Bath Spa architect becomes the latest signature practice to report falling profits, despite growth in US
Grimshaw has become the latest major architectural firm to report a substantial fall in UK profit, according to company accounts lodged at Companies House.
Pre-tax profit for the UK business of Grimshaw fell 58% from £318,398 for 2003 to £131,751 for the year ending 31 October 2004.
Turnover in the same period rose 1.3% from £6,803,679 to £6,898,144.
The profit slowdown follows the revelation that fellow architect Foster and Partners had made a £544,000 loss for the year ending 30 April 2004.
Grimshaw's results would have been worse were it not for a strong performance from its US operations in New York, set up two years ago. From a £258,998 loss in 2003, caused by costs incurred setting up the office, Nicholas Grimshaw and Partners USA recorded a profit of £198,698 for 2004.
This enabled Grimshaw's parent company to record a £329,081 pre-tax profit for the year ending 31 October 2004, despite the poor performance of the firm's UK main business.
Michael Holmes, Grimshaw's financial director, said the firm's profit often changed year on year depending on how the board decided to manage payments on long-term contracts.
He said: "The movement in profit is not unusual. It's quite common for it to fluctuate, depending on the attitude of the board to long-term contracts. What we think is important is that we have a strong balance sheet."
A spokesperson for Grimshaw said: "For the year ended 31 October 2004, the accounts for the Grimshaw group of companies show an increase in profits over the previous year. We consider 2004 to have been a successful year."
The news comes after Bath and North East Somerset council last month approved spending an extra £1.2m on the Bath Spa project, which Grimshaw designed.
Holmes denied that the Bath Spa project had had any impact on the results.
He said: "We still have a team working on Bath Spa but we are getting paid by the client. The scheme has had absolutely no effect on the figures."
The extra £1.2m that Bath council is spending on the spa takes the total funding to more than £50m for a scheme that was originally supposed to cost £13m. The spa is supposed to open in April but this could now be in doubt.
Last year consultant Capita Symonds was appointed to the scheme.