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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Fisher (james) & Sons Plc | LSE:FSJ | London | Ordinary Share | GB0003395000 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.75 | -0.29% | 261.00 | 258.50 | 263.50 | 258.50 | 254.00 | 256.00 | 12,914 | 16:35:15 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Deep Sea Frn Trans-freight | 520.9M | -11.1M | -0.2205 | -11.72 | 130.15M |
TIDMFSJ
RNS Number : 2282P
Fisher (James) & Sons plc
30 August 2017
30 August 2017
James Fisher and Sons plc
Half Year Results 2017
James Fisher and Sons plc (FSJ.L) ("James Fisher" or "the Group"), the leading marine service provider, announces its results for the six months ended 30 June 2017.
H1 2017 H1 2016 % change Group revenue GBP235.8m GBP209.3m +13% Underlying operating profit * GBP21.3m GBP19.9m +7% Underlying profit before tax * GBP18.6m GBP17.5m +6% Underlying diluted earnings per share * 30.1p 29.4p +2% Interim dividend per share 9.40p 8.55p +10% Statutory profit before tax GBP17.6m GBP17.4m +1%
* underlying profit excludes separately disclosed items.
Highlights:
-- Revenue up 13% at GBP235.8m (2016: GBP209.3m) -- Underlying operating profit 7% higher at GBP21.3m (2016: GBP19.9m) -- Strong profit growth in Specialist Technical -- Underlying diluted earnings per share up 2% to 30.1p (2016: 29.4p) per share -- Interim dividend raised by 10% to 9.4p per share
Commenting on the results, Nick Henry, Chief Executive Officer said:
"James Fisher had a positive start to the year with revenue increasing by 13% to GBP235.8m and underlying operating profit by 7%. The phasing of renewables projects within Marine Support combined with a degree of recovery in maintenance activity in the oil and gas sector indicates stronger growth for the Group in the second half leading to a good improvement in the result for the year."
For further information:
Chief Executive Officer James Fisher and Nick Henry Group Finance 020 7614 Sons plc Stuart Kilpatrick Director 9508 ------------------ -------------------- ----------------- --------- Susanne Yule 0203 727 FTI Consulting Richard Mountain 1340 ------------------ --------------------------------------- ---------
Chairman's Statement
Half Year Results for the six months ended 30 June 2017
Results
I am pleased to report that James Fisher had a positive start to the year with revenue in the first half increasing by 13% to GBP235.8m (2016: GBP209.3m) and underlying profit before tax by 6% to GBP18.6m (2016: GBP17.5m) compared with the same period last year.
Three of our divisions continued to trade well, with Marine Support and Tankships profits at similar levels to last year and Specialist Technical significantly ahead. Offshore Oil reported similar revenue but reduced profits after a slow start in the first four months of the year reduced utilisation levels. Trading in May and June in this division gives grounds for some optimism for an improved second half.
Strategic Developments
James Fisher continues to pursue a consistent strategy of investing in niche businesses operating in demanding environments where strong marine service skills are valued and rewarded. Whilst organic growth has driven the majority of James Fisher's development, the Group continues to be alert for incremental acquisitions which will strengthen our range of products, services or geographical coverage.
The first half saw the Group's investments of recent years bear fruit with significantly higher volumes of work in Asia Pacific for our Specialist Technical businesses and the opening of an important new market in Brazil for ship-to-ship oil transfer services. In March we strengthened our product offering to the offshore renewables sector with the acquisition of Rotos 360, a high technology specialist in the repair and reconditioning of wind turbine rotor blades.
Outlook
Profit in the second half is likely to benefit from the phasing of projects across our renewables businesses due to seasonal factors and across our offshore oil businesses due to some improvement in oil and gas sector demand. We would therefore expect to see good growth from our Marine Support division. In Offshore Oil, orders in our Norwegian and our downhole equipment businesses have begun to show clear signs of recovery. Our Specialist Technical businesses continue to trade well despite some slowing in our nuclear decommissioning activities. Tankships maintain its good performance of recent years. Overall, we therefore expect to see stronger growth for the Group in the second half leading to a good improvement in the result for the year.
Dividend
The Board believes that James Fisher remains well placed to provide further growth and value for its shareholders. The Board has agreed a 10% increase in the interim dividend to 9.40 pence per share (2016: 8.55p) payable on 3 November 2017 to shareholders on the register on 6 October 2017.
C J Rice
29 August 2017
Operating and Financial Review
Half Year Results for the six months ended 30 June 2017
Operating performance
The Group's financial performance in the first half progressed well with a 7% increase in underlying operating profit on revenue that was 13% higher at GBP235.8m (2016: GBP209.3m). The overall growth rates reported have been positively impacted by exchange rates as a significant proportion of the Group's revenue is received in US Dollars. Changes at constant exchange rates have been calculated by retranslating the results for the six months ended 30 June 2016 at the average rates for the comparator in 2017.
Change H1 H1 at constant Revenue 2017 2016 Change currency Group 235.8 209.3 +13% +8% ------------------------ -------- -------- --------- ------------- Marine Support 105.6 92.4 +14% +9% Specialist Technical 75.7 62.9 +20% +19% Offshore Oil 27.1 27.0 - (7)% Tankships 27.4 27.0 +1% (2)% ------------------------ -------- -------- --------- ------------- Change Underlying operating H1 H1 at constant profit 2017 2016 Change currency Group 21.3 19.9 +7% +4% ------------------------ -------- -------- --------- ------------- Marine Support 9.1 9.3 (2)% (6)% Specialist Technical 8.5 6.1 +39% +38% Offshore Oil 1.1 2.1 (47)% (52)% Group revenue increased by 13% compared to prior period and by 8% at constant currency. The contribution from businesses acquired was 5% and organic growth, driven by Marine Support and Specialist Technical, was 3%. Offshore Oil revenue was flat but 7% lower excluding currency effects reflecting reduced demand in the first four months, in particular. Underlying operating profit increased by 7% to GBP21.3m (2016: GBP19.9m). Underlying operating profits at Marine Support and Tankships were broadly similar to prior period and a 38% increase at Specialist Technical more than offset the lower result Tankships 3.9 3.8 +3% +1% at Offshore Oil. Common costs (1.3) (1.4) ------------------------ -------- -------- --------- -------------
Marine Support
H1 2017 H1 2016 Revenue (GBPm) 105.6 92.4 Underlying operating profit (GBPm) 9.1 9.3 Underlying operating margin 8.6% 10.1% Return on capital employed 12.0% 13.6%
Revenue in Marine Support grew by 14%. Volumes in ship-to-ship transfers were weaker in Asia Pacific, but this was offset by the commencement of operations for the Brazilian market. Whilst the businesses acquired in the renewables sector contributed to some increase in revenue, the phasing of projects within both the UK renewables and international marine service sectors, suppressed profits in the first half. Subtech, our South African based marine service business, contributed to the first half growth with project wins in the Middle East and West Africa.
Underlying operating profit was marginally lower at GBP9.1m (2016: GBP9.3m) as the benefit from increased ship-to-ship transfers and businesses acquired was offset by a lower level of marine service projects and by a slow start from our mass-flow excavation business which suffered from the weakness in the oil & gas sector, particularly in the first four months of the year. The Group's marine services and support contract in relation to the construction of the Galloper Wind Farm performed well in the period but did not see the benefit of additional work.
On 22 March 2017, the Group acquired Rotos 360 for an initial consideration of GBP1.5m with potential further consideration of GBP5.0m dependant on profit targets for the three years ending 31 December 2019. Rotos 360 uses the latest technological innovation to provide solutions in the inspection, repair and reconditioning of wind farm rotor blades, primarily in the offshore environment. The company was established in 2013 as part of a UK Government funded research project to reduce the cost of operation and maintenance of offshore wind turbines.
Specialist Technical
H1 2017 H1 2016 Revenue (GBPm) 75.7 62.9 Underlying operating profit (GBPm) 8.5 6.1 Underlying operating margin 11.2% 9.7% Return on capital employed 18.8% 15.6%
Specialist Technical revenue was 20% higher than prior period at GBP75.7m (2016: GBP62.9m). Our defence and diving equipment business, JFD, was 24% ahead of 2016, reflecting a full six months from the Indian submarine rescue project compared to three months in 2016, the start of a saturation diving system for China and including 5% relating to businesses acquired. In nuclear decommissioning, whilst the Winfrith reactor project continued to perform well, the business saw a 5% reduction in revenue as a change in UK policy has reduced projects awarded across the supply chain.
Underlying operating profit was 39% ahead of the equivalent six months in 2016 at GBP8.5m (2016: GBP6.1m) reflecting good contributions from JFD's service contracts, products and submarine rescue and diving equipment projects which more than offset a small reduction in nuclear profitability.
JFD successfully completed the first operational dive of its Compact Bailout Rebreathing Apparatus (Cobra) which provides 45 minutes of fully independent breathing gas to a diver in an emergency to enable them to return to the diving bell. Our nuclear decommissioning business, JFN, won its first order to supply a manipulator to China in the second half.
Offshore Oil
H1 2017 H1 2016 Revenue (GBPm) 27.1 27.0 Underlying operating profit (GBPm) 1.1 2.1 Underlying operating margin 4.1% 7.8% Return on capital employed 1.6% 3.3%
Offshore Oil had a slow start to the year and although revenue was similar to 2016, after adjusting for currencies, it was 7% lower. The majority of the reduction was due to low utilisation levels in the early months of the year which decreased margins.
Underlying operating profit was GBP1.0m lower at GBP1.1m (2016: GBP2.1m) and underlying earnings before interest, tax, depreciation and amortisation was GBP6.4m (2016: GBP7.6m). Overheads in the half were reduced by a further 10%. Whilst the first half result was lower, the business remains profitable and orders received since May, together with indications from customers, suggest a stronger second half.
Tankships
H1 2017 H1 2016 Revenue (GBPm) 27.4 27.0 Underlying operating profit (GBPm) 3.9 3.8 Underlying operating margin 14.2% 14.1% Return on capital employed 29.2% 28.3%
Tankships reported a similar result to the first half of 2016 with an operating margin of around 14%. The business operated 14 vessels (2016: 15) in the period and received some benefit from lower bareboat charter costs in the period. It also won a contract to supply two vessels for the refuelling of the HMS Queen Elizabeth during the second half of 2017.
Finance
Interest and taxation
Net interest was GBP0.2m higher at GBP2.6m (2016: GBP2.4m) due to increased borrowings mainly arising from the funding of working capital for the project to design and assemble two submarine rescue vessels for the Indian Navy and from other large projects.
The effective tax rate on underlying profit before tax in the period increased to 17.2% (2016: 15.4%). This rate is based on estimates for the full year and has increased due to a greater proportion of profits being earned in higher tax jurisdictions such as Brazil and Ghana. The first half of 2016 also benefitted from adjustments to tax provisions in respect of prior years which has not been repeated in 2017. The Group's tanker operations continue to be taxed with respect to tonnage rather than profits and this reduces the effective rate by 2.3 (2016: 2.4) percentage points in the period.
Separately disclosed items
The directors consider that alternative performance measures described in note 3 assist an understanding of the underlying trading performance of the businesses. These measures exclude separately disclosed items which consist of gains or losses on the sale of a business, asset impairments and charges or income relating to the acquisition of businesses. The net charge for separately disclosed items after tax in the six months ended 30 June 2017 was GBP0.8m (2016: GBPnil).
Earnings per share and dividends
Underlying profit before taxation increased 6% to GBP18.6m (2016: GBP17.5m) due to the strong operating profit growth at Specialist Technical. Underlying diluted earnings per share rose by 2% to 30.1 pence per share (2016: 29.4p), which was lower than the uplift in underlying profit before taxation due to the higher effective tax rate and a larger minority interest charge in the period.
Diluted earnings per share after separately disclosed items were 28.5 pence per share (2016: 29.4p). The interim dividend has increased by 10% to 9.40 pence per share (2016: 8.55p) and will be paid on 3 November 2017 to shareholders on the register on 6 October 2017.
Cash flow and borrowings
Summary cash flow ----------------------------- -------- -------- H1 2017 H1 2016 GBPm GBPm ----------------------------- -------- -------- Underlying operating profit 21.3 19.9 Depreciation & amortisation 13.1 12.1 ----------------------------- Ebitda * 34.4 32.0 Working capital (18.9) (10.1) Working capital - Indian Navy (6.7) - Pension / other (2.3) (1.7) ----------------------------- Operating cash flow 6.5 20.2 Interest & tax (5.1) (5.1) Capital expenditure (11.3) (8.6) Acquisitions (4.2) (7.7) Dividends (8.8) (8.0) Other 0.3 (2.4) ----------------------------- Net outflow (22.6) (11.6) Net borrowings at start of period (105.7) (93.9) ----------------------------- -------- -------- Net borrowings at end of period (128.3) (105.5) ============================= ======== ======== Underlying earnings before interest, tax depreciation and amortisation (Ebitda) increased by 8% to GBP34.4m (2016: GBP32.0m). This funded the seasonal increase in working capital of GBP10.2m and a project related increase of GBP15.4m, including, as previously stated, working capital in relation to the submarine rescue project for the Indian Navy. Cash conversion, the proportion of underlying operating profit converted into operating cash, excluding the project for the Indian Navy was 62% (2016: 102%). Capital
expenditure was 31% up on prior period GBP11.3m (2016: GBP8.6m) and GBP4.2m (2016: GBP7.7m) was spent on business acquisitions, inclusive of GBP1.5m of deferred consideration * Underlying earnings before in respect of a business interest, tax, that had been acquired in depreciation and amortisation 2013.
After dividends paid in the period of GBP8.8m (2016: GBP8.0m), the net cash outflow was GBP22.6m (2016: GBP11.6m) and net borrowings increased to GBP128.3m (2016: GBP105.5m). The ratio of net borrowings (which includes project related bonds and guarantees) to ebitda increased in line with management expectations, to 2.2 times (2016: 1.8 times) reflecting the working capital bonds and guarantees in relation to the Indian Navy project. Excluding this project, the ratio would be 1.8 times. Net gearing, the ratio of net debt to equity was to 49% (2016: 46%).
Balance sheet
30 30 June June 2017 2016 ------------------- GBPm GBPm ------------------- ------- -------- Intangible assets 185.6 163.8 Other assets 136.6 135.7 Working capital 112.8 75.3 Other liabilities (42.3) (38.7) ------------------- Capital employed 392.7 336.1 ------------------- ------- -------- Borrowings 128.3 105.5 Equity 264.4 230.6 ------------------- 392.7 336.1 ------------------- ------- -------- Intangible assets have increased by GBP21.8m since June 2016 due to the acquisitions of Lexmar and Hughes in the second half of 2016 and the acquisition of Rotos 360 in March 2017. Working capital was GBP37.5m higher than prior year due to the project for the Indian Navy which cumulatively is GBP13.4m and from businesses acquired in the last twelve months amounting to GBP6.9m. The balance relates to project related outflows, mainly in Specialist Technical and Marine Support reflecting the uneven cash flows of a more project led business.
Delivery of the two submarine rescue vessels for the Indian Navy is scheduled for March 2018 and December 2018 and as previously stated, a further increase of working capital in the second half of 2017 of around GBP15m-GBP18m is expected which reverses when the vessels are delivered during 2018.
Risks and uncertainties
The principal risks and uncertainties which may have the largest impact on performance in the second half of the year are the same as disclosed in the 2016 Annual Report and Accounts on pages 20-22. The principal risks set out in the 2016 Annual Report and Accounts were:
-- Strategic - energy markets, operations in emerging markets;
-- Operational - project delivery, recruitment and retention of key staff, reputational risk and cyber security;
-- Financial - foreign currency and interest rates.
The Directors consider that the principal risks and uncertainties set out in the 2016 Annual Report and Accounts have not changed and remain relevant for the second half of the financial year.
Directors' Responsibilities
We confirm to the best of our knowledge:
The interim financial report has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union.
The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the "Disclosure and Transparency Rules", being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the "Disclosure and Transparency Rules", being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party transactions described in the last annual report that could do so.
N P Henry S C Kilpatrick Chief Executive Officer Group Finance Director
29 August 2017
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2017
Six months Six months ended ended Year ended 30 June 30 June 31 December Note 2017 2016 2016 ----------- ----------- GBP000 GBP000 GBP000 Revenue 4 235,775 209,317 465,969 Cost of sales (168,064) (144,999) (324,239) ----------- ----------- ------------- Gross profit 67,711 64,318 141,730 Administrative expenses (47,379) (45,083) (94,641) Share of post tax results of joint ventures 924 647 1,414 Acquisition related income and (expense) 7 (1,009) (83) 1,456 ----------- ----------- ------------- Operating profit 4 20,247 19,799 49,959 Analysis of operating profit: Underlying operating profit 21,256 19,882 50,781 Separately disclosed items (1,009) (83) (822) ----------- ----------- ------------- Net finance expense 5 (2,640) (2,421) (5,026) ----------- ----------- ------------- Profit before taxation 17,607 17,378 44,933 Analysis of profit before tax: Underlying profit before taxation 18,616 17,461 45,755 Separately disclosed items (1,009) (83) (822) ----------- ----------- ------------- Income tax 6 (3,014) (2,567) (6,786) Profit for the period 14,593 14,811 38,147 =========== =========== ============= Attributable to: Owners of the Company 14,387 14,835 39,753 Non-controlling interests 206 (24) (1,606) 14,593 14,811 38,147 =========== =========== ============= Earnings per share pence pence pence Basic 8 28.7 29.6 79.4 Diluted 8 28.5 29.4 78.7
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the six months ended 30 June 2017
Note 2017 2016 2016 Six months Six months ended ended Year ended 30 June 30 June 31 December ----------- ----------- GBP000 GBP000 GBP000 Profit for the period 14,593 14,811 38,147 Items that will not be reclassified to the income statement Remeasurement loss on defined benefit pension schemes 10 - - (3,054) Actuarial loss in defined benefit pension schemes - (697) - Tax on items that will not be reclassified 28 (553) (124) ----------- ----------- ------------ 28 (1,250) (3,178) Items that may be reclassified subsequently to the income statement Exchange differences on foreign currency net investments (2,798) 7,158 16,771 Effective portion of changes in fair value of cash flow hedges 5,262 (2,783) (3,249) Effective portion of changes
in fair value of cash flow hedges in joint ventures (229) (213) (139) Net change in fair value of cash flow hedges transferred to income statement (282) (6) 551 Deferred tax on items that may be reclassified (742) 488 432 ----------- ----------- ------------ 1,211 4,644 14,366 Total comprehensive income for the period 15,832 18,205 49,335 =========== =========== ============ Attributable to: Owners of the Company 15,642 18,062 50,725 Non-controlling interests 190 143 (1,390) 15,832 18,205 49,335 =========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2017
2017 2016 2016 30 June 30 June 31 December ---------- ---------- Note GBP000 GBP000 GBP000 Non-current assets Goodwill 163,661 147,832 165,047 Other intangible assets 21,908 15,979 15,453 Property, plant and equipment 128,536 128,191 131,026 Investment in joint ventures 6,678 6,031 6,424 Available for sale financial assets 1,377 1,478 1,377 Deferred tax assets 1,850 3,588 2,852 324,010 303,099 322,179 ---------- ---------- ------------ Current assets Inventories 56,392 49,786 54,092 Trade and other receivables 178,674 150,029 157,384 Cash and cash equivalents 11 14,861 29,720 21,848 249,927 229,535 233,324 ---------- ---------- ------------ Current liabilities Trade and other payables (122,218) (124,582) (129,332) Current tax (8,394) (6,515) (8,426) Loans and borrowings (2,891) (10,800) (3,086) (133,503) (141,897) (140,844) ---------- ---------- ------------ Net current assets 116,424 87,638 92,480 Total assets less current liabilities 440,434 390,737 414,659 ---------- ---------- ------------ Non-current liabilities Other liabilities (10,280) (9,141) (4,962) Retirement benefit obligations 10 (25,395) (26,416) (26,770) Cumulative preference shares (100) (100) (100) Loans and borrowings (140,192) (124,345) (124,380) Deferred tax liabilities (111) (153) (111) (176,078) (160,155) (156,323) ---------- ---------- ------------ Net assets 264,356 230,582 258,336 ========== ========== ============ Equity Called up share capital 12,550 12,543 12,543 Share premium 25,690 25,573 25,573 Treasury shares (75) (610) (554) Other reserves 4,024 (6,877) 2,797 Retained earnings 221,233 197,422 216,979 ---------- ---------- ------------ Equity attributable to owners of the Company 263,422 228,051 257,338 Non-controlling interests 934 2,531 998 Total equity 264,356 230,582 258,336 ========== ========== ============
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2017
2017 2016 2016 Six months Six months Year Note ended ended ended 30 June 30 June 31 December ----------- ----------- GBP000 GBP000 GBP000 Profit before tax for the period 17,607 17,378 44,933 Adjustments to reconcile profit before tax to net cash flows Depreciation and amortisation 13,942 12,647 25,821 Acquisition costs charged 135 60 727 Profit on disposal of fixed assets (818) (61) (556) Provision for contract cessation - - 2,278 Adjustment to provision for contingent consideration - (522) (3,384) Net finance expense 2,640 2,421 5,026 Share of post tax results of joint ventures (924) (647) (1,414) Share based payments 218 577 1,144 Increase in inventories (2,550) (4,177) (54) Increase in trade and other receivables (23,556) 41 (5,675) Decrease/(increase) in trade and other payables 454 (5,962) (13,291) Defined benefit pension cash contributions less service cost (1,686) (1,691) (4,233) ----------- ----------- ------------ Cash generated from operations 5,462 20,064 51,322 Cash outflow from acquisition costs (231) - (631) Income tax payments (2,848) (3,376) (6,930) ----------- ----------- ------------ Cash flow from operating activities 2,383 16,688 43,761 Investing activities Dividends from joint venture undertakings 988 172 700 Proceeds from the disposal of property, plant and equipment 1,509 724 1,678 Proceeds from the disposal of investments - - 144 Finance income 190 87 180 Acquisition of subsidiaries, net of cash acquired (4,020) (7,689) (19,093) Acquisition of property, plant and equipment (9,706) (7,964) (13,859) Development expenditure (1,622) (1,376) (2,672) ------------ Cash flows used in investing activities (12,661) (16,046) (32,922) Financing activities Proceeds from the issue of share capital 124 49 50 Finance costs (2,403) (1,815) (4,115) Purchase of own shares by Employee Share Ownership Trust (709) (635) (556) Capital element of finance lease repayments (50) (81) (174) Proceeds from other non-current borrowings 15,868 16,460 2,363 Dividends paid (8,830) (8,026) (12,303) Dividend paid to minority interest (416) - - ----------- ----------- ------------ Cash flows from financing activities 3,584 5,952 (14,735) Net increase in cash and cash equivalents (6,694) 6,594 (3,896) Cash and cash equivalents at beginning of period 21,848 22,962 22,962 Net foreign exchange differences (293) 164 2,782 Cash and cash equivalents at end of period 11 14,861 29,720 21,848 =========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2017
Share Share Retained Other Treasury Shareholders' Non-controlling Total capital premium earnings reserves shares equity interests equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 At 1 January 2017 12,543 25,573 216,979 2,797 (554) 257,338 998 258,336 Total comprehensive income - - 14,415 1,227 - 15,642 190 15,832 Contributions by and distributions to owners: Ordinary dividends paid - - (8,830) - - (8,830) - (8,830) Dividend paid to minority interest - - - - - - (416) (416) Acquisition of minority interest (318) - - (318) 162 (156) Share based payments - - 218 - - 218 - 218 Tax effect of share based payments - - (43) - - (43) - (43) Purchase of shares by ESOT - - - - (1,094) (1,094) - (1,094) Sale of shares by ESOT - - - - 385 385 - 385 Arising on the issue of shares 7 117 - - - 124 - 124 -------- -------- --------- --------- --------- -------------- ---------------- -------- 7 117 (8,973) - (709) (9,558) (254) (9,812) Transfer - - (1,188) - 1,188 - - - --------- --------- -------------- At 30 June 2017 12,550 25,690 221,233 4,024 (75) 263,422 934 264,356 ======== ======== ========= ========= ========= ============== ================ ======== Non- Share Share Retained Other Treasury Shareholders' controlling Total capital premium earnings reserves shares equity interests equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 At 1 January 2016 12,541 25,525 192,908 (11,354) (1,613) 218,007 2,388 220,395 Total comprehensive income - - 13,585 4,477 - 18,062 143 18,205 Contributions by and distributions to owners: Ordinary dividends paid - - (8,026) - - (8,026) - (8,026) Share based payments - - 577 - - 577 - 577 Tax effect of share based payments - - 16 - - 16 - 16 Purchase of shares by ESOT - - - - (1,153) (1,153) - (1,153) Sale of shares by ESOT - - - - 518 518 - 518 Arising on the issue of shares 2 48 - - - 50 - 50 -------- -------- --------- --------- --------- -------------- ---------------- -------- 2 48 (7,433) - (635) (8,018) - (8,018) Transfer - - (1,638) - 1,638 - - - At 30 June 2016 12,543 25,573 197,422 (6,877) (610) 228,051 2,531 230,582 ======== ======== ========= ========= ========= ============== ================ ========
NOTES TO THE CONDENSED CONSOLIDATED HALF YEAR STATEMENTS
1 Basis of preparation
James Fisher and Sons plc (the Company) is a public limited company registered and domiciled in England and Wales and listed on the London Stock Exchange. The condensed consolidated half year financial statements of the Company for the six months ended 30 June 2017 comprise the Company and its subsidiaries (together referred to as the Group) and the Group's interests in jointly controlled entities.
Statement of compliance
The condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 "Interim Financial Reporting" as adopted by the European Union (EU). As required by the Disclosure and Transparency Rules of the Financial Services Authority, the condensed consolidated set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2016 with the exceptions described below. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2016.
The comparative figures for the financial year ended 31 December 2016 are not the Group's statutory accounts for that financial year. Those accounts which were prepared under IFRS as adopted by the EU (adopted IFRS), have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The consolidated financial statements of the Group for the year ended 31 December 2016 are available upon request from the Company's registered office at Fisher House, PO Box 4, Barrow-in-Furness, Cumbria LA14 1HR or at www.james-fisher.co.uk.
The half year financial information is presented in Sterling and all values are rounded to the nearest thousand pounds (GBP000) except where otherwise indicated.
The half year report was approved for issue by the Board of Directors on 29 August 2017.
Going concern
After making enquires, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the condensed consolidated financial statements.
The Group meets its day to day working capital requirements through operating cash flows with borrowings in place to fund acquisitions and capital expenditure. The Group had GBP34.0m of undrawn committed facilities at 30 June 2017 and no revolving credit facilities due for renewal within the next twelve months.
Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2016.
2 Accounting estimates and judgements
The preparation of half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2016.
3 Alternative performance measures
The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) financial measures which are not defined within IFRS. The Directors use these measures in order to assess the underlying operational performance of the Group and, as such, these measures are important and should be considered alongside the IFRS measures. The adjustments are separately disclosed and are usually items that are significant in size or non-recurring in nature. The following non-GAAP measures are referred to in the half year results.
3.1. Underlying operating profit and underlying profit before taxation
Underlying operating profit is defined as operating profit before amortisation or impairment of acquired intangible assets, acquisition expenses, adjustments to deferred consideration (together, acquisition related income and expense), the costs of a material restructuring, asset impairment or rationalisation of operations and the profit or loss relating to the sale of businesses. Amortisation of acquired intangible assets and acquisition expenses are recurring in nature where business combinations are part of a group's strategy. As acquisition expenses fluctuate with activity and to provide a better comparison to businesses that are not acquisitive, the Directors consider that both of these items should be separately disclosed to give a better understanding of operating performance. The Directors believe that the underlying operating profit is an important measure of the operational performance of the Group. Underlying profit before taxation is defined as underlying operating profit less net finance expense.
2017 2016 2016 Six months Six months ended 30 ended 30 Year ended June June 31 December GBP000 GBP000 GBP000 -------------------------- ----------- ----------- ------------- Operating profit 20,247 19,799 49,959 Separately disclosed items before taxation 1,009 83 822 ----------------------------- ----------- ----------- ------------- Underlying operating profit 21,256 19,882 50,781 Net finance expense (2,640) (2,421) (5,026) ----------------------------- ----------- ----------- ------------- Underlying profit before taxation 18,616 17,461 45,755 ----------------------------- ----------- ----------- -------------
3.2. Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total of underlying profit before tax, less income tax, but excluding the tax impact on separately disclosed items included in the calculation of underlying profit less profit attributable to non-controlling interests, divided by the weighted average number of ordinary shares in issue during the year. The Directors believe that underlying EPS provides an important measure of the underlying earnings capability of the Group. Underlying earnings per share is set out in note 8.
3.3. Capital employed and return on capital employed (ROCE)
Capital employed is defined as net assets less cash and short-term deposits and after adding back borrowings. Average capital employed is adjusted for the timing of businesses acquired and after adding back cumulative amortisation of customer relationships. Segmental ROCE is defined as the underlying operating profit, divided by average capital employed. The key performance indicator, Group post-tax ROCE, is defined as underlying operating profit, less notional tax, calculated by multiplying the effective tax rate by the underlying operating profit, divided by average capital employed.
3.4. Cash conversion
Cash conversion is defined as the ratio of operating cash flow to underlying operating profit. Operating cash flow comprises cash generated from operations adjusted for dividends from joint venture undertakings.
4 Segmental information
Management has determined that the Group has four operating segments reviewed by the Board: Marine Support, Specialist Technical, Offshore Oil and Tankships. Their principal activities are set out in the Strategic report within the consolidated financial statements of the Group for the year ended 31 December 2016.
The Board assesses the performance of the segments based on operating profit. The Board believes that such information is the most relevant in evaluating the results of certain segments relative to other entities which operate within these industries. Inter-segmental sales are made using prices determined on an arms-length basis. Sector assets exclude cash, short-term deposits and corporate assets that cannot reasonably be allocated to operating segments. Sector liabilities exclude borrowings, retirement benefit obligations and corporate liabilities that cannot reasonably be allocated to operating segments.
Six months ended 30 June 2017 Marine Specialist Offshore Tankships Corporate Total Support Technical Oil GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Segmental revenue 105,791 75,993 27,115 27,418 - 236,317 Inter-segmental sales (182) (300) (60) - - (542) Revenue 105,609 75,693 27,055 27,418 - 235,775 ========= =========== ========= ========== ========== ========== Underlying operating profit 9,060 8,496 1,080 3,860 (1,240) 21,256 Acquisition costs (12) - - - (123) (135) Amortisation of acquired intangibles (594) (132) (148) - - (874) --------- ----------- --------- ---------- ---------- ---------- Operating profit 8,454 8,364 932 3,860 (1,363) 20,247 Net finance expense (2,640) ---------- Profit before tax 17,607 Income tax (3,014) Profit for the period 14,593 ========== Assets and liabilities Segmental assets 222,589 155,808 131,209 33,173 24,480 567,259 Investment in joint ventures 3,688 2,990 - - - 6,678 --------- ----------- --------- ---------- ---------- ---------- Total assets 226,277 158,798 131,209 33,173 24,480 573,937 Segmental liabilities (61,027) (53,207) (8,176) (6,469) (180,702) (309,581) --------- 165,250 105,591 123,033 26,704 (156,222) 264,356 --------- ----------- ---------- ---------- ---------- Other segmental information Capital expenditure 3,450 3,270 729 1,975 287 9,711 Depreciation and amortisation 4,785 1,905 5,328 1,652 272 13,942 --------- ----------- --------- ---------- ---------- ---------- Six months ended 30 June 2016 Marine Specialist Offshore Tankships Corporate Total Support Technical Oil GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Segmental revenue 92,600 63,441 27,082 26,991 - 210,114 Inter-segmental sales (161) (525) (102) (9) - (797) Revenue 92,439 62,916 26,980 26,982 - 209,317 ========= =========== ========= ========== ========== ========== Underlying operating profit 9,313 6,149 2,089 3,759 (1,428) 19,882 Acquisition costs - - - - (60) (60) Adjustment to provision for contingent consideration - 522 - - - 522 Amortisation of acquired intangibles (192) (353) - - - (545) --------- ----------- --------- ---------- ---------- ---------- Operating profit 9,121 6,318 2,089 3,759 (1,488) 19,799 Net finance expense (2,421) ---------- Profit before tax 17,378 Income tax (2,567) Profit for the year 14,811 ========== Assets and liabilities Segmental assets 204,243 109,756 134,062 33,073 45,469 526,603 Investment in joint ventures 3,380 2,651 - - - 6,031 --------- ----------- --------- ---------- ---------- ---------- Total assets 207,623 112,407 134,062 33,073 45,469 532,634
Segmental liabilities (68,877) (36,308) (8,169) (6,549) (182,149) (302,052) --------- 138,746 76,099 125,893 26,524 (136,680) 230,582 ----------- ---------- ---------- ---------- Other segmental information Capital expenditure 2,687 918 2,969 1,143 95 7,812 Depreciation and amortisation 3,490 1,780 5,463 1,652 262 12,647 --------- ----------- --------- ---------- ---------- ---------- Year ended 31 December 2016 Marine Specialist Offshore Tankships Corporate Total Support Technical Oil GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Segmental revenue 203,926 152,678 55,490 55,492 - 467,586 Inter-segmental sales (354) (893) (362) (8) - (1,617) Revenue 203,572 151,785 55,128 55,484 - 465,969 ========= =========== ========= ========== ========== ========== Underlying operating profit 20,956 19,950 4,200 8,188 (2,513) 50,781 Contract cessation costs (2,278) - - - - (2,278) Acquisition costs (249) (312) (166) - - (727) Amortisation of acquired intangibles (400) (801) - - - (1,201) Adjustment to provision for contingent consideration 2,865 519 - - - 3,384 --------- ----------- --------- ---------- ---------- ---------- Operating profit 20,894 19,356 4,034 8,188 (2,513) 49,959 Net finance expense (5,026) ---------- Profit before tax 44,933 Income tax (6,786) Profit for the year 38,147 ========== Assets and liabilities Segmental assets 208,605 141,792 133,611 33,398 31,673 549,079 Investment in joint ventures 3,744 2,680 - - - 6,424 --------- ----------- --------- ---------- ---------- ---------- Total assets 212,349 144,472 133,611 33,398 31,673 555,503 Segmental liabilities (48,440) (60,335) (8,363) (7,160) (172,869) (297,167) 163,909 84,137 125,248 26,238 (141,196) 258,336 --------- ----------- --------- ---------- ---------- ---------- Other segmental information Capital expenditure 4,622 2,077 5,599 1,413 160 13,871 Depreciation and amortisation 7,437 4,002 10,978 3,166 239 25,822 --------- ----------- --------- ---------- ---------- ---------- 5 Net finance expense 2017 2016 2016 Six months Six months ended ended Year ended 30 June 30 June 31 December ----------- ----------- ------------ GBP000 GBP000 GBP000 Finance income: Interest receivable on short-term deposits 188 88 205 Finance expense: Bank loans and overdrafts (2,365) (1,901) (3,982) Preference dividend (2) (2) (3) Finance charges payable under finance leases (1) (11) (36) Net interest on pension obligations (309) (453) (993) Unwind of discount on contingent consideration (151) (142) (217) ----------- ----------- ------------ (2,828) (2,509) (5,231) Net finance expense (2,640) (2,421) (5,026) =========== =========== ============ 6 Taxation
The effective tax rate on underlying profit before income tax, based on an estimated rate for the year ending 31 December 2017, is 17.2% (30 June 2016: 15.4%, 31 December 2016: 15.4%). The effective rate on profit before income tax (after separately disclosed items) is 17.1% (30 June 2016: 14.8%, 31 December 2016: 15.1%). Of the total tax charge, GBP2.0m relates to overseas businesses (2016: GBP1.5m), and GBP1.0m relates to UK businesses (2016: GBP1.1m).
7 Separately disclosed items 2017 2016 2016 Six months Six months ended ended Year ended 30 June 30 June 31 December ----------- ----------- ------------ GBP000 GBP000 GBP000 Included in operating profit: Administrative expenses: Contract cessation costs in Angola - - (2,278) Acquisition related income and (expense): Costs incurred on acquiring businesses (135) (60) (727) Amortisation of acquired intangibles (874) (545) (1,201) Adjustment to provision for contingent consideration - 522 3,384 ----------- ----------- ------------ (1,009) (83) 1,456 ----------- ----------- ------------ Separately disclosed items before taxation (1,009) (83) (822) Tax on separately disclosed items 188 117 267 (821) 34 (555) =========== =========== ============ 8 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, after excluding ordinary shares held by the Employee Share Ownership Trust as treasury shares.
Diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The calculation of basic and diluted earnings per share is based on the following profits and numbers of shares:
Weighted average number of shares
30 June 30 June 31 December 2017 2016 2016 Number Number Number of of of shares shares shares For basic earnings per ordinary share* 50,144,671 50,066,388 50,096,089 Exercise of share options and LTIPs 401,397 332,104 387,067 For diluted earnings per ordinary share 50,546,068 50,398,492 50,483,156 =========== =========== ============
* Excludes 5,950 (June 2016: 46,619; December 2016: 45,368) shares owned by the James Fisher and Sons plc
Employee Share Ownership Trust.
To provide a better understanding of the performance of the Group, underlying earnings per share on continuing activities are presented as set out in note 3.
2017 2016 2016 Six months Six months Year ended ended ended 30 June 30 June 31 December ----------- ----------- GBP000 GBP000 GBP000 Profit attributable to owners of the Company 14,387 14,835 39,753 Separately disclosed items 1,009 83 822 Non-controlling interest in separately disclosed items - - (1,800) Tax on separately disclosed items (188) (117) (267)
Underlying profit attributable to owners of the Company 15,208 14,801 38,508 =========== =========== ============ Basic earnings per share 28.7 29.6 79.4 Diluted earnings per share 28.5 29.4 78.7 Underlying basic earnings per share 30.3 29.6 76.9 Underlying diluted earnings per share 30.1 29.4 76.3 9 Interim dividend
The interim dividend of 9.40p (2016: 8.55p) per 25p ordinary share is payable on 3 November 2017 to those shareholders on the register of the Company at the close of business on 6 October 2017. The dividend recognised in the Condensed Consolidated Statement of Changes in Equity is the final dividend for 2016 of 17.60p which was paid on 9 May 2017.
10 Retirement benefit obligations
Movements during the period in the Group's defined benefit pension schemes are set out below:
2017 2016 2016 Six months Six months ended ended Year ended 30 June 30 June 31 December ----------------- ----------- ------------ GBP000 GBP000 GBP000 Net obligation as at 1 January (26,770) (26,956) (26,956) Expense recognised in the income statement (368) (507) (1,172) Contributions paid to scheme 1,743 1,744 4,412 Remeasurement gains and losses - (697) (3,054) At period end (25,395) (26,416) (26,770) ================= =========== ============
The Group's net liabilities in respect of its pension schemes at 30 June 2017 were as follows:
2017 2016 2016 Six months Six months ended ended Year ended 30 June 30 June 31 December ----------------- ----------- ------------ GBP000 GBP000 GBP000 Shore Staff (9,435) (8,498) (10,057) Merchant Navy Officers Pension Fund (7,634) (9,163) (8,464) Merchant Navy Ratings Pension Fund (8,326) (8,755) (8,249) (25,395) (26,416) (26,770) ================= =========== ============
The principal assumptions in respect of these liabilities are disclosed in the December 2016 Annual Report. The Group has not obtained an interim valuation for the period ended 30 June 2017 as there are no material changes to the principal assumptions.
11 Reconciliation of net debt 1 January Cash Other Exchange 30 June 2017 flow non-cash movement 2017 GBP000 GBP000 GBP000 GBP000 GBP000 Cash and cash equivalents 21,848 (6,694) - (293) 14,861 Debt due after 1 year (124,380) (16,051) (311) 534 (140,208) Debt due within 1 year (2,994) 183 - 4 (2,807) ---------- --------- --------- --------- ------------ (127,374) (15,868) (311) 538 (143,015) Finance leases (192) 50 (25) (1) (168) Net debt (105,718) (22,512) (336) 244 (128,322) ========== ========= ========= ========= ============ 1 January Cash Other Exchange 30 June 2016 flow non-cash movement 2016 GBP000 GBP000 GBP000 GBP000 GBP000 Cash and cash equivalents 22,962 6,594 - 164 29,720 Debt due after 1 year (116,650) (5,724) (125) (1,873) (124,372) Debt due within 1 year - (10,736) - - (10,736) ---------- --------- --------- --------- ------------ (116,650) (16,460) (125) (1,873) (135,108) Finance leases (201) 81 - (17) (137) Net debt (93,889) (9,785) (125) (1,726) (105,525) ========== ========= ========= ========= ============ 1 January Cash Other Exchange 31 December 2016 flow non-cash movement 2016 GBP000 GBP000 GBP000 GBP000 GBP000 Cash and cash equivalents 22,962 (3,896) - 2,782 21,848 Debt due after 1 year (116,650) (4,066) (12) (3,652) (124,380) Debt due within 1 year - 1,703 (4,765) 68 (2,994) ---------- --------- --------- --------- ------------ (116,650) (2,363) (4,777) (3,584) (127,374) Finance leases (201) 174 (127) (38) (192) Net debt (93,889) (6,085) (4,904) (840) (105,718) ========== ========= ========= ========= ============ 12 Commitments and contingencies
Commitments and contingencies are as set out in the 2016 Annual Report other than for the following changes. At 30 June 2017, the Group had capital commitments of GBP8.8m (30 June 2016: GBP1.6m, 31 December 2016: GBP0.2m) and the Group had issued performance and payment guarantees to third parties with a total value of GBP44.7m (30 June 2016: GBP16.9m, 31 December 2016: GBP42.4m).
13 Related parties
There have been no significant changes in the nature of related party transactions in the period ended 30 June 2017 from that disclosed in the 2016 Annual Report.
Independent review report to James Fisher and Sons plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated cash flow statement, the condensed consolidated statement of movements in equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Mike Barradell
for and on behalf of KPMG LLP
Chartered Accountants
1 St. Peter's Square
Manchester
M2 3AE
29 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDICXDBGRC
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