Tuesday lunchtime's business bulletin

Engineering firm Jarvis to share £1.5bn in rail renewal work; Fashion chain French Connection remains under pressure; Housebuilder Redrow hails solid performance.

Engineering firm Jarvis is to share up to £1.5bn in rail renewal work after success today in a ``beauty parade" of rival contractors.

York-based Jarvis - close to collapse three years ago after running up huge losses on delayed building projects - has been chosen as one of the network operator’s preferred renewals firms over the next three years.

The business joins Balfour Beatty, Glasgow-based First Engineering and a joint venture between Amey and Bristol firm Seco as the other successful bidders.

Steven Norris, executive chairman of Jarvis, said the deal would be worth an additional £15m a year to the firm’s turnover. Jarvis’s rail business had revenues of more than £140m in the year to April.

Network Rail’s decision comes after a six-month trial period for its six current renewals contractors. Wolverhampton-based Carillion and Doncaster’s Grant Rail were the two firms who missed out.

The rail operator hopes to make around £150m in efficiency savings over the next five years through using fewer firms.

Fashion chain French Connection remained under pressure today after revealing continued poor performances at its menswear and Toast divisions.

The group said strong trading in ladieswear failed to prevent current like-for-like sales from dipping into negative territory in UK and European retail.

The figure was also 1.6% lower in the six months to July 31, although French Connection did report narrower losses of £2.5m today, compared with £3.6m a year earlier.

The group said menswear trading had been weaker during the half-year while Toast, a mail order based ladies fashion range, endured a poor season.

Trading for the two divisions has remained soft in the second half of the year, although chairman Stephen Marks said he was hopeful of improvement.

Housebuilder Redrow today hailed a solid annual performance as it battled against rising interest rates and an "inefficient" planning system.

The Flintshire-based company posted flat pre-tax profits of £120.5m, in line with expectations, for the year to June 30.

The firm added that the outcome for the current year would depend on the strength of the housing market, as the five rate hikes since last August and uncertainties in the debt markets looked to be dampening consumer confidence.

Chairman Alan Bowkett said: ``Redrow delivered a solid performance in the last financial year against a backdrop of successive interest rate rises and an increasingly inefficient and complex planning system."

Redrow said completions in the year were hampered by delays brought about by the planning system, particularly at its key Signature family homes brand.

The pound at noon was US$2.0315 compared to US$2.0282 at the previous close while the euro at 12pm was £0.6806 compared to £0.6800 at the previous close.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer