How much more bad news can the company take?
Two construction analysts reacted in an identical manner this morning when asked what they thought of the latest update from Rok; they guffawed down the phone.
The artfully-branded “nation’s local builder” informed the stock market that after suspending finance director Ashley Martin in August after financial failings in its plumbing arm, it had exonerated him and revoked his suspension. Unsurprisingly the wronged man then immediately resigned to be replaced by the top numbers man at Scott Wilson.
It follows a U-turn by Rok last month over the appointment of former Amey financial director David Miller as Martin’s replacement after an analyst revolt. Miller was the man who left Amey in 2002 after a switch of accounting standards resulted in an £18m loss at the company. He memorably called international accounting standards “a little cup of sick” in an ensuing Telegraph interview.
Farcical would be one way to describe what has happened in recent months at Rok. The question is whether Garvis Snook, the chief executive described by some of his peers as “Teflon Garvis”, can talk his way out of this one. This particular sorry saga follows several profit warnings over the last 12 months.
By all accounts Martin’s exit was a painful affair. Not least on a personal level because he was also in the throes of a divorce. Talking to Snook last week, it was clear the split with Martin had taken its toll. His normally smooth, calm and unfaltering delivery cracked slightly when asked about Martin’s exit and he let out a long sigh.
Martin himself was reportedly “absolutely furious” after being made what he felt was a scapegoat. It is understood he sought legal advice and this morning’s exoneration would presumably have been coupled with a tidy payout.
This afternoon he wasn’t commenting on any financial settlement but described the last eight weeks as “hell”.
There is no evidence of any deeper financial malaise but an erratic string of bad-news updates will do nothing for investor jitters in the current market.
As Snook himself would be the first to point out, the share price showed a double-digit rise after this morning’s announcement, presumably because the review that cleared Martin had unearthed no more bad news.
It’s a sign that some in the Square Mile are prepared to give the company the benefit of the doubt this time. But Snook must be media-savvy enough to know he personally couldn’t afford any sort of repeat of what has happened in recent months.
He could kiss goodbye to any more Sunday Times interviews with him pictured in biker leathers astride his Harley Davidson.
He has always been evangelical about the Rok model of grouping local builders under one branded umbrella. One analyst this morning likened him to TV preacher Billy Graham.
What would he say to being likened to a TV evangelist? He would chuckle before setting out a hugely plausible case as to why the non-believers were wrong.