James Fisher and Sons H1 Earnings Call Highlights

Key Points

• First-half performance improved: Revenue rose 2.1% to nearly £196 million, while underlying operating profit increased 27.9% to £14.2 million. Defense and maritime transport offset weaker energy-market conditions.
• Defense was the key growth driver: Revenue jumped 43% and operating profit rose to £5.3 million, supported by submarine rescue and military-diving contracts. The division had a £295 million order book plus approximately £95 million in framework awards.
• Outlook remains unchanged despite energy weakness: Energy revenue fell 20.6% and operating profit declined 45%, while net debt increased to £65.7 million. The company expects continued momentum in defense and maritime transport but persistent energy-market challenges in the second half.

James Fisher and Sons LON: FSJ reported higher first-half revenue and underlying operating profit for 2026, as strong performances in its defense and maritime transport businesses offset weaker conditions in energy markets.

Revenue for the six months ended June 30 rose 2.1% year over year to just under £196 million, while underlying operating profit increased 27.9% to £14.2 million. The company’s underlying operating margin rose to 7.2%, and return on capital employed improved by 210 basis points to 8.2%.

Chief Executive Officer Jean Vernet said the company delivered results in line with expectations despite market headwinds in energy. “We delivered a solid first half performance with robust trading in defense and maritime transport, helping to offset challenging market conditions in energy,” he said.

Defense drives profit growth

Defense was the company’s strongest division during the period. Revenue increased 43% to £53.8 million from £37.6 million a year earlier, supported by submarine rescue, Tactical Diving Vehicles and military diving activities. Operating profit rose to £5.3 million from £700,000, bringing the division’s margin to just below 10%.

Chief Financial Officer Karen Hayzen-Smith said the improvement reflected both prior investment and execution of recently won contracts. The company also cited operational-efficiency improvements and supply-chain savings.

The defense order book stood at £295 million at June 30, alongside approximately £95 million of awards under framework agreements. James Fisher estimates that about 60% of the combined £390 million of orders and framework awards will be realized over the next three years, in addition to a £15 million annual run rate.

Vernet said the company began work on the Polish Navy’s Ratownik project, won a submarine platform contract extension and secured a Tactical Diving Vehicle maintenance contract during the first half. It also opened a Subsea Center of Excellence in Singapore, expanded Tactical Diving Vehicle manufacturing capacity in Sweden and received its first order for the Stealth Multi-Role military diving rebreather.

Energy conditions remain challenging

Energy revenue declined £17.7 million, including £8.7 million of revenue from a Mozambique contract that did not recur in 2026. Revenue across other energy product lines fell by £9 million, resulting in a 20.6% reduction for the division.

Hayzen-Smith said the Middle East crisis and broader market uncertainty affected customers’ spending plans and delayed project starts across key markets. The company experienced reduced spending on well testing and decommissioning, while fewer offshore wind construction projects used its Bubble Curtain technology.

Policy and macroeconomic developments also reduced U.S. offshore wind activity, and the company said a planned shift toward Europe was affected by an overall decline in new offshore wind platform construction programs. Because the volume decline was concentrated in higher-margin services, energy operating profit fell 45% and the division’s margin declined to 7.8%.

James Fisher said its Brazil inspection, repair and maintenance business performed well amid higher activity levels. Its offshore wind aftermarket also benefited from greater blade-services demand and performance-related revenue. The company is reducing costs in response to the downturn while seeking to retain capabilities needed for a market recovery.

Vernet highlighted several energy investments, including a first Digi Rig contract in the Caspian Sea and electric compressors developed in Norway. The company also expanded its operating base in Guyana as part of its Latin American growth plans.

Maritime transport benefits from utilization and rates

Maritime transport reported improved results despite poor weather at the start of the year. Tank ship revenue increased 7.5% to £46 million, supported by utilization and improved spot rates, while FenderCare revenue rose nearly 9% to £28 million due to higher ship-to-ship transfer volumes in Latin America.

Overall divisional operating profit rose 48% to £10.2 million, aided by volume gains, cost savings and operational efficiencies. The company said its Cattedown Wharves operation continued to perform well with good port volumes.

The fleet modernization program remained underway, with three of four new tankers delivered by July and the fourth expected toward year-end. Hayzen-Smith said that approximately 80% of the tank ship business’s revenue is typically contracted, with customer agreements generally running two to three years. Pricing benefits from newer vessels are expected to emerge as contracts are renegotiated, while the vessels may also support maintenance and utilization improvements.

Vernet said James Fisher had not pursued increased ship-to-ship transfer activity in the Gulf because of security concerns and its compliance standards, although activity elsewhere contributed to FenderCare’s first-half performance.

Debt, investment and outlook

Net debt was £65.7 million at June 30, up around £11 million from December 2025, largely due to working-capital timing and seasonal cash flows. Net debt to EBITDA was 1.5 times on a covenant basis, at the upper end of the company’s target range.

Working capital absorbed just under £7 million during the first half, mainly reflecting inventory and contract work in progress in defense. Hayzen-Smith said this should unwind in the second half, subject to project milestone timing. Cash collection improved, with days sales outstanding declining to 39 days.

Capital expenditure totaled £14.5 million, including £3 million for defense products, investment in electric compressor fleets and deposits on new maritime vessels. The company said it remains focused on organic investment, while reviewing when it may be appropriate to reinstate a dividend.

James Fisher maintained its full-year outlook. Vernet said defense and maritime transport momentum is expected to continue in the second half, while challenging energy conditions are likely to persist. “If we assume no material worsening and disruptions in the energy markets, the board’s overall expectation for the full year remain unchanged,” he said.

The company continues to target a 10% underlying operating margin and 15% return on capital employed, though Hayzen-Smith said it has not provided a timetable for reaching those goals.

About James Fisher and Sons (LON:FSJ)

James Fisher and Sons plc is a leading provider of unique marine solutions in Energy, Defence and Maritime Transport. The Group pioneers safe, innovative solutions that solve complex customer challenges for industries and governments around the world. For more information visit www.james-fisher.com

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