News of the slump will come as a surprise to the industry, as Hadid is seen as one of the most in-demand architects practising today.
Hadid is currently working on the Aquatics Centre for the 2012 Olympics as well as the Shakespeare Academy in London.
The London-based firm reported before-tax profits of £1.03 million in the year ending 30 April 2007, down from £1.23 million the year before.
Hadid’s turnover, however, continued to rise by 41 per cent, up from £9.63 million to £13.57 million in the same period. Likewise, the firm saw its costs grow by £4.1 million.
This meant the practice’s margins fell by 5.2 percentage points, down from 12.8 per cent to 7.6 per cent.
The accounts show that Hadid’s office had a business efficiency of -8.
At the time of writing the practice was unavailable for comment.
The business efficiency number is calculated by dividing the annual percentage growth in turnover by the annual percentage growth in costs, and will be used as the AJ's standard marker for measuring financial performance.