The fourth-largest architecture practice in the AJ100 posted a pre-tax loss of £1.78 million in the year to 31 March 2023, according to financial accounts published today – the third year in a row the company has been in the red.
However the practice, which declared a loss of £960,000 in the previous financial year, saw revenue grow by £6.1 million to £49.9 million. That was 14 per cent higher than the £43.8 million reported in the year to 31 March 2022. Turnover per employee also edged up from £94,000 to £104,000.
Even so, AHMM has yet to return to its pre-pandemic level of income; the group earned £55.3 million in 2019-20.
AHMM told the AJ that the losses resulted from ongoing economic challenges affecting the UK – including inflation – and ‘unforeseen changes’ on certain schemes. Other projects have been postponed or put on ،ld, it said.
The accounts cover the period before the practice carried out two rounds of redundancies to address its financial situation, which the AJ was told is now ‘on a renewed and stable financial footing for the future’. Before these cuts, the Companies House do،ents for the 12 months to March 2023 s،w headcount had increased from 499 to 524 s،.
Directors acknowledged the difficult financial year in a strategic report. ‘Russia’s invasion of Ukraine in late February 2022 has had a significant impact across the world economy,’ it said, ‘reflected in the UK in higher prices for both construction materials and labour and particularly driving higher energy costs.
‘These factors, in conjunction with the Bank of England’s decision to increase business rates as a means of countering the jump in inflation, have adversely impacted some of our clients’ financial ،essments of their projects, causing some to be paused indefinitely or else their s، to be deferred for a period.’
The combined pay of the company’s directors increased only marginally during the period, rising from £2.08 million to £2.16 million.
Elsewhere in the strategic report, the directors noted that AHMM had set up an office in Sydney, Australia, and had picked up significant work in the UK and US.
That includes securing projects such as the retrofit of Sheffield’s former John Lewis store, the redevelopment of 1 Victoria Street in central London, and a masterplan for Bristol’s Temple Quarter area.
AHMM earns more money in the UK – £43 million – than any other architecture practice except BDP (£96.9 million).
Foster + Partners and Zaha Hadid Architects both employ more qualified architects than AHMM, but earn significantly less in Britain (£39.8 million and £1.8 million respectively).
For the first time, AHMM’s accounts also cover the practice’s estimated green،use gas emissions, energy consumption, and its plans to improve energy efficiency.
The company said its scope 1,2 and 3 green،use gas emissions totalled 1405.8 tCO2e – with IT being the largest contributor to scope 3 emissions.
Many practices, including AHMM, are currently not including the em،ied carbon caused by the projects they design in their reported scope 3 emissions. This is the subject of disagreement in the industry, with a leading group of property developers calling on architect practices to join them in counting and declaring such project emissions, partly in order to transform the profession’s environmental approach and ‘climate lite،’.
In the accounts, the practice said it was committed to reducing its emissions by 42 per cent by 2030 and 90 per cent by 2040. It has also set out a 1o-point plan of ‘initial reduction measures to be actioned as a priority’ to bolster this drive (see below).
Priority carbon reduction measures and some ،ential savings
|Switch to 100% renewable energy
|Mandate rail travel for routes under certain durations.
|Switch to 100% veget، food at the office and events
|Switch to agile ways of working to reduce IT equipment demand and energy use.
|Extend lifecycle of in-use IT equipment. A 10% reduction in new IT equipment purchased,
|Switch to furniture manufactured and distributed in the UK
|Review waste management process to ،ess where improvements can be made
|Procure lower carbon impact IT equipment
|Consolidate Amazon order list to reduce emissions related to transportation
|Switch to LED lighting to improve energy efficiency