9th Mar 2005 07:01
Fisher (James) & Sons PLC09 March 2005 James Fisher & Sons plc ("James Fisher" or "the Company") 2004 Preliminary Results Strong Profit Growth, Strong Balance Sheet and Cashflows; Well Placed James Fisher, the marine services provider, announces its Preliminary Resultsfor the year ended 31 December 2004, representing another year of encouraginggrowth in profitability supported by strong underlying cashflows. Marine Support Services, the largest of the Company's three divisions, nowaccounts for 46% of group profits. Operating profits for are up by over 300%over the last two years and the return on capital remains most attractive. Financial Highlights • Turnover up 2% to £78.8m (2003: £77.2m). • Pre-tax profit up 29% to £13.1m (2003: £10.1m*). * After adding back adjustment to Nexus impairment provision of £4.8m. • Basic earnings per share up 22% to 23.20p (2003: 19.01p*) * After adjustment for Nexus impairment. • Proposed final dividend up 15% to 4.95p (2003: 4.30p), payable 6 May 2005. • Good organic growth. • Acquisitions integrated well. • Debt reduced to £36.6m (2003: £55.85m) • Gearing reduced to 40% (2003: 68%). • £7.5m of cash used to fund acquisitions during the year. Operating Highlights • Marine Support Services - Operating profits up 25% to £9.1m (2003:£7.3m); Organic growth and acquisitions contributed; Increased on turnover of£26.01m (2003: £19.91m); increased sales, services and products; continuedexpansion in defence, North-Sea non-defence areas, including nuclear industry;sales now global. • Marine Oil Services - Tankships: Operating profit up 13% to £6.9m(2003: £6.1m) on turnover of £45.15m (2003: £46.57m) due to improvement achievedin second half; trading from 4 less vessels than in 2003 at 17 tankships, foroil majors in UK coastal market; not overly influenced by global cycles. • Cable Ships - Operating profit 10% down at £3.9m (2003: £4.3m); onturnover of £7.60m (2003: £10.74m) due to impact of weaker dollar on charterrevenue from General Dynamics. Nexus sold in first half 2004; other two vesselsbenefiting from charters expiring May 2006 and December 2006. • Nick Henry became Group Chief Executive in December 2004. • Two Senior Management Appointments. Commenting on the Outlook, Chairman, Tim Harris, CBE, said: "During 2004 we havecontinued to make excellent progress with our strategic plan to expand ourMarine Services operation. The creation of James Fisher Defence and James FisherNuclear gives further clarity and focus to these areas; the Scan Tech group ofcompanies enjoys a strong market position. Tankships continues to provide astrong platform of cashflow. The cable ship market remains at a cyclical low.Our financial strength enables us to determine when it most advantageous torealise their potential." He added: "James Fisher has a clear view of what it is seeking to do and isdeveloping a track record of achievement. It also has a strong balance sheet andexcellent cash flow. Overall, it is well placed to continue to grow aggressivelyboth organically and by acquisition, providing increasing value for ourshareholders." For further information: James Fisher & Sons plc Tim Harris, Chairman 020 7338 5808 Nick Henry, Chief Executive Officer 020 7338 5802 Michael Shields, Group Finance Director Binns & Co PR LtdPeter Binns 020 7786 9600Paul McManus 07890 541 893Matt Ridsdale 07789 556 905 Chairman's Statement Overview 2004 was a good year for James Fisher with an encouraging growth inprofitability supported by strong underlying cash flows. Most importantly, thestrongest growth in profitability came from the marine support servicesdivision, which now accounts for 46% of group profits, as the largest profitscontributor. Financial gearing was reduced to 40% at the year-end despite theuse of £7.5 million cash to fund the acquisitions made during the year. Thisconfirms the financial strength of the Company and its ability to expand itsprofitable marine service activities further in 2005. 2004 2003Turnover +2% £78.8 million £77.2 millionPre tax profit +29% £13.1 million *£10.1 millionBasic earnings per share* +22% 23.20p *19.01pProposed final dividend +15% 4.95p 4.30p * 2003 adjusted by adding back Nexus impairment provision of £4.8 million(9.97p) Dividend Your Board is recommending a final dividend of 4.95 p per share, giving a totalfor the year of 7.72p (2003 - 6.77p) - an increase of 14%. The dividend ispayable on 6 May 2005 to shareholders on the register on 15 April 2005. Marine Support Services Operating profits grew by 25% to £9.1 million (2003 - £7.3 million) with bothinternal organic growth and the WM Defence (renamed James Fisher MIMIC Limited)and Air Supply acquisitions contributing well. The operating profits from thisdivision have grown by more than 300% over the last two years and the return oncapital remains most attractive. Defence Services We have established a new company, James Fisher Defence Limited, with effectfrom 1 January 2005 with Simon Harris as Managing Director, to be the focus ofour defence activities which we are seeking to expand. Our key expertise, alegacy from our James Fisher and Rumic pasts, relates to commercial shipoperation and submarine rescue and we are building a new team based on ourexisting resources, together with some recruits with particular skills. Despitethe well publicised defence cuts, our view is that this sector will continue tooffer good opportunities because limited resources will put greater emphasis onvalue for money, something we are well placed to provide with our commercialexpertise. During 2004, we experienced mixed fortunes. In September 2004 the Ministry ofDefence exercised its purchase option for RFA Oakleaf, after a successfulnineteen year charter, giving us a capital profit of £0.6m, although this hasalso resulted in the loss of £1 million per year in contribution. However, wereceived our first dividend of £1 million from AWSR Shipping Limited, nowrenamed Foreland Shipping Limited, in August and the charters of the twocommercial ships have been recently extended until December 2007. James FisherMIMIC Limited, which provides the Conditioned Based Maintenance System installedon the majority of Royal Navy warships, has now been fully integrated and ismaking a good contribution. Our submarine rescue expertise is widely recognised both in the UK andinternationally and during 2004 we have been very busy. In October 2004, as partof the Royal Navy exercise named 'Flying Dutchman 2004', we successfullyprovided a complete package of a mother ship and commercial diving team for theoperation of the United Kingdom Submarine Rescue Service, which we manage, in asubsurface exercise with the Norwegian Navy. More than forty Royal Navypersonnel were present for this "combined operation" together withrepresentatives of foreign Navies. Offshore Oil Services - Scan Tech The Scan Tech companies had a good year in 2004 and with an expanding productrange we are well placed to take advantage of the increased level of activity inthe North Sea and elsewhere, encouraged by the recent high level of oil prices.The acquisition of the Air Supply companies in late 2003 helped expand our rangeof compressors that are particularly in demand for well testing. We are nowfollowing our North Sea customers into new markets in the former Sovietrepublics and elsewhere. In December 2004 we purchased Reanco Team AS, based inNorway, for the equivalent of £2.12 million with a further £0.25 million ofdeferred consideration which is dependent upon results. This company, whichprovides maintenance services in the Norwegian sector of the North Sea, is beingintegrated into Scan Tech with whom it shares common customers. Our HydroDigger operation picked up in the second half with work in Egypt andAustralia as well as the North Sea. We are now marketing it globally. Specialist technical services The results of our nuclear decommissioning business were encouraging in 2004. Weare making good progress with "Operation Cumbria", our programme of expandingJames Fisher Rumic Limited's (Rumic) profitable nuclear decommissioningbusiness. We have now completed three acquisitions of similar and complementarycompanies which also provide specialist decommissioning support to BNFL atSellafield, a local Cumbrian site for James Fisher. In December 2004 wepurchased Remote Marine Systems Limited (RMS) and Nuclear DecommissioningLimited (NDL) for a total of £4.9 million in cash and, in January 2005, HarshEnvironment Systems Limited (Harsh) for £1.6 million in cash. We are currentlyin the process of merging Rumic's nuclear activity, RMS, NDL and Harsh into onespecialist decommissioning company to be called James Fisher Nuclear Limitedwith, as Managing Director, Gordon Robertson who formerly held that positionwith RMS. Harsh has excellent facilities close to Sellafield itself and infuture we shall use them as James Fisher Nuclear's shop window. BNFL, ourcustomer, has been most supportive of these developments as it is seeking torationalise its own supplier chain and sees a stronger, local and specialistsupplier as being an advantage. Marine Oil Services - Tankships The operating profit of £6.9 million was 13% better than in 2003 (£6.1 million).This improvement, which was entirely achieved in the second half, wascommendable as the number of vessels we have been trading was four less than thetwenty-one we had in 2003. Improvement in contract rates, in part the result ofthe withdrawal of tonnage from chartered-out to own-operation together with astronger spot market, were responsible. Our fleet renewal programme continues apace. In December 2004 we took deliveryof Cumbrian Fisher and in February 2005 her sister Clyde Fisher (both 12,800dwt) from the Samho Ship Yard in Korea. The vessels will begin trading in ourcontract programme on their arrival in Europe. One vessel will replace the timecharter of the Linnea (11,500 dwt) which we are not renewing because of her age,the other will add to the tonnage at our disposal. Shannon Fisher and her sisterSolway Fisher (both 5,000 dwt) are scheduled for delivery from the Damen Galatiyard in Romania in late 2005 and mid 2006 respectively. All four new vessels arebeing financed by ten-year bareboat charters with First Ship Lease Limited.During 2004 we sold Eastgate (3,400 dwt) and Westgate (3,400 dwt) both of whichwere built in 1979 for close to their book values. Tankships provides a marine service to the oil majors in the UK coastal marketwhich is not closely related to global shipping markets. Its operating profitrecord has shown some consistency, not being overly influenced by globalshipping cycles. In recent years this record has been enhanced by the employmentof chartered as well as owned tonnage which has enabled the return on capitalemployed to be improved significantly (2004 - 12%) We shall continue to seek animprovement in the return on capital by managing the size of our fleet to suitmarket conditions, including, when the need and opportunity arises, the sale ofexisting vessels. Cable Ships The operating profit of £3.9 million was 10% lower than last year (£4.3 million)principally as a result of the effect of a weaker dollar on charter revenuereceived from General Dynamics. Nexus, which was written down to scrap value at31 December 2003, was sold in the first half of 2004. Oceanic Princess and Oceanic Pearl continue to benefit from the General Dynamicscharters which expire in May 2006 and December 2006 respectively. Both shipsremained in lay-up throughout 2004 reflecting the bleak state of the cablelaying market. At least this encouraged some rationalisation and eight vesselsfrom the world cable fleet of around fifty vessels were either scrapped orconverted for other use in 2004. On the demand side, there was some modestincrease in cable laying activity but this was offset by a reduction in therequirement for maintenance ships. In recent months there has been a slightlyhigher level of enquiries and we have just agreed terms with Canyon Offshore forwork for Oceanic Princess off Indonesia. Although this contract has been pricedmarginally and will not make a major profit contribution in 2005, it will enablethe ship to be mobilised again. Directors and Employees Nick Henry, who joined James Fisher as Managing Director of Tankships in early2003, took over from Angus Buchanan as Chief Executive on Angus's resignation inDecember 2004. On behalf of the Company, I would like to welcome Nick to theBoard and thank Angus for his contribution to James Fisher's success. Otherwisethere have been no changes to the Board since the last AGM. During the year we have welcomed a number of new colleagues to the Company, oneof whom, Gordon Robertson, has been appointed as Managing Director of JamesFisher Nuclear Limited. It is pleasing that we have been able to keep themanagement of the companies we have acquired and in this context I wouldparticularly like to recognise the constructive roles played by Roger Chapman ofRumic and Bjorn Erik Bjornsen in Scan Tech. The success of 2004 has inevitably created a high workload in many areas of thebusiness and I would like to thank our employees for all their hard work andgood humour during the last year and I look forward to their continuing supportin the year ahead of us. Outlook Over the last three years the Company has had a clear strategic plan to expandits marine service operations both in terms of scale and skills and during 2004we have continued to make excellent progress towards this aim. This has beenachieved both by organic growth as well as strategic acquisitions, at the sametime we have invested in the people to take the business forward in 2005 andbeyond. The creation of James Fisher Defence Limited and James Fisher Nuclear Limitedgives further clarity and focus to what we are doing in these areas and the ScanTech group of companies already enjoys a strong position in the particularmarkets in which it operates. Our acquisitions have been, and will continue tobe, close to where we have existing skills and customers, maintaining theconsistency and coherence of our marine service expansion. Tankships continues to provide a strong platform of cash flow and skills whichwill be important in our future development. The cable ship market remains at a cyclical low. There has been some progress onship attrition during 2004 but the market remains weak. The new employment forOceanic Princess is a positive sign although it is still too early to predictwhen there will be a significant change in the overall market. The Company'sfinancial strength is such as to enable us to determine how and when it is mostadvantageous to realise the potential from the cable ships. James Fisher has a clear view of what it is seeking to do and is developing atrack record of achievement. It also has a strong balance sheet and excellentcash flow. Overall it is well placed to continue to grow aggressively bothorganically and by acquisition, providing increasing value for our shareholders. GROUP PROFIT AND LOSS ACCOUNT for the year ended 31 December Notes 2004 2003 £000 £000 ------- ------- Turnover: group and share of joint ventures 86,858 84,574less share of joint ventures (8,105) (7,359) ------- ------- 78,753 77,215 ------- -------ongoing 78,624 77,215acquisitions 129 - ------- -------Group turnover 2 78,753 77,215 ------- -------Cost of sales (59,433) (60,308)C.S. Nexus impairment - (4,769) ------- -------Cost of sales (59,433) (65,077) ------- -------Gross profit after impairment 19,320 12,138Administrative expenses ------- -------goodwill amortisation (915) (623)general (5,043) (4,474) ------- ------- (5,958) (5,097)Group operating profit ------- -------ongoing 13,289 7,041acquisitions 73 - ------- ------- 13,362 7,041 Share of operating profit in joint ventures 3,876 3,744 ------- -------Total operating profit: group and share of joint 17,238 10,785venturesContinuing operationsProfit/(loss) on sale of ships 475 (1,033) ------- ------- 17,713 9,752Net interest payable ------- -------Group (2,181) (2,237)Joint ventures (2,596) (2,478)Exchange gain on loan conversion 155 343 ------- ------- (4,622) (4,372) ------- -------Profit on ordinary activities before taxation 13,091 5,380 Taxation 5 (1,891) (1,050) ------- -------Profit on ordinary activities after taxation 11,200 4,330Dividends ------- -------Non equity (4) (4)Equity (3,750) (3,250) ------- ------- (3,754) (3,254) ------- -------Retained profit for the year 7,446 1,076 ======= ======= pence penceBasic earnings per ordinary share 7 23.20 9.04Diluted earnings per ordinary share 22.91 8.70Ordinary dividends paid or payable:Interim 2.77 2.47Final 4.95 4.30 ------- ------- 7.72 6.77 ======= ======= GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 31 December Notes 2004 2003 £000 £000 ------- ------- Profit for the financial year excluding profit of 9,981 3,083joint venturesShare of joint ventures' profit for the year 1,219 1,247 ------- -------Profit on ordinary activities after taxation 11,200 4,330Currency translation differences on foreign currencynet investmentsExchange difference on loan (150) 406 303 (476) ------- -------Total recognised gains and losses relating to the 11,353 4,260yearPrior year adjustment 1 (357) - ------- -------Total recognised gains and losses since last annual report 10,996 4,260 ======= ======= GROUP BALANCE SHEET at 31 December Notes (Restated) 2004 2003 £000 £000 ------- --------Fixed assetsIntangible assets - goodwill 20,250 17,397Tangible assets 103,091 114,455Investments:Investments in joint ventures: ------- --------Share of gross assets 52,389 52,333Share of gross liabilities (50,579) (50,742) ------- -------- 1,810 1,591Other investments 1,157 1,157 ------- -------- 126,308 134,600Current assetsStocks 4,028 2,377Debtors 14,901 18,895Cash at bank and in hand 10,045 5,455 ------- -------- 28,974 26,727 ------- --------Creditors: amounts falling due within oneyearTrade and other (17,789) (16,566)Bank loans (7,679) (9,674) ------- -------- (25,468) (26,240) ------- --------Net current assets 3,506 487 ------- -------- Total assets less current liabilities 129,814 135,087Creditors: amounts falling due after more thanone yearTrade and other (14) -Bank loans (38,472) (51,633) ------- -------- (38,486) (51,633) ------- --------Provisions for liabilities and charges (287) (200) ------- --------Net assets 91,041 83,254 ======= ======== Capital and reserves ------- --------Called up share capital 12,405 12,311Share premium account 23,810 23,558Other reserves (1,212) (971)Profit and loss account 56,038 48,356 ------- --------Shareholders' funds 9 91,041 83,254 ======= ======== GROUP CASH FLOW STATEMENT for the year ended 31 December Notes 2004 2003 £000 £000Net cash inflow from operating activities 6(a) 19,298 22,848 ------- ------- Dividends from joint venture undertakings 1,000 - Returns on investments and servicing of financeInterest received 314 341Interest paid (2,482) (2,562)Preference dividend paid (4) (4) ------- ------- (2,172) (2,225) ------- -------TaxationCorporation tax paid (1,187) (386)Overseas tax paid (396) (314) ------- ------- (1,583) (700) ------- -------Capital expenditure and financial investmentPurchase of tangible fixed assets (3,649) (2,214)Refund of payment to acquire tangible fixed 3,851 -assetsSale of tangible fixed assets 4,966 2,027Sale/(purchase) of shipbuilding contracts 7,293 (7,293) ------- ------- 12,461 (7,480) ------- ------- Acquisitions and disposalsCash acquired with subsidiary undertakings 1,204 888Purchase of subsidiary undertakings (7,454) (17,603)Loans to joint venture - (944)Loans to joint ventures repaid 225 1,997 ------- ------- (6,025) (15,662) ------- ------- Equity dividends paid (3,410) (2,978) ------- ------- Net cash inflow/(outflow) before management ofliquid resources and financing 19,569 (6,197)Management of liquid resourcesIncrease in short term deposits (465) (1,535) ------- ------- FinancingIssue of ordinary shares 346 251Purchase less sales of own shares by ESOP (616) (75)New secured loans 12,074 19,898New unsecured loans 500 -Repayment of loans (27,409) (13,326) ------- ------- (15,105) 6,748 ------- ------- Increase/(decrease) in cash in the year 3,999 (984) ------- ------- Reconciliation of net cash flow to movement innet debtIncrease/(decrease) in cash in the year 3,999 (984)Cash outflow/(inflow) from decrease/(increase) in 14,835 (6,572)debtCash inflow from increase in short term 465 1,535deposits ------- -------Change in net debt resulting from cashflows 19,299 (6,021) Exchange differences 281 343Loans acquired with subsidiary undertakings (334) (2,106) ------- -------Movement in net debt 19,246 (7,784) Net debt at 1 January 6(b) (55,852) (48,068) ------- -------Net debt at 31 December (36,606) (55,852) ======= ======= NOTES TO FINANCIAL STATEMENTS 1. Financial Information The financial information set out above does not comprise the company'sstatutory accounts as defined by Section 240 of the Companies Act 1985.Statutory accounts for the previous financial year ended 31 December 2003 havebeen delivered to the Registrar of Companies. The auditors' report on thoseaccounts was unqualified and did not contain any statement under section 237(2)or (3) of the Companies Act 1985. The auditors have given an unqualified opinion on the accounts for the yearended 31 December 2004 which will be delivered to the Registrar of Companiesfollowing the annual general meeting. The financial information above has been prepared on the basis of the accountingpolicies set out in the group's statutory accounts for the year ended 31December 2003. The comparative balance sheet at 31 December 2003 has been restated to reflectthe change in accounting policy following the publication of UITF 38, Accountingfor ESOP Trusts, which is mandatory for accounting periods ending on or after 22June 2004, by the Accounting Standards Board. The change in accounting policyhas resulted in a prior year adjustment for both the group and the company. Forthe group and company, shareholders' funds at 1 January 2004 have been reducedby £0.357m, investments have been reduced by £0.357m, other reserves have beenreduced by £0.971m and profit and loss account reserves at 1 January 2004increased by £0.614m. There was no impact on the results for the year ended 31December 2003. 2. Segmental analysis Geographical market supplied Turnover Marine Marine Support Services Oil Services Cable ships Total 2004 2003 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000 £000 £000 Continuing operations UK & 15,806 12,451 40,037 41,971 - 1,377 55,843 55,799IrelandContinental 8,380 6,052 5,111 4,596 - - 13,491 10,648EuropeAmericas 285 1,296 - - 7,600 9,360 7,885 10,656Rest of 1,534 112 - - - - 1,534 112World ------ ------ ------ ------ ------ ------ ------ ------ 26,005 19,911 45,148 46,567 7,600 10,737 78,753 77,215 ====== ====== ====== ====== ====== ====== ====== ====== Included in turnover for Marine Support Services is an amount of £0.129m inrespect of acquisitions during the year. This arose in Continental Europe. Turnover By geographical origin The group operates from two geographical locations as follows: 2004 2003 £000 £000 ------ ------Continuing operations United Kingdom and Ireland 71,050 70,894Norway 7,703 6,321 ------ ------ 78,753 77,215 ====== ====== Operating profit By geographical origin United Kingdom & Ireland Norway Total 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000Continuingoperations Ongoing 14,245 12,977 1,679 978 15,924 13,955Acquisitions - - 73 - 73 -Impairment - (4,769) - - - (4,769)Share of operating 3,876 3,744 - - 3,876 3,744profit in jointventures ------ ------ ------ ------ ------- ------- 18,121 11,952 1,752 978 19,873 12,930 ====== ====== ====== ====== Goodwill amortisation (relates to Marine Support (915) (623)Services)Common costs (1,720) (1,522) ------- -------Total operating profit - group and share of joint 17,238 10,785ventures ======= ======= Profit on ordinary activities before taxation Marine Marine Support Services Oil Services Cable ships Total 2004 2003 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000 £000 £000Continuingoperations Ongoing 5,195 3,572 6,850 6,061 3,879 4,322 15,924 13,955Acquisitions 73 - - - - - 73 -Impairment ofCS NexusShare of - - - - - (4,769) - (4,769)operatingprofitin jointventures 3,876 3,744 - - - - 3,876 3,744 ------ ------ ------ ------ ------ ------ ------- ------- 9,144 7,316 6,850 6,061 3,879 (447) 19,873 12,930 ====== ====== ====== ====== ====== ====== Administration expenses: Goodwill amortisation (relates to Marine Support Services) (915) (623)Common Costs (1,720) (1,522) ------- -------Total operating profit: group and share of joint ventures 17,238 10,785Continuing operationsProfit/(loss) on sale of ships 475 (1,033) ------- ------- 17,713 9,752Net interest payable ------- -------Group (2,181) (2,237)Joint ventures (2,596) (2,478)Exchange gain on loan conversion 155 343 ------- ------- (4,622) (4,372) ------- -------Profit on ordinary activities before taxation 13,091 5,380 ======= ======= Net operating Marine Marineassets Support Services Oil Services Cable ships Total 2004 2003 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000 £000 £000Net assetsby segment: Continuing 34,123 28,201 54,831 64,170 40,325 48,067 129,279 140,438operationsShare of netassets ofjointventures 1,810 1,591 - - - - 1,810 1,591 ------ ------ ------ ------ ------ ------ ------- ------- 35,933 29,792 54,831 64,170 40,325 48,067 131,089 142,029 ====== ====== ====== ====== ====== ====== Net operating assets by geographical area of 2004 2003origin £000 £000 ------- -------Continuing operationsUnited Kingdom & Ireland 113,835 127,627Norway 17,254 14,402 ------- ------- 131,089 142,029 ======= ======= Net operating assets includes £3.207m in the Marine Support Services segment relating to acquisitions, of which£0.610m is in Norway and £2.597m is in United Kingdom & Ireland. 2004 2003 £000 £000 ------- -------The net operating assets are reconciled to shareholders' funds as follows: Net operating assets 131,089 142,029Fixed asset investments 1,157 1,157Net borrowings (36,606) (55,852)Corporation tax (1,601) (1,277)Deferred tax (287) (200)Deferred consideration (301) (535)Dividends payable (2,410) (2,068) ------- -------Shareholders' funds 91,041 83,254 ======= ======= 3. Group operating profit Group operating profit is stated after charging depreciation on tangible fixedassets of £8.259m (2003 £14.295m, which includes an impairment loss of £4.769m)and amortisation of goodwill of £0.915m (2003 £0.623m). 4. Exceptional items (a) Exceptional items reported before group operating profit 2004 2003 £000 £000CS Nexus impairment - 4,769 ====== ====== CS Nexus impairment As part of the preparation of the financial statements for the year ended 31December 2003, the directors performed an impairment review of the cable layingships CS Oceanic Princess, CS Oceanic Pearl and CS Nexus. The result of thisreview was an impairment provision of £4.769m against the CS Nexus primarily inview of her age of thirty-two years. On 20 April 2004 the vessel was sold fornet proceeds of £1.101m. (b) Exceptional items reported after group operating profit Continuing shipping operations 2004 2003 £000 £000Profit/(loss) on sale of ships 475 (1,033) ====== ====== The tax effect of the profit on sale of ships was £nil (2003 £nil). 5. Taxation The group has entered the UK tonnage tax regime under which its ship owning andoperating activities are based on the net tonnage of vessels operated. Anyincome and profits outside the tonnage tax regime are taxed under the normal UKcorporation tax rules. Tax on profit on ordinary activities 2004 2003 £000 £000 The tax charge is made up as follows: Current tax:UK tonnage tax 32 36UK corporation tax 832 501 ------ ------ 864 537Foreign tax 477 353UK corporation tax underprovided in previous years 21 88Irrecoverable ACT relating to previous years 388 - ------ ------Group current tax 1,750 978Share of joint venture's current tax 61 19 ------ ------Total current tax 1,811 997 ------ ------ Deferred tax:Group deferred tax 80 53 ------ ------Tax on profit on ordinary activities 1,891 1,050 ====== ====== 6. Cash flow statement (a) Reconciliation of operating profit to net cash inflow fromoperating activities 2004 2003 £000 £000 Group operating profit 13,362 7,041Depreciation and refit amortisation 8,259 9,526Impairment of fixed asset - 4,769Amortisation of goodwill 915 623Increase in stocks (150) (439)(Increase)/decrease in debtors (2,697) 2,247Decrease in creditors (790) (1,110)Profit on sale of tangible fixed assets (59) (86)Share based compensation 458 277 ------ ------Net cash inflow from operating activities 19,298 22,848 ====== ====== (b) Reconciliation of net debt 1 January Acquisitions Cash Flow Other non-cash Exchange 31 December 2004 movement 2004 £000 £000 £000 £000 £000 £000 Cash inhand, atbankShort-term 3,920 - 3,999 - 126 8,045deposits* 1,535 - 465 - - 2,000 ------- ------- ------- ------- -------- -------Debt dueafter oneyearDebt due (51,633) (300) - 13,383 78 (38,472)within oneyear (9,674) (34) 14,835 (13,383) 77 (8,179) ------- ------- ------- ------- -------- ------- (61,307) (334) 14,835 - 155 (46,651) ------- ------- ------- ------- -------- -------Net debt (55,852) (334) 19,299 - 281 (36,606) ======= ======= ======= ======= ======== ======= * Short term deposits are included within cash at bank and in hand in the balance sheet. 7. Earnings per ordinary share The calculations of earnings per ordinary share are based on the followingprofits and numbers of shares. 2004 2003 £000 £000 Profit for the financial year 11,200 4,330Preference dividends (4) (4) ------- ------- 11,196 4,326 ======= ======= Weighted average number of shares: 2004 2003 Number of Number of shares shares For basic earnings per ordinary share* 48,261,182 47,855,653Exercise of share options and LTIPs 605,628 1,850,531 -------- --------For diluted earnings per ordinary share 48,866,810 49,706,184 ======== ======== *excludes shares owned by James Fisher and Sons Public Limited Company EmployeeShare Ownership Trust 8. Dividends paid and proposed 2004 2003 £000 £000Non-equity:3.5% Preference paid (2003 3.5%) 4 4Equity:Ordinary interim paid of 2.77p per share(2003 2.47p per share) 1,359 1,200Ordinary final proposed of 4.95p per share(2003 4.30p per share) 2,436 2,100Less dividends on own shares held by the ESOP (45) (50) ------ ------ 3,754 3,254 ====== ====== The ordinary dividends are based upon the following number of ordinary issuedshares: 2004 2003 No. No.Interim 49,069,964 48,600,800Final 49,219,958 48,843,215 The ordinary final dividend will be paid on 6 May 2005 to those shareholdingsregistered in the books of the company at the close of business on 15 April2005. 9. Reconciliation of movements in group shareholders' funds (Restated) 2004 2003 £000 £000Profit for the financial year 11,200 4,330Dividends paid and proposed (3,754) (3,254)Currency translation differences on foreign currency net 153 (70)investments ------ --------Arising on share issue 346 251Share based compensation expense 458 277ESOP trust purchases less sales of shares (616) (75) ------ --------Net addition to shareholders' funds 7,787 1,459Opening shareholders' funds as previously reported 83,254 82,152Prior year adjustment re ESOP shares as restated - (357) ------ --------Closing shareholders' funds 91,041 83,254 ====== ======== 10. The AGM will be held at 12:00 noon on Friday 29 April 2005 at theAbbey House Hotel, Abbey Road, Barrow-in-Furness, Cumbria. 11. Report and Accounts will be posted to members on 30 March 2005.Copies will be made available to members of the public at Fisher House, PO Box4, Barrow-in-Furness, Cumbria, LA14 1HR. 12. This preliminary statement was approved by the Board of Directorson 9 March 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
James Fisher and Sons