Despite a tough start to the year, the marine engineering company anticipates steady improvement in trading
James Fisher cuts H1 dividend as coronavirus hits energy and shipping
- The group reported a 10% drop in revenues and a 28% fall in underlying pre-tax profit to £15.1m
- The shares dropped 8% in early trading possibly due to disappointment about the fall in profits
- Recommendation: With the oil price gradually recovering from its low point in April we see the shares as a medium to high risk buy, but in the current climate we would suggest drip-feeding in.
Interim results from marine services group James Fisher & Sons today confirmed that it had taken a hit from the coronavirus pandemic as it reported a 10% drop in revenues and a 28% fall in underlying pre-tax profit to £15.1m. The company provides a range of specialist services to oil rigs and wind farms, and is also involved in transporting oil, wharf operations and nuclear decommissioning. The fall in the oil price in the first half of 2020 had a considerable impact on the company as it led to some of its projects being deferred. While the company expects conditions to remain challenging in the second half of the year, it does also anticipate a steady improvement in its trading.
The shares dropped 8% in early trading, possibly due to disappointment about the fall in profits. The announcement of an interim dividend is a positive for investors given how many companies have suspended payments, although James Fisher cut it back to 8p from 11.3p last year. Full-year figures are expected to be lower than last year but the company’s diversity of activities is seen as a strength in uncertain economic times, and the upbeat outlook for the second half is also positive for investors. With the oil price gradually recovering from its low point in April we see the shares as a medium to high risk buy, but in the current climate we would suggest drip-feeding in.
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