Barratt Redrow has been hit by £248million in costs after uncovering fire safety and concrete frame repairs needed across several developments.
In its latest trading update, the housebuilder said that it had encountered further liabilities, including an additional £80million spend on fire safety work at a four-building scheme in its Southern region dating back to 2002.
Barratt Redrow also incurred £18million in additional costs that relate to newly found fire safety and concrete frame issues at a large scheme in London.
The housebuilder also said that it planned to undertake remediation works on concrete frames at five Redrow developments, which it estimates will cost £150million.
Barratt Redrow said that it will continue to look to recover money from its supply chain.
The statement said: “We continue to actively seek to recover costs from third parties in respect of issues around fire safety and reinforced concrete frames.”
“[In May], the group won a landmark Supreme Court case which clarified the responsibility of companies in the supply chain for remediating defects in developments they were involved in. This ruling made it clear that all parts of the industry need to take responsibility and that developers shouldn’t be penalised for proactively taking action to support leaseholders and residents in advance of litigation.”
Despite the remediation costs, chief executive, David Thomas, said that the merger with Redrow was progressing ahead of schedule.
The housebuilder said that restructuring costs following the merger would be £90million but that it had already achieved £69million in cost savings and was on track to reach its cost synergy target of a minimum of £100million.
The trading update said that total home completions had fallen by almost 8% for the year to 16,565, down from 17,972 the previous year. As a result, Barratt Redrow fell short of its completions target. The housebuilder reported a net cash position of £772million and forward sales of 9,835, worth £2.92billion.
The trading update continued: “We have delivered a solid operational performance in what has been another challenging year and, as a result, we expect to deliver FY25 adjusted profit before tax and before PPA adjustments in line with market expectations. We are executing the integration of Redrow at pace, we have a strong balance sheet and a solid forward sales position, and we believe we are well positioned as we enter FY26.”
“We remain encouraged by the government’s focus on housebuilding and in particular its reforms of the planning system which, in time, should have a significant positive effect. However, to see housebuilding volumes accelerate and reach the numbers needed to tackle our housing crisis, the government needs to also address demand-side constraints on private home buyers. We welcome the recent announcements in the Spending Review, which should support affordable housing demand from Registered Providers.”
