Profitable repair and maintenance work helps offset steep drop in new build activity

Contractor Rok saw turnover decline by almost a third in 2009, but nevertheless managed to increase pre-tax profits nearly threefold to 拢17m.

Turnover fell from 拢1.01bn to 拢714.8m as revenue from new build activities dropped by 45% and the business refocused around repair and maintenance work.

The business, which incurred exceptional charges in 2009 of just 拢2.1m, down from the 拢12.2m reported in 2008, said it already had 85% of its 2010 revenue 鈥渟ecured or probable.鈥� Chief executive Garvis Snook said the firm鈥檚 maintenance and improvement businesses now accounted for 58% of Rok鈥檚 revenues and 83% of its profits.

The company spent 拢5.m restructuring the business in 2009, but said it would reap savings of 拢18m per annum. However, this charge was off-set by a reprovision of 拢3m to the company because fines under the OFT鈥檚 investigation for bid-rigging proved to be lower than expected.

Snook said: 鈥淭here is no doubt the poor economic climate of the last 18 months created some of the most challenging trading conditions any of us can remember, particularly for our industry."

"In the last year we have shifted the focus of the group鈥檚 operations on to the more profitable and more resilient repair, maintenance and improvement markets as we believe they provide attractive growth potential for Rok."

"In sizing the construction business for this current economic environment we have scaled back our capacity by more than half and as a result have avoided the temptation to target these higher risk volumes at the expense of profitability.鈥�

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