Investors flocked to buy James Fisher's (FSJ) shares following the publication of forecast-beating full-year numbers. The subsequent 13 per cent rise in the share price should therefore be viewed as vindication of the marine services group's navigation through difficult trading conditions.
The decline in work for the offshore oil division evident at the half-year results continued through to December, and resulted in a 67 per cent drop in the segment's underlying operating profit to £7.4m. Despite this, gross margins held up thanks to a 25 per cent fall in headcount and a £3.3m reduction in ongoing costs. Strip out oil services, and James Fisher had a very strong year. Margins in the marine support and tankships businesses widened by 1.4 and 4.8 percentage points, respectively, and together with the specialist technical segment, contributed to a 31 per cent leap in underlying profit.
Shrinking revenue from oil and gas clients could also soon be replaced by new business. Management now hopes a recently awarded marine services contract for a North Sea wind farm will lead to a strong pipeline of renewable energy projects.
Broker Investec Securities now expects pre-tax profit of £42.5m this year, giving EPS of 71.2p. That compares with £41.2m and 68.5p in 2015.
JAMES FISHER (FSJ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,143p | MARKET VALUE: | £573m | |
| TOUCH: | 1,143-1,146p | 12-MONTH HIGH: | 1,443p | LOW: 895p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 435p* | NET DEBT: | 43% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 308 | 29.8 | 48.4 | 16.1 |
| 2012 | 363 | 46.4 | 79.1 | 17.7 |
| 2013 | 414 | 46.2 | 76.6 | 20.0 |
| 2014 | 445 | 49.2 | 80.2 | 22.0 |
| 2015 | 438 | 46.2 | 79.7 | 23.8 |
| % change | -2 | -6 | -1 | +8 |
Ex-div: 7 Apr Payment: 6 May *Includes intangible assets of £157m, or 312p a share | ||||
