Have bought for the bounce. Looks oversold IMO....DYOR |
Topped up, target 1000p in 2 yrs. |
Debt being reduced - may take some time for value to flip into equity so I may top up on this weakness.
Management simplifying and increasing margins - be good to see more director buying as sign of confidence- let’s see
DYOR |
Moving along nicely... |
I "did my own research" (see below) and can get to a valuation of 700-900p. Re: balance sheet note, company has exercised options on 2 tankers this week from a Chinese shipyard suggesting again management is comfortable that it can meet key credit constraints and debt should fall over time. |
debt value is nothing just a headache, in the long run very undervalue. |
This was £20 before COVID! Personally i think the debt pay down will continue into '24 allowing value to flip further back into the equity....DYOR |
Recovery potential here is ace IMO....have continued to add accordingly DYOR |
Continued from previous: continued margin improvement and positive growth trends across its major divisions (energy, renewables, defence, shipping) business should return to be strongly cash generative (£80-90m EBITDA La) - as in the past bringing debt levels down fairly quickly now Ill fated growth/ acquisitions strategy behind it and renewed focus on financial discipline going forward under new management team. |
The two concerns I identify are financial - the debt levels as you point out and any residual liabilities around the (already sold) nuclear business JFN which has subsequently gone into receivership. I believe they have provided £4m of provisions thus far but remains to see if this is adequate as the business is wound down. I expect management to expand on this further in upcoming results. With regard to the debt levels I believe they are manageable risk because: I) management has shown it is able to do quick disposals (aging vessels etc) if it looks at risk of breaching covenants; ii) it retains the confidence of its (6) lenders in its banking group; iii) post disposals on no performing businesses (now largely complete) and restructuring (inc already seen Margo improvement inprovement) |
tail_risk - Do you have any concerns about the level of debt? |
There are plenty of reasons why FSJ should be on a recovery path. New CEO and FD, and the backing of some new shareholders, such as OIT, who have a good record in sniffing out undervalued recovery plays.
My one concern is the undisclosed scale of the nuclear liabilities which FSJ retained when it sold it the nuclear business last March. |
Hi - did a bit of work on FSJ going through accounts, call transcripts etc and modelling a recovery not even to previous margin and ROCE levels and believe shares are potentially worth 2-3x current depressed valuation. All 3 business units have secular growth opportunities - renewables only a small part. Had no position previously but building one.. definitely a "show me" stock but should see catalysts in upcoming results under new management and then reinstatement of dividend (2025?) |
James Fisher Renewables was launched in 2021 to group together a group of services FSJ already provided under a single brand to appeal to the offshore windfarm industry.
From the last annual report:
"for example within the Energy division there is an increased focus on
selling the Group’s full suite of products and services into the Renewables market with positive feedback from offshore windfarm asset operators that the Group’s offering, which spans across the development and operating life phases of wind farms, is uniquely differentiated from competitors"
also
"In particular, there is one CGU which operates in the maintenance and safety operations for offshore windfarms for which the five-year growth expectation is estimated to be 29% reflecting the high growth potential in the renewables market"
Renewables is a good growth area for FSJ but it is a small part of the overall business and unlikely to be a major factor in the share price recovery. |
hxxps://www.james-fisher.com/our-markets/energy/renewable-energy/
Hence in last announcement they have launched James Fisher Renewables. So fairly recent |
r88ave. FSJ is a conglomerate of maritime businesses. I can not see any numbers specifically relating to wind farms but I would guess that it is less than 10% of FSJ revenue.
The contribution from wind farms is unlikely to be a driving force behind the FSJ share price over the short or medium term.
I hold no position, long or short in FSJ. Just watching for now. |
Sounds OK to me, so why is the share price down so much? Is the decommissioning business normally a major contributor to revenue and profits? |
 divisions, without Fendercare, which is added to the Tankships division to create Maritime Transport. JFD is the only component of the Defence division.
Energy
H1 2023 H1 2022 change
Revenue (GBPm) 134.0 106.1 26.3%
Underlying operating profit (GBPm) 7.5 6.2 21.0%
Underlying operating profit margin 5.6% 5.8% (20)bps
Return on capital employed 8.2% 6.3% 190bps
The Energy division provides products and services to the offshore wind and oil and gas markets. Revenue growth, at 26.3% was strong in the period, with particularly high demand being seen for well-testing, artificial lift and bubble curtain products and services. Underlying operating profit growth of 21.0% was also delivered, which included the negative impact of an onerous contract provision of GBP1.7m.
Inspection, Repair and Maintenance activities showed strong revenue growth, from GBP38.7m in H1 22 to GBP55.8m in H1 23, with the greatest increase being achieved in the European market. However, despite the notable increase in revenue, a period of inactivity for one of the seasonal chartered vessels has resulted in a GBP1.7m onerous contract provision being recognised in the H1 23 results, holding back divisional earnings.
Artificial lift product sales increased by 42% (H1 23: GBP20.3m vs H1 22: GBP14.3m), continuing the strong market trend seen in the second half of 2022. The order book remains at record levels and our new manufacturing plant in Saudi Arabia which opened during the period will add capacity and additional market capabilities in the Middle East.
Product rentals from the Scantech companies, which includes bubble curtain solutions, increased by 47.1% to GBP32.5m (H1 22: GBP22.1m). A new fleet of more energy efficient compressors was completed during the period and quickly deployed on bubble curtain projects on the East Coast of the USA, a fast-growing and very attractive opportunity for future growth.
The EDS high voltage cabling business delivered strong revenue growth over a weak comparator period (H1 23: GBP16.6m; H1 22: GBP7.9m) and achieved a small operating profit compared to an operating loss in H1 22. The market is continuing to expand at pace globally and the Group continues to believe that the combined offerings of all products and services into this market will deliver profitable growth in the future.
The Decommissioning business had a disappointing half, with a decrease in revenue of 39% vs H1 22 to GBP9.0m (H1 22: GBP14.8m). New tendering activity looks promising for 2024 and a new management team is in place. The medium-term market growth drivers for this business remain attractive. |
r88ave. What percentage of FSJ revenue and profits comes from off shore wind farms? |
Given the strength of determination to push for greener energy at recent COP 28 and off shore wind farms I cam see the demand for this company expertise only to get very busy in coming years, Will start to accumulate at these silly prices for my pension pot |
I like to look of wind turbine in energy sector on last interim, can see this explode in coming years the company expertise in this. Reckon the chairman should seek more marketing PR power to get more work in this sector. |
GET READY FOR LIFT OFF IMO !!!! |
Back in 2019, revenue was £617m and £47m pbt, the share price was 20 quid (note - currently its 3 quid), look at this years forecast for revenue and pbt, is it soo far for 2019???
And look at the debt, looks less to me, long term and short term totals = 2019 £218m vs now £188m ;) |
Hope you don't have too long a sleep, Ham Ham.
The youtube video was quite encouraging about FSJ's recovery prospects. |
Up we go, wake me up when it hits 20 quid again ;)
Look at the chart for the 10 year leading upto covid outbreak (2010 to Jan/Feb 2020) |
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