Jarvis: profits off track

by John Leitch

Jarvis says that it can't get onto the railways to do track renewal work for Railtrack because there are now so many trains running that track possession is next to impossible to come by.

Speaking last week, Paris Moayedi, Jarvis chief executive, offered this as the explanation for a near-halving of Jarvis' interim pre-tax profits, down from £19.7 million to £10.9 million. But without an exceptional £2.8 million profit on the sale of its roofing business, Jarvis would have made a profit of £8.1 million, a 59 per cent reduction on the profit made in the same period last year.

"With track renewal work, you've got a £70 million fixed cost, so you are very susceptible to volume changes in workload," said Moayedi, as Jarvis unveiled its latest figures.

"Last year, the difference was that we had the remains of our RT1B contracts for two months, possession of lines having been booked for them 18 months earlier [the RT1Bs contracts with Railtrack were subsequently replaced with RT16 contracts]. Then, the increase in traffic on the railways didn't permit us to book possession in the summer months."

Moayedi said that both Tarmac and Balfour Beatty, its rival track renewal contractors, have both met with similar problems. He pointed out that, with Jarvis having four-times more track renewal work than either of these two, its access problems were correspondingly greater.

Last week, Jarvis imported a £16 million Track Renewal Train that will work four times faster than existing equipment. As it operates on the line it runs along, rather than reaching over from an adjoining line, the need for the closure of two lines is avoided.

Turnover (six months to 1 October 1999) rose to £310 million (£280 million), the increase stemming from the recent £194 million acquisition of Streamline, which is expected to add £180-200 million to the group's turnover in a full year.