Interim Results
JAMES FISHER AND SONS PLC
14 September 1999
Interim Results for the Six Months
to 30 June 1999
Summary Half year Half year Year to
to 30.6.99 to 30.6.98 31.12.98
Turnover £37.43m £31.87m £63.52m
Profit before tax £3.09m £2.99m £3.85m
Earnings per share 5.66p 4.22p 5.76p
Dividend per share 1.54p 1.40p 3.75p
* Increased turnover due principally to sale of two second
hand ships
0
* Solid cash flow leads to 10 per cent increase in interim
dividend
* Tonnage tax will be of 'considerable benefit' to the
company
Prospects
David B. Cobb, Executive Chairman, says: 'Our time charters
and contracts of affreightment, all of which have been renewed
and in some cases with increased volume, continue to provide a
solid base for the company'.
'With charter/contract turnover secured, we have good reason
to believe that the second half results should produce an
improved performance compared with the first six months of the
year.'
Enquiries: David B. Cobb, CBE, Executive Chairman
Tel: 0171 338 5808
Issued on behalf of James Fisher and Sons Public Limited
Company by Tavistock Communications Limited (contact: Keith
Payne, tel: 0171 600 2288)
Chairman's Statement
Financial
At £3,091,000 profit before tax for the six months to June
1999 was marginally higher than for the same period of 1998.
Turnover from continuing operations at £37,366,000 was up from
£31,201,000 in 1998 due principally to the sale of two second
hand ships, sourced originally for conversion to cable repair
ships for onward charter, but sold prior to conversion to
Cable & Wireless Marine. This company, which has now been
acquired by Global Crossing Limited, has changed its name to
Global Marine Systems Limited.
Dividend
Despite a difficult period in shipping, the underlying
performance of our fleet from charters and contracts of
affreightment has produced a solid cash flow. This has led
the Board to increase the dividend by 10% to 1.54p (1998 -
1.40p) which will be paid on 18 November 1999 to shareholders
on the register at 15 October 1999.
Operations
Revenues from the carriage of spot market bulk cargoes, dry
and wet, has been difficult. Spot market rates for mini
bulkers and oil tankers are at the lowest levels seen for many
years. In the case of dry bulk, this is due to an influx of
small ships from the Baltic States and the former Soviet Union
creating a large oversupply of tonnage. The squeeze on rates
in the oil market has been partially due to the effect of the
lower price of oil and by the entry of chemical tankers into
the clean petroleum trade, in view of a serious shortage of
chemical tanker movements.
Delays in turning vessels around at certain oil installations
have continued to cause problems for tanker operations.
During the period we sold at a loss of £54,000 one tanker,
m.t. Tillerman, 25 years old, and one dry cargo vessel, m.v.
Rockisland, 21 years old. We have sold a further tanker since
30 June, m.t. Tyne Fisher, 19 years old. We laid up four of
our older tankers and three bulk carriers in the Spring. As
we approach the Autumn, all the tankers will be returned to
service with only the dry cargo vessels in lay-up. It is still
our intention to sell, whenever possible, our dry cargo
vessels and older tankers.
Notwithstanding spot market conditions and delays, our core
businesses have produced profits and sound cash flows.
Tankship contracts with the major oil companies remain in
place with the volume carried, up on last year. Our ongoing
contracts with British Nuclear Fuels, National Power and the
Ministry of Defence continue to make a satisfactory
contribution to profitability.
The Nexus, our cable laying ship, has performed technically
above expectations in difficult sea states in the Pacific
while on charter. This ship produces an excellent return on
capital.
Underwater Engineering Services, our Aberdeen-based supplier
of services to the North Sea exploration and production
companies, is busy and profitable.
Seafloor Dynamex, our seafloor excavation company, has
successfully completed a number of assignments in China and
the North Sea and contributed a small profit. These successes
are adding to the reputation and acceptability of the advanced
excavation equipment which was developed in-house.
The warehousing contract at RAF Sealand, renewed for a further
two years from November 1999, is producing satisfactory
results.
A substantial provision was made in the 1998 accounts for
Newhaven closure costs. We are now on a care and maintenance
basis at Newhaven, having ceased cargo operations there in
March this year. Discussions with our landlord and third
parties concerning the long term use of the facilities are
continuing.
Year 2000
As part of a full and detailed review of our computerised
systems onshore and afloat we believe we have addressed all of
the key issues and have put in place procedural plans to cover
the year end.
Tonnage Tax
I am delighted to report that, following a concerted campaign
during my Presidency of the Chamber of Shipping, the
Government has announced, following a review by Lord Alexander
of Weedon, that a tonnage tax for British shipping companies
will be introduced from l January 2000. This tonnage tax will
replace corporation tax and will be of considerable benefit to
our company. The impact of this on our deferred tax provision
will be considered at the end of the year.
PROSPECTS
Our time charters and contracts of affreightment, all of which
have been renewed and in some cases with increased volume,
continue to provide a solid base for the company.
Our financial position is strong with net debt at £25,660,000
giving a net gearing of 47.9% which is low by industry
standards. We have investigated several possible
acquisitions/joint ventures, but so far these have not matched
our required criteria. We continue to explore suitable
opportunities, always with a view to enhancing shareholder
value.
With charter/contract turnover secured, we have good reason to
believe that the second half results should produce an
improved performance compared with the first six months of the
year.
STAFF
We have a strong and adaptable management team who along with
all our employees are to be thanked for their contribution to
these results.
David B. Cobb, CBE
Executive Chairman
Group profit and loss account
Six Six months Audited
months to to 30 June Year ended
30 June 30 June 1998 31 December
1999 Restated 1998
Notes £000 £000 £000
Turnover
Continuing operations 37,366 31,201 62,377
Discontinued port
operations 67 673 1,146
------- ------- -------
2 37,433 31,874 63,523
Cost of sales (31,598) (25,926) (51,947)
------- ------- -------
Gross profit 5,835 5,948 11,576
Administrative expenses (1,389) (1,481) (2,743)
------- ------- -------
Operating profit
Continuing operations 4,561 4,945 9,749
Discontinued port
operations (115) (478) (916)
------- ------- -------
3 4,446 4,467 8,833
Discontinued operations:
Port closure costs - (596) (2,862)
Continuing operations:
Loss on sale of ships (54) - -
Amounts written
off investments - (301) (301)
------- ------- -------
4,392 3,570 5,670
Interest receivable 504 752 1,335
Interest payable (1,805) (1,332) (3,151)
------- ------- -------
Profit on ordinary
activities before
taxation 2 3,091 2,990 3,854
Taxation 4 (369) (953) (1,071)
------ ------ ------
Profit on ordinary
activities
after taxation 2,722 2,037 2,783
Dividends
------ ------ ------
Non equity (2) (2) (4)
Equity (743) (676) (1,809)
------ ------ ------
(745) (678) (1,813)
------ ------ ------
Retained profit
for the period 1,977 1,359 970
====== ====== ======
Restated Restated
Pence Pence Pence
Earnings
per share 6 5.66 4.22 5.76
Adjusted
earnings
per share 6 4.60 5.94 11.00
Diluted
earnings
per share 6 5.64 4.17 5.71
Ordinary dividends
paid or payable:
Interim 1.54 1.40 1.40
Final 2.35
Group statement of total recognised gains and losses
£000 £000 £000
Profit for the period 2,722 2,037 2,783
====== ------ ------
Total recognised
gains and losses
relating to the
period 2,037 2,783
Prior year adjustments 346 346
------ ------
Total gains and losses 2,383 3,129
recognised since last annual
report
====== ======
Group balance sheet
30 June 1999 30 June 1998 Audited
Restated 31 December
1998
£000 £000 £000
Fixed assets
Intangible
assets 712 750 731
Tangible assets 94,058 99,528 98,802
------ ------ ------
94,770 100,278 99,533
Current assets
Stocks 717 739 717
Debtors 9,520 9,601 9,902
Cash at bank 4,932 3,583 2,900
Short term
deposits 15,076 11,177 14,496
------ ------ ------
30,245 25,100 28,015
------ ------ ------
Creditors: amounts falling
due within one year
Trade and other (11,356) (13,842) (12,328)
Bank loans (5,550) (4,617) (5,483)
------ ------ ------
(16,906) (18,459) (17,811)
------ ------ ------
Net current assets 13,339 6,641 10,204
------ ------ ------
Total assets less
current
liabilities 108,109 106,919 109,737
Creditors: amounts falling
due after more than one year
Trade and other (38) (499) (10)
Bank loans (40,118) (40,469) (42,177)
------ ------ ------
(40,156) (40,968) (42,187)
------ ------ ------
Provisions for
liabilities
and charges (14,424) (14,014) (15,998)
------ ------ ------
Net assets 53,529 51,937 51,552
====== ====== ======
Capital and reserves
Called-up
share capital 12,168 12,166 12,168
Share premium
account 23,050 23,048 23,050
Profit and
loss account 18,311 16,723 16,334
------ ------ ------
Shareholders'
funds 53,529 51,937 51,552
====== ====== ======
Group cash flow statement
Six Months to Six months to Audited
30 June 1999 30 June 1998 Year ended
Restated 31 December
1998
Notes £000 £000 £000
Net cash inflow
from operating
activities 5(a) 7,621 9,405 15,555
Returns on investments
and servicing
of finance 5(b) (1,087) (1,128) (2,343)
Taxation 5(c) (753) (34) (402)
Capital expenditure
and financial
investment 5(d) 200 (10,302) (14,136)
Acquisitions and 5(e) (243) (1,743) (1,743)
disposals
Equity dividends paid (1,134) (965) (1,640)
------ ------ ------
Cash inflow/(outflow)
before management
of liquid resources 4,604 (4,767) (4,709)
Management of
liquid
resources 5(f) (580) 2,490 (829)
Financing 5(g) (1,992) 4,912 7,490
------ ------ ------
Increase in cash in the
period 2,032 2,635 1,952
====== ====== ======
Reconciliation of net
cash flow to
movement in
net debt 5(h)
Increase in cash in
the period 2,032 2,635 1,952
Cash outflow/(inflow) from
decrease/(increase) in 1,992 (4,912) (7,486)
debt
Cash outflow/(inflow) from increase
in liquid resources 580 (2,490) 829
------ ------ ------
Movement in net debt
in the period 4,604 (4,767) (4,705)
Net debt at beginning
of period (30,264) (25,559) (25,559)
------ ------ ------
Net debt at end of period (25,660) (30,326) (30,264)
====== ====== ======
Notes on the interim accounts
* Interim accounts
The unaudited interim accounts for the group have been
prepared on the basis of the accounting policies as set
out in the annual report and accounts for the year ended
31 December 1998.
The results for the six months to 30 June 1999, the group
balance sheet and the group cash flow statement have been
subject to a review.
The comparative results for the six months to 30 June
1998, the group balance sheet and the group cash flow
statement have been restated to reflect the change in
accounting policy following the publication of Financial
Reporting Standard 12 by the Accounting Standards Board.
The figures for the year ended 31 December 1998 have been
extracted from the 1998 annual report and accounts which
have been filed with the registrar of companies. The
auditors' report on those accounts was unqualified and
did not contain any statement under section 237(2) and
(3) of the Companies Act 1985.
* Segmental analysis
Turnover and profit on ordinary activities before
taxation are attributable to the following activities:
Six months Six months Year ended
to 30 June to 30 June 31 December
1999 1998 1998
Restated
£000 £000 £000
Turnover
Shipping operations:
Continuing
operations 36,817 30,680 61,116
Engineering operations:
Continuing
operations 549 521 1,261
Port operations:
Discontinued
operations 67 673 1,146
------ ------ ------
37,433 31,874 63,523
====== ====== ======
Profit on ordinary activities
before taxation
Shipping operations:
Continuing
operations 4,400 4,730 9,166
Amounts written
off investments - (301) (301)
Sale of ships (54) - -
Engineering operations:
Continuing
operations 161 215 583
Port operations:
Discontinued
operations (115) (478) (916)
Port closure
costs - (596) (2,862)
------ ------ ------
4,392 3,570 5,670
Interest payable
less receivable (1,301) (580) (1,816)
------ ------ ------
3,091 2,990 3,854
====== ====== ======
* Operating profit
Operating profit is stated after charging depreciation of
tangible fixed assets of £3,791,000 (1998 £3,356,000)
and amortisation of intangible fixed assets of £19,000
(1998 £12,000).
* Taxation
The charge for taxation on ordinary activities
represents:
Six months Six months Year ended
to 30 June to 30 June 31 December
1999 1998 1998
Restated
£000 £000 £000
Corporation tax at
30.5% (1998 31%) (369) (236) (342)
Deferred taxation (624) (833) (1,015)
------ ------ ------
(993) (1,069) (1,357)
Adjustment in respect of
prior year
UK Corporation tax (603) - (143)
Deferred taxation:
Other 786 116 429
Change of rate 441 - -
------ ------ ------
(369) (953) (1,071)
====== ====== ======
The current year tax charge above includes the following
in respect of exceptional items:
Port closure costs
Deferred tax - 185 888
====== ====== ======
* Group cash flow statement
(a) Reconciliation of operating profit to net cash inflow
from operating activities
Six months Six months Year ended
to 30 June 1999 to 30 June 31 December 1998
1998
Restated
£000 £000 £000
Operating profit 4,446 4,467 8,833
Depreciation 3,791 3,356 7,367
Amortisation of goodwill 19 12 31
Profit on disposal
of tangible fixed
assets (6) (31) (39)
Decrease in
stocks - 5 27
Decrease in
debtors 328 706 243
(Increase)/decrease
in creditors (657) 923 (691)
Own costs
capitalised - (156) (214)
(Decrease)/increase
in provisions (300) 123 (2)
------ ------ ------
Net cash inflow
from operating
activities 7,621 9,405 15,555
====== ====== =====
(b) Returns on investments and servicing of finance
Six months Six months Year ended
to 30 June to 30 June 31 December
1999 1998 1998
Restated
£000 £000 £000
Interest received 519 594 1,098
Interest paid (1,604) (1,722)
(3,437)
Preference
dividend paid (2) - (4)
------ ------ ------
Net cash outflow (1,087) (1,128) (2,343)
====== ====== ======
(c) Taxation
Corporation
tax paid (753) (153) (520)
Corporation
tax received - 119 118
------ ------ ------
Net cash
outflow (753) (34) (402)
====== ====== ======
(d) Capital expenditure and financial investment
Purchase of tangible
fixed assets (1,537) (10,388) (14,315)
Sale of tangible
fixed assets 1,737 67 160
Sale of investments - 19 19
------ ------ ------
Net cash inflow
/(outflow) 200 (10,302) (14,136)
====== ====== ======
Included in the above are cash inflows of £1,720,000
relating to the loss on sales of ships of £54,000 for the
six months to 30 June 1999
(e) Acquisitions and disposals
Purchase of subsidiary
undertaking - (1,500) (1,500)
Net overdraft acquired with
subsidiary - (193) (193)
Costs associated
with discontinued
port operations (243) (50) (50)
------ ------ ------
Net cash outflow (243) (1,743) (1,743)
====== ====== ======
(f) Management of liquid resources
Short term
investments (580) (2,490) (829)
====== ====== ======
(g) Financing
Issue of ordinary
share capital - - 4
New secured loan 784 6,237 11,019
Repayment of
secured loans (2,776) (1,325) (3,533)
------ ------ ------
Net cash (outflow)
/inflow (1,992) 4,912 7,490
====== ====== ======
(h) Reconciliation of net debt
1 January 1999 Cash flow 30 June 1999
£000 £000 £000
Cash in hand
and at bank 2,900 2,032 4,932
------ ------ ------
Debt due after 1
year (42,177) 2,059 (40,118)
Debt due within
1 year (5,483) (67) (5,550)
------ ------ ------
(47,660) 1,992 (45,668)
Short term deposits 14,496 580 15,076
------ ------ ------
Net debt (30,264) 4,604 (25,660)
====== ====== ======
* Earnings per share
The calculations of basic and diluted earnings per share
are based on the following profits and numbers of shares:
Six months Six months Year ended
to 30 June to 30 June 31 December
1999 1998 1998
Restated
£000 £000 £000
Profit for
the period 2,722 2,037 2,783
Preference
dividend (2) (2) (4)
------ ------ ------
2,720 2,035 2,779
====== ====== ======
Weighted average number of shares:
Number of Number of Number of
shares shares shares
For basic
earnings 48,093,202 48,265,300 48,251,277
per share
Exercise of
share 83,214 525,374 380,445
options
------ ------ ------
For diluted
earnings
per 48,176,416 48,790,674 48,631,722
share
------ ------ ------
The adjusted earnings per share is shown to highlight the
underlying earnings trend and is calculated using the
same number of shares for the basic earnings calculation
referred to above and the amounts shown below:
Six Six months Year ended
months to 30 June 31 December
to 30 1998 1998
June Restated
1999
£000 p £000 p £000 p
Earnings
per 5.66 4.22 5.76
share
------ ------ ------ ------ ------ ------
Discontinued
port
operations 115 0.24 478 0.99 916 1.89
Port
closure
costs - - 596 1.23 2,862 5.93
Loss on
sale
of
ships 54 0.11 - - - -
Amounts
written
off
investments - - 301 0.62 301 0.62
Tax
effect
of
above (52) (0.11) (426) (0.88) (1,264) (2.61)
Prior
year
element
of
tax
charge (624) (1.30) (116) (0.24) (286) (0.59)
------ ------ ------ ------ ------ ------
(507) (1.06) 833 1.72 2,529 5.24
====== ------ ====== ------ ====== ------
Adjusted
earnings
per share 4.60 5.94 11.00
====== ====== ======
The six months to 30 June 1998 figure for adjusted
earnings per share has been restated from 6.23p to
include adjustments for the results of operations
discontinued in 1998, port closure costs, loss on sales
of ships, amount written off investments, and the tax
effect thereon.
* Post balance sheet event
On 23 July 1999 the m.t. Tyne Fisher was sold at a loss
of £35,000.
* Interim dividend
A dividend for the six months to 30 June 1999 on the
preference shares was declared on 30 June 1999. The
interim dividend of 1.54p net (1998 1.40p net) per 25p
ordinary share is payable on 18 November 1999 to those
shareholders registered in the books of the company at
the close of business on 15 October 1999.
* Interim report
The interim report is to be sent to all shareholders on
Tuesday 21 September 1999, posted first class. Copies of
the interim report will also be available from our
registered office at: Fisher House, P.O. Box 4, Barrow-
in-Furness, Cumbria LA14 1HR.
Wednesday, 15th May 2024
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