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Persimmon PLC on Tuesday joined housebuilding peer Crest Nicholson Holdings PLC in signing a UK government building safety pledge.
The Building Safety Pledge programme was established by the UK government in the wake of the Grenfell Tower fire in 2017 to make sure that residents of high-rise buildings are safe by removing combustible materials, such as cladding. The pledge commits housebuilders to new guidelines for work on potentially unsafe cladding on buildings between 36 feet and 59ft high.
Housebuilders had until April 5 to sign the Building Safety Pledge guidelines.
York-based Persimmon continues to believe a £75 million provision will be sufficient for the rectification works.
‘Of the 33 developments identified by Persimmon as likely to require remediation work, four have now secured successful EWS1 certificates and the group is working closely with the management companies and agents of the remainder to complete any necessary works as soon as possible,’ it said.
Crest earlier on Tuesday said it intends to sign the pledge committing the housebuilder to high-rise building remediation, saying it was ‘in the best interests’ of the company.
Crest Nicholson said it would be taking further steps to support those living in affected buildings. As a result of making these new commitments, it said it would need to record a further exceptional charge in its financial statements.
‘This is a complex and judgemental area, and the group will continue to work at speed to refine its latest estimate of these costs,’ it explained.
The pledge will cost the company between £80 million and £120 million, the Chertsey, Surrey-based housebuilder explained. Its board ‘does not consider this to present a risk to current or future operations,’ the firm said.
Crest also said it had a strong balance sheet with net cash of £252.8 million at October-end.
‘The cash outflows required to remediate the affected buildings will occur over several years. Given the group's well capitalised financial position and strong current trading performance,’ it added.
Shares in Crest Nicholson Holdings were down 1.5% at 272.40 pence each on Tuesday in London, while shares in Persimmon were up 0.2% at 2,215.00p.
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