TIDMAUK
RNS Number : 4366D
Aukett Swanke Group PLC
29 January 2015
Aukett Swanke Group Plc
Announcement of final audited results
for the year ended 30 September 2014
Aukett Swanke Group Plc (the "Group"), the international group
of architects and interior designers, announces its final audited
results for the year ended 30 September 2014.
Highlights
-- Revenue up 106% to GBP17,326,000 (2013: GBP8,406,000)
-- Profit before tax up 155% to GBP1,400,000 (2013: GBP550,000)
-- Earnings per share up to 0.65p (2013: 0.26p)
-- Net assets increased to GBP5,053,000 from GBP3,029,000
-- Net funds of GBP1,778,000 (2013: GBP1,080,000)
-- Return to two annual dividends
Nicholas Thompson, Chief Executive Officer of Aukett Swanke
commented:
"The 2014 results have shown the promise that the new 'Aukett
Swanke' brand can create. We see 2015 as a year of opportunity to
continue on our growth strategy".
Enquiries
Aukett Swanke - 020 7843 3000
Nicholas Thompson, Chief Executive Officer
Beverley Wright, Group Finance Director
finnCap - 020 7220 0500
Corporate Finance: Julian Blunt / James Thompson
Corporate Broking: Stephen Norcross
Hermes Financial PR
Trevor Phillips - 07889 153628
Chris Steele - 07979 604687
Chairman's statement
It is a pleasure to report on a highly successful year for your
Company. During the year ended 30 September 2014 profit before tax
increased by 155% to GBP1.4m (2013: GBP550k) whilst revenue more
than doubled to GBP17.3m (2013: GBP8.4m). Earnings per share
continue to grow and now stand at 0.65 pence per share (2013: 0.26
pence per share).
In accordance with the Company's previously stated policy, the
Company intends to resume a regular pattern of dividend payments.
Two payments were made during the year, one of which was in respect
of the prior year. A further dividend payment was also made after
the year end relating to the year ending September 2014.
Our net funds have continued to increase and stood at GBP1.8m by
the year end. This was achieved notwithstanding that our
acquisition of Swanke Hayden Connell Europe Limited ('SHCE') was,
in part, cash funded. At the time of writing the Group is free of
debt.
As noted above, in December 2013 we acquired SHCE. Much of 2014
involved integrating SHCE and consolidating our enlarged Group's
operations. We anticipate the full benefit of this will begin to be
enjoyed in 2015.
The year also saw some changes to the Board. Beverley Wright has
joined us as the new Group Financial Director bringing with her
experience and expertise from a successful career with major
companies in the construction arena including Mowlem Plc and CH2M
Hill. John Bullough has joined as a Non Executive Director and
chairs the Remuneration Committee. He brings with him a vast
knowledge of the commercial property sector through his senior
level management experience within Grosvenor and ALDAR in the
Middle East.
The only negative aspect to report upon has been the unfolding
events in Russia which have tempered this year's performance.
I am confident that 2015 will again reflect a further overall
improvement on current year performance with respect to revenues,
profits, cash and dividends.
It is gratifying to report results ahead of our original
forecasts, in no small measure due to the excellence of our
offering to our clients and the enthusiasm, loyalty and diligence
of our staff. I would like to convey my thanks to all our staff for
their hard work during the year in achieving these results which,
yet again, provide a stronger platform for the year ahead.
I am confident about your Company's future.
Anthony Simmonds
Non Executive Chairman
28 January 2015
Extracts from strategic and directors' reports
Overview
Revenues in the year increased to GBP17.3m (2013: GBP8.4m), with
revenue less sub consultants at GBP14.7m (2013: GBP7.1m). Profit
before tax by comparison rose 155% to GBP1.4m (2013: GBP550k). This
result provides 3.6 times dividend cover.
Net funds continued to climb at GBP1.8m (2013: GBP1.1m) leaving
the Group virtually debt free. Post year end the small residual
outstanding bank loan was repaid.
The result would have been significantly better had our pre
acquisition Russian operation not continued to under perform, and
the former SHCE business not suffered from a number of project
delays in both Russia and the UK in the final quarter.
Architectural and interior design success is highlighted with
three awards, two for 62 Buckingham Gate and one for M&S
Cheshire Oaks.
The acquisition of SHCE and organic growth in the year has
substantially bolstered our rankings. In the 2015 World
Architecture 100 listings, published by Building Design, Aukett
Swanke Group Plc ('Aukett Swanke') is ranked 53(rd) (2014: 71(st)
), making us the 5(th) (2014: 8(th) ) largest UK practice by
international measurement.
United Kingdom
The UK has had an excellent year with revenue less sub
consultant costs rising 110% to GBP12.8m (2013: GBP6.1m). SHCE
contributed 58% of this increase with organic growth accounting for
42%. We gained an additional 42 technical staff with SHCE and added
33 more through direct recruitment in a tightening labour market.
The need to recruit in advance of project conversion through the
various work stages along with an unexpected delay in two projects
in the fourth quarter, restricted the profit rise, however we are
able to report a profit rise of 90% at GBP1.8m (2013: GBP961k).
Nine major projects were either in the site phase or moved into
construction during the year including Verde SW1 in Victoria for
Tishman Speyer, Imperial West Phase 2 for Imperial College in West
London, 10 Trinity Square in the City, two stores for Fenwick, the
Adelphi building for Blackstone, Forbury Place in Reading for
M&G, 125 Wood Street for Orchard Street Investment Management
and Uxbridge Business Park for Goodman.
Veretec, our Executive architecture division, had its best year
with revenue less sub consultant costs of over GBP3.3m for the
first time. Five schemes represented approximately 70% of its
revenue including clients such as Sir Robert McAlpine, McLaren
Construction, Candy & Candy, and the Qatari Foundation. Our
interior design offer was substantially augmented by the addition
of SHCE's client base including projects with Ascot Underwriting,
BNP Paribas, European Medicines Agency and Symantec.
Significantly, the UK out of town portfolio has returned through
our existing client base with schemes in Birmingham, Bristol,
Cambourne, Cambridge, Farnham, Harwell near Oxford, Hemel Hempstead
and Sheffield.
The UK studio approaches 2015 with renewed optimism.
Russia
Despite a fillip from the addition of a new office and our
teams' joint efforts post acquisition, the final result for the
year is a loss of GBP350k.
We expected to avoid any losses in the second half in the pre
acquisition operation and this was achieved with a small profit of
GBP19k, reducing its annual loss to GBP304k (2013: GBP270k).
Unfortunately, the SHCE branch suffered a project delay, in tandem
with the UK operation in the final quarter, which reversed the
first half profit and returned a loss of GBP46k.
The Board is mindful of this important market and the time taken
to establish our credentials in it. However, such losses are
unsustainable and we have given ourselves a short period in which
to rectify the situation or consider alternative solutions. This
process is further exacerbated by the recent troubles in the
Russian financial markets brought about by Russian foreign policy
and the collapse in the oil price. In the short term management's
strategy is to concentrate on local Russian commissions where there
is limited exposure to third party sub consultant costs and hard
currency liabilities.
Given the continuing losses the remaining goodwill balance of
GBP125,000 relating to the pre acquisition Russian operation, ZAO
Aukett Fitzroy Vostok, has been impaired.
Turkey
This is a new operation to the Aukett Swanke Group and has
performed well in the period. During the year we moved to slightly
larger premises in order to provide a base for continued growth.
With a profit of GBP90k on revenues of GBP687k this has been the
best performer from the SHCE portfolio of offices. The office
primarily works for local Turkish clients including: Tahincioglu
Real Estate A.S. NIDA Insaat, FIBA Group, Cengiz Holding A.S, ER
Yaterim Turizm Insaat A.S. and Vodafone. During the year the office
successfully completed the 42 storey Palladium commercial office
building in Istanbul. Our business plan assumes reasonable growth
in this market.
Middle East
Revenues have almost doubled in the year at GBP492k (2013:
GBP252k) enabling the operation to return a small profit of GBP14k
(2013: loss GBP132k). The key project won with Majid Al Futtaim at
the end of last year continued throughout the period to provide
much needed local stability.
During the year we have seen the number of enquiries rise as the
region returns to a more active market. However, critical mass
remains a challenge to achieving our growth strategy. A number of
independent potential solutions have now been identified, which we
are considering. This operation could easily double or treble its
size.
Berlin
A veritable jewel in the crown. For a fourth successive year
this operation has returned an improved performance based on its
leading position in the Berlin market. The studio is one of the few
"go to" practices for working drawing expertise. Pre tax profits
rose by 8.7% to GBP1.5m (2013: GBP1.3m) on revenue less sub
consultants up 5.6% at GBP4.3m (2013: GBP4.1m). Our net share (post
tax) amounted to GBP254k (2013: GBP234k)
Major projects during the year included assistance on the Berlin
Airport, Elbphilharmoine working drawings in Hamburg, KfW Bank
refurbishment works in Berlin, Siemens office in Forchheim,
Spindlershof refurbishment in Berlin, the shopping mall Gropius
Passagen for the developer mfi and the Kaiserstrand Hotel in
Bamsin.
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