Annual Financial Report


Announcement of final audited results

for the year ended 30 September 2014

Aukett Swanke Group Plc (the “Group”), the international group of architects and interior designers, announces its final audited results for the year ended 30 September 2014.



  • Revenue up 106% to £17,326,000 (2013: £8,406,000)
  • Profit before tax up 155% to £1,400,000 (2013: £550,000)
  • Earnings per share up to 0.65p (2013: 0.26p)
  • Net assets increased to £5,053,000 from £3,029,000
  • Net funds of £1,778,000 (2013: £1,080,000)
  • Return to two annual dividends


Nicholas Thompson, Chief Executive Officer of Aukett Swanke commented:

“The 2014 results have shown the promise that the new ‘Aukett Swanke’ brand can create. We see 2015 as a year of opportunity to continue on our growth strategy”.



Aukett Swanke – 020 7843 3000

Nicholas Thompson, Chief Executive Officer

Beverley Wright, Group Finance Director


finnCap – 020 7220 0500

Corporate Finance: Julian Blunt / James Thompson

Corporate Broking: Stephen Norcross


Hermes Financial PR

Trevor Phillips – 07889 153628

Chris Steele – 07979 604687 



Chairman’s statement

It is a pleasure to report on a highly successful year for your Company. During the year ended 30 September 2014 profit before tax increased by 155% to £1.4m (2013: £550k) whilst revenue more than doubled to £17.3m (2013: £8.4m). Earnings per share continue to grow and now stand at 0.65 pence per share (2013: 0.26 pence per share).

In accordance with the Company’s previously stated policy, the Company intends to resume a regular pattern of dividend payments. Two payments were made during the year, one of which was in respect of the prior year. A further dividend payment was also made after the year end relating to the year ending September 2014.

Our net funds have continued to increase and stood at £1.8m by the year end. This was achieved notwithstanding that our acquisition of Swanke Hayden Connell Europe Limited (‘SHCE’) was, in part, cash funded. At the time of writing the Group is free of debt.

As noted above, in December 2013 we acquired SHCE. Much of 2014 involved integrating SHCE and consolidating our enlarged Group’s operations. We anticipate the full benefit of this will begin to be enjoyed in 2015.

The year also saw some changes to the Board. Beverley Wright has joined us as the new Group Financial Director bringing with her experience and expertise from a successful career with major companies in the construction arena including Mowlem Plc and CH2M Hill. John Bullough has joined as a Non Executive Director and chairs the Remuneration Committee.  He brings with him a vast knowledge of the commercial property sector through his senior level management experience within Grosvenor and ALDAR in the Middle East.

The only negative aspect to report upon has been the unfolding events in Russia which have tempered this year’s performance.

I am confident that 2015 will again reflect a further overall improvement on current year performance with respect to revenues, profits, cash and dividends.

It is gratifying to report results ahead of our original forecasts, in no small measure due to the excellence of our offering to our clients and the enthusiasm, loyalty and diligence of our staff. I would like to convey my thanks to all our staff for their hard work during the year in achieving these results which, yet again, provide a stronger platform for the year ahead.

I am confident about your Company’s future.


Anthony Simmonds

Non Executive Chairman

28 January 2015



Extracts from strategic and directors’ reports


Revenues in the year increased to £17.3m (2013: £8.4m), with revenue less sub consultants at £14.7m (2013: £7.1m). Profit before tax by comparison rose 155% to £1.4m (2013: £550k). This result provides 3.6 times dividend cover.

Net funds continued to climb at £1.8m (2013: £1.1m) leaving the Group virtually debt free. Post year end the small residual outstanding bank loan was repaid.

The result would have been significantly better had our pre acquisition Russian operation not continued to under perform, and the former SHCE business not suffered from a number of project delays in both Russia and the UK in the final quarter.

Architectural and interior design success is highlighted with three awards, two for 62 Buckingham Gate and one for M&S Cheshire Oaks.

The acquisition of SHCE and organic growth in the year has substantially bolstered our rankings. In the 2015 World Architecture 100 listings, published by Building Design, Aukett Swanke Group Plc (‘Aukett Swanke’) is ranked 53rd (2014: 71st), making us the 5th (2014: 8th) largest UK practice by international measurement.


United Kingdom

The UK has had an excellent year with revenue less sub consultant costs rising 110% to £12.8m (2013: £6.1m). SHCE contributed 58% of this increase with organic growth accounting for 42%. We gained an additional 42 technical staff with SHCE and added 33 more through direct recruitment in a tightening labour market. The need to recruit in advance of project conversion through the various work stages along with an unexpected delay in two projects in the fourth quarter, restricted the profit rise, however we are able to report a profit rise of 90% at £1.8m (2013: £961k).

Nine major projects were either in the site phase or moved into construction during the year including Verde SW1 in Victoria for Tishman Speyer, Imperial West Phase 2 for Imperial College in West London, 10 Trinity Square in the City, two stores for Fenwick, the Adelphi building for Blackstone, Forbury Place in Reading for M&G, 125 Wood Street for Orchard Street Investment Management and Uxbridge Business Park for Goodman.

Veretec, our Executive architecture division, had its best year with revenue less sub consultant costs of over £3.3m for the first time. Five schemes represented approximately 70% of its revenue including clients such as Sir Robert McAlpine, McLaren Construction, Candy & Candy, and the Qatari Foundation. Our interior design offer was substantially augmented by the addition of SHCE’s client base including projects with Ascot Underwriting, BNP Paribas, European Medicines Agency and Symantec.

Significantly, the UK out of town portfolio has returned through our existing client base with schemes in Birmingham, Bristol, Cambourne, Cambridge, Farnham, Harwell near Oxford, Hemel Hempstead and Sheffield.

The UK studio approaches 2015 with renewed optimism.



Despite a fillip from the addition of a new office and our teams’ joint efforts post acquisition, the final result for the year is a loss of £350k.

We expected to avoid any losses in the second half in the pre acquisition operation and this was achieved with a small profit of £19k, reducing its annual loss to £304k (2013: £270k). Unfortunately, the SHCE branch suffered a project delay, in tandem with the UK operation in the final quarter, which reversed the first half profit and returned a loss of £46k.

The Board is mindful of this important market and the time taken to establish our credentials in it. However, such losses are unsustainable and we have given ourselves a short period in which to rectify the situation or consider alternative solutions. This process is further exacerbated by the recent troubles in the Russian financial markets brought about by Russian foreign policy and the collapse in the oil price. In the short term management’s strategy is to concentrate on local Russian commissions where there is limited exposure to third party sub consultant costs and hard currency liabilities.

Given the continuing losses the remaining goodwill balance of £125,000 relating to the pre acquisition Russian operation, ZAO Aukett Fitzroy Vostok, has been impaired.



This is a new operation to the Aukett Swanke Group and has performed well in the period. During the year we moved to slightly larger premises in order to provide a base for continued growth. With a profit of £90k on revenues of £687k this has been the best performer from the SHCE portfolio of offices. The office primarily works for local Turkish clients including: Tahincioglu Real Estate A.S. NIDA Insaat, FIBA Group, Cengiz Holding A.S, ER Yaterim Turizm Insaat A.S. and Vodafone. During the year the office successfully completed the 42 storey Palladium commercial office building in Istanbul. Our business plan assumes reasonable growth in this market.


Middle East

Revenues have almost doubled in the year at £492k (2013: £252k) enabling the operation to return a small profit of £14k (2013: loss £132k). The key project won with Majid Al Futtaim at the end of last year continued throughout the period to provide much needed local stability.

During the year we have seen the number of enquiries rise as the region returns to a more active market. However, critical mass remains a challenge to achieving our growth strategy.  A number of independent potential solutions have now been identified, which we are considering. This operation could easily double or treble its size.



A veritable jewel in the crown. For a fourth successive year this operation has returned an improved performance based on its leading position in the Berlin market. The studio is one of the few “go to” practices for working drawing expertise. Pre tax profits rose by 8.7% to £1.5m (2013: £1.3m) on revenue less sub consultants up 5.6% at £4.3m (2013: £4.1m). Our net share (post tax) amounted to £254k (2013: £234k)

Major projects during the year included assistance on the Berlin Airport, Elbphilharmoine working drawings in Hamburg, KfW Bank refurbishment works in Berlin, Siemens office in Forchheim, Spindlershof refurbishment in Berlin, the shopping mall Gropius Passagen for the developer mfi and the Kaiserstrand Hotel in Bamsin.



A successful bid for Deutsche Bank provided the studio with a turnaround performance in the year and much needed revenue visibility.

Revenues grew by 83% to £909k (2013: £496k) and profits up five fold to £292k (2013: £58k).

The office retains a high calibre client portfolio including: The Bank of New York Mellon, JP Morgan, Microsoft, Morgan Stanley and Tishman Speyer.



The market for services in the Czech Republic is depressed and achieving a breakeven result has been a considerable achievement. The Group’s decision to move to a JV arrangement has been vindicated by recent results.  As the studio has considerable design skills, the Group will remain committed to its continuation as part of the Group until the economy recovers.


Group costs

Group costs rose to £398k (2013: £144k). The increase comprises one off costs in respect of corporate finance and legal work and the acquisition of SHCE. It also reflects the impacts of salary reinstatements, the addition of a new non executive director and an enhanced Head Office team to support the enlarged Group, together with recruitment fees for those individuals.


Swanke Hayden Connell Europe Limited integration

During the past nine months significant progress has been made to integrate SHCE into our business model. Both IT platforms and software systems have been aligned and we have co located our joint offices in London and Moscow. This has resulted in a significant capital spend in IT infrastructure and property refurbishment, but brings identified cost savings that should materialise downstream. Additionally we have been able to commence joint working on new projects in order to yield longer term synergies and maximise our combined expertise on project delivery.

Little of this benefit (but all of the cost) has been seen in these results. However, our end of year reviews have highlighted little or no further capex requirements in 2014/15 for either IT or property (other than volume expansion) and budgets reflect an ongoing underlying cost saving profile in these areas.

We are pleased to report that the merger will bring the expected longer term benefits not only in critical mass and brand quality, but in greater efficiency from our underlying overhead.



It is the Board’s intention to bring the timing of any future dividend into line with market practice, declaring final and interim dividends at the time of our final and interim results, respectively.



The 2014 results reflect a considerable improvement in our underlying performance and the executive directors are confident that this performance can be maintained as the markets in which we operate also improve.


Nicholas Thompson

Chief Executive Officer

Beverley Wright

Group Finance Director

28 January 2015



Consolidated income statement

For the year ended 30 September 2014

Revenue   17,326 8,406
Sub consultant costs   (2,594) (1,290)
Revenue less sub consultant costs   14,732 7,116
Personnel related costs   (9,868) (4,751)
Property related costs   (2,343) (1,256)
Other operating expenses   (1,861) (1,027)
Other operating income   404 217
Operating profit   1,064 299
Finance income   1
Finance costs   (18) (14)
Profit after finance costs   1,046 286
Share of results of associate and joint ventures   354 264
Profit before tax   1,400 550
Tax charge   (354) (176)
Profit from continuing operations   1,046 374
Profit for the year attributable to equity holders of the Company    1,046  374
Basic and diluted earnings per share      
From continuing operations   0.65p 0.26p
Total earnings per share   0.65p 0.26p



Consolidated statement of comprehensive income

For the year ended 30 September 2014


Profit for the year   1,046 374
Other comprehensive income:      
Currency translation differences   (103) (2)
Currency translation differences recycled on discontinued operations    –  1
Other comprehensive income for the year   (103) (1)
Total comprehensive income for the year attributable to equity holders of the Company    943  373



Consolidated statement of financial position

At 30 September 2014





Non current assets      
Goodwill   1,835 1,369
Other intangible assets   594
Property, plant and equipment   648 326
Investment in associate   244 190
Investments in joint ventures   131 39
Deferred tax   290 454
Total non current assets   3,742 2,378
Current assets      
Trade and other receivables   6,379 3,515
Current tax   117
Cash and cash equivalents   1,891 1,343
Total current assets   8,270 4,975
Total assets   12,012 7,353
Current liabilities      
Trade and other payables   (6,540) (4,005)
Current tax   (131)
Short term borrowings   (113) (150)
Provisions   (104) (50)
Total current liabilities   (6,888) (4,205)
Non current liabilities      
Long term borrowings   (113)
Deferred tax   (71) (6)
Total non current liabilities   (71) (119)
Total liabilities   (6,959) (4,324)
Net assets   5,053 3,029
Capital and reserves      
Share capital   1,652 1,456
Merger reserve   1,176
Foreign currency translation reserve   (74) 29
Retained earnings   148 (898)
Other distributable reserve   2,151 2,442
Total equity attributable to

equity holders of the Company







Consolidated statement of cash flows

For the year ended 30 September 2014






Cash flows from operating activities      
Cash generated from operations   1,360 646
Interest paid   (18) (14)
Income taxes received / (paid)   70 61
Net cash inflow from operating activities   1,412 693
Cash flows from investing activities      
Purchase of property, plant and equipment   (523) (157)
Sale of property, plant and equipment   4 4
Acquisition of subsidiary, net of cash acquired   (57)
Interest received   1
Dividends received   184 210
Net cash generated from / (used in) investing activities    (392)  58
Net cash inflow before financing activities   1,020 751
Cash flows from financing activities      
Repayment of bank loans   (150) (150)
Payment of asset finance liabilities  
Dividends paid   (291)
Net cash used in financing activities   (441) (150)
Net change in cash, cash equivalents and bank overdraft    579  601
Cash and cash equivalents and bank overdraft at start of year    1,343  739
Currency translation differences   (31) 3
Cash, cash equivalents and bank overdraft at end of year    1,891  1,343



Consolidated statement of changes in equity

For the year ended 30 September 2014


  Share capital£’000 Foreign
At 30 September 2012 1,456 30 (1,276) 2,442 2,652
Profit for the year 374 374
Other comprehensive income  –  (1)  –  –  –  (1)
Share based payment value of employee services  








At 30 September 2013 1,456 29 (898) 2,442 3,029
Profit for the year 1,046 1,046
Other comprehensive income  –  (103)  –  –  –  (103)
Share based payment value of employee services  –   –   –   –   –   –
Issue of ordinary shares in relation to business combination   196   –   –   –   1,176   1,372
Dividends paid (291) (291)
At 30 September 2014 1,652 (74) 148 2,151 1,176 5,053



Notes to the audited final results


1          Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS’).


2          Operating segments

The Group comprises a single business segment and five separately reportable geographical segments (together with a Group costs segment). Geographical segments are based on the location of the operation undertaking each project.

The Group’s associate and joint ventures are all based in Continental Europe.

Segment revenue

Segment revenue   2014




United Kingdom   13,882 6,160
Russia   1,598 1,875
Turkey   853
Middle East   993 371
Continental Europe  
Revenue   17,326 8,406


The geographical split of revenue based on the location of project sites was:





United Kingdom   12,267 6,114
Russia   1,921 1,875
Turkey   884
Middle East   1,744 408
Continental Europe   183 9
Rest of the World   327
Revenue   17,326 8,406


Segment revenue less sub consultant costs






United Kingdom   12,779 6,083
Russia   774 781
Turkey   687
Middle East   492 252
Continental Europe  
Revenue less sub consultant costs   14,732 7,116


Segment result

2014 Segment result Before goodwill impairment£’000 Goodwill
United Kingdom 1,815 1,815
Russia (350) (125) (475)
Turkey 90 90
Middle East 14 14
Continental Europe 354 354
Group costs (398) (398)
Profit before tax 1,525 (125) 1,400


3          Earnings per share

The calculations of basic and diluted earnings per share are based on the following data:

Earnings 2014




Continuing operations 1,046 374
Profit for the year 1,046 374


Number of shares 2014




Weighted average of Ordinary Shares in issue 161,026,436 145,618,693
Effect of dilutive options 463,370
Diluted weighted average of ordinary shares in issue 161,489,806 145,618,693


4          Cash generated from operations





Profit before tax – continuing operations   1,400 550
Currency translation differences recycled   1
Share based payment value of employee services   4
Finance income   (1)
Finance costs   18 14
Share of results of associate and joint ventures   (354) (264)
Goodwill impairment provision / write off   125 125
Intangible amortisation   82
Depreciation   259 149
Profit on disposal of property, plant and equipment   (4) (4)
Change in trade and other receivables   (604) (1,022)
Change in trade and other payables   676 1,365
Change in provisions   (238) (271)
Net cash generated from operations   1,360 646


5          Analysis of net funds





Cash and cash equivalents   1,891 1,343
Secured bank overdraft  
Cash, cash equivalents and bank overdraft   1,891 1,343
Secured bank loan   (113) (263)
Net funds   1,778 1,080






Cash and cash equivalents   1,891 1,343
Short term borrowings   (113) (150)
Long term borrowings   (113)
Net funds   1,778 1,080


6          Business Combination

On 18 December 2013 the Group acquired the entire issued share capital of Swanke Hayden Connell Europe Limited, a major Group of architects and interior designers with studios in the U.K, Russia and Turkey.

The total consideration for the acquisition was £1.6m comprising a cash payment of £209,053 and the balance satisfied by the issue of 19,594,959 new Ordinary Shares at a price of 7.00 pence per share.

This acquisition has provided revenue enhancing opportunities in a wider market place and significantly improved the Group’s market position in London and Moscow, as well as affording access to the Turkish market. The goodwill acquired on the acquisition represents the knowledge and experience of the assembled workforce in addition to expected integration savings and economies of scale. The goodwill is not considered deductible for income tax purposes.

The below table summarises the consideration paid for Swanke Hayden Connell Europe Limited, the fair value of assets acquired and liabilities assumed at the acquisition date.

Consideration at 18 December 2013 £’000
Cash 209
Equity instruments (19,594,959 ordinary shares)  1,372
Total consideration transferred 1,581
Indemnification asset (110)
Total consideration 1,471
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents 152
Property, Plant and Equipment 69
Tradename (included in other intangible assets) 415
Customer relationships (included in other intangible assets) 249
Order book (included in other intangible assets) 40
Amounts recoverable on contracts 470
Trade and other receivables 1,863
Deferred tax assets 172
Trade and other payables (2,017)
Provision for liabilities (292)
Contingent liabilities (110)
Deferred tax liabilities (145)
Total identifiable net assets 866
Goodwill 605
Total 1,471


7          Status of final audited results

This announcement of final audited results was approved by the Board of Directors on 28 January 2015.

The financial information presented in this announcement has been extracted from the Group’s audited statutory accounts for the year ended 30 September 2014 which will be delivered to the Registrar of Companies following the Company’s Annual General Meeting.

The auditor’s report on these accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain a statement under section 498 of the Companies Act 2006.

Statutory accounts for the year ended 30 September 2013 have been delivered to the registrar of companies and the auditors’ report on these accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain a statement under section 498 of the Companies Act 2006.

The financial information presented in this announcement of final audited results does not constitute the Group’s statutory accounts for the year ended 30 September 2014.


8          Annual General Meeting

The Annual General Meeting of the Company will be held at 10:00am on Thursday 26 March 2015 at 25 Christopher Street, London, EC2A 2BS.


9          Annual report and accounts

Copies of the 2014 audited accounts will be available today on the Company’s website ( for the purposes of AIM rule 26 and will be posted to shareholders in due course.