A N N UA L R E P O RT
2021
CO NTE NTS
PE R F O R M A N C E SU M M A RY
R E D R OW A N N UA L R E P O R T 2 02 1
PE R F O R M A N C E SU M M A RY
01
S T R AT E G I C R E P O R T
G OV E R N A N C E R E P O R T
F I N A N C I A L S TAT E M E N T S
S H A R E H O L D E R I N F O R M AT I O N
90 Corporate Governance
170 Independent Auditors’
218 Corporate and
Shareholder
Information
219 Five Year Summary
Report
Report
92 Board of Directors
108 Audit Committee Report
117 Nomination Committee
Report
123 Placemaking and
Sustainability Committee
Report
128 Directors’ Remuneration
Report
154 Directors’ Report
168 Statement of Directors’
Responsibilities
180 Consolidated Income
Statement
180 Statement of
Comprehensive Income
181 Balance Sheets
182 Statement of Changes
in Equity
183 Statement of Cash Flows
184 Accounting Policies
190 Notes to the Financial
Statements
01 Performance Summary
02 Our Investment Case
04 Our Strategy
06 ESG Scorecard
16 Our Business Model
18 Our Markets
20 Chairman’s Statement
22 Group Chief
Executive's Statement
28 Operating Review
63 Financial Review
66 Risk Management
79 Group Non-Financial
Information Statement
82 Section 172(1) Statement
84 Stakeholder
Engagement
E N V I RO N M E NTA L , SOC I A L A N D G OV E R N A N C E (“ E SG”) H I G H LI G HTS
D E S C R I P T I O N O F O U R
B U S I N E S S M O D E L
T H R I V I N G
C O M M U N I T I E S
B U I L D I N G
R E S P O N S I B LY
VA LU I N G
P E O P L E
04 Our Strategy
06 ESG Scorecard
16 Our Business Model
28 Redrow 8 Placemaking
35 & 46
Principles
29 Community
Collaboration
161 Community Investment
45 Listening to our
Customers
37 Biodiversity
84 Stakeholder
Engagement
160 Charitable and Political
Donations
56 Real Living Wage
Commitment
56, 83 & 159
Equality Diversity and
Inclusion
57 & 99
Employee Engagement
58 & 160
Learning and
Development
60 & 159
Health and Wellbeing
62 Community Engagement
161 Human Rights
The Group Non-Financial
Information Statement on pages 79 to
80 provides further information and
sign posting.
Customer and product
responsibility
40 Quality of Build
and Considerate
Construction
42 Health, Safety and
Environment
43 Putting our Customers
First
46 Climate Change Strategy
46 Energy and Carbon
48 Business Travel
49 Product Innovation
52 Waste Reduction
52 Responsible Sourcing
52 & 161
Partnering with our
Supply Chain
90 Corporate Governance
98 Whistleblowing
98 Conflicts of Interests
116 & 162
Anti-bribery and
Corruption
156 ESG Disclosures
162 Code of Conduct
162 Modern Slavery
163 Task Force on Climate-
Related Financial
Disclosures (“TCFD”)
Find more information at:
redrowplc.co.uk
Cover image: Hartford Grange, Hartford, Cheshire
£2,112m
£1,920m
£1,939m
£406m
£380m
92.3p
85.3p
£1,660m
£315m
£314m
70.2p
73.7p
£1,339m
£140m
32.9p
17
18
19
20
21
17
18
19
20
21
17
18
19
20
1818
21
£1,939m
Revenue
+45%
£314m
Profit before tax
+124%
73.7p
Earnings per share
+124%
6,443
5,718
5,319
5,620
4,032
£1,431m
£1,422m
60.5p
£1,144m
£1,030m
£1,015m
17
18
19
20
18
21
17
18
19
20
21
17
18
19
28p
17p
24.5p
0p
20
1818
21
5,620
Legal completions
+39%
See note 23
AWA R D H I G H L I G H T S
£1,431m
Order book
+0.6%
See note 23
24.5p
Dividend per share
See note 23
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORT
02
Redrow plc Annual Report 2021
03
OU R I N V E S TM E NT C A S E
Successful leadership team
Redrow has a strong, experienced and successful
leadership team and remains committed to succession
planning and developing the next generation of
homebuilders.
14.5%
of workforce on structured training programmes *
211
internal promotions in year
Placemaking
We focus on delivering high quality homes and creating
attractive, sustainable and vibrant places to live.
£275m
committed to fund improvements to local communities *
1,314
affordable homes delivered to our communities
Excellent product range
Redrow has an excellent product range which continues to
evolve.
£1.75bn
revenue value of private reservations secured in the year *
Creating communities
a key focus
* See note 23
Expertise in land buying
Redrow has the expertise and resources to ensure that the
right land opportunities are secured in geographic locations
aligned to our strategy.
c8,300 plots
added to land holdings with planning permission
c3,500 forward land plots
on which planning was obtained
Quality and customer service
By listening to and understanding our customers’
requirements, we continue to evolve our product and
customer service. We focus on quality, differentiation and
value for money for customers.
92.6%
customer recommendation – 5 star status *
Excellent
Trustpilot rating
A strong, efficient and resilient
balance sheet
Redrow has net assets of c£1.9bn. The Group focuses
medium term on delivering superior levels of return on equity
and return on capital employed from an efficient use of its
capital base.
18.0%
return on equity *
24.5p
dividend to shareholders
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT 04
Redrow plc Annual Report 2021
05
OU R S TR ATEGY
To create long-term sustainable value for all our
stakeholders by developing thriving communities with
high quality homes that provide a better way to live.
R I V I N G COMMUNITIES
H
T
Placemaking
for Wellbeing
Homes
for All
Nature
for People
Working
Safely and
Considerately
Putting
Our
Customers
First
B
U
I
L
D
I
N
G
R
E
S
P
O
N
SIB
L
Y
TO CREATE
A BETTER WAY
FO R PEOPL E
TO LI VE
Managing Our
Resources
Efficiently
Inspiring
the Next
Generation
to Build
Valuing
and
Developing
People
and Partners
E
L
P
O
E
G P
V A LUIN
We develop thriving communities by creating
better places to live. There are three strands
which support this work:
• Nature for People – increasing biodiversity
on our developments and connecting
communities with nature on their doorstep;
• Placemaking for Wellbeing – our innovative
Placemaking framework sets out eight design
principles, which define how we achieve
sustainable development on all our sites; and
• Homes for All – building the right homes, in
the right places to create cohesive and thriving
communities.
M E A S U R E
2 0 2 4
G U I D A N C E
K E Y P E R F O R M A N C E
I N D I C AT O R S
2 0 2 1
2 0 2 0
EPS *
DPS *
• ≥90.0p †
73.7p
32.9p
• ≥30.0p †
24.5p
–
Revenue *
• >£2.2bn
£1,939m £1,339m
Average Sales
Outlets *
• 137
1 1 7
1 1 0
Monies
committed
to fund
improvements
to local
communities *
• Continued
investment in local
communities
£275m
£188m
• Required affordable
homes delivered
1,314
944
Ensuring our sites are safe places to work, live
and visit is central to our build operations. As we
continue to help deliver much-needed new homes,
we are also striving to constantly improve our
quality and customer service, whilst working to
protect the environment. The themes which
support this activity are:
• Working Safely and Considerately – creating
healthy, safe and considerate working
environments;
• Putting Customers First – putting our customers
first and striving for excellence in all that we do;
and
• Managing Resources – creating homes of
enduring quality and working to minimise our
environmental impacts.
ROCE *
• >22%
18.5%
9.2%
Land holding
years *
• Maintain land
holdings at c5 years
5.2 years 6.2 years
Waste diverted
from landfill
• >95%
97.7%
97.4%
HBF customer
recommend
rating *
Private
reservation
rate *
• >92%
92.6%
91.9%
• 0.67 – 0.69
0.70
0.74
Our aim is to inspire future industry talent and to
support our colleagues at every stage of their career.
The two strands which support this work are:
Number of
trainees *
• Maintain level of
trainees at 15% of
workforce
14.5%
14%
• Valuing and Developing People & Partners – by
training and developing people to succeed;
driving Redrow colleague and partner advocacy
and improving the wellbeing of Redrow’s people
and creating an inclusive workplace; and
• Inspiring the Next Generation to Build –
collaborating with partners to positively impact
people and communities through education and
engagement activities.
Accident
incident rate
by site *
• Maintain at 0.3
or below
0.26
0.38
† assumes 25% corporation tax rate in FY2024 * see note 23
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT
06
Redrow plc Annual Report 2021
07
E SG SCO R EC A R D
O U R S U S TA I N A B I LIT Y P R I O R ITI E S :
C R E ATI N G LO N G -TE R M VA LU E TH R O U G H
CO LL A B O R ATI O N
We have long recognised that our ability to create long-
term value is inextricably linked to how we manage the
risks and opportunities that arise from Environmental-
Social-Governance (ESG) factors.
This year we have made a step-change in how we report
on these issues – improving our transparency and
increasing our disclosures. In this report, we discuss our
management approach and publish the KPIs by which we
measure our material ESG issues (see pages 8 to 15 for our
ESG Scorecard).
Our ESG improvement strategy is the responsibility of our
Placemaking and Sustainability Committee, and is one of
its core areas of focus. The Committee is led at Executive
level by our newly created post of Group Communities
Director.
Our strategic commitments: Building Responsibly, Thriving
Communities and Valuing People help us manage ESG
risks and drive long-term sustainable value for our
stakeholders. As a business, our aim is to operate in a
responsible way, and to create value across a defined
range of benchmarks that will ensure we benefit the
communities we work in; the landscapes that we develop
and the people who help us deliver our new communities.
O U R M ATE R I A L I S S U E S
Through ongoing engagement with our stakeholders we
identify the issues which matter most to them, along with
understanding the factors that influence their decisions.
This enables us to consider both the potential impacts of
sustainability issues on the business – how they may
impact our value-chain, as well as how our activities have
the potential to outwardly influence wider sustainability
trends.
In 2022 we will undertake a strategic ESG review and
positioning where we will re-assess our material issues and
determine their priority. This will be informed by feedback
from our stakeholders and undertaken in-line with the
Materiality Principle. We shall simultaneously explore which
of the many reporting standards and frameworks are the
best fit for our approach. The adoption of a reporting
framework will both guide our decision-making and inform
our approach to ESG governance.
As of 2021, Redrow received an
MSCI ESG Rating of AA.
Business Principle
Material Issues
Objectives
KPI (see scorecard overleaf unless stated)
Creating better
places to live
• Sustainable
Communities/the
impact the
development has on
the community
• Environmental homes
– product design &
lifecycle management
• Land use
• Biodiversity
• Community
Engagement
• Customer
focused design
• Placemaking
• Healthy lifestyles
• Community
infrastructure
• Nature for
People
• HBF survey: recommend a friend
• Net promoter score
• Social value contributions 1
• Biodiversity Net Gain 2
• Post completion Redrow 8 reviews 3
• Community Collaboration training 4
1
2
3
4
See page 5.
See pages 37 to 38.
See page 36.
See page 29.
Business Principle
Material Issues
Objectives
KPI (see scorecard overleaf unless stated)
Working safely
and
considerately
Putting our
customers first
Managing our
resources
efficiently
• The health and safety
• Safety
• Number of notifiable accidents
• Service
excellence
• Responsible
sourcing
• Quality and
productivity
• Environmental
Impact
of employees,
customers and
contractors
• Environmental homes
– product design &
lifecycle management
• Whole-life carbon and
materials sourcing
• Product Quality
• Climate change –
carbon reduction and
climate adaptation/
business resilience
• Resource efficiency &
waste
• HBF survey: recommend a friend
• Net promoter score
• Average Trustpilot Review score
• Supply chain – Modern Slavery
• Supply chain – payments on time
• Average Considerate Constructors Scheme score
• NHBC Construction Quality Review score
• Average Reportable Items from the NHBC
• Group GHG emissions scope 1 & 2
• Total GHG emissions/100m2 build
• Operational energy use
• Embodied carbon 5
• % of electricity procured from renewable sources
• Tonnes of construction waste/100m2
• % of waste diverted from landfill
• Water use/100m2 build
• % of timber certified
• Average SAP rating
• Average EPC rating
5
See pages 50 to 52.
Business Principle
Material Issues
Objectives
KPI (see scorecard overleaf unless stated)
Valuing and
developing our
people
• Business Ethics;-
bribery and corruption
• Training and
development
• Remuneration policy
• Colleague &
Inspiring the
next generation
to build
• Human capital and the
skills shortage
• Human rights in the
supply chain
• The health and safety
of employees,
customers and
contractors
• The wellbeing of
employees &
customers
partner
advocacy
• Wellbeing &
inclusiveness
• Education
partners
• Positive impact
on communities
• Create life
chances
• Overall Employee Engagement score
• Employee turnover rate
• Number of internal promotions
• % of direct employees that are trainees
• Number of training days delivered
• Average number of training days/person
• % of Black, Asian and Minority Ethnic (BAME)
• Diversity and inclusion – % of female employees
– overall and by three management categories
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT 08
Redrow plc Annual Report 2021
09
E SG SCO R EC A R D CO N T I N U E D
All of the FY2021 ESG data contained in this scorecard has been assured at a limited level of assurance according to
ISAE3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, to
evaluate the veracity of the specific KPIs.
This has been undertaken by SGS United Kingdom Ltd in accordance with their Sustainability Report Assurance
protocols, including the Global Reporting Initiative (GRI) Principles for Report Quality. The full Assurance Statement can
be found on our corporate website: investors.redrowplc.co.uk/key-non-financials.
K P I T H E M E
K P I DATA P O I N T
K P I D E F I N I T I O N
Health &
Safety
Number of notifiable
accidents in
financial year/
Average number of
live sites
RIDDOR notifiable accidents that result in an injury across
the Redrow Group and sites divided by average number of
live sites (both in the Redrow FY).
Customer
Net promoter score
(NPS)
NPS is a benchmark score that asks customers how likely
they are to recommend a builder to a friend on a scale of
0–10.
U N I T
R E P O R T E D
(No.)
(%)
(%)
HBF survey 8 week
recommend
– customers that
would recommend
Redrow to a friend
Average Trustpilot
Review Score
This metric is the percentage of customers that have moved
into their home between 8–20 weeks ago that state they
would recommend their builder to a friend in the HBF
survey.
This score is a mean average of every review received on
Redrow’s Trustpilot page during the reporting period. When
reviewing Redrow on Trustpilot, customers choose a rating
between 1 – 5 stars.
(No. 1–5 stars)
Our Targets
Our performance against the targets shown in the scorecard is fully disclosed on our website, along with the full suite of
targets – redrowplc.co.uk/sustainability/our-commitments.
12 MONTH PERIOD
THIS DATA REL ATES
TO (FOR F Y2021)
27 June 2020 to
25 June 2021
F Y 2 02 1
F Y 2 02 0
F Y 2 0 1 9
TA R G E T
0.26*
0.38
0.36
Work towards becoming
incident and injury free through a
10% year-on-year reduction
(AIR) against 2017 baseline
R E A D
M O R E
Page 42
1 October 2019 to
30 September 2020
(results published
annually for this
period in following
March)
1 October 2019 to
30 September 2020
(results published
annually for this
period in following
March)
29 June 2020 to
27 June 2021
50.1%*
52.3%
50.3%
Achieve a minimum
NPS score of 54%
N/A
92.6%*
91.9%
90.9%
Consistently deliver a 94%+
customer satisfaction;
recommend to a friend
(ongoing)
Page 45
4.54*
4.31
3.72
Excellent (>4.3)
Page 45
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT 10
Redrow plc Annual Report 2021
11
E SG SCO R EC A R D CO N T I N U E D
K P I T H E M E
K P I DATA P O I N T
K P I D E F I N I T I O N
Build Quality
and
Considerate
Construction
Average
Considerate
Constructors
Scheme (CCS) score
This KPI demonstrates an average score, out of 50, from all
visits carried out by the CCS in the reporting period. 1
U N I T
R E P O R T E D
(No. out of 50)
NHBC Construction
Quality Review
(CQR) average score
per inspection
The average score (1-6) taken from all scored areas within a
CQR report. This KPI demonstrates the average score, out
of 6, from all CQR visits carried out by the NHBC in the
reporting period. The CQR visits are only applicable to sites
that are registered with the NHBC for Building Control and
Warranty. 2
(No. 1-6)
Average Reportable
Items (RIs) from the
NHBC
The Average RI is the number of all of the RIs received
within the period divided by the number of inspections
carried out on all sites registered with the NHBC. (An NHBC
reportable item (RI) is any contravention of the NHBC
technical standards or building regulations recorded at any
key build stage or frequency visit ) . 3
(No.)
Employees
Overall engagement
score
Overall engagement score taken from annual survey report
provided by Employee Feedback Ltd. 4
(%)
Employee turnover
rate
% of employees who leave the business in the year through
voluntary attrition (resignation or retirement).
(%)
Number of internal
promotions
Number of internal promotions during the financial year.
(No.)
% of direct
employees that are
trainees
% of employees who are apprentices, graduate trainees or
following a training programme, academic or professional
qualification.
(%)
Total number of
training days
delivered
Total number of training hours delivered as face to face,
e-learning or online seminars divided by six hours to give a
number of training days.
(No. of days)
AND
Average number of
training days per
person
The average figure is obtained by dividing this by the
average number of employees in the business during the
year.
*
1
2
Figure verified by SGS.
Covers 100% of Redrow sites. A site is registered with the CCS once Redrow take over as Principal Contractor.
This covers 74 NHBC site inspection reports received from the NHBC in the reporting period. Excludes Greater London sites and some in the
North West as these are not registered with the NHBC but with LABC for which the same data is not available.
R E A D
M O R E
Pages
40 to 41
Pages
40 to 41
Pages
40 to 41
Pages
57 to 58
N/A
Page 58
Page 5
12 MONTH PERIOD
THIS DATA REL ATES
TO (FOR F Y2021)
29 June 2020 to
27 June 2021
F Y 2 02 1
F Y 2 02 0
F Y 2 0 1 9
TA R G E T
36.67*
35.09
35.05
Achieve a minimum
CCS score of 38/50 on
all sites in FY2022
29 June 2020 to
27 June 2021
4.36*
4.13
3.91
Achieve a score of
4.5/6 in FY2022
1 July 2020 to
30 June 2021
0.22*
0.20
0.20
N/A
82%*
81%
81%
N/A
14.3%*
15.3%
17.9%
211*
253
220
N/A
N/A
14.5%*
14.0%
14.5%
15% of our employees being
trainees year-on-year
Measurement taken
from annual
employee survey
carried out
February/March
2021
29 June 2020 to
27 June 2021
29 June 2020 to
27 June 2021
Measurement taken
as at year end date
of 27 June 2021
29 June 2020 to
27 June 2021
4,083 5*
5,925
7,195
N/A
Page 58
1.81*
2.53
3.01
Invest in at least three
training days per employee per
year and work towards 80%
of our in-house training
being accredited
N/A
3
4
5
This covers only sites registered with the NHBC. Excludes Greater London sites and some in the North West as these are not registered with
the NHBC but with LABC for which the same data is not available.
The questions in the engagement index measure two factors important to employee engagement – are employees capable of high levels of
performance and are they willing / keen to deliver? Similar sets of questions are used to determine other organisations’ engagement indices.
The survey covered those employees who are paid monthly representing 81% of the total workforce.
The reason for the fall in number of training days compared to 2020 (5,925 days) is that in 2021 there was no face to face training and all
sessions were e-learning or seminars which tend to be shorter in duration. In 2020 it was primarily face to face training.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT
12
Redrow plc Annual Report 2021
13
E SG SCO R EC A R D CO N T I N U E D
K P I T H E M E
K P I DATA P O I N T
K P I D E F I N I T I O N
Diversity and
Inclusion
% Black, Asian and
Minority Ethnic
(BAME)
% of those self-reporting who identify as BAME. 6
% Female
employees – overall
and by management
category:
Main Board
(includes Non-
Executives)
% male/female employees overall.
% male/female employees on Main Board.
Executive Board
% male/female employees on Executive Committee.
Executive Board
Reportees
% male/female employees as Direct Reportees to Executive
Committee (excluding PAs and those reporting to CEO who
are also on the Executive Committee).
Energy and
Carbon
Group GHG
emissions Scope 1
and 2
Total Scope 1 and 2 GHG emissions from our operations
(sites and offices).
Tonnes of
CO2e
Total GHG
emissions per 100m2
of build
GHG emissions normalised per 100m2 of build.
Operational energy
use
Total energy and fuel consumption used from sites and
offices.
% of electricity
procured from
renewable sources
Average SAP rating
Sustainable
Homes
Average EPC rating
Percentage of electricity used in our operations that is
sourced from renewable sources.
The average SAP rating 7 reported is the mean value at
design stage for the Group Core Portfolio. This is not the as
built SAP rating recorded on completion, and includes
homes in the portfolio recorded at year-end for operations
in both England and Wales.
The average EPC 9 reported is the mode value at design
stage for the Group Core Portfolio. This is not the as built
EPC recorded on completion, and includes homes in the
portfolio recorded at year-end for operations in both
England and Wales.
Tonnes of
CO2e/100m2
kWh
(%)
(No. 1-100)
(A-G rating)
*
6
7
Figure verified by SGS.
Definition of BAME taken from Chartered Institute of Personnel and Development, and does not include those identifying as mixed heritage.
Reporting must include disclosure of % employees who have self-reported. This is based on 88% of employees who have self-reported
ethnicity information.
The Standard Assessment Procedure (SAP) is the methodology used by the Government to assess and compare the energy and
environmental performance of dwellings. SAP quantifies a dwelling’s performance in terms of energy use per unit floor area, a fuel-cost-
based energy efficiency rating (the SAP rating) and emissions of CO 2 (the Environmental Impact Rating). The SAP rating is expressed on a
scale of 1 to 100, the higher the number the lower the running costs. Source: https://www.bre.co.uk/filelibrary/SAP/2012/SAP-2012_9-92.pdf.
U N I T
R E P O R T E D
(%)
(%)
12 MONTH PERIOD
THIS DATA REL ATES
TO (FOR F Y2021)
Measurement taken
as at year end date
of 27 June 2021
Measurement taken
as at year end date
of 27 June 2021
F Y 2 02 1
F Y 2 02 0
F Y 2 0 1 9
TA R G E T
5.14*
5.60%
5.01%
N/A
34.06%*
female
33.90%
female
34.87%
female
N/A
R E A D
M O R E
Page 121
Page 121
Pages
102 and 121
Page 121
Page 121
Pages
157 to 158
Pages
157 to 158
N/A
Page 47
N/A
N/A
28.57%*
female
43%
female
33%
female
25%*
female
27.27%*
female
22%
female
33%
female
22%
female
34%
female
14,680*
15,504*
14,462*
N/A
2.84*
3.01*
2.42*
Reduce the carbon intensity
of our direct operations by 10%
by the end of FY2022
against 2017 baseline
64,294,472*
37,032,239
N/A
3.30%*
N/A
N/A
84*
84 8
84
N/A
N/A
N/A
B*
B
B
N/A
1 July 2020 to
30 June 2021
1 July 2020 to
30 June 2021
1 July 2020 to
30 June 2021
1 July 2020 to
30 June 2021
Representing the
Group Portfolio at
the end of June
2021
Representing the
Group Portfolio at
the end of June
2021
8
9
For FY2020 and FY2019 the SAP/EPC ratings have been reported as the design English SAP results reflecting the core Group portfolio.
Energy performance certificates (EPCs) set out the energy efficiency rating of a building. They are required when buildings are built, sold or
rented. Buildings are rated from A to G, with A representing a very efficient building and G a very inefficient building.
Source: https://www.gov.uk/buy-sell-your-home/energy-performance-certificates.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT
14
Redrow plc Annual Report 2021
15
12 MONTH PERIOD
THIS DATA REL ATES
TO (FOR F Y2021)
1 July 2020 to
30 June 2021
1 July 2020 to
30 June 2021
1 July 2020 to
30 June 2021
1 January 2020 to
31 December 2020
27 June 2020 to
25 June 2021
27 June 2020 to
25 June 2021
F Y 2 02 1
F Y 2 02 0
F Y 2 0 1 9
TA R G E T
8.11*
8.11*
8.97*
10.15*
Reduce construction waste
intensity by 10% by the end of
FY2022 against 2017 baseline
97.65%*
97.65%*
97.4%*
97.65%*
N/A
33.06*
33.06*
18.50
12.47
Reduce the water intensity
of our direct operations by 5%
by the end of FY2022
against 2017 baseline
99.64%*
99.64%*
99.90%
99.92%
N/A
23.5*
23.5*
25.5
26.5
N/A
79.1%*
79.1%*
76.3%
73.7%
N/A
29 June 2020 to
27 June 2021
100%100%
100%
100%
N/A
R E A D
M O R E
Pages
52 and 158
Pages
5 and 158
Pages
49 and 158
Pages
52 to 53
N/A
N/A
Pages
53 and 162
All suppliers of agency/temporary labour staff working on
our sites are monitored for compliance by an external
organisation named Datum RPO.
(%)
29 June 2020 to
27 June 2021
100%100%
100%
N/A
N/A
Pages
53 and 162
E SG SCO R EC A R D CO N T I N U E D
K P I T H E M E
K P I DATA P O I N T
K P I D E F I N I T I O N
Resource
efficiency
Tonnes of
construction waste
per 100m2 build
Construction waste produced per 100m2 of build.
U N I T
R E P O R T E D
Tonnes of
waste/100m2
% of waste diverted
from landfill
The % of waste which is diverted from landfill. This includes
refuse derived fuel (RDF) as well as recycling.
(%)
Water use per
100m2 build
Cubic metres of water used in our sites and offices per
100m2 of build.
m3 per 100m2
build
Supply Chain
– Payments
on time 11
Supply Chain
– Modern
Slavery
% of timber certified
% of timber responsibly sourced and credibly certified to
FSC or PEFC. 10
(%)
Average time taken
to pay invoices
The average time taken to pay supplier invoices and
subcontractor applications from the date of receipt.
(days)
Invoices paid within
30 days
Percentage of invoices and applications paid during the
reporting period within 30 days.
(%)
(%)
All suppliers and manufacturers must submit a detailed
Supplier Appraisal Assessment for approval as part of our
pre-tender qualification process. We have updated the
appraisal forms to track the country of manufacture allowing
us to identify materials supplied by manufacturers with a
high risk profile.
% of material
suppliers and
manufacturers who
have actively
confirmed
compliance with the
Modern Slavery
legislation and
Redrow Code of
Conduct
% of ‘temporary
labour suppliers’
who have actively
confirmed
compliance with the
Modern Slavery
legislation and
Redrow Code of
Conduct
*
10
11
Figure verified by SGS.
Prior to FY2021, our timber was verified as part of the WWF network for responsible timber and includes legal timber. In FY2021, the verified
figure covers only timber certified to FSC or PEFC.
All ‘Payments on time’ KPIs cover 100% of Suppliers and Subcontractors.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT 16
Redrow plc Annual Report 2021
17
OU R BUS I N ESS M O DE L
Our strategy is achieved by channelling our resources
through our strategic principles and ensuring these are
embedded within our relationships with our stakeholders.
B U I L DING
R E S P O NSIBLY P
Land, Plannin
e r v i c e
g
&
V
A
L
E
U
O
I
N
P
L
G
E
G
S
N I T I E
Custo m er S
U
TH RIVI N
C
O
M
M
INP U TS
Land Holdings
Our People
Our Placemaking Skills
Our Financial Resources
S
a
l
e
s
&
M
a
r
k
e
t
i
n
g
CRE ATIN G
LONG- TER M
S USTAI NA BLE
VA LUE
D
e
s
i
g
n
s
m
e
t
s
y
S
&
ercial
m
OUPUTS
Customers
Communities
Suppliers & Subcontractors
Our People
Shareholders
G
o
v
e
r
n
a
n
c
Constru c t i o n
e KPIs
C o m
a n a g e m ent
Risk
M
I N PUTS
Land Holdings
The quality and location of our land holdings is a vital component to enable us to deliver sustainable and profitable
growth. Our experienced land teams focus on the investment in and promotion of strategic land together with shorter
term opportunities receptive to the value we can add through our master planning, placemaking and technical expertise.
Our People
Our employees are at the heart of our business and our results are achieved through the talent, hard work and
dedication of our people.
Our Placemaking Skills
We recognise that the setting of our homes is of equal importance to the quality and design of the individual homes
themselves. Our eight placemaking principles, ‘Redrow 8’ are based on a customer-focused approach to creating better
places to live. By using these principles we will ensure that we leave a legacy of attractive, sustainable and vibrant
places to live for generations to come.
Our Financial Resources
Appropriate financial resources are a key enabler to support the delivery of our strategy. We ensure that our strategic
delivery is regularly and clearly communicated to our investors and our relationship banks.
OUTPUTS
Customers
Our customers are fundamental to our business and we take great care to research their needs, listen to their feedback
and evolve our carefully designed new homes as lifestyles and aspirations change.
Communities
We adopt a collaborative approach, engaging with community stakeholders to ensure our developments become
thriving communities, delivering better places to live.
Suppliers & Subcontractors
We work closely with our experienced suppliers and subcontractors to maintain a strong and reliable supply chain
delivering quality products and workmanship.
Our People
Our employees are fundamental to our business; we invest in attracting and retaining talented people with a key focus on
training and development to enable our people to build rewarding careers and deliver succession planning for the future.
Our Shareholders are the primary providers of financial resources enabling us to create long-term sustainable value.
We aim to provide a balance between capital growth and dividend income to our Shareholders.
Shareholders
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT
18
Redrow plc Annual Report 2021
19
M O R TG AG E A P P R OVA L S
Mortgage approvals remain one of the key indicators
of activity in the housing market.
Approvals in the calendar year 2020 showed a slight
increase on the previous year.
Seasonally adjusted figures for January 2021 to June
2021 average a healthy 86,000 per month.
M O R TG AG E A P P R OVA L S C A LE N DA R
Y E A R ( N O. – ' 0 0 0)
798
796
781
789
801
OU R M A R K E TS
P L A N N I N G
The Government has been talking about speeding up
the planning process and introducing revolutionary
change to help ease the housing crisis for a number
of years. However so far this has been difficult to
achieve. We will now have to wait for the Planning Bill
to be published later in the year to see whether the
Government has the stomach for any fundamental
changes to the system. This uncertainty is having the
effect of continued delay in the production of local
plans and planning permissions granted. Whilst the
Government has continued to consult on changes to
the system over the last five years, rather than
actually making any significant changes, there has
been a continued reduction in housing units granted
planning permission. In 2021 the number of housing
units granted planning permission dropped below
300,000 for the first time since 2016 (see graph
below).
The introduction of the National Model Design Code
and the potential for further changes to the system in
the forthcoming Planning Bill will only add to further
delay in the grant of deliverable planning permissions
in the next few years. The ability of the industry to
increase the number of active sales outlets and
deliver anywhere near the national target of 300,000
homes every year is being severely hampered by the
planning system. This is likely to remain so until
fundamental changes are made to the system and
those in genuine housing need are given a real voice
in the decision making process. Digitalisation of the
system, one of the Government’s key proposals, may
just offer some hope of improving engagement in the
system.
H O U S I N G U N IT S G R A NTE D
P L A N N I N G P E R M I S S I O N
( Y E A R TO E N D O F M A R C H ) ( N O. – ' 0 0 0)
H O U S I N G S U P P LY A N D H E LP TO B U Y
NHBC new starts reduced significantly in 2020 as a
result of the pandemic but are recovering in 2021 to
more normal levels. Help to Buy transactions also
reduced significantly in 2020 until the final quarter
when they exceeded pre-pandemic levels.
R E S I D E NTI A L TR A N S AC TI O N S
Housing transactions overall, apart from Q2 2020,
were fairly resilient in the face of the pandemic.
House prices have increased each quarter and that
trend is continuing in 2021.
N H B C A LL S E C TO R S
( E N G L A N D A N D WA LE S) ( N O. – ' 0 0 0)
Q4 18
Q1 19
Q2 19
Q3 19
Q4 19
Q1 20
31.0
31.5
34.9
37.7
26.9
30.5
Q2 20
13.5
Q3 20
30.9
Q4 20
26.8
Q1 21
Q2 21
32.5
37.2
P R I VATE H O U S I N G CO M P LE TI O N S
( E N G L A N D) ( N O. – ' 0 0 0)
35
30
25
20
15
10
5
0
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Source: Ministry of Housing, Communities and Local Government
N ATI O N W I D E H O U S E P R I C E
(U K AV E R AG E ) ( £ – ' 0 0 0)
216
218
220
224
230
232
243
16
17
18
19
20
Source: Bank of England, CML
M O R TG AG E A P P R OVA L S 2 02 1
( S E A S O N A LLY A DJ U S TE D) ( N O. – ' 0 0 0)
Source: NHBC
329
314
327
315
295
97
87
82
85
86
80
H E LP TO B U Y E Q U IT Y LOA N
CO M P LE TI O N S ( N O. – ' 0 0 0)
25
20
15
10
5
0
17
18
19
20
21
JAN
21
FEB
21
MAR
21
APR
21
MAY
21
JUN
21
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q4
19
Q1
20
Q2
20
Q3
20
Q4
20
Q1
21
Q2
21
Source: MHCLG Statistical Release – Planning applications in England
Source: Bank of England, CML
Source: Assets.publishing.service.gov.uk
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT
20
Redrow plc Annual Report 2021
21
C H A I R M A N ’ S S TATE M E NT
“I am delighted to be able to report the Group delivered
an excellent performance in the year to the end of June
2021 with better than expected results.”
Redrow’s award winning Heritage product has proved
popular with buyers ever since it was launched over ten
years ago. The range of primarily detached house types
has evolved over the years and its industry-leading design
remains appealing to buyers looking for an attractive home
with well-planned space in a great place to live. This has
never been more so than during the past year as
homebuyers re-evaluated their lifestyle and working needs
during the pandemic.
The Heritage Collection’s popularity and appeal to a broad
market was key to dispelling any concerns over the impact
on our business of the changes to the Help to Buy scheme
that excluded second-time buyers and introduced regional
price caps. In the second-half of the year, Help to Buy
accounted for just 13% of private reservations compared to
50% in the same period last year.
The high demand for our homes resulted in us closing the
year with another record order book of £1.43bn (2020:
£1.42bn) despite delivering significant growth in legal
completions and revenue.
F I N A N C I A L R E S U LT S
The Group delivered 5,620 legal completions in the year
(2020: 4,032). These completions generated revenue of
£1.94bn (2020: £1.34bn) and profit before tax of £314m
(2020: £140m). Earnings per share increased by 124% to
73.7p (2020: 32.9p).
The Group reversed an opening net debt position of £126m
to end the year with net cash of £160m after making a
significant investment in new land.
As a consequence of this strong performance, the Board is
proposing a final dividend of 18.5p making a total of 24.5p
for the year, in line with the company’s policy of three times
dividend cover. Subject to shareholder approval at the
Annual General Meeting on 12 November 2021, this will be
paid on 17 November 2021 to all shareholders on the
register at close of business on 24 September 2021.
S TR ATE GY
The Group last year announced its intention to largely
withdraw from the London market and focus on its regional
businesses and, in particular, the Heritage Collection.
Excellent progress has been made during the year to
implement this strategy. The Group successfully exited and
disposed of a number of London sites that it decided not to
build and took the first steps to open a new regional
J O H N TUT TE
Non-Executive Chairman
Against a background of much uncertainty at the start of
the financial year, I am delighted to be able to report the
Group delivered an excellent performance in the year to
the end of June 2021 with better than expected results.
Turnover increased by 45% to £1.94bn and profit before tax
more than doubled to £314m.
The Group entered the year in good shape and well-
prepared to take advantage of any bounce-back in demand
following the first lockdown. The order book was at a
record level and work in progress carried forward was
higher than normal, partly due to a conscious decision to
increase production in anticipation of higher Help to Buy
demand ahead of the original scheme drawing to a close.
A strong market emerged from the lockdown driven by the
Stamp Duty holiday and, in the earlier part of the year, by
keen demand from buyers that would be excluded from the
Help to Buy scheme after March 2021. The potential for a
hiatus in the 2021 Spring market that we highlighted last
year didn’t materialise as the Chancellor decided to extend
the Stamp Duty holiday to September 2021 with a phased
return to previous rates. Given the unquestionable success
of the temporary reductions in Stamp Duty to stimulate the
housing market and its obvious knock-on benefits to the
wider economy, we repeat our previous requests for
government to consider a permanent reform of this tax,
which is a constraint on the market.
business in the south that is expected to make a positive
contribution in financial year 2023.
Following a pause in land buying during the early months
of the pandemic, combined with the decision to withdraw
from the London market, growth in active outlet numbers
stagnated. Capital released from London is now being
reinvested to help grow the regional businesses and during
the year, the Group added over 8,000 plots with planning,
with a projected GDV of over £3bn, to its owned and
contracted land holdings. As a consequence of this strong
land buying performance, the Group is now back on-track
with a pipeline of new outlets that will return the business
to a pre-pandemic pattern of growth and an incremental
recovery in profits and margins.
B OA R D C H A N G E S
As previously announced, after nearly twenty years at
Redrow, I will be stepping-down as Chairman and retiring
from the company on 15th September 2021. I am delighted
that I will be succeeded by Richard Akers. Richard joined
the Board at the beginning of June and has been intensely
engaged in the business as part of a comprehensive
induction programme ahead of him taking up his new role.
Matthew Pratt was appointed Group Chief Executive at the
beginning of the financial year. Matthew has rewarded the
board’s confidence in his appointment by expertly steering
the business through a difficult operating period and laying
the foundations for a return to long-term growth. He has
also set out his vision for an innovative business centred
on developing thriving communities, building responsibly
and valuing our people.
I am confident under Richard’s chairmanship and Matthew’s
leadership the business will go from strength-to-strength.
Nick Hewson will be stepping down from the board in 2022
after serving nine years as a Non- Executive Director.
Throughout most of his tenure, Nick has chaired the Audit
Committee and since 2018 has been the Senior
Independent Director. I would like to take this opportunity
to thank Nick for his valuable contribution to the business.
A process is underway to appoint Nick’s replacement.
TR A D I N G A N D O UTLO O K
The buoyant housing market has moderated in recent
months and we anticipate sales rates will return to
historically average rates over the course of the current
financial year. It is on this basis we have planned for the
future and we are confident our timely investment in land,
combined with strong demand for our Heritage homes, will
support our longer-term growth aspirations. Additionally,
our record order book also provides us with an excellent
platform for the future with over £1.3bn of revenue already
secured for the current financial year. As a result, the
business is well-placed to deliver another set of strong
results.
A N D F I N A LLY. . .
Great people make great businesses and Redrow owes
much of its success to a team of talented and committed
people. Their performance over the past year to deliver an
excellent set of results against the challenges posed by the
pandemic has been outstanding and I thank them all for
their hard work.
It has been a privilege to work for Redrow for nearly twenty
years and to share in its ongoing success. I am immensely
grateful to colleagues, past and present, for their support
and dedication. I am indebted to my Board colleagues who
over the years have always given wise counsel and
encouragement. I wish them and the rest of the Group all
the very best for the future.
J O H N TUT TE
Non-Executive Chairman
14 September 2021
Image: Monchelsea Park, Maidstone, Kent
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT 22
Redrow plc Annual Report 2021
23
G ROU P C H I E F E X ECUTI V E’ S S TATE M E NT
“We ended the financial year with another record forward
order book of £1.43bn (2020: 1.42bn) of which 73% was
exchanged. This provides the business with an excellent
foundation for the future with over £1.3bn of our turnover
secured for 2022.”
have now been selling beyond the cut-off date for the
holiday for well over six months without any negative
impact on reservation levels, as demonstrated by our
record order book.
The number of homes sold with Help to Buy reduced
considerably. Following the introduction of the new
regional price caps, the scheme represented just 13% of
private reservations in the second half and 28% across the
full financial year. As the scheme draws to a close, and the
market continues to adapt, we expect a negligible impact
on reservations.
Redrow capitalised on some excellent land opportunities in
the financial period under review. Achieving above average
hurdle rates, we added c8,300 plots in the year with a GDV
of over £3bn. Our award winning Heritage Collection
accounted for 79% of private homes revenue, which
enables us to satisfy demand at scale and deliver
efficiencies. The desirability of our product, combined with
our aesthetically pleasing designs, means planners across
England & Wales are happy to see our homes incorporated
within their communities.
As we continue to build in prime locations, our products
and places are within reach of many families aspiring to a
larger home. Our average reservation rate for the year was
0.70 (2020: 0.67) and, more importantly, the reservation
value per outlet increased to £288K per week (2020:
£259k), excluding private rented sector, as we delivered an
industry leading reservation rate on a revenue basis.
In the year, we saw considerable house price inflation
across England & Wales with the exception of London. In
the regional businesses, due to a combination of house
price inflation and geographical mix, reservation prices
increased on average by c5% across the financial year,
particularly in the final quarter, which was more than
enough to offset build cost inflation of c5%.
We have continued to work largely uninterrupted across all
our sites during the year. However, there have been some
supply interruptions and specific shortages in steel, timber
and cement-based products. In conjunction with our supply
partners, we have mitigated the impact of these
interruptions and we are confident that our close working
relationships will allow us to continue to build unhindered.
We expect that supply pressures will ease as more
M AT TH E W P R AT T
Group Chief Executive
OV E RV I E W
The Group delivered a strong performance during the year,
as long-term social trends continued to underpin demand
for our premium homes and places. Customers attached
additional value to our larger, mainly detached family
homes designed to offer flexible and modern living.
COVID-19 also highlighted the growing desire of
homeowners to live within our prime locations, created
with our own market-leading placemaking principles.
This high level of differentiation was key as we successfully
navigated the end of the original Help to Buy scheme and
the Government’s temporary Stamp Duty changes. Total
legal completions increased by 39% to 5,620 from 4,032 in
the previous year with revenues increasing by 45% to
£1.94bn (2020: £1.34bn).
We ended the financial year with another record forward
order book of £1.43bn (2020: 1.42bn) of which 73% was
exchanged. This provides the business with an excellent
foundation for the future with over £1.3bn of our turnover
secured for 2022.
We welcomed the introduction of the Government’s Stamp
Duty holiday, which helped homeowners and the wider
market at a time when market stimulation was required. We
capacity is brought on stream to deal with high demand for
materials.
As announced in June 2020 we made the strategic
decision to exit the London market on all the sites where
we hadn’t commenced build. Our scaled-down London
operation is now concentrating on our large
redevelopment site at Colindale. During the year we
successfully received planning for a further 1,100 homes at
Colindale ensuring that we will be developing this
successful site for some considerable time.
We have completed the exit of the six London sites we
decided not to build out. Our owned interest in three of
these were sold, albeit one was at the start of the current
financial year, and the other three were not acquired. The
proceeds of the London site disposals are being
reinvested in our strong divisional network across England
& Wales, including the new Southern division, which will be
based in Crawley and is expected to make a contribution
to turnover in the 2023 financial year.
P E O P LE M A K I N G TH E D I F F E R E N C E
Keeping our colleagues and customers safe is our first
priority. During COVID-19, we have continued to adopt
secure protocols for our customers and colleagues.
Despite no longer being mandatory, we will continue to
encourage mask wearing where appropriate, alongside a
thorough cleaning regime.
This approach has been supported by comprehensive
training from our in-house team. The availability of online
modules has ensured new and existing colleagues have
access to training on our COVID-19 secure working
protocols, regardless of their location.
We have also introduced flexible working and many
colleagues have been working from home during the
pandemic. This has proved to be very effective and, going
forward; colleagues will be able to work from where they
are most efficient, whether that be at home, site or within
divisional offices. Based on the feedback we have
received, these steps have improved colleagues’ general
mental health and we have extended our wellbeing
offering to colleagues, and their families, during the year.
Our people – whether they are directly or indirectly
employed – are key to us maintaining a competitive
advantage. Therefore, during the year, I was pleased to
see us become a Real Living Wage employer and to extend
this benefit to our subcontractor partners.
Furthermore we are committed to ‘inspiring the next
generation to build’ as one of the central aims within our
Valuing People strategy. In May 2021, I was delighted to
attend the opening of the first NHBC brickwork Training
Hub at our Amington Garden Village development in
Tamworth. Officially opened by Chris Pincher, the Minister
of State for Housing and MP for Tamworth, it is a great
example of partnership working and will enable applicants
from other home builders, as well as Redrow, to complete a
bricklaying apprenticeship within an accelerated 18 month
period, making it attractive to those looking to move into
construction from another sector.
I N V E S TI N G I N P L AC E S
As I stated in my 2020 Chief Executive review, at the onset
of COVID-19 we temporarily postponed the purchase of
new land as part of measures to protect cash flow and also
renegotiated favourable deferment terms on our existing
obligations. Post the initial lockdown we returned to the
market, taking a sensible and balanced view with regard to
land acquisition.
This resulted in some constraints on our active outlet
numbers and, together with the strength of the market, has
seen the number of outlets reduce over the last 12 months.
We closed the year working from 120 outlets and expect to
remain at a reduced level for the forthcoming year until
new land acquisitions come on-stream.
As stated above, we capitalised on strong land
opportunities in the financial period under review.
Achieving above average hurdle rates, we added 8,290
current land plots in the year with a total GDV of over £3bn.
Therefore, our owned and contracted land holdings with
planning totalled 29,460 plots (2020: 27,000). Pull through
from Forward Land accounted for 3,539 of the plots added.
Housing Secretary Robert Jenrick officially launched the
Building Beautiful Places plan in July 2021. Whilst we
support the broad intentions of the new code and
framework, we believe that opportunities have been
missed. The report’s recommendations have failed to take
into account underlying lifestyle changes, which have been
accelerated as a result of the pandemic.
In a survey we commissioned of c.2,000 consumers, an
overwhelming majority (77%) said they aspired to live in a
two storey detached home. Only 3% and 4% of respondents
stated they would choose to live in a terraced home or
townhouse respectively. This is contrary to the central
ethos of the National Model Design Code (NMDC), which
supports higher density development.
A positive outcome of the NMDC launch is the focus on
community consultation. This is essential to delivering
places where people want to live. For a number of years
we have been extending our reach via social media and
digital methods to ensure all members of the community
have an opportunity to input their views into developments.
Given that c80% of our product is standard and adopted by
planning authorities across England & Wales, we are
confident we are meeting the needs of both customers and
planning authorities.
.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSTRATEGIC REPORT 24
Redrow plc Annual Report 2021
25
G ROU P C H I E F E X ECUTI V E’ S S TATE M E NT CO N T I N U E D
I N N OVATI O N AC R O S S R E D R OW
Since my appointment as Chief Executive, I have set a
clear direction of evolving, rather than revolutionising, our
successful strategy. Alongside this approach, I have
launched Redrow 2025. It is an ambitious vision, which is
focused on accelerating innovation across the business.
The process began with the biggest team consultation in
Redrow’s history, with over 2,000 colleagues inputting
their thoughts via a combination of virtual conferences,
surveys, focus groups and one to one meetings. All the
ideas have been collated within our three strategic themes:
Thriving Communities, Building Responsibly and Valuing
People.
This approach is ensuring new projects are efficiently
implemented throughout the business and embraced by all
teams. Initiatives include a completely new approach to
flexible working with colleagues actively involved in
developing collaborative workspaces; a Green Academy to
ensure colleagues have the right skills to meet the climate
challenge; volunteering and delivering digital programmes
to create efficiencies for customers and Redrow.
This culture of constant innovation extends across all our
day-to-day business operations. During the financial year,
we reviewed and refreshed the Redrow brand, in tandem
with our sales centre visitor experience.
New sales outlets have been re-named as ‘Customer
Experience Suites’ reflecting their new role supporting
customers throughout their whole journey, whether they
are visiting Show Homes or meeting with customer service
and site colleagues to undertake Hard Hat and Home
Preview visits.
We are the first major house builder in the market to
remove paper from our sales outlets. We have been able to
take this important step by connecting great people with
integrated digital technology. Key features of the new
suites include digital screens throughout - all of which can
be updated remotely to ensure consistent messaging
across all outlets. There are also interactive site plans and
iPads, where customers can view choices and upgrades,
and even complete their reservation online.
Our new, refreshed brand focuses on our ‘better way to
live’ purpose, highlighting in equal measure our product,
placemaking and service credentials. These steps are part
of our constant innovation of the customer journey to
create an excellent online and offline experience.
reviews. At the time of writing, Redrow is also the only
volume house builder to be rated as ‘excellent’ on
Trustpilot. Any feedback is carefully analysed and fed into
our root cause process, which aims to iron out any
recurring issues.
We were delighted that 24 of our site managers received a
Pride in the Job Quality Award this year.
The accolade, established by the National House Building
Council, celebrates the exceptional contribution-winning
site managers make in creating homes of outstanding
quality. Pride in the Job first launched over forty years ago
and is the most highly regarded competition in the house-
building industry.
In the period under review, we launched our Homeowner
Support Portal. Part of My Redrow, it contains over 50
self-help videos along with the ability for customers to
submit their warranty issues online.
Our core systems have been created in-house, enabling
warranty items to be seamlessly integrated into our
back-end systems. This creates efficiencies for customers
and the business as we reduce the administrative burden,
freeing up more time to proactively develop customer
relationships.
This technology will play an important role as we prepare
for a seamless transition into a New Homes Ombudsman
(NHO) regime. At Redrow, we see the NHO’s introduction
as an opportunity. It will provide another way of
demonstrating our differentiation and set us apart from
competitors.
Redrow is predominantly a housebuilder, however, we have
historically built a small number of high-rise buildings
mostly on a design & build basis by main contractors. Ten
schemes have now been identified as potentially not
conforming to the current government regulations. Each
development is unique and was designed in accordance
with the building regulations and accepted practices at the
time.
We are very aware of the stress and burden on residents of
high-rise apartments across the country that have remedial
issues based on the new standards and guidance set by
government. We are encouraging management companies,
where appropriate, to apply directly to the Building Safety
Fund and we will continue to engage with government,
contractors, leaseholders and all other parties to help
identify solutions to this complex industry issue.
C U S TO M E R S & Q UA LIT Y
Innovation is about constantly raising standards, and we
have continued to make progress across all aspects
relating to customers & quality.
We have once again secured a Home Builders Federation
Five Star award following thousands of positive customer
M E E TI N G TH E C LI M ATE C H A LLE N G E
The success of Redrow and the overall contribution we
make to wider-society is dependent on how we manage
the environmental and social factors that influence our
business model. Our approach connects social,
environmental and economic value across the business
and is underpinned by good governance, which leads to
better long-term decisions.
the right assurance processes, and the measurement and
reporting of our impact on both wildlife and people.
In the spring, we undertook a comprehensive review of our
Environmental, Social and Governance (ESG) performance.
We have prioritised those issues that are most material to
our business and we have, for the first time, published our
comprehensive ESG scorecard to reflect this review.
Climate change, together with biodiversity loss, is the most
urgent environmental issue we face. The UK government
has set a target to achieve Net Zero Carbon by 2050. We
believe that whilst this presents significant challenges,
there is also great opportunity to learn from the science; to
innovate and to future-proof the homes and communities
we build.
In the last year, we have reduced overall emissions by 6%.
In particular, we have made great progress in improving
the energy-efficiency of our building fabric specification,
along with improving the integrity of our data and
collaborating with our supply-partners to drive innovation.
We were excited to see the trial of a pioneering low-carbon
heating solution get underway at our site in Scissett,
Yorkshire. The solution offers a smart home and energy
management system that seeks to deliver net zero
electricity use in the home. We are also collaborating with
several major manufacturers to assess the practical and
design implications of air-source-heat-pumps. These trials
form part of our wider product development and
specification strategy to meet the forthcoming Future
Homes Standard and the phasing out of gas boilers from
2025, and as we look beyond to deliver genuine net zero
carbon homes that are both comfortable and affordable.
In recognition of our progress on mitigating climate
change, we were delighted to secure a position as one of
the Financial Times Europe's Climate Leaders in the year.
Looking forward we have committed to sign-up to the
Science Based Targets initiative (SBTi) and partner’s
Business Ambition for 1.5°C campaign. In making this
commitment, we are demonstrating the highest level of
ambition as set by the SBTi in the short and longer term.
We have also committed to reach science-based net zero
emissions no later than 2050. We will set interim science-
based targets across scopes 1, 2 and 3, in-line with the
criteria and recommendations of the SBTi. In doing this we
also join the UNFCCC Race to Zero. Furthermore, we will
advocate for ambitious government policies that align to
1.5°C to support the transformational change that the UK’s
net zero target requires.
The publication of our Nature for People strategy in
partnership with the Wildlife Trusts has given Redrow the
solid foundation blocks to ensuring that we leave a positive
environmental legacy. The next phase of our plan will see
the implementation of our 15 commitments, establishing
In preparation for the forthcoming requirement to achieve a
Biodiversity Net Gain (BNG), we undertook eight pilot
projects to understand what changes we need to make to
our design approach. The results are positive with on-site
net gains achievable on 63% of the test projects. During
the year, we held BNG training workshops with all of our
delivery teams and further work is underway to establish a
blueprint for achieving gains for nature on all new
developments.
This year we have seen some great examples of how we
are delivering Nature for People in-practice and enhancing
habitats in line with the mitigation hierarchy. At our new
development in Haverhill, we have retained and improved
existing hedgerows to achieve a forecast 18% net gain in
these important habitats, as well as creating cycle routes
and footpaths through extensive green corridors and
wildflower meadows.
This year saw the conclusion of our ‘Reduce the Rubble’
research project – a pioneering initiative that captured
both the quantity and the root-cause for every element of
construction waste generated during the build of our most
popular house type. The study identified more than thirty
opportunities for eliminating and reducing waste, several of
which have now been implemented.
Overall, we are making important strides forward in ESG
and I am looking forward to seeing that progress continue.
B OA R D C H A N G E S
I’d like to place on record my thanks and appreciation to
John Tutte who will be retiring and leaving the Group in
September after nearly 20 years of outstanding service.
During John’s time at Redrow, he has held the position of
CEO and latterly as Chairman. On behalf of the whole
Redrow team, we wish John a long and happy retirement.
Following John’s retirement, and as planned, Richard Akers
now becomes Non-Executive Chairman. I am very much
looking forward to working with Richard and continuing
Redrow’s progress in the future.
M A R K E T O UTLO O K
The fundamentals of the market remain strong, with record
low interest rates; good mortgage availability and healthy
employment data.
In addition, government recognises that housebuilding
creates a positive multiplier effect across the domestic
economy and has a key role to play in its ‘levelling up’
agenda. It has an ambitious target to achieve a much-
needed 300,000 new homes per year by the mid 2020’s.
We are proud to play our part in addressing this chronic
shortage of quality family homes across England & Wales.
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G ROU P C H I E F E X ECUTI V E’ S S TATE M E NT CO N T I N U E D
The sales rate (0.84) in the first 11 weeks of the financial
year under review reflected unprecedented levels of
demand as the country emerged from lockdown,
supplemented with the launch of the Government’s
temporary Stamp Duty Holiday in July 2020.
Our sales rate in the first 11 weeks of the new financial year
was 0.66 (2020: 0.84). This reduction was due to our
record forward order book and therefore limited availability
of homes for sale that can be delivered within the next six
months. This strong order book, however, provides
certainty going forward as our teams continue to increase
production levels and look to bring more sites on stream to
satisfy ongoing high demand.
Overall, we have an excellent platform to continue
delivering and evolving Redrow’s successful strategy in
the future. Our high level of product differentiation is
compounded by social trends towards customers desiring
larger, quality family homes in great places.
I would like to thank Redrow’s colleagues and partners for
their continued hard work and commitment. Our great
people will continue to play a key role as we meet the
long-term demand for our products and places across
England & Wales.
M AT TH E W P R AT T
Group Chief Executive
14 September 2021
Image: Penlands Green, Haywards Heath, West Sussex
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O PE R ATI N G R E V I E W
communities from an early stage so that we can
incorporate local views into our design vision. This means
using a range of methods from the earliest stage in the
development of a concept to capture local views and then
consulting them as the design develops. On all of our
projects we strive to:
• Present the vision and design concept for the proposals
to the local planning authority and others in advance of
developing a detailed design where possible;
• Hold community consultation or collaboration events to
present the proposals, discuss potential revisions and
gather feedback;
• Consider the views of the local community in shaping the
proposals;
• Involve the local community in design and placemaking
opportunities;
• Hold events within the new development for the new
residents as it develops to help establish a sense of
community; and
• On larger developments hold regular meetings with the
new community and existing wider community, provide
updates through newsletters and set up a community
website page.
We have developed a 'Participation Guide' unique to
Redrow which sets out principles for the planning,
communication and follow up of all community consultation
and collaboration events. These 18 principles ensure that
we provide maximum opportunity for involvement and
comment from the whole of the community, we listen to and
communicate clearly and we continue communication
through the build programme and beyond.
O U R P L AC E S
Redrow is committed to creating Thriving Communities,
places where people can thrive, with beautiful open spaces
for residents to enjoy and amenities that encourage
neighbours to come together.
The experience of the COVID-19 pandemic and the
resulting lifestyle changes have influenced customer
requirements. We have found that our particular approach
of delivering high quality spacious homes set in well
designed landscape-led places is exactly what people are
looking for, now more than ever.
TH E I M P O R TA N C E O F P L AC E M A K I N G A N D
D E S I G N
Redrow 8
Our ‘Redrow 8’ placemaking principles, now in place for
over two years, continue to be a robust set of commitments
that are demonstrably delivering the types of places where
our customers want to live. The eight principles, which
were developed with our customers’ needs in mind,
provide a framework for the creation of beautiful,
sustainable, well connected and well landscaped places
that incorporate nature and are pedestrian and cycle
friendly. They deliver places where people have the choice
to live a sustainable lifestyle with opportunities to make
green travel choices, in particular making it easy and safe
to walk or cycle as well as having space to charge an
electric car. Our eight design principles have proved to be
very effective at creating accessible places for everyone,
that are beneficial to health and wellbeing by providing
destinations such as walking and running loops, allotments,
outdoor gyms and meeting places. High quality
landscaping, the integration of thoughtful blue and green
infrastructure (the combination of ponds, streams and
drainage features, like swales with open spaces and
landscapes) delivered early on together with the
incorporation of nature (through our Nature for People
principles and our commitment to biodiversity net gain)
delivers positive outcomes for people’s health and
wellbeing and for local wildlife.
Our Redrow 8 placemaking principles and measures, which
were developed with advice from leading independent
urban design experts, are being used by all our divisional
teams to guide and shape layouts and masterplans. To date
over 75% of emerging designs have been assessed and
benchmarked using the Redrow 8 scorecard and this will
increase to 100% by the end of the new financial year.
This internal assessment tool highlights at an early stage
any areas of the draft design that need to be revised or
refined to successfully deliver our placemaking vision and
ensure that our new communities are the best they
possibly can be for our customers and the existing
community. The assessment tool also provides a ‘Health
and Wellbeing’ score which provides an indication of how
healthy the resulting place will be. Again, this process
means we can adjust and refine our design approach as
necessary to deliver new developments that provide for
healthy lifestyles. For example, the tool asks if we can do
more to integrate green travel options or green and blue
infrastructure.
As Wales has its own planning system we have developed
a specific set of Redrow 8 design principles for use on our
developments in Wales. These were created through a
series of workshops with key design stakeholders and
experts including the Design Commission for Wales, Play
Wales, Public Health Wales and the Wildlife Trusts. This has
resulted in the publication of a design manual this year and
the creation of a Wales-specific Redrow 8 scorecard which
is now being used to assess and shape our developments
there.
With our eight principles now firmly embedded in our
design approach across the Group, this year we launched
an annual awards process to recognise great place making
across our divisions.
With an award for each of our eight placemaking categories
it is also an effective way to demonstrate what ‘good’ looks
like and how we are delivering beautiful sustainable places
to live. Each of the Redrow 8 principles has a ‘stretch
measure’ which seeks to push us beyond best practice and
many of the awards have been for this level of exemplary
placemaking. We received over 50 entries from across our
divisions with the winning developments selected by a
judging panel in June 2021. The winning developments are
showcased on pages 30 to 33.
Our Commitment to Community Collaboration and
Consultation
The first of our 'Redrow 8' principles is 'Listen to Learn'
which is a commitment to listen to and engage with local
Image: Caddington Woods, Chaul End, Bedfordshire
Image: Community Collaboration Consultation
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STRATEGY IN ACTION
R E DROW 8 AWA R DS
LI S TE N TO LE A R N
W I N N E R : P L A S DŴ R G A R D E N C IT Y
Plasdŵr has won this year’s Listen to Learn award in
recognition of the exemplary approach taken by the
team to engage with local communities and other key
stakeholders in the design and delivery of a new
Garden City for Cardiff comprising up to 7,000 new
homes within five walkable neighbourhoods.
From the start of the design process an open approach
has been adopted to ensure that all of the existing local
communities and key stakeholders are fully informed of
proposals as they developed and that they had the
opportunity to comment at every stage. We worked
closely with a range of local stakeholders and refined
the design approach to address comments wherever
possible. This collaborative approach continues as the scheme vision turns into reality through the
commencement of starting infrastructure works and the construction of homes. The local Redrow team hold
regular drop-in meetings for the local communities, send out newsletters and have established a continually
managed ‘get in touch’ direct email account and the appointment of a Plasdŵr specific Community Liaison Officer.
The scale of Plasdŵr, bordering several existing community councils, and its significant strategic importance for
Cardiff and the wider region means engagement has been a key driver in establishing long term relationships
with all stakeholders.
K E E PI N G IT LOC A L
W I N N E R : H O R S F O R TH VA LE
Our recently completed Horsforth Vale community in
Yorkshire has won this year’s ‘Keeping it Local’
award. This mixed-use new community comprising
500 new homes of a wide range of types and tenures
as well as a café/bakery and shop already sits
comfortably within the local area and brings benefits
to the existing and new community.
We have used local materials including York stone and
slate roofs together with dry stone walls to knit the new
development into the wider landscape and ensure it
reflects the local character. Despite the fact this was a
‘brownfield’ site and the location of a former chemical
plant, the Yorkshire division worked carefully to retain
existing features and landscape on the site and weave them into the new development.
For example, a former historic mill building was restored and re-imagined as apartments and the mill pond was
also restored. Existing landscape features such as mature trees and hedgerows were retained and incorporated
helping to knit the new community to the area and the wider context. This approach also contributes to a positive
impact on biodiversity as well as a sense of belonging from the very start.
E A SY TO G E T A ROU N D
W I N N E R : A M I N G TO N G R E E N
Amington Green has won the ‘Easy to Get Around’
award for its comprehensive network of pedestrian
and cycle routes.
Once complete, Amington Green will be a mixed-use
community comprising a total of 1,100 private and
affordable homes, a new primary school, a new local
centre and 25 hectares of new open space. All of these
new facilities and destinations will be easily accessible
from every home via attractive tree-lined streets,
quieter ‘shared surface’ streets as well as a network of
footpaths and cyclepaths running through the green
and blue infrastructure network.
This network connects to the wider movement network and to other local destinations as well as making the new
destinations and green spaces accessible to the wider existing community. This pedestrian and cycle network will
mean that sustainable transport options are available to all residents and that opportunities to live an active
lifestyle are embedded and encouraged in the community from an early stage.
PL AC E S TO G O A N D TH I N G S TO DO
W I N N E R : E B B S F LE E T G R E E N
Ebbsfleet Green is the winner of the ‘Places To Go
and Things To Do’ award for its fantastic choice of
facilities and destinations for the new community.
Our 905 homes (including a mixture of private and
affordable homes of a wide range of types from
detached homes to apartments) are arranged as a
walkable community with all everyday facilities
provided within a short walk of every home and where
green travel options are practical and attractive.
In addition to the homes we have delivered
employment space, a hotel and pub, a convenience
store, an outdoor gym, a series of trails and nature
areas, two play areas and we will soon be delivering a new primary school, community centre and allotments. All
of these facilities are provided within an easy, safe and attractive walk from every home ensuring that a
sustainable neighbourhood with a vibrant sense of community is delivered.
This walkable community in turn forms part of the wider Ebbsfleet Garden City which has a further supporting
selection of facilities that are easily accessible from Ebbsfleet Green.
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STRATEGY IN ACTION
R E DROW 8 AWA R DS
N ATU R E F O R PEO PLE
W I N N E R : C A D D I N G TO N WO O D S
This year’s ‘Nature for People’ award goes to
Caddington Woods where we are providing eight
hectares of new open and natural spaces and where
we are delivering a 63% net gain in biodiversity.
Woodland areas have been retained, incorporated into
the development and enhanced so that they make a
significant contribution to biodiversity.
We have also used sustainable drainage techniques to
create attractive ponds that are also great for nature, as
well as improving the existing ponds and creating new
habitats for wildlife including species-rich grassland
and native shrub planting.
H O M E S F O R A LL
W I N N E R : CO LI N DA LE G A R D E N S
Colindale Gardens has won this year’s ‘Homes for All’
award for its wide range of housing tenures and
types.
As well as private housing Colindale Gardens will
deliver a significant proportion of Private Rented
housing as well as affordable homes to rent and for
shared ownership sale. Overall, 35% of the homes will
be affordable and the development will deliver a wide
range of housing types across all tenures from one, two
and three bedroom apartments to townhouses. All
homes are tenure blind and integrated across the
masterplan meaning that the new community becomes
embedded from the beginning.
All of these features are incorporated into a multi-functional green infrastructure network that includes play areas
as well as walking and cycling routes. Our team successfully worked closely with the RSPB to establish the best
way to manage and improve the woodland for wildlife.
Together with the proposed 10,000sq.ft of retail and commercial uses, a new primary school as well as a network
of open spaces, this balanced and integrated mix of housing provides for a vibrant and thriving community that
links into the existing area.
S TR E E TS F O R LI FE
W I N N E R : WO O D F O R D G A R D E N V I LL AG E
Woodford Garden Village is our winner of this year’s
‘Streets for Life’ award for its beautiful hierarchy of
streets from tree-lined avenues to intimate quiet,
well landscaped, community streets.
The 920 home development will, once complete,
comprise a mixed tenure, mixed-use community
containing a primary school, local centre, pub and a
wide range of green routes and spaces all linked
together by a network of beautiful streets.
The Woodford Garden Village masterplan is based on a
network of green and blue infrastructure routes and
spaces including swales and ponds which not only
provide an attractive setting for footpath and cycle routes but create a robust network for wildlife. This provides a
framework for a legible network of streets that ensure that it is easy to navigate and get around and the
landscaping strategy has ensured that every street has been designed with an attention to detail in respect of
surface materials and landscaping. High quality trees, impressive hedges and attractive lamp posts all combine to
create inviting and pedestrian friendly streets.
B U I LT TO I M PR E S S
W I N N E R : H A R TF O R D G R A N G E
The ‘Built to Impress’ award is for the development
that creates the most impressive sense of arrival and
kerb appeal. This year’s winner is Hartford Grange
near Northwich, Cheshire.
There are a number of ways that Hartford Grange has
been ‘built to impress’ including the planting of mature
trees along the main avenue to create a sense of arrival
at the new community. The kerb appeal of each and
every property has been optimised through the
planting of impressive hedges, garden trees and shrubs
and a series of attractive green spaces including a new
village green at the entrance have been provided. The
effect of all these measures is to provide a truly
impressive setting for our homes and to engender a sense of pride in both the individual homes and the
community as a whole.
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O PE R ATI N G R E V I E W CO N T I N U E D
collaborative design and consultation we are increasingly
working with local people at an early stage in developing
visions for new communities that will be well integrated
with the existing place as well as deliver the homes and
places that people want to live in.
Evolving Our Designs: Listening to Our Customers
Redrow’s approach to placemaking is an important part of
our commitment to customer-focused design. Following the
COVID-19 pandemic and associated lockdowns we
undertook a series of surveys to find out what prospective
customers might be looking for in the future. In March this
year we instructed a YouGov survey of 2,000 members of
the public and 521 local councillors to understand what
communities are looking for in a home, their street and
neighbourhoods following the experience of the pandemic
and the lockdowns.
The results were interesting and insightful showing a very
strong preference for detached homes with more space
internally and externally a key requirement. A two-storey
home with parking side to side at the front was the most
desirable type of home and detached homes were felt to
be the easiest to adapt and the best for having a dedicated
work space. In terms of charging an electric car most
people (77%) would prefer to park their car on their own
driveway and 92% said that a private driveway or garage
would be useful.
Many of these preferences amongst the public were
reflected in the views of locally elected councillors and
most councillors felt that two-storey homes were more
functional and better for family living than three-storey
homes. Councillors felt that detached homes of a
traditional design were most likely to have a positive
impact on quality of life.
Key survey findings were:
The public survey:
• The results show a strong preference amongst the public
for detached homes and homes with more space
internally and externally;
• A two-storey detached home with parking side by side to
the front is the more preferred arrangement;
• Detached homes are considered to be the easiest to
adapt (93%);
• Detached homes with front gardens make the most
attractive streets;
• 77% of people would prefer to charge their electric car
on their driveway;
• 92% of people would find a private driveway or garage
useful;
• A detached home is most likely to provide room for a
dedicated work space; and
Internal Design Guidance
This year we have also launched two internal design
manuals both rooted in the Redrow 8 principles but
providing an additional layer of technical guidance and
support to our design teams. One focuses on the layout of
developments with a particular focus on how each home
sits in the street to ensure we deliver our customers’
expectations. The other manual focuses on landscaping to
ensure we are consistently delivering beautiful streets,
spaces and places as well as achieving biodiversity net
gain and integrating robust green and blue infrastructure
thoughtfully. Together, these manuals provide a very clear
framework for the delivery of our vision for beautiful,
sustainable and value-generating places.
With a renewed focus on placemaking and ‘beauty’ in the
planning system and new requirements such as the
provision of trees in every street, our clear and customer-
focused approach to placemaking, backed-up with clear
design guidance means that we are in a strong position to
meet this new agenda. The new agenda also places an
increased emphasis on listening to existing communities
and we are well prepared to respond to this as one of our
key principles is ‘Listen to Learn’. This is a commitment to
work collaboratively with local communities from an early
stage in the design process.
From extensive and recent independent polling we know
that we have support from the home buying public and
local councillors for our particular approach to delivering
beautiful places to live and that what we offer is what
people are looking for now more than ever. This public
support will be useful as increasingly, under proposed
changes to the planning system, we will have the
opportunity to collaborate with local communities in
delivering the types of places they would like to see
developed in their communities. Using our commitments to
• 95% would find easy access to green spaces beneficial.
the homes we build* are houses with three-storeys or less,
which pose a low risk in respect of fire safety).
The councillor survey:
• 68% of councillors would prefer to see a mix of house
types and densities across their local area;
• Councillors felt two-storey homes were more functional
and better for family living than three-storey homes;
• 70% expressed a preference for parking side to side at
the front of homes ( just 22% for parking in courtyards to
the rear);
• 77% of councillors felt that residents would prefer to
charge their electric car on their driveway to the front of
their home. Only 3% felt a communal charging point away
from the home would be preferable; and
• Detached homes of a traditional design were voted the
most likely to have a positive impact on quality of life and
tranquillity.
We passionately believe in understanding our customers
– how they live and their evolving needs, to ensure that we
design and build homes that enhance their quality-of-life.
Informed by customer feedback, we continue to review and
update our house type range. Our design ethos creates the
living space desired by our customers and enhances their
health and wellbeing whilst standardising our production
costs across the group. Working collaboratively with our
supply-chain enhances our designs through the
development of efficient, sustainable, maintenance free
and cost effective products.
In response to the increase in home working resulting from
the pandemic, our most popular house type designs have
been updated to allow our customers the choice of an
alternative layout – to provide a new home office complete
with furniture. We also now offer the option to fit out one of
the bedrooms as a home office complete with fitted office
furniture, additional electrical sockets and an ethernet
point.
As part of the construction documentation for each of our
house type designs, we carry out a Design Risk
Assessment in order to identify any potential health and
safety risks that could arise during their construction.
We aim to eliminate any risks completely, where this is not
possible, control measures are put in place to mitigate
them.
A New Government Focus on Beauty and Placemaking
Government has placed an increased emphasis on
delivering high quality and beautiful places in the planning
system and in July 2021 published revisions to the National
Policy Planning Framework (NPPF) together with a National
Model Design Code (NMDC) that together put beauty and
placemaking at the heart of planning.
The NMDC sets out a framework for the delivery of
responsive places that have local community support. We
have contributed suggestions and recommendations to
every stage of this emerging agenda and have consistently
stressed the need for any guidance to be rooted in what
people want from a home, a street and neighbourhood
rather than attempting to impose a model design approach
on people which is unlikely to succeed.
As this new design agenda has emerged over the last few
years we have been preparing for it by putting in place
robust frameworks for placemaking and landscaping that
deliver what we know our customers want. Our approach
aligns with many of the objectives and principles in the
NMDC such as the delivery of tree-lined streets,
incorporating nature and enhancing opportunities for
walking and cycling. We have also set in place
commitments for community collaboration and consultation
which will become increasingly important in the future as
we work to deliver new places with the support of local
people. This will be given greater prominence as we move
into the new financial year.
Evolving Our Designs: Keeping Our Customers Safe
In response to the Grenfell Tower Fire tragedy and in
accordance with the Fire Safety Act 2021 we engaged with
a dedicated fire engineering consultancy to ensure that our
homes were compliant with the revised fire safety
requirements – each of our house and apartment designs
has a detailed fire strategy. As our designs continually
evolve, we work with our specialist advisors to review the
fire safety strategies, and these are approved following any
changes to the specification or construction technique.
The strategy addresses life safety under the Building
Regulations and takes into account the Construction
(Design and Management) Regulations 2015 (CDM 2015),
which sets out what designers are required to consider in
order to protect anyone involved in the construction or
ongoing use of a project. (Almost three quarters (73%) of
Improving and Monitoring the Quality of Development
Layouts
Our Layout Review process has been in place for two years
and is a valuable way of helping to ensure all of our
developments genuinely create a better way to live. We
have a formal review session with each division twice a
year via an internal review panel including the Group Chief
Executive, Regional Chief Executive, Group Communities
Director, Group Technical Director as well as the Group
Masterplanning Director. The formal reviews now take
place virtually which is an effective and efficient way to
collaborate, discuss and plan. Each year we review
approximately 100 layouts using the internal review panel
and all current layouts for all of the land we currently
control has been the subject of at least one review. In this
way the senior management team can ensure we are
Image: Redrow Internal Design Manuals
* 73% of all legal completions (private and affordable) in FY2021 were houses
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O PE R ATI N G R E V I E W CO N T I N U E D
optimising value generation as well as firmly delivering our
commitments to placemaking and high quality design.
Each layout is assessed against the requirements set out in
our Plotting and Landscape Manuals as well as our Redrow
8 principles. This ensures that they meet our layout
efficiency, mix and average house size expectations as
well as our requirements for placemaking, biodiversity,
green and blue infrastructure and healthy low carbon travel
options.
on 2020 levels when land purchases were very limited in
the second half in response to the COVID-19 pandemic. As
a result, after 5,620 legal completions, we closed the year
with c29,500 plots in the current land holdings (2020:
27,000). This represents a c5.2 year land (2020: c6 years)
supply based on legal completions in the financial year,
securing a solid pipeline to deliver future thriving
communities. Approximately 39% of our current land
holdings are in the South, 28% in the Central Region, 23%
in the North and 10% in London.
This year we held a number of workshops with our
divisions and design teams across the country focusing on
creating good layouts that deliver great places to live for
our customers. Building on these workshops and the
discussions on layouts in the layout review process we
launched our new Plotting Manual in March of this year.
This is a comprehensive document setting out detailed
guidance and advice to colleagues on how to achieve
well-structured and efficient layouts that are also
attractive, meet the needs of our customers and really
showcases Redrow to the best of our ability.
To complement the Plotting Manual we employed award-
winning landscape architects Bradley Murphy Design to
produce a comprehensive 160 page Landscape Manual in
partnership with The Wildlife Trusts which is rooted in our
design approach. This sets out technical advice and
guidance for our design teams on all aspects of landscape
design from creating biodiversity rich ponds to tree-lined
streets and the planting in front gardens. The landscape
manual provides a framework for the thoughtful integration
of green and blue infrastructure and green travel options
from the earliest stage in the design process. All of this is
aligned with our commitment to creating thriving
communities and delivering the biodiversity commitments
in our Nature for People strategy. Having this manual
means that a considered approach to landscaping is
consistently taken at the very beginning of design and
prevents the risk of it being considered as an afterthought.
We are always keen to continue to learn from our
customers in terms of what makes a great place to live. We
are developing a post occupancy review process to assess
completed Redrow places (using our Redrow 8 scorecard
and other methods) and to compare the results with what
we set out to deliver at the start of the design process. This
review process will ensure that we continue to deliver the
types of places our customers want to live and that we can
make any necessary adjustments to our design approach
on future developments.
L A N D
Our land buying expertise, placemaking and design
abilities and our strong balance sheet help Redrow secure
quality land holdings in appropriate locations. During the
financial year the Group acquired c8,300 plots with
planning permission to add to our current (owned and
contracted) land holdings. This was a significant increase
Forward land has again made a significant contribution to
land additions delivering 43% of the c8,300 current land
additions across 17 sites compared to 48% and 8 sites in
the prior year. We closed the year with forward land
holdings of 34,400 plots (2020: 30,700 plots).
R E V E N U E , LE G A L CO M P LE TI O N S A N D
O UTLE T S
Revenue increased this year to £1.94bn (2020: £1.3bn), a
45% increase on last year which was significantly impacted
by COVID-19. The sale of homes accounted for all but £37m
of revenue which was attributable to land sales, notably the
disposal of two London sites, which we announced last
year we would not be building out (2020: £7m). Homes
revenue increases came across all our geographical
regions with the South performing particularly strongly.
Our Heritage Collection contributed 79% of the Group’s
private sales revenue (2020: 84%) with our bespoke
product representing the remaining 21% (2020: 16%).
We delivered 5,620 legal completions in 2021, a 39%
increase on 2020 levels (2020: 4,032). Affordable homes
represented 23% of legal completions and 11% of Homes
revenue (2020: 23% and 10%).
Houses contributed 79% of our private legal completion
volumes and 81% of private sales revenue, compared to
85% and 87% in 2020.
Average active outlets increased during the year to 117
(2020: 110). Due to the strong housing market and the time
required to obtain implementable planning permissions,
average active outlets are expected to reduce in FY2022
to 112. However, by FY2024 we expect our average active
outlets to increase to 137, despite the scale down of our
London operations. As a result of this, we expect our
revenue in FY2024 to exceed £2.2bn, which will be a
record for Redrow.
C U S TO M E R P R O F I LE
34% HTB (Help To Buy)
38% Other private
5% Investors
23% Affordable
D E LI V E R I N G O U R N ATU R E F O R P E O P LE
S TR ATE GY
Preparing for Future Legislation – Biodiversity Net Gain
(BNG)
Key Commitments
Following the launch of our Nature for People Strategy in
July 2020, this year we have developed new processes
and procedures to enable us to fulfil our 15 commitments
shown in the table below.
We have been focusing our efforts on ‘Nature Gains’,
developing a new approach to land appraisal and site
selection to ensure that we avoid negative impacts in any
location and in particular those areas of high biodiversity
value. This approach will also take into account the wider
impacts on nature outside the site boundary, and help us to
design all our developments to achieve a net gain for
biodiversity.
The forthcoming Environment Bill includes a requirement
for developers to deliver a net gain in biodiversity – to
have an overall positive impact on biodiversity post-
development.
In preparation, we have undertaken pilot projects to assess
how our current design approach and processes need to
change. The results are largely positive for our design
approach, with on-site net gains achievable on 63% of the
test projects, with a further 25% of projects having
potential to achieve gains on future phases of the
development (subject to forthcoming detail in the
regulations) and 12% of developments requiring offsets to
achieve biodiversity net gain. In particular, it will be more
challenging to achieve on smaller sites, which naturally
have fewer opportunities to create habitats on site.
Nature For People: Themes and Commitments
NATURE GAINS
WILDER LIVES
FLOURISHING LEGACY
13. We will choose organisations to
manage our developments, who
share our ambition to deliver a
vibrant legacy for people and
nature.
14. We will set clear expectations and
develop inclusive delivery plans
which guarantee long-term gains
for nature.
15. We will measure and share
information about outcomes for
nature, wellbeing and people.
8.
9.
The community will enjoy
doorstep access to nature-rich
green spaces throughout the
development.
We will provide edible planting
and opportunities for community
food growing on our
developments.
10. We will provide bird, bat or bug
boxes and hedgehog highways to
new homeowners and support
them in creating wildlife friendly
gardens.
11. We will encourage community and
stakeholder participation in the
design of green spaces.
12. We will create opportunities for
the community to learn about local
wildlife and participate in the care
of green spaces.
1.
2.
3.
4.
5.
6.
Prior to purchasing land we will
assess the wider potential impacts
on high quality habitats in our
decision making.
We will design our developments
to contribute to existing or
potential Nature Recovery
Networks.
We will retain, protect and
enhance high quality habitats and
compensate where losses are
unavoidable.
We intend to exceed government
requirements for a 10%
Biodiversity Net Gain (BNG) where
possible.
We will achieve Biodiversity Net
Gains on-site, or as local as
possible.
Our developments will be inspired
by the landscape character with
locally relevant, species-rich
planting and pollinator friendly
areas.
7.
Green infrastructure on our
developments will be multi-
functional, benefitting nature and
people.
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O PE R ATI N G R E V I E W CO N T I N U E D
We will now be measuring biodiversity and the potential for
a net gain on all new land purchases. This will enable us to
further develop our approach ahead of the legislation
coming into force following the two year transition period.
During the year, we delivered biodiversity net gain training
workshops for all Land, Planning and Technical teams,
helping prepare them for achieving gains for nature on new
developments. We are already retaining and enhancing
habitats in line with the mitigation hierarchy, wherever
possible on our developments. For example at Great
Wisley Park, Haverhill we have retained and improved
existing hedgerows to achieve an 18% net gain in these
important habitats. At our Chaul End development,
Caddington, we are managing the existing woodlands by
thinning and coppicing the trees to improve conditions and
to encourage a range of wildflower, bird and insect
species. We have also improved footpaths to parts of the
woodland to enable the local community to more easily
access and enjoy the benefits of these nature-rich spaces.
Continuing our Pioneering Partnership
Following two years of successful
partnership with The Wildlife Trusts,
during which time we co-developed and
launched the Nature for People Strategy,
we are now focused on embedding our
strategy across the business. This phase
of our relationship will ensure the 15
commitments we have made are
effectively implemented, the right assurance processes are
in place, and the benefits of our actions, for both wildlife
and people, are measured and reported. We are also
recruiting a full-time ecologist to support delivery of the
strategy and to ensure our developments are designed
with nature in mind.
A key focus of our Partnership is to develop closer
relationships between the 47 local Wildlife Trusts and our
Redrow divisions. We will benefit from local ecological
expertise at the earliest possible stage in the development
process to ensure the best outcomes for local people and
nature. Closer relationships and collaboration will also
support a more open and honest dialogue between the
two organisations. This will help minimise any conflicting
viewpoints, and enable innovative solutions to be reached.
Nitrate and Phosphate Discharges from New
Developments
Concerns over pollution of rivers, lakes, estuaries and
coastal sites from excess nitrates and phosphates has
been delaying planning permissions for new housing
developments in some parts of the country. There is
evidence that these high nutrient levels are causing
problems at some designated conservation sites resulting
in negative impacts on conservation objectives. Research
is underway to establish to what extent new developments
may add to the existing problems. Meanwhile,
developments in these sensitive areas are increasingly
being required to undertake a nutrient assessment and to
show that they are achieving ‘nutrient neutrality’ to mitigate
any potential effects.
Throughout the year, we have been working to find ways to
achieve nutrient neutrality on developments where Waste
Water Treatment Works are unable to adequately treat
sewage for release to sensitive rivers and estuaries. Our
homes are already industry-leading in terms of water use,
designed to a standard of 105 litres-per-person-per-day.
However, additional solutions are required on our
developments to ensure nutrient neutrality and to unlock
planning. We have a Working Party in place to share best
practice across our divisions. Furthermore, we are working
with government and industry to explore solutions to these
challenges.
Image: Caddington Woods, Chaul End, Bedfordshire
STRATEGY IN ACTION
DE LI V E R I N G ‘ N ATU R E F O R PEO PLE’ AT A
LOC A L LE V E L
Working with local wildlife organisations is vital to
ensure our Nature for People biodiversity strategy can
be delivered at grassroots level.
Our South East division is already demonstrating its
potential, having forged strong relationships with the
consultancy arm of Kent Wildlife Trust, KWT
Consultancy Services, whose profits are returned to
conservation work in Kent.
During the year, we have worked together to benefit
from their expertise across a number of our
developments:
• Advice on enhancing water vole habitats at Britannia
Road, on the Hoo Peninsula
• Assessing ecological reports for Knells Farm,
Tunbridge Wells (plans include c500 homes,
woodland and a new orchard) close to a neighbouring
Area of Outstanding Natural Beauty and important
watercourse
• Designs to enhance the ecological value of our
Hoplands site in Hersden, near Stodmarsh Nature
Reserve
• Specialist aquatic planting report for a site of c400
homes at Cockering Road, Thanington
Redrow South East planning director David Banfield
says: “At Knells Farm, for example, there are numerous
biodiversity challenges. We’ve walked the site with
KWT Consultancy Services and our ecologist and are
adapting our eco submission (part of the Environmental
Impact Assessment) based on their feedback.”
The consultancy’s work is completely separate to that
of Kent Wildlife Trust as a statutory consultee for
planning applications.
Image: Woodlands Green, Staplehurst, Kent
“Our vision is to create a system of joined-
up habitats to help wildlife and people to
thrive, and to expand, improve and connect
these wildlife-rich places. For this to
happen, nature has to be at the heart of our
planning system, so it’s good to work with a
housebuilder like Redrow where there is a
significant aspiration to have biodiversity
net gain and the Nature Recovery Network
at the heart of future projects.”
Vincent Ganley, Managing Director of KWT
Consultancy Services
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O PE R ATI N G R E V I E W CO N T I N U E D
Build Quality
FY2021
H1 2021
FY2020
H1 2020
0.22
0.21
0.20
0.19
85.0% 84.0% 80.3% 78.7%
4.36
4.00
4.13
4.09
Average reportable
items per inspection
Construction
Quality Review – %
Construction
Quality Review –
average score out
of 6
Zero Defects
Zero defects in our homes is an important aspiration. In
September 2020, we introduced formal reporting on the
percentage of our homes legally completed with zero
defects outstanding. Results from September 2020 to the
end of the financial year showed that 95% of our private
homes were completed and handed over to our customers
with zero defects. We have also implemented a similar
system for our affordable homes so that all customers can
enjoy the high quality we strive to deliver.
NHBC Pride in the Job Awards 2021
The NHBC Pride in the Job Awards recognise excellence in
on-site management. From over 11,000 eligible site
managers nationwide, only 431 have been awarded a first
round quality award with 24 of those being Redrow site
managers.
These 24 quality award winners will be presented with their
awards at ceremonies later this year and will continue on to
the next stages of the competition, trying to secure a seal
of excellence, regional or national award.
The 2020 NHBC Pride in the Job Awards continued
between September 2020 and January 2021 with four
Redrow site managers achieving a seal of excellence
award. This was out of the 21 first round quality award
winners reported on previously.
Technology Supporting Build Quality
Financial year 2021 has seen our Red Site Manager
Inspection (SMI) app become a fully integrated part of our
site managers' on-site quality inspections. The app has
been extended to include inspections for apartments from
internal works onwards and further development on the
apartment inspections is planned for 2022 along with
development of the subcontractor portal app to aid our
subcontractors resolve quality incidents raised.
At the end of the financial year 2021, 96.23% of the quality
inspections required had been carried out which is just
over 37,000 individual inspections.
In July 2020, Redrow released a brand new app, Red Site
Sign In, to our sites (excluding London) that enables the
electronic signing in and out of sites. This allows efficient
and accurate collection of data on labour numbers on our
sites and significantly aids with HS&E matters such as live
site registers and information for accident reporting. This
app has already been further enhanced making the
process easier and more user friendly for our staff,
subcontractors and visitors to use. Further development is
planned to include other key aspects of the HS&E
management systems such as inductions so we can ensure
HS&E remains at the heart of what we do.
Standard Modular Compound
Our construction site compounds generally comprise site
offices, welfare facilities, storage and waste management
areas and have not changed, other than to support our
COVID-19 safety measures for a number of years. In a drive
to improve the working conditions of our site colleagues,
encourage collaborative working between departments,
increase the energy efficiency of the facilities, and improve
standardisation of these areas across our operating
divisions, we are trialling on one site a completely new
modular compound design.
New features of this new compound include furniture
consistent with our divisional offices and Customer
Experience Suites, collaborative hot desking for the wider
project team, a Continual Personal Development (CPD)
station specifically for use by our site operatives,
apprentices and forklift drivers, improved drying room
facilities for our subcontractors, showers and added extras
such as air conditioning, USB points and a dedicated space
for prayer and reflection. The building itself is B+ rated,
comprising of improved thermal insulation, double glazed
windows with low u-values, energy efficient LED lights with
PIR activation, energy efficient heaters with thermal cut-out
and timers and energy efficient point-of-use hot taps. The
cabins also improve comfort levels for our site staff.
In conjunction with this we are also trialling a solar
powered generator to power the facilities, Hydrotreated
Vegetable Oil (HVO) fuel to run the plant and machinery,
solar powered external lighting and improved, well sign
posted recycling waste facilities for the compound.
If the trial is successful, we plan to roll this out across the
rest of the business in the next financial year.
PPE and Construction Uniform Rebrand and Refresh
In conjunction with a rebrand of our PPE and construction
uniforms, we have taken the opportunity to undertake a
comprehensive review of our PPE and construction uniform
to ensure that these met the requirements and wants of all
our employees whilst conforming to HS&E standards.
A working party comprising site managers, assistant site
managers, graduates, apprentice co-ordinators,
construction directors and colleagues from HS&E and
commercial was set up. They produced a list of
improvement suggestions and we have been working
closely with our suppliers to incorporate these
improvements. This will ensure we can offer suitable PPE
NHBC Construction Quality Review (CQR) and
Reportable Items (RI)
The NHBC offer a CQR on approximately 80% of registered
sites each year to assess the build quality outside of the
key build stages. This provides an opportunity to perform a
deeper investigation in to the root causes for good and
poor quality on sites. Each build stage available for
inspection during the CQR is scored from 1-6 with an
average score calculated along with a percentage score
(based on how many scoring lines achieve a 4, 5 or 6).
During the financial year the NHBC undertook 74 CQRs
(2020: 110) with an average score of 4.36 (out of 6). This
was an improvement on the 4.13 scored in the previous
financial year 85% of build stages were rated good (a score
of 4) to outstanding (a score of 6). This was also an
improvement on the 80.3% achieved in financial year 2020.
During the year we increased our target percentage from
75% to 80% and it is pleasing to have exceeded this target
as we continuously strive to improve quality through the
dedicated focus of our teams and the Executive Board.
The NHBC can record any contravention of the NHBC
technical standards or building regulations at all of the key
build stages or at frequency visits as a reportable item (RI).
For financial year 2021 our average RI score was 0.22,
based on 34,879 inspections. This compares to an average
of 0.23 for our NHBC Benchmark Group 1 but is higher than
our 0.15 target. This remains a high priority focus area for
the coming financial year to try and drive down the number
of RIs we receive. We will be undertaking more root cause
analysis to assist with this.
The table opposite shows average reportable items and
CQR percentage and average scores.
Q UA LIT Y O F B U I LD
Considerate Constructors Scheme (CCS)
A key element of building responsibly is ensuring that our
construction sites are managed in a way that seeks to
improve the image of construction by striving to promote
and achieve best practice in the following areas;
• Care about appearance;
• Respect the community;
• Protect the environment;
• Care about safety; and
• Value their workforce.
As a contractor partner of the CCS, we have committed to
registering all of our developments with the scheme. This
means that regular visits are undertaken by a monitor from
the CCS to determine if our sites are meeting the Scheme’s
Code of Considerate Practice.
We ended the financial year with all of our sites registered
and this is monitored monthly and reported to the
Executive Board to ensure 100% registrations are
maintained.
207 CCS monitoring visits were carried out during the
financial year with the average score being 36.67 (out of
50). This was an improvement on the prior year when 94
monitoring visits were carried out with an average score of
35.09.
Image: Construction colleague at Woodford Garden Village, Cheshire
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O PE R ATI N G R E V I E W CO N T I N U E D
and uniform for different body types, genders and style
choices. A refreshed brochure will be produced in the new
financial year, which will enable all of our construction
teams, or those personnel who require PPE to view what is
on offer along with sizing guides and useful information on
the products. This will allow our construction teams to wear
what they feel comfortable in whilst still looking
professional in their customer-facing role and remaining
safe.
H E A LTH , S A F E T Y & E N V I R O N M E NT
Health, Safety & Environment – “Because It Matters”.
Redrow does not see Health, Safety & Environmental
(HS&E) management as an addition to our duties but rather
as an integral part of our overall duty. As such, we strive to
ensure good HS&E management is just part of what we do.
We seek to achieve the highest HS&E standards and aspire
to become the industry/sector leader in HS&E
performance. We do not pursue this aim simply to comply
with legislation; we do it to protect our people and the
environment from harm. Both the Main Board and Executive
Board review our HS&E performance at every Board
Meeting as the first substantive agenda item.
Redrow is in constant pursuit of continuous improvement of
its overall HS&E performance across the Group and seeks
to manage the inherent HS&E risks associated with all of
our activities. We do this by the consistent application of
our HS&E Management System and supporting our
subcontractors with the effective planning, managing,
monitoring and co-ordinating of the activities they
undertake on our behalf.
We are pleased to report that we have seen a positive
trend in our overall HS&E performance in the year. As in
the previous year, there were no fatalities to either our
directly employed or subcontractor colleagues. The Group
Accident Incident Rate by Site reduced to 0.26, compared
to 0.38 in the previous financial year and our target of 0.3
or below.
HS&E Assurance Inspections are carried out across the
Group by our HS&E Department, to ensure and monitor
compliance with our internal HS&E standards on our sites.
The Group average for compliance found in these HS&E
Assurance Inspections increased to 90%, compared with
87% last year.
Review of HS&E Activities in Financial Year 2021
Engagement with our Employees is an important part of our
role.
Feedback from our annual internal ‘Insight Survey’ is
positive from our employee colleagues regarding our
overall approach to HS&E:
• 88% feel that as a company Redrow cares about health
and safety;
• 82% feel that as a company Redrow cares about personal
health and wellbeing; and
• 91% believe Redrow takes our environmental
responsibilities seriously.
Our internal Engagement Team have provided regular
‘wellbeing’ related information and updates on our internal
intranet to support both our employee and subcontractor
Governance
Leadership
Ownership
Workplaces
HS&E Leadership meetings provide a strategic platform
for the review of all existing and emerging HS&E risks. It is
our aim to achieve sector-leading HS&E performance.
Group HS&E Leadership Meeting – held twice a year and
attended by;
• Group Chief Executive, Group Company Secretary,
Group HR Director, Regional Chief Executives and the
Group HS&E Director.
We’ve seen an increase in
the use of our site unsafe/
stop notices. These are
issued by our individual Site
Management Teams when
work activities undertaken
by our contractors have not
met our HS&E standards.
Regional HS&E Leadership Meetings – held quarterly
and attended by;
• Regional Chief Executives, Divisional MD’s and Group
HS&E Director.
Divisional HS&E Leadership Meetings – held monthly and
attended by;
• Divisional MD, Divisional Directors and Divisional HS&E
Manager.
We have focused on
embedding these elements
to all of our work areas e.g.
• Offices,
• Sites,
• Sales, and
• Customer Services
As a result the number of
serious (RIDDOR
Reportable) injuries
occurring across the Group
significantly reduced from
42 down to 30, a reduction
of 29%.
colleagues with both their physical and mental health. We
also have a network of ‘Wellbeing Champions’ and Mental
Health First Aiders to support our colleagues across the
Group.
In addition we also have and maintain a Drug & Alcohol
testing regime for post-accident and ‘for cause’ testing
across all of our construction based activities.
In financial year 2020 we introduced four HS&E specific
strategic pillars and continue to use these to shape our
approach:
• Governance;
• Leadership;
• Ownership; and
• Workplaces.
This is outlined in the table on page 42.
This year we have continued to provide HS&E training for
all of our operational roles from Senior Executives through
to Apprentices to ensure everyone has the appropriate
HS&E training and skills required for their role. A total of
1,935 employee colleagues received HS&E training in the
year.
As mentioned earlier, through our membership of the CCS
we are provided with an independent assessment of our
approach to protecting and enhancing the local
environment on the developments in which we are
building. During the year we achieved an average score of
seven out of nine with regards to our environmental
protection.
Future Focus
This year we introduced a new electronic HS&E incident
reporting and auditing system to improve our ability to
report incidents and enable better analysis of root-cause.
We intend to expand the capabilities of this operating
platform to allow management teams to have self-service
access to reports which will allow for more agile responses
to learning outcomes and ultimately improved HS&E
performance across the Group.
We will continue to regularly update our HS&E
Management System to ensure it is maintained in line with
industry best practice and HS&E regulatory requirements.
We will also continue to support the work undertaken by
the Home Builders Federation Health and Safety
Committee, in order to further promote the collective
improvement across the House Building Sector.
In conjunction with this, we re-structured our internal HS&E
Department to provide better support and assurance to our
Divisions. We also strengthened our internal HS&E
governance resource, which has allowed us to conduct
more internal HS&E Audits and make continuous
improvements to the HS&E Management System.
For the new financial year we will be adopting a new HS&E
Strategy to support the continued improvement of our
overall HS&E performance.
The strategy focuses on two key objectives, namely ‘Safe
to Build’ and ‘Operating Responsibly’ both which have
specific targets including:
We have a requirement that all contractors must be SMAS
accredited, which is a Safety Scheme in Procurement
accreditation that ensures all our contractors have been
assessed for their health and safety competence. This
demonstrates that each contractor we employ has the
appropriate skills, knowledge, attitude, training and
experience to work safely on any of our developments.
Every contractor must attend a site specific HS&E
Induction before commencing work on any of our sites and
they must comply with our Contractors HS&E Rules as a
condition of their contract.
Protecting the Environment
Our Environmental Management System (EMS) is
accredited to ISO 14001 and covers operational activities.
The application of our EMS helps prevent pollution and
minimise disturbance to local community from noise and
dust as well as helping to protect local biodiversity.
We are pleased to confirm there were no fines or
prosecutions in relation to environmental matters in the
year.
• Safe to Build
• completed and maintained Design Risk Assessments
for all Group Standard Designs; and
• every new development to have a completed and
maintained Pollution Prevention Plan.
• Operating Responsibly
• year on year reduction in the number of reportable
accidents; and
• all Divisions to achieve internal HS&E Assurance
Inspection benchmark rate over 12 month period.
PUT TI N G O U R C U S TO M E R S F I R S T
Transforming the Customer Journey
Redrow has maximised its human capital across the whole
customer journey, nurturing lifelong relationships with
Redrow home owners, which are positive and profitable. All
this has been achieved whilst effectively adapting to the
customer trends and challenges associated with COVID-19.
During the financial year 2021, our customer and marketing
team set out and delivered an exciting new digital and
marketing strategy.
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The combined Sales, Marketing, Customer Service and
Communications functions, who operate as a single team
within Customer & Marketing, collaborated on a major
refresh of the Redrow brand. A new Brand Portal was
launched to support the brand refresh which provides a
single source for images, videos and other brand related
assets. It also enables divisions to ‘self-service’ the
creation of their own brand artwork, improving efficiency
and ensuring brand consistency. For more complicated
briefs, with specific creative requirements, online requests
can be submitted and tracked online until completion by
Redrow’s dedicated design team: Red Studio.
In tandem, the team also began to review customer
experience within its sales arenas. These were re-imagined
as ‘Customer Experience Suites’ and transformed into
areas customers can visit throughout their journey with
Redrow.
Redrow is believed to be the first housebuilder to remove
paper from sales centres, combining the knowledge and
expertise of its sales consultants with industry-leading
technology. Although this project commenced before the
COVID-19 pandemic, the changing trends in home
ownership that have taken place since the pandemic fit
perfectly with Redrow’s Heritage product and better way to
live philosophy. The new brand capitalises on this by
focusing on its ‘a better way to live’ purpose, with homes
that are better by design, with better places and better
experiences for customers.
The new Customer Experience Suites transform interaction
with customers, right from their first visit to the site, all the
way through to post-completion. Key features of the new
suites include digital welcome banners, which can
personalise messaging for individual customers depending
on appointment type, and digital screens throughout, all of
which can be updated remotely to ensure consistent
messaging across all outlets. There are also interactive site
plans and iPads, where customers can view choices and
upgrades, and even complete their reservation online.
Initially, two test Customer Experience suites were
launched at De Clare Gardens, South Wales and Foxbridge
Manor, East Midlands in October 2020 and February 2021
respectively as part of a pilot project. Following their
success, 14 new Customer Experience Suites were then
rolled out during the 2021 financial year and all new outlets
going forward will reflect the new model.
Key features of the updated customer and marketing
strategy include:
• Digital-first approach to the Customer Experience Suites,
including interactive screens and site-plans, supporting
the paperless sales environment;
• Dedicated spaces for existing customers to meet with
their customer service contacts;
• A new Redrow logo and geometric pattern, inspired by
the Arts & Crafts movement, helping to create a cleaner
and simpler look; and
• Redrow’s ‘a better way to live’ brand purpose is at the
forefront of all marketing materials, to build a strong,
consistent tone of voice that resonates with customers.
Connecting Face to Face and via Digital Experiences
Redrow now offers a Homeowner Support Portal enabling
customers to submit any two-year warranty claims online.
Any submissions are then integrated directly into Redrow’s
systems, ensuring a seamless and efficient flow of
information. Customers can also submit pictures and they
receive a unique reference number enabling them to track
the progress of their issue online.
Redrow’s systems are developed in-house which delivers
significant value in terms of integrating different platforms;
working towards a single view of the customer and
generating efficiencies within the business. Often issues
can be resolved by homeowners themselves, and there are
over 50 ‘how to’ videos on the Portal, which have been
created based on the most common queries. The
Homeowner Support Portal is part of the My Redrow
platform where customers can also reserve their house
online and purchase options and extras. Going forward, My
Redrow will be the communications hub at every stage of
the customer journey. This approach is a key part of
Customer & Marketing strategies to connect the best
possible face to face and digital experiences across the
entire customer journey.
Listening to Our Customers
Redrow carefully listens to customers across all channels,
whether they are existing, or potential homeowners. To
underpin our commitment to creating a better way to live,
particularly in a post-pandemic world, we are closely
monitoring consumer trends around what people want from
their home and community, in order to respond accordingly.
As mentioned earlier on pages 34 to 35, Redrow
commissioned an extensive independent online survey via
YouGov which polled over 2,000 British adults to provide
insight into consumer home design and architecture
preferences, neighbourly relations, and aspirations for their
local areas. From the research it was clear that the majority
of consumers (77%) aspire to live in a two-storey detached
home, with just 3% and 4% of Britons stating a preference
for a terraced home or townhouse. Having a private
driveway or garage is important to 92% of Britons, whilst
70% of respondents believe it is important to personally
know their neighbours.
This extensive desk research was also supported by a
series of customer focus groups, held this year via zoom
because of COVID-19 restrictions at the time, with key
outputs shared amongst colleagues. These comprehensive
steps are in addition to Redrow reviewing and analysing
thousands of homeowner NHBC surveys every year. In
addition to the core ‘would you recommend to a friend’
question, the surveys give our customers the opportunity
to feedback on a number of aspects of their new home and
place. Redrow has once again secured an NHBC Five Star
award and is the top rated volume housebuilder on
Trustpilot with an ‘excellent’ rating, and over 2,000
customer reviews. Colleagues across the business are
engaged in the process and are often positively name-
checked in reviews, whether it be across sales, build or
customer service.
Redrow has developed an online reputation army of
hundreds of colleagues across the business. This
collaboration and return on human capital continues to
drive significant benefits for Redrow.
Redrow has extended the proactive management of its
online reputation and customer listening to include Google
Reviews. Our customers are proactively asked to leave a
Google Review and colleagues are empowered to respond
to any reviews relating to their particular outlet. This
approach gives development teams personal ownership
over the reputation of their own development. They can
also quickly update opening hours and contact information
as and when required. Colleagues have already responded
to over 2,600 (93% of ) Google reviews within the year
under review.
Helping to Deliver Quality Homes
A quality philosophy runs through all of Redrow’s
operations. The fact that Sales and Customer Service
colleagues are ultimately part of the same Customer &
Marketing team, working closely with Build colleagues,
plays an important role in delivering defect free homes.
Image: The new Redrow branding
Image: Customer Experience Suite at Foxbridge Manor, Castle Donington, Derbyshire
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In January 2021, Redrow held its first combined Customer
Conference, encompassing colleagues from Sales, Build
and Customer Service. The Conference was held virtually
and presented from a specialist TV studio. Around 500
colleagues logged on remotely for the day event and
evening awards, with Matthew Pratt, Group Chief Executive
and Barbara Richmond, Group Finance Director amongst
the key speakers. The key focus of the conference was
around raising our quality standards across the board.
low carbon economy, and ultimately to Net Zero Carbon by
2050.
This year we reviewed our Climate Change strategy and
with our climate advisors, we are in the process of updating
and strengthening our approach. Whilst there are
significant risks, we believe there is also a great
opportunity to learn from the science, to innovate, and to
future-proof our homes and the communities that we build.
Responsible Marketing
Responsible Marketing at Redrow is about building trust
with our customers and embracing the core ‘better way to
live’ purpose. The Customer & Marketing team works
collaboratively with colleagues in Legal, IT & Compliance
and Sustainability to help ensure all aspects of the team’s
performance deliver on this goal.
The Customer & Marketing team plays an active role in
Redrow’s GDPR Committee, which monitors and reviews
Redrow’s adherence to legislation and best practice
surrounding customer data. Redrow’s in-house training
team plays a key role in delivering a combination of online,
virtual and face to face training across the business on the
subject of customer data. The GDPR Committee also helps
to raise the importance of sound data protection practices
across the wider business.
The Customer & Marketing team also support important
internal communication initiatives e.g helping to develop
and communicate business strategy. The three themes
– Building Responsibly, Valuing People and Thriving
Communities – help to bring to life our business and
sustainability strategy in a very simple way for colleagues,
customers and other key stakeholders.
R E S E RVATI O N S A N D O R D E R B O O K
The Group secured £1.75bn of private reservations in the
year (2020: £1.6bn). We ended the financial year with a
private order book of £1.2bn (2020: £1.1bn) of which 89% is
forecast to translate into legal completions in financial year
2022 and 11% in financial year 2023. Our total order book
closed at £1.4bn (2020: £1.4bn).
E N V I R O N M E NTA L S TE WA R D S H I P
Climate change, together with biodiversity loss, are the
most urgent environmental issues faced by communities,
businesses and governments across the world.
Read about our approach to biodiversity on pages 37
to 39 and 158.
For the housebuilding and construction sector, changes in
climate have the potential to significantly impact our
operations through interruptions to the supply of materials
and in the way we design and build homes. Our business
will be affected by both the physical impacts of climate
change and the impacts associated with the transition to a
Our strategy looks at two key elements of climate change
– carbon reduction and adapting to a changing climate,
identifying both the risks and the opportunities. Our
approach will integrate climate, biodiversity and people,
recognising the interplay between them with a goal to
minimise risk and deliver benefits for all.
O U R CO M M ITM E NT TO AC H I E V I N G N E T
Z E R O C A R B O N
The UK government has set a target for the UK to achieve
Net Zero Carbon by 2050. Whilst this presents a significant
challenge, it is our aim to thrive in the transition to
becoming a net zero business through collaboration with
both new and existing partners.
At the point of publication, we have committed to sign-up
to the Business Ambition for 1.5°C and to reach science-
based net zero emissions no later than 2050. In making
this commitment, we are demonstrating the highest level of
ambition in the short and long term.
We will set interim science-based targets across scopes 1,
2 and 3, in line with the criteria and recommendations of
the Science Based Targets Initiative. In doing this we also
join the UNFCCC Race to Zero.
To support the
transformational change
that the UK’s net zero
target requires we will
advocate for ambitious
government policies that
align to 1.5°C.
Our Carbon Footprint
We continue to try and minimise the resources we use,
reduce energy consumption and cut carbon emissions
across the business.
Since 2017, our greenhouse gas emissions have been
decreasing. However, in 2020 we made a significant
change in the way we collect the site and office gas and
electricity data (which currently accounts for almost half of
our emissions). The quality and accuracy of the data has
been greatly improved and, combined with temporary site
closures and a reduction in the number of homes built in
2020 due to COVID-19, the normalised emissions in 2020
showed an increase.
In the last year, we have seen a decrease in overall
emissions of 5%, and a reduction in normalised emissions
(tonnes CO2e/100m2 build of 6%).
R E D U C I N G O U R C A R B O N I M PAC T
During the year we have achieved a reduction in emissions
across many of our direct and indirect activities. These are
disclosed in the following pages. In the coming months we
will establish baseline emissions for our most material
indirect scope 3 activities.
Activity
Site Diesel
Site LPG
Office Gas
Office Electricity
Air Conditioning
Business Travel
Reducing our Carbon Footprint: Our Operations
Our Offices
Reduction
14%
28%
30%
23%
17%
1%
We have seen emissions reductions in the following
activities in the year:
In February, we switched to a renewable electricity
contract for all of our offices. During the reporting year,
3.3% of electricity (offices and sites) was from a renewable
source. The contract will be reviewed annually to ensure it
provides the most cost-effective and least carbon-
intensive solution as the renewables market evolves.
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TOTA L E M I S S I O N S BY AC TI V IT Y %
Water Use: Our Operations
Water Use: Our Homes
LPG
Site Diesel
Business Travel
All Electricity
All Mains Gas
FY2021
2
FY2020
3
FY2019
FY2018
5
5
43
47
7
22
6
21
26
23
Total 2.84 tCO2e/100m2 build
Total 3.01 tCO2e/100m2 build
57
57
8
9
14
16
Total 2.42 tCO2e/100m2 build
16
13
Total 2.48 tCO2e/100m2 build
FY2017
2
53
8
21
16
Total 2.50 tCO2e/100m2 build
Our Sites and Customer Experience Suites
From July 2021, all plots, show homes and site compounds
will be supplied by 100% Green certificated electricity. This
is backed by the Renewable Energy Guarantees of Origin
(REGO) certificates – these act as a guarantee that the
energy was produced from renewable sources.
During the year, our Yorkshire division trialled a hybrid
generator system with solar PV and a smart energy
management system. This system can result in fuel savings
of between 33% and 50%, with the accompanying emission
reductions, helping us to achieve our targets and reduce
costs. It also reduces noise disturbance due to the reduced
time the generator needs to operate. Savings in carbon
during a three month trial were estimated at 7,902kg. We
will continue to trial alternative systems to identify the best
solution for wider roll out.
We are also exploring a company-wide roll out of energy-
efficient site cabins. These will provide improved thermal
insulation, double glazed windows with low u-values,
energy efficient LED lights with PIR activation, energy
efficient heaters with thermal cut out and energy efficient
point-of-use hot taps. The cabins would also improve
CDP SCORE: B
Our Carbon
Disclosure Project
(CDP) score is B
(based on 2020
submission. Score
for 2021 not known
at time of publication).
comfort levels for our site-based employees and
contractors throughout the seasons.
With our supply partners, two trials are underway to
explore the efficacy of Hydrotreated Vegetable Oil (HVO),
a biodegradable non-toxic fuel that is produced from
vegetable fats and oils. This could provide an alternative to
diesel which is currently used in generators and other
construction machinery. HVO can reduce carbon emissions
by up to 90%. It also reduces particulate matter and
Nitrogen Oxides which have a negative effect on air-
quality.
As part of our effort to reduce the energy use of Customer
Experience Suites and show homes, we have installed a
‘one-switch’ shutdown system for all of the lighting at our
Newton Garden Village development. We continue to
monitor the impact on consumption and cost with a view to
a wider rollout.
Travel
We have strengthened our commitment to reducing the
carbon impact from our company car fleet and embraced
the increase of Pure Electric vehicles into the market.
Employees are increasingly opting for vehicles with a lower
environmental impact – 73% of company cars ordered
during the year were either Hybrid or Pure Electric. The
current car choice is now 54% Pure EV, with options in all of
our grades, and 34% Hybrid, with only a very limited
amount with a purely petrol or diesel option.
To support this change we have installed charging stations
at all of our divisional offices and enabled our employees
to access preferential rates for installation of homes
chargers.
We continue to offer employees the benefit of the Cycle to
Work scheme, however the uptake has been low only with
2% of employees in the scheme at the end of the financial
year.
In 2017, we set a target to reduce the water intensity of our
construction and office operations (m3/100m2 build) by 5%
by the end of FY2022. In the last year, we have seen water
use increase by 79%. This is an increase of 35% over the
2017 baseline.
Conserving water is an issue of increasing importance;
research shows that we are likely to face significant water
shortages within the next two decades as the population
grows, urbanisation continues and the climate continues to
warm.
As with our office and site energy data, in partnership with
a new utilities management company, we have made
improvements to the way we collect our water consumption
data. In previous years, a large proportion of the readings
were manually taken and many were estimated. The data
collection is now automated and therefore much more
accurate. It is disappointing to report such an increase
however, this is not an increase in real-terms, and the high
quality data we are now collecting will allow us to manage
and measure our consumption more effectively.
Reducing our Carbon Footprint: Our Homes
From 2025, new homes built to the Future Homes Standard
are required to have carbon emissions at least 75% lower
than those being built to current Building Regulations
standards. The forthcoming changes to Part L of the
Building Regulations are due to be implemented in June
2022. They are intended to deliver a meaningful reduction
in carbon emissions and to provide a stepping stone to the
Future Homes Standard.
Although the Government has stated its intent to
implement a 31% reduction in carbon levels over current
Part L standards in June 2022, some aspects of the
regulations remain unclear, namely the implementation of
the Fabric Energy Efficiency Standard (FEES). The
Government’s preferred option is to provide a meaningful
uplift in the building fabric, and the level of FEES was
consulted on earlier this year. To mitigate the uncertainty
we are assessing multiple avenues for our future building
specification in response to the various possible directions
of the legislation.
The two common approaches to compliance at this stage
are either to continue using gas boilers and offsetting the
emissions using PV panels, or to use air source heat pumps
to provide heating and hot water. Both approaches come
with their own risks and opportunities.
The Government is anticipating large scale uptake of air
source heat pumps but recognises that they are not yet
established as a mass market solution for providing low
carbon heating. The skills and supply chains for heat
pumps require further support and expansion in order to
meet the demand that will be created by introducing the
Future Homes Standard. We have some concerns about the
noise and vibration created by the heat pumps and the
effect on internal and external layouts. We are
collaborating with several major heat pump manufacturers
to assess the practical and design implications of
incorporating them, and to better understand the impact
for future customers.
Our homes are already industry-leading in terms of water
efficiency with a rating of just 105 litres per person per day
– well below the building regulation requirement of 125
l/p/d. This is achieved with highly efficient fixtures, water
saving baths and flow restrictors.
We continue to provide guidance for our customers on how
to use less water in the home and garden. In the year, 6%
of completed homes were installed with a water butt.
P R O D U C T I N N OVATI O N
At Redrow we are continuously looking to improve and
innovate to better meet our customers requirements and
aspirations.
Building Envelope
Tackling climate change and simultaneously reducing our
customer’s energy bills are key considerations in the way
we design our homes. Our design process focuses on the
right layout, materials and products to retain heat within
the home. This is achieved through greater insulation
levels, high specification doors and windows, efficient
boilers and focus on achieving increased air tightness. Our
approach requires that our homes improve air tightness by
50% over and above the regulatory requirements, reducing
leakage to a maximum of 5m3 (h.m2). As a result, our homes
are ‘B’ rated, on average, for energy efficiency, comparing
to the UK average home which is ‘D’ rated.
As dwellings become better insulated, the importance of
thermal bridging is increased. In very well insulated
dwellings the effect that thermal bridging can have on the
overall thermal performance of a dwelling can be
significant – recent research has shown it could be
responsible for up to 30% of a dwelling’s heat loss. To
mitigate heat loss through thermal bridges we use thermal
modelling software to assess our construction details and
to optimise their performance.
We are working in collaboration with a number of our key
suppliers to improve the building fabric performance of our
homes:
• With Keystone Lintels we have developed and
implemented a thermally broken lintel as part of our
standard specification. This lintel loses almost four times
less heat than a standard steel one and therefore
reduces overall heat demand.
• With two of our suppliers – Keyhouse and Rooms and
Views, we are developing a pre-manufactured bay
window. This solution would reduce embodied carbon
and thermal bridging and improve the overall fabric
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performance. Traditionally constructed, this is a
complicated area of the build involving several trade
disciplines. Building these within a factory would allow us
to achieve a quality of detailing that would otherwise be
difficult to achieve on site as well as saving time and
cost.
• To optimise natural daylight in rooms we are working
with Velux to assess what changes can be made to the
way we design and install roof windows. This will also
reduce the reliance on electric lighting and increase
levels of natural ventilation.
Minimising Overheating and Improving Indoor Air
Quality
With the climate warming up, the Government have
identified overheating as a key issue in the current review
of the Building Regulations. Our current approach uses a
mixture of natural and mechanical extract ventilation to
ensure our homes are adequately ventilated; this can also
assist in reducing overheating in summer months.
With better science and understanding, climate scenarios
for the UK are changing. As a country, we are already
experiencing hotter periods and this can affect people’s
health and comfort levels, both whilst outside and indoors.
To help us understand how we can minimise the risk of
overheating in homes both now and in the future we are
sponsoring two PhD students and collaborating with the
Centre for the Built Environment at Birmingham City
University. The aim of the project is to propose cost-
effective scalable solutions to improve indoor air quality,
reduce overheating in new homes, and critically, take
human behaviours into account so that homes are
comfortable to live in.
We are also working with AECOM on a study commissioned
by government to investigate ventilation performance and
indoor air quality in newly built homes. The study
comprises walk-through inspections of homes to test the
installed performance of ventilation products as well as
extended monitoring of temperature, humidity, carbon and
other pollutants.
The practical knowledge and solutions gained from these
collaborations will be used to inform and develop our
future housing designs.
Renewable Energy
The community energy centre at our Saxon Brook
development in Devon will save 4,173 tonnes of carbon
each year once completed. This is a reduction of 64% when
compared to an equivalent development with traditional
home energy systems.
To future-proof our homes and to facilitate customer
choice, we offer the option of an electric vehicle (EV)
charging point. In the year 24% of our customers chose to
upgrade and have access to an EV charging point.
As part of our ongoing product development we are
trialling several low-carbon technologies for room and
water heating in our homes: a smart home and energy
management system which has the following features:
• Intelligent light switches that can reduce the total energy
consumption of a home by up to 20%. This is achieved
through the system observing and learning the
occupancy pattern and then adapting the heating and
lighting to avoid wasting energy on empty homes or
unused parts of the house; and
• Energy management system comprising solar PV panels,
battery storage and an intelligent hybrid inverter that
looks to achieve net zero electricity use in the home.
E M B O D I E D C A R B O N
We know that reducing the embodied carbon of our homes
will play a significant role in our pursuit of Net Zero Carbon.
This is a huge challenge for the sector and will require
extensive collaboration with the supply chain, building on
the work we are already doing.
To provide an understanding of our baseline, we have
undertaken an embodied carbon study on our most
popular housetype. The study was carried out using the
LifeCYCLE carbon model, and it focused on the ‘Product
and Construction’ stage – this includes embodied carbon
associated with the manufacturing and installation of the
components used for the substructure, superstructure,
internal finishes, sanitaryware, fixtures and fittings,
services, external works and transportation.
E LE M E NTA L C A R B O N P R O P O R TI O N F O R A
R E D R OW H O U S E T Y P E ( KG)
( P R O D U C T A N D CO N S TR U C TI O N S TAG E )
16.51% Substructure
3.77% Services
38.35% Superstructure
14.79% External works
5.17% Internal finishes
21.04% Transport
0.37% Fixtures and fittings
STRATEGY IN ACTION
2021 marks our five year anniversary working in
partnership with the Community Wood Recycling
Scheme, a national network which provides a
collection service for excess wood.
Image: Wood recycling being carried out in the local community
The Scheme operates as a social enterprise, creating
jobs and training opportunities for local people.
In 2021, 518 tonnes of wood was collected from Redrow
sites and diverted from landfill. That is equivalent to the
weight of approximately 50 double decker buses. 10%
of the timber was ‘high-grade’ and subsequently used
by communities for DIY and building projects, or made
into products such as bird boxes. The remaining wood
has been processed into firewood, kindling and
woodchip helping to displace fossil fuels.
Richard Mehmed, Managing Director of the Community
Wood Recycling Scheme commented, “We are
delighted to be able to work with Redrow. Collecting
wood from Redrow sites has created new, paid jobs and
training
opportunities for
local people,
which is making a
difference to local
communities as
well as delivering
positive outcomes for society. Our partnership with
Redrow has a positive environmental impact as wood is
given a new purpose, which supports the circular
economy and reduces the demand for new materials.”
Read more about the work we’re doing with the
SCSS in the Partnering with Our Supply Chain
section on pages 52 to 53 and 161.
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The results show that the carbon arising as a result of the
‘Product and Construction’ stage of this house type is
704kg of CO2e per m2. This can be compared to* the Royal
Institute of British Architects (RIBA) 2030 Climate
Challenge carbon target, which for 2025 is <800kg of
CO2e/m2. The RIBA 2030 Climate Challenge provides a
stepped approach towards reaching Net Zero Carbon and
sets a series of targets for embodied carbon and
operational energy for adoption by the sector.
Over the next year, we will undertake a detailed
assessment of all our indirect scope 3 emissions which will
build on this piece of work. This forms part of our
commitment to sign up to the Business Ambition for 1.5oC
and to reach science-based net zero emissions no later
than 2050.
Reducing Waste
Reducing the amount of construction waste we produce is
important for several reasons. The extraction of raw
materials and the manufacturing and distribution of
products contributes to global carbon emissions, and to
the indirect emissions within our carbon footprint. Along
with the rest of the sector, we are experiencing price
increases and delays in the delivery of some materials. This
is due to increases in worldwide demand as a result of the
global pandemic and compounded by Brexit.
It is our aim to minimise the consumption of virgin raw
materials and to maximise the value and lifespan of the
materials and products we use.
In 2018 we set a target to reduce construction waste
intensity (tonnes/100m2 build) by 10% by the end of the
financial year 2022 (over a 2017 baseline). At the end of the
financial year ended June 2021, we have achieved a 24%
reduction, far exceeding the target.
TO N N E S O F WA S TE P E R 1 0 0 M 2 O F B U I LD
10.63
10.15
8.97
8.11
18
19
20
21
‘Reduce the Rubble’ Research Project
In 2020, we launched ‘Reduce the Rubble’ – a pioneering
initiative that sought to drill down and identify every
component of waste generated during our build process.
The aim was to understand the root causes of waste
arising, and to identify how waste could be eliminated,
reduced or re-used.
Our most popular housetype – a detached, four bedroom
family home from our Heritage Collection was selected and
the study was undertaken across three representative
sites.
The study identified more than thirty opportunities for
reducing waste. These have been prioritised and are being
evaluated by our Buildability and Waste Working Group. To
date, changes to the size of skirting and architrave have
been approved without impacting on quality and customer
expectations and changes to ceiling heights are being
explored.
Since the project started, more than half (53%) of those
working across the three study sites are now sharing their
ideas on continuous improvement and examples of best
practice with the wider business.
Redrow is a participating member of the Supply Chain
Sustainability School’s ‘Waste Special Interest Group’ – a
collaborative project with the peer group to research
packaging waste at its manufacturing and supply source.
R E S P O N S I B LE S O U R C I N G
Through our Purchasing Sustainable Timber Products
Policy, we require that all of our timber is certified by either
the Forest Stewardship Council (FSC) or the Programme for
the Endorsement of Forest Certification (PEFC). This means
it is sourced from suppliers who are accredited and where
chain-of-custody is maintained down the supply line.
We continue to uphold the principles and processes we
developed in partnership with the World Wildlife Fund
Global Forest Trade Network (WWF GFTN) before the
network closed in 2018.
100% of timber responsibly
procured
2021
2020
2019
99.6
99.9
99.9
PA R TN E R I N G W ITH O U R S U P P LY C H A I N
The importance of working closely with suppliers and
subcontractors and maintaining a strong supply chain are
principles that have long been established within Redrow.
A large number of our relationships with supply partners
extend beyond 10 years, some in excess of 20 years. The
longevity of our partnerships is testimony to the value
Redrow and our suppliers and subcontractors place in
having a relationship where all parties share a similar
vision, and have the working practices required to deliver
sustainable outcomes.
Improving the Social and Environmental Performance of
our Supply-Chain
By working jointly with our supply partners we can
continuously look to improve our financial, social and
environmental performance. This year, we have developed
innovations in a number of areas including changes to the
construction process to improve deliverability and
investing in our IT systems to improve the efficiency of
materials ordering and payment.
As a partner of the Supply Chain Sustainability School, we
actively encourage our material suppliers to also join as
members. Membership allows them free access to training
on a vast range of subjects thereby improving the
sustainability of their own business and helping us to
respond to sustainability issues in a productive way.
Membership of the Supply Chain Sustainability School and
the benefits it brings are discussed regularly both internally
and with suppliers. The challenges that the industry faced
as a result of both Brexit and the global pandemic left little
opportunity for us to effectively promote and increase
membership of the Supply Chain School within our supply
chain. As a result,
membership of the
School by our
supply chain has
remained fairly
static at 33%.
Through our pre-tender qualification process and on
renewal of an agreement, we assess the performance of
our supply partners through our Appraisal process. The
assessment looks at a range of environmental, social and
governance (ESG) issues including – financial, production,
quality assurance, route to market, customer service,
energy, transport, health & safety, welfare, discrimination,
fair pay, unsafe working conditions and compliance with
legislation such as the Modern Slavery Act and the
Working Time Regulations.
At a more granular level, the Appraisal allows us to
maintain a supply chain map which identifies the source of
the raw materials and the country of manufacture. This
gives us visibility on products and materials that are
supplied from countries with a higher social risk profile.
The issues we evaluate during the Appraisal are subject to
regular review. It is also used to help us identify areas
where we could work collaboratively with partners to
deliver improvements such as reducing carbon emissions
and waste.
Using the data collected in the Appraisal we have
calculated that the recycled content in a typical Redrow
home is approximately 11%. This exercise highlighted that
the lintels, aircrete blocks, bricks, plaster products and
drainage goods that we specify have the highest
Image: FSC timber being delivered to site
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STRATEGY IN ACTION
Read about how we are managing climate-related risks
in the TCFD section on pages 163 to 167.
Read about how we are minimising the risk of
overheating in our homes on pages 49 to 50.
Engaging Across the Sector
We are members of the following cross-sector groups:
• Home Builders Federation National Technical
Sustainability Committee (NTSC)
Its members review and comment on aspects of
government policy in particular what changes are
We have taken part in a paint can recycling scheme
for almost a decade, previously in partnership with
Dulux and now with Crown. Working with our
nominated paint manufacturer and our painting
subcontractors, empty paint cans are recycled into
new products such as plastic piping and outdoor
furniture.
More than 26,000 paint cans were recovered from
our sites during the year and the subcontractor who
made the most significant contribution is being
rewarded with benches made from recycled cans.
Furthermore, our pallet repatriation scheme has
seen in excess of 39,000 pallets recycled this year.
proportion of recycled content. We will continue to
measure this and to work with our supply chain to increase
the recycled content – which will reduce both embodied
carbon and our reliance on raw materials.
To ensure that everyone remains aligned to our supply
chain policy commitments, changes to National
agreements are discussed regularly with the divisional
commercial teams and supply partners. Matters are also
discussed and monitored by the Executive Board through
regular reporting and discussions.
Bi-annual formal reviews are conducted with supply
partners to monitor performance over the review period
across a number of key performance indicators –
suitability, quality, service, deliveries, lead times and
customer service.
A DA P TI N G TO A C H A N G I N G C LI M ATE
Mitigating Flood Risk
To alleviate the effects of climate change and flood risk on
our developments, we incorporate Sustainable Urban
Drainage Systems (SuDS) on many of our developments.
These are designed to mimic the natural drainage of
surface water by managing rainfall. Where possible, we
design swales and attenuation basins to retain some areas
of permanent water which provide a landscape feature, and
a water source and habitat for local wildlife.
We have identified an opportunity to develop Rain Water
Gardens at our Queenshill site in Newport. The SuDS
features will comprise of a crate tank and an attenuation
basin, landscaped with a mixture of shrubs, trees and
wildflower planting, permeable paving, swale features and
a road side rain garden and filter strips. Once completed, it
will provide an attractive, plant-rich development which will
support the wellbeing of the community and local
biodiversity as well as reducing flood risk. This is a
nature-based solution with multiple benefits.
The ability to design and deliver low and net zero carbon
homes in a realistic and deliverable way will require
coordination across many different players in the sector.
The Task force is leading on the development of an
overarching Delivery Plan which will respond to the key
environmental targets – Net Zero Carbon, the natural
environment, resources, water and air quality.
required to technology and building practices to meet
future regulations.
• Home Builders Federation Future of New Homes Group
This is a subcommittee of the NTSC. The Group focuses
on building performance and during the year it’s priority
has been to understand and plan for forthcoming
changes to Building Regulations Part L and F, SAP, heat
pumps, EV charging and hydrogen boilers.
• Future Homes Task Force (FHTF)
The FHTF brings together representatives from across all
sectors that have an influence on shaping new build
homes including the government, house builders, utility
providers, material suppliers and environmental groups.
Image: Windmill Views, Barnham, West Sussex
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number of females and employees from BAME (Black,
Asian or Minority Ethnic) backgrounds (over 30% female
recruits and 25% from a BAME background).
• 87% of colleagues believe we are committed to
promoting a culture of equality, diversity and inclusion;
and
EDI will be embedded throughout all stages of an
employee’s journey ensuring all individuals receive fair and
equal treatment from recruitment and selection, to on-
boarding and induction, learning and development,
promotion and career progression to employment benefits,
terms and conditions and facilities.
Redrow is also proud to be a member of Inclusive
Companies, the Diversity Jobs Group and Business
Disability Forum. Working with the Business Disability
Forum to become Disability Confident.
We want employees to feel they work within an open and
inclusive culture, where they can come to work and be their
true selves and fulfil their potential with the relevant
support. We want colleagues to feel valued, respected and
recognised, feeling empowered in their role to contribute
their best. We also want to attract and retain a diverse
talent pool, with different skills and experiences, bringing
creativity and innovation.
E M P LOY E E E N G AG E M E NT
Redrow 2025
This is an ambitious project focused on accelerating
innovation across the business and commenced during the
year with the biggest team consultation in Redrow’s history.
Over 2,000 colleagues input their thoughts and ideas via a
combination of surveys, virtual conferences, focus groups
and one to one meetings. All the ideas have been collated
and are helping to shape strategy and development
projects which will be formally announced later in the new
financial year.
INsight Employee Engagement Survey 2021
The results from our latest survey in March 2021 showed
that the overall Engagement index had increased slightly to
82%, a particularly pleasing result in the context of the past
year. We were pleased to maintain a high response rate
(81%) and high scores in areas such as “proud to work for
Redrow” (93%) and “would recommend Redrow to a friend”
(88%).
Highlights are:
• 93% proud to work for Redrow;
• 88% would recommend Redrow as a place to work;
• 95% of colleagues believe we have a good future as a
company;
• 89% of colleagues feel supported by their manager and
89% believe their manager genuinely cares about them
as a person;
• 82% believe the company cares about their personal
health & wellbeing.
Workforce Engagement
During the year we formed a national Workforce
Engagement group of representatives from across all of our
divisions. This forum will enable the sharing of ideas and
suggestions from the workforce with our Nominated NED
for Workforce Engagement, Nicky Dulieu. Nicky hosted our
first virtual meeting in May where discussion points raised
included communication, benefits and working
arrangement. Feedback from the representatives was
unanimously positive welcoming the openness of the
debate.
Nicky gave feedback to the Board and we were pleased to
implement the following improvements:
• All Sales Consultants to have one weekend off every 6
weeks
At Redrow, a healthy work-life balance is very important
to us and we understand that our employees want to
have the flexibility to make plans and enjoy time with
their friends and family. Our Sales Consultants provide
continuous support to our customers 7 days a week and
for this we are exceptionally grateful. That is why from
October 2021, all of our sales consultants will be given
one weekend off every six weeks.
• Quarterly Update from our Managing Directors
It was great to hear our representatives share best
practice of what works well in their division and
something that was very clear was the appreciation of
regular updates from the Managing Director or Head of
Department. The whole group felt strongly that this was
something all colleagues would benefit from. Moving
forward we have asked all Managing Directors and
Heads of Department to provide an in person or video
update to provide an overview of news within each
division and beyond. We hope this will support us in
keeping everyone informed and up to date across the
business.
• Improved PPE for employees and visitors
Over the last 12 months we have made great strides in
continuing to embed equality, diversity and inclusivity in
everything we do here at Redrow. Working closely with
our ED&I representatives across the divisions has
allowed us to better understand how we can continue to
adapt and make changes for the better. Feedback from
the workforce engagement group and our
representatives has highlighted a key area for
improvement which focuses on our PPE offering and the
As an ‘Equal Opportunities’ employer and working hard
over several years to employ and promote more women in
construction and technical roles, we continue to drive
towards an all-encompassing culture of equality, diversity
and inclusion.
An EDI Working Group was formed in October 2019. The
50 plus volunteer members act as EDI representatives to
support and facilitate delivery whilst promoting the policy
and its principles throughout their divisions. They
represent colleagues and feed back any suggestions and
ideas to ensure EDI is always developed and maintained.
Every business division and Head Office is represented on
the EDI Working Group.
We also have a dedicated EDI intranet page and
employees are encouraged to share stories and events
from a diverse range of cultures. For example, we have
celebrated Chinese New Year, championed women in
construction on International Women’s Day, shared articles
and blogs about Ramadan and an inclusion calendar is
available for all to learn and share information on key dates
and celebrations.
Over 30 virtual workshop sessions have been delivered to
more than 350 colleagues, including Executive Board
members and leadership teams, to inspire managers to be
inclusive, effective and to encourage and embrace
diversity in all aspects of the business, ensuring that
colleagues’ similarities and differences are celebrated in
an environment where all employees can fulfil their
potential. We have e-learning outlining the benefits of EDI
available to everyone in the company.
We have also introduced specific diversity targets to our
recent recruitment campaign for new graduate employees.
This was a success with a significant increase in the
R E A L LI V I N G WAG E ACC R E D ITATI O N
As part of our commitment to create a supportive
environment for everyone who works in the Redrow family,
we are proud to now be accredited as a Real Living Wage
employer.
This voluntary benchmark is for employers that wish to
ensure their staff earn a wage they can live on, not just the
statutory minimum, as it is the only hourly rate calculated
based on the costs of living.
As well as our own employees our commitment also
extends to our suppliers and subcontractors.
We are proud to join this voluntary movement of 7,000
employers who, as the Living Wage Foundation says, are
“businesses that recognise that paying the Real Living
Wage is the mark of a responsible employer”.
E Q UA LIT Y, D I V E R S IT Y A N D I N C LU S I O N ( E D I )
We are committed to continuously promoting Equality,
Diversity and Inclusion throughout the business to build a
culture that is inclusive to all, actively values difference and
ensures everyone is treated fairly. Our Policy and all its
associated initiatives will deliver an EDI agenda which
focusses on attracting and retaining a diverse workforce
which promotes an inclusive environment, where all
employees are given equal access to opportunities
allowing them to contribute their best work and develop to
their full potential.
Image: Sales Consultant at Ledsham Garden Village, Cheshire
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facilities accessible to females on site. We are currently
in the process of reviewing our PPE to ensure that this is
suitable for all colleagues and visitors who come to our
sites, as noted earlier on pages 41 to 42. This includes
widening the range of sizes for boots, high vis and hard
hats.
The group will meet every 6 months from now on and will
be able to table comments in between.
LE A R N I N G A N D D E V E LO P M E NT
Learning & Development continues to be at the heart of our
business. This year we have seen a successful move to a
more dynamic and flexible approach to our training by
delivering shorter focused virtual sessions. In total we have
delivered 4,083 training days, overall this has led to a
reduction in training days per head but a more effective
and efficient delivery method.
We have also seen great success with our external
partners who have switched to remote delivery, this has
meant our employees have still maintained high levels of
engagement and learning via Google Classroom and virtual
environments. Our new remote delivered programme in the
form of our Level 4 Apprenticeship in assistant site
management operated by NHBC has been a great success
and the added flexibility of remote learning has been fully
embraced.
In addition to these successes we have also invested in
upgrading our Learning Management system, Your
Learning, improving the user journey and enhancing
resources through internal development and hosting of
external content and resources.
We are committed to succession planning and developing
the next generation of homebuilders and are pleased to
have had 211 internal promotions in the financial year.
Redrow Housebuilding Degree with Liverpool John
Moore’s University and Coleg Cambria
Fully funded by Redrow, this specialist degree is designed
to provide support and on the job experience, while
expanding knowledge in all areas of construction
technology and management. From building regulations,
surveying and setting out, project management and health
STRATEGY IN ACTION
N H BC TR A I N I N G H U B
This has been developed by Redrow on behalf of the
NHBC.
The Hub has a clear focus on the skills needed in the
house building sector and on quality issues within
brick and blockwork. Through upfront intensive blocks
of learning rather than day release, our aim is to
produce bricklayers who can positively contribute
onsite early in their apprenticeship and complete their
programme within 18 months.
This one-of-a-kind, purpose-built facility will immerse
bricklaying apprentices in a realistic working
environment. The site resembles a typical site
compound, with a large covered central space for
practical work alongside high specification
classrooms and welfare facilities. The Hub design was
informed by an industry working group and built in
partnership with Redrow to meet the very specific needs of all housebuilders.
The NHBC bricklaying Training Hub, Tamworth, Midlands
"With the collaboration and support of Redrow’s Midlands division, the NHBC Training
Hub will help to address the vital skills' gaps in the house building industry and provide
employment opportunities for many young people for years to come.”
Steve Wood, Chief Executive – NHBC
Image: Redrow apprentice learning bricklaying at the NHBC Training Hub
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O PE R ATI N G R E V I E W CO N T I N U E D
and safety to construction law, maths and economics, the
syllabus provides a fantastic opportunity to enhance
understanding of our business and the wider industry.
We originally offered this as an upskilling option for our
existing employees and our first cohort has graduated this
year. In 2020 we opened the degree to new entrants for
the first time and recruited 16 youngsters who had
completed their A levels and were looking for a “learn and
earn” option. We were delighted with the calibre of the
applicants and hope this will prove a successful pipeline
for future talent.
Graduate Opportunities
We realised in the summer of 2020 that our swift return to
production put us in a strong position to offer opportunities
for graduates who had seen their career options limited by
COVID-19. We opened up 30 training positions across our
divisions and group support functions.
Interest was high with over 1,100 applicants and we were
delighted with the calibre. As part of our drive to increase
diversity in our workforce we ensured that our recruitment
process was as inclusive as possible and this resulted in an
improvement to 25% of the successful applicants being
from a BAME background and over 30% female.
Conscious that these new colleagues were largely working
from home initially and would not have benefited from
building working relationships as quickly as usual we
designed a “virtual induction” process which has continued
throughout with regular catch ups and introductions to the
leaders across the business.
H E A LTH A N D W E LLB E I N G
The Company recognises that the physical and mental
health and wellbeing of its employees is vital to the
success of the business.
During the COVID-19 lockdown period and in the time
since, there has been an increase in the frequency and
quality of employee communications with a particular focus
on supporting the whole family. We have signposted
quality educational resources to support employees who
were homeschooling their children and hosted workshops
with one of our charity partners, the NSPCC, on childrens’
mental health, resilience and on-line safety.
We have continued to train Mental Health First Aiders
across the Divisions, in both offices and onsite and have
implemented support mechanisms for them including a
closed forum on the Company’s intranet and a Buddy
System.
We have continued and enhanced our promotion of MyLife,
our employee assistance programme which is available to
all employees, subcontractors and their families 24/7.
Image: Parental support for colleagues as advertised on the Redrow intranet, Engage
STRATEGY IN ACTION
G R A DUATE CO M M U N IT Y PROJ EC T
As part of our commitment to social mobility we tasked
our current Graduate Trainee cohort to identify and
engage with schools close to a Redrow development
with a high pupil premium that would benefit from the
provision of donated educational wildlife resources.
The projects supported their development in team-
working and included the project management of the
design, creation and delivery of wildflower planters,
bug hotels, bird boxes, mud kitchens and living walls
from recycled and sustainable materials, all agreed in
consultation with the schools and children. The teams
approached our subcontract partners for donations of
materials and our apprentices and site teams helped
build the items and then provided delivery to sites.
Children across the country were given the opportunity
to immerse themselves in the natural environment,
while contributing to our communities at the same time.
Schools in Cheshire, Wakefield, London, Newport,
Deeside, Oldham and the South Midlands all benefited
from the work of Redrow graduates.
Karen Jones, HR Director of Redrow, commented: “Our
graduates have had to project manage the design,
creation, and delivery of wildflower planters, bird
boxes, bug hotels, mud kitchens and other creative
items, using sustainable and recycled materials.
They worked with our site teams, trade apprentices and
subcontractors to build the items, and provide the
plants, seeds and flowers. We think they have done a
fantastic job and are proud of what they have achieved
and would like to thank everyone involved for providing
them with support.
Redrow’s well-established Graduate Community
Programme has long benefitted local neighbourhoods.
The latest outreach has been adapted to take social
distancing regulations into consideration, but we were
keen to keep adding value to the communities we are
at the heart of.”
Rebecca Blott, a current graduate on Redrow’s
programme, added: “Seeing how excited the children
were to receive the planters and plant the wildflower
seeds made all the logistical difficulties worthwhile.
The graduate scheme provides first-hand insight into
every department within Redrow and invaluable
exposure to the construction industry as a whole. For
anyone thinking of joining a similar scheme, my advice
would be to go for it!”
Image: Graduate Rebecca Blott with children from Nicholas Hawksmoor
Primary School in Towcester, Northamptonshire
Image: Assistant Site Manager Obie Ebizie with children from Whitegate
Primary School in Oldham, Lancashire
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S TR ATE G I C R E P O R T
FI N A N C I A L R E V I E W
Throughout the periods of full and partial lockdown and in
the return to workplaces we have consciously adopted an
approach of more personal engagement with employees,
with the HR Business Partners supporting our people to
manage their personal challenges on an individual basis
rather than one size fits all policies.
We have introduced a fortnightly Health and Wellbeing
newsletter distributed to colleagues across the business
giving useful tips and links to quality resources.
CO M M U N IT Y E N G AG E M E NT
In addition to the monies Redrow invests to fund
improvements to local communities linked to planning
consents, many of our divisions operate voluntary
Community Funds. Applications are invited from local
charities, community groups and worthy causes in the
locality of our developments and considered by a funding
panel with the objective of sharing the funding across a
diverse range of local projects that would benefit.
We have facilitated many new online sessions for
employees from yoga and mindfulness to financial
wellbeing webinars hosted by the Company’s pension
provider.
The HR department has a dedicated team focusing on
health and wellbeing to ensure that health remains a key
priority and that the wellness initiatives in place are fit for
purpose.
Examples of the types of organisations and projects
supported in this way during the year include:
• A variety of local junior sports clubs to provide
equipment;
• Food banks;
• Local primary schools; and
• Community care and support groups.
We are mindful of the extra pressures charities and
community groups have faced this year because of
COVID-19.
“This year the Group has delivered a strong set of results,
above expectations, representing a significant
improvement on the prior year which was severely
impacted by the COVID-19 pandemic”.
Average selling price increased by 2% to £338,500 (2020:
£330,400) due to an increase in both private and
affordable housing selling prices compared to the previous
year. The private average selling price at £391,900 was 1%
higher than last year (2020: £386,700) with our Heritage
Collection private average selling price increasing to
£393,900 (2020: £388,700). Homes revenue increased
across all geographical regions with the largest increase in
the South.
As a result of the increase in legal completions and the
fixed nature of certain elements of cost of sales, gross
margin increased to 21.4% compared to 18.1% in the prior
year. This resulted in a gross profit of £414m, up 71% on last
year (2020: £242m).
Administrative expenses reduced slightly in absolute terms
to £93m in the year (2020: £94m) and, again due to their
relatively fixed nature, reduced more significantly as a
percentage of revenue to 4.8% (2020: 7.0%).
The Group therefore delivered an operating profit of £321m
(2020: £148m) in the year at an operating margin of 16.6%
(2020: 11.1%).
Net financing costs at £7m were £1m lower than the prior
year with bank interest reducing due to the improved net
cash position. We had an average monthly net cash
balance of £142m for the year compared to £2m the
previous year.
E A R N I N G S P E R S H A R E
92.3p
85.3p
70.2p
73.7p
32.9p
B A R B A R A R I C H M O N D
Group Finance Director
P R O F ITA B I LIT Y
This year the Group has delivered a strong set of results,
above expectations, representing a significant
improvement on the prior year, which was severely
impacted by the COVID-19 pandemic.
Total Group revenue was £1.9bn (2020: £1.3bn), an increase
of 45%. Homes revenue was £1.9bn (2020: £1.3bn) from the
completion of 5,620 new homes (2020: 4,032) and other
revenue from land sales was £37m (2020: £7m) which
included the disposal of two London sites the Group
decided not to build out.
H O M E S R E V E N U E BY G E O G R A P H Y
2021
2020
21% North
22% Central
40% South
23% North
26% Central
37% South
Image: A selection of community engagement projects completed during the year
17% Greater London
14% Greater London
17
18
19
20
1818
21
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FI N A N C I A L R E V I E W CO N T I N U E D
As a result, the Group delivered a profit before tax of
£314m (2020: £140m) for the year with basic earnings per
share up 124% at 73.7p (2020: 32.9p).
TA X
The corporation tax charge for the year was £60m (2020:
£27m). The Group's tax rate for 2021 was 19% in line with
2020. The normalised rate of corporation tax for the year
ending 30 June 2022 is also projected to be 19% based
on rates which are substantively enacted currently. HM
Treasury has undertaken a consultation on a Residential
Property Developers Tax, the outcome of which is
awaited. We would expect to be within the scope of this
new tax, which is currently expected to commence in
April 2022 per the consultation.
The Group paid £54m of corporation tax in the year
(2020: £64m), in four instalments. In the previous financial
year, the new legislation for corporation tax payments by
very large companies took effect. This resulted in Redrow
paying six instalments in the financial year ended June
2020.
D I V I D E N D S
The Board has proposed a 2021 final dividend of 18.5p
per share which will be paid on 17 November 2021 to
Shareholders on the register on 24 September 2021,
subject to Shareholder approval at the 2021 Annual
General Meeting. The full year dividend is therefore
24.5p (2020: nil p) on earnings per share of 73.7p. This is
a return to a payout ratio of 33% of earnings following a
pause in dividend payments last year due to the
uncertainty surrounding the pandemic.
Based on a corporation tax rate of 25% in FY2024, we are
targeting earnings per share of at least 90.0p and
therefore a dividend per share of at least 30.0p. This
represents a like for like increase on FY2021 dividend
levels of 32%.
R E TU R N O N C A P ITA L E M P LOY E D
28.5%
28.5%
26.0%
18.5%
9.2%
17
18
19
20
1818
21
Image: New Fields, Chichester, West Sussex
R E TU R N S
Net assets at 27 June 2021 were £1,872m (2020:
£1,626m), a 15% increase. Capital employed at the same
date was £1,712m (2020: £1,752m) down 2% due to the
increased net cash and a return to more normal levels of
work in progress. Our return on capital employed
increased to 18.5% (2020: 9.2%) (See note 15f ). Return on
equity also increased from 8.7% to 18.0%. (See note 23).
I N V E NTO R I E S
Our gross investment in land was broadly in line with
prior year levels at £1,526m (2020: £1,538m) representing
owned with planning land holdings of approximately 5.2
years. Approximately 43% of our current land bank
additions in 2021 came from our forward land holdings,
broadly in line with the five year average contribution.
Land creditors decreased slightly to £294m at June 2021
(2020: £302m) representing 19.3% of gross land value,
broadly in line with the prior year (2020: 19.6%).
Our owned plot cost has reduced by £2,000 per plot to
£76,000 at June 2021 (2020: £78,000), representing 19%
of the average selling price of private legal completions
in the year (2020: 20%). This is in part due to obtaining
planning permission for a further 1,100 plots on our
Colindale site in London.
Our investment in work in progress has decreased by
£60m to £987m (2020: £1,047m). This reduction from the
higher than normal closing position last year was
expected and is a consequence of the timing of legal
completions this year compared with 2020. As a
percentage of Homes turnover, it reduced to 52% from
79% last year.
R E C E I VA B LE S
Trade receivables and contract assets increased by £50m
at June 2021 to £75m (2020: £25m) due primarily to the
timing of PRS receipts. Other receivables increased from
£8m to £21m mainly due to the timing of the recovery of
VAT on land payments.
PAYA B LE S
Trade payables, customer deposits and accruals were
£3m higher than 2020 levels at £607m (2020: £604m)
with trade payables increasing and customer deposits
decreasing reflecting levels and timing of activity.
C A S H F LOW A N D N E T D E B T
There was a cash inflow generated from operations of
£362m in the year (2020: cash outflow of £80m). This is
due to the increase in legal completions and hence
revenue and cash receipts. As a result, we closed the
year with a net cash of £160m compared to a net debt
balance at June 2020 of £126m.
F I N A N C I N G A N D TR E A S U RY M A N AG E M E NT
In March 2021, we extended our unsecured £350m
syndicated loan facility due to mature in December 2022 to
30 September 2025. In the light of net cash projections, at
the same time we cancelled £13m of committed, unsecured
bilateral facilities, as these were no longer required.
Redrow remains a UK based housebuilder and therefore
the main focus of its financial risk management surrounds
the management of liquidity and interest rate risk. Financial
management at Redrow is conducted centrally using
policies approved by the Board.
(i) Liquidity
The Group regularly prepares and reviews its cash flow
forecasts and stress tests them. These are used to
manage liquidity risks in conjunction with the
maintenance of appropriate committed banking
facilities to ensure we maintain medium term
committed banking facilities sufficient for a major
market breakdown.
Facilities are kept under regular review and the Group
maintains regular contact with its banks and other
financial institutions; this ensures Redrow remains
attuned to new developments and opportunities and
that our facilities remain aligned to our strategic and
operational objectives and market conditions.
Our current banking syndicate comprises six banks and
in addition to our committed facilities, Redrow also has
further uncommitted bank facilities which are used to
assist day to day cash management.
(ii) Interest Rate Risk
The Group is exposed to interest rate risk as it borrows
money at floating rates. Redrow occasionally uses
simple risk management products, notably sterling
denominated interest rate swaps, as appropriate to
manage this risk. Such products are not used for
speculative or trading purposes. Redrow regularly
reviews its hedging requirements. No hedging was
undertaken in the year or the previous financial year
and no interest rate swaps are held currently (2020: nil).
P E N S I O N S
As at June 2021, the Group’s financial statements showed a
£40m surplus (2020: £22m surplus) in respect of the
defined benefits section of The Redrow Staff Pension
Scheme (which closed to future accrual with effect from 1
March 2012). The £18m increase is mainly due to
experience adjustments as a result of the triennial valuation
of the defined benefit element of the Scheme as at 1 July
2020 being completed in the year.
B A R B A R A R I C H M O N D
Group Finance Director
14 September 2021
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R I S K M A N AG E M E NT
H OW W E M A N AG E R I S K
BOA R D OV E RS I G HT
M A I N B OA R D
Audit Committee
Nomination Committee
Remuneration Committee
Placemaking and
Sustainability Committee
O PE R ATI O N A L M E ETI N GS
E X E C UTI V E M A N AG E M E NT TE A M
Divisional Boards
Functional Seminars
Team Meetings
P O LI C I E S FO R I D E NTI F Y I N G A N D CO NTRO LLI N G R I S KS
Budgeting & Forecasting
Price & Sales Monitoring
Cost Reviews
Land Bank Management
PRO C E DU R E S A N D I NTE R N A L CO NTRO L S
Business Policies and Procedures
Authorisation Processes
System Based Controls
P
O
L
I
C
I
E
S
A
N
D
D
E
C
I
S
I
O
N
S
G
N
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T
R
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P
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R
D
N
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N
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M
OU R R I S K M A N AG E M E NT PROC E SS
Our Risk Assessment Process
Key Risk Management Objectives:
• To ensure our approach to risk meets the needs of our business and its key stakeholders;
• To ensure that a robust assessment is made of emerging and principal risks;
• To effectively communicate our risks and define responsibilities in order to manage risk;
• To continually evaluate and review the impacts of any potential new risks occurring within our business; and
• To develop and implement action plans to mitigate risks as appropriate.
Identify
Key areas
of focus
Mitigate
Review
Monitor
Implement control
processes and insurance
Performance, principal
risks and controls
Use of key
risk indicators
Main Board
• The ultimate responsibility for the effective management of the risks we face in order to achieve our strategic
and financial objectives lies with the Main Board;
• Material and emerging risks and principal concerns are identified and robustly assessed as part of our risk
assessment framework, following a detailed review of the Company’s strategic objectives;
• These headline risks are then approved by the Board to be included within our risk register;
• The risk register is reviewed formally annually and updated for any new risks identified during our Risk
Assessment processes; and
• It is also presented to the Audit Committee for final review and consideration to ensure that it is appropriate and
reflects our business risks.
Operational Divisions
Business Process Reviews
Site Completion Reviews
at the divisional level and Group department level;
• All identified high level risks are then further broken down into components and sub level risks to be considered
• Management responsibility to implement the Board’s polices on risk management and internal controls; and
• Internal controls operated to mitigate, control and continuously monitor these risks.
PE O PLE A N D CU LTU R E
Professionalism
Clear Communication
Qualified Personnel
Pride and Achievement
Interests Aligned with Stakeholders
Commitment to Training
BUS I N E SS R I S KS
Risk Owners & Executive Management Team
• Any new risks identified at divisional level and Group department level are individually robustly assessed and
evaluated on their potential impact to the business and its likelihood of occurrence;
• These risks are then communicated to the Risk Owners who will use this assessment to inform their formal view
on these risks and all previously identified risks;
• The probability and potential impact for each sub level risk is assessed by the Risk Owners;
• It is then the Risk Owners responsibility to ensure key preventive and detective controls are designed and
implemented to address these risks and ensure their inclusion in our risk register; and
• Group Policies and Procedures are updated to reflect any new or improved key controls or processes.
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R I S K M A N AG E M E NT CO N T I N U E D
S T R AT E G I C O B J E C T I V E
R I S K
R I S K O W N E R S
K E Y C O N T R O L S A N D M I T I G AT I N G S T R AT E G I E S
R I S K M OV E M E N T
Housing Market
The UK housing market conditions have a direct impact on our
business performance.
Group
Chief Executive
THRIVING
COMMUNITIES
Increased Government regulation.
This year the risk has reduced slightly due to the market and
ourselves being better placed to manage through a pandemic and
the reduction in the likelihood of general price deflation.
Customer Service
Failure of our customer service could lead to relative under
performance of our business.
Group Customer
& Marketing
Director
Key Supplier or Subcontractor Failure
The failure of a key component of our supply chain to perform due to
financial failure or production issues could disrupt our ability to
deliver our homes to programme and budgeted cost.
Group
Commercial
Director
This year the risk has increased due to inflationary pressures on both
materials and labour and supply interruptions and shortages of
certain components.
THRIVING
COMMUNITIES
VALUING
PEOPLE
BUILDING
RESPONSIBLY
VALUING
PEOPLE
Ongoing and regular monitoring of Government policy
consultations and developments and lobbying as
appropriate.
Close monitoring of Government guidance.
Market conditions and trends are being closely monitored
allowing management to identify and respond to any sudden
changes or movements.
Weekly review of sales at Group, divisional and site level
with monitoring of pricing trends and customer
demographics.
Ensuring strong relationships with lenders and valuers to
ensure they recognise our premium product.
Delegated Crisis Committee established with Executive
Board meetings a minimum of twice weekly in times of crisis.
Customer and Quality Director.
My Redrow website to support our customers purchasing
their new home. Increased use of digital and virtual
communication tools.
Online systems provide a full audit trail of the sales
process.
Full training on New Homes Ombudsmen requirements.
Attention to customer feedback supported by a process at
nine months post occupation to address root cause of
customer fatigue and dissatisfaction.
Regular review of our marketing and communications
policy at both Group and divisional level.
Use of reputable supply chain partners with relevant experience
and proven track record and maintain regular contact.
Monitoring of subcontract supply chain to maintain appropriate
number for each trade to identify potential shortage in skilled
trades in the near future.
Subcontractor utilisation on sites monitored to align workload
and capacity.
Materials forecast issued to suppliers and reviewed regularly.
Collaborate with Supply Chain Partners in development of supply
continuity strategies.
Group Monthly Product Development meetings to identify and
monitor changes in the regulatory environment.
Tracking of construction cost movements.
E X A M P LE K E Y
R I S K I N D I C ATO R S
• Leading market indicators
re volumes and values
• Weekly sales statistics
• Customer satisfaction
metrics (see pages 8 to 9).
• NHBC Construction
Quality Review scores and
Reportable Items (see
pages 10 to 11)
• Material and trade
shortages
• Material and trade price
increases
• Advance payment
applications
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R I S K M A N AG E M E NT CO N T I N U E D
S T R AT E G I C O B J E C T I V E
R I S K
R I S K O W N E R S
K E Y C O N T R O L S A N D M I T I G AT I N G S T R AT E G I E S
R I S K M OV E M E N T
Health and Safety/Environment
Non-compliance with Health & Safety standards and Environmental
regulations could put our people and the environment at risk.
Increased levels of scrutiny of the housebuilding industry heightens
the risk environment as does ensuring safe COVID-19 working
practices are adhered to.
This year the risk has also increased due to greater stakeholder and
regulatory focus on climate change.
Group Health and
Safety and
Environmental
Director
THRIVING
COMMUNITIES
BUILDING
RESPONSIBLY
VALUING
PEOPLE
Sustainability
Risks associated with climate change and failure to embed
sustainable development principles.
Group
Communities
Director
THRIVING
COMMUNITIES
This year the risk has also increased due to greater stakeholder and
regulatory focus on climate change and ESG generally.
BUILDING
RESPONSIBLY
Dedicated in-house team operating across the Group to
ensure compliance of appropriate Health and Safety
standards supported by external professional expertise.
H,S&E Assurance Audits.
Monthly Divisional H,S&E Leadership meetings.
Group and Regional H,S&E Leadership meetings.
Internal and external training provided to all employees.
Divisional Construction (Design and Management)
Regulation (CDM) inspections carried out to assess our
compliance with our client duties under CDM.
Health and Safety discussion at both Group and divisional
level board meetings supported by performance
information.
CDM competency accreditation requirement as a minimum
for contractor selection process.
Regular monitoring and reporting on environmental
performance.
Preparation and planning underway for Future Homes
standard.
Preparation for future Environmental Bill through
implementation of our Nature for People Strategy.
Close monitoring of Government guidance.
Regular benchmarking against peers.
ESG scorecard.
Risks and Opportunities assessment aligned to TCFD
framework.
Training for divisional teams.
E X A M P LE K E Y
R I S K I N D I C ATO R S
• Accident incident rate (see
pages 8 to 9)
• H,S&E Assurance Audits
outcomes
• ‘Near Miss’ statistics
• Group GHG emissions
scope 1 & 2
• % of timber certified
• Average SAP rating
• Tonnes of construction
waste per 100m2 build
• % of materials suppliers
and manufacturers who
have actively confirmed
compliance with the
Modern Slavery legislation
and Redrow Code of
Conduct
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R I S K M A N AG E M E NT CO N T I N U E D
S T R AT E G I C O B J E C T I V E
R I S K
R I S K O W N E R S
K E Y C O N T R O L S A N D M I T I G AT I N G S T R AT E G I E S
R I S K M OV E M E N T
THRIVING
COMMUNITIES
BUILDING
RESPONSIBLY
VALUING
PEOPLE
BUILDING
RESPONSIBLY
THRIVING
COMMUNITIES
BUILDING
RESPONSIBLY
Planning and Regulatory Environment
The inability to adapt to changes within the planning and regulatory
environment could adversely impact on our ability to comply with
regulatory requirements.
This year the risk has increased due to potential implications arising
from the National Model Design Code and other proposed
Government legislation, including proposed Residential Property
Developers Tax.
Group
Communications
Director, Group
Human Resources
Director, Group
Company
Secretary and
Managing Director
(Harrow Estates)
Cyber Security
Failure of the Group’s IT systems and the security of our internal
systems, data and our websites can have significant impact to our
business.
Chief Information
Officer
Lobby and communicate with local authorities to facilitate
early collaboration to shape developments including where
a National Model Design Code (NMDC) is required.
Close management and monitoring of planning expiry
dates and CIL.
Well prepared planning submissions addressing local
concern and deploying good design.
Careful monitoring of the regulatory environment and
regular communication of proposed changes across the
Group through the Executive Management Team.
Proactive approach to managing data protection with
multi-functional team meeting regularly.
Effective engagement with local authorities to understand
the extent of their policies relating to climate change.
Cyber Awareness campaigns.
Communication of IT policy and procedures to all employees.
Regular systems back up and storage of data offsite.
Internal IT security specialists.
Use of third party entity to test the Group’s cyber security
systems and other proactive approach for cyber security
including Cyber Essentials Plus accreditation.
Compulsory GDPR and IT security online training to all
employees within our business.
The systems have proved resilient to increased home working.
Cyber Insurance.
Land Procurement
The ability to purchase land suitable for our products and the timing
of future land purchases are fundamental to the Group’s future
performance.
Group Chief
Executive
Proactive monitoring of the market conditions to implement a
clear defined strategy at both Group and divisional level.
Experienced and knowledgeable personnel in our land,
planning and technical teams.
Appropriate investment in strategic land programme supported
by specialist Group team.
Effective use of our Land Bank Management system to support
the land acquisition process.
Close monitoring of progress of relevant Local Plans.
Peer review by Legal Directors and use of third party legal
resources for larger site acquisitions to reduce risk.
Monitoring of emerging legislation to inform land assessments
and purchase terms.
E X A M P LE K E Y
R I S K I N D I C ATO R S
• Government consultations
• Planning approval
statistics
• Proposed Government
legislation
• Level of instances
reported in the media
• Penetration test results
• Forward land pull through
(see page 36)
• Owned land holding years
(see page 5)
• Land offer statistics
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R I S K M A N AG E M E NT CO N T I N U E D
S T R AT E G I C O B J E C T I V E
R I S K
R I S K O W N E R S
K E Y C O N T R O L S A N D M I T I G AT I N G S T R AT E G I E S
R I S K M OV E M E N T
Fraud/Uninsured Loss
A significant fraud or uninsured loss could damage the financial
performance of our business.
Group Finance
Director
BUILDING
RESPONSIBLY
Systems, policies and procedures in place which are
designed to segregate duties and minimise any opportunity
for fraud.
Regular Business Process Reviews undertaken to ensure
compliance with procedure and policies followed by formal
action plans.
Timely management reporting.
Insurance strategy driven by business risks including Cyber
Insurance.
Fraud awareness training.
Availability of Mortgage Finance
Availability of mortgage finance is a key factor in the current
environment.
THRIVING
COMMUNITIES
This risk has decreased slightly in the year due to a reduction in the
uncertainty around the impact of Help To Buy changes.
Group Finance
Director
Proactively engage with the Government, Lenders and
Insurers to support the housing market.
Expert New Build Mortgage Specialists provide updates on
and monitoring of regulatory change.
Attracting and Retaining Staff
The loss of key staff and/or our failure to attract high quality
employees will inhibit our ability to achieve our business objectives.
Group Human
Resources
Director
VALUING
PEOPLE
In-house training offering blended learning to all
employees.
Suite of development programmes for identified talent from
first line manager to Director.
Move to agile working practices embracing use of remote
working.
Graduate training, Undergraduate placements and
Apprentice training programmes to aid succession
planning.
Bespoke housebuilding degree course in conjunction with
Liverpool John Moores University and Coleg Cambria.
Remuneration strategy in order to attract and retain talent
within the business is reviewed regularly and
benchmarked.
Engagement Team and continued refinement of internal
communications platform in addition to annual employee
survey to create framework for strong, two-way
communication.
Flexible Working Policy.
E X A M P LE K E Y
R I S K I N D I C ATO R S
• Business Process Review
outcomes
• Insurance Review
outcomes
• Loan to value metrics
• Number of mortgage
products readily available
• Employee turnover levels
(see pages 10 to 11)
• Employee engagement
score (see pages 10 to 11)
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R I S K M A N AG E M E NT CO N T I N U E D
S T R AT E G I C O B J E C T I V E
R I S K
R I S K O W N E R S
K E Y C O N T R O L S A N D M I T I G AT I N G S T R AT E G I E S
R I S K M OV E M E N T
Liquidity and Funding
The Group requires appropriate facilities for its short-term liquidity
and long-term funding.
Group Finance
Director
Medium term committed banking facilities sufficient for a
major market breakdown.
BUILDING
RESPONSIBLY
THRIVING
COMMUNITIES
BUILDING
RESPONSIBLY
Appropriateness of Product
The failure to design and build a desirable product for our customers
at the appropriate price may undermine our ability to fulfil our
business objectives.
This risk has increased in the year due to the greater likelihood of
additional regulatory requirements.
Group Design and
Technical Director
Regular communication with our investors and relationship
banks, including visits to developments as appropriate.
Regular review of our banking covenants appropriateness
and design and capital structure.
Ensuring our future cash flow is sustainable through
detailed budgeting process and reviews and scenario
modelling.
Strong forecasting and budgeting process.
Monitor requirements for future bonds in emerging
planning agreements.
Regular review and product updates in response to the
demand in the market and assessment of our customer
needs.
Design focused on high quality build and flexibility to
planning changes.
Regular site visits and implementation of product changes
to respond to demands.
Focus on award winning Heritage Collection.
Regular design and technical seminars.
Monitor Government emerging legislation.
E X A M P LE K E Y
R I S K I N D I C ATO R S
• Cash conversion
• Forecast undrawn
committed facilities
• Customer satisfaction
metrics (see pages 8 to 9)
• Focus Group feedback
• Emerging planning
regulation
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R I S K M A N AG E M E NT CO N T I N U E D
GOING CONCERN AND VIABILITY STATEMENT
An assessment of going concern is included in the Basis of Preparation section of Accounting Policies on page 184.
Viability
In accordance with Provision 31 of the UK Corporate Governance Code 2018, the Directors have assessed the prospects
and viability of the Group.
The Directors’ assessment has made reference to our current position, the potential impact of the principal risks facing
the Group, including the economic uncertainty arising from the COVID-19 global pandemic and the Group’s risk and risk
management attitudes and processes.
The Directors have selected a three year timeframe over which to assess the viability of the Group from 28th June 2021
to 30 June 2024. This timeframe was selected as it corresponds with the Board’s three year planning horizon.
On an annual basis, the Directors formally review the financial forecasts for the Group. These incorporate assumptions
about the timing of legal completions of new homes and land purchases, selling prices, profitability, working capital
requirements and cashflows.
The three year plan has been stress tested taking into account the following robust downside assumptions:
• a 10% price reduction on all unexchanged private and social legal completions for FY2022 and FY2023 compared to
base case Board approved budgeted prices;
• a 15% volume reduction for FY2022 and FY2023 compared to base case Board approved budgeted volumes;
• a 4% build cost increase on budgeted cost from Q1 FY2023 onwards; and
• FY2024 legal completions at budgeted prices and volumes.
No mitigation has been applied.
The Directors confirm that they have a reasonable expectation that the Group will be able to continue in operation and
meet its liabilities as they fall due over the three year period ending 30 June 2024.
G ROU P N O N - FI N A N C I A L
I N F O R M ATI O N S TATE M E NT
The table below sets out where key non-financial information can be found within this report:
Related policies available
on our website
Environment
Purchasing of sustainable
timber products policy
Environmental policy
statement
Health, Safety and
Environmental policy
statement
Partnering with our
supply chain
A responsible and
sustainable developer
Employees
Equality, diversity and
inclusion policy
statement
Social
A responsible and
sustainable developer
Human rights policy
statement
Health, Safety and
Environmental policy
statement
Partnering with our
supply chain
Human Rights
Human rights policy
statement
Slavery and human
trafficking statement
Location in this Annual Report
Operating Review – Responsible Sourcing
Operating Review – Delivering our Nature for People
Strategy
Operating Review – Health, Safety & Environment
Page
Ref.
52
37
42
Operating Review – Partnering with our Supply Chain
52
Related Principal Risks*
Health and Safety/
Environment
Key Supplier or
Subcontractor Failure
Appropriateness of
Product
Sustainability
Operating Review – Reducing our Carbon Impact
Directors’ Report – Environmental
Operating Review – Equality, Diversity and Inclusion
Directors’ Report – Workforce Engagement
Directors’ Report – Employee Wellness
Directors’ Report – Equality, Diversity and Inclusion
Policy
Directors’ Report – Learning and Developing
Operating Review – Quality of Build
Operating Review – Partnering with our Supply Chain
Responsibility
Operating Review – Putting our Customers First
Directors’ Report – Social
47
157
56
160
159
159
160
40
52
43
158
Attracting and
Retaining Staff
Housing Market
Health and Safety/
Environment
Attracting and
Retaining Staff
Customer Service
Key Supplier or
Subcontractor Failure
Directors’ Report – Human Rights
Directors’ Report – Modern Slavery
161
162
Attracting and
Retaining Staff
Operating Review – Real Living Wage Accreditation
56
Key Supplier or
Subcontractor Failure
Anti-Corruption and Anti-Bribery
Anti-bribery policy
statement
Whistleblowing policy
statement
Audit Committee Report – Bribery Act
Corporate Governance Report – Whistleblowing
Corporate Governance Report – Conflicts of Interest
Directors Report – Anti-Bribery and Corruption
116
98
98
162
Fraud/Uninsured Loss
Attracting and
Retaining Staff
Cyber Security
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G ROU P N O N - FI N A N C I A L
I N F O R M ATI O N S TATE M E NT CO N T I N U E D
Business Model
A responsible and
sustainable developer
Our Strategy
Our Business Model
Chairman’s Statement – Strategy
Group Chief Executive's Statement - Innovation
across Redrow
Corporate Governance Report – Strategy, Purpose,
Values and Culture
All
4
16
20
24
97
Non-Financial KPIs
A responsible and
sustainable developer
Environmental policy
statement
Health, Safety and
Environmental policy
statement
Our Strategy
5
Land Procurement
Customer Service
Attracting and
Retaining Staff
Health and Safety/
Environment
Planning and
Regulatory
Environment
Appropriateness of
Product
Sustainability
*
For full description of related principal risks, see pages 68 to 77.
The above policies are applicable to all employees within the Group and are easily accessible both internally and
externally. The principles which underpin each of the policies are embedded within the culture of the Group and any
behaviour inconsistent with these policies will be investigated and disciplinary action will be taken where warranted.
S TR ATE G I C R E P O R T A P P R OVA L
The Strategic Report outlined on pages 1 to 89 has been approved by the Board.
By order of the Board
G R A H A M CO P E
Company Secretary
14 September 2021
Image: Colindale Gardens, North West London
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S EC TI O N 17 2(1) S TATE M E NT
of the Directors’ Report, from pages 156 to 163, provides
further insight into measures put in place by the Board to
assist with maintaining a reputation for high business
conduct standards.
Acting fairly between members of the Company (Section
172(1)(f))
The Directors have regard to the need to act fairly between
members of the Company, aiming to understand their views
and act in their best interests. The ownership of the
Company follows a ‘one share, one vote’ structure, which
assists with promoting parity in shareholder rights. The
Board ensures that there is fair and equal dissemination of
information to all shareholders and has a dedicated
investors section of the Company’s website which is
available to all shareholders. This provides easy access to
RNS announcements, key financial dates, dividend details
and reports and publications. In the ordinary course, and
outside of the prohibition on meeting attendance
previously in force by the Government due to the COVID-19
pandemic, all members are invited to attend the Annual
General Meetings of the Company, offering an opportunity
for members of any size shareholding to have a
conversation with, and ask questions to, each of the
Directors. For any Annual General Meetings where
in-person attendance is prohibited due to Government
regulation, all shareholders will be offered the opportunity
to submit questions to the Board ahead of the meeting with
answers being made available to them.
Having regard to specific stakeholder groups (Section
172(1)(b) to Section 172(1)(d))
Pages 84 to 89 identify the priorities of our key
stakeholders and display how the Company has engaged
with them during the year and the impact they have had on
Board decisions.
S E C TI O N 17 2 (1 ) S TATE M E NT
In line with Section 172(1) of the Companies Act 2006, the
Directors of the Company must act in a way which they
consider, in good faith, would most likely promote the
success of the Company for the benefit of its members as a
whole, and in doing so must have regard to a number of
other key matters. There must therefore be a careful
balance of sometimes competing interests of different
stakeholder groups, and it is the duty of the Directors to
act in such a way that should promote the long-term
success of the Company as a whole.
Likely long-term consequences of decisions
(Section 172(1)(a))
Given the nature of the business, the Board takes a
long-term approach to its decision-making to ensure that
the Company is able to deliver its strategy of creating
long-term sustainable value for all of our stakeholders by
developing thriving communities with high quality homes
that provide a better way to live.
There has been considerable emphasis on resource
efficiency, use of sustainable materials, placemaking and
biodiversity as these are aspects that are key to creating a
long-term sustainable business and value to our
stakeholders. See pages 28 to 55 of the Strategic Report
for an overview of the sustainability practices of the Group.
Effective risk management systems are also imperative to
understanding the likely long-term consequences of
actions. The Board plays a key role in reviewing the
Company’s approach to risk, including an assessment of its
emerging and principal risks. See pages 66 to 77 of the
Strategic Report for a description of the identified risks,
procedures for identifying risks and an explanation of how
these are being controlled or mitigated.
At least annually, the Board conducts an assessment of the
prospects of the Company, taking into consideration the
Company’s current position and principal risks. This year
the Directors selected a three year timeframe over which
to assess the viability of the Company. The Viability
Statement can be found on page 78 of the Strategic
Report.
Maintaining a reputation for high standards of business
conduct (Section 172(1)(e))
The Company has in place a Code of Conduct which acts
as a guide for employees to doing the right thing in
business, focusing on the values and behaviours deemed
most important for the Group and seeking to guide
employees in their good judgement to act in the Redrow
way. The Company also has well-embedded policies in
place which assist with ensuring high standards of conduct,
including in respect of the following key areas: Health,
Safety and Environment; Whistleblowing; Anti-Bribery and
Corruption; Human Rights; and Modern Slavery. The
Environmental, Social and Governance Disclosures section
S E C TI O N 17 2 (1 ) D UT Y I N AC TI O N
Decision
Non-stakeholder considerations
Development of the new Equality, Diversity and
Inclusion (“ED&I”) agenda, which saw the introduction of
the new Equality, Diversity and Inclusion policy (“ED&I
Policy”) and programme of initiatives to communicate
and drive forward the agenda.
Context
During the year, the Board focused on the importance of
ED&I to the business and set to move forward the ED&I
agenda. This involved releasing the new ED&I Policy
and implementing a programme of key initiatives to
embed this policy and highlight the importance of ED&I
within Redrow, demonstrating the Board’s strong
commitment to continuously promoting ED&I throughout
the business.
Stakeholder considerations
• Employees – will benefit from working in an inclusive
and respectful environment, supported by inclusive
leaders, which will provide people from all types of
backgrounds with the opportunities to develop and
flourish.
• Investors – will benefit from a more productive,
engaged and innovative workforce leading to better
problem solving and decision-making.
• Suppliers – will benefit from the sustained culture of
ED&I as the ED&I Policy applies to preferred supplier
agency workers, contractors and individuals working
for and on behalf of Redrow. The ED&I Policy was
shared with subcontractors, preferred supplier
agencies, consultants and suppliers to ensure that the
principles were also embedded by our third party
partners and provided them with an opportunity to
offer feedback, allowing us to continue to work
together and improve our working relationships.
• Community and environment – will benefit from a
company whose employees truly understand the
value of ED&I through the awareness and training
programme put in place as part of driving forward the
ED&I agenda.
• Government and regulators – compliance with our
duties under the Equality Act 2010 by eliminating
discrimination, harassment and victimisation,
promoting equality of opportunity and fostering good
relations between people from different groups and
going beyond compliance by embedding ED&I into
everything we do.
• Long-term consequences – embedding a culture of
inclusion and equality will have a positive impact on
the long-term success of the Company as it will make
way for a more diverse workforce which will lead to a
more creative and innovative way of thinking and
working.
• Maintenance of high standards of business conduct
– embedding this initiative within the Group’s Policy
and Procedures manuals will ensure that the policy
governing the ED&I agenda remains an active
framework kept under review by the Company.
• Acting fairly between members of the Company
– information relating to this initiative was released to
all members at the same time with the publication of
this Annual Report.
Strategic actions supported by the Board
• Approved the communications programme to raise
awareness of the ED&I Policy throughout the
business.
• Ensured that the ED&I training programme was rolled
out across the business.
• Approved specific diversity targets (focusing on
females and people from BAME backgrounds) within
the Company’s recent recruitment campaign for new
graduate employees.
• Ensured that the ED&I Policy was shared with
subcontractors and third party partners to ensure they
actively supported the Group’s agenda.
Expected outcomes
• Increased diversity at senior management levels as a
result of a more diverse pipeline which will allow for a
variety of different perspectives to be heard at all
levels across the business.
• A high performing business with strong competitive
advantages as a result of a cognitively diverse
workforce being faster at problem solving due to
reduced conformation pressures.
• Embedment of a culture of inclusion and equality
whereby the workforce is supported by inclusive
leaders who actively value difference.
• A more engaged and innovative workforce which
should result in increased creativity and productivity.
Link to Strategy and Culture
• Customers – will benefit from conducting business
with a company which understands and supports the
unique and diverse needs of customers and their
communities, thereby improving the customer
experience.
Valuing People is a vital part of the Company’s strategy
and the initiative demonstrates that ED&I is championed
by leadership and helps to embed a culture that is
inclusive to all, actively values difference and ensures
everyone is treated fairly.
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S TA K E H O LD E R E N GAG E M E NT
Stakeholder Group
Why important to us?
Key Priorities of the Stakeholder Group
Engagement with Stakeholder Group
Impact on Board decisions
INVESTORS
Our shareholders provide funds which aid the
growth of our business and are vital to our
future success.
• Strong financial performance
• Good governance practices
• Transparency and openness
• Adoption of sustainable business practices
THRIVING
COMMUNITIES
EMPLOYEES
Our employees are essential to preserving
long-term value and Valuing People is a
fundamental part of our strategy.
VALUING
PEOPLE
• Development of our people
• Safety and wellbeing of our people
• Good quality employment opportunities
• Transparency and openness
• Diverse and inclusive workforce
• Support in all aspects of life, not just the
work element
• Good work-life balance
• High quality health, safety and
environmental practices
Examples of engagement with our shareholders include:
• formal results presentations immediately following
publication of the interim and final results;
• Dedicated investor related section of the Company
website (providing easy access to RNS
announcements, key financial dates, dividend details,
reports and publications);
• comprehensive consultation exercise carried out with
major shareholders regarding the remuneration policy
renewal;
• meetings held between the Executive Directors and
current and potential significant shareholders;
• meetings held between the Group Finance Director
and Group Communities Director with significant
shareholders to discuss their requirements surrounding
ESG matters;
• due to the limits on attendance at the 2020 AGM
imposed by Government restrictions on public
gatherings, shareholders were able to dial into the
meeting to listen to the proceedings of the meeting
and also were provided with the opportunity to submit
questions to the Board ahead of the meeting.
For further details of engagement with shareholders, see
page 98 of the Corporate Governance Report, under
heading: Shareholder Engagement
Examples of engagement with our employees include:
• designated workforce Non-Executive Director and
bi-annual workforce engagement meetings hosted by
Nicky Dulieu;
• employee communication via the intranet, Engage;
• employee engagement meetings;
• employee working group meetings and communication
spaces;
• annual INsight survey;
• direct email communication channel to the Board;
• promotion of share ownership through employee share
plans;
• Division specific communications, including regular
updates from the Managing Directors and Heads of
Department on news relating to the division and
beyond; and
Examples of the impact of shareholders on the Board’s
decision making include:
• appointment of Richard Akers as Chair-Designate and
an independent Non-Executive Director, to replace
John Tutte as Non-Executive Chairman on 15
September 2021 which will align the Board structure
with the provisions of the UK Corporate Governance
Code 2018;
• payment of an interim dividend of 6p per share on 9
April 2021;
• proposal to pay a final dividend of 18.5p per share on
17 November 2021, subject to shareholder approval at
the 2021 AGM;
• introduction of the ESG Scorecard which provides
transparency to investors of the performance against
key metrics to help drive business performance; and
• if the Remuneration Policy is approved by shareholders
at the 2021 AGM, the application of a lower bonus
opportunity of 125% of salary (within an overall policy
limit of 150% of salary) for the financial year ending
2022, to allow for a phasing of the bonus opportunity
increase.
Examples of the impact of employees on the Board’s
decision making include:
• the introduction of ‘Agile Work Places’, which allows
colleagues to work from wherever they are most
efficient;
• becoming accredited with the Living Wage Foundation
by ensuring that the pay of every Redrow employee is
aligned with the real living hourly wage, which takes
into consideration the cost of living as outlined by the
Foundation, and extending this to the supply chain as a
condition to working with Redrow;
• the introduction of bi-annual workforce engagement
meetings with representatives from each area of the
business and Nicky Dulieu, the designated Non-
Executive Director for workforce engagement, to
obtain their views on a wide range of matters relating
to life at Redrow;
• Company performance communications.
• the development of the Equality, Diversity and
For further details of engagement with employees, see
page 99 of the Corporate Governance Report under
heading: Workforce Engagement
Inclusion (ED&I) agenda, including the launch of the
ED&I Policy and putting in place the initiatives required
to ensure that this inclusive culture is embedded
across the business.
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S TA K E H O LD E R E N GAG E M E NT CO N T I N U E D
Stakeholder Group
Why important to us?
Key Priorities of the Stakeholder Group
Engagement with Stakeholder Group
Impact on Board decisions
SUPPLIERS
Having strong relationships with our suppliers
is important to our long-term success and the
Board is briefed on supplier feedback and
issues on a regular basis.
BUILDING
RESPONSIBLY
• Assistance with training and development
Examples of engagement with our suppliers include:
opportunities
• Assistance with addressing the industry
skills shortage
• Timely payment practices
• Creation of jobs for our subcontractors
• Safety and wellbeing of our people
• Compliance with laws and regulations
• High quality health, safety and
environmental practices
• participation in workshops, delivered through our
partnership with the Supply Chain Sustainability
School, to engage with our suppliers on a number of
matters;
• collaboration with subcontractors on health and safety
matters and ensuring that our values on customer
service, quality, safety and sustainability are in
alignment;
• working with our supply chain to attract new entrants
into the industry and actively supporting our
subcontractors to train their recruits to agreed
standards, including inviting them to workshops and
briefings;
• engagement by way of a supply chain mapping system
enabling us to work with supply partners to identify and
avoid high risk products;
• working with our supply chain to find ways to eliminate,
reduce or reuse packing; and
• collaboration with key suppliers to collate their Scope 1
and Scope 2 energy and carbon data allowing the
creation of a bespoke online tool to assist with the
calculation of greenhouse gas emissions from our
supply chain that are applicable to us.
CUSTOMERS
BUILDING
RESPONSIBLY
'Putting our customers first' is a key principle
underpinning our strategic theme of Building
Responsibly. The Board believes that the most
meaningful praise it can get is from the people
who buy our homes and live in the
communities we help create.
• Build a quality product and provide a great
Examples of engagement with our customers include:
place to live
• Provide excellent customer service
• Be a considerate constructor and good
neighbour
• Develop places that enhance health and
wellbeing
• face-to-face interactions and interactions via the My
Redrow platform;
• interaction via social media and online reputation
platforms, retaining the utilisation of Crowd Control HQ
technology and Rep.com which enables over 100
colleagues to respond to verified customers on social
media;
• customer feedback via the NHBC surveys;
• close monitoring of customer complaints and feedback;
• direct engagement regarding the value of the Group’s
wider offering around placemaking and community via
the Customer Experience Suites; and
• reports to the Board from the Customer and Quality
Director and the Group Customer & Marketing Director.
Examples of the impact of suppliers on the Board’s
decision making include:
• the Company partnering with the Supply Chain School
which has granted access to thousands of online
presentations, training modules, guidance documents
and checklists with regular invites to attend workshops
and briefings;
• the identification of waste reduction opportunities
following workshops with suppliers to identify the root
causes of waste;
• retained services of an external specialist to manage
all temporary labour requirements and processes,
including carrying out periodic audits to ensure
temporary agency workers are legally compliant and
there are no instances of modern slavery;
• placing apprentices, who are employed and trained by
the Company, with subcontractors for their
apprenticeship, with around 85% of apprentices going
on to take a position with the subcontractor at the end
of their apprenticeship;
• the signing up of the Company to the Talent Retention
Scheme set up by the Construction Leadership Council
to assist where possible with helping out apprentices
who have lost their jobs; and
• the launch of the Training Hub in Tamworth, in
partnership with the NHBC and Tamworth Borough
Council to help develop the next generation of skilled
tradespeople starting out in-house building.
Examples of the impact of customers on the Board’s
decision making include:
• launch of an extension to the award winning My
Redrow platform with a Homeowner Support area,
enabling customers to submit their warranty issues
online and to access helpful tutorial videos and
content;
• the opening of the new Customer Experience Suites
which use digital platforms to highlight the Group’s
wider offer around placemaking and the community;
• introduction of a new three-stage complaints process
to make the initial complaints and escalation procedure
more efficient and the appointment of a Group
Resolution Manager to oversee this process and the
day-to-day relationship with the forthcoming New
Homes Ombudsman; and
• the holding of the first combined Customer
Conference, which saw 500 colleagues in attendance
along with the Executive Directors, the focus of the
event being around raising our quality standards across
the board.
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S TA K E H O LD E R E N GAG E M E NT CO N T I N U E D
Stakeholder Group
Why important to us?
Key Priorities of the Stakeholder Group
Engagement with Stakeholder Group
Impact on Board decisions
COMMUNITY
AND
ENVIRONMENT
‘Nature for people’ is a key principle
underpinning our strategic theme of
Developing Thriving Communities and ‘listen
to learn’ is one of our key Redrow 8
placemaking principles.
BUILDING
RESPONSIBLY
• Provide affordable homes
• Mitigate for effects of climate change and
flood risk on our developments
• Protect and enhance biodiversity
• Develop places that enhance health and
wellbeing
• Share value through the communities we
build
• Be a considerate constructor and good
neighbour
• Reduce waste from our construction
activities
• Support with local causes and community
projects
GOVERNMENT
AND
REGULATORS
BUILDING
RESPONSIBLY
Active engagement with governmental bodies
and regulators is important to allow us the
opportunity to have input on matters relating
to our industry where possible and to ensure
we are able to put in place appropriate
measures to ensure compliance with laws and
regulations.
• Compliance with laws and regulations
• Ethical operations and practices
• Address the UK housing shortage
• Provide affordable homes
• Prevent pollution from our construction
activities
• Provide good quality employment
opportunities
Examples of engagement with the communities in which
we operate include:
Examples of the impact of the community and
environment on the Board’s decision making include:
• engagement and consultations with local communities
at an early stage to discuss matters that may inform the
development process, to enable us to design
developments that are sensitive and responsive and
foster a sense of belonging;
• direct communications with local wildlife organisations
which can provide a wealth of knowledge about the
local context and help influence our designs to ensure
the best outcome for nature and the community;
• engaging directly with local schools to ensure that
green spaces and play areas are well planned and
used;
• working with the emerging community as the
development progresses to help foster a sense of
community ownership and belonging through active
involvement of residents; and
• discussions with a variety of organisations local to our
developments, allowing us to understand what is
happening locally and enabling us to provide donations
and sponsorship for local community projects to ensure
that communities continue to thrive.
• introduction of the ESG Scorecard which comprises key
metrics relevant to stakeholders which will help drive
business performance;
• independent assurance obtained to support the
integrity of the ESG scorecard data;
• introduction of a climate-based ESG measure for
determining the annual bonus of the Executive
Directors;
• development of a new climate change Working Group
to develop the Company’s climate change strategy,
including the Redrow Net Zero Carbon Roadmap,
carbon reduction targets and climate-related financial
disclosures;
• appointment of a new Group Communities Director,
responsible for placemaking and the sustainability
framework and ensuring that these functions align with
the Group’s long term objectives, and a new Head of
Sustainability to support ESG performance
improvement;
• retained contractor partnership with the Considerate
Constructors Scheme (CCS); and
• the maintenance of our environmental management
system, which is externally certified to ISO14001.
Examples of engagement mechanisms with Government
and regulators include:
Examples of the impact of Government and regulators on
the Board’s decision making include:
• consultation exercise carried out on a varied audience
regarding the impact of the National Model Design
Code;
• contribution to the Future Homes Delivery Plan, a
sector-wide delivery plan for meeting climate, nature
and the wider environmental targets set by
Government;
• receipt of regular updates on statutory and regulatory
developments following engagement with the
Government and regulators to enable the Board to put
in place structures to align practices with potential
future legislation; and
• regular interaction with regulators and policy makers to
provide key business insights on issues surrounding
housing delivery across the UK.
• participation in a range of consultations affecting our
industry and practices, which during the year included
the following: Planning for the Future; Changes to the
Current Planning Systems; and the National Planning
Policy Framework and the National Model Design Code;
• attendance at meetings and forums to engage with
policy makers relevant to our operations;
• discussions with Government bodies regarding their
new emphasis on the design quality of housing
developments;
• closely working with Government bodies to contribute
to the agenda on the mandatory biodiversity net gain
requirements for new developments and the nutrient
neutrality agenda;
• Government lobbying in relation to matters impacting
the housing market;
• feedback sought from councillors via a third party
survey provider on design and placemaking matters
following the publication of the National Model Design
Code for consultation; and
• engagement with regulatory bodies during industry
sector visits.
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CO R P O R ATE G OV E R N A N C E R E P O RT
“The adaptive infrastructure underpinning our quality
governance arrangements has been essential in keeping
the Company on track to deliver its long-term sustainable
success during the challenging backdrop of the COVID-19
pandemic.”
D E A R S H A R E H O LD E R
I am delighted to introduce the
Corporate Governance Report
outlining the Company’s approach to
corporate governance.
We are reporting against the UK
Corporate Governance Code (2018
version) (the “Code”) for this report,
which was published by the Financial
Reporting Council (“FRC”) and is
available to view at www.frc.org.uk.
This report has been prepared and
approved by the Board and, on
behalf of the Board, I confirm that
during the 2021 financial year, the
G R A H A M
CO P E
Company
Secretary
Company applied the principles of, and was compliant with,
the provisions of the Code other than where stated on
page 95 of this report.
In this report, we provide not only the required regulatory
and statutory assurances, but also seek to provide the
opportunity for a meaningful assessment of the quality of
the Company’s governance arrangements and the
workings of our Board.
Adaptive Governance Structure
Over the years we have been building upon our
governance structures to ensure that there is a strong
infrastructure in place which not only aids the delivery of
the long-term success of the Company but which is also
adaptive to meet any unexpected demands on the
Company. During the COVID-19 pandemic, we have been
able to adapt our governance structures to meet the needs
of the business and the Board is pleased that they worked
well under the challenging backdrop encountered.
Like the business, the Board quickly adapted the way we
worked and, until June 2021, all meetings held during the
2021 financial year were held entirely virtually. The Board
and Committee meetings held in June 2021 were held
in-person for the first time since March 2020 and in-person
Board site visits recommenced, with social distancing
maintained.
The AGM held in November 2020 was also held with a
minimum quorum of shareholders due to the limits on
attendance imposed by restrictions on public gatherings
and guidance on social distancing. Given that the AGM is a
key event in which the Board is able to engage directly
with shareholders, the Board allowed shareholders to dial
into the meeting to listen to the proceedings of the AGM
remotely and also provided the opportunity for
shareholders to submit questions to the Board ahead of the
meeting.
Board Composition
Since the last report, John Tutte stepped back to a
Non-Executive Chairman role following the 2020 AGM on
6 November 2020 and shall be retiring from the Board
following the announcement of the Company’s 2021 full
year results on 15 September 2021. Richard Akers joined
the Board as Chair-Designate and independent Non-
Executive Director on 1 June 2021. Richard has been
working closely with John Tutte during a handover period
and he will assume the role of Non-Executive Chairman
following the retirement of John Tutte on 15 September
2021. Details of the recruitment process can be found on
page 119 of the Nomination Committee Report.
Board Effectiveness
This report also discusses how the Board monitors its
effectiveness in order to ensure that it has the strength and
capability to lead the Company to continued success. In
2019, an externally facilitated evaluation of the Board and
each of its Committees was carried out by Independent
Audit. This year, a formal internal evaluation of the Board
and Committees was undertaken to build upon the
progress made in previous years. Having considered the
output of this year’s evaluation, the Board considers that it
continues to function effectively and its relationships with
its Committees continue to be sound. Details of the
evaluation can be found on page 104.
Workforce Engagement and Culture
The Board plays a key role in setting and monitoring the
Group’s purpose, strategy and values and ensuring that
these are aligned with culture. The Board were mindful of
the need to maintain the culture of Redrow during the
pandemic and due to the adaptive structures in place
across the business and increased engagement with our
colleagues, the Redrow culture appears to be stronger
than ever.
With effect from 6 November 2020, Nicky Dulieu took over
the role of designated Non-Executive Director for
workforce engagement from Vanda Murray following her
retirement from the Board. During the year, Nicky Dulieu
hosted a virtual meeting with representatives from each
area of the business to obtain employee views on a wide
range of matters relating to life at Redrow. There was a
high level of participation and debate throughout the
meeting and an action plan was presented to the Board by
Nicky Dulieu following the session. Further details of this
workforce engagement session, along with other
engagement mechanisms, can be found on page 99.
2021 Annual General Meeting
Our 2021 Annual General Meeting will be held on Friday, 12
November 2021 and the Notice of Annual General Meeting
together with Explanatory Notes will be sent to you
separately.
G R A H A M CO P E
Company Secretary
14 September 2021
Image: The Richmond house type at Knights Keep, Burton-on-Trent, Derbyshire
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BOA R D O F D I R EC TO RS
4 G R A H A M CO P E (57 )
Company Secretary
5 N I C K H E W S O N (6 3)
Senior Independent Director
6 S I R M I C H A E L LYO N S ( 7 1 )
Non-Executive Director
M
M A N R P
M A N R P
Graham Cope joined Redrow as Head of
Legal in November 2002 and was
appointed Company Secretary two months
later. He is Company Secretary to the Main
Board and Secretary to all Committees.
Graham Cope has almost 30 years’
experience in the housebuilding sector,
either working in-house or for house
builder clients in private practice. He
qualified as a solicitor in 1989 and is a
member of the Law Society.
He is responsible for the governance
structures and mechanisms, corporate
conduct and is the primary source of advice
on the conduct of the business. Graham
Cope is also a member of the Executive
Management Team.
Nick Hewson joined the Redrow Board in
December 2012. His business career to
date has been spent mainly in the property
industry, from commercial to residential. He
became the Senior Independent Director of
the Company on 7 November 2018.
Nick Hewson is the Non-Executive
Chairman of Supermarket Income REIT plc
and a Non-Executive Director of Croma
Security Solutions Group plc.
He is a Fellow of the Institute of Chartered
Accountants in England and Wales and has
a degree in Law from Cambridge University.
1
4
7
2
8
3
6
5
1 J O H N TUT TE (6 5)
Non-Executive Chairman
2 M AT TH E W P R AT T (4 6)
Group Chief Executive
3 B A R B A R A R I C H M O N D (61 )
Group Finance Director
7 N I C K Y D U LI E U (57 )
Non-Executive Director
8 R I C H A R D A K E R S (6 0)
Non-Executive Director
M
M
P
M
M A N R
M N R
John Tutte joined the Board of Redrow in
July 2002. In September 2009 he was
promoted to Group Managing Director and
in July 2014 became Group Chief Executive.
In April 2019, John was appointed as
Executive Chairman following the
retirement of Steve Morgan. John stepped
back to a Non-Executive Chairman role
following the 2020 AGM on 6 November
2020 and shall be retiring from the Board
following the announcement of the
Company’s 2021 full year results on 15
September 2021.
John Tutte qualified in civil engineering and
has amassed more than 40 years’
experience within the industry, having
previously held the position of Chief
Executive of Wilson Connolly plc.
John Tutte was appointed to the board of
the Home Builders Federation in February
2015. He stepped down as Chairman of the
Home Building Skills Partnership in March
2020 to coincide with the Partnership
being incorporated into the wider Home
Builders Federation organisation.
Matthew Pratt joined the Board of Redrow in
April 2019 as Chief Operating Officer and
was promoted to Group Chief Executive with
effect from 1 July 2020. He joined Redrow in
2003 as a Chief Quantity Surveyor and later
became Managing Director of the Midlands
Division. In 2013, Matthew Pratt was
appointed as a Regional Chief Executive and
became a member of the Executive
Management Team.
Matthew Pratt trained as a quantity surveyor
and graduated with a degree in Construction
from Nottingham Trent University. He has 24
years’ experience within the industry.
He is responsible for the operational
management of the Group and the
implementation of strategic plans and
reports to the Board on this. Matthew Pratt is
also a member of the Executive Management
Team.
Barbara Richmond joined the Board of
Redrow in January 2010, bringing with her a
proven track record, with over 25 years’
experience as Group Finance Director at a
number of UK listed companies including
Inchcape plc, Croda International plc and
Whessoe plc. She is also a member of the
Executive Management Team.
She has a strong background in both
manufacturing and retail, as well as having
completed a number of major acquisitions
and disposals throughout her career.
Barbara Richmond was appointed a
Non-Executive Director of Lonza Group Ltd
with effect from 16 April 2014.
She is a Fellow of the Institute of Chartered
Accountants in England and Wales and a
graduate of the University of Manchester.
Nicky Dulieu joined the Redrow Board in
November 2019. She has strong Non-
Executive Director experience and has
extensive knowledge of retailing and
customer service.
Nicky Dulieu is currently a Non-Executive
Director and the Chair of the Remuneration
Committees of Adnams plc and Marshall
Motor Holdings plc. She is also a Non-
Executive Director and Chair of the Audit
Committee of WH Smith plc and a
Commercial Board member of the Royal
Horticultural Society.
She is a Fellow member of the Association
of Chartered Certified Accountants having
trained as an accountant with Marks &
Spencer Group plc and held various
strategic and financial roles within the
company over a 23 year period. Following
this, Nicky Dulieu was appointed to the
Board of Hobbs Limited and became Chief
Executive from 2008 until 2014.
Richard Akers joined the Redrow Board as
Chair-Designate and independent
Non-Executive Director on 1 June 2021. He
is currently working closely with John Tutte
during a handover period and will
assume the role of Chair following the
announcement of the Company’s 2021 full
year results on 15 September 2021, at which
time John will stand down from the Board.
Richard Akers has a career background in
property and land acquisition, having spent
his entire career in the industry, latterly as a
Main Board Director of Land Securities plc.
Since retiring in 2014 from Land Securities
plc he has held a number of non-executive
roles.
Richard Akers currently holds independent
non-executive roles at Unite Group plc and
Shaftesbury plc where he is Senior
Independent Director, and until recently
having completed nine years, held a role at
Barratt Developments plc, as a Non-
Executive Director, the Senior Independent
Director, Chair of the Remuneration and
Safety, Health & Environment Committees,
and Workforce Engagement Director.
Sir Michael Lyons joined the Redrow Board
in January 2015. In 2014, he chaired the
Lyons Housing Commission to produce a
road map for increasing house building in
the UK.
He is also Chairman of the English Cities
Fund, which undertakes large scale urban
regeneration schemes in a number of
places and is Chairman of SQW Group and
a strategic adviser to CBRE.
Sir Michael Lyons served 17 years as Chief
Executive of three major English Local
Authorities, including 7 years at Birmingham
City Council, and was knighted in 2000 for
services to local government. Following his
long and distinguished career in local
government, Sir Michael Lyons completed a
four year term as Chairman of the BBC and
has held a range of non-executive positions
across the three sectors.
CO M M IT TE E M E M B E R S H I P
M
Main Board
A
N
R
P
Audit Committee
Nomination Committee
Remuneration Committee
Placemaking and Sustainability
Committee
B OA R D E X P E R I E N C E
Finance
Property
Operational
Sustainability
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CO R P O R ATE G OV E R N A N C E R E P O RT CO N T I N U E D
R E D R OW G OV E R N A N C E S TR U C TU R E
Main Board
N
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NON -EXECUTIVE CHAIRMAN
GROUP CHIEF EXECUTIVE AND
GROUP FINANCE DIRECTOR
NON -EXECUTIVE DIRECTORS
(INCLUDING SENIOR INDEPENDENT DIRECTOR)
Responsible for leading the Board and
Responsible for day-to-day operation
Responsible for providing constructive
ensuring its effectiveness with a key
of the business and performance of
challenge and helping to develop
focus of the strategic development of
the Company.
proposals on strategy.
the business.
Board Committees
AUDIT
NOMINATION
Provides independent scrutiny of the Company’s financial
Identifies and makes recommendations concerning the
and non-financial performance, risks and audit functions.
composition of the Board and that of its Committees.
PLACEMAKING AND SUSTAINABILITY
REMUNERATION
Promotes high environmental and placemaking standards in
Aims to attract and retain good management and to
line with our three key principles: Developing Thriving
incentivise them to create shareholder value.
Communities, Building Responsibly and Valuing People.
Executive Management Team
GROUP CHIEF EXECUTIVE
Responsible for the operational management of the Group, the implementing of strategic plans and reporting to the
Board on these matters.
GROUP FINANCE DIRECTOR
COMPANY SECRETARY
Responsible for the financial management of the Group in its
Responsible for governance structures and mechanisms,
broadest sense and maintaining effective communications
corporate conduct and is the primary source of advice on the
with shareholders.
conduct of the business.
REGIONAL CHIEF EXECUTIVES
GROUP COMMUNITIES DIRECTOR 1
Responsible for the operational management of the Divisions
Responsible for placemaking and the Sustainability
and reporting to the Board on this.
Framework and ensuring that these functions align with the
Group’s long term objectives and targets.
GROUP HR DIRECTOR
GROUP CUSTOMER & MARKETING DIRECTOR
Responsible for implementing the strategy on people,
Responsible for the overall customer experience, including
ensuring that the management of talent and culture is aligned
marketing and sales strategy, and developing the Group’s
with the Group’s longer-term goals.
reputation via strategic communications and customer service.
DIVISIONS
GROUP
Build | Commercial | Customer Services
Finance | Land | Sales | Technical
Commercial | Finance | HS&E | HR | IT
Legal | Marketing | Technical | Sustainability
Our Homes Divisions are comprised of the above departments
The above departments support the Divisions to contribute
which work together to deliver the Group’s strategy.
to the successful operation of the business.
1 The Group Communities Director was appointed as a member of the Executive Management Team on 1 July 2021.
I NTR O D U C TI O N
This report sets out the Company’s compliance with the Code issued by the FRC and describes how the governance
framework is applied by the Company.
G OV E R N A N C E S TR U C TU R E
Governance is a key priority of the Board and the governance structure is set out in the diagram opposite. Each
component within the structure is governed by a particular set of rules, whether it is the Redrow employee handbook,
the Code of Conduct, the policies and procedures manuals, Articles of Association and/or the Committee terms of
reference. Each of these are regularly reviewed and are updated in line with best practice and legislative or regulatory
changes.
CO M P LI A N C E W ITH TH E U K CO R P O R ATE G OV E R N A N C E CO D E
The Directors have considered the contents and requirements of the Code and confirm that throughout the 52 weeks
ended 27 June 2021 the Company has been compliant with the provisions of the Code, as explained further in this
report, other than as set out in the table below.
Provision
Reason for non-compliance
Explanation
9 – The Chair should be
independent on
appointment. A Chief
Executive should not
become chair of the
same company.
John Tutte, previously
the Chief Executive,
succeeded Steve Morgan
as Chairman on 1 April
2019 and therefore did
not meet the
independence criteria set
out in Provision 10 of the
Code on appointment.
The succession plan for Steve Morgan, being the founder
and previous Chairman of the Company, was considered
extensively by the Nomination Committee.
John Tutte has a wealth of experience and knowledge of the
Company and the Board believed that circumstances
necessitated continuity and that this appointment was
therefore, at the time, in the best interests of the Company.
Moreover, following Steve Morgan’s retirement, the
appointment of John Tutte allowed for an eventual transition
to a more conventional board structure.
The Board consulted with major shareholders in respect of
this composition and set out its reasons to all shareholders
via RNS announcement and also by way of publication on the
Company website.
John Tutte stepped back to a Non-Executive Chairman role
at the AGM in November 2020 and will retire from the Board
on 15 September 2021. Following John’s retirement, Richard
Akers, currently Chair-Designate and an independent
Non-Executive Director, shall be appointed as Non-Executive
Chairman and shall be independent upon appointment.
See page 119 for a more detailed explanation of the
appointment.
19 – The Chair should not
remain in post beyond
nine years from the date
of their first appointment
to the Board. This period
may be extended for a
limited time however a
clear explanation must
be given.
John Tutte was first
appointed to the Board
on 10 July 2002 and
become Chairman on 1
April 2019.
The appointment of John Tutte as Chairman was intended to
be on an interim basis to allow for a smooth transition
following the departure of Steve Morgan in March 2019 and
to allow for an eventual transition to a more conventional
board structure.
John Tutte will retire from the Board on 15 September 2021
and shall be replaced by Richard Akers, currently Chair-
Designate and an independent Non-Executive Director.
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CO R P O R ATE G OV E R N A N C E R E P O RT CO N T I N U E D
1 . B OA R D LE A D E R S H I P A N D CO M PA N Y
• changes to the size, structure and composition of the
PU R P O S E
Board;
R O LE O F TH E B OA R D
The Board sets the Group’s strategy and oversees and
monitors risk management, principal risks, internal controls
and the viability of the Company. The Board is responsible
for putting in place the strategic plans for the Group and
providing the leadership required in order to achieve its
vision and goals.
There are matters which the Board delegates to
Committees, the Executive Management Team and other
relevant management bodies in order to ensure that the
Group is operating efficiently and effectively.
In order to ensure that the members of the Board fulfil their
statutory duties as Directors, there is a formal schedule of
matters reserved specifically for the Board’s decisions. The
matters reserved include:
• approval of any significant changes in accounting
policies or practices;
• any changes relating to capital structure and approval of
treasury policies;
• ensuring the maintenance of a sound system of
governance, internal control and risk management;
• authorising conflicts of interest where permitted by the
Company’s Articles of Association;
• assessing the prospects and viability of the Group,
including measurement of key performance indicators;
• assessing and monitoring culture in alignment with
purpose, values and strategy;
• approval of corporate acquisitions or disposals,
significant land purchases or contracts;
• approval of significant policies, including the Group’s
Health, Safety and Environmental policy;
• reviewing of overall corporate governance
arrangements;
• monitoring the whistleblowing programme and reviewing
concerns raised through the whistleblowing procedure;
• ensuring a satisfactory dialogue with key stakeholders;
and
• appointment and removal of the Company Secretary.
Long-term performance and shareholder value relies on
high quality corporate governance and the Board is
responsible for maintaining strong governance practices
and regularly reviewing the Group’s governance structure
as illustrated on page 94.
B OA R D M E E TI N G S
The Board meets regularly and frequently, not less than six
times during the year and maintains a close dialogue
between meetings. During the year Board meetings have
been predominantly held virtually in compliance with the
restrictions put in place during the COVID-19 pandemic. In
June 2021, socially distanced in-person Board meetings
and site visits, accompanied by the local management
team, resumed.
Board packs are distributed sufficiently in advance of the
meetings to allow adequate time for review to enable
informed debate and challenge at meetings and include
key strategic, operational and financial information.
Where a Director is unable to attend a meeting, they are
encouraged to discuss any issues arising with the Non-
Executive Chairman or Group Chief Executive as
TA B LE O F AT TE N DA N C E
Name
John Tutte
Matthew Pratt
Barbara Richmond
Nick Hewson
Sir Michael Lyons
Nicky Dulieu
Vanda Murray 1
Richard Akers 2
Role
Attendance at Meetings
Non-Executive Chairman
Group Chief Executive
Group Finance Director
Senior Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
8/8
8/8
8/8
8/8
8/8
8/8
1/1
1/1
1
2
Vanda Murray stepped down from the Board on 6 November 2020 and attended the meeting held between the beginning of the 2021
financial year to her retirement date.
Richard Akers was appointed as Non-Executive Director on 1 June 2021 and attended the meeting held between his appointment date
to the end of the 2021 financial year.
appropriate. If a Director has a concern about the running
of the business, the minutes should accurately reflect this.
Should any Director resign from their position as a result of
unresolved concerns in the Company, they are requested
to submit a written statement to the Non-Executive
Chairman outlining their concerns for circulation to the
Board. There were no statements received of this nature
during the year.
Attendance by individual Directors at Board meetings is set
out opposite.
P R O F E S S I O N A L D E V E LO P M E NT
The Company Secretary and Non-Executive Chairman
regularly review the developmental needs of the Board,
both as a whole and for individual directors, to ensure that
each Director is effective in adding to Board discussion,
debate and decision-making and to allow them to continue
to fulfil their role effectively on the Committees.
The Board receives regular briefings from those
responsible for key Group disciplines. In addition, the
Board maintains close working relationships with the
Executive Management Team and the divisional
management teams.
All new Directors must undertake a formal and
comprehensive induction programme which is coordinated
by the Company Secretary and the Non-Executive
Chairman. The programme for the Non-Executive Directors
is specifically designed to encompass the full breadth of
the business and includes visits to operating businesses.
The programme is tailored accordingly to:
• provide an understanding of their role within the
Company and the key priority areas for the Board;
• build an understanding of how the Board operates within
the structure of the Group;
• introduce key Group personnel and external advisors;
• enhance their knowledge of the Group’s strategy, culture
and business;
• provide an understanding of the financial position of the
Company; and
• if applicable, prepare the Director for Committee
memberships by additionally providing induction material
relevant to the specific committee.
the Group’s performance. The Board also sets appropriate
targets against each indicator and ensures timely and
accurate measurements against each identified
performance indicator. See page 5 for further details of the
key performance indicators of the Group.
The ultimate responsibility for the effective management of
the risks faced by the Group in order to achieve its
strategic and financial objectives lies with the Board. It is
vital to the long-term sustainability of the Group that strong
risk management mechanisms are in place. The Board
carry out a robust assessment of the principal risks facing
the Company, including those that would threaten its
business mode, future performance, solvency or liquidity.
Details of the Group’s risk management processes,
including the Board’s robust assessment of the Group’s
emerging and principal risks, key controls and mitigating
strategies can be found on pages 66 to 77.
S TR ATE GY, PU R P O S E , VA LU E S A N D
C U LTU R E
Setting and monitoring the Group’s purpose, values and
strategy and ensuring that these are aligned with culture is
a key role of the Board.
Engagement with stakeholders, and understanding the key
matters which are of priority to them, has formed the basis
of the Group’s business strategy and purpose and can be
seen in the three themes of Developing Thriving
Communities, Building Responsibly and Valuing People.
Our purpose, to operate to create a better way for people
to live, is supported by our strategy of creating long-term
sustainable value for all of our stakeholders by developing
thriving communities with high quality homes that provide a
better way to live. The messaging regarding the Group’s
purpose and strategy is consistent, clear and at the
forefront of everything we do.
The Redrow culture is the unconscious landscape through
which our people think, behave and act, regardless of
whether they are working in the boardroom, Division,
Group or on site. Our culture is embedded through our
values of: hard work; attention to detail; innovation;
passion; and the pursuit of excellence. We expect our
people to apply these values in their daily working life.
There are a number of measures adopted by the Board to
assist with monitoring, assessing and embedding culture:
During the year, formal appraisals of the Group Chief
Executive and the Group Finance Director were undertaken
by the Non-Executive Chairman. The Non-Executive
Chairman and all Non-Executive Directors had an annual
appraisal conducted by the Senior Independent Director.
1.
The Board monitors the opinions of employees via the
annual INsight survey to assist with measuring how far
Redrow values are incorporated into the culture and
evaluates the level of consistency in employees’ views
of culture.
K P I A S S E S S M E NT A N D R I S K M A N AG E M E NT
The Board have the overall responsibility for setting the
key performance indicators and selecting the appropriate
form of measurement to allow an objective assessment of
2.
Consistent language is used in communications with
our colleagues via our intranet, Engage, which seeks
to embed cultural norms by reinforcing the strategy
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3.
4.
5.
6.
and values and reiterating the behaviours and actions
which are to be encouraged.
Policies are regularly reviewed and updated to ensure
that they are in alignment with the Company’s purpose,
values and strategy.
Our colleagues have access to the new Brand Portal
which reinforces what Redrow stands for and provides
a single source of brand related assets to ensure brand
consistency.
Site and Divisional visits are carried out by the Board,
which allows them to engage directly with the
workforce and obtain their views on culture within the
business.
Workforce engagement sessions carried out with
Nicky Dulieu, as designated Non-Executive Director
for workforce engagement, play an important role in
obtaining views of employees and reporting back to
the Board on key issues for the workforce.
The Board is proud to have a business that is customer
focused with employees taking pride in creating a better
way to live through their contribution to providing a high
quality product and service to our customers.
W H I S TLE B LOW I N G
The Group has a widely publicised Whistleblowing Policy
which enables employees and other stakeholders to raise
concerns in confidence. The Board receives reports on all
occasions when such issues are raised under this policy
and ensures that appropriate follow-up action is
undertaken.
The Whistleblowing Policy allows concerns to be raised
anonymously and includes a non-retaliation policy whereby
all concerns raised in good faith will be protected, as will
those against whom claims are made which turn out to be
unfounded. The Company provides a safeguarding
assurance for anyone raising concerns in good faith that
they will be protected regardless of the outcome of the
investigation and any reporting of retaliation shall be
treated in the same way as a whistleblowing allegation and
disciplinary action taken if necessary.
Employees are reminded of the types of unethical or
unlawful behaviours which may prompt a report to be made
under the procedure and there are a series of reporting
channels within the policy to ensure that people are
comfortable raising their concerns at some level within or
outside of the Company. The policy contains the contact
details of the Company Secretary and Senior Independent
Director and additionally includes an independent
reporting hotline where independent and confidential
advice can be provided on whistleblowing matters.
Investigations are undertaken as quickly as possible
without affecting their quality and depth. For any non-
anonymised concern, receipt of the concern is
acknowledged and the reporting person is provided with
an indication of how the Company is proposing to deal with
the matter. The person raising the concern shall be
provided with feedback relating to the investigation,
provided that it would not breach the confidentiality of
others within the Company.
The Company Secretary maintains a record of the number
of whistleblowing reports received, along with details of
the investigations undertaken, and reports to the Board on
this. During the year, there were no alleged or suspected
wrongdoings reported through the whistleblowing
procedure.
The Whistleblowing Policy is formally reviewed and
approved each year by the Board. During the year, there
were no changes made to the policy.
CO N F LI C T S O F I NTE R E S T
Transparency in our business dealings is paramount and
the Board is ultimately responsible for ensuring that there
are procedures in place to ensure that conflicts of
interests, or potential conflicts of interests, are managed
effectively.
In line with the Group’s Code of Conduct, employees must
immediately inform their line manager if there is any
possibility of there being an actual or potential conflict of
interest. If conflicts can be mitigated, authorisation by way
of a Divisional board meeting must be obtained and the
Company Secretary must be informed.
Directors must disclose any actual or potential conflicts of
interest immediately to the Company Secretary and seek
formal approval from the Board.
The Board is satisfied that the procedures in place to deal
with conflicts of interest are sufficient and were operated
effectively during the year.
S H A R E H O LD E R E N G AG E M E NT
Shareholder engagement is paramount to the Board and
the Directors make themselves available to meet with
significant shareholders to understand the issues that are
of most importance to them. Following any shareholder
meeting, the Board is subsequently briefed on any issues
discussed therein.
The Board undertakes formal presentations to equity
analysts immediately following the announcement of the
Company’s financial results half-yearly. These
presentations are available on the Company’s website.
During the 2021 financial year, the presentations were held
virtually via webcast. Following the full year and half-yearly
results’ announcement in September 2020 and February
2021, the Executive Directors held virtual meetings with
current and potential significant shareholders and
feedback from these meetings was independently collated
and disseminated to the Board.
In 2020, due to the unprecedented impact of COVID-19,
the Board consulted with significant shareholders
regarding putting forward a rolled-over remuneration
policy at the AGM in November 2020. The policy was
largely on the same terms as the previous one, save for
additional commitments on compliance with good practice
and with the provisions of the Code built in, and was
approved with a 95.03% majority by shareholders.
Now with greater clarity on the market environment, and as
notified to shareholders last year, a revised remuneration
policy is to be put forward for approval at the 2021 AGM. A
comprehensive consultation exercise was carried out
during the year with significant shareholders of the
Company regarding the components of the new policy.
Nicky Dulieu, as Chair of the Remuneration Committee, led
the consultation exercise which provided shareholders with
the following:
• an overview of the growth of the business and the impact
of COVID-19 on our stakeholders;
• the objectives of the proposed revised remuneration
policy;
• the changes proposed to the remuneration policy; and
• an explanation of how that policy would be implemented.
Shareholders were invited to provide feedback on the
proposals and following the consultation exercise an
update was provided to the Remuneration Committee. The
proposed remuneration policy was then finalised, taking
into consideration the feedback received from
shareholders. We recognise the importance of our
shareholders as key stakeholders in our discussions,
particularly around remuneration, and we welcomed the
feedback received through the remuneration consultation
exercise.
During the year, the Group Finance Director and Group
Communities Director held meetings with significant
shareholders to discuss their requirements surrounding
Environmental, Social and Governance (“ESG”) matters, the
feedback of which shall be used to form the changes being
made by the Company as part of the wider ESG
improvement project.
The AGM held in November 2020 was held with a minimum
quorum of shareholders due to the limits on attendance
imposed by restrictions on public gatherings and guidance
on social distancing. Given that the AGM is a key event in
which the Board is able to engage directly with
shareholders, the Board allowed shareholders to dial into
the meeting to listen to the proceedings of the AGM
remotely and also provided the opportunity for
shareholders to submit questions to the Board ahead of the
meeting.
2.
Formal notification of the 2021 Annual General Meeting will
be sent to shareholders at least 21 working days in
advance.
There is a dedicated investor related section of the
Company website, providing easy access to RNS
announcements, key financial dates, dividend details,
reports and publications. The Company’s website,
redrowplc.co.uk, gives access to current financial and
corporate information.
WO R K F O R C E E N G AG E M E NT
The Board believes that greater engagement with the
workforce is essential to preserving long-term value.
Valuing People is a fundamental part of the Group’s
strategy and understanding the views of employees and
actively encouraging their participation sits highly on the
Board’s agenda. The Company engages with employees
through the following means:
1.
Designated workforce Non-Executive Director – in
line with Provision 5 of the Code, Nicky Dulieu was
appointed as the designated Non-Executive Director
for workforce engagement, having succeeded Vanda
Murray in this position following her retirement from
the Board on 6 November 2020. In May 2021, Nicky
Dulieu hosed a virtual employee engagement session
with representatives from each area of the business.
The group was wide-ranging with representatives from
Build, Sales, Commercial, Technical, Land and other
support functions. There was also a good mix of
employees of different ages and at different stages of
their career to allow for a broad spectrum of voices to
be heard.
The session provided the opportunity for Nicky Dulieu
to engage directly with the workforce to obtain their
views on a wide range of matters relating to life at
Redrow. There was a good level of discussion and
debate throughout the session and Nicky Dulieu was
able to obtain a clear understanding of the most
important issues facing employees. The Group HR
Director was also available during the session and was
able to share with the group which issues were under
active consideration by the Board. An action plan was
put together following the session and was presented
to the Board by Nicky Dulieu. It was agreed that these
engagement sessions will be run at least bi-annually
with feedback going back to the employee
representatives in between each session.
Employee communication via the intranet, Engage
– Engage is available for all employees of the
Company and is the hub for sharing news and
communications across the business. It encourages
employees to actively participate and have a voice in
decisions being made by the Company. This proved to
be a vital communications tool during the COVID-19
pandemic as it allowed information to be shared
instantly with all employees so that we were able to
keep each person in the loop and up to date with
actions being taken by the business.
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3.
4.
5.
6.
7.
Employee engagement meetings – each divisional
business and Group has a team of elected
representatives who attend regular engagement
meetings. These meetings keep employees up to date
with Company news and employee health and
wellbeing initiatives and enable the representatives to
put forward the views and ideas of the department.
Each employee has access to their engagement
representative and has the opportunity to discuss
matters arising from these meetings. All meeting
materials and action plans following meetings are
made available to all employees via Engage.
INsight survey – this survey is distributed annually to
all employees and in the latest survey there was a 81%
participation rate. The feedback from employees was
anonymised. Following the results, workshops were
carried out with each team to discuss the findings and
feedback was collated by the Engagement team.
Resulting from the feedback, commitments and themes
for the year were posted on Engage with regular
progress reports posted on these.
Promotion of share ownership through employee
share plans – the Company supports employee share
ownership at all levels as it directly aligns employee
interests with those of shareholders. Share ownership
encourages employees to take a wider view of the
Group. Thinking like a shareholder, as well as an
employee, encourages the workforce to be more
inquisitive as to whether they can individually and
collectively improve to create even more shareholder
value.
Division specific communications – the Divisions are
encouraged to make their employees aware of the
financial and economic factors affecting their
respective Divisions and the Company as a whole.
Each Division has a dedicated section on the intranet
which is regularly updated to reflect matters directly
affecting that part of the business. Following feedback
from the workforce engagement session with Nicky
Dulieu regarding the value of regular updates from
senior management, at least quarterly, Managing
Directors and Heads of Departments provide an
overview of news within the related Division and
beyond.
Company performance communications – the
Company’s intranet, Engage, is also used as a tool for
communicating factors affecting the performance of
the Company to employees to ensure that they
understand how the business is performing in the
current market. Additionally, the Group Chief Executive
circulates the results announcements and trading
updates to all employees. Following the release of the
interim and final results announcements, the Group
Finance Director attends the Head Office and
Divisional offices to make a presentation directly to
employees to explain the results and strategy for the year.
S TA K E H O LD E R E N G AG E M E NT
An explanation of the engagement undertaken during the
year with the key stakeholders of the Group, including the
impact of the engagement on Board decisions, can be
found on pages 84 to 89 of the Strategic Report.
S E C TI O N 17 2 (1 ) S TATE M E NT
The Section 172(1) Statement of the Group, explaining how
the Directors have carried out their statutory duty within
s.172(1) of the Act, can be found on pages 82 and 83 of the
Strategic Report.
D I R E C TO R S’ A N D O F F I C E R S’ I N S U R A N C E
The Company has directors’ and officers’ insurance in
place which insures Directors against certain liabilities,
including legal costs.
2 . D I V I S I O N O F R E S P O N S I B I LITI E S
TH E B OA R D
The Board currently comprises a Non-Executive Chairman,
two Executive Directors and four independent Non-
Executive Directors, one of which acts as the Senior
Independent Director. Following the retirement of John
Tutte as Non-Executive Chairman on 15 September 2021,
the Board will comprise Richard Akers as the Non-
Executive Chairman, Matthew Pratt and Barbara Richmond
as Executive Directors and Nick Hewson, Sir Michael Lyons
and Nicky Dulieu as independent Non-Executive Directors,
with Nick Hewson also occupying the position of Senior
Independent Director.
Nick Hewson will be stepping down from the Board ahead
of the 2022 AGM and the Nomination Committee is leading
the process of appointing a new Non-Executive Director to
succeed him.
Division of Responsibilities
The Company has separate roles for the Non-Executive
Chairman and Group Chief Executive, ensuring that there is
a clear division of responsibilities at the head of the
Company between the running of the Board and the
operational responsibility for the running of the Company’s
business, as required by the Code.
The division of responsibility and accountability between
the roles is well defined and using such a balanced
approach ensures that no one individual has unfettered
powers of decision.
Non-Executive Chairman
John Tutte, as Non-Executive Chairman, is primarily
responsible for:
• leading the Board to ensure optimum effectiveness;
• encouraging a culture of openness and debate;
• facilitating constructive board relations and effective
contributions from all Non-Executive Directors;
• ensuring that all Directors receive accurate, timely and
clear information;
• taking a leading role in determining the Board’s
composition and structure;
• ensuring that effective communications are maintained
with shareholders; and
• meeting with the Non-Executive Directors without the
presence of the Executive Management Team.
John Tutte stepped back from an Executive Chairman role
to a Non-Executive Chairman role following the 2020 AGM
on 6 November 2020 and shall be retiring from the Board
following the full year results presentation on 15 September
2021. As noted above, Richard Akers, currently appointed
as Chair-Designate and independent Non-Executive
Director, shall replace John as Non-Executive Chairman
with effect from the same date.
In 2019 and 2020, the Board engaged with major
shareholders in respect of Board composition, particularly
regarding the Chairmanship role, and the proposed
succession plans were well-received by the shareholders
consulted.
Group Chief Executive
Matthew Pratt, as Group Chief Executive, is responsible for:
• operational management of the Group;
• implementing strategic plans with the assistance of the
Executive Management Team;
• ensuring that the visions and values of the Company are
properly communicated across the Group; and
• reporting on these to the Board.
In addition to his role on the Main Board, the Group Chief
Executive is also a Member of the Placemaking and
Sustainability Committee.
Group Finance Director
Barbara Richmond, as Group Finance Director, is
responsible for:
• the financial management of the Group in its broadest
sense;
• maintaining effective communications; and
• reporting on these to the Board.
Senior Independent Director
In line with Provision 12 of the Code, Nick Hewson was
appointed as the Senior Independent Director on 7
November 2018.
Nick Hewson has a wealth of experience as a Non-
Executive Director and, having been on the Board since
2012, has a good understanding of the business.
The following additional responsibilities fall within the remit
of the Senior Independent Director:
• acting as a sounding board for the Non-Executive
Chairman and supporting him in ensuring the Board is
effective and that constructive relations are maintained;
• being available to shareholders in order to understand
their issues and concerns in order to relay them to the
Board; and
• leading the evaluation of the performance of the
Non-Executive Chairman and obtaining views from other
Directors.
Non-Executive Directors
The role of the Non-Executive Directors within the
Company is essential in order to view the Group
objectively and provide constructive challenge to the
Executive Directors and scrutinise performance. They have
a good understanding of the business and bring a range of
skills and experience to the discussions in the boardroom,
including offering specialist advice and strategic guidance.
The diversity and skills brought into the Company by the
Non-Executive Directors are crucial to developing the
strategy of the Group.
The Non-Executive Directors play a vital role in occupying
seats on the Board’s Committees and they are positioned
in such way that the Committees benefit from their
expertise and background. The Non-Executive Directors
are also key in appointing and removing Executive
Directors, and ensuring that there are succession plans in
place for senior level roles. The work of the Nomination
Committee, comprising all Non-Executive Directors, can be
seen on page 118.
Company Secretary
The Company Secretary acts as secretary to the Board and
its Committees and his appointment and removal is a
matter for the Board as a whole. He is responsible for
advising the Board on all governance matters. The
Company Secretary is a member of the Executive
Management Team and all Directors have access to his
advice and services. He is responsible for governance
structures and mechanisms, corporate conduct and is the
primary source of advice on the conduct of the business.
In certain circumstances, Board Committees and individual
Directors may wish to take independent professional
advice in connection with their responsibilities and duties,
and, in this regard, the Company will meet the reasonable
costs and expenses incurred and the Company Secretary
will assist in arranging such advice.
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B OA R D B A L A N C E A N D I N D E P E N D E N C E
The Board considers that it is of a size and has a balance of
skills, knowledge and experience that is appropriate for its
business. The Executive Management Team provides the
Board with an appropriate view of the detail of the
business, which, together with the benefit of their
significant collective experience of the UK house building
industry, enables the Board to discharge its duties and
responsibilities effectively. The Non-Executive Directors
bring a wealth of experience and understanding from
outside the Company which enables them to challenge and
help develop proposals on the Company’s strategy.
The details of the Directors’ respective experience are set
out in their biographical profiles on pages 92 to 93.
In considering the independence of each Non-Executive
Director, the Board has taken into consideration the
guidance provided by the Code. The Board considers all
Non-Executive Directors holding office during the year,
save for John Tutte, to be independent in accordance with
Provision 10 of the Code, as they each:
• have not been employed by the Company or Group;
• have no material business relationship with the
Company;
• do not participate in the Company’s employee share
plans or pension scheme;
• have not received additional remuneration beyond the
director’s fee displayed on page 145 of this Annual
Report;
• have no close family ties with any of the Company’s
Directors, Executive Management Team or advisers;
• have no significant links with other Directors through
involvement in other companies;
• do not represent a significant shareholder; and
• have not served on the Board for more than nine years
from the date of their first appointment.
The Board believes that presently the balance of Non-
Executive and Executive Directors is effective and contains
the appropriate mix of skills and experience for the Board
to continue successfully. The composition is compliant with
Provision 11 of the Code as the ratio of Independent
Non-Executive Directors to Executive Directors, excluding
the Chairman, is 4:2 (66.67%). Following the appointment of
Richard Akers as Chairman on 15 September 2021, the
Board composition will remain compliant with this
provision, with the ratio of independent Non-Executive
Directors to Executive Directors, excluding the Chairman,
being 3:2 (60%).
Nick Hewson was appointed to the Board in December
2012 and will have served a 9-year term as Director by
December 2021. Nick Hewson will therefore be stepping
down from the Board ahead of the 2022 AGM and a new
independent Non-Executive Director will be appointed in
his place. Further details of the recruitment process will be
outlined in next year’s Annual Report and as soon as the
appointment has been approved, the Company will release
an announcement to investors containing details of the
appointment.
A P P O I NTM E NT S TO E X TE R N A L B OA R D S
Prior to Executive Directors and Non-Executive Directors
taking on any additional responsibility outside of the
Group, and before making new appointments to the Board,
an assessment is undertaken to determine whether this will
compromise their ability to commit sufficient time to the
Company to properly discharge their responsibilities or
create any potential conflicts.
In making the assessment, the Board considers the
mandates attributable to such positions, in line with the
scoring mechanism used by Institutional Shareholder
Services, to determine whether a person is overboarded.
The Board does not consider that any of its Directors are
overboarded and is satisfied that sufficient time and
energy is devoted to the Company by each Director.
In line with Provision 15 of the Code, the Executive
Directors do not hold more than one significant Non-
Executive Directorship position.
CO M M IT TE E S
The Board is supported by the Audit, Nomination,
Remuneration and Placemaking and Sustainability
Committees and their memberships, roles and activities are
set out in separate reports, which can be found on the
following pages:
Composition of the Board
(excluding Chairman)
Length of Tenure of
Non-Executive Directors
Main Board
by Gender
33%
67%
Non- Executive
Executive
50%
50%
Over three years
One to three years
29%
71%
Male
Female
• Audit Committee Report – pages 108 to 116;
• Nomination Committee Report – pages 117 to 122;
• Placemaking and Sustainability Committee Report –
pages 123 to 127; and
• Remuneration Committee Report – pages 128 to 153.
Each Committee has Terms of Reference, governing their
responsibilities and powers, approved by the Board. The
minutes of the Committee meetings are circulated to the
Board and the Committee Chairmen provide reports to the
Board on the work undertaken by the Committees.
The Audit Committee and the Nomination Committee are
chaired by Nick Hewson, the Remuneration Committee is
chaired by Nicky Dulieu and the Placemaking and
Sustainability Committee is chaired by Sir Michael Lyons.
In addition to the Board, each Committee completed a
performance evaluation during the 2021 financial year. The
evaluation reports were discussed at a meeting of the
Committees and it was concluded that they were
contributing and functioning effectively and were
complying with their Terms of Reference.
3 . CO M P O S ITI O N , S U CC E S S I O N A N D
E VA LUATI O N
N O M I N ATI O N P R AC TI C E S
To assist with the assessment of the Company’s application
of the Code, the following table sets out where key
information relating to the Company’s nomination related
practices can be found within the Annual Report:
Subject
Page reference
Explanation of the
main roles and
responsibilities of the
Nomination
Committee
See page 118 of the Nomination
Committee Report, under
heading Responsibilities and
Terms of Reference
Explanation of the
work undertaken by
the Nomination
Committee
See page 118 of the Nomination
Committee Report, under
heading Main Activities During
the Year
Annual
reappointment of
Directors and
reasons why
reappointment is
recommended
See page 103 of the Corporate
Governance Report, under
heading Appointments and
Re-Elections to the Board
See page 120 of the Nomination
Committee Report, under
heading Annual Re-Election of
the Directors
Tenure of Chairman
External search
consultancy and
connection
disclosure
Annual evaluation of
Board, Committees
and Directors and
action taken following
results of evaluation
See page 95 of the Corporate
Governance Report, under
heading Compliance with the UK
Corporate Governance Code
See page 119 of the Nomination
Committee Report, under
heading Succession Planning
See page 104 of the Corporate
Governance Report, under
heading Board Performance
Evaluation
TH E N O M I N ATI O N CO M M IT TE E
The Nomination Committee is responsible for leading the
process for appointments to the Board and ensuring that
succession plans allow for the development of a diverse
pipeline for the Board and Executive Management Team
positions.
All members of the Nomination Committee are
independent Non-Executive Directors and the Committee
is chaired by Nick Hewson, the Senior Independent
Director.
Further details of the role of the Nomination Committee
and work undertaken throughout the year can be found on
pages 117 to 122.
A P P O I NTM E NT S A N D R E - E LE C TI O N S TO TH E
B OA R D
The appointments of the Non-Executive Directors are
generally made for three-year terms and all Directors are
subject to annual re-election. Following the assessment on
the effectiveness of the Directors, the Nomination
Committee will make recommendations to the Board on
reappointments.
The Nomination Committee has recommended the
reappointment of each of the Executive Directors and
Non-Executive Directors, save for John Tutte who will be
retiring from the Board on 15 September 2021.
The Board is mindful of the principles and provisions of the
Code on election and re-election, including that there
should be a formal, rigorous and transparent procedure for
the appointment of new directors to the Board, and that
annual re-election is subject to continued satisfactory
performance. The Board has decided that all Directors will
be submitting themselves for re-election at the 2021
Annual General Meeting, save for John Tutte who has
informed the Board of his intention to retire from the Board
on 15 September 2021.
The Board has satisfied itself that all Directors who will be
submitting themselves for re-election continue to perform
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CO R P O R ATE G OV E R N A N C E R E P O RT CO N T I N U E D
satisfactorily. Details of appropriate Annual General
Meeting Resolutions will be found in the Notice of Annual
General Meeting which will be sent to shareholders
separately.
B OA R D P E R F O R M A N C E E VA LUATI O N
In line with the Code, each year a formal performance
evaluation of the Board and its Committees is undertaken.
In 2019, an externally facilitated evaluation of the Board
and Committees was carried out by Independent Audit.
This year, a formal internal evaluation of the Board and
Committees was undertaken to build upon the progress
made in previous years. In line with Provision 21 of the
Code, the Board shall be engaging an external evaluator to
facilitate the evaluation of the Board in 2022.
After reviewing the 2020 evaluation report, a questionnaire
was created and tailored, taking into consideration
comments made in the previous year’s assessment as well
as the current market.
The questionnaires were completed by all members of the
Board and each member of the Committees. Members of
the Executive Management Team and key external advisors
were also invited to participate in the relevant
questionnaires. The purpose of widening the participant
pool was to gain a deeper understanding of the perception
of the Board from non-Board members, which was a useful
feedback tool.
Following completion of the questionnaires, an anonymised
effectiveness report was compiled and presented at the
relevant Board and Committee meetings held in June 2021.
Having considered the output of this year’s evaluation, the
Board considers that it continues to function effectively
and its relationship with its Committees continue to be
sound. The main observations from the evaluation were
that:
• the Board works on a basis of trust and openness
whereby each Director is able to speak openly;
• the Board has improved its focus on the consideration of
the big trends which impact the industry, particularly in
terms of customer research, sustainability and
placemaking;
• there was unanimous agreement that the Board was
particularly strong in the focus placed on people as a
critical part of strategy;
• the organisation has a strong focus on compliance and
the Board has good oversight of the Group’s financial
heath, organisational controls and cyber risks;
• the Board has a clear picture of the big risks and
uncertainties and that there is involvement from the
Board at an early stage in the risk management process;
and
• discussions of the Board were well set up with structured
and clear Board papers.
The evaluation also identified the following areas for
improvement, which will continue to be addressed over the
coming year:
• whilst it was acknowledged that the monitoring of culture
is high on the Board’s agenda, it was noted that this
needs to remain a regular review feature as part of the
overall strategy of Valuing People;
• there was agreement that the right people were brought
around the table to allow for meaningful discussions
however it was noted that there was scope for bringing
additional members of the next level senior team, both
from a succession planning perspective and a deeper
dive into key areas; and
• there was scope for Directors spending more informal
time together, although it was acknowledged that this
was due to the restrictions regarding in-person meetings
resulting from the COVID-19 pandemic.
As a result, the Board considers that it continues to operate
effectively with meetings to facilitate and debate decision
making.
2020 Evaluation
Recommendations of
improvement from the
2020 evaluation
Possible scope for a
further session
dedicated specifically
to strategy and
further challenge on
how far we are
progressing towards
our strategic
objectives.
Possible scope for
increasing focus on
developing the next
generation of leaders
to ensure the
leadership team
remain effective.
Action taken during the year
During the year, a full review has
been undertaken to outline the
vision and strategic direction of
the business going forward,
along with analysis on the current
situation, opportunities and
threats. Following this review and
analysis, there has been good
discussion and debate at Board
level regarding the Company’s
strategy for the short, medium
and long term.
There was much discussion
during the year regarding
succession planning and
interventions across the
business, Main Board and
Executive Management Team
succession and disaster scenario
succession planning. This
remains an ongoing area of focus
and the Board now review and
update the Executive
Management Team disaster
scenario succession planning
matrix at least every six months.
D I V E R S IT Y
The principle of boardroom diversity is strongly supported
by the Board. It is the Board’s policy that appointments to
the Board will always be based on merit, so that the Board
has the right individuals in place, and recognises that
diversity is an important consideration as part of the
selection criteria used to assess candidates to achieve a
balanced Board. A more detailed explanation of the
approach to diversity can be found on page 121.
In line with Provision 23 of the Code, the gender split of the
Company can be found on page 121 within the Nomination
Committee Report.
4 . AU D IT, R I S K A N D I NTE R N A L CO NTR O L
AU D IT, R I S K A N D CO NTR O L P R AC TI C E S
To assist with the assessment of the Company’s application
of the Code, the following table sets out where key
information relating to the Company’s audit, risk and
control practices can be found within the Annual Report:
Subject
Page reference
Explanation of the
main roles and
responsibilities of the
Audit Committee
See page 109 of the Audit
Committee Report, under
heading Responsibilities and
Terms of Reference
Explanation of the
work undertaken by
the Audit Committee
See page 111 of the Audit
Committee Report, under
heading Main Activities During
the Year
Risk management
and internal control
systems
See pages 66 to 67 of Strategic
Report, under heading Risk
Management
See pages 66 to 77 of Strategic
Report, under heading Risk
Management
See page 78 of Strategic Report,
under heading Going Concern
and Viability Statement
See page 168 of Governance
Report, under heading Statement
of Directors’ Responsibilities
Robust assessment of
the Company’s
emerging and
principal risks
Adoption of going
concern basis of
accounting and
assessment of
prospects of the
Company
Explanation of the
Directors
responsibility for
preparing the Annual
Report and
assessment forming
the basis for their
conclusion that the
Annual Report is fair,
balanced and
understandable
AU D IT CO M M IT TE E
The Board has established an Audit Committee comprising
three independent Non-Executive Directors. The Non-
Executive Chairman is not a member of the Audit
Committee.
The Board is satisfied that, with the financial backgrounds
of Nick Hewson (being a Fellow of the Institute of
Chartered Accountants in England and Wales) and Nicky
Dulieu (being a Fellow member of the Association of
Chartered Certified Accountants and having held various
strategic and financial roles within a FTSE 250 company
over a 23 year period), there is sufficient recent and
relevant financial experience to ensure that the Committee
is able to function effectively with the appropriate degree
of challenge.
Further details of the role of the Audit Committee and work
undertaken throughout the year can be found on pages
108 to 116.
5 . R E M U N E R ATI O N
R E M U N E R ATI O N P R AC TI C E S
To assist with the assessment of the Company’s application
of the Code, the following table sets out where key
information relating to the Company’s remuneration
practices can be found within the Annual Report:
Subject
Page reference
Non-Executive
Director
remuneration
Remuneration
consultancy
appointment
See page 145 of Directors’
Remuneration Report, under
heading: Single Total Figure
Remuneration Table
See page 152 of Directors’
Remuneration Report, under
heading: Consideration of
Directors’ Remuneration –
Remuneration Committee and
Advisors
Executive Director
remuneration
supporting alignment
with long-term
shareholder interests
In the Remuneration Policy table,
see Operation column of LTIP
component for details of vesting
and holding periods, on page
136.
See also page 147 of Directors’
Remuneration Report, under
heading Shareholding Guidelines
and Share Interests
Discretion to override
formulaic outcomes,
malus and clawback
provisions
See page 131 of Directors’
Remuneration Report under
sub-heading: Risk
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D I R E C TO R S’ E M O LU M E NT S WA I V E R
With effect from 27 March 2020 until 6 November 2020,
John Tutte volunteered to retain a 20% cut in salary whilst
occupying the Chairman role in an Executive capacity. On
6 November 2020, John Tutte stepped back to a Non-
Executive Chairman role and his revised salary for this role
then took effect. See page 144 of the Directors’
Remuneration Report for further details.
G R A H A M CO P E
Company Secretary
14 September 2021
Notice and contract
periods
See page 140 of Directors’
Remuneration Report, under
sub-heading: Service Contracts
Remuneration policy
setting
Pay ratios
Engagement
regarding
remuneration
See page 131 of Directors’
Remuneration Report, under
sub-heading: Remuneration
Strategy
See page 150 of Directors’
Remuneration Report, under
sub-heading: CEO Pay Ratio
See page 138 of Directors’
Remuneration Report, under
sub-heading: Consideration of
Shareholder Views
R E M U N E R ATI O N CO M M IT TE E
The Board has established a Remuneration Committee
comprising all four independent Non-Executive Directors.
In line with Provision 32 of the Code, the Non-Executive
Chairman is not a member of the Remuneration Committee
as he was not independent upon appointment.
Nicky Dulieu is currently the Chair of the Remuneration
Committee, having served on the Committee for over 12
months before taking over this role from her predecessor,
Vanda Murray. Nicky Dulieu has significant remuneration
experience and is currently appointed as the Chair of the
Remuneration Committees of Adnams plc and Marshall
Motor Holdings plc, therefore the Board is satisfied that
she has sufficient remuneration experience to successfully
lead the Remuneration Committee.
The Board has delegated the responsibility to the
Remuneration Committee for determining the remuneration
policy and setting the remuneration for the Non-Executive
Chairman, Executive Directors and members of the
Executive Management Team, taking into consideration the
remuneration of the workforce.
Further details of the role of the Remuneration Committee
and work undertaken throughout the year can be found on
pages 128 to 153.
Image: Hartford Grange, Northwich, Cheshire
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AU D IT CO M M IT TE E R E P O RT
“The Committee focuses on the integrity of the risk
management systems and internal control procedures, as
well as monitoring the effectiveness of the Group’s
financial reporting, by providing independent challenge
and scrutiny.”
I am pleased to present the Audit
Committee Report for the 52 weeks
ended 27 June 2021, which has been
prepared in accordance with the
requirements of the UK Corporate
Governance Code 2018 (the “Code”)
and the Financial Conduct Authority’s
Listing Rules and Disclosure,
Guidance and Transparency Rules
(the “DTRs”).
This report describes how the
Committee has carried out its
responsibilities during the year.
During 2021, the Committee
N I C K
H E W S O N
Chairman of the
Audit Committee
maintained its focus on monitoring the integrity of the
Group’s internal control processes and risk management
framework and the effectiveness of the Group’s financial
reporting by providing independent and objective
challenge.
CO M M IT TE E M E M B E R S H I P
There are three Members of the Committee, each of which
is an independent Non-Executive Director, with myself, the
Senior Independent Director, being Chairman of the
Committee. The other Members of the Committee during
the 2021 financial year were Sir Michael Lyons, Nicky
Dulieu and Vanda Murray. Vanda Murray stepped down as
a Member of the Committee on 6 November 2020 when
she retired from the Board. In line with Provision 24, the
Chairman of the Board is not a Member of the Committee.
Richard Akers was appointed as an independent Non-
Executive Director and Chair-Designate on 1 June 2021
however upon advice from the Nomination Committee, the
decision was taken that Richard would not act as a Member
of the Audit Committee. In adopting the Code in both letter
and spirit, and taking into consideration Provision 24 of the
Code, as Richard Akers would be working closely with
John Tutte during a period of handover of the Non-
Executive Chairman role, it was agreed that it would not be
appropriate for him to act as a Member of the Committee.
As outlined further in the Nomination Committee Report on
page 120, I will have completed a nine-year term as a
Non-Executive Director of the Company by December 2021
and, in line with Provision 10 of the Code, I will not be
seeking re-election at the AGM in 2022.
The Board is satisfied that there is the requisite recent and
relevant financial experience on the Committee (in line with
Provision 24 of the Code) and that there is sufficient
competence in accounting and auditing (in line with DTR
7.1.1A) due to the following:
• I, as Chairman of the Committee, am a Fellow of the
Institute of Chartered Accountants in England and Wales;
• Nicky Dulieu is a Fellow member of the Association of
Chartered Certified Accountants and has held various
strategic and financial roles within a FTSE 250 company
over a 23-year period. She is currently the Chair of the
Audit Committee at WH Smith plc; and
• Sir Michael Lyons has been a Member of the Committee
since his appointment to the Board in January 2015 and
has recent experience of providing independent
challenge of the Company’s financial performance, risk
management and control procedures.
The qualifications, skills and experience of each
Committee Member can be found on pages 92 to 93.
CO M M IT TE E M E E TI N G S
The Company Secretary acts as Secretary to the
Committee and detailed papers and information were
circulated by the Company Secretary sufficiently in
advance of meetings to allow proper consideration of the
matters for discussion.
To enable the Committee to provide robust challenge of
the reports submitted to the Committee, regular attendees
at the meetings during the year included the Group
Finance Director, Finance Director – Group Services (who
has the responsibility for the Company’s internal audit),
Chief Information Officer (who has the responsibility for IT,
including cyber security and systems accounts) and KPMG
LLP as the external auditor.
The Committee met four times during the year and details
of the meeting attendance can be seen in the table below.
A summary of the principal activities of the Committee is
provided below.
TA B LE O F AT TE N DA N C E
Name
Nick Hewson †
Sir Michael Lyons †
Nicky Dulieu †
Vanda Murray 1 †
Role
Chairman
Member
Member
Member
Attendance at Meetings
4/4
4/4
4/4
2/2
1.
Vanda Murray stepped down from the Board on 6 November 2020 and attended both meetings held between the beginning of the 2021
financial year and her retirement date.
† Member considered to be independent. Throughout the 2021 financial year the Committee was made up of 100% independent Members.
The Committee has also had the opportunity to meet
separately with the external auditors and internal audit
function following the final audit and the review of the 52
weeks ended 27 June 2021 financial statements.
• monitoring and reviewing the policy on the engagement
of the external auditors to supply non-audit services,
taking into consideration the impact this may have on
independence;
• ensuring that the internal and external audit functions
remain independent and effective through formal and
transparent review;
• reviewing the Company’s procedures for detecting fraud
and the adequacy of its systems and controls for the
prevention of bribery;
• reviewing the Company’s procedures for data
management and cyber resilience;
• reviewing the Company’s procedures and controls for
the prevention of tax evasion and the facilitation of tax
evasion;
• reviewing the Company’s procedures for raising
concerns; and
• reporting to the Board on how the Committee has
discharged its responsibilities.
The Committee’s Terms of Reference are available on the
Company’s website (redrowplc.co.uk).
R E S P O N S I B I LITI E S A N D TE R M S O F
R E F E R E N C E
The key responsibilities of the Committee are:
• monitoring the timeliness and integrity of the financial
statements and accompanying reports to the
shareholders and Corporate Governance Statements,
including reviewing any significant financial reporting
judgements contained therein and the findings of the
external auditors;
• monitoring and reviewing any formal announcements
relating to the Company’s financial performance;
• reviewing and monitoring the effectiveness of systems
for internal control, financial reporting and risk
management, including the Risk Register, covering all
material controls (including financial, operational and
compliance controls), having regard to the long-term
prospects and viability of the Company;
• making recommendations to the Board in relation to the
appointment and removal of the external auditors and
approving the remuneration and terms of engagement;
• determining the criteria used in order to assess the
quality of the external audit and reporting on any
significant issues considered in relation to the financial
statements;
• reviewing and monitoring the external audit process and
independent activity of the external auditors as well as
the nature and scope of the external audit and its
effectiveness;
• reviewing and monitoring the external auditor’s
independence and objectivity;
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AU D IT CO M M IT TE E R E P O R TI N G O N S I G N I F I C A NT I S S U E S
The primary areas of judgement and estimation uncertainty which were considered and challenged by the Committee
and how these were addressed are set out below:
M A I N AC TI V ITI E S D U R I N G TH E Y E A R
The Committee followed a programme which is structured around the annual reporting cycle and received reports from
internal audit, the external audit and management. The principal activities undertaken were as follows:
Area of Focus
Considerations
September 2020
Valuation of inventory The Committee receives a report prepared by management at each reporting date outlining
Defined benefit
pension scheme
valuation
the approach taken by management to assess the net realisable value of inventories and cost
of sales, with details of sites with significant areas of judgement and any forward land against
which provisions have been made.
The Committee receives details of the IAS 19R – Employee Benefits valuations carried out at
each reporting date for management by the actuary who advises the Company on the
underlying assumptions. A sensitivity analysis is also provided for its consideration. The
Committee also receives details of the triennial independent scheme valuation report prepared
by the Scheme Actuary and reviews key judgement areas made including relevant actuarial
advice that has been received. In addition, the Committee also reviews the external auditors’
report benchmarking pension actuarial assumptions. The Scheme was in surplus as at 27 June
2021.
Conclusions
In order to assess the appropriateness of judgements made by the Company to satisfy itself of the adequacy of
disclosures and to provide independent challenge, the Committee carried out the following:
• a review of the internal control measures and risk management systems;
• a review of the findings of the external auditors’ testing of controls and processes for estimating; and
• a debrief and challenge of the senior Finance team, including the Group Finance Director and Finance Director
– Group Services, with specific regard to the Group’s valuations, forecasts and assumptions.
Following this, the Committee concluded that appropriate judgements had been applied in determining the estimates
and that adequate disclosures had been made.
A review of the full year 2020 results, including the Annual Report and a report from the
external auditors;
Consideration of the Group risk assessment process, key accounting judgement areas, viability
statement and a going concern review;
A review of the latest triennial independent scheme valuation report prepared by the Scheme
Actuary of the defined benefit pension scheme;
A review of the related third party transactions;
A review and discussion of the external auditors’ report;
Discussion regarding the latest Business Performance Review;
A review of the Post Completion Reports;
An update on action taken in response to the COVID-19 pandemic;
A review of the compliance with the Anti-Bribery Policy;
An update on compliance with the General Data Protection Regulation 2018 (“GDPR”); and
An update on cyber security.
September 2020
A recommendation to the Board to approve the 2020 Annual Report following a review of the
full and clean audit opinion from the external auditors.
February 2021
June 2021
A review of the 2021 half-yearly accounts including a report from the external auditors;
Consideration of the key accounting judgement areas and going concern;
Discussion of accounting policies to be applied for the 2021 financial year;
A review of the proposed external audit strategy for 2021 and associated fees;
A review of the Risk Register;
Discussion regarding the latest Business Performance Review;
A review of the Cross Divisional Testing programme;
A review of the latest Post Completion Reports;
A review of the compliance with the Anti-Bribery Policy and the Gifts and Hospitality Policy;
A further update on compliance with GDPR;
A further update on cyber security;
A review of the Terms of Reference of the Committee; and
Discussion regarding progress made on the improvement areas following the 2020 Audit
Committee self-evaluation.
A review of the appropriateness of the Group’s accounting policies;
A further update on action taken in response to the COVID-19 pandemic;
A review of the Risk Register;
Discussion regarding the latest Business Performance Review;
A review of the Business Performance Review programme;
A review of internal controls across the whole business;
A review of the cyber security penetration testing;
Discussion of the update of, and adherence to, the Policies and Procedures manuals;
A review of the Cross Divisional Testing programme;
A review of the latest Post Completion Reports;
An update on IFRS 15 and the revised ISA 540;
An update on insurance cover renewal for the Group;
An update and discussion on internal audit and its strategy;
An update and discussion on the external audit;
A further update on compliance with GDPR;
A further update on cyber security;
A review of the Group’s Anti-Bribery Policy, Anti-Facilitation of Tax Evasion Policy and
Whistleblowing Policy;
Report presentation of the Committee’s self-evaluation and a discussion on its effectiveness;
A review of the effectiveness of the external audit process;
A review of the independence and objectivity of the external auditors; and
A review of the Committee’s Terms of Reference.
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September 2021
A review of the full year 2021 results, including the Annual Report and a report from the
external auditors;
Consideration of the Group risk assessment process, viability statement and a going concern
review;
A review of the related third party transactions;
Discussion regarding the latest Business Performance Review;
A review of the compliance with the Anti-Bribery Policy; and
An update on cyber security
G O I N G CO N C E R N
Biannually, management conducts a detailed going
concern review, considering liquidity and banking covenant
compliance. The Committee has challenged forecast cash
flows and the assumptions applied to derive the cash flows
and availability of finance from existing facilities. The
Committee has challenged the various risks associated
with the COVID-19 pandemic that have been assumed as
part of this review. The cash flow forecasts evidence that
the Group has adequate levels of liquidity from its
committed facilities and complies with all banking
covenants for at least 12 months from 14 September 2021.
The Committee therefore considers that it is appropriate to
continue to adopt a going concern basis in the preparation
of the financial statements.
E X TE R N A L AU D ITO R S
Following the latest tender process which was undertaken
by the Committee in 2018, KPMG LLP was appointed as the
external auditor of the Company in 2019 and reappointed
at the 2020 Annual General Meeting, with 99.98% of votes
cast in favour of reappointment.
The tenure of the current Audit Partner from KPMG LLP,
Nick Plumb, commenced from the financial year
commencing 1 July 2019.
Provision of Non-Audit Services by External Auditors
The Committee has a formal policy in respect of the work
of the external auditors. The purpose of this policy is to
ensure that the auditors’ objectivity and independence is
maintained by ensuring both that the nature of any non-
audit work undertaken and the level of fees paid does not
compromise the auditors’ position.
Appointments in respect of non-audit work require the
prior approval of the Committee within an established
budget. In addition, no work can be undertaken by the
external auditors in any area where there is any identifiable
risk that the work of an individual within the external audit
firm or the external audit firm generally could conflict or
compromise the quality, objectivity or independence of any
audit or compliance work undertaken for the Group.
The external auditors are not indemnified by the Company
nor has the Company purchased liability insurance for
them.
Non-audit services provided by the external auditors
during the 2021 financial year comprised audit related
assurance services, in the form of an independent review
of the half-yearly statements. The Committee concluded
that the provision of such services was appropriate given
that they were closely related to the work performed in the
external audit process and, for reason of effectiveness and
efficiency, it was considered advantageous to engage the
external auditors due to their knowledge and expertise.
The Committee, in line with the above formal policy,
approved all non-audit service fees for the work
undertaken in the financial year. The provision of such
services was in line with the FRC’s Revised Ethical
Standard 2019. As a result of this policy and additional
discussions with the external auditors, the Committee is
satisfied that the independence of KPMG LLP was not
compromised because of this additional work. Details of
fees paid to KPMG LLP for audit and non-audit purposes
are disclosed on page 191.
Independence Assessment of External Auditors
In line with Provision 25 of the Code, the Committee
monitors and reviews the independence and objectivity of
the external auditors. The Committee is satisfied that
KPMG LLP remain independent and objective following its
assessment, taking into consideration the following:
• Tenure of the audit firm – the 2020 financial year was the
first period of KPMG LLP’s appointment as the external
auditor. The Committee is aware of the requirement for it
to retender the Company’s statutory audit services
engagement at least every ten years, with rotation at
least every twenty years. The Committee is also mindful
of the Competition & Markets Authority view that
companies may benefit from going out to tender every
five years and, when considering the specific timing for
the retender of the external auditor, the Committee shall
consider which year would be in the best interests of its
members among other factors. Having completed only
two years of external audit services, the Committee is
satisfied that the independence of KPMG LLP has not
been impaired;
• Tenure of the audit partner – the 2020 financial year was
the first period of Nick Plumb’s engagement as Audit
Partner of the external auditor. The Committee is aware
of the requirement for the Audit Partner of the external
auditor to be rotated at least every five years. Having
completed only one year as Audit Partner, the Committee
is satisfied that the independence of the external
auditors, and Nick Plumb as Audit Partner, has not been
impaired;
effectiveness. There is an ongoing process for identifying,
evaluating and managing significant risks. However, in
reviewing the effectiveness of internal control, any internal
control system can only provide reasonable but not
absolute assurance against material misstatement or loss.
• Connection of the audit firm to the Members of the
Committee – KPMG LLP has no connection to any
Member of the Committee or the Board; and
• Level of non-audit services provided to the Company –
the Committee is satisfied that the level of non-audit
services provided by KPMG LLP was in line with the
Company’s policy and was appropriate in respect of the
audit services provided and that an effective audit could
be conducted, with such level in no way compromising
independence.
Effectiveness Assessment of External Auditors
The performance of the external auditors is subject to
regular review by the Committee, in line with Provision 25
of the Code.
This year, a tailored assessment framework was compiled
following the first year of audit by the external auditors to
allow for a rigorous evaluation by the individual Members
of the Committee, as well as regular attendees. The
assessment framework shall be used in forthcoming years,
being adapted where appropriate, allowing for an objective
analysis of progress and possible areas of improvement
over the tenure of the external auditor.
In its assessment of the effectiveness of the external
auditors, the Committee considered the quality of the
external audit processes; the knowledge and experience
of the external audit team; the external audit scope and
plan; the external audit communications; and the external
audit governance and independence.
Following its assessment, an anonymised report was
presented to the Audit Committee and the external auditor.
The areas of improvement highlighted within the
assessment were discussed with the external auditor.
Following this discussion, the Committee were satisfied
with the effectiveness of KPMG LLP.
Re-Appointment of External Auditors
Following its assessment of the independence and
effectiveness of the external auditors, having received the
recommendation from the Committee, the Company will be
proposing the re-appointment of KPMG LLP as its external
auditor at the 2021 Annual General Meeting.
The Committee confirms that there were no contractual
obligations that acted to restrict the Committee’s choice of
external auditor.
I NTE R N A L CO NTR O L S
The Board recognises its overall responsibility for the
Group’s system of internal control and for monitoring its
Key business activities, including finance, land acquisition,
product design, and procurement and information
technology are controlled by the Executive Directors. All
activity is organised within a defined structure with formal
lines of responsibility, designated authority levels and a
structured reporting framework. A formalised reporting
structure has been established within the Group. The
Executive Directors, the Company Secretary, Regional
Chief Executives, Group Human Resources Director, Group
Customer & Marketing Director and Group Communities
Director (the “Executive Management Team”) meet monthly
to discuss the Group’s key issues, principal and emerging
risks and opportunities, and more frequently if required to
meet the demands of the business. The Divisions also hold
monthly board meetings which are attended on a rotational
basis by the Executive Directors.
The key features of the Group’s internal controls are as
follows:
• defined authorisation levels exist over key areas such as
land purchase, the placing of orders and contracts and
staff recruitment;
• the requirement of a formal land bid approval meeting to
be held for all sites above a certain land value threshold
prior to being submitted. Depending on the threshold,
the meeting must be attended by the Non-Executive
Chairman, the Group Chief Executive, the Group Finance
Director, the Regional Chief Executive, the Managing
Director of the Division and Harrow Estates and provides
greater Group visibility of potential sites at an earlier
stage;
• prior to completion on land purchases above a certain
monetary threshold, the requirement for a peer review of
the contract to be conducted by another Divisional Legal
Director, following which the Legal Director must prepare
a supplementary report for the Division;
• a requirement for a peer review to be conducted by
another Divisional Commercial Director on the instruction
of Group Commercial for any subcontract orders above a
certain monetary threshold;
• a comprehensive prioritised Risk Register which is
regularly reviewed and presented to the Committee;
• the Group’s management information systems provide
weekly updates on key statistics and information in
respect of sales and production and the content of these
weekly reports is regularly reviewed to ensure it remains
appropriate;
• the Group has an in-house Health, Safety and
Environmental department and places great emphasis on
the importance of health and safety and environment
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AU D IT CO M M IT TE E R E P O RT CO N T I N U E D
The Committee therefore confirms that it is satisfied that
the system of controls has been in operation throughout
the financial year and up to the date of this report.
R I S K R E G I S TE R
The Group formally reviews its prioritised Risk Register
biannually and more often as necessary. At least annually,
the detailed Risk Register is circulated to all Divisional
Managing Directors, the Regional Chief Executives and key
Group Directors and Heads of Department to review with
their teams. Feedback is then collated on any omissions or
amendments to the risks or controls, any views regarding
risks which have become more or less significant since the
last review period and any other comments relating to the
risks or controls.
Responses from the review exercise are then summarised
and forwarded to the risk owners together with the current
detailed Risk Register and a scoring matrix. The Risk
Register is then updated as appropriate, according to the
impact and likelihood of the risks after taking into
consideration the prevent and detect controls.
The Executive Management Team, through its regular
meetings, reviews key areas of risk on an ongoing basis
and considers whether the internal controls identified in
relation to those risks remain appropriate. The updated and
reviewed Risk Register is then discussed and approved by
the Committee.
I N S U R A N C E
The Board has appointed an experienced broker to advise
on and co-ordinate all insurance matters across the Group
and they liaise closely with appropriate Group personnel at
head office and within the divisions and report directly to
the Group Finance Director. The insurance renewal is
discussed and agreed by the Committee annually.
R I S K M A N AG E M E NT A N D I NTE R N A L AU D IT
The Group has in place a robust risk management
framework and the table below provides details of the key
components of the risk management system which are
subject to regular review and challenge by the Committee:
management. The department works closely with the
Divisions to ensure that training is provided to
employees and subcontractors. Best practice is shared
and appropriate actions are taken to comply with health
and safety best practice and legislation throughout the
organisation;
• an Environmental, Social and Governance (“ESG”)
scorecard with cross discipline support which improves
the focus on the relevant key performance indicators and
controls over delivery in those areas;
• the Board requires each director in its operating
Divisions to complete an annual statement on Corporate
Governance and related party transactions. The
statement is designed to provide assurance that Group
policies and procedures are being implemented and
complied with in all material respects;
• key functional directors must complete a Principal
Controls Self-Assessment Questionnaire which is
reviewed by the Board to assist in improvements in the
control framework;
• a weekly business report comprising sales funnel
information, gross margins and order book is produced
for the Group, each division and each site and circulated
across the Group;
• a monthly reporting pack is circulated in advance and
reviewed at the meetings of the Board, Executive
Management Team and divisional boards. Annual
budgets are set, with actual performance compared
against the annual budget;
• preparation and regular updates of strategic plans;
• the policy and procedures manuals which cover all the
significant aspects of the Group’s operations and
describes the systems and controls that are to be
applied; and
• daily statements of a reconciled cash position identifying
significant payments are prepared, rolling cash flow
forecasts are prepared and forecast banking covenant
compliance are tested.
Throughout the year, the Committee carried out
assessments of internal control by considering
documentation from the Executive Directors and the
internal audit function as well as taking into consideration
events since 27 June 2021. The internal controls extended
to the financial reporting process and the preparation of
consolidated financial statements. The basis for the
preparation of consolidated financial statements has been
undertaken in accordance with the Company’s accounting
policies as set out on pages 184.
In assessing the effectiveness of the internal audit
function, the Committee is satisfied that it has the
appropriate status, processes, knowledge and resources to
deliver an effective internal audit and that the function has
had a positive impact on the controls and governance of
the Group.
Component
Description
Risk Register
The Group’s Risk Register defines controls as prevent or detect and identifies owners for each
high level risk. Feedback on the risks and controls is actively encouraged and is facilitated by
links on the Group’s intranet to ensure the risks listed remain relevant and accurate. The Register
itself is regularly maintained and is reviewed by the Committee biannually and more often as
necessary.
Authorisation
Processes
Defined authorisation levels exist over key areas such as land purchase, the placing of orders and
contracts and staff recruitment.
Business Process
Review
Programme
The cornerstone of the internal audit work undertaken is the Business Process Review, a risk-
based programme designed, based on the Risk Register, to be carried out regularly at each
division of the Group. The Business Process Review programme looks to provide assurance to the
Group by testing internal controls and adherence to Policies and Procedures and reviewing
specific principal and emerging risks. It also plays an important role in seeking out best practice
and sharing it across the Group and identifying business process improvements.
Committee Members receive an Executive Summary of each Business Process Review report and
these reports are then discussed at the next Committee meeting. In addition, at its meetings, the
Committee reviews the progress made by the relevant Division, following the completion of a
Business Process Review, against the internal audit process.
The programme is reviewed annually following the completion of the annual Risk Register review
to ensure that it evolves and adapts in line with the needs of the business.
Cross Divisional
Testing
Programme
During the year, the Group expanded the Cross Divisional Testing programme, which
complements and runs alongside the main Business Process Review programme and covers a
number of functional areas. The Cross Divisional Testing programme primarily focuses on testing
which can be performed more efficiently at a remote level across all Divisions at once and
therefore provides a direct and instant comparison between Divisions, immediately highlighting
sources of best practice to be shared across the Group.
Site Completion
Reporting
The Company has in place a business planning process whereby each land transaction, following
completion of the development, is tested against its original appraisal to ascertain its performance
and to improve cash flow forecasting. These Site Completion Reports are provided to the
Committee and are discussed at each meeting.
Business Policies
and Procedures
Group Policies and Procedures are regularly reviewed and updated by the department owners
and shared on the Group’s intranet, Engage. Key policies are assigned with ‘mandatory read’
status for all or select groups of employees to ensure that they are read and understood by the
requisite audience.
Gift Register
Reporting
The Committee is provided with regular updates on changes made to the current policies and
procedure as well as an overview of newly released policies.
The Business Performance Reviews test key controls and adherence to the policies and
procedures on a sample basis across all Divisional departments.
In line with the Anti-Bribery and Corruption policy and Gifts and Hospitality policy each Division
across the Group maintains its own Gift Register whereby all gifts received over the relevant
threshold must be recorded. Gift authorisation forms must be formally approved and retained by
each Division. Regular reviews of the Gift Register are undertaken in order to detect any potential
issues arising under the Bribery Act 2010. A combined Group-wide register is provided to the
Committee to allow risk assessments to be carried out by the Committee. Within the Code of
Conduct, there is a gift specific decision-making tool which employees are encouraged to use
when considering whether they should accept or offer a gift or hospitality which seeks to guide
them to the expected behaviours in line with our policy. The Gift Register Reports are provided to
the Committee twice yearly and are discussed at the meeting.
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AU D IT CO M M IT TE E R E P O RT CO N T I N U E D
G OV E R N A N C E R E P O R T
N O M I N ATI O N CO M M IT TE E R E P O RT
The internal audit strategy and risk management framework
is discussed with the external auditors and discussed and
agreed with the Committee. Suggested control
improvements and any control weaknesses identified are
followed up as appropriate.
B R I B E RY AC T
Following the introduction of the Bribery Act 2010 the
Company put in place a formal policy on bribery and
corruption for all employees to strictly adhere to. The
Company Secretary ensures that the policy is complied
with, updates the policy, procedures and Code of Conduct
as and when required and provides regular reports to the
Committee.
The Bribery Act policy is formally reviewed and approved
each year by the Committee.
The policy contains the definition of bribery and corruption,
providing examples of how this could work in the context of
the Company’s industry and also offering guidance as to
what would be considered acceptable behaviour. The
policy deals with all matters of bribery and corruption and
clarifies the Company’s strict approach to any form of
facilitation payment or conflict of interest.
Training is given to all staff to highlight the various forms of
bribery and all new staff attend an induction course at the
commencement of their employment which includes a
section relating specifically to bribery and the implication
on individuals and the Company of an act of bribery either
given or received. Within the Code of Conduct, there is a
specific decision-making tool which is designed to provide
employees with key questions to ask themselves should
they ever be faced with difficult situations which could
ultimately lead to bribery or corruption. This seeks to guide
them to act in a way that is in line with Company policy and
prevent any form of bribery taking place.
As outlined on page 115 within the Risk Management
framework, the Committee is provided with Gift Register
Reports following the twice yearly reviews on the
compliance with the Anti-Bribery and Corruption policy and
Gifts and Hospitality policy.
TH E C R I M I N A L F I N A N C E S AC T
Following the introduction of the Criminal Finances Act
2017 on 30 September 2017, the Company put in place a
policy relating to the facilitation of tax evasion. The policy
is applicable to every employee and the Redrow Employee
Handbook, which is provided to each new employee,
includes reference to the policy and the Group’s zero-
tolerance stance on tax evasion and its facilitation. As with
the Bribery Act policy, the Company Secretary ensures that
the policy is complied with and reports to the Committee
on matters falling within the policy.
The Anti-Facilitation of Tax Evasion policy is formally
reviewed and approved each year by the Committee. There
were no changes made to the policy during the year.
P E R F O R M A N C E E VA LUATI O N
During the year, a formal internal evaluation of the
Committee was carried out to build upon the progress
made by the 2019 evaluation which was externally
facilitated by Independent Audit, as well as the formal
internal evaluation undertaken last year. In line with
Provision 21 of the Code, the Board shall be engaging an
external evaluator to facilitate the evaluation of the
Committee in 2022.
After reviewing the 2020 self-evaluation report, a
questionnaire was created and tailored, taking into
consideration comments made in the previous years’
assessment as well as the current market. The Members of
the Committee, as well as those people who regularly
attend the Committee meetings by invitation, were invited
to participate in the evaluation.
Following completion of the questionnaire, an anonymised
effectiveness report was compiled and presented to the
Members of the Committee. The findings of the evaluation
were discussed and the Committee was found to be
effective, concluding that it had fulfilled its remit and had in
place appropriate Terms of Reference.
The evaluation highlighted that the Committee was
particularly strong in ensuring that the fundamental
reporting environment is sound and actively supporting the
internal audit function. There was also unanimous
agreement that there is a good level of support for the
Committee and that the Committee benefits from good and
open discussions and is led by a knowledgeable Chairman
who promotes challenge and debate from all Members.
CO M P LI A N C E S TATE M E NT
The Company has complied with the provisions of The
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014 for the 52 weeks ended 27 June 2021.
N I C K H E W S O N
Chairman of the Audit Committee
14 September 2021
“The Committee is focused on ensuring that the Board
and Executive Management Team have the requisite level
of diverse skills, knowledge and experience to deliver the
long-term success of the Company.”
I am pleased to present the
Nomination Committee Report for the
52 weeks ended 27 June 2021. This
report has been prepared in
accordance with the requirements of
the UK Corporate Governance Code
2018 (the “Code”).
During 2021, the Committee
maintained its focus on the careful
succession planning of the Board and
Executive Management Team to
ensure that they remain effective in
driving forward the strategy of the
Company.
On 1 June 2021, we welcomed
Richard Akers to the Board as
N I C K
H E W S O N
Chairman of the
Nomination
Committee
Chair-Designate and independent Non-Executive Director.
Richard also joined as a Member of this Committee and the
Remuneration Committee on the same date. We are
delighted that Richard Akers has joined us as he brings
with him a wealth of experience that has further enhanced
the knowledge and skills of the Board as a whole.
On 6 November 2020, Vanda Murray stepped down from
the Board as Non-Executive Director as a result of other
work commitments.
Following the results announcement on 15 September
2021, John Tutte will also step down from the Board after
nearly twenty years with Redrow as Regional Chairman,
TA B LE O F AT TE N DA N C E
Name
Nick Hewson †
Sir Michael Lyons †
Nicky Dulieu †
Vanda Murray 1†
Richard Akers 2†
Role
Chairman
Member
Member
Member
Member
Group Chief Executive and latterly as both Executive and
Non-Executive Chairman. On behalf of the Board, I would
like to thank John Tutte for his outstanding commitment
and dedication to Redrow. We wish him all the very best for
the future.
CO M M IT TE E M E M B E R S H I P A N D M E E TI N G S
There are four Members of the Committee, each of whom is
an independent Non-Executive Director, with myself, the
Senior Independent Director, as Chairman of the
Committee. The other Members of the Committee during
the 2021 financial year were Sir Michael Lyons, Nicky
Dulieu, Richard Akers and Vanda Murray. The Company
Secretary acts as Secretary to the Committee.
As stated in my introduction above, Richard Akers joined
as a Member of the Board and the Committee on 1 June
2021 and Vanda Murray stepped down as a Member of the
Committee on 6 November 2020 when she retired from the
Board.
The biographies of the Members of the Committee can be
found at pages 92 to 93.
The Committee met formally twice during the 52 weeks
ended 27 June 2021, with additional informal meetings
being held to aid the recruitment process of Richard Akers
as further outlined on page 119. For all meetings, and
where otherwise necessary, papers were circulated
sufficiently in advance to allow proper consideration of all
matters for discussion. Details of the meeting attendance
can be seen in the table below.
Attendance at Meetings
2/2
2/2
2/2
0/0
1/1
1.
2.
Vanda Murray stepped down from the Board on 6 November 2020 and there were no formal meetings held between the beginning of the
2021 financial year and her retirement date.
Richard Akers was appointed as a Member of the Committee on 1 June 2021 and attended the meeting held between his appointment
date and the end of the 2021 financial year.
† Member considered to be independent. Throughout the 2021 financial year the Committee was made up of 100% independent Members.
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N O M I N ATI O N CO M M IT TE E R E P O RT CO N T I N U E D
R E S P O N S I B I LITI E S A N D TE R M S O F
R E F E R E N C E
The key responsibilities of the Committee are:
• reviewing the structure, size and composition of the
Board (including skills, knowledge and experience) and
making recommendations for further recruitment to the
Board or proposing changes to the existing Board;
• reviewing the leadership needs of the Company, both
executive and non-executive, ensuring appropriate
succession planning for Directors and other senior
executives within the business;
• leading the process for Board appointments, ensuring
they are conducted on merit and against objective
criteria and taking into consideration that diversity is an
important factor forming part of the selection criteria
used to assess candidates to achieve a balance on the
Board;
• making recommendations to the Board, including on
appointment of Executive Directors and Non-Executive
Directors to the Board, the re-appointment of Directors,
the re-election of Directors at the Annual General
Meeting and the membership of the Audit, Nomination,
Remuneration and Placemaking and Sustainability
Committees;
• ensuring that a formal, structured and tailored induction
programme is undertaken by any newly appointed
member of the Board;
• ensuring that a formal annual evaluation of the Board and
its Committees is conducted and that such an evaluation
be externally facilitated when deemed necessary and at
least every three years;
• reviewing annually the time required from the Non-
Executive Directors, as well as considering the external
commitments of all members of the Board and assessing
whether there are any issues with overboarding;
• assessing the independence of the Non-Executive
Directors which the Company deem to be independent
taking into consideration the circumstances outlined in
Provision 10 of the Code;
• satisfying itself with regard to succession planning for
the Board and the Executive Management Team, taking
into account the following:
• challenges and opportunities facing the Company;
• future skills and expertise needed on the Board,
including development and training; and
• the need to support the development of a diverse
pipeline.
• ensuring suitable candidates for the Board are identified
through an appropriate recruitment process, giving due
regard to the benefits of diversity, including gender and
ethnicity, and recommending their appointment; and
• reviewing the Equality, Diversity and Inclusion Policy and
ensuring there is sufficient linkage to the Company’s
strategy.
The Committee’s Terms of Reference are published on the
Group’s website (redrowplc.co.uk).
M A I N AC TI V ITI E S D U R I N G TH E Y E A R
During the 2021 financial year, the Committee undertook
the following activities:
• a review of the structure, size and composition of the
Board;
• a review of executive and non-executive succession;
• a review of the independence of the Non-Executive
Directors, excluding the outgoing Non-Executive
Chairman who the Board does not consider to be
independent;
• a review of the succession plans of the Executive
Management Team;
• an assessment of the Board composition and diversity;
• a recruitment process for a new Non-Executive Chairman
to start initially as an additional independent Non-
Executive Director, to also act as Chair-Designate until
assuming the Non-Executive Chairman role following the
retirement of John Tutte, resulting in the appointment of
Richard Akers;
• an evaluation of the Board, its Committees and the
Executive and Non-Executive Directors;
• a review and recommendation that all of the Directors,
save for John Tutte who will be retiring from the Board on
15 September 2021, stand for re-election at the
conclusion of the 2021 Annual General Meeting in
accordance with the Code;
• a discussion regarding my tenure as Non-Executive
Director, acknowledging that I will have completed a nine
year term in December 2021, and the need to appoint a
new independent Non-Executive Director and to fill the
positions I currently hold as Senior Independent Director
and Chair of the Audit Committee in readiness for my
retirement from the Board before the 2022 Annual
General Meeting;
• consideration of the engagement of an external
recruitment agency to commence the search for a new
independent Non-Executive Director to replace me; and
• a review of the Committee’s Terms of Reference.
Where appropriate, the Directors were not present and did
not vote when any individual proposals were discussed.
S U CC E S S I O N P L A N N I N G
Executive Directors
Matthew Pratt, previously Chief Operating Officer, was
promoted to Group Chief Executive on 1 July 2020. Having
joined the Board on 1 April 2019 as Chief Operating Officer,
the Committee recommended the promotion of Matthew
Pratt to Group Chief Executive. The Committee remains
satisfied that his capabilities, experience and strategic
focus allow him to effectively lead the operational
management of the Group and implement strategic plans
with the assistance of the Executive Management Team.
Having joined the company in 2003 as a Chief Quantity
Surveyor and then becoming a Regional Chief Executive in
2013, Matthew Pratt is a prime example of how the
Company develops and nurtures talent in line with the
strategic theme of Valuing People, resulting in the ability
for employees to make their way up to the Board.
Barbara Richmond, Group Finance Director, joined the
Board from an external post in January 2010 and continues
to demonstrate a high level of competence in her role,
displaying effectiveness in overseeing the financial
management of the Group and maintaining effective
communications with shareholders.
During the year, a succession planning project was
undertaken and overseen by the Committee and key
individuals were identified within the business as having
potential to progress to the Board and/or Executive
Management Team. The succession plan was subsequently
approved by the Board and will be reviewed on an ongoing
basis and approved at least every six months. A
development plan was put together to ensure that those
identified individuals are provided with the resources
deemed necessary or desirable to allow them to achieve
their full potential within the business.
Non-Executive Chairman
John Tutte was appointed as Executive Chairman,
replacing Steve Morgan, on 1 April 2019. As part of the
transition to a more conventional board structure, and
following the AGM held on 6 November 2020, John
stepped back to a Non-Executive Chairman role and
informed the Board of his intention to retire ahead of the
2021 AGM. On 12 May 2021, it was announced that Richard
Akers would join the Board as Chair-Designate and
independent Non-Executive Director on 1 June 2021 and
would assume the role of Non-Executive Chairman
following the retirement of John Tutte on 15 September
2021. Richard Akers has been working closely with John
Tutte during a handover period to ensure a smooth
transition to the new Non-Executive Chairmanship.
Recruitment Process of Richard Akers
April 2020
The Committee developed a role specification and list of
characteristics deemed essential for the replacement Non-
Executive Chairman, the brief.
July 2020
A tender process commenced for the provision of external
recruitment services for the search of an independent Non-
Executive Chairman.
November 2020
Following a final review of the brief, Russell Reynolds Associates
were engaged as the external recruitment consultants.
February 2021
Following consultation with each Board member, the recruitment
consultants prepared a longlist of candidates. Once reviewed,
the Committee developed a shortlist of potential candidates.
March 2021
Virtual interviews were held by the Committee with each of the
shortlisted candidates and the Committee agreed on the final
two candidates.
March 2021
The final two candidates individually spent the day with the
Group Chief Executive visiting Redrow sites.
April 2021
The Committee held additional face-to-face meetings with both
candidates.
April 2021
The Committee sought references for the final two candidates
and held virtual meetings with referees for both.
May 2021
The Committee held a debrief following the conclusion of all of
the interviews, site visits and referee meetings and made a
recommendation to the Board that Richard Akers be appointed.
Richard Akers has brought to the Board strong industry and
commercial experience which he has gained over a long
career and also through his various non-executive roles
which will be of great benefit to the Board.
May 2021
The Board accepted the recommendation of the Committee and
approved the appointment, following which an announcement was
made to investors.
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N O M I N ATI O N CO M M IT TE E R E P O RT CO N T I N U E D
Following his appointment, Richard Akers undertook a
tailored induction programme, which introduced him to the
Company and senior management and allowed him to
understand the business further in order for him to be able
to properly discharge his duties.
Having initially engaged Inzito Partnership, an organization
having no connection to the Company or the individual
directors of the Company, to assist with the recruitment of
a replacement Non-Executive Chairman, the Committee
took the decision in November 2020 to revisit the brief for
the role and subsequently approved the engagement of
Russell Reynolds Associates as external recruitment
consultants for this search. Other than its engagement for
this appointment and that of Nicky Dulieu in 2019, Russell
Reynolds Associates has no connection to the Company or
the individual directors of the Company.
Non-Executive Directors
The Board considers that succession planning of the Board
and its Committees is extremely important and believes
that it currently has a good balance and diversity among its
Non-Executive Directors, with each of them having relevant
skills derived from serving in a range of executive and
non-executive positions over many years.
During the year, the Committee carried out an exercise to
determine any gaps in experience or balance on the Board.
As part of this exercise, the Committee assessed the
independence of the current Non-Executive Directors,
excluding the current Non-Executive Chairman who the
Board does not consider to be independent, taking into
consideration the circumstances likely to impair
independence outlined in Provision 10 of the Code. The
Committee acknowledged that I will have served a nine
year term as a Non-Executive Director by December 2021
and it is therefore necessary to arrange for a new
independent Non-Executive Director to be appointed in my
place.
Further details of this process will be outlined in next
year’s Annual Report and as soon as the appointment has
been approved, the Company will release an
announcement to investors containing details of the
appointment.
A N N UA L R E - E LE C TI O N O F TH E D I R E C TO R S
The Committee believes that presently the balance of
Non-Executive and Executive Directors is effective and
contains the appropriate mix of skills and experience for
the Board to continue to operate successfully. The current
composition is compliant with Provision 11 of the Code as
the ratio of independent Non-Executive Directors to
Executive Directors, excluding the Chairman, is 4:2 (67%).
Following the change of Non-Executive Chairman, resulting
in John Tutte stepping down from the Board and Richard
Akers taking over the Non-Executive Chairman role, the
Board composition will remain compliant with this
provision, with the ratio of independent Non-Executive
Directors to Executive Directors, excluding the Chairman,
being 3:2 (60%).
following the full year results presentation on 15 September
2021.
The Committee has also assessed the time commitment of
all Directors to ensure that any other commitments do not
compromise their ability to commit sufficient time to the
Company to properly discharge their responsibilities. The
Committee does not consider that any of its Directors are
overboarded and is satisfied that sufficient time and
energy is devoted to the Company by each Director.
Following an assessment comprising the following factors,
the Committee has satisfied itself that all Directors
continue to perform satisfactorily and are important to the
Company’s long-term sustainable success:
• the effectiveness of the Directors as part of the annual
evaluation, including in relation to their fulfilment of their
duty under section 127 of the Act;
• the skills, knowledge and experience of the Directors,
taking into consideration the requirements of the
Company, including the individual contributions as
follows:
• John Tutte has over 40 years’ experience within the
industry and contributes key industrial and strategic
knowledge to the Board;
• Matthew Pratt has 24 years’ experience within the
industry and contributes key operational knowledge to
the Board;
• Barbara Richmond has a strong manufacturing and
retail background and contributes key financial
knowledge to the Board, having over 25 years’
experience;
• I contribute strong commercial, financial and
operational knowledge to the Board;
• Sir Michael Lyons contributes strong property,
placemaking and sustainability knowledge to the
Board;
• Nicky Dulieu contributes extensive retailing, customer
service and remuneration experience to the Board;
and
• Richard Akers has a strong background in property
and land acquisition and contributes extensive industry
experience to the Board.
• the time dedicated by the Directors to the Company in
order to properly discharge their responsibilities; and
• the fulfilment of the independence criteria, as outlined in
Provision 10 of the Code, for the independent Non-
Executive Directors.
As such, the Committee has recommended that the Board
propose the re-election of all Directors at the 2021 AGM,
save for John Tutte who will be retiring from the Board
D I V E R S IT Y
The principle of boardroom diversity is strongly supported
and recognised by the Board and has clear linkages to the
Company’s strategy, with Valuing People being one of the
Company’s three strategic themes. It is the Board’s policy
that appointments to the Board will always be based on
merit, so that the Board has the right individuals in place,
and the Board recognises that diversity is an important
consideration forming part of the selection criteria used to
assess candidates to achieve a balance on the Board. The
Board currently has not imposed a diversity quota but will
keep this under review and consider putting this in place
should it feel that it is in the best interests of the Company
to do so.
The Group HR Director attends the monthly Executive
Management Team meetings and provides a monthly HR
report, which provides key statistics on Group employees
as well as providing updates on employee engagement
and recruitment. She reports to the Nomination Committee
at least twice a year to provide an update on progress.
During the year, the Company developed a new Equality,
Diversity and Inclusion Policy which was reviewed and
approved by the Committee. Further details of the new
policy can be seen on page 159 of the Directors’ Report.
Gender Diversity
The Committee continues to note the target of 33% female
representation on boards outlined in the Hampton-
Alexander review. The current female representation on
the Board is 29% (ratio of 2:5). Once John Tutte retires from
the Board on 15 September 2021, the female representation
on the Board will be 33% (ratio of 2:4), thereby falling in line
within the aforementioned target.
The Board believes in the benefits of cognitive diversity,
from a wide range of complementary skills. The Committee
will continue to aspire to maintain a diverse Board with
recruitment and selection of talented individuals with a
broad range of appropriate skills, irrespective of gender or
otherwise.
In line with Provision 23 of the Code, the table below sets
out the current position of the Company on a gender basis:
Main Board
Female
Male
2 (29%)
5(71%)
Executive Management Team
2 (25%)
6 (75%)
Direct reports to Executive
Management Team
Redrow employees at
June 2021
9 (27%)
24 (73%)
736 (34%)
1,425 (66%)
Ethnic Diversity
The Committee continues to monitor and review reports
and recommendations relating to the composition of
boards and diversity, including the Parker Review and the
McGregor-Smith Review on ethnic diversity. The Group HR
Director regularly reports to the Committee on the diversity
of the workforce, the breakdown of which now includes
employee representation figures of Black, Asian and
Minority Ethnic (“BAME”) at an all employee level and
directorate level. Improving the diversity of our workforce
is a key focus at present, both at entry level and for
progression.
The Committee believes that all levels of the business
should reflect a diverse workforce and that appointments
to the Board will always be based on merit. The Board
strictly prohibits any bias towards any particular ethnicity,
creed, religious belief or otherwise.
As a national housebuilder, the Company is present in
many different communities and the Board believes that
the Group’s workforce should be reflective of the
communities we work in and the customers we create
homes for, including in respect of ethnicity.
The Committee notes the Parker Review target of one
person of colour on the Board by 2024 for FTSE 250
companies and acknowledges that at present, the Board
comprises 7 Directors which are not from a minority ethnic
group. Given the value placed on diversity by the Company
and its focus on progressing the Equality, Diversity and
Inclusion agenda, the Committee will ensure that the
appropriate weight is placed on ethnic diversity as part of
the selection process when recruiting future Directors.
Further details of the steps taken by the Company to
increase diversity and raise awareness of the importance
of an inclusive workforce can be found on page 159.
P E R F O R M A N C E E VA LUATI O N
During the year, a formal internal evaluation of the
Committee was carried out to build upon the progress
made by the 2019 evaluation which was externally
facilitated by Independent Audit, as well as the formal
internal evaluation undertaken last year. In line with
Provision 21 of the Code, the Board will be engaging an
external evaluator to facilitate the evaluation of the
Committee in 2022.
After reviewing the 2020 self-evaluation report, a
questionnaire was created and tailored, taking into
consideration comments made in the previous year’s
assessment as well as the current market. The Members of
the Committee, as well as those people who regularly
attend the Committee meetings by invitation, were invited
to participate in the evaluation.
Following completion of the questionnaire, an anonymised
effectiveness report was compiled and presented to the
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N O M I N ATI O N CO M M IT TE E R E P O RT CO N T I N U E D
Members of the Committee. The findings of the evaluation
were discussed and the Committee was found to be
effective, concluding that it had fulfilled its remit and had in
place appropriate Terms of Reference.
The evaluation highlighted that the Committee was
particularly strong in establishing a Board which covers a
broad and relevant skill set and has made good progress in
establishing clear succession plans for the Executive
Management Team. Having further discussions around the
broader diversity challenge with a particular focus on the
Company’s diversity goals will remain a priority for the
coming year.
N I C K H E W S O N
Chairman of the Nomination Committee
14 September 2021
G OV E R N A N C E R E P O R T
PL AC E M A K I N G A N D SUS TA I N A B I LIT Y
CO M M IT TE E R E P O RT
“The Committee is focused on monitoring the impact of
the Company’s operations on the environment, its
communities and all employees and ensuring that the
Group’s initiatives are aligned with the three strategic
themes of: Developing Thriving Communities, Building
Responsibly and Valuing People.”
• progress made on sourcing alternative forms of low
carbon home heating as a substitute for traditional gas
boilers.
In October 2020, we welcomed the Group Communities
Director, Rose Sandell, as a Member of the Committee.
Rose Sandell is responsible for placemaking and the
sustainability framework, ensuring that these functions
align with the Group’s long-term objectives and targets. We
are delighted that she has joined the Committee as a full
Member.
CO M M IT TE E M E M B E R S H I P A N D M E E TI N G S
The Members of the Committee during the financial year
comprised myself as Chairman of the Committee, Nick
Hewson, Senior Independent Director, Matthew Pratt,
Group Chief Executive, Karen Jones, Group HR Director,
Rose Sandell, Group Communities Director and Will Heath,
Group Development Director. The Company Secretary acts
as Secretary to the Committee.
Will Heath stepped down as a Member of the Committee
on 31 October 2020 and was replaced by Rose Sandell
with effect from the same date.
The Committee met three times during the 2021 financial
year. For all meetings, papers were circulated sufficiently in
advance to allow proper consideration of all matters for
discussion. Details of the meeting attendance can be seen
in the table on page 124.
I am pleased to present the
Placemaking and Sustainability
Committee Report for the 52 weeks
ended 27 June 2021.
During 2021, the Committee
maintained its focus on developing
and monitoring the Company’s
approach to placemaking and
sustainability and monitoring the
impact of the Company’s operations
on the environment, its communities
and its colleagues.
During the year, the Company has
been focusing on its Environmental,
Social and Governance (”ESG”)
S I R M I C H A E L
LYO N S
Chairman of the
Placemaking and
Sustainability
Committee
improvement project and to assist with driving this project
forward, there have been changes in the leadership of
sustainability within the Group, which include the
appointment of the Group Communities Director, who also
joined as a member of the of the Executive Management
Team, and a new Head of Sustainability.
An external consultancy firm was engaged during the year
to undertake an ESG performance disclosure review,
considering how ESG performance is currently measured
and reported both internally and externally and including
recommendations for improvement. Following the review,
the Committee has been overseeing the following:
• introduction of the ESG Scorecard, found on pages 6 to
15, which comprises key metrics relevant to stakeholders
and which will help drive business performance,
supported by an external assurance statement to provide
independent assurance over the integrity of the data;
• creation of a new climate change working group to report
to the Committee, led by the Group Communities
Director and comprising senior representatives from
Sustainability, Finance, Governance, Technical,
Commercial and Construction, to develop the Company’s
climate change strategy, including the Redrow Zero
Carbon Roadmap, carbon reduction targets and climate
related financial disclosures; and
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PL AC E M A K I N G A N D SUS TA I N A B I LIT Y
CO M M IT TE E R E P O RT
TA B LE O F AT TE N DA N C E
Name
Sir Michael Lyons †
Nick Hewson †
Matthew Pratt
Karen Jones
Will Heath 1
Rose Sandell 2
Role
Chairman
Member
Member
Member
Member
Member
Attendance at Meetings
3/3
3/3
3/3
3/3
1/1
2/2
1
2
Will Heath stepped down from the Committee on 31 October 2020 and attended the meeting held between the beginning of the 2021
financial year and the date he stepped down from the Committee.
Rose Sandell was appointed as a Member of the Committee on 31 October 2020 and attended all meetings that were held between 31
October 2020 and the end of the 2021 financial year
† Member considered to be independent. Throughout the 2021 financial year, the Committee was made up of 40% independent Members.
R E S P O N S I B I LITI E S A N D TE R M S O F
R E F E R E N C E
The key responsibilities of the Committee are:
• to develop and monitor the Company’s approach to
sustainability and to review and approve the
sustainability targets proposed by management;
• to ensure that there is sufficient encouragement and
support given to Company employees so that they can
realise their capability to contribute to the social,
environment and economic health of our communities
and having regard to promoting and maintaining the
highest degree of physical, mental and social wellbeing
in the workplace;
• to assess the impact of the Company’s operations on the
environment and communities affected by its activities,
including the consideration of policies to enhance the
benefits of those activities and mitigate any negative
impact of those activities;
• to ensure that the Company continues to be an employer
of choice in the industry, valuing and respecting its
diversity, providing both advantage, and equality of
opportunity in recruitment, development, recognition
and reward;
• to monitor the Company’s approach to environmental
corporate social responsibility and community issues,
including environmental management systems, waste
and recycling management systems and energy and
carbon management;
• to develop and monitor the Company’s approach to
placemaking, including monitoring of the Group’s
adherence to the Redrow 8, being the placemaking
principles for designing sustainable communities;
• to ensure that the Company is continuing to create great
places to live and making social, economic and
environmental contributions to local areas by setting
well-designed homes and amenities within attractive
shared spaces;
• to review, in advance of each meeting, the sustainability
performance scorecard provided by the Sustainability
team, which assists the Committee to more clearly
evaluate the relationship between the sustainability
initiatives in place, or being considered, and the related
performance levels being achieved;
• to ensure that the Company supports its people on a
learning and development pathway to deliver high
quality products and services;
• to review the Company’s policies and reporting with
regard to personnel recruitment, development and
succession planning to ensure a sustainable and
engaged workforce;
• to review the Company’s involvement in the community,
and the Company’s policy on charitable donations and
activities;
• to monitor the Company’s developments in customer
engagement and service to ensure its values are upheld;
and
• to ensure that any initiatives and objectives are aligned
with the Company’s three strategic themes of:
Developing Thriving Communities, Building Responsibly
and Valuing People.
The Committee regularly reviews its Terms of Reference;
these were last reviewed in October 2020 and are
published on the Group’s website (redrowplc.co.uk).
M A I N AC TI V ITI E S D U R I N G TH E Y E A R
During the 52 weeks ended 27 June 2021, the principal activities of the Committee were as follows:
Strategic theme
Related principle activities of the Committee
• assessed the implications of the Planning White Paper on Design, Layout and
Placemaking, including the risks, opportunities and benefits following implementation
and considered both representations to be made and the Company’s strategy for
responding to a National Model Design Code;
• reviewed the National Model Design Code and supported the Group’s engagement
of a third party to undertake a survey of homeowners and Local Authorities;
• reviewed and approved the Landscape Manual;
• reviewed and approved the Plotting Manual, a practical guide to efficient plotting and
the delivery of great streets and places that complements the Landscape Manual to
be distributed to the Divisions; and
• received an update on the Biodiversity Net Gain Pilot Projects being undertaken
across the business.
• reviewed the results of HS&E Assurance Inspections and COVID-19 Compliance
Inspections on the Group’s sites and supported the implementation of the COVID-19
‘See Something/Say Something’ text number for residents/personnel to utilise if they
wish to report a COVID-19 concern;
• approved the COVID-19 Secure Risk Assessments, ensuring that they were aligned
with the latest Government guidance;
• supported the business in achieving a full re-accreditation to ISO14001, the
international standard for environmental management systems;
• reviewed the progress made on the Waste Minimisation Project and discussed the
‘Reduce the Rubble’ campaign;
• supported the Group in signing up for the Government’s scheme for Lateral Flow
Testing;
• received updates on the health and safety performance of the Group;
• supported the launch of RedHSE, being an online accident/incident reporting system
and HS&E audit platform allowing for the automation of significant HS&E data
collection and analysis to help focus and target initiatives in support of continuous
improvement;
• reviewed the introduction of the HS&E Internal Audits designed to check and
measure Divisional understanding and compliance of the Group’s existing HS&E
Management Systems by all functions;
• received an update on Construction matters, including the Construction Quality
Reviews, the usage of the Considerate Contractors Scheme, the NHBC RI/BRIs/
Awards and labour matters on site;
• reviewed the Group’s Customer Excellence Report together with the developments
in customer engagement mechanisms, including the new three-stage complaints
process, the extension of the My Redrow platform with a Homeowner Support area
and the opening of the new Customer Experience Suites;
• reviewed the progress made against the annual sustainability targets;
• received a report from the Group Communities Director and an external specialist
consultant setting out an ESG improvement project plan, following which an agreed
action plan to close the identified gaps and exploit opportunities was approved;
• assessed the progress made with the ESG improvement project and approved the
introduction of the ESG Scorecard as part of the ESG improvement project;
• reviewed the Group’s climate change strategy and short and medium work to be
undertaken; and
• reviewed progress made on sourcing alternative forms of low carbon home heating in
substitute for traditional gas boilers.
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PL AC E M A K I N G A N D SUS TA I N A B I LIT Y
CO M M IT TE E R E P O RT CO N T I N U E D
• reviewed the procedures surrounding the return to work of colleagues from furlough
and assessed the impact that the ‘stay at home’ measures had on colleagues;
• assessed the business actions taken in supporting the mental health and wellbeing
of colleagues throughout the COVID-19 pandemic and the engagement mechanisms
used to keep all colleagues informed;
• assessed the progress made in terms of mental health and wellbeing matters
following the signing up of the business to the Building Mental Health Charter in
October 2018;
• approved the introduction of ‘Engage Lite’, a condensed version of the Group’s
intranet which was available to all employees on furlough to allow colleagues access
to important business updates and health and wellbeing resources for themselves
and their families;
• received an update on the recruitment of colleagues through the Company’s New
Entrant Programmes and supported the business in signing up to the Talent Retention
Scheme set up by the Construction Leadership Council to investigate whether the
business can help any apprentices who had lost their jobs;
• supported the business in opening up the Redrow Construction Management degree
programme, in partnership with Liverpool John Moores University and Coleg
Cambria, to post A-Level school leavers, resulting in the successful candidates
joining various Redrow Divisions;
• considered the initiatives proposed to be implemented across the business as part of
Redrow 2025 and reviewed the feedback received from the colleague survey, senior
leadership interviews and colleague focus groups;
• explored the work undertaken by the Group to achieve the Living Wage Foundation
accreditation, which was received in February 2021, including the update of
subcontractor agreements to ensure that the Group’s supply chain also pay in
accordance with these rates;
• reviewed the Company’s Future Leader Programme;
• reviewed and approved the Equality, Diversity and Inclusion policy and training
programme, including an e-learning module for all employees;
• reviewed the work undertaken by Nicky Dulieu in her capacity as designated
Non-Executive Director for workforce engagement;
• considered progress and results of the Redrow 2025 initiative and approved the
introduction of a truly agile working approach, which allows colleagues to work from
wherever they are most efficient; and
• assessed the results of the 2021 INsight survey.
K E Y D I S C LO S U R E S
Within this Annual Report, there are a number of key
disclosures and policies which relate to the work and
scope of the Committee. The table below sets out where
key information relating to items falling within the remit of
this Committee is located within this report:
Subject
Page Reference
Environmental
ESG Scorecard
See page 6 of Strategic
Report
Greenhouse Gas
Emissions
See page 157 of Directors’
Report
Research and
Development
Resource Efficiency
Sustainable Materials
Biodiversity
Task Force on Climate –
related Disclosures
See page 163 of Directors’
Report
See page 158 of Directors’
Report
Social
Placemaking
Workforce Engagement
Employee Wellness
Diversity and Inclusion
Policy
Learning and
Development
Health, Safety and
Environmental
Charitable and Political
Donations
Human Rights
Supply Chain
Local Communities
Customers
Governance
Code of Conduct
Modern Slavery
See page 161 of Directors’
Report
Stakeholder Engagement
See page 84 of Strategic
Report
Policy References
Group Non-Financial
Information Statement
See page 79 of Strategic
Report
P E R F O R M A N C E E VA LUATI O N
During the year, a formal internal evaluation of the
Committee was carried out to build upon the progress
made by the 2019 evaluation which was externally
facilitated by Independent Audit, as well as the formal
internal evaluation undertaken last year. In line with
Provision 21 of the Code, the Board shall be engaging an
external evaluator to facilitate the evaluation of the
Committee in 2022.
After reviewing the 2020 self-evaluation report, a
questionnaire was created and tailored, taking into
consideration comments made in the previous year’s
assessment as well as the current market. The Members of
the Committee, as well as those people who regularly
attend the Committee meetings by invitation, were invited
to participate in the evaluation.
Following completion of the questionnaire, an anonymised
effectiveness report was compiled and presented to the
Members of the Committee. The findings of the evaluation
were discussed and the Committee was found to be
effective, concluding that it had fulfilled its remit and had in
place appropriate Terms of Reference.
The evaluation highlighted that the quality of discussion
and debate during Committee meetings was consistently
rated highly and it was agreed that the meetings were
chaired in a meaningful and considered way with a healthy
level of questioning and interrogation. The informal
discussions between meetings held between Members of
the Committee were deemed to be helpful. Increasing the
time and resources spent on expanding the focus on
environmental matters from an operational level to a
strategic level, ensuring that such matters are embedded
even further into our business model, shall remain a priority
for the Committee for the coming year.
S I R M I C H A E L LYO N S
Chairman of the Placemaking
and Sustainability Committee
14 September 2021
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D I R EC TO RS’ R E M U N E R ATI O N R E P O RT
“I am pleased to present the Directors’ Remuneration
Report for the 52 weeks ended 27 June 2021.”
N I C K Y
D U LI E U
Chair of the
Remuneration
Committee
I joined the Redrow Board and the Remuneration Committee in November 2019 and was appointed
as Chair of the Committee in November 2020. In line with the reporting requirements, this
remuneration report is split into three sections:
• Annual Statement – This annual statement sets out the key items considered by the
Remuneration Committee during a busy year as we undertook a review of the directors’
remuneration policy and considered pay across the workforce in the context of the pandemic. It
includes a summary of the changes proposed to the policy, the executive directors’ remuneration
outcomes for the 52 weeks ended 27 June 2021 and the context in which pay decisions were
made.
• Directors’ Remuneration Policy – As set out in last year’s remuneration report, here we set out
our intention of undertaking a comprehensive review in 2021 and presenting a new policy for
binding shareholder approval at the 2021 AGM. Having taken on board shareholder feedback
and concluded the review, this remuneration report contains the proposed directors'
remuneration policy.
• Annual Report on Remuneration – This section describes in further detail the pay outcomes for
the 52 weeks ended 27 June 2021 and the proposed implementation for the 2022 financial year.
It also includes CEO pay ratio reporting and other details including executives’ shareholding and
historic outcomes.
D I R E C TO R S’ R E M U N E R ATI O N P O LI CY A N D I NTE N D E D I M P LE M E NTATI O N
As a consequence of the COVID-19 pandemic impact on the business in March 2020 and a change to the Board’s
immediate priorities, the Remuneration Committee felt it appropriate to roll over the 2017 Remuneration Policy for a
further year, notifying shareholders that we would return with a new Remuneration Policy for shareholder approval in
2021. The 2020 rolled over policy was broadly unchanged save for additional commitments to align with good practice
including our approach to pension contributions. Last year, we also provided shareholders with details of our intended
salary progression for Matthew Pratt who took over as CEO on 1 July 2020, having previously been COO of the Group.
As a reminder, Matthew’s salary upon becoming CEO was set significantly below market levels at £540,000 with a view
to increasing his salary to £625,000 from 1 July 2021 subject to performance in his role over the 2021 financial year. The
Remuneration Committee was pleased to receive 95% and 99% support on the remuneration policy and remuneration
report respectively at last year’s AGM.
As a result of his strong performance in his role as CEO, the Committee has proceeded with increasing Matthew’s salary
to £625,000. The Committee believes this increase is appropriate, having considered Matthew’s exceptional
performance since taking on the role of CEO, demonstrated by:
• Redrow’s robust financial performance over the course of the year with full year turnover of £1.94bn and a total order
book of £1.43bn in line with June 2020. The business has ended the year with a strong cash position (a net cash
balance of £160m) and dividends were resumed at the half year.
• The industry leading COVID-19 safe working practices and communication which enabled a swift and safe return to
production.
• Successfully exiting the London assets following the strategic decision to scale our London operation back to just the
core Colindale development.
• Significant development of our digital interface with customers which has enabled the business to continue
successfully and safely trading throughout lockdown periods.
• The launch of Redrow 2025, an ambitious plan to ensure that sustainability is woven into the strategy and culture of
the business with a focus on innovation and new ways of working.
• The commitment to talent for the future with an increase in graduates and sponsored degree students, resulting in
over 330 trainees within the business.
Matthew’s salary reflects the completion of changes to the Board with John Tutte stepping down and Richard Akers
taking on the role of a traditional non-executive Chairman and ensures Matthew is rewarded fairly. Furthermore, our
commitment to developing talent and promoting from within requires the confidence and trust of our next generation of
leaders to develop at Redrow. Setting a competitive salary structure at the top helps to achieve this and ensures there is
room for promotion and salary progression further down the organisation.
Barbara Richmond’s base salary will be increased in line with the increase provided to the general workforce (3.1%).
Remuneration Policy changes
In undertaking the review of executive directors’ pay, the Remuneration Committee wished to ensure that our executive
team is rewarded appropriately for future delivery. The primary objectives of the new policy were to ensure that:
• executive directors are rewarded fairly and competitively for the delivery of strong performance,
• it takes into account the need to attract, retain and motivate executives of a high calibre and to provide an appropriate
balance between short and long term incentives,
• it considers a range of factors including competitiveness against our peers, market practice, the performance of the
Group, the calibre of the executive team and remuneration practices elsewhere in the Group, and
• incentive schemes are subject to stretching performance criteria with full vesting or pay-outs requiring exceptional
performance.
Annual bonus
Traditionally, the Remuneration Committee has taken a conservative approach to pay with modest levels of annual bonus
and LTIP opportunities compared with businesses in our sector and similarly sized FTSE companies. This has raised
concerns over our ability to attract and retain executive directors and other senior executives. The Committee,
consistent with the policy objectives set out above, wishes to address this but recognises the sensitivities associated
with increases to both incentive schemes at the same time. We are therefore proposing an increase to the 100% of base
salary bonus maximum which has been in place for some years.
It is proposed that the bonus opportunity is increased to 150% of salary. The Remuneration Committee believes a 150%
of salary maximum opportunity is commensurate with the size, scale and complexity of the Redrow business and ensures
high calibre executives are appropriately incentivised. Benchmarking data was used to inform the Committee’s
deliberations but only formed one part of a much broader consideration which considered relativities with the bonus
opportunities below the Board, the need to support talent management and succession planning activities and reflecting
the performance culture of the business.
While the vast majority of investors were comfortable with this proposal, the Committee reflected on the combined
impact on total pay of the increase to the CEO’s base salary and an increase in bonus opportunity and has decided to
apply a lower bonus opportunity of 125% of salary in 2022 and then increase this to 150% of salary for the remainder of
the three-year policy period.
The 2021/22 annual bonus will be based 50% on profit before tax, 20% on outlets opened, 12.5% on customer
satisfaction, 12.5% on health and safety and the remaining 5% on ESG. With an exceptionally strong order book, turnover
over the next few years will be dependent on a strong pipeline of outlets opening throughout 2021/22, hence the
decision to include outlets opening as a bonus measure. Customer satisfaction and health and safety continue to remain
very important objectives, while the new ESG measure will be based on developing and implementing a comprehensive
ESG framework. The LTIP quantum remains unchanged and the performance measures for the 2021/22 award will
continue to be earnings per share and return on capital employed, each with a 50% weighting.
Pension provision
The 2020 rollover policy provided a commitment for all executive directors to be aligned with the workforce pension
contribution rate from the start of the 2023/24 financial year. The 2021 policy brings forward the alignment date by six
months to 1 January 2023 in line with good practice in this area.
Post cessation shareholding guideline
In line with emerging market practice and investors’ guidelines, a post-cessation shareholding guideline will be
introduced as part of the new Directors’ Remuneration Policy. Executive Directors will be required to hold (unless
exceptional circumstances apply) the lower of (i) the value of their shareholding at cessation of employment and (ii) 200%
of salary, being the current in-employment guideline for a period of two years after ceasing employment. In calculating
an executive’s shareholding under this guideline, vesting from share awards granted after the approval of the new policy
will count but purchased shares will not. The Remuneration Committee believes this is appropriate to ensure executives
are not discouraged from purchasing Redrow shares.
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Shareholder engagement
The Committee is grateful for the feedback received from shareholders. This resulted in changes to our original
proposals and demonstrates we have given careful consideration to the views heard from shareholders and wider
stakeholders.
We believe the changes are appropriate, balanced and support our objectives of rewarding our executives fairly but not
excessively for the role being undertaken. The CEO’s proposed base salary positioning reflects his strong performance
and development in the role of CEO to date. The phased increase to bonus opportunity ensures a prudent approach to
pay is taken in the current financial year and ensures we remain competitive in the second and third years of our
Directors’ Remuneration Policy period, thereby helping to support internal succession planning.
A P P O I NTM E NT O F N O N - E X E C UTI V E C H A I R M A N
On 12 May we announced that Richard Akers would join Redrow as a Non-Executive director and Chair-designate on 1
June. Richard is working closely with John Tutte during a handover period and Richard will assume the role of Chair
following our annual results announcement on 15 September 2021, at which time John will stand down from the Board.
Richard’s fee for taking on the Chair role has been set at a lower rate of £250,000 p.a.
P E R F O R M A N C E O UTCO M E S F O R TH E Y E A R E N D E D J U N E 2 02 1
We began the new financial year with the country in lockdown and with the business having implemented a range of
strict social distancing measures as it implemented a phased return to construction. The new construction protocols put
in place, together with extended customer handover procedures, lengthened build times and impacted the pace of
output in the early weeks of the financial year. The prospects for the wider economy and its impact upon the new homes
market was very uncertain. In the context of the trading environment and expectations at the start of the year, stretching
annual bonus targets were set for PBT (50%), Group revenue (24%), Customer Service (14%) and health and safety
underpinned by COVID-19 compliance at our sites (12%).
The Group delivered a strong performance during the year having entered the year well-prepared to take advantage of
any bounce-back in demand following the first lockdown. The order book was at a record level and work in progress
carried forward was higher than normal. A stronger market than anticipated emerged from the lockdown driven by the
Stamp Duty holiday and, in the earlier part of the year, by keen demand from buyers who would be excluded from the
Help to Buy scheme after March 2021. Also, long-term social trends continued to underpin demand for our premium
homes and places. Customers attached additional value to our larger, mainly detached family homes designed to offer
flexible and modern living. COVID-19 also highlighted the growing desire of homeowners to live within our prime
locations, created with our own market-leading placemaking principles.
These factors contributed to performance exceeding expectations and has resulted in the bonus targets being met in
full. The Committee considered the outcome in relation to the wider stakeholder experience and was comfortable that
the result was warranted based on the strong financial and non-financial performance across a broader range of factors.
The Committee considered carefully the beneficial impact on our financial results arising from Government’s extension to
the Help to Buy loan scheme to 31 May 2021 and the Stamp Duty Land Tax holiday to 30 June 2021. The Committee
concluded that the benefit was not material to the bonus outcome and that no adjustment was necessary.
In contrast, the impact of the pandemic on our business resulted in the EPS and ROCE measures under the 2018 LTIP not
being met and these awards will therefore lapse in full. This is the second consecutive year of nil vesting under the LTIP.
Overall, the Remuneration Committee believes the outcomes under the bonus and LTIP are fair and reasonable with the
LTIP reflecting the shareholder experience and the annual bonus outcome aligned with a strong recovery and resilient
operational performance following the significant shock to the business. The Remuneration Committee did not apply any
discretion to adjust the incentive outcomes.
I hope that you have found this annual statement informative. I am grateful for the engagement and support provided by
our shareholders during these challenging times and I look forward to your support at the upcoming AGM. If you would
like to provide any feedback, please contact me via the Company Secretary.
N I C K Y D U LI E U
Chair of the Remuneration Committee
This report has been prepared in accordance with the UK Corporate Governance Code, the relevant provisions of the Listing Rules and Schedule
8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.
D I R E C TO R S’ R E M U N E R ATI O N P O LI CY
This part of the Directors’ Remuneration Report sets out the proposed Directors’ Remuneration Policy (“the Policy”) for
the Group and has been prepared in accordance with Schedule 8: The Large and Medium sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2008 (as amended) and the UK Listing Authority’s Listing Rules. This
new Policy will be put to a binding shareholder vote at the AGM on the 12 November 2021 and, subject to its approval,
will be formally effective from the date of approval.
Remuneration strategy
The Remuneration Committee designed the Policy with the following aims in mind:
• executive directors are rewarded fairly and competitively for the delivery of strong performance;
• it takes into account the need to attract, retain and motivate executives of a high calibre and to provide an appropriate
balance between short and long term incentives;
• it considers a range of factors including competitiveness against our peers, market practice, the performance of the
Group, the calibre of the executive team and remuneration practices elsewhere in the Group; and
• incentive schemes are subject to stretching performance criteria with full vesting or payouts requiring exceptional
performance.
In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in
the business and accordingly takes account of a number of factors when setting remuneration. This includes market
conditions, pay and benefits in relevant comparator organisations, terms and conditions of employment across the
Group, the Group’s risk appetite, the expectations of institutional shareholders and feedback from shareholders and
other stakeholders. Whilst the views of other stakeholders are considered as part of the process, the Committee
manages any potential conflicts of interest and retains the ultimate decision making authority.
This Policy has considered guidance provided by investors and proxy voting agencies. We have also taken into account
the principles and provisions of the 2018 UK Corporate Governance Code and in particular the following six factors:
Clarity
• The Policy has a clear aim; to incentivise and reward for the delivery of our strategy
• The Policy is well understood by our Directors and senior executives
• Each component of remuneration is clearly explained in the Policy table, including its purpose, how it is operated, the
maximum potential and any relevant performance measures
• Full disclosure of performance measures and assessments is provided for shareholders’ consideration
Simplicity
• The Policy reflects standard UK market practice, with the operation of an annual incentive and a single long-term share
plan, full details of which are set out in the Policy table
• All payments are in the form of cash or Redrow plc shares, there are no artificial structures used to deliver
remuneration
Risk
• The Policy and our approach to target setting seek to discourage any inappropriate risk-taking
• The Committee has the ability to use its discretion to override the formulaic outturns of the incentive plans if it is felt
appropriate
• Comprehensive malus and clawback provisions operate in both incentive plans, providing the ability to recover or
withhold payments if appropriate
Predictability
• Appropriate individual (and where necessary aggregate) limits are set out in the Policy and within the respective plan
rules so outcomes can be predicted
• The possible reward outcomes under different performance scenarios are shown in the “Illustration of Remuneration
Policy” section on page 139
• In operating the Policy, the Committee continually monitors the performance of in-flight incentive awards so that it is
well aware of potential outcomes
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D I R E C TO R S’ R E M U N E R ATI O N P O LI CY CO N T I N U E D
Proportionality
• The outcomes of our incentive plans are directly aligned to the delivery of our strategy
• Outcomes are assessed against multiple metrics to ensure performance is considered on a broad basis
• The Committee has the ability to use its discretion to override the formulaic outturns of the incentive plans if it is felt
appropriate
Alignment of culture
• A key focus of our Policy is to promote long-term sustainable performance which is reflective of the business culture
• Incentive outcomes rely on strong performance across a broad selection of measures which are important to our
stakeholders
Key changes to the Directors’ Remuneration Policy
The key changes from the Policy that was approved at the 2020 Annual General Meeting are:
• All executive directors will have a pension contribution rate aligned with the workforce by no later than 1 January 2023
(the previous Policy had an alignment date of 1 July 2023)
• The annual bonus opportunity for Executive Directors will be increased from 100% of salary to 150% of salary (although
a 125% of salary opportunity will apply in the first financial year of the policy (2021/22)).
• A post cessation shareholding guideline will be introduced requiring executive directors to hold the lower of the value
of their shareholding on cessation and the current in-employment guideline (200% of salary) for a period of 2 years
after ceasing employment.
Policy Table for Executive Directors
Component and link to strategy
Operation
Maximum
Performance framework
Executive Directors’ performance is a factor
considered when determining salaries.
No recovery or withholding provisions apply.
Base salary
To provide a market
competitive element of
fixed remuneration to
attract and retain leaders of
the required calibre to
deliver the strategy.
Salaries are determined by
the Committee taking into
account all relevant factors
such as: the size and
complexity of the
Company, the scope and
responsibilities of the role,
the skills and experience
of the individual and
performance in role.
The salary review for
executive directors takes a
range of factors into
consideration, including:
• Business performance
• Salary increases
awarded to the wider
employee base
• Skills and experience of
the individual and
development over time
• Scope of the individual’s
responsibilities
• An assessment of the
market positioning
considering UK
companies of similar
size and companies in
the sector.
Salaries are normally
reviewed annually, with
any changes normally
effective from the start of
the financial year.
Whilst there is no
prescribed maximum
salary, any increases will
take into account
prevailing market and
economic conditions and
the approach to pay
throughout the wider
workforce.
Base salary increases are
awarded at the discretion
of the Committee;
however, salary increases
will normally be no greater
than the general increase
awarded to the wider
workforce, in percentage
of salary terms.
The Committee has
discretion to award larger
increases where it
considers this appropriate,
such as to reflect (for
example):
• a significant change in
the size and complexity
of the Company;
• an increase in scope and
responsibility of the role,
or a change in role;
• an Executive Director
being moved to market
positioning over time;
and
• an Executive Director
falling below
competitive market
positioning.
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D I R E C TO R S’ R E M U N E R ATI O N P O LI CY CO N T I N U E D
Policy Table for Executive Directors (continued)
Component and link to strategy
Operation
Maximum
Performance framework
Benefits
To provide a market
competitive benefits
package to support the
Director in fulfilling their
role.
Pension
To provide a market
competitive element of
fixed remuneration for
retirement planning.
Benefits may include: a
company car (or equivalent
cash allowance), private
medical insurance,
permanent health
insurance, fixed term
group income protection
and a death in service
benefit, and where
appropriate any tax
payable thereon.
Executive Directors may
also participate in
all-employee share plans
on the same basis as other
employees.
The Committee has
discretion to include,
where it considers it
appropriate to do so, other
benefits to reflect specific
individual circumstances,
such as housing,
relocation, travel, or other
expatriate allowances.
Expenses incurred in
respect of the
performance of duties for
the Company may be
reimbursed or paid for by
the Company, including
any tax due on such
payments.
Individuals are eligible to
participate in the
Company’s Defined
Contribution (DC) pension
scheme or receive a
pension allowance cash
supplement in lieu.
Executive Directors who
are members of the
Company’s Defined
Benefit (DB) pension
scheme will continue to
receive benefits under the
terms of that scheme.
There will be no new
entrants or accrual of
future benefits under the
DB scheme.
N/A
Benefit provision, for which
there is no prescribed
monetary maximum, is set
at an appropriate level for
the specific nature and
location of the role. The
value of each benefit is
normally based upon the
cost to the Group.
Participation in all
employee share plans is
subject to statutory limits
in place at the time.
N/A
The maximum company
contribution (in respect of
a financial year) is 20% of
base salary. From 1
January 2023, all
executive directors will
have a pension
contribution rate of no
more than the workforce
rate (currently 7% of
salary).
Any new executive
directors appointed to the
Board will have a maximum
pension contribution equal
to the workforce rate
(currently 7% of salary).
Component and link to strategy
Operation
Maximum
Performance framework
The maximum annual
bonus opportunity is 150%
of salary for executive
directors. A 125% of salary
maximum will apply for the
first financial year of the
policy period (2021/2022)
and a 150% of salary limit
will apply to future years
under the Policy
Performance measures are determined by
the Committee each year and may vary to
ensure they promote and are aligned with the
Company’s business strategy.
Performance is assessed against key
financial and non-financial performance
measures linked to the delivery of the
strategy and shareholder value determined
each year by the Committee. The 2020/21
performance measures are set out on page
145.
The Committee retains discretion to adjust
the measures and/or weightings in future
years to reflect prevailing financial, strategic
and operational objectives of the business or
of the individual. However, a minimum of 50%
of the total will be based on key financial
measures.
No bonus will be payable for performance
below threshold levels set by the Committee.
Where a sliding scale of targets applies to
financial measures, typically up to 20% of that
element may be payable for threshold
performance.
The Committee has discretion to adjust the
level of payout if the outcome from a
formulaic assessment does not appropriately
reflect underlying business performance.
Annual Bonus
A variable pay opportunity
which motivates and
rewards annual financial
performance and delivery
of the strategy on an annual
basis.
Deferral aligns reward with
long term value of Redrow
shares and provides
retention.
Bonuses are determined
based on measures and
targets that are agreed by
the Committee. Bonus is
based on performance
over the relevant financial
year.
Half of any bonus earned
will be deferred into
Redrow shares which vest
after one year and two
years, subject to continued
employment.
Following exercise of a
vested deferred share
award, participants will be
entitled to receive an
amount equal to the
aggregate of any
dividends which they
would have been entitled
to receive as a shareholder
during the period between
the grant and satisfaction
of the award.
In exceptional
circumstances (for
example, in limited
situations where it may not
be possible to grant a
share award due to
technical reasons), the
Committee may determine
that deferral is in the form
of an equivalent cash
award (which in all other
respects mirrors the terms
of the deferred share
awards). It is not
anticipated that a cash
award will be made.
Malus and clawback
provisions apply to both
the cash and deferred
elements.
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D I R E C TO R S’ R E M U N E R ATI O N P O LI CY CO N T I N U E D
Policy Table for Executive Directors (continued)
Component and link to strategy
Operation
Maximum
Performance framework
The maximum award which
may be granted in respect
of a financial year will
normally not exceed 150%
of salary.
In exceptional
circumstances, the
Committee may make
awards of up to 200% of
salary.
The LTIP is based on performance measures
aligned to the creation of long-term
shareholder value, normally measured over a
performance period of at least three years.
The current performance measures are set
out on page 147.
For threshold performance, 20% of the
awards would normally vest.
The Committee retains discretion to include
additional or alternative financial
performance measures and/or adjust the
weightings in future years to reflect
prevailing strategic or operational objectives
of the business aligned with shareholder
value creation.
Performance conditions applicable to LTIP
awards may be amended if an event occurs
which cause the Committee to consider that
an amended performance condition would be
more appropriate and not materially less
difficult to satisfy.
Long Term Incentive Plan
(LTIP)
Designed to motivate and
reward long-term
performance and delivery
of the strategy and provide
alignment with Redrow
shareholders.
Awards are normally
granted to Executive
Directors annually in the
form of nil-cost options.
The Committee may also
determine that awards are
made in the form of
conditional share awards
or in exceptional
circumstances, as an
equivalent cash award (for
example, in limited
situations where it may not
be possible to grant a
share award due to
technical reasons) (which
in all other respects
mirrors the terms of the
LTIP).
Awards normally vest after
a period of three years
subject to the satisfaction
of performance conditions.
Vested awards will be
subject to an additional
holding period which
requires awards to be
retained for a period of
two years from the end of
the vesting period, except
for shares sold to pay
personal tax upon vesting/
exercise.
Awards may incorporate
the right to receive the
aggregate value of
dividends paid on vested
shares between the
vesting date and the date
on which the awards are
released following the
holding period, on such
basis as the Committee
may determine, which may
assume the reinvestment
of these dividends in
shares on a cumulative
basis.
Malus and clawback
provisions apply.
Component and link to strategy
Operation
Maximum
Performance framework
Share Owndership
Guidelines
Encourage Executive
Directors to build a
meaningful shareholding in
the Group so as to further
align their interests with
those of shareholders.
N/A
Executive Directors are
required to retain all share
awards vesting as shares
(after the sale of any
shares to settle tax due)
until they have reached
the required level of
holding.
Shares owned outright by
the Executive Director or a
connected person are
included. Shares or share
options which are subject
to a performance condition
are not included. Unvested
deferred bonus shares and
vested LTIP awards which
remain unexercised may
count towards the
in-employment guideline
on a net of tax basis.
During employment:
Executive Directors are
required to build and
maintain a shareholding
equivalent to at least 200%
of their base salary.
Post employment:
Executive Directors are
normally required to hold
shares at a level equal to
the lower of their
shareholding at cessation
and 200% of salary for two
years post cessation
(excluding shares
purchased with own funds
and any shares from share
plan awards granted
before the approval of this
policy).
The Committee reserves the right to make any remuneration payments and payments for loss of office (including
exercising any discretions available to it in connection with such payments) notwithstanding that they are not in line with
the Remuneration Policy set out above where the terms of the payment were agreed (i) before 10 November 2014 (the
date the Company’s first shareholder approved Remuneration Policy came into effect); (ii) before the Remuneration
Policy set out above came into effect, provided that the terms of the payment were consistent with the shareholder-
approved Remuneration Policy in force at the time they were agreed; or (iii) at a time when the relevant individual was
not a director of the Company and, in the opinion of the Committee, the payment was not in consideration for the
individual becoming a director of the Company. For these purposes “payments” includes the Committee agreeing awards
of variable remuneration and, in relation to an award over shares, the terms of the payment are “agreed” at the time the
award is granted. The Committee may make minor amendments to the Remuneration Policy (for regulatory, exchange
control, tax or administrative purposes or to take account of a change in legislation) without obtaining shareholder
approval.
Choice of performance measures and target setting
For the annual bonus and LTIP, performance measures are chosen which help to drive and reward the achievement of
the Group’s strategy and also provide alignment between employees and shareholders. The Committee reviews
measures each year to ensure they remain appropriate and reflect the future strategic direction of the Group. Targets for
each performance measure are set by the Committee with reference to internal plans and external expectations.
Performance is typically measured on a ‘sliding scale’ so that incentive payouts increase pro-rata for levels of
performance in between the threshold and maximum performance targets.
Consideration of employment conditions elsewhere in the Group
The principles applied to the remuneration of Executive Directors are essentially the same as those for the Company.
The difference between pay for Executive Directors and employees is that for Executive Directors the variable pay
element forms a greater proportion of the overall package and the total remuneration opportunity is higher to reflect the
increased responsibility of the role. While remuneration practices vary across the full employee population, they are
based on the same broad principles which underpin the policy for Executive Directors set out above.
The Remuneration Committee is regularly briefed on pay and employment conditions across the Group and takes this
into account when setting directors’ remuneration.
Employees’ salary levels are determined by taking into account prevailing industry rates and the Remuneration
Committee takes into account the workforce salary increase when determining the increases that should apply to
Executive Directors’ salaries.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 138
Redrow plc Annual Report 2021
139
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
D I R E C TO R S’ R E M U N E R ATI O N P O LI CY CO N T I N U E D
Consideration of employment conditions elsewhere in the Group (continued)
The Workforce Engagement group provides feedback to the nominated non-executive director for workforce
engagement on employment conditions and pay.
The Company operates a SAYE scheme available to all employees with the ability to become shareholders in the
Company and thereby providing the ability to comment on executive directors’ pay as with all other shareholders.
Employees can raise issues through the divisional engagement groups and the national Workforce Engagement group, at
performance appraisals and can write directly to the nominated non-executive director by email.
When setting the Remuneration Policy for Executive Directors, the Committee has regard to the pay and employment
conditions of employees within the Company. The Committee did not consult directly with employees when formulating
the Remuneration Policy for Executive Directors. The Committee considers salary increases within the business but does
not formally consider any other comparison metric.
Consideration of shareholder views
The Committee engaged with all major independent shareholders and shareholder advisory groups, when developing
this Remuneration Policy. Views expressed during this engagement were taken into account by the Committee and
helped shape the final proposals. The Committee subsequently informed all of those consulted of the revised changes
as a result of the consultation and the final proposed Policy. The Committee is grateful for the feedback received.
Clawback
For awards under the annual bonus plan (including deferred share awards) and awards made since the introduction of
the 2014 LTIP, the Committee has discretion to clawback awards in the event of a material misstatement of the
Company’s audited financial results or employee misconduct. Awards made from 2019/20, included additional triggers
relating to an error in the calculation of a performance condition and circumstances which the Committee considers
sufficient to have, or had potential to have, caused reputational damage will also apply.
In such circumstances, at any time prior to the fifth anniversary of the payment of any cash bonus or vesting of a deferred
bonus/ LTIP award, the Committee has discretion to:
• reduce, cancel or impose further conditions on outstanding deferred bonus/LTIP awards; or
• require the participant to repay (in cash or shares) some or all of the value delivered from a deferred bonus/LTIP
awards; and/or
• require the participant to repay some or all of any cash bonus received.
For deferred bonus plan awards, in the event of a material misstatement of the Company’s audited financial results or
employee misconduct, any unexercised awards will lapse immediately and the participant will forfeit any shares
previously acquired under awards made under that plan.
Corporate events
Unvested awards under the deferred bonus plan and LTIP will normally vest early in the event of a takeover or winding-
up of the Company and, in the case of the deferred bonus plan, if the Company goes into administration or a voluntary
arrangement is proposed with its creditors. In these circumstances, deferred bonus awards vest in full and LTIP awards
vest taking into account the relevant performance conditions and, unless the Committee determines otherwise, time pro
rating to reflect the proportion of the performance period that has elapsed. Awards may also be rolled over for
equivalent awards in a different company. If the Company is or is likely to be affected by a demerger, special dividend,
delisting or other event which in the Committee’s opinion, may affect the current or future value of the Company’s
shares, the Committee may allow some or all of the awards to vest. The extent to which LTIP awards vest in these
circumstances will be calculated on the same basis as set out above for a takeover. The terms of awards may be (a) in the
event of any variation of the Company’s share capital, delisting, special dividend or distribution, demerger or other event
which may in the Committee’s opinion, affect the current or future value of the Company’s shares, adjusted or (b)
amended in accordance with the plan rules.
Illustration of remuneration policy
The charts below illustrate the potential value of the remuneration packages for the Executive Directors under the
following scenarios (no share price growth is assumed):
• Minimum – reflects fixed pay only (base salary and pension contributions as at 1 July 2021 and benefits included using
the disclosed values for the year ended 27 June 2021;
• Target – reflects fixed pay, target bonus (50% of maximum) and LTIP awards vesting at threshold (i.e. 20% of salary);
and
• Maximum – reflects fixed pay, maximum bonus (125% of salary) and maximum LTIP awards (being 150% of salary for the
CEO and FD).
• Maximum plus share price growth – as for Maximum above, but with the value of 50% share price growth included
within the LTIP element
I LLU S TR ATI O N S O F A P P LI C ATI O N O F R E M U N E R ATI O N P O LI CY
£3,500
£3,000
£2,500
£2,000
0
0
0
£
'
£1,500
£1,000
500
£0
£2,882
16%
£2,414
39%
33%
16%
£695
£1,211
11%
32%
32%
27%
£1,817
16%
£1,533
37%
31%
31%
26%
£803
9%
30%
£490
100%
57%
29%
24%
100%
61%
32%
27%
Minimum
On-target
Maximum
Max with
growth
Minimum
On-target
Maximum
Max with
growth
CEO
CFO
Total Fixed Remuneration
Annual Bonus
LTIP
Share Price Growth
Approach to remuneration for recruitment of a new executive director
On the appointment of any new Executive Director, the Committee would seek to offer a remuneration package which
can secure an individual with the necessary skills and experience to lead the business and deliver the strategy.
Executive Directors would be appointed within the remuneration framework set out in the Policy Table for Executive
Directors. Salaries would typically be set at an appropriately market competitive level to reflect skills and experience,
although, if appropriate, the Committee may set salaries towards the lower end of the market range to allow future salary
progression to reflect performance and development in the role. A higher salary than the departing director’s salary may
be appropriate in certain circumstances, particularly where the experience and calibre of the individual warrants such a
positioning. In accordance with the Policy Table, the Committee also has discretion to include other benefits such as
housing or relocation benefits, if relevant to reflect specific individual circumstances. The maximum level of variable
remuneration which may be awarded (excluding any compensatory awards referred to below) would be as set out in the
Policy Table.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 140
Redrow plc Annual Report 2021
141
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
D I R E C TO R S’ R E M U N E R ATI O N P O LI CY CO N T I N U E D
Approach to remuneration for recruitment of a new executive director (continued)
Depending on the timing and responsibilities of the appointment, it may be necessary to set different annual bonus/LTIP
performance measures and targets for initial awards from those applicable to other Executive Directors.
Where an individual forfeits outstanding incentive awards with a previous employer, the Committee may offer
compensatory awards to facilitate recruitment. These awards would be in such form as the Committee considers
appropriate, taking into account all relevant factors including the form, expected value, anticipated vesting and timing of
the forfeited awards. The value of any compensatory awards would be no higher, in the opinion of the Committee, than
the value forfeited.
Any share awards referred to in this section will be granted as far as possible under the Company’s existing share plans.
Share awards may be granted under the Company’s LTIP in excess of the limits set out in the Policy Table above to
provide compensatory buyout awards only (which may be subject to any performance conditions the Committee
considers appropriate), in accordance with the terms above. If necessary, awards may be granted outside of these plans
as currently permitted under the Listing Rules, but within the limits set out in this section.
Any incentive awards granted to employees prior to their promotion to the Board will be permitted to vest on their
original terms.
The remuneration package for a newly appointed Non-Executive Director would normally be in line with the structure set
out in the Policy Table for Non-Executive Directors.
Service contracts
The service agreements of the Executive Directors are rolling contracts which were entered into on the dates shown in
the table below:
Name
Contract date
Notice period from the Director
Notice period from the Company
Barbara Richmond
18/01/10
Matthew Pratt
01/07/20
6 months
12 months
12 months
12 months
The service agreements provide for formal notice to be served to terminate the agreement, by either the Company or
the Executive Director, with the required period of notice shown in the table. The agreements and letters of appointment
do not include any provisions for pre-determined compensation for early termination. The Committee may terminate
service agreements immediately by making a payment in lieu of notice consisting of base salary, benefits and pension
for the unexpired period of notice. At the discretion of the Committee, this payment may be made as instalments over the
period, subject to a duty to mitigate, or as a lump sum.
For appointments after 1 July 2017, it is the Committee’s policy that notice periods will normally be 6 months from both
the Director and the Company initially and thereafter, 12 months from both the Director and the Company, and that
payments in lieu of notice will comprise no more than base salary, benefits and pension only over the unexpired period
of notice. This policy applies to Matthew Pratt who was appointed to the Board on 1 April 2019.
The Non-Executive Directors’ terms of appointment are detailed in formal letters of appointment as shown in the table
below. Each appointment is for a fixed initial period of three years although this term is terminable upon either party
giving three months’ notice.
Name
Position
Date of initial appointment
Current date of appointment
Nick Hewson
Non-Executive
Sir Michael Lyons
Non-Executive
Nicky Dulieu
Non-Executive
Richard Akers
Non-Executive
John Tutte 1
Non-Executive Chairman
01/12/12
06/01/15
06/11/19
01/06/21
06/11/20
01/12/18
06/01/21
06/11/19
01/06/21
06/11/20
1
John Tutte was appointed Non-Executive Chairman on an interim basis and will step down after the Company’s 2021 Full Year Results on 15th
September 2021, at which time Richard Akers will assume the role.
Copies of the Directors’ service contracts and letters of appointment are available for inspection at the Company’s
registered office.
Policy on payments following Directors’ termination of service
On termination of a Director’s contract, the Committee’s objective is to agree an outcome which is in the best interests of
the Company and its shareholders, taking into account the specific circumstances and performance of the individual, as
well as any relevant contractual obligations and incentive plan rules.
As described in the section above, contractual payments in lieu of notice would be limited to salary and contractual
benefits and may be made in instalments subject to mitigation.
The Committee has discretion to make a payment under the annual bonus in respect of the year of leaving where an
individual is designated a “good leaver” (as described below). In such circumstances, the maximum bonus opportunity
would normally be reduced pro-rata to reflect the portion of the year served. Any payment would remain subject to
performance against the original targets and, if practicable, would be assessed and paid (in cash) as part of the normal
year end assessment process. Outstanding awards under the deferred bonus plan and the LTIP would be treated in
accordance with the relevant plan rules. Under these rules, if the participant leaves as a “good leaver”, then the
treatment of outstanding awards will be as follows:
• Deferred bonus: Nil-cost options will be exercisable for a period of six months following the date of cessation. Options
will be exercisable in full unless (for awards made in respect of 2015 and subsequent financial years other than in the
case of death) the Committee may exercise discretion to reduce the awards pro-rata to reflect the extent to which the
vesting period had elapsed at the date of cessation; and
• LTIP: Awards will normally continue to the original vesting date although the Committee may determine that awards
vest following cessation. Where a holding period applies, awards will normally continue to be subject to that holding
period following cessation. Unless the Committee determines otherwise, awards will be reduced pro-rata to reflect the
extent to which the performance period has elapsed at the date of cessation and time served as an executive. The
Committee will decide the extent to which the award vests in these circumstances. If an individual dies, their LTIP
awards will normally vest shortly following their death and their LTIP awards will only be time pro-rated if the
Committee considers it appropriate.
Circumstances in which a participant will be considered a “good leaver” are: death, ill-health, injury, disability,
redundancy, retirement or the sale of the individual’s employing company or business outside of the Group.
Where an individual leaves the Company for any other reason, deferred bonus and unvested LTIP awards will lapse.
The Committee retains discretion to make additional exit payments where such payments are made in good faith in
discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement
or compromise of any claim arising in connection with the termination of a director’s office or employment or for any fees
for outplacement assistance and/or the director’s legal and/or professional advice fees in connection with their cessation
of office or employment. The details and rationale for any such payments would be disclosed in the Annual
Remuneration Report.
Non-Executive Director Fees
Component
Approach of the Company
Non-
Executive
fees
Fees are determined by the Board excluding the Non-Executive Directors. The fee encompasses a basic fee and
supplementary fees for serving on a Board Committee or acting as Senior Independent Director. It may also include
supplementary fees for undertaking duties or making a time commitment to Company business beyond the Non-
Executive Director’s normal role.
Expenses incurred in respect of the performance of duties for the Company may be reimbursed or paid for by the
Company, including any tax due on such payments.
The fees payable to the Non-Executive Directors will not exceed the limit set out in the Company’s Articles of
Association and will be set at a level which reflects skills, experience, time commitment and appropriate market data.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 142
Redrow plc Annual Report 2021
143
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
A N N UA L R E P O R T O N R E M U N E R ATI O N
I M P LE M E NTATI O N O F P O LI CY F O R 2 022
This section summarises how the Committee intends to operate the Remuneration Policy for the year ending 30 June
2022.
Salary
In last year’s report we set out the approach to progressing Matthew’ Pratt’s base salary in his role as Chief Executive.
Matthew took up the role of Chief Executive on 1 July 2020 and following an extensive consultation with shareholders,
the Committee decided to phase Matthew’s base salary over time to enable him to gain experience and develop into the
role. Accordingly, Matthew’s salary for FY2021 was set at £540,000 with a view to increasing his salary to £625,000 from
1 July 2021 subject to performance in his role.
Matthew’s performance since taking on the role of CEO has been exceptional, demonstrated by:
• Robust financial performance in financial year 2021, delivering a strong cash position which has enabled a resumption
of dividends.
• The industry leading COVID-19 safe working practices and communication which enabled a swift and safe return to
production.
• Successfully exiting the London assets following the strategic decision to scale our London operation back to just the
core Colindale development.
• Significant development of our digital interface with customers which has enabled the business to continue
successfully and safely trading throughout lockdown periods.
• The launch of Redrow 2025, an ambitious plan to ensure that sustainability is woven into the strategy and culture of
the business with a focus on innovation and new ways of working.
• The commitment to talent for the future with an increase in graduates and sponsored degree students, resulting in 330
trainees within the business.
Therefore, the Committee has determined that Matthew’s salary should be increased to £625,000 and is satisfied that
this salary reflects the level of responsibility and scope of the role in a challenging market and in the context of the
stated strategy to rebuild and grow. The Remuneration Committee also took into account the following factors in making
its decision:
• Our commitment to developing talent and promoting from within requires the confidence and trust of our next
generation of leaders to develop at Redrow. Setting a competitive salary structure at the top helps to achieve this and
ensures there is room for promotion and salary progression further down the organisation.
• The £625,000 salary to take effect in July 2021 represents a 2.5% increase on John Tutte’s Executive Chairman salary
which was determined as at July 2019. While benchmarking is not a driver of the increase, the Committee took comfort
from the fact that the proposed salary sits comfortably against comparable home construction and FTSE 250
companies; and
• The need to ensure Matthew is rewarded fairly and remains motivated and incentivised to fulfil the Group’s ambitions
to rebuild and grow the business.
Barbara Richmond’s salary will be increased by 3.1% in line with the wider workforce increase provided on 1 July 2021.
The general workforce also benefitted from an interim increase of 2.5% made in January 2021.
The salaries for 2021 are effective from 1 July 2021 and are as follows:
£’000
Barbara Richmond
Matthew Pratt
Pension
1 July
2021
381.5
625
1 July
2020
370
540
Matthew Pratt’s pension contribution will be 7% of salary which is in line with the workforce contribution rate and Barbara
Richmond’s will be 20% of salary. As set out in the Policy, all executive directors’ will have workforce aligned pension
contribution rates from 1 January 2023. This alignment date was brought forward from 1 July 2023 following feedback
received from shareholders during the consultation on changes to the Policy.
Annual bonus
Subject to approval of the policy by shareholders, the annual bonus opportunity for executive directors will be 125% of
salary for 2021/22 (within an overall Policy limit of 150% of salary). The decision to apply a lower bonus opportunity for
FY2022 takes into account feedback received from a very small minority of shareholders who wished to see phasing of
the bonus opportunity increase at a time when the CEO’s salary is being increased.
Consistent with last year, 50% of the bonus will be based on PBT targets. Customer service remains of paramount
importance as does the health and safety of our employees and subcontractors. Accordingly, 12.5% of the bonus will be
based each on customer service targets and health and safety.
With an exceptionally strong order book, turnover over the next few years will be dependent on a strong pipeline of
outlets opening throughout 2021/22, and therefore outlets opening will determine 20% of the annual bonus. The final 5%
will be based on developing and implementing a comprehensive ESG framework.
Measures for 2022
Profit Before Tax
Outlets opened
Customer Service
Health & Safety
ESG
50%
20%
12.5%
12.5%
5%
These measures are felt to be appropriately aligned with our current priorities. A sliding scale of targets will apply for
each measure except ESG with 20% of maximum payable for achieving a demanding threshold target. The ESG metric
will involve a qualitative assessment. It is the current intention that the targets will be disclosed in the FY2022
Remuneration Report provided the Committee is comfortable they are no longer commercially sensitive at the time.
LTIP awards to be granted during FY2022
It is expected that LTIP awards in the 2022 financial year will be made at the level of 150% of salary to Matthew Pratt and
Barbara Richmond.
Consistent with previous years, half of the awards will be based on an EPS measure and half on ROCE applying to
performance in FY2024. The following targets will apply:
Threshold (13.3% vesting)
Target (40% vesting)
Maximum (100% vesting)
EPS
90.0p
95.1p
103.0p
ROCE
22%
23%
25%
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 144
Redrow plc Annual Report 2021
145
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
The Remuneration Committee believes the targets are stretching and delivering EPS of 103p is in line with our pre-
pandemic three-year aspirations (being the stretch figure of 115p applying to the 2019 LTIP, noting that corporation tax
has increased from 17% to 25%). The Committee will adjust the targets to ensure they are no more or less challenging in
the event of changes to the corporation tax rate for FY2024.
The ROCE targets have been based on our guidance level of land creditors and the Committee will consider, at the time
of vesting, whether it is appropriate to apply any downwards discretion in the event that land creditors are materially
ahead of the Company’s guidance.
In line with our Policy, these awards will be subject to an additional two-year post-vesting holding period.
Non-Executive Director Fees
The Board excluding the non-executive directors conducted an annual review of non-executive director fees and
awarded a 2.5% increase from 1 July 2021 meaning the base fee for a Non-Executive Director will increase from £55,000
pa to £56,375 pa. This increase will not be applied to John Tutte or Richard Akers.
The Company pays an additional fee of £10k p.a. to Committee Chairs and an additional fee of £10k p.a. to the Senior
Independent Director.
John Tutte will step down as non-executive chairman at the AGM and his fee will remain at £300,000 until that date.
Richard Akers will become the new chairman and his fee has been set at £250,000 p.a.
O UTCO M E S I N R E S P E C T O F 2 02 1
The tables below set out the remuneration for the Directors in respect of 2021. Further discussion of each of the
components is set out on the pages which follow. Where indicated, these disclosures have been audited.
S I N G LE TOTA L F I G U R E O F R E M U N E R ATI O N TA B LE ( AU D ITE D)
The remuneration of the Executive Directors in respect of 2021 is shown in the table below (with the prior year
comparative):
SALARY (ii)
BENEFITS (iv)
PENSIONS (V)
TOTAL FIXED
REMUNERATION
BONUS (vi)
LTIP (vii)
TOTAL VARIABLE
REMUNERATION
TOTAL
£’000
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Matthew Pratt (i)
540
399
Barbara Richmond
370
360
John Tutte (iii)
169
580
23
35
1
22
35
16
38
74
34
40
72
116
601
479
204
461
540
467
370
712
–
–
–
–
–
–
–
–
–
–
540
370
–
– 1,141
–
–
849
204
461
467
712
(i) Matthew Pratt was appointed to Chief Operating Officer on 1 April 2019 and became Group Chief Executive on 1 July 2020.
(ii)
Executive Directors took a voluntary 20% salary and pension deduction from 1 April 2020 to 18 May 2020 with John Tutte maintaining the
deduction throughout his remaining period as Executive Chairman.
(iii) John Tutte served as Executive Chairman from 1 April 2019 to 6 November 2020 when he became Non-Executive Chairman.
(iv) Benefits include a fully expensed company car (or equivalent cash allowance) and private health insurance.
(v) Pension includes the value of the cash allowance paid to John Tutte, Barbara Richmond and Matthew Pratt in respect of the relevant year.
(vi)
Annual bonus represents the full value of the bonus awarded in respect of the relevant financial year. Details of outcomes against the
performance targets are set out below.
(vii)
LTIP represents the value of the LTIP award which vests in respect of the 3-year performance period ending in the relevant financial year.
The award made in November 2017 lapsed as the vesting threshold was not met and the awards granted in September 2018 which are
capable of vesting in September 2021 will also lapse due to the vesting threshold not being reached.
The fees of the Non-Executive Directors in respect of 2021 are shown in the table below (with the prior year
comparative).
£’000
John Tutte (i)
Nick Hewson
Sir Michael Lyons
Nicky Dulieu (ii)
Vanda Murray (iii)
Richard Akers (iv)
FEES
2021
196
75
65
62
23
5
2020
–
73
63
35
63
–
(i)
John Tutte served as Executive Chairman from 1 April 2019 to 6 November 2020 when he became Non-Executive Chairman.
(ii) Nicky Dulieu was appointed as Non-Executive Director on 6 November 2019.
(iii) Vanda Murray stepped down from the Board on 6 November 2020.
(iv) Richard Akers joined the Board as a Non-Executive Director on 1 June 2021 and will become Non-Executive Chairman on 15 September 2021.
2 02 1 A N N UA L B O N U S
The maximum bonus opportunity for the Executive Directors during 2021 was 100% of salary. This was based on the
achievement of stretching targets under a balanced scorecard of performance measures. The bonus measures and
targets were determined after the impact of the pandemic was first felt, thereby reflecting the challenging environment
in place at the time. The following measures and targets applied:
PBT (i)
Turnover (ii)
Customer recommend score
Accident rate
Total
% of bonus
opportunity
50%
24%
14%
12%
100%
(i)
PBT is underlying, pre-exceptionals
(ii) This excludes land sales
Threshold payout
Maximum payout
£216m
£1,550m
90%
£240m
£1,700m
92.0%
Homes built/accidents >16
Actual 2021
performance
£314m
£1,902m
92.6%
19.5
Payout achieved (% of
total bonus
opportunity)
50%
24%
14%
12%
100%
The financial bonus targets were set in the context of the pandemic and the annual outlook at the time. After targets
were set, the Government extended the Help to Buy loan scheme to 31 May 2021 and the Stamp Duty Land Tax holiday to
30 June 2021. However, the Committee concluded that the benefit was not material to the outcome and that no
adjustment was necessary.
The accident rate was positively affected by the high volume of completions at our Colindale development. The
Committee considered this and concluded there was no requirement to adjust the outcome as the target would have
been achieved excluding the Colindale safety record.
The strong and resilient financial, operational and safety performance of the Group has resulted in the bonus targets
being met in full. The Committee considered the outcome in relation to the wider stakeholder experience and was
comfortable that the result was warranted based on the strong financial and non-financial performance across a broader
range of factors.
In line with the Policy, 50% of the bonus will be deferred in shares and these will vest after 12 and 24 months.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 146
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147
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
Long Term Incentive Plan (LTIP)
The LTIP is designed to motivate and reward long-term performance and delivery of the strategy and provide alignment
with Redrow shareholders.
The sections below summarise details of the 2018 LTIP awards which were capable of vesting in 2021 and those awards
which were granted during the 2021 financial year.
LTIP awards vesting in respect of 2021
The LTIP awards granted in September 2018 were based on performance over the three year performance period ending
27 June 2021. Based on performance against the EPS and ROCE targets set when the award was granted, summarised in
the table following, neither of the thresholds were met and therefore these awards will lapse on 10 September 2021.
Award vesting level as a % of share options granted (for each component)
EPS for 2021*
ROCE for 2021
Nil
6.67%
20%
50%
Vesting between the points above is on a sliding scale basis
Actual performance
Vesting (% of total award)
Below 107.59p
Below 25.8%
107.59p
112.72p
25.8%
26.8%
117.84p or above
27.8% or above
73.7p
nil%
18.5%
nil%
*
As outlined in the Cash Return Circular published in 2019 an upwards adjustment of the EPS performance target was necessary to neutralise
the effect of the return of cash and share consolidation which took place in 2019.
The below threshold performance reflects the impact of the pandemic on the financial year. As no shares vested the
value of these awards is nil and has been included in the 2021 LTIP column of the Single Total Figure of Remuneration
table on page 144.
S C H E M E I NTE R E S T S AWA R D E D D U R I N G 2 02 1 ( AU D ITE D)
The following table sets out details of LTIP awards to Executive Directors during the 2021 financial year.
Executive Director
Matthew Pratt
Barbara Richmond
Number of awards
granted
Basis of award
199,852
150% of salary
136,936
150% of salary
Face
value 1
£810k
£555k
Threshold
vesting (% of
maximum)
Vesting date
13.3% 23 September 2023
13.3% 23 September 2023
1
The face value has been calculated using the average share price used to determine the number of shares awarded, being 405.3p (the
average, over the three days to the date of grant).
Awards to Matthew Pratt and Barbara Richmond are made in the form of nil-cost options.
As outlined in last year’s report, setting meaningful LTIP targets at the time of granting the 2020 LTIP awards in
September 2020 was challenging due to the uncertainty surrounding COVID-19 and the economic outlook. It was
therefore agreed that the measures and targets applicable to those awards would be set within six months of grant. On
21 December 2020, the Committee announced the targets that apply to these awards:
Award vesting level as a % of share options granted (for each component)
Nil
6.67%
20%
50%
EPS for 2023
ROCE for 2023
Below 73.0p
Below 17.0%
73.0p
77.0p
17.0%
18.0%
86.0p or above 20.0% or above
Vesting between the points above is on a sliding scale basis. The target range was set in light of the business outlook at
the time including internal forecasts, external analyst consensus and a broader view of the macroeconomic
environment.
The Remuneration Committee has discretion to adjust the number of shares vesting from the award if it considers that
the vesting outcome is not sufficiently reflective of the underlying performance of the Company and to the extent the
Committee believes there have been windfall gains.
There was no bonus paid in respect of FY2020 and therefore no Deferred Bonus Plan awards were granted during the
year.
S H A R E H O LD I N G G U I D E LI N E S A N D S H A R E I NTE R E S T S
Under our shareholding guidelines, Executive Directors are expected to build and retain a shareholding in the Group at
least equivalent to 200% of base salary. Until the shareholding guideline has been met Executives will be required to
retain all deferred bonus shares and LTIP shares on a net of tax basis. As shown in the table below, Barbara Richmond
meets this guideline.
As noted above, Matthew is expected to retain all Deferred Bonus Plan and LTIP shares on a net of tax basis until the
shareholding guideline is met. Non-Executive Directors are not subject to shareholding guidelines.
S TATE M E NT O F S H A R E H O LD I N G A N D S C H E M E I NTE R E S T S ( AU D ITE D)
The following table sets out the shareholding (including connected persons) of the Directors in the Company as at 27
June 2021 and current interests in long-term incentives.
Number of shares
beneficially held
at 27 June 2021
Shareholding
as % of salary
Guideline met?
Executive Directors
Matthew Pratt
Barbara Richmond
Non-Executive Directors
John Tutte
Nick Hewson
Sir Michael Lyons
Nicky Dulieu
Richard Akers
97%
977%
No*
Yes
90,792
557,711
417,602
19,523
5,502
–
30,000
Shareholding as a percentage of salary is calculated using the shareholding and base salary as at 1 July 2021 and the
average share price for the final quarter of the 52 weeks ended 27 June 2021.
* Matthew Pratt is building his shareholding in line with the Remuneration Policy and his shareholding is 97% of salary as at 27 June 2021.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 148
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149
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
The table below provides details of the interests
Awards
held at
29 June
2020
Share
Price on
Grant
£
Grant
Date
Award
Vested
Awards
granted in
year
Awards
lapsed in
year
Awards
Exercised
in year
Awards
held at
27 June
2021
Exercise
Price
£
From
To
Matthew Pratt
SAYE 2017
SAYE 2020
LTIP 2017
LTIP 2018
LTIP 2019
LTIP 2020
3,673
30/10/17
–
09/11/20
23,168
15/11/17
23,951
10/09/18
103,448
11/09/19
–
23/09/20
6.12
4.72
5.935
5.887
5.945
4.053
3,673
–
–
–
–
–
DEF BONUS 2018
13,929
10/09/18
5.887
13,929
DEF BONUS 2019
25,471
11/09/19
5.945
12,735
–
4,768
–
–
–
199,852
–
–
–
–
(23,168)
–
–
–
–
–
(3,673)
–
4.90
01/01/21
01/07/21
4,768
3.78
01/01/24
01/07/24
–
23,951
103,448
199,852
(13,929)
–
(12,735)
12,736
–
–
–
15/11/20
15/11/27
10/09/21
10/09/28
11/09/22
11/09/29
– 23/09/23 23/09/30
–
–
10/09/19 10/09/28
11/09/20
11/09/29
193,640
30,337 204,620
(23,168)
(30,337) 344,755
Barbara Richmond
SAYE 2017
SAYE 2019
SAYE 2020
LTIP 2017
LTIP 2018
LTIP 2019
LTIP 2020
1,836
30/10/17
1,821
28/10/19
–
09/11/20
83,404
15/11/17
86,122
10/09/18
93,356
11/09/19
–
23/09/20
DEF BONUS 2018
13,531
10/09/18
DEF BONUS 2019
24,163
11/09/19
6.12
6.18
4.72
5.935
5.887
5.945
4.053
5.887
5.945
1,836
–
–
–
–
–
–
13,531
12,081
–
–
2,384
–
–
–
136,936
–
–
–
–
–
(83,404)
–
–
–
–
–
(1,836)
–
4.90
01/01/21
01/07/21
1,821
2,384
4.94
01/01/23
01/07/23
3.78
01/01/24
01/07/24
–
–
15/11/20
15/11/27
86,122
93,356
136,936
(13,531)
–
(12,081)
12,082
–
–
152,370
153,911
–
–
10/09/21
10/09/28
11/09/22
11/09/29
– 23/09/23 23/09/23
–
–
10/09/19 10/09/28
11/09/20
11/09/29
4.90
01/01/21
01/07/21
–
–
–
–
–
15/11/20
15/11/27
10/09/21
10/09/28
11/09/22
11/09/29
10/09/19 10/09/28
11/09/20
11/09/29
304,233
27,448
139,320
(83,404)
(27,448)
332,701
John Tutte
SAYE 2017
LTIP 2017
LTIP 2018
LTIP 2019
3,673
30/10/17
6.12
3,673
–
–
(3,673)
147,346
15/11/17
152,370
10/09/18
153,911
11/09/19
5.935
5.887
5.945
–
–
–
– (147,346)
–
–
–
–
–
–
–
–
DEF BONUS 2018
23,962
10/09/18
5.887
23,962
DEF BONUS 2019
42,750
11/09/19
5.945
21,375
(23,962)
–
(21,375)
21,375
524,012
49,010
– (147,346)
(49,010) 327,656
i.
ii.
iii.
iv.
v.
The performance conditions attached to the 2019 LTIP awards were disclosed in the 2020 Directors’ Remuneration Report.
The performance conditions attached to the 2020 LTIP awards are shown on page 147.
There are no further performance conditions attached to the exercise of the deferred bonus awards.
Between 28 June 2021 and 14 September 2021 (being the latest practicable date prior to the posting of this report), there were no further
changes to the directors’ interests set out in the Statement of shareholding and scheme interests above.
Included in the LTIP 2016 awards held at 28 June 2020 in the Annual Report 2020 were 15,876 and 41,497 shares under option for Matthew
Pratt and Barbara Richmond respectively which were exercised on 12 September 2019.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
G A I N S M A D E BY D I R E C TO R S O N S H A R E O P TI O N S
The table below outlines the notional gains made by Directors on share options exercised during the year, calculated as
at the exercise date.
Executive Director
Matthew Pratt
Scheme
SAYE 2017
No. shares
exercised
Date of
exercise
3,673
05/01/21
DEF BONUS 2018
13,929
10/09/20
Mid price
on date of
exercise
(pence)
548.5
459.10
DEF BONUS 2019
12,735
11/09/20
455.20
30,337
Barbara Richmond
SAYE 2017
1,836
05/01/21
DEF BONUS 2018
13,531
10/09/20
548.5
459.10
DEF BONUS 2019
12,081
11/09/20
455.20
27,448
John Tutte
SAYE 2017
3,673
05/01/21
DEF BONUS 2018
23,962
10/09/20
548.5
459.10
DEF BONUS 2019
21,375
11/09/20
455.20
49,010
Notional gain on
exercise (£’000)
20.15
63.95
57.97
142.07
10.07
62.12
54.99
127.18
20.15
110.01
97.30
227.46
P E N S I O N
John Tutte and Matthew Pratt are deferred members of the Redrow Staff Pension Scheme (now closed to future accrual)
and details of entitlements under this plan are set out below. John Tutte also received a pension allowance supplement
of 20% of salary up to 6 November 2020 when he became Non-Executive Chairman. Barbara Richmond received a
pension allowance supplement equivalent to 20% of salary and Matthew Pratt received a pension allowance supplement
equivalent to 7% of salary (2020:10%). The value of these cash supplements is included in the pension column of the
Single Total Figure of Remuneration Table on page 144. Barbara Richmond and Matthew Pratt are also covered by fixed
term group income protection and death in service benefit.
TOTA L P E N S I O N E NTITLE M E NT S ( AU D ITE D)
Details of the Executive Directors’ pension entitlements under the defined benefit section of the Redrow Staff Pension
Scheme are as follows:
Director
John Tutte
Matthew Pratt
Normal retirement date
24 June 2021
6 July 2040
Accrued benefit at
27 June 2021
£
Benefits paid to Director
during period up to
Defined Benefit accrued
during period up to
27 June 2021
£
27 June 2021
£
58,171*
15,440
Nil
Nil
Nil
Nil
* At 24 June 2021 being normal retirement date.
John Tutte retired from the pension scheme on 27 June 2021.
The normal retirement date shows the date at which the Director can retire without actuarial reduction. No additional
benefit is available on early retirement.
The accrued pension shown above is the amount of pension entitlement that would be paid each year on retirement on
the normal retirement date, based on service to 29 February 2012. The Scheme closed the accrual of future benefits with
effect from 1 March 2012.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT
150
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151
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
S U P P O R TI N G D I S C LO S U R E S , A D D ITI O N A L S TATUTO RY I N F O R M ATI O N A N D A D D ITI O N A L
CO NTE X T
Percentage change in remuneration of Chief Executive, Directors and all employees
The tables below show the percentage change in the salary, benefits and annual bonus of the Chief Executive, Directors
and of all Redrow employees who qualify for participation in the Company’s bonus and benefits plans between 2020 and
2021. The comparison between 2019 and 2020, where relevant, is shown in brackets.
Salary
Benefits
Annual bonus
Chief Executive
All Redrow employees
35.3%* (N/A)
3.07% (2.92%)
4.5% (N/A)
1.4% (11.0%)
N/A** (N/A)
292.9% (-64.3%)
*
**
Matthew Pratt became Group Chief Executive on 1 July 2020. The change in salary reflects this promotion from COO to CEO.
Zero bonus was awarded to Matthew Pratt in FY2020. £540k was awarded for FY2021.
Name
Salary/fee
Benefits
Barbara Richmond
(Chief Financial
Officer)
Nick Hewson
(Senior
Independent
Director)
Sir Michael Lyons
(Non-Executive
Director)
Nicky Dulieu
(Non-Executive
Director)
John Tutte **
(Non-Executive
Chairman)
Richard Akers
(Non-Executive
Director)
2.78% (6.50%) 2.74% (1.4%)
3.17% (-3.0%)
Nil (84.2%)
N/A (N/A)
N/A (N/A)
Nicky Dulieu
was appointed
as Non-
Executive
Director on 6
November 2019
Appointed as
Non-Executive
Chairman on 6
November 2020
Appointed as
Non-Executive
Director on 1
June 2021
Annual bonus
N/A* (-100%)
N/A (N/A)
N/A (N/A)
N/A
N/A
N/A
*
**
Zero bonus was awarded to Barbara Richmond for FY2020. £370k bonus was awarded for FY2021.
John Tutte moved to a non-executive role during the year.
C E O PAY R ATI O
CEO Pay Ratio
25th Percentile pay ratio
50th Percentile pay ratio
75th Percentile pay ratio
2021
42:1
26:1
17:1
2020
27:1
18:1
12:1
The remuneration figures for the employee at each quartile were determined with reference to 27 June 2021.
Our CEO pay ratios have been calculated using Option A under the Companies (Miscellaneous Reports) Regulations
2018 as this is the most statistically accurate way. The total remuneration of all UK employees for the 2021 financial year
has been calculated and ranked to identify the employees where remuneration places them at the 25th, 50th and 75th
percentile points.
The total pay and benefits and salary of the employees paid at the 25th percentile, 50th percentile and 75th percentile
are shown in the tables on page 151.
Salary 2021
Salary 2020
25th Percentile
50th Percentile
75th Percentile
£25,281
£23,950
£20,028*
£32,008
£53,709
£27,760 **
*
**
The employee identified at the 50th percentile is in a sales consultant role which has the opportunity to earn higher remuneration through
commission arrangements, hence the base salary is lower than the 25th percentile employee but the total pay and benefits is higher.
The employee identified at the 75th percentile is in a sales consultant role, which has the opportunity to earn higher remuneration through
commission arrangements, hence the base salary is lower than the 50th percentile employee but total pay and benefits is higher.
Total pay and benefits 2021
Total pay and benefits 2020
25th Percentile
50th Percentile
75th Percentile
£27,312
£26,069
£44,293
£40,581
£66,694
£60,756
The pay ratio figures for 2021 have widened compared to those in the prior year. The principal reason is that there was
no variable pay in the prior year for the CEO. In the current year, the bonus has been paid in full and as this represents a
higher proportion of executive pay than it does in the wider workforce, the ratios have widened. The total pay and
benefits payable across the workforce has increased as shown in the table above. Therefore the year on year change in
the pay ratio is in line with our expectations. The Committee will continue to monitor longer-term trends in pay.
The Remuneration Committee notes that the Chief Executive’s remuneration package is appropriately more heavily
weighted toward variable pay elements, i.e. annual bonus and LTIP, than the general employee population and is
therefore likely to result in the ratio fluctuating as a function of the outcomes of incentive plans year on year. However,
the Committee will continue to monitor pay ratios, including any longer term trends, as part of its annual agenda.
Relative importance of spend on pay
The table below shows total employee remuneration and distributions to shareholders, in respect of 2021 and 2020 (and
the difference between the two).
£m
Total employee remuneration
Distributions to shareholders
2021
137
86
2020
134
–
Change (%)
2.2%
100%
Total employee remuneration represents amounts included in note 7a to the accounts in respect of wages, social
security, pension and incentive costs for all Group employees. Distributions to shareholders include the cash returns in
respect of each financial year (see note 5 to the financial statements). This represents 24.5 pence per share in respect of
2021 compared to nil pence per share in respect of 2020.
Performance graph and table
The chart below shows the TSR of Redrow in the ten-year period to 27 June 2021 against the TSR of the FTSE 250. TSR
refers to share price growth with re-invested dividends. The Committee believes the FTSE 250 index is the most
appropriate index against which the TSR of Redrow should be measured, as it is a constituent of the FTSE 250.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT
152
Redrow plc Annual Report 2021
153
D I R EC TO RS’ R E M U N E R ATI O N R E P O RT CO N T I N U E D
600
500
400
300
200
100
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Redrow
FTSE 250
The table below provides remuneration data for the Executive Chairman/Group Chief Executive (as applicable) for each
of the nine financial years over the equivalent period.
Name
Remuneration/
donations*
Bonus
(% of Maximum)
LTIP vesting
(% of Maximum)
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Steve
Morgan
Steve
Morgan
Steve
Morgan
John
Tutte
John
Tutte
John
Tutte
John
Tutte
John
Tutte
John
Tutte
Matthew
Pratt
£855k
£1,050k £1,922k £2,355k £1,916k
£2,463k £1,950k £2,093k £712k
£1,141k
50%
80%
100%
100%
100%
100%
96.7%
85%
Nil%
100%
0%
19%
100%
100%
100%
100%
100%
100%
Nil%
Nil%
*
For Steve Morgan, this value includes the nominal salary and benefits disclosed in the Single Total Figure of Remuneration table as well as
Company donations to The Steve Morgan Foundation, a UK registered charity of which Steve Morgan is a trustee, reflecting notional salary
and waived annual cash bonus in respect of the relevant year. It also includes the value of deferred bonus and vested LTIP cash awards in
respect of each relevant year (calculated in accordance with the methodology applicable to the Single Total Figure of Remuneration Table).
External non-executive directorships held by Executive Directors
It is the Committee’s policy that, with the approval of the Board, Executive Directors may hold one non-executive
directorship at another company in order to broaden their knowledge and experience to the benefit of the Company. The
Executive Director may retain any fee received for these duties. Barbara Richmond is a non-executive director of Lonza
Group Ltd and in line with the Committee’s policy, she is entitled to retain the fees from this appointment. She received
fees of £188k during 2021 (£205k during 2020). This represented 240,000 Swiss Francs in both years.
CO N S I D E R ATI O N O F D I R E C TO R S’ R E M U N E R ATI O N – R E M U N E R ATI O N CO M M IT TE E A N D
A DV I S O R S
The Remuneration Committee is comprised solely of Non-Executive Directors. Vanda Murray chaired the Remuneration
Committee until she stepped off the Board on 6 November 2020. At that date, Nicky Dulieu became Chair of the
Remuneration and the other members during the year comprised Nick Hewson, Sir Michael Lyons and Richard Akers
(who joined the Board on 1 June 2021).
The Committee has agreed Terms of Reference detailing its authority and responsibilities. The Terms of Reference of the
Committee are kept under regular review and are published on the Group’s website and include:
• determining the Remuneration Policy in respect of the Executive Directors and the Company Secretary (together ‘the
Senior Executives’), taking into account the context of the Company’s overall approach to remuneration for all
employees and within this Policy determining the total individual package of each Senior Executive;
• determining performance targets and the extent of their achievement for both annual and long-term incentive awards
operated by the Company affecting Senior Executives; and
• monitoring and approving the level and structure of remuneration of the Executive Committee immediately below the
Senior Executives.
The Committee meets as often as is required but at least twice per year. The Committee met five times during the course
of the financial year ended 27 June 2021 and details of Committee attendance are set out in the following table:
TABLE OF ATTENDANCE
Name
Role
Nicky Dulieu 1 †
Nick Hewson †
Sir Michael Lyons †
Richard Akers 2 †
Vanda Murray 1 †
Member/ Chair
Member
Member
Member
Chair
Attendance at Meetings
5/5
5/5
5/5
1/1
0/0
1
2
Vanda Murray chaired the Remuneration Committee until 6 November 2020 when she stepped down from the Board and there were no
meetings held between the beginning of the 2021 financial year and her retirement date Nicky Dulieu took over as Chair from that date.
Richard Akers joined the Board and the Remuneration Committee on 1 June 2021 and attended the meeting held from this date to the end of
the 2021 financial year.
† Member considered to be independent. Throughout the 2021 financial year, the Committee was made up of 100% independent members.
The Committee received advice from FIT Remuneration Consultants LLP during the year. FIT is a member of the
Remuneration Consultants Group and as such voluntarily operates under the Code of Conduct in relation to executive
remuneration consulting in the UK. The Committee is comfortable that FIT does not have connections with Redrow plc
that may impair their objectivity and independence. The fees charged by FIT for the provision of independent advice to
the Committee during 2021 was £46,069 + VAT. FIT provided no other services to the Company.
Statement of voting at Annual General Meeting
At the Annual General Meeting held on 6 November 2020, votes cast by proxy and at the meeting in respect of directors’
remuneration report are shown in the table.
Resolution
No.
%
No.
%
VOTES FOR
VOTES AGAINST
Total
votes cast
exc withheld
Votes
withheld
255,841,787
95.03
13,374,873
4.97 269,216,660
666,929
266,985,296
99.19
2,173,991
0.81 269,159,287
724,302
Approval of the Directors’ Remuneration
Policy
Approval of Directors’ Remuneration
Report for the 52 weeks ended 28 June
2020
By order of the Board
N I C K Y D U LI E U
Chair of the Remuneration Committee
14 September 2021
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTGOVERNANCE REPORT 154
Redrow plc Annual Report 2021
155
D I R EC TO RS’ R E P O RT
OTH E R S TATUTO RY D I S C LO S U R E S
The Companies Act 2006 (the “Act”) requires the Directors
to present a fair review of the business during the 52
weeks to 27 June 2021 and of the position of the Company
at the end of the financial year together with the financial
statements, Auditors’ Report and a description of the
principal risks and uncertainties which the Company faces.
The Strategic Report can be found on pages 1 to 89 of the
Annual Report. The FCA’s Disclosure Guidance and
Transparency Rules (the “DTRs”) require certain information
to be included which can be found in the Corporate
Governance Report on pages 90 to 169.
There were no significant events since the balance sheet
date. An indication of likely future developments in the
business of the Company and details of the Company’s use
of financial instruments for risk management purposes are
included in the Strategic Report.
The Corporate Governance Report and the Strategic
Report, together with sections of the Annual Report
incorporated by reference, form part of the Directors’
Report which is presented in accordance with, and with
reliance upon, applicable English company law. The
liabilities of the Directors in connection with this report
shall be limited as provided by English law.
The table opposite sets out where key information can be
found in the Annual Report.
Subject
Dividends
Capital structure (details
of the issued share
capital)
Directors
Page reference
See note 5 of the financial
statements on page 192.
See note 18 of the financial
statements on page 215.
• See page 96 detailing the
Directors who served
during the year, along with
their meeting attendance.
• Biographical details of the
Directors of the Company
who are seeking election
and re-election at the
2021 AGM are set out on
pages 92 to 93.
• Details of Directors’
interests, including
interests in the Company’s
shares, are disclosed in
the Directors’
Remuneration Report on
page 147.
Employment policies of
the Company
The Redrow Benefit Trust
Report (the “Employee
Benefit Trust”)
Environmental, social
and governance (“ESG”)
disclosures
Greenhouse gas
emissions
Redrow plc Long Term
Investment Plan (“LTIP”)
Section 172(1) Statement
Details of the Company’s
employment policies may be
found in the Directors’
Report on pages 159 to 160.
Details of the shares held by
the Employee Benefit Trust
may be found in the
Directors’ Report on page
156.
Details of the Company’s
approach to ESG matters
can be found in the
Directors’ Report on pages
156 to 167.
All disclosures of the
Company’s greenhouse gas
emissions, as required to be
disclosed under Schedule 7
of The Large and Medium
sized Companies and
Groups (Accounts and
Reports) Regulations 2008
(pursuant to the Act,
Strategic Report and
directors’ report Regulations
2013), are contained in the
Directors’ Report on page
157.
Details of the Company’s
LTIP are set out in note 7d of
the consolidated financial
statements on pages 194 to
195 and the Directors’
Remuneration Report on
pages 128 to 153.
The Section 172(1) Statement
can be found in the Strategic
Report on page 82 to 83.
The Directors take pleasure in presenting to the
shareholders their report and audited consolidated
financial statements for the 52 weeks ended 27 June 2021.
R E S U LT S , D I V I D E N D S A N D R E TU R N O F
C A S H
The Group made a profit after tax of £254m (2020: £113m).
During the 2020 financial year, due to the uncertainty
around the impact of the COVID-19 pandemic on the
business, there was no interim or final dividend paid by the
Company. The Group signalled its intention to resume
dividends in 2021 and as announced on 10 February 2021,
given the Group’s cash position and order book, the Board
resumed dividend payments with an interim dividend of 6p
(2020: nil p) which was paid on 9 April 2021.
The Board proposes to pay on 17 November 2021, subject
to shareholder approval at the 2021 Annual General
Meeting, a final dividend of 18.5p (2020: nil p) net per share
in respect of the 52 weeks ended 27 June 2021 to
shareholders on the Register as at the close of business on
24 September 2021.
The Company has in place a dividend re-investment plan
which gives shareholders the opportunity to re-invest their
dividends by acquiring shares in the Company.
A N N UA L G E N E R A L M E E TI N G
Notice of the 2021 Annual General Meeting to be held on
Friday, 12 November 2021 will be sent to shareholders
separately. Members wishing to vote, should return forms
of proxy to the Company’s Registrar not less than 48 hours
before the time for holding the meeting.
The formal notice convening the Annual General Meeting,
together with explanatory notes, will be found in a separate
circular which will be sent to shareholders separately and
will be available on the Company’s website. Shareholders
will also find with the Notice of Annual General Meeting a
form of proxy for use in connection with the meeting.
D I R E C TO R S
The Directors of the Company during the year to the date
of this report, along with their meeting attendance, are
listed on page 96. The current Directors are listed on
pages 92 to 93 together with their biographical details.
Details of Directors’ pay, service contracts and interests in
the ordinary shares of the Company are included in the
Directors’ Remuneration Report on pages 128 to 153.
Formal appraisals of the Executive Directors were
undertaken during the financial year. All the Non-Executive
Directors underwent an annual appraisal conducted by the
Senior Independent Director. The Board confirms that
Matthew Pratt and Barbara Richmond, who stand for
reappointment as Executive Directors; Nick Hewson, Sir
Michael Lyons and Nicky Dulieu who stand for
reappointment as Non-Executive Directors; and Richard
Akers who stands for appointment as Non-Executive
Chairman, continue to be effective and demonstrate the
appropriate commitment to their roles.
The Executive Directors have formal service agreements
and termination of their employment may be effective by 12
months’ notice given by the Company for Barbara
Richmond and 6 months’ notice given by the Company for
Matthew Pratt.
In accordance with the UK Corporate Governance Code
(the “Code”), all of the Directors will retire at the Annual
General Meeting to be held on Friday, 12 November 2021
and, being eligible and upon the recommendation of the
Board, offer themselves for reappointment, save for John
Tutte who will be stepping down from the Board on 15
September 2021.
D I R E C TO R S I NTE R E S T S
Related party transactions are disclosed in note 22 to the
Financial Statements. A summary of remuneration provided
to key management personnel is provided in note 7c.
P OW E R S O F TH E D I R E C TO R S
Subject to the Company’s Articles of Association, UK
legislation and any of the directions given by special
resolution, the business of the Company is managed by the
Board, which may exercise all the powers of the Company.
Directors have been authorised to allot and issue shares by
way of resolutions of the Company passed at its Annual
General Meeting.
The rules in relation to the appointment and replacement of
Directors are as set out in the Company’s Articles of
Association and applicable English company law. The
Articles of Association can only be amended, or new
Articles adopted, by a resolution passed by shareholders
at a general meeting by at least three quarters of the votes
cast.
C A P ITA L S TR U C TU R E
The Company has an issued share capital of 352,190,420
ordinary shares of 10.5 pence each. The Company has one
class of ordinary shares which carry ordinary rights to
dividends (subject to the Company’s Articles of
Association). Each share carries the right to one vote at
general meetings of the Company in respect of resolutions
which are taken on a poll.
No person has any special rights of control over the
Company’s share capital and all issued shares are fully
paid.
Authority was given to the Directors at last year’s Annual
General Meeting to allot unissued shares up to an
aggregate nominal amount of £12,326,664.70 (which is
equivalent to approximately 33% of the Company’s issued
share capital) and up to a further aggregate nominal
amount of £12,326,664.70 in connection with an offer by
way of a rights issue. The authority was not exercised
during the period ended 27 June 2021 or prior to the date
of this report.
Authority was also given to the Directors at last year’s
Annual General Meeting to make market purchases of the
Company’s ordinary shares up to an aggregate nominal
value of £3,697,999.41, which is equivalent to
approximately 10% of the issued share capital of the
Company. Under the authority, there is a minimum and
maximum price to be paid for such shares and the shares
purchased by the Company pursuant to this authority may
be held in treasury or may be cancelled. No such
purchases were made during the period ended 27 June
2021 or prior to the date of this report.
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D I R EC TO RS’ R E P O RT CO N T I N U E D
The Company has no current intention of exercising the
authorities referred to above but nevertheless as these
authorities expire at the forthcoming Annual General
Meeting, the Directors will be seeking new authorities as
set out in the Notice of Annual General Meeting.
The Company has made no non-pre-emptive issuances of
equity for cash over the past three reporting periods.
VOTI N G A N D TR A N S F E R O F S H A R E S
The Company’s Articles of Association do not contain any
specific restrictions on the size of a shareholder’s holding
or on the transfer of shares.
The Company is not aware of any agreements between
shareholders that may result in restrictions on the transfer
of securities and/or voting rights.
The Company’s Articles of Association do not contain, and
the Company is not aware of, any restrictions on voting
rights, including any limitations on voting rights of holders
of a given percentage or number of votes, deadlines for
exercising voting rights and arrangements by which, with
the Company’s co-operation, financial rights carried by
securities are held by a person other than the holder of the
securities.
Zedra Trust Company (Guernsey) Limited, as trustee of the
Employee Benefit Trust, held 7,631,940 shares (2.16%) in
the Company as at 27 June 2021 on trust for the benefit of
employees of the Company. The voting rights attaching to
the shares held by the Employee Benefit Trust are
exercisable by the Trustee and there are no restrictions on
the exercise of the voting of, or acceptance of any offer
relating to those shares.
S U B S TA NTI A L H O LD I N G S I N TH E CO M PA N Y
As at 27 June 2021, the Company had been advised of the
following notifiable interests in its ordinary shares, in
accordance with Rule 5 of the DTRs.
Notifiable Person
No. of Ordinary
shares held
% of voting
rights
Bridgemere Securities Limited
56,352,350
16.00%
Vidacos Nominees/HSBC 1
17,876,321
5.08%
1
The Company was notified of this interest prior to the 20 for 21 share
consolidation on 8 April 2019. The figure displayed as the number of
shares held has been calculated by applying the 20:21 consolidation
ratio to the number of voting rights contained within their most
recent notification to the Company under DTR 5.1, at which time was
18,770,138.
In line with the relevant rules, the table above does not
include notifications received from investment firms where
the interest has fallen below 5%, or from non-investment
firms where the interest has fallen below 3%.
The Company has not been notified of any changes to the
above interests, or any other notifiable interests, since 27
June 2021 to 14 September 2021, being the last practicable
date.
C H A N G E O F CO NTR O L
The Company’s banking facilities require repayment in the
event of a change of control. In addition the Company’s
employee share incentive schemes contain provisions,
whereby, upon a change of control, outstanding options
and awards would vest and become exercisable by the
relevant employees, subject to the rules of the schemes.
There are no agreements between the Company and its
Directors or employees providing for compensation for loss
of office or employment in event of a takeover bid.
I N D E P E N D E NT AU D ITO R S
Following the latest tender process which was undertaken
by the Committee in 2018, KPMG LLP was appointed as the
external auditor of the Company in 2019 and was
reappointed at the 2020 Annual General Meeting, with
99.98% of votes cast in favour of its reappointment.
Q UA LI F Y I N G TH I R D PA R T Y I N D E M N IT Y
P R OV I S I O N S
During the course of the 52 weeks ended 27 June 2021,
qualifying third party indemnity provisions were in place.
The Company agreed to indemnify the Directors, former
Directors and the Company Secretary of the Company and
Associated Companies (as defined in Section 256 of the
Companies Act 2006), to the extent permitted by law and
the Company’s Articles of Association, against any liability
arising in connection with: any negligence, default, breach
of duty or breach of trust by them; and their duties, powers
or office, including in connection with the activities of the
Company or an Associated Company in its capacity as a
trustee of an occupational pension scheme.
The above indemnity provisions remain in force at the date
of this report. In addition, the Company maintains directors’
and officers’ insurance for each Director of the Company
and its Associated Companies.
E N V I R O N M E NTA L , S O C I A L A N D
G OV E R N A N C E D I S C LO S U R E S
Limiting the environmental impact of developments by
building responsibly and creating thriving and desirable
places to live are key components of the Group’s strategy,
and through the use of its design principles, the Company
has ensured that social, environmental and economic
aspects are incorporated into the communities delivered.
Valuing People is also a key component of the Group’s
strategy and this is executed by valuing and developing
people and partners and inspiring the next generation to
build.
The Board considers ESG matters as part of its regular risk
assessment and the following sections seek to provide a
deeper understanding of the work undertaken by the
Company in relation to ESG matters.
E N V I R O N M E NTA L
Greenhouse Gas Emissions
Greenhouse gas (“GHG”) emissions data for the period 29 June 2020 to 27 June 2021 are set out in the table below:
Emissions from:
Scope 1 activities:
• Direct emissions from combustion of
fuels and business travel
Scope 2 activities:
Current
Reporting Year
(29 June 2020 to
27 June 2021)
Comparison
Year
(1 July 2019 to
28 June 2020)
Units
11,417
12,250
tonnes of CO2e
• Indirect emissions from purchased electricity
3,263
3,254
tonnes of CO2e
Total Greenhouse Gas Emissions:
• (Scope 1 + Scope 2)
Intensity ratio:
14,680
15,504
tonnes of CO2e
Total emissions per 100m2 of build
2.84
3.01
tonnes of CO2e per 100m2 of build
This disclosure includes all of the emission sources
required under the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013. These sources fall
within our consolidated financial statement and we do not
have responsibility for any emission sources that are not
included in our consolidated statement.
During the reporting period, the annual quantity of energy
consumed by the Company was 64,294,472 kWh. This
figure presents the underlying global energy use data that
was used to calculate the GHG emissions and is calculated
in kWh. Where information has been converted to kWh
from other units (e.g. litres of fuel), the 2021 UK
Government’s Greenhouse Gas Conversion Factors for
Company Reporting have been used for the required
conversions. The figure is the aggregate of:
• the annual quantity of energy consumed from activities
for which the Company is responsible involving the
combustion of fuel;
• the annual quantity of energy consumed resulting from
the purchase of electricity and heat by the Company for
its own use; and
• the annual quantity of energy consumed from activities
for which the Company is responsible, involving the
consumption of fuel for the purposes of transport.
100% of the figures reported above relate to emissions and
energy consumed solely in the United Kingdom.
The Company has taken several measures for the purpose
of reducing GHG emissions and increasing the Company’s
energy efficiency:
• In February, the Company switched to a renewable
electricity contract for all of its offices. During the
reporting year, 3.3% of total electricity was from a
renewable source. From July 2021, all plots, show homes
and site compounds will be supplied by 100% Green
certificated electricity.
• The Company trailed a hybrid generator system with
solar PV and a smart energy management system that
can result in fuel savings of between 33% and 50%, with
the accompanying emission reductions, helping it to
achieve its targets and reduce costs.
• The Company is exploring a Group-wide roll out of
energy-efficient site cabins. These will provide improved
thermal insulation, double glazed windows with low
u-values, energy efficient LED lights with PIR activation,
energy efficient heaters with thermal cut-out and energy
efficient point-of-use hot taps.
• With the Group’s supply partners, two trials are underway
to explore the efficacy of Hydrotreated Vegetable Oil
(HVO), a biodegradable non-toxic fuel that is produced
from vegetable fats and oils. This could provide an
alternative to diesel which is currently used in generators
and other construction machinery and can reduce
carbon emissions by up to 90%.
• As part of its effort to reduce the energy use of Customer
Experience Suites and show homes, the Company has
installed a ‘one-switch’ shutdown system for all of the
lighting at our Newton Garden Village development and
continues to monitor the impact on consumption and
cost with a view to a wider rollout.
The Company has used the WRI/WBCSD GHG Protocol – A
Corporate Accounting and Reporting Standard and the
emissions have been calculated using the 2021 UK
Government’s Greenhouse Gas Conversion Factors for
Company Reporting. Reported Scope 2 emissions are
calculated using the location-based method.
This inventory of GHG emissions has been verified by
SGS to a limited level of assurance, in accordance with
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D I R EC TO RS’ R E P O RT CO N T I N U E D
EN ISO 14064-3:2006, as meeting the requirements of The
Greenhouse Gas Protocol – A Corporate Accounting and
Reporting Standard. Further details and the independent
assurance report can be found at redrowplc.co.uk/
about-redrow/our-values/building-responsibly/managing-
our-resources-efficiently/.
Research and Development
The Company has a centralised Product Development
Team charged with identifying and evaluating new
construction techniques and products. They are also
responsible for minimising risk and seeking opportunities
associated with future regulatory changes. In addition, the
Company has a centralised Sustainability team, as these
issues play a prominent role in the Company’s activities.
The Company recognises its responsibilities to the
community as a whole and has adopted an environment
strategy and framework which is a core part of the
Company’s objectives.
The charge to the income statement in respect of research
and development for the 52 weeks ended 27 June 2021
was £0.4m (2020: £0.4m).
Resource Efficiency
Managing resources efficiently is a key principle
underpinning one of the Company’s strategic themes of
building responsibly. The following are key examples of the
Company’s approach to managing its resources efficiently:
1.
2.
3.
Carbon – the Company continues to be an active
member of the UK Green Building Council and is
working to reduce the carbon emissions from its
homes, its operations and its wider indirect activities.
The Company is committed to extending and building
on its existing approach in order to deliver Net Zero
Carbon homes in the coming decade. Details of the
Net Zero Carbon commitments and ambition are
further explained in the Strategic Report.
Water – the homes produced by the Group have one of
the lowest water use standards in the industry at 105
litres-per-person-per-day (lpppd), compared with a
building regulation standard of 125 lpppd. The
Company is committed to reducing the amount of
water used in its operations and during the year, the
water usage was 33.06m3 per 100m2 of build.
Waste – the Company is also committed to reducing
waste from its operations and in 2021, waste
generated was 8.11 tonnes per 100m2 of build. Where
possible, we try to reuse or recycle unused materials.
During the year, 97.65% of our waste was diverted from
landfill.
For further details on the Company’s approach to
managing its resources efficiently, please see pages 46 to
55 of the Strategic Report.
Sustainable Materials
Workforce Engagement
Equality, Diversity and Inclusion Policy
The Company is committed to sourcing sustainable
materials in for use in its operations to contribute to its
long-term sustainability. The following are key examples of
the Company’s approach to sourcing such materials:
1.
Timber – the Company uses timber in the construction
of its homes and is committed to sourcing timber-
based products from well-managed sources. In the
2020 calendar year, 99.64% of the forest products
used by the Company were from verified and credibly
certified sources.
2.
Other materials – the Company also uses supply chain
mapping for other materials and products used in
constructing its homes to allow it to work with supply
partners to identify and avoid products deemed to be
high risk in respect of environmental and social ethics.
For further details on the Company’s approach to sourcing
sustainable materials, please see page 52 of the Strategic
Report.
Biodiversity
During the year, the Company continued to implement its
industry-leading biodiversity strategy in partnership with
The Wildlife Trusts to ensure that our developments
enhance biodiversity and contribute to nature’s recovery.
Internal workshops have been running to equip our teams
with the knowledge and skills to deliver our ambitions in
practice.
For further details on the Company’s biodiversity strategy,
and action taken during the year for nature, please see
pages 37 to 39 of the Strategic Report.
Climate-related Disclosures
Following the recommendation of the Task Force on
Climate-Related Financial Disclosure (“TCFD”), specific
climate-related disclosures are included within this Annual
Report. Please see pages 163 to 167 for the TCFD
disclosure table.
S O C I A L
Placemaking
The Company has an established set of placemaking
principles called the Redrow 8 that has been used for over
two years. The 8 principles are a robust set of
commitments and benchmarks that ensure that we provide
communities that are beautiful, sustainable, well-connected
and developed with nature and people in mind.
For further details on the Company’s approach to
placemaking, please see pages 28 to 36 of the Strategic
Report.
The Board believes that greater engagement with the
workforce is essential to preserving long-term value.
Valuing People is a fundamental part of the Group’s
strategy and understanding the views of employees and
actively encouraging their participation sits highly on the
Board’s agenda.
The Company recognises that its continued success
depends upon its ability to recruit the right people, retain
them and help them to reach their full potential. The
Company believes that attracting a diverse range of skills
enables it to meet the challenge of the skills gap in the
sector.
See pages 99 to 100 of the Corporate Governance Report
for details of the work undertaken during the year in
respect of engagement with the workforce, including the
Group's arrangements to: provide employees with
information on matters of concern to them, including
achieving a common awareness for employees aware of
financial performance of the Company; consulting with
employees to obtain their views; and encouraging
employee involvement in the Company’s share plans.
Employee Wellness
The Company recognises that the wellness of its
employees is vital to the success of the business. During
the COVID-19 lockdown period and in the time since, there
has been an increase in the frequency and quality of
employee communications, including the following
initiatives to focus on health and wellbeing:
• introduction of ‘agile work places’ to further enhance the
wellbeing of our colleagues by capturing the flexibility,
trust and efficiencies displayed during the COVID-19
lockdown period and making them work for the benefit of
colleagues and the Company over the longer term;
• continued training of the Mental Health First Aiders
across the Divisions and implementation of support
mechanisms for them including a closed forum on the
Company’s intranet, a Buddy System and continued
promotion of MyLife, the employee assistance
programme is available to all employees, subcontractors
and their families 24/7;
• introduction of Engage Lite, a condensed version of the
Company’s intranet which was available to all employees
on furlough to allow colleagues access to important
business updates and health and wellbeing resources for
themselves and their families;
• more personal engagement with employees, with the HR
team trying to help people manage their personal
challenges on an individual basis;
The Company is firmly committed to giving every potential
recruit and employee the same opportunities irrespective
of their gender, race, ethnic or national origin, disability,
age, sexuality, religious belief, marital status or social class.
There is a strong commitment to continuously promoting
equality, diversity and inclusion ("ED&I") throughout the
business to build a culture that is inclusive to all, actively
values difference and ensures everyone is treated fairly.
There is a culture where ED&I is championed by leadership
and everyone in the Company owns it, feels empowered
and is confident enough to get involved.
During the year, the Group released the Equality, Diversity
and Inclusion Policy (“ED&I Policy”) and implemented a
number of initiatives to aid the delivery and embedment of
the ED&I agenda, which comprised:
• formation of the ED&I Working Group, a group of
representatives from across the business to assist with
the drafting and implementation of the ED&I Policy and
Recruitment and Selection Policy;
• launch of the new ED&I Policy across the business;
• release of the 2021 Inclusion Calendar, which clearly
explains dates/months which are key to a wide range of
diverse backgrounds;
• communications programme to continuously raise
awareness of the ED&I Policy throughout the business,
and a dedicated page of the Company’s intranet to share
related information;
• provision of a facility to enable individuals to share any
ED&I concerns or ideas anonymously to ensure that a
whole range of topics and issues were covered;
• embedment of the ED&I Policy throughout the employee
journey, from recruitment and personal management to
leadership development and exit management;
• amendment of the recruitment and selection process
including:
• fortnightly Health and Wellbeing newsletter distributed
• training of all recruiting managers on ED&I and
to colleagues across the business; and
unconscious bias;
• arrangement of a series of financial wellbeing webinars
hosted by the Company’s pension provider.
The HR department has a dedicated team focusing on
health and wellbeing to ensure that health remains a key
priority and that the wellness initiatives in place are fit for
purpose.
• utilising a wider range of media for advertising to
ensure the targeting of diverse candidates; and
• capturing an applicant’s diversity demographics as
part of the recruitment process to promote the
elimination of unlawful discrimination,
• including information on the Group’s ED&I agenda at the
earliest opportunity in the onboarding process;
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• regular sharing of stories and case studies through
communications to encourage an inclusive workplace;
• sharing the ED&I Policy with subcontractors and third
party partners to work with them to actively support the
Group’s agenda;
• training over 350 Directors and Managers on ED&I and
unconscious bias; and
• release of a mandatory e-learning module to all
colleagues to raise awareness of ED&I.
As outlined in the ED&I Policy, the Company gives full and
fair consideration to applications for employment made by
disabled people and is committed to offering training and
career development of disabled persons. The ED&I Policy
places a duty on the Company to take reasonable steps to
remove any disadvantage which a disabled person may
have compared with employees who are not disabled. In
the event of any employee becoming disabled, the
Company makes every effort to ensure that their
employment continues, training needs are met and
reasonable adjustments are made to the working
environment.
The Company embeds its stance of diversity matters
through awareness and training in the following policies:
• Equality, Diversity and Inclusion Policy
• Recruitment and Selection Policy
Learning and Development
The Company places considerable importance on training
and developing its people. Historically, training has
primarily been delivered face-to-face at the Company’s
in-house training facilities and supported through blended
e-learning. During the COVID-19 lockdown, and in the time
since, the Group has placed additional emphasis on its
e-learning platform, ensuring all colleagues completed vital
return-to-work training, in addition to refreshing core skills.
Moving forward the Company will make more use of
technology to deliver training through e-learning, webinars
and interactive online sessions.
The Company, in partnership with Liverpool John Moores
University and Coleg Cambria, established the UK’s first
dedicated Housebuilding Degree. The three-year degree
provides students with a full overview of housebuilding
skills including quality, project management, health and
safety, business skills and law. Learning is achieved
through a blend of classroom activities, virtual learning,
practical site visits and tutorials, meaning that learners are
able to combine their studies with working and earning.
Having successfully brought our first employees through to
graduation we opened up the degree programme to post
A-Level school leavers for the first time during the year,
bringing in 16 high calibre youngsters.
During the year, the Company recruited over 111 trainees,
including 41 apprentices and 15% of our direct employees
are trainees. Company apprentices receive first class
training, both on site and at local colleges, and the
Company partners with key suppliers to ensure that
apprentices receive a comprehensive understanding of the
wider aspects of their chosen field.
The Company is committed to assisting with tackling the
problem of attracting young people to construction, and
more specifically housebuilding, by analysing the barriers
to entry-level recruitment into the sector and making
recommendations to overcome these. During the year, the
Company signed up to the Talent Retention Scheme set up
by the Construction Leadership Council to assist where
possible with helping out apprentices who had lost their
jobs.
Health, Safety and Environment
The Company is committed to quality and excellence
therefore it follows that minimising risk to people, plant,
products and the environment is inseparable from all of its
other objectives. Health and safety has naturally become
embedded into the culture of the Group, as it forms part of
the overall duty of being an employee or supplier of the
Group.
The Group seeks to achieve the highest health, safety and
environmental standards as it significantly contributes to
the overall performance of the business and protects both
people and environment from harm. The Company
operates an environmental management system that
ensures that it manages environmental impacts in a
systematic way and is certified by the British Standards
Institute to the international standard ISO 14001.
During the year, the Group launched RedHSE, being an
online accident/incident reporting system and HS&E audit
platform allowing for the automation of significant HS&E
data collection and analysis to help focus and target
initiatives in support of continuous improvement.
For further details on our approach to health and safety,
see pages 42 to 43 of the Strategic Report.
Charitable and Political Donations
The Company recognises the difference it can create
through its presence as a national housebuilder by
developing thriving communities through supporting the
local community and charitable projects. The Company and
its employees are actively involved in fundraising activities
for our selected charitable partners.
Divisions annually select a local charity to support which
has a purpose that aligns with one of the Group’s key
priorities. This allows each part of the business to choose a
charity that is meaningful to them in the communities in
which they operate. In accordance with Company policy,
the charity must be verified before any donations are made
to it and a record is maintained of all charitable
contributions made.
The Group paid £0.1m in charitable donations during the
year, being £0.1m in support of local charities.
their pay practices to the real living hourly wage as
outlined by the Living Wage Foundation.
The Company does not engage or support any form of
political donations. No Group company or employee is
permitted to make a political donation in the name of the
Company and employees are cautioned to be extra vigilant
to ensure that political contributions are not made in
circumstances where gifts, hospitality or the actions of
third parties are engaged in transactions on behalf of the
Company. The Group made no political donations during
the year.
Human Rights
The Board values and appreciates the contribution made
by all employees at every level and is committed to
protecting and respecting human rights. Each employee is
treated fairly and equally and the Company has measures
in place to ensure that the Group is free from
discrimination. Throughout the Group there is a zero-
tolerance approach to any form of harassment or bullying;
forced or involuntary labour; and child labour in any form.
The Board is invested in the development of employees
and has put in place measures to protect both their
physical and mental wellbeing.
During the year, the Company became accredited with the
Living Wage Foundation by ensuring that the pay of every
Redrow employee is aligned with the real living hourly
wage, which takes into consideration the cost of living as
outlined by the Foundation, and extending this to the
supply chain as a condition to working with the Company.
The Company embeds its commitments to the protection of
human rights through its Human Rights Policy.
Supply Chain
The Company conducts its operations with respect to the
interests and human rights of those employed in our supply
chain. The Group works collaboratively with its supply
chain to develop relationships based on honesty,
openness, respect and fairness. In addition, the Group
supports its supply chain by, among other things, improving
their knowledge of sustainability through training and
working with subcontractors to attract new entrants into
the industry and supporting their training needs.
As a partner of the Supply Chain Sustainability School, the
Group’s supply chain have access to thousands of online
presentations, training modules, guidance documents and
checklists and are regularly invited to attend workshops
and briefings.
Due diligence is conducted on the Group’s supply chains
to ensure that the values of the partners which we are
working with are aligned with the Group’s commitments to
high ethical business standards. During the year, the terms
and conditions of those in our supply chain were amended
to ensure that our partners were committed to aligning
The Company embeds these commitments and
expectations through its policy, Partnering with our Supply
Chain.
For further details on our how the Company partners with
its supply chain for sustainability, see pages 52 to 54 of the
Strategic Report.
Local Communities
During the year, the Company continued to create thriving
communities and committed £275m to the local
communities served for the development of new schools,
local shops, community and health centres as well as green
spaces as part of the planning process.
The Group is committed to providing high quality
affordable homes for local people and during the year has
designed, built and delivered over 1,314 new affordable
homes across its developments in England and Wales in
partnership with Registered Providers.
For further details on our how the Company creates strong,
connected communities, see pages 28 to 36 and 62 of the
Strategic Report.
Customers
The Company’s purpose is to operate to create a better
way for people to live and there is very much a customer
focused culture across the Group.
During the year, based on a survey conducted by the
NHBC and published by the Home Builders Federation,
over 92.6% of customers polled said they would
recommend a Redrow home to a friend, earning the
Company a top five-star rating.
For further details on our how the Group keeps customers
at the heart of the business, see pages 43 to 46 of the
Strategic Report.
Business Relationships
A summary of how the Board have had regard to the need
to foster the Company’s business relationships with
suppliers, customers and others, and the effect of this on
the decisions taken by the Company, can be found within
the Stakeholder Engagement table on pages 84 to 89.
G OV E R N A N C E
Corporate Governance
The Board remains committed to high standards of
corporate governance. Details relating to the Company’s
governance arrangements and compliance with the UK
Corporate Governance Code are provided in the Corporate
Governance Report on pages 90 to 153.
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D I R EC TO RS’ R E P O RT CO N T I N U E D
Code of Conduct
The Company has in place a Code of Conduct, which acts
as a guide for employees to doing the right thing in
business. It focuses on the values and behaviours deemed
most important for the Group and seeks to guide
employees in their good judgement to act in the Redrow
way.
The Code of Conduct provides a number of decision-
making tools to assist employees if faced with difficult
decisions and sets out the Company’s policy on a number
of key matters deemed integral to doing the right thing in
business, including:
• whistleblowing;
• health, safety and environment;
• diversity and inclusion;
• human rights;
• supply chain and modern slavery;
• integrity (comprising bribery, gifts and hospitality, tax
evasion facilitation, conflicts of interest, share dealing
and data and asset protection); and
• charitable and political donations.
The Code of Conduct has been made available to all
employees and is publicised on the Company’s intranet,
Engage and is also available to view at redrowplc.co.uk.
Modern Slavery
There is a Group commitment to ensuring that there is no
modern slavery or human trafficking in any part of our
business or supply chains. The Group has a policy in place
reflecting its commitment to acting ethically and with
integrity in all business relationships and to implementing
and enforcing effective systems and controls to ensure
slavery and human trafficking are not taking place
anywhere in its supply chains.
There are a number of key initiatives in place to assist with
the approach to ethical and responsible sourcing, including
the following:
1.
All suppliers and manufacturers must submit a detailed
Supplier Appraisal Assessment for approval as part of
the pre-tender qualification process. The appraisal
forms also track the country of manufacture allowing
the Company to identify materials supplied by
manufacturers with a high-risk profile.
2.
All supply partners must warrant that they shall comply,
and will use their best endeavours to ensure that any
subcontractor or party within their own supply chain
shall at all times comply, with the Modern Slavery Act
2015.
partners to comply fully with the Modern Slavery Act
2015, with any breach resulting in the termination of all
live contracts.
With temporary labour acknowledged as an area of high
risk for modern slavery, external specialists are engaged to
manage all temporary labour requirements and processes.
Alongside a number of system-based checks conducted by
the external specialist, for example right to work and health
and safety, they also carry out physical checks and audits
periodically to ensure temporary agency workers are
legally complaint and there are no instances of modern
slavery.
As a partner of the Supply Chain School, the Group’s
workforce and supply chain have access to thousands of
online presentations, training modules, guidance
documents and checklists and are regularly invited to
attend workshops and briefings. One of the key areas
covered by the school is modern slavery, with online
presentations, checklists, guidance documents and training
modules accessed from their website.
In its partnership with the Supply Chain School, the
Company has recently worked in collaboration with the
school and other partners on further developing guidance
materials to identify what a good due diligence system look
like.
For further details on the steps taken by the Group to
ensure that modern slavery is not taking place in our
business or supply chains, please see our Slavery and
Human Trafficking Statement for the 2021 financial year,
which is available to view at redrowplc.co.uk.
Stakeholder Engagement
The Board regularly reviews the identity and key priorities
of its stakeholders and the business strategy of the Group
is shaped by the issues that matter to key stakeholders.
The key stakeholders of the Group and how the Board has
responded to their key priorities can be found on pages 84
to 89.
Anti-Bribery and Corruption
The Company has a zero tolerance approach to bribery or
corruption of any form and there is a widely publicised
formal policy in place dealing with this, which is available to
all employees.
The Company has a principle-based system for bribery
prevention, which comprises the following six principles:
1.
maintenance of bribery risk assessments within our
sector;
2.
top level commitment of the unacceptability of bribery
which is engrained in our culture;
3.
The Company’s Standard Purchase Order and
Subcontractor Terms of Contract require trading
3.
proper due diligence with people we do business with
and seeking reciprocal anti-bribery agreements;
G O I N G CO N C E R N
In considering whether it is appropriate to prepare these
financial statements on a going concern basis, the
Directors have conducted a detailed going concern review,
considering the Group’s liquidity and banking covenant
compliance.
Following the review, details of which can be found within
the Basis of Preparation section of Accounting Policies on
page 184, the Directors consider that the Group has
adequate resources in place for the forecast period and
have therefore adopted the going concern basis of
accounting in preparing these financial statements.
4.
clear policies and procedures applicable to all
employees and business partners;
5.
effective implementation by embedding anti-bribery
within internal controls, recruitment, remuneration
policies, operations, communications and training; and
6.
monitoring and reviewing through auditing and
financial controls which are sensitive to bribery.
Further details of the company’s Anti-Bribery and
Corruption policy, and work undertaken to prevent bribery
taking place within the business, can be found in the Audit
Committee Report on page 116.
P R OV I S I O N O F I N F O R M ATI O N TO AU D ITO R S
Each Director in office at the date the Directors’ Report is
approved, confirms that:
a.
b.
so far as the Director is aware, there is no relevant
audit information (as defined in section 418(3) of the
Act) of which the Company’s external auditors are
unaware; and
they have taken all of the steps that they ought to have
taken as a Director in order to make themselves aware
of any such relevant audit information and to establish
that the Company’s external auditors are aware of that
information.
TA S K F O R C E O N C LI M ATE - R E L ATE D F I N A N C I A L D I S C LO S U R E S ( TC F D)
In addition to reporting and disclosing our environmental and sustainability performance throughout this report, this year
we have also included specific climate-related disclosures following the TCFD’s recommendations and structured this
around four key thematic areas.
Governance
Disclose the organisation’s governance around climate-related risks and opportunities.
Describe the Board’s
oversight of climate-
related risks and
opportunities.
The Group Communities Director with the support of the sustainability department,
assists and advises the Placemaking and Sustainability Committee in its development
and monitoring of the Company’s approach to environmental issues which includes
climate change. The Committee also reviews and approves the setting of performance
objectives and targets and monitors progress against these. The Group Chief Executive
has ultimate responsibility for climate-related matters and the Committee reports to the
Main Board. The new role of Group Communities Director has been created to provide
strategic management and oversight of the Company’s sustainability framework which
includes climate change matters and reports directly to the Group Chief Executive and
also sits on the Executive Management Team. The Health, Safety and Environment
Committee also develops and monitors the company’s approach to environmental
sustainability matters and regularly reviews the objectives and effective operation of the
ISO 14001 Environmental Management System (EMS). The Group Chief Executive is a
member of this Committee.
The composition of the Main Board can be seen on page 96 and the members of the
Placemaking and Sustainability Committee can be seen on page 124, with representatives
from other disciplines within the business invited to attend the meetings as necessary.
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D I R EC TO RS’ R E P O RT CO N T I N U E D
Describe management’s
role in assessing and
managing climate-
related risks and
opportunities.
The Group Communities Director briefs the Placemaking and Sustainability Committee on
sustainability and climate change matters, supported by the in-house sustainability team
who provide expertise in developing the sustainability strategy, environmental and
climate-related policies and identifying areas of improvement. The Head of Sustainability
chairs a quarterly Sustainability meeting with Directors / Heads of departments across
the business, including the Group Design and Technical Director, Group Commercial
Director, Group Customer & Marketing Director, Group HR Director, Group Masterplanning
Director, Group HS&E Director and Construction Director. These cross-discipline
meetings ensure that climate and sustainability-related issues are understood and
implemented across the business. The Head of Sustainability is accountable for
identifying and assessing climate-related risks and opportunities. Responsibilities for
managing each of these risks is allocated to Directors / Heads of departments
appropriately and discussed within specific and relevant working groups across the
company. Actions and results are fed back to the Sustainability meeting and the
Placemaking and Sustainability Committee as appropriate.
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning where such information is material.
Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium, and long
term.
The business has identified the following climate-related risks and opportunities:
Risks
• Disruption to build programme and delivery chain from flooding and storm damage
• Increased requirements for surface water management impacting on margins and
insurance
• Extreme weather events affecting productivity in offices and sites
• Risk of overheating of homes and apartments due to increase in outside temperatures
• Droughts exacerbating water scarcity
• Failure to be proactive in identifying opportunities for energy efficient products and
materials
• Failure to ensure sustainable procurement routes, resulting in interruption to supply-
chain and/or increased costs of raw materials
• Risk that the supply chain fails to supply materials/technologies required to tackle
climate change
• Failure to reduce operational environmental impacts (e.g. GHG emissions)
• Increased energy, fuel and water prices for the Company’s operations
• Failure to implement current and emerging regulations adequately
• Not meeting customer expectations in the use of environmentally friendly materials
and products
• Potential litigation from customers for failing to meet regulations and adequately plan
for physical risks
• Reputational risks associated with increased stakeholder concern
• Inadequate response to reporting obligations
• Unsuccessful investment in new low/zero carbon technologies
Opportunities
• Increased awareness and demand from our customers for homes adaptable to climate
change issues
• Development of new low and net zero carbon homes through research and innovation
• Use of more efficient modes of transport for our operations
• Participation in the carbon and/or carbon offset market
• Focus on identifying and implementing initiatives for climate change adaptation
• Focus on our supply chain resilience, the use of materials with lower embodied carbon
and materials that come from recycled and ethical sources
• Use of low/zero emissions sources of energy and fuel on our operations
• Development of climate adaptation and insurance risks
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning where such information is material.
Describe the impact of
climate-related risks
and opportunities on
the organisation’s
business, strategy, and
financial planning.
Describe the resilience
of the organisation’s
strategy, taking
into consideration
different climate-related
scenarios, including a
2°C or lower scenario.
The business has identified the following climate-related risks and opportunities that can
impact our strategy and financial planning:
Risks
• Direct regulations arising from UK Government and regional government setting out
policies to minimise carbon dioxide emissions and achieve zero carbon homes
• Climate change impacts such as increased temperatures, water shortages and flood
risk may result in the need to redesign aspects of our product which may result in
increased costs, sourcing and adoption of new technologies
• An increase in extreme weather events may impact on supply chain continuity and
construction activities, limiting production
• Changing climate may reduce the availability of land on which the business can build
and may cause disruption to our construction programme
• Building materials becoming unavailable or limited and hence more expensive which
will impact our operations, build programme and financial planning
• Insufficient development of innovative products and technologies can limit our plans to
delivering homes with climate resilient measures taken into account during their
design
Opportunities
• Increasing regulatory standards bring customer benefits and subsequent marketing
benefits – energy efficiency of new homes is becoming more important to our
customers as the cost of energy continues to rise
• Focusing on the development of lower-emission homes and the provision of low-
carbon lifestyles in the communities we build
• Focusing on increasing green travel options in the developments we create, providing
us with marketing benefits and higher customer satisfaction
• Ability to respond to and pre-empt consumer demand in the area of low-carbon
products and sustainable communities, placing us in a better competitive position and
therefore increasing revenues
• An increased focus on meeting business targets relating to carbon, energy, waste and
water as part of our strategy to Building Responsibly means we are realising
opportunities to contribute to environmental improvements as well as reducing our
operating costs
Our business strategy and objectives have been developed by several key means:
1. Stakeholder engagement and materiality assessment – whereby key stakeholders
were consulted on issues such as energy efficiency and low carbon (homes), flood
risks, biodiversity, water efficiency. These issues were then prioritised according to
their impact/potential impact.
2. Risk and opportunities processes – as outlined in the section below
The resulting strategy has three business principles, each of which encompasses issues
relating to climate change:
• Developing Thriving Communities (including objectives such as placemaking,
biodiversity, landscaping and water attenuation)
• Building Responsibly (including objectives such as responsible sourcing of materials
and carbon reduction)
• Valuing People (including objectives and targets relating to climate-related and
sustainability training and low-carbon travel for our employees)
We currently evaluate the climate-related risks to the Company through our existing risk
evaluation and management systems. This includes an examination of impacts and the
likelihood of occurrence to give us the opportunity to examine different scenarios, but is
not a formal scenario analysis. Over the next few months we will be reviewing our
approach to climate risk management using the TCFD Framework and setting a long-
term science-based net zero carbon target along with science-based targets for scope 1,
2 & 3 that are aligned to a 1.5°C scenario.
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D I R EC TO RS’ R E P O RT CO N T I N U E D
Risk Management
Disclose how the organisation identifies, assesses, and manages climate-related risks.
Metrics and Targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where
such information is material.
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
A comprehensive risk register is maintained at Group-level covering all aspects and
disciplines within the business. Climate change risks are covered in both the
‘Sustainability’ section and within sections owned by Group functional Directors. For
each risk there are Prevent controls and Detect controls in place and each section is
owned by a member of the Executive Board responsible for review and monitoring.
Newly identified risks are added when encountered and a six monthly review is held. At a
divisional-level, issues with potential to impact the divisional operational performance are
reported monthly on a site-by site basis at the divisional board meeting.
Sustainability and climate change risks are also identified and assessed within the
Group’s specific sustainability risk matrix, which is aligned with the main group risk
register. This forms part of our Environmental Management System, which is externally
certified to ISO14001:2015.
The Company’s in-house Technical, Commercial and Sustainability teams continuously
monitor developments in regulation and legislation and engage at high level within the
industry to maintain currency and to provide input to policy direction. This information is
fed back to the Main Board in quarterly reports. Appropriate solutions to meet
sustainability requirements are identified, evaluated and where appropriate, employed in
future-proofing product specifications.
Describe the
organisation’s
processes for managing
climate-related risks.
The development and implementation of a robust sustainability strategy in the business
ensures we recognise and address key climate-related risks and opportunities.
Managing impacts from changing weather patterns is done in various ways, including:
• Monitoring frequency, location and severity of extreme weather events, insurance
market response and regulatory change in response to extreme weather events
• We have appropriate insurance cover in place, especially for flood risk
• We regularly review policies and procedures for considering flood risk when procuring
land or planning a development
• We obtain professional advice on risk reduction measures for our product design, in
particular for the risk of overheating
• We continually review materials suppliers to secure supply from alternative sources if
necessary
Appropriate action plans are fed into the business process, shaping and informing a
number of Company policies which are published on our website and are available to
staff and customers. Policy decisions are communicated back to divisional managing
directors for immediate implementation. The impacts can be relevant in the short term,
for instance in dealing with unique site specific requirements imposed through planning
conditions and equally important for long term strategy development for future business.
All risks and opportunities which are identified as being pertinent to the business,
including climate change and sustainability issues are reported through the monthly
cycle of management reporting to the Executive Board, quarterly to the Main Board and
quarterly to the Placemaking and Sustainability Committee. Reports captured include
those from divisional Board meetings and from specialist disciplines within the business
located at the Head Office such as Sustainability, Commercial, Financial, Health and
Safety, Human Resources, Sales & Marketing and Technical.
Describe how processes
for identifying,
assessing, and
managing climate-
related risks are
integrated into the
organisation’s overall
risk management.
Disclose the metrics
used by the organisation
to assess climate-
related risks and
opportunities in line
with its strategy and
risk management
process.
In the Non-financial Performance section and throughout this report we disclose metrics
that relate to the key environmental and climate themes of our Sustainability Strategy:
energy, carbon, waste, water, biodiversity. These include:
• Scope 1 and 2 emissions
• Total emissions per 100m2 build
• Total energy consumed by source
• Waste generated per 100m2 build
• % of waste diverted from landfill
• % of forest products used in our homes from verified and credibly certified sources
• % of materials and subcontractors sourced locally
• Water usage per 100m2 build
Disclose Scope 1, Scope
2, and if appropriate,
Scope 3 greenhouse gas
(GHG) emissions, and
the related risks.
GHG emissions data for Scope 1 and 2 are detailed in page 157 of this report. This
disclosure includes all of the emission sources required under the Companies Act 2006
(Strategic Report and Directors’ Report) Regulations 2013 and is reported in line with the
Greenhouse Gas (GHG) Protocol: A Corporate Accounting and Reporting Standard.
We are currently reviewing the various methodologies available to calculate our Scope 3
emissions and we aim to disclose these for the first time next year.
Describe the targets
used by the organisation
to manage climate-
related risks and
opportunities and
performance against
targets.
We are committed to reducing our environmental impact and we aim to continually
reduce the energy and water consumption, carbon emissions and waste generated from
our operations and ultimately to achieve net zero carbon.
At the point of publication, we have committed to signing up to the Business Ambition for
1.5°C and to reach science-based net zero emissions no later than 2050. We will set
interim science-based targets across scopes 1,2 and 3, in line with the criteria and
recommendations of the Science Based Targets Initiative.
Our targets are shown below (set with 2017 as the baseline year) and progress against
these is publicly available on our website (https://www.redrowplc.co.uk/about-redrow/
sustainability/our-commitments/) :
• Reduction of the carbon intensity of our construction operations and offices by 10% by
2022
• Reduction of the water intensity of our construction operations and offices by 5% by
2022
• 95% + of construction waste diverted from landfill
• Reduction of our construction waste intensity by 10% by 2022
By order of the Board
G R A H A M CO P E
Company Secretary
Redrow plc
Registered no: 2877315
14 September 2021
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S TATE M E NT O F D I R EC TO RS’ R E S P O N S I B I LITI E S
The Directors are responsible for preparing the Annual
Report and the Group and parent Company financial
statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial
year. Under that law, they are required to prepare the
Group financial statements in accordance with International
Accounting Standards in conformity with the requirements
of the Companies Act 2006 and applicable law and have
elected to prepare the parent Company financial
statements on the same basis. In addition the Group
financial statements are required under the UK Disclosure
Guidance and Transparency Rules to be prepared in
accordance with International Financial Reporting
Standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of the Group's profit or loss for that
period. In preparing each of the Group and parent
Company financial statements, the directors are required
to:
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the parent Company and enable them to ensure that its
financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they
determine is necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement that complies with that
law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance
with international accounting standards in conformity
with the requirements of the Companies Act 2006 and,
as regards the Group financial statements, International
Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the
European Union;
• assess the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic
alternative but to do so.
R E S P O N S I B I LIT Y S TATE M E NT O F TH E
D I R E C TO R S I N R E S P E C T O F TH E A N N UA L
F I N A N C I A L R E P O R T
We, the Directors, confirm that to the best of our
knowledge:
• the financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company and the undertakings included
in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that
they face.
We consider the Annual Report, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy.
The Directors of the Company who were in office during
the year were:
John Tutte
Non-Executive Chairman
Matthew Pratt
Group Chief Executive
Barbara Richmond
Group Finance Director
Nick Hewson
Senior Independent Director
and Non-Executive Director
Sir Michael Lyons
Non-Executive Director
Nicky Dulieu
Non-Executive Director
Vanda Murray 1
Non-Executive Director
Richard Akers 2
Non-Executive Director
1
Vanda Murray stepped down from the Board on 6 November 2020
2 Richard Akers joined the Board on 1 June 2021
By order of the Board
G R A H A M CO P E
Company Secretary
14 September 2021
Redrow plc
Redrow House
St. David’s Park
Flintshire
CH5 3RX
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171
I N D E PE N D E NT AU D ITO R ’ S R E P O RT
TO T H E M E M B E R S O F R E D R OW P LC
1. Our opinion is unmodified
We have audited the financial statements of Redrow plc
(“the Company”) for the period ended 27 June 2021 which
comprise the Consolidated Income Statement, the Group
and Company Statement of Comprehensive Income, the
Group and Company Balance Sheets, the Group and
Company Statement of Changes in Equity, the Group and
Company Statement of Cash Flows, and the related notes,
including the accounting policies on pages 180 to 217.
In our opinion:
the financial statements give a true and fair view of the
state of the Group’s and of the parent Company’s
affairs as at 27 June 2021 and of the Group’s profit for
the period then ended;
the Group financial statements have been properly
prepared in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006;
the parent Company financial statements have been
properly prepared in accordance with international
accounting standards in conformity with the
requirements of, and as applied in accordance with the
provisions of, the Companies Act 2006; and
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation to the
extent applicable.
–
—
—
—
.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities are described below. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the directors on 13
November 2019. The period of total uninterrupted
engagement is for the two financial periods ended 27 June
2021. We have fulfilled our ethical responsibilities under,
and we remain independent of the Group in accordance
with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No
non-audit services prohibited by that standard were
provided.
Overview
Materiality:
group financial
statements as a
whole
Coverage
Key audit matters
Recurring risks
£15.7m (2020: £15.4m)
5% (2020: 5%) of group profit
before tax
99% (2020: 100%) of group profit
before tax
vs 2020
ss
ss
Cost of sales
recognition and
carrying amount of
both land held for
development and
work in progress
Valuation of defined
benefit obligation
(group and company
risk)
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due to
fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters, in
decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to
address those matters and, as required for public interest entities, our results from those procedures. These matters
were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of,
our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to
that opinion, and we do not provide a separate opinion on these matters.
Cost of sales
recognition and
carrying
amount of both
land held for
development
and work in
progress
Cost of sales
(£1,525 million;
2020: £1,097
million) ;
carrying amount
of land held for
development
(£1,526 million;
2020: £1,538
million) and
work in
progress (£910
million; 2020:
£972 million)
Refer to page
110 (Audit
Committee
Report), page
187 (accounting
policy) and
page 190 and
209 (financial
disclosures).
The risk
Subjective estimates
The Group holds inventory in the form of land
for development, work in progress and
showhomes.
The amount of cost of sales recognised in the
period includes an allocation of whole site
costs to each plot sold. Due to development
timescales, for certain sites (typically large
multiphased sites or sites with significant
infrastructure and development costs still to
be incurred, the calculation of whole site costs
can include significant estimates of future
costs. As a result, for certain sites cost of sales
recognised in the year is subject to estimation
uncertainty.
Infrastructure and development works are
often finalised towards the latter stages of the
development therefore the level of estimation
uncertainty can be significant where the future
infrastructure and development requirements
are large and complex. The level of estimation
uncertainty is higher at the beginning of the
development when fewer actual infrastructure
and development costs are known. The
assessment of recoverability of the carrying
amount of work in progress is also dependant
on estimates of costs of completion, including
future infrastructure and development costs.
The carrying value of land not yet in
development is assessed based on a number
of key assumptions including the likelihood of
favourable planning applications and
recoverability of pre-development costs.
Changes in any of the key assumptions could
lead to a material change in the estimation of
the carrying value of land for development.
The estimates made are profit impacting and
therefore there is an incentive for management
to manipulate the assumptions made to meet
profit targets.
Our response
We performed the tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support
relying on them.
Our procedures included:
Test of details: For a sample of undeveloped
land sites and capitalised pre development
costs, we corroborated explanations received
from management as to their planning status
by assessing underlying planning and legal
documents and quantity surveyor assessments
where applicable to assess the completeness
and accuracy of related net realisable value
provisions recorded;
For a sample of sites which, due to either their
size, complexity or performance or a
combination, we considered at higher risk of
misstatement we inspected whole site build
cost budgets and infrastructure and
development budgets and challenged
management’s inputs and assumptions by
performing the following procedures:
Test of details: compared the period end
carrying value of work in progress recorded
to that determined by the Quantity Surveyor
and performed a comparison to the actual
costs incurred to verify that any abnormal
costs or build variances incurred, have
been appropriately identified and
accounted for in the period.
Test of details: We assessed the accuracy
of site build costs and infrastructure and
development budgets by selecting a
sample of forecast costs included in the
budgets and agreeing these to supporting
documents such as invoices, quotations
and planning obligations;
172
173
Valuation of
the defined
benefit
obligation
Group and
Company: (£137
million; 2020:
£151 million)
Refer to page
110 (Audit
Committee
Report), page
188 (accounting
policy) and
pages 198 to
201 and 190
(financial
disclosures).
The risk
Subjective estimates
Changes in the assumptions used to determine
the liabilities of The Redrow Staff Pension
scheme, in particular those relating to price
inflation rate and the discount rate, can have a
significant impact on the valuation of the
liabilities.
The effect of these matters is that, as part of
our risk assessment for audit planning
purposes, we determined that the valuation of
the defined benefit obligation had a high
degree of estimation uncertainty, with a
potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole. In conducting our final
audit work, we reassessed the degree of
estimation uncertainty to be less than that
materiality.
Our response
We performed the tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support
relying on them.
Our procedures included:
–
–
–
Use of specialist: We used our actuarial
specialists to challenge the key
assumptions applied in the calculation of
the liability, including those relating to
price inflation rate and the discount rate,
against externally derived market data.
Assessing actuaries’ credentials: We
assessed the competence, independence,
and integrity of Group’s actuarial expert.
Assessing transparency: We considered
the adequacy of the Group’s disclosures
relating to the sensitivity of the obligation
to the assumptions.
Our results:
The results of our testing were satisfactory
and we consider the carrying amount of
defined benefit obligation to be acceptable
(2020: acceptable).
We continue to perform procedures over going concern as outlined in section 4 of our report. However, following the
recovery of performance of the Group following COVID and increased cash position, we have not assessed this as one of
the most significant risks in our current year audit and, therefore, it is not separately identified in our report this year.
The risk
Our response
Cost of sales
recognition and
carrying
amount of both
land held for
development
and work in
progress
The effect of these matters is that as part of
our risk assessment we determined that cost
of sales and carrying amount of work in
progress and land held for development have
a high degree of estimation uncertainty, with a
potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole and possibly many
times that amount.
The financial statements (note 1) disclose the
key judgements and sources of estimation for
the Group.
Test of details: We recalculated the cost of
sales release with reference to site build
costs and infrastructure and development
budgets and compared to the group’s
calculations;
Sector expertise: We used our own
Quantity surveyor specialists to challenge
areas of risk within the build cost forecasts,
particularly in respect of incomplete
site-wide infrastructure and development
works, to assess whether the risk was
appropriately reflected in both forecast
costs and cost of sales for sold units.
Test of details: For all sites with unit sales
during the year, comparing the gross profit
margin recognised to the site build cost
budgets and infrastructure and development
budgets and initial land appraisals and
determining whether variances are
supportable.
Test of details: We identified low and negative
margin sites and challenged the completeness
and accuracy of the group's related net
realisable value provisions recorded in relation
to these sites.
Test of details: For a sample of sites not
considered at higher risk of misstatement, we
compared year end positions to valuations
performed by internal Quantity Surveyors and
assessed the accuracy of infrastructure and
development budgets by agreeing a sample of
budgeted costs to supporting documents such
as invoices, quotations and planning
obligations.
Historical comparisons: For a sample of sites
completed in the year, we performed a
retrospective review to compare the overall
build cost budget (including infrastructure and
development costs) and sales forecasts to
actual costs and selling prices achieved to
assess the accuracy of site budgets and
forecasts.
Assessing transparency: Assessing the
adequacy of the Group's disclosures about the
degree of estimation involved in calculating
cost of sales and carrying value of land and
work in progress.
Our results:
We consider the cost of sales recognition and
the carrying amount of both land held for
development and work in progress to be
acceptable (2020: acceptable).
INDEPENDENT AUDITOR’S REPORT CONTINUED TO THE MEMBERS OF REDROW PLC 174
175
3. Our application of materiality and an overview of
the scope of our audit
Materiality for the Group financial statements as a whole
was set at £15.7 million (2020: £15.4 million) determined
with reference to a benchmark of Group profit before tax in
the period to 27 June 2021 of £314 million (2020:
normalised group profit before tax of £308.7 million), of
which it represents 5% (2020: 5%).
Materiality for the parent company financial statements as
a whole was set at £15.7 million (2020: £15.3 million),
determined with reference to a benchmark of net assets, of
which it represents 1.7% (2020: 1.6%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were
performed to a lower threshold, performance materiality, so
as to reduce to an acceptable level the risk that individually
immaterial misstatements in individual account balances
add up to a material amount across the financial statements
as a whole.
Performance materiality for the group was set at 65%
(2020: 65%) of materiality for the financial statements as a
whole, which equates to £10.2m (2020: £10m). We applied
this percentage in our determination of performance
materiality based on the level of identified misstatements
and control deficiencies during the prior period.
Performance materiality for the parent company was set at
75% (2020: 65%) of materiality which equates to £11.8
million (2020: £9.9 million). We applied this percentage in
our determination of performance materiality because we
did not identify any factors indicating an elevated level of
risk.
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding £0.79
million (2020: £0.77 million), in addition to other identified
misstatements that warranted reporting on qualitative
grounds.
Of the group’s 9 (2020: 11) reporting components, we
subjected 3 (2020: 3) to full scope audits for group
purposes. For the residual 6 (2020: 8) components, we
performed analysis at an aggregated group level to
re-examine our assessment that there were no significant
risks of material misstatement within these. The
components within the scope of our work accounted for
the percentages illustrated opposite.
The component materialities ranged from £0.8 million to
£15.5 million (2020: £0.7 million to £15 million), having
regards to the mix of size and risk profile of the Group
across the components.
Our audit of the group and components was all performed
by the group audit team.
Group profit before tax
£314m
(2020: normalised group profit before tax £308.7m)
Group Materiality
£15.7million (2020: £15.4 million)
£ 15.7million
Whole financial statements materiality
(2020: £15.4 million)
£ 10.2million
Whole financial statements performance materiality
(2020: £10 million)
£ 15.5million
Range of materiality at 3 components
(£0.8 million to £15.5 million)
(2020: £0.7 million to £15.0 million)
£0.79million
Misstatements reported to the audit committee
(2020: £0.77 million)
n Group PBT Group
n Materiality
Group revenue
Group profit before tax
Group total assets
0
0
100%
(2020: 100%)
100
100
1
0
99%
(2020: 100%)
100
99
1
5
99%
(2020: 95%)
95
99
n Full scope for group audit purposes 2021
n Residual components 2021
n Full scope for group audit purposes 2020
n Residual components 2020
4. Going concern
The Directors have prepared the financial statements on
the going concern basis as they do not intend to liquidate
the Group or the Company or to cease their operations,
and as they have concluded that the Group’s and the
Company’s financial position means that this is realistic.
They have also concluded that there are no material
uncertainties that could have cast significant doubt over
their ability to continue as a going concern for at least a
year from the date of approval of the financial statements
(“the going concern period”).
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent
risks to its business model and analysed how those risks
might affect the Group’s and parent Company’s financial
resources or ability to continue operations over the going
concern period. The risks that we considered most likely to
adversely affect the Group’s and parent Company’s
available financial resources over this period was a
possible reduction in sales volumes and prices as a
consequence of changes in the economic environment
such as the end of the stamp duty holiday, including the
impact of COVID-19, leading to sustained medium-term
decline in revenue and profits.
We also considered less predictable but realistic second
order impacts, such as cost inflation due to disruption to
the Group’s supply chain.
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going concern
period by assessing the Directors’ sensitivities over the
level of available financial resources and covenant
thresholds indicated by the Group’s financial forecasts
taking account of severe, but plausible adverse effects that
could arise from these risks individually and collectively.
Our procedures also included:
–
–
–
–
–
critically assessing assumptions in the base case and
downside scenarios, particularly in relation to forecast
liquidity, by confirming the completeness and accuracy
of forward secured sales and consistency with external
information such as industry and economic forecasts;
assessing whether downside scenarios applied
mutually consistent assumptions in aggregate, taking
into account all reasonably possible downsides, using
our assessment of the possible range of each key
assumption and our knowledge of the Group and the
industry;
comparing past budgets to actual results to assess the
directors' track record of budgeting accurately;
inspecting confirmation from banks of the level of cash
and cash equivalents held at year end and loan facility
documentation including covenant requirements; and
considering whether the going concern disclosure on
page 184 of the financial statements gives a full and
accurate description of the directors' assessment of
going concern, including the identified risks,
dependencies, and related sensitivities.
INDEPENDENT AUDITOR’S REPORT CONTINUED TO THE MEMBERS OF REDROW PLC
176
177
Our conclusions based on this work:
–
–
–
we consider that the Directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate;
we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group’s
or Company's ability to continue as a going concern for
the going concern period;
we have nothing material to add or draw attention to in
relation to the Directors’ statement on page 163 of the
financial statements on the use of the going concern
basis of accounting with no material uncertainties that
may cast significant doubt over the Group and
Company’s use of that basis for the going concern
period, and we found the going concern disclosure on
page 184 to be acceptable; and
–
the related statement under the Listing Rules set out
on page 163 is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the
Company will continue in operation.
5. Fraud and breaches of laws and regulations
– ability to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud
(‘fraud risks’) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or
provide an opportunity to commit fraud. Our risk
assessment procedures included:
–
–
–
enquiring of Directors, the audit committee, internal
legal counsel and inspection of policy documentation
as to the Group’s high-level policies and procedures to
prevent and detect fraud, including the internal audit
function, and the Group’s channel for ‘whistleblowing’,
as well as whether they have knowledge of any actual,
suspected or alleged fraud;
reading Board and all relevant committee minutes;
considering remuneration incentive schemes and
performance targets for management and directors,
including any revenue and trading margin targets for
management remuneration; and
–
using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the
audit team and remained alert to any indicators of fraud
throughout the audit.
As required by auditing standards, and taking into account
our overall knowledge of the control environment, we
perform procedures to address the risk of management
override of controls, in particular the risk that management
may be in a position to make inappropriate accounting
entries and the risk of bias in accounting estimates and
judgements such as cost of sales recognition and the
carrying amount of work in progress and land held for
development.
On this audit we do not believe there is a fraud risk related
to revenue recognition as the accounting for the majority of
the Group’s revenue is non-complex and only recognised
on the legal completion of the sale, being the point at
which the balance of the sales is paid for and title of the
property transfers to the customer. There are therefore
limited levels of judgement with limited opportunities for
manual intervention in the sales process to fraudulently
manipulate revenue.
We also identified a fraud risk related to the cost of sales
recognition and carrying amount of both land held for
development and work in progress in response the
significance of the accounting estimate and possible
pressures to meet profit targets.
Further detail in respect of Cost of sales recognition and
carrying amount of both land held for development and
work in progress is set out in the key audit matter
disclosures in section 2 of this report.
We also performed procedures including:
–
Identifying journal entries and other adjustments to
test based on risk criteria and comparing the identified
entries to supporting documentation. These included
those posted to unusual or unexpected account
combinations, including revenue and cash and
transfers of work in progress between developments
– Assessing significant accounting estimates for bias
Identifying and responding to risks of material
misstatement due to non-compliance with laws and
regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience, through discussions with the Directors
and other management (as required by auditing standards),
and from inspection of the Group’s regulatory and legal
correspondence as well as discussion with the Director’s
and other management around the policies and procedures
regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved
gaining an understanding of the control environment
including the entity’s procedures for complying with
regulatory requirements.
We communicated identified laws and regulations
throughout our team and remained alert to any indicators
of non-compliance throughout the audit. The potential
effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that
directly affect the financial statements including financial
reporting legislation (including related companies
legislation), distributable profits legislation, and taxation
legislation and we assessed the extent of compliance with
these laws and regulations as part of our procedures on
the related financial statement items.
Secondly, the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in
the financial statements, for instance through the
imposition of fines or litigation or the loss of the Group’s
license to operate. We identified the following areas as
those most likely to have such an effect: UK planning and
building and fire safety regulations, health and safety, anti
bribery, anti-money laundering and sanctions checking,
employment laws, data protection laws and environmental
laws. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and
regulations to enquiry of the directors and other
management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of
operational regulations is not disclosed to us or evident
from relevant correspondence, an audit will not detect that
breach.
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit
in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the
financial statements, the less likely the inherently limited
procedures required by auditing standards would identify
it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non-compliance with all laws
and regulations.
6. We have nothing to report on the other
information in the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial
statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or
our audit knowledge. Based solely on that work we have
not identified material misstatements in the other
information.
Strategic report and directors’ report
Based solely on our work on the other information:
—
—
we have not identified material misstatements in the
strategic report and the directors’ report;
in our opinion the information given in those reports
for the financial year is consistent with the financial
statements; and
—
in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-
term viability
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and
the viability statement, and the financial statements and
our audit knowledge.
Based on those procedures, we have nothing material to
add or draw attention to in relation to:
—
the directors’ confirmation within the viability
statement page 78 that they have carried out a robust
assessment of the emerging and principal risks facing
the Group, including those that would threaten its
business model, future performance, solvency and
liquidity;
—
the risk management report describing disclosures
describing these risks and how emerging risks are
identified, and explaining how they are being managed
and mitigated; and
INDEPENDENT AUDITOR’S REPORT CONTINUED TO THE MEMBERS OF REDROW PLC 178
179
—
the directors’ explanation in the viability statement of
how they have assessed the prospects of the Group,
over what period they have done so and why they
considered that period to be appropriate, and their
statement as to whether they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over
the period of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the viability statement, set
out on page 78 under the Listing Rules. Based on the
above procedures, we have concluded that the above
disclosures are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our
financial statements audit. As we cannot predict all future
events or conditions and as subsequent events may result
in outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the absence
of anything to report on these statements is not a
guarantee as to the Group’s and Company’s longer-term
viability.
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
corporate governance disclosures and the financial
statements and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
—
—
the directors’ statement that they consider that the
annual report and financial statements taken as a
whole is fair, balanced and understandable, and
provides the information necessary for shareholders to
assess the Group’s position and performance,
business model and strategy;
the section of the annual report describing the work of
the Audit Committee, including the significant issues
that the audit committee considered in relation to the
financial statements, and how these issues were
addressed; and
—
the section of the annual report that describes the
review of the effectiveness of the Group’s risk
management and internal control systems.
We are required to review the part of the Governance
Report relating to the Group’s compliance with the
provisions of the UK Corporate Governance Code
specified by the Listing Rules for our review, and to report
to you if a governance report has not been prepared by the
company. We have nothing to report in these respects.
Based solely on our work on the other information
described above:
—
with respect to the Governance Report disclosures
about internal control and risk management systems in
relation to financial reporting processes and about
share capital structures:
—
—
we have not identified material misstatements
therein; and
the information therein is consistent with the
financial statements; and
—
in our opinion, the Governance Report has been
prepared in accordance with relevant rules of the
Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority.
7. We have nothing to report on the other matters
on which we are required to report by exception
Under the Companies Act 2006, we are required to report
to you if, in our opinion:
—
—
—
—
adequate accounting records have not been kept by
the parent Company, or returns adequate for our audit
have not been received from branches not visited by
us; or
the parent Company financial statements and the part
of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration specified
by law are not made; or
we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
8. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on pages
168 to 169, the directors are responsible for: the
preparation of the financial statements including being
satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error;
assessing the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and using the going
concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is
provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
9. The purpose of our audit work and to whom we
owe our responsibilities
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members, as a body, for our audit work, for this
report, or for the opinions we have formed.
Nick Plumb (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
8 Princes Parade
Liverpool
L3 1QH
15 September 2021
INDEPENDENT AUDITOR’S REPORT CONTINUED TO THE MEMBERS OF REDROW PLC
180
Redrow plc Annual Report 2021
181
CO N SO LI DATE D I N CO M E S TATE M E NT
BA L A N C E S H E E TS
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Financial income
Financial costs
Net financing costs
Profit before tax
Income tax expense
Profit for the year
Earnings per share – basic
– diluted
52 weeks
ended
27 June
2021
£m
1,939
(1,525)
52 weeks
ended
28 June
2020
£m
1,339
(1,097)
414
(93)
321
1
(8)
(7)
314
(60)
254
242
(94)
148
2
(10)
(8)
140
(27)
113
73.7p
73.6p
32.9p
32.8p
Note
2
2
3
3
4
6
6
F I N A N C I A L S TATE M E NT S
S TATE M E NT O F CO M PR E H E N S I V E I N CO M E
Profit for the year
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of post employment benefit
obligations
Deferred tax on actuarial gains taken directly to equity
Other comprehensive income for the year net of tax
Total comprehensive income for the year
Note
7e
19
GROUP
COMPANY
52 weeks
ended
27 June
2021
£m
254
52 weeks
ended
28 June
2020
£m
113
52 weeks
ended
27 June
2021
£m
–
16
(9)
7
261
1
–
1
114
16
(9)
7
7
52 weeks
ended
28 June
2020
£m
2
1
–
1
3
Assets
Intangible assets
Property, plant and equipment
Lease right of use assets
Investments
Deferred tax assets
Retirement benefit surplus
Trade and other receivables
Total non-current assets
Inventories
Trade and other receivables
Current corporation tax
Cash and cash equivalents
Total current assets
Total assets
Equity
Retained earnings at 29 June 2020/1 July 2019
Profit for the year
Other comprehensive income for the year
Dividend paid
Movement in LTIP/SAYE
Retained earnings at 27 June 2021/28 June 2020
Share capital
Share premium account
Other reserves
Total equity
Liabilities
Bank loans
Trade and other payables
Deferred tax liabilities
Long-term provisions
Total non-current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Note
8
9
10
11
12
7e
13
14
13
15f
5
19
18
19
19
15
16
12
17
16
GROUP
COMPANY
As at
27 June
2021
£m
As at
28 June
2020
£m
As at
27 June
2021
£m
As at
28 June
2020
£m
–
19
6
–
1
40
–
66
2
19
7
9
1
22
–
60
2,513
2,585
100
1
160
2,774
2,840
1,522
254
7
(21)
6
38
7
44
2,674
2,734
1,481
113
1
(72)
(1)
1,768
1,522
37
59
8
37
59
8
1,872
1,626
–
152
15
34
201
767
767
968
2,840
170
120
5
8
303
805
805
1,108
2,734
–
–
–
–
–
40
420
460
–
361
1
144
506
966
839
–
7
(21)
–
825
37
59
7
928
–
–
10
–
10
28
28
38
–
–
–
–
–
22
774
796
–
300
1
41
342
1,138
908
2
1
(72)
–
839
37
59
7
942
170
–
–
–
170
26
26
196
966
1,138
The accompanying notes form an integral part of the financial statements.
The financial statements on pages 180 to 217 were approved by the Board of Directors on 14 September 2021 and were
signed on its behalf by:
M AT TH E W P R AT T
Director
B A R B A R A R I C H M O N D
Director
Redrow plc Registered Number 2877315
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSFINANCIAL STATEMENTS
182
Redrow plc Annual Report 2021
183
S TATE M E NT O F C H A N G E S I N EQ U IT Y
S TATE M E NT O F C A S H FLOWS
The Group
Total equity at 1 July 2019
Profit for the year
Other comprehensive income for the year
Total comprehensive income relating to the year (net)
Dividends paid – distributions to owners
Movement in LTIP/SAYE
Total equity at 28 June 2020
Profit for the year
Other comprehensive income for the year
Total comprehensive income relating to the year (net)
Dividends paid – distributions to owners
Movement in LTIP/SAYE
Total equity at 27 June 2021
The Company
Total equity at 1 July 2019
Profit for the year
Other comprehensive income for the year
Total comprehensive income relating to the year (net)
Dividends paid – distributions to owners
Movement in LTIP/SAYE
Total equity at 28 June 2020
Profit for the year
Other comprehensive income for the year
Total comprehensive income relating to the year (net)
Dividends paid – distributions to owners
Movement in LTIP/SAYE
Total equity at 27 June 2021
Note
5, 19
19
5, 19
19
Note
5, 19
19
5, 19
19
Share
capital
£m
37
Share
premium
account
£m
59
–
–
–
–
–
–
–
–
–
–
37
59
–
–
–
–
–
–
–
–
–
–
37
59
Share
capital
£m
37
Share
premium
account
£m
59
–
–
–
–
–
–
–
–
–
–
37
59
–
–
–
–
–
–
–
–
–
–
37
59
Other
reserves
£m
Retained
earnings
£m
Total
£m
8
–
–
–
–
–
8
–
–
–
–
–
8
1,481
1,585
113
1
114
(72)
(1)
113
1
114
(72)
(1)
1,522
1,626
254
254
7
261
(21)
6
7
261
(21)
6
1,768
1,872
Other
reserves
£m
7
–
–
–
–
–
7
–
–
–
–
–
7
Retained
earnings
£m
908
2
1
3
(72)
–
839
–
7
7
(21)
–
Total
£m
1,011
2
1
3
(72)
–
942
–
7
7
(21)
–
825
928
The above items are presented net of tax where appropriate. See note 4 and note 12 for information on income tax and
deferred tax expense. As permitted by Section 408 of the Companies Act 2006, the Income Statement of Redrow plc is
not presented as a part of these financial statements.
The consolidated profit on ordinary activities after taxation for the financial year, excluding intra-Group dividends, is
made up as follows:
Holding company
Subsidiary companies
The accompanying notes form an integral part of the financial statements.
2021
£m
–
254
254
2020
£m
2
111
113
GROUP
COMPANY
52 weeks
ended
27 June
2021
£m
52 weeks
ended
28 June
2020
£m
52 weeks
ended
27 June
2021
£m
52 weeks
ended
28 June
2020
£m
Note
Cash flows from operating activities
Profit for the year
Depreciation and amortisation
Financial income
Financial costs
Income tax expense
Adjustment for non-cash items
(Increase)/decrease in trade and other receivables
Decrease/(increase) in inventories
(Decrease)/increase in trade and other payables
Increase in provisions
Cash inflow/(outflow) generated from operations
Interest paid
Tax paid
Net cash inflow/(outflow) from operating activities
Cash flows from investing activities
Acquisition of software, property, plant and equipment
Interest received
Receipts from/(payments to) joint ventures
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Issue of bank borrowings
Repayment of bank borrowings
Payment of lease liabilities
Purchase of own shares
Dividend paid
5
Net cash (outflow)/inflow from financing activities
Increase/(decrease) in net cash and cash equivalents
Net cash and cash equivalents at the beginning of the
year
Net cash and cash equivalents at the end of the year
20
The accompanying notes form an integral part of the financial statements.
254
7
(1)
8
60
4
(62)
72
(6)
26
362
(4)
(54)
304
(2)
–
9
7
–
(170)
(3)
(1)
(21)
(195)
116
44
160
113
7
(2)
10
27
1
20
(181)
(75)
–
(80)
(5)
(64)
(149)
(7)
–
(3)
(10)
170
(80)
(3)
(16)
(72)
(1)
(160)
204
44
–
–
(4)
4
–
(1)
2
–
(4)
3
–
(3)
293
(184)
–
2
–
294
(4)
–
290
–
4
–
4
–
(170)
–
–
(21)
(191)
103
41
144
–
(4)
–
(190)
(3)
–
(193)
–
4
–
4
170
(80)
–
–
(72)
18
(171)
212
41
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSFINANCIAL STATEMENTS
184
Redrow plc Annual Report 2021
185
ACCOU NTI N G P O LI C I E S
B A S I S O F P R E PA R ATI O N
These Group and Parent Company financial statements
were prepared in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006 and these Group financial statements
were also in accordance with International Financial
Reporting Standards (IFRS) adopted pursuant to Regulation
(EC) No 1606|2002 as it applies in the European Union. The
financial statements have been prepared in accordance
with the historical cost convention as modified by the
revaluation of derivative financial instruments.
The preparation of financial statements in conformity with
IFRS requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities at the
balance sheet date and the reported amounts of revenue
and expenses during the reporting period. Whilst these
estimates are based on management’s best knowledge of
the amount, event or actions, actual results ultimately may
differ from those estimates (refer to note 1).
Going concern
The financial statements have been prepared on a going
concern basis which the Directors consider to be
appropriate for the reasons outlined below.
The Group renewed its available banking facilities in March
2021. As a result, the Group has a £350m Revolving Credit
Facility (RCF) (2020: £350m) provided by an established
syndicate of six banks being Barclays Bank PLC, Lloyds
Bank Plc, The Royal Bank of Scotland Group Plc, Santander,
HSBC and Svenska. This expires in September 2025 (2020:
December 2022) and is a committed unsecured facility. No
change to the RCF covenants was made as a result of the
renewal. As at 14 September 2021, £350m of this facility
was undrawn. It is likely that the RCF will be renewed prior
to its expiry in September 2025.
In addition the Group is in a net cash position at 27 June
2021 and 14 September and also has £3m of unsecured,
uncommitted facilities.
The Directors have prepared forecasts including cashflow
forecasts for a period of at least 12 months from the date of
signing of these financial statements (the going concern
assessment period). These forecasts indicate that the
Group will have sufficient funds to meet its liabilities as
they fall due, taking into account the following severe but
plausible downside assumptions:
• A 10% price reduction on all unexchanged private and
social legal completions for the going concern
assessment period compared to the base case Board
approved budgeted prices;
• A 15% volume reduction for the going concern
assessment period compared to the base case Board
approved budgeted volumes; and
• A 4% build cost increase on budgeted costs in Q1 of
FY2023.
These downside assumptions reflect the further potential
impact of COVID 19 being increased economic uncertainty,
further Government lockdown restrictions and legislation
and increasing rates of unemployment and the impact on
consumer confidence levels.
Allowing for the above downside scenario, the model
shows the Group has adequate levels of liquidity from its
committed facilities and complies with all its banking
covenants throughout the forecast period. The Directors
therefore consider that the Group has adequate resources
in place for the going concern assessment period and have
therefore adopted the going concern basis of accounting in
preparing these financial statements.
Redrow plc is a public listed company, listed on the London
Stock Exchange and domiciled in the UK.
The principal accounting policies have been applied
consistently.
The principal accounting policies are outlined below:
I M PAC T O F N E W S TA N DA R D S A N D
I NTE R P R E TATI O N S
a) The following standards have been issued but have
not been applied by the Group in these financial
statements. These amendments to standards and
interpretations had no significant impact on the financial
statements:
• Amendments to IFRS 3 ‘Definition of a Business’
• Amendments to IAS 1 and IAS 8 ‘Definition of Material’
b) The following new standards and amendments to
standards have been issued but are not effective for the
financial year beginning 1 July 2020 and have not been
early adopted:
• Amendments to IAS 1 ‘Classification of Liabilities as
Current or Non-current’
• Amendments to IFRS 9, IAS 39 and IFRS 7 ‘Interest Rate
Benchmark Reform’
• IFRS 17 ‘Insurance Contracts‘
• Amendments IAS 16 ‘Property, Plant and Equipment’
• Various standards Amendments to References to the
Conceptual Framework in IFRS Standards
The new standards and amendments to the standards
noted above are expected to have no significant impact on
the financial statements.
B A S I S O F CO N S O LI DATI O N
The consolidated financial statements incorporate the
financial statements of Redrow plc and all its subsidiaries,
together with the Group’s share of the results and share of
net assets of jointly controlled entities i.e. the financial
statements of Redrow plc and entities controlled by
Redrow plc (and its subsidiaries). Control is achieved where
Redrow plc:
• has the power over the investee;
• is exposed or has rights, to variable returns from its
involvement with the investee; and
• has its ability to use its power to affect its returns.
Redrow plc’s accounting reference date is 30 June.
Consistent with the normal monthly reporting process, the
actual date to which the balance sheet has been drawn up
is 27 June 2021 (2020: 28 June 2020).
The Group has taken advantage of the exemption provided
under Section 408 of the Companies Act 2006 not to
present Redrow plc’s Company income statement. The
profit for the financial year is dealt with in the statement of
changes in equity.
a. Subsidiaries
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
at their fair value at the date of acquisition. Any excess of
the cost of acquisition over the fair value of the Group’s
share of the identifiable net assets represents goodwill.
Goodwill is subject to an annual impairment review, with
any reduction in value being taken straight to the income
statement. Adjustments are made as necessary to the
financial statements of subsidiaries to ensure consistency
with the policies adopted by the Group.
All inter-company transactions and balances between
Group companies are eliminated on consolidation.
b. Interests in joint ventures
The Group applies IFRS 11 to all joint arrangements. Under
IFRS 11 investments in joint arrangements are classified as
either joint operations or joint ventures depending on the
contractual rights and obligations of each investor. Redrow
plc has assessed the nature of its joint arrangements and
determined them to be joint ventures. Joint ventures are
accounted for using the equity method.
Under the equity method of accounting, interests in joint
ventures are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-
acquisition profits or losses and movements in other
comprehensive income. When the Group’s share of losses
in a joint venture equals or exceeds its interests in the joint
ventures, the Group does not recognise further losses,
unless it has incurred obligations or made payments on
behalf of the joint ventures.
Unrealised gains on transactions between the Group and
its joint ventures are eliminated to the extent of the Group’s
interest in the joint ventures. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
R E V E N U E A N D P R O F IT R E CO G N ITI O N
Revenue represents the fair value received and receivable
in respect of the sale of residential housing and land and of
commercial land and developments net of value added tax
and cash and non-cash incentives. This is recognised on
the transfer of control to the customer on legal completion
i.e. at a point in time.
Profit is recognised on legal completion.
In respect of social housing, the Group enters into
contracts for the sale of social housing either at an agreed
price or at a discount to open market value. Payment for
these properties is made by the purchaser, either on legal
completion of the unit or, in certain circumstances on a
staged basis.
For those social or private rental sector contracts where
payment is received on a staged basis, the Group
considers these on a contract by contract basis and
determines the appropriate revenue recognition based on
the particular terms of that contract. The Group recognises
revenue over time for the construction element of such
contracts rather than at legal completion in circumstances
in which effective control of the underlying land is
transferred to the social or private rental sector provider
before or during construction. This is because effective
control of the land asset has passed to the customer and
subsequent construction activity is adding value to the
land asset controlled by the customer. For such contracts,
revenue for the construction element is recognised by
reference to the degree of completion of contract activity
at the balance sheet date. Revenue for the sale of the land
element of such contracts is recognised at the point in time
when control of the land is transferred to the customer.
PA R T E XC H A N G E P R O P E R TI E S
Part exchange is consistently a de minimis proportion of
our business. It is incidental to our main operation and
hence this is shown on a net expense basis within cost of
sales.
S E G M E NTA L R E P O R TI N G
The main operation of the Group is focused on
housebuilding.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTS 186
Redrow plc Annual Report 2021
187
ACCOU NTI N G P O LI C I E S CO N T I N U E D
The Executive Management Team (who are the Chief
Operating Decision Maker as defined in IFRS 8 ‘Operating
Segments’) regularly reviews the Group’s performance and
balance sheet position at both a consolidated and
divisional level. Each division is an operating segment as
defined by IFRS 8 in that the Executive Management Team
evaluates performance and allocates resources at this
level.
All the divisions have been aggregated into one reporting
segment on the basis that they all operate entirely within
the United Kingdom and share similar economic
characteristics including:
• sales demand subject to the same macro economic
factors eg. mortgage availability and Government policy;
• debt is raised centrally and the cost of capital is the
same at each division; and
• national supply agreements for key inputs such as
materials are negotiated centrally and in place across the
Group.
Within the Operating Review, the Group has provided
information on land holdings (page 36) and homes revenue
proportions (page 63) by geographical area being North,
Central, South and Greater London. The Executive
Management Team do not consider these to be separate
reportable segments because, as stated above, they
review the whole operations at a consolidated and
divisional level when assessing performance and allocating
resources.
E XC E P TI O N A L ITE M S
Exceptional items are those which in the opinion of the
Board, are material by size or nature, non-recurring and
of such significance that they require separate disclosure.
N E T F I N A N C I N G CO S T S
Interest income is recognised on a time apportioned basis
by reference to the principal outstanding and the effective
interest rate. Interest costs are recognised in the income
statement on an accruals basis in the period in which they
are incurred.
I N CO M E A N D D E F E R R E D TA X
Income tax comprises current tax and deferred tax.
Current tax is based on taxable profits for the year and any
appropriate adjustment to tax payable in respect of prior
years. Taxable profit differs from profit before tax as shown
in the income statement as it excludes income or
expenditure items which are never chargeable or allowable
for tax or which are chargeable or deductible in other
accounting periods.
Deferred tax is provided in full, using the balance sheet
liability method, on temporary differences arising between
the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding
tax bases used in the calculation of taxable profit.
Deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Deferred
tax liabilities are recognised for all temporary differences.
Deferred tax is calculated at the rates enacted at the
balance sheet date.
Deferred tax is credited or charged in the income
statement, consolidated statement of comprehensive
income, or retained earnings as appropriate.
I NTA N G I B LE A S S E T S – CO M PUTE R
S O F T WA R E
Acquired computer software licences are capitalised on
the basis of costs incurred to bring to use the specific
software and are amortised over their estimated useful
lives of three years, charged to administrative expenses.
These are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying values
may not be recoverable.
P R O P E R T Y, P L A NT A N D E Q U I P M E NT
Freehold property comprises offices or other buildings
held for administrative purposes. Freehold property is
shown at cost less the subsequent depreciation of
buildings.
All other property, plant and equipment is stated at historic
cost less depreciation. Historic cost includes any costs
directly attributable to bringing the assets to the location
and condition necessary for them to be capable of
operating in the manner intended by management.
Land is not depreciated. Depreciation on other assets is
charged so as to write off the cost of assets to their
residual values over their estimated useful lives, on a
straight line basis as follows:
Buildings within freehold property
Plant and machinery
Fixtures and fittings
50 years
5-10 years
3-5 years
The assets’ useful lives are reviewed and adjusted if
appropriate at each balance sheet date.
These are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying values
may not be recoverable.
The gain or loss arising on the disposal of an asset
represents the difference between the sales proceeds and
the carrying amount of the asset and is recognised in the
income statement.
I N V E S TM E NT I N S U B S I D I A RY CO M PA N I E S
In the parent company books, the investment in its
subsidiaries is held at cost less any impairment.
LE A S E S
At the inception of a contract, the Group assesses whether
a contract is, or contains, a lease.
The Group recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus
any initial direct costs incurred less any lease incentives
received.
The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the end of the lease term.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the
commencement date, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily
determined, the Group’s weighted average incremental
borrowing rate. The lease term comprises the non-
cancellable period of the contract, together with periods
covered by an option to extend the lease where the Group
is reasonably certain to exercise that option. The lease
liability is measured by increasing the carrying amount to
reflect interest on the lease liability, and reducing it by the
lease payments made. The lease liability is remeasured
when the Group changes its assessment of whether it will
exercise an extension or termination option.
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases that have a lease
term of 12 months or less and leases of low value assets.
The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over
the lease term.
The Company presents right-of-use assets separately as
‘Lease right of use assets’ and lease liabilities as ‘Trade
and other payables’ in the statement of financial position.
I N V E NTO R I E S
Inventories are stated at the lower of cost and net
realisable value.
Cost comprises land and associated acquisition costs,
direct materials and subcontract work, other direct costs
and those overheads (based on normal operating capacity)
that have been incurred in bringing the inventories to their
present location and condition, excluding borrowing costs.
These include infrastructure and development costs such
as roads and sewers, including contributions to other
community benefits such as schools, medical centres
and community centres. Inventories (excluding land) are at
standard cost. Abnormal costs are expensed to cost of
sales as incurred.
Land includes refundable land contract exchange deposits.
Total land costs are allocated to the private housing on a
development as, in the case of amenity land and social
housing land, neither has sufficient contribution from sales
of the precise area of the land to cover the land costs and
are a planning requirement of the development.
Provisions are established to write down land where the
estimated net sales proceeds less costs to complete
exceed the current carrying value. Adjustments to the
provisions will be required where selling prices or costs to
complete change.
Net realisable value for land was assessed by estimating
selling prices and cost (including sales and marketing
expenses), taking into account current market conditions
and considering the planning status in respect of
undeveloped land.
This net realisable value provision will be closely monitored
for adequacy and appropriateness as regards under and
over provision to reflect circumstances at future balance
sheet dates. Any material change to the underlying
provision will be reflected through cost of sales.
F O RWA R D L A N D
The Group enters into a number of arrangements for the
purchase of land. Where such arrangements are
conditional on a future event the Group recognises option
fees and other relevant initial costs as they fall due, which
are included initially in inventory and subject to regular
impairment analysis, but does not recognise the full cost of
the land until the option to purchase the land has been
executed. Where the Group enters into an unconditional
contract on deferred payment terms the land purchased is
recognised at contract inception together with a related
liability, discounted at an appropriate rate. The related land
creditors are shown as due within or after one year in line
with the contractual payment terms, as the Directors
believe this information is important in assessing the
Group’s liquidity and timing of future cash flows and debt
profile. In line with industry practice in the cash flow
statement the settlement of land creditors is shown as an
operating cash flow as the Directors believe the financing
of land purchases is integral to the Group’s management of
working capital.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTS
188
Redrow plc Annual Report 2021
189
ACCOU NTI N G P O LI C I E S CO N T I N U E D
E M P LOY E E B E N E F IT S
a. Pension obligation
F I N A N C I A L I N S TR U M E NT S
a. Land creditors
The Group operates two pension schemes for its staff. The
Redrow Staff Pension Scheme (the ‘Scheme’) closed to the
accrual of new benefits with effect from 1 March 2012, with
new benefits now being provided via the Redrow Group
Personal Pension Plan (the ‘GPP’). The Scheme is externally
invested and comprises two sections: a defined benefit
section and a defined contribution section. A defined
benefit plan is a pension plan which defines an amount of
pension benefit that an employee will receive on
retirement. It is funded through payments to trustee
administered funds, determined by actuarial valuations
carried out on at least a triennial basis. A defined
contribution plan is a pension plan under which the Group
pays agreed contributions into a separate fund for each
employee and any subsequent pension payable to a
specific employee is determined by the amount
accumulated in their individual fund. The GPP is also a type
of defined contribution plan.
The asset/(liability) recognised in the balance sheet in
respect of the defined benefit section of the scheme is the
present value of the defined benefit obligation at the
balance sheet date, less the fair value of plan assets. The
defined benefit obligation is determined using the
projected unit credit method on an annual basis by an
independent scheme actuary.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are
charged or credited to equity as they arise in full via the
statement of comprehensive income.
Scheme service costs are charged to cost of sales and
administrative expenses as appropriate and scheme
finance costs are included in net financing costs. Past
service costs are recognised immediately in income.
In respect of the defined contribution section of the
Scheme and the GPP, contributions are recognised as an
employee benefit expense when they are due. The Group
has no further payment obligations in respect of the above
once the contributions have been paid.
b. Bonus plans
The Group recognises a liability and an expense for
bonuses where contractually obliged.
c. Share-based payments
Equity settled share-based payments are measured at fair
value on the date of grant and expensed on a straight line
basis over the vesting period, based on the Group’s
estimate of shares that will eventually vest, having
reassessed any appropriate service and non-market
performance conditions.
Deferred payments arising from land creditors are held at
discounted present value using the effective interest
method, in accordance with IFRS 9. The difference
between the fair value and the nominal value is amortised
over the deferment period via financing costs.
The interest rate applied is an equivalent loan rate
available on the date of the land purchase.
Deferred payments arising from land creditors are
considered as financing rather than operational in nature.
However, in line with industry practice, the Group treats
cash paid in respect of land, including land creditors, as
operating rather than financing cashflows.
b. Derivative financial instruments and hedge accounting
Derivative financial instruments are initially recorded at fair
value and the fair value is remeasured to fair value at each
reporting date.
The Group’s use of financial derivatives is governed by an
interest rate risk management framework adopted by the
Board which sets parameters to ensure an appropriate
level of hedging is maintained to manage interest rate risk
in respect of borrowings.
The policy prohibits any trading in derivative financial
instruments or their use for speculative purposes.
The effective portion of changes in the fair value of
derivative financial instruments which are designated and
which qualify as cash flow hedges are recognised directly
in equity in a hedge reserve. The gains or losses relating to
the ineffective portion are recognised in the income
statement immediately they arise.
c. Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. They are included in current assets,
where considered to be receivable within the Group’s
normal operating cycle of c4 years after the balance sheet
date; otherwise they are classified as non-current assets.
Loans and receivables include ‘trade receivables’ and
‘other receivables’ in the balance sheet.
Trade receivables are held at discounted present value
less any impairment. The amount is then increased to
settlement value over the settlement period via financing
income.
d. Cash and cash equivalents
D I V I D E N D D I S TR I B UTI O N
Dividend distribution to the Company’s shareholders is
recognised as a liability in the Group’s financial statements
at the point at which there is a legal obligation to make a
distribution to shareholders.
Cash and cash equivalents comprise cash balances and
call deposits. Bank overdrafts that are repayable on
demand, forming an integral part of the Group’s cash
management are included as a component of cash and
cash equivalents for the purpose of the statement of
cash flows.
e. Borrowings and trade payables
Interest bearing borrowings and trade payables are
recorded when the proceeds are received, net of
transaction costs incurred and subsequently at amortised
cost. Any difference between the proceeds, net of
transaction costs and the redemption value is recognised
in the income statement over the period of the borrowings.
f. Deposits and payments on account
New property deposits from private customers are held
within Trade and Other payables until the legal completion
of the related property when revenue is recognised or the
rescission of the sale contract.
Payments on account from social and private rented sector
(PRS) customers are held within Trade and Other payables
until legal completion of the related properties when
revenue is recognised.
Deposits received in advance are typically held for a
period of up to 18 months before the associated
performance obligations are satisfied and the revenue is
recognised.
P R OV I S I O N S
Provisions are recognised when the Group has a pursuant
legal or constructive obligation as a result of a past event,
and it is probable that the Group may be required to settle
that obligation. Provisions are measured at the Directors'
best estimate of the expenditure required to settle the
obligation at the balance sheet date and are discounted to
present value where the effect is material.
O N E R O U S CO NTR AC T S
Onerous contracts are contracts in which the unavoidable
costs in meeting the obligations under the contract exceed
the economic benefits expected to be received under it.
Provision is made to reflect management’s best current
estimate of the least net cost of either fulfilling or exiting
the contract.
S H A R E C A P ITA L
Ordinary shares are classed as equity.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTS 190
Redrow plc Annual Report 2021
191
N OTES TO TH E FI N A N C I A L S TATE M E NTS
1 . C R ITI CA L ACCOU NTI N G J U DG E M E NTS A N D K E Y SOU RC E S O F E STI M ATI O N U N C E RTA I NT Y
Judgements and estimates are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Management have not made
any individual critical accounting judgements that are material to the Group other than the disclosure judgement outlined
below. As noted in the accounting policy, in line with industry practice, the Group treats cash paid in respect of land,
including the settlement of land creditors, as operating rather than financing cashflows. This is a judgement as, whilst the
repayment profile of land creditors is important in assessing the Group’s liquidity and timing of future cash outflows, the
Directors believe that settlement of the land creditors is an operating cashflow on the basis that land purchases are
integral to the Group’s working capital management. Management considers the key sources of estimation uncertainty
relate to:
Carrying value of inventories and cost of sales recognition
The Group carries inventories at the lower of cost and net realisable value. Due to the nature of development timescales,
it is routinely necessary to estimate costs to complete and future revenues and to allocate non-unit specific development
costs between units legally completing in the current financial year and thereby impacting current year cost of sales and
in future periods. A full review of the net realisable value of inventories was undertaken by the Group as at 27 June 2021
and this requires Management to use its judgement and experience in assessing any impairment provisions that may be
required. If there are significant movements in UK house prices or development costs compared to Management
expectations then further impairments or reversal of impairments already made may be needed.
The Group has a number of developments where significant estimates and judgements have been made in relation to
the estimated costs to complete. These developments are also affected by a variety of uncertainties that depend on
future events such as inflationary cost pressures, delays and unforeseen build issues due to the nature of infrastructure
works. The Directors consider that the risk is sufficiently mitigated by the processes in place and appropriate levels of
contingency that are calculated based on the past experience of Management with input from internal quantity
surveyors. The Directors consider that it is impractical to provide a quantitative analysis of the estimation uncertainty
involved due to the number of developments; range of estimated cost inputs; and timing of each development.
Pensions
The Group has utilised assumptions including a rate of return on assets, mortality assumptions and a discount rate
having been advised by its actuary. To the extent that such assumed rates are different from what actually transpires, the
retirement benefit obligations of the Group would change. A sensitivity analysis in included on page 201.
The primary risks the Group is exposed to by the defined benefit pension scheme are the movement in corporate bond
yields, the market’s long-term expectations for inflation and movement in mortality rates. The scheme closed to future
accrual with effect from 1 March 2012. See Note 7e.
2 . R E V E N U E A N D O P E R ATI N G P R O F IT
a. Revenue
An analysis of the Group’s revenue is as follows:
Revenue from the sale of new housing
Revenue from the sale of land
2021
£m
1,902
37
1,939
2020
£m
1,332
7
1,339
2 . R E V E N U E A N D O P E R ATI N G P R O F IT CO N T I N U E D
a. Revenue continued
Included within Revenue from the sale of new housing is £236m (2020: £nil) of revenue from contracts with social
housing providers or private rental sector providers on which revenue is recognised over time by reference to the stage
of completion of contract activity. Of this amount £nil (2020: £nil) was included in contract liabilities at the beginning of
the year. The amount of revenue recognised in the current period from performance obligations satisfied (or partially
satisfied) in previous periods was £nil (2020: £nil).
Contract assets
Contract liabilities
Note
13
16
2021
£m
2020
£m
21
68
–
–
The contract assets relate to the Group's rights to consideration for work completed but not invoiced at the balance
sheet date for contracts on which revenue is recognised over time.
The contract liabilities, which are included within social customer payments on account in note 16, relate to the advance
consideration from customers at the balance sheet date for contracts on which revenue is recognised over time.
The following table shows further revenue of £213m (2020: £nil) expected to be recognised in future years in respect of
contracts on which revenue is recognised over time:
Year ending June £m
Year ending June %
b. Operating profit
Operating profit is stated after charging:
Inventories expensed in the year
Amortisation
Depreciation – Property, plant and equipment
Depreciation – Lease right of use assets
Research and development expenditure
Auditors’ remuneration – fees payable to the Company’s Auditors for audit services (i)
– fees payable to the Company’s Auditors for other services (ii)
Fees payable to the Company’s Auditors comprise:
2022
2023
2024
Total
144
68
59
28
10
4
213
100
Note
2021
£m
2020
£m
14
1,465
1,027
8
9
10
2
2
3
–
1
–
–
4
3
–
–
–
(i)
fees payable for the audit of parent company and consolidated financial statements £141,250 (2020: £50,000) and
fees payable for the audit of the Company’s subsidiaries pursuant to legislation £423,750 (2020: £183,105).
(ii)
Auditors’ remuneration for other services comprised £75,000 (2020: £36,895) in respect of an independent review
of the half-yearly financial statement.
Amounts receivable by the Group's auditor in respect of pension services performed for the pension trustees is £nil
(2020: £40k).
The 2021 ratio of non-audit fees to audit fees is 1:7.53 (2020: 1:6.32).
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTS 192
Redrow plc Annual Report 2021
193
3 . N E T F I N A N C I N G CO S T S
Interest payable on bank loans
Imputed interest on deferred land creditors
Financial costs
Other interest receivable
Financial income
Net financing costs
4 . I N CO M E TA X E X P E N S E
Current tax charge
UK Corporation Tax in respect of current year
Adjustment in respect of prior years
Current tax charge
Deferred tax
Origination and reversal of temporary differences
Adjustment in respect of prior years
Deferred tax charge
Total income tax charge income statement
Reconciliation of tax charge for the year
Profit before tax
Tax calculated at UK Corporation Tax rate at 19.0% (2020: 19.0%)
Tax charge for the year
Deferred tax recognised directly in equity
Relating to pension scheme
Current income tax charge in the Company is £nil (2020: £1m).
Information on the impact of future tax rate changes is included in note 12.
5 . D I V I D E N D S
The following dividends were paid by the Group:
Prior year final dividend per share of nil p (2020: 20.5p); Current year interim dividend per
share of 6.0p (2020: nil p)
2021
£m
2020
£m
(5)
(3)
(8)
1
1
(7)
(5)
(5)
(10)
2
2
(8)
2021
£m
2020
£m
59
–
59
1
–
1
60
314
60
60
9
9
2021
£m
21
21
27
(4)
23
1
3
4
27
140
27
27
–
–
2020
£m
72
72
6 . E A R N I N G S P E R O R D I N A RY S H A R E
The basic earnings per share calculation for the 52 weeks ended 27 June 2021 is based on the weighted average
number of shares in issue during the period of 344m (2020: 343m) excluding those held in trust under the Redrow Long
Term Incentive Plan (8m shares (2020: 9m shares)), which are treated as cancelled.
Diluted earnings per share has been calculated after adjusting the weighted average number of shares in issue for all
potentially dilutive shares held under unexercised options.
For the 52 weeks ended 27 June 2021
Basic earnings per share
Effect of share options and SAYE
Diluted earnings per share
For the 52 weeks ended 28 June 2020
Basic earnings per share
Effect of share options and SAYE
Diluted earnings per share
7. E M P LOY E E S
a. Cost (including Directors)
Wages and salaries
Social security costs
Other pension costs
Share-based payments
b. Number
The monthly average number of persons employed by the Group was:
Directors and administrative staff
Other personnel
Earnings
£m
254
–
254
Number
of shares
millions
344
1
345
Per share
pence
73.7
(0.1)
73.6
Earnings
£m
Number
of shares
millions
Per share
pence
113
–
113
343
2
345
32.9
(0.1)
32.8
GROUP
COMPANY
2021
£m
109
13
9
6
137
2020
£m
104
15
10
5
134
2021
£m
2020
£m
2
1
–
1
4
3
1
–
–
4
GROUP
COMPANY
2021
Number
880
1,328
2,208
2020
Number
946
1,418
2,364
2021
Number
2020
Number
8
–
8
8
–
8
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 194
Redrow plc Annual Report 2021
195
7. E M P LOY E E S CO N T I N U E D
c. Key management remuneration
Key management personnel, as defined under IAS 24 ‘Related party disclosures’, are identified as the Executive
Management Team and the Non-Executive Directors.
Summary key management remuneration is as follows:
Salaries and short-term employee benefits
Share-based payments
2021
£m
5
2
7
2020
£m
4
1
5
The number of Directors where retirement benefits are accruing in respect of defined benefit schemes are 2 (2020: 2).
The aggregate amount of gains made by Directors on the exercise of share options was £0.5m (2020: £1.8m).
Detailed disclosure of Directors’ emoluments and interests in shares are included in the Directors’ Remuneration Report
on pages 128 to 153, notably the 'Single Total Figure of Remuneration Table (Audited)' on page 144 which details
remuneration paid to or received by directors in respect of qualifying services, and the 'Statement of Shareholding and
Scheme Interests (Audited)' on page 147 and 148.
d. Share-based payments
Save As You Earn Share Option scheme (SAYE)
The Redrow plc SAYE scheme is open to all employees and share options can be exercised either three or five years
after the date of grant, depending on the length of the savings contract. The SAYE schemes are not subject to
performance conditions.
The SAYE schemes have been valued using the Black-Scholes pricing model.
Options granted during the year
Date of grant
Fair value at measurement date
Share price
Exercise price
Option life (contract length)
Expected dividend yield
Risk free interest rate
2021
1,634,869
2020
791,921
1 January 2021
1 January 2020
£1.65
£4.72
£3.78
£2.17
£6.18
£4.94
3/5 years
3/5 years
3.38%
1.5%
3.38%
1.5%
The expected volatility on SAYE schemes is based on the historic volatility of the Group’s share price over periods equal
to the length of the savings contract.
Long Term Incentive scheme (LTIP)
Except in specified circumstances, options granted under the scheme are exercisable between three and ten years after
the date of grant.
Options granted under the LTIP on 22 September 2020 were granted to a limited number of Senior Executives. The
scheme is discussed in greater detail within the Directors’ Remuneration Report notably within the 'Directors'
Remuneration Policy' on page 136.
7. E M P LOY E E S CO N T I N U E D
d. Share-based payments continued
The LTIP has been valued using the Black-Scholes pricing model.
Options granted during the year
Date of grant
Fair value at the measurement date
Share price
Exercise price
Expected volatility
Option life
Expected dividend yield
Risk free interest rate
2021
763,758
2020
456,376
22 September 2020
11 September 2019
£4.053
£4.053
£0.00
N/A*
3 years
N/A
N/A*
£5.945
£5.945
£0.00
N/A*
3 years
N/A
N/A*
*
For nil-cost awards not subject to a market based condition, volatility and risk free rate are not applicable.
The fair value at the measurement date of the LTIP granted on 22 September 2020 comprises £4.053 in respect of
non-market based performance conditions.
The fair value at the measurement date of the LTIP granted on 11 September 2019 comprises £5.945 in respect of
non-market based performance conditions.
Deferred Bonus Incentive (DBI)
Grants under the DBI were limited to Senior Management. Except in specified circumstances options granted under the
scheme are exercisable between one and ten years after the date of grant for Tranche 1 and between two and ten years
after the date of grant for Tranche 2 and are not subject to performance conditions.
In respect of options granted during the financial year ended 27 June 2021, Deferred Bonus Incentive Tranche 1 and 2
were absolute contractual entitlements to a small number of individuals and were granted on 22 September 2020. For
the majority of senior management participating in this bonus scheme, due to the impact of the COVID-19 pandemic, a
lesser, discretionary bonus was granted on 15 March 2021 and due to quantum was granted as a single tranche vesting
on 15 March 2022.
The DBI has been valued using the Black-Scholes pricing model.
Options granted during the year
147,329
2021
Single Tranche
2021
Tranche 1
37,297
2021
Tranche 2
37,302
2020
Tranche 1
488,481
2020
Tranche 2
488,611
Date of grant
Fair value at the measurement date
Share price
Exercise price
Expected volatility
Option life
Expected dividend yield
Risk free interest rate
15 March
2021
22 September
2020
22 September
2020
11 September
2019
11 September
2019
£6.172
£6.172
£0.00
N/A*
1 year
N/A
N/A*
£4.053
£4.053
£0.00
N/A*
1 year
N/A
N/A*
£4.053
£4.053
£0.00
N/A*
2 years
N/A
N/A*
£5.945
£5.945
£0.00
N/A*
1 year
N/A
N/A*
£5.945
£5.945
£0.00
N/A*
2 years
N/A
N/A*
*
For nil-cost awards not subject to a market based condition, volatility and risk free rate are not applicable.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED
196
Redrow plc Annual Report 2021
197
7. E M P LOY E E S CO N T I N U E D
d. Share-based payments continued
Share options outstanding
The following share options were outstanding at 27 June 2021:
7. E M P LOY E E S CO N T I N U E D
d. Share-based payments continued
Movements in the year
The number and weighted average exercise prices of share options is as follows:
Type of scheme
Long Term Share Incentive 2017
Long Term Share Incentive 2018
Long Term Share Incentive 2019
Long Term Share Incentive 2020
Deferred Bonus Incentive 2012 – Tranche 1
Deferred Bonus Incentive 2012 – Tranche 2
Deferred Bonus Incentive 2013 – Tranche 1
Deferred Bonus Incentive 2013 – Tranche 2
Deferred Bonus Incentive 2014 – Tranche 1
Deferred Bonus Incentive 2014 – Tranche 2
Deferred Bonus Incentive 2015 – Tranche 1
Deferred Bonus Incentive 2015 – Tranche 2
Deferred Bonus Incentive 2016 – Tranche 1
Deferred Bonus Incentive 2016 – Tranche 2
Deferred Bonus Incentive 2017 – Tranche 1
Deferred Bonus Incentive 2017 – Tranche 2
Deferred Bonus Incentive 2018 – Tranche 1
Deferred Bonus Incentive 2018 – Tranche 2
Deferred Bonus Incentive 2019 – Tranche 1
Date of grant
Number
of options
2021
Number
of options
2020
Exercise
price
15 November 2017
–
278,973
10 September 2018
272,244
291,354
11 September 2019
411,800
434,929
22 September 2020
712,870
23 October 2012
23 October 2012
24 September 2013
24 September 2013
8 September 2014
8 September 2014
14 September 2015
14 September 2015
12 September 2016
12 September 2016
11 September 2017
11 September 2017
10 September 2018
10 September 2018
11 September 2019
4,656
4,656
4,642
4,642
3,615
3,615
3,069
3,070
5,136
11,220
7,193
9,694
19,920
83,123
91,653
–
4,656
4,656
4,642
4,642
3,615
3,615
3,089
3,090
16,780
19,318
18,553
40,249
61,991
418,050
419,794
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Deferred Bonus Incentive 2019 – Tranche 2
11 September 2019
358,959
419,904
Deferred Bonus Incentive 2020 – Tranche 1
Deferred Bonus Incentive 2020 – Tranche 2
22 September 2020
22 September 2020
31,013
31,016
Deferred Bonus Incentive 2020 – Single Tranche
15 March 2021
142,569
–
–
–
Save As You Earn
Save As You Earn
Save As You Earn
Save As You Earn
Save As You Earn
Save As You Earn
1 January 2016
1 January 2017
10,140
73,400
55,899
93,139
1 January 2018
71,482
533,938
1 January 2019
369,466
510,860
1 January 2020
371,617
688,326
1 January 2021
1,549,436
–
£3.70
£3.20
£4.90
£4.62
£4.94
£3.78
The total share options outstanding at 27 June 2021 under the LTIP, Deferred Bonus Incentive Plan and the Save As You
Earn schemes represent 1.3% of the issued share capital (2020: 1.2%).
Long Term Share Incentive scheme:
Outstanding at the beginning of the year
Lapsed during the year
Exercised during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
Deferred Bonus Incentive scheme:
Outstanding at the beginning of the year
Lapsed during the year
Exercised during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
Save As You Earn scheme:
Outstanding at the beginning of the year
Lapsed during the year
Exercised during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
Number
of options
2021
Weighted
average
exercise price
2021
Number
of options
2020
Weighted
average
exercise price
2020
1,005,256
(372,100)
–
763,758
1,396,914
–
1,446,644
(61,319)
(783,792)
221,928
823,461
267,829
1,882,162
(654,768)
(416,722)
1,634,869
2,445,541
52,367
–
–
–
–
–
–
–
–
–
–
–
–
£4.72
£4.68
£4.76
£3.78
£4.09
£4.67
965,330
(139,100)
(277,350)
456,376
1,005,256
–
1,718,132
(236,191)
(1,012,389)
977,092
1,446,644
204,572
2,293,006
(442,661)
(760,104)
791,921
1,882,162
16,927
–
–
–
–
–
–
–
–
–
–
–
–
£4.04
£4.51
£3.02
£4.94
£4.72
£3.20
The weighted average share price at the date of exercise of share options exercised during the year was £5.16 (2020:
£6.67).
The options outstanding at 27 June 2021 had a range of exercise prices of £nil to £4.94 (2020: £nil to £4.94) and a
weighted average remaining contractual life of 5.1 years (2020: 5.6 years).
The expected life used in the models has been adjusted, based on best estimates, to reflect exercise restrictions and
behavioural considerations.
The charge to income in relation to equity settled share-based payments in the year is £6m (2020: charge £5m).
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 198
Redrow plc Annual Report 2021
199
7. E M P LOY E E S CO N T I N U E D
e. Retirement benefit schemes
The Redrow Staff Pension Scheme comprises a defined benefit scheme. The Company also offers a defined contribution
scheme to employees. The defined benefit scheme was closed to new entrants from July 2006, having been closed to
all but a limited number of agreed new entrants from October 2001. The defined benefit scheme was closed to future
accrual with effect from 1 March 2012.
The Scheme operates within the frameworks of the applicable pension’s legislation and is regulated by the Pensions
Regulator. The Scheme is managed by a board of Trustees who act in line with legislation and the provisions set out
within the Trust Deed and Rules which underpin the day-to-day operation of the Scheme. The Trustees' overarching aim
is to ensure that there are sufficient monies available to pay members benefits when they fall due. The Trustees work in
collaboration with the Company to manage the risks that this aim might not be met.
The total pension credit for the year was £7m (2020: charge of £9m). A credit of £16m related to the defined benefit
section of the Scheme (2020: credit of £1.0m), with £nil being charged to the income statement (2020: charge of £nil) and
a credit of £16m to the statement of comprehensive income (2020: credit of £1m). The charge arising from the defined
contribution section was £9m (2020: £10m). There were no significant events during the year to report (i.e. plan
amendments, curtailments or settlements).
Triennial valuation
A full independent triennial actuarial valuation of the defined benefit section of the Scheme was undertaken at 1 July
2020 using the Projected Unit Method. As at 1 July 2020, in the opinion of the Actuary, there was a deficit of £4m in the
defined benefit section of the Scheme, based on the Trustees’ technical provisions assumptions with the Scheme’s
assets representing 98% of the Scheme’s technical provisions. As at 1 July 2020 the value of the defined benefit section
of the Scheme’s assets was £172m. The previous triennial valuation was undertaken as at 1 July 2017 and reported a
deficit of £15m.
Defined benefit scheme – IAS 19R valuation
Redrow recognises all actuarial gains and losses for its defined benefit plan in the period in which they occur, outside
the income statement, in the statement of comprehensive income.
This disclosure relates to the defined benefit section of the Scheme. The Scheme’s assets are held separately from the
assets of Redrow and are administered by the trustees and managed professionally.
The latest formal actuarial valuation of the defined benefit section was carried out at 1 July 2020. This valuation has been
updated to 27 June 2021 by a qualified actuary for the purposes of these financial statements.
During the year, the Group continued to pay its agreed contributions of £250,000 per month until March 2021 when it
was agreed between the Group and the Trustees that company contributions could cease due to the Scheme being over
100% funded on the Technical Provisions basis. The Group therefore contributed £2.3m to the Scheme in the year ended
27 June 2021 (2020: £3m) and expects to contribute £nil to the Scheme in the year ending 3 July 2022.
The major financial assumptions used in arriving at the IAS 19R valuation were:
Long-term rate of increase in pensionable salaries
Rate of increase of benefits in payment (lesser of 5% per annum and RPI)1
Rate of increase of benefits in payment (lesser of 2.5% per annum and RPI)2
Discount rate
Inflation assumption – RPI
– CPI
1
2
In respect of pensions in excess of the guaranteed minimum pension earned prior to 30 June 2006.
In respect of pensions earned after 30 June 2006. Other pension increases are valued in a consistent manner.
2021
N/A
3.2%
2.1%
1.9%
3.4%
2.8%
2020
N/A
2.9%
2.0%
1.6%
3.1%
2.3%
7. E M P LOY E E S CO N T I N U E D
e. Retirement benefit schemes continued
In March 2020, the Chancellor of the Exchequer and UK Statistics Authority jointly issued a consultation on changing the
Retail Price Index (RPI) formula. In November 2020 the outcome of the consultation was published with the intention that
the RPI index will be amended to reflect the Consumer Price Index including housing (CPIH) from 2030. The inflation
assumptions have been considered in light of this.
The mortality tables used in the actuarial valuation were as follows (which make allowance for projected further
improvements in mortality):
For male and female members:
Trend)
SAPS3 CMI_2020 1.50% Long Term Trend (2020: SAPS2 CMI_2019 1.50% Long Term
The life expectancies from age 65 implied by these tables for typical members are:
Pensioner currently aged 65:
Male 22.3 years (2020: Male 22 years)
Future pensioner currently aged 45: Male 24.4 years (2020: Male 24.1 years)
Female 24.6 years (2020: Female 23.9 years)
Female 26.8 years (2020: Female 26.2 years)
No adjustments have been made to mortality assumptions at the year end to reflect the potential effects of COVID-19 as
the actual plan experience is not yet available and as it is too soon to make a judgement on the impact of the pandemic
on future mortality improvements. The mortality experience analysis for the Scheme will be carried out in the future as
part of the 1 July 2023 funding valuation for the defined benefit section of the Scheme.
It has been assumed that members take 80% of the maximum tax-free cash available to them at the point they retire via
commutation of their pension; this is based on the current commutation factors in use for the defined benefit scheme.
The total assets, the split between the major asset classes in the Scheme, the present value of the Schemes’ liabilities
and the amounts recognised in the balance sheet are shown below:
GROUP AND COMPANY
2021
£m
2021
£m
Quoted
market price in
active market
No quoted
market price in
active market
2020
£m
2020
£m
2021
£m
Total
Quoted
market price in
active market
No quoted
market price in
active market
Equities
Debt instruments
Real estate
Investment funds
Other
Cash
Insurance policies
Total market value of assets
Present value of obligations
Surplus in the Scheme
74
70
2
5
6
17
–
174
–
–
–
–
–
–
3
3
74
70
2
5
6
17
3
177
(137)
40
62
84
2
4
6
12
–
170
–
–
–
–
–
–
3
3
2020
£m
Total
62
84
2
4
6
12
3
173
(151)
22
The Scheme’s assets are invested in such a way so as to ensure that the assets are sufficient and appropriate to meet
the associated liabilities as they fall due. In selecting the assets, consideration is given to the nature of the liabilities and
the investment strategy of the Scheme includes an allocation to liability driven investments to mitigate the impacts of
changes in interest rates and inflation on both the assets and liabilities.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 200
Redrow plc Annual Report 2021
201
7. E M P LOY E E S CO N T I N U E D
e. Retirement benefit schemes continued
The defined benefit obligation can be approximately attributed to the scheme members as follows:
7. E M P LOY E E S CO N T I N U E D
e. Retirement benefit schemes continued
Deferred members
Pensioner members
2021
%
66
34
100
2020
%
72
28
100
All benefits are vested at 27 June 2021 (unchanged from 28 June 2020).
Following a High Court ruling on 26th October 2018, at the 2019 year-end the Company made an allowance within the
defined benefit obligation for the estimated liabilities associated with the requirement to provide equalised benefits to
male and female members in respect of Guaranteed Minimum Pensions (GMPs); otherwise known as ‘GMP Equalisation’.
GMP Equalisation is an issue that impacts all defined benefit schemes that were contracted out of the State additional
second pension between 17 May 1990 and 5 April 1997. For the DB Scheme, the additional liability in respect of GMP
Equalisation is broadly 0.5% of the defined benefit obligation and continues to be included in this figure.
The total amounts credited/(charged) against income in the year were as follows:
Amounts included within the income statement:
Administrative expenses
Past service cost
Net interest on defined benefit liability
Amounts recognised in the statement of comprehensive income:
Return on scheme assets excluding interest income
Actuarial movements arising from changes in demographic assumptions
Actuarial movements arising from changes in financial assumptions
Actuarial movements arising from experience adjustments
GROUP AND COMPANY
2021
£m
2020
£m
–
–
–
3
(4)
1
16
16
16
–
–
–
24
(1)
(22)
–
1
1
Balance sheet surplus
At start of year
Amounts credited against statement of comprehensive income
Employer contributions paid
At end of year
Changes in the present value of the defined benefit obligation:
At start of year
Interest expense
Benefit payments
Actuarial movements arising from changes in demographic assumptions
Actuarial movements arising from changes in financial assumptions
Actuarial movements arising from experience adjustments
At end of year
Changes in the fair value of the Scheme’s assets:
At start of year
Interest income
Return on scheme assets excluding interest income
Normal employer contributions
Benefit payments
At end of year
GROUP AND COMPANY
2021
£m
2020
£m
22
16
2
40
151
2
(3)
4
(1)
(16)
137
173
2
3
2
(3)
177
18
1
3
22
130
3
(5)
1
22
–
151
148
3
24
3
(5)
173
The Scheme rules permit the refund of any surplus to the Company with no restrictions. The surplus has therefore been
recognised in full in the Group and Company balance sheets and there is no requirement to restrict the surplus nor to
recognise any additional liability in respect of agreed deficit contributions.
Sensitivity of key assumptions
The table below gives a broad indication of the impact on the IAS 19R numbers to changes in assumptions and
experience (away from the assumptions shown on page 198). All figures are before allowing for deferred tax.
The amount included in the balance sheet arising from the surplus in respect of the Group’s defined benefit section is as
follows:
Item
Approximate amount
2021
Approximate amount
2020
Present value of defined benefit obligation (£m)
Discount rate -25 basis points
Discount rate +25 basis points
Price inflation rate -25 basis points
Price inflation rate +25 basis points
Post-retirement mortality assumption -1 year age adjustment
Weighted average duration of defined benefit obligation (in years)
Discount rate -25 basis points
Discount rate +25 basis points
144.0
130.0
131.8
142.0
141.9
20.5
20.4
160.2
143.3
144.9
157.4
156.6
22.5
22.2
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 202
Redrow plc Annual Report 2021
203
8. INTANGIBLE ASSETS
The Group
Cost
At 1 July 2019
Additions
Disposals
At 28 June 2020
Additions
Disposals
At 27 June 2021
Accumulated amortisation
At 1 July 2019
Charge
Disposals
At 28 June 2020
Charge
Disposals
At 27 June 2021
Net book value
At 27 June 2021
At 28 June 2020
At 30 June 2019
Goodwill
£m
Software
£m
Total
£m
Freehold
property
£m
Plant and
machinery
£m
Fixtures
and fittings
£m
Total
£m
9. P R O P E R T Y, P L A NT A N D E Q U I P M E NT
The Group
1
–
–
1
–
–
1
–
–
–
–
1
–
1
–
1
1
3
–
(1)
2
–
–
2
2
–
(1)
1
1
–
2
–
1
1
4
–
(1)
3
–
–
3
2
–
(1)
1
2
–
3
–
2
2
Cost
At 1 July 2019
Additions
Disposals
At 28 June 2020
Additions
Disposals
At 27 June 2021
Accumulated depreciation
At 1 July 2019
Charge
Disposals
At 28 June 2020
Charge
Disposals
At 27 June 2021
Net book value
At 27 June 2021
At 28 June 2020
At 30 June 2019
19
5
–
24
–
–
24
5
1
–
6
1
–
7
17
18
14
3
–
–
3
–
–
3
3
–
–
3
–
–
3
–
–
–
11
2
(2)
11
2
(2)
11
9
3
(2)
10
1
(2)
9
2
1
2
33
7
(2)
38
2
(2)
38
17
4
(2)
19
2
(2)
19
19
19
16
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 204
Redrow plc Annual Report 2021
205
1 0. LE A S E R I G HT O F U S E A S S E T S
The Group
Cost
Opening lease right of use asset recognised on adoption of IFRS 16
Additions
At 28 June 2020
Additions
Disposals
At 27 June 2021
Accumulated depreciation
Opening lease right of use asset recognised on adoption of IFRS 16
Charge
At 28 June 2020
Charge
At 27 June 2021
Net book value
At 27 June 2021
At 28 June 2020
Property
£m
Photocopiers
£m
Vehicles
£m
Total
£m
4
–
4
–
–
4
–
1
1
1
2
2
3
1
–
1
–
–
1
–
–
–
–
–
1
1
3
2
5
3
(1)
7
–
2
2
2
4
3
3
8
2
10
3
(1)
12
–
3
3
3
6
6
7
1 0. LE A S E R I G HT O F U S E A S S E T S CO N T I N U E D
The Group continued
Lease liabilities
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities
As at
27 June
2021
£m
As at
28 June
2020
£m
3
4
–
7
3
4
1
8
On implementation of IFRS 16 leases, lease payment commitments are reported within trade and other payables.
Lease liabilities included in the statement of financial position
Current
Non-current
Amounts recognised in profit or loss
Interest on lease liabilities
Amounts recognised in the statement of cashflows
Total cash outflow for leases
As at
27 June
2021
£m
As at
28 June
2020
£m
2
4
6
2
4
6
As at
27 June
2021
£m
As at
28 June
2020
£m
–
–
As at
27 June
2021
£m
As at
28 June
2020
£m
3
3
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED
206
Redrow plc Annual Report 2021
207
1 1 . I N V E S TM E NT S
a. Investments
Joint ventures
b. Investments in joint ventures
Share of joint venture net assets:
Current assets
Current liabilities
Non-current liabilities
Net assets
Loans from Group companies (i)
Share of post-tax profits from joint ventures:
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Finance costs
Profit before tax
Taxation
GROUP
COMPANY
2021
£m
–
–
2020
£m
9
9
2021
£m
–
–
2020
£m
–
–
GROUP
COMPANY
2021
£m
2020
£m
2021
£m
2020
£m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8
(3)
(5)
–
9
9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(i) £nil m of the loans to joint ventures are secured (2020: £9m).
The Group’s joint venture investments were:
• Its 50% shareholding in the ordinary share capital of Menta Redrow Limited and Menta Redrow (II) Limited, both
companies incorporated in Great Britain with a 30 June year end. Menta Redrow Limited and Menta Redrow (II) Limited
were formed to pursue redevelopment opportunities in Croydon.
• On 23 September 2020 Menta Developments Ltd purchased Redrow’s remaining investment in Menta Redrow Limited
and Menta (Regeneration) Limited purchased Redrow’s remaining investment in Menta (II) Limited. No profit or loss was
generated.
c. Investments in subsidiary undertakings
At 28 June 2020 and 27 June 2021
Company
£m
–
1 1 . I N V E S TM E NT S CO N T I N U E D
c. Investments in subsidiary undertakings continued
The principal subsidiary company is Redrow Homes Limited. All subsidiary companies are incorporated in Great Britain
except Redrow Homes (Park Heights) Limited which is incorporated in Jersey. A full list of subsidiary undertakings as at
27 June 2021 is shown below. The capital of all the subsidiary companies, consisting of ordinary shares, is wholly owned
by HB (HDG) Limited which in turn is wholly and directly owned by Redrow plc.
The principal activity of Redrow Homes Limited, Redrow Real Estate Limited, Redrow Regeneration plc, The Waterford
Park Company Limited and The Waterford Park Company (Balmoral) Limited is residential development. The principal
activity of Harrow Estates plc is land acquisition, development and resale. HB (HDG) Limited is an intermediate holding
company. St David’s Park Limited principal activity is business park maintenance services.
Those subsidiaries marked with † are dormant and exempt from audit.
All the subsidiaries registered office is Redrow House, St David’s Park, Flintshire, CH5 3RX apart from those marked (i)
and (ii) whose registered offices are as follows:
(i) c/o TLT LLP, 140 West George Street, Glasgow, G2 2HG
(ii)
13 Castle Street, St. Helier, Jersey, JE4 5UT
Subsidiaries
Name
HB (HDG) Limited
Redrow Homes Limited
Harrow Estates plc
Redrow Real Estate Limited
Redrow Regeneration plc
Redmira Limited †
HB (NW) Limited †
HB (LCS) Limited (i) †
HB (MID) Limited †
HB (SW) Limited †
HB (SWA) Limited †
HB (Y) Limited †
HB (ESTN) Limited †
HB (WM) Limited †
HB (SM) Limited †
HB (SN) Limited †
HB (WC) Limited †
HB (WX) Limited †
HB (EM) Limited †
HB (CD) Limited †
HB (GRPS) Limited †
HB (CPTS) Limited †
HB (SE) Limited †
HB (CSCT) Limited (i) †
HB (SC) Limited (i) †
Company
Number
1990709
1990710
6825371
3996541
5405272
7587765
1189328
SC38052
2469449
3522335
2230870
2293006
4017345
3379746
3522321
Name
HB (1995) Limited (i) †
Redrow Homes (Wallyford) Limited (i) †
St David’s Park Limited
PB0311 Limited †
Debut Freeholds Limited †
Tay Homes (Western) Limited †
Tay Homes (Northern) Limited †
Tay Homes (Midlands) Limited †
Tay Homes (North West) Limited †
Redrow Homes (Park Heights) Limited (ii) †
Redrow Construction Limited †
Poche Interior Design Limited †
Redrow (Shareplan) Limited †
Cadmoore Limited †
Redrow (Sudbury) Limited †
537405
The Waterford Park Company Limited
4984069
1940936
2827161
2034733
2898913
1079513
3988594
SC231364
SC74732
The Waterford Park Company (Balmoral)
Limited
HB (Herne Bay No 1) Limited †
HB (Herne Bay No 2) Limited †
Redrow Homes East Midlands Limited †
Radleigh Construction Limited †
Radleigh Homes Limited †
Radbourne Edge (Holdings) Limited †
Redrow Langley Limited †
Radleigh (Hackwood) Limited †
Company
Number
SC155021
SC205159
2479183
7577839
4638403
2806562
2708575
2183136
2189721
66240
1375826
2169473
3520984
3977222
4558070
5429823
6047122
7743649
9163243
4219459
4219460
4210633
8737345
7306461
8131049
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 208
Redrow plc Annual Report 2021
209
1 2 . D E F E R R E D TA X A S S E T S A N D LI A B I LITI E S
The following are the deferred tax assets and liabilities recognised by the Group and the movements thereon during the
current and prior year:
1 3 . TR A D E A N D OTH E R R E C E I VA B LE S
Deferred tax assets
At 1 July 2019
Charge to income
Charge to equity
At 28 June 2020
Charge to income
Charge to equity
At 27 June 2021
Deferred tax liabilities
At 1 July 2019
Charge to income
At 28 June 2020
Charge to income
Charge to equity
At 27 June 2021
Imputed
interest
£m
Short-term
temporary
differences
£m
Total
£m
3
(3)
–
–
–
–
–
1
–
–
1
–
–
1
4
(3)
–
1
–
–
1
Employee
benefits
£m
Short-term
temporary
differences
£m
Total
£m
(3)
(1)
(4)
–
(9)
(1)
–
(1)
(1)
–
(4)
(1)
(5)
(1)
(9)
(13)
(2)
(15)
Non-current assets
Trade receivables (net)
Amounts due from subsidiary companies
Current assets
Trade receivables (net)
Contract assets
Amounts due from subsidiary companies
Other receivables
Prepayments
GROUP
COMPANY
2021
£m
2020
£m
–
–
–
54
21
–
21
4
100
–
–
–
25
–
–
8
5
38
2021
£m
–
420
420
–
–
361
–
–
361
2020
£m
–
774
774
–
–
300
–
–
300
Non-current trade receivables are stated after an allowance of £nil has been made (2020: £nil) in respect of expected
credit losses. This allowance is based on an estimate of default rates. £nil provision was made during the year (2020:
£nil). £nil was utilised (2020: £nil). Current trade assets are stated after an allowance of £8m (2020: £4m) in respect of
expected credit losses with £nil provision utilised (2020: £nil), £nil provision released (2020: £1m) and £4m provision
created (2020: £nil).
Amounts due from subsidiary companies are unsecured, repayable on demand and carry interest at market rate. The
balance classified as current is anticipated to be repayable within the normal operating cycle of the subsidiary
businesses (c4 years as explained in more detail on page 188). Of this amount £100m (2020: £75m) is expected to be
recovered within 12 months of the balance sheet date.
The Group has no material unrecognised deferred tax assets.
1 4 . I N V E NTO R I E S
A reduction in the UK corporation tax rate from 19% to 17% (effective April 2020) was substantively enacted on 6
September 2016. The March 2020 Budget announced that a rate of 19% would continue to apply with effect from 1 April
2020, and this change was substantively enacted on 17 March 2020.
An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May
2021. This will increase the Company's future current tax charge accordingly. The deferred tax asset at 27 June 2021 has
been calculated based on these rates (2020: 19%) with the exception of the deferred tax liability on employee benefits
which has been calculated at 35% (2020: 19%). This reflects the results of the latest triennial valuation of the defined
benefit section of The Redrow Staff Pension Scheme (see page 198) which now suggests the return of the IAS 19 surplus
is highly likely to take the form of a lump sum cash refund rather than a reduction in future deficit contributions.
Land for development
Work in progress
Stock of show homes
GROUP
COMPANY
2021
£m
1,526
910
77
2020
£m
1,538
972
75
2,513
2,585
2021
£m
2020
£m
–
–
–
–
–
–
–
–
Inventories of £1,465m were expensed in the year (2020: £1,027m). Work in progress includes £1m (2020: £1m) in respect
of part exchange properties. Land held for development in the sum of £210m is subject to a legal charge as security in
respect of deferred consideration (2020: £160m).
The carrying value of undeveloped land where net realisable value has been determined on the basis of a sale of land in
its current state is £16m (2020: £33m). £5m of impairment costs arising for the strategic decision to scale back our
London operations were expensed in the year (2020: £35m).
The Directors consider all inventory to be current in nature as they are expected to be realised within the Group’s normal
operating cycle of c4 years.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 210
Redrow plc Annual Report 2021
211
1 5 . F I N A N C I A L R I S K M A N AG E M E NT
The Group’s financial instruments comprise cash and cash equivalents, bank loans and overdrafts, derivative financial
instruments and various items included within trade receivables and trade payables which arise during the normal
course of business.
1 5 . F I N A N C I A L R I S K M A N AG E M E NT CO N T I N U E D
b. Maturity of bank loans and borrowings continued
The Company
The tables that follow provide a summary of financial assets and liabilities by category.
The accounting policies for financial instruments have been applied to the following items:
The Group’s activities expose it to a variety of financial risks.
Financial risk management is conducted centrally using policies approved by the Board. Market risk is negligible due to
the Group’s limited exposure to equity securities (some limited exposure arises through the Redrow Staff Pension
Scheme’s investment portfolio) and the associated price risk. Its foreign exchange exposure is negligible given the
nature of the Group’s business and its exclusive UK activities.
a. Liquidity risk and interest rate risk
Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its obligations as they fall
due. Liquidity risks are managed through the regular review of cash forecasts and by maintaining adequate committed
banking facilities to ensure appropriate headroom.
At 27 June 2021, the Group had total unsecured bank borrowing facilities of £353m, representing £350m committed
facilities and £3m uncommitted facilities.
The Group’s cash surpluses arise from short-term timing differences. As a consequence the Group does not consider it
bears significant risk of changes to income and cash flows as a result of movements on interest rates on its interest
bearing assets.
The Group is exposed to interest rate risk as it borrows money at floating rates. The Group’s interest rate risk arises
primarily from long-term borrowings. In order to manage its interest rate risk, the Group from time to time enters into
simple risk management products, almost exclusively interest rate swaps. All interest rate swaps are sterling
denominated. The swaps are arranged so as to match with those of the underlying borrowings to which they relate.
There were no interest rate swaps in place in 2021 or 2020.
The following table shows the profile of interest bearing debt together with its effective interest rates including non-
utilisation fees.
Effective
interest
rate
%
8.1
Bank loans –
floating rate
2021
2020
Total
£m
Zero
to one year
£m
One
to two
years
£m
Two
to five
years
£m
Effective
interest
rate
%
Zero
Total
£m
to one year
£m
One
to two
years
£m
Two
to five
years
£m
–
–
–
–
–
–
–
–
2.1
170
170
–
–
–
–
170
170
For the 52 weeks ended 27 June 2021, it is estimated that for any incremental general increase of 1% in interest rates
applying for the full year the decrease in the Group’s profit before tax would be c £1m (2020: c £1m).
b. Maturity of bank loans and borrowings
The maturity of bank loans and borrowings is as below:
The Group
Due between two and five years
2021
2020
Bank
overdraft
£m
Bank
loans
£m
Bank
overdraft
£m
–
–
–
–
–
–
Bank
loans
£m
177
177
Maturities above include estimated interest payable to the maturity of the facilities.
Due between two and five years
2021
2020
Bank
overdraft
£m
Bank
loans
£m
Bank
overdraft
£m
–
–
–
–
–
–
Bank
loans
£m
177
177
Maturities above include estimated interest payable to the maturity of the facilities.
The Company was fully compliant with its banking covenants as at 27 June 2021.
At the year end, the Group and Company had £350m (2020: £193m) of undrawn committed bank facilities available.
There is no material difference between the fair value of the bank overdrafts and bank loans and their carrying values as
shown in the balance sheet.
c. Amounts due in respect of development land
The Group’s policy permits land purchases to be made on deferred payment terms. In accordance with IFRS 9, the
deferred creditor is recorded at fair value and nominal value is amortised over the deferment period via financing costs,
increasing the land creditor to its full cash settlement value on the payment date.
The interest rate used for each deferred payment is an equivalent loan rate available on the date of land purchase, as
applicable to a loan lasting for a comparable period of time to that deferment.
The maturity profile of the total contracted cash payments in respect of amounts due in respect of land creditors at the
balance sheet date is as follows:
27 June 2021
28 June 2020
Balance
at June
£m
294
302
Total
contracted
cash
payment
£m
298
306
Due
less than
one year
£m
144
186
Due
between
one and
two years
£m
Due
between
two and
five years
£m
125
51
29
69
d. Maturity of trade and other payables
The maturity profile of the total contracted payments in respect of financial liabilities (excluding amounts due on land
creditors shown separately in note 15c) at the balance sheet date is as follows:
Trade and other payables (excluding lease liabilities)
Lease liabilities
27 June 2021
Trade and other payables (excluding lease liabilities)
Lease liabilities
28 June 2020
Balance
at June
£m
Total
contracted
cash
payment
£m
Due
less than
one year
£m
Due
between
one and
two years
£m
Due
between
two and
five years
£m
538
6
544
527
6
533
538
7
545
527
8
535
538
3
541
527
3
530
–
2
2
–
2
2
–
2
2
–
3
3
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 212
Redrow plc Annual Report 2021
213
1 5 . F I N A N C I A L R I S K M A N AG E M E NT CO N T I N U E D
e. Credit risk
Credit risk arises from cash and cash equivalents, including call deposits with banks and financial institutions, derivative
financial instruments and trade receivables. It represents the risk of financial loss where counterparties are unable to
meet their obligations.
Credit risk is managed centrally in respect of cash and cash equivalents and derivative financial instruments. In respect
of placing deposits with banks and financial institutions and funds, individual risk limits are approved by the Board. The
table below shows the cash and cash equivalents as at the balance sheet date:
Held at Banks with at least an A credit rating per Standard & Poor's
GROUP
COMPANY
2021
£m
160
160
2020
£m
44
44
2021
£m
144
144
2020
£m
41
41
No credit limits were exceeded during the reporting year or subsequently and the Group does not anticipate any losses
from non-performance by these counterparties.
There is no specific concentration of credit risk in respect of home sales as the exposure is spread over a number of
customers. In respect of trade receivables, the amounts presented in the balance sheet are stated after adjusting for any
doubtful receivables, based on the judgement of the Group’s management through using both previous experience and
knowledge of the current position of any more substantial receivables.
f. Capital management
The Group defines total capital as equity plus net debt where net debt is calculated as total borrowings less cash and
cash equivalents.
The Group monitors capital on the basis of the level of returns achieved on its capital base and, with respect to its
financing structure, the gearing ratio. This is defined as net debt divided by equity.
The Group’s objective in managing capital is to safeguard its ability to continue as a going concern in order to deliver
value to its Shareholders and other stakeholders. The Group operates within policies outlined by the Board in order to
maintain an appropriate funding structure. The Board keeps the Group’s capital structure under review.
The total capital levels and gearing ratios as at 27 June 2021 and 28 June 2020 are as follows:
Total borrowings
Less cash and cash equivalents
Net (cash)/debt
Equity
Total capital
Operating profit adjusted for joint ventures
ROCE (Operating profit as above as a percentage of opening and closing total capital)
Gearing ratio
2021
£m
–
(160)
(160)
1,872
1,712
321
18.5%
N/A
2020
£m
170
(44)
126
1,626
1,752
148
9.2%
7.7%
1 5 . F I N A N C I A L R I S K M A N AG E M E NT CO N T I N U E D
g. Fair values
Basis for determining fair values
The principal methods and assumptions used in estimating the fair value of financial instruments can be found in the
Accounting Policies pages 188 to 189.
Fair value hierarchy
Financial assets and liabilities carried at fair value are categorised within the hierarchal classification of IFRS13:
• Level 1: Quoted prices in active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
• Level 3: Inputs are not based on observable market data.
The fair value of financial assets and liabilities is as follows:
The Group
Assets per the balance sheet
Trade and other receivables
Cash and cash equivalents
Fair value
hierarchy
Level 1 & 2*
Level 1
2021
2021
2020
2020
Loans and
receivables
Fair value
£m
Loans and
receivables
Carrying value
£m
Loans and
receivables
Fair value
£m
Loans and
receivables
Carrying value
£m
96
160
256
96
160
256
33
44
77
33
44
77
*
Includes £4m in respect of shared equity debtors (2020: £6m) (Level 2)
Liabilities per the balance sheet
Bank loans and overdrafts
Trade payables and other payables including
customer deposits
Land creditors
Lease liabilities
Other financial liabilities are at amortised cost.
The Company
Assets per the balance sheet
Cash and cash equivalents
Amounts due from subsidiary companies
(current and non-current)
Fair value
hierarchy
Level 1
Level 1
Level 1
Level 1
Fair value
hierarchy
Level 1
Level 1
2021
Other financial
liabilities
Fair value
£m
2021
Other financial
liabilities
Carrying value
£m
2020
Other financial
liabilities
Fair value
£m
2020
Other financial
liabilities
Carrying value
£m
–
516
294
6
816
–
516
294
6
816
170
527
302
6
170
527
302
6
1,005
1,005
2021
2021
2020
2020
Loans and
receivables
Fair value
£m
Loans and
receivables
Carrying value
£m
Loans and
receivables
Fair value
£m
Loans and
receivables
Carrying value
£m
144
781
925
144
781
925
41
41
1,074
1,115
1,074
1,115
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 214
Redrow plc Annual Report 2021
215
2020
£m
2021
£m
2020
£m
1 8 . S H A R E C A P ITA L
1 5 . F I N A N C I A L R I S K M A N AG E M E NT CO N T I N U E D
g. Fair values continued
The Company continued
Liabilities per the balance sheet
Bank loans and overdrafts
Amounts owed to subsidiary companies
1 6 . TR A D E A N D OTH E R PAYA B LE S
Non-current liabilities
Amounts due in respect of development land
Lease liabilities
Current liabilities
Trade payables
Amounts due in respect of development land
Private customer deposits
Social customer payments on account
Amounts owed to subsidiary companies
Lease liabilities
Other payables
Other taxation and social security
Accruals
See note 2.
Fair value
hierarchy
Level 1
Level 1
2021
Other financial
liabilities
Fair value
£m
2021
Other financial
liabilities
Carrying value
£m
2020
Other financial
liabilities
Fair value
£m
2020
Other financial
liabilities
Carrying value
£m
–
14
14
–
14
14
170
14
184
170
14
184
GROUP
COMPANY
2021
£m
150
2
152
362
144
68
74
–
4
5
7
103
767
116
4
120
311
186
38
165
–
2
10
3
90
805
–
–
–
–
–
–
–
14
–
–
–
14
28
–
–
–
–
–
–
–
14
–
–
–
12
26
Amounts due to subsidiary companies are unsecured, repayable on demand and bear interest at market rate on trading
balances. Amounts due in respect of development land are classified as current when they are contractually due within
12 months of the balance sheet date.
17. LO N G -TE R M P R OV I S I O N S
The Group
At 28 June 2020
Transfers from trade payables
Provisions created during the year
Provisions released during the year
Provisions utilised during the year
At 27 June 2021
Onerous
contracts
£m
Remedial
works
£m
1
–
–
–
–
1
7
19
7
–
–
33
Total
£m
8
19
7
–
–
34
17. LO N G -TE R M P R OV I S I O N S CO N T I N U E D
The Group continued
Provisions relate to onerous contracts and maintenance, sundry remedial costs in respect of development activities and
a provision for potential fire safety remedial works. It is expected that this provision will be utilised within four years. In
the current year certain balances have been reclassified from trade payables to provisions to provide greater clarity in
disclosures. The Directors do not consider this to represent a material change in presentation.
Remedial Works Provision
Redrow is predominantly a housebuilder, however, we have historically built a small number of high rise buildings mostly on a
design & build basis by main contractors. Ten schemes have now been identified as potentially not conforming to the current
government regulations. Each development is unique and was designed in accordance with the building regulations and
accepted practices at the time. Where we have an obligation to do so, we are fully committed to working with our
contractors, leaseholders and management companies to address any issues on these schemes where required.
Management has estimated the cost of remedial works but it is inherently uncertain whilst investigations and assessments
are ongoing. It is not anticipated that any reasonable changes would have a material impact on operating profit in the period.
Number of
ordinary shares
352,190,420
As at 28 June 2020 and 27 June 2021 (ordinary shares of 10.5p each)
1 9. S H A R E C A P ITA L , S H A R E P R E M I U M ACCO U NT A N D R E S E RV E S
The Group
At 1 July 2019
Total comprehensive income
Dividends paid
Movement in respect of LTIP/SAYE
At 28 June 2020
Total comprehensive income
Dividends paid
Movement in respect of LTIP/SAYE
At 27 June 2021
Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
37
–
–
–
37
–
–
–
37
59
–
–
–
59
–
–
–
59
8
–
–
–
8
–
–
–
8
Retained
earnings
£m
1,481
114
(72)
(1)
1,522
261
(21)
6
1,768
Other reserves
Other reserves consists of a £7m Capital redemption reserve (2020: £7m) and a £1m Consolidation reserve (2020: £1m).
Undistributable reserves
Other reserves are not available for distribution.
The Company
At 1 July 2019
Total comprehensive income
Dividends paid
At 28 June 2020
Total comprehensive income
Dividends paid
At 27 June 2021
Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
Retained
earnings
£m
37
–
–
37
–
–
37
59
–
–
59
–
–
59
7
–
–
7
–
–
7
908
3
(72)
839
7
(21)
825
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 216
Redrow plc Annual Report 2021
217
1 9. S H A R E C A P ITA L , S H A R E P R E M I U M ACCO U NT A N D R E S E RV E S CO N T I N U E D
The Company continued
Other reserves
Other reserves consists of a £7m Capital redemption reserve (2020: £7m).
Undistributable reserves
Other reserves are not available for distribution.
2 0. M OV E M E NT I N N E T ( D E B T )/C A S H
The Group
Cash and cash equivalents
Bank loans
Net (debt)/cash
At
29 June 2020
£m
Non-cash
movement
£m
Cash flow
£m
At
27 June 2021
£m
44
(170)
(126)
4
–
4
112
170
282
160
–
160
Non-cash movement comprises movements in respect of LTIP/SAYE together with relevant IAS19, IFRS7 and IFRS16 non
cash movements.
The Company
Cash and cash equivalents
Bank loans
Net (debt)/cash
At
29 June 2020
£m
Non-cash
movement
£m
Cash flow
£m
At
27 June 2021
£m
41
(170)
(129)
(1)
–
(1)
104
170
274
144
–
144
2 1 . CO NTI N G E NT LI A B I LITI E S
The Company has guaranteed the bank borrowings of its subsidiaries. Performance bonds and other building or
performance guarantees have been entered into in the normal course of business. Management estimate that the bonds
and guarantees amount to £156m (2020: £170m) at the year end and consider the possibility of a cash outflow in
settlement to be remote.
22 . R E L ATE D PA R T Y TR A N S AC TI O N S
Within the definition of IAS 24 ‘Related party disclosures’, the Board and key management personnel are related parties.
Detailed disclosure of the remuneration of the Board is given in the Directors’ Remuneration Report on pages 128 to 153
notably the 'Single Total Figure of Remuneration Table (Audited)' on page 144. A summary of remuneration provided to
key management personnel is provided in note 7c.
There have been no material transactions with key management personnel. There is no other difference between
transactions with key management personnel of the Company and the Group.
The Company funds the operating companies through both equity investment and loans at commercial rates of interest.
In addition, the Company provides its subsidiaries with the services of Senior Management, for which a recharge is made
to those subsidiary companies based upon utilisation of services.
The amount outstanding from subsidiary undertakings at 27 June 2021 was £781m (28 June 2020: £1,074m). The amount
owed to subsidiary undertakings at 27 June 2021 was £14m (28 June 2020: £14m).
The Company provided the Group’s defined benefit pension scheme, as detailed in note 7e. Expected service costs
were charged to the operating businesses at cost. There is no contractual arrangement or stated policy relating to the
charge. Experience and actuarial gains are recognised in the Company, via the statement of comprehensive income.
During the year, the Group sold its interest in Menta Redrow Limited and Menta Redrow (II) Limited as disclosed in note 11.
2 3 . A LTE R N ATI V E P E R F O R M A N C E M E A S U R E S
Redrow uses a variety of Alternative Performance
Measures (APMs) which are not defined or specified by
IFRSs but which the Directors believe are pertinent to
reviewing and understanding the broader performance of
the Group, in conjunction with IFRS defined measures.
Accident incident rate by site
No. of notifiable accidents in financial year divided by
average no. of sites.
Dividend per share
Interim and final dividend per share declared in respect of
the financial year.
Earnings per share (EPS) (IFRS measure)
Profit attributable to ordinary equity shareholders
(excluding exceptional items and deferred tax rate
changes) divided by the weighted average no. of ordinary
shares in issue during the financial year. See note 6.
HBF customer recommend rating
Independent HBF customer satisfaction rating score.
Hurdle rates
Gross margin and internal rate of return minimum rates
required for land purchase appraisals.
Land holding years
No. of plots in owned land holdings at June divided by no.
of legal completions in financial year.
Order book
The value of reserved and exchanged sales which had not
legally completed at the year end.
Private reservation rate
No. of private reservations per week in financial
year divided by average no. of sales outlets.
Return on capital employed (ROCE)
Operating profit before exceptional items adjusted for joint
ventures as a percentage of opening and closing capital
employed. See note 15f.
Return on equity (ROE)
Profit before tax before exceptional items adjusted for joint
ventures as a percentage of opening and closing net
assets.
Net assets at 27 June 2021/28 June
2020
Net assets at 28 June 2020/30 June
2019
Average net assets
Profit before taxation
Return on equity %
2021
£m
2020
£m
1,872
1,626
1,626
1,585
1,749
1,606
314
18.0%
140
8.7%
Owned land holdings at
27 June 2021/28 June 2020
Legal completions
Land holding years
2021
2020
Revenue per consolidated income statement.
Revenue (IFRS measure)
29,460
5,620
5.2
25,130
4,032
6.2
Revenue value of private reservations secured in the
year
The fair value receivable in the future of private house
sales reserved by customers during the year, net of
cancellations.
Sales outlets
Average no. of sales outlets open in the year.
Legal completions
The number of homes legally completed in the financial
year.
Monies committed to fund improvements in local
communities
These reflect committed Section 106 contributions and
affordable housing provided in the year.
Net asset value per ordinary share
Total net assets at June divided by the number of ordinary
shares in issue at June.
Number of trainees
No. of trainees at June as a percentage of employees at
June.
GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS CONTINUED 218
Redrow plc Annual Report 2021
219
CO R P O R ATE A N D S H A R E H O LD E R I N F O R M ATI O N
FI V E Y E A R SU M M A RY
12 M O N T H S E N D E D J U N E
S H A R E H O LD E R D I S CO U NT S
The Company offers a discount of 1% to Shareholders off
the purchase price of a new Redrow home. In order to
qualify for the discount a purchaser must hold a minimum
of 2,500 ordinary shares in Redrow plc for a minimum of 12
months prior to the date of reservation, subject to a cap of
£5,000.
G R O U P CO NTAC T S – O F F I C E R S A N D
A DV I S E R S
Company Secretary
Graham Cope
Registered Office
Redrow House
St. David’s Park
Flintshire
CH5 3RX
Registered Number 2877315
redrowplc.co.uk
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Stockbrokers
Barclays Bank PLC
3rd Floor Windsor Court
3 Windsor Place
Cardiff
CF10 3BX
Peel Hunt
Moor House
120 London Wall
London
EC2Y 5ET
Independent Auditor
KPMG LLP
Chartered Accountants and Statutory Auditors
8 Princes Parade
Liverpool
L3 1QH
Solicitor
Slaughter and May
One Bunhill Row
London
EC1Y 8YY
Financial Public Relations Consultants
Instinctif Partners
65 Gresham Street
London
EC2V 7NQ
Revenue
Operating profit
Operating profit as a percentage of turnover
Profit before tax
Net assets
Net (debt)/cash
2017
£m
1,660
322
19.4%
315
1,235
(73)
Gearing – net debt as a percentage of capital and reserves
5.9%
Return on capital employed – operating profit before
exceptional items adjusted for joint ventures as a
percentage of opening and closing capital employed
Return on equity
Number of legal completions
Earnings per ordinary share
Dividends paid per ordinary share inc cash return
26.0%
27.7%
5,319
70.2p
12.0p
2018
£m
2019
£m
1,920
382
19.9%
380
1,483
63
N/A
28.5%
28.0%
5,718
85.3p
20.0p
2,112
411
19.5%
406
1,585
124
N/A
28.5%
26.5%
6,443
92.3p
59.0p
2020
£m
1,339
148
11.1%
140
1,626
(126)
7.7%
9.2%
8.7%
4,032
32.9p
–
2021
£m
1,939
321
16.6%
314
1,872
160
N/A
18.5%
18.0%
5,620
73.7p
6.0p
Net asset value per ordinary share
334.0p
401.0p
450.0p
461.7p
531.5p
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GOVERNANCE REPORTFINANCIAL STATEMENTSSHAREHOLDER INFORMATIONSTRATEGIC REPORTSHAREHOLDER INFORMATIONSHAREHOLDER INFORMATION Redrow plc
Redrow House,
St. David’s Park,
Flintshire
CH5 3RX
Telephone: 01244 520044