The sharp financial downturn underscores the scale of legacy cladding and building safety issues facing the housebuilder, which also attributed the loss to the ongoing impact of cost-of-living pressures and rising interest rates on housing demand.

Avant faces a further potential £70m exposure in Scotland under new legislation introduced through the Housing (Cladding Remediation) (Scotland) Act 2024. This cost has not yet been included in the company’s accounts.

Led by former Persimmon chief executive Jeff Fairburn, the firm delivered 1,701 homes across its core regions last year but saw revenue fall 3.6% to £465.3m (FY2023: £482.9m). Operating profit plummeted to £17.1m, down from £50.4m the previous year, with a further £14.7m in exceptional costs—including restructuring fees, asset impairments, and costs linked to defective buildings.

The company attributed the jump in its remediation provision to “more buildings being identified in need of remediation” and “revised cost estimates factoring in inflation.” The provision rose from £68.4m last year to £106.9m, reflecting ongoing safety investigations across its legacy developments.

“For many developers, the delivery of new homes is taking place alongside addressing sizeable fire remediation obligations,” the company said.

Avant confirmed it is in constructive discussions with the Ministry of Housing, Communities and Local Government (MHCLG) over a payment plan for its obligations under the Building Safety Fund. The agreement, once finalised, would defer and stagger payments, helping ease short-term cash flow strain.

“The group has been working closely with its shareholder, lenders, and the MHCLG to ensure that its fire remediation obligations arising under previous ownerships are fulfilled in a sustainable way,” Avant said.

“The constructive discussions between all stakeholders are now reaching a conclusion, which will enable the group to support government housing policy objectives through the delivery of new homes that offer affordability across a range of tenures and funding arrangements.”

A spokesperson for Avant added that the company had worked “constructively with the MHCLG, lenders and independent experts to address building defects created by others under previous ownerships.”

In relation to the potential £70m in costs related to new Scottish cladding legislation, the company said planning work is already underway.

“We continue to develop a more detailed understanding of remediation costs… the level and cost of the remedial work will become increasingly clearer as we move through this process,” it said.

Despite the significant financial headwinds, Avant has made progress in reducing its debt. Net bank debt fell to £116.8m, down from £145m, and the company retains access to a £250m revolving credit facility. A newly agreed loan facility with existing lenders will support continued investment in land and allow the company to maintain market share.

The business continues to pivot its housing mix, with social housing completions falling to 185 units (down from 287), while private rental sector (PRS) homes surged to 319 units, a sharp rise from just seven the year before. Private average selling prices rose slightly to £310,000.

Land acquisition costs were also reduced significantly, from £109.5m in 2023 to £63.4m this year. The company’s land bank stands at 10,456 plots, with an estimated developable value of £2.7 billion.

Avant described the remediation of unsafe buildings as a “priority for management”, adding it would be “delivered responsibly, sustainably and in as an accelerated timescale as possible”.