Interim Results
Fisher (James) & Sons PLC
11 September 2001
11 September 2001
Interim Results for the Six Months to 30 June 2001
Summary Half year to 30.06.01 Half year to 30.06.00 Year to
31.12.00
Turnover £33.49m £30.21m £60.58m
Profit before tax £5.31m £3.28m £5.01m
Basic earnings per share 10.75p 6.47p 9.34p
Adjusted earnings per 9.39p 6.65p 11.05p
share
Interim dividend per share 1.96p 1.70p 4.65p
* Profit from continuing operations up 37%
* Pre-tax profit up 62%
* Adjusted earnings per share up 41%
* Interim dividend raised 15%
Prospects
David B. Cobb, Executive Chairman, comments: 'We have had an excellent first
half and with the second half starting well have good reason to be optimistic
for the full year.'
Enquiries:
David B. Cobb, CBE
Executive Chairman
James Fisher and Sons PLC
Tel: 020 7338 5808
Issued on behalf of James Fisher and Sons Public Limited Company by Tavistock
Communications Limited (contact: Keith Payne, tel: 020 7600 2288)
Chairman's Statement
Financial
I am pleased to present an excellent set of results for the six months ended
30 June 2001. The profit from continuing operations, after deducting
interest, was £4,532,000 (2000 - £3,309,000), an increase of 37% on the same
period last year. Turnover was up 11%, reflecting better utilisation of our
tanker fleet, the introduction of the Fisher Cavalier and, for eight weeks of
the period, the new cable ship Oceanic Princess.
Profit for the period was £5,311,000 (2000 - £3,281,000) before tax of £178,000
(2000 - £163,000). After payment of dividends an amount of £4,185,000
(2000 - £2,295,000) was transferred to reserves.
Net interest charges were £793,000 (2000 - £712,000). The interest charges
will increase as our new cable ships come into service.
We have completed a complex investment/sale and release of leasehold
liabilities on our facilities at the Port of Newhaven. This exercise has
produced a net profit of £871,000. The transaction is represented in the
accounts as a discontinued activity. We now have a slightly less than 20%
interest in Societe d'Economie Mixte Locale (SEML), the French company owning
that part of the port which incorporated the Fisher terminal. We no longer
have any operating interest in the port. Completion of this transaction is
the culmination of many months of negotiations the outcome of which is
extremely beneficial for our Company.
Dividend
The Board is increasing the interim dividend, by 15% to 1.96 pence per
ordinary share (2000 - 1.70 pence per ordinary share) payable on 17 November
2001 to shareholders on the register at the close of business on 19 October
2001.
Operations
Fisher Offshore Services Limited, our joint venture company with Cammell Laird
(in receivership), made a loss in the period of £61,000. This company, in
which we have a 51% interest,owns the diving support ship Fisher Cavalier.
The ship is managed technically and commercially by Fisher. It was chartered
to Gulmar Offshore Asia Pte Ltd for operations in the Persian Gulf but was
withdrawn from that charter when outstanding hire became substantially
overdue. Since 30 June 2001 the vessel has been chartered at a satisfactory
rate to a Mexican company for operations in the Gulf of Mexico. The expected
revenue from this charter should put the full year's results of that company
in profit.
Our new cable ships, converted in Croatia, have been partially re-financed as
they have cost more and taken longer to complete than was anticipated. The
re-financing cost is reflected in a higher charter rate, which was a condition
of the original charter party entered into with itg International.
The RFA tanker Oakleaf continues on bareboat charter with the Ministry of
Defence, while the contract to manage the logistics depot at Sealand, near
Chester, has been extended for a further two years to October 2002. The
contract to manage the BNFL and PNTL fleet of ships also continues as it has
for many years. BNFL has acquired another ship which will be converted to
extend their nuclear transport services. When completed it will be added to
our management contract. Our relations with BNFL are excellent and no expense
is spared by BNFL in support of the highest safety standards for their fleet.
James Fisher (Underwater Engineering Services) Limited, our Aberdeen
engineering company, has had a good first half with its new premises providing
greatly improved facilities for supplying and servicing our oil/gas
exploration/production customers. Seafloor Dynamex, now managed and marketed
under Underwater Engineering Services, has had some success in this period,
principally in the North Sea. The system is now being marketed energetically
on a worldwide basis, which should open up greater opportunities.
Our involvement in AWSR Shipping Limited, which is building six purpose built
ro-ro vessels for a 20 year PFI contract with the Ministry of Defence, is at
this stage essentially financial. Detailed negotiations continue with the
Ministry of Defence, bankers, lessors and shipyards and it is hoped that a
contract with the Ministry of Defence will be finalised by the year-end. The
ro-ro ships are already under construction in Belfast and in Germany.
Our tanker fleet has produced better results due mainly to an increase in
rates and improved utilisation of the ships. Volume of tonnes carried was
down slightly due to the loss of part of a contract which we considered
uneconomic to continue, as it required only a part of a full ship occupancy.
Although port times have improved we should be able to do better and shall
continue to strive towards that end.
At the beginning of the year we had four dry cargo ships and at the end of
June we had three. The dry cargo vessels are still making losses and although
they produce a positive cash flow our aim is still to exit the market. The 36
year old New Generation, our heavy lift vessel, was sold to Eastern
Mediterranean buyers. This sale and the sale of the dry cargo vessel Solway
Fisher produced a loss of £18,000.
Our cable layer Nexus had a good first half. During this period, with no time
off, the vessel laid cable off Ecuador and loaded cable in Australia for a
cable lay from Cape Town to the Gabon. She is now on her way to Curacao for
refit before proceeding through the Panama Canal to North West USA.
Website
The company continues to extend its e-commerce capabilities by linking
operations between ourselves, our shareholders, customers and suppliers. This
is enabling us to be more responsive to their future needs in a constantly
changing environment.
Due to the nature of our business, our website was not intended as a trading
portal. However, the detailed overview of the company's operations it is able
to provide has attracted many new customers from all over the world.
The investor relations area of the website is undergoing a major remodelling
and it is hoped more informative and user friendly pages will be available in
the near future.
Staff
The last twelve months have seen the move of the Liverpool Office to Barrow,
the supervision of our new cable ships, the introduction of a diving support
ship, the expansion of Underwater Engineering Services, support for and
investment in AWSR Shipping Limited and the bidding for a number of major
contracts. Our executive team, together with all their colleagues have
responded to the task magnificently and my thanks go to all of them. Our
ships' crews in home waters and beyond, fly our flag safely and professionally
and my further thanks to them.
Prospects
We have had an excellent first half and with the second half starting well we
have good reason to be optimistic for the full year. The first of our new
cable ships, Oceanic Princess, is delivered and operating in the Far East.
The second, Oceanic Pearl, will be delivered next month, a few weeks later
than budgeted. This delay will not have a material effect on the year's
results. Our tanker contracts/charters are in place and, provided there is no
additional economic downturn in the manufacturing industry, should produce
satisfactory results.
The completion of our withdrawal from Newhaven ends our exposure to direct
port operations and is a significant landmark in our long term strategy.
We continue with vigour to investigate ship purchase opportunities and the
acquisition of additional marine-related companies. Our cash flow is sound
and debt profile comfortably in hand. Your company is operating well and in
good heart.
David B. Cobb, CBE
Executive Chairman
Group profit and loss account
Unaudited Unaudited Audited
Six months Six months Year ended
to 30June to 30 June 31 Dec
2001 2000 2000
Notes £000 £000 £000
Turnover: group and 34,276 30,208 61,261
share of joint venture
less share of joint (783) - (684)
venture turnover
Group turnover 2 33,493 30,208 60,577
Cost of sales (26,564) (24,666) (50,883)
Gross profit 6,929 5,542 9,694
Administrative
expenses:
Exceptional relocation - (60) (103)
costs
Others (1,617) (1,489) (3,036)
Operating profit
Continuing operations 5,404 4,021 6,684
Discontinued port (92) (28) (129)
operations
5,312 3,993 6,555
Share of operating (61) - 83
(loss)/profit in joint
venture
Continuing operations:
Loss on sale of ships (18) - (162)
Discontinued
operations:
Release of port 639 - -
closure provision
Profit on sale of 2,933 - -
fixed assets
Impairment of fixed (2,701) - -
asset investment
6,104 3,993 6,476
Net interest payable 3 (793) (712) (1,469)
Profit for the 5,311 3,281 5,007
financial period/year
Taxation 4 (178) (163) (506)
Profit on ordinary 5,133 3,118 4,501
activities after
taxation
Dividends
Non equity (2) (2) (4)
Equity (946) (821) (2,244)
(948) (823) (2,248)
Retained profit for 4,185 2,295 2,253
the period/year
Pence Pence Pence
Basic earnings per 6 10.75 6.47 9.34
share
Adjusted earnings per 6 9.39 6.65 11.05 *
share
Diluted earnings per 6 10.70 6.45 9.29
share
Ordinary dividends
paid or payable:
Interim 1.96 1.70 1.70
Final 2.95
* Restated for the effect of the discontinued operations.
There are no recognised gains or losses other than the profit for the
financial period/year.
Group balance sheet
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2001 2000 2000
£000 £000 £000
Fixed assets
Intangible assets 636 674 655
Tangible assets 128,626 89,689 117,066
Investments 1,693 - 107
130,955 90,363 117,828
Current assets
Stocks 931 862 854
Debtors 13,966 10,133 12,241
Cash at bank and in hand 4,442 7,006 4,525
Short term deposits 1,690 1,395 1,389
21,029 19,396 19,009
Creditors: amounts falling due
within one year
Trade and other (16,477) (12,063) (12,242)
Bank loans (9,760) (5,551) (6,949)
(26,237) (17,614) (19,191)
Net current (liabilities)/assets (5,208) 1,782 (182)
Total assets less current liabilities 125,747 92,145 117,646
Creditors: amounts falling due
after more than one year
Trade and other (64) (63) (37)
Bank loans (50,511) (19,978) (45,633)
(50,575) (20,041) (45,670)
Provisions for liabilities and charges (1,298) (2,373) (2,287)
Net assets 73,874 69,731 69,689
Capital and reserves
Equity - fully paid 12,068 12,068 12,068
Non equity - cumulative preference shares 100 100 100
Share premium account 23,050 23,050 23,050
Profit and loss account 38,656 34,513 34,471
Shareholders' funds 73,874 69,731 69,689
Group cash flow statement
Unaudited Six Unaudited Audited Year
months Six months ended
To 30 June To 30 June 31 Dec
2001 2000 2000
Notes £000 £000 £000
Net cash inflow from
operating activities 5(a) 11,025 7,986 13,070
Returns on investments 5(b) (1,428) (624) (1,985)
and servicing of finance
Taxation 5(c) 215 146 22
Capital expenditure and 5(d) (13,340) (1,900) (32,726)
financial investment
Acquisitions and 5(e) (2,519) - (1,491)
disposals
Equity dividends paid (1,424) (1,354) (2,176)
Cash (outflow)/inflow (7,471) 4,254 (25,286)
before management of
liquid resources and
financing
Management of liquid 5(f) (301) 17,683 17,689
resources
Financing 5(g) 7,689 (17,570) 9,483
(Decrease)/increase in 5(h) (83) 4,367 1,886
cash in the period
Reconciliation of net
cash flow to movement
in net debt
(Decrease)/increase in 5(h) (83) 4,367 1,886
cash in the period
Cash (inflow)/outflow 5(h) (7,689) 17,570 (9,483)
from
(increase)/decrease in
debt
Cash outflow/(inflow) 5(h) 301 (17,683) (17,689)
from
increase/(decrease) in
liquid resources
Movement in net debt in 5(h) (7,471) 4,254 (25,286)
the period
Net debt at the 5(h) (46,668) (21,382) (21,382)
beginning of period
Net debt at end of 5(h) (54,139) (17,128) (46,668)
period
Notes to the Interim Accounts
1 Interim accounts
The group's interim result consolidates the results of the company and its
subsidiary companies made up to 30 June.
The interim financial information has been prepared on the basis of the
accounting policies set out in the group's statutory accounts for the year
ended 31 December 2000. Expenses are accrued in accordance with the same
principles used in the preparation of the annual accounts.
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is based on the
statutory accounts for the financial year ended 31 December 2000. These
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
The interim report was approved by the board of directors on 10 September
2001.
2 Segmental analysis
Geographical area
Six Six Year
months to months ended
30 June to 30 31 Dec
2001 June 2000
2000
£000 % £000 % £000 %
United Kingdom 28,058 84 26,880 89 56,495 93
and the
Republic of
Ireland
Continental 4,082 12 3,317 11 4,070 7
Europe
North America 1,347 4 - - - -
Middle East - - 11 - - -
Rest of the 6 - - - 12 -
world
33,493 100 30,208 100 60,577 100
Turnover can be analysed as following activities all of which are continuing:
Six months to 30 Six months to Year ended
June 30 June 31 Dec
2001 2000 2000
£000 £000 £000
Turnover
Shipping operations 32,454 29,298 58,762
Engineering operations 1,039 910 1,815
33,493 30,208 60,577
Six months Six months Year ended
to 30 June to 30 June 31 Dec
2001 2000 2000
Profit on ordinary activities £000 £000 £000
before taxation
Continuing operations
Shipping operations:
Segment operating profit 5,319 3,999 6,561
Share of operating (loss)/profit (61) - 83
in joint venture
Sale of ships (18) - (162)
5,240 3,999 6,482
Engineering operations:
Segment operating profit 85 22 123
5,325 4,021 6,605
Discontinued operations
Port operations:
Segment operating loss (92) (28) (129)
Release of port closure provision 639 - -
Profit on sale of fixed assets 2,933 - -
Impairment of fixed asset (2,701) - -
investment
779 (28) (129)
6,104 3,993 6,476
Net interest payable (793) (712) (1,469)
5,311 3,281 5,007
3 Net interest payable
Net interest payable includes an amount of £58,000 (six months to 30 June
2000, £nil and twelve months to 31 December 2001, £25,000), in respect of the
joint venture.
4 Taxation
The charge for taxation on ordinary activities represents:
Six months Six months Year ended
to 30 June to 30 June 31 Dec
2001 2000 2000
£000 £000 £000
UK tonnage tax (16) (13) (30)
UK other corporation tax at 30% (203) (150) (17)
(2000 30%)
(219) (163) (47)
Irrecoverable ACT - - (127)
Adjustments in respect of prior
years
UK other corporation tax 41 - (332)
(178) (163) (506)
Tax relates to the following:
Parent and subsidiaries (166) (163) (504)
Joint venture (12) - (2)
(178) (163) (506)
5 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 to 30 June 31 Dec
2001 2000 2000
£000 £000 £000
Operating profit 5,251 3,993 6,638
Depreciation and refit amortisation 4,000 3,560 7,385
Amortisation of goodwill 19 19 38
Profit on disposal of tangible (40) (43) (136)
fixed assets
Increase in stocks (77) (153) (145)
(Increase)/decrease in debtors (360) 105 (1,209)
Increase in creditors 2,127 663 787
Increase/(decrease) in provisions 44 (158) (205)
Share of loss/(profit) from joint 61 - (83)
venture
Net cash inflow from operating 11,025 7,986 13,070
activities
(b) Returns on investments and servicing of finance
Interest received 254 535 765
Interest paid (1,680) (1,157) (2,746)
Preference dividend paid (2) (2) (4)
Net cash outflow (1,428) (624) (1,985)
(c) Taxation
Corporation tax paid (27) (6) (121)
Corporation tax received 242 152 143
Net cash inflow 215 146 22
(d) Capital expenditure and financial investment
Purchase of fixed asset investment (3,860) - -
Purchase of tangible fixed assets (12,434) (1,983) (33,390)
Sale of tangible fixed assets 2,954 83 664
Net cash outflow (13,340) (1,900) (32,726)
(e) Acquisitions and disposals
Loan to joint venture and
associated undertakings (2,269) - (862)
Purchase of interests in
associated undertaking - - (51)
Costs associated with discontinued
port operations (250) - (578)
Net cash outflow (2,519) - (1,491)
(f) Management of liquid resources
Short term investments (301) 17,683 17,689
(g) Financing
Six months to Six months to Year ended
30 June 2001 30 June 2000 31 Dec
2000
£000 £000 £000
New secured loan 11,027 - 30,034
Repayment of secured (3,338) (17,570) (20,551)
loans
Net cash outflow 7,689 (17,570) 9,483
(h) Reconciliation of net debt
1 January 2001 Cash flow 30 June 2001
£000 £000 £000
Cash in hand and at 4,525 (83) 4,442
bank
Debt due after 1 year (45,633) (4,878) (50,511)
Debt due within 1 year (6,949) (2,811) (9,760)
(52,582) (7,689) (60,271)
Short term deposits 1,389 301 1,690
Net debt (46,668) (7,471) (54,139)
6 Earnings per share
The calculation 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 2001 to 30 June 2000 31 Dec
2000
£000 £000 £000
Profit for the period/year 5,133 3,118 4,501
Preference dividend (2) (2) (4)
5,131 3,116 4,497
Weighted average number of shares
Number of Number of Number of
shares shares shares
For basic earnings per share 47,734,169 48,172,345 48,156,317
Exercise of share options 231,373 135,315 268,235
For diluted earnings per share 47,965,542 48,307,660 48,424,552
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 months to 30 Six months to 30 Year ended 31 Dec
June 2001 June 2000 000
£000 p £000 p £000 p
Basic earnings 5,131 10.75 3,116 6.47 4,497 9.34
per share
Exceptional - - 60 0.12 103 0.21
relocation costs
Loss on sale of 18 0.04 - - 162 0.34
ships
Discontinued (779) (1.63) 28 0.06 129 0.27
port operations
Tax effect of 153 0.32 - - (31) (0.06)
above
Irrecoverable ACT - - - - 127 0.26
Prior year (41) (0.09) - - 332 0.69
element of tax
charge
(649) (1.36) 88 0.18 822 1.71
Adjusted 4,482 9.39 *3,204 *6.65 *5,319 *11.05
earnings per
share
* Restated for the effect of the discontinued operations.
7 Reconciliation of movements in group shareholders funds
30 June 2001 30 June 2000 Audited
£000 £000 31 Dec 2000
£000
Profit for the financial year 5,133 3,118 4,501
Dividends paid and proposed
equity and non-equity shares (948) (823) (2,248)
Net addition to shareholders' 4,185 2,295 2,253
funds
Opening shareholders' funds 69,689 67,436 67,436
Closing shareholders' funds 73,874 69,731 69,689
8 Interim dividend
A dividend for the six months to 30 June 2001 on the preference shares was
declared on 30 June 2001. The interim dividend of 1.96p (2000 1.70p net) per
25p ordinary share is payable on 17 November 2001 to those shareholders
registered in the books of the company at the close of business on 19 October
2001.
9 Interim report
The interim report is to be sent to all shareholders on Wednesday 19
September 2001, posted first class. Copies of the interim report will also be
available from our registered office at: Fisher House, PO Box 4,
Barrow-in-Furness, Cumbria, LA14 1HR.
INDEPENDENT REVIEW REPORT TO
JAMES FISHER AND SONS PUBLIC LIMITED COMPANY
Introduction
We have been instructed by the company to review the financial information
for the six months ended 30 June 2001 which comprises the group's Profit and
Loss Account, Balance Sheet and Cash Flow Statement and the related notes 1
to 8. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the
Listing Rules of the Financial Services Authority which require that the
accounting policies and presentation applied to the interim figures should be
consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of group management and applying analytical procedures to
the financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on
the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 June 2001.
Ernst & Young LLP
Liverpool
11 September 2001
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