Contractor Jarvis has revised its final year results downwards, and its share price has slumped in early trading, due to ‘considerable’ reductions in rail and plant volumes.
The company’s Interim Management Statement covers the period from 1 October 2009 to date. Chairman Steven Norris’ statement read:
“Throughout the period and indeed for the whole of this financial year the Company has been impacted by economic conditions generally and in particular the very considerable reduction in available volumes of rail and plant work to which we have referred in previous announcements.
“Trading conditions have continued to be difficult during the period, specifically with the timing of contract awards which now means that full year performance is likely to be below previous management expectations, with an anticipated operating loss in the region of £5M.”
However, the company is confident recent wins such as the £55M Chiltern Railways Evergreen 3 contract will see a return to form next financial year.
The focus on business development opportunities outside Network Rail has progressed well. The team now has good visibility of future works with new customers and as well as the Evergreen 3 contract has also recently secured its first small signalling contract with London Underground Limited.
Jarvis has also completed the overhaul of its management, with a new chief executive and finance director, and has just appointed Phillip Price as Managing Director, Rail and Plant, coming from Laing O’Rourke as Managing Director of its Infrastructure business.
The company also has high hopes for its ‘Slinger’ track renewal system, which it says has replaced 705 years of track in under 21 hours, and will be attractive for Network Rail’s ongoing drive to reduce possession times.
Jarvis shares fell as much as 22% in early trading, but have since recovered some ground, but are still some 8% down on yesterday’s close, at 11p per share.