London Spire architect says bad debts and Brexit to blame for widening losses
A problem job in the Middle East, falling market confidence after Brexit and the weakness of the pound all helped widen losses at the international arm of HOK last year.
In its accounts for the year to 30 December 2016, HOK International remained in the red for the third successive year with its pre-tax loss for the period jumping from £463,000 to £2.3m. Turnover also slumped, down 13% to £19.5m.
It added: “The company’s financial performance in 2016 was adversely impacted by one Middle Eastern project and market sentiment post Brexit and…losses in foreign exchange.”
Finance director Andrew Childs said it was hit by a bad debt charge of £658,000 for a scheme in the Middle East and a second in Kazakhstan. The year before it had been caught by a bad debt charge of £225,000 for a scheme in Turkey.
It also added that it racked up losses of £471,000 on foreign exchange losses – up from £180,000 in 2015.
HOK, which recently recruited Heatherwick Studio project leader Andrew McMullan as a vice president at its London office, said income from its architecture business reamained flat at £17.5m up but interiors, consulting and planning revenue all went down with planning income nosediving 112%. “The decrease in turnover in planning came from the Middle Eastern project on which it was considered there was sufficient uncertainty [at the year end] to recognise income.”
Workloads in the UK, where the firm is carrying out work to revamp the Old Bailey and is also behind a 67-storey tower in Canary Wharf called the London Spire (pictured), dropped by 20% to £8.6m. During the year, the firm completed work on the Francis Crick Institute in north London.
The number of staff at the business fell by 11% to 146 while the salary of the highest paid director, who is not named, went up 8% to £293,000.