Confident trading update from rail contractor despite high-profile delays on Network Rail contract over Christmas
Jarvis has said it is on track to report its best results since 2003 despite high-profile delays to a Network Rail job over Christmas in Rugby, Warwickshire.
In a trading update, executive chairman Steve Norris said: “While the pace of the group's recovery has been slower than originally anticipated prospects for our Rail business remain good given the future programme of enhancement projects planned by Network Rail".
The group said results in the third quarter had shown improvement over quarters one and two.
Addressing the problems on the overhead electrification job at Rugby, it said the volume of work undertaken in 2007 had put pressure on human resources. It said: “This is the most complex project of its type ever undertaken in the UK. We are working very closely with our client, Network Rail, to ensure its delivery.”
It added: “The major challenge for the industry is to ensure that there are sufficient resources to deliver the required work safely, effectively and efficiently. We continue to believe that our plant business will benefit from the increased levels of rail activity. Our challenge remains to improve the level of visibility on plant demand.”
It said turnover would increase by £15m in 2008/09 as a result of it taking over responsibility for operations in the East Midlands after Network Rail’s framework list was cut from six to four in September 2007.
Net debt in the group's management accounts at 28 December was £44m, which it said was in line with management expectations. It said its working capital facilities were adequate for the group's current requirements.
The group said it expected to receive a £6.5m tax rebate by the end of February.