8m (2021:
GBP10.9m credit). In 2021 this principally related to the
recognition of a deferred tax asset in the UK on certain fixed
assets that were impaired in 2020.
Discontinued operations
The Group's JFN business, which provides services to the UK
nuclear decommissioning market, was designated as Held for Sale at
31 December 2022 following the Board's decision to sell the
business. The sale of the business completed on 3 March 2023, for
proceeds of GBP3. The Group retained several legacy PCGs supporting
the obligations of JFN. JFN's financial performance during 2022
deteriorated, with revenue 17.2% lower at GBP42.8m (2021: GBP51.7m)
and significant challenges with one project resulting in additional
costs and an operating loss of GBP7.3m (2021: operating loss
GBP0.1m). A loss of GBP13.3m was recognised in relation to the
remeasurement of the business' assets and liabilities in line with
IFRS 5 'Non-current Assets Held for Sale', primarily relating to
the impairment of goodwill (GBP8.1m), tangible fixed assets
(GBP3.9m) and costs to sell of (GBP1.3m).
Dividend and EPS
The Board has not recommended dividends in 2022 or 2021 given
the overall financial position of the Group. The Board remains
committed to reintroducing a sustainable dividend policy at the
right time. Basic and diluted earnings per share are a loss of
22.1p, compared to a loss of 55.2p in 2021.
Cash flow and borrowings
The Group generated GBP44.5m (2021: GBP55.0m) from operating
activities. This includes the impact of a GBP2.6m working capital
outflow as the Group built inventory to satisfy higher demand for
its products (GBP3.2m). Reductions in debtors were broadly offset
by reductions in creditors. Tax payments were in line with last
year at GBP8.1m (2021: GBP7.9m).
Cash flows from investing activities generated a GBP15.8m
outflow (2021: GBP8.0m outflow). Net cash proceeds from the sale of
businesses and assets in 2022 were GBP17.3m, compared to GBP20.9m
in 2021. Shortly after the balance sheet date the Group collected
US$24m from the sale of the Swordfish dive support vessel. This was
balanced against the deployment of GBP31.7m (2021: GBP28.2m) of
capital expenditure. The Board approved one significant capital
project in the year, being the investment in 24 newly designed,
more energy efficient, compressors to supplement the ScanTech
Offshore business and its bubble curtain offering in particular, in
total a GBP9m commitment spread between 2022 and 2023. The
compressors have been delivered in Q1 2023 in anticipation of
deployment during Q2 2023 on new projects in the US.
M&A activity in 2022 related to the payment of deferred
consideration on prior acquisitions, principally the Continental
business in Brazil. M&A payments in 2021 were principally in
relation to the Subsea Engenuity acquisition.
Financing costs increased in the year from GBP5.6m to GBP7.5m as
interest rates increased on variable rate borrowings and an
interest rate swap that had been placed in 2017 at 0.7% matured and
was replaced with a new five-year interest rate swap at 2.3%.
The Group's net debt, including all lease liabilities, remained
stable at GBP185.8m (2021: GBP185.6m). Within this, the net bank
borrowing position improved by GBP6.7m to GBP132.9m (2021:
GBP139.6m).
Additional lease liabilities principally relate to a new charter
vessel in the Caribbean and the renewal of seven existing leases
within the Tankships division (see table A).
The Group's net debt for the purposes of its banking covenants
consists of net bank borrowings, finance lease liabilities (on an
IAS17 basis), and bonds and guarantees, as summarised in table B.
On a covenants basis, net debt has reduced by GBP13.7m. The ratio
of net debt : EBITDA has improved slightly to 2.7 times (2021: 2.9
times), which compares to banking covenants requiring the ratio to
be less than 3.5 times (see table B).
Liquidity
The Group retained access to GBP247.5m of borrowing facilities
during 2022, unchanged from 31 December 2021. In April 2023 the
Group agreed new borrowing facilities with its lending banks of
GBP210m with a maturity date of March 2025, which provides the
Group with a stable financial platform from which to execute its
strategic plans. We expect to complete final documentation and to
satisfy remaining conditions before the long stop date of 7 June
2023. The continued access to liquidity has been included as a
Group Principal Risk (see page 12) due to the relatively short-term
nature of the new facilities.
Table A
---------------------------------------------------------
GBPm 2022 2021 Movement
Bank net borrowings (132.9) (139.6) 6.7
Finance leases (IAS17 basis) (6.9) (7.8) 0.9
Right-of-use liabilities (46.0) (38.2) (7.8)
------- ------- --------
Net debt (185.8) (185.6) (0.2)
----------------------------- ------- ------- --------
Table B
---------------------------------------------------------
GBPm 2022 2021 Movement
----------------------------- ------- ------- --------
Bank net borrowings (132.9) (139.6) 6.7
Finance leases (IAS17 basis) (6.9) (7.8) 0.9
Bonds and guarantees (2.3) (8.4) 6.1
------- ------- --------
Net debt - covenants basis (142.1) (155.8) 13.7
EBITDA - covenants basis 52.6 54.3
Net debt : EBITDA 2.7 2.9
----------------------------- ------- ------- --------
Balance sheet
The Group's net assets increased by GBP7.7m in the year to
GBP218.3m (2021: GBP210.6m). The loss for the year of GBP10.8m was
offset by Other comprehensive income of GBP18.1m, principally in
relation to foreign exchange movements and hedging (GBP12.4m) and
an actuarial gain from the Group's defined benefit pension fund of
GBP5.8m in the year (net of tax), and other movements in reserves
of GBP0.1m.
Non-current assets
Non-current assets reduced by GBP12.7m in the year from
GBP333.9m to GBP321.2m. Goodwill reduced by GBP17.2m to GBP116.3m
(31 December 2021: GBP133.5m) as a result of business disposals
GBP7.1m, held for sale transfer in relation to the JFN business of
GBP8.1m, impairment charges of GBP4.4m, offset by foreign exchange
differences of GBP2.4m. Intangible assets reduced to GBP8.2m from
GBP13.3m due to additions of GBP1.3m and disposals/transfers with a
net book value of GBP1.2m offset by amortisation charges of
GBP5.2m.
Within Property, Plant and Equipment the Group invested GBP27.4m
in additions. This was offset by disposals with a net book value of
GBP2.5m, depreciation of GBP23.3m, the reclassification of assets
to Assets Held for Sale of GBP5.8m, net impairment charges of
GBP0.7m and foreign exchange differences of GBP2.4m.
Right of use assets increased by GBP10.5m, principally as a
result of movements in the Group's Tankships fleet. The Sir John
Fisher vessel, which is leased, was delivered to the business in
November 2022, resulting in the inclusion of the associated right
of use asset and lease liability. Depreciation of GBP12.6m against
vessels was provided in the normal course.
The Group has recognised a GBP5.5m asset in relation to the
Group's Shore Staff defined benefit pension scheme in accordance
with IFRIC14 following movements in actuarial assumptions. The
Group continues to make deficit repair payments in line with agreed
profiles.
Current assets and current liabilities
The Group's net current assets reduced from GBP91.5m at 31
December 2021 to GBP61.3m at 31 December 2022. There are a number
of common factors affecting the movements in these balances, which
are summarised in the table below. The current assets and
liabilities of JFN have been reclassified to Assets Held for Sale.
In addition, businesses sold in December 2022 resulted in the sale
of the associated Balance Sheet assets and liabilities.
Balances
Transfer sold as Movement
At 31 to Assets part of Held for excluding At 31
December Held for business sale fixed disposals December
GBPm 2021 Sale disposals asset adjustments and transfers 2022
------------------------- ---------- ----------- ----------- ------------------- --------------- ----------
Inventory 49.0 (0.7) (3.5) - 5.0 49.8
Trade and other
receivables 153.3 (10.5) (4.8) - 10.2 148.2
Net cash and borrowings 34.4 (2.8) (1.6) - (43.8) (13.8)
Trade and other
payables (139.5) 13.7 3.0 - 0.4 (122.4)
Provisions (2.0) - - - (3.3) (5.3)
Current tax (4.5) 0.3 - - 2.3 (1.9)
Lease liabilities (9.9) 2.2 0.4 - (5.9) (13.2)
Assets held for
sale 10.7 14.0 - 11.5 - 36.2
Liabilities associated
with assets held
for sale - (16.3) - - - (16.3)
------------------------- ---------- ----------- ----------- ------------------- --------------- ----------
Net current assets 91.5 - (6.5) 11.5 (35.2) 61.3
------------------------- ---------- ----------- ----------- ------------------- --------------- ----------
Inventory increased by GBP0.8m to GBP49.8m (31 December 2021:
GBP49.0m) due principally to an increase in production levels to
keep pace with demand, offset by inventory sold as part of the
businesses disposed of in the year. Trade and other receivables
reduced from GBP153.3m to GBP148.2m at 31 December 2022, again
reflecting the impact of businesses sold in the year (GBP4.8m) and
the reclassification of JFN's receivables balances to Assets Held
for Sale (GBP10.5m), offset by an underlying increase relating to
higher revenues outstanding from Q4 trading. A net credit to the
Income Statement of GBP0.3m was made in relation to impairment of
trade receivables, a significant improvement from the GBP7.3m
provided for in 2021. Balances of GBP8.4m (2021: GBP7.8m) that had
previously been provided for were cleared from the debtors ledger
as no recovery is expected. These adjustments had no effect on the
Income Statement.
Within net current assets, the Group's cash, overdraft and
borrowings were a net liability of GBP13.8m (31 December 2021: net
asset of GBP34.4m). This reduction in the net current asset
position is principally due to the inclusion of one revolving
credit facility balance (c.GBP45.5m drawn at 31 December 2022)
within current liabilities as the facility agreement matures in
October 2023.
Trade and other payables, excluding movements relating to
reclassifications and sales, remained broadly flat in the year.
Provisions due within one year increased by GBP3.3m, reflecting
increases in warranty and foreign offset agreement provisions in
the year. Lease liabilities increased following the renewal of
property leases and additional vessel leases.
Assets held for sale increased from GBP10.7m to GBP36.2m at 31
December 2022. The balance relates to the Swordfish (GBP18.5m),
which is an increase of GBP7.7m in the year following agreement
having been reached to sell the vessel in December 2022), JFN's
assets of GBP16.3m (GBP14.0m current assets and GBP2.3m of fixed
assets) and GBP1.5m relating to certain assets in Singapore.
Liabilities associated with assets held for sale of GBP16.3m relate
to JFN.
Non-current liabilities
Long-term bank borrowings reduced to GBP121.8m (2021: GBP173.9m)
during the year, partly as a result of one revolving credit
facility being disclosed as a current liability at 31 December 2022
as discussed above. Net pension liabilities, as measured under IAS
19, reduced to GBP0.4m compared to GBP1.9m at 31 December 2021 in
relation to the Group's portion of multi-employer schemes.
Financial reporting, looking forward
The Group has implemented a new divisional structure, effective
1 January 2023. The Group's businesses are being organised into
three divisions: Energy, Defence and Maritime Transport. This
change will be reflected in the Group's 2023 segmental reporting in
line with the requirements of IFRS8. The Group will also adopt IFRS
17 from 1 January 2023, the effect of which is being finalised.
Principal risks and uncertainties
The Board has considered the principal risks that may affect our
business. Two new principal risks have been identified during the
year, for which additional detail is provided in the tables below.
A full description of all principal risks and uncertainties, the
changes during 2022, and their management and mitigation as well as
emerging risks will be set out in the 2022 Annual Report and
Accounts.
1.NEW RISK: Group transformation risk
Nature: Potential impact: Mitigation:
The Group is
embarking * The change management process may disrupt core * An Operational Excellence team has been established,
on a period of business delivery activities if roles and with a clear remit
significant responsibilities are not clear
simplification
and * Objectives have been set and cascaded through the
integration, * Staff may become distracted by the change process organisation to ensure priorities are clear across
carrying the the Group
risk
of disruption
and/or * Executive Committee oversight and escalation process
distraction to has been established
its core
activities
if not managed
well.
---------------------------------------------------------- ----------------------------------------------------------------
Context:
The Group has operated a largely decentralised operating model for
a number of years. The Executive Committee sees opportunity to improve
the efficient working of the Group by simplifying and integrating common
functions. This is one of the Executive Committee's and Board's highest
priorities for 2023 but will involve a significant amount of change
in both the operating model and supporting functional activities of
the Group. Strong project management and clarity on roles and responsibilities
will be required to ensure that the delivery teams remain focused on
the most important identified tasks.
Movement:
This risk is being separately disclosed for the first time in 2022.
The Board recognises that all change management programmes contain
risk and has made the management of this change process one of its
highest priorities for 2023.
Opportunity:
The opportunity to simplify the Group's operating model, integrating
common functions such as Supply Chain, Project Management, Engineering,
Health & Safety is aimed at providing enhanced ways of working and
operational efficiencies. It is also expected to support the simplification
of the Group's legal entity structure and systems infrastructure.
2.NEW RISK: Maintaining access to adequate funding
Nature: Potential impact: Mitigation:
The Group
relies * The Group may not have access to adequate liquidity * Regular meetings are held with all lenders to provide
on external trading and operational updates
sources
of funding to * Disposals of additional businesses may be required
ensure * Selection of third-party expert support to assist
it has the with refinancing
financial * The Group's reputation and ability to secure
liquidity to competitive contracts with suppliers and customers
fund may be adversely impacted * Ongoing dialogue with potential new lenders
its operations Refinancing discussions concluded with existing
and future lenders in April 2023
growth,
without which
there
is a risk to
the
execution of
the
Group's
strategy.
---------------------------------------------------------- ----------------------------------------------------------------
Context:
The Group has experienced three consecutive years of difficult trading
conditions and financial results have been adversely impacted. The
Group has made good progress in refinancing its borrowing facilities
post year-end, though lenders have required security for the first
time. The new facility matures in March 2025. Net debt as measured
for the purposes of banking covenants has reduced in each of the last
three years, however the ratio of net debt to EBITDA ("leverage") has
remained above the Board's target level of 1-1.5x. At 31 December 2022
leverage was 2.7x (2021: 2.9x; 2020: 2.8x; 2019: 2.7x).
Movement:
This risk is being separately disclosed for the first time in 2022
due to the ongoing challenges of ensuring adequate liquidity at competitive
pricing.
Opportunity:
The Group has taken the opportunity to simplify and right-size its
borrowing facilities through to March 2025 to provide additional certainty
to all stakeholders.
Other principal risks - unchanged from 2021
-- Health and safety risk
-- Cyber security risk
-- Operating in emerging markets
-- Climate change
-- Contractual risk
-- Project delivery risk
-- Recruitment and retention of key staff
-- Financial risk
-- Pandemic risk
Directors' Responsibilities
The following is an extract of the full statement prepared in
connection with the Company's Annual Report and Accounts for the
year ended 31 December 2022.
The Directors of the Company confirm that, to the best of their
knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic report and the Directors' report include a fair
review of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
The Directors of James Fisher and Sons plc and their respective
responsibilities are set out in the 2022 Annual Report and
Accounts.
The responsibility statement was approved by the Board on 28
April 2023 and signed on its behalf by:
J Vernet D Kennedy
Chief Executive Officer Chief Financial Officer
28 April 2023
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
restated*
Total Total
Notes GBPm GBPm
Continuing operations
Revenue 3 478.1 442.4
Cost of sales (350.9) (338.8)
-----------
Gross profit 127.2 103.6
Administrative expenses (104.4) (118.9)
Impairment of trade and other receivables 0.3 (7.3)
Share of post-tax results of associates 1.6 1.9
-----------
Operating profit/(loss) 24.7 (20.7)
Finance income 3 0.7 0.3
Finance expense 3 (10.9) (8.5)
----------- ------------
Profit/(loss) before taxation 14.5 (28.9)
Income tax 5 (5.5) 0.8
----------- ------------
Profit/(loss) for the year from continuing
operations 9.0 (28.1)
Loss for the year from discontinued operations,
net of tax 4 (19.8) (0.1)
Loss for the year (10.8) (28.2)
=========== ============
Attributable to:
Owners of the Company (11.1) (27.8)
Non-controlling interests 0.3 (0.4)
(10.8) (28.2)
=========== ============
Loss per share pence pence
Basic 6 (22.1) (55.2)
Diluted 6 (22.1) (55.2)
Loss per share - continuing activities pence pence
Basic 6 17.4 (55.0)
Diluted 6 17.4 (55.0)
* 2021 results are restated due to a business classified as
discontinued operations - see Note 4. The presentation of the
consolidated income statement has been amended to include a line
item 'impairment of trade and other receivables' and for removal of
columns headed 'separately disclosed items' in the 2021 Annual
Report - see Note 1: Presentation of financial statements.
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
Notes GBPm GBPm
Loss for the year (10.8) (28.2)
------------ ------------
Other comprehensive income:
Items that will not be classified to the income
statement
Actuarial gain in defined benefit pension schemes 7.1 6.3
Tax on items that will not be reclassified (1.3) (0.5)
------------ ------------
5.8 5.8
Items that may be reclassified to the income
statement
Exchange differences on foreign currency net investments 8.8 (2.6)
Effective portion of changes in fair value of
cash flow hedges 3.6 (2.6)
Effective portion of changes in fair value of
cash flow hedges in joint ventures 0.4 0.3
Net changes in fair value of cash flow hedges
transferred to income statement 0.6 0.3
Tax on items that may be reclassified (1.1) 0.4
------------ ------------
12.3 (4.2)
Total other comprehensive income for the year 18.1 1.6
============ ============
Total comprehensive income for the year 7.3 (26.6)
============ ============
Attributable to:
Owners of the Company 6.9 (26.1)
Non-controlling interests 0.4 (0.5)
------------
7.3 (26.6)
============ ============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2022
31 December 31 December
2022 2021
Notes GBPm GBPm
restated*
Non-current assets
Goodwill 116.3 133.5
Other intangible assets 8.2 13.3
Property, plant and
equipment 119.7 122.2
Right-of-use assets 52.3 41.8
Investment in joint
ventures 8.7 8.0
Other investments 1.4 1.4
Retirement benefit surplus 5.5 -
Other receivables 0.7 4.1
Deferred tax assets 8.4 9.6
321.2 333.9
------------ ------------
Current assets
Inventories 49.8 49.0
Trade and other receivables 148.2 153.3
Assets held for sale 8 36.2 10.7
Cash and cash equivalents 10 53.6 68.0
287.8 281.0
------------ ------------
Current liabilities
Trade and other payables (122.4) (139.5)
Provisions (5.3) (2.0)
Liabilities associated with
assets held for sale (16.3) -
Current tax (1.9) (4.5)
Borrowings 10 (67.4) (33.6)
Lease liabilities (13.2) (9.9)
(226.5) (189.5)
------------ ------------
Net current assets 61.3 91.5
------------ ------------
Total assets less current liabilities 382.5 425.4
------------ ------------
Non-current liabilities
Other payables (0.5) (1.3)
Provisions (1.4) (1.1)
Retirement benefit obligations 9 (0.4) (1.9)
Cumulative preference
shares (0.1) (0.1)
Borrowings (121.8) (173.9)
Lease liabilities (39.7) (36.1)
Deferred tax liabilities (0.3) (0.4)
(164.2) (214.8)
------------ ------------
Net assets 218.3 210.6
============ ============
Equity
Called up share capital 11 12.6 12.6
Share premium 26.8 26.8
Treasury shares (0.6) (0.6)
Other reserves (6.8) (20.4)
Retained earnings 185.8 191.5
Total shareholders
equity 217.8 209.9
Non-controlling interests 0.5 0.7
Total equity 218.3 210.6
============ ============
* Non-current other receivables, Current trade and other
receivables and Current trade and other payables have been restated
for the 2021 comparative period (see Note 1).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2022
31 December 31 December
2022 2021
restated*
Notes GBPm GBPm
(Loss)/profit for the year (10.8) (28.2)
Tax (credit)/charge 4.7 (0.8)
Adjustments to reconcile (loss)/profit
before tax to net cash flows
Depreciation and amortisation 41.1 44.2
Impairments 0.7 38.4
Loss on remeasurement to fair value less
costs to sell 4 13.3 -
Net finance expense/(income) 10.3 8.3
(Gain)/loss on disposal of businesses,
net of disposal costs (2.5) 0.2
Other non-cash items (1.7) (1.0)
(Increase) in inventories (3.2) (2.7)
Decrease/(increase) in trade and other
receivables 2.5 (5.1)
(Decrease)/increase in trade and other
payables (1.9) 11.8
Defined benefit pension cash contributions
less service cost 0.1 (2.2)
------------ ------------
Cash generated from operations* 52.6 62.9
Income tax payments (8.1) (7.9)
------------ ------------
Cash flow from operating activities 44.5 55.0
Investing activities
Dividends from joint venture undertakings 1.7 1.6
Proceeds from the disposal of a subsidiary,
net of cash disposed 15.1 6.2
Proceeds from the disposal of property,
plant and equipment 2.2 14.7
Finance income 0.8 0.3
Acquisition of subsidiaries, net of cash
acquired (2.6) (1.1)
Acquisition of property, plant and equipment (31.7) (28.2)
Development expenditure (1.3) (1.5)
------------ ------------
Cash flows used in investing activities (15.8) (8.0)
Financing activities
Proceeds from the issue of share capital - 0.1
Finance costs (7.5) (5.6)
Acquisition of non-controlling interests
(NCI) (1.5) -
Net purchase of own shares by Employee Share
Ownership Trust - (0.5)
Purchase of own shares for LTIP vesting - (0.5)
Capital element of lease repayments (14.5) (13.7)
Proceeds from borrowings 166.0 205.0
Repayment of borrowings (182.6) (210.9)
------------ ------------
Cash flows used in financing activities (40.1) (26.1)
Net increase in cash and cash equivalents 10 (11.4) 20.9
Cash and cash equivalents at 1 January 34.5 13.5
Net foreign exchange differences 2.5 0.1
Cash transferred to asset held for sale (2.8) -
Cash and cash equivalents at 31 December 22.8 34.5
============ ============
* Cash generated from operations for the year ended 31 December
2021 has been re-presented to reallocate 'separately disclosed
items' within cash generated from operations. In addition, GBP6.1m
prepayments related to the acquisition of property, plant and
equipment has been reclassified from trade and other receivables
(see Note 1). Proceeds from borrowings and repayment of borrowings
have also been restated (Note 1).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Total Non-
Share Share Retained Other Treasury shareholders controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January
2021 12.6 26.7 214.6 (16.5) (0.2) 237.2 0.7 237.9
Loss for the
year - - (27.8) - - (27.8) (0.4) (28.2)
Other
comprehensive
income - - 5.8 (4.1) - 1.7 (0.1) 1.6
Contributions
by and
distributions
to owners:
Remeasurement
of
non-controlling
interest put
option - - - 0.2 - 0.2 - 0.2
Changes in
ownership
interest
without
a change in
control - - (0.7) - - (0.7) 0.5 (0.2)
Share based
payments - - 0.3 - - 0.3 - 0.3
Tax effect of
share based
payments - - (0.1) - - (0.1) - (0.1)
Purchase of
shares
by ESOT - - - - (0.5) (0.5) - (0.5)
Notional
purchase
of own shares - - (0.5) - - (0.5) - (0.5)
Arising on the
issue of shares - 0.1 - - - 0.1 - 0.1
Transfer - - (0.1) - 0.1 - - -
At 31 December
2021 12.6 26.8 191.5 (20.4) (0.6) 209.9 0.7 210.6
Loss for the
year - - (11.1) - - (11.1) 0.3 (10.8)
Other
comprehensive
income - - 5.8 12.2 - 18.0 0.1 18.1
Contributions
by and
distributions
to owners:
Remeasurement
of
non-controlling
interest put
option - - - 1.4 - 1.4 - 1.4
Changes in
ownership
interest
without
a change in
control - - (0.9) - - (0.9) (0.6) (1.5)
Share based
payments - - 0.5 - - 0.5 - 0.5
At 31 December
2022 12.6 26.8 185.8 (6.8) (0.6) 217.8 0.5 218.3
======== ======== ========= ========= ========= ============= ============ =======
Other reserve movements
Translation Hedging Put option
reserve reserve liability Total
Other reserves GBPm GBPm GBPm GBPm
At 1 January
2021 (14.3) 0.5 (2.7) (16.5)
Other comprehensive income (2.6) (1.5) - (4.1)
Remeasurement of non-controlling
interest put option - - 0.2 0.2
--------- ------------- ------------ -------
At 31 December
2021 (16.9) (1.0) (2.5) (20.4)
Other comprehensive income 8.7 3.5 - 12.2
Remeasurement of non-controlling
interest put option - - 1.4 1.4
At 31 December
2022 (8.2) 2.5 (1.1) (6.8)
========= ============= ============ =======
NOTES TO THE PRELIMINARY RESULTS
1. General information
James Fisher and Sons plc (the Company) is a public limited
company registered and domiciled in England and Wales and listed on
the London Stock Exchange. The consolidated financial statements
comprise the financial statements of the Company, its subsidiary
undertakings and its interest in associates and jointly controlled
entities (together the Group), for the year ended 31 December 2022.
The Company's shares are listed on the London Stock Exchange. The
Company and consolidated financial statements were approved for
publication by the Directors on 28 April 2023.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 December 2022
or 2021. The financial information for 2021 is derived from the
statutory accounts for 2021 which have been delivered to the
registrar of companies. The auditor has reported on the 2021
accounts; their report was (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006. The statutory accounts for 2022 will be finalised on the
basis of the financial information presented by the directors in
this preliminary announcement. Those statutory accounts for 2022
are expected to include reference to a material uncertainty
relating to going concern (as referred to below) and the auditor's
report on those accounts is expected to include reference to a
matter to which the auditor draws attention by way of emphasis
without qualifying their report in respect of that material
uncertainty related to going concern. Those statutory accounts will
be delivered to the registrar of companies in due course.
Presentation of financial statements
As part of an ongoing review of the financial statements for the
year ended 31 December 2021 by the FRC's Corporate Reporting Review
Team, the presentation of the consolidated income statement has
been amended to include a line item for 'impairment of trade and
other receivables'. The 2021 comparative has been amended to
reclassify GBP7.3m which was previously within administrative
expenses and disclosed within Note 29. There was no impact on
profit. In addition two prior year adjustments were identified in
relation to the presentation of contract assets and contract
liabilities (see Balance sheet prior year restatements below).
The Income statement presentation has been amended to remove the
'before separately disclosed items' and 'separately disclosed
items' columns presented in the 2021 Annual report and accounts.
This change was made to simplify the income statement presentation
and show alternative performance measures previously included
within 'separately disclosed items' in Note 2.1. Any material items
disclosed under IAS1 are shown separately. There has been no change
to continuing results for revenue, gross margin and operating
profit.
The FRC's review was based on the annual report and accounts and
did not benefit from detailed knowledge of the business or an
understanding of the underlying transactions entered into. It was,
however, conducted by staff of the FRC who have an understanding of
the relevant legal and accounting framework. Please note that the
review carried out by the FRC provides no assurance that the Annual
Report and Accounts were correct in all material respects. The
FRC's role is not to verify the information provided but to
consider compliance with reporting requirements.
Balance sheet prior year restatements
In the prior year a contract asset and corresponding contract
liability of GBP6m was recognised in respect of what was understood
to be a commission payment for which there was considered to be an
obligation to make payments over a number of years. It is now
recognised by the Directors from further analysis of the underlying
agreement that these costs relate to services that will be
performed over a number of years which are cancellable under the
agreement. The Directors do not consider there to be a contractual
obligation under the agreement and therefore have restated the
comparatives to derecognise the contract liability and therefore
the corresponding asset. This change in presentation within the
Consolidated statement of financial position has no effect on the
profit of the Group or Company, the cash position of the Group or
Company in their balance sheets and has no further impact on the
Group's or Company's financial statements. The effect of the
restatement on the Consolidated statement of financial position in
respect of the comparative amount for the year ended 31 December
2021 is set out below.
In the prior year other payables of GBP4.8m was recognised in
respect of a pain provision. It is now recognised by the Directors
that this pain provision should have been presented as a reduction
in contract assets to represent a single net position on one
contract. This change in presentation within the Consolidated
statement of financial position has no effect on the profit of the
Group or Company, the cash position of the Group or Company in
their balance sheets and has no further impact on the Group's or
Company's financial statements. The effect of the restatement on
the Consolidated statement of financial position in respect of the
comparative amount for the year ended 31 December 2021 is set out
below.
31 Dec 2021 31 Dec 2021
As reported Adjustment Adjustment Restated
GBPm GBPm GBPm GBPm
Prepayments 9.8 - 0.8 10.6
Contract assets 60.3 (4.8) - 55.5
Current trade and other
receivables 157.3 (4.8) 0.8 153.3
Current assets 285.0 (4.8) 0.8 281.0
Contract assets 6.0 - (6.0) -
Non-current other receivables 10.1 - (6.0) 4.1
Non-current assets 339.9 - (6.0) 333.9
Accruals (72.0) - 5.2 (66.8)
Other payables (15.2) 4.8 - (10.4)
Current liabilities (199.5) 4.8 5.2 (189.5)
Total assets less current
liabilities 425.4 - - 425.4
----------- ---------- ---------- -----------
Cash flow prior year restatement
The movement in trade and other receivables presented in the
prior year Consolidated cash flow statement included prepayments in
respect of the acquisition of property, plant and equipment of
GBP6.1m.
It is now recognised by the Directors that the movement in trade
and other receivables in respect of this prepayment of GBP6.1m
presented within the Consolidated cash flow statement for the year
ended 31 December 2021 was incorrectly presented within 'cash flows
from operating activities' when it should have been included within
'cash flows from investing activities'.
In preparing the Consolidated cash flow statement for the year
ended 31 December 2022, the Directors have therefore restated the
comparative amounts to now present the movement in trade and other
receivables of GBP6.1m in respect of prepayments in relation to the
acquisition of property, plant and equipment within cash flows from
investing activities. This change in presentation within the
Consolidated cash flow statement has no effect on the cash position
of the Group or Company in their balance sheets and has no further
impact on the Group's or Company's financial statements.
The effect of the restatement on the Consolidated cash flow
statement in respect of the comparative amount for the year ended
31 December 2021 is set out below:
Group consolidated
cash flow statement
31 Dec 31 Dec
2021 2021
As reported Restated
GBPm GBPm
Decrease/(increase) in trade
and other receivables (11.2) (5.1)
Cash flow from operating activities 48.9 55.0
Acquisition of property, plant
and equipment (22.1) (28.2)
Cash flows from/(used in) investing
activities (1.9) (8.0)
Gross up of drawdowns and repayments of external borrowings
The proceeds from and repayments of borrowings had been
incorrectly calculated in the prior year Group and Company cash
flow statement. In preparing the Group and Company cash flow
statement for the year ended 31 December 2022, the Directors have
restated the comparative amounts to show the proceeds from and
repayments of borrowings as gross balances in line with IAS
7.21.
This change in presentation within the Group and Company cash
flow statement has no effect on the cash position of the Group or
Company in its balance sheet and has no further impact on the Group
or Company's financial statements. The effect of the restatement on
the Consolidated and Company cash flow statement in respect of the
comparative amount for the year ended 31 December 2021 is set out
below.
Group consolidated Company cash
cash flow statement flow statement
31 Dec 31 Dec 31 Dec 31 Dec
2021 2021 2021 2021
As reported Restated As reported Restated
GBPm GBPm GBPm GBPm
Proceeds from borrowings 84.0 205.0 - 205.0
Repayment of borrowings (89.9) (210.9) (5.7) (210.7)
Cash flows used in financing
activities (26.1) (26.1) (11.5) (11.5)
Gross up of subsidiary loans
The net loans advanced to subsidiaries presented in the prior
year Company's cash flow statement included the net position of the
loans made to and from subsidiaries instead of the gross cash
receipts and payments. In preparing the Company's cash flow
statement for the year ended 31 December 2022, the Directors have
restated the comparative amounts to show the loans advance to and
repaid from subsidiaries separately in line with IAS 7.21.
This change in presentation within the Company cash flow
statement has no effect on the cash position of the Company in its
balance sheet and has no further impact on the Company's financial
statements. The effect of the restatement on the Company cash flow
statement in respect of the comparative amount for the year ended
31 December 2021 is set out below.
Company
cash flow statement
31 Dec 31 Dec
2021 2021
As reported Restated
GBPm GBPm
Loans advanced to subsidiaries - (49.9)
Loans repaid from subsidiaries 19.4 69.3
Cash flows from/(used in) investing
activities 30.5 30.5
Going concern
In determining the appropriate basis of preparation of the
financial statements for the year ended 31 December 2022, the Board
is required to consider whether the Group and Parent Company 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 had GBP88.0m of undrawn committed facilities at 31
December 2022 (31 December 2021: GBP111.5m). At 31 December 2022,
the Group had GBP247.5m of committed facilities (31 December 2021:
GBP287.5m). GBP40.0m of revolving credit facilities which existed
at 31 December 2021 were due for renewal in July 2022, however the
Board did not pursue the renewal of this facility given the
significant liquidity headroom.
Following the sale of James Fisher Nuclear in March 2023, the
Group retained several legacy parent company guarantees supporting
the obligations of JFN (the "PCGs"). The retention of the PCGs
required consent under the Group's debt facilities prior to the
sale of JFN, which was not obtained at the time. This resulted in
the Group needing to obtain waivers in respect of the PCG and
accelerating its refinancing process. As at the date of this
report, the Group has received commitment letters from all of its
six lenders to enter into a single Revolving Credit Facility for
facilities of GBP210m. In addition, the Group has an agreed
long-form term sheet, together with agreed principles to govern
security and inter-creditor arrangements. The Group and lenders
have agreed a long-stop date of 7 June to complete the necessary
next steps that will allow the new RCF to be drawn. The agreed term
sheet contains conditions subsequent, including finalisation of the
security package, the execution of which is not entirely within the
Group's control. The existing waiver in respect of the technical
restriction on parent company guarantees relating to the disposal
of James Fisher Nuclear remains in place until 7 June 2023, the
agreed long-stop date, and the Group expects to complete the
refinancing by this date.
The key terms of the new facility agreement are:
- Maturity date: 31 March 2025.
- Net debt/EBITDA covenant (measured quarterly): 3.5x for 30
June and 30 September 2023, 3.25x for 31 December 2023 and 31 March
2024, 3x for 31 March 2024, 2.75x for 30 June 2024 and 2.5x
thereafter.
- Interest cover covenant (measured quarterly): 2.5x in June and
September 2023, 1.75x in December 2023 and March 2024, 2x in June
and September 2024, 2.5x in December 2023 and 2.75x in March
2025.
- Scheduled amortisation of: GBP15m on 30 September 2023, GBP10m
on 31 December 2023 and GBP10m on 30 June 2024.
- Minimum liquidity requirement: GBP10m.
The Group has been in compliance with the requirements of its
financial covenants under the existing agreement and remained so at
the 31 December 2022 measurement date.
Going concern assessment period
Accounting standards require the directors to make an assessment
of the company'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 taking into account any known liquidity
events that will occur after the 12 months period. Given that the
refinancing is agreed with the completion expected in the coming
weeks, the directors concluded that the 12 months going concern
assessment period is appropriate.
Board assessment
Base case
The Group continues to closely monitor and manage its liquidity
and covenants compliance. The Group has prepared base case cash
flow forecasts that demonstrate the Board's best estimate for the
going concern assessment period, taking into account the wider
macro-economic environment such as increases in the base interest
rate. The Board believes that in the preparation of the base case
it has taken into account some potential downside risks to business
performance, including the likelihood of winning major new
contracts, ongoing project delivery risks and timing of contract
cashflows. The base plan does not include any further disposals or
acquisitions. The base case demonstrated the Company would have
headroom against its facilities and would comply with covenants
over the going concern 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
margins achievement resulting in operating profit reduction of 10%
in 2023 and 25% in 2024;
- cash inflow disruptions that may result from late payments
from customers or project delivery challenges resulting in GBP20m
cash receipts reduction evenly spread over the going concern
period;
- further increase in interest rates of 50bps.
The above scenarios, individually and combined, demonstrated
sufficient liquidity headroom and covenants compliance.
Conclusion
Based on their assessment, the Directors believe it remains
appropriate to prepare the financial statements on a going concern
basis. However, the Directors recognise that the finalisation of
the outstanding areas in order to complete refinancing are not
totally in the direct control of the Group. This gives rise to a
material uncertainty, as defined in the accounting standards,
relating to material events and circumstances which may cast
significant doubt on the Group's ability continue as a going
concern and to realise its assets and discharge its liabilities in
the normal course of business. The Group, however, expects that the
refinancing will be completed in the coming weeks. The financial
statements do not include any adjustments that would result from
the basis of preparation being inappropriate.
2. Alternative performance measures
The Group uses a number of alternative (non-Generally Accepted
Accounting Practice (non-GAAP)) performance measures which are not
defined within IFRS. The 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 ratios
calculation 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.
During the year a review has been performed to determine which
APMs are most relevant to users of the financial results. As a
consequence, some measures have been removed (including underlying
dividend cover and underlying cash conversion) and a leverage
(replacing underlying net borrowings) and interest cover APMs have
been added with a view to increase reliance on statutory measures
and reduce the number of APMs. 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 and discontinued operations (see Note 4) 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 calculation, 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.
Continuing operations
------------------------------------------------------------------------------------------------------
Amortisation Impairment Specific Disposal
of acquired charges trade of Other Total
As intangible / receivables businesses / Underlying Discontinued underlying
2022 reported assets (reversals) provision Restructuring and assets Tax results Operations results
Continuing
operations GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 478.1 - - - - - - 478.1 42.8 520.9
Cost of
sales (350.9) - (4.5) - - (0.9) - (356.3) (43.3) (399.6)
--------- ------------- ------------ ------------ -------------- ----------- ------ ----------- ------------- -----------
Gross profit 127.2 - (4.5) - - (0.9) - 121.8 (0.5) 121.3
Administrative
expenses (104.4) 2.1 5.2 - 1.7 (2.5) 1.7 (96.2) (6.9) (103.1)
Impairment
of trade
receivables 0.3 - - (1.1) - - - (0.8) - (0.8)
Share of
post-tax
results
of associates 1.6 - - - - - - 1.6 0.1 1.7
--------- ------------- ------------ ------------ -------------- ----------- ------ ----------- ------------- -----------
Operating
profit/(loss) 24.7 2.1 0.7 (1.1) 1.7 (3.4) 1.7 26.4 (7.3) 19.1
Finance
income 0.7 - - - - - - 0.7 - 0.7
--------- ------------- ------------ ------------ -------------- ----------- ------ ----------- ------------- -----------
Finance
expense (10.9) - - - - - - (10.9) (0.1) (11.0)
--------- ------------- ------------ ------------ -------------- ----------- ------ ----------- ------------- -----------
Profit/(loss)
before
taxation 14.5 2.1 0.7 (1.1) 1.7 (3.4) 1.7 16.2 (7.4) 8.8
Income tax (5.5) - - - - - 0.8 (4.6) 0.8 (3.8)
--------- ------------- ------------ ------------ -------------- ----------- ------ ----------- ------------- -----------
Profit/(loss)
for the
year from
continuing
operations 9.0 2.1 0.7 (1.1) 1.7 (3.4) 2.5 11.6 (6.6) 5.0
Discontinued
operations
(Loss)/profit
for the
year from
discontinued
operations,
net of tax (19.8) - - - - - - (19.8) 19.8 -
--------- ------------- ------------ ------------ -------------- ----------- ------ ----------- ------------- -----------
Profit/(loss)
for the
year (10.8) 2.1 0.7 (1.1) 1.7 (3.4) 2.5 (8.2) 13.2 5.0
Operating
margin (%) 5.2% 5.5% -17.0% 3.7%
Segmental underlying operating profit is calculated as follows:
Marine Support 10.1 1.5 (0.8) (1.1) 0.4 (2.4) 0.2 7.9
Specialist
Technical (2.6) 0.1 1.8 - 1.3 - - 0.6
Offshore Oil 14.7 0.5 - - - - - 15.2
Tankships 9.9 - (0.3) - - (1.0) - 8.6
Corporate (7.4) - - - - - 1.5 (5.9)
------------------ ------- ----- ------- ------- ----- ------ ---- ------
Continuing 24.7 2.1 0.7 (1.1) 1.7 (3.4) 1.7 26.4
During the year, adjusting items were in relation to the
following matters:
Amortisation of acquired intangibles.
The impairment charges/(reversals) relate to goodwill,
intangible and tangible assets, and assets held for sale.
Specific trade receivables provision relates to a recovery of
amounts provided for in 2021 in relation to specific counterparty
risk and receivables billed over 12 months ago in relation to
certain projects - see below 2021 table.
Restructuring costs relates to restructuring programmes
completed during the year by the Fendercare and JFD businesses.
Disposal of businesses and assets relates to the disposal during
2022 of James Fisher Mimic Ltd, Prolec Ltd and Strainstall UK Ltd
for GBP18.5m proceeds with GBP4.3m gains less GBP1.8m costs of
disposal. In addition, the Group has recognised a gain of GBP0.9m
on disposal of one of its vessels in the Tankships division.
Other includes GBP1.5m past service cost recognised for the
MNRPF scheme in respect of ill health early retirement
benefits.
2021 Continuing operations
---------------------------------------------------------------------------------------------------
Amortisation Specific Disposal
of acquired Trade of Total
As intangible Impairment receivables businesses Other Underlying Discontinued underlying
reported assets charges provision Litigation and assets / Tax results operations results
Continuing
operations GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 442.4 - - - - - - 442.4 51.7 494.1
Cost of sales (338.8) - 11.0 - - - - (327.8) (45.8) (373.6)
--------- ------------- ----------- ------------ ----------- ----------- ------- ----------- ------------- -------------
Gross profit 103.6 - 11.0 - - 114.6 5.9 120.5
Administrative
expenses (118.9) 2.9 27.5 - 3.1 (0.1) - (85.5) (6.0) (91.5)
Impairment
of trade
receivables (7.3) - - 4.3 - - - (3.0) - (3.0)
Share of
post-tax
results of
associates 1.9 - - - - - - 1.9 0.1 2.0
--------- ------------- ----------- ------------ ----------- ----------- ------- ----------- ------------- -------------
Operating
profit/(loss) (20.7) 2.9 38.5 4.3 3.1 (0.1) - 28.0 - 28.0
Finance income 0.3 - - - - - - 0.3 - 0.3
Finance expense (8.5) - - - - - - (8.5) (0.1) (8.6)
--------- ------------- ----------- ------------ ----------- ----------- ------- ----------- ------------- -------------
Profit/(loss)
before
taxation (28.9) 2.9 38.5 4.3 3.1 (0.1) - 19.8 (0.1) 19.7
Income tax 0.8 - - - - - (10.9) (10.1) - (10.1)
--------- ------------- ----------- ------------ ----------- ----------- ------- ----------- ------------- -------------
Profit/(loss)
for the year
from
continuing
operations (28.1) 2.9 38.5 4.3 3.1 (0.1) (10.9) 9.7 (0.1) 9.6
Discontinued
operations
(Loss)/profit
for the year
from
discontinued
operations,
net of tax (0.1) - - - - - - (0.1) 0.1 -
--------- ------------- ----------- ------------ ----------- ----------- ------- ----------- ------------- -------------
Profit/(loss)
for the year (28.2) 2.9 38.5 4.3 3.1 (0.1) (10.9) 9.6 - 9.6
Operating
margin (%) (4.7%) 6.3% 0.1% 5.7%
Segmental underlying operating profit is calculated as follows:
Marine Support (21.0) 2.3 18.3 2.4 3.1 (0.1) - 5.0
Specialist
Technical 7.1 0.1 2.8 - - - - 10.0
Offshore Oil (5.2) 0.5 13.9 1.9 - - - 11.1
Tankships 1.3 - 3.5 - - - - 4.8
Corporate (2.8) - - - - - - (2.8)
-------------------- --------- ----- ------- ---- ---- ------- -------
Continuing (20.6) 2.9 38.5 4.3 3.1 (0.1) - 28.1
During 2021, adjusting items were in relation to the following
matters:
Amortisation of acquired intangibles.
The impairment charges relate to goodwill, intangible and
tangible assets, right-of-use assets and assets held for sale.
Specific trade receivables provision relates to amounts provided
for specific counterparty risk and receivables billed over 12
months ago in relation to certain projects.
Litigation costs relates to matters described.
Disposal of businesses and assets relates to the disposal during
2021 of James Fisher Testing Services Ltd which was sold for
proceeds of GBP5.7m and resulted in a gain of GBP0.5m; sale of
James Fisher NDT Ltd for which proceeds were GBP1.2m and loss on
disposal of GBP0.7m; a gain of GBP0.3m on the disposal of the
Paladin Dive Support Vessel for US$17.3m in gross proceeds.
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 underlying operating profit before
interest, tax, depreciation and amortisation, adjusted for impacts
of IFRS 16. The covenants require that EBITDA is calculated
excluding the effects of IFRS 16. The IFRS 16 adjustment is
calculated as a difference between ROU depreciation and operating
lease payments.
2022 2021
GBPm* GBPm
Underlying operating profit 26.4 28.0
Depreciation and amortisation 40.3 44.2
Less: Depreciation on right-of-use assets (12.2) (13.2)
Amortisation of acquired intangibles (2.1) (2.9)
IFRS 16 impact removed 0.2 (1.8)
------- -------
Covenant Ebitda 52.6 54.3
------- -------
*Excludes discontinued operations
2.3 Leverage
Leverage is calculated in line with the Group's banking
covenants. It is defined as Covenant EBITDA divided by underlying
net borrowings. Underlying net borrowings is net borrowings
including guarantees and excluding right-of-use operating leases,
which are the leases which would be considered operating leases
under IAS17, prior to the introduction of IFRS16. Guarantees are
those issued by a bank or financial institution to compensate a
stakeholder in the event of a Group company not fulfilling it's
obligations in the ordinary course of business in relation to
either advance payments or trade debtors.
2022 2021
GBPm GBPm
Net borrowings 185.8 185.6
Guarantees 2.3 8.4
Less: right-of-use operating leases (46.0) (38.2)
------- -------
Underlying Net borrowings 142.1 155.8
------- -------
Covenant Ebitda 52.6 54.3
Leverage 2.7 2.9
------- -------
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
underlying operating profit, divided by average capital employed.
Group ROCE, is defined as 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 performance
conditions under the Group's LTIP scheme.
2022 2021
GBPm GBPm
Net assets 218.3 210.6
Less right-of-use assets (52.3) (41.8)
Plus net borrowings 185.8 185.6
Capital employed 351.7 354.4
Add: amortisation of customer relationships 1.7 2.4
353.4 356.8
------- -------
Underlying operating profit 19.1 28.0
Notional tax at the underlying effective tax rate (5.1) (14.3)
14.0 13.7
Average capital employed 355.1 377.4
Return on average capital employed 3.9% 3.6%
------- -------
Year ended 31 December
2022 Marine Specialist
Offshore
Support Technical Oil Tankships
GBPm GBPm GBPm GBPm
Net assets 119.4 83.9 102.8 34.0
Less right-of-use assets (6.3) (3.0) (4.0) (38.1)
Plus net borrowings 9.9 3.3 4.4 33.8
------- ---------- -------- ---------
Capital employed 123.1 84.1 103.3 29.7
Add: amortisation of
customer relationships 1.6 0.1
124.6 84.2 103.3 29.7
------- ---------- -------- ---------
Underlying operating
profit 7.9 (6.7) 15.2 8.6
Average capital employed 123.2 91.2 101.7 32.1
Return on average capital
employed 6.4% (7.4%) 14.9% 26.8%
------- ---------- -------- ---------
Year ended 31 December
2021 Marine Specialist
Offshore
Support Technical Oil Tankships
GBPm GBPm GBPm GBPm
Net assets 114.8 97.7 100.0 36.0
Less right-of-use assets (6.1) (6.2) (4.6) (23.6)
Plus net borrowings 10.6 6.6 5.1 22.2
------- ---------- -------- ---------
Capital employed 119.3 98.1 100.5 34.5
Add: amortisation of
customer relationships 2.6 0.1
121.8 98.3 100.5 34.5
------- ---------- -------- ---------
Underlying operating
profit 5.0 9.9 11.1 4.8
Average capital employed 142.5 101.1 108.5 32.9
Return on average capital
employed 3.5% 9.8% 10.2% 14.7%
------- ---------- -------- ---------
2.5 Interest cover
Interest cover is calculated in line with the Group's banking
covenants. It is defined as a ratio of underlying net operating
profit, adjusted for IFRS16 impact, to covenant interest.
2022 2021
GBPm GBPm
Interest receivable on Short-term deposits less
interest payable on bank loans 8.1 6.0
Finance lease interest 0.1 0.1
Arrangement fees (1.0) (1.2)
------------------ ------
Covenant interest 7.2 4.9
------------------ ------
Underlying net operating profit 26.4 28.0
IFRS 16 impact removed (0.7) (1.6)
25.7 26.4
------------------ ------
Interest cover 3.5 5.4
------------------ ------
2.6 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total
of underlying profit before tax, less income tax, but excluding the
tax impact on adjusting items, less profit attributable to
non-controlling interests, divided by the weighted average number
of ordinary shares in issue during the year. Underlying earnings
per share is a performance condition used for the LTIP schemes.
2022 2021
GBPm GBPm
Loss attributable to owners of the Company (11.1) (27.8)
Adjusting items 1.7 48.7
Tax on adjusting items 0.8 (10.9)
Underlying profit attributable to owners
of the Company (8.6) 10.0
---------- ----------
Basic weighted average number of shares
(note 10) 50,345,989 50,345,477
Diluted weighted average number of shares
(note 10) 50,367,147 50,356,037
Underlying basic earnings per share (17.1) 20.0
Underlying diluted earnings per share (17.1) 20.0
3. Segmental information
The Group has four operating segments reviewed by the Board:
Marine Support, Specialist Technical, Offshore Oil and Tankships..
Marine Support, Specialist Technical and Offshore Oil are
differentiated by markets and industries which they serve. The
Tankships division is differentiated by the services which they
provide. The Board assess the performance of the segments based on
underlying operating profit, underlying operating margin and return
on capital employed. It considers that this information is the most
relevant in evaluating the performance of its segments relative to
other entities which operate in similar markets. Inter-segmental
sales are made using prices determined on an arms-length basis.
Sector assets exclude cash, short-term deposits and corporate
assets that cannot reasonably be allocated to operating segments.
Sector liabilities exclude borrowings, retirement benefit
obligations and corporate liabilities that cannot reasonably be
allocated to operating segments.
During the year, the Nuclear business (within Specialist
Technical) has been classified as held for sale and is shown as
discontinued operations. The prior year comparative has been
restated.
Year ended 31
December
2022 Marine Specialist Offshore Continuing Discontinued
Support Technical Oil Tankships Corporate Total Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Segmental revenue 224.6 68.2 106.7 78.9 - 478.4 43.9 522.3
Inter-segmental sales (0.1) (0.1) (0.1) - - (0.3) (1.1) (1.4)
-------- ----------- --------- ---------- ---------- ----------- ------------- --------
Revenue 224.5 68.1 106.6 78.9 - 478.1 42.8 520.9
======== =========== ========= ========== ========== =========== ============= ========
Underlying operating
profit/(loss) 7.9 0.6 15.2 8.6 (5.9) 26.4 (7.3) 19.1
APMs (see Note 2) 2.2 (3.2) (0.5) 1.3 (1.5) (1.7) (13.3) (15.0)
-------- ----------- --------- ---------- ---------- ----------- ------------- --------
Operating
profit/(loss) 10.1 (2.6) 14.7 9.9 (7.4) 24.7 (20.6) 4.1
Finance income 0.7 - 0.7
Finance expense (10.9) - (10.9)
----------- ------------- --------
Profit/(loss) before
tax 14.5 (20.6) (6.2)
Income tax (5.5) 0.8 (4.7)
----------- ------------- --------
Profit/(loss) for
the year 9.0 (19.8) (10.8)
=========== ============= ========
Assets and
liabilities
Segmental assets 188.1 114.4 131.4 86.5 63.6 584.0 16.3 600.3
Investment in joint
ventures 2.4 3.4 2.8 - - 8.7 - 8.7
-------- ----------- --------- ---------- ---------- ----------- ------------- --------
Total assets 190.5 117.8 134.2 86.5 63.6 592.7 16.3 609.0
Segmental liabilities (71.2) (34.0) (31.4) (52.5) (185.3) (374.4) (16.3) (390.7)
-------- ----------- --------- ---------- ---------- ----------- ------------- --------
119.3 83.8 102.8 34.0 (121.7) 218.3 - 218.3
======== =========== ========= ========== ========== =========== ============= ========
Other segmental
information
Capital expenditure 9.6 4.6 8.9 4.0 - 27.1 0.3 27.4
Depreciation and
amortisation 11.0 5.6 11.2 12.1 0.4 40.3 0.8 41.1
======== =========== ========= ========== ========== =========== ============= ========
Revenue from continuing activities disclosed in the income
statement is comprised of goods and services of GBP372.3m (2021:
GBP335.3m), services revenue including operation of vessels and
plant & equipment of GBP62.0m (2021: GBP58.7m) and construction
contract income of GBP33.5m (2021: GBP38.6m). These revenues are
accounted for under IFRS 15: Revenue from Contracts with
Customers.
At 31 December 2022, there is GBP6.1m (2021: GBP5.3m)
consideration allocated to performance obligations that were
unsatisfied and expected to be recognised as revenue within 12
months.
Revenue from operating lease rental income is GBP10.3m (2021:
GBP9.8m) which is accounted for under IFRS16: Leases. The nature of
the leasing activities in the period are various short-term
equipment leases in the offshore Oil and Marine Support
divisions.
Revenue from discontinued activities disclosed in the income
statement is comprised of goods and services of GBP27.8m (2021:
GBP34.7m) and construction contract income of GBP15.0m (2021:
GBP17.0m).
For details of the amount of impairment losses and reversals of
impairment losses recognised in profit or loss during the period,
see Note 2.1.
Year ended 31
December 2021 Marine Specialist Offshore Continuing Discontinued
Support Technical Oil Tankships Corporate Total Total Total
restated* restated* restated*
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Segmental revenue 214.7 81.8 86.5 60.1 - 443.1 52.8 495.9
Inter-segmental
sales (0.2) (0.3) (0.2) - - (0.7) (1.1) (1.8)
Revenue 214.5 81.5 86.3 60.1 - 442.4 51.7 494.1
======= ========== ======== ========= ========= ========= ============= =======
Underlying operating
profit/(loss) 5.0 10.0 11.1 4.8 (2.8) 28.1 (0.1) 28.0
APMs (see Note
2) (26.0) (2.9) (16.3) (3.5) - (48.7) - (48.7)
------- ---------- -------- --------- --------- --------- ------------- -------
Operating (loss)/profit (21.0) 7.1 (5.2) 1.3 (2.8) (20.6) (0.1) (20.7)
Net finance expense (8.1) (0.2) (8.3)
--------- ------------- -------
Loss before
tax (28.7) (0.3) (29.0)
Income tax 0.6 0.2 0.8
Loss for the
year (28.1) (0.1) (28.2)
========= ============= =======
Assets and liabilities
Segmental assets 189.7 118.9 124.2 75.1 73.4 581.3 35.9 617.2
Investment in
joint ventures 2.6 3.0 2.2 - - 7.8 0.2 8.0
------- ---------- -------- --------- --------- --------- ------------- -------
Total assets 192.3 121.9 126.4 75.1 73.4 589.1 36.1 625.2
Segmental liabilities (77.4) (37.8) (26.4) (39.2) (211.3) (392.1) (22.5) (414.6)
------- ---------- -------- --------- --------- ---------
114.9 84.1 100.0 35.9 (137.9) 197.0 13.6 210.6
======= ========== ======== ========= ========= ========= ============= =======
Other segmental
information
Capital expenditure 6.1 2.4 6.3 4.3 - 19.1 0.3 19.4
Depreciation
and amortisation 12.3 5.1 12.1 12.4 0.5 42.4 1.8 44.2
======= ========== ======== ========= ========= ========= ============= =======
* 2021 results are restated due to a business classified as
discontinued operations - see Note 4.
4. Discontinued Operations
In December 2022, management agreed a plan to sell the Nuclear
business as a result of a strategic decision to rationalise and
focus the portfolio within the Specialist Technical division. At 31
December, the business has been classified as held for sale and is
part of a single co-ordinated plan to dispose of a separate major
line of business. It is classified as a discontinued operation.
On 6 March 2023, the Group announced that the entire share
capital of James Fisher Nuclear Holdings Limited and related
properties were sold to Myneration Limited, a wholly-owned
investment vehicle of Rcapital Partners LLP for a consideration of
GBP3. The Group has retained certain parent company guarantees
which historically were given to support the obligations of
JFN.
Results of discontinued operations 2022 2021
GBPm GBPm
Revenue 43.9 52.8
Inter-segmental sales (1.1) (1.1)
------ ------
42.8 51.7
Expenses (50.1) (51.8)
------ ------
Loss before taxation (7.3) (0.1)
Income tax 0.8 0.0
------ ------
Loss from operating activities after tax (6.5) (0.1)
Loss on remeasurement to fair value less costs
to sell (13.3) -
Income tax on loss on remeasurement to fair - -
value less costs to sell
Loss for the year from discontinued operations (19.8) (0.1)
====== ======
Attributable to:
Owners of the Company (19.8) (0.1)
Non-controlling interests - -
====== ======
(19.8) (0.1)
====== ======
Cash flows from/(used in) discontinued operations 2022 2021
GBPm GBPm
Net cash from operating activities (3.1) 1.1
Net cash from investing activities (5.0) (1.1)
Net cash from financing activities - -
Net cash flows for the year (8.1) -
===== =====
At 31 December 2022, the disposal group was stated at fair
value less costs to sell and comprised the following assets
and liabilities:
2022
GBPm
Property, plant and equipment 2.3
Inventories 0.7
Trade and other receivables 10.5
Cash and cash equivalents 2.8
-------
Assets held for sale 16.3
-------
Trade and other payables (13.7)
Lease liabilities (2.2)
Taxation (0.3)
-------
Liabilities associated with assets held for
sale (16.3)
-------
On transfer of assets to held for sale a GBP13.3 loss was
recognised on remeasurement to fair value less cost to sell,
consisting of impairments of goodwill (GBP8.1m), property, plant
and equipment (GBP3.9) and anticipated costs of disposal
(GBP1.3m).
The non-recurring fair value mearsurement for the disposal group
before GBP1.3m costs to sell has been categorised as a Level 3 fair
value based on the present value of cash flows.
5. Taxation
(a) The tax charge is based on profit for the year and
comprises:
2022 2021
GBPm GBPm
Current tax:
UK corporation tax (1.2) (0.7)
Overseas tax (6.3) (6.0)
Adjustment in respect of prior years:
UK corporation tax 0.5 1.3
Overseas tax 0.2 (0.3)
------ ------
Total current tax (6.8) (5.7)
------ ------
Deferred tax:
Origination and reversal of temporary differences:
Current year
UK corporation tax 0.7 8.3
Overseas tax (0.3) -
Prior year
UK corporation tax 0.9 (0.6)
Overseas tax - (1.2)
Tax expense on continuing operations (5.5) 0.8
====== ======
The tax expense excludes a tax credit from discontinued
operations of GBP0.8m (2021: GBPnil).
The total tax charge in the income statement includes a further
GBP0.1m (2021: GBP0.3m) which is stated within the share of
post-tax results of joint ventures.
Prior year UK tax includes a credit of GBP7.9m, which represents
deferred tax recognised on the timing differences created following
the impairment of dive support vessels during the year ended 31
December 2020 and the Group's current expectations regarding Dive
Support operations.
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to shareholders by the weighted average number of
ordinary shares in issue during the year, after excluding 47,855
(2021: 54,571) ordinary shares held by the James Fisher and Sons
plc Employee Share Ownership Trust (ESOT), as treasury shares.
Diluted earnings per share are calculated by dividing the net
profit attributable to shareholders by the weighted average number
of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
At 31 December 2022, 1,759,740 options (2021: 650,513) 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:
2022 2021
GBPm GBPm
Loss after tax attributable to shareholders (11.1) (27.8)
------- -------
Weighted average number of shares
2022 2021
Number Number
of of
shares shares
Basic weighted average number of shares 50,345,989 50,345,477
Potential exercise of share based payment schemes 21,158 10,560
Diluted weighted average number of shares 50,367,147 50,356,037
=========== ===========
Earnings per share pence pence
Basic earnings per share (22.1) (55.2)
Diluted earnings per share (22.1) (55.2)
----------- -----------
Earnings per share - continuing operations pence pence
Basic earnings per share 17.4 (55.0)
Diluted earnings per share 17.4 (55.0)
----------- -----------
Earnings per share - discontinued operations pence pence
Basic earnings per share (39.4) (0.2)
Diluted earnings per share (39.4) (0.2)
----------- -----------
7. Dividends paid and proposed
There were no dividends paid or proposed in either 2022 or
2021.
8. Assets and liabilities held for sale
In June 2021, management agreed a plan to sell the Dive Support
Vessel (DSV) known as the Swordfish within the Marine Support
division. During January 2023, the vessel was sold for GBP18. 5m
being proceeds less selling costs. At 31 December, a GBP5.4m
reversal of impairment loss has been recorded in cost of sales.
GBP16.3m assets and GBP16.3m liabilities relates to the Nuclear
business in the Specialist Technical division which was classified
as a discontinued operation, see Note 4 for details.
GBP1.5m assets relates to land and buildings for a business
within the Specialist Technical division.
9. Retirement benefit obligations
The Group and Company defined benefit pension scheme obligations
relate to the James Fisher and Sons plc Pension Fund for Shore
Staff (Shore staff), the Merchant Navy Officers Pension Fund
(MNOPF) and the Merchant Navy Ratings Pension Fund (MNRPF) 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 2022 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. The Group's obligations in respect of its
pension schemes at 31 December 2022 were as follows:
Group
--------------
2022 2021
GBPm GBPm
Shore staff 5.5 (1.0)
MNOPF (0.4) (0.9)
MNRPF - -
------ ------
5.1 (1.9)
====== ======
10. Reconciliation of net borrowings
Net debt comprises interest bearing loans and borrowings less
cash and cash equivalents.
Other
31 December Cash non- Exchange 31 December
2021 flow cash* Transfers movement 2022
GBPm GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 34.5 (11.4) - (2.8) 2.5 22.8
Cash - classified within
Assets held for sale - - - 2.8 - 2.8
Debt due within one year (0.1) - - (36.5) - (36.6)
Debt due after one year (174.0) 16.6 (1.0) 36.5 - (121.9)
------------- ------- --------- ---------- ----------- ------------
(174.1) 16.6 (1.0) - - (158.5)
Lease liabilities (46.0) 14.5 (17.8) - (3.6) (52.9)
---------- -----------
Net borrowings (185.6) 19.7 (18.8) - (1.1) (185.8)
------------- ------- --------- ---------- ----------- ------------
31 December Cash Other Exchange 31 December
2020 flow non-cash Transfers movement 2021
GBPm GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents* 13.5 20.9 - - 0.1 34.5
Debt due within one year (0.2) 0.1 - - - (0.1)
Debt due after one year (178.9) 5.8 (0.9) - - (174.0)
------------- ------- --------- ---------- ----------- ------------
(179.1) 5.9 (0.9) - - (174.1)
Lease liabilities (32.5) 13.7 (27.0) - (0.2) (46.0)
Net borrowings (198.1) 40.5 (27.9) - (0.1) (185.6)
------------- ------- --------- ---------- ----------- ------------
*Other non-cash includes lease additions and finance expense
related to the unwind of discount on right-of-use lease
liability.
Transfers includes GBP2.8m cash and cash equivalents related to
a discontinued operation (see Note 4).
11. Share capital
Allotted, called up and fully paid
GBP1 Cumulative
25p Ordinary shares Preference shares
In millions of shares 2022 2021 2022 2021
In issue at 1 January and at
31 December 50.4 50.4 0.1 0.1
========== ========== ========= =========
2022 2021 2022 2021
GBPm GBPm GBPm GBPm
Issued share capital 12.6 12.6 0.1 0.1
========== ========== ========= =========
The preference shareholders are entitled to receive 3.5%
cumulatively per annum, payable in priority to any dividend on the
ordinary shares. The ordinary shareholders are entitled to receive
dividends as declared from time to time by the Directors.
Shares all carry equal voting rights of one vote per share held.
They also have the right to attend and speak at general meetings,
exercise voting rights and appoint proxies. Neither type of share
is redeemable. In the event of a winding-up order the amount
receivable in respect of the cumulative preference shares is
limited to their nominal value. The ordinary shareholders are
entitled to an unlimited share of the surplus after distribution to
the cumulative preference shareholders.
2022 2021
Treasury shares GBPm GBPm
47,855 (2021: 54,571) ordinary shares
of 25p 0.6 0.6
===== =====
The Company has an established Employee Share Ownership Trust,
the James Fisher and Sons plc Employee Share Ownership Trust, to
meet potential obligations under share option and long-term
incentive schemes awarded to employees. The historic cost of these
shares at 31 December 2022 was GBP0.6m (2021: GBP0.6m). The trust
has not waived its right to receive dividends.
No shares were issued during the year. In the year ended 31
December 2021, 26,738 ordinary shares with an aggregate nominal
value of GBP6,685 were issued to satisfy awards made under the
Company's Executive Share Option Scheme at option prices of 521.67p
and 567p per share giving rise to total consideration of
GBP530,055.
The Trust purchased no shares during the year. During 2021, the
Trust purchased 50,000 of its own shares in the market at an
average cost per share of GBP9.87 and a total cost of GBP0.5m.
12. Related party transactions
Excepting the change of Directors, there were no material
changes to related parties or associated transactions from those
disclosed in the 2021 Annual Report.
13. Post Balance sheet Events
In March 2023, Tankships entered into a contract to sell the
Mersey Fisher. The vessel will be delivered to the new owners
during June 2023 with expected consideration of USD 3m.
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END
FR NKFBPBBKKBQB
(END) Dow Jones Newswires
April 28, 2023 02:58 ET (06:58 GMT)
Fisher James And Sons (AQSE:FSJ.GB)
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