March 8, 2018 / 11:35 AM / 9 months ago

Grenfell builder Rydon's profit soars despite deadly fire

LONDON, March 8 (Reuters) - Rydon Group, the company responsible for the refurbishment of Grenfell Tower in London where at least 71 people died in a fire last June, said its profits jumped 50 percent to 19 million pounds last year, helped by an increase in sales.

The privately-owned company said in its accounts, published on Thursday by the UK’s corporate registry, that it had considered its position in respect of the disaster and did not see a reason to make a financial provision for potential losses or expenses.

Rydon was the main contractor responsible for a 2014-2016 refurbishment that included the application of cladding on the outside of the high rise building which government ministers said did not comply with regulations.

The company has previously said its work was compliant but declined immediate comment on Thursday.

Rydon’s sales rose 3 percent to 280 million pounds in the year to the end of September, helped, it said, by low interest rates and several government initiatives aimed at boosting construction of new homes.

Lawyers for the victims’ families say they are mulling legal action against the local government body which owned Grenfell Tower and the companies involved in the application of the external insulation system there.

A government-backed inquiry in December said this system appeared to have accelerated the spread of the fire.

Accounting rules require companies to include a note highlighting the potential for any large charges they may face in the future, such as fines or payouts related to litigation.

Where such amounts can be quantified, an expense is often included in the accounts. Where the liability cannot be reasonably estimated, the fact is usually noted but no provision is made.

Rydon said in its accounts that “given the limited nature of the work commissioned, the approvals received in relation to it and the interrelationship with work undertaken by other parties, no provision has been made in the accounts for any matters arising from these tragic events”.

Lawyers told Reuters in December that social landlords which have been forced to remove dangerous cladding from housing blocks could sue the companies responsible if they could prove the work did not comply with regulations.

However, only one of dozens contacted by Reuters said they were considering doing so. (Reporting by Tom Bergin Editing by Catherine Evans)

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