BDP chief blames big PFI losses for profits slump
BDP chairman Richard Saxon has branded large PFI contracts 'dangerous beasts' after his practice's failure to win three major projects helped trigger a fall in its pre-tax profits from £1.14 million in 1999 to £525,000 in 2000.
Saxon said that BDP's decision to increase staff levels in anticipation of winning PFI work such as the £50 million Scottish air traffic control project, lost it 'several hundred thousand pounds'. A heavier tax bill than normal and client caution sparked by fears of a recession in the last six months of 1999 were also blamed for the fall in profits.
'It has not been a particularly good year this year and it gave us a nasty fright, ' said Saxon. 'The very big PFI projects are certainly dangerous beasts.' The Scottish air traffic control project was eventually won by a consortium headed by Gibb, after going into its fourth round of competition, added Saxon. Despite the profit slump, BDP's turnover for last year reached £38.6 million, down only slightly on 1999's figure of £39 million, and staff costs made up more than half its expenditure.
The figures are taken from the company's annual accounts for the financial year ending June 2000.
According to the most recent findings from the AJ 100 survey of the UK's biggest practices last year, BDP was second only to Sheppard Robson by number of qualified architects, and its architecture staff actually increased to 311 over the financial year.
Saxon said the firm was bidding for a further three PFI contracts, and was expecting a return to higher profitability next year.
BDP has been appointed by the BBC to work as architect and engineer to fit out two floors of Associated Architects' mixed-use Mailbox development in Birmingham. The scheme (below), near New Street Station in the city, will provide a new 10,000m 2home for the corporation.