Fisher (james) & Sons Share Discussion Threads

[bottomfisher] 14/2/2024 17:23

It is not a good sign when a company’s biggest shareholder starts selling shares for the first time in 45 years at the lowest price in 20 years. But that is what has just happened with the Sir John Fisher Foundation selling 891,000 shares, or a 1.8% stake in James Fisher (FSJ), for well below £3.

The Sir John Fisher Foundation, whose charity work has been almost entirely dependent on the income from its Fisher shares, says that the proceeds of the share sale provides it with enough liquidity to deliver its charitable objectives for at least the next two years, and it remains a “supportive and long-term shareholder” with a 21% stake.

The share sale has been more than matched by the disclosure that Fidelity has acquired a 6.26% stake, equal to around 3.16m shares. Since Fidelity is not listed as a major shareholder in the company’s last annual report, one must assume that it has acquired the shares recently. Good news perhaps, but who was the seller of the extra 4.5% stake which enabled Fidelity to acquire its 6.26% stake?

[elsa7878] 13/2/2024 07:54

I used to be a decent sized shareholder but see no reason at all to buy these now. Thankfully I sold out when my repeated calls to the previous CEO (Eoghan) were not returned. (If you have questions and can't get answers....sell out).

They seem to stumble from one crisis in one part of the business to another. Meanwhile debt has remained stubbornly high with the only reduction coming through asset / business sales. For such a capital intensive business this is a major issue. Are there any substantial assets left to sell? Indeed laterally they were buying new tanker ships and investing in LNG capabilities. Prior to that it was decomm and bubble curtain technology. Now decomm work is suffering and I assume bubble curtain too (they kept trumpeting this even though the revenues were never of a meaningful size in relation to the size of the overall business). They need to start generating free cash and more exceptional closure costs is not going to help.
A very sad state of affairs for the Trust which did such noble work in the NW. I hope the new CEO can turn it around but by the sound of the last RNS it's going to take yet more time....

[sspurt] 12/2/2024 15:10

Big lump of stock gone through at 270p - 0.89m shares.

The issue is about the Subtech closure has not been well handled. It hasn't been flagged AFAIK and there was no narrative around costs/write offs and future savings. Markets don't like mysteries

[pugugly] 11/2/2024 21:07

Bottomfisher - Thanks for that - Could well be the reason for the weakness.

[bottomfisher] 11/2/2024 18:28

How important is James Fisher’s decision to cease operations at Subtech Europe, disclosed in last week’s full year trading update?

There is no sign of a company called Subtech Europe in the voluminous list of FSJ’s subsidiaries and associates at the back of its 2022 annual report. The name suggests that it is part of JF Subtech launched in 2021 which used to be home for the two diving support vessels which had to be sold to help repair FSJ’s heavily indebted balance sheet.

Subtech Europe generated £40m of revenue in 2023 according to last week’s statement, which is close to a fifth of the revenues of the old marine support business, now part of FSJ’s energy business – its largest division.

Could nervousness that the closure of Subtech Europe could further weaken FSJ's over-stretched balance sheet help explain the sharp fall in FSJ’s share price despite the fact that “overall underlying trading” for 2023 was in line with market expectations?

[qs99] 08/2/2024 12:58

Have bought for the bounce. Looks oversold IMO....DYOR

[hamhamham1] 08/2/2024 10:36

Topped up, target 1000p in 2 yrs.

[qs99] 08/2/2024 08:54

Debt being reduced - may take some time for value to flip into equity so I may top up on this weakness.

Management simplifying and increasing margins - be good to see more director buying as sign of confidence- let’s see

DYOR

[qs99] 26/1/2024 09:03

Moving along nicely...

[tail_risk] 10/1/2024 14:14

I "did my own research" (see below) and can get to a valuation of 700-900p. Re: balance sheet note, company has exercised options on 2 tankers this week from a Chinese shipyard suggesting again management is comfortable that it can meet key credit constraints and debt should fall over time.

[r88ave] 10/1/2024 13:24

debt value is nothing just a headache, in the long run very undervalue.

[qs99] 10/1/2024 13:05

This was £20 before COVID! Personally i think the debt pay down will continue into '24 allowing value to flip further back into the equity....DYOR

[qs99] 10/1/2024 11:15

Recovery potential here is ace IMO....have continued to add accordingly DYOR

[tail_risk] 21/12/2023 06:13

Continued from previous: continued margin improvement and positive growth trends across its major divisions (energy, renewables, defence, shipping) business should return to be strongly cash generative (£80-90m EBITDA La) - as in the past bringing debt levels down fairly quickly now Ill fated growth/ acquisitions strategy behind it and renewed focus on financial discipline going forward under new management team.

[tail_risk] 21/12/2023 06:08

The two concerns I identify are financial - the debt levels as you point out and any residual liabilities around the (already sold) nuclear business JFN which has subsequently gone into receivership. I believe they have provided £4m of provisions thus far but remains to see if this is adequate as the business is wound down. I expect management to expand on this further in upcoming results. With regard to the debt levels I believe they are manageable risk because: I) management has shown it is able to do quick disposals (aging vessels etc) if it looks at risk of breaching covenants; ii) it retains the confidence of its (6) lenders in its banking group; iii) post disposals on no performing businesses (now largely complete) and restructuring (inc already seen Margo improvement inprovement)

[spooky] 19/12/2023 14:06

tail_risk - Do you have any concerns about the level of debt?

[bottomfisher] 19/12/2023 11:26

There are plenty of reasons why FSJ should be on a recovery path. New CEO and FD, and the backing of some new shareholders, such as OIT, who have a good record in sniffing out undervalued recovery plays.

My one concern is the undisclosed scale of the nuclear liabilities which FSJ retained when it sold it the nuclear business last March.

[tail_risk] 18/12/2023 21:08

Hi - did a bit of work on FSJ going through accounts, call transcripts etc and modelling a recovery not even to previous margin and ROCE levels and believe shares are potentially worth 2-3x current depressed valuation. All 3 business units have secular growth opportunities - renewables only a small part. Had no position previously but building one.. definitely a "show me" stock but should see catalysts in upcoming results under new management and then reinstatement of dividend (2025?)

[darrin1471] 05/12/2023 14:28

James Fisher Renewables was launched in 2021 to group together a group of services FSJ already provided under a single brand to appeal to the offshore windfarm industry.
From the last annual report:
"for example within the Energy division there is an increased focus on
selling the Group’s full suite of products and services into the Renewables market with positive feedback from offshore windfarm asset operators that the Group’s offering, which spans across the development and operating life phases of wind farms, is uniquely differentiated from competitors"
also
"In particular, there is one CGU which operates in the maintenance and safety operations for offshore windfarms for which the five-year growth expectation is estimated to be 29% reflecting the high growth potential in the renewables market"

Renewables is a good growth area for FSJ but it is a small part of the overall business and unlikely to be a major factor in the share price recovery.

[r88ave] 05/12/2023 13:00

hxxps://www.james-fisher.com/our-markets/energy/renewable-energy/

Hence in last announcement they have launched James Fisher Renewables. So fairly recent

[darrin1471] 04/12/2023 17:01

r88ave. FSJ is a conglomerate of maritime businesses. I can not see any numbers specifically relating to wind farms but I would guess that it is less than 10% of FSJ revenue.
The contribution from wind farms is unlikely to be a driving force behind the FSJ share price over the short or medium term.
I hold no position, long or short in FSJ. Just watching for now.

[bouleversee] 04/12/2023 16:23

Sounds OK to me, so why is the share price down so much? Is the decommissioning business normally a major contributor to revenue and profits?

[r88ave] 04/12/2023 12:33

divisions, without Fendercare, which is added to the Tankships division to create Maritime Transport. JFD is the only component of the Defence division.

Energy


H1 2023 H1 2022 change
Revenue (GBPm) 134.0 106.1 26.3%
Underlying operating profit (GBPm) 7.5 6.2 21.0%
Underlying operating profit margin 5.6% 5.8% (20)bps
Return on capital employed 8.2% 6.3% 190bps

The Energy division provides products and services to the offshore wind and oil and gas markets. Revenue growth, at 26.3% was strong in the period, with particularly high demand being seen for well-testing, artificial lift and bubble curtain products and services. Underlying operating profit growth of 21.0% was also delivered, which included the negative impact of an onerous contract provision of GBP1.7m.

Inspection, Repair and Maintenance activities showed strong revenue growth, from GBP38.7m in H1 22 to GBP55.8m in H1 23, with the greatest increase being achieved in the European market. However, despite the notable increase in revenue, a period of inactivity for one of the seasonal chartered vessels has resulted in a GBP1.7m onerous contract provision being recognised in the H1 23 results, holding back divisional earnings.

Artificial lift product sales increased by 42% (H1 23: GBP20.3m vs H1 22: GBP14.3m), continuing the strong market trend seen in the second half of 2022. The order book remains at record levels and our new manufacturing plant in Saudi Arabia which opened during the period will add capacity and additional market capabilities in the Middle East.

Product rentals from the Scantech companies, which includes bubble curtain solutions, increased by 47.1% to GBP32.5m (H1 22: GBP22.1m). A new fleet of more energy efficient compressors was completed during the period and quickly deployed on bubble curtain projects on the East Coast of the USA, a fast-growing and very attractive opportunity for future growth.

The EDS high voltage cabling business delivered strong revenue growth over a weak comparator period (H1 23: GBP16.6m; H1 22: GBP7.9m) and achieved a small operating profit compared to an operating loss in H1 22. The market is continuing to expand at pace globally and the Group continues to believe that the combined offerings of all products and services into this market will deliver profitable growth in the future.

The Decommissioning business had a disappointing half, with a decrease in revenue of 39% vs H1 22 to GBP9.0m (H1 22: GBP14.8m). New tendering activity looks promising for 2024 and a new management team is in place. The medium-term market growth drivers for this business remain attractive.

[darrin1471] 03/12/2023 22:05

r88ave. What percentage of FSJ revenue and profits comes from off shore wind farms?

[r88ave] 03/12/2023 08:27

Given the strength of determination to push for greener energy at recent COP 28 and off shore wind farms I cam see the demand for this company expertise only to get very busy in coming years, Will start to accumulate at these silly prices for my pension pot