James Fisher and Sons Regulatory News (FSJ)

29 June 2021

James Fisher and Sons plc

Capital Markets Event and Pre Close Trading Update

James Fisher and Sons plc ("James Fisher", the "Company" or the "Group"), the leading marine services provider, will today hold a virtual Capital Markets Event in which it will present its new strategy to drive performance and improve returns.

Pre Close Trading Update

Offshore Oil has continued to perform well, with tendering and contract wins in oil and gas decommissioning projects growing strongly. There are encouraging signs of a return to more normalised volumes in Tankships and the Specialist Technical division is trading in line with management's expectations. In Marine Support, the ship-to-ship transfer market remains challenging and is currently trading below our previous expectations, however we are seeing further improvements in Marine Contracting with recent wins in offshore wind projects at St. Brieuc and Fécamp off the French coast and Sofia in the Dogger Bank.

The Group has maintained its focus on managing net debt. As anticipated, H1 will show a working capital outflow. This is principally due to larger projects within the Specialist Technical division moving towards milestones and invoicing in H2.

The Group continues to believe that it is on track to deliver improved underlying operating profit* over that achieved in 2020, with profits anticipated to be more weighted to the second half of the year than historically. The new strategy announced today is designed to begin realising the inherent potential of the Group for this and future years. 

Capital Markets Event

The event will include introductory remarks from Angus Cockburn, Chairman, and presentations from Eoghan O'Lionaird, Chief Executive Officer; Duncan Kennedy, Chief Financial Officer; Robin Stopford, Group Head of Corporate Development; together with the business leaders of JFD, James Fisher Marine Contracting and Fendercare.

James Fisher's new strategy aims to refocus the Group and reinforce its competitive advantages to deliver value to all stakeholders. It will do this by:

· embarking on a purpose-led and values driven journey to drive internal alignment and engagement;

· bringing stakeholders into the heart of the Company to create an intrinsically sustainable business and improving all areas of ESG;

· upgrading leadership talent, enabling effective decision making where it counts;

· driving operational excellence through a divisional structure, improving control and governance;

· embedding a new capital allocation process and risk management culture;

· advancing project management and commercial excellence processes across the whole Group; and

· refocusing the portfolio on niche sectors within its chosen markets, addressing underperforming assets and businesses and accelerating investments into responsible energy transition.

The new strategy will focus on:

· growing a portfolio of niche businesses with leading market positions and strong barriers to entry;

· maintaining focus on attractive and growing segments in marine, energy and defence markets;

· reinforcing internal processes to support sustainable organic growth, margin expansion and increased shareholder returns; and

· engaging the Group's wider stakeholder group for mutual benefit.

Further, the Group's capital allocation policy will be to:

· invest in driving sustainable profitable growth;

· increase exposure to energy transition;

· reduce leverage - in the short term through the sale of non-core assets; and

· reintroduce a progressive and sustainable dividend policy at the right time.

Medium term financial targets

It is expected that the Group's financial framework and capital allocation policy will achieve:

· underlying operating margin* above 10%;

· ROCE** above 15%;

· net debt / EBITDA leverage of between 1.0 - 2.0x.

Eoghan O'Lionaird, Chief Executive Officer, commented:

"Today, James Fisher's Board and executive management team is setting out its Purpose 'to pioneer safe and trusted solutions to complex problems in harsh environments, to create a sustainable future'. We are excited about our new holistic and purpose-led strategic direction, which encompasses all stakeholders and will create an intrinsically sustainable business.

"We have reset our strategy to reinforce our strengths and realise our full potential. This strategy leverages the Group's fundamental strengths in marine services, with a renewed focus on driving better future performance and returns for all stakeholders. Our goal is to improve the quality of our business by focusing on structurally growing markets, improving operating margins and returns, and sustainably delivering enhanced value for all our stakeholders."

The virtual event will begin at 2.00pm and will be made available on the Group's website www.james-fisher.com as soon as practicable after the event.

For further information regarding the event, please contact Becky West at FTI Consulting - becky.west@fticonsulting.com

Contacts

* 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. Underlying operating profit margin is defined as underlying operating profit divided by revenue.

** 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. Capital employed is defined as net assets less right-of-use assets, less cash and short-term deposits 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.