Rok’s accounting woes halve profits

 
Marion Dakers
ROK, the troubled building and maintenance group, posted a 50 per cent fall in first-half pre-tax profit and cut its dividend yesterday.

The Exeter-based firm issued its second profit warning in four months last week after saying it had discovered “serious mismanagement” of contracts in its plumbing, heating and electrical business.

The firm, one of the country’s biggest providers of social housing maintenance, said at the time it would suspend its finance director Ashley Martin. The news caused its shares to tumble 50 per cent.

Chief executive Garvis Snook told City A.M. the firm had “gripped the problem quickly and firmly, and as a result, today’s results were in line with expectations.”

He added that the firm has been approached by customers of social housing peer Connaught, and that Rok has good visibility on market orders going forward.

Pre-tax profit for the six months to 30 June was £3m, compared with £6m for the same period a year earlier. But when £6.4m of exceptional charges relating to the accounting problems are included in this period, the company slumped to a £3.8m pre-tax loss.

Half year sales of £308.1m were down from £364.5m a year ago, while the interim dividend was cut by 33 per cent to 0.5p. Rok reduced its net debt by £10m to £47.6 in the first half of the year.