Pre-tax profit has plummeted at Galliard after the housebuilder was forced to set aside £31m for building-safety work.
Its annual accounts for the year ending 31 March show profit before taxation at £11m, a fall of 44 per cent on the year before, while turnover dropped 18 per cent to £167.1m.
A provision of £30.7m was included as the “current best estimate” of the cost of remediation work needed on the firm’s buildings, which is expected to take between five and eight years.
Galliard said it had already carried out recladding work on 1,100 homes in Greenwich and introduced an internal building-safety team to work directly with building owners and management companies as they conduct reviews of its buildings.
Chair Stephen Conway said the group had turned in a “strong underlying performance” against a deteriorating economic backdrop, with the outlook for the housing market as uncertain as it had been in the past decade.
He highlighted the impact of inflation on the mortgage market which, together with the cost-of-living crisis, had seen a dramatic shift in homebuying trends.
“Buyers have understandably become more risk-averse, with many of our buyers now wishing to see the finished product before committing to buy,” he said.
“The forecast of house prices dropping has also led to customers wanting to delay until prices come down.”
The fact that there remained a shortage of available housing stock to meet the government’s “lofty targets” continues to underpin the group’s operational forecasts.
Galliard moves into the next financial year with a focus on remediation and the continuing development of housing to meet growing need, Conway said.
As the market for residential apartment buying had cooled, the group has turned its hand to emerging opportunities in the private rented and build-to-rent sectors, he added, with a development of 163 rental homes at Grafton Way in Ipswich well underway.
“We can only continue to do what we have been doing for the past 30 years of the Galliard brand, that is to roll with the good times and mitigate the consequences of the bad,” he said.