James Fisher's principal risks and uncertainties.

Managing risk and enabling growth

The Group's emerging and principal risks:

The Group is subject to a combination of macro risks and business-specific risks. The Group's risk management process provides the framework for risk management practices across all parts of the Group and seeks to ensure that business risks are adequately identified, quantified and understood. The framework and accompanying risk management processes continue to evolve and improve across the Group.

Changes in 2022:

Following a review of the Group’s risk management framework in 2021 by PwC LLP, the Group has continued to implement improvements during 2022. The Executive Committee conducted a series of facilitated discussions on the Group’s key risks from a “bottom-up” basis. Each key risk has been allocated an Executive Committee owner and a series of mitigating actions have been defined. Review of progress against the mitigating actions is a standing agenda item once a quarter at Executive Committee meetings. These risks have been discussed at the Board and Audit Committee meetings during 2022.

As a result of these reviews, two additional principal risks (Transformation risk and Maintaining access to adequate funding) have been separately articulated due to their nearer-term nature, reflecting specific situations that the Group is subject to and seeking to mitigate. Further information on these can be found in the list of principal risks and uncertainties below.

The Board is committed to continuous improvement in risk management and during 2022 has outsourced its internal audit function to PwC, appointed a Head of Internal Controls and developed a comprehensive programme aimed at internal control improvements over the coming 24 months, with significant support from BDO. An additional governance body, the Investment Committee, has also been established during the year. This is a sub-committee of the Executive Committee and has specific authority delegated to it by the Board. All investment decisions that require Board approval will first be scrutinised by the Investment Committee before being presented to the Board.

Subsea submarine operation

Explore our principal risks and uncertainties below

Nature: Potential impact: Mitigation:

The Group is embarking on a period of significant simplification and integration, carrying the risk of disruption and / or disruption to its core activities if not managed well. 

  • The change management process may disrupt core business delivery activities if roles and responsibilities are not clear
  • Staff may become distracted by the change process
  • An Operational Excellence team has been established, with a clear remit
  • Objectives have been set and cascaded through the organisation to ensure priorities are clear across the Group
  • Executive Committee oversight and escalation process has been established

The Group has operated a largely decentralised operating model for a number of years. The Executive Committee sees opportunity to improve the efficient working of the Group by simplifying and integrating common functions. This is one of the Executive Committee's and Board's highest priorities for 2023 but will involve a significant amount of change in both the operating model and supporting functional activities of the Group. Strong project management and clarity on roles and responsibilities will be required to ensure that the delivery teams remain focused on the most important identified tasks. 


This risk is being separately disclosed for the first time in 2022. The Board recognises that all change management programmes contain risk and has made the management of this change process one of its highest priorities for 2023.

The opportunity to simplify the Group's operating model, integrating common functions such as supply chain, project management, engineering, health and safety is aimed at providing enhanced ways of working and operational efficiencies. It is also expected to support the simplification of the Group's legal entity structure and systems infrastructure.
Nature: Potential impact: Mitigation:

The Group relies on external sources of funding to ensure it has the financial liquidity to fund its operations and future growth, without which there is a risk to the execution of the Group's strategy.

  • The Group may not have the liquidity required to ensure that it remains a going concern
  • Disposals of additional businesses may be required
  • The Group's reputation and ability to secure competitive contracts with suppliers and customers may be adversely impacted 
  • Regular meetings are held with all lenders to provide trading and operational updates
  • Selection of third-party expert support to assist with refinancing
  • Ongoing dialogue with potential new lenders
  • Refinancing commitment letters received from the lenders and long form term sheet agreed with expected completion by 7 June 2023

The Group has experienced three consecutive years of difficult trading conditions and financial results have been adversely impacted. The Group has made good progress in refinancing its borrowing facilities post year-end, though lenders have required security for the first time. The new facility matures in March 2025. Net debt as measured for the purposes of banking covenants has reduced in each of the last three years, however the ratio of net debt to EBITDA (leverage) has remained above the Board's target level of 1 - 1.5x. At 31 December 2022 leverage was 2.7x (2021: 2.9x; 2020: 2.8x; 2019: 2.7x).


This risk is being separately disclosed for the first time in 2022 due to the ongoing challenges of ensuring adequate liquidity at competitive pricing.

The Group has taken the opportunity to simplify and right-size its borrowing facilities through to March 2025 to provide additional certainty to all stakeholders.
Nature: Potential impact:  Mitigation: 

Group trading companies may experience an adverse operational incident or failure to maintain appropriate levels of health and safety.

  • The health and safety of our workforce and others could be impacted by our operations
  • The Group's reputation could potentially suffer if there was a major accident or health and safety issue
  • Claims and regulatory action may be taken against the Company or the affected business
  • First item on Plc and business board agendas
  • Appointment of a Group Head of HSE as part of the Operational Excellence team in January 2023
  • Policy and training
  • Group Health and Safety Committee
  • Group safety forum
  • Insurance
  • Internal Audit
  • Group-wide safety initiative

In 2022, there continue to be operational incidents, including a number of high potential near misses. Executive management continues to increase the level of awareness and focus on HSE, including a new appointment of a Group Head of HSE from January 2023. The Group's activities in 2022 include the continuation of the Group safety forum, improving root cause analysis and sharing incident learnings amongst the Group’s HSEQ specialists. The Group also commissioned an audit of its Group HSE policies and procedures as part of the annual Internal Audit programme. As a result, the HSE team has a number of agreed actions to implement during 2023.


No change. On balance the net risk has remained the same, and efforts to bring greater coordination, diligence and awareness in this area are ongoing.


Operating in competitive markets there is an increased opportunity to provide differentiation to our customers by our strong commitment to health and safety, thereby building long-term trust.

Nature: Potential impact: Mitigation:

The Group may experience loss or harm related to technical infrastructure or the use of technology within the Group.

Cyber-attacks could result in financial and reputational damage by way of significant interruption to business systems. Phishing could result in financial and reputational damage by way of theft or fraud.

  • Further embedding of new Group-wide operating system with enhanced security, alongside infrastructure and software updates to existing systems
  • Regular review of IT security issues, including penetration testing
  • Enhanced cyber awareness training and regular briefings
  • Improved threat detection software and cyber phishing testing across the Board and all employees
  • Independent review of cyber security by a specialist third party in 2022; inclusion in the 2023 Internal Audit cycle

The Group has continued to invest in cyber security and awareness during 2022, with improvements in cyber training and awareness, threat detection software and phishing testing. A third-party review of the cyber security environment was conducted in 2022 by a specialist organisation and recommended improvements have been implemented. The Board reviewed this principal risk in December 2022 and cyber security is included in the Internal Audit plan approved by the Audit Committee for 2023. Despite the increased protections in place at the Group, the external threat continues to increase.


Increase. The Group is reliant on its systems in order to operate effectively and has continued to invest to enhance cyber resilience. The external threat is continually adapting and increasing, notwithstanding the mitigating activities.

Upgraded IT systems increase security, but also flexibility, facilitating secure working while travelling or from home.
Nature: Potential impact: Mitigation:

The Group operates in overseas emerging markets and key growth economies with fluctuating legislative restrictions, embargoes, sanctions and exchange controls, often undertaken in association with local joint venture partners.

Those operations may expose the Group to increased risk of governance and compliance issues. Any significant failure to comply with laws or regulations could lead to penalties and other financial liabilities, as well as reputational issues. Where there is a jurisdictional requirement for local investment or representation, the Group’s ability to continue business in that jurisdiction could be adversely impacted from an ethical or legal perspective.

  • Corporate governance framework, including limits of authority
  • Risk tracking of JVs, agents and other third-party relationships, including use of bespoke web-based platform
  • Policies and training
  • Corporate structuring of relationships, using external local legal advice
  • Implementation of regional operating model during 2023 organising all of James Fisher's product lines under common leadership in each major operating territory
  • Internal Audit programme includes overseas businesses resourced with local audit team, to leverage advantages of working in local language and consistent with local law/regulation

Operating in developing markets remains a key part of our strategy. A gradual return to free travel following the relaxation of global travel restrictions in response to COVID has allowed management to increase the frequency of their visits to overseas territories during the year. The improvements in mitigating controls, along with an ongoing increase in Group awareness in this area, result in the net risk being unchanged. During the course of 2023 the Group is intending to further enhance its operating model to consolidate all product lines in major operating territories under common local leadership teams.


No change. Commercial and financial controls, project management and risk management, along with increasing Group awareness in this area continue to mitigate the risk.

The Group’s ability to operate in emerging markets for global customers offers an increased opportunity to be differentiated from our competitors.
Nature: Potential impact: Mitigation:

The Group operates in industries which may be adversely impacted due to the change in energy mix. The Group is committed to minimising the impact of its operations on climate change.

The Group may suffer operational impacts of extreme weather events, as well as potential changes in technologies, markets and regulation in response to climate change which could increase costs, challenge the viability of Group services or affect asset values. The Group is also conscious of the need to reduce its impact on the climate, including its emission of greenhouse gases.

  • Continuing the Group's end market and geographical diversity
  • Focus on decommissioning of oil and gas assets, increasing support of LNG
    and renewables markets
  • Initiatives to reduce the Group's emissions and other impacts on the environment

Energy markets remain a key source of Group revenue, including both the oil and gas and renewables industries. With the strategic focus of the Group supporting the "energy transition", from oil and gas to renewables, with increased investment in oil and gas decommissioning and renewables markets, the Board continues to consider the impact of climate change on energy markets as one of the Group’s principal risks, as well as one of the Group’s key strategic opportunities. The risk of climate change to the Group's strategy is mitigated by the continuing diversification of the Group into new markets which, aligned with focused strategic opportunities, targets the ongoing long-term sustainability of the Group. The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy markets as both a risk (long-term oil and gas, post decommissioning) and an opportunity (renewables).


No change. The Group has built its strategic goals around sustainability, driven in part by the impacts of climate change on the Group and the markets it serves. 

The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy markets as an opportunity.
Nature: Potential impact: Mitigation:

The Group operates in markets where larger project based contractors may seek to pass risk down the supply chain.

Through its growth and diversification into new markets and geographies, the Group may be exposed to increased contractual risks, which could result in financial impact caused by late payment, cost overruns, increased claims and litigation, and/or exposure to non-UK legal jurisdictional uncertainty.

  • Internal contract management governance, including policy and training
  • Internal and external specialist legal support
  • Appropriate balance of risk and reward in contracts, based on Group principles
  • Investment Committee and (if large enough) plc Board review and approval of all major bids/tenders
  • Targeting increased contract management skills
  • Insurance
The Board and Executive Committee have increased oversight of significant contracts with the introduction of the Investment Committee during 2022. The purpose of the Investment Committee is to scrutinise all significant new contracts, some of which will also require plc Board approval. There is continued use of internal and external legal support.


No change. The Group is diversifying its operations to secure a more sustainable future for its energy businesses and that will bring its own challenges whilst the Group adjusts to new customer expectations and industry developments.

As the Group pursues its strategy, contracts become a key mechanism for merging risk and also enhancing engagement with our customers and suppliers.
Nature: Potential impact: Mitigation:

Group businesses may fail to meet customer expectations or contractual requirements on project delivery.

This could cause significant adverse financial and reputational consequences, and / or increased cost and management time resulting from management of disputes and litigation.

  • Increasing the specialist project management skillset across the Group through training and recruitment
  • Implementation of project management best practices
  • Focus on post-signature contract management
  • Salary benchmarking and role banding exercise
  • Formation in early 2023 of an Operational Excellence team within the Group, the remit of which includes standardising and improving the Group's project delivery.


The profile of the work undertaken by the businesses continues to shift more towards project work. Established mitigating processes include targeting increased project delivery skillsets through external hire and training, ongoing development of project management best practice, and building post-signature contract management into the project management skillset. We remain focused on improving outcomes and have formed an Operational Excellence team at the start of 2023 to drive standardisation, simplification and process improvement.
No change. There has been one high-profile project challenge within the James Fisher Nuclear business during 2022 which demonstrates the need for continuous improvement. Elsewhere in the Group there have been a number of successfully delivered projects, particularly in the Marine Contracting business, which has been on a journey of continuous improvement for the past three years.
Our customers require suppliers which can manage large projects in demanding environments. The Group is in a key position to support them, grow our customer engagement, and win new work.
Nature: Potential impact: Mitigation:

The Group may fail to attract, retain and develop personnel of the requisite calibre and to plan for succession in key leadership positions.

This may result in the Group not being able to maintain its existing strong and experienced management teams in its operational businesses, and / or a risk to the Group’s delivery of its strategic objectives, which depends on recruiting and retaining the right people in all areas of our business to maintain competitive

  • Implementation of employee strategy
  • Graduate recruitment
  • Talent identification and management
  • Management development programmes
  • Appraisal process
  • Training plans
  • Remuneration incentives
  • Succession planning
  • Salary benchmarking and role banding exercise

Progress continues on the implementation of the employee strategy to improve recruitment and retention. New senior management positions have been filled during the course of 2022. Succession and recruitment have improved. Retention has been a challenge and remains a key focus, particularly in a high inflation environment.


Increase. The Group's voluntary turnover rate has stabilised during 2022. Senior management changes have been implemented during the year but the recruitment market for talent remains highly competitive.

Improvements in recruitment and retention will strengthen our teams worldwide, as well as the ability to compete in our chosen markets.      
Nature: Potential impact: Mitigation:

The Group is exposed to interest rate, foreign exchange and credit risk. The Group’s decentralised operating model requires robust and effective financial controls.

 An increase in interest rates or change in exchange rates or credit restriction would have a financial impact on the Group. Poor financial controls may impact adversely on reporting accuracy or risk of fraud.
  • Formalised Group internal controls and accounting policy manuals
  • Documented levels of delegated authority for all operating companies
  • Half-yearly self-certifications covering the effectiveness of financial controls signed by operating company Finance Directors
  • Third party whistleblowing hotline available to all employees (from mid-2022)
  • Internal Audit reviews on a periodic basis for all operating companies
  • Internal controls improvement programme
  • Non-syndicated banking relationships plus 3-bank RCF club
  • Centralised finance function management of Group net debt, and FX
  • Forward currency contracts
  • Interest rate swaps

The Group's central internal controls and treasury functions continue to drive standards across the Group. During 2022 the Group has commenced a project specifically aimed at improving internal controls, using a third party to support the Group's Head of Internal Controls. The Treasury team continues to implement the Group's FX hedging policy and transacted a new interest rate swap during the year upon expiry of the existing hedge. Recent increases in interest rates have increased the sensitivity of the Group's results to its Interest Cover covenant (EBIT divided by Interest).

Increase, due to current covenant compliance risk, albeit the Group remained in compliance with all banking covenants for 2022.
The Group's hedging policies are designed to provide certainty on cashflows. The internal controls improvement project is aimed at enhancing efficiency as well as strengthening control.                                                                                                                                                                                              


Nature: Potential impact: Mitigation:

The Group is a global business and has been impacted by the COVID pandemic during 2022. The Group may face a risk of future pandemics, and in particular an enhanced international government response to future potential virus spread which may lead to quicker triggering of restrictions on work and travel in the places where the Group needs to provide its services.

The current impact on the Group’s operations created by the COVID pandemic may continue. A future pandemic, or governmental response to a potential virus spread may impact the Group’s ability to provide services to its customers.

  • Tracking and following Government restrictions and recommendations
  • Making office locations safe for work
  • Home working where possible, supported by improved IT services enabling better communication
  • COVID working group providing advice and support to employees
  • Enhanced employee assistance programme
  • Encouraging vaccination where possible

The ongoing COVID pandemic has continued to impact the Group's results, particularly in China during 2022 where local lockdowns adversely impacted JFD's ability to complete customer contracts and collect final payment milestones. Although the impact of the pandemic on 2022 was not as severe as in 2020 and 201, it remains a risk to the Group. From an internal operating perspective, the Group now has robust working from home provisions and policies to govern safe working at sites where working at home is not possible. These controls, however, cannot totally mitigate the business interruption should customers choose to delay or cancel projects.

Decrease. The impact during 2022 was largely limited to the JFD business.

Through finding creative ways to continue to deliver for our customers through the pandemic, we are able to build further customer loyalty and differentiate ourselves through our energy and resilience.


Identifying emerging risks

Our risk management programme includes a review of emerging risks.

We define emerging risks as those which take the form of a systemic issue or business practice that has either not previously been identified, has been identified but has remained dormant, or has yet to rise to an area of significant concern. The Risk Committee is continuing to work on improvements in this area and has specifically discussed during the year, based on the frequency with which businesses are reporting risks in these areas, whether Transformation, Funding, Competition and Supply Chain risks, are adequately included in the Group's Principal Risks. The Committee concluded that both Transformation risk and the Group's ability to maintain access to adequate funding had risen to the level of being considered principal risks. The Committee further concluded that the key aspects of each of Competition and Supply Chain risk are adequately covered in the Group's current principal risks and that neither should therefore be included specifically as a key risk.

The impacts of the COVID pandemic since 2020 have created a heightened awareness of new and emerging risks that could impact the Group, its customers and suppliers – this has come through in the trading company reporting in relation to the pandemic, although no specific individual “new” issues or business practices have been identified; for example, post-pandemic ways of working and longer-term skill requirements may emerge as workforce planning risks, closely associated with risk in relation to the recruitment and retention of key people. Furthermore, ongoing scenario planning work in line with Task Force on Climate-related Financial Disclosures (TCFD) guidelines is focusing in on the identification and assessment of potential short to longer-term emerging physical risks linked with climate change, which are already captured in part in the Group’s principal risks relating to energy markets, although this will develop in further directions once the analysis is complete.

The ongoing development with respect to an energy mix in transition continue to be at the forefront of the Company’s risk management and strategic planning, as renewable sources produce more energy, and environmental concerns lead to an increased focus on the decommissioning of oil and gas assets. Although the Company recognises that oil and gas will remain part of the energy mix for some time, we aim to provide services for the benefit of the production, delivery and decommissioning industries in a safe and sustainable way, whilst we support the energy transition to low carbon sources.

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ScottishPower Renewables (SPR) contracted JFMS to deliver an integrated marine services package during the construction of its East Anglia ONE (EA1) windfarm.
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