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.

2021 annual financial information by division:

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*before separately disclosed items

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

Market drivers

Fendercare is the leading provider of ship-to-ship transfers of oil and liquefied natural gas. The main market drivers for these services are over-supply, available storage capacity, and fluctuations in prices caused by demand. Fendercare is also a leading provider of mooring and safety equipment to the global marine industry to support newbuilds, conversions and port infrastructure development projects.

JF Renewables supports the global offshore wind market through the provision of highly specialist services employed in site preparation, installation, commissioning and operations and maintenance phases. Demand is driven by increased investment in offshore wind with increasing numbers of new sites being constructed and operational sites requiring support.

JF Subtech provides specialist subsea services in support of construction, operations and maintenance and decommissioning activities for the offshore wind, oil and gas and marine markets globally. Demand is driven by increased investment in marine infrastructure, asset management campaigns and decommissioning of legacy assets.

JF Strainstall is a leading provider of structural integrity monitoring services and technologies that are deployed in a range of marine applications such as mooring systems for fixed and floating assets and high integrity infrastructure applications in the construction and transport sectors. The market drivers for JF Strainstall are increased investment in construction projects in the marine, oil and gas, infrastructure and renewables sectors and asset optimisation and life extension of existing or legacy infrastructure, where our niche offering and innovative products and services provide assurance to customers and their stakeholders.

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 Renewables Integrated marine services, including remotely operated vehicle (ROV) systems and diving services Marine, oil and gas, renewables, tidal power and communications UK, France
JF Subtech Marine and diving services Oil and gas, marine and construction South Africa, Mozambique, UAE, Nigeria

 

Divisional performance:

The Marine Support division consists of three businesses, all aimed at supporting the marine and energy markets. Marine Contracting principally provides subsea services to both the oil and gas and offshore wind markets; Fendercare provides essential ship-to-ship transfer services and related products; and Digital and Data Services provides innovative technological solutions aimed at improving the efficiency and productivity of our customers’ offshore assets. The division saw a significant decline in both revenue and underlying operating profit in 2021, although there was a reduced level of separately disclosed items, with noncash provisions of £26.0m against goodwill, doubtful receivables and tangible assets recognised in the year.

Marine Contracting

The business showed positive progress during 2021. Revenue increased by 4.0% to £113.3m and after a particularly challenging year in 2020, operating losses were significantly reduced. As part of our strategy to reduce the asset-intensity of this business and to focus more on partnering and the provision of differentiated services, the business sold one of its dive support vessels in June and the other is now on long-term hire for the majority of 2022. 

EDS, the high voltage cabling specialist providing services to the offshore wind industry, continued its positive momentum with three new multi-year contracts to maintain offshore windfarm electrical infrastructure over periods of 13 to 15 years. The contracts are worth more
than £40m over the period, which includes “availability” bonuses of around £8m for ensuring a pre-agreed level of uptime that could be earned and recognised in future periods.


In Mozambique, the major LNG project remains suspended due to the ongoing security issues in the region. The Group settled all outstanding claims against its customer prior to the end of 2021 and is ready to support the remobilisation of the project in due course.

The order book for 2022 is strong, with several projects deferred from 2021 expected to commence in the first half of the year and a
good level of identified tendering targets. 

Fendercare

Following a record year in 2020, the Fendercare business experienced a significant decline in 2021. Not only was the comparative year of 2020 boosted by crude oil trading on the back of the significant volatility in the oil price in 2020, but the business was also challenged in 2021 by unfavourable market developments in Malaysia and Brazil. Revenue from the Fendercare Group was £77.9m, some 32% below 2020. Within this, the ship-to-ship (STS) revenues were down 36%.

The business is responding to the challenges by focusing on securing new sites to conduct STS operations in Malaysia, and has been successful
in securing new contracts in Brazil. Although a return to the record highs seen in 2020 is not expected (absent significant volatility in the oil price) the business is expected to show some growth in 2022. A steady increase in the number of enquiries for LNG STS operations provides some encouragement for the future.

The sale of related products such as fenders also declined in 2021 as customers sought to defer capital expenditure. An inventory provision of £2.7m has been recognised in the period, reflecting a prolonged reduction in expectations for product sales as a direct result of the pandemic.

Digital and Data Services (DDS)

DDS is a collection of businesses aimed at providing technology solutions to the oil and gas and renewable energy markets. Revenue in 2021 fell by 9% to £23.3m, principally due to JF Strainstall, the provider of load and asset monitoring solutions, which experienced difficult market conditions with the downturn in construction activity reducing demand for its products. Other businesses, such as AIS, which has developed and sells Digital Twin software, providing operators with an online, real-time asset management solution aimed at reducing their operating costs by allowing asset condition to be monitored from anywhere in the world rather than on site, showed good growth, with new contract wins servicing offshore oil BP and Chevron in particular.

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*before separately disclosed items

Our Specialist Technical businesses supply diving equipment and services, submarine rescue vessels and through-life rescue services, special operation swimmer delivery vehicles, saturation diving systems and engineering solutions to the international defence, UK nuclear decommissioning and commercial diving markets.

Market drivers

JFD is a world leader in fixed and portable saturation diving systems and related diving equipment – demand for which is largely driven by the construction and replacement of dive support vessels which in turn drives ancillary service and product demand. Its end markets are oil and gas and defence based on service, repair and ongoing calibration requirements, and projects requiring specialist diving equipment.

JFD is also a leading provider of submarine rescue services with the ability to design, deliver and operate submarine rescue vehicles. Providing a very niche area of capability, it has long-term service contracts with navies. The driver is the tendering of defence projects for provision of the equipment, which can lead to longer-term service contracts to operate the service. The business also provides swimmer delivery vehicles to the special operations markets.

JFN provides engineered decommissioning solutions and remote handling equipment to the nuclear industry as well as calibration, servicing and repair services for radiological instrumentation. The market drivers for JFN are the demand for its products operable in hazardous environments, services and lifetime support from the UK decommissioning industry, radiological calibration requirements and projects within defence.

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 saw modest revenue growth of 2.1%, but a reduction in underlying operating profit of £4.1m, adversely affected by the write-off of £2.5m in relation to customer claims previously recognised but ultimately not agreed. Separately disclosed items of £2.9m recognised in the year included the impairment of tangible and intangible assets within the JFD business.

JFD experienced a mixed year. Work continued on its significant long-term projects, with three submarine rescue vessels (SRVs) and a 500m saturation diving spread all progressing well towards final milestones. One of the SRVs was delivered to its Korean customer in December and only relatively minor work is required in 2022 to complete all other projects, triggering final payment milestones.

The business is looking to secure new projects during 2022, with a strong sales pipeline, although with no new orders in hand, the projects side of the business is at a cyclical low point. Demand for diving equipment was subdued during 2021 as many customers had fewer divers in the water, largely due to COVID restrictions, and deferred spend on new equipment.

The Group’s nuclear decommissioning business, JFN, showed some positive momentum during the first half of the year, but results for the full year were ultimately held back by the decision of a major customer to defer to 2022 new project awards expected in H2 2021. The level of tendering activity early in 2022 is encouraging, with new contracts for engineering design work already won early in the year.

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*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 and technology, platform maintenance and modification, well testing support, subsea operations and maintenance services.

Market drivers

Scantech AS is a leading provider of ATEX (ATmospheres EXplosives) products and support services to the energy sector. Its equipment is designed and certified to NORSOK standards and supplied to the Norwegian oil and gas market for platform maintenance, well testing and specific projects. 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 environmental mitigation equipment, air compressors, steam generators, heat suppression equipment and qualified personnel for large multinational oil service and major marine contracting companies in well testing and offshore wind markets worldwide. The driver for the business is the operation and maintenance spend on offshore rigs and the need to protect the marine environment with noise mitigation 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 supplied to the global downhole oil and gas market. The driver for the business is the need to improve well productivity.

FISHER OFFSHORE provides engineering solutions, equipment and full project support for offshore and subsea operations in the oil and gas and marine sectors. Its market driver is maintenance, inspection and repair demand, and subsea pipeline and cable projects in the oil and gas, renewables and communication sectors with a particular focus on offshore decommissioning.

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
James 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: 

Offshore Oil achieved strong revenue growth of 10.6% during the year, driven by increased demand for its bubble curtain solutions and well-testing services. This traditional oil and gas service business has seen significant success in repositioning itself into new markets, such as the supply of bubble curtain solutions to offshore wind construction projects which protect subsea wildlife from the noise of piling, as well as an earlier stage opportunity in aquaculture which is showing promising signs of future demand. Bubble curtain revenues increased from £3.9m in 2020 to £7.4m in 2021.

James Fisher Offshore, which offers decommissioning services to the oil and gas industry experienced a somewhat frustrating year, with projects delayed at short notice during the second half of the year and the impact of a bad debt provision against amounts receivable from a financially distressed customer holding back profitability. Despite the project delays in Q4 2021, demand for decommissioning services continues to increase, with 13% growth in revenue to £8.0m in 2021 (2020: £7.1m).

RMSpumptools (RMS) saw strong demand for its market-leading artificial lift products, which both prolong the useful life of oil wells and prevent the unwanted escape of methane gas during production. As the oil industry increasingly focuses on minimising its environmental impact, we believe that demand for RMS products will continue to increase.

Separately disclosed items of £16.3m have been recognised in relation to goodwill impairment (£13.9m) and receivables (£2.4m). The impairment in respect of receivables relates to a specific counterparty risk and receivables billed over 12 months ago in relation to certain projects.

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*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 biofuels 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 and ports with size restricted access. 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.

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.

James Fisher Shipping Services (JFSS) provides technical vessel and crew management to the James Fisher fleet of tankers, as well as to the wider tanker, research and specialised vessel markets.

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:

Revenue for the year was broadly in line with 2020, however profitability was adversely affected by a combination of the UK lockdown in Q1 2020, increased operating costs due to enhanced COVID safety protocols and quarantine requirements, and a short-term dip in utilisation during September. Utilisation rates across the fleet increased over the course of the year from an average of 86% in Q1 to 95% in Q4. The business’s exposure to the shorter-term spot-rate charters has increased slightly in the year to c. 23% (2020: c. 21%) as a result of contracts that have not been renewed. During the first two months of 2022, utilisation rates were strong and spot charter rates are showing good signs of recovery.

Impairment charges of £3.5m have been recognised in the year, reflecting a reassessment of residual values of older vessels that are reaching end of life. The two newly-commissioned dual-fuel (marine gasoil and LNG) vessels are well into the construction phase and are due for delivery late in 2022, replacing two vessels that are approaching the end of their useful operational lives.

Cattedown Wharves, which serves the South West of England, performed well in the year notwithstanding the lockdown in Q1 2021. Volumes of cargo transported through the port have now largely recovered to pre-pandemic levels.

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