Rok to close commercial property arm to focus on growth

ROK, the construction and maintenance group with a number of operations in Yorkshire, has announced a rise in profits but said it was to close its development division.

The group said it had started to “reduce exposure” within the commercial property market last year as a result of the credit crunch and effects of the sub-prime loan market in the USA.

Rok said that it believed the “bottom of the market” was approaching and had taken the decision to shut the division to divert funds into further acquisitions to help it continue its growth strategy.

Announcing its interim results for the six months ended June 30, Rok said that turnover had increased by 37% to £546.7m with pre-tax profits up 22% to £12.4m.

Rok said that current trading was solid, underpinned by public sector spending on social housing and education with framework project contracts of £400m, up 10% on the previous year.

However the group said it was experiencing reduced levels of enquiries for larger capital projects from the private sector, and increased competition from other organisations bidding for contracts within this market.

Chairman Stephen Pettit said: “We have planned for the period ahead and taken the necessary steps to ensure that Rok is well positioned to prosper. Overall we are confident of a satisfactory outcome in the current year from our core building and maintenance activities. The board believes the group is well placed to succeed in these more challenging economic times.”

Mr Petit added the group was confident it was well-placed to succeed in the current economic climate.

Rok, which was founded in 1939, has made a series of other acquisitions which now sees it operating from a network of offices across the UK.

It has made a number of purchases in the Yorkshire region, acquiring Richardson Projects, which operates from offices in Leeds and Rochdale, for more than £20m in April this year.

It also acquired the construction arm of Malton-based S Harrison Group and Wakefield-based construction firm Lemmeleg, which was co-founded by Yorkshire Forward chairman Terry Hodgkinson.

The company announced an interim dividend up 10% to 1.15p per share.