James Fisher And Sons Aktie

Good afternoon, and welcome to the James Fisher and Sons plc Half Year Results Investor Presentation. [Operator Instructions] Before we dive into the live Q&A session, we would just like to play a recorded presentation covering the results.

Good morning, everyone, and welcome to our 2026 interim results earnings call. I am joined by our Chief Financial Officer, Karen Hayzen-Smith, and I will first cover the key business highlights for the first half ended June 30, 2026. Karen will follow with an overview of our financial results at group and division level. I will then provide an update on how we are positioning the business to grow and scale and concluding with our outlook and Q&A.

But first, a quick recap on the things we do at James Fisher. Our company is organized across 3 divisions: Defense, Energy and Maritime Transport, where we solve our customers' complex challenges in the blue economy. The Defense division supports and rescues lives under water through our global leadership in submarine rescue, rebreathers and mobility solutions for special forces.

Our Energy division provides upstream services across oil and gas and offshore wind so that our customers can meet increasing energy demand more efficiently, safely and sustainably. Maritime Transport ensures on-time delivery of clean petroleum products and chemicals through coastal shipping and provides global ship-to-ship transfer of oil and gas cargoes to third parties around the world.

Now let's move on to our 1H '26 business highlights. We delivered a solid first half performance with robust trading in Defense and Maritime Transport, helping to offset challenging market conditions in Energy. Given the mix of our markets and the business turnaround actions we have taken in recent years, we have delivered results in line with our expectation.

1H '26 revenue was up 2.1% year-on-year on a reported basis and underlying operating profit increased by 27.9%. ROCE improved by 210 basis points to 8.2%. Leverage remained within the upper end of our target range at 1.5x, reflecting our investments in enablers for the long-term growth of the business, which I will cover later. The divisions continue to operate in attractive end markets, supported by long-term structural demand.

In Defense, revenue and underlying operating profit grew strongly year-on-year with performance improving across all product lines. A strengthened order book provides good visibility into the second half. Maritime Transport also performed well, supported by strong tankship utilization, favorable spot rates and higher ship-to-ship activity in Latin America. By contrast, market conditions in Energy have caused headwinds with customers' caution and project delays affecting upstream oil and gas activity and policy changes leading to lower activity in offshore wind construction.

As a result of the short-term energy market backdrop, 1H '26 performance was lower year-on-year, which Karen will cover shortly. However, the medium-term fundamentals are attractive, and we are managing through this challenging market. Across the group, we continue with self-help actions in the short term, while we are also investing in our people, capability, innovation and customer-led geographic expansion needed to support future growth. This positions James Fisher to scale in target markets.

With that, I'll hand over to Karen to walk us through the financials.

Thank you, Jean, and good morning, everyone.

Notwithstanding the energy market backdrop, I'm pleased that we've been able to deliver solid results overall. Benefiting from our diversified portfolio, we have delivered good results in Defense and Maritime Transport in the first half of '26. We have also continued to deliver on our wider growth plans. And overall, we have made further progress towards our financial targets, and I'll go through these now.

So starting with the headlines. Revenue was up 2.1%, driven by Defense and Maritime Transport, offset by a decline in Energy revenues. Underlying operating profit was up 27.9% with the margin moving upwards to 7.2% when compared against the '25 period. Net debt was GBP 65.7 million at 30th of June, and our net debt-to-EBITDA ratio of 1.5x on a covenant basis was within our target range. Lastly, return on capital employed also increased to 8.2%, which is a 210 basis point uplift as a result of the increase in profitability.

If we now turn to the breakdown of revenue, this slide shows the ups and downs in the revenue profile. Revenue increased year-on-year to just under GBP 196 million. And you can see that in '25, there was GBP 8.7 million related to the IRM business in Mozambique, not repeating in '26. There was a net GBP 9.5 million volume increase in the period, which comprised of a GBP 19.8 million increase from Defense and Maritime Transport, offset by a GBP 10.3 million reduction in Energy.

Moving on to operating profit. We saw an increase in profit to GBP 14.2 million with a margin of 7.2%, which is higher than reported in the trading update at the end of July. There was growth of GBP 7 million, up from the prior period, which was largely due to the volume increases I have just explained in Defense and Maritime Transport, and this was offset by a net fall in profit in Energy of GBP 4.6 million. This reduction was from our higher-margin services such as well testing, decommissioning and bubble curtain, which have been offset by cost reductions. Corporate costs increased by GBP 400,000 to GBP 6.6 million.

The next slide should be familiar as it is used to illustrate the financials on a like-for-like basis, showing the increase in both revenue and operating profit in the continuing businesses with margins increasing towards our initial 10% target. We have made progress in a number of areas, which have added to the improvement in margins, such as supply chain savings, self-help and the rebound in defense, which Jean will discuss in more detail later.

If we now turn to look across the divisions. In Defense, we started to see the investment made in previous periods, together with contract execution from recent contract wins generate revenue. Revenue increased from GBP 37. 6 million in '25 to GBP 53.8 million for this period, up 43%, driven by good performance in submarine rescue, tactical delivery vehicles and military diving. Profit also increased from GBP 0.7 million to GBP 5.3 million with a high proportion of the increase in revenue falling through to operating profit, given we were carrying a cost base to support that growth in previous periods. This is evidenced with a much improved margin to just below 10%.

We have been improving our operational efficiency and achieving supply chain savings. We have strong momentum and customer interest in our products, and we continue to invest in the capabilities required to capitalize on those opportunities. We have invested in people to support increased bidding activity, project management given the uptick in projects and engineering skills. We will also be increasing our capabilities in sales as well as process and system improvements to scale the division. Execution is key to delivering further profit improvement.

Turning to orders. The order book at 30th of June was GBP 295 million, together with awards under framework agreements of around GBP 95 million. Even with a 43% revenue increase, we've been able to continue to replenish the order book. The orders and awards together totaled GBP 390 million, which is up from December '25. It's estimated that around 60% of this total will be realized over the next 3 years and together with a GBP 15 million run rate each year provides good visibility of our secured revenue. We've had a number of smaller important strategic wins and are close to finalizing a number of contracts, which we expect to turn into orders in the next few months.

Moving on to Energy. Revenue was down GBP 17.7 million with GBP 8.7 million related to the Mozambique contract and GBP 9 million down across the other product lines, giving rise to a 20.6% reduction in the division. Energy Services has had a challenging year with the Middle East crisis having a greater impact than originally anticipated, with revenues down GBP 15 million. The market uncertainties have impacted our customer spending plans, resulting in delays to the commencement of projects across our key markets. Overall, we have experienced reduced customer spend on both well testing activities and decommissioning.

The number of projects in offshore wind construction using our Bubble Curtain technology has reduced in the period. The macro and policy decisions have reduced our U.S. activities. And although we had intended to pivot to alternative geographies, such as Europe, there has been an overall reduction in new offshore wind platform build programs. The volume reductions are in activities that attract higher margins. And therefore, there is a higher fall-through impact with a 45% reduction in operating profit and a drop in margins to 7.8%.

In the other product lines, the IRM business in Brazil has had a good performance due to the increased activity levels. And in the offshore wind aftermarket, there was increased demand for blade services and also recorded performance-related revenue in the period. Given the overall downturn, we have been reducing costs to offset the volume reduction, but being mindful of retaining those critical capabilities to respond when the market recovers.

Turning to Maritime Transport. This division had a good performance in the period. Despite a slow start to the year from poor weather conditions, Tankships managed to end the period with revenue up 7.5% to GBP 46 million. This was achieved by good utilization and improved spot rates. The Cattedown business continued to perform well with good volumes through the port. And in Fendercare, the strong performance at the end of last year continued through into '26, resulting in revenue increasing to GBP 28 million, an increase of just under 9%. This was a result of increased volumes on ship-to-ship transfers in Latin America.

Overall, the division improved operating profit to GBP 10.2 million, an increase of 48%. This is a result of the volume increases, but also with a focus on cost savings and efficiencies. We have also taken delivery of 3 out of 4 new tankers with 2 in the first half, 1 in July with the fourth expected towards the end of this year.

So if we now turn to the cash flow waterfall, and I'll just pick out a few points here. On working capital, we saw an outflow of just under GBP 7 million in the period. This reflected the increased working capital, in particular in inventory in Defense to ensure we deliver to customer timings and on contract work in progress. This should unwind in the second half, but is, of course, subject to the timing of completion of project milestones. Cash collection improved with DSO days reducing to 39. We had an inflow of cash of around GBP 5 million from asset disposals, and we will be selling additional assets in half 2 as the IRM Middle East and Africa closures are finalized.

Net finance costs were GBP 3.7 million, which comprises of bank interest of GBP 4.6 million, offset by interest income and our average rate of bank interest reduced in the period to 7.8%. Lease payments, including lease interest was GBP 15.5 million, marginally up compared to '25. As we have entered new lease arrangements, lease payments will increase in the second half. Although the vessels are replacing existing ones that we have, we will be able to attain higher pricing on these vessels as contracts renew. And CapEx was GBP 14.5 million, which I'll explain further on the next slide.

We have continued to invest for future growth. In Defense, we have been investing in our new product base, including the new Multi-Role rebreather and tactical delivery vehicles with GBP 3 million of investment. In Energy, we have been building a new fleet of electric compressors to meet the electrification requirements of our customers. And in Maritime Transport, the CapEx represents deposits paid on vessels together with the usual dry dock maintenance CapEx across the fleet.

Looking at the debt position of the group, we are comfortably within our covenants. Net debt has increased from December '25 by around GBP 11 million to GBP 65.7 million, which is only marginally up on June 25. This is mainly timing and phasing of cash payments due to working capital seasonality, which follows a similar trend to previous periods.

The 2 new tankers in Maritime Transport are funded by lease arrangements, and therefore, you can see that the right-of-use liabilities in the period have increased to GBP 114 million. As previously guided, each vessel adds around $25 million of lease liability. And in March '26, we added another lender to our banking group with a hold of GBP 25 million, increasing liquidity.

The next slide sets out our priorities in relation to capital allocation. This is unchanged from the position presented earlier this year. We continue to focus on organic investment, including new product development and innovation. We will balance investment and the growth opportunities we see ahead of us with the need to maintain financial discipline and operate within our debt range, making investment decisions which are aligned with our financial targets.

We understand the importance of shareholder returns and are reviewing our dividend policy to assess the appropriate time to reinstate a dividend. We will also consider bolt-on acquisitions that fit with our strategic priorities in due course. Overall, during the course of this period, we've been focusing on those areas that are growing, also investing for future growth and managing a weaker energy market.

We are taking the steps to reduce costs but protect core capabilities required for when the market improves. Therefore, to summarize, we've improved performance in the majority of our key metrics, demonstrated growth and margin improvement in Defense, invested in new products and capital expenditure for future opportunities, including capabilities required for scale and managed our debt position, giving us the financial ability for growth and to take advantage of new opportunities.

I'll now hand back to Jean to take us through the rest of this presentation.

Thank you, Karen. Before we move on to strategy, let me recap how the turnaround efforts, we started 4 years ago, created a stronger company. We have now reshaped James Fisher into a stronger, more resilient business. We have strengthened the balance sheet, simplified the portfolio and built a leadership team focused on accountability and disciplined execution. We've invested in the foundations that will support the next phase of our growth, including stronger governance and controls and integrated supply chain, strong support functions and greater investment in people, technology and innovation. Together, these actions help us to serve our customers better while improving efficiency, effectiveness and standardization across the group. The result is a more client-focused service technology business with a clearer operating model and stronger execution discipline. We are now better positioned to scale in the markets where we see the strongest customer-led opportunities.

Now let me turn on to growth -- to our growth strategy. Our financial targets are 10% underlying operating profit and 15% ROCE. We ended 1H '26 with underlying operating margin up 140 basis points year-on-year to 7.2%. We continue to work on improving our portfolio performance with staged closure of our Subsea Middle East and Africa business and the strengthening of our renewable aftermarket business.

Decommissioning was also affected by the market headwinds, but we are nevertheless preparing for when activity returns, expanding into new markets and investing in differentiated technology. We made progress on self-help initiatives into -- started into the prior years with additional measures underway this year in the Energy division at a time of lower activity. Defense has rebounded in the first half to a run rate, which brought it close to our 10% UOP target range.

Finally, the integration of our supply chain delivered important incremental sustainable savings in 1H '26 while improving key supplier relationships and processes. Our 3-year supply chain integration plan is on track, allowing us to build our operations in support to our strategy. Beyond the 10% UOP and 15% ROCE targets, we see further opportunities to go above these levels in the longer term.

Now moving on to growth. Our strategy is underpinned by powerful megatrends impacting all 3 divisions. Global energy demand will continue to grow despite this year's disruptions, increasingly shaped by energy security. Second, rising geopolitical tension, digitization and automation are also changing how our customers operate with a growing emphasis on local content. Our focus remains on positioning to grow, embedding the operational disciplines that support customer excellence and strengthen our supply chain.

We are funding targeted investments in technology, innovation and sustainable solutions that give our customers a competitive edge. We are also developing specialist engineering capabilities in emerging areas such as data science and autonomous systems. Investment in our people and global workforce of the future remains pivotal to our strategy, focusing on quality and bringing superior service delivery. This provides the platform to scale the company, which is driven by 3 engines: firstly, selling more to our existing clients, deepening intimacy with Tier 1 customers who already trust us, increasing wallet share in home markets and building higher quality repeatable business.

Secondly, selling our existing products and services into new geographies, acquiring new customers focused on the Americas, Continental Europe and Indo Pacific, 3 regions which are large and growing across both Defense and Energy. And finally, accelerating innovation as a core differentiator, focused on the areas where we can create the greatest value for our customers as measured by our Vitality Index.

Now if I go to the division prospect, in Defense, with NATO and allied government targeting defense spending at about 5% of GDP by 2035, our estimated GBP 6.1 billion serviceable obtainable market remains highly attractive. Our focus is on executing against this growing opportunity. In 1H '26, we continued to deepen relationships with leading global partners across Europe, Indo Pacific and the U.S., including Saab, ST Engineering in Singapore and [indiscernible] in the U.S. This allows us to progress the next generation of mission-critical products and services with our customer across all product lines.

We started work on the Polish Navy's Ratownik project, which was awarded at the end of last year, which will help protect critical underwater infrastructure in the Baltic Sea. We also secured a key submarine platform contract extension and a new TDV maintenance contract in the first half. Together with further awards under framework agreements, this is providing revenue visibility and positive order book momentum through the second half.

We have strengthened the division's presence in Asia-Pacific, opening a new subsea center of excellence in Singapore, while in Sweden, we expanded TDV capacity to support manufacturing of our craft to meet a growing demand. In the U.S., we have appointed an experienced and highly regarded Board of Directors to our special security agreement company and recruited key commercial talent to drive the business.

Finally, Defense is leading in new product development such as our SMR next-generation military diving rebreather, and we have already secured our first order. We also continue to invest in our submarine rescue capabilities, which was recently demonstrated in the successful RESCUEX East 2026 exercise involving the U.K., France and Norway.

Now let's move to Energy. Despite a challenging first half driven by macro conditions, we made progress against key growth priorities within Energy Services and Renewables. In February, we secured the first Digi Rig contract in the Caspian Sea, creating a digital twin to support the redesign and delivery of bespoke air, steam and well test packages. This marks the strategic milestone in digital innovation and the expansion of our James Fisher's asset management capability.

Renewables saw increased activity supported by additional performance-related payments and continued growth in the blade services aftermarket. Europe is becoming the center of offshore wind aftermarket activity with over 90% of current out-of-warranty turbines located in this region. which creates a clear opportunity for us to grow as the market matures. In Oil and Gas, our geographic expansion centered on Guyana in the first half, where we opened a larger operational base to reinforce our footprint in the Latin America region, which brings us closer to customers in a strategically important and growing market.

The Energy division is investing in innovation with a strong pipeline of new products coming to market over the next 3 years. One recent example is our development of our new electric compressors in Norway with the first ones already in operation. This reinforces the role technology can play in supporting safer, cleaner and more efficient operations. We also see opportunities emerge in adjacent markets such as critical underwater infrastructure, we call the CUI, where energy security, offshore infrastructure and national security requirements are converging. This creates an opportunity for James Fisher to deploy our unique solutions across Energy and Defense to build early market proof points.

Now let's move to Maritime Transport. The image of Orca Fisher that you see on the slide is a reflection of the long-term partnerships we have established with our customers and suppliers to meet the demand for safer, more efficient, lower carbon coastal shipping. It also ensures that James Fisher and its customers meet forthcoming regulatory commitments to decarbonize the shipping industry. If we look at our geographic growth, we also saw strong ship-to-ship activity in Latin America, supported by our expansion into the region in 2025. Safety, quality and compliance remain top of our customers' priorities, and this is why clients continue to trust us as a main supplier.

Our success in Latin America more than offset lower volumes in other geographies, including the Middle East, which was impacted by the Iran war. From the innovation side, our 3 replacement program -- our fleet replacement program, sorry, remains on track with 3 of our 4 newbuild tankers now delivered. This early investment positions us well in the Northwest Europe market where 7% of existing smaller tankers are forecast to reach obsolescence by 2031.

Now looking ahead and to summarize what we have covered today. In conclusion, we delivered first half trading in line with expectation with good momentum in Defense and Maritime Transport expected to continue across the second half of the year. Energy continues to be affected by geopolitical and macroeconomic uncertainty with challenging market conditions expected to remain through the second half. If we assume no material worsening and disruptions in the energy markets, the Board's overall expectation for the full year remains unchanged.

The long-term fundamentals of our markets remain attractive, supported by structural demand growth across Defense, Energy and Maritime Transport. James Fisher enters the second half with a stronger operational platform, while we remain disciplined in navigating the near-term market uncertainty. I am confident in our ability to grow and scale towards our medium-term financial targets. I'd like to close by thanking all our employees and their families for the really hard work they deployed in H1, which led to these results, both in good and more adverse markets and the difference they make in delivering superior service to our customers.

[Operator Instructions] Jean, Karen, as you can see, we have received a number of questions throughout today's presentation. And if I may, we'll dive straight into the first one here, which reads as follows: what returns do you expect from the fleet modernization program? And when should it's full benefit become visible in cash flow and return on capital employed?

Karen, do you want to take that one?

Yes. Thank you for the question. So you may have seen before that within the Tankships business, 80% of our revenue is generally contracted with customer base and then 20% of that is in the spot market. So the way in which returns will come through from the fleet program is when we negotiate the new contracts with our customers. So the customers' contracts tend to span 2 or 3 years. We have been negotiating some new contracts with our customers this year, which has an uplift in pricing to take account of the new vessel program, and that will continue over the next few years and beyond as we negotiate those contracts with the customers. Also, there's a more immediate benefit in the spot market with regard to the vessels that are operating at the moment.

The other benefit that we see obviously from the modernization of the fleet is around maintenance, for example, and also ensuring that the utilization rates stay high that we -- and this year, obviously, in the first half, sorry, we've done very good utilization of our fleet. And obviously, that increase in profitability will come into the cash flow and obviously the ROCE as we go forward.

The other point to note that you would have heard and Jean outlined in the presentation is that we obviously monitor the build program associated with the smaller tankers in the market in which we play and that is predicted to be reduced, which should give greater pricing power as we go forward actually, where there will be greater -- we're anticipating that there will be greater demand for the [indiscernible] transportation services and less supply available.

Next question here with 2 parts to it. How significant could the convergence of defense, energy security and offshore infrastructure become? And can you give an example of an opportunity that uses capabilities for more than one James Fisher division?

Right. So that's a fundamental strategic question for us. There has always been a tradition of interplay between the technologies we have developed in the commercial sector with defense, particularly all our tradition in saturation diving, deep diving have allowed us to play a major role in the deepwater combat area or support of human life in military environment. But what we have seen over the past 5 to 10 years with increased geopolitical tension is the theme of energy security, which means, as I think I mentioned earlier, the threat to existing energy infrastructure. And this has led us to think about the technology and services we have developed traditionally for this specific application.

I can give you a couple of examples, particularly because the energy infrastructure, whether these are wind farms or oil and gas are typically in vulnerable area in this day and age. The first example is Bubble Curtain. Bubble Curtain is a great way to kill the sound propagation underwater. We have used it and perfected it on an outward going way to protect sea life against radiating sound from the hammering of piles for the wind construction industry. But we can use exactly the same technology the other way around, i.e., when you have an incoming threat from a drone, for example, or underwater [ craft], these are typically sonar-driven, sonar navigation system is based on acoustic waves. And the Bubble Curtain is a perfect wall against acoustic waves. So we have shown and proven in the field that these bubble curtains are 100% effective to deflect incoming drones.

Now this can be applied to protect against bad actors trying to destroy infrastructure. And coupled with identification of threats, we suddenly trigger these bubble curtains, which act as a shield, but it can also act to protect military assets, floating assets or offshore assets such as vessels and port infrastructure, right? So that's an example. And you've read in the press, whether it's the Iran conflict or the mischief happening in the Baltic Sea, a bubble curtain is a perfect tool combined with other mechanism to protect assets against threat.

Another example is the monitoring of cables we have done to be more efficient in the prognostic of cable cuts for offshore wind and locating faults where those cable breaks. What we have noted is that all those monitoring sensing we do along cables that sometimes are very long cables, 80 miles, 100 miles, act as real-time antenna underwater where we can really track and see real-time underwater traffic as well as surface traffic, right? So we've noted this really a fact which is of great interest for border patrol and protection force for the littoral of several nations.

So this is just 2 examples. There are others. And what we have seen is a real interest and pick a practical request to prove our solution and to monetize the solution. And although the revenue impact this year is minimal, the significance of this qualification bodes very well for the future as a new application of our technologies.

Another question here is what customer interest are you seeing in your new fully electric compressors? And could this technology materially strengthen your position in offshore energy markets?

Yes. I mean we have traditionally seen out of Norway, whether it's Equinor or other customers, several requests to really be on the leading edge of safety, decarbonization and efficiency with the use of technology. And one of the big theme in Norway is how can we electrify the oil and gas industry. And those electric compressors were born out of this customer-driven request. We have demonstrated that we can do this efficiently and effectively.

The good thing is the influence from the Norwegian standards have a long tradition of spreading out across the industry and Equinor is present across the Americas and in other places. So wherever Equinor goes, we spread our electric compressor [indiscernible] and we see that as one of the -- an example of our contribution to decarbonizing the oil and gas industry. And we are really one of the only ones to be that advanced in that field.

And next up is do you expect to meet your medium-term targets of 10% operating margin and a 15% ROCE in 2027?

Karen, do you want?

Sure. We haven't given a time line associated with the targets, but it's probably worth giving a bit of background on the businesses. So Maritime Transport and Energy until the energy markets were disrupted this year, we're earning margins in excess of 10%. And one of the levers that we have been stating and again, [ one slide ] was around the defense rebound. And in the first half that business also came up just under the 10% mark. So we're definitely moving in the right direction.

With regard to some of our contract decisions and the markets that we -- sorry, I would say our requirements actually in terms of making contract decisions is looking for good gross margin -- operating profit margins in excess of 10%. So I think the right ingredients are there to get to the 10%, and we're in the right profile. There are a few things around obviously volume in this first half with the energy market being down, as we stated, we are still carrying costs in our critical capabilities for that when that market rebounds. So therefore, that obviously has an impact in margin at the moment.

So I can't give the time frame, but I think we're certainly moving in the right direction. And obviously, if energy was up and less disruptive as it is at the moment, we would obviously be much closer to that. On the ROCE, again, moving in the right direction. I would just point out one thing I know a lot of companies actually quote pretax ROCE. And we have a higher tax rate at the moment. So our ROCE pretax is actually -- you may have seen in the slide, is actually over 13%. And the thing as profitability comes up and volume improves, then actually, we should start to see that ROCE getting closer to our target.

And moving on to the next question. There has been a big growth in ship-to-ship transfer business in the Middle East as a result of the problems in the Strait of Hormuz. Has Fisher taken any steps to get involved in this area?

We have a traditional presence in the Gulf. We have been there for many years. However, with the conflict around that region, we have refrained from operating since the conflict began because we haven't seen the sufficient security assurance from our clients to be able to operate there. So although we have many inbounds, we have decided to stand down because we don't want to have fatalities or injuries around the military risk.

There has been a significant pickup indeed, but a lot of this pickup is also related to sanctioned trades, whether it's Iran or Russia or other bad actors or sanctioned actors, I would say. And we have a much higher compliance hurdle than our competition. So again, for that reason as well, we wouldn't have seen increase from our side. On the other hand, what we have seen is because of the tension across the market, we have seen some activity pick up elsewhere, which we have been selectively capturing and that contributes to a good start of the year for Fendercare.

Thank you, Jean. And the last question we've got here is, how many tactical delivery vehicles have you sold? Have they been accepted by the U.S. Armed Forces?

Yes. So we are not communicating the number of TDVs we have sold. This is under quite real secrecy, but what we can share with you is the volume is picking up. It's coming from various countries that are either part of NATO or closely aligned to NATO. And then again, we cannot share anything particular to a country. So I will refrain from responding to the U.S. question. The only thing I can say is that [ our craft ] is raising significant interest across the board. And as the demand evolves, we will meet that demand.

That's great. Well, Jean and Karen, thank you for addressing all those questions from investors today. Jean, before I redirect investors to provide you with their feedback, which is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Yes. So first of all, thank you for your interest. We had a bit of a mixed first half mix because really good strong results in Defense, good results in Transport and challenges in Energy. But all in all, we were able to meet expectation, our expectation, consensus expectation in the first half. We believe this situation will carry on to the second half. This is why we are -- we believe we will meet consensus provided the energy market doesn't worsen. But the thing I'd like you to take away is these are short-term disruptions.

There is a fundamental structural growth in demand for energy. A large part of this will come from oil and gas supply and offshore wind, right? So we see the mid and of course, long-term future quite positively. And in the meantime, we position ourselves to be [ able to launch ], capturing that growth, which will come back.

Jean, Karen, thank you once again for updating investors today. Could I please ask investors not to close the session as you now will be automatically redirected to provide your feedback, which will help the company better understand your views and expectations.

On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you.

Good morning, everyone, and welcome to our 2026 interim results earnings call. I am joined by our Chief Financial Officer,Karen Hayzen-Smith, and I will first cover the key business highlights for the first half ended June 30, 2026. Karen will follow with an overview of our financial results at group and division level. I will then provide an update on how we are positioning the business to grow and scale and concluding with our outlook and Q&A.

But first, a quick recap on the things we do at James Fisher. Our company is organized across 3 divisions: Defense, Energy and Maritime Transport, where we solve our customers' complex challenges in the blue economy. The Defense division supports and rescues lives under water through our global leadership in submarine rescue, rebreathers and mobility solution for special forces. Our Energy division provides upstream services across oil and gas and offshore wind so that our customers can meet increasing energy demand more efficiently, safely and sustainably. Maritime Transport ensures on-time delivery of clean petroleum products and chemicals through coastal shipping and provides global ship-to-ship transfer of oil and gas cargoes to third parties around the world.

Now let's move on to our 1H '26 business highlights. We delivered a solid first half performance with robust trading in Defense and Maritime Transport, helping to offset challenging market conditions in energy. Given the mix of our markets and the business turnaround actions we have taken in recent years, we have delivered results in line with our expectation. 1H '26 revenue was up 2.1% year-on-year on a reported basis and underlying operating profit increased by 27.9%. ROCE improved by 210 basis points to 8.2%. Leverage remained within the upper end of our target range at 1.5x, reflecting our investments in enablers for the long-term growth of the business, which I will cover later. The divisions continue to operate in attractive end markets, supported by long-term structural demand.

In Defense, revenue and underlying operating profit grew strongly year-on-year with performance improving across all product lines. A strengthened order book provides good visibility into the second half. Maritime Transport also performed well, supported by strong tank ship utilization, favorable spot rates and higher ship-to-ship activity in Latin America. By contrast, market conditions in energy has caused headwinds with customers' caution and project delays affecting upstream oil and gas activity and policy changes leading to lower activity in offshore wind construction. As a result of the short-term energy market backdrop, 1H '26 performance was lower year-on-year, which Karen will cover shortly. However, the medium-term fundamentals are attractive, and we are managing through this challenging market. Across the group, we continue with self-help actions in the short term, while we are also investing in our people, capability, innovation and customer-led geographic expansion needed to support future growth. This positions James Fisher to scale in target markets.

With that, I'll hand over to Karen to walk us through the financials.

Thank you, Jean, and good morning, everyone. Notwithstanding the energy market backdrop, I'm pleased that we've been able to deliver solid results overall. Benefiting from our diversified portfolio, we have delivered good results in Defense and Maritime Transport in the first half of '26. We have also continued to deliver on our wider growth plans. And overall, we have made further progress towards our financial targets, and I'll go through these now.

So starting with the headlines. Revenue was up 2.1%, driven by Defense and Maritime Transport, offset by a decline in energy revenues. Underlying operating profit was up 27.9%, with the margin moving upwards to 7.2% when compared against the '25 period. Net debt was GBP 65.7 million at 30th of June, and our net debt-to-EBITDA ratio of 1.5x on a covenant basis was within our target range. Lastly, return on capital employed also increased to 8.2%, which is a 210 basis point uplift as a result of the increase in profitability.

If we now turn to the breakdown of revenue, this slide shows the ups and downs in the revenue profile. Revenue increased year-on-year to just under GBP 196 million. And you can see that in '25, there was GBP 8.7 million related to the IRM business in Mozambique, not repeating in '26. There was a net GBP 9.5 million volume increase in the period, which comprised of a GBP 19.8 million increase from Defense and Maritime Transport, offset by a GBP 10.3 million reduction in Energy.

Moving on to operating profit. We saw an increase in profit to GBP 14.2 million with a margin of 7.2%, which is higher than reported in the trading update at the end of July. There was growth of GBP 7 million, up from the prior period, which was largely due to the volume increases I have just explained in Defense and Maritime Transport, and this was offset by a net fall in profit in Energy of GBP 4.6 million. This reduction was from our higher-margin services such as well testing, decommissioning and bubble curtain, which have been offset by cost reductions. Corporate costs increased by GBP 400,000 to GBP 6.6 million.

The next slide should be familiar as it is used to illustrate the financials on a like-for-like basis, showing the increase in both revenue and operating profit in the continuing businesses with margins increasing towards our initial 10% target. We have made progress in a number of areas, which have added to the improvement in margins such as supply chain savings, self-help and the rebound in Defense, which Jean will discuss in more detail later.

If we now turn to look across the divisions. In Defense, we started to see the investment made in previous periods, together with contract execution from recent contract wins, generate revenue. Revenue increased from GBP 37.6 million in '25 to GBP 53.8 million for this period, up 43%, driven by good performance in submarine rescue, Tactical Delivery Vehicles and military diving. Profit also increased from GBP 0.7 million to GBP 5.3 million with a high proportion of the increase in revenue falling through to operating profit, given we were carrying a cost base to support that growth in previous periods. This is evidenced with a much improved margin to just below 10%. We have been improving our operational efficiency and achieving supply chain savings. We have strong momentum and customer interest in our products, and we continue to invest in the capabilities required to capitalize on those opportunities. We have invested in people to support increased bidding activity, project management given the uptick in projects and engineering skills. We will also be increasing our capabilities in sales as well as process and system improvements to scale the division. Execution is key to delivering further profit improvements.

Turning to orders. The order book at 30th of June was GBP 295 million, together with awards under framework agreements of around GBP 95 million. Even with a 43% revenue increase, we've been able to continue to replenish the order book. The orders and awards together totaled GBP 390 million, which is up on December 25. It's estimated that around 60% of this total will be realized over the next 3 years and together with a GBP 15 million run rate each year provide good visibility of our secured revenue. We had a number of smaller important strategic wins and are close to finalizing a number of contracts, which we expect to turn into orders in the next few months.

Moving on to Energy. Revenue was down GBP 17.7 million with GBP 8.7 million related to the Mozambique contract and GBP 9 million down across the other product lines, giving rise to a 20.6% reduction in the division. Energy Services has had a challenging year with the Middle East crisis having a greater impact than originally anticipated, with revenues down GBP 15 million. The market uncertainties have impacted our customer spending plans, resulting in delays to the commencement of projects across our key markets. Overall, we have experienced reduced customer spend on both well testing activities and decommissioning. The number of projects in offshore wind construction using our bubble curtain technology has reduced in the period. The macro and policy decisions have reduced our U.S. activities. And although we had intended to pivot to alternative geographies such as Europe, there has been an overall reduction in new offshore wind platform build programs.

The volume reductions are in activities that attract higher margins. And therefore, there is a higher fall-through impact with a 45% reduction in operating profit and a drop in margins to 7.8%. In the other product lines, the IRM business in Brazil has had a good performance due to increased activity levels. And in the offshore wind aftermarket, there was increased demand for blade services and also recorded performance-related revenue in the period. Given the overall downturn, we have been reducing costs to offset the volume reduction, but being mindful of retaining those critical capabilities to respond when the market recovers.

Turning to Maritime Transport. This division had a good performance in the period. Despite a slow start to the year from poor weather conditions, tankships managed to end the period with revenue up 7.5% to GBP 46 million. This was achieved by good utilization and improved spot rates. The testing business continued to perform well with good volumes through the port. And in Fendercare, the strong performance at the end of last year continued through into '26, resulting in revenue increasing to GBP 28 million, an increase of just under 9%. This was a result of increased volumes on ship-to-ship transfers in Latin America. Overall, the division improved operating profit to GBP 10.2 million, an increase of 48%. This is a result of the volume increases, but also with a focus on cost savings and efficiencies. We have also taken delivery of 3 out of 4 new tankers with 2 in the first half, 1 in July, with the fourth expected towards the end of this year.

So if we now turn to the cash flow waterfall, and I'll just pick out a few points here. On working capital, we saw an outflow of just under GBP 7 million in the period. This reflected the increased working capital, in particular in inventory in Defense to ensure we deliver to customer timings and on contract work in progress. This should unwind in the second half, but is, of course, subject to the timing of completion of project milestones. Cash collection improved with DSO days reducing to 39. We had an inflow of cash of around GBP 5 million from asset disposals, and we will be selling additional assets in half 2 as the IRM, Middle East and Africa closures are finalized. Net finance costs were GBP 3.7 million, which comprises of bank interest of GBP 4.6 million, offset by interest income and our average rate of bank interest reduced in the period to 7.8%. Lease payments, including lease interest was GBP 15.5 million, marginally up compared to '25. As we have entered new lease arrangements, lease payments will increase in the second half. Although the vessels are replacing existing ones that we have, we will be able to obtain higher pricing on these vessels as contracts renew. And CapEx was GBP 14.5 million, which I'll explain further on the next slide.

We have continued to invest for future growth. In Defense, we have been investing in our new product base, including the new Multi-Role rebreather and tactical delivery vehicles with GBP 3 million of investment. In Energy, we have been building a new fleet of electric compressors to meet the electrification requirements of our customers. And in Maritime Transport, the CapEx represents deposits paid on vessels together with the usual dry dock maintenance CapEx across the fleet.

Looking at the debt position of the group, we are comfortably within our covenants. Net debt has increased from December '25 by around GBP 11 million to GBP 65.7 million, which is only marginally up on June '25. This is mainly timing and phasing of cash payments due to working capital seasonality, which follows a similar trend to previous periods. The 2 new tankers in Maritime Transport are funded by lease arrangements, and therefore, you can see that the right-of-use liabilities in the period have increased to GBP 114 million. As previously guided, each vessel adds around $25 million of lease liability. And in March '26, we added another lender to our banking group with a hold of GBP 25 million, increasing liquidity.

The next slide sets out our priorities in relation to capital allocation. This is unchanged from the position presented earlier this year. We continue to focus on organic investment, including new product development and innovation. We will balance investment in the growth opportunities we see ahead of us with the need to maintain financial discipline and operate within our debt range, making investment decisions which are aligned with our financial targets. We understand the importance of shareholder returns and are reviewing our dividend policy to assess the appropriate time to reinstate a dividend. We will also consider bolt-on acquisitions that fit with our strategic priorities in due course. Overall, during the course of this period, we've been focusing on those areas that are growing, also investing for future growth and managing a weaker energy market. We are taking the steps to reduce costs but protect core capabilities required for when the market improves.

Therefore, to summarize, we've improved performance in the majority of our key metrics, demonstrated growth and margin improvement in Defense, invested in new products and capital expenditure for future opportunities, including capabilities required for scale and managed our debt position, giving us the financial ability for growth and to take advantage of new opportunities.

I'll now hand back to Jean to take us through the rest of this presentation.

Thank you, Karen. Before we move on to strategy, let me recap how the turnaround efforts we started 4 years ago created a stronger company. We have now reshaped James Fisher into a stronger, more resilient business. We have strengthened the balance sheet, simplified the portfolio and built a leadership team focused on accountability and disciplined execution. We've invested in the foundations that will support the next phase of our growth, including stronger governance and controls, an integrated supply chain, strong support functions and greater investments in people, technology and innovation. Together, these actions help us to serve our customers better while improving efficiency, effectiveness and standardization across the group. The result is a more client-focused service technology business with a clear operating model and stronger execution discipline. We are now better positioned to scale in the markets where we see the strongest customer-led opportunities.

Now let me turn on to our growth strategy. Our financial targets are 10% underlying operating profit and 15% ROCE. We ended 1H '26 with underlying operating margin up 140 basis points year-on-year to 7.2%. We continue to work at improving our portfolio performance with stage closure of our Subsea Middle East and Africa business and the strengthening of our renewable aftermarket business. Decommissioning was also affected by the market headwinds, but we are nevertheless preparing for when activity returns, expanding into new markets and investing in differentiated technology. We made progress on self-help initiatives slotted into the prior years with additional measures underway this year in the Energy division at a time of lower activity. Defense has rebounded in the first half to a run rate which brought it close to our 10% UOP target range. Finally, the integration of our supply chain delivered important incremental sustainable savings in 1H '26 while improving key supplier relationships and processes. Our 3-year supply chain integration plan is on track, allowing us to build our operations in support to our strategy. Beyond the 10% UOP and 15% ROCE targets, we see further opportunities to go above these levels in the longer term.

Now moving on to growth. Our strategy is underpinned by powerful megatrends impacting all 3 divisions. Global energy demand will continue to grow despite this year disruptions, increasingly shaped by energy security. Second, rising geopolitical tension, digitization and automation are also changing how our customers operate with a growing emphasis on local content. Our focus remains on positioning to grow, embedding the operational disciplines that support customer excellence and strengthen our supply chain. We are funding targeted investments in technology, innovation and sustainable solutions that give our customers a competitive edge. We are also developing specialist engineering capabilities in emerging areas such as data science and autonomous systems.

Investment in our people and global workforce of the future remains pivotal to our strategy, focusing on quality and bringing superior service delivery. This provides the platform to scale the company, which is driven by 3 engines. Firstly, selling more to our existing clients, deepening intimacy with Tier 1 customers who already trust us, increasing wallet share in home markets and building higher quality repeatable business. Secondly, selling our existing products and services into new geographies, acquiring new customers focused on the Americas, Continental Europe and Indo Pacific, 3 regions which are large and growing across both Defense and Energy. And finally, accelerating innovation as a core differentiator, focused on the areas where we can create the greatest value for our customers as measured by our vitality index.

Now if I go to the division prospect, in Defense, with NATO and allied government targeting defense spending at about 5% of GDP by 2035, our estimated GBP 6.1 billion serviceable, obtainable market remains highly attractive. Our focus is on executing against this growing opportunity. In 1H '26, we continued to deepen relationships with leading global partners across Europe, Indo Pacific and the U.S., including Saab, ST Engineering in Singapore and [indiscernible] in the U.S. This allows us to progress the next generation of mission-critical products and services with our customer across all product lines. We started work on the Polish Navy's Ratownik project, which was awarded at the end of last year, which will help protect critical underwater infrastructure in the Baltic Sea. We also secured a key submarine platform contract extension and a new TDV maintenance contract in the first half. Together with further awards and the framework agreements, this is providing revenue visibility and positive order book momentum through the second half. We have strengthened the division's presence in Asia Pacific, opening a new Subsea Center of Excellence in Singapore, while in Sweden, we expanded TDV capacity to support manufacturing of our craft to meet a growing demand. In the U.S., we have appointed an experienced and highly regarded Board of Directors to our Special Security Agreement company and recruited key commercial talents to drive the business. Finally, Defense is leading in new product development such as our SMR next-generation military diving rebreather, and we have already secured our first order. We also continue to invest in our submarine rescue capabilities, which was recently demonstrated in the successful RESCUEX East 2026 exercise involving the U.K., France and Norway.

Now let's move to Energy. Despite a challenging first half driven by macro conditions, we made progress against key growth priorities within Energy Services and renewables. In February, we secured the first Digi Rig contract in the Caspian Sea, creating a digital twin to support the redesign and delivery of bespoke air, steam and well test packages. This marks the strategic milestone in digital innovation and the expansion of our James Fisher's asset management capability. Renewables saw increased activity supported by additional performance-related payments and continued growth in the blade services aftermarket. Europe is becoming the center of offshore wind aftermarket activity with over 90% of current out-of-warranty turbines located in this region, which creates a clear opportunity for us to grow as the market mature.

In Oil and Gas, our geographic expansion centered on Guyana in the first half, where we opened a larger operational base to reinforce our footprint in the Latin America region, which brings us closer to customers in a strategically important and growing market. The Energy division is investing in innovation with a strong pipeline of new products coming to market over the next 3 years. One recent example is our development of our new electric compressors in Norway with the first ones already in operation. This reinforces the role technology can play in supporting safer, cleaner and more efficient operations. We also see opportunities emerge in adjacent markets such as critical underwater infrastructure, we call this CUI, where energy security, offshore infrastructure and national security requirements are converging. This creates an opportunity for James Fisher to deploy our unique solutions across Energy and Defense to build early market proof points.

Now let's move to Maritime Transport. The image of Orca Fisher that you see on the slide is a reflection of the long-term partnerships we have established with our customers and suppliers to meet the demand for safer, more efficient, lower carbon coastal shipping. It also ensures that James Fisher and its customers meet forthcoming regulatory commitment to decarbonize the shipping industry. If we look at our geographic growth, we also saw strong ship-to-ship activity in Latin America, supported by our expansion into the region in 2025. Safety, quality and compliance remain top of our customers' priorities, and this is why clients continue to trust us as a main supplier. Our success in Latin America more than offset lower volumes in other geographies, including the Middle East, which was impacted by the Iran war. From the innovation side, our fleet replacement program remains on track with 3 of our 4 newbuild tankers now delivered. This early investment positions us well in the Northwest Europe market where 7% of existing smaller tankers are forecast to reach obsolescence by 2031.

Now looking ahead and to summarize what we have covered today. In conclusion, we delivered first half trading in line with expectation with good momentum in Defense and Maritime Transport expected to continue across the second half of the year. Energy continues to be affected by geopolitical and macroeconomic uncertainty with challenging market conditions expected to remain through the second half. If we assume no material worsening and disruptions in the energy markets, the Board's overall expectation for the full year remain unchanged. The long-term fundamentals of our markets remain attractive, supported by structural demand growth across Defense, Energy and Maritime Transport. James Fisher enters the second half with a stronger operational platform, while we remain disciplined in navigating the near-term market uncertainty. I am confident in our ability to grow and scale towards our medium-term financial targets. I'd like to close by thanking all our employees and their families for the really hard work they deployed in H1 which led to these results, both in good and more adverse markets and the difference they make in delivering superior service to our customers.

With that, I will close and move back to Q&A. Back to you, Matt.

[Operator Instructions] We'll now go to questions in the room.

Andrew Nussey from Peel Hunt. A couple of questions, if I may. If we start with Energy and when you look at your main components of activity, and as we look maybe into a little bit into FY '27, and I appreciate that's pretty much crystal ball gazing at this stage, but if there is some improvement in geopolitical events, greater market stability, how quickly can the business respond to better market conditions?

And secondly, in Defense with increasing certainty around budgets, defense investment plans, et cetera, are you seeing greater consistency in terms of how customers are behaving between invitation to tender all the way through to contract award?

Right. So on the first question, under a scenario where activity resumes, we have a good response time to that, right? We are very careful for our cost-saving initiatives to preserve our ability, both on the people and asset side to meet sudden demand. And without looking into a crystal ball, when I look at the components of our Energy Services business, we know that drilling and well test activity will come back, driven by energy security and the need to diversify demand sources, especially in deepwater, which is the space we are in. Decommissioning is more at the winds of the timing of operators versus the regulation and the penalties they might face. And bubble curtain, again, it's really driven by activity. And as those projects resume in future years, we have both the fleets and the crews to be able to meet that demand.

In terms of JFD, there is an increased urgency from various governments to procure -- especially to procure commercially available solution faster, right? And we're definitely seeing a pickup of paces in the cadence of those programs, procurement programs. But as usual, we are part of a bigger whole, whether it's submarine rescue or mobility solution for special forces. But the supply we provide is also depending on larger programs and those by nature, are taking a certain number of time to go through the complexity of procurement, right? But overall, yes, there is a pickup of the pace.

It's Thomas Rands from Berenberg. Three questions, if I may. First one is on Defense and acknowledging the kind of the GBP 100 million kind of annual run rate that you've kind of hit in the first half, and you've previously said that kind of 10% margins were kind of what you'd expect at that level. I was just wondering, given the operational leverage, what sort of revenue would you -- do you think is required to get to, say, kind of mid-teens, 15% kind of margin in Defense and on what sort of time scale roughly?

Well, I'll first frame the answer, and then I'll let Karen respond to the arithmetic. But we always say that for a run rate level of GBP 100 million to GBP 120 million, we'll be in the 10% UOP. So I'm glad to see that we are pretty much at that level, as you pointed out. On the other hand, we're not going to stop at that range, especially looking at the demand, the scale of the upcoming demand. So we have to prepare for making additional investment for future growth beyond those levels. So it's not just a straight line. And those investments are in our new products. Those investments are in the modernization of our supply chain and operation. But most importantly, those investments are to establish ourselves in some of those new markets where we are entering that require intimacy next to the customer, right? Do you want to answer the arithmetics?

Yes. The thing I would add, first of all, I think rather than actually our revenue target, the first point is actually looking at our contractual decision-making. And when we're entering into the contracts, ensuring that those are being generated at margins that meet our hurdle rates given the engineering skills and the value within those contracts. The other point is around we have to continue to innovate. And therefore, we need to ensure that we have margins that allow capacity for that innovation to come through. So as Jean said, it's a bit of a balancing act. I think we've seen that operational leverage come through because we were carrying a bit of cost, but we have to continue to invest, but also have margins that allow us to continue to do that as we go forward.

Second question was just on supply chain and the self-help progress. Is there any kind of examples you can give us just to give us a bit of kind of color on what you've done so far, what the potential is? It looks like you're roughly nearly halfway through that kind of 3-year time frame -- kind of plan, please?

Yes. So on the -- there's obviously the supply chain, which we've discussed before that we didn't really have a supply chain or procurement department. So that's a big area that we have been investing in, and we've seen the benefit of that as we collectively look at our spend across the group. Specifically on the self-help, we have been working on the various functions, and that includes our systems, our processes and given where we have been before in terms of James Fisher actually coming through its growth through lots of acquisitions previously, there was a lot of duplication across that group. Multiple systems, for example, when we're consolidating those systems, we talk about operating in one James Fisher. So therefore, looking at how we simplify our processes across the group, simple things like reducing the number of entities we have. So there's multiple projects actually within the self-help program. I don't know if you have anything else to add to that.

Yes. So the self-help is to fix some gaps and essentially avoid duplication and chase waste, the usual stuff, which was a special focus this year as energy is lower. The supply chain, if you remember, back in the days, we say that a good supply chain target is to achieve a 10% reduction overall. And I think we -- when I say that we are on track, we are on track to achieve that, right? But beyond the cost saving, it's about the resource this brings for us to grow. So examples are we've avoid the duplication of many of our suppliers. We are having a professional relationship with our suppliers that leverage the scale of our company as opposed to a lot of different units. And then we are working with our suppliers to prepare for the future, right, in terms of quality, qualification capabilities, how much more we can outsource to them and also geographic diversification of provenance because as we mentioned, especially in JFD, local content becomes a key element of the future. So all this is not just cost saving. It's also being more responsive, being more agile as an organization and being able to face the growth.

Great. And then final question was just for Karen on the debt and the kind of refinancing time frame. Can you remind us when -- and I see you've added another lender, the 7.8% is still quite high interest rate given you've got that financial stability now. Any update you can give on that, please?

Yes. So we constantly look at the right timing to refinance. When we entered into the agreement, it was a 3-year plus extension actually. And we have exercised -- are in the process of exercising those extensions. So we're not in any hurry to refinance. But given our higher rate, as you say, it is something that we are looking at. Given some of the uncertainty in the bank market, we need to decide on the appropriate timing associated with that, but we are looking at it.

[indiscernible] From Panmure Liberum. Three, if I can. Firstly, on tax. It seems a bit of a difference in what you've talked about in terms of full year tax rate versus what you booked in the first half. And what's the driver of that? And is there any opportunity to get the tax rate down? Or is 35% kind of where you're going to end up long term given where you operate and given the nature of the group?

Secondly, what should we be expecting in terms of exceptional or non-underlying items in the second half? And finally, you talked about interest in bolt-on acquisitions. I was wondering whether you could sort of give an indication as to sort of which divisions you're thinking about and what your criteria are? What are you looking for in broad terms?

Maybe I can start with the last one and back to you on the other two. So first of all, I'd like to stress that acquisition is not our priority, right? The statement is if and when it comes an opportunity to either accelerate our growth or fill up, complement our capabilities, we'll look at them, right? But James Fisher is pretty good at partnering with other companies when it comes to capability gaps. So we'll be very pragmatic when we make that decision. But it's more a strategic statement than the fact that we have any plan to do that at this point.

Okay. So firstly, on tax, the makeup of our profit mix across the group obviously determines that rate. And currently, we're in a position that what you're seeing in the rate is reflecting the higher taxes associated with the activities that we have in Brazil for example. We also have -- given the position in the U.K. and some of our interest costs and costs that we incurred in previous years, we have a position whereby we are not recognizing a lot of those losses at the moment. And the third part of it is around some of the withholding taxes that we pay in various countries where we don't have a credit for that at the moment. So you do see some volatility in the tax rate depending on the profit mix and where that lands. As we look forward and we've guided previously around when we start recognizing some of those losses as the U.K. profits come up, the rate would trend downward. So for modeling purposes, we guide to a rate of around that 30% mark.

With regard to the non-underlying position, you'll see in the first half, we had costs on the wind down of our Middle East and Africa businesses that we had highlighted. That is not yet complete. So there may be some additional costs there. And the other item within restructuring is we are undergoing our IT transformation program, so quite a major reorganization associated with our IT function as we seek to ensure that, that is sufficient for us to be able to scale. Obviously, it's a key component of scale with regard to our systems. So the costs incurred on that, and that would continue in the second half too.

But directionally, we would like to avoid these kind of items. Any more questions? All right. So thank you very much for your time, and have all a great day. Thank you.

Good afternoon, ladies and gentlemen, and welcome to the James Fisher & Sons plc Full Year Results Investor Presentation. Questions are encouraged. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself; however, the company can review the questions submitted today and will publish all responses where it's appropriate to do so on the Investor Meet Company platform. Before we dive into the live Q&A session, we would just like to play a recorded presentation covering the results.

Hello, everyone, and welcome to our 2025 full year results earnings call. Well, I'm joined by our Chief Financial Officer, Karen Hayzen-Smith. I will start by going through the key highlights for the year. Then Karen will take us through the financial results, both at group and division level. And I will follow with an update on our business turnaround and how the actions taken over the past 3 years are positioning us for growth. This will be followed by our outlook before we conclude with Q&A.

So let's start with the highlights. 2025 was a turning point for James Fisher. It's marked a year in which our efforts to focus, simplify and deliver have shown results and laid the groundwork for future growth. Over the past 3 years, we have both streamlined and strengthened the group, creating a more resilient business and a coherent platform that can unlock our strategic potential.

In 2025, we delivered a solid financial performance with a 4% uplift in like-for-like revenue and 60 basis points improvement in underlying operating margin to 7.6% as well as a 250 basis points improvement in ROCE to 8.6%.

We ended the year with covenant leverage down to 1.3x at the midpoint of our target range. We have made continued progress on our turnaround and expect further benefits from the initiatives already underway. In addition, we have strengthened our Defense division capabilities where operational readiness is critical. As we look ahead to 2026, the focus, discipline and execution we demonstrated over the past few years will remain. We are investing in new technology and products aligned with our customer-led geographic expansion plans.

Also, as a service company, we are developing a global talent pool that will ensure consistent levels of services delivery around the world. These 3 areas are the hallmark of James Fisher competitive position, and I will come back to this later.

Before we move on, I would like to address the ongoing conflict in the Middle East. James Fisher has operations in the region and our #1 priority is the safety of our people. To that effect, we have mobilized our emergency response team since March 1, working closely with customers to manage this situation responsibly. At this stage, it is too early to estimate the business impact of the conflict, but we are monitoring developments. As a reminder, we have an agile model and are adept at managing change. Over the long term, this flows into focus the increasing importance of energy and maritime security, which are at the intersection of our business.

Let me now give a quick snapshot of James Fisher. Today, our company is organized around 3 divisions: Defense, Energy and Maritime Transport, where we solved our customers' complex challenges in the blue economy. The Defense division supports and rescues lives underwater through our global leadership in submarine rescue, rebreathers and mobility solution for special forces.

Our Energy division provides upstream services across oil and gas and offshore wind. So energy companies can meet increasing demand more efficiently, safely and sustainably. Maritime Transport ensures on-time delivery of refined products through coastal shipping and provides global ship-to-ship transfer of oil and gas cargoes to third parties.

With that, I'll hand over to Karen to take you through the financial results.

Thank you, Jean, and good morning, everyone. As we outlined at the recent trading update, we have continued to make progress, and I'm pleased that we've been able to deliver a solid set of results. Trading followed the usual seasonal trend with a stronger second half and the group managed to replace the majority of profitability lost from the disposals of RMSpumptools and Martek in '24. Our underlying operating profit margin also increased, as we focused on our key improvement levers.

Starting with the headlines. Disposals in '24 and the IRM closures in '25 impacted the financial competitors. So we have chosen to show the movements on the slides adjusted for these. Revenue was up over 4% across the group when compared to '24 with operating profit up just over 56%, resulting in a margin of 7.6%. And net debt improved from the half year, ending the year at GBP 54 million. For covenant purposes, this gives a leverage ratio of 1.3, which is comfortably within our target range. Lastly, return on capital employed also increased to 8.6%, a 250 basis point uplift.

Moving to the next slide, which shows the movements in revenue over the period. Overall, adjusted revenue increased to GBP 377 million, as I said, a 4% uplift. This was from a mix of increased volume in defense and better utilization in Tankships. Moving on to operating profit. As we forecast, we experienced a stronger second half with an increase in profit to GBP 28.6 million, a 56% increase. This was largely due to turning around the decommissioning business that had been loss-making, improved flow-through from execution in defense and a strong finish for Fendercare as well as efficiency savings across the group. We did this whilst continuing to invest in capabilities and transform it to a higher-quality cost base.

The next slide keeps track of the margin improvements we have made over the last few years, demonstrating progress as we move towards an overall profit margin of 10%. As you can see, the margin dropped to around 5% following the disposals, but it has now increased to 7.6%, and we've been able to return to a margin greater than we had predisposals. As some of you will be aware, we have identified 4 levers to increase margins. And in '25, we made incremental improvements in all of these, namely, self-help, cost reductions, supply chain savings, defense volume flow-through and turning around underperforming businesses.

As we turn our attention to revenue growth, we will continue to balance investing in the requirements for growth with margin improvements. I'll now spend a few minutes on the divisions, starting with Defense. The Defense division had a stronger second half as it increased revenue, mainly from a new special forces, tactical diving, vessel contract. Year-on-year revenue increased by around 11% to just under GBP 89 million. The increase in revenue flowed through together with cost and supply chain improvements, increasing operating profit to GBP 5.5 million with an increase in margin to 6.2%. The division has continued to replenish its orders, finishing the year with an order book of GBP 317 million and around GBP 50 million of orders under framework agreements. Together with a GBP 15 million annual run rate in Commercial diving, the division enters '26 with strong revenue coverage.

Moving to Energy. Overall, Energy had a solid year and revenue was up 2% to GBP 141 million. In Energy Services, overall performance improved with a change in the mix across the product lines. Well Services had a solid performance in the first half of '25. But as we flagged in September last year, we experienced some softening in Africa as projects were phased further out. Subsea and decommissioning had a strong performance with continued improvement in the business in the second half.

In Renewables, '25 was steady on the offshore wind construction activities, which uses our Bubble Curtain technology. The blades and cable repair business in the offshore wind aftermarket made progress, but some other areas are not yet performing at our hurdle rates, and we continue to work on these. Despite the ups and downs I've just mentioned, overall operating profit in the division was up around 23% to GBP 17.6 million and margin increased to 12.4%.

Moving on to Maritime Transport, Tankships saw revenue up over 7.5% to GBP 86.5 million, and this was the result of improved rates and good utilization. And the Cattedown business also had a solid year with petroleum and dry cargo volumes remaining pretty consistent through the port. Although Fendercare's revenue was down slightly year-on-year to just over GBP 60 million, it had a strong second half, driven by a high number of operations in South America, reflecting increased activity in the region. It also simplified its site portfolio, positioning to higher-margin areas.

Therefore, overall, the Maritime Transport division delivered operating profit improvement of over 44% to GBP 20.8 million and increased margins to 14%. Just moving on to the income statement. Looking at the breakdown, the full year benefit from the debt reduction and refinancing in '24 can now be clearly seen with finance interest down from just over GBP 16 million to GBP 9.5 million. Interest expense on leases increased in the period by GBP 2 million to GBP 6.4 million, mainly as a result of additional vessel lease interest in Fendercare.

The tax expense on underlying profits from continuing operations for the year is GBP 5 million, with the increase in the prior period being driven by increased taxable profits in higher tax rate countries such as Brazil.

Turning to the cash flow. I will just pick up a few points on this slide. Overall, our operational cash flow improved in the year. We had over a GBP 10 million inflow in working capital, which included strong debtor collection, including recovery of cash on the Mozambique contract, some of which have been outstanding in '24 and also recovery of some historic debt.

Included within working capital, inventory increased by GBP 5 million to support growth contracts. CapEx was GBP 25 million, with spend on new compressors, including building new ones to assist in electrification requirements together with tankships deposits. And we continue to focus on innovation, spending GBP 8 million on development expenditure in the year, which was mainly in relation to new products in the Defense division.

Net finance interest paid was GBP 7.2 million, made up of GBP 9.4 million bank interest with an average interest rate of around 8.5%, offset by GBP 2.2 million of interest income. And then overall, net debt reduced to GBP 54 million at the end of '25.

I'll now look at our borrowing and funding position. On a covenant basis, the net debt-to-EBITDA ratio was 1.3 with interest cover of 6.9x. Right-of-use liabilities increased related primarily to new vessel leases in tankships and Fendercare. And this week, we signed an amendment to our banking facilities with the support of our lenders, adding a new bank to the existing RCF to provide GBP 25 million of additional headroom, increasing our facilities to GBP 117.5 million. Our leverage target remains unchanged even with the additional funding.

The next slide shows our priorities in relation to capital allocation, with the first being to continue to invest for organic growth. Our CapEx, including development expenditure to depreciation ratio was 1.5 for the year. And we have also called out innovation as an investment priority given the focus as a diver for growth, which can take the form of new product developments and also small investments in corporate venture opportunities. We will continue to keep our dividend policy under consideration, and we'll also begin developing our inorganic pipeline. This would be underpinned by ensuring we retain a strong balance sheet and a disciplined approach in investment decisions. Therefore, just wrapping up on the financial update.

We had a strong second half and delivered a solid set of results. We made progress on our turnaround actions. Margins improved through cost efficiencies and supply chain, and we turned around underperforming businesses, and we'll continue to focus on those areas not yet meeting our hurdle rates. Our cash position was strengthened, and we invested for growth whilst maintaining discipline and debt levels. And I'll now hand back to Jean, who can take us through the next presentation.

Over the past 3 years, we have been through a fundamental turnaround for the group. The first 2 years were focused on simplifying the organization with a one company approach, fixing what was broken or missing and stabilizing the business. In 2025, we became a more focused, financially resilient business with a simplified portfolio, a strengthened balance sheet and a clear leadership structure through the One James Fisher operating model.

We also made good progress to define, refine and establish our core business model guided by the voice of the customer. Through leadership and accountability, we have improved our UOP margin and ROCE and exceeded more low-quality and noncore businesses. We are also feeling the impact of our operational and functional investment, including a stronger supply chain, enhanced governance controls and a set of self-help initiatives that are improving efficiency and effectiveness.

The Defense division's order intake has increased and the decommissioning product line within energy returned to profit in 2025. Also, we are now 3 years into implementing our 5-year people strategy, building a vibrant and proactive people management culture while technology and innovation are taking center stage. All these measures and achievements contributed to these improved results.

Let me now take you through our path to reaching our 10% UOP margin, which has been a key measure of our turnaround. We ended 2025 with a profit margin of 7.6%. We are in the process of closing the Subsea Middle East and Africa business. In addition, we turned around the decommissioning business and positioned it for growth. The disciplined self-help programs we launched in 2024 are starting to bear fruit, supporting the divisions as they scale and improve productivity, leading to a higher profit fall-through. Defense made good progress in the second half with a strengthened order book and improved order intake across most product lines. We entered 2026 with the right foundations to focus on operational delivery. The integration of our supply chain delivered GBP 4.6 million of savings in 2025, while also improving key supplier relationships and processes.

Our 3-year supply chain integration plan will continue, allowing us to build our operations in support to our strategy. Beyond this, we see further scope to improve these key metrics as we grow, thanks to market tailwinds, differentiating through our people expertise and technology innovation. Let me now talk you through the growth approach that we are taking. Top line growth will be propelled by 3 engines. First, customer intimacy. We are deepening relationships with Tier 1 customers who already trust us, giving us a strong base to increase share in our existing markets. We're introducing global key account managers to build these relationships and drive higher quality, repeatable business enhanced by product managers who are focused on sharpening the value of our offering.

Second, we are expanding the sale of existing products and services into new geographies, acquiring new customers. In 2025, we entered Japan, Uruguay and the U.S., bringing the full capability and track records of One James Fisher, leveraging subsegments where we can compete effectively, scale and earn attractive returns.

And finally, innovation is a core differentiator and a diver for us. Clients rely on us to solve their complex challenges. And for James Fisher, investing in new products and technologies is critical to increase value across the customer value chain.

Together, these 3 divers provide clarity to deliver targeted growth across the group. Now if I look at the market backdrop, our sales strategy is underpinned by powerful megatrends impacting across all 3 divisions. The first is a sustained long-term growth in global energy demand, now increasingly influenced by energy security with decarbonization and reliability of supply remaining critical necessities.

The second is rising geopolitical tensions alongside accelerating digitalization, which is reshaping how our customers operate with a greater emphasis on local content. As One James Fisher, these trends provide clear tailwinds for our growth focus, which is what I will unpack now for you. We have identified 8 subsegments within defense and across energy with superior growth potential across a range of mature as well as emerging markets. In Defense, this includes submarine rescue, military diving rebreathers for both combat and demining, commercial diving and tactical diving vehicles.

In Energy, they include Bubble Curtains for offshore wind construction, cables and blades repair for offshore wind aftermarket and decommissioning across both oil and gas and offshore wind as well as well testing for oil and gas. In all these segments, which vary in degree of maturity, we compete by bringing disruptive technologies that create substantial values to our customers.

We are investing in our people, strengthening our talent bench to deliver greater consistency of service worldwide. In 2025, we introduced strategic workforce planning and targeted areas of development centered around leadership and technical training. These programs are central to customer service and operational excellence. Our technology and innovation program is centered around disciplined product -- new product development. Our stage-gate process has embedded well, and we have developed 6 new products across all divisions in 2025. The rigor, combined with our entrepreneurial spirit has seen our vitality index increased to 9.9% this year, moving towards our 15% midyear target. To complement our internal efforts, our James Fisher corporate venture practice is scouting for disruptive emerging technologies across the world with entrepreneurial partners who can expand our breadth. In February this year, we made our first investment, securing a minority stake in Ocean Aero, a U.S.-based technology company, which has brought to market the only sustainable automated underwater vehicle in existence today.

Now let's turn back to our division in more detail. In defense, growing geopolitical tensions are translating into increasing defense spending across many markets. And we see this as a long-term trend. Against that backdrop, we expect strong demand for our specialist capabilities, particularly in submarine rescue, military diving and tactical diving vehicles where operational readiness, reliability and interoperability are critical. During the year, we deepened relationships with leading global defense partners in Europe and Indo-Pac through new engagements and strategic wins.

Notably, we secured a material contract with the Polish Navy to deliver a submarine rescue and saturation diving system. And in February, we secured an important long-term service contract in support of our TDVs in Asia. These wins further improve the quality and visibility of our order book. To ensure that we are well positioned to meet the rising market demand, we invested in new service centers across the U.K. and Australia, enhancing both delivery capability and customer proximity.

We are also advancing our technology road map, including the soft launch of our Stealth Multi-Role military diving rebreather. Further developments and enhancements are underway, including for our Carrier Seal Tactical Diving Vehicle used in covert special forces operations as well as our biometric platforms for divers.

On the business development front, we are thrilled by the headway we are making in the U.S. where we have established a Special Security Agreement that allows us direct commercial engagement with the U.S. military. Together with our strategic partnership, including [ SEB ] and Singapore-based ST Engineering, this enhances our ability to serve customers globally. We also have the opportunity to support AUKUS, a security partnership between Australia, the U.K. and the U.S.

Now let's turn to energy. We operate in global energy markets shaped by energy security and decarbonization with oil and gas inherently cyclical as we saw in 2025, when oversupply led to soft level of activities. However, the long-term supply imperative is clear. Global oil demand is expected to grow to 110 million barrels per day by 2035. But in addition, as production rates from existing fields will decline by more than 2/3 by 2035, extra exploration and production effort is required to meet that demand, which is good for oilfield services.

In offshore wind, the industry met some big challenges in 2025, but longer term, the industry is expected to add another 225 gigawatts by 2030, this excluding China. Technology and digitization will be key to improve industry efficiency and meet environmental targets. In addition, an increasing proportion of assets are coming out of warranty for offshore wind, providing us with additional services opportunities.

Against this backdrop, we continue to integrate our offering by providing specialist services across the asset life cycle. In 2025, we expanded our presence in key regions across Asia Pacific and Latin America, securing well test contracts in the Philippines and multi-rig services in Brazil and Suriname. We also expanded our presence in Guyana and Japan, providing commissioning services for Japan's largest offshore wind farm.

We tested the offshore wind market by delivering the first decommissioning project, completing a 10-meter monopile cutting job in the U.S. This is an example of how we can apply our expertise across sectors. Innovation was a priority for energy in 2025 with several products developed or enhanced.

Highlights included next-generation electric air compressors out of Norway. We expanded the use case of -- and capabilities of SEABASS, our game-changing subsea well plugging and abandonment tool. And we further deployed and sea trialed our Cable Guardian solution for offshore wind. Finally, we are expanding our presence geographically with key opportunities in decommissioning and subsea tranching across all regions for oil and gas and renewables.

In offshore wind, Europe is forecast to see the largest increase in construction, creating attractive opportunities for our high-voltage blades and cables offering. At the same time, the scale of industry challenges around cable and blades reinforces the case for targeted investment in disruptive technologies that will increase customer efficiency.

Now turning to Maritime Transport. Conditions for this market remained supportive in 2025 with global vessel supply tightening in Northwest Europe as demand for subintermediate shipping remaining stable. Across the sector, customers are increasingly prioritizing safety, reliability, service quality and decarbonization in line with evolving environmental and safety regulation. Against this backdrop, utilization across our tankship fleet remained high during the year with 80% of fleet on long-term contract.

During the year, we also expanded our ship-to-ship services to Uruguay and acquired additional vessels to consolidate our Caribbean coastal shipping position in tankships. We also signed an agreement to support operations at the U.K. strategic defense base. Looking ahead, fleet modernization in tankship is path critical to our strategy and maintain the franchise. 4 new tankers are scheduled for delivery across 2026 and 2027, perpetuating the James Fisher's name in shipping and supporting our sustainability ambitions while improving operational efficiency.

We are also pursuing selective expansions into new territories and markets within Fendercare with new Fender product introduced in the market in 2025. Finally, our success depends on our ability to scale, maturing our core operating model and deploying our services consistently as One James Fisher. Delivering more consistently will be helped by an integrated supply chain, supported by stronger governance, closer supplier relationships and process consistency and by a more mature manufacturing standardized across all our locations.

We will continue to execute our delivery strategy, managing risk and creating the operational foundation required to support the next stage of growth. Now looking ahead and to summarize what we covered today. We ended the year with stronger foundations and greater clarity on our path forward. Over the past 3 years, the actions we have taken have transformed James Fisher, and we continue to invest in technology, commercial excellence and our people to enable the next phase of our success.

The group operates in largely supportive end markets, while we monitor geopolitical development in the Middle East, in particular, including the potential for more macroeconomic impact. We also now have a stronger financial foundation with increased headroom to allow targeted investment in strategic markets. We entered 2026 as a more focused, resilient and coherent business. We are moving towards our medium-term financial targets of 10% underlying operating profit margin and 15% ROCE. Trading has started in line with management expectation for 2026.

In conclusion, I would also like to acknowledge our colleagues who remain focused on serving our customers, working as One James Fisher and staying responsive in a fast-paced environment. I thank them for their commitment, resilience and passion that is driving our future.

[Operator Instructions] Jean, Karen, as you can see, we have received a number of questions, so perhaps if we dive straight into it. The first question that we have here reads as follows: You launched 6 new products in full year '25 and stepped up development spend, which products are you most excited about? And when should they start to move the needle financially?

So all the products we're developing are exciting in our opinion, some of them are game-changing such as our next-generation rebreather, which essentially bring the industry in a new era. Others are more incremental, but nevertheless, quite in response of specific customer challenges in oil and gas, in particular, which will result into probably very fast revenue response from that. So it's a bit of a mix.

Every time we bring in next-generation products such as the new rebreathers, it will take a little bit of time for the revenue to linger up just by the fact that those products are sold through tenders, those tenders take a few months to a few years. But I would expect to see our vitality from these new product to start kicking in this year, right?

The next question asks, do you expect to do any further portfolio simplification this year?

I think where we are at this stage is where we need to be. We've got still some business to fix within the portfolio, such as offshore wind cable and blades. But in terms of what we have is what we need. And on the other hand, we'll continue to streamline internally to make sure everyone of those activities are kicking up together as opposed to separate businesses. So we still have some internal alignment to work on, which we started 2 years ago to make the management, command and control management more streamlined.

Are you confident that you put a full stop to liabilities arising from the James Fisher Nuclear business?

Yes.

Just turning to the next question. Underlying revenue growth in 2025 was half of that in 2024. Do you see James Fisher's revenue growth rate recovering to 2024 levels in the current year?

2024 was about 8%. So -- but I guess it's about the CAGR, right? So the 2025 revenue was impacted by a mix effect on oil and gas. In prior years we were in a robust cycle of well services around the world as well as Bubble Curtains and both were growing hand-in-hand. So in '25, the well test became a little bit softer. So probably that is an impact on the mix. But this is a normal thing in the oil and gas. I would expect that to resume to the back end of this year.

But not taking into account the effect of Iran, the Iran conflict, which is very hard to assess, right? But if anything, the Middle East prices should be accretive to a normal recovery that we were expecting in well test and well services towards the end of this year. So overall, when I look at energy, it was influenced by that. I think JFD was quite solid in terms of growth. And it's on the back of an order book, which has been growing itself, so that will continue. And then I think in Maritime Transport, we had quite a weak start of Fendercare in the first half that picked up in the second half. And I think if you consider a full year effect, as we see that continuing, we should see the growth in Maritime Transport top line come back more to normal next year, in '26. Yes. So I would expect the top line growth in '26 like-for-like being a bit more punchy than what we had in '25.

We have someone here asking why have corporate costs jumped from GBP 2.8 million in 2021 to GBP 15.3 million in 2025?

Yes. And some of that is to do with the way in which the group is now structured, and we made a conscious decision to have greater visibility on some of that corporate cost. So there is a structural change. But over the last few years, we have also been investing in some core capabilities to help the business grow and scale going forward. And that's in areas such as technology support. We've recruited a Chief Technology Officer and there's a significant impact we've seen on innovation over the 2025 year. We've had to invest in procurement and supply chain. We're building our systems to support our people, whether that's an HR frameworks. So we've actually invested quite a bit to help us scale going forward.

Yes. I think what you're comparing here is 2 completely different models. The James Fisher of yesteryears was essentially managed as a portfolio company, so benign neglect, essentially business left to themselves. So there was no need of central functions. But the result of this was -- and by the way, the growth was fed by acquisitions, financed by debt, which at the time was free, and we saw all where this led, right, total collapse.

So when we arrived, I made very clear that I intended to have this company have a logic. I intended to have this company build on its synergies of a logic portfolio that meant transforming -- bringing up the capabilities to be able to bring the company back to a normal state to be able to essentially grow the company to a level which was never achieved before.

So the difference in the growth that you see today is a growth which is organic, which is built on differentiation and synergies, not through acquisitions. And to be able to be the best at what we do, whether it's technology, a technology that gets adopted and bring us to the next level of quantum of revenue to be able to grow and have consistency of service and compliance across everything we do across the world, we need strong central function. And the investment we're doing will pay off multiple times through the pathway we are on.

Overall, I just want to share with you that the economic model of what we are looking for is probably reaching 35% gross margin, which is much higher than what was before. And maybe SG&A, including central costs of about 20% of revenue at steady state, right? So that should bring us comfortably at or above our 10% underlying operating margin. So we are not investing in central functions and functions in general. It's not just central. Those functions are pretty deep into the organization. We are doing this with a purpose.

The Defense order book has grown to GBP 317 million, but revenue growth in the division was only 11% this year. Given the supportive geopolitical environment and your recent wins like the Polish Navy contract, why is a substantial backlog not converting into top line revenue more rapidly? Are you facing capacity constraints or execution bottlenecks that are slowing down this momentum?

So typically, the order that we get are either OEM type orders. And these have a typical cycle of being delivered between 1 to 3 years. And the rest is services, services start immediately, but they are spread out over longer years, like typically 5 years or more. So you will see a gearing up of the revenue through the acceleration of order intake we took. It just needs to kick start, right? I remind the audience that we were in a trough of about GBR 60-ish million in 2022. We are now in GBR 88 million. Some of this has to do with the phasing of the delivery, but you can expect the translation of the order bump to be reflected into some higher revenue going forward in the nondistant future. I mean any...

Just turning to the next question. You've highlighted the Defense division as a key growth driver. But even with the recent recovery, it's operating margin of 6.2% lags behind the group's 7.6% underlying margin and your medium-term target of 10%. As Defense becomes a larger part of the revenue mix, isn't there a risk that it actually dilutes your progress towards that 10% group wide margin goal? What specific steps are you taking to ensure defense isn't just busy but actually hits the double-digit margins?

Well, the problem of Defense was precisely it was not busy enough. So we were at subscale for the capabilities that we had. And we always shared with the market that for sustaining the capability that we have, the revenue range would be around GBP 100 million plus to get to the 10%, right? So we are getting there. And the jump from GBP 88 million to GBP 100 million, I would expect would come with significant fall-through to the margin and get us at threshold in that growth.

Now we don't intend to stop there. A lot of -- I mean, you can see in the velocity of order intake that we're not going to stop at GBP 100 million. The -- once you start going into the GBP 110 million, GBP 120 million, that's where you need to increase capacity. Now a lot of what we do is subcontracted. So when we say increased capacity, we mean increased sales on the front end, increased translating sales into engineered manufacturing product, but everything else pretty much is subcontracted. So it's about making sure that our supply chain can handle the sudden growth, right? So that's why integrating supply chain, maturing supply chain is so critical path for us.

And as we grow above the GBP 100 million mark, this will be coming from orders from markets such as the U.S. or some large countries in Asia that will ask that we build some of those things in country, which we are planning for, right? So that capacity will naturally grow into those places that become more prominent markets for us. Everything we bid is at rates that are above our thresholds. So we would not go out and bid for things that bring us down below our threshold no matter what. So we see this growth as accretive to the margin even after we reach our level of -- our cruising level of GBP 100 million. I don't see that dilutive at all.

And just sticking with that target of 10% margin, we have a question here, which asks, James Fisher is 3 years into its turnaround. How many years until you meet your targets of 10% margin and 15% ROCE?

Yes. I mean we haven't given a precise target for that. But as Jean said, there's a number of areas that we are working quite hard on. So depending on how conditions work, we could get there within 1 or 2 years. If you look at some of the analyst consensus out there, they would be expecting us to reach that 10% margin within 2 years.

The one thing that we always like to point out, though, is that there's a balance in obtaining that margin because we are continuing to invest for the scale and the growth because obviously, we've got largely supportive markets. We can see that growth coming. So we balance that position and we're continually investing as well. But to give a degree of comfort, a lot of our businesses operate well in excess of 10% anyway. And so that gives us a lot of confidence that we could get to the 10%. There's the areas that we want to fix. As Jean said, there's a few businesses that we need to turn around that would push it up. Volume flow-through will push it up. So I think we have enough levers to be able to get to the 10% in the shorter side of the medium term.

Does the current geopolitical environment increase the requirement for Fendercare services?

I was actually speaking to our team just before this call, Tim, which is here today. It's too early to understand the impact, the magnitude of the impact of -- on Fendercare. I would expect the turmoil to result in there in activities in transfer, a little bit like what we saw in -- during the Ukraine invasion a few years ago. But we haven't -- I mean, we have -- there is a lot of activity on the phone for that. You also have to realize that by choice, we refuse to work for sanctioned cargo. I mean we cannot work for illegal cargo. We also cannot -- we have as a policy that we will not do Russian cargo, right? So a lot of this -- I mean, we've seen some transactions coming through, which we chose not to take because they had to do with Putin sending stuff to India and that we don't touch, right? But in what is within our perimeter, there's a lot of communication with customers going. I would expect this to translate with additional work.

And perhaps one final question here. Can you give more information on the activities you have in the Middle East?

So in the Middle East, the 2 real activity we have are, on the one hand, oil field services, so energy services around well test and decommissioning. That activity has continued, I mean probably 80% of the activity has continued. The only part, which don't have to do with Qatar, which we had -- which was actually closed down, but the rest is going on. I mean it's really playing it by the day, right? Because our priority #1 is to protect our people.

So when a customer comes to us, ask us, okay, let's do -- let's start for that campaign or that job, we sit down together with the customer and map out the security consideration. Do we put our people at risk, what are the evacuation in play?

So it's all around security of the people. And if we feel comfortable with the risk assessment, then we'll go and do the job. But we will turn down jobs that we think are too risky. On the ship-to-ship transfer, since we talked about it a few seconds ago, that activity stood down. At least for us, we chose not to work on ship-to-ship transfer in the Gulf until the situation clarifies. It's just too dangerous. Apart from that, we've had some ongoing Defense activity on diving between diving -- sales of diving sets and also training of the diving fleet across the Emirates and Saudi Arabia and -- so that, of course, is not happening now, but we'll come to action once the conflict subsides, and it will be time to demine the Gulf of Arabia.

And that actually concludes all the questions that have come in this afternoon. So thank you very much indeed for being so generous of your time there, guys, and addressing all of those questions that came in from investors. But apart from that, I will end the session now. Thank you once again for updating investors today.

Hello, everyone, and welcome to our 2025 full year results earnings call, where I'm joined by our Chief Financial Officer, Karen Hayzen-Smith, I will start by going through the key highlights for the year. Then Karen will take us through the financial results, both at group and division level, and I will follow with an update on our business turnaround and how the actions taken over the past 3 years are positioning us for growth.

This will be followed by our outlook before we conclude with Q&A. So let's start with the highlights. 2025 was a turning point for James Fisher. It marked a year in which our efforts to focus, simplify and deliver have shown results and laid the groundwork for future growth. Over the past 3 years, we have both streamlined and strengthened the group, creating a more resilient business and a coherent platform that can unlock our strategic potential.

In 2025, we delivered a solid financial performance with a 4% uplift in like-for-like revenue and 60 basis points improvement in underlying operating margin to 7.6% as well as a 250 basis points improvement in ROCE to 8.6%. We ended the year with covenant leverage down to 1.3x at the midpoint of our target range. We have made continued progress on our turnaround and expect further benefits from the initiatives already underway.

In addition, we have strengthened our Defense division capabilities where operational readiness is critical. As we look ahead to 2026, the focus, discipline and execution we demonstrated over the past 3 years will remain. We are investing in new technology and products aligned with our customer-led geographic expansion plans. Also, as a service company, we are developing a global talent pool that will ensure consistent levels of services delivery around the world.

These 3 areas are the hallmark of James Fisher competitive position, and I will come back to this later. Before we move on, I would like to address the ongoing conflict in the Middle East. James Fisher has operations in the region and our number one priority is the safety of our people. To that effect, we have mobilized our emergency response team since March 1, working closely with customers to manage this situation responsibly.

At this stage, it is too early to estimate the business impact of the conflict, but we are monitoring developments. As a reminder, we have an agile model and are adept at managing change. Over the long term, this throws into focus the increasing importance of energy and maritime security, which are at the intersection of our business.

Let me now give a quick snapshot of James Fisher. Today, our company is organized around 3 divisions: Defense, Energy and Maritime Transport, where we solve our customers' complex challenges in the blue economy. The Defense division supports and rescues lives under water through our global leadership in submarine rescue, rebreathers and mobility solution for special forces.

Our Energy division provides upstream services across oil and gas and offshore wind, so energy companies can meet increasing demand more efficiently, safely and sustainably. Maritime Transport ensures on-time delivery of refined products through coastal shipping and provides global ship-to-ship transfer of oil and gas cargoes to third parties.

With that, I'll hand over to Karen to take you through the financial results.

Thank you, Jean, and good morning, everyone. As we outlined at the recent trading update, we have continued to make progress, and I'm pleased that we've been able to deliver a solid set of results. Trading followed the usual seasonal trend with a stronger second half, and the group managed to replace the majority of profitability lost from the disposals of RMSpumptools and Martek in '24. Our underlying operating profit margin also increased as we focused on our key improvement levers.

Starting with the headlines. disposals in '24 and the IRM closures in '25 impacted the financial comparatives. So we have chosen to show the movements on the slides adjusted for these. Revenue was up over 4% across the group when compared to '24 with operating profit up just over 56%, resulting in a margin of 7.6%. Our net debt improved from the half year, ending the year at GBP 54 million. For covenant purposes, this gives a leverage ratio of 1.3, which is comfortably within our target range. Lastly, return on capital employed also increased to 8.6%, a 250 basis point uplift.

Moving to the next slide, which shows the movements in revenue over the period. Overall, adjusted revenue increased to GBP 377 million, as I said, a 4% uplift. This was from a mix of increased volume in Defense and better utilization in taxes. Moving on to operating profit. As we forecast, we experienced a stronger second half with an increase in profit to GBP 28.6 million, a 56% increase.

This is largely due to turning around the decommissioning business that had been loss-making, improved flow-through from execution in Defense and a strong finish for Fendercare as well as efficiency savings across the group. We did this whilst continuing to invest in capabilities and transforming to a higher quality cost base.

The next slide keeps track of the margin improvements we have made over the last few years, demonstrating progress as we move towards an overall profit margin of 10%. As you can see, the margin dropped to around 5% following the disposals, but has now increased to 7.6%, and we've been able to return to a margin greater than we had predisposals.

As some of you will be aware, we have identified 4 levers to increase margins. And in '25, we made incremental improvements in all of these, namely self-help cost reductions, supply chain savings, defense volume flow-through and turning around underperforming businesses. As we turn our attention to revenue growth, we will continue to balance investing in the requirements for growth with margin improvement.

I'll now spend a few minutes on the divisions, starting with Defense. The Defense division had a stronger second half as it increased revenue, mainly from a new special forces tactical diving vessel contract. Year-on-year revenue increased by around 11% to just under GBP 89 million. The increase in revenue flowed through together with cost and supply chain improvements, increasing operating profit to GBP 5.5 million with an increase in margin to 6.2%.

The division has continued to replenish its orders, finishing the year with an order book of GBP 317 million and around GBP 50 million of orders under framework agreements. Together with a GBP 15 million annual run rate in Commercial Diving, the division enters '26 with strong revenue coverage.

Moving to Energy. Overall, Energy had a solid year and revenue was up 2% to GBP 141 million. In Energy Services, overall performance improved with a change in the mix across the product lines. Well Services had a solid performance in the first half of '25. But as we flagged in September last year, we experienced some softening in Africa as projects were phased further out. Subsea and decommissioning had a strong performance with continued improvement in the business in the second half.

In renewables, '25 was steady on the offshore wind construction activities, which uses our bubble curtains technology. The blades and cable repair business in the offshore wind aftermarket made progress, but some other areas are not yet performing at our hurdle rates and we continue to work on these. Despite the ups and downs I've just mentioned, overall operating profit in the division was up around 23% to GBP 17.6 million and margin increased to 12.4%.

Moving on to Maritime Transport. Tankships saw revenue up over 7.5% to GBP 86.5 million, and this was the result of improved rates and good utilization. And the Cattedown business also had a solid year with petroleum and dry cargo volumes remaining pretty consistent through the port. Although Fendercare's revenue was down slightly year-on-year to just over GBP 60 million, it had a strong second half, driven by a high number of operations in South America, reflecting increased activity in the region.

It also simplified its site portfolio, positioning to higher-margin areas. Therefore, overall, the Maritime Transport division delivered operating profit improvement of over 44% to GBP 20.8 million and increased margins to 14%.

Just moving on to the income statement. Looking at the breakdown, the full year benefit from the debt reduction and refinancing in '24 can now be clearly seen with finance interest down from just over GBP 16 million to GBP 9.5 million. Interest expense and leases increased in the period by GBP 2 million to GBP 6.4 million, mainly as a result of additional vessel lease interest in Fendercare.

The tax expense on underlying profits from continuing operations for the year is GBP 5 million, with the increase in the prior period being driven by increased taxable profits in higher tax rate countries such as Brazil. Turning to the cash flow. I will just pick up a few points on this slide. Overall, our operational cash flow improved in the year. We had over a GBP 10 million inflow in working capital, which included strong debtor collection, including recovery of cash on the Mozambique contract, some of which have been outstanding in '24 and also recovery of some historic debt. Included within working capital, inventory increased by GBP 5 million to support growth contracts. CapEx was GBP 25 million was spent on new compressors, including building new ones to assist in electrification requirements together with Tankships deposits.

And we continue to focus on innovation, spending GBP 8 million on development expenditure in the year, which was mainly in relation to new products in the Defense division. Net finance interest paid was GBP 7.2 million, made up of GBP 9.4 million bank interest with an average interest rate of around 8.5%, offset by GBP 2.2 million of interest income. And then overall, net debt reduced to GBP 54 million at the end of '25.

I'll now look at our borrowing and funding position. On a covenant basis, the net debt-to-EBITDA ratio was 1.3x with interest cover of 6.9x. Right-of-use liabilities increased related primarily to new vessel leases and Tankships and Fendercare. And this week, we signed an amendment to our banking facilities with the support of our lenders, adding a new bank to the existing RCF to provide GBP 25 million of additional headroom, increasing our facilities to GBP 117.5 million. Our leverage target remains unchanged even with the additional funding.

The next slide shows our priorities in relation to capital allocation, with the first being to continue to invest for organic growth. Our CapEx, including development expenditure to depreciation ratio was 1.5 for the year. And we have also called out innovation as an investment priority given the focus as a driver for growth, which can take the form of new product developments and also small investments in corporate venture opportunities.

We will continue to keep our dividend policy under consideration, and we'll also begin developing our inorganic pipeline. This would be underpinned by ensuring we retain a strong balance sheet and a disciplined approach in investment decisions.

Therefore, just wrapping up on the financial update, we had a strong second half and delivered a solid set of results. We made progress on our turnaround actions. Margins improved through cost efficiencies and supply chain, and we turned around underperforming businesses, and we'll continue to focus on those areas not yet meeting our hurdle rates. Our cash position was strengthened, and we invested for growth whilst maintaining discipline and debt levels.

And I'll now hand back to Jean, you can take us through the rest of the presentation.

Over the past 3 years, we have been through a fundamental turnaround for the group. The first 2 years were focused on simplifying the organization with a one company approach, fixing what was broken or missing and stabilizing the business. In 2025, we became a more focused financially resilient business with a simplified portfolio, a strengthened balance sheet and a clear leadership structure through the One James Fisher operating model.

We also made good progress to define, refine and establish our core business model guided by the voice of the customer. Through leadership and accountability, we have improved our UOP margin and ROCE and exceeded more low quality and noncore businesses. We are also feeling the impact of our operational and functional investments, including a stronger supply chain, enhanced governance controls and a set of self-help initiatives that are improving efficiency and effectiveness.

The Defense division's order intake has increased and the decommissioning product line within energy returned to profit in 2025. Also, we are now 3 years into implementing our 5-year people strategy, building a vibrant and proactive people management culture while technology and innovation are taking center stage. All these measures and achievements contributed to these improved results.

Let me now take you through our path to reaching our 10% UOP margin, which has been a key measure of our turnaround. We ended 2025 with a profit margin of 7.6%. We are in the process of closing the Subsea Middle East and Africa business. In addition, we turned around the decommissioning business and positioned it for growth. The disciplined self-help programs we launched in 2024 are starting to bear fruit, supporting the divisions as they scale and improve productivity, leading to a higher profit fall-through.

Defense made good progress in the second half with a strengthened order book and improved order intake across most product lines. We entered 2026 with the right foundations to focus on operational delivery. The integration of our supply chain delivered GBP 4.6 million of savings in 2025, while also improving key supplier relationships and processes.

Our 3-year supply chain integration plan will continue, allowing us to build our operations in support to our strategy. Beyond this, we see further scope to improve these key metrics as we grow, thanks to market tailwinds, differentiating through our people expertise and technology innovation.

Let me now talk you through the growth approach that we are taking. Top line growth will be propelled by 3 engines. First, customer intimacy. We are deepening relationships with Tier 1 customers who already trust us, giving us a strong base to increase share in our existing markets. We're introducing global key account managers to build these relationships and drive higher quality, repeatable business enhanced by product managers who are focused on sharpening the value of our offering.

Second, we are expanding the sale of existing products and services into new geographies, acquiring new customers. In 2025, we entered Japan, Uruguay and the U.S., bringing the full capability and track records of One James Fisher, leveraging subsegments where we can compete effectively, scale and earn attractive returns.

And finally, innovation is a core differentiator and a driver for us. Clients rely on us to solve their complex challenges. And for James Fisher, investing in new products and technologies is critical to increase value across the customer value chain. Together, these 3 drivers provide clarity to deliver targeted growth across the group.

Now if I look at the market backdrop, our sales strategy is underpinned by powerful megatrends impacting across all 3 divisions. The first is a sustained long-term growth in global energy demand, now increasingly influenced by energy security with decarbonization and reliability of supply remaining critical necessities.

The second is rising geopolitical tensions alongside accelerating digitalization, which is reshaping how our customers operate with a greater emphasis on local content. As One James Fisher, these trends provide clear tailwinds for our growth focus, which is what I will unpack now for you.

We have identified 8 subsegments within defense and across energy with superior growth potential across a range of mature as well as emerging markets. In defense, this includes submarine rescue, military diving rebreathers for both combat and demining, commercial diving and tactical diving vehicles.

In energy, they include bubble curtains for offshore wind construction, cables and blades repair for offshore wind aftermarket and decommissioning across both oil and gas and offshore wind as well as well testing for oil and gas. In all these segments, which vary in degree of maturity, we compete by bringing disruptive technologies that create substantial values to our customers.

We are investing in our people, strengthening our talent bench to deliver greater consistency of service worldwide. In 2025, we introduced strategic workforce planning and targeted areas of development centered around leadership and technical training. These programs are central to customer service and operational excellence.

Our technology and innovation program is centered around disciplined product, new product development. Our stage-gate process has embedded well, and we have developed 6 new products across all divisions in 2025. The rigor, combined with our entrepreneurial spirit has seen our vitality index increased to 9.9% this year, moving towards our 15% midyear target.

To complement our internal efforts, our James Fisher corporate venture practice is scouting for disruptive emerging technologies across the world with entrepreneurial partners who can expand our breadth. In February this year, we made our first investment, securing a minority stake in Ocean Aero, a U.S.-based technology company, which has brought to market the only sustainable automated underwater vehicle in existence today.

Now let's turn back to our division in more detail. In defense, growing geopolitical tensions are translating into increasing defense spending across many markets, and we see this as a long-term trend. Against that backdrop, we expect strong demand for our specialist capabilities, particularly in submarine rescue, military diving and tactical diving vehicles where operational readiness, reliability and interoperability are critical.

During the year, we deepened relationships with leading global defense partners in Europe and Indo-Pac through new engagements and strategic wins. Notably, we secured a material contract with the Polish Navy to deliver a submarine rescue and saturation diving system. And in February, we secured an important long-term service contract in support of our TDVs in Asia. These wins further improve the quality and visibility of our order book.

To ensure that we are well positioned to meet the rising market demand, we invested in new service centers across the U.K. and Australia, enhancing both delivery capability and customer proximity. We are also advancing our technology road map, including the soft launch of our Stealth Multi-Role military diving rebreather. Further developments and enhancements are underway, including for our Carrier Seal Tactical Diving Vehicle used in covered special forces operations as well as our biometric platforms for drivers.

On the business development front, we are thrilled by the headway we are making in the U.S. where we have established a special security agreement that allows us direct commercial engagement with the U.S. military. Together with our strategic partnership, including Saab and Singapore-based ST Engineering, this enhances our ability to serve customers globally. We also have the opportunity to support AUKUS, a security partnership between Australia, the U.K. and the U.S.

Now let's turn to energy. We operate in global energy markets shaped by energy security and decarbonization with oil and gas inherently cyclical as we saw in 2025, when oversupply led to soft level of activities. However, the long-term supply imperative is clear. Global oil demand is expected to grow to 110 million barrels per day by 2035.

But in addition, as production rates from existing fields will decline by more than 2/3 by 2035, extra exploration and production effort is required to meet that demand, which is good for oilfield services. In offshore wind, the industry met some big challenges in 2025, but longer term, the industry is expected to add another 225 gigawatt by 2030, this excluding China.

Technology and digitization will be key to improve industry efficiency and meet environmental targets. In addition, an increasing proportion of assets are coming out of warranty for offshore wind, providing us with additional services opportunities. Against this backdrop, we continue to integrate our offering by providing specialist services across the asset life cycle.

In 2025, we expanded our presence in key regions across Asia Pacific and Latin America, securing well test contracts in the Philippines and multi-rig services in Brazil and Suriname. We also expanded our presence in Guyana and Japan, providing commissioning services for Japan's largest offshore wind farm. We tested the offshore wind market by delivering the first decommissioning project, completing a 10-meter monopile cutting job in the U.S. This is an example of how we can apply our expertise across sectors.

Innovation was a priority for energy in 2025 with several products developed or enhanced. Highlights included next-generation electric air compressors out of Norway. We expanded the use case of -- and capabilities of Seabass, our game-changing subsea well plugging and abandonment tool. And we further deployed and sea trialed our cable guardian solution for offshore wind.

Finally, we are expanding our presence geographically with key opportunities in decommissioning and subsea trenching across all regions for oil and gas and renewables. In offshore wind, Europe is forecast to see the largest increase in construction, creating attractive opportunities for our high-voltage blades and cables offering. At the same time, the scale of industry challenges around cable and blades reinforces the case for targeted investment in disruptive technologies that will increase customer efficiency.

Now turning to Maritime Transport. Conditions for this market remains supportive in 2025 with global vessel supply tightening in Northwest Europe as demand for subintermediate shipping remaining stable. Across the sector, customers are increasingly prioritizing safety, reliability, service quality and decarbonization in line with evolving environmental and safety regulation.

Against this backdrop, utilization across our tankship fleet remained high during the year with 80% of fleet on long-term contract. During the year, we also expanded our ship-to-ship services to Uruguay and acquired additional vessels to consolidate our Caribbean coastal shipping position in tankships. We also signed an agreement to support operations at the U.K. strategic defense base.

Looking ahead, fleet modernization in Tankship is path critical to our strategy and maintain the franchise. 4 new tankers are scheduled for delivery across 2026 and 2027, perpetuating the James Fisher's name in shipping and supporting our sustainability ambitions while improving operational efficiency. We are also pursuing selective expansions into new territories and markets within Fendercare with one new Fender product introduced in the market in 2025.

Finally, our success depends on our ability to scale, maturing our core operating model and deploying our services consistently as One James Fisher. Delivering more consistently will be helped by an integrated supply chain, supported by stronger governance, closer supplier relationships and process consistency and by a more mature manufacturing standardized across all our locations.

We will continue to execute our delivery strategy, managing risk and creating the operational foundation required to support the next stage of growth. Now looking ahead and to summarize what we covered today. We ended the year with stronger foundations and greater clarity on our path forward. Over the past 3 years, the actions we have taken have transformed James Fisher, and we continue to invest in technology, commercial excellence and our people to enable the next phase of our success.

The group operates in largely supportive end markets, while we monitor geopolitical development in the Middle East, in particular, including the potential for more macroeconomic impact. We also now have a stronger financial foundation with increased headroom to allow targeted investment in strategic markets. We entered 2026 as a more focused, resilient and coherent business. We are moving towards our medium-term financial targets of 10% underlying operating profit margin and 15% ROCE. Trading has started in line with management expectation for 2026.

In conclusion, I would also like to acknowledge our colleagues who remain focused on serving our customers, working as One James Fisher and staying responsive in a fast-paced environment. I thank them for their commitment, resilience and passion that is driving our future.