Jarvis shocks City as share price halves

Jarvis' financial woe continues: its share price collapsed today as it unveiled the potential for £156m of write-offs. Jarvis started the day with a share price of 79p, but had dropped as low as 38p once it issued its statement to the Stock Exchange.

The embattled group expects to get £30m from Network Rail in respect of rail renewals work undertaken in recent years but for which certification was outstanding. However, this sum includes a write-off of about £26m. Further payments from Network Rail are expected, but are similarly expected to incur further write-offs.

The vast chunk of write-offs will come from the accommodation services division, "which could exceed £115m". A further £15m will be written off goodwill in the roads business.

Jarvis' net debt stands at £230m. The group's backers will waive any covenant breaches until 30 July.

Unsurprisingly, the group will not pay a final dividend for the year to 31 March.