Financial Times

Rok heads for 1bn turnover
By Philip Stafford

Published: August 15

Rok, the construction, maintenance and development group, is set to record 1bn of annual turnover after a bumper set of interim results.

The group, which operates a network of local builders, said its order book was up 50 per cent on 2006 levels at 550m.

Garvis Snook, chief executive, said the interim figures had demonstrated better progress than in any previous report since the inception of Rok in 2001.

"These results prove the model works and generates better and better returns," he said.

He added he was "very comfortable" with analysts' forecasts that full-yearturnover would top 1bn.

Revenue climbed 44 per cent to 434m in the six months to June 30 while pre-tax profit increased from 6.4m to 11.2m, thanks in part to last year's acquisition of Tulloch Construction for 31.3m.

Like-for-like sales rose 20 per cent, driven by contracts in social housing and education. Overall, the company won 630m of social housing contracts in the past 12 months.

Earnings per share rose 45 per cent to 4.5p while the interim dividend is lifted 22 per cent to 1.05p.

Mr Snook said productivity levels had been hit by the poor summer weather but that Rok would pick up repair and rebuilding work in England via its contracts with insurance groups such as Royal & Sun Alliance, Lloyds TSB and Zurich.

The shares rose 20p to 215p yesterday.

Copyright The Financial Times Limited 2007

Strong Buy says GCI
http://www.growthcompany.co.uk/recommendations/258415/rok.thtml

ROK - STRONG BUY
James Crux - Wed 14/08/2007

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 Roks 2001 inception. Increasingly strong organic sales and profits growth reflected the increased recognition of Rok as the nations 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 Roks 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.

Market cap: 367.18m
PE Forecast: 16.5
Share price: 211.5p

ROK hit by poor credit market

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