LONDON (ShareCast) - (Sharecast News) - James Fisher and Sons said in a trading update on Monday that a number of projects had been further delayed in recent weeks, as it revised its underlying profit expectations for the year.
The London-listed marine engineer said that following a difficult start to the year, improvement in the Fendercare ship-to-ship transfer business remained below the rate previously expected, with some growing evidence of market shifts in some key territories.

It said its JFD division had "reached an impasse" in negotiations over around £2m due on a long-term project, and was no longer forecasting a resolution in 2021.

Customers of its marine contracting, decommissioning and nuclear businesses, meanwhile, had further delayed projects in recent weeks.

The projects were previously expected to begin, and in some cases finish, in 2021.

James Fisher said the continuing challenges presented by the Covid-19 pandemic, particularly in the safe mobilisation of teams to work sites, had influenced customer decision-making processes.

A recent deterioration in the condition of a financially-distressed customer had increased the firm's bad debt risk by about £2m.

The tankships operation experienced a "poor month" in September, and as a result had a more cautious outlook for the full year.

Revenue in the quarter ended 30 September was 7.6% higher than the thief quarter of 2020, and 8.7% higher than the immediately-prior second quarter.

Year-to-date revenue was 3.9% below the prior year.

The board said it now expected underlying operating profit for the full year, before separately disclosed items, to be in the range of £27m to £32m.

"The group continues to trade within its banking covenants, which are formally measured at each half year end, and at 30 September had headroom of around £100m against its revolving credit facilities," the board said in its statement.

"In response to the latest short-term trading outlook, management is performing a detailed review of the group's cost base and balance sheet.

"Aligned with the board's commitment to 'fix or exit' non-core and underperforming businesses, the group is continuing to advance at pace the divestment of non-core businesses and assets aimed at generating significant proceeds over the next year, to reduce net debt and financial leverage as well as to simplify the business."

Notwithstanding some revenue opportunity moving from the fourth quarter of 2021 into 2022, James Fisher said it currently expected that to be "materially offset" by the continuation of challenges the group was currently experiencing with customer demand and the safe mobilisation of teams to work sites.

"The goard remains confident in the group's strategy to deliver sustainable profitable growth from the significant market opportunities that are available to it and remains committed to executing on its long-term strategy."

At 0910 BST, shares in James Fisher and Sons were down 29.46% at 553p.

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