Profit at Building Design Partnership (BDP), one of the UK’s largest architectural practices, has fallen a third because of changes to an employee payment scheme.
The company reported a pre-tax profit of £1.6m for the year ending June 2006, 33% less than the £2.4m it made in the corresponding period last year. However, turnover at the firm went up 15% to £79.3m, compared with £69m the previous year. The directors’ report identified profitability and working capital as significant financial risks.
Peter Drummond, the chief executive, said the fall in profit was related to the profit sharing scheme and pension issues. He said that the firm was delivering on its five-year plan, now in its second year. “The slip in figures is down to a revised profit-sharing arrangement and increased pension contributions,” he said. “The delay with PFI hospitals has not had a major impact on us. We are on target for increasing turnover. Next year we are expecting about £87m.”
The percentage of turnover from European projects dropped slightly to 5% for the year ending June 2006, compared with 8% for the same period last year. Most of BDP’s turnover was generated from the UK, which increased 3%, to 93% for 2006, compared with 90% the previous year. The percentage of work from the rest of the world remained at 2%.
Drummond said this was because domestic work had developed at a greater rate than international work. However, two years ago Nick Terry, the former chairman, predicted that most of the firm’s growth would be outside the UK.
The slippage is down to a profit sharing scheme and pensions
Peter Drummond, BDP boss
Total wages for directors jumped 315% to £5.4m for the year ending June 2006, compared with £1.3m the previous year. The practice had 38 directors in 2006, and 36 the previous year.
The highest paid director received £187,568, compared with £107,504 for the same period the previous year – a rise of 74%.
BDP is working on a 7,500-unit regeneration development of Brent Cross town centre in north-west London and has just built two grandstands at Aintree racecourse, Merseyside.
The firm recruited 184 members of staff from June 2005-2006, pushing the total at the practice to 1,073. It donated £35,881 to charity for the year ending June 2006, up from £4,994 for the same period last year.
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