Stride Treglown was unprofitable for the first three quarters last year, according to company accounts published this week
The AJ100 practice eventually ended 2019 with a pre-tax profit of £264,000 – 65 per cent lower than its £756,881 profit in the previous year – after a late surge caused by ‘pent-up demand in the market’.
But it admitted in its accounts for the year ending 31 December 2019: ‘It wasn’t until the fourth quarter of 2019 that we saw an upturn in business activity and a return to profitable operation.’
The practice blamed the political and economic uncertainty generated by Brexit for the ‘challenging trading conditions’ in the first part of last year.
Stride Treglown said that clients in both the public and private sectors had delayed making the large capital investment decisions that it relied on to maintain workflow, resulting in turnover dropping to £21.6 million, down 11 per cent from the £24.3 million posted the previous year.
The company went onto say that ‘close monitoring of fee forecasts against resources during the first two quarters of 2019 proved vital’, adding that it was forced to slash the amount it was spending on staff.
‘The majority of these savings were achieved by voluntary means, [which] meant that we were able to keep the cost and disruption associated with making staff compulsorily redundant to a minimum,’ the group said in a strategic report accompanying its accounts.
Looking forward, Stride Treglown said that its expertise in healthcare buildings was ‘particularly valuable at the time of – and also in the aftermath of – a medically induced crisis such as Covid-19’.
The practice was brought into design an NHS Nightingale hospital in a former Homebase superstore in Exeter in April.
However, Stride Treglown said it was watching debt profiles of major contractor clients, which it considered to be of ‘key importance to our financial stability’.
The practice employed an average of 330 architects during 2019, the same amount as 2018 – although its employee costs were down by £447,000.
Comment from David Hunter, chairman Stride Treglown
2019 was a difficult year for the economy and the practice, mainly due to political uncertainty. Being employee owned, we are open with everyone about how we are doing and work together to take action. We took the decision to put our staff ahead of profit, and held our nerve as the last quarter returned our profit for the year. Making less profit in 2019 than we did in 2018 meant we had less to distribute in profit share bonuses which reflects in our audited employment costs.
Coming into 2020, the strong growth from the last quarter of 2019 has been curtailedsomewhat by the pandemic. We continue to engage with our staff on how to learn fromremote working. We know we want to travel less, work more flexible hours and deliver processes that will allow any of us to work from anywhere.
We think the industry must come together to ensure these new working practices are widespread amongst project teams.