James Fisher profit down but margins holding up on cost cuts

Marine service provider James Fisher reported a drop in full year profit and revenue but said it was able to mitigate the sharp decline in activity in its offshore oil business with swift cost reduction actions.

For the year to the end of December, statutory pre-tax profit fell to £46.2m from £49.2m on revenue of £437.9m, down from £444.8m.

Underlying diluted earnings per share slipped to 68.5p from 74p but the company lifted its dividend to 23.8p from 22p the previous year.

James Fisher said its Specialist Technical, Marine Support and Tankships businesses all put in a strong performance.

The company’s offshore oil division saw a sharp drop in activity but this was mitigated by cost reductions and meant gross margins held up well.

James Fisher said it took swift action to reduce costs and has cut headcount by 25% since December 2014. Redundancy costs of £1.2m were incurred in the year and ongoing annual costs have been reduced by £3.3m.

Chief executive officer Nick Henry said: “Looking forward, our Marine Support division looks well placed to deliver growth and Tankships continues to trade well at the levels seen last year. Prospects in our Specialist Technical businesses are strong but, as always, are linked to the timing of specific contract awards. Whilst the outlook in our Offshore Oil division is difficult to predict, the business has been strengthened by the cost actions management implemented last year.

“With a strong financial position and robust business model, the board remains confident in the group's ability to deliver further growth and value for its shareholders."

Investec lifted its price target on James Fisher to 1,290p from 1,250p on the back of the results, which it said were ahead of its expectations.

“In a challenging year, firm action has been taken to reduce costs and Marine Support has shown an extremely positive performance, benefiting from project revenues phased towards the second half of the year,” the brokerage said.

At 1258 GMT, James Fisher shares were up 12% to 1,070p.