Rok announced a division of interim pre-tax profits and cut its dividend in which the troubled repair and maintenance group revealed accounting problems and suspended its finance director.

Rok warned about serious mismanagement of contracts in its plumbing heating and electrical (PHE) business causing shares in the group to tumble 50 %

Rok said that the accounting issues were behind it and it expected to improve margins during the second half.

Stephen Pettit, chairman, said that the board and management team were totally committed to rebuilding the strength of the business and delivering against expectations.

Pre-tax profit for the six months to June 30 was £3m, compared with £6m for the same period a year earlier. 

Sales for the six months of £308.1m were down from £364.5m while the interim dividend was cut from 0.75p to 0.5p on losses per share of 1.6p compared with earnings of 2½p last time.

The group said the lower revenues and profit margins were partly down to the severe winter weather in the UK and the effect it had on workers reaching building sites. It expected margins to improve in the second half of 2010.

Rok reduced its borrowings to end the period with net debt of £47.6m, against £57m at the same point a year ago.

Andy Brown, an analyst at Panmure Gordon, took a cautious stand on the company’s stock. He said that uncertainty is likely to hang over the share price for a while and the implied dividend yield is attractive, but on its own is not a reason to buy the shares.

Rok’s shares fell as low as 16p and rallied 9 per cent in early London trading.