David Chipperfield Architects slips to £270k loss

In a statement posted with its accounts for the year ending 31 December 2022, the company said its profit had been ‘impacted by the cessation of work in Russia, and ongoing investment’, including new IT infrastructure and BIM software.

The company’s directors said in early March 2022 that it would be halting all projects in Russia and with other sanctioned Russian clients following the invasion of Ukraine. The move resulted in a loss of income of around £1.2 million and the practice continues to maintain it will not return to the invading country until all of its troops have left Ukraine.

In December 2022, UK sanctions came into force prohibiting anyone in the UK  from providing architectural services to any person connected with Russia.

David Chipperfield Architects said its withdrawal from Russia, ‘while still maintaining headcount’ (average staff numbers actually increased from 93 to 109), meant a reduction in its gross profit margin from 56 per cent in 2021 to 45 per cent in 2022.

However, fees per architect had risen by £15,000 to £162,286 in 2022, while overall revenue ballooned from £9.25 million in 2021 to a record £12.33 million. The highest previous annual income posted by the company was £10.1 million in 2011.

The largest growth was in Europe and the Middle East, where fees rose from £585,000 to £4.33 million. Work in the UK, including the recently submitted £120 million eight-storey scheme for the London School of Economics, also grew, from £2.7 million to £3.5 million.

In late 2022 the Pritzker Prize-winning practice won a competition to develop a 217,500m² head office for an IT company in the Seongsu district of Seoul.

However the practice added: ‘Competitions are costly and will not always be successful. The directors are diligent in only embarking on competitions selected on the basis of clear criteria and only a limited number per year, subject to the availability of resource.’

Looking ahead, the company said in its strategic report: ‘The economic risks in the UK and the world economy remain a concern; staff retention is a risk as the international staff base is impacted by the increased cost of living in London.

‘For the year ended 31 December 2022, revenue growth has been more than 30 per cent, with further growth forecast for 2023 and the value under contract for 2024 strong.’

The directors did not recommend payment of a final dividend. The salary of the highest-paid director, who is not named, went up from £190.957 to £192,155.