Marine services group James Fisher and Sons has reported a ‘challenging year’ during 2021, continuing losses seen in 2020.
Publishing its full year accounts for 2021 the company, which provides a range of services to the oil and gas, subsea and defence sectors, reported pre-tax losses of £29 million.
Underlying operating profit for the group totalled £28m, however separate losses of £49.7m as a result of intangible asset impairments and receivables losses from its marine support and offshore oil units pushed the company into the red.
Revenue slid 4.7% on the previous year to £494.1m, with its marine support division in particular falling some £34.9m behind a particularly successful 2020.
The company, which owns several businesses across north-east Scotland, ascribed the challenges to ongoing disruption from the pandemic, a slow rebound in markets and an “underestimation of headwinds” faced by some of its divisions.
James Fisher Offshore, an Aberdeenshire-headquartered business which offers decommissioning services to the oil and gas industry noted that projects were delayed at short notice and that it was exposed to a bad debt provision against amounts receivable from a “financially distressed customer.”
Despite the project delays in Q4 2021, it said demand for decommissioning services continues to increase, with £1m growth in revenue to £8m last year. In response, the group also formed a new sub-brand, James Fisher Decommissioning, earlier this year.
In his review chairman Angus Cockburn also noted that the group “has in the past made a number of acquisitions which have enhanced earnings per share in the short term, but which have contributed to an increase in debt levels and a long-term decline in return on capital employed.”
He said these units had contributed to disappointing financial performance and “a high level of debt.”
In response, the company said it would prioritise reducing debt and optimise its portfolio through a series of disposals, before then focusing on improving its operational and financial performance.
This process is already underway, with the company having sold its Paladin dive support vessel (DSV) and its Materials Testing and NDT businesses last year, generating proceeds of £20m. It confirmed further disposals are on the horizon.
It also exploring the potential for a sale and leaseback option of its DSV Subtech Swordfish, which was acquired in 2019. James Fisher said it had secured a framework agreement with an unnamed Tier 1 contractor that would see the vessel utilised on a long-term basis in the Middle East.
The group intends to now look for opportunities to combine its oil and gas-oriented subsea capabilities with “renewable energy specific solutions”, such as the installation, monitoring and management of high voltage cabling in offshore wind, and the provision of bubble curtains for offshore construction.
It pointed to contract wins by its high voltage cabling business EDS of over £40m over the next 15 years as validation of its proposition to the renewables sector.
Chief executive Eoghan O’Lionaird added: “Whilst activity levels during 2021 were more subdued than anticipated, there is increased visibility of future requirements and confirmation of projects for delivery in 2022 and beyond. We have consolidated our market offering under the James Fisher Renewables brand, which for the first time brings all the relevant operating companies and services under one go-to-market brand.”
The company did not pay an interim dividend for 2021 and its board is not recommending the payment of a final dividend for the year.