Jarvis makes interim pre-tax loss of £1.5m

Jarvis believes it has successfully stepped back from the brink of extinction. Latest interim figures show a pre-tax loss of just £1.5m, well down on the life-threatening loss of £59m in the comparable period last year.

“This is the start of the new Jarvis,” said Steve Norris, chairman, said this morning as he unveiled the group’s latest figures (six months to 30 September).

“The history of Jarvis over the last few years has been of near collapse, followed by gradual and painful recovery achieved only with commitment and effort from thousands of people at every level.

“We are far from restored to full health and we still have challenges to overcome, but continued focus on operational improvement and strategic repositioning sees us in a position few would have given us credit for only two years ago.”

Interim turnover ran to £150m, a drop of around £20m.

After jettisoning everything possible in order to survive, Jarvis is left with three operating divisions: roads; accommodation services; and rail and plant.

Their performances still make uncomfortable reading. In rail, the £67m turnover generated £5m of operating profit, well down on the previous figure of £9m.

The plant division’s downturn in current performance was even more marked, with turnover of £35m resulted in a £5m operating profit, much less sparkling than the previous figure of £12m.

Overheads are far too burdensome for the group’s current operations and Jarvis looks to cut them back further, promising £10m-worth of annualised cost savings still to come.

And no sooner had net debt been worked off than it has started to shoot up again. The latest £46m of debt is well ahead of the previous figure of £6m.

In the accommodation services division, turnover of £51m resulted in an operating loss of £100,000.

Currently there are 31 contracts, five of which are loss-making. The rest are profitable at the operational level.

The three most-loss making of the contracts are soon to be sold. A heads of terms agreement has now been signed though final negotiations “will take several months to complete”.