Executive chairman of Britain's only listed architect blames change in fortune on economic slowdown.
Aukett EUROPE, the country's only listed architect, has cut its UK workforce by more than 20% in the past year.

Executive chairman Andrew Lett said this week that staff numbers had fallen to 200 compared with 260 last January. Aukett has another 200 employees in Europe. The reduction has been achieved through natural wastage and voluntary redundancies.

The job cuts were forced on the group after pre-tax profit fell 55% to £920,000 for the year to 30 September 2001. Turnover rose 3% to £19.4m in the same period.

Lett blamed the poor results primarily on the economic slowdown in the UK, which has prompted clients to cancel or delay major building projects. He said: "The IT bubble burst this time last year and led on to a recessionary trend in the USA. Obviously it has been a tough year for us.

"The tough business climate was not improved by the events of 11 September. Confidence has remained low."

Aukett's UK profit more than halved to about £600,000 for the year to 30 September 2001. Lett said the economic slowdown had meant that the firm had been unable to recover the cost of expansion plans in the UK in 1999 and 2000, which had assumed increased workloads.

Lett said the UK operation's poor performance had been partially offset by the growing strength of its European business.

He said: "We expanded into Europe a while back and it is good that the strategy is starting to pay off. The share of profit generated outside the UK increased to 40%." But Aukett's European profit still fell to about £300,000 last year.

The firm's share price has suffered in the last year and earlier this week it was trading at 6p a share. Lett said that despite the low price and limited interest from investors, there were no plans to take the group private. "The share price has been drifting around for a while," he said.

Lett said that, although the tough trading conditions were likely to continue for some time, Aukett's order book for later this year appeared stronger. He said: "Everybody is looking to see when this confidence factor will start to return to the industry."

Publicly exposed: Aukett’s troubled history

After listing in 1988, Aukett initially performed well, but when profitability started falling in 1991, it was the start of a slide that reached its nadir with losses of £3.87m in 1992 and £2.3m in 1993. The share price was rarely above 10p. The firm posted a modest profit in 1994 after cutting costs and 60 jobs, but chairman Michael Aukett quit in 1995, saying he wanted to escape the pressures of running a small listed company. Aukett benefited from the construction recovery, and its profit peaked at £2m in 2000. But a profit warning last March signalled another bad year for the group. Its share price stood at 6p this week.