RECENT delays to starts on new developments has kept the major publicly quoted architects firms YRM and Whinney Mackay-Lewis in the red.
Tim Poulson, deputy chairman at YRM, said Its pretty cool out there. We thought the new work we picked up in the first nine months of last year was pretty encouraging. But November and December were disappointingly very flat.
YRM unveiled a pre-tax loss of 1.23 million (1993: 1.19 m loss) for the half ending October, although trading losses were significantly lower at 212,000. The London-based firm has also closed its loss-making interiors division and its Berlin office. Total rationalisation costs came to 800,000.
Whinney McKay-Lewis finance director Ian Gardner said: Several of our projects, which we had hoped to move forward with at an early stage, have not gone forward.
The firm unveiled a pre-tax loss of 179,000 for the half to October (1993: 282,000 loss).
Mr Gardner said the industry had received a setback since interest rates started rising. The firm had also been affected by delays in a retail and speculative developments and two town centre developments in Wales.
Last week architect DY Davies reported a pre-tax loss of 38,000 for the half ending October (1993: 116,000 loss) and chairman David Davies said the market was in the doldrums.
Mr Poulson said the recent interest rate rise had capped off the market and that developers were waiting until interest rates had reached a ceiling, possibly of 7 per cent. Projects were being delayed due to uncertainty over funding under the private finance initiative.
But YRM said it had won significant new projects and had been recruiting at its architectural and engineering division, mostly on short-term contracts. It had also seen signs of a modest upturn in January.
Further reorganisation is planned and a new strategy is set to be unveiled. And plans are afoot to raise capital to reduce the firms 1.18 million borrowings and 90 per cent gearing.
But YRM is uncertain whether a project at the Hotel Praha in Prague where it has retained work in progress of 700,000 will go ahead. The order book at Whinney Mackay-Lewis was 25 per cent up on a year ago, thanks largely to a commission for a 500,000 sq ft office project in London for Banque Paribas.