James Fisher and Sons (FSJ) H1 2024 earnings summary

Executive summary

• First half 2024 performance met expectations, with underlying operating profit up 20% despite a 12.1% revenue decline, driven by business closures, asset sales, and ongoing turnaround efforts.

• Significant deleveraging achieved through non-core disposals, notably RMSpumptools and Martek, generating c.£100 million in cash proceeds in 2024.

• Strengthened executive team and improvements in legal, financial, and supply chain functions, with full Executive Committee now in place.

• Business turnaround is progressing, focusing on core portfolio, capital discipline, and simplification, with targeted investments in growth markets.

• Market fundamentals remain supportive, with a stable long-term customer base and positive outlook for all divisions.

Financial highlights

• Revenue from continuing operations fell 12.1% year-on-year to £221.5m, mainly due to business closures; adjusted for closures, sales were flat.

• Underlying operating profit rose 20% to £16.8m, with margin up 200 bps to 7.6%.

• Net debt reduced to £144.8m at June 30, with further reduction to c.£65m expected by year-end after asset sales.

• ROCE increased by 280 bps to 7.5%.

• Free cash flow from continuing operations improved to £9.3m inflow from a £10.3m outflow in 1H 2023.

Outlook and guidance

• Full-year results expected in line with expectations, with a strong second half anticipated and supportive end markets.

• Profitability uplift expected from Mozambique contract, increased defense activities, Fendercare recovery, and lower costs.

• Refinancing of RCF is well advanced, targeting improved terms and a 150 basis point reduction in interest costs.

• Effective tax rate guided at 29%.

• Capital expenditure for 2024 expected to be similar to 2023 levels.