Jarvis 'on track' says Norris

Jarvis remains on track, announced chairman Steven Norris brashly this morning.

The rather provocative phrase was selected as annual results show that Jarvis is out of the red at long last with a pre-tax profit of £4.5m.

Jarvis’s latest figure, for the 12 months to 31 March 2008, follows a loss of £13m in the previous financial year.

Turnover lifted modestly to £320m, a rise of £290m.

Norris said: “The period just ended was a significant milestone for the new Jarvis and we have achieved the best result for five years.”

The latest profit was “the best overall result since 2003” said Norris.

Segmental analysis shows that group turnover divides between:

• £210m – rail
• £60m – accommodation services
• £50m – plant

Without allocating the £12m of central costs, the operating profit/loss generated by the divisions was:

• £14m – rail
• £9m – plant
• £5m loss – accommodation services

Rail

The business is now extremely busy though the first-half performance was affected by the late start of a number of large enhancement contracts for Network Rail. These are virtually all well underway, and they will continue in the current financial year.

One of the largest and most complex contracts is at Rugby where Jarvis is principal contractor for Network Rail’s largest single scheme on the West Coast enhancement programme. It has involved undertaking major and preparatory works every weekend since January 2007.

In September, Jarvis was confirmed as one of Network Rail’s four contractors for track renewals.

Plant

Fastline had a challenging first half but this was followed by “much improvement” over the second half.

Jarvis has sold some of its older and largely-unused heavy plant to Poland and Egypt.

The rail freight operation launched its third container route and now operates a service to the North West of England. “It is vital to the economy and the environment that more freight is moved across the country by rail,” said the group.

Accommodation Services

Norris said: “Thanks to the hard work of Stuart Laird and his team, the division is now no longer the source of a continuing outflow of cash.

“The business is now profitable at the contract level and benchmarking of several contracts will improve profitability”.

Seven contracts were disposed off during the year, including Jarvis’s share in the Herefordshire Jarvis services business.

Will Jarvis stay in this space given its stated desire to focus more on rail? Norris says that the group continues to examine all strategic options regarding the remainder of the contracts.