Redrow Signs Building Safety Pledge, Sees £164 Mln Addl. Provision In FY22; Stock Down

Homebuilder Redrow Plc. (RDW.L) Wednesday said it has signed the U.K. Government's proposed building safety pledge regarding the remediation of life critical fire safety issues on high rise buildings.

With the pledge, the company will be remediating all the buildings in which it was involved, whether or not it constructed them, going back 30 years.

For this purpose, the company expects to record an exceptional provision of 164 million pounds in fiscal 2022. This is in addition to the existing provision for fire safety in high rise buildings of 36 million pounds.

The company said it previously had urged housebuilding industry to play its part in resolving the issue of legacy fire safety in such buildings and that the financial burden should not be borne by leaseholders.

Rt Hon Michael Gove, Secretary of State for Levelling Up, Housing & Communities and Minister for Intergovernmental Relations, in January announced his intention to approach developers to fund the remediation of life critical fire safety issues on buildings over 11m with which they had any involvement in the development, going back 30 years.

The Home Builders Federation and Redrow, along with many others in the industry, have been engaged with Government with regard to this matter.

The Government has now sent the proposed voluntary pledge to all individual developers.

The pledge is in addition to the Residential Property Developer Tax of 4 percent of pre-tax profit which came in to effect on April 1, 2022.

In London, Redrow shares were trading at 513.67 pence, down 2.16 percent.

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