By David Rogers for BD
The full impact of the recession on signature practices began to emerge this week with profits at Zaha Hadid Architects tumbling by two-thirds.
In the latest set of accounts filed at Companies House, the world’s most famous female architect saw the amount of money her firm makes shredded by 69% from just over £5 million in 2008 to £1.6 million in the year to March 2009.
Underlining how tough the period has been for Hadid, the firm’s margins — the share of a company’s turnover that is profit — fell from 19% in 2008 to just over 5%.
In a statement, the firm blamed the fall on restrictions on credit, which have had an impact on the wider construction industry.
Despite the falls, the salary of the highest-paid director, who is not named, jumped by half to £290,000.
Turnover during the period also increased, by 11% to £29 million, with the firm winning work including the Vienna library and a competition to design a new headquarters of the Antwerp Port Authority in Belgium.
The number of architects employed at the practice rose 19% to 262, which it said was a reflection of its success in winning work.
Since last March, the business has picked up several prized jobs, including a deal to design Cairo Expo City, and a second scheme in Egypt called the Cairo Stone Towers, which features a five-star hotel with serviced apartments.
A spokesman for Zaha Hadid Architects told BD: “The numbers demonstrate that the company continues to grow, driven by an increasing workload. It is expected there will be significant other achievements to report in the current year.”
One rival said he wasn’t surprised that Hadid was continuing to recruit instead of cutting jobs.
“It’s the only firm that has bucked the trend [on recruiting] all along,” he said.
“You don’t grow unless you are confident about forecasts. A lot of people want a Zaha building because of her, and UK designers are still highly rated around the world because of the likes of her and Foster.”
Elsewhere, the latest accounts filed for David Adjaye’s firm, Adjaye Associates, revealed that losses had increased nearly tenfold to £526,000.
Last February, Adjaye brought in insolvency experts to rescue his firm from the brink of financial collapse. It entered into a company voluntary arrangement (CVA) with its creditors, under which it would make payments of £132,000 over five years on a monthly basis.
Adjaye has also pumped £500,000 of his own money into the business, although the accounts reveal the firm had a shareholders’ deficit of £440,000.
At the time of the CVA, NatWest Bank was owed £500,000. In addition, the accounts, which cover the year to March 2009, revealed that Adjaye himself “has given a personal guarantee in respect of the company’s bank borrowings limited to £175,000”.
Lane Bednash, a partner at insolvency practitioner Valentine & Co, said the firm was carrying out an annual review of the CVA. He added: “The firm’s payments have all come in on time. They haven’t missed a payment.”
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