In a trading update today, Barratt said that it was expecting an additional £30m for the past six months and so the legacy property costs are now expected to total about £81m for the year to 30th June 2021.
In addition to issues with cladding that emerged in the wake of the Grenfell Tower fire, Barratt also discovered faults in the reinforced concrete frames of eight of its development. [See previous report here.]
This may not yet be the end of it. “Whilst the charges in respect of cladding and external wall systems reflect our current best estimate of the extent and future costs of work required, as assessments and work progresses or if government legislation and regulation further evolves, estimates may have to be updated,” the directors said.
Barratt can afford it. As at 30th June 2021 it had net cash of £1,315m, compared to £308m a year before, although the £765.7m net cash position of 30th June 2019 is a better comparator due to Covid. Total forward sales (including JVs) as at 30th June 2021 are £3,473.5m, equating to 14,334 homes
Chief executive David Thomas said: "We have seen continued strong demand for our high quality, energy efficient homes on well-designed developments, enabling us to deliver 17,243 home completions this year. Whilst these are still uncertain times, we enter the new financial year in a strong position and remain focussed on our medium-term targets, including delivering 20,000 homes a year."