Firm says charges from two issues have cost it more than £170m
A provision to cover the cost of cladding repair work and impairment costs at its development arm sent Lendlease tumbling to a £230m pre-tax loss last year.
Accounts filed at Companies House for Lendlease Europe, which covers its work in the UK as well as some schemes in Italy and Latin America, said the firm slumped to the loss in the year to June 2022 from a £20.7m pre-tax loss last time. Revenue was up 5% to £802m.
The firm’s parent revealed in interim results in February that it was making a £114m provision to carry out remediation work as ordered by the government on residential schemes 11m and above.
It said most of the figure related to its former Crosby Homes business which it bought from Berkeley Group in summer 2005 for £261m and which Lendlease says it now no longer owns.
The firm signed the cladding pledge last month and admitted: “The proposed [government] restrictions, including not being able to gain development or construction or government funding, would have materially adversely impacted operations of Lendlease in the UK.”
Lendlease said it expects to spend the £114m over a five year period, adding: “This estimate is before anticipated recoveries from third parties, including insurances and supply chain. Lendlease has not received any specific claims to date and only has limited information relating to the buildings in the Crosby portfolio.”
The firm, whose business is split between construction and development, also revealed that following a global rejig, it had been forced to book a £59.7m impairment charge – the reduction in the value of an asset – at its development business.
Its construction business remains its biggest with revenue up 8% to £580m while income from its development arm was up two-thirds to £130m. The firm added that it made a £4.4m loss on selling its 50% stake in its International Quarter office development in Stratford.
The number of staff at the business fell to 1,200 from 1,300, the accounts also showed.
Lendlease, which is set to start work on the redevelopment of 120 Fleet Street for developer CO-RE, said it had a construction backlog revenue of £400m.
No comments yet