Fisher (james) & Sons Share Discussion Threads

[illiswilgig] 03/7/2021 19:05

I have to admit that I have been questioning my rationale for continuing to invest more funds in James Fisher as the price has continued to fall. That's entirely natural, it's never easy to go against the herd. I've even considered selling a few as there are other tempting growth opportunities I am watching.

Having watched the entire CMD video - all 2hours and 8 minutes and some parts more than once - I am very comfortable with my investment in James Fisher. I came away much more informed and much more impressed than I had expected.

Not easy to summarise 2hours with presentations by 7 of the senior management in a message on a bulletin board.

If you only have half an hour spare - then watch the Q&A at the end, it will give you a good flavour of the direction of travel of the business, the new management team and the thinking from the professional investors asking the questions.

One comment stood out for me.

In the CEO's section on the refresh of the management and organisational structure he said something along the lines of - 'to those of you who say, that's the day job. Yes it is. Self-help 101. But the effect is much greater at James Fisher. Because it hasn't been done for some time.'

Ooops. Not hard to read between the lines there.

I was impressed by all of those presented. I was particularly impressed by the new CFO (ex-CFO of BTG plc) and the new head of marine contracting (who has moved from head of JFD). I should also mention the head of digital and data analysis who seems to have a group-wide role in technology and product development and with his private equity background together with the CFO will have a key role in ensuring capital allocation, both organic and M&A is very efficient in future. And not least Elizabeth Skinner, the head of Fendercare and former Head of S-T-S operations.

I noted two more quotes from the CEO which I think described the company and the opportunity very succinctly

The Oil and Gas businesses (Old Economy) are consistent profitable businesses which generate cash that will be used to fund the development of new technologies and businesses which assist with the energy transition (New Economy).

And in answer to the question - Where do you see the upside-risk in the next year?

'De-commissioning and floating windfarms.'

My conclusion. The company has the technology, market leading niche businesses and the reputation and is developing new technologies to support the energy transition from oil and gas to renewables. I think that the new management team has made the right changes and is driving the business towards increased and more consistent margins and roce as well as significant growth.

H1 results are unlikely to be stellar. It takes time for the changes to have effect and the are project milestones within JFD that are due in H2. So some patience. Yes more patience, will be needed. But to borrow a phrase I think there is 'upside risk' in this year and definitely next. I think this management team is likely to go back to Fisher's longtime policy of under-promising and over-delivering. It may come sooner, but when it does happens the shares will recover. The long term growth potential for the company remains huge.

cheers

Illis

[leedslad001] 02/7/2021 13:42

Bought in today look good med - long term hold.

[roddiemac2] 02/7/2021 07:55

Thanks illis,

I phoned the company yesterday morning to ask when the video would be available . The receptionist said she would pass the message on , and come back to me : not necessary now.

[bouleversee] 01/7/2021 21:15

If anyone has the time and appetite for that, please post a summary on here. After another day of hanging on the phone for ages to speak to various organisatiins, followed by more gardening and housework and eating far too late, this exhausted holder is off to bed.

I can't say I am impressed by current management.

[illiswilgig] 01/7/2021 20:55

CMD video now up on James Fisher Website. Also on Youtube,



warning - it's 2hrs long! So make sure you're sitting comfortably,

cheers

[spypat] 30/6/2021 10:19

I cannot find that video from yesterday's Capital Markets Event:
Here's the PDF from it:
hxxps://www.james-fisher.com/files/7916/2497/7693/210628_CMD_Consolidated_Materials_Final1.pdf

This is an article, dated 28/6/21, on Paladin's sale:
Seamec to acquire diving vessel 'Subtech Paladin' from UK-based James Fisher Marine

hxxps://www.indiainfoline.com/article/news-sector-shipping-shipyard/seamec-to-acquire-diving-vessel-subtech-paladin-from-uk-based-james-fisher-marine-121062800130_1.html

Excerpts:
Seamec stated that the remittance is likely to be made on June 28, 2021, following regulatory approvals and the whole transaction is likely to be completed on or before July 15, 2021.
Seamec has announced that the company is in the process of acquisition of a diving vessel – “Subtech Paladin” from James Fisher Marine Services Limited, London, United Kingdom, for USD 17,300,000.

[bouleversee] 29/6/2021 21:35

That was an excellent review of the company. Didn't FSJ have a capital markets day today with a summary on their website afterwards? Too tired to have a look there now but will do so in the morning. Maybe the management will have taken note and some action but the share price continues to go down. So sad in view of previous long term history.

[elsa7878] 29/6/2021 19:04

Paladin is sold apparently and completing in mid -July. $17.3 million....big loss including capex but better sold.

[spypat] 29/6/2021 18:32

You are welcome illiswilgig!
I just wish they could sell these 2 expensive and underused ships on ebay... :p

[illiswilgig] 29/6/2021 16:53

spypat - good find, thank you for that link.

Very interesting to see how someone views the company with fresh eyes. Not bad for a quick review.

cheers

[spypat] 29/6/2021 15:38

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 13:22

Looks well oversold

[elsa7878] 29/6/2021 06:45

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 15:26

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

[illiswilgig] 14/6/2021 06:12

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 18:26

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 16:30

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 09:08

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 12:05

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 12:32

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 17:27

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 14:33

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 14:00

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.