Rok profit slumps

Rok’s pre-tax profits slumped by nearly a half to £6m in the first six months of the year despite cutting back overheads for the second time in 12 months.

Group chief executive, Garvis Snook, admitted that the building firm like much of the industry was caught by the severity of the downturn.

In addition to large-scale cost cutting last year Rok paid out a further £1m to cover redundancy costs in the first six months of this year.

The cuts helped to maintain group operating margins at 2.4% even though turnover slid by a third to £364.5m.

Snook said the group had scaled back its new build operations to focus on maintenance, which had seen the company rise to become the market leader in property insurance repairs.

“We will continue to manage our cost base vigorously in the remainder of the year as the difficult trading conditions persist and as we prepare the business for what we expect will be a challenging 2010 particularly in the new build construction market,” said Snook.

He added: “Having now scaled back our capacity for capital intensive new build commercial, industrial and retail projects we are continuing to focus our new build activities on the lower risk social housing sector."

Snook said that the rented housing sector would continue to benefit from both economic needs and political will as spending cuts hit other sector of the building industry.