James Fisher and Sons Regulatory News (FSJ)

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 profit excludes cost incurred making acquisitions and the amortisation of acquired intangibles

Highlights:

·; 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."

For further information:

James Fisher and Sons plc (James Fisher)

Full Year Results for the twelve months ended 31 December 2011

Chairman's Statement

Introduction

James Fisher and Sons plc has had another excellent year in 2011 with the main financial measures improved by between 11% and 16%.

Cash conversion was also strong at 105% and net gearing was reduced to 75% at 31 December 2011 from 85% at the previous year end. This was despite an investment of £17.6 million in new equipment to generate further organic growth.

Strategy

Over the last five 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. These marine service skills consist of specialist engineering and operational capabilities which characteristically command net margins in excess of 10% and returns on capital employed of at least 15% pre tax and are cash generative. In 2011 over 60% of the Group's revenue is derived from outside the UK compared to 35% five years ago.

The advantages of our strategy are as follows:

·; The growing marine service markets on which we are focused are vast, fast growing and with less mature competition. This is particularly true in the Asia Pacific region.

·; We do relatively little business in North America and Continental Europe and have therefore been more sheltered from their economic problems.

·; The growing proportion of non UK operations has helped reduce our effective tax rate, now less than 20%, although recent UK tax reductions have also helped.

The Group also benefits from a strong divisional executive team, most of which has been in place for five years. Its entrepreneurial skill, together with the capital and commercial support from the centre, has helped drive strong organic growth. Increasingly Group companies are working together to win larger contracts, mainly overseas, which is an important strategic focus for our management team going forward.

Specialist Technical

2011 underlying profit £19.8 million (2010 £18.5 million)

Specialist Technical enjoyed a strong second half with profits up 22%, due to robust organic growth. Annual profit growth was good, up 7%, particularly pleasing considering the strong comparator in the first half of 2010 which experienced an exceptionally strong oil contango market, benefiting our ship to ship oil transfer business. Divisional margins at 14.0% were slightly down on 2010 (15.8%), but this reflected a greater use of chartered-in vessels for specific projects rather than any underlying margin erosion. A good example is the recent BP Angola contract, the award of which we announced in February 2012. We shall be managing the oil offtake operations from an FPSO (floating production, storage and offloading) unit with three chartered tugs, as well as providing a number of related diving and maintenance services. This contract also illustrates how the Group divisions are increasingly working together to win larger contracts. Among the decisive elements in our offer were:

·; BP's long relationship with James Fisher and Fendercare

·; the Group's established base in Angola, originally developed for Scan Tech Offshore

·; James Fisher's long history and experience in operating coastal tankers through James Fisher Everard

James Fisher Nuclear (JFN) is also included in this division and produced a significantly better result in 2011 with the potential for more improvement to come. JFN is beginning to benefit from the investments made in prior years and from an increasing recognition of its core capabilities of non destructive testing and remote handling in the complex contracting environment prevalent in the nuclear industry. JFN also worked closely during the year with James Fisher Defence (JFD) and Scan Tech in Norway, primarily using its remote handling skills.

The prospects for further organic growth in this division remain excellent and we shall continue to support it with suitable capital investment.

Offshore Oil

2011 underlying profit £12.8 million (2010 £11.0 million)

Divisional revenue for the full year grew by 22% compared with 2010 and divisional profit by 16%. There was a slight reduction in margin reflecting a growing proportion of the business coming from services, as opposed to straight rental which enjoys higher margins owing to its greater use of capital. This strong performance was the result of two positive features - strong organic growth in the new oil provinces of the world and the continued recovery of North Sea markets, supported by the capital investment we have made, and continue to make.

The division's growth into new markets is primarily being led by our Scan Tech Offshore and RMSpumptools brands. Scan Tech Offshore is now an established supplier to the offshore industry in South America, Australia and West Africa and during 2011 RMSpumptools, which sells worldwide, set up an assembly base in Singapore to support its Asian coverage.

The positive trends which helped the 2011 result appear set to continue, supported by the world's proven demand for oil. Our specialist brands are increasingly winning business and gaining recognition worldwide and we shall continue to support them with further investment.

Defence

2011 underlying profit £5.5 million (2010 £5.3 million)

While divisional revenue in 2011 grew by over 30% to £28.1 million, the divisional profit remained flat at £5.5 million mainly because of extra expenditure on Subsea business development and sales. James Fisher won a number of significant projects during the year including the modernisation contract for "URF", the Swedish Navy's submarine rescue vehicle - which was announced in May and is now well underway - and the continued development of our "swimmer delivery" vehicle which is well advanced. We revealed the prototype in September at the DSEi (Defence and Security Equipment International) exhibition in London and it attracted much international attention. Our existing submarine rescue contracts in Singapore, Australia and the UK performed well and met their operational and financial targets in 2011.

Developments on the Surface Ship side were less encouraging in 2011. The Government so far has favoured other priorities to surface ship outsourcing. At Foreland Shipping Limited, we commented at the half year on the uncertainty over the charter rate at which two of its roll on roll off vessels would be fixed. The vessels were chartered in January 2012 and current market rates are lower than the previous charter. Our share of Foreland's result is likely to reduce by around £1.5 million per year as a consequence.

We have great confidence in the prospects for our Subsea operations which have a growing international reputation and outreach and into which we are investing to ensure they meet their potential. We are less positive about the prospects for surface ship outsourcing. We have the skills needed and will participate if there is a realistic prospect of success.

Marine Oil

2011 underlying profit £1.1 million (2010 £0.7 million)

Marine Oil is the division most exposed to the UK and Europe's current economic problems and this is reflected in the results which were only slightly better than in 2010. There is still overcapacity and a weak spot market in Europe. However, James Fisher Everard, unlike most of world shipping today, is profitable and cash generative although clearly the overall return is still unacceptable. Our policy is to match fleet capacity to our long term customers contractual requirements which have been declining, particularly to Ireland. To this end, we have sold mv Audacity (3,000 tonnes) and negotiated early cessation of the charters for mv Pembroke Fisher (15,000 tonnes) and mv Chartsman (6,000 tonnes). We now only have 16% of the Group's assets in this business and our target is to reduce this to less than 10%. However, it remains relevant that Tankships is the origin of our marine service skills and is a strong proof point of marine competence, as the BP Angola contract win demonstrated.

Board and staff

Anthony Cooke retired from the Board and his role as Senior Non Executive Director and Chairman of the Audit Committee on 30 December 2011 after ten years service. He has been replaced as Senior Non Executive Director by Charles Rice and as Chairman of the Audit Committee by Malcolm Paul. I would like to thank Anthony for his good advice during a very successful period for James Fisher and for the Board.

Simon Harris resigned from the Board and from his role as Chairman of James Fisher Defence (JFD) on 13 February 2011 after eight years on the Board. I would like to recognise and thank Simon for his role in building up the JFD team into the world leading organisation it is today.

The Group is growing fast and this throws up challenges and opportunities for many throughout the Group every day. It is gratifying to see us increasing our employment of young people, particularly young graduates when the background economic climate is so uncertain. I would like to recognise and thank all staff for their contribution to the Group's success. In a service company like James Fisher people will always be the key asset which makes the difference.

Financial

The Group continues to receive strong support from its bankers and has been able to renew facilities and obtain new ones on competitive terms. In November it agreed a new facility with DBS Bank of Singapore, reflecting our strong focus on the Asia Pacific region.

The current low interest rate environment is detrimental to the calculation of pension fund deficits because of the low discount rates used to calculate future obligations. During 2011 this effectively meant that, despite £4.5 million of cash contribution during the year, the reported deficits at the year end effectively remained unchanged.

As an export orientated company James Fisher benefits from a strong dollar. Balance sheet US dollar exposure is hedged.

Summary and Outlook

Over the last five 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. As a result the Company's growth record has been strong, with organic growth the key component, and we have avoided much of the downside from the economic challenges witnessed since 2008. We have stable and experienced senior and divisional management teams which have been responsible for the successful execution of this strategy.

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.

JFD's Subsea activities are promising and we are investing in more business development expenditure to increase sales and penetration worldwide. They have the potential to become a significantly larger business. The prospects for management of surface ships is less promising, partly due to the protracted and costly bidding process involved. We have indicated a deterioration in Foreland's profit of around £1.5 million in 2012 but would expect to compensate for it elsewhere. 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.

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2011

CONSOLIDATED BALANCE SHEET

As at 31 December 2011

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2011

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

For the year ended 31 December 2011

NOTES TO THE PRELIMINARY RESULTS

1. General information

Basis of preparation of group accounts

In accordance with EU law (IAS Regulation EC 1606/2002), the preliminary results have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the EU as at 31 December 2011 (adopted IFRS), International Financial Reporting Interpretations Committee (IFRIC) interpretations and those part of the Companies Act 2006 applicable to companies reporting under IFRS.

The accounting policies are consistent with those presented in the annual report for 2010 with the exception of the new policies given below.

In the current financial year the following new statements have been adopted for the first time;

Amendments to existing standards:

IAS 24 Related Party Disclosures (revised 2009)

Improvements to IFRS 2010

Interpretations:

IFRIC 14 Prepayments of a Minimum Funding Requirement

The adoption of these standards and interpretations had no impact on the Group.

Following the closure of its principal defined benefit scheme in 2010 the Group has changed its accounting for the cost of defined benefit pension schemes. The charges to the income statement now relate mainly to the unwinding of the discount rate on the scheme liability and the expected return on investments. These elements are more similar to a financing cost than an operating expense in nature and consequently these costs are now included as part of finance costs rather than operating profit where they have previously been reported. The impact of this change is explained in note 3.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the financial statements.

The Group financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010. Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2011.

The annual report and accounts for the year ended 31 December 2011 will be posted to shareholders in early April 2012.

The results were approved by the Board of Directors on the 5 March 2012.

Acquisitions

On 1 January 2011 the Group acquired an additional 5% interest in its Nigerian based joint venture Fender Care Nigeria Limited (FCN) for a consideration of £1,201,000. Following the acquisition the Group has a 45% interest in this joint venture. FCN provides ship to ship transfer services in the East and West Africa region. Goodwill of £721,000 arose on the acquisition of this interest.

On 8 November 2011 the Company acquired a 49% of the issued share capital of James Fisher Angola Ltda for a consideration of £54,000. James Fisher Angola meets the criteria for recognition as a subsidiary on the basis of a shareholder agreement which enables the Group to exercise control over the economic benefits arising from the activities of the company. James Fisher Angola is engaged in the provision of specialist services to the Oil production industry in Angola.

Disposals

On 31 March 2011 The FCN joint venture disposed of 20% of its wholly owned subsidiary, Fender Care East Africa Limited for a consideration of $325,000. The Group's share of the profit on disposal of this interest is included in equity.

Taxation

The effective tax rate on profit before tax, intangible amortisation and acquisition costs is 19.0% (2010: 22.7%). Including the impact of intangible amortisation, acquisition costs and grossing up for tax incurred by joint ventures and associates, the overall tax rate was 19.1% (2010: 23.2%).

This lower than standard rate is due to the element of Group profit derived from overseas and the Marine Oil Services business only incurring a nominal levy due to the UK Tonnage Tax regime. There is no provision for deferred tax on accelerated capital allowances for activities which fall within tonnage tax.

Dividends

The Board are recommending a final dividend for the year of 10.74p per share (2010: 9.68p per share), making a total for the year of 16.08p per share (2010: 14.72p per share). This represents an increase of 9% on 2010. The final dividend will be paid on 11 May 2012 to shareholders on the register on 13 April 2012. Dividend cover was 3.0 times (2010: 2.7 times). The Sir John Fisher Foundation owns approximately 25% of the Ordinary shares and its income is distributed to charitable causes with special regard to those based in and for the benefit of the people living in and around Barrow in Furness, Cumbria, UK.

Cash flow and borrowings

The Group is focused on achieving a balance between investing for future growth either organically or from investment in new businesses and maximising its cash generation. Net borrowings decreased by £1.5 million in the year as £27.1 million was generated from operating activities which was utilised on investing activities (£11.1 million), interest paid (£4.4 million) and dividends to shareholders (£7.5 million). At 31 December 2011, the ratio of net borrowings (including guarantees) to earnings before interest, tax, depreciation and amortisation (EBITDA) was 2.1 times (2010: 2.5 times).

Net gearing, the ratio of net debt to equity was 75% (2010: 85%). The majority of James Fisher's borrowing is with a small group of relationship banks that provide bilateral facilities on an unsecured basis over a 3-5 year term. The Group's interest cost increased by £0.7 million in the year as the more recently agreed loan facilities bear higher margins than those loans that they have replaced.

At 31 December 2011, the Group had £38.6 million (2010: £33.1 million) of undrawn facilities which £32.3 million (2010: £26.1 million) were committed.

Principal risks and uncertainties

The following is a summary of the principal risks and uncertainties agreed by the Board: contractual risk, economic environment, recruitment and retention of key staff, reputational risk for operational incidents, financial risk of interest rates and foreign exchange and pensions. A full description of these risks and the mitigation actions taken by the Company will be provided in the 2011 Annual Report.

2. Segmental Information

Operating segments

The following tables present revenue and profit and certain asset and liability information regarding the Group's operating segments for the years ended 31 December 2011 and 2010.

Information on operating segments relating to 2010 has been revised to reflect the change in accounting for pension costs referred to in note 1 above. Segmental information has also been revised to transfer certain shipping service activities relating from Specialist Technical Services to Marine Oil. The effect for the year ended 31 December 2010 is to increase the segmental profits attributable to Specialist Technical Services by £581,000 and reduce the segmental profits attributable to Marine Oil by the same amount.