Companies: ROK   

Building and maintenance star Rok has delighted investors with record interims to June for the seventh successive year.

Chief executive Garvis Snook announced a 75% rise in headline pre-tax profits to £11.2m (underlying profits grew 55% to £12.1m), on turnover that lifted 44% to £434m, driven by healthy 20% organic growth as well as the Autumn ’06 acquisition Tulloch, and East Midlands operator SOL Construction, which was bought in May. And following a half of very strong cash generation, the half-time dividend was increased to 1.05p (0.86p), from a 45% earnings rise to 4.5p.

Snook expressed delight at delivering ‘an interim statement demonstrating better progress than in any previous report’ since Rok’s 2001 inception. Increasingly strong organic sales and profits growth reflected the increased recognition of Rok as ‘the nation’s local builder’, said Snook, announcing a 175% profits surge to £2.2m at the response maintenance division. Recent disastrous floods have generated ‘a surge in demand’ from major insurance customers.

Elsewhere, the planned maintenance and repairs arm delivered 51% growth in profits to £9.5m. This division now sources over half of its sales from long-term social housing and education contracts. These sorts of deals are gravitating towards the bigger players and Rok’s national scale combined with its specialist local contacts give it the edge over rivals. Profits at the Rok development division waned slightly from £3.7m to £3.4m though the seasonally stronger second half is now well underway.

With UK demand for building and maintenance services strong, Rok boasting high revenue visibility – ‘firm’ orders stand at £550m and the framework order book is worth £1.6bn – and the market looking for a jump in full-year profits from £22.4m to a prospective £32.8m, shares in this superior operator have strong appeal.

ROK	LSE	£32.35m	18.25p	-0.75p
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