Builder Rok sounds alarm and axes 750

House builder Rok today issued a devastating profits warning and axed 750 staff as the crisis in the housing market took a turn for the worse.

The group, which bills itself The Nation's Local Builder, said customers have shelved or cancelled more than £150 million of projects in the last month alone as funding dried up.

"It's like someone just switched off the lights and walked out," said chief executive Garvis Snook. "Contracting work has stopped dead, especially in the private sector."

Rok, which builds and maintains social and private homes, said revenues for the year will be £120 million lower than expected while profits will fall £12 million short of City forecasts.

Analysts were looking for profits of £33 million against last year's £31.7 million but downgraded their numbers toward £20 million after the update. The shares slid 37½p, or almost 51%, to 36¼p. Rok also announced plans to cut its 5000-strong workforce by 15%, or 750 jobs.

Snook blamed the financial-market turmoil for the dramatic deterioration in business, saying customers were "unable or unwilling to access cash" as a result of the banking crisis.

"The group is also turning away a significant amount of business where customers are unable to provide concrete evidence of their ability to pay," he said.

Redrow today said reservation levels in the last 18 weeks were down 45% on a year ago. "The market remains extremely fragile and the outlook for 2009 is very weak with mortgage availability still limited," the builder said, warning that prices continued to fall as demand wavered.