Concrete frame defects and fire safety work cost Barratt an extra £130m

Barratt has been forced to account for £130m in fresh costs relating to remediation work on existing developments.

The housebuilder, in a trading update today, said it will recognise the charge in its accounts for the year to 30 June which will be published in early September.

It said: “The charge in relation to reinforced concrete frame relates to the remediation of two developments in London, first referenced as contingent liabilities in FY23.

“Remaining building safety provisions are in line with our previous expectations.”

Barratt undertook a review of its developments after discovering issues with reinforced concrete frames at its Citiscape development in Croydon. In its full-year results last year it said structural issues were found at two further developments but the full extent of remediation work was not at that point known.

The £130m includes costs to fix the concrete frame defects in addition to fire safety remediation work. It is on top of £62m Barratt has already announced it has set aside in the year to fix fire safety issues relating to external wall systems in existing developments.

Barratt also announced that it is expecting the Competition and Markets Authority to have made a decision on its proposed £2.5bn merger with Redrow by 8 August. The merger was in May approved by shareholders of both companies.

>>See also:Competition watchdog to look into £2.5bn Barratt Redrow deal

Barratt said its adjusted profit before tax will be “slightly above expectations”. It said it completed 14,004 homes in the year, which is 19% down on the 17,206 built the previous year but at the upper end of its forecast range. Barratt is forecasting between 13,000 and 13,500 completions next year.

Barratt said its total forward sales in the year was 7,239 homes, down on 8,995 the previous year, with the sales income dropping from £2.2bn to £1.91bn in line with expectations.

Barratt publishes its full results for the year on 4 September.