David Chipperfield Architects lost £1.2 million worth of Russian work

The company's directors said in early March 2022 that it would be halting all projects in Russia and with other sanctioned Russian clients. It added later that it would not return to the invading country until all of its troops had left Ukraine.

Parent company DC Studio Ltd, controlled by David Chipperfield, provided a €1m [£890,000] debt financing package, to be repaid over two years, to cover the practice’s shortfall in income.

The practice said that the war meant it was harder to recover the debts owed to it on its Russian projects, which included a revamp of the 1927 Central Telegraph building in Moscow. Russia had previously been one of the countries where revenue was growing, the directors said.

The practice also warned that the increase in energy and building material costs caused by the war could also have an impact on secured work, as well as putting it under pressure 'from a pricing, liquidity and cash flow risk perspective'.

David Chipperfield Architects made the comments as it announced a pre-tax profit of just under £180,000 for the previous year ending in December 2021 – down 34 per cent from the previous 12-month period. But the figures mark two years of profit in a row for the practice, after two consecutive years of heavy losses.

Revenue fell about 5 per cent year-on-year in 2021 to £9.25 million, compared to £9.63 million in 2020. UK revenue dropped 19 per cent to about £2.7 million. North and South American revenue also declined slightly to about £2.6 million, and revenue from Europe and the Middle East plunged 80 per cent to just under £585,000. Revenue from the rest of the world, driven largely by increased business in Russia and Australia rose more than 250 per cent to £3.4 million.

The directors said: ‘In addition to a direct commission for work in Australia, we developed a submission for a residential project in Canberra notable for its high ambitions for sustainability, that was won in early 2022.’

Gross profit margin rose to 56 per cent in 2021, from 51 per cent in 2020. Average architect numbers at the practice rose to 63 from 58, with 93 total staff, of whom nine were managers. Fees per architect dropped 12 per cent to £146,832 in 2021.

Although the directors warned that the state of the global economy ‘remain[s] a concern’, they added that ‘the business has significantly expanded since the beginning of the Covid crisis and has continued to deliver excellent service to our clients throughout that period.’

And they remained optimistic about the future, reporting that revenue had risen 30 per cent in 2022 despite the lost Russian income, with a further 25 per cent growth in turnover projected for 2023.

The directors said that they had started working on projects for the London School of Economics and the Canadian government in 2023, ‘both of which adhere to our commitments to retrofit first and will deliver highly sustainable buildings’.