James Fisher's strategy of driving sales in higher growth regions like Australia, Africa and Brazil is a simple one, but has been very effective over the past five years. The core marine support services business claims responsibility for these better than expected results which fully justify our confidence in the shares.
Over 60 per cent of revenue flowed in from overseas during 2011, and excluding the struggling tankships business, about 70 per cent. According to chairman Tim Harris, Asia Pacific was made the most significant contribution "by a long way" and the region is growing fast.
At the group's specialist technical unit there was a 22 per cent surge in second-half underlying profits and overall the division's profits were up 7 per cent over the year to £19.8m, some way ahead of City forecasts. But the increased use of chartered-in vessels sliced margins by 180 basis points to 14 per cent, although underlying margin held up well. Chrtered tugs will also be used to service Fisher's new contract with BP Angola, worth "millions", and the trend is expected to continue.
Exploration growth and recovering demand in the North Sea helped boost offshore oil revenue by 22 per cent and profits were 16 per cent better. Overall, sales from marine services grew 23 per cent to £241m, giving a compound annual growth rate of 37 per cent since 2004, according to broker Investec. Fisher's small nuclear operation did much better, too.
Investec maintains forecasts for adjusted pre-tax profit of £32m in 2012, giving adjusted EPS of 50.6p (2011: £30m/48.3p).
JAMES FISHER (FSJ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 565p | MARKET VALUE: | £ 283m | |
| TOUCH: | 558-570p | 12-MONTH HIGH: | 575p | LOW: 420p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 12 | |
| NET ASSET VALUE | 263p* | NET DEBT: | 75% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 182 | 19.1 | 32.7 | 11.4 |
| 2008 | 234 | 23.6 | 36.9 | 13.0 |
| 2009 | 250 | 24.7 | 37.1 | 13.6 |
| 2010 | 268 | 25.9 | 39.9 | 14.7 |
| 2011 | 308 | 29.8 | 48.4 | 16.1 |
| % change | +15 | +15 | +21 | +9 |
Ex-div: 11 Apr Payment: 11 May * Includes intagibles of £93m or 186p per share | ||||
