Brexit impacts Arcadis' UK building revenues

Arcadis has reported a decline in its UK building revenues on the back of clients delaying investment decisions because of Brexit.

The consultant in its latest full-year results said the impact from delayed investment decisions particularly impacted the commercial development sector in and around London.

But it said its UK revenue as a whole edged up thanks to increased infrastructure and utilities work making up for the slowdown in buildings.

Overall the firm saw a 3% fall in revenue to €3.3bn (£2.8bn) for the year, while earnings before interest, taxes, and amortization (EBITA) dropped 20% to €166m (£142m), down from €209m (£178m) in 2015, and operating EBITA fell 30% to €175m (£150m), from €250m (£214m) the previous year.

Arcadis attributed the decrease in EBITA to a writedown totalling €19.4m (£16.6m) on legacy claims against UK firm Hyder, which Arcadis acquired in 2014, and costs of €28m (£24m) relating to restructuring, acquisition and integration charges. The decline in operating EBITA was caused partly by the fall in the value of sterling.

Meanwhile, the fall in revenues was caused by the ongoing deep recession in Brazil, which had caused project cancellations and postponements, lower revenues in North Amercia, Asia and its subsidiary design consultancy CallisonRTKL, Arcadis said.

Arcadis also struggled in mainland Europe last year with lower results in Belgium and France, which has seen the firm launch a programme to streamline its operations, although the firm reported a strong performance in the Netherlands and Germany.

The consultant also had a good year in Australia on the back of major infrastructure and buildings projects and the United Arab Emirates where the firm is delivering a number of large schemes related to Expo 2020.

Arcadis added that the search for a new chief executive to replace Neil McArthur who departed in October last year after a clash with the board over the direction of the firm was advanced and an announcement was anticipated in the near future,

Renier Vree, interim chief executive at Arcadis, said: “2016 was a challenging year for Arcadis, which required us to take action. I am pleased that we are making good progress on the priorities set in October. We are implementing a simplified operating model which enables us to better respond to market opportunities, combined with structurally reduced overhead costs.”

“The market outlook starts to improve due to higher oil prices and increased Infrastructure spending in many countries. We also see higher demand from cities in Europe, North America and Asia for water resiliency, as well as for environmental consulting around the world.”