Rok said yesterday it had maintained profit levels last year despite reduced revenue.
Chairman Stephen Pettit said: “This reflects the impact of our cost-reduction programme as we shift our emphasis to the repair, maintenance and improvement markets.
“The board continues to be cautious on the overall outlook for our sector. The changes we have made in repositioning our business bode well for the resumption of Rok's growth when the wider economy begins a sustainable recovery.”
He was speaking after Rok – whose acquisitions in recent years have included Tulloch Construction and Corrie plumbing, heating and electrical, and which now has about 1,300 workers north of the border– reported 2009 results.
Chief executive Garvis Snook said: “There is no doubt the poor economic climate of the past 18 months created some of the most challenging trading conditions any of us can remember, particularly for our industry.
“In the past year, we have shifted the focus of operations and as a result our maintenance and improvement businesses now account for 58% of revenue and 83% of our profits.
“Rok will therefore remain focused for its growth . . . on providing repair, maintenance and improvement services to its customers through its directly employed trades people. These markets are not only more profitable, but are also . . . more resilient in the current economic environment, positioning Rok with increased exposure to non-discretionary spending markets. At the same time, we are investing more of our efforts in new-build activities in the social and rented housing sectors as we expect demand to remain robust.
“Our capability for providing repair and maintenance services in social housing also increased and we are part-way through expanding our plumbing, heating and electrical teams across the UK to capitalise on the growing demand for integrated service provision.”
Andy Mallice, Rok’s managing director in Scotland, said he was much more confident than at this time last year, and the company’s Scottish order book was up.
He added that its maintenance and social-housing focus in the Highlands had seen its activities there contribute almost one-third of Scottish turnover.
Rok reported pre-tax profits of £20.4million for 2009 before one-off items, the same as the year before. Its reduced capacity to undertake a large volume of general construction work was the main factor behind a drop in revenue to £714.8million from £1.01billion in 2008.