- Transforming UK's offshore wind supply chain with innovative ULSTEIN TWIN X-STERN SOV concept
- James Fisher Subtech safely and successfully executes subsea IRM contract for NEO Energy and secures future work
- Appointment of Chief Executive Officer
- James Fisher Renewables boost global operations and maintenance with new senior hire
30 April 2020
AGM trading statement and Covid-19 update
James Fisher delivers a trading statement and updates on its approach to meeting the operational challenges of Covid-19.
Our priority throughout the Covid-19 pandemic has been to protect our employees and, within that context, do all we can to continue to provide our services and goods to customers, whilst supporting and maintaining our supply chain. The commitment, support and engagement of our 3,300 employees in stepping up to the challenges we are facing has been remarkable.
Overall, Group trading in the first quarter was in line with the Board's expectations, which were set at the beginning of the year. However, the effects of Covid-19 were becoming evident towards the end of the quarter and have continued to impact the Group from that point.
Travel restrictions are adversely affecting projects in the Asia Pacific region in Specialist Technical and a lack of subsea projects in West Africa is restricting otherwise good progress in Marine Support. Ship-to-Ship services and Tankships have seen little negative impact to date.
However, the effects of the Covid-19 lockdown have been exacerbated by a sharp fall in the price of oil and it appears likely that the imbalance between supply of oil and gas and real demand will maintain downward pressure on oil prices for a prolonged period. The Group is well diversified by end market and geography and, whilst in Norway (3% of Group revenue) there has been an immediate drop in demand, other businesses continue to trade in line with our expectations despite logistical challenges. It is evident that the seasonal pick up in the second quarter in Offshore Oil and in Renewables is likely to be delayed.
As stated on 26 March 2020, given the uncertainty of the effects of Covid-19, the Group has taken proactive actions to reduce costs, to optimise cash flow and to protect liquidity. To date, these actions have included the deferral of all discretionary capital expenditure; instituting a hiring freeze; placing approximately 400 employees on temporary furlough and deferring pay for approximately 800 employees of 20%, including the salaries and fees of each Board member.
The Group has a strong balance sheet and good liquidity. This has been supported significantly by the actions we have taken in response to the Covid-19 crisis, including the suspension of the final dividend for the year ended 31 December 2019, as reported on 26 March 2020.
On an IAS 17 basis, net debt at 31 December 2019 was £203m, with c.£42m of headroom. Committed facilities were increased by £30m in March 2020 to £280m and headroom at 31 March 2020 was £64m, with a further £13m of headroom on uncommitted overdraft facilities.
Financial guidance withdrawn
It is impossible to forecast with any reliability what overall impact Covid-19 will have on the Group; this will depend on how long the crisis lasts and on how quickly our businesses recover. Similarly, the effects of the oversupply of oil and gas remain difficult to predict. Mindful that the landscape can change rapidly, therefore, we have withdrawn financial guidance for FY2020 and will update investors when we have a clearer view of the likely outcome.
James Fisher is well diversified by geographical sector and by end market; this provides resilience to profitability and cash flow, notably in the current challenging environment. We continue to closely monitor our business and will not hesitate to take swift and decisive action where necessary to ensure the Group is well placed to provide long term value to our shareholders.
For further information:
James Fisher and Sons plc
Chief Executive Officer
Group Finance Director
020 7614 9508
0203 727 1340
This announcement contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature. All statements other than statements of historical fact are forward-looking statements. By their nature, forward-looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements. Factors may cause future outcomes to differ from those foreseen or implied, many of which are beyond James Fisher's control or influence. Any forward-looking statements speak only as of the date of this announcement and have not been audited or otherwise independently verified. Past performance should not be taken as an indication or guarantee of future results and no representation or warranty, express or implied, is made regarding future performance. Except as required by any applicable law or regulation, James Fisher expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in the Group's expectations or any change in events, conditions or circumstances on which any such statement is based after the date of this announcement, or to keep current any other information contained in this announcement. Accordingly, undue reliance should not be placed on any forward-looking statements.