Lendlease Europe announces £230m loss

Lendlease’s Europe division made a pre-tax loss of £230m in the year to 30 June 2022, its latest accounts reveal.

This includes £114m set aside for remediation work on unsafe buildings, which the company announced in its financial figures for the second half of 2022 to finance action required by the UK government.

The loss also includes £59.7m booked for the impairment of development property, reflecting a change in strategy. This decision was made following a business review carried out after a new global chief executive, Tony Lombardo, was appointed in 2021.

The Australia-headquartered company signed the government’s developer remediation contract last month.

Most of the expected remediation costs relate to 56 buildings developed by Crosby Homes, which was acquired by Berkeley in 2005. Lendlease says it no longer owns these properties and has “not received any specific claims to date”.

The estimated cost is based on information provided by the UK government on claims it has received in respect of some of the buildings in this Crosby portfolio.

Lendlease anticipates that the money will be spent over a five-year period and says the provision does not include “anticipated recoveries from third parties”, including insurances and its supply chain.

The company’s European arm employed an average of 1,195 employees across its financial year, with a total of £1.6m being paid to its four directors – including £895,000 to its best-paid director.

Lendlease Europe works in development and investment as well as construction. The group’s revenue for the year was £802.2m, slightly higher than the previous annual figure of £763.8m.

Lendlease is involved in several high-profile UK plans, including the proposed £3.5bn Royal Docks development and £8bn Thamesmead Waterfront project in London, and the £1.9bn Smithfield scheme (pictured) in Birmingham.