Companies: AUK   

Merged architectural firm Aukett Fitzroy Robinson has delighted followers this year, as the fruit of its 2005 union is a near fourfold growth in profits.

The reverse takeover by profitable urban architects Fitzroy Robinson, whose small size was a doubt in the minds of some clients, of listed but loss-making out-of-town rival Aukett created a larger, more financially sound group that could win more and larger contracts. Chief executive Nicholas Thompson boasted that like-for-like sales in 2006 ‘improved 30% on the previous year – so the merger has been proved right’.

Total sales in fact rose from £12.61m to £16.28m for the year to September and a £786,000 pre-tax profit arrived almost exclusively in the second half after one-off costs in the first. A more aggressive approach cut debt back by £1.2m to just £180,000.

A buoyant market for commercial architectural services plays into Aukett’s hands (the UK construction market is growing at 11%). Thompson pointed to strong positions in the office sector and even more so in the emerging hotels sector, where the group has a large, experienced team. ‘City centre hotels look good in the long term and we can transport these skills elsewhere,’ he said.

The group has offices in six countries, including three in the UK, one each in Warsaw, Prague and Moscow, plus joint ventures in Germany and Romania. Of current work, Russia is the group’s largest single area, accounting for $700m (£350m) across eight projects. Elsewhere in the portfolio, there’s £200m from a variety of private clients and £360m from its three top developers.

Recommended in Growth Company Investor as a turnaround last October at 4.88p, the shares have risen over 266% until recent profit-taking. Although investors might want to take profits, Aukett is still growing in a number of significantly expanding markets, with an order book up 30% on last year. House broker JM Finn forecasts a 170% improvement in profits next year to £1.9m for 1.1p earnings. Hold.