Barratt Developments has spent or allocated £180m on the security of heritage buildings in its latest accounts, and has warned there may be more to come.
This is on top of the £434.6m provision it made in its 2022 accounts for these works.
In a trading update published ahead of the publication of its results for the year ending June 30, 2023, the builder said it faced £115m of costs related to fire safety and external wall systems on its legacy buildings, and an additional £45m relating to concrete. framework problems. It has already spent £20m in its latest financial year.
A review of the firm’s previously built concrete frames was carried out after defects emerged at its Citiscape building in Croydon, south London, in 2020. Today’s trading update said that, after spending £20m in the first half of its financial year, in the second half Barratt finalized plans for a remaining building found after the review, with an associated cost of £40m.
It also identified two other unnamed buildings where more concrete framing could be needed, with around £5m earmarked for potential work so far.
“The full extent of the repair work required is not yet known and further analysis is required to reliably estimate future costs, which could be even higher. [circa] 40 million pounds,” he said.
Construction news reported in May that the company is still set to redevelop the same Citiscape site, even though it was expected to make a loss on the project.
The company also said its signing of the government developer repair contract in March brought an additional 50 buildings into the scope of buildings it was looking at for fire safety and exterior wall issues. The number went from 228 to 278.
Elsewhere in the update, Barratt cited the challenging economic and political landscape for a slowdown in completions.
Its adjusted pre-tax profit is expected to be £880.6m, down from £1.05m last year.
Barratt chief executive David Thomas said: “During a year of economic and political uncertainty, we have delivered strong operational and financial performance, whilst maintaining our industry-leading credentials for quality, customer service and sustainability” .
Its annual results will be published in September.
