Jarvis plc trading update

Jarvis plc, ("Jarvis") the rail and plant services group, is pleased to provide shareholders with a trading update ahead of the announcement of its interim results for the six months ended 30 September 2007 expected on 27 November 2007.

In the first half of the current financial year, the Group's trading performance has been in line with management expectations. Workloads in Rail have begun to increase in the second quarter, following a number of previously announced contract awards from Network Rail. The impact of this increased workload should be seen in the second half of the current financial year.

In September Network Rail announced its decision to appoint Jarvis as one of its four prime contractors for track renewals. This is expected to result in an increase in revenue of approximately £15m in the 2008/09 financial year. The business will incur some additional costs in the first half as a result of the process followed by Network Rail in reaching this decision, although the overall impact is not expected to be material. Transition to the new contract arrangements has already commenced and will continue through the second half.

In Plant, volumes have begun to recover in line with the increase in rail activity. This is expected to lead to an improved performance in the second half. However, given much lower visibility on future demand in Plant than in Rail, the extent of the improvement is as yet uncertain.

In Accommodation Services, although Jarvis signed commercial agreements for the termination of three major loss making contracts in June, completion has been delayed by protracted negotiations between the other parties to the transactions. Final completion is expected in the next few weeks. However, there are expected to be exceptional charges of £2-3m in the half year accounts resulting from the delayed completion of the terminations.

The disposal of Jarvis' 80% shareholding in Herefordshire Jarvis Services Ltd was successfully completed in the first half. The Group continues to review all options to improve the performance of the remaining facilities management contracts in Accommodation Services.

The Group continues to deliver against its other strategic goals, namely the further reduction of central overheads and the development of its freight business. The implementation of a new integrated management information system commenced in the second quarter.

Steven Norris, Executive Chairman of Jarvis plc, commented:

"During the last six months we have made further advances in implementing our strategic objectives. As stated in our 2007 Annual Report and Interim Management Statement, we continue to focus on achieving the complete recovery of our business, and expect to make further progress going forward.

We are delighted by Network Rail's decision to appoint Jarvis as one of its four prime contractors. It shows the confidence Network Rail has in Jarvis as a leading supplier of track renewals. It is also recognition of our commitment to the continuous improvement of the quality of service and delivery to all of our clients".

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For further infornation please contact:

Toni Jackson – Group Communications Manager
T: 01904 712667
M: 07921 939031

Isabel Podda – Buchanan Communications
T: 020 7466 5000

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