James Fisher and Sons Regulatory News (FSJ)

17 Mar 2009 07:00



17 March 2009

James Fisher and Sons plc (James Fisher)

Full Year Results 2008

James Fisher, the UK marine services provider, announces results for the Full Year 2008.

	2008	2007	% change
Group revenue	£233.6m	£182.0m	+28%
Profit from operations*	£27.5m	£21.5m	+28%
Profit before tax*	£24.2m	£19.2m	+26%
Basic earnings per share*	38.10p	32.85p	+16%
Total dividend per share	13.01p	11.41p	+14%

* before separately disclosed items

STATUTORY	2008	2007	% change
Profit from operations	£28.1m	£21.6m	+30%
Profit before tax	£23.6m	£19.1m	+23%
Basic earnings per share	36.94p	32.66p	+13%

Highlights

Commenting on the results, Chairman, Tim Harris, said:

"2008 proved to be an excellent year for James Fisher. Group revenue and profit from operations were both up strongly and, once again, our cash flow was impressive. The key to our performance was good organic growth in the marine support divisions of Offshore Oil, Specialist Technical Services and Defence.

"It is difficult to comment too definitively in an economic climate which is changing rapidly and mainly for the worse. However the immediate outlook for the divisions has not changed from last year and the Company in 2009 is trading to management expectations. On present evidence the Company is well placed, with a proven track record, to continue to produce good growth and further value for our shareholders."

For further information:

James Fisher and Sons plc Tim Harris, Chairman 020 7614 9508

www.james-fisher.co.uk Nick Henry, Chief Executive Officer

Michael Shields, Group Finance Director

Financial Dynamics Richard Mountain/Sophie Kernon 020 7269 7121

  Preliminary results for the year ending

31 December 2008

Chairman's Statement

Highlights

2008 proved to be an excellent year for James Fisher. Group revenue and profit from operations were both up by over 28%, profit from continuing activities before tax by 23% and adjusted earnings per share by 16%. Cash flow was again strong and the year-end gearing was 94% of which 19% related to the working capital absorbed by the Singaporean Submarine Rescue Service which will be recovered on its commissioning into service in the first half of 2009.

The key to the strong profit performance was organic growth in the marine support divisions of Offshore Oil, Specialist Technical Services and Defence. As flagged at the half-year, the Marine Oil division's results were disappointing, the result primarily of operational problems relating to the introduction of new tonnage rather than a shortfall in demand.

Divisional operating profit growth

	Divisional operating profit			Growth *
	2008 £m	2007 £m	% change	organic	acquisition
Offshore Oil Specialist Technical Defence Marine Oil	12,702 9,598 4,484 5,982 32,766	9,213 5,614 3,002 8,605 26,434	+ 37.9% + 71.0% + 49.4% - 30.5% + 24.0%	74% 90% 100% n/a	26% 10% - n/a

* Organic growth is the difference between actual profits earned and profits earned by the entity in the corresponding period prior to acquisition.

Recognising last year's strong performance and reflecting the ongoing prospects for the Company, the Board proposes to pay a final dividend of 8.65 pence per share, an increase of 15% payable on 15 May 2009 to the shareholders on the register at 17 April 2009.

Company strategy in the credit crunch

James Fisher's consistent strategy since 2002 has been to use its core expertise of marine operational and engineering skills based on its Marine Oil division, to invest in and then generate organic growth from niche service businesses in the marine sector. The marine support businesses typically enjoy strong market positions providing specialist engineering based services, with margins over 10%, pre tax returns on capital employed of over 15% and good cash generating ability. This strategy has proved to be most successful in the favourable trading conditions experienced since 2002 - this section considers its resilience to the more challenging trading conditions prevailing today.

In a credit crunch it is appropriate to start with cash and liquidity. The Company enjoys good, long-term relationships with a wide range of British banks and it has recently finalised a new facility with Barclays Bank PLC for £25 million which will allow it to pursue further expansion opportunities. It has strong credit lines and plenty of headroom on its banking covenants. As already indicated, the delivery of the Singaporean Submarine Rescue Service in the first half of 2009 which we have funded during its construction, will have a materially positive effect on reported gearing. In real terms, the most negative effect of the present economic problems has been to create or increase pension fund deficits, the quantification of which is made volatile under international accounting rules. It is worth noting that their main effect is on reported gearing not liquidity itself.

In assessing resilience to recessionary pressures, it should be emphasised that James Fisher is a service business and as such far less exposed to the swings in asset values which have created adverse headlines about the international shipping and offshore markets, where both ship and rig values have dropped dramatically. In contrast it earns its living by providing specialist services to shipping rather than ship trading and from the oil that its customers continue to produce. As a specialist niche services provider there is also much greater protection against price erosion than in a commoditised market.

The Group's business is broadly based both by activity and geographically. For example, its offshore businesses are more focused on production and maintenance than exploration. It has significant North Sea activities but now earns much of its profit from elsewhere in Asia and Africa. It has very little direct exposure to North America or Russia.

Finally, a weak pound is of overall benefit to James Fisher because a large part of the revenue of its Offshore and Specialist Technical divisions is expressed in US dollars or Norwegian kroner. This is partly offset by the internal hedge of Marine Oil's US dollar bareboat charters and its crewing, about half of which is in Euros. In short, a weak pound is positive news for the marine support divisions but this is tempered to some extent by a negative impact on Marine Oil.

These factors confirm that the Company's existing strategy is still valid in the present credit crunch and gives it a good degree of resilience in an economic downturn.

Offshore Oil - 2008 Divisional Result £12.7 million (2007 £9.2 million)

Divisional profits grew by 37.9% over last year with organic growth accounting for 74% of the increase and the 2007 acquisitions of Pump Tools Limited and Buchan Technical Services Limited responsible for the remaining 26%. Divisional margins were 26.3% in 2008 compared with 30.4% in 2007, the reduction reflecting the relative increase in non hire revenue rather than any deterioration in underlying margins. The divisional return on capital employed including goodwill improved to 16.4% from 15.8% in 2007 despite the investment in new premises in both Scotland and Norway.

Both James Fisher Offshore (Aberdeen) and Scan Tech AS (Norway) had successful years supplying lifting, compressor and other specialist equipment to their respective sectors of the North Sea and increasingly using their North Sea skills further afield in the new oil regions of the world. Typically, they provide specialist equipment which is customised for particular purposes, often with personnel to support its operation. A new sector entered by James Fisher Offshore in 2008 was the provision of heavy lifting equipment for the installation of wind farms.

The downhole cluster which was formed by the merger of existing business Remote Marine Services with Pump Tools Limited, after its acquisition in October 2007, creating RMS/Pumptools, had a particularly successful year in 2008. It designs, produces and sells worldwide specialist electrical submersible pump equipment which improves the productivity of oil wells.

We continue to support the good organic growth record of this division by investment in new equipment and new facilities, particularly in Norway where we are halfway through the construction in Stavanger of a new works into which will be consolidated all of our Norwegian operations. In March 2009 part of the Reanco Team AS business which was focused on the fabrication of offshore rig living quarters was sold for £1.2 million, the book value, as it did not represent a core interest. We continue to look for "bolt-on" acquisitions to supplement or strengthen further our market position. Trading and the immediate outlook to date remain largely unaffected by the present uncertain economic climate.

Specialist Technical - 2008 Divisional Result £9.6 million (2007 £5.6 million)

This division consists of three clusters - FenderCare, Strainstall and Nuclear. It produced particularly good results in 2008 with the divisional profit 71% up over that for the previous year. Strong organic growth accounted for 90% of this uplift with acquisition growth responsible for the remaining 10%. Margins improved to 12.8% in 2008 from 9.1% in the previous year, with the stronger US dollar helping in the second half of 2008. The division's return on capital improved to 16.9% in 2008 from 13.2% in the previous year.

The FenderCare cluster provides a full range of mooring equipment for ships and submarines. It is also the global market leader in providing ship to ship oil transfer services. FenderCare's strong growth was the result of three main factors - increased market share, a growth of its global activities particularly in the Middle East and Asia and the stronger US dollar.

Strainstall's core expertise is the design, production and application of strain and similar gauges. It produced a strong result in 2008 both from organic growth and its JCM Scotload Limited acquisition in February 2008, which has settled in well. Overall Strainstall's market position has similarities to FenderCare's - it is a market leader in the fields in which it operates and it is expanding in the Middle Eastern and Asian markets. It too benefits from a stronger US dollar. 

The Nuclear cluster produced a more positive result in 2008 with an improvement in both the general decommissioning climate and its own performance. JFIMS, the inspection and measurement start-up, again performed well. This cluster is better poised for a growth in profitability and value creation than for some time.

Overall, the Specialist Technical division continues to perform very well. We shall invest further both in working capital and long-term capital assets to support its excellent growth record. We shall also continue to seek further "bolt-on" acquisitions. Trading to date and the immediate outlook remain largely unaffected by the generally unfavourable economic climate.

Defence - 2008 Divisional Result £4.5 million (2007 £3.0 million)

The division's result was dominated in 2008 by the Korean and Singaporean Submarine Rescue Service contracts which were the main reasons for the 49.4% increase in profit, apparent diminution in margin to 15.3% and a small decline in the return on capital employed to 20.2%, compared with 22.7% in 2007.

The Korean submarine vessel was completed on time and within budget and commissioned into service in Korea just before the year end. A 4% final instalment remains to be received pending the completion of training and the final delivery of spares.

The Singaporean submarine vessel has also been completed and is in Singapore where she has successfully completed her initial sea trials. It remains for her to be installed on the mother ship, Swift Rescue, which is nearing completion by our Singaporean partners, Singapore Technologies Marine Ltd, prior to delivery of the fully integrated rescue service.

On commissioning by the Singaporean Navy, the integrated rescue service will be operated by a joint venture company, First Response Marine Pte Ltd, owned equally by Singapore Technologies Marine Ltd and ourselves and will receive an annual service payment until 2029 for the operation of the system. In addition, on commissioning which is anticipated before 30 June 2009, we shall receive payment for the submarine rescue vessel itself. At 31 December 2008, the carrying cost of £14.4 million for this vessel, including profit taken to date of £0.8 million is included in net current assets. Furthermore under the fair value rules, £4.6 million has been charged directly against reserves representing a fair value of adjustment arising from covering the Singaporean dollar for the vessel delivery against sterling. This will reverse on delivery. Overall, these two factors were responsible for some 19% of the Group's 94% of financial gearing at the year end.

The efficient and early construction of the two rescue vessels has confirmed the Defence division's global market leadership in this most specialist of markets. This has stimulated enquiries for related services and we have recently entered a contract with the Royal Australian Navy to provide standby submarine rescue services using the former UK Submarine Rescue equipment which we are buying from the Ministry of Defence for £1 million.

There were no major new developments relating to the surface ship cluster which is responsible for the Company's 25% holding in Foreland Shipping, the management of the five vessels for the International Nuclear Services and the three Corvettes built by BAE Systems for the Brunei Navy which are in lay-up pending sale.

Marine Oil - 2008 Divisional Result £6.0 million (2007 £8.6 million)

As was flagged at the half year, the result for the Marine Oil division was well down on 2007 with a divisional profit of £6.0 million against £8.6 million last time despite an increase in revenue of 6% from £75.9 million in 2007 to £80.8 million in 2008. Margins were consequently down from 11.3% in 2007 to 7.4% in 2008. The return on capital performance was significantly less affected at 8.8% in 2008 against 11.9% in 2007, reflecting the benefit of ship sales releasing capital.

Operational problems rather than a lack of demand were the cause of the disappointing result. These were explained in detail in the half year results but, in summary, the two most important were phasing problems concerning the fleet renewal programme and issues relating to the new European Maritime Safety Agency (EMSA) contract. Although now resolved, these continued in the second half of 2008 and were exacerbated when Svithoid Tankers AB, the Swedish owner of two of our bareboat charters, went into receivership. 

The fall in the value of sterling, although of benefit to the Group overall, had a significantly adverse effect on the Marine Oil result in the second half as its bareboat charters and half of its payroll are in either US dollars or Euros. Marine Oil acts as a useful internal hedge to some of the Group's growing US dollar exposure but receives no compensation for this role in the divisional results.

Despite the operational problems, revenues held up well in 2008 and there has been no slackening in demand for our services to date. Marine Oil remains a steady, if slow growing, division with proven cash generating capabilities which has been most useful in recent years for investment in the Company's other divisions.

Directors and employees

The Company has benefited from a stable and unchanged board and senior management in the main clusters in 2008 and this is reflected in the results. The Company's philosophy is to give senior cluster management as much responsibility as possible in a flat framework where the centre provides commercial guidance and financial support and control. The Company's pay policies are focused on results where the interests of executives and shareholders are closely aligned.

2008 has been a most successful year for James Fisher and I would like to thank all of our staff for their contribution. Their support and continued hard work in 2009 will be critical for success in a commercial environment which threatens to be more challenging than for many years.

Outlook

It is difficult to comment too definitively in an economic climate which is changing rapidly and mainly for the worse. Furthermore it would be foolhardy to pretend that a deep economic downturn would not have a detrimental effect on the Company's performance. Clearly, if world trade shrinks and oil production falls over a prolonged period, then there will in time be adverse consequences for a service company such as James Fisher focused on the shipping, ports and offshore oil sectors.

However the immediate outlook for the divisions has not changed from last year and the Company in 2009 is trading to management expectations. The consistent strategy of investment in niche operating businesses has ensured that the Company's operations are well balanced and sufficiently diversified:

On present evidence the Company is well placed with a proven track record to continue to produce good growth and further value for our shareholders.

Responsibility Statement of the Directors in respect of the Annual Financial Report

We confirm that to the best of our knowledge:

 

- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

- the Directors' report, Chairman's statement, and Review of Operations includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

T.C. Harris

Chairman

M.J. Shields

Group Finance Director

On behalf of the Board of Directors

  CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2008

	Notes		Year ended				Year ended
			31 December 2008				31 December 2007
			Before	Separately			Before	Separately
			separately	disclosed			separately	disclosed
			disclosed	items			disclosed	items
			items	note 4	Total		items	note 4	Total
			£000	£000	£000		£000	£000	£000
Group revenue		3	233,578		233,578		182,046		182,046
Cost of sales			(199,144)		(199,144)		(154,327)		(154,327)
Gross profit			34,434		34,434		27,719		27,719
Administrative expenses			(6,932)		(6,932)		(6,191)		(6,191)
Profit from operations before separately disclosed items		2	27,502		27,502		21,528		21,528
	Impairment of ship		-	(107)	(107)		-	-	-
	Profit on ship disposals		-	685	685		-	95	95
Profit from operations			27,502	578	28,080		21,528	95	21,623
Finance costs
	Finance income		412	-	412		375	-	375
	Finance costs		(6,309)	-	(6,309)		(5,036)	-	(5,036)
	Exchange loss on loan		-	(1,152)	(1,152)		-	(184)	(184)
			(5,897)	(1,152)	(7,049)		(4,661)	(184)	(4,845)
Share of post tax results of joint ventures			2,547	-	2,547		2,322	-	2,322
Profit on continuing operations before taxation			24,152	(574)	23,578		19,189	(89)	19,100
Taxation		5	(5,277)	-	(5,277)		(2,959)	-	(2,959)
Profit for the year on continuing operations			18,875	(574)	18,301		16,230	(89)	16,141
Discontinued operations
Loss for the year from discontinued operations					-				(6)
Profit for the year					18,301				16,135
Profit attributable to :
Equity holders of the parent					18,275				16,078
Minority interests					26				57
					18,301				16,135
Earnings per share
					pence				pence
Basic EPS from continuing operations		6			36.94				32.67
Diluted EPS from continuing operations		6			36.75				32.40
Basic EPS on profit from total operations		6			36.94				32.66
Diluted EPS on profit from total operations		6			36.75				32.39
Adjusted Earnings per share
Basic adjusted EPS from continuing operations		6			38.10				32.85
Diluted adjusted EPS from continuing operations		6			37.91				32.58

  CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the year ended 31 December 2008

	Notes	Year ended		Year ended
	31 December 2008			31 December 2007
			£000		£000
Income and expense recognised directly in equity
Exchange differences on translation of foreign operations:
Currency translation differences			4,906		393
Net investment hedge			(1,070)		1,041
			3,836		1,434
Fair value losses on cash flow hedges			(4,420)		(188)
Share of fair value losses of cash flow hedges in joint venture			(1,453)		(280)
Actuarial losses on defined benefit schemes			(7,795)		(4,587)
			(9,832)		(3,621)
Transfers to the income statement on cash flow hedges			5		8
Tax on items taken directly to equity	5		175		(199)
Net expense recognised directly in equity			(9,652)		(3,812)
Profit for the year			18,301		16,135
Total recognised income for the year	8		8,649		12,323
Attributable to:
Equity holders of the parent			8,623		12,266
Minority interests			26		57
			8,649		12,323

  CONSOLIDATED BALANCE SHEET

As at 31 December 2008

	Notes	31 December 2008		31 December 2007
			£000		£000
Assets
Non current assets
Goodwill			69,993		67,190
Other intangible assets			76		76
Property, plant and equipment			102,018		92,311
Investment in joint ventures			4,547		4,217
Available for sale financial assets			1,370		1,370
Retirement benefit assets	9		-		528
			178,004		165,692
Current assets
Inventories			21,965		18,471
Trade and other receivables			62,395		39,823
Cash and cash equivalents			16,859		13,221
			101,219		71,515
Non-current assets classified as held for sale	4		-		1,172
Total Assets			279,223		238,379
Equity and Liabilities
Capital and reserves
Called up share capital	8		12,438		12,428
Share premium	8		24,432		24,338
Treasury shares	8		(1,036)		(1,134)
Other reserves	8		(1,154)		878
Retained earnings	8		62,560		57,395
Shareholders' Equity			97,240		93,905
Minority interests	8		-		128
Total equity			97,240		94,033
Non current liabilities
Other payables			1,248		2,012
Retirement benefit obligations	9		16,082		11,904
Derivative financial instruments			-		188
Cumulative preference shares			100		100
Loans and borrowings			89,315		83,628
Deferred tax liabilities			1,781		2,226
			108,526		100,058
Current liabilities
Trade and other payables			45,440		34,907
Current tax			4,465		1,940
Derivative financial instruments			4,603		-
Loans and borrowings			18,949		7,441
			73,457		44,288
Total liabilities			181,983		144,346
Total equity and liabilities			279,223		238,379

  CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2008

		31 December 2008		31 December 2007
			£000		£000
Group profit before tax from continuing operations			23,578		19,100
Adjustments to reconcile Group profit before tax to net cash flows
Loss from discontinued operations			-		(6)
Adjustments for:
Depreciation and amortisation			9,431		8,344
Profit on sale of property, plant and equipment			(499)		(735)
Impairment of non - current assets			107		-
Profit on ship disposals			(685)		(95)
Finance income			(412)		(375)
Finance costs			6,309		5,036
Exchange loss on loan			1,152		184
Share of post tax results of joint ventures			(2,547)		(2,322)
Increase in trade and other receivables			(8,530)		(4,669)
Increase in inventories			(8,367)		(3,203)
Increase in working capital attributable to submarine rescue vessels			(10,618)		(3,707)
Increase in trade and other payables			13,411		4,890
Additional defined benefit pension scheme contributions			(3,081)		(3,147)
Share based compensation			651		587
Cash generated from operations			19,900		19,882
Income tax payments			(3,522)		(2,840)
Cash flow from operating activities			16,378		17,042
Investing activities
Dividends from joint venture undertakings			1,200		1,416
Proceeds from the sale of property, plant and equipment			4,681		28,377
Proceeds from the sale of subsidiaries net of cash disposed of			-		491
Finance income			411		377
Acquisition of subsidiaries, net of cash acquired			(5,487)		(18,486)
Acquisition of property, plant and equipment			(18,735)		(22,967)
Acquisition of investment in joint ventures			(9)		(27)
Cash flows used in investing activities			(17,939)		(10,819)
Financing activities
Proceeds from the issue of share capital			104		275
Preference dividend paid			(3)		(4)
Finance costs			(6,818)		(4,932)
Proceeds from other non-current borrowings			30,859		43,855
Purchase less sales of own shares by ESOP			(164)		(274)
Capital element of finance lease repayments			(65)		(75)
Repayment of borrowings			(14,828)		(37,017)
Dividends paid			(5,879)		(5,129)
Cash flows from/(used in) financing activities			3,206		(3,301)
Net increase in cash and cash equivalents			1,645		2,922
Cash and cash equivalents at 1 January 2008			13,221		9,655
Effect of exchange rate fluctuations on cash held			1,993		644
Cash and cash equivalents at 31 December 2008			16,859		13,221

  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 2008 ("adopted IFRS"), International Financial Reporting Interpretations Committee ("IFRIC") interpretations and those part of the Companies Act 1985 applicable to companies reporting under IFRS.

The accounting policies are consistent with those presented in the annual report for 2007 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;

IFRIC 11 IFRS 2 Group and treasury share transactions

IFRIC 14 IAS 19 The limit on defined benefit asset, minimum funding requirements and their interaction (early adopted)

Adoption of these revised standards did not have a material impact on the Group's financial statements.

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 meets its day to day working capital requirements through operating cash flows, with borrowings in place to fund acquisitions and capital expenditure. The group also has £35,430,000 of undrawn committed facilities. The current economic conditions create uncertainty particularly over a) the exchange rate currency between sterling and the US dollar and the consequences for the net cash dollar surplus and b) the exchange rate between sterling and the Euro and thus the consequences on seafarer payroll costs; and c) the availability of bank facilities in the immediate future.

The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current facilities. During 2009 borrowing facilities of £7,750,000 (total facility £12,500,000) are fully repayable. This facility relates to the Singapore Submarine rescue contract which is due to complete in April 2009 when full payment of S$43,868,000 (£15,981,000) will become due and is expected to be received by 30 June 2009, the latest date for repayment of the facility.

The Group has two revolving credit facilities due for renewal in 2010; a £20,000,000 facility which expires on 27 September 2010 and a £20,000,000 facility which ends on 22 December 2010. The amounts drawn on these facilities at 31 December 2008 are £19,215,000 and £16,000,000 respectively. The Group will open renewal negotiations with banks in due course and has at no stage sought any written commitment that the facility will be renewed. However, the Group has held discussions with its bankers about its future borrowing needs and no matters have been drawn to its attention to suggest the renewal may not be forthcoming on acceptable terms.

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 for the years ended 31 December 2008 and 2007 set out above does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 ("the Act"). Statutory accounts for 2007 have been delivered to the registrar of companies, and those for 2008 will be delivered in due course. The auditors have reported on those accounts; their report was (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 237(2) or (3) of the Companies Act 1985

 

The annual report and accounts for the year ended 31 December 2008 will be posted to shareholders in early April 2009.

The results were approved by the board of directors on the 16 March 2009 and are audited.

Principal Risks and Uncertainties

Competitive pressures

In common with other markets, our businesses compete with others on price and service, which competition is subject to cycles determined by the balance between supply and demand.

There exists a risk that over-tonnaging may occur in the shipping markets in which the Group operates and given the ease with which, for example, shipping assets may be moved from one geographical market to another, no regional or local market can be totally isolated from the influence of over-tonnaging in other markets should it occur. The global supply of tonnage makes it difficult to predict over-tonnaging in any particular local market with any accuracy. There are however, high barriers of entry to the contract of affreightment business with the oil majors, with vigorous vetting procedures.

Reputational risks for operational incidents

The results of the Group are reliant to a degree on the maintenance by the various businesses of high reputations with their customers. The Group places a particular emphasis on the safety and security of operations but notwithstanding this, it is possible that an adverse operational incident may occur, which could in turn damage the Group's reputation.

Pensions

The Group contributes to a number of defined benefit pension schemes. There is a risk that changes in the market conditions for bond yields and equities and changes in the actuarial assumptions (eg on life expectancy), may result in an increase in the deficits in any of such schemes from time to time. There is further risk that the Group could be obliged to fund additional liabilities of an industry wide scheme, the Merchant Navy Officers Pension Fund, in addition to the liabilities in respect of its own employees, in relation to any other employee(s) unconnected to the Group whose employer has become insolvent.

World economic outlook

Demand for the Group's products and services is inevitably a factor of wider economic conditions. During an economic slowdown it is possible that demand for certain products and services provided by the Group may reduce. Furthermore the current economic environment may increase the risk that parties with whom the Group trades become unable to meet their commitments to the Group.

Product liability

The Group is involved in the design, manufacture and sale or hire of various items such as engineering tools, software and electronics. It is possible that the Group may become liable for losses which are incurred by customers and others in the event that any such product does not meet the agreed specifications or other quality requirements. The Group seeks to limit the impact of this risk by negotiating appropriate limits on its liability to customers and also through its insurance policies.

Integration benefits

The Group continues to experience growth and development through acquisitions. Integrating the operations and personnel of acquired businesses is a complex process and there is a risk that the anticipated benefits of the acquisition may not be realised in their entirety, or may be realised over a longer time span than originally envisaged. Where appropriate, the Group manages this risk through the formation of an integration committee comprised of senior managers from across the Group with significant experience of the underlying businesses, drawing on external advice and support as appropriate.

Recruitment and retention of talent

The success of the Group is dependent to a significant degree upon the skills and motivation of its workforce, including its senior management team. There is a risk that if the Group loses, or fails to attract personnel of the requisite calibre, that this could have an adverse impact on the performance of the business. The risk is mitigated through the application of appropriate remuneration incentives and the implementation of skills development initiatives, designed to assist in making the Group an attractive environment in which to work.

Legislation and regulation

The businesses conducted by the Group are subject to numerous laws and regulations, both in the United Kingdom and overseas, which regulate matters including safety procedures, employment requirements, taxation, environmental procedures and other operating issues. Failure to comply with such laws and regulations may harm the business or the Group's reputation. The Group draws upon the expertise of various professionals, both within and outside the business, in order to seek to ensure compliance with such provisions.

Financial 

The Group is exposed to interest rate risk and foreign exchange risk which it seeks to manage, where appropriate, via hedging arrangements. Furthermore the loan facilities entered into by the Group include a number of financial covenants. Breach of these covenants would constitute events of default under such facilities which might result in these borrowings becoming immediately repayable. Recent events in the financial markets have demonstrated the risks associated with credit and liquidity. In 2008 the Group has remained proactive in managing these risks, both fostering existing and developing new relationships with lenders.

  

2. Segmental Information

 

Primary reporting format business segments

 

The following tables present revenue and profit and certain asset and liability information regarding the Group's business segments for the years ended 31 December 2008 and 2007.

Year ended
31 December 2008	Continuing Operations
		Offshore Oil		Specialist				Defence				Marine			Total
		Services		Technical								Oil
				Services								Services
		£000		£000				£000				£000			£000
Revenue
Segmental revenue	48,294			79,893				29,415				80,819			238,421
Inter segment sales	(8)			(4,629)				(146)				(60)			(4,843)
Group revenue	48,286			75,264				29,269				80,759				233,578
Result
Segmental result before ship disposals	12,702		9,084					2,451				5,982			30,219
Common costs															(2,717)
													27,502
Profit from operations before separately disclosed items and joint ventures
Impairment of non-current assets *															(107)
Profit on ship disposals *															685
Profit from operations before joint ventures															28,080
Finance income (revenue)															412
Finance costs															(6,309)
Exchange loss on loan															(1,152)
															(7,049)
Share of post tax results of joint ventures				514			2,033								2,547
	12,702			9,598			4,484					5,982
Profit before tax															23,578
Taxation															(5,277)
Profit attributable to equity holders															18,301
* Relates to the Marine Oil Services division
Assets & Liabilities
Segment assets	85,343			71,850			25,536					87,217			269,946
Investment in joint ventures	-			1,896			2,651					-			4,547
Non-current assets classified as held for sale												-			-
Unallocated assets +															4,730
Total assets															279,223
Segment liabilities	(9,217)			(15,830)			(6,036)					(19,567)			(50,650)
Unallocated liabilities															(131,333)
Total liabilities															(181,983)
Other segment information
Capital expenditure:
Property, plant & equipment	14,111			3,145			242					2,385			19,883
Unallocated															117
															20,000
Intangible fixed assets	8			3			-					-			11
Depreciation	2,762			1,305			79					5,078			9,224
Amortisation of intangible assets	3			8											11
Unallocated															196
															9,431
+ Unallocated assets comprise available for sale assets, deferred tax and centrally held corporate assets

  

Segmental information for December 2007 has been restated following the decision to transfer the results of Remote Marine Systems and Pumptools from the Specialist Technical Services division to the Offshore Oil Services division. These businesses are involved in the supply of equipment and services used in oilfield development and it was therefore considered that their activities are more closely aligned with the existing businesses in the Offshore Oil division. The impact of the restatement on the year ended 31 December 2007 segmental information is to increase the segmental revenue and result of the Offshore Oil division by £3,960,000 and £647,000 respectively, with a corresponding reduction in the revenue and operating results of the Specialist Technical Services division.

 

Year ended													Discontinued
31 December 2007			Continuing Operations										Operations
	Offshore Oil				Specialist		Defence		Marine		Total		Cable		Total
			Services		Technical				Oil				Ships
					Services				Services
			£000		£000		£000		£000		£000		£000		£000
Revenue
Segmental revenue			30,271		65,304		14,132		75,932		185,639		-
Inter segment sales			-		(3,406)		(187)		-		(3,593)		-
Group revenue			30,271		61,898		13,945		75,932		182,046		-
Result
Segmental result before ship disposals			9,213		5,066		1,228		8,605		24,112		(6)
Common costs											(2,584)
											21,528
Profit from operations before separately disclosed items and joint ventures
Profit on ship disposals *											95		-
Profit from operations before joint ventures											21,623		(6)
Finance income (revenue)											375		-
Finance costs											(5,036)		-
Exchange loss on loan											(184)		-
											(4,845)		-
Share of post tax results of joint ventures					548		1,774				2,322
			9,213		5,614		3,002		8,605
Profit before tax											19,100		(6)
Taxation											(2,959)		-
Profit attributable to equity holders											16,141		(6)
* Relates to the Marine Oil Services division
Assets & Liabilities
Segment assets			69,873		55,379		12,405		90,063		227,720		-		227,720
Investment in joint ventures			-		946		3,271		-		4,217		-		4,217
Non-current assets classified as held for sale									1,172		1,172		-		1,172
Unallocated assets +											5,270				5,270
Total assets											238,379		-		238,379
Segment liabilities			(5,436)		(11,356)		(2,432)		(19,107)		(38,331)		-		(38,331)
Unallocated liabilities											(106,015)		-		(106,015)
Total liabilities											(144,346)		-		(144,346)
Other segment information
Capital expenditure:
Property, plant & equipment			7,440		4,513		67		10,938		22,958		-		22,958
Unallocated											991				991
											23,949		-		23,949
Intangible fixed assets			24		8		-		-		32		-		32
Depreciation			2,009		761		57		5,334		8,161		-		8,161
Amortisation of intangible assets			1		4						5		-		5
Unallocated											178				178
											8,344		-		8,344
+ Unallocated assets comprise available for sale assets, deferred tax and centrally held corporate assets

  Geographical segments

The following table represents revenue, expenditure and certain asset information regarding the Group's geographical segments for the years ended 2008 and 2007.

	UK & Ireland				Norway				Rest of the World				Total
	2008		2007		2008		2007		2008		2007		2008		2007
	£000		£000		£000		£000		£000		£000		£000		£000
Revenue
Group revenue	148,368		118,015		20,910		18,271		69,143		49,353		238,421		185,639
Inter-segment sales	(4,843)		(3,593)		-		-		-		-		(4,843)		(3,593)
Segmental revenue	143,525		114,422		20,910		18,271		69,143		49,353		233,578		182,046
Segment assets	206,365		182,815		47,789		36,044		15,792		8,861		269,946		227,720
Investment in joint ventures	2,651		3,271		-		-		1,896		946		4,547		4,217
Non-current assets classified as
held for sale	-		1,172										-		1,172
Unallocated assets													4,730		5,270
													279,223		238,379
Segment liabilities	(43,277)		(34,083)		(4,889)		(2,318)		(2,484)		(1,930)		(50,650)		(38,331)
Unallocated liabilities													(131,333)		(106,015)
													(181,983)		(144,346)
Capital expenditure:
Property, plant and equipment	8,976		17,919		8,246		3,432		2,774		2,598		19,996		23,949

3 Revenue

Revenue disclosed in the income statement is analysed as follows:

Continuing operations

				2008		2007
				£000		£000
Sale of goods and services				209,352		160,620
Rental income				24,226		21,426
Total Revenue				233,578		182,046

Contract work in progress

The following amounts are included in respect of the Singapore and Korea Submarine Rescue contracts:

				2008		2007
				£000		£000
Contract revenue recognised in the period				18,339		4,359
Amounts included in the balance sheet:
Amount due from customers included in receivables				13,569		-
Work in progress				1,087		3,905
Net advances received included in creditors				(235)		(33)
Net investment in contract work in progress				14,421		3,872

4. Separately disclosed items and non current assets held for sale

Separately disclosed items consist of:
		2008		2007
		£000		£000
Loss on ship disposals		(2)		(77)
Profit on ship disposals		687		172
Impairment of ship		(107)		-
Exchange loss on loan		(1,152)		(184)
		(574)		(89)

The profit on ship disposals relates to the sale of mt Alacrity in January 2008 and mt Annuity in October 2008 and adjustments in respect of the sale of mt Agility and mt Severn Fisher.

The Directors have performed an impairment review of the carrying value of the mt Rudderman. This vessel is due to be redelivered to its owners in March 2009. In view of the short earnings period before the proposed redelivery full provision has been made against the carrying value of the remaining unamortised special survey expenditure of £107,000.

The exchange differences on loans arose on foreign currency loans used to finance the acquisition of vessels in the UK.

Year ended 31 December 2007

In June 2007 the Group carried out a refinancing exercise which involved the disposal of mt Seniority, mt Speciality and mt Superiority to FSL Trust Management for a consideration of £22,602,000 the proceeds of which were used to repay existing debt. These vessels have subsequently been chartered by the Group on bareboat charters for an initial period of ten years. The loss on disposal also includes the sale of mt Allurity and mt Arduity in January 2007 and mt Severn Fisher in December 2007. The profit on ship disposals relates to the mt Agility which was disposed of in October 2007.

The tax arising on these items is £Nil (2007: £Nil ).

Non current assets held for sale

At 31 December 2007 the mt Alacrity which was disposed of by the Group in January 2008 was classified as held for sale and was recorded at its carrying value of £1,172,000.

  5. Taxation

The group has entered the UK tonnage tax regime under which tax on its ship owning and operating activities is based on the net tonnage of vessels operated. Any income and profits outside the tonnage tax regime are taxed under the normal tax rules of the relevant tax jurisdiction.

The tax charge is made up as follows:		2008		2007
		£000		£000
Current tax:
UK tonnage tax		(29)		(31)
UK corporation tax		(3,100)		(1,433)
		(3,129)		(1,464)
Tax (under)/overprovided in previous years		(41)		175
Foreign tax		(1,632)		(1,542)
Total current tax		(4,802)		(2,831)
Deferred tax:
Origination and reversal of timing differences		(475)		(302)
Impact of change in rate		-		174
Total taxation on continuing operations		(5,277)		(2,959)
The total tax charge in the income statement is allocated as follows:
		2008		2007
		£000		£000
Taxation expense reported in group income statement		5,277		2,959
Attributable to joint ventures		78		20
Total tax expense		5,355		2,979

Tax charged to equity in statement of recognised income and expense:

		2008		2007
		£000		£000
Current tax:
Current tax on foreign exchange profits on internal loans		(758)		-
Deferred tax:
Deferred tax relating to the actuarial gains and losses on defined benefit pension schemes		1,010		(276)
Deferred tax relating to share based payments		(77)		77
		175		(199)

Reconciliation of effective tax rate

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the rate applicable under UK corporation tax rules as follows:

						2008		2007
						£000		£000
Profit before tax from continuing operations						23,578		19,100
Tax arising on interests in joint ventures						78		20
Loss before tax from discontinued activities						-		(6)
						23,656		19,114
At UK statutory tax rate of 28.5% (2007: 30%)						6,742		5,734
Difference due to application of tonnage tax to all vessel disposals and operating activities						(803)		(1,882)
Expenses not deductible for tax purposes						46		42
Chargeable gains						-		(22)
Over provision in previous years
	Current tax					41		(175)
	Deferred tax					18		(269)
Share based payments						332		-
Lower taxes on overseas income						(773)		(258)
Rate change on deferred tax						-		(174)
Research and development relief						(140)		-
Other						(108)		(17)
						5,355		2,979

Deferred tax at 31 December relates to the following:

		Group				Group
		Balance sheet				Income statement
		2008		2007		2008		2007
		£000		£000		£000		£000
Deferred tax assets
Retirement benefits		1,152		190		(48)		(189)
Share based payments		87		443		(279)		118
		1,239		633
Deferred tax liabilities
Accelerated capital allowances for tax purposes		(1,561)		(1,383)		(165)		(46)
Roll over gains		(1,459)		(1,476)		17		(11)
		(3,020)		(2,859)
Deferred income tax charge						(475)		(128)
Net deferred income tax liability		(1,781)		(2,226)

6. Earnings per share

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year, after excluding ordinary shares purchased by the employee share ownership trust and held as treasury shares.

Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The calculation of basic and diluted earnings per share is based on the following profits and numbers of shares:

						2008		2007
						£000		£000
Profit attributable to equity holders						18,275		16,078
Loss attributable to discontinued activities						-		6
Profit on continuing activities attributable to equity holders						18,275		16,084
Weighted average number of shares
						2008		2007
						Number of		Number of
						shares		shares
For basic earnings per ordinary share*						49,472,598		49,236,346
Exercise of share options and LTIPs						248,810		399,411
For diluted earnings per ordinary share						49,721,408		49,635,757

* Excludes 229,305 (2007:312,870) shares owned by the James Fisher and Sons Public Limited Company Employee Share Ownership Trust.

		2008				2007
		£000		pence		£000		pence
Basic earnings per share		18,275		36.94		16,078		32.66
Loss attributable to discontinued activities
		-		-		6		0.01
Basic earnings per share on profit from continuing operations
		18,275		36.94		16,084		32.67
Diluted earnings per share		18,275		36.75		16,078		32.39
Loss attributable to discontinued activities
		-		-		6		0.01
Diluted earnings per share on profit from continuing operations
		18,275		36.75		16,084		32.40

  Adjusted Earnings per Share

The basic earnings per share on continuing activities before separately disclosed items is shown to highlight the underlying earnings trend and is calculated using the number of shares outlined in the table above. No tax is attributable to the adjustments included in the table below.

		2008				2007
		£000		pence		£000		pence
Basic earnings per share on profit on continuing operations
		18,275		36.94		16,084		32.67
Adjustments:
Exchange loss on loan conversion		1,152		2.33		184		0.37
Profit on ship disposals		(685)		(1.39)		(95)		(0.19)
Impairment of ship		107		0.22		-		-
Basic adjusted earnings per share on profit from continuing operations
		18,849		38.10		16,173		32.85
Diluted earnings per share on profit on continuing operations
		18,275		36.75		16,084		32.40
Adjustments:
Exchange loss on loan conversion		1,152		2.32		184		0.37
Profit on ship disposals		(685)		(1.38)		(95)		(0.19)
Impairment of ship		107		0.22
Diluted adjusted earnings per share on profit from continuing operations
		18,849		37.91		16,173		32.58

7. Dividends paid and proposed

						2008		2007
						£000		£000
Declared and paid during the year
Equity dividends on ordinary shares:
Final dividend for 2007 7.52p (2006 6.54p)						3,739		3,238
Interim dividend for 2008 4.36p (2007 3.89p)						2,168		1,929
Less dividends on own shares held by ESOP						(28)		(38)
						5,879		5,129
Proposed for approval at Annual General Meeting (not recognised as a liability at 31 December)
Equity dividends on ordinary shares:
Final dividend for 2008 8.65p (2007 7.52p)						4,284		3,715

  8. Reconciliation of movements in equity

	Capital				Reserves
	Share		Share		Retained	Other		Treasury			Total		Minority		Total
	capital	premium			earnings	reserves		shares		shareholders			interests		equity
											equity
	£000		£000		£000		£000		£000		£000		£000		£000
At 1 January 2007	12,377		24,114		50,932		(96)		(1,147)		86,180		71		86,251
Total recognised income and expense in the period	-		-		11,292		974		-		12,266		57		12,323
Ordinary dividends paid	-		-		(5,129)		-		-		(5,129)		-		(5,129)
			-				-		-				-
Share-based compensation expense	-		-		587		-		-		587		-		587
Purchase of shares	-		-		-		-		(276)		(276)		-		(276)
Sale of shares	-		-		-		-		2		2		-		2
Arising on the issue of shares	51		224		-		-		-		275		-		275
Transfer on disposal of shares	-		-		(287)		-		287		-		-		-
At 31 December 2007	12,428		24,338		57,395		878		(1,134)		93,905		128		94,033
Total recognised income and expense in the period	-		-		10,655		(2,032)		-		8,623		26		8,649
Acquisition of minority interest	-		-		-		-				-		(154)		(154)
Ordinary dividends paid	-		-		(5,879)		-		-		(5,879)		-		(5,879)
Share-based compensation expense	-		-		651		-		-		651		-		651
Purchase of shares	-		-		-		-		(164)		(164)		-		(164)
Arising on the issue of shares	10		94		-		-		-		104		-		104
Transfer on disposal of shares	-		-		(262)		-		262		-		-		-
At 31 December 2008	12,438		24,432		62,560		(1,154)		(1,036)		97,240		-		97,240
Other reserves						Translation		Hedging			Total
						reserve		Reserve
							£000		£000		£000
At 1 January 2007							(170)		74		(96)
Cash flow hedges:
Transferred to the income statement							-		8		8
Fair value losses in the period							-		(188)		(188)
Share of fair value gains of joint ventures							-		(280)		(280)
Recognised income in the period including the effect of net investment hedges							1,434		-		1,434
At 31 December 2007							1,264		(386)		878
Cash flow hedges:
Transferred to the income statement							-		5		5
Fair value gains in the period							-		(4,420)		(4,420)
Share of fair value gains of joint ventures							-		(1,453)		(1,453)
Recognised income in the period including the effect of net investment hedges							3,836		-		3,836
At 31 December 2008							5,100		(6,254)		(1,154)

  9. Retirement benefit obligations

The Retirement benefit obligations included in the Group balance sheets relate to three defined benefit schemes operated by the Group, being The James Fisher and Sons Public Limited Company Pension Fund for Shore Staff, (Shore staff); The James Fisher and Sons Public Limited Company Pension Fund for Permanent Dockworkers, (Dockworkers) and The Everard Group Pension Fund (Everard), together with the Group's obligations to the Merchant Navy Officers Pension Fund (MNOPF), an industry wide scheme which is also accounted for as a defined benefit scheme. 

As required by IAS 19 the valuations of the schemes have been updated to 31 December 2008 by qualified actuaries.

The Group's assets and obligations in respect of its pension schemes at 31 December 2008 were as follows:

Assets
					Group
					2008		2007
					£000		£000
Shore staff pension scheme					-		528
Everard Group pension scheme					-		-
					-		528
Obligations
					Group
					2008		2007
					£000		£000
Shore staff pension scheme					(3,259)		-
Dockworkers pension scheme					(1,806)		(916)
Everard group pension scheme					(1,684)		-
MNOPF pension scheme					(9,333)		(10,988)
					(16,082)		(11,904)

James Fisher and Sons Public Limited Company Pension Fund for Shore Staff

In 2005 the Company decided to close the Shore Staff scheme to existing members from 2010. At this time members contributing to the scheme can transfer to a stakeholder scheme option. During the remaining period that the scheme remains open to existing members the rate of growth of pensionable salary reduced to a maximum of 1.5%.

The Company is currently contributing 14.5% (2007:14.7%) of pensionable pay plus regular contributions of £55,000 (2007:£55,000) per month into the Shore Staff Scheme. Contributions will continue at this level in 2009.

In 2007 the Group recognised an asset of £528,000 in respect of the surplus in the Shore Staff scheme. This was the amount recoverable from the scheme by the Group through reduced contributions and represents the value of employer's service costs over the remaining period until accrual ceases in 2010. Following the incorporation of revised mortality assumptions, changes in the commutation factor, changes in the valuation of investments and the discount rate applied to the pension liability as a result of the incorporation of the scheme valuation at 31 March 2007 and subsequent roll forward, the scheme is now in deficit.

James Fisher and Sons Public Limited Company Pension and Life assurance scheme for Permanent Dockworkers

The Group also operates a paid up defined benefit scheme for dockworkers. The latest actuarial valuation of the scheme was at 31 March 2007.

As a result of the review carried out in 2008 the Company agreed a deficit recovery plan with the trustees of the scheme. Under this plan the Company made monthly payments of £20,833 (2007: £20,833) into the scheme. Contributions will continue at this level in 2009.

The Everard Group Pension Fund

FT Everard & Sons operated a defined benefit scheme which was closed to new entrants from 1 April 2004 and closed to future accrual from 1 March 2005. Under a deficit reduction plan agreed with the schemes trustees, FT Everard & Sons Limited is making annual additional contributions of £286,000 for a period of thirteen years commencing 1 March 2005.

At 31 December 2007 an actuarial surplus of £1,506,000 existed relating to the Everard scheme. No element of surplus was recognised relating to the scheme as this is already closed to future accrual. A full actuarial valuation of the scheme as at 1 August 2007 has been performed and the results, rolled forward to 31 December 2008, have been incorporated into these financial statements. As a result of the incorporation of revised mortality assumptions, changes in the commutation factor, changes in the valuation of investments and the discount rate applied to the pension liability, the scheme is now in deficit.

Merchant Navy Officers Pension Fund

In 2005 the High Court established that former as well as existing employers will be liable to make payments in respect of the funding deficit of the MNOPF. The Company is informed by the Trustees as to the level of annual payments it will be required to make into the fund over a period of ten years commencing October 2005 representing its share of the deficit disclosed in the initial actuarial valuation carried out as at 31 March 2003, as revised by the latest valuation as at 31 March 2006. Following the acquisition of Everard in December 2006 the Group took on additional liabilities in respect of the share of the MNOPF attributable to FT Everard & Sons and its subsidiaries.

As a result of the last actuarial valuation of the scheme which was carried out at 31 March 2006, in August 2007 following the approval of this valuation of the scheme, the Trustees issued calls for further contributions. As a result of these additional claims the total amount paid by the Group in 2008 to the MNOPF was £1,885,000 (2007 £1,896,000). Following further correspondence with the MNOPF additional small claims have also been settled in full in 2007 and 2008.The Group is not aware of any further outstanding claims in respect of the MNOPF.

The Group has an annual commitment to make six further annual payments of £1,873,000 to the scheme, payable in two instalments on 31 March and 30 September each year.

10. Post balance sheet events

On 16 March 2009 the Group entered into an agreement to dispose of the business and assets excluding cash and freehold property of Reanco Team AS for a consideration of 11.5m NOK (£1,195,000) subject to a working capital adjustment.

The Reanco business, which is involved in the fabrication of offshore rig living quarters, forms part of the Offshore Oil Services division but is not considered to be part of the core activities of the division. Completion of the disposal which was at approximate book value is subject to competition approval and is expected to take place in April 2009.

11. Related party transactions

Details of the transactions carried out with related parties are shown in the table below:

			Services to		Sales to		Purchases		Amounts		Amounts
				related		related		from	owed by		owed to
				parties		parties		related		related		related
								parties		parties		parties
				£000		£000		£000		£000		£000
Foreland Shipping Limited		2008		413		-		-		32		-
		2007		414		-		-		29		-
FCM businesses		2008		-		868		-		125		-
		2007		-		1,111		747		934		-
Everard Insurance Brokers		2008		96		-		19		9		-
		2007		678		-		318		66		58

No provision for bad debts has been made in respect of these balances (2007: £nil). No bad debts arose during the period relating to these transactions (2007: £nil).

The Group provides payroll management services to Foreland Shipping Limited, a wholly owned subsidiary of Foreland Holdings a company in which the Group has a 25% equity interest. No profit is made on the provision of these services which are excluded from the Group's revenue.

The Group has interests of between 25% and 50% in several joint ventures providing ship to ship transfer services in West Africa, Northern Europe and Asia through its wholly owned subsidiary, Fender Care Marine Services Limited.

Everard and its subsidiaries purchased insurance services from Everard Insurance Brokers Limited, (EIB). EIB is a wholly owned subsidiary of Alchymist Trading Company Limited, (Alchymist) a company controlled by Mr W.D.Everard and Mr F.M.Everard and members of their family. Everard also provides accommodation and management services to Alchymist and EIB. Following the acquisition of Everard the Group continued to receive insurance services from Everard and to provide accommodation and management services, including the provision of payroll management services. No amounts are due to or from Alchymist.

 

12. The AGM will be held at 12.00 noon, Thursday 7 May 2009 at the Abbey House Hotel, Abbey Road, Barrow in Furness, Cumbria.

 

13. Report and accounts will be posted to members in early April 2009. Copies will be made available to members of the public at Fisher House, PO Box 4, Barrow in Furness, Cumbria, LA14 1HR.

 

14. The preliminary statement was approved by the Board of Directors on 16 March 2009.

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