Sector review

The Group’s strategy is to grow organically through leveraging its existing skill, technology and asset base in areas of specialist expertise and through investment in people, working capital and equipment.

2020 annual financial information by division:

Revenue-marine-sector_Mar2021.png                    Underlying-operating-profit-marine-sector_Mar2021.png                          Return-on-capital-employed-marine-sector_Mar2021.png

*before separately disclosed items

Our Marine Support businesses provide products, services and solutions to the global marine industry. These are supplied to a range of end market sectors including marine, oil and gas, ports, construction and renewables.

Market drivers

Fendercare is a leading provider of pneumatic floating fenders and other mooring equipment to the global marine industry. It services commercial shipbuilding, ship refurbishment, defence, port developments and the oil and gas markets for project applications.

Fendercare is also a leading provider of ship-to-ship services for the transfer of crude or refi ned oil, liquefi ed natural gas or bulk cargoes. The demand for these services is driven by the volume of oil trading between oil majors and independent traders, and also by production where local port infrastructure is unable to accommodate large tankers.

JF Marine Services is a leading provider of specialist subsea and topside services to support offshore wind construction, operations and maintenance through delivery of an integrated service offerings that encompasses the wide range of marine skills to create increased customer value. Demand for its services is driven by the operation and maintenance activities in the marine, oil and gas, renewables and communication sectors. This includes the specialist provision of ROV systems and diving personnel for underwater surveys, UXO identifi cation and disposal, construction support, inspection, repair and maintenance.

JF Testing Services is a leading provider of strain gauges to the marine industry, which are used in a range of applications such as mooring systems on ships and in ports as well as being used to monitor the structural integrity of infrastructure in the construction and transport sectors. The sectors serviced encompass new shipbuilding, ship refurbishment and life extension, port developments, and projects for the oil and gas market.

It is also a leading provider of specialist testing and monitoring services to the construction and maintenance sectors, and designs and manufactures testing and monitoring equipment, supporting customers worldwide.

The market drivers for JF Testing Services are new projects in the marine, oil and gas, infrastructure and renewables sectors, where our niche offering and innovative products and services provide a competitive advantage.

Subtech provides a range of marine services to the Middle Eastern and Africa region. With locations in Durban, South Africa, Mozambique, Nigeria and Dubai UAE, it supports a wide range of projects requiring specialist diving and marine skills. Demand for its services is driven by port construction, diving and marine projects.

Our principal businesses

Business Operations End markets Locations
Fendercare Marine products and services, ship-to-ship transfers, offshore terminal services  Marine, oil and gas, renewables and defence UK, Singapore, Australia, UAE, Brazil
JF Marine Services Integrated marine services, including remotely operated vehicle (ROV) systems and diving services Marine, oil and gas, renewables, tidal power and communications UK, France
JF Testing Services Products and services that measure and monitor structural stress, instrumentation and materials testing Marine, oil and gas, renewables, civil and construction UK, UAE, Singapore, Malaysia
Subtech Marine and diving services Oil and gas, marine and construction South Africa, Mozambique, UAE, Nigeria


Divisional performance:

Marine Support revenue in the year was £62.2m (20%) lower at £249.4m (2019: £311.6m). Subsea projects for offshore wind and oil & gas were c .£70m below than 2019 and the impact of the pandemic substantially reduced revenue across marine services and products, stress testing and monitoring. Despite Covid-19 interruptions, progress on the early and temporary beach landing project for the new gas fields in Mozambique and a good performance in ship-to-ship transfers partly offset the lack of subsea projects. Underlying operating profit was £14. 4m lower at £10.1m (2019: £24. 5m) with the fall in revenue partly mitigated by a 20% reduction in overheads. Ship-to-ship services performed well, with a particularly strong first half reflecting transfers in and out of storage capacity.

The Group responded swiftly to the challenges, particularly in subsea projects and carried out a significant restructure during the second and third quarters of 2020. The division also suffered from challenges in receiving prompt payment for offshore services to the oil & gas market in challenging parts of the world and, whilst relentlessly pursuing settlement, considers it prudent to make provision. In light of the performance in 2020, we have taken a goodwill impairment of £17.0m and in consideration of the prospects for dive support vessels, impaired carrying values by £3 1.6m. Due to their size and their irregular nature, these items have been disclosed separately.

Marine Support holds leading positions in ship-to-ship services and renewable energy, particularly in high voltage jointing, blade repair and unexploded ordnance. Opportunities in offshore wind continue to increase and are rapidly expanding globally outside of the North Sea.

Revenue-specialist-technical-sector_Mar2021.png                  Underlying-operating-profit-specialist-technical-sector_Mar2021.png               Return-on-capital-employed-specialist-technical-sector_Mar2021.png

*before separately disclosed items

Our Specialist Technical businesses supply diving equipment and services, submarine rescue vessels and through-life rescue services and engineering solutions to the international defence market and UK nuclear decommissioning market. Other subsea services provided to the defence sector include special operation swimmer delivery vessels. JFD also supplies saturation diving systems which are installed onto dive support vessels and support deep subsea diving activities. James Fisher Nuclear (JFN) provides engineered solutions which operate in hazardous environments in the nuclear industry.

Market drivers

JFD is a world leader in saturation diving systems and related diving equipment. Its end markets are oil and gas and defence. Saturation diving systems are both fixed and portable. Fixed systems are usually built into dive support vessels (DSVs). JFD provides the equipment and the follow-on consumables, support and maintenance to the DSV operator. The construction and replacement of DSVs drives new build saturation diving systems which in turn drives ancillary service and product spend. JFD’s defence market is based on service, repair and on-going calibration requirements, and on projects requiring specialist diving equipment.

JFD is also a leading provider of submarine rescue services. It encompasses the ability to design, deliver and operate submarine rescue vehicles. It has long-term service contracts with navies providing a very niche area of capability. The driver is the tendering of defence projects for provision of the equipment, which can then lead to longer term service contracts to operate the service. We currently provide submarine rescue services to the UK, Singaporean, Australian and Indian navies. The business also provides swimmer delivery vessels to the special operations markets.

JFN provides engineered products and services to the nuclear industry both in the operation of nuclear power plants and decommissioning. Its products and services operate in hazardous environments. The business provides instrumentation, non -destructive testing, calibration and digital radiography to the nuclear, aerospace and process industries. The market drivers for JFN are the demand for its products, services and lifetime support from the UK decommissioning industry, radiological calibration requirements and projects within the aerospace, process and defence industries.

Our principal businesses

Business Operations End markets Locations
JFD Design, supply and servicing of diving and subsea equipment, submarine rescue and special operations services Defence, commercial and defence diving, hyperbaric and submarine rescue UK, Australia, Singapore, Sweden
JFN Engineered solutions in remote handling, non-destructive testing and calibration services UK nuclear decommissioning and aerospace, process and defence industries UK


Divisional performance:

Specialist Technical performed with resilience in 2020 with a 13% reduction in revenue to £130.4m (2019: £149.4m) and the impacts of currency and businesses acquired offset each other. At JFD, our defence and diving equipment provider, the pandemic affected the completion of projects, particularly in the Asia Pacific region and delayed the arrival of specialist components from our suppliers. Submarine rescue and escape exercise services were reduced or curtailed as a consequence of the pandemic. Decisions on new projects were also delayed, which impacted the second half. Our nuclear decommissioning business, which represents around 30% of the division, quickly adjusted to homeworking and delivered increased revenue and profit in the year.

Underlying operating profit was £4.4m lower at £14.0m (2019: £18.4m) due to the revenue fall but mitigated by a 14% reduction in overheads. Underlying operating margin was resilient at 10.7% (2019: 12.3%).

JFD completed customer acceptance testing of its landmark 500m saturation diving system in December, having suffered challenges due to the pandemic of getting into the Asia Pacific region to complete assembly and approval. It also completed its contract to deliver six swimmer delivery vehicles during the fourth quarter. Two submarine rescue vessel projects are progressing well with delivery dates in 2021 and 2022. Nuclear decommissioning performed well through the pandemic due to improved project delivery and good progress in nuclear source distribution. Its Hamburg based radiation detection and instrumentation business was sold in the year for £1.6m.

Revenue-offshore-oil-sector_Mar2021.png                       Underlying-operating-profit-offshore-oil-sector_Mar2021.png                        Return-on-capital-employed-offshore-oil-sector_Mar2021.png

*before separately disclosed items 

Our Offshore Oil businesses supply a range of services and equipment to the global oil and gas and renewable energy industries . This includes the design and engineering of specialist equipment, platform maintenance and modification, well testing support, subsea operations and maintenance services. RMS and renewable energy industries pumptools is also established as a world leader in artificial lift specialist completion technology and innovative accessory tools for electrical submersible pumps.

Market drivers

ScanTech AS is a leading provider of ATEX (ATmospheres EXplosives) products and support services to the energy sector. Its products and services are supplied to the Norwegian oil and gas market and are used for platform maintenance, well testing and specific projects. Equipment is designed and certified to the NORSOK standard. The driver for the business is the operation and maintenance spend on offshore rigs in the Norwegian sector.

Scantech Offshore is a leading provider of air compressors, steam generators, heat suppression equipment and qualified personnel for the well testing and offshore wind markets worldwide. It rents equipment to large multinational oil service and major marine contracting companies, and provides qualified personnel to operate the equipment. The driver for the business is the operation and maintenance spend on offshore rigs around the world and the need to provide protection of the marine environment through the mitigation of noise produced during offshore piling operations and unexploded ordnance (UXO) disposal.

RMSpumptools is a world leader in artificial lift specialist completion technology and innovative accessory tools for electrical submersible pumps. RMSpumptools supplies products to the global downhole oil and gas market which improve the productivity of wells utilising electrical submersible pumps.

Fisher Offshore provides winches, hoists, cutting tools, marine cranes and subsea hydraulic equipment to the oil and gas and marine sectors. Its market driver is maintenance, inspection and repair demand and subsea projects. It also specialises in providing mass-fl ow excavation tools and services to cover or uncover subsea pipelines or cables, where demand is driven by cable and pipeline projects in the oil and gas, renewables and communication sectors.

Our principal businesses

Business Operations End markets Locations
Scan Tech AS Design and engineering of specialist equipment, platform maintenance and modification, well testing support and subsea operations Oil and gas Norway
Scantech Offshore Provides products and services to well testing companies Oil and gas, Offshore wind UK, UAE, Brazil, Australia, Malaysia
RMSpumptools Artificial lift specialist completion technology and innovative accessory tools for electrical submersible pumps Oil and gas UK, UAE
Fisher Offshore Provides a range of lifting equipment and services to the marine, offshore, subsea and mass flow excavation industries Oil and gas, Marine UK, Malaysia, UAE, Mexico, Singapore


Divisional performance: 

Despite the dual challenges of energy prices and Covid-19, Offshore Oil performed resiliently. Revenue was 12% lower at £78.0m (2019: £88.2m) and underlying operating profit was 21% down at £11.2m (2019: £14.2m) which was a creditable result given energy price movements and the global pandemic. Lower volumes in 2020 impacted gross margins but pricing was broadly maintained. Selling, general and administration costs were reduced by 18 % in the year as the businesses reacted quickly to the challenging economic conditions. This mitigated the impact on underlying operating margin which was 14. 4% (2019: 16.1%).

Our businesses in Offshore Oil are predominantly the rental of specialist equipment with specialist people to the inspection, repair and maintenance market and the extension of asset life services. Strategically we have sought to limit our exposure to exploration which reduces earnings volatility in the event of sudden changes to energy prices. In parallel, our businesses continue to evolve to support the changing energy mix. Revenue from supplying our products and services for bubble curtains in renewables and for the decommissioning of oil and gas infrastructure represented 14% of the division’s annual sales in 2020.

Revenue-tankships-sector_Mar2021.png              Underlying-operating-profit-tankships-sector_Mar2021.png                  Return-on-capital-employed-tankships-sector_Mar2021.png

*before separately disclosed items

Our Tankships division operates a fleet of product and chemical tankers which trade along the UK and northern European coastline carrying clean petroleum products and chemicals including increasing volumes of bio fuels. The division performed 1,362 port calls this year carrying liquid cargos from refineries and terminals, to major coastal storage facilities. The division also operates a port in Plymouth, UK.

Market drivers

James Fisher Everard (JFE) distributes clean petroleum products and chemicals under contracts with primarily oil majors around the European coast and to islands, to ports with restrictions on the size of ships they can accept. It operates a fleet of double-hulled product and chemical tankers with capacity ranging from 3,000mt to 35,000mt. The business driver is the level of consumption of clean products (petrol, diesel, gasoil and kerosene) and chemical/ biofuels in the UK, Ireland and northern Europe. Products carried serve the marine, transport, agriculture, aviation and chemical industries.

Shipping dramatically reduces our customers’ carbon footprint compared to other modes of transportation. Shipping’s CO2 emissions are half that produced by road freight, and just one full ship keeps more than 150 trucks off the roads.

The division operates Cattedown Wharves, a port in Plymouth which provides berthing and marine services to the oil majors which own tank farms in Plymouth. It also handles dry cargoes such as animal feed being imported into the South West and clay being exported from the region. The primary driver for the business is the level of consumption of clean oil products within the South West region of the UK.

Our principal businesses

Business Operations End markets Locations
JFE Delivery of clean petroleum products around the European coastline Distribution of clean petroleum products UK
Cattedown Wharves Port operations Wet and dry product distribution UK


Divisional performance:

Tankships traded well in the first four months of 2020 but experienced a sharp drop in utilisation in May as the immediate effect of the lockdown reduced demand for the clean petroleum products it delivers. Utilisation improved each month thereafter to recover to just below 90% by the end of the third quarter, and despite some fluctuations in the final quarter due to the second wave of Covid-19, utilisation was maintained in the high 80 s.

Revenue in 2020 was 11% lower than prior year at £60.4m (2019: £67.9m). With the cost of operations relatively fixed, the reduction in sales impacted underlying operating profit and was only partly mitigated by a 13% reduction in overheads. Underlying operating profit was £ 4.0m lower at £8. 0m (2019: £12.0m).