Final Results

Fisher (James) & Sons PLC 13 March 2001 13 March 2001 James Fisher and Sons Public Limited Company Preliminary announcement Results for the year ended 31 December 2000 Summary 2000 1999 Turnover £61.27m £68.13m Profit before tax £5.01m £6.28m Earnings per share 9.34p 37.41p Adjusted earnings per share 10.78p 11.90p Diluted earnings per share 9.29p 37.26p Final dividend per ordinary share 2.95p 2.81p Total dividend per ordinary share 4.65p 4.35p * Lower pre-tax profit reflects difficult trading in second half and loss of trading profit on sale of two ships * Solid cash flow from operating units * Final dividend increases total payment by 7 per cent Prospects David B. Cobb, Executive Chairman, comments: 'Our tanker fleet continues with a strong contract of affreightment and time charter income and whilst still coping with port performances, which in some areas have improved, should provide a core profit in the year ahead.' Enquiries: David B. Cobb, CBE, Executive Chairman Tel: 020 7338 5808 Issued on behalf of James Fisher and Sons Public Limited Company by Tavistock Communications Limited (contact: Keith Payne, tel: 020 7600 2288) Chairman's statement 2000 Results and Dividend I am pleased to report on another successful year albeit less profitable than in 1999 due principally to market forces outside our control. Group turnover of £61,261,000 was down from £68,129,000 in 1999 due to the value associated with the purchase and sale of two vessels in 1999 which were sold prior to a planned conversion project. Pre tax profit of £5,007,000 was lower than 1999 (£6,275,000), reflecting difficult trading in the second half and the loss of trading profit in 1999 on the sale of the two ships referred to above. Your board recommends a final dividend of 2.95 per share, payable on 18 May 2001, making a total of 4.65p per share for the year (1999 - 4.35p per share), an increase of 7%. Shipping The dry cargo vessels, one of which was sold in December 2000, produced an operating loss of £956,000 Since the year end we have sold another dry cargo vessel and now have only three ships in the trade all of which are planned for disposal. The tanker fleet results were hampered by port performances, higher bunker costs and a major repair which took much longer than anticipated. Notwithstanding these drawbacks the tanker fleet still produced an operating profit of £6,618,000. Our cable ship, Nexus, had another very good year and is now on charter with Global Marine Systems Limited until December 2002. New Generation, our roll on-roll off ship had a reasonable year, making a small profit while the Oakleaf, our replenishment tanker on charter to the Ministry of Defence until at least September 2002, had another successful year. Management Contracts The BNFL plc management contract and the contract to manage RAF Sealand produced very satisfactory results. Engineering James Fisher (Underwater Engineering Services) Limited had yet another profitable year with an operating profit of £486,000 on a turnover of £ 1,622,000. During the year we moved into larger freehold premises in Aberdeen which will enable work capacity on a variety of offshore projects to be increased. James Fisher and Sons (Seafloor Dynamex) Limited, our hydro-digger company, produced an operating loss of £363,000. Although we will continue to account for Seafloor Dynamex, as a separate profit centre, the operations have been merged with those of Underwater Engineering Services to create a more efficient unit hiring the equipment to offshore operators, most of whom are already customers of Underwater Engineering Services. Ports The potential sale of part of the port of Newhaven, including the land we lease, has been the subject of protracted negotiations between Newhaven Port and Properties Limited, a subsidiary of Sea Containers Limited, and a French company based in Rouen. Although not party to these negotiations we await the outcome with interest as it will involve the French company's designated port operator using our leasehold land and buildings and our refrigeration plant. We are hopeful that a sensible and satisfactory agreement will be concluded between all of the parties such that our long-term leases and commitments will come to an end. Tonnage Tax We have entered into discussions with the Inland Revenue to elect to enter the tonnage tax regime. The approval of a training commitment is a prerequisite of entering tonnage tax and our training programme, which has been submitted to the DETR, has been approved. Our results to 31 December 2000 reflect that we are committed to entering the tonnage tax system. Offices We have completed our office move from Liverpool to Barrow. The technical, marine, naval architects, planning, purchasing and personnel departments are all operating in an attractive open-plan floor in a fine working environment. E-Commerce More progress has been made during 2000 in the area of e-commerce. Though our website was not designed as a trading portal, it has generated international business that would otherwise have been missed. We were approached by a company in Africa to sell tools from Underwater Engineering Services. More significant is the progress we have made linking operations between ourselves and customers. By viewing customer systems on-line we can speed communication and improve accuracy - a small beginning for a more comprehensive exchange and linkage between elements of the supply chain. Long Term Incentive Plan You will see from the notice of meeting that it is proposed to introduce a Long Term Incentive Plan. A circular is to be sent to all shareholders informing them of the principal features of the plan. Your directors believe that the proposal, which has been drawn up in consultation with their professional advisors, Bacon & Woodrow, is in the best interests of the company and recommend you vote in favour of the resolution. Directors Angus Buchanan, managing director of the subsidiary James Fisher Tankships Limited, has been appointed Group Shipping Operations Director. In this capacity he will be responsible for all the group's shipping activities. At the same time Ian Serjent, managing director of the subsidiary James Fisher (Shipping Services) Limited, has become Group Technical Director with responsibility for all technical aspects of the group and the director in charge of all non-shipping activities including commercial matters relating to offshore operations. Mike Shields continues as Group Finance Director. Employees The changes made to our operations and our results in difficult conditions could not have been achieved without the hard work and understanding of all our employees. I thank them, onshore and at sea, for their continuing support. Prospects The conversions of two cable ships, to be named Oceanic Princess and Oceanic Pearl, continue at the Viktor Lenac Shipyard in Croatia. Unfortunately the conversions are behind schedule and the ships will not be delivered until mid April and mid June respectively. The late delivery of the vessels, while disappointing, does not affect the length of term of the charter party to it International. The vessels are costing more than expected due to the operational requirements of the ships which require sophisticated cable monitoring equipment, more engine and thruster power, larger accommodation resulting in increased life-saving equipment, mess room, provision/ refrigerated store facilities and larger air conditioning facilities etc. The increased cost is being borne by us with the charter hire increased accordingly. We are looking forward to accepting these ships into our fleet and to their producing the results we expect of them. The Fisher Cavalier, the diving-support ship owned by Fisher Offshore Services Limited, our joint-venture company with Cammell Laird, is now operating in the Persian Gulf on charter to a French company using divers based in Sharjah. This charter should produce good results. Our tanker fleet continues with a strong contract of affreightment and time charter income and whilst still coping with port performances, which in some areas have improved, should provide a core profit in the year ahead. Our contract and design work with BNFL plc continues apace whilst Underwater Engineering Services has had an encouraging start to the year. The contract to manage RAF Sealand has been extended and now expires at the end of October 2002, with the possibility of a further extension. Seafloor Dynamex has entered into an agreement which may result in the sale of one hydro-digger spread to a company in Nigeria at a fair profit. This will leave us with one full spread and two diggers for our own operations. Whilst we have used a substantial amount of our cash in hand on the conversion of the Oceanic Princess, Oceanic Pearl and the purchase of the Fisher Cavalier, we are generating a solid cash flow from our operating units which should soon replenish our coffers. We are a 25% shareholder in the company AWSR Limited which was awarded the contract to build, operate, manage and charter for two years a fleet of six 10,000 tonne ro-ro ships for the Ministry of Defence. Four of the ships will be built in Germany and two at Harland and Wolff in Belfast. We expect the first ship to be delivered early next year and the others at intervals of three/four months. This is an exciting contract, 100% leased with a consortium of banks under a Public Private Partnership agreement and is expected to produce good cash flows and a solid return on investment. D.B. Cobb CBE Executive Chairman Group profit and loss account Year ended Year ended 31 December 31 December 2000 1999 £000 £000 Turnover 61,261 68,129 Cost of sales (51,467) (56,316) Gross profit 9,794 11,813 Administrative expenses: Exceptional - relocation costs (103) (281) Others (3,053) (2,994) (3,156) (3,275) Operating profit 6,638 8,538 Loss on sale of ships (162) (153) Interest receivable 693 1,073 Interest payable (2,162) (3,183) Profit on ordinary activities before taxation 5,007 6,275 Tax on profit on ordinary activities (506) 11,712 Profit for the financial year 4,501 17,987 Dividends paid and proposed Non-equity (4) (4) Equity (2,244) (2,099) (2,248) (2,103) Retained profit for the financial year 2,253 15,884 pence pence Earnings per share 9.34 37.41 Adjusted earnings per share 10.78 11.90 Diluted earnings per share 9.29 37.26 Equity dividends per share: Interim 1.70 1.54 Final - proposed 2.95 2.81 4.65 4.35 All results are from continuing operations. There are no recognised gains or losses in either year other than the profit for that financial year. Group balance sheet at 31 at 31 December December 2000 1999 £000 £000 Fixed assets Intangible assets - goodwill 655 693 Tangible assets 117,066 90,428 Investments 107 - 117,828 91,121 Current assets Stocks 854 709 Debtors 12,241 10,604 Cash and short-term deposits 5,914 21,717 19,009 33,030 Creditors: amounts falling due within one year Trade and other (12,242) (10,896) Bank loans (6,949) (5,551) (19,191) (16,447) Net current (liabilities)/assets (182) 16,583 Total assets less current liabilities 117,646 107,704 Creditors: amounts falling due after more than one year Trade and other (37) (11) Bank loans (45,633) (37,548) (45,670) (37,559) Provisions for liabilities and charges (2,287) (2,709) Net assets 69,689 67,436 Capital and reserves Called-up share capital 12,168 12,168 Share premium account 23,050 23,050 Profit and loss account 34,471 32,218 Shareholders' funds 69,689 67,436 Group cash flow statement Year ended 31 Year ended 31 December December 2000 1999 £000 £000 Net cash inflow from operating activities 13,097 14,837 Returns on investments and servicing of finance (2,012) (2,046) Taxation 22 (1,347) Capital expenditure and financial investment (32,726) (439) Acquisitions and disposals (629) (246) Equity dividends paid (2,176) (1,877) Cash (outflow)/inflow before management of liquid resources and financing (24,424) 8,882 Management of liquid resources 17,689 (4,582) Financing 8,621 (4,561) Increase/(decrease) in cash in the year 1,886 (261) Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the year 1,886 (261) Cash (inflow)/outflow from (increase)/ decrease in debt (8,621) 4,561 Cash (inflow)/outflow from (decrease)/ increase in liquid resources (17,689) 4,582 Movement in net debt in the year (24,424) 8,882 Net debt at 1 January (21,382) (30,264) Net debt at 31 December (45,806) (21,382) NOTES 1 Financial information The financial information set out above does not comprise the company's statutory accounts. Statutory accounts for the previous financial year ended 31 December 1999 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) or the Companies Act 1985. The auditors have given an unqualified opinion on the accounts for the year ended 31 December 2000 which will be delivered to the Registrar of Companies following the annual general meeting. The financial information above has been prepared on the basis of the accounting policies as set out in the annual report and accounts for the year ended 31 December 1999. 2 Segmental analysis Geographical market supplied 2000 1999 £000 % £000 % Turnover United Kingdom and the Republic of Ireland 56,617 92 56,602 83 Continental Europe 4,274 7 10,626 15 Africa 2 - 45 - Asia 1 - 551 1 Middle East 367 1 304 1 Others - - 1 - 61,261 100 68,129 100 Turnover and profit on ordinary activities before taxation 2000 1999 Turnover Profit Turnover Profit Group £000 £000 £000 £000 Shipping operations: Trading 59,446 6,618 66,177 8,432 Loss on sale of ships - (162) - (153) Exceptional relocation costs - (103) - (281) 59,446 6,353 66,177 7,998 Engineering operations: 1,815 123 1,952 387 61,261 6,476 68,129 8,385 Net interest payable (1,469) (2,110) 5,007 6,275 3 Operating profit Operating profit is stated after charging depreciation of tangible fixed assets of £7,385,000 (1999 £8,034,000) and amortisation of goodwill of £ 38,000 (1999 £38,000). 4 Tax on profit on ordinary activities 2000 1999 £000 £000 The charge/(credit) for taxation on the ordinary activities represents: UK tonnage tax 30 - UK corporation tax at 30% (1999 30.25%) 17 760 47 760 Irrecoverable ACT 127 - Adjustments in respect of prior years: UK corporation tax 332 (216) Deferred taxation - (12,256) 506 (11,712) 5 Cash flow statement (a) Reconciliation of operating profit to net cash inflow from operating activities 2000 1999 £000 £000 Operating profit 6,638 8,538 Depreciation and refit amortisation 7,385 8,034 Amortisation of goodwill 38 38 (Increase)/decrease in stocks (145) 8 (Increase)/decrease in debtors (1,209) 131 Increase/(decrease) in creditors 787 (1,196) Profit on sale of tangible fixed assets (136) (124) Share of profit from joint venture (56) - Decrease in provisions (205) (592) Net cash inflow from operating activities 13,097 14,837 (b) Returns on investments and servicing of finance 2000 1999 £000 £000 Interest received 765 1,042 Interest paid (2,773) (3,084) Preference dividend paid (4) (4) Net cash outflow (2,012) (2,046) (c) Taxation 2000 1999 £000 £000 Corporation tax paid (121) (1,347) Corporation tax received 143 - Net cash inflow/(outflow) 22 (1,347) (d) Capital expenditure and financial investment Purchase of tangible fixed assets (33,390) (3,773) Sale of tangible fixed assets 664 3,334 Net cash outflow (32,726) (439) (e) Acquisitions and disposals Purchase of interest in joint venture (51) - Cost associated with discontinued port operations (578) (246) Net cash outflow (629) (246) (f) Management of liquid resources Short-term investments 17,689 (4,582) (g) Financing New secured loans 30,034 990 Repayment of secured loans (20,551) (5,551) Loan to joint venture (862) - Net cash inflow/(outflow) 8,621 (4,561) (h) Reconciliation of net debt 1 Cash 31 January Flow December 2000 2000 £000 £000 £000 Cash in hand, at bank 2,639 1,886 4,525 Debt due after one year (37,548) (7,223) (44,771) Debt due within one year (5,551) (1,398) (6,949) (43,099) (8,621) (51,720) Short term deposits 19,078 (17,689) 1,389 Net debt (21,382) (24,424) (45,806) 6 Earnings per share The calculations of earnings per share are based on the following profits and numbers of shares. Basic Basic Diluted Diluted 2000 1999 2000 1999 £000 £000 £000 £000 Profit for the financial year 4,501 17,987 4,501 17,987 Preference dividends (4) (4) (4) (4) 4,497 17,983 4,497 17,983 Weighted average number of shares: 2000 1999 Number Number of of shares shares For basic earnings per share 48,156,317 48,075,530 Exercise of share options 268,235 180,742 For diluted earnings per share 48,424,552 48,256,272 The adjusted earnings per share is shown to highlight the underlying earnings trend and is calculated using the same number of shares for the basic earnings calculation referred to above and the amounts shown below: 2000 2000 1999 1999 £000 p £000 p Basic earnings per share 9.34 37.41 Adjustments Exceptional reorganisation expenses 103 0.21 281 0.58 Loss on sale of ships 162 0.34 153 0.32 Tax effect of above (31) (0.06) (222) (0.46) Irrecoverable ACT 127 0.26 - - Prior year element of tax charge 332 0.69 (12,472) (25.95) 693 1.44 (12,260) (25.51) Adjusted earnings per share 10.78 11.90 Adjusted earnings per share in 1999 has been restated to include the prior year element of the corporation tax charge. 7 Dividends paid and proposed The directors are recommending a final ordinary dividend of 2.95p per ordinary share which will be payable on 18 May 2001 to ordinary shareholders on the Register on 17 April 2001, making a total for the year of 4.65p per share. This compares with a final dividend for 1999 of 2.81p per share and a total distribution for 1999 of 4.35p per share. The dividend warrants will be posted on Thursday 17 May 2001 by first class mail. 2000 1999 £000 £000 Rates of dividend paid and proposed amount absorbed thereby: Equity: Ordinary interim paid of 1.70p per share (1999 1.54p per share) 820 743 Ordinary final proposed of 2.95p per share (1999 2.81p per share) 1,424 1,356 Non-equity: 3.5% Preference paid (1999 3.5%) 4 4 2,248 2,103 The ordinary dividends are based upon the following number of ordinary issued shares: 2000 1999 No. No. Interim 48,270,098 48,270,098 Final 48,270,098 48,270,098 8 The AGM will be held at 12.00 noon on Friday 11 May 2001 at the Lidsoonie Hotel, Abbey Road, Barrow-in-Furness, Cumbria. 9 Report and Accounts will be posted to members on 5 April 2001. Copies will be made available to members of the public at Fisher House, P.O. Box 4, Barrow-in-Furness, Cumbria, LA14 1HR. 10 This preliminary statement was approved by the Board of Directors on 13 March 2001.

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