Fisher (james) & Sons Share Discussion Threads

[onceatrader] 27/2/2020 16:28

James Fisher's Middle-East impairment

[roddiemac2] 27/2/2020 16:10

illis,

True to form, you have covered the results extremely well.

"The cyber event turns out to have been something of a nonevent - at least from the perspective of anything being stolen. But the response to the event has delayed ability to invoice and bring in funds in Q4". ---I spoke briefly about this with the company secretary ( all other directors being busy )---He said that they had caught up with the problem, and that the effect either way would be marginal ( the difference between delayed receivables and payments due by FSJ ).

I think there is still a lot of potential here.

[illiswilgig] 27/2/2020 10:39

Roddie,

just seen your post, I was busy reading and writing for a while. Very good idea to bed and ISA at this price. I still have another set of results to go through this morning.

SFR and MGNS have both been on my radar - but I never quite bought. Thank you for mentioning them. I like the look of SFR now and I like the long term business of MGNS.

I don't have much to offer in return, two of my favourite shares, Haynes(HYNS) and Science Systems(SSY) have recently been bought out for cash. so I am rather short of ideas, I am looking for technology and/or software companies in growth areas to replace them. I quite like Elecosoft (ELCO) and Vianet (VNET) but they are not cheap and together with the rest of my tinpots will either turn out to be inspired or dogs. Not for widows or orphans as they say. Talking of tinpots I rather like MSI, for its eclectic mix of Naval Cannon, Fork lift forgings and petrol station superstructures. As above it may turn out to be inspired or a dog.

cheers

[illiswilgig] 27/2/2020 09:25

Ha ha, spoke too soon and I see that the bounce to 1850 has been reversed swiftly in the face of the market freefall - now getting ready to buy again below 1800,

deep joy

cheers

[illiswilgig] 27/2/2020 09:16

Well the results are out.

The headline figures are not all delightful.

Revenue +10%
Operating Profit - 10%
Statutory eps - 18%
Dividend + 10%

The company also presents underlying figures for profit as usual

underlying operating profit +7%
underlying eps +4%

which they state is a better guide to the performance of the businesses.

So whats going on?

According to the trading update in November

'Whilst modestly below the Board's expectations, profit before tax for the full year is expected to be ahead of last year (2018: £56.1m)'

Which it isn't at £47.8m.

Reading more deeply I see it as a tale of acquisitions, capital investment, a cyber event and a new CEO.

During the year they bought 3 businesses for £14.4 million and invested £90m in two new saturated dive support ships and a 35kT tanker on a 5 year contract to the Royal Navy.

So far so good, except that the tanker only contributed to 1/2 the year and the two dive support ships effectively come on line at the beginning of the current year.

The cyber event turns out to have been something of a nonevent - at least from the perspective of anything being stolen. But the response to the event has delayed ability to invoice and bring in funds in Q4.

It turns out that they did buy 60% of another business in the middle east. I must admit to having misgivings at the time, but judged the price paid to just about affordable in the event that it turned out to be a big mistake. It turns out virtually all the missing £10m in profits is due to writing down the cost of this adventure to zero and presumably the legal costs of sorting it out as well.

As there was no indication of this in the november trading statement I rather suspect the new CEO is behind the move to dump this operation immediately. Whilst admittedly this does have the effect of a kitchen sink exercise and making future gains rosier - I do rather approve of the no nonsense approach, not dragging out the affair and removing a distraction.

It may turn out that they regain some of the money paid - they may not - whatever, thats a side issue and a bonus.

The real story is that the £100m capital investment should kick in now and together with some held over invoices provide a good start to the current year - all other things being equal, which they never are, could point towards an upbeat trading statement and a good set of interims?

Looking briefly at the divisional performance

Marine Support appears to have been the big disappointment with revenue slightly up and profit, margin and return on capital all down.

The return on capital is useful as it gives a guide to the expected contribution from the 56M spent on the two new saturated dive ships (and saturated diving is a whole different ball game from jumping in off a rib - the capital employed makes it a very select market) they should be able to return around 20% ie operating profit of around 11m annually. Things can always go wrong of course!

Specialist Technical - was also down, but here all measures are slightly down and reading between the lines this looks like a prior year comparison with standout figures on the delivery of two submarine rescue systems and perhaps the long term falloff delay in nuclear demcomissioning - which in the UK has been something of a mismanaged nightmare over recent years.

Offshore Oil - after several years of underperformance this looks to have hit the groove again with equipment and personnel utilisation well up and the particular busines of RMSpumptools very much in demand. Some signs of working outside traditional markets geoghraphically and also in providing equipment to offshore wind projects.

Tankships - up again. And what a gem. Return on Capital employed 40%. Condering the new tanker cost £8.8m that's an interesting figure.

Conclusion - not what I'd hoped for on the surface, but raising the covers and looking underneath it appears to be working better than I'd hoped. I'm relieved.

I'm never happy with jam tomorrow - I prefer lots of it, right now, but patient investment in this share has paid off over many years for me and they appear to be making all the right investments, and even learning quickly from their mistakes, for this to continue.

So I am happy to continue buying - especially at the low 1800's but I see that in the time its taken me to type this up, I've missed my chance this morning. No matter I already have plenty and can afford to wait. Either to buy more in the short term or for a positive trading statement in a few months,

cheers

[roddiemac2] 27/2/2020 08:39

illis,

I did a bed and ISA deal on 800 shares this morning . This uses up most of my capital gains allowance,and adds to FSJ in my ISA at what I consider to be a good price.

I will comment on the results later.

[roddiemac2] 26/2/2020 10:14

Hello illis,

Yes, it seems as though the Chinese problem is causing panic.If markets fall a lot, the good companies will fall with the bad. Markets being arguably overpriced, it was not going to take much to push them down. I also have a list of companies to buy or top up if prices become attractive. I like MGNS and SFR. I have a holding in the latter, but MGNS got away from me this year.

[illiswilgig] 26/2/2020 09:45

Hi Roddie,

looks like I pushed the buy button a bit early? But I didn't want to miss the party?


Still can't see a particular reason for FSJ to be badly affected. Be happy to be corrected on this? Seems less reliant upon China than most. But the shareprice is always quite volatile.

I think the coronavirus panic might be pushing the market into a full blown fear of recession in which cae a correction is more likely.

In my view that enhances the likelihood of indiscriminate downratings.

Might take a few weeks for things to become much clearer, There are a few holdings that I plan to topup in tranches as the market falls - and FSJ is one.

As Warren Buffet said, be Fearful when others are greedy - and greedy when others are fearful!

cheers

[roddiemac2] 25/2/2020 20:44

illis,

I agree with your comment on the coronavirus.

FSJ is still my largest holding.

[illiswilgig] 25/2/2020 13:19

Yes indeed. Couldn't resist it, been helping myself to a few more at mid 1800's.

To be fair it was last at this price in Nov19, and before that in Oct19 and before that in Jun19. I see from the headlines that the FTSE100 is revisiting levels of last October so it seems about right - but why FSJ would be thought to be exposed to coronavirus I don't know?

FSJ remains my no1 holding.

cheers

[bouleversee] 25/2/2020 12:44

Rather a nasty drop today.

[roddiemac2] 25/2/2020 12:24

Results will be on Thursday.

[bouleversee] 10/1/2020 23:03

Thanks, Roddie and the same to you.

I wonder if the new ceo is going to be any good. I had a pretty good yesr last year despite a few horrors.

[roddiemac2] 10/1/2020 22:29

A happy and prosperous new year to all holders here.

[roddiemac2] 10/1/2020 09:55

bouleversee,

I respectfully suggest that you don`t worry about price monitoring extensions. You could google "stock market price monitoring extensions ". They are not detrimental to your investment here. They are part of the " mechanics " of the market .

I can see no reason why recent events should affect the company`s performance .

I note that the new CEO has bought 6,463 shares.

[bouleversee] 09/1/2020 14:48

Can anyone explain the significance of the price monitoring extensions today? I think most things are down a bit today but FSJ seems to be taking a long time to recover its previous high last August. How are recent events likely to affect it in the longer term?

[gilesy] 23/12/2019 09:51

this looks like a great long term investment
bought in today at 2044

[illiswilgig] 07/11/2019 14:27

Ooops - got my first sentance tangled -

should have said that it's unlikely that the business impact is greater - rather than less - than the drop in share price

typical!

cheers

[illiswilgig] 07/11/2019 14:23

I think its unlikely - but certainly not impossible - that the business impact is less than the drop in shareprice and insignificant in the long term.

To be pedantic - and I apologise - the notice does not say that the financial systems have been hacked.

The notice tells us that access to the communication and financial systems has been restricted as a result of taking the impacted systems offline as a precaution.

That covers a very wide range of scenarios. The worst case scenarios are not the most likely - IMHO
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Thus the odds are that the shareprice fall is overdone - accordingly I've added 350 or so more shares to my already large no1 shareholding with the intent of selling them in the short term. Trading is not my natural environment so I've been timid in my buy.

if the price falls further on no news then I will buy more. Though right at the moment it is rising again,

cheers

[roddiemac2] 07/11/2019 09:59

Hello bouleversee,

It does not take much to drop a share price in these times. Since we have no quantifiable information on which to make a judgement , I will sit tight. This is a very unusual situation.

[bouleversee] 06/11/2019 09:44

Possibly because I hold some of my FSJ shares in certificated form, I had an email from them. I don't really understand the implications. Why should it cause such a drop in s.p?

[mw8156] 06/11/2019 09:14

worrying that the hack has involved their financial systems- and they felt it necessary to notify the market since cyber incidents are probably frequent at many companies and do not result in a formal market notification.

[cfro] 01/10/2019 07:34

So, we have a new CEO now as Nick Henry steps down.

Surprisingly quiet here, no comment on the nice multi-million pound (shame they didnt give any more financial detail than that) contract sub-sea contract win from Friday?

[roddiemac2] 10/9/2019 20:46

hxxps://www.sciencedirect.com/science/article/pii/S0964569118304484

[illiswilgig] 10/9/2019 20:11

Thank you Roddie, very interesting.

I am sure that I read somewhere recently that the extent of the decommissioning is not yet settled. Seems that the companies and the UK government are planning to leave the below the surface structures in place - including toxic waste reservoirs. It remains to be seen whether this decommissioning light is approved - or whether the more expensive removal of the subsea structures will also be required? Which may provide more opportunities for companies like Fisher?

cheers

Illis