Struggling Rok suspends chief financial officer

The company said today that due to continued underperformance at its plumbing, heating and electrical business (PHE) it had commissioned an independent review which found there had been "serious failings" in the financial controls of PHE.

Rok in April flagged that its PHE business was trading below expectations and said it would look to terminate some contracts and carry out a restructuring. The company believes PHE will now make no contribution to group profit this year.

The company was positive on the outlook for its construction and social housing businesses but said the difficulties at PHE would hurt full-year underlying pretax profit and it believed it would be significantly below market expectations.

"The board has decided that the company must have new financial leadership," Rok said as it announced the suspension with immediate effect of CFO Ashley Martin, who has held the role since 2003.

David Miller will assume the role on an interim basis, the company said.

Last year Rok won a contract with a consortium of registered social landlords to provide new homes in Yorkshire over the next four years after being chosen by Firebird JVC. It is also on the list of approved contractors for Yorkshire and the Humber's regional building framework

Results for the first six months of 2010 would be in line with previous guidance, said Rok.

The company said its cash generation had strengthened in the first six months of the year and this was expected to lead to a material reduction in net debt by the end of the year, giving the board confidence on meeting its banking covenants.

Shares in Rok, which have fallen 32 per cent in the last six months, closed at 29 pence on Tuesday, valuing the company at 52.9m.