Pre-close Trading Update

25 Jan 2007 07:01

SMC Group Plc25 January 2007 SMC Group Plc Pre-Close Trading Update SMC Group Plc, the architects and design business, provides the followingpre-close trading update for the year ended 31 December 2006. At the end of 2006 the Board commissioned an independent report from a 'bigfour' accountancy firm to look at various aspects of the Group's strategy andbusiness model in conjunction with SMC's new finance team. As a result of thisreport the Board has decided to apply a more conservative, consistent andcentralised approach to the treatment of work in progress across the Group andbelieve that approach will be in the interest of future performance. It has beendecided to adopt this with immediate effect to the preliminary results for theyear ended 31st December 2006. The impact of this change will result in profit before tax and amortisation for2006 in the region of £5.1m which will be below market expectations for bothoverall and organic turnover and profit, but still represents an un-auditedprofit growth of circa 65% on the previous year. The Board is confident that this conservative approach is in the long terminterests of the Group. The report vindicated the Group's overall business modeland concluded that the policy of acquiring businesses on the basis of 5 timespost tax profits will be strongly earnings enhancing and the management'spre-acquisition forecasts of post acquisition performance for new operatingcompanies is realistic. The Directors report that organic growth and net debt will be in line with theirexpectations. The trading environment remains excellent and the overall outlookfor the Group remains positive. The company is pleased to record that over 60%of budgeted turnover for 2007 is already secured. Preliminary results for the year ending 31st December 2006 will be announced onThursday 29th March 2007. For further information: SMC Group Plc Tel: +44 (0)20 7495 5335Stewart McColl Numis Securities Tel: +44 (0)20 7776 1500James Serjeant Bell Pottinger Corporate & Financial Tel: +44 (0)20 7861 3232David Rydell/Geoff Callow/Chris Hamilton This information is provided by RNS The company news service from the London Stock Exchange