Jarvis shares dive again

Shares in beleaguered engineering group Jarvis lost another third of their value today following last week’s news that the company could breach its banking covenants.

Jarvis is involved in a number of Public Private Partnership schemes in Ireland, including the proposed Cork School of Music.

Stock in the Hertfordshire-based firm dropped more than 36%, or 12.75p, to 22.25p as investors continued to react with dismay to Friday afternoon’s announcement.

Jarvis shares plunged more than 50% on Friday after the group revealed charges and write-offs that could top £141m (€210.3m) and debts of £230m (€343m) – against £83m (€123.8m) at the end of last year.

It said its lenders had agreed to waive until July 30 breaches of financial and other covenants in their financial agreements which could arise as a result of the write-offs and other matters.

One broker, Investec, today said the company was fighting for its survival and described its balance sheet as being in a “desperate state”.

Another broker, Arbuthnot, said Jarvis had been getting revenues and costs wrong since its first profits warning in June 1999.

It said Jarvis appeared unlikely to be able to reach the end of July in its current form.

“The banks, the customers and the suppliers will determine Jarvis’s future, not the management,” it said.

“We expect the next few weeks will be very turbulent for the company and the stock price.”