Rail network services company Jarvis today revealed it is cutting 450 jobs after warning results for the year to the end of March would be below expectations.
In a trading update today, York-based Jarvis said operating costs for the financial year 2009/2010 will be reduced to reflect lower demand for rail and plant services resulting in 450 job losses.
The restructuring is expected to result in a one off adverse profit impact of approximately £8 million in the current financial year, the cash effect of which will occur in the 2009/2010 financial year.
Jarvis also said it was still reviewing the impact of projected lower volumes across the rest of its business and was “continuing to work closely with Network Rail and other stakeholders in order to restructure and downsize the business.”
Jarvis executive chairman Steven Norris said: “It has been a painful process to absorb the impact of Network Rail’s sudden reduction in workload.
“But I am confident that by taking the necessary steps early the company can look forward to improved work volumes in 2010 and beyond.”
Jarvis said that during the final quarter trading performance had declined further because of the significant delay and reduction in workload following completion of the West Coast Route Modification programme.
However as one of Network Rail’s chosen track renewals contractors the company continues to be well placed to maximise longer term opportunities arising from around £4 billion being invested in track renewals by Network Rail over the next five years.
The firm’s net debt at year end is now expected to be significantly lower than previous management expectations, principally due to a substantial reduction in accounts receivable.