Taylor Wimpey has raised its expected fire safety costs by £88m, while its pre-tax profit has dropped by a third in its latest full-year results.
The housebuilder said it now expected to spend £333m fixing historic fire safety defects, with increased costs partially due to “a small number of new buildings” that have been found to need remediation.
Taylor Wimpey said recent tenders had also forced it to re-evaluate the cost of works, with increased prices expected for project delivery administration as well as funding of the Building Safety Fund pre-tender.
The company increased its provision for cladding fire safety by £68.9m in its financial year ending 31 December 2024, after one of its joint ventures recognised a liability in the second half of the year.
FTSE 100-listed Taylor Wimpey said it spent £28.5m in 2024 on remediation works, adding there were “203 buildings within the scope of our provision”.
The firm did not comment on attempts to recoup fire safety remediation costs in a Stock Exchange announcement this morning (27 February).
However, it is currently suing the architect behind a Cardiff housing scheme with alleged defects for up to £50m.
The developer reported a 32.4 per cent drop in pre-tax profit to £320.3m for 2024, while its revenue slipped 3 per cent to £3.4bn.
Taylor Wimpey completed 10,593 homes in the year, 255 fewer than in 2023, while its average selling price fell from £370,000 to £356,000.
Jennie Daly, chief executive of Taylor Wimpey, said the company had a “robust” start to the year with affordability for housebuyers “moving in the right direction”.
“As a result, our total order book is up on last year, putting us in a strong position to grow housing volumes this year,” she said.
“We welcome the government’s recent planning reforms which are capable of delivering a real step change in planning outcomes.
“We look forward to seeing increased resources and a focus on the implementation phase to drive these outcomes and deliver much-needed new homes across the UK.”
Taylor Wimpey’s share price had fallen by 1.7 per cent to to 112.7p as of noon today (27 February).
In the outlook section of its Stock Exchange announcement, the firm said it expected modest build cost inflation this year in the low single digit range, “depending on the response from our subcontractors to rising employer costs”.
It envisages a group operating profit of £444m for 2025, up from £416.2m last year.
Julie Palmer, partner at corporate recovery specialist Begbies Traynor, said that this “cautious outlook for 2025 highlights the ongoing challenges in the housing market, with the group grappling with inflationary pressures on build costs and affordability issues, particularly in the South of England”.
She added that the drop in completions “reflects broader market trends, with the company anticipating further cost pressures in the year ahead. Nonetheless, it has dared to plant some seeds of optimism in the market to give investors green shoots to watch.”
