Strong performance in domestic market ‘unlikely to continue,’ practice says
Broadway Malyan has reported a 4.7% drop in turnover across its global operations in its just-filed accounts for the year to April 30.
The practice – which recently secured planning permission to redevelop the former headquarters of the Birds Eye frozen food empire in Surrey – said pre-tax profit was down 29% from £2.4m to £1.7m.
Despite dropping to £48.2m against £50.6m the year before, Broadway Malyan’s overall turnover figure masked a small upturn in UK revenue – at £21.5m – and a 25.5% upturn in European revenue to £7.7m.
But director Ian Apsley cautioned that the business anticipated its relatively strong UK performance was “unlikely to continue” and that market demand was expected to reduce in the year ahead.
Broadway Malyan’s UK and Europe figures were counterbalanced by a 9.4% drop in turnover from the Middle East and Asia and a 42.9% plunge in revenue from the rest of the world.
The firm said the reduction in Middle East and Asia turnover was largely due to the completion of big projects that had not been replaced with schemes of similar size in the pipeline. It said the “rest of the world” drop was the result of a reduction in demand from developing countries, attributed to lower oil-related revenues, and a drop off in work in South America.
Apsley (pictured) said the first quarter of 2017-18 had been “very difficult” and that “in common with many of our industry peers, the trading environment, particularly in the UK, has been challenging”.
He added that the business had also found the conversion of leads into live projects had “significantly extended”, while “several projects” had been put on hold.
“To mitigate the slower sales, the directors made some tough decisions to control costs and cash, and to focus on building a stronger project pipeline,” he said.
The firm also booked a £203,000 exceptional item which it said “relates to an onerous contract for a mixed-use development which was entered into during the last recession”.
Apsley added: “These actions were successful in delivering improvements to profitability through the second half-year, and although the overall result for the year was weaker than in 2016-19, the directors are satisfied the actions taken significantly improved the overall outcome.”
Apsley said the last two quarters of 2017-18 had been “significantly stronger” than the first half of the year, meaning the overall results reflected a “really robust performance in the face of what has been an incredibly uncertain period for everyone in our sector”.
According to the Broadway Malyan’s accounts, the firm had an average of 495 staff on its books in 2017-18 – broadly the same as the previous year.
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