Rok Suspends FD
Rok, a repair and maintenance company saw that its shares jumped 45% yesterday following notification of serious mismanagement and the announcement of the suspension of its finance chief.
The news follows a review by BDO, which found that there were serious failures in the financial controls. In response, board has taken a decision to suspend Ashley Martin with instantaneous effect and David Miller (a specialist interim CFO) has been assigned hi duties. David was formerly Chief Financial Officer in Amey PLC. Garvis Snook, chief executive of the company, continues in post.
Yesterday, in a statement to the market, Rok said that the underperforming contracts had been terminated and its plumbing, heating and electrical division has also been restructured, after these were identified of failing earlier in the year – but that this had continued to disappoint.
BDO’s review being instigated by the board following Rok’s April 30 interim management statement warning regarding the underperformance, unveiled serious failures in the financial controls of the PHE business. It has also been confirmed by the BDO that it is the full extent of the problem.
In order to affect the group’s profit for remaining part of the year and impact the overall underlying pretax profit for the year significantly below market expectations, the underperforming division is set to drive the company to make write-down’s.
The board has decided to rationalize the cost base of its maintenance and improvements division. As believed by the directors, this is prudent in the present economic climate though the business board is confident about the outlook for the wider division and the model remains robust.
Rok was, however optimistic about the social housing and construction businesses and said that with good order books, these may perform well for the remainder of 2010.