Annual Report and Accounts 2023
HARNESSING THE
BLUE ECONOMY
Energy • Defence • Maritime Transport
Building foundations for the future
In this Report, we outline progress made in 2023 on our journey
to returning to sustainable, profitable growth.
ENHANCING
ENERGY
Supporting the energy transition
through responsible energy provision
and innovative renewable energy
solutions
Read more on page 20
PROTECTING
DEFENCE
Protecting lives and assets on
and under the oceans, in the
most sensitive and challenging
environments
Read more on page 24
CONNECTING
MARITIME TRANSPORT
Leading the way in targeted coastal
maritime shipping and global oil and
natural gas ship-to-ship transfers
Read more on page 28
OUR PURPOSE IS TO
PIONEER SAFE, TRUSTED
SOLUTIONS FOR COMPLEX
PROBLEMS, IN HARSH
ENVIRONMENTS WITH A
FOCUS ON THREE CORE
MARKETS
Supporting
28
of the world’s
navies
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
CONTENTS
STRATEGIC REPORT
At a glance 02
Chairman’s review 04
Business model and strategy 06
Why invest in James Fisher? 08
Interview with our CFO 10
Key performance indicators 12
Our markets 13
Chief Executive’s statement 14
Operational and market highlights 17
Business Excellence 18
Our Divisions 20
Sustainability 32
– Strategy and governance 34
– Engaging for value 36
– Focus areas 38
Non-financial KPIs 48
Financial review 50
Principal risks and uncertainties 56
Viability statement 67
Non-financial and sustainability
information statement 68
GOVERNANCE
Governance at a glance 70
Chairman’s introduction to
corporate governance 72
Governance framework 74
Board of Directors 77
Corporate governance report 80
Nominations Committee report 84
Audit Committee report 87
Directors’ remuneration report 92
Directors’ report 110
Statement of Directors’ responsibilities 115
FINANCIAL STATEMENTS
Independent auditor’s report 116
Consolidated income statement 125
Consolidated statement of other
comprehensive income 126
Consolidated and Company statement
of financial position 127
Consolidated and Company cash
flow statement 128
Consolidated statement of changes
in equity 129
Company statement of changes
in equity 130
Notes to the financial statements 131
Subsidiaries and associated
undertakings 196
Group financial record 200
Investor information 201
OUR 2023 REPORTING SUITE
Sustainability Report
Our website
Please visit www.james-fisher.com
for further information.
Managed
7.9 GW
of offshore wind
throughout 2023
Harnessing
175+
years' of marine
experience
Supporting
28
of the world’s
navies
CONTENTS
STRATEGIC REPORT
At a glance 02
Chairman’s review 04
Business model and strategy 06
Why invest in James Fisher? 08
Interview with our CFO 10
Key performance indicators 12
Our markets 13
Chief Executive’s statement 14
Operational and market highlights 17
Business Excellence 18
Our Divisions 20
Sustainability 32
– Strategy and governance 34
– Engaging for value 36
– Focus areas 38
Non-financial KPIs 48
Financial review 50
Principal risks and uncertainties 56
Viability statement 67
Non-financial and sustainability
information statement 68
GOVERNANCE
Governance at a glance 70
Chairman’s introduction to
corporate governance 72
Governance framework 74
Board of Directors 77
Corporate governance report 80
Nominations Committee report 84
Audit Committee report 87
Directors’ remuneration report 92
Directors’ report 110
Statement of Directors’ responsibilities 115
FINANCIAL STATEMENTS
Independent auditor’s report 116
Consolidated income statement 125
Consolidated statement of other
comprehensive income 126
Consolidated and Company statement
of financial position 127
Consolidated and Company cash
flow statement 128
Consolidated statement of changes
in equity 129
Company statement of changes
in equity 130
Notes to the financial statements 131
Subsidiaries and associated
undertakings 196
Group financial record 200
Investor information 201
01
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
AT A GLANCE
WHO WE ARE
We are a global engineering services
company. From our origins as a ship
owner and operator, we’ve evolved to
provide the expertise and innovative
technology our customers need in
the harshest of environments across
Energy, Defence and Maritime
Transport.
GUIDED BY OUR VALUES
Pioneering spirit
We respond innovatively to our
customers’ current and future needs.
We think creatively and challenge
conventional thinking.
Integrity
We do the right thing. We treat others
as we’d like to be treated, listening
respectfully and speaking honestly.
We build relationships based on trust
and fairness.
Energy
We love what we do and take pride
in our work – delivering exceptional
results for our stakeholders. We
are empowered to take the right
decisions quickly.
Resilience
We are accountable and courageous,
facing into difficult situations. We are
tenacious, seeking feedback to learn
and develop.
Organisation in transformation
1 james fisher
Committed to portfolio simplification
3 markets
Countries worldwide
~25
Employees
2,041
WHAT WE DO
Our vision
To harness the international, blue economy space, providing technically
advanced solutions that enhance, protect and connect.
Our purpose
Pioneering safe, trusted and sustainable solutions for complex problems,
in harsh environments.
Our mission
Provide innovative marine solutions to our customers in Energy, Defence and
Maritime Transport.
02
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
OUR DIVISIONS SERVICES PRODUCT LINES
ENERGY
• Well testing and
intervention
• Production
optimisation
• Inspection, repair
and maintenance
• Renewables
• Decommissioning
and abandonment
• Digital efficiency
solutions
• Scantech
• RMSpumptools
• JF Subtech
• JF Renewables
• EDS HV
• JF Decommissioning
• JF AIS
DEFENCE
• Submarine Rescue
• Submarine
Platforms
• Special Operations
• Commercial diving
• Defence diving
• JFD
MARITIME
TRANSPORT
• Fleet management
• Berthing and marine
services
• Oil ship-to-ship
services
• Liquefied Natural
Gas ship-to-ship
services
• Mooring and safety
products
• James Fisher
Tankships
• Cattedown
Wharves
• JF Fendercare
• Martek Marine
OUR HEADLINE FIGURES
Revenue –
continuing operations (£m)
£496.2m
2022: £478.1m
Underlying operating profit –
continuing operations* (£m)
£29.6m
2022: £26.4m
Profit/(loss) before tax –
continuing operations (£m)
£(39.9)m
2022: £14.5m
Cash from operating
activities (£m)
£37.8m
2022: £44.5m
Net borrowings (£m)
£201.1m
2022: £185.8m
Read more on our key performance
indicators on page 12
* Excludes adjusting items.
James Fisher uses alternative performance measures
(APMs) to assess the underlying performance of the
business. An explanation of APMs is set out in Note
2 of the financial statements and explanation and
reconciliation.
03
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CHAIRMAN’S REVIEW
Our commitment to safety,
people, good governance
and sustainability,
particularly carbon reduction,
is central to the future
success of James Fisher.
Angus Cockburn
Chairman
There is no argument with the fact that 2023 was a turbulent
year for James Fisher but it was also one that has begun
to reposition the Company’s future growth. In late 2022, we
began a transformation programme to build a stronger, more
sustainable business focused on improved operational and
financial performance. We have made good early progress
under the energetic leadership of our CEO, Jean Vernet,
centred around streamlining the portfolio, simplifying the
divisional structure and driving a culture of accountability and
results. This has sharpened the focus of the Company and
facilitated the launch of “One James Fisher”, which looks to
capture the customer and efficiency synergies that exist in
the business.
We are focusing the Company on businesses
where we have competitive advantage and
can deliver superior customer value through,
for example, digitalisation or innovation, while
exiting businesses where we cannot deliver
profit and growth.
To this end, we took the decision to close
Subtech Europe in December, given the scale
of its losses over the past few years. From a
capital allocation perspective, we believe that
focusing our investment on higher potential
areas of growth is the best route forward for
James Fisher in the long-term.
Addressing our debt
Our biggest challenge remains that we have
too much debt and our progress will continue
to be hampered while this is the case, due to
very high finance costs and the associated
restrictions on how we can operate. The
refinancing and ongoing management of our
banking group has taken a significant amount of
senior management time and remains a critical
short-term priority. We have demonstrated that
we can generate cash from operations and
carefully selected asset disposals as evidenced
by underlying net borrowings* reducing from
£203 million in 2019 to £149.8 million at the end
of 2023. However, the reduction in profitability
over that time has meant that our leverage*
remains too high. Generating strong cash
flow to reduce debt, while at the same time
improving profitability, will reduce leverage and
this remains our key priority as we enter 2024.
We remain grateful for the support of our banks
during this challenging period.
04
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
The first stage of any turnaround is stabilisation
and despite all the challenges, our underlying
financial performance improved slightly during
the year, with Underlying Operating Profit
(UOP)* growing from £26.4 million in 2022 to
£29.6 million in 2023. This, combined with the
small increase in underlying net borrowings
from £142.1 million at the end of 2022 to
£149.8 million at the end of 2023, means that
our leverage as measured by underlying net
borrowings divided by underlying operating
profit before interest, tax, depreciation and
amortisation, adjusted for impacts of IFRS
16*, remained relatively flat at 2.75x in 2023
(2022: 2.70x). That said, the recently announced
sale of RMSpumptools, due to complete in the
early second half of 2024, will help to reduce
our net borrowings further and move us closer
to our desired medium-term leverage range
of 1.0 to 1.5x.
Given our current financial position the
Board is unable to recommend paying a final
dividend for 2023. I recognise that this may be
disappointing, but the Board remains committed
to reintroducing a sustainable and progressive
dividend policy when appropriate.
Delivering our strategy
The turnaround strategy has three main
elements: Focus, Simplify and Deliver. We
are clearly still in the foothills of executing this
strategy, but we have made some good early
progress in terms of focusing and simplifying
our portfolio of businesses and laying the
foundations of operational performance
improvement. Building a strong leadership team
is key to this and the Board is pleased that the
Executive Committee Team is now in place,
combining existing James Fisher talent as well
as experienced new hires who bring a fresh
perspective. The job of this team is to position
James Fisher to take advantage of the potential
of operating in the “Blue Economy”.
Headline financial performance during the
year was disappointing with a high level of
“one-off” costs. We have had several years of
one-offs, which have had a material impact
on profitability and more importantly, cash.
These costs are the inevitable consequence
of any turnaround process amplified by a very
challenging refinancing process brought on by
our bank covenant challenges. The underlying
financial performance during 2023 was more
encouraging with revenue from continuing
operations, excluding the discontinued nuclear
business, growing by 3.8% from £478.1 million
to £496.2 million whilst UOP from continuing
operations rose by 12.1% from £26.4 million to
£29.6 million in 2023.
There was particularly encouraging progress
in the Energy Division where revenue grew
by 9.9% to £266.5 million with standout
performance in the well testing and intervention
and artificial lift Product Lines. By contrast,
performance in the North Sea Inspection Repair
and Maintenance and offshore oil businesses
remained challenging. Revenue in the Maritime
Transport Division fell by 6.0% but the focus
on efficiency together with mixed benefits, saw
the underlying operating profit grow by 23.9%
with both tankship and ship-to-ship transfer
services performing well. While the performance
of the Defence business improved in both
revenue and underlying operating profit terms,
extended procurement timelines meant that
the recovery in this business was slower than
expected. However, the potential of our Defence
Division remains encouraging, and the team is
focused on delivering the solutions needed for
customers in a number of diverse underwater
applications.
A key measure for any business is the profit that
is generated from its asset base. Hence the
importance of our Return on Capital Employed
(ROCE) measure*, which is a key incentive
metric for our Executive team. ROCE grew from
5.3% to 6.6% which is clearly still too low, and
a combination of careful capital allocation and
margin improvement is required to make this
number more respectable. Underlying operating
margin*, a key driver of ROCE, improved from
5.5% in 2022 to 6.0% in 2023.
Key pillars of future success
Our commitment to safety, people, good
governance and sustainability, particularly
carbon reduction, is central to the future success
of James Fisher. The focus on safety may not
have delivered the year-on-year improvement
that we were hoping for but the sharpened
emphasis and training on safety will make the
workplace safer for our employees in years to
come. This is particularly important given the
challenging environments in which we work.
Employee engagement remained flat on the
previous year in what is an unprecedented
period of change for the Company. We will
continue to address areas of concern for our
employees and in particular focus on improving
communication and talent development across
the business.
Our sustainability commitment remains front
and centre with carbon emission reduction at
the heart of our strategy. Maritime Transport
accounts for nearly 70% of our emissions and it
was with great pleasure that we commissioned
the first two dual-fuel vessels, and with orders
for a further two placed during the year, our fleet
replacement programme is well underway.
One James Fisher
In the meantime, we need to continue to put
a strong foundation in place. Our One James
Fisher programme, which is a key element
of transformation, will play a pivotal role in
improving all aspects of our business, helping
it become both more agile in terms of our
customer interaction and more efficient in all
our other processes. Like any transformation
programme, progress will at times be
frustratingly slow, but I am convinced that this
will help position the Company for growth once
we overcome our current financial challenges.
Central to our success is our management
team. To this end, I am delighted to welcome
Karen Hayzen-Smith to the Board in the role
of Chief Financial Officer. Karen has tremendous
experience, and I am sure she will play a vital
role in our turnaround in the years to come.
I would also like to take this opportunity to pay
tribute to the efforts of her predecessor, Duncan
Kennedy, who joined at the same time as me
in 2021 and has had to face some of the most
severe challenges that any company could
face. This he did with both energy and good
humour. I also welcome as an Independent
Non-Executive Director, Shian Jastram, who
brings invaluable international experience in
the renewables sector, and I thank outgoing
Independent Non-Executive Director, Aedamar
Comiskey, for her stand-out service in that
role. The last few years have been challenging
and the Board and I will miss Aedamar’s wise
counsel and support.
James Fisher has its heritage in the shipyards
of Scotland and the North of England, and I
am proud that we continue to be a significant
employer in these and other areas, such as East
Anglia, where economic conditions have been
difficult in recent years. Many of our employees
work in harsh environments and I pay tribute to
their courage and dedication. Indeed, I would
like to thank everyone across the organisation
for their hard work and commitment in 2023.
Outlook
Having laid the foundations for transformation
over the last twelve months, our efforts will
continue this year. Business turnaround is a
complex process, always taking longer than you
expect, but the Board has confidence in the
long-term potential of James Fisher and despite
the ongoing financial challenges, believe that
we are making some early progress in achieving
the vision of One James Fisher. This will enable
us to play a role in realising the potential of the
Blue Economy and hopefully, in time, reward the
patience of our investors.
Angus Cockburn
Chairman
* Alternative Performance Measures (APMs) are defined in
Note 2 of the financial statements.
05
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Our transformation roadmap positions the Company for a stronger, more sustainable future.
This is delivered through our Focus, Simplify and Deliver ambition.
BUSINESS MODEL AND STRATEGY
M
A
D
E
P
O
S
S
I
B
L
E
T
H
R
O
U
G
H
K
E
Y
E
N
A
B
L
E
R
S
C
U
L
T
U
R
E
P
E
O
P
L
E
P
R
O
C
E
S
S
A
N
D
T
O
O
L
S
U
n
it
e
d
c
u
l
t
u
r
e
a
n
d
v
a
l
u
e
d
b
e
h
a
v
i
o
u
r
s
E
n
g
a
g
e
d,
e
m
p
o
w
e
r
e
d
,
di
v
e
r
s
e
t
al
e
n
t
E
n
a
b
li
n
g
p
r
o
c
e
s
s
,
s
y
s
te
m
s
a
n
d
t
o
o
l
s
ONE JAMES FISHER
E
N
A
B
L
E
R
S
F
O
R
G
R
O
W
T
H
P
E
O
P
L
E
T
E
C
H
N
O
L
O
G
Y
G
E
O
G
R
A
P
H
Y
U
n
i
t
e
d
c
u
l
t
u
r
e
a
n
d
t
a
l
e
n
t
t
o
d
e
l
i
v
e
r
p
o
t
e
n
t
i
a
l
C
u
st
o
m
e
r
i
n
n
o
v
at
i
o
n
t
h
a
t
dr
i
ve
s
b
u
s
i
n
e
s
s
g
r
o
w
th
R
e
g
i
o
n
a
l
h
u
b
s
t
o
s
u
p
p
o
r
t
g
l
o
b
a
l
e
x
p
a
n
s
i
o
n
F
o
c
u
s
D
e
l
i
v
e
r
S
i
m
p
l
i
f
y
PIONEERING SPIRIT INTEGRITY ENERGY RESILIENCE
M
a
r
k
e
t
D
i
v
i
s
i
o
n
s
F
i
n
a
n
c
i
a
l
a
n
d
o
p
e
r
a
t
i
o
n
a
l
p
e
r
f
o
r
m
a
n
c
e
P
u
r
p
o
s
e
a
n
d
p
o
r
t
f
o
l
i
o
F
i
n
a
n
c
i
a
l
f
o
u
n
d
a
t
i
o
n
s
A
c
c
o
u
n
t
a
b
l
e
l
e
a
d
e
r
s
h
i
p
F
u
n
c
t
i
o
n
a
l
s
t
r
e
n
g
t
h
e
n
i
n
g
U
n
i
fi
e
d
o
b
j
e
c
t
i
v
e
s
C
u
s
t
o
m
e
r
i
n
t
i
m
a
c
y
B
u
s
i
n
e
s
s
E
x
c
e
l
l
e
n
c
e
06
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
STRATEGY
Journey to transformation
Our strategy is centred around the One James Fisher ambition. We are building a stronger,
more cohesive company operating in the Blue Economy. The execution of this strategy
is delivered through Focus, Simplify and Deliver underpinned by three enablers for growth.
FOCUS
Regroup around our core as an engineering service company operating in the Blue Economy.
SIMPLIFY
Restructure around three Divisions, aligned to the customer market verticals of Energy, Defence and
Maritime Transport, with an emphasis on streamlined structures, standardisation and optimisation of
resources in pursuit of operational leverage.
DELIVER
Drive delivery through Business Excellence and a culture of accountability, with Product Lines in charge
of meeting their financial and operational targets.
Future growth
Our future strategic growth will be achieved by:
• Developing our global talent and specialist competencies, alongside our commitment to stronger
employee engagement
• Prioritising our regional growth based on the key components of market drivers and customer needs
• Investing in the right technology and innovation, including new product development that will
differentiate us from the competition
DELIVERING IMPROVED PERFORMANCE
Our goal is to enable a return to top quartile sustainable profitable growth.
Our focus on operational excellence requires that our businesses achieve the following targets:
• are cash-generative
• have operating margins in excess of 10%
• provide returns on capital employed in excess of 15%
CUSTOMERS
AND SUPPLIERS
SHAREHOLDERS
LOCAL
COMMUNITIES
EMPLOYEES
THE
ENVIRONMENT
OUR STAKEHOLDERS
We have five core stakeholders:
shareholders, employees,
customers and suppliers,
local communities, and the
environment. They inform our
company purpose, direction and
decision-making and are intrinsic
to our Sustainability Strategy.
07
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
WHY INVEST IN JAMES FISHER?
We are seeking to deliver sustainable value for our
shareholders by implementing a strategy focused on
simplifying and focusing the Group. By establishing
stronger foundations, we are delivering growth,
improved margins and enhanced ROCE.
GROWING DEMAND
Within each of our core markets there are substantial
opportunities for growth.
The ongoing geopolitical and environmental backdrop continues to
drive the focus on energy security, decarbonisation and investment
in defence. Our breadth of established capabilities mean we are well
positioned to play a key role:
• Traditional and new energy markets
• Transportation of critical supplies to smaller, regional hubs
• Growing demand for maritime and special operations expertise
• Opportunity to expand into less mature markets
TRUSTED, INNOVATIVE PARTNER
Throughout our 175 years, we have demonstrated
an ability to solve difficult problems in the harshest of
environments, helping our customers navigate seismic
shifts in economic and political contexts.
We combine subject matter expertise and a deep practical
understanding of the reality of working in our chosen markets.
In 2023 this included a number of key innovations:
• Bubble curtain technology for marine protection
• Trial of refuelling-at-sea for the Royal Navy
• Launch of Shadow Seal tactical diving vehicle
08
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
To find out more, please scan the QR code
or visit www.james-fisher.com/investors.
ESTABLISHED SPECIALISMS
Our focus on solving difficult problems in specialist
business segments sets us apart from potential
competitors.
Customers value our specialist assets, capabilities and skills of our
global network of businesses.
• Primary UK fleet operator for the delivery of petrol, diesel and
heating fuels
• Leading positions across several markets and geographies
• Ship-to-ship transfers
• Submarine rescue
• High-voltage engineering for offshore wind
PERFORMANCE FOCUSED
We are focused on actively managing our portfolio,
reducing leverage and deploying a balanced capital
allocation process, improving and scaling commercial
and contracting capabilities and striving for a world-class
safety, risk and project management culture.
In 2024 we intend to continue this focus:
• Sale of non-core businesses
• Expansion of Lean Six Sigma training programme
• Launch of Exceptional Safety commitment
• Launch of Project Management pilots
09
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
INTERVIEW
WITH OUR CFO
In December 2023, Karen
Hayzen-Smith joined James
Fisher as Chief Financial
Officer. With a strong
background in Energy
and Defence, we asked
Karen what attracted her
to the Company, her initial
reflections and more about
the key financial priorities
for the year ahead - that
will enable the business
turnaround.
10
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
James Fisher and Sons plc – Annual Report and Accounts 2023
Q: What attracted you to
James Fisher?
A: I was initially attracted by the uniqueness
of the Company, with its long engineering
heritage that is evident through its specialised
and differentiated products, services and
capabilities, such as shipping, submarine
rescue and diving. We have some great
offerings.
I could see the future value reflected through a
first-rate customer base and geographic reach
as well as innovative expertise, and the ability
to adapt to new developing markets.
James Fisher has all the relevant ingredients
and with the right mix, has the ability to deliver
a successful suite of services. Of course, any
business turnaround is challenging and can
take time to achieve, but the potential is there.
In addition, my early conversations with the
Board showed that they shared a common
vision and determination to make the Group
successful and since joining, I have seen that
commitment across the business. Our people
have real pride in the work they do.
Q: What are your initial reflections
on the first few months?
A: I see a Group that has a passion for its
products and services and is eager for the
strategy to be realised. I’ve been encouraged
by the amount of work already achieved or
underway. I think that’s testament to the
people and culture at James Fisher; there’s a
common purpose to deliver across the Group.
I’d go further by saying there’s a sense of
team spirit and resilience, which is obviously
really important when you’re navigating
through bumpy times.
The groundwork around our strategy to focus,
simplify and deliver is underway. It’s about
harnessing the potential of our people to
complete the foundation work we’ve started,
and to deliver our future growth potential
through strong customer delivery, technology,
innovation and geographical expansion.
There is huge scope and efficiency potential
in simply getting the basics right first time,
across the Group, from enabling services
such as finance through to customer-facing
operations. The Group has the opportunity
to develop further by shared learning and
operating as One James Fisher. We should
expect exponential improvements as the
initiatives filtrate across the Group.
Q: What are your priorities for the
year ahead?
A: Deleveraging – The top priority is to
stabilise the Group and that means reducing
current debt levels. We aim to strengthen our
balance sheet and deleverage to be within
a 1.0 to 1.5x net debt/EBITDA range. This
will de-risk our current borrowing position,
reduce financing costs, free up management
resources and provide a stable platform to
deliver the Company’s full transformation. We
need to achieve this priority above all others.
Establishing a platform for growth and
scale – It’s important that we continue
to perform while we transform. We will
build the foundations in key areas such as
commercial and contracting, while tightening
our governance process in areas such as
investment decision-making. There are
also areas where building capabilities are
important too to improve contract discipline,
cost control and project management. We
need to ensure we bid at the optimum rates
to win new contracts and manage delivery
to retain profitability and be able to convert
profits to cash. Getting the basics right will go
a long way to improving our performance and
will make it easier to scale.
Achieving 10% underlying operating
profit – Our margins are currently lower than
I would expect or like, however there are
many opportunities to improve in order to
reach our target. This includes better supply
chain management, elimination of duplication,
increased use of shared services and the
potential for increased digitalisation and
automation. The opportunities are there, we
just need to prioritise and implement them in
order to deliver short-term results.
Q: How will you achieve
these ambitions?
A: If we reduce the debt and stabilise the
base, we will have earned the right to start or
accelerate the actions required to grow the
business. The One James Fisher model is an
enabler, as we assess our ways of working
as a Group, harness expertise across the
business to focus on customer delivery, while
simplifying the way we operate and avoiding
unnecessary duplication. I have no doubt in
the ability for change to take place and to
add value with immediate impact. We need
to focus on those projects that will really
make a difference.
Karen Hayzen-Smith
Chief Financial Officer
RECENT CAREER SUMMARY
2020 – 2023: Johnson Matthey
Various financial roles including Director
of Group Finance
2016 – 2020: Babcock
International Group
Finance Director – Aviation Sector and
Finance Director – Defence and Security
2008 – 2016: Amec Foster Wheeler
Various financial roles including AMEA
and Southern Europe Finance Director
2005 – 2008: Heidelberg Materials
Deputy Head of Tax
Getting the basics
right will go a long
way to improving
our performance
and will make it
easier to scale.
11
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Operating (loss)/profit – continuing operations (£m)
£(18.6)m
The Group’s 2022 and 2021 operating profit results exclude operating
losses from discontinued operations (2022: £4.2m; 2021: £nil).
Underlying operating profit* –
continuing operations (£m)
£29.6m
2023 £29.6m
2022 £26.4m
2021 £28.0m
2020 £40.5m
2019 £66.3m
The Group’s 2022 and 2021 underlying operating profit excludes
operating losses from discontinued operations. The inclusion of
discontinued operations would worsen the results to £19.1m in
2022 and £28.0m in 2021.
Underlying operating margin* –
continuing operations (%)
6.0%
2023 6.0%
2022 5.5%
2021 6.3%
2020 7.8%
2019 10.7%
Underlying operating profit including discontinued operations was
3.7% in 2022 and 5.7% in 2021.
Return on operating capital employed* (%)
6.6%
2023 6.6%
2022 5.3%
2021 3.6%
2020 6.7%
2019 11.3%
Cash flow from operating activities (£m)
£37.8m
2023 £37.8m
2022 £44.5m
2021 £55.0m
2020 £88.0m
2019 £58.1m
Leverage* (times)
2.8 times
2023 2.8
2022 2.7
2021 2.9
2020 2.8
2019 2.7
2022
2023
2021
£(43.5)m 2020
2019 £55.6m
£24.7m
£(20.7)m
KEY PERFORMANCE INDICATORS
Non-financial KPIs are set out in the Sustainability Report by
reference to our focus areas. For any focus area not currently
including a non-financial KPI, metrics and targets are under
development.
Read more about our non-financial KPIs on page 48
* Underlying operating profit, Underlying operating profit margin, return
on operating capital employed and leverage are Alternative Performance
Measures (APMs) that are reconciled and defined in Note 2 to the financial
statements.
£(18.6)m
12
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
OUR MARKETS
E
n
e
r
g
y
D
e
f
e
n
c
e
M
a
r
i
t
i
m
e
T
r
a
n
s
p
o
r
t
We deliver safe, efficient operations for our customers,
in ~25 countries worldwide – centred around our key regions.
This ensures we have the right people, technology and supply
chain in place to realise our commitments.
GLOBAL REACH THROUGH LOCAL PRESENCE
Asia Pacific
Australia
MENA & KSA
North America
South America
UK/Europe
Key
Oil & Gas
Renewable Energy
Maritime Transport
Defence
James Fisher presence
13
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CHIEF EXECUTIVE’S STATEMENT
The Company has
growth potential, but our
focus needs to remain
centred on delivering
against our turnaround
commitments.
Jean Vernet
Chief Executive Officer
A year ago, we launched a transformation programme
that would move James Fisher from a portfolio of
individual businesses to a stronger, more cohesive
company. This turnaround is expected to take
between two to three years and be driven by three
themes: Focus, Simplify and Deliver.
To achieve focus, we have regrouped around our core
as an engineering service company operating in the
Blue Economy.
To simplify the business, we have reorganised James
Fisher around three Divisions, aligned to the customer
market verticals of Energy, Defence and Maritime Transport
led by the new Executive Team. Each Divisional Head
has been given the responsibility to streamline reporting
structures, standardise processes and practices and
share Group resources. Divisions are now divided into
Product Lines (PLs) and positioned as experts in their
particular domain.
Our delivery is driven by a culture of accountability, with
PLs in charge of meeting their Underlying Operating Profit
(UOP) and Return on Capital Employed (ROCE) targets.
Each business must earn its cost of capital, either by fixing
the business model if they currently underperform, or by
accelerating profitable growth if they are already above
hurdle rates.
We established a Business Excellence Function and
have driven standardisation across the Group, deployed
through the common language of Lean Six Sigma and
applied change management to deliver our 2023 priorities.
These were to improve our safety, forecasting (through the
deployment of project management), cash collection and
employee engagement.
With much of this important work underway, it is clear that
the Company has growth potential, but our focus needs
to remain centred on delivering against our turnaround
commitments.
14
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Lessons learned and
strengthening our platform
Despite the potential in the business and the
significant changes we have accomplished,
the Group continued to face challenges in
2023. This included the complex divestiture
of our nuclear business, which impacted the
refinancing of our bank debt during the first
quarter. Whilst this was the right strategic
decision, it had a significant short-term impact
on James Fisher in terms of resources,
distraction, and costs.
These challenges led us to implement a more
robust risk management and governance
framework, delivered through a strengthened
Legal Function with expert talent integrated
across Group and Divisions. Our Functions
are improving in both Finance and Human
Resources (HR), and we are taking steps to
integrate our business systems. Therefore, we
are still in the “back-to-basics” phase of our
journey in these two areas.
With the arrival of Karen Hayzen-Smith
as our new Chief Financial Officer, I look
forward to an accelerated strengthening of
the team, and the upgrade of our control
and risk management processes. This is a
pre-requisite to the Company delivering on
its strategic objectives.
In HR, we appointed experienced Business
Partners in each Division and established
clear Functional oversight. We implemented
a more systematic performance review and
succession planning process, and launched
recruitment and development initiatives,
such as the James Fisher Academy. We
see the Academy as an engine to increase
the expertise of our customer-facing service
colleagues and to reduce our dependence on
third-party contractors.
One James Fisher
In 2023 we adopted the “One James Fisher”
model and brought together our collective
strength to achieve greater synergies for the
business and its customers. We are already
achieving good traction, particularly within
the Energy Division across oil and gas, and
offshore wind, as well as Defence and Maritime
Transport, which share common customers.
Over time, the One James Fisher model will
also drive greater efficiency and effectiveness.
For over 175 years, James Fisher has been
innovative and responsive to its customers’
needs. From coastal shipping, submarine
rescue and saturation diving, through to
bubble curtains, the Company has been
first-to-market with innovative solutions. We
recognise the importance of preserving our
entrepreneurial character.
At heart, we are an asset-light engineering
service company that thrives by bringing
together innovative solutions that resolve
complex problems. Our strategic growth will
be driven through the expertise of our people,
underpinned by applied technology, and
amplified by expanding where the demand
is - across our geographic markets.
We are confident that fostering this new
model, will enable us to:
• Leverage talent acquisition, career
development, and knowledge sharing to
become the employer of choice
• Establish a new product development
process that will enhance our differentiation,
with streamlined manufacturing and supply
chain activities to significantly enhance
productivity
• Pool our mobile assets and field operators
globally, in a service delivery model,
anywhere in the world
• Drive standardisation and automation, with
the potential realised through shared services
• Above all, prioritise our safety
Progress in a year of challenge
2023 was a mixed year, where we made
good progress in building our leadership
team, implementing our new operating model,
and deploying our focus and simplification
agenda. However, we faced some unexpected
challenges that impacted progress, both
financial and operational, including the
difficult decision to close one of our non-core
businesses.
As a service company, our people define
us, and building a new Executive Team has
allowed us to lead the transformation with one
voice. Our senior leaders are the enablers of
our Focus, Simplify and Deliver ambitions.
In 2023 we adopted
the ‘One James Fisher’
model and brought
together our collective
strength to achieve
greater synergies for
the business and its
customers.
Focus
We divested non-core businesses and
sold non-productive assets, which allowed
us to begin the process of reducing our
indebtedness and concentrate investments
on our core portfolio.
To help align effort and resources across
the organisation, we established five
universal objectives to guide activity,
cut complexity and reduce duplication.
We implemented a comprehensive
upgrade of our health, safety, environment
standards. Our top priority remains
Exceptional Safety, deployed through a
company-wide programme that adopts
the highest standards from within our
industries. In 2023, despite missing
our overall target, two of our Divisions
met their objectives and there has been
a palpable, positive change with key
lessons learnt in the third.
Simplify
Through the creation of our three
Divisions, the One James Fisher culture
has begun to embed. I am encouraged
to see business units adopting similar
standards, as they work together to pool
assets, share resources and engage
customers in a more co-ordinated way.
Our Investment Committee is a key
control point and will provide discipline
and consistent decision-making in
matters such as large customer tenders
and capital allocation.
Deliver
Led by our Business Excellence
Function, all business owners
were trained in the Lean Six Sigma
methodology in 2023 and we achieved
38 Green Belts and 8 Black Belts – good
progress towards our 2024 objectives.
Through these collective efforts, we have
made progress towards our strategic
target to deliver 10% UOP margin. We
ended the year at 6.0% (2022: 5.5%).
15
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
In a period of considerable change, our
employee engagement score remained
level with last year (3.86 vs. 3.84 in 2022),
falling short of our ambitions. Our people are
integral to the services we provide, and this
makes employee engagement an extremely
important indicator for us. Nevertheless,
there was progress in some Divisions, which
showed the positive impact of our culture
initiative.
Completing our foundation work
As the new organisation has settled in, our
immediate priority is to ensure we have a
strong financial base and get closer to our
mid-term leverage targets of 1.0 to1.5x
Net Debt to EBITDA. This will provide a
sustainable platform to deliver growth.
We will continue to build on the change
management journey started in 2023,
through several programmes:
1. Exceptional Safety: is our number one
priority. We will expand our approach into
the supply chain and sub-contractors,
building a collective culture across the full
workforce
2. Employee Engagement: improve two-
way engagement with employees so we
can inform, equip and empower them to
deliver our Company’s full potential
3. Foundations for Growth: continue to
strengthen our financial, governance and
risk management foundations. Reinforce
UOP and ROCE as the North Star to
achieve financial improvement and build
a more resilient business for the future
4. Pipeline of Talent: attract, develop
and inspire our employees to reach their
full potential in a diverse and inclusive
environment. At the heart of this is our
five-year talent development framework
5. Strong Supply Chain: work with
employees, contractors and partners to
build a stronger supply chain framework.
This is centred around efficient execution
and delivery, including the pooling of both
assets and people
These priorities will underpin our customer
focus, as we continue to prepare for the
long-term strategic growth of James Fisher.
Positioning for growth
Against the backdrop of continued geopolitical
instability and security of energy supply, all
three Divisions should benefit from long-term,
structural demand tailwinds.
The Energy Division will support the energy
transition through its innovative offshore wind
solutions and help oil and gas customers to
become more efficient and less carbon intensive.
Our Defence Division will continue to lead the
industry in life support and lifesaving products
and services, which includes innovative
platforms to bridge defence gaps through close
collaboration with our partner nations.
In Maritime Transport, we will ensure
continuity of critical supply through coastal
shipping both in the UK and in new
geographical markets, and explore adjacent
markets relevant to our capabilities. We will
explore options in other regions, such as the
Caribbean, where we have proven value. In
ship-to-ship activities, we will lead in serving
liquefied natural gas (LNG) demand, while
providing world-class safety, reliability and
compliance in crude oil.
Across all these verticals, James Fisher will
be next to our customers, wherever they are
– across the North Sea, the Middle East, Asia
Pacific and the Americas.
Having hired our Chief Technology Officer, in
January 2024, we will harness the innovation
that I have witnessed across the Group and
will embed technology as a major part of our
growth plan. This includes a new product
and service development process, that will
accelerate the introduction of new offerings
to market.
As we reduce our financial leverage, we
will look to enrich our service offerings by
adding differentiated activities to our divisional
portfolio, either organically or through
acquisitions. Any future acquisition must
demonstrate some compelling contribution
to our strategic goals and continue to be
asset-light.
Outlook for the year ended
31 December 2024
In the current financial year to date, the
Group’s overall performance has been in line
with the Board’s expectations, building on our
early-stage progress in 2023. Looking forward,
we continue to see supportive end markets
in 2024 in the majority of our businesses and
would also expect to deliver further benefits
from our turnaround initiatives.
Our key focus for 2024 is to establish a robust
and sustainable financial platform, with lower
levels of debt as we work towards a mid-term
leverage range of 1.0 to 1.5x (Net Debt to
EBITDA). To achieve this we need to complete
the disposal of non-core assets during 2024
and refinance our debt facilities which mature
in March 2025. Delivering on this objective
will strengthen our balance sheet, reduce our
interest cost, make us a more resilient Group
and provide greater ability to take advantage
of growth opportunities.
Thanks
As I reflect on this year of transformation,
I would like to thank the Board, shareholders,
customers, and employees for their continued
support through this time of change.
As we head into 2024, I am proud of the
progress we have made in our journey of
transformation with a recognition there is
much more to be done. With a stronger
platform for growth, I am confident that
James Fisher will once again prosper thanks
to the people and innovation that is the
hallmark of this organisation.
Jean Vernet
Chief Executive Officer
CHIEF EXECUTIVE'S STATEMENT CONT.
16
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
OPERATIONAL AND MARKET HIGHLIGHTS
The Energy Division provides
safe, sustainable products
and services for two core
markets: oil and gas and
renewables.
In 2023, the Division increased revenue
c.10% to £266.5m with operating profit
increasing by c.13% to £15.7m. Highlights
included:
• Strong performance from well testing,
bubble curtain and artificial lift products
• Expanded artificial lift products and service
offerings from new manufacturing base in
Saudi Arabia
• Awarded UK “Innovation in
Decommissioning Award” for SEABASS
plug and abandonment solution
• Strong demand for our technologies,
secured our first US contract for bubble
curtains
• Joint collaboration agreement signed for
offshore wind operation and maintenance
(O&M) services in Japan to support
Northeast Asia geographical expansion
• Launch of James Fisher Academy to deliver
skills and competency for offshore wind
services
Against the backdrop of heightening focus on
energy security, demand for well testing and
production optimisation services remained
strong, particularly in the US, Middle East
and Latin America. This was demonstrated
through excellent performance in the well
testing and artificial lift Product Lines.
By contrast, the decommissioning market
remained challenging, and the business will
focus more on selective bidding, aligned
to margin delivery and stronger operational
performance. Renewable offshore wind
market conditions improved from 2022 to
2023 and the business returned to break-
even through a combination of selective
bidding, technology differentiation and
geographical expansion. Offshore wind
market conditions are expected to remain flat
in 2024 but are set to improve in 2025 and
the Division will focus its core strengths on
construction, operations and maintenance,
data management and digital solutions. This
includes geographic expansion through key
strategic partnerships and collaborations.
The Defence Division
provides underwater
systems and life support
capabilities for the defence
and commercial diving
markets.
In 2023, revenue increased by 6.3% to
£72.5m, with the Division returning to
profitability delivering underlying operating
profit of £1.5m. Highlights included:
• Successful transition of NATO submarine
rescue system contract
• Initial trial of Shadow Seal special
operations vehicle
• New General Manager appointed to drive
US business market growth
• Early momentum in international markets,
including services and training contracts in
India and South Korea
• Strong growth pipeline in Australia,
Singapore, Sweden, the US and
Netherlands
• Further investment in new product
development
As geopolitical and energy security trends
continue, the demand for subsea and special
operations capabilities is set to increase.
While the business delivered effectively on
its existing contract commitments, including
submarine rescue, some projects were
delayed by customer and government
approvals. The Division continues to build a
strong opportunity pipeline but order intake
was impacted by delays in the award of new
contracts. However, the commercial diving
business has performed well, aligned to
energy market conditions. Product innovation
and development is also set to drive further
growth, alongside the Shadow Seal special
operations vehicle that was trialled in 2023,
ahead of its delivery to customers in 2024.
Maritime Transport is a
leading provider of targeted
coastal shipping and global
oil and natural gas ship-to-
ship (STS) transfer services.
Although revenue declined by 6% in 2023,
to £157.2m, the Division was focused
on profitability and underlying operating
profit was up c.23% to £23.3m. Highlights
included:
• Delivery of two new, dual-fuel vessels,
the Sir John Fisher and Lady Maria Fisher
• Secured largest UK tankships contract
renewal with Phillips 66
• Strong LNG STS demand globally coupled
with strong demand for oil STS in Brazil
The Division continues to play a key role in the
critical supply of energy and petrochemicals,
alongside alternative fuels, including liquefied
natural gas (LNG). This resulted in a strong
performance during the year, with high
utilisation levels across tankships, alongside
a key contract extension with a major UK
customer. As part of the Company’s fleet
replacement programme, James Fisher
took delivery of two new, dual-fuel vessels,
which will underpin the Company’s ESG
commitments. The STS business maintained
its global market-leading position in STS
transfers and performed well in the first
half of the year, particularly in Brazil. There
is continued opportunity to integrate the
business further and identify synergies from
which to grow the customer base.
ENERGY DEFENCE MARITIME TRANSPORT
17
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
BUSINESS EXCELLENCE
Supporting and
Driving Transformation
The Business Excellence
Function was established
at the start of 2023 to
drive improvements and
standardisation across
the Group, reinforcing
the One James Fisher
culture, deploying a
common language of Lean
Six Sigma throughout
each Division in pursuit
of our financial and
operational targets. The
team champions business
transformation objectives,
and works across the
Group to leverage
synergies and share best
practice.
The team has been assembled
to include expertise from a range
of disciplines from both inside
and outside James Fisher. A clear
roadmap is in place with a phased
approach, priorities, objectives
and metrics mapped out.
BUSINESS EXCELLENCE HAS MADE
GOOD PROGRESS IN 2023 AND HAS
BUILT STRONG FOUNDATIONS FOR 2024
IMPROVED CUSTOMER
INSIGHTS
In the ship-to-ship business,
this project has developed
a structured approach to
capturing customer feedback
and improve our service
offering. By developing a more
aligned and robust process,
we can better understand
the customer needs and
continuously improve our
offering.
I’m really excited about the
potential of this project;
becoming more customer-
centric is vital to our
transformation and growth,
and this is one step in that
journey.
Ruth Harvey
Marketing Director and
recently certified Black Belt
MINIMISING RISK IN
ORDER FULFILLMENT
The outcome of this project
is to lower the number of
errors made during the
order fulfilment stage, for
safety marine products.
By evaluating an archive of
historic data and mapping
the order process value
stream, we identified 40 areas
of improvement that would
reduce order errors. A more
robust and efficient process
is now in place and we are
identifying other opportunities.
It has been interesting to
uncover just how much can
be gained through the Value
Stream Mapping sessions.
Adrian Hall
Continuous Improvement
Analyst
DRIVING EFFICIENCIES
IN OFFSHORE WIND
With a focus on offshore wind
inspection and maintenance
campaigns, this project uses
Lean techniques to drive
greater efficiencies. Through
the implementation of a new
digital tool, we are finding
ways to enhance data quality,
streamline decision-making
and reduce waste.
The project will reduce
administrative hours and
system touchpoints, allowing
for a leaner cost structure and
enhanced work planning.
Everyone is eager to make
positive transformations for
the business.
Ryan Calvert
Head of Product
Development for Renewables
FOCUS ON LEAN
38
38 GREEN BELTS AND 8 BLACK
BELTS TRAINED AND 30+
PROJECTS DELIVERED
ENGINEERING AND INNOVATION
NETWORK ESTABLISHED TO
BUILD A GROUP-WIDE TECHNICAL
COMMUNITY THAT PROMOTES
KNOWLEDGE SHARING AND
COLLABORATION AND INFORM
OUR TECHNICAL FRAMEWORKS
FOR THE FUTURE
18
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Establish a central HSEQ
function, policies and
procedural framework to
align and improve the safety
culture with a unified One
James Fisher approach.
See Exceptional Safety
case study on page 39
Improve our financial
performances in terms
of forecasts accuracy,
disciplined delivery
and accurate cash
flow management by
establishing a strong
Lean and Project
Management Organisation
(PMO) culture across the
Group.
Ensure all we do is aligned
with our sustainability
agenda, creating value for
all our stakeholders.
Build a strong IT service
focused on maximising the
value of data management,
security, and digitalisation.
Create an improved
working environment
whereby people are at the
centre, waste is minimised
and everybody is working
at their best so that
engagement is maximised.
ACHIEVEMENTS
HSEQ
LAUNCHED:
EXCEPTIONAL SAFETY CAMPAIGN
HSEQ POLICIES
INTELEX ELECTRONIC SAFETY REPORTING TOOL
JAMES FISHER LIFE-SAVING RULES
3
400+
23
3,500
3,500 HOURS PMO/
LEAN ON CALL SUPPORT
TO PRODUCT LINES,
OVER 125HRS PER
WEEK
LAUNCHED PROJECT MANAGEMENT
SKILLS MATRIX AND PROCESSES FOR
RENEWABLES IMPROVING THE WAY WE
MANAGE ALL RENEWABLES PROJECTS
SUSTAINABILITY POLICY IMPLEMENTED BY THE
GROUP, COMMUNITY HUB LAUNCHED AND CLIMATE
TRANSITION GAP ANALYSIS STARTED
ENTERPRISE RESOURCE PLANNING (ERP)
SYSTEM IDENTIFIED FOR ENERGY DIVISION
38 GREEN BELT PROJECTS TARGETING REMOVAL
OF INEFFICIENCIES AND ENHANCING THE
ABILITY TO DELIVER BY REDUCING OVERLOAD
AND IMPROVING PEOPLE ENGAGEMENT
OVER 400
KAIZEN
FUNNEL
INITIATIVES
IN ACTION
THREE PROJECTS
LAUNCHED TO THREE
PRODUCT LINES. 15 DOCS
PUBLISHED
23 VALUE STREAM
MAPPING (VSM)
SESSIONS
KEY OBJECTIVES
100% OF ORGANISATION
NOW ON THE OFFICE 365
PLATFORM
100%
100% PRODUCT LINES AND PLC ACTIVE KAIZEN
FUNNELS AND STRATEGY DEPLOYMENT PLANS
100% OF PRODUCT LINES USING LEAN
100%
100%
ACTIVITIES TAKING PLACE ACROSS 3 PILLARS –
PEOPLE, PLANET AND PARTNERSHIPS
19
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
OUR DIVISIONS
2023 HIGHLIGHTS
Safety
10 years LTI free in Norway
6 years LTI free in Renewables
Performance
Outperformed in RMSpumptools
and Scantech
Offshore wind collaboration
agreement in NE Asia
Innovation
1
st
Bubble curtain delivery
in the US
1
st
Decommissioning project
in the US
SEABASS Innovation Award
ENERGY
20
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Following its successful launch in Europe and
Asia, we also secured our first project in the US
and see broader opportunity to leverage this
unique and innovative solution.
While we have made some progress, this is a
long-term journey. There is greater potential
around our digital solutions, including digital twin
technology to improve asset integrity and uptime.
Likewise in renewables, the introduction of Cable
Guardian for the offshore wind industry will
reduce costly downtime caused by cable failure.
However, our number one priority for 2024 and
beyond, must be safety. This year we launched
our Exceptional Safety commitment and
following some recent incidents in Energy, we
are building a collective culture of accountability,
supported by the right tools and training. We are
also focused on delivering stronger operational
and financial performance, aligned to our UOP
and ROCE targets. At times we will have to
make difficult decisions and this year was no
exception, including the closure of our Subtech
Europe business. I don’t underestimate the
impact on our employees and this is why we will
continue to engage openly and honestly.
We are committed to strengthening our
employee engagement, which includes the
opportunity to develop and progress a global
career. Our James Fisher Academy is one
example of how we’re doing this, trialling it for
the offshore wind industry with the potential for
it to expand beyond Energy (see case study on
page 22).
Together, we will deliver the long-term potential
of our Energy Division. This centres around
building a safe, sustainable, responsible and
efficient organisation that delivers impeccable
business execution – underpinned by the right
people, innovation and geographical footprint.
Neil Sims
Head of Energy
As an integrated Energy
Division, our focus has been
to align the organisation
behind a common mission –
a safe, sustainable transition
to the low-carbon future.
This is built around two core markets, oil and
gas and renewables. I’m encouraged by the
groundwork underway to reshape our portfolio
and align with our customers’ energy lifecycle
needs. This includes ongoing investment in
technology and innovation that will refine and
differentiate our product portfolio.
Security of energy supply remains critical
and 2023 saw robust demand for our well
testing, intervention and artificial lift services,
demonstrated by excellent performance in
these businesses. While decommissioning
remains challenging, we did expand beyond the
UK to deliver our first project in the US Gulf of
Mexico. Our SEABASS plug and abandonment
technology also won the “Innovation in
Decommissioning Award” at a UK industry
event, which recognised the potential 25% time
saving when compared to competing systems.
Offshore Wind remains an important growth
area for James Fisher and while 2023-24
market conditions remain difficult, 2025 is set to
improve and we will centre our expertise around
installation, commissioning and Operations
and Maintenance (O&M) services. This includes
North East Asia, where we recently signed a
joint collaboration agreement with Tokyo Gas
Group. From a technology perspective, our
bubble curtain technology is a technology
differentiator for James Fisher and we have
seen strong interest from our customers.
While we have made some
progress, this is a long-term
journey. There is a greater potential
around our digital solutions.
Revenue (£m)
£266.5m
2023 £266.5m
2022 £242.6m
Statutory operating profit/(loss)
(£m)
£9.5m
2023 £9.5m
2022 £16.4m
Underlying operating profit* (£m)
£15.7m
2023 £15.7m
2022 £13.9m
Return on capital employed (%)
9.3%
2023 9.3%
2022 8.0%
ENHANCING PROTECTING CONNECTING
* Before adjusting items, refer to Note 2 in the
Financial statements.
21
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
BRIDGING THE SKILLS GAP IN
OFFSHORE WIND
James Fisher has responded to the
growing skills gap facing the offshore wind
industry through the launch of the James
Fisher Academy, with the aim of upskilling
employees across both operational and
logistical roles.
The Academy launched its pilot scheme
in the fourth quarter of 2023 with an initial
focus on high voltage safety – an area
in which the industry is experiencing a
shortage of suitably-trained personnel.
It offers a combination of online and
field-based operational learning, using
high-quality material created and delivered
by industry experts.
Commenting on his experience of the
Academy, Philip Brammer, Electrical
Maintenance Technician, said, “The
training, although intense, has been a
fantastic learning experience and has
taught me a lot about staying safe at
work.”
A wider rollout is planned for 2024,
along with additional internal learning
pathways. The upskilling of employees will
reduce reliance on external contractors
– improving our service offering for
customers – and enhance James Fisher’s
reputation within a fast-growing industry.
GEOGRAPHICAL EXPANSION IN
ACTION – KSA
A new purpose-built facility is enabling
James Fisher to better serve customers
in the emerging Middle East market.
The site, in Al Khobar, Kingdom of Saudi
Arabia, which has been utilised by a
number of James Fisher Product Lines,
gives the Group a local base from which
to meet the demands of the oil and gas
market in the Middle East with a current
focus on artificial lift technologies.
RMSpumptools, a prime user of the site, has
doubled the number of employees based at
the facility since it opened its doors in late
2022 in response to customer demand –
with a particular focus on the Field Service
Team that carries out customer installations.
Many of the team are Saudi nationals, in line
with James Fisher’s support of the IKTVA
(In-Kingdom Total Value Add Programme),
which aims to increase the levels of
localisation in the country.
Production and output levels rose by
65 percent in less than eight months
since the site opened. With further
investment in new tooling and productivity
improvements, alongside the introduction
of new Product Lines, this figure is set to
increase to 300 percent after the first full
year of the site being operational.
From addressing the growing
skills gap in offshore wind
to introducing specialist
air compressors in the
US market, our energy
case studies demonstrate
how we’re responding to
customer and industry needs
across the globe.
OUR DIVISIONS CONT. ENERGY CASE STUDIES
22
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
BRINGING BUBBLE CURTAIN INNOVATION TO THE US OFFSHORE
WIND MARKET
James Fisher has developed innovative new air
compressors to overcome a key challenge faced by
customers during offshore wind farm construction.
In 2023 we introduced the new ST3100 containerised air compressors to
create big bubble curtains – crucial for protecting marine life when subsea
construction work is taking place.
It represents a significant improvement over traditional solutions thanks to its stackable
design, meaning the footprint required for installation is significantly reduced. As a result,
customers can operate them from smaller vessels, increasing manoeuvrability and
reducing costs.
The compressors pump air through flexible piping on the seabed to create a bubble curtain
that alters the form of pressure waves in the water, weakening the acoustic impact of
subsea construction work and reducing the harm posed to marine life.
The ST3100 compressors were deployed on a project in North America’s burgeoning
offshore wind market during 2023, playing a key role in the construction of one of the first
commercial-sized offshore wind farms built on the east coast of the US, and exceeding the
expectations of our customer. Further projects are in the pipeline, as James Fisher continues
to grow its presence in the North American renewable energy market.
“The project was a brilliant success and a testament to the hard work and dedication which
has been applied to such pioneering technology. The ST3100s are a stable product for
ScanTech Offshore and signify an exciting future for our presence in the renewables market.”
Barry Craig
Vice President of Renewables
The project was a
brilliant success and a
testament to the hard
work and dedication
which has been applied
to such pioneering
technology. The
ST3100s are a stable
product for ScanTech
Offshore and signify
an exciting future for
our presence in the
renewables market.
Barry Craig
Vice President of Renewables
ENHANCING PROTECTING CONNECTING
23
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
OUR DIVISIONS CONT.
2023 HIGHLIGHTS
Safety
1 year LTI free globally
Performance
Successful transition of
NATO contract
Solid commercial diving
performance
Significant improvement in
employee engagement
Innovation
Successful trials of Shadow Seal
special operations vehicle
DEFENCE
24
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Some of these projects have been impacted
by issues outside of our control, including
dependencies on customer deliverables and
government approvals, which led to delays and
cost increases. Our results also reflect delays
to customer procurement processes, mainly in
response to backlogs from COVID. We expect
to complete the remaining milestones on these
projects in 2024, with key lessons learned.
During 2023 we successfully transitioned the
NATO Submarine Rescue System In-Service
Support (ISS) contract from “2ISS” to “3ISS”
following the award of the 5 (+4) year £63m
contract in December 2022. Our enduring
support to NATO highlights the strength of our
submarine rescue capability and was based on
the continuous improvement of our services to
our NATO and international customers.
The defence market carries an inherently high
risk of delays to procurement schedules; a
major focus for 2024 is to strengthen our
sales forecasting and put in place more
robust mitigation against delays in projects. In
2023 we developed a more focused Defence
Division strategy and operating model to
accelerate international growth across our
core Product Lines. This is underpinned by
our new senior leadership team, including a
combination of experienced and new hires
who will energise the business behind our
ambitions.
We have a growth pipeline with opportunities
coming to market in 2024 and beyond across
all our Product Lines. While we face increasing
levels of competition in some areas of the
business, this is a further catalyst to drive
innovation and performance and we are laying
out a development roadmap to meet the needs
of our customers in a changing battlefield
environment. This includes trials of our Shadow
Seal special operations vehicle in 2023, ahead
of delivery to our customers in 2024.
We are seeing early momentum from our
international “home markets” model, including
a step change in India following the transition
to a locally managed team; strong growth
pipelines in Australia, Singapore, Sweden
and the Netherlands; and potential in the US
defence market where we have recruited an
outstanding general manager to lead our US
business. Our commercial diving business has
also continued to perform well. Key to all of this
is our people.
Our annual employee engagement survey
in November showed a material increase in
employee engagement. While there is a lot
to achieve, this improvement shows that our
colleagues have increasing confidence in
the future of Defence – and together we are
committed to making it happen.
Rob Hales
Head of Defence
I was delighted to
join the James Fisher
Defence Division in 2023
at an important time, as
geopolitical and energy
security trends mean that
undersea and special
operations capabilities
are being prioritised for
investment across our
markets.
It has been a great privilege to meet our
customers and partners around the world,
understanding their needs so we can build
stronger customer intimacy and align this with
our expertise. This is vital if we are to deliver
the longer-term potential in our Defence
business, including our commitment to safety
and assurance in the most pressurised of
environments.
2023 was a mixed year of performance for
Defence. Importantly, our safety performance
was strong with no Lost Time Injuries and
a material reduction in our Total Recordable
Case Frequency. We have teams deployed
globally in high hazard environments every day
of the year, so this is a great testament to our
safety management.
Financially, we increased profit but revenue
from larger project orders was lower than
expected in this year. Our greatest challenge
was working through a difficult legacy of being
over-reliant on large, one-off projects, with
several still to complete.
Revenue (£m)
£72.5m
2023 £72.5m
2022 £68.2m
Statutory operating profit/(loss)
(£m)
£(23.7)m
£(23.7)m 2023
2022
Underlying operating profit* (£m)
£1.5m
Return on capital employed (%)
2.1%
We have a growth
pipeline with
opportunities
coming to market
in 2024 and
beyond, across all
our Product Lines.
ENHANCING PROTECTING CONNECTING
£(3.5)m
2022
2022
£(0.4)m
(0.4)%
2023 £1.5m
2023 2.1%
* Before adjusting items, refer to Note 2 in the
Financial statements.
25
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
SUBMARINE RESCUE STEP-
CHANGE IN INDIA
In 2016, JFD won a £193m contract with
the Indian Navy and by 2018 delivered
two of its Third Generation Submarine
Rescue Systems. This world class
capability is maintained by JFD and
operated by the Indian Navy, supported
by training from JFD’s global submarine
rescue operations team.
2023 saw a step-change in performance,
as we implemented our transition plan
under the leadership of our new Indian
management team.
Achievements in 2023 included:
• Conducting our first in-country deep
maintenance period for the West Coast
submarine rescue system
• Completing training for the fifth and sixth
Indian Navy submarine rescue crews
• Supporting the “Goa Maritime Conclave”
where the Indian Navy hosts its regional
partners across the Indian Ocean
• Completing a deep dive to over 500m
These achievements were recognised by
the UK Secretary of State for Defence
and the Indian Defence Minister, the
Honourable Raksha Mantri, during the first
UK visit by an Indian Defence Minister in
23 years during January 2024.
ENTERING US MARKET WITH
TACTICAL DIVING VEHICLE
TECHNOLOGY
James Fisher has expanded its presence
in the US defence market through a
partnership with Blue Tide Marine (BTM), to
launch a new tactical diving vehicle (TDV).
Shadow Seal has the ability to transport
a pilot, navigator and two passengers in
surface, semi-submerged and submerged
mode with a range of 80 nautical miles.
Designed for special operations forces
that need to covertly cross offshore and
nearshore waters, Shadow Seal can
be used to protect complex, high value
platforms and critical infrastructure.
Working with BTM gives James Fisher
greater access to the US market and
expands our subsea maritime capability.
The partnership – with BTM leasing the
production model of Shadow Seal – is
a significant step towards offering a full
turnkey solution in the US.
“This partnership ensures that we can
offer innovative solutions to modern day
challenges. James Fisher is committed
to further developing our in-country
capabilities including through-life support
services and this reflects a significant
milestone in our mission to better serve
the US and wider Americas undersea
markets.”
Rob Hales
Managing Director of James Fisher’s
Defence Division
OUR DIVISIONS CONT. DEFENCE CASE STUDIES
Our defence case studies
shine a spotlight on
what can be achieved
through partnership and
communities, with entry into
the US defence market and
a thriving network focused
on championing inclusivity
amongst the Division’s
highlights.
26
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
EMPOWERING WOMEN IN DEFENCE
Established in the Defence Division in 2023, the “Supporting Her Empowerment Network”
(S.H.E) meets on a quarterly basis and is open to all employees with the aim of creating a
more inclusive workplace. Over the last 12 months, the S.H.E Network has been focused on
promoting more open communication around topics such as gender and cultural diversity,
increasing advocacy, achieving greater diversity within recruitment and championing
mentorship programmes.
The network played a key role in organising regional events across the Division to mark
International Women’s Day and helped realise the Group’s ambition of becoming a member
of “Women in Defence”, a not-for-profit organisation committed to accelerating gender
equity in the defence sector.
For 2024, the network has set itself the ambition of enhancing the Defence Division’s social
value impact – actively engaging with local communities by supporting a charity or cause
dedicated to advancing women’s health, rights or wellness.
“We are delighted with the enthusiasm and momentum the S.H.E Network has gained over
the past year, with a great foundation now in place from which to build on throughout 2024.
It’s clear there is a real appetite from across our global locations to make a positive change
around gender equity and I am encouraged by what has already been achieved.”
Jessica Seymour
S.H.E Network Co-Chair
ENHANCING PROTECTING CONNECTING
We are delighted with
the enthusiasm and
momentum the S.H.E
Network has gained
over the past year, with
a great foundation now
in place from which to
build on throughout
2024. It’s clear there
is a real appetite from
across our global
locations to make a
positive change around
gender equity and I
am encouraged by
what has already been
achieved.
Jessica Seymour
S.H.E Network Co-Chair
27
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
OUR DIVISIONS CONT.
2023 HIGHLIGHTS
Safety
1 year LTI free globally
Performance
Strong performance vs. budget
Key contract renewal with P66
Innovation
Delivery of two dual-fuel vessels
Successful refuelling-at-sea
operation
MARITIME
TRANSPORT
28
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
We also secured Tankships’ largest
contracted revenue renewal with Phillips
66 in the UK, pioneered successful trials
of refuelling-at-sea between the Royal
Fleet Auxiliary and a commercial tanker,
as the Royal Navy looks to develop its
replenishment operations to sustain task
groups and warships for even longer at sea.
So while it has been a positive year, we are
not complacent and recognise the need
for continued efficiency by reducing fleet
downtime and optimising our maintenance
schedules.
As the world leader in ship-to-ship (STS)
transfers, the Fendercare business increased
its net operating profit compared to 2022.
This was achieved thanks to the new
organisation structure and leadership team,
driving a focus on key markets, expertise
and differentiated services that are critical
in an increasingly competitive marketplace.
STS contracted volumes increased to 30%,
including contract retainers for Liquefied
Natural Gas (LNG). The marine products side
of the business also saw growth in fixed and
floating fenders, with the latter primarily due
to new floating LNG projects in Europe.
Martek Marine worked through some
challenges due to stock and staff challenges,
but the business has made progress in
resolving and stabilising performance. A new
product was also launched, chromatography
gas, targeting the growing dual-fuel vessel
market. Cattedown Wharves, which handles
a variety of cargoes in the Southwest of
England, continued to perform well during
2023, including renewal of a significant
contract.
As we look ahead, our focus for 2024 remains
on integrating our business and identifying
synergies from which to grow our customer
base. With our capability in Tankship and STS
transfers, we have the foundations to grow.
And we will continue to focus on how we
differentiate our services from competitors,
to ensure we maintain market share and
leadership.
Krystyna Tsochlas
Head of Maritime Transport
Against the backdrop of
a year with considerable
change, Maritime Transport
had a solid year, delivering
on our financial and
safety targets. Thanks to
our strengthened senior
leadership team in place,
I am confident that we will
continue to thrive.
With safety as our first priority, I’m pleased to
report we had no Lost Time Injuries and saw
a 44% decrease in our Total Recordable Injury
Frequency Rate. But we still have room for
improvement as we seek to achieve our “goal
zero” incidents vision and deliver exceptional
safety standards in all that we do.
Reflecting on 2023, a proud moment was the
delivery of Tankships’ two dual-fuel vessels
– Sir John Fisher and Lady Maria Fisher. The
maritime industry is a key enabler to reducing
overall global greenhouse gas emissions and
why we are committed to investing in our
fleet of the future. Thanks to our heritage
we are ideally positioned to lead the field
through our Tankships, which could not have
been possible without the dedication and
partnership with our customers, colleagues,
and industry partners.
Revenue (£m)
£157.2m
2023 £157.2m
2022 £167.3m
Statutory operating profit/(loss)
(£m)
£21.7m
2023 £21.7m
2022 £19.2m
Underlying operating profit* (£m)
£23.3m
2023 £23.3m
2022 £18.8m
Return on capital employed (%)
30.3%
2023 30.3%
2022 22.5%
Our focus for
2024 remains
on integrating
our business
and identifying
synergies from
which to grow our
customer base.
ENHANCING PROTECTING CONNECTING
* Before adjusting items, refer to Note 2 in the
Financial statements.
29
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
ONBOARD WITH EXCEPTIONAL
SAFETY
By embracing a culture of accountability in
pursuit of Exceptional Safety, the Maritime
Transport Division achieved several
significant landmarks in performance in
2023. This included no Lost Time Incidents
(LTIs), alongside a 44 percent reduction in
its Total Recordable Injury Frequency Rate.
Three of our vessels, Seniority, Superiority
(sister ships) and Solway Fisher have
each achieved 6,000 days without a
LTI, demonstrating the unwavering
commitment of our seafarers to
maintaining exceptional safety standards
despite the challenging environmental
conditions in which they operate.
In recognition of the accomplishment,
crews onboard each of the vessels were
presented with platinum awards and
thanked for their diligent approach to safety.
“Congratulations to all who have sailed
onboard these three vessels. Reaching
6,000 days without a LTI, the equivalent of
over 16 years, is a fantastic milestone and
wouldn’t have been possible without the
crews’ commitment to safety.”
Scott Dobson
Ship Manager
DEVELOPING THE NEXT
GENERATION OF SEAFARERS
James Fisher has continued its officer
cadet training programme, sponsoring
aspiring maritime professionals towards
achieving formal qualifications.
In partnership with one of the UK’s leading
maritime colleges, Fleetwood Nautical
Campus, cadets undergo rigorous training,
working towards an “Officer of the Watch”
certificate in competency and a formal
qualification to at least an Higher National
Certificate level.
The programme emphasises the
development of leadership qualities,
critical thinking abilities, and adaptability to
effectively navigate the dynamic challenges
inherent in the maritime sector.
James Fisher's commitment to developing
cadets stems from its recognition of the
invaluable role that skilled professionals
play in maintaining operational excellence
and driving innovation within the maritime
industry. Investing in the development
of cadets not only ensures a pipeline of
talented individuals for our workforce, but
also contributes to the overall growth and
sustainability of the maritime sector.
OUR DIVISIONS CONT. MARITIME TRANSPORT CASE STUDIES
Focused on safety with
notable performance
milestones reached in the
year, Maritime Transport also
had its sights set clearly on
the future with the launch
of its cadet programme and
expanded service offering.
30
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
SUPPORTING THE ROYAL NAVY IN NEW WAYS
James Fisher has expanded its service offering to the defence industry by undertaking a
replenishment at sea (RAS) operation for the UK Ministry of Defence.
Crew onboard the MV Raleigh Fisher, part of the fleet of vessels operated by James Fisher
Tankships, received specialised training on RAS safety and procedures, enabling them to
successfully complete a series of trials involving RFA Tideforce.
Led by Captain Peter Harrison, the crew worked alongside the Royal Navy vessel, transferring
fuel between the two tankers during a range of tests. This was part of a wider operation by the
Royal Navy, exploring ways in which commercial tankers such as Raleigh Fisher can work with
RFA vessels to help sustain the Royal Navy fleet at sea for even longer periods.
Tideforce is part of the Royal Fleet Auxiliary and provides global logistical support to the
Royal Navy, notably Queen Elizabeth Class aircraft carriers.
“What a privilege it has been for us to work with our fellow professional mariners on Raleigh
Fisher. They have been so receptive to the work and dangers associated with replenishment
operations at sea.
For all of them this was a first and to have achieved so much, so quickly, is a testament to
their dedication and drive to ensure they could deliver fuel safely whilst separated by just 35
metres and underway.”
Captain Chris Clarke
Commanding Officer of Tideforce
ENHANCING PROTECTING CONNECTING
For all of them this
was a first and to have
achieved so much, so
quickly, is a testament
to their dedication
and drive to ensure
they could deliver fuel
safely whilst separated
by just 35 metres and
underway.
Captain Chris Clarke
Commanding Officer
of Tideforce
31
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
WELCOME
We have a strong heritage built
on the foundations of our people
and innovation. Alongside our
valuable partnerships with
customers, communities and
suppliers, we are embedding
a more sustainable approach
across our business.
The Sustainability Strategy is fundamental to our
success and this year, we have integrated it into the
business, centred around three key pillars: People,
Planet and Partnerships.
Our recent christening of the Lady Maria Fisher,
our second dual-fuel tanker, is testament to the
Sustainability Strategy in action. It brought together
the strengths of our people, low-carbon technologies
and partnerships with suppliers and customers,
in pursuit of the net zero future. We also launched a
new cross-company Exceptional Safety campaign,
aimed at delivering a step-change in our culture and
training – including how we deliver it in partnership
with our contractors.
Heading into 2024, we have a greater potential to
deliver, particularly around our emissions reductions
across the business. With the continued support and
engagement of all our stakeholders, we will focus
on progressing this priority and continue to embed
sustainability more broadly across James Fisher.
Jean Vernet
Chief Executive Officer
SUSTAINABILITY
OUR 2023 SUSTAINABILITY REPORT
To find out more on our ESG practices read
our Sustainability Report 2023
VISION
To harness the international,
Blue Economy space,
providing technically
advanced solutions
that enhance, protect
and connect.
SUSTAINABILITY
PURPOSE
To protect the environment
and create a positive impact
on society, and the economy,
by integrating sustainability
considerations into our
operations.
32
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Underpinned by our
purpose and valued
behaviours, the three
pillars of our Sustainability
Strategy – People,
Planet, and Partnerships
– reinforce each other
and, together, support
our business growth and
transformation strategy.
In 2023 we re-aligned the Company
purpose with our sustainability agenda
as part of our transformation strategy.
Derived from our materiality assessment
in 2021, we have put a Group-wide
framework in place that integrates our
three pillars into our Division and Function
strategies.
OUR PEOPLE
Our employees are the
fundamental route to success
OUR PLANET
Our activities are linked to
tackling climate change and
environmental efficiency
OUR PARTNERSHIPS
Our collaboration with
customers and suppliers drives
innovation and technology
COMPANY
PURPOSE
Pioneering safe, trusted
and sustainable solutions
for complex problems, in
harsh environments.
33
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CURRENT FRAMEWORK
ALIGNMENTS
James Fisher is committed to providing
comprehensive public disclosure on our
Group-wide sustainability performance which
is tracked using well-established frameworks
and alertness to changes in the external
environment.
During 2023 the Company, assisted by
SLR, ESG consultants, completed a gap
analysis to assess the Group’s climate-related
disclosures. The frameworks considered for
this were TCFD, IFRS Sustainability Disclosure
Standards and the TPT (Transition Plan
Taskforce) and the results will inform our
detailed transition planning activities in 2024.
GOVERNANCE
Our Group sustainability governance structure
aligns with the existing Group business
and governance model to ensure greatest
efficiencies and no overlap.
The Sustainability Committee is a
sub-committee of the Executive Committee
mandated to assist the CEO in recommending
the Group’s Sustainability Strategy to
the Board.
During 2023 the Sustainability Committee
carried out its periodic review of the
organisation, governance and reporting
structures. As a result, changes to
the Committee were made to improve
effectiveness.
In particular:
• A Board member, Claire Hawkings, a
Non-Executive Director, attends meetings
on a regular basis. Claire brings ESG-
related expertise while strengthening
communication between management and
the Board.
• The Group Heads of Divisions now form
part of the Sustainability Committee
ensuring a strong team of management-
level influencers in relation to ESG.
SUSTAINABILITY CONT. STRATEGY AND GOVERNANCE
Further information on our strategy,
frameworks and governance including
roles and responsibilities can be
found within the 2023 Annual
Sustainability Report
GOVERNANCE STRUCTURE
ROLE OF THE STEERING TEAMS
EXECUTIVE
COMMITTEE
HEAD OF GROUP
SUSTAINABILITY
SUSTAINABILITY COMMITTEE
Strategy and
Governance
Metrics and TargetsOversight Leadership
Custodians
of Sustainability
Pillars
Drive and Empower
Champions
Deliver Function
Objectives
Share Performance,
Progress and
Highlights
AUDIT
COMMITTEE
NOMINATIONS
COMMITTEE
REMUNERATION
COMMITTEE
THE BOARD
GROUP SUPPORT FUNCTIONS
STAKEHOLDER
STEERING TEAM LEADS
GROUP HEADS OF FUNCTIONS
PRODUCT LINES
ROLE OF THE SUSTAINABILITY COMMITTEE
34
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
CURRENT UK ESG-RELATED DISCLOSURES
SECR*
A
DR
Report on global energy use and
greenhouse gas emissions
View on pages 112 to 114
TCFD**
A
Climate-related financial disclosures
under the UK Listing Rules
View disclosures on pages 41 to 46 and our full TCFD
disclosure within our Sustainability Report Annex A
CRFD***
A
SR
Climate-related financial disclosures
under the UK Companies Act 2006
View on pages 41 to 45
ESOS****
DUE: 5 JUNE 2024
4yr
Audit of energy used in James Fisher
buildings, industrial processes and
transport
Evidence pack and compliance declaration to the
environment agency
GENDER PAY GAP
A
Differences between the mean and
median hourly pay and bonuses of
male and female employees
View 2023 snapshot on page 38 and our full gender
pay gap report www.james-fisher.com/investors/
governance/gender-pay-report/
MODERN SLAVERY
ACT 2015 REPORT
A
Statement outlining the steps taken
to ensure no slavery or human
trafficking is taking place across our
supply chains or business
View our modern slavery
and human trafficking
statement on page 66
View our policy www.
james-fisher.com/
investors/governance/
modern-slavery-
statement/
PAY RATIO
A
Ratio of CEO’s remuneration to
median, lower quartile and upper
quartile pay of our UK employees
View on page 105
s172(1)
COMPANIES ACT
A
SR
Directors’ duties. Statement
summarising how the Directors
have promoted the success of the
Company, taking into account a
variety of matters including ESG
considerations
View our statement on page 36 and further details on how
we have engaged with stakeholders on pages 36 to 37
Workforce Engagement
Statement explaining how we have
engaged with our employees and
how the Directors have regard to
employee interests
Engagement with suppliers
Statement summarising how the
Directors have had regard to the
need to foster the Company’s
business relationships with suppliers,
customers and others
CORPORATE
GOVERNANCE CODE
A
CG
Description of the corporate
governance code that applies to
James Fisher, how we applied the
code and explanations for non-
compliance, if any
This governance section of the report is structured around
the Company’s application of the Principles of the Code:
View from page 70
* Streamlined Energy and Carbon Reporting.
** Task Force on Climate-Related Financial Disclosures.
*** Climate-Related Financial Disclosures.
****Energy Savings Opportunity Scheme.
Key
A
Reported annually
4yr
Reported every four years
CG
In Corporate Governance
Report
SR
In Strategic Report
DR
In Directors’ Report
View our
Sustainability
Report 2023
The below table lists our current UK ESG-related disclosures, including the frequency of our reporting, the content
of the disclosures and where the disclosures can be found.
35
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Growth creates value
through a multi-stakeholder
model.
The Group’s success depends on a deep
understanding of the views, and challenges,
that stakeholders face, and the complexities
posed by the environments in which they
operate.
The Board is committed to engaging with
all its stakeholders factoring key decision-
making on:
• How decisions align with the Group’s
purpose.
• The likely short-, medium- and long-term
consequences of the decision.
• The value created for investors.
• The enhancement of performance created
by the decision.
• The potential impacts on people, local
communities, and the environment.
• The need to create strong, mutually
beneficial customer and supplier
relationships.
• The Group’s commitment to business
ethics.
• External factors which may impact
decision-making and stakeholders.
Section 172(1) statement
This serves as James Fisher’s section 172(1)
statement explaining how the Directors have
had regard to the matters set out in Section
172(1)(a) to (f) Companies Act 2006, when
performing their duty under section 172.
Under section 172, Directors are required to
act in a way that they consider, in good faith,
to be the most likely to promote the long-term
success and resilience of the Company for
the benefit of the Shareholders as a whole,
while having regard for all our stakeholders
(employees, customers and suppliers,
shareholders, the environment and local
communities).
By considering key stakeholders and aligning
activities with the strategic plan, as well as
the Company’s culture, values, sustainability
principles and practices, the Company will act
fairly, transparently and in the best interests of
the Company over the long-term. Examples
of how the Directors have had regard to the
factors set out in section 172 in practice over
the past year can be found as follows:
SUSTAINABILITY CONT. ENGAGING FOR VALUE
OUR STAKEHOLDERS
The Sustainability Strategy brings all our stakeholders into the heart of the Group and informs
how we actively engage with them.
CUSTOMERS AND SUPPLIERS
Support our customers and suppliers
to achieve their sustainability ambitions,
through strategic partnerships and
investment in innovation
Board engagement
• The Board received regular updates
from Product Line Directors through the
Executive Committee on their strategic
priorities, markets, and key customers.
• Through the Sustainability Committee
the Board received updates on
customer and supplier engagement.
• Where appropriate, Executive Directors,
and Divisional Leads, worked with
major customers to develop innovative
products and services and to find
solutions to their problems.
How we supported during 2023
• Appointed a Chief Digital Officer and
created a new Chief Technology Officer
role in January 2024.
• Supplier Code of Ethics was
redeveloped to align with our
Sustainability Strategy.
• Through the re-appointment of a
Head of Group Supply Chain, we
identified synergies and other benefits
of procurement coordination and
standardisation between Group
businesses.
Key areas of focus for this stakeholder
group
• Innovation and problem solving.
• High quality products and services.
• Trusted relationships.
• Social and environmental impacts.
• Payment practices.
• Supply chain resilience.
SHAREHOLDERS
Promote a sustainability-driven Business
model and strategy that delivers attractive
returns for Shareholders and delivers on
our ESG metrics
Board engagement
• The Directors had regular in-person
meetings with investors, principally
through investor roadshows, investor
events and the Annual General
Meeting (AGM).
• The Chairman met with the largest
Shareholders to discuss results and
other announcements.
• With a dedicated investors section, the
Annual Report and Accounts and the
Company website set out the Group’s
strategy and progress against its
strategy and key activities.
How we supported during 2023
• The Board engaged with Shareholders
at the AGM.
• The Directors consulted with the
Company’s major shareholders
regarding the 2024 Remuneration
Policy.
Key areas of focus for this stakeholder
group
• Operational and financial performance.
• Company strategy implementation.
• Capital structure, liquidity and capital
allocation.
• Risk management and controls.
• Sustainability Strategy.
36
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
LOCAL COMMUNITIES
Invest in the communities in which we
operate to position ourselves as a strong
corporate citizen that can demonstrate its
positive impact on society
Board engagement
• Through the Sustainability Committee,
the Board received updates on
community integration performance
throughout the Group.
• The Board supported employees
to engage with community-based
projects that help make a positive
impact, including charitable fundraising,
volunteering and education, including
STEM (Science, technology,
engineering, and mathematics) learning
and events.
How we supported during 2023
• We continued to support employees’
local community initiatives and events
through the donation of time, material,
or provision of expertise, for example
STEM event participation and local
internships.
• We have formed a strong partnership
with a local Education and Skills
Partnership which brings schools,
colleges, and local employers together
who recognise the need to equip local
young people with knowledge, skills,
and aspirations.
• James Fisher has pledged its support
as an employer, to the Young Persons
Guarantee, a Scottish Government
initiative to ensure all young people aged
16-24 have the opportunity of work,
education and training.
Key areas of focus for this stakeholder
group
• Environmental and social impacts of our
operations.
• Health and safety.
• Employee wellbeing.
THE ENVIRONMENT
Assess, quantify, and manage the impact
of our operations on our planet, and how
external factors may affect the Group's
performance
Board engagement
• The Board considered climate-related
risks and opportunities on a continuous
basis, such as when deciding on
the strategic direction of the Group,
acquisitions and divestments, or major
capital expenditure.
• A Board member attended Sustainability
Committee meetings on a regular
basis, bringing ESG expertise while
strengthening communication between
management and the Board.
• The Board engaged with shareholders
directly to understand their ESG
priorities.
How we supported during 2023
• We continued to focus on our
performance and embedding ESG
considerations into business as usual.
• As part of the Group's transformation,
the groundwork is underway to reshape
our portfolio including identifying
innovative solutions to support our
customers’ energy transition.
• The Group continued its reporting and
disclosures in accordance with the
Carbon Disclosure Project (CDP), the UK
SECR requirements, TCFD and the UK
Government’s introduction of reporting
requirements through the Companies
(Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022.
• Net zero and GHG emissions awareness
webinar sessions took place and
learning pathways were identified.
• A gap analysis was conducted which
will inform our detailed climate transition
planning activities in 2024.
Key areas of focus for this stakeholder
group
• Carbon management.
• Net zero strategy.
• Climate disclosure.
• Climate risk and opportunity/energy
transition.
EMPLOYEES
Attract, invest in and retain our people
to enable delivery and position ourselves
as a leading employer of choice ensuring
wellbeing is at the heart of all we do
Board engagement
• Reporting back to the Board on a
regular basis, Inken Braunschmidt
(designated Non-Executive Director) as
part of her role held until 31 December
2023, in the engagement team;
attended a Defence Division open
forum in Aberdeen where she met with
employees and engagement champions.
• The employee Sharesave Scheme
encourages employees’ involvement in
Company performance.
• Employees can receive matching
employer pension contributions of
up to 7.5% of salary, with effect from
1 January 2023.
• The Board reviews the results of our
annual employee engagement survey.
How we supported during 2023
• We launched Engage, a quarterly all-
employee webinar providing updates
from across the Group and the
opportunity for employees to feed back.
• We extended mental health first aid
training and have 44 mental health first
aiders trained in Suicide First Aid.
• We highlighted the Employee Assistance
Programme to remind our employees
of the support available including
maintaining a healthy work/life balance;
improving mental wellbeing; family
issues; financial management/issues.
• We launched our online employee
community hub to inform, empower and
connect employees across the Group.
• A new HR ticketing system was
launched for all HR-related enquiries.
• We celebrated the success of
our first manager and leadership
apprenticeships.
• The Group Head of Reward was
appointed to shape and lead the
reward strategy.
Key areas of focus for this stakeholder
group
• Health and safety.
• Development and progression.
• Remuneration and recognition.
• Equity, diversity and inclusion.
37
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Our employees
are critical to the
safe, successful
operation of our
business.
United by a common purpose
and shared valued behaviours,
they enable the Company
to create value for all our
stakeholders.
With James Fisher operations
spread across six continents,
our people are geographically
dispersed and represent a
multitude of cultures. We will
continue to develop and build
upon a culture which allows
them to use their skills and
develop career paths with
Exceptional Safety at the
forefront of what we do.
PEOPLE
HIGHLIGHTS
HEALTH AND SAFETY
TALENT STRENGTH
EQUITY, DIVERSITY AND INCLUSION
SUSTAINABILITY CONT. FOCUS AREAS
JAMES FISHER LIFE-SAVING
RULES ROLLED OUT, BASED ON
LEADING INDUSTRY PRACTICES
EXCEPTIONAL SAFETY
CAMPAIGN LAUNCHED
For more
details see
our 2023 Annual
Sustainability
Report
ZERO LOST TIME INCIDENT
FREQUENCY RATE
IN 2 OF 3 DIVISONS 2023
NEW LEARNING EXPERIENCE
PLATFORM 2024
DELIVERING CUSTOMISED LEARNING
EXPERIENCES THROUGH AI AND
REINFORCING LEARNING THROUGH
COLLABORATION.
EMPLOYEE ENGAGEMENT RESPONSE
RATE INCREASED 3RD YEAR IN A ROW
OF MENTAL HEALTH
FIRST AIDERS TRAINED
IN SUICIDE FIRST AID
OVER
36%
Link to our current gender pay gap report and where to view further ESG-related disclosures can be
found on page 35
ONE JAMES FISHER COMMUNITY
HUB LAUNCHED
2023 GENDER PAY GAP: SNAPSHOT
GENDER SPLIT OF UK WORKFORCE
71%
MALE
29%
FEMALE
37.19%28.09%
MEDIAN HOURLY
PAY GAP
MEDIAN BONUS
GAP
GENDER DIVERSITY DATA 2023
As at 31 December 2023
Group Men Women
Board of
Directors
1
4 50% 4 50%
Senior
Managers
2
55 86% 9 14%
Employees 1,506 76% 463 24%
Total
employees 1,565 77% 476 23%
1. The Chief Executive Officer and Chief Financial Officer are members of both the Board and Executive Committee and are counted
once in the Board category.
2. “Senior Managers” is defined in section 414C (9) and 414C (10)(b) of the Companies Act 2006 and, accordingly, the disclosure
comprises the Executive Committee members and the Directors of all the subsidiaries of the Company.
38
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
EXCEPTIONAL SAFETY
Safety is our top priority at James
Fisher and it’s important we have
a One James Fisher approach.
Our common goal is to ensure that
everyone who works for us returns
home safely. This requires the right
safety culture, as well as the right
tools and training.
In 2023 we launched Exceptional Safety which raises
the profile of safety across the Group and provides a
unified approach:
• We are all responsible for safety.
• We are all empowered to speak up, stop the job and
champion safety.
We provided a new look, feel and tone of voice for
Exceptional Safety to create more impact. Managers
were provided with briefing packs, videos and
animation to help them engage with their teams and
to keep safety at the top of the agenda. The Executive
Team reinforced their commitment to safety across the
Group. Leaders have a key role to play in driving the
safety message.
Exceptional Safety runs alongside the roll out of the
James Fisher Life-Saving Rules based on the highest
standards of industry best practice to provide our
employees with the knowledge and tools to help keep
everyone safe. 73% of employees have been trained
and this will become part of compliance training going
forward.
In the recent employee engagement survey the three
additional safety questions ranked highly. The question
“safety is often talked about in my workplace” ranks
highest at 4.40.
The focus on safety hasn’t yet delivered the
improvements we were looking for but we remain
committed to maintaining safety at the forefront of
everything we do.
The launch of the new electronic HSEQ system Intelex
for Incident Management and Reporting including
hazard observation is a major milestone. Intelex will
help us quickly identify any issues or trends and
respond effectively and will be an important tool to help
improve safety for everyone working for James Fisher.
We are committed to having a zero-fatality
workplace, and we are proud to report zero
fatalities in 2023.
39
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
SUSTAINABILITY CONT. FOCUS AREAS CONT.
Our activities are
linked to tackling
climate change.
We aim to minimise
our emissions and
reduce our impact
on the environment.
We are focused on embedding
ESG considerations into
business-as-usual throughout
our operations to ensure our
impact on the environment is
reduced, and that we enable our
stakeholders to do the same.
We are committed to
minimising and eliminating
(where applicable) the
detrimental impact of
greenhouse gas (GHG)
emissions from our operational
activities. We also recognise
the importance of helping our
customers reach their own net
zero emissions targets, and
last year we made a science-
based commitment to be net
zero by 2050.
In this context, net zero means
reducing the Group’s Scope 1
and Scope 2 GHG emissions
to as close to zero as possible
by 2050 and applying a
residual strategy to neutralise
the residual emissions.
We have prepared our 2023
climate-related disclosures in
accordance with UK Listing
Rule 9.8.6(8) and section
414CB of the UK Companies
Act 2006.
PLANET
HIGHLIGHTS
PORTFOLIO CHOICES (PRODUCTS
AND SERVICES)
GHG EMISSIONS (NET ZERO)
RESOURCE EFFICIENCY (PEOPLE,
ASSETS, ENERGY, MATERIAL WASTE)
ON TARGET WITH NET ZERO
REDUCTION PATHWAY
SCOPE 1 AND SCOPE 2
CLIMATE PEER REVIEW
TRANSITION GAP ANALYSIS
LEAN IN USE
THROUGHOUT
100%
PRODUCT LINES
SIX SIGMA CERTIFICATIONS:
38 GREEN BELTS
TRAINED
OF WHOM 8 ARE WORKING TOWARDS
BLACK BELT ACCREDITATION*
SUSTAINABILITY CREDENTIALS
SESSIONS HELD AS PART OF THE
LEAN GREEN & BLACK BELT TRAINING
CURRICULUM
Full details of our progress with transition
planning and how we manage climate-related
risk, opportunities, governance, climate strategy
and metrics/targets can be found within our 2023
TCFD Report
CARBON REDUCTION AND
ENERGY EFFICIENCY INITIATIVES
SITE LAUNCHED
FOR TRACKING AND COLLABORATIONS
JF RENEWABLES
STRENGTHENED ITS
GLOBAL PORTFOLIO
Contributing towards the delivery of a
further 857MW of clean renewable energy
into the transmission network, through a multi-
million-pound contract at Triton Knolloffshore
transmission (OFTO) project, providing complete
end-to-end operations and maintenance (O&M)
services.
COLLABORATION WITH TOKYO GAS
TO PROVIDE OFFSHORE WIND O&M
SERVICES IN JAPAN
* The James Fisher Lean programme focuses on business
performance improvements through the elimination of resource
waste and defects, as well as equipping employees with the
skills required to become subject matter experts on continual
improvement.
40
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
CLIMATE-RELATED DISCLOSURES
Transition to net zero
and climate-related
disclosures
James Fisher and Sons plc
(the Company) and its group of
companies (the Group) has prepared
its 2023 climate-related disclosures
in accordance with UK Listing Rule
9.8.6(8) and section 414CB of the
UK Companies Act 2006 (the
Companies Act).
The Group considers that its climate-related
disclosures set out in Annex A to its Annual
Sustainability Report are consistent with the
four recommendations and 11 recommended
disclosures of the Task Force on Climate-
related Financial Disclosures (TCFD). The
cross-reference table on page 45 provides
further detail including where the Group's
disclosures against each of the TCFD's
recommended disclosures can be found
within the Annual Sustainability Report.
The Annual Sustainability Report is a
separate, online document (consistent with
our commitment to responsible consumption
of natural resources) that provides greater
detail on a wide range of sustainability topics
affecting the Group and our associated
performance. The Group has chosen to
publish its TCFD-consistent disclosures in
the Annual Sustainability Report to provide
more detail on these important matters and
allow readers the opportunity to review this
information in the context of the Group's
broader Sustainability Strategy.
The following section includes the Group's
climate-related disclosures for the purposes
of the Companies Act.
a) a description of the governance
arrangements of the company or LLP
in relation to assessing and managing
climate-related risks and opportunities;
The Company’s Board of Directors (the Board)
has ultimate responsibility for the Company’s
climate change strategy and oversees
progress against climate-related targets.
The Board considers climate-related risks
and opportunities on an ongoing basis, such
as when deciding on the strategic direction
of the Group, considering acquisitions and
divestments, or deciding on major capital
expenditures.
Figure 1. Governance framework overview
THE BOARD
Ultimately responsible for climate change strategy. Retains an oversight role and receives
regular reports. Considers climate-related risks and opportunities when making strategic
decisions.
Bottom-up risk management
Top-down risk management
GROUP SUPPORT FUNCTIONS
Support the Group Product Lines.
Each functional team reports
to or is led by a member of the
Executive Committee.
GROUP DIVISIONS
All manage their own risk register
and report on principal risks and
mitigating activities to the Risk
Committee.
INTERNAL
AUDIT
FUNCTION
Conducts
audit
assurance
for all risks
including
climate-
related risks.
EXECUTIVE
COMMITTEE
Support
Executive
Directors in
the exercise
of delegated
authority,
including risk
management.
RISK
COMMITTEE
Meets
periodically,
intended to
review risks
including
climate-
related risks.
SUSTAINABILITY
COMMITTEE
Meets on
a quarterly
basis,
monitors
and reports
on climate-
related risks/
opportunities.
AUDIT COMMITTEE
Monitors effectiveness of
Company’s risk management
controls.
CHIEF EXECUTIVE OFFICER
Delegates day-to-day
responsibility for climate change
strategy.
Key
Board elected
committee/office
CEO chaired committee Operations and functions
The Board delegates day-to-day responsibility
for the climate strategy, including identifying
and managing climate-related risks and
opportunities, to the Group CEO but is
kept informed of climate-related issues via
management structures including the Risk
Committee and the Sustainability Committee.
Other committees have climate-related
responsibilities which are described further
in our 2023 Annual Sustainability Report.
A summary of this governance structure is
provided in Figure 1 above.
Risk Committee
Responsibility for identifying, assessing and
managing climate-related risks principally
sits with the Risk Committee, but it is the
responsibility of each functional head of their
respective Product Lines to report on their
risk registers, which include climate-related
matters.
Climate change is considered a principal
risk by the Group and therefore is regularly
discussed by the Risk Committee in
conjunction with all other principal risks. Any
key issues raised via the Committee meetings
are discussed at meetings of the Board.
Sustainability Committee
The Sustainability Committee is a sub-
committee of the Executive Committee,
which meets quarterly. Mandated to assist
the CEO in recommending to the Board the
Group’s Sustainability Strategy, including its
climate strategy, the Sustainability Committee
manages the roadmap of key milestones and
is responsible, along with input from Group
Product Lines, for driving the strategy across
the Group and monitoring its sustainability
performance. This includes supporting the
Board in fulfilling its oversight responsibilities
concerning ESG matters.
For more information, see sustainability
report governance section pages 45 to 49
41
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
b) a description of how the company or
LLP identifies, assesses, and manages
climate-related risks and opportunities;
The Group employs a bottom-up and top-
down approach to identifying, assessing, and
managing climate risks. In 2022 the Group
employed a scenario analysis approach to
climate risk management for the first time and
we are currently in the process of integrating
this method into our risk management process.
Bottom-up approach
• Product Lines conduct quarterly business
reviews which provide a forum to discuss and
report changing risks and mitigation options.
Any changes are then communicated to the
Risk Committee through Divisional reports.
• Product Lines conduct an annual risk
evaluation process to identify the significant
operational and financial risks facing the
business (including climate-related risks).
Each Product Line maintains an up-to-date
risk register, which identifies key risks.
Key risks are identified based on an impact
score (1-5) being multiplied by a likelihood
score (1-5). This is assessed pre- and post-
mitigation, based on the planned controls
to be implemented and the effectiveness
of these controls. The Product Lines use a
range of inputs to assess these scores such
as industry data, market intelligence and
historical data, but ultimately, they are based
on a management judgement of risk to the
business.
• Heads of Divisions complete an internal
control and risk management review
questionnaire on an annual basis. This
exercise is a robust self-assessment of
operational controls and compliance
with Group policies, applicable laws and
regulations relating to their business. This
ensures that Heads of Divisions identify risks
and relevant mitigating strategies, and have
in place adequate control systems to identify,
mitigate, and report any weaknesses that
require management attention.
• Assurance is provided by Internal Audit on a
risk-based approach. Detailed risk registers
are maintained by the Divisions and top risks
are periodically reviewed and updated by the
Executive Committee.
Top-down approach
• The Risk Committee overlays the Product
Line risks (provided by their registers and
questionnaire responses) with any macro
external issues which are impacting or may
impact the Group. Through this exercise,
which is undertaken periodically, the
Committee can determine the potential size,
scope, and materiality of climate-related risks
to the Group, and make recommendations
on whether to mitigate, transfer, accept or
control those risks.
• The risk registers are reviewed by Internal
Audit as part of the business-as-usual audits,
the Risk Committee and the Board. They
are used by the Board to help determine the
Group’s principal and emerging risks and
uncertainties, their potential impacts, how
they are being managed and/or mitigated,
and any change in the nature of the risk.
Internal Audit uses them to define its areas
of focus for the forthcoming period. At most
scheduled Board meetings, there is an
in-depth assessment of at least one of the
Group’s principal risks and, twice annually,
the Board reviews the Group’s principal and
emerging risks, their mitigating activities, any
changes and the Company's risk appetite.
• The Risk Committee and Executive Directors
report the results of this bottom-up and
top-down approach to the Board and Audit
Committee.
For more information, see sustainability
report risk management section, pages
58 to 61
c) a description of how processes for
identifying, assessing, and managing
climate-related risks are integrated into
the overall risk management process in
the company or LLP;
Climate change risk management is
incorporated into Group-wide risk processes
as opposed to being identified, assessed and
managed as part of a separate, climate-specific
process. The approach for the identification,
assessment and management of these issues
is described above.
The Group realigned its risk management
process with its strategic review cycle so that
risks, including climate-related issues, are
considered alongside the Group’s strategic
review. This change in the risk reviewing
schedule has helped include climate-related
issues as part of the central risk management
process. This is important as it further
integrates climate and the energy transition into
the Group's central strategy discussions and
procedures.
This shift in procedure allows each Division to
review and present to the Board its strategy
over five years and enables the Product Lines
to build their principal and emerging risks (and
opportunities), including those climate-related,
into their strategic outlook at an operating level.
For more information, see sustainability
report risk management section, pages
58 to 61
d) a description of:
(i) the principal climate-related risks and
opportunities arising in connection with
the operations of the company or LLP;
The outcomes from the climate risk and
opportunity assessment led to the identification
of several different climate-related risks and
opportunities. The most significant risks and
opportunities are stated below, and further
information on the approach and results of our
climate scenario analysis can be found in our
sustainability report pages 52 to 54 and 61.
Physical risks and opportunities – Acute
and Chronic: Marine and coastal operations
are globally distributed (e.g. North Sea,
Mediterranean, Middle East, Caribbean, Indian
Ocean, and Eastern Pacific) and physical
climate-related hazards will vary by location
(e.g. tropical, and extratropical storms, sea-
level rise and storm surges, wave climate,
and heat stress). Whilst we have not yet
experienced any climate-related incidents to
date, in the medium- to long-term time frames
(1-5+ years), the frequency and severity of
climate hazards may change this. Additionally,
there may be opportunities for James Fisher
to become a specialist in providing operations
and services in extreme conditions.
Transition risks and opportunities – Policy
& Legal: Sustainability and climate-related
regulations are already present in key markets
for the Group and uptake of legislation is
expected to continue to grow. The changing
regulatory landscape is likely to present new
and evolving risks such as more stringent
regulations to follow or increases in litigation
cases for environmental negligence. We expect
the impacts from these risks to manifest in the
medium- to long-term (1-5+ years). However,
there may also be co-benefits to compliance
such as, developing high quality approaches
as climate strategies become increasingly
important to stakeholders and investors.
Transition risks and opportunities –
Technology: Improvements in renewable
energy technologies are expected to contribute
to the growth of renewables in the global
energy mix.
SUSTAINABILITY CONT. FOCUS AREAS CONT.
42
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
James Fisher acknowledges that early
engagement in the global energy transition is
needed to recognise the potential opportunities
for energy efficiencies and new low-carbon
services. The extent of global action taken
to mitigate climate change in the medium-
to long-term will determine how large an
opportunity this will be. Delaying investment
in these areas could see competitors surpass
James Fisher and be rewarded as early
movers. Consequently, companies that
transition early are set to benefit from access
to capital, cost-saving efficiencies, and revenue
growth from new and expanding service lines.
Transition risks and opportunities – Market:
The Divisions and Product Lines have varying
exposure to market-related transition risks.
The level of risk exposure is also dependent
on external, macroeconomic factors, such
as changing oil and gas prices, supply, and
demand. We expect in the medium- to long-
term (1-5+ years) these factors will play an
increasingly disruptive role in JFS operations.
However, JFS is protected to an extent due
to the breadth of service offerings across the
Group and by the Group’s ability to support
clients in volatile oil and gas markets. Further
opportunities may be available from extending
into new and growing market opportunities.
Transition risks and opportunities – Reputation:
Customers and investors have already shown
a growing interest in working with companies
with robust sustainability and climate-
related strategies that align with national and
international standards. We expect the impact
of these trends may likely materialise over the
medium- to long-term (1-5+ years). However, it
is still important to maintain a strong tendering
position through a positive brand reputation
and robust and realistic sustainability and
climate strategies.
(ii) the time periods by reference to
which those risks and opportunities are
assessed;
James Fisher’s qualitative and quantitative
climate scenario analysis uses a short-term
period of 0-1 year, a medium-term period
of 1-5 years, and a long-term period, of
over 5 years (up to 2050). The selected
time horizons are aligned with the Group’s
risk management framework to ensure
consistency and to facilitate the integration of
findings within wider business and strategic
planning. For the quantitative assessment,
our analysis goes out to 2050 for the long-
term period. This ensures we account for
the increase in potential climate issues which
are expected to materialise over longer time
periods than other business risks.
e) a description of the actual and
potential impacts of the principal
climate-related risks and opportunities
on the business model and strategy
of the company or LLP;
Part of James Fisher’s services is to provide
coastal operations, this includes operating
on ports and ships. An increase in extreme
weather events may present greater exposure
to climate-related hazards, such as storm
surges, intense storms, and rogue waves.
These incidents increase the risk of impacting
our facilities and vessels causing a disruption
or halt to our services. As an example of
a mitigation response, James Fisher has
designed extreme weather protocols that
are maintained and regularly updated by
the Maritime Transport Division, helping
to ensure continued safe operation in
changing climates.
James Fisher operates in different sectors
within the energy industry, namely both oil
and gas and renewables. Sustainability and
climate-related regulations are already highly
present in these markets and will continue
to be a dynamic landscape in the future.
Regulatory pressure on carbon-intensive
industries is an important risk to monitor as
it poses a risk of direct and indirect increases
to our costs if left unchecked.
Additionally, depending on how much climate
action is taken globally, energy and fuel prices
may become more volatile as market instability
increases through a divergence away from fossil
fuels. This poses a risk to our revenue if we do
not take early action to diversify our services.
As an example of a mitigation response and an
inverse risk opportunity, James Fisher is actively
enhancing business segments in new and
growing markets, such as renewables service
lines and continuing the growth and expansion
of JF Renewables and associated service lines
through current technologies, such as offshore
wind, and new technologies such as carbon
capture and hydrogen.
The cost of carbon is a potential material
climate risk, particularly over the medium-
and long-term. Carbon pricing mechanisms
are more likely to materialise in Orderly (i.e.
a gradual ramp up) and Disorderly (i.e.
delayed yet aggressive) Transition scenarios.
Existing carbon pricing mechanisms (e.g. the
UK Emissions Trading Scheme (UK ETS)) do
not yet apply to the activities of the Group,
despite the UK ETS’s extension to cover
domestic shipping as of 2026. However, the
Group may (partially or wholly) come under
carbon pricing mechanisms in the future due to
its diverse range of sectors and geographies.
As a result the Group is and will continue
to monitor changes in regulation and is
motivated to decarbonise where possible.
For more information, see Sustainability
report page 56
f) an analysis of the resilience of the
business model and strategy of the
Company or LLP, taking into consideration
of different climate-related scenarios;
Climate change is an important consideration
in defining the strategic direction of our
business. To this end, we conducted a
detailed scenario analysis exercise in 2022
with support from SLR Consulting, ESG
consultants.
Climate scenarios and projections were
used to inform both the qualitative and
quantitative scenario analysis processes.
For the qualitative assessment we used
data from globally authoritative datasets
and climate models sourced in 2022* (e.g.
the IPCC WGI Interactive Atlas, the World
Bank Group Climate Change Knowledge
Portal, the NGFS IIASA Scenario Explorer)
to inform our analysis. For the quantitative,
we sourced climate projections from the
suite of climate scenarios defined by the
Network for Greening the Financial System
(NGFS) as this database had the relevant
and available information required for our
analysis. All climate scenarios considered
are commonly used as a starting point for
analysing climate risks and were used to align
the scenario analysis with best practice. We
have not deviated from the assumptions, or
methodologies underpinning these climate
scenario categories.
To ensure our assessment was
comprehensive and provided insights into
various potential climate eventualities, our
methodology included three climate scenarios
each with varying levels of projected global
warming. These are:
(1) Orderly transition (1.4–1.6ºC) – global
warming limited to 1.5ºC through stringent
climate policies and innovation, reaching
global net zero CO
2
e emissions around 2050.
Assumes climate policies are introduced early
and gradually become more stringent. Both
physical and transition risks are relatively
subdued.
* Source: https://interactive-atlas.ipcc.ch/, https://
climateknowledgeportal.worldbank.org/, https://data.ene.
iiasa.ac.at/ngfs//#/login?redirect=%2Fworkspaces.
43
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
SUSTAINABILITY CONT. FOCUS AREAS CONT.
(2) Disorderly transition (1.7–1.8ºC) – annual
emissions do not decrease until 2030. Strong
policies are needed to limit warming to below
2ºC. Negative emissions are limited. Assumes
policies are delayed or divergent across
countries and sectors.
(3) Hot house world (2.9º+C) – assumes
that only current implemented policies
are preserved and that globally efforts are
insufficient to halt significant global warming,
leading to high physical risks.
The future may present a variety of outcomes
that will impact our business differently e.g.
under lower warming scenarios regulation and
energy price stability will be the main concern,
whilst under higher warming scenarios our
exposure to service disruption by physical
climate hazards will increase. Assessing across
a range of indicators ensures the outcomes
cover the spectrum of potential impacts. Our
qualitative and quantitative scenario analysis
will be refreshed every three years, as per UK
guidance, to ensure that risks are continually
assessed, and scenario analysis results are
sufficiently up to date.
The Group currently considers itself, through
the scenario analysis output, resilient to the
risks posed by climate change. This is because
our Product Lines provide a range of services
that are crucial to a low-carbon transition. As
a business we are prepared to help facilitate
both disorderly and orderly transitions through
our services in supporting the growth of the
renewable energy sector (e.g. offshore wind
power), the responsible decommissioning
of redundant oil and gas assets, and the
maintenance and repair of assets that are
exposed to extreme climate conditions.
Our operations and safety controls already
in place mean that we do not face significant
disruption from physical climate hazards and
are expected to be resilient to potential future
increases in a Hot House World scenario
where physical risk is most extreme.
For more information, see Sustainability
report pages 50 and 56
g) a description of the targets used by
the company or LLPs to manage climate-
related risks and to realise climate-related
opportunities and of performance against
those targets;
The Group has committed to reducing its
Scope 1 and Scope 2 GHG emissions,
following an absolute contraction approach,
targetting a reduction of 16.8 percent by
2025 and 37.8 percent by 2030, from
2021 levels. This target is to help reduce
pressures from the principal transition risks
we identified, such as the policy risks involved
with regulatory costs and reputation risks
that could damage the business. We intend
to review the feasibility of setting Scope 3
targets in the future. We are continuing to
use the SBTi Standard to ensure the Group
is abiding by well-established guidance
principles.
Additionally, the Group has committed to
increasing the proportion of revenue from
low-carbon aligned activities, which are
less exposed to risk from climate-related
regulations and reduce the risk of high carbon
costs. This aligns with the Group's intention
to diversify its operations in line with its
Sustainability Strategy.
For more information, see Sustainability
report pages 62 to 72
View progress against targets below, a
detailed breakdown can be found in the
SECR report within the Directors report
h) the key performance indicators used
to assess progress against targets used
to manage climate-related risks and
realise climate-related opportunities and
a description of the calculations on which
those key performance indicators are
based;
To monitor the Group’s performance against its
emission reduction target and in accordance
with the UK’s Streamlined Energy and Carbon
Reporting regime, James Fisher is reporting
its absolute Scope 1 and Scope 2 emissions
(tCO
2
e) each year. This provides insight into
what emission reductions have been achieved
on an annual basis. Additionally, to help monitor
the Group's performance year-on-year we use
emission intensity metrics relative to employees
(FTE) and revenue (£m).
To help monitor the Group’s energy transition
strategy and track the opportunities
associated with a growing renewable
energy market, James Fisher is reporting
the proportion of revenue from low-carbon
activities (£m) on an annual basis.
Please see Annual Report non-financial Key
Performance Indicators section for more
information on metrics stated above.
Further details can be found within our
2023 TCFD Report included in our Annual
Sustainability Report, Annex A
PROGRESS AGAINST TARGETS – SCOPE 1 AND SCOPE 2
CARBON EMISSIONS ( CO
2
)
Key
1.5
o
C target
BAU pathway
BAU reduction pathway
120,000
100,000
80,000
60,000
40,000
20,000
0
2021 2022 2023 2025 2030 2040 2050
Baseline
Current Scope 1 and Scope 2 pathway
44
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Source: https://www.fsb-tcfd.org/recommendations/ last consulted 4 September 2023.
Climate change is an important consideration in defining the strategic direction of our businesses. To this end, we have conducted a detailed
scenario-analysis exercise aligned to the TCFD recommendations with support from SLR Consulting, an external specialist consultancy.
We have begun incorporating scenario-analysis into our risk management processes. This is beneficial in assessing the potential size of risks
(through a risk score) and the potential scope of those risks (through projecting that risk score across time horizons and climate scenarios).
TCFD RECOMMENDED DISCLOSURES
As described on page 41, the Group has chosen to publish its TCFD-consistent disclosures in its Annual Sustainability Report, which is available
online at www.james-fisher.com/investors/financial-information/reports-accounts-and-presentations/.
The following cross-reference table indicates where the Group's disclosures against each of the TCFD's recommended disclosures can be found
within the Annual Sustainability Report.
GOVERNANCE
Disclose the organisation’s
governance around climate-
related risks and opportunities.
a) Describe the Board’s oversight
of climate-related risks and
opportunities.
Status: Disclosed
Page 45
b) Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
Status: Disclosed
Pages 45 to 49
STRATEGY
Disclose the actual and potential
impacts of climate-related
risks and opportunities on the
organisation’s businesses,
strategy, and financial planning
where such information is
material.
a) Describe the climate-related
risks and opportunities the
organisation has identified
over the short-, medium- and
long-term.
Status: Disclosed
Pages 52 to 54, 57 and 61
b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial
planning.
Status: Disclosed
Pages 55 to 56
c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower
scenario.
Status: Disclosed
Pages 50 and 56
RISK MANAGEMENT
Disclose how the organisation
identifies, assesses, and
manages climate-related risks.
a) Describe the organisation’s
processes for identifying and
assessing climate-related
risks.
Status: Disclosed
Pages 58 to 60
b) Describe the organisation’s
processes for managing climate-
related risks.
Status: Disclosed
Pages 45 to 48
c) Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
Status: Disclosed
Pages 51 and 59
METRICS AND TARGETS
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where such
information is material.
a) Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.
Status: Disclosed
Pages 62 and 67
b) Disclose Scope 1, Scope 2
and, if appropriate, Scope
3 greenhouse gas (GHG)
emissions and the related
risks.
Status: Scope 1 and Scope 2
emissions disclosed. Scope
3 emissions categories 3, 5,
6, 7 and 8 are disclosed. The
remaining material categories
are being calculated across
2024 and 2025.
Pages 62 to 65
c) Describe the targets used by the
organisation to manage climate-
related risks and opportunities
and performance against
targets.
Status: Scope 1 and Scope
2 climate targets disclosed.
Scope 3 targets are in process
and are intended to be set once
the Group fully understands
its Scope 3 footprint, which is
expected to be end of 2025.
Pages 65 to 66 and 72
45
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
HIGHLIGHTS
INNOVATION
CUSTOMERS AND SUPPLIERS
GOVERNANCE
At James Fisher
our culture of
shared success
means that
we seek out
collaborations
with customers,
suppliers, and
other industry
players that align
with our values and
contribute to our
shared vision for a
sustainable future.
By working closely with our
customers and suppliers,
to fully understand the
requirements and challenges
faced, we are able to draw on
our specialist skills to create
bespoke solutions that solve
complex industry challenges.
PARTNERSHIPS
PVI (PRODUCT VITALITY INDEX)
TRACKING IMPLEMENTED
REVISED NEW PRODUCT
DEVELOPMENT PROCESS
TO BE IMPLEMENTED
ACROSS THE GROUP
PARTNERING WITH LOCAL
SUPPLIERS
PLANNING UNDERWAY TO STANDARDISE PPE
PROCUREMENT
NEW TRAVEL SUPPORT PROVIDER APPOINTED
SUPPORTING TRAVELLER WELLBEING AND
SUSTAINABLE TRAVEL HABITS
SUSTAINABILITY POLICY
IMPLEMENTED BY THE GROUP
NEW DOCUMENT CONTROL
INTRANET SITE DEVELOPED
COMPREHENSIVE UPDATE TO
EXISTING INTERNAL MANDATED
POLICIES AND RELATED
DOCUMENTS IN PROGRESS
PREPARING FOR SUPPLIER
CODE OF CONDUCT ROLL OUT
HEAD OF GROUP ETHICS AND
COMPLIANCE APPOINTED
NEW GROUP SANCTIONS
SCREENING PROCEDURE
FOR CUSTOMERS AND SUPPLIERS IN
DEVELOPMENT
SUSTAINABILITY CONT. FOCUS AREAS CONT.
KEY CLIENT ENGAGEMENTS
RESULTED IN SERVICE
INNOVATION COLLABORATIONS
NEW CUSTOMER FEEDBACK
APPROACH IN PROGRESS
AND CRM SYSTEMS AND PROCESSES
UNDERGOING STANDARDISATION
46
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
BUILDING THE TANKER FLEET OF THE FUTURE
We have delivered the second chemical tanker in our fleet
of the future, Lady Maria Fisher. In a strong example of
bringing together our three sustainability pillars – People,
Planet and Partnerships – her naming ceremony was
attended by colleagues, customers, local delegates and
our partners at China Merchants Jinling Shipyard, all of
whom contributed to her safe and timely delivery.
Bringing together our three sustainability
pillars – People, Planet and Partnerships
– the naming ceremony of our second dual-
fuel LNG vessel, Lady Maria Fisher (LMF),
was attended by colleagues, customers,
local delegates and our partners at China
Merchants Jinling Shipyard, without whom
her delivery would not have been possible.
Partnerships
Combining the strengths of our people,
suppliers and customers, the introduction
of LMF and her sister vessel, Sir John Fisher
(SJF) in 2022 marks the next step for
James Fisher in building the tanker fleet
of the future.
Specially designed to navigate the restricted
access ports of Northern Europe, both
vessels have allowed us to continue
servicing our existing long-term customers
in the region. One such example is our
contract with P66, which we have held in
various forms for over 30 years and continue
to service through these new vessels.
The delivery of both vessels could not
have been achieved without the close
collaboration between our highly capable
project team and China Merchants Jinling
Shipyard (CMJL), who will continue to play
a pivotal role in building our tanker fleet of
the future.
Despite the challenges presented by
COVID-19, both state-of-the-art vessels
were delivered on time, safely and within
budget, with LMF even arriving three weeks
early – an excellent achievement for all
involved.
Planet
With dual-fuel engines capable of running
on liquefied natural gas (LNG), both vessels
boast enhanced hydrodynamic performance
and improved efficiency resulting in reduced
GHG emissions and improved local air quality.
Such features are designed to help us to
achieve our own net zero targets and help our
customers meet their sustainability goals.
People
In January 2024 LMF was welcomed to
the Port of Sunderland for her naming
ceremony, which was performed by James
Fisher Tankships’ Finance Manager Debbie
Smith, whose 23-year history with James
Fisher made her the ideal candidate to fulfil
the role of vessel Godmother.
Furthermore, in recognition of the integral
role our seafarers play in delivering safe
and efficient shipping operations, Head
of Maritime Transport Krystyna Tsochlas
presented both the Captain and Chief
Engineer of LMF with cufflinks to cap-off
the event. Our seafarers’ commitment to
safety and efficiency is testament to the
Sustainability Strategy in action.
With over 175 years of rich history
in maritime operations, we’re ideally
positioned to introduce new and
innovative solutions for a more
sustainable future – and these vessels
are no different. Our continued
investment in developing the fleet of
the future signals James Fisher’s firm
Company commitment to reducing
emissions and meeting the needs
of a low-carbon future.
Jean Vernet
Chief Executive Officer
The official naming of
the Lady Maria Fisher
stands as a testament
to the dedication and
collaboration of our
fantastic colleagues
and industry partners.
This journey has
not been without its
challenges, including
the construction
and commissioning
delivered safely
throughout the
COVID-19 pandemic.
We have rallied
together, demonstrating
resilience and
perseverance, which
we can all celebrate in
today’s ceremony.
Krystyna Tsochlas
Head of Maritime Transport
47
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Lost Time Incident Frequency (LTIF)*
0.98
* LTIF = (Number of lost time injuries x 1,000,000)/(Total hours worked).
Base year
2021
Baseline
2.6
2024
Hours spent supporting local communities*
2,076
2024 75%
2023 68%
2022 66%
* Total hours spent based on two hours per employee headcount.
Base year
2022
Baseline
66%
% Voluntary attrition
14%
2024 12%
2023 14%
2022 18%
Base year
2022
Baseline
18%
Total Recordable Case Frequency (TRCF)*
3.30
2024 2.09
2023 3.30
2022 2.65
* TRCF = (Fatality + Lost Time Injury + Restricted Work Day Case + Medical
Treatment Case) x 1,000,000)/(Hours worked).
Base year
2021
Baseline
7.4
Employee Engagement Score (grand mean)
3.86
2024 3.95
2023 3.86
2022 3.84
Base year
2021
Baseline
3.6
Key
Target
2023
2022
Through our nine focus areas we are
advancing action in the areas which are
significant to our stakeholders. We continue
to build and refine the key metrics and KPIs
upon which we will focus disclosure across
our principal ESG areas.
2023
0.98
2022
0.51
NON-FINANCIAL KPIs
0.44
48
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Scope 1 and Scope 2 emissions (tCO
2
e)
74,707
2025* 70,479
2023 74,707
2022** 74,605
* Net zero interim target year. Refer to our TCFD report/Annual Sustainability Report Annex A
for further details.
** Reduction due to overall decrease in commercial activities throughout our vessels fleet
during the reporting period.
Base year
2021
Baseline
84,711
49
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
FINANCIAL REVIEW
A summary of the Group’s performance from continuing
operations is set out below.
Reported results from continuing
operations
The Group generated revenue of £496.2m
in 2023, an increase of 3.8% compared to
£478.1m in 2022. The Energy and Defence
Divisions showed growth against 2022, with
Energy up 9.9% (2023: £266.5m; 2022:
£242.6m) and Defence up 6.3% (2023: £72.5m;
2022: £68.2m). Maritime Transport revenue
was down by 6.0% (2023: £157.2m; 2022:
£167.3m) driven by a proactive decision to exit
some lower margin contracts.
Gross margin was 27.4% similar to the 26.6%
achieved in 2022.
The Group made an operating loss of £18.6m
in 2023, an adverse movement of £43.3m
compared to the £24.7m operating profit in
2022, reflecting net adjusting items of £48.2m
(2022: £1.7m), offset by stronger underlying
business performance. The adjusting items
include an impairment of goodwill of £28.0m
which is discussed below.
Loss before tax was £39.9m (2022: £14.5m
profit). The decrease in profit before tax
was driven by the statutory operating profit
performance described above as well as a
£11.1m increase in net finance expense. The
increase in net finance expense was the result of
increased interest rates and higher amortisation
of financing fees arising from the refinancing
undertaken in 2023, together with an estimate
of deferred fees that would arise on exiting
the facility. There was also an increase due to
unwinding of discount on lease liabilities due to
the Group entering into and extending a number
of vessel and office leases in the year.
Loss per share from continuing activities was
101.2 pence compared to 17.4 pence earnings
in 2022, reflecting the reduced operating profit
performance and increased adjusting items.
Underlying operating results from
continuing operations – See Table 2
Underlying operating profit improved by
12.1% to £29.6m (2022: £26.4m). Each
Division delivered growth in both underlying
operating profit and margin. The Group’s
overall underlying operating profit margin
improved by 50 bps, from 5.5% in 2022 to
6.0% in 2023 even though the improved
trading performance was delivered alongside
the necessary investments the Group has
made in strategic initiatives, including the
establishment of the Business Excellence
workstream and projects to strengthen
internal controls and hiring for key senior
management roles. Included in the underlying
operating profit, are £3.8m losses generated
by Subtech Europe, whose operations ceased
in December 2023.
1. The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) performance measures
(APMs) which are not defined within IFRS. The APMs should be considered in addition to and not as a substitute for or
superior to the information presented in accordance with IFRS, as APMs may not be directly comparable with similar
measures used by other companies. The APMs are described more fully and reconciled to GAAP performance measures
in Note 2 of the financial statements.
TABLE 1:
Continuing operations
Underlying results
1
Year ended 31 December
Reported results
Year ended 31 December
2023 2022 Change 2023 2022 Change
Revenue (£m) 496.2 478.1 3.8% 496.2 478.1 3.8%
Operating profit/(loss) (£m) 29.6 26.4 12.1% (18.6) 24.7 n/m
Profit/(loss) before tax (£m) 8.3 16.2 (48.8)% (39.9) 14.5 n/m
Profit/(loss) for the year (£m) 2.3 11.5 (80.0)% (50.9) 9.0 n/m
Operating margin 6.0% 5.5% 50 bps (3.7%) 5.2% (890) bps
Return on capital employed 6.6% 5.3% 130 bps
Net debt – covenant basis 149.8 142.1 5.4%
Earnings/(loss) per share 11.4 22.3 (48.9)% (101.2) 17.4 n/m
TABLE 2: UNDERLYING OPERATING RESULTS FROM CONTINUING
OPERATIONS
Reconciliation of underlying operating profit to
operating profit (continuing)
Year ended 31 December
2023
£m
2022
£m
Underlying operating profit (continuing) 29.6 26.4
Amortisation of acquired intangible assets (1.1) (2.1)
Impairment charges (28.1) (0.7)
Refinancing costs (12.2) –
Specific trade receivables provision – 1.1
Restructuring costs (5.7) (1.7)
Disposal of businesses and assets 1.7 3.4
Other (2.8) (1.7)
Operating profit (continuing) (18.6) 24.7
50
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
The adjusting items for 2023 amounted
to £48.2m with the largest adjustments
related to £28.1m impairment charges and
reversals, largely on goodwill balances,
£12.2m costs associated with the new
RCF and £5.7m restructuring costs. Of the
goodwill impairment charge, £25.0m was
recognised in relation to the Defence Division.
Whilst the Division’s performance improved in
comparison to 2022, its contract win rate was
not as strong as expected due to delays in
customer procurement processes. In arriving
at the value of goodwill impairment, we built
in the risks associated with the potential
delays and cancellations of future projects
into cash forecasts. This, combined with a
higher discount rate, led to the recognition of
the impairment. However, the Division retains
a solid pipeline, and a positive outlook for
the business over the medium-term remains
unchanged.
Full year operating performance
by Division
As announced in April 2023, effective from
1 January 2023 the Group has reorganised
into three divisions, representing the key
markets within which the Group operates,
namely Energy, Defence, and Maritime
Transport. The Energy Division combines
the Divisions that used to be called Marine
Support and Offshore Oil, without Fendercare,
which is added to the Tankships Division to
create Maritime Transport. JFD is the only
component of the Defence Division and was
previously reported in the Specialist Technical
Division.
Energy – See Table 5
Robust performance with strong demand
in Well Testing and Bubble Curtain and
Artificial Lift
The Energy Division provides products and
services to the offshore wind and oil and
gas markets, and mainly comprises of the
Well Testing and Bubble Curtain (Scantech),
Artificial Lift (RMSpumptools), Inspection
Repair and Maintenance (JF Subtech),
Offshore Wind (JF Renewables) and JF
Decommissioning Product Lines.
The Energy Division delivered revenue growth
of 9.9% from £242.6m in 2022 to £266.5m,
with good performances across the majority
of the Product Lines. Revenue growth is 17%
if adjusted for disposed business in 2022.
Well Testing, Bubble Curtain and Artificial Lift,
in particular, achieved strong growth with the
supportive demand conditions.
TABLE 3: SUMMARY OF UNDERLYING OPERATING RESULTS FROM
CONTINUING OPERATIONS
Revenue (continuing)
Year ended 31 December
2023
£m
2022
£m
Change
%
Energy 266.5 242.6 9.9
Defence 72.5 68.2 6.3
Maritime Transport 157.2 167.3 (6.0)
Revenue (continuing) 496.2 478.1 3.8
TABLE 4:
Underlying operating profit/
(loss) (continuing) Year ended 31 December
2023
£m
2022
£m
Change
%
Energy 15.7 13.9 12.9
Defence 1.5 (0.4) n/m
Maritime Transport 23.3 18.8 23.9
Corporate (10.9) (5.9) (84.7)
Underlying operating profit 29.6 26.4 12.1
Underlying operating profit growth for the
Division was 12.9%, which included a £3.8m
loss generated by Subtech Europe, whose
operations ceased in December 2023.
Subtech Europe had been incurring losses
over a number of years due to increased
competition and a North Sea market that was
both seasonal and required the supply of a
vessel and services on a demand basis. This
gave rise to a higher risk model and periods
of lower utilisation which generated losses.
Well Testing and Bubble Curtain revenue,
which includes solutions in Taiwan and
USA, increased by 26.8% to £58.2m (2022:
£45.9m). This increase was driven by
sustained demand for well-testing services,
with a strong market backdrop and quick
deployment of the Group’s new fleet of more
efficient air compressors onto bubble curtain
projects on the US East Coast.
Artificial Lift product sales increased by 27.2%
to £42.5m (2022: £33.4m), a new record
high, continuing the strong market trend
seen in the first half of 2023. In March 2024,
the Group announced the conditional sale
of RMSpumptools for an enterprise value
of £90m, with the business set to exit the
Division at completion during the second half
of 2024.
Inspection, Repair and Maintenance showed
strong revenue growth, from £98.8m in 2022
to £107.6m, with growth in the Brazil and
Middle East markets.
The business performed well in the Middle
East due to strong utilisation and day rates
earned from Swordfish, which was leased
back after it was sold in January 2023.
The lease has now finished, and the vessel
returned to the owner. However, the business
experienced operating losses in South Africa
and in Europe, which led to the decision to
close Subtech Europe.
Offshore Wind delivered strong revenue
growth of £29.5m over a weak comparative
period (2022: £15.7m) and achieved a
near break-even position compared to an
operating loss in 2022. The market was up
from 2023 to 2022 and is forecast to be
relatively flat in 2024. The Group continues to
believe that its strong offerings of products
and services into this market will deliver
profitable growth in the future.
Continuing volatility in the market led to
our Decommissioning business having a
disappointing year, with a decrease in revenue
of 18.7% to £22.2m (2022: £27.3m). The
decommissioning markets remain challenging
with the business experiencing volatility in
demand during 2023. The business has a
new management team in place who are
focused on new contract wins, strong project
management and margin delivery.
The medium-term market growth drivers
for this business remain attractive.
51
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Defence – See Table 6
Contract delays impacted performance-solid
growing revenue pipeline
The Defence Division provides underwater
systems and life support capabilities, for the
defence and commercial diving markets.
The main capabilities are submarine rescue,
defence diving, special operations vehicles,
submarine systems, and commercial diving
and hyperbaric systems.
The Defence Division delivered revenue
growth of 6.3%, increasing from £68.2m
to £72.5m in 2023, and reversed a prior
year underlying operating loss of £0.4m
to deliver an underlying operating profit of
£1.5m in 2023. This increased revenue was
predominantly due to delivery of additional
services to existing defence customers and a
strong performance for our commercial diving
and hyperbaric systems, linked to a recovery
in the energy sector. This is consistent with
higher levels of activity seen in the Energy
Division’s diving activities.
Activity in the period focused on service and
training contracts in India and South Korea
with good progress, and the renewed NATO
submarine rescue contract secured at the end
of 2022, which went live in July 2023. Some
projects were negatively impacted by client
dependencies and government approvals
that were outside our control, which led to
increased cost and schedule impacts. We
anticipate completing these projects in 2024
within our revised cost estimates.
Overall, while the defence market is
buoyant and JFD’s performance improved
in comparison to 2022, the Division did
not secure some of the projects that were
anticipated in 2023, due to delays in
government procurement processes. The
Division is focused on securing new contract
wins and converting its significant sales
pipeline in 2024, as customers around the
world are prioritising undersea defence and
energy security. While the defence market
has inherently long and often uncertain
procurement timelines, the geo-political
environment is leading to a change in
customer behaviour, with more urgency being
placed on procurement of critical undersea
capabilities. We are investing in our long-term
growth through an established new product
development portfolio, which will bring some
exciting next generation products to market.
The forward order book on 31 December
2023 for the Division was £223m.
Maritime Transport – See Table 7
Solid performance focused on margin
improvement and portfolio rationalisation
FINANCIAL REVIEW CONT.
TABLE 5: ENERGY
Revenue (continuing)
Year ended 31 December
2023
£m
2022
£m
Change
%
Total revenue 266.5 242.6 9.9%
Underlying operating profit (£m) 15.7 13.9 12.9%
Underlying operating profit margin 5.9% 5.7% 20 bps
Return on capital employed 9.3% 8.0% 130 bps
TABLE 7: MARITIME TRANSPORT
Revenue (continuing)
Year ended 31 December
2023
£m
2022
£m
Change
%
Revenue
JF Tankships (incl. Cattedown) 76.1 78.9 (3.5)
JF Fendercare (incl. Martek) 81.1 88.4 (8.3)
Total revenue 157.2 167.3 (6.0)
Underlying operating profit (£m) 23.3 18.8 23.9%
Underlying operating profit margin 14.8% 11.2% 360 bps
Return on capital employed 30.3% 22.5% 780 bps
TABLE 6: DEFENCE
Revenue (continuing)
Year ended 31 December
2023
£m
2022
£m
Change
%
Total revenue 72.5 68.2 6.3
Underlying operating profit/(loss) (£m) 1.5 (0.4) n/m
Underlying operating profit margin 2.1% (0.6)% 270 bps
Return on capital employed 2.1% (0.4)% 250 bps
52
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
The Maritime Transport Division comprises
the Tankship business, Cattedown Wharves,
JF Fendercare and Martek Marine.
The Tankships business delivered a robust
performance in the year. Revenue was
marginally down year on year, from £78.9m
to £76.1m, in part due to a reduction in fuel
costs, which on certain contracts are passed
to the charterer, but also due to the proactive
decision to exit some lower margin contracts.
However, margins were stronger due to the
improved contract rates and the spot market
rates averaging higher than in 2022. The tanker
fleet utilisation during the year was 93% (2022:
88%). This was partially offset by revenue
increase in Cattedown Wharves as a result
of inflationary increase in quay dues across
the port and increases in number of vessels
through the port year-on-year.
Fleet improvements continued, with the Lady
Maria Fisher joining the fleet during the period
and the Mersey Fisher, which had reached the
end of its commercial life, being sold. Tankships
commenced the rebuild programme for its new
fleet with contracts signed for four new vessels,
with delivery of all four vessels within 2026.
Cattedown Wharves saw an 8.1% increase
in revenue as a result of inflationary increase
in quay dues across the port and increases
in number of vessels through the port
year-on-year.
JF Fendercare experienced a £7.3m reduction
in revenue year-on-year, but its operating
profit saw a significant increase. The revenue
shortfall was mainly as a result of the decision
to exit Tanjung Pelepas, which is a port in
Malaysia, which had minimal impact on
profitability as margins were low. Fendercare
experienced strong demand in Brazil on ship-
to-ship transfers, which attract higher gross
profit margins, thereby increasing profitability
overall. Europe and Africa experienced a drop
in transfers as a result of higher stock levels
reducing demand. A fourth LNG STS kit was
purchased in the period, as at the end of 2023
we have two LNG retainers in place. Martek’s
revenue was up from 2022, however, the
change in product mix meant that the operating
margins slightly deteriorated.
Corporate
Corporate costs were £10.9m compared
to £5.9m in 2022. The increase reflects the
necessary investment the Group has made
in the business transformation programme,
including the new executive and senior
management team, strengthening of controls
and compliance environment, roll out of lean,
business and commercial excellence and other
activities.
Combined, these activities are focused on
building a foundation for growth through
stronger business performance and efficiencies
leading to margin improvement.
Discontinued operations
In the period through to its disposal on 6
March 2023 for a nominal consideration of £3,
the nuclear decommissioning business (JFN)
generated revenue of £6.7m (2022: £42.8m)
and a loss after tax of £11.4m (2022: £19.8m).
Subsequent to the sale of the business, on
9 August 2023, the Group was notified that
JFN had appointed administrators and is in
the process of being liquidated. The Group
is engaged with the administrators and
certain key customers of JFN that held Parent
Company guarantees with the intention of
mitigating potential claims against the Group
that may arise from the JFN administration.
A provision of £6.4m has been included in the
results for the year ended 31 December 2023
in relation to potential claims/settlements under
Parent Company guarantees.
Items outside underlying
operating profit – See Table 8
The Group has recognised a net operating
loss of £48.2m in relation to adjusting items,
significantly increased from £1.7m in 2022.
The £28.1m net impairment charge in 2023
relates to goodwill impairment charges of
£28.0m, largely in the Defence Division, and
further vessel and assets impairments of £2.4m
in Maritime Transport and Energy Divisions,
partially offset by a £2.2m impairment reversal
for impairments recognised in previous years.
The 2022 impairment charge of £0.7m
mainly comprises a reversal of impairment to
Swordfish Dive Support Vessel and a non-cash
goodwill impairment charge in relation to a
business in the Energy Division.
During 2023, the Group incurred £12.2m legal
and advisory costs relating to the new revolving
credit facility (RCF), refinancing strategy,
obtaining a waiver from the Group’s lenders
and completion of various requirements and
conditions of the RCF.
Restructuring costs of £5.7m in 2023 relate
to the transformation programme aimed at
simplification, rationalisation and integration
of the Group’s businesses. This also includes
£3.0m of costs associated with Subtech
Europe closure. In 2022, people and property
costs of £1.7m were incurred for restructuring
programme within the Fendercare and JFD
businesses.
Amortisation of acquired intangibles relate
to customer relationships acquired through
business combinations which are amortised
over their estimated useful economic life.
£1.1m of debts previously provided for were
collected during 2022 and we continue to
pursue other amounts, for which provisions
have been made, through legal and
commercial discussions.
Disposal of businesses and assets in 2023
largely relates to a gain of £1.4m on disposal
of a vessel in the Maritime Transport Division.
In 2022, the Group sold three businesses and
one tanker for profits on sale of £2.5m and
£0.9m, respectively.
Other includes £2.2m past service cost
recognised for the MNRPF scheme in respect
of past administrative and benefit practices.
In 2022, the Group also recognised a £1.5m
charge in relation to its share (approximately
2%) of the obligations under a defined benefit
pension fund, following a settlement in relation
to benefits payable by the scheme to past
members.
The tax charge relating to non-underlying
items is £5.0m which includes a charge of
£4.7m in relation to de-recognition of the
brought forward UK deferred tax.
Capital expenditure
Capital expenditure in the year was £28.5m
and £1.7m on development expenditure.
Capital expenditure to depreciation ratio
was 1.3 (excluding intangibles additions
and amortisation). The majority of
growth expenditure was in the Energy
Division including spend on a new fleet of
compressors to support expansion in the
“bubble curtain” Product Line.
Finance charges
The Group’s net finance charges increased by
£11.1m to £21.3m (2022: £10.2m).
Finance charges in 2023 primarily comprise
£15.8m of interest expense on loans and
overdrafts (2022: £7.4m), £2.7m for deferred
financing fees to be paid under the terms of
the new credit facilities (2022: £nil), £1.7m
of loan arrangement fees (2022: £1.0m),
including the write-off of previously capitalised
loan arrangement fees relating to the former
credit facilities and £4.0m interest expense on
lease liabilities (2022: £2.2m), partially offset
by £3.2m (2022: £0.7m) interest income on
cash balances and pensions.
The increase in interest expense on loans
and overdrafts and interest income on cash
balances was largely the result of higher
interest rates. Interest expense on lease
liabilities increased during the year mainly due
to new vessel leases and extensions made to
existing vessel and property leases.
53
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
The Group’s interest cover ratio, an alternative
performance measure which is fully described
and reconciled in Note 2 of the financial
statements, and is calculated by dividing
underlying operating profit by net finance
charges (excluding IFRS 16 finance charges),
is 2.2 times (2022: 3.5 times), which compares
to banking covenants that require the ratio to
be greater than 1.75 times (2022: 3.0 times).
Taxation
The Group has recognised an overall net tax
expense in respect of continuing operations
of £11.0m in the year (2022: £5.5m). The
increase in tax expense is primarily driven by
the de-recognition of the deferred tax asset.
The tax expense on underlying profits from
continuing operations for the year is £2.4m
(2022: £4.7m) representing an underlying
effective tax rate of 29.0% (2022: 28.4%)
which has been adjusted for £3.6m deferred
tax impacts on finance charges.
Given the volume of the cumulative UK tax
losses, which were mostly generated by the
discontinued businesses and exceptional
costs, it was decided not to recognise the
UK deferred tax asset in respect of the UK
losses incurred in the year and £4.7m brought
forward losses. The Group still has the ability
to recognise these losses in future periods
against chargeable profits.
Dividends and earnings per share
The Board has not recommended dividends
in 2023 or 2022, given the overall financial
position of the Group. The Board remains
committed to reintroducing a sustainable
dividend policy at the right time.
Basic loss per share, on a statutory basis,
increased to 123.9 pence (2022: 22.1 pence)
reflecting lower profit after tax. Underlying
earnings per share decreased to 11.4 pence
(2022: 22.3 pence) primarily due to higher
interest and tax charges in the year, partially
offset by an improvement in the underlying
operating profit.
Cash flow and borrowings – See
Table 9
The Group generated £37.8m (2022: £44.5m)
cash from operating activities, with a working
capital inflow of £6.7m (2022: £2.6m working
capital outflow). The increase in the loss for the
year was the key driver for the reduction. The
working capital inflow arose due to a reduction
in debtor days, partially offset by a reduction
in creditor days. In 2022, the Group also built
inventory to satisfy the higher demand for its
product which was not repeated in the current
year. Debtor balances continued to show some
positive progress during the year due to the
business focus on collections.
TABLE 8: ITEMS OUTSIDE UNDERLYING OPERATING PROFIT
Year ended 31 December
2023
£m
2022
£m
Impairment charges, net 28.1 0.7
Refinancing costs 12.2 –
Restructuring costs 5.7 1.7
Amortisation of acquired intangible assets 1.1 2.1
Specific trade receivables provision release – (1.1)
Gain on disposal of businesses and assets (1.7) (3.4)
Other 2.8 1.7
Total 48.2 1.7
TABLE 9: CASH FLOW AND BORROWINGS
Table A Year ended 31 December
2023
£m
2022
£m
Cash flow from operating activities 37.8 44.5
Cash flows (used in)/from investing activities (4.7) (15.8)
Cash flows used in financing activities (27.4) (40.1)
Net increase in cash and cash equivalents 5.7 (11.4)
Cash and cash equivalents at 1 January 22.8 34.5
Net foreign exchange differences (1.7) 2.5
Cash transferred to asset held for sale (0.4) (2.8)
Cash and cash equivalents at 31 December 26.4 22.8
Table B Year ended 31 December
2023
£m
2022
£m
Net borrowings 201.1 185.8
Less: right-of-use operating leases (56.9) (46.0)
Add: bonds and guarantees 5.6 2.3
Net debt – covenant basis 149.8 142.1
Underlying operating profit 29.6 26.4
Depreciation and amortisation 41.2 40.3
Less: Depreciation on right-of-use assets (16.3) (12.2)
Less: Amortisation of acquired intangibles (1.1) (2.1)
IFRS 16 impact removed 1.0 0.2
Covenant EBITDA 54.4 52.6
Net debt: EBITDA
1
2.75 2.70
FINANCIAL REVIEW CONT.
1. Defined as leverage APM in Note 2.3.
54
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Creditor balances have also reduced as
the Group rebalanced its working capital
throughout the year. Tax payments were
slightly higher than last year at £8.6m (2022:
£8.1m).
Cash flows used in investing activities during
the year were £4.7m (2022: £15.8m). Capital
expenditure, at £29.4m, was lower than
the £31.7m in 2022. Key expenditure in
2023 included investment in energy efficient
compressors for Scantech Product Line in the
Energy Division, which is expected to yield
attractive returns. Other capex investments
included dry docking of the Group’s vessels
and equipment purchases. The Group
generated £25.6m in asset disposals (2022:
£2.2m) mainly consisting of the proceeds
from the sale of Swordfish Dive Support
Vessel as well as other vessels and tugs in the
Energy and Maritime Transport Divisions. The
Group also incurred costs of £3.2m in 2023
from the sale of JFN.
The Group’s net borrowings at 31 December
2023, including all lease liabilities, was
£201.1m, a £15.3m increase in borrowings
from 31 December 2022. Bank borrowings
increased by £8.2m and additional lease
liabilities increased by £8.3m following the
delivery of Lady Maria Fisher tanker into
our fleet and extensions of other vessel and
property leases.
On 31 December 2023, the Group had
£192.7m of committed credit facilities (2022:
£247.5m) and £24.7m of undrawn committed
credit facilities (2022: £88.0m).
The Group’s net debt for the purposes of
its banking covenants consists of net bank
borrowings, finance lease liabilities (on an
IAS 17 basis), and bonds and guarantees,
as summarised in Table 9B.
On a covenant basis, net debt has increased
by £7.7m in the period. The ratio of net
debt:EBITDA (defined as leverage APM,
which is explained and reconciled in Note 2
of the financial statements) has increased
slightly to 2.75 times (2022: 2.70 times),
which compares to banking covenants
requiring the ratio to be less than 3.25 times.
Liquidity
In June 2023, the Group agreed new
borrowing facilities with its lending banks
of £209.9m, with a maturity date of March
2025. As at 31 December 2023, agreed
amortisation had reduced the available
facility amount to £192.7m. The continued
access to liquidity has been included as a
Group Principal Risk (see page 57) due to
the relatively short-term nature of the new
facilities.
With the current RCF maturing early next
year, the Group will be refinancing its debt in
2024. We are underway with the deleveraging
of our balance sheet with the agreement
for sale of the entire issued share capital of
RMSpumptools Limited (RMS) announced in
March 2024, which is expected to bring in net
proceeds of £83m. The disposal is expected
to complete early in H2 2024, subject to
certain conditions. Deleveraging will provide
the Group with greater business resilience
and greater headroom on its existing facilities,
while reducing the Group’s debt levels towards
our mid-term target net debt:EBITDA range of
0-1.5x. In turn this should enhance the Group’s
ability to execute a successful refinancing and
put in place new facilities during 2024 that
provide the liquidity to support investment in
growth whilst also being on more favourable
terms than the current facility.
Balance sheet
The Group’s net assets decreased by £69.7m
in the year to £148.6m (2022: £218.3m). The
loss for the year of £62.3m was increased
by other comprehensive losses of £8.4m in
relation to foreign exchange movements and
hedging of £9.7m, net of tax, and an actuarial
gain from the Group’s defined benefit pension
fund of £1.3m in the year, net of tax.
Non-current assets
Non-current assets decreased by £25.9m in
the year from £321.2m to £295.3m. Goodwill
reduced by £38.0m to £78.3m (31 December
2022: £116.3m) as a result of impairment
charges of £28.0m, a reclassification to held-
for-sale assets of £7.6m and foreign exchange
differences of £2.4m. Other intangible assets
reduced to £6.3m from £8.2m, largely due to
additions and transfers of £2.8m, which was
offset by amortisation and impairment charges
of £4.8m.
Within property, plant and equipment, the
Group invested £28.5m in additions. These
additions were offset by disposals with a net
book value of £2.6m, depreciation of £22.0m,
reclassifications to intangible assets and assets
held for sale of £3.1m, a small impairment
charge of £0.5m and foreign exchange
differences of £2.0m.
Right-of-use assets increased by £15.1m,
due to the additions of £32.8m relating to
the delivery of Lady Maria Fisher tanker into
our fleet and extensions on other vessel
and property leases as well as a reversal of
impairment of £1.9m previously recorded on
vessels in the Energy Division, which were
partially offset by depreciation of £16.3m,
disposals with a net book value of £2.0m,
reclassifications to held for sale assets of
£0.7m and foreign exchange differences
of £0.6m.
The Group has recognised a £7.4m asset in
relation to the Group’s Shore Staff defined
benefit pension scheme in accordance with
IFRIC 14 following movements in actuarial
assumptions. The Group continues to make
deficit repair payments in line with agreed
profiles with £1.5m expected to be paid in
contributions in 2024 following the most
recent triennial actuarial valuation.
Current assets and current liabilities
The Group’s net current assets increased
by £12.9m from £61.3m at 31 December
2022 to £74.2m at 31 December 2023. This
increase arose from the £37.8m reduction in
current liabilities in 2023 to £188.7m, which
was partially offset by a £24.9m reduction in
current assets in 2023 to £262.9m.
The £24.9m decrease in current assets
in 2023 was mainly driven by a £24.2m
reduction in trade and other receivables to
£124.0m and a £21.5m reduction in assets
held for sale to £14.7m, which have been
partially offset by an £23.9m increase in cash
and cash equivalents.
The £37.8m decrease in current liabilities in
2023 was mainly driven by a £9.0m reduction
in trade and other payables to £113.4m, a
£15.6m reduction in liabilities associated with
assets held for sale and a £16.3m reduction
in short-term borrowings to £51.1m, which
were partially offset by a £4.1m increase
in provisions to £9.4m. The increase in
provisions in 2023 largely relates to a £6.4m
charge relating to potential liabilities on Parent
Company guarantees for JFN.
Short-term bank borrowings (i.e., overdrafts)
have reduced to £51.1m from £67.4m at
31 December 2022, with the net position of
short-term cash and short-term borrowings
increasing to £26.4m (31 December 2022:
£22.8m).
Non-current liabilities
Long-term liabilities, at £220.9m, are £56.7m
higher than at 31 December 2022. The
change in 2023 is largely the result of increase
of £44.8m in long-term borrowings, £8.5m in
long-term lease liabilities, £2.9m in provisions
and £1.2m in retirement benefit obligations.
The £44.8m increase in long-term borrowings
was largely due to £36.6m borrowed under
the revolving credit facility in December 2022,
which was classified as a current liability in the
prior year, whereas, following the completion
of the refinancing in June 2023, all amounts
drawn under the current banking facilities
have all been classified as non-current
liabilities.
55
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
PRINCIPAL RISKS AND UNCERTAINTIES
MANAGING RISK AND ENABLING GROWTH
The Group’s emerging and principal risks
The Group is subject to a combination of macro risks and business-specific risks. The Group’s risk management process (described in more
detail on page 64) provides the framework for risk management practices across all parts of the Group and seeks to ensure that business risks
are adequately identified, quantified and understood. The framework and accompanying risk management processes continue to evolve and
improve across the Group.
Changes in 2023
The Group continues to implement improvements in risk management, with a number of ongoing projects continuing to deliver in 2023, including
a continual review of principal risks. As a result of these reviews, three additional principal risks have been separately articulated, reflecting
specific situations that the Group is subject to and seeking to mitigate: Acquisitions and disposals risk, regulatory and compliance risk, and
product risk. Pandemic risk which was separately disclosed in the prior year has been mitigated to the point where it has been removed from the
Group’s principal risks. The principal risks we face are listed alongside mitigations on pages 57 to 63. Emerging risks such as the macroeconomic
financial environment and geopolitical tensions affecting global stability and commodity pricing continue to be monitored.
During 2023 the Group hired a Head of Ethics and Compliance to enhance its risk management in this critical business area. The Head of Ethics
and Compliance has led a review of all Group policies with a view to providing a common and simplified structure to the Group’s Governance
documentation. This will be accompanied by a comprehensive training programme for all staff during 2024.
In addition to the above, new and enhanced governance has been implemented to ensure ongoing compliance with the Group’s Revolving Credit
Facility requirements; the Group’s Investment Committee has become an increasingly important cornerstone of the Group’s risk management
framework; the Sustainability Committee is under new leadership and has a sharper focus; and the Board continued with its ongoing cycle of
principal risk deep dives at each Board meeting.
The principal risks are plotted as follows considering likelihood and impact, net of mitigations in place.
Likelihood
Low Medium High
Low Medium High
Impact
1
Group transformation
2
Maintaining access to adequate
funding
3
Health and safety
4
Cyber security
5
Operating in emerging markets
6
Climate change
7
Contractual risk
8
Project delivery
9
Recruitment and retention of staff
10
Financial risk
11 N
Acquisitions and disposals
12 N
Regulatory and compliance
13 N
Product risk
No movement Increased
N
New principal risk
9
2
7
12
3
1
6
4
5
10
8
13
11
56
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
1. GROUP TRANSFORMATION PROGRAMME
Nature:
The Group is in a period of significant
simplification and integration, carrying
the risk of disruption and/or distraction
to its core activities if not managed well.
Potential impact:
• The change management process may disrupt
core business delivery activities if roles and
responsibilities are not clear
• Staff may become distracted by the change
process
Mitigation:
• A Business Excellence team has been
established, with a clear remit and a limited
number of priorities
• Objectives have been set and cascaded
through the organisation to ensure priorities
are clear across the Group
• Executive Committee oversight and escalation
process is in place
Context:
The Group is undertaking a transformation including a new strategy, operating model and initiatives such as supply chain, technology
improvements and a people strategy as well as aligning the business portfolio. Additionally, new opportunities that the Group may pursue in
new geographies may stretch Group and management resources. Strong project management and clarity on roles and responsibilities will be
required to ensure that the delivery teams remain focused on the most important identified tasks.
Movement:
No change. Progress was made during 2023 in setting common standards and practices across Health & Safety and Project Management.
The next priority areas for the Group are Commercial Excellence and Supply Chain. The transformation programme is expected to continue
throughout 2024 and into 2025.
Opportunity:
The opportunity to simplify the Group’s operating model, integrating common functions such as Supply Chain, Project Management,
Engineering, Health and Safety is aimed at providing enhanced ways of working and operational efficiencies. It is also expected to support the
simplification of the Group’s legal entity structure and systems infrastructure in due course.
2. MAINTAINING ACCESS TO ADEQUATE FUNDING
Nature:
The Group relies on external sources
of funding to ensure it has the financial
liquidity to fund its operations and
future growth, without which there is
a risk to the execution of the Group’s
strategy.
Potential impact:
• The Group may not have the liquidity required
to ensure that it remains a going concern
• Disposals of additional businesses may be
required
• The Group’s reputation and ability to secure
competitive contracts with suppliers and
customers may be adversely impacted
Mitigation:
• Regular meetings are held with all lenders to
provide trading and operational updates
• Selection of third-party expert support to
assist with refinancing
• Ongoing dialogue with potential new lenders
Context:
The Group has experienced difficult trading conditions over the last few years and currently has a revolving credit facility (RCF) which matures
in 2025 and net debt/EBITDA ranges which are currently outside our target range. To minimise this risk the Group has to strengthen its balance
sheet and obtain and retain adequate committed facilities.
Movement:
No change. The short-dated maturity of the existing RCF remains a principal risk to the Group, which is also highlighted by the Group’s auditor,
KPMG LLP, in their Independent Audit Report on page 117.
Opportunity:
The Group expects that a refinancing of the current facilities will be completed before 31 December 2024 which would allow to simplify and
right-size its borrowing facilities and provide additional certainty to all stakeholders. The Group has developed a financing plan for the period
which will include refinancing of the RCF and also consideration of other funding sources to diversify bank risk and extend tenor.
Principal risks
57
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
3. HEALTH AND SAFETY RISK
Nature:
Group trading companies may
experience an adverse operational
incident or failure to maintain
appropriate levels of health and safety.
Potential impact:
• The health and safety of our workforce and
others could be impacted by our operations
• The Group’s reputation could potentially suffer
if there was a major accident or health and
safety issue
• Claims and regulatory action may be taken
against the Company or the affected business
Mitigation:
• First item on plc and business board agendas
• Appointment of a Group Head of HSE as
part of the Operational Excellence team in
January 2023
• Policy and training
• Group Health and Safety Committee
• Group safety forum
• Insurance
• Internal Audit
• Group-wide safety initiative
Context:
Our operations entail the potential risk of significant harm to people and property, wherever we operate across the world. For moral, financial
and reputational reasons we would wish to keep the risk as low as possible.
Movement:
No change. The number of incidents reported in 2023 did not show an improvement compared to 2022.
Opportunity:
Operating in competitive markets there is an increased opportunity to provide differentiation to our customers by our strong commitment to
health and safety, thereby building long-term trust.
4. CYBER SECURITY RISK
Nature:
The Group may experience loss or
harm related to technical infrastructure
or the use of technology within the
Group.
Potential impact:
Cyber attacks could result in financial and
reputational damage by way of significant
interruption to business systems. Phishing could
result in financial and reputational damage by
way of theft or fraud.
Mitigation:
• Further embedding of new Group-wide
operating system with enhanced security,
alongside infrastructure and software updates
to existing systems
• Regular review of IT security issues, including
penetration testing
• Enhanced cyber awareness training and
regular briefings
• Improved threat detection software and cyber
phishing testing across the Board and all
employees
• Internal Audit carried out in 2023
Context:
A key factor for our customers is our ability to deliver secure IT and other information assurance systems to maintain the confidentiality of
sensitive information. IT and Cyber Security are fundamental components to our operations and we continually review the emergence of cyber
threats, in an effort to eradicate and mitigate the risk as far as possible.
Movement:
No change. The Group is reliant on its systems in order to operate effectively and has continued to invest to enhance cyber resilience.
The external threat is continually adapting and increasing, notwithstanding the mitigating activities.
Opportunity:
Upgraded IT systems increase security, but also flexibility, facilitating secure working while travelling or from home.
PRINCIPAL RISKS AND UNCERTAINTIES CONT.
58
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
5. OPERATING IN EMERGING MARKETS
Nature:
The Group operates in overseas
emerging markets and key growth
economies with fluctuating legislative
restrictions, embargoes, sanctions and
exchange controls, often undertaken
in association with local joint venture
partners.
Potential impact:
Those operations may expose the Group to
increased risk of governance and compliance
issues. Any significant failure to comply with laws
or regulations could lead to penalties and other
financial liabilities, as well as reputational issues.
Where there is a jurisdictional requirement for
local investment or representation, the Group’s
ability to continue business in that jurisdiction
could be adversely impacted from an ethical or
legal perspective.
Mitigation:
• Corporate governance framework, including
limits of authority
• Risk tracking of JVs, agents and other third-
party relationships, including use of bespoke
web-based platform
• Anti-bribery and corruption and third-party
management targeted training
• Corporate structuring of relationships, using
external local legal advice
• Internal Audit programme includes overseas
businesses supported with local audit team,
to leverage advantages of working in local
language and consistent with local law/
regulation
Context:
We rely on winning and retaining contracts in both existing and new markets with a variety of customers including major energy customers and
customers owned, controlled, or funded by national governments. This reflects that, whilst the maintenance of a secure and assured pipeline is
essential for continued growth, we may choose to embrace the risks that we can confidently and securely manage.
Movement:
No change. Commercial and financial controls, project management and risk management, along with increasing Group awareness in this area
continue to mitigate the risk.
Opportunity:
The Group’s ability to operate in emerging markets for global customers offers an increased opportunity to be differentiated from our
competitors.
6. CLIMATE CHANGE
Nature:
The Group operates in industries which
may be adversely impacted due to the
change in energy mix. The Group is
committed to minimising the impact of
its operations on climate change.
Potential impact:
The Group may suffer operational impacts of
extreme weather events, as well as potential
changes in technologies, markets and regulation
in response to climate change which could
increase costs, challenge the viability of Group
services or affect assets values. The Group
is also conscious of the need to reduce its
impact on the climate, including its emission of
greenhouse gases.
Mitigation:
• Continuing the Group’s end market and
geographical diversity
• Focus on decommissioning of oil and gas
assets, increasing support of LNG and
renewables markets
• Initiatives to reduce the Group’s emissions
and other impacts on the environment
Context:
Sustainability is an integral part of our corporate strategy, and our global business employs short-, medium-, and long-term control measures
to manage climate-related risks.
Movement:
No change. The Group has built its strategic goals around sustainability, driven in part by the impacts of climate change on the Group and the
markets it serves.
Opportunity:
Energy markets remain a key source of Group revenue, including both the oil and gas and renewables industries. With the strategic focus of
the Group supporting the “energy transition”, from oil and gas to renewables, with increased investment in oil and gas decommissioning and
renewables markets, the Board continues to consider the impact of climate change on energy markets as one of the Group’s principal risks, as
well as one of the Group’s key strategic opportunities.
59
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
7. CONTRACTUAL RISK
Nature:
The Group operates in markets where
larger project-based contractors may
seek to pass risk down the supply
chain.
Potential impact:
Through its growth and diversification into new
markets and geographies, the Group may be
exposed to increased contractual risks, which
could result in financial impact caused by late
payment, cost overruns, increased claims and
litigation, and/or exposure to non-UK legal
jurisdiction uncertainty.
Mitigation:
• Internal contract management governance,
including policy and training
• Internal and external specialist legal support
• Appropriate balance of risk and reward in
contracts, based on Group principles
• Investment Committee and (if large enough)
plc Board review and approval of all major
bids/tenders
• Targeting increased contract management
skills
• Insurance
Context:
We execute contracts which often require us to price for the long-term and for risk transfer. Our contracts can include fixed prices. The
Board and Executive Committee continue to monitor key contractual risks through the Group’s Investment Committee, which has a defined
delegation of authority and approves all opportunities that require Board approval before they are submitted to the Board. There is continued
use of internal and external legal support and clear escalation mechanisms to govern the granting of commitments.
Movement:
No change. The Group is diversifying its operations to secure a more sustainable future for its energy businesses and that will bring its own
challenges whilst the Group adjusts to new customer expectations and industry developments.
Opportunity:
As the Group pursues its strategy, contracts become a key mechanism for managing risk and also enhancing engagement with our customers
and suppliers.
8. PROJECT DELIVERY
Nature:
Group businesses may fail to meet
customer expectations or contractual
requirements on project delivery.
Potential impact:
This could cause significant adverse financial and
reputational consequences, and/or increased
cost and management time resulting from
management of disputes and litigation.
Mitigation:
• Formation of Business Excellence team in
2023, with Project Management one of only
two priority areas in the year
• Increasing the specialist project management
skillset across the Group through training and
recruitment
• Implementation of project management best
practices
• Focus on post-signature contract
management
• Salary benchmarking and role banding
exercise
Context:
We operate contracts in hazardous environments with contracts that could be subject to change and require robust project management.
Movement:
No change. The Group continues to have some mixed success on project delivery and with two large projects due for delivery in 2024 in
Mozambique this remains an area of significant focus for the future. The Business Excellence team made Project Management a priority for
2023, focusing on those businesses that have historically underperformed in this area.
Opportunity:
Our customers require suppliers which can manage large projects in demanding environments. The Group is in a key position to support them,
grow our customer engagement, and win new work.
PRINCIPAL RISKS AND UNCERTAINTIES CONT.
60
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
9. RECRUITMENT AND RETENTION OF KEY STAFF
Nature:
The Group may fail to attract, retain
and develop personnel of the requisite
calibre and to plan for succession in
key leadership positions.
Potential impact:
This may result in the Group not being able to
maintain its existing strong and experienced
management teams in its operational businesses,
and/or a risk to the Group’s delivery of its
strategic objectives, which depends on recruiting
and retaining the right people in all areas of our
business to maintain competitive advantage.
Mitigation:
• Implementation of employee strategy
• Graduate recruitment
• Talent identification and management
• Management development programmes
• Appraisal process
• Training plans
• Remuneration incentives
• Succession planning
• Salary benchmarking and role banding
exercise
Context:
We operate in many specialised engineering and technical domains which require appropriate skills and experience. Progress continues on
implementation of the employee strategy to improve recruitment and retention.
Movement:
Increase. Several senior management changes have been implemented during the year and the recruitment market for talent remains highly
competitive.
Opportunity:
Improvements in recruitment and retention will strengthen our teams worldwide, as well as the ability to compete in our chosen markets.
61
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
PRINCIPAL RISKS AND UNCERTAINTIES CONT.
10. FINANCIAL RISK
Nature:
The Group is exposed to interest rate,
foreign exchange and credit risk.
The Group’s decentralised operating
model requires robust and effective
financial controls.
Potential impact:
An increase in interest rates or change in
exchange rates or credit restriction would have
a financial impact on the Group. Poor financial
controls may impact adversely on reporting
accuracy or risk of fraud.
Mitigation:
• Formalised Group internal controls and
accounting policy manuals
• Documented levels of delegated authority for
all operating companies
• Half yearly self-certifications covering the
effectiveness of financial controls signed by
operating company Finance Directors
• Third-party whistleblowing hotline available to
all employees
• Internal Audit reviews on a periodic basis for
all businesses
• Internal controls improvement programme
• Centralised finance function management of
Group net debt, and FX
• Forward currency contracts
• Interest rate swaps
Context:
The Group is exposed to a number of financial risks, some of which are of a macroeconomic nature (for example, foreign currency, interest
rates) and some of which are more specific to the Group (for example, liquidity and credit risks). The Group has recognised the adverse effects
of the financial resilience risk on our balance sheet and will actively manage this risk via its capital allocation policy and Treasury function.
Movement:
Increase, due to current covenant compliance risk, albeit the Group remained in compliance with all banking covenants for 2023.
Opportunity:
The Group’s hedging policies are designed to provide certainty on cash flows. The internal controls improvement project is aimed at enhancing
efficiency as well as strengthening control.
11. ACQUISITIONS AND DISPOSALS
Nature:
The Group may execute a transaction
that may present complexities and
incur unanticipated costs or additional
time to complete. There may also be
regulatory and compliance risks to
manage.
Potential impact:
The Group may incur additional costs and
require additional management time. A complex
transaction may also result in integration or
separation challenges.
Mitigation:
• Adherence to the capital allocation policy
• Comprehensive due diligence process
• Transaction specific risk assessment and
scenario planning, this to include integration
and separation planning
• Internal and external specialist legal support
• Strong project management and cross
functional involvement
• Appropriate resourcing
Context:
The Group has been formed organically and through acquisition. If we believe that a business is not in line with strategic plans, we may decide
to sell that business. Transactions can be complex, time-consuming, and expensive. The Group will continue to review potential opportunities
within the market in a considered and measured way. Transactions will be undertaken where it is possible to reduce inherent risk.
Movement:
This risk is being separately disclosed for the first time.
Opportunity:
Disposals will allow the Group to focus on core businesses and simplify its structure and cost base whilst acquisitions present growth
opportunities.
62
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
12. REGULATORY AND COMPLIANCE
Nature:
The Group is subject to a number of
laws and regulations (for example, data
protection, anti-bribery and corruption,
human rights, tax and customs and
procurement rules).
Potential impact:
Failure to maintain compliance could affect our
ability to conduct business in certain jurisdictions
and potentially expose the Group to fines,
criminal prosecution, reputational damage,
rectification costs, damages claims and loss of
opportunities for future business.
Mitigation:
• Maintenance of internal policies and
procedures
• Training and awareness programs
• Encourage, facilitate and investigate
whistleblower cases
• Experienced members of staff with clear
accountabilities and access to external
advisors
• The Board monitors and reviews all reports
and their investigations
• Maintain accurate and comprehensive
documentation
Context:
Our businesses are subject to the laws, regulations and restrictions of the many jurisdictions in which they operate. The Group seeks to ensure
compliance with best practices and regulatory requirements. The Group has a zero-tolerance for regulatory risk around risks such as anti-
bribery and corruption and modern slavery.
Movement:
This risk is being separately disclosed for the first time.
Opportunity:
Compliance with laws and regulations enhances our reputation, credibility and trust with our suppliers and customers, ensures access to
capital and investment opportunities and provides opportunities for market expansion.
13. PRODUCT RISK
Nature:
The Group is subject to re-work and/or
claims against its products should they
fail to meet customer requirements.
Potential impact:
The Group may occur additional costs in the
form of re-work or liability claims. This could also
lead to reputational damage and loss of future
business.
Mitigation:
• Product testing and validation procedures
• Risk assessments evaluating potential risks
associated with a product over its lifecycle
• Supplier, vendor and JV performance
management
• Regulatory compliance
• Insurance
Context:
The Group designs innovative products for use in the Energy, Defence and Maritime Transport markets. With any new product development
there are risks of warranty claims or identification of issues to be remediated. The Group seeks to minimise such risks by rigorous testing and
quality review processes. There is also the risk of failing to innovate to ensure a pipeline of product development. The Group seeks to invest to
strengthen capabilities in this area including the appointment of the Group’s Chief Technology Officer and ensure the development of products
to meet customer requirements.
Movement:
This risk is being separately disclosed for the first time.
Opportunity:
Delivery of consistently high quality products builds long-term trust providing access to potential future business.
63
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
PRINCIPAL RISKS AND UNCERTAINTIES CONT.
EMERGING RISKS
Our risk management programme includes a review of emerging risks. We define emerging risks as those which take the form of a systemic issue
or business practice that has either not previously been identified, has been identified but has remained dormant, or has yet to rise to an area of
significant concern. The Risk Committee is continuing to work on improvements in this area and the Group included ongoing macroeconomic
and geopolitical uncertainty as emerging risks in its Interim Financial Statements.
RISK GOVERNANCE FRAMEWORK
The Board is responsible for the management of risk in the Group, supported by the Risk Committee and the Group functions, including
Internal Audit, which is outsourced to PwC LLP. The internal control and risk management framework is comprised of a series of policies,
processes, procedures and organisational structures which are designed to ensure that the level of risk to which the Group is exposed is
consistent with the Group’s risk appetite and strategic objectives, as defined by the Board. This is in the process of review under the leadership
of the newly appointed Head of Ethics and Compliance, with a view to providing a common and simplified hierarchy of policies, procedures,
standards and guidance.
The framework is overseen by the Risk Committee which helps the businesses with their risk management and reporting, consolidates reporting,
overlays the functional and macroeconomic view of risk and reports to the Board on the management and assessment of risk within the Group.
An assessment of the Company’s risk management and internal control systems is carried out annually by the Audit Committee on behalf of the
Board. The results of that assessment are reported in the Audit Committee report as set out on page 90.
Group functions
The Group’s Divisions are supported by Group functions. Each functional head reports to an Executive Director. The Board retains an oversight
role and receives regular reports on key issues: on financial, tax and treasury matters from the Chief Financial Officer, on people and HR matters
from the Chief HR Officer, and on legal and regulatory matters from the Group General Counsel. The Board conducts a “deep dive” review
into the Group’s most potentially impactful principal risks at most scheduled Board meetings. The Board has a schedule of matters specifically
reserved to it for decision, designed to ensure that it maintains full and effective control over appropriate strategic, investment, financial,
organisational and compliance issues. This schedule is subject to review by the Board on an annual basis.
Internal Audit
The Group’s Internal Audit function is outsourced to PwC. PwC has defined and undertaken regular reviews of the individual businesses’
operations and their systems of internal controls. They make recommendations to improve controls and follow up to ensure that management
implements the recommendations made. The annual Internal Audit plan is determined on a risk assessment basis and is reviewed and approved
by the Audit Committee.
Internal Audit’s findings are reported to the individual management team, the Executive management team, the functional heads, and
the Chairman of the Audit Committee. PwC attends all Audit Committee meetings and presents a summary of the Internal Audit findings,
recommendations, and implementation progress on an ongoing basis. During 2023 Internal Audit performed specific reviews on topics such as
Cyber Risk and Business Transformation in addition to more traditional internal controls-based audits at businesses across the Group.
Risk Committee
The Company has a Risk Committee, which meets periodically and is attended by the Executive Directors and the heads of the functional teams.
Each of the functional teams provides a report at each Risk Committee meeting which identifies any matters in their functional area which relates
to the Group’s principal risks and uncertainties, or to the individual trading companies’ risk registers.
Any key issues raised at the Risk Committee are discussed at meetings of the Board. The main responsibilities of the Risk Committee are: to
keep under review the effectiveness of the Group’s overall risk management framework and processes and ensure corrective action is taken
where necessary; to make recommendations to the Board/Audit Committee with respect to the appropriate risk appetite for the Group; to
review the principal and emerging risks that the Group is willing to take across all major activities, taking into account the risk appetite, the
long-term strategy of the Group and the interests of its stakeholders (shareholders, employees, customers/suppliers, the environment and local
communities impacted by the Group’s activities); to review reports from the functional leads on risks that their teams are encountering in their
interactions with the trading companies; to review reports from the trading companies on their principal risks and mitigating activities, as well as
any emerging risks; and to ensure that a robust assessment of the principal and emerging risks facing the Group has been undertaken annually
by reference to risk registers from trading companies and functions.
Through the Executive Directors and the Group General Counsel, the Risk Committee presents to the Board its annual assessment of the
principal and emerging risks of the Group. This enables the Board to carry out its own robust assessment of the principal and emerging risks of
the Group as a whole. The results of that assessment, including risk management and mitigating activities, are set out on page 82.
64
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
Investment Committee
The Group’s Investment Committee was formed in 2022 and has been the subject of continuous enhancement since. It has become a critical
component of the Group’s Risk Management Framework and is responsible for reviewing all significant bids/tenders; capital investments;
significant operating expenditure; mergers, acquisitions, JVs and disposals; contracts that contain clauses that are outside of the Group’s
contracting principles; and the appointment of Agents. The Committee’s permanent members are the Chief Executive Officer, Chief Financial
Officer and Group General Counsel, supported by the Group Financial Controller, Group Strategy Manager, Group Head of Business Excellence
and Group Treasurer. During 2023 the Committee met to consider 52 opportunities, of which 27 were approved on first review and 40 approved
overall. This includes opportunities that were approved to progress from one stage-gate to the next.
Risk management systems
The key features of the Group’s risk management systems used to identify and monitor material risks are as follows:
• Each Division is required to maintain an up-to-date risk register, which identifies key and emerging risks, assigns each a “risk score” based
on the likelihood of it arising, and the potential impact on the business of an adverse outcome, both before and after mitigation measures are
taken. Risk scores are established by reference to a set of standard criteria for each type of risk. The risks and their respective risk scores
before and after mitigation are reviewed by each divisional leadership group and discussed with the Executive Directors at each quarterly
review meeting.
• The risk registers are reviewed by the Risk Committee and the Board twice a year, based on the process outlined in the “Risk Committee”
section above, with the mid-year review focused on the material changes to those risks.
• The risk registers are used twice a year by the Board to help to determine the Group’s principal and emerging risks and uncertainties, their
potential impacts, how they are being managed and/or mitigated, and any change in the nature of the risk. Internal Audit uses them to define
its areas of focus for the forthcoming period.
Business reporting and performance reviews
The Group operates an annual budgeting process and produces formal, detailed quarterly forecasts which are reviewed and approved by
the Board. In the intervening months a high-level forecast is updated to provide additional visibility on business outlook. Monthly business
performance reviews are conducted at all businesses by the Executive Directors, comparing performance against agreed financial and KPI
measures. In addition to the annual budget, all businesses prepare five-year strategic plans which are consolidated and presented to the Board
as a Group five-year strategic plan. The Executive Directors hold quarterly review meetings with each Division to discuss strategy, financial results
and forecasts, business needs and the management of risks facing the business.
65
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
PRINCIPAL RISKS AND UNCERTAINTIES CONT.
REGULATORY COMPLIANCE POLICIES
Whistleblowing
As part of its internal control procedures, the Group maintains a whistleblowing policy which:
• encourages the workforce to report any suspected wrongdoing as soon as possible, in the knowledge that their concerns will be taken
seriously and investigated as appropriate;
• provides staff with guidance as to how to raise those concerns; and
• reassures staff that they should be able to raise genuine concerns without fear of reprisals, even if they turn out to be mistaken.
The policy covers any suspicions of criminal activity, failure to comply with any legal obligation, miscarriages of justice, danger to health
and safety, damage to the environment, bribery under our anti-bribery and corruption policy, facilitating tax evasion, financial fraud or
mismanagement, and breach of our internal policies and procedures including our Code of Ethics. The policy is designed to ensure that any
employee who raises a genuine concern is protected. Any concerns can be raised in the first instance with the Chief Financial Officer or the
Group General Counsel in confidence. The Group has an externally-facilitated whistleblowing hotline, launched in the first quarter of 2022,
providing a simple platform for communication and management of whistleblowing issues, in the many languages used around the Group.
The Board has overall responsibility for the policy, its application to individual concerns raised under the policy and for reviewing and approving
the effectiveness of actions proposed in response to concerns raised under the policy.
Anti-bribery and corruption
The Board is committed to ensuring the highest standards in all of the Group’s business dealings and condemns corruption in all its forms. The
Group has a formal anti-bribery and corruption statement and policy and does not tolerate or condone corruption or bribery in any of the Group’s
business dealings. This policy has been implemented throughout the Group and is supported by a Group-wide training programme (both online
and in person), delivered by the Group legal team and regular compliance reviews through Internal Audit. The policy is reviewed annually by the
Board and is available on the Group’s website. More detail is provided on page 69.
Modern slavery
The Board has a zero-tolerance approach to any form of modern slavery and is committed to acting in an ethical manner and with integrity and
transparency in our Group’s business dealings. The Group has a formal slavery and human trafficking statement and policy which outlines the
steps taken by the Group to ensure that slavery and human trafficking is not taking place within any part of the Group’s business or within the
Group’s supply chains. Both the statement and the policy are available on the Group’s website. More detail is provided on page 69.
66
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
VIABILITY STATEMENT
The Group’s Business model and strategy
are detailed on pages 6 and 7, and our risk
management framework is described on pages
65 to 66. Understanding of our Business
model, our strategy and our principal risks is a
key element in the assessment of the Group’s
prospects, as well as the formal consideration
of viability.
As part of the strategic planning process, the
Directors have assessed the Group’s viability
over a three-year period ending 30 April 2027.
The Group prepares a five-year outlook in its
strategy planning process, however when
assessing the appropriate period over which
to consider viability, a shorter period of three
years was chosen as it is more closely-aligned
with the timeline of the Group’s transformation
programme, which is aimed at simplifying the
organisation and divesting non-core businesses.
In addition, should the risks and uncertainties
identified on pages 56 to 63 have an impact on
the Group, it is reasonable to believe that they
will occur within this period.
In preparing this viability assessment, the Board
assumes and expects that the refinancing
process to replace the Group’s revolving credit
facility which matures in March 2025 as outlined
in the going concern section of Note 1 is
successfully completed. That said, the Board
highlights that the material uncertainties referred
to in respect of the Going Concern assessment
may cast significant doubt over the future
viability of the Group should they arise.
During the strategy planning process, the Board
reviews the Group’s strategy and its detailed
financial plan considering the Group’s current
position and prospects, together with factors
and risks that might affect the outlook. The
Board carefully assesses the performance and
prospects of each business regarding entering
new markets and geographies, current and
expected growth rates, macro and individual
business risks, prospective new projects (and
their timing), and the robustness of individual
business performance.
The Group’s plan overlays a number of
assumptions and sensitivities which are
reviewed by the Board; this includes a review of
whether additional bank facilities will be required
and available in the plan period, as well as a
robust assessment of the severe but plausible
scenarios aligned to the principal and emerging
risks facing the Group as set out on pages 56 to
63 and the potential impact of those scenarios
on its Business model, future performance,
solvency and liquidity over the period. The
scenarios which are considered include the
diverse nature of the markets and geographies
in which the Group’s businesses operate, and
their ability to react quickly to change.
Whilst all the principal and emerging risks
identified could have an impact on the
Group’s performance, the specific risks that
could potentially impact the Group’s financial
position are:
• Financial risk – trading downside risks,
which assume the Group is not successful in
delivering the anticipated profitability levels,
including in relation to contractual risk (see
below). To reflect this, operating profit was
reduced by 21% in 2024, 16% in 2025,
12% in 2026 and 10% in 2027. Exposure
to an increase in interest rates/borrowing
costs was also considered by aligning
interest rates and borrowing costs with the
new facilities’ term sheet and increasing the
underlying SONIA rate by 50 bps.
• Maintaining access to adequate funding
– the Group has historically maintained
good access to adequate funding and has
continued to work with both existing and
new lenders as well as exploring additional,
alternative sources of finance to ensure
that the longer-term access to funding is
maintained. During the year the Group
successfully agreed a revolving credit
facility which currently expires in March
2025 and as such also falls within the
viability assessment period. The Group’s
strategic plan continues to provide the
scope to reduce both the leverage and
quantum of total borrowings and the Board
has confidence that further refinancing in
advance of March 2025 will be deliverable.
The Directors continue to recognise that this
is outside of the direct control of the Group
but are ensuring all necessary steps are
taken to secure the access to funding in a
timely manner. Given the restrictive nature
of the financial covenants, careful cash flow
management is required to ensure covenant
compliance (further detail is provided in Note
1 under the Going Concern section).
• Contractual risk – winning larger contracts
and operating in more geographies with
partners potentially exposes the Group
to increased risk of late payment or cost
overruns. To reflect this operating cash flows
were reduced to reflect late payments from
customers or project delivery challenges
and, in line with the financial risk scenario
described above, operating profit was
reduced.
• Project delivery – risk that a project is not
delivered in line with the budgeted profit
and payment terms. The potential impact of
this risk is modelled through cash flow and
operating profit reduction as above.
• Group transformation – the risk of disruption
and/or distraction to its core activities if the
transformation programme is not managed
well. The potential impact of this risk is
modelled through cash flow and operating
profit reduction as above.
An additional downside scenario was
considered by modelling the potential
cumulative impact of an annual operating profit
reduction of 21% in 2024, 16% in 2025, 12%
in 2026 and 10% in 2027, operating cash
flows reduction and 50 bps increase in interest
rates. In this scenario the Group remained
viable assuming successful refinancing before
the facilities expire in 2025.
It is considered unlikely that all the risks
outlined above will arise at once. Whilst it
is unlikely that the climate change risk will
have notable impact on the Group’s financial
position over the viability assessment period,
over the longer-term it is likely to have adverse
impact on the oil and gas servicing businesses
and maritime transport. However, it presents
a significant opportunity for the Group’s
businesses that services the renewables sector
and for the other businesses to adapt their
products and services as the climate transition
evolves. These potential market dynamics are
reflected in the Group’s strategic planning,
portfolio decision-making and impairment
testing.
Given the severity of the scenarios run, the
Board consider that the Group is resilient to
the risks outlined above. Additional mitigating
actions are available to the Group in more
severe scenarios of reduced profitability and/
or liquidity:
• Reduction of capital expenditure.
• Outright sale or sale/leaseback of Group
assets.
• Further divestments of the Group’s
businesses/Divisions.
• The anticipated positive impact of the
transformation activities that the Group
plans to undertake over the viability period,
no benefit from which has been assumed in
the underlying financial model.
Based on their assessment of the Group’s
prospects and viability, and in accordance with
Provision 31 of the Code, the Directors confirm
they have a reasonable expectation that the
Group will be able to continue to operate
and to meet its liabilities, as they fall due, for
the period to 30 April 2027. This conclusion
is based on the expectation that further
refinancing is achieved before the facilities
expire in 2025.
67
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
NON-FINANCIAL AND SUSTAINABILITY
INFORMATION STATEMENT
The information set out below, together with the cross references listed in the table below
as to where further information can be found in the main body of the Strategic report, is in
compliance with the Non-Financial Reporting requirements as set out in sections 414CA
and 414CB of the Companies Act 2006.
REPORTING REQUIREMENT RELEVANT POLICY LOCATION PAGES
Business model N/A Business model and strategy 6 to 7
Environmental matters Group health, safety, environment and security
policy
Sustainability
Principal risks and uncertainties
40 to 45
59
Employees Group health, safety, environment and security
policy
Code of ethics
Sustainability
Directors’ report
36 to 39
111
Social matters Code of ethics Sustainability 36 to 39
Respect for human rights Modern slavery policy
Code of ethics
Principal risks and uncertainties
Non-financial and sustainability
information
66
68
Anti-bribery and corruption Anti-bribery and corruption policy Principal risks and uncertainties
Non-financial and sustainability
information
Audit Committee
66
69
90
Principal risks N/A Principal risks and uncertainties 56 to 66
Non-financial KPIs N/A Non-financial KPIs 48 to 49
Climate-related financial disclosures N/A Sustainability 41 to 45
KEY POLICY DESCRIPTION
Code of ethics James Fisher is committed to ensuring the highest standards in its activities and is particularly concerned that
appropriate and ethical policies and procedures are followed in all business dealings across the Group.
The Group strives for a culture of honesty, openness and accountability. The Group’s commitment to the highest level
of ethical conduct should be reflected in all our business activities including relationships with our stakeholders.
All employees and others must conduct themselves according to the language and the spirit of this Code and seek
to avoid any appearance of improper behaviour.
Our policies
A combination of online and in-person training on all the key policies is carried out across the Group, and there is also a system of bi-annual
certification for compliance officers, certifying that the relevant individuals in their businesses have read and understood the policies and are fully
compliant. All employees, contractors and third parties are encouraged to report any circumstances where there is a suspected or actual breach
of any Group policies, applicable laws, or the high standards as set out in the Code of ethics. All reported incidences of actual or suspected
breach of any of the policies are promptly and thoroughly investigated. The Audit Committee also considers any high-risk areas identified by
the internal audit function or the Group legal team. The Group commenced an internal review of the existing Group policies in 2023 which is
anticipated to be completed in 2024.
68
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report
KEY POLICY RELEVANT POLICIES
Group health, safety,
environment and
security policy
Health and safety is the top priority and the Group actively strives for the continuous improvement of health and safety
in the workplace. This policy sets out our aim to provide a healthy and safe working environment for all our employees
and to ensure the safety of others affected by our operations.
The Group recognises its responsibility to protect the environment for the benefit of all. This policy represents a
declaration of our intent and commitment to minimise the environmental impact of our activities, our consumption of
raw materials and our production of waste.
The ultimate responsibility for health and safety, and the environment rests with the Group Chief Executive Officer,
the Board members, and the Executive Team. This responsibility is cascaded through the organisation via divisional/
regional MDs and their leadership teams.
In the case of health and safety, this is supported by the Group Safety Committee, as well as by the Group Safety
Forum and its individual members, who are the HSEQ representatives for each business.
In the case of the environment, this is supported by the Sustainability Committee, and by the environmental working
group, with representation from across the Group.
Anti-bribery and
corruption policy
James Fisher has zero-tolerance for any form of bribery or corruption and is committed to complying with all
applicable anti-bribery and corruption laws. The Group has an established anti-bribery and corruption policy and
has introduced a compliance programme which has the support of the Board and senior management within the
Group. This includes communication of the statement and policy, training, risk assessment and ongoing monitoring.
Employees assessed to be at risk are required to complete the training and to self-certify that they understand and
agree to be bound by its provisions. Ongoing compliance is monitored by local compliance officers who are required
to report to their local boards and to the Group Compliance Officer on at least a bi-annual basis. The compliance
officers are responsible for ensuring that risk assessments, training and awareness-raising sessions are carried out
where appropriate and are kept up-to-date.
In addition to seeking to ensure that our colleagues are compliant with the Group’s Anti-bribery and corruption policy,
we require that all third-party agents and joint venture partners engaging with any Group entity comply with these
policies in order to facilitate compliance with applicable anti-bribery and corruption laws.
The policy is supplemented by the due diligence we undertake on all third-party agent and joint venture relationships,
enabled by a bespoke web-based platform available to all Group businesses. It provides a robust tool through which
our businesses can risk assess agent and joint venture partners with whom they are considering doing business.
It forms part of our internal control procedures and helps mitigate the Group's compliance risk.
Modern slavery
policy
James Fisher respects fundamental human rights, and is committed to acting ethically and with integrity in all our
business dealings and relationships and to implementing and enforcing effective systems and controls to ensure
modern slavery is not taking place anywhere in our own business or in any of our supply chains or in the communities
in which we operate across our international businesses. We have implemented work practices and policies
throughout the Group which are designed to ensure that respect for human rights is integrated into the systems
and culture of our businesses. We do not tolerate the use of child or forced labour within our business and take all
steps possible to ensure that our suppliers and customers also uphold internationally recognised human rights. This
is enabled through risk assessments undertaken by our Group businesses which identify parts of their supply chain
which could be susceptible to risk in this area, as well as confirmation from our suppliers of compliance with our
policy and relevant law. Our progress in the area of modern slavery is set out in our annual Modern Slavery statement
which is available on the Group’s website and outlines steps taken by the Group to ensure that there is transparency
in the Group and throughout our supply chains. The Group encourages any concerns relating to modern slavery to be
raised using the procedure set out in the whistleblowing policy.
Approval of Strategic report
The Strategic report on pages 2 to 69 was approved by the Board on 16 April 2024.
Jean Vernet
Chief Executive Officer
16 April 2024
69
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
GOVERNANCE AT A GLANCE
THE BOARD
The Corporate governance report on pages 72 to 83
describes in detail the role of the Board and its activities.
OPERATING
DIVISIONS
CORPORATE
FUNCTIONS
INVESTMENT
COMMITTEE
GROUP RISK
COMMITTEE
GROUP HEALTH AND
SAFETY COMMITTEE
GROUP
SUSTAINABILITY
COMMITTEE
GOVERNANCE STRUCTURE
APPLYING THE PRINCIPLES
OF THE UK CORPORATE
GOVERNANCE CODE
This governance section of the report
is structured around the Company’s
application of the Principles of the Code:
1 Board leadership and Company
purpose
Details about the Company’s purpose,
culture and values are set out on page 83
The key activities of the Board during
the year and key priorities for 2024 are
summarised on pages 80 to 81
2 Division of responsibilities
An explanation of our governance
structure is set out on pages 74 to 76
3 Composition, succession, and
evaluation
Details of this year’s Board evaluation is
set out on page 82
Report from the Chair of the
Nominations Committee is set out on
pages 84 to 86
4 Audit, risk and internal control
Report from the Chair of the Audit
Committee is set out on pages 87 to 91
5 Remuneration
Report from the Chair of the
Remuneration Committee is set out on
pages 92 to 94
Details of the Directors’ remuneration
policy for 2024 is set out on pages 95
to 99
AUDIT
COMMITTEE
The Audit
Committee report
on pages 87 to 91
describes in detail
the Committee’s
role and activities.
NOMINATIONS
COMMITTEE
The Nominations
Committee report
on pages 84 to 86
describes in detail
the Committee’s
role and activities.
REMUNERATION
COMMITTEE
The Directors’
remuneration
report on pages 92
to 109 describes
in detail the
Committee’s role
and activities.
EXECUTIVE
COMMITTEE
70
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
HIGHLIGHTS
Diversity (all Directors as at
31 December 2023)
Female: 4
Male: 4
Length of Tenure (Chairman
and Non-Executive Directors)
0-2 years: 3
2-5 years: 3
5-9 years: 2
Board membership and meetings
The composition of the Board and the Board Committees meets the requirements of the Code.
The Board and Board Committees held a number of scheduled and unscheduled meetings
in 2023 and individual attendance is set out in the table below.
Board and Committee scheduled meetings attendance (2023)
Board Audit Remuneration Nominations
Executive Directors
Jean Vernet 13/13 N/A N/A N/A
Karen Hayzen-Smith
(1)
1/1 N/A N/A N/A
Non-Executive Directors
Angus Cockburn 13/13 N/A N/A 4/4
Aedamar Comiskey 13/13 6/6 5/5 4/4
Justin Atkinson 13/13 6/6 5/5 4/4
Inken Braunschmidt 13/13 6/6 5/5 4/4
Kash Pandya 11/13 6/6 5/5 3/4
Claire Hawkings 13/13 6/6 5/5 4/4
Former Directors
Duncan Kennedy
(2)
12/12 N/A N/A N/A
1. Karen Hayzen-Smith joined the Board on 1 December 2023.
2. Duncan Kennedy stepped down from the Board on 1 December 2023.
Where exceptionally, a meeting has been arranged at short notice and due to other
commitments, a Director has been unable to attend a meeting, they have separately submitted
their comments and input on the matters under discussion to the Chairman of the Board or the
relevant Board Committee.
71
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Dear Shareholders
On behalf of the Board, I am pleased to
present the Company’s Corporate governance
report for 2023. As we set out elsewhere
in this report, 2023 was a year of transition
for the Group. In times of turbulence, it
remains critical that the Company has a
strong governance framework, overseen by
an experienced and engaged Board with the
right information to make informed decisions
in the interests of its stakeholders. During the
course of 2023, the Board has supported the
Executive Team in addressing the challenges
faced by the Group, including the divestment
of James Fisher Nuclear, closure of the
operations of Subtech Europe and guiding the
Company through a challenging refinancing.
The Board’s commitment to good governance
facilitated quick and effective decision-making
to carefully manage these challenges.
During the year, the Group simplified its
divisional structure, implemented the One
James Fisher cultural approach across the
Group and launched its Focus, Simplify and
Deliver strategy. These strategic initiatives
supported the implementation of the
Company’s governance priorities for the
year, as further outlined below.
The Board continues to be focused on
turning around our operational and financial
performance and resetting the business onto
a path towards sustainable growth, while
ensuring that the Group also delivers for all
its stakeholders, especially during a time of
uncertainty for our employees, our customers
and the communities in which we operate.
As stated on page 2, the Group has a
clear sense of purpose and is guided by
its values. The Board will continue to ensure
that we are focused on delivering our purpose
and operate in a manner consistent with
our values.
Progress against 2023
governance priorities
Last year, I outlined the Board’s priorities
for 2023, which were focused on putting in
place the governance structures to support
and enable the short-term business
objectives of reducing leverage through
improved operational performance and the
disposal of non-core businesses, as well
as supporting the implementation of the
Group’s long-term strategy.
The Board’s governance priorities for 2023
included:
• Implementation of a new delegation of
authority matrix and the formation of the
Investment Committee.
• Restructuring and reshaping the Executive
Committee.
• Risk management systems and controls.
During the year, the new delegation
of authority matrix was successfully
implemented, which was supported
by the establishment of the Investment
Committee. In 2023, the Investment
Committee reviewed 52 opportunities and
has become a cornerstone of the Group’s
risk management framework. Under Jean
Vernet’s leadership, the Executive Committee
has been strengthened by a number of key
appointments. The Executive Committee
meets on a monthly basis and has played
a key role in defining the Group’s strategic
direction and its management of strategic
risks. The enhancements made to the Group’s
risk management framework and controls are
further outlined on page 56.
2024 governance priorities
Following another challenging year,
the Board’s focus in 2024 remains on
strengthening the Group’s governance
structures to support and enable the
short-term business objectives of reducing
leverage through improved operational
performance and the disposal of non-core
businesses, as well as supporting the
implementation of the Group’s long-term
strategy. In order to support these business
objectives, the Board’s governance priorities
for 2024 will comprise the implementation
of a new compliance programme, which
formalises the documentation of policies and
procedures, and rolls out employee training
to enhance compliance. We will also look
to improving the oversight of the Group’s
risk management framework by expanding
the remit of the Audit Committee to cover
risk-related matters. It will duly be renamed
the Audit and Risk Committee. In addition,
we are committed to progressing our internal
controls enhancement programme with a
growing focus on assurance and testing the
effectiveness of the operation of the new
control framework. Preparing to comply
with the revised principles and provisions
of the UK Corporate Governance Code, as
published by the Financial Report Council in
January 2024, will also be an area of focus in
the coming months.
Board and Committee
composition
During 2023, there were several changes
to the membership of the Board. Karen
Hayzen-Smith joined the Board as Chief
Financial Officer with effect from 1 December
2023, succeeding Duncan Kennedy who
stepped down from the Board following
Karen’s appointment. Ahead of Aedamar
Comiskey's forthcoming retirement from the
Board at the conclusion of the Company's
next Annual General Meeting (AGM), the
following changes were approved by the
Board. Claire Hawkings was appointed
as Senior Independent Director and
Inken Braunschmidt was appointed as
Remuneration Committee Chair, both
succeeding Aedamar in these roles with
effect from 9 November 2023. Following her
appointment as Remuneration Committee
Chair, Inken stepped down as the designated
Independent Non-Executive Director for
Workforce Engagement and was succeeded
by Kash Pandya, with effect from
1 January 2024.
Having served on the Board for more than
nine years from the date of her appointment,
the Board considered carefully whether
there were any circumstances which would
impair, or appear to impair, Aedamar's
independence for the purposes of the UK
Corporate Governance Code 2018, publicly
available at www.frc.org.uk (the Code). The
Board concluded that, notwithstanding her
tenure, Aedamar continues to demonstrate
independence and provide effective challenge
and oversight. The Board also concluded
that her tenure on the Board beyond the
recommended nine year period set out
in the Code was in the best interests of
the Company, in particular as it allows
her to support the transition to Inken (as
Remuneration Committee Chair and to
provide support and guidance in connection
with the revised Directors' Remuneration
Policy) and to Claire as Senior Independent
Director. In accordance with the Code, the
Board therefore continues to identify Aedamar
as an Independent Non-Executive Director
and she will remain as a member of the Audit,
Nominations and Remuneration Committees
until her retirement from the Board at the
conclusion of the AGM in 2024.
I was pleased to announce the appointment
of Shian Jastram as an Independent Non-
Executive Director, with effect from 1 March
2024. Shian brings a wealth of experience to
the Board in operational and transformational
leadership roles in the renewables sector.
CHAIRMAN’S INTRODUCTION TO CORPORATE GOVERNANCE
72
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
UK Corporate Governance Code
The Board recognises that good corporate
governance is an important element in helping
to build a successful business in a sustainable
manner. The Code applied to the Company
through the year, and this report explains how
the Company has applied the principles, as
set out in the Code. During the year ended
31 December 2023 (and up to the date of
this report), the Company has applied all the
principles, and complied with all provisions of
the Code.
On page 94 of the Remuneration Committee
report, we outline the steps undertaken
by the Non-Executive Directors to engage
the workforce to explain how Executive
remuneration aligns with wider Company pay
policy. While the Company is compliant with
Code provision 41, this is an area of ongoing
development, and the Company intends
to build on this during 2024 as part of its
engagement activities with employees.
Strategy, purpose and values
The Code provides that a Board should
establish the Company’s strategy, purpose
and values, and that its directors should
lead by example and promote the desired
culture. During the year, Jean Vernet and his
Executive Team have been driving through
the Company’s purpose by embedding
our commitment to safety, sustainability,
people and business excellence, which are
all matters regularly discussed by the Board.
In addition, there is a programme of visits
organised for the Non-Executive Directors,
a key element of which is meeting with the
workforce for a two-way dialogue about a
wide range of issues, including purpose and
values. This allows the Board an opportunity
to assess and monitor the culture across the
Group and to monitor the implementation of
our values.
Employee engagement
To better understand the views of our
workforce, an externally facilitated
engagement survey of all our employees is
conducted annually. During the year, over
80% of employees completed the survey,
which was in line with the completion rate in
the prior year. The results of the engagement
survey were reviewed by the Board and
engagement scores were broadly in line with
prior year.
Stakeholder engagement
The Code highlights the importance of
effective engagement with shareholders
and other stakeholders. We have identified
shareholders, employees, the environment,
customers and suppliers and local
communities as being our key stakeholders.
During Board and Committee meetings, the
Group’s key stakeholders and their differing
perspectives are identified and considered as
part of the decision-making process. These
discussions, assessments and conversations
focus not only on delivering increased value
for shareholders, but also assess the impacts
of our decisions and strategies on the Group’s
wider stakeholders.
The Board recognises the importance of
regular, open and constructive dialogue with
shareholders and other stakeholders, and
this has long been a key aspect of our culture
and decision-making. The Executive Directors
meet key shareholders regularly and other
members of the Board are available to be
consulted as appropriate. I have met with
most of our largest shareholders since my
appointment as Chairman and will continue
to engage as appropriate.
The Board is also committed to embedding
sustainability into day-to-day decision-
making and this is a central element of
delivering the Group’s strategy. The Group
Sustainability Committee monitors progress
on achieving the Group’s ESG priorities.
One of its key roles is overseeing the
stakeholder working groups, which include
employee representatives from the Group,
and plays an important role in delivering our
sustainability objectives.
Given the nature of the services we provide,
stakeholder engagement is a multi-faceted
issue and is one that is frequently discussed
at Board meetings. More information
about how we consider and engage with
stakeholders as part of our Board activities is
set out on pages 80 and 81.
Managing risk
The Board, assisted by the Audit Committee,
seeks to ensure that our approach to risk
management is effective, extending beyond
financial risk to a wider range of strategic
and operational risks. During the year,
BDO LLP (BDO) supported the Group with a
comprehensive internal controls enhancement
programme. The establishment of the
Investment Committee has also strengthened
the risk assessment of opportunities being
pursued by the Group. There is a full report
on our risk management activities in our
Principal Risks and Uncertainties section
of the Strategic report on pages 56 to 66.
The Board’s review of the Company’s risk
management framework concluded that it is
generally appropriate, however a number of
improvements were identified, which will be
implemented in 2024, as described in more
detail on page 56.
Board diversity
We are committed to ensuring that the
composition of the Board has the diversity
required to be as effective as possible. As at
31 December 2023, the Board comprised
eight Directors, each bringing a variety of
skills, knowledge and experience, in addition
to diversity of thought. With two Executive
Directors and five Non-Executive Directors
(excluding myself as Chairman) more than half
of the Board is independent for the purposes
of the Code. Diversity is a matter which we
consider regularly. In 2022, we updated the
Board Diversity Policy to include aspects such
as sexual orientation, disability and socio-
economic background, when considering
candidates for the Board and its Committees.
The Board Diversity Policy is available on the
Group website and sets out our aims to ensure
an appropriate mix of skills and experience on
the Board as well as the Board’s Committees.
The Board is committed to Board diversity and
as at 31 December 2023, one member of the
Board is from an ethnic minority background
and two of the senior Board positions (Senior
Independent Director and Chief Financial Officer)
are held by a woman. I am pleased to report
that following the appointment of Karen Hayzen-
Smith, we have gender-balanced representation
on the Board.
Further details in relation to diversity, including
data in accordance with the Listing Rules
disclosure requirements, can be found in the
Nominations Committee report on page 86.
Board effectiveness review
As Chairman, I lead an annual evaluation of the
effectiveness of the Board, its Committees and
the individual Directors. Following an externally-
facilitated review in 2021, for 2023, the Board
undertook a formal internal evaluation. The
review highlighted that the Board continues to
be committed and cohesive during what was a
challenging period for the Group. The evaluation
process identified some recommended actions
which can be found on page 83.
Conclusion
The Board is committed to strengthening our
governance structure, which will play a vital
role in our transformation. I am pleased with
the progress we are making, however further
enhancements are needed to the Group risk
management and internal controls framework
and our compliance programme. I look forward
to reporting to you on our progress next year.
Angus Cockburn
Chairman
16 April 2024
73
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
GOVERNANCE FRAMEWORK
THE BOARD
Chairman: Angus Cockburn
Meets regularly, with at least seven scheduled meetings for the year. During 2023 the Board also met outside of the scheduled meetings
to discuss and approve event-driven matters, such as the Company’s refinancing and approval of disposals.
The Board is responsible for steering the Group’s purpose, culture and values, for setting the Group’s strategic priorities and for overseeing
their delivery in a way that enables sustainable long-term growth, while maintaining a balanced approach to risk within a framework of effective
controls. It has a schedule of key matters which are reserved for its own decision-making, which is reviewed annually and approved
by the Board.
Chairman
• Leads the Board, sets the agenda and promotes a culture of open debate between Executive and Non-Executive Directors.
• Regularly meets with the Chief Executive Officer, the other Executive Directors and other senior management to stay informed.
• Ensures effective communication with our shareholders.
Senior Independent Non-Executive Director
• Provides a sounding board to the Chairman.
• Meets with Directors to review the Chairman’s performance. This review is then shared with the Chairman.
• Serves as an intermediary for other directors and shareholders.
Non-Executive Directors
• Contribute to developing our strategy.
• Scrutinise and constructively challenge the performance of management in the execution of our strategy.
Non-Executive Director for Employee Engagement
• Responsible for representing the voice of our colleagues in the boardroom.
• Provides a regular platform for the independent element of the Board to have direct conversations with the employees, individually and
in group settings, to gain insights into their experiences, concerns and perspectives, and to better support the Board in assessing and
monitoring culture.
Executive Directors
• Responsible for day-to-day management of the Group as a whole.
• Delivers strategic objectives within the Board’s stated risk appetite and delegated limits of authority.
• Responsible for management of Group finances and records.
Matters reserved for the Board
At least once a year the Board reviews the nature and scale of matters reserved for its decision. These include:
• Company strategy and financial performance.
• Internal control and risk management systems.
• Review of the Board’s own effectiveness.
74
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
BOARD COMMITTEES
To assist in fulfilling its oversight responsibilities the Board has established Non-Executive and Management Committees that provide
dedicated focus to particular areas, and management of the day-to-day operations of the business. Supported by its principal Non-Executive
Committees (Nominations, Audit and Remuneration Committees), the Board sets the strategic direction of the business. The Committees
operate within defined terms of reference as defined by the Board. Each principal Board Committee is comprised of independent Non-
Executive Directors appointed by the Board. Terms of reference are available upon request from the Company Secretary and are also
published on the Company’s website. The Company Secretary acts as secretary to each of the Committees. Each Committee chair reports
to the Board on the Committee’s activities following each Committee meeting.
Nominations Committee
Chair: Angus Cockburn
Meets at least three times a year.
Reviews the structure, size and
composition of the Board (including skills,
knowledge, diversity and experience) and
recommends changes.
Reviews succession planning for
Directors and senior executives.
Identifies and nominates candidates for
approval by the Board, to fill vacancies
when they arise.
The Nominations Committee report on
pages 84 to 86 describes in detail the
Committee’s role and activities.
Audit Committee
Chair: Justin Atkinson
Meets at least three times a year.
Assists the Board in its oversight and
monitoring of financial reporting, reviews
the Group’s internal financial controls and
systems for risk management and internal
controls and assesses independence and
objectivity of external auditor.
The Audit Committee report on
pages 87 to 91 describes in detail the
Committee’s role and activities.
Remuneration Committee
Chair: Inken Braunschmidt
Meets at least three times a year.
Agrees the remuneration policy for
Executive Directors and oversees
remuneration for other senior executives;
reviews the appropriateness and
relevance of the Group’s remuneration
policy; and seeks to ensure that the
provisions of the Code relating to
remuneration are fulfilled.
Reviews workforce remuneration and
related policies and the alignment of
incentives and rewards with culture,
taking these into account when setting
the policy for Executive remuneration.
The Directors’ remuneration report on
pages 92 to 109 describes in detail the
Committee’s role and activities.
Disclosure Committee
Consisting of the Chairman, the Executive Directors and the
Group General Counsel.
Oversees the Company’s compliance with its disclosure
obligations and meets when necessary.
Special Purposes Board Committee
Consisting of the Chairman and the Executive Directors.
Empowered, under its terms of reference, to take specific actions
relating to the affairs of the Company in the normal course of
business and of a routine nature, subject to such limits as the
Board in its discretion determines. Meets according to business
requirements.
75
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
KEY MANAGEMENT COMMITTEES
Health and Safety Committee
Chaired by Group CEO
Meets on a quarterly basis.
Discusses all health and safety issues including incidents, root cause analysis, mitigating actions and training requirements. Reports updates
on material safety incidents and developments to the Board.
Sustainability Committee
Chaired by Group CEO
Meets on a quarterly basis.
Oversees the Group’s sustainability commitments and supports the Board to define and implement the Group’s sustainability strategy, with input
from the Group Product Lines. A description of the Sustainability Committee's role and activities is set out on page 34.
Risk Committee
Chaired by Group CEO
Meets on a quarterly basis.
Identifies and monitors operational risks throughout the Group, supports the internal control and risk management strategy and policy.
The Principal Risks section of this report on page 64 describes the Committee’s role and activities.
Investment Committee
Chaired by Group CEO
Meets as required to consider investment proposals submitted by the Divisions.
Formed to advise and assist in the assessment of capital investments and significant contractual commitments entered into by the Group in
accordance with the authorities delegated to the Committee by the Board and in accordance with the agreed strategy and budget.
Executive Committee
Chaired by Chief Executive Officer and comprises:
• Chief Financial Officer.
• Chief HR Officer.
• Head of Corporate Development.
• Group General Counsel.
• Group Business Development Director.
• Head of Business Excellence.
• Chief Technology Officer.
• The head of each Division.
Responsible for supporting the Executive Directors in the exercise
of their delegated authority from the Board and the day-to-day
operation of the Group and meets on a monthly basis.
Operating Divisions
• Day-to-day business delivery.
• Executive Directors meet on at least a quarterly basis and have
regular performance management calls with the Product Line
directors.
GOVERNANCE FRAMEWORK CONT.
76
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
N
ANGUS COCKBURN
Non-Executive Chairman of
the Board and Nominations
Committee
Year of appointment: 2021
Appointment:
Angus was appointed Non-
Executive Chairman to the Board
and the Nominations Committee
in May 2021.
Key strengths and experience:
• Extensive business leadership
experience.
• Strong strategic and financial
knowledge.
Angus joined from Serco Group
plc, where he was Group Chief
Financial Officer, a position he
held since October 2014. Angus’s
previous roles have included
Chief Financial Officer and Interim
Chief Executive of Aggreko plc,
Managing Director of Pringle of
Scotland, and senior finance
positions at PepsiCo Inc. He was
also previously a Non-Executive
Director of Howdens Joinery
Group plc and GKN plc.
He is a chartered accountant with
an MBA from the IMD Business
School in Switzerland and is an
Honorary Professor at the University
of Edinburgh and a member of the
Institute of Chartered Accountants
of Scotland.
External appointments:
Senior Independent Non-Executive
Director of Ashtead Group plc;
Non-Executive Director of BAE
Systems plc, Non-Executive
Director of STS Global Income
& Growth Trust plc and Senior
Non-Executive Director of the
privately-owned Edrington Group
Limited. Angus will step down as
a Non-Executive Director of STS
Global Income & Growth Trust plc
at the company’s 2024 AGM.
JEAN VERNET
Chief Executive Officer
Year of appointment: 2022
Appointment:
Jean joined the Group as
Chief Executive Officer in
September 2022.
Key strengths and experience:
• Strong leadership skills.
• Clear strategic mindset.
• Significant financial experience.
• Commercial and business
management.
Jean has considerable
experience working in the energy
and the technology sectors in
both the UK and around the
world. Most recently, Jean was
Chief Executive Officer of Smiths
Group’s largest division, John
Crane, where he drove a highly
effective growth strategy in a
business that operates in over 50
countries. He has an engineering
degree and spent over a decade
in various financial and market-
facing roles with energy services
business, Schlumberger. His
experience also includes five
years as Chief Financial Officer
of Expro, the offshore energy
services provider, during which
time he played a key role in its
successful turnaround.
External appointments:
None.
KAREN HAYZEN-SMITH
Chief Financial Officer
Year of appointment: 2023
Appointment:
Karen was appointed to the
Board as Chief Financial Officer in
December 2023.
Key strengths and experience:
• Significant financial leadership
experience.
• Extensive global experience
in the industrial, defence and
energy sectors.
Karen was the Director of Group
Finance at Johnson Matthey plc,
a position she held from January
2020 to November 2023 –
including the role of Interim Chief
Financial Officer for six months, in
November 2020. Karen’s previous
roles also include Finance
Director for the Aviation sector
of Babcock plc and a variety of
senior finance roles at Vodafone
plc, Hanson plc and Amec Foster
Wheeler plc. Karen began her
career at Arthur Anderson. She
is a member of the Institute of
the Chartered Accountants of
Scotland and the Chartered
Institute of Taxation.
External appointments:
Governor of Oxford Brookes
University and Chair of Audit
Committee.
BOARD OF DIRECTORS
Key
A
Audit Committee
R
Remuneration Committee
N
Nominations Committee
Chair of Committee
Member of Committee
77
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
BOARD OF DIRECTORS CONT.
78
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
A R N
AEDAMAR COMISKEY
Independent Non-Executive
Director
Year of appointment: 2014
Appointment:
Aedamar was appointed to the
Board in November 2014. She
was Chair of the Remuneration
Committee from May 2018 to
November 2023 and Senior
Independent Non-Executive
Director from March 2019 to
November 2023. Aedamar will
retire from the Board at the
conclusion of the Company’s
AGM.
Key strengths and experience:
• Extensive global business
experience.
• In-depth knowledge of legal,
regulatory and governance
issues for listed companies.
Aedamar is the Senior Partner
of Linklaters LLP, where she
has been a partner since 2001.
Aedamar specialises in mergers
and acquisitions, joint ventures
and fundraisings, and is the lead
relationship partner for many of
the firm’s FTSE clients.
External appointments:
Linklaters LLP and Trustee
of Tommy’s.
NA R
JUSTIN ATKINSON
Independent Non-Executive
Director and Chair of the Audit
Committee
Year of appointment: 2018
Appointment:
Justin was appointed to the
Board in February 2018 and was
appointed Chair of the Audit
Committee in May 2018.
Key strengths and experience:
• Significant operational and
financial experience through his
previous and current roles.
• Substantial experience on
boards of listed companies
in both executive and non-
executive roles.
Justin was formerly Chief
Executive Officer of Keller Group
plc between April 2004 and May
2015, having previously held
the position of Group Finance
Director and Chief Operating
Officer. He was also previously a
Non-Executive Director of Sirius
Real Estate Ltd and Chair of the
Audit Committee. Justin was a
financial manager at Reuters plc,
and trained and qualified as a
chartered accountant at Deloitte
Haskins & Sells.
External appointments:
Chairman of Forterra plc
and Senior Independent
Non-Executive Director of
Kier Group plc.
A R N
CLAIRE HAWKINGS
Senior Independent
Non-Executive Director
Year of appointment: 2022
Appointment:
Claire was appointed to the
Board in January 2022. She was
appointed Senior Independent
Director in November 2023.
Key strengths and experience:
• Significant experience in the
energy sector.
• ESG/sustainability leadership
and management expertise.
• Experience of the development
and delivery of organisational
strategies including business
process transformation,
leadership succession and
diversity and inclusion.
• Extensive experience in portfolio
management and leading
complex commercial transactions.
Claire is a Non-Executive Director
and Chair of the ESG Committee
of Ibstock Plc. Claire is also a
Non-Executive Director and Chair
of the Responsible Business
Committee of FirstGroup plc,
as well as a Non-Executive
Director of Defence Equipment
and Support, a Bespoke Trading
Entity and Arm’s Length Body of
the Ministry of Defence. Claire
has over 30 years’ experience
in the energy sector, where she
held a variety of international
leadership positions, most
recently with Tullow Oil plc, and
prior to that with BG Group plc
and British Gas plc. Claire is a
fellow of the Energy Institute and
Chapter Zero.
External appointments:
Non-Executive Director of Ibstock
Plc, Defence Equipment and
Support and FirstGroup plc.
Key
A
Audit Committee
R
Remuneration Committee
N
Nominations Committee
Chair of Committee
Member of Committee
A R N
SHIAN JASTRAM
Independent Non-Executive
Director
Year of appointment: 2024
Appointment:
Shian was appointed an
Independent Non-Executive
Director on 1 March 2024.
Key strengths and experience:
• Significant global operational
and transformational
leadership.
• Renewables sector expertise,
including offshore wind and
green hydrogen.
Shian worked in a variety of
leadership positions at Ørsted,
one of the world’s leading
renewable energy companies,
from 2006 to 2022. While at
Ørsted, she was inter alia Head of
Operations Excellence, Offshore
Wind and Head of Business &
Market Development, Power-
to-X, where she led the global
market scale-up of Ørsted’s
green hydrogen and renewable
fuels business. Shian has a
degree in Law from the University
of Copenhagen and spent her
early career in M&A advisory.
External appointments:
None.
A R N
79
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
A R N
INKEN BRAUNSCHMIDT
Independent Non-Executive
Director and Chair of the
Remuneration Committee
Year of appointment: 2019
Appointment:
Inken was appointed to the
Board in March 2019. She
was appointed Chair of the
Remuneration Committee in
November 2023.
Key strengths and experience:
• Strategic growth mindset.
• Significant global operational
experience.
• Track record in innovation,
technology, digital
transformation and
management.
Inken was previously Chief
Innovation and Digital Officer
and member of the Executive
Board at Halma plc. Prior to
joining Halma plc in 2017, Inken
spent 13 years at RWE AG, the
German energy giant, and its
renewables subsidiary innogy
SE, where she held various
international leadership roles
focusing particularly on strategy,
innovation, digital transformation
and change management. Inken
studied Innovation & Technology
at Kiel University and has a PhD
in Technology Management.
Inken is a committee member
of the Royal Academy of
Engineering Enterprise Hub.
External appointments:
Committee Member of the Royal
Academy of Engineering.
KASH PANDYA
Independent Non-Executive
Director and Non-Executive
Director for Employee
Engagement
Year of appointment: 2021
Appointment:
Kash was appointed to the Board
in November 2021. He was
appointed as the Non-Executive
Director for Employee Engagement
in January 2024.
Key strengths and experience:
• Considerable international
leadership experience.
• Strong knowledge of
manufacturing and service
businesses.
Kash is Vice Chairman of the
Supervisory Board of Vantage
Towers AG and Non-Executive
Director of TowerCo of Africa. Kash
was formerly Chief Executive Officer
of Helios Towers plc (HTWS),
between August 2015 and April
2022, and Non-Executive Deputy
Chairman between May 2022 and
August 2022. Kash was Chairman
of Climate Impact Partners, a
world leading Voluntary Carbon
Market Group, between January
2022 and December 2023. Prior
to joining HTWS, Kash spent eight
years on the board of Aggreko plc,
with responsibility for managing
its European and International
businesses. Kash previously
worked for various engineering
and manufacturing companies in
a number of senior roles, including
Jaguar, General Electric Company,
Ford Motor Company, Novar plc
(then Caradon) plc, APW Limited
and Johnston Group.
External appointments:
Vice Chairman of Supervisory
Board of Vantage Towers AG and
Board member of TowerCo of
Africa.
Key
A
Audit Committee
R
Remuneration Committee
N
Nominations Committee
Chair of Committee
Member of Committee
80
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
CORPORATE GOVERNANCE REPORT
Board focus in 2023 and principal activities
The principal activities of the Board during 2023 and how the Board considered the interests of its stakeholder groups in its decision-making,
as well as its key priorities for 2024, are set out below:
TOPIC
KEY ACTIVITIES AND
DISCUSSIONS IN 2023 STAKEHOLDER CONSIDERATIONS
KEY PRIORITIES
FOR 2024
Trading • Received regular updates
from the Executive Directors
on Group trading.
• Invited divisional leadership
to present to the Board on trading
and strategic delivery.
• Carefully managed Group
indebtedness through a
programme of disposals and an
enhanced financial forecasting
process.
• The Board carefully considered the impact of
trading updates on its stakeholders. The Board
also balanced its decision-making in relation
to dividends against the Company’s financial
performance and position, the need to reduce
leverage and the need for equitable treatment of
all of the Company’s stakeholders.
• In working to address and reduce the Company’s
leverage, the Board in particular took into
account the views and interests of shareholders,
lenders and employees.
• Continue to maintain
a close review of
Group trading.
• Ensure delivery of
disposals programme
and successful
implementation of an
enhanced financial
forecasting process.
Strategy • Approved the Group’s strategic
priorities based on strategic focus,
organisational simplification and
execution.
• Approved the future strategic
growth initiatives built upon
compliance, talent deployment,
geographical expansion,
technology and innovation.
• The Executive Directors meet regularly with
the Company’s lenders and shareholders to
discuss the strategic direction of the Company.
This dialogue impacted Board decision-making
relating to capital expenditure.
• In reviewing implementation, and agreeing the
Group’s strategic priorities, the Board sought
to balance the impact of prioritisation on all
stakeholder groups, notably shareholders,
employees and the environment.
• Oversee
implementation of
strategic priorities.
• Ensure reduction of
Group indebtedness.
Disposals and
business closures
• Approved the disposal of James
Fisher Nuclear.
• Approved the closure of the
Subtech Europe business.
• The Board considered several stakeholder
perspectives when reviewing disposals and
business closures in parallel with meeting the
Company’s strategic aims and de-risking future
cash flow, avoiding future financial losses and
significant additional capital investment.
• Employee interests were at the forefront
of stakeholder considerations. Employee
engagement plans were developed during
the negotiations and due diligence phase and
implemented immediately following decision
by the Board.
• Focusing the
Company’s investment
on higher potential
areas of growth.
• Reducing the
Company’s
indebtedness through
carefully selected
disposals.
81
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
TOPIC
KEY ACTIVITIES AND
DISCUSSIONS IN 2023 STAKEHOLDER CONSIDERATIONS
KEY PRIORITIES
FOR 2024
Governance • Engaged with institutional
shareholders during the full year
and half year results presentations
and with other stakeholders
throughout the year.
• Reviewed and approved the 2022
Annual Report and Accounts.
• Approved the compliance
programme.
• The Board recognises the importance of good
governance for all its stakeholders. The Board
confirmed governance as one of the key pillars
of the Group’s Sustainability Strategy (as set out
on pages 32 to 37) and the potential resulting
impacts on stakeholder groups.
• The Board considered the interests of its
suppliers and customers when approving the
compliance programme. The Group’s investment
in its compliance programme will simplify the
business interactions with customers and
suppliers and benefit stakeholders as a whole
by seeking to ensure a more robust governance
framework and promote the long-term success
of the Company.
• Maintain and enhance
the Group’s culture and
values and key policies
and procedures.
• Oversee governance
framework
improvements.
• Continue to strengthen
internal controls and
reporting.
Health and Safety • Closely monitored health and
safety performance across the
Group.
• Health and safety governance and
reporting reviewed and enhanced.
• Received presentations on health
and safety performance from the
senior leadership of each Division.
• During the year, the health and safety of those
working for the Group continued to be an area
of focus and discussion by the Board.
• The Board has received safety updates from the
CEO at each Board meeting. The Company’s
top priority and shared goal is that everyone who
works for us returns home safely.
• Continue to engage
with senior leaders
regarding health and
safety governance and
performance.
• Enhance employee
engagement in
relation to health
and safety matters
at all levels including
the deployment
of the health and
safety performance
management software,
Intelex.
Board
development
• Continued to focus on the
composition, balance and
effectiveness of the Board and the
induction of a new Chief Financial
Officer and Non-Executive Director.
• Reviewed Board composition,
diversity, and discussed and acted
on the recommendations of the
Nominations Committee.
• Undertook a formal evaluation of
the Board, its committees and
individual Directors, and developed
an action plan.
• The Board has considered the interests of
its stakeholders in making changes to the
membership of the Board. In particular, the
Nominations Committee has sought to make
recommendations for new Board members who
bring expertise and experience of working with
all stakeholder groups, and can improve the
engagement to ensure that stakeholder interests
are heard clearly in the boardroom.
• Enhance the
Board’s strategic
understanding of key
markets.
• Board site visits to
promote understanding
of markets and to
promote employee
engagement with
Board.
• Annual internal
evaluation of Board
and Committee
performance.
82
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
CORPORATE GOVERNANCE REPORT CONT.
Employee engagement
The Board understands the importance
of making visits to businesses in the Group
to engage with employees. Such visits
enhance Non-Executive Directors’ knowledge
of operations and strengthens their individual
contribution to Board debate. The Board
conducted a programme of site visits during
the year. In addition, Jean Vernet regularly
visits the Group’s operations which is an
opportunity to meet and connect with a
diverse group of employees. The Board
discussed the outcomes of these visits, which
assisted in identifying areas of focus for the
site visits scheduled in 2024. The divisional
and functional heads continue to attend
certain Board and Committee meetings
to discuss areas of strategic focus and
employee engagement. An externally
facilitated engagement survey of all our
employees is conducted annually and
reviewed by the Board.
Governance, risk and internal
controls
The Board is responsible for determining the
nature and extent of the Company’s principal
risks and for ensuring that the Company
maintains sound risk management and
internal control procedures. More information
in relation to those principal risks, the Group’s
approach to mitigating them, and the risk
management and internal control procedures
within the Group are set out in the Strategic
report on pages 56 to 66.
The Audit Committee, on behalf of the Board,
monitors the Group’s risk management and
internal controls processes and reviews its
effectiveness on an ongoing basis. This is part
of an established process, in accordance with
the Code and the FRC’s associated Guidance
on Risk Management, Internal Control and
Related Financial and Business Reporting, for
the identification, evaluation and management
of the significant risks facing the Group, which
operates and is reviewed throughout the year.
During the year, the Board confirmed that,
although the controls and risk management
systems were adequate, a programme of
improvements was agreed for 2024.
The Group’s governance framework is
described in more detail on pages 74 to
76. The Group’s internal control systems
are designed to provide the Board with
reasonable assurance as to the effective and
efficient operation of the Group in accordance
with the governance structures, and to
ensure the quality of internal and external
reporting and compliance with all applicable
laws and regulations. During 2023, BDO
supported the Group with a comprehensive
internal controls enhancement programme.
Potential deficiencies were identified and
remediation actions are planned in 2024.
We will continue to implement improvements
to the governance structure, in particular,
through the implementation of the Board-
approved compliance programme. More
information on this, as well as the internal
controls environment more generally, can be
found in the Audit Committee report on pages
87 to 91.
As part of its internal control procedures, the
Group maintains policies and processes for
whistleblowing, anti-bribery and corruption
and to uphold its zero-tolerance approach to
any form of modern slavery. More information
in relation to those policies is included in the
principal risks and uncertainties section of the
Strategic report on page 66 and in the non-
financial information statement on pages 68
and 69.
The Board has also carried out a robust
assessment of the principal risks facing the
Group, including those that would threaten
its Business model, future performance,
solvency or liquidity, and of the Group's
emerging risks. An overview of the Company’s
risk management and internal control
systems is included in the principal risks and
uncertainties section of the Strategic report
on pages 64 to 65.
Board composition
Details about the current composition of the
Board are set out in the biographies of the
Directors on pages 77 to 79.
Board diversity
Ensuring that the Board is appropriately
diverse across multiple areas is important
to achieving its strategic objectives and in
attracting and retaining talent, as well as
cultivating a culture of inclusion and diversity
through the Group by its clear tone from the
top. The Board and Executive Committee
champion diversity and inclusion in their own
membership and throughout the Group.
Supported by the Nominations Committee,
the Chairman monitors the composition of
the Board to ensure that it is made up of
the appropriate mix of skills, experience and
knowledge required to effectively oversee and
support the management of the Group and
the delivery of the strategy, having regard
to the interests of the Group’s stakeholders
– shareholders, customers and suppliers,
employees, the environment and local
communities. When considering candidates
for the Board, the Nominations Committee,
on behalf of the Board, takes into account
factors such as: professional experience,
skills, education, international and industry
knowledge, social-economic background,
sexual orientation, disability, age, ethnicity
and gender. The Nominations Committee
report on pages 84 to 86 sets out its progress
in this respect, along with an example of the
Nominations Committee’s work in identifying
a new Non-Executive Director candidate on
behalf of the Board.
Board evaluation
The Board undertakes an annual evaluation
of the performance of the Board, the
Remuneration, Nominations and Audit
Committees, and the individual Directors,
including the Chairman, against the
framework of Board effectiveness produced
by the Financial Reporting Council.
The 2023 annual review of individual
Directors’ performance was conducted by
the Chairman. The Chairman’s performance
review was led by the Senior Independent
Non-Executive Director in consultation
with the other directors. The performance
of the Executive Directors was reviewed
by the Chairman and Non-Executive
Directors with the Chief Executive's review
being communicated by the Chairman.
The Chairman and the Executive Directors
reviewed the performance of each of the
other Non-Executive Directors. The Board
considers that each Director continues to
contribute effectively and to demonstrate
commitment to the role. The agreed actions
resulting from the Board evaluation are set out
in the graphic on page 83.
83
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Training and development
Ongoing training and development for
Directors is available as appropriate and
is reviewed and agreed with the Chairman
annually. Specific and tailored updates
were provided by external advisers and
management to the Audit, Nominations and
Remuneration Committees. During the year
the Board also received reports from the
Group General Counsel on compliance,
as well as corporate governance and ESG-
related updates from external advisers. The
Board is confident that all its members have
the knowledge, ability, and experience to
perform the functions required of a director
of a listed company.
Upon appointment to the Board, Directors
undertake an induction programme, receiving
a broad range of information about the Group
tailored to their previous experience. This
includes information on the Group businesses
and their operational performance, along with
an overview of Group strategy, corporate
governance, and Board procedures. The
programme also includes one-to-one
meetings with all Board and Executive
Committee members, as well as individual
site visits to key Group operating locations
to understand the business and meet
management teams.
Assisted by the Company Secretary, the
Chairman has responsibility for these
induction programmes, and for the Board’s
training and professional development.
Stakeholders
The stakeholder voice is brought into the
boardroom throughout the annual cycle
through information provided by the Executive
Directors (as well as representatives from the
Group’s businesses and functions who are
invited to present to the Board), and through
regular updates from Directors on their
engagement activities with the stakeholders
themselves. This includes regular updates
from the:
• Chairman and the Executive Directors
on their discussions with investors.
• Company’s brokers on the feedback
received from investors.
• Executive Directors, Chief HR Officer
and Designated Non-Executive Director
for Employee Engagement in relation to
employee engagement.
• Group CEO on feedback from customers.
• Senior leadership team on their
engagement with employees, customers,
suppliers and local communities.
• Group Sustainability Committee on
the Group’s approach to reducing its
environmental impacts.
On pages 36 and 37 of our Strategic report,
we set out our principal stakeholders, how
we engage with them, the issues which are
important to them and how we respond.
The relevance of each stakeholder group
may increase or decrease depending on the
matter or issue in question, so the Board
seeks to consider the needs and priorities of
each stakeholder group during its discussions
and as part of its decision-making. On pages
80 and 81 we set out how the Board has
considered the interests of stakeholders when
discussing and agreeing decisions on key
matters in 2023.
Purpose, culture and values
The Board recognises the importance of its
role in promoting the long-term sustainable
success of the Group by setting the tone of
James Fisher’s purpose, culture and valued
behaviours, and embedding them throughout
the Group. Our core valued behaviours
and our Code of Ethics (the behaviours we
expect) underpin everything that we do and
set out the type of organisation we want to
be. Everyone who works for and with us is
required to comply with these.
The Executive Directors set the tone of our
organisation and demonstrate our valued
behaviours. Various indicators are used to
provide insight into our culture, including
employee engagement and health and
safety. We regularly assess the state of our
culture, through activities such as employee
engagement surveys and compliance reviews,
and we address behaviour that falls short of
our expectations.
Financial reporting
The Board considers that the Annual Report
and Accounts taken as a whole present a fair,
balanced and understandable assessment
of the Group and provides the information
necessary for shareholders to assess the
Group’s position, performance, Business
model and strategy. More information about
how this assessment was made is set out in
the Audit Committee report on page 88.
The going concern assessment is described
in the Audit Committee report on page 88; the
viability statement is set out on page 67 and
the Strategic report on pages 6 to 7 sets out
an explanation of the Company’s Business
model and the strategy for delivering the
Company’s objectives.
BOARD EVALUATION
Action
IR strategy and timing of capital markets
day to be reviewed.
Progress in 2023/24
Board presentation relating to IR strategy
scheduled in 2024.
Action
Continue improvements in ESG reporting.
Progress in 2023/24
Presentation to the Board on ESG strategy
and reporting scheduled in 2024.
Action
Improve the Annual Report and external
audit process.
Progress in 2023/24
Management’s 2023 Annual Report and
external audit preparation plan presented
to the Audit Committee.
Action
Formalise the timing of the circulation
of financial reports to the Board.
Progress in 2023/24
Financial reporting schedule under review
by management.
Action
Improve below Board level succession
planning.
Progress in 2023/24
Nominations Committee review of
Executive Committee and senior
leadership succession planning process
scheduled in 2024.
84
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
NOMINATIONS COMMITTEE REPORT
The Committee reviews the leadership
and succession needs of the Company
and ensures that appropriate procedures
are in place for selecting, nominating,
onboarding, training and evaluating Directors.
Overall, our objective is to ensure that the
Board has Directors with a broad range
of knowledge, skills and experience to
ensure the team works together effectively
in discharging its responsibilities, including
in relation to corporate governance. We
recognise the benefits of a diverse Board and
senior leadership team, including diversity of
skills, sector experience, background, gender,
and ethnicity.
2023 in review
During 2023, the following Board membership
changes were considered by the Committee:
• On 1 December 2023, Duncan Kennedy
stepped down from the Board as
Group Chief Financial Officer, and Karen
Hayzen-Smith joined the Board as Group
Chief Financial Officer on the same date.
Karen Hayzen-Smith has considerable
experience working in the energy and
defence sectors and a strong track record
across all aspects of finance leadership.
This, combined with an expertise at
driving successful turnarounds, brings
considerable strength to our Executive
Team. I would also like to take this
opportunity to thank Duncan Kennedy
for his considerable contribution to James
Fisher during his tenure as CFO, helping
to navigate the Group through some
challenging events, in particular the 2023
refinancing.
• On 1 March 2024, Shian Jastram joined the
Board as an Independent Non-Executive
Director. She brings a wealth of invaluable
international experience to the Board in
operational and transformational leadership
roles in the renewables sector, including
offshore wind and green hydrogen.
We are pleased to welcome Shian Jastram
to the Board. We look forward to harnessing
her expertise in the energy transition, as we
continue to build a stronger, more sustainable
business for the future.
Board appointments and
succession planning
The Committee leads the process for Board
appointments and makes recommendations
to the Board within its agreed terms
of reference. Appointments are made
having regard to the balance of skills and
experience of current Directors as well as the
diversity of the Board in respect of multiple
characteristics, including gender, thought and
ethnicity. The Committee adopts a formal,
rigorous, and transparent procedure for the
appointment of new Directors to the Board,
working with independent executive search
consultants.
During 2023, the Committee sought support
from specialist executive search consultants.
Lygon Group assisted with the appointment
of Karen Hayzen-Smith. Lygon Group was
instructed to search for Executive candidates
who were established finance leaders
with extensive knowledge of the sectors
in which the Group operates and proven
experience of leading companies through
turnaround situations. Korn Ferry assisted
with the appointment of Shian Jastram and
was instructed to search for Non-Executive
Director candidates with global industry
knowledge, particularly in renewables and
offshore wind. Lygon Group and Korn Ferry
have no connection with the Company (other
than assisting with recruitment), nor with any
individual Director.
The graphic on page 85 sets out an example
of the selection and appointment process
undertaken by the Nominations Committee,
in this case leading to the appointment of Shian
Jastram to the Board as an Independent Non-
Executive Director.
The Committee keeps under regular review
Board succession planning. During the year, the
Committee considered Aedamar Comiskey’s
forthcoming retirement from the Board, as
well as the appointment of her successors as
Senior Independent Director and Remuneration
Committee Chair. In the interests of an orderly
handover of responsibilities, the Committee
recommended to the Board the appointment of
Claire Hawkings as Senior Independent Director
and Inken Braunschmidt as Remuneration
Committee Chair, both with effect from 9
November 2023. Following her appointment as
Remuneration Committee Chair, Inken stepped
down as the designated Independent Non-
Executive Director for Workforce Engagement
and was succeeded by Kash Pandya, with
effect from 1 January 2024, following the
recommendation of the Committee.
The timing of these changes has allowed for
an effective transition, particularly as we will
be putting the revised Directors’ remuneration
policy forward for the approval of our
shareholders at the AGM in May. Aedamar
and Inken worked together on the shareholder
consultation process on executive remuneration
which typified how well the Remuneration
Chair process has gone. Claire has also made
an impressive start to her tenure as Senior
Independent Director providing helpful counsel
to me on a number of issues.
During the year, the Chief HR Officer briefed the
Committee on the Group’s talent review and
actions undertaken in relation to the Group’s
senior leaders to ensure a diverse pipeline and
effective succession planning for the Board and
Executive Committee.
MEMBERSHIP SINCE
Angus Cockburn (Chair) 2021
Aedamar Comiskey 2014
Justin Atkinson 2018
Inken Braunschmidt 2019
Kash Pandya 2021
Claire Hawkings 2022
Shian Jastram 2024
Key objectives
Reviewing the composition of the Board and succession planning.
Key responsibilities:
• To regularly review the structure, size and composition of the Board (including skills,
knowledge, diversity, independence and experience) and recommend any changes.
• Succession planning for Directors and senior executives, taking into account the
challenges and opportunities facing the Company and the skills and expertise therefore
needed in the future.
• Identifying and nominating candidates for Director positions, for approval by the Board.
The Committee’s terms of reference are available on the Group’s website. The Committee
meets at least three times a year. During 2023, the Committee met four times.
85
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Director induction, training
and development
As Chairman, I am responsible for the formal
induction of all new Directors, assisted by
the Company Secretary. Each new Director
is provided with the necessary background
materials to familiarise themselves with the
Group, and meetings are arranged with other
members of the Board, Executive Committee
members, senior leadership and the Company’s
external advisers.
Site visits to businesses around the Group are
arranged to provide a deeper understanding
of the Group’s operations, risks and strategic
priorities. A detailed induction programme is
being undertaken by Karen Hayzen-Smith and
Shian Jastram, which includes training from the
Company’s external legal advisers on directors’
responsibilities, the Corporate Governance
Code and Market Abuse Regulation, as well as
in-person site visits and management meetings
at the Group’s key sites.
Assisted by the Company Secretary, I am
also responsible for the Board’s training and
professional development. Directors were
provided with presentations during 2023
on topics such as sustainability reporting,
investor relations, developments in corporate
governance and financial reporting, as well as
Directors’ remuneration. Directors will continue
to receive regular training updates from
appropriate internal and external specialists
on governance and risk issues, and on financial
and reporting standards. In addition, Directors
are fully aware of their own responsibility for
identifying and satisfying their own specific
training requirements. In 2023, the Board visited
key sites, and had management and employee
engagement meetings, in order to deepen the
Board’s understanding of the operations of the
Group’s businesses and teams.
Board composition and
time commitment
There were eight Directors on the Board as at
31 December 2023, comprising the Non-
Executive Chairman, Chief Executive Officer,
Chief Financial Officer and five Independent
Non-Executive Directors. The names and
biographical details of the members of the
Board are set out on pages 77 to 79.
The Board judged the Non-Executive
Chairman to be independent at the time of his
appointment and the Board considers all other
Non-Executive Directors to be independent
under the terms of the Code.
Under the Code, the reasons for the Board
permitting its members to enter into significant
new external appointments should be explained
in the Annual Report. On 26 October 2023,
the Company announced the appointment of
Angus Cockburn as a Non-Executive Director
of BAE Systems plc (BAE), with effect from
6 November 2023. It was also announced
that he would step down as a Non-Executive
Director of STS Global Income & Growth
Trust plc (STS) at its 2024 AGM. The Board
considered his proposed new role at BAE
noting that he would shortly be stepping down
from his role at STS, and concluded that
he would continue to have sufficient time to
commit to the Company in his role as Chairman.
When considering Karen Hayzen-Smith’s
appointment as Chief Financial Officer, the
Board noted her appointment as Governor of
Oxford Brookes University and Chair of Audit
Committee. The Board concluded that this
appointment was not strictly comparable to
a non-executive directorship role at a publicly
listed company in terms of time commitment,
and therefore would not compromise her ability
to dedicate appropriate time and diligence to
her role as CFO.
Directors standing for election
or re-election
The Committee discussed and unanimously
recommended that each of the Directors should
be put forward for election or re-election by the
shareholders at the AGM scheduled for 30 May
2024, with the exception of Aedamar Comiskey
who will retire at the conclusion of the AGM. In
making this recommendation the Committee
members (with each Committee member
recusing themselves from the discussion
and recommendation in relation to their own
re-election) have evaluated each Director in
terms of their performance, their commitment
to the role and their capacity to discharge their
responsibilities in an effective manner given their
other time commitments and responsibilities.
Board evaluation
The Board carries out a Board and Committee
evaluation each year, and in 2021, the Board
appointed the Chartered Governance Institute
(CGI) to undertake an external evaluation. The
CGI has no other connection to the Company
or any individual Director.
For 2023, the Board undertook an internal
evaluation of its own performance, and that
of the Remuneration, Nominations and Audit
Committees, and the Chairman, supported by
the Company Secretary. The results of the 2023
evaluation and resulting actions are set out in
the graphic on page 83.
Following the internal evaluation, the Committee
believes the Board functions effectively and
efficiently, and is appropriate for a Group
of its size. The Committee considers that
each Director demonstrates the knowledge,
ability and experience required to perform the
functions of a director of a listed company
and is of the calibre necessary to support and
develop the Company’s long-term strategy and
success.
• The Nominations Committee agreed
a detailed candidate profile for a new
Independent Non-Executive Director,
setting out the capabilities and
experience required.
• Korn Ferry was appointed by the
Committee to support the process
and identify candidates fitting the
agreed profile.
• The Nominations Committee
appointed the Chairman to work with
Korn Ferry on the process to appoint
a new Independent Non-Executive
Director, regularly reporting back to the
Committee on progress.
• Following the interviews, each person
who had met with the shortlisted
candidates provided feedback to the
Chairman.
• The Nominations Committee
discussed the feedback received and
the relative merits of each candidate.
• The Committee agreed to recommend
to the Board that Shian Jastram be
appointed as Independent Non-
Executive Director.
• The Board approved the appointment,
to take effect on 1 March 2024.
• Following engagement, Korn Ferry
created a long list of potential
candidates, which was shared by
the Chairman with the Nominations
Committee.
• The Nominations Committee agreed
a shortlist of candidates to be invited
for interview by members of the
Committee and the Group CEO.
Process leading to the appointment of Shian Jastram
86
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
NOMINATIONS COMMITTEE REPORT CONT.
The Committee also considers that no
individual or small group of individuals
dominates discussions or the decision-
making process. With these findings in mind,
it is not expected that the Board evaluation
will influence Board composition in the
short-term.
Diversity and inclusion
James Fisher recognises the importance of
diversity of thought, skills and experience
in the effective functioning of the Board, its
Committees and the wider organisation.
This diversity may arise from any number of
sources, including differences in age, gender,
ethnicity, disability, sexual orientation, cultural
background and religious belief.
The Board’s intention is to maintain diversity
in all its senses in its own constitution, and
to encourage the same throughout the
organisation. The Board Diversity Policy is
a policy which acknowledges the importance
of diversity and includes an explicit
requirement to take into account diversity
when considering appointments to the Board.
The Board and its Committees are committed
to ensuring that all have an equal chance of
developing their careers within our Group.
The Board had regard to the Board Diversity
Policy during the appointment process
of Shian Jastram, particularly the need
to maintain gender balance on the Board
and appoint candidates with international
exposure, to promote the Company’s
strategic aims.
The promotion of a diverse and inclusive
workplace by recruiting where we work,
enforcing pay parity, and celebrating
the uniqueness of individuals and their
communities is one of the key foundations
of the Group’s sustainability policy. During
the year, the Board and the Committee have
discussed with the Chief HR Officer the
progress made on implementing initiatives to
promote diversity and inclusion throughout
the Group. More detail on the progress of
those initiatives can be found on page 38.
There has been progress in increasing the
international and gender diversity of the
Group’s senior management group, but
the Company is aware that more needs to
be done to improve the gender and ethnic
mix in the leadership population. The Board
supports the aims of the FTSE Women
Leaders and Parker Reviews and is mindful
of the targets specified by recent updates to
the Listing Rules. The data required by Listing
Rule 9.8.6 as at 31 December 2023 is set
out in the table below. The data is collated
by the Group’s HR function and confirmation
provided by the Board and Executive
Management. As demonstrated below, as
at 31 December 2023, the Company met all
three of the Board-level targets set by the
Listing Rules:
• More than 40% of the Board were women
(50%).
• Two of the four senior positions on the
Board were held by women (CFO and SID).
• One of the directors was from an ethnic
minority background.
The Chief Executive Officer chairs an
Executive Committee of nine people, with
women representing 33% of the Executive
Committee as at 31 December 2023. Apart
from creating a forum to bring together a
range of specialist skills and experience it also
acts as a platform for our succession strategy
into the future.
2024 priorities
The Committee’s priorities for 2024 are:
• Considering the key skills, experience and
requirements for succession planning for
the Board.
• Reviewing the succession planning process
for the Executive Committee and senior
leadership positions.
• Accelerating the Group’s progress towards
increasing the relative diversity in senior
management positions.
• Conducting an external Board evaluation.
Angus Cockburn
Chair of the Nominations Committee
16 April 2024
Gender representation of the Board and Executive Management as at 31 December 2023
Number
of Board
members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number
in executive
management
(1)
Percentage
of executive
management
Men 4 50% 2 7 70%
Women 4 50% 2 3 30%
Not specified/
prefer not to say – – – – –
Ethnic background of the Board and Executive Management as at 31 December 2023
Number
of Board
members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number
in executive
management
(1)
Percentage
of executive
management
White British
or other White
(including minority-
white groups) 7 88% 4 10 100%
Mixed/Multiple
Ethnic Groups – – – – –
Asian/Asian British 1 12% – – –
Black/African/
Caribbean/
Black British – – – – –
Other ethnic
group, including
Arab – – – – –
Not specified/
prefer not to say – – – – –
1. For the purposes of the Listing Rules, “executive management” is defined as the executive committee or most senior
executive or managerial body below the board, including the company secretary but excluding administrative and support
staff. At James Fisher, "executive management" therefore comprises the Executive Committee and the Company Secretary
(even though the Company Secretary is not a member of the Executive Committee).
87
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
AUDIT COMMITTEE REPORT
Dear Shareholders
I am pleased to present the report of the Audit
Committee for the year ended 31 December
2023, which provides an overview of the Audit
Committee’s role in supporting the Board in
discharging its responsibilities for oversight
and monitoring of financial reporting, risk
management and internal control. It is my
responsibility as Chair of the Audit Committee
to ensure that the Audit Committee fulfils its
responsibilities in a rigorous and effective
manner.
The Audit Committee remains focused on
ensuring compliance with the UK Corporate
Governance Code 2018 (the Code) and is
committed to ensuring the highest standards
of corporate governance. In line with the Code,
this report seeks to focus on specific aspects
considered by the Audit Committee during
the year and aims to provide assurance to our
shareholders that the control environment of
the Group is being properly supervised and
monitored.
During the year, the Committee received
regular updates from BDO regarding an internal
controls enhancement programme with a
view to identifying any gaps and improving the
internal controls framework across the Group.
Following the challenging 2022 full year results
and Annual Report and Accounts process,
overseeing management’s 2023 full year results
and external audit action plan has been an area
of focus for the Committee. The Committee
also considered the responses provided to the
Financial Reporting Council (FRC) following its
review of the 2021 Annual Report.
I am satisfied that the Audit Committee is
properly constituted with written terms of
reference, which include all matters referred to
in the Code and is provided with good quality
information to allow proper consideration to be
given to topics under review. I am also satisfied
that meetings are scheduled to allow sufficient
time for discussion and to ensure that all
matters are considered fully.
The Audit Committee’s terms of reference
are available on our website.
Of particular importance is the requirement
to ensure that the Group’s financial reporting
is fair, balanced and understandable.
We therefore review all the Group’s financial
reports before publication, including where
necessary alternative performance measures,
and we are satisfied that they provide a fair,
balanced and understandable assessment
of the Group’s position and performance.
Audit Committee composition
and operation
The Audit Committee met on six occasions
during the year, with meetings scheduled
to align with the Company’s external
financial reporting obligations. Details of the
attendance of individual Directors can be
found on page 71. The Audit Committee
is attended by the Committee members,
the Company Chairman, Chief Executive
Officer, Chief Financial Officer, Group General
Counsel, Company Secretary, Group Financial
Controller and Head of Group Internal
Controls, together with representatives of
the external auditor, and the internal auditor.
The Audit Committee will continue to meet
on an ad hoc basis outside the scheduled
timetable, as required.
At each scheduled meeting the Audit
Committee provides the opportunity to
discuss matters privately with the external
auditor and the internal auditor. In addition,
the Audit Committee Chair holds regular
meetings or phone calls with the reporting
partner of the external auditor, KPMG, and
the relevant partner from the internal auditor,
PwC, to discuss matters related to the
Group. Following the challenging 2022 full
year results process, the Audit Committee
Chair also met with KPMG’s Chief Risk
Officer – Audit, to discuss the 2023 external
audit process.
The Board is satisfied that as Chair of
the Audit Committee, I have significant
and relevant financial experience being a
chartered accountant who formerly served
as finance director of a FTSE listed company.
I have been attending audit committee
meetings for 25 years and have chaired three
other FTSE listed company audit committees.
The members of the Audit Committee
collectively have broad financial, commercial,
professional, and technical experience and
are considered to have competence relevant
to the sectors in which the Group operates.
MEMBERSHIP SINCE
Justin Atkinson (Chair) 2018
Aedamar Comiskey 2014
Inken Braunschmidt 2019
Kash Pandya 2021
Claire Hawkings 2022
Shian Jastram 2024
Key objectives
To monitor the integrity of the Group’s reporting process and financial management and
to ensure that risks are carefully identified and assessed and that sound systems of risk
management and internal control are in place.
Key responsibilities:
• The accounting principles, policies and practices adopted in the Group’s accounts.
• Reviewing external financial reporting and associated announcements.
• Managing the appointment, independence, effectiveness and remuneration of the Group’s
external auditor, including the policy on the award of non-audit services.
• Initiating and supervising a competitive tender process for the external audit when next
required.
• The resourcing, plans and effectiveness of Internal Audit.
• The adequacy and effectiveness of the internal control environment.
• The Group’s risk management processes and performance.
• The establishment and oversight of fraud prevention arrangements.
• The provision of advice to the Board on whether the Annual Report and Accounts, when
taken as a whole, is fair, balanced and understandable and provides all the necessary
information for shareholders to assess the Company’s position, performance, Business
model and strategy.
The Committee holds a minimum of three scheduled meetings annually. During the year,
the Committee met six times, principally as a result of the delayed release of the Company’s
2022 full year results.
88
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
AUDIT COMMITTEE REPORT CONT.
Whilst each Non-Executive Director will largely
manage their own continuing development,
the Audit Committee receives technical and
governance updates throughout the year
from the external auditor, external advisers
and may request additional information,
as required.
Details of the Audit Committee’s specific
responsibilities and how it exercises those
responsibilities are set out in the remainder
of this report. The performance of the Audit
Committee (alongside the Board and the
other Committees) was internally evaluated
during the year. The results of this review
provided assurance that the Audit Committee
discharges its duties and responsibilities in
accordance with its terms of reference.
Matters of particular focus for the
Committee during the year
Financial and narrative reporting
• Review of the full year results and
consideration of specific disclosures and
adjusting items.
• Consideration of key accounting
judgements.
• Evaluation of the going concern and
viability statements.
• Review of the Annual Report and Accounts
including an assessment to ensure
that the Report is fair, balanced and
understandable.
• Approval of the Committee Report.
• Review of FRC correspondence and the
Company’s response.
• Review of the half year results and going
concern statement.
• Assessing management’s Annual Report
and Accounts plan and external audit
preparation.
External audit
• Receiving updates from external auditors
on the progress of the audit.
• Consideration of the external auditor’s
report.
• Reviewing the external audit plan and
strategy.
• Considering the results of the evaluation of
KPMG’s effectiveness as external auditor.
• Approving the fee of the external auditor.
• Consideration of the external auditor’s half
year report.
Internal audit
• Approving the internal audit plan.
• Receiving reports from internal audit on
progress and activity in accordance the
audit plan.
• Approving the Internal Audit Charter.
• Considering results of the evaluation of
PwC’s effectiveness as internal auditor.
Internal Control and Risk Management
• Receiving updates regarding the progress
made to improve the Group’s risk
management framework and system of
internal controls following the findings
from the work undertaken on behalf of the
Committee by PwC.
• Review of the Group’s principal and
emerging risks.
• Status updates regarding the
implementation of the internal controls
enhancement programme.
• Reviewing of adequacy and effectiveness
of Group’s internal controls and risk
management systems.
Financial reporting
The Audit Committee’s primary responsibility
in relation to the Group’s financial reporting
is to review and challenge where necessary,
with both senior management and the
external auditor, the appropriateness of the
Group’s Interim Statement and Annual Report
and Accounts, with particular focus on:
• Whether suitable accounting policies have
been adopted and properly applied.
• The clarity of disclosures and compliance
with financial reporting standards and
relevant financial and governance reporting
requirements.
• Whether management has made
appropriate estimates and judgements in
material areas or where there has been
discussion with, or issues raised by the
external auditor.
• Whether the Annual Report and Accounts
taken as a whole is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Group’s position and
performance, Business model and strategy.
Fair, balanced, and
understandable
In making its assessment on whether
the Annual Report and Accounts is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the performance, strategy and
Business model of the Company, the Board
has taken into account its own knowledge
of the Group, its markets, its strategy
and performance in the year, a review of
content of the Annual Report and Accounts
and other periodic financial statements
and announcements, together with the
recommendation from the Audit Committee.
Key considerations of the Audit Committee
have included ensuring that there is
consistency between the accounts and
the narrative provided in the front half of
the Annual Report and Accounts, and that
there is an appropriate balance between
the reporting of weaknesses, difficulties and
challenges (in particular with reference to
the Group’s principal risks and uncertainties,
as set out on pages 56 to 66), as well as
successes, in an open and honest manner.
Going concern and viability
statement
The analysis of the evidence underpinning
the going concern basis of accounting and
viability statement in the 2023 Annual Report
continues to be an area of focus for the
Group.
The Committee received reports and
analysis prepared by management, taking
into account the external auditor’s review of
these papers and their observations. These
included details on the selection of the going
concern and viability assessment periods, the
key assumptions, the forecasting process,
the committed facilities available, and the
mitigations within direct control of the Group.
The Committee considered both base case
cash flow forecast and severe but plausible
downside scenario analysis, including the
assessment of the principal risks facing the
Group which may potentially impact the
Group’s financial position.
The Audit Committee is satisfied that the
going concern basis of preparation continues
to be appropriate in preparing the financial
statements and that it is reasonable to expect
that the Group will be able to continue to
operate and meet its liabilities, as they fall
due, for at least 12 months since the date
of the financial statements. The Committee,
however, recognise that the reliance on
successful mitigating actions and, potentially,
a waiver of the June 2024 mandatory
repayment under the combined severe but
plausible scenario, and the ability to refinance
the RCF, which matures within the going
concern assessment period, indicate the
existence of a material uncertainty, related to
events or conditions that may cast significant
doubt on the Group’s and the Company’s
ability to continue as a going concern and,
therefore, that the Group and Company may
be unable and to realise their assets and
discharge their liabilities in the normal course
of business.
89
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Significant issues and accounting judgements
The Audit Committee has a primary responsibility to monitor the integrity of the Annual Report and Accounts and the Interim Statement of the
Company, which includes reviewing and discussing papers prepared by management and taking account of the views of the external auditor. The key
areas reviewed in the 2023 financial year are set out below. The Audit Committee considered these matters and how they were tested and reviewed,
including the significant financial reporting judgements and associated disclosures.
SIGNIFICANT ISSUE HOW THE ISSUE WAS ADDRESSED BY THE COMMITTEE
Impairment of goodwill
Key estimates are made in relation to the assumptions used
in calculating discounted cash flow projections to value the
CGUs containing goodwill. The key assumptions are the
five-year revenue growth rate, terminal value growth rate and
discount rate.
We reviewed a report from management explaining the methodology used,
assumptions made and significant changes from those used in prior years.
We challenged management on the rationale behind the key assumptions and
sensitivities such as discount rates and growth rates in the goodwill value-in-
use calculations, especially within Defence and Offshore Wind CGUs to ensure
we were satisfied on their reasonableness. The impairment reviews were an
area of focus for KPMG who reported their findings to us. We concluded
that management’s key assumptions and disclosures are reasonable and
appropriate.
Valuation of the PLC Company only investments
Estimates are made in relation to the assumptions used in
calculating discounted cash flow projections to value the
investments. The key assumptions are the five-year revenue
growth rate, terminal value growth rate and discount rate.
The Company holds significant investments in various subsidiaries of the
Group. The Committee considered the recoverability of the carrying value of
those investments in subsidiaries and concurred with management's approach
to evaluating the recoverable amounts.
Retirement benefits obligations
Key estimates are made in relation to the assumptions
used to value retirement benefit obligations under Shore
staff, MNOPF and MNRPF pension schemes, including the
discount rate and inflation. The key assumptions are based
on recommendations from independent qualified actuaries.
We received a report from management which summarises the key
assumptions used to value the liabilities of the retirement benefit plans.
We concluded that the assumptions used, accounting treatment, and the
associated disclosures are appropriate for the Group’s retirement benefit
obligations.
Assets held for sale and discontinued operations
Judgements are made in relation to assessing the fair value
less costs to sell of businesses classified as “held for sale”
and whether they constitute discontinued operations.
The Audit Committee considered the appropriateness of asset held for sale
classifications for various assets and businesses. Following the decision to
close the Subtech Europe business within the Energy Division we considered
whether it constituted discontinued operations.
The Committee reviewed the methodology and estimates used in arriving at
the fair value of assets held for sale and liabilities associated with assets held
for sale and considered them appropriate and noted that classifications as
“held for sale” was appropriate. We consider the conclusion that Subtech
Europe does not constitute discontinued operations appropriate.
Provisions and contingent liabilities
Considerations are made in determining provisions in the
accounts for disputes and claims which arise from time-to-time
in the ordinary course of business and in determining appropriate
disclosures in respect of contingent liabilities.
We received a report from management which provides information in
respect of disputes and claims and identifies the accounting and disclosure
implications which were challenged and discussed. The report included an
assessment of the amounts provided for in relation to James Fisher Nuclear
Limited (JFN) Parent Company guarantees. We concurred with management's
conclusions regarding provisioning and contingent liability disclosures.
Alternative Performance Measures (APM) and adjusting items
Considerations are made in relation to appropriateness of
classifying certain items as adjusting/non-underlying and in
relation to inclusion of APMs and the associated disclosures.
The Committee gave careful consideration to the judgements made in the
disclosure of alternative performance measures and adjusting items as set out
in Note 2. In particular, the Committee sought to ensure that the treatment
followed consistent principles and that reporting in the accounts is suitably
clear and understandable. The Committee challenged the rationale behind
the presentation of the costs as non-underlying, with particular focus on
restructuring and refinancing costs. We concluded that management has
appropriately included those costs as adjusting items.
90
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
AUDIT COMMITTEE REPORT CONT.
Risk management and
internal controls
The Board has overall responsibility for
the Group’s risk management and internal
control systems, including financial,
operational and compliance controls. The
Audit Committee is responsible for monitoring
and reviewing the effectiveness of these
systems, the Group’s internal audit function
(which, as disclosed last year, is outsourced
to PwC) and reporting to the Board. This work
was informed by regular updates from PwC
and a self-assessment process undertaken
across the Group. In addition, the Head of
Group Internal Controls attends the Audit
Committee and provides updates on internal
controls and readiness for the upcoming
internal controls reforms.
As reported in 2022, PwC were engaged by
the Committee to carry out an independent
review in relation to the Group's risk
management controls and systems. During
the year, the Company implemented PwC's
recommendations, resulting improvements
to the Group's risk management framework.
Through the course of the year, the Board
received updates from the Group Risk
Committee, via the Chief Financial Officer, and
has reviewed the effectiveness of the Group’s
systems of risk management and internal
controls including financial, operational and
compliance controls.
The Audit Committee receives reports on
any internal control deficiencies, which are
mainly identified from internal audits and the
internal controls enhancement programme.
The external audit work continues to highlight
the informal nature of many of the Group’s
controls and during the year identified control
deficiencies together with recommendations
for improvement. The Audit Committee
reviews all such reports with both the internal
and external auditors, and holds relevant
management teams to account, to ensure
that appropriate and timely actions are
identified and completed. The internal control
deficiencies are graded and an action plan
with associated timeframes is agreed with the
relevant management team. Progress against
each plan is reported to the Audit Committee
on an ongoing basis until the actions are
complete. In addition, the internal controls
enhancement programme, supported by
BDO, has been conducted and overseen by
the Committee.
During the year, although the Audit Committee
noted an improvement in the Group’s risk
management and internal control systems
following the implementation of PwC's
recommendations, enhancements are still
required, in particular around the formalisation
of the Group’s compliance programme,
financial reporting and forecasting and
procedures to ensure compliance with the
requirements of the RCF. Following the
Committee’s recommendation, the Board
approved the Group’s risk management
and internal control systems improvement
initiatives, which will be implemented over the
coming year.
A more detailed summary of the Group’s risk
management and internal control systems is
set out in the principal risks and uncertainties
section of the Strategic report on pages
56 to 66, along with a description of some
of the actions taken and planned to bring
improvements to those controls.
Anti-bribery and corruption
We have an established anti-bribery
and corruption policy aimed at ensuring
adherence to the associated legal and
regulatory requirements. The policy includes
sections governing the following:
• Group’s zero-tolerance approach to
payment of bribes.
• Reasonableness and proportionality of
offering or receipt of gifts or hospitality.
• Appointment and management of third
parties who are engaged to assist with our
sales and marketing activities, including
approval via procedures which include
appropriate internal and external due
diligence using web-based tools provided
by Control Risks (the international risk
consultancy). The Group conducts robust
due diligence on its agent and joint venture
relationships prior to engagement, and
requires them to comply with the Group’s
policy and relevant law. The Board
receives reports on agent and joint venture
relationships twice a year.
• Group’s prevention of facilitation payments.
The Group has anti-bribery and corruption
training in place which is provided as part of
the employee induction programme.
External audit performance
The Audit Committee recognises that
the quality of an audit is of paramount
importance. The Audit Committee continually
assesses the performance of the external
auditor, KPMG, from the initial planning stage
when they receive and discuss the audit plan
and proposed strategy, approach, objectives,
significant risk areas and other areas of focus,
drawing on input from the Group’s senior
management, until conclusion of the audit.
The Audit Committee conducts annually a
formal assessment of the external auditor’s
performance based on its own experience
and that of the Group’s senior management.
The most recent assessment considered the
relationship between the external auditor and
the Group, the external auditor’s knowledge
of the Group’s business, its capability,
planning and execution of the external
audit, fees and independence. The results
of the review were considered by the Audit
Committee and discussed with KPMG, with
the main areas of focus identified as being
around recent increases in fees, as well as
planning and communications regarding
significant financial reporting judgements.
The Committee is satisfied that KPMG
provided an effective audit and remain
independent and objective. KPMG are
recommended for re-appointment at the
Company’s forthcoming AGM.
External audit appointment
and fee
KPMG were first appointed to audit the
Company in 2008. They were re-appointed
external auditor of the Company in 2017,
following a competitive tender process.
Andrew Campbell-Orde was appointed as
lead audit partner for the 2023 financial year.
The Committee believes it is in the best
interests of its shareholders to consider a full
tender for the Group’s external audit services,
subject to its annual reviews, likely in the year
ending December 2026. This allows for any
potential new audit firm to take up the role for
the year ending December 2027.
Details of the external auditor’s remuneration
for 2023 are set out in Note 4 on page
143. There was a material increase in the
audit fee in 2022 following the delay in the
announcement of the results by around one
month due to negotiations relating to the RCF
and the resultant increase in audit work on
the going concern and viability statements
together with increased work following
the FRC review of the Annual Report for
2021 and subsequent enhanced disclosure
requirements. The audit fee for 2023 has
reduced somewhat, although given the
general market background of increasing
fees and the recent circumstances at James
Fisher, the audit fee remains high relative to
the size of the Group.
The Company has complied throughout the
financial year under review, and up to the
date of this report, with the provisions of the
Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014.
91
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Independence and objectivity
The Audit Committee accepts that certain
non-prohibited work is best undertaken by the
external auditor and to safeguard the external
auditor’s objectivity and independence the
Audit Committee has a policy on engagement
of the external auditor for non-audit services,
which includes a requirement for Audit
Committee approval if the permitted services
exceed a threshold of £50,000.
The Audit Committee reviews the policy
annually and recommends it to the Board for
approval. In accordance with relevant Audit
Regulations and standards published by the
FRC, the Audit Committee has not engaged
the external auditor on matters restricted by
those Regulations and standards, and fees
from permitted work (including the Interim
Statement) have been pre-approved by the
Audit Committee. KPMG were not instructed
to carry out any prohibited non-audit services
during 2022.
During the year, KPMG provided non-audit
services to the Group in respect of the interim
statement for the period ended 30 June
2023. The fee amounted to £0.2m and was
approved by the Audit Committee.
Internal audit
The Audit Committee is responsible for
reviewing the work carried out by the internal
audit function which considers, reviews
and reports on key commercial, financial
and control risks across the Group. The
internal audit function undertakes their work
in accordance with an annual programme
approved by the Audit Committee. The scope
of each internal audit review is agreed by
the Audit Committee in consultation with the
internal auditor to ensure that key areas for
each business are addressed.
The role of internal audit was outsourced
in its entirety to PwC in April 2022. In total,
11 internal audits were undertaken in 2023
(2022: 10). Reports in relation to the internal
audits carried out were presented to the
Audit Committee for review and shared
with senior managers for action, as well as
being provided to the external auditor for
information. The actions identified by the
internal audit function were followed up with
management for response and identification
of appropriate actions to mitigate the
associated risks. There has been continued
focus by senior management to improve
the control environment through the timely
closure of audit actions.
There were no findings in the internal audit
reports which are considered material to
the Group, although PwC's work to date
has highlighted a number of areas across
our businesses for improvement and their
recommendations are in the course of
being implemented. The internal controls
enhancement programme is identifying
improvements to strengthen the Group's
control environment, which will continue
to be an area of focus for the Committee.
The internal audit function is responsible to
the Committee for ensuring that all required
actions are followed up and completed in a
timely manner.
Following review, the Audit Committee
recommended, and the Board concluded,
that the Group’s internal audit process was
appropriate and effective. The effectiveness
of the Group’s internal audit function is
continually reviewed, including an annual
formal review undertaken by the Audit
Committee, with the benefit of feedback from
Group businesses and functions which have
been subject to internal audit during the year.
FRC correspondence
In November 2022, the Company received
correspondence from the FRC in relation to
its review of the Company’s Annual Report
and Accounts for 2021 in accordance with
part 2 of the FRC Corporate Reporting
Review Operating Procedures, which
requested further information in relation to the
Company’s compliance with relevant reporting
and disclosure requirements in certain areas.
As reported in last year’s report, the
observations and recommendations of the
FRC were incorporated into the 2022 Annual
Report and Accounts, which resulted in the
FRC closing its enquiries, in August 2023.
Revised version of the UK
Corporate Governance Code
On 22 January 2024, the FRC announced
revisions to the UK Corporate Governance
Code, with prioritised revisions in relation
to internal controls. The revised Code will
apply to financial years beginning on or after
1 January 2025, with disclosure requirements
in relation to internal controls applying to
financial years beginning on or after 1 January
2026. The actions resulting from the internal
controls enhancement programme to date
indicate that the Company will be better
placed to meet the requirements of the
revised Code, although there is still much
work to be done.
ESG reporting
The ESG reporting environment has been
an area of significant regulatory development
recently, and this is set to continue.
The Group continues to strengthen its
ESG-related disclosures, reporting under
the recommendations of the TCFD
(Task Force on Climate-related Financial
Disclosures) on pages 41 to 45 and
Streamlined Energy and Carbon Reporting on
pages 112 to 114.
The Directors have received briefings during
the year covering the evolving reporting
landscape, recognising the increasing link
between ESG-related measures and the
presentation of financial information and
associated business commitments.
Conclusion
The Audit Committee operates in an open
manner, has clear and concise channels of
communication with the Board and, should
it be necessary, I would be available to meet
with investors. I will also be available to
answer any questions at the AGM.
Justin Atkinson
Chair of the Audit Committee
16 April 2024
92
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT
ANNUAL STATEMENT
Introduction by Inken
Braunschmidt, Chair of the
Remuneration Committee
On behalf of the Board and the Remuneration
Committee (the Committee), I am pleased
to present the Directors’ remuneration
report for the year ended 31 December
2023. This is my first Remuneration report
as Chair of the Committee, and I would like
to start this Annual statement by thanking
Aedamar Comiskey for her stewardship
of the Committee since 2018, and her
guidance over the recent months as we have
transitioned this role.
As usual, this report is comprised of two
parts, namely:
Part 1 – Remuneration policy report – which
sets out the revised Directors’ remuneration
policy that will be put to shareholders for
approval in a binding shareholder vote at the
2024 AGM; and
Part 2 – Annual report on remuneration –
which sets out payments and awards made
to the Directors, details the link between
Company performance and remuneration
for 2023, and explains how we intend the
remuneration policy will operate for 2024.
This part of the report will be put to an
advisory vote at the 2024 AGM.
Work of the Committee
during 2023
During 2023, the Committee undertook the
following main activities, having due regard
at all times to the broader performance
context and the experience of the Group’s key
stakeholders:
• Assessing performance against the targets
set for the 2022 annual bonus awards.
• Setting the targets for the 2023 annual
bonus.
• Assessing performance against the
targets set for the 2020 LTIP awards and
determining vesting levels.
• Agreeing the award levels and performance
targets for the 2023 LTIP awards.
• Approving the salary increases for the CEO
and members of the Executive Committee.
• Agreeing the leaving arrangements for
Duncan Kennedy and Karen Hayzen-
Smith’s package on appointment.
• Agreeing the Chairman’s fee.
• Reviewing the Directors’ remuneration
policy.
• Consulting with major shareholders on the
proposed policy and its implementation
in 2024.
In discharging its responsibilities, the
Committee seeks to ensure that its policy
and practices remain consistent with the six
factors set out in Provision 40 of the 2018
UK Corporate Governance Code:
• Clarity – The proposed policy represents
minimal change to our current policy, which
is understood by our senior executive team
and which we have sought to articulate
clearly to our shareholders (both on an
ongoing basis and during the recent
shareholder consultation).
• Simplicity – The Committee is mindful of the
need to avoid overly complex remuneration
structures which can be misunderstood and
deliver unintended outcomes. Therefore,
a key objective of the Committee is to
ensure that our executive remuneration
policies and practices are straightforward to
communicate and operate.
• Risk – Our policy has been designed to
ensure that inappropriate risk-taking is
discouraged and will not be rewarded.
We do this via: (i) the balanced use of both
short-term (annual) bonuses and longer-
term incentive plans (LTIPs), which employ
a blend of financial, non-financial and
shareholder return targets; (ii) the significant
role played by equity in our incentive plans;
and (iii) malus/clawback provisions.
• Predictability – Our incentive plans are
subject to individual caps and clearly
defined performance targets, with our share
plans also subject to market standard
dilution limits.
• Proportionality – There is a clear link
between individual reward, delivery of
strategy and the Group’s long-term
performance. In addition, the significant
role played by incentive/“at-risk” pay,
together with the structure of the Executive
Directors’ service contracts, ensures that
poor performance is not rewarded.
• Alignment to culture – Our executive pay
policies are aligned to culture through the
use of metrics in both the annual bonus
and LTIP that measure how we perform
against our KPIs.
MEMBERSHIP SINCE
Inken Braunschmidt, Chair of the Remuneration Committee since 9 November 2023 2019
Aedamar Comiskey, Chair of the Remuneration Committee until 9 November 2023 2014
Justin Atkinson 2018
Kash Pandya 2021
Claire Hawkings 2022
Shian Jastram 2024
Key objectives
The Committee’s objectives are to create a fair, equitable and competitive total reward
package that supports the Group’s vision and strategy; and to ensure that rewards
are performance-based, encourage long-term shareholder value creation and are
straightforward to communicate and operate.
Key responsibilities:
• Designing the remuneration policy.
• Implementing the remuneration policy.
• Ensuring the competitiveness of reward.
• Designing the incentive plans.
• Setting incentive targets and determining award levels.
• Overseeing all share awards across the Group.
The Committee meets at least three times a year.
93
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Pay and performance in 2023
James Fisher made further progress in its
recovery and strategic transformation in 2023,
with performance outcomes against our
primary financial measures as follows:
• Underlying operating profit from continuing
operations of £29.6m.
• Operating cash flow (as defined for
incentive purposes) of £63.6m.
• Underlying diluted earnings per share of
11.4p.
Executive Directors’ bonus potential for
2023 was capped at 100% of salary, with
75% based on meeting the Group’s financial
objectives and 25% based on achievement of
strategic objectives. As set out on page 102,
the formulaic achievement of the stretching
targets set at the start of 2023 warranted a
bonus payout of 35.9% of maximum. The
Committee assessed this result in the context
of the Group’s underlying performance and
concluded that it fairly reflected the significant
contribution of each of our Executive
Directors to the Group’s ongoing recovery, as
well as the progress against its transformation
objectives (including its ESG roadmap). In
this context, the Committee resolved not to
exercise any discretion with respect to the
formulaic 2023 bonus outcome.
Awards granted under the LTIP in 2021 are
ordinarily eligible to vest in 2024, subject
to the achievement of pre-defined 3-year
performance targets. However, as a result of
failing to hit the threshold level set for earnings
per share (EPS) and total shareholder return
(TSR), the 2021 LTIP awards will lapse in full.
Neither Jean Vernet nor Karen Hayzen-Smith
are participants in the 2021 LTIP award cycle,
having joined the Group in 2022 and 2023,
respectively.
Further details of the targets and achievement
against them for the annual bonus and LTIP
are set out on pages 102 to 103.
Finally, as set out in last year‘s Report
the salary review for Executive Directors
was delayed until later in 2023, at which
point the Committee resolved to award an
increase of 5% to the CEO (to £556,500 per
annum), effective 1 July 2023. In doing so,
the Committee took into account that this
increase was lower (on an annualised basis)
than those awarded to the wider workforce
(5% from 1 January or, for higher earners, 5%
delivered in two stages). Duncan Kennedy,
having served notice in mid-July and prior to
the delayed review process, was not eligible
for a salary review in 2023.
Executive Director changes
during the year
As announced in August 2023, Karen
Hayzen-Smith was appointed as Chief
Financial Officer and took up this position on
1 December 2023, at which point Duncan
Kennedy stepped down from the Board.
Mr Kennedy remains an employee of the
Company to enable a smooth and effective
transition of responsibilities. Details of the
leaving arrangements for Mr Kennedy and
Ms Hayzen-Smith’s package on appointment
– both of which are in line with our policy and
normal remuneration practices – are set out
on page 104.
2024 Directors’ remuneration
policy
During the year, and ahead of the requirement
for this to be submitted for shareholder approval
at the 2024 AGM, the Committee undertook
a comprehensive review of the Directors’
remuneration policy to ensure that it continues
to support the business strategy, remains
aligned with market practice and reflects the
governance expectations of our shareholders.
The Committee concluded that the policy
remained broadly fit-for-purpose, but that some
minor changes should be proposed to help
ensure our remuneration policy supports the
Group’s ability through the current period of
transformation to attract, motivate and retain
talented contributors to future success.
Increase the maximum annual bonus
opportunity from 100% to 125% of salary
The current incentive award limits – of 100%
and 200% of salary under the annual bonus
and LTIP respectively – have been unchanged
for several policy cycles. As part of the review
of policy, the Committee considered whether
retaining the existing limits appropriately
supported our philosophy of delivering a
competitive, performance-oriented package
reflective of the calibre, experience and
performance of our Executive Directors. The
Committee concluded that the LTIP award limit
provided an appropriate level of flexibility (the
headroom is currently not utilised fully), but
that the annual bonus opportunity should be
increased to 125% of salary. The Committee
believes the change appropriately upweights
the emphasis in the package on delivery
of the Company’s short-term financial and
strategic priorities, while bringing the aggregate
incentive opportunities for the CEO and CFO
more into line with competitive norms for
our key talent market of FTSE companies
of comparable complexity and scale. The
annual bonus will continue to be subject to
the achievement of stretching financial and
strategic targets aligned to our transformation
programme and growth strategy.
Strengthen bonus deferral requirement
to be one-third of any bonus earned in
shares for two years
The current policy provides for bonus
outcomes of up to 70% of salary to be
payable in cash, with only the increment
above this deferred into shares. Only in
years of strong bonus pay-outs is any bonus
therefore deferred under the current policy. To
strengthen alignment between executives and
shareholders, and support progress against
the in-post shareholding guideline with which
our Executive Directors are expected to
comply over time, we have strengthened the
deferral requirement to mandate the deferral
of one-third of any bonus earned into shares
for two years (such period being aligned with
the LTIP post-vesting holding period and the
timeframe of the post-exit share ownership
requirement introduced in 2021). This change
also further strengthens our ability to enforce
existing malus and clawback provisions,
if required.
Replace the reference to “personal
objectives” in the bonus scorecard with
“strategic objectives”
The current policy specifies that “a minority
of the bonus is based on individual
achievement and personal objectives”.
Currently 25% of the annual bonus is linked
to non-financial objectives. For 2023, these
included quantitative targets for a range of
collective strategic objectives set for the wider
senior leadership team, including employee
engagement, health and safety, as well as
other short-term business priorities aligned to
the transformation plan. Updating the policy
wording to reference “strategic objectives”
better reflects how these measures are – and
going forward will be – set, cascaded into the
organisation and assessed.
Remove reference to the application of
“stretch targets” for LTIP awards above
125% of salary
The Committee reviews and agrees the
measures and targets for the LTIP awards
ahead of each grant cycle. Consistent
with our pay-for-performance philosophy,
stretching targets are applied to all LTIP grants
irrespective of the award opportunity, such
that full vesting requires strong performance
to be delivered across a range of different
metrics. Since a consistent set of targets is
applied to all participants in the LTIP to support
alignment across the senior leadership team,
the policy wording has been simplified to
reflect our current custom and practice. The
LTIP measures and targets for each new award
cycle ordinarily will continue to be disclosed
to shareholders on a prospective basis and
details of the targets applying to the 2024 LTIP
cycle are set out on page 109.
94
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
We wrote to shareholders representing
c.80% of the Group’s issued share capital to
consult them about the proposed changes
to the policy. We received responses and
feedback from shareholders representing
c.66% of issued share capital, which included
strong support for the above proposed
changes to the remuneration policy.
Whilst engaging with shareholders about the
policy, we also informed them of the joining
arrangements for Karen Hayzen-Smith (see
page 104) and presented a proposal for how
the policy would be implemented in 2024. In
particular, shareholder feedback was invited
on the proposal to introduce strategic targets
to the LTIP scorecard, alongside the existing
metrics of EPS, relative TSR and ROCE,
to reinforce the medium-term priorities of
the transformation programme and capture
objectives linked to our ESG strategy.
Shareholders expressed a range of views on
the relative weighting of the LTIP measures,
and consensus for the strategic targets
to be robust, objective and quantifiable.
Shareholders also noted an expectation for
the Committee to avoid any overlap with the
measures used in the annual bonus. The
Committee was grateful for all the feedback
received and we have sought to balance this
input in the final design for the 2024 LTIP.
This included reducing the weighting on
strategic targets in the LTIP (to 20% from the
30% originally proposed), and upweighting
ROCE and relative TSR to 25% each (from
15% and 20%, respectively); the balance of
the scorecard (30%) will be linked to EPS.
We also reconfirm our commitment that the
strategic targets used in the LTIP will be
robust and quantifiable, have a clear link to
the strategy and future value creation and be
sufficiently differentiated from those used in
the bonus. The strategic measures applying
to the 2024 LTIP grant will be gross margin,
new product revenue and progress towards
our net zero commitment. Further information
on these measures and the targets is
provided on page 109.
Wider workforce remuneration
and engagement
In common with most businesses, James
Fisher is dependent on the capability and
commitment of its employees. We value our
employees highly and the Committee receives
regular updates from the management team
on broader workforce matters. In addition
to remuneration decisions, these related to
health and safety, employee wellbeing and
following up on the results of our annual
engagement survey.
As the designated Non-Executive Director
for employee engagement until December
2023, I also participated in a number of
engagement activities during the year to meet
directly with employees. During the year,
members of the Committee also engaged
with employees on a number of matters (more
detail on page 37), including while attending
offsite engagement sessions. Any feedback
on remuneration received through this and
other engagement channels is presented to,
and discussed by, the Committee at its next
meeting; and informs decision-making at both
a Group and business level. In keeping with
our stated commitment, we also progressed
the harmonisation of our pension benefits
for UK colleagues. Benefits were previously
determined by each business unit for its
workforce, but standardising our offering
across the Group supports our principle of
consistency and alignment, including with the
benefits provided at an executive level. Whilst
we did not engage directly with employees on
the new Directors‘ remuneration policy, topics
discussed at the employee engagement
working group included performance
feedback and the Group’s commitment to
personal development, along with Group
financial and strategic progress. In the
UK, we also enable employees to become
shareholders through participation in the
Sharesave, affording them the same voting
rights as other shareholders in relation to
resolutions for approval at the AGM; this
includes the resolutions to approve the
Directors‘ remuneration policy, as well as its
implementation annually.
2024 remuneration
A summary of the proposed application of the
remuneration policy for 2024 is set out below:
• Salary: Jean Vernet’s salary was increased
to £573,195 effective 1 January 2024 (a
3% increase, slightly below the average
increase for the UK workforce of 3.5%).
This differentiation was considered to be
appropriate given the prevailing inflationary
environment and the desire to focus
the available pay budget on supporting
lower-paid colleagues. Karen Hayzen-
Smith’s salary remains at the level set on
appointment (£370,000).
• Pension: no change to the pension
contributions received by the Executive
Directors, which at 7.5% of salary are in
line with the maximum pension contribution
available to other UK employees.
• Annual bonus: this will continue to be
based 50% on underlying operating profit,
25% on operating cash flow, and 25% on
strategic objectives. Subject to approval of
the new remuneration policy at the AGM,
the maximum bonus opportunity for 2024
will be 125% of salary for the Executive
Directors, with one-third of any bonus
payable to be deferred into shares for
two years.
• LTIP: awards will be made at 175% of
salary for Jean Vernet and 150% of salary
for Karen Hayzen-Smith. Awards will be
based 30% on 3-year cumulative EPS,
25% on relative TSR; 25% on Return
on Capital Employed (ROCE) and the
remaining 20% on strategic objectives.
Details of the specific targets to apply are
set out on page 109.
• NED fees: the fees payable to the
Chairman and Non-Executive Directors are
unchanged from 2023 levels, other than the
introduction of an additional fee of £5,000
per annum for acting as Non-Executive
Director for Employee Engagement.
The Committee is grateful for the strong
shareholder support at the 2023 AGM
for the advisory resolution to approve the
Annual statement and Annual report on
remuneration, and for the engagement and
feedback received during the consultation
process of the new remuneration policy. We
remain committed to effective and regular
engagement with our shareholders in relation
to remuneration, and hope that we can count
on your continued support.
I hope you will join me in supporting the
remuneration-related resolutions at the AGM
on 30 May 2024.
Inken Braunschmidt
Chair of the Remuneration Committee
16 April 2024
95
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
REMUNERATION POLICY REPORT
Overview of Directors’
remuneration policy
James Fisher and Sons plc operates in
a competitive international environment.
To continue to compete successfully, the
Committee considers that it is essential that
the level and structure of remuneration and
benefits achieve the objective of attracting,
retaining, motivating and rewarding the
necessary high calibre individuals at all levels
of the business. The Company therefore sets
out to provide competitive remuneration to all
of its employees, appropriate to the business
environment in those countries in which it
operates.
The remuneration policy, as a significant
contributor to competitive advantage,
is designed to support the Company’s
corporate strategy, and to align with the
Company’s valued behaviours of pioneering
spirit, integrity, energy and resilience.
A cohesive reward structure with a timely
pay review process, consistently applied to
all employees and with links to corporate
performance, is seen as critical in ensuring
all employees can associate with, and are
focused on, the attainment of the Company’s
strategic goals. Accordingly, the remuneration
package for the Executive Directors is
reviewed annually. Where an Executive
Director’s responsibilities change during the
course of a year, the Committee will consider
whether a review is appropriate, outside of
the annual process.
Executive remuneration reviews are based
upon the following principles:
• Total rewards should be set at appropriate
levels to reflect the competitive market
in which the Company operates, and to
provide a fair and attractive remuneration
package.
• Reward elements should be designed to
reinforce the link between performance
and reward. The majority of the total
remuneration package should be linked
to the achievement of appropriate
performance targets that promote long-
term value creation through transparent
alignment with our corporate strategy.
• Executive Directors’ incentives should be
aligned with the interests of shareholders.
This is achieved through setting
performance targets to reward an increase
in shareholder value and through the
Committee’s policy to encourage share
ownership by Executive Directors.
How the Directors’ remuneration
policy relates to the wider Group
The remuneration policy set out within this
report provides an overview of the structure
that operates for the Executive Directors
in the Group. Employees below Executive
Director level have a lower proportion of their
total remuneration made up of incentive-
based remuneration, with remuneration driven
by market comparators and the impact of the
role of the employee in question. Participation
in long-term incentives is reserved for those
judged as having the greatest potential to
influence the Group’s delivery of strategy
and Group performance. The Committee
considers pay and conditions across the
workforce when reviewing and setting the
Executive Director remuneration policy. During
2023, members of the Committee engaged
with employees on a number of matters
(more detail on page 37), including while
attending offsite engagement sessions. Any
feedback on remuneration received through
this and other engagement channels (such
as our new Engage platform) is presented to,
and discussed by, the Committee at its next
meeting; and informs decision-making at both
a Group and business level.
How shareholders’ views are
taken into account
The Committee takes an active interest
in stakeholder views on our executive
remuneration policy and its operation, and
is particularly mindful of the perspectives of
shareholders.
At the 2021 AGM, the previous remuneration
policy was supported by a significant majority
of shareholders and similarly high levels of
support were received for the advisory votes
to approve the Annual report on remuneration
at the AGMs in 2022 and 2023. In advance of
the 2024 AGM, the Committee has consulted
with the Company’s major shareholders in
relation to the proposed changes to the
remuneration policy. As set out in further
detail in the Annual statement prefacing this
Report, the significant majority of feedback
received was supportive of our proposals.
Directors’ remuneration policy
The following pages set out the remuneration
policy to be approved by shareholders at
the 2024 AGM. It is intended that the policy
will apply for three years from the date
of approval. The main changes from the
remuneration policy approved by shareholders
at the 2021 AGM are as follow:
• Increasing the maximum annual bonus
opportunity, from 100% to 125% of salary,
and strengthening the parameters for
bonus deferral to require one-third of any
bonus earned to be deferred in shares for
two years.
• Replacing reference in the bonus scorecard
to individual achievement and personal
objectives, with strategic objectives, to
more accurately reflect the nature of the
metrics incorporated in this element.
• Removing reference to the application
of stretch targets for LTIP awards above
125% of salary to be consistent with
our reward philosophy that stretching
targets should be set for all LTIP grants,
irrespective of award opportunity.
Other minor amendments have been made to
the drafting of this policy, including to update:
(i) the data used in the pay-for-performance
scenarios; (ii) page references; and (iii) the
sections on Executive Director service
contracts and Non-Executive Director letters
of appointment, to reflect changes in Board
composition in 2023.
96
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
ELEMENT
PURPOSE AND
LINK TO STRATEGY OPERATION MAXIMUM
PERFORMANCE
TARGETS
Salary Designed to attract
to the Board, retain,
motivate and reward the
necessary high calibre
individuals.
Salaries are a fixed annual sum and
payable monthly in cash.
Salaries are reviewed each year,
recognising the individual’s
performance and experience,
developments in the relevant
employment market and having
regard to the Group’s performance
as well as comparing each Executive
Director’s salary to market data.
No prescribed maximum
salary or salary increase.
Salaries are set for each
Executive Director within a
range around the market
median for similar positions
in appropriate comparator
companies. The Committee
is also guided by the general
increase for the employee
population although
increases may be higher or
lower than this to recognise,
for example, an increase
in the scale, scope or
responsibility of an individual
and/or performance.
Not applicable.
Pension To offer competitive
retirement benefits.
Executive Directors are eligible to
join the Group’s defined contribution
scheme, receive a Company
contribution into a personal
pension scheme or be paid a cash
supplement in lieu of pension.
Up to 7.5% of salary (in
line with the contribution
level available to the UK
workforce).
Not applicable.
Benefits To offer competitive
benefits.
Provision of a company car or
cash alternative, life assurance and
healthcare insurance. Other benefits
may be provided where appropriate.
These benefits do not form part of
pensionable earnings.
No prescribed maximum. Not applicable.
Annual
bonus
To incentivise and
reward the Executive
Directors to deliver
annual financial and
operational targets.
Payable on the achievement of
financial and strategic objectives.
Non-pensionable.
One-third of any bonus paid will be
deferred into shares, with deferred
share awards vesting after two
years. Dividend equivalent payments
may be awarded (in cash or shares)
on deferred shares that vest.
Malus and clawback provisions
operate.
Up to 125% of salary. The majority of the
bonus potential is
based on financial
targets derived from
the annual plan; the
balance of the bonus
potential is based on
strategic objectives.
97
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
ELEMENT
PURPOSE AND
LINK TO STRATEGY OPERATION MAXIMUM
PERFORMANCE
TARGETS
LTIP To align the interests
of the Executive
Directors with the
Group’s long-term
performance, strategy
and the interests of
shareholders.
Annual grant of conditional share
awards.
Non-pensionable.
A two-year post-vesting holding
period applies to awards granted to
Executive Directors.
Dividend equivalents may be
awarded (in cash or shares) on
shares that vest.
Malus and clawback provisions
operate.
Up to 200% of salary. Sliding scale targets
linked to financial, share
price and/or strategic
metrics.
No more than 25%
of an award vests at
threshold, increasing
to 100% vesting at
maximum.
Share
ownership
To ensure alignment
between the interests of
Executive Directors and
shareholders.
Executive Directors are required to
retain half of the shares vesting after
tax under the LTIP and deferred
bonus until the guidelines are met.
Post-cessation guidelines apply. In
determining the relevant number
of shares to be retained post-
cessation, shares acquired from own
purchases will not be counted.
In Employment:
200% of salary for all
Executive Directors.
Post-cessation:
100% of the “in
employment” requirement,
until the second anniversary
of cessation (or the actual
shareholding if the guideline
has not been met at
cessation).
Not applicable.
Sharesave To encourage share
ownership and align
the interests of all
employees and
shareholders.
An all-employee share plan. As per prevailing HMRC
limits.
Not applicable.
Non-
Executive
Directors
To provide fees
that reflect the time
commitment and
responsibilities of each
role in line with those
provided by similarly
sized companies.
Fixed annual fee, paid quarterly in
cash. Normally reviewed annually.
The Committee determines the
Chairman’s fees. The Chairman
and Executive Directors determine
fees for the other Non-Executive
Directors.
No prescribed maximum fee
or fee increase, although
fees are limited by the
Company’s Articles of
Association. Fee levels are
guided by market rates,
time commitments and
responsibility levels.
Not applicable.
Notes:
(1) The choice of the performance metrics applicable to the annual bonus reflects the Committee’s belief that any incentive targets should be appropriately challenging and tied to the delivery of
both financial and strategic objectives.
(2) LTIP performance conditions are selected based on the delivery of long-term returns to shareholders and the Group’s financial growth and are consistent with the Company’s strategy.
Where operated: (i) TSR performance is monitored by an independent advisor; and (ii) EPS and ROCE are derived from the audited financial statements.
(3) The Committee operates its share plans in accordance with the plan rules and the Listing Rules. The Committee, consistent with market practice, retains discretion over a number of areas
relating to the operation and administration of the plans (e.g. treatment of awards for leavers or on a change of control and/or adjustments to performance targets).
(4) The Committee retains the right to exercise discretion to override formulaic outcomes and ensure that the level of bonus or LTIP awards payable is appropriate. It may use its discretion
to adjust outcomes to ensure that any payments made reflect overall Company performance and stakeholder experiences more generally. Where exercised, the rationale for this discretion
will be fully disclosed to shareholders in the relevant Directors’ remuneration report.
(5) Consistent with HMRC legislation, the all-employee share plan does not have performance conditions.
(6) In approving the Directors’ remuneration policy, authority is given to the Company to honour any past commitments entered into with current or former Directors (including the vesting of share
awards granted in the past).
98
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
Malus and clawback provisions
Malus and clawback provisions operate in respect of the annual bonus (cash and deferred shares) and LTIP awards, with Committee discretion
to apply them in the event of a material misstatement in the Company’s financial results, miscalculation, serious reputational damage to the
Company, in the event it is discovered that the participant committed serious misconduct that could have warranted summary dismissal, or a
corporate failure/ insolvency.
The Committee may decide to operate the malus and clawback provisions within a three-year period commencing on the date that the cash part
of any annual bonus is paid (for cash and deferred share bonus awards), and prior to the third anniversary of any LTIP vesting date.
Scenario charts, 2024 remuneration
The charts below illustrate the potential value of the 2024 packages for the Executive Directors (see page 109 for further detail), assuming: nil
bonus payout and nil vesting for the LTIP in the “minimum” scenario; and a 50% bonus payout and 50% LTIP vesting in the “on-target” scenario.
£0
£500
£1,000
£1,500
£2,000
£2,500
£3,000
Minimum
£637
100.0%
100.0% 44.6% 28.7% 24.0%
25.2%
30.2%
32.4% 27.1%
38.9%
48.9%
42.6% 27.0% 22.3%
23.9%
33.5%
30.4%
42.6%
25.1%
52.6%
£1,497
£2,356
£2,858
Fixed
Annual bonus
LTIP
£409
£918
£1,427
£1,704
On-target
Jean Vernet Karen Hayzen-Smith
Maximum Maximum
+ 50% share
price growth
Minimum On-target Maximum Maximum
+ 50% share
price growth
Remuneration (£000)
Approach to recruitment
New Executive Directors will be appointed on remuneration packages with the same structure and elements set out in the Directors’
remuneration policy table. Ongoing incentive pay/share-based awards will be limited to:
• Maximum annual bonus of 125% of salary.
• LTIP award of up to 200% of salary.
For external appointments, the Committee may offer additional cash or share-based elements to replace deferred or incentive pay forfeited by
an executive when leaving a previous employer. It would seek to ensure, where possible, that these awards would be consistent with awards
forfeited in terms of vesting periods, expected value and performance conditions. Shareholders will be informed of any such payments as soon
as practicable following the appointment.
For an internal appointment, any variable pay element awarded in respect of the prior role may be allowed to pay out according to its original
terms. In addition, any other ongoing remuneration obligations existing prior to appointment may continue, provided that they are put to
shareholders for approval at the earliest opportunity if these remain outside of Policy limits.
For external and internal appointments, the Committee may agree that the Company will meet certain relocation and incidental expenses
as appropriate.
99
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Loss of office
In relation to Executive Directors leaving the Company, the Committee is committed to applying a consistent and equitable approach to ensure
the Company is fair and appropriate, but pays no more than necessary. The loss of office policy is in line with market practice and will be
dependent on whether the individual is deemed a “good leaver” or “bad leaver”. The “good leaver” policy includes:
• Payment in lieu of notice equal to one year’s basic salary or, if termination is part way through the notice period, the amount of salary relating to
any unexpired notice to the date of termination. There is an obligation on Directors to mitigate any loss which they may suffer if the Company
terminates their service contract.
• Bonus payments for the period worked may be made, subject to the original performance targets, at the discretion of the Committee.
Any such payments would be made on the normal payment date.
• Vesting of share scheme awards is not automatic and the Committee retains the discretion to prevent awards from lapsing depending on the
circumstances of the departure and the best interests of the Company. For a “good leaver”: (i) deferred bonus awards will normally vest in full
at the normal vesting date (although may vest earlier, including at cessation); and (ii) LTIP awards will normally vest at the normal vesting date
(although may vest earlier, including at cessation) subject to performance against the performance targets and LTIP awards will normally be
pro-rated for time.
• The “good leaver” reasons are death, injury, illness or disability, redundancy, retirement, transfer of business resulting in cessation of the
individual’s employment and any other reason at the Committee’s discretion.
• Executive Directors will also be entitled to a payment in respect of accrued but untaken annual holiday entitlements on termination.
• Legal fees and outplacement support may be paid by the Company where appropriate.
No compensation is paid for summary dismissal, save for any statutory entitlements.
Service contracts
It is the Board’s policy that Executive Directors are employed on contracts subject to no more than 12 months’ notice from either side. The Board
recognises however that it may be necessary in the case of new executive appointments to offer an initial longer notice period, which would
subsequently reduce to 12 months after the expiry of the initial period. The service agreements do not have a fixed term. If it becomes necessary
to consider termination of a service contract, the Committee will have regard to all the circumstances of the case, including mitigation, when
determining any compensation to be paid. Details of the current service contracts are as follows:
Contract date Notice period
Jean Vernet 5 September 2022 12 months
Karen Hayzen-Smith 1 December 2023 12 months
The Executive Directors are permitted to serve as non-executive directors of other companies, provided the appointment is first approved by the
Board. Directors are allowed to retain their fees from such appointments. During 2023, the Executive Directors held no external appointments.
Non-Executive Directors do not have service contracts but have a letter of appointment setting out their terms and conditions. Non-Executive
Directors are appointed each year for up to 12 months (subject to re-election at the AGM) and are entitled to one month’s prior written notice
of early termination for which no compensation is payable. Details of the letters for the currently appointed Non-Executive Directors are set out
below:
Date of appointment Date of (re-) election
Angus Cockburn 1 May 2021 14 June 2023
Justin Atkinson 1 February 2018 14 June 2023
Inken Braunschmidt 1 March 2019 14 June 2023
Aedamar Comiskey
(1)
1 November 2014 14 June 2023
Kash Pandya 1 November 2021 14 June 2023
Claire Hawkings 1 January 2022 14 June 2023
Shian Jastram 1 March 2024 n/a
(1) Aedamar Comiskey will retire from the Board at the conclusion of the 2024 AGM.
100
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
ANNUAL REPORT ON REMUNERATION
Remuneration Committee
The Committee members have no personal financial interest, other than as shareholders, in the matters to be decided.
They have no conflicts of interest arising from cross-directorships with the Executive Directors, nor from being involved in the day-to-day business
of the Company.
The Committee operates under clear written terms of reference and confirms that its constitution and operation comply with the applicable
provisions of the UK Corporate Governance Code (the Code) prevailing at the date this report is signed, in relation to the Directors’ remuneration
policy and pay practices, and that it has applied the Code throughout the year.
The Committee’s terms of reference include:
• To determine and agree with the Board the framework and policy for Executive Directors and senior managers.
• To review the appropriateness and relevance of the remuneration policy.
• To agree the measures and targets for any performance-related bonus and share schemes of the Executive Directors.
• To determine within the terms of the policy the total individual remuneration package of the Executive Directors and selected senior
management immediately below Board.
• To review senior management pay and workforce remuneration policies and practice.
The Committee consults the Chief Executive Officer and invites him to attend meetings when appropriate. The Chief Human Resources Officer
and Ellason LLP, the Committee’s independent adviser, attend meetings of the Committee by invitation. The Committee also has access to advice
from the Chief Financial Officer. The Company Secretary acts as secretary to the Committee. No Director or other attendee is present when his or
her own remuneration is being determined.
Advisers to the Remuneration Committee
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. Following a competitive tender, the Committee
appointed Ellason LLP (Ellason) as its principal external adviser from August 2021.
The Committee is satisfied that Ellason provided independent remuneration advice to the Committee during 2023, taking into account in this
determination that Ellason reports directly to the Committee Chair, does not have any other connections with the Company that may impair
independence and that Ellason is a member and signatory of, and adheres to, the Code of Conduct for Remuneration Consultants. Details of this
Code of Conduct can be found at www.remunerationconsultantsgroup.com.
During 2023, Ellason provided independent advice on remuneration matters including supporting on the review of the Directors’ remuneration
policy and providing guidance on external market practice, as well as other matters within the Committee’s remit. Ellason provides no services
to the Company other than in respect of its role as appointed independent adviser to the Committee. The fees paid to Ellason in respect of work
carried out for the Committee in the year under review were charged on a time and materials basis and totalled £94,236.
101
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Total remuneration of the Executive Directors (audited)
Jean Vernet
(1)
Karen Hayzen-Smith
(2)
Duncan Kennedy
(2)
2023
£000
2022
£000
2023
£000
2022
£000
2023
£000
2022
£000
Salary
(3)
543 173 31 – 321 350
Benefits
(4)
66 44 1 – 10 11
Pension
(5)
41 13 2 – 36 16
Bonus in cash 195 – 11 – 115 –
Bonus in deferred shares – – – – – –
Total short-term remuneration 845 230 45 – 482 377
LTIP n/a n/a n/a – – n/a
Other
(7)
– 400 – – – –
Total remuneration 845 630 45 – 482 377
Total fixed remuneration 650 230 34 – 367 377
Total variable remuneration 195 400 11 – 115 –
(1) The amounts disclosed in relation to 2022 reflect the period from his appointment to the Board on 5 September 2022 to 31 December 2022.
(2) The amounts disclosed in relation to 2023 reflect the period:
(i) For Karen Hayzen-Smith, from her appointment to the Board on 1 December 2023 to 31 December 2023; and
(ii) For Duncan Kennedy, from 1 January 2022 until he stepped down from the Board on 1 December 2023. Further details on his leaving arrangements can be found on page 104.
(3) As set out in last year’s Annual Report, the Committee delayed the review of Executive Director salaries until later in 2023, to align with the second of a two-phase salary review process
adopted by the Company for other employees earning a salary above £70,000. Jean Vernet’s salary was increased from £530,000 to £556,500, effective 1 July 2023. This results in an
annualised increase of 2.5% compared to 5% for other employees.
(4) The amounts disclosed in 2023 include a cash allowance in lieu of car and medical insurance. For Jean Vernet, the figure also includes: c.£43k (2022: £38k) in reimbursed expenses in relation
to his relocation to the UK, as described in last year’s Report; and £2k (2022: £nil) reflecting the embedded gain at grant on his 2023 Sharesave award.
(5) Pension contributions may be paid into personal pension plans, the Company pension scheme or taken as a separate cash allowance, subject to income tax. For Duncan Kennedy, the
amount reported in 2023 includes a lump sum payment (of c.£13k) to correct an underpayment of pension contributions over the period from Mr Kennedy’s appointment in May 2021 to
31 December 2022. There was no change to Mr Kennedy’s pension contribution for 2023.
(6) The 2021 LTIP is expected to lapse. Jean Vernet and Karen Hayzen-Smith were not participants in the 2021 LTIP award cycle.
(7) This relates to a one-off restricted share award granted to Jean Vernet on his appointment, in connection with share awards forgone on leaving his previous employer. Further details are set
out in last year’s Remuneration Report, and on page 103 of this Report.
102
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
Annual Bonus awards for 2023 (audited)
The maximum annual bonus for Executive Directors was 100% of salary, with 75% based on financial objectives (Note 1 below) and 25% based
on strategic objectives (Note 2 below). Bonus payments of up to 70% of maximum are paid in cash and any balance is awarded in shares and
deferred for three years (with dividend equivalents accruing and malus and clawback provisions applying). The measures and targets applying for
the bonus in 2023 are set out below:
Note 1 – Financial objectives (75% of maximum):
Performance measure Performance target Assessment against targets
Underlying operating profit (50%) Minimum threshold £28.7m
Maximum £32.2m
Threshold starts at 0% and increases on a straight-line sliding
scale to 100% of this element of the bonus at Maximum.
Actual performance £29.6m 25.7% of this part of the bonus was paid out.
Operating cash flow (25%) Minimum threshold £61.2m
Maximum £66.9m
Threshold starts at 0% and increases on a straight-line sliding
scale to 100% of this element of the bonus at Maximum.
Actual performance £63.6m 42.1% of this part of the bonus was paid out.
Note 2 – Strategic objectives (25% of maximum):
Objective focus Weighting Target Actual Outcome
Forecasting 5% Group revenue +/- 2% vs. budget; and +3% 0.0%
Gross margin +/- 1 pp vs. budget -0.2 pp 2.5%
Cash management 5% Meet stretch targets for DSO:
77 days at half year
65 days at full year
HY: 70
FY: 65
2.5%
2.5%
Financial resilience 5% Refinancing in place at market rate; maintain covenant
compliance; and ensure sufficient liquidity headroom
Met 5.0%
Health & safety 5% 10% improvement in TRCF vs. 2022 (to 2.39 or better) 3.42 0.0%
Employee engagement 5% Improvement in Group engagement score to 3.95; and
response rate increased to 85%
3.86
83%
0.0%
0.0%
Total 12.5% out of 25.0%
Based on performance against the targets set out above and following an assessment by the Committee of the overall performance of the Group
and Executive Directors during the year, the following bonuses were approved by the Committee:
Executive Director
Maximum
opportunity
(% salary)
Actual bonus
(% salary)
Actual bonus
(£000)
Jean Vernet 100% 35.9% 195
Karen-Hayzen Smith
(1)
100% 35.9% 11
Duncan Kennedy
(2)
100% 35.9% 115
(1) Karen-Hayzen Smith joined the Company on 1 December 2023 and was eligible for a bonus for the period 1 to 31 December 2023; and
(2) Duncan Kennedy stepped down from the Board with effect from 1 December 2023 and remains an employee of the Company. The amount shown above relates to the bonus payable
in respect of his services as an Executive Director (1 January to 30 November 2023).
In approving the above bonuses for 2023, the Committee reviewed the formulaic outcomes in the context of the underlying performance of the
business, including progress on other non-financial priorities such as the Group’s ESG roadmap. The Committee was satisfied that the formulaic
outcome was in line with this broader perspective, in particular the outcome under the operating cash flow measure which, notwithstanding cash
outflows during the year, reflected responsible management actions and improved receivables. Therefore, the Committee determined not to make
a discretionary adjustment (upward or downward).
As the actual bonus paid was below 70% of maximum, consistent with the Directors’ remuneration policy approved in 2021 the bonuses were
paid in cash.
103
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Vesting of 2021 LTIP awards (audited)
LTIP awards granted in 2021 were due to vest in 2024 subject to the achievement of defined EPS and TSR performance targets. EPS is
measured over the three-year period ended 31 December 2023, while TSR is measured over the three-year period from 6 April 2021.
The EPS performance condition (70% of the award) comprises a sliding scale, under which 25% of this part of an award vests for
growth of underlying diluted earnings per share of 25% over the three-year performance period, increasing pro-rata to full vesting for growth
of at least 67%.
EPS Growth
Performance target Base EPS EPS in 2023 Actual Threshold Maximum Vesting %
Underlying diluted EPS 47.9 p 11.4p (76.2%) 25% 67% 0%
The TSR performance condition (30% of the award) also comprises a sliding scale, under which 25% of this part of an award vests for median
TSR increasing pro-rata to full vesting for upper quartile TSR, measured against the constituents of the FTSE 250 excluding investment trusts.
Performance target
Performance
period
Threshold
Median TSR
Maximum
UQ TSR
James Fisher
TSR
Vesting %
Relative TSR 6 April 2021-5 April 2024 (9.1%) 20.7% (73.8%) 0%
Based on EPS and TSR performance over the 3-year performance period, the 2021 LTIP awards will lapse in full.
Neither Jean Vernet nor Karen Hayzen-Smith were participants in the 2021 LTIP award cycle. However, Eoghan O’Lionaird and Duncan Kennedy
(both former Directors) retained interests in the 2021 LTIP cycle, which will lapse in full.
Vesting of 2022 Recruitment award (audited)
As noted in last year’s report, Jean Vernet was granted a one-time award of restricted shares to compensate him for share awards forfeited on
leaving his former employer. 50% of the shares vested on 21 September 2023 (as set out in the table below), with the remaining 50% due to vest
on 13 September 2024, subject to Mr Vernet continuing to be employed by the Group and not being under notice of termination of employment
as at the vesting date.
Award date
Number
of shares
granted
Number of
shares vested
in the year
Market value
at grant
(1)
Market value
at vest Vesting date
Balance
unvested
Jean Vernet 13 September 2022 135,516 6 7,75 8 295.2p 3 47.0 p 21 September 2023 67,75 8
(1) The share price at date of award was based on the three-day average closing price from 8 September 2022 to 12 September 2022.
LTIP awards granted in 2023 (audited)
Award date
Proportion
of salary
Maximum
shares awarded
Face value
at date of grant
(1)
Jean Vernet 8 June 2023 175% 246,021 £ 9 27. 5 k
Duncan Kennedy 8 June 2023 125% 116,047 £4 37. 5 k
(1) The share price at date of award was based on the five-day average closing price from 1 June 2023 to 7 June 2023, of 377 pence.
Vesting of the 2023 LTIP award (granted in the form of a conditional share award) is subject to achievement of performance targets over a three-
year period. 50% of the award is based on EPS targets, 30% based on TSR targets and 20% of the award based on return on capital employed
(ROCE):
• None of the EPS element of the 2023 LTIP shall vest if EPS for the 2025 financial year is less than 50 pence. 25% of the EPS element shall
vest if 2025 EPS is 50 pence, rising on a straight-line sliding scale to 100% vesting of this element if 2025 EPS is at least 62 pence.
• The TSR element of the award is subject to the Company’s TSR performance relative to the FTSE 250 index excluding investment trusts,
over the three-year period from 6 April 2023. If at the end of the period the Company ranks in the upper quartile, all of the TSR element of the
award will vest. If the ranking is below median, none of the TSR element of the award will vest. 25% of the TSR part of the award will vest for
performance at median, with a straight-line sliding scale between median and upper quartile.
• None of the ROCE element of the 2023 LTIP shall vest if ROCE for 2025 is less than 10%; 25% shall vest if 2025 ROCE is 10%, rising on a
straight-line sliding scale to 100% vesting if 2025 ROCE is at least 13%.
The Committee retains discretion to adjust the awards on vesting to ensure that all relevant factors are taken into account, including the
assessment of any windfall gains. In line with the remuneration policy, a two-year post-vesting holding period applies to these awards.
Deferred bonus awards granted in 2023 in respect of 2022 annual bonus (audited)
No deferred bonus awards were granted in 2023 in respect of the 2022 annual bonus as a result of no bonus being payable.
104
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
Appointment of new Chief Financial Officer
Karen Hayzen-Smith joined the Board as Chief Financial Officer on 1 December 2023. Her salary was set at £370,000. She was eligible for
a pro-rata bonus for the period worked in 2023 (with a maximum bonus of 100% of her pro-rated salary) and her annual LTIP award level was set
at 150% of salary (with the first award being made in 2024). These award opportunities are within the maximum limits permissible under the 2021
Directors’ remuneration policy and, together with salary, were set at a level to facilitate the recruitment of an individual with Ms Hayzen-Smith’s
experience in the energy and defence sectors and strong background in financial strategy and leadership. The relative opportunities under the
bonus and LTIP are further considered to provide an appropriate balance between fixed and variable pay in Ms Hayzen-Smith’s remuneration
package (and, within the variable component, between short- and long-term performance). Subject to approval of the 2024 Directors’
remuneration policy at the AGM, her annual bonus opportunity for 2024 onwards will increase to 125% of salary.
In addition, to replace certain interests Ms Hayzen-Smith forfeited on joining the Company, the Committee resolved to make an LTIP award worth
50% of annualised salary (structured as a conditional award of shares) to Ms Hayzen-Smith shortly after she joined the Group. This award was
made on 19 December 2023, as follows:
Recruitment award granted in 2023 (audited)
Award date
Basis on which
award made
Maximum
shares awarded
Face value
at date of grant
(1)
Karen Hayzen-Smith 19 December 2023 LTIP 62,358 £185k
(1) The share price at date of award was based on the three-day average closing price from 14 December 2023 to 18 December 2023, of 296.67 pence.
No consideration was paid for the grant of the award. The award will vest on 19 December 2026 subject to the satisfaction of the performance
conditions set by the Remuneration Committee which are consistent with those attaching to the 2023 LTIP award as set out on page 103.
The grant value and vesting period of the buyout LTIP award was determined taking into account the value and time period for the incentive
arrangements forfeited by Ms Hayzen-Smith, and replicating these to the extent possible. The value of this award will be disclosed in the year
of vesting, in line with UK remuneration reporting requirements.
Payments for loss of office (audited)
Duncan Kennedy stepped down from the Board on 1 December 2023 and will remain an employee for the duration of his notice period to
support the Company. Details of the arrangements in respect of remuneration are as follows:
• Contractual entitlement to salary (based on an annual salary of £350,000), pension and benefits which will continue until the end of his notice
period (17 July 2024) or such earlier date as may be agreed with the Company.
• In respect of outstanding incentive awards, Mr Kennedy remained eligible to receive a bonus in respect of the 2023 financial year. Unvested
LTIP awards will vest on their normal vesting dates, subject to time pro-rating and performance conditions. The two-year post-vesting holding
period will apply as normal. Dividend equivalents may be credited to the extent that awards vest. Mr Kennedy’s 2021 LTIP award is expected
to lapse due to the minimum performance targets not being achieved. His 2022 and 2023 LTIP awards remain outstanding.
• Mr Kennedy’s outstanding option under the Company’s Sharesave plan will lapse with effect from the date his employment ends.
• Mr Kennedy is eligible to receive a contribution of £2,000 (excluding VAT) in respect of legal fees and up to £50,000 (excluding VAT) in respect
of outplacement support.
For the period 1 December 2023 to 31 December 2023, Mr Kennedy received remuneration of £42,580 (comprising contractual fixed pay for
the period and pro-rated bonus opportunity for the period). All other remuneration paid to Mr Kennedy in respect of 2023 is set out in the Total
remuneration of the Executive Directors table on page 101.
Payments to former Directors (audited)
As previously disclosed, Eoghan O’Lionaird stepped down from the Board of the Company with effect from 5 September 2022. As set out in the
2022 Directors’ remuneration report, he continued to receive his contractual entitlement to salary and benefits during a period of garden leave
that ended on 19 February 2023. The contractual entitlement paid to Mr O’Lionaird in respect of the 2023 period was £78,812. Mr O’Lionaird
retains an interest in his 2021 LTIP award (which, based on performance, is expected to lapse in full). His 2022 LTIP award remains outstanding.
Stuart Kilpatrick stepped down from the Board of the Company with effect from 29 April 2021 and had a retained interest in the 2020 LTIP.
This award lapsed in full in April 2023. Mr Kilpatrick has no further outstanding incentive awards with the Company.
105
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CEO pay ratio (unaudited)
The table shows how the CEO’s single figure remuneration for 2023 compares to the equivalent single figure remuneration for full-time equivalent
UK employees as at 31 December, ranked at the 25th, 50th and 75th percentile (and how this ratio has evolved since 2019):
Method
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
2023 Option A 25:1 17:1 11:1
2022 Option A 35:1 25:1 16:1
2021 Option A 22:1 16:1 10:1
2020 Option A 19:1 14:1 9:1
2019 Option A 28:1 19:1 13:1
Salary Total pay and benefits
25th
percentile Median
75th
percentile
25th
percentile Median
75th
percentile
2023 £29,400 £43,054 £55,824 £34,256 £50,16 5 £77, 3 8 5
2022 £26,500 £36,050 £54,590 £29,682 £41,852 £65,557
2021 £25,000 £34,000 £50,000 £ 2 7,7 70 £37,120 £59,280
2020 £24,000 £33,127 £50,000 £27,000 £ 37, 5 0 0 £58,963
2019 £24,480 £3 4,150 £52,000 £25,459 £36,541 £55,240
The Committee monitors the trend in CEO pay ratio and will continue to keep this under review, in particular the impact of future incentive
payouts. It is expected that the vesting of any LTIP award would be reflected in a higher ratio, due to the relative upweighting of variable
remuneration in the CEO’s package, compared with market competitive norms for the wider UK workforce (and consistent with our pay practices
and policies). However, this will take time to normalise, with the first LTIP award made to Jean Vernet (in early 2023) not due to vest until 2026.
Aligning pay with performance (unaudited)
The following graph shows the value, to 31 December 2023, of £100 invested in the Company on 31 December 2013, compared with the value
of £100 invested in the FTSE 250 and FTSE SmallCap indices (excluding investment trusts) on the same date. The other points plotted are the
values at intervening financial year-ends.
Growth in the value of £100 holding over 10 years
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23
James Fisher and Sons plc
FTSE Mid 250 Index Ex Investment Trusts
FTSE Small Capitalisation Index Ex Investment Trusts
£0
£50
£100
£150
£200
£250
£300
106
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
Remuneration of CEO compared with growth in underlying diluted earnings per share
Nick Henry Eoghan O’Lionaird Jean Vernet
2014 2015 2016 2017 2018 2019 2019 2020
(1)
2021 2022 2022
(2)
2023
Annual change –
underlying diluted EPS (pence) 13% (7)% 11% 7% 14% 4% 4% (52)% (58)% (186)% (186)% (49%)
Salary, pensions and benefits (£000) 471 492 492 512 526 421 189 522 598 405 230 650
Annual performance bonus (£000) 287 97 429 392 448 35 – – – – – 195
Short-term remuneration (£000) 758 589 921 904 1,010 456 189 522 598 405 230 845
Share schemes (£000) 728 318 183 109 889 418 – – – – 400 –
CEO total remuneration (£000) 1,486 907 1,10 4 1,013 1,899 874 189 522 598 405 630 845
Actual bonus as a percentage of maximum 100% 23% 100% 88% 91% 17% – – – – – 36%
LTIP vesting as a percentage of maximum 100% 100% 47% 15% 100% 59% n/a n/a n/a – n/a n/a
ESOS vesting as a percentage of maximum 100% – 45% – – – n/a n/a n/a n/a n/a n/a
(1) As part of the measures implemented by the Company at the start of the COVID pandemic, Eoghan O’Lionaird’s 2020 salary (£530,000) was reduced by 50% for three months from
1 April 2020, and not repaid.
(2) The share schemes figure for Jean Vernet relates to the restricted share award granted to him on 13 September 2022 in compensation for the value of incentive awards forfeited by him
on leaving his previous employer in order to join James Fisher.
Percentage change in remuneration (unaudited)
The table below shows the annual percentage change in earned salary or fees, benefits and annual bonus for those individuals who were
appointed as Board Directors during the 2023 financial year, compared to the average earnings of all of the Group’s other UK employees.
As required by the remuneration reporting regulations with which the Company is required to comply, the analysis has been expanded to include
this information for the financial year under review, and will continue to be built up until it displays a five-year history. Note that Directors who were
not a Director at any point during 2023 have not been included. The percentage changes in their remuneration for prior years (and in which they
were a Director) are disclosed in relevant previous Annual Reports.
The Committee chose the Group’s UK employees for the below pay comparison. Our UK employee population represented around 55% of the
Group’s workforce in 2023, and is therefore considered to be the most meaningful comparator group (by comparison, employees of James Fisher
and Sons plc represented around 7% of the workforce). The Committee monitors this information carefully to ensure that there is consistency in
the fixed pay trend for Board Directors compared with the wider workforce.
Base salary/fee
(1)
Benefits Annual bonus
(9)
2022
to 2023
2021
to 2022
2020
to 2021
2019
to 2020
2022
to 2023
2021
to 2022
2020
to 2021
2019
to 2020
2022
to 2023
2021
to 2022
2020
to 2021
2019
to 2020
Executive Directors
Jean Vernet
(2)
2.5% N/A N/A N/A 0% N/A N/A N/A N/A N/A N/A N/A
Karen Hayzen-Smith
(3)
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Duncan Kennedy
(4)
0% 0% N/A N/A 0% 0% N/A N/A N/A N/A N/A N/A
Non-Executive Directors
Angus Cockburn
(5)
0% 0% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Justin Atkinson 0% 0% 5% (3)% N/A N/A N/A N/A N/A N/A N/A N/A
Inken Braunschmidt 2% 0% 5% (3)% N/A N/A N/A N/A N/A N/A N/A N/A
Aedamar Comiskey (3)% 0% 5% (3)% N/A N/A N/A N/A N/A N/A N/A N/A
Claire Hawkings
(6)
2% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Kash Pandya
(7)
0% 0% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Employee population
(8)
8.9% 0% 3.4% 5% 1.9% 1.4% 2% N/A 3.8% 256% (88)% (19)%
(1) The 2020 to 2021 and 2019 to 2020 comparisons reflect the 20% reduction to base salary/fee volunteered by all Board Directors for three months from 1 April 2020, not a change in salaries
or Directors’ fees.
(2) Jean Vernet joined the Board on 5 September 2022. For the comparison of 2022 to 2023, the percentage changes reflect annualised values for 2022 remuneration (and, for benefits, excludes
the value of relocation benefits).
(3) Karen Hayzen-Smith joined the Board on 1 December 2023, so a year-on-year comparison is not available.
(4) Duncan Kennedy joined the Board in May 2021 and left the Board on 1 December 2023. For the comparison of 2021 to 2022, the percentage changes reflect annualised values for 2021
remuneration and for the comparison of 2022 to 2023 reflect annualised values for 2023 remuneration.
(5) Angus Cockburn joined the Board in May 2021. For the comparison of 2021 to 2022, the percentage change reflects annualised values for 2021 remuneration.
(6) Claire Hawkings joined the Board in January 2022. For the comparison of 2022 to 2023, the percentage change reflects annualised values for 2022 remuneration.
(7) Kash Pandya joined the Board in November 2021. For the comparison of 2021 to 2022, the percentage change reflects annualised values for 2021 remuneration.
(8) For the employee population, the year-on-year change in annual bonus is based on the year of payment; as the data required to calculate the change based on bonuses earned in relation to
the year is not available at the time of signing off this report.
(9) A percentage change in Executive Directors' annual bonus outcomes between 2022 and 2023 is not meaningful as a result of no bonus having been paid for 2022.
107
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Relative importance of remuneration (unaudited)
2023
£m
2022
£m
Change
£m
Total employee remuneration 140.7 145.8 (5.1)
Total dividends paid – – n/a
Interests in shares (audited)
The interests of Directors and their connected persons in ordinary shares as at 31 December 2023, including any interests in shares provisionally
awarded under the LTIP and share options provisionally granted under the Sharesave scheme, are as follows:
Beneficial
number at 31
December
2023
Unvested
LTIP
number
(1)
Unvested
deferred
bonus
shares
(1)
Unvested
restricted
shares
(1)
Unvested
options
(1)
Vested but
unexercised
options
At
31 December
2022
number
Angus Cockburn 5,000 – – – – – 5,000
Jean Vernet 35,337 246,021 – 6 7,758 5,357 – –
Karen Hayzen-Smith – 62,358 – – – – n/a
Justin Atkinson 3,150 – – – – – 3,150
Inken Braunschmidt – – – – – – –
Aedamar Comiskey – – – – – – –
Claire Hawkings – – – – – – –
Kash Pandya – – – – – – –
Former Directors
Duncan Kennedy
(2)
5,000 248,763 – – 9,259 – 5,000
(1) The unvested LTIP awards are subject to performance conditions. The unvested deferred bonus and restricted share awards are not subject to performance conditions. Unvested options
comprise grants under the Sharesave scheme and are not subject to performance conditions; and
(2) Duncan Kennedy’s interests in shares are shown based on the position on the date he stepped down from the Board (1 December 2023). The unvested LTIP awards will be pro-rated to
reflect time served at the point of vesting.
No Director has an interest in the preference shares of the Company, or in the shares of any subsidiary or associated undertaking. The Directors’
interests stated above include any shares held by their connected persons and, between 31 December 2023 and 15 April 2024, there were no
changes to the Directors’ shareholdings.
Against the 200% of salary ownership guideline and based on the share price and prevailing salary levels as at 31 December 2023,
Jean Vernet held shares equivalent to 39% of his salary (being the estimated net of tax value of unvested restricted share awards). Karen Hayzen-
Smith joined the Group only shortly before the financial year end. At the date of stepping down from the Board, Duncan Kennedy held shares
equivalent to 4% of his salary. In accordance with our policy, the Executive Directors are required to retain half of the shares vesting (after tax)
under the LTIP until the guideline level of holding is met.
Executive Directors’ interest in share awards (audited)
Conditional share awards
1 January
2023
Granted
during year
(no.)
Vested
during year
(no.)
Lapsed
during year
(no.)
31 December
2023
Vesting
date
Expiry
date
Jean Vernet Restricted Share Award
(1)
67,75 8 – 67,75 8 – – 13.09.23 n/a
Restricted Share Award
(1)
67,75 8 – – – 67,758 13.09.24 n/a
LTIP – 246,021 – – 246,021 08.06.26 n/a
135,516 246,021 6 7,75 8 – 313,779
Karen Hayzen-Smith LTIP
(2)
– 62,358 – – 62,358 19.12.26 n/a
– 62,358 – – 62,358
Duncan Kennedy
(3)
LTIP 35,790 – – – 35,790 28.05.24 n/a
LTIP 96,926 – – – 96,926 21.04.25 n/a
LTIP – 116,0 47 – – 116,047 08.06.26 n/a
132,716 116,047 – – 248,763
Total 268,232 424,426 67,75 8 – 624,900
(1) This is the buyout award in connection with Jean Vernet’s appointment, the details of which were set out in the 2022 Directors’ remuneration report.
(2) This is the LTIP award in connection with Karen Hayzen-Smith’s appointment, made in respect of awards forfeited by Ms Hayzen-Smith on joining the Group (the details of which are
set out on page 104).
(3) The interests in shares for Duncan Kennedy are included as at the date he stepped down from the Board (1 December 2023). To the extent the awards vest, they will be subject to
time pro-rating.
A two-year holding period applies to LTIP awards.
108
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REMUNERATION REPORT CONT.
Share option grants
1 January
2023
Granted
during year
(no.)
Vested
during year
(no.)
Lapsed
during year
(no.)
Exercise
price
31 December
2023
Vesting
date
Expiry
date
Jean Vernet Sharesave – 5,357 – – £3.36 5,357 07.0 6 .26 07.12. 26
Duncan Kennedy
(1)
Sharesave 9,259 – – – £3.24 9,259 01.06.27 01.12.27
Total 9,259 5,357 – – 14,616
(1) Duncan Kennedy was granted options under the five-year all-employee Sharesave scheme granted on 11 April 2022. The options will lapse when he leaves the Company.
Sourcing of shares and dilution
The Committee has regard to the limits on dilution advised by the Investment Association and contained in the relevant share plan rules and
reviews the number of shares committed and headroom available under share incentive schemes in accordance with these dilution limits.
On vesting, the LTIP awards are satisfied by the shares held by the James Fisher and Sons plc Employee Share Trust (Trust). During the year the
Trust purchased no ordinary shares on the open market (2022: none) and at 31 December 2023 the Trust held 12,519 ordinary shares (2022:
47,855).
Share price during the financial year
The middle market price of one ordinary share in the Company during the financial year ranged from 260 pence to 425 pence and at
31 December 2023 was 308 pence.
Non-Executive Directors
The structure of Non-Executive Directors’ fees for 2023 and 2024 are set out below, all of which are payable in cash. The fees for 2024
will remain at the same level as for 2023, other than the introduction of an additional fee for acting as Non-Executive Director for Employee
Engagement.
2024
£
2023
£
Chairman 210,125 210,125
Other Non-Executive Director fees:
Basic fee 54,632 54,632
Additional fee for the chair of Audit Committee 12,000 12,000
Additional fee for the chair of Remuneration Committee 8,000 8,000
Additional fee for the Senior Independent Director 8,000 8,000
Additional fee for the Non-Executive Director for Employee Engagement 5,000 n/a
Non-Executive Directors’ remuneration (audited)
Total fees
2023
£000
2022
£000
Angus Cockburn 210 210
Justin Atkinson
(1)
67 67
Inken Braunschmidt
(2)
56 55
Aedamar Comiskey
(3)
68 71
Claire Hawkings
(4)
56 55
Kash Pandya 55 55
(1) The fees include an additional fee for chairing the Audit Committee fee (of £12,000 per annum).
(2) From 9 November 2023 the fees include additional fees for chairing the Remuneration Committee (of £8,000 per annum).
(3) Until 9 November 2023, the fees include additional fees for chairing the Remuneration Committee (of £8,000 per annum) and acting as Senior Independent Director (also of £8,000 per annum).
(4) From 9 November 2023 the fees include additional fees for Senior Independent Director (of £8,000 per annum).
No detailed disclosure has been provided for Non-Executive Directors other than for that relating to their fee, as this is the only form of
remuneration the Non-Executive Directors receive.
Shareholder voting (unaudited)
The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes
against resolutions including in relation to Directors’ remuneration, the Company seeks to understand the reasons for any such vote and will
report any actions in response to it. The following table reflects the voting on the Directors’ remuneration report for the year ended 31 December
2022 at the 2023 AGM and the voting on the Directors’ remuneration policy at the 2021 AGM:
109
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Shareholder voting (unaudited) cont.
Directors’ remuneration report
(2023 AGM)
Directors’ remuneration policy
(2021 AGM)
Remuneration resolutions
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
For 32,777,381 95.5% 37, 4 9 9 ,177 97.6%
Against 1,557,653 4.5% 938,426 2.4%
Total votes cast (excluding withheld votes) 34,335,034 100.0% 3 8,4 37,6 0 3 100.0%
Total votes withheld 601,594 – 311,116 –
Total votes cast (including withheld votes) 34,936,628 – 38,748,719 –
Implementation of the remuneration policy for 2024 (unaudited)
With effect from 1 January 2024, the salary for Jean Vernet will be £573,195 (a 3% increase from £556,500) and Karen Hayzen-Smith’s salary will remain
unchanged from that agreed on appointment (£370,000). The increase for Jean Vernet was below the budgeted increase for the UK workforce of 3.5%.
Subject to approval of the new Directors’ remuneration policy at the AGM, the maximum bonus opportunity will increase to 125% of salary.
Financial targets are set to be challenging and appropriately demanding. The measures remain unchanged from 2023 and will be: underlying
operating profit (weighted 50%); operating cash flow (25%) and strategic objectives (25%). Strategic objectives for 2024 will include short-term
business priorities linked to delivery of the transformation plan and targets focused on employee engagement and health & safety. There will be
no overlap between the metrics used for the annual bonus and those used for the LTIP (see below). The targets are commercially sensitive but
disclosure of the targets and performance against these is expected to be set out in the 2024 Directors’ remuneration report.
As described in the Annual statement prefacing this remuneration report, subject to approval of the proposed Directors’ remuneration policy
at the 2024 AGM, awards will be granted under the LTIP shortly thereafter, with face values of 175% of salary for Jean Vernet and 150% of
salary for Karen Hayzen-Smith. When determining these award levels, the Committee considered the number of shares that would be granted
at the prevailing share price. The Committee decided that it was appropriate to maintain these award levels (which are lower than the maximum
permitted in the remuneration policy) to underpin the focus on the Company's transformation. Instead, the Committee will assess at vesting the
extent to which this results in any windfall gains arising (and use its discretion to make any adjustments at that time, if necessary).
The following performance targets will apply to the 2024 LTIP awards:
Metric Weighting
Threshold
(25% vesting)
Stretch
(100% vesting)
Earnings per share
(cumulative, 2024-26) 30% 64.0p 74.4p
Relative TSR vs. FTSE250
(excluding investment trusts) 25% Median Upper quartile
Return on Capital Employed
(2026 ROCE) 25% 9.5% 11.0%
Strategic Objectives: 20%
Business excellence
(gross margin improvement) One-third of element 15% of element earned if 2024 gross
margin is at least 31%, with a further 15%
earned if 2025 gross margin is at least
32%. The remaining 70% is earned if 2026
gross margin is at least 33%
Vitality
(2026 revenue from new products launched in the last five years, as a % of total) One-third of element 7.5% 10.0%
Sustainability
(absolute reduction in tCO2e Scope 1 & Scope 2 emissions vs. 2021 baseline) One-third of element 18% 21%
Straight-line vesting will apply for performance between Threshold and Stretch. Nil vesting for performance outcomes below Threshold.
For the 2024 LTIP grant, EPS will be based on cumulative EPS over the three-year performance period to ensure that the award appropriately
captures delivery of the transformation plan over the full period. ROCE targets for this cycle are based on the final year of the performance
period, to incentivise progress towards the Group's longer-term ambition for this KPI. The strategic objectives have been selected to align with
our priorities over the medium-term to re-orientate the Group for long-term sustainable growth and value creation for shareholders. The targets
are deemed to be appropriately stretching in the context of the Group’s strategic plan. However, the Committee retains discretion to adjust the
awards on vesting to ensure that all relevant factors are taken into account, including the assessment of any windfall gains.
Inken Braunschmidt
Chair of the Remuneration Committee
16 April 2024
110
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REPORT
This section contains additional information
which the Directors are required by law
and regulation to include within the Annual
Report and Accounts. The Directors’ report
comprises this section as well as the rest
of the Governance section (from pages 70
to 109) and those sections of the Strategic
report or financial statements as referenced in
this section.
We have chosen, in accordance with the
Companies Act 2006, to include certain
information in our Strategic report or financial
statements that would otherwise be required
to be disclosed in the Directors’ report. This is
set out in the table above.
The Directors’ report and Strategic report
comprise the “management reports” for
the purposes of compliance with Financial
Services Authority’s Disclosure Guidance
and Transparency Rules (DTR) 4.1.8R. The
information that fulfils the requirements of
the Corporate Governance Statement for the
purposes of DTR 7 can be found on page
73 (all of which forms part of this Directors’
report) and in this Directors’ report. The
statement of Directors’ responsibilities on
page 115 is incorporated into this Directors’
report by reference.
Going concern
The Group’s business activities, together
with the factors likely to affect its future
development, the financial position of the
Group and a description of the principal risks
and uncertainties are set out in the Strategic
report on pages 2 to 69. Having assessed the
principal risks and the other matters discussed
in connection with the viability statement, the
Directors consider it appropriate to adopt the
going concern basis of accounting in preparing
this Annual Report and Accounts as set out in
Note 1 on page 131.
Dividends
As a result of performance challenges, the
Company did not pay an interim dividend for
2023, and the Board is not recommending
the payment of a final dividend for the year.
The Board is committed to reinstating the
dividend when appropriate.
Share capital
Details of the share capital of the Company
and the shares held by the Company’s
Employee Share Trust, including the rights
and obligations attaching to the shares are
set out in Note 30 to the Financial statements
on page 181. The rights and obligations
attaching to the shares are set out in the
Company’s Articles of Association (Articles).
There are no restrictions on voting other than
deadlines for exercising voting rights that
apply to all shareholders and any restrictions
imposed by law or regulation. In addition,
there are no specific restrictions on the size
of a holding nor on the transfer of shares,
both of which are governed by the general
provisions of the Articles and prevailing
legislation. The Directors are not aware of
any agreements between the holders of
the Company’s shares that may result in
restrictions on the transfer of securities or
on voting rights. No person has any special
rights of control over the Company’s share
capital. Where shares are held on behalf of
the Company’s employee benefit trust, the
trustees have discretion to vote on any shares
as they see fit and have not waived their right
to receive dividends.
At the AGM held on 14 June 2023, the
Company was given authority to purchase
up to 2,519,776 of its ordinary shares until
the date of its next AGM. No purchases were
made during the year and up to the date of
this report by the Company. The Company
has one class of ordinary share and one class
of preference share.
As at 31 December 2023, 50,398,063
ordinary shares of 25 pence each have been
issued, are fully paid up and are listed on the
London Stock Exchange, representing 99.8%
of the Company’s share capital, and 100,000
cumulative preference shares of £1 each have
been issued and fully paid up, representing
0.2% of the Company’s share capital.
Directors
The biographies of the current Board of
Directors are set out on pages 77 to 79.
Duncan Kennedy stepped down as a Director
of the Company on 1 December 2023. Details
in relation to changes in the composition of
the Board are provided in the Nominations
Committee report on pages 84 to 86.
Powers of Directors
The powers of the Directors are determined
by the Company’s Articles, the Companies
Act 2006 and in certain circumstances
(including in relation to the issuing or buying
back by the Company of its shares) the
authority given by the Company in general
meeting. The Directors will be seeking
shareholder approval for the authorities
granted to them in prior years at the
forthcoming AGM. Following the 2023 AGM,
the Directors are authorised to issue and
allot ordinary shares, to disapply statutory
pre-emption rights and to make market
purchases of the Company’s shares. Any
shares purchased may be cancelled or held
as treasury shares.
Substantial shareholders
Information provided to the Company
pursuant to the DTRs is published on a
Regulatory Information Service and on the
Company’s website. As at 31 December
2023, the Company had been notified
(in accordance with Rule 5 of the DTRs)
of the holdings of voting rights attached to
the issued ordinary share capital of the
Company, as set out in the following table:
Additional information and statutory disclosures
SUBJECT MATTER LOCATION PAGES
Particulars of important events affecting the Company which
have occurred since the end of the financial year
Strategic report 04 to 05
14 to 16
Likely future developments in the business Strategic report 14 to 16
Research and development Strategic report 16
Employee involvement and engagement Strategic report 38 and 39
Relationships with suppliers, customers and others Strategic report 46 and 47
Use of financial instruments Note 29 172
111
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Appointment and replacement
of Directors
The rules regarding the appointment and
replacement of Directors are determined by
the Company’s Articles and the Companies
Act 2006. The Articles provide that at each
AGM every Director who has held office on
the date seven days before the date of notice
of the AGM shall retire from office and shall be
eligible for re-election at the AGM.
In accordance with the UK Corporate
Governance Code 2018 (Code), all Directors
will offer themselves for election or re-election
at the forthcoming AGM, with the exception
of Aedamar Comiskey, who will retire at the
conclusion of the AGM.
Directors’ and officers’ liability
insurance and indemnities
The Company maintains an appropriate level
of directors’ and officers’ liability insurance.
Pursuant to the Company’s Articles, the
Company indemnifies the Directors of the
Company and its subsidiaries against liability
to third parties and against liability incurred
in connection with the Company’s activities
as trustee of an occupational pension
scheme, to the extent permitted by the
Companies Act 2006.
Directors’ conflict of interest
Under the Companies Act 2006, a director
must avoid a situation where a direct or indirect
conflict of interest may occur. The Board has
adopted established procedures to address the
management of any potential or actual conflicts
of interest.
A conflict must be authorised in advance by
the Board. Directors are asked at each Board
meeting to check the register of conflicts and
confirm that the register remains up to date
and that it remains appropriate for the relevant
matter to remain authorised.
Employment of disabled persons
James Fisher is an equal opportunities
employer and is firmly committed to both the
principle and realisation of equality. The Group
is committed to complying with all applicable
laws governing employment practices and
to the prevention of discrimination on the
basis of any unlawful criteria. In addition
to complying with legislative requirements,
the Group strives to ensure that disabled
employees (including anyone who becomes
disabled whilst employed with James Fisher)
are treated fairly and that their training, career
development and promotion needs are met.
The Group recognises its responsibility
to provide a safe operating environment
for all its employees. Our strong focus on
employee training, regulatory compliance
and accident reduction provides the support
to allow accountability to remain with local
management who are best-placed to ensure
that their businesses comply with local laws
and regulations and specific needs on a day-
to-day basis. The review of health and safety
performance is the first item on the agenda at
each Board and business board meetings.
We recognise that the success of our business
depends on our talented workforce. Employees
throughout the Group are encouraged to
participate in training and development
programmes and to obtain professional
qualifications relevant to their roles.
Additional information
for shareholders
The Articles can only be amended by a
special resolution at a general meeting of the
shareholders.
No political donations or contributions were
made during the year. Details of the Group’s
time spent supporting local communities
and charitable initiatives is summarised on
page 48.
Details of Group subsidiaries can be found
on pages 196 to 199. Companies within
the Group have overseas branches in Chile,
Mozambique, the United Arab Emirates,
Taiwan and Denmark.
Significant agreements –
change of control
There are a number of agreements that
take effect after, or terminate upon, a
change of control of the Company, such as
commercial contracts. None of these are
considered to be significant in terms of their
likely impact on the business as a whole apart
from those set out below.
The Company is a guarantor of all of the
Group’s bank facilities which upon
a change of control could be withdrawn.
The rules of the Company’s LTIP, ESOS
and Sharesave schemes set out the
consequences of a change of control on the
rights of participants under those schemes.
Participants are generally able to exercise
their options on a change of control, provided
that the relevant performance conditions have
been satisfied.
There are no agreements between the
Company and its Directors or employees
providing for compensation for loss of office
or employment (whether through resignation,
purported redundancy or otherwise) that
arise in the event of a change of control
of the Company.
Substantial shareholders
Number of
shares %
(1)
Nature of
holding
Trustees of the Sir John Fisher Foundation 11,592,360 22.76 Direct
Schroders plc 4,970,246 9.89 Indirect
Aberforth Partners LLP 2,582,790 5.12 Indirect
Odyssean Investment Trust 3,371,429 6.69 Direct
NFU Mutual Insurance Society Limited 1,976,768 3.92 Direct/Indirect
(1) The percentage of voting rights detailed above was calculated at the time of the relevant disclosures made in accordance
with Rule 5 of the DTRs.
In the period from 31 December 2023 to the date of this report, the Company received the
following notifications:
Substantial shareholders
Number of
shares %
Nature of
holding
Trustees of the Sir John Fisher Foundation 10,601,360 20.99 Direct
Odyssean Investment Trust 3,600,000 7.14 Direct
FIL Limited 3,162,0 32 6.26 Indirect
112
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
DIRECTORS’ REPORT CONT.
Disclosure of information
to the Auditor
In accordance with section 418 of the
Companies Act 2006, each Director in office
at the date of approval of this Directors’ report
confirms that:
• So far as the Director is aware, there is
no relevant audit information of which the
Company’s auditor is unaware.
• The Director has taken all the steps
that he/she ought to have taken as a
Director to make him/herself aware of any
relevant audit information and to establish
that the Company’s auditor is aware of
that information.
Information required by Listing Rule 9.8.4
The details of long-term incentive schemes
as required by LR 9.8.4R are set out in the
Remuneration report on pages 92 to 109.
Streamlined Energy and Carbon
Reporting (SECR)
Annual Energy Use
In 2023, the Group’s total energy
consumption associated with Scope 1 and
Scope 2 was 271,151 MWh. The Group’s
non-UK facilities accounted for 61 percent,
with the UK facilities accounting for the
remaining 39 percent. Across the Group,
mobile combustion (fuel) was the largest
source of energy consumed (96.6 percent).
Fuel consumption includes liquid fuels,
namely diesel, petrol, burning oil, fuel oil, and
gas oil, used for stationary (e.g. generator
sets) and mobile combustion (e.g. vessels
and company fleet vehicles) activities. Gas
consumption includes gaseous fuels, namely
natural gas, and liquid petroleum gas,
used for stationary (e.g. boilers) and mobile
combustion (e.g. forklifts) activities.
Greenhouse Gas Emissions
In 2023, the Group’s total Scope 1 and Scope
2 greenhouse gas emissions was 74,707
tCO
2
e. As with energy consumption, the
Group’s non-UK facilities accounted for most
of the greenhouse gas emissions (61 percent),
with the UK sites accounting for the remaining
39 percent.
Assessing the full Scope 3 emissions across
the Group is an ongoing exercise. However,
we have reported on certain Scope 3
emissions: fuel- and energy-related activities
category 3, waste generated in operations
category 5, business travel category 6,
employee commuting category 7, and
upstream leased assets category 8.
Further details on our Scope 3 reporting
and commitments can be found within our
2023 TCFD Report included in our Annual
Sustainability Report.
2022 2023
UK Non-UK UK Non-UK
SECR tCO
2
e MWh tCO
2
e MWh tCO
2
e MWh tCO
2
e MWh
Fugitive Emissions (Scope 1) 27. 2 2 – 36.24 – 14.91 – 55.96 –
Mobile Combustion (Scope 1) 18,592.93 6 7, 5 52. 9 9 53,462.11 193,933.32 28,022.46 101,333.43 44,374.75 160,723.51
Stationary Combustion (Scope 1) 6 4 3.15 3,048.56 216.46 950.25 461.67 2 ,175.79 470.93 1,943.57
Purchased Energy (Scope 2) 774.6 4 3,9 0 8 .18 852.58 2,273.16 528.51 2 ,611.2 3 777.74 2,363.52
Scope 1 & 2 Total 20,037.90 74,509.73 54,567.39 197,15 6 .73 29,027.55 10 6,12 0.45 45,679.38 165,030.60
Business travel by car (Scope 3) 224.53 904.27 398.91 1,495.05 166.63 673.99 566.83 2,134.48
Scope 1 & 2 + business travel by
car (Scope 3) 20,262.47 75,414.01 54,966.31 198,651.79 29,19 4.18 106,794.44 46,246.22 167,165.07
Business Travel (Scope 3) 2,595.60 1,350.67 4,183.35 1,495.05 6,020.47 759.07 3,864.59 2,188 .67
Commuting (Scope 3) 562.54 2,326.01 2,479.14 9,478.59 569.28 2,202.33 1,853.64 6,832.75
Fuel- and energy-related activities
(Scope 3) 4, 6 27. 5 3 – 12,433.08 – 6,631.48 0.35 10,408.97 –
Upstream leased assets (Scope 3) 17,74 5 . 5 9 64,784.17 12,802.71 46,721.01 18,169.05 66,349.29 16,034.45 58,579.29
Waste generated in operations
(Scope 3) 433.06 – 40 9.17 – 123.29 – 430.53 –
Water (Scope 3) 8.60 – 3.97 – 5.51 – 2.46 –
Scope 3 excluding business
travel by car (Scope 3) 25,748.39 67,556.58 31,912.51 56,199.60 31,352.45 68,637.05 32,027.81 65,466.23
Total tCO
2
e 46,010.86 86,878.81 60,546.64 78, 274.03
Total MWh 142,970.58 254,851.39 175,431.49 232,631.30
Scope 1 & 2 + business travel by
car (Scope 3) CO
2
e intensity ratio
(tCO
2
e/£m revenue) 39.60 107.4 3 55.76 88.33
Scope 1, 2 & 3 CO
2
e intensity
ratio (tCO
2
e/£m revenue) 89.92 169.79 115.6 4 149.50
113
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Emissions Intensity Ratio
The energy intensity of our vessels is
measured internally, using the Carbon
Intensity Index to align with the International
Maritime Organisation’s climate goals. In line
with SBTi guidance this may lead to absolute
emission reductions which are reported on
within the Annual Report and Accounts. We
are tracking two emission-based intensity
indicators (Scope 1, Scope 2 and Scope 3),
and consumption-based intensity indicators
by Scope 1 and Scope 2, Scope 3, and
combined. 2023 results are shown below:
• tCO
2
e/FTE headcount: 64.03.
• tCO
2
e/£m revenue: 265.15.
• MWh/FTE headcount: total energy intensity:
188.21, Scope 1 and Scope 2: 125.06.
• MWh/£m revenue: total energy intensity:
779.40, Scope 1 and Scope 2: 517.90.
As a multi-sector business the use of FTE
and Revenue £m allows consistency and
comparability for the Group.
Methodology
The Group is diverse, made up of lots of
Product Lines which independently collate
and report on their own company emissions
data. The work in consolidating our combined
emissions data takes a significant period
of time. Therefore, to mitigate the risk of
reduced data integrity, the Group adopted a
change in methodology in 2021 moving the
reporting period from a financial year (ending
31 December) to 1 October to 30 September.
This allows sufficient time before the financial
year end to report on the data.
James Fisher operates a fleet of vessels
across its business units. In order to account
for these vessels in the SECR disclosure,
the Group has used the trading area of the
vessel to distinguish between its UK and
non-UK footprint as the trading area most
closely indicates where fuel is consumed and,
therefore, where the associated emissions
should be accounted for.
The Group used verifiable activity data,
namely meter data and invoices, where
reasonable and practicable. Where verifiable
data was not available, estimates based on
data from previous comparable time periods
were used to close the gaps. The activity
data was reported at Product Line level and
collated and analysed at Group level. Our
greenhouse gas emissions are calculated
in accordance with the requirements of the
GHG Protocol: A Corporate Accounting and
Reporting Standard, revised edition. Emission
conversion factors from:
Department for Business, Energy and Industrial
Strategy (2023). 2023 Government GHG
Conversion Factors for Company Reporting.
Department for Business, Energy and Industrial
Strategy (2022). 2022 Government GHG
Conversion Factors for Company Reporting.
United Nations (2023). UN Statistics
Division-2020 Energy Balance Visualizations.
www.unstats.un.org/unsd/energystats/
dataPortal/#IPCC (2019). Revised IPCC
Guidelines for National Greenhouse
Gas Inventories: Reference Manual.
Intergovernmental Panel on Climate Change.
Cambridge University Press, Cambridge.
(No refinement from 2006).
EPA (2022). Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990-2020.
United States Environmental Protection
Agency. Online: www.epa.gov/ghgemissions/
inventory-us-greenhouse-gas-emissions-and-
sinks-1990-2020.
EPA (2023). GHG Emission Factors Hub. Center
for Corporate Climate Leadership. April 2023.
www.epa.gov/climateleadership/ghg-emission-
factors-hub. Accessed April 2023.
EPA (2024). eGrid2022. Release: 1/30/2024.
Online: www.epa.gov/egrid/download-data.
Accessed 9 February 2024.
The Group’s disclosures are based on location-
based results. We recognise there are benefits
in monitoring market-based data and are in the
process of applying market-based instruments.
Energy Efficiency Action
As part of our commitment to setting net zero
targets in alignment with the Paris Climate
Agreement, emissions reduction pathways
have been modelled at Group level. In 2023
the relevant reduction options were integrated
into the strategies and plans for Tankships,
part of our Maritime Transport Division and
highest emitters. This does not replace the
detailed planning already in place at this level
but enhances and ensures alignment with
Group priorities and targets. 2024 will see
the relevant reduction opportunities identified
through the Group reduction pathway
modelling and opportunities identified by
the Product Lines since, integrated into the
strategies and carbon reduction plans across
the Group.
Throughout the Company we are continuing to
install energy-efficient lighting, replace end-of-
life appliances with energy efficient alternatives
and, while paused in 2023 due to Company
restructuring, we plan to explore the use of
voltage optimisation technology to regulate
incoming power supply. Various Product
Lines are transitioning to energy-efficient
fleet vehicles.
Identifying efficiency improvements and
changing our day-to-day behaviours plays
a significant role in our sustainable culture
change. We are investing in our people
with over 30 trained Green Belts and
8 Black Belts, each acting as key drivers
in sustainable change through Lean Six
Sigma. Lean manufacturing and continuous
improvement will help to identify and drive
energy efficiency opportunities and help
make greater use of what we have through
increased productivity in our systems and
processes.
In 2024 we intend to review our policies
and guidance around responsible use
of appliances and leveraging our digital
capabilities.
James Fisher is in the process of transitioning
across to a one hundred percent renewable
energy supplier for our UK-based Product
Lines. While this does not directly lead to
increased energy efficiency, it does lead
to less emissions (market-based) and
greater awareness of our net zero activities
throughout the Group. When it comes to
workplace energy expenditure, we believe our
employee’s day-to-day habits are significantly
influential.
Energy efficiency campaigns and initiatives
planned for 2024 will focus on encouraging
energy-efficient habits. This may include
utilising energy audit outcomes to drive
efficiencies across the Group for example
conserving energy through stabilising indoor
temperatures through roofs and ceilings,
minimising the use of printers, installation
of motion sensors, use of energy-efficient
equipment with an Energy Star rating, use of
smart meters to monitor consumption.
2022 data
While every effort is made to identify
anomalies within the current reporting year
including training and internal quality checks,
there are instances, "aided" by an automatic
system trigger which highlights a current
versus previous year entry where significantly
different, where the anomaly is found during
the following reporting year reconciliation
and subsequently the relevant Scope is re-
calculated. For example, in 2023, Scope 1
decreased from previously reported 77,602
tCO
2
e, to 72,978 tCO
2
e due to a duplicate
data value identified. Additionally, Scope 2
increased by 199 tCO
2
e due to electricity
data changing scopes, which were incorrectly
allocated at the time (1,508 up to 1,627
tCO
2
e), and there was a Scope 3 reduction of
2,160 (60,444 down to 58,284 tCO
2
e), in part
to a unit of measure error (k tonnes corrected
to “tonnes”). The revised figures are reflected
in the table at the start of this section.
114
James Fisher and Sons plc – Annual Report and Accounts 2023
Governance
Our work towards ensuring a robust control
environment for GHG emissions data and
planning for limited assurance will play a key
role in reducing such errors in the first place.
We are continually developing and enhancing
guidance, supporting with tools and training
for those involved with reporting, such as
providing step-by-step instructions to assist
with accounting for the emissions across
the different scopes. Additionally, in 2023
we started an assurance readiness review
supported by specialist ESG consultants SLR
Consulting, in preparation for internal GHG
inventory audits in 2024 and working towards
Limited Assurance.
Further details on carbon reduction and
energy efficiency activities can be found within
the GHG emissions section and 2023 TCFD
report both included in our 2023 Annual
Sustainability Report.
Annual General Meeting (AGM)
The AGM is to be held on 30 May, 2024 at
Abbey House Hotel and Gardens in Barrow-
in-Furness. Further details will be provided in
the Notice of AGM.
The Directors’ report was approved by the
Board of Directors and is signed on its
behalf by:
Karen Hayzen-Smith
Chief Financial Officer
16 April 2024
DIRECTORS’ REPORT CONT.
115
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing
the Annual Report and Accounts and
the Group and Parent Company financial
statements in accordance with applicable law
and regulations.
Company law requires the Directors to
prepare Group and Parent Company financial
statements for each financial year. Under that
law they are required to prepare the Group
financial statements in accordance with UK-
adopted international accounting standards
and applicable law and have elected to
prepare the Parent Company financial
statements on the same basis.
Under company law the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair view
of the state of affairs of the Group and Parent
Company and of the Group’s profit or loss for
that period. In preparing each of the Group
and Parent Company financial statements, the
Directors are required to:
• Select suitable accounting policies and
then apply them consistently.
• Make judgements and estimates that are
reasonable, relevant and reliable.
• State whether they have been prepared in
accordance with UK-adopted international
accounting standards.
• Assess the Group and Parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related to
going concern.
• Use the going concern basis of accounting
unless they either intend to liquidate the
Group or the Parent Company or to cease
operations, or have no realistic alternative
but to do so.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Parent
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Parent Company and enable
them to ensure that its financial statements
comply with the Companies Act 2006. They
are responsible for such internal control as
they determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error, and have general
responsibility for taking such steps as are
reasonably open to them to safeguard the
assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing a
Strategic report, Directors’ report, Directors’
Remuneration report and Corporate
Governance Statement that complies with
that law and those regulations.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website. Legislation in the UK
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
In accordance with Disclosure Guidance
and Transparency Rule (DTR) 4.1.16R, the
financial statements will form part of the
annual financial report prepared under DTR
4.1.17R and 4.1.18R. The auditor’s report
on these financial statements provides no
assurance over whether the annual financial
report has been prepared in accordance with
those requirements.
Responsibility statement of the
Directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
• The financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and
fair view of the assets, liabilities, financial
position and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole.
• The Strategic report and Directors’
report includes a fair review of the
development and performance of the
business and the position of the Company
and the undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders to
assess the Group’s position and performance,
Business model and strategy.
Signed on behalf of the Board of Directors:
Jean Vernet
Chief Executive Officer
16 April 2024
Karen Hayzen-Smith
Chief Financial Officer
16 April 2024
116
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JAMES FISHER AND SONS PLC
1 Our opinion is unmodified
We have audited the financial statements of James Fisher and Sons plc (“the Company”) for the year ended 31 December 2023 which comprise
the Consolidated Income Statement, the Consolidated Statement of Other Comprehensive Income, the Consolidated and Company Statement
of Financial Position, the Consolidated and Company Cash Flow Statement, the Consolidated and Company Statement of Changes in Equity and
the related notes, including the accounting policies in Note 33.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023 and
of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the Audit Committee.
We were first appointed as auditor by the directors on 30 June 2008. The period of total uninterrupted engagement is for the sixteen financial
years ended 31 December 2023. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with,
UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities.
No non-audit services prohibited by that standard were provided.
OVERVIEW
Materiality: Group financial
statements as a whole
£2.30m (2022: £1.65m) 0.5% of revenue from continuing operations (2022:0.3% of revenue from continuing
operations)
Coverage 89% (2022: 78%) of Group revenue
Key audit matters vs 2022
Recurring risks Recoverability of goodwill
Recoverability of Parent Company investment in
Subsidiaries p
Event driven Going concern
117
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
2 Material uncertainty related to going concern
THE RISK OUR RESPONSE
Going concern
We draw attention to Note 1 of the
financial statements which describes
a material uncertainty in respect of
the Group’s reliance on successful
mitigations under the combined
severe but plausible scenario and
the ability to refinance prior to
March 2025.
These events and conditions, along
with the other matters explained
in Note 1, constitute a material
uncertainty that may cast significant
doubt on the Group’s and the Parent
Company’s ability to continue as a
going concern.
Our opinion is not modified in respect
of this matter.
Refer to page 88 (Audit Committee
report and disclosure of material
uncertainty related to going concern
(Note 1).
Disclosure quality
The financial statements explain
how the Board has formed a
judgement that it is appropriate
to adopt the going concern basis
of preparation for the Group and
Parent Company.
That judgement is based on an
evaluation of the inherent risks
to the Group’s and Company’s
business model and how those
risks might affect the Group’s and
Company’s financial resources or
ability to continue operations over
a period of at least 12 months
from the date of approval of the
financial statements.
There is little judgement involved in
the directors’ conclusion that risks
and circumstances described in
Note 1 to the financial statements
represent a material uncertainty
over the ability of the Group and
Company to continue as a going
concern for a period of at least 12
months from the date of approval
of the financial statements.
However, clear and full disclosure
of the facts and the Directors’
rationale for the use of the going
concern basis of preparation,
including that there is a related
material uncertainty, is a key
financial statement disclosure
and so was the focus of our audit
in this area. Auditing standards
require that to be reported as a
key audit matter.
Our procedures included:
Funding assessment
We inspected the Group’s RCF agreement to identify relevant
financial and non-financial covenants and key terms including the
maturity date
Covenant calculation
We reperformed the year end covenant calculation for the facility in
line with the RCF agreement.
Benchmarking assumptions
We critically assessed assumptions in base case and downside
scenarios including any events and conditions until the
announcement date, in particular those which would impact
on the net debt/EBITDA, liquidity and interest cover covenants.
Consistency with assumptions used in other areas such as
forecasts used for impairment were considered. Key assumptions
included underlying operating profit, net debt, liquidity and forecast
interest rates.
The interest rate assumption was benchmarked against third party
evidence to determine an appropriate range of possible outcomes.
We also considered the impact of planned disposals on the
Group’s forecasts and covenant compliance under the existing RCF
agreement.
Historical comparisons
We assessed the ability of the Group to accurately forecast by
comparing historical results to forecasts and we assessed the
most recent year’s performance against forecasts to challenge key
assumptions in the base case and downside scenario.
Sensitivity analysis
We have considered whether the assumptions applied in the severe
but plausible scenario are considered to be severe enough using
our assessment of the possible range of each key assumption and
taking account of plausible (but not unrealistic) adverse effects that
could arise.
Evaluating Directors’ intent
We evaluated the achievability of the actions the directors consider
they would take to improve the position should the risks materialise,
which included seeking additional waivers from lenders, reducing
discretionary spend on certain projects and hiring freezes, taking
into account the extent to which the directors can control the timing
and outcome of these.
Evaluating ability to re-finance
We considered the appropriateness and achievability of
management’s ability to re-finance at the end of the facility period.
Assessing transparency
We considered whether the going concern disclosure in Note 1 to
the financial statements gives a full and accurate description of the
Directors’ assessment of going concern, including the identified
risks, and related sensitivities.
Our results: We found the going concern disclosure in note 1
with a material uncertainty to be acceptable. (2022: Acceptable).
118
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JAMES FISHER AND SONS PLC CONT.
3 Other key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
Going concern is a significant key audit matter and is described in section 2 of our report. We summarise below the other key audit matters, in
decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters
and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our
opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
Recoverability of goodwill related to JFD with carrying value of £8.6m (2022: £34.1m) after an impairment charge of £25.0m (2022:
£0.0m) and a CGU included within ‘‘CGUs without significant goodwill’’ Multiple with carrying value of £9.4m (2022: £9.4m) Risk vs
2022: Stable
Refer to page 89 (Audit Committee report), page 187 (accounting policy) and page 149 (financial disclosure)
The risk: Forecast based assessment
The recoverability of goodwill in the Group is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows,
particularly in light of the ongoing trading and operational difficulties faced in the current and prior years.
The effect of these matters is that, as part of our risk assessment, we determined that the recoverable amount of goodwill has a high degree of
estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole and
possibly many times that amount. The financial statements Note 12 discloses the sensitivity estimated by the Group for goodwill.
Through our risk assessment, we have isolated the risk of material impairment to the goodwill balances related to JFD and one CGU within
‘Multiple CGUs without significant goodwill’ due to the increased level of inherent uncertainty within the Group’s discounted cashflow workings for
these two CGUs. As a result of the level of estimation uncertainty and the potential for management bias, we identified a significant risk of both
fraud and error in respect of the impairment of goodwill of these CGUs. The financial statements Note 12 discloses management’s process for
undertaking the impairment assessment, including details of key assumptions and sensitivity analysis.
Our response: We performed the tests below rather than seeking to rely on any of the Group’s controls because the nature of the balance is
such that detailed testing is inherently the most effective means of obtaining audit evidence.
Our audit procedures included:
1 Historical comparisons: Assessing the reasonableness of management’s budgets by considering the historical accuracy of previous
forecasts.
2 Our sector experience: Evaluating the assumptions used, in particular those relating to anticipated revenue growth, including expected
new business and rates of contract retention, the gross margin, the discount rate and the terminal growth rate. We have considered market
conditions, including potential impacts of climate change and known or probable changes in the business environment, when challenging
the key assumptions in the cashflows. We assessed the key assumptions in the Group’s forecasts, drawing on historical data and our own
research and sector experience.
3 Benchmarking assumptions: Comparing the Group’s assumptions to externally derived data in relation to key inputs such as market
growth rate, terminal growth value, discount rate (using our own valuation specialist), and the period of cash flows included within the model.
Considering whether items of capital expenditure included in the budget are allowable in the value-in-use cash flow forecasts under the
accounting standards.
4 Sensitivity analysis: Performing sensitivity analysis on the key assumptions noted above either in isolation or in aggregate. This included
reperforming management’s sensitivities within their goodwill impairment model.
5 Assessing transparency: Assessing whether the Group’s disclosures about the sensitivity of the outcome of the impairment assessment to
changes in key assumptions reflected the risks inherent in the recoverable amounts of goodwill.
We performed an assessment of whether an overstatement in the recoverable amount of goodwill identified through these procedures was
material.
Our results: We found the Group goodwill balance, and the related impairment charges, to be acceptable (2022: acceptable).
Recoverability of Parent Company investment in Subsidiaries with a carrying value of £268.7m (2022: £114.4m), after an
impairment charge of £75.6m (2022: £nil), Risk vs 2022: Increased
Refer to page 89 (Audit Committee report), page 157 (accounting policy) and pages 157 to 158 (financial disclosure)
The risk: Forecast based assessment
The recoverability of the Parent Company’s investments is subjective due to the inherent uncertainty involved in forecasting and discounting future
cash flows, particularly in light of the ongoing trading, the Group’s market capitalisation versus Parent Company’s net assets and operational
difficulties faced in the current and prior years.
119
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
The effect of these matters is that, as part of our risk assessment, we determined that the recoverable amount of investment in subsidiaries had
a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements
as a whole and possibly many times that amount. As a result of the level of estimation uncertainty and the potential for management bias, we
identified a significant risk of both fraud and error in respect of the recoverability of Parent Company investment in Subsidiaries. In conducting
our final audit work, and considering the impairment recognised during the year, we concluded that reasonably possible changes to the value in
use of the relevant investments in subsidiaries would not be expected to result in a material change to the impairment necessary. The financial
statements Note 17 discloses management’s process for undertaking the impairment assessment, including details of key assumptions and
sensitivity analysis.
Our response: We performed the tests below rather than seeking to rely on any of the Group’s controls because the nature of the balance is
such that detailed testing is inherently the most effective means of obtaining audit evidence.
Our audit procedures included:
1 Test of detail: Comparing the carrying value of 100% of investments with the relevant subsidiaries’ net assets included within the Group
consolidation to identify whether their net assets, being an approximation of their minimum recoverable amount, were in excess of their
carrying amount
2 Historical comparisons: Assessing the reasonableness of management’s budgets by considering the historical accuracy of previous
forecasts.
3 Our sector experience: Evaluating the assumptions used, in particular those relating to anticipated revenue growth, including expected
new business and rates of contract retention, the discount rate and the terminal growth rate. We have considered market conditions, including
potential impacts of climate change and known or probable changes in the business environment, when challenging the key assumptions
in the cashflows. We assessed the key assumptions to the Group’s forecasts, drawing on historical data and our own research and sector
experience.
4 Benchmarking assumptions: Comparing the Group’s assumptions to externally derived data in relation to key inputs such as market
growth rate, terminal growth value, discount rate, and the period of cash flows included within the model. Considering whether items of capital
expenditure included in the budget are allowable in the value-in-use cash flow forecasts under the accounting standards.
5 Sensitivity analysis: Performing sensitivity analysis on the key assumptions noted above either in isolation or in aggregate. This included
reperforming management’s sensitivities within their investment impairment model.
6 Assessing transparency: Assessing whether the Company’s disclosures about the sensitivity of the outcome of the recoverability
assessment to changes in key assumptions reflected the risks inherent in the recoverable amounts of the investment balance and the
methodology of the Company’s assessment.
Our results: We found the carrying value of Parent Company investments in Subsidiaries and the related impairment charges, to be acceptable
(2022: acceptable).
We continue to perform procedures over Revenue recognition over construction contract income, Contract assets, Contract liabilities and Parent
Company impairment of loans to subsidiaries. However, following our risk assessment, due to the stage of completion of construction contracts
and the capitalisation of Parent Company loans, we have not assessed these as the most significant risks in our current year audit and, therefore,
they are not separately identified in our report this year.
4 Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £2.30m (2022: £1.65m) determined with reference to a benchmark of Group
revenue from continuing operations, of £496.2m of which it represents 0.5% (2022: Group revenue from continuing operations, of which it
represented 0.3%).
We consider total Group revenue from continuing operations to be the most appropriate benchmark because of the significant fluctuations in the
profit before tax in recent years caused by impairments, refinancing, rising inflation and cost of living crisis. Whilst the Group is focused on profit
measures, there has been significant volatility in recent years which has impacted the Group’s profit before tax without any significant reduction in the
scale of the operations.
Materiality for the Parent company financial statements as a whole was set at £2.0m (2022: £1.6m), determined by reference to the parent
company’s total assets of £412.5m (2022: £488.1m), of which it represents 0.5% (2022: 0.3%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add
up to a material amount across the financial statements as a whole.
Performance materiality for the group was set at 65% (2022: 65%) of materiality for the financial statements as a whole, which equates to £1.5m
(2023: £1.1m).
We applied this percentage in our determination of performance materiality based on the level of control deficiencies and identified misstatements
during this period and the prior period.
Performance materiality for the parent company was set at 75% (2022: 75%) of materiality for the financial statements as a whole, which equates to
£1.5m (2022: £1.2m).
120
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk.
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £115k (2022: £82k), in addition to
other identified misstatements that warranted reporting on qualitative grounds.
Of the Group’s 170 (2022: 176) reporting components, we subjected 10 (2022: 13) to full scope audits for Group purposes and 4 (2022: 2) to
specified risk-focussed audit procedures. The latter were not individually financially significant enough to require a full scope audit for Group
purposes but did present specific individual risks that needed to be addressed.
The components within the scope of our work accounted for the following percentages of the Group’s results:
Number
of components
Group
Revenue
Group profit
before tax
Group
total assets
Audits for group reporting purposes 10 (2022: 13) 74% (2022: 75%) 77% (2022: 75%) 80% (2022: 78%)
Specified procedures for group reporting purposes 4 (2022: 2) 14% (2022: 3%) 6% (2022: 0%) 7% (2022: 4%)
Total 14 (2022: 15) 89% (2022: 78%) 83% (2022: 75%) 87% (2022: 82%)
The remaining 11% (2022: 22%) of total Group revenue, 17% (2022: 25%) of Group profit before tax and 13% (2022: 18%) of total Group assets
is represented by 156 (2022: 161) reporting components, none of which individually represented more than 2% of any of total Group revenue, 4%
Group profit before tax and 2% total Group assets.
For these residual components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant
risks of material misstatement within these.
The Group audit team instructed component auditors as to the significant areas to be covered, including the relevant risks detailed above
and the information to be reported back. The Group audit team approved the component materialities, which ranged from £0.27m to £1.3m
(2022: £0.1m to £1.0m), having regard to the mix of size and risk profile of the Group across the components.
The work on 11 (2022: 12) of the 14 (2022: 15) components was performed by component auditors and the rest, including the audit of the
Parent Company, was performed by the Group audit team.
The scope of the audit work performed was predominantly substantive as we placed limited reliance upon the Group’s internal control over
financial reporting.
The Group team visited 3 (2022: 5) component locations to assess the audit risk and strategy. Regular video and telephone conference meetings
were also held with all component auditors. At these visits and meetings, the findings reported to the Group team were discussed in more detail,
and any further work required by the Group team was then performed by the component auditor.
5 The impact of climate change on our audit
In planning our audit, we have considered the potential impact of climate change on the group’s business operations and its financial statements
taking into account the different divisions. We recognise given the diverse nature of the group’s operations there are potentially both risks and
opportunities arising as a result of climate change.
The potential effects of climate change vary for different activities of the group, with those divisions that are more linked to fossil fuel activity
potentially being more affected as there is a transition to focus on more renewable energy sources.
Uncertainties and potential changes to the longer-term activity of the group could affect the elements of financial statements with forward-looking
assessments such as impairment of, or reassessment of the life of, long-term assets and goodwill balances.
As part of our risk assessment we made enquiries of management and reviewed board minutes and related risk and internal audit documents.
We have held discussions with our own climate change professionals to challenge our risk assessment. Our risk assessment took into account
the nature of the group’s long-term assets and the relative size of assets related to the divisions with most exposure to climate change
uncertainty.
In the course of our audit work, we also took climate change factors into account in evaluating the directors’ assessment of the useful life of
vessels and when evaluating the directors’ assessment of recoverability of goodwill.
We have read the disclosure of climate related information in the front half of the annual report and considered consistency with the financial
statements and our audit knowledge.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JAMES FISHER AND SONS PLC CONT.
121
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
6 Going concern basis of preparation
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Company
or to cease their operations, and as they have concluded that the Group’s and the Company’s financial position means that this is realistic for at
least 12 months from the date of approval of the financial statements (“the going concern period”). As stated in section 2 of our report, they have
also concluded that there is a material uncertainty related to going concern.
An explanation of how we evaluated management’s assessment of going concern is set out section 2 of our report.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
• we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial statements on the use
of the going concern basis of accounting, and their identification therein of a material uncertainty over the Group and Company’s ability to
continue to use of that basis for the going concern period; and
• the related statement under the Listing Rules is materially consistent with the financial statements and our audit knowledge.
7 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure
to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Enquiring of directors, the audit committee, internal audit, the Group General Counsel and the Company Secretary and inspection of policy
documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, the
Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
• Reading Board, audit committee and risk committee minutes.
• Considering remuneration incentive schemes and performance targets for management and directors.
• Using analytical procedures to identify any unusual or unexpected relationships.
• Consultation with our own forensic professionals regarding the identified fraud risks and the design of the audit procedures planned in
response to these. This involved discussion between the engagement partner, the Group audit team and the forensic professionals.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This
included communication from the Group audit team to full scope component audit teams of relevant fraud risks identified at the Group level
and request to full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material
misstatement at the Group level.
As required by auditing standards and taking into account possible pressures to meet profit targets, covenants for banking facilities and our
overall knowledge of the control environment, we perform procedures to address the risk of management override of controls, in particular,
the risk that Group and component management may be in a position to make inappropriate accounting entries as well as the risk of bias in
accounting estimates such as provisions for impairment of goodwill.
On this audit we do not believe there is a fraud risk related to revenue recognition on long-term contracts due to the stage of completion of those
contracts; and for remaining revenue streams, we do not believe there is a fraud risk related to revenue recognition as the recognition is not
complex.
We did not identify any additional fraud risks.
Further detail in respect of goodwill impairment is set out in the key audit matter disclosures in section 3 of this report.
We performed procedures including:
• Identifying journal entries to test for all full scope components based on risk criteria, including unexpected journals posted to revenue,
expense, cash and borrowings accounts; and commissions paid to agents as well as journals posted by senior members of management and
journals with specific descriptions and comparing the identified entries to supporting documentation.
• Evaluating the business purpose of significant unusual transactions.
• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias including assessing for bias the
provision for impairment of goodwill.
We discussed with the audit committee matters related to actual or suspected fraud, for which disclosure is not necessary, and considered any
implications for our audit.
122
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our
general commercial and sector experience, through discussion with the directors, the Group General Counsel, the Company Secretary and other
management (as required by auditing standards) and from inspection of the Group’s regulatory and legal correspondence and discussed with the
directors, the Group General Counsel, the Company Secretary and other management the policies and procedures regarding compliance with
laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures
for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the
audit. This included communication from the group to full-scope component audit teams of relevant laws and regulations identified at the Group
level, and a request for full scope component auditors to report to the group team any instances of non-compliance with laws and regulations
that could give rise to a material misstatement at the Group level.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation, taxation legislation and pension legislation and we assessed the extent of
compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s license to
operate. We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery, foreign corrupt practices
act, employment law, maritime law and certain aspects of company legislation recognising the nature of the Group’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed
to us or evident from relevant correspondence, an audit will not detect that breach.
We discussed with the audit committee matters related to actual or suspected breaches of laws or regulations, for which disclosure is not
necessary, and considered any implications for our audit.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely
the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
8 We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we
have not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JAMES FISHER AND SONS PLC CONT.
123
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of
emerging and principal risks and the viability statement, and the financial statements and our audit knowledge.
Based on those procedures, other than the material uncertainty related to going concern referred to above, we have nothing further material to
add or draw attention to in relation to:
• the directors’ confirmation within the Corporate Governance Report on page 82 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and
liquidity;
• the Principal Risks disclosures describing these risks and how emerging risks are identified, and explaining how they are being managed and
mitigated; and
• the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so
and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
We are also required to review the viability statement, set out on page 67 under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and
Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit
knowledge:
• the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model
and strategy;
• the section of the annual report describing the work of the Audit Committee, including the significant issues that the audit committee
considered in relation to the financial statements, and how these issues were addressed; and
• the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK
Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect.
9 We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
124
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
10 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 115, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17.R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been prepared
in accordance with those requirements.
11 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Andrew Campbell-Orde (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St. Peter Square
Manchester
M2 3AE
16 April 2024
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JAMES FISHER AND SONS PLC CONT.
125
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
| Year ended | Year ended | ||
| 31 December | 31 December | ||
| 2023 | 2022* | ||
| Total | Total | ||
| Notes | £m | £m | |
| Continuing operations | |||
Revenue | 3 | ||
Cost of sales | ( | ( | |
Gross profit | |||
Administrative expenses | ( | ( | |
Impairment charges | 4 | ( | ( |
Refinancing costs | ( | ||
Restructuring costs | ( | ( | |
Share of post-tax results of associates | 16 | ||
Operating (loss)/profit | 4 | ( | |
Finance income | 7 | ||
Finance expense | 7 | ( | ( |
(Loss)/profit before taxation | ( | ||
Income tax | 8 | ( | ( |
(Loss)/profit for the year from continuing operations | ( | ||
Loss for the year from discontinued operations, net of tax | 5 | ( | ( |
Loss for the year | ( | ( | |
| Attributable to: | |||
Owners of the Company | ( | ( | |
Non-controlling interests | |||
( | ( | ||
Loss per share | pence | pence | |
Basic | 10 | ( | ( |
Diluted | 10 | ( | ( |
(Loss)/profit per share – continuing activities | pence | pence | |
Basic | 10 | ( | |
Diluted | 10 | ( |
* Impairment costs (£4.9 m) and restructuring costs (£1.7 m) for the year ended 31 December 2022 which were previously included within administrative expenses have been represented to
conform with the current year presentation of these costs. In addition, £0.3 m of charges separately reported in 2022 within Impairment of trade and other receivables are now included within
Impairment charges.
The accompanying Notes form part of these financial statements.
126
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
| Year ended | Year ended | ||
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| Total | Total | ||
| Notes | £m | £m | |
Loss for the year | ( | ( | |
| Other comprehensive income: | |||
| Items that will not be classified to the income statement | |||
Actuarial gain in defined benefit pension schemes | 23 | ||
Tax on items that will not be reclassified | ( | ( | |
| Items that may be reclassified to the income statement | |||
Exchange differences on foreign currency net investments | ( | ||
Effective portion of changes in fair value of cash flow hedges | 29 | ( | |
Effective portion of changes in fair value of cash flow hedges in joint ventures | 16 | ( | |
Net changes in fair value of cash flow hedges transferred to income statement | ( | ||
Tax on items that may be reclassified | 8 | ( | ( |
( | |||
Total other comprehensive income for the year | ( | ||
Total comprehensive income for the year | ( | ||
| Attributable to: | |||
Owners of the Company | ( | ||
Non-controlling interests | |||
( |
The accompanying Notes form part of these financial statements.
127
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2023
Group | Company | ||||
| 31 December | 31 December | 31 December | 31 December | ||
| 2023 | 2022 | 2023 | 2022 | ||
| Notes | £m | £m | £m | £m | |
| Non-current assets | |||||
Goodwill | 12 | – | – | ||
Other intangible assets | 13 | – | – | ||
Property, plant and equipment | 14 | 1.0 | 1.1 | ||
Right-of-use assets | 15 | 0.8 | 1.0 | ||
Investment in joint ventures | 16 | – | – | ||
Investments and loans to subsidiaries | 17 | 376.7 | 456.5 | ||
Other investments | 17 | 1.4 | 1.4 | ||
Retirement benefit surplus | 23 | 7.4 | 5.5 | ||
Other receivables | 19 | – | – | ||
Deferred tax assets | 9 | 0.1 | – | ||
3 8 7.4 | 465.5 | ||||
| Current assets | |||||
Inventories | 18 | – | – | ||
Trade and other receivables | 19 | 14.2 | 22.2 | ||
Assets held for sale | 20 | – | – | ||
Cash and cash equivalents | 27 | 10.9 | 0.4 | ||
25.1 | 22.6 | ||||
| Current liabilities | |||||
Trade and other payables | 21 | ( | ( | (33.9) | (27. 2) |
Provisions | 22 | ( | ( | (8.4) | – |
Liabilities associated with assets held for sale | 20 | ( | ( | – | – |
Current tax | 8 | ( | ( | (2.8) | – |
Borrowings | 27 | ( | ( | (13.7) | (45.3) |
Lease liabilities | 27 | ( | ( | (0.6) | (0.2) |
( | ( | (59.4) | (72.7) | ||
Net current assets | (34.3) | (50.1) | |||
Total assets less current liabilities | 353.1 | 415.4 | |||
| Non-current liabilities | |||||
Other payables | 21 | ( | – | – | |
Provisions | 22 | ( | ( | – | – |
Retirement benefit obligations | 23 | ( | ( | (0.5) | (0.2) |
Cumulative preference shares | 30 | ( | ( | (0.1) | ( 0.1) |
Borrowings | 27 | ( | ( | (166.6) | (121.8) |
Lease liabilities | 27 | ( | ( | (0.7) | (1.3) |
Deferred tax liabilities | 9 | ( | ( | – | (0.8) |
( | ( | (167. 9 ) | (124.2) | ||
Net assets | 185.2 | 291.2 | |||
| Equity | |||||
Called up share capital | 30 | 12.6 | 12.6 | ||
Share premium | 26.8 | 26.8 | |||
Treasury shares | ( | ( | (0.5) | (0.6) | |
Other reserves | ( | ( | 2.5 | 3.6 | |
Retained earnings | 143.8 | 248.8 | |||
Total shareholders' equity | 185.2 | 291.2 | |||
Non-controlling interests | – | – | |||
Total equit y | 185.2 | 291.2 |
The Company’s loss for the year was £106.5m (2022: £11.6m).
The accompanying Notes form part of these financial statements.
Company number: 00211475
128
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
CONSOLIDATED AND COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Group | Company | ||||
| 31 December | 31 December | 31 December | 31 December | ||
| 2023 | 2022 | 2023 | 2022 | ||
| Notes | £m | £m | £m | £m | |
Loss for the year | ( | ( | (106.5) | (11.6) | |
Tax (credit)/charge | 2.8 | (0.5) | |||
| Adjustments to reconcile (loss)/profit before tax to net cash flows | |||||
Depreciation and amortisation | 0.6 | 0.8 | |||
Impairments | 2 | 75.6 | 27.7 | ||
Loss on remeasurement to fair value less costs to sell | 5 | – | – | ||
Net finance expense/(income) | ( 7.2) | (6.1) | |||
Loss/(gain) on disposal of businesses, net of disposal costs | ( | 2.1 | – | ||
Gains on disposals of property, plant and equipment | ( | ( | – | – | |
Other non-cash items | ( | ( | (0.6) | 0.1 | |
Decrease/(increase) in inventories | ( | – | – | ||
Decrease/(increase) in trade and other receivables | (0.4) | (3.9) | |||
(Decrease)/increase in trade and other payables | ( | ( | 14.9 | 5.2 | |
Defined benefit pension cash contributions less service cost | (0.2) | 0.3 | |||
Cash generated from operations | (18.9) | 12.0 | |||
Income tax payments | ( | ( | – | (0.1) | |
Cash flow from operating activities | (18.9) | 11.9 | |||
| Investing activities | |||||
Dividends from joint venture undertakings | – | – | |||
Proceeds from the disposal of a subsidiary, net of cash disposed | 26 | ( | (3.2) | – | |
Proceeds from the disposal of property, plant and equipment* | – | – | |||
Finance income | 27.6 | 14.7 | |||
Acquisition of subsidiaries, net of cash acquired | 25 | ( | – | – | |
Loans advanced to subsidiaries | (15.3) | (34.8) | |||
Loans repaid from subsidiaries | 26.3 | 32.8 | |||
Acquisition of property, plant and equipment | ( | ( | (0.2) | (0.4) | |
Development expenditure | ( | ( | – | – | |
Cash flows (used in)/from investing activities | ( | ( | 35.2 | 12.3 | |
| Financing activities | |||||
Finance costs | ( | ( | (15.9) | ( 7.2) | |
Acquisition of non-controlling interests (NCI) | 25 | ( | – | – | |
Capital element of lease repayments | ( | ( | (0.4) | (0.2) | |
Proceeds from borrowings | 19 8.1 | 166.0 | |||
Repayment of borrowings | ( | ( | (191.7) | (182.5) | |
Cash flows used in financing activities | ( | ( | (9.9) | (23.9) | |
Net increase in cash and cash equivalents | 28 | ( | 6.4 | 0.3 | |
Cash and cash equivalents at 1 January | 27 | (8.3) | (8.6) | ||
Net foreign exchange differences | ( | (0.9) | – | ||
Cash transferred to asset held for sale | 5 | ( | ( | – | – |
Cash and cash equivalents at 31 December | 27 | (2.8) | (8.3) |
* Proceeds from disposal of property, plant and equipment includes £19.8 m (2022: £nil) from assets held for sale (see Note 20).
The accompanying Notes form part of these financial statements.
129
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
| Total | Non- | |||||||
| Share | Share | Retained | Other | Treasury | shareholders’ | controlling | Total | |
| capital | premium | earnings | reserves | shares | equity | interests | equity | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2022 | ( | ( | ||||||
Loss for the year | ( | ( | ( | |||||
Other comprehensive income | ||||||||
Contributions by and distributions to owners: | ||||||||
| Remeasurement of non-controlling | ||||||||
interest put option | ||||||||
| Changes in ownership interest without | ||||||||
a change in control | ( | ( | ( | ( | ||||
Share-based payments | ||||||||
At 31 December 2022 | ( | ( | ||||||
Loss for the year | ( | ( | ( | |||||
Other comprehensive income | ( | ( | ( | |||||
| Contributions by and distributions | ||||||||
| to owners: | ||||||||
| Remeasurement of non-controlling | ||||||||
interest put option | ||||||||
Share-based payments | ||||||||
Sale of shares by ESOT | ( | ( | ( | |||||
At 31 December 2023 | ( | ( |
Other reserve movements
| Translation | Hedging | Put option | ||
| reserve | reserve | liability | Total | |
| Other reserves | £m | £m | £m | £m |
At 1 January 2022 | ( | ( | ( | ( |
Other comprehensive income | ||||
Remeasurement of non-controlling interest put option | ||||
At 31 December 2022 | ( | ( | ( | |
Other comprehensive loss | ( | ( | ( | |
Remeasurement of non-controlling interest put option | ||||
At 31 December 2023 | ( | ( | ( |
The accompanying Notes form part of these financial statements.
130
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share
capital
£m
Share
premium
£m
Retained
earnings
£m
Hedging
reserves
£m
Treasury
shares
£m
Total
shareholders’
equity
£m
At 1 January 2022 12.6 26.8 254.4 – (0.6) 293.2
Loss for the year – – (11.6) – – (11.6)
Other comprehensive income – – 5.5 3.6 – 9.1
Contributions by and distributions
to owners:
Share-based compensation – – 0.5 – – 0.5
At 31 December 2022 12.6 26.8 248.8 3.6 (0.6) 291.2
Loss for the year – – (106.5) – – (106.5)
Other comprehensive income/(loss) – – 0.7 (1.1) – (0.4)
Contributions by and distributions
to owners:
Share-based compensation – – 1.0 – – 1.0
Sale of shares by ESOT – – (0.2) – 0.1 (0.1)
At 31 December 2023 12.6 26.8 143.8 2.5 (0.5) 185.2
The accompanying Notes form part of these financial statements.
131
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Stock Exchange. The consolidated financial statements comprise the financial statements of the Company, its subsidiary undertakings and its
interest in associates and jointly controlled entities (together the Group), for the year ended 31 December 2023. The Parent Company financial
statements present information about the Company as a separate entity and not about its Group. The Company’s shares are listed on the
London Stock Exchange. The Company and consolidated financial statements were approved for publication by the Directors on 16 April 2024.
modified to include revaluation to fair value of certain financial instruments. As permitted by section 408 of the Companies Act 2006, a separate
income statement and related notes for the holding company have not been presented in these financial statements. The loss after taxation in the
Company was £106.5m (2022: £11.6m loss). The Group and Company financial statements are presented in Sterling and all values are rounded
to the nearest 0.1 million pounds (£0.1m) except when otherwise indicated.
132
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
1. GENERAL INFORMATION CONT.
Board assessment cont.
2. ALTERNATIVE PERFORMANCE MEASURES
The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) performance measures which are not defined within
IFRS. The alternative performance measures (APMs) should be considered in addition to and not as a substitute or superior to the information presented
in accordance with IFRS, as APMs may not be directly comparable with similar measures used by other companies.
133
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
2. ALTERNATIVE PERFORMANCE MEASURES CONT.
The Group believes that APMs, when considered together with IFRS results, provide the readers of the financial statements with complementary
information to better understand and compare the financial performance and position of the Group from period to period. The adjustments are usually
items that are significant in size and/or non-recurring in nature. These measures are also used by management for planning, reporting and performance
management purposes. Some of the measures form part of the covenant ratios calculation required under the terms of the Group’s loan agreements.
As APMs include the benefits of restructuring programmes or use of the acquired intangible assets but exclude certain significant costs, such as
amortisation of intangible assets, litigation, material restructuring and transaction items, they should not be regarded as a complete picture of the
Group’s financial performance, which is presented in its IFRS results. The exclusion of adjusting items may result in underlying profits/(losses) being
materially higher or lower than IFRS earnings.
During the year a review of the measures was undertaken and as a consequence the ROCE measure (2.4 below) and the Underlying EPS measure
(2.6 below) have been updated to reflect earnings from continuing operations, thereby excluding the results of discontinued operations which is non-
recurring and thereby improves comparability between periods and peers.
The following APMs are referred to in the Annual Report and Accounts and described in the following paragraphs.
2.1 Underlying operating profit
Underlying operating profit is defined as operating profit from continuing operations adjusted for acquisition related income and expense (amortisation or
impairment of acquired intangible assets, acquisition expenses, adjustments to contingent consideration), the costs of a material restructuring, litigation,
asset impairment and profit/loss relating to the sale of businesses or any other significant one-off adjustments to income or expenses (adjusting items).
Underlying operating profit is used as a basis for net debt/EBITDA and interest cover covenant calculation, required under the terms of the Group’s loan
agreements. This APM is also used internally to measure the Group’s performance against previous years and budgets, as the adjusting items fluctuate
year-on-year and may be unknown at the time of budgeting.
| Continuing operations | ||||||||
| Amortisation | ||||||||
| of acquired | Impairment | Disposal of | ||||||
| 2023 | As | intangible | charges/ | Re- | Re- | businesses | Underlying | |
| Continuing | reported | assets | (reversals) | financing | structuring | and assets | Other/Tax | results |
| operations | £m | £m | £m | £m | £m | £m | £m | £m |
Revenue | 496.2 | – | – | – | – | – | – | 496.2 |
Cost of sales | (360.3) | – | – | – | – | (1.8) | – | (362.1) |
Gross profit | 135.9 | – | – | – | – | (1.8) | – | 134.1 |
Administrative expenses | (109.6) | 1.1 | – | – | – | 0.1 | 2.8 | (105.6) |
Impairment charges | (28.4) | – | 28.1 | – | – | – | – | (0.3) |
Refinancing costs | (12.2) | – | – | 12.2 | – | – | – | – |
Restructuring costs | (5.7) | – | – | – | 5.7 | – | – | – |
Share of post-tax results of associates | 1.4 | – | – | – | – | – | – | 1.4 |
| Operating | ||||||||
profit/(loss) | (18.6) | 1.1 | 28.1 | 12.2 | 5.7 | (1.7) | 2.8 | 29.6 |
Finance income | 3.2 | – | – | – | – | – | – | 3.2 |
Finance expense | (24.5) | – | – | – | – | – | – | (24.5) |
| (Loss)/profit | ||||||||
before taxation | (39.9) | 1.1 | 28.1 | 12.2 | 5.7 | (1.7) | 2.8 | 8.3 |
Income tax | (11.0) | (0.3) | – | – | – | – | 5.3 | (6.0) |
(Loss)/profit for the year from continuing operations | (50.9) | 0.8 | 28.1 | 12.2 | 5.7 | (1.7) | 8.1 | 2.3 |
| Discontinued operations | ||||||||
(Loss)/profit for the year from discontinued operations, net of tax | (11.4) | – | – | – | – | – | – | (11.4) |
| (Loss)/profit | ||||||||
for the year | (62.3) | 0.8 | 28.1 | 12.2 | 5.7 | (1.7) | 8.1 | ( 9.1) |
Operating margin (%) | (3.7%) | 6.0% | ||||||
| Segmental underlying operating | ||||||||
| profit is calculated as follows: | ||||||||
Energy | 9.5 | 0.6 | 2.1 | – | 3.6 | (0.4) | 0.3 | 15.7 |
Defence | (23.7) | – | 24.7 | – | 0.5 | – | – | 1.5 |
Maritime Transport | 21.7 | 0.5 | 1.3 | – | 1.5 | (1.4) | (0.3) | 23.3 |
Corporate | (26.1) | – | – | 12.2 | 0.1 | 0.1 | 2.8 | (10.9) |
Continuing operations | (18.6) | 1.1 | 28.1 | 12.2 | 5.7 | (1.7) | 2.8 | 29.6 |
134
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.1 Underlying operating profit cont.
During the year, adjusting items were in relation to the following matters:
The amortisation of acquired intangibles (see Note 13).
The impairment charges/(reversals) relate to goodwill, right-of-use vessels, tangible assets and investments (see Notes 12,14,15 and 16).
For impairment of trade and other receivables see Notes 4 and 29.
Refinancing is related to the costs of signing of the new RCF, refinancing strategy, obtaining a waiver from the Group’s lenders and completion of
various requirements and conditions of the RCF.
Restructuring costs relates to the transformation programme aimed at simplification, rationalisation and integration of the Group’s businesses
across all three Divisions and includes £3.0m in relation to the closure of the Subtech Europe business in the Energy Division.
Disposal of businesses and assets primarily relates to a gain of £1.4m on disposal of a vessel in the Maritime Transport Division.
Other primarily relates to £2.2m past service costs recognised for the MNRPF scheme as part of the review of the Fund’s administrative and
benefit practices carried out by the Fund’s lawyers (see Note 23).
£4.7m of the tax charge relates to de-recognition of the brought forward net UK deferred tax asset as at 31 December 2022. Note 9 explains the
assessment undertaken leading to de-recognition of a deferred tax asset which has a significant and non-recurring impact in the current year.
| Continuing operations | ||||||||
| Amortisation | Specific | |||||||
| of acquired | Impairment | trade | Disposal of | |||||
| 2022 | As | intangible | charges/ | receivables | Re- | businesses | Other/ | Underlying |
| Continuing | reported | assets | (reversals) | provision | structuring | and assets | Tax | results |
| operations | £m | £m | £m | £m | £m | £m | £m | £m |
Revenue | 478.1 | – | – | – | – | – | – | 478.1 |
Cost of sales | (350.9) | – | (4.5) | – | – | (0.9) | – | (356.3) |
Gross profit | 127. 2 | – | (4.5) | – | – | (0.9) | – | 121.8 |
Administrative expenses | (97.5) | 2.1 | – | – | – | (2.5) | 1.7 | (96.2) |
Impairment charges | (4.9) | – | 5.2 | (1.1) | – | – | – | (0.8) |
Restructuring costs | (1.7) | – | – | – | 1.7 | – | – | – |
Share of post-tax results of associates | 1.6 | – | – | – | – | – | – | 1.6 |
| Operating | ||||||||
profit/(loss) | 24.7 | 2.1 | 0.7 | (1.1) | 1.7 | (3.4) | 1.7 | 26.4 |
Finance income | 0.7 | – | – | – | – | – | – | 0.7 |
Finance expense | (10.9) | – | – | – | – | – | – | (10.9) |
| Profit/(loss) | ||||||||
before taxation | 14.5 | 2.1 | 0.7 | (1.1) | 1.7 | (3.4) | 1.7 | 16.2 |
Income tax | (5.5) | – | – | – | – | – | 0.8 | (4.7) |
Profit/(loss) for the year from continuing operations | 9.0 | 2.1 | 0.7 | (1.1) | 1.7 | (3.4) | 2.5 | 11.5 |
| Discontinued operations | ||||||||
| (Loss)/profit for the year from discontinued | ||||||||
operations, net of tax | (19.8) | – | – | – | – | – | – | (19.8) |
| (Loss)/profit | ||||||||
for the year | (10.8) | 2.1 | 0.7 | (1.1) | 1.7 | (3.4) | 2.5 | (8.3) |
Operating margin (%) | 5.2% | 5.5% | ||||||
Segmental underlying operating profit is calculated as follows: | ||||||||
Energy | 16.4 | 1.6 | (0.8) | (1.1) | – | (2.5) | 0.2 | 13.8 |
Defence | (3.5) | 0.1 | 1.8 | – | 1.3 | – | – | (0.3) |
Maritime Transport | 19.2 | 0.4 | (0.3) | – | 0.4 | (0.9) | – | 18.8 |
Corporate | (7.4) | – | – | – | – | – | 1.5 | (5.9) |
Continuing operations | 24.7 | 2.1 | 0.7 | (1.1) | 1.7 | (3.4) | 1.7 | 26.4 |
135
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.1 Underlying operating profit cont.
During 2022, adjusting items were in relation to the following matters:
Amortisation of acquired intangibles (see Note 13).
The impairment charges/(reversals) relate to goodwill, intangible and tangible assets, and assets held for sale (see Notes 12, 13, 14 and 20).
For impairment of trade and other receivables see Notes 4 and 29.
Specific trade receivables provision relates to a recovery of amounts provided for in 2021 in relation to specific counterparty risk and receivables
billed over 12 months ago in relation to certain projects.
Restructuring costs relates to restructuring programmes completed during the year by the Fendercare and JFD businesses.
Disposal of businesses and assets relates to the disposal during 2022 of James Fisher Mimic Ltd, Prolec Ltd and Strainstall UK Ltd (see Note 26)
for £18.5m proceeds with £4.3m gains less £1.8m costs of disposal. In addition, the Group has recognised a gain of £0.9m on disposal of one of
its vessels in the Maritime Transport Division.
Other includes £1.5m past service cost recognised for the MNRPF scheme in respect of ill health early retirement benefits (see Note 23).
2.2 Covenant EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation)
Covenant EBITDA is calculated in line with the Group’s banking covenants. It is defined as the underlying operating profit before interest, tax,
depreciation and amortisation, adjusted for impacts of IFRS 16. The covenants require that EBITDA is calculated excluding the effects of IFRS 16.
The IFRS 16 adjustment is calculated as a difference between ROU depreciation and operating lease payments.
| 2023 | 2022 | |
| £m* | £m* | |
Underlying operating profit | 29.6 | 26.4 |
Depreciation and amortisation | 41.2 | 40.3 |
Less: Depreciation on right-of-use assets | (16.3) | (12.2) |
Amortisation of acquired intangibles | (1.1) | (2.1) |
IFRS 16 impact removed | 1.0 | 0.2 |
Covenant EBITDA | 54.4 | 52.6 |
* Excludes discontinued operations.
2.3 Leverage
Leverage is calculated in line with the Group’s banking covenants. It is defined as Covenant EBITDA divided by underlying net borrowings.
Underlying net borrowings is net borrowings as set out in Note 28, including guarantees, and excluding right-of-use operating leases, which are
the leases which would be considered operating leases under IAS 17, prior to the introduction of IFRS 16. Guarantees are those issued by a
bank or financial institution to compensate a stakeholder in the event of a Group company not fulfilling its obligations in the ordinary course of
business in relation to either advance payments or trade debtors.
| 2023 | 2022 | |
| £m | £m | |
Net borrowings (Note 28) | 201.1 | 185.8 |
Less: right-of-use operating leases* | (56.9) | (46.0) |
Guarantees and collateral deposits | 5.6 | 2.3 |
Underlying net borrowings | 149.8 | 142.1 |
Covenant EBITDA | 54.4 | 52.6 |
Net debt:EBITDA | 2.75 | 2.70 |
* In accordance with IFRS 16 Leases, the Group has recognised a lease liability of £61.2m at 31 December 2023. Under the calculation of “net debt – covenant basis”, only those leases which
would be classified as finance leases under IAS 17 Leases, the standard superseded by IFRS 16, are considered to be debt. Of the £61.2m lease liability recognised under IFRS 16, only
£4.3m would be classified as finance leases under IAS 17 and accordingly £56.9m is adjustment in the net debt calculation.
136
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.4 Underlying Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use assets, less cash and cash equivalents and after adding back borrowings. Average
capital employed is adjusted for the timing of businesses acquired and after adding back cumulative amortisation of customer relationships.
Segmental ROCE is defined as the underlying operating profit from continuing activities, divided by average capital employed. Group ROCE is
defined as underlying operating profit, less notional tax, calculated by multiplying the underlying effective tax rate by the underlying operating
profit, divided by average capital employed, as calculated below. Group ROCE is a KPI that is used internally and externally and forms part of
performance conditions under the Group’s LTIP scheme.
| 2023 | 2022 | |
| £m | £m | |
Net assets | 148.6 | 218.3 |
Less right-of-use assets | (67.4) | (52.3) |
Plus net borrowings | 201.1 | 185.8 |
Capital employed | 282.3 | 351.8 |
Add: amortisation of customer relationships | 1.0 | 1.6 |
283.3 | 353.4 | |
Underlying operating profit | 29.6 | 26.4 |
Notional tax at the underlying effective tax rate | (8.6) | (7.5) |
21.0 | 18.9 | |
Average capital employed | 318.4 | 355.1 |
Return on average capital employed | 6.6% | 5.3% |
The three divisional ROCEs are detailed below:
| Maritime | |||
| Energy | Defence | Transport | |
| Year ended 31 December 2023 | £m | £m | £m |
Net assets | 156.6 | 51.6 | 83.8 |
Less right-of-use assets | (14.3) | (3.8) | (48.7) |
Plus net borrowings | 16.4 | 3.9 | 39.7 |
Capital employed | 158.7 | 51.7 | 74.8 |
Add: amortisation of customer relationships | 0.5 | – | 0.4 |
159.2 | 51.7 | 75.2 | |
Underlying operating profit | 15.7 | 1.5 | 23.3 |
Average capital employed | 168.4 | 68.5 | 77.1 |
Return on average capital employed | 9.3% | 2.1% | 30.3% |
| Maritime | |||
| Energy | Defence | Transport | |
| Year ended 31 December 2022 | £m | £m | £m |
Net assets | 172.3 | 84.9 | 82.8 |
Less right-of-use assets | (9.2) | (3.0) | (39.0) |
Plus net borrowings | 13.4 | 3.3 | 34.8 |
Capital employed | 176.5 | 85.2 | 78.6 |
Add: amortisation of customer relationships | 1.1 | 0.1 | 0.4 |
177.6 | 85.3 | 79.0 | |
Underlying operating profit | 13.9 | (0.4) | 18.8 |
Average capital employed | 173.6 | 84.7 | 83.2 |
Return on average capital employed | 8.0% | (0.4%) | 22.5% |
137
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.5 Interest cover
Interest cover is calculated in line with the Group’s banking covenants. It is defined as a ratio of underlying net operating profit, adjusted for
IFRS 16 impact, to covenant interest.
| 2023 | 2022 | |
| £m | £m | |
Interest payable on bank loans less interest receivable on short-term deposits | 17.6 | 8.1 |
Finance lease interest | 0.1 | 0.1 |
Loan arrangement and other financing fees | (4.4) | (1.0) |
Covenant interest | 13.3 | 7.2 |
Underlying net operating profit | 29.6 | 26.4 |
IFRS 16 impact removed | 0.3 | (0.7) |
29.9 | 25.7 | |
Interest cover | 2.2 | 3.5 |
2.6 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total of underlying profit before tax from continuing activities, less income tax, but
excluding the tax impact on adjusting items and adjusting for deferred tax on finance charges, less profit attributable to non-controlling interests,
divided by the weighted average number of ordinary shares in issue during the year. Underlying earnings per share is a performance condition
used for the LTIP schemes.
| 2023 | 2022 | ||
| £m | £m | ||
Loss attributable to owners of the Company | (51.0) | 8.7 | |
Adjusting items | 48.2 | 1.7 | |
Tax on adjusting items | 5.0 | 0.8 | |
Deferred tax on finance charges | 3.6 | – | |
Underlying loss attributable to owners of the Company | 5.8 | 11. 2 | |
Basic weighted average number of shares (Note 10) | 50,358,388 | 50,345,989 | |
Diluted weighted average number of shares (Note 10) | 50,634,837 | 50, 3 | 67,147 |
Underlying basic earnings per share | 11.4 | 22.3 | |
Underlying diluted earnings per share | 11.4 | 22.3 |
3. SEGMENTAL INFORMATION
From 1 January 2023, the Group has been re-organised into three operating segments reviewed by the Board: Energy, Defence, and Maritime
Transport. The Energy Division combines the old Marine Support and Offshore Oil Divisions, minus Fendercare, which is added to the Tankships
Division to create Maritime Transport. Specialist Technical (JFD business) is the only component of the Defence Division. The comparative
segmental information for 2022 has been restated accordingly. The Divisions’ principal activities are set out in the Strategic report on pages 20
to 31. Energy and Defence are differentiated by markets and industries which they serve. The Maritime Transport Division is differentiated by the
services which they provide. The Board assesses the performance of the segments based on underlying operating profit, underlying operating
margin and return on capital employed. It considers that this information is the most relevant in evaluating the performance of its segments
relative to other entities which operate in similar markets. Inter-segmental sales are made using prices determined on an arm’s length basis.
Sector assets exclude cash, short-term deposits and corporate assets that cannot reasonably be allocated to operating segments. Sector
liabilities exclude borrowings, retirement benefit obligations and corporate liabilities that cannot reasonably be allocated to operating segments.
The Group’s principal products and services by Division are disclosed in the table below, together with information regarding performance
obligations and revenue recognition. Revenue is recognised by the Group as contractual performance obligations to customers are completed.
138
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
3. SEGMENTAL INFORMATION CONT.
| Performance | ||||
Division | Principal products and services | obligations | Revenue recognition | |
Energy | Products – Artificial lift special completion | Point in time | • | On despatch or delivery, depending on contract |
| technology and software | terms | |||
| Over time | • | Customer acceptance of goods | ||
• | Based on right-of-use/right-of-access | |||
• | Based on costs incurred or straight-line over | |||
| licence term | ||||
| Services – Blade repairs, high voltage cable | Over time | • | Acceptance from customer | |
| laying, well testing, hire of air compressors, steam | • | Customer approved timesheets | ||
| generators, heat suppression equipment (including | • | Time based monthly billing | ||
| personnel) | • | Stage of completion, input/output measure | ||
| based on costs incurred as a proportion of total | ||||
| costs/achievement of KPIs or milestones | ||||
| Specialist subsea services, site preparation | Point in time | • | Acceptance from customer | |
| asset management, offshore wind control room | ||||
| services, inspection, repair, and maintenance | ||||
| services | ||||
| Engineering and design solutions, production, | ||||
| installation, and commissioning services, | ||||
| nanobubble oxygenation service, full project | ||||
| support for offshore and subsea operations, | ||||
| decommissioning services | ||||
Defence | Products – General diving equipment, spares, | Point in time | • | On despatch or delivery, depending on |
| breathing machines, and subsea equipment for | contract terms | |||
| commercial and defence applications | ||||
| Services – Submarine rescue services (Ad | Point in time | • | Acceptance from customer | |
| hoc Tasks), Military diving equipment servicing | • | Completion of test | ||
| (Taskings) | ||||
| Submarine Rescue Services, Military diving | Over time | • | Output basis/achievement of key performance | |
| equipment servicing (Core – In Service Support) | indicators (KPIs) | |||
| Submarine Rescue Services (Training Exercises/ | Over time | • | Stage of completion, input measure based | |
| Mid-Life Refits) | on costs incurred as a proportion of total | |||
| expected costs | ||||
| Construction contracts – Dive support vessels, | Over time | • | Stage of completion output measure based | |
| submarine platform equipment, components and | on specific milestones in process | |||
| assemblies, tactical diving vehicles and carrier | ||||
| seals (subsea/surface craft) and recompression | ||||
| chambers | ||||
| Maritime | Products – Fenders, safety, and monitoring | Point in time | • | On despatch or delivery, depending on |
| Transport | equipment | contract terms | ||
| Services – Transport, storage of chemicals and | Over time | • | Stage of completion output measure based | |
| petroleum, ship-to-ship transfer and port services | on specific milestones in process | |||
• | Vessel tendering notice of readiness to enter | |||
| the port | ||||
139
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
3. SEGMENTAL INFORMATION CONT.
| Maritime | Continuing | Discontinued | ||||
| Energy | Defence | Transport | total | total | Total | |
| Year ended 31 December 2023 | £m | £m | £m | £m | £m | £m |
Revenue recognised at a point in time | 195.4 | 52.4 | 35.3 | 28 3.1 | 1.1 | 284.3 |
Revenue recognised over time | 71.1 | 20.1 | 121.9 | 213.1 | 5.6 | 218.6 |
Revenue | 266.5 | 72.5 | 157. 2 | 496.2 | 6.7 | 502.9 |
| Maritime | Continuing | Discontinued | ||||
| Energy | Defence | Transport | total | total | Total | |
| Year ended 31 December 2022 | £m | £m | £m | £m | £m | £m |
Revenue recognised at a point in time | 168.4 | 52.1 | 33.4 | 253.9 | 4.1 | 258.0 |
Revenue recognised over time | 74.2 | 16.1 | 133.9 | 224.2 | 38.7 | 262.9 |
Revenue | 242.6 | 68.2 | 167. 3 | 478.1 | 42.8 | 520.9 |
| Construction | Continuing | Discontinued | ||||
| Products | Services | contracts | total | total | Total | |
| Year ended 31 December 2023 | £m | £m | £m | £m | £m | £m |
Energy | 53.5 | 201.9 | 11.1 | 266.5 | 6.7 | 273.2 |
Defence | 20.9 | 47.7 | 3.9 | 72.5 | – | 72.5 |
Maritime Transport | 35.3 | 121.9 | – | 157. 2 | – | 157. 2 |
Revenue | 109.7 | 371.5 | 15.0 | 496.2 | 6.7 | 502.9 |
| Construction | Continuing | Discontinued | ||||
| Products | Services | contracts | total | total | Total | |
| Year ended 31 December 2022 | £m | £m | £m | £m | £m | £m |
Energy | 51.0 | 180.2 | 11.4 | 242.6 | 42.8 | 285.4 |
Defence | 17. 2 | 47. 8 | 3.2 | 68.2 | – | 68.2 |
Maritime Transport | 33.4 | 133.9 | – | 167. 3 | – | 167.3 |
Revenue | 101.6 | 361.9 | 14.6 | 478.1 | 42.8 | 520.9 |
Included in services revenue, is revenue from operating lease rental income of £7.9m (2022: £10.3m) which is accounted for under IFRS 16:
Leases. Property, plant and equipment which is used to generate operating lease rental income is detailed in Note 14. The nature of the leasing
activities in the period are various short-term equipment leases in Energy and Maritime Transport Divisions.
Within the Energy Division, there are specific maintenance contracts which include variable consideration related to performance-based
achievements over a number of years. Reflecting on the contract terms, the susceptibility of factors outside of the entity’s control that would
impact the consideration and the limited experience history management has on these specific maintenance contracts, management have
concluded that the variable consideration should be constrained. On this basis £nil of the £5.0.m variable consideration within these contracts
has been recognised in the period, otherwise there is a risk of subsequent reversal when the uncertainty is subsequently resolved.
140
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
3. SEGMENTAL INFORMATION CONT.
| Maritime | Continuing | Discontinued | |||||
| Energy | Defence | Transport | Corporate | total | total | Total | |
| Year ended 31 December 2023 | £m | £m | £m | £m | £m | £m | £m |
Segmental revenue | 266.5 | 72.6 | 157. 2 | – | 496.3 | 6.8 | 503.1 |
Inter-segmental sales | – | (0.1) | – | – | ( 0.1) | (0.1) | (0.2) |
Revenue | 266.5 | 72.5 | 157. 2 | – | 496.2 | 6.7 | 502.9 |
Underlying operating profit/(loss) | 15.7 | 1.5 | 23.3 | (10.9) | 29.6 | (11.4) | 18.2 |
APMs (see Note 2) | (6.2) | (25.2) | (1.6) | (15.2) | (48.2) | – | (48.2) |
Operating profit/(loss) | 9.5 | (23.7) | 21.7 | (26.1) | (18.6) | (11.4) | (30.0) |
Finance income | 3.2 | – | 3.2 | ||||
Finance expense | (24.5) | – | (24.5) | ||||
Loss before tax | (39.9) | (11.4) | (51.3) | ||||
Income tax | (11.0) | – | (11.0) | ||||
Loss for the year | (50.9) | (11.4) | (62.3) | ||||
| Assets and liabilities | |||||||
Segmental assets | 226.8 | 80.0 | 154.5 | 88.5 | 549.8 | – | 549.8 |
Investment in joint ventures | 2.6 | 3.3 | 2.5 | – | 8.4 | – | 8.4 |
Total assets | 229.4 | 83.3 | 157.0 | 88.5 | 558.2 | – | 558.2 |
Segmental liabilities | (72.8) | (31.7) | (73.2) | (231.9) | (409.6) | – | (409.6) |
156.6 | 51.6 | 83.8 | (143.4) | 148.6 | – | 148.6 | |
| Other segmental information | |||||||
Capital expenditure* | 28.7 | 6.3 | 27. 9 | 0.1 | 63.0 | – | 63.0 |
Depreciation and amortisation | 17. 4 | 4.2 | 19.3 | 0.4 | 41.3 | – | 41.3 |
* Capital expenditure relates to additions within other intangible assets, property, plant and equipment and right-of-use assets, of which details can be found in Notes 13,14 and 15.
At 31 December 2023, there is £3.6m (2022: £6.1m) consideration allocated to performance obligations that were unsatisfied and expected to
be recognised as revenue within 12 months.
Revenue from discontinued activities disclosed in the income statement is comprised of products £0.6m (2022: £4.1m) services of £3.7m
(2022: £23.6m) and construction contract income of £2.3m (2022: £15.0m).
For details of the amount of impairment losses and reversals of impairment losses recognised in profit or loss during the period, see Note 2.1.
141
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
3. SEGMENTAL INFORMATION CONT.
The following table shows the maturity profile of operating lease receivables using the undiscounted payments:
| Within 1 | 1 – 2 | 2 – 3 | 3 – 4 | 4 – 5 | >5 | |
| year | years | years | years | years | years | |
| £m | £m | £m | £m | £m | £m | |
Operating lease receivables | 8.1 | 0.9 | 0.9 | – | – | – |
| Maritime | Continuing | Discontinued | |||||
| Energy | Defence | Transport | Corporate | total | total | Total | |
| Year ended 31 December 2022 | £m | £m | £m | £m | £m | £m | £m |
Segmental revenue | 242.8 | 68.3 | 167. 3 | – | 478.4 | 43.9 | 522.3 |
Inter-segmental sales | (0.2) | (0.1) | – | – | (0.3) | (1.1) | (1.4) |
Revenue | 242.6 | 68.2 | 167.3 | – | 478.1 | 42.8 | 520.9 |
Underlying operating profit/(loss) | 13.9 | (0.4) | 18.8 | (5.9) | 26.4 | ( 7.3) | 19.1 |
APMs (see Note 2) | 2.5 | (3.1) | 0.4 | (1.5) | (1.7) | (13.3) | (15.0) |
Operating profit/(loss) | 16.4 | (3.5) | 19.2 | ( 7.4) | 24.7 | (20.6) | 4.1 |
Finance income | 0.7 | – | 0.7 | ||||
Finance expense | (10.9) | – | (10.9) | ||||
Profit/(loss) before tax | 14.5 | (20.6) | (6.1) | ||||
Income tax | (5.5) | 0.8 | (4.7) | ||||
Profit/(loss) for the year | 9.0 | (19.8) | (10.8) | ||||
| Assets and liabilities | |||||||
Segmental assets | 250.8 | 114.5 | 155.1 | 63.6 | 584.0 | 16.3 | 600.3 |
Investment in joint ventures | 3.0 | 3.4 | 2.3 | – | 8.7 | – | 8.7 |
Total assets | 253.8 | 117.9 | 157.4 | 63.6 | 592.7 | 16.3 | 609.0 |
Segmental liabilities | (81.5) | (33.0) | ( 74.6) | (185.3) | (374.4) | (16.3) | (390.7) |
172.3 | 84.9 | 82.8 | (121.7) | 218.3 | – | 218.3 | |
| Other segmental information | |||||||
Capital expenditure* | 16.7 | 5.4 | 31.2 | 0.2 | 53.5 | 0.4 | 53.9 |
Depreciation and amortisation | 19.5 | 5.3 | 15.1 | 0.4 | 40.3 | 0.8 | 41.1 |
* Capital expenditure relates to additions within other intangible assets, property, plant and equipment and right-of-use assets, of which details can be found in Notes 13,14 and 15.
142
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
3. SEGMENTAL INFORMATION CONT.
| Middle East, | ||||||||||
United Kingdom | Rest of Europe | Africa & Americas | Asia Pacific | Tot al | ||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
| Continuing | ||||||||||
| Revenue | ||||||||||
Segmental revenue | 157.6 | 16 5.1 | 66.1 | 65.3 | 180.1 | 155.5 | 92.5 | 92.5 | 496.3 | 478.4 |
Inter-segmental sales | (0.1) | (0.3) | – | – | – | – | – | – | (0.1) | (0.3) |
Group revenue | 15 7. 5 | 164.8 | 66.1 | 65.3 | 18 0.1 | 155.5 | 92.5 | 92.5 | 496.2 | 478.1 |
| Discontinued | ||||||||||
| Revenue | ||||||||||
Segmental revenue | 6.8 | 43.6 | – | – | – | – | – | 0.3 | 6.8 | 43.9 |
Inter-segmental sales | (0.1) | (1.1) | – | – | – | – | – | – | (0.1) | (1.1) |
Group revenue | 6.7 | 42.5 | – | – | – | – | – | 0.3 | 6.7 | 42.8 |
| Continuing | ||||||||||
Segmental non-current assets | 203.2 | 209.9 | 38.7 | 40.9 | 26.3 | 26.8 | 18.7 | 34.9 | 286.9 | 312.5 |
Segmental current assets | 191.5 | 17 7. 0 | 8.8 | 7.1 | 37.0 | 53.2 | 25.6 | 34.2 | 262.9 | 271.5 |
Segmental assets | 394.7 | 386.9 | 47.5 | 48.0 | 63.3 | 80.0 | 44.3 | 69.1 | 549.8 | 584.0 |
Investment in joint ventures | 1.0 | 0.3 | 2.5 | 3.1 | 1.2 | 0.2 | 3.7 | 5.1 | 8.4 | 8.7 |
Segmental liabilities | (350.9) | (314.1) | (14.3) | (8.0) | (31.5) | (36.1) | (12.9) | (16.2) | (409.6) | (374.4) |
44.8 | 73.1 | 35.7 | 43.1 | 33.0 | 44.1 | 35.1 | 58.0 | 148.6 | 218.3 | |
| Discontinued | ||||||||||
Segmental non-current assets | – | – | – | – | – | – | – | – | – | – |
Segmental current assets | – | 16.3 | – | – | – | – | – | – | – | 16.3 |
Segmental assets | – | 16.3 | – | – | – | – | – | – | – | 16.3 |
Investment in joint ventures | – | – | – | – | – | – | – | – | – | – |
Segmental liabilities | – | (16.3) | – | – | – | – | – | – | – | (16.3) |
– | – | – | – | – | – | – | – | – | – | |
Major customer
No single customer generates revenue greater than 10% of the consolidated revenue.
143
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
| 2023 | 2022 | |
| £m | £m | |
Amortisation of intangible assets (Note 13) | 2.9 | 5.2 |
Depreciation of property, plant and equipment (Note 14) | 22.0 | 23.3 |
Depreciation of ROU assets (Note 15) | 16.3 | 12.6 |
| Impairment charges/(reversals): | ||
Goodwill and intangible assets (Notes 12 and 13) | 29.0 | 4.6 |
Tangible fixed assets, including ROU assets (Notes 14 and 15) | (1.4) | 1.1 |
Investment in joint ventures (Note 16) | (0.3) | 0.5 |
Assets held for sale (Note 20) | 0.8 | – |
Vessel held for sale (Note 20) | – | (5.4) |
Trade and other receivables (Note 19) | 0.3 | (0.3) |
Staff costs (Note 6) | 125.3 | 145.8 |
Loss on disposal of businesses, net of disposal costs (Note 26) | (2.1) | (2.5) |
| 2023 | 2022 | |
| £m | £m | |
Audit of the financial statements of the Parent Company | 1.2 | 0.6 |
Audit-related assurance services (half year review) | 0.2 | 0.1 |
Local statutory audits of subsidiaries | 2.5 | 3.8 |
Total fees payable to Group auditor | 3.9 | 4.5 |
5. DISCONTINUED OPERATIONS
In December 2022, management agreed a plan to sell the nuclear business as a result of a strategic decision to rationalise and focus the portfolio
of businesses within the Group. At 31 December 2022, the business had been classified as held for sale and is part of a single co-ordinated plan
to dispose of a separate major line of business. It had been classified as a discontinued operation.
On 6 March 2023, the Group announced that the entire share capital of James Fisher Nuclear Holdings Limited and related properties was sold
to Myneration Limited, a wholly-owned investment vehicle of Rcapital Partners LLP for a consideration of £3. The Group has retained certain
Parent Company guarantees which historically were given to support the obligations of JFN (see Note 31).
| 2023 | 2022 | |
| Results of discontinued operations | £m | £m |
Revenue | 6.8 | 43.9 |
Inter-segmental sales | (0.1) | (1.1) |
6.7 | 42.8 | |
Expenses | (17.1) | (50.1) |
Loss before taxation | (10.4) | ( 7.3) |
Income tax | (1.0) | 0.8 |
Loss from operating activities after tax | (11.4) | (6.5) |
Loss on remeasurement to fair value less costs to sell | – | (13.3) |
Loss for the year from discontinued operations | (11.4) | (19.8) |
| Attributable to: | ||
Owners of the Company | (11.4) | (19.8) |
Non-controlling interests | – | – |
(11.4) | (19.8) |
144
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
5. DISCONTINUED OPERATIONS CONT.
| 2023 | 2022 | |
| Cash flows used in discontinued operations | £m | £m |
Net cash from operating activities | (0.4) | (3.1) |
Net cash from investing activities | – | (5.0) |
Net cash from financing activities | – | – |
Net cash flows for the year | (0.4) | (8.1) |
At 31 December 2022, the disposal group was stated at fair value less costs to sell and comprised the following assets and liabilities:
| 2022 | |
| £m | |
Property, plant and equipment | 2.3 |
Inventories | 0.7 |
Trade and other receivables | 10.5 |
Cash and cash equivalents | 2.8 |
Assets held for sale | 16.3 |
Trade and other payables | (13.8) |
Lease liabilities | (2.2) |
Taxation | (0.3) |
Liabilities associated with assets held for sale | (16.3) |
On transfer of assets to held for sale a £13.3m loss was recognised in 2022 on remeasurement to fair value less cost to sell, consisting of
impairments of goodwill (£8.1m), property, plant and equipment (£3.9m) and anticipated costs of disposal (£1.3m).
The non-recurring fair value measurement for the disposal group before £1.3m costs to sell had been categorised as a Level 3 fair value based
on the present value of cash flows.
145
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
| 2023 | 2022 | |
| £m | £m | |
Wages and salaries | 107.4 | 127. 3 |
Social security costs | 11.9 | 12.8 |
Pension costs | 5.0 | 5.2 |
Share-based compensation | 1.0 | 0.5 |
125.3 | 145.8 |
| 2023 | 2022 | |
| Number | Number | |
Production and Engineering | 1,189 | 1,608 |
Sales | 153 | 213 |
Administration | 763 | 789 |
Seafarers | 24 | 37 |
2,129 | 2,647 |
| 2023 | 2022 | |
| £m | £m | |
Short-term employee benefits | 2.8 | 2.9 |
Share-based payments | 0.5 | 0.3 |
3.3 | 3.2 |
| 2023 | 2022 | |
| £m | £m | |
| Finance income: | ||
Interest receivable on short-term deposits | 2.9 | 0.7 |
Net interest on pension obligations | 0.3 | – |
Total income | 3.2 | 0.7 |
| Finance expense: | ||
Interest payable on bank loans and overdrafts | (15.8) | ( 7. 4) |
Loan arrangement and other financing fees | (4.4) | (1.0) |
Unwind of discount on right-of-use lease liability | (4.0) | (2.1) |
Other | (0.3) | (0.4) |
Total expense | (24.5) | (10.9) |
Net finance expense – continuing operations | (21.3) | (10.2) |
146
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
8. TAXATION
(a) The tax charge is based on profit for the year and comprises:
| 2023 | 2022 | |
| £m | £m | |
| Current tax: | ||
UK corporation tax | (0.1) | (1.2) |
Overseas tax | (9.0) | (6.3) |
| Adjustment in respect of prior years: | ||
UK corporation tax | – | 0.5 |
Overseas tax | 0.1 | 0.2 |
Total current tax | (9.0) | (6.8) |
| Deferred tax: | ||
| Origination and reversal of temporary differences: | ||
| Current year | ||
UK corporation tax – current year | 1.9 | 0.7 |
UK write off of brought forward deferred tax asset | (4.7) | – |
Overseas tax | 1.0 | (0.3) |
| Prior year | ||
UK corporation tax | (0.3) | 0.9 |
Overseas tax | 0.1 | – |
Tax expense on continuing operations | (11.0) | (5.5) |
The tax expense excludes a tax charge from discontinued operations of £1.0m (2022: credit £0.8m).
The total tax charge in the income statement includes a further £0.2m (2022: £0.1m) which is stated within the share of post-tax results of
joint ventures.
(b) Tax included within other comprehensive income:
| 2023 | 2022 | |
| £m | £m | |
| Current tax: | ||
Foreign exchange losses on internal loans | (0.1) | (0.4) |
Contributions to defined benefit pension schemes | 0.2 | 0.4 |
| Deferred tax: | ||
Actuarial gain on defined benefit pension schemes | (0.5) | (1.7) |
Relating to derivatives | (0.2) | (0.7) |
(0.6) | (2.4) |
147
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
8. TAXATION CONT.
(c) Reconciliation of effective tax rate
The Group falls under the UK tonnage tax regime on its tanker owning and operating activities and a charge is based on the net tonnage of
vessels operated. Profits for these activities are not subject to corporation tax. The tax on the Group’s profit before tax differs from the theoretical
amount that would arise using the rate applicable under UK corporation tax rules as follows:
| 2023 | 2022 | |
| £m | £m | |
(Loss)/profit before tax | (39.9) | 14.5 |
Tax arising from interests in joint ventures | 0.2 | 0.1 |
(39.7) | 14.6 | |
Tax on (loss)/profit at UK statutory tax rate of 23.5% (2022: 19%) | (9.3) | 2.8 |
Tonnage tax expense on vessel activities | (1.5) | (0.8) |
Expenses not deductible for tax purposes | 7.7 | 1.6 |
| (Over)/under provision in prior years: | ||
Current tax | (0.1) | (0.7) |
Deferred tax | 0.2 | (0.9) |
Higher tax rates on overseas income | 1.7 | 2.8 |
Non-taxable income | – | (0.8) |
Impact of change of rate | (1.0) | 0.1 |
Write off of brought forward deferred tax asset | 4.7 | – |
Movement on unrecognised deferred tax | 8.8 | 1.5 |
11.2 | 5.6 |
Expenses not deductible for tax purposes relate mainly to non-recurring items such as goodwill impairments, costs associated with business
disposals, and losses made on business disposals.
Movement on unrecognised deferred tax is explained in further detail in Note 9.
The effective rate on the (loss)/profit before income tax from continuing operations is -27.6% (2022: 37.9%). The effective income tax rate on the
underlying profit before tax is 29.0% (2022: 28.4%), which has been adjusted for £3.6m deferred tax on finance charges. Underlying profit before
tax is included in Note 2. Overprovision in previous years arose due to the timing in which certain transactions have been accounted for, rather
than any correction.
Group | Company | |||
| 2022 | ||||
| 2023 | restated* | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Assets | ||||
Property, plant and equipment | 4.9 | 4.9 | 0.1 | – |
Losses carried forward | 2.3 | 6.4 | – | – |
Temporary differences | 1.4 | 1.1 | 1.4 | 0.6 |
8.6 | 12.4 | 1.5 | 0.6 | |
| Liabilities | ||||
Retirement benefits | (0.7) | (0.7) | (0.7) | (0.8) |
Property, plant and equipment | (3.1) | (1.6) | – | – |
Intangible assets | (0.1) | (1.4) | – | – |
Derivative financial instruments | (0.7) | (0.6) | (0.7) | (0.6) |
(4.6) | (4.3) | (1.4) | (1.4) |
148
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
9. DEFERRED TAX CONT.
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Balance at 1 January | 8.1 | 9.2 | (0.8) | 1.0 |
Charged to comprehensive income | (0.7) | (2.4) | (0.6) | (2.3) |
Charged to equity | – | – | – | – |
Credited/(charged) to income statement | (3.0) | 1.3 | 1.5 | 0.5 |
Exchange adjustments | (0.4) | – | – | – |
Balance at 31 December | 4.0 | 8.1 | 0.1 | (0.8) |
| Group | ||
| 2023 | 2022 | |
| £m | £m | |
Deferred tax assets | 2.8 | (3.0) |
| Deferred tax liabilities: | ||
Property, plant and equipment | 1.5 | 0.7 |
Intangible assets | (1.3) | 1.0 |
Deferred income tax (credit)/charge | 3.0 | (1.3) |
10. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in
issue during the year, after excluding 12,519 (2022: 47,855) ordinary shares held by the James Fisher and Sons plc Employee Share Ownership
Trust (ESOT), as treasury shares. Diluted earnings per share are calculated by dividing the net profit attributable to shareholders by the weighted
average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
At 31 December 2023, 2,649,876 options (2022: 1,759,740) were excluded from the diluted weighted average number of ordinary shares
calculation as their effect would be anti-dilutive. The average market value of the Company’s shares for purposes of calculating the dilutive effect
of share options was based on quoted market prices for the period during which the options were outstanding.
The calculation of the basic and diluted earnings per share is based on the following data:
| 2023 | 2022 | |
| £m | £m | |
Loss after tax attributable to shareholders | (62.4) | (11.1) |
149
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
10. EARNINGS PER SHARE CONT.
Weighted average number of shares
| 2023 | 2022 | ||
| Number | Number | ||
| of shares | of shares | ||
Basic weighted average number of shares | 50,358,388 | 50,345,989 | |
Potential exercise of share-based payment schemes | – | 21,158 | |
Diluted weighted average number of shares | 50,358,388 | 5 0 , 3 | 67,147 |
Earnings per share | pence | pence | |
Basic earnings per share | (123.9) | (22.1) | |
Diluted earnings per share | (123.9) | (22.1) | |
Earnings per share – continuing operations | pence | pence | |
Basic earnings per share | (101.2) | 17.4 | |
Diluted earnings per share | (101.2) | 17. 4 | |
Earnings per share – discontinued operations | pence | pence | |
Basic earnings per share | (22.7) | (39.5) | |
Diluted earnings per share | (22.7) | (39.5) |
11. DIVIDENDS PAID AND PROPOSED
There were no dividends paid or proposed in either 2023 or 2022.
| Multiple | |||||
| units without | |||||
| significant | |||||
| JFD | Scantech | Fendercare | goodwill | Total | |
| Reconciliation of carrying amount | £m | £m | £m | £m | £m |
At 1 January 2022 | 32.3 | 22.9 | 16.7 | 61.6 | 133.5 |
Impairment | – | – | – | (4.4) | (4.4) |
Disposals | – | – | – | (7.1) | (7.1) |
Discontinued operations | – | – | – | (8.1) | (8.1) |
Reallocation between CGUs | 0.9 | – | – | (0.9) | – |
Exchange differences | 0.9 | 0.2 | 0.3 | 1.0 | 2.4 |
At 31 December 2022 | 34.1 | 23.1 | 17.0 | 42.1 | 116.3 |
Impairment | (25.0) | – | – | (3.0) | (28.0) |
Reclassification to assets held for sale | – | – | – | (7.6) | (7.6) |
Exchange differences | (0.5) | (1.8) | (0.2) | 0.1 | (2.4) |
At 31 December 2023 | 8.6 | 21.3 | 16.8 | 31.6 | 78.3 |
150
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
12. GOODWILL CONT.
| Discount rate | Five-year average | Terminal value | ||||||
| Headroom | (post-tax)* | revenue growth rate | growth rate | |||||
| 2023 | 2022 | |||||||
| £m | £m | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
JFD | – | 35.6 | 15.9% | 14.7% | 4.8% | 3.2% | 2.6% | 2.6% |
Scantech | 28.8 | 39.8 | 16.1% | 12.9% | 6.5% | 7.0 % | 2.6% | 2.6% |
Fendercare | 15.0 | 49.3 | 18.3% | 15.3% | 3.4% | 2.7% | 2.6% | 2.6% |
| Multiple units without significant | ||||||||
goodwill** | 49.8 | 183.5 | 16.2% | 14.1% | 8.8% | 12.8% | 2.6% | 2.6% |
Total | 93.6 | 308.2 |
151
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
12. GOODWILL CONT.
Key assumptions cont.
152
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
| Development | Intellectual | Customer | ||
| costs | property | relationships | Total | |
| Group | £m | £m | £m | £m |
| Cost | ||||
At 1 January 2022 | 29.2 | 10.4 | 17. 5 | 57.1 |
Additions | 1.2 | – | 0.1 | 1.3 |
Transfer | (2.0) | – | (0.3) | (2.3) |
Disposals | (4.8) | ( 0.1) | – | (4.9) |
Exchange differences | 0.1 | 0.2 | 0.5 | 0.8 |
At 31 December 2022 | 23.7 | 10.5 | 17.8 | 52.0 |
Additions | 1.7 | – | – | 1.7 |
Transfers | 1.1 | – | – | 1.1 |
Disposals | – | (0.7) | (0.1) | (0.8) |
Exchange differences | – | (0.3) | – | (0.3) |
At 31 December 2023 | 26.5 | 9.5 | 17.7 | 53.7 |
| Amortisation | ||||
At 1 January 2022 | 22.7 | 6.3 | 14.8 | 43.8 |
Charge for the period | 2.3 | 1.2 | 1.7 | 5.2 |
Impairment | 0.2 | – | – | 0.2 |
Transfer | (1.1) | – | (0.3) | (1.4) |
Disposals | (4.5) | (0.1) | – | (4.6) |
Exchange differences | 0.2 | 0.1 | 0.3 | 0.6 |
At 31 December 2022 | 19.8 | 7.5 | 16.5 | 43.8 |
Charge for the period | 1.1 | 0.8 | 1.0 | 2.9 |
Impairment | 0.2 | 1.7 | – | 1.9 |
Disposals | – | (0.7) | (0.1) | (0.8) |
Exchange differences | – | (0.3) | (0.1) | (0.4) |
At 31 December 2023 | 21.1 | 9.0 | 17.3 | 47.4 |
Net book value at 31 December 2023 | 5.4 | 0.5 | 0.4 | 6.3 |
Net book value at 31 December 2022 | 3.9 | 3.0 | 1.3 | 8.2 |
Net book value at 31 December 2021 | 6.5 | 4.1 | 2.7 | 13.3 |
153
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
14. PROPERTY, PLANT AND EQUIPMENT
| Assets | |||||
| under | Plant and | ||||
| Vessels | construction | Property | equipment | Total | |
| Group | £m | £m | £m | £m | £m |
| Cost: | |||||
At 1 January 2022 | 81.7 | 3.6 | 35.4 | 213.1 | 333.8 |
Additions | 4.1 | 9.7 | 0.5 | 13.1 | 27.4 |
Reclassifications | 0.3 | (3.6) | (5.7) | (2.9) | (11.9) |
Disposals | (20.7) | (0.2) | (4.2) | (12.8) | (37.9) |
Exchange differences | 0.6 | – | 1.0 | 4.5 | 6.1 |
At 31 December 2022 | 66.0 | 9.5 | 27.0 | 215.0 | 317. 5 |
Additions | 2.6 | 17.1 | 0.2 | 8.6 | 28.5 |
Reclassifications | (2.4) | (12.3) | (1.4) | 10.0 | (6.1) |
Disposals | (12.7) | – | (0.6) | (11.7) | (25.0) |
Exchange differences | (0.4) | – | (0.3) | (5.8) | (6.5) |
At 31 December 2023 | 53.1 | 14.3 | 24.9 | 216.1 | 308.4 |
| Depreciation: | |||||
At 1 January 2022 | 52.4 | – | 15.5 | 143.7 | 211.6 |
Provided during the year | 5.8 | – | 1.5 | 16.0 | 23.3 |
Provision for impairment | (0.3) | – | 0.9 | 0.1 | 0.7 |
Reclassifications | – | – | (1.1) | (5.0) | (6.1) |
Disposals | (19.3) | – | (4.2) | (11.9 ) | (35.4) |
Exchange differences | 0.3 | – | 0.6 | 2.8 | 3.7 |
At 31 December 2022 | 38.9 | – | 13.2 | 145.7 | 197.8 |
Provided during the year | 5.5 | – | 1.2 | 15.3 | 22.0 |
Provision for impairment | 0.5 | – | – | – | 0.5 |
Reclassifications | (1.7) | – | (0.4) | (0.9) | (3.0) |
Disposals | (11.6) | – | (0.6) | (10.2) | (22.4) |
Exchange differences | (0.3) | – | (0.1) | (4.1) | (4.5) |
At 31 December 2023 | 31.3 | – | 13.3 | 145.8 | 190.4 |
Net book value at 31 December 2023 | 21.8 | 14.3 | 11.6 | 70.3 | 118.0 |
Net book value at 31 December 2022 | 27.1 | 9.5 | 13.8 | 69.3 | 119.7 |
Net book value at 31 December 2021 | 29.3 | 3.6 | 19.9 | 69.4 | 122.2 |
Reclassifications (£6.1m cost and £3.0m depreciation) in 2023 include a £1.1m net book value (NBV) relating to two properties and a £0.6m
NBV relating to a vessel reclassified to assets held for sale in the Energy Division. Reclassifications of £5.8m at NBV in 2022 includes assets
reclassified to assets held for sale – £4.2m (Nuclear Business) and £1.5m (Defence Division) (see Note 20).
Disposals in 2023 include £0.9m NBV relating to a vessel in the Maritime Transport Division. 2022 included £1.4m NBV relating to two vessels in
the Maritime Transport Division as part of the wider fleet renewal strategy.
Restructuring programmes within the Defence Division were completed during 2022 resulting in an impairment charge of £1.0m charged to
cost of sales. Following improved market conditions and improving utilisation in 2022, there is a credit of £0.3m to cost of sales in the Maritime
Transport Division on part reversal of a vessel impairment.
Climate change impact was considered for the Vessel UELs and no adjustments were required.
154
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
14. PROPERTY, PLANT AND EQUIPMENT CONT.
| Plant and | |||
| Vessels | equipment | Total | |
| Group | £m | £m | £m |
| Cost: | |||
At 1 January 2022 | 0.9 | 38.3 | 39.2 |
Additions | – | 1.8 | 1.8 |
Disposals | – | (1.4) | (1.4) |
Exchange differences | – | 0.4 | 0.4 |
At 31 December 2022 | 0.9 | 39.1 | 40.0 |
Additions | – | 0.6 | 0.6 |
Disposals | – | (1.2) | (1.2) |
Exchange differences | – | (3.0) | (3.0) |
At 31 December 2023 | 0.9 | 35.5 | 36.4 |
| Depreciation: | |||
At 1 January 2022 | 0.2 | 23.9 | 24.1 |
Provided during the year | 0.2 | 2.5 | 2.7 |
Disposals | – | (0.8) | (0.8) |
Exchange differences | – | 0.2 | 0.2 |
At 31 December 2022 | 0.4 | 25.8 | 26.2 |
Provided during the year | – | 2.2 | 2.2 |
Disposals | – | (1.0) | (1.0) |
Exchange differences | – | (2.0) | (2.0) |
At 31 December 2023 | 0.4 | 25.0 | 25.4 |
Net book value at 31 December 2023 | 0.5 | 10.5 | 11.0 |
Net book value at 31 December 2022 | 0.5 | 13.3 | 13.8 |
Net book value at 31 December 2021 | 0.7 | 14.4 | 15.1 |
| Plant and | ||||
| Vessels | Property | equipment | Total | |
| Company | £m | £m | £m | £m |
| Cost: | ||||
At 1 January 2022 | 10.6 | 2.3 | 3.7 | 16.6 |
Additions | – | – | 0.3 | 0.3 |
Disposals | (10.6) | – | – | (10.6) |
At 31 December 2022 | – | 2.3 | 4.0 | 6.3 |
Additions | – | 0.1 | 0.2 | 0.3 |
Disposals | – | – | (0.1) | (0.1) |
At 31 December 2023 | – | 2.4 | 4.1 | 6.5 |
| Depreciation: | ||||
At 1 January 2022 | 10.3 | 1.7 | 3.2 | 15.2 |
Provided during the year | 0.2 | 0.1 | 0.2 | 0.5 |
Disposals | (10.5) | – | – | (10.5) |
At 31 December 2022 | – | 1.8 | 3.4 | 5.2 |
Provided during the year | – | 0.1 | 0.2 | 0.3 |
At 31 December 2023 | – | 1.9 | 3.6 | 5.5 |
Net book value at 31 December 2023 | – | 0.5 | 0.5 | 1.0 |
Net book value at 31 December 2022 | – | 0.5 | 0.6 | 1.1 |
Net book value at 31 December 2021 | 0.3 | 0.6 | 0.5 | 1.4 |
155
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
| Plant and | ||||
| Vessels | Property | equipment | Total | |
| Group | £m | £m | £m | £m |
| Cost: | ||||
At 1 January 2022 | 51.9 | 24.8 | 1.7 | 78.4 |
Reclassifications | – | (3.0) | (0.1) | (3.1) |
Additions | 21.6 | 3.0 | 0.7 | 25.3 |
Disposals | – | (3.6) | (0.1) | (3.7) |
Exchange differences | 1.2 | 0.6 | – | 1.8 |
At 31 December 2022 | 74.7 | 21.8 | 2.2 | 98.7 |
Reclassifications | (4.9) | 0.1 | – | (4.8) |
Additions | 21.6 | 11.0 | 0.2 | 32.8 |
Disposals | (1.3) | (3.1) | (0.2) | (4.6) |
Exchange differences | (0.6) | (0.8) | – | (1.4) |
At 31 December 2023 | 89.5 | 29.0 | 2.2 | 120.7 |
| Depreciation: | ||||
At 1 January 2022 | 25.7 | 10.4 | 0.5 | 36.6 |
Provided during the year | 7.6 | 4.6 | 0.4 | 12.6 |
Provision for impairment | – | 0.4 | – | 0.4 |
Reclassifications | – | (1.2) | (0.1) | (1.3) |
Disposals | – | (3.0) | (0.1) | (3.1) |
Exchange differences | 0.8 | 0.4 | – | 1.2 |
At 31 December 2022 | 34.1 | 11.6 | 0.7 | 46.4 |
Provided during the year | 12.2 | 3.7 | 0.4 | 16.3 |
Provision for impairment | (1.9) | – | – | (1.9) |
Reclassifications | (4.2) | 0.1 | – | (4.1) |
Disposals | (0.4) | (2.0) | (0.2) | (2.6) |
Exchange differences | (0.4) | (0.5) | 0.1 | (0.8) |
At 31 December 2023 | 39.4 | 12.9 | 1.0 | 53.3 |
Net book value at 31 December 2023 | 50.1 | 16.1 | 1.2 | 67.4 |
Net book value at 31 December 2022 | 40.6 | 10.2 | 1.5 | 52.3 |
Net book value at 31 December 2021 | 26.2 | 14.4 | 1.2 | 41.8 |
| 2023 | 2022 | |
| £m | £m | |
Short-term leases | 0.3 | 0.2 |
156
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
| 2023 | 2022 | |
| £m | £m | |
Investment in joint ventures | 6.0 | 6.2 |
Loans to associate | 2.4 | 2.5 |
8.4 | 8.7 |
| 2023 | 2022 | |
| £m | £m | |
Current assets | 9.4 | 15.5 |
Non-current assets | 16.8 | 16.8 |
Current liabilities | (1.5) | (4.6) |
Non-current liabilities | (18.7) | (21.5) |
6.0 | 6.2 | |
Revenue | 13.8 | 13.0 |
Cost of sales | (10.8) | (10.1) |
Administrative expenses | (1.5) | (1.3) |
Profit from operations | 1.5 | 1.6 |
Net finance expense | 0.1 | 0.2 |
Profit before tax | 1.6 | 1.8 |
Tax | (0.2) | (0.1) |
Profit after tax | 1.4 | 1.7 |
| Profit after tax: | ||
Continuing | 1.4 | 1.6 |
Discontinued | – | 0.1 |
1.4 | 1.7 | |
| Segmental analysis of profit after tax: | ||
Energy | 0.1 | – |
Defence | 0.4 | 0.6 |
Maritime Transport | 0.9 | 1.1 |
1.4 | 1.7 | |
| Movement on investment in joint ventures: | ||
At 1 January | 6.2 | 6.0 |
Provision/(reversal) against investments | 0.3 | (0.5) |
Profit for the year | 1.4 | 1.7 |
Dividends received | (1.2) | (1.7) |
Share of fair value (losses)/gains on cash flow hedges | (0.1) | 0.4 |
Exchange adjustments | (0.6) | 0.3 |
At 31 December | 6.0 | 6.2 |
157
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
| Subsidiary undertakings (Company) | |||
| Subsidiary undertakings | |||
| Shares | Loans | Total | |
| Company | £m | £m | £m |
| Cost: | |||
At 1 January 2022 | 140.3 | 386.9 | 5 27. 2 |
Additions | 0.2 | – | 0.2 |
Net movement on loans to subsidiaries | – | (3.2) | (3.2) |
Utilisation of provision | – | (40.5) | (40.5) |
At 31 December 2022 | 140.5 | 343.2 | 483.7 |
Loans converted to equity | 229.4 | (229.4) | – |
Additions | 0.5 | – | 0.5 |
Disposal of subsidiaries | (25.7) | – | (25.7) |
Net movement on loans to subsidiaries | – | (5.8) | (5.8) |
At 31 December 2023 | 344.7 | 108.0 | 452.7 |
| Amount provided: | |||
At 1 January 2022 | 0.4 | 40.5 | 40.9 |
Provided in the year | 25.7 | 1.1 | 26.8 |
Utilisation of provision | – | (40.5) | (40.5) |
At 31 December 2022 | 26.1 | 1.1 | 27. 2 |
Provision for impairment | 75.6 | (1.1) | 74.5 |
Disposal of subsidiaries | (25.7) | – | (25.7) |
At 31 December 2023 | 76.0 | – | 76.0 |
Net book value at 31 December 2023 | 268.7 | 108.0 | 376.7 |
Net book value at 31 December 2022 | 114.4 | 342.1 | 456.5 |
158
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
17. INVESTMENTS AND LOANS TO SUBSIDIARIES CONT.
Group cont.
Equity investments (shares) cont.
159
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
18. INVENTORIES
| Group | ||
| 2023 | 2022 | |
| £m | £m | |
Work in progress | 7.2 | 10.1 |
Raw materials and consumables | 11.5 | 11.2 |
Finished goods | 28.0 | 28.5 |
46.7 | 49.8 |
Inventories are stated net of impairment provisions of £5.8m (2022: £5.5m). The cost of inventories recognised as an expense within cost of sales
was £69.2m (2022: £81.9m).
There were no write down of inventories recorded as an expense in the year (2022: £nil). There was no reversal of any write downs in inventories
in the year (2022: £nil).
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Trade receivables | 62.2 | 68.7 | 0.1 | – |
Amounts owed by Group undertakings | – | – | 4.5 | 3.6 |
Amounts owed by joint venture undertakings | 2.5 | 1.5 | – | – |
Other non-trade receivables | 12.4 | 18.2 | 8.9 | 17. 2 |
Contract assets | 37.1 | 45.7 | – | – |
Prepayments | 9.8 | 14.1 | 0.7 | 1.4 |
Current trade and other receivables | 124.0 | 148.2 | 14.2 | 22.2 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Contract assets | 1.0 | 0.6 | – | – |
Other non-trade receivables | 3.0 | 0.1 | – | – |
Non-current other receivables | 4.0 | 0.7 | – | – |
160
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Trade payables | 29.6 | 42.6 | 6.0 | 5.2 |
Amounts owed to Group undertakings | – | – | 19.6 | 12.4 |
Amounts owed to joint venture undertakings | 0.5 | 0.2 | – | – |
Taxation and social security | 3.0 | 4.9 | 0.1 | 0.9 |
Other payables | 17.0 | 14.8 | 2.5 | 3.0 |
Accruals | 51.6 | 51.4 | 5.7 | 5.7 |
Contract liabilities | 11.7 | 8.5 | – | – |
113.4 | 122.4 | 33.9 | 27. 2 |
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Other payables | – | 0.5 | – | – |
22. PROVISIONS
Group | Company | ||||||
| Cost of | Cost of | ||||||
| material | material | ||||||
| litigation | Warranty | Other | Total | litigation | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2022 | 2.0 | 1.1 | – | 3.1 | – | – | – |
Provided during the year | – | 1.3 | 2.3 | 3.6 | – | – | – |
At 31 December 2022 | 2.0 | 2.4 | 2.3 | 6.7 | – | – | – |
Provided during the year | – | (0.2) | 7. 2 | 7.0 | 2.0 | 6.4 | 8.4 |
At 31 December 2023 | 2.0 | 2.2 | 9.5 | 13.7 | 2.0 | 6.4 | 8.4 |
Provisions in respect of warranties are based on management’s assessment of the previous history of claims, expenses incurred and an estimate
of future obligations on goods and services supplied where a warranty has been provided to the customer. “Costs of material litigation” are those
arising from the process of exiting a number of historic joint venture companies. The Company has applied the exemption in paragraph 92 of
IAS 37 from disclosing further details relative to this matter. Further details have not been disclosed as this could be seriously prejudicial to the
outcome. The timing of settlement is uncertain due to the legal process being outside of the Group’s control, we expect it to settle within one to
two years and we do not expect the outcome to materially exceed the amount provided including any associated interest and legal costs. The
increase in the cost of material litigation in the Company relates to the same matter previously provided in the Group. The Directors have not
restated as it is not considered material. Provisions due within one year were £9.4m (2022: £5.3m) and provisions due greater than one year were
£4.3m (2022: £1.4m).
Included within Other Provisions are the amounts in relation to James Fisher Nuclear Limited (JFN) Parent Company guarantees and offset
provisions.
Following the sale of JFN on 6 March 2023 (see Note 5) and JFN subsequently going into administration on 9 August 2023, a limited number of
performance guarantees covering an event of default by JFN in performing its contractual duties and obligations that remained within the Group.
As at 31 December 2023, a provision of £6.4m (2022: £nil) has been recognised reflecting management’s best estimate at the balance sheet
date of the expenditure required to settle or transfer performance guarantees, based on negotiations that were ongoing at the balance sheet date
and that were not ultimately concluded. There may be additional claims on other performance guarantees, however, to date, the Group has not
received details of any further claims. The Directors are therefore unable to reasonably estimate a range of possible outcomes or the timing of any
outflows other than the ones provided.
161
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
22. PROVISIONS CONT.
Within the Defence Division, some international customers require defence contractors to comply with their industrial co-operation regulations,
often referred to as offset requirements. The intention of offset requirements is to enhance the social and economic environment of the foreign
country by requiring the contractor to promote investment in the country. The offset requirements can be satisfied through purchasing supplies
and services from in-country vendors, providing financial support for in-country projects, establishment of joint ventures with local companies
(direct investment) and establishing facilities for in-country operations. It can also involve technology and technical knowledge transfer. In the
event contractors fail to perform in accordance with offset requirements then penalties may arise unless a negotiated position can be reached
with the respective authorities. Offset obligations are calculated based on regulations, normally a fixed percentage of the revenue contract value.
Similarly, penalties are calculated on standard methodology, normally a fixed percentage of the unfulfilled offset obligation. Offset contractual
compliance is monitored separately from the revenue contract counterparty.
The Group has entered into foreign offset agreements as part of securing some international business. As at 31 December 2023, a provision of
£3.1m (2022: £2.3m) has been recognised in regard to offset agreement penalties. The liability is expected to be settled over the next one to two
years (2022: two years).
23. RETIREMENT BENEFIT OBLIGATIONS
The Group and Company defined benefit pension scheme obligations relate to the James Fisher and Sons plc Pension Fund for Shore Staff
(Shore staff), the Merchant Navy Officers Pension Fund (MNOPF) and the Merchant Navy Ratings Pension Fund (MNRPF) which are regulated
under UK pension legislation. The financial statements incorporate the latest full actuarial valuations of the schemes which have been updated to
31 December 2023 by qualified actuaries using assumptions set out in the table below. These defined benefit schemes expose the Company to
actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. In addition, by participating in certain multi-
employer industry schemes, the Company can be exposed to a pro-rata share of the credit risk of other participating employers. There are no
plans to withdraw from the MNOPF or MNRPF schemes in the foreseeable future. The Group’s obligations in respect of its pension schemes at
31 December 2023 were as follows:
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Shore staff | 7.4 | 5.5 | 7.4 | 5.5 |
MNOPF | – | (0.4) | – | (0.2) |
MNRPF | (1.6) | – | (0.5) | – |
5.8 | 5.1 | 6.9 | 5.3 |
Shore staff
The assets of this scheme are held in a separate trustee administered account and do not include any of the Group’s assets. The scheme was
closed to new members in October 2001 and closed to future accrual on 31 December 2010. The most recent actuarial valuation was as at
31 July 2022. It is valued every three years following which deficit contributions and the repayment period are subject to agreement between
the Company and the Trustees. Funding arrangements are set out in the most recent triennial actuarial valuation report. Estimated contributions
to the scheme in 2024 are £1.5m. The weighted average duration of the Shore staff scheme is 11 years.
The Shore staff plan assets and obligations have been updated to 31 December 2023 resulting in a surplus being recognised. A surplus, when
calculated on an accounting basis, is recognised when the Group can realise the economic benefit at some point during the life of the plan
or when the plan liabilities are all settled and there are no remaining beneficiaries. Based on a review of the plan’s governing documentation,
the Company has a right to a refund of surplus assuming the gradual settlement of the plan liabilities over time until all members have left. The
Directors therefore take the view that it is appropriate to recognise the surplus. The recognition of the surplus is considered to be a judgement in
line with IFRIC 14 (see Note 34).
MNOPF
The MNOPF is an industry-wide pension scheme which is accounted for as a defined benefit scheme. It is valued every three years and deficits
have typically been funded over a ten-year period. The most recent triennial actuarial valuation of the scheme was as at 31 March 2021 and
no additional deficit funding was requested by the Trustees. Funding arrangements are set out in the most recent triennial actuarial valuation
report. The respective share of the Group and Company in the net retirement benefit obligation of the MNOPF are 2.95% (2022: 3.00%) and
1.46% (2022: 1.50%), respectively. The Company share also includes the liability of other Group subsidiaries, as it has agreed to recognise these
liabilities and hence there are no liabilities in those accounts with the exception of FT Everard & Sons Ltd. Disclosures relating to this scheme
are based on these allocations which are reviewed, and changes notified to the Company. Information supplied by the trustees of the MNOPF
has been reviewed by the Company’s actuaries. The principal assumption in the review is the discount rate on the scheme’s liabilities which was
4.55% (2022: 4.80%). The other major assumptions are the same as in the actuarial assumptions table below. The disclosures below relate to
the Group’s share of the assets and liabilities within the MNOPF. Estimated contributions to this scheme in 2024 are £nil which is represented by
the deficit in the table above. The Company does not have an unconditional right to a refund of a scheme surplus. The weighted average duration
of the MNOPF scheme is ten years.
162
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
23. RETIREMENT BENEFIT OBLIGATIONS CONT.
MNRPF
The MNRPF is an industry-wide pension scheme which is accounted for as a defined benefit scheme. The most recent actuarial valuation of the
MNRPF was at 31 March 2023. Information supplied by the trustees of the MNRPF has been reviewed by the Company’s actuaries. The share of
the Group and the Company in the net retirement benefit obligation of the MNRPF are reviewed and changes notified to the Company. The Directors
have identified that the share of the Group and Company in the net retirement benefit obligation of the MNRPF was incorrect in the prior year. The
Group share was included at 2.19% instead of 1.45%, and the Company share at 0.79% instead of 0.47%. The Group assets and liabilities were
therefore both overstated by £6m and the Company assets and liabilities by £3m, with a £nil impact after the effect of the asset ceiling on the net
defined benefit obligation in both Group and Company. The Directors consider that this is not material and therefore have not restated the prior year
figures; the correct Group and Company shares have been included in the current period. The principal assumption in the MNRPF valuation is the
discount rate on the schemes liabilities which was 4.55% (2022: 4.80%). The other major assumptions are the same as in the actuarial assumptions
table below. Estimated contributions to this scheme are £nil in 2024. The Company does not have an unconditional right to a refund of a scheme
surplus. The weighted average duration of the MNRPF scheme is 11 years.
In 2018, the Trustees became aware of historic legal uncertainties relating to changes to ill-health early retirement benefits payable from the MNRPF.
In order to resolve the issue, the Trustee sought directions from the Court, and in February 2022, the High Court approved a settlement in principle.
During the year a £0.3m credit (2022: £1.5m past service cost) was recognised within administrative expenses relating to the Group’s share of
additional liabilities which have been estimated to date.
New issues were identified in 2021 in relation to the Fund’s administrative and benefit practices as part of the benefit review carried out by the
Fund’s lawyers. The Trustee is undertaking further investigations and the potential quantum of these issues at the moment is uncertain. During the
year, a £2.5m past service cost was recognised within administrative expenses relating to the Group’s share of additional liabilities which have been
estimated to date. This £2.5m combined with the £0.3m credit regarding ill-health early retirement represents a net £2.2m charge during the year.
2023 | 2022 | |
Inflation (%) | 3.10 | 3.15 |
Rate of increase of pensions in payment – Shore staff (%) | 3.00 | 3.05 |
Discount rate for scheme liabilities (%) | 4.55 | 4.80 |
Expected rates of return on assets (%) | 4.55 | 4.80 |
| Post-retirement mortality: (years) | ||
| Shore staff scheme | ||
Current pensioner at 65 male | 21.7 | 21.9 |
Current pensioner at 65 female | 23.6 | 23.5 |
Future pensioner at 65 male | 23.0 | 23.3 |
Future pensioner at 65 female | 25.1 | 25.1 |
Key measure | Change in assumption | Change in deficit |
| Shore staff scheme | ||
Discount rate | Increase of 0.5% | Decrease by 4.9% |
Rate of inflation | Increase by 0.5% | Increase by 2.8% |
Rate of mortality | Increase in life expectancy of 1 year | Increase by 3.7% |
| MNOPF | ||
Discount rate | Increase of 0.5% | Decrease by 4.5% |
Rate of inflation | Increase by 0.5% | Increase by 3.2% |
Rate of mortality | Increase in life expectancy of 1 year | Increase by 3.3% |
| MNRPF | ||
Discount rate | Increase of 0.5% | Decrease by 4.7% |
Rate of inflation | Increase by 0.5% | Increase by 2.0% |
Rate of mortality | Increase in life expectancy of 1 year | Increase by 2.7% |
163
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(a) The assets and liabilities of the schemes at 31 December are:
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| At 31 December 2023 | £m | £m | £m | £m | £m | £m | £m | £m |
Fair value of scheme assets* | 54.0 | 60.0 | 12.4 | 126.4 | 54.0 | 29.7 | 4.0 | 87.7 |
Present value of scheme liabilities | (46.6) | (5 7. 8 ) | (14.0) | (118.4) | (46.6) | (28.6) | (4.5) | (79.7) |
Effect of asset ceiling | – | (2.2) | – | (2.2) | – | (1.1) | – | (1.1) |
Net pension surplus/(liabilities) | 7.4 | – | (1.6) | 5.8 | 7.4 | – | (0.5) | 6.9 |
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| At 31 December 2022 | £m | £m | £m | £m | £m | £m | £m | £m |
Fair value of scheme assets* | 52.3 | 65.9 | 20.2 | 138.4 | 52.3 | 33.0 | 7. 2 | 92.5 |
Present value of scheme liabilities | (46.8) | (61.1) | (18.3) | (126.2) | (46.8) | (30.6) | (6.6) | (84.0) |
Effect of asset ceiling | – | (5.2) | (1.9) | ( 7.1) | – | (2.6) | (0.6) | (3.2) |
Net pension surplus/(liabilities) | 5.5 | (0.4) | – | 5.1 | 5.5 | (0.2) | – | 5.3 |
* The Shore staff scheme includes the following asset categories:
| 2023 | 2022 | |
| £m | £m | |
Investment funds: diversified alternatives (unquoted) | 7. 0 | 18.7 |
Investment funds: liability-driven investments (quoted) | 13.9 | 12.6 |
Investment funds: absolute return bonds (unquoted) | 14.1 | 12.8 |
Investment funds: asset backed securities (quoted) | 6.2 | 0.3 |
Investment funds: annuity assets | 0.7 | – |
Investment funds: other (unquoted) | 5.1 | 4.9 |
Cash or liquid assets** | 7.0 | 3.0 |
54.0 | 52.3 |
** £7.0m cash at 31 December 2023 includes £6.0m cash in transit from diversified alternatives disinvestment which was credited to the bank account on 2 January 2024.
The Liability Driven Investments (LDI) held by the Shore staff scheme (£13.9m at 31 December 2023) include fixed interest government bonds
(gilts), index-linked gilts, cash and various derivative instruments such as inflation swaps, interest rate swaps, gilt total return swaps and gilt
repurchase agreements. The aim of these investments is to match the interest rate and inflation exposure of a portion of the Scheme’s liabilities,
to help reduce the volatility in the funding position.
The value of the Shore staff assets is determined by fund managers using principles of fair valuation as determined appropriate given the nature
of the investment.
For the MNRPF and MNOPF schemes, the value of the assets is projected by our corporate actuary using the generic accounting report as on
31 March 2023 and is projected in line with market movement. The MNOPF and MNRPF schemes do not provide employer/participant specific
asset details and do not provide details of assets as at year ends, therefore, the bifurcation of assets for these schemes at 31 December 2023
has not been presented.
The MNRPF and MNOPF contributions paid by the Group are not refundable in any circumstances and the balance sheet liability reflects an
adjustment for any agreed deficit recovery contributions in excess of deficit determined using the Group’s assumptions. Other investments in the
Shore staff scheme comprise diversified growth funds, liability driven investments, absolute return and private market funds.
164
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(b) Expense recognised in the income statement
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| At 31 December 2023 | £m | £m | £m | £m | £m | £m | £m | £m |
Past service cost | – | – | 2.2 | 2.2 | – | – | 0.7 | 0.7 |
Expenses | 0.1 | 0.2 | 0.2 | 0.5 | 0.1 | 0.1 | – | 0.2 |
Interest cost on benefit obligation | 2.2 | 2.8 | 0.8 | 5.8 | 2.2 | 1.4 | 0.3 | 3.9 |
Return on scheme assets | (2.4) | (3.1) | (0.9) | (6.4) | (2.4) | (1.5) | (0.3) | (4.2) |
Interest cost on the asset ceiling | – | 0.2 | 0.1 | 0.3 | – | 0.1 | – | 0.1 |
(0.1) | 0.1 | 2.4 | 2.4 | (0.1) | 0.1 | 0.7 | 0.7 |
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| At 31 December 2022 | £m | £m | £m | £m | £m | £m | £m | £m |
Past service cost | – | – | 1.5 | 1.5 | – | – | 0.6 | 0.6 |
Expenses | 0.1 | 0.2 | 0.3 | 0.6 | 0.1 | 0.1 | 0.1 | 0.3 |
Interest cost on benefit obligation | 1.2 | 1.6 | 0.4 | 3.2 | 1.2 | 0.8 | 0.2 | 2.2 |
Return on scheme assets | (1.2) | (1.8) | (0.5) | (3.5) | (1.2) | (0.9) | (0.2) | (2.3) |
Interest cost on the asset ceiling | – | 0.2 | 0.1 | 0.3 | – | 0.1 | – | 0.1 |
0.1 | 0.2 | 1.8 | 2.1 | 0.1 | 0.1 | 0.7 | 0.9 |
The actual return on the Shore staff plan assets is a gain of £4.2m (2022: loss of £11.9m).
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| At 31 December 2023 | £m | £m | £m | £m | £m | £m | £m | £m |
At 1 January 2023 | (5.5) | 0.4 | – | (5.1) | (5.5) | 0.2 | – | (5.3) |
Expense recognised in the income statement | (0.1) | 0.1 | 2.4 | 2.4 | (0.1) | 0.1 | 0.7 | 0.7 |
Contributions paid to scheme | (1.1) | (0.4) | – | (1.5) | (1.1) | (0.2) | – | (1.3) |
Remeasurement gains and losses | (0.7) | (0.1) | (0.8) | (1.6) | (0.7) | (0.1) | (0.2) | (1.0) |
At 31 December 2023 | ( 7.4) | – | 1.6 | (5.8) | (7.4) | – | 0.5 | (6.9) |
At 1 January 2022 | 1.0 | 0.9 | – | 1.9 | 1.0 | 0.4 | – | 1.4 |
Expense recognised in the income statement | 0.1 | 0.2 | 1.9 | 2.2 | 0.1 | 0.1 | 0.7 | 0.9 |
Contributions paid to scheme | (1.6) | (0.5) | – | (2.1) | (1.6) | (0.2) | – | (1.8) |
Remeasurement gains and losses | (5.0) | (0.2) | (1.9) | ( 7.1) | (5.0) | (0.1) | (0.7) | (5.8) |
At 31 December 2022 | (5.5) | 0.4 | – | (5.1) | (5.5) | 0.2 | – | (5.3) |
165
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
23. RETIREMENT BENEFIT OBLIGATIONS CONT.
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| At 31 December 2023 | £m | £m | £m | £m | £m | £m | £m | £m |
At 1 January 2023 | 46.8 | 61.1 | 18.3 | 126.2 | 46.8 | 30.6 | 6.6 | 84.0 |
Past service cost | – | 2.2 | 2.2 | – | – | 0.7 | 0.7 | |
Interest cost | 2.2 | 2.8 | 0.8 | 5.8 | 2.2 | 1.4 | 0.3 | 3.9 |
| Remeasurement loss/(gain): | ||||||||
Actuarial loss arising from scheme experience | 0.7 | (1.7) | (6.6) | ( 7.6) | 0.7 | (1.2) | (2.8) | (3.3) |
Actuarial (gain)/loss arising from changes in demographic | ||||||||
assumptions | (0.3) | (1.1) | (0.3) | (1.7) | (0.3) | (0.6) | (0.1) | (1.0) |
Actuarial gain arising from changes in financial assumptions | 0.6 | 1.2 | 0.4 | 2.2 | 0.6 | 0.6 | 0.1 | 1.3 |
Net benefits paid out | (3.4) | (4.5) | (0.8) | (8.7) | (3.4) | (2.2) | (0.3) | (5.9) |
At 31 December 2023 | 46.6 | 57. 8 | 14.0 | 118.4 | 46.6 | 28.6 | 4.5 | 79.7 |
At 1 January 2022 | 66.8 | 87. 5 | 26.1 | 180.4 | 66.8 | 43.8 | 9.4 | 120.0 |
Past service cost | – | – | 1.5 | 1.5 | – | – | 0.6 | 0.6 |
Interest cost | 1.2 | 1.6 | 0.4 | 3.2 | 1.2 | 0.8 | 0.2 | 2.2 |
| Remeasurement loss/(gain): | ||||||||
Actuarial loss arising from scheme experience | 1.3 | 2.7 | 1.1 | 5.1 | 1.3 | 1.3 | 0.4 | 3.0 |
Actuarial (gain)/loss arising from changes in demographic | ||||||||
assumptions | 0.1 | (1.4) | (0.1) | (1.4) | 0.1 | (0.7) | (0.1) | (0.7) |
Actuarial gain arising from changes in financial assumptions | (19.5) | (24.6) | (9.0) | (5 3.1) | (19.5) | (12.3) | (3.3) | (35.1) |
Net benefits paid out | (3.1) | (4.7) | (1.7) | (9.5) | (3.1) | (2.3) | (0.6) | (6.0) |
At 31 December 2022 | 46.8 | 61.1 | 18.3 | 126.2 | 46.8 | 30.6 | 6.6 | 84.0 |
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
As at 1 January 2023 | – | (5.2) | (1.9) | ( 7.1) | – | (2.6) | (0.6) | (3.2) |
Interest | – | (0.2) | (0.1) | (0.3) | – | (0.1) | – | ( 0.1) |
| Change in adjustment in excess | ||||||||
of interest | – | 3.2 | 2.0 | 5.2 | – | 1.6 | 0.6 | 2.2 |
As at 31 December 2023 | – | (2.2) | – | (2.2) | – | (1.1) | – | (1.1) |
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
As at 1 January 2022 | – | (10.6) | (2.9) | (13.5) | – | (5.2) | (1.0) | (6.2) |
Interest | – | (0.2) | (0.1) | (0.3) | – | (0.1) | – | ( 0.1) |
| Change in adjustment in excess | ||||||||
of interest | – | 5.6 | 1.1 | 6.7 | – | 2.7 | 0.4 | 3.1 |
As at 31 December 2022 | – | (5.2) | (1.9) | ( 7.1) | – | (2.6) | (0.6) | (3.2) |
166
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
23. RETIREMENT BENEFIT OBLIGATIONS CONT.
Group | Company | |||||||
| Shore | Shore | |||||||
| staff | MNOPF | MNRPF | Total | staff | MNOPF | MNRPF | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2023 | 52.3 | 65.9 | 20.2 | 138.4 | 52.3 | 33.0 | 7. 2 | 92.5 |
Expenses | (0.1) | (0.2) | (0.2) | (0.5) | (0.1) | (0.1) | – | (0.2) |
| Return on scheme assets | ||||||||
recorded in interest | 2.4 | 3.1 | 0.9 | 6.4 | 2.4 | 1.5 | 0.3 | 4.2 |
| Remeasurement loss/(gain): | ||||||||
| Return on plan assets excluding | ||||||||
interest income | 1.7 | (4.7) | (7.7) | (10.7) | 1.7 | (2.7) | (3.2) | (4.2) |
Contributions by employer | 1.1 | 0.4 | – | 1.5 | 1.1 | 0.2 | – | 1.3 |
Net benefits paid out | (3.4) | (4.5) | (0.8) | (8.7) | (3.4) | (2.2) | (0.3) | (5.9) |
At 31 December 2023 | 54.0 | 60.0 | 12.4 | 126.4 | 54.0 | 29.7 | 4.0 | 87.7 |
At 1 January 2022 | 65.8 | 97. 2 | 29.0 | 192.0 | 65.8 | 48.6 | 10.4 | 124.8 |
Expenses | (0.1) | (0.2) | (0.3) | (0.6) | (0.1) | (0.1) | ( 0.1) | (0.3) |
| Return on scheme assets | ||||||||
recorded in interest | 1.2 | 1.8 | 0.5 | 3.5 | 1.2 | 0.9 | 0.1 | 2.2 |
| Remeasurement loss/(gain): | ||||||||
| Return on plan assets excluding | ||||||||
interest income | (13.1) | (28.7) | ( 7. 3 ) | (4 9.1) | (13.1) | (14.3) | (2.7) | (3 0.1) |
Contributions by employer | 1.6 | 0.5 | – | 2.1 | 1.6 | 0.2 | – | 1.8 |
Net benefits paid out | (3.1) | (4.7) | (1.7) | (9.5) | (3.1) | (2.3) | (0.5) | (5.9) |
At 31 December 2022 | 52.3 | 65.9 | 20.2 | 138.4 | 52.3 | 33.0 | 7. 2 | 92.5 |
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Shore staff | £m | £m | £m | £m | £m |
Fair value of scheme assets | 54.0 | 52.3 | 65.8 | 62.9 | 58.9 |
Defined benefit obligation | (46.6) | (46.8) | (66.8) | (71.7) | (59.3) |
Surplus/(deficit) in scheme | 7.4 | 5.5 | (1.0) | (8.8) | (0.4) |
| Remeasurement gain/(loss): | |||||
Return on plan assets excluding interest income | 1.7 | (13.1) | 3.7 | 5.7 | 6.5 |
Remeasurement (loss)/gain on scheme liabilities | 1.0 | (18.1) | (2.7) | 14.7 | 2.2 |
| MNOPF | 2023 | 2022 | 2021 | 2020 | 2019 |
| Group | £m | £m | £m | £m | £m |
Fair value of scheme assets | 60.0 | 65.9 | 97. 2 | 99.2 | 103.8 |
Defined benefit obligation | (57. 8) | (61.1) | (98.1) | (100.5) | (107. 2 ) |
Asset ceiling | (2.2) | (5.2) | – | – | – |
Deficit in scheme | – | (0.4) | (0.9) | (1.3) | (3.4) |
| MNOPF | 2023 | 2022 | 2021 | 2020 | 2019 |
| Company | £m | £m | £m | £m | £m |
Fair value of scheme assets | 29.7 | 33.0 | 48.6 | 49.7 | 52.0 |
Defined benefit obligation | (28.6) | (30.6) | (49.0) | (50.3) | (54.2) |
Asset ceiling | (1.1) | (2.6) | – | – | – |
Deficit in scheme | – | (0.2) | (0.4) | (0.6) | (2.2) |
167
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(g) History of experience gains and losses cont.
| MNRPF | 2023 | 2022 | 2021 | 2020 | 2019 |
| Group | £m | £m | £m | £m | £m |
Fair value of scheme assets | 12.4 | 20.2 | 29.0 | 30.9 | 28.7 |
Defined benefit obligation | (14.0) | (18.3) | (29.0) | (31.1) | (30.7) |
Asset ceiling | – | (1.9) | – | – | – |
Deficit in scheme | (1.6) | – | – | (0.2) | (2.0) |
| MNRPF | 2023 | 2022 | 2021 | 2020 | 2019 |
| Company | £m | £m | £m | £m | £m |
Fair value of scheme assets | 4.0 | 7.2 | 10.4 | 10.6 | 9.6 |
Defined benefit obligation | (4.5) | (6.6) | (10.4) | (10.7) | (10.4) |
Asset ceiling | – | (0.6) | – | – | – |
Deficit in scheme | (0.5) | – | – | (0.1) | (0.8) |
24. SHARE-BASED PAYMENTS
The Group operates a Long-Term Incentive Plan (LTIP) in respect of Executive Directors and certain senior employees and details are set out
in the Director’s remuneration report on pages 92 to 109. It also operates a Sharesave scheme (Sharesave) for eligible employees which is HM
Revenue and Customs approved.
The Group recognised an expense in respect of equity-settled share-based payments of £1.0m (2022: £0.5m), Company £0.5m (2022: £0.3m)
during the year.
The weighted average exercise prices (WAEP) and movements in share options during the year are as follows:
Sharesave scheme | LTIP awards | |||||
| 2023 | 2022 | 2023 | 2022 | |||
| Group | Number | WAEP | Number | WAEP | Number | Number |
Outstanding at 1 January | 677,6 51 | £4.41 | 284,653 | £10.67 | 1,383,824 | 386,413 |
Granted during the year | 261,914 | £3.66 | 640,834 | £3.24 | 1,390,033 | 1,242,218 |
Forfeited during the year | (362,577) | £4.66 | ( 247, 8 3 6) | £8.57 | (466,243) | (244,807) |
Exercised | (2,544) | £3.24 | – | £0.00 | (35,337) | – |
Outstanding at 31 December | 574,444 | £3.90 | 677,6 51 | £4.41 | 2,272,277 | 1,383,824 |
Exercisable at 31 December | 12,154 | £14.09 | 12,154 | £14.09 | – | – |
Sharesave scheme
All employees, subject to the discretion of the Remuneration Committee, may apply for share options under an employee save as you earn
plan which may from time-to-time be offered by the Company. An individual’s participation is limited so that the aggregate price payable for
shares under option at any time does not exceed the statutory limit. Options granted under the plans will normally be exercisable if the employee
remains in employment and any other conditions set by the Remuneration Committee have been satisfied. Options are normally exercisable at
the end of the related savings contract, but early exercise is permitted in certain limited circumstances. The performance period will not normally
be less than three and a half years or greater than seven and a half years. Awards were made of 261,914 options under this scheme on
7 June 2023.
During the year 2,544 options were exercised (2022: no options were exercised). The weighted average share price at the date of exercise for
the options exercised was £3.24 (2022: not applicable). For the Sharesave options outstanding at 31 December 2023, the weighted average
remaining contractual life is 2 years and 7 months (2022: 2 years and 10 months). The weighted average fair value of options granted during
the year was £1.48 (2022: £1.25). The range of exercise prices for options outstanding at the end of the year was £3.24 – £20.98 (2022: £3.24
– £20.98). The fair value of share-based payments has been estimated using the Black-Scholes model for the Sharesave.
168
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
24. SHARE-BASED PAYMENTS CONT.
LTIP awards scheme
LTIP awards are granted in the form of a conditional share award to certain employees. Vesting requirements for this scheme are set out within
the Directors’ remuneration report on page 103. 2023 LTIP awards have been granted over 999,806 ordinary shares of 25 pence each.
A “reset share award” was made in June 2023 to certain employees as part of the Company’s reset, reinforce and realise strategy. A restricted
share award (structured as a conditional award of shares) has been granted over 145,883 (2022: 180,365) ordinary shares of 25 pence each.
A “transformation share award” was made in June 2023 to certain employees as part of the Company’s transformation strategy. A restricted
share award (structured as a conditional award of shares) has been granted over 181,986 (2022: not applicable) ordinary shares of 25 pence
each.
A LTIP share award was made in December 2023 to Karen Hayzen-Smith, Chief Financial Officer, upon her joining the Company. Vesting
requirements for this scheme are set out within the Directors’ remuneration report on page 104. The 2023 LTIP awards have been granted over
62,358 ordinary shares of 25 pence each.
As described in the Directors’ remuneration report on page 103, a restricted share award (structured as a conditional award of shares) over
135,516 ordinary shares of 25 pence each was granted to Mr Vernet (CEO) on 13 September 2022. 35,337 options vested during the year, with
32,421 lapsing and 67,758 outstanding.
35,337 options were exercised during the year (2022: nil). For LTIP awards the weighted average remaining contractual life is 2 years (2022: 2
years). The weighted average fair value of options granted during the year was £3.60 (2022: £3.32). The fair value of share-based payments has
been estimated using the Black-Scholes model for the earnings per share element of the LTIP. The fair value of share-based payments relating to
the total shareholder return element of the LTIP has been estimated using the Monte Carlo model.
Sharesave scheme | LTIP awards | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| Company | Number | WAEP | Number | WAEP | Number | Number | |
Outstanding at 1 January | 72,898 | £5.55 | 66,100 | £9.15 | 644,826 | 246,450 | |
Granted during the year | 34,881 | £3.66 | 55,811 | £3.24 | 738,233 | 590,599 | |
Forfeited during the year | (13,092) | £5.86 | (49,013) | £7. 5 7 | (133,622) | (192,223) | |
Exercised | – | – | – | £0.00 | (35,337) | – | |
Outstanding at 31 December | 94,687 | £4.81 | 72,898 | £5.55 | 1, | 214,100 | 644,826 |
Exercisable at 31 December | 12,154 | £14.09 | 12,154 | £14.09 | – | – |
Sharesave scheme
No options were exercised in 2023 or 2022. For the share options outstanding at 31 December 2023, the weighted average remaining
contractual life is 2 years and 5 months (2022: 2 years and 10 months). The weighted average fair value of options granted during the year was
£1.48 (2022: £1.24). The range of exercise prices for options outstanding at the end of the year was £3.24 – £11.06 (2022: £3.24 – £20.98).
The fair value of share-based payments has been estimated using the Black-Scholes model for the Sharesave.
LTIP scheme
35,337 options were exercised during the year (2022: nil). For LTIP awards the weighted average remaining contractual life is 2 years
(2022: 1 year and 9 months). The weighted average fair value of options granted during the year was £3.58 (2022: £3.27). The fair value of
share-based payments has been estimated using the Black-Scholes model for the earnings per share element of the LTIP. The fair value of
share-based payments relating to the total shareholder return element of the LTIP has been estimated using the Monte Carlo model.
The inputs to the models used to determine the valuations fell within the following ranges:
2023 | 2022 | |
Dividend yield (%) | 1.6% | 1.6% |
Expected life of option (years) | 3 – 7 | 3 – 7 |
Share price at date of grant | £3.90 – £3.94 | £3.72 – £3.80 |
Expected share price volatility (%) | 40.0% | 40.0% |
Risk-free interest rate (%) | 4.32% – 4.59% | 1.60% – 1.76% |
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price.
169
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
25. BUSINESS COMBINATIONS
Year ended 31 December 2023
There were no acquisitions during the year ended 31 December 2023.
Year ended 31 December 2022
On 1 March 2022, James Fisher Subtech Group Limited paid £0.2m to buy back shares in Subtech Offshore Services Nigeria Ltd (SOSN)
in Marine Support, from a third-party. The Group previously consolidated SOSN as a subsidiary in accordance with IFRS 10, following the
transaction, the accounting treatment remained unchanged and the impact of the change in ownership interest is recorded within equity (see
Consolidated statement of changes in equity).
On 22 August 2022, James Fisher Servicos Empresariais Ltda paid £1.3m to acquire an additional 30% shares in Servicos Maritimos Continental
S.A (Continental) in Marine Support, thereby increasing its ownership to 90%. The Group previously consolidated Continental as a subsidiary in
accordance with IFRS 10, following the transaction the accounting treatment remained unchanged and the impact of the change in ownership
interest is recorded within equity (see Consolidated statement of changes in equity).
26. DISPOSAL OF BUSINESSES
Year ended 31 December 2023
On 6 March 2023, the Group announced that the entire share capital of James Fisher Nuclear Holdings Limited and related properties was sold
to Myneration Limited, a wholly-owned investment vehicle of Rcapital Partners LLP for a consideration of £3. The Group has retained certain
Parent Company guarantees which historically were given to support the obligations of JFN.
| £m | |
Consideration received | – |
Net liabilities disposed | (0.1) |
Costs in relation to businesses sold | (2.0) |
Loss on disposal | (2.1) |
| Cash flow from the disposal of businesses | |
Cash received | – |
Cash and cash equivalents disposed | – |
Costs in relation to businesses sold | (3.2) |
| (3.2) |
JFN was classified as a discontinued operation and details of the results and cash flows of this discontinued operation can be found in Note 5.
Year ended 31 December 2022
On 19 December 2022, the Group disposed of its 100% shareholding in Strainstall UK Ltd from its Energy Division to BES Group for £9.4m cash
consideration. The assets and liabilities disposed were as follows:
| £m | |
Consideration received | 9.4 |
| Less net assets disposed: | |
Goodwill | (3.0) |
Property, plant and equipment | (0.2) |
Right-of-use assets | (0.3) |
Inventories | (2.4) |
Trade and other receivables | (2.9) |
Cash and cash equivalents | (0.6) |
Trade and other payables | 1.5 |
Lease liabilities | 0.4 |
Net assets disposed | (7.5) |
Costs in relation to businesses sold | (0.9) |
Gain on disposal | 1.0 |
| Cash flow from the disposal of businesses | |
Cash received | 9.4 |
Cash and cash equivalents disposed | (0.6) |
Costs in relation to businesses sold | (0.9) |
| 7.9 |
170
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
26. DISPOSAL OF BUSINESSES CONT.
Year ended 31 December 2022 cont.
On 19 December 2022, the Group disposed of its 100% shareholding in Prolec Ltd from its Energy Division to Kinshofer GmbH, part of Lifco AB
for £4.9m cash consideration. The assets and liabilities disposed were as follows:
| £m | |
Consideration received | 4.9 |
| Less net assets disposed: | |
Goodwill | (1.0) |
Other intangible assets | (0.1) |
Inventories | (1.1) |
Trade and other receivables | (1.2) |
Cash and cash equivalents | (0.5) |
Trade and other payables | 0.9 |
Net assets disposed | (3.0) |
Costs in relation to businesses sold | (0.4) |
Gain on disposal | 1.5 |
| Cash flow from the disposal of businesses | |
Cash received | 4.9 |
Cash and cash equivalents disposed | (0.5) |
Costs in relation to businesses sold | (0.4) |
| 4.0 |
On 19 December 2022, the Group disposed of its 100% shareholding in James Fisher Mimic Ltd from its Energy Division to BES Group for
£4.2m cash consideration. The assets and liabilities disposed were as follows:
| £m | |
Consideration received | 4.2 |
| Less net assets disposed: | |
Goodwill | (3.0) |
Other intangible assets | (0.1) |
Trade and other receivables | (0.7) |
Cash and cash equivalents | (0.5) |
Trade and other payables | 0.6 |
Net assets disposed | (3.7) |
Costs in relation to businesses sold | (0.5) |
Gain on disposal | – |
| Cash flow from the disposal of businesses | |
Cash received | 4.2 |
Cash and cash equivalents disposed | (0.5) |
Costs in relation to businesses sold | (0.5) |
| 3.2 |
The total gains on disposal of £2.5m are included within administrative expenses. The above disposals do not meet the IFRS 5 criteria for
discontinued operations.
171
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Overdrafts | 51.1 | 30.8 | 13.7 | 8.7 |
Bank loans | – | 36.6 | – | 36.6 |
Lease liabilities | 13.0 | 13.2 | 0.6 | 0.2 |
64.1 | 80.6 | 14.3 | 45.5 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Bank loans | 166.6 | 121.8 | 166.6 | 121.8 |
Lease liabilities | 48.2 | 39.7 | 0.7 | 1.3 |
214.8 | 161.5 | 167. 3 | 123.1 |
| At 31 December 2023 | ||
| Group | Company | |
| £m | £m | |
Due within one year | 51.1 | 13.7 |
Due between one and two years | 166.6 | 166.6 |
217.7 | 180.3 |
| At 31 December 2022 | ||
| Group | Company | |
| £m | £m | |
Due within one year | 67.4 | 45.3 |
Due between one and two years | 121.8 | 121.8 |
189.2 | 16 7.1 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Cash at bank and in hand | 77.5 | 53.6 | 10.9 | 0.4 |
Overdrafts | (51.1) | (30.8) | (13.7) | (8.7) |
26.4 | 22.8 | (2.8) | (8.3) |
172
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
| 31 December | Other | Exchange | 31 December | |||
| 2022 | Cash flow | non-cash** | Transfers | movement | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Cash and cash equivalents* | 22.8 | 5.7 | – | (0.4) | (1.7) | 26.4 |
Cash – classified within assets held for sale | 2.8 | – | – | (2.4) | – | 0.4 |
Debt due within one year | (36.6) | 36.6 | – | – | – | – |
Debt due after one year | (121.9) | (43.0) | (1.8) | – | – | (166.7) |
(158.5) | (6.4) | (1.8) | – | – | (166.7) | |
Lease liabilities | (52.9) | 18.1 | (28.9) | – | 2.5 | (61.2) |
Net borrowings | (185.8) | 17.4 | (30.7) | (2.8) | 0.8 | (201.1) |
| 31 December | Other | Exchange | 31 December | |||
| 2021 | Cash flow | non-cash** | Transfers | movement | 2022 | |
| £m | £m | £m | £m | £m | £m | |
Cash and cash equivalents* | 34.5 | (11.4) | – | (2.8) | 2.5 | 22.8 |
Cash – classified within assets held for sale | – | – | – | 2.8 | – | 2.8 |
Debt due within one year | (0.1) | – | – | (36.5) | – | (36.6) |
Debt due after one year | (174.0) | 16.6 | (1.0) | 36.5 | – | (121.9) |
(174.1) | 16.6 | (1.0) | – | – | (158.5) | |
Lease liabilities | (46.0) | 14.5 | (17.8 ) | – | (3.6) | (52.9) |
Net borrowings | (185.6) | 19.7 | (18.8) | – | (1.1) | (185.8) |
173
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Receivables | 111.1 | 127. 2 | 10.4 | 13.9 |
Cash at bank and in hand | 77.5 | 53.6 | 10.9 | 0.4 |
| Interest rate swaps used for hedging: | ||||
Assets | 2.3 | 3.8 | 2.3 | 3.8 |
| Forward exchange contracts used for hedging: | ||||
Assets | 0.8 | 3.1 | 0.8 | 3.1 |
191.7 | 187.7 | 24.4 | 21.2 |
174
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(a) Credit risk cont.
2023 | 2022 | |||
| Gross | Gross | |||
| carrying | Loss | carrying | Loss | |
| amount | allowance | amount | allowance | |
| Group | £m | £m | £m | £m |
Not yet due | 40.8 | 0.4 | 37. 3 | – |
Overdue 1 to 30 days | 12.2 | 0.1 | 17.7 | – |
Overdue 31 to 60 days | 5.7 | 0.2 | 3.7 | – |
Overdue 61 to 90 days | 2.0 | 0.1 | 2.5 | – |
Overdue 91 to 180 days | 0.8 | 0.1 | 5.8 | – |
Overdue more than 180 days | 9.8 | 8.3 | 13.5 | 11.8 |
71.3 | 9.2 | 80.5 | 11.8 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Balance at 1 January | 11. 8 | 19.0 | – | – |
On disposal of subsidiaries | – | (0.2) | – | – |
Provided in the year | 0.1 | (0.3) | – | – |
Written off | (1.9) | (8.4) | – | – |
Exchange differences | (0.4) | 1.7 | – | – |
9.6 | 11.8 | – | – |
175
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
| At 31 December 2023 | ||||||||
| Greater | ||||||||
| Carrying | Contractual | Within 1 | 1 – 2 | 2 – 3 | 3 – 4 | 4 – 5 | than | |
| amount | cash flows | year | years | years | years | years | 5 years | |
| Group | £m | £m | £m | £m | £m | £m | £m | £m |
| Non-derivative financial liabilities | ||||||||
Unsecured bank loans and overdrafts | 217.7 | (250.2) | (69.8) | (180.4) | – | – | – | – |
Lease liabilities | 61.2 | (84.3) | (16.8) | (13.5) | (11.7) | (8.1) | (7.0 ) | (27.2) |
Trade and other payables | 113.4 | (113.4) | (113.4) | – | – | – | – | – |
| Derivative financial liabilities | ||||||||
Interest rate swaps used for hedging | (0.2) | (25.4) | (4.2) | (5.0) | (3.8) | (3.6) | (2.2) | (6.6) |
| Outflow on forward exchange contracts | ||||||||
used for hedging | – | (52.1) | (52.1) | – | – | – | – | – |
392.1 | (525.4) | (256.3) | (198.9) | (15.5) | (11.7) | (9.2) | (33.8) | |
| At 31 December 2022 | £m | £m | £m | £m | £m | £m | £m | £m |
| Non-derivative financial liabilities | ||||||||
Unsecured bank loans and overdrafts | 189.2 | (204.7) | (78.7) | (126.0) | – | – | – | – |
Lease liabilities | 52.9 | (57. 4) | (14.2) | (12.0) | (9.4) | (4.9) | (4.1) | (12.8) |
Trade and other payables | 122.9 | (122.9) | (122.9) | – | – | – | – | – |
| Derivative financial liabilities | ||||||||
Interest rate swaps used for hedging | – | (3.0) | (0.6) | (0.6) | (0.6) | (0.6) | (0.6) | – |
| Outflow on forward exchange contracts | ||||||||
used for hedging | (2.6) | (58.6) | (58.6) | – | – | – | – | – |
362.4 | (446.6) | (275.0) | (138.6) | (10.0) | (5.5) | (4.7) | (12.8) |
176
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(b) Liquidity risk cont.
| Greater | ||||||||
| Carrying | Contractual | Within 1 | 1 – 2 | 2 – 3 | 3 – 4 | 4 – 5 | than | |
| amount | cash flows | year | years | years | years | years | 5 years | |
| Company | £m | £m | £m | £m | £m | £m | £m | £m |
| Non-derivative financial liabilities | ||||||||
Unsecured bank loans and overdrafts | 180.3 | (212.8) | (32.4) | (180.4) | – | – | – | – |
Lease liabilities | 1.3 | (3.0) | (0.4) | (0.4) | (0.3) | – | – | (1.9) |
Trade and other payables | 14.5 | (14.5) | (14.5) | – | – | – | – | – |
| Derivative financial liabilities | ||||||||
Interest rate swaps used for hedging | (0.2) | (4.8) | (1.2) | (1.2) | (1.2) | (1.2) | – | – |
| Outflow on forward exchange contracts | ||||||||
used for hedging | – | (52.1) | (52.1) | – | – | – | – | – |
195.9 | (287.2) | (100.6) | (182.0) | (1.5) | (1.2) | – | (1.9) | |
| At 31 December 2022 | £m | £m | £m | £m | £m | £m | £m | £m |
| Non-derivative financial liabilities | ||||||||
Unsecured bank loans and overdrafts | 16 7.1 | (182.6) | (56.6) | (126.0) | – | – | – | – |
Lease liabilities | 1.5 | (1.5) | (0.3) | (0.3) | (0.3) | (0.1) | (0.1) | (0.4) |
Trade and other payables | 17. 4 | (17.4) | (17.4) | – | – | – | – | – |
| Derivative financial liabilities | ||||||||
Interest rate swaps used for hedging | – | (3.0) | (0.6) | (0.6) | (0.6) | (0.6) | (0.6) | – |
| Outflow on forward exchange contracts | ||||||||
used for hedging | (2.6) | (58.6) | (58.6) | – | – | – | – | – |
183.4 | (263.1) | (133.5) | (126.9) | (0.9) | (0.7) | (0.7) | (0.4) |
| 31 December 2023 | ||||||
| USD | EUR | NOK | SGD | AUD | NGN | |
| m | m | m | m | m | m | |
Trade receivables | 55.2 | 1.2 | – | – | 0.2 | 0.2 |
Cash at bank and in hand | 37.8 | 0.5 | 9.7 | 1.8 | 0.1 | 1.1 |
Trade payables | (9.6) | (3.1) | (11.8) | – | – | (42.4) |
Gross balance sheet exposure | 83.4 | (1.4) | (2.1) | 1.8 | 0.3 | (41.1) |
Forecast sales | 184.9 | 12.8 | – | – | – | 631.5 |
Forecast purchases | (61.7) | (15.3) | – | – | – | (8 07. 8 ) |
Gross exposure | 206.6 | (3.9) | (2.1) | 1.8 | 0.3 | (217.4) |
Forward exchange contracts | (66.4) | – | – | – | – | – |
Net exposure | 140.2 | (3.9) | (2.1) | 1.8 | 0.3 | (217.4) |
177
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(c) Foreign exchange risk cont.
| 31 December 2022 | ||||||
| USD | EUR | NOK | SGD | AUD | NGN | |
| m | m | m | m | m | m | |
Trade receivables | 59.6 | 3.0 | 0.1 | 0.1 | 0.1 | 91.7 |
Cash at bank and in hand | 1.4 | (0.8) | – | 1.9 | – | 34.0 |
Trade payables | (7.3) | (4.4) | (11.7) | (0.6) | – | (6.7) |
Gross balance sheet exposure | 53.7 | (2.2) | (11.6) | 1.4 | 0.1 | 119.0 |
Forecast sales | 179.9 | 7.2 | – | – | – | 411.7 |
Forecast purchases | (6 5.1) | (14.5) | (0.5) | – | – | (380.6) |
Gross exposure | 168.5 | (9.5) | (12.1) | 1.4 | 0.1 | 150.1 |
Forward exchange contracts | (81.8) | 0.2 | – | – | – | – |
Net exposure | 86.7 | (9.3) | (12.1) | 1.4 | 0.1 | 150.1 |
2023 | 2022 | |||
| Income | Income | |||
| Equity | statement | Equity | statement | |
| £m | £m | £m | £m | |
US Dollar | (2.6) | (5.0) | (1.9) | (5.1) |
Other | 0.3 | (1.2) | (0.3) | 0.1 |
(2.3) | (6.2) | (2.2) | (5.0) |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Fixed rate instruments | ||||
Financial liabilities | (0.1) | (0.1) | (0.1) | (0.1) |
| Variable rate instruments | ||||
Financial assets | 77.5 | 53.6 | 10.9 | 0.4 |
Financial liabilities | ( 217.7 ) | (189.1) | (180.3) | (130.5) |
(140.2) | (135.5) | (169.4) | (13 0.1) |
| 2023 | 2022 | |
| Income | Income | |
| statement | statement | |
| £m | £m | |
Variable rate instruments | (1.4) | (1.3) |
Interest rate swap | 0.5 | 0.5 |
Cash flow sensitivity | (0.9) | (0.8) |
178
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
2023 | 2022 | ||||
| Carrying | Fair | Carrying | Fair | ||
| value | value | value | value | ||
Group | Note | £m | £m | £m | £m |
| Liabilities carried at amortised cost | |||||
Unsecured bank loans and overdrafts | 27 | ( 217.7 ) | (219.4) | (189.1) | (192.6) |
Trade and other payables | 21 | (113.4) | (113.4) | (122.9) | (122.9) |
Leases | 27 | (61.2) | (61.2) | (52.9) | (52.9) |
Preference shares | 30 | (0.1) | (0.1) | (0.1) | (0.1) |
(392.4) | (3 94.1) | (365.0) | (368.5) | ||
| Company | |||||
| Liabilities carried at amortised cost | |||||
Unsecured bank loans and overdrafts | 27 | (180.3) | (181.8) | (167.1) | (170.5) |
Trade and other payables | 21 | (14.5) | (14.5) | (17.4) | (17.4) |
Leases | 27 | (1.3) | (1.3) | (1.5) | (1.5) |
Preference shares | 30 | (0.1) | (0.1) | (0.1) | (0.1) |
(196.2) | (197.7 ) | (186.1) | (189.5) |
Level 2 | Level 3 | |||
| 2023 | 2022 | 2023 | 2022 | |
| Group | £m | £m | £m | £m |
| Financial assets measured at fair value | ||||
Forward exchange contracts – cash flow hedges | 0.8 | 3.1 | – | – |
Interest rate swaps – cash flow hedges | 2.3 | 3.8 | – | – |
Call option | – | – | – | 0.8 |
3.1 | 6.9 | – | 0.8 | |
| Financial liabilities measured at fair value | ||||
Forward exchange contracts – cash flow hedges | – | (2.6) | – | – |
Interest rate swaps – cash flow hedges | (0.2) | – | – | – |
(0.2) | (2.6) | – | – | |
2.9 | 4.3 | – | 0.8 |
179
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(e) Fair values cont.
Fair value hierarchy cont.
| Level 2 | ||
| 2023 | 2022 | |
| Company | £m | £m |
| Financial assets measured at fair value | ||
Forward exchange contracts – cash flow hedges | 0.8 | 3.1 |
Interest rate swaps – cash flow hedges | 2.3 | 3.8 |
3.1 | 6.9 | |
| Financial liabilities measured at fair value | ||
Forward exchange contracts – cash flow hedges | – | (2.6) |
Interest rate swaps – cash flow hedges | (0.2) | – |
(0.2) | (2.6) | |
2.9 | 4.3 |
| Call option | |
| 2023 | |
| £m | |
Balance at 1 January 2023 | 0.8 |
Expensed to profit | (0.8) |
Balance at 31 December 2023 | – |
180
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(e) Fair values cont.
| Exchange | Fair value | ||
| Maturity | rate | £m | |
| Sell | |||
US Dollar $66.4m | January 2024 – December 2024 | 1.26 | 0.8 |
| Exchange | Fair value | ||
| Maturity | rate | £m | |
| Sell | |||
US Dollar $81.8m | January 2023 – December 2023 | 1.23 | 0.5 |
| Buy | |||
Euro €0.2m | January 2023 – December 2023 | 1.10 | – |
Fair value | Fair value | |||||
| 2023 | 2022 | 2023 | 2022 | |||
| £m | £m | Maturity | Fixed rate % | £m | £m | |
Sterling interest rate swaps | 50.0 | 50.0 | 29 October 2027 | 2.1% – 3.1% | 2.3 | 3.8 |
| 21 November 2032 | ||||||
USD interest rate swaps | 26.9 | – | 16 January 2033 | 3.65%–3.70% | (0.2) | – |
181
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| Current assets | £m | £m | £m | £m |
Foreign currency forwards – cash flow hedges | 0.8 | 3.1 | 0.8 | 3.1 |
Interest rate swaps – cash flow hedges | 2.3 | 3.8 | 2.3 | 3.8 |
Total current derivative financial instrument assets | 3.1 | 6.9 | 3.1 | 6.9 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| Current liabilities | £m | £m | £m | £m |
Foreign currency forwards – cash flow hedges | – | (2.6) | – | (2.6) |
Interest rate swaps – cash flow hedges | (0.2) | – | (0.2) | – |
Total current derivative financial instrument liabilities | (0.2) | (2.6) | (0.2) | (2.6) |
| £1 Cumulative | ||||
| 25p Ordinary shares | Preference shares | |||
In millions of shares | 2023 | 2022 | 2023 | 2022 |
In issue at 1 January and at 31 December | 50.4 | 50.4 | 0.1 | 0.1 |
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Issued share capital | 12.6 | 12.6 | 0.1 | 0.1 |
| 2023 | 2022 | |||
| Treasury shares | £m | £m | ||
12,519 | (2022: | 47,855) ordinary shares of 25p | 0.5 | 0.6 |
182
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
Group | Company | ||
| 2023 | 2022 | 2023 | 2022 |
| £m | £m | £m | £m |
16.4 | 6.0 | – | – |
183
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
| Services to | Sales to | Purchases | Amounts | Amounts | ||
| related | related | from related | owed by | owed to | ||
| parties | parties | parties | parties | parties | ||
| £m | £m | £m | £m | £m | ||
FCM businesses | 2023 | – | 0.8 | 0.6 | 0.3 | – |
2022 | – | 0.5 | 0.5 | 0.2 | 0.1 | |
First Response Marine | 2023 | – | – | – | 1.5 | – |
2022 | – | – | – | 1.2 | – | |
JFD Domeyer | 2023 | – | 0.6 | – | 0.2 | – |
2022 | – | 0.3 | – | – | – | |
Pleat Mud Coolers AS | 2023 | – | 0.4 | 0.5 | 0.6 | 0.3 |
2022 | – | 0.4 | 0.2 | – | – | |
Wuhu Divex Diving Systems | 2023 | – | – | – | – | – |
2022 | – | – | – | 0.1 | – | |
Mil Vehicles | 2023 | – | – | 1.7 | – | 0.1 |
2022 | – | – | 3.0 | – | – | |
JF Technologies LLC | 2023 | – | – | – | – | – |
2022 | – | – | – | – | – |
184
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
32. RELATED PARTY TRANSACTIONS CONT.
Transactions with related parties cont.
185
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.1 Basis of preparation of the consolidated financial statements cont.
186
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.2 Foreign currency cont.
(i) Foreign currency transactions in functional currency cont.
187
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.3 Financial instruments cont.
(a) Financial assets cont.
188
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.3 Financial instruments cont.
189
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
190
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.8 Taxation cont.
191
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.9 Leases cont.
192
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.11 Share-based payments cont.
193
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.14 Revenue recognition cont.
194
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS CONT.
33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.14 Revenue recognition cont.
Revenue and profit recognition cont.
34. ACCOUNTING JUDGEMENTS AND ESTIMATES
In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application
of the Group’s accounting policies and the reported amount of assets, liabilities, income and expenses. The outcome may differ from these
estimates.
Estimates and underlying assumptions are reviewed and revised on an ongoing basis.
Information about estimates and judgements made in applying accounting policies that have the most significant effects on the amounts
recognised in the consolidated financial statements is included below:
Major sources of estimation uncertainty
Impairment of goodwill
Goodwill, which is set out in Note 12, of £78.3m (2022: £116.3m) is tested annually for any permanent impairment in accordance with the
accounting policy in Note 33.6. The value in use of the Group’s cash generating units (CGU) requires assumptions about the five-year revenue
growth rate, terminal value growth rate and discount rate. Inherent uncertainty involved in forecasting and discounting future cash flows is a key
area of estimation. The carrying value of goodwill is compared to its recoverable amount which represents the higher of its value in use and fair
value less costs of disposal. The assessment also includes sensitivity analysis to identify the range of outcomes and the validity of underlying
assumptions. There is particular estimation uncertainty with regards to recoverability of the goodwill in the JFD cash generating unit where
reasonably possible changes to key assumptions could change the value of impairment.
Defined benefit pensions
Pension assumptions are used to determine the amount of defined benefit obligations including future rates of inflation, discount rates and
mortality of members (see Note 23). Valuation of pension assets is based on fair value which is an estimate, however the fair value of pension
assets is not considered a major source of estimation uncertainty.
Other estimates and judgements
Set out below are certain other areas of estimation or judgement, however these are not considered to meet the definitions set out in IAS 1.122
and IAS 1.125.
Other estimates
Impairment of Parent Company investments
Parent Company investments in Note 17 comprising shares totalling £268.7m, are tested annually for impairment where an indicator of
impairment exists. The Company estimates recoverable amount using value in use calculations which require assumptions over the five-year
revenue growth rate, terminal value growth rate and discount rate. Inherent uncertainty involved in forecasting and discounting future cash flows
is therefore an area of estimation uncertainty. The carrying value of the investment is compared to its recoverable amount which represents the
higher of its value in use and fair value less costs of disposal. The assessment also includes sensitivity analysis to identify the range of outcomes
and the validity of underlying assumptions. Subsequent to the material impairment recognised during the year, the estimation uncertainty is
significantly reduced and therefore this is not considered to be a major source of estimation uncertainty in accordance with IAS 1.125.
195
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
34. ACCOUNTING JUDGEMENTS AND ESTIMATES CONT.
Other estimates cont.
Revenue
Revenue is set out in Notes 3 and 33.14. Revenue is recognised as performance obligations are satisfied as control of the goods and services are
transferred to the customer. The timing of the performance obligations will vary depending on the terms of the sales agreement, the evaluation
of the specific risks associated with the performance of the contract (for example design, construction and testing) or generally accepted
practice where there are no specific arrangements in the contract. Areas of estimation relate to construction contract accounting and specifically
estimating the stage of completion and forecast outturn of the contract which are reliant on the knowledge and expertise of project managers,
engineers and other professionals.
Foreign offset agreements
As described in Notes 22 and 31, the Group has entered into foreign offset agreements as part of securing some international business. These
agreements contain penalties which would be incurred if the offset obligation is not delivered. There were estimates and judgements in arriving
at the amounts provided. This included judgement in assessing the accounting treatment of the contracts whereby the offset is treated as a
levy recognised within cost of sales. Estimates were applied in calculating the offset provisions and the contingent liability to meet the offset
requirements in country.
Income taxes
Taxation is set out in Notes 8, 9 and 33.8. The Group is subject to income taxes in several jurisdictions. Judgement is required in determining the
provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. The Group recognises liabilities for anticipated tax risk issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such difference will impact the income tax
and deferred tax provisions in the period in which such determination is made.
The Group has entered the UK tonnage tax regime under which tax on its ship owning and operating activities is based on the net tonnage of
vessels operated. Income and profits outside this regime are taxed under normal tax rules. This means that it is necessary to make estimates of
the allocation of some income and expenses between tonnage and non-tonnage tax activities. These estimates are subject to agreement with the
relevant tax authorities and may be revised in future periods.
Tax includes a credit of £10.7m (2022: £1.3m charge), which represents deferred tax recognised on the timing differences created following the
impairment of dive support vessels during the year ended 31 December 2020. The associated deferred tax asset will be utilised gradually over
future accounting periods as the tax value of the vessels is amortised in line with rates set by HM Revenue & Customs.
Other judgements
Assets held for sale and discontinued operations
Judgement was taken that the carrying value of a non-core business (2022: Nuclear) would be recovered through a sale rather than continuing
use in accordance with IFRS 5 paragraphs 6 to 8 criteria. Consequently, the assets and liabilities of the business have been classified as held for
sale – see Note 20.
The results of the nuclear business, which was sold in March 2023, have been presented as discontinued operations in the consolidated income
statement. The classification as discontinued operations was a judgement based on management’s view of IFRS 5 paragraph 32 that the
disposal group classified as held for sale represented a separate major line of business due to its size relative to Group revenue and the nature of
operations.
During 2023, the Group announced its intention to cease operations of Subtech Europe, a business within the Energy Division. Management
does not believe that the closure of Subtech Europe meets the definition of a discontinued operation under IFRS 5 as it does not represent a
separate major line of business, and accordingly, the results of Subtech Europe have been included within continuing operations.
Defined benefit pensions
The Company considers it has a right to a refund of pension surplus assuming the gradual settlement of the plan liabilities over time until all
members have left (see Note 23 for further details) and therefore recognises a pension surplus for the Shore Staff scheme in accordance with
IFRIC 14.
35. POST BALANCE SHEET EVENTS
On 22 March 2024, the Group agreed to sell its RMSpumptools business to ChampionX UK Limited, a wholly-owned subsidiary of ChampionX
Corporation. RMSpumptools did not meet the highly probable criteria to be recognised as a held for sale business as at 31 December 2023,
primarily due to uncertainty associated with the disposal plan.
196
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
SUBSIDIARIES AND ASSOCIATED UNDERTAKINGS
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Energy
Buchan Technical
Services Limited
Barrow-in-Furness
1
100%
Deep Sea Operation &
Maintenance Co. Ltd
Al Khobar City, PO Box
2716, Al Olaya, 34447,
Saudi Arabia
100%
EDS HV Group Limited Barrow-in-Furness
1
100%
EDS HV Management
Limited
Barrow-in-Furness
1
100%
Electricity Distribution
Services Limited
Barrow-in-Furness
1
100%
Hughes Marine
Engineering Limited
Barrow-in-Furness
1
100%
Hughes Sub Surface
Engineering Limited
Barrow-in-Furness
1
100%
James Fisher Asset
Information Services
Limited
Barrow-in-Furness
1
100%
James Fisher Marine
Services Limited
Barrow-in-Furness
1
100%
James Fisher Marine
Services Limited –
Taiwan branch
Taiwan
14
100%
James Fisher Marine
Services Malaysia Ltd
Level 1, Lot 7, Block F,
Sanguking Commercial
Building Jalan Patau-Patau,
87000 Labuan FT, Malaysia
100%
James Fisher Marine
Services Middle East
Limited FZCO
PO Box 371072, Dubai,
United Arab Emirates
100%
James Fisher Marine
Services Limited FZCO
– Dubai branch
Office 9, Floor 2,
Mubarak Group Building,
Dubai Maritime City,
Dubai-UAE
100%
James Fisher Maritime
Deutschland GmbH
Stadthausbrucke 8, 20355
Hamburg, Germany
100%
James Fisher MFE
Limited
Barrow-in-Furness
1
100%
James Fisher Offshore
Limited
Oldmeldrum
2
100%*
James Fisher Offshore
Malaysia Sdn Bhd
Room A, Ground Floor,
Lot 7, Block F,
Saguking Commercial
Building Jalan Patau-Patau,
87000 Labuan FT, Malaysia
100%
James Fisher
Personnel S.A. de C.V.
Ciudad de Mexico, D.F.,
Mexico
13
100%
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
James Fisher
Renouvelables
3 rue de France Comte,
CS50311, Hauts de
Quimpcanpoix, 50103,
Cherbourg-en-Contentin,
Cherbourg-Octeville, France
100%
James Fisher Rumic
Limited
Barrow-in-Furness
1
100%*
James Fisher
Subsea Excavation
Incorporated
6421 Cunningham Road,
Houston, Harris County,
Texas, 77041-4713
100%
James Fisher Subsea
Excavation Mexico
S.A. de C.V.
Ciudad de Mexico, D.F.,
Mexico
13
100%
James Fisher Subsea
Excavation Pte Limited
133 Cecil Street, #16-
01, Keck Seng Tower,
Singapore, 069535
100%
James Fisher Taiwan
Co., Ltd
Taiwan
14
100%
JCM Scotload Ltd Barrow-in-Furness
1
100%
JF Denmark –
Denmark branch
Jenny Kammersgaards,
Vei 5, 2.3 Horsens 8700,
Demark
100%
Namibia Subtech
Diving and Marine
(Proprietary) Limited
Shop 48, Second Floor,
Old Power Station
Complex, Armstrong Street,
Windhoek, Namibia
100%
RMSPumptools FZE 1-153, THUB, Dubai Silicon
Oasis, Dubai, United Arab
Emirates
100%
RMSPumptools
Limited
Barrow-in-Furness
1
100%
RMSPumptools Saudi
Industrial Company
2397, Unit Number 8, al
Khobar, 34632-6282, Saudi
Arabia
100%
Rotos 360 Limited Barrow-in-Furness
1
100%
Scan Tech AS Stavanger
5
100%
Scan Tech Personell
AS
Stavanger
5
100%
Scan Tech Produkt
Personell AS
Stavanger
5
100%
Scantech Offshore
do Brasil Comercio E
Servicos Ltda
R 01 223, Lote 146 Quadra
02, Balneario das Garcas,
Rio das Ostras, 28.898-
268, Brazil
100%
Scantech Offshore
Limited
Barrow-in-Furness
1
100%*
Subsidiary undertakings
197
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Scantech Offshore
Pty Ltd
Henderson, Australia
10
100%
Servicos Maritimos
Continental S.A.
Rio de Janeiro, Brazil
9
90%
Strainstall International
for Project Engineering
LLC
Blg 3141, Street Anas Bin
Malik, 8292, Al Malqa Dist.
Riyadh, Saudi Arabia
100%
Strainstall Malaysia
Sdn Bhd
Ground Floor, 8, Lorong
Universiti B, Section 16,
46200 Petaling Jaya
Selangor Darul Ehsan,
Malaysia
100%
Strainstall Singapore
Pte Ltd
25 North Bridge Road,
Level 7, Singapore, 179104
100%
Subsea Engenuity
Limited
Oldmeldrum
2
100%
Subtech (Pty) Ltd Briardene, South Africa
8
100%
Subtech (Pty) Ltd –
Mozambique branch
Rua da Educacao, No.38,
Matola, Mozambique
100%
Subtech Diving &
Marine Tanzania
Limited
The Slipway Road, Msasani
Peninsula, Dar Es Salaam,
United Republic of Tanzania
100%
Subtech Marine (Pty)
Limited
PO Box 90757, Shop
48, Old Power Station
Complex, Armstrong Street,
Windhoek, Namibia
70%
Subtech Marine R2S
Offshore LLC
Floor 1, Building 81, Zone
36, Street 362, Al Jazira Al
Arabiya Street, Al Messila
Area, Doha, Qatar
49%
Subtech Middle East
Saudi Company
Office 102, Al Jazira
Building, Al Khobar, Saudi
Arabia
100%
Subtech Norte Lda Rua de Se no 114, Distrito
Urbano 1, Bairro Central,
Maputo City, Mozambique
100%
Subtech Offshore
(GBL II)
Ocra (Mauritius) Limited,
Level 2, Max City Building,
Remy Ollier Street, Port
Louis, Mauritius
100%
Subtech South Africa
(Pty) Ltd
Briardene, South Africa
8
49%
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Maritime Transport
Cattedown Wharves
Limited
Barrow-in-Furness
1
100%
Fender Care Limited Barrow-in-Furness
1
100%
Fender Care Marine
(Asia Pacific) Pte Ltd
Singapore
6
100%
Fender Care Marine
(Gibraltar) Limited
28 Irish Town, Gibraltar 100%
Fender Care Marine
Ltd
Barrow-in-Furness
1
100%
Fender Care Marine
Ltd, Agencia Chile –
Chile branch
El Trovador 4280, Apt 1205,
Las Condes, Santiago, 253-
389, Chile
100%
Fender Care Marine
Products (Asia Pacific)
Pte Limited
Singapore
6
100%
Fender Care Marine
Sohar LLC
Al Batinah Region, PO Box
37, Sohar, 327
70%
Fendercare Australia
Pty Ltd
8D Sparks Road,
Henderson WA 6166,
Australia
100%
Fendercare Servicos
Marinhos do Brasil
Ltda
Avenida Feliciano Sodre
325, Centro, Niteroi, Rio De
Janeiro, CEP: 24030-012,
Brazil
100%
F.T.Everard Shipping
Limited
Barrow-in-Furness
1
100%
F.T.Everard & Sons
Limited
Barrow-in-Furness
1
100%*
James Fisher (Crewing
Services) Limited
Barrow-in-Furness
1
100%*
James Fisher (Shipping
Services) Limited
Barrow-in-Furness
1
100%*
James Fisher Crewing
(CY) Limited
115 Griva Digeni, Trident
Centre, Limassol, 3101,
Cyprus
100%
James Fisher Everard
Limited
Barrow-in-Furness
1
100%
James Fisher Maritime
Limited
Karaiskaki, 13, 3032,
Limassol, Cyprus
100%
Martek Marine Limited Barrow-in-Furness
1
100%
Martek-Marine (Asia
Pacific) Pte Ltd
298 Tiong Bahru Road,
#05-01, Central Plaza,
Singapore, 168730
100%
Scottish Navigation
Company Limited
Oldmeldrum
2
100%
198
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
SUBSIDIARIES AND ASSOCIATED UNDERTAKINGS CONT.
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Defence
Cowan Manufacturing
Pty Limited
BDO Tax (WA) Pty Ltd,
‘BDO’, 38 Station Street,
Subiaco, WA6008, Australia
100%
Divex Asia Pacific Pty
Ltd
Bibra Lake, Australia
12
100%
Divex FZE PO Box 261749, Jebel Ali
Free Zone, Dubai, United
Arab Emirates
100%
Divex Limited Westhill
3
100%
James Fisher Defence
Limited
Barrow-in-Furness
1
100%
James Fisher Defence
North America Limited
Suite 808, 1220 North
Market Street, Wilmington
DE 19801, United States
100%
James Fisher
Singapore Pte Ltd
137 Telok Ayer Street, #05-
02, Singapore, 068602
100%
JFD Australia Pty Ltd c/o BDO, Mia Yellagonga,
Tower 22, Level 9, 5 Spring
Street, Perth, WA, 6000
100%
JFD Limited Westhill
3
100%
JFD Ortega B.V. Vliegveldstraat 100,
B515, Technology Base,
Enschede, Netherlands
100%
JFD Singapore Pte Ltd Singapore, 508929
11
100%
JFD South Africa (Pty)
Limited
c/o Mazars, Mazars
House, Rialto Road, Grand
Moorings Precinct, Century
City, Cape Town, SA 7441,
South Africa
100%
JFD Sweden AB Rindovagen, Rindo Vastra,
185 41 Vaxholm, Sweden
100%
Maritime Engineers
Pty Ltd
Henderson, Australia
10
100%
Holding Companies
Fender Care Marine
Solutions Limited
Barrow-in-Furness
1
100%
James Fisher
(Aberdeen) Limited
Barrow-in-Furness
1
100%*
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
James Fisher and Sons
Nigeria Limited
2 Idowu Taylor Street,
Victoria Island, Lagos,
Nigeria
99%*
James Fisher Holdings
Limited
Barrow-in-Furness¹ 100%*
James Fisher Holdings
UK Limited
Barrow-in-Furness
1
100%*
James Fisher Hong
Kong Limited
Level 17, Silvercord Tower
2, 30 Canton Road, Tsim
Sha Tsui, Kowloon, Hong
Kong
100%
James Fisher
Properties Limited
Oldmeldrum
2
100%
James Fisher
Properties Two Limited
Barrow-in-Furness
1
100%*
James Fisher Servicos
Empresariais Ltda
Rua 01 No 223, Quadra 02,
Lote 146-part, Balneario
das Garcas, Brazil
100%
James Fisher Subtech
Group Limited
Barrow-in-Furness
1
100%*
James Fisher
Tankships Holdings
Limited
Barrow-in-Furness
1
100%*
JF Australia Holding
Pty Ltd
Bibra Lake, Australia
12
100%
JF Overseas Ghana
Limited
The Octogon Building, 7th
Floor, Suite B701, Accra
Central, Accra, Ghana
100%
JF Overseas Limited Barrow-in-Furness
1
100%*
JF Singapore Holdings
PTE Ltd
137 Telok Ayer Street, #05-
02, Singapore 068602
100%
Martek Holdings
Limited
Barrow-in-Furness
1
100%
Onesimus Dorey
(Shipowners) Ltd
St Peter Port
4
100%*
Subtech Group
Holdings (Pty) Ltd
Briardene, South Africa
8
100%
199
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Energy
Eurotestconsult
Limited
County Laois, Ireland
7
50%
Eurotestconsult UK
Limited
Barrow-in-Furness
1
50%
James Fisher (Angola)
Limitada
67 Rua Damiao de Gois,
Alvalade, Borough, District
of Maianga, Ingombota
Municipality, Angola
49%*
James Fisher Angola
UK Limited
Barrow-in-Furness
1
50%
Pleat MUD Coolers AS Stavanger
5
50.1%
Strainstall Laboratories
WLL
PO Box 2255, Office No.70,
Barwa Commercial Avenue,
Doha, Qatar
49%**
Strainstall Middle East
LLC
PO Box 111007Jebel Ali
Industrial Area 1, Dubai,
United Arab Emirates
49%**
Strainstall Testing Lab
LLC
PO Box 62579, Abu Dhabi,
United Arab Emirates
49%**
Subtech Offshore
Services Nigeria
Limited
Plot 15, Block 110, Henry
Ojogho Crescent, Off Road
69, Lekki Phase 1, Lagos,
Nigeria
100%
Maritime Transport
FC Viking Sdn.Bhd Unit 30-01, Level 30,
Tower A, Vertical Business
Suite, Avenue 3, Bangsar
South, No.8 Jalan Kerinchi,
Kuala Lumpur, Wilayah
Perseketuan, 59200, Kuala
Lumpur
49%
Fender Care Marine
LLC
Fujairah Port, PO Box
5198, Fujairah, United Arab
Emirates
49%**
Fender Care Marine SA
(Pty) Ltd
Unit 4, Thembani House,
41 Brand Road, Glenwood,
Durban, 4001, South Africa
49%**
Fender Care Marine
Services LLC
G013, GH-1, Industrial City
of Abu Dhabi (ICAD-1),
Mussafeh, PO Box 45628,
Abu Dhabi, United Arab
Emirates
49%**
Fender Care Middle
East LLC
Plot 146/16, Emirates
Industrial City, Sajja
Industrial Area, PO Box
25896, Sharjah, United
Arab Emirates
49%**
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Fender Care Omega
(Middle East) FZC
E-LOB Office No.
E-69G-20, PO Box 51602,
Hamriyah Free Zone –
Sharjah, United Arab
Emirates
50%
Fendercare Marine
Ghana Limited
11 Aduemi Close, North
Kaneshie, Accra, Ghana
50%
Fendercare Marine
Omega India Private
Limited
JA 1104 –1106, DLF Tower
–A, Jasole District Centre,
New Delhi, 11044, India
50%
James Fisher Ghana
Limited
HNO No.1, East Legon,
Telley, Tesa Link, Otsokrikri
Street, East Legon, Accra,
Ghana
49%
James Fisher Nigeria
Limited
Architects Place, 2 Idowu
Taylor Street, Victoria Island,
Lagos, Nigeria
100%
Defence
First Response Marine
Pte Ltd
16 Benoi Road, 629889,
Singapore
50%
James Fisher
Technologies LLC
5821 Langley Avenue,
Loveland, Colorado, 80538,
USA
49%
JFD Domeyer GmbH Konsul-Smidt-Str. 15,
28217, Bremen, Germany
50%
MIL Vehicles &
Technologies Private
Limited
1517, Devika Tower, 6
Nehru Place, New Delhi,
South Delhi, India, 110019
49%
Wuhu Divex Diving
System Limited
No.58 Yongchang Road,
Jiujiang District, Wuhu City,
Anhui Province, PR China
49%
1 Fisher House, Michaelson Road, Barrow-in-Furness, Cumbria, LA14 1HR
2 North Meadows, Oldmeldrum, Aberdeenshire, AB51 0GQ
3 JFD, Westhill Industrial Estate, Enterprise Drive, Westhill, Aberdeen, AB32 6TQ
4 4th Floor, West Wing, Trafalgar Court, Admiral Park, St Peter Port, Guernsey, GY1 2JA
5 Finnestadsvingen 23, 4029 Stavanger, Norway
6 39 Tuas West Avenue, Peck Tiong Choon Building, Singapore 638442
7 Unit D, Zone 5, Clonminam Business Park, Portlaoise, County Laois, Ireland
8 Unit 3, 11 Travertine Crescent, Briardene, Durban North, KwaZulu-Natal, 4051,
South Africa
9 Rua Tenente Celio, No.150, Bairro Granja Caveleiros, Macae, State of Rio de Janeiro,
27.930-120, Brazil
10 8A Sparks Road, Henderson, WA 6166, Australia
11 19 Loyang Lane, Singapore 508929
12 54 Bushland Ridge, Bibra Lake WA 6163, Australia
13 Gabriel Mancera 1041 Del Valle, Benito Juarez, 03100, Ciudad de Mexico, D.F., Mexico
14 8F, No.367 Fuxing N.Rd, Songshan District, Taipei City, 105401, Taiwan
* Held by the Parent Company (all other subsidiaries are held by an intermediate subsidiary)
** Consolidated as subsidiary undertakings
Associated undertakings and significant holdings in undertakings other than subsidiary undertakings
200
James Fisher and Sons plc – Annual Report and Accounts 2023
Financial Statements
GROUP FINANCIAL RECORD
FOR THE FIVE YEARS ENDED 31 DECEMBER
2023
£m
2022
£m
2021
£m
2020
£m
Restated*
2019
£m
Restated*
Revenue
Energy
1,2
266.5 242.6 222.9 222.9 272.2
Defence 72.5 68.2 81.5 83.2 106.3
Maritime Transport 15 7. 2 167.3 138.0 164.9 192.2
Continuing operations 496.2 478.1 442.4 471.0 570.7
Underlying operating profit
Energy
3
15.7 13.9 7.7 (1.8) 15.0
Defence 1.5 (0.3) 9.7 13.2 18.2
Maritime Transport 23.3 18.7 13.5 31.4 36.9
Corporate costs (10.9) (5.9) (2.8) (2.8) (2.8)
Continuing operations 29.6 26.4 28.1 40.0 67. 3
From 1 January 2023, the Group has been re-organised into the three operating segments of Energy, Defence and Maritime Transport. The comparative segmental information for the prior years
has been restated accordingly. See Note 3 to the financial statements for further details.
* 2019 and 2020 results are restated to exclude a business classified as discontinued operations - see Note 5.
Notes:
1 Energy includes the former Marine Support (without Fendercare) and Offshore Oil Divisions. Maritime Transport includes the former Tankships Division and Fendercare. James Fisher Defence
is the only Component of the Defence Division and used to be reported within the Specialist Technical Division together with James Fisher Nuclear (“JFN”) business. JFN was sold in March
2023.
2 Sales relating to divestments (Mimic, Prolec, Strainstall, Testing Services, NDT):
2022
£m
2021
£m
2020
£m
2019
£m
14.1 16 .1 18.9 25.4
3 Operating Profit/(loss) relating to divestments (Mimic, Prolec, Strainstall, Testing Services, NDT):
2022
£m
2021
£m
2020
£m
2019
£m
2.3 1.1 (1.0) 0.2
James Fisher and Sons plc – Annual Report and Accounts 2023
Strategic Report Governance Financial Statements 201
INVESTOR INFORMATION
Registered office
Incorporated in England under
Company no. 211475
www.james-fisher.com
Registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Auditor
KPMG LLP
1 St Peters Square
Manchester M2 3AE
Brokers
Investec Bank (UK) Limited
30 Gresham Street
London EC2V 7QP
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
Disclaimer
This Annual Report has been prepared for the members of the Company only. The Company, its Directors, employees and agents do not accept
or assume responsibility to any other person in connection with this document and any such responsibility or liability is expressly disclaimed.
This Annual Report contains certain forward-looking statements that are subject to future events including, amongst other matters, the economic
and business circumstances occurring from time to time in the countries and markets in which the Group operates and the availability of financing
to the Group.
As such the forward-looking statements involve risk and uncertainty. Accordingly, whilst it is believed the expectations reflected in these
statements are reasonable at the date of publication of this Annual Report, they may be affected by a wide range of matters which could cause
actual results to differ materially from those anticipated. The forward-looking statements will not be updated during the year. Nothing in this
Annual Report should be construed as a profit forecast.
Design and Production
www.carrkamasa.co.uk
James Fisher and Sons plc
T: +44 (0) 1229 615 400
F: +44 (0) 1229 836 761
E: enquiries@james-fisher.com
W: www.james-fisher.com