Jarvis shares drop following AGM
At its Annual General Meeting, Jarvis confirmed that its plant and freight divisions had suffered from the turbulent economy, with plant revenues falling due to falling demand, and freight revenues decreasing due to reductions in container imports. Overheads for both had increased due to higher fuel costs.
Jarvis executive chairman, Steven Norris said: "The implementation of our strategy to focus on our Rail, Plant and Freight operations and reduce our cost base remains on track. There is still some work to do to rationalise and restructure the Plant business to ensure its performance continues to improve, and we are fully focused on the safe delivery of our increased workload.
"Clearly Jarvis cannot be immune from the macro-economy which, whilst impacting on performance during the year to date, has not detracted from a solid overall performance, nor does it undermine our outlook on the rest of the year which continues to be one of cautious optimism. The continued strong demand for our Rail services is encouraging.
"However, the challenge will be to minimise the impact of the weaker demand experienced in the container freight and transport businesses and the significant increase in fuel costs, all of which we now expect to continue for the remainder of the financial year. In the longer term we believe we remain ideally placed to maximise the significant opportunities that the growing UK rail and rail freight markets present."
The Rail division showed more promise, with an extension of the Rugby Station Remodelling contract for Network Rail worth £40M, and enhancement works expected over the summer on the West Coast Main Line.
In Scotland, Jarvis has secured work on the Airdrie to Bathgate line enhancement scheme and the second phase of the Glasgow Airport Rail Link project.
In the South East, Jarvis has infrastructure strengthening works to support the Thameslink project, and the Electrical Projects Group secured further signalling and telecoms projects.
Small Plant performed well, benefiting from the upturn in workload within the Rail business and, externally, for clients including Metronet. Due to this increase in demand, the business has begun to invest in expanding and refreshing its product range.
Jarvis' debt stood at £40.8M at the end of June, having refinanced £10M of debt.
Jarvis shares dropped from a recent high of 27p on Monday to a low of 20.5p today.
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