Smc Share Discussion Threads

[scotswhaehae] 07/6/2007 13:15

...its not easy to be sure but 100000 or 110000 of that 150000 you mention may have been buys...

dyor of course...

[paulcaine2003a] 07/6/2007 11:35

Im just glad that its not down again earlydoors today. Was some big buts last night with 100k going through followed by a collective 50k after close.

[scotswhaehae] 07/6/2007 10:23

Just a little bit of buying interest...

Would be interesting to see 45p plus for starters!

[paulcaine2003a] 06/6/2007 14:51

Masurenguy - Maybe I will be proved wrong but given that they have a full order book, were profitable last year, have bought companies which on paper appeared to be profitable (although I accept that these are probably the core of the problems at the moment)and are in a booming industry, they should be able to achieve somewhere around there. But then again I have no evidence of this and its just my opinion. We shall hopefully see on tuesday.

[masurenguy] 06/6/2007 14:16

"paulcaine2003a - 6 Jun'07 - 11:41 - 7204 of 7208: This is one of the largest architects in the uk, 10p would value them at around 5m. They would be snapped up straight away. other architects or building companies are probably looking at them already. Profit was expected to be 8.05m this year. £5m is easily achievable even with a warning".

Neither size or order books are magic formulas. You can't assume that "£5m is easily achievable even with a warning". The management have still not clarified the companys financial position other than make some vague remark about the banks being supportive. That's about as reliable as a Chairman of a Football Club issuing a statement publicly supporting the Team Manager after a series of defeats !

Fact is that at the moment nobody outside the Board (and have they come to a conclusion yet?) knows what the current financial position is and whether they can finance the forward orders that they have announced. Maybe next weeks AGM might provide some further information.

[latifs100] 06/6/2007 12:20

more falls on agm 12. june.. waiting...

[paulcaine2003a] 06/6/2007 12:14

Yeah you cant predict profits especially in construction but at least they are winning work and the market is booming so therefore shouldnt see a downwards trend. I think the issue here is the acquisitions and thats it. Its been a mess and they havent bought shrewdly. Thats put us n the position of where we are now.

[njp] 06/6/2007 12:02

slong

A bit more than £10m debt, I'm afraid. Last broker projections (with the £8m PTP) projected debt of over £17m by year end. Need to add that to MCAP to get EV.

Can't see how they can avoid issuing more shares, though hopefully after guiding (realistically this time) on profits.

[slong] 06/6/2007 11:50

At 10p 5m would buy you the company, although you would have to pay more than that as the share price would go up with the news, lets call it 10m, but you also get the companies debt, another 10m, so it actually costs 20m.

The future profits are not known, this is the whole problem, it appears that these targets were set with incorrect valuation methods being used, therfore we dont know if the company will, or can make 8m a year.

Assume everything is ok and it makes 5m this year and 8m the following year, based on a pe of 10, the company would be worth 72p per share (2007) and 115p (2008), that is the upside. But what if the debt is too high to manage, and they have to sell off the better practices, and they cant produce that level of profits ?????

Thats the gamble.

I am out of this for the record, got burnt on the second warning but sold out before the third. I am an interested on looker, I still believe the company could be worth investing in, but I shall wait to see if they release the full extent of the problems, and get the management team in order first.

[paulcaine2003a] 06/6/2007 11:41

This is one of the largest architects in the uk, 10p would value them at around 5m. They would be snapped up straight away. other architects or building companies are probably looking at them already.

Profit was expected to be 8.05m this year. £5m is easily achievable even with a warning.

[slong] 06/6/2007 11:39

The potential profits are there, not sure about 5m this year, they said that profits would be sunstantially hit following the review, they surely must be in breach of the banking covenants, and with a large debt pile that is not good news.

This is nothing but a gamble from this position, with decent news this could get back to the £1m mark over the next couple of years, it could also go down to the 10p mark or lower on bad news, they have to reduce debt somehow, maybe they will issue more shares, who knows.

[paulcaine2003a] 06/6/2007 11:04

Well, debt aside, this company can still potentially make around 5-6m profit this year. Apparently it has a full order book and the work is constant, therefore I cant understand why the share price is so low. I understand that debt is a key feature here but surely this is too low.

Just wish one of the directors would buy!

[kalmar] 06/6/2007 10:55

have to agree...I know this is an iliquid stock but talk about a hammering of the share price ..after announcement goes back to 86..and starting to look for 100 ...and now in the 30's...I hope my patience is rewarded...we need news fast...as once again more uncertainity just means the share price can continue to drift..as ridiculous as it is...18m market cap!!

[paulcaine2003a] 06/6/2007 10:48

I was in on this through after they claimed they won work on 0.8bn of projects. I can't see how they can make a statement like that and then fall well over half within two weeks due to a profit warning. Im holding long term and just hope they can turn this round. There is potential there but how long it takes for this to shine through is anyones guess.

[masurenguy] 05/6/2007 13:28

"NJP - 2 Jun'07 - 12:37 - 7189 of 7196: One other point. I have to say that I think McColl has been badly served by his finance directors. The old one seems to have been in his pocket and the new one seems to have been inexperienced - at least as regards running an architectural practice - got swamped by the combination of inheriting a weak finance function and McColl's acquiring a swathe of new businesses, and failed to take control of the situation or point up the fact that overheads were getting out of control. Allowing expectations to be built up to the level of £13m profits and ending up with £3m to £5m puts him in justifiable jeopardy of losing his job".

It will be interesting to see if there is any comment relating to Boardmans performance as FD at next weeks AGM. He has been there for 14 months now and while he inherited most of the mess, he'd had plenty of time to have gotten a handle on it and to have identified all of the major problems.

What we don't know is the dynamic of his relationship with McColl and subsequently with Walker. Did the FD warn McColl last year that there were inherent problems and if he did was McColl unresponsive at that time ? Questions relating to this issue could be raised at the AGM !

[madascake] 05/6/2007 12:35

NJP agree with sentiment that FD has to take a lot of blame.

Overheads are only too high if revenue is too low. Anyone can measure overhead costs so I suspect that issue is around overstating revenue (progress) and/or understating costs to complete on long term contracts.

Hopefully we will find out next week!

[paulcaine2003a] 05/6/2007 09:54

Following that, as and when.

[masurenguy] 05/6/2007 08:50

AGM is next Tuesday.

[anusol] 05/6/2007 08:30

anyone know when we might get more news from SMC?

[johne1] 03/6/2007 00:42

quote
they are all paying themselves too much!
unquote

Would that be the case, if the companies were stand alone?

This is perhaps a learning curve for a lot of folk. I.e. why amalgamate businesses for no gain? - There are lots of small, medium, large size architects practices - some are successful - some are not. These types of companies can grow organically.

Also, as companies merge, overheads increase somewhat. Head offices become bigger and more costly. Could the risk of failure increase, due to that reason alone?

The story is still interesting to watch, in my opinion.

[masurenguy] 03/6/2007 00:30

01 June 2007
SMC Group - The colourful tie departs!
Author: IC

Following the recent trading statement SMC Group came out with an update to shareholders this week with findings of the recent internal business review.
The review provided a series of recommendations to improve the profitability of the Group including the way the Group approaches the winning and execution of projects, management structure, resourcing and the cost base of some business units. It actually sounds like the whole business needs fixing!

It reported that whilst some (very few I suspect!) businesses within the Group continue to trade well, others have overheads which are out of line with revised revenue projections. So there is a lot of dead wood and they are all paying themselves too much!

Here comes the big one!
Following the Board meeting (as I said in my earlier blog, I thought it was going to be an interesting meeting) Stewart McColl the founder (and colourful tie man) has resigned and left the Group with immediate effect! Gordon Watson (Stewart's right hand man) has also stepped down from the Board with immediate effect but will continue working in a business development role in the Company

The bankers are apparently supportive but they always say that to begin with!
Sir Rodney Walker, the new Executive Chairman, appears to be getting stuck in, but given the speed with which SMC has been cobbled together he could have a tough job ahead. The shares were initially up c9% on the news so clearly there are some out there who welcome the news of Mr McColl's departure.

[siwel100] 02/6/2007 14:19

Aside from the other variables we now have a major question mark over McColls very large holding.

[njp] 02/6/2007 12:37

One other point. I have to say that I think McColl has been badly served by his finance directors. The old one seems to have been in his pocket and the new one seems to have been inexperienced - at least as regards running an architectural practice - got swamped by the combination of inheriting a weak finance function and McColl's acquiring a swathe of new businesses, and failed to take control of the situation or point up the fact that overheads were getting out of control. Allowing expectations to be built up to the level of £13m profits and ending up with £3m to £5m puts him in justifiable jeopardy of losing his job.