Interim Results
Fisher (James) & Sons PLC
23 August 2005
James Fisher and Sons plc
('James Fisher' or 'the Company')
Interim Results
James Fisher, the marine services provider, announces Interim Results for the
six months ended 30 June 2005 with an 8% increase in pre-tax profits after
adjustment for losses on ship disposals and exchange movements on loans. It
continued to enjoy strong cash flow.
The Marine Support Services Division now accounts for 42% of operating profits
(H1 2004: 37%), as the Company's largest division.
Financial Highlights
% 2005 2004
• Turnover +25% £48.9m £39.1m
• Profit from operations before loss of ship disposals +7% £8.3m £7.8m
• Pre-tax profit after adjustment for ship disposals and +8% £7.8m £7.2m
exchange movements on loan conversion
• Basic earnings per share -11% 11.28p 12.71p
• Basic earnings per share after adjustment for ship disposals
and exchange movements on loan conversion +13% 14.44p 12.80p
• Interim dividend per share +12% 3.10p 2.77p
Operational Highlights
• Main profits growth from Marine Support Services division.
• Marine Oil Services division fleet modernisation underway -
satisfactory performance on less ship capacity.
• Cable Ships Division shows first signs of possible market upturn.
• Recent rescue of Russian submariners by James Fisher Rumic team under
Royal Navy builds international reputation in marine support
services.
• £12m FenderCare acquisition Group's largest to date, now fully
integrated.
• Strategy focusing on growing marine service activities both
organically and by acquisition in three core areas: Defence, the
North Sea and specialist technical services, including the nuclear
industry.
Commenting on the outlook, Chairman, Tim Harris, CBE, said:
'James Fisher's goal is to be the UK's leading marine service company, with a
clear strategy to achieve it. In recent years, we have developed a consistent
track record of achievement, these half year results being the latest step.
'Cable Ships do not form part of this strategy, although it has been our policy
to play a waiting game sheltered by the General Dynamics income. The Oceanic
Princess' first work for 21/2 years is a positive development. We shall seek to
explore carefully over the next few months how best to maximise what potential
value there is from our two vessels.
'We are confident about the core James Fisher business and our ability to
continue to demonstrate our track record of achievement and to grow profits and
value for our shareholders.'
For further information:
James Fisher and Sons plc Binns & Co PR Ltd
Tim Harris, Chairman Peter Binns Tel: 020 7153 1477
Nick Henry, Chief Executive Paul McManus Tel: 020 7153 1485
Michael Shields, Finance Director Mob: 07980 541 893
Tel: 020 7338 5808
www.james-fisher.co.uk
CHAIRMAN'S STATEMENT
Highlights
2005 2004
Turnover 25% £48.9m £39.1m
Profit from operations before ship disposals 7% £8.3m £7.8m
Pre tax profit after adjustment for ship disposals and exchange 8% £7.8m £7.2m
movements on loan conversion
Basic earnings per share (11%) 11.28p 12.71p
Basic earnings per share after adjustment for ship disposals and
exchange movements on loan conversion 13% 14.44p 12.80p
Interim dividends per share 12% 3.10p 2.77p
Overview
Pre tax profits for the first half were up by 8% after adjustment is made for
losses on ship disposals of £1.4 million and exchange movements on loan
conversion. Adjusted earnings per share were up by 13% over 2004. Importantly,
the prime source of profits' growth was our Marine Support Services division.
The Marine Oil Services division is still going through its fleet modernisation
programme but produced a satisfactory result with less ship capacity than last
year. Oceanic Princess, one of our two cable layers, worked for the first time
since December 2002, possibly indicating the first stirrings of life in the
market which has been severely depressed for a long time.
The recent rescue of the seven Russian submariners by the James Fisher Rumic
team under Royal Navy command was a great commendation of their internationally
recognised skills and can only help our reputation as a marine service company
of quality.
We completed the acquisition of FenderCare for up to £12.0 million in March, our
largest acquisition to date. The initial consideration was £11.275 million and
despite this payment, our financial position remains strong with gearing at 57%
and we are well positioned to take forward our established strategy with vigour.
Objectives and Strategy
Our objective is to become the UK's leading marine service provider building on
our core expertise of the practical application of operational and engineering
skills in the marine sector. Our strategy is to focus on growing our marine
service activities both organically and by acquisition.
Our acquisitions have been focused on three core areas - defence, the North Sea
(Scan Tech) and specialist technical services including those to the nuclear
industry, with preferred acquisitions being located close to and/or in
competition with our existing operations. A particular feature has been that,
in most cases, we have been able to keep existing management which has enabled
us to create an experienced and entrepreneurial team quicker than would
otherwise have been possible. So far, we have tended to approach companies
identified through our own research rather than enter public or private sales
processes. We have now completed 8 acquisitions over the last 3 years, all of
these have been financed out of our existing cash resources, starting with Rumic
for £4.0 million in 2002 and including Scan Tech AS £8.8 million (2003), Air
Supply AS £4.8 million (2003), MIMIC £3.1 million (2003), Remote Marine Systems
Ltd and Nuclear Decommissioning Ltd £4.9 million (2004), Reanco Team AS £2.4
million (2004) and Harsh Environment Systems Ltd £1.6 million (2005).
FenderCare, our most recent acquisition for up to £12.0 million therefore
represented our largest acquisition to date.
There is also a firm commitment to organic growth and we are developing a fair
record, particularly when account is taken of the lack of growth or loss of
mature, historic Fisher business such as RFA Oakleaf. We have been investing in
new management teams, particularly in the submarine, defence and nuclear sectors
in which we have rare specialist skills which are recognised by our customers.
These investments in areas of strength should help to support organic growth in
future years.
Marine Support Services
Operating profit grew by 23% to £3.5 million (2004 : £2.8 million) and by 21%
over 2004 including our share of joint ventures. The contribution from defence
was down on the previous year primarily because of the loss of the Oakleaf
charter which contributed £540,000 in the previous half year. James Fisher
MIMIC was also quieter after a hectic first half in 2004. However, the
submarine rescue side performed strongly, completing a major refit for the UK
Submarine Rescue Service on time for the Royal Navy's Sorbet Royale exercise in
the Mediterranean for which we provided a complete submarine rescue package,
using the chartered ship mv Fennica as a platform for the launch of the LR5
submarine rescue vehicle. Its successful operation was observed by a number of
foreign navies who are actively seeking equivalent services.
Only weeks after the completion of the exercise the James Fisher Rumic team were
called into action to assist in the rescue of a Priz AS-28 submersible off the
east coast of Russia. Within 36 hours of being mobilised from our Renfrew base
the Scorpio 45 remotely operated vehicle was lowered into the Pacific to
commence its work at a depth of 625ft. In this time the team and their
equipment flew 4,380 miles over the North Pole, travelled to the nearest port
and mobilised a local vessel to complete the final 45 mile transit offshore.
After just over five hours work the last cable was cut and the stricken
submarine floated to the surface. The success of the mission in saving the
lives of the seven Russian submariners has been well publicised and it is a
great credit to the professionalism of the James Fisher team. We intend to
bring this capability, equipment and know-how to a wider market.
All the Scan Tech North Sea companies did well, both in Norway and the UK. The
high oil price is certainly generating a great deal of activity. which seems set
to continue for a number of years. We are increasingly following our
established customers into new markets including Mexico, West Africa, Australia
and the former Soviet republics. Obviously, operating in such places raises new
challenges but that's the way the market is going and we are well placed to take
advantage.
The specialist technical companies performed strongly. On the nuclear
decommissioning side, we experienced the change at Sellafield where from 1 April
2005, our main customer, BNFL, became an operator rather than owner of the site
leaving residual ownership with the Nuclear Decommissioning Agency (NDA). In
James Fisher Nuclear we are building a strong team with more strength and
credibility than any of its constituent businesses on their own. However, we
shall only see the real benefit of consolidation from 2006 onwards. Remote
Marine Systems had a particularly strong first half, helped by its penetrator
business which works alongside its nuclear business in Malton, Yorkshire.
The results include three months income from FenderCare which we acquired in
March 2005 for up to £12.0 million, before netting out the £2.1 million of cash
in the company. In the year ended 31 September 2004, FenderCare had a turnover
of £17.0 million and a pre tax profit of £1.9 million. FenderCare is the market
leader in world-wide ship-to-ship transfers and in the supply of large-scale
pneumatic fenders in shipping, offshore, port, construction and defence
industries and has clear overlaps with a number of our existing businesses. The
company has integrated well and is trading in line with our expectations. We are
delighted that, in the Fisher way, the existing senior management of Yvonne
Mason and Eric Plane, has joined our team.
Marine Oil Services
The operating profit of £3.4 million was slightly down on last year (2004: £3.8
million), reflecting an average two ships less in operation in 2005 compared to
last year. We are in the middle of our fleet modernisation programme with
Cumbrian Fisher (12,800 dwt February 2005) and Clyde Fisher (12,800 dwt April
2005) entering service in the first half. Shannon Fisher (5,000 dwt) and her
sister Solent Fisher (5,000 dwt) are being built in the Damen Galati yard in
Romania and are scheduled to enter service in January 2006 and July 2006
respectively. Conversely, Lough Fisher (8,400 dwt) was sold in June 2005 and we
have subsequently disposed of Tees Fisher (3,100 dwt) and Wear Fisher (3,100
dwt) in August 2005. The book loss on the disposal of all three ships is £1.4
million and has been included in the first half results.
Trading conditions were reasonable in the first half and currently remain so.
Our market is a local niche market in which we enjoy long standing customer
relationships. It does not form part of the global larger tanker market, in
which there is more volatility both up and down.
Cable Ships
Operating profit was £2.4 million for the half, up 24% over 2004 (£1.9 million)
with the first work for Oceanic Princess since 2002 responsible for the
improvement. Oceanic Princess benefited, albeit at marginal rates, from a
charter from Canyon Offshore for seismic work off Indonesia which lasted for
more than a hundred days. Oceanic Pearl remains in cold lay-up in Barrow.
Seismic work is of interest because, although the mainstream cable laying market
remains depressed with such work as there is in Asia and taken by the vertically
integrated cable manufacturers, such as Alcatel for their own ships, the Canyon
charter suggests that the booming oil exploration market might have a beneficial
effect on vessels such as Oceanic Princess and Oceanic Pearl which have DP
(Dynamic Positioning) capability. Although we are assessing and pursuing these
possibilities closely at present, it is premature to forecast any turnaround in
the market for our vessels yet. The General Dynamics charter income for Oceanic
Princess ceases in May 2006 and for Oceanic Pearl in December 2006, so any form
of alternative use which creates value would be most beneficial.
Directors and Employees
I am delighted to announce the appointment of Simon Harris, Managing Director of
James Fisher Defence, to the main Board. Simon joined us in 2004 from Houlders,
having been the project director for Foreland Shipping Ltd (formerly AWSR
Shipping Ltd), the PFI for six military roll on/roll off ferries in which we
have a 25% stake.
I am also pleased to welcome Paul Rodwell as Managing Director of Tankships, a
position which has been vacant since Nick Henry stepped up to become Chief
Executive Officer. Paul has a strong background, on the marketing side, of both
shipping and logistics.
As I have mentioned, we are building strong teams in our core business areas and
I am grateful for their energy and commitment. I would also like to recognise
and thank all staff for their support and hard work in dealing with the
increased level of activity which is now 'the norm' in all areas of our
business.
Outlook
James Fisher has the goal to be the UK's leading marine service company and a
clear strategy to achieve it. In recent years we have developed a consistent
track record of achievement of which this half's results are the latest step.
Cable Ships do not form part of this strategy, although it has been our policy
to play a waiting game sheltered by the General Dynamics income. The Oceanic
Princess' first work for 21/2 years is a positive development and we shall seek
to explore carefully over the next few months how best to maximise what
potential value there is from our two vessels.
We are confident about the core James Fisher business and our ability to
continue to demonstrate our track record of achievement and to grow profits and
value for our shareholders.
GROUP INCOME STATEMENT
Restated under IFRS
Note Unaudited Six Unaudited Six Unaudited
months to 30 months to 30 Year ended
June 2005 June 2004 31 December 2004
£000 £000 £000
Group revenue 48,949 39,058 78,753
Cost of sales (38,101) (28,916) (59,433)
Gross profit 10,848 10,142 19,320
Administrative expenses (2,518) (2,380) (4,874)
Profit from operations before ship disposals 8,330 7,762 14,446
(Loss)/profit on ship disposals (1,449) (52) 475
Profit from operations 6,881 7,710 14,921
Finance costs
Finance income (revenue) 180 153 330
Finance costs (1,355) (1,254) (2,511)
Exchange (loss)/gain on loan conversion (93) 8 155
(1,268) (1,093) (2,026)
Share of results of joint ventures 639 583 1,219
Profit on continuing activities before 2 6,252 7,200 14,114
taxation
Taxation 3 (756) (1,087) (2,130)
Profit attributable to equity holders 5,496 6,113 11,984
pence pence pence
Basic earnings per ordinary share 6 11.28 12.71 24.82
Diluted earnings per ordinary share 11.17 12.35 24.52
Basic earnings per ordinary share after
adjustment for ship disposals and exchange
(loss)/gain on loan conversion 6 14.44 12.80 23.52
Ordinary dividends paid or payable:
Interim 9 3.10 2.77 2.77
Final 4.95
7.72
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE
Restated under IFRS
Note Unaudited Six Unaudited Six Unaudited
months to 30 months to 30 Year ended
June 2005 June 2004 31 December 2004
£000 £000 £000
Exchange differences on translation of
foreign operations:
Currency translation differences 81 578 (126)
Net investment hedge (104) (759) 303
(23) (181) 177
Actuarial (losses)/gains on defined
benefit schemes (2,000) 1,100 400
MNOPF pension actuarial deficit 4 (2,070) - -
Tax on items taken directly to equity 780 (61) (120)
Net (expense)/income recognised directly
in equity (3,313) 858 457
Profit for the period 5,496 6,113 11,984
Total recognised income for the period 7 2,183 6,971 12,441
All recognised income is attributable to the equity holders.
Effect of changes in accounting policy (5)
included in hedging reserve
GROUP BALANCE SHEET
Restated under IFRS
Unaudited Six Unaudited Six Unaudited
months to 30 months to 30 Year ended
June 2005 June 2004 31 December 2004
£000 £000 £000
ASSETS
Non current assets
Goodwill 30,649 17,466 21,254
Property, plant and equipment 102,042 106,630 103,091
Investment in joint ventures 2,576 2,175 1,810
Available for sale financial assets 1,157 1,157 1,157
Deferred income tax assets 1,825 1,708 1,391
138,249 129,136 128,703
Current assets
Inventories 5,745 1,872 4,028
Trade and other receivables 20,642 11,520 14,901
Cash and short term deposits 5,875 8,410 10,045
32,262 21,802 28,974
Non-current assets classified as held for 1,189 - -
sale
TOTAL ASSETS 171,700 150,938 157,677
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 12,345 12,267 12,305
Non-equity - cumulative preference shares - 100 100
Share premium 23,960 23,750 23,810
Treasury shares (1,116) (1,501) (1,212)
Other reserves (221) (181) 177
Profit and loss reserves 48,050 44,571 48,151
Total equity 83,018 79,006 83,331
Non current liabilities
Trade and other 33 - 14
Retirement benefit obligations 16,870 12,100 12,800
Non-equity - cumulative preference shares 100 - -
Interest-bearing loans and borrowings 41,256 36,449 38,472
58,259 48,549 51,286
Current liabilities
Trade and other 17,101 12,277 13,280
Corporate tax payable 1,601 1,419 1,601
Derivative financial instruments 183 - -
Interest-bearing loans and borrowings 11,538 9,687 8,179
30,423 23,383 23,060
TOTAL LIABILITIES 88,682 71,932 74,346
TOTAL EQUITY AND LIABILITIES 171,700 150,938 157,677
GROUP CASH FLOW STATEMENT
Restated under IFRS
Note Unaudited Six Unaudited Six Unaudited
months to 30 months to 30 Year ended
June 2005 June 2004 31 December 2004
£000 £000 £000
Operating activities
Profit from operations 6,881 7,710 14,921
Adjustments for:
Depreciation 3,983 4,110 8,259
Profit on sale of fixed assets (17) (72) (59)
Loss/(profit) on ship disposals 1,449 52 (475)
Income tax expense (781) (751) (1,583)
Increase in trade and other receivables (3,548) (680) (2,697)
Decrease/(increase) in stocks 471 393 (150)
Decrease in trade and other payables (64) (421) (790)
Share based compensation 201 102 289
Cash flows from operating activities 8,575 10,443 17,715
Investing activities
Dividends from joint venture undertakings - - 1,000
Proceeds from the sale of plant and equipment 1,015 1,568 4,966
Interest received 175 124 314
Acquisition of subsidiaries, net of cash (10,862) (69) (6,250)
acquired
Acquisition of property, plant and equipment (4,187) (1,463) (3,649)
Loans to joint ventures repaid - - 225
Refund of payment to acquire tangible fixed assets - 3,851 3,851
Sale of shipbuilding contracts - 7,293 7,293
Cash flows from investing activities (13,859) 11,304 7,750
Financing activities
Proceeds from the issue of share capital 190 248 346
Preference dividend paid (2) (2) (4)
Interest paid (1,386) (1,255) (2,482)
Proceeds from other non-current borrowings 9,332 1,206 12,574
Purchase less sales of own shares by ESOP - (530) (616)
Repayment of borrowings (4,582) (16,377) (27,409)
Dividends paid (2,412) (2,090) (3,410)
Cash flows from financing activities 1,140 (18,800) (21,001)
Net (decrease)/increase in cash and cash
equivalents (4,144) 2,947 4,464
Cash and cash equivalents at 1 January 2005 10,045 5,455 5,455
Net foreign exchange difference (26) 8 126
Cash and cash equivalents at end of period 5,875 8,410 10,045
NOTES TO ACCOUNTS
1. Basis of Preparation
The Group's interim result consolidates the results of the Company and its
subsidiary companies made up to 30 June 2005.
The interim financial information has been prepared according to recognition and
measurement requirements of International Financial Reporting Standards ('IFRS')
that are in issue and have been endorsed by the European Union or are expected
to be endorsed and effective at 31 December 2005, the Group's first annual
reporting date under IFRS. The directors have revised the Group's accounting
policies based on these requirements. Details of these accounting policies
together with a reconciliation of the adjustments made to the comparative
information provided below were published in the investor relations section of
the James Fisher website, www.james-fisher.co.uk, as supporting information for
the press release 'James Fisher & Sons PLC Adoption of International Financial
Reporting Standards' issued on 18 August 2005.
Certain standards are still subject to change. In particular the European
Commission has not yet endorsed the amendment to IAS 19 - Employee Benefits
which the Group has adopted in respect of the treatment of actuarial gains and
losses. As a result there may be further changes when the Group prepares its
first full year IFRS financial statements.
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the preceding year is based on the
statutory accounts for the year ended 31 December 2004, as revised to comply
with IFRS. These accounts, upon which the auditors issued an unqualified
opinion, have been delivered to the Registrar of Companies.
The Group has adopted the exemption under IFRS 1, 'First Time Adoption of
International Financial Reporting Standards' that allows IAS 32 'Financial
Instruments:Disclosure and Presentation' and IAS 39 'Financial Instruments:
Recognition and Measurement' to be applied prospectively from 1 January 2005.
The impacts of adopting these standards are as follows:
Non Equity Shares
From 1 January 2005 the Group has reclassified the 100,000 3.5% non equity
preference shares of £1 each into long term debt. Dividends on thise shares are
now classified as interest expense.
Available for Sale Financial Assets
From 1 January 2005 the Group's investment in Societe d'Economie Mixte de
Co-operation Transmanche, an unlisted company, has been designated as an
available for sale financial asset.
Derivatives and Hedging Instruments
All derivative financial instruments are included in the accounts at fair value.
In the case of those instruments designated as forming a hedge relationship,
movements in their fair value are recorded in a separate hedging reserve. At 1
January 2005 an amount of £5,000 was recognised in the hedging reserve and in
short term liabilities. This represents a reduction of £25,000 arising from the
fair value of foreign currency forward contracts less £20,000 arising from an
increase in the fair value of interest rate swaps.
The interim report was approved by the board of directors on 22 August 2005.
2. Segmental Information
The following tables represent unaudited revenue and profit information
regarding the Group's business segments for the six months ended 30 June 2005
and 2004. The results for June 2004 and December 2004 have been restated under
IFRS.
Continuing Operations
Marine Support Marine Oil Cable Ships Total
Services Services
30 June 30 June 30 June 30 June 30 30 30 June 30 June 31
2005 2004 2005 2004 June June 2005 2004 December
2005 2004 2004
Revenue £000 £000 £000 £000 £000 £000 £000 £000 £000
Sales to external 21,648 12,553 22,480 22,711 4,821 3,794 48,949 39,058 78,753
customers
Inter segment sales 2,100 2,352 - - - - 2,100 2,352 4,614
Segmental revenue 23,748 14,905 22,480 22,711 4,821 3,794 51,049 41,410 83,367
Result
Segmental result
before ship
disposals 3,495 2,841 3,440 3,810 2,351 1,921 9,286 8,572 16,109
Common costs (956) (810) (1,663)
Profit from operations before ship 8,330 7,762 14,446
disposals and joint ventures
Loss on ship disposals (1,449) (52) (1,449) (52) 475
Profit from operations before joint 6,881 7,710 14,921
ventures
Finance income (revenue) 180 153 330
Finance costs (1,355) (1,254) (2,511)
Exchange (loss)/gain on (93) 8 155
loan conversion
(1,268) (1,093) (2,026)
Share of results of 639 583 639 583 1,219
joint ventures
Segmental result
after ship 4,134 3,424 1,991 3,758 2,351 1,921
disposals
Profit on continuing activities before 6,252 7,200 14,114
tax
Taxation (756) (1,087) (2,130)
Profit attributable to equity holders 5,496 6,113 11,984
Further analysis of Marine Support Services including joint
ventures
Marine Support Joint Ventures
Services
30 June 30 June 30 June 30 June
2005 2004 2005 2004
£000 £000 £000 £000
Operating result
Marine Support 3,495 2,841
Services
Joint ventures 1,899 1,930 1,899 1,930
Finance costs -
joint ventures (1,224) (1,320)
Taxation - joint (36) (27)
ventures
5,394 4,771 639 583
3. Taxation
The group has entered the UK tonnage tax regime under which its ship owning and
operating activities are based on the net tonnage of vessels operated. Any
income and profits outside the tonnage tax regime are taxed under the normal tax
rules of the relevant tax jurisdiction.
(a) Taxation
The tax charge is made up as follows:
Restated under IFRS
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 June 30 June 31 December
2005 2004 2004
£000 £000 £000
Current tax:
UK tonnage tax (11) (16) (32)
UK corporation tax (436) (389) (832)
(447) (405) (864)
Tax underprovided in previous years (44) (209) (409)
Foreign tax (260) (279) (477)
Total current tax (751) (893) (1,750)
Deferred tax:
Group deferred tax (5) (194) (380)
Taxation (756) (1,087) (2,130)
Share of joint venture's current tax (36) (27) (61)
(b) Tax included in statement of recognised income and expense
Deferred tax:
Group deferred tax 780 (61) (120)
4. Pension Liabilities
As was reported in the Chairman's AGM statement, a court case in March 2005 has
established that former as well as existing employers will be liable to make
payments in respect of the funding deficit of the Merchant Navy Officers'
Pension Fund (MNOPF). The Company is awaiting the Trustee's confirmation as to
the allocation basis which will be adopted but initial indications from the
Trustees are that the company will be required to make 10 annual payments of
£260,000 into the fund. The Company will for the future be exposed on a
proportional basis to movements in the total assets and liabilities of the fund.
Therefore the company has determined that the fund should be accounted for as
a defined benefit scheme and its liability is recognised accordingly. At the
half year the Company has estimated its IAS 19 liability based on information
currently available; this estimate will be revised at the full year in the
light of fuller information from the Trustees. As this liability has not arisen
from any new benefits in the year the Company has concluded that the recognition
of the liability should be accounted for as an actuarial adjustment, and it is
therefore recorded in the Statement of Recognised Income and Expense.
5. Reconciliation of Net Debt
31 December Restatement Acquisitions Cash Other Non Exchange 30 June
2004 Flow Cash Movement 2005
£000 £000 £000 £000 £000 £000 £000
Cash in hand and at 8,045 - - (2,144) - (26) 5,875
bank
Short term deposits 2,000 - - (2,000) - - -
Debt due after 1 year (38,472) (100) - - (2,738) (46) (41,356)
Debt due within 1 year (8,179) - (1,300) (4,750) 2,738 (47) (11,538)
(46,651) (100) (1,300) (4,750) - (93) (52,894)
Net debt (36,606) (100) (1,300) (8,894) - (119) (47,019)
As stated in note 1, the 100,000 3.5% cumulative preference shares of £1 each
previously recorded in equity have been reclassified as long term debt on
adoption of IAS 32 and IAS 39 prospectively from 1 January 2005.
6. Earnings Per Share
The calculation of basic and diluted earnings per share are based on the
following profits and numbers of shares:
Restated under IFRS
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 June 30 June 31 December
2005 2004 2004
£000 £000 £000
Profit for the period/year 5,496 6,113 11,984
Preference dividend - (2) (4)
5,496 6,111 11,980
Weighted average number of shares*
Number of Number of Number of
Shares shares shares
For basic earnings per share 48,725,767 48,079,850 48,261,182
Exercise of share options 463,183 1,385,927 605,628
For diluted earnings per share 49,188,950 49,465,777 48,866,810
* Excludes shares owned by James Fisher and Sons Public Limited Company Employee
Share Ownership Trust.
The basic earnings per ordinary share before ship disposals and exchange
differences on loan conversion is shown to highlight the underlying earnings
trend and is calculated using the number of shares outlined in the table above.
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 June 30 June 31 December
2005 2004 2004
£000 p £000 p £000 p
Basic earnings per share 5,496 11.28 6,111 12.71 11,980 24.82
Adjustments:
Exchange loss/(gain) on
loan conversion 93 0.19 (8) (0.02) (155) (0.32)
Ship disposals 1,449 2.97 52 0.11 (475) (0.98)
7,038 14.44 6,155 12.80 11,350 23.52
7. Reconciliation of Movements in Reserves
Other Reserves
Share Profit and Translation Hedging Treasury
Premium Loss Reserve Reserve Shares
Reserve
£000 £000 £000 £000 £000
At 31 December 2004 23,810 48,151 177 - (1,212)
Restatement - - - (5) -
At 1 January 2005 23,810 48,151 177 (5) (1,212)
Arising on the issue of shares 150 - - - -
Cash Flow hedges:
Fair value losses in the period - - - (203) -
Share of fair value losses of joint - - - (167) -
ventures
Total realised income in the period - 2,206 (23) - -
Ordinary dividends paid - (2,412) - - -
Share-based compensation expense - 201 - - -
Transfer on disposal of shares - (96) - - 96
At 30 June 2005 23,960 48,050 154 (375) (1,116)
8. Acquisitions
On 18 January 2005 the Group acquired the entire issued share capital of Harsh
Environment Systems Limited for a cash consideration of £1.600m. On 17 March
2005 the Group acquired the entire issued share capital of Fender Care Marine
Solutions Group Limited and Fender Care Marine Solutions Limited, which were
under common ownership, for a cash cost of £11.275m plus contingent
consideration of £0.750m. These acquisitions have been incorporated into the
Group's balance sheet at their fair value at the dates of acquisition.
9. Interim Dividend
A dividend for the six months to 30 June 2005 on the preference shares was
declared on 30 June 2005. The interim dividend of 3.10p (2004 2.77p) per 25p
ordinary share is payable on 1 November 2005 to those shareholders on the
register of the company at the close of business on 7 October 2005.
10. Interim Report
The interim report is to be sent to all shareholders week commencing 5 September
2005, posted first class. Copies of the interim report will also be available
from our registered office at: Fisher House, PO Box 4, Barrow-in-Furness,
Cumbria, LA14 1HR.
INDEPENDENT REVIEW REPORT
TO JAMES FISHER & SONS PUBLIC LIMITED COMPANY
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2005 which comprises Group Income Statement, Group
Balance Sheet, Group Cash Flow Statement, Group Statement of Recognised Income
and Expense, and the related notes 1 to 10. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority.
As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with those IFRSs adopted for use by the European
Union.
The accounting policies are consistent with those that the directors intend to
use in the next financial statements. There is, however, a possibility that the
directors may determine that some changes to these policies are necessary when
preparing the full annual financial statements for the first time in accordance
with those IFRSs adopted for use by the European Union. This is because, as
disclosed in note 1 , the directors have anticipated that the amendment to IAS
19, which has yet to be formally adopted for use in the EU will be so adopted in
time to be applicable to the next annual financial statements..
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of interim financial information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data, and based thereon,
assessing whether the accounting policies have been applied. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2005.
Ernst & Young LLP
Silkhouse Court
Tithebarn Street
Liverpool
L2 2LE
22 August 2005
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