Analysts at Berenberg reiterated their 'buy' rating on James Fisher and Sons Plc after the marine engineering services firm released a full-year pre-close trading update that confirmed trading in the latter months of FY25 was ahead of management expectations.
James Fisher said FY25 revenue was expected to be roughly £395m, up 4% year-on-year, while adjusted underlying earnings were now anticipated to be approximately £28m. Profit margins improved due to James Fisher's continued focus on productivity gains, supply-chain efficiencies, a decommissioning turnaround and business mix.
The German bank, which also kept its 615p target price on the stock, noted that James Fisher's defence order book had benefited from recent contract wins, including the JFD Polish Navy contract.
"Overall, we think this was a strong update, showing that management action in recent years is starting to deliver results. We upgrade our FY25E adjusted EBITA forecast by 9% to £27.5m and our adjusted EPS estimate by 23% to 21.6p," said Berenberg.
"We see scope for the current trading momentum to continue through 2026 and 2027 given the tailwinds that are supporting the Energy and Defence businesses. Management action in recent years is starting to deliver results and we forecast further cost efficiencies to deliver additional margin benefits. The shares trade on 18x our CY26E earnings forecast, falling to 14x for CY27E, with CY27E EV/EBITDA of only 5x (including IFRS 16 lease liabilities), a 10%+ FCF yield and scope for a return to paying a dividend."
Reporting by Iain Gilbert at Sharecast.com