SMC to become UK’s second quoted architect

McColl has appointed broker Noble & Co to float the business early next month in order to generate capital to buy other practices with the aim of filling sector and geographical gaps. McColl wants to reposition the firm to to compete for bigger contracts with higher margins.

SMC will be one of just two quoted architects in the UK, alongside Aukett, which has a share price of about 3p.

SMC is in talks with three firms that it has identified as takeover targets, and McColl said this week that he expected to announce the acquisition of two companies at initial public offering stage.

The company has identified the healthcare sector and the government’s £60bn Building Schools for the Future programme as growth areas for the company, and McColl said he wanted to increase exposure in the Midlands, Scotland and Ireland.

The management team has developed a five-year business plan to increase turnover, which was £8.1m in 2004, at a compound growth rate of about 60%.

“We have built up a critical mass now and have the capability to compete for major projects with higher margins,” said McColl.

The flotation will see McColl’s personal stake in the company reduce from 44% to 30%. Sir Rodney Walker, the chairman, will take a 1.2% stake and, subject to approval from the Inland Revenue, all 140 members of staff will be given a stake in the company.

The company is still negotiating terms to raise £6m from its potential financial backers, and it has not yet been decided how many shares will be issued, although the plan is to float the company with an initial market capitalisation of £25m.

SMC’s current projects are mainly within the private sector and include the Royal Windsor Racecourse, for which a planning application has been submitted.

McColl sold his first business, McColl Group, to WPP in 1987. He was retained as chairman and chief executive but left in 1993 when WPP focused on its advertising business after the property crash.