Jarvis said on Wednesday that it expected to make a £22m loss after tax for the year ending 31 March.

The company said its rail and plant divisions won less work than expected, partly because of delays in contracts from its main customer, Network Rail.

This left the company without enough money to reorganise the business as it outlined in September. The company said it was launching a £25m share issue to help bridge the funding gap. It is offering 65p a share, a discount of 8.45% compared with the share price on Tuesday, the day before the announcement.

However, Jarvis could face more problems in the summer. Network Rail is planning to reduce the number of contractors it uses from six to four.