James Fisher and Sons Regulatory News (FSJ)

6 March 2013

James Fisher and Sons plc

Preliminary Results 2012

James Fisher and Sons plc ("James Fisher"), the leading marine service provider, announces its results for the year ended 31 December 2012.

* underlying profit excludes separately disclosed items

Highlights:

·; Revenue increased by 18%, underlying operating profit by 14% and underlying earnings per share 15%

·; Strong performance resulting from the Group's strategy to focus on high growth niche marine services markets

·; Specialist Technical benefitted from the BP Angola contract

·; Offshore Oil saw improved market conditions in Norway, growth in Asia Pacific, Africa and South America

·; Marine Oil produced an improved result and remains profitable and cash generative

·; Net debt: ebitda of 1.2 times (2011: 2.1); gearing of 39% (2011: 75%) and strong cash conversion of 132%

·; Sale of non-core TRE business for £25.5m in cash realising a profit of £20.9m

·; The Board is recommending a 10% increase in the total dividend to 17.70p per share (2011: 16.08p per share)

·; Announced today: Acquisition of diving and subsea equipment business Divex Limited for an initial cash consideration of £20 million

Commenting on the results, Chief Executive Officer Nick Henry said:

"James Fisher had an excellent year in 2012, demonstrating the continued success of our strategy to focus on niche marine services in high growth markets and trading to date has been in line with management expectations. This, combined with strong market conditions in Offshore Oil and Specialist Technical, as the offshore oil and gas markets continue to develop at a rapid pace, as well as increasing demand for a range of skills to be supplied as a multi-disciplinary contract offering, leave James Fisher well placed to provide further growth and value for our shareholders."

For further information:

James Fisher and Sons plc (James Fisher)

Full Year Results for the twelve months ended 31 December 2012

Chairman's Statement

Group Results and Dividend

In making my first Full Year statement as Chairman, I am pleased to report that 2012 was another excellent year for James Fisher with revenue up by 18% to £363.3m and underlying profit before tax up by 18% at £35.4m before separately disclosed items and by 57% after such items. With no acquisitions being made during the year, the 18% headline figure reflected purely organic growth, with the Group benefitting from its consistent strategy of focusing on marine services and the high growth markets outside of the US and Continental Europe.

James Fisher's Offshore Oil businesses did particularly well, reflecting strong market conditions and the benefit of the significant investment made in these businesses in recent years. Specialist Technical continued to show double digit growth with our Nuclear business doing well and with the benefit of the new Angola contract showing through. Marine Oil improved as the measures to bring own capacity into line with demand produced benefits. Only our Defence division, as previously flagged, produced a lower result due to the re-negotiation of two of the Foreland charters and to a gap in project work at our submarine rescue business.

Following the sale of The Railway Engineering Company (TRE) in December, year end gearing was reduced to 39% from 75% last year. This figure reflected both the £25.5m proceeds from this disposal and the continued strong cash conversion of the Group at 132%.

The strong trading performance of the Group in 2012 and the continued positive outlook has led the Board to propose a final dividend of 11.83p per share which is 10% up on prior year and which together with the interim dividend of 5.87p makes a total dividend of 17.70p per share for the year (2011: 16.08p per share).

Strategic Highlights

On December 31, the Group sold TRE for £25.5m in cash and realised a gain on disposal of £20.9m. TRE was acquired as part of the Strainstall Group in 2006. Its focus on the rail industry and its rapid growth in recent years led the Board to decide that the time was right for TRE to be sold to a new strategic owner who would take it forward to the next level. The sale achieved good value for James Fisher.

We have today announced the acquisition of Divex Limited (Divex) for an initial cash consideration of £20m. Divex is a global leader in the design, supply and assembly of diving and subsea equipment. The company is a lead supplier to the commercial offshore sector as well as to navies across the globe. It matches James Fisher's strategic criteria well, being a strong niche player with a well established reputation and brand and a broad revenue spread across international markets.

Divex will now form the major part of a new Subsea Division within our Specialist Technical business stream together with our James Fisher Defence submarine rescue unit. By grouping these businesses together we will aim to achieve significant benefits both in terms of market penetration into the commercial as well as defence sectors and of production efficiencies.

Our earnings in Marine Oil have begun to improve as we have reduced capacity to meet contract demand. Over the next two to three years we would expect to make further adjustments to our fleet both in total and between tonnage types. We have therefore decided to recognise the likely book losses that will be incurred as we continue with this process by taking a £9.2m impairment to the value of our ships at year end.

Board and Staff

Tim Harris retired on 31 July 2012. During his ten years as Executive Chairman, James Fisher saw its fortunes transformed with profit and turnover quadrupled and the share price increased by seven times since 2002. The Group was reshaped from its origins as a domestically focused coastal tanker business into the UK's leading marine services business, with its subsidiaries operating worldwide and 60% of revenues coming from outside the UK. The Board would like to express our appreciation to Tim for the great contribution that he made to the Group and wish him well for the future.

With Nick Henry having been a successful CEO of long-standing, the Board decided that the new Chairman should be non-executive. The transition to this corporate structure has gone well, with the Executive team of Nick Henry and Stuart Kilpatrick (Group Finance Director) leading the Company but with the continued active involvement of the Chairman in the key issues.

One of the strengths of James Fisher has been the strong management teams in the Group's subsidiaries. This has enabled the Group to be structured in a de-centralised way, with initiative and entrepreneurial ambition supported and encouraged. I am pleased to say that the transition at Board level has not disrupted this management team which continues to function well and with enthusiasm for the future.

As a service company, our key asset is our people and their professional approach to the business and operating challenges which they face every day, both onshore and at sea. I would like to thank all our staff for their tremendous contribution to James Fisher's continuing growth and success.

Outlook

Over the last several years, James Fisher has pursued a consistent marine service strategy focused on the world's growing regions rather than on the more mature markets of Europe and North America. This strategy has worked well and will remain the focus of our development as the Group moves forward. The strength of the Group's balance sheet enables us to continue to invest in our businesses to strengthen their market position and to boost organic growth. We will also keep opportunities for bolt-on acquisitions under review where these can speed the development of our businesses.

The rapid pace of offshore oil and gas development worldwide means that our Specialist Technical and Offshore Oil divisions are well placed to continue their growth pattern of recent years. The growing scale and scope of James Fisher's service offering means that these divisions have a spread of income across all phases of the production cycle from development, through production to decommissioning. Their engineering and service skills have direct application not only to the oil and gas sector but to the nuclear; offshore renewables and specialist defence sectors. These skills are increasingly interdisciplinary and can be applied to major contract opportunities, where we currently see strong demand. The Board is conscious of the increased risks which come with these types of contract so we will hold to a measured pace of development in this area.

Our Marine Oil division has improved its results as a result of the management action taken in recent years. By matching our capacity to the changing requirements of our customers as we move forward, this division should be able to maintain and hopefully improve its trading performance.

Trading in 2013 to date has been to management expectations and we continue to be well placed to provide further growth and value for our shareholders.

Charles Rice

5 March 2013

Operating and Financial Review

James Fisher and Sons plc is reporting another excellent year in 2012 with the main financial measures showing strong double digit growth.

Segmental result

Strategy

James Fisher has pursued a consistent strategy in recent years of driving growth in its marine services with focus on the fast growing regions of the world rather than the more mature markets which prevail in Europe and North America. The Company has developed a range of niche marine operational and engineering services which it aims to grow internationally. Such niche services typically command margins in excess of 10%, returns on capital in excess of 15% while being cash generative.

The success of this strategy has seen the marine service revenues grow by a compound annual growth rate of 36% in the last eight years, and 60% of Group revenues now originate from outside the UK, compared to 37% five years ago.

Having developed a broad range of such niche capabilities in the marine and offshore markets, the Group can now integrate these into contract packages for our major customers. Demand for this type of service has been expanding particularly in the fast growing regions of Asia Pacific, Africa and South America. The Group intends to build this business going forward in a balanced way, taking into account the operational and country risks involved.

Organic development has driven over 70% of our growth in profits in the past eight years. Investing in our businesses to continue their development will remain our main focus going forward. We will also continue to evaluate for further bolt-on acquisition opportunities which meet our niche criteria and where these will strengthen and broaden our range of services to our multinational customers.

The Group has a strong and stable divisional management team who have a wealth of expertise and experience in their fields. Their entrepreneurial drive combined with the commercial and financial support from the centre has produced this consistent growth.

Specialist Technical

2012 underlying profit: £22.4m (2011: £19.8m)

The Specialist Technical Division had another strong year with profits up by 13%. Our ship to ship services achieved further organic growth and the underlying margins of our niche businesses were maintained. The year also saw the start-up of our five year contract with BP in Angola as well as a major short-term diving support contract there in the first half. Both businesses involved a high proportion of sub-contracted costs, (mainly ship charters) leading to a reduction in margin for the Division, particularly in the first half.

James Fisher Nuclear also had a strong year producing good profit growth. In the first half of the year it benefitted from the completion of a contract to install detection equipment at the London 2012 Olympics, the scope of which increased and again meant that the division proportionately showed stronger growth in the first half. Whilst this contract will not reoccur in 2013, our nuclear business continues to benefit from improved market conditions in the nuclear power industry and began the year with a stronger order book than in 2012.

On 31 December 2012 the disposal of The Railway Engineering Company (TRE) to Hitachi Rail was completed for £25.5m in cash. TRE was acquired by the Group in 2006 as part of the Strainstall acquisition and for the year ended 31 December 2012 had revenue of £7.0m and an underlying operating profit of £3.1m. The Group reported a gain on sale of TRE of £20.9m which is separately disclosed in the Consolidated Income Statement by virtue of its size. Whilst TRE was non-core to marine services, it had clear growth potential which has been realised in recent years. The Directors considered that the timing was now right for the business to move to a new strategic owner.

The prospects for further growth within the Specialist Technical division remain strong and we will continue to support this with investment in both people and equipment.

Offshore Oil

2012 underlying profit: £17.2m (2011: £12.8m)

The Offshore Oil Division had an excellent year with revenue increasing by 17% and profits by 34%. This strong performance reflected the improved market conditions in the North Sea, particularly in Norway, and the continued growth due to contract gains in Asia Pacific, Africa and South America. The improved margin reflects the improvement in our rental businesses in particular, with the underlying margins of our other activities remaining consistent.

The Division is beginning to benefit from oil majors upgrading the standard of equipment used for reasons of improved safety performance. This has seen contract gains for Norwegian standard equipment on fields outside of Norway for the first time. It is also improving prospects for ScanTech Offshore in regions such as South America and Africa.

A further £12.9m of capital was invested in 2012 to support and drive further organic development within this division. With the continued high oil price, prospects for further growth remain and the Group will continue to support this with further investment to ensure demands for our niche products is met.

Defence

2012 underlying profit: £2.4m (2011: £5.5m)

Profit in the Defence division reduced in 2012 for two reasons. Firstly, as previously reported, profits from the Group's 25% interest in Foreland, the private finance initiative, reduced by £1.5m due to lower income from the two vessels which are chartered commercially. Secondly, delays to contract awards in the second half impacted profitability within the subsea projects team.

During the year, the division successfully completed a twelve month project to refurbish the Swedish navy's submarine rescue vehicle (URF) which was commissioned in the second half. The submarine rescue contracts for the Singaporean and Australian navies continued to perform satisfactorily. A major rescue exercise for the Australian navy was completed in the first half and there are prospects for further growth in the Asia Pacific region.

Marine Oil

2012 underlying profit: £2.4m (2011: £1.1m)

Marine Oil produced an improved result and remains both profitable and cash generative. This reflects the progress made in the past 2 years in reducing capacity to match the lower contract volumes around the UK and Irish coasts, rather than an improvement in the wider tanker global market which continues to have over capacity and weak spot rates.

In January 2013 a deal was completed to sell mt. Steersman on behalf of her owner and thereby bring forward the completion of her charter from March 2013. This reduces the number of vessels operated in the fleet to 17 and further mitigates the risk of surplus capacity.

The global market for the sale of surplus tonnage has not improved and shows no signs of doing so in the near future. Whilst the trading value of our specialist tankers in their niche operation remains sound, it is possible that if there is no recovery in the sale and purchase market, future vessel sales could be at below current book values. We have therefore concluded that it would be appropriate to make an impairment against this possibility and a separately disclosed impairment provision has been made, reducing the divisional assets to £32.8m which represents 12% of the Group total.

Separately disclosed items

To provide better information on the underlying trading performance, the Group has identified and separately disclosed certain items in reporting the results for the year. Total items separately disclosed amounted to a gain of £11.4m (2011: loss of £0.3m) comprising a gain of £20.9m referred to above for the sale of TRE less the vessel impairment of £9.2m and the amortisation of acquired intangibles of £0.3m (2011: £0.3m).

Interest

Net finance costs are as follows:

Interest on bank borrowings was in line with previous year as slightly higher average borrowings were partly offset by a lower overall cost of borrowing. The unwind of the discount on defined benefit schemes relates to the Group's Shore Staff scheme which was closed to new entrants in 2001 and to the industry wide Merchant Navy Pension Fund (MNOPF) where the Group has an obligation by virtue of its long history in the shipping industry. The charge to the Income Statement in 2012 decreased due to a lower discount rate applied to the scheme liabilities. Accounting for defined benefit schemes is changing in 2013 to align the return from assets held in the scheme with the discount rate applied to liabilities. Whilst this has no cash flow impact for the group, the potential adverse impact on the income statement is around £0.3m per annum.

Taxation

The effective tax rate on underlying profit before tax was 19.1% (2011: 19.0%) The rate is lower than the standard UK rate of 24.5% due to the Group having operations in certain overseas countries which have lower tax rates than the UK and due to its tanker fleet within Marine Oil which is taxed on a tonnage basis rather than on profitability.

Earnings per share

Underlying diluted earnings per share, which excludes separately disclosed items, increased by 15% in the year to 55.7p per share. This is lower than the increase in underlying profit before taxation due to an increase in non-controlling interests, which represent minority shareholdings, in mainly overseas businesses. Diluted earnings per share after separately disclosed items increased by 65% to 79.1p per share (2011: 48.0p).

Dividends

The Board are recommending a 10% increase to the final dividend for the year to 11.83p per share (2011: 10.74p), which makes a total for the year of 17.70p per share (2011: 16.08p). The final dividend will be paid on 10 May 2013 to shareholders on the register on 12 April 2013. Dividend cover based on underlying earnings was 3.1 times (2011: 3.0 times).

Cash flow and borrowings

Net borrowings decreased by £35.7m in the year due to a cash inflow from operating activities of £47.5m, a net inflow from investing activities of £2.5m and outflows for dividends and interest of £14.0m. The Group's cash conversion, the ratio of operating cash to operating profit was 132% (2011: 105%). At 31 December 2012, the ratio of net borrowings (including guarantees) to earnings before interest, tax, depreciation and amortisation (EBITDA) was 1.2 times (2011: 2.1 times). Net gearing, the ratio of net debt to equity, was reduced to 39% (2011: 75%) due to strong cash conversion and the proceeds on sale of TRE which were applied to reducing debt.

A small group of relationship banks provide bilateral facilities to the Group on an unsecured basis over a 3-5 year term. During the year the Group agreed a £20m, four year revolving credit facility with Handelsbanken, a four year, £30m facility with Lloyds Bank and renewed a £20m, five year facility with HSBC Bank plc. At 31 December 2012, the Group had £78.0m (2011: £38.6 m) of undrawn facilities of which £65.6m (2011: £32.3 m) were committed.

Pensions

The majority of the Group's pension arrangements are defined contribution arrangements where the company's liability is limited to the contributions it agrees on behalf of each employee. The Group has a small defined benefit scheme in Norway and a UK Shore Staff Scheme which closed to further accrual on 31 December 2010. As a consequence of its history in shipping the Group is required to contribute to industry-wide Merchant Navy Pension Funds. The trustees of the Officers fund (MNOPF) are in the process of conducting a triennial valuation of the scheme's deficit. It is not yet possible to reliably estimate the amount of our obligation but it is expected to increase our commitment possibly by a quarter of the current liability.

Following a Court process in 2010 and 2011, the trustees of the Ratings fund (MNRPF) were given permission to extend the requirement for deficit contributions beyond current employers to both current and past employers. In November 2012, the trustees of the MNRPF wrote to the Group asking for comment on its proposed methodology for future deficit contributions. The trustees expect that ratification from the Court of its proposal will not be before mid 2014 and the extent to which James Fisher will be required to make additional contributions will not be known with certainty until then.

Total defined benefit pension deficits at 31 December 2012 were £27.1m (2011: £30.1m). The annual instalment on pension schemes in 2013 is expected to be £4.6m (2012: £4.8m) subject to the outcome of the triennial valuation referred to above.

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2012

CONSOLIDATED BALANCE SHEET

As at 31 December 2012

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2012

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

For the year ended 31 December 2012