Results for the six months to 29th June 2025 for house-builder Taylor Wimpey show revenue up 9% to 拢1,655m (2024 H1: 拢1,518m) but, with costs rising and average selling prices falling by 1.3%, operating profit softened to 拢161.0m (2024 H1: 拢182.3m).
That operating profit includes an unexpected 拢20.0m associated with historical defective workmanship by a principal contractor that ceased work on site owing to financial difficulties
However, after exceptional charges, including a 拢222.2m increase in cladding fire safety provision and an 拢18.0m affordable housing contribution to head off a Competition & Markets Authority (CMA) inquiry, Taylor Wimpey made a pre-tax loss before tax for the half-year of 拢92.1m (2024 H1: 拢99.7m profit).
The increased cladding fire safety provision reflects findings from updated fire risk assessments and investigations. Approximately two thirds (拢144.9m) of the increase is to remediate historical building defects, relating to cavity barriers behind brickwork and render, which were not visible in earlier non-intrusive assessments.
A further 拢39.5m is for additional cladding-related remediation works as fire engineers鈥� interpretation of the PAS9980 standard evolves, becoming more cautious. Some buildings that were previously considered acceptable and requiring no remediation work under earlier EWS1 assessments have now been identified as needing remediation through recent FRAEW assessments, the company said.
In addition, 拢37.8m is for site-specific cost increases, professional fees, contingencies, and an uplift in Building Safety Fund related buildings, partially offset by discounting.
Chief executive Jennie Daly said: 鈥淭he safety of our customers remains our highest priority - this principle has consistently guided our approach, and we have increased our cladding fire safety provision to reflect findings from updated fire risk assessments and investigations in the first half.
鈥淲e continue to expect cladding remediation cash outflow in 2025 of around 拢100 million, as previously guided. Whilst the change to the provision will increase the gross cash outflow over a longer duration, there will be lower tax payments which is likely to more than offset the increase in remediation spend in 2026, so overall, we anticipate no material change to cash flows in the period to the end of 2026.
鈥淭he provision represents our current best estimate to remediate our buildings. While no recoveries are included in the provision values, we are actively assessing and, where appropriate, pursuing claims against those responsible for poor design, workmanship, or material failures.鈥�
The 拢18m affordable housing contribution relates to the 9th July announcement from the CMA agreeing to close its investigation into seven leading house-builders, suspected of colluding over market information, in exchange for a total of 拢100m to affordable housing programmes from the companies concerned. [See previous report here.]
Daly said: 鈥淔ollowing robust trading in the first quarter, we experienced softer market conditions during the second quarter. While lenders remain committed to the UK mortgage market, affordability remains an issue, particularly for first time buyers."
She added:聽鈥淲e reiterate our guidance for full year UK completions of between 10,400 to 10,800, with group operating profit for 2025 now expected to be c.拢424m, impacted by a one-off charge, unchanged on an underlying basis.鈥�
Got a story? Email news@theconstructionindex.co.uk
