SMC in talks with two signature architects

Stewart McColl, SMC's chief executive, said he had been approached by both practices, which he declined to name, and that talks were continuing.

McColl said: "We had approached both practices before we bought Alsop, but I don't think they believed at that time that I was as interested in design quality as I was in profit. The deal with Alsop changed that,"

He added that he was confident that at least one of the deals would go ahead.

McColl has made no secret of the fact that he is eager to expand the business through acquisitions. It has bought three businesses so far this year, and six since it floated on the alternative investment market last June.

The takeover of Alsop Design established the company's credentials with the architectural community. Up until then it had been considered to be a more commercial practice.

Since the deal, McColl has introduced a new management structure into Alsop, which had struggled financially since 2004.

He said: "The practice had problems in the past, so what we have now is what we like to call a ‘loose tight' management structure. That means that when it needs to be tight, it is tight."

The firms didn’t believe I was as interested in quality as profit

Stewart McColl

SMC Group management assists the practice on an "ad-hoc basis" to ensure that it is profitable while retaining its design creativity. Will Alsop is still responsible for the design side of the business.

McColl said he was also keen to plug the geographical gaps in SMC to put the company in a better position to secure government work. At present the firm has no presence in Scotland, Ireland or Wales,SMC is in a consortium with Land Securities Trillium and the Mill Group that has made it down to the last three on a £250m Building Schools for the Future project in Leeds, West Yorkshire.

"Eighty per cent of government contracts go to architects within 65 miles of the project site. That's why we want good geographic coverage," he said.

On top of that, SMC is interested in buying companies in interior, graphic and product design. McColl said these were "sectors in which there are some highly creative and profitable companies".

SMC is looking at what McColl described as a "very large number of businesses". He said: "It would be a very odd day if we weren't having at least one discussion about a major acquisition."

At the end of last week, SMC demonstrated that the acquisitions to date had paid off when it revealed that its pre-tax profit had risen 280% to £2.9m in the year to 31 December 2005. Turnover rose 159% to £13.5m.