黑洞社区

Question marks still hang over the future of support service group Jarvis even though the firm received support from its banks last Friday.

The firm posted a loss of 拢246.7m for the year to 31 March and admitted that 鈥渇undamental uncertainties鈥� existed over the business.

This lack of certainty was described by one construction analyst as a 鈥渉uge, huge issue鈥� for the firm, which must rapidly sell off assets to lighten its debt burden. It is expected to dispose of its Tube PPP stake and pull out of contracting. It is therefore looking for partners to take over the construction elements in its present contracts.

Chief executive Kevin Hyde described the firm鈥檚 year as 鈥渄ifficult鈥� and the results as 鈥渄isappointing鈥�.

Jarvis received a guarded bill of health from auditor Ernst & Young, assisted by Deloitte & Touche. However, they have pointed to 鈥渟ignificant uncertainties鈥� hanging over the future of Jarvis. These include:

• Whether parts of the business can be sold to the timescale and prices predicted. If not the firm will have to look at further sell-offs or seek more working capital from its banks.
• Uncertainty over money owed to Jarvis.
• Bad publicity has soured relations with customers and suppliers, and the auditors say this needs to be improved quickly. Schemes where Jarvis is preferred bidder must be signed quickly.
• The Jarvis business plan is predicated on the firm鈥檚 ability to attract new business and the effectiveness of its management changes. The auditors note that if these do not prove to be the case 鈥渢he going-concern basis on which these financial statements have been prepared may prove to be inappropriate鈥�.

Turnover increase by 10% to 拢1.3bn from for the 12 months to 31 March compared with same period for the previous year.

One analyst said the firm鈥檚 future was in the balance. He said: 鈥淭he company鈥檚 chances of achieving a turnaround are too difficult to call at the moment. I wouldn鈥檛 like to comment on where Jarvis will go from here. Much will rest on whether other outstanding liabilities come out of the woodwork.鈥�

Robert Wallace, Jarvis accommodation services chief executive, said he was disappointed at the decision to scale down the division less than a month after he took over.

Wallace joined Jarvis on 1 July with a brief to turn round the loss-making PFI arm, but has now been told that it will no longer undertake the construction element of contracts but instead focus on areas such as facilities management.

A Jarvis source said: 鈥淲e are talking to potential construction partners. We will get construction partners on board in the next month 鈥� we might end up setting on one or two smaller players to work on [all] projects.鈥�