James Fisher eyes return to growth in second half

Marine services group James Fisher said it expected to return to growth in the second half and produce "a good improvement" in the full year as new contracts and acquisitions aid the revival after further falls in revenue and profits in the first half.

Continued weakness in the offshore oil market eclipsed strong contributions from the specialist technical, marine support and tankships divisions meant group so that group sales fell 2% to £209.3m, though underlying group profits were down only 0.5% to £19.9m.

Earnings per share were down a tenth of a penny to 29.4p and with continued strong cash conversion of 102%, directors were happy to hoist the interim dividend 10% to 8.55p per share.

Chief executive Nick Henry pointed out that the strong performances from three of the four divisions had lifted underlying operating profit by 18%.

"With new contracts in renewables, defence and nuclear decommissioning contributing fully in the second half and continued firm demand for ship to ship services, we expect to see a resumption of growth in the second half leading to a good improvement in the result for the full year."

Recent contract wins include for the Galloper Windfarm, Indian submarine rescue and Winfrith decommissioning progressing well, while in the second half of the year Fisher has completed the acquisitions of Singapore-based Lexmar, a specialist provider of diving equipment, and Hughes, a sub surface engineer specialising in the renewables market.

While profits at marine support, specialist technical and tankships grew 26%, 9% and 15% respectively, offshore oil delivered a result similar to that seen in the second half of 2015.

Fisher reported that demand for its services from the offshore oil market "appears to have stabilised but at the low levels experienced since the middle of last year" and it is "too early to look for recovery".

Otherwise the outlook is brighter, with the ship to ship (STS) market "firm" and the beginning of the Galloper project boosting marine support, while specialist technical's defence and nuclear businesses are "gaining momentum" as the Indian submarine rescue and Winfrith decommissioning contracts are mobilised, and tankships continues to enjoy excellent trading.