ARL.L Regulatory News (ARL)

30 May 2006 07:03

SMC Group Plc30 May 2006 Tuesday 30 May 2006 SMC Group Plc ('SMC' or 'the Company') SMC acquires Charter Consultant Architects SMC Group Plc, the AIM-listed leading group of architects and designers,announces the acquisition of The Charter Partnership Limited, trading as CharterConsultant Architects ("Charter"), an architecture and design company withoffices in London, Bedford, Bournemouth and Ipswich. Highlights • The total consideration is based on an initial payment of £3.56 million, with 2 further payments contingent on Charter's financial performance between now and 31 December 2008 • The payments are structured as follows: • The £3.56 million initial payment is due immediately, and will be satisfied by a cash payment £1.55 million, loan notes of £0.23 million and the issue of 1,340,026 shares of 0.5 pence each in the Company ('New Ordinary Shares') at a price of 132.83 pence per share • The 2 further payments, contingent upon the future performance of Charter, will be calculated with reference to 70% of Charter's profit before tax multiplied by 5 for each of: i) the period from the date of acquisition to 31 December 2007;and ii) the period from 1 January 2008 to 31 December 2008 • Each payment will be calculated net of cumulative prior amounts paid in respect of the total consideration • The further payments in respect of the acquisition of Charter will be made on 1 July 2008 and 1 July 2009 respectively. The total consideration will be satisfied by a mix of cash, loan notes and ordinary shares • Application will be made for the New Ordinary Shares to be admitted to AIM. It is expected that dealings in the New Ordinary Shares will commence on or around 5 June 2006 • Charter's clients include: BT, Gillette, Trinity College Cambridge, MoD, Norwich City Council, University of Essex, University of Luton, Interserve, AMEC and Highcross Strategic Services • The directors consider that Charter's projects in progress exceed £750 million in construction value and that the acquisition will be earnings enhancing • The directors consider that the acquisition of Charter will increase SMC's exposure to the architecture and design market in the South and East of England and provides increased exposure in the education sector and MOD work • With the addition of Charter, SMC will have approximately 440 members of staff • For the audited financial year ended 30th April 2005, Charter's revenue was £7.2 million and its agreed normalised profit before tax was £1.3 million Commenting, SMC's Chief Executive, Stewart McColl said, "We are delighted withthe acquisition of Charter, a business that was introduced to us by one of ouroperating companies which already held Charter in high esteem. We look forwardto seeing our various teams collaborating with them to bring considerablebenefits to our clients and our shareholders." Chris Littlemore, Chief Executive of Charter, said, "We believe that therelationship with SMC is a fantastic opportunity, will enhance our collectiveability to deliver projects much more efficiently by way of sharing skills,resource, technology and geographical coverage". For further information contact: SMC Group PlcStewart McColl 020 7495 5335 Bell PottingerDavid Rydell/Geoff Callow 020 7861 3232 Noble & CompanyMatthew Hall/Rory Boyd 020 7763 2200 SMC Group Plc, the AIM-listed leading group of architects and designers,announces the acquisition of The Charter Partnership Limited, trading as CharterConsultant Architects, an architecture and design company. The business andassets of Charter will be fully integrated into the exisiting SMC Group and willoperate as "SMC Charter Architects". The total consideration is based on an initial payment of £3.56 million, with 2further payments contingent on Charter's financial performance between now and31 December 2008 The £3.56 million is payable immediately, and will be satisfied by a cashpayment £1.55 million, loan notes of £0.23 million and the issue of 1,340,026shares of 0.5 pence each in the Company ('New Ordinary Shares') at a price of132.83 pence per share. The 2 further payments, contingent upon the future performance of Charter, willbe calculated with reference to 70% of Charter's profit before tax multiplied by5 for each of: i) the period from the date of acquisition to 31 December 2007;and ii) the period from 1 January 2008 to 31 December 2008 Each payment will be calculated net of cumulative prior amounts paid in respectof the total consideration. These amounts will be settled on 1 July 2008 and 1 July 2009 respectively. Thetotal consideration will be split between cash, loan notes and ordinary shares,with no more than 50% of the total consideration being settled in ordinaryshares, at the discretion of SMC. Application will be made for the New Ordinary Shares to be admitted to AIM. Itis expected that dealings in the New Ordinary Shares will commence on or around5 June 2006. Charter is a design led architectural and interior design company, operatingfrom offices in London, Bedford, Bournemouth and Ipswich. The company worksacross a wide range of sectors on projects which range in size and complexity,with a geographical spread across mainly the South and East of England whichaligns with SMC's 'balanced approach to growth'. Charter's clients include a mixture of regional and national developers, localauthorities and education establishments. Principal growth areas recently forthe company have been urban regeneration, residential, education and leisurethrough clients such as; the Borough Council of Wellingborough, Urban Solutions(Cardiff), South Thames College, Canterbury College, Jelson, Spinnaker (formerlyWestern Challenge Housing Association), Wates and Rok Developments. Charter's audited turnover for the financial year ended 30 April 2005 was £7.2million, with a normalised profit before tax of £1.3 million. The acquisition of Charter is the ninth transaction completed by SMC and theseventh since its admission to AIM in June 2005. The SMC Group seeks to achievegeographical coverage throughout the UK. SMC's strategy focuses upon organic andacquisitive growth, aiming to acquire established companies with strong tradinghistories and prospects, thereby gaining access to larger scale and highermargin projects such as major town centre regeneration or large governmentschemes such as schools and hospitals. -ends- Notes to Editors SMC Group Plc is the holding company for a group of architects and designers. Itwas admitted to AIM on the 10th of June 2005 and has established expertise in abroad range of sectors, including residential, retail, industrial, workplace,transportation, leisure and education. On 3rd February 2006 the Group announcedthe acquisition of Ian Penrose Architects and Covell Matthews Architects. Theseadditions to the Group have enabled SMC to expand its national coveragethroughout England, with offices in London, Warwick, Manchester, Leeds,Birmingham, Liverpool, Lancaster, Exeter, Plymouth and Cambridge. On the 23rdMarch 2006, the company acquired the business and assets of Alsop, the RIBAStirling Prize winning design team with offices in London, Toronto, Singapore,Shanghai and Beijing a team with a particularly high creative profile. The Group's core strategy is to create an architectural group with the scale andexpertise to access the most profitable schemes across a range of sectors andgeographical locations. The Group intends to focus on its organic growth,increasing its share of the UK market and securing larger, higher marginprojects, and plans to complement this organic growth with earnings-enhancingacquisitions in order to consolidate its geographic and sector coverage. On 27th April 2006 the Group announced its preliminary results for the yearended 31 December 2005. It reported that turnover had grown by 159% to £13.5m,profit before tax grown by 280% to £2.9m and profit after tax grown by 263% to£1.9m, all compared to the same period in 2004. The Group also announced itsintentions to introduce a maiden dividend in June 2006, subject to shareholderapproval, one of several items on the agenda for the Group's AGM which isscheduled to be held in the Lutyens Room at the Royal Institute of BritishArchitects in Portland Place , London at 11.00am on 13th June 2006. This information is provided by RNS The company news service from the London Stock Exchange