James Fisher Group buoyant after strong finish to second half of financial year

Barrow-in-Furness marine services group, James Fisher, will report better than expected underlying operating profits for the year to December 31, 2024, driven by a strong second half period and good progress on its turnaround strategy, it said in a trading statement today.

It said good execution, together with a contribution from several specific non-recurring items, will result in group underlying operating profit of approximately £29m, while net debt is expected to be within target range of 1.0-1.5x.

Strategic progress is continuing as planned. The business turnaround strategy, including portfolio simplification, is progressing well, and there is continued investment across all divisions to drive future growth.

The group said its  key end markets, particularly within the energy sector, remained supportive through the second half, enabling it to deliver encouraging year-on-year revenue performance in 2024.

The strategic turnaround initiatives have continued to deliver incremental improvements in profitability which, together with a contribution from several specific non-recurring items in the year, mean that the board now expects the group’s underlying operating profit for FY24 of c.£29m, ahead of current market expectations.

Within the Energy Division, growth was driven by good performances in compressor rentals – both Well Testing services in Africa and the Middle East) – and in Bubble Curtains to support offshore windfarm construction in North America.

In addition, the division benefited from the sale of Life of Field assets and successfully progressed its contract in Mozambique for the development of a new Liquified Natural Gas (LNG) plant, which will conclude in Q1 2025.

While procurement decisions for a number of significant programmes continued to progress slowly, the Defence Division delivered a stronger fourth quarter, securing notable contract wins in Australia, India and other parts of Asia. As a result, the division carries forward a growing orderbook, with c.60% of 2025 revenue secured from long term contracts.

In Maritime Transport, the group completed the planned sale of the Raleigh Fisher, in December 2024, for around £10m.

However, continued high LNG inventory levels have impacted the market for ship-to-ship transfers in 2024, resulting in a weaker than expected performance in Fendercare.

In support of the group’s key organic growth initiatives, capital investment in 2024 was c.£31m.

Approximately half of the investment was made in the Energy Division, including spend on a new fleet of compressors, as well as upgrades to existing compressors to support growth opportunities which have been identified.

The remaining expenditure was largely focused on the Maritime Transport division, continuing the Tankships fleet replacement programme and in Defence the group continued to invest in future product development.

Fisher said it has completed the first chapter of its business turnaround and made good progress in FY24 to focus and simplify the portfolio, building a more resilient financial foundation for growth.

The group strengthened its balance sheet, significantly reducing debt through the sale of non-core businesses, notably RMSpumptools in July and Martek Marine in September, alongside improved cash management.

Net debt at year end is expected to be less than £60m, with Net Debt to EBITDA within the company’s target range of 1.0 – 1.5x.

In September 2024, James Fisher refinanced and secured a single committed facility of £95m, consisting of a three years £75m Revolving Credit Facility and a £20m term loan for five years.

It was agreed on improved terms, with increased flexibility to operate the business, while significantly reducing overall maintenance costs associated with the previous facility.

Looking ahead, while conditions in key end markets are expected to remain supportive in 2025, underpinned by structural drivers, the group remains mindful of the continued near term political and economic uncertainty.

Against this backdrop, the focus remains on delivering against the turnaround plan, with the next phase of initiatives now under way.

The board sees opportunities to build on progress made to date and drive the business further towards its medium term target of 10% underlying operating profit margin.

Trading in the early part of the new year has been in line with expectations and the board remains confident in delivering further progress in 2025. 

CEO, Jean Vernet, said: “I am encouraged by our 2024 performance which will show underlying profit ahead of expectations, together with an improved cash position.

“We ended the year in a stronger position having continued to execute on our turnaround strategy, including undertaking disposals and refinancing our debt facilities.

“As a result, we are now beginning to see the benefits of our transformation programme coming through.”

The group expects to announce its full year results for the year ended December 31,  2024, on March 20.