Sector review

James Fisher's strategy is to grow its business organically by leveraging its existing marine skill base in specialist expertise to a global market, supplemented by selective bolt-on acquisitions. 

2018 annual financial information by division:

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*2017 restated for IFRS 15 ‘Revenue from contracts with customers’ 

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.

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, Nigeria, Ghana
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
JF Subsea Excavation Mass-flow excavation services Oil and gas and renewables UK, Mexico, Singapore
Subtech Marine and diving services Oil and gas, marine and construction South Africa, Mozambique, UAE, Namibia

 

Divisional performance:

Marine Support revenue was 18% higher driven by strong organic growth from across all the sectors in which the division operates. In addition, EDS was acquired in December 2017 which provides high voltage services to the offshore wind industry in the installation, monitoring and repairs of cables.

Revenue from offshore renewables increased by over 30%. The first half of the year saw the completion of the two-year Galloper Windfarm project 27 miles off the coast of Suffolk, UK. In the second half of the year work commenced on the East Anglia One wind farm construction which will continue into 2020.

Our renewables business has established itself as the leading integrated marine services provider to the offshore wind sector and the award of three five-year contracts for London Array were our first significant maintenance awards.

Ship-to-ship transfer operations around the world continued to perform well with further growth in the number of operations in Brazil and the commencement of operations in Chile. The order book for diving and pipeline maintenance contracts in the Middle East and Africa grew significantly but was offset by government contracts in South Africa being delayed or cancelled.

Mass flow excavation services completed 36 projects around the globe in 2018, of which around one third were in the offshore wind sector. Improved market conditions in the oil and gas sector, which has been slow since the oil and gas down-turn at the end of 2014 were evidenced by five projects completed in the Gulf of Mexico in the second half of 2018.

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*2017 restated for IFRS 15 ‘Revenue from contracts with customers’ 

Our Specialist Technical businesses supply diving equipment and services, submarine rescue vessels and throughlife rescue services and engineering solutions to the international defence market and UK nuclear decommissioning market. The submarine rescue market is a small niche with a national navy either having its own capability or relying on other countries. Other subsea services provided to the defence sector include diving equipment and special operation swimmer delivery vessels. The Group 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.

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
JF Nuclear Engineered solutions in remote handling, non-destructive testing and calibration services Nuclear decommissioning UK, Germany

 

Divisional performance:

Revenue in Specialist Technical was 7% higher in 2018 and underlying operating profi t 11% higher with underlying operating margins 40 basis points higher at 13%. The on schedule assembly and delivery of two submarine rescue vessels during the year supported another strong year for the division. We were pleased to announce a further submarine rescue vessel order in October worth £30m for the South Korean navy due for delivery in 2021.

The division won its first significant order for six swimmer delivery vessels in March 2018. It commenced a mid-life upgrade of the submarine rescue equipment for the Singapore navy supporting our long-term contract to operate its submarine rescue service.

Our nuclear decommissioning business continued to develop its range of radiation protection instruments. It showed a steadily improving order book as an increasing number of decommissioning projects were released for tender compared to 2017.

 

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*2017 restated for IFRS 15 ‘Revenue from contracts with customers’ 

The Offshore Oil division supplies a range of services and equipment to the global oil and gas industry. This includes the design and engineering of specialist equipment, platform maintenance and modifi cation, well testing support, subsea operations and maintenance services. James Fisher is also established as a world leader in artifi cial lift specialist completion technology and innovative accessory tools for electrical submersible pumps.

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 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 and subsea industries Oil and gas UK, Malaysia

 

Divisional performance: 

Offshore Oil increased revenue 9% and underlying operating profit grew 42% mainly due to market share gains in RMSpumptools, our artificial lift completion technology business, where demand for its products, increased its revenue by nearly half. The rest of the division saw improved profitability in Norway, partly due to cost reductions in prior years and increased higher margin rental activity. Well testing services were similar to 2017 and the division invested £6.4m for new business, mainly focused on opportunities in the Middle East.

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*2017 restated for IFRS 15 ‘Revenue from contracts with customers’ 

Our Tankships division operates a fleet of product and chemical tankers which trade along the UK and northern
European coastline carrying petrol, diesel, gasoil, kerosene and easy chemicals/biofuels. The division performs nearly
2,000 port calls each year carrying fuel from refineries and terminals to major coastal storage facilities. The division
also operates a port in Plymouth, UK.

Our principal businesses

Business Operations End markets Locations
JF Everard 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 produced another strong year with revenue up 7% and underlying operating profit up 13%. Vessel utilisation continued to be strong throughout 2018 and the division had one additional vessel from July compared to the prior year. Improved vessel operating efficiencies and additional capacity in the second half helped to increase underlying operating profit to £9.9m (2017: £8.8m).

Two second hand vessels were acquired for a total of £10.6m as part of the fleet renewal strategy leaving three further vessels to be refreshed over the next few years. The division’s operating cash flow in the year was £14.9m (2017: £12.5m) which more than funded its capital expenditure of £13.2m (2017: £2.4m).

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