Student homes developer hit by £21m of covid and cladding costs

Student accommodation and build to rent specialist Watkin Jones has warned it is having to make a provision of £21m to cover the costs of covid-19 and cladding remedial work.

In a trading update for year ending 30 September, the firm said it had forked out £6m because of disruption caused by the pandemic while cladding replacement costs were set to hit £15m.

At its half year results in May, the firm had said cladding costs were expected to be between £12m and £15m over the next two years.

This morning’s update said revenue would be around £350m during the period – down from the £375m it posted last year.

Adjusted operating profit would be in the range £48m to £50m from last year’s £52m.

It said a strong second half meant it was able to pay back the £800,000 it received from the government’s furlough initiative.

The firm said it had completed seven schemes in the second half and had sold two student accommodation schemes to Brookfield-owned accommodation specialist Student Roost for £48m.

Watkin Jones said it would announce a date for publication of its final results in due course.

In September, Watkin Jones won planning permission for a 216-home residential scheme in Hove called Hove Gardens (pictured).