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Aukett Swanke has reported a pre-tax loss for the year to September 30, following an 11.7% drop in group revenue, and warned of a likely lack of profits for 2018.

The practice, which ranked 43^rd on BD鈥檚 latest , has 400 staff across its wholly-owned and joint-venture operations in the UK, Europe and the Middle East, said a 2016 pre-tax profit of 拢927,000 had turned into a pre-tax loss of 拢325,000 in 2017. Revenue was 拢18.4m, down from 2016鈥檚 拢21m.

Figures for the UK alone showed a 27% drop in revenue, down to 拢8.9m compared with the year before. The practice said that while its UK operation was completing a large number of projects in the current cycle, less progress had been made with 鈥渢he conversion of new commissions鈥� because of the 鈥渦ncertainty鈥� of the Brexit process and last year鈥檚 snap general election.

It said the UK market was the only area of its operations that lacked 鈥渟ignificant clarity鈥�, with the markets served by its Turkish and Russian operations believed to be at the 鈥渂ottom of the cycle鈥� and its German and Middle East operations expected to turn in 2018 profits.

But it admitted the whole group was 鈥渦nlikely to be profitable in the 2018 financial year鈥� because of the 鈥渆xogenous economic and political issues鈥� its markets faced.

Aukett Swanke chairman Anthony Simmonds said Brexit-related uncertainty in the UK 鈥� particularly in relation to commercial development 鈥� had 鈥渋mpacted adversely鈥� on the whole group鈥檚 performance.

鈥淲e believe it will take the UK more than one year to recover its previous profitability at reduced revenue levels,鈥� he said.

鈥淎n improvement in the company鈥檚 UAE operations culminated in a major contract award for the development of a substantial retail mall in Dubai which was formally signed just after the year end.

鈥淭he financial benefits of these activities in the UAE should be seen over the next two years.鈥�

Simmonds said that while Aukett Swanke鈥檚 joint venture and associate operations in Germany and the Czech Republic had turned profits in the year to September 30, they had not been enough to offset losses in Russia and Turkey, where turnover had 鈥渇allen sharply鈥�.

He added that he was 鈥渆ncouraged鈥� that the 鈥渄iversified and enlarged business footprint鈥� established over the past few years 鈥渟hould provide financial rewards in the not-too-distant future鈥�.

The report said the practice鈥檚 2015 acquisition of Dubai-based John R Harris & Partners had been a success, with the original purchase price 鈥渞ecovered in net profit terms in under three years鈥�, but it said 2016鈥檚 acquisition of Shankland Cox, which has bases in Dubai and Abu Dhabi had been 鈥減roblematic鈥�.

Aukett Swanke said Shankland Cox鈥檚 trading had fallen 鈥渇ar short of the pre-acquisition forecasts鈥� and the group had needed to 鈥渁bsorb significant losses鈥� as well as restructure the management team.

Among the practice鈥檚 UK highlights for the year was its Ten Trinity Square conversion of the grade II*-listed former Port of London Authority 好色先生TV being named runner-up in the City of London Awards. The landmark is now a five-star hotel operated by the Four Seasons group.