REG - Aukett Swanke Group - Property disposal completion & Corporate update

Aukett SwankeAnnouncement

18/09/2024 07:00

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RNS Number : 5967E  Aukett Swanke Group PLC  18 September 2024

18 September 2024

 

Aukett Swanke Group Plc

("Aukett Swanke", the "Company," "ASG", or, together with its subsidiaries,
the "Group")

Completion of Property Disposal and Corporate Update

 

Aukett Swanke (AIM: AUK), the Smart Buildings and Architecture Group, is
pleased to announce the completion of the sale of The Old Torpedo Factory
freehold and provides a pre-year end corporate update.

The board expects that trading results for the second half of the year to 30
September 2024 will be at a breakeven level and, consequently, the Group will
report a loss for the full year, broadly in line with the loss reported for
the first half.

In response, a cost reduction programme, initially announced in June 2024, has
now been extended, to provide approximately £2 million of annualised Group
savings, up from the originally planned £1 million.

Smart Buildings

The Group is at the relatively early stages of establishing itself as a leader
in the provision of smart buildings services, drawing upon the heritage and
industry connections of the established architecture businesses and by
targeted acquisitions.

Since March 2023 the Group has completed four Smart Buildings related
acquisitions:

·    Torpedo Factory Group

·    ecoDriver

·    Anders + Kern

·    Vanti

Performance of these businesses has been mixed, with Torpedo Factory Group
(incorporating Vanti) operating around breakeven levels, with a strong
performance by Vanti offset by losses in the Stage Technology business. This
business performed at reduced levels following the conclusion of its largest
ever project at the end of the previous year.

The Vanti asset acquisition, completed in March 2024, has both boosted the
Group's smart buildings credentials and added over £2 million of new contract
wins. Vanti now forms the core of the Group's smart buildings offering. We
remain excited by the potential of its Smart Core building operating system in
particular.

ecoDriver provides sensors, meters, and proprietary software to monitor client
sites and help them identify waste energy. The business is growing strongly
from a low base, and as discussed further below has developed some novel
technology to benefit clients and assist in scaling the business.

Anders + Kern, which is a distributor of smart building technologies largely
to audio visual system integrators, has suffered from two major suppliers
being taken over in the past year, with both acquirors having pre-existing
routes to market away from the Group. Accordingly Anders + Kern has
substantially reduced its cost base and is reviewing its product range.

Architecture

The Group's executive architecture business, Veretec, continues to grow
profitably and has added staff to meet demand. However, at our design
business, Aukett Swanke Limited, continuing delays with a number of projects
have prevented it making a positive contribution.

Consequently, the board expects that trading results for the second half of
the year to 30 September 2024 will be at a break even level and the Group will
therefore report a loss for the full year, broadly in line with the loss
reported for the first half.

Property sale and Cost reduction programme

The board has taken action to strengthen the Group's financial position
through both the sale of a freehold property, which has significantly reduced
Group debt, and the implementation of a substantial cost reduction programme.

Property sale

The £2.5 million (plus VAT) sale of The Old Torpedo Factory freehold, first
announced in June 2024, completed on 17 September 2024, with approximately
£1.42 million of the proceeds used to fully repay the outstanding mortgage
and a further approximately £0.23 million used to reduce the outstanding
CBILS-backed loan to c. £0.44 million.

The balance of the consideration will be used to strengthen the Group's
working capital position.

Cost reduction programme

The Group's increased focus on smart buildings requires investment and will
take time to generate meaningful profits. There is therefore a need for the
other parts of the Group to make positive financial contributions.  To the
extent this positive contribution can be improved by taking action to reduce
costs, such action has been and is being taken.

In June 2024, we announced an intention to make annual Group savings of over
£1 million. Three months on, we have identified and largely implemented
approximately £2 million of annualised Group savings across a combination of
staff costs and other matters including the financial impact of reducing debt.

ecoDriver to launch EDDIE the AI Sustainability Engineer

The Group is pleased to announce that its Vanti and ecoDriver businesses are
both exhibiting at the  Smart Buildings Show at ExCeL London on 9-10 October,
with management at both businesses having speaking slots. At the show,
ecoDriver will launch the first generation of EDDIE (ecoDriver Data
Intelligence Engine), an AI engine that will link to the building energy
performance data for each client's sites. Clients can interact with EDDIE via
a straightforward chatbot style interface. This allows them to interpret the
data and to identify and eliminate waste energy in new and more accessible
ways. It also allows ecoDriver to scale revenues without material increases to
its cost base.

 

Nick Clark, Chief Executive of Aukett Swanke, commented:

"The Group has continued to make rapid progress in the second half, with the
first sale of the Smart Core building operating system since the Vanti asset
acquisition, and now the pending launch of ecoDriver's AI product, developed
in house over the first year of ecoDriver's ownership by the Group. EDDIE is
an example of the way that AI can help us bridge the green skills gap,
removing a potential barrier to growth."

"To support this and other initiatives, in particular the continued
development of the Smart Core building operating system, we need the other
parts of the business to be performing well. The annualised cost reductions
are designed to support Group profitability while it develops and acquires the
technologies required to become a global leader in designing, delivering &
operating smart, sustainable buildings & spaces."

 

Contacts

Aukett Swanke Group
Plc
+44 (0) 20 7843 3000

Clive Carver,
Chairman

Nick Clark, Chief
Executive
 

 

Strand Hanson Limited, Financial and Nominated Adviser
                          +44 (0) 20 7409 3494

Richard Johnson, James
Bellman

 

Zeus Capital Limited,
Broker
+44 (0) 20 3829 5000

Simon Johnson, Louisa Waddell

 

About Aukett Swanke Group plc

Aukett Swanke Group has a strong foundation in architectural services and is
on a transformative journey to become a London-listed provider of Smart
Buildings and related services. ASG is uniquely positioned to ensure the
technical systems that run modern premises are designed as an integral part of
the structure, from the outset.

For more information go to https://www.aukettswankeplc.com
(https://www.aukettswankeplc.com)

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.

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