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Further building safety costs in the UK helped keep Lendlease in the red for the half year to December 2023, the Australian firm said in interim results published overnight UK time.

The company, which is listed on the Sydney stock exchange, had previously warned it would be forking out AUS$200m (拢104m) on carrying out repairs to more than 50 buildings but said this has now gone up by an extra AUS$22m (拢11.5m).

Lendlease said at the end of last year its estimated provision to comply with government requirements on carrying out repairs to buildings 11m and above was AUS$334m (拢173m).

It said it had identified 58 buildings, most of which came with its deal to buy Crosby Homes nearly 20 years ago, where it had a liability.

鈥淭here continue to be both risks and opportunities to the provision that has been estimated,鈥� Lendlease said. 鈥淜ey risks include the addition of new buildings or new information in relation to already identified buildings, as well as the rising costs in the local market.

鈥淜ey opportunities include the potential for bulk procurement, re-interrogating scope on tender pricing and assessing various options in the delivery model.鈥�

It added that it was 鈥渁ctively working to maximise third party recoveries however expects this process will be over an extended period of time鈥�.

The firm also revealed that it spent AUS$17m (拢8.8m) on a settlement 鈥渞elating to a prior project in the UK鈥�, thought to be a dispute on a hospital scheme in Northumberland which was settled out of court last February.

The construction arm remains the firm鈥檚 biggest but revenue at the business during the period fell 18% to AUS$3bn (拢1.6bn) with earnings down 25% to AUS$51m (拢26m). The firm said margins had been 鈥渋mpacted by a provision taken against a prior year project in the UK鈥�.

Earlier this month, Lendlease鈥檚 UK arm received a tonic when its job to build a 拢400m mixed-use scheme at the site of the former ITV Studios on London鈥檚 South Bank was given the green light by communities secretary Michael Gove but in the results the firm said it expected its Australia business to be 鈥渢he main contributor to earnings鈥� in the near term.

Overall, group revenue, which also includes its investments and developments business, fell 5% to AUS$4.9bn (拢2.5bn) in the six months to December 2023.

Lendlease said restructuring costs of AUS$56m (拢29m) and valuation decreases of AUS$125m (拢65m) at its investments business, along with the increased cost of remediation work in the UK, meant the firm鈥檚 loss after tax was AUS$136m (拢70.5m), an improvement from the AUS$141m (拢73m) loss it posted last time.