Jarvis looks ahead
JARVIS today said its plans to concentrate on its rail, plant and freight businesses was starting to pay off.
The York-based group said in an interim management statement that volumes in its rail arm had fallen during the first quarter of its financial year and it has stepped up its restructuring programme, begun in March – to deliver a further £3m in cost and operational savings.
Jarvis said that it made a small operating loss in the three months from April 1 which was in line with management expectations.
It said it was continuing to ensure that its facilities management improved margins.
The group said that volumes in its rail division were hit by the decision by Network Rail to delay work but its freight business had been boosted by a coal haulage contract from E.ON. It said that coal haulage volumes during the summer period would reduce as expected.
New chief executive Stuart Laird, currently chief operating officer of Jarvis, will succeed Richard Entwistle when he retires at the group’s AGM on September 3.
As part of the cost-cutting measures, Jarvis will not appoint a new chief operating officer.
The group said its unaudited net debt at the end of June 2009 stood at £20.2m and it confirmed last month that it has extended its banking facilities for another year to January 2011.
Jarvis chairman, Steven Norris said: “As we have said before volumes are expected to continue at the anticipated lower levels throughout the current financial year. Tender activity should start to pick up in the second half, although short term visibility remains poor. Beyond this year prospects look more promising.
“The CP4 five year control period has now commenced and Network Rail has a capital works programme which is funded to 2014. The government also recently announced a £1.1bn project to electrify two major rail lines. These are significant opportunities for a contractor with our level of expertise and we will be working hard to ensure we maximise the benefits these present.”
