ROK bucked the gloomy outlook in the building industry yesterday, reporting an upbeat set of half-year results, buoyed by solid public spending on social housing and education.
But despite the good figures, the firm, which in 2006 bought up the construction and civil engineering divisions of Scottish builder Tulloch, announced it is to close its commercial property operation as a direct result of the credit crunch.
Chief
executive Garvis Snook yesterday praised Tulloch as "the best acquisition the company has ever made", revealing that the firm's Scottish business had grown from £175 million to £300m since the acquisition – and added he was open to further takeovers north of the Border.
However, at Pitkerro, the Dundee-based plumbing and heating services firm it acquired in January, Rok admitted business was tough, saying it had redeployed around 30 per cent of its staff to other parts of Rok's business.
Snook said that other parts of the business which hit hard times could redeploy up to 200 workers to divisions enjoying a boom period.
Yesterday's results for the six months to the end of June revealed a 37 per cent rise in revenue to £546.7m and a 22 per cent rise in pre-tax profit to £12.4m.
The builder, which recently completed a major contract at General Register House on Edinburgh's Princes Street, said its business mix was evolving to focus on activities such as repairs, refurbishment and response maintenance – which it says will produce higher margins in the current economic environment.
Among other key contracts, the company added in a statement it had extended its relationship with airports operator BAA to provide smaller building repair and maintenance services to its seven airports, including Edinburgh, Glasgow and Aberdeen.
Rok last year beefed up its Scottish operations when it opened a new base at Newbridge in West Lothian as well as the £3m acquisition of Pitkerro.
He yesterday told The Scotsman: "We were expecting the correction to come in spring 2008, but subprime in the States and the collapse of Northern Rock accelerated it and there is just no way to make profit in commercial property at the moment. We would be better off using the money to fund acquisitions such as another Pitkerro – or ideally another Tulloch."
Snook admitted that the company was unlikely to find another acquisition as big as Tulloch north of the Border, but would look for smaller companies similar to Pitkerro.
He said: "We would look out for acquisitions in Scotland, but are also looking in south Wales, East Anglia and Northern Ireland where we currently do not have much of a presence."
