Completions down at Barratt Redrow as remediation costs reach £248m

In total, the firm recognised around £248m in remediation costs, including £150m to remediate reinforced concrete frame buildings at up to five of Redrow’s developments.

The remediation costs of fire safety issues at four buildings completed in 2002 are expected to total £80m, while costs of around £18m have been recognised for “a number of newly identified issues at a large development in London” that was already in its provision for external wall system (EWS) remediation.

“Cost estimates for the EWS portfolio remained broadly stable during the second half, with an increase in costs of c. £16m which was offset by an equivalent amount of cost recoveries,” the report said.

In May, the Supreme Court ruled that developers can pursue third-party contractors for the cost of building safety remediation work, dismissing an appeal by the URS Corporation against BDW Trading, better known as Barratt Redrow.

“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,” Barratt Redrow said in its trading update.

David Thomas, chief executive of Barratt Redrow, said the house builder’s performance had been “solid”.

“Our adjusted profits are in line with market expectations, despite home completions being slightly below our guided range, mainly due to the impact of fewer international and investor completions than expected in our London businesses,” he said.

Barratt Redrow’s adjusted profit before tax and planning fees are expected to be £582.6m.

“We are already seeing tangible benefits from the Redrow acquisition, with cost synergies being delivered ahead of schedule, a new divisional structure in place and revenue synergies progressing well,” Mr Thomas said.

Costs and fees to acquire Redrow totalled £36m, with £14.4m in initial restructuring and integration charges.

Barratt Redrow also announced that Geeta Nanda, former chief executive of Metropolitan Thames Valley, who joined the board as a non-executive director in October last year, will become chair of the sustainability committee from August.

The house builder said it forecasts completions in the range of 17,200 to 17,800 in 2025-26.

It previously said in an update that it was on track to deliver a percentage of affordable housing in the “high teens” in 2025.

While it welcomed the government’s focus on housing and planning reform, Barratt Redrow added that measures were also needed to “address demand-side constraints on private home buyers”.