Fisher (james) & Sons Share Discussion Threads

[illiswilgig] 04/5/2022 20:41

1aconic - Good spot on the ship-to-ship transfers in the med - thank you for that.

I always thought that the downturn in the ship-to-ship xfr was doubly bad luck for FSJ on top of everything else.

cheers

[bouleversee] 04/5/2022 15:55

Long term holders who have built up large family positions over the years are not all willing or able to risk more capital in the hope of recovering some of the downturn.

[1aconic] 04/5/2022 14:54

Yes, fully agree. Elements of the last few reports did look (hopefully not just wishful thinking) like there were strong elements of spring cleaning out bad news and overhangs from previous management. Like you, I'm hopeful (but who knows) that was completed in FY21 and have personally more than tripled my original holding since October's slump. Unfortunately the earlier ones were over 500, but I still consider that a respectable price here.

This is so thinly traded that when (if?) postive news does start to flow the rise(s) could possibly (fingers crossed) be as dramatic as the falls. That theory is hopefully backed by the share price movements that started to happen in March following all the talk of governments doubling down on investment in renewables. Unfortunately the FY21 report killed off that momentum!

There are perhaps some signs of at least some potential positive news tomorrow. A phrase that really jumped out at me from FY21 was "Return to Fendercare record highs from 2020 is not expected "absent significant volatility in the oil price""... well, there's certainly been no shortage of that. Even mainstream media have commented that ship-to-ship” transfers of oil in the western Mediterranean have surged over recent months. Hopefully that's oil of all origins not just Russian, which i'd prefer FSJ to avoid being involved with. Revenues from Fendercare aren't the long term answer here but they'll be very, very helpful in smoothing the transition.

[bouleversee] 04/5/2022 14:24

I have to say that in their shoes I would not be proposing any LTIP until I had got the share price back to somewhere near previous highs and would be mortified by what the shsreholdrrs had suffered and more concerned about them than my own pockets but I suppose I must be peculiar.

[illiswilgig] 04/5/2022 13:33

Yes it's very easy to underestimate the time lag involved in restarting stalled projects or starting new ones - and I'm as guilty as anyone - with funding to be approved, bids invited, tenders summitted, contracts negotiated, work started - and all that before a penny of revenue drops through let alone profit.

As both the Chairman and FD joined in mid 2021 I strongly believe that the 2021 results were a kitchen sink job part2, following on from then new CEO's kitchen sink job part1 in 2020.

Painful at the time - but did give me the ability to accumulate shares at around 300p so must be grateful for small mercies. As you say it should remove further headwinds and perhaps even provide a small following wind in the future,

Looking forward to the ride now,

cheers

[1aconic] 04/5/2022 10:51

I'd have preferred a 3 year average so they're focused over time... It is implicit that results have to turn around but we all know that management has some latitude in when to recognise certain elements. I do strongly wonder whether certain elements of last year's results (e.g. the big balance sheet write downs) weren't a case of getting all the bad news out of the way in order to give a better spin on future performance. Let's face it, ROCE targets are far easier to meet if you've written your capital base down significantly!

Anyhow, fingers crossed for a change of tone now, starting with the pre-agm trading update tomorrow. The recent oil price volatility should have created good opportunities for Fendercare. Probably a bit early for the new big push to renewables to have filtered through yet.

[illiswilgig] 03/5/2022 12:33

1aconic,

I agree that the award is on the 2024 figures.

Could have been worded with more clarity I suppose. The performance in the meantime is implicit - and a windfall clause is mentioned to prevent a result in 2024 meeting the conditions but not through managements efforts.

cheers

[1aconic] 03/5/2022 10:31

Taking another look at the RNS, I'm now leaning towards having being wrong in my previous interpretation. I thought that "based on the Company's earnings per share (EPS) performance over three financial years commencing with the financial year in which the Award is granted" might imply a three year average. But on reflection I think that "None of this element shall vest if the Company's EPS for the 2024 financial year is less than 66p" is pretty clearly focussed on 2024 alone rather than an average of three years. I now don't think "performance over three financial years" is actually going to be taken into account at all other than in terms of building a platform for the all-or-nothing results in 2024.

[1aconic] 27/4/2022 10:51

Illis, I was the same... Wouldn't normally pay much attention but as I glanced over it, the criteria jumped out and I took a much closer look.

One extra thing which I thought relevant was that (although the wording was a little confused so I'm hoping I read it correctly) it's not just FY24 that needs to hit 66p but based on the average over the next three. Very hard to see that being hit this year so if they hit let's say 32, 66 and 100 in order to meet the 66 minimum average for the award to vest then on a pe of 12 it would maybe look like a 1200p-1500p share price in 2024 between any options vesting and all of them vesting.

I'm in a similar situation to you, but have also been adding whenever I've been able to over recent months.

[r2oo] 26/4/2022 23:08

Good post and insight.

[illiswilgig] 26/4/2022 10:58

FSJ RNS yeeterday on 300k new share options for execs to vest in 2025 based upon 2024 performance - 2 years from now.

I don't normally pay much attention to the detail of share award criteria regarding them as a salary topup system with the thresholds generally set far too low - but in this case it is very clear on the criteria and makes useful reading for an insight into the boards current assessment of future eps.

The criteria cover eps 50% of award, total shareholder return 30% and ROCE 20%.

Below 66p eps zero shares vest. From 66p to 76p a sliding scale from 25% to 100% vest.

Similarly for TSR cf FTSE250. Below FTSE250 median zero vest. From median to upper quartile 25% to 100%

and for ROCE below 11% zero vest. 25% - 100% from 11% to 13%

If the current challenging environment extends - then 66p eps is an ok result and 76p is a modest improvement. I'm ok with that.

At a multiple of 12x (well below fishers historic multiple of 20x) that corresponds to a shareprice of 792p to 912p in two years time. Over 2x return on current share price

As it happens I expect more - because I expect the environment for renewables, nuclear, defence, decommissioning and even O&G to improve. My share price target for 2024 is 1200p

These criteria seem well set, the award is modest abd most of all its very clear. Best of all it gives some insight to board thinking right now - that 66p eps and 11% roce is their base case. Below that management get null points!

Its hard to find funds right now - as I live off my investments - but when funds allow I will continue to add below 380p as I rarely see profitable companies with good products in growing markets at such low valuations. Seems mispriced to me,

cheers all,

[kinwah] 29/3/2022 12:27

I've played this stock in the past when it was a highly-rated growth stock which only ever seemed to go up. I think some fund managers are still stuck with it in their portfolios from those days and are taking opportunities to exit whenever there is some volume. There are undoubtedly some good businesses in the FSJ portfolio and I can see corporate interest in acquiring them. It's probably too early but I've started tucking a few away for an eventual recovery/break-up. £3.60 seems a bargain compared to the £15 or so at which I exited last time.

[porsche1945] 28/3/2022 10:20

Buy US mega cap while its on offer. Both Goog and Amzn have announced share splits, that will 25pc on the shares over 12 months anyway. Nvidia at under 200, Roblox Affirm Enphase, screaming buys. Why do people keep flogging a dead horse with UK shares? Even UK oil companies trade at a 30 pc discount to European and US rivals. The gap has never closed since brexit, plus sterling in terminal decline which puts off foreign buyers. Its capital destructive scary, uk now a high tax low growth region circling the U bend. The BOE and wheezing fat bunter are worse than hopeless and most of the uk’s sanctions against russia will end up damaging the uk, alot.

[illiswilgig] 14/3/2022 13:53

Hello Boule,

good to hear from you. Optimistic. Hah! Right now that feels a little way off.

Sorry you've been depressed, but then its hard not to be. I have. Hard to be making money in the UK markets over the last few months. Very few will have. I hear a lot of pain and anguish. Emotionally stressing if you live off your investment as I do.

I try not to anchor my expectations to previous prices and losses. That was then and today is different.

I think it was Warren buffett (or someone similar) who said - the stock that lost you money is unlikely to be the one that makes it back for you.

The question I ask myself is always - is the share a good buy now. Would I buy it if I didn't already own it?

For the me the answer is yes. You have to make your own mind up. I have been buying recently from 290p but stopped at 390p as the price ramped up. It's on my buy list at the moment. But so are a lot of other shares! Spoilt for choice. And no funds spare.

I think this is the turning point for Fisher. For the business not necessarily for the share price. Though if the H1's don't meet my expectations I may have to change my stance.

I think the opportunity is huge and they have managed to keep the businesses intact.

At the moment my longer term forecasts are for 1200 - 1400p in 2-3 years. Maybe a little longer if the global situation doesn't improve. That's a long way from today and much lower than the 2000p+ it was some years ago - but its still 3 or 4 times the current price.

Right I'm off to check down the back of the sofa and see if I can find a few more quid to buy some shares,

I may well prove to have been a bit too previous - it wouldn't be the first time - so Don't forget to Do Your Own Research and Good Luck All,

cheers

Illis

[bouleversee] 14/3/2022 12:52

Oh, Illis, what a lovely optimistic temperament you have. I had been feeling very depressed (not just about this) and your rational resume of the state of play at FSJ has lifted my spirits. Let's hope your predictions are correct. Money is not the most important thing but it has been very saddening to see what was a great and profitable company decline in this way so I am hanging on in the hope that FSJ's reputation will be restored and my one time large gains will gradually be clawed back. Renewables are even more essential now and thanks to Mr. P. I think there is justification for regenerating North Sea activity so hopefully there will be more opportunity for FSJ to pick up work. You have provided some cheer; let's hope the good luck follows!

[illiswilgig] 14/3/2022 11:48

Well that was a wild ride. Well done to anyone who sold some at close to the £5 - seems to have been a classic case of buy the rumour and sell the news.

Perversely I am quite reassured by the results. Given the context.

Only 3 months ago the share price was below £3, the risk of a placing seemed high - and the statement that they would remain within the covenants always seems to promote the risk of the reverse.

The underlying results were as expected. Revenue and operating profit were in line with my (reduced) expectations and the net debt/ebitda as well so the headroom on the covenants was also as expected. Which under the circumstances - is a lot better than people were expecting just a few months ago. Not great - but I do find it reassuring when figures are consistent. It's a start.

Cash generation was good under the circumstances (delivery and milestones on 4 large projects delayed over the year together with new contract signings). £58m which allowed them to pay down some debt, invest £20m in their growing businesses and reduce net debt by £25m due to the growing cash figure. NB - net debt including leases reduced by only £12m - due to new leases signed on tankers which obscures the progress.

The exceptional write-offs were much larger than I expected. But again the context is important - the CFO, Chairman and 2 new NED's joined in the second half of the year - a fresh set of eyes is good, and I'd be surprised if a new CFO and Chairman were not intending to reset expecations to a level they can meet and likely exceed. As these are mostly non-cash (though the £3.1m litigation charge was a nasty surprise and I'd like to see more detail upon this - and any future expectations) then the written down asset values should help reduce future write-downs and provide a tail-wind of profits in the event of asset sales.

I expect the 4 project milestones to increase cash generation in 2022 as working capital is unwound and accelerate the paying down of debt - which has to be the top priority alongside increasing ebitda and operating profits. I think this much reduces the risk of a placing to raise fresh capital. It would make sense, but the large shareholders, particularly the Sir John Fisher Foundation which is not in a position to participate,are unlikely to support the dilution unless absolutely necessary. And from these figures results its not. I'd prefer they pay the debt right down before returning to paying a dividend, to maximise investment in the business and future growth, but again I expect the large shareholders will be influential in a return to dividends as soon as possible. I'd not be upset provided it doesn't materially affect reducing debt and investment.

I keep an eye on the web-site and monitor the number of vacancies and press releases. Job vacancies have increased recently, either because everyone is leaving or because they are taking on new staff, you choose, and are now running at around twice the recent lows. They've also just chartered am 80m support vessel for their North Sea work this season - which may indicate significant increase in renewable work this season.

It's been a difficult time for Fisher shareholders. I previously stated I expected the share pice recovery to start this spring. I think these results support that but the share price got ahead of itself at 520p last week. It will take a while to get over that - and I imagine that brokers who were caught out are scrambling to reduce their forecasts which won't help. I expect steady progress in the next few months and am looking forward to the H1 trading update.

Cheers and good luck all,

[wunderbar] 10/3/2022 13:21

I decided to exit FSJ today. Reason was very simple. Results were awful, full of write-downs, bad debts, bad acquisitions, litigation costs, underperformance, underestimation of headwinds, not to mention lack of forward guidance. In short, these results were tantamount to a profit warning. Underlying operating profit was £28m. However, Loss before tax was £29m. Notably, Fisher incurred an impairment charge of £29.2m against the company’s marine support and offshore oil divisions. I wasn’t expecting an overall loss and clearly neither was the market hence share price down 23%, -113p @ 386p. What a shocker.

I had high hopes for this stock and it was my intention to hold for at least a year but after reading full year report I just couldn’t find any positives or reason to hold (as hard as I tried). In fact I thought overall tone of the report was very gloomy/negative. As such I decided to bail out.

In my short time as a shareholder it’s been one hell of a volatile ride having initially bought in November @ 370p, Dec @ 308p and Jan @ 405p. I actually sold 30% of my holding on Monday @ 480p as the inexplicable steep rise seemed too good to pass up (with hindsight wish I’d sold the lot). Unbelievably the share price topped out at 527p only yesterday morning! Today I sold the rest of my holding @ 386p. Very galling having a large chunk of my profit wiped out so quickly but given the dire results and magnitude of today’s fall I consider myself very lucky to have come out of this with any profit whatsoever.

I’d now class FSJ as a boom or bust stock. In months/years to come I'll either look back on this share with deep regret for selling out near historic lows or I’ll be breathing a huge sigh of relief should things deteriorate further. As always, time will tell.

My hunch is FSJ at some point will tap shareholders for cash via a rights issue. I certainly don’t see any dividends being paid out in the foreseeable future. Best outcome for shareholders in short/medium term might well be a takeover noting the company is currently valued at only £194m with net debt of £186m. I think the next 12-24 months are going to be critical in determining FSJ’s future.

Peel Hunt have subsequently reduced their financial year 2022 adjusted EPS forecast by 12 per cent to 32.8p, and cut its financial year 2023 projection down by a quarter to £34m. And that seems to be the problem for Fisher, a worrying trend of downward revisions, reduced profits, and a market valuation eroding at an alarming rate.

[bouleversee] 10/3/2022 13:06

Would love to know what Phillis had to say.

[phillis] 10/3/2022 07:48

Good strategic progress”

That should make everyone happy

[our haven] 10/3/2022 07:27

The full year results make for grim reading. Could be a challenging day. Revenue and profit down. Can only hope that the market sees a different outlook.

[greenhat2] 08/3/2022 22:09

sectors: DefenceNuclear Marine Oil and Gas Renewable Energy Mmmmn?

[hamhamham1] 11/2/2022 19:24

It's about change of sentiment, the share price is this low not because of performance but sentiment. If it was performance, it would be 800-1000p. So without sounding rude, sentiment is very important.

[bouleversee] 11/2/2022 19:16

Yes, you rude man, being a long term holder, not a trader. So far on paper only but don't expect me to get excited by that target.