Oil price woes and delayed projects blamed for reverse but firm ‘confident’ of return to black in 2016
Collapsing oil prices and stalled projects helped push Keppie Design into the red last year.
The Scottish practice, which has five offices across Scotland, including the oil capital of the UK, Aberdeen, along with others in Manchester and Belfast, racked up a £528,000 pre-tax loss in the year to July 2015 from a £346,000 profit last time.
Revenue also fell – by 4% – to £7.5 million and in a note on the results the firm said: “There were a number of reasons for [falling turnover], principally delays to the start of certain projects, while others have been put on hold in some cases as a result of the collapse in the price of oil.”
But the firm, which last month won planning for a new community hospital (pictured) at Haddington near Edinburgh, said it had decided to maintain its staffing levels, which number around 160, rather than make cuts.
Its wage bill climbed by more than £450,000 last year to £4.9 million, with the salary of the highest paid director, who is not named, up from £89,000 to £93,500.
Keppie said: “The directors took the decision in early 2015 to maintain staffing levels due to the strong prospects looking forward. This has had a negative effect on both profitability and cashflow, which has also been impacted by the payment terms attached to a number of public sector contracts.”
But the firm said the prospects were brighter in its current financial year. “[It] has started in a much more positive vein and the directors are confident that there will be a return to profitability and cash generation over the course of the year.”
Keppie is one of three firms to form a group that will bid collectively for larger schemes or frameworks.
Called 431 Architecture, the three firms – Keppie, Stride Treglown and Todd Architects – will remain independent but will come together to pitch for work they might not have bid on their own.