Fisher (james) & Sons Share Discussion Threads

[illiswilgig] 06/11/2020 08:53

Ooops,

by 'share price drifting lower' - what I actually meant of course was the share price will nose-dive by 10% to 968p.

Good to know that my hindsight is still functioning superbly.

c'est la vie and I can't blame the market - there was nothing in the trading statement to point towards recover.

cheers

[illiswilgig] 06/11/2020 08:29

I notice that the bulletin board has become as quiet as the company in recent months.

Rather than recovering the share price has been drifting down to new lows in recent days.

Which makes it likely that this mornings trading update is clearly not a surprise to some. Downbeat.

The expected recovery in trading has not materialised. Turnover is down 17%. Finger of gloom is pointed at the marine support division with delayed and postponed oil/gas and subsea contracts.

No good news. No bright spots highlighted.

To give them their due they have given clear guidance on the expected level of underlying operating profit - 35-40m (was 66m in FY19) - at the lower end thats a fall of almost 50%.

You choose whether that 50% of profits is half full or half empty?

It seems that any recovery in trading is on hold for now - so is any recovery in shareprice? There may be more bad news on the way whilst they get the marine support division sorted out - ominous statement on the review of the asset base, which makes a serious writedown in assets likely in my view??

To be clear I am not surprised (though a tad disappointed) that a recovery has not materialised, oil prices are still very low and all the major energy companies are busy slashing costs and putting new projects on hold - even renewables.

It looks like a hard slog from here until there is a recovery in its markets - priced fairly though it may continue to drift downwards to new lows in absence of positive contract news. All this will obscure the good work that they are doing in entering new markets and new products in the other divisions.

cheers

[illiswilgig] 13/10/2020 11:19

Regarding wind power, off-shore wind and floating wind turbines - yes I think the potential is enormous. On that basis I have been buying into Greencoat UK Wind and The Renewable Infrastructure Group some time (don't take that as a recommendation!) so I am talking my own book here.

The Government is onto a winner here - but as usual you probably ought to look at what they don't say rather than what they do say.

It rather looks as if the government has quietly changed horses very recently - and especially our PM who is noted for claiming that 'wind power can't pull the skin off a rice-pudding' a remarkable turn of phrase that I am informed that he repeated only last year.

Sadly we've wasted decades arguing and prevaricating whilst our UK designed nuclear generators fall apart and we try to encourage the French, Japanese and more recently Chinese to build us gigantic monolithic replacements on the cheap - except they really are not cheap. As we now know. With the cancellation of future nuclear sites happening in droves - the arrival of serious off-shore wind technology brought to us by Oersted, Vestas and Siemens - whose governments have been backing them for decades - looks to be ripping the skin off the governments cheap tins of rice-pudding just in the nick of time?

The latest arrival on the scene, literally, is the floating wind-farm Hywind, with the floating turbine platforms built in Norway and towed over to the UK by Equinor (you may remember them as Statoil - think of them as BP but without being flogged by the Norwegian government and not having financed environmental disasters in the US) who have been diligently working on it and testing the technology off the Norwegian coast for 15 years now.

Probably it would have stayed in Norway apart from two things. One is the large UK population with a desparate need for renewable energy and the second - most luckily for us - is the gigantic wind resource to the west of the British Isles, but mainly in waters too deep for off-shore turbines mounted on the sea-bed.

So it looks like the government has abruptly changes horses and will be desperately trying to claim the credit for off-shore wind development and turn a disaster into a success whilst we use the technology and expertise developed abroad - where a lot of profit will inevitable be headed.

Buying into UK Wind and similar funds is all very well - but they are just virtual operators. I've looked in vain for a way to invest in the technology in the UK. But without government support its just not here.

The silver lining - and it might be a really big one for FSJ - is that the government is coming from well behind and will be desperate to shore up the UK content in these wind-farms and the grid-connectors, moorings and maintenance can all be provided from the UK - something that Fisher has been investing in, even whilst the government has failed, and will be extremely well placed to win work as this industry - and floating wind is still pre-commercial - grows very rapidly.

There is a long way to go yet, and realistically it will be years before commissioning and maintenance work can build up significantly. Success for Fisher will go some way to assuage my huge anger at the enormous screw-up now being proclaimed as a success by those who have spent so long trying to knock-it! Bring it on!

cheers

Illis

[bouleversee] 08/10/2020 23:03

Yes, I did hear that but Boris promises a lot of things that never come to pass, wooded bridges over The Thames (while the existing ones are falling down), airports in funny places, superb test and trace systems, getting Brexit done (or not), etc. etc. and I doubt if we will see all those windmills in my lifetime. Anyway, like you, I have been too busy this week on other urgent matters to keep track of share prices but it's good to see them moving in the right direction. I see the directors were more on the ball and knew it was the right time to buy, though the FD immediately sold a big chunk of his option purchases at £521.67 netting himself a huge profit. I sometimes wonder whether share prices are manipulated to suit options.

Disappointed by such a low dividend. At the moment, I'm more interested in income than usual and can't afford to risk any more capital.

[roddiemac2] 08/10/2020 21:41

I am sure you are all aware that on Tuesday this week Boris pledged that offshore wind will will produce enough electricity to power every home in a decade. This is a sensible, if ambitious aim ( once upon a time we led the world in equally ambitious projects ) . Boris has announced £160 million of investment in ports and factories for a start." Analysts have suggested that reaching this target would require £50 billion of capital investment , and the completion of a turbine every weekday throughout the decade. " I like the idea of floating wind farms.

FSJ is already well established in this arena. The potential now is massive.

Illis, boule,

I am sorry that I have not yet commented on the interim results. I have had a lot to deal with in the last couple of months , and investment has taken a back seat. Illis,-- I note that you have covered them well, as you usually do.

boule, I don`t worry too much about the share price . Our job is to take advantage of markets when we judge them to be irrational. I added several times as the shares fell; time will tell.

[bscuit] 02/10/2020 10:57

Very "fluffy" RNS. INO should have been a "Reach".

[bouleversee] 02/10/2020 10:38

Illis -

Many thanks for reply. My questions were rhetorical really; not expecting you to tell me what to do, but thanks. I'm just curious as to why it has sunk so low. I guess I just have to sit it out and hope for improvement. I think anything to do with oil is tainted at present.

[our haven] 02/10/2020 10:25

I take your point on the lack of any numbers. It only mentions millions which could be two upwards.Hopefully we will get clarification in the update.

[illiswilgig] 02/10/2020 08:36

I agree - good news.

I particularly like the rebreather technology.

But on its own this release is not a big deal and contains no figures - let's hope its the start of a flow of more positive news,

cheers

[our haven] 02/10/2020 06:22

Good news on the 5 year contract award announcement from the Royal Navy. Future earnings boost has to help.

[illiswilgig] 29/9/2020 20:17

Boule - Yes, I can sympathise.

I am not sure that I am the right person to answer your questions.

At times like this I think we all question our decisions and wonder does the market know something that we don't?

There has been no more news since I wrote my last note - which makes it hard for me to add much.

To recap - I did write:

'For the bears there is plenty of gloom surrounding the poor performance of the marine support division, about half the company by sales - but only 25% of profits, currently enjoys a return on capital of below 5%. Some underperforming assets there that need sorting out?'

It seems to me that this division started to go off the rails a couple of years ago. The pandemic has only hastening it? It seems unfair to blame the new CEO for decisions made before he arrived?

On the other hand.

If we are to blame the management for the poor performance at Marine Support - should we not be crediting the management for the outstanding turnaround at offshore oil? With turnover, profit and ROCE all sharply up during a pandemic?

Which begs the question - can they do the same with Marine Support?

If they can - then FSJ stands a good chance of being rerated as it returns to substantial growth.

But that might not happen - and even if it does a marine services company is not exactly a red-hot tech stock? It's clear that the market won't be rerating this unless and until there is positive newsflow and the figures improve a lot.

I will be awaiting the next results with bated breathe for any sign of progress.

And in the meantime I am afraid that only you can decide whether holding on or selling is the right decision for you.

I am sorry that I can't be of more help,

cheers,

Illis

[bouleversee] 29/9/2020 09:02

I'm getting rather uncomfortable about holding it, Illis. From being one of my best performing holdings (and one of the largest) it is becoming one of the worst. Something seems to have gone wrong with the management. What are they doing to adapt their business to the new prevailing circumstances?

[illiswilgig] 28/8/2020 10:26

Well what to think?

Having read the interims I find it hard to put into words - except as I predicted, and I didn't need to be a rocket scientist to predict - good in parts.

Or, according to your half full or half empty view, bad in parts.

The current share price values Fisher fairly in view of its current business (order book) the level of debt and intangible assets on its balance sheet.

It's on around 18x forecast earnings for this year and 14x earnings for next year (21).

Whether that fully values growth prospects requires a crystal ball. Mine is currently out of service.

The interim results, comprehensive though they are, don't provide much reassurance on future growth. But to be fair, times are not normal and why provide a hostage to fortune if you can't know whats going to happen in the next 6months let alone the next year or two.

For the bears there is plenty of gloom surrounding the poor performance of the marine support division, about half the company by sales - but only 25% of profits, currently enjoys a return on capital of below 5%. Some underperforming assets there that need sorting out?

For the bulls, the specialist technical division has made good progress despite coping with a pandemic, profits down 20% still a healthy return on capital at above 13%. Tankships, the cash cow, plods onwards - and remained profitable even during may and june, which is good news in an ever declining market. roc reduced but still at 27%. The gold star goes to Offshore Oil - once the problem child - but with sales, profits and roc all up. Though with roc of 8.6% its acceptable but more to do?

It's a no brainer that sorting out Marine Suppoert is the first objective. It looks like the pandemic coupled with the negative oil price spike has accelerated an already struggling division.

To be fair the company recognises this, apparently headcount reductions have already been made, and Fisher has a long and creditable record of adjusting its business when the world changes.

The remarkable turnaround at offshore oil under the current conditions is a good example of their ability to do this well, with artificial lift pumps for end of life wells, specialist cutting for decommissioning rigs and compressor environmental support to renewable project construction all cited as growth areas.

Should they achieve anything remotely similar with marine support then the current share price does not fully value the prospects, nowehere near.

The restoration of the interim dividend is a signal that the board don't see immediate problems and you might take it as a signal of confidence in the future. I am sure that they would want you to.

I like the potential of the subsea, ROV, defence, deoommissioning and renewable markets that the company is developing. I am confortable holding this share at the moment - unlike many shares it has not staged a recovery which may prove premature. So I think that the risks are weighted towards the upside in the short term, though we will most likely have to wait for the full year results for a clearer outlook, and I remain bullish in the medium term.

cheers

Illis

[our haven] 27/8/2020 19:57

Lasata, back to were we were before the results were announced. Seems to me as if the understanding of them was that they were good results.A strange market at the moment.

[bouleversee] 26/8/2020 14:03

I'm not surprised, Roddie. Who has time to read all that lot? Certainly not me.

[roddiemac2] 26/8/2020 13:27

Porsche,

Don`t get too excited . I don`t have rose tinted glasses. I am too busy to read the detail at present.

[porsche1945] 26/8/2020 13:19

2roddie
We await with bated breath

[bouleversee] 26/8/2020 11:31

Perhaps the market doesn't like the fact that the directors IIRC were being paid bonuses when one div. had been axed and the next reduced. I gather they are being chastised for paying even a reduced div. after taking the furlough money. I don't know what pensioners are supposed to live on. A huge chunk of my retirement income has disappeared but I still have my commitments like everyone else.

[roddiemac2] 26/8/2020 07:36

I will comment on the results this evening.

[salpara111] 26/8/2020 07:15

I had taken a small Stake a few weeks back at 1150.
I have given up trying to understand market reactions to results these days.
Sometimes I think a company's results look awful and the share heads for the skies.
I thought the results were as good as could have been expected and given the share price was pretty bombed out that we would get a rise!
I am holding for now as I see little additional downside from here.

[lasata] 25/8/2020 11:43

Our Haven...agree.
Think market will like it before long

[our haven] 25/8/2020 08:15

Obviously I had different expectations to the market. The fall is not as bad as it looks as we had a very late rally last night accounting for half the fall.

[our haven] 25/8/2020 06:55

Overall I think that the market will like. We will see shortly on opening but the numbers and outlook are not unexpected, indeed better than I thought they would be

[lasata] 25/8/2020 06:39

What do people feel about today's trading statement?