Loss deepens at Watkin Jones after £9.5m building safety provision increase

Contractor Watkin Jones slipped further into a loss after its building safety remediation costs ramped up.

The contractor – the UK’s 54^th biggest – recorded a pre-tax loss of £8.7m in the year to 30 September 2025, up from £300,000 the year before.

Turnover fell from £362.4m to £279.8m, while cash was down at £80.4m from £97m.

The firm blamed additional costs related to building safety work, which included a £7m increase in provisions linked to building remediation and a £2.5m rise in building safety provisions.

Watkin Jones chief executive Alex Pease also blamed fewer transactions and schemes in progress for the mounting loss.

Pease said the firm’s “strong construction delivery and effective management of build-cost inflation contributed to financial betterments in our projects and as such our gross margin performance”.

But he added: “The nature of the Watkin Jones operating model inevitably means that the economic challenges of the past few years and lack of investment liquidity can still be seen in this year’s numbers as we deliver on transactions which we first evaluated three to four years ago.”

Revenue from Watkin Jones purpose-built student accommodation (PBSA) projects was lower after “limited opportunity” for land sales, Pease said.

Profit generated from build-to-rent projects was also down because the firm had already sold the sites it was building in the year, it said.

During the year, the firm spent £8.8m on building safety remediation, and completed remediation work on six buildings.

It now has a provision for future building safety remediation of £46.4m, in comparison to £48m, which it expects to spend over the next four years.

However, Watkin Jones said the timing of its building safety spend would depend on the “timely engagement by building owners, revisions to programmes under the new gateways, and the availability of appropriately qualified subcontractors”.

It also said it had received £1.4m of contributions from clients to mitigate Watkin Jones’ liabilities relating to building safety remediation, following negotiations.

The firm said it was also in discussions with the owners of 13 properties “whereby the legal responsibility or confirmation of fire safety remediation requirements remains uncertain”. It expects to resolve those discussions within the next two years.

Watkin Jones said it “continues to explore opportunities” to recover remediation costs from the supply chain and insurance providers.

Looking ahead, the firm confirmed an order book of £340m for the coming years, and potential pipeline opportunities worth £2bn.

Its upcoming projects include a PBSA site with 484 student beds in Bristol, which still requires gateway two approval, and a £40m aparthotel in Wimbledon.

In October, it received approval from the Scottish Government to move forward with a 799-unit residential development in Edinburgh.

Pease said Watkin Jones would enter 2026 “with confidence in the strength of our operational platform and our ability to create long-term value for our stakeholders”.