Property repair and maintenance specialist Rok has reported its performance has “stabilised” since it was forced to issue a profit warning in November.
A trading update said performance was in line with the lower expectations outlined by November’s Interim Management Statement which had revealed millions of pounds worth of work had been cancelled or deferred by clients.
Since then the company has completed a £20 million cost cutting programme and further refocused operations on planned and response maintenance work.
The latest statement said Rok’s response maintenance operations “continue to grow strongly” while planned repairs and improvement activities are “performing well and continue to gain new long term contracts, principally for social housing and education.”
The statement continued: “This, together with the recent five year contract appointment by BAA (worth up to £130 million) will substantially underpin revenues for the next few years. Whilst we saw some project slippage in the autumn linked to the issues affecting financial markets, this has now stabilised.”
New build 'challenging', but public sector holding up
However, Rok says the new build private sector market continues to be “challenging with discretionary spend being restricted and this has resulted in a more competitive landscape for new projects.”
Rok was more optimistic regarding public work which should receive a cash injection from Government.
The statement said: “Public sector works, particularly education and social housing are holding up well, and whilst 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.”
Frameworks offer future opportunities
Rok said it has secured a further £875 million worth of long term framework agreements during 2008 compared to £780 million in 2007. This brings the total value of expected future revenues to £2.3 billion compared to £1.7 billion in 2007.
These frameworks are principally in social housing, education, airports and the insurance sectors.
The statement said: “There is continuing growth in new framework opportunities with the total value being bid of £2.4 billion.
“The confirmed forward order book at the year end stands at £400 million (2007: £590 million) reflecting the planned reduction in our new build contracting activities.”
Rok will be announcing its preliminary results on 12 March 2009.