James Fisher H1 2025: margins up on a like-for-like basis, Defence order book surges
James Fisher and Sons has delivered a steady first half, showing the nuts-and-bolts of its turnaround are working beneath the surface. Reported numbers look softer because of 2024 disposals, but on a like-for-like basis the Group lifted margins, trimmed interest costs and beefed up Defence’s order book. Management says trading to the end of August is in line with expectations and full-year guidance is unchanged, with a typical second-half weighting.
Key numbers investors should know
| Metric | H1 2025 | YoY | Notes |
|---|---|---|---|
| Revenue | £191.9m | (13.4%) reported | Like-for-like (ex disposals) down 0.6% |
| Underlying operating profit (UOP) | £11.1m | (33.9%) reported | Like-for-like up 14.4% |
| Underlying operating margin | 5.8% | (180 bps) reported | Like-for-like +80 bps to 5.8% |
| Underlying profit before tax | £4.5m | +4.7% | Helped by lower net interest costs |
| Reported operating profit | £4.8m | (62.2%) | Higher restructuring and one-off legal costs |
| Net debt (covenant basis) | £72.1m | (50.2% vs H1 2024) | Net Debt: EBITDA 1.6x |
| ROCE (like-for-like) | 5.1% | +20 bps | Group ROCE on underlying basis 4.8% |
| Defence order book | £315.1m | +45.2% | Momentum building into H2 |
| Cash from operating activities | £31.2m | +£3.2m | Working capital inflow £7.1m |
| Basic EPS | (4.8)p | vs (1.7)p | Underlying EPS 0.8p (H1 2024: 6.4p) |
Quick jargon buster: “Underlying” strips out one-off costs to show the core run-rate. “Covenant basis” net debt is the definition used for banking tests. ROCE is return on capital employed – a measure of how efficiently the Group earns on its asset base.
What’s really changed: like-for-like progress despite disposals
The headline revenue decline is almost entirely the effect of selling RMSpumptools and Martek in 2024. Excluding those disposals, revenue was essentially flat at £191.9m, while underlying operating profit rose 14.4% and margin widened by 80 bps to 5.8%. That is the structural improvement the turnaround is targeting.
Below the line, non-underlying costs totalled £6.3m, mainly restructuring and professional fees, plus a small impairment in Scantech Norway following portfolio realignment. Finance charges fell 46.4% to £6.7m thanks to deleveraging in 2024 and improved facility terms.
Divisional performance: Energy, Defence, Maritime Transport
Energy: margins rebuilt, decommissioning turns profitable
Revenue was £85.8m and, excluding disposals, down 1.8% after the planned wind-down of a Mozambique contract that reduced revenue by £6.8m early in the year. Strip that out and the rest of the Energy book grew 6.9%, with strength in Norway, Brazil diving operations and decommissioning, which saw demand up 15.0% to £11.7m.
Underlying operating profit reached £9.7m, up 16.9% like-for-like, and margin improved 180 bps to 11.3%. The Bubble Curtain business – noise attenuation for offshore wind – continued to win work in the US and Asia. The division also launched the world’s first monopile removal system with an offshore wind developer, extending its decommissioning know-how into renewables. IRM was quieter than expected, with revenue down 12.9% to £22.8m, particularly in Africa and the Middle East.
Defence: turning the corner with a bigger pipeline
Revenue edged up 3.0% to £37.6m and the division moved from a £0.4m underlying loss to a £0.7m profit. The big story is the order book – £315.1m at June, up 45.2% year-on-year – reflecting a new long-term special operations vehicles contract and wins across submarine platforms and defence diving. A strategic collaboration with Saab was signed, James Fisher Japan was launched, and the US business entered a Special Security Agreement, securing Foreign Comparative Testing tasks and the largest combat diving rebreather order in over five years. A £12.5m UKEF General Export Facility was put in place, with £4.8m utilised by period end.
Maritime Transport: Tankships strong, Fendercare softer
Revenue fell 8.4% to £68.5m due to the 2024 Martek disposal and weaker LNG ship-to-ship activity in Fendercare. Underlying operating profit was £6.9m, down 15.9%. The bright spot remains Tankships – including Cattedown – where revenue rose 5.9%, utilisation stayed high at 90%, and contracted rates held firm. The fleet modernisation is on track, with four sub-intermediate tankers due for delivery in 2026-2027. Fendercare opened a new base in Uruguay to build its Latin American presence, while Brazil remained resilient thanks to a favourable customer mix.
Cash, leverage and liquidity
Cash from operations was £31.2m, aided by stronger debtor collections. Capital expenditure was £16.3m and development spend £2.9m, focused on compressors, lifting equipment, diving systems and vessel upkeep. Net borrowings including leases were £142.7m, reflecting three newly leased vessels in Maritime Transport, but on a covenant basis net debt was £72.1m with leverage of 1.6x. That sits just above the 1.0-1.5x target range due to front-loaded investment in Energy and Defence.
Committed facilities stood at £94.0m with £10.0m undrawn and liquidity of £25.0m against a £20.0m internal minimum. Interest cover was 6.8x versus a 4.5x covenant requirement. No interim dividend was declared, though the Board remains committed to reintroducing a sustainable policy at the right time.
Guidance and technical pointers
- Outlook unchanged; H2 performance weighting expected and trading to August was in line with management expectations.
- 2025 capex (including development) guided to around £35.0m, with a lower H2 weighting.
- Underlying effective tax rate for 2025 expected around 29.0% (note H1 underlying ETR was 75.6% due to withholding taxes and profit mix).
- Effective interest rate on borrowings c.8.5% for 2025; floating rates expected to ease in H2.
My take: why this print matters
- Evidence of structural improvement: like-for-like UOP up 14.4% and margin +80 bps to 5.8% show the “focus, simplify, deliver” mantra is feeding through, especially in Energy where margins hit 11.3%.
- Defence momentum building: the £315.1m order book – up 45.2% – gives visibility and supports the thesis that Defence can return to being a growth engine.
- Balance sheet OK, investing for growth: covenant leverage at 1.6x is reasonable and interest cover is healthy, even after taking on three leased vessels.
Set against that:
- Reported results still messy: non-underlying costs of £6.3m and a basic loss per share of 4.8p cloud the picture. Underlying EPS at 0.8p is low, amplified by a higher tax charge and more shares in issue.
- Fendercare remains soft: LNG ship-to-ship volumes are subdued and vessel costs are elevated. Management has action plans, but recovery timing is uncertain.
- Tax friction: H1’s 75.6% underlying effective tax rate won’t repeat if guidance holds, but withholding taxes and profit mix can still swing the P&L.
What could move the shares next
- Conversion of Defence order book into revenue and margins in H2 and 2026.
- Further margin gains from “self-help” and supply chain integration, particularly in Energy and underperforming units.
- Stabilisation or recovery in LNG ship-to-ship activity within Fendercare.
- Progress on the Tankships fleet renewal and any update on charter rates or utilisation.
Bottom line: a steadier platform with visible catalysts
This is a solid, if unspectacular, half-year that shows the turnaround is doing the heavy lifting where it counts – margins, order book and cash discipline. The narrative shifts from repair to selective growth, particularly in Energy technology (Bubble Curtains, decommissioning) and Defence systems. With the full-year outlook unchanged and H2 weighting intact, delivery through year-end – especially on Defence execution and Maritime stabilisation – is the next proof point. For patient investors, the improving quality of earnings and capital discipline are heading the right way.
