Jasmin blames contract delays for cash warning

Shares in the technology company Jasmin crashed 22 per cent on Christmas Eve after the company warned that cash was "tight" thanks to delays in completing orders.

Jasmin, whose technology is behind the station announcements on London's Northern and Piccadilly Underground lines, said it had run into difficulties after various contracts had taken longer to complete than expected.

"The last 18 months of trading has been a difficult period for the company in terms of cash management, with various contracts which have overrun. Whilst we have identified these difficult contracts and taken action, cash is tighter than previously thought," the company said.

The stock closed down 22 per cent, or 14.5p, at 52p on Christmas Eve after Jasmin said it was looking at "a number of options to find a solution to the cash situation".

The cash crunch came to light after Mark Thickbroom, the company's recently appointed finance director, ordered a review of the business. The findings of that review were presented to the company's board on Tuesday afternoon. Delays on three contracts - with Chiltern Rail, Arriva and the Highways Agency to supply electronic signal drivers - were said to be at the heart of the problem.

Jasmin is now hoping to carry out a financial restructuring in the New Year and is said to be looking at the possibility of raising fresh funds as well as changing its debt facilities among other things.

Nevertheless, the company insisted that it had the support of its bank. "In the meantime, our lenders remain supportive, the directors will continue to be vigilant on costs, and the company will update the market at the next development," Jasmin said.

In the six months to 30 September, the company turned out a pre-tax loss of £600,000 compared with a £300,000 loss in the same period a year before. Turnover rose to £4.6m from £3.6m. Jasmin said then that it had a £14.5m order book.