Jarvis stock dives 14% on rail tragedy

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The Independent Online

Shares in Jarvis tumbled by 14 per cent yesterday as investors worried about the impact of the Potters Bar tragedy on the rail maintenance company.

Shares in Jarvis tumbled by 14 per cent yesterday as investors worried about the impact of the Potters Bar tragedy on the rail maintenance company.

Jarvis ended the day at a seven-month low after £95m was wiped from its market value in the City.

The company won the maintenance contract on the East Coast Main Line just over a year ago and said it checked the points at Potters Bar on Thursday.

Jarvis said the checks were carried out by its full-time staff with no sub-contracted personnel involved.

But analysts in the City said investors were concerned about any potential liability as a result of the derailment, which caused seven deaths.

Fears about further disruption to the rail network saw shares in National Express, which operated the WAGN train, tumble on Friday.

National Express was down by 5.5p at 639p, while its rival franchise operators, First Group and Go Ahead, both made gains.

Hilary Cooke, an economist at Barclays Stockbrokers, said: "The City does not like uncertainty.

"The potential liability is a concern at the moment and until the full cause and responsibility is known it will remain a concern."

Jarvis shares, which hit a two-year high of 575p in March, closed down 68p at 430p.

Martin Dobson, the head dealer at NatWest Stockbrokers, said Jarvis' share price was likely to remain under pressure until the liabilities became clear. "Everyone knew it would be off this morning," he said.

In November, Jarvis reported pre-tax profits of £17.7m for the first half of its financial year, up from £8.7m the year before.

The group is a key backer of the part-privatisation of London Underground and also maintains roads.

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