Housebuilder Bellway has revealed another £20 million charge to deal with legacy cladding issues on apartment blocks, but unveiled record house sales and the return of dividend payouts.
The group said the extra £20.3 million set aside brings its total since 2017 for fire safety in the wake of the Grenfell Tower tragedy to £131.6 million.
It came as Bellway completed a record 5,656 homes in the first half and now expects to deliver around 100,000 for the full year, helping drive interim revenues up 11.6% to an all time high of £1.7 billion.
The group reported a 4% fall in pre-tax profits to £280.2 million for the six months to January 31, though earnings edged 0.2% higher at £297.7 million.
It resumed dividends to shareholders with a 35p a share interim payout and hailed “strong” underlying homebuyer demand.
The company said the cladding charges are a “substantial sum which demonstrates Bellway’s responsible approach to supporting customers with regards to this issue”.
It added: “The legal responsibility for ensuring fire safety in buildings usually rests with the current owners or their managing agents, which in most cases for our legacy portfolio is not Bellway.
“As a responsible developer however, Bellway takes apartment safety concerns seriously and has therefore established a fire remediation team to work with building owners to help resolve historical issues.”
MPs have come under fire after they voted down a proposal from the House of Lords to prevent remedial costs for work, such as the removal of unsafe cladding from blocks of flats, being passed to leaseholders and tenants.
The vote on Tuesday has led to ministers being accused of “abandoning” hundreds of thousands of leaseholders and tenants over who foots the bill for key fire safety improvements post-Grenfell.
Bellway’s cladding charges follow a raft from other housebuilders in recent weeks as the cost of the works ramps up.
The group’s results show house prices rose 5.8% on average to £303,206 in its first half.
Its forward order book stood at 6,028 homes worth £1.6 billion on March 14, up 8.4% on a year earlier.
Bellway said in light of its order book, it now expects full-year average selling prices to be more than £295,000.
The housebuilding sector has been boosted by a raft of government incentives, such as Help to Buy and most recently the stamp duty holiday to help the market during the pandemic.
There were a raft of measures also announced in this month’s Budget that will give the property market a further fillip, including the extension of the stamp duty holiday to June.