Rok trading volumes fall in final quarter of 2008

Rok has announced that its trading volumes fell in the last quarter of 2008 in a trading update this morning (Tuesday). As a result, the group has reassessed its expectations for the year ahead.

Hardest hit were Rok’s regional contracting activities. These have already been scaled back hard. The target is now much more modest and Rok says it is already seeing “visibility of over 80%” of its revised 2009 aims.

The restructuring unveiled in November has been completed. This takes £20m of costs out.

Rok secured a further £880m of long-term framework agreements during 2008 (up from a figure of £780m in 2007) bringing the total value of expected future revenues to £2.3bn.

These frameworks are principally in social housing, education, airports and the insurance sectors.

“There is continuing growth in new framework opportunities with the total value being bid of £2.4bn,” said Rok.

The confirmed forward order book at the year-end stands at £400m (2007: £590m). The lower figure partially reflects the reduction in the group’s new build contracting capabilities. 

In summary Rok said that trading for the year to 31 December 2008 is “in line with expectations”.

“The new build private sector market continues to be challenging with discretionary spend being restricted,” noted Rok, “and this has resulted in a more competitive landscape for new projects. 

“Public sector works, particularly education and social housing are holding up well, and while there was an impact from a limited number of project cancellations and deferments in the autumn, there has been no further deterioration.

“Recent Government announcements to provide further funding for public sector projects are expected to impact in the second half of 2009.”

Net debt stood at £44m at the end of the year.