Jarvis slumps £283m into the red
CONSTRUCTION engineer Jarvis spelled out the full extent of its trials and tribulations today as it dived £283.1m into the red in the first half-year.
The Christmas Eve sale of its stake in the Tube Lines consortium, which maintains one-third of the London Underground, may have given the group a year's stay of execution from its bankers but Jarvis could not hide from the bleak task ahead to turn the company around.
The losses for the six months to the end of September compare with pre-tax profits a year ago of £33.7m and losses for the 12 months to last March of £226.7m.
The only winners seem to be Jarvis's bankers and lawyers, who gobbled up the bulk of a £32m bill for restructuring and refinancing the company.
Jarvis chairman Steve Norris said: 'This has, as I indicated, been the most difficult period for everyone employed by the Jarvis group of companies at whatever level. We have been obliged by our urgent restructuring plan to say goodbye to many who have served the company conscientiously and well over many years.'
Norris has been the only constant in a year that has seen directors and senior executives coming and going with bewildering regularity. He, however, was at the centre of a conflict-of-interest row in his attempt to become Mayor of London while running a company with a substantial interest in the Tube.
Today's delayed interim results mean new chief executive Alan Lovell has inherited a company whose losses total £539m over the past 18 months.
Norris said of his new top manager: 'I cannot underestimate the value of his contribution to the restoration of a viable business in Jarvis.'
{1}Lovell oversaw the sale of Jarvis' Tube Lines stake to Amey last week for £146.8m but the company will still probably require a debt-for-equity swap to ensure its long-term survival. Jarvis shares are just 8p against 218p a year ago, leaving the company valued at £26m.
Jarvis has sold a further 17 small businesses and property interests to date. This, Norris said, with a simplification of its core rail, road and plant operations, means 'managers will be able to devote more time to current operations rather than the essential restructuring'.
It was a bold leap of faith for former Conservative Transport Minister Stephen Norris to progress from interim chairman to permanent chairman of Jarvis in June.
The task has proved even more trying than he might have expected at the time. Jarvis, which has struggled to overcome the damage to its reputation resulting from the Potters Bar rail disaster, has since run into the kind of financial difficulties that might have sparked the departure of a less determined executive.
Norris refused to stand down even temporarily when he failed again to win the London Mayoral election. He was today trying to rally remaining staff at the fast-shrinking firm.
