THE chief executive of beleaguered construction firm Rok hit back at the weekend at comparisons between his company and social housing group Connaught, which has seen its share price collapse in recent weeks after a shock profits warning.
Rok boss Garvis Snook told a Sunday newspaper that the two firms’ respective woes are “two totally different issues”, adding that his own company’s problems are confined to just one part of the business.
His comments come despite forecasts that Rok will now be forced to post a dip into the red over the half year after making provisions to cover irregularities in its accounting. The company was previously expected to make £3m over the first six months of the year.
A week ago shares in Rok almost halved in value in a single day after the group admitted that an accounting report had found financial irregularities in its plumbing, heating and electrical arm. Finance director Ashley Martin was subsequently suspended and is now thought unlikely to return to work with the group.
Analysts are confident that if the problems are contained within just one facet of the company, shares will bounce back, but they warn that it will take several sets of solid results to restore confidence in Rok – particularly after the escalating problems at Connaught.
Rok had expanded into other construction services four years ago, but the companies it bought out did not adopt its own accounting standards and software until October last year.
Snook hired BDO Stoy Hayward to conduct a thorough appraisal of the plumbing division after an internal investigation shed light on the fact that it was making losses rather than a healthy margin.