Rok chief explains decision to cull development arm

Rok chief Garvis Snook has explained to CJ his decision to pull out of development, and scale back his new building operation.

Rok’s development wing was comparatively small, employing just 37 people at peak. There are now just seven. Most of the 20 no longer in development are working elsewhere in the group though seven individuals resigned.

“I wish we had got out of development sooner,” said Snook. “The board discussed things back in November 2005. I proposed then that we pulled right back but I didn’t persuade my colleagues. We did make a start, though, in 2007.

“What we didn’t see was the US sub-prime mortgage crisis or the collapse of Northern Rock.

“Some of the seven individuals who resigned from Rok to find a living elsewhere in development are struggling. I don’t think that sector will be a happy place to be for some time.”

Rok has also decided to cut its new build operation back from a £450m-a-year business to just £250m.

Snook said: “We’re taking out capacity from our new build operations in both the industrial and commercial sectors. It is mostly tendered work and it will get tougher.

“We already talk internally of being in a recession at Rok and by mid-winter it will be more apparent as tenders will be viciously fought over. Margins will plummet and I don’t want our people trying to win work at suicidal margins.”

The change means that 200 existing jobs will go. Most of these employees have accepted the offer of work elsewhere in the group but a few have decided to depart. Snook says: “Some have said ‘I’m off to Dubai then as I want to do big jobs’.

“Remember that other areas of Rok are growing rapidly and overall our 2009 group turnover will be similar to 2008.”