Following a review of all buildings over 11 metres tall developed by the company over the last 30 years, Watkin Jones has recognised an exceptional charge of £28m for the potential costs of the remediation work required, which is expected to be incurred over seven years. The cost estimate assumes no future recoveries from sub-contractors or consultants.
However, the company still does not know exactly what work will be required, chief executive Richard Simpson said.
This is in addition to the £15m cladding provision set aside in 2020 which was to cover the remediation of all schemes with aluminium composite material (ACM) or high pressure laminate (HPL) cladding that were still within the original limitation period.
The £28m exceptional charge cancelled out the company’s profits for the first half of the financial year. Watkin Jones results for the six months to 31 March 2022 show revenue up 8.2% to £193.0m (2021 H1: £178.4m) but it made a pre-tax loss of £16.6m (2021 H1: £25.8m profit). The underlying pre-tax profit was £11.4m for the period.
Chief executive Richard Simpson remained positive, saying: “Our pro-active management of build costs and sales values has ensured that our overall development margins are maintained, and we are confident going into the second half."
He also revealed that the company is getting a new name “to better reflect today's broader business,” but that will only be revealed “in due course”.
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