Yahoo Finance Taylor Wimpey sets aside £30m to replace Grenfell-style cladding
Housebuilder Taylor Wimpey has set aside £30m to replace flammable cladding on some of its developments after similar materials were blamed for the Grenfell Tower fire tragedy last year.
Chief executive Pete Redfern said although the Taylor Wimpey homes had been built to legal standards at the time, the company wanted to reassure the people living in the blocks that they were safe.
The company plans to replace aluminium composite material (ACM) cladding across eight different developments. Similar cladding on Grenfell Tower was blamed for helping the fire to spread at the west London tower block, in a disaster which claimed 72 lives.
In its interim results announced this morning, the country’s second biggest housebuilder said replacing the cladding was “consistent with independent fire expert advice” and "morally right" to do.
Taylor Wimpey’s profits rose almost 47pc to £310m in the six months to the end of June compared to the previous year, partly because in 2017 the company was hit with huge costs relating to a scandal over its sale of leasehold terms.
It had to spend £130m on rectifying leasehold contracts which in some cases had left homeowners unable to sell because of prohibitively high ground rents.
The company’s average selling price for its homes rose 1.6pc to £257,000 in the first half of the year, but Taylor Wimpey sold fewer homes than last year, down 2.3pc at 6,497.
It blamed the poor winter weather, which it said had dented its performance, but it expected to catch up in the second half of the year.
Mr Redfern pointed to the company’s forward order book, which was 6pc higher than at the same point last year at 9,241 homes, as a sign that there is still growth in the business.
He said: “We finished the half year with a stronger order book then we had last year which I don’t think anyone expected.” By value, the order book was worth almost £2.2bn, 3pc more than last year.
He added: “As employment prospects remain positive and mortgage availability is good, customer demand for our homes has been strong in spite of some wider macroeconomic uncertainty.”
The company’s board also confirmed that a special dividend of £350m will be paid to shareholders next year. Its shares were up 1.31pc on Tuesday morning at 174.3p.
But analysts suggested that growth could slow in the sector in the next year.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Things are getting tougher for the UK housebuilding sector, and there are signs the good times may be over.”
