PFI specialist plans for life without Jarvis

David Wylde, founder and managing director of DWPF, told Building he was relieved to have freed the company from Jarvis, which last week reported a full-year loss of £354m. He said: “I will dedicate the next five years to building it up and giving the staff the opportunity to buy into the business. After that I will float or sell the business.”

Wylde would not disclose his financial aims for the business, which has advised on almost £1bn of refinancing deals, but said that he would diversify into property financing.

DWPF has 25 staff in central London and has recently appointed two more financial modellers.

Wylde said he had spoken to Jarvis about buying the 50% share in February last year but negotiations had stalled because of the contractor’s deepening financial difficulties. The buy-back finally went through in April this year.

Wylde would not disclose how much he paid for the shares but said if he had agreed to a price in February before the extent of Jarvis’ problems became clear he “would have gone bust”.

Last week Jarvis’ auditor, RSM Robson Rhodes, said it was “fundamentally uncertain” whether the company could continue to operate.

Wylde said that DWPF had good prospects despite its previous involvement with Jarvis:

“I am constantly amazed that we have not been tarnished by the Jarvis fiasco,” he said.

Jarvis started winning one in three contracts in 2001 and 2002 it should have stepped back

David Wylde, DWPF

Since DWPF broke free from Jarvis it has secured several high-value contracts. These include projects previously carried out by Jarvis that have since been taken over by German contractor Hochtief. The Hotchtief deal involves three PFI education projects in Manchester, Bangor in Northern Ireland and Cork in the Republic of Ireland.

DWPF has also been appointed by infrastructure investment group the Secondary Market Infrastructure Fund, which has a portfolio of £400m PFI investments. In addition, it has closed a PFI schools project with Wates, for Kirklees council in Huddersfield.

DWPF’s financial interests were intrinsically linked to those of Jarvis, so DWPF was cash negative in 2004. “It was a pretty terrible time for us,” says Wylde. “Jarvis had annual bid costs of about £50m but wasn’t winning anything. The early growth was fantastic but when Jarvis started winning one in three contracts in 2001 and 2002 it should have stepped back.” This pre-dated the Potters Bar rail crash in 2002, which contributed greatly to Jarvis’ bad results.

DWPF’s experience in PFI dates back to the first UK school PFI at Colfox in Dorset, a secondary school project it worked on with Jarvis. After that project Jarvis appointed DWPF on all its PFI projects.

In 1998 Jarvis took a 50% stake in the company to provide it with working capital. At that time, Jarvis was winning two out of three contracts that it was bidding for.

Jarvis has since decided to focus on rail, plant hire and road contracts.