Wikipedia

Jarvis plc

This article is about the British rail industry company. For other companies, see Jarvis (disambiguation).

Jarvis plc (LSE: JRVS) was a British company that specialised in construction and civil engineering, with a focus on support services to the British railway industry during its latter years of operations.

Jarvis plc
Company typePublic
LSE: JRVS
IndustryRail
Founded1846; 178 years ago (1846)
Defunct2010; 14 years ago (2010)
HeadquartersYork, England[1]
Key people
Steven Norris, Chairman
Richard W. Entwistle, CEO
John P. O'Kane, Finance Director
Revenue£345.8 million (2009)[2]
£7.7 million (2009)[2]
£(9.6) million (2009)[2]
Number of employees
3,881 (2008)
Websitejarvisplc.com

It was established during 1846 as the Jarvis Construction Company. For much of the company's existence, its activities were focused on the construction sector. During the 1990s, senior management opted to heavily involve the firm in the recently privatised British railways, engaging in a spree of acquisitions to quickly expand Jarvis, building up substantial debts in the process. While primarily focused on railway maintenance services, Jarvis also undertook rail freight operations.

During the 21st century, the company took significant reputation damage from its involvement in the railway sector after multiple incidents, including a train derailment at Potters Bar. Despite exiting the rail maintenance business during October 2003 and a change in management, Jarvis was burdened heavily with debts, compelling the sale of multiple divisions. While Jarvis was viewed by some commentators as recovering by 2008, its financial backers became unwilling to extend further credit to the company by 2010. Accordingly, Jarvis went into administration at the end of March 2010 and was dissolved shortly thereafter.

History

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19th and 20th centuries

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The company was founded as the Jarvis Construction Company in 1846. For over a century, the firm focused its efforts on the construction sector, growing at a relatively slow but steady rate over this time.[3] Javis plc was formally incorporated on 31 March 1988.[1] Between 1998 and the end of 1991, the company roughly doubled in size following a series of acquisitions.[4][5]

In 1994, Paris Moayedi was appointed as the Chief Executive of Jarvis; he opted to pursue an ambitious growth strategy focused on new and emerging sectors, refocusing the business on infrastructure maintenance and renewal.[3][6] To this end, the company acquired the Northern Infrastructure Maintenance Company, a rail maintenance business, in 1996.[7][8] During the following year, it also bought the rail freight business Fastline,[9] and the railway engineering specialist Relayfast.[7] During 1998, Jarvis entered the road and airport maintenance business through its acquisition of Streamline Holdings.[10] That same year, the company became the most highly valued contractor on the London Stock Exchange, being valued at £1 billion at one point.[11]

Beyond acquisitions, Moayedi was keen to secure large contracts for Jarvis, including the relatively new and controversial field of private finance initiatives (PFI).[12][13] According to the business journalist Mark Leftly, Jarvis's strategy for winning such deals was to regularly issue low margin bids, meaning that even minor cost overruns would quickly make the awarded PFIs unprofitable and a drain on Jarvis' finances. During the Moayedi era, company executives became increasingly focused on seeking headlines and impressing the wider financial services sector.[12][14]

During 2000, Jarvis was amongst several companies that was involved in legal action against the professional services firm PricewaterhouseCoopers over allegations of defamation.[15][16]

21st century

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Tamper in Jarvis subsidiary Fastline livery.

In 2002, seven people were killed when a train derailed at Potters Bar after passing faulty and badly maintained points. As Infrastructure Maintenance Contractor for the line, Jarvis was held to be jointly responsible for the crash (along with Railtrack), with the Office of Rail Regulation declaring "Jarvis’s performance fell far short of that to be expected of a competent IMC".[17]

On 16 September 2003, a GNER express derailed at just after departing Platform 4 at London King's Cross station. The immediate cause of the accident was the routing of the train onto a length of track with a missing rail. The length of rail had been removed during maintenance work, as is permissible, but it should not have been possible for a train to be routed onto the section of track where the rail had been removed.[18] While the accident did not have an immediate impact, Jarvis was the private contractor employed to maintain the track and had failed to do so properly; considerable damage to the company's reputation was also incurred.[19][20]

One month after the derailment, Jarvis announced that it was exiting the rail maintenance business; the move marked the end of private company-led rail maintenance in Britain, which resulted in all future work being administered by the state-owned company Network Rail.[21][22] At the time, its rail maintenance activities made up less than 15 per cent of the firm's turnover.[23]

During late 2003, Moayedi resigned as chairman of the company, he was replaced by Steven Norris, formerly the Conservative Minister for Transport.[24][25] By this point, the company had become over-extended and was burdened with £230m of debt; during October 2004, Jarvis was forced to sell its Private Finance Initiative (PFI) business to the French construction company Vinci.[26][27] Further selloffs around this time included its European roads business to the French group Somaro,[28] and its stake in Tube Lines to Ferrovial.[29][30] The firm's debt burden was also reduced via a £350m debt-for-equity exchange.[12] In September 2007, Network Rail announced that the number of track renewal contractors would be reduced from six to four; Amey/SECO, Balfour Beatty, Babcock First Engineering and Jarvis.[31]

By 2008, Jarvis was reportedly showing signs that it had stabilised and was on the road to recovery;[32][33] measures taken included the restructuring of its debt facilities to the sum of £10 million.[34] Around this time, the company entered the vehicle hire business, operating a fleet of 1,700 vans by 2010.[35] However, Jarvis would be negatively impacted by the wider financial crisis of 2007–2008, which compelled Network Rail to drastically curtail its business with contractors at a time in which it had become Jarvis' main client.[12]

In March 2010, Jarvis announced that it was entering administration; a spokesperson for the company stated that: "Following negotiations with the company's secured lenders, it has today become clear that sufficient support will not be extended to the company to enable it to continue trading as a going concern."[36][37] While the firm continued to trade for a time, by October 2011, the majority of the business was in the process of being wound up as a buyer could not be found, resulting in over 1,100 job losses.[38][12]

References

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  1. ^ a b "Jarvis plc, Company number: 02238084". gov.uk. Retrieved 19 May 2022.
  2. ^ a b c "Annual Report 2009." Javis plc. Archived 13 July 2011 at the Wayback Machine
  3. ^ a b "The swift ascension of Jarvis to the top of the chart reflects a change in the way some old-style industrials are doing business". Sunday Business. 24 February 2002. Archived from the original on 22 October 2012.
  4. ^ "07Jun91 UK: PATRICK ROGERS' DISMISSAL FROM JARVIS COMES AS GREAT SHOCK". constructionnews.co.uk. 6 June 1991.
  5. ^ "26Apr91 UK: TURNOVER NEW LEAF IN JARVIS BOOKS AS DIRECTOR SEEKS INCREASE THROUGH PROFITABLE ACQUISITIONS. (1 OF 2)". constructionnews.co.uk. 25 April 1991.
  6. ^ Morby, Aaron (5 June 1997). "Just over two years ago Jarvis was an ailing Essex builder. Today it is a major league rail, building and facilities management contractor eyeing overseas work. From rags in roads to railroad riches". constructionnews.co.uk.
  7. ^ a b Jarvis in talks to buy third rail business[permanent dead link‍]
  8. ^ "Profits leap for Jarvis". constructionnews.co.uk. 19 September 1996.
  9. ^ "Jarvis on fast track". constructionnews.co.uk. 21 August 1997.
  10. ^ "Jarvis buys Streamline". contractjournal.com. 7 May 1998. [permanent dead link‍]
  11. ^ "Jarvis is £1bn hit with City". constructionnews.co.uk. 25 June 1998.
  12. ^ a b c d e Leftly, Mark (23 October 2011). "Poor Jarvis is on a train to nowhere". independent.co.uk.
  13. ^ "Jarvis at double". constructionnews.co.uk. 10 December 1998.
  14. ^ Rogers, Dave (15 May 2023). "Paris Moayedi: the man behind the rise (and fall) of Jarvis, dies aged 84". building.co.uk.
  15. ^ "Jarvis Plc and Others v Pricewaterhousecoopers: ChD 13 Jul 2000". swarb.co.uk. 3 August 2000.
  16. ^ "PwC secures court victory over former audit client". Accountancy Age. 13 July 2000.
  17. ^ "Potters Bar Prosecution" (PDF). rail-reg.gov.uk. 16 March 2011. Archived from the original (PDF) on 22 March 2011. Retrieved 20 March 2011.
  18. ^ "Track firm Jarvis admits blunder after train is derailed". The Guardian. 17 September 2003. Retrieved 5 June 2014.
  19. ^ "Jarvis slammed over Kings Cross derailment". thisislocallondon.co.uk. 17 September 2003. Archived from the original on 26 April 2014. Retrieved 25 April 2014.
  20. ^ "Kings Cross derailment puts Jarvis back under spotlight". Public Finance. 19 September 2003. Retrieved 25 April 2014.
  21. ^ "Jarvis quits rail maintenance". BBC News. 10 October 2003. Retrieved 25 April 2014.
  22. ^ Hobson, Rodney (10 October 2003). "Jarvis shunts rail maintenance back to Network Rail". citywire.co.uk.
  23. ^ "Jarvis gives up rail repair contracts". The Guardian. 10 October 2003.
  24. ^ "Norris appointed Jarvis chairman". news.bbc.co.uk. 25 November 2003.
  25. ^ "Moayedi calls it quits as Jarvis's profits rocket up". constructionnews.co.uk. 27 November 2003.
  26. ^ Macalister, Terry (14 October 2004). "Jarvis sells PFI unit to reduce debt mountain". The Guardian.
  27. ^ "Jarvis woes show PFI's strengths". constructionnews.co.uk. 5 August 2004.
  28. ^ "Jarvis sells European roads business". building.co.uk.
  29. ^ "Jarvis sells Tube stake to Spain". BBC News. 24 December 2004.
  30. ^ "Aquisition [sic] of Jarvis's Interest in Tube Lines Complete" (Press release). Amey. 31 January 2005.
  31. ^ "Network Rail Announces Track Renewal Changes". News Releases. 11 September 2007. Archived from the original on 27 October 2016.
  32. ^ "Jarvis 'climbs slope to recovery'". Financial Times. 28 May 2008.
  33. ^ Simonsen, Eric A.; Cassady, Brian (Spring 2007). "From 'Off-the-Rails' to 'Back-on-Track': The Collapse and Rescue of Jarvis PLC". The Journal of Private Equity. 10 (2): 113–121. doi:10.3905/jpe.2007.682350. JSTOR 43504277. S2CID 154570291.
  34. ^ "Jarvis rejigs debt". building.co.uk. 30 May 2008.
  35. ^ "Fastline Transport - Vehicle Hire". Fastline Group. Archived from the original on 24 March 2010.
  36. ^ "Jarvis to call in administrators". BBC News. 25 March 2010.
  37. ^ "Aggressive operator went off the rails". Financial Times. 25 March 2010.
  38. ^ Arnott, Sarah (23 October 2011). "Winding-up of Jarvis puts 1,100 out of work". independent.co.uk.
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