James Fisher and Sons plc
Preliminary results for the year ended 31 December
2023
16 April 2024
James Fisher and Sons plc (FSJ.L)
('James Fisher', 'the Group'), the leading marine service provider,
announces its results for the year ended 31 December
2023.
Continued progress on deleveraging and turnaround
plans
• Underlying
results ahead of last year with underlying profit growth across all
three Divisions
•
Transformation programme driven by the three themes of 'focus,
simplify and deliver' making good early progress
• New
Executive Committee embedded, driving accountability for financial
and operational performance
• Made good
progress on our 2023 priorities which focus on improving safety,
project management, employee engagement and financial
performance
• Steps
taken to strengthen the Group's financial position with the agreed
sale of RMSpumptools for £90m
|
Continuing operations
|
Underlying results1
|
Reported results
|
|
|
Year
ended 31 December
|
Year
ended 31 December
|
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Revenue (£m)
|
496.2
|
478.1
|
3.8%
|
496.2
|
478.1
|
3.8%
|
|
Operating profit/(loss)
(£m)
|
29.6
|
26.4
|
12.1%
|
(18.6)
|
24.7
|
n/m
|
|
Profit/(loss) before tax
(£m)
|
8.3
|
16.2
|
(48.8)%
|
(39.9)
|
14.5
|
n/m
|
|
Profit/(loss) for the year
(£m)
|
2.3
|
11.5
|
(80.0)%
|
(50.9)
|
9.0
|
n/m
|
|
|
|
|
|
|
|
|
|
Operating margin
|
6.0%
|
5.5%
|
50 bps
|
(3.7%)
|
5.2%
|
(890) bps
|
|
Return on capital
employed
|
6.6%
|
5.3%
|
130
bps
|
|
|
|
|
Net debt - covenant
basis
|
149.8
|
142.1
|
5.4%
|
|
|
|
|
Earnings/(loss) per
share
|
11.4
|
22.3
|
(48.9)%
|
(101.2)
|
17.4
|
n/m
|
Financial highlights
• Revenue up
3.8% to £496.2m driven by 9.9% revenue growth in the Energy
Division
• Underlying
operating profit from continuing operations up 12.1% with growth in
all three Divisions
• 50 bps
improvement in operating margin from continuing
operations
• ROCE
increased 130bps driven by underlying profitability and a focus on
capital discipline
• Investment
in a new management team, strengthening the compliance environment
and commercial excellence to deliver efficiencies and improved
business performance has increased corporate costs from £5.9m in
2022 to £10.9m
• Reported
operating loss before tax of £39.9m reflecting goodwill impairments
of £28.0m (predominantly in the Defence division), restructuring
charges of £5.7m and refinancing costs of £12.2m
• Net debt
(for covenant purposes) at £149.8m - net debt to EBITDA at
2.75x
Strategic highlights
• Embedded
our One James Fisher business model, with new Divisional structures
and Executive Team in place
•
Rationalised our portfolio, divested JF Nuclear and closed Subtech
Europe
• Sale of
RMSpumptools, announced in March 2024, will significantly reduce
debt and strengthen the Group's financial position bringing,
enabling us to move towards a Net Debt / EBITDA range of 1.0-1.5x;
expected to complete at the beginning of H2 2024
• Invested
in compressors to support Bubble Curtain technologies in expanding
offshore wind constructions services
• Business
Excellence embedded within the Group, delivering strong results
against the key company priorities
• Global
talent development programme launched to leverage talent
acquisition and enhance career development
Jean Vernet, Chief Executive Officer,
commented:
"We are now one year into our
transformation programme to build a stronger, more cohesive
company. Despite a number of challenges early in the year, we
have made good initial progress in building our leadership team,
implementing our new operating model and deploying our focus and
simplification agenda.
This includes significant progress
to focus the Group's portfolio around our core as an engineering
services company, operating in the Blue Economy. We have
divested non-core businesses, and more recently, announced the sale
of RMSpumptools, which will significantly reduce our debt and
create a stronger financial foundation for growth.
I am proud of what we are
achieving through Business Excellence. We are driving a step change
in our safety culture, delivering greater efficiency through the
deployment of Lean Six Sigma across our Product Lines, and we are
launching a Project Management Office to improve operational
execution. These initiatives will underpin our operational and
financial performance and enable our Divisions to deliver the very
best service to our customers.
In the current financial year to
date, the Group's overall performance has been in line with the
Boards's expectations, building on our early-stage progress in
2023. Looking forward, we continue to see supportive end markets in
2024 in the majority of our businesses and would also expect to
deliver further benefits from our turnaround
initiatives."
For further
information:
|
James Fisher & Sons
plc
|
Jean Vernet
Karen Hayzen-Smith
|
Chief Executive Officer
Chief Financial Officer
|
020 7614 9503
|
|
FTI Consulting
|
Richard Mountain
Susanne Yule
|
|
0203 727 1340
|
1 The Group uses a number of
alternative (non-Generally Accepted Accounting Practice (non-GAAP))
performance measures (APMs) which are not defined within IFRS. The
APMs should be considered in addition to and not as a substitute
for 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 APMs are described more fully and
reconciled to GAAP performance measures in Note 2 of the financial
statements
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.
Chief Executive's statement
A year ago, we launched a
transformation programme that would move James Fisher from a
portfolio of individual businesses to a stronger, more cohesive
company. This turnaround is expected to take between two to three
years and be driven by three themes: Focus, Simplify and
Deliver.
To achieve focus, we have regrouped around our
core as an engineering service company operating in the Blue
Economy.
To simplify the business, we have
reorganised James Fisher around three Divisions, aligned to the
customer market verticals of Energy, Defence, and Maritime
Transport led by the new Executive Team. Each Divisional Head has
been given the responsibility to streamline reporting structures,
standardise processes and practices and share Group resources.
Divisions are now divided into Product Lines (PLs) and positioned
as experts in their particular domain.
Our delivery is driven by a culture of
accountability, with PLs in charge of meeting their underlying
operating profit (UOP) and return on capital employed (ROCE)
targets. Each business must earn its cost of capital, either by
fixing the business model if they currently underperform, or by
accelerating profitable growth if they are already above hurdle
rates.
We established a Business
Excellence Function and have driven standardisation across the
Group, deployed through the common language of Lean Six Sigma and
applied change management to deliver our 2023 priorities. These
were to improve our safety, forecasting (through the deployment of
project management), cash collection and employee
engagement.
With much of this important work
underway, it is clear that the Company has growth potential, but
our focus needs to remain centred on delivering against our
turnaround commitments.
One James Fisher
In 2023 we adopted the
'One James Fisher' model
and brought together our collective strength to achieve greater
synergies for the business and its customers. We are already
achieving good traction, particularly within the Energy Division
across oil and gas, and offshore wind, as well as Defence and
Maritime Transport, which share common customers. Over time, the
One James Fisher model will also drive greater efficiency and
effectiveness.
For over 175 years, James Fisher
has been innovative and responsive to its customers' needs. From
coastal shipping, submarine rescue and saturation diving, through
to bubble curtains, the Company has been first to market with
innovative solutions. We recognise the importance of preserving our
entrepreneurial character.
At heart, we are an asset-light
engineering service company that thrives by bringing together
innovative solutions that resolve complex problems. Our strategic
growth will be driven through the expertise of our people,
underpinned by applied technology, and amplified by expanding where
the demand is - across our geographic markets.
We are confident that fostering
this new model, will enable us to:
·
Leverage talent acquisition, career development,
and knowledge sharing to become the employer of choice
·
Establish a new product development process that
will enhance our differentiation, with streamlined manufacturing
and supply chain activities to significantly enhance
productivity
·
Pool our mobile assets and field operators
globally, in a service delivery model, anywhere in the
world
·
Drive standardisation and automation, with the
potential realised through shared services
·
Above all, prioritise our safety
Progress in a year of challenge
2023 was a mixed year, where we
made good progress in building our leadership team, implementing
our new operating model, and deploying our focus and simplification
agenda. However, we faced some unexpected challenges that impacted
progress, both financial and operational, including the difficult
decision to close one of our non-core businesses.
As a service company, our people
define us, and building a new Executive Team has allowed us to lead
the transformation with one voice. Our senior leaders are the
enablers of our Focus, Simplify and Deliver ambitions.
Focus
We divested non-core businesses
and sold non-productive assets, which allowed us to begin the
process of reducing our indebtedness and concentrate investments on
our core portfolio.
To help align effort and resources
across the organisation, we established five universal objectives
to guide activity, cut complexity and reduce
duplication.
We implemented a comprehensive
upgrade of our health, safety, environment standards. Our top
priority remains Exceptional Safety, deployed through a
company-wide programme that adopts the highest standards from
within our industries. In 2023, despite missing our overall target,
two of our Divisions met their objectives and there has been a
palpable, positive change with key lessons learnt in the
third.
Simplify
Through the creation of our three
Divisions, the One James Fisher culture has begun to embed. I am
encouraged to see business units adopting similar standards, as
they work together to pool assets, share resources and engage
customers in a more co-ordinated way.
Our Investment Committee is a key
control point and will provide discipline and consistent
decision-making in matters such as large customer tenders and
capital allocation.
Deliver
Led by our Business Excellence
Function, all business owners were trained in the Lean Six Sigma
methodology in 2023 and we achieved 38 Green Belts and 8 Black
Belts - good progress towards our 2024 objectives.
Through these collective efforts,
we have made progress towards our strategic target to deliver 10%
UOP margin. We ended the year at 6.0% (2022: 5.5%).
Operational and market highlights
Energy
The Energy Division provides safe,
sustainable products and services for two core markets: oil and gas
and renewables. In 2023, the Division increased revenue c.10% to
£266.5m with operating profit increasing by c.13% to £15.7m.
Highlights included:
·
Strong performance from well testing, bubble
curtain and artificial lift products
·
Expanded artificial lift products and service
offerings from new manufacturing base in Saudi Arabia
·
Awarded UK 'Innovation in Decommissioning Award'
for SEABASS plug and abandonment solution
·
Strong demand for our technologies, secured our
first US contract for bubble curtains
·
Joint collaboration agreement signed for offshore
wind operation and maintenance (O&M) services in Japan to
support Northeast Asia geographical expansion
·
Launch of James Fisher Academy to deliver skills
and competency for offshore wind services
Against the backdrop of
heightening focus on energy security, demand for well testing and
production optimisation services remained strong, particularly in
the US, Middle East and Latin America. This was demonstrated
through excellent performance in the well testing and artificial
lift Product Lines. By contrast, the decommissioning market
remained challenging, and the business will focus more on selective
bidding, aligned to margin delivery and stronger operational
performance. Renewable offshore wind market conditions improved
from 2022 to 2023 and the business returned to break-even through a
combination of selective bidding, technology differentiation and
geographical expansion. Offshore wind market conditions are
expected to remain flat in 2024 but are set to improve in 2025 and
the Division will focus its core strengths on construction,
operations and maintenance, data management and digital solutions.
This includes geographic expansion through key strategic
partnerships and collaborations.
Defence
The Defence Division provides
underwater systems and life support capabilities for the defence
and commercial diving markets. In 2023, revenue increased by 6.3%
to £72.5m, with the Division returning to profitability delivering
underlying operating profit of £1.5m. Highlights
included:
·
Successful transition of NATO submarine rescue
system contract
·
Initial trial of Shadow Seal special operations
vehicle
·
New General Manager appointed to drive US
business market growth
·
Early momentum in international markets,
including services and training contracts in India and South
Korea
·
Strong growth pipeline in Australia, Singapore,
Sweden, the US and Netherlands
·
Further investment in new product
development
As geopolitical and energy
security trends continue, the demand for subsea and special
operations capabilities is set to increase. While the business
delivered effectively on its existing contract commitments,
including submarine rescue, some projects were delayed by customer
and government approvals. The Division continues to build a strong
opportunity pipeline but order intake was impacted by delays in the
award of new contracts. However, the commercial diving business has
performed well, aligned to energy market conditions. Product
innovation and development is also set to drive further growth,
alongside the Shadow Seal special operations vehicle that was
trialled in 2023, ahead of its delivery to customers in
2024.
Maritime Transport
Maritime Transport is a leading
the way in targeted coastal shipping and global oil and natural gas
ship-to-ship transfers.
Although revenue declined by 6% in 2023, to
£157.2m, the Division was focused on profitability and underlying
operating profit was up c.23% to £23.3m. Highlights
included:
·
Delivery of two new, dual-fuel vessels, the Sir
John Fisher and Lady Maria Fisher
·
Secured largest UK tankships contract renewal
with Phillips 66
·
Strong LNG STS demand globally coupled with
strong demand for oil STS in Brazil
The Division continues to play a
key role in the critical supply of energy and petrochemicals,
alongside alternative fuels, including liquefied natural gas (LNG).
This resulted in a strong performance during the year, with high
utilisation levels across tankships, alongside a key contract
extension with a major UK customer. As part of the Company's fleet
replacement programme, James Fisher took delivery of two new,
dual-fuel vessels, which will underpin the company's ESG
commitments. The STS business maintained its global market leading
position in STS transfers and performed well in the first half of
the year, particularly in Brazil. There is continued opportunity to
integrate the business further and identify synergies from which to
grow the customer base.
Lessons learned and strengthening our
platform
Despite the potential in the
business and the significant changes we have accomplished, the
Group continued to face challenges in 2023. This included the
complex divestiture of our nuclear business, which impacted the
refinancing of our bank debt during the first quarter. Whilst this
was the right strategic decision, it had a significant short-term
impact on James Fisher in terms of resources, distraction, and
costs.
These challenges led us to
implement a more robust risk management and governance framework,
delivered through a strengthened Legal Function with expert talent
integrated across Group and Divisions. Our
Functions are improving in both Finance and Human Resources (HR),
and we are taking steps to integrate our business systems.
Therefore, we are still in the "back-to-basics" phase of our
journey in these two areas.
With the arrival of Karen
Hayzen-Smith as our new Chief Financial Officer, I look forward to
an accelerated strengthening of the team, and the upgrade of our
control and risk management processes. This is a pre-requisite to
the Company delivering on its strategic objectives.
In HR, we appointed experienced
Business Partners in each Division and established clear Functional
oversight. We implemented a more systematic performance review and
succession planning process, and launched recruitment and
development initiatives, such as the James Fisher Academy. We see
the Academy as an engine to increase the expertise of our customer
facing service colleagues and to reduce our dependence on
third-party contractors.
In a period of considerable
change, our employee engagement score remained level with last year
(3.86 vs. 3.84 in 2022), falling short of our ambitions. Our people
are integral to the services we provide, and this makes employee
engagement an extremely important indicator for us. Nevertheless,
there was progress in some Divisions, which showed the positive
impact of our culture initiative.
Completing our foundation work
As the new organisation has
settled in, our immediate priority is to ensure we have a strong
financial base and get closer to our mid-term leverage targets
of 1.0-1.5x Net Debt to EBITDA.
This will provide a sustainable platform to
deliver growth.
We will continue to build on the
change management journey started in 2023, through several
programmes:
1. Exceptional
Safety: is our number one
priority. We will expand our
approach into the supply chain and sub-contractors, building a
collective culture across the full workforce
2. Employee
Engagement: improve two-way
engagement with employees so we can inform, equip and
empower them to
deliver our Company's full
potential
3. Foundations for
Growth: continue to strengthen our
financial, governance and risk management foundations.
Reinforce UOP and ROCE as the North Star
to achieve financial improvement and build a more resilient
business for the future
4. Pipeline of
Talent: attract, develop and
inspire our employees to reach their full potential in a diverse
and inclusive environment. At the heart of
this is our five-year talent development framework
5. Strong Supply
Chain: work with employees,
contractors and partners to build a stronger supply chain
framework. This is centred around efficient execution and
delivery, including the pooling of both
assets and people
These priorities will underpin our
customer focus, as we continue to prepare for the long-term
strategic growth of James Fisher.
Positioning for growth
Against the backdrop of continued
geopolitical instability and security of energy supply, all three
Divisions should benefit from long term, structural demand
tailwinds.
The Energy Division will
support the energy transition through its innovative offshore wind
solutions and help oil and gas customers to become more efficient
and less carbon intensive.
Our Defence Division will
continue to lead the industry in life support and lifesaving
products and services, which includes innovative platforms to
bridge defence gaps through close collaboration with our partner
nations.
In Maritime Transport, we
will ensure continuity of critical supply through coastal shipping
both in the UK and in new geographical markets, and explore
adjacent markets relevant to our capabilities. We will explore
options in other regions, such as the Caribbean, where we have
proven value. In ship-to-ship activities, we will lead in serving
liquefied natural gas (LNG) demand, while providing world-class
safety, reliability and compliance in crude oil.
Across all these verticals, James
Fisher will be next to our customers, wherever they are - across
the North Sea, the Middle East, Asia Pacific and the
Americas.
Having hired our Chief Technology
Officer, in January 2024, we will harness the innovation that I
have witnessed across the Group and will embed technology as a
major part of our growth plan. This includes a new product and
service development process, that will accelerate the introduction
of new offerings to market.
As we reduce our financial
leverage, we will look to enrich our service offerings by adding
differentiated activities to our divisional portfolio, either
organically or through acquisitions. Any future acquisition must
demonstrate some compelling contribution to our strategic goals and
continue to be asset-light.
Outlook for the year ended 31 December 2024
In the current financial year to
date, the Group's overall performance has been in line with the
Boards's expectations, building on our early-stage progress in
2023. Looking forward, we continue to see supportive end markets in
2024 in the majority of our businesses and would also expect to
deliver further benefits from our turnaround
initiatives.
Our key focus for 2024 is to
establish a robust and sustainable financial platform, with lower
levels of debt as we work towards a mid-term leverage range of
1.0-1.5x (Net Debt to EBITDA). To achieve this we need to
complete the disposal of non-core assets during 2024 and refinance
our debt facilities which mature in March 2025. Delivering on
this objective will strengthen our balance sheet, reduce our
interest cost, make us a more resilient Group and provide greater
ability to take advantage of growth opportunities.
Thanks
As I reflect on this year of
transformation, I would like to thank the Board, shareholders,
customers, and employees for their continued support through this
time of change.
As we head into 2024, I am proud
of the progress we have made in our journey of transformation with
a recognition there is much more to be done. With a stronger
platform for growth, I am confident that James Fisher will once
again prosper thanks to the people and innovation that is the
hallmark of this organisation.
Jean Vernet
Chief Executive Officer
A
summary of the Group's performance from continuing operations is
set out below.
|
Continuing operations
|
Underlying results1
|
Reported results
|
|
|
Year
ended 31 December
|
Year
ended 31 December
|
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Revenue (£m)
|
496.2
|
478.1
|
3.8%
|
496.2
|
478.1
|
3.8%
|
|
Operating profit/(loss)
(£m)
|
29.6
|
26.4
|
12.1%
|
(18.6)
|
24.7
|
n/m
|
|
Profit/(loss) before tax
(£m)
|
8.3
|
16.2
|
(48.8)%
|
(39.9)
|
14.5
|
n/m
|
|
Profit/(loss) for the year
(£m)
|
2.3
|
11.5
|
(80.0)%
|
(50.9)
|
9.0
|
n/m
|
|
|
|
|
|
|
|
|
|
Operating margin
|
6.0%
|
5.5%
|
50 bps
|
(3.7%)
|
5.2%
|
(890) bps
|
|
Return on capital
employed
|
6.6%
|
5.3%
|
130 bps
|
|
|
|
|
Net debt - covenant
basis
|
149.8
|
142.1
|
5.4%
|
|
|
|
|
Earnings/(loss) per
share
|
11.4
|
22.3
|
(48.9)%
|
(101.2)
|
17.4
|
n/m
|
1 The Group uses a
number of alternative (non-Generally Accepted Accounting Practice
(non-GAAP)) performance measures (APMs) which are not defined
within IFRS. The APMs should be considered in addition to and not
as a substitute for 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 APMs are described more fully and reconciled to GAAP
performance measures in Note 2 of the financial
statements.
Reported results from continuing operations
The Group generated revenue of
£496.2m in 2023, an increase of 3.8% compared to £478.1m in 2022.
The Energy and Defence Divisions showed growth against 2022, with
Energy up 9.9% (2023: £266.5m; 2022: £242.6m) and Defence up 6.3%
(2023: £72.5m; 2022: £68.2m). Maritime Transport revenue was down
by 6.0% (2023: £157.2m; 2022: £167.3m) driven by a proactive
decision to exit some lower margin contracts.
Gross margin was 27.4% similar to
the 26.6% achieved in 2022.
The Group made an operating loss of
£18.6m in 2023, an adverse movement of £43.3m compared to the
£24.7m operating profit in 2022, reflecting net adjusting items of
£48.2m (2022: £1.7m), offset by stronger underlying business
performance. The adjusting items include an impairment of goodwill
of £28.0m which is discussed below.
Loss before tax was £39.9m (2022:
£14.5m profit). The decrease in profit before tax was driven by the
statutory operating profit performance described above as well as a
£11.1m increase in net finance expense. The increase in net finance
expense was the result of increased interest rates and higher
amortisation of financing fees arising from the refinancing
undertaken in 2023, together with an estimate of deferred fees that
would arise on exiting the facility. There was also an
increase due to unwinding of discount on lease liabilities due to
the Group entering into and extending a number of vessel and office
leases in the year.
Loss per share from continuing
activities was 101.2 pence compared to 17.4 pence earnings in 2022,
reflecting the reduced operating profit performance and increased
adjusted items.
Underlying operating results from continuing
operations
|
Reconciliation of underlying operating profit to operating
profit (continuing)
|
Year ended 31
December
|
|
|
2023
£m
|
2022
£m
|
|
Underlying operating profit
(continuing)
|
29.6
|
26.4
|
|
Amortisation of acquired
intangible assets
|
(1.1)
|
(2.1)
|
|
Impairment charges
|
(28.1)
|
(0.7)
|
|
Refinancing costs
|
(12.2)
|
-
|
|
Specific trade receivables
provision
|
-
|
1.1
|
|
Restructuring costs
|
(5.7)
|
(1.7)
|
|
Disposal of businesses and
assets
|
1.7
|
3.4
|
|
Other
|
(2.8)
|
(1.7)
|
|
Operating profit (continuing)
|
(18.6)
|
24.7
|
Underlying operating profit
improved by 12.1% to £29.6m (2022: £26.4m). Each Division delivered
growth in both underlying operating profit and margin. The Group's
overall underlying operating profit margin improved by 50bps, from
5.5% in 2022 to 6.0% in 2023 even though the improved trading
performance was delivered alongside the necessary investments the
Group has made in strategic initiatives, including the
establishment of the Business Excellence workstream and projects to
strengthen internal controls and hiring for key senior management
roles. Included in the underlying operating profit are £3.8m of
losses generated by Subtech Europe, whose operations ceased in
December 2023.
The adjusting items for 2023
amounted to £48.2m, with the largest adjustments related to £28.1m
impairment charges and reversals, largely on goodwill balances,
£12.2m costs associated with the new RCF and £5.7m restructuring
costs. Of the goodwill impairment charge, £25.0m was recognised in
relation to the Defence Division. Whilst the Division's performance
improved in comparison to 2022, its contract win rate was not as
strong as expected due to delays in customer procurement processes.
In arriving at the value of goodwill impairment, we built in the
risks associated with the potential delays and cancellations of
future projects into cash forecasts. This, combined with a higher
discount rate, led to the recognition of the impairment. However,
the Division retains a solid pipeline, and a positive outlook for
the business over the medium-term remains unchanged.
Summary of underlying operating
results from continuing operations
|
Revenue (continuing)
|
Year ended 31
December
|
|
|
|
2023
£m
|
2022
£m
|
Change %
|
|
Energy
|
266.5
|
242.6
|
9.9
|
|
Defence
|
72.5
|
68.2
|
6.3
|
|
Maritime Transport
|
157.2
|
167.3
|
(6.0)
|
|
Revenue (continuing)
|
496.2
|
478.1
|
3.8
|
|
Underlying operating profit/(loss)
(continuing)
|
Year ended 31
December
|
|
|
|
2023
£m
|
2022
£m
|
Change%
|
|
Energy
|
15.7
|
13.9
|
12.9
|
|
Defence
|
1.5
|
(0.4)
|
n/m
|
|
Maritime Transport
|
23.3
|
18.8
|
23.9
|
|
Corporate
|
(10.9)
|
(5.9)
|
(84.7)
|
|
Underlying operating profit
|
29.6
|
26.4
|
12.1
|
Full year operating performance by Division
As announced in April 2023,
effective from 1 January 2023 the Group has reorganised into three
divisions, representing the key markets within which the Group
operates, namely Energy, Defence, and Maritime Transport. The
Energy Division combines the Divisions that used to be called
Marine Support and Offshore Oil, without Fendercare, which is added
to the Tankships Division to create Maritime Transport. JFD is the
only component of the Defence Division and was previously reported
in the Specialist Technical Division.
Energy
Robust performance with strong demand in Well Testing and
Bubble Curtain and Artificial Lift
The Energy Division provides
products and services to the offshore wind and oil and gas markets,
and mainly comprises of the Well Testing and Bubble Curtain
(Scantech), Artificial Lift (RMSpumptools), Inspection Repair and
Maintenance (JF Subtech), Offshore Wind (JF Renewables) and JF
Decommissioning product lines.
|
|
Year ended 31
December
|
|
|
|
2023
£m
|
2022
£m
|
% change
|
|
|
|
|
|
|
Total revenue
|
266.5
|
242.6
|
9.9%
|
|
|
|
|
|
|
Underlying operating profit
(£m)
|
15.7
|
13.9
|
12.9%
|
|
Underlying operating profit
margin
|
5.9%
|
5.7%
|
20 bps
|
|
Return on capital
employed1
|
9.3%
|
8.0%
|
130 bps
|
The Energy Division delivered
revenue growth of 9.9%, from £242.6m in 2022 to £266.5m, with good
performances across the majority of the product lines. Revenue
growth is 17% if adjusted for disposed business in 2022. Well
Testing, Bubble Curtain and Artificial Lift, in particular,
achieved strong growth with the supportive demand conditions.
Underlying operating profit growth for the Division was 12.9%,
which included a £3.8m loss generated by Subtech Europe, whose
operations ceased in December 2023. Subtech Europe had been
incurring losses over a number of years due to increased
competition and a North Sea market that was both seasonal and
required the supply of a vessel and services on a demand basis.
This gave rise to a higher risk model and periods of lower
utilisation which generated losses.
Well Testing and Bubble Curtain
revenue, which includes solutions in Taiwan and USA, increased
by 26.8% to
£58.2m (2022:
£45.9m). This
increase was driven by sustained demand for well-testing services,
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.
Artificial Lift product sales
increased by 27.2% to £42.5m (2022: £33.4m), a new record high,
continuing the strong market trend seen in the first half of 2023.
In March 2024, the Group announced the conditional sale of
RMSpumptools for an enterprise value of £90m (expected net proceeds
of £83m), with the business set to exit the division at completion
during the second half of 2024.
Inspection, Repair and Maintenance
showed strong revenue growth, from £98.8m in 2022 to £107.6m, with
growth in the Brazil and Middle East markets. The business
performed well in the Middle East due to strong utilisation and day
rates earned from Swordfish, which was leased back after it was
sold in January 2023. The lease has now finished, and the vessel
returned to the owner. However, the business experienced operating
losses in South Africa and in Europe, which led to the decision to
close Subtech Europe.
Offshore Wind delivered strong
revenue growth of £29.5m over a weak comparative period (2022:
£15.7m) and achieved a near break-even position compared to an
operating loss in 2022. The market was up from 2023 to 2022 and is
forecasted to be relatively flat in 2024. The Group continues to
believe that its strong offerings of products and services into
this market will deliver profitable growth in the
future.
Continuing volatility in the market
led to our Decommissioning business having a disappointing year,
with a decrease in revenue of 18.7% to £22.2m (2022: £27.3m). The
decommissioning markets remain challenging with the business
experiencing volatility in demand during 2023. The business has a
new management team in place who are focused on new contract wins,
strong project management and margin delivery. The medium-term
market growth drivers for this business remain
attractive.
Defence
Contract delays impacted performance - solid growing revenue
pipeline
The Defence Division provides
underwater systems and life support capabilities, for the defence
and commercial diving markets. The main capabilities are submarine
rescue, defence diving, special operations vehicles, submarine
systems, and commercial diving and hyperbaric systems.
|
|
Year ended 31
December
|
|
|
|
2023
£m
|
2022
£m
|
% change
|
|
Total revenue
|
72.5
|
68.2
|
6.3
|
|
|
|
|
|
|
Underlying operating profit/(loss)
(£m)
|
1.5
|
(0.4)
|
n/m
|
|
Underlying operating profit
margin
|
2.1%
|
(0.6)%
|
270 bps
|
|
Return on capital
employed1
|
2.1%
|
(0.4)%
|
250 bps
|
The Defence Division delivered
revenue growth of 6.3%, increasing from £68.2m to £72.5m in 2023,
and reversed a prior year underlying operating loss of £0.4m to
deliver an underlying operating profit of £1.5m. This
increased revenue was predominately due to delivery of additional
services to existing defence customers and a strong performance for
our commercial diving and hyperbaric systems, linked to a recovery
in the energy sector. This is consistent with higher levels of
activity seen in the Energy Division's diving
activities.
Activity in the period focused on
service and training contracts in India and South Korea with good
progress, and the renewed NATO submarine rescue contract secured at
the end of 2022, which went live in July 2023. Some projects were
negatively impacted by client dependencies and government approvals
that were outside our control, which led to increased cost and
schedule impacts. We anticipate completing these projects in 2024,
within our revised cost estimates.
Overall, while the defence market
is buoyant and JFD's performance improved in comparison to 2022,
the Division did not secure some of the projects that were
anticipated in 2023, due to delays in government procurement
processes. The Division is focused on securing new contract wins
and converting its significant sales pipeline in 2024, as customers
around the world are prioritising undersea defence and energy
security. While the defence market has inherently long and often
uncertain procurement timelines, the geo-political environment is
leading to a change in customer behaviour, with more urgency being
placed on procurement of critical undersea capabilities. We are
investing in our long-term growth through an established new
product development portfolio, which will bring some exciting next
generation products to market. The forward order book on 31
December 2023 for the Division was £223m.
Maritime Transport
Solid performance focused on margin improvement and portfolio
rationalisation
The Maritime Transport Division
comprises the Tankship business, Cattedown Wharves, JF Fendercare
and Martek Marine.
|
|
Year ended 31 December
|
|
|
|
2023
£m
|
2022
£m
|
% change
|
|
Revenue
|
|
|
|
|
JF Tankships (incl.
Cattedown)
|
76.1
|
78.9
|
(3.5)
|
|
JF Fendercare (incl.
Martek)
|
81.1
|
88.4
|
(8.3)
|
|
Total revenue
|
157.2
|
167.3
|
(6.0)
|
|
|
|
|
|
|
|
|
|
|
|
Underlying operating profit
(£m)
|
23.3
|
18.8
|
23.9%
|
|
Underlying operating profit
margin
|
14.8%
|
11.2%
|
360 bps
|
|
Return on capital
employed1
|
30.3%
|
22.5%
|
780 bps
|
The Tankships business delivered a
robust performance in the year. Revenue was marginally down
year-on-year, from £78.9m to £76.1m, in part due to a reduction in
fuel costs, which on certain contracts are passed to the charterer,
but also due to the proactive decision to exit some lower margin
contracts. However, margins were stronger due to the improved
contract rates and the spot market rates averaging higher than in
2022. The tanker fleet utilisation during the year was 93% (2022:
88%). This was partially offset by revenue increase in Cattedown
Wharves as a result of inflationary increase in quay dues across
the port and increases in number of vessels through the port
year-on-year.
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. Tankships commenced the rebuild programme for its new
fleet with contracts signed for four new vessels with delivery of
all four vessels within 2026.
JF Fendercare experienced a £7.3m
reduction in revenue year-on-year, but its operating profit saw a
significant increase. The revenue shortfall was mainly as a result
of the decision to exit Tanjung Pelepas, which is a port in
Malaysia, which had minimal impact on profitability as margins were
low. Fendercare experienced strong demand in Brazil on
ship-to-ship transfers, which attract higher gross profit margins,
thereby increasing profitability overall. Europe and Africa
experienced a drop in transfers as a result of higher stock levels
reducing demand. A fourth LNG STS kit was purchased in the period,
as at the end of 2023 we have two LNG retainers in place. Martek's
revenue was up from 2022, however, the change in product mix meant
that the operating margins slightly deteriorated.
Corporate
Corporate costs were £10.9m
compared to £5.9m in 2022. The increase reflects the necessary
investment the Group has made in the business transformation
programme, including the new executive and senior management team,
strengthening of controls and compliance environment, roll out of
lean, business and commercial excellence and other activities.
Combined, these activities are focused on building a foundation for
growth through stronger business performance and efficiencies
leading to margin improvement.
Discontinued operations
In the period through to its
disposal on 6 March 2023 for a nominal consideration of £3, the
nuclear decommissioning business (JFN) generated revenue of £6.7m
(2022: £42.8m) and a loss after tax of £11.4m (2022: £19.8m).
Subsequent to the sale of the business, on 9 August 2023, the Group
was notified that JFN 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 £6.4m has been included in the
results for the year ended 31 December 2023, in relation to
potential claims/settlements under parent company
guarantees.
Items outside underlying operating
profit
The Group has recognised a net
operating loss of £48.2m in relation to adjusting items, significantly increased from
£1.7m in 2022.
|
|
Year ended 31 December
|
|
|
2023
£m
|
2022
£m
|
|
Impairment charges, net
|
28.1
|
0.7
|
|
Refinancing costs
|
12.2
|
-
|
|
Restructuring costs
|
5.7
|
1.7
|
|
Amortisation of acquired intangible
assets
|
1.1
|
2.1
|
|
Specific trade receivables
provision release
|
-
|
(1.1)
|
|
Gain on disposal of businesses and
assets
|
(1.7)
|
(3.4)
|
|
Other
|
2.8
|
1.7
|
|
Total
|
48.2
|
1.7
|
The £28.1m net impairment charge in 2023
relates to goodwill impairment charges of £28.0m, largely in the Defence Division
and further vessel and assets impairments of £2.4m in Maritime Transport and Energy
Divisions, partially offset by a £2.2m impairment reversal for
impairments recognised in previous years. The 2022 impairment
charge of £0.7m
mainly comprises a reversal of impairment to Swordfish dive support
vessel and a non-cash goodwill impairment charge in relation to a
business in Energy Division.
During 2023, the Group incurred
£12.2m legal and
advisory costs relating to the new revolving credit facility (RCF),
refinancing strategy, obtaining a waiver from the Group's lenders
and completion of various requirements and conditions of the
RCF.
Restructuring costs of
£5.7m in 2023
relate to the transformation programme aimed at simplification,
rationalisation and integration of the Group's businesses. This
also includes £3.0m of costs associated with Subtech Europe closure. In 2022,
people and property costs of £1.7m
were incurred for restructuring programme within
the Fendercare and JFD businesses.
Amortisation of acquired
intangibles relate to customer relationships acquired through
business combinations which are amortised over their estimated
useful economic life.
£1.1m of
debts previously provided for were collected during 2022 and we
continue to pursue other amounts, for which provisions have been
made, through legal and commercial discussions
Disposal of businesses and assets
in 2023 largely relates to a gain of £1.4m on disposal of a vessel in the
Maritime Transport Division. In 2022, the Group sold three
businesses and one tanker for profits on sale of
£2.5m and
£0.9m,
respectively.
Other includes £2.2m past service
cost recognised for the MNRPF scheme in respect of past
administrative and benefit practices). In 2022, the Group also
recognised a £1.5m charge in relation to its share (approximately
2%) of the obligations under a defined benefit pension fund,
following a settlement in relation to benefits payable by the
scheme to past members.
The tax charge relating to
non-underlying items is £5.0m which includes a charge of £4.7m in
relation to de-recognition of the brought forward UK deferred
tax.
Capital expenditure
Capital expenditure in the year was
£28.5m and
£1.7m on
development expenditure. Capital expenditure to depreciation ratio
was 1.3 (excluding intangibles additions and amortisation). The
majority of growth expenditure was in the Energy Division including
spend on a new fleet of compressors to support expansion in the
"bubble curtain" product line.
Finance charges
The Group's net finance charges
increased by £11.1m
to £21.3m (2022:
£10.2m).
Finance charges in 2023 primarily
comprise £15.8m of
interest expense on loans and overdrafts (2022:
£7.4m),
£2.7m for deferred
financing fees to be paid under the terms of the new credit
facilities (2022: £nil), £1.7m of
loan arrangement fees (2022: £1.0m), including the write-off of
previously capitalised loan arrangement fees relating to the former
credit facilities and £4.0m interest expense on lease
liabilities (2022: £2.2m), partially offset by £3.2m (2022: £0.7m) interest income on cash balances
and pensions.
The increase in interest expense on
loans and overdrafts and interest income on cash balances was
largely the result of higher interest rates. Interest expense on
lease liabilities increased during the year mainly due to new
vessel leases and extensions made to existing vessel and property
leases.
The Group's interest cover ratio,
an alternative performance measure which is fully described and
reconciled in Note 2 of the financial statements, and is calculated
by dividing underlying operating profit by net finance charges
(excluding IFRS 16 finance charges), is 2.2 times (2022: 3.5 times), which compares to banking
covenants that require the ratio to be greater than 1.75 times
(2022: 3.0 times).
Taxation
The Group has recognised an overall
net tax expense in respect of continuing operations of £11.0m in
the year (2022: £5.5m). The increase in tax expense is primarily
driven by the de-recognition of the deferred tax asset. The tax
expense on underlying profits from continuing operations for the
year is £2.4m (2022: £4.7m) representing an underlying effective
tax rate of 29.0%
(2022: 28.4%), which has been adjusted for £3.6m deferred tax
impacts on finance charges.
Given the volume of the cumulative
UK tax losses, which were mostly generated by the discontinued
businesses and exceptional costs, it was decided not to recognise
the UK deferred tax asset in respect of the UK losses incurred in
the year and £4.7m brought forward losses. The Group still has the
ability to recognise these losses in future periods against
chargeable profits.
Dividends and earnings per
share
The Board has not recommended
dividends in 2023 or 2022, given the overall financial position of
the Group. The Board remains committed to reintroducing a
sustainable dividend policy at the right time.
Basic loss per share, on a statutory
basis, increased to 123.9 pence (2022: 22.1 pence) reflecting lower
profit after tax. Underlying earnings per share decreased to 11.4
pence (2022: 22.3 pence) primarily due to higher interest and tax
charges in the year, partially offset by an improvement in the
underlying operating profit.
Cash flow and borrowings
|
|
2023
£m
|
2022
£m
|
|
Cash flow
from operating activities
|
37.8
|
44.5
|
|
Cash
flows (used in)/from investing activities
|
(4.7)
|
(15.8)
|
|
Cash
flows used in financing activities
|
(27.4)
|
(40.1)
|
|
Net increase in cash and
cash equivalents
|
5.7
|
(11.4)
|
|
Cash and
cash equivalents at 1 January
|
22.8
|
34.5
|
|
Net
foreign exchange differences
|
(1.7)
|
2.5
|
|
Cash
transferred to asset held for sale
|
(0.4)
|
(2.8)
|
|
Cash and cash equivalents at
31 December
|
26.4
|
22.8
|
The Group generated £37.8m (2022:
£44.5m) cash from operating activities, with a working capital
inflow of £6.7m (2022: £2.6m working capital outflow). The increase
in the loss for the year was the key driver for the reduction. The
working capital inflow arose due to a reduction in debtor days,
partially offset by a reduction in creditor days. In 2022, the
Group also built inventory to satisfy the higher demand for its
product which was not repeated in the current year. Debtor balances
continued to show some positive progress during the year due to the
business focus on collections. Creditor balances have also reduced
as the Group rebalanced its working capital throughout the year.
Tax payments were slightly higher than last year at £8.6m (2022:
£8.1m).
Cash flows used in investing
activities during the year were £4.7m (2022: £15.8m). Capital
expenditure, at £29.4m, was lower than the £31.7m in 2022. Key
expenditure in 2023 included investment in energy efficient
compressors for Scantech product line in the Energy Division, which
is expected to yield attractive returns. Other capex investments
included dry docking of the Group's vessels and equipment
purchases. The Group generated £25.6m in asset disposals (2022:
£2.2m) mainly consisting of the proceeds from the sale of Swordfish
Dive Support Vessel as well as other vessels and tugs in the Energy
and Maritime Transport Divisions. The Group also incurred costs of
£3.2m in 2023 from the sale of JFN.
The Group's net borrowings at 31
December 2023, including all lease liabilities, was £201.1m, a
£15.3m increase in borrowings from 31 December 2022. Bank
borrowings increased by £8.2m and additional lease liabilities
increased by £8.3m following the delivery of Lady Maria Fisher
tanker into our fleet and extensions of other vessel and property
leases.
On 31 December 2023, the Group had
£192.7m of committed credit facilities (2022: £247.5m) and £24.7m
of undrawn committed credit facilities (2022: £88.0m).
The Group's net debt for the
purposes of its banking covenants consists of net bank borrowings,
finance lease liabilities (on an IAS 17 basis), and bonds and
guarantees, as summarised below.
|
|
2023
£m
|
2022
£m
|
|
Net
borrowings
|
201.1
|
185.8
|
|
Less:
right-of-use operating leases
|
(56.9)
|
(46.0)
|
|
Add:
bonds and guarantees
|
5.6
|
2.3
|
|
Net debt - covenant
basis
|
149.8
|
142.1
|
|
|
|
|
|
Underlying operating profit
|
29.6
|
26.4
|
|
Depreciation and amortisation
|
41.2
|
40.3
|
|
Less:
Depreciation on right-of-use assets
|
(16.3)
|
(12.2)
|
|
Less:
Amortisation of acquired intangibles
|
(1.1)
|
(2.1)
|
|
IFRS 16
impact removed
|
1.0
|
0.2
|
|
Covenant
EBITDA
|
54.4
|
52.6
|
|
Net debt :
EBITDA1
|
2.75
|
2.70
|
1Defined as leverage APM in note 2.3.
On a covenant basis, net debt has
increased by £7.7m in the period. The ratio of net debt: EBITDA
(defined as leverage APM, which is explained and reconciled in Note
2 of the financial statements) has increased slightly to 2.75 times
(2022: 2.70 times), which compares to banking covenants requiring
the ratio to be less than 3.25 times.
Liquidity
In June 2023, the Group agreed new
borrowing facilities with its lending banks of £209.9m, with a maturity date of March
2025. As at 31 December 2023, agreed amortisation had reduced the
available facility amount to £192.7m. The continued access to
liquidity has been included as a Group Principal Risk in the Annual
Report and Accounts due to the relatively short-term nature of the
new facilities.
With the current RCF maturing early
next year, the Group will be refinancing its debt in 2024. We are
underway with the deleveraging of our balance sheet with the
agreement for sale of the entire issued share capital of
RMSpumptools Limited (RMS) announced in March 2024, which is
expected to bring in net proceeds of £83m. The disposal is expected to
complete early in H2 2024, subject to certain conditions.
Deleveraging will provide the Group with greater business
resilience and greater headroom on its existing facilities, while
reducing the Group's debt levels towards our mid-term target net
debt / EBITDA range of 1.0-1.5x. In turn this should enhance the
Group's ability to execute a successful refinancing, and put in
place new facilities during 2024 that provide the liquidity to
support investment in growth whilst also being on more favourable
terms than the current facility.
Balance sheet
The Group's net assets decreased by
£69.7m in the year to £148.6m
(2022: £218.3m). The loss for the year of
£62.3m was increased by other comprehensive losses of
£8.4m in relation
to foreign exchange movements and hedging of £9.7m, net of tax, and an actuarial
gain from the Group's defined benefit pension fund of
£1.3m in the year,
net of tax.
Non-current assets
Non-current assets decreased by
£25.9m in the year from £321.2m to £295.3m. Goodwill reduced by
£38.0m to
£78.3m (31 December
2022: £116.3m) as a
result of impairment charges of £28.0m, a reclassification to
held-for-sale assets of £7.6m and foreign exchange differences
of £2.4m. Other
intangible assets reduced to £6.3m
from £8.2m, largely due to additions and
transfers of £2.8m,
which was offset by amortisation and impairment charges of
£4.8m.
Within property, plant and
equipment, the Group invested £28.5m in additions. These additions
were offset by disposals with a net book value of
£2.6m, depreciation
of £22.0m,
reclassifications to intangible assets and assets held for sale of
£3.1m, a small
impairment charge of £0.5m and foreign exchange differences
of £2.0m.
Right-of-use assets increased by
£15.1m, due to the
additions of £32.8m relating to the delivery of Lady Maria Fisher tanker into our
fleet and extensions on other vessel and property leases as well as
a reversal of impairment of £1.9m previously recorded on vessels in
the Energy Division, which were partially offset by depreciation of
£16.3m, disposals
with a net book value of £2.0m, reclassifications to held for
sale assets of £0.7m and foreign exchange differences of £0.6m.
The Group has recognised a
£7.4m asset in
relation to the Group's Shore Staff defined benefit pension scheme
in accordance with IFRIC14 following movements in actuarial
assumptions. The Group continues to make deficit repair payments in
line with agreed profiles with £1.5m expected to be paid in
contributions in 2024 following the most recent triennial actuarial
valuation.
Current assets and current
liabilities
The Group's net current assets
increased by £12.9m from £61.3m at 31 December 2022 to £74.2m at 31
December 2023. This increase arose from the £37.8m reduction in current liabilities
in 2023 to £188.7m,
which was partially offset by a £24.9m reduction in current assets
in 2023 to £262.9m.
The £24.9m decrease in current
assets in 2023 was mainly driven by a £24.2m reduction in trade and
other receivables to £124.0m and a £21.5m reduction in assets held for
sale to £14.7m,
which have been partially offset by an £23.9m increase in cash and cash
equivalents.
The £37.8m decrease in current liabilities
in 2023 was mainly driven by a £9.0m
reduction in trade and other payables to
£113.4m, a
£15.6m reduction in
liabilities associated with assets held for sale and a
£16.3m reduction in
short-term borrowings to £51.1m, which were partially offset by
a £4.1m increase in
provisions to £9.4m. The increase in provisions in 2023 largely relates to a
£6.4m charge
relating to potential liabilities on parent company guarantees for
JFN.
Short-term bank borrowings (i.e.
overdrafts) have reduced to £51.1m
from £67.4m
at 31 December 2022, with the net position of
short-term cash and short-term borrowings increasing to
£26.4m (31 December
2022: £22.8m).
Non-current liabilities
Long-term liabilities, at £220.9m,
are £56.7m higher than at 31 December 2022. The change in 2023 is
largely the result of increase of £44.8m in long-term borrowings,
£8.5m in long-term
lease liabilities, £2.9m
in provisions and £1.2m in retirement benefit
obligations.
The £44.8m increase in long-term
borrowings was largely due to £36.6m borrowed under the revolving
credit facility in December 2022, which was classified as a current
liability in the prior year, whereas, following the completion of
the refinancing in June 2023, all amounts drawn under the current
banking facilities have all been classified as non-current
liabilities.
Technical guidance for 2024
The 2024 results will reflect the
following portfolio actions:
·
The exit from Subtech Europe, which ceased
operations in December 2023 (the business contributed c.£40.0m of
revenue to continuing operations in 2023); and
·
The sale of RMSpumptools, which is expected,
subject to the satisfaction of various conditions, to complete in
H2 2024 (the business contributed revenue of £42.5m and £12.1m of
EBITDA to continuing operations in 2023).
The net proceeds of the
RMSpumptools disposal, which are expected to be c.£83m, will be
used to reduce the drawn balance under the RCF. As such, the net
interest expense is expected to reduce post- completion.
Capital expenditure in 2024 is
expected to be at similar levels to 2023.
The adjusted effective tax rate
for 2024 is 29% representing the Group operating in higher tax rate
overseas territories.
Principal risks and uncertainties
The principal risks and
uncertainties affecting the Group are listed below and are set out
in more detail in the Company's Annual Report and Financial
Statements 2023, which should be read in conjunction with this
announcement when published. This list is not a substitute for
reading the Company's Annual Report and Financial Statements 2023
in full. The Group's principal risks and uncertainties
are:
1. Group transformation: The Group is
undertaking a transformation including a new strategy, operating
model and initiatives such as supply chain, technology improvements
and a people strategy as well as aligning the business portfolio.
Additionally, new opportunities that the Group may pursue in new
geographies may stretch Group and management resources.
2. Maintaining access to adequate funding:
The Group has experienced difficult trading conditions over the
last few years and currently has a revolving credit facility which
matures in 2025 and net debt / EBITDA ranges which are currently
outside our target range. To minimise this risk the Group has to
strengthen its balance sheet and obtain and retain adequate
committed facilities. The Group has recognised the adverse effects
of the financial resilience risk on our balance sheet and will
actively manage this risk via its capital allocation
policy.
3. Health and safety: Our operations
entail the potential risk of significant harm to people and
property, wherever we operate across the world. Our operations
entail the potential risk of significant harm to people and
property, wherever we operate across the world. For
both moral, financial and reputational reasons we would wish to
keep the risk as low as possible.
4. Cyber security: A key factor for our
customers is our ability to deliver secure IT and other information
assurance systems to maintain the confidentiality of sensitive
information. IT and Cyber Security are fundamental components to
our operations, and we continually review the emergence of cyber
threats in an effort to eradicate and mitigate the risk as far as
possible.
5. Operating in emerging markets: We rely
on winning and retaining contracts in both existing and new markets
with a variety of customers including major energy customers and
customers owned and controlled by national governments. Operating
in emerging markets can expose the Group to risks such legislative
restrictions, sanctions, exchange controls and working with joint
venture partners. Projects will be undertaken where we are
confident that risks can be managed.
6. Climate change: Sustainability is an
integral part of our corporate strategy, and our global business
employs short, medium, and long terms control measures to manage
climate risks.
7. Contractual risk: We execute contracts
which often require us to price for the long term and for risk
transfer. Our contracts can include fixed prices. This reflects the
complex nature of the work within the defence and energy services
sectors and the complexity in how we operate with customers and
suppliers. We seek to mitigate this risk by applying our
contracting principles where possible and ensuring robust contract
approval processes.
8. Project delivery: We operate contracts
in hazardous environments with contracts that could be subject to
change and require robust project management. Given the nature of
the contracts in multiple geographies and customers with a variety
of contractual and macro risks. We accept delivery risks but manage
these to ensure adequate project management skills, the necessary
engineering and technical capabilities and robust contractual
provisions.
9. Recruitment and retention of staff: We
operate in many specialised engineering and technical domains which
require appropriate skills and experience. Risks have to be
accepted and managed to avoid the risk of increase costs and
minimising a potential negative workforce engagement and retention.
Some risk is accepted given by sharing capability across our
business and compensating for skills shortages in particular areas
and developing talent in-house.
10. Financial risk: The Group is exposed to
a number of financial risks, some of which are of a macroeconomic
nature (for example, foreign currency, interest rates) and some of
which are more specific to the Group (for example credit
risks).
11. Acquisitions and disposals (NEW): The
Group has been formed organically and through acquisitions.
Transactions are complex, time-consuming, and expensive. If we
believe that a business does not fit with the Group's strategic
direction we may decide to sell that business. Transactions will be
undertaken where the risk is considered manageable.
12. Regulatory and compliance (NEW): Our
businesses are subject to the laws, regulations and restrictions of
the many jurisdictions in which they operate. The Group seeks to
ensure compliance with best practices and regulatory requirements.
JFS has zero tolerance for regulatory risk around risks such as
anti-bribery and corruption and modern slavery.
13. Product risk (NEW): The Group
designs innovative products for use in the Energy, Defence and
Maritime Transport markets. With any new product development
there are risks of warranty claims or identification of issues to
be remediated. The Group seeks to minimise such risks by
rigorous testing and quality review processes. There is also
the risk of failing to innovate to ensure a pipeline of product
development. The Group seeks to invest to strengthen
capabilities in this area including the appointment of the Group's
Chief Technology Officer and ensure the development of products to
meet customer requirements.
Consolidated income statement
for the year ended 31 December
2023
|
|
Notes
|
Year ended
31 December
2023
Total
£m
|
Year ended
31 December
20221
Total
£m
|
|
Continuing operations
|
|
|
|
|
Revenue
|
3
|
496.2
|
478.1
|
|
Cost of sales
|
|
(360.3)
|
(350.9)
|
|
Gross profit
|
|
135.9
|
127.2
|
|
Administrative expenses
|
|
(109.6)
|
(97.5)
|
|
Impairment charges
|
|
(28.4)
|
(4.9)
|
|
Refinancing costs
|
|
(12.2)
|
-
|
|
Restructuring costs
|
|
(5.7)
|
(1.7)
|
|
Share of post-tax results of
associates
|
|
1.4
|
1.6
|
|
Operating (loss)/profit
|
|
(18.6)
|
24.7
|
|
Finance income
|
3
|
3.2
|
0.7
|
|
Finance expense
|
3
|
(24.5)
|
(10.9)
|
|
(Loss)/profit before taxation
|
|
(39.9)
|
14.5
|
|
Income tax
|
5
|
(11.0)
|
(5.5)
|
|
(Loss)/profit for the year from continuing
operations
|
|
(50.9)
|
9.0
|
|
|
|
|
|
|
Loss for the year from discontinued operations,
net of tax
|
4
|
(11.4)
|
(19.8)
|
|
Loss for the year
|
|
(62.3)
|
(10.8)
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Owners of the Company
|
|
(62.4)
|
(11.1)
|
|
Non-controlling interests
|
|
0.1
|
0.3
|
|
|
|
(62.3)
|
(10.8)
|
|
|
|
|
|
|
Loss per share
|
|
pence
|
pence
|
|
Basic
|
6
|
(123.9)
|
(22.1)
|
|
Diluted
|
6
|
(123.9)
|
(22.1)
|
|
|
|
|
|
|
(Loss)/profit per share - continuing
activities
|
|
pence
|
pence
|
|
Basic
|
6
|
(101.2)
|
17.4
|
|
Diluted
|
6
|
(101.2)
|
17.4
|
1Impairment costs
(£4.9m) and restructuring costs (£1.7m) for the year ended 31
December 2022 which were previously included within administrative
expenses have been represented to conform with the current year
presentation of these costs.
Consolidated statement of other
comprehensive income
for
the year ended 31 December 2023
|
|
|
Year ended
31 December
2023
£m
|
Year ended
31 December
2022
£m
|
|
Loss for the year
|
|
(62.3)
|
(10.8)
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
Items that will not be classified to the income
statement
|
|
|
|
|
Actuarial gain in defined benefit pension
schemes
|
|
1.6
|
7.1
|
|
Tax on items that will not be
reclassified
|
|
(0.3)
|
(1.3)
|
|
|
|
1.3
|
5.8
|
|
Items that may be reclassified to the income
statement
|
|
|
|
|
Exchange differences on foreign currency net
investments
|
|
(8.1)
|
8.8
|
|
Effective portion of changes in fair value of
cash flow hedges
|
|
(0.3)
|
3.6
|
|
Effective portion of changes in fair value of
cash flow hedges in joint ventures
|
|
(0.1)
|
0.4
|
|
Net changes in fair value of cash flow hedges
transferred to income statement
|
|
(0.9)
|
0.6
|
|
Tax on items that may be
reclassified
|
|
(0.3)
|
(1.1)
|
|
|
|
(9.7)
|
12.3
|
|
Total other comprehensive income for the
year
|
|
(8.4)
|
18.1
|
|
|
|
|
|
|
Total comprehensive income for the
year
|
|
(70.7)
|
7.3
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Owners of the Company
|
|
(70.8)
|
6.9
|
|
Non-controlling interests
|
|
0.1
|
0.4
|
|
|
|
(70.7)
|
7.3
|
Consolidated statement of financial
position
at 31 December
2023
|
|
|
Group
|
Company
|
|
|
Notes
|
31 December
2023
£m
|
31 December
2022
£m
|
31 December
2023
£m
|
31 December
2022
£m
|
|
Non-current assets
|
|
|
|
|
|
|
Goodwill
|
|
78.3
|
116.3
|
-
|
-
|
|
Other intangible assets
|
|
6.3
|
8.2
|
-
|
-
|
|
Property, plant and equipment
|
|
118.0
|
119.7
|
1.0
|
1.1
|
|
Right-of-use assets
|
|
67.4
|
52.3
|
0.8
|
1.0
|
|
Investment in joint ventures
|
|
8.4
|
8.7
|
-
|
-
|
|
Investments and loans to
subsidiaries
|
|
-
|
-
|
376.7
|
456.5
|
|
Other investments
|
|
1.4
|
1.4
|
1.4
|
1.4
|
|
Retirement benefit surplus
|
9
|
7.4
|
5.5
|
7.4
|
5.5
|
|
Other receivables
|
|
4.0
|
0.7
|
-
|
-
|
|
Deferred tax assets
|
|
4.1
|
8.4
|
0.1
|
-
|
|
|
|
295.3
|
321.2
|
387.4
|
465.5
|
|
Current assets
|
|
|
|
|
|
|
Inventories
|
|
46.7
|
49.8
|
-
|
-
|
|
Trade and other receivables
|
|
124.0
|
148.2
|
14.2
|
22.2
|
|
Assets held for sale
|
8
|
14.7
|
36.2
|
-
|
-
|
|
Cash and cash equivalents
|
10
|
77.5
|
53.6
|
10.9
|
0.4
|
|
|
|
262.9
|
287.8
|
25.1
|
22.6
|
|
Current liabilities
|
|
|
|
|
|
|
Trade and other payables
|
|
(113.4)
|
(122.4)
|
(33.9)
|
(27.2)
|
|
Provisions
|
|
(9.4)
|
(5.3)
|
(8.4)
|
-
|
|
Liabilities associated with assets held for
sale
|
|
(0.7)
|
(16.3)
|
-
|
-
|
|
Current tax
|
|
(1.1)
|
(1.9)
|
(2.8)
|
-
|
|
Borrowings
|
10
|
(51.1)
|
(67.4)
|
(13.7)
|
(45.3)
|
|
Lease liabilities
|
|
(13.0)
|
(13.2)
|
(0.6)
|
(0.2)
|
|
|
|
(188.7)
|
(226.5)
|
(59.4)
|
(72.7)
|
|
Net current assets
|
|
74.2
|
61.3
|
(34.3)
|
(50.1)
|
|
Total assets less current
liabilities
|
|
369.5
|
382.5
|
353.1
|
415.4
|
|
Non-current liabilities
|
|
|
|
|
|
|
Other payables
|
|
-
|
(0.5)
|
-
|
-
|
|
Provisions
|
|
(4.3)
|
(1.4)
|
-
|
-
|
|
Retirement benefit obligations
|
9
|
(1.6)
|
(0.4)
|
(0.5)
|
(0.2)
|
|
Cumulative preference shares
|
|
(0.1)
|
(0.1)
|
(0.1)
|
(0.1)
|
|
Borrowings
|
|
(166.6)
|
(121.8)
|
(166.6)
|
(121.8)
|
|
Lease liabilities
|
|
(48.2)
|
(39.7)
|
(0.7)
|
(1.3)
|
|
Deferred tax liabilities
|
|
(0.1)
|
(0.3)
|
-
|
(0.8)
|
|
|
|
(220.9)
|
(164.2)
|
(167.9)
|
(124.2)
|
|
Net assets
|
|
148.6
|
218.3
|
185.2
|
291.2
|
|
Equity
|
|
|
|
|
|
|
Called up share capital
|
11
|
12.6
|
12.6
|
12.6
|
12.6
|
|
Share premium
|
|
26.8
|
26.8
|
26.8
|
26.8
|
|
Treasury shares
|
|
(0.5)
|
(0.6)
|
(0.5)
|
(0.6)
|
|
Other reserves
|
|
(16.4)
|
(6.8)
|
2.5
|
3.6
|
|
Retained earnings
|
|
125.5
|
185.8
|
143.8
|
248.8
|
|
Total shareholders' equity
|
|
148.0
|
217.8
|
185.2
|
291.2
|
|
Non-controlling interests
|
|
0.6
|
0.5
|
-
|
-
|
|
Total equity
|
|
148.6
|
218.3
|
185.2
|
291.2
|
Consolidated cash flow
statement
for the year
ended 31 December 2023
|
|
|
Group
|
Company
|
|
|
Notes
|
31 December
2023
£m
|
31 December
2022
£m
|
31 December
2023
£m
|
31 December
2022
£m
|
|
Loss for the year
|
|
(62.3)
|
(10.8)
|
(106.5)
|
(11.6)
|
|
Tax (credit)/charge
|
|
12.0
|
4.7
|
2.8
|
(0.5)
|
|
Adjustments to reconcile (loss)/profit before
tax to net cash flows
|
|
|
|
|
|
|
 Depreciation and amortisation
|
|
41.2
|
41.1
|
0.6
|
0.8
|
|
 Impairments
|
|
28.1
|
0.7
|
75.6
|
27.7
|
|
Loss on remeasurement to fair value less costs
to sell
|
|
-
|
13.3
|
-
|
-
|
|
 Net finance expense/(income)
|
|
21.3
|
10.3
|
(7.2)
|
(6.1)
|
|
Loss/(gain) on disposal of businesses, net of
disposal costs
|
|
2.1
|
(2.5)
|
2.1
|
-
|
|
 Gains on disposals of property, plant and
equipment
|
|
(2.5)
|
(1.1)
|
-
|
-
|
|
 Other non-cash items
|
|
(1.3)
|
(0.6)
|
(0.6)
|
0.1
|
|
Decrease/(increase) in inventories
|
|
0.1
|
(3.2)
|
-
|
-
|
|
Decrease/(increase) in trade and other
receivables
|
|
10.7
|
2.5
|
(0.4)
|
(3.9)
|
|
(Decrease)/increase in trade and other
payables
|
|
(4.1)
|
(1.9)
|
14.9
|
5.2
|
|
Defined benefit pension cash contributions less
service cost
|
|
1.1
|
0.1
|
(0.2)
|
0.3
|
|
Cash generated from operations
|
|
46.4
|
52.6
|
(18.9)
|
12.0
|
|
Income tax payments
|
|
(8.6)
|
(8.1)
|
-
|
(0.1)
|
|
Cash flow from operating activities
|
|
37.8
|
44.5
|
(18.9)
|
11.9
|
|
Investing activities
|
|
|
|
|
|
|
Dividends from joint venture
undertakings
|
|
1.2
|
1.7
|
-
|
-
|
|
Proceeds from the disposal of a subsidiary, net
of cash disposed
|
|
(3.2)
|
15.1
|
(3.2)
|
-
|
|
Proceeds from the disposal of property, plant
and equipment*
|
|
25.6
|
2.2
|
-
|
-
|
|
Finance income
|
|
2.9
|
0.8
|
27.6
|
14.7
|
|
Acquisition of subsidiaries, net of cash
acquired
|
|
-
|
(2.6)
|
-
|
-
|
|
Loans advanced to subsidiaries
|
|
-
|
-
|
(15.3)
|
(34.8)
|
|
Loans repaid from subsidiaries
|
|
-
|
-
|
26.3
|
32.8
|
|
Acquisition of property, plant and
equipment
|
|
(29.4)
|
(31.7)
|
(0.2)
|
(0.4)
|
|
Development expenditure
|
|
(1.8)
|
(1.3)
|
-
|
-
|
|
Cash flows (used in)/from investing
activities
|
|
(4.7)
|
(15.8)
|
35.2
|
12.3
|
|
Financing activities
|
|
|
|
|
|
|
Finance costs
|
|
(15.7)
|
(7.5)
|
(15.9)
|
(7.2)
|
|
Acquisition of non-controlling interests
(NCI)
|
|
-
|
(1.5)
|
-
|
-
|
|
Capital element of lease repayments
|
|
(18.1)
|
(14.5)
|
(0.4)
|
(0.2)
|
|
Proceeds from borrowings
|
|
198.1
|
166.0
|
198.1
|
166.0
|
|
Repayment of borrowings
|
|
(191.7)
|
(182.6)
|
(191.7)
|
(182.5)
|
|
Cash flows used in financing
activities
|
|
(27.4)
|
(40.1)
|
(9.9)
|
(23.9)
|
|
Net increase in cash and cash
equivalents
|
10
|
5.7
|
(11.4)
|
6.4
|
0.3
|
|
Cash and cash equivalents at 1
January
|
|
22.8
|
34.5
|
(8.3)
|
(8.6)
|
|
Net foreign exchange differences
|
|
(1.7)
|
2.5
|
(0.9)
|
-
|
|
Cash transferred to asset held for
sale
|
|
(0.4)
|
(2.8)
|
-
|
-
|
|
Cash and cash equivalents at 31
December
|
|
26.4
|
22.8
|
(2.8)
|
(8.3)
|
* Proceeds from disposal of property
plant and equipment includes £19.8m (2022: £nil) from assets held
for sale (see Note
8).
Consolidated statement of changes
in equity
for the year
ended 31 December 2023
|
|
Share
capital
£m
|
Share
premium
£m
|
Retained
earnings
£m
|
Other
reserves
£m
|
Treasury
shares
£m
|
Total
shareholders'
equity
£m
|
Non-
controlling
interests
£m
|
Total
equity
£m
|
|
At 1 January 2022
|
12.6
|
26.8
|
191.5
|
(20.4)
|
(0.6)
|
209.9
|
0.7
|
210.6
|
|
Loss for the year
|
-
|
-
|
(11.1)
|
-
|
-
|
(11.1)
|
0.3
|
(10.8)
|
|
Other comprehensive income
|
-
|
-
|
5.8
|
12.2
|
-
|
18.0
|
0.1
|
18.1
|
|
Contributions by and distributions to
owners:
|
|
|
|
|
|
|
|
|
|
Remeasurement of non-controlling interest put
option
|
-
|
-
|
-
|
1.4
|
-
|
1.4
|
-
|
1.4
|
|
Changes in ownership interest without a change
in control
|
-
|
-
|
(0.9)
|
-
|
-
|
(0.9)
|
(0.6)
|
(1.5)
|
|
Share-based payments
|
-
|
-
|
0.5
|
-
|
-
|
0.5
|
-
|
0.5
|
|
At 31 December 2022
|
12.6
|
26.8
|
185.8
|
(6.8)
|
(0.6)
|
217.8
|
0.5
|
218.3
|
|
Loss for the year
|
-
|
-
|
(62.4)
|
-
|
-
|
(62.4)
|
0.1
|
(62.3)
|
|
Other comprehensive income
|
-
|
-
|
1.3
|
(9.7)
|
-
|
(8.4)
|
-
|
(8.4)
|
|
Contributions by and distributions to
owners:
|
|
|
|
|
|
|
|
|
|
Remeasurement of non-controlling interest put
option
|
-
|
-
|
-
|
0.1
|
-
|
0.1
|
-
|
0.1
|
|
Share-based payments
|
-
|
-
|
1.0
|
-
|
-
|
1.0
|
-
|
1.0
|
|
Sale of shares by ESOT
|
-
|
-
|
(0.2)
|
-
|
0.1
|
(0.1)
|
-
|
(0.1)
|
|
At 31 December 2023
|
12.6
|
26.8
|
125.5
|
(16.4)
|
(0.5)
|
148.0
|
0.6
|
148.6
|
Other reserve movements
|
Other reserves
|
Translation
reserve
£m
|
Hedging
reserve
£m
|
Put option
liability
£m
|
Total
£m
|
|
At 1 January 2022
|
(16.9)
|
(1.0)
|
(2.5)
|
(20.4)
|
|
Other comprehensive income
|
8.7
|
3.5
|
-
|
12.2
|
|
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
|
(8.1)
|
(1.6)
|
-
|
(9.7)
|
|
Remeasurement of non-controlling interest put
option
|
-
|
-
|
0.1
|
0.1
|
|
At 31 December 2023
|
(16.3)
|
0.9
|
(1.0)
|
(16.4)
|
Notes to the Preliminary
results
1. General information
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
consolidated financial statements comprise the financial statements
of the Company, its subsidiary undertakings and its interest in
associates and jointly controlled entities (together the Group),
The Company's shares are listed on the London Stock Exchange. The
Company and consolidated financial statements were approved for
publication by the Directors on 16 April 2024.
The financial information set out
above does not constitute the company's statutory accounts for the
years ended 31 December 2023 or 2022 but is derived from those
accounts. Statutory accounts for 2022 have been delivered to the
registrar of companies, and those for 2023 will be delivered in due
course. The auditor has reported on those accounts; their reports
were (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 (iii) did not contain a statement under section 498
(2) or (3) of the Companies Act 2006.
Going concern
In determining the appropriate
basis of preparation of the financial statements ended
31 December 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.
On 6 June 2023, the Group signed a
£209.9m secured revolving credit facility, maturing in March 2025
(the "RCF"), which was provided by the six pre-existing lenders to
the Group.
There are a number of mandatory
repayments (both scheduled and where cash is generated from
disposals) incorporated into the facility terms. At the time when
the facility terms were negotiated, the timing of these repayments
were intended to align with forecast cash inflows. However, as cash
inflows can vary from forecast due to timings of projects and
revenue receipts, prior to the year end, the Group obtained
appropriate waivers to alter the phasing and quantum of the
December 2023 mandatory repayment. This quantum of this mandatory
repayment has been reduced and is now due in June 2024. As a
result, the facility was reduced by the debt repayments leaving
committed facilities at 31 December 2023 of £192.7m (2022: £247.5m)
and undrawn committed facilities of £24.7m (2022:
£88.0m).
The facility contains a restriction
on capital expenditure spend as well as minimum liquidity
requirements. It also contains reducing Net debt/ EBITDA covenants
and increasing interest cover requirements throughout the facility
and certain non-financial covenants. The Group, with the ongoing
support of the banking syndicate, has remained in compliance with
all covenants and remained so at the 31 December 2023 measurement
date.
The Group's net debt for the
purposes of banking covenants consists of net bank borrowings
adjusted for finance lease liabilities (on a pre-IFRS 16 basis) and
advance payment guarantees. The net debt for covenant purposes was
£149.7m as at 31 December 2023 and the net debt/ EBITDA ratio of
2.75 times (2022 2.7 times). This remains above the Group's
target range of 1-1.5 times. The Group was
in compliance with all financial covenants for the year ended 31
December 2023.
In anticipation of covenant
compliance throughout the going concern assessment period being
challenging based on the original requirements of the RCF,
subsequent to the year end the Group has agreed with the banking
syndicate to reset the covenant levels on the net debt/EBITDA and
interest cover ratios, and minimum liquidity, under the RCF to less
onerous levels for the remaining duration of the facility.
The testing requirement has also been altered from
monthly to quarterly for the net debt/EBITDA
covenant.
Going concern assessment period
Accounting standards require the
directors to assess the Group'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 considering any known liquidity
events that will occur after the twelve-month period. Given that
the RCF matures in March 2025, the directors concluded that the
twelve-month going concern assessment period to 30 April 2025 is
appropriate.
Board assessment
Base case
The Group has prepared its base
case based on the budget/plan for the period to 30 April
2025.
The base case also considers
downside risks to business performance that could arise in the
period and restricts capital expenditure in line with the limit for
FY24 in the RCF. Given parts of the Group's business involves
securing new contracts which can be delayed or cancelled, cash
flows have been adjusted to take account of such risks
materialising. Although the intention of the Group is to continue
the disposals of non-strategic assets and businesses, the base case
does not include such disposals or acquisitions as these are not in
the direct control of the Group.
The forecasts also take account of
the macro-economic environment such as potential increases in
interest rates, inflationary pressures and shifts in market trends.
The base case demonstrated the Company would have headroom against
its facilities and would comply with financial covenants over the
going concern assessment 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 21% in the full year to
December 2024 from the adjusted base budget and a reduction of 23%
January 2025 to April 2025;
§cash inflow
disruptions that may result from late payments from customers or
project delivery challenges; and
§ further short term
increases in interest rates from the current rate of 5.25% to 5.5%
SONIA rate between June 2024 and December 24.
Under a combination of all of the
above downside scenarios ("the combined severe but plausible
scenario"), prior to mitigating actions within the control of
management, the forecasts indicate that the Directors would
potentially need to request a waiver from the lenders in relation
to the mandatory repayment of £3.5m that is required in June 2024,
and seek additional funding, in order for the Group to continue to
meet its liabilities as they fall due. The combined severe but
plausible scenario also results in limited headroom on financial
covenant compliance in the going concern assessment period, prior
to mitigating actions. However, the Directors are confident that
they have a number of controllable mitigating actions that could be
implemented regardless of whether a waiver for the mandatory
repayment from the lenders is obtained, including reducing
discretionary spend on certain projects and hiring freezes. After
the effect of these mitigations the combined severe but plausible
scenario indicates that the Group can make the June repayment and
would remain cash positive and in compliance will all financial
covenants, albeit with limited headroom. In addition, whilst not a
controllable mitigation, the Directors will also seek to negotiate
an extension of creditor terms with certain suppliers if
required.
In addition, due to the quarterly
and monthly covenant testing requirements within the RCF, there is
an inherent timing risk associated with both profits and large
project related customer receipts. Therefore there is a
risk that should the combined severe but plausible scenario
outlined above materialise, additional support from the lender
group may be necessary to avoid any temporary non-compliance with
covenants. The Group will continue to actively manage its cashflow
to mitigate this risk and operate within the terms of the
RCF.
As part of the RCF, there is a
non-financial covenant that requires the Group to provide signed
audited financial statements for all guarantors party to the
banking arrangement within 180 days of the year end. As at 31
December 2023, the Group has obtained a waiver from the banks for
certain guarantors where this covenant requirement has not been met
in respect of 31 December 2022 audited financial statements. 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.
Expiry of RCF during the going concern assessment
period
As noted above, the RCF expires on
31 March 2025. The ability to refinance is not fully within the
control of the Directors, however the Group has successfully
negotiated facilities in the past and is also looking to deleverage
its balance sheet within the next 12 months with various planned
disposals of non-strategic businesses together with asset sales. On
22 March 2024, the Group announced that it entered into an
agreement for sale of the entire issued share capital of
RMSpumptools Limited (RMS) the estimated net proceeds of which are
approximately £83m. These proceeds will be used to reduce leverage
and strengthen the Group's balance sheet. The disposal is
expected to complete early in H2 2024, subject to certain
conditions. Demonstrating the ability of the Group to reduce debt
levels to within our target net debt / EBITDA range of 1-1.5x
before a refinancing is undertaken should make it easier to execute
the Group's refinancing plan and put in place new facilities during
2024 on more favourable terms than the current facility. The
Directors acknowledge that within the existing terms of the RCF
upon completion of disposals amounts borrowed under the RCF are
required to be repaid but these amounts are not specified. Should
the disposal of RMS occur the Directors are confident that this
would not result in a scenario worse than the combined severe but
plausible scenario for liquidity however there would be a breach of
the interest cover covenant in December 2024 under the current RCF
as the covenant is calculated on a twelve-month rolling basis. The
Directors also expect that the new facilities on more favourable
terms will be in place prior to December 2024. Should the RMS
disposal or alternative planned disposals not successfully
complete, the Directors may need to consider other refinancing
alternatives when the existing RCF expires.
Assessment Conclusion
Based on their assessment, the
Directors believe it remains appropriate to prepare the financial
statements on a going concern basis. However, the Directors
recognise that the reliance on successful mitigating actions
and, potentially, a waiver of the June 2024 mandatory repayment
under the combined severe but plausible scenario, and the ability
to refinance the RCF, which matures within the going concern
assessment period, indicate the existence of a material
uncertainty, related to events or conditions that may cast
significant doubt on the Group's and the company's ability to
continue as a going concern and, therefore, that the group and
company may be unable and to realise their assets and discharge
their liabilities in the normal course of business. The
financial statements do not include any adjustments that would
result from the basis of preparation being
inappropriate.
2. 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.
During the year a review of the
measures was undertaken and as a consequence the ROCE measure (2.4
below) and the Underlying EPS measure (2.6 below) have been updated
to reflect earnings from continuing operations, thereby excluding
the results of discontinued operations which is non-recurring and thereby improves comparability between periods and peers'.
The following APMs are referred to
in the Annual Report and Accounts and described in the following
paragraphs.
2.1 Underlying operating profit
Underlying operating profit is
defined as operating profit from continuing operations 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.
|
|
Continuing operations
|
|
2023
Continuing operations
|
As
reported
£m
|
Amortisation
of acquired
intangible
assets
£m
|
Impairment
charges/
(reversals)
£m
|
Refinancing
£m
|
Re-
structuring
£m
|
Disposal of businesses
and assets
£m
|
Other/Tax
£m
|
Underlying
results
£m
|
|
|
Revenue
|
496.2
|
-
|
-
|
-
|
-
|
-
|
-
|
496.2
|
|
|
Cost of sales
|
(360.3)
|
-
|
-
|
-
|
-
|
(1.8)
|
-
|
(362.1)
|
|
|
Gross profit
|
135.9
|
-
|
-
|
-
|
-
|
(1.8)
|
-
|
134.1
|
|
|
Administrative expenses
|
(109.6)
|
1.1
|
-
|
-
|
-
|
0.1
|
2.8
|
(105.6)
|
|
|
Impairment charges
|
(28.4)
|
-
|
28.1
|
-
|
-
|
-
|
-
|
(0.3)
|
|
|
Refinancing costs
|
(12.2)
|
-
|
-
|
12.2
|
-
|
-
|
-
|
-
|
|
|
Restructuring costs
|
(5.7)
|
-
|
-
|
-
|
5.7
|
-
|
-
|
-
|
|
|
Share of post-tax results of
associates
|
1.4
|
-
|
-
|
-
|
-
|
-
|
-
|
1.4
|
|
|
Operating profit/(loss)
|
(18.6)
|
1.1
|
28.1
|
12.2
|
5.7
|
(1.7)
|
2.8
|
29.6
|
|
|
Finance income
|
3.2
|
-
|
-
|
-
|
-
|
-
|
-
|
3.2
|
|
|
Finance expense
|
(24.5)
|
-
|
-
|
-
|
-
|
-
|
-
|
(24.5)
|
|
|
(Loss)/profit before
taxation
|
(39.9)
|
1.1
|
28.1
|
12.2
|
5.7
|
(1.7)
|
2.8
|
8.3
|
|
|
Income tax
|
(11.0)
|
(0.3)
|
-
|
-
|
-
|
-
|
5.3
|
(6.0)
|
|
|
(Loss)/profit for the year from
continuing operations
|
(50.9)
|
0.8
|
28.1
|
12.2
|
5.7
|
(1.7)
|
8.1
|
2.3
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the year from
discontinued operations, net of tax
|
(11.4)
|
-
|
-
|
-
|
-
|
-
|
-
|
(11.4)
|
|
|
(Loss)/profit for the
year
|
(62.3)
|
0.8
|
28.1
|
12.2
|
5.7
|
(1.7)
|
8.1
|
(9.1)
|
|
|
Operating margin (%)
|
(3.7)%
|
|
|
|
|
|
|
6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmental underlying operating
profit is calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
Energy
|
9.5
|
0.6
|
2.1
|
-
|
3.6
|
(0.4)
|
0.3
|
15.7
|
|
|
Defence
|
(23.7)
|
-
|
24.7
|
-
|
0.5
|
-
|
-
|
1.5
|
|
|
Maritime Transport
|
21.7
|
0.5
|
1.3
|
-
|
1.5
|
(1.4)
|
(0.3)
|
23.3
|
|
|
Corporate
|
(26.1)
|
-
|
-
|
12.2
|
0.1
|
0.1
|
2.8
|
(10.9)
|
|
|
Continuing operations
|
(18.6)
|
1.1
|
28.1
|
12.2
|
5.7
|
(1.7)
|
2.8
|
29.6
|
|
During the year, adjusting items
were in relation to the following matters:
The amortisation of acquired
intangibles.
The impairment charges/(reversals)
relate to goodwill, right-of-use vessels, tangible assets and
investments.
Refinancing is related to the costs
of signing of the new RCF, refinancing strategy, obtaining a waiver
from the Group's lenders and completion of various requirements and
conditions of the RCF.
Restructuring costs relates to the
transformation programme aimed at simplification, rationalisation
and integration of the Group's businesses across all three
Divisions and includes £3.1m in relation to the closure of the
Subtech Europe business in the Energy Division.
Disposal of businesses and assets
primarily relates to a gain of £1.4m on disposal of a vessel in the
Maritime Transport Division.
Other primarily relates to £2.2m
past service costs recognised for the MNRPF scheme as part of the
review of the Fund's administrative and benefit practices carried
out by the Fund's lawyers.
£4.7m of the tax charge relates to
de-recognition of the brought forward net UK deferred tax asset as
at 31 December 2022. An assessment was undertaken leading
to de-recognition of a deferred tax asset which has a
significant and non-recurring impact in the current
year.
|
|
Continuing operations
|
|
2022
Continuing operations
|
As
reported
£m
|
Amortisation
of acquired
intangible
assets
£m
|
Impairment
charges/
(reversals)
£m
|
Specific
trade
receivables
provision
£m
|
Re-
structuring
£m
|
Disposal of businesses
and assets
£m
|
Other/Tax
£m
|
Underlying
results
£m
|
|
Revenue
|
478.1
|
-
|
-
|
-
|
-
|
-
|
-
|
478.1
|
|
Cost of sales
|
(350.9)
|
-
|
(4.5)
|
-
|
-
|
(0.9)
|
-
|
(356.3)
|
|
Gross profit
|
127.2
|
-
|
(4.5)
|
-
|
-
|
(0.9)
|
-
|
121.8
|
|
Administrative expenses
|
(97.5)
|
2.1
|
-
|
-
|
-
|
(2.5)
|
1.7
|
(96.2)
|
|
Impairment charges
|
(4.9)
|
-
|
5.2
|
(1.1)
|
-
|
-
|
-
|
(0.8)
|
|
Restructuring costs
|
(1.7)
|
-
|
-
|
-
|
1.7
|
-
|
-
|
-
|
|
Share of post-tax results of
associates
|
1.6
|
-
|
-
|
-
|
-
|
-
|
-
|
1.6
|
|
Operating profit/(loss)
|
24.7
|
2.1
|
0.7
|
(1.1)
|
1.7
|
(3.4)
|
1.7
|
26.4
|
|
Finance income
|
0.7
|
-
|
-
|
-
|
-
|
-
|
-
|
0.7
|
|
Finance expense
|
(10.9)
|
-
|
-
|
-
|
-
|
-
|
-
|
(10.9)
|
|
Profit/(loss) before
taxation
|
14.5
|
2.1
|
0.7
|
(1.1)
|
1.7
|
(3.4)
|
1.7
|
16.2
|
|
Income tax
|
(5.5)
|
-
|
-
|
-
|
-
|
-
|
0.8
|
(4.7)
|
|
Profit/(loss) for the year from
continuing operations
|
9.0
|
2.1
|
0.7
|
(1.1)
|
1.7
|
(3.4)
|
2.5
|
11.5
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the year from
discontinued operations, net of tax
|
(19.8)
|
-
|
-
|
-
|
-
|
-
|
-
|
(19.8)
|
|
(Loss)/profit for the
year
|
(10.8)
|
2.1
|
0.7
|
(1.1)
|
1.7
|
(3.4)
|
2.5
|
(8.3)
|
|
Operating margin (%)
|
5.2%
|
|
|
|
|
|
|
5.5%
|
|
|
|
|
|
|
|
|
|
|
|
Segmental underlying operating
profit is calculated as follows:
|
|
|
|
|
|
|
|
|
|
Energy
|
16.4
|
1.6
|
(0.8)
|
(1.1)
|
-
|
(2.5)
|
0.2
|
13.8
|
|
Defence
|
(3.5)
|
0.1
|
1.8
|
-
|
1.3
|
-
|
-
|
(0.3)
|
|
Maritime Transport
|
19.2
|
0.4
|
(0.3)
|
-
|
0.4
|
(0.9)
|
-
|
18.8
|
|
Corporate
|
(7.4)
|
-
|
-
|
-
|
-
|
-
|
1.5
|
(5.9)
|
|
Continuing operations
|
24.7
|
2.1
|
0.7
|
(1.1)
|
1.7
|
(3.4)
|
1.7
|
26.4
|
During 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.
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 £18.5m proceeds with £4.3m
gains less £1.8m costs of disposal. In addition, the Group has
recognised a gain of £0.9m on disposal of one of its vessels in the
Maritime Transport Division.
Other includes £1.5m past service
cost recognised for the MNRPF scheme in respect of ill health early
retirement benefits.
2.2 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 ROU
depreciation and operating lease payments.
|
|
2023
£m*
|
2022
£m*
|
|
Underlying operating profit
|
29.6
|
26.4
|
|
Depreciation and amortisation
|
41.2
|
40.3
|
|
Less: Depreciation on right-of-use
assets
|
(16.3)
|
(12.2)
|
|
Amortisation of acquired intangibles
|
(1.1)
|
(2.1)
|
|
IFRS 16 impact removed
|
1.0
|
0.2
|
|
Covenant EBITDA
|
54.4
|
52.6
|
* Excludes discontinued
operations.
2.3 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 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 IFRS 16.
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
£m
|
2022
£m
|
|
Net borrowings
|
201.1
|
185.8
|
|
Less: right-of-use operating
leases1
|
(56.9)
|
(46.0)
|
|
Guarantees and collateral deposits
|
5.6
|
2.3
|
|
Underlying net borrowings
|
149.8
|
142.1
|
|
Covenant EBITDA
|
54.4
|
52.6
|
|
Net debt:EBITDA
|
2.75
|
2.70
|
1 In accordance with IFRS 16 Leases, the Group has recognised a
lease liability of £61.2m at 31 December 2023. Under the
calculation of "net debt - covenant basis", only those leases which
would be classified as finance leases under IAS 17 Leases, the
standard superceded by IFRS 16, are considered to be debt. Of the
£61.2m lease liability recognised under IFRS 16, only £4.3m would
be classified as finance leases under IAS 17 and accordingly £56.9m
is adjustment in the net debt calculation.
2.4 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 from continuing activities,
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
£m
|
2022
£m
|
|
Net assets
|
148.6
|
218.3
|
|
Less right-of-use assets
|
(67.4)
|
(52.3)
|
|
Plus net borrowings
|
201.1
|
185.8
|
|
Capital employed
|
282.3
|
351.8
|
|
Add: amortisation of customer
relationships
|
1.0
|
1.6
|
|
|
283.3
|
353.4
|
|
|
|
|
|
Underlying operating profit
|
29.6
|
26.4
|
|
Notional tax at the underlying effective tax
rate
|
(8.6)
|
(7.5)
|
|
|
21.0
|
18.9
|
|
Average capital employed
|
318.4
|
355.1
|
|
Return on average capital employed
|
6.6%
|
5.3%
|
|
Year ended 31 December
2023
|
Energy
£m
|
Defence
£m
|
Maritime Transport
£m
|
|
Net assets
|
156.6
|
51.6
|
83.8
|
|
Less right-of-use assets
|
(14.3)
|
(3.8)
|
(48.7)
|
|
Plus net borrowings
|
16.4
|
3.9
|
39.7
|
|
Capital employed
|
158.7
|
51.7
|
74.8
|
|
Add: amortisation of customer
relationships
|
0.5
|
-
|
0.4
|
|
|
159.2
|
51.7
|
75.2
|
|
|
|
|
|
|
Underlying operating profit
|
15.7
|
1.5
|
23.3
|
|
Average capital employed
|
168.4
|
68.5
|
77.1
|
|
Return on average capital employed
|
9.3%
|
2.1%
|
30.3%
|
|
Year ended 31 December 2022
|
Energy
£m
|
Defence
£m
|
Maritime Transport
£m
|
|
Net assets
|
172.3
|
84.9
|
82.8
|
|
Less right-of-use assets
|
(9.2)
|
(3.0)
|
(39.0)
|
|
Plus net borrowings
|
13.4
|
3.3
|
34.8
|
|
Capital employed
|
176.5
|
85.2
|
78.6
|
|
Add: amortisation of customer
relationships
|
1.1
|
0.1
|
0.4
|
|
|
177.6
|
85.3
|
79.0
|
|
|
|
|
|
|
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%
|
2.5 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 IFRS16 impact, to
covenant interest.
|
|
2023
£m
|
2022
£m
|
|
Interest payable on bank loans less interest
receivable on short-term deposits
|
17.6
|
8.1
|
|
Finance lease interest
|
0.1
|
0.1
|
|
Loan arrangement and other financing
fees
|
(4.4)
|
(1.0)
|
|
Covenant interest
|
13.3
|
7.2
|
|
|
|
|
|
Underlying net operating profit
|
29.6
|
26.4
|
|
IFRS 16 impact removed
|
0.3
|
(0.7)
|
|
|
29.9
|
25.7
|
|
Interest cover
|
2.2
|
3.5
|
2.6 Underlying earnings per share
Underlying earnings per share (EPS)
is calculated as the total of underlying profit before tax from
continuing activities, less income tax, but excluding the tax
impact on adjusting items and adjusted for deferred tax on finance
charges, 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
£m
|
2022
£m
|
|
Loss attributable to owners of the
Company
|
(51.0)
|
8.7
|
|
Adjusting items
|
48.2
|
1.7
|
|
Tax on adjusted items
|
5.0
|
0.8
|
|
Deferred tax on finance charges
|
3.6
|
-
|
|
Underlying loss attributable to owners of the
Company
|
5.8
|
11.2
|
|
|
|
|
|
Basic weighted average number of
shares
|
50,358,388
|
50,345,989
|
|
Diluted weighted average number of
shares
|
50,634,837
|
50,367,147
|
|
Underlying basic earnings per share
|
11.4
|
22.3
|
|
Underlying diluted earnings per
share
|
11.4
|
22.3
|
3. Segmental information
From 1 January 2023, the Group has
been re-organised into three operating segments reviewed by the
Board: Energy, Defence, and Maritime Transport. The Energy Division
combines the old Marine Support and Offshore Oil Divisions, minus
Fendercare, which is added to the Tankships Division to create
Maritime Transport. Specialist Technical (JFD business) is the only
component of the Defence Division. The comparative segmental
information for 2022 has been restated accordingly. Energy and
Defence are differentiated by markets and industries which they
serve. The Maritime Transport Division is differentiated by the
services which they provide. The Board assesses the performance of
the segments based on underlying operating profit, underlying
operating margin and return on capital employed. It considers that
this information is the most relevant in evaluating the performance
of its segments relative to other entities which operate in similar
markets. Inter-segmental sales are made using prices determined on
an arm's 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.
The Group's principal products and
services by division are disclosed in the table below, together
with information regarding performance obligations and revenue
recognition. Revenue is recognised by the Group as contractual
performance obligations to customers are completed.
|
Division
|
Principal products and services
|
Performance obligations
|
Revenue recognition
|
|
Energy
|
Products - Artificial lift
special completion technology and software
|
Point in time
Over time
|
-
On despatch or delivery, depending on contract
terms.
-
Customer acceptance of goods
-
Based on right of use/ right of access
Based on costs incurred or
straight-line over licence term
|
|
Services - Blade repairs, high
voltage cable laying well testing, hire of air compressors, steam
generators, heat suppression equipment (including
personnel)
Specialist subsea services, site
preparation
asset management, offshore wind
control room services, inspection, repair, and maintenance
services
Engineering and design solutions,
production, installation, and commissioning services, nanobubble
oxygenation service, full project support for offshore and subsea
operations, decommissioning services
|
Over time
Point in time
|
-
Acceptance from customer
-
Customer approved timesheets
-
Time based monthly billing
-
Stage of completion, input/output measure based
on costs incurred as a proportion of total costs/
achievement of KPIs or milestones.
-
Acceptance from customer
|
|
Defence
|
Products - General diving
equipment, spares, breathing machines, and subsea equipment for
commercial and defence applications.
|
Point in time
|
- On despatch or delivery, depending on contract
terms
|
|
Services - Submarine rescue
services (Ad hoc Tasks), Military diving equipment servicing
(Taskings)
Submarine Rescue Services, Military
diving equipment servicing (Core - In Service Support)
Submarine Rescue Services (Training
Exercises/ Mid Life Refits)
|
Point in time
Over time
Over time
|
- Acceptance from customer
- Completion of test
- Output basis/ achievement of Key performance indicators
(KPI's)
- Stage of completion, input measure based on costs incurred as
a proportion of total expected costs
|
|
Construction contracts - Dive
support vessels, submarine platform equipment, components and
assemblies, tactical diving vehicles and carrier seals
(subsea/surface craft) and recompression chambers
|
Over time
|
- Stage of completion, input measure based on costs incurred as
a proportion of total costs.
|
|
Maritime Transport
|
Products - Fenders, safety, and
monitoring equipment
|
Point in time
|
- On despatch or delivery, depending on contract
terms
|
|
Services - Transport, storage
of chemicals and petroleum, ship to ship transfer and port
services
|
Over time
|
- Stage of completion output measure based on specific
milestones in process.
- Vessel tendering notice of readiness to enter the
port
|
|
Year ended 31 December 2023
|
Energy
£m
|
Defence
£m
|
Maritime Transport
£m
|
Continuing
total
£m
|
Discontinued
total
£m
|
Total
£m
|
|
Revenue recognised at a point in
time
|
195.4
|
52.4
|
35.3
|
283.1
|
1.1
|
284.3
|
|
Revenue recognised over time
|
71.1
|
20.1
|
121.9
|
213.1
|
5.6
|
218.6
|
|
Revenue
|
266.5
|
72.5
|
157.2
|
496.2
|
6.7
|
502.9
|
|
Year ended 31 December 2022
|
Energy
£m
|
Defence
£m
|
Maritime Transport
£m
|
Continuing
total
£m
|
Discontinued
total
£m
|
Total
£m
|
|
Revenue recognised at a point in
time
|
168.4
|
52.1
|
33.4
|
253.9
|
4.1
|
258.0
|
|
Revenue recognised over time
|
74.2
|
16.1
|
133.9
|
224.2
|
38.7
|
262.9
|
|
Revenue
|
242.6
|
68.2
|
167.3
|
478.1
|
42.8
|
520.9
|
|
Year ended 31 December 2023
|
Products
£m
|
Services
£m
|
Construction contracts
£m
|
Continuing
total
£m
|
Discontinued
total
£m
|
Total
£m
|
|
Energy
|
53.5
|
201.9
|
11.1
|
266.5
|
6.7
|
273.2
|
|
Defence
|
20.9
|
47.7
|
3.9
|
72.5
|
-
|
72.5
|
|
Maritime Transport
|
35.3
|
121.9
|
-
|
157.2
|
-
|
157.2
|
|
Revenue
|
109.7
|
371.5
|
15.0
|
496.2
|
6.7
|
502.9
|
|
Year ended 31 December 2022
|
Products
£m
|
Services
£m
|
Construction contracts
£m
|
Continuing
total
£m
|
Discontinued
total
£m
|
Total
£m
|
|
Energy
|
51.0
|
180.2
|
11.4
|
242.6
|
42.8
|
285.4
|
|
Defence
|
17.2
|
47.8
|
3.2
|
68.2
|
-
|
68.2
|
|
Maritime Transport
|
33.4
|
133.9
|
-
|
167.3
|
-
|
167.3
|
|
Revenue
|
101.6
|
361.9
|
14.6
|
478.1
|
42.8
|
520.9
|
Included in services revenue, is
revenue from operating lease rental income of £7.9m (2022: £10.3m)
which is accounted for under IFRS 16: Leases. Property, plant and
equipment which is used to generate operating lease rental income
is detailed in Note 14. The nature of the leasing activities in the
period are various short-term equipment leases in Energy and
Maritime Transport Divisions.
Within the Energy Division, there
are specific maintenance contracts which include variable
consideration related to performance-based achievements over a
number of years. Reflecting on the contract terms, the
susceptibility of factors outside of the entity's control that
would impact the consideration and the limited experience history
management has on these specific maintenance contracts, management
have concluded that the variable consideration should be
constrained. On this basis £nil of the £5.0m variable consideration
within these contracts has been recognised in the period, otherwise
there is a risk of subsequent reversal when the uncertainty is
subsequently resolved.
|
Year ended 31 December 2023
|
Energy
£m
|
Defence
£m
|
Maritime Transport
£m
|
Corporate
£m
|
Continuing
total
£m
|
Discontinued
total
£m
|
Total
£m
|
|
Segmental revenue
|
266.5
|
72.6
|
157.2
|
-
|
496.3
|
6.8
|
503.1
|
|
Inter-segmental sales
|
-
|
(0.1)
|
-
|
-
|
(0.1)
|
(0.1)
|
(0.2)
|
|
Revenue
|
266.5
|
72.5
|
157.2
|
-
|
496.2
|
6.7
|
502.9
|
|
|
|
|
|
|
|
|
|
|
Underlying operating profit/(loss)
|
15.7
|
1.5
|
23.3
|
(10.9)
|
29.6
|
(11.4)
|
18.2
|
|
APMs (see Note 2)
|
(6.2)
|
(25.2)
|
(1.6)
|
(15.2)
|
(48.2)
|
-
|
(48.2)
|
|
Operating profit/(loss)
|
9.5
|
(23.7)
|
21.7
|
(26.1)
|
(18.6)
|
(11.4)
|
(30.0)
|
|
Finance income
|
|
|
|
|
3.2
|
-
|
3.2
|
|
Finance expense
|
|
|
|
|
(24.5)
|
-
|
(24.5)
|
|
Loss before tax
|
|
|
|
|
(39.9)
|
(11.4)
|
(51.3)
|
|
Income tax
|
|
|
|
|
(11.0)
|
-
|
(11.0)
|
|
Loss for the year
|
|
|
|
|
(50.9)
|
(11.4)
|
(62.3)
|
|
|
|
|
|
|
|
|
|
|
Assets and liabilities
|
|
|
|
|
|
|
|
|
Segmental assets
|
226.8
|
80.0
|
154.5
|
88.5
|
549.8
|
-
|
549.8
|
|
Investment in joint ventures
|
2.6
|
3.3
|
2.5
|
-
|
8.4
|
-
|
8.4
|
|
Total assets
|
229.4
|
83.3
|
157.0
|
88.5
|
558.2
|
-
|
552.2
|
|
Segmental liabilities
|
(72.8)
|
(31.7)
|
(73.2)
|
(231.9)
|
(409.6)
|
-
|
(409.6)
|
|
|
156.6
|
51.6
|
83.8
|
(143.4)
|
148.6
|
-
|
148.6
|
|
|
|
|
|
|
|
|
|
|
Other segmental information
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
28.7
|
6.3
|
27.9
|
0.1
|
63.0
|
-
|
63.0
|
|
Depreciation and amortisation
|
17.4
|
4.2
|
19.3
|
0.4
|
41.3
|
-
|
41.3
|
* Capital
expenditure relates to additions within other intangible assets,
property, plant and equipment and right of use assets.
At 31 December 2023, there is £3.6m
(2022: £6.1m) consideration allocated to performance obligations
that were unsatisfied and expected to be recognised as revenue
within 12 months.
Revenue from discontinued
activities disclosed in the income statement is comprised of
products £0.6m (2022: £4.1m) services of £3.7m (2022: £23.6m) and
construction contract income of £2.3m (2022: £15.0m).
For details of the amount of
impairment losses and reversals of impairment losses recognised in
profit or loss during the period, see Note 2.1.
The following table shows the
maturity profile of operating lease receivables using the
undiscounted payments:
|
|
Within 1
year
£m
|
1 - 2
years
£m
|
2 - 3
years
£m
|
3 - 4
years
£m
|
4 - 5
years
£m
|
>5
years
£m
|
|
Operating lease receivables
|
8.1
|
0.9
|
0.9
|
-
|
-
|
-
|
|
Year ended 31 December
2022
|
Energy
£m
|
Defence
£m
|
Maritime Transport
£m
|
Corporate
£m
|
Continuing
total
£m
|
Discontinued
total
£m
|
Total
£m
|
|
Segmental revenue
|
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)
|
|
Revenue
|
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 2)
|
2.5
|
(3.1)
|
0.4
|
(1.5)
|
(1.7)
|
(13.3)
|
(15.0)
|
|
Operating profit/(loss)
|
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)
|
|
Profit/(loss) before tax
|
|
|
|
|
14.5
|
(20.6)
|
(6.1)
|
|
Income tax
|
|
|
|
|
(5.5)
|
0.8
|
(4.7)
|
|
Profit/(loss) for the year
|
|
|
|
|
9.0
|
(19.8)
|
(10.8)
|
|
|
|
|
|
|
|
|
|
|
Assets and 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
|
(81.5)
|
(33.0)
|
(74.6)
|
(185.3)
|
(374.4)
|
(16.3)
|
(390.7)
|
|
|
172.3
|
84.9
|
82.8
|
(121.7)
|
218.3
|
-
|
218.3
|
|
|
|
|
|
|
|
|
|
|
Other segmental information
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
16.7
|
5.4
|
31.2
|
0.2
|
53.5
|
0.4
|
53.9
|
|
Depreciation and amortisation
|
19.5
|
5.3
|
15.1
|
0.4
|
40.3
|
0.8
|
41.1
|
* Capital
expenditure relates to additions within other intangible assets,
property, plant and equipment and right of use
assets.
Geographic information
Geographical revenue is determined
by the location in which the product or service is provided. Where
customers receive the product or service in one geographical
location for use or shipment to another it is not practicable for
the Group to identify this, and the revenue is attributed to the
location of the initial shipment. The geographical allocation of
segmental assets and liabilities is determined by the location of
the attributable business unit.
|
|
United
Kingdom
|
Rest of
Europe
|
Middle East, Africa
& Americas
|
Asia
Pacific
|
Total
|
|
|
2023
£m
|
2022
£m
|
2023
£m
|
2022
£m
|
2023
£m
|
2022
£m
|
2023
£m
|
2022
£m
|
2023
£m
|
2022
£m
|
|
Continuing
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Segmental revenue
|
157.6
|
165.1
|
66.1
|
65.3
|
180.1
|
155.5
|
92.5
|
92.5
|
496.3
|
478.4
|
|
Inter-segmental sales
|
(0.1)
|
(0.3)
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.1)
|
(0.3)
|
|
Group revenue
|
157.5
|
164.8
|
66.1
|
65.3
|
180.1
|
155.5
|
92.5
|
92.5
|
496.2
|
478.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Segmental revenue
|
6.8
|
43.6
|
-
|
-
|
-
|
-
|
-
|
0.3
|
6.8
|
43.9
|
|
Inter-segmental sales
|
(0.1)
|
(1.1)
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.1)
|
(1.1)
|
|
Group revenue
|
6.7
|
42.5
|
-
|
-
|
-
|
-
|
-
|
0.3
|
6.7
|
42.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
|
|
|
|
|
|
|
|
|
|
|
|
Segmental non-current assets
|
203.2
|
209.9
|
38.7
|
40.9
|
26.3
|
26.8
|
18.7
|
34.9
|
286.9
|
312.5
|
|
Segmental current assets
|
191.5
|
177.0
|
8.8
|
7.1
|
37.0
|
53.2
|
25.6
|
34.2
|
263.9
|
271.5
|
|
Segmental assets
|
395.7
|
386.9
|
47.5
|
48.0
|
63.3
|
80.0
|
44.3
|
69.1
|
549.8
|
584.0
|
|
Investment in joint ventures
|
1.0
|
0.3
|
2.5
|
3.1
|
1.2
|
0.2
|
3.7
|
5.1
|
8.4
|
8.7
|
|
Segmental liabilities
|
(350.9)
|
(314.1)
|
(14.3)
|
(8.0)
|
(31.5)
|
(36.1)
|
(12.9)
|
(16.2)
|
(409.6)
|
(374.4)
|
|
|
44.8
|
73.1
|
35.7
|
43.0
|
33.0
|
44.1
|
35.1
|
58.0
|
148.6
|
218.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
|
|
|
|
|
|
|
|
|
|
|
|
Segmental non-current assets
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Segmental current assets
|
-
|
16.3
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
16.3
|
|
Segmental assets
|
-
|
16.3
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
16.3
|
|
Investment in joint ventures
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Segmental liabilities
|
-
|
(16.3)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(16.3)
|
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Major customer - No single
customer generates revenue greater than 10% of the consolidated
revenue.
4. 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 of businesses
within the Group. At 31 December 2022, the business had 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 had been
classified as a discontinued operation.
On 6 March 2023, the Group
announced that the entire share capital of James Fisher Nuclear
Holdings Limited and related properties was sold to Myneration
Limited, a wholly-owned investment vehicle of Rcapital Partners LLP
for a consideration of £3. The Group has retained certain parent
company guarantees which historically were given to support the
obligations of JFN.
|
Results of discontinued operations
|
2023
£m
|
2022
£m
|
|
Revenue
|
6.8
|
43.9
|
|
Inter-segmental sales
|
(0.1)
|
(1.1)
|
|
|
6.7
|
42.8
|
|
Expenses
|
(17.1)
|
(50.1)
|
|
Loss before taxation
|
(10.4)
|
(7.3)
|
|
Income tax
|
(1.0)
|
0.8
|
|
Loss from operating activities after
tax
|
(11.4)
|
(6.5)
|
|
Loss on remeasurement to fair value less costs
to sell
|
-
|
(13.3)
|
|
Loss for the year from discontinued
operations
|
(11.4)
|
(19.8)
|
|
|
|
|
|
Attributable to:
|
|
|
|
Owners of the Company
|
(11.4)
|
(19.8)
|
|
Non-controlling interests
|
-
|
-
|
|
|
(11.4)
|
(19.8)
|
|
Cash flows used in discontinued
operations
|
2023
£m
|
2022
£m
|
|
Net cash from operating activities
|
(0.4)
|
(3.1)
|
|
Net cash from investing activities
|
-
|
(5.0)
|
|
Net cash from financing activities
|
-
|
-
|
|
Net cash flows for the year
|
(0.4)
|
(8.1)
|
At 31 December 2022, the disposal
group was stated at fair value less costs to sell and comprised the
following assets and liabilities:
|
|
2022
£m
|
|
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
|
(13.8)
|
|
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 £13.3m loss was recognised in 2022 on remeasurement to fair
value less cost to sell, consisting of impairments of goodwill
(£8.1m), property, plant and equipment (£3.9m) and anticipated
costs of disposal (£1.3m).
The non-recurring fair value
measurement for the disposal group before £1.3m costs to sell had
been categorised as a Level 3 fair value based on the present value
of cash flows.
5. Taxation
(a) The tax charge is based on
profit for the year and comprises:
|
|
2023
£m
|
2022
£m
|
|
Current tax:
|
|
|
|
UK corporation tax
|
(0.1)
|
(1.2)
|
|
Overseas tax
|
(9.0)
|
(6.3)
|
|
Adjustment in respect of prior
years:
|
|
|
|
 UK corporation tax
|
-
|
0.5
|
|
 Overseas tax
|
0.1
|
0.2
|
|
Total current tax
|
(9.0)
|
(6.8)
|
|
Deferred tax:
|
|
|
|
Origination and reversal of temporary
differences:
|
|
|
|
Current year
|
|
|
|
 UK corporation tax - current year
|
1.9
|
0.7
|
|
 UK - write off of brought forward deferred tax
asset
|
(4.7)
|
-
|
|
 Overseas tax
|
1.0
|
(0.3)
|
|
Prior year
|
|
|
|
 UK corporation tax
|
(0.3)
|
0.9
|
|
 Overseas tax
|
0.1
|
-
|
|
Tax expense on continuing operations
|
(11.0)
|
(5.5)
|
The tax expense excludes a tax
charge from discontinued operations of £1.0m (2022: credit
£0.8m).
The total tax charge in the income
statement includes a further £0.2m (2022: £0.1m) which is stated
within the share of post-tax results of joint ventures.
6. Earnings per share
Basic earnings per share is
calculated by dividing the profit attributable to shareholders by
the weighted average number of ordinary shares in issue during the
year, after excluding 12,519 (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 shareholders
by the weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary shares
into ordinary shares.
At 31 December 2023, 2,649,876
options (2022: 1,759,740) were excluded from the diluted weighted
average number of ordinary shares calculation as their effect would
be anti-dilutive. 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.
The calculation of the basic and
diluted earnings per share is based on the following
data:
|
|
2023
£m
|
2022
£m
|
|
Loss after tax attributable to
shareholders
|
(62.4)
|
(11.1)
|
Weighted average number of
shares
|
|
2023
Number of
shares
|
2022
Number of
shares
|
|
Basic weighted average number of
shares
|
50,358,388
|
50,345,989
|
|
Potential exercise of share-based payment
schemes
|
-
|
21,158
|
|
Diluted weighted average number of
shares
|
50,358,388
|
50,367,147
|
|
Earnings per share
|
pence
|
pence
|
|
Basic earnings per share
|
(123.9)
|
(22.1)
|
|
Diluted earnings per share
|
(123.9)
|
(22.1)
|
|
Earnings per share - continuing
operations
|
pence
|
pence
|
|
Basic earnings per share
|
(101.2)
|
17.4
|
|
Diluted earnings per share
|
(101.2)
|
17.4
|
|
Earnings per share - discontinued
operations
|
pence
|
pence
|
|
Basic earnings per share
|
(22.7)
|
(39.5)
|
|
Diluted earnings per share
|
(22.7)
|
(39.5)
|
7. Dividends paid and
proposed
There were no dividends paid or
proposed in either 2023 or 2022.
8. Assets and liabilities held for
sale
At 31 December 2023, £12.3m assets
and £0.7m liabilities relate to a non-core business which has been
classified as held for sale.
At 31 December 2023, a vessel with
net book value £0.6m in the Maritime Transport division has been
classified as held for sale.
At 31 December 2023, £1.1m of
property in the Energy Division has been classified as held for
sale.
At 31 December 2023, a vessel with
net book value of £0.7m in the Energy Division has been classified
as held for sale.
The vessel in the Maritime
Transport division completed during January and the remaining
disposals are expected to complete during 2024.
In June 2021, Management agreed a
plan to sell the Dive Support Vessel (DSV) known as the Swordfish
within the Energy Division. During January 2023, the vessel was
sold for £18.4m being proceeds less selling costs. A gain of £0.3m
is included within administrative expenses. During 2022, a £5.4m
reversal of impairment loss has been recorded in cost of
sales.
At 31 December 2022, £16.3m assets
and £16.3m liabilities relates to the nuclear business, which was
classified as a discontinued operation.
In the prior year £1.5m of assets
related to land and buildings for a business within the Defence
Division.
9. Retirement benefit
obligations
The Group and Company defined
benefit pension scheme obligations relate to the James Fisher and
Sons plc Pension Fund for Shore Staff (Shore staff), the Merchant
Navy Officers Pension Fund (MNOPF) and the Merchant Navy Ratings
Pension Fund (MNRPF) which are regulated under UK pension
legislation. The financial statements incorporate the latest full
actuarial valuations of the schemes which have been updated to 31
December 2023 by qualified actuaries using assumptions set out in
the table below. These defined benefit schemes expose the Company
to actuarial risks, such as longevity risk, currency risk, interest
rate risk and market (investment) risk. In addition, by
participating in certain multi-employer industry schemes, the
Company can be exposed to a pro rata share of the credit risk of
other participating employers. There are no plans to withdraw from
the MNOPF or MNRPF schemes in the foreseeable future. The Group's
obligations in respect of its pension schemes at 31 December 2023
were as follows:
|
|
Group
|
Company
|
|
|
2023
£m
|
2022
£m
|
2023
£m
|
2022
£m
|
|
Shore staff
|
7.4
|
5.5
|
7.4
|
5.5
|
|
MNOPF
|
-
|
(0.4)
|
-
|
(0.2)
|
|
MNRPF
|
(1.6)
|
-
|
(0.5)
|
-
|
|
|
5.8
|
5.1
|
6.9
|
5.3
|
10. Reconciliation of net
borrowings
Net debt comprises interest bearing
loans and borrowings less cash and cash equivalents.
|
|
31 December
2022
£m
|
Cash
flow
£m
|
Other
non-cash*
£m
|
Transfers
£m
|
Exchange
movement
£m
|
31 December
2023
£m
|
|
Cash and cash equivalents
|
22.8
|
5.7
|
-
|
(0.4)
|
(1.7)
|
26.4
|
|
Cash - classified within assets held for
sale
|
2.8
|
-
|
-
|
(2.4)
|
-
|
0.4
|
|
Debt due within one year
|
(36.6)
|
36.6
|
-
|
-
|
-
|
-
|
|
Debt due after one year
|
(121.9)
|
(43.0)
|
(1.8)
|
-
|
-
|
(166.7)
|
|
|
(158.5)
|
(6.4)
|
(1.8)
|
-
|
-
|
(166.7)
|
|
Lease liabilities
|
(52.9)
|
18.1
|
(28.9)
|
-
|
2.5
|
(61.2)
|
|
Net borrowings
|
(185.8)
|
17.4
|
(30.7)
|
(2.8)
|
0.8
|
(201.1)
|
|
|
31 December
2021
£m
|
Cash
flow
£m
|
Other
non-cash**
£m
|
Transfers
£m
|
Exchange
movement
£m
|
31 December
2022
£m
|
|
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 within one year
|
(0.1)
|
-
|
-
|
(36.5)
|
-
|
(36.6)
|
|
Debt due after one year
|
(174.0)
|
16.6
|
(1.0)
|
36.5
|
-
|
(121.9)
|
|
|
(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)
|
* Other non-cash includes lease
additions and finance expense related to the unwind of discount on
right-of-use lease liability.
Transfers comprise £0.4m and (£2.8m)
of cash and cash equivalents which relate to a business classified
as held for sale and the disposal of a business classified as
discontinued operations in the prior year.
11. Share capital
Allotted, called up and fully
paid
|
|
25p
Ordinary shares
|
£1
Cumulative
Preference shares
|
|
In millions of shares
|
2023
|
2022
|
2023
|
2022
|
|
In issue at 1 January and at 31
December
|
50.4
|
50.4
|
0.1
|
0.1
|
|
|
2023
£m
|
2022
£m
|
2023
£m
|
2022
£m
|
|
Issued share capital
|
12.6
|
12.6
|
0.1
|
0.1
|
The preference shareholders are
entitled to receive 3.5% cumulatively per annum, payable in
priority to any dividend on the ordinary shares. The ordinary
shareholders are entitled to receive dividends as declared from
time to time by the Directors.
Shares all carry equal voting
rights of one vote per share held. They also have the right to
attend and speak at general meetings, exercise voting rights and
appoint proxies. Neither type of share is redeemable. In the event
of a winding-up order the amount receivable in respect of the
cumulative preference shares is limited to their nominal value. The
ordinary shareholders are entitled to an unlimited share of the
surplus after distribution to the cumulative preference
shareholders.
|
Treasury shares
|
2023
£m
|
2022
£m
|
|
12,519 (2022: 47,855) ordinary shares of
25p
|
0.5
|
0.6
|
The Company has an established
Employee Share Ownership Trust, the James Fisher and Sons plc
Employee Share Ownership Trust, to meet potential obligations under
share option and long-term incentive schemes awarded to employees.
The historic cost of these shares at 31 December 2023 was £0.5m
(2022: £0.6m). The trust has not waived its right to receive
dividends.
In the year ended 31 December 2023,
35,337 ordinary shares with an aggregate nominal value of £8,834
were issued to satisfy awards made under the restricted share award
made to Mr Vernet (CEO). No shares were issued during the prior
year.
The Trust purchased no shares
during 2023 or 2022.
12. Related party
transactions
Excepting the change of Directors,
there were no material changes to related parties or associated
transactions from those disclosed in the 2022 Annual
Report.
13. Post balance sheet
events
On 22 March 2024, the Group agreed to
sell its RMSpumptools business to ChampionX UK Limited, a wholly
owned subsidiary of ChampionX Corporation. RMSpumptools did not
meet the highly probable criteria to be recognised as a held for
sale business as at 31 December 2023, primarily due to uncertainty
associated with the disposal plan.