Pre close trading statement

The Board of Jarvis plc is today providing a trading update before the Company enters its close period in respect of the year ended 31 March 2009.

During the final quarter trading performance has declined further because of the significant delay and reduction in the replacement project enhancement workload in Rail following completion of the West Coast Route Modification programme. On 20 March Jarvis announced its decision to close its freight container services operation, which continued to incur losses during the period, and to concentrate on the further development of its successful freight coal haulage business, which has continued to perform in line with internal expectations. However, as a consequence of the underperformance within Rail and the freight container business, operating results for the year are now expected to be below previous management expectations.

In addition, net debt at year end is now expected to be significantly lower than previous management expectations, principally due to a substantial reduction in accounts receivable.

The Company is in the process of finalising a one year contract to supply On Track Machines (OTM) for Network Rail to run from 1 April 2009. As a result of the new contract, the demand by Network Rail for OTMs supplied by the Company will reduce significantly in the financial year 2009/10 compared with the current financial year. The lower utilisation of the Company's heavy plant was anticipated in the Company's Interim Management Statement issued on 17 February 2009.

Operating costs in the 2009/2010 financial year will be reduced to reflect the lower demand for Rail and Plant services. It is expected that the associated restructuring will result in approximately 450 redundancies across various depots and locations. As previously reported, the London North East Integrated Management Team track renewals element of the restructuring is expected to be cash neutral. The remaining restructuring is expected to result in a one off adverse profit impact of approximately GBP 8 million in the current financial year, the cash effect of which will occur in the 2009/2010 financial year. The Company is still in the process of reviewing the financial impact of the projected lower volumes across the rest of the business and is continuing to work closely with Network Rail and other stakeholders in order to restructure and downsize the business.

However as one of Network Rail's chosen track renewals contractors the Company continues to be well placed to maximise longer term opportunities arising from the c.£4bn being invested in track renewals by Network Rail over the next five years.

Steven Norris, Executive Chairman Jarvis plc said: "It has been a painful process to absorb the impact of Network Rail's sudden reduction in workload, but I am confident that by taking the necessary steps early the Company can look forward to improved work volumes in 2010 and beyond."

Ends

For further information, please contact:

Toni Jackson, Head of Communications Jarvis plc – 01904 712667 or 07921 939031

Isabel Podda at Buchanan Communications – 0207 466 5000

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