Rok goes into administration following shock profit warning
The board of building services company Rok said today that it would place the firm into administration just months after it revealed sizeable losses and financial shortcomings at its plumbing division.
Despite a recent contract win with insurance giant Axa, Exeter-based Rok, which employs more than 2,000 tradespeople, said it would place the company into administration and had applied to the Financial Services Authority to suspend the listing of its shares.
The announcement comes just 10 weeks after social housing firm Connaught entered administration – leading to about 1,400 redundancies.
Rok, the self-styled "nation's local builder", had recently reported half-year losses of £3.8m, shortly after an independent review by accountants BDO uncovered serious failings at its plumbing, heating and electrical (PHE) business.
Chief executive Garvis Snook took over the running of the firm in 2000, when it was known as Exeter Building Contractors (EBC).
The company was losing money and had a huge pension deficit, but by 2007 Snook had turned it around and it was on the brink of listing on the FTSE 250.
Snook took the company's market value from £7m (as EBC) to £322m. Rok deals with a wide range of services from general repairs to medium-sized construction, and has about 30 regional bases.
But the company was hit hard during the financial crisis, when it lost several private and public clients and was forced to cut some 750 jobs.
Extreme weather affected Rok and the rest of the industry earlier in the year, and conditions worsened for the firm in April, when it said profitability would be hit by a number of "underperforming" contracts in its PHE arm.
The firm undertook a restructuring of the division and terminated the troublesome contracts before appointing BDO to conduct the review into the division.
Snook bought £50,000 worth of shares with his own money after the review findings were published to show confidence in the business. He was hopeful that a strong order book worth about £435m would pull it through.