AIM-listed architectural practice Aukett Fitzroy Robinson (AFR) has bought up fellow architectural big hitter Swanke Hayden Connell Europe (SHCE)
More from: AFR snaps up Swanke Hayden Connell
Earlier today the practice, which was ranked 66 in this year’s AJ100 rankings, snapped up the ‘entire issued share capital’ of SHCE to create a new 340-strong outfit which has been renamed Aukett Swanke.
The two companies will merge their London and Moscow studio to create a ‘significantly bigger’ company with an expected annual turnover of around £16million.
AFR paid £210,000 in cash and made a £1.37million share exchange for SHCE’s shares.
Although SHCE ‘has virtually no debt,’ the company made a pre-tax loss of £560,000 on revenue of £6.4million in the year to 31 December 2012.
However it has traded profitably during 2013 and the board of AFR ‘expects this to continue’ into 2014.
AFR’s chief executive Nicholas Thompson will remain in the top role, with SHCE’s chief executive David Hughes joining as deputy chairman and its principal interior design director Nick Pell becoming an executive director.
All UK based vendors who are employees of SHCE will remain employed within the enlarged Group.
Nicholas Thompson chief executive of Aukett Swanke
‘The first thing this [move] allows us to do is to become stronger in our existing markets. It has been very important to have a much stronger base, strengthening our UK offer. We now have 177 staff in this country UK. We also have offices in Moscow, Germany, the Czech Republic and Turkey and an emerging link in South America.
‘The deal has taken 18 months to complete [from when we were first introduced] and it has been about hearts and minds – effectively getting to know each other.
‘The most interesting thing was that even though AFR and Swanke Hayden Connell worked in similar geographic locations and similar markets we found we were very rarely competing for the same jobs. So this [tie-up] really has increased our market share.
‘As to the future our biggest push will be towards the east. We are already in Dubai where there are many unfinished projects or unrealised schemes which may need re-looking at.
‘And the Expo 2020 news is a major shot in the arm. An Expo really does mean building.’
‘In terms of emerging from recession we feel the new company is ahead of the curve. The old AFR started to recover about 18 months ago with the first wave of new enquiries. Now we are into the second wave of projects.
Two years ago we were working on virtually nothing outside London
‘Intriguingly we are seeing a lot of speculative office schemes outside of London, i.e. without pre-lets, from Birmingham southwards.
‘Two years ago we were working on virtually nothing outside London. But enquiries are now split 50:50 between London and the regions. That has been a big change and that has happened in the last three months.
‘This shows there is momentum in the market place and that there is light at the tunnel. However there is probably a year lag in the regions.’
Previous story (AJ 12.01.2012)
Year of two halves as AFR cuts losses
AIM-listed architectural practice Aukett Fitzroy Robinson (AFR) has halved its annual losses and posted impressive figures for the last six months of its financial year to September 2011
According to the company’s trading figures released today, AFR increased its turnover from £7.5 million to £9.1 million and reduced its losses from £784,000 in 2010 to £394,000 last year.
A large proportion of the latest loss was the result of the closure of its office in Poland. From April to September the AJ100 big hitter actually made a profit of £367,000.
The practice claims to have a forward order book worth £80 million and is continuing to bag a wealth of commercial work in London and has recently won planning for the revamp of 30 Berkeley Square for client Prupim and has just submitted plans for the £17 million overhaul of 125 Wood Street for Orchard Street Investments.
The company is also working on a raft of hotel schemes such as the refurbishment of the London Metropole Hilton hotel on the Edgware Road and a number in Russia – mainly outside Moscow – including a 3,600 room hotel for the Sochi 2014 winter Olympics(pictured).
Luke Schuberth of AFR: ‘It’s all about direction and it certainly feels positive.
‘Russia has changed from 2010 and is now very strong. Last year we decided to hold our ground and keep the office’s size.
‘Now we have big schemes in the country, such as the Sochi 2014 Olympic hotels.’
‘London is our other big success area. Frankfurt and Berlin have also done well while others areas have struggled. We closed the Poland office in the second half of last year as its workload had run down to nothing.
‘The Middle East is flat-lining. Though Dubai was in all sorts of trouble two years ago now we suddenly hear we have thee enquiries, including one for a major refurbishment in the Emirate.’
He added: ‘We are not really looking at acquisitions. But it will be a year of consolidation and we are flexible and quick to react to those opportunities.
‘I’m feeling quite optimistic but I understand the wider sentiment that it will be another tough year for the profession.’
Tim Hodgson, chairman of Aukett Fitzroy Robinson commented:
‘Our need to maintain a skilled and committed workforce at a level that would enable us to win projects in a contracted market resulted in a first half loss.
‘This decision was vindicated by new contracts that have contributed to our return to profitability in the second half of the year. We maintained a solid foundation throughout a difficult trading period and, as and when volumes recover, the quality of our business should enable us to restore earnings to previous levels.’