I'm here joined with Duncan Kennedy, our CFO. Good morning, everyone. Thank you for attending our 2022 earnings call. After providing an update on our debt refinancing, which we announced earlier this Wednesday, we will spend some time reviewing the 2022 results and share some updates on 1Q 2023 trading and the nice momentum we see in the business this year. I will talk through my first months in the company that led to a plan to regain credibility by fixing the operating model of the company through focus, simplification and better execution. This is a turnaround program which will take up to 36 months, but will put James Fisher in a position to pursue its strategic potential and fully realize market opportunities that we see in front of us.
In 2022, James Fisher revenue grew 8% year-on-year, while we stabilized our operating profit to GBP 26.4 million, down from GBP 28 million in 2021. Business is stabilizing and management is focusing. We completed several divestitures of non-core businesses to the back end of the year, and the sale of a heavy asset through to January, which in aggregate helped deliver GBP 35 million of debt. We made some changes in upper management, bringing experience and accountability. We simplified the company down to three divisions: energy, defense, and maritime transport. We also created a smaller, more cohesive executive team, focusing the organization behind the banner of One James Fisher. We embarked on an overall discipline in capital allocation while tightening our governance programs.
Some self-help in Fendercare and JFD resulted in GBP 3 million annual savings. The adoption of Lean by RMSpumptools helped the business to deliver some spectacular growth in 2022. I am glad to see the momentum toward the back end of the year accelerating into the first quarter of 2023. I'm also glad to see how our management has stepped up to face our challenges. As you have seen earlier this week, we have reached an agreement with our existing six lenders to refinance our borrowing facilities. Our successful non-core disposal program has enabled us to further reduce the amount of our commitments, which we need from our lenders, to GBP 210 million from the existing GBP 247.5 million. While it was GBP 287.5 million in the summer of 2021.
The new facility is secured, and we have some work to do post-signing to put the required security package in place. Our existing facilities and waiver remain in place to allow us to complete these steps. We expect to finalize and sign the long-form loan documentation in the next couple of weeks and to complete all conditions precedent by early June. The final point on our refinancing is really to thank our lenders for their support and very constructive work with us as we agreed to this deal in a very short timeframe. The new facility give us the stability required to continue to deliver on our plans. Now turning to trading in 2023 year to date, we are also pleased with the performance to date. The group is showing strong revenue growth against 1Q 2022 and continued good momentum across the portfolio.
We have been able to turn around an operating loss last year in 1Q 2022 to a profit in 2023, with all divisions being profitable. I am turning back to Duncan to go more deeply in the results.
Thanks, Jean, and thank you everyone for joining us this morning. I'll just run through the 2022 results in a little more detail. The group delivered GBP 478.1 million of revenue from its continuing operations. This was an improvement of 8.1% over 2021. Operating profit was GBP 24.7 million compared to an operating loss of GBP 20.7 million in 2021. This follows a significant reduction in 2022 in adjusting items. Our underlying operating profit was GBP 26.4 million compared to GBP 28 million in 2021. We delivered good results in three of the four divisions, being Marine Support, Offshore Oil, and Tankships. As discussed at our interim results, JFD had a tough year.
It's at a trough in its long-term projects. We've taken some additional provisions around one specific contract. Essential costs are also slightly increased on last year. This includes some additional audit fees, which came following the previous delay of our results, our refinancing activities, and the sheer volume of corporate activity we've undertaken during 2022. Our underlying operating margin's slightly down on 2021. This is a significant focus for our executive committee, Jean and I, during 2023. Our discontinued operations reflects the trading losses and asset impairments relating to the James Fisher Nuclear business that was sold in early March 2023. Turning to our financing and tax. Our financing costs increased by GBP 2.1 million in the year.
That's following the steady increase in bank base rates, the higher leverage that the group showed at the half year pricing point in June 2022. We also had a five-year interest rate swap that was at 0.7% that matured during Q4 in 2022. We did replace that with a new swap but at a higher rate of around 2.3%. Our effective tax rate on underlying profits was just over 28%. With the increase in the U.K. corporate tax rate from 19% to 25% from the first of April this year, we'd expect that effective tax rate to remain in the high twenties going forward. Turning briefly to cash flow.
We were able to show a modest reduction in our net bank borrowings during 2022 from around GBP 140 million at the end of 2021 to GBP 133 million at the end of 2022. Key movements in the year were a modest increase in working capital, caused really by the higher levels of demand, particularly in RMSpumptools, which caused us to build inventory compared to the December 2021 position. Reductions in both debtors and creditors within our working capital balances broadly offset each other. We generated net proceeds of just over GBP 17 million from the sale of three businesses and from the sale of an end-of-life tank ship. In 2021, the GBP 21 million of net proceeds relate to the sale of the Paladin dive support vessel and two non-core businesses.
Perhaps worth pointing out that in early 2023, we received GBP 20 million from the sale of the Swordfish dive support vessel. That came into the 2023 financial year although the transaction was agreed right at the end of 2022. In terms of acquisitions, we made a couple of payments in relation to a historic acquisition in Brazil and also an option payment on a really interesting U.K. renewables company. CapEx was increased year-on-year as the board approved a significant investment in the ScanTech bubble curtain compressors. New compressors were completed and delivered earlier this month and are already heading out on customer projects as we stand here today. At the end of 2022, our leverage was 2.7 times, showing some progress during the year.
We could have made a little more progress if we'd been able to secure the Swordfish funds slightly earlier. 2 weeks would have done it. And as Jean mentioned earlier, we're really pleased to have reached agreement with our banks on new revolving credit facilities. Those facilities align with our deleveraging plans and reflect current market pricing and the overall financial position of the group. Fair to say, overall, as an executive committee and a board, we remain very focused on continuing to deleverage the group and the new RCF structure is designed to support us in doing that. Turning to our divisional performance. This slide summarizes the continuing operations from our four divisions.
I guess as a reminder, you'll hear more from Jean on this later, this is the last time that our financials will be presented in this four-division format. Our future results will reflect the new reporting segments of energy, defense, and maritime transport. You can see here overall, we saw good results in three of the four divisions, let me now run through some of the operating performance in a bit more detail. The Marine Support division showed good progress during the year. Our subsea businesses posted an aggregate operating profit for the first time since 2018, we delivered the sale of the Swordfish dive support vessel right towards the end of the year. Had it not been for some late customer project cancellations in mid-year, the results from our subsea operations could have been significantly better in 2022.
Looking at Fendercare, we're certainly seeing an emerging opportunity in LNG ship-to-ship transfer services. That business has now secured 4 retainer agreements from top-tier customers, which guarantee them access to our equipment and services. Early in 2023, we also approved the acquisition of an additional LNG ship-to-ship transfer kit to help meet this growing demand. In the crude oil market, SGS has stabilized after market disruptions, both positive and negative for us in the last 3 years. We believe current levels of trade represent a base level of demand. There's been much change in the Fendercare business. As Jean mentioned, that includes a cost reduction exercise in the first half of last year and a change in leadership early in 2023. That new team's coalescing around continued commercial and service delivery excellence.
Our renewables business, EDS, generated strong revenue growth, but as we mentioned at half year, there was some significant staff disruption early in 2022, which has now been stabilized. That had a detrimental effect on its margins in the full year. Again, new leadership has been placed into this business since January, and we're seeing continued good revenue growth in early 2023, and a path back to good margins from that business. Its operational performance has been good. We have four long-term offtake contracts now in place with EDS delivering operations and maintenance services for UK wind farms. We see the level of global activity in our tendering activities, which includes significant opportunities in the Far East, that if won, could provide really significant new revenue opportunities from 2025 onwards for similar long-term O&M services as we're providing in the UK.
Looking at the continuing operations of the Specialist Technical division, that's now JFD, so our defense business. You can see it had a tough year. Order intake on our commercial and military products was not high enough to compensate for the completion of long-term projects, and the business delivered a disappointing break-even performance in 2022. As we mentioned at our interim results, we did have some challenges with one of our long-term service contracts, and that's adversely affected the performance in the year. Additional costs were incurred, we've ensured that we provided for additional remediation activities in our 2022 results. That team is working tirelessly to complete the required actions to bring that contract back on track.
Following a few months of non-payment, pleased to report that our customer has started paying our invoices and the project seems to be getting back on track. JFD has new leadership in place and they have also made it their priority to engage early with this key customer and to ensure that this contract gets back on track. On the positive side, JFD was awarded the third generation of the NATO Sub-Rescue Services contract, which really cements its place as NATO's supplier of choice. This contract could run for up to 9 years and could generate up to GBP 63 million in revenue over that time at good margins. There are additional service opportunities that that contract could also bring, and it comes into effect in July of 2023. We saw an increase in inquiries for JFD's swimmer delivery vehicles.
We were able to secure one sale in 2022, and there are ongoing discussions with customers around potential orders for 2023. The JFD team is working hard to convert other potential sales leads across their business. They have a good forward order book in excess of GBP 240 million, of which roughly GBP 50 million of revenue would come in 2023, and the sales pipeline remains robust. There are GBP 250 million worth of well-qualified and relatively near-term sales opportunities that could help drive growth and restore JFD's place as a key contributor to our overall operating performance. The Offshore Oil division had a very strong 2022. Demand for well testing, bubble curtains, and artificial lift products was high on the back of increased activity in the oil and gas sector.
The ScanTech businesses delivered 18% revenue growth in 2022 against that strong demand. Those two businesses are now increasingly focused on the pooling of their assets and their field crews to drive continued improvements in service delivery and asset utilization during 2023. As I mentioned earlier, the board was pleased to approve an investment in new clean energy, efficient compressors to support the future of this business. The first of those new assets were already deployed on bubble curtain projects in the U.S. RMSpumptools, which designs, manufactures, and sells high-end artificial lift technology that promotes the extension of well lives, experienced a record year, delivering a really impressive 43% revenue growth. The business is investing in its future with the opening of a manufacturing facility in Saudi Arabia that will specifically focus on servicing that region.
It closed the year with a record order book. The group's decommissioning business showed modest growth, but importantly, towards the end of 2022, we were able to deploy our SEABASS well abandonment technology for the first time on a customer project. Project went well, the team's focused on building market demand for this differentiated tool. We've also implemented a proprietary system that verifies the effectiveness of pipe cutting in real time, which we believe will deliver cost efficiency to the customer as the need for rework and redeployment of cutting equipment is much reduced. We still see a really interesting and potentially significant market opportunity in the decommissioning space, but it still remains a relatively small part of our portfolio. Finally, from a divisional perspective, Tankships division delivered really well on an expected recovery after the COVID disrupted 2021.
Our fleet utilization was improved and day rates on the spot market were strong. The fleet renewal strategies continued with the delivery of the two new dual-fuel tankers now completed. The Sir John Fisher was delivered in November 2022, and the Lady Maria Fisher early in 2023. Both are now active in the market. Really pleasing recovery from this business, which in the absence of pandemics, has always delivered a really solid underpin to our group performance. With that, I'll hand back to Jean to take you through some reflections on his first few months in the role, and to provide a view of our direction in 2023 and beyond.
Thank you, Duncan. When I joined, I ran a deep dive into the organization to understand its DNA, its purpose, and its values, and really what makes our employees join this company and stay in the company, so I could understand how we differentiate, how we can deliver to our full potential, and I would like to share with you what I found. I did this because I know that we will do a lot of changes in the months ahead to build a strong business platform. We do not want to break the things that work, and we must preserve the unique features that makes James Fisher so special in the eyes of the customers. The first observation is the resounding response I got from the employees. They joined, and they are here because they have a special thing for the seas and the oceans.
They feel they can make a difference, and this love of the sea is joined with being part of a team of entrepreneurial innovators, who for two centuries brought to market unconventional technologies and services and adapted to multiple industrial revolution. The second observation is that we are fundamentally in attractive markets, driven by a growing need for energy that must be clean and a safe source of supply. While at the same time, underwater defense is the quickest way for nations to improve deterrence in a world of increasing geopolitical tensions. The third observation is that customer trust is a license to exist. For the customers like us, they like us because we bring some real original thinking to the plate. James Fisher is intimate with the customers and kindly responsive.
Flair and business acumen allow this company to be first to market many time over and create diversified high-quality revenues to offset adverse cycles and commoditization. Finally, through our history, our culture of financial prudence always required to secure committed streams of revenue before committing to debt. During most of our lives in James Fisher, the company was asset light as well. It's only when we tripped up our own culture, our own code of conduct, that we got in trouble. The first step is to fix our challenge by applying that common sense old Fisher culture to the plate. The reset that was started in 2021 provided the right framework. What's different now is that we're obsessive to drive results. This started imprinting since September, and we're starting to show some early results.
In order to focus, which is the first point, we must first be clear about who we are, and most of our colleagues have a vision and a passion to the seas, for the seas. This is the environment James Fisher operates in. It's the blue economy. It's the largest element of stability for our planet ecosystem. It spans across so many sectors of the world economy. Oceans have almost limitless resources, provided that marine activities become less invasive and more sustainable. Within that framework, our vision is to be a key contributor to that transformation, and our purpose is to bring to this ecosystem a way to tackle the most complex problems in the most extreme environment by deploying unconventional, original engineering solutions. Our mission today is to dedicate our talents to energy, defense, and maritime transports.
In summary, James Fisher is an engineering problem solver that deploys people, products, technology in order to service maritime assets. Anything which does not meet these two or three criterias of engineering, conveyance, and marine is a distraction and does not belong. The following slide is to help understand how the new organization is reshuffled. The old Offshore Oil division joins Marine Support to create the Energy division. Fendercare moves from Marine Support to maritime transport. Following the sale of James Fisher Nuclear, the old Specialist Technical division is now Defense. Let's review our market verticals. Energy is going to see a 25% growth energy demand over the next 20 years, driven by population growth and higher standards of living. All the growth in energy demand is coming from emerging markets in China.
For supply to meet that demand, energy will need to be more efficient and more secure, it must be cleaner for us to survive climate change. We are intentionally playing our part in this imperative. James Fisher has a portfolio and service provision that stretches across the life cycle of both oil and gas and renewables. In oil and gas, we improve customer reservoir utilization and production asset efficiency through their life cycle. We focus on efficiency from already proven assets, which in turn allow customers to reduce their emissions footprint and reduce their need to drill for more reserves. When customers do choose to drill, and they complete their wells and they put them into production, we offer top-tier services that help them with certainty for a safe, high quality, and environmentally friendly lens.
As far as renewables, the predicted offshore wind growth in capacity from 50 gigawatts last year to 1,000 gigawatts by 2040 will require much more supply chain capacity than is available today. The construction of wind farms is a key part of our business, the aftermarket, the operating and maintenance space, is where the longer-term revenues will be available for us, as we are well-placed to take advantage of these. We will look to secure a larger share of predictable long-term O&M aftermarket in offshore wind. Now let's talk about defense. Sadly, the post-Cold War peace dividends are over, subsea is the new battle space. Deterrence drives enduring increase in defense budgets across NATO and partner nations. Their spend is prioritized in areas where GFS operates.
We also see faster procurement cycles, leading to an acceleration of opportunities for our products and services. In defense, our core is all around life support and life-saving technologies for military personnel. We have a set of skills around hyperbaric systems, rebreathers, around transfer of divers under pressure underwater that are very difficult to replicate in the marketplace. We also got some real complementary portfolio in our business between submarine rescue, submarine ingress and egress technologies, rebreathers, special operation mobility solution, all have a lot of overlap and can be bundled. We are very well-positioned compared to more generalist, larger defense companies. Going into maritime transport, which is made of two distinct businesses, the coastal shipping business and the STS business. The coastal shipping business is highly contracted, ensuring consistent cash flows.
We hold longstanding close relationship with our key customers and consistently provide a safe and reliable service to them. We are evolving our fleet to be more sustainably friendly. We can see that with the recent delivery of our two new-build vessels, which are more fuel efficient, cleaner, and enable a growth into the biofuel and chemical markets. As supplies of vessel in our segment is tightening in the coming years, we anticipate the demand for our fleet to increase favorably. Seadrill ship-to-ship transfer is active more globally, but in a very similar business, sharing the same customers with similar needs for safe and reliable services. The recent move into LNG STS activity gives the business a competitive advantage, as few other providers can offer this type of solution.
Our objective is to increase our contracted business by way of retainers, therefore replicating our contracted business model that we enjoy in coastal shipping and increasing the predictability of cash flow for STS. Combining those two businesses, coastal shipping and STS, under one division also provide opportunities to adopt best practices across both operating models. Now let me spend a few minutes on our plan. Our strategy is a turnaround to regain credibility by delivering on our commitment. This is a prerequisite to our future, and this will be achieved again through focus, simplification, and better execution. Focus means coming back to our core, divesting anything which doesn't belong, but it also means working as one executive team and pursuing fewer objectives.
It is a cultural journey back to our roots, while simplification is about the power of one James Fisher, simplifying into 3 divisions which reflect our customer verticals, where the whole company is aligned to serving the customers, capturing customer-facing synergies on engagement as well as delivery capabilities. We brought new hires to head 2 of our divisions, bringing experience and accountability, while the management of all but 2 of the business units within the divisions were internal promotions. Better execution means the creation of business excellence organization, which we established in January, that drives excellence across the group, looking for quick wins by deploying best practices and lifting up standards. Along that journey, we want to reach our stated objectives of 10% operating profit and 15% ROCE as fast as we can.
The Lean methodology is key to how we deploy change across the group so teams can accelerate the transformation and replicate the early successes that we have seen in RMSpumptools. Beyond that, we are confident in the long-term growth power of our market verticals. Our long-term strategy growth drivers are: First, pursue tier one customer revenues built on value, trust, and dependability globally. Second, deliver through the quality of our workforce, ensuring a high and consistent standard of service delivery around the world. Third, through first to market advantage, rapid response, agile innovation, and increased value content, drive more value, more IP into our services. We are a global service company, finally, becoming an employee of choice is central to our future. In our vision, in anything we do, we must do good and contribute to a more sustainable blue economy.
The entire organization, turning to 2023, has a consistent set of limited objectives. Health, Safety, and Environment is an imperative by the nature of who we are. We're driving a group-wide zero HSE incident culture consistently across. Equally important to us, our biggest challenge is our commitment to meet our forecasts. With immediate focus at deploying proper project management across the group, applying it along the core commercial process from inquiry to order and order to cash, and a laser focus on accelerated collections. As a matter of fact, every meeting we have starts with an HSE and a DSO discussion. If we do this right, we will then tackle more systematically asset and resource utilization, as well as supply chain integration as our next short-term targets. In everything we do, Lean becomes the common language and the common method.
Most businesses have now been trained in the basic of Lean Six Sigma in 2022. We need to drive talent and visibility of Lean projects for this program to be truly an agent of change. Along the way, each business must find a path to exceed our financial midterm objective of 10% operating profit and 15% ROCE. If a business unit is above that hurdle, top line growth is the first priority, using Lean, for example, to unlock supply chain. If a business unit is below, the 2020-2023 priority for them is to fix the business model by improving quality, reducing costs, in some cases, fully capture pricing. fully capture value for pricing. In all cases, we look to pool assets and reduce working capital ratios across the group to improve ROCE.
Finally, as discussed earlier, as a service company, our five-year people strategy underpins everything else we do in the spirit of our ESG framework. In summary, I'm not worried about our market verticals. We are in exceptional markets, and they will be attractive for a long time. Our problems are mostly self-inflicted, and the objective of the turnaround plan is to strengthen our model through focus, simplification, and better execution. We have defined our core, streamlined our organization, upgraded management, divested some non-core businesses, and we are driving business excellence across. As we strengthen our company, we are positioning to deliver this full strategy potential of our market verticals.
Our value growth drivers over long term are a vibrant, engaged global workforce, the consistent delivery of safe, high-quality services wherever we operate in the world, and our trusted customer relationship where we can deploy more technology and more value content. We will be judged this year by our progress on these priorities. We are energized and excited by the year ahead. I'd like to thank you very much and will turn back to question now. First, maybe in the room if there is any question. Yeah. You can state your name and organization.
Good morning. Gerald Khoo from Liberum. A couple if I can, mostly on top leverage and the refinance facilities. Do you have a leverage target going forwards, or do you have a view as to what headroom you want to maintain relative to the new financial covenants, in particular, leverage? 'Cause that... The leverage covenant ratchets down through the life of the facility, and actually if I, if I read that right, I know that you had Swordfish coming post-year end, but you would not have had a lot of headroom versus where the covenant ends, therefore, you really do have to deliver on that. What's your view in terms of what you want your leverage to be over the next year or two?
What's the finance cost headwind that's arisen from the refinancing? Clearly you had lost those... The facilities you were facing were dated.
Yeah.
Interest rates have moved, and the company's position has moved. Can you give an indication of what sorts of cost headwind you're facing on that facility, please?
Sure. If I take the leverage point first, our midterm target for leverage is between 1x and 1.5x, and preferably closer to 1x. During 2023, we expect to make good progress towards 2x by the end of 2023. At finance costs, you saw GBP 2 million worth of additional finance costs between 2021 and 2022, and we could probably expect a similar increase during 2023, reflecting both a full year of increase on base rates and the new pricing of the facilities. We'll wrap it up then. Thank you very much again for attending this call. We are looking forward to update you later in the year on our progress and wish you a great weekend. Thank you.