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Nice - Questor in the Telegraph upgrades FSJ to Buy from Hold this morning:
"Questor share tip: James Fisher a buy once more
James Fisher now a buy up from hold, says Questor
By John Ficenec
6:00AM BST 21 Aug 2013
Questor says BUY
Shares in James Fisher look cheap, with the business likely to accelerate in the second half.
Fisher is a deep sea diving and submarine rescue specialist and full-year earnings forecasts are likely to be raised by City analysts.
Yesterday�s results for the six months to the end of June showed pre-tax profits up 11pc to �18.6m on revenue 7pc higher at �201m. The numbers saw Fisher shares defy wider market weakness, by rising almost 6pc.
Over the half year, the Barrow-in-Furness-based marine specialist enjoyed buoyant demand for services in the offshore oil market . Its advanced �saturation� techniques which allow divers to go deeper underwater for longer and are more efficient than conventional air breathing operations, have seen strong demand.
Offshore oil operations reported revenue leaping by over a fifth, and profits rising 15pc to �9m, on business in the North Sea, Latin America and Asia Pacific.
Fisher continued to expand into higher margin diving business, yesterday announcing the �3.25m purchase of Osiris Marine Services which provides sub-sea services primarily to wind farms. This follows the �20.8m purchase of diving equipment supplier Divex in March.
Fisher�s results were also boosted by contracts in West Africa. Oil extracted from the heart of Africa needs transferring to supertankers moored offshore because of the lack of port infrastructure. Marine operations, that include ship-to-ship oil transfer, saw underlying profits rise 7pc to �9.4m.
Encouragingly growth is being funded by cash generation rather than debt. An excellent cash flow performance and the �25.5m sale of the railway engineering business during the first six months resulted in net debt falling to �76m from �99m, year-on-year, leaving a strong balance sheet. Announced alongside these results was the sale of a 25pc holding in the Foreland joint PFI project with the Ministry of Defence which raised a further �11.4m.
The mergers and acquisitions activity led to a tweak in group structure with submarine rescue, Divex and Nuclear falling under Specialist Technical, while Fendering, Strain and Maritime Services operations became Marine Support.
With growth expected to accelerate into the second half, and a strong balance sheet for further acquisitions, a 2013 earnings multiple of 16, falling to 14.9 next year, doesn�t look too demanding. Add in a healthy 10pc increase in the interim dividend to 6.46p, due on November
Very good H1 results today from FSJ, with almost 30p EPS and a VERY bullish outlook. I always like to see the word "buoyant"!
They say they're trading in line with 63p EPS expectations, but the outlook may give rise to much better than that - maybe 65p-70p EPS imho - assuming it continues:
"James Fisher benefitted from good market conditions in both Marine Support and Offshore Oil driven by demand for our specialist services around the world. Looking ahead, we expect stronger revenue growth in the second half when compared with the first, led by our Offshore Oil businesses which are enjoying buoyant demand for their services in both the North Sea and internationally. To date in the second half, the Group is trading to management expectations and continues to be well placed to deliver further value to our shareholders."
The sale and disposal announced today almost cancel each other out in PBT terms given that Foreland was declining and Osiris is obviously growing and has been acquired on an extremely cheap multiple from the looks of it, with considerable assets too. Nice lump of cash received from Foreland as well.
A multi-million dollar contract for Strainstall (not RNS'd). Which shows you how large contracts have to be for FSJ to announce them....
"Strainstall to Supply IMMS System for Moho Nord Platform
Posted on Jul 9th, 2013
Strainstall Marine UK announces the award of a contract for the supply of an Integrated Marine Monitoring System (IMMS), from Hyundai Heavy Industries (HHI) of Korea. The IMMS is for the Moho Nord Tension Leg Platform (TLP), of which HHI is the constructor and Total Oil the principal operator. The Moho Nord platform is to be located offshore Congo, West Africa.
The multi-million dollar project is one of the largest contracts of this type awarded to Strainstall Marine, and is an example of the ever-developing integration capabilities of the company.
The project has a wide brief with many integrated systems providing critical monitoring data to the platform operating team.
The Integrated Marine Management System is based around a centralized architecture, utilizing field-proven software, processors and Input/output systems. The IMMS brings together the operation of a number of hull-based monitoring and control systems, including tendon tension monitoring, load cells, riser monitoring, draft gauging, load management software, winch monitoring, corrosion monitoring and a Metocean system to monitor a range of sea and air conditions. There will be provision for several-hundred lines of input/output running directly into the system.
The system has built-in redundancy at many levels, from power supplies and networking, to redundant servers and HMI provision. The HMI interfaces present clear displays to the operator, enabling straight-forward monitoring and control of all relevant input/output and related systems. Three HMI positions are catered for, including one ‘roaming’ laptop computer user interface. This can be connected hard-wired into the system network, or alternatively can be used remotely via a wireless link, permitting off-platform monitoring and system operation, should requirements demand this.
The project, due to be delivered to the customer in March 2014, shows the commitment of Strainstall Marine to the continuous development of technology and systems, enabling platform management teams to make informed judgments based on the provision of complex data from a diverse range of sensors and systems.
Strainstall is a broad-based engineering business, specialising in load measurement and sensor based safety technology, with over 45 years of experience in a wide range of industries. Based in Cowes, Isle of Wight, the company has long been associated with the manufacture of standard and bespoke load cells."
RNS just out - good to see the Chairman buying shares, and around £32k's worth at that...
And the Chairman paid 1043p per share, so buyers now can buy them cheaper than him at 1040p.
FSJ remains under many people's radar imo. Just look at the volumes since the director buy was announced, and in general too. That will change.
Good coverage in today's FT - particularly interesting comment re the weak pound helping FSJ this year:
March 6, 2013 11:15 pm
Africa and Asia demand buoys James Fisher
By Andrew Bounds
James Fisher, the marine services business, said booming demand from Asia and Africa had boosted profits by almost a fifth as it announced the £20m acquisition of a diving company.
The Barrow-based group, one of the UK’s few remaining shipowners, has found success by concentrating on niche services to the global shipping, oil and gas industries in recent years.
Underlying pre-tax profits grew from £30m to £35.4m in the year to December 31, 2012, with revenues up from £307.6m to £363.3m. Pre-tax profits were £46.7m (£29.8m) including one-off factors such as a £20.9m gain from the sale of The Railway Engineering Company (TRE) to Hitachi Rail at the year’s end. It recommended a 10 per cent rise in the dividend from 16.1p to 17.7p.
Underlying diluted earnings per share were up 15 per cent from 48.4p to 55.7p. Its offshore oil and specialist technical divisions led the way, including work for BP in Angola.
Defence profits fell as vessel charters for navy ships ended and new contracts were delayed. Its fleet of tanker ships taking fuel around the UK, once its main revenue source, more than doubled profits from £1.1m to £2.4m in a static market. However, it took an £9.2m impairment charge on the value of its 17 vessels.
It bought Divex, an Aberdeen based business, for an initial £20m in cash, with up to £13m more depending on performance. Divex has equipment allowing divers to go to greater depths safely as oil and gas companies drill in ever deeper waters. It also supplies several navies, complementing Fisher’s expertise in submarine rescue vehicles.
Nick Henry, chief executive, said: “We are continuing our strategy of taking good UK marine skills and focusing on markets around the world. We have delivered what we indicated we would.”
Some 60 per cent of group revenues come from outside the UK, compared with 37 five years ago.
Mr Henry said the weak pound was helping win contracts and there was huge potential for British businesses in emerging markets. “We have to do what our forefathers did and get out there and trade with the world.”
Investec, the broker, said: “James Fisher’s leverage of its UK skills to the global marine services market is working well as good organic growth is being delivered, margins exceed 10 per cent and the group return on capital employed is over 15 per cent.” The shares have risen more than 50 per cent since last June."
This is the first broker upgrade - Investec have increased their target price to £10 (from 845p) and their EPS forecast this year to 60.9p (from 56.9p), with a 19.1p dividend.
Next year's forecast is now 66.1p EPS with a 20.6p dividend.
FSJ is imo a lovely, solid company which is growing well organically and could still make more acquisitions soon. Plus it has chances of entering the FTSE250 at around a £10 share price, which might cause a nice re-rating in itself.
It's possible FSJ may surprise us with how high it could go. Assuming the City latches on to its qualities then a P/E of say 20 may not be out of the question, giving a 1350p-1400p share price in 12 months' time on current forecasts.
FSJ also has a habit of beating forecasts, by small or larger degrees. Even Investec's new upgraded forecasts don't appear particularly challenging.
Excellent results out today ahead of expectations:
- 55.7p EPS is well ahead of forecasts and the 17.7p dividend is spot on the top forecast
- all the growth was purely organic with no acquisitions
- operating cash flows were terrific at 132% cash conversion, and year end gearing was just 39%....
- the outlook remains rosy and trading for 2013 is good
Plus there's a £20m cash acquisition of a market-leading diving company (with a further £13m performance-based). The acquisition terms look pretty good value, and paid out for cash will increase EPS this year.
With that very low gearing there's possibly room for more acquisitions too.
Interim Management Statement
James Fisher and Sons Plc (FSJ.L) ('James Fisher'), the leading Marine Services Company, today announces its Interim Management Statement for the period from 1 July 2012 to date. The pattern of trading has continued from the first half with revenue for the third quarter 14% ahead of the previous year and results in line with management's expectations. The Company's focus on Asia Pacific and other developing regions and its strategy to leverage UK marine service skills overseas has helped to deliver strong growth in the first nine months of 2012.
The Group's largest divisions, Specialist Technical and Offshore Oil have continued to perform well and the Group has invested further in new equipment to increase future organic growth. As previously signalled, our Defence business is experiencing a slower second half and will report a lower financial result in 2012. However this will be more than offset by growth in our other divisions. Marine Oil has continued the progress that it achieved in the first half.
The Group remains cash generative and combined with support from our banks is able to take advantage of suitable bolt-on acquisition opportunities as they arise.
Overall James Fisher's strategy to focus on the faster growing regions of the World and to have limited exposure to North America and Continental Europe is reflected in its strong trading performance. The Company remains well positioned to deliver further growth and value for our shareholders.
Wow - an almost $30m contract win from the USA just won by Fendercare....
"Fendercare to supply hydro-pneumatic fenders to US Navy
Fri Sep 21 2012, 13:15 PM
Project Name: NSWCCD - Hydro-Pneumatic Fenders and Associated Installation - USA
Project Status: Awarded
Project Type: Parent
Project Start Quarter: Q3 2012
Project End Quarter: Q3 2017
Project Value (USD): 29.42 Million
Project Sector: Equipment and Systems
The US Naval Surface Warfare Center, Carderock Division (NSWCCD) has awarded a contract to Fendercare Marine for the procurement of hydro-pneumatic fenders and associated installation, support, shipping and travel.
The Hydro-pneumatic fenders are airtight rubber bladders that are partially filled with water and weighted on one end to make them float in a vertical position. The fenders are moored to the waterfront facility against a backer system or between submarines or surface ships.
The US$29.42 million contract was awarded in September 2012 and is expected to be completed by September 2017.
The work will be performed in Norfolk, United Kingdom.
Project Location: Washington, DC, USA, North America."
21 August 2012
Panmure Gordon retains its BUY recommendation for James Fisher & Sons with a target price of 720p.
N+1 Brewin retains its BUY recommendation for James Fisher & Sons, increasing its target price from780p to 799p.
Investec reiterates its BUY recommendation for James Fisher & Sons, increasing its target price from 685p to 725p.
Here's some links about SCLP, one of the hottest stocks at the moment:
Questor Says "BUY"
Here's the link to the Telegraph tip:
NICHE OPERATOR FISHER OFFERS SEAWORTHY OPPORTUNITY
As well, James Fisher has also strategically focused its efforts on higher-growth regions of the world, particularly off the coast of Africa. Traditional Western hunting grounds are expected to continue suffering from the effects of the global downturn.
Confounding weakness seen among the vast majority of the industrial transport specialists, the £307 million cap has posted solid double-digit turnover growth in recent years. Group sales increased 14.6% to £307.6 million in 2011, helping to drive pre-tax profits 15.1% higher to £29.8 million. Broker consensus expects revenues to increase 14.1% to £351 million in 2012, before growth slows to 7.4% the year after when sales of £377 million are pencilled in. Profit before tax is forecast to rise 13.8% this year to £33.9 million and 8% in 2013 to £36.6 million.
Underlying profit up 21% - not too shabby in the current times
The strong result in the first half is further testament to the Company's strategy of applying its core marine skills to the vast and fast growing markets of Asia and the developing world. There continue to be good prospects across all the service divisions to drive further organic growth. The company also remains alert for possible bolt-on acquisitions which can reinforce the market position and growth prospects of its businesses.
The Specialist Technical division is leading the expansion into Asia, Australia, Africa and South America. The BP contract in Angola has completed its mobilisation phase and is working well operationally. The nuclear business continues to strengthen its scale and market position but its result in the first half benefited from a one-off contract for the London 2012 Olympics. The company remains confident about the future prospects for the division to produce further growth.
The Offshore Oil division is seeing the benefits of strong demand for its niche capabilities both within the North Sea and, more particularly, overseas in countries such as Brazil which presents attractive new opportunities for the Group.
The Defence division is well placed in its niche subsea market and is positioned for growth in its submarine rescue and swimmer delivery vehicle segments. However, the completion of the URF contract in August and the reduction in the size of the Foreland contract means that this business is likely to report a slow second half.
The high growth rates achieved in the first half reflect a number of major contract deliveries and should not therefore be extrapolated into the second half. Nevertheless, James Fisher remains on a healthy growth path which provides confidence for the future.
The Company is trading to management expectations to date in the second half and continues to be well placed to deliver further value to our shareholders.
Commenting on the results Nick Henry, Chief Executive Officer, said:
"James Fisher has made good progress during the period, maintaining the double-digit growth rates achieved in both revenue and profit in 2011.
The high growth rate achieved in the first half reflect a number of major contract deliveries and should not therefore be extrapolated into the second half. Nevertheless, James Fisher remains on a healthy growth path which provides confidence for the future. The company is trading to management expectations to date in the second half and continues to be well placed to deliver further value to our shareholders."
· Group revenue up 27%, underlying profit up 21%
· Robust growth in Specialist Technical, particularly in Asia and Africa
· Offshore Oil benefitted from increased demand in regions such as Brazil and the Norwegian North Sea
· BP Angola contract mobilised and operating well
· Completed Swedish navy submarine rescue vehicle refurbishment
· Marine Oil, despite subdued markets, posted improved results
· Cash conversion of 105% and net gearing reduced to 72% at 30 June 2012 (2011: 83%)
· Interim dividend increased by 10%
· Charles Rice appointed as non-executive Chairman following the retirement of Tim Harris
James Fisher, the provider of specialist equipment and support for oil tankers, has warned investors that its strong performance in the first four months of the year should not necessarily be taken as a general indicator for the full year. After the group's trading update at the start of May, the shares jumped to almost 600p. They have already been as high as 615p this year. However, resurgent eurozone troubles have prompted a broad-based sell-off and the shares are now significantly below this level. There is no company-specific reason for the fall, other than the general market backdrop. Indeed, analysts have some punchy price targets on the shares, with the average forecast of the four analysts monitored by Bloomberg on this measure being 706¼p. Trading on a December 2012 multiple of 10.3 times, falling to 9.6, the shares remain a buy.
MIDAS EXTRA UPDATE: Selling British marine expertise keeps James Fisher buoyant
James Fisher started out as a shipbuilder in Barrow-in-Furness 165 years ago.
Still based in Cumbria, the company is now a world leader in specialised marine services, ranging from ship-to-ship oil transfer many miles out to sea to submarine rescue and maintenance.
Customers include BP and the Royal Navy, but a growing proportion of profits come from overseas, particularly Asia but also Latin America and Africa.
Buoyant: James Fisher's customers include BP and the Royal Navy
Encouragingly, too, most of James Fisher’s employees are British-based engineers who export their skills and experience to other parts of the world.
Last week, the company delivered full-year figures for 2011 showing a 15 per cent sales rise to £308million and an 11 per cent increase in pre-tax profits to £30million.
Indicating his confidence in the future, chairman Tim Harris raised the dividend by 21 per cent to 48p.
The company’s offshore oil division is doing particularly well and recently won a substantial contract from BP in Angola, but improvements were seen in all the group’s businesses last year and 2012 is expected to deliver more of the same.
Read more: http://www.dailymail.co.uk/money/investing/article-2113192/MIDAS-EXTRA-UPDATE-Selling-British-marine-expertise-keeps-James-Fisher-buoyant.html#ixzz1ooIPbxye
Thos were excellent results - 48.8p adjusted EPS is above the top expectations of any of the brokers (which was 48p).
Plus we get a total 16.08p divi for the year.
Plus trading so far this year is in line with expectations of around 52p EPS.
Broker price targets are in the region of 670p, and I feel FSJ now deserves a re-rating.
And it's ISAble!
6 March 2012
James Fisher and Sons plc
Full Year Results 2011
James Fisher and Sons plc ("James Fisher"), the leading marine service provider, announces its results for the twelve months to 31 December 2011.
Underlying operating profit *
Underlying profit before tax *
Underlying diluted earnings per share *
Proposed final dividend
Statutory profit before tax
Statutory diluted earnings per share
* underlying profit excludes cost incurred making acquisitions and the amortisation of acquired intangibles
· An excellent year with Group revenue up 15%, underlying operating profit up 11% and underlying earnings per share up 16%
· Specialist Technical, Defence and Offshore Oil divisions all enjoyed strong organic growth
· Divisional management increasingly working together to win multi-skilled contracts, such as the BP Angola contract won post period-end
· Strong results in Offshore Oil helped by the continued growth in the world's new oil provinces and a continuing recovery in North Sea markets
· Defence revenue grew by over 30%, with James Fisher winning an £11m modernisation project for the Swedish Navy's rescue submarine
· Marine Oil, despite tough markets, remained profitable and cash generative
· Cash conversion of 105% and net gearing reduced to 75% at 31 December 2011
Commenting on the results, Chairman, Tim Harris, said:
"James Fisher made excellent progress in 2011, with double-digit growth rates in both revenue and profit. Our largest divisions, Specialist Technical and Offshore, have strong growth records and will continue to be the prime focus for future investment in new equipment and bolt-on acquisitions. The prospects for James Fisher Everard, our tankship business, remain unchanged and dependent, to a large degree, on the state of the UK and European economies. It will improve when the current tonnage overcapacity unwinds but overall this division is of decreasing importance to the Group performance. Trading for 2012 to date has been to management expectations and we continue to be well placed to provide further growth and value for our shareholders."
The shipping industry has been in the headlines recently as freight rates have plunged, but James Fisher's specialist expertise is in demand. Last week, Fisher unveiled a new five-year contract with BP Angola to provide export tanker support services off the coast of the West African country. Fisher will operate three anchor handling tugs, which it will charter, and provide diving services for the mooring operations. No financial details have been released but analysts have calculated that the contract is worth $30m (£19m). This means the contract is a good win and consensus earnings forecasts are likely to rise. The shares, which remain a buy, are trading on a December 2012 multiple of 11.3 times, falling to 10.3 in 2013. The prospective yield is 3%. The Sunday Telegraph´s Questor team says buy.
N+1 Brewin maintained its "buy" rating for James Fisher (FSJ), with a 670p target price. The marine engineering firm's joint venture in Angola was awarded a five year contract with oil and gas giant BP (BP.) and the broker values the deal at 30 million dollars (19.0 million pounds) per year when fully operational. Brewin said that the deal demonstrated the group's ability to take its existing knowledge and apply it to new attractive geographies. The broker also raised its full year pre-tax profit forecast by 0.4 million pounds to 32.4 million pounds for 2012. Shares in James Fisher rose 5p to 530p.
Nick Henry, Chief Executive Officer of James Fisher, said:
"We have worked with BP for many years and are delighted to be extending that relationship into this important contract in Angola. This contract brings together the expertise across the Group in mooring, offshore vessel and diving operations and will involve Fendercare and James Fisher Shipping Services. It reflects the investment put into establishing James Fisher Angola Limited with our partner Bouclier, owned by Marcus Manzengele, and our commitment to the offshore market in Angola."