Banks extend Jarvis's grace until March 2005

The collapse of Jarvis has been averted thanks to its banks agreeing to keep propping the group up until next spring - 25 March 2005 to be precise.

The reprieve gives chief executive Kevin Hyde eight months to sort out his mountain of problems. The group’s financial results were finally published this morning, after being postpones for two months. They came within 24 hours of breaking Stock Exchange rules.

Jarvis ran up a pre-tax loss of £247m as a whole raft of extraordinary, one-off costs came to the surface. Turnover was little changed at £1.4bn. Last year this produced a pre-tax profit of £63m.

“This has been a difficult year,” Hyde said , “and the results are disappointing.” He thanked his lenders for their constructive attitude “which allows us to complete the recovery strategy we embarked on some months ago”.

A combination of settling a major claim with Network Rail and provisions against “newly identified issues mainly within the accommodation services business” resulted in Jarvis breaching its bank covenants at the time the results were originally due to be published, Hyde said .

In accommodation services, Jarvis will no longer undertake any new construction activities. It is taking a £74m hit to cover potential future problems to resolve final account disputes and ongoing relationships with subcontractors and “the extent that damages may become payable to the customer for late delivery as a result”.