TIDMFSJ
RNS Number : 1391N
Fisher (James) & Sons plc
21 September 2023
21 September 2023
James Fisher and Sons plc
Half year results for the six months ended 30 June 2023
James Fisher and Sons plc (FSJ:L) ('James Fisher', 'the Group'),
the leading marine service provider, announces its unaudited
results for the six months ended 30 June 2023 ('the period').
Continuing operations H1 2023 H1 2022* change
Revenue (GBPm) 252.0 215.0 17.2%
Underlying operating profit margin 5.6% 5.3% 30 bps
Return on capital employed 4.7% 2.7% 200 bps
Underlying operating profit (GBPm) ** 14.0 11.4 22.8%
Underlying profit before tax (GBPm)
** 6.4 6.8 (5.9%)
Underlying diluted earnings per share
(pence) *** 8.7 6.7 29.9%
Statutory operating profit (GBPm) 3.2 9.8 (67.3%)
Statutory (loss)/profit before tax (GBPm) (4.4) 5.2 n/m
Statutory diluted (loss)/earnings per
share (pence) (6.3) 6.9 n/m
* restated due to a business classified as discontinued
operations
** excludes separately disclosed items of GBP10.8m loss (2022:
GBP1.6m loss) (note 3)
*** excludes separately disclosed items of GBP14.0m loss (2022:
GBP1.4m loss) (note 3)
Financial summary:
-- Strong revenue growth of 17.2% to GBP252.0m (H1 2022:
GBP215.0m), driven by positive momentum in the Energy Division
-- Underlying operating profit up GBP2.6m to GBP14.0m (H1 2022:
GBP11.4m) with all three divisions delivering year on year profit
growth
-- Underlying operating profit margin enhancement of 30 bps with
growth and improvement initiatives offsetting the impact of cost
inflation and investments in Business Excellence and strengthening
of central functions
-- Reduction in statutory PBT from GBP5.2m to a loss of GBP4.4m
due principally to refinancing legal and advisory costs (GBP9.3m)
and higher interest rates offsetting the positive operating
performance
-- Net debt on a covenant basis at 30 June 2023 was GBP154.5m,
(31 December 2022: GBP142.1m; 30 June 2022: GBP172.4m) representing
2.8x EBITDA compared to a covenant limit of 3.5x. The Group expects
to reduce net debt in the second half of the year.
Operational progress:
-- Continued progress in simplification of the Group
o Three operating divisions aligned to market verticals
o Sale of Swordfish Dive Support Vessel, Nuclear Decommissioning
business and obsolete assets generating net proceeds of
GBP18.1m
-- Key initiatives underway in establishing One James Fisher operating model
o Business Excellence function established, with the objective
of improving operating practices across the Group, with initial
priority given to health & safety and project management
processes
o New and experienced senior hires in key divisional and
functional roles
Commenting, Jean Vernet, CEO said:
" All three divisions delivered revenue and profit growth
against the first half of 2022, with a particularly strong increase
seen in the Energy division, driven by demand for the Group's
well-testing, artificial lift and bubble curtain offerings against
a relatively weak comparator period.
"The Group's new divisions have now been embedded into the
operating and reporting structures of the Group, and whilst there
remains significant work to do to achieve the anticipated
commercial and operating synergies, progress has been positive to
date.
"Further strategic progress is expected in the second half of
the year as the Group continues to execute its stated aims of
simplifying and focusing the portfolio. Although the geopolitical
and economic climate remains uncertain, the Board is confident that
it is taking the right steps to create a platform for sustained
recovery. Trading in July and August was in line with expectations
and the Group's full year expectations remain unchanged. "
Notes:
1. James Fisher uses alternative performance measures (APMs) as
key financial indicators to assess the underlying performance of
the business. APMs are used by management as they are considered to
provide useful additional information. APMs include underlying
operating profit, underlying earnings per share and underlying
return on capital employed. An explanation of APMs is set out in
Note 2 in the full year results.
2. Cautionary statement: This announcement contains certain
forward-looking statements with respect to the operations,
performance and financial condition of the Group. By their nature,
these statements involve uncertainty since future events and
circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this announcement and James Fisher and Sons plc
undertakes no obligation to update these forward-looking
statements. Nothing in this statement should be construed as a
profit forecast.
For further information:
Chief Executive
Officer
James Fisher and Jean Vernet Chief Financial
Sons plc Duncan Kennedy Officer 020 7614 9503
Richard Mountain
FTI Consulting Susanne Yule 0203 727 1340
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A presentation of the Half Year Results for analysts and
investors will take place today at 9.00am. The presentation can
also be accessed via:
Webcast link:
https://storm-virtual-uk.zoom.us/webinar/register/WN_xZ0icxwhSj-hZqAHyZr5AQ
Webinar ID:
846 8756 8961
Review of the six months ended 30 June 2023
Overview
The Group has continued to stabilise its financial performance
during 2023. Continuing operations delivered revenue growth of
17.2% in the first half of the year, to GBP252.0m (H1 2022:
GBP215.0m) and underlying operating profit growth of 22.8% to
GBP14.0m (H1 2022: GBP11.4m), representing an improvement of 30bps
on underlying operating profit margin to 5.6% (H1 2022: 5.3%).
Statutory operating profit reduced from GBP9.8m in H1 2022 to
GBP3.2m in H1 2023 as the positive trading performance was
principally offset by costs of refinancing.
Market conditions across all three of the Group's divisions of
Energy, Defence and Maritime Transport were good during the period.
Global energy markets remain strong and the Group has seen high
demand for well-testing, artificial lift and bubble curtain
products and services in particular. Subsea defence activity is
moving up the list of many government priorities, resulting in a
number of longer-term and strategically important opportunities for
the Defence division to pursue. Within Maritime Transport, cargo
rates for Tankships have remained at good levels, albeit slightly
below the peaks seen in Q4 2022, and Fendercare's ship-to-ship
transfer business traded in line with the second half of 2022.
The Group completed several disposals during the period,
including the Swordfish Dive Support Vessel in January, the nuclear
decommissioning business in March and the Mersey Fisher, a tanker
that had reached the end of its commercial life, in June. Net
proceeds from disposals in the period were GBP18.1m. These sales
helped to further solidify the Group's funding position and had a
net positive impact on underlying operating profit.
The Group completed the refinancing of its borrowing facilities
during the period. The new revolving credit facility of GBP210m has
a maturity date of 31 March 2025 and a package of covenants that
support the delivery of the Group's strategy. Costs of refinancing
of GBP9.3m were incurred and excluded from underlying operating
profit. Net debt on a covenant basis at 30 June 2023 was GBP154.5m,
(31 December 2022: GBP142.1m; 30 June 2022: GBP172.4m) representing
2.8x EBITDA compared to a covenant limit of 3.5x. The Group's
operating cashflow profile is typically weighted to the second half
of the year and consequently further progress on deleveraging is
expected in the second half of the year.
Operational progress
The Group has continued to implement its internal change agenda
during the period, including a continued focus on improvement and
simplification. A Business Excellence team has been formed, with
initial priorities on safety (see 'Safety Performance' section) and
project management. Project management improvements have included
an ongoing roll-out of Lean Six Sigma training, with 36 Green Belts
trained in H1, leading to 32 ongoing improvement projects, each of
which is aligned to an over-arching Group priority. The target for
the end of 2023 is to have certified 30 Green Belts and 3 Black
Belts.
Across the Group there is a continued focus on improvement and
simplification. A programme of internal control improvements has
continued, prioritising those businesses and processes that can
materially impact financial reporting. This programme is being
supported by BDO and has now been running for 12 months. After a
period of process documentation and gap identification, the teams
are now moving on to remediation activities and are looking to make
considerable progress before the end of 2023. The programme is
expected to last at least until the end of 2024, before moving into
a more business as usual process of continuous improvement.
An enabler of enhanced internal control is the simplification of
the Group's corporate structure, the planning for which is underway
and forms a key pillar of a more cohesive operating model under the
internal moniker of "One James Fisher". Enhancements to the Group's
go-to-market and commercial models are also well underway, 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.
The key focus of the Group's long-term people strategy is
ensuring the recruitment and retention of the required talent to
drive the Group's turnaround and future growth. Key appointments in
the year to date include several members of the Executive Committee
including new heads of the Finance, Legal, Communications, Business
Excellence and Commercial functions.
Safety Performance
As part of the Group's commitment to safety, a company-wide
programme of work has been put in place, sponsored by the Executive
Committee and embedded across all senior leadership incentive
packages. A Group HSEQ framework, including policies and process
was delivered earlier in the year, alongside the appointment of a
new Head of Group HSEQ. This will align the business behind a
common set of KPIs for Lost Time Incident Frequency ("LTIF") and
Total Recordable Case Frequency ("TRCF"), common benchmarking and
delivery of safe working practices. At 30 June 2023, LTIF was 0.53
vs a target of 0.48 (2022: 0.51) and TRCF was 2.38 vs target of
2.39 (2022: 2.65). Work is also underway to launch a new global
safety campaign in the second half of the year, including
implementation of James Fisher 'Life Saving Rules'. This is based
on industry best practice and will initially target common areas of
highest safety incidents.
Financial performance
The Group delivered strong revenue growth in the period, up
17.2% to GBP252.0m (H1 22: GBP215.0m). All divisions showed growth
against H1 22, with Energy up 26.3% (H1 23: GBP134.0m; H1 22:
GBP106.1m), Defence up 13.5% (H1 23: GBP37.0m; H1 22: GBP32.6m) and
Maritime Transport up 6.2% (H1 23: GBP81.0m; H1 22: GBP76.3m).
Energy division revenue growth was driven by sustained demand
for well-testing services and artificial lift products, with a
strong market backdrop and quick deployment of the Group's new
fleet of more efficient air compressors onto bubble curtain
projects on the US East Coast. Within the Defence division,
commercial diving products have performed well, and Maritime
Transport has seen sustained good utilisation and pricing for the
Tankships fleet, and stable demand for ship-to-ship transfer
services.
Underlying operating profit, which is the basis on which the
Group's banking covenant EBITDA is calculated, improved by 22.8% to
GBP14.0m (H1 2022: GBP11.4m). This includes the negative impact of
an onerous contract provision of GBP1.7m relating to one of the
seasonal vessel charters entered into by the Inspection, Repairs
and Maintenance (IRM) product line within the Energy Division. The
vessel remained idle for several weeks during June, meaning that it
is now anticipated to generate an overall loss over the period of
its rental. Each Division delivered growth in underlying operating
profit and margin, however the Group's overall underlying operating
profit margin improved by a modest 30bps, from 5.3% in H1 22 to
5.6% in H1 23 as the Group has made necessary investments in its
strategic initiatives, including the establishment of the Business
Excellence workstream and projects to strengthen internal controls
and key senior management roles.
Statutory operating profit, at GBP3.2m, is GBP6.6m below prior
year, reflecting net adjusting items of GBP10.8m (H1 2022:
GBP1.6m). The Group incurred GBP9.3m legal and advisory costs
related to refinancing and obtaining a waiver from its lenders and
GBP1.4m of costs related to organisational restructuring, partially
offset by a GBP1.1m gain from the sale of the Mersey Fisher tanker.
Last year, the adjusting items related to a gain of GBP1.0m on the
sale of a Tankships vessel, which was offset by amortisation of
acquired intangible assets of GBP1.1m and a past service cost of
GBP1.5m recognised in relation to the MNRPF pension fund.
Loss before tax was GBP4.4m (H1 2022: GBP5.2m profit) and the
underlying effective tax rate was 27.3% compared to 30.6% in the
period to 30 June 2022. The decrease in profit before tax was
driven by the statutory operating profit performance described
above as well as a GBP3.0m increase in net finance expense driven
by increased interest rates and higher amortisation of arrangement
fees.
Loss per share was 19.0p compared to 3.7p earnings in H1 2022,
reflecting the reduced operating profit performance and higher net
finance expense.
Dividends
The Board remains committed to reintroducing a sustainable and
progressive dividend policy at the appropriate time. However,
considering our current absolute levels of net debt and the
resulting leverage ratio, the Board has not declared an interim
dividend for 2023 (2022: Nil).
Liquidity
At 30 June 2023 the Group had revolving credit facilities
totalling GBP209.9m (31 December 2022: GBP247.5m; 30 June 2022:
GBP287.5m). Undrawn facilities were GBP40.9m.
The Group typically experiences a working capital outflow in the
first half of each year, due to the seasonality of the business,
and bank borrowings of GBP147.2m were GBP14.3m higher than 31
December 2022, but GBP12.3m below 30 June 2022. As part of its
ongoing balance sheet improvement programme, the Group is actively
targeting a reduction in net debt volatility through the year,
which has resulted in a pronounced reduction in creditor days, from
97 to 82. This initiative had the effect of increasing leverage as
at 30 June 2023 by c.0.3x but represents a more appropriate balance
sheet management strategy for the business.
GBPm 30 June 31 Dec 30 June 30 June 31 Dec 30 June
2023 2022 2022 2023 2022 2022
Net bank borrowings 147.2 132.9 159.5 147.2 132.9 159.5
-------- ------- -------- -------- ------- ---------
Finance leases (IAS
17) 5.7 6.9 7.7 5.7 6.9 7.7
-------- ------- -------- -------- ------- ---------
Right of use liabilities 50.6 46.0 38.3 - - -
-------- ------- -------- -------- ------- ---------
Bonds/guarantees - - - 1.6 2.3 5.2
-------- ------- -------- -------- ------- ---------
Net debt 203.5 185.8 205.5
-------- ------- -------- ----------------------------
Net debt - covenant
basis 154.5 142.1 172.4
--------------------------- -------- ------- ---------
EBITDA - covenant
basis 55.4 52.6 53.0
-------- ------- -------- -------- ------- ---------
Net debt : EBITDA 2.8 2.7 3.3
-------- ------- -------- -------- ------- ---------
When measured on a covenant basis, the ratio of net debt to
EBITDA was 2.8 times (31 December 2022: 2.7 times; 30 June 2022:
3.3 times) compared to a covenant limit of 3.5 times. Interest
cover was 3.2 times (31 December 2022: 3.5 times; 30 June 2022: 4.5
times) compared to a covenant requirement to exceed 2.5 times.
Environmental, Social and Governance
The Group published its sustainability report in the period.
This report sets out our commitment to improving the impact that
our products and services have on the environment and the areas in
which we operate and can be found on our Group website.
Improvements in the Group's governance are ongoing, with good
progress made under the internal controls improvement programme
which is now focused on remediation rather than identification
activities.
James Fisher continues to focus on diversity and inclusion. In
the first half of 2023, women represented 38% of our Board
membership, in line with 2022 and 29% of our Executive Committee, a
slight reduction from 36% in H1 2022. Two recent new hires to the
Executive Committee are women.
Board changes
The Board was pleased to announce on 3 August 2023 the
appointment of Karen Hayzen-Smith as its Chief Financial Officer.
Karen will formally join the Group on 1 December 2023 and brings a
wealth of energy and defence sector experience and a strong
background in finance strategy and leadership. Karen will replace
Duncan Kennedy, who announced his intention to step down from the
role earlier in the year. Duncan will remain with the Group for a
short period after Karen's arrival to ensure a smooth handover.
Summary and outlook
All three divisions delivered revenue and profit growth against
the first half of 2022, with a particularly strong increase seen in
the Energy division, driven by demand for the Group's well-testing,
artificial lift and bubble curtain offerings against a relatively
weak comparator period.
The Group's new divisions have now been embedded into the
operating and reporting structures of the Group, and whilst there
remains significant work to do to achieve the anticipated
commercial and operating synergies, progress has been positive to
date.
The completion of the Group's refinancing in June has provided a
more stable platform to allow the Board to continue its strategy to
simplify and rationalise the Group and the Board is grateful for
the continued support of its lending group. Net bank borrowings and
leverage are both expected to reduce in the second half of the year
in line with the Group's typical trading patterns.
Further strategic progress is expected in the second half of the
year as the Group continues to execute its stated aims of
simplifying and focusing the portfolio. Although the geopolitical
and economic climate remains uncertain, the Board is confident that
it is taking the right steps to create a platform for sustained
recovery. Trading in July and August was in line with expectations
and the Group's full year expectations remain unchanged.
Business review
As announced in April 2023, the Group has reorganised as from 1
January 2023 into three divisions, representing the key markets
within which the Group operates, namely: Energy, Defence, and
Maritime Transport. The Energy division combines the division that
used to be called Marine Support and Offshore Oil 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.
Defence
H1 2023 H1 2022 change
Revenue (GBPm) 37.0 32.6 13.5%
Underlying operating profit/(loss) (GBPm) 0.6 (1.3) n/m
Underlying operating profit margin 1.6% (4.0%) 560bps
Return on capital employed 1.8% 2.6% (80)bps
The Defence division delivered revenue growth of 13.5% against
H1 22 and reversed a prior year operating loss to deliver an
operating profit in H1 23. Cost saving measures taken in 2022
contributed to the improved performance. Activity in the period
focused on service and training contracts in India and Korea with
good progress. The renewed NATO submarine rescue contract ("NSRS"),
secured at the end of 2022 went live in July 2023.
Diving product sales showed good growth in the period,
consistent with higher levels of activity seen in the Energy
division's diving activities and the team is working on its next
generation product portfolio to secure the long-term sustainability
of this important franchise.
The division is continuing to focus on converting its
significant sales pipeline, although there were no large wins in
the period. Well qualified and near-term opportunities represent
approximately GBP270m in future revenue and the forward order book
at 30 June was GBP224.5m.
Maritime Transport
H1 2023 H1 2022 change
Revenue (GBPm) 81.0 76.3 6.2%
Underlying operating profit (GBPm) 10.0 8.4 19.0%
Underlying operating profit margin 12.3% 11.0% 130bps
Return on capital employed 24.1% 14.9% 920bps
The Maritime Transport division includes the Group's tankers,
port and Fendercare businesses. Divisional revenue growth of 6.2%
was delivered, with a high operating leverage leading to 19.0%
operating profit growth.
The tanker fleet was well utilised during the period at 91% (H1
22: 88%) and spot charter rates, although not at the peak levels
seen at the end of 2022, remained at good and stable levels. Fleet
improvements continued, with the Lady Maria Fisher joining the
fleet during the period and the Mersey Fisher, which had reached
the end of its commercial life, being sold.
Fendercare's ship-to-ship transfer business has stabilised and a
combination of a relatively high and stable oil price and increased
demand for LNG ship-to-ship transfer services helped deliver 8%
growth in the period. A fourth LNG STS kit was purchased in the
period with a customer retainer agreement quickly in place, meaning
all four kits are now under customer retainers.
Discontinued operations
In the period through to its disposal on 3 March 2023 the
Nuclear Decommissioning business generated revenue of GBP6.7m (H1
22: GBP23.4m) and a loss after tax of GBP6.4m (H1 22: GBP1.6m).
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 GBP4.0m has been included in the
results for the period to 30 June 2023 in relation to potential
claims/settlements under parent company guarantees.
Cashflow and borrowings
Net bank borrowings as at 30 June 2023 were GBP147.2m,
representing a GBP14.3m increase in borrowings from 31 December
2022, but an improvement of GBP12.3m compared to the same point in
2022.
As anticipated, the Group saw a working capital outflow during
the period. The seasonality of the offshore projects businesses
means that receivables build during May and June as summer projects
commence. Debtor days continued to show some positive progress,
being 70 in June 2023 vs 83 days in June 2022. Creditor days have
also reduced to 82 days from 97 days as at 30 June 2022, which
contributed to the increase in borrowings and was a conscious
decision to rebalance the Group's through year working capital.
Capital expenditure, at GBP16.8m, was higher than the GBP10.7m
in H1 2022. The increase was mostly driven by the investment in
next-generation, fuel-efficient compressors to replace an aging
fleet within ScanTech Offshore. This investment has an attractive
financial profile and was subject to rigorous review at the Group's
Investment Committee before being recommended to the Board. The
Group generated GBP21.3m in asset disposal proceeds from the sale
of Swordfish Dive Support Vessel and a tanker, which compares to
GBP1.5m in the prior period. The Group also incurred costs of
GBP3.2m from the sale of JFN. There were no new acquisitions in the
period, or in the prior period, with net outflows of GBP1.4m in
2022 representing deferred consideration on acquisitions completed
in prior years.
The Group's tax payments were broadly in line with prior year at
GBP4.1m (1H 2022: GBP4.4m). Finance costs have gone up by GBP3.2m
(1H 2023: GBP6.3m; 1H 2022: GBP3.1m) due to the increase in
interest costs and costs of refinancing.
Balance sheet
Non-current assets increased by GBP8.8m during the period, from
GBP321.2m at 31 December 2022 to GBP330.0m (30 June 2022:
GBP337.9m). This is principally due to the recognition of an
additional GBP9.3m right of use asset following the delivery of
Lady Maria Fisher tanker into our fleet, partially offset by a
GBP3.8m decrease in goodwill driven by FX retranslation on
consolidation.
Current assets have increased by GBP18.6m to GBP306.4m (31
December 2022: GBP287.8m; 30 June 2022: GBP295.5m). The principal
movements are increases in short-term cash balances, receivables
and inventory, offset by a reduction in assets held for sale
following the sale of Swordfish and JFN. Inventory has increased as
a result of increased activity. Receivables of GBP163.5m are
GBP16.2m below 30 June 2022 reflecting improved debtor days and
GBP14.6m above 31 December 2022, principally reflecting the
seasonality of the business.
Current liabilities have decreased by GBP3.5m to GBP223.0m
compared to 31 December 2022 and are GBP25.5m higher than 30 June
2022. The decrease against 31 December 2022 is mostly driven by the
GBP16.3m reduction in liabilities associated with assets held for
sale following the sale of JFN in March 2023, offset by a seasonal
increase in trade payables and a provision of GBP4.0m relating to
potential liabilities on performance guarantees for JFN and an
onerous contract provision of GBP1.7m relating to one of the
seasonal vessel charters entered into by the Inspection, Repairs
and Maintenance (IRM) product line within the Energy Division.
Short-term bank borrowings (i.e. overdrafts) have increased to
GBP70.5m from GBP67.4m at 31 December 2022, with the net position
of short-term cash and short-term borrowings having reduced to
GBP19.8m at 30 June 2023 (31 December 2022: GBP22.8m; 30 June 2022:
GBP11.1m).
Long-term liabilities, at GBP213.3m, are GBP49.1m higher than as
at 31 December 2022, principally reflecting the reclassification of
GBP36.6m borrowed under Barclays RCF from short-term as at December
2022 to long-term as at 30 June 2023 following the completion of
refinancing as well as an increase in long-term borrowings in the
period.
Overall, the Group's net assets have decreased in the period
from GBP218.3m at 31 December 2022 to GBP200.1m at 30 June
2023.
Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance in the second half of the year are the same
as disclosed in the 2022 Annual Report and Accounts on pages 62-70.
The principal risks set out in the 2022 Annual Report and Accounts
were:
- Operational - Group transformation programme, health and
safety, cyber security, contractual, project delivery, recruitment
and retention of key staff, and pandemic risks;
- Strategic - operating in emerging markets, climate change; and
- Financial - maintaining access to adequate funding, interest
rate, foreign exchange and credit risks.
The Board considers that the principal risks and uncertainties
set out in the 2022 Annual Report and Accounts remain the same. The
global macroeconomic environment is presenting an emerging risk to
the Group. A combination of a slowdown in key global economies and
higher interest rates, which may affect commodity prices, and high
inflation in the UK, reflect an emerging risk that is being
factored into the Group's strategic planning process in
particular.
Directors' Responsibilities
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted
for use in the United Kingdom;
(b) The interim management report includes a fair review of the
information required by:
a. DTR 4.2.7R of the 'Disclosure and Transparency Rules', being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b. DTR 4.2.8R of the 'Disclosure and Transparency Rules', being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
the period; and any changes in the related party transactions
described in the last annual report that could do so.
Approved by the Board of Directors and signed on its behalf
by:
J Vernet D Kennedy
Chief Executive Officer Chief Financial Officer
20 September 2023
INDEPENT REVIEW REPORT TO JAMES FISHER AND SONS PLC
Conclusion
We have been engaged by James Fisher and Sons Plc ("the
Company") to review the condensed set of financial statements in
the half-yearly financial report for the six months ended 30 June
2023 which comprises the condensed consolidated income statement,
the condensed consolidated statement of comprehensive income, the
condensed consolidated statement of financial position, the
condensed consolidated statement of changes in equity, the
condensed consolidated cash flow statement and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2023 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the
UK and the Disclosure Guidance and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity ("ISRE (UK) 2410") issued for use in the UK. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. We
read the other information contained in the half-yearly financial
report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed
set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention that causes us to believe that the directors have
inappropriately adopted the going concern basis of accounting, or
that the directors have identified material uncertainties relating
to going concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the Group to cease to continue as a going
concern, and the above conclusions are not a guarantee that the
Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with UK-adopted international
accounting standards.
The directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report
in accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the
directors are responsible for assessing the Group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. Our conclusion, including our
conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion section of this report.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the Company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company for our
review work, for this report, or for the conclusions we have
reached.
Ailsa Griffin
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
20 September 2023
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Note restated*
GBPm GBPm GBPm
Continuing operations
Revenue 4 252.0 215.0 478.1
Cost of sales (186.5) (159.9) (350.9)
----------- ----------- -------------
Gross profit 65.5 55.1 127.2
Administrative expenses (62.4) (45.9) (104.4)
Impairment of trade and other receivables (0.4) (0.8) 0.3
Share of post-tax results of associates 0.5 1.4 1.6
----------- ----------- -------------
Operating profit 4 3.2 9.8 24.7
Finance income 6 1.1 0.2 0.7
Finance expense 6 (8.7) (4.8) (10.9)
----------- ----------- -------------
(Loss)/profit before taxation (4.4) 5.2 14.5
Income tax 7 1.2 (1.6) (5.5)
(Loss)/profit for the period from continuing
operations (3.2) 3.6 9.0
=========== =========== =============
Loss for the period from discontinued
operations, net of tax 5 (6.4) (1.6) (19.8)
(Loss)/profit for the period (9.6) 2.0 (10.8)
=========== =========== =============
Attributable to:
Owners of the Company (9.6) 1.9 (11.1)
Non-controlling interests - 0.1 0.3
(9.6) 2.0 (10.8)
=========== =========== =============
(Loss)/earnings per share pence pence pence
Basic 8 (19.0) 3.7 (22.1)
Diluted 8 (19.0) 3.7 (22.1)
(Loss)/earnings per share - continuing
activities pence pence pence
Basic 8 (6.3) 6.9 17.4
Diluted 8 (6.3) 6.9 17.4
* 30 June 2022 results are restated due to a business classified
as discontinued operations - see Note 5.
The presentation of the consolidated income statement has been
amended to include a line item 'impairment of trade and other
receivables' and for removal of columns headed 'separately
disclosed items' as described in the 2022 Annual Report - Note 1:
Presentation of financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2023
Six months Six months
Note ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
(Loss)/profit for the period (9.6) 2.0 (10.8)
Other comprehensive (loss)/income:
Items that will not be classified to the
income statement
Actuarial (loss)/gain in defined benefit
pension schemes 10 (1.1) 7.6 7.1
Tax on items that will not be reclassified - (0.9) (1.3)
----------- ----------- ------------
(1.1) 6.7 5.8
Items that may be reclassified to the income
statement
Exchange differences on foreign currency
net investments (10.1) 6.6 8.8
Effective portion of changes in fair value
of cash flow hedges 4.8 (1.7) 3.6
Effective portion of changes in fair value
of cash flow hedges in joint ventures (0.1) 0.2 0.4
Net change in fair value of cash flow hedges
transferred to income statement (1.3) 0.7 0.6
Tax on items that may be reclassified (1.3) 0.3 (1.1)
----------- ----------- ------------
(8.0) 6.1 12.3
Total other comprehensive income for the
period (9.1) 12.8 18.1
Total comprehensive income for the period (18.7) 14.8 7.3
=========== =========== ============
Attributable to:
Owners of the Company (18.7) 14.6 6.9
Non-controlling interests - 0.2 0.4
(18.7) 14.8 7.3
=========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2023
30 June 30 June 31 December
2023 2022 2022
restated*
Note GBPm GBPm GBPm
Non-current assets
Goodwill 11 112.5 135.1 116.3
Other intangible assets 7.5 11.4 8.2
Property, plant and equipment 120.3 120.9 119.7
Right-of-use assets 61.6 39.5 52.3
Investment in joint ventures 8.5 9.6 8.7
Retirement benefit surplus 10 5.3 5.8 5.5
Other investments 1.4 1.4 1.4
Deferred tax assets 11.5 8.9 8.4
Other receivables 1.4 5.3 0.7
330.0 337.9 321.2
-------- ---------- ------------
Current assets
Inventories 51.8 54.3 49.8
Trade and other receivables 162.1 174.4 148.2
Assets held for sale 13 2.2 13.0 36.2
Cash and cash equivalents 12 90.3 53.8 53.6
306.4 295.5 287.8
-------- ---------- ------------
Current liabilities
Trade and other payables (127.2) (141.2) (122.4)
Provisions 14 (11.5) (2.0) (5.3)
Liabilities associated with assets
held for sale 13 - - (16.3)
Current tax (1.9) (1.6) (1.9)
Borrowings (70.5) (42.7) (67.4)
Lease liabilities (11.9) (10.0) (13.2)
(223.0) (197.5) (226.5)
-------- ---------- ------------
Net current assets 83.4 98.0 61.3
Total assets less current liabilities 413.4 435.9 382.5
-------- ---------- ------------
Non-current liabilities
Other payables - (1.6) (0.5)
Provisions 14 (1.4) (1.3) (1.4)
Retirement benefit obligations 10 (0.5) (0.7) (0.4)
Cumulative preference shares (0.1) (0.1) (0.1)
Borrowings (167.0) (170.5) (121.8)
Lease liabilities (44.3) (36.0) (39.7)
Deferred tax liabilities - (0.3) (0.3)
(213.3) (210.5) (164.2)
-------- ---------- ------------
Net assets 200.1 225.4 218.3
======== ========== ============
Equity
Called up share capital 12.6 12.6 12.6
Share premium 26.8 26.8 26.8
Treasury shares (0.6) (0.6) (0.6)
Other reserves (14.8) (14.4) (6.8)
Retained earnings 175.6 200.1 185.8
-------- ---------- ------------
Equity attributable to owners
of the Company 199.6 224.5 217.8
Non-controlling interests 0.5 0.9 0.5
Total equity 200.1 225.4 218.3
======== ========== ============
* Non-current other receivables, Current trade and other
receivables and Current trade and other payables have been restated
for the June 2022 comparative period (see Note 1).
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2023
Total Non-
Share Share Retained Other Treasury shareholders controlling Total
capital premium earnings reserves shares equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January
2023 12.6 26.8 185.8 (6.8) (0.6) 217.8 0.5 218.3
Loss for the
period - - (9.6) - - (9.6) - (9.6)
Other
comprehensive
(loss)/income - - (1.1) (8.0) - (9.1) - (9.1)
Share based
payments - - 0.5 - - 0.5 - 0.5
-------- -------- --------- --------- --------- ------------- ------------ -------
At 30 June
2023 12.6 26.8 175.6 (14.8) (0.6) 199.6 0.5 200.1
======== ======== ========= ========= ========= ============= ============ =======
At 1 January
2022 12.6 26.8 191.5 (20.4) (0.6) 209.9 0.7 210.6
Profit for the
period - - 1.9 - - 1.9 0.1 2.0
Other
comprehensive
income - - 6.7 6.0 - 12.7 0.1 12.8
Changes in
ownership
interest
without
a change in
control - - (0.3) - - (0.3) - (0.3)
Share based
payments - - 0.3 - - 0.3 - 0.3
-------- -------- --------- --------- --------- ------------- ------------ -------
At 30 June
2022 12.6 26.8 200.1 (14.4) (0.6) 224.5 0.9 225.4
======== ======== ========= ========= ========= ============= ============ =======
Other reserve movements
Translation Hedging Put option
reserve reserve liability Total
Other reserves GBPm GBPm GBPm GBPm
At 1 January
2022 (16.9) (1.0) (2.5) (20.4)
Other comprehensive income 6.6 (0.6) - 6.0
--------- ------------- ------------ -------
At 30 June 2022 (10.3) (1.6) (2.5) (14.4)
Other comprehensive income 2.1 4.1 - 6.2
Remeasurement of non-controlling
interest put option - - 1.4 1.4
--------- ------------- ------------ -------
At 31 December 2022 (8.2) 2.5 (1.1) (6.8)
Other comprehensive (loss)/income (10.1) 2.1 - (8.0)
--------- ------------- ------------ -------
At 30 June
2023 (18.3) 4.6 (1.1) (14.8)
========= ============= ============ =======
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2023
Six months Six months
Note ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
restated*
GBPm GBPm GBPm
(Loss)/profit for the period (9.6) 2.0 (10.8)
Tax (credit)/charge (1.2) 1.2 4.7
Adjustments to reconcile profit/(loss) before
tax to net cash flows
Depreciation and amortisation 20.8 20.4 41.1
Other non-cash items (2.5) (1.3) (1.7)
Impairments (0.3) - 0.7
Loss on remeasurement to fair value less
costs to sell - - 13.3
(Gain)/loss on disposal of businesses,
net of disposal costs 5 2.1 - (2.5)
Net finance expense 7.5 4.6 10.3
Increase in inventories (3.0) (3.9) (3.2)
(Increase)/decrease in trade and other receivables (20.8) (21.0) 2.5
Increase/(decrease) in trade and other payables
and provisions 15.4 0.7 (1.9)
Defined benefit pension cash contributions
less service cost (0.8) 0.6 0.1
----------- ----------- ------------
Cash generated from operations 7.6 3.3 52.6
Income tax payments (4.1) (4.4) (8.1)
----------- ----------- ------------
Cash flow from/(used in) operating activities 3.5 (1.1) 44.5
Investing activities
Dividends from joint venture undertakings - 1.0 1.7
Proceeds from the disposal of a subsidiary,
net of cash disposed 5 (3.2) - 15.1
Proceeds from the disposal of property,
plant and equipment 21.3 1.5 2.2
Finance income 1.2 0.2 0.8
Acquisition of subsidiaries, net of cash
acquired - (1.4) (2.6)
Acquisition of property, plant and equipment (16.8) (10.7) (31.7)
Development expenditure (0.9) (0.6) (1.3)
-----------
Cash flows from/(used in) investing activities 1.6 (10.0) (15.8)
Financing activities
Finance costs (6.3) (3.1) (7.5)
Acquisition of non-controlling interests
(NCI) - - (1.5)
Capital element of lease repayments (8.5) (7.0) (14.5)
Proceeds from borrowings 192.0 100.0 166.0
Repayment of borrowings (184.6) (104.0) (182.6)
----------- ----------- ------------
Cash flows used in financing activities (7.4) (14.1) (40.1)
Net decrease in cash and cash equivalents (2.3) (25.2) (11.4)
Cash and cash equivalents at beginning of
period 22.8 34.5 34.5
Net foreign exchange differences (0.7) 1.8 2.5
Cash transferred to asset held for sale - - (2.8)
Cash and cash equivalents at end of period 12 19.8 11.1 22.8
=========== =========== ============
* Cash generated from operations for the six-months period ended
30 June 2022 has been re-presented to reallocate 'separately
disclosed items' to the relevant line items within cash generated
from operations. In addition, GBP0.6m prepayments related to the
acquisition of property, plant and equipment has been reclassified
from within cash generated from operations. Proceeds from
borrowings and repayment of borrowings have also been restated
(Note 1).
NOTES TO THE CONDENSED CONSOLIDATED HALF YEAR STATEMENTS
1 Basis of preparation
James Fisher and Sons Plc (the Company) is a public limited
company registered and domiciled in England and Wales and listed on
the London Stock Exchange. The condensed consolidated half year
financial statements of the Company for the six months ended 30
June 2023 comprise the Company and its subsidiaries (together
referred to as the Group) and the Group's interests in jointly
controlled entities.
Statement of compliance
These condensed consolidated interim financial statements, which
have been reviewed and not audited, have been prepared in
accordance with International Financial Reporting Standard (IFRS)
IAS 34 "Interim Financial Reporting" as adopted for use in the UK.
As required by the Disclosure and Transparency Rules of the
Financial Conduct Authority, the condensed consolidated set of
financial statements has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the
year ended 31 December 2022 with the exceptions described below.
They do not include all of the information required for full annual
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended
31 December 2022.
The comparative figures for the financial year ended 31 December
2022 are not the Group's statutory accounts for that financial
year. Those accounts which were prepared in accordance with
UK-adopted International Financial Reporting Standards (IFRS), have
been reported on by the Group's auditors and delivered to the
Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) included reference to a matter to which the
auditor drew attention by way of emphasis without qualifying their
report in respect of a material uncertainty in respect of going
concern and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The consolidated financial statements of the Group for the year
ended 31 December 2022 are available upon request from the
Company's registered office at Fisher House, PO Box 4,
Barrow-in-Furness, Cumbria LA14 1HR or at www.james-fisher.co.uk
.
The half year financial information is presented in Sterling and
all values are rounded to the nearest 0.1 million pounds (GBP0.1m)
except where otherwise indicated.
Prior period restatements
In the annual report for 31 December 2022, Note 1 made reference
to several restatements to the prior period reported figures Note 1
also referred to amendments following a review of the financial
statements for the year ended 31 December 2021 by the FRC's
Corporate Reporting Review Team, which was concluded in the period.
Equivalent restatements have been made in respect of the 30 June
2022 figures, details as per the below:
Presentation of financial statements
The presentation of the consolidated income statement has been
amended to include a line item for 'impairment of trade and other
receivables'. The June 2022 comparative has been amended to
reclassify GBP0.8m which was previously within administrative
expenses.
Balance sheet restatements
At 30 June 2022, other payables of GBP9.0m was recognised in
respect of a pain provision which should have been presented as a
reduction in contract assets to represent a single net position on
one contract.
At 30 June 2022, a contract asset and corresponding contract
liability of GBP5.7m was recognised in respect of what was
understood to be a commission payment for which there was
considered to be an obligation to make payments over a number of
years. It is now recognised by the Directors from further analysis
of the underlying agreement that these costs relate to services
that will be performed over a number of years which are cancellable
under the agreement. The Directors do not consider there to be a
contractual obligation under the agreement and therefore have
restated the comparatives to derecognise the contract liability and
therefore the corresponding asset. This change in presentation
within the Consolidated statement of financial position has no
effect on the profit of the Group or Company, the cash position of
the Group or Company in their balance sheets and has no further
impact on the Group's interim financial statements. The effect of
the restatement on the Consolidated statement of financial position
in respect of the comparative amount for the period ended 30 June
2022 is set out below. The effect of the restatement on the
Consolidated statement of financial position in respect of the
comparative amount for the period ended 30 June 2022 is set out
below:
30 June 2022 30 June 2022
As reported Adjustment Adjustment Restated
GBPm GBPm GBPm GBPm
Current trade and other receivables 183.4 (9.0) - 174.4
Current assets 304.5 (9.0) - 295.5
Non-current other receivables 11.0 - (5.7) 5.3
Non-current
assets 343.6 - (5.7) 337.9
Trade and other payables (155.9) 9.0 5.7 (141.2)
Current liabilities (212.2) 9.0 5.7 (197.5)
Total assets less current liabilities 435.9 - - 435.9
------------- ----------- ----------- ---------
Cash flow restatement
The movement in trade and other receivables presented in the
prior year Consolidated cash flow statement included prepayments in
respect of the acquisition of property, plant and equipment of
GBP0.6m which was incorrectly presented within 'cash flows from
operating activities' when it should have been included within
'cash flows from investing activities'. In preparing the
Consolidated cash flow statement for the period ended 30 June 2023,
the comparative amounts have been restated to present the movement
in trade and other receivables of GBP0.6m in respect of prepayments
in relation to the acquisition of property, plant and equipment
within cash flows from investing activities.
Gross up of drawdowns and repayments of external borrowings
The proceeds from and repayments of borrowings had been
incorrectly calculated in the prior period cash flow statement. In
preparing the cash flow statement for the year ended 30 June 2023,
the comparative amounts have been restated to show the proceeds
from and repayments of borrowings as gross balances in line with
IAS 7.21. This change in presentation within the Group and Company
cash flow statement has no effect on the cash position of the
balance sheet and has no further impact on the financial
statements. The effect of the restatement on the Consolidated cash
flow statement in respect of the comparative amount for the period
ended 30 June 2022 is set out below.
30 June 30 June
2022 2022
As reported Restated
GBPm GBPm
Proceeds from borrowings 17.0 100.0
Repayment of borrowings (21.0) (104.0)
Cash flows used in financing activities (14.1) (14.1)
Going concern
In determining the appropriate basis of preparation of the
financial statements for the six months ended 30 June 2023, the
Board is required to consider whether the Group can continue in
operational existence for a period of at least 12 months from the
date of approval of the Financial Statements. The Board has
concluded that it is appropriate to adopt the going concern basis,
having undertaken a rigorous assessment of the financial forecasts,
key uncertainties and sensitivities, as set out below.
The Group had GBP40.9m of undrawn committed facilities at 30
June 2023 (30 June 2022: GBP115.5m; 31 December 2022: GBP88.0m). At
30 June 2023, the Group had GBP210.0m of committed facilities (30
June 2022: GBP115.5m;31 December 2022: GBP247.5m).
On 7 June 2023, the Group announced that it has signed its new
revolving credit facility. The Group's new GBP210m secured
revolving credit facility, which matures in March 2025 (the "RCF"),
has been provided by its six existing lenders.
The key terms of the new facility agreement are:
- Maturity date: 31 March 2025.
- Net debt/EBITDA covenant (measured quarterly): 3.5x for 30
June and 30 September 2023, 3.25x for 31 December 2023, 3.0x for 31
March 2024, 2.75x for 30 June 2024 and 2.5x thereafter.
- Interest cover covenant (measured quarterly): 2.5x in June and
September 2023, 1.75x in December 2023 and March 2024, 2.0x in June
and September 2024, 2.5x in December 2023 and 2.75x in March
2025.
- Scheduled amortisation of: GBP15m on 30 September 2023, GBP10m
on 31 December 2023 and GBP10m on 30 June 2024.
- Minimum liquidity requirement: GBP10m.
The Group has been in compliance with the requirements of its
financial covenants under the existing agreement and remained so at
the 30 June 2023 measurement date.
Going concern assessment period
Accounting standards require the Directors to make an assessment
of the Company's ability to continue to operate as a going concern
for at least 12 months from the date of approval of the financial
statements. The Board has considered an appropriate period for
going concern assessment taking into account any known liquidity
events that will occur after the 12 months period. Given that the
refinancing has been recently completed, the Directors concluded
that the 12 months going concern assessment period is
appropriate.
Board assessment
Base case
The Group continues to closely monitor and manage its liquidity
and covenants compliance. The Group has prepared base case cash
flow forecasts that demonstrate the Board's best estimate for the
going concern assessment period, taking into account the wider
macro-economic environment such as increases in the base interest
rate. The Board believes that in the preparation of the base case
it has taken into account some potential downside risks to business
performance, including the likelihood of winning major new
contracts, ongoing project delivery risks and timing of contract
cashflows. The base plan does not include any further disposals or
acquisitions. The base case demonstrated the Company would have
headroom against its facilities and would comply with covenants
over the going concern period.
Severe but plausible downside scenario
The Group also modelled severe but plausible downside scenarios
in which the Board has taken account of the following:
- trading downside risks, which assume the Group is not
successful in delivering the anticipated profitability levels due
to risks associated with contract wins and/or delays and forecast
margins achievement resulting in operating profit reduction of 26%
in September to December 2023 and 25% in 2024;
- cash inflow disruptions that may result from late payments
from customers or project delivery challenges resulting in GBP10m
cash receipts reduction in September to December 2023 and a further
GBP10m reduction in 2024;
- cash outflows during the going concern period that may be
required to settle or transfer certain performance guarantees that
remained within the Group following the sale of James Fisher
Nuclear (JFN) on 3 March 2023, in the event of default by JFN in
performing its contractual duties and obligations;
- further increase in interest rates from the current rate of
5.25% with incremental increases to 6.5% SONIA in March 2024 and
for the remainder of the going concern period.
The above scenarios, individually and combined, demonstrated
sufficient liquidity headroom and covenants compliance. However,
the combination of all above scenarios result in limited headroom
on the interest cover and net debt/EBITDA covenants at June 2024.
Should the Board need to take mitigating action moving into the
2024 financial year then it would initially consider the level of
pay increases included in the forecasts that was appropriate to be
awarded in January 2024 and secondly consider an extension to
creditor terms. The severe but plausible downside scenario includes
an average of a 2% increase across all employees, costing the Group
approximately GBP3m on an annualised basis which the Board believes
would provide sufficient flexibility to mitigate the risk of any
potential covenant breaches.
As part of the new revolving credit facility there is a
non-financial covenant that requires the Group to provide signed
audited financial statements for all guarantors party to the
banking arrangement where applicable within 180 days of the year
end. At the time of signing these financial statements the Group
has obtained a waiver from the banks for certain guarantors where
this covenant requirement has not been met. The Board believe that
they are able to meet the revised signing dates as outlined in this
waiver however acknowledge that should the revised signing dates
not be met then an additional waiver will need to be obtained to
prevent a breach to the Group's banking facility.
Conclusion
Having undertaken rigorous assessment as detailed above, the
Directors are confident that the Company will have sufficient funds
to continue to meet its liabilities as they fall due for at least
12 months from the date of approval of the condensed interim
financial statements and therefore have prepared the condensed
interim financial statements on a going concern basis.
Significant accounting policies
IFRS 17 Insurance contracts (IFRS 17) as issued in 2017, with
amendments published in 2020 and 2021, was adopted as from 1
January 2023. The adoption of IFRS 17 had no significant effect on
the Group's financial reporting. Otherwise, the accounting policies
applied by the Group in these condensed consolidated financial
statements are the same as those applied by the Group in its
consolidated financial statements as at and for the year ended 31
December 2022.
2 Accounting estimates and judgements
The preparation of half year financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ materially from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements as at and for the year ended 31 December
2022.
3 Alternative performance measures
The Group uses a number of alternative (non-Generally Accepted
Accounting Practice (non-GAAP)) performance measures which are not
defined within IFRS. The alternative performance measures (APMs)
should be considered in addition to and not as a substitute or
superior to the information presented in accordance with IFRS, as
APMs may not be directly comparable with similar measures used by
other companies.
The Group believes that APMs, when considered together with IFRS
results, provide the readers of the financial statements with
complementary information to better understand and compare the
financial performance and position of the Group from period to
period. The adjustments are usually items that are significant in
size and/or non-recurring in nature. These measures are also used
by management for planning, reporting and performance management
purposes. Some of the measures form part of the covenant ratios
calculation required under the terms of The Group's loan
agreements.
As APMs include the benefits of restructuring programmes or use
of the acquired intangible assets but exclude certain significant
costs, such as amortisation of intangible assets, litigation,
material restructuring and transaction items, they should not be
regarded as a complete picture of the Group's financial
performance, which is presented in its IFRS results. The exclusion
of adjusting items may result in underlying profits/(losses) being
materially higher or lower than IFRS earnings.
A review has been performed to determine which APMs are most
relevant to users of the financial results. As a consequence, some
measures have been removed (including underlying dividend cover and
underlying cash conversion) and a leverage (replacing underlying
net borrowings) and interest cover APMs have been added with a view
to increase reliance on statutory measures and reduce the number of
APMs. The following APMs are referred to in the Annual Report and
Accounts and described in the following paragraphs.
3.1 Underlying operating profit
Underlying operating profit is defined as operating profit from
continuing and discontinued operations (see Note 5) adjusted for
acquisition related income and expense (amortisation or impairment
of acquired intangible assets, acquisition expenses, adjustments to
contingent consideration), the costs of a material restructuring,
litigation, asset impairment and profit/loss relating to the sale
of businesses or any other significant one-off adjustments to
income or expenses (adjusting items).
Underlying operating profit is used as a basis for net
debt/EBITDA and interest cover covenant calculation, required under
the terms of the Group's loan agreements. This APM is also used
internally to measure the Group's performance against previous
years and budgets, as the adjusting items fluctuate year on year
and may be unknown at the time of budgeting.
Six months ended 30 June 2023
Continuing operations
------------------------------------------------------------------------------------------
Disposal
Impairment of Total
As charges/ businesses Other/ Underlying Discontinued underlying
reported (reversals) Re-financing Re-structuring and assets Tax results operations results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Continuing operations
Revenue 252.0 - - - - - 252.0 6.7 258.7
Cost of sales (186.5) - - - (1.1) - (187.6) (6.0) (193.6)
--------- ------------ ------------- --------------- ----------- ------- ----------- ------------- -----------
Gross profit 65.5 - - - (1.1) - 64.4 0.7 65.1
Administrative
expenses ( 62.4) (0.3) 9.3 1.4 - 1.5 (50.5) ( 7.2) ( 57.7)
Impairment
of trade
receivables (0.4) - - - - - (0.4) - (0.4)
Share of
post-tax
results of
associates 0.5 - - - - - 0.5 - 0.5
--------- ------------ ------------- --------------- ----------- ------- ----------- ------------- -----------
Operating
profit/(loss) 3.2 (0.3) 9.3 1.4 (1.1) 1.5 14.0 (6.5) 7.5
Finance income 1.1 - - - - - 1.1 - 1.1
Finance expense (8.7) - - - - - (8.7) - (8.7)
--------- ------------ ------------- --------------- ----------- ------- ----------- ------------- -----------
Profit/(loss)
before
taxation (4.4) (0.3) 9.3 1.4 (1.1) 1.5 6.4 (6.5) (0.1)
Income tax 1.2 - - - - (2.9) (1.7) 0.1 (1.6)
--------- ------------ ------------- --------------- ----------- ------- ----------- ------------- -----------
Profit/(loss)
for the year
from
continuing
operations (3.2) (0.3) 9.3 1.4 (1.1) (1.4) 4.7 (6.4) (1.7)
Discontinued operations -
(Loss)/profit
for the year
from
discontinued
operations,
net of tax (6.4) - - - - - (6.4) 6.4 -
--------- ------------ ------------- --------------- ----------- ------- ----------- ------------- -----------
Profit/(loss)
for the period (9.6) (0.3) 9.3 1.4 (1.1) (1.4) (1.7) - (1.7)
Operating
margin
(%) 1.3% 5.6% (97%) 2.9%
Segmental underlying operating profit
is calculated as follows:
Energy 6.9 (0.5) - 0.4 0.4 0.3 7.5
Defence 0.7 (0.3) - 0.2 - - 0.6
Maritime
transport 10.0 0.5 - 0.8 (1.5) 0.2 10.0
Corporate (14.4) - 9.3 - - 1.0 (4.1)
--------- ------------ ------------- --------------- ----------- ------- -----------
Continuing 3.2 (0.3) 9.3 1.4 (1.1) 1.5 14.0
During the six months ended 30 June 2023, adjusting items were
in relation to the following matters:
The impairment charges/(reversals) relate to tangible assets and
assets held for sale.
Refinancing is related to the costs of the refinancing strategy
and obtaining a waiver from the lenders.
Restructuring costs relates to restructuring programmes in the
Fendercare and JFD businesses.
Disposal of businesses and assets includes a gain of GBP1.1m on
disposal of a vessel in Tankships.
Other includes GBP0.4m costs of litigation, GBP0.6m legal and
advisory costs related to compliance with the new facilities'
requirements and amortisation of acquired intangibles.
Six months ended 30 June 2022
Continuing operations
-------------------------------------------------------------------------------------
Amortisation Disposal
As of acquired Impairment of Total
reported intangible charges/ businesses Other/ Underlying Discontinued underlying
restated assets (reversals) and assets Tax results operations results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Continuing operations
Revenue 215.0 - - - - 215.0 23.4 238.4
Cost of sales (159.9) - - (1.0) - (160.9) (21.8) (182.7)
----------- --------------- ---------------- ------------- ------- ------------- ------------- -----------
Gross profit 55.1 - - (1.0) - 54.1 1.6 55.7
Administrative
expenses (45.9) 1.1 - - 1.5 (43.3) (3.5) (46.8)
Impairment of
trade receivables (0.8) - - - - (0.8) - (0.8)
Share of post-tax
results of
associates 1.4 - - - - 1.4 0.0 1.4
----------- --------------- ---------------- ------------- ------- ------------- ------------- -----------
Operating
profit/(loss) 9.8 1.1 - (1.0) 1.5 11.4 (1.9) 9.5
Finance income 0.2 0.0 - - - 0.2 0.0 0.2
Finance expense (4.8) 0.0 - - - (4.8) (0.1) (4.9)
----------- --------------- ---------------- ------------- ------- ------------- ------------- -----------
Profit/(loss)
before taxation 5.2 1.1 - (1.0) 1.5 6.8 (2.0) 4.8
Income tax (1.6) 0.0 - - (0.2) (1.8) 0.4 (1.4)
----------- --------------- ---------------- ------------- ------- ------------- ------------- -----------
Profit/(loss)
for the year
from continuing
operations 3.6 1.1 - (1.0) 1.3 5.0 (1.6) 3.4
Discontinued operations
(Loss)/profit
for the year
from discontinued
operations,
net of tax (1.6) - - - - (1.6) 1.6 -
----------- --------------- ---------------- ------------- ------- ------------- ------------- -----------
Profit/(loss)
for the period 2.0 1.1 - (1.0) 1.3 3.4 (0.0) 3.4
Operating margin
(%) 4.5% 5.3% (8%) 4.0%
Segmental underlying operating profit is calculated
as follows:
Energy 5.4 0.8 - - - 6.2
Defence (1.4) 0.1 - - - (1.3)
Maritime transport 9.1 0.2 - (1.0) - 8.4
Corporate (3.4) - - - 1.5 (1.9)
----------- --------------- ---------------- ------------- ------- -------------
Continuing 9.8 1.1 - (1.0) 1.5 11.4
During the six months ended 30 June 2022, adjusting items were
in relation to the following matters:
Disposal of businesses and assets relates includes a gain of
GBP1.0m on disposal of a vessel in the Marine Transport
division.
Other includes GBP1.5m past service cost recognised for the
MNRPF scheme in respect of ill health early retirement benefits
(see Note 10).
Year ended 31 December 2022
Amorti-
sation
of Specific Disposal
acquired Impairment trade of Total
As intangible charges/ receivables businesses Other/ Underlying Dis-continued underlying
reported assets (reversals) provision Re-structuring and assets Tax results operations results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Continuing operations
Revenue 478.1 - - - - - - 478.1 42.8 520.9
Cost of
sales (350.9) - (4.5) - - (0.9) - (356.3) (43.3) (399.6)
--------- ----------- ------------ ------------ --------------- ----------- ------- ----------- -------------- -----------
Gross profit 127.2 - (4.5) - - (0.9) - 121.8 (0.5) 121.3
Administrative
expenses (104.4) 2.1 5.2 - 1.7 (2.5) 1.7 (96.2) (6.9) (103.1)
Impairment
of trade
receivables 0.3 - - (1.1) - - - (0.8) - (0.8)
Share of
post-tax
results
of associates 1.6 - - - - - - 1.6 0.1 1.7
--------- ----------- ------------ ------------ --------------- ----------- ------- ----------- -------------- -----------
Operating
profit/(loss) 24.7 2.1 0.7 (1.1) 1.7 (3.4) 1.7 26.4 (7.3) 19.1
Finance
income 0.7 - - - - - - 0.7 - 0.7
Finance
expense (10.9) - - - - - - (10.9) (0.1) (11.0)
--------- ----------- ------------ ------------ --------------- ----------- ------- ----------- -------------- -----------
Profit/(loss)
before
taxation 14.5 2.1 0.7 (1.1) 1.7 (3.4) 1.7 16.2 (7.4) 8.8
Income tax (5.5) - - - - - 0.8 (4.6) 0.8 (3.8)
--------- ----------- ------------ ------------ --------------- ----------- ------- ----------- -------------- -----------
Profit/(loss)
for the
year from
continuing
operations 9.0 2.1 0.7 (1.1) 1.7 (3.4) 2.5 11.6 (6.6) 5.0
Discontinued
operations
----------- ------------ ------------ --------------- ----------- ------- ----------- -------------- -----------
(Loss)/profit
for the
year from
discontinued
operations,
net of tax (19.8) - - - - - - (19.8) 19.8 -
--------- ----------- ------------ ------------ --------------- ----------- ------- ----------- -------------- -----------
Profit/(loss)
for the
year (10.8) 2.1 0.7 (1.1) 1.7 (3.4) 2.5 (8.3) 13.3 5.0
Operating
margin (%) 5.2% 5.5% (17.0%) 3.7%
Segmental underlying operating profit
is calculated as follows:
Energy 16.4 1.6 (0.8) (1.1) - (2.5) 0.2 13.9
Defence (3.5) 0.1 1.7 - 1.4 - - (0.3)
Maritime
transport 19.2 0.4 (0.3) - 0.4 (0.9) - 18.7
Corporate (7.4) - - - - - 1.5 (5.9)
--------- ----------- ------------ ------------ --------------- ----------- ------- -----------
Continuing 24.7 2.1 0.6 (1.1) 1.7 (3.4) 1.7 26.4
During the year ended 31 December 2022, adjusting items were in
relation to the following matters:
Amortisation of acquired intangibles.
The impairment charges/(reversals) relate to goodwill,
intangible and tangible assets, and assets held for sale (see Notes
11, 13).
Specific trade receivables provision relates to a recovery of
amounts provided for in 2021 in relation to specific counterparty
risk and receivables billed over 12 months ago in relation to
certain projects.
Restructuring costs relates to restructuring programmes
completed during the year by the Fendercare and JFD businesses.
Disposal of businesses and assets relates to the disposal during
2022 of James Fisher Mimic Ltd, Prolec Ltd and Strainstall UK Ltd
for GBP18.5m proceeds with GBP4.3m gains less GBP1.8m costs of
disposal. In addition, the Group has recognised a gain of GBP0.9m
on disposal of one of its vessels in the Tankships division.
Other includes GBP1.5m past service cost recognised for the
MNRPF scheme in respect of ill health early retirement benefits
(see Note 10).
3.2 Covenant EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation)
Covenant EBITDA is calculated in line with the Group's banking
covenants. It is defined as the underlying operating profit before
interest, tax, depreciation and amortisation, adjusted for impacts
of IFRS 16. The covenants require that EBITDA is calculated
excluding the effects of IFRS 16. The IFRS 16 adjustment is
calculated as a difference between depreciation on right-of-use
("ROU") assets and operating lease payments.
2023 2022 2022
Six months Six months Year ended
ended 30 June ended 30 June 31 December
GBPm* GBPm GBPm*
Underlying operating profit 14.0 11.4 26.4
Depreciation and amortisation 20.8 19.8 40.3
Less: Depreciation on right-of-use
assets (8.2) (5.9) (12.2)
Amortisation of acquired
intangibles (0.5) (1.1) (2.1)
IFRS 16 impact removed 0.9 2.8 0.2
-------------
Covenant EBITDA 27.0 27.0 52.6
--------------- --------------- -------------
*Excludes discontinued operations.
3.3 Leverage
Leverage is calculated in line with the Group's banking
covenants. It is defined as Covenant EBITDA divided by underlying
net borrowings. Underlying net borrowings is net borrowings as set
out in Note 12, including guarantees and excluding right-of-use
operating leases, which are the leases which would be considered
operating leases under IAS17, prior to the introduction of IFRS16.
Guarantees are those issued by a bank or financial institution to
compensate a stakeholder in the event of a Group company not
fulfilling its obligations in the ordinary course of business in
relation to either advance payments or trade debtors.
2023 2022 2022
Six months Six months Year ended
ended 30 June ended 30 June 31 December
GBPm GBPm GBPm
Net borrowings (Note 12) 203.5 205.5 185.8
Guarantees 1.6 5.2 2.3
Less: right-of-use operating
leases (50.6) (38.3) (46.0)
--------------- --------------- -------------
Underlying Net borrowings 154.5 172.4 142.1
--------------- --------------- -------------
Covenant EBITDA (12 months) 55.4 53.0 52.6
Leverage 2.8 3.3 2.7
--------------- --------------- -------------
3.4 Underlying Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use
assets, less cash and cash equivalents and after adding back
borrowings. Average capital employed is adjusted for the timing of
businesses acquired and after adding back cumulative amortisation
of customer relationships. Segmental ROCE is defined as the
underlying operating profit, divided by average capital employed.
Group ROCE, is defined as underlying operating profit, less
notional tax, calculated by multiplying the underlying effective
tax rate by the underlying operating profit, divided by average
capital employed, as calculated below. Group ROCE is a KPI that is
used internally and externally and forms part of performance
conditions under the Group's LTIP scheme.
2023 2022 2022
Six months Six months Year ended
ended 30 June ended 30 June 31 December
GBPm GBPm GBPm
Net assets 200.1 225.4 218.3
Less right-of-use assets (61.6) (39.5) (52.3)
Plus net borrowings 203.5 205.5 185.8
---------------
Capital employed 342.0 391.4 351.7
Add: amortisation of customer
relationships 0.5 0.8 1.7
342.5 392.2 353.4
--------------- --------------- -------------
Underlying operating profit* 13.6 9.5 19.1
Notional tax at the underlying
effective tax rate (3.7) (2.7) (5.1)
9.9 6.8 14.0
Average capital employed 367.3 409.0 355.1
Return on average capital
employed 4.7% 2.7% 3.9%
--------------- --------------- -------------
*June 2023 Underlying operating profit excludes GBP2.1m costs of
disposal and a GBP4.0m provision for a parent company guarantee
(see Note 14).
The three divisional ROCE's are detailed below:
Six months ended 30 June 2023 Maritime
Energy Defence transport
GBPm GBPm GBPm
Net assets 175.2 88.9 87.7
Less right-of-use assets (8.3) (2.5) (49.9)
Plus net borrowings 11.8 2.6 40.6
------- -------- ----------
Capital employed 178.7 89.0 78.4
Add: amortisation of customer relationships 0.3 - 0.2
179.0 89.0 78.6
------- -------- ----------
Underlying operating profit 15.2 1.6 20.1
Average capital employed 184.9 93.0 83.6
Return on average capital employed 8.2% 1.8% 24.1%
------- -------- ----------
Six months ended 30 June 2022 Maritime
Energy Defence transport
GBPm GBPm GBPm
Net assets 185.1 96.6 87.3
Less right-of-use assets (10.3) (3.5) (22.7)
Plus net borrowings 15.0 3.7 23.7
------- -------- ----------
Capital employed 189.8 96.8 88.3
Add: amortisation of customer relationships 0.6 - 0.2
190.4 96.8 88.5
------- -------- ----------
Underlying operating profit 13.0 2.4 13.2
Average capital employed 206.9 94.3 88.8
Return on average capital employed 6.3% 2.6% 14.9%
------- -------- ----------
Year ended 31 December 2022 Maritime
Energy Defence transport
GBPm GBPm GBPm
Net assets 172.4 84.9 82.7
Less right-of-use assets (9.3) (3.0) (39.0)
Plus net borrowings 13.4 3.3 34.8
------- -------- ----------
Capital employed 176.5 85.2 78.5
Add: amortisation of customer relationships 1.1 0.1 0.4
177.6 85.3 78.9
------- -------- ----------
Underlying operating profit 13.9 (0.4) 18.8
Average capital employed 173.6 84.7 83.2
Return on average capital employed 8.0% (0.4)% 22.5%
------- -------- ----------
3.5 Interest cover
Interest cover is calculated in line with the Group's banking
covenants. It is defined as a ratio of underlying net operating
profit, adjusted for the IFRS 16 impact, to covenant interest.
2023 2022 2022
Six months Six months Year ended
ended 30 June ended 30 June 31 December
GBPm GBPm GBPm
Interest payable on bank loans
less interest receivable on
short-term deposits less 6.3 3.6 8.1
Finance lease interest 0.1 - 0.1
Arrangement fees (1.2) (0.5) (1.0)
--------------- --------------- -------------
Covenant interest 5.2 3.1 7.2
--------------- --------------- -------------
Underlying net operating profit* 14.0 11.4 26.4
IFRS 16 impact removed 0.7 2.3 (0.7)
14.7 13.7 25.7
--------------- --------------- -------------
Interest cover 3.2 4.5 3.5
--------------- --------------- -------------
*Excludes discontinued operations.
3.6 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total
of underlying profit before tax, less income tax, but excluding the
tax impact on adjusting items, less profit attributable to
non-controlling interests, divided by the weighted average number
of ordinary shares in issue during the year. Underlying earnings
per share is a performance condition used for the LTIP schemes.
2023 2022 2022
Six months Six months
ended 30 ended 30 Year ended
June June 31 December
Loss attributable to owners of
the Company (GBPm) (9.6) 1.9 (11.1)
Adjusting items (GBPm)* 16.9 1.6 1.7
Tax on adjusting items (GBPm) (2.9) (0.2) 0.8
Underlying profit attributable
to owners of the Company (GBPm) 4.4 3.3 (8.6)
----------- ----------- -------------
Basic weighted average number of
shares (Note 8) 50,347,663 50,344,286 50,345,989
Diluted weighted average number
of shares (Note 8) 50,347,663 50,344,286 50,367,147
Underlying basic earnings per share
(p) 8.7 6.7 (17.1)
Underlying diluted earnings per
share (p) 8.7 6.7 (17.1)
*June 2023 adjusting items include GBP2.1m costs of disposal and
a GBP4.0m provision for a parent company guarantee (see Note
14).
4 Segmental information
From 1 January 2023, the Group has reorganised as from 1 January
2023 into three divisions, representing the key markets within
which the Group operates, namely: Energy, Defence, and Maritime
Transport. The Energy division combines the division that used to
be called Marine Support and Offshore Oil divisions, without
Fendercare, which is added to the Tankships division to create
Maritime Transport. JFD is the only component of the Defence
division. The comparative segmental information for 2022 has been
restated accordingly.
The Board assesses the performance of the segments based on
underlying operating profit. The Board believes that such
information is the most relevant in evaluating the results of
certain segments relative to other entities which operate within
these industries. Inter-segmental sales are made using prices
determined on an arms-length basis. Sector assets exclude cash,
short-term deposits and corporate assets that cannot reasonably be
allocated to operating segments. Sector liabilities exclude
borrowings, retirement benefit obligations and corporate
liabilities that cannot reasonably be allocated to operating
segments.
Six months ended 30 June
2023
Maritime
Energy Defence transport Corporate Continuing Discontinued
Total Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue
reported 134.0 37.1 81.0 - 252.1 6.8 258.9
Inter-segmental
sales - (0.1) - - (0.1) (0.1) (0.2)
134.0 37.0 81.0 - 252.0 6.7 258.7
======= ======== =========== ========== =========== ============= ========
Underlying operating
profit/(loss) 7.5 0.6 10.0 (4.1) 14.0 (6.5) 7.5
APMs (see Note
3) (0.6) 0.1 - (10.3) (10.8) - (10.8)
------- -------- ----------- ---------- ----------- ------------- --------
Operating
profit/(loss) 6.9 0.7 10.0 (14.4) 3.2 (6.5) (3.3)
Finance income 1.1
Finance expense (8.7)
--------
Loss before tax (10.9)
Income tax 1.3
Loss for the period (9.6)
========
Assets & liabilities
Segmental assets 253.8 110.9 161.1 102.1 627.9 - 627.9
Investment in joint
ventures 2.5 3.6 2.4 - 8.5 - 8.5
------- -------- ----------- ---------- ----------- ------------- --------
Total assets 256.3 114.5 163.5 102.1 636.4 - 636.4
Segmental liabilities (81.1) (25.6) (75.8) (253.8) (436.3) - (436.3)
175.2 88.9 87.7 (151.7) 200.1 - 200.1
======= ======== =========== ========== =========== ============= ========
Other segmental
information
Capital expenditure 13.0 0.7 2.5 0.2 16.4 - 16.4
Depreciation and
amortisation 8.8 2.0 9.7 0.3 20.8 - 20.8
======= ======== =========== ========== =========== ============= ========
Six months ended 30 June
2022
Maritime
Energy Defence transport Corporate Continuing Discontinued Total
Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue
reported 106.3 32.6 76.3 - 215.2 24.0 239.2
Inter-segmental
sales (0.2) - - - (0.2) (0.6) (0.8)
106.1 32.6 76.3 - 215.0 23.4 238.4
======= ======== =========== ========== =========== ============= ========
Underlying operating
profit reported 6.2 (1.3) 8.4 (1.9) 11.4 (1.9) 9.5
APMs (see Note
3) (0.8) - 0.7 (1.5) (1.6) - (1.6)
Operating profit 5.4 (1.3) 9.1 (3.4) 9.8 (1.9) 7.9
Finance income 0.2
Finance expense (4.9)
Profit before tax 3.2
Income tax (1.2)
Profit for the
period 2.0
========
Assets & liabilities
Segmental assets 270.5 118.5 142.0 65.6 596.6 27.2 623.8
Investment in joint
ventures 3.0 3.9 2.7 - 9.6 - 9.6
------- -------- ----------- ---------- ----------- ------------- --------
Total assets 273.5 122.4 144.7 65.6 606.2 27.2 633.4
Segmental liabilities (88.2) (25.8) (57.4) (220.4) (391.8) (16.2) (408.0)
185.3 96.6 87.3 (154.8) 214.4 11.0 225.4
======= ======== =========== ========== =========== ============= ========
Other segment
information
Capital expenditure 4.2 1.4 4.3 - 9.9 0.2 10.1
Depreciation and
amortisation 9.7 2.6 7.3 0.2 19.8 0.6 20.4
======= ======== =========== ========== =========== ============= ========
Year ended 31 December 2022
Maritime
Energy Defence transport Corporate Continuing Discontinued Total
Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Segmental revenue
reported 242.8 68.3 167.3 - 478.4 43.9 522.3
Inter-segmental
sales (0.2) (0.1) - - (0.3) (1.1) (1.4)
242.6 68.2 167.3 - 478.1 42.8 520.9
======= ======== =========== ========== =========== ============= ========
Underlying operating
profit/(loss) 13.9 (0.4) 18.8 (5.9) 26.4 (7.3) 19.1
APMs (see Note
3) 2.5 (3.1) 0.4 (1.5) (1.7) (13.3) (15.0)
------- -------- ----------- ---------- ----------- ------------- --------
Operating
(loss)/profit 16.4 (3.5) 19.2 (7.4) 24.7 (20.6) 4.1
Finance income 0.7 - 0.7
Finance expense (10.9) - (10.9)
------------- --------
Loss before tax 14.5 (20.6) (6.2)
Income tax (5.5) 0.8 (4.7)
----------- -------------
Loss for the year 9.0 (19.8) (10.8)
=========== ============= ========
Assets & liabilities
Segmental assets 250.8 114.5 155.1 63.6 584.0 16.3 600.3
Investment in joint
ventures 3.0 3.4 2.3 - 8.7 - 8.7
------- -------- ----------- ---------- ----------- ------------- --------
Total assets 253.8 117.9 157.4 63.6 592.7 16.3 609.0
Segmental liabilities (81.4) (33.0) (74.6) (185.4) (374.4) (16.3) (390.7)
172.4 84.9 82.8 (121.8) 218.3 - 218.3
======= ======== =========== ========== =========== ============= ========
Other segment
information
Capital expenditure 14.2 4.4 8.5 - 27.1 0.3 27.4
Depreciation and
amortisation 19.5 5.3 15.1 0.4 40.3 0.8 41.1
======= ======== =========== ========== =========== ============= ========
5 Discontinued operations
In December 2022, management agreed a plan to sell the Nuclear
business as a result of a strategic decision to rationalise and
focus the portfolio within the Specialist Technical division. At 31
December, the business has been classified as held for sale and is
part of a single co-ordinated plan to dispose of a separate major
line of business. It is classified as a discontinued operation.
2023 2022 2022
Six months Six months
ended 30 ended 30 Year ended
June June 31 December
GBPm GBPm GBPm
Revenue 6.8 24.0 43.9
Inter-segmental sales (0.1) (0.6) (1.1)
----------- ----------- -------------
6.7 23.4 42.8
Expenses (13.2) (25.4) (50.1)
----------- ----------- -------------
Loss before taxation (6.5) (2.0) (7.3)
Income tax 0.1 0.4 0.8
----------- ----------- -------------
Loss from operating activities
after tax (6.4) (1.6) (6.5)
Loss on remeasurement to fair value
less costs to sell - - (13.3)
Loss for the period from discontinued
operations (6.4) (1.6) (19.8)
=========== =========== =============
Attributable to:
Owners of the Company (6.4) (1.6) (19.8)
Non-controlling interests - - -
(6.4) (1.6) (19.8)
=========== =========== =============
2023 2022 2022
Six months Six months
Cash flows (used in)/from discontinued ended 30 ended 30 Year ended
operations June June 31 December
GBPm GBPm GBPm
Net cash from operating activities (0.4) 0.7 (3.1)
Net cash from investing activities - (0.7) (5.0)
Net cash from financing activities - - -
Net cash flows for the period (0.4) - (8.1)
=========== =========== =============
On 3 March 2023, the Group announced that the entire share
capital of James Fisher Nuclear Holdings Limited and related
properties were sold to Myneration Limited, a wholly-owned
investment vehicle of Rcapital Partners LLP for a consideration of
GBP3. The Group has retained certain parent company guarantees
which historically were given to support the obligations of
JFN.
2023
Six months ended
30 June
Consideration received -
Net liabilities disposed (0.1)
Costs in relation to businesses sold (2.0)
-----------------
Loss on disposal (2.1)
-----------------
Cash flow from the disposal of businesses
Cash received -
Cash and cash equivalents disposed -
Costs in relation to businesses sold (3.2)
-----------------
(3.2)
-----------------
6 Net finance expense
2023 2022 2022
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Finance income:
Interest receivable on short-term
deposits 1.0 0.2 0.7
Net interest on pension surplus/(obligations) 0.1 - -
----------- ----------- ------------
1.1 0.2 0.7
----------- ----------- ------------
Finance expense:
Interest payable on bank loans
and overdrafts* (7.3) (3.8) (8.8)
Unwind of discount on right-of-use
lease liability (1.4) (1.0) (2.1)
----------- ----------- ------------
(8.7) (4.8) (10.9)
Net finance expense (7.6) (4.6) (10.2)
=========== =========== ============
*Includes impact of increased interest rates. In June 2023, the
Company completed refinancing which accelerated the recognition of
GBP0.7m unamortised arrangement fees.
7 Taxation
The Group's effective rate on profit before income tax is 27.3%
(30 June 2022: 30.6%, 31 December 2022: 37.9%) which includes an
exceptional tax credit of GBP2.9m as detailed in Note 3. The
effective income tax rate on underlying profit before income tax,
based on an estimated rate for the year ending 31 December 2023, is
27.2% (30 June 2022: 28.4%, 31 December 2022: 28.4%). Of the total
tax charge, GBP3.9m relates to overseas businesses (30 June 2022:
GBP0.8m). Taxation on profit has been estimated based on rates of
taxation applied to the profits forecast for the full year.
8 Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year, after
excluding 47,855 (June 2022:47,855, December 2022: 47,855) ordinary
shares held by the James Fisher and Sons plc Employee Share
Ownership Trust (ESOT), as treasury shares. Diluted earnings per
share are calculated by dividing the net profit attributable to
ordinary equity holders of the Company by the weighted average
number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares.
The average market value of the Company's shares for purposes of
calculating the dilutive effect of share options was based on
quoted market prices for the period during which the options were
outstanding.
At 30 June 2023, 3,168,869 options (June 2022: 2,180,603,
December 2022:1,759,740) were excluded from the diluted weighted
average number of ordinary shares calculation as their effect would
be anti-dilutive.
Weighted average number of shares
30 June 30 June 31 December
2023 2023 2022
Number of Number of Number of
shares shares shares
For basic earnings per ordinary
share 50,347,663 50,344,286 50,345,989
Exercise of share options
and LTIPs - - 21,158
For diluted earnings per
ordinary share 50,347,663 50,344,286 50,367,147
=========== =========== ============
(Loss)/earnings per share pence pence pence
Basic earnings per share (19.0) 3.7 (22.1)
Diluted earnings per share (19.0) 3.7 (22.1)
(Loss)/earnings per share - continuing pence pence pence
operations
Basic earnings per share (6.3) 6.9 17.4
Diluted earnings per share (6.3) 6.9 17.4
------- ------ -------
(Loss)/earnings per share - discontinued pence pence pence
operations
Basic earnings per share (12.7) (3.2) (39.5)
Diluted earnings per share (12.7) (3.2) (39.5)
------- ------ -------
9 Interim dividend
No interim dividend is proposed in respect of the period ended
30 June 2023 (2022: nil).
10 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Net obligation as at 1 January 5.1 (1.9) (1.9)
Expense recognised in the income
statement (0.2) (1.6) (2.2)
Contributions paid to scheme 1.0 1.0 2.1
Remeasurement gains and losses (1.1) 7.6 7.1
At period end 4.8 5.1 5.1
=========== =========== ============
The Group's net surplus/(deficit) in respect of its pension
schemes were as follows:
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
Shore Staff 5.3 5.8 5.5
Merchant Navy Officers Pension
Fund (0.3) (0.7) (0.4)
Merchant Navy Ratings Pension Fund (0.2) - -
4.8 5.1 5.1
=========== =========== ============
The principal assumptions in respect of these liabilities are
disclosed in the December 2022 Annual Report. The Group has not
obtained an interim valuation for the period ended 30 June 2023. In
the first half of 2023, the Group paid contributions to defined
benefit schemes of GBP1.0m (June 2022: GBP1.0m).
The Shore staff plan assets and obligations have been updated to
30 June 2023 resulting in a surplus being recognised. A surplus,
when calculated on an accounting basis, is recognised when the
Group can realise the economic benefit at some point during the
life of the plan or when the plan liabilities are all settled and
there are no remaining beneficiaries. Based on a review of the
plan's governing documentation, the Company has a right to a refund
of surplus assuming the gradual settlement of the plan liabilities
over time until all members have left. The Directors therefore take
the view that it is appropriate to recognise the surplus.
In 2018, the Trustees became aware of historic legal
uncertainties relating to changes to ill-health early retirement
benefits payable from the MNRPF. In order to resolve the issue the
Trustee sought directions from the Court, and in February 2022, the
High Court approved a settlement in principle.
During the year ended 31 December 2022, a GBP1.5m past service
cost has been recognised within administrative expenses relating to
the Group's share of additional liabilities which have been
estimated to date.
11 Goodwill
Movements during the period in the Group's goodwill are set out
below:
2023 2022 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
GBPm GBPm GBPm
At 1 January 116.3 133.5 133.5
Impairment - - (4.4)
Disposals - - (7.1)
Discontinued operations - - (8.1)
Exchange differences (3.8) 1.6 2.4
At period end 112.5 135.1 116.3
=========== =========== ============
At the half year, the results of the impairment tests carried
out in respect of the year ended 31 December 2022, were updated
based on the Group's trading performance and revised outlooks.
In 2022, the Group saw projects in subsea operations being
deferred or cancelled, leading to a reduction in profitability. As
a result, the impairment loss was recognised in relation to a CGU
within the Energy division with a charge of GBP4.4m recognised in
other expenses, resulting in zero goodwill being recognised in
respect of that CGU.
Key assumptions
The recoverable amount is based on a value-in-use calculation,
which is determined by performing discounted future post-tax cash
flow calculations for a five-year period and projected into
perpetuity. The five-year cashflow forecasts are based on the
latest forecast for the current year (year one) and the strategic
business plans for years two to five. The five-year revenue growth
rate is calculated as cumulative average growth rate over five
years and is derived from the five-year plan which is prepared by
management, and is reviewed and approved by the Board. The
five-year plan reflects past experience, management's assessment of
the current contract portfolio, contract wins, contract retention,
price increases, as well as future expected market trends
(including the impact of climate change, where relevant), adjusted
to meet the requirements of IAS 36 Impairment of Assets.
Cash flows beyond year five are projected into perpetuity using
a long-term terminal growth rate in line with management's
long-term expectations for the prevailing rates of inflation.
The cash flows are discounted at a post-tax discount rate which
is based on the Group's weighted average cost of capital adjusted
for CGUs' specific country risk and business risk.
Sensitivity to impairment
The value-in-use calculations were assessed for sensitivity to
reasonably possible changes to assumptions. Sensitivities carried
out across all CGUs included increasing the discount rate by 2%,
combination of increasing the discount rate by 2% and reducing
operating profit by 10%, reducing the terminal growth to zero and
reducing operating profit by 10%.
None of the CGUs with significant goodwill balances were
identified as having a high risk of impairment and showed positive
headroom in all of the scenarios. The sensitivities identified that
the headroom is most sensitive to changes in the operating profit,
which would need to be decreased by 27% for Fendercare, 33% for JFD
and 26% for Scantech to give rise to a goodwill impairment in these
CGUs and this is not considered a reasonably possible change.
An additional sensitivity was run on JFD to reflect the removal
of a large unsecured contract in 2024 and 2025. Positive headroom
remained under this scenario.
For one CGU without significant goodwill, the sensitivities
identified that the headroom is most sensitive to changes in the
operating profit, which would need to reduce by 1% to give rise to
a goodwill impairment in respect of this CGU. As at June 23, the
business has shown strong performance and was ahead of its budget
and forecast. Given the strong performance for this GCU and
increased latest forecast profitability for the full year we do not
consider there to be an impairment of the goodwill associated with
this CGU.
All other CGU's without significant goodwill show no impairment
under any of the scenarios.
12 Reconciliation of net borrowings
1 January Cash Other Exchange 30 June
2023 flow non-cash Disposals movement 2023
GBPm GBPm GBPm GBPm GBPm GBPm
Cash and cash
equivalents 22.8 (2.3) - - (0.7) 19.8
Cash - classified
within Assets held
for sale 2.8 - - (2.8) - -
Debt due after
1 year (121.9) (44.0) (1.1) - - (167.0)
Debt due within
1 year (36.6) 36.6 - - - -
---------- ------- --------- ----------- ----------- ------------
(158.5) (7.4) (1.1) - - (167.0)
Lease liabilities (52.9) 8.5 (15.1) - 3.2 (56.3)
Net borrowings (185.8) (1.2) (16.2) (2.8) 2.5 (203.5)
========== ======= ========= =========== =========== ============
1 January Cash Other Exchange 30 June
2022 flow non-cash Transfers movement 2022
GBPm GBPm GBPm GBPm GBPm GBPm
Cash and cash
equivalents 34.5 (25.2) - - 1.8 11.1
Debt due after
1 year (174.0) 3.9 (0.5) - - (170.6)
Debt due within
1 year (0.1) 0.1 - - - -
---------- ------- --------- ----------- ----------- ------------
(174.1) 4.0 (0.5) - - (170.6)
Lease liabilities (46.0) 7.0 (3.8) - (3.2) (46.0)
Net borrowings (185.6) (14.2) (4.3) - (1.4) (205.5)
========== ======= ========= =========== =========== ============
1 January Cash Other Exchange 31 December
2022 flow non-cash Transfers movement 2022
GBPm GBPm GBPm GBPm GBPm GBPm
Cash and cash
equivalents 34.5 (11.4) - (2.8) 2.5 22.8
Cash - classified
within Assets
held for sale - - - 2.8 - 2.8
Debt due after
1 year (174.0) 16.6 (1.0) 36.5 - (121.9)
Debt due within
1 year (0.1) - - (36.5) - (36.6)
---------- ------- --------- ----------- ----------- ------------
(174.1) 16.6 (1.0) - - (158.5)
Lease liabilities (46.0) 14.5 (17.8) - (3.6) (52.9)
Net borrowings (185.6) 19.7 (18.8) - (1.1) (185.8)
========== ======= ========= =========== =========== ============
Cash and cash equivalents comprise: 2023 2022 2022
Six months Six months
ended ended Year ended
30 June 30 June 31 December
GBPm GBPm GBPm
Cash at bank
and in hand 90.3 53.8 53.6
Overdrafts (70.5) (42.7) (30.8)
19.8 11.1 22.8
=========== =========== ============
Revolving credit facilities - refinancing
On 7 June 2023, the Group announced that it has signed its new
revolving credit facility. The Group's new GBP210m secured
revolving credit facility, which matures in March 2025 (the "RCF"),
has been provided by its six existing lenders.
The key terms of the new facility agreement are:
- Maturity date: 31 March 2025.
- Net debt/EBITDA covenant (measured quarterly): 3.5x for 30
June and 30 September 2023, 3.25x for 31 December 2023, 3.0x for 31
March 2024, 2.75x for 30 June 2024 and 2.5x thereafter.
- Interest cover covenant (measured quarterly): 2.5x in June and
September 2023, 1.75x in December 2023 and March 2024, 2x in June
and September 2024, 2.5x in December 2023 and 2.75x in March
2025.
- Scheduled amortisation of: GBP15m on 30 September 2023, GBP10m
on 31 December 2023 and GBP10m on 30 June 2024.
- Minimum liquidity requirement: GBP10m.
During the period, GBP2.1m facility fees were paid and have been
included in the loan liability. GBP1.1m other non-cash movement
includes accelerated recognition of GBP0.7m unamortised arrangement
fees.
The refinancing of the existing revolving credit facilities and
the terms of the new agreement indicate a significant modification
of the liability, resulting in the extinguishment of the existing
liability and recognition of the associated legal and advisory
costs of GBP9.3m, excluding any facility fees, in administrative
expenses, in line with IFRS 9.
13 Assets and liabilities held for sale
At 30 June 2023, the GBP2.2m assets held for sale comprises
GBP1.4m related to land and building for a business within the
Defence division and GBP0.8m related to a vessel known as M22
within the Energy division. During July the vessel was sold for
USD1.4m.
Year ended 31 December 2022
At 31 December 2022, management agreed a plan to sell the
Nuclear business as a result of a strategic decision to rationalise
and focus the portfolio within the Specialist Technical division.
At 31 December, the business was classified as held for sale. The
disposal group was stated at fair value less costs to sell and
comprised the following assets and liabilities:
2022
Year ended
31 December
GBPm
Property, plant and equipment 2.3
Inventories 0.7
Trade and other receivables 10.5
Cash and cash equivalents 2.8
-----------
Assets held for sale 16.3
-----------
Trade and other payables (13.7)
Lease liabilities (2.2)
Taxation (0.3)
-----------
Liabilities associated with assets held for sale (16.3)
-----------
On transfer of assets to held for sale a GBP13.3m loss was
recognised on remeasurement to fair value less cost to sell,
consisting of impairments of goodwill (GBP8.1m), property, plant
and equipment (GBP3.9m) and anticipated costs of disposal
(GBP1.3m).
The non-recurring fair value measurement for the disposal group
before GBP1.3m costs to sell has been categorised as a Level 3 fair
value based on the present value of cash flows.
At 31 December 2022, the Dive Support Vessel (DSV) known as the
Swordfish within the Energy division was classified as held for
sale. During January 2023, the vessel was sold for GBP18.4m being
proceeds less selling costs.
At 31 December 2022, a GBP5.4m reversal of impairment loss has
been recorded in cost of sales.
At 31 December 2022, GBP1.5m assets relates to land and
buildings for a business within the Defence division.
14 Provisions
Cost of material
litigation Warranty Other Total
GBPm GBPm GBPm GBPm
At 1 January 2023 2.0 2.4 2.3 6.7
Provided during
the period - (0.1) 6.3 6.2
At 30 June 2023 2.0 2.3 8.6 12.9
================= ========= ====== ======
Provisions due within one year were GBP11.5m (30 June 2022:
GBP2.0m and 31 December 2022: GBP5.3m) and provisions due greater
than one year were GBP1.4m (30 June 2022: GBP1.3m and 31 December
2022: GBP1.4m).
Following the sale of James Fisher Nuclear Limited (JFN) on 3
March 2023 (see Note 5) a limited number of performance guarantees
covering an event of default by JFN in performing its contractual
duties and obligations remained within the Group. As at 30 June
2023 a provision of GBP4.0m has been recognised reflecting
management's best estimate at the balance sheet date of the
expenditure required to settle or transfer one performance
guarantee, based on negotiations that were ongoing at the balance
sheet date and that were not ultimately concluded. Subsequent to
the period end JFN entered administration on 9 August 2023. To
date, the Group has not received details of any claims under these
performance guarantees and the guarantees remain with the Group.
The Directors are therefore unable to reasonably estimate a range
of possible outcomes or the timing of any outflow. Any amounts that
are claimed in the future and ultimately settled could be
materially different from the amount provided as at 30 June
2023.
An onerous contract provision of GBP1.7m relating to one of the
seasonal vessel charters entered into by the Inspection, Repairs
and Maintenance product line within the Energy Division, was
recognised as the vessel remained idle for several weeks during
June 2023 and is now anticipated to generate an overall loss over
the period of its rental. The provision is expected to unwind over
the second half of 2023.
15 Commitments and contingent liabilities
Capital commitments at 30 June 2023 were GBP4.1m (30 June 2022:
GBP1.6m; 31 December 2022: GBP6.0m).
Contingent liabilities
(a) In the ordinary course of the Company's business, counter
indemnities have been given to banks in respect of custom bonds,
foreign exchange commitments and bank guarantees.
(b) Subsidiaries of the Group have issued performance and
payment guarantees to third parties with a total value of GBP26.8m
(30 June 2022: GBP33.0m, 31 December 2022: GBP28.3m).
(c) The Group is liable for further contributions in the future
to the MNOPF and MNRPF if additional actuarial deficits arise or if
other employers liable for contributions are not able to pay their
share. The Group and Company remains jointly and severally liable
for any future shortfall in recovery of the MNOPF deficit.
(d) The Company and its subsidiaries may be parties to legal
proceedings and claims which arise in the ordinary course of
business, and can be material in value. Disclosure of contingent
liabilities or appropriate provision has been made in these
accounts where, in the opinion of the Directors, liabilities may
materialise. Other than provisions made against foreign offset
agreements, described in Note 34 of the last filed annual report,
there are no other significant provisions and no individually
significant contingent liabilities that required specific
disclosure.
(e) The Group operates and has overseas investments in
multinational and less developed markets which presents increased
operational and financial risk in complying with regulation and
legislation and where local practices in those markets may be
inconsistent with laws and regulations that govern the Group. Given
this risk, from time to time matters are raised and investigated
regarding potential non-compliance with the legal and regulatory
framework applicable to the Group.
In preparing the financial statements, judgements and estimates
were required to be made in respect of such potential regulatory
matters. The Directors' judgement, relying on the findings of an
independent audit as well as the Group's own investigations, is
that the likelihood of adverse findings against the Company in
respect of such matters is not probable albeit possible, and no
provision has been included in the financial statements of the
Group.
In the normal course of business, the Company and certain
subsidiaries have given parental and subsidiary guarantees in
support of loan and banking arrangements and the following:
-- A guarantee has been issued by the Group and Company to
charter parties in respect of obligations of a subsidiary, James
Fisher Everard Limited, in respect of charters relating to eleven
vessels. The charters expire between 2023 and 2032.
-- The Group has given an unlimited performance guarantee to the
Singapore Navy in the event of default by First Response Marine Pte
Ltd (its Singapore joint venture), in providing submarine rescue
and related services under its contract.
There have been no amounts recognised during the year in
relation to these guarantees.
16 Related parties
There were no changes to related parties or the nature of
associated transactions from those disclosed in the Annual Report
for the year ended 31 December 2022.
17 Post balance sheet events
In July 2023, the Group's subsidiary Deep Sea Technical Support
Services LLC, incorporated in Saudi Arabia, sold a M22 Tug vessel
for consideration of USD 1.4m (GBP1.1m).
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END
IR URVUROUUKUUR
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