Rok to cut 15% of workforce
Rok, the maintenance and building services group with offices across the North West, plans to make 15% of its workforce redundant as it seeks to save £20m a year in costs.
The listed group gave the news in its interim management statement, published today for the period 1 July to 4 November 2008.
The statement said customers had cancelled 50 projects totalling in excess of £150m due to the current banking sector crisis. £74m of this activity would have been expected to fall into 2008.
Rok said it expects a drop in revenues of £120m from its previous expectations and a knock-on reduction in profits by £12m for 2008.
The order book currently stands at £470m, down from £600m at the half year. Total long-term framework agreements stand at £2.1bn, up from £2.0bn in July.
The statement went on: "Although the Group has been scaling back its contracting operations to focus on repairs, refurbishment and response maintenance, the duration of Rok's projects is considerably shorter than for many in the sector and therefore the impact has been far more rapid. The recent credit crisis has therefore caused the Group to reassess its overall revenues for next year to ensure an increase in the proportion of secured work in the current climate."
The job losses would be mainly in white collar roles in the contracting business. The company has 60 offices across the UK. The development division has already been scaled back with undeveloped sites put up for sale, including land in Blackpool and Wilmslow. In the North West, Rok has offices in Chester, Macclesfield, Liverpool and Salford.
Rok said it "is continuing to make progress with disposals of its property development assets in a particularly difficult market and expects to report that its assets held for resale will be reduced by some £10m by the end of the year."
