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RIBA set to sell off commercial arm, sources claim

Old Post Office - RIBA Enterprises' HQ in Newcastle
  • 5 Comments

The RIBA has refused to deny it is considering selling off a stake in its commercial arm, RIBA Enterprises 

The knowledge management business, which owns brands such as NBS, is expected to be put on the market as early as July, with the RIBA expected to retain around 45 per cent ownership, sources close to the organisation have confirmed.

The future of RIBA Enterprises was considered by the RIBA Board in early 2017, when it set up a working group to explore investment options for the commercial arm.

Minutes from a RIBA Board meeting in February 2017, seen by the AJ, reveal that the group asked consultant KPMG to advise the working group on a number of different strategies. 

A brief to suppliers outlines how RIBA Enterprises generates an annual profit of £3.5 million a year but requires investment to ‘maintain its leadership position in the market’.

The brief stated: ‘The level of funding required within a short timescale is difficult to attain from trading income without impairing the level of gift aid remitted to the parent company [the RIBA].’

The eight investment options include RIBA Enterprises selling all its shares, selling a controlling share, entering into a joint venture or carrying on as it is – transferring 100 per cent of its profit by way of gift aid to the RIBA.

The institute’s cash reserves have dwindled over the last few years, with the departure of a number of senior staff in 2015 and 2016 – including former chief executive Harry Rich – costing the RIBA upwards of £750,000 in severance payments, interim wages and other recruitment fees.

The RIBA declined to comment. 

  • 5 Comments

Readers' comments (5)

  • This looks an unwise stopgap which will deprive the RIBA permanently of regular guaranteed income. KPMG is a company working for banks and big investors not an independent economic advisor. Think again!

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  • MacKenzie Architects

    all this bad advice seems to historically cost an awful lot of money .................

    Here's some free advice, keep it or sell it. Don't half-sell it, that's the worst of all worlds.
    If you are going to keep it, build the business. If you are going to sell it, the new buyers need complete freedom (actually don't the members of the RIBA own everything?)

    If you need some money, mortgage Portland Place or go to the membership for a loan. You have got 40,000 of us. £200 each is £8 million, that's a lot of investment. Only costing you £30K interest a month @ 4.5% and presumably you are going to make the money work hard for you. Out turnover is approx £45 million, that's manageable borrowing, and look at all the real estate we own around the country.London, Liverpool, Newcastle, and who knows where else. We have assets of £280 million apparently, and debts of under £15 million according to the Accounts (plus an extendable term loan of £20 million which we should probably pay off); we have no need to sell any performing assets. Indeed you could argue that the RIBA is sitting on its ass and should be doing a whole lot more for the profession and the construction industry than it does with all that financial muscle behind it.

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  • Mackenzie Architects' advice looks good to me.
    In support of my remark about KPMG, Richard Brooks, writes:-
    KPMG starred in the ultimate "nothing succeeds like failure" story. Although more than any other firm it had missed the devaluation of subprime mortgages that led to a world banking collapse, before long it was brought in by the European Central Bank for a " major role in the asset quality review process: of most of the banks that now needed to be "stress tested".
    See his book "Bean Counters". publishers Atlantic

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  • John Kellett

    Why listen to failures like KMPG? Mackenzie Architect’s advice is spot on. Retain 100% and invest. RIBA Enterprises is a vital part of the RIBA services to members. In terms of investment non-members could pay more and still get an inexpensive resource, at the moment it is member who get the raw deal.

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  • Why did the 'working group' decide that it needed outside advice, how did the RIBA choose KPMG, and how much were they paid? Is the 'working group' now in a situation where they feel that the only prudent (for them) move is to follow that advice?

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