Willmott Dixon says cladding repair bill on Tesco job up again with decision on firm’s legal action against supply chain due next year

Willmott Dixon’s executive chairman has said the company expects to find out next year whether its action against several firms it accuses of being responsible for cladding problems on a huge scheme in London is successful or not.

The firm began action last year against five companies it claims are responsible for defects with the external wall system on the Tesco-owned project.

The £250m mixed-use scheme in south-east London, called Woolwich Central, is now costing the firm £48m to fix – up from last year’s figure of £44m.

Woolwich Central consists of an 84,000 sq ft Tesco superstore and seven residential tower blocks, covering more than 250 flats, the largest of which is nine storeys. It was completed at the start of 2014.

In a note accompanying its 2023 accounts, which have now been filed at Companies House, Rick Willmott said the recladding work was “going very well but remains 15 months from completion”.

He added: “Almost parallel tracking the recladding work is our legal recourse action to recover costs on that scheme from the third parties responsible. If this matter reaches the now confirmed court hearing, we should receive judgement around this time next year.”

In its 2022 accounts, Willmott pointed the finger at firms in several sectors, including designers, fire engineers and insurers, who, he said, “so far have not faced up to their responsibilities or obligations” regarding the cost of recladding work that is now required in order to comply with building safety legislation.

The firm has previously said its bill to fix legacy cladding issues across several schemes was £62m but in its 2023 accounts, it said it had recovered £6.6m of this and that it expected more successful claims in the future. “With active mediation and legal processes continuing, we still expect substantially more third party recoveries against these provisions in future years.”

Meanwhile, the firm said pre-tax losses at the business widened from £8.7m to £14.4m last year as the firm counted the cost of a bust M&E contractor which was working on two of its jobs.

It said the collapse of the unnamed firm hit Willmott Dixon for £12.8m which, together with the increased cost of work at the Tesco scheme and associated legal fees, took exceptional items to more than £17m – although this was mitigated by a successful £10m insurance claim, meaning overall exceptional items stood at £7.1m.

It also added that it had been forced to add £7.5m to its 2022 accounts as an exceptional item after an insurance claim for that amount “was no longer considered virtually certain as at 31 December 2022”.

Its biggest business, construction, saw income stay at just over the £1bn mark last year while revenue from its interiors was also flat at £130m.

It said cash in hand and at the bank remained at £115m.