Group including the contractor on the Grenfell Tower refurbishment also reports sharp drop in turnover in annual accounts
Grenfell Tower contractor Rydon made a provision of more than £27m to cover the cost of a settlement with more than 900 people affected by the 2017 blaze.
The group revealed in its latest accounts for the year ending 30 September 2022 it had set aside the sum ahead of the civil claims settlement with survivors and bereaved family members, which was reached in April this year.
Rydon was among a group of 14 companies including cladding manufacturers Kingspan, Celotex and Arconic which agreed to pay an undisclosed sum to the group.
The case is independent of the public inquiry into the fire which killed 72 people in June 2017 and will have no impact on the inquiry’s report which is due to be published next year.
The accounts also reveal mounting losses at Rydon, with the firm losing £5.9m before tax in the year following a pre-tax loss of £2.7m in 2021, while turnover plunged by more than half, from £121.5m in 2021 to £52m in 2022.
Turnover at the group’s construction arm, which pulled out of the design and build market in 2021, dwindled from £46.7m in 2021 to £5.3m last year, with pre-tax losses increasing to £3.9m from £2.2m during the period. The shareholder’s funds of the division totalled just £500,000, compared to £2.7m in 2021.
Rydon Maintenance, which carried out the refurbishment of Grenfell Tower, fared better with turnover down to £42.6m from £46.6m in 2021 and pre-tax profit dropping from £900,000 to £700,000.
The group blamed the poor performance on supply chain disruption, escalating costs and wider uncertainties in the market, which it said had had a significant impact on consumer confidence during the 2022 financial year.
It admitted 2023 will remain “unpredictable” due to the ongoing conflict in Ukraine, rising energy prices and material inflation, although it said the decision to withdraw Rydon Construction from the design and build market had reduced its risk to fixed-price projects.
Other risks included a shortage of skilled staff, availability of current and future funding, interest rate uncertainty, computer virus attacks, client spending pressures and changes to planning regulations, the accounts said.
The group said it had invested in training, recruitment and succession planning, as well as cyber security training, to alleviate risks.
Despite the firm’s losses, auditors Grant Thornton said it had not identified any material circumstances which cast doubt on Rydon’s ability to continue as a going concern for a period of at least 12 months from September 2022.
Rydon has been approached for comment.
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