'Considerable' fall in rail and plant work hits trading at infrastructure and support services specialist
Infrastructure and support services specialist Jarvis plc has anticipated a £5m operating loss for its full-year performance in an interim management statement released today.
The group said it had been severely affected by the economic conditions, which has caused a “considerable” reduction in the available volume of rail and plant work.
A statement covering the period from 1 October 2009 to date read: “Trading conditions have continued to be difficult during the period, specifically with the timing of contract awards which now means that full year performance is likely to be below previous management expectations, with an anticipated operating loss in the region of £5m.
“Net debt on 16 February 2010 was down to £12.6m primarily due to the fact that, as previously stated, our working capital facility is linked to rail and plant volumes which have reduced. Additional restructuring costs of approximately £3m have been incurred during the period.”
The statement added that volumes in rail and subsequently plant have not improved as anticipated and these businesses have therefore performed below previous management expectations.
One part of the business that has performed in line with expectations is Jarvis Accommodation Services, but the group conceded that this was not enough to make up for a disappointing year.
It said: “We have battled the very large reduction in rail volumes in 2009. However we have not stood idly by. The new management team has concentrated on improving our performance and efficiency whilst reducing our dependency on Network Rail.”