The UK’s largest quoted architect revealed its plans last week in a briefing to analysts obtained by Building.
It is understood that the tenfold expansion will be in Aukett’s overseas operations, but managing director Andrew Lett would only say: “This is not a figure we are putting around for public consumption.” One analyst said: “They were not revealing a grand strategy to put them on the acquisition path to this pot of gold, but they were very ambitious. They said they would keep acquisitions to architectural and associated services such as space planning, facilities management and structural services. But they rule out buying any cost consultancies or quantity surveyors.” He added: “I didn’t take it too seriously – every company would like to grow tenfold.” Aukett’s market capitalisation has already risen dramatically. It now stands at £9.4m, suggesting that the presentation was put together a few months ago.
The company more than doubled its pre-tax profit to £614 000 in the six months to 31 March, compared with the same period last year. Lett said he expected further growth in 1999. “Our strategy is to develop our influence in Europe and increase our sector coverage,” he said. “This will help spread risks and give us a resilient business capable of riding any downturns.” Aukett has eliminated £557 000 of debt since last September and has £483 000 in the bank. Earnings per share have hit 0.66p, a rise of 83% on the same period last year. Broker Williams de Broe predicts that full-year pre-tax profit will double from £623 000 to £1.25m.
Aukett carried out £6.3m of work in the six months to 31 March, compared with £3.7m for the same period in 1998 – a 69% increase. Growth was strongest in the UK.
Lett said: “We don’t see any downturn in the UK, looking at our business overall. There have been lots of predictions about a UK recession, but, as you can see, they haven’t affected our results.” Work outside the UK totalled £1.31m, compared with £576 000 for the half year to 31 March 1998. The group’s overseas joint ventures and associates increased their share of group operating profit from 17% to 30%. Group operating profit was up 91% on the same period in 1998 at £627 000.
I like the way they have set about Europe by going for joint ventures with indigenous practices
City Analyst
Aukett acquired a practice in Prague in October and a stake in a Madrid-based joint venture in December.
It already has offices in Berlin, Brussels, Dublin, Milan and Paris.
Lett said the Prague operation had performed very satisfactorily, but added that the results from Madrid were below expectations. However, he emphasised that Spain was an important part of the group’s European expansion strategy and said prospects were good.
One analyst said: “I like the way they have set about Europe by going for joint ventures and hand-in-glove agreements with indigenous practices. Other building design companies tend to do one big project in Europe and pull out because the locals have a strong foothold.
