Taylor Wimpey slumps to loss on £222m fire safety hit

Independent

3 days ago

Taylor Wimpey has plunged to a half-year loss after taking another £222 million cost hit for removing cladding from high-rise buildings following the Grenfell Tower fire tragedy.
The housebuilder reported pre-tax losses of £92.1 million for the six months to June 29 against profits of £99.7 million a year earlier.
It said this was largely due to an extra £222.2 million provision for fire safety measures.
The company also said full-year earnings would be lower than expected at £424 million after taking an unexpected £20 million charge for historical defective work by a former contractor.
Experts at AJ Bell said the latest cladding cost has seen Taylor Wimpey's total bill swell to more than £550 million in the wake of the Grenfell fire in 2017, which killed 72 people.
They estimated the cost to FTSE 100 and FTSE 250 housebuilders had now reached more than £3.5 billion.
Large housebuilders agreed in 2022 to pay to fix cladding issues on their properties following public and political pressure.
Taylor Wimpey's shares fell 5% on Thursday after its interim results laid bare the impact of the costs.
Jennie Daly, chief executive of Taylor, said: 'The safety of our customers remains our highest priority – this principle has consistently guided our approach, and we have increased our cladding fire safety provision to reflect findings from updated fire risk assessments and investigations in the first half.'
The group said it was also pushed to a loss by an £18 million payout after an investigation into information sharing in the sector by the UK competition watchdog.
Taylor was one of seven builders that recently agreed to pay a record £100 million between them as part of a package of commitments to address concerns following the probe by the Competition and Markets Authority into whether they shared commercially sensitive information.
In its latest results, Taylor said it saw 'softer' market conditions in the second quarter as affordability continues to hamper demand, particularly from first-time buyers.
'While affordability remains constrained, particularly amongst first-time buyers, lenders remain committed to the UK mortgage market and long-term fundamentals are positive, with significant unmet need for UK housing,' Ms Daly said.