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.

Added a few more of these at 116p this morning. I expect a robust last week in December and also the same in the first week of january.

cheers GF.

I expect you to be right

all the best

capa

Looks to be a sure fire winner for 2006.

cheers GF.

Should be a cracking 2006 for this one. Just watch it go.

cheers GF.

Agreed goldfinger, and a good start to the year today

all the best

capa

Suprised we havent got more in this one. Still derd cheap on forward earnings estimates.

cheers GF.

Im told by a reliable source, news on the acquisition front not far away.

cheers GF.

Not much movement in these over the last few days but its still very cheap and further acquisitions should push the SP upwards.

Heres the house brokers forecasts............

Forecasts
Year Ending
31-Dec-05 Sales 13.34 Pre Tax 2.97 EPS 7.18p P/E 15.5 Growth n/a
31-Dec-06 Sales 20.95 Pre Tax 5.00 EPS10.08p P/E 11.1 Growth+40%

cheers GF.

BUY BUY BUY, before it really takes off. Remember a moving P/E of only just under 11, derd cheap for a company so well run as this one.

cheers GF.

Nice to see this one move up this afternoon.

cheers GF.

Just the two of us witnessing the move North I reckon goldfinger

New high this morning

all the best

capa

Superb Capa. These boring stocks are money makers......... NICE.

cheers GF.

Another high today.

Cheers GF.

New high again this morning and still on a rolling P/E of only just over 11, derd cheap.

cheers GF.

This ones on a charge again.

cheers GF.

Plenty of visible future earnings here. EPS forecasts look very conservative - looks set to double from here over the next year and a half or less. Stock up now and reap the rewards.

If we expect future EPS of say 13 which is very achievable then on a P/E of 15 the SP would be around 195, on 18 - 234. These are sector P/E's but for this rate of growth you could well pay more then that say 20 - 25. Go figure.

Talk of a positive trading statement imminent on other boards.

cheers GF.

Yes hedgehunter - I know. ;-)

Just bought into BNH - set up like SMC but only in the insurance sector. Cheap - increased EPS forecast since this morning to just over 13p and sector P/E is 16.

Noted. WUW. Cheers.

cheers GF.