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I cannot see any path to growth. AS Architectural is a c.3m pa business. The fee earners are not major shareholders, so have little incentive to outperform. Veretec at c.3m pa are a drafting company, on low profit services. Remember - this lot made 3m in losses over the past 5 years - so have survived, I would imagine, offering low fees! If any of these fee earners had any 'drive', they would have left years ago. [The good ones did leave!] Why would you want to work in an architectural business when your hard earned profits are simply carved off to others - and, disturbingly, to Directors that have long left? Professional Businesses should not be listed. How do you attract the very best new recruits - you can't. The new crowd - Torpedo - sell projectors and gear for stage tech. It is like marrying a lama and hope it works! Each of the parts of the group will have better years, and sometime worse years - they will just bump along.
What do you think their path out of this decline should be? Unwinding the takeover would be expensive, perhaps a changing of the guard? Perhaps a coherent plan made loud and public that demonstrates a path to growth? Don't know, but feels like doing nothing is not an option
All-Time Low!! A Very, Very Small Architectural Business + A Very, Very Small Drafting Business + A Very, Very Small Stage Technology Business trying to suggest they are a 'Smart Building Company' ???.....with ZERO chance of cross selling anything.....EQUALS.....Less than a Penny!
The strategy for the combined four entities is to see whether the market believes a very small architectural practice will attract greater turnover joining with a stage technology company. It really is bonkers. The concept that a 15m turnover group, consisting of four small companies, that are not interconnected, can somehow create a larger turnover and profit being combined rather than stand alone seems bizarre. I do not see a client being remotely convinced that they would use one part of the business because they are linked to another part of the business. If Aukett Architectural/Veretec went ‘multi-disciplinary’ buying structural engineering and services engineering – I could see a reason for clients engaging more. A ‘one-stop shop’ like BDP. But this….!? Share price reflects my thoughts.
A bit of useful news, per RNS of today.
If the strategy is to acquire with shares and grow, then surely some effort first needs to be put in to building a degree of trading in the shares.
Hopefully the Board are working on a rebrand and updated website to reflect the present strategy and vision. I'm not sure if anyone looking today gives a hoot about the heritage and convoluted family tree which must be out of date by a long way. Rename and clear explanation of what this is all about would add 100% to share price.
AUKETT 'ARCHITECTURAL' IS A TINY ARCHITECTURAL BUSINESS @
Justfacts: 'management are building out a platform for growth here. Could get very interesting.'
A decent buy today.
Plenty more to come
Lots of exciting things happening here. Quietly confident that management are building out a platform for growth here. Could get very interesting.
Acquisition for a max of £560,000 delivering revenues of £2m plus - so looks a good multiple of close to 4 times purchase cost.
Yes, there is a small loss but Anders & Kern will fit in nicely with the companies strategic direction so economies of scale should and shared operational costs should see the company additive to the bottom line.
This looks an interesting company as it drives revenues up quickly and towards a profit...
Looking very undervalued at below £5m.
Turnover: 15m pa [after full merger]
Half Year Loss: 0.5m – yes another one!
Net Debt: 2.3m
Cash: Two Weeks Supply
The Group consists of AUK: Architecture [25%] 3.6m pa; Veretec: Back End Services [30%] 4.6m pa; Torpedo Meetings Environment [25%] 3.8m pa & Torpedo Stage Technology [20%] 2.8m pa + small dividends from German investments
AUK: Architecture
aukett s****e: architecture
aukett s****e
june 2023
turnover: 15m pa [after full merger]
half year loss: 0.5m – yes another one!
net debt: 2.3m
cash: two weeks supply
the group consists of aukett s****e: architecture [25%] 3.6m pa; veretec: back end services [30%] 4.6m pa; torpedo meetings environment [25%] 3.8m pa & torpedo stage technology [20%] 2.8m pa + small dividends from german investments
aukett s****e: architecture
aukett s****e
june 2023
turnover: 15m pa [after full merger]
half year loss: 0.5m – yes another one!
net debt: 2.3m - yikes
cash: two weeks supply
the group now consists of aukett s****e: architecture [25%] 3.6m pa; veretec: back end services [30%] 4.6m pa; torpedo meetings environment [25%] 3.8m pa & torpedo stage technology [20%] 2.8m pa + small dividends from german investments
aukett s****e: architecture
hi Semantic
I only venture on here periodically with an assessment of the latest AUK piece.
I have followed the company since the reverse takeover over by Fitzroy Robinson. Dug a bit deeper into the past to understand the dynamics.
I guess all I can say now is that 'Aukett has been Torpedoed'.
Worryingly, Nick Clark [Torpedo Factory Group] will become the CEO of an architectural practice – he has never designed a building in his life. Clark is a former director of a UK company that was placed into administration, with £225k shortfall to unsecured creditors.
Three major concerns I see:
1. How will the traditional architectural clients view this outcome? How do you appoint a practice to design your building when the CEO has zero skill at achieving that goal?
2. How do you attract and maintain the highest quality architectural design staff, when the CEO sells audio visual and stage technology ‘stuff’ for a living?
3. How do the traditional engineers, that AUK have worked with for decades, respond to Torpedo Factory Group venturing into their design space?
AUK Results continue to bump along poorly, with yet another loss posted – signing off a miserable exit for the previous CEO & Chairman. [ex Fitzroy Robinson]
History has shown that growth by acquisition has proved unsuccessful to this company for over 20 years. 1+1=1 for AUK.
Despite amalgamation of Aukett Associates, Fitzroy Robinson, S****e and others, the Group’s turnover is less than Fitzroy Robinson achieved 20 years ago, when Fitzroy Robinson flourished with significant profitability when under architectural leadership.
There seems next to zero alignment between architectural services and the new non-architectural skill set of audio visual and stage technology directors and shareholders.
In the end, the former directors of Fitzroy Robinson have exited the business, leaving what appears to be a potential rudderless ship. They have tried for 20 years to gain financial gain from selling the business to others, but failed to attract a buyer. In the end, they hope by some magic, this ‘marriage of convenience’ might give them a future exit, one that has alluded them for 20 years.
My concern is that the architectural side of the business could easily implode if a few key architectural fee earners that are non-shareholders decide ‘enough is enough’ and exit the Group. If this happens, all ‘Torpedo’ will get is a smaller amalgamated revenue outcome, with added costs, added PII liabilities, and a group of retired Fitzroy Robinson directors owning half of their original Torpedo business!
The Chairman has stated: “The younger generation of architects seem now less inclined or less able to take on the large financial commitments required to become owners”. It is not unsurprising that the younger generation of architects in this business would wish to remain, if their fee winning activities and hard work simply gets distributed to retired directors from the past.
Interesting RNS news earlier this morning.
Bodes well, I reckon.
Those decent size buys do keep on repeating, even if spasmodically so.
Not exactly a pattern but it's been carrying on that way for a while now.
bear17, you clearly know this company well, would you be interested in having a private conversation with others similarly placed?
Nicholas Thompson retires in the coming weeks as CEO. Raul Curiel standing down as Chairman.
An extremely poor performance by both.
After 20 years as CEO, Nicholas Thompson and Chairman Raul Curiel have left the company with significantly less revenue than the company had 20 years ago. Poor management decisions have littered the results in recent years, resulting in a substantial 3m worth of cumulative losses since 2017. Net Assets have crumbled over 60% in the last four years from 7.1m to 2.6m. Total Liabilities at 8.0m is supported by ever decreasing Current Assets at only 3.2m, plus a few desks and computers!
Thompson & Curiel has been selling fee earning assets this year, to provide cash to survive.
AUK are now a very small 6m turnover practice, with half of the small revenue coming from services completing the 'back end' on other architects designs.
The company could have taken the opportunity at this time for a complete renewal of the poorly performing Board, by appointing the younger fee earning architectural directors – however they have simply rejigged the deck chairs. The company retains a very high cost/non fee earning Board, that have added zero shareholder value in recent years.
Thompson, Curiel, Fry, Carver & Barkwith should have all resigned.
Nicholas Thompson career low must have been when a High Court judge found the company, [Nicholas Thompson as CEO of the company], guilty of fraudulent misrepresentation and deceit, the most serious judgement handed down in the civil courts. Mr Justice Coulson, presiding over the case, said it was Nicholas Thompson’s “wholly unreliable” testimonial statement that had persuaded him that the misrepresentation was intentional, and therefore fraudulent. The judge said the details of the statement were “incorrect, misleading, inaccurate, unfair, and, in at least one case, knowingly untrue.”. A legal source said the seriousness of the judge’s ruling could not be underestimated. He said: “Nicholas Thompson really went out on a limb with this one, and it’s not as if he’s a junior employee – he’s the chief executive. The reputational impact of this individual could be enormous. This is as serious a finding as you get in a civil court.”
Raul Curiel took no action to dismiss Thompson at the time - as low as it gets - but 1p a share was pretty low too.
Toot Toot - the Fat Controller is finally waving goodbye!!
TB just sold his shares to us at Bravehart ...
RNS at bravehart if would like to read ..
Regards
Castle
HALF YEAR RESULTS: looks terrible
o Revenue 3377k [less sub-consultant costs]
o Comprehensive Loss 436k
o Cash now completely gone
o AUK currently burning through Cash at a rate exceeding 1m pa. [530k in the half year]
o Selling off Middle East to provide cash injection
o Further Sell Offs being planned: assume all non-UK operations
o Balance Sheet shot to bits: Total Liabilities @ 8.0m v Trade Assets @ 2.6m
o Share Consolidation to improve Share Register: anything to keep the share value above zero!
Outcome:
o AUK is a small 6m pa business, ongoing significant losses due to a large unproductive non fee earning Board, with a business that offers low fee levels to win the work, and a poor strategy of buying third rate businesses to increase revenue
Actions outstanding:
1. Sack the complete Board to significantly reduce the cost base, and to be replaced by Fee Earning Architects, and junior non-exec account team
2. Sell all non-UK Assets
3. Management Buy Out and revert to a private company structure, owned by the main fee earners or risk the main fee earners [who are not the main shareholders] exiting and taking the clients and revenue with them.
Any architectural practice has a long 7+ year tail of potential PI claims - so not a great 'shelf' to buy into?
AUK has excessive commercial office space that also is a burden for a new entrant.
If you took five of the leading fee earners out of the business, the company would only have massive liabilities, and little to no revenue. The leading five fee earners have little to no shareholding, so would have no ambition to simply sell their futures to fund the retirement of the past or future owners.
By all accounts, the Fat Controller has tried to sell this 'pup' for 20 years, but has failed.
When all else has failed, the Fat Controller is now having to sell the family silver to pay its debts.
Buying an architectural practice at, what might be the start of a recession, is not a great prospect. Further staff redundancies may emerge in the next 12 months, as the UK market begins to contract, adding more restructuring costs to a business already on its knees.
CMH also has aged directors looking to exit [a 77 year old.....] - perhaps a common thread to AUK?
Hi Bear, I dont have your knowledge of the company, but the scenario you present, I have seen happen in other business I work with - many of these consultancy companies have the same problem. It's almost like you are saying that the 2.3M of intangible assets might just 'walk away'. Doesn't look like there is much else to get excited about from glancing a the balance sheet. It will be interesting to see how this plays out. As I said, keep an eye on ticker CMH. T Brown has 28% of that company.
It does sound like the the major share holders might want to exit, could it just be a useful shell company for another AIM listing via a reverse takeover. I dont know.
hey Dartron
Perhaps Mr Brown is lining up to buy the shares of the retired/retiring Directors....but will they sell for 1.3p?
The real worry is that the main fee earners winning the work are not the shareholders - they have next to no share holding, even the two MD in London - next to nothing.... ..The majority of shares are held by 65- 70-75 year olds, that had their day 20 years ago. Most [if not all] have resigned....some big bust ups along the way!..and now the Fat Controller is hanging up his calculator.
So a question without notice to Mr Brown:
"what happens if the main fee earners in the UK businesses simply say, 'we are out of here', and set up their own practices - AUK [& Mr Brown] will be left with nothing, as Clients will follow the fee earners. These fee earners are not shareholders - so why should they pay The Fat Controller [or Mr Brown] for earnings that they created."
AUK sold off the only worthwhile piece of the 3rd Rate Actors out in UAE - so the Middle East has basically imploded. Zip value there....
AUK simply pick up dividends from the EU operation - so that will always small beer. Zip value there.
What do you think D?