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07 July 2020
James Fisher and Sons plc Half year post close trading update
James Fisher and Sons plc, the leading marine services provider, issues the following post close trading update for the half year to 30 June 2020.
Our priority throughout the Covid-19 pandemic has been to protect our employees and their families and to continue to provide our services and goods to customers, whilst supporting and maintaining our supply chain. The commitment, support and engagement of our employees in stepping up to the challenges of Covid-19 continues to be remarkable and greatly appreciated.
As announced in the Group's AGM statement, the effects of Covid-19 on the Group have been exacerbated by a sharp fall in the price of oil. The imbalance between supply and demand in the oil and gas sector has continued to place downward pressure on oil prices since then and this may persist for some time. Whilst many of the Group's businesses have proven to be resilient through the first half, Group revenue in the second quarter was 18% lower than the comparative period in 2019. For the first half, Group revenue was 10% lower than the comparative period in 2019.
In Marine Support, the second quarter saw subsea service projects being deferred, in both renewables and in the oil and gas sector, together with supply chain challenges due to Covid-19 across all businesses. As a result, Marine Support's financial performance will be lower in the first half, year-on-year, despite the ship-to-ship oil transfer business trading strongly during that period. We have taken the decision to restructure the division, reduce the cost base and refresh the management structure which will provide clearer strategic and operational direction going forward.
Specialist Technical has performed satisfactorily with both the nuclear and defence segments proving resilient despite some logistical supply chain issues.
Offshore Oil, which had good momentum entering 2020, has traded well despite the challenges of Covid-19 and will report improved profitability compared to the first half of 2019. Notably, our artificial oil-well lift business continues to perform well and we have secured a number of marine infrastructure decommissioning projects in Asia during the first half.
Tankships traded well through the first four months of 2020, but shipments of clean petroleum products inevitably reduced during May and June as a consequence of the UK and Irish lockdown.
Covid-19 mitigating actions and financial position
At the start of the Covid-19 pandemic, the Group took immediate actions to protect our people, optimise cash flow and maximise liquidity.
This included making use of the Government's furlough scheme, which the Group will shortly stop utilising, coupled with a 20% deferral in salary for around 800 employees for the second quarter. This will be repaid during the second half of the year, except to all Board members and the Executive Committee who have accepted pay cuts of 20% for the second quarter. The Group has returned to full salaries with effect from 1 July.
The Group has a strong balance sheet with net debt estimated at approximately £175m at 30 June 2020, compared to £203m at the year end. In the first half of 2020, the Group increased its committed lending facilities by £50m to £300m. Strong cash management and the deferral of payments for dividends, taxes and pensions, together with tight control of costs and capital expenditure, has seen headroom under committed facilities increase from £42m at 31 December 2019 to over £100m at 30 June 2020.
Half year results
Due to the uncertainties surrounding our markets at the time of our AGM on 30 April 2020, the Group withdrew financial guidance for the year. While the intervening months have continued to present challenges, the Group has proven resilient and performed well in the circumstances.
James Fisher is well diversified by geographical sector and by end markets which provides resilience to profitability and cash flow, most notably in the current environment. The Group's half year results are scheduled to be announced on 25 August 2020.
For further information
|James Fisher and Sons plc||
Eoghan O'LionairdStuart Kilpatrick
Chief Executive OfficerGroup Finance Director
|020 7614 9508|
Richard MountainSusanne Yule
View the full RNS article.