In 2016, UK remained the main income source with 65% of the groups income, despite all the ‘international’ hype. The UK income was dropping fast, and so was the UK profit. Q1 2017 looks to be a loss it would seem. Middle East & Europe was only 35% of the pot in 2016, but combined, contributed zero profit. CEO suggests “we do not expect any contribution in profit terms from the UK until the second half.” Basically they have no idea what the second half will look like, as they will have to see what new instructions land: they should have said so! With a Hard Brexit a near-certainty, what Developers will be progressing projects without Pre-Lets: projects going to the construction phase may dry up. It is clear that the CEO is giving clear signals that profits in the UK will be very, very difficult to maintain and they want to conserve cash. [eg. no div]. 260k pa loan repayment over the next five years paid on an architectural practice in the Middle East making little or no profit! Not sure: Where do they get the cash to repay the debt when they are potentially making no profit??? With only 800k in cash, and 350k per week outgoings, it does not take a genius to see that things may get bleak – very quickly. I predict losses 2017, increased bank borrowings, more UK staff reductions – they need to get well below 120 in the UK to match other architects earnings/head. [>100-125k/head] AUK only showing 4% profit, when many others are currently at 25-30%.....AUK must be overstaffed and must be under bidding, and generally very unproductive compared to their peers. Junior Fee Earners own little or no stock. Lots of shares held by 60+ year old Directors soon to retire or retired former directors holding stock with no one to sell to, it would seem?.....Incentive to next generation simply not there……Model Broke….. Bear…… Strong Sell
And still pay the dividend ! I actually think they could be good. The £ went down in June. Secondly businesses in the UK seemed to return to normal after the Brexit vote. I am hoping the cheaper £ means the P&L and thus balance sheet have seen improvement As you say it is a gamble !
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