26 February 2019

James Fisher's preliminary results for the year ended 31 December 2018

James Fisher and Sons plc (James Fisher), the leading marine service provider, announces its results for the year ended 31 December 2018.


2017 restated**

% change
Revenue (£m) £561.5m £505.4m +13%
Underlying operating profit* £62.1m £55.8m +15%
Underlying operating margin 11.0% 10.8% +20bps
Underlying profit before tax* £56.1m £50.3m +15%
Underlying diluted earnings per share* 89.5p 81.4p +14%
Statutory profit before tax £55.4m £49.0m +17%
Statutory diluted earnings per share 88.9p 79.5p +16%
Total dividend per share 31.6p 28.70p +10%

*excludes separately disclosed items
**2017 restated for IFRS 15 'Revenue from contracts with customers'


  • All four divisions increased revenue and underlying operating profit
  • Strong organic† growth in revenue of 12% and underlying operating profit of 19%
  • Two submarine rescue systems delivered to the Indian navy
  • First long-term maintenance contract in Renewables
  • Strong cash conversion of 157% (2017: 57%), net debt:ebitda 1.3 times (2017: 1.7 times)
  • Total dividend up 10% to 31.6p per share

Commenting on the results, Chief Executive Officer, Nick Henry, said:

"James Fisher performed well in 2018 and, with a strong pipeline of opportunities at the start of 2019, the Board has a high degree of confidence for the year ahead. The Group operates across a number of sectors with a broad geographical spread which adds resilience in times of economic uncertainty and our strategy of adding complementary skills and disciplines to the Group through niche acquisitions has served us well.

"The unwinding of the working capital commitment for the Indian submarine rescue vehicles went to plan and with our record of strong cash generation we closed the year with a robust balance sheet. I am confident that we will deliver further progress for our shareholders in the years ahead."


Chairman's statement: Preliminary results for the year ended 31 December 2018

I have pleasure in presenting my first full year statement to shareholders since I was appointed Chairman at the 2018 Annual General Meeting (AGM), a year which saw James Fisher produce another strong set of financial results, with growth across all four divisions which was predominately organic.

The Board remains focused on delivering the Group's established strategy which aims to deliver long-term growth in shareholder value through a mixture of organic growth supplemented by niche acquisitions across a broad international landscape.

In December, the Board received notice from Nick Henry of his intention to retire from his position as Chief Executive Officer by the end of 2019. The notice period ensures sufficient time to complete a thorough search process, which has already commenced, and to facilitate a smooth transition of responsibilities. Nick will be leaving the Group in a strong position with a clearly defined strategy that has delivered double digit growth in underlying earnings and dividends, an experienced senior management team and significant growth opportunities in the future.

Recognising that every company is now expected to make a contribution to society and engage positively with all our stakeholders I have introduced an initiative to develop a Group sustainability strategy extending from responsible sourcing to supply chain resilience, lean manufacturing, customer engagement, reputational enhancement, corporate risk through to end of life and recycling. We acknowledge the scientific body of evidence that human activity is playing a large part in changes to our climate and we accept our responsibility to address this as part of our normal business activities.


Group revenue increased 13% in 2018 to £561.5m (2017: £499.3m) and underlying operating profit was 15% higher at £62.1m (2017: £54.1m). Underlying profit before tax rose by 15% to £56.1m (2017: £48.6m) and underlying diluted earnings per share increased by 14% to 89.5p (2017: 78.7p). Statutory profit before tax and statutory diluted earnings per share were 17% and 16% higher respectively.

The Group's operating cash flow reflected a significant working capital inflow following the delivery of two deep-submergence rescue vessels to the Indian navy completing the manufacturing phase of a 25 year contract to supply and maintain a world class submarine rescue capability enhancing safety for submariners.


The combination of strong results and operating cash flow, supported by a robust balance sheet has led the Board to propose an increase of 10% in the final dividend to 21.3p per share (2017: 19.3p). Subject to shareholder approval at the AGM, this dividend will be paid on 10 May 2019 to shareholders on the register on 5 April 2019. The total dividend per share for the year will be 31.6p per share (2017: 28.7p) which represents a 10% increase on 2017.

Business overview

Trading was strong across the Group with Marine Support leading the way through growth in services provided to the renewables industry in the UK. Our ship-to-ship transfer operations in Brazil had another good year with further growth. Our strategic goal has been to establish the Group in the emerging maintenance market for offshore windfarms and during 2018 we were awarded our first long-term contract for maintenance services to the London Array in the Thames Estuary.

In Specialist Technical, the delivery of the two rescue submarines to the Indian navy, on schedule, was a highlight supplemented by significant contract wins for swimmer delivery vehicles and the award of a £30m contract for the design, construction and delivery in 2021 of a deep search and rescue vehicle for the South Korean navy.

Our Offshore Oil division saw a limited improvement in activity levels but there is growing momentum in the industry and we are well set to take advantage of a further upturn in the oil and gas market when this occurs. Tankships continued to trade strongly and completed the purchase of two tankers for £10.6m in line with our policy to refresh the fleet over the coming years.

In January 2019, in line with our niche acquisition policy, James Fisher announced the purchase of Martek, a UK based business which provides a range of innovative safety and calibration systems and products to the marine sector and provides a proven channel to market for the Group's related products and services. In addition, we acquired a majority interest in Murjan, based in the Kingdom of Saudi Arabia, with the balance retained by the vendor. Murjan provides near-shore marine construction and maintenance services and we will work together to secure a leadership position in that market.

The Board

Charles Rice retired on 3 May 2018 and I was appointed Chairman. As a Director of James Fisher, including six years as Chairman, Charles always gave wise counsel and I would like to express my thanks for his valuable contribution to the development of the Group.

Justin Atkinson was appointed to the Board on 1 February 2018 and succeeded me as Chairman of the Audit Committee. Justin was Chief Executive and a Director of Keller Group plc from 2004 to 2015, having formerly served as both Chief Operating Officer and Finance Director, and has significant operational and financial experience both in the UK and internationally.

On 28 February 2019, David Moorhouse will retire from the Board. David has been a Non-Executive Director of James Fisher since August 2013 and his knowledge of the marine sector has been of great benefit to the Group. On behalf of the Board, I would like to thank David for his contribution over the last five and a half years and wish him well for the future.

On 1 March 2019, Dr. Inken Braunschmidt will be appointed as a Non-Executive Director. Inken has spent a large part of her career with the utilities company RWE and is currently the Chief Innovation and Digital Officer of Halma plc. On behalf of the Board, I welcome Inken to the Group.

Our employees

Our employees remain our most important asset and their hard work continues to be a driving force behind our consistent and strong performance. James Fisher's success is due to the combined efforts of all of our employees across the Group and I would like to thank all of our staff for their support and contribution this year.


James Fisher performed well in 2018 and, with a strong pipeline of opportunities at the start of 2019, the Board has a high degree of confidence for the year ahead. The Group operates across a number of sectors with a broad geographical spread which adds resilience in times of economic uncertainty and our strategy of adding complementary skills and disciplines to the Group through niche acquisitions has served us well.

The unwinding of the working capital commitment for the Indian submarine rescue vehicles went to plan and with our record of strong cash generation we closed the year with a robust balance sheet. I am confident that we will deliver further progress for our shareholders in the years ahead.

Chief Executive's review

Principal corporate objectives

Our goal is to deliver sustainable long-term growth in underlying earnings per share and progressive dividend growth. In the last ten years, underlying earnings per share and dividends have grown by compound annual rates of 10% and 9% respectively. In 2018 underlying earnings per share grew by 14% (2017: 7%) and the total annual dividend per share grew 10% (2017: 10%).

Progress against the Group's strategy is measured by reference to financial and non-financial key performance indicators. Revenue was 13% higher in the year ended 31 December 2018 at £561.5m with increases across all four divisions. After adjusting revenue for the effect of changes in currency and businesses acquired, organic revenue growth was 12%, which was due to good growth in renewables, ship-to-ship services and some recovery in the oil & gas sector. Underlying operating margins increased 20 basis points to 11.0% (2017: 10.8%).

The Group's cash conversion, which measures the proportion of underlying operating profit that is turned into operating cash, was 157% (2017: 57%) reflecting the reversal of the working capital invested in the last two years to assemble and deliver two submarine rescue vessels to the Indian navy. The Group's post-tax return on capital employed, which is our key indicator of shareholder value increased to 12.2% (2017: 12.0%).

Carrying out our marine service operations to a high degree of safety and integrity is the Group's top priority and the first agenda item on every business board meeting. The safety performance of our operations at sea has continued to be at an industry leading level. The Group's lost time incident frequency (LTIF) which measures the number of lost time incidents per million working hours reduced to 0.4 (2017: 1.0).

Strategic progress

During the year, the Group has extended its presence in and the range of services provided to, the offshore wind industry. In June, we completed a contract worth in excess of £30m to provide an integrated package of marine support services to the Galloper windfarm, and work has commenced on marine support services for other offshore windfarms being constructed in the UK.

Our long term strategic aim has been to position the Group to provide an integrated package of maintenance and inspection services to the offshore wind industry. In October, three contracts were signed with London Array, which with 175 turbines and 630 mega-watt output was until recently the largest in the world. The contracts are for topside maintenance, subsea services, including inspection of the substation and all wind turbine generators, and high voltage and cable maintenance and inspection services. This involves EDS, the specialist high voltage engineering services company which was acquired in December 2017 and has a market leading capability in high voltage offshore installation, cable monitoring and repairs.

In June we were awarded a 10 year integrated marine services contract to supply offshore terminal support services for the UK operations of an international energy company. Supporting the safe and efficient offloading operations at an offshore terminal on the east coast of England, the activities include assisting in the arrival, connection, and departure of around 110 third party tankers each year along with specialist diving services and buoy maintenance.

The Group is the global leader in the design and operation of submarine rescue systems, Services are currently run for the UK/Nato, Singapore and Australian navies. In 2018, our business, JFD, delivered two of our third generation, free-swimming submarine rescue vessels to the Indian navy under a contract worth £193m and in 2020 we will commence a 25 year service agreement to manage the rescue service and maintain the vessels.

JFD is also an industry leader in the design and delivery of high quality diving equipment to the military and commercial diving markets. In 2018 our Cobra bailout rebreather for the commercial market was launched. This increases safety and is becoming the standard for the industry, and recently won the subsea industry award for Innovation in Safety. Our Stealth Clearance Diver Life Support Equipment (CDLSE) rebreather, currently deployed by 11 navies with over 600 sets in use, was upgraded to enable the control system to rapidly respond to changes in the life support system and to significantly increase dive duration time from six to eight hours. These rebreathers are used primarily for mine countermeasure explosive ordnance disposal and represent a new benchmark in underwater life support technology, increasing levels of diver safety, equipment reliability, maintainability, operational capability and mission versatility.

Our nuclear decommissioning business, JF Nuclear, has been investing in a brand new range of radiation protection instruments that are designed to be robust, reliable and easy to use and provide accurate and actionable data. These new products which monitor site contamination and give clearances where appropriate, are supported with comprehensive through-life support.

In November, and at times under challenging weather conditions, JFD partnered with the Royal Australian Navy to conduct the annual Black Carillon exercise which tests Australia's submarine rescue system in a series of scenarios designed to replicate a real-life submarine rescue emergency. Importantly, the exercises demonstrated the world-class capability of the fully-integrated system that JFD provides to the Australian Government which includes a submarine rescue vehicle, a transfer-under-pressure chamber and a hyperbaric equipment suite to ensure that submariners receive the best possible medical treatment once they are back on the water's surface.

We invested further in our submarine rescue services in Australia with the acquisition of Cowan, which designs and manufactures lifesaving recompression and hyperbaric chambers and is based near Newcastle in New South Wales.

The strategy for our Tankships division continues to be to provide capacity to match the demands from our customers for distribution contracts around the UK, Irish and North European coasts. This is a mature and cash generative business, and in 2018 some of this strong cash generation was used to refresh the age profile of the fleet. Two vessels were acquired for £10.6m. The Dee Fisher, named after the Aberdeenshire river and the Corrib Fisher, named after the River Corrib which flows into Galway Bay, are both classified as IMO 2 chemical tankers designed to carry clean petroleum products and certain chemicals.

In Offshore Oil our artificial lift business, which provides mechanical and electrical services for oil production, had a strong year with revenue well ahead of 2017. The degree of market recovery in the other businesses was mixed. Our Norwegian business, Scan Tech AS, benefited from an improvement in the rig maintenance market but well testing remained flat.

Since the year-end, the Group acquired Martek Marine for an initial consideration of £9m. Martek, which is headquartered in the UK with an office in Singapore, provides a range of innovative safety and calibration systems and products to the marine sector and aligns with the similar businesses in the Group. After establishing our Subtech business in the country, the Group acquired a 60% interest in Murjan, a Saudi Arabian based company, which provides near-shore marine services, for an initial consideration of £4.1m.

The Group's senior leadership team held their annual meeting in September to discuss strategic plans for their businesses and for the Group over the medium-term. Our senior team was strengthened in Marine Support during the year from a combination of internal promotion and external recruitment. Succession planning is one of the key challenges identified by the Board and delegated to the Executive Directors to manage. The Group continues to have a good track record of retaining key management post acquisition and plans are in place for business leaders who may retire in the next two to three years.

Additional information: