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SMC COMES DOWN TO EARTH

AGENDA

As all experienced corporate types will tell you given half a chance, there are always ups and downs in business.

For Stewart McColl (pictured), last week must have been a significant down.

Less than two weeks ago McColl was riding high as the practical and spiritual leader of the SMC Group - a company that, since 2004, has risen from obscurity to become the UK's biggest employer of architects.

But in a sudden twist last week, McColl was sidelined in what some are describing as a boardroom coup. He was shunted from the role of chief executive, in which he had built his eponymous listed company, to deputy chairman. In his place, Rodney Walker, the externally appointed nonarchitect non-executive chairman, was catapulted into an executive role. It is understood that Walker will look at much of the business, including the way it forecasts profi ts.

But what will this mean for those who have in the past attempted to compete with the growing SMC colossus?

Most obviously, and most significantly, it looks certain that the firm's heavy focus on aggressive expansion will be temporarily put on the backburner. Talks with AJ100listed S&P over a possible takeover are presumably on hold, as must be the discussions with two other 'significant practices' on takeovers that had been trailed for some months (AJ 05.12.06).

Even McColl admits that this is likely to be the case.

Speaking to the AJ on the day that his change of role was announced to the City, McColl said: 'There has to be a period of consolidation and a review of everything before we move forward.'

The goings-on at SMC will certainly be of interest across the architectural sector.

Few practices will have failed to make note of the firm's rapid rate of expansion. At the end of last year, a source at S&P said on a potential SMC deal: 'Everyone knows that this kind of thing is on the cards for lots of practices. It feels like it's inevitable.'

There can be little doubt, however, that recent developments, and McColl's role change in particular, will bring into sharp focus the insecurity of cutting a deal with a listed company. Such firms may be cash rich, but they also bring with them a whole host of unpredictable investors in the City.

It is, however, far too soon to rule McColl out altogether.

One senior partner at a practice recently taken over by SMC still insists that confidence is retained.

'Don't forget who we're talking about, ' he said. 'We're talking about Stewart McColl.

He is this company and he's going nowhere.'

McColl's dream, it would seem, is certainly not dead, but we may never again see the rate of growth experienced in the last three years. It's all been a bit of a rollercoaster.

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