Liverpool builder Downing Construction sees pre-tax losses widen to £8.7m as it sets aside a further £17.3m to deal with issues relating to the Building Safety Act. Tony McDonough reports
Downing Construction has seen annual pre-tax losses widen to £8.7m as it grapples with the obligations with the Building Safety Act 2022.
Introduced by the Government following the Grenfell disaster in 2017, the Act has strengthened regulations for building design, construction, and management, particularly for high-rise residential developments.
Along with the rest of the industry Liverpool-based Downing, owned by property entrepreneur George Downing, has seen the provisions of the Act push up compliance costs significantly.
Based out of 20 Chapel Street in Liverpool, Downing specialises in the construction of large residential and student accommodation schemes across the UK. It has recently completed the £400m Square Gardens project in Manchester.
It has also delivered The Meadows, a 424-bed student scheme in Edinburgh. Significant challenges have been faced on site over the course of the contract, “causing delay and disruption”. This led to substantial cost overruns of over £2.4m.
In its annual accounts for the 12 months to March 31, 2025, Downing reported revenues of £66.4m and pre-tax losses of £8.7m, against losses of £5.8m in the previous year.
Writing in the annual report joint chief executive Sally O’Brien said that £5.8m of the firm’s loss was “due to the increase in provisions for remediation work on historic contracts” held by its main construction business George Downing Construction.
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She wrote: “The group continues to see a general increase in overheads during the year, the most notable increase is in staff costs. The impact of the Building Safety Act continues to be a key issue for the group.
“As of the balance sheet date, it held a provision of £17.3m (£13.2m last year) of potential contract obligations on completed projects, a majority of which related cladding and fire safety issues.
“As well as historic obligations, the Building Safety Act presents a new set of responsibilities and systems regarding planning, design and communication for new contracts. The group as invested heavily in training and knowledge awareness across its team members.”