Preliminary Results for year ending 31 December offshore oil. specialist technical. marine oil. defence

Transcription

1 James Fisher and Sons plc Preliminary Results for year ending 31 December offshore oil specialist technical marine oil defence 1

2 another successful year for James Fisher group revenue + 54% profit from operations + 35% profit before tax* + 21% adjusted earnings per share + 16% final dividend per share + 15% * before separately disclosed items p 7.52 p p 6.54 p organic growth prime source of profit growth Everard acquisition successfully completed strong cash flow enabled spend of 15m on acquisitions while reducing gearing 2 James Fisher Nuclear decommissioning equipment

3 James Fisher strategy goal core expertise strategy to be recognised as the UK s leading marine service company the practical application of technical and operational skills in the marine sector to grow our marine service activities organically and by acquisitions use strong marine oil cash flow to grow marine support divisions (offshore oil, specialist technical, defence) leverage the Company s marine skills based on tankships throughout the other divisions encourage organic growth in the divisions focus on high cash generating, high margin niche business track record 6 years consistency and success basic adjusted EPS from continuing operations:

4 James Fisher profit by division period ending 31 December revenue profit revenue profit Offshore Oil Specialist Technical Defence Marine Oil common costs (2.6) (2.2) finance cost (4.7) (2.3) profit before tax * * before separately disclosed items 4

5 Marine Support Services the key to growth Marine Oil Services Tankships Marine Support Services Offshore Oil Specialist Technical Defence * * * 1.9 * * * Yearonyear growth + 153% + 35% + 34% + 65% + 23% * not available Offshore Oil and Specialist Technical main source of growth 5

6 Marine Support Services organic and acquisition growth record Marine Support Services pre tax profit * % growth in Pre tax profit 153% 35% 34% 65% 23% Constituents of Growth Acquisitions organic growth Oakleaf (0.1) (0.4) (1.2) (1.2) (1.2) cumulative growth over * Foreland profit after tax organic growth accounts for over 50% of profit growth since

7 Group Balance Sheet year ending 31 December non current assets non current assets classified as held for sale cash and deposits other current assets total assets financial liabilities other liabilities total liabilities net assets net gearing (91.0) (53.4) (144.4) % (83.6) (49.9) (133.5) % 7

8 Group Cash Flow year ending 31 December Operating activities group profit from continuing operations depreciation and amortisation increase in inventories submarine rescue vessels increase in other inventories movement in other working capital other movements Investing activities dividends from joint venture undertakings proceeds from sale of plant and equipment acquisitions and disposals capital expenditure other cash flows from investing activities Financing activities proceeds from other noncurrent borrowings repayment of borrowings dividends paid other cash flows from financing activities increase in cash net debt net gearing ,100 8,344 (3,707) (3,203) 221 (3,713) 1,416 28,377 (17,995) (22,967) ,855 (37,017) (5,129) (5,010) 2,922 (77,948) 83% ,147 5,662 (198) (1,827) (757) (2,471) 1,275 12,255 (22,151) (7,424) ,912 (20,362) (4,499) (2,876) 5 (74,038) 86% 8

9 Tax charge The tax charge is made up as follows 000 normalised normalised 000 Current tax UK tonnage tax (31) (31) (21) (21) UK corporation tax (1,433) (1,433) (1,309) (1,671) (1,464) (1,464) (1,330) (1,692) tax over provided in previous year foreign tax (1,542) (1,542) (883) (883) (2,831) (3,006) (1,443) (2,575) group deferred tax (128) (969) total tax charge (2,959) (3,006) (2,412) (2,575) 15% 16% 17% 18% Lower normalised tax charge reflects tonnage tax effect of Everard profits growth in overseas profits at lower tax rate 9

10 Group banking facilities 31 December drawn available period margin HSBC Ship Finance Term Loans Everard Term Loan unsecured 20m RCF unsecured repayable repayable repayable % & 1% over LIBOR 1% over LIBOR 1% over LIBOR Bank of Scotland 20m RCF unsecured repayable % over LIBOR Royal Bank of Scotland $50.4m ship finance loan 5.1 repayable % over LIBOR/EURIBOR Lloyds TSB 12.5m RCF unsecured 15.0m RCF unsecured 12.5m Singapore RCF unsecured repayable 2011 repayable repayable % over LIBOR 1% over LIBOR 1% over LIBOR Sparebanken 1 SRbank NOK 30m RCF unsecured NOK 3.9m loan unsecured repayable repayable % over NIBOR 1% over NIBOR Covenants Net debt to EBITDA EBIT to interest cover EBIT + lease interest and lease < 4 > 3 > 1.5 headroom 46% headroom 42% headroom 37% 10

11 Pensions Position at December Shore Staff Scheme Dockworkers Scheme Everard Scheme Total Total fair value of scheme assets present value of scheme liabilities (27.2) (7.7) (14.6) (49.5) (51.2) net pension liability 0.5 (0.9) (0.4) (3.0) MNOPF (11.0) (7.2) (11.4) (10.2) Shore Staff Scheme closed to new members 2001 closing to existing members 2010 salary cap 1.5% per annum /10 special payment 1.6m nil regular contribution 0.66m 0.66m Dockworkers Scheme paid up, closed scheme special payment 0.4m 2005 regular contribution 0.25m 0.25m Everard Scheme closed new members 2004 closed for future accruals 2005 contribution 0.3m over 13 years from 2005 MNOPF court case March 2005 former employers liable to contribute James Fisher share December 3.7m acquisition of Everard introduced additional liability funded over 7 years 1.87m per annum agreement with trustees to fund over 15 years Action taken to limit exposure but climate worse in

12 3 year revenue and profit growth revenue profit Offshore Oil % % % % % % Specialist Technical % % % % % % Defence % % % % % Marine Oil % % % % 6.7 3% 12

13 3 year Margin and ROCE record Margins 2005 Offshore Oil 32.6% 33.3% 27.0% Specialist Technical 9.5%* 10.9% 11.5% Defence 21.5% 26.8% 22.7% Marine Oil 11.3% 12.7% 15.0% ROCE 2005 Offshore Oil 16.5% 17.9% 15.4% Specialist Technical 12.6%** 15.0% 13.6% Defence 22.7% 27.7% 22.0% Marine Oil 12.0% 12.0% 13.1% * 11.3% after adjustment for nuclear cluster ** 16.2% after adjustment for nuclear cluster 13

14 James Fisher Group Offshore Oil Services Specialist Technical Services Defence Marine Oil Services Aberdeen Stavanger FenderCare Strainstall Downhole cluster Nuclear cluster Submarine Rescue Surface Ships James Fisher Everard 14

15 Offshore Oil Services Aberdeen & Stavanger revenue evenly split niche business hiring, customising and selling specialist equipment plus associated labour customers operate across oil production, construction and maintenance markets as well as exploration marine equipment compressors, generators, winches, pumps, reels and other lifting equipment bolton acquisitions Buchan Technical Services Ltd for 3.5 million net global market increasing export of North Sea expertise worldwide outlook encouraging both markets and companies expanding rapidly 15

16 Specialist Technical FenderCare and Strainstall clusters main markets FenderCare Strainstall shipping and port services worldwide range of specialist marine services and products centred around the hire and sale of marine fenders and mooring equipment range of specialist products and applications around strain gauges includes rail and construction customers bolton acquisitions JCM Scotload Ltd for 3.0 million in February 2008 outlook encouraging both markets and companies expanding rapidly 16

17 Specialist Technical downhole cluster core companies Remote Marine Systems Ltd (RMS) bought 2004 and Pump Tools Ltd bought for 7.4 million net product typical JF profile global expansion outlook specialist equipment to support electrical submersible pump (ESP) operations for the oil industry niche product, engineering driven, with potential for commercial expansion North Sea origins, now selling jointly into an expanding world market promising niche product, growing market 17

18 Specialist Technical the nuclear cluster nuclear decommissioning tier 3 : core skills plant characterisation and remote handling market inspection measurement market outlook confusion and shortage of funds before BNG privatisation services company startup with former BNG/BIL MD and team NDT Inspection and Testing Ltd acquired for 1.0 million net cash rapid growth in turnover and wide potential inspection measurement and plant characterisation good remote handling work to be done to avoid commoditisation 18

19 Defence submarine rescue & surface Submarine Rescue 2 major projects Korea delivery late 2008/early 2009 revenue 4.4 million profit 0.3 million Singapore delivery first half 2009 wip 3.8 million no profit taken through life contract to 2029 with Singapore Navy Surface Luerssen contract for management of 3 corvettes Foreland charters contracted until 2010 Outlook Submarine Surface confirmation of world leadership provided vessels delivered on time and to budget good potential but gradual not immediate growth 19

20 Marine Oil Services tankships James Fisher Everard merger completed by merger cost of 800,000 charged against profit all Everard newbuilds now in service three refinanced raising 22.6 million operational performance is improving following completion of integrating companies no contract losses with oil majors EU contract (EMSA) for Atlantic sector financial returns on track, aiming for historic Fisher levels outlook steady earner and cash generator unusually heavy dry dock schedule H

21 James Fisher well placed in any storm proven track record of generating cash and organic growth main businesses in three of the most resilient and fastest growing sectors, eg offshore oil, marine and port related services increasing proportion of revenue from outside UK ( 37% 30%) service business largely unaffected by cyclical swings in asset values good, longterm relationships and credit lines with banks plenty of headroom on bank covenants 21

22 Outlook trading to date to management expectations offshore oil and specialist technical defence marine oil gearing well positioned in strong markets to grow profits 2008 aims to deliver Korea and Singapore contracts on time and to cost continue progress made in to improve margins and returns to historic James Fisher levels strong cash flows but temporary funding of Singapore vessel up to 12 million possibility of increased pension deficits A proven, consistent track record of generating cash, organic growth and value for shareholders 22