Rok reports record interim turnover of £550m

Rok has unveiled a record interim turnover of £550m, one third higher than in the comparable period of last year.

Pre-tax profit in the six months to 30 June 2008 ran to £11.3m which gives Rok a margin of 2.1%.

In the first six months of 2007 Rok’s profit margin was slightly higher at 2.3% when turnover of £400m generated a pre-tax profit of £9.3m.

The highlights of the past six months are:

• Maintenance businesses continued to grow strongly;
• Framework wins of £400m – up by 10% on previous year;
• Total value of long-term frameworks now runs to £2bn – 25% higher than at the same time last year;
• Closure of development business well advanced.

Rok’s aim is to earn itself the brand name of “the nation’s local builder”. Garvis Snook, chief executive, said: “There are some 50,000 small building operators in the UK and this fragmented £42bn market provides an excellent opportunity for Rok to grow, either by market share gain or through acquisition.”

The 37% growth in turnover in the past six months was the result of acquisitions (28%) and organic growth (9%).

There was a strong contribution from Pitkerro, an acquisition made in the second half of 2007, and Richardson Projects which was bought earlier this year.

Having decided to focus its core operations on new build, repairs and maintenance activities, Rok had already been running down its commercial property development arm but it has now decided to close the development division altogether.

Closure costs run to £3.8m. Rok has made a £7.5m write-down to net realisable value in respect of the remaining development land and work in progress.

In addition, the balance of goodwill arising from prior development acquisitions of £3.8m has also been written off in full.

Ongoing operations:

New build

Turnover was £290m, a rise of 26%, with operating profit unchanged at £2.8m. Activity in the private sector new-build market has already been trimmed back and will be scaled back further still so that in the full 12 months to December the volume will be around 60% of the 2007 figure.

Planned repairs and refurbishment

Workload was 55% higher at £200m and the operating profit lifted from last year’s £6.7m to a new figure of £9.4m.

Snook said: “Rok continued to top the league for social housing framework wins for the last 26 months in succession.”

Response maintenance

Turnover ran to £60m, a rise of 42%. Like-for-like organic growth accounted for 15% of the upsurge in workload.

This division now employs 1,000 tradesmen across the country, many of whom are multi-skilled and operate from 900 vans.