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James Fisher has wind behind it

RESULTS: James Fisher is growing fast, but the shares don't come cheap
March 6, 2014

Peers are struggling to improve profits, but marine engineer James Fisher (FSJ) had little problem dishing up another serving of double-digit growth last year. Better than expected results were enough to generate both another round of earnings upgrades and a share price break-out above stiff resistance at 1,400p.

IC TIP: Hold at 1468p

Broker N+1 Singer now expects adjusted earnings per share (EPS) of 71.3p this year (from 65.6p in 2013), up 6 per cent on its last estimate. Crucially, Fisher has avoided the difficult US market and exploration sector. Instead, it makes money from the booming sub-sea industry, which is served by both the marine support and specialist technical divisions. Demand for saturation diving systems made by Divex, which Fisher bought a year ago, has done better than expected. This is why the specialist technical almost doubled underlying operating profit to £7.6m. It's also sitting on over £60m of orders, and a lot of new dive support vessels about to be built will want Divex kit, too.

Profit at the larger offshore division grew 15 per cent to £19.7m, buoyed by activity in the Norwegian North Sea and in new deep-sea markets off Brazil and Africa. Adjust for £21m of disposal profits in 2012 and a £9.2m write-down, and pre-tax profits jumped by a fifth to £41.4m at the group level.

JAMES FISHER (FSJ)

ORD PRICE:1,468pMARKET VALUE:£737m
TOUCH:1,468-1,475p12-MONTH HIGH:1,485pLOW:  869p
DIVIDEND YIELD:1.4%PE RATIO:19
NET ASSET VALUE 364p*NET DEBT:30%

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200925024.737.113.6
201026825.939.914.7
201130829.848.416.1
201236346.479.117.7
201341446.276.620
% change+14--3+13

Ex-div: 9 Apr

Payment: 9 May

*Includes intangible assets of £114m, or 226p a share