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Jarvis - Underground contract

February 2003

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • JRVS
On  2 January Jarvis announced the excellent news that  aspart of the Tube Lines consortium,  which includes Bechtel and Amey (34p), it has signed the  30 year London Underground contractto operate the Jubilee, Northern and Piccadilly Lines.  At a stroke the group will get its £18m bidding costs refunded as well as receiving a reliable income stream, that  Jarvis believes  will be  a pretax profit of £8m a year.  In return it must inject £60m in equity into the project. Jarvis will also take on half of Amey's share (i.e. another £30m) if the latter cannot find the cash,  which would increase Jarvis' estimated annual  profit to £12m.   The project will involve Tube L ...

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