Practice points to exceptional costs for profit knock as income from Asia soars and headcount rises
Zaha Hadid Architects posted its highest ever turnover in 2019 underpinned by trebling income from Asia but the practice鈥檚 profits also took a hefty knock, according to its latest accounts filed at Companies House.
The company鈥檚 main Zaha Hadid Limited accounts show a turnover of 拢56.6m for the 12 month period to April 30 last year, up 30% on the previous year. But profit before tax was down from 拢4.3m to 拢1.9m.
Pointing to a different measure, a strategic report written on behalf of the company鈥檚 directors and signed by practice principal Patrik Schumacher on March 13, gave profit after tax as 拢4.1m for the year, down from 拢4.7m in 2018. It said 鈥渆xceptional costs of 拢2.2m鈥� in 2019 against none the previous year had contributed to the drop in profit, and that the figure also reflected 鈥渟ubstantial research and development tax credits鈥�. The exceptional costs were described as 鈥渘on-project legal and consulting fees鈥� expected to be non-recurring.
Schumacher鈥檚 report said the business was delivering a record number of projects across the globe.
鈥淶HL continues to perform well in terms of both our creative designs and our position within the industry and we continue to win many prestigious industry awards,鈥� Schumacher added.
Regionally, Zaha Hadid Limited鈥檚 figures show a threefold surge in income from work in Asia 鈥� which accounted for 拢37.3m of the company鈥檚 turnover in 2019, up from 拢11.4m the previous year. Revenue from Asia had been just 拢6.8m in 2017.
With the exception of Africa, where turnover for the business increased from 拢675,332 to 拢812,824, income from all other geographic areas declined year-on-year.
UK turnover was down 75% from 拢2.8m to 拢708,665; Australia reduced by a similar proportion, contracting from 拢3.1m to 拢718,485; Middle East turnover dropped 37% from 拢8.4m to 拢5.3m; and Europe was down 24% from 拢14.4m to 拢10.9m.
More positively for architects, the Zaha Hadid Limited accounts reported a 17% rise in headcount at the practice, with staff numbers increasing from 362 in 2018 to 426 in 2019. All but seven of the additional roles were described as 鈥減roduction鈥� staff.
The accounts said no dividend payments were made from Zaha Hadid Limited in 2019, unlike the previous year when 拢4.5m was paid out.
The latest figures also reveal a reduction in the largest single payment made to a director 鈥� assumed to be Schumacher, which was 拢581,676 鈥� down from 拢819,252 the previous year.
Last year鈥檚 accounts also included 鈥渁ccrued remuneration鈥� of 拢5.3m for one director, also believed to be Schumacher. The 2019 accounts did not include a similar payment.
In comments that pre-dated the construction industry shutdown prompted by the coronavirus pandemic, Schumacher acknowledged that competition in the UK for architectural contracts was 鈥渃urrently very challenging鈥�. However he suggested that the business鈥� global customer spread had 鈥渕itigated the effect鈥� on the company.
Schumacher also said 鈥渃onsiderable uncertainty鈥� remained about post-Brexit visa arrangements for skilled people moving to and working in the UK. 鈥淲e are monitoring developments in this area and its possible impact on our UK recruitment,鈥� he said.
Elsewhere, the 2019 report revealed that Zaha Hadid Limited did not make a charitable donation to the Zaha Hadid Foundation during the year. It had given 拢70,000 in the year to 30 April 2018.
But the business saw a marked increase in the amount it paid to the foundation, which is controlled by the estate of Zaha Hadid, for the right to use the trademark. The accounts said the cost was 拢2.8m in 2019, up from 拢782,417 in 2018.
There was no mention of the threatened .
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