Auditors say there is fundamental uncertainty over future of Jarvis as it announces £353.8m pre-tax loss.
Auditors have warned that Jarvis may no longer be viable as a going concern. The auditors said that there was a “fundamental uncertainty” in respect of the ability of the group to continue operating.
Jarvis today announced a preliminary pre-tax loss of £353.8m for the year ended 31 March 2005, compared to last year’s loss of £256m. The group turnover fell from £1.076.1m to £585.7m.
Jarvis said that £246.8m of the loss was exceptional and included construction losses, write off in goodwill, restructuring costs. Other losses stemmed from a reduction in rail renewal volume and provision for certain contracts, lower margins and a loss of contracts in the road sector, and losses in the facility management and accommodation arms.
Jarvis said in future it would focus on rail renewal activity, plant operations and road products. It said it was considering exiting from non-core areas such as construction and facilities management.
Jarvis’s said its auditors were uncertain about the assumptions that underpinned Jarvis's survival plan. These included:
- A successful completion of the proposed debt for equity conversion.
- The abilitiy of financial facilities to tie Jarvis over until the debt for equity conversion took place.
- The support of the group’s lenders, creditors and stakeholders.
- The ability of Jarvis businesses to continue relationships with customers, suppliers and employees.
- Obtaining adequate working capital facilities after the debt for equity conversion.