Fisher (james) & Sons Share Discussion Threads

[simon gordon] 30/3/2024 11:53

Kinwah,

That's an interesting take. Cheers!

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FSJ discussed at the 25-minute mark.

FrostRow Capital on YouTube - 19/1/24:

Odyssean Investment Trust – Q4 2023 Portfolio Manager Update – Thursday, 18th January 2024

[kinwah] 28/3/2024 00:04

I would be very surprised if the situation was as bad as Kinovo. Kinovo allowed the acquiring company to spend willy nilly on contracts with Kinovo funding all the working capital requirements. FSJ provided parent company guarantees to back contracts between Magnox and JFN. I think there will be scope to argue the contracts were unfair and Magnox will end up shouldering a good proportion of any additional cost. It's not in Magnox's interest to be overly tough on its contractors as otherwise everyone will withdraw from the market. My guess is FSJ can delay any adverse impact from the JFN collapse until the other group businesses are recovering nicely.

[simon gordon] 24/3/2024 19:43

It looks like the main unknown in buying in now is the Nuclear division and what the liabilities are after it went into administration.

"In the period through to its disposal on 3 March 2023 the Nuclear Decommissioning business generated revenue of £6.7m (H1 22: £23.4m) and a loss after tax of £6.4m (H1 22: £1.6m). Subsequent to the sale of the business, on 9 August 2023, the Group was notified that JFN Limited had appointed administrators and is in the process of being liquidated. The Group is engaged with the administrators and certain key customers of JFN that held parent company guarantees with the intention of mitigating potential claims against the Group that may arise from the JFN administration. A provision of £4.0m has been included in the results for the period to 30 June 2023 in relation to potential claims/settlements under parent company guarantees."

Half Year Report - 21/9/23.


Hopefully, it's not a Kinovo-type situation. Surely, the CEO wouldn't have passed it on to a PE outfit if he thought there would be a big bill if it went wrong.

Rcapital - 2/3/23:

RCAPITAL ACQUIRE SPECIALIST NUCLEAR DECOMMISSIONING BUSINESS, JAMES FISHER NUCLEAR



Six months later JFN went bust.

If it is seriously material, surely they would have had to disclose it to the market? Been nearly eight months since they went into administration.

[simon gordon] 24/3/2024 13:11

ChampionX - 22/3/24:

ChampionX Agrees to Acquire RMSpumptools, Expanding Reach in International,

THE WOODLANDS, Texas, March 22, 2024 (GLOBE NEWSWIRE) -- ChampionX Corporation (“ChampionX” or the “Company”) (NASDAQ: CHX), a global leader in oilfield technology, announced today it plans to acquire RMSpumptools Limited, a business unit of the energy division of UK-based James Fisher and Sons plc (“JFS”). The unit designs and manufactures highly engineered mechanical and electrical solutions for complex artificial lift applications.

Under the terms of the agreement, the net purchase price is approximately £86 million (approximately $110 million at the current exchange rate) inclusive of net working capital adjustments. The integration of RMSpumptools technology will enhance ChampionX's Production and Automation Technologies portfolio, providing added value to the Company’s customers worldwide. The acquisition will further strengthen the Company’s presence and participation in a broad range of international markets including the Middle East, Latin America, and global offshore developments. The Company anticipates that RMSpumptools will achieve approximately $65 million in 2024 revenues and approximately $18 million in 2024 adjusted EBITDA.



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With Subtech Europe closed (£40m t/o) and RMS sold (£43m t/o) that will probably take annual turnover down to c.£400m.

I've done this crude calculation of what 5%, 10% and 15% operating margin produces on a 10x rating. Based on £6m in interest payments per anum.

FSJ
-T/O: £400m
-Operating profit margin: 5%
-Operating profit: £20m
-Market cap: £200m = 10x operating profit
-After interest costs = £14m pbt x 10 = £140m divided by 50.4m shares = 277p

FSJ
-T/O: £400m
-Operating profit margin: 10%
-Operating profit: £40m
-Market cap: £400m = 10x operating profit
-After interest costs = £34m pbt x 10 = £340m divided by 50.4m shares = 675p

FSJ
-T/O: £400m
-Operating profit margin: 15%
-Operating profit: £60m
-Market cap: £600m = 10x operating profit
-After interest costs = £54m pbt x 10 = £540m divided by 50.4m shares = 1071p

Maybe they can get close to a 10% operating margin in 2025. With possibly some topline growth as well. A 15% operating margin may take several years.

The alpha in 2024 is a chunky defence order. The special forces sub was in trials with the US Defence Dept in Norway and Florida, according to Mr Staveley.

JFD Special Ops website:



The near-term and well-qualified opportunities at JFD are £270m, according to Jean Vernet, Sept 2023.

Still, it looks like it could be 2025+ before it seriously re-rates.

[tail_risk] 22/3/2024 09:02

James Fisher & Sons PLC jumped in early trading after announcing the £90 million sale of RMSpumptools to ChampionX UK.This was in line with the firm's strategy to simplify its portfolio through the disposal of non-core assets, James Fisher said in a statement."While RMS is a leader in its markets, it is a product business operating in the oil and gas industry that has minimal synergies with the rest of the group," the company added.These do "not strongly align with James Fisher's strategy of focusing on maritime services to its core energy, defence and marine transport markets". After accounting for the likes of debt, Fisher's proceeds from the deal, due to be closed later this year based on shareholder approval, are set to amount to £83 million and will be used to strengthen its balance sheet."The sale of RMS marks a significant step in simplifying our portfolio to further strengthen our financial position," chief executive Jean Vernet commented. "We believe the transaction represents good value for our shareholders, reflecting RMS's strong performance in recent years."Just need patience with this stock... show me don't tell me...

[elsa7878] 22/3/2024 09:01

First time in a while that it might be investable.

[qs99] 22/3/2024 08:04

Well that is a material de-leveraging.....new broker notes will show direction of travel and EBITDA impact....DYOR

[bouleversee] 16/2/2024 17:38

Good to see the share price moving in the right direction. Hope that continues and that they start paying dividends again.

[bottomfisher] 16/2/2024 17:13

The fact that Odyssean has increased its stake in FSJ is a reassuring sign. I had feared that they might have sold out to Fidelity. Odyssean has a good record of backing turnarounds and their increased stake indicates they have not lost faith in FSJ's recovery story.

[tail_risk] 16/2/2024 13:34

They were at 4.4% in December 2023 according to FT data.

[eigthwonder] 15/2/2024 16:51

Fidelity could have been sat just under a disclosure level (3 or 5%) so number of shares required to go to the new level is less material

[tail_risk] 15/2/2024 14:28

Well if FSJ hasn't paid a dividend since 2019 and unlikely for 2024 then it's a reasonable way for the Foundation to continue to fund its commitments? Post sale of the 1.7% they still own 20.99%? To me Fidelity going quickly to 6.26% is more significant. I continue to believe the turnaround story from here under the new management but it is early days. No doubt there will be plenty of volatility along the way but Risk vs potential Upside looks compelling (more so this week!) Defence biz is a small part of earning and good they continue to shed loss making subsidiaries s happy to hold or increase position.

[otemple3] 14/2/2024 21:27

Where does it say the sale price? I can't see it in the RNS, am I missing something?

[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.