Despite further cuts in US and UK interest rates the stockmarket continues in the doldrums and manufacturing industry is technically in recession. Some City analysts brush away the word recession as ludicrous in view of the declining importance of the manufacturing sector to the British economy. Facilities management companies continue to be highly rated in the City due to the long contracts and guaranteed cash flow arising from PFI contracts.
Jarvis graduates
Jarvis, the facilities management and construction group, has just won, via its Jarvis University Partnerships Programme, a £60m contract to finance, build and manage 1,200 student homes in London's first student village.
It has acquired a three-acre site, Rachel McMillan Hall in Deptford, from London University's Goldsmiths College. Jarvis also has options on two further sites, which can be developed to meet the high demand for student accommodation in the area. Jarvis University Partnerships Programme has been appointed preferred bidder by 12 universities and colleges to produce accommodation for some 12,000 students.
Flush McAlpine poised for PFIs
Alfred McAlpine is selling its housebuilding division to George Wimpey for £461m in cash. Of this, £360m will go into more PFI projects, which require a big initial investment but provide stable cash flows for many years. Leslie Kent, analyst at broker Seymour Pierce, forecasts there is £50bn worth of PFI work coming up over the next 10 years.
In May McAlpine bought Kennedy, a company that provides management services to the utilities sector, for £52m. There is speculation that McAlpine will now bid for a quoted company with a strong PFI portfolio of contracts.
Serco radiant
Serco has bought the nuclear consulting business of AEA Technology for £69.8m. The nuclear consulting business provides safety and risk management services to clients including the Ministry of Defence, nuclear generator British Energy and nuclear service group BNFL.
Source
The Facilities Business
Postscript
Malcolm Craig is editor of Stockmarket Confidential