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Full-year figures from restructured support services group Jarvis, now focused solely on rail maintenance, were ahead of analyst forecasts due to a better-than-expected second half. This however follows earlier, swingeing downgrades when Jarvis warned last November that rail plant under-utilisation and a less-favourable work mix would severely impact profits. The £11.1m post-tax profit is the best for the group in five years. However, subtract a £4.2m exceptional gain and discontinued operations and the underlying profit from continuing operations was £6.9m.
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Highlights from the year include a 45 per cent revenue increase in the Rail division, which in September secured a position as one of national track owner Network Rail’s four track renewal contractors. The Plant division benefited not only from the busier second half and the sale of some of its under-utilised heavier equipment to Poland and Egypt, but also growth in the nascent UK rail freight business included in this segment. Meanwhile central overheads were reduced 38 per cent while the rump accommodation services business has been dragged into profitability at a contract level, although it is still loss-making at an operational level.
Brewin Dolphin anticipates full-year end-March 2009 EPS of 3.7p.
| JARVIS (JRVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 27p | MARKET VALUE: | £56.5m | |
| TOUCH: | 26-30p | 12-MONTH HIGH: | 93p | LOW: 9p |
| DIVIDEND YIELD: | nil | PE RATIO: | 5 | |
| NET ASSET VALUE: | 0.7p * | NET DEBT: | £39m | |
| Year to 31 March | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004 | 1080.0 | -256.0 | -171.6 | 4.5 |
| 2005 | 510.0 | -332.1 | -231.2 | nil |
| 2006 | 354.0 | -59.1 | -35.6 | nil |
| 2007 | 289.0 | -13.1 | -13.5 | nil |
| 2008 | 322.0 | 4.5 | 5.4 | nil |
| % change | +11 | - | - | - |
*Includes intangibles of £2.8m, or 1.3p per share |
||||
Few copybooks are as blotted as Jarvis’, yet at the current level of 27p and a forward PE ratio of just 7, the shares look fairly priced.
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