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Contractor trebles profits after linking facilities management to construction Jarvis tunes in to the FM waveband

FACILITIES management has taken over as the main business stream for Romford-based contractor Jarvis.

The change of emphasis, built from a growing order book of rail and big Private Finance Initiative contracts, is helping Jarvis deliver operating margins of 10 per cent.

Paris Moayedi, chief executive of Jarvis, said: 'We see ourselves as much more than a contractor.

'Our ability to provide a mix of design, finance, facilities management and life-cycle costing puts us ahead of the field at present.'

This broader, but more integrated, approach nearly trebled Jarvis's pre- tax profits to £12.7 million in the six months to September, compared with the previous nine-month period. Sales also rose from £119 million to £128 million.

Mr Moayedi said that the benefits brought from linking facilities management and construction were best illustrated by the two big PFI deals signed for new buildings at University College in London and at Colfox school in Dorset.

The construction work is valued at around £40 million but over the next 25 to 30 years these two jobs will bring in revenue of £150 million for Jarvis Facilities.

The greatest part of the facilities division's £70 million sales comes from rail maintenace and track renewal work.

Construction division sales reached £57.1 million as Jarvis looked for more management work and turnkey contracts.

Mr Moayedi said the benefits from the two track renewal firms, Fastline and Relayfast, would be more clearly seen in the second half. Losses at Relayfast dented profits by £1 million, but the rail contractor has now returned to profitablity after making job cuts and restructuring.

Secured orders stand at £800 million. Jarvis inherited £250 million of this with the acquisition of its railway businesses. A further £300 million has come from track renewal contracts won this week The balance is made up from building facilities management.

Jarvis is also looking overseas for new oppportunities, particularly in Eastern Europe and Australia, where railway privatisation is gaining pace.

Mr Moayedi said Jarvis was unlikely to keep up its aggresive acquisition policy and now intended to focus on organic growth.