Fisher (james) & Sons Share Discussion Threads

[spypat] 29/6/2021 16:38

A bit old (just found it) but very interesting video on FSJ:
May 21, 2021
James Fisher & Sons PLC - Share Talk

[leedslad001] 29/6/2021 14:22

Looks well oversold

[elsa7878] 29/6/2021 07:45

All seems fine bar Fendercare which did well in 2020 and was in line at the end of April. What happened in May and June?

Is improved financial performance the same as in line with expectations? Used the same expression in April.

2020 48p
Forecasts were for 61p this year...

[debsdowner] 14/6/2021 16:26

Porche, you are adding nothing, mink coat and no knickers comes to mind.

[illiswilgig] 14/6/2021 07:12

debsdowner,

I share roddie's long term views. Checking back I see that my first investment (outside a pep) in Fisher was 2000 at 74p. Of course it was a very different company then. It took a few years to turn around and invest in the marine technology businesses that form the core of the company now.

Over the years I've sold the odd share on highs and bought more shares during the dips but my core holding has grown.

In the last few years the company has made some ill-timed investments and miss-allocated capital leading to high debts, falling margins and ROCE. Which goes some way to explain the current low share price. But with so many share prices being chased higher there are fewer companies around on low multiples - and I agree that the first signs of recovery could/should lead to a re-rating for this share. That's why I am keen to add a few more before it starts to rise again - but I already have a large, for me, holding so I can afford to wait.

cheers

[paulof2] 13/6/2021 19:26

This is bordering on exceptional value in my eyes now, may not set the world alight with a rapid bounce back but surely it can’t drift that much lower.

Decent update that trading is improving and think that could send it drifting in the right direction. I’ve wondered if this is a takeover target at these prices but I’m sure it would become tricky with the family stake, although with all the interest in taking over U.K. companies at the moment wouldn’t surprise me if there was an offer, even if it was swiftly rejected.

[debsdowner] 13/6/2021 17:30

illiswilgig

Maybe brokers think the same as rod that earnings are about to pick up as the world economy does. I havent followed this company for a long time but recal rod investing as low as a tenth of the current price, he has done extremely well over the long term.

Many shares have picked up steam the last year from their lows but aren't seeing growth pick up, these are markets for you, and it does well to follow investors like rod who understand the shares he is invested in.

These are strange markets at the moment part due to covid and part due to low interest rates which have boosted many shares unduly. Some think assets are overly valued worldwide and we are due a further crash later thus inversting in negative yields but despite all this many companies will still survive.

[illiswilgig] 13/6/2021 10:08

Hello Roddie, good to hear from you. I hope you are keeping well?

I view FSJ as fairly priced at around 950p - if you view the company as a moderate single digit growth business going forwards. That seems to be the current market view, which is perhaps understandable given the high debt, falling ROCE and writedowns together with teh lack of news on progress.

Broker forecasts seem a little more optimistic than the market, price target of 1300p (40% above current SP) and eps of 61p for this year FY21, earnings growth of 18%. eps of 81p, earnings growth of 33% putting it on 11.7x FY22 earnings as it recovers.

It all comes down to the growth prospects for the medium term. If you think, as I do, that the company is capable of double digit growth - then this does look cheap with relatively low risk versus reward from this price.

Unfortunately it doen't compare well with many shares where share prices are climbing higher and already pricing in future growth - that oppoertunity cost will be causing investors to sell out of shares with negative momentum. One reason why I am sitting and waiting to see how low it will go. It's going to need patience to wait this one out? As a result I may miss the bottom - I normally do.

cheers

[roddiemac2] 12/6/2021 13:05

illis,

Well done for explaining the nature of the Sir John Fisher Foundation. We discussed this some time ago. Some investors seem a little confused on the subject.

We should aim to exploit irrational weaknesses in companies we know a lot about. The current share price looks attractive, with no obvious reason for it being so low: absence of information a possibility? I have a large holding here, but am contemplating adding.

[spypat] 11/6/2021 13:32

OK, this is depressing...
Today, the gap-up from 922p to 938p on 7th Jan 2021 (when a Trading Update was released) was closed (today's low 914p).
From the 1292p high of 17th March 2021 (after the earnings release of 11/3/21), the price has been steadily sliding to today's closing of that January gap-up.
Let's see where it closes and if there is a bounce.

[elsa7878] 07/6/2021 18:27

So have I!!

2020:
Operating profit: £40 million
+ Depreciation and amortisation: £35 million
= £75 million.
Pension costs: £6.5 million
Interest and tax: £14.5 million
= £21 million
Net = £54 million.
- capex £18 million.
Ignoring all the exceptionals, dividends etc = £36 million in cashflow.
Market cap of £470 million doesn't look expensive if you lay it out as above and assume last year was the trough.
Not sure how much of D & A is depreciation as clearly you can't keep capex below depreciation for too long.

[illiswilgig] 07/6/2021 15:33

elsa7878

thank you thats very helpful.

You are quite right on the value of debt x-leases I missed the effect of the leases - IFRS16 strikes again!

Agree with you on the fund raising,

cheers

[elsa7878] 07/6/2021 15:00

It's also on about 15 x 2021 earnings which puts it about at the bottom of it's historical 15 - 22 x multiple. Never really understood the high multiple but the market is prepared to pay high multiples for some companies and this was one.

Debt ex-leases is only(!) £175 million.

If they can sell some assets / businesses and get this down to below £100 million that will provide a warchest for strategic acquisitions / capex.

My only concern is a fund raising, but I just don't believe they will if they have just restored the dividend. It would make them look ridiculous.

[illiswilgig] 07/6/2021 12:50

Hi Boule,

Sorry, not yet seen today's yo-yo. So can't comment. Been busy with my head deep in company reports.

I think the 22% stake referred to by Elsa is the Sir John Fisher Foundation, a charity established in 1979 by Sir John and Lady Maria Fisher. The charity funds charitable endeavours primarily on the Furness peninsula. I don't know if any of the Trustees have any family connection, it's not clear. Seems unlikely given today's rules on Trustee's but even if they are their activities are very much regulated by the Charities Commission (the latest report to 31st March 2020 is available on the charities commission website). The foundation does meet with the company directors twice a year, after the release of each set of results. Again likely very much constrained by the rules for both company directors and charity trustees.

If any family members are still shareholders they are well below the 3% declarable limit as the company website lists all major investors down to Mawer investment management at 2.18%

According to wikipedia the company listed in 1952 and since the 1960's the company has been managed by directors with no links to the family.

For what its worth my opinion is that the charitable foundation is a good thing. Whilst its trustees cannot directly influence the company board I am sure that the board is mindful (in todays jargon) of the dependence of local charities upon the companies dividend - likely to have something of a restraining effect upon them, possibly explains the relatively quick return to dividends and helps to prevent an opportunitistic takeover bid at a depressed share price?

I can't answer your question as to why the share price is so low, and has not recovered. It's been going down whilst others have been going up - which doubles the pain?

Lack of news flow is one possibility. As Elsa says the upcoming capital markets day could be an opportunity for that to change. If I was managing the company I'd want to have some good news to release around that time?

What they need to do to revert to a rising shareprice trend is crystal clear, and I agree with Rosemary Banyard on this - they need to reduce debt and invest in their most profitable businesses to reverse the decline in ROCE which has been apparent over the last few years?

Over many years the company has a great track record of acquiring companies and profitable growth. They have exited low growth markets and entered higher growth markets. Most recently turning around the offshore oil division. In the last couple of years they spent relatively large sums on very poor acquisitions in the marine support division (which I called out at the time). These have been completely writen down but resulted in debt ballooning from 120m to 200m in the recent results. That has to be fixed.

I don't blame the new management for this. The acquisitions were made in early 2019 and the new CEO joined in October 2019 well after poor decisions were made. And immediately announced a strategic review. Which to me is code for Oooops!

6 months later the world shut down and oil price halved. I could suggest that to come through this with such high debt without going bust or having to raise more capital and restoring a dividend so swiftly (though I would prefer that debt is paid down - as I see this as key to the shareprice rising) is to the credit of the new CEO. Long story short. It could have been much, much worse! It's also to the credit of the performance of the companies that make up James Fisher which gives me optimism for the future. The FD and the Chairman who also took part in the failed acquisitions have also just left which I believe is a good thing. The new management should now be able to reduce debt and invest with a much more objective eye?

Sadly. This can't happen overnight. But a clear and measurable plan to do so coupled with a little bit of good news could easily have the shareprice back up to 1200p.

In the meantime I am looking for a good price to buy a few more in the next couple of weeks, very tempted right now, but holding out for a little lower. As I've consistently bought this stock too quickly in the past (my purchase last year at 750p excepted). It's trading on 11.7x FY22 earnings, which pretty much tells me the market is discounting a return to growth, and the broker forecast is for 1314p shareprice which is why I think it could rebound quite swiftly when (if)good news arrives.

cheers

[bouleversee] 07/6/2021 12:02

Thanks, Elsa. Good to know thst my memory isn't even worse than I realised. Isn't there also a charitable trust that the family set up with Fisher shsres which they presumably control and will want to do well? It isn'all that longbsince a family member retired from the board, is it? He presumably still has shares.

Ilis: I think my previous post makes clesr my concerns. I don't understand why FSJ is doing so badly compared with other holdings who were badly hit by the pandemic but have recovered a lot since. I wonder what today's yo-yo was all about.

[illiswilgig] 05/6/2021 11:36

Hello boule,

Hope you are well?

You asked for it, and I am happy to oblige......

'You are wrong and just depressed.'

There. Hope that helped?

Though sadly I rather suspect it didn't.

May I enquire what leads you to be so disappointed with the new management? Would you be happy if the shareprice waa higher or is this something the new management has done or not done?

Also which remaining family shareholders? I am not aware of any.

I do share your concern with the current shareprice. Though I try to see it more as opportunity than disappointment. So far I have been very poor at calling the bottom. I am convinced that on one occasion I will be right.........I just don't know how many more times I will have to try....

cheers

[elsa7878] 04/6/2021 22:48

Capital day. End of the month. Time for them to show us the light.

[bouleversee] 04/6/2021 21:17

They seem to be more concerned with dishing out huge amounts of free shares to the directors, incentivised from present extremely low s.p.. than doing anything for investors or communicating with them in a reassuring way. Am extremely disappointed with new management. Clearly no longer a family firm. I have been extolling its virtues to friends and family for years and feel very let down. I'd love to know what remaining family shareholders think about them. Of course, it could be a deliberate ploy to manipulate the share price lower in order to get their LTIPs starting from the lowest possible figure. Tell me I'm wrong and just depressed.

[r2oo] 29/4/2021 08:45

Some nice large buy trades going through on the news this morning.

[illiswilgig] 29/4/2021 07:48

Yes, I've had that sinking feeling recently - it will be interesting to see how this 'steady as she goes' statement goes down.

Great to get some feeling for the type of new contracts being won - as there has been a dearth of RNS statements. A difference between the old management and new perhaps? But then I prefer underpromising and over-delivery.

As they are in the middle of rationalising marine support - selling or restructuring some operations - it makes sense to hold back a little and perhaps we can expect more news flow once this completes?

I sense that this year is going to be one of consolidation - FY22 could be the one to watch for?

cheers

[elsa7878] 29/4/2021 07:39

In line with the March statement. Q1 seems weak on the revenue side but I guess we were back into lockdown and the prior year they were only for the last week in March. 15% fall mirrors revenue reduction across 2020 so not weakened. Agree forward statement looks more promising.

[our haven] 29/4/2021 07:34

In line with expectations I see that the results are for Q1. However the pipeline with new contract wins looks very promising. Hopefully market will like, I do.