Firm says amount of money it had to set aside for issue doubled last year
The largest division at Laing O’Rourke has said that all its exceptional costs last year related to fire safety remediation work.
The divisional performances of the £4.3bn business are now emerging at Companies House and the results for the largest division, Laing O’Rourke plc, which covers its operations in Europe, Canada and Abu Dhabi, show that pre-tax losses narrowed to £6.9m from £19.3m on turnover down 7% to £2.5bn.
In the accounts, the firm said it racked up nearly £32m of exceptional items in the year to March “all of which related to defect provisions due to fire safety regulations”. It said the previous year’s figure for fire safety defects was £16m.
It added: “Laing O’Rourke continues to respond to legacy defect claims that have arisen as a result of the changes introduced by the Building Safety Act 2022.
“The extension to limitation periods [from six years to 15 years] may result in additional liabilities for the Group in the future, in excess of the costs recognised to date, the extent of which cannot be assessed by Laing O’Rourke as we do not have access to the information that would allow a detailed assessment of each potential obligation.
“Developers may seek to recover costs from main contractors (e.g. Laing O’Rourke) but until those claims are raised it is not possible to determine the full extent of the liability and/or work required on our behalf.”
Last month, the country’s biggest private builder said pretax profit stood at £41.5m in the year to March, up from £18m last time, on revenue flat at £4.3bn.
The issue of who pays for fire safety defects has been growing since the act came into force with several housebuilders, including Barratt Redrow and Taylor Wimpey, recently putting firms on notice that they will be looking to recover money from its supply chain to cover the cost.
Last week, Ardmore Construction Ltd went into administration. The firm has faced several claims from a number of housebuilders, including Barratt, Bellway and Taylor Wimpey, at the Technology and Construction Court in the past year. These are thought to relate to fire safety remediation work.
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