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.

Interestingly its been getting very difficult to buy in any volume last day or so. No idea why they should be restricting volume buys when they make it appear the SP is weak........ ??

Results tomorrow.

Looks like more skeletons found in those cupboards, which was always the downside. A second profits warning like this in a row is a shocker, and means SMC will now become in the realms of sayings including the words "touch and bargepole and not" for a while.

Shame, but thats the way it goes, downside wins today.

I won't say I told you so (no one likes a smart ass) but, as I wrote earlier this month: "...But I think to invest now, without any official figures or results to go on, would be a little foolhardy." Anyone who bought big between profit warnings may now have some time to wait for confidence - and share price - to be restored. There was a time when I, too, almost got caught up in the SMC hype and its reckless buying spree. I wish I always had such foresight!

"NJP - 22 Mar'07 - 12:19 - 4842 of 4842


Their 'accounting problems' haven't come about through the usual route of shoring up years of underperformance by cooking the books. There aren't any fictitious assets or 'black holes' here. It's actually very easy to see what's happened. They did a load of acquisitions last year before their new FD had built his team and established his controls.

Not a lot to go wrong here. Team has been established and taking central control over the financial ops of a group of architectural practices is straightforward stuff. There is, however, one big number (WIP) which involves a lot of subjectivity and, if you get it wrong (or, as in this case, have a load of different firms with differing approaches and a variable calibre of accountants) you're faced with potentially a large 'one-off' adjustment to get everything into line. That's exactly what's happened here.

In addition, we've had E&Y poring over the books to mastermind this exercise. Now, with their reputation on the line, they're going to make sure that there aren't any other large skeletons in the cupboards. We've also had an additional statement from them that they endorse SMC's strategy of growth by acquisition.

And, furthermore, we've had significant director buying post the announcement some 30% higher than here. Plus, of course, the recent tie-up with Laing.

I'm really not sure what extra assurance investors need. "


***********************************************************
Not having a dig - cos I almost bought in on the hype - fortunately (for a change), I could not free up funds.

Just goes to show how wrong we can be - cos it looked so good

Indeed it did potentially look good, however, this is why its wise in these circumstances to just take a "speculative punt" ahead of the news, and do not buy in any substance until you can read the figures, this stategy proved right for me, and many others in this instance.

To the future, well, is there one for SMC now short term ? Going to take years to recover from this new episode.

A third profit warning and yet another new sp low. Could this finally be a buying opp or is it even more reason to steer clear? Surely there can't be room for any more skeletons in Sir Rodders' closet, can there??

Er, that's a graph for SMG, innit? The SMC one looks even worse.

On another, slightly more upbeat note, I see that along with swinging the axe at some of its typically lavish architectural businesses, SMC's error prone ex-boss Stewart McColl has finally "resigned". Must be a step in the right direction, mustn't it?

Sorry guys this is the chart for SMC.

Thanks for the chart, hlyeo98, but I don't think anyone still holds these any more, do they?
Funny how it goes - almost daily updates of the wonderful, not-so-boring SMC when the sp's taking off but, when it crashes back down to earth (three profit warnings in six months and continuing carnage on the boardroom carpet), nary a peep.
A lesson for all BB investors - don't believe the posters' hype and definitely DYOR.

Hmm. Tumbleweeds.

Come out, come out, wherever you are !!?!

Hang on, I thought I saw some movement under those rocks... C'mon, who is it??

C'mon out, guys!!
PP? Schiff?? Shameless??? Augustman????


Where are ya?!?!?

C'mon fellas, let's see ya!!!!!!
Come in Capa, Max Damage, Goldfinger...

Did I hear a rustling in the bushes? Who is it?!?!?
Micky468??? Paperbag???
Or is it.... Squidd????
Where are you all? Don't tell me you all sold up without saying anything! Hmm, and you were all so keen to tell us when you were topping up etc etc etc.

32p!! No wonder everyone's become so bashful and embarrassed.
WHERE ARE U ALL???
Where's OhBugger??? Where's Affc21???
Don't tell me you guys have gone, too?!?
And without so much as a "see ya later", eh?

Not having much joy paulj, I've just had a little dabble at 32p, so should be 20p by the end of the week, lol.