Rail maintenance group Jarvis calls in administrators
YORKSHIRE-BASED rail network services group Jarvis has called in administrators after its lenders refused to extend further support to the company to help it continue trading.
Jarvis, which has been hit by a substantial reduction in volumes of rail and plant work in recent months, said it needed more capital from its banks and key client Network Rail – the owner and operator of Britain’s rail infrastructure – to enable it to win more work.
But with that financial support not forthcoming the York-based group which is chaired by former Conservative cabinet minister Steven Norris, said it would be placed into administration and its shares were suspended on the London Stock Exchange this morning.
“Following negotiations with the company’s secured lenders, it has today become clear that sufficient support will not be extended to the company to enable it to continue trading as a going concern,” Jarvis said in a statement.
“As a consequence, the directors now have no option but to take steps, together with the company’s secured lenders, to place the company, and certain of its subsidiaries, into administration, and to request that trading in its shares be suspended with immediate effect.”
Last month Jarvis said it expected an operating loss of £5m for the year ending in March and that it had brought net debt down to £12.6m mainly because its working capital facility is linked to rail and plant volumes which have reduced.
The group, which has previously made substantial redundancies as part of a cost-cutting programme said that additional restructuring costs of approximately £3m were incurred last year.
It said new chief executive Stuart Laird and finance director Graham Denton had settled in and were focussed on “further strengthening the management team, improving efficiencies within the business and supporting our business development efforts”.
Jarvis had been upbeat about its “greatly improved focus on business development” following the award of the £55m Chiltern Railway’s Evergreen 3 contract and winning its first signalling contract with London Underground.
