Surge in rail infrastructure spending a welcome boost for Jarvis

Published on Wednesday 28 May 2008 21:27

RAIL and plant firm Jarvis delivered its best results for five years yesterday and said it was well placed to benefit from "unprecedented" spending on the UK rail network.

The group was forced into selling off a raft of businesses four years ago to survive a financial crisis, but posted a profit of 11.1 million for the year to 31 March against a previous 21.7m loss, its best performance since 2003. The firm highlighted a recent government white paper and operator Network Rail's latest business plan as further grounds for optimism.

Network Rail forecasts some 30 billion in spending on the rail system between 2009 and 2014.

"There are significant opportunities in the UK rail market and the board believes we are well-placed to capitalise on these," Jarvis said.

Yesterday's figures were boosted by a 6.5m tax rebate in February, but executive chairman Steven Norris said the group had made "substantial progress" despite an uncertain start to the year for its plant operation.

The firm's rail business is "extremely busy" on major projects – including work at Rugby on Network Rail's upgrade of the West Coast Main Line – and was also named as one of the operator's four renewals firms after a "beauty parade" of six rivals last year.

Meanwhile, Jarvis is also eyeing expansion plans for its rail freight business after its five-year 40m coal haulage deal with power company E.ON commenced in May.

Its Fastline Freight operation will provide a dedicated service hauling coal by rail to Ratcliffe-on-Soar and Ironbridge power stations.

Jarvis announced three weeks ago it was looking at "strategic options" for the business which could include a sale. Balfour Beatty and First Engineering have been mooted as potential buyers, although the company gave no update on its review.