There were some early fireworks last week as the board of Jarvis faced an angry crowd of shareholders at its annual general meeting.
Their concern, understandably, was this: why should six Jarvis directors land a total of £800,000 in bonuses for the year in which Jarvis hit the headlines after the fatal Potters Bar rail crash?
It is all well and good to align the management and shareholders of public companies, so that if shareholders reap the rewards of a strong financial performance, so does the board. But in Jarvis’ case, shareholders are left icy cold at the thought that their shares were worth more than £5 each before Potters Bar and were trading at 35p when the market closed last week.
Two years ago the company was a darling of the City and worth more than £1bn, now its market value has fallen to £50m.
Nevertheless, Jarvis got its way and shareholders voted in favour of the payout. Chairman Steven Norris may have been accused of having “a politician’s arrogance”, but he got what he wanted.
Analysts are privately sceptical about the appointment of Alan Lovell as chief executive, announced last week. They are questioning whether he really is the “turnaround specialist” that Norris has branded him.
Lovell will be Jarvis’ third chief executive in just over a year, and it is difficult to imagine candidates chomping at the bit for the job.
Lovell’s appointment may well be a case of too little too late. As Jarvis gears up to sell its 33% stake in Tube Lines to pay off some of its £270m of debt, shareholders are left with a company that is a shadow of what it was.
Shares in the construction sector dropped 1.8% last week to 2877. The housebuilders suffered another bad week, with shares in most firms falling more than 2%. This was caused by general caution about the sector, but also because of George Wimpey’s negative trading update last Tuesday.
Ben Bailey was the best performer overall, with shares up 10% to 405.5p. Gleeson had less to cheer about. Shares dropped by 8% to 198.5p after a disappointing performance from its construction business for the year ended 30 June 2004, reported last Tuesday. The All-Share Index dropped 1.6% to 2294.
Angela Monaghan is business editor