Share price of AIM-listed architect group continues to drop as founder Stewart McColl resigns
Troubled architecture group SMC may be forced to close some of its practices after a highly critical strategic review led to the resignation of Stewart McColl, the founder and deputy executive chairman.
McColl resigned from the board and the company last Friday with immediate effect. He retains a non-controlling 80% shareholding in the business, which is listed on the alternative investment market. Gordon Watson, the business development director who has worked with McColl since 1978, resigned from the board but remains with the group.
The resignations follow an internal inquiry into SMC’s underperformance, launched by
Sir Rodney Walker, the executive chairman. Last year profit dropped 4% to £2.7m, whereas turnover rose 131% to £31m.
McColl, 61, who was chief executive of the firm until February, insisted that he was not retiring but said he could not give details about his future plans.
The board said its initial recommendations included reducing the cost base of
some businesses. A spokesperson said this could involve the closure or merging of some practices.
Sources speculated that McColl’s resignation, together with a structural overhaul, would lead to a change of name.
SMC’s highest profile practice is Alsop Architects, which it acquired in 2005. Will Alsop, the founder, said McColl’s resignation was unexpected. He said: “I had my suspicions but it was a bit of a shock. Someone had to go and that was Stuart.”
He added: “The only worry is that the SMC Group is perceived to be weak in the market and that might affect us, but we’re dealing with that.”
SMC last week issued a further profit warning for the six months to June 2007. The price fell this week to 42.5p. It has now fallen more than 77% since January.
SMC’s turbulent times
1996 Founded by Stewart McColl
2006 Floats on alternative investment market
January 2007 Issues profit warning on its full-year results
February 2007 Sir Rodney Walker becomes executive chairman, McColl steps down as chief executive to become deputy chairman.
April 2007 Profit for 2006 of £2.7m, a 4% drop.
May 2007 Further profit warning ahead of interim results
June 2007 Resignation of Stewart McColl
For more on SMC go to www.building.co.uk/archive