Annual Report & Financial Statements 2016 A diverse and forward- looking family business delivering personal, responsive and flexible customer solutions for over 200 years 2 Our Values People are the most important part of our business; we deliver on our objectives by living our values. This means each of us, at all times, strives to: Work together Be better We understand the common long-term goals across our We challenge ourselves businesses, customers, to be the best, finding new suppliers and people and ways to improve everything we work towards them we do today as a team Trust each other Be innovative We trust and empower We do everything possible our people to deliver the right to look ahead, to anticipate outcomes for our customers customer needs and and our business deliver innovative solutions Do the right thing At all times we do the right thing, providing a quality and safe service, acting responsibly for our people, customers and the communities in which we work Living our Values enables us to deliver excellent customer service. We give our people the right environment, role and tools to deliver excellence and quality in everything we do. 3 4 Contents Navigate to section by clicking on the title Chairman’s Statement 2016 6 Strategy and Operations 10 Corporate Strategy Objectives 11 Managing Director’s Review 12 Business Reviews Bibby Offshore 16 Bibby Financial Services 20 Bibby Distribution 24 Costcutter 26 Marine 30 Other businesses 34 Giving Something Back 36 Risk Management 38 Risk Framework 39 Principal Risks and Uncertainties 40 Corporate Governance 42 Directors’ Report 45 Statement of Directors’ Responsibilities 47 Independent Auditor’s Report to the members of Bibby Line Group Limited 48 Consolidated Financial Statements 49 Group Profit and Loss Account 50 Group Statement of Comprehensive Income 50 Group Balance Sheet 51 Group Cash Flow Statement 52 Group Statement of Changes in Equity 53 Notes to the Consolidated Financial Statements 54 Company Financial Statements 70 Company Balance Sheet 71 Company Statement of Changes in Equity 72 Notes to the Company Financial Statements 73 Accounting Policies 78 5 Chairman’s Statement 2016 KPIs at a glance Turnover (£ million) 2013 2016 1,592 1,7 15 1,442 1,203 Profit before tax (£ million) Capital investment (£ million) 2013 2016 2013 2016 69 47 30 (66) 44 54 45 59 £467,000of charitable giving 6 < CONTENTS Whilst our 2016 results are adversely impacted by challenging conditions in Offshore, we saw significant improvement in the majority of our businesses. FINANCIAL RESULTS While Bibby Offshore has consumed BIBBY LINE GROUP BOARD As expected, 2016 was a challenging some of its cash reserves in sustaining As noted in last year’s accounts, 2016 year for Bibby Line Group, principally those losses, it has not affected the rest saw our Finance Director, Jon Haymer, because of tough conditions in our of the Group’s balance sheet, cash step down from the board, the Offshore business. Notwithstanding the availability or funding. appointment of Mark Lyons as Chief difficult conditions in Offshore our focus The Group holding company Financial Officer, and Caroline Hoare has remained on improving ended the year with cash balances of joining as a Non-Executive Director. performance across our portfolio of £19.9 million (2015 – £11.8 million). The board conducted a performance businesses, on developing our products assessment which concluded that the where we have real points of difference, CORPORATE TRANSACTIONS board is finding the right balance and on consolidating markets where In March 2016 Bibby Ship Management between support and challenge of the there are opportunities to do so. was sold to a market leader in the global executive. The diversity of experience As a result, there were significant ship management sector. and perspectives of board members improvements in the like for like In December 2016 we took advantage contributes to high quality consideration performance of our Financial Services, of an offer from another recruitment of issues and opportunities. Distribution and Retail businesses. specialist to dispose of Direct Workforce, Divestment of a number of a sub-division of Bibby Distribution CORPORATE SOCIAL RESPONSIBILITY businesses in 2015 and early 2016 also focused on recruitment in the transport Bibby Line Group’s ‘Giving Something contributed to a reduced turnover for and logistics sector. Back’ programme is a source of immense the Group. The Group incurred a loss pride within the company, with our before tax of £65.6 million (2015 – profit colleagues across the globe making a before tax of £29.6 million), our first loss huge difference to their local since 1987. communities through their volunteering Net assets (£ million) 297.8 280.3 257.0 235.7 220.2 202.4 200.3 175.3 183.0 152.4 143.7 133.7 105.7 97.5 87.9 88.2 84.7 72.7 78.4 63.9 50.4 53.7 37.9 42.1 45.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 < CONTENTS 7 CHAIRMANS STATEMENT 2016 Turnover by class of business 52% Bibby Line Group has benefited from being a family business for over 200 years, bringing stability 16% 13% 13% and a long-term perspective to 3% 3% the company, great strengths to have in these turbulent times. Retail Other Marine Services Offshore Financial Distribution and fundraising. Together with our A FAMILY BUSINESS employees in 2016, £412,000 was Bibby Line Group has benefited from donated to charity through the Giving being a family business for over Something Back programme (plus an 200 years, bringing stability and a additional £55,000 of corporate long-term perspective to the company, donations), bringing the total since the great strengths to have in these programme was launched in 2007 to turbulent times. over £9.3 million. 2017 marks the 10th The family is directly involved in the anniversary of the programme, and we business, with Sir Michael Bibby at the hope to break the £10 million level in helm of the company and Geoffrey the near future. Bibby as a non-executive family director on the main Group Board. BIBBY LINE GROUP VALUES We welcomed the opportunity to labour, customs and tariffs in moving our The challenges faced by a number of have members of the 7th generation vessels, goods and people across our businesses has inevitably meant that of the Bibby family spend time in the borders, and “passporting” in financial they have had to reduce their workforce business gaining work experience, as services all remain uncertain and with the overall average number of well as taking part in specific events, represent potential risks that will need to persons employed during the year falling designed to develop a deeper be actively managed. from 6,224 to 4,934 (or a reduction from understanding and engagement Given the losses over 2016 and the 5,097 to 4,747 if the Bibby Ship with our activities. poor state of the offshore oil services Management staff are excluded). market today, particular risks surround Implementing these decisions in the BUSINESS RISKS the future outlook for our offshore best way possible while maintaining the Recent world events, notably the UK business, and these risks need to be commitment and motivation of remaining triggering Article 50 to leave the carefully managed through 2017. colleagues has been a priority for European Union and the US presidential leadership across all the businesses. Our election, have created considerable OUTLOOK values have never been so important. uncertainty for UK-based businesses. We approach 2017 with confidence in Against this background I have been The weak pound has encouraged our strategy. While we expect that really impressed by the passion and exports but made goods and services energy related markets will remain commitment of the staff I have met in more expensive to import. We will extremely challenging, we confidently whichever part of the business they work. continue to assess the impact of leaving expect further improvements in financial Our corporate values are evidently well the EU single market on our businesses performance of our key subsidiaries. embedded in our ways of working, with as negotiations progress over the next We will continue to be prudent in our people demonstrating them on a two years. managing our cash, cost base and risks, daily basis to offer personal, responsive We are determined to make a but we are ready to take advantage of and flexible customer solutions across our success of our business as the country market opportunities as they arise. different markets. I would like to thank goes through the Brexit process, and all my Bibby Line Group colleagues across the opportunities it may bring. However Paul Drechsler CBE the world for all of their efforts in 2016. the impact on access to international Chairman 8 < CONTENTS Bibby Offshore Remotely Operated Vehicle (ROV) entering the water < CONTENTS 9 Strategy and Operations 11 Corporate Strategy Objectives 12 Managing Director’s Review 16 Business Reviews 36 Giving Something Back 10 < CONTENTS Corporate Strategy Objectives The Corporate Strategic Objectives are: 1. To maximise the long term value of shareholders’ funds by achieving a compound growth rate in shareholders’ funds over a seven year cycle of not less than 12%. 2. To keep a business portfolio capable of generating recurring earnings and a dividend flow to the holding company to provide security against cyclical downturns in any particular market. 3. To attract, motivate and retain high quality personnel. Bibby Line Group Limited is the parent order to meet the Group’s objective of 4. To maintain our excellent company of a group of trading building long term shareholder value reputation for high quality, businesses.