James Fisher and Sons plc

Transcription

1 James Fisher and Sons plc Preliminary Results for year ending 31 December 2009 JF Prelims

2 2009 Highlights % group revenue () + 7% group profit from operations () - 12% profit for operations before tax () + 5% adjusted earnings per share + 5% 37.17p 35.53p total annual dividend per share + 5% 13.60p 13.01p most challenging economic climate for some time strong organic growth overseas more than compensates for effect of UK recession o specialist technical division + 6.4m - revenue + 37% - operating result + 67% o lower interests costs + 2.7m o loss for Marine Oil division - operating result down 7.0m strong cash performance - good headroom on bank facilities and loan covenants JF Prelims

3 James Fisher - Strategy Since 2002 goal to be the UK s leading marine service company strong cash flow from Marine Oil to fund growth of Marine Services divisions (Offshore, Specialist Technical, Defence) focus on niche businesses with high margins (10%), high returns on capital (15%), good cash generation growth by acquisition initially, then capital used to support organic growth 2009 strategy stress test Marine Oil cash cow almost dries up Marine Services confirm their resilience consistent record of strong growth achieved strong cash flow in 2009 confirms that James Fisher has come of age as the fully fledged, self sufficient Marine Service Company JF Prelims

4 Marine Service divisions - organic and acquisition growth record Marine Service divisions pre tax profit * % growth in Pre tax profit 35% 34% 64% 23% 50% 21% Constituents of Growth acquisitions organic growth cumulative growth over * joint venture profit pre interest and tax consistently strong record of organic growth JF Prelims

5 James Fisher profit by division period ending 31 December revenue profit revenue profit Offshore Oil Specialist Technical Defence Marine Oil 71.1 (1.6) common costs (2.7) (2.7) finance cost (3.2) (5.9) profit before tax % 23.6 Specialist Technical has become the most profitable division JF Prelims

6 Group Balance Sheet 31 December June December 2008 non current assets cash and deposits other current assets total assets financial liabilities other liabilities (120.0) (69.1) (122.0) (65.5) (108.3) (75.9) total liabilities (189.1) (187.5) (184.2) net assets net gearing 93% 108% 96% net cash increase bank facilities renewed gearing down JF Prelims

7 Group Cash Flow year ending 31 December 2009 Operating activities group profit from continuing operations depreciation increase in trade receivables increase in inventories (decrease) increase in trade payables decrease (increase) in inventories & other receivables attributable to submarine rescue vessels additional defined benefit pension contributions other movement dividends from associates and joint venture undertakings income tax payable Investing activities proceeds from sale of plant and equipment acquisitions, disposals & other investing activities capital expenditure equipment property (1.7) (7.3) (6.4) 14.0 (3.1) (0.5) (5.7) (5.4) (11.7) (7.4) (8.5) (8.4) 11.7 (10.6) (3.1) (3.5) (5.1) (11.3) (5.8) Financing activities proceeds from other non-current borrowings repayment of borrowings dividends paid other cash flows from financing activities 38.9 (26.7) (6.7) (3.5) 30.8 (14.8) (5.9) (6.9) increase in cash net debt (99.5) (91.5) net gearing 93% 96% strong cash generation despite Marine Oil JF Prelims

8 Tax charge bullet points The tax charge is made up as follows Current tax UK corporation tax (3,902) (3,100) tax over provided in previous year foreign tax 194 (2,387) (6,095) (41) (1,632) (4,773) group deferred tax (198) (475) total tax charge (6,293) 26% (5,248) 22% higher tax charge because tonnage tax losses cannot be offset growing overseas income has beneficial effect underlying tax charge c 23% without tonnage tax JF Prelims

9 Group banking facilities 31 December 2009 bullet points HSBC Ship Finance Term Loans Everard Term Loan unsecured 20m RCF unsecured drawn available period repayable margin over LIBOR/NIBOR 0.625% & 1% 1% 2.5% Royal Bank of Scotland $50.4m ship finance loan % over FED Lloyds TSB 12.5m RCF - unsecured 15.0m RCF - unsecured 20.0m RCF - unsecured % 1% 2.75% Barclays 15m RCF - unsecured 10m RCF - unsecured % 1.3% Sparebanken 1 SR-bank NOK 30m RCF - unsecured NOK 3.9m loan - unsecured NOK 135.7m - secured % 1% 1% Yorkshire 20.0m RCF unsecured % Covenants Net debt to EBITDA EBIT to interest cover EBIT + operating leases to interest & operating leases < 3.5 > 3.0 > 1.5 headroom 21% headroom 66% headroom 29% JF Prelims

10 Pensions Position at December 2009 Shore Staff Scheme MNOPF total 2008 total fair value of scheme assets present value of scheme liabilities (55.2) (8.2) (63.4) (57.3) net pension liability (14.2) (8.2) (22.4) (18.6) Shore Staff Scheme closed to new members 2001 closing to existing members 2010 salary cap 1.5% per annum 2006/10 Dockworkers and Everard group scheme merged into Shore Staff scheme 30 June 2009 assets - equities 47% ( %) - fixed interest 53% ( %) regular contribution m m 2009 MNOPF industry scheme covering uk seafarers court case March 2005 made James Fisher liable all former employers liable to contribute funded over 7 years 1.87m per annum new triennial valuation underway In view of adverse timing of valuation further additional deficit possibly of similar scale to existing deficit agreement with trustees to fund over 11 years JF Prelims

11 3 year revenue and profit growth bullet points revenue profit Offshore Oil % % % % % % Specialist Technical % % % % % % Defence % % % % % Marine Oil % % % % % % Specialist Technical profits trebled in two years - revenue growth driven by expansion overseas Marine Oil now represents only 25% of assets employed ( %) JF Prelims

12 Assets Employed % 31% 33% 23% Specialist Technical 7% Defence Marine Oil 7% Offshore Oil 25% 37% total 249m total 195m JF Prelims

13 3 year Margin and ROCE record Margins bullet points Offshore Oil 26.0% 26.3% 30.4% Specialist Technical 15.5% 12.8% 9.1% Defence 13.6% 15.3% 21.5% Marine Oil -2.2% 6.7% 11.3% ROCE Offshore Oil * 15.6% 18.0% 16.1% Specialist Technical 22.8% 16.9% 13.2% Defence 19.7% 20.2% 22.7% Marine Oil -2.5% 8.0% 11.9% * after adjustment for Norwegian property pre adjustment % % % JF Prelims

14 James Fisher Group James Fisher and Sons plc Offshore Oil Services Specialist Technical Defence Marine Oil Services compressors winches & lifting technology pumps, reels, steam & other ancillary equipment customisation & specialist staff electrical submersible pumps specialist mooring equipment ship to ship oil transfers design, production & application of strain gauges nuclear decommissioning & inspection & measurement submarine rescue surface ships coastal delivery of clean petroleum products in NW Europe JF Prelims

15 Offshore Oil million result ( million) ROCE * 15.6% 18.0% 16.1% 2009 in summary * after adjustment for Norwegian property niche products protect margin diversified - production, construction and maintenance as well as exploration strong performance in Norway and downhole cluster (RMSpumptools) weaker demand in UK North Sea Scan Tech Air Supply gap between Africa contracts capital expenditure on new equipment 6 million Stavanger premises in progress Key drivers oil price relationship to lift costs project activity of subsea operators Norwegian oil strategy - more rigs operational downhole new products new markets continued growth of new oil regions Africa, Asia, Brazil currencies strong US dollar and Norwegian kroner positive factors profit Margin 26.0% 26.3% 30.4% resilience in downturn future growth from Norway, downhole and new oil regions JF Prelims

16 Specialist Technical million result ( million) profit Margin 15.5% 12.8% 9.1% ROCE 22.8% 16.9% 13.2% FenderCare Strainstall FenderCare Nuclear in % in % in % JF Prelims

17 FenderCare 56% of 2010 budgeted Specialist Technical turnover What it does full range of mooring and related marine equipment global leader in ship to ship oil transfer service 20+ bases worldwide turnkey service from design to installation of mooring systems 2009 in summary significant growth in STS significant growth through overseas bases Singapore, Sharjah, Lagos new bases established in Brazil and Australia strong dollar and euro assisted margins Key drivers worldwide reputation and sales performance presence in global growth markets bases Sharjah, Singapore, Lagos, Brazil, Australia (new) global demand for ship to ship transfer of hydrocarbons expansion into large immature markets increasing market share demand for mooring and related marine equipment - varies with vessel miles capital projects, particularly ports and newbuild ships - varies with capital budgets strong dollar a positive factor FenderCare is the epitome of a fast growing marine service company well positioned in the right markets JF Prelims

18 Strainstall 21% of 2010 budgeted Specialist Technical turnover What it does manufacture and application of strain gauges used around globe in: o marine industry - quick release hooks - monitoring hull stress o construction industry o operations - diagnostic infrastructure - eg bridges - safety - railways and other equipment 2009 in summary growth in infrastructure related projects growth in marine interests construction related contracts down - Dubai flood monitoring bridge monitoring Key drivers revenue projects - diagnostic and rail safety capital projects - ports, property (Dubai) ship newbuilds strong dollar a positive factor growth overseas in 2010 the result will depend on how far the growth in revenue projects has offset any shortfall in capital projects JF Prelims

19 Nuclear 23% of 2010 budgeted Specialist Technical turnover What it does nuclear decommissioning design, engineering, plant characterisation and remote handling inspection and measurement services non destructive testing services installation services calibration services 2009 in summary Faber acquired for 4 million contract gains from energy & aerospace companies increased visibility in industry Key drivers overall decommissioning spend growing presence in market Faber integration successful launch of - new nuclear calibration unit - new righall at Sellafield newbuild contracts decommissioning manipulator JF Nuclear a promising area for expansion now meeting group criteria JF Prelims

20 Defence million result ( million) Highlights Submarine Rescue Korean contract Singapore Australia profit Margin 13.6% 15.3% 21.5% ROCE 19.7% 20.2% 22.7% - on time and on budget - entered service in May, four months delay on financing - new service with former Royal Navy equipment Surface Ships regular income from Foreland and BNG smaller contracts but no major contract wins Key drivers much business development activity but all expensed until preferred bidder smaller contracts to smooth profit performance new contract wins necessary for growth progress made in widening profit base but still relatively small Submarine Rescue Service newly developed inflatable freeboard extender fitted on LR5 JF Prelims

21 Marine Oil million loss ( million profit) profit in summary margin -2.2% 6.7% 11.3% from April onwards UK contract volumes down by 15%+ ROCE -2.5% 8.0% 11.9% - means 30% exposure to spot market not planned 20% oil majors lost market share to new entrants surplus capacity in the wider European markets - means spot rates down between 24% and 40% v 2008 no market in second hand ships or charters from October means reduction in fixed cost difficult 3 ships laid up in Q3 redelivered mv Rudderman in July strong dollar & euro adverse effect on bareboat charters UK market behaved like a cyclical shipping market for first time in the remembered past The key driver - global economic recovery but some stickiness - old customers have experienced lower spot rates - new customers initially prefer spot to contract - recovery in second hand markets important to underpin higher rates 2010 to date contract volumes modestly up but no improvement in spot rates JF Prelims

22 Marine Oil The Future Role 2009 experience recession has made behave more like a shipping and less like a niche business high fixed costs a disadvantage when revenue falls cash generator role no longer essential for growth of Marine Services tonnage tax a disadvantage when losses but cyclical markets bounce back Cattedown profits held up well long experience of profits and cash generation source of group s marine service skills Marine Oil should be judged on its individual merits as a future profit/cash generator JF Prelims

23 Outlook Offshore Norway, Africa & Asia, Downhole (RMSpumptools) promising Scotland slow Specialist Technical FenderCare Nuclear Strainstall well positioned & promising but 2009 growth exceptional becoming more important operations well positioned but construction related still weak Defence growth depends on new contract wins Marine Oil recovery linked to global recovery when it comes likely to be sticky demand/supply balance expiry of charters Financial strong dollar and low interest rates positive factors trading to management expectations Marine Service divisions well placed to provide further growth and value for shareholders JF Prelims

24 JF Prelims Preliminary Results for year ending 31 December 2009