SHARES in troubled engineering company Jarvis slumped further yesterday after it said the completion of its 2004 audit would result in a £9m increase in pre-tax losses.

Jarvis said the increased losses related to changes in the timing of accounting for the sale of the group's interests in two Private Finance Initiative and University partnership programme joint ventures.

The group said its auditors had advised it to account for the income from the two transactions in this financial year rather than the past financial year.

The move will result in losses for the year to March 31, rising to £256m instead of the £247m previously stated.

Jarvis said the changes would have no material impact on the group, but added that the auditors' report continued to refer to "fundamental uncertainties" summarised in the group's final results last month.

Last month, Jarvis unveiled a survival strategy after securing the support of its lenders for another eight months.

The group said it had fallen £246.7m into the red because of £100m losses on construction contracts in its accommodation services operation and write-downs on the value of its businesses.

As part of terms agreed with lenders, Jarvis plans to focus on UK rail activities and local authority services while scaling back accommodation services.