Building group Rok has said strong growth in its refurbishment and response maintenance divisions are expected to provide resilient revenues despite the continuing slowdown in commercial property.
The company, which dubs itself 'Britain's Local Builder', reported a 42 per cent rise in full-year adjusted pretax profits of £31.7 million.
The group has been reducing its exposure to commercial property development, which accounted for 12 per cent of profits in 2007, in order to focus on refurbishing schools, hospitals and social housing, and providing emergency repairs for insurers is driving growth.
The company employs 362 people in the West Midlands and said the contribution of the region had been key to the group's success.
Keith Watson, Rok’s managing director for Central England, said: "Since acquiring Kingfisher in 2006, Rok’s operations in the Birmingham area have gone from strength to strength.
"We have begun to find our place at the forefront of key markets, such as social housing, with housing improvement frameworks for organisations such as those we won in 2007 for Midland Heart and the Wrekin Housing Trust.
"Through the hard work of the Birmingham Central team and those at our new Stafford office, we hope this region will continue to build its role in Rok achieving more record-breaking results in future years."
"All of our general building and construction activities are resilient," said Rok chief executive Garvis Snook, adding that 80 per cent of the company's 2008 revenues were either secure or highly visible.
Mr Snook said the company had a record confirmed order book of £610 million at year-end, up 17 per cent on the prior year, and long-term framework agreements totalling £1.8 billion.
Blended margins in the core building and maintenance businesses were up to 3.5 per cent, from 3.1 per cent in 2006, and on track to achieve the five per cent long-term target, Mr Snook said.
Margins in refurbishment were up 0.4 percentage points at 5.9 per cent, while in response maintenance, which provides urgent repair for insurers such as Zurich
Insurance, Lloyds TSB, and RSA, and for companies including BAA, margins were up 1.8 percentage points at 6.1 per cent.
Revenues in Rok's new building activities were boosted by the acquisitions of Tulloch in 2006 and SOL in 2007, and the division had a margin of 1.9 per cent, which Mr Snook said is "right at the upper end" of the industry.
In reaction, Panmure Gordon said the margin improvement in building and maintenance plus continued expansion was the key driver for the company.
"With a strong repair and maintenance end-market exposure and fragmented markets, we continue to see good scope for share price out-performance," it said in a note.
