Contractor expects loss of £22m
Jarvis is launching a £25m share issue to fund its reorganisation after admitting its is short of money.
The troubled contractor said that it secured less work than it expected at its rail and plant divisions because of delays in contracts from its main customer Network Rail.
This has left the company without enough money to reorganise the business as it outlined in September. The changes include reducing overheads, exit loss making FM contracts and ongoing investment.
It also revealed that it expected to make a loss of £22m for the year ending 31 March.
Jarvis is launching the offer to help bridge its funding gap. It is offering shares at 65p a share, a discount of 8.45% to the middle of its market.
However it could find that its income takes are more fatal knock in the summer. Network Rail is planning to reduce the number of contractors it uses from six to four later this year. It is not known if Jarvis will be culled but the management believe it “is well positioned to met the main criteria laid down by Network Rail.”
