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Aukett Swanke blames Brexit jitters for profits dip

Aukett Swanke studio
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AIM-listed Aukett Swanke has become the latest practice to blame the uncertainty surrounding the EU referendum for poor trading figures

The AJ100 firm’s pre-tax profits for the UK part of its operations fell to £498,000 for the six months to 31 March 2016, down from £927,000 for the same six month period last year.

The drop in profits has resulted in the firm’s interim dividend falling to 0.07 pence per share, down from 0.11 pence previously.

The disclosure was made in the company’s interim results, released earlier this week. In addition to falling profits in the UK, revenues are down. ’Revenue at £6.7 million (2015: £7.5 million) is 11 per cent down on the prior year but profits have fallen by more to £498,000 (2015: £927,000),’ states the announcement.

’The results reflect the early impact of the EU referendum in June’

’[The results] reflect the early impact of the EU referendum in June 2016 which is typified by two negative characteristics: firstly apprehension at committing to significant post planning services… and a more specific anomaly with Heads of (leasing) Terms including “Brexit” clauses.’

Shares in the company fell after the announcement, from a closing price of 6.02 pence on Monday to 5.17 pence today (9 June). The fault rests with a widespread indecision plaguing the economy, with uncertainty over Britain’s future relationship with Europe, according to the architectural practice.

Costs, the company claimed, would need to be cut ’to reflect the current slowdown which may be impacted more by the referendum than previously thought’. Its interim results add that the coming months will be approached ’with a certain degree of caution as the post planning order book in the UK may take longer to unwind following the EU referendum than expected’.

Commenting on the latest figures, Nicholas Thompson, the firm’s chief executive, said: ’The EU Referendum in the UK has clearly impacted these results and is likely to do so for the full financial year.’

Yet he remained confident for the future, adding: ’Encouragingly the group has benefitted from its recent investment in the UAE. In addition we anticipate improved performance in both Germany and Turkey in the second half.’

Aukett Swanke is the latest in a series of architectural firms suffering a decline in fortunes as a result of the Brexit debate. Recent weeks have seen high profile practices such as Stanton Williams, Keppie, and Farrells making job cuts partially as a result of the negative impact of the EU referendum over Britain’s future in Europe.

Commenting on the trend, David Green, director of Belsize Architects and former head of the European division of the Bank of England, told the AJ: ’Not just architects but a whole range of businesses are being affected by the uncertainty, caused by the wider prospects for investment.’

He warned that even if Britain votes to remain in Europe ’it may be that business won’t be as usual’. Green added: ‘Investors will be looking at the UK in a different light - it’s a country that isn’t sure whether it wants to be at the heart of Europe.’

On Wednesday night (8 June) Aukett Swanke offshoot Veretec was named AJ100 Executive Architect of the Year. Aukett Swanke ranked in joint 19th place in this year’s AJ100.

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