James Fisher and Sons Regulatory News (FSJ)

20 August 2013

James Fisher and Sons plc

Interim Results 2013

James Fisher and Sons plc ("James Fisher"), the leading marine service provider, announces its results for the six months ended 30 June 2013.

* underlying profit excludes separately disclosed items

Highlights:

· Strong performance reflects good growth across the divisions and the continued success of the Group's strategy to focus on niche, high growth marine services markets

· Double digit growth in underlying profit before tax and diluted earnings per share

· Cash conversion of 134% (H1 2012: 105%)

· Marine Support increased underlying operating profit by 20% on 2012 (adjusted for TRE disposal)

· Divex, the diving equipment supplier acquired in March, made an excellent initial contribution

· Offshore Oil had a strong start, benefitting from good market conditions and equipment investments

· Tankships produced improved year on year result

· The Board is recommending a 10% increase in the interim dividend to 6.46p per share (H1 2012: 5.87p per share)

Announced today:

· Disposal of our 25% interest in Foreland for £11.4m in cash

· Acquisition of Osiris for an initial consideration of £3.25m in cash

Post period-end:

· Announced the appointment of two Non-Executive directors to the Board to take effect from 1 August 2013

· James Fisher announced the revised definition of its reported operating segments on 17 July 2013, which better reflects the nature of the Group's businesses following the acquisition of Divex

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

"James Fisher benefitted from good market conditions in both Marine Support and Offshore Oil driven by demand for our specialist services around the world. Looking ahead, we expect stronger revenue growth in the second half when compared with the first, led by our Offshore Oil businesses which are enjoying buoyant demand for their services in both the North Sea and internationally. To date in the second half, the Group is trading to management expectations and continues to be well placed to deliver further value to our shareholders."

For further information:

James Fisher and Sons plc ("James Fisher")

Interim Results for the six months ended 30 June 2013

Chairman's Statement

For the six months ended 30 June 2013

I am pleased to report that the Group had another strong trading result in the first half of 2013. Compared to the prior period, revenue grew by 7% to £200.7m and underlying operating profit increased 11% to £22.2m. We saw faster growth of 15% in underlying profit before taxation of £19.4m and diluted earnings per share of 29.9 pence per share. This strong performance reflected good underlying growth across the Group's businesses as well as a reduction in interest charges following the sale of our TRE subsidiary at the end of last year.

Following the acquisition of Divex Limited announced in March and the disposal of our shareholding in Foreland, announced today, we have revised the segmental format used to report our results. Our submarine rescue Defence business is now reported together with Divex and our Nuclear business in Specialist Technical. Our Fendering, Strain and Maritime Services businesses have been separated into a new Marine Support segment.

Our Marine Support businesses produced a strong result in the first half with underlying operating profit up approximately 20% after adjustment for the TRE disposal. The overall result reported for Specialist Technical was flat, but within this, Divex made an excellent initial contribution in the four months since its acquisition, offsetting a continued weak performance in our defence project work and a lower result at Foreland. Offshore Oil had a strong start to the year benefitting from the investment the Group has made in new equipment for this sector and good market conditions. Tankships continued the positive trend seen in 2012 with a further improvement in its results for 2013.

At the strategic level, the Group acquired Divex Limited, a leading equipment supplier to the saturated diving market, for an initial consideration of £20.8m. This business, together with our existing submarine rescue activities, will form a strong niche player in both the commercial and defence subsea sectors. We announced today the disposal of our 25% interest in Foreland for £11.4m in cash with potential further consideration payable when Foreland sells certain assets. Foreland contributed £1.6m to Group pre-tax profit in 2012. This private finance initiative business decreased in scale in 2012 following the government's Defence review, leading the Board to conclude that it was better to release the capital tied up for reinvestment into faster growing areas of the Group.

Looking forward, we would expect revenue growth for the Group in the second half to increase compared with the first, led by our Offshore Oil businesses which are seeing strong demand for their services both in the North Sea and internationally. We would also expect a marked improvement in the year-on-year performance of Specialist Technical with our Nuclear and Subsea businesses having won significant new contracts in the first half. By contrast, growth in our Marine Support and Tankships businesses will slow compared with the increases achieved in the first half.

The continued positive outlook for the Group has led the Board to increase the interim dividend by 10% to 6.46 pence per share.

We have recently announced the appointment of two new Non- Executive Directors to the Board: David Moorhouse (formerly Executive Chairman of Lloyds Register) and Michael Salter (formerly Chief Operating Officer at Abbott Group plc). Together they will strengthen the Board's insight into the oil and gas sectors and provide a full replacement to the technical and maritime knowledge which Maurice Storey brought to the Board. Maurice will retire later this year and I would like to thank him for the significant contribution which he has made to the Board over the past nine years.

The Group is trading to management expectations in the second half and continues to be well placed to deliver further value to our shareholders.

Operating and Financial Review

Introduction

Group revenue increased by 7% in the first half of 2013 to £200.7m (2012: £188.3m). Underlying operating profit increased by 11% to £22.2m (2012: £20.1m) and underlying profit before tax and diluted earnings per share were each 15% higher than last half year. Since December last year, the Group sold a non-core business, The Railway Engineering Company, for £25.5m and acquired the diving equipment business, Divex Limited, for an initial consideration of £20.8m.

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% and returns on capital in excess of 15%, while being cash generative.

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 65% of our growth in profits in the past nine 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.

Marine Support

H1 2013 underlying profit: £9.4m (H1 2012: £8.8m)

Underlying profits in marine support increased by 7% compared with prior year. Adjusting for the TRE business that was sold in December 2012, profits were approximately 20% ahead. Revenue declined by 4% reflecting the strong comparator in the first half of 2012, which was boosted by a significant floating production, storage and offloading (FPSO) contract in Angola, previously highlighted.

Ship to ship oil transfer services saw a further period of organic growth, particularly in the Asia Pacific region. Significant new contract wins were gained in mooring applications for both maintenance and new FPSO operations and for strain monitoring applications, including the new Forth Bridge construction.

Our contract to supply vessels and diving services in Angola produced a financial performance in line with expectations. Our announcement today of the purchase of Osiris Marine extends our services to the UK renewables sector where we have landed some initial contracts.

Specialist Technical

H1 2013 underlying profit: £3.7m (H1 2012: £3.8m)

Our nuclear business had a strong first half producing growth over 2012 after allowance for the one-off London Olympics contract in 2012. This reflects contract gains both in decommissioning and operations. These included contracts with Dounreay and the Atomic Weapons Authority (AWE) which further extend our customer base.

The acquisition of Divex in March has provided new opportunities with James Fisher Defence in both service contracts and projects. The service contracts with the UK Ministry of Defence, the Royal Australian Navy and the Singapore Navy have continued to perform well. The project to produce a deep saturation diving system for the Russian Navy is nearing completion. The Division has a strong ongoing order book with two saturated diving systems for delivery in 2015 and 2016.

The sale of our 25% shareholding in Foreland, the private finance initiative which provides and operates 6 military roll-on roll-off vessels for the Ministry of Defence, has been completed for £11.4m in cash and potential further consideration. Further proceeds are contingent on the sale of 2 vessels by Foreland. The proceeds will be utilised to fund further bolt-on acquisitions and capital investment.

Offshore Oil

H1 2013 underlying profit: £9.0m (H1 2012: £7.8m)

The Offshore Oil Division has had another strong start to the year with revenues increasing by 21% and profits by 15%. This reflects the benefit of capital investments in new equipment made in 2012 and the buoyant markets in the North Sea and the growing markets in Latin America, West Africa and Asia Pacific.

Two contracts have been won in Brazil with major Oil & Gas suppliers for the largest well testing contract in the world for Petrobras. Further capital investment is being undertaken to service these contracts which will drive growth in 2013 and future years.

Tankships

H1 2013 underlying profit: £1.7m (H1 2012: £1.2m)

The Tankships market has continued to be stable, with profits increasing through the further rationalisation of tonnage rather than any improvement in the underlying demand in the UK or Ireland.

The results have benefitted from the charter of two vessels to the Ministry of Defence which will last until December.

m.v. Steersman, whose charter was due to expire in March 2013, was sold on behalf of the owners in January. This vessel was the last of the 6,000 tonne vessels in our fleet. Two new vessels, King Fisher and Knight Fisher, have been taken into the fleet in July under an arrangement without a commitment to the high fixed cost of a charter.

Restatement of results

Following a change to the pension accounting rules, the prior period has been restated reducing reported underlying profit by £0.2m in the six months ended 30 June 2012.

Separately disclosed items

In March the Group acquired Divex Limited and its subsidiaries. Costs incurred in making this acquisition of £0.7m and the amortisation of intangible assets that arose on this and previous acquisitions of £0.2m (2012: £0.1m) are disclosed separately to give a better view of the underlying performance of the Group.

Taxation

The effective tax rate on underlying profit before tax in the period was 20.1% (2012: 18.9%). The rate is lower than the standard UK rate of 23.5% due to the Group having operations in certain overseas countries which have lower tax rates than the UK and due to its Tankships' division 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 period to 29.9p per share. This is greater than the increase in underlying operating profit due to reduced interest costs in the period as borrowings were lower in 2013 and pension interest charges were lower. Diluted earnings per share after separately disclosed items was 28.3p per share (2012: 25.9p).

Dividends

The Board is recommending a 10% increase to the interim dividend for the period to 6.46p per share (2012: 5.87p) payable on 1 November 2013 to shareholders on the register on 4 October 2013.

Cash flow and borrowings

Net borrowings increased by £13.0m since 31 December 2012 to £76.1m (30 June 2012: £99.0m). The Group's cash conversion, the ratio of operating cash to operating profit was 134% (2012: 105%) as underlying ebitda (earnings before interest, tax, depreciation, amortisation and separately disclosed items) increased by 11% to £30.8m (2012: £27.8m). Working capital benefitted from £3.0m advance contract payment on 30 June 2013. Operating cash of £29.9m funded interest and tax payments of £5.3m, further investment in capital expenditure of £12.8m, dividends of £5.9m and other payments of £3.7m.

On 5 March 2013, the Group acquired Divex Limited for an initial consideration of £20.8m, which after costs of £0.7m and net of cash acquired with the business of £6.3m resulted in a cash outflow of £15.2m.

At 30 June 2013, the ratio of net borrowings (including guarantees) to earnings before interest, tax, depreciation and amortisation (ebitda) was 1.4 times (2012: 1.9 times). Net gearing, the ratio of net debt to equity, was 45% (2012: 72%).

Balance sheet

The balance sheet at 30 June 2013 shows an increase in intangible assets following the acquisition of Divex in March 2013 which is partly offset by increased other liabilities due to deferred consideration accruals for this business. Net borrowings have decreased by £22.9m in the period and shareholders' equity increased by £30.3m reflecting profitability since June 2012 and the sale of The Railway Engineering Company in December 2012 for £25.5m which realised a gain of £20.9m.

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. 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) have finalised the March 2012 triennial valuation of the scheme's deficit which has resulted in an increased obligation in the period of £4.4m.

We reported a potential liability notified to the Group by the trustees of the Ratings fund (MNRPF) in our Annual Report. We have no further information on this to date.

Total defined benefit pension deficits at 30 June 2013 were £29.7m (2012: £29.8m). The annual instalment on pension schemes in 2013 is expected to be £4.9m (2012: £4.8m).

Directors' Responsibilities

We confirm to the best of our knowledge:

The interim financial report has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union.

The interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the "Disclosure and Transparency Rules", being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the "Disclosure and Transparency Rules", being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party transactions described in the last annual report that could do so.

N P Henry

Chief Executive Officer

S C Kilpatrick

Group Finance Director

For and on behalf of the Board of Directors

19 August 2013

CONDENSED CONSOLIDATED INCOME STATEMENT

for the six months ended 30 June 2013

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2013

CONDENSED CONSOLIDATED BALANCE SHEET

at 30 June 2013

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

for the six months ended 30 June 2013

CONDENSED CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

for the six months ended 30 June 2013

NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS

1 Basis of preparation

James Fisher and Sons Plc (the Company) is a limited liability company incorporated and domiciled in the United Kingdom, whose shares are listed on the London Stock Exchange. The condensed consolidated half yearly financial statements of the Company for the six months ended 30 June 2013 comprise the Company and its subsidiaries (together referred to as the Group) and the Group's interests in jointly controlled entities.

After making enquires, 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 condensed consolidated 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. Movements on the Group's overall net debt position are shown in note 6. The Group has £38,153,000 of undrawn committed facilities at 30 June 2013.

The Group has two revolving credit facilities that are due for renewal in 2014. The Group had drawn down £35,400,000 of these facilities at 30 June 2013. Renewal negotiations will be opened with the banks in due course and the Group has not sought any written commitment that the facilities 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 renewals will not be forthcoming on acceptable terms.

The consolidated financial statements of the Group for the year ended 31 December 2012 are available upon request from the Company's registered office at Fisher House, PO Box 4, Barrow-in-Furness, Cumbria LA14 1HR or at www.james-fisher.co.uk.

The half yearly financial information is presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except where otherwise indicated.

Statement of compliance

The condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 "Interim Financial Reporting" as adopted by the European Union (EU). As required by the Disclosure and Transparency Rules of the Financial Services Authority, the condensed consolidated set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2012 with the exceptions described below. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2012.

The comparative figures for the financial year ended 31 December 2012 are not the Company's statutory accounts for that financial year. Those accounts which were prepared under International Financial Reporting Standards (IFRS) as adopted by the EU (adopted IFRS), have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors 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 498 (2) or (3) of the Companies Act 2006.

The half yearly report was approved for issue by the Board of Directors on 19 August 2013.

Significant accounting policies

With the exception of the matters set out below, the accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2012.

Presentation of items of other comprehensive income

In accordance with the revised requirements of IAS 1, the Group has modified the presentation of items of other comprehensive income in the condensed consolidated statement of other comprehensive income, to present separately items that would be reclassified to profit or loss in the future from those that would never be. The adoption of the amendment to IAS 1 has no impact on the recognised assets, liabilities and comprehensive income of the Group.

Fair value measurement

The measurement and disclosure requirements in relation to fair valuations including the fair values of financial instruments are now contained within a single accounting standard IFRS 13. Some of these disclosures are specifically required in interim financial statements for financial instruments; accordingly, the Group has included additional disclosures in this regard which are included in note 10.

Defined benefit plans

As referred to in note 1 of the Annual Report the Group has adopted the requirements of the amendments to IAS 19 Defined Benefit Plans from 1 January 2013.The long term employee benefit costs are new measured by applying the discount rate previously applied only to the gross liability to the net pension deficit. This results in a reduction in the return on the assets of the pension scheme which were previously calculated using a separate rate of return. The prior year statements have been restated to reflect this change. Application of the standard does not change the valuation of the net pension liability itself. Therefore the restatement relates only to the income statement and to the experience gains and losses recorded as actuarial movements in reserves, together with related tax charges. Further details are presented in note 5.

2 Accounting estimates and judgements

The preparation of half yearly financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements and for the year ended 31 December 2012.

3 Segmental information

Following the acquisition of Divex Limited on 5 March 2013, management has determined that the definition of reported operating segments should be revised to better reflect the nature of the Group's businesses. The new segments, which continue to be based on the products and services provided by the business, are defined as follows:

Marine Support - includes the hire and sale of large scale pneumatic fenders and ship to ship transfer services, and the design and supply of systems for monitoring strains and stress in structures.

Offshore Oil - manufacture and rental of equipment for the offshore oil and gas industry and the design and manufacture of specialist downhole tools and equipment for extracting oil.

Specialist Technical - provision of subsea services including submarine rescue and saturation diving including maintenance, asset management and consultancy services and non-destructive testing, decommissioning and remote operations and monitoring services predominantly to the nuclear industry.

Tankships - engaged in the sea transportation of clean petroleum products in North West Europe.

The main changes to the previous structure are:

- The Fendering mooring and strain businesses are transferred out of the Specialist Technical segment into a new segment, Marine Support.

- The Defence segment together with Divex and the nuclear activities is included within Specialist Technical.

- The Offshore Oil segment is unchanged and the Marine Oil division is renamed "Tankships".

The Board assesses the performance of the segments based on operating profit before central common costs, acquisition costs and amortisation of acquired intangible assets but after the Group's share of the post tax results of associates and joint ventures. The Board believes that such information is the most relevant in evaluating the results of certain segments relative to other entities which operate within these industries.

Inter segmental sales are made using prices determined on an arms length basis.