ARL.L Regulatory News (ARL)

3 Feb 2006 07:00

SMC Group Plc03 February 2006 SMC Group Plc ("SMC" or "the Company") Trading Update and Acquisitions SMC Group Plc, the architects and design business, today announces an update oncurrent trading and the acquisition of two architecture and design companies, Ian Penrose Architects Limited ("Ian Penrose Architects") and Covell Mathews Cambridge Architects Limited ("Covell Matthews"). Current trading SMC has made good progress during 2005 and the financial performance of theGroup is expected to be in line with market expectations. All group companieshave increased their secured level of orders for 2006 and have a strongprospective pipeline of work, expected to generate organic growth. The outlook for the Group is encouraging and SMC is confident of the prospectsfor 2006. The company will announce its preliminary results for the year ended31st December 2005 on 27th April 2006. Acquisitions SMC Group Plc announces that it has agreed to acquire Ian Penrose Architects andCovell Matthews, both architecture and design companies, based in the South Westand the East of England respectively. SMC expects both acquisitions to be immediately earnings enhancing. Ian Penrose Architects • The total consideration has been calculated by reference to a multiple of 3.5 times Ian Penrose Architects' profit before tax for the 12 months ended 31 December 2007. • £2.0m is payable immediately (which includes an allowance for £160,000 of cashleft in the business) and will be satisfied by a cash payment of £1.5m and the issue of 452,849 shares of 0.5 pence each in the Company ("New Ordinary Shares") at a price of 109.3 pence per share. • Application will today be made for the New Ordinary Shares to be admitted toAIM. It is expected that dealings in the New Ordinary Shares will commence on 8 February 2006. • The balance of the consideration will be paid in stages in June 2007 and June2008, and will be calculated according to the future performance of Ian Penrose Architects for 2006 and 2007. Ultimately, the total consideration will be satisfied by a mix of cash and shares at approximately 50% cash/50% shares. • For its financial year ended 30 June 2005, Ian Penrose Architects' revenue was £1.5m and its profit before tax was £0.7m. • The acquisition of Ian Penrose Architects will increase SMC's exposure to the architecture and design market in the South West of England. •Ian Penrose Architects' client list includes: Mercedes-Benz, Rok Group, Norwich Union, University of Exeter, Redrow Homes, Crest Homes, Kier Group, Devon County Council, British Gas, London & Devonshire Trust and Plymouth College. Covell Matthews • The total consideration has been calculated by reference to a multiple of 3.5times the average of Covell Matthews' profit before tax for each of the 12 months ended 31 December 2006 and the 12 months ended 31 December 2007 respectively. • £2.1m is payable immediately (which includes an allowance for £425,000 of cash left in the business) and will be satisfied by a cash payment of £1.7m and the issue of 386,204 shares of 0.5 pence each in the Company ("New Ordinary Shares") at a price of 109.3 pence per share. • Application will today 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 8 February 2006. • The balance of the consideration will be paid in stages in June 2007 and June 2008, and will be calculated according to the future performance of Covell Matthews for 2006 and 2007. Ultimately, the total consideration will be satisfied by a mix of cash and shares at approximately 75% cash/25% shares. • For its financial year ended 30 April 2005, Covell Matthews' revenue was £1.8m and its profit before tax was £0.5m. • The acquisition of Covell Matthews will increase SMC's exposure to thearchitecture and design market in the East of England, East Anglia and the HomeCounties. •Covell Matthews' client list includes: Turnstone Estates Ltd, Wrenbridge,Capital & Counties, Lothbury Property Partnership, AMEC, Anglian WaterGroup, University of Cambridge and Kings College School. The acquisition of Ian Penrose Architects and Covell Matthews will be the fifthand sixth transactions completed by SMC. 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. Commenting, SMC's Chief Executive, Stewart McColl said: "We are delighted to welcome Ian Penrose Architects and Covell Matthews to thestable of SMC companies. Both acquisitions will be earnings enhancing and weexpect them to generate value for our shareholders. They also increase ourgeographic footprint, which has particular relevance to education projects,specifically related to the Building Schools for the Future programme on which alocal presence is deemed advantageous. Our Group has already created a newdivision, SMC Education & Community to focus on expected opportunities in thissector, which will see £60bn invested in improving school infrastructure overthe next 10 - 15 years. Both new acquisitions will contribute to and benefitfrom this initiative. One Group company, SMC Gower Architects based in Leeds hasrecently been selected by the Investors in the Community and Land SecuritiesTrillium Joint Venture to assist them with their bid for Leeds City Council's£250m schools programme". 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 Notes to Editors SMC Group SMC Group Plc is the holding company for a group of architects and designers. Ithas established expertise in a broad range of sectors, including residential,retail, industrial, workplace, transportation, leisure and education. With theaddition of Ian Penrose Architects and Covell Matthews, the Group has expandedits national coverage throughout England, with offices in London, Warwick,Manchester, Leeds, Birmingham, Liverpool, Lancaster, Exeter, Plymouth andCambridge and is engaged in a range of projects throughout the UK, in Eire andin parts of mainland Europe. The Company's core strategy is to create an architectural group with the scaleand expertise to access the most profitable schemes across a range of sectorsand geographical locations. The Group intends to focus on its organic growth,increasing its share of the UK market and securing larger, higher marginprojects. The Group plans to complement this organic growth withearnings-enhancing acquisitions in order to consolidate its geographic andsector coverage. On 5th September 2005 the company announced its maiden interim results for thesix months ended 30th June 2005. SMC reported turnover of £5.4m (an increase of47% compared to the same period in 2004) and profit before tax of £1.1m (anincrease of 110% compared to the same period in 2004). The company alsoannounced plans to introduce a maiden dividend in June 2006. Ian Penrose Architects Established in the early 1980's, Ian Penrose Architects has developed into oneof the top architectural firms in the South West of England with offices inExeter and Plymouth, with 22 people working on projects throughout the SouthWest and the Midlands. The business works across a wide range of market sectorsincluding: retail, industrial, offices, science & technology and residential,with a number of projects in the public sector including healthcare. Clientswith whom they work include: Mercedes-Benz, Rok Group, Norwich Union, Universityof Exeter, Redrow Homes, Crest Homes, Kier Group, Devon County Council, BritishGas, London & Devonshire Trust and Plymouth College. Covell Matthews Established in 1987 as an MBO from an old established firm, Covell Matthews isin a dominant position in the East of England from its base in Cambridge,employing 28 people working on projects in the construction value range £0.5m to£25m from East Anglia to the Home Counties and the East Midlands. The businessworks across a wide range of market sectors including: retail & leisure,industrial/warehousing, offices/business parks/laboratories, residential and, inthe public sector, education. Their client list includes: Turnstone Estates Ltd,Wrenbridge, Capital & Counties, Lothbury Property Partnership, AMEC, AnglianWater Group, University of Cambridge and Kings College School. This information is provided by RNS The company news service from the London Stock Exchange