Barratt Redrow has identified 150 million British Pounds in legacy property liabilities related to its recently acquired Redrow business, stemming from issues with reinforced concrete frames.
The costs are for expected remediation works at up to five Redrow developments in London and will be treated as an adjustment to the acquisition's opening balance sheet, the company said in a trading update.
Separately, the housebuilder recognized additional legacy property charges of about 98 million British Pounds in the second half of its fiscal year.
The charges include 80 million British Pounds for fire safety issues at a development completed in 2002.
Despite the costs, the company said adjusted profit before tax for the year ended June 29 is expected to be in line with market expectations.
Total home completions for the year were 16,565, slightly below guidance due to fewer international and investor sales in London, according to the company.
"Against a challenging market backdrop, we have delivered a solid performance this year," Chief Executive David Thomas said.
"We are already seeing tangible benefits from the Redrow acquisition, with cost synergies being delivered ahead of schedule, a new divisional structure in place and revenue synergies progressing well."
For the upcoming fiscal year, Barratt Redrow anticipates completing between 17,200 and 17,800 homes.
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