BUILDING repairs and maintenance firm Rok said first-half pre-tax profit was down 50 per cent, after it warned last week earnings would be hit by accounting problems and suspended its chief financial officer.
Rok, which on August said on 11 August it found "serious failings" in its plumbing, heating and electrical (PHE) business, said revenues fell to £308.1m in the six months to end-June against £364.5 m last year.
"The problems within PHE have been a regrettable chapter in Rok's history ... The Board and management team are totally committed to rebuilding the strength of the business and delivering against expectations," chairman Stephen Pettit said in a statement.
The company said poor weather conditions at the start of the year had also affected earnings because it prevented its teams from accessing properties in order to carry out work.
Shares in Rok lost more than 50 per cent last week when the company said it had suspended finance director Ashley Martin, who held the role since 2003.
The average forecast for Rok's full-year pretax profit stands at 20 million pounds, according to a Thomson Reuters I/B/E/B poll of four analysts.
Rok, which is one of Britain's leading providers of social housing maintenance, said its business in this sector was not hit by government spending cuts and it expected the unit to perform in line with expectations for the rest of the year.
Rival Connaught has struggled against public spending cuts, issuing a string of warnings about the health of its finances since a number of contracts with local authorities were deferred, wiping 90 per cent off the value of its shares.
Rok said it has planned for lower volumes in the construction sector next year because of cuts in public spending but said it expected income to grow through new insurance customer wins.
The company said last week it would take an exceptional charge of £10m to close the PHE business in England.
ROK also cut its dividend by 33 per cent to 0.5 pence.
City A.M. Reporter