Watkin Jones reviewed buildings over 11 metres high as a result of the Building Safety Act
Student housing and build-to-rent developer Watkin Jones has recorded a pre-tax loss of £16.6m after setting aside £28m for remedial work on buildings, half-year results published today have shown.
The firm was not asked to sign the government’s cladding pledge but estimated the exceptional charge after deciding to review its buildings over 11 metres tall built in the past 30 years, as a result of the Building Safety Act. It has calculated £28m will be needed over seven years.
The loss for the six months to March 31 compares to a £25.8m profit in the same period the year before. Watkins Jones’ statutory results also showed an 8.2% increase in revenue from the same period the year before, from £178.4m to £193m.
It reported a “record pipeline” of £2bn, up on 43% on last year, of which £0.6bn had already been forward sold. It said this pipeline gave it “clear visibility of revenue and earnings growth in future years”. In January this year, the developer reported its pre-tax profit in the year to 30 September had doubled.
Richard Simpson, chief executive officer of Wakin Jones, said: “We are continuing to build on the positive momentum from the second half of last year and have demonstrated operational resilience through the strength of our business model.”
The figures published today also included underlying results, which did not take into account the £28m and showed a pre-tax profit of £11.4m.
Watkin Jones stated in the results: “While the group has not been asked to sign the [cladding pledge], we agree that individual leaseholders should not have to pay for the costs associated with necessary life-critical fire safety remediation work”. It added: “We are mindful of our obligations as a responsible developer”. The £28m is in addition to the £15m the company set aside for cladding work in 2020.
Watkin Jones’ board also said it intends to change the corporate and trading name of the business “to better reflect today’s broader business”. It will release the results of this decision “in due course”.
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