Half Year Results 2009

RNS Number : 9313X

Fisher (James) & Sons PLC

25 August 2009

James Fisher and Sons plc (James Fisher)

James Fisher, the leading UK marine service provider, announces results for the Half Year to 30 June 2009.

	% change	H1 2009	H1 2008
Group revenue £m	+13.9%	130.0	114.1
Profit before tax £m	+18.2%	13.0	11.0
Basic earnings per share	+13.5%	20.11p	17.72p
Interim dividend per share	+10.1%	4.80p	4.36p

Highlights

Group strategy of focusing on niche, high margin businesses has again confirmed its resilience and ability to produce organic growth
Specialist Technical     - operating profit almost doubled, margin improved to 15.9%
                                     - purchase of nuclear decommissioning company M B Faber Limited for up to

                                       £5.25m

Defence - Singaporean delivery confirms our position as the global market leader in
Submarine Rescue Services
Marine Oil - management actions taken to reduce cost base in weaker demand
environment
New £20m facility with Yorkshire Bank

Commenting on the results, Chairman, Tim Harris, said:

'In the first half strong organic growth overseas led by the Specialist Technical division more than offset the recessionary issues in the UK market.

Encouragingly, our nuclear cluster has begun to perform well and the Defence division, unquestionably a world leader in specialist submarine rescue, is beginning to produce good revenue growth. Prospects for both remain promising.

The Marine Oil division has been affected by a combination of a cargo shortfall and a weaker spot market. Its prospects are linked to the general level of economic activity in the UK and Continental Europe and little improvement can be anticipated in the second half and until economic activity begins to recover.

James Fisher is well placed in the current economic climate and beyond to continue to produce good growth and value for shareholders'.

For further information:

James Fisher and Sons plc www.james-fisher.co.uk	Tim Harris Nick Henry Michael Shields	Chairman Chief Executive Officer Group Finance Director	020 7614 9508
Financial Dynamics	Simon Elliott Sophie Kernon		020 7269 7291

James Fisher and Sons plc (James Fisher)

Half Yearly Results for the six months ended 30 June 2009

Interim Management Report

for the six months ended 30 June 2009

Chairman's Statement

Highlights

Group revenue from operations rose by 13.9% to £130 million during the first half of 2009 and pre tax profit was £13.0 million, an uplift of 18.2% and a commendable result in the present economic environment. Strong organic growth overseas led by the Specialist Technical division more than offset the recessionary issues in the UK market. The Company's strategic focus on high margin, niche businesses has again confirmed its resilience and ability to produce organic growth. Although the Singapore submarine vessel entered service as anticipated in the first half, the related financing was not contracted until after 30 June 2009. Final drawdown is imminent but this has distorted the reported gearing at 30 June 2009 by some 18.8%.

The Company's strategy in recessionary times

The Company's consistent strategy since 2002 has been to use its core expertise of marine operational and engineering skills to build niche marine service businesses, which typically have high margins and return on capital employed. Small to medium sized acquisitions have been an important element of this strategy although in recent years organic growth has been responsible for the greater part of the Company's strong growth record. This strategy has demonstrated its resilience and continued viability over the last two years when the prevailing economic environment has been less favourable than in the years before 2007. While the present climate offers challenges, it has also provided strategic opportunities to James Fisher as demonstrated by the recent acquisition of MB Faber Limited, the nuclear decommissioning company, for up to £5.25 million in cash after an eighteen month planned pause in our acquisition activity, anticipating a return to lower multiples in a more realistic market.

The Company's relationship with its bankers is clearly important in a credit crunch and it is positive that we have just finalised a new £20 million facility with the Yorkshire Bank to add to the new £25 million Barclays' facility which we agreed in the second half of last year. As we continue to receive the full support of our existing banks, we are confident that the Company has the resources to continue to expand successfully without undue constraint.

Unsurprisingly the recession is not without some adverse effects on the Company, the most significant of which can be summarised as follows. Firstly in the Marine Oil division, James Fisher Everard has suffered from a sharp drop in volumes carried which has reduced its profitability to breakeven in the first half. Secondly and as previously flagged, the drop in equities has caused an additional £2.0 million of pension deficit in the first half which adversely affects reported financial gearing although not cash flow itself. Lastly, we are having to fund, on balance sheet, our new workshop and offices in Stavanger at a cost of up to £13 million following an adverse change in the property finance market in Norway, which meant that a sale and lease-back would have resulted in us losing the equity we have in the site. There are signs that conditions are beginning to improve which will allow us to resume discussion on refinancing the property.

Offshore Oil - H1 2009 divisional result £5.8 million (H1 2008 £5.8 million)

Revenue, profits and margin for this division remained steady in the first half when compared with last year. Last year we enjoyed exceptionally strong winch related revenues in the UK from the renewables sector which have been lower so far this year. Otherwise, revenues and profits were all improved from operations in the Norwegian sector, new oil provinces outside the North Sea and also the 'downhole' RMSpumptools.

Our offshore activities are broadly based, both geographically and by market sector, with a greater focus on maintenance and production than exploration. In line with James Fisher's stated strategy, we operate in market niches which give us some protection against the commoditisation of pricing. This division has demonstrated good resilience despite the well publicised drop in the oil price and we remain positive about its prospects.

Specialist Technical - H1 2009 divisional result £7.9 million (H1 2008 £4.1 million)

The Specialist Technical division enjoyed an extremely strong first half with revenues of £50.1 million up 38.9% over last year and margins strongly improved to 15.9% compared with 11.3% for the first half year 2008. This excellent performance was the result of two encouraging developments - firstly the FenderCare cluster firing on 'all cylinders' and also the nuclear cluster returning to form.

FenderCare, which in many ways is the epitome of a marine service company, continued to grow its global market share particularly in Asia, Africa and the Middle East. It was also helped by a strong US Dollar as its revenues are predominantly in that currency, while many of its costs are Sterling based.

The nuclear cluster also put in its best ever performance and is now meeting group performance criteria in terms of margin and return on capital. This turnaround has been the result of both internal and external factors. The UK decommissioning market has begun to settle down after its reorganisation and specialist niche companies such as James Fisher Nuclear are beginning to see the benefits from a more stable and rational market.

To take advantage of this new opportunity and to build upon our existing nuclear strengths, we announced on 18 August 2009 the acquisition of MB Faber Limited for up to £5.25 million in cash which, in the usual Fisher way, is as a 'bolt on' acquisition offering attractive operational synergies. Faber is based in Leyland, Lancashire with satellite operations close to Sellafield in Cumbria. It provides specialist design and engineering services to the nuclear and aerospace industries. Currently it employs 120 people and has been in the nuclear business since 1988. In the year ended 31 December 2008 had revenue of £6.8 million.

In the Strainstall cluster, whose activities are based on the supply and application of strain gauges, performance in the first half from its operations and monitoring applications was strongly ahead, but this was offset by some weakness in the construction sectors, a consequence of the recent global economic problems.

This division has a strong record of organic growth which we continue to support by 'bolt on' acquisitions. We remain positive about its ability to drive further profit growth for the Company.

Defence - H1 2009 divisional result £1.9 million (H1 2008 £2.6 million)

Operationally the first half was quite successful with the new integrated Singaporean Submarine Rescue Service, as anticipated, entering service in May 2009 and in June we established a new base in Perth, Western Australia, to support a new service for the Royal Australian Navy using the former Royal Navy equipment which we purchased from the Ministry of Defence. These, together with a number of smaller projects, accounted for the 13.7% increase in revenue year on year to £19.5 million.

However we did encounter a few operational 'teething problems' in Singapore, primarily related to operating in tropical humidity, which were speedily identified and eliminated so that the rescue service became operational on schedule. However, PFI type long-term financing is quite a new concept for the defence industry in Singapore and finalising the documentation for the financing of the integrated system with the Singapore Defence Science and Technology Agency, the Singapore based DBS Bank Ltd and our Singaporean partners, Singapore Technologies Marine, has taken longer than anticipated but is now contracted and final drawdown is imminent. This meant that the Company's net debt was adversely affected by £19 million at 30 June 2009. The combination of these issues was responsible for the fall in profit and decline in margin from last year.

The successful introduction of two major submarine rescue systems in Korea and Singapore over a six month period has not gone unnoticed and we continue to receive a high level of interest in related products. This division is well placed to continue to grow without the temporary commitment of capital which the Singapore contract unusually required.

Marine Oil - H1 2009 divisional result £0.2 million (H1 2008 £2.7 million)

The disappointing result in the first half was caused by the present challenging economic conditions which have had two separate but related adverse effects. Firstly the general reduction in economic activity has caused James Fisher Everard's first half contract volumes to reduce by over 15% from the previous year. Put simply, the general decline in economic activity was reflected in a drop in the consumption of clean petroleum products in the UK and the Irish Republic, particularly in freight haulage. Secondly the global decline in consumption of these products has made more ships from the wider European fleet available to compete cheaply for UK spot cargoes, which has adversely affected both spot rates and the availability of spot cargoes. As typically we have relied on the spot market for around 20% of our carryings, this increase in competition has inevitably had an adverse affect on our profitability. Finally and as previously flagged, the strong US Dollar and Euro have made our bareboat charters and some of our manning costs more expensive when expressed in Sterling.

To offset this decline in demand, we have recently put three of our smaller vessels into warm lay-up over the Summer period to tighten our service and reduce our cost base. We have also allowed the bareboat charter for mt Rudderman to elapse and have returned her to her German owners.

Strengthening in this market can only be anticipated when both the UK and European economies begin to recover from the sharpest downturn since the Second World War and higher spot charter rates prevail. This recovery, when it comes, will have a double benefit in terms of contract carryings and strengthening the spot market.

Outlook

It is a measure of how far James Fisher plc has developed its marine service base that, in the first half of 2009, it has been able to report a significant increase in profitability despite a negligible contribution from James Fisher Everard which, some years ago, was its largest profit contributor. The change in profile of James Fisher means that the Company now has a number of fast growing, well run service businesses in its Offshore Oil, Specialist Technical and Defence divisions which have been able to grow despite the more challenging economic circumstances of the last two years. The strategic focus on niche marine service businesses managed in a series of coherent clusters has enabled the Company to demonstrate a consistently good track record despite the recession.

The Offshore division remains well placed in a market sector whose problems may well have been over publicised. The recovery in the price of oil and its vital role in the world economy suggests that the market sector remains more attractive than most with good long-term growth potential.

Our Specialist Technical division has had an excellent track record in recent years which has made it the fastest growing and most profitable division. The FenderCare and Strainstall clusters have a proven record so it is encouraging that the nuclear cluster has begun to perform well too.

The Defence division experienced some of the challenges of growth and the delivery of major systems in the first half, but it is unquestionably a world leader in the specialist submarine rescue niche and beginning to produce good revenue growth. Prospects remain promising.

The Marine Oil division has been adversely affected by a combination of a cargo shortfall and a weaker spot market. Realistically its prospects are linked to the general level of economic activity in the UK and Continental Europe and little improvement can be anticipated in the second half and until economic activity begins to recover. However, in the meantime we continue to keep a tight control over costs in this area.

Of general economic developments, the recent strengthening of the price of oil is a positive factor whereas the decline in the US dollar is negative, although at present it remains stronger than for most of 2008 in terms of Sterling.

The Company's financial gearing was artificially inflated by a number of factors at 30 June 2009, of which the delay in receipt of the Singaporean Submarine Rescue money was the most important. The Company has more than adequate bank facilities available, a low interest charge and good headroom on its bank covenants. It is therefore well placed to continue to make 'bolt on' acquisitions for cash in the usual Fisher way.

Overall, James Fisher remains well placed in the current economic circumstances to continue to produce good growth and value for our shareholders.

Directors' Responsibilities

We confirm to the best of our knowledge:

The interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

The interim management report includes a fair review of the information required by;

(a)    DTR 4.2.7R of the 'Disclosure and Transparency Rules', being an indication of important events that
        have occurred during the first six months of the financial year and their impact on the condensed set of
        financial statements; and a description of the principal risks and uncertainties for the remaining six
        months of the year; and

(b)    DTR 4.2.8R of the 'Disclosure and Transparency Rules', being related party transactions that have
        taken place in the first six months of the current financial year and that have materially affected the
        financial position or performance of the entity during the period; and any changes in the related party

transactions described in the last annual report that could do so.

T.C.Harris

Chairman

M.J.Shields

Group Finance Director

On behalf of the Board of Directors

CONDENSED CONSOLIDATED HALF YEARLY INCOME STATEMENT

For the six months ended 30 June 2009

							Restated			Restated
							Note 16			Note 16
	Notes		6 months ended			6 months ended			Year ended
			30 June 2009			30 June 2008			31 December 2008
			Before	Separately		Before	Separately
			separately	disclosed		separately	disclosed
			disclosed	items		disclosed	items
			items	note 4	Total	items	note 4	Total		Total
			£000	£000	£000	£000	£000	£000		£000
Continuing Operations
Group revenue			129,978		129,978	114,135		114,135		233,578
Cost of sales			(114,097)		(114,097)	(98,451)		(98,451)		(199,144)
Gross profit			15,881		15,881	15,684		15,684		34,434

Administrative expenses			(3,708)		(3,708)	(2,810)		(2,810)		(6,943)

Profit from operations before separately disclosed items			12,173		12,173	12,874		12,874		27,491
	Impairment of ship		-	-	-	-	-	-		(107)
	(Loss)/Profit on ship disposals		-	(14)	(14)	-	175	175		685

Profit from operations			12,173	(14)	12,159	12,874	175	13,049		28,069

Finance costs
	Finance income		87	-	87	183	-	183		412
	Finance costs		(1,816)	-	(1,816)	(3,075)	-	(3,075)		(6,309)
	Exchange gain/(loss) on loans		-	454	454	-	(297)	(297)		(1,152)
			(1,729)	454	(1,275)	(2,892)	(297)	(3,189)		(7,049)

Share of post tax results of joint ventures			2,156	-	2,156	1,172	-	1,172		2,547

Profit on continuing operations before tonnage and income tax		2	12,600	440	13,040	11,154	(122)	11,032		23,567
	Tonnage tax		(15)	-	(15)	(15)	-	(15)		(29)
	Income tax (including overseas taxation of £1,129,000; 2008 £699,000)		(3,054)	-	(3,054)	(2,136)	-	(2,136)		(5,248)
Total tonnage and income tax		9	(3,069)	-	(3,069)	(2,151)	-	(2,151)		(5,277)

Profit on continuing operations			9,531	440	9,971	9,003	(122)	8,881		18,290


Profit for the period
Profit attributable to :
Equity holders of the parent					9,971			8,855		18,264
Minority interests					-			26		26
					9,971			8,881		18,290

							Restated			Restated
								Note 16		Note 16
Earnings per share (EPS)
					pence			pence		pence

Basic EPS on profit from continuing operations		12			20.11			17.72		36.92
Diluted EPS on profit from continuing operations		12			20.04			17.58		36.73

Adjusted Earnings per share

Adjusted basic EPS from continuing operations		12			19.22			17.96		38.08
Adjusted diluted EPS from continuing operations		12			19.16			17.82		37.89

Dividends

Paid or approved by shareholders in the period
Final dividend					8.65			7.52		7.52
Interim dividend					-			-		4.36
					8.65			7.52		11.88
Proposed but not accrued
Final dividend					-			-		8.65
Interim dividend					4.80			4.36		-
					4.80			4.36		8.65

CONDENSED CONSOLIDATED HALF YEARLY STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2009

					Restated		Restated
					Note 16		Note 16
	Note	6 months ended		6 months ended			Year ended
			30 June 2009		30 June 2008	31 December 2008
			£000		£000		£000

Profit for the period			9,971		8,881		18,290

Other comprehensive income

Foreign currency translation differences for foreign operations			(3,822)		512		4,906
Net profit/(loss) on hedge of net investment in foreign operations			770		400		(1,070)
Exchange gains transferred to income statement on disposal of subsidiary assets			(195)		-		-
Effective portion of changes in fair value of cash flow hedges			422		(731)		(4,420)
Effective portion of changes in fair value of cash flow hedges in joint venture			1,008		(316)		(1,453)
Net change in fair value of cash flow hedges transferred to profit or loss			4,604		-		5
Defined benefit plan actuarial losses	6		(3,205)		(1,435)		(2,054)
Income tax on other comprehensive income	10		426		(19)		(755)
Other comprehensive income for the period, net of income tax
			8		(1,589)		(4,841)
Total comprehensive income for the period			9,979		7,292		13,449


Attributable to :
Equity holders of the parent			9,979		7,266		13,423
Minority interests			-		26		26
			9,979		7,292		13,449

CONDENSED CONSOLIDATED HALF YEARLY BALANCE SHEET

At 30 June 2009

				Restated		Restated
				Note 16		Note 16
		30 June 2009		30 June 2008		31 December 2008
	Note		£000		£000		£000

Assets
Non current assets
Goodwill			69,007		69,428		69,993
Other Intangible assets			76		81		76
Property, plant and equipment	5		104,807		98,164		102,018
Investment in joint ventures			6,213		3,893		4,547
Financial assets			3,354		1,369		1,370
Derivative financial instruments			453		-		-
			183,910		172,935		178,004

Current assets
Inventories			23,808		14,499		21,965
Trade and other receivables			67,791		52,344		62,395
Derivative financial instruments			279		-		-
Cash and short term deposits	8		13,019		11,953		16,859
			104,897		78,796		101,219

Total Assets			288,807		251,731		279,223

Equity and Liabilities

Capital and reserves
Called up share capital	11		12,446		12,429		12,438
Share premium			24,518		24,345		24,432
Treasury shares			(768)		(1,036)		(1,036)
Other reserves	13		1,633		743		(1,154)
Retained earnings			63,453		54,222		60,370
Total Equity			101,282		90,703		95,050

Non current liabilities
Other payables			1,113		1,831		1,248
Retirement benefit obligations	6		20,649		19,424		18,648
Derivative financial instruments			31		-		-
Cumulative preference shares			100		100		100
Loans and borrowings			98,391		90,315		89,315
Deferred tax liabilities			1,222		849		1,405
			121,506		112,519		110,716
Current liabilities
Trade and other payables			39,438		35,378		45,440
Current tax			2,865		2,671		4,465
Derivative financial instruments			160		919		4,603
Loans and borrowings			23,556		9,541		18,949
			66,019		48,509		73,457

Total liabilities			187,525		161,028		184,173

Total equity and liabilities			288,807		251,731		279,223

CONDENSED CONSOLIDATED HALF YEARLY STATEMENT OF CASH FLOW

For the six months ended 30 June 2009

					Restated		Restated
					Note 16		Note 16
	6 months ended			6 months ended			Year ended
	Note	30 June 2009		30 June 2008		31 December 2008
			£000		£000		£000

Group profit before tax from continuing operations			13,040		11,032		23,567
Adjustments to reconcile Group profit before tax to net cash flows
Adjustments for:
Depreciation and amortisation			4,949		4,494		9,431
Profit on sale of property, plant and equipment			(5)		(378)		(499)
Profit on disposal of trade and assets of subsidiary			(160)		-		-
Impairment of non - current assets			-		-		107
Loss/(profit) on ship disposals			14		(175)		(685)
Finance income			(87)		(183)		(412)
Finance expense			1,816		3,075		6,309
Exchange (gain)/loss on loans			(454)		297		1,152
Share of profits of joint ventures			(2,156)		(1,172)		(2,547)
Decrease/(increase) in trade and other receivables			276		(3,658)		(8,530)
Increase in inventories			(3,000)		(1,982)		(8,367)
Increase in inventories and receivables attributable to submarine rescue vessels			(5,159)		(4,659)		(10,618)
(Decrease)/increase in trade and other payables			(5,439)		3,884		13,411
Additional defined benefit pension scheme contributions			(1,617)		(1,683)		(3,081)
Share based compensation			481		333		662
Cash generated from operations			2,499		9,225		19,900
Income tax payments			(3,996)		(1,471)		(3,522)
Net Cash from operating activities			(1,497)		7,754		16,378

Investing activities
Dividends from joint venture undertakings			1,200		1,200		1,200
Proceeds from the sale of property, plant and equipment			442		2,132		4,681
Proceeds from the sale of trade and assets of subsidiary			1,040		-		-
Finance income			87		183		411
Acquisition of subsidiaries, net of cash acquired			(388)		(4,742)		(5,487)
Acquisition of property, plant and equipment			(9,079)		(8,937)		(18,735)
Acquisition of investment in joint ventures			(28)		(9)		(9)
Loan to investment			(1,610)		-		-
Acquisition of investments			(464)		-		-
Net Cash used in investing activities			(8,800)		(10,173)		(17,939)

Financing activities
Proceeds from the issue of share capital			94		8		104
Preference dividend paid			(2)		(2)		(3)
Finance cost			(1,828)		(3,450)		(6,818)
Proceeds from other non-current borrowings			17,645		12,547		30,859
Purchase less sale of own shares by ESOP			(31)		(164)		(164)
Capital element of finance lease repayments			(33)		(33)		(65)
Repayment of borrowings			(3,431)		(4,236)		(14,828)
Dividends paid			(4,291)		(3,719)		(5,879)
Net Cash from financing activities			8,123		951		3,206

Net (decrease)/increase in cash and cash equivalents			(2,174)		(1,468)		1,645
Cash and cash equivalents at beginning of period			16,859		13,221		13,221
Effect of exchange rate fluctuations on cash held			(1,666)		200		1,993

Cash and cash equivalents at end of period	8		13,019		11,953		16,859

CONDENSED CONSOLIDATED HALF YEARLY STATEMENT OF MOVEMENTS IN EQUITY

For the six months ended 30 June 2009

For the 6 months ended 30 June 2009
	Capital		Attributable to equity holders of parent
	Share	Share	Retained	Other	Treasury		Total	Minority	Total
	capital	premium	earnings	reserves	shares	shareholders		interests	equity
				(Note 13)			equity
	£000	£000	£000	£000	£000		£000	£000	£000
At 1 January 2009 (restated)	12,438	24,432	60,370	(1,154)	(1,036)		95,050	-	95,050
Profit for the period	-	-	9,971	-	-		9,971	-	9,971
Other comprehensive income for the period	-	-	(2,779)	2,787	-		8	-	8

Ordinary dividends paid	-	-	(4,291)	-	-		(4,291)	-	(4,291)
									-
Share-based compensation expense	-	-	481	-	-		481	-	481
Tax effect of share based payments	-	-	-	-	-		-	-	-

Arising on the issue of shares	8	86	-	-	-		94	-	94

Purchase of shares	-	-	-	-	(31)		(31)	-	(31)

Transfer on disposal of shares	-	-	(299)	-	299		-	-	-
At 30 June 2009	12,446	24,518	63,453	1,633	(768)		101,282	-	101,282

For the 6 months ended 30 June 2008

	Capital		Attributable to equity holders of parent
	Share	Share	Retained	Other	Treasury		Total	Minority	Total
	Capital	premium	Earnings	reserves	Shares	shareholders		Interests	Equity
				(Note 13)			equity
	£000	£000	£000	£000	£000		£000	£000	£000
At 1 January 2008	12,428	24,338	57,395	878	(1,134)		93,905	128	94,033
Changes in accounting policy (Note 16)	-	-	(6,924)	-	-		(6,924)	-	(6,924)
Restated balance at 1 January 2008	12,428	24,338	50,471	878	(1,134)		86,981	128	87,109
Profit for the period	-	-	8,855	-	-		8,855	26	8,881
Other comprehensive income for the period	-	-	(1,454)	(135)	-		(1,589)		(1,589)
Ordinary dividends paid	-	-	(3,721)	-	-		(3,721)	-	(3,721)
Acquisition of minority interest	-	-	-	-	-		-	(154)	(154)

Share-based compensation expense	-	-	333	-	-		333	-	333

Arising on the issue of shares	1	7	-	-	-		8	-	8
							-
Purchase of shares	-	-	-	-	(164)		(164)	-	(164)

Transfer on disposal of shares	-	-	(262)	-	262		-	-	-
At 30 June 2008	12,429	24,345	54,222	743	(1,036)		90,703	-	90,703

NOTES TO THE CONDENSED CONSOLIDATED HALF YEARLY STATEMENTS

1 Basis of preparation

James Fisher and Sons Public Limited Company (the Company) is a limited liability company incorporated and domiciled in England and Wales and whose shares are listed on the London Stock Exchange. The condensed consolidated half yearly financial statements of the Company as at and for the six months ended 30 June 2009 comprise the Company and its subsidiaries (together referred to as the Group) and the Group's interests in jointly controlled entities.

After making enquires, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the condensed consolidated financial statements.

The Group meets its day to day working capital requirements through operating cash flows, with borrowings in place to fund acquisitions and capital expenditure. Movements on the Group's overall net debt position are shown in Note 8. The Group also has £17,665,000 of undrawn committed facilities.

On 24 August the Group obtained an additional £20m revolving credit facility with Yorkshire Bank. The facility has an initial term of three years.

During 2009 borrowing facilities of £12,500,000 are fully repayable. The facility relates to the Singapore submarine rescue contract which completed in May 2009. Due to a short delay in payment of the S$43,868,000 (£18,141,000) due under the contract that was expected to be received by 30 June 2009, the repayment date for the facility was extended to 31 August 2009. Following signature of the facility agreement on 25 August 2009, the proceeds due from Singapore are expected to be received imminently.

The Group has two revolving credit facilities due for renewal in 2010; a £20,000,000 facility which expires on 27 September 2010 and a £20,000,000 facility which ends on 22 December 2010. The amounts drawn on these facilities at 30 June 2009 are £19,215,000 and £16,500,000 respectively. The Group will open renewal negotiations with the banks in due course and has at no stage sought any written commitment that the facility will be renewed. However, the Group has held discussions with its bankers about its future borrowing needs and no matters have been drawn to its attention to suggest the renewal may not be forthcoming on acceptable terms.

The consolidated financial statements of the Group as at and for the year ended 31 December 2008 are available upon request from the Company's registered office at Fisher House, PO Box 4, Barrow-in-Furness, Cumbria LA14 1HR or at www.james-fisher.co.uk.

The half yearly financial information is presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

Statement of compliance

The condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 'Interim Financial Reporting' as adopted by the European Union (EU). As required by the Disclosure and Transparency Rules of the Financial Services Authority, the condensed consolidated set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2008 with the exceptions described below. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2008.

The comparative figures for the financial year ended 31 December 2008 are not the Company's statutory accounts for that financial year. Those accounts which were prepared under International Financial Reporting Standards (IFRS) as adopted by the EU (adopted IFRS), have been reported on by the Company's auditors and delivered to the Registrar of companies. The report of the auditors was (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.

The half yearly report was approved for issue by the Board of Directors on 24 August 2009.

Significant accounting policies

Except as described below, the accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2008.

During the period the Group has adopted the following new standards, amendments to standards and interpretations issued under IFRS:

Standards:

IFRS 8 Operating segments

Improvements to IFRS

Amendments to:

IAS 1 Presentation of financial statements. A revised presentation

IFRS 2 Share based payment: vesting conditions and cancellations

IAS 23 Borrowing costs

Interpretations:

IFRIC 14 IAS 19 The limit on a defined benefit asset, minimum funding requirements and their interaction

IFRIC 16 Hedges of a net investment in a foreign operation

The adoption of these standards and interpretations had no impact on the Group other than those set out below.

IAS 1 - Presentation of financial statements. A revised presentation

The Group's financial statements now include a statement of comprehensive income and statement of movements in equity as primary statements. These have replaced the statement of recognised gains and losses and the reconciliation of equity which was previously included in the notes to the accounts. There have also been minor changes to the description of some items.

IFRS 2 - Share based payment: vesting conditions and cancellations

The principal effect of this interpretation is that when an award to an employee under a share option scheme lapses due to cancellation of the scheme then the full cost of the award will be expensed in the period in which the option lapses. It has also been clarified that an individual ceasing to pay contributions is classed as a cancellation. Under the previous interpretation the lapsing of the award would have resulted in the fair value of the option charged to date being reversed in the income statement. This interpretation is required to be applied fully retrospectively. Details of the adjustments arising in relation to prior periods are set out in Note 16.

IFRIC 14 - IAS 19 The limit on a defined benefit asset, minimum funding requirements and their interaction

This interpretation clarifies the way in which the actuarial asset ceiling on a defined benefit scheme is calculated and explains how a minimum funding requirement may give rise to an additional liability. The principal effect on the Group has been the incorporation the obligations of the Group under deficit recovery plans into the valuation of the Shore Staff, Dockworkers and Everard Group schemes at 31 December 2007 and subsequent periods. Further details are given in Note 16.

Seasonality of operations

Although some of the Group's operations may sometimes be affected by seasonal factors such as general weather conditions, the Directors do not feel that this has a material effect on the performance of the Group when comparing the interim results to those achieved in the second half of the year.

2 Segmental information

Operating segments

Management has determined the operating segments based on the reports reviewed by the Board that are utilised to make strategic decisions. The Board considers the business primarily from the products and services perspective and has four reportable segments;

Marine Oil Services - Engaged in the sea transportation of clean petroleum products.

Offshore Oil Services - Engaged in the design and assembly, rental and sale of specialist equipment and the provision of related specialist labour to the offshore sector.

Specialist Technical Services - Includes the hire and sale of large scale pneumatic fenders, the design and supply of systems for monitoring strains and stress in structures and equipment, ship to ship transfer services, non-destructive testing, and the provision of services to the nuclear decommissioning industry.

Defence - Provides a range of specialist services for the defence sector, focusing on the design, construction and operation of submarine rescue vehicles and the operation of surface ships.

The Board assess the performance of the segments based on operating profit before central common costs and separately disclosed items but after the Group's share of the post tax results of joint ventures. The Board believes that such information is the most relevant in evaluating the results of certain segments relative to other entities which operate within these industries.

Inter segmental sales are made using prices determined on an arms length basis.

No individual customer accounted for more than 10% of external revenue in the periods included in these condensed consolidated financial statements.

Primary reporting format business segments

The following tables present revenue and profit information regarding the Group's business segments for the six months ended 30 June 2009 and 2008 and the year ended 31 December 2008.

Six months ended
30 June 2009		Continuing Operations

	Offshore Oil		Specialist	Defence	Marine	Total
		Services	Technical		Oil
			Services		Services
		£000	£000	£000	£000	£000
Revenue

Segmental revenue		23,082	52,094	19,586	37,278	132,040
Inter segment sales		-	(1,964)	(98)	-	(2,062)

Group revenue		23,082	50,130	19,488	37,278	129,978


Result

Segment result		5,764	7,971	1,887	174	15,796

Common costs						(1,467)

Loss on ship disposals						(14)

Finance income						87
Finance costs						(1,816)
Exchange gain on loans conversion						454
						(1,275)

Profit on continuing operations before tax						13,040

Taxation						(3,069)
Profit on continuing operations						9,971

2 Segmental information (continued)

Six months ended 30 June 2008

Segmental information for June 2008 and December 2008 has been restated as a result of the prior year adjustment explained in Note 16.

The impact of the restatement on the June 2008 segmental information is to decrease the Group profit from operations by £2,000 and by £11,000 in respect of the year ended 31 December 2008. The restatements have been included in common costs.

	Continuing Operations

	Offshore Oil	Specialist	Defence	Marine	Total
	Services	Technical		Oil
		Services		Services
	£000	£000	£000	£000	£000
Revenue

Segmental revenue	22,538	37,709	17,186	38,370	115,803
Inter segment sales	(4)	(1,617)	(47)	-	(1,668)

Group revenue	22,534	36,092	17,139	38,370	114,135


Result

Segment result	5,806	4,079	2,595	2,674	15,154

Common costs					(1,108)

Profit on ship disposals					175

Finance income					183
Finance costs					(3,075)
Exchange loss on loan conversion					(297)
					(3,189)

Profit on continuing operations before tax					11,032

Taxation					(2,151)
Profit on continuing operations					8,881

2 Segmental information (continued)

Year ended 31 December 2008

	Continuing Operations

	Offshore Oil	Specialist	Defence	Marine	Total
	Services	Technical		Oil
		Services		Services
	£000	£000	£000	£000	£000
Revenue

Segmental revenue	48,294	79,893	29,415	80,819	238,421
Inter segment sales	(8)	(4,629)	(146)	(60)	(4,843)

Group revenue	48,286	75,264	29,269	80,759	233,578


Result

Segment result	12,702	9,598	4,484	5,982	32,766

Common costs					(2,728)

Impairment of non-current assets					(107)
Profit on ship disposals					685

Finance income					412
Finance costs					(6,309)
Exchange loss on loan conversion					(1,152)
					(7,049)

Profit on continuing operations before tax					23,567

Taxation					(5,277)
Profit on continuing operations					18,290

3 Changes in estimates

The preparation of half yearly financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

Except as described below, in preparing these consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2008.

The liabilities reported in respect of the defined benefit pension plans are based on the latest triennial valuations rolled forward to 30 June 2009 and have been reviewed and updated by a qualified actuary. The assumptions underlying this valuation are disclosed in Note 6.

There have been no material changes in contingent liabilities during the current interim period.

4 Separately disclosed items

Separately disclosed items consist of:	6 months ended		6 months ended			Year ended
	30 June 2009		30 June 2008		31 December 2008
		£000		£000		£000

Impairment of ships		-		-		(107)
Loss on ship disposals		(14)		(2)		(2)
Profit on ship disposals		-		177		687
Exchange gain/(loss) on loans		454		(297)		(1,152)
		440		(122)		(574)

In December 2008 the Directors performed an impairment review of the carrying value of mt Rudderman. This vessel was redelivered to its owners in July 2009. In view of the short earnings period before the proposed redelivery full provision was made against the carrying value of the remaining unamortised special survey expenditure of £107,000.

The profit/(loss) on ship disposals relates to the sale of mt Alacrity in January 2008 and mt Annuity in October 2008 and adjustments in respect of the sale of mt Agility and mt Severn Fisher.

The exchange gain/(loss) on loans arises on foreign currency financing loans in the UK in relation to vessels and on the loan to First Response Marine Pte Limited, an entity in which the Group has a 50% interest.

5 Property, plant and equipment

	6 months ended			6 months ended		Year ended
		30 June 2009		30 June 2008		31 December 2008
			£000		£000		£000

Opening net book value			102,018		92,311		92,311
Additions			9,386		7,948		17,622
Reclassifications			-		2,286		2,286
Acquisition of subsidiary undertaking			-		13		92
Disposals			(450)		(406)		(2,326)
Disposal of assets of a subsidiary			(34)		-		-
Depreciation			(4,944)		(4,489)		(9,420)
Exchange differences			(1,169)		501		1,453
Closing net book value			104,807		98,164		102,018

Reclassifications

The reclassification of £2,286,000 in the prior year related to assets held by Fisher Offshore which were previously classified as inventory but are now held for hire by the business.

6 Retirement benefit obligations

Movements during the period in the Group's defined benefit pension schemes are set out below:

					Restated		Restated
					Note 16		Note 16
	6 months ended			6 months ended		Year ended
		30 June 2009			30 June 2008	31 December 2008
			£000		£000		£000

As at 1 January			(18,648)		(19,683)		(19,683)
Expense recognised in the income statement			(562)		(103)		(205)
Contributions paid to scheme			1,766		1,797		3,294
Actuarial loss			(3,205)		(1,435)		(2,054)
At period end			(20,649)		(19,424)		(18,648)

The amount charged to the income statement has increased due to an increase in the interest cost resulting from the application of a higher discount rate to the scheme liabilities which also increased during 2008.

The Group's assets and obligations in respect of its pension schemes at 30 June 2009 were as follows:

		Restated		Restated
		Note 16		Note 16
	6 months ended	6 months ended		Year ended
	30 June 2009	30 June 2008	31 December 2008
	£000	£000		£000

Liabilities
Shore staff pension scheme	(7,502)	(5,080)		(4,914)
Dockworkers pension scheme	(1,836)	(2,149)		(2,094)
Everard Group pension scheme	(2,741)	(2,373)		(2,307)
MNOPF pension scheme	(8,570)	(9,822)		(9,333)
	(20,649)	(19,424)		(18,648)

The Group operates three defined benefit schemes and has an obligation to make payments in respect of the funding deficit of the Merchant Navy Officers' Pension Fund. Full actuarial valuations have been performed on the Dockworkers and Everard Group schemes as at 31 March 2007 and the Shore staff scheme at 31 August 2007.These have been rolled forward to 30 June 2009 and have been incorporated in the interim report. An actuarial deficit of £3,205,000 has been recognised during the period and is reported in the Group statement of comprehensive income together with related deferred tax movements. The movements on the actuarial deficit have arisen largely from the incorporation of revised mortality assumptions, changes in the commutation factor, changes in the value of investments and changes in the discount rate applied to the pension liability. Details of the key actuarial assumptions are shown below.

		6 months ended		Year ended
		30 June 2009	31 December 2008
		%		%
Inflation		3.25		2.6
Rate of general long term increase in salaries - Shore staff		1.5		1.5
Rate of increase of pensions in payment - Dockworkers		3.0		3.0
Rate of increase of pensions in payment - Shore staff		3.25		1.5-2.6
Rate of increase of pensions in payment - Everard		1.5-3.25		1.5-3.0
Discount rate for scheme liabilities		6.6		6.7

Expected rates of return on assets
Equities		8.2		8.2
Fixed interest bonds		3.7		3.7
Gilts/Corporate bonds		3.7/6.7		3.7/6.7
Other assets		4.9		4.9

Post retirement mortality:		years		years
All schemes
Current pensioner at 65	male	20.7		20.7
Current pensioner at 65	female	23.7		23.7
Future pensioner at 65	male	22.5		22.5
Future pensioner at 65	female	25.8		25.8

The post retirement mortality assumptions for each scheme were updated as part of the full actuarial valuations carried out at 31 March 2007 and 31 August 2007. The mortality assumptions are now consistent across all three schemes.

On 30 June 2009 The Group completed the merger of the Dockworkers and Everard Group schemes into the Shore staff scheme. This merger, which is effective from the opening of business on 1 July 2009, is expected to result in substantial savings in the administrative expenses of the pension schemes and enable the combined investments of the previous schemes to be managed on a more efficient and effective basis.

7 Share based payment

In March 2009 awards were granted under the Long Term Incentive Plan (LTIP), and the 2005 Executive Share option scheme (ESOS).

In the case of the LTIP the exercise price of the option is £nil. The options vest if the increase in the Company's diluted earnings per ordinary share over the performance period is at least equal to the rate of inflation plus 9%. If the performance target is not met over the three year contractual period for performance, the option lapses.

In the case of the ESOS the exercise price is equal to the average middle market price for the three dealing days prior to the date of grant, being 354p. The options vest depending on the Company's total shareholder return relative to a comparator group of companies comprising the constituents of the FTSE Small Cap index (excluding investment trusts) at the date of grant. If performance over a three year period is in the upper quartile 100% of the options will vest. If performance is at the bottom of the median, (second) quartile 40% will vest. The amount vesting will decrease on a straight line basis between the median and upper quartile. If performance is below the median quartile no shares will vest. The options lapse if these conditions are not met during the performance period.

The fair value of options granted during the six months ended 30 June 2009 was estimated at the date of grant using the following assumptions:

	LTIP	ESOS

Dividend yield	2.50%	2.50%
Expected volatility	N/A	40%
Expected life of option (years)	3	6.5
Share price at date of grant (p)	394.75	394.75

Options granted (number of shares)	303,018	257,090
Estimated fair value of option at date of grant (£)	3.66	1.23

All schemes are treated as equity settled. The total charge to the income statement in respect of all schemes in the six months ended 30 June 2009 is £481,000 (30 June 2008 restated: £333,000).

8 Reconciliation of net debt

	1 January	Acquisitions	Cash	Other	Exchange	30 June
	2009		Flow	Non Cash	Movement	2009
	£000	£000	£000	£000	£000	£000
Cash in hand and at bank	16,859	-	(2,174)	-	(1,666)	13,019
Cash and cash equivalents	16,859	-	(2,174)	-	(1,666)	13,019
Debt due after 1 year	(89,255)	-	-	(9,608)	497	(98,366)
Debt due within 1 year	(18,881)	-	(14,214)	9,563	46	(23,486)
	(108,136)	-	(14,214)	(45)	543	(121,852)
Finance leases	(228)	-	33	-	-	(195)
Net debt	(91,505)	-	(16,355)	(45)	(1,123)	(109,028)


	1 January	Acquisitions	Cash	Other	Exchange	30 June
	2008		Flow	Non Cash	Movement	2008
	£000	£000	£000	£000	£000	£000
Cash in hand and at bank	13,221	-	(1,468)	-	200	11,953
Cash and cash equivalents	13,221	-	(1,468)	-	200	11,953
Debt due after 1 year	(83,500)	-	-	(6,445)	(275)	(90,220)
Debt due within 1 year	(7,376)	-	(8,311)	6,233	(22)	(9,476)
	(90,876)	-	(8,311)	(212)	(297)	(99,696)
Finance leases	(293)	-	33	-	-	(260)
Net debt	(77,948)	-	(9,746)	(212)	(97)	(88,003)


	1 January	Acquisitions	Cash	Other	Exchange	31 Dec
	2008		Flow	Non Cash	Movement	2008
	£000	£000	£000	£000	£000	£000
Cash in hand and at bank	13,221	-	1,645	-	1,993	16,859
Cash and cash equivalents	13,221	-	1,645	-	1,993	16,859
Debt due after 1 year	(83,500)	-	-	(4,679)	(1,076)	(89,255)
Debt due within 1 year	(7,376)	(22)	(16,031)	4,624	(76)	(18,881)
	(90,876)	(22)	(16,031)	(55)	(1,152)	(108,136)
Finance leases	(293)	-	65	-	-	(228)
Net debt	(77,948)	(22)	(14,321)	(55)	841	(91,505)

Net debt is defined as interest bearing loans and borrowings including preference shares less cash and cash equivalents.

In January 2009 in accordance with the terms of the acquisition agreement between Strainstall Group and The Railway Engineering Company Limited (TRE) the vendors of TRE received a payment of £388,000 in respect of their achievement of the earnout provisions for 2008 included in the purchase agreement. This amount was settled in full by the issue of loan notes by the Company. These loan notes were settled in May 2009.

As referred to in Note 1 the Group extended the repayment date of the £12,500,000 facility relating to the Singapore submarine rescue contract from 30 June to 31 August 2009.There have been no other changes to the Group's borrowing facilities during the period. On 24 August the Group obtained an additional £20m revolving credit facility with Yorkshire Bank. The facility is for three years with interest charged at 2.25% above LIBOR.

9 Taxation

The group has entered the UK tonnage tax regime under which tax on its ship owning and operating activities is 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.

Taxation for the period has been provided at the rate of 23.7% on profit on continuing operations (30 June 2008: 19.5%, 31 December 2008: 22.4%) based on the estimated effective tax rate for the twelve months to 31 December 2009. Of this amount £1,129,000 relates to overseas businesses (2008: £699,000). No tax has been provided in respect of separately disclosed items or discontinued activities (2008: £nil).

10 Income tax on comprehensive income

	6 months ended	6 months ended		Year ended
	30 June 2009	30 June 2008	31 December 2008
	£000	£000		£000
Deferred tax:
Defined benefit plan actuarial losses	271	(19)		3
Fair value of derivatives	(91)	-		-
	180	(19)		3

Current tax
Taxation of foreign exchange profit on internal loans	246	-		(758)

	246	-		(758)

11 Share capital

During the period 29,725 (2008: 6,431) ordinary shares of 25p were allotted on the exercise of share options for an aggregate cash consideration of £94,000 (2008: £8,000).

12 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, after excluding ordinary shares purchased by the employee share ownership trust and held as treasury shares.

Diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The calculation of basic and diluted earnings per share are based on the following profits and numbers of shares:

				Restated Note 16		Restated Note 16
		6 months ended		6 months ended		Year ended
	30 June 2009		30 June 2008		31 December 2008
		£000		£000		£000
Profit attributable to equity holders		9,971		8,855		18,264


Weighted average number of shares
		30 June 2009		30 June 2008		31 December 2008

		Number of		Number of		Number of
		Shares		Shares		Shares
For basic earnings per ordinary share*		49,581,661		49,979,552		49,472,598
Exercise of share options and LTIPs		161,073		388,747		248,810
For diluted earnings per ordinary share		49,742,734		50,368,299		49,721,408

* Excludes 169,068 (June 2008 and December 2008 229,305) shares owned by the James Fisher & Sons Public Limited Company Employee Share Ownership Trust.

			Restated		Restated
	30 June 2009		30 June 2008		31 December 2008
	£000	p	£000	p	£000	p

Basic earnings per share on profit from continuing operations
	9,971	20.11	8,855	17.72	18,264	36.92


Diluted earnings per share on profit from continuing operations
	9,971	20.04	8,855	17.58	18,264	36.73

Adjusted earnings per share

The earnings per ordinary share on continuing operations before separately disclosed items is shown to highlight the underlying earnings trend and is calculated using the number of shares outlined in the table above.

			Restated		Restated
	30 June 2009		30 June 2008		31 December 2008
	£000	p	£000	p	£000	p
Basic earnings per share on profit from continuing operations
	9,971	20.11	8,855	17.72	18,264	36.92
Adjustments:
Exchange (gain)/loss on loan conversion	(454)	(0.92)	297	0.59	1,152	2.33
Loss/(profit) on ship disposals	14	0.03	(175)	(0.35)	(685)	(1.39)
Impairment of ship	-	-	-	-	107	0.22
Adjusted basic earnings per share on profit from continuing operations
	9,531	19.22	8,977	17.96	18,838	38.08


Diluted earnings per share on profit from continuing operations
	9,971	20.04	8,855	17.58	18,264	36.73
Adjustments:
Exchange (gain)/loss on loan conversion	(454)	(0.91)	297	0.59	1,152	2.32
Loss/(profit) on ship disposals	14	0.03	(175)	(0.35)	(685)	(1.38)
Impairment of ship	-	-	-	-	107	0.22
Adjusted diluted earnings per share on profit from continuing operations
	9,531	19.16	8,977	17.82	18,838	37.89

13 Other reserve movements

For the 6 months ended 30 June 2009


	Translation	Hedging	Total
	reserve	reserve
	£000	£000	£000
At 1 January 2009	5,100	(6,254)	(1,154)

Transferred to the income statement on disposal of subsidiary assets	(195)	-	(195)
Cash flow hedges:
Transferred to the income statement	-	4,604	4,604
Fair value gains in the period	-	422	422
Share of fair value gains of joint ventures	-	1,008	1,008
Recognised income in the period including the effect of net investment hedges	(3,052)	-	(3,052)
At 30 June 2009	1,853	(220)	1,633

For the 6 months ended 30 June 2008

	Translation	Hedging	Total
	reserve	reserve
	£000	£000	£000
At 1 January 2008	1,264	(386)	878

Cash flow hedges:
Transferred to the income statement	-	-	-
Fair value losses in the period	-	(731)	(731)
Share of fair value losses of joint ventures	-	(316)	(316)
Recognised income in the period including the effect of net investment hedges	912	-	912
At 30 June 2008	2,176	(1,433)	743

14 Interim Dividend

The interim dividend of 4.80p (2008 4.36p) per 25p ordinary share is payable on 5 November 2009 to those shareholders on the register of the company at the close of business on 7 October 2009. The dividend recognised in the statement of movements in equity is the final dividend for 2008 of 8.65p paid on 15 May 2009. The proposed interim dividend has not been recognised in this report.

15 Disposals and business combinations

On 20 April 2009 the Group completed the disposal of the business and assets excluding cash and freehold property of Reanco Team AS for an initial consideration of NOK 11.5m less working capital adjustments. The Reanco business, which was involved in the fabrication of offshore rig living quarters, formed part of the Offshore Oil Services division but is not considered to be part of the core activities of the division. The disposal resulted in a profit on sale of £160,000. This includes £195,000 in respect of exchange differences on the historical translation of the assets and goodwill disposed of previously reported in the translation reserve. As the effective date of the disposal agreed with the acquirers was 31 December 2008 no trading results for Reanco for 2009 are included in this financial information.

In January 2009 in accordance with the terms of the acquisition agreement between Strainstall Group and The Railway Engineering Company Limited (TRE), the vendors of TRE received a payment of £388,000 in respect of their achievement of the earnout provisions for 2008 included in the purchase agreement. This amount was settled in full by the issue of loan notes by the Company. These loan notes were settled in May 2009.

16 Adjustments arising from changes in accounting policy

As explained in Note 1, the results of earlier years have been restated to reflect the requirements of the revisions to IFRS 2 - Share based payment, in respect of the lapse of employee awards and IFRIC 14 The limit on a defined benefit asset, minimum funding requirements and their interaction.

In respect of IFRS 2 no adjustments arose in the years prior to 2008. The application of IFRIC 14 resulted in changes to the deficits reported in prior periods respect of The Shore Staff, Dockworkers and Everard Group Schemes due to the impact of the liabilities arising from deficit recovery plans agreed with the trustees of the schemes. The deficits at 30 June 2009 are based on the valuation determined under IAS 19 as this liability exceeds the liability under the minimum funding plan.

The adjustments arising from the adoption of these standards were as follows:

	Pension	Deferred	Income	Equity
	deficit	Tax	statement	Period	Cumulative
	£000	£000	£000	£000	£000
Period ended
31 December 2007	(8,307)	1,383	-	(6,924)	(6,924)
30 June 2008	6,598	(1,064)	(2)	5,532	(1,392)
31 December 2008 (full year)	5,741	(1,007)	(11)	4,723	(2,201)
30 June 2009	2,566	(376)	-	2,190	(11)

The adjustments in respect of share based payments are included in the income statement. The adjustments relating to the pension scheme deficit are actuarial losses and have been included in reserves as has the related deferred tax adjustments. No tax arose on the adjustments relating to share based payments.

The cash flow statement has been adjusted to reduce the Group profit before tax from continuing operations by the additional share based payment charge and to increase the share based payment adjustment. This results in no net overall adjustment to net cash from operating activities.

Basic and diluted earnings per share have not been impacted by the restatement.

17 Commitments and contingencies

As at 30 June 2009 the Group had capital commitments of £6,369,000. The principal elements relate to the completion of equipment for the offshore oil division and the construction of new industrial premises. At June 2008 the Group had capital commitments of £9,421,000 relating to similar projects.

18 Financial instruments

Cash flow hedges

At 30 June 2009 the Group held interest rate swap contracts designated to hedge future cash flows relating to interest payments on its core revolving credit facilities. The details of the contracts which swap interest payments from variable to fixed rates and their maturity dates are as follows:

Principal amount	interest rate	maturity date
	(3 month LIBOR)
£13,500,000	2.36% - 2.40%	30 January 2012
£10,500,000	2.91% - 2.99%	30 January 2014
£6,000,000	3.49% - 3.71%	30 January 2019

The Group also held an interest rate swap contract designated against future cash flows relating to interest payments on the Group's borrowings which are secured on the new property in Stavanger. The details of the contract and its maturity date are as follows:

Principal amount		interest rate	maturity date
		(3 month NIBOR)
80,000,000	NOK	3.85%	30 June 2014

At 30 June 2008 the Group held a forward currency contracts designated to hedge future income receivable from the Singapore government in respect of the Singapore submarine rescue contract. Details of these contracts which matured on 30 June 2009 were as follows:

Exchange

rate

Forward contract to hedge expected future income

Sell

SG$ 20,000,000

2.85

SG$ 10,000,000

2.67

SG$ 10,000,000

2.71

The forward currency contract in relation to the Singapore Dollar expired and became ineffective on 30 June 2009. The ineffective portion of the hedge was valued at £2,163,000, being the fair value at 30 June, and is included in the amount transferred to the income statement during the period of £4,589,000.

The remaining interest rate swaps and foreign exchanges contracts have been negotiated to match the expected profile of payments and receipts. At 30 June 2009 and 30 June 2008 these hedges were assessed to be highly effective and unrealised gains of £422,000 (2008: loss £731,000) relating to the hedging instruments are included in equity.

Financial instruments not qualifying for hedge accounting

At 30 June 2009 the Group held foreign currency option contracts to sell US Dollars during the period July to December 2009 as follows:

Exchange

sell

rate

US$ 6,000,000

1.55

At 30 June 2009 the Group held a forward currency contract in respect of the delayed receipt of the income receivable from the Singapore government in respect of the Singapore submarine rescue contract. Details of this contract which matured in July 2009 was as follows:

Exchange

sell

rate

SG$ 40,000,000

2.41

These contracts do not qualify for hedge accounting. During the period a fair value loss of £49,000 has been recognised in the income statement in operating profit in respect of these contracts. Details of the option contracts entered into during the period which matured on or prior to 30 June 2009 are shown below.

Financial instruments maturing in the period

The following financial instruments matured during the period:

	Exchange	included in
	rate	income statement
Forward contract to hedge expected future income		£000

SG$ 40,000,000	2.67 - 2.85	4,589
US$ 132,300	1.76	15

Option contracts

US$ 7,500,000	1.45	130

19 Principal Risks and Uncertainties

Set out below is a summary of principal risks and uncertainties facing the Group for the remaining six months of the year.

Competitive environment

The Group's businesses compete with others in its various markets on price and service. Competition is subject to cycles determined by the balance between supply and demand.

There is currently some degree of over tonnage in the short sea spot tanker market in which the Group operates. There are however, high barriers of entry to the contract of affreightment business with the oil majors, which have vigorous vetting procedures.

Reputational risks for operational incidents

The results of the Group are reliant to a degree on the maintenance by the various businesses of high reputations with their customers. The Group places a particular emphasis on the safety and security of operations but notwithstanding this, it is possible that an adverse operational incident may occur, which could in turn damage the Group's reputation.

Pensions

The Group contributes to a number of defined benefit pension schemes. There is a risk that changes in the market conditions for bond yields and equities and changes in the actuarial assumptions (e.g. on life expectancy), may result in an increase in the deficits in any of such schemes from time to time. There is further risk that the Group could be obliged to fund additional liabilities of an industry wide scheme, the Merchant Navy Officers Pension Fund, in addition to the liabilities in respect of its own employees, in relation to any other employee(s) unconnected to the Group whose employer has become insolvent.

World economic outlook

Demand for the Group's products and services is inevitably a factor of wider economic conditions. During an economic slowdown it is possible that demand for certain products and services provided by the Group may reduce. Furthermore the current economic environment may increase the risk that parties with whom the Group trades become unable to meet their commitments to the Group.

Financial

The Group is exposed to interest rate risk and foreign exchange risk which it seeks to manage, where appropriate, via hedging arrangements. Furthermore the loan facilities entered into by the Group include a number of financial covenants. Breach of these covenants would constitute events of default under such facilities which might result in these borrowings becoming immediately repayable. Recent events in the financial markets have demonstrated the risks associated with credit and liquidity. In 2009 the Group has remained proactive in managing these risks, both fostering existing and developing new relationships with lenders.

20 Related parties

Details of the transactions carried out with related parties in the six months ended 30 June 2009 and 2008 are shown in the table below:

		Services to	Sales to	Purchases	Amounts	Amounts
		related	related	from	owed by	owed to
		parties	parties	related	related	related
				parties	parties	parties
		£000	£000	£000	£000	£000
Foreland Shipping Limited	2009	228	-	-	30	-
	2008	242	-	-	43	-
Fendercare businesses	2009	-	932	-	725	-
	2008	-	409	-	415	-
Everard Insurance Brokers	2009	64	-	15	9	-
	2008	54	-	9	16	1
First Response Marine	2009	279	19,420	-	19,699	-

The Group provides payroll management services to Foreland Shipping Limited, a wholly owned subsidiary of Foreland Holdings Limited a company in which the Group has a 25% equity interest. No profit is made on these services which are excluded from the Group's revenue.

Through its Fendercare business the Group has a 40% interest in several joint ventures providing ship to ship transfer services in West Africa. Fendercare also has a 50% interest in Fendercare BV (Netherlands) and Fendercare Omega (India) and a 25% interest in Fender Care Malaysia SDN BHD (Malaysia).

Everard Insurance Brokers (EIB), a company controlled by Mr W D Everard and Mr F M Everard and members of their family, has provided certain insurance services to the Group since the acquisition of F T Everard and Sons Limited in December 2006. EIB shares certain facilities with FT Everard and Sons who make charges to EIB in respect of their usage.

During the period the Group subscribed S$1m (£464,000) through its James Fisher Marine Services subsidiary (JFMS) to acquire a 50% interest in First Response Marine PTE Ltd (FRM). FRM provides submarine rescue services to the Singapore government under a 20 year service contract which commenced in March 2009. Included in the contract is the provision of a submarine rescue vessel acquired by FRM from JFMS which was invoiced in 2009 at a cost of £18,141,000. Revenue of £13,569,000 was recognised under construction contract accounting in the year ended 31 December 2008. FRM subcontracts part of the provision of the submarine rescue service to JFMS and its subsidiary James Fisher Singapore Pte Ltd. JFMS has also provided a loan to FRM of S$3,624,000 (£1,520,000) to support its day to day operations. The loan which is included in the Group balance sheet under the heading financial assets, is interest bearing and is repayable at the end of the project. Interest charged in the period amounted to £8,000.

21 Post Balance sheet events

On 18 August the Group acquired the entire issued share capital of MB Faber Limited (Faber) for an initial consideration of £4,000,000 with further consideration of £1,250,000 contingent on the achievement of certain earnings targets in the year ended 31 December 2009. Faber is involved in the provision of specialist design and engineering services to the nuclear and aerospace industries.

Further disclosures relating to the acquisition of Faber set out in IFRS 3 - Business combinations, have not been included in this report as there has been insufficient time to obtain and review the relevant financial information from the company and calculate the accounting treatment and disclosures for this business combination.

Independent review report to James Fisher and Sons Public Limited Company

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 which comprises the condensed consolidated half yearly income statement, the condensed consolidated half yearly statement of comprehensive income, the condensed consolidated half yearly balance sheet, the condensed consolidated half yearly cash flow statement, the condensed consolidated half yearly statement of movements in equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ('the DTR') of the UK's Financial Services Authority ('the UK FSA'). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.

As disclosed in Note 1, the annual financial statements of the Group/Company are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

Jonathan Hurst

for and on behalf of KPMG Audit Plc

Chartered Accountants

St James Square, Manchester, M2 6DS

24 August 2009

This information is provided by RNS

The company news service from the London Stock Exchange

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