Crest Nicholson trebles cladding retrofit provisions
House builder Crest Nicholson has upped its provision to £43m to cover post-Grenfell cladding and fire safety retrofits on its former building projects.
It is the first house builder to raise its estimates since the Government last week called on developers to stump up extra cash to fix the cladding crisis on intermediate height buildings of around four to seven storeys.
Crest this morning said it had now managed to assess the potential building safety work needed to all its properties of all heights and had made provisions for a further £29m on top of the £14m set aside a year ago.
The firm also blamed rising labour and material prices for the latest jump in expected recladding costs.
Crest revealed that so far it had clawed back £2.4m from settlements of claims against architects and subcontractors.
The Government has given firms have been given until early March to agree fully-funded plans of action including remediating unsafe cladding on mid-rise buildings of 11m-18m in height, currently estimated to cost around £4bn across the sector.
Peter Truscott, Chief Executive, said: “Following the Grenfell Tower tragedy, the group has actively worked to identify buildings where it has an obligation as legal owner, to remedy defects or meet the requirements of newly-published Government guidance.
“In addition, it has considered situations where it is no longer the owner of the building but there are design or workmanship defects because of the group, its subcontractors, product suppliers or designers falling short of their obligations at the time of construction. In these instances, the group is taking action to ensure these issues are remedied as quickly as possible.”
He added: “As our review has progressed, we have started to receive more detailed reports on the remedies required, primarily from those schemes that have been more complex and time-consuming to investigate.
“Given the specialist nature of this work and the scarcity of qualified resource to conduct reviews, we have also seen inflation in our costs to complete for both labour and materials.”
Crest said it expects to have completed any required remedies within a five-year period, using £14m of the remaining provision within one year, and the balance within two to five years.
The jump in building safety work provisions was announced as Crest revealed the business had bounced back last year making a pre-tax profit of £87m compared to a loss of nearly £14m in 2020 from revenue up 16% to £787m.
Truscott added: “We were delighted to increase profit expectations twice in the year and we have started 2022 with a strong forward order book and everyone in Crest Nicholson is excited about our plans for expansion.
Source: Construction Enquirer