Rok Plc Share Discussion Threads

[parttime] 08/11/2010 20:49

serantel,

I take it you work in construction?, like myself..Only you've hit several nails fairly and squarely on the head with your posting...

As Re: ROK, Commiserations,(If thats the right word to use) to all holders(Excludinding traders).. but maybe more so to the 'SIPPERS' of which a few have posted here and there,especially investing for the divi yield..

I note ROK paid out a decent divi last year which was covered 4x by reported earnings..However I also note they were cash-flow negative for that year and the year preceeding.. Maybe that could have been a warning to the Yield hunters and a point to check on any other stocks that the divi/income portfolios hold..

[yasq] 08/11/2010 19:17

Haywards26 - 11 Aug'10 - 22:06 - 2104 of 2817


Hi Yas,

Very disappointed investor today, the curse of tipping an investment I hold well and truly hit me today.

Having had a day out I have just returned home and had a third review of ROK'S profit warning today and glean some positive differences between Connaughts (shown below) which has confirmed my intial thoughts of sitting tight on my investment with ROK.

As you mention this is now a risky investment until the bod can prove that they are on top of everything and profitability is as expected/projected.

Debt - falling

"The Board believes that it has taken appropriate action in the best interests of shareholders and the future profitability of the Group. Rok's fundamentals are strong - a solid order book, good momentum in the Social Housing and Construction divisions and very good cash generation leading to materially lower debt."

The problems and loss making contracts - Only one section of ROK being affected - It was spread across CNT as they were not sufficiently diversified away from government spending where as I see ROK as having more strings to their bow.

I also take comfort from the independant review having been completed and BDO reporting that they have identified the full extent of the problems.

"In order to be certain that the full extent of the problem was known, the Board appointed BDO to conduct an independent review. BDO has now reported back to the Board and has stated that there have been serious failings in the financial controls of the PHE business. BDO has also confirmed that this is the full extent of the problem."

The final line in the below paragraph from todays RNS. The board is looking ahead with confidence. So they must feel that they have identified the problems and that they will not continue. If there are any repeats of these problems and any further profit warnings then I feel the bod will be discredited to a level that their positions are untenable. Once is a mistake, twice is a howler, three times is gross incompetance.

"With a significantly lower fixed cost base and having addressed the underperforming operations, the Board is looking ahead with confidence."




yasQ - 20 Aug'10 - 18:44 - 2107 of 2817 edit


WaywardHyward,

I did note the update from Rok. On paper, it now appears undervalued - but then it did when I first assessed it a couple of weeks ago.

However, I was appalled by the comment made by Snook in an article in the Telegraph in which he suggested that ''You end up making management decisions on numbers that are effectively made up". In case Snook has not realised, investors end up making similar decisions based on garbled forecasts.

It is outrageous, in my considered view, that Snook remains in charge given the fact that he was (or ought to have been) in control of affairs. The buck stops with him. As long as Snook remains at the helm, I would never consider an investment in the company. This might make me sound a little bitter, but so be it. When a company loses somce 40% of it's value because the Board remind investors one morning that the numbers they had used were effectively dud, it is not good form. Snook should have gone, since ultimately he orchestrates affairs at the company. I have a rather dim view of him as a result.




Haywards26 - 20 Aug'10 - 19:11 - 2110 of 2817


Hi Yas,

I have stuck with ROK, and it has been creeping back up, hopefully this will continue. I was pleased to see the interim dividend continue, although at a reduced level.

It is somewhat of a fall from grave for Snook after his CEO of the year award in 2007, as you say the buck stops with him and if there was to be any further disasters surely his position would be untenable.

I hear that both ROK and Mears are in discussions with several of Connaughts customers, so may provide some further upside.





yasQ - 21 Aug'10 - 17:25 - 2115 of 2817 edit


Hayward,

I had not heard of Snook until the other week. In fairness, backing Rok was more to do with the underlying fundamentals than backing the management. It just so happened that the company declared soon after that the fundamental picture they had painted was not quite what they had led investors to believe, certainly as far as one part of the business was concerned. The extent of the fall reflected not the impact of that particular division on revenue and profitability, but the perception of management credibility concerning forecasts and the handle of the Head honcho on the overall business. What concerned me above all else was the fact that it required external 'advsiors' to assure Snook that no other issues were of concern. That, by any stretch of the imagination, is not my idea of an efficacious Board.

Rok was an investment as opposed to a momentum trade, and thus, given the state of affairs I have decided to steer clear. That having been said, on paper, it continues to remain undervalued. However, given the potential for things not being what they are, it is not for me.

dyor.


yasQ - 8 Nov'10 - 18:39 - 2821 of 2835 edit


Just look at the last line of my post above about ROK, dated the 20th August. That sums up what happened today.

When something appears great on paper but the management have failed to keep a check on matters, it is invariably time to cut and run.

[vod999] 08/11/2010 19:08

guess we saw the whites in the eyes this morning lol easymoney

[peter27] 08/11/2010 19:06

On the BBC website above the administrator Mr Jervis said that there was no single factor responsible for Rok's problems.

"The accounting problems uncovered at the beginning of the year and the profit warning led to a dropping off of orders," he said, "and the constraints on public sector spending have also had an impact," he told BBC News.

So the directors must have known and it wasn't a single catastrophic incident - they do appear to have been misleading us.

[bookiebuster] 08/11/2010 18:48

Garvis Snook has been rinsing the coffers here for a long time. I notice a few posters above were impressed with recent director buys but let's put these in perspective.

From what I can make out between 2001 and 2010 Mr Snook's director buys other than those exercised each month under the employee incentive scheme, were as follows:
200,000 @£0.19 = £38,000
250,000 @£0.20 = £50,000
50,000 @£0.222 = £11,000
50,000 @£0.185 = £9,000
For a total of £108,000

Mr Snook's pay package over the last 9 years not including this year was as follows:
Basic salary: £2,843,500
Annual bonus: £1,178,000
Pension/other
contributions: £479,000
For a total of £4,500,500

Add on the following and you get an even tidier sum

On 21 Sept 2004 Garvis Snook sold 334,041 shares at 425p under the Incentive Plan

On 13 Nov 2006 Garvis Snook sold 75,000 shares at 790p (£592,500) and transferred 45,000 shares (worth £355,500) as part of a divorce settlement

On 3 Oct 2007 Garvis Snook exercised options over 671,320 ordinary shares under the Incentive Plan and sold 600,000 shares at 186.25p per share

[waterloo01] 08/11/2010 17:59

Might we see something?

"As for Rok's future, he is optimistic. "We've had loads of interest today both from large companies looking at a wholesale purchase of the company and smaller businesses interested in individual sites."

The administrator aims to have a sale sorted within days rather than weeks".

[grahamburn] 08/11/2010 17:38

The level of debate here is abysmally low. As Dennis Russell has just pointed out, the directors have individual very large shareholdings and most of them have within the past month shelled out £40/£50k each. Lost nothing? Don't think so.

Even a fool wouldn't pay out those sorts of sums if they were aware of any potential administration.

Now, if posters want to discuss "why they didn't know", that's a different and perfectly legitimate discussion, but to pour vitriol and mis-information as has been done in the past few minutes is, IMHO, somewhat wide of the mark - and shows a distinct lack of knowledge of how business and the stockmarket works.

[dennis russell] 08/11/2010 17:21

From a recent announcement, Mr. Snook has almost 2M shares in a combination of direct ownership and vested options. I doubt if he is any happier than the rest of us.

[envirovision] 08/11/2010 17:05

The fact the banks were so very publicly and openly not prepared to lend to them anymore as they presently did not believe the accounts should have told any remaining shareholders to get the hell out.

I find it hard to understand how there was anyone left holding them.

[yorgi] 08/11/2010 17:00

My thoughts are with you guys....Yes stuffed by the company directors. I nearly bought in a few weeks ago hardly any indication that had these sort of troubles.

It stinks and as usual the private sharholder is stuffed

[bookiebuster] 08/11/2010 17:00

The share price movement over the last 18 months when the FTSE was steaming ahead spelled out one word.... Timber

Today the tree was felled.

If you were standing underneath maybe you didn't hear the shout but it was said loudly

[brechin] 08/11/2010 15:46

The former FD who was "exonerated" last week must take an enormous amount of the blame. He was responsible for the financial controls of the company which have clearly completely failed. Why on earth was he paid off only a few days ago while investors like myself have lost £10,000 while believing that the problems had been identified and sorted out? We were completely misled by recent Board statements and this must border on a major criminal offence.

[careful] 08/11/2010 15:38

i hope this does not turn out to be one of those 'pre pack' administrations.
the shareholders and unsecured creditors get stuffed, but the directors make a fortune and carry on with their own jobs.

total corruption, the weak argument for is that it preserves jobs.
time will tell.

[snaffleclamp] 08/11/2010 15:33

igoe -smoke and mirrors- comes to mind

[kiwihope] 08/11/2010 15:33

Just at a guess and looking at balance sheet, I would say one of their trade debtors has defaulted and left them with a material change to the outlook. Their balance sheet was always stretched, being worth basically the difference between two big numbers - trade debtors and trade creditors.

It's important to note that the directors have chosen to put the company into administration; the banks don't appear to have instigated this. The most likely cause is insolvency, being unable to pay debts as they fall due. The fact this has happened so suddenly suggests one significant event has occurred (and as I say, probably a debtor going bust or something - they were owed £180M at the last interims I think).

Still, quite a shock. I had thought they may be starting to climb out of the hole they were in.

[igoe104] 08/11/2010 15:30

I wouldnt be surprised if the directors purshased the shares to cover their own ass, surely they must off known.

[moneysage] 08/11/2010 15:30

just goes to show for every Rockhopper there is a Rok


pays your money and takes your choice.


too much meddling by governments in markets to ascertain real value anywhere!

[snaffleclamp] 08/11/2010 15:25

PwC said it is looking for a buyer for the self-styled "nation's local builder" after the Exeter-based firm fell into difficulties in meeting its "financial obligations".

Mike Jervis, joint administrator and partner at PwC, said: "Employees will naturally be concerned about their position, but they will continue to be paid if they attend work and perform their duties as normal."
...................................................................................................................

Well I believe Wellingborough homes sent them packing this morning - so no work to carry on there i'm afraid. Very unhappy

[anupama] 08/11/2010 14:25

Disastrous news. The directors ought to have known the real state of the company some time ago however it would seem from their recent statements (share purchases and contracts)that they didn't or chose to cover it up.

The directors will need to do some serious explaining here. Really feels like we've been taken for a ride.

Tough action is needed to stop this kind of incompetence or dishonesty (where proved). Investors need confidence to invest in these type of companies.