South East housing contractor Durkan has clawed its way back to a trading profit but still ended the year deep in the red as legacy fire safety costs continue to bite.

The contractor posted an operating profit of £133,000 before exceptionals in the year to 30 November 2024, marking a turnaround from a £3.8m trading loss the year before.

But after shouldering nearly £15m in exceptional charges for fire remediation and redundancy costs, it slumped to a pre-tax loss of £8.3m, marking the third consecutive year in the red.

Group turnover dropped 19% to £138m, reflecting a shift away from new build contracting work.

Management warned that delays under the Building Safety Act and a slowdown in housing association and local authority project pipelines had prompted a reassessment of its design and build contracting business, which resulted in redundancies as the business scaled down.

Durkan said its focus now lies with its rebranded refurbishment division, Durkan Regen, which targets retrofit, decent homes, and fire safety work. At this business turnover jumped 30% to £23m.

The division has strengthened its management team and is targeting growth through frameworks and term contracts with housing associations and local authorities.

Live jobs have been scaled back, with just two ongoing this year, including Kidbrooke Park Phase 2, delivering 330 affordable homes in Greenwich.

The board said the Group remains financially secure, holding £35.1m in cash and meeting all covenant obligations.

Parent company Durkan Holdings, which includes contributions from Durkan Homes and contracting, reported revenue up 12% to £192m suffering a pre-tax loss of £7.5m.

Durkan Homes contributed £72m (2023: £51m) to group revenue following the sale of 145 new homes across four developments