Work expected to take up to eight years, housebuilder says

The cost of dealing with building safety remediation work helped send London-focussed housebuilder Galliard into the red last year.

The firm racked up a pre-tax loss of £12.8m in the year to March 2023, from a £4.6m profit last time, on turnover down 18% to £167m. Galliard posted a pre-exceptional profit of £11m but nearly £24m of exceptional items sent it to a loss.

It said the provision was for building safety work which it expected to be carried out over the next eight years.

Stephen Conway, Executive Chairman, Galliard Homes

Galliard executive chairman Stephen Conway

Galliard’s executive chairman Stephen Conway said: “Galliard has always supported the principle that leaseholders should not have to pay for remediation in their buildings are we are committed to ensuring that leaseholders are not held responsible for the necessary remediation of their homes.”

A note in the accounts said the firm has made a £39.6m provision, which included £30.7m for building safety work, as well as the cost of dealing with onerous leases and a HMRC matter.

The accounts also reveal the firm has paid a further £6.6m to an outgoing director, believed to be long-time chief executive Don O’Sullivan, who announced he was leaving in December 2021. It includes a £2.2m “settlement payment” for the termination of share options.

O’Sullivan, who was appointed chief executive in 2017, later took up the same role at Inland Homes, now in administration, but left earlier this year after just over one month in the job.

Conway described 2023 as “a more ‘back to normal’ year” but cited lower construction activity, fewer completions, the rise in inflation and the war in Ukraine among the reasons for this year’s fall in turnover.

Yesterday, the firm announced that it and Singapore-based City Developments Limited had bought the Morden Wharf development in South-east London for an undisclosed sum from developer LandsecU+I and Morden College charity.