(Alliance News) - Shares in James Fisher & Sons PLC on Monday tumbled downwards after the company announced further delayed projects, an increase in bad debt risk and a downgrade to guidance for its badly performing Tankships division.
The marine service provider's stock plummeted 30% to 547.00 pence on Monday morning in London.
In response to the largely negative short-term trading outlook, James Fisher highlighted it was reviewing both the group's cost base and balance sheet and was committed to "fix or exit" non-core and underperforming businesses. The plan is aimed at generating proceeds over the next year to cut debt and simplify the business, James Fisher said.
A raft of negative trading updates on the group's businesses included the announcement of a poor performance in September for James Fisher's Tankships division, which as a result now has a more cautious outlook for the full year. Along with that a "recent deterioration in the condition of a financially distressed customer" has increased bad debt risk by around GBP2 million for the company.
In addition, customers of the group's Marine Contracting, Decommissioning & Nuclear businesses have further delayed projects in recent weeks. Projects were previously expected to commence and in some cases finish in 2021 but have been delayed further due to the pandemic.
Despite this, revenue in the third quarter ended September 30 was GBP135.2 million, 7.6% higher than a year earlier and 8.7% higher than the previous quarter. Year to date revenue is 3.9% below a year prior.
James Fisher noted it remained confident in delivering sustainable profitable growth, continued to trade within its banking covenants and had headroom of around GBP100 million against its revolving credit facilities at the end of September.
Looking ahead, the company outlined a cautious outlook: "Notwithstanding some revenue opportunity moving from the fourth quarter to 2022, the board currently expects this to be materially offset by the continuation of challenges the group is currently experiencing with customer demand and the safe mobilisation of teams to work sites."
By Will Paige; willpaige@alliancenews.com
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James Fisher and Sons (FSJ)