In line with my thoughts of recent, stay well away from momentum stocks at the moment. Go into boring but stocks that can be seen to generate an increase in earnings. Ive been with this a few weeks and think a few may have picked up on that. Now breaking out and looking for further earnings enhancing Acquisitions.

Its a top notch architect company and not over exposed to the housing market. Has top management and is derd cheap on fundies, more to come on that . Any views appreciated, good or bad but I feel we could be onto a winner here.

Just look at this report from a tip sheet, all things checked out and OK........

Lifted this from another board..........

SMC stacks up - STRONG BUY
Companies: SMC
27/09/2005

Architecture and design group SMC, which works on major office, retail and residential projects in the UK, Eire and Europe, joined AIM via a 4.6 million placing in June with ambitions to consolidate this fragmented industry. Founder and chief executive Stewart McColl hopes that by creating a larger outfit, his company will be able to win bigger projects producing higher margins.

McColl founded SMC in 1996 and has delivered appetising organic growth in recent years by offering national coverage. This has allowed the group access to substantial and more profitable construction projects across a range of sectors and locations. Clients now include British Land, Canary Wharf Group, Morgan Stanley and Wm Morrison, amongst others.

We have already got the 100 million projects, explains McColl, but there is another step-change in scale to come that will allow us access to projects worth 200 million, 300 million, 400 million and even 500 million. Increased scale pays off because larger projects are higher margin, with higher fee levels and longer timescales, helping SMC plan staff requirements more accurately.

Last November, ahead of the AIM float, SMC appointed ex-Wembley stalwart Sir Rodney Walker, who has brought recent AIM success stories like Goals Soccer Centres and Spice Holdings to market, as non-executive chairman. His presence and contacts have boosted the groups cachet and, following the AIM listing, McColl is also keen to boost scale through acquisitions.

Shortly after the float, SMC completed the two acquisitions mooted in the prospectus Corstorphine & Wright Hills Erwin, a Manchester
and Lancaster-based commercial architecture specialist, and Philip Lees & Associates, an outfit based in Leeds city centre, with a bumper proportion of revenues wrought from repeat business.

We are one of the few consolidators that I know of in this market, adds McColl, and now that we are on AIM, we are after acquisitions that are far more significant in size.

SMC recently cheered followers with an update on new deals. Among a plethora of 100 million-plus projects was work on new headquarters for Deeley Properties in Coventry, Sports Centres for Warwick County Council as well as developments for Pillar Properties and Canary Wharf.

Overseas work included manufacturing and office units in Slovenia, as well as a 290-bed InterContinental Hotel in Pakistan. There was also news of planning consent for a 50 million British Land office campus at Coventry.

2004 was exceedingly strong for SMC, with turnover lifted by 43 per cent to 8.1 million and pre-tax profits sparking up from 100,000 to 1.1 million. Gross margins were a healthy 50 per cent.

More recently, SMC unveiled extremely strong maiden interims to June, sending the shares sharply higher to 70.5p. These revealed a 255 per cent profits jump to 1.1 million on a 47 per cent leap in sales to 5.4 million. McColl was particularly pleased with the 260 per cent vault in earnings per share and a 140 per cent surge at the EBITDA level to 1.45 million, especially since we only had 20 days worth of revenues from the two acquisitions completed at float in the numbers.

He says subsidiaries are already enjoying larger scale project wins as part of the larger AIM group. 'We are looking at a few businesses that we might acquire, and as the business grows bigger, we'll be more equipped to handle PPP and PFI projects'.

Analysts envisage further profits improvement this year to 2.9 million, with sales climbing to 12.8 million. On those numbers, earnings of 7.1p leave the stock trading on an undemanding multiple of 9.9. We believe SMC offers high earnings visibility as well as tasty levels of repeat business, and we are strong buyers.ENDS.

Worth doing your own research if you are interested.


DYOR

cheers GF.

down about 30% from its high just over a few weeks ago

Not a suprise really after the rise its has produced a great opportunity to top up at a price I didn't think we'd see

Im still thinking we may get them lower shameless be very carefull here as we might see a bounce and then another fall. Best of luck, we need it.

Could do goldfinger, if it falls back to a historic PER of times 15, around the 105p level, I'll be filling my boots :)

So will I.

gf, some weeks ago i said keep an eye on PRM that news flow would be starting soon.

Cheers 049.

Many thanks.............. GF.

A nice littlle bolt on here.....

SMC Group Plc
30 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 Charter
Consultant Architects ('Charter'), an architecture and design company with
offices 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 with
the acquisition of Charter, a business that was introduced to us by one of our
operating companies which already held Charter in high esteem. We look forward
to seeing our various teams collaborating with them to bring considerable
benefits to our clients and our shareholders.'


Chris Littlemore, Chief Executive of Charter, said, 'We believe that the
relationship with SMC is a fantastic opportunity, will enhance our collective
ability to deliver projects much more efficiently by way of sharing skills,
resource, technology and geographical coverage'.


For further information contact:

SMC Group Plc
Stewart McColl 020 7495 5335

Main tip for SCSW this weekend.

Results due 30th August.

I am awaiting in anticipation !

So am I. Fingers crossed we should have some good ones.

What figures are you expecting goldfinger ?

Much much further to go here. Trades on a lowly prospective P/E of only 12.5 (2006) dropping to 11.7 the following year to end of december. PEG of only 0.2 to 31st december 2006.

THIS IS A STEAL.

Excelent news this morning............

SMC wins 5 mln stg 'Building Schools for Future' contract
AFX


LONDON (AFX) - SMC Group PLC, the architects, said it has been appointed to The Miller Consortium, which has been selected by Leicester City Council as the preferred bidder for the city's 235 mln stg 'Building Schools for the Future' scheme.

SMC said the contract involves work on 15 schools over a period of six years and is worth around 5 mln stg in stage fees for the company.

Work is due to start in 2007 at the four schools in phase one of the programme, while the remaining 11 schools will be delivered in a further three phases over the following six years.



newsdesk@afxnews.com

ak

Latest broker update..........http://www.equitygrowth.co.uk/reports/EGRSMCGroup-07Sept06.pdf

Another apparantly well thought out acquisition(s) swoop by SMC establishing SMC Scotland - This really does appear to be a well run and structured business that is on the way to achieving its mid / long term goals. Broker target price of 1.79 seems in sight again.

Yup excelent news. I said this one was a steal a few weeks back. Those Broker figures look very conservative to me.

Agree with you there GF...........one only has to go on the website to be impressed by the quality and depth of this organisation......also just had the latest financial communication as a shareholder........written in a very open style IMHO. Interesting to look back at your post of nearly exactly a year ago and SMc's vision for future growth...12 months on seems to be progressing nicely. What is your view on shareprice growth potential / timescales????

Regards

AUGUSTMAN

Hi AM,

I think the Brokers target will be beaten in the short term and Im now awaiting the inevitable upgrade from the house broker and tip sheets.

Lets see what they have to say.

Cheers GF.

Hardmans are very quick out of the blocks AM......

Update from Hardman & Co :

2006E Sales 34.7m Adj eps 11.0p
2007E Sales 55.4m Adj eps 17.8p

Their thoughts on the gearing / equity fundraising issue :

Initially the five acquisitions are to be funded through SMCs current bankers, the Bank of Scotland. In our note of 31 August we highlighted that at the half year SMCs gearing level was 77% and that this appeared on the high side. Under our then forecasts we assumed a full year 2006 gearing ratio of 64% - the company itself has stated that it has a target gearing ratio of 50%.

Following this latest spending spree SMCs gearing level will be close to 85%. Interest cover at the end of the 2006 financial year, is however, estimated to be a healthy 9.0x. We suggest, however, that given SMCs stated gearing target of 50% and the likelihood that the company will pursue further acquisitions in the future, there is a high chance that SMC will seek to raise further equity capital in order to fund its continued expansion.

We estimate that in order for SMC to return its gearing ratio to a level at which both itself and its bankers will be comfortable, and to allow some flexibility for further growth, that SMC will need to raise in the order of 6.0m to 7.0m via en equity issue.

At SMCs current share price of 152p the company would need to issue a maximum
additional 4.8m shares and we have assumed that this is the case in our financial forecasts.

And to conclude :

Whether these acquisitions are ultimately debt or equity funded our valuation range for SMC is considerably greater than the current share price of 152p per share. We believe that a value of 230p per share is fair.
NICE.

excellent post GF thanks

AM