Crest Nicholson says cladding deal to cost up to £120m

5th Apr 2022 07:29

(Sharecast News) - Crest Nicholson said the extra cost of dealing with dangerous cladding on properties it built would be up to £120m after the government widened the list of affected homes.

The FTSE 250 housebuilder said it had recorded £47.8m of net charges since October 2019 following the 2017 Grenfell Tower fire that killed 71 people.

In January 2022 the government required developers to make safe buildings between 11 and 18 metres high that had potentially dangerous cladding on them. The government gave developers a deadline of 5 April to sign a pledge to act on its wider requirements.

Crest Nicholson has told the government it will sign the pledge and the expected cost of the extra work will be be between about £80m and £120m, it said. The judgements are complex and the estimate is likely to be refined, it said.

The company said if it had not signed the pledge it would not have been able to trade normally.

The cost will be incurred over several years and with net cash of £252.8m at the end of October the charge is not a risk to its operations, the company said. It added that current trading was strong.

"Failing to agree to these new guidelines would carry further consequences that would impact the group's ability to operate and trade normally within the housing market," Crest Nicholson said. "As a result of making these new commitments the Group will need to record a further exceptional charge in its financial statements."