Rok remains in firm standing

The regional newbuild market remains challenging for Rok plc, the company said in its latest trading update, though its repairs and maintenance operations have weathered the economic storm to perform well within expectations.

Rok’s latest trading update follows its interim management statement in November, and re-confirms the board’s position that trading for the year ended 31 December 2009 will be in line with its expectations.

Responsive maintenance operations continue to perform well, with the company saying that response services were “largely unaffected by the current economic climate”. It reports taking on more customers and increasing business with existing customers.

The company said: “Our focus on margins through improved operating efficiency has mitigated the impact of reduced insurance claims due to benign weather conditions in 2009.”

Rok’s planned maintenance services have performed in line with expectations and its margins have remained healthy.

“Social housing improvement, where we are active on 38 frameworks across the UK, remains a strong market for us and we have a significant order book ahead for repair and maintenance work. Our plumbing heating and electrical (PHE) businesses have been successfully integrated and we expect further opportunities in 2010 in this activity,” the company said.

The new build regional contracting market remains challenging and the expected cut backs in public sector capital spend will, the company believes, serve to exacerbate this in 2010.

“Our decision to scale back these activities in 2009 is therefore enabling us to be more selective in the projects we undertake and, as a result, margins have held up relatively well,” the company added. “Social housing new build activity, where we are active on 35 frameworks, recovered well after a slow start to the year assisted by the activities of the Homes & Communities Agency. “

Recently, Rok has been appointed as the preferred service provider as part of the Inspiral Consortium on the Oldham Gateway’s PFI. The company expects the project to be worth £110 million for new build, planned repairs and responsive maintenance over a 25 year period.

“We continue to focus on reducing net debt levels which have improved significantly since the half year despite the change in business mix,” said the company. “[Rok] continues to make progress with the disposal of its remaining Development assets in a very challenging market.”

Rok will announce its preliminary results on 9 March 2010.