TIDMFSJ

RNS Number : 3244E

Fisher (James) & Sons plc

10 March 2022

10 March 2022

James Fisher and Sons plc

Full year results for the year ended 31 December 2021

James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'), the leading marine service provider, announces its results for the year ended 31 December 2021.

 
 GBPm unless otherwise stated                      2021      2020   % change 
 Revenue                                          494.1     518.2      (4.7) 
 
 Underlying operating profit margin                5.7%      7.8%   (210bps) 
 Return on capital employed                        3.6%      6.7%   (310bps) 
 
 Underlying operating profit *                     28.0      40.5     (30.9) 
 Underlying profit before tax *                    19.7      31.5     (37.5) 
 Underlying diluted earnings per share (p) **      20.0      47.9     (58.2) 
 
 Statutory operating loss                        (20.7)    (43.5)       52.4 
 Statutory loss before tax                       (29.0)    (52.5)       44.8 
 Statutory diluted loss per share (p)            (55.2)   (114.2)       51.7 
 
 Dividend per share (p)                               -      8.0p 
 

* excludes separately disclosed items of GBP48.7m loss (2020: GBP84.0m loss)

** excludes separately disclosed items of GBP37.8m loss (2020: GBP81.6m loss)

Performance summary:

-- Challenging year, with revenue 4.7% lower at GBP494.1m and underlying operating profit 30.9% lower at GBP28.0m. Loss before tax was GBP29.0m (2020: GBP52.5m)

-- Disruption to the business from the ongoing global pandemic, markets not recovering at expected rates, and an underestimation of the headwinds faced by some of the businesses

   --      UK lockdown affected H1; project delays and provisions further affected H2 

-- Further provisions required against asset carrying values due to prolonged impact of reduced profitability

   --      Good strategic progress, creating the foundations for sustainable profitable growth: 

o Significant contract wins in EDS (> GBP40m over the next 15 years) further validate our renewables value proposition

   o   Sale of the Paladin dive support vessel and two businesses generated cash proceeds of c.GBP20m 
   o   Swordfish dive support vessel on hire for 2022 

-- Good access to banking facilities, with GBP287.5m in total and GBP200m through to at least 2024

Commenting on the results, Chief Executive Officer, Eoghan O'Lionaird, said:

" 2021 was a challenging and disappointing year for the Group. We experienced ongoing disruption from the global pandemic, our markets did not recover at expected rates, and we underestimated the headwinds faced by some of our businesses.

In June 2021, we outlined a roadmap to achieve our objective of greater than 10% operating profit margin and greater than 15% return on capital employed. This roadmap is based on three phases: "Reset, Reinforce and Realise". Throughout the year we continued to execute the Reset and Reinforce phases to create the foundations for sustainable profitable growth.

Having sold Paladin and two of our businesses, during 2022 we will continue to optimise our portfolio to focus on businesses where we have a competitive advantage, strong growth prospects and attractive returns. The internal change agenda will continue at pace. We are executing several self-help initiatives, focusing on operational and commercial excellence, including a LEAN programme, to improve the underlying performance of the Group.

Performance in January and February 2022 was in line with management's expectations. The full year outcome will be influenced by ship-to-ship transfer business performance; JFD securing new project wins from its pipeline; the strength of our subsea business during the busy mid-year period, our ability to manage inflationary pressures on the cost base; and the uncertainty arising from the current geopolitical environment.

The Board remains confident in the Group's strategy to deliver sustainable profitable growth from the significant market opportunities that are available to it and remains committed to executing on its long-term strategy."

For further information:

 
                                          Chief Executive 
                                           Officer 
 James Fisher and    Eoghan O'Lionaird     Chief Financial 
  Sons plc            Duncan Kennedy       Officer            020 7614 9508 
                     Richard Mountain 
 FTI Consulting       Susanne Yule                            0203 727 1340 
                    ---------------------------------------  -------------- 
 

Notes:

1. James Fisher uses alternative performance measures (APMs) as key financial indicators to assess the underlying performance of the business. APMs are used by management as they are considered to better reflect business performance and provide useful additional information. APMs include underlying operating profit, underlying profit before tax, underlying diluted earnings per share, underlying return on capital employed and cash conversion. An explanation of APMs is set out in note 2 in the full year results.

2. Cautionary statement: This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this announcement and James Fisher and Sons plc undertakes no obligation to update these forward-looking statements. Nothing in this statement should be construed as a profit forecast.

Chairman's review

Introduction

I joined James Fisher on 1 May 2021, with the Company amid some major strategic and operational challenges. As with many businesses, Covid-19 has been very disruptive from an operational perspective, and we owe a debt of gratitude to our employees for their commitment to minimising the impact on our customers by continuing to deliver our critical services throughout the pandemic.

2021 Performance

2021 was a disappointing year. Revenue declined by 4.7% to GBP494.1m (2020: GBP518.2m) driven by the Marine Support division being GBP34.9m (14.0%) behind 2020. Within Marine Support, the Fendercare ship-to-ship transfer revenues were some 36% behind a record year in 2020. Underlying operating profit fell by 30.9% to GBP28.0m (2020: GBP40.5m) with the profitability of our Fendercare, JFD and Tankships businesses being particularly challenged. As a result of those performance challenges, combined with a high level of financial leverage, the Company did not pay an interim dividend for 2021 and the Board is not recommending the payment of a final dividend for the year. The Board recognises the importance of paying dividends and is committed to reinstating the dividend when appropriate.

There is no doubt that the performance of James Fisher has been impacted by Covid-19 over the past couple of years, but this is not the sole reason for the Company's recent poor performance.

The Company has in the past made a number of acquisitions which have enhanced earnings per share in the short term, but which have contributed to an increase in debt levels and a long-term decline in return on capital employed. Poor performance in a number of these acquired businesses, combined with weakness in trading in our traditional Tankships, Fendercare and JFD businesses, led to a disappointing financial performance in 2021 and a high level of debt. Our over-riding short term priorities are; firstly to reduce our debt and optimise our portfolio through a series of disposals; and secondly to focus on improving our operational and financial performance.

In 2021 we sold the Paladin dive support vessel and the Materials Testing and NDT businesses. Looking forward, we have reviewed our portfolio with a view to executing further disposals to both reduce debt and to optimise the portfolio and simplify the Group by refocusing on markets where James Fisher can deliver sustained, differentiated value to our customers.

In terms of performance improvement, we have begun an operational excellence pilot program which will see Lean methodologies being rolled out across the Group, with the objective of improving product and service quality, customer service and cost efficiency. We will soon embark on a Group-wide commercial excellence programme, aimed at improving our capability in sales effectiveness, creating customer value and commercial contracting. During the year, we also undertook another Group-wide employee engagement survey, the first to be externally-supported, and this has highlighted several areas that we can address to improve employee engagement.

Our CEO, Eoghan O'Lionaird, has expanded the Executive Committee by including the divisional managing directors, thereby increasing the focus on operational management. This, in turn, will bring the Group functions closer to the operations and will unlock synergies through operating more effectively as an integrated leadership team.

We are putting these foundations in place to turnaround and improve Group performance. However, it will take time for the changes to take effect and, like any turnaround, to bear fruit. Nonetheless the Board is pleased that these challenges are being tackled head on with the objective of creating a platform from which we can sustainably grow the business in the future.

Future direction

With a backdrop of ever-increasing focus on climate change, and the acceleration of an energy transition to a low carbon economy, the oil and gas services industry is likely to decline over the long-term. However, it will take time for the required global low carbon energy infrastructure to be developed. Over that period of development, the energy transition requires the continued provision of environmentally responsible products and services that support our existing oil and gas customers. As the pace of the energy transition towards sustainable energy sources accelerates, we are equally focused on accelerating our own transition, as new opportunities emerge for our well-established and fast-developing services supporting the growth of renewable energy. We see those opportunities most notably in offshore wind and the responsible decommissioning of redundant oil and gas assets. We are well-positioned in these fast-emerging sectors, where the Group can combine its traditional oil and gas-oriented subsea capabilities with newer, renewable-energy specific solutions, such as the installation, monitoring and management of high voltage cabling in offshore wind, and the provision of bubble curtains that protect sea life from the noise impact of pile driving during the construction of the wind farms. The key strategic challenge for the Company over the next decade is in defining the optimal approach to address the energy transition, capitalising on the many opportunities that are available in renewables whilst enabling our customers to make their own transitions in a financially and environmentally responsible manner. It is a challenge on which our management team is keenly focused and will continue to define with more precision as the shape of the energy transition becomes clearer.

Board changes

I am very grateful to my predecessor, Malcolm Paul, for all that he did for James Fisher after being appointed to the Board in 2011. After becoming Chairman in 2018, Malcolm played a key role in supporting Eoghan O'Lionaird following his appointment as Chief Executive in 2019. In addition, Stuart Kilpatrick stepped down from the Board early in the year. Stuart, the Group Finance Director since 2010, played an important role in the development of James Fisher over the last decade. On behalf of the Board, I would like to thank Malcolm and Stuart for their contributions, and to wish them every success for the future.

Duncan Kennedy joined the Board as Chief Financial Officer on 4 May 2021. Duncan brings considerable international and listed company experience to the Company, and will play a key role in strengthening the performance culture across the Group.

I was also pleased to welcome two new Non-Executive Directors to the Board. Kash Pandya was appointed to the Board on 1 November 2021 and brings a wealth of international experience as a FTSE 250 Chief Executive, having operated in many of the same geographies and sectors as James Fisher.

Claire Hawkings, who was appointed to the Board on 1 January 2022, brings extensive international oil and gas experience, as well as expertise in sustainability, health and safety and the challenges of the energy transition.

Mike Salter will step down as a non-Executive Director at the AGM in May 2022 after serving nine years on the Board. He has made a considerable contribution to James Fisher, and his experience of the marine and oil and gas services industries will be much missed.

I am very grateful to the Board for its support and their commitment in dealing with the challenges faced during what was a difficult year.

Employees

I would like to finish this statement where I started, by again expressing my gratitude, on behalf of the Board, to the employees of James Fisher for all they have done in dealing with the challenges of the past year, including those resulting from the Covid-19 pandemic. Working for a Group that delivers critical solutions to customers' complex problems in harsh environments is always challenging, and I have huge respect for how our employees go about this in their day-to-day jobs.

Conclusion

The last two years have been among the most challenging that the Company has experienced in its 175-year history. The Board is committed to delivering a successful turnaround of the James Fisher Group and believes that the steps it is taking strategically, operationally, and financially are in the best long-term interests of all stakeholders. In taking these steps we will continue to live by our purpose and values. I look forward to being able to report on our progress over the coming years and to returning the Group to sustainable profitable growth.

Chief Executive's review

It has been, without question, a most disappointing and difficult year. The challenges we have faced during 2021 have been both unprecedented in magnitude and unpredictable in nature. We underestimated the headwinds faced by some of our businesses, employees and management teams, who have been profoundly tested by ongoing restrictions on travel; uncertainty in investment decisions; disruption to supply chains; inflationary pressures; competition for skilled resources; and a fundamental shift in working practices.

With that as the backdrop, the Group's revenue, at GBP494.1m, was 4.7% below 2020. Underlying operating profit of GBP28.0m was 30.9% below the GBP40.5m achieved in 2020. The Group recorded a loss before tax of GBP29.0m compared to a loss before tax of GBP52.5m.

The Group has borne through very difficult circumstances largely thanks to the extraordinary efforts of our people. The headwinds we faced have served to further strengthen our resolve and commitment to focusing our business portfolio on markets where we have a highly differentiated value proposition and can achieve sustainable, profitable growth.

We are confident that the efforts of governments worldwide will gradually enable businesses and their supply chains to serve their customers in a more normalised way, leading to a recovery in our core markets. Following two supremely challenging years, we are focusing our efforts in areas that we can directly influence and control in order to place the Group on a firm footing for 2022 and beyond.

At our capital markets day in June 2021 we outlined a roadmap to achieve this based on three phases: "Reset, Reinforce and Realise". Throughout the year we have continued to execute the Reset and Reinforce phases to create the foundations for sustainable profitable growth.

Health and Safety

Our overarching goal remains to maintain the health and safety of our employees, contractors, suppliers and customers at all times. The nature of our operations means that we frequently face hazards and harsh environments for which we are well prepared, trained and equipped. The work that we have done in coordinating health and safety statistics, incident information and best practice is beginning to yield results in reducing the number of incidents, and, crucially, in promoting further strengthening of our safety culture.

However, the most significant challenge to our goal remains the more human aspects of complacency, routine, familiarity and distraction. These are inherently more difficult to address, requiring active participation and personal engagement to assess and act on potential threats to individuals and those around them. In response we have launched a Group-wide awareness campaign with the aim of bringing health and safety to the forefront of employees' minds and making it relatable to their specific job role and work environment, whilst equipping people with the ability to identify hazards and empowering them to voice concerns and to take the appropriate action regardless of seniority.

These measures, in addition to enhanced training of existing employees and as part of the on-boarding process for new hires, will further reinforce our commitment to health and safety and will strengthen its foundation in our culture.

Short term initiatives:

Portfolio Management

During the year we completed the disposal of two businesses: a materials testing business in the UK and Ireland and a non-destructive testing business predominantly serving the aerospace and process industries. Both were very sound businesses, but they were neither connected to the key markets we are pursuing, nor did they add to the wider Group as a source of competitive advantage.

We value all our businesses including those we divest, and it is important to us that we consider all stakeholders in making decisions, including in finding the right future owner for those that leave the Group so that they can continue their journeys and flourish. In both cases I believe we have achieved the best possible outcome and I would like to thank the employees of these businesses for their contribution and wish both them and their new owners every success for the future.

In June we concluded the sale of the dive support vessel (DSV) Subtech Paladin to its new owners, Indian offshore service provider Seamec, marking the first step in the return to a more asset light strategy, focusing on the delivery of high-end niche services. This strategy makes extensive use of partnerships to facilitate preferential access to vessels on an as-needed basis. Since this approach was adopted, we have successfully completed several complex subsea projects in the West Africa region as a customer of the Paladin's new owner. We continue to explore similar opportunities, including the potential for a sale and leaseback option for the DSV Subtech Swordfish, which was also acquired in 2019. We have secured a framework agreement with an important tier 1 contractor that will see the vessel utilised on a long-term basis in the Middle East region.

As 2022 progresses, we will continue to critically evaluate the portfolio against our tests of strategic fit and business attractiveness (which we define as offering a combination of competitive advantage, growing markets, and attractive financial returns). Further divestments are likely, with the aim of reducing net debt, simplifying the Group's portfolio, and allowing us to allocate capital to strong growth prospects, such as decommissioning and renewable energy.

Operational and Commercial Excellence

During 2021 a number of initiatives have been commenced with specific focus on improving the underlying performance of the Group:

-- An Operational Excellence programme to drive improvement in capacity, delivery performance and customer satisfaction through the implementation of LEAN principles.

-- Investment in upskilling our project delivery and commercial resources to ensure that progress and project budgets are effectively controlled, and that delivery, margins and customer satisfaction are improved.

-- Continuous improvement in our risk management, contracting principles and internal controls frameworks to provide robust governance and mitigate margin erosion.

-- A Commercial Excellence programme focused on identifying and capturing value in our key markets including cross-Group co-ordination of sales resources to address specific market opportunities where the Group can capture additional value.

-- Implementation of best practice tools and methodologies to drive sales and commercial effectiveness.

-- Adoption of customer engagement metrics to inform and improve satisfaction scores, as well as retention and referral rates.

Longer Term Focus

Our three markets of choice are energy, marine and defence. These markets offer strong growth potential and we are making progress in developing differentiated niche propositions that are highly valued and rewarded by our customers.

The 'energy transition' is creating new growth prospects for our businesses. As a Group, we are well positioned to take advantage of the opportunities that will arise in a more responsible oil and gas sector and the expected transition away from oil and gas into renewable and other energy supplies. Within oil and gas, we see continued and new opportunities for our services in the production, transportation and decommissioning sectors. The global need for decommissioning of old and abandoned oil and gas assets is significant and we believe that our solutions in high-speed cutting, lifting and well-abandonment are well placed to serve this growing demand under our newly formed James Fisher Decommissioning brand.

There is unquestionably an accelerated global investment in offshore wind powered energy production, a key solution to the world's challenge to decarbonise against a backdrop of ever-growing demand for energy. James Fisher has a growing presence in the offshore wind market and the long-term expectation is that this will ultimately compensate for any reduction in demand for our oil and gas-related products and services over the coming decades. Whilst activity levels during 2021 were more subdued than anticipated, there is increased visibility of future requirements and confirmation of projects for delivery in 2022 and beyond. We have consolidated our market offering under the James Fisher Renewables brand, which for the first time brings all the relevant operating companies and services under one go-to-market brand.

Demand in the marine sector softened considerably in 2021 due to reduced economic activity. However, we anticipate that the general increase in investment in offshore infrastructure, recovery of commodity prices post-pandemic, and a return to a more normal pattern of global trade should underpin a steady increase in demand and completion of projects that were deferred or delayed due to Covid-19.

In the defence sector, the Group holds leading positions in submarine rescue, and life support and diving equipment. Our innovative solutions for defence customers frequently address challenges in the commercial subsea sector, particularly in terms of safety and reliability in extremely hazardous environments. We continue to supply our commercial diving equipment in over 40 countries globally. The business has a number of active product innovation opportunities aimed at maintaining our leading position and the pipeline for subsea vessel construction projects is strong.

Sustainability

We recognise the environment as one of our key stakeholders, but also consider sustainability to encompass financial security, robust governance and workforce stability. In 2021, the year of COP26, we have developed with the support of external experts an ambitious and considered sustainability strategy with science-based targets, which will be included in the 2021 Annual Report and Accounts. Work is ongoing in 2022 to build on these foundations.

We firmly believe that by investing in local communities, working closely with our customers and suppliers, and having a strong employee strategy, our shareholders will also benefit. In this way we are creating an intrinsically sustainable company.

A special thanks to our people

At the onset of the Covid-19 pandemic, like many other businesses, the Group needed to prioritise employee health and safety, and to adapt to a remote working environment. The hybrid working model that evolved during that time is proving itself to be less transitory than perhaps some had assumed. We see this working model as a step towards creating a more sustainable work/life balance, as well as yielding benefits for our other stakeholders. That said, we also recognise that this new working model has, at times, created its own stresses and to address this, we very quickly stepped up our mental health support and employee engagement programme and this has continued to develop in 2021. We know that we have work to do to fulfil our ambitions in this critical area and are grateful for the feedback received from our employees during 2021's employee engagement survey, in response to which action plans across the Group are being implemented during 2022.

Rather than being discouraged by the challenges of the pandemic and remote working, our extraordinary people have been emboldened by them. They have doubled down in understanding and meeting our customers' needs. They have given up their time to offer assistance in our communities, bring food to the needy and help the unwell. I am immensely proud of our people. It is in times of adversity that our true values are evident, and throughout this past year, James Fisher's people have time and again demonstrated their pioneering spirit, integrity, energy and resilience and they continue to do so in support of those affected by the war in Ukraine. Although the path has been difficult it is to the great credit of our people that we have advanced so far on our journey to becoming a purpose-led, values-driven business serving all our stakeholders. I cannot thank them enough.

Looking Ahead

2021 was a challenging and disappointing year for the Group. We experienced ongoing disruption from the global pandemic, our markets did not recover at expected rates, and we underestimated the headwinds being faced by some of our businesses.

In June 2021, we outlined a roadmap to achieve our objective of greater than 10% operating profit margin and greater than 15% return on capital employed. This roadmap is based on three phases: "Reset, Reinforce and Realise". Throughout the year we continued to execute the Reset and Reinforce phases to create the foundations for sustainable profitable growth.

Having sold Paladin and two of our businesses, during 2022 we will continue to optimise our portfolio to focus on businesses where we have a competitive advantage, strong growth prospects and attractive returns. The internal change agenda will continue at pace. We are executing a number of self-help initiatives, focusing on operational and commercial excellence, including a LEAN programme, to improve the underlying performance of the Group.

Performance in January and February 2022 was in line with management's expectations. The full year outcome will be influenced by ship-to-ship transfer business performance; JFD securing new project wins from its pipeline; the strength of our subsea business during the busy mid-year period, our ability to manage inflationary pressures on the cost base; and the uncertainty arising from the current geopolitical environment.

In 2022 we celebrate 175 years since James Fisher founded the company in Barrow-in-Furness. In the intervening years, largely thanks to the pioneering spirit, integrity, energy and resilience of its employees, the Company has continually adapted to overcome some of the most challenging events the world has ever known, and I have no doubt that we will do so again to deliver sustainable, profitable growth for our investors and value creation for all our stakeholders.

The Board remains confident in the Group's strategy to deliver sustainable profitable growth from the significant market opportunities that are available to it and remains committed to executing on its long-term strategy.

Operating Review

Marine Support

 
                                                         Change 
                                         2021     2020        % 
 Revenue (GBPm)                         214.5    249.4   (14.0) 
 Underlying operating profit (GBPm)       5.0     10.1   (50.5) 
 Operating loss (GBPm)                 (21.0)   (69.5)     69.8 
 

The Marine Support division consists of three businesses, all aimed at supporting the marine and energy markets. Marine Contracting principally provides subsea services to both the oil & gas and offshore wind markets; Fendercare provides essential ship-to-ship transfer services and related products; and Digital and Data Services provides innovative technological solutions aimed at improving the efficiency and productivity of our customers' offshore assets. The division saw a significant decline in both revenue and underlying operating profit in 2021, although there was a reduced level of separately disclosed items, with non-cash provisions of GBP26.0m against goodwill, doubtful receivables and tangible assets recognised in the year.

Marine Contracting

The business showed positive progress during 2021. Revenue increased by 4.0% to GBP113.3m and after a particularly challenging year in 2020, operating losses were significantly reduced. As part of our strategy to reduce the asset-intensity of this business and to focus more on partnering and the provision of differentiated services, the business sold one of its dive support vessels in June and the other is now on long-term hire for the majority of 2022.

EDS, the high voltage cabling specialist providing services to the offshore wind industry, continued its positive momentum with three new multi-year contracts to maintain offshore windfarm electrical infrastructure over periods of 13 to 15 years. The contracts are worth more than GBP40m over the period, which includes "availability" bonuses of around GBP8m for ensuring a pre-agreed level of uptime that could be earned and recognised in future periods.

In Mozambique, the major LNG project remains suspended due to the ongoing security issues in the region. The Group settled all outstanding claims against its customer prior to the end of 2021 and is ready to support the remobilisation of the project in due course.

The order book for 2022 is strong, with several projects deferred from 2021 expected to commence in the first half of the year and a good level of identified tendering targets.

Fendercare

Following a record year in 2020, the Fendercare business experienced a significant decline in 2021. Not only was the comparative year of 2020 boosted by crude oil trading on the back of the significant volatility in the oil price in 2020, but the business was also challenged in 2021 by unfavourable market developments in Malaysia and Brazil. Revenue from the Fendercare group was GBP77.9m, some 32% below 2020. Within this, the ship-to-ship revenues were down 36%.

The business is responding to the challenges by focusing on securing new sites to conduct STS operations in Malaysia, and has been successful in securing new contracts in Brazil. Although a return to the record highs seen in 2020 is not expected (absent significant volatility in the oil price) the business is expected to show some growth in 2022. A steady increase in the number of enquiries for LNG STS operations provides some encouragement for the future.

The sale of related products such as fenders also declined in 2021 as customers sought to defer capital expenditure. An inventory provision of GBP2.7m has been recognised in the period, reflecting a prolonged reduction in expectations for product sales as a direct result of the pandemic.

Digital and Data Services ("DDS")

DDS is a collection of businesses aimed at providing technology solutions to the oil and gas and renewable energy markets. Revenue in 2021 fell by 9% to GBP23.3m, principally due to Strainstall, the provider of load and asset monitoring solutions, which experienced difficult market conditions with the downturn in construction activity reducing demand for its products. Other businesses, such as AIS, which has developed and sells Digital Twin software, providing operators with an online, real-time asset management solution aimed at reducing their operating costs by allowing asset condition to be monitored from anywhere in the world rather than on site, showed good growth, with new contract wins servicing offshore oil BP and Chevron in particular.

Specialist Technical

 
                                                       Change 
                                        2021    2020        % 
 Revenue (GBPm)                        133.2   130.4      2.1 
 Underlying operating profit (GBPm)      9.9    14.0   (29.3) 
 Operating profit (GBPm)                 7.0    12.4   (43.5) 
 

Specialist Technical saw modest revenue growth of 2.1%, but a reduction in underlying operating profit of GBP4.1m, adversely affected by the write-off of GBP2.5m in relation to customer claims previously recognised but ultimately not agreed. Separately disclosed items of GBP2.9m recognised in the year included the impairment of tangible and intangible assets within the JFD business.

JFD experienced a mixed year. Work continued on its significant long-term projects, with three submarine rescue vessels (SRVs) and a 500m saturation diving spread all progressing well towards final milestones. One of the SRVs was delivered to its Korean customer in December and only relatively minor work is required in 2022 to complete all other projects, triggering final payment milestones. The business is looking to secure new projects during 2022, with a strong sales pipeline, although with no new orders in hand, the projects side of the business is at a cyclical low point. Demand for diving equipment was subdued during 2021 as many customers had fewer divers in the water, largely due to Covid-19 restrictions, and deferred spend on new equipment.

The Group's nuclear decommissioning business, JFN, showed some positive momentum during the first half of the year, but results for the full year were ultimately held back by the decision of a major customer to defer to 2022 new project awards expected in H2 2021. The level of tendering activity early in 2022 is encouraging, with new contracts for engineering design work already won early in the year.

Offshore Oil

 
                                                       Change 
                                        2021   2020         % 
 Revenue (GBPm)                         86.3   78.0      10.6 
 Underlying operating profit (GBPm)     11.1   11.2     (0.9) 
 Operating profit (GBPm)               (5.2)    8.4   (161.9) 
 

Offshore Oil achieved strong revenue growth of 10.6% during the year, driven by increased demand for its bubble curtain solutions and well-testing services. This traditional oil and gas service business has seen significant success in repositioning itself into new markets, such as the supply of bubble curtain solutions to offshore wind construction projects which protect subsea wildlife from the noise of piling, as well as an earlier stage opportunity in aquaculture which is showing promising signs of future demand. Bubble curtain revenues increased from GBP3.9m in 2020 to GBP7.4m in 2021.

James Fisher Offshore, which offers decommissioning services to the oil and gas industry experienced a somewhat frustrating year, with projects delayed at short notice during the second half of the year and the impact of a bad debt provision against amounts receivable from a financially distressed customer holding back profitability. Despite the project delays in Q4 2021, demand for decommissioning services continues to increase, with 13% growth in revenue to GBP8.0m in 2021 (2020: GBP7.1m).

RMSpumptools (RMS) saw strong demand for its market-leading artificial lift products, which both prolong the useful life of oil wells and prevent the unwanted escape of methane gas during production. As the oil industry increasingly focuses on minimising its environmental impact, we believe that demand for RMS products will continue to increase.

Separately disclosed items of GBP16.3m have been recognised in relation to goodwill impairment (GBP13.9m) and receivables (GBP2.4m). The impairment in respect of receivables relates to a specific counterparty risk and receivables billed over 12 months ago in relation to certain projects.

Tankships

 
                                                     Change 
                                       2021   2020        % 
 Revenue (GBPm)                        60.1   60.4    (0.5) 
 Underlying operating profit (GBPm)     4.8    8.0   (40.0) 
 Operating profit (GBPm)                1.3    8.0   (83.8) 
 

Revenue for the year was broadly in line with 2020, however profitability was adversely affected by a combination of the UK lockdown in Q1 2020, increased operating costs due to enhanced Covid-19 safety protocols and quarantine requirements, and a short-term dip in utilisation during September. Utilisation rates across the fleet increased over the course of the year from an average of 86% in Q1 to 95% in Q4. The business's exposure to the shorter-term spot-rate charters has increased slightly in the year to c. 23% (2020: c. 21%) as a result of contracts that have not been renewed. During the first two months of 2022, utilisation rates were strong and spot charter rates are showing good signs of recovery.

Impairment charges of GBP3.5m have been recognised in the year, reflecting a reassessment of residual values of older vessels that are reaching end of life. The two newly-commissioned dual-fuel (marine gasoil and LNG) vessels are well into the construction phase and are due for delivery late in 2022, replacing two vessels that are approaching the end of their useful operational lives.

Cattedown Wharves, which serves the South-West of England, performed well in the year, notwithstanding the lockdown in Q1 2021. Volumes of cargo transported through the port have now largely recovered to pre-pandemic levels.

Financial Review

2021 was another challenging year for the Group. The global pandemic continued to adversely affect trading conditions, resulting in both revenue and underlying operating profit being below 2020. Despite the reduction in performance, our businesses have remained resilient throughout, which is testament to the hard work and dedication of all employees.

Underlying performance in 2021

Revenue was 4.7% below 2020 at GBP494.1m (2020: GBP518.2m). It was a mixed performance across the divisions, with Specialist Technical and Offshore Oil showing growth, Tankships being in line and Marine Support behind 2020. Within Marine Support, the ship-to-ship ("STS") transfer revenues in the Fendercare business showed a significant decline due to 2020 being a record year, compounded by market challenges in Malaysia and Brazil.

Gross margin was down by 220 bps to 24.4% compared to 26.6% in 2020. Contributing factors include the reduction in higher margin STS revenues and a provision against slow-moving inventory reflecting reduced demand for Fendercare's related fender products, together with increased operating costs as a result of enhanced COVID safety protocols across the world, particularly in our offshore project-based businesses and Tankships division which both rely on mobilising significant numbers of people over the course of a year.

Admin expenses were 4.3% below 2020 at GBP94.5m, as the Group continued to keep tight control over its operating expenses following cost reductions achieved in 2020. No general pay increase was awarded to employees in 2021, which is something that the Board has sought to rectify in 2022, with an average pay increase of 3% being awarded in January against a backdrop of increasing inflation and competition for talent.

Foreign exchange provided a modest headwind in the year, with an average GBGBP:US$ rate of GBP1:$1.37 compared to GBP1:$1.29 in 2020. This adversely affected revenue by 2.1% and underlying operating profit by 4.5% respectively.

Underlying operating profit fell from GBP40.5m in 2020 to GBP28.0m in 2021.

Separately disclosed items

Principally as a result of a second year of reduced profitability and the ongoing impacts from the pandemic, the Group has recognised a net charge in relation to separately disclosed items of GBP48.7m, reduced from GBP84.0m in 2020.

In 2021, non-cash goodwill and intangible asset impairments of GBP29.2m (2020: GBP19.4m) have been recognised principally in relation to the Marine Support and Offshore Oil divisions, as future growth expectations have been tempered by the ongoing effects of the pandemic. Impairment provisions have also been made against tangible fixed assets, principally vessels, of GBP9.3m (2020: GBP34.0m including GBP31.6m in relation to two dive support vessels). The carrying value of these assets prior to impairment exceeded both the value in use and likely recoverable amount.

Bad debt impairments of GBP4.3m have been made in respect of receivables relating to a specific counterparty risk and receivables billed over 12 months ago in relation certain projects (2020: GBP19.3m provision against three specific projects). All balances, including those provided for in 2020, continue to be pursued, with a number of ongoing legal actions to support recovery. The Group reassessed the methodology applied to expected credit losses and now requires all debt over 180 days overdue to be provided for unless there is compelling evidence to support future collection.

Costs of material litigation of GBP3.1m (2020: nil) have been incurred in relation to a number of resolved and ongoing disputes.

The Group sold the Paladin dive support vessel and two businesses during the year. These sales generated net proceeds of GBP20.8m. After deducting the carrying values of the related assets, liabilities and goodwill, the Group recognised a net profit of GBP0.6m in relation to the disposals.

The net cash outflow in relation to other separately disclosed items was GBP1.7m (2020: GBP3.3m).

Statutory operating loss

The Group's operating loss, which is the sum of underlying operating profit and separately disclosed items, reduced to GBP20.7m (2020: GBP43.5m) as a result of lower separately disclosed items partially offset by the reduction in underlying operating profit.

Finance charges

The Group's net finance charges reduced by GBP0.7m to GBP8.3m (2020: GBP9.0m). Bank interest reduced from GBP7.0m to GBP6.0m during the year as a result of lower borrowings. Non-cash pension and lease liability charges are broadly in line with 2020 at GBP2.3m (2020: GBP2.0m). The Group's interest cover ratio, which is calculated by dividing underlying operating profit by net finance charges (excluding IFRS16 finance charges) is 5.4 times (2020: 6.1 times), which compares to banking covenants that require the ratio to be greater than 3.0 times.

Taxation

The Group has recognised an overall net tax credit of GBP0.8m in the year (2020: net charge of GBP4.8m). The underlying tax charge for the year is GBP10.1m (2020: GBP7.2m) representing an underlying effective tax rate of 51.2% (2020: 22.8%). Compared to the UK Corporation Tax rate of 19%, the following principal factors have had an adverse impact in 2021:

   -       Losses incurred during 2021 but not provided for as a deferred tax asset (+13pps) 
   -       Higher effective tax rate in overseas jurisdictions (+11pps) 

- Retranslation of the Group's net deferred tax liability to 25% from 19%, reflecting the forthcoming UK Corporation Tax increase (+7pps)

Tax on separately disclosed items is a net credit of GBP10.9m, relating principally to the recognition of a deferred tax asset in the UK on certain fixed assets that were impaired in 2020. This follows a review of the likely future profitability of the UK group and likely duration of the ongoing business associated with those fixed assets. Corporation Tax payments during the year were in line with 2020 at GBP7.9m.

Dividend and EPS

Having regard to the financial position of the Group, the Board has recommended no dividends during 2021 (2020: interim dividend GBP4.0m; no final dividend). The Board remains committed to reintroducing a sustainable dividend policy at the right time. Basic and diluted earnings per share are a loss of 55.2p, compared to a loss of 114.2p in 2020.

Cashflow and borrowings

The Group generated GBP48.9m (2020: GBP88.0m) from operating activities. The reduction is due to lower profits and a negative working capital movement in the year. Net working capital was an outflow in 2021 of GBP8.1m (2020: net inflow GBP19.9m), driven primarily from timing of payments on long-term projects. A number of cash milestones are due in 2022 from long-term projects.

Net cashflow from separately disclosed items (excluding the sale of assets and businesses which is included in "investing activities") was GBP1.7m (2020: GBP3.9m) and tax payments were in line with 2020 at GBP7.9m.

Cashflows from investing activities generated a GBP1.9m outflow (2020: GBP24.2m outflow) as the disposal of the Paladin dive support vessel and two businesses between them generated GBP20.9m in proceeds. This was balanced against the deployment of GBP22.1m (2020: GBP18.9m) of capital expenditure, principally aimed at ensuring the sea-worthiness of our vessels (GBP4.3m), investment in decommissioning and related equipment (GBP3.8m), upgrading our bubble-curtain equipment (GBP1.8m) and the purchase of ship-to-ship transfer equipment, for both LNG and oil operations (GBP2.5m). Investment in M&A was much reduced, with GBP1.1m being deployed in 2021, principally in relation to the acquisition of Subsea Engenuity, compared to GBP7.9m in 2020 which related to the purchase of Fathom and deferred consideration on previously completed transactions.

The Group reduced net debt, including all lease liabilities, by GBP12.9m to GBP185.6m. Within this, the net bank borrowing position improved by GBP26.0m to GBP139.6m (2020: GBP165.6m). Additional lease liabilities principally relate to a new charter vessel in the Caribbean and the renewal of seven existing leases within the Tankships division.

 
 GBPm                           2021      2020   Movement 
 Bank net borrowings         (139.6)   (165.6)       26.0 
                            --------  --------  --------- 
 Finance leases (IAS17 
  basis)                       (7.8)     (9.4)        1.6 
                            --------  --------  --------- 
 Right of use liabilities     (38.2)    (23.1)     (15.1) 
                            --------  --------  --------- 
 Net debt                    (185.6)   (198.1)       12.5 
                            --------  --------  --------- 
 

The Group's net debt for the purposes of its banking covenants consists of net bank borrowings, finance lease liabilities (on an IAS17 basis), and bonds and guarantees, as summarised in the table below. On a covenants basis, net debt has reduced by GBP47.8m. The ratio of net debt : EBITDA has remained broadly steady at 2.9 times, which compares to banking covenants requiring the ratio to be less than 3.5 times.

 
 GBPm                        2021      2020   Movement 
 Bank net borrowings      (139.6)   (165.6)       26.0 
                         --------  --------  --------- 
 Finance leases (IAS17 
  basis)                    (7.8)     (9.4)        1.6 
                         --------  --------  --------- 
 Bonds and guarantees       (8.4)    (28.3)       19.9 
                         --------  --------  --------- 
 Net debt - covenants 
  basis                   (155.8)   (203.6)       47.8 
                         --------  --------  --------- 
 EBITDA - covenants 
  basis                      54.3      73.2 
                         --------  --------  --------- 
 Net debt : EBITDA            2.9       2.8 
                         --------  --------  --------- 
 

Liquidity

The Group has retained good access to borrowing facilities. A new GBP130m revolving credit facility was signed during 2021 with three of the Group's existing lenders (replacing GBP142.5m of expiring bilateral facilities). The table below summarises borrowing facilities by year of maturity, with and without the inclusion of available "+1" extensions. It is the Board's current expectation that extension periods will be exercised in the normal course.

 
 GBPm               2022   2023    2024   2025    2026   Total 
 No extensions      40.0   47.5   200.0      -       -   287.5 
                   -----  -----  ------  -----  ------  ------ 
 With extensions    40.0      -    87.5   30.0   130.0   287.5 
                   -----  -----  ------  -----  ------  ------ 
 

Balance sheet

The Group's net assets reduced by GBP27.3m to GBP210.6m (31 December 2020: GBP237.9m), broadly in line with the loss for the year of GBP28.2m.

Non-current assets

Non-current assets reduced by GBP51.7m in the year. Goodwill reduced by GBP33.0m to GBP133.5m (31 December 2020: GBP166.5m) as a result of impairment charges of GBP29.2m, disposals of businesses that had GBP3.9m of goodwill allocated to them and foreign exchange differences of GBP1.6m. Intangible assets reduced to GBP13.3m from GBP20.1m due to amortisation and impairment charges of GBP9.1m offset by additions of GBP2.2m, including GBP0.7m in respect of the acquisition of Subsea Engenuity.

Within Property, Plant and Equipment the Group invested GBP19.4m in additions. This was offset by disposals with a net book value of GBP15.0m (principally the Paladin dive support vessel), depreciation of GBP23.6m, impairment charges of GBP5.1m against underutilised assets, the reclassification of the Swordfish dive support vessel to "Held for sale" within current assets (GBP10.7m) and foreign exchange differences of GBP1.0m.

Right of use assets increased by GBP9.9m, principally as a result of movements in the Group's Tankships fleet. One new vessel was taken on a long-term operating lease in the Caribbean to service a newly won, long-term commercial chartering arrangement, and seven existing vessel leases were renewed in the period. Depreciation of GBP8.4m against vessels was provided in the normal course and an impairment provision of GBP4.2m was booked to reflect the latest view of the likely residual values of a number of vessels in the fleet.

Current assets and current liabilities

The Group's net current assets increased by GBP17.7m to GBP85.5m. Short term cash and borrowings increased by GBP21.1m to a net position of GBP34.4m of cash. Assets held for sale with a value of GBP10.7m at 31 December 2021 were transferred from non-current assets, representing the Swordfish dive support vessel.

Non-current liabilities

Long-term borrowings reduced slightly to GBP173.9m (2020: GBP178.8m). An increase in long-term lease liabilities of GBP10.8m represents the new charters within the Tankships division. Net pension liabilities, as measured under IAS19, reduced to GBP1.9m compared to GBP10.3m at 31 December 2020. The Group continues to make deficit repair payments in line with agreed profiles.

Principal risks and uncertainties

The most significant risks that the Board considers may affect our business are listed below. No new principal risks have been identified during the year.

   --   Health and safety risk 
   --   Cyber security risk 
   --   Operating in emerging markets 
   --   Climate change 
   --   Contractual risk 
   --   Project delivery risk 
   --   Recruitment and retention of key staff 
   --   Financial risk 
   --   Pandemic risk 

A full description of the principal risk and uncertainties, the changes during 2021, and their management and mitigation as well as emerging risks will be set out in the 2021 Annual Report and Accounts.

Directors' Responsibilities

The following is an extract of the full statement prepared in connection with the Company's Annual Report and Accounts for the year ended 31 December 2021.

The Directors of the Company confirm that, to the best of their knowledge:

-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

-- the Strategic report and the Directors' report include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

The Directors of James Fisher and Sons plc and their respective responsibilities are set out in the 2021 Annual Report and Accounts.

The responsibility statement was approved by the Board on 9 March 2022 and signed on its behalf by:

E P O'Lionaird D Kennedy

Chief Executive Officer Chief Financial Officer

9 March 2022

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2021

 
                                                  Year ended                           Year ended 
                                               31 December 2021                     31 December 2020 
                                     -----------------------------------  ----------------------------------- 
                                           Before                               Before 
                                       separately   Separately              separately   Separately 
                                        disclosed    disclosed               disclosed    disclosed 
                                            items        items     Total         items        items     Total 
                              Notes          GBPm         GBPm      GBPm          GBPm         GBPm      GBPm 
 Revenue                          3         494.1            -     494.1         518.2            -     518.2 
 Cost of sales                            (373.6)       (11.0)   (384.6)       (380.6)       (43.2)   (423.8) 
                                                                --------                ----------- 
 Gross profit                               120.5       (11.0)     109.5         137.6       (43.2)      94.4 
 Administrative expenses                   (94.5)       (37.7)   (132.2)        (98.7)       (40.8)   (139.5) 
 Share of post-tax 
  results of associates                       2.0            -       2.0           1.6            -       1.6 
 Operating profit/(loss)                     28.0       (48.7)    (20.7)          40.5       (84.0)    (43.5) 
 Net finance expense              3         (8.3)            -     (8.3)         (9.0)            -     (9.0) 
 Profit/(loss) before 
  taxation                                   19.7       (48.7)    (29.0)          31.5       (84.0)    (52.5) 
 Income tax                       5        (10.1)         10.9       0.8         (7.2)          2.4     (4.8) 
                                     ------------                         ------------ 
 Profit/(loss) for 
  the year                                    9.6       (37.8)    (28.2)          24.3       (81.6)    (57.3) 
                                     ============  ===========  ========  ============  ===========  ======== 
 Attributable to: 
 Owners of the Company                       10.0       (37.8)    (27.8)          24.1       (81.6)    (57.5) 
 Non-controlling interests                  (0.4)            -     (0.4)           0.2            -       0.2 
                                              9.6       (37.8)    (28.2)          24.3       (81.6)    (57.3) 
                                     ============  ===========  ========  ============  ===========  ======== 
 
 Loss per share                   6                                pence                                pence 
 Basic                                                            (55.2)                              (114.2) 
 Diluted                                                          (55.2)                              (114.2) 
 

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

for the year ended 31 December 2021

 
                                                               Year ended    Year ended 
                                                              31 December   31 December 
                                                                     2021          2020 
                                                                     GBPm          GBPm 
 Loss for the year                                                 (28.2)        (57.3) 
                                                             ------------  ------------ 
 Items that will not be classified to the income statement 
 Actuarial gain/(loss) in defined benefit pension schemes             6.3         (9.3) 
 Tax on items that will not be reclassified                         (0.5)           1.1 
                                                             ------------  ------------ 
                                                                      5.8         (8.2) 
 Items that may be reclassified to the income statement 
 Exchange differences on foreign currency net investments           (2.6)         (7.8) 
 Effective portion of changes in fair value of cash 
  flow hedges                                                       (2.6)           0.6 
 Effective portion of changes in fair value of cash 
  flow hedges in joint ventures                                       0.3         (0.2) 
 Net changes in fair value of cash flow hedges transferred 
  to income statement                                                 0.3         (0.1) 
 Deferred tax on items that may be reclassified                       0.4           1.1 
                                                             ------------  ------------ 
                                                                    (4.2)         (6.4) 
 Total comprehensive income for the year                           (26.6)        (71.9) 
                                                             ============  ============ 
 
 Attributable to: 
 Owners of the Company                                             (26.1)        (72.0) 
 Non-controlling interests                                          (0.5)           0.1 
                                                             ------------ 
                                                                   (26.6)        (71.9) 
                                                             ============  ============ 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 December 2021

 
                                                  31 December 2021   31 December 2020 
                                                                            restated* 
                                          Notes               GBPm               GBPm 
 Non-current assets 
 Goodwill                                                    133.5              166.5 
 Other intangible assets                                      13.3               20.1 
 Property, plant and equipment                               122.2              158.2 
 Right-of-use assets                                          41.8               31.9 
 Investment in joint ventures                                  8.0                7.5 
 Other investments                                             1.4                1.4 
 Other receivables                                            10.1                0.8 
 Deferred tax assets                                           9.6                5.2 
                                                             339.9              391.6 
                                                 -----------------  ----------------- 
 
 Current assets 
 Inventories                                                  49.0               46.6 
 Trade and other receivables                                 157.3              162.0 
 Assets held for sale                         8               10.7                  - 
 Cash and cash equivalents                   10               68.0               93.1 
                                                             285.0              301.7 
                                                 -----------------  ----------------- 
 
 Current liabilities 
 Trade and other payables                                  (149.5)            (139.3) 
 Provisions                                                  (2.0)                  - 
 Current tax                                                 (4.5)              (7.6) 
 Borrowings                                  10             (33.6)             (79.8) 
 Lease liabilities                                           (9.9)              (7.2) 
                                                           (199.5)            (233.9) 
                                                 -----------------  ----------------- 
 Net current assets                                           85.5               67.8 
                                                 -----------------  ----------------- 
 Total assets less current liabilities                       425.4              459.4 
                                                 -----------------  ----------------- 
 Non-current liabilities 
 Other payables                                              (1.3)              (3.6) 
 Provisions                                                  (1.1)              (1.6) 
 Retirement benefit obligations               9              (1.9)             (10.3) 
 Cumulative preference shares                                (0.1)              (0.1) 
 Borrowings                                                (173.9)            (178.8) 
 Lease liabilities                                          (36.1)             (25.3) 
 Deferred tax liabilities                                    (0.4)              (1.8) 
                                                           (214.8)            (221.5) 
                                                 -----------------  ----------------- 
 Net assets                                                  210.6              237.9 
                                                 =================  ================= 
 
 Equity 
 Called up share capital                                      12.6               12.6 
 Share premium                                                26.8               26.7 
 Treasury shares                                             (0.6)              (0.2) 
 Other reserves                                             (20.4)             (16.5) 
 Retained earnings                                           191.5              214.6 
 Total shareholders equity                                   209.9              237.2 
 Non-controlling interests                                     0.7                0.7 
 Total equity                                                210.6              237.9 
                                                 =================  ================= 
 

* cash and cash equivalents and borrowings (current) have been restated for the 2020 comparative period to reflect a gross up of cash at bank and in hand and overdraft balances. Right-of-use assets, trade and other payables (current) and retained earnings have been restated for the 2020 comparative to reflect a change in accounting policy in respect of dry dock overhauls (see note 1).

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2021

 
                                                        31 December   31 December 
                                                               2021          2020 
                                                                        restated* 
                                                 Note          GBPm          GBPm 
 (Loss)/profit before tax                                    (29.0)        (52.5) 
 Adjustments to reconcile (loss)/profit 
  before tax to net cash flows 
     Depreciation and amortisation                             44.2          49.0 
     Separately disclosed items (excluding 
      amortisation)                                            45.8          81.1 
     Other non-cash items                                       7.8           7.1 
 (Increase)/decrease in inventories                           (2.7)           2.0 
 (Increase)/decrease in trade and other 
  receivables                                                (15.4)          30.9 
 Increase/(decrease) in trade and other 
  payables                                                     10.0        (13.0) 
 Defined benefit pension cash contributions 
  less service cost                                           (2.2)         (4.8) 
                                                       ------------  ------------ 
 Cash generated from operations                                58.5          99.8 
 Cash outflow from separately disclosed 
  items                                                       (1.7)         (3.9) 
 Income tax (payments)/receipts                               (7.9)         (7.9) 
                                                       ------------  ------------ 
 Cash flow from operating activities                           48.9          88.0 
 
 Investing activities 
 Dividends from joint venture undertakings                      1.6           1.8 
 Proceeds from the disposal of a subsidiary, 
  net of cash disposed                                          6.2           1.3 
 Proceeds from the disposal of property, 
  plant and equipment                                          14.7           2.6 
 Finance income                                                 0.3           0.3 
 Acquisition of subsidiaries, net of cash 
  acquired                                                    (1.1)         (7.9) 
 Investment in joint ventures and other 
  investments                                                     -         (0.5) 
 Acquisition of property, plant and equipment                (22.1)        (18.9) 
 Development expenditure                                      (1.5)         (2.9) 
                                                       ------------  ------------ 
 Cash flows used in investing activities                      (1.9)        (24.2) 
 
 Financing activities 
 Proceeds from the issue of share capital                       0.1           0.2 
 Finance costs                                                (5.6)         (7.0) 
 Net purchase of own shares by Employee 
  Share Ownership Trust                                       (0.5)         (0.9) 
 Notional purchase of own shares for LTIP 
  vesting                                                     (0.5)         (1.0) 
 Capital element of lease repayments                         (13.7)        (13.0) 
 Proceeds from borrowings                                      84.0          34.3 
 Repayment of borrowings                                     (89.9)        (64.5) 
 Dividends paid                                                   -         (4.0) 
 Dividends paid to non-controlling interest                       -         (0.2) 
                                                       ------------  ------------ 
 Cash flows used in financing activities                     (26.1)        (56.1) 
 
 Net increase in cash and cash equivalents         10          20.9           7.7 
 Cash and cash equivalents at 1 January                        13.5           7.5 
 Net foreign exchange differences                               0.1         (1.7) 
 Cash and cash equivalents at 31 December                      34.5          13.5 
                                                       ============  ============ 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2021

 
                                                                              Total          Non- 
                    Share     Share   Retained      Other   Treasury   shareholders   controlling    Total 
                  capital   premium   earnings   reserves     shares         equity     interests   equity 
                     GBPm      GBPm       GBPm       GBPm       GBPm           GBPm          GBPm     GBPm 
 At 1 January 
  2020 
  as reported        12.6      26.5      284.7     (10.6)          -          313.2           0.8    314.0 
 Accounting 
  policy 
  change - 
  Right-of-use 
  refit 
  capitalisation        -         -        2.0          -          -            2.0             -      2.0 
                   ------  --------  ---------  ---------  ---------  -------------  ------------  ------- 
 At 1 January 
  2020               12.6      26.5      286.7     (10.6)          -          315.2           0.8    316.0 
 Loss for the 
  year                  -         -     (57.5)          -          -         (57.5)           0.2   (57.3) 
 Other 
  comprehensive 
  income                -         -      (8.7)      (5.8)          -         (14.5)         (0.1)   (14.6) 
 Contributions by 
 and 
 distributions 
 to owners: 
 Ordinary 
  dividends 
  paid                  -         -      (4.0)          -          -          (4.0)             -    (4.0) 
 Dividend paid to 
  minority 
  interest              -         -          -          -          -              -         (0.2)    (0.2) 
 Remeasurement of 
  non-controlling 
  interest 
  put option            -         -          -      (0.1)          -          (0.1)             -    (0.1) 
 Share based 
  payments              -         -        0.1          -          -            0.1             -      0.1 
 Tax effect of 
  share 
  based payments        -         -      (0.3)          -          -          (0.3)             -    (0.3) 
 Purchase of 
  shares 
  by ESOT               -         -          -          -      (0.9)          (0.9)             -    (0.9) 
 Notional 
  purchase 
  of own shares         -         -      (1.0)          -          -          (1.0)             -    (1.0) 
 Arising on the 
  issue 
  of shares             -       0.2          -          -          -            0.2             -      0.2 
 Transfer               -         -      (0.7)          -        0.7            0.0             -      0.0 
 At 31 December 
  2020               12.6      26.7      214.6     (16.5)      (0.2)          237.2           0.7    237.9 
 Loss for the 
  year                  -         -     (27.8)          -          -         (27.8)         (0.4)   (28.2) 
 Other 
  comprehensive 
  income                -         -        5.8      (4.1)          -            1.7         (0.1)      1.6 
 Contributions by 
 and 
 distributions 
 to owners: 
 Remeasurement of 
  non-controlling 
  interest 
  put option            -         -          -        0.2          -            0.2             -      0.2 
 Changes in 
  ownership 
  interest 
  without 
  a change in 
  control               -         -      (0.7)          -          -          (0.7)           0.5    (0.2) 
 Share based 
  payments              -         -        0.3          -          -            0.3             -      0.3 
 Tax effect of 
  share 
  based payments        -         -      (0.1)          -          -          (0.1)             -    (0.1) 
 Purchase of 
  shares 
  by ESOT               -         -          -          -      (0.5)          (0.5)             -    (0.5) 
 Notional 
  purchase 
  of own shares         -         -      (0.5)          -          -          (0.5)             -    (0.5) 
 Arising on the 
  issue 
  of shares             -       0.1          -          -          -            0.1             -      0.1 
 Transfer               -         -      (0.1)          -        0.1              -             -        - 
 At 31 December 
  2021               12.6      26.8      191.5     (20.4)      (0.6)          209.9           0.7    210.6 
                   ======  ========  =========  =========  =========  =============  ============  ======= 
 
 

NOTES TO THE PRELIMINARY RESULTS

   1.       General information 

James Fisher and Sons plc (the Company) is a public limited company registered and domiciled in England and Wales and listed on the London Stock Exchange. The consolidated financial statements comprise the financial statements of the Company, its subsidiary undertakings and its interest in associates and jointly controlled entities (together the Group), for the year ended 31 December 2021. The Company's shares are listed on the London Stock Exchange. The Company and consolidated financial statements were approved for publication by the Directors on 9 March 2022.

The Group financial statements have been prepared in accordance with UK-adopted international accounting standards. The Company financial statements have been prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006. The financial statements are prepared on a going concern basis and on a historical cost basis, modified to include revaluation to fair value of certain financial instruments. As permitted by section 408 of the Companies Act 2006, a separate income statement and related notes for the holding company have not been presented in these financial statements. The profit after taxation in the Company was GBP12.2m (2020: GBP15.9m loss). The Group and Company financial statements are presented in Sterling and all values are rounded to the nearest million pounds (GBPm) except when otherwise indicated.

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2021 or 2020. Statutory accounts for 2020 have been delivered to the registrar of companies, and those for 2021 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Going concern

The Directors have, at the time of approving these Financial Statements, a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for at least 12 months from this reporting date and have therefore continued to adopt the going concern basis of preparation.

In light of the continuing Covid-19 global pandemic and subsequent uncertainty, the Group has undertaken a detailed viability review and taken appropriate mitigating actions to protect the business and liquidity. Operations have been impacted by travel restrictions, supply chain logistics and actions to protect employees to ensure safe working conditions. The Group's quick response to Covid-19 has mitigated some of the impact on financial performance, however the potential impact of a post pandemic recession gives ongoing risk to future financial performance. Liquidity is monitored through daily balance reporting, weekly forecasting and 12 month cash flow forecasting.

The Group had GBP111.5m of undrawn committed facilities at 31 December 2021 (2020: GBP120.2m). The Group refinanced GBP130m of revolving credit facilities during the year. At 31 December 2021, the Group had GBP287.5m of committed facilities, a small decrease from the GBP300m at 31 December 2020. GBP40m revolving credit facilities are due for renewal within twelve months from the date of this report. Forecasts have been prepared which continue to show headroom should they not be renewed. All revolving credit facilities are linked to covenant compliance requirements, being a net debt to EBITDA ratio and interest cover. The Group has been in compliance with covenant requirements in the year, post year end, and is forecasting to be compliant for at least 12 months from the date of approval of these financial statements. Post year end, as at the date of approval of the financial statements, the Group has approximately GBP102m of undrawn credit facilities available.

The Directors' base case forecast reflects financial performance in the year ended 31 December 2021 and the associated impacts of Covid-19. A number of severe but plausible downside scenarios were calculated compared to the base case forecast of profit and cash flow to assess headroom against facilities for the next 12 months. Against these negative scenarios, which reduced operating profit by GBP5m in 2022 and GBP1m in 2023, adjusted projections showed no breach of covenants. Additional sensitivities which reduced cash receipts by GBP10m in 2022 and GBP20m in 2023 and delayed project delivery reducing profit by GBP10m in 2022 and GBP20m in 2023 and deferring debtor allocation by GBP3m in 2022 and by GBP6m in 2023 were also run separately in combination with the severe but plausible downside and adjusted projections showed no breach of covenants. Further mitigating actions could also be taken in such scenarios should it be required, including reducing capital expenditure, continuing to sell non-core, underperforming businesses and reducing forecast dividend payments and not carrying out any acquisitions.

Taking into account the level of cash and available facilities outlined above and having undertaken rigorous assessment, the Directors consider that the Group and Company have sufficient funds to allow them to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore continue to adopt the going concern basis of accounting in preparing these Financial Statements.

Change in accounting policy

The accounting policy in respect of dry dock overhauls on leased vessels has been changed to defer the overhaul costs as a component of the related tangible fixed asset and depreciate over their useful economic lives until the next estimated overhaul rather than build up a provision in preparation for the next estimated overhaul. The prior year comparatives have been restated to reflect this change. The change in accounting policy is considered to provide more relevant and reliable information as the dry docks are directly attributable to the use of the vessel and this change aligns the accounting policy for both owned and leased vessels. As a result previous dry dock overhaul provisions (recognised in trade and other payables) of GBP0.8m have been reversed and the right-of-use assets has increased by GBP1.2m. The impact on consolidated total equity is an increase from GBP235.9m to GBP237.9m. There is no impact on the company only total equity.

   2.       Alternative performance measures 

The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) performance measures which are not defined within IFRS. The Directors use these measures in order to assess the underlying operational performance of the Group and, as such, these measures are important and should be considered alongside the IFRS measures. The adjustments are separately disclosed and are usually items that are significant in size and/or non-recurring in nature. The following non-GAAP measures are referred to in the Annual Report and Accounts.

2.1 Underlying operating profit and underlying profit before taxation

Underlying operating profit is defined as operating profit before separately disclosed items, which comprise: acquisition related income and expense (amortisation or impairment of acquired intangible assets, acquisition expenses, adjustments to contingent consideration), the costs of a material restructuring, litigation, or asset impairment and the profit or loss relating to the sale of businesses. As acquisition related income and expense fluctuates with activity and to provide a better comparison to businesses that are not acquisitive, the Directors consider that these items should be separately disclosed to give a better understanding of operating performance. Underlying profit before taxation is defined as underlying operating profit less net finance expense.

 
                                                 2021     2020 
                                                 GBPm     GBPm 
 Operating loss                                (20.7)   (43.5) 
 Separately disclosed items before taxation      48.7     84.0 
 Underlying operating profit                     28.0     40.5 
 Net finance expense                            (8.3)    (9.0) 
 Underlying profit before taxation               19.7     31.5 
                                              -------  ------- 
 

2.2 Underlying earnings per share

Underlying earnings per share (EPS) is calculated as the total of underlying profit before tax, less income tax, but excluding the tax impact on separately disclosed items less profit attributable to non-controlling interests, divided by the weighted average number of ordinary shares in issue during the year. The Directors believe that underlying EPS provides a better understanding of the underlying earnings capability of the Group. Underlying earnings per share is set out in note 6.

2.3 Capital employed and Return on Capital Employed (ROCE)

Capital employed is defined as net assets less right-of-use assets, less cash and cash equivalents and after adding back borrowings. Average capital employed is adjusted for the timing of businesses acquired and after adding back cumulative amortisation of customer relationships. Segmental ROCE is defined as the underlying operating profit, divided by average capital employed. The key performance indicator, Group post-tax ROCE, is defined as underlying operating profit, less notional tax, calculated by multiplying the effective tax rate by the underlying operating profit, divided by average capital employed.

 
                                                        2021     2020 
                                                        GBPm     GBPm 
 Net assets                                            210.6    237.9 
 Less right-of-use assets                             (41.8)   (31.9) 
 Plus net borrowings                                   185.6    198.1 
 Capital employed                                      354.4    404.1 
                                                     -------  ------- 
 
 Underlying operating profit                            28.0     40.5 
 Notional tax at the underlying effective tax rate    (14.3)    (9.2) 
                                                        13.7     31.3 
 Average capital employed                              377.4    467.6 
 Return on average capital employed                     3.6%     6.7% 
                                                     -------  ------- 
 

2.4 Underlying Cash conversion

Cash conversion is defined as the ratio of operating cash flow to underlying operating profit. Operating cash flow comprises:

 
                                                2021     2020 
                                                GBPm     GBPm 
 Cash generated from operations                 58.5     99.8 
 Dividends from joint venture undertakings       1.6      1.8 
 Capital element of lease repayments          (13.7)   (13.0) 
 Other                                           0.7      0.5 
                                             -------  ------- 
 Operating cash flow                            47.1     89.1 
 Underlying operating profit                    28.0     40.5 
 Cash conversion                                168%     220% 
                                             -------  ------- 
 

2.5 Underlying earnings before interest, tax, depreciation and amortisation (Underlying EBITDA)

Underlying EBITDA, in line with the Group's banking covenants, is defined as the underlying operating profit before interest, tax, depreciation and amortisation.

 
                                                             2021     2020 
                                                             GBPm     GBPm 
 Underlying operating profit                                 28.0     40.5 
 Depreciation and amortisation                               44.2     49.0 
 Less: Deprecation on right-of-use assets                  (13.2)   (11.9) 
          Amortisation of acquired intangibles (note 5)     (2.9)    (2.9) 
 IFRS 16 impact removed                                     (1.8)    (1.5) 
                                                          -------  ------- 
 Underlying EBITDA                                           54.3     73.2 
                                                          -------  ------- 
 

2.6 Underlying dividend cover

Underlying dividend cover is the ratio of underlying diluted earnings per share to the total dividend per share.

 
                                       2021    2020 
                                      pence   pence 
 Underlying earnings per share         20.0    47.9 
 Total dividends per share*             0.0     8.0 
 Underlying dividend cover (times)      0.0     6.0 
                                     ------  ------ 
 

2.7 Underlying net borrowings

Underlying net borrowings is net borrowings as set out in note 10, excluding right-of-use operating leases. The Group's banking arrangements are based on underlying net borrowings.

 
                                          2021     2020 
                                          GBPm     GBPm 
 Net borrowings (note 10)                185.6    198.1 
 Less: right-of-use operating leases    (38.4)   (23.1) 
                                       -------  ------- 
                                         147.2    175.0 
                                       -------  ------- 
 

2.8 Organic constant currency

Organic constant currency growth represents absolute growth, adjusted for current and prior year acquisitions and for constant currency. Constant currency takes the non-sterling results of the prior year and re-translates them at the average exchange rate of the current year.

   3.       Segmental information 

The Group has four operating segments reviewed by the Board: Marine Support, Specialist Technical, Offshore Oil and Tankships. The Board assess the performance of the segments based on underlying operating profit, underlying operating margin and return on capital employed. It considers that this information is the most relevant in evaluating the performance of its segments relative to other entities which operate in similar markets. Inter-segmental sales are made using prices determined on an arms-length basis. Sector assets exclude cash, short-term deposits and corporate assets that cannot reasonably be allocated to operating segments. Sector liabilities exclude borrowings, retirement benefit obligations and corporate liabilities that cannot reasonably be allocated to operating segments.

 
 Year ended 31 December 2021            Marine   Specialist   Offshore 
                                       Support    Technical        Oil   Tankships   Corporate     Total 
                                          GBPm         GBPm       GBPm        GBPm        GBPm      GBPm 
 Segmental revenue 
 - point in time                         173.7         46.3       86.5           -           -     306.5 
 - over time                              41.0         88.3          -        60.1           -     189.4 
 Inter-segmental sales                   (0.2)        (1.4)      (0.2)           -           -     (1.8) 
 Revenue                                 214.5        133.2       86.3        60.1           -     494.1 
                                      ========  ===========  =========  ==========  ==========  ======== 
 
 Underlying operating profit/(loss)        5.0          9.9       11.1         4.8       (2.8)      28.0 
 Separately disclosed items             (26.0)        (2.9)     (16.3)       (3.5)           -    (48.7) 
                                      --------  -----------  ---------  ----------  ----------  -------- 
 Operating (loss)/profit                (21.0)          7.0      (5.2)         1.3       (2.8)    (20.7) 
 Net finance expense                                                                               (8.3) 
                                                                                                -------- 
 Loss before tax                                                                                  (29.0) 
 Income tax                                                                                          0.8 
 Loss for the year                                                                                (28.2) 
                                                                                                ======== 
 
 
 Assets and liabilities 
 Segmental assets                        189.7        154.8      124.2        75.1        73.4     617.2 
 Investment in joint ventures              2.6          3.2        2.2           -           -       8.0 
                                      --------  -----------  ---------  ----------  ----------  -------- 
 Total assets                            192.3        158.0      126.4        75.1        73.4     625.2 
 Segmental liabilities                  (77.4)       (60.3)     (26.4)      (39.2)     (211.3)   (414.6) 
                                      --------  -----------  ---------  ----------  ----------  -------- 
                                         114.9         97.7      100.0        35.9     (137.9)     210.6 
                                      ========  ===========  =========  ==========  ==========  ======== 
 Other segmental information 
 Capital expenditure                       6.1          2.7        6.3         4.3           -      19.4 
 Depreciation and amortisation            12.3          6.9       12.1        12.4         0.5      44.2 
                                      ========  ===========  =========  ==========  ==========  ======== 
 

Revenue disclosed in the income statement is comprised of goods and services of GBP370.0m (2020: GBP398.9m), equipment hire of GBP68.5m (2020: GBP40.2m) and construction contract income of GBP55.6m (2020: GBP79.1m).

 
 Year ended 31 December 2020            Marine   Specialist   Offshore 
                                       Support    Technical        Oil   Tankships   Corporate     Total 
                                          GBPm         GBPm       GBPm        GBPm        GBPm      GBPm 
 Segmental revenue 
 - point in time                         225.3         42.2       80.1           -           -     347.6 
 - over time                              24.5         89.2          -        60.4           -     174.1 
 Inter-segmental sales                   (0.4)        (1.0)      (2.1)           -           -     (3.5) 
 Revenue                                 249.4        130.4       78.0        60.4           -     518.2 
                                      ========  ===========  =========  ==========  ==========  ======== 
 
 Underlying operating profit/(loss)       10.1         14.0       11.2         8.0       (2.8)      40.5 
 Separately disclosed items             (79.6)        (1.6)      (2.8)           -           -    (84.0) 
                                      --------  -----------  ---------  ----------  ----------  -------- 
 Operating (loss)/profit                (69.5)         12.4        8.4         8.0       (2.8)    (43.5) 
 Net finance expense                                                                               (9.0) 
                                                                                                -------- 
 Loss before tax                                                                                  (52.5) 
 Income tax                                                                                        (4.8) 
 Loss for the year                                                                                (57.3) 
                                                                                                ======== 
 
 Assets and liabilities 
 Segmental assets                        246.7        156.0      139.4        54.7        89.0     685.8 
 Investment in joint ventures              2.1          3.0        2.4           -           -       7.5 
                                      --------  -----------  ---------  ----------  ----------  -------- 
 Total assets                            248.8        159.0      141.8        54.7        89.0     693.3 
 Segmental liabilities                  (90.5)       (57.6)     (24.9)      (21.4)     (261.0)   (455.4) 
                                      --------  -----------  ---------  ----------  ----------  -------- 
                                         158.3        101.4      116.9        33.3     (172.0)     237.9 
                                      ========  ===========  =========  ==========  ==========  ======== 
 Other segmental information 
 Capital expenditure                       7.1          1.9        5.4         3.1           -      17.5 
 Depreciation and amortisation            17.8          6.7       12.7        11.5         0.3      49.0 
                                      ========  ===========  =========  ==========  ==========  ======== 
 

4. Separately disclosed items

In order for a better understanding of the underlying performance of the Group certain items are disclosed separately (note 2). Separately disclosed items are as follows:

 
                                                                  2021     2020 
                                                                  GBPm     GBPm 
 Acquisition related income and (expense): 
  Costs incurred in acquiring/disposing of businesses            (0.5)    (1.0) 
  Amortisation of acquired intangibles (note 2)                  (2.9)    (2.9) 
                                                        --------------  ------- 
                                                                 (3.4)    (3.9) 
 Marine support restructure                                          -    (3.9) 
 Gain/(loss) on disposal of businesses                             0.3    (3.5) 
 Gain on disposal of Dive support vessel                           0.3        - 
 Costs of material litigation                                    (3.1)        - 
 Impairment charges: 
   Intangible assets                                            (29.2)   (19.4) 
   Dive support vessels                                              -   (31.6) 
   Tangible fixed assets                                         (9.3)    (2.4) 
   Receivables                                                   (4.3)   (19.3) 
                                                        --------------  ------- 
 Separately disclosed items before taxation                     (48.7)   (84.0) 
 Tax on separately disclosed items                                10.9      2.4 
                                                        --------------  ------- 
                                                                (37.8)   (81.6) 
                                                        ==============  ======= 
 

During the year, separately disclosed items were in relation to the following matters:-

Acquisition related income and expense comprises costs incurred on the acquisition/disposal of businesses including external due diligence costs, amortisation of acquired intangibles and any adjustment for contingent consideration. As set out in note 2 these items fluctuate with acquisition activity and are disclosed separately to provide a better comparison to businesses that are not acquisitive.

Disposal of businesses relates to the disposal during 2021 of James Fisher Testing Services Ltd which was sold for proceeds of GBP5.7m and resulted in a gain of GBP0.8m. Also, the sale of James Fisher NDT Ltd for which proceeds were GBP1.2m and loss on disposal of GBP0.5m.

Disposal of DSV is the sale of the Paladin vessel for $17.3m proceeds and a GBP0.3m gain.

Costs of material litigation are costs arising from the process of exiting a number of historic joint venture companies.

Impairment charges: Intangible assets comprise goodwill of GBP27.5m and GBP1.7m development costs. Tangible fixed assets comprise assets in the Marine support, Specialist technical and Tankship divisions fair value is less than carrying net book value. The 2021 impairment in respect of receivables relates to a specific counterparty risk and receivables billed over 12 months ago in relation to certain projects.

Tax on separately disclosed items includes a credit of GBP7.9m, which represents deferred tax recognised on the timing differences created following the impairment of dive support vessels during the year ended 31 December 2020 and the Group's current expectations regarding Dive Support operations.

In 2020 separately disclosed items were in relation to the following matters:-

(i) Acquisition related income and expense comprises costs incurred on the acquisition of businesses including external due diligence costs, amortisation of acquired intangibles and any adjustment for contingent consideration. As set out in note 2 these items fluctuate with acquisition activity and are disclosed separately to provide a better comparison to businesses that are not acquisitive.

(ii) Due to the deferral of subsea projects in oil and gas and renewables, a material restructure of marine support activities was completed during 2020. The charge of GBP3.9m related to redundancy and notice costs in relation to 202 employees.

(iii) Disposal of businesses relates to the disposal in 2020 of JF Nuclear GmbH for proceeds of GBP1.6m which resulted in a loss of GBP1.2m. The balance includes GBP2.0m in respect of the exchange of interests in an associate and GBP0.3m relating to cost adjustments in respect of businesses disposed of in previous years.

   (iv)   Impairment charges 

(a) Intangible assets comprise goodwill of GBP17.0m and other intangible asset impairments of GBP2.4m in relation to development expenditure and intellectual property where expected future cash flows no longer justify carrying value. The goodwill impairment in 2020 related to the Subtech (GBP10.0m) and James Fisher Testing Services (GBP7.0m) cash generating units.

(b) Dive support vessels: In 2019, the Group acquired two dive support vessels with the strategic aim of targeting the market of subsea projects in the oil and gas sector in West Africa and the Middle East. The combination of changes in energy prices in the first half of 2020 and the onset of the global pandemic resulted in lower utilisation of these vessels than expected and gave rise to an impairment charge of GBP31.6m based on their recoverable amount.

(c) the tangible fixed asset impairment in 2020 relates to certain assets in Marine Support and Offshore Oil where latest forecasts of future cash flows in respect of these assets is less than carrying net book value.

(d) the 2020 impairment in respect of receivables relates to a number of projects commenced by the Group during 2019 where payment for amounts invoiced or considered due under the contract have yet to be paid and for part of what the Board considers it appropriate to make provision. A number of these issues are subject to legal process and the outcome is uncertain.

   5.      Taxation 
 
 (a) The tax charge is based on profit for the year 
  and comprises:                                         2021    2020 
                                                         GBPm    GBPm 
 Current tax: 
 UK corporation tax                                     (0.7)   (1.1) 
 Overseas tax                                           (6.0)   (7.9) 
 Adjustment in respect of prior years: 
   UK corporation tax                                     1.3     2.7 
   Overseas tax                                         (0.3)   (1.1) 
                                                       ------ 
 Total current tax                                      (5.7)   (7.4) 
                                                       ------  ------ 
 Deferred tax: 
 Origination and reversal of temporary differences: 
 Current year 
  UK corporation tax                                      8.3     1.9 
  Overseas tax                                            0.0     1.1 
 Prior year 
  UK corporation tax                                    (0.6)   (0.3) 
  Overseas tax                                          (1.2)   (0.1) 
 Total tax on profit for the year                         0.8   (4.8) 
                                                       ======  ====== 
 

The total tax charge in the income statement includes a further GBP0.3m (2020: GBP0.1m) which is stated within the share of post-tax results of joint ventures.

Current year UK tax includes a credit of GBP7.9m, which represents deferred tax recognised on the timing differences created following the impairment of dive support vessels during the year ended 31 December 2020 and the Group's current expectations regarding Dive Support operations.

   6.      Earnings per share 

Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year, after excluding 54,571 (2020: 9,227) ordinary shares held by the James Fisher and Sons plc Employee Share Ownership Trust (ESOT), as treasury shares. Diluted earnings per share are calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

At 31 December 2021, 650,513 options (2020: 386,317) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would be anti-dilutive. The average market value of the Company's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding.

 
 Weighted average number of shares 
                                                             2021         2020 
                                                           Number       Number 
                                                               of           of 
                                                           shares       shares 
 Basic weighted average number of shares               50,345,477   50,342,732 
 Potential exercise of share based payment schemes         10,560       85,973 
 Diluted weighted average number of shares             50,356,037   50,428,705 
                                                      ===========  =========== 
 

Underlying earnings per share

To provide a better understanding of the underlying performance of the Group, underlying earnings per share on continuing activities is reported as an alternative performance measure (note 2).

 
                                                       2021     2020 
                                                       GBPm     GBPm 
 
 Profit attributable to owners of the Company        (27.8)   (57.5) 
 Separately disclosed items                            48.7     84.0 
 Tax on separately disclosed items                   (10.9)    (2.4) 
 Underlying profit attributable to owners of the 
  Company                                              10.0     24.1 
                                                    =======  ======= 
 

Earnings per share

 
                                            pence     pence 
 Basic earnings per share                  (55.2)   (114.2) 
 Diluted earnings per share                (55.2)   (114.2) 
 Underlying basic earnings per share         20.0      48.0 
 Underlying diluted earnings per share       20.0      47.9 
                                          -------  -------- 
 
    7.     Dividends paid and proposed 
 
                                                       2021         2020   2021   2020 
                                                  pence per        pence 
                                                      share    per share   GBPm   GBPm 
 
 Equity dividends on ordinary shares declared 
  and paid: 
 Interim dividend for 2020                                -          8.0      -    4.0 
 
 Less dividends on own shares held by ESOP                                    -      - 
                                                                              -    4.0 
                                                                          =====  ===== 
 

No final dividend is proposed in respect of the year ended 31 December 2021 (2020: GBPnil).

   8.     Assets held for sale 

In June 2021, management agreed a plan to sell the Dive Support Vessel (DSV) known as the Swordfish within the Marine Support division and consequently GBP10.7m of vessels have been reclassified from property plant and equipment. The vessel is being actively marketed by a third party ship broker.

   9      Retirement benefit obligations 

The Group and Company defined benefit pension scheme obligations relate to the James Fisher and Sons plc Pension Fund for Shore Staff (Shore Staff), the Merchant Navy Officers Pension Fund (MNOPF) and the Merchant Navy Ratings Pension Fund (MNRPF). The financial statements incorporate the latest full actuarial valuations of the schemes which have been updated to 31 December 2021 by qualified actuaries using assumptions set out in the table below. The Group's obligations in respect of its pension schemes at 31 December 2021 were as follows:

 
                      Group 
                 --------------- 
                   2021     2020 
                   GBPm     GBPm 
 Shore staff      (1.0)    (8.8) 
 MNOPF            (0.9)    (1.3) 
 MNRPF              0.0    (0.2) 
                 ------  ------- 
                  (1.9)   (10.3) 
                 ======  ======= 
 
   10.   Reconciliation of net borrowings 

Net debt comprises interest bearing loans and borrowings less cash and cash equivalents.

 
                              31 December   Cash      Other   Exchange   31 December 
                                     2020   flow   non-cash   movement          2021 
                                     GBPm   GBPm       GBPm       GBPm          GBPm 
 Cash and cash equivalents           13.5   20.9          -        0.1          34.5 
 Debt due within one year           (0.2)    0.1          -          -         (0.1) 
 Debt due after one year          (178.9)    5.8      (0.9)          -       (174.0) 
                             ------------  -----  ---------  ---------  ------------ 
                                  (179.1)    5.9      (0.9)          -       (174.1) 
 Lease liabilities                 (32.5)   13.7     (27.0)      (0.2)        (46.0) 
                                                             --------- 
 Net borrowings                   (198.1)   40.5     (27.9)      (0.1)       (185.6) 
                             ------------  -----  ---------  ---------  ------------ 
 
                              31 December   Cash      Other   Exchange   31 December 
                                     2019   flow   non-cash   Movement          2020 
                                     GBPm   GBPm       GBPm       GBPm          GBPm 
 Cash and cash equivalents            7.5    7.7          -      (1.7)          13.5 
 Debt due within one year           (0.3)    0.1          -          -         (0.2) 
 Debt due after one year          (207.4)   30.1      (0.7)      (0.9)       (178.9) 
                             ------------  -----  ---------  ---------  ------------ 
                                  (207.7)   30.2      (0.7)      (0.9)       (179.1) 
 Lease liabilities                 (30.2)   13.0     (15.4)        0.1        (32.5) 
 Net borrowings                   (230.4)   50.9     (16.1)      (2.5)       (198.1) 
                             ------------  -----  ---------  ---------  ------------ 
 
   11.   Share capital 
 
 Allotted, called up and fully 
  paid 
                                                              GBP1 Cumulative 
                                     25p Ordinary shares     Preference shares 
 In millions of shares                   2021        2020       2021       2020 
 In issue at 1 January                   50.4        50.3        0.1        0.1 
 Exercise of share options                0.0         0.1          -          - 
 In issue at 31 December                 50.4        50.4        0.1        0.1 
                                   ==========  ==========  =========  ========= 
 
                                         2021        2020       2021       2020 
                                         GBPm        GBPm       GBPm       GBPm 
 Issued share capital                    12.6        12.6        0.1        0.1 
                                   ==========  ==========  =========  ========= 
 

The preference shareholders are entitled to receive 3.5% cumulatively per annum, payable in priority to any dividend on the ordinary shares. The ordinary shareholders are entitled to receive dividends as declared from time to time by the Directors.

Shares all carry equal voting rights of one vote per share held. They also have the right to attend and speak at general meetings, exercise voting rights and appoint proxies. Neither type of share is redeemable. In the event of a winding-up order the amount receivable in respect of the cumulative preference shares is limited to their nominal value. The ordinary shareholders are entitled to an unlimited share of the surplus after distribution to the cumulative preference shareholders.

 
                                                2021   2020 
 Treasury shares                                GBPm   GBPm 
 54,571 (2020: 9,227) ordinary shares of 
  25p                                            0.6    0.2 
                                               =====  ===== 
 

The Company has an established Employee Share Ownership Trust, the James Fisher and Sons plc Employee Share Ownership Trust, to meet potential obligations under share option and long-term incentive schemes awarded to employees. The historic cost of these shares at 31 December 2021 was GBP0.6m (2020: GBP0.2m). The trust has not waived its right to receive dividends.

In the year ended 31 December 2021, 26,738 (2020: 34,670) ordinary shares with an aggregate nominal value of GBP6,685 (2020: GBP8,668) were issued to satisfy awards made under the Company's Executive Share Option Scheme at option prices of 521.67p and 567p (2020: 410p and 522p) per share giving rise to total consideration of GBP530,055 (2020: GBP404,024).

During the year the Trust purchased 50,000 (2020: 50,000) of its own shares in the market at an average cost per share of GBP9.87 (2020: GBP17.82) and a total cost of GBP0.5m (2020: GBP0.9m).

   12.     Related party transactions 

Excepting the change of Directors and the acquisition of Subsea Engenuity, there were no material changes to related parties or associated transactions from those disclosed in the 2020 Annual Report.

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(END) Dow Jones Newswires

March 10, 2022 02:00 ET (07:00 GMT)

Fisher (james) & Sons (LSE:FSJ)
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Fisher (james) & Sons (LSE:FSJ)
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De Jun 2021 a Jun 2022 Haga Click aquí para más Gráficas Fisher (james) & Sons.