Listed architect Archial lost two-thirds of its market value last week after it admitted seeking help from its banks to pay its tax bill
Its share price fell from 4.5p to 1.5p after it issued a profit warning saying that its numbers for 2010 would be “significantly below” market expectations. The firm blamed unnamed cancelled projects and government spending cuts.
By Tuesday lunchtime the share price had edged back up to 2p.
In a statement Archial said: “To reflect these lower anticipated trading volumes, the group has now commenced a further programme of cost reductions expected to amount to an annualised saving of £4.25m.”
The tone was in stark contrast to a trading update following the election on 27 May, when Archial referred to its expanding overseas business.
It had said: “The increase of the international portion of the pipeline since the end of Q1 2010 has arisen from a higher volume of opportunities being presented and is not a reflection of a reduction in UK opportunities.”
The firm, formerly known as SMC, bought Will Alsop’s practice in 2006 as part of a flurry of acquisitions that year. It was criticised by some in the City for doing too many deals and
was forced to issue profit warnings in January and June of 2007.
It rebranded its overseas arm Alsop Sparch in March, although Alsop himself left the firm to join RMJM last October.