AIM-listed Aukett Swanke Group (ASG) has snapped up its second practice in less than a year - this time a 106-strong practice based in the United Arab Emirates
Following its capture of John R Harris & Partners last June, the AJ120 outfit has today (11 February) acquired the entire share capital of Shankland Cox Limited (SCL).
Aukett Swanke will eventually shell out £3 million for the 54-year-old company which set up a base in the United Arab Emirates in 1986 and has designed buildings such as the Dubai Campus of the Sheikh Zayed University.
The deal expands Aukett Swanke’s workforce in the Gulf to 146 and swells its total group staff numbers to 483. According to the practice, the purchase will ’provide the opportunity for some limited overhead cost savings as [it] integrates Shankland Cox’ into the wider group.
A spokesman for Aukett Swanke said the move was part of a drive for more work in the Middle East and helped create a ’critical mass to successfully bid for some of the larger and more prestigious projects’ in the area.
Commenting on the acquisition, Aukett Swanke’s chief executive Nicholas Thompson said: ’With this acquisition we are taking a further step forward in implementing the development strategy which we have outlined in recent reports. We have been seeking to augment our Middle East offering for some time.
’The addition of Shankland Cox to our operation is therefore significant. With this acquisition we can start to crystallise one of our main objectives of creating a more evenly sized balance between our geographical operations which in turn should provide stronger resilience to our business model as a whole.’
He added: ’While we may add to our design based capabilities in the future, management focus is now on broadening our international reach and seeking a more diversified portfolio of associated revenue streams.’
The news comes just a week after Aukett Swanke announced a 33.6 per cent rise in pre tax profits for the year ended 30 September 2015.
A financial statement released by the group said that profits before tax were up from £1.4 million to £1.9 million over the previous year.
Revenues were up 8.1 per cent from £17.3 million to £18.7 million, with the company announcing a final dividend payment of 0.11p.
Q&A with Nicholas Thompson, chief executive of Aukett Swanke
Given your statement, will future growth now be organic?
All operations are expected to grow. However, this is always within the constraints of market activity. Architecture is only scale-able through staff levels therefore an acquisition option will always endure
What other kinds of revenue streams are you looking at?
Those that have a less volatile and cyclical profile
Does the fall in the global oil price worry you or impact on any of your future plans?
The fall in the price is not in itself a problem – it is more about the direction and timing of market decisionmaking that we have to second guess. That means we have to consider our investments in the longer term and accept that short term imperfections will always be present
Are there any areas where you are pulling out of?
Russia remains an issue as it is in recession, but we are very much hands-on in management terms to the issue.