Jarvis goes into the red
JARVIS, the engineering firm, has gone into the red and reported a drop in revenue despite efforts to turn the company around.
Jarvis, which has its headquarters in York, reported today that group turnover for the six months to September 30 fell from £143.5m to £136.3m – a 5% drop.
Loss before tax was £0.6m compared to a half million pound profit in the same period last year.
It also reported exceptional costs of £2.7m resulting from the delayed disposal of the loss making Accommodation Services contracts, largely offset by exceptional profit of £2.4m on the disposal of the group's 80% shareholding in Herefordshire Jarvis Services.
However, it said that considerable progress had been made in its recovery including being selected as one of Network Rail's four primary track renewal contracts generating a secure workload of £95m to £100m per year until 2009.
Fastline Freight also secured a major contract award for energy firm E.ON on track to begin in April 2008.
Steven Norris, executive chairman of Jarvis, said that full year performance in the current financial year was likely to be materially below previous expectations, but that the overall turnaround strategy remained in place.
The company still expects to record its best full year result since 2003.
“We have made considerable progress in the recovery of the group and are pleased with what had been achieved to date,” said Mr Norris.
“However, we face considerable challenges as previously stated and much remains to be done.”
Jarivs said since the period end it had become apparent that market expectations for the second half of the year would not be achieved because of the “utilisation pattern” under the On Track Machines contract and lack of visibility on plant order.
It said it was deeply disappointed to have made the announcement earlier this month.
Last year the firm set out on a strategy to build core business in rail, plant and freight.
It has since disposed of its loss making roads division and other loss making contracts.
