Fisher (james) & Sons Share Discussion Threads

[bouleversee] 20/10/2021 16:15

Nothing to celebrate yet.

I haven't received the ADVFN morning and evening markets bulletin for some days. Have they stopped doing them. I tried to ring the number on their website but it wasn't recognised!

[bouleversee] 05/10/2021 21:17

Me, too Illis. Cheers to that. See my p.m.

[illiswilgig] 05/10/2021 19:15

Hi Boule,

good to hear from you, I hope you are well?

These are just my thoughts. I suspect that I am guilty too often of wanting companies to succeed - we'll just have to see what happens by the middle of next year. I am expecting you to remind me when it all goes wrong! Or alternatively we can celebrate, I know which I'd prefer,

cheers

[illiswilgig] 05/10/2021 19:07

Thank you Prof, for your kind words. Much appreciated.

Your points are also well made. I don't think we disagree that much. More a difference in emphasis.

The last two years have been disastrous. I blame myself for having been aware of the problem but not being ruthless enough to act.

I am bullish on the outlook for the technology they have, the products and services and the huge market opportunity.

It remains to be seen if they have the right people to execute. I am giving them the benefit of the doubt. You are not wrong to wait and see.

I first invested in Fisher 21 years ago. It was a basket case at the time of rusty bulk carriers, a defunct port or two, a couple of naval support tankers, some coastal tankers and an enthusiastic team of tech-nerds who were just about to succeed in rescuing a russian training sub with an ROV. I am always a sucker for the right tech.

For quite a while it was my largest holding. But now its sunk to my 8th largest holding despite my topups and I'll soon need a submersible ROV just to find it! It's not the first time I've waited a couple of years for it to sort itself out. But since my fist purchase at 74.9p its returned me 54% a year even at todays deflated price. Not that I am expecting 54% a year from here on - but it probably makes the wait a bit easier?

Now I am rambling. Thats more than enough from me,

good luck with your investments,

cheers

[bouleversee] 05/10/2021 12:55

Many thanks for spelling out all that, Illis. Mid-2022 isn't all that far off,so will keep my fingers crossed and hope for the best. Not having listened to the webcast, I'm now somewhat reassured.

[professor john koestler] 05/10/2021 12:49

illiswilgig

Good post, and thank you for taking time out of your morning to reflect your thoughts. Much appreciated. Of course, the crux of the issue is whether those in charge of capital can allocate it to where it is best served. Buffett did have a good understanding of the decentralised companies - after his initial mistake - and Buffett/Munger are a lifetime rarity. I can't add to or disagree with anything you have posted as I am not as familiar with this company as you seemingly are. I wasn't particularly impressed by what I saw in that presentation and I'm not convinced of how the company has set-up the new senior structure. I'm more than happy to be proved wrong though and will watch from the sidelines for now.

Good luck with your holding. :)

[illiswilgig] 05/10/2021 12:11

If you look back though the recent posts you will find more than enough of my views, including my impressions of the new management team and the division managers that presented on the last webcast. I would like to have heard from the tankships division manager as well - particularly on the future for the division as the energy transition occures - hopefully we will get to hear from her at some point in the near future.

You will also find my concern at the misallocation of capital by the previous management. With the new CFO and Chairman in position for a matter of months, and the CEO having joined in 2019 just in time to announce the write-downs on the failed acquisition and investment and manage the company through the pandemic within 6months of starting I am cautiously impressed.

The background of the CEO, and of the CFO, is in managing the successful growth of decentralised companies. I find that appropriate. Whether their lack of experience in marine energy is a problem or an advantage depends upon how they manage their senior team in my experience. The presentation gave us the first glimpse of the new structure and some of the key promoted senior managers. Very brave of them to step up I think. And very useful not to just have the usual spiel by Chair, CEO and CFO. I look forward to the next presentation as these managers grow into their new roles. I think they will, and its not by accident they were chosen to present.

Since he arrived the CEO has completely changed the management structure. I agree with the flatter and simplified structure removing a lot of the baggage from the previously acquired companies that got built into the structure and improving both effectiveness and productivity. My question would be - why did the previous management not do this? As the CEO said - This is self-help 101.

I also agree with the emphasis upon the energy transition and allocating capital to the products and services demonstrating the highest growth and ROCE - something that went wrong previously where, with the benefit of hindsight, growth seems to have been prioritised over margin.

In my view the new management is taking the right steps. They will be judged by whether it works not whether they did the right things.

If they don't start to win further contracts and work, which seems to have been in short supply in the last few months, and start paying down the debt so they can fund growth - both organic and acquired - none of their efforts will make any difference to us as shareholders.

So there is substantial execution risk. Unfortunately patience will be required. I was looking at this earlier today and I don't see a serious re-rating until mid-2022 at the earliest. I'd like to be proven wrong - but I doubt it. That might be too long a time-frame for many holders.

On the upside - the renewable market, particularly floating wind offshore the US and globally, decommissioning and marine support markets will experience high growth in the next 3-5 years and Fisher is well placed, with a little tweaking, to benefit hugely from this. But there can be no certainty that they will.

The wait to find out will likely prove to be unpleasant, first as stocks generally fall and then in a few months as stocks rise and this one gets left behind for a while.

Just my thoughts. You did ask,

cheers

PS - My impression is that Warren Buffett excelled at taking over companies in industries where he had no working experience - then promoting and encouraging existing management. I see parallels here. He used to say that Berkshire Hathaway (the original company) was his biggest failure and I don't think the mills ever made a profit under his management. Effectively he only bought them in a fit of pique, after being short changed on a deal to sell them - and is on record as saying he'd have made vastly more money if he'd just invested in insurance instead. so perhaps there is a steer for all of us there?

[roddiemac2] 05/10/2021 11:57

Prof,

"Questions around ambition and drive " Unless you know them personally , what you say is pure conjecture. with all these doubts in your mind you are doing the right thing by staying on the sidelines. There being an element of risk to every investment, it becomes a question of what level of risk you are comfortable with.

[professor john koestler] 05/10/2021 11:10

Are you willing to indulge us with some of your views, findings? After all, you are with 'friends' here - fellow investors. I'm sure there are things we find attractive about the company, that is why we are here.

[illiswilgig] 05/10/2021 11:05

Yes indeed, Asked those questions and got my answers. Whether the answers I have come to are correct remains to be seen.

Thank you.

[professor john koestler] 05/10/2021 10:36

Diverse as far as what BTG is to James Fisher? Surely they are all good enough candidates, particularly those of the largest contributor divisions. If they don't want the position then surely there are questions around ambition/drive. Perhaps their jobs are currently too comfy? Routine even. Perhaps the problems are becoming evident. Would you want to be the CFO of a company with reducing prospects? Put the other way, why wouldn't you want to be the CFO of a company with improving prospects? I'm not saying these are all facts, just questions astute investors should be asking and trying to get answers.

[roddiemac2] 04/10/2021 19:17

Prof,

" Are they saying there wasn't anyone good enough in the ranks already to be promoted ?"

That is an interesting question. The companies under the FSJ umbrella are quite diverse, and there is no obvious reason why any of the financial management of those cos. should be a candidate to be CFO of the group.

[professor john koestler] 01/10/2021 17:04

I'm not convinced by the current management. I didn't get much confidence in watching the latest presentation. The FD comes from BTG? Bizarre. Are they saying there wasn't anyone good enough in the ranks already to be promoted? That doesn't give you confidence in the financial management of the divisions does it. Also, the CEO, not from the ranks or similar industry and the Chairman is a first-timer??

I'll watch from a distance. Buffett wouldn't be too impressed, I'm sure.

[roddiemac2] 24/9/2021 21:20

Porsche ,

Both the chairman and he CFO have hardly had time to make an impression since joining in May. Your use of the word " fraud " is supported by what evidence ?

[porsche1945] 24/9/2021 08:51

Terminal decline with U.K. plc in general and dog index of the world ftse 100 in particular, now at Dec 30th 1999 levels. Dire. Why do you idiots bother with buying capital destructive crxp like this? So many good stocks on the S&P and Nasdaq that actually have a future. Trying to phone management? For what, to complain about pathetic performance….desperate….if you are doing that with a shareholding it’s time to dump it, I did say to unload this dross when it was getting to nosebleed levels ( a tenner ). The management of this company are a complete fraud.

[1aconic] 23/9/2021 11:40

It was hard to get any kind of quantity at the quoted prices. I picked up some at 766 but had to reduce order size to get it to through at that. Was being offered mid-770s if trying for over 1000... should probably just have accepted it but thought the market panic might last a bit longer and would see if I could pick up the rest even cheaper later on.

I think you're right on 6-12 months for some initial signs but could be a lot longer for the bigger effects of the new strategy to properly kick in. Quite a bit of uncertainty in the execution but Eoghan O'Lionaird appears credible and talks about all the right things.

[illiswilgig] 21/9/2021 10:56

Tried to buy some yesterday when the price was indicated as 766-772 - but failed to buy any quantity on-line.

Set a limit order to buy a few which appeared not to go through but find that I managed to snaffle 308 at 769p in the end. Happy with that.

Expecting the tide to turn once they achieve project milestones in Q4 - provided of course thart the recent slowdown in trading reverses.

The rocketing gas price should start to open the taps on the Operations and Maintenance budgets once the cash starts to pile up - in the reverse of what happened to the budgets when oil price fell below zero on lockdown. Should also stimulate spending on renewables.

On a 6-12month basis I see plenty of opportunity - now they need to execute well and pick up the work at the right price,

cheers

[roddiemac2] 15/9/2021 20:30

The chairman and CFO have only been with FSJ since the first week of May this year, so it is nice to see them buying shares along with Eoghan Lionaird. ( He is underwater with all his previous purchases .)

I have not tried to speak with Duncan Kennedy since he joined, but I found Stuart Kilpatrick always helpful, as was his predecessor. There is nothing I want to ask at this point in time.

elsa,

Sometimes it pays to roll with the punches.

[elsa7878] 14/9/2021 14:44

Horrible - happy to be out at 930. Cost me a few k but found the update downright depressing and incessed as the management couldn't even be bothered to call me back despite leaving upteen messages with the CEO's PA. I even have someone who can help with their Nigerin problem and even that didn't deserve a call back.
Forecasts now slashed for 2021 to 50 from 62 and to 66 from 82 for 2022.
15 x (a very generous multiple on recent perfromance) is 750 this year and 1000 next if, if, if...

[roddiemac2] 07/9/2021 12:06

Illis,

" The question remains how soon will the upside of increased renewable and
decommissioning orders replenish the shrunken order book. This remains just around the corner as we have come to expect " -- That is it in a nutshell.-----To my mind both these markets represent a huge opportunity. In the meantime, are they going to divest themselves of some of the less profitable businesses, or are they going to try to make them more efficient? It looks as though they have too many businesses under the FSJ umbrella . It is an unusual business model, and one that has worked well over the time they have moved into marine services, but now they need to do some weeding---?

I will hold .

[illiswilgig] 07/9/2021 08:40

I knew the results were not going to be good - but sadly they are worse than I expected. Struggling to find much positive to say.

Revenue and operating profit are below my expectations for all divisions, though only marginally at Specialist Technical and Offshore Oil.

Tankships quite a bit lower, thanks to the Q1 lockdown - they guide that volumes are now recovering to pre-pandemic levels.

The standout disaster remains Marine Support. Disappointing but not really a surprise. It's been clear for a while that this division is shrinking as low margin work is removed. The downside comes now. The question remains how soon will the upside of increased renewable and decommissioning orders replenish the shrunken order book. This remains just around the corner as we have come to expect.

With underlying eps of 12.9p they are now guiding a similar eps as last year for FY21 which was 48p - implying something around 35 to 38p for H2. Which is quite a profit downgrade for the FY. But it does appear that the damage has been done and the expectations for H2 are not that much reduced on existing expectations?

For those of us looking for the jam tomorrow, that's reassuringly just around the corner? And I will be looking closely for news flow to support that view in the next few months - though I suspect that slow order intake over the summer will mean that Q4 is the better period. As always, leaving it to the last. If not beyond.

I'm sorry for those looking for a dividend, but in this case I do think the company needs the cash and its the right decision to avoid further increases in borrowing - just to pay out a dividend which has not yet been earned in cash.

And most of all - plenty of jam tomorrow. You decide whether that's real. I still think it is, but I may well be in the minority today!

cheers

[orbit007] 07/9/2021 07:51

I sold out a position at a fair loss a month or so ago, as I started to feel that the board here now have a habit of saying recovery is just around the corner, and having read that RNS they are at it again. Hope they do turn it around for all long term holders.

[our haven] 07/9/2021 07:26

Weak results with the promise of better to come sums it up.See how the market responds, but sadly looks like it will be going south IMO.