Pre-tax profit has plummeted at Galliard after the builder was forced to set aside £31m for building security work.
Its annual accounts for the year ended March 31 show a pre-tax profit of £11m, down 44% on the previous year, while turnover was down 18% up to 167.1 million pounds.
A provision of £30.7m was included as the “current best estimate” of the cost of the necessary repair work to the company’s buildings, which is expected to take between five and eight years.
Galliard said it had already carried out cladding work on 1,100 homes in Greenwich and brought in an in-house building safety team to work directly with building owners and management companies as they carry out reviews of their buildings.
Chairman Stephen Conway said the group had had a “strong underpinning” in a deteriorating economic environment, with the outlook for the property market as uncertain as it had been in the past decade.
He highlighted the impact of inflation on the mortgage market which, together with the cost of living crisis, has seen a drastic change in home buying trends.
“Buyers have understandably become more risk-averse, and many of our buyers now want to see the finished product before committing to a purchase,” he said.
“The forecast for lower house prices has also made customers want to hold off until prices come down.”
The fact that there was still a shortage of housing stock available to meet the government’s “high targets” continues to point to the group’s operating forecasts.
Galliard is moving into the next financial year focusing on repair and continued housing development to meet growing needs, Conway said.
As the residential apartment purchase market had cooled, the group had targeted emerging opportunities in the private rental and build-to-let sectors, he added, with a development of 163 rental homes in Grafton Way in Ipswich on track.
“We can only continue to do what we have been doing for the last 30 years of the Galliard brand, which is to roll with the good times and mitigate the consequences of the bad,” he said.
