James Fisher and Sons Regulatory News (FSJ)

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

25 October 2021

James Fisher and Sons plc

Trading update

James Fisher and Sons plc (FSJ.L) ('James Fisher', 'the Group'), the leading marine service provider, today publishes a trading update.

· Following a difficult start to the year, improvement in the Fendercare ship-to-ship transfer business remains below the rate previously expected, with some growing evidence of market shifts in some key territories.

· JFD has reached an impasse in negotiations over c.£2m due on a long-term project and is no longer forecasting a resolution in 2021.

· Customers of the Group's Marine Contracting, Decommissioning and Nuclear businesses have further delayed projects in recent weeks. The projects were previously expected to commence, and in some cases finish, in 2021. The continuing challenges presented by the global pandemic, particularly in the safe mobilisation of teams to work sites, have influenced customer decision-making processes.

· A recent deterioration in the condition of a financially distressed customer has increased bad debt risk by c.£2m.

· Tankships experienced a poor month in September and as a result has a more cautious outlook for the full year.

· Revenue in the quarter ended 30 September 2021 was 7.6% higher than Q3 2020 and 8.7% higher than Q2 of 2021. Year to date revenue is 3.9% below prior year.

· The Board now anticipates Underlying Operating Profit for the full year, before separately disclosed items, to be in the range of £27m - £32m.

The Group continues to trade within its banking covenants (which are formally measured at each half year end) and at 30 September had headroom of c.£100m against its revolving credit facilities.

In response to the latest short-term trading outlook, management is performing a detailed review of the Group's cost base and balance sheet. Aligned with the Board's commitment to 'fix or exit' non-core and underperforming businesses, the Group is continuing to advance at pace the divestment of non-core businesses and assets aimed at generating significant proceeds over the next year, to reduce net debt and financial leverage as well as to simplify the business.

Notwithstanding some revenue opportunity moving from Q4 2021 to 2022, the Board currently expects this to be materially offset by the continuation of challenges the Group is currently experiencing with customer demand and the safe mobilisation of teams to work sites.

The Board remains confident in the Group's strategy to deliver sustainable profitable growth from the significant market opportunities that are available to it and remains committed to executing on its long-term strategy.

Divisional Summary

Marine Support

The Fendercare ship-to-ship transfer business has continued to improve, but still not at the rate previously expected. There is growing evidence of market shifts in some key territories and the management team is conducting a detailed review of locations and trading partners to ensure that the business has the optimal mix of each.

Marine Contracting is trading ahead of prior year but has suffered from recent customer and weather delays that have pushed projects into H1 2022. Within our Renewables franchise EDS, the high voltage specialist, continues to perform well and has recently signed two multi-year, multi-million pound contracts with tier 1 contractors for monitoring services in Northern Europe, and more of these contracts remain in the sales pipeline. There has been no material change in the situation in Mozambique. The LNG projects remain suspended and dispute resolution discussions with our clients are ongoing. The Digital and Data Services businesses are in line with expectations and have strong order books.

Offshore Oil

The ScanTech businesses continue to perform well, showing strong growth over 2020 as demand for well-testing services, compressors and other asset rentals continues. ScanTech's bubble curtain offering to the Renewables market is continuing to see high demand with YTD revenue twice that achieved in the same period of 2020. RMSpumptools remains in line with expectations. The James Fisher Offshore business has experienced multiple delays to awarded projects and, following a recent deterioration in the condition of a financially distressed customer has increased bad debt risk of c.£2m. The most recent example being a customer delaying a multi-million dollar decommissioning project scheduled for Q4 2021 into 2022. Although frustrating, the order book is strong and demand for decommissioning services continues to show growth.

Specialist Technical

JFD's short-cycle diving equipment and training revenues remain soft, as previously announced, and are expected to remain so until well into 2022. In addition, the business has reached an impasse in negotiations over c.£2m due on a long-term project and is no longer forecasting a resolution in 2021.

The nuclear decommissioning business is in line with expectations at the end of Q3, however a major customer has unexpectedly deferred the award of new projects planned for Q4 2021 into 2022, leaving JFN with a shortfall for the remainder of the year. The business is focusing on short-term cost saving measures to mitigate the impact.

Tankships

Following a consistent trend of improvements in trading from February to August, the Tankships division experienced lower volumes of cargo and subdued market spot rates in September. It is not expected that the business will be able to recover the September shortfall and management has a more cautious outlook for the remainder of the year.

Group Revenue (unaudited)

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