Rok boss confident the worst is over

Grant Prior 11 years ago

Rok chief executive Garvis Snook is confident that problems at the firm’s plumbing division have now been sorted and the rest of the group will continue to perform strongly despite the downturn.

Around 80 operatives will leave the Plumbing, Heating and Electrical (PHE) division following accounting problems which led to a profit warning and the suspension of Finance Director Ashley Martin this week.

But Snook stressed that Rok is performing well in other areas like housing maintenance and local building projects and is still recruiting up to 50 tradespeople a month in these divisions.

The PHE group had a turnover of £30m a year out of the maintenance arm’s £250m and group turnover of around £750m.

Despite the profit warning being centred on just the small PHE division the City reverted to its herd instinct and cut 50% off Rok’s stock market value within minutes.

Snook told the Enquirer that the PHE division is being wound down and has stopped working with its traditional house building clients across the North of England which will lead to around 80 redundancies.

Problems were first discovered when the plumbing business moved over to the COINS accounting system which is standard across the rest of Rok.

Snook said: “Costs were not being accounted for properly in an electronic version of leaving your invoices in the bottom draw.

“The business was not as profitable as we thought and was losing money which we decided to stop quickly.”

Snook said the problems at Rok were very localised and totally different from the situation at Connaught.

He said: “Our volumes and margins at the social housing business are static and we are having to win more frameworks to maintain profits but it is a good business.

“Our debt levels are also lower than a year ago and debts come from our development arm because the core construction and maintenance business generates cash.

“It will take many months for us to build trust in the City again but that is exactly what we plan to do.”

Rok’s latest results will be announced on Tuesday.

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