Jarvis director goes after £12m delays

Jarvis, the troubled support services group, said it is to part company with the director whose division was responsible for a warning two weeks ago that private finance project delays could knock £12m off annual profits.

Andrew Sutton, the chief executive of Jarvis' accommodation services department, will pay the price for the fact that the company was forced to alert the City of the problems with 14 schools and university projects. Shares in Jarvis fell 7p to 138p yesterday, with confidence in the group's prospects still fragile.

Mr Sutton will be replaced immediately by Rob Johnson, currently commercial director. Mr Sutton will stay on at Jarvis for a few months to manage the completion of a number of the accommodation projects.

The company said it was still negotiating Mr Sutton's settlement, but insisted that as he had resigned, he would not receive compensation. He was on a 12-month contract.

Arbuthnot, the brokerage, said: "Jarvis last week said that it had essentially overspent by £12m on bids. The blame for this has obviously fallen on Andrew Sutton." Jarvis shares dropped to their lowest level in more than seven years following the profits warning on 28 January, which said there would be delays to 14 projects.

Jarvis, whose chairman is Steven Norris, the Conservative's candidate for London's mayor, had expanded its accommodation business in an attempt to counterbalance its decision to cut railway maintenance work after a spate of bad publicity surrounding train derailments.

The company, which has a stake in the Tube Lines consortium that has won control of parts of the London Underground, has been trying to improve its image after being associated with the Potters Bar rail disaster.