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Jarvis refinancing begins to pay off

NEWS

JARVIS has finally finished a financial year in profit despite turnover being lower than expected.

In the year to March 2006, Jarvis made an operating profit of £11.1 million after shedding £75.3 million in the same period a year ago.

Executive chairman Steven Norris said: 'The group is in a considerably better position at the year end than it was at its beginning, with net debt reduced to a manageable level, a suitable working capital facility in place and our core businesses in a good position.'

Before tax, Jarvis still lost £58.2 million after being hammered with financing costs but this is still a huge improvement on a £391 million deficit posted a year ago.

The firm is concentrating on rail, road and plant and has completed 10 of 21 schools and local authority jobs that were outstanding after quitting the sector. The remaining 11 projects will be completed this summer. But this strategic withdrawal saw turnover at Jarvis sink to £401.2 million from £509.7 million.

Continuing turnover at Jarvis came in at £312.4 million, which is lower than the board had hoped for and compares with £339.8 million a year ago.

The refinancing last year that saw the financial institutions take control of the business to ease debts of £303.8 million has worked out.

The deal effectively cut loose any smaller investors but has reduced net debts to a more manageable £22.2 million with a new £67 million credit facility in place with Bank of Ireland.