Rok draws a £6.8m line under woes at plumbing arm

Grant Prior 14 years ago

The cost of financial mismanagement at Rok’s plumbing business was revealed as £6.8m today as the contractor drew a line under the division’s troubles during its interim results.

The cash was spent on redundancies and restructuring as around 150 people left the firm and the problem Plumbing, Heating and Electrical (PHE) business was integrated into the main maintenance division.

Rok alerted the City about the woes at its PHE arm last week during a profit warning which also saw finance director Ashley Martin suspended.

Group interim figures for the six months to June 30 show pre-tax profits before the restructuring costs down to £3m from £6m last time while turnover fell from £364.5m to £308.1m.

Chairman Stephen Pettit described the PHE problem as “a regrettable chapter in Rok’s history.”

But he added: “Immediate and appropriate action was taken relating to the shortcomings in financial and operational control in this part of our Maintenance and Improvements operations.”

Around 80 operatives have already been made redundant at the PHE division with another 70 in the process of leaving as the division is wound down.

Chief executive Garvis Snook said turnover at Rok’s social housing business remained flat for the period and margins were held at last year’s levels despite the change in government.

Social housing turnover dipped to £84.5m from £98.4m last time with operating profit down to £3.6m from £5m.

Construction operating profits remained steady at £0.5m from £0.6m despite turnover falling to £115.7m from £160.1m.

Snook said the construction arm was continuing to target profit over turnover.

He said: “This deliberate tactic has been employed since late November 2008 to minimise risk during the worst phase of the recession.

“A tight focus on costs has continued and the order book is good.  The construction business, with its seasonal second half weighting is positioned to continue to perform well during the remainder of the year.”

Looking forward to next year, Snook said: “We expect, and have planned for, lower volumes in construction next year in light of forecast reductions in public sector spending.

“Due to high levels of future revenue visibility we expect to increase our market share in social housing where industry volumes are forecast to reduce overall.

“Visibility of revenues in our Maintenance and Improvements business is good and we expect income to grow through new insurance customer wins.”

Net debt at the company fell to £47.6m from £57m while Rok also declared an interim dividend of 0.5p a share.

Latest news

Subcontractors form alliance for major civils jobs

Trio of specialists join forces to collaborate and offer Tier 1 contractors a turnkey solution
24 mins ago

Fear of supply chain failures boosting collaboration

Procurement survey also reveals project bank account use is rising
55 mins ago

Wates set up business to target 160,000 mouldy social homes

Healthy Homes service will be offered to social landlords across England
7 mins ago

Higgins wins £75m Peabody Passive House job

Latest phase of Deptford Landings to start construction
11 mins ago

Contractors and unions agree Sizewell C working deal

New deal offers improved sick pay and parental leave over Hinkley Point deal
11 hours ago

Competition chiefs win legal fight for more construction raids

High Court rules CMA officials can raid a domestic property as part of investigation
17 hours ago

More Osborne companies file administration notices

Three more divisions lodge notices with court
1 day ago

McLaren wins multi-storey urban logistics contract

South London win with British Land is pioneering urban logistics hub
24 hours ago

Big social housing schemes at risk over funding uncertainty

Housing associations warn uncertainty over public funding beyond 2026 is curbing new schemes
24 hours ago

Kier wins Worcestershire town centre renewal

Firm secures Bromsgrove commercial and cultural hub project
23 hours ago

BAM signs Kent school contract at £42m

Sevenoaks school rebuild signed off at £8m more than first estimates
24 hours ago

RG Group signs £121m Newcastle rental homes job

Developer Olympian Homes advances 519 flats plan at Pottery Lane site
4 days ago

Geoffrey Osborne files administration notice

Contractor in talks to save parts of the business
4 days ago

Winners named for £260m Manchester Uni framework

B&K, Henry Bros, Graham, Robertson and Vinci among new line-up
4 days ago

Shed specialist Benniman rides out market lull

Worcestershire warehouse builder says industrial and logistics work is picking up again
4 days ago

Another contractor cleared after high profile immigration raid

Adana Construction employees were working legally on site swooped on by Home Office
4 days ago

McAleer & Rushe wants to meet new London suppliers

Contractor holding Meet the Buyer event in London: Register now
4 days ago

McAlpine signs £500m Broadgate dual towers deal

Work to start on iconic 36-storey and 21-storey towers
5 days ago

Worker rescued from collapsed four metre deep trench

Fire crews take six hours to save trapped builder near Blackwall Tunnel
5 days ago

Gove puts another major building scheme on hold

Secretary of State starts another planning fight after M&S defeat
6 days ago

Greenwich University tenders £300m framework

Up to five firms will carry out upgrade and newbuild work at three campuses
5 days ago

Work starts on Manchester 26-storey Obsidian tower

Contractor Domis starts Salboy's 10th Manchester scheme in seven years
5 days ago

Race for £1.3bn West Midlands social homes framework

The Community Housing Group reboots tender race for new build housing
5 days ago

Delancey submits £400m King’s Cross lab plans

200,000 sq ft lab/office project will be built above railway and tube tunnels just 4.5m below
6 days ago

Winners revealed for £150m fire safety framework

New deal will help organisations comply with the Building Safety Act
5 days ago

Sellar plans £500m City tower next to Walkie-Talkie

Consultation starts on London 60 Gracechurch Street tower
6 days ago

Severfield ends year on high with record order book

Orders top £500m with strong future pipeline of opportunities ahead
6 days ago

Second senior director exits National Highways

Commercial director Malcolm Dare set to move on to new role
6 days ago

New scheme fuels London lab building boom

Plans in for 160,000 sq ft Whitechapel scheme near Royal London hospital
6 days ago

Contract race starts for next £155m section of A9 dualling

Prior Information Notice published for Tay Crossing to Ballinluig stretch
7 days ago

Contractor services