12.02.2025
The Barrow-in-Furness, Cumbria–based James Fisher and Sons (LON:FSJ) is a leading provider of unique marine solutions in Energy, Defence and Maritime Transport.
The £172m-capitalised group has developed unparalleled operational expertise in harsh environments, delivering specialised solutions across the defence, energy and maritime transport sectors, ranging from offshore wind farm commissioning to submarine and hyperbaric rescue and support.
As an innovative and fast-growing organisation, its highly skilled team and over 175-year heritage enable it to deliver solutions to the most demanding operational and technical challenges faced by its customers around the world.
Over the years it has become a trusted partner of major corporations, government agencies and other valued customers around the world.
The Business
The group, which dates back to the 1840’s, is today a leading provider of specialised services to the marine, oil and gas and other high assurance industries worldwide.
Over the years the company has built itself up from its origins as a ship owner and operator.
It has developed unparalleled operational expertise in the marine environment, providing comprehensive products, services and support to the oil and gas, marine renewables, shipping and defence industries.
Its customers are predominantly large multinational corporations, governments and other high assurance counterparties.
In the Oil and Gas sector it is a world leader in the provision of specialist products and support services, and in being a provider of turnkey operations to major corporations, while it provides the Renewable Energy sector with integrated marine solutions, as an experienced project manager, delivering successful and cost effective offshore renewable energy projects.
The Defence sector recognises the group as a world leader in submarine rescue for and provider of specialist solutions, it provides fast, safe and reliable subsea rescue services, underwater systems and life support capabilities for the defence and commercial diving markets, while providing products, engineering services and training to 80 countries and to 33 of the world’s navies including the Royal Navy, Australian, Singapore, India and South Korean Navies.
For the Maritime Transport sector, it is acknowledged as a trusted marine expert and innovator, for whom it is a leading provider of targeted coastal shipping and global oil and natural gas ship-to-ship transfer services.
International Customers
Obviously dealing with so many sectors, it is able to boast of a broad and diversified global client base, which includes large multinational customers and governments, across all the market sectors it serves.
The list of clients includes: Airbus, BP, Chevron, ConocoPhillips, EDF Energy, ExxonMobil, Expro Group, Halliburton, Maersk Oil and Gas, Ministry of Defence, Schlumberger, Sellafield Limited, Shell, Total, and Weatherford amongst hundreds of others.
Business Turnaround And Strengthening Balance Sheet
Last year the group completed the first chapter of its business turnaround and made good progress in its aims to focus and simplify the portfolio, while building a more resilient financial foundation for growth.
It strengthened its balance sheet, significantly reducing debt through the sale of non-core businesses, 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, the group 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, on improved terms, with increased flexibility to operate the business, while significantly reducing overall maintenance costs associated with the previous facility.
2024 Trading Update
Last Wednesday, 5th February, the group provided an Update on its Trading in the year to end-December 2024.
It noted that the group had made solid overall trading performance through the second half supported by end-markets.
Guiding the market, the business indicated that its underlying operating profit of some £29m for the year, will be ahead of current market expectations.
It further reported that strategic progress had been continuing as planned, with its business turnaround strategy, including portfolio simplification progressing well; as well the group’s facilities were refinanced in September 2024, while its continued investment across all Divisions will help to drive future growth.
Management Comment
CEO Jean Vernet stated that:
"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.''
Current Year Outlook
Whilst 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 underway.
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.
The Equity
The group has a total of 50,398,063 shares in issue.
Significant holders include the Trustees of the Sir John Fisher Foundation (21.04%), Schroder Investment Management (10.02%), Odyssean Capital (7.14%), Aberforth Partners (6.47%), FIL Investment Advisors (6.27%), NFU Mutual Investment Services (5.41%), Baillie Gifford (4.81%), Invesco Asset Management (3.82%), Threadneedle Asset Management (3.23%) and Norges Bank Investment Management (2.98%).
Analyst Views
There are some five analysts who follow the company, all of whom rate the group’s shares as a Buy, with 518p being the average consensus Target Price.
Estimates for the 2024 revenues are around £446.0m, with underlying profits of £24.9m, and 10.4p earnings per share.
For the current year the consensus estimates suggest £433.1m revenues, but with £27.2m underlying profits and 21.2p per share in earnings.
The year to end-December 2026 could see £456.1m revenues, and £32.6m of profits, generating earnings of 26.7p per share.
On last week’s Trading Update, analyst Alexander Paterson, at Peel Hunt, was confident that the good 2024 momentum can continue in 2025, accordingly he reiterated his ‘buy’ recommendation and target price of 425p.
The positive upswing was helped by the defence division’s strong fourth quarter when it secured notable contract wins in Australia, India and other parts of Asia.
“After several challenging years, this is an encouraging update, with strategic progress continuing as planned, as is investment across the divisions to drive future growth.”
In My View
Five years ago, the group’s shares were trading at over 2,000p each, they fell away steeply over the following two years, before levelling out to range between 260p and 440p.
I seem to have been following this group for decades, typical of the conditions that it can operate in, it has suffered from choppy waters in those years.
However, I have always liked the business model.
But are those waters calming out now?
Undoubtedly, we will get further updating on its current trading when the group announces its 2024 Final Results on Thursday 20th March.
Now at just 342p, valuing the group at £172m, I suggest that risk-tolerant investors should make a position for this group’s shares in their portfolios.
I see the shares breaking into the 400p to 420p range very soon.
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