Crest Nicholson to spend over £30m fixing problem jobs after review of 140 schemes

External consultants brought in earlier this year by Crest Nicholson to run the rule over build defects at completed jobs that the housebuilder thought was going to cost it £15m have found the bill has more than doubled.

In March, the firm said build defects on four sites carried out by its now closed regeneration and London divisions could cost it up to £15m to put right.

At the time, it said it had brought in consultants to look over the work in order to “provide greater assurance on the adequacy of current provisions”.

This review was widened to include 140 sites which Crest said were jobs where it “maintains an obligation to carry out remediation or maintenance prior to adoption by the relevant local authority or management company”.

This has now concluded with it deciding the amount Crest will have to shell out fixing the problems will be £31.4m. It did not say how long it would take to carry out the repairs but said it was “prioritising” the work which would be completed in a “timely manner”.

The cost of the snags sent the firm nosediving to a £31m pre-tax loss in the six months to April from a £28m profit last time. Revenue was down 9% to £257.5m.

Crest said the provision to fix historic defects as required under building safety legislation was now £145m at the end of April, which it said had gone up by £8.9m because of build cost inflation and the scope of work required. It added that it had recovered £4.4m from third parties.

Crest said it spent a further £300,000 on a legal claim it is facing on a low-rise apartment block it built which was damaged by fire in 2021. The firm spent £13m on the claim in the year to October 2023.

“The fire caused extensive damage to the property which was subsequently demolished and is currently being rebuilt by the freeholder,” Crest said. “In the prior year the Group received a letter of claim alleging fire safety defects and claiming compensation for the rebuild and other associated costs. The claim and ultimate route to settlement is ongoing but the group currently does not have a set timeline for when the matter will be concluded.”

Crest also said that outgoing chief executive Peter Truscott, who it said earlier this year was leaving the firm, is stepping down tomorrow (Friday) after five years in the role. He is being replaced by Persimmon’s former chief operating officer Martyn Clark.

Crest said it expected pre-tax profit for the year to October 2024 to be between £22m and £29m, down from last year’s £41m which itself was a 70% slump on the £138m it made in 2022.