The engineering firm Jarvis reported widening losses today and warned of "fundamental uncertainty" ahead, as it tries to stave off bankruptcy.
The company said losses in the year to March 31 rose to £353.8m from £256m a year ago and that auditors were likely to modify their report to highlight the "fundamental uncertainty in respect of the ability of the group to continue as a going concern".
Once Britain's biggest construction and engineering company, Jarvis has run into trouble since a train derailment on track it maintained near Potters Bar station in Hertfordshire killed seven people in 2002. Its problems were compounded by cost overruns in private finance initiatives, particularly in student accommodation.
As part of its recovery plan, Jarvis will concentrate on its core businesses of UK rail renewal, roads and plant hire work. Jarvis attributed operating losses of £95.5m to less rail renewals work, the loss of road maintenance contracts and losses in its facilities management operations.
Earlier this week, Jarvis asked shareholders to approve a restructuring plan that would hand ownership of the company to its banks and that it said would save it from bankruptcy.
Under the plan, Jarvis will give creditors 95% of the company's shares in return for cancelling £350m of debt. Shareholders will vote at an extraordinary general meeting set for August 4.
If it fails to win shareholder approval, Jarvis intends to delist from the London stock exchange and go ahead with the plan anyway - in which case shareholders would get nothing - and, failing that, enter insolvency proceedings.
Last December Jarvis sold its stake in London's underground rail network to raise cash. Its shares, which reached 780p in June 1998, were down 4.82% at 7.1p in morning trading.
