The Aukett Group, the only UK architectural practice to be listed on the stock exchange, has seen its half-yearly profits fall more than 50 per cent compared with the same period last year.
The company made a pre-tax profit of just £460,000 in the six months to 31 March, compared with nearly £1 million last year.
Aukett chairman Andrew Lett told the AJ that he was disappointed and blamed market conditions and the practice's investment in new office space for the poor showing. He insisted that the results represented a short-term difficulty despite the fact that Aukett, like other big name firms such as Gensler (AJ 31.5.01), has been shedding staff.
Aukett has lost around two dozen employees in the past six months due to 'natural wastage'.
Lett denies that a recession is around the corner, however. 'The word 'recession' is talking the whole picture down, ' he said. 'You can't compare the situation with the end of the 1980s. If you look at the global economy there has been a correction, but I don't see any sign that there's going to be a recession like we've seen previously.'
The figures show that Aukett has managed to complete about the same amount of work as it did last year (around £9 million) but that UK margins have been eroded. Lett puts this down to cutbacks in the IT sector, which have been damaging for Aukett because it had been relying on continued inward investment from US technology firms.
But the practice has also invested heavily in new premises in London and Glasgow, incurring expenses that have been difficult to recoup under difficult trading conditions. Domestic profits have fallen by 75 per cent and earnings per share by 63 per cent. Lett stressed that none of this has been a surprise, though, because the figures were forecast in a trading statement issued two months ago.
'Our investment will not disappear, ' said Lett.
'We've made decisions for a longer-term strategy.'
On the continent Aukett profits are 22 per cent up on the same period last year.