Nicholas Thompson, chief executive of Aukett Swanke, on rapid expansion, opportunities in the Middle East, and why Greece leaving the EU might be good for business
As a practice listed on AIM, the London Stock Exchange sub-market, do you find yourself under more or less scrutiny than other firms of your size and does the market help or hinder your operations?
Scrutiny only really occurs twice a year when we announce our results, which are compared to market forecasts of performance, (versus once a year in the private sector which is not benchmarked). Additionally, our financial position is far more transparent (and comforting) to clients. The free PR surrounding this far outweighs any regulatory requirement.
Your staff numbers leapt by more than 30 to nearly 220 in the year to September 2014. How have you managed to handle the transition of the business, especially the growth in staff?
The bulk of the staff growth occurred in the UK – specifically in London. This was around 45 per cent organic and 55 per cent by the merger of Aukett Fitzroy Robinson and Swanke Hayden Connell.
We enlarged the key management team with members from both parties to the merger and co-located staff within nine months. Our properties had the inherent benefit of being able to accommodate growth in staff numbers. There is an ongoing staff harmonisation programme, which is due for completion this summer.
You are re-investing your cash reserves in more acquisitions, do you expect other practices to start looking at mergers?
Others are already doing this, for example Pringle Brandon and, more recently, Pascall & Watson. The gestation period in people-based mergers is considerably longer than in other markets, where the only metric is money – it is much more about hearts and minds and strategy in our industry.
What opportunities does the Middle East region hold for Aukett Swanke?
Arguably the Gulf region is geographically better placed than the UK or any other European location. The region is a primary transport hub and exhibits a continuous programme of investment in its infrastructure and construction market. It has managed the recent financial crisis well and is growing in GDP again.
Do you have any fears over the effect that a Greek or even a UK exit from the EU could have on your business plans?Interestingly a ‘Grexit’ may be good for the UK and its relationship with the EU. Greece represents a tenuous financial link in the EU equation and there are, clearly visible, deep-seated issues that seem unresolvable by the Greek stance.
Our present arrangements in the EU are all via partnerships, so we already have a fall-back strategy in place should the UK Referendum decide for an exit.
Arguably the Gulf region is geographically better placed than the UK or Europe
What do you think that would mean for architects?
An EU exit by the UK is unlikely – it’s a little like the prospect of Scotland leaving the Union. However, if the UK did leave the EU, then in the short term it would impact the architectural industry through an immediate slowdown of inward capital investment, so the high-end residential market would suffer first.
Is there currently enough government support for UK-based practices to expand their operations internationally? What more could be done?
UKTI provides a good and economic service to professional firms. They also champion UK expertise overseas. We have used their services twice so far – in completely new markets.
Our industry is too small in terms of value of overseas fee income to justify specific governmental support; and the service provision is disproportionately transactional and too uncertain to provide the long-term visibility needed for permanent support.