ANNUAL REPORT 2022
CREATING A
BETTER WAY
TO LIVE
1
Redrow plc Annual Report 2022
Strategic report
CONTENTS PERFORMANCE SUMMARY
STRATEGIC REPORT
1 Performance Summary
2 Our Investment Case
4 Our Strategy
6 ESG Scorecard
18 Our Business Model
20 Chairman’s Statement
22 Group Chief
Executive's Statement
26 Operating Review
94 Financial Review
98 Risk Management
112 Task Force On Climate
Related Financial
Disclosures (TCFD)
126 Sustainability
Accounting Standards
Board (SASB) Disclosure
Table
134 Group Non-Financial
Information Statement
136 Section 172(1) Statement
140 Stakeholder
Engagement
GOVERNANCE REPORT
152 Corporate Governance
Report
154 Board of Directors
170 Audit Committee Report
180 Nomination Committee
Report
186 Placemaking and
Sustainability Committee
Report
192 Directors’ Remuneration
Report
214 Directors’ Report
224 Statement of Directors’
Responsibilities
FINANCIAL STATEMENTS
226 Independent Auditors’
Report
238 Consolidated Income
Statement
238 Statement of
Comprehensive Income
239 Balance Sheets
240 Statement of Changes
in Equity
241 Statement of Cash Flows
242 Accounting Policies
249 Notes to the Financial
Statements
SHAREHOLDER INFORMATION
280 Corporate and
Shareholder
Information
281 Five Year Summary
AWARD
HIGHLIGHTS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
(“ESG”) HIGHLIGHTS
DESCRIPTION OF OUR
BUSINESS MODEL
4 Our Strategy
6 ESG Scorecard
18 Our Business Model
26 Benchmarks and Indices
28 Material Issues
30 UN SDGs
THRIVING
COMMUNITIES
34 Placemaking
36 Redrow 8 Placemaking
Principles
40 Community Engagement
42 Creating Social Value
46 Biodiversity
28 & 140
Stakeholder
Engagement
221 Charitable and Political
Donations
BUILDING
RESPONSIBLY
52 Health, Safety and
Environment
54 Quality of Build
and Considerate
Constructors Scheme
58 Putting our Customers
First
60 Climate Change Strategy
61 Net-Zero Carbon
64 Carbon Reduction
70 Environment, Water
and Waste
72 Product Innovation
74 Partnering with our
Supply Chain
159 Whistleblowing
160 Conflicts of Interests
179 & 223
Anti-bribery and
Corruption
217 ESG Disclosures
222 Code of Conduct
222 Modern Slavery
VALUING
PEOPLE
78 Real Living Wage
Commitment
80 & 220
Equality Diversity and
Inclusion
84 & 160
Colleague Engagement
86 Volunteering
88 Health and Wellbeing
90 & 221
Learning and
Development
92 Addressing the Skills
Gap
74 & 221
Human Rights
The Group Non-Financial
Information Statement on pages 134 to
135 provides further information and
sign posting.
Cover image:
The Rectory at Southbank, Newton
Kyme, North Yorkshire
REVENUE
2019
£2,112m
2018
£1,920m
£1,339m
2020 2021
£2,140m
2022
£2,140m +10%
£1,939m
£1,439m +1% 32.0p +31%
ORDER BOOK*
2019
£1,015m
2018
£1,144m
£1,422m
2020
£1,431m
2021
£1,439m
2022
5,715 +2%
96.0p +30%
UNDERLYING EARNINGS PER SHARE*
2019
92.3p
2018
85.3p
32.9p
2020
73.7p
2021
96.0p
2022
57.7p -22%
STATUTORY EARNINGS PER SHARE
2019
92.3p
2018
85.3p
32.9p
2020
73.7p
2021
57.7p
2022
£410m +31%
UNDERLYING PROFIT BEFORE TAX*
2019
£406m
2018
£380m
£140m
2020
£314m
2021
£410m
2022
£246m -22%
STATUTORY PROFIT BEFORE TAX
2019
£406m
2018
£380m
£140m
2020
£314m
2021
£246m
2022
FULL YEAR DIVIDEND PER SHARE*
2019
60.5p
2018
28p
0p
2020
24.5p
2021
32.0p
2022
LEGAL COMPLETIONS
2019
6,443
2018
5,718
4,032
2020
5,620
2021
5,715
2022
* Redrow uses a variety of statutory performance measures and alternative performance measures when reviewing the
performance of the Group. See note 23 for an explanation and reconciliation of these alternative performance measures.
* Underlying is defined as any statutory or alternative performance measure pre-exceptional items. See note 2 and note 23.
CRYSTAL
™
™
Find more information at:
redrowplc.co.uk
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Our investment case
Strategic report
OUR INVESTMENT CASE
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.
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.
15%
of workforce on
structured training
programmes *
261
internal promotions
in year
c6,000
plots added to land holdings with planning
permission
BUILDING RESPONSIBLY
We are committed to registering all our
developments with the Considerate Constructors
Scheme (CSS).
14%
reduction in operational carbon emissions intensity
since 2017
PLACEMAKING
We focus on delivering high quality homes and
creating attractive, sustainable and vibrant places
to live.
£281m
committed to fund
improvements to local
communities *
1,250
affordable homes
delivered to our
communities
DIFFERENTIATED PRODUCT
Redrow focuses on the home mover segment.
£1.82bn
revenue value of private
reservations secured in
the year *
88%
Heritage Collection
revenue as a percentage
of private revenue
CLIMATE CHANGE – ROUTE TO NET ZERO
We set and submitted for validation our ambitious
near-term science-based carbon reduction targets
for Scope 1, 2 and 3 in line with the goals of the
Paris Agreement.
A STRONG AND RESILIENT BALANCE SHEET
Redrow has net assets of £1.95bn. 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.
21.45%
return on equity *
32.0p
dividend to
shareholders
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.
94.5%
customer
recommendations
– HBF 5 star status
* See note 23
38.43
out of 50 CSS Score (above 38 target)
Based on over 4,433 reviews
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Our strategy
OUR STRATEGY
Placemaking
for Wellbeing
Homes
for All
Working
Safely and
Considerately
Putting
Our
Customers
First
Managing Our
Resources
Efficiently
Nature
for People
Valuing
and
Developing
People
and Partners
Inspiring
the Next
Generation
to Build
TO CREATE
A BETTER WAY
FOR PEOPLE
TO LIVE
V
A
L
U
I
N
G
P
E
O
P
L
E
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
L
Y
MEASURE
202 4
GUIDANCE
†
KEY PERFORMANCE
INDICATORS
2022 2021
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.
EPS * >96p 96.0p
†
73.7p
DPS * >32p 32.0p 24.5p
Revenue * >£2.3bn £2,140m £1,939m
Average sales
outlets *
134 111 117
Monies
committed to
fund
improvements
to local
communities *
Continued
investment in
local communities
£281m £275m
Required
affordable homes
delivered
1,250 1,314
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% 24.54%
†
18.53%
Land holding
years *
Maintain land
holdings at c5
years
5.2 years 5.2 years
Waste diverted
from landfill *
>95% 98.3% 97.7%
HBF customer
recommend
rating *
>94% 94.5% 92.6%
Private
reservation rate *
0.67 – 0.69 0.68 0.70
• 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:
• 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.
Number of
trainees *
Maintain level of
trainees at 15% of
workforce
15.0% 14.5%
Annual Injury
Incidence Rate
Continuous
improvement
through a 10%
year on year
reduction
365 441
* see note 23 † underlying
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ESG scorecard
ESG SCORECARD
KPI THEME KPI DATA POINT KPI DEFINITION
UN I T
REPORTED
12 MONTH
PERIOD
TH I S DATA
RE L ATES TO
(FOR FY22) FY22 FY21 FY20 TARGET
READ
MORE
H E A LTH &
SAFETY
Annual Injury
Incidence Rate (AIIR)
No of RIDDOR Accidents resulting in an Injury divided by the
average number of people employed
1
multiplied by 100,000.
No. 26 June 2021
to 1 July 2022
365* 441 666 Continuous
improvement in
overall H&S
performance
through a 10%
year on year
reduction
2
Pages
52 to 53
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.
% 1 October
2020 to 30
September
2021 (results
published
annually for
this period in
following
March)
59.3%* 50.1%* 52.3% Achieve a
minimum NPS
score of 54%
Pages
58 to 59
HBF survey 8 week
recommend –
Customers that would
recommend Redrow to
a friend
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.
% 1 October
2020 to 30
September
2021 (results
published
annually for
this period in
following
March)
94.5%* 92.6%* 91.9% Consistently
deliver a 94%+
customer
satisfaction rating;
recommend to a
friend (ongoing)
Pages
58 to 59
Average Trustpilot
Review Score
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
28 June 2021
to 3 July 2022
4.45* 4.54* 4.31 Excellent (4.3 or
above)
Pages
58 to 59
1 ‘People Employed’ refers to the average number of people employed at any one time across Redrow Offices, Sites, Sales and Customer Services including both
employees and engaged subcontractors. As defined by the Health and Safety Executive.
2 In FY22 AIIR was reduced from 441 to 365 which results in a 17% reduction.
* Figure verified by SGS.
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
is the second year of publishing our ESG scorecard, which
discloses our performance against our core non-financial
metrics. These metrics align with the issues that are most
material to the business and our stakeholders in the short,
medium and longer term.
This year we have made a series of improvements and
some additions to the scorecard, taking on-board the
recommendations made by our external assurance
company.
Health and Safety: To aid benchmarking and comparability
the previous KPI has been replaced with the Annual Injury
Incidence Rate – the standard KPI used across the sector.
Sustainable Design: A new KPI which measures the
Average Dwelling Emission Rate (the actual carbon
emissions as calculated by the regulatory tool) is now
included, and both the Average SAP rating and the
Average EPC rating now reflect the performance of homes
as-built as opposed to as-designed as was reported in the
previous year.
Our ESG improvement strategy is the responsibility of our
Placemaking and Sustainability Committee, and is its
primary focus. The Committee is chaired by our Non-
Executive Chairman and led at Executive level by our
Group Communities Director.
Our strategic themes: Thriving Communities, Building
Responsibly and Valuing People, and the workstreams that
underpin them, help us to manage ESG risks and drive
long-term sustainable value. As a business, our aim is to
Diversity and Inclusion: We have increased the range of
gender and ethnicity metrics with the addition of three new
KPI’s: % of apprentices who identify as ethnic minorities, %
of female employees within the Senior Management
population and the % of females recruited into graduate
roles during the financial year.
Energy and Carbon: We are now reporting both Market
based and Location based emissions for our Group GHG
emissions Scope 1 and 2 and our Total GHG emissions per
100m
2
of build. Previously we only reported Location based
however our science-based carbon reduction targets are
based on a Market based method which reflects the
emissions arising from electricity that has been procured
from a particular chosen supplier. This enables our
renewable electricity procurement to be accounted for.
operate in a responsible way, and to create outcomes that
are of value to our stakeholders.
Our performance against targets shown in the scorecard is
fully disclosed on our website, along with the full suite of
targets https://www.redrowplc.co.uk/sustainability/
our-commitments.
As of 2022, Redrow received an MSCI ESG Rating of AA.
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ESG scorecard continued
3 Covers 100% of Redrow sites. A site is registered with the CCS once Redrow take over as Principal Contractor.
4 From January 2022 the CCS individual report scoring changed from a total score of 50 to 45. Therefore FY23 target will be reported out of 45 next year.
5 This covers NHBC 184 site inspection reports received from the NHBC in the reporting period. Excludes Greater London sites, two in the North West and two in
Lancashire as these are not registered with the NHBC.
6 This covers only sites registered with the NHBC. Excludes Greater London sites, two sites in the North West and two in Lancashire as these are not registered with the
NHBC.
7 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.
8 Whilst we have seen an 18% increase in training days in 2022 (4819) from those reported in 2021 (4083) this is still below our 2020 figure (5925), the reason being we have
continued with the use of e-learning and seminars to support our face to face training and these online sessions tend to be shorter in duration.
* Figure verified by SGS.
KPI THEME KPI DATA POINT KPI DEFINITION
UN I T
REPORTED
12 MONTH
PERIOD
TH I S DATA
RE L ATES TO
(FOR FY22) FY22 FY21 FY20 TARGET
READ
MORE
BUILD QUALITY
AN D
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, where a report is received, in the reporting
period.
3
No. out of
50
28 June 2021
to 3 July 2022
38.43* 36.67* 35.09 Achieve a
minimum CCS
score of 33/45 on
all sites in FY23
4
Pages
54 to 55
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.
5
No. 1-6 28 June 2021
to 3 July 2022
4.44* 4.36* 4.13 Achieve a score
of 4.5/6 in FY23
Pages
54 to 55
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).
6
No. 28 June 2021
to 3 July 2022
0.17* 0.22* 0.20 Achieve ≤0.15
reportable items
per inspection
Pages
54 to 55
EMPLOYEES
Overall engagement
score
Overall engagement score taken from annual survey report provided
by Employee Feedback Ltd.
7
% Measurement
taken from
annual
employee
survey carried
out February/
March 2022
83%* 82%* 81% Maintain at 80%+ Pages
84 to 85
Employee turnover
rate
% of employees who leave the business in the year through
voluntary attrition (resignation or retirement).
% 28 June 2021
to 3 July 2022
19.4%* 14.3%* 15.3% N/A Pages
90 to 91
Number of internal
promotions
Number of internal promotions during the financial year. No. 28 June 2021
to 3 July 2022
261* 211* 253 N/A Pages
90 to 91
% of direct employees
that are trainees
% of employees who are apprentices, graduate trainees or following
a training programme, academic or professional qualification.
% Measurement
taken as at
year end date
of 3 July 2022
15* 14.5* 14 15% of all
employees being
trainees
Pages
92 to 93
Total number of
training days delivered
AND
Average number of
training days per
employee
Total number of training hours delivered as face to face, e-learning
or online seminars during the financial year, divided by 6 hours to
give a number of training days.
AND
The average figure is obtained by dividing the total number of
training days by the average number of employees in the business
during the year.
No. of days 28 June 2021
to 3 July 2022
4,819*
8
2.19*
4,083*
1.81*
5,925
2.53
Invest in at least 3
training days per
employee per
year
Pages
90 to 91
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ESG scorecard continued
KPI THEME KPI DATA POINT KPI DEFINITION
UN I T
REPORTED
12 MONTH
PERIOD
TH I S DATA
RE L ATES TO
(FOR FY22) FY22 FY21 FY20 TARGET
READ
MORE
DI V E RS IT Y
AN D
INCLUSION
% who identify as
ethnic minorities
% of self-reporting who identify as ethnic minorities.
9
% Measurement
taken as at
year end date
of 3 July 2022
6.64* 5.14* 5.6 N/A Pages
80 to 81
% of apprentices who
identify as ethnic
minorities
% of apprentices self-reporting who identify as ethnic minorities.
10
% Measurement
taken as at
year end date
of 3 July 2022
10.67%* N/A – New
KPI in FY22
N/A – New
KPI in FY22
12.5% by 2025 Pages
80 to 81
% of Female
employees – overall
and by management
category:
% Measurement
taken as at
year end date
of 3 July 2022
N/A Pages
80 to 81
All employees % of female employees overall. 34.17%*
female
34.06%*
female
33.90%
female
Executive
Management Team
% of female employees on Executive Management Team. 33.33%*
female
25%*
female
22%
female
Main Board (includes
non-executives)
% of female employees on Main Board. 33.33%*
female
28.57%*
female
43%
female
Executive
Management Team
Reportees
% of female employees as Direct Reports to Executive Management
Team (excluding PAs and those reporting to CEO who are also on
the Executive Management Team).
28.57%*
female
27.27%*
female
33%
female
Senior Management % of female employees within the Senior Management population. 25.41%*
female
N/A – New
KPI in FY22
N/A – New
KPI in FY22
28% by 2025
Female graduates
recruited
% of females recruited into graduate roles during the financial year. % 28 June 2021
to 3 July 2022
28.57%* N/A – New
KPI in FY22
N/A – New
KPI in FY22
40% by 2025 Pages
90 to 91
9 This KPI and definition has changed from BAME to ethnic minorities in FY22 to align with current government guidance. Gov.uk defines ‘ethnic minorities’ as all ethnic
groups except the white British group. Ethnic minorities include white minorities, such as Gypsy, Roma and Irish Traveller groups. This is based on 92% (88% in FY21) of
employees who have self-reported ethnicity information.
10 This is the first year we have reported 'apprentice ethnicity' information and can confirm it is based on 97% of our total apprentice population who self-reported this
information.
* Figure verified by SGS.
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ESG scorecard continued
KPI THEME KPI DATA POINT KPI DEFINITION
UN I T
REPORTED
12 MONTH
PERIOD
TH I S DATA
RE L ATES TO
(FOR FY22) FY22 FY21 FY20 TARGET
READ
MORE
ENERGY AND
CARBON
Group GHG emissions
Scope 1 and 2 –
Location Based
Total Location Based Scope 1 and 2 GHG emissions from our
operations (sites and offices).
Tonnes of
CO
2
e
1 July 2021 to
30 June 2022
12,149* 14,680* 15,504* N/A Page 217
Group GHG emissions
Scope 1 and 2 –
Market Based
Total Market Based Scope 1 and 2 GHG emissions from our
operations (sites and offices).
Tonnes of
CO
2
e
1 July 2021 to
30 June 2022
9,822* 16,099* 17,086* To reduce our
absolute Scope 1
and 2 GHG
emissions by 42%
by FY30, from our
FY21 base year
Page 217
Total GHG emissions
per 100m
2
of build –
Location Based
GHG emissions normalised per 100m
2
of build (Location Based). Tonnes of
CO
2
e/100m
2
1 July 2021 to
30 June 2022
2.16* 2.84* 3.01* Reduce the
carbon intensity
of our direct
operations by 10%
by the end of
FY22 against
2017 baseline
Page 64
and 217
Total GHG emissions
per 100m
2
of build
– Market Based
GHG emissions normalised per 100m
2
of build (Market Based). Tonnes of
CO
2
e/100m
2
1 July 2021 to
30 June 2022
1.75* 3.11* 3.32* N/A Page 217
Operational energy
use
Total energy and fuel consumption used from sites and offices. kWh 1 July 2021 to
30 June 2022
53,788,513* 64,294,472* 37,032,239 N/A Page 218
% of electricity
procured from
renewable sources
Percentage of electricity used in our operations that is sourced from
renewable sources.
% 1 July 2021 to
30 June 2022
96.03%* 3.30%* N/A Purchase 100%
REGO-backed
renewable
electricity for all
operations
(offices and
construction sites)
by the end of
FY24
Page 66
* Figure verified by SGS.
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ESG scorecard continued
KPI THEME KPI DATA POINT KPI DEFINITION
UN I T
REPORTED
12 MONTH
PERIOD
TH I S DATA
RE L ATES TO
(FOR FY22) FY22 FY21 FY20 TARGET
READ
MORE
SUSTAINABLE
HOMES
11
Average SAP rating The average as built SAP rating
12
for legally completed units in the
financial year.
No. 1-100 28 June 2021
to 3 July 2022
85* N/A, new
KPI this
year.
Reported
Average
design SAP
for core
house types
in FY21
N/A N/A Page 130
Average EPC rating The average as built EPC
13
rating for legally completed units in the
financial year.
A-G rating 28 June 2021
to 3 July 2022
B* N/A, new
KPI this
year.
Reported
Average
design EPC
for core
house types
in FY21
N/A N/A Page 73
Average DER The average Dwelling Emission Rate (DER)
14
is the actual CO
2
emission rate of self-contained dwellings and individual flats
(excluding common areas) based on the actual as built specification.
Kg/CO
2
/m²/
year
28 June 2021
to 3 July 2022
15.75* N/A, first
year
reporting
this KPI
N/A N/A N/A
RE S OU R C E
EFFICIENCY
Tonnes of construction
waste per 100m
2
build
Construction waste produced per 100m
2
of build. Tonnes of
waste/
100m
2
1 July 2021 to
30 June 2022
7.91* 8.11* 8.97* Reduce
construction
waste intensity by
10% by the end of
FY22 against
2017 baseline
Page 70
% of waste diverted
from landfill
The % of waste which is diverted from landfill. This includes refuse
derived fuel (RDF) as well as recycling.
% 1 July 2021 to
30 June 2022
98.34* 97.65* 97.4* 95%+ of
construction
waste diverted
from landfill
Page 70
Water use per 100m
2
build
Cubic metres of water used in our sites and offices per 100m
2
of build.
m
3
per
100m
2
build
1 July 2021 to
30 June 2022
26.53* 33.06* 18.50 Reduce the water
intensity of our
direct operations
by 5% by the end
of FY22 against
2017 baseline
Page 219
% of timber certified % of timber responsibly sourced and credibly certified to FSC
or PEFC.
15
% 1 January
2021 to 31
December
2021
99.98* 99.64* 99.90 100% of timber
responsibly
procured
Page 76
11 The SAP, EPC and DER ratings relate to 100% (5,484) as built legally completed units in FY22. This figure excludes 231 legally completed units in London, sold as a block
sale, where EPCs are not yet issued.
12 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
13 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.
14 The Dwelling Emission Rate is equal to the annual CO
2
emissions per unit floor area for space heating, water heating, ventilation and lighting, less the emissions saved
by energy generation technologies, expressed in Kg/CO
2
/m²/year. Source: SAP Methodology.
15 Prior to FY21, our timber was verified as part of the WWF network for responsible timber and includes legal timber. In FY21 and FY22, the verified figure covers only timber
certified to FSC or PEFC.
* Figure verified by SGS.
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16
Redrow plc Annual Report 2022
17
ESG scorecard continued
KPI THEME KPI DATA POINT KPI DEFINITION
UN I T
REPORTED
12 MONTH
PERIOD
TH I S DATA
RE L ATES TO
(FOR FY22) FY22 FY21 FY20 TARGET
READ
MORE
SUPPLY CHAIN
– PAYM E NT S
ON TIME
16
Average time taken to
pay invoices
The average time taken to pay supplier invoices and subcontractor
applications from the date of receipt.
days 28 June 2021
to 3 July 2022
23.1* 23.5* 25.5 N/A – Signed up
to Prompt
Payment Code
and report data to
HMRC 6 monthly
Page 74
Invoices paid within 30
days
Percentage of invoices and applications paid during the reporting
period within 30 days.
% 28 June 2021
to 3 July 2022
81.2* 79.1* 76.3 N/A – Signed up
to Prompt
Payment Code
and report data to
HMRC 6 monthly
Page 74
SUPPLY CHAIN
– MODERN
SLAVERY
% of material suppliers
and manufacturers
who have actively
confirmed compliance
with the Modern
Slavery legislation and
Redrow Code of
Conduct
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.
% 28 June 2021
to 3 July 2022
96* 100* 100 No target
however aim for
100% compliance
Pages
222 to
223
% of temporary labour
suppliers who have
actively confirmed
compliance with the
Modern Slavery
legislation and Redrow
Code of Conduct
All suppliers of agency/temporary labour staff working on our sites
are monitored for compliance by an external organisation named
Datum RPO.
% 28 June 2021
to 3 July 2022
100* 100* 100 No target
however aim for
100% compliance
Pages
222 to
223
All of the FY22 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 using SGS Sustainability Report Assurance protocols, including
the Global Reporting Initiative (GRI) Principles for Report Quality: accuracy, balance, clarity, comparability, reliability and
timeliness, to enable robust evaluation of data subject to verification. The full Assurance Statement can be found on our
corporate website: investors.redrowplc.co.uk/key-non-financials.
16 All ‘Payments on time’ KPIs cover 100% of suppliers and subcontractors.
* Figure verified by SGS.
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Redrow plc Annual Report 2022
18
Redrow plc Annual Report 2022
19
Our business model
OUR BUSINESS MODEL
Our strategy is achieved by channelling our resources through our strategic principles and ensuring
these are embedded within our relationships with our stakeholders.
CREATING LONG-TERM SUSTAINABLE VALUEINPUTS OUTPUTS
The quality and location of our land
holdings is a vital component to
enable us to deliver sustainable
and profitable growth.
LAND HOLDINGS
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.
CUSTOMERS
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.
OUR FINANCIAL RESOURCES
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
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 PEOPLE
We adopt a collaborative
approach, engaging with
community stakeholders to
ensure our developments become
thriving communities, delivering
better places to live.
COMMUNITIES
We recognise that the setting of
our homes is of equal importance
to the quality and design of the
individual homes themselves.
OUR PLACEMAKING SKILLS
We work closely with our
experienced suppliers and
subcontractors to maintain a
strong and reliable supply chain
delivering quality products and
workmanship.
SUPPLIERS & SUBCONTRACTORS
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 PEOPLE
LAND, PLANNING AND DESIGN CONSTRUCTION & COMMERCIALSYSTEMS SALES AND MARKETING
& CUSTOMER SERVICE
ENVIRONMENTAL – SOCIAL – GOVERNANCE (ESG) KPIs
RISK MANAGEMENT
Our experienced land and
planning 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 thoughtfully designed
quality new homes reflect
timeless exteriors with flexible
and modern interior living
spaces.
Our 'Redrow 8' placemaking
principles provide a framework
for us to create sustainable,
well-connected and well-
landscaped developments that
will leave a legacy of attractive
and vibrant places to live for
generations to come.
We have a dedicated team of
in-house IT specialists including
systems analysts, software
developers, digital experts,
cyber security officers, help
desk experts and systems
accountants led by our Chief
Information Officer.
The team work closely with
Group departments and
the operational businesses
to continue to improve and
evolve our systems with
major improvement projects
sponsored by members of the
Executive Management Team.
By building safely, responsibly
and considerately we continue
to deliver much needed homes.
Build quality is a key focus
together with managing our
use of resources effectively
to create homes of enduring
quality whilst minimising our
environmental impacts and
ensuring value for money,
working closely with our supply
chain.
We aim to provide our
customers with the best
possible experience, every time
they interact with us.
We continue to invest in
developing our customer
experiences, from welcoming
Customer Experience Suites
and My Redrow online portal
to our after-sales service all
underpinned by colleague
training, customer feedback
surveys and focus groups.
20 21
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Chairman's statement
CHAIRMAN'S
STATEMENT
RICHARD AKERS
Non-Executive Chairman
I am delighted to report a year of
strong growth which has resulted in
our underlying profits returning to the
record levels achieved in 2019 prior to
Covid-19. Revenue increased by 10% to
£2.14bn and underlying profit before
tax
1
was up 31% year on year, both
ahead of our pre-covid 2019 figures.
The Group entered the year with a
record order book of £1.4bn and
strong demand for housing. In
particular, our award winning Heritage
range of family housing in well chosen
locations and with excellent place
making has increased its appeal as the
market has evolved and remains
ideally suited to our target customer.
In addition to the £2.1bn of revenue
achieved, the Group still ended the
year with an order book of £1.44bn.
FINANCIAL RESULTS
The Group delivered 5,715 legal
completions in the year (2021: 5,620).
These completions generated revenue
of £2.14bn (2021: £1.94bn). However, in
terms of revenue from the sale of
homes from the ongoing business
1
,
the increase was 20% to £2.07bn.
Underlying profit before tax of £410m
was up 31% on the previous year
(2021: £314m). Underlying earnings per
share increased by 30% to 96.0p
(2021: 73.7p).
The Group generated £128m of cash to
end the year with net cash of £288m,
whilst continuing to invest in growth.
works to take a number of years to
complete.
PEOPLE
Nick Hewson will be stepping down as
a Non-Executive Director at the
forthcoming AGM having served nine
years on the Board. 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.
On 1 February 2022, Oliver Tant was
appointed to the Board as a Non-
Executive Director and Audit
Committee Chair-Designate. He is also
Our underlying Return on Capital
Employed improved from 18.53% to
24.54%
1
, close to our medium term
target of 25%, and underlying Return
on Equity increased from 17.95%
to 21.45%
1
.
In line with the company’s policy of
three times dividend cover the Board
is proposing a final dividend of 22.0p
making a total of 32.0p for the year, up
31%. Subject to shareholder approval
at the Annual General Meeting on 11
November 2022, this will be paid on 16
November 2022 to all shareholders on
the register at close of business on 23
September 2022.
In addition, following a recent review
of the cash requirements of the
business to achieve its long term
growth plans, the Board announced on
14 July 2022 a share buyback of up to
£100m in line with our published
capital allocation policy. The
programme is ongoing and scheduled
to be completed by 31 July 2023. This
is the second time the business has
returned surplus cash to shareholders
and follows the B share scheme of
£111m in 2019.
STRATEGY
The Group has continued its
withdrawal from the London market
and that is expected to be complete
by the end of calendar year 2022,
other than the ongoing Colindale
development.
a member of the Audit, Remuneration
and Nomination Committees. He will
take over as Chair of Audit on Nick’s
retirement from the Board.
I would like to thank everyone in the
business for their efforts this year in
contributing to our excellent financial
performance and the ongoing success
of our strategy.
TRADING AND OUTLOOK
Given rising inflation and higher
interest rates it is not surprising the
buoyant housing market has
moderated recently and demand has
returned to historically average levels.
It is on this basis we have prepared
our medium term plan and we are
Excellent progress has been made
during the year executing our strategy
to grow in the regions. The new
Southern business, based in Crawley,
officially opened at the end of June
but the team has been active in the
land market for some time. This
division is expected to make a positive
contribution to profits in the current
financial year.
Capital released from London in the
last two years has been reinvested in
land to help grow the regional
businesses. At the end of this financial
year our total land holdings stood at
67,400 plots, compared with 60,100 at
the end of the 2019 financial year.
Although the planning system is
difficult at present, this gives us a
strong pipeline of new outlets to
continue our growth.
FIRE SAFETY
On 5 April 2022, Redrow signed the
Government’s voluntary building
safety pledge to remediate all
residential buildings over 11 metres in
which we were involved in the last 30
years. We have a full time team of
colleagues expediting these works on
a timely basis, in conjunction with the
management companies of the
buildings concerned. We have set
aside provisions of £200m to cover
these costs, including an exceptional
charge of £164m and a non-
exceptional charge of £10m in the
2022 financial year, and we expect the
confident our timely investment in
land, combined with strong demand
for our Heritage homes, will support
our continued growth. In addition, our
opening order book of over £1.4bn has
put us in an excellent starting position
for the 2023 financial year. As a result,
the business is well placed to deliver
another set of strong results.
Richard Akers
Non-Executive Chairman
13 September 2022
We are confident our timely investment in
land, combined with strong demand for
our Heritage homes, will support our
continued growth.
The Leamington
Lifestyle house type at
Herne Bay, Canterbury
The Pickmere Show
Home at Tabley Park,
Cheshire
1 Redrow uses a variety of statutory performance measures and alternative performance measures when reviewing the performance of the Group. Underlying is defined as
any statutory or alternative performance measure pre-exceptional items. See note 23 for an explanation and reconciliation of these alternative performance measures.
22 23
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GROUP CHIEF
EXECUTIVE’S
STATEMENT
MATTHEW PRATT
Group Chief Executive
Group Chief Executive's statement
OVERVIEW
It’s been another excellent year of
achievement for the Group. We have
grown the business, whilst continuing
to evolve our successful strategy
based on our market leading Heritage
Collection and prime locations.
Our underlying
1
profits have returned
to the record levels achieved in 2019
pre Covid-19.
Our quality new homes reflect timeless
exteriors with flexible and modern
living spaces. Customers appreciate
the additional value this brings and the
unique way they can blend personal
and work life to create a better way to
live.
Cash buyers represented 33% (2021:
23%
2
) of our reservations as we
continued to tap into the resilient
downsizer market. Customers
upgraded their homes with extras in
record numbers, whether that be
bespoke flooring, granite worktops or
home offices. This continues to be a
key point of differentiation for the
business with customers selecting and
completing their choices via the award
winning My Redrow online service.
We have created sustainable value for
our stakeholders and successfully
delivered a number of strategic
projects during the financial year,
many of these as part of our successful
Redrow 2025 initiative to accelerate
innovation across the business. We
have improved the customer
experience; driven efficiency and
pushed forward on improvements to
our product range, in part to
incorporate our climate change
objectives.
All these factors have ensured the
underlying demand for our quality new
homes continues to remain strong.
Total legal completions increased to
5,715 from 5,620 in the previous year
with revenues increasing by 10% to
£2.14bn (2021: £1.94bn).
Reflecting the differentiation of our
premium homes, the reservation value
per outlet increased to £311k per week
(2021: £288K) as we continued to
deliver industry leading reservation
rates on a revenue basis. Our average
weekly reservation rate for the year
was 0.68 (2021: 0.70) per outlet as we
achieved a successful balance
between pricing and volume.
Help to Buy was just 8.6% (2021: 28%
2
)
of our reservations in the financial year
under review (7% outside of London)
as we successfully finalised our
transition away from the scheme.
As we expected, its removal has had
no impact on our reservations. This
reflects the strategic advantage of
Redrow’s Heritage Collection and how
it continues to set us apart from the
rest of the market.
The intrinsic value of our quality
homes, along with sales discipline,
also enabled us to capitalise on strong
overall house price inflation
(HPI).Reservation prices increased on
average by 12% across the financial
year due to a combination of
geographical and product mix and HPI.
The effective management of HPI
placed the business in a strong
position and, going forward, will help
to insulate the Group from any
macro-economic challenges ahead.
This offset build cost inflation at
around 10%. Commodity prices were
driven higher as global inflation
accelerated, along with demand for
building materials. Material availability
is now improving across many areas
and shortages are beginning to ease.
As supply increases, we expect prices
to moderate. Furthermore, our strong
supplier relationships continued to
help us mitigate build cost inflation
and fulfilment issues. Our site teams
worked largely uninterrupted, whilst
improving both production output and
build quality.
We ended the financial year with a
strong forward order book of £1.44bn
(2021: £1.43bn) of which 76% (2021:
73%
2
) is exchanged. As we executed
our previously announced strategy to
exit our London sites (with the
exception of Colindale Gardens), the
cash generated from these disposals
funded land acquisitions within our
strong regional network. This included
our new Southern division which
formally opened at the end of June
2022. It will contribute to profits in the
current financial year. Covering Surrey
and East and West Sussex, it is in a
perfect position to capitalise on strong
Our underlying profits have returned to
the record levels achieved in 2019 pre
Covid-19.
demand for our homes within London’s
commuter belt.
During the financial year under review,
our land buying activity was selective.
We focussed on land replacement and
moderate growth – all at normal
average hurdle rates. We were able to
do this because of our substantial land
investment in 2021, when we added
over £3bn of Gross Development
Value to our land holdings with
planning.
We added 5,958 plots with planning
across 24 sites in the year, with a GDV
of over £2.3bn. During the year we
also purchased a number of sites,
some of which were allocated through
the local plans at enhanced margins to
reflect the time-risk associated with
getting them through the planning
process.
As previously guided our average
outlets were 111 (2021: 117), which was
in part a result of our reduced land
purchases during the early stage of
the Covid-19 pandemic, but
particularly due to our strong sales
rate, which meant outlets closed more
quickly than originally expected.
We expect next year’s outlets to
increase to 120 as a result of our land
purchases in 2020, which are now
coming on-stream.
We ended the year with net cash of
£288m (2021: £160m). Having
considered our strong land position,
the cash needs of the business to
achieve our growth plans and the
prevailing share price, the Board
concluded the Group has sufficient
funds to enter into a capital return in
the form of a Share Buy Back
programme up to a maximum of
£100m. Announced in July, it is
delivering value for our shareholders,
whilst maintaining our growth strategy.
STRATEGY AND MEETING THE
CLIMATE CHALLENGE
Our purpose is to create a better way
to live. We have a robust strategy in
place to deliver on this aim, which is
based on our three pillars: Thriving
Communities, Building Responsibly
and Valuing People. It focuses on the
activities we believe will create the
most value in the long term, for our
stakeholders.
During the financial year we
conducted an assessment using the
double materiality approach to ensure
that we continue to understand what
matters most to our stakeholders.
Understanding their most pressing
issues is crucial to help shape our
business strategy. It’s clear one of the
top issues is the shared goal of
addressing climate change and
reducing carbon emissions.
Steady progress has been made to
reduce our Scope 1 and 2 emissions
and we are taking further actions this
year to make sure emissions continue
to come down. We have taken the
significant step of setting, and
submitting for validation, our ambitious
near-term science-based carbon
reduction targets for Scope 1, 2 and 3
in line with the goals of the Paris
Agreement.
Our Redrow 8 Placemaking principles,
which we have been following for
more than three years, are a key point
of differentiation for Redrow. They are
at the heart of what we do and have
created a culture of great placemaking
within the business, which is
instrumental in delivering wider social
value and benefits for wildlife –
generating greater wellbeing for
customers, communities and nature.
The housing industry is subject to
intense Government pressure and a
rapidly moving regulatory agenda. The
upheaval in Westminster, with another
recent change of Housing Minister, is
unhelpful. This is particularly the case
in an industry which benefits from a
long-term strategic approach to
housing.
Despite this, the Group is well
positioned to embrace all aspects of
the current Government policy plans.
We welcome the introduction of the
New Homes Quality Code and the
New Homes Ombudsman which will
help to improve the reputation of the
industry and provide additional
reassurance to customers.
From our perspective it will help to
further differentiate our approach to
build quality and customer service.
The introduction of our online
Ash Holt, Newton
Garden Village,
Nottinghamshire
The Welwyn Show Home at
Ash Holt, Newton Garden
Village, Nottinghamshire
24 25
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Group Chief Executive's statement continued
Homeowner Support Portal with over
90% of customers submitting their
moved-in incidents online; the launch
of our new online complaints system
and our extensive colleague training
programme, means we are in an
excellent position to embrace the new
regime. We were very pleased that
94.5% of our customers would
recommend Redrow as part of the
NHBC survey and we continue to be
rated as ‘excellent’ on Trustpilot.
In April 2022 we signed the Building
Safety Pledge, formally agreeing to the
principle that leaseholders should not
have to pay for any costs associated
with life critical fire-safety remediation
work arising from the design,
construction or refurbishment of
buildings over 11 metres going back
30 years.
We have appointed a project team and
scoped the number of buildings that
fall within the pledge criteria. We have
written to all responsible entities in
relation to these buildings. The
process of remediating affected
blocks will take a number of years but
we are committed to completing the
process as efficiently as possible.
We repeat our calls for overseas-
based developers to be subject to the
same framework as domestic-based
organisations. Equally relevant,
materials providers in the supply chain
need to address their responsibilities
and contribute to the cost.
It is fundamentally unfair for domestic
developers to bear the sole financial
burden, whilst overseas developers
seemingly evade any sort of
contribution.
The Group is prepared for the
introduction of the Part L regulations
and has reflected the additional cost
within all land purchases and existing
sites. We are currently trialling Air
Source Heat Pumps as part of our
Future Homes Standard plans and
have a clear pathway to meeting the
required standards.
The ‘fabric first’ energy efficiency of
our homes is the fundamental starting
point and places new build at an
advantage to second hand homes.
This plays directly into our successful
strategy of targeting that part of the
overall housing market.
An overly bureaucratic planning
system continues to be a significant
constraint on house builders, but also
the economy as a whole. In addition,
there are not enough council planning
officers and the process continues to
be beset with delays. This is further
exacerbated by the water neutrality
and nutrient neutrality issues.
The knock-on effect within the supply
chain is very significant and ultimately
it means communities do not have the
opportunity to secure the quality new
housing they so badly need. As a large
housebuilder we are best placed to
navigate these challenges, but
inevitably they will eventually drive
smaller to medium sized house
builders out of the market.
PEOPLE
In our recent Insight survey over 94%
of our colleagues were, once again,
proud to work for Redrow. We are
delighted with this feedback,
reflecting the moves we’ve made to
modernise the way we work and the
quality of our product and customer
experience.
Around 15% of our workforce are
trainees as we continue to inspire the
next generation to build as part of our
Valuing People strategic pillar. Our
inhouse training team deliver a range
of programmes to develop our trainees
as they grow throughout the business.
Pleasingly, in the financial year under
review, we had 261 internal promotions.
MARKET OUTLOOK
Over the last two years the market has
been incredibly strong with elevated
demand, partly resulting from people’s
changed priorities around working from
home. We are now seeing a return to a
more normal market where demand is
moderating to historical levels.
We capitalised on last year’s strong
market with our focus on HPI. This was
possible because of our strong,
differentiated product and these gains
are now embedded in our forward
order book.
This provides the business with
additional resilience to weather any
potential deterioration in the macro-
economic picture.
In this market environment our
Heritage Collection remains highly
desirable. Our focus on innovative
placemaking, paired with our premium
detached homes, keeps us well
positioned to meet the requirements
of our potential customers.
The fundamentals of the market
remain good. Interest rates, despite
recent increases, are at historically low
levels; mortgage availability is very
good and employment levels are
strong.
We are well aware of the challenges of
the increasing cost of living. It’s clear
our quality new homes will have a
growing and additional point of
differentiation from the second hand
market around energy efficiency.
In the first 10 weeks of the new
financial year demand has moderated
to historic levels. The value of private
reservations was £360m (2022:
£340m) and, more importantly, our
revenue per outlet per week
continued to be at a market leading
level of £296k (2022: £294k)
demonstrating the desirability of our
Heritage Collection.
Our colleagues and partners strive
every day to create quality homes and
places for our customers and I’d like
to, once again, thank them for their
dedication, hard work and support,
which is so crucial to Redrow’s
ongoing success.
The advantage derived from our
people, combined with our approach
to evolve our proven strategy, places
Redrow in an excellent position to
continue its strong progress.
Matthew Pratt
Group Chief Executive
13 September 2022
We have grown the business,
whilst continuing to evolve our
successful strategy based on our
market leading Heritage Collection
and prime locations.
Matthew Pratt
Group Chief Executive
ANOTHER
EXCELLENT
YEAR OF
ACHIEVEMENT
1 Redrow uses a variety of statutory performance measures and alternative performance measures when reviewing the performance of the Group. Underlying is defined as
any statutory or alternative performance measure pre-exceptional items. See note 23 for an explanation and reconciliation of these alternative performance measures.
2 2021 comparatives are for a like-for-like 53 week year.
The Balmoral house type
at Woodford Garden
Village, Cheshire
26 27
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Operating review
OPER ATING
REVIEW
Wilton Hill, Wilton,
Wiltshire
This year, we confirmed which
sustainability issues are most
important to us and our stakeholders,
by updating the materiality assessment
we carried out in 2018. Our
assessment looked at financial
materiality, which is the potential
impact of sustainability issues on
Redrow’s financial value, and impact
materiality, which takes account of
how our activities affect the
environment, people and society.
The assessment confirmed that our
strategy continues to reflect the right
themes and that we are working on the
correct objectives to drive business
success and respond to the issues that
are most important to our
stakeholders.
FTSE4Good
In June 2022 we
became a
constituent of the
FTSE4Good Index
which is a globally
recognised ESG
benchmark analyst. This is recognition
of the company’s commitment to
continued ESG improvement.
1
The three pillars of our strategy – Thriving Communities, Building Responsibly
and Valuing People – focus us on the activities that will achieve our purpose
and create long-term sustainable value for our investors, colleagues, partners,
customers and communities. By following this strategy, we have built a strong
foundation of environmental, social and governance (ESG) commitments,
which ensures that the value we create benefits all our stakeholders.
Further success
for Redrow in the
NextGeneration
Benchmark Results
NextGeneration
recognises the
most-sustainable
housebuilders in the
UK. We received a Silver award, with
our score of 69 placing us fourth
overall. Our score was ten points up
from last year and well above the
industry average of 34. The assessors
commended our high level of
transparency and disclosure.
FT Europe’s
Climate
Leaders
Once again
the business was successful in the
‘Europe’s Climate Leaders’ FT
rankings, included as one of 450
European climate leaders. This annual
analysis, now in its second year, lists
companies that have achieved the
greatest reduction in their Scope 1 and
2 greenhouse gas (GHG) emissions
intensity over a five-year period (this
period covers 2015 – 2020). We were
included as one of just ten UK
construction firms featured on the list.
Our purpose
is simple: to
create a better
way to live.
CRYSTAL
™
™
1 FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Redrow plc has been independently assessed according to the
FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell,
the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices.
The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.
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ASSESSING OUR
MATERIAL ISSUES
Working with the support of an external consultancy, we considered
a wide range of potential material ESG issues for our business. This
included reviewing sustainability reporting frameworks, global ESG
trends and those affecting our sector, as well as our own sustainability
priorities, risk register and previous materiality assessment.
Woodford Garden Village, Cheshire
We then engaged with our most
relevant stakeholders, analysing the
impact of these issues on our business
and on them. Internal stakeholders
included employees and the Main
Board, with external stakeholders
including customers, investors,
suppliers, landowners, local
communities, local planning authorities
and Non-Governmental Organisations
(NGOs). In total, nearly 300 people
took part in the process.
Using an online survey tailored to each
group, we asked our stakeholders to
score each issue on its impact
(whether positive or negative) and
how likely it was that the impact
would occur.
OUR MATERIAL ISSUES AND
STRATEGY
The top five issues in our ranking were
placemaking; build quality; health and
safety; carbon and climate change;
and environmental homes, which
includes both product design and
lifecycle management.
We reviewed the ranked list of issues
against our strategy. All the material
issues we scored align with our
strategic pillars, confirming that our
strategy remains appropriate. The
table below shows this alignment, with
the top five issues in bold. Some
issues appear more than once, where
they’re relevant to two or more pillars.
Our Executive Management Team
reviewed and approved the final list
and the process we’d followed.
NEXT STEPS
Investors and customers are two of our
most important stakeholder groups.
Initial participation in our materiality
survey from both of these groups was
low. For that reason, we will be holding
interviews and undertaking further
engagement with these two groups.
This will enable us to hear directly
from them as to which environmental
and social issues matter most, and
what action they want to see us taking.
These insights will feed into the
ongoing review of our business
strategy in FY23.
• Placemaking
• Biodiversity
• Pollution prevention
• Homes for all
• Build quality
• Health and safety
• Carbon and climate change
• Environmental homes – product
design and lifecycle
management
• Biodiversity
• Pollution prevention
• Resource efficiency and waste
• Water
• Health and safety
• Company culture and diversity
and inclusion
• Skills and training
• Compliance and ethics
• Employee package
• Sustainable procurement
• Governance for ESG
Redrow has a long history of
engagement with all our stakeholders.
Using the 'double materiality' approach
allows us to understand the impact of
our business on stakeholders and the
importance of these issues to them.
This ensures we have the correct
business strategy for long term
sustainable growth.
Rose Sandell
Group Communities Director
UNDERSTANDING
WHAT MATTERS
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31
SUPPORTING THE UNITED
NATIONS SUSTAINABLE
DEVELOPMENT GOALS
The United Nations Sustainable
Development Goals (SDGs) are a
blueprint for a better, more sustainable
future for all. The 17 goals are an
ambitious set of targets to drive action
by all countries worldwide. All of the
goals are important and we make a
contribution to many of them but as a
housebuilder we identify with four of
the goals in particular – those where
we can make the most significant
contribution. These SDGs are set out
below, along with how we are
responding, and how we are driving
performance through our targets.
SD G DEFINITION OUR APPROACH
SDG 11:
Sustainable
cities and
communities
By 2050, 70% of the world’s population will
live in cities, making cities critical in achieving
a sustainable future for the world. Multi-
stakeholder and community engagement are
necessary to ensure that solutions are
inclusive, resilient and sustainable.
Key focus areas for this SDG include
affordable housing, infrastructure
investments, sustainable transportation,
access to public spaces, and sustainable
buildings.
• We design great places to live, with
beautiful open spaces for residents and
surrounding communities to enjoy,
amenities that encourage neighbours to
come together and which reduce car-
dependance. We achieve this by rigorously
applying our Redrow 8 placemaking
principles.
• We incorporate a balanced mix of
affordable tenures and a range of housing
to meet identified local housing needs.
• We aim to hand over every home 100%
defect free. However, if this doesn’t
happen, we look to resolve defects as
quickly as possible and to the highest
standard.
SDG15:
Life on land
60% of the world’s ecosystem services have
been degraded over the past 50 years and
society continues devaluing our natural
resources at an alarming rate. While many of
the effects are felt locally first, the long-term
consequences are global and the scale is
highly relevant to business, presenting risks
and opportunities.
Key focus areas for this SDG include
sustainable land management, preventing
deforestation and forest degradation, land
and habitat remediation, and improving
freshwater ecosystems.
• Our biodiversity strategy (Nature for
People) is underpinned by 15 commitments
across three themes: nature gains, wilder
lives and a flourishing legacy.
• We’re developing a range of solutions to
address nutrient and water neutrality,
including funding new wetlands and water
treatment plants on our developments.
• For the last 15 years, we’ve promoted
responsible forest management by buying
timber with full certification from
sustainably managed forests.
• We rigorously manage environmental risks
on our sites, to avoid polluting land, air or
water.
SD G DEFINITION OUR APPROACH
SDG13:
Climate action
Climate change is causing increased
temperatures, extreme weather events,
changing precipitation patterns, rising sea
levels and ocean acidification which
ultimately impact people’s livelihoods. We
must work to limit the temperature increase to
1.5°C above pre-industrial levels.
Key focus areas for this SDG include
decarbonising operations and supply chains,
improving energy efficiency, reducing the
carbon footprint of products, services and
processes, and setting ambitious emissions
reductions targets in line with climate
science, and scaling up investment in the
development of innovative low-carbon
products and services.
• We’ve developed a Climate Change
Strategy, which addresses carbon
reduction, business resilience and adapting
to climate change.
• We’ve achieved year-on-year reductions in
carbon emissions from our operations.
• We’re innovating and developing our
homes and places, to make them more
energy efficient and provide ways to
generate low-carbon energy.
• We’re assessing and mitigating flood risk
across all our developments, and ensuring
our designs minimise the potential for
homes to overheat.
SDG5:
Gender equality
Gender equality is a fundamental human right
and women’s and girl’s empowerment is
essential to expand economic growth,
promote social development and enhance
business performance. Companies can
support the empowerment of women and
girls through core business, social
investment, public policy engagement and
partnerships.
Key focus areas for this SDG include equal
remuneration for women and men, equal
numbers of women in leadership, diversity
and equal opportunity, access to sexual and
reproductive health-care services, childcare
services and benefits, and elimination of
workplace violence and harassment.
• We actively promote inclusion, avoid
discrimination and bias, and embrace
diversity.
• We promote inclusive and fair practice in all
relations with employees, preferred
supplier agency workers, subcontractors,
suppliers and customers, taking into
account the diverse nature of cultures,
perspectives and backgrounds and local
and regional needs.
• We support women through a women’s
network and regular webinars.
• We aim to increase the number of females
and employees from ethnic minority
backgrounds, by introducing diversity
targets for our graduate recruitment
programme.
Clockwise from left: Solar panels on the Oxford Lifestyle house type at The Shires, Essex. Allotments at Frenchay Gardens,
Bristol. Members of the senior leadership team visiting the NHBC Training Hub, Tamworth.
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In this section
A Better Way To Create Thriving Communities 32
The Impact of Placemaking 34
Our Principles for Placemaking 36
Placemaking in Action 38
Listening to Learn: Our Community Engagement Approach 40
Creating Social Value 42
Our Biodiversity Strategy: Nature for People 46
Introduction from Rose Sandell,
Group Communities Director
Placemaking – how we plan and design a happy
and healthy place to live, which complements
the surrounding area – is our starting point
for creating a thriving community. We have an
established strong set of principles in place
to guide our placemaking, which we call the
Redrow 8. They ensure we design and deliver
the same consistently high standard across every
development.
Supporting nature is essential to the design of our
communities. Thoughtful, considered placemaking allows
us to enhance biodiversity and help people connect with
it. This benefits people’s physical and mental health and
encourages them to care for the wildlife on their doorstep.
It makes our communities more attractive places to live
and visit and also means that we can protect and enhance
local wildlife by creating new habitats.
To create thriving and sustainable places, we have to
understand each community we work in. We consult with
the existing community to help us find the right solution
for every new development. Our approach considers and
takes on board local views and that helps our customers
to connect with their neighbours and the existing
community.
Leaving an impact and a legacy within the communities
we build goes beyond our local economic investment. In
addition to the jobs and training opportunities we create
through working with local subcontractors and suppliers
and providing new homes and accessible spaces, we add
value through volunteering and supporting local charities
and community groups, by protecting green and natural
spaces and engaging with schools and colleges. This
approach supports our vision of creating more sustainable
and connected communities.
We understand the need to ensure a balanced sustainable
community by building a range of homes for all on our
developments, including well-designed affordable homes
that meet local needs and blend seamlessly alongside
our homes for sale. Our open spaces and play parks
complement local facilities and offer the chance for
the community to come together. We also fund many
community projects, from new school buildings to public
art installations, and support voluntary organisations to
deliver further benefits to local people.
We’re determined to do more. Our strategy pushes us
to continuously improve our placemaking, add greater
social value and help nature to truly flourish. Doing this
successfully will encourage customers to continue to
choose Redrow, because they value both the quality of
the home they buy and the community they’ll be part of.
A BETTER WAY
TO CREATE
THRIVING
COMMUNITIES
ROSE SANDELL
Group Communities Director
Thriving Communities highlights
£281m
Community Infrastructure, S106 spend
and Affordable Housing
1,250
Affordable homes delivered
in FY22
1,205
Acres of Public Open Space
delivered on our developments
Placemaking, creating social
value and access to nature
for all are the foundations
that make this possible.
WE AIM
TO BUILD
COMMUNITIES
THAT THRIVE.
Rose Sandell
Group Communities Director
95%
would find access to local
green spaces beneficial
77%
want to be able
to charge their
electric car on their
driveway
85%
find streets comprising
detached homes of a
traditional design with
front gardens attractive
66%
believe a detached home
is most likely to provide the
flexibility to create a dedicated
home-working space
78%
aspire to live in a
detached home with
a front garden and
dedicated parking to
the front
68%
stated the preferable
place to park their
car is on a private
driveway to the front of
the home
PUBLIC SURVEY COMMENTS
93%
would prefer their homes
to be set back behind
a front garden
When designing successful new places and communities it is essential that the needs and aspirations of home buyers, in
terms of what they want from their home, are incorporated.
Source: YouGov survey of over 2,000 adults in February 2021
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THE IMPACT OF
PLACEMAKING
The settings we create for our homes
are just as important as the quality and
design of the homes themselves.
Through effective placemaking, we
consider issues such as character and
identity, community relationships and
networks, natural resources and
creating healthy places. As living in
beautiful and sustainable places
makes people happier and healthier
and encourages them to choose our
homes, placemaking is also integral to
our profitability.
Our ‘Redrow 8’ placemaking principles
provide a framework for us to create
sustainable, well-connected and
well-landscaped places that
incorporate nature and are pedestrian
and cycle friendly. Following these
principles helps us to stay ahead of
what homebuyers are looking for and
to prepare for any legislative changes
to how we develop communities, so
that we continue to deliver sustainable
communities that reflect homebuyers’
changing needs.
There’s good evidence that some of
the changes the pandemic made to
our lifestyles are here to stay. For
example, research from the Office for
National Statistics in May 2022
showed that more than eight in ten
people who worked from home during
the pandemic intended to continue to
do so for at least part of the week. As
a result, people increasingly want
homes and neighbourhoods where
they can both live and work. Our
research with potential customers
shows their priorities include being
near to amenities, family and friends,
having open green space on the
doorstep, and access to good public
transport. These responses suggest
that people increasingly want to
engage with their local area and feel
part of their community.
The Government has also recognised
the benefits of building vibrant and
beautiful communities. In July 2021, it
put beauty and placemaking at the
heart of the planning process, when
changes to the National Planning
Policy Framework came into force.
“ As we were all moving in one after another, we
became this close-knit community, particularly after
Covid. Whether it be just bumping into each other
dog walking, or via Instagram, where I’d search for
new residents and they’d search for me. The
closeness means we all look out for each other, it is
just a lovely community."
Issy & Ian
Customers at Romansfield, Okehampton
“ We chose Redrow because of the stylish house
design, good reputation and lovely environment of
Newton Garden Village. Newton Garden Village is
close to plenty of great schools as well as not
being far from larger cities like Nottingham – so it
was the perfect place for us.”
Kenneth & Charis
Customers at Newton Garden Village, Nottingham
“ Finding out what was happening in the local area
was a very important part of the decision-making
process for us. We wanted to make sure we were
going somewhere where we could meet new
people and enjoy ourselves.”
Janet & Derrick
Customers at Appledore Green, Tenterden
“ Moving to our new home has been great. It’s given
our youngest a new sense of independence, as
she’s been able to pop out to the local supermarket
on her own. We’re also able to go out for dinner or
socialise with friends without having to drive, which
is a real luxury.”
Sarah & Alex
Customers at Marleberg Grange, Marlborough
Placemaking is the legacy
we leave behind.
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OUR PRINCIPLES
FOR PLACEMAKING
New open spaces at
our Langley Grange
development, Scissett,
West Yorkshire provide
destinations for the
community
A landscape-led approach
to the design of spaces
and gardens at our
Penlands Green
development, Hawards
Heath, West Sussex
enhances kerb appeal
Our employees also rated
placemaking in their top five issues
and we have continued to develop our
culture of placemaking within Redrow
over the last 12 months. We have
design manuals and guidance notes to
give our teams a clear understanding
of what our customers expect when
we’re creating new places. We run
training and seminars, to support
colleagues as well as presenting our
approach to placemaking externally to
stakeholders at conferences and
webinars, interviews and podcasts.
Our masterplanning team supports all
our divisions from the earliest stages
of each development, helping them to
work up plans showing how we intend
to make best use of the site, from how
the homes will be laid out to the open
green spaces our customers want. Our
internal Design Review Panel, which
includes members of the Executive
Management Team and the relevant
divisional Managing Director, reviews
the layout produced.
At several stages in the process, we
score each layout against a Redrow 8
checklist, to ensure we are doing
everything we can to meet our
placemaking standards. When the
development is complete, we audit it
using a Redrow 8 scorecard, to
identify what went well and where we
could have done better.
Our Redrow 8 principles have guided our approach to placemaking
for more than three years. They make sure that we consistently
deliver great places to live for all our customers and that we listen
to and understand what existing communities want. This year’s
materiality assessment found that placemaking is the highest
priority for local communities, and understandably so.We’re
introducing new ways of consulting and collaborating with existing
communities, so we can use what we learn to target our designs
and investment to maximum effect.
STRATEGY IN ACTION
Discover more about our commitment to
Nature for People
READ MORE P46 TO P47
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PLACEMAKING IN ACTION
Each year, we recognise
developments that exemplify
each of our placemaking
principles through the Redrow
8 awards. These showcase
great practice, encouraging
us to strive for continuous
improvement in our places.
BUILT TO IMPRESS
Penlands Green
This award is for the development that best
creates the ‘wow factor’, both for the
development as a whole and the individual
homes. At Penlands Green, our design and
layout creates a beautiful focal green space
that is defined and overlooked by attractive
and slightly elevated homes. This much-loved
community space features a large mature oak
tree, which is a key focal feature. We’ve also
extended our approach to landscaping to
include the way we’ve treated front gardens
and street trees, creating an attractive setting
to each of our homes and enhancing ‘kerb
appeal’ as well as delivering attractive streets.
The result is a highly attractive, landscape-led
new community.
STREETS FOR LIFE
Alconbury Weald
Our Alconbury Weald development was
the clear Streets for Life winner, with its
beautiful tree-lined streets with cycle
paths running alongside. High-quality
landscaping creates an impressive arrival
to all streets and we created screening
for parked cars using evergreen hedges.
We also designed a network of
pedestrian-friendly ‘shared surface’
streets, where people and vehicles share
the same space, to slow traffic and
encourage walking and cycling.
EASY TO GET AROUND
Newton Kyme
This development provides real choice
for active travel and prioritises
pedestrians and cyclists. It is located
next to the National Cycle Network
and the layout makes connections to
this strategic route as easy, direct and
attractive as possible. The Network
provides a safe, attractive and
sustainable cycle route to Tadcaster,
which is only 15 minutes away by bike.
There is also a connection to a
riverside footpath via a new wildlife
area, which provides a walking and
cycling connection to Boston Spa. In
addition, we have included walking
and cycling loops in the design,
encouraging a healthy lifestyle.
PLACES TO GO AND
THINGS TO DO
Frenchay Gardens
This development in Bristol has
fantastic facilities, destinations and
activities for a wide range of age
groups. The new community includes a
‘trim trail’, tennis courts, a destination
play area, pocket parks, croquet and
cricket pitches, picnic tables,
allotments, a community orchard, a
woodland walk and a new primary
school. It is only a short walk across
the village common to a pub and other
facilities. The community is well
connected to the local area via cycle
routes and there’s a bus stop at the
entrance to the development.
KEEPING IT LOCAL
Langley Grange
This award acknowledges an
exemplary design response to a site
and its setting. At Langley Grange, we
retained mature trees and hedgerows
and sensitively incorporated them into
‘pocket parks’. We used local materials
to match the local character, kept the
existing dry stone walls and added
new ones. Walking and cycling routes
link the development with the
surrounding area and to existing
public rights of way. The development
also responds to and reinforces local
wildlife, through open space, ponds
and wildflower meadows.
Discover more of our
Redrow 8 Awards
READ MORE P42
AND P47
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LISTENING TO LEARN:
OUR COMMUNITY
ENGAGEMENT APPROACH
This principle is only going to become
more important, as anticipated
changes to the planning system
propose to increase the requirements
for community consultation and
collaboration. This will give
communities a role in helping to shape
new developments, including street
layouts and house designs, with the
aim of ensuring the development fits
well in the area, there is a sense of
belonging from the start and local
people have 'buy in' to new places.
We engage with local planning
authorities and other stakeholders
from the earliest stage in the design
REDROW 8 AWARDS:
Listen to Learn Winner
Tudor Meadows
For our Tudor Meadows development
in Sawston, Cambridgeshire, we ran a
workshop that involved local school
children designing and laying out the
public spaces and play areas.
We started the workshop by explaining
the basics of good urban design, then
asked the students to choose what
play equipment they wanted, to draw
their designs for the play spaces and
list three things they thought the
development had to include.
We awarded prizes for the best
designs and used the feedback from
the workshop to inform our final
design for the play areas, and included
nine of the top choices for play
equipment.
“I am very pleased to say that Redrow
have been a pleasure to work
with. They were able to translate
the children’s ideas into the final
design, resulting in genuine youth
participation.”
Dr Bonnie Kwok
Principal Urban Designer/Youth
Engagement Lead, Greater Cambridge
Shared Planning Service
process. Our divisional teams have
good working relationships with
planning and design officers and we
work with them to deliver high-quality
places that meet our customers’
requirements.
We have always placed listening to the
community at the heart of our
approach to delivering new places and
our Redrow 2025 initiative identified
several ways that we can develop our
approach and reach as many people
as possible. For example, this year we
have started work on a series of
initiatives to give our teams more tools
to use when consulting local
communities. This includes trialling a
new digital consultation platform,
which can reach a much wider cross
section of local people in an easily
accessible way. This platform can also
host online consultations and design
workshops with the community. This
value-added approach means that we
can use evidence gained from new
ways of consulting and collaborating
to get maximum value from our
designs and investments.
Local school children had the
opportunity to design play
spaces proposed for our
development at Tudor Meadows
‘Listen to Learn’ is one of our Redrow 8 placemaking principles.
It means we are committed to listening to and learning from everyone
involved in the development of our new communities, including
existing communities, local authorities and our customers.
We use an increasingly wide range of ways to
engage, involve and collaborate with local
communities
The design of the play
areas and the play
equipment provided will
be informed by the
design workshop with
local school children
STRATEGY IN ACTION
Discover more about our Redrow 2025 initiative
READ MORE P82
Discover more about our
Redrow 8 award winners.
READ MORE P38
LISTEN TO LEARN
DESIGN
WORKSHOPS
WEBSITES VIRTUAL
EXHIBITIONS
DIGITAL
CONSULTATION
COMMUNITY
LIAISON
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CREATING
SOCIAL VALUE
£281m
Community Infrastructure,
S106 spend and Affordable
Housing.
£130m
Tax contributions
(Includes; corporation tax,
employers social security,
PAYE, SDLT & Council tax).
1,205 acres
Public Open Space – Land on
our developments retained/
will be retained as green
space of landscaped
communal areas.
92%
Of homes are within 500 meters of public transport.
39%
of developments with community infrastructure
(e.g. Buildings providing educational, youth,
community, healthcare etc).
14%
Reduction over *2017
baseline of Carbon Emissions
(Scope 1 & 2) tonnes of CO
2
e.
2.16
Tonnes of CO
2
e per 100m
2
of build (Scope 1 and 2), a
reduction of 14% tCO
2
e/100m
2
against our 2017 baseline.
7.91
Tonnes of construction waste
per 100m
2
of build, a reduction
of 26% against our 2017
baseline.
98.3%
Of waste diverted from
landfill FY22.
10%
Target set for net gain in
biodiversity on each
development.
38.43
Average CCS score FY22.
2,940
Subcontractor
companies supported.
1,898
Suppliers supported.
335
Trainees, apprentices
and graduates.
73
New jobs created within the direct workforce.
£0.2m
Charitable donations.
£207m
Invested in Social/Affordable Homes – capitalised
value of (included in Community Infrastructure, S106
spend and Social Housing above).
22%
Of all our homes delivered are affordable.
Investing in the new communities we build, starts at the planning
stage. By listening to existing local residents and understanding
their needs we can deliver long term social and economic impact.
We invest in the local economy by creating jobs and training
opportunities; working with local subcontractors and suppliers and
providing new homes and accessible spaces.
We donate our time and expertise
through volunteering and supporting
local charities, community groups and
engaging with schools and colleges.
Being a good neighbour whilst
minimising the impact our activities has
on the environment is important to us.
We are members of the Considerate
Constructors Scheme. We are focused
on the protection of our natural
resources and green space with the
aim of providing sustainable,
connected and thriving communities.
The table below illustrates some of the economic, social and environmental value we have created in FY22.
HOMES FOR ALL
We build communities that are
integrated and accessible to local
people. This can include a mix of
different housing types and tenures,
including low-cost home ownership
options.
We work with local authorities to
identify the right mix of affordable
housing for local people. We carefully
integrate these homes into our new
communities alongside the homes we
develop to be sold. We do this in the
same way as we do for our open-
market housing. We focus on ‘kerb
appeal’, use the same materials and
ensure the homes have high-quality
internal spaces and specifications that
meet the needs of those who are
going to call them home. This means
our affordable homes add to the rich
variety of our Heritage Collection and
blend in with the rest of the
development. This is done in
collaboration with our local partner
Registered Providers and together we
meet the needs of their residents.
Wilton Hill
Our Wilton Hill development near Salisbury provides many
different types of accommodation, to deliver a truly
balanced and vibrant community. For this reason it has won
this year's Homes for All Redrow 8 award.
As well as open-market homes ranging from townhouses to
large detached homes, we’ve provided homes for the elderly,
shared ownership apartments, houses and homes for social
rent.
In addition, we’ve helped to deliver Entrain Space, a unique
specialist accommodation and training facility for ex-service
personnel that provides 44 homes, to help support their
transition into civilian life. An onsite café is key to the
interaction between all the community members and will be
open to all households who live on the development, the
wider public and to support partners.
As a social enterprise, Entrain Space run the café and
grounds maintenance for the estate with the help of their
veterans. The Entrain Space helps create a strong sense of
community for informal neighbourly social interactions, with
the community coming together for the Queen’s jubilee
celebrations and at Halloween.
1,250
Affordable homes delivered
this year
REDROW 8 AWARDS
HOMES FOR ALL
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45
STRATEGY IN ACTION
The Mill at Springfield,
Maidstone
The Mill at Springfield is a
development with a rich history,
built on the site of the first steam-
powered paper mill.
Once completed, we’ll have created
a new community within the heritage
assets of the 19th century mill, which
will include 59 affordable homes for
local housing association Golding
Homes and 28 apartments for
private rent, for Maidstone Borough
Council.
When we bought the site in 2018, it
had been vacant for several years.
The derelict industrial buildings and
large areas of hard standing had
been fenced off, blocking access to
the riverfront and buildings.
Our development will return land to
public use, as we restore the original
mill pond, enhance the woodland
and create a new wildflower
meadow, all of which both residents
and the public will be able to enjoy.
Opening up the towpath along the
River Medway will offer new
walkways through the scheme and
into the town centre, while
upgrading crossings and cycleways
from the scheme will encourage
people to walk or cycle into town.
We’ve commissioned a public art
installation for the development,
created by local artist Kerry Lemon.
Engaging with former mill workers,
paper specialists and archaeologists
ensured the sculptures and other
works truly reflected the site’s
heritage and local importance.
By the time the development has been
completed we will have contributed
£1.3m to projects proposed by the
Council for the local community,
including:
• funding to improve the accessibility
of James Whatman Park for locals on
both sides of the river and enhance
the treetop walkways;
• a new three-storey teaching block at
Maplesden Noakes School, which is
due to start this year and will create
180 additional secondary school
spaces; and
• funding for the Kent History and
Library Centre, which is next to the
scheme, to buy new books and
maintain their existing collection.
£1.3m
Contributed to projects
proposed by the Council for
the local community,
Saxon Brook
At Saxon Brook in Devon, this year's Nature for People Redrow 8
award winner, we have created the UK’s first ever pollinator-friendly
housing development, with support from the Bumblebee Conservation
Trust (BBCT).
The development achieves this through large areas of wildflowers, an
orchard and bee-friendly planting throughout. We also provided
bumblebee and gardening information and BBCT membership for all
customers.
In addition, we have created a network of biodiversity-rich spaces,
including new locally distinctive ‘Devon Banks’, the orchard, allotments, a
nature-themed public art trail, a large pond with feeding platform and an
insect hotel.
We forecast that Saxon Brook will achieve a biodiversity net gain of 15%
over pre-development levels and we are using the knowledge we have
gained here to inform our design approach on other developments.
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OUR BIODIVERSITY STRATEGY:
NATURE FOR PEOPLE
REDROW 8 AWARDS
NATURE FOR PEOPLE
Biodiversity describes the variety of all
life, including plants and animals, in an
area.Areas that are more biodiverse
are often attractive places to spend
time in and are better at providing
flood management, carbon storage
and clean water.
We developed our biodiversity
strategy, Nature for People
1
, in
partnership with the Wildlife Trusts. It
contains 15 commitments across three
themes: nature gains, wilder lives and
a flourishing legacy.
This year we launched ‘Biodiversity
Bites’. This learning series provides
expert insight into legal, policy and
best practice biodiversity issues for
our teams. In addition to training,
teams are able to hear about and
discuss good practice and share
knowledge and lessons learnt across
the divisions. The first event examined
BNG from a land purchase
perspective, with colleagues from
across the Group attending.
In December 2021 we ran a workshop
for our partner ecologists, where we
received their feedback on our BNG
and Nature for People approach. This
helped us to revise how we make BNG
calculations early in the land buying
process. We will continue to hold
these meetings every six months and
will be starting similar events with our
landscape designers in FY23.
Next year we will also continue to
embed the Nature for People strategy
within our business and support our
teams through the changes required to
deliver on our BNG target. We will
introduce new ways for communities
and other groups to take part in
designing green and blue
infrastructure on our developments.
We will also be creating Community
Participation Standards, which will
improve the way residents can access
information about biodiversity and
enable them to play a bigger part in
using and caring for these spaces. In
addition, we will start to develop our
approach to assurance and audit for
the strategy, to make sure we are
consistently upholding our
commitments.
TACKLING BIODIVERSITY AND
CLIMATE CHANGE TOGETHER
Climate change and biodiversity are
closely inter-connected: Climate
change is one of the main drivers of
biodiversity loss, and at the same time,
the destruction of ecosystems
undermines nature’s ability to regulate
greenhouse gas emissions and protect
against extreme weather, thus
accelerating climate change.
Our Nature for People strategy
supports carbon reduction and
The strategy considers the wider
landscape impacts of our
developments, using plants that suit
the location, adding green spaces and
features (known as ‘green
infrastructure’) and water elements
such as ponds (‘blue infrastructure’). It
also covers how we can best help
residents to connect with and care for
the nature-rich green spaces and how
we’ll report on outcomes for people
and nature.
resilience to a changing climate by
providing biodiverse green spaces
on-site, increasing vegetation and
shading from trees to provide cooling,
and employing nature-based solutions
for water attenuation. For more
information on our climate change
strategy, please see page 60.
NATURE FOR PEOPLE IN PRACTICE
Featuring Water on our
Developments
As well as protecting existing habitats
we consider carefully the design of
newly created habitats. This year we
have been developing our approach to
designing ponds through our Beautiful
Ponds Working Group, which includes
representatives from multiple
disciplines. As well as being an
attractive amenity for residents, ponds
benefit biodiversity by providing a
habitat for numerous species of plants
and animals, as well as being a source
INTEGRATING NATURE FOR
PEOPLE THROUGH THE BUSINESS
This year we have started to include
Nature for People assessments within
our Redrow 8 post-completion audits.
This helps us understand how our
designs are delivering for nature and
people in practice, so that we learn
what works well and where we can
improve the design and delivery of our
developments. We also receive
feedback from residents, all of which is
fed back to our teams.
of drinking and bathing water for birds
and mammals. The right design can
also allow a pond to take in large
quantities of water during storms,
which helps to prevent flooding.
A Focus on Creating Meadows
Meadows are hugely beneficial for
both plants and wildlife, and ultimately
for people too. They contain a wide
variety of grasses and wildflowers
which provides habitat and food for
many different species. They are often
buzzing with butterflies and bees in
the summer. These insects, important
in their own right, also support a range
of other birds and animals that feed on
them. We are developing new
technical guidance to support our
design teams to create meadows, as
well as information and signage for
customers, explaining the importance
of meadows and what they can expect
during their new meadow’s yearly
cycle and maintenance. As part of this,
we are filming the ‘Life of a Meadow’
Enhancing biodiversity on our developments is a key part of our
approach to placemaking, tackling the nature and climate crises, and
supporting the wellbeing of residents. Local planning authorities
ranked this in their top three issues in our materiality survey.
1 More information on the strategy can be found here: https://www.redrowplc.co.uk/media/alibatd1/redrow-wildlife-trust-pdf-brochure-updated-140322.pdf
Biodiversity Net Gain
(BNG)
• Measures habitats
only; within red-line
boundary
• 30 year management
and monitoring
requirement
Species Focus
• Species protection
& mitigation
• Provision of homes
for wildlife
Nature for People Strategy
• Assessment of impact on
adjacent habitats
• Connectivity with other habitats
(e.g. Nature Recovery Networks)
• Can we exceed 10% BNG?
• Locally relevant planting
• Multi-functional green and blue
infrastructure
• Nature is accessible for people
• Edible landscapes
• Engaging people in care and
use of natural spaces
• Monitoring & reporting of
outcomes for nature and people
A COMPREHENSIVE STRATEGY TO PROTECT AND ENHANCE BIODIVERSITY
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NUTRIENT AND WATER
NEUTRALITY
Many of the UK's rivers and coastal
sites are being affected by pollution
caused by high levels of nitrates and
phosphates. The main sources of this
pollution are water run-off from
farmland containing fertilisers and
manure, and sewage effluent from
industry, homes and other buildings.
To combat the problem Natural
England issued further guidance this
year requiring new homes in problem
catchments to prove they won’t add to
the problem (to be nutrient neutral)
before the Local Planning Authority
(LPA) can approve them for planning.
This has meant local authorities
delaying planning approval for new
developments in many parts of the
country. The Home Builders
Federation (HBF) estimates that more
than 100,000 new homes are held up
in the planning system as a result.
Our response has included funding
new wetlands to offset nutrients from
new homes on our developments.
We are also looking at other potential
solutions, such as including water
treatment equipment directly on our
developments. We are collaborating at
a local level with councils and
lobbying at a national level to push for
the speedier introduction of effective
solutions and schemes to unlock these
delayed developments.
Water neutrality
Increased demand for water in an area
can affect designated wildlife sites and
their species. In Sussex, the rare little
Ramshorn Whirlpool Snail is in decline,
with local water abstraction thought to
be one of the causes. As a result, all
new developments in the Sussex
North Water Supply Zone must now
show that they are water neutral. This
means that the predicted increase in
water demand due to the development
should be offset by reducing demand
in the existing community. Our homes
are already industry-leading in terms
of water efficiency and we are now
reviewing our specifications to see if
we can generate further water savings.
1 State-of-Nature-2019-UK-full-report.pdf (nbn.org.uk)
2 We know that on-site gains of 10% using the Defra metric 3.1 will not always be possible due to site constraints and other requirements, and that a well-considered
offsetting strategy can deliver important biodiversity objectives. We are currently learning from our experience of BNG across a number of different development types
and local authorities, which will inform our future approach.
We have started to measure
biodiversity on every new land
purchase this year. This is helping us
to understand how BNG will affect our
land buying strategy and how our
processes and designs may need to
change to deliver high-quality BNG
on-site.
We are also looking at how and when
we may need to deliver biodiversity
off-site, known as offsetting. This
could mean improving biodiversity on
land near the development or
purchasing biodiversity units to fund
projects in the wider local authority
area. The BNG offset market is in its
early days and we need to know how
we will deliver these offsets in a
strategically meaningful way, while
satisfying ourselves that long-term
management of these areas will be
effective and in line with our and
stakeholder expectations.
In addition, we are upskilling our
teams on BNG. This year we put in
place new land, planning and technical
policies and procedures, developed a
BNG toolkit for teams, produced
supporting information for customers
and developed in-house training for
our teams. Over the next 12 months,
these will be embeded into our
everyday practices across our
business.
We will continue to engage with
ecologists and landscape designers to
ensure BNG and the requirements of
our Nature for People strategy are fully
incorporated into new designs. We will
also engage with management
companies and develop a framework
of trusted partners, to deliver a
high-quality and lasting legacy for
nature and people.
which will show the meadow from its
first sowing, how it’s maintained and
how it will look throughout the year. As
well as demonstrating the meadow’s
benefits to people and nature, the film
will help us to share best practice
internally and with other organisations.
BIODIVERSITY NET GAIN
The most recent State of Nature
1
report shows that since the 1970s 41%
of all UK species surveyed have
declined, while 15% of species within
the UK are said to be threatened with
extinction. To reverse this trend, the
Environment Bill (2020) will see new
legislation on Biodiversity Net Gain
(BNG) come into force in November
2023.
BNG is a way to measure the increase
in biodiversity we are able to generate
through our developments. BNG
presents opportunities for us and the
sector to help reverse the decline of
nature in the UK and to bring nature
into the heart of the places where
people live and work. This ties in with
our placemaking agenda and our aim
to create thriving communities.
While there is still some uncertainty
about the final detail of the legislation,
we understand the direction of travel
and support the concept and the
overall approach. We have spent the
past year preparing for the
introduction of the legislation,
putting in place the approach
described below.
Our approach to BNG
We have set a new target: to
demonstrate a minimum 10% net gain
for biodiversity on every new planning
application by November 2023. Our
aim is to prioritise delivery of these
gains on site to bring nature onto our
developments, improve climate
resilience and benefit local people
2
.
10%
Net gain target for biodiversity
increase on every new planning
application by November 2023
Discover more about our
approach to water
READ MORE P47
Meadows can take a few
years to establish and may
have patches of bare ground
to start with.
Over the years,
grasses and flowers
will establish
naturally and provide
goodhabitat for
wildlife.
The weather can have a big
impact too – very wet or dry
years can impact how the
meadow looks. Evensome of
the best meadows can appear
less impressive in some years.
CREATING A
MEADOW
Castle Fields,
Barton Seagrave, Northamptonshire
Creating Meadows
Nature is under
pressure. Many
species, including
mammals, birds and
insects are in
decline.
Areas of longer
grass and meadows
on new
developments are
important habitats
for all kinds of
wildlife.
An extract from our new
meadows signage
S
P
R
I
N
G
W
I
N
T
E
R
S
U
M
M
E
R
A
U
T
U
M
N
A
MEADOW
THROUGH
THE
YEAR
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In this section
A Better Way To Build Responsibly 50
Health, Safety & Environment (HS&E) 52
Our Commitment to Build Quality 54
Putting Our Customers First 58
Addressing Climate Change 60
Our Net-Zero Carbon Roadmap 62
Carbon Reduction 64
Environment, Water & Waste 70
Product Innovation: Staying Ahead of the Curve 72
Partnering with our Supply Chain 74
Introduction from Tim Stone,
Regional Chief Executive
“Building Responsibly” encapsulates our
commitments to working safely and considerately,
putting our customers first and managing our
resources, including minimising our environmental
impact. We look to continuously improve our
HS&E performance, with the aim of striving for the
highest standards.
Managing risks associated with building homes is
fundamental to the way we work. We have a duty to
protect people and the environment, which goes beyond
meeting our legal obligations. Our stakeholders also saw
this as one of their top priorities in this year’s materiality
assessment.
We put customers at the centre of everything we do. We
focus on build quality, so we can handover new homes
that are defect free. We’re developing technology to give
our customers an even better experience, helping us
to listen and respond to them more quickly, keep them
informed and support them from when they first consider
one of our homes to after they’ve moved in.
Effectively managing our resources means we look to
create homes of enduring quality, while minimising our
environmental impacts and ensuring value for money.
We recognise that climate change is one of the greatest
challenges society faces, so we have developed our
roadmap for achieving Net Zero and set near-term
science-based targets for reducing emissions. We are
engaging with our supply chain on these issues, so we
can work together to minimise the carbon footprint of
our homes.
A BET TER
WAY TO BUILD
RESPONSIBLY
Building Responsibly highlights
4th
Consecutive year in which accidents
resulting in injuries have declined
Near Term
science-based
targets set *
94.5%
HBF survey 8 week recommend
TIM STONE
Regional Chief Executive
Managing risks associated with
building homes is fundamental
to the way we work.
WE LOOK TO
CONTINUOUSLY
IMPROVE
OUR HS&E
PERFORMANCE.
Tim Stone
Regional Chief Executive
* submitted to SBTi for validation
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HEALTH, SAFETY &
ENVIRONMENT (HS&E)
HS&E PERFORMANCE
We’re pleased to say that we have
again improved our H&S performance,
recording the fourth consecutive year
in which accidents resulting in injuries
have declined. Our AIIR is also lower
at 365 (2021: 441), which is in line with
our target of a 10% year-on-year
reduction.
Our Group HS&E department carries
out assurance inspections across our
divisions to ensure we are complying
with our HS&E standards. This year we
introduced a new target for every
division to achieve an average
assurance inspection benchmark of
85% of the total score for all
developments inspected in the period.
The vast majority of our divisions
achieved or exceeded the 85%
benchmark. For the small number of
divisions that didn’t achieve the
benchmark, we have put in place
improvement plans, led by the
division’s Managing Director, which
identify areas of improvement and the
actions needed.
In FY23, we will increase the
benchmark from 85% to 87%, as part of
our commitment to continuous
improvement.
OUR REFRESHED HS&E STRATEGY
This year we launched a new HS&E
strategy, based on two objectives:
Being Safe by Design and Operating
Responsibly. We made sure the new
EMBEDDING HEALTH, SAFETY &
ENVIRONMENTAL ACTIVITIES IN
THE BUSINESS
Reviewing and continuously
improving our HS&E Management
System
As part of our continuous
improvement, we have reviewed the
HS&E Management System and
updated our management and
operating procedures. This will help to
ensure that our working practices are
safe, that they support the prevention
of harm to our people or the
environment, and that they reduce the
potential number of accidents or
incidents and the direct costs
associated with any that do happen.
Quarterly focus topics
In the second quarter of the financial
year, we introduced quarterly HS&E
focus topics. These support key areas
of HS&E, by promoting safe and
efficient working practices and
strategy was well communicated
across the business, including
educational sessions for all heads
of department.
Importantly, our HS&E strategy takes a
holistic approach to the work we do. It
covers every aspect of our
reminding everyone of the importance
of operating safely. Topics introduced
this year included health and
wellbeing in construction, scaffolding
design and PPE.
We also recognise our developments’
compliance with HS&E standards and
reward those that have excelled in
applying our policies and procedures
through our HS&E awards.
Ensuring accurate data on our
developments
We launched our Red Site Sign In app
in 2020. In FY22, we released an
updated version, with every
development having a dedicated iPad
for signing in. The app ensures we can
efficiently and accurately collect data
on the number of people working on
our sites, which significantly helps with
HS&E priorities such as having a live
site register and information for
accident reporting.
Continuous improvement in FY23
In FY23, we will continue to enhance
the way we manage HS&E, including
further improvements to our HS&E
Management System. Our initiatives
will include expanding unannounced
drug and alcohol testing, to ensure
that people’s ability to work safely is
not affected by these substances, and
a review of our induction process,
starting with the supervisors’
induction, which will reinforce the
importance of HS&E matters from the
start of someone taking up their role.
DESCRIPTION
FY22 FY21
Number of notifiable accidents under RIDDOR 24 30
Annual Injury Incidence Rate (AIIR) 365 441
developments, from how we create
healthier, safer and more
environmentally responsible
communities, to ensuring that our
designs are safe to build, to the
positive HS&E behaviours we want to
see from all our employees and
subcontractors.
HS&E isn’t just about preventing accidents,
it’s about creating an environment for success.
We look to continuously improve our HS&E
performance with the aim of achieving the highest
standards in line with our ambitions.
Zero
Fatalities during FY22
4th
Consecutive year in which
accidents resulting in injuries
have declined
Discover more about
how we manage our
environment on-site risks
READ MORE P104
OBJECTIVES
GROUP HEALTH, SAFETY & ENVIRONMENTAL STRATEGY
Safe by Design
• Safe to build
• Safe to maintain
• Minimising our environmental impact
• Consideration of
HS&E issues during
the design of house
types and layout of
developments
• Managing our
resources
efficiently during
the design of house
types and layout
of developments
• HS&E compliant
products used by all
• Creating healthier,
safer and
environmental
responsible
communities
• Ensuring we have proactive leadership,
competence and adequate resources for
HS&E across the business
• Raising awareness through monitoring,
analysis and communication of HS&E
performance across the business
• Improving the Planning/Managing/
Monitoring and Co-ordination between all
stakeholders in relation to HS&E issues
across the business
• Positive HS&E
behaviours
• Clear HS&E
expectations
set, understood and
met by all engaged
with our work
activities
• Utilisation of known
HS&E best practices
• Injury and harm free
workforce &
workplaces
• Valued people
• Regular feedback with all personnel that
support and influence the continuous
improvement of both our HS&E culture and
HS&E performance across the business
• Utilise our ‘four strategic elements’
Governance/Leadership/Ownership/
Workplaces to support this strategy
• Working safely and considerately
• Preventing accident & incidents
• Managing our resources efficiently
Operating Responsibly
DELIVERABLES
PRINCIPLES
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OUR COMMITMENT
TO BUILD QUALITY
TARGETING ZERO DEFECTS
Our zero defects target is a way of
measuring how many of our homes
are handed over to the customer with
issues that we have identified but
not yet fixed. Our target is 100%. For
FY22, our performance was 90%. This
was down on the 95% recorded in the
previous year, which was the first year
in which we captured this data.
One factor behind the increase in
defects is that we are continuing to
improve data collection. We are
capturing more data about defects that
emerge through the build process, as
opposed to being informed of them by
customers after they have moved in.
The work we are doing to enhance
build quality, such as making more use
of technology as described on page
56, will also help us to reduce the
overall defect rate. In addition, long
lead times in the supply chain for
certain specification items, has meant
delays in providing high quality
NHBC PRIDE IN THE JOB AWARDS
The NHBC Pride in the Job Awards
recognise excellence in on-site
management. From 8,000 eligible site
managers nationwide, 443 were
awarded a first-round quality award in
2022. We’re delighted that 24 of those
were Redrow site managers. It is
pleasing to see some of our site
managers appearing on the list again,
showing they are delivering
consistently, as well as younger site
managers coming through, with the
support and training initiatives we
provide to them.
replacement materials where we have
identified defects before customers
move in. Our strong relationships with
our suppliers is helping us to keep
these delays to a minimum.
NHBC CONSTRUCTION QUALITY
REVIEW (CQR) AND REPORTABLE
ITEMS (RI)
We use the NHBC CQRs as an
opportunity to dig deeper into the root
causes of both good and poorer
quality on developments. Each stage
of the build process that is inspected
during the CQR is scored and we also
receive a percentage rating. These
demonstrate how many of the build
stages were scored from four (good) to
six (outstanding).
Our targets are to achieve an average
score of 4.5 and for 80% of our build
stages to be rated good to
outstanding. In FY22, the NHBC
undertook 183 CQRs (FY21: 74) and our
average score was just shy of our
target at 4.44, but was up compared
with 4.36 in the previous year. We
exceeded our 80% target, with 84% of
our build stages rated good to
outstanding. To push Group wide
improvements, our target for FY23 is
increasing to 82%.
The NHBC records RIs when it notes
any time we have failed to meet its
technical standards or Building
Regulations. For FY22, our RI score
Our 24 winners will be presented
with their awards at ceremonies later
this year. They will then continue to
the next stages of the competition,
with the opportunity to secure a
seal of excellence, a regional or
national award.
Of our first-round quality award
winners in 2021, eight went on to be
awarded a seal of excellence, up from
four in the previous year, with Craig
Thomas from South Wales winning a
coveted regional award.
was 0.17. This was an improvement on
our FY21 performance of 0.22 and
slightly above our target of 0.15.
From April 2022, the NHBC has
introduced a common scoring system
for RIs on all visits, using the same one
to six scale as CQRs. This is only being
recorded locally at the moment but will
be available to us through the NHBC
portal in FY23. We will use that data to
continue to drive build quality
improvements in the business.
CONSIDERATE CONSTRUCTORS
SCHEME (CCS)
A key part of building responsibly is
ensuring that we manage our
developments in a way that helps build
relationships with the local community
and respects the local environment,
as we strive to promote and achieve
best practice.
“To be voted as the number one
site manager in your region by the
NHBC is something that all site
managers dream of. To win an award
of this stature takes leadership and
teamwork of the highest quality.
The support I had from my Redrow
team and the wider team of external
contractors was second to none in
helping me win this award.”
Craig Thomas
Site Manager
The CCS is an independent
organisation that aims to raise
standards in the construction industry.
As a partner of the CCS, we register
all of our developments under the
scheme and the CCS regularly
monitors to check if our sites are
meeting its Code of Considerate
Practice.
In FY22, the CCS scored sites out of
50 and our target score was 38. Our
actual score was 38.43, based on 207
Craig Thomas, NHBC
Pride in the Job
Regional Winner
(Wales) 2021
We identified build quality as one of our most material issues in
this year’s assessment as outlined on page 59. As we want our
customers to be delighted with every aspect of the homes and
service we offer, we put quality at the heart of everything we do.
We aim to hand over every home 100% defect free. However, if this
doesn’t happen, we look to resolve defects as quickly as possible
and to the highest standard.
0.17
Average RIs from NHBC
38.43
CCS Score for FY22
monitoring visits, an improvement from
36.67 from 207 visits in FY21.
For FY23, the CCS has amended its
scoring system and our target will be
33 out of 45, which is directly
comparable to our target under the
previous system. We have also added
the CCS target to FY23’s bonus
scheme for our construction teams,
with a monetary payment for winning a
CCS award. This will recognise those
colleagues who go the extra mile.
NHBC Pride in the Job Seal of Excellence winners
Left to Right: Huw Thomas, Nick Powell, Matthew Coyle,
Adrian Stone, Craig Thomas and Edward Piggford
Discover more about
our supply chain.
READ MORE
P74 TO P77
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Operating review continued
TECHNOLOGY SUPPORTING
BUILD QUALITY
Our site managers’ onsite inspections
are an important part of ensuring we
build to high standards. At the end of
the financial year, 96.24% of the
required inspections had been
undertaken at the correct time,
equating to 41,692 individual
inspections (FY21: over 37,000).
Our Red Site Management app is a
fully integrated part of our inspection
process. We have continued to
improve the app during the year based
on feedback we received from
colleagues, such as changing the
prompts the app gives them when
carrying out an inspection. This will
put us in a good position for the
introduction of the New Homes
Ombudsman Service (see page 59).
In FY23, the app will also be able to
record the progress we are making
building each home, helping us to
forecast our performance more
accurately and better support our
customers’ expectations when it
comes to customising their homes
through purchasing extras.
We have also made some changes to
the functions of our Inspection Portal,
which now makes it quicker and easier
for our teams to manage any issues we
have identified during our inspections.
In addition, we have piloted a new and
improved Subcontractor Portal, which
will be fully rolled out in FY23. This
gives our subcontractors a single
place to manage the issues we have
asked them to resolve, replacing the
old system of sending instructions by
email, and gives our teams greater
visibility of the status of each issue.
Creating a Great Working Environment for
Our Site Teams
Our construction sites have compounds for the people working
there to use. Historically, the compounds have consisted of a
series of portacabins, each with a different function, such as
offices, canteens and drying rooms.
We had not changed our compounds in several years and they had
become outdated, particularly compared with our recently
developed Customer Experience Suites. As part of Redrow 2025,
we committed to give our site colleagues the same high-quality
places to work. Our aim was to improve working conditions, reduce
energy use and carbon emissions, and encourage collaborative
working. To ensure consistency, standardising our compounds was
also important.
The new compounds include open plan space for
collaboration and a dedicated learning hub, as well as a
place for prayer or reflection. Improved welfare facilities
include a spacious canteen, accessible toilets and
separate gender toilets, efficient drying rooms and
showers. The building is much more energy efficient, with
a B+ rating compared with the previous D rating. To power
the compound, we are encouraging the use of solar panels
or hybrid generators. Other energy efficiency measures
include PIR lighting, thermostatically controlled heaters
and instant boiling water taps. Rainwater harvesting helps
to reduce the use of mains water.
We already have five of the new compounds in use. Every
division will have at least one, so we can gather feedback
on the benefits and costs, and establish a full rollout plan.
So far, the feedback we’ve received has been nothing
but positive.
“Having a professional, modern, clean and sharp office
and welfare set up sets a precedent for the rest of
the site. The first impressions for contractors entering
the compound shows that we care about their welfare
and provide them with far superior facilities. The fibre
internet connection allows colleagues to comfortably
work from the site all day, rather than driving back to
the office to continue working. I think this is the way
forward in terms of the standard set up.”
Peter Hamon
Site Manager, Eagle Gate, West Midlands
38.43
CCS Score
Discover more about how
we are preparing for the
New Homes Ombudsman
READ MORE P59
THE REDROW 2025 INITIATIVE
Agile working is a key commitment
under Redrow 2025.
STRATEGY IN ACTION
READ MORE P82
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Operating review continued
PUTTING OUR
CUSTOMERS
FIRST
Last year, we replaced the traditional
on-site sales outlets with Customer
Experience Suites, to transform how
we interact with customers, right from
their first visit and all the way through
to post-completion. These include
digital screens throughout, which we
can use to welcome customers
individually and update remotely to
ensure our messages are consistent.
There are also interactive site plans
and iPads for customers to view their
choices, make upgrades and complete
their reservations, and dedicated
spaces for customers to meet their
sales contacts.
Another way we have improved the
customer experience is by recording
personalised videos for customers.
These range from welcome videos
from our sales consultants to
colleagues on our developments
doing ‘walk arounds’ of the customer’s
new home, before the plaster goes on.
These videos help customers to feel
valued and engaged in the process
and keep them up to date with our
progress on their home. Again, we
believe that creating these videos at
scale is unique in the industry.
The My Redrow portal allows our
customers to reserve their home
online and personalise it to suit their
needs. They can choose from a wide
range of options, many of which have
zero cost, as well as choosing
upgrades such as bespoke flooring.
We have expanded the range,
reintroducing conservatories, fitted
home offices and garden pods among
others. This has contributed to a
record sales performance for these
customer extras during the year.
This year, we have extended our use
of the Suites by employing them as
sales hubs, where customers can
explore every location we have across
England and Wales, including real-time
availability and pricing information for
each home. This also allows us to use
a single Suite to sell homes across
several nearby sites. Customers
benefit from not having to visit multiple
sites to select a home and we don’t
need a Customer Experience Suite
and show homes at each one, resulting
in efficiency savings and sustainability
benefits. We believe this capability is
unique among volume housebuilders,
and it is enabled by our high use
of standard house types in the
Heritage range.
TREATING CUSTOMERS FAIRLY
Our approach to supporting our
customers will stand us in good stead
with the forthcoming introduction of
the New Homes Ombudsman (NHO),
which is being established by the New
Homes Quality Board (NHQB). The
NHQB was formed in 2021 to promote
improvements to the build quality of
new homes and the customer service
provided by developers. The NHO,
which is likely to start work in October
2022, will provide independent
redress for new build buyers who have
issues with their home or developer,
and which the developer has not dealt
with to their satisfaction. We support
the introduction of the NHO and
believe it will raise standards across
the sector and improve its reputation
with customers as a result.
The new regime will emphasise the
concept of treating customers fairly,
rather than relying on technical
specifications to determine what’s
covered by a warranty. A new
consumer code will also be
introduced, which will cover how we
sell to customers and the clear and
transparent information we need to
give them.
We already had a robust approach to
responsible marketing and building
trust with our customers, and we’ve
analysed the new code, made changes
in readiness and trained our teams to
ensure we meet the code’s
requirements.
When customers do have complaints,
it is important that they can report
them easily and receive a quick
response. This year we launched a
new online complaints process for our
customers. Customers will be able to
track progress with their complaints
and we will have the data to ensure we
are responding in a timely way. This
system will also help us to identify the
root causes of complaints, leading to
better build quality and customer
service.
We support customers once they have
moved in through our Homeowner
Support Portal with access to high
quality, easy to follow self-help videos
and articles. This allows them to
quickly troubleshoot common issues
themselves, get the best from their
home and reduce the need to submit
an issue to us, which is better for them
and for our business.
Where customers do report an issue,
more than 90% now use the portal to
do so. Customers can submit photos
or videos and track progress with their
issue online, with all the related
messages in one place, leading to a
better customer experience. The
process also increases our efficiency.
It gives us a single channel for
customers to use and there’s less
administration. It’s fully integrated into
our systems, so we can easily allocate
an issue to a contractor and they can
tell us electronically when it’s fixed.
Sales Hub, Hackwood
Grange, Derbyshire
Customers at
Woodborough
Grange, Winscombe,
Somerset
94.5%
HBF Survey 8 week recommend
THE REDROW SALES HUBS
The sales hubs are part of our
Redrow 2025 approach to
innovation, embracing technology
to improve the customer
experience and operational
efficiency.
We have opened hubs in
Derbyshire, Medway and Essex,
and plan further openings in the
first half of FY23.
Garden Pod, Ash Holt at
Newton Garden Village,
Nottinghamshire
We want our customers to have the best possible
experience, every time they interact with us.
To that end, we are continuing to develop our
customer experiences.
View our 5 star HBF award
and other award highlights
READ MORE P1
Based on over 4,433 reviews
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ADDRESSING
CLIMATE CHANGE
OUR JOURNEY
TO NET ZERO
OUR CLIMATE VISION – WHAT WE ASPIRE TO
In September 2021 we set out our climate vision at our annual Leadership Conference.
During the year with the support of
global climate consultancy, the Carbon
Trust, the Executive board approved
our near-term targets and these have
been submitted to the Science Based
Targets initiative (SBTi) for approval
and verification.
From FY23 Board-level remuneration
will be linked to year-on-year
reductions in our greenhouse gas
emissions, in line with our targets.
Our Near-Term Science-Based
Targets for Scopes 1, 2, and 3 from
our FY21 baseline year
• Reduce our absolute Scope 1 and 2
GHG emissions by 42% by FY30,
from our FY21 base year. This target
is aligned to the SBTi’s standard and
recommended pathway of 1.5°C.
• Reduce our absolute Scope 3 GHG
emissions by 25% by FY30 from our
2021 base year. This target is
aligned to the SBTi’s standard and
recommended pathway of a well-
below 2°C temperature increase.
We are currently one of only 577
2
UK
companies taking action. Once our
targets are validated by the SBTi we
will join the other 248
3
UK companies
with approved targets. Targets are
considered science-based if they are
in line with the latest climate science
deemed necessary to meet the goals
of the Paris Agreement. Setting a
science-based target provides us with
a clear and credible goal, a catalyst for
action to future-proof our business
growth whilst responding to the
Government’s Net Zero Carbon
commitment, prepare us for upcoming
regulatory changes and minimise the
impacts of a changing climate.
Responding to the climate crisis is our highest environmental priority
and our primary focus is to decarbonise our business across the
whole value chain. At the same time, we also need to adapt to the
changing climate and our strategy is designed to do both.
In August 2021, we announced our Net Zero Carbon commitment
– to reach science based net zero emissions no later than 2050, and
to set interim science-based targets for Scopes 1, 2 and 3.
Climate change will affect our
business through both physical
impacts such as increased flooding
and extreme temperatures, as well as
the risks of transitioning to a low-
carbon economy, such as regulatory
changes and shifting consumer
demand. Our understanding of
climate-related risks and opportunities
is continuously evolving, as is the way
we respond to and manage them. We
discuss this further in the Taskforce for
Climate-related Financial Disclosures
(TCFD) section on pages 112 to 125.
On the following pages we discuss
the progress we have made in
reducing our operational carbon
footprint, setting science-based
targets and developing our carbon
roadmap to 2030.
Deliver beautifully landscaped and biodiverse developments, which play a role in absorbing carbon, provide a
cooling effect and support people’s wellbeing and nature’s recovery.
Electric company
car fleet
HVO fuel to reduce
diesel emissions
Renewable electricity
procurement for sites
and offices
Site lighting and heating
improvements with new
modular compound
Installation of PV panels
across offices
Diesel emissions reduction
– early connection to the grid
Diesel emissions reduction –
reduce time machinery is idle
Switch to
solar generation
CARBON REDUCTION INITIATIVES
SCOPE 1 AND 2
score
B-
Our Carbon Disclosure Project
(CDP) score. Score for 2022
is not published at time of
publication.
2. As at July 2022
3. As at July 2022
Eliminate carbon from all
our business operations.
Deliver attractive
zero-carbon homes and
communities, which
people aspire to buy
over the competition.
Buy products and
materials which have
low or no embodied
carbon.
Keep all our employees and
subcontractors safe from any
harmful impacts associated
with climate change while
at work.
Design and build homes
and communities that are
comfortable and resilient in
the face of a changing climate.
Source products and
materials at least risk from
climate disruption.
REDUCE
CARBON
EMISSIONS
ADAPT TO A
CHANGING AND
UNPREDICTABLE
CLIMATE
We are working on a
number of initiatives to
deliver our near term net
zero carbon targets
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62
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63
OUR NET-ZERO
CARBON ROADMAP
1.13m
tonnes CO
2
e
11,417 tonnes CO
2
e
4,682 tonnes CO
2
e*
FY21
Baseline
Net Zero
1.45m
*
tonnes CO
2
e
Absolute Scope 3
Reduction = 25%
Absolute reduction
(all Scopes = 25.2%)
Business as usual
Scope 3
Scope 2
Scope 1
FY50
Scope 1&2: 42% Reduction
1,097,340 tonnes CO
2
e
FY22 FY24 FY26 FY28 FY30
Our target to achieve
science-based Net
Zero Carbon no later
than 2050 will be
set in FY23 and
submitted to the SBTi
for validation.
Scope 3: This trajectory is aligned to the SBTi’s standard and
recommended pathway of well-below 2°C
Scope 1 & 2: This trajectory is aligned to the SBTi’s standard and recommended pathway of 1.5°C
* This figure was derived from modelling undertaken by the Carbon Trust which assumes a 3% growth in 100m
2
build year-on-year until FY30.
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REDUCING OUR SCOPE 1 AND 2* EMISSIONS
In FY22 we have reduced our absolute emissions for Scope 1
and 2 by a further 17%. Our normalised emissions for Scope 1
and 2 have reduced by 24%, down from 2.84 tCO
2
e per 100m
2
of build to 2.16.
These reductions mean we have exceeded our 10% carbon
intensity reduction target (from across our construction
operations and offices), by 2022, achieving an overall
reduction of 14% from a 2017 baseline.
CARBON
REDUCTION
* Scope 1: Gas used in our offices and sites, company car fleet fuel use, air conditioning equipment, site diesel and LPG.
Scope 2: Electricity and heat used in our offices and sites
ABSOLUTE
EMISSIONS
(TCO
2
E)
2020
Mains Gas – Offices 306 tco
2
e
Mains Gas – Sites and Plots 3,242 tco
2
e
LPG – Sites 386 tco
2
e
Diesel – Sites 7,353 tco
2
e
Business Travel 951 tco
2
e
Air Conditioning 12 tco
2
e
Electricity – Offices 442 tco
2
e
Electricity – Sites and Plots 2,782 tco
2
e
Heat – Sites and Plots 30 tco
2
e
Total tCO
2
e location based 15,504
ABSOLUTE
EMISSIONS
(TCO
2
E)
2022
Mains Gas – Offices 162 tco
2
e
Mains Gas – Sites and Plots 2,477 tco
2
e
LPG – Sites 275 tco
2
e
Diesel – Sites 5,830 tco
2
e
Business Travel 803 tco
2
e
Air Conditioning 11 tco
2
e
Electricity – Offices 312 tco
2
e
Electricity – Sites and Plots 2,196 tco
2
e
Heat – Sites and Plots 83 tco
2
e
Total tCO
2
e location based 12,149
ABSOLUTE
EMISSIONS
(TCO
2
E)
2021
Mains Gas – Offices 214 tco
2
e
Mains Gas – Sites and Plots 3,622 tco
2
e
LPG – Sites 278 tco
2
e
Diesel – Sites 6,349 tco
2
e
Business Travel 943 tco
2
e
Air Conditioning 11 tco
2
e
Electricity – Offices 340 tco
2
e
Electricity – Sites and Plots 2,891 tco
2
e
Heat – Sites and Plots 32 tco
2
e
Total tCO
2
e location based 14,680
During the year we have achieved a
reduction in absolute emissions across
many of our direct (Scope 1) and
indirect (Scope 2) activities:
ACTIVITY
REDUCTION
IN EMISSIONS
(TCO
2
E) I N
TH E L A S T
YEAR
Site Gas
32%
Site Electricity
24%
Office Gas
24%
Business Travel
15%
Office Electricity
8%
Site Diesel
8%
Site LPG
1%
More efficient use of fuel on-site
Compared to FY21, we have seen an
8% reduction in the use of diesel
(litres) on our construction sites whilst
legal completions were 1.7% higher.
This has resulted from more efficient
use of machinery on-site and securing
earlier connections to the grid.
At the same time, the carbon
emissions from fuel used on our sites
has also reduced by 8%. This is largely
due to diesel being replaced by
hydrotreated vegetable oil (HVO- a
biodegradable non-toxic fuel that is
produced from vegetable fats and oils)
on some of our sites. By using 97,102
litres of HVO we saved 264 tonnes* of
CO
2
e that would otherwise have been
emitted into the atmosphere. Currently
we are experiencing supply
constraints which make it difficult for
us to switch to HVO on all our sites.
We will continue to monitor options
for securing a stable source of HVO in
the UK.
Significant emissions reductions
from gas
During the year office gas use (kWh)
reduced by 24%. This comes as a
result of our hybrid working policy for
our office-based employees and a
shorter, milder winter.
At the same time, gas use from our
construction sites reduced by 31%.
Looking at the raw data this reduction
is almost entirely due to a reduction in
plot consumption (approximately 3.5m
kWh less in FY22 compared to FY21).
Resulting in a 35% reduction in the
average length of time between the
meter being installed and it being
handed over to a customer. The
reduction can also be attributed a
reduction in the number of energy
centres, from 5 to 2, and the milder,
shorter winter.
Significant emissions reductions
from site electricity
During the year electricity use (kWh)
on our construction sites reduced by
17%. This is as a result of two key
changes; a large development with
significant consumption is no longer in
use and a 29% reduction in the
average length of time between the
meter being installed and it being
handed over to a customer. We have
also seen a 5% reduction in the
average daily plot usage.
Increase in emissions from heat
In FY22, heat consumption (kWh) from
energy centres saw an increase of
159%. This is primarily due to a 140%
increase in the number of plots using
We have started to use HVO as a
replacement for diesel on selected sites
* Emissions from HVO during FY22: 3.455 tCO
2
e based on the use of 97,102 litres. If these litres were diesel, this would equal to 267.862 tCO
2
e (the calculations of
emissions are using the 2022 DEFRA conversion factors).
HVO 3 tco
2
e
Outside of Scopes
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With product related emissions
3
accounting for 38% of our total Scope
3 emissions, achieving our near-term
carbon reduction target will require a
transformation across key elements of
the supply-chain, with a step change
in innovation and increased availability
of low-carbon products. This demands
a change in the way the materials and
products we buy are designed,
manufactured and distributed, and
their raw-material composition.
During the year, we undertook a
Net-Zero Carbon survey with suppliers
to establish their understanding,
commitment and levels of activity to
decarbonise their own operations and
the products they produce. More
information can be found in the
Partnering with our Supply Chain
section on pages 74 to 77.
Key steps to achieve our near-term
Scope 3 target:
• Implement the Future Homes
Standard, achieving a 75-80%
reduction in carbon emissions
arising from our homes compared
with previous Building Regulations
(see Product Innovation on page 72).
• Challenge suppliers to publish
Environmental Product Declarations
(EPD) for their products, in line with
recognised standards, and continue
to build-up our database of EPD’s.
• Engage with the Construction
Products Association and their
members in energy-intensive
industries such as cement, glazing
and ceramics.
• Encourage our suppliers to set their
own science-based targets and to
report progress against them.
• Review the mechanisms within our
supply contracts to drive progress.
This will include embedding
carbon-related clauses.
• Improve the accuracy of our
procurement data, to give greater
visibility on quantities and carbon
emissions.
• Continue collaboration with the
industry through the Supply Chain
Sustainability School and the Future
Homes Hub.
heat meters and an increase in daily
average heat usage.
Switching to renewable energy
Renewable energy is an important part
of our carbon reduction strategy and
this year 96% (up from 3.3% in FY21) of
our operational electricity was sourced
from renewable sources, backed by
Renewable Energy Guarantees of
Origin (REGO) certificates.
In 2023, we will be installing solar
photovoltaic panels on our head office
building and we are exploring the
viability of installing these at all our
other offices.
Greener travel options
We have made steady progress on our
commitment to reducing the carbon
impact from our company car fleet by
continuing to reduce the availability of
petrol and diesel cars.
Employees are increasingly opting for
vehicles with a lower environmental
impact – 90% of company cars
ordered during the year were either
Hybrid or Pure Electric. The current
car choice is now 88% Pure EV, with
options in all of our grades, and 12%
Hybrid. To support this change we
have installed charging stations at
nearly all of our divisional offices and
enabled our employees to access
preferential rates for installation of
home chargers.
We have set a target to reach an
all-electric car fleet by the end of
FY25. To achieve this, there will only
be electric vehicles available to select
by 2023.
TACKLING OUR SCOPE 3
1
INDIRECT EMISSIONS
We have taken a significant step this
year in establishing a baseline for our
indirect Scope 3 emissions. These are
emissions that we don’t have direct
control over but which occur in our
value chain, and they account for
nearly 99% of our total carbon
footprint
2
. The chart opposite gives
a breakdown.
We have set a new target to purchase
100% of all our operational electricity
from REGO certified renewables
sources by the end of FY24.
Scope 3 emissions by category
100%
Our target is to reach an all electric
car fleet by the end of FY25
Cat. 11a Use of sold
products (direct)
46%
Cat. 1a Purchased
goods and services
(product related)
38%
Cat 1b Purchased goods
and services (non-product
related)
9%
Cat 4 Upstream
transportation and
distribution (5%)
5%
non-material categories*
2%
SCOPE 3 EMISSIONS
BY CATEGORY
2022
Solar Generators at Amber Fields
We ran a pilot project with Think Hire to assess the
benefits of a solar generator at our Amber Fields
development.
The solar generator combines solar power and storage
with a diesel power backup. During the day, the energy
generated by the solar panels is stored in a battery pack
and the standby generator only runs when the batteries
are flat.
The study concluded that we could reduce diesel use by
70%, and cut noise pollution by nearly half.
STRATEGY IN ACTION
1 Scope 3: This covers emissions from purchased goods and services, capital goods, fuel and energy related activities, upstream transport and distribution, waste
generated in operations, employee commuting, business travel, use of sold products, end-of-life treatment of sold products.
2 We used Group spend data to calculate our baseline carbon footprint.
3 This is purchased goods and services product related as described in the chart – Scope 3 emissions by category.
* Includes: capital goods, fuel and energy
related activities, waste generation,
business travel, employee commuting, end
of life treatment of sold products.Derived
from GHG protocol analysis of our Scope 3
emissions.
Working with our supply chain and
subcontractors to deliver our sustainability targets
Discover more about
partnering with our
supply chain
READ MORE
P74 TO P77
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OUR CARBON REDUCTION ROUTE MAP BY 2030
Near term carbon reduction targets have been aligned to the Science Based Target Initiative, Net Zero recognised and
standard pathways for Scope 1, 2 and 3 GHG emissions. 1.5°C for Scope 1 & 2 and well below 2°C for Scope 3.
Jun
2022
May
2022
Jul
2023
Jun
2024
Dec
2024
Jun
2025
Jun
2030
Review Scope
1, 2 & 3 reductions
Set and submit
2050 NZC Targets
100% Renewable energy
in Redrow Offices
Future Home
Standard Regulations
Implement 2050 NZC Plan
Submit near term
targets to SBTi
Submit near term
targets to SBTi
Supply Chain engagement
ASHP Trials commence
Further product trials
ASHP Trials Jan 22
100% completions to
Future Home Standard
Building Regulations:
Part L (2021)
Continuous review
and improvement
50% Supply chain set
1.5 SBTi Targets
70% Supply chain set
1.5 SBTi Targets
ESG / NZC Tool
25% build completions achieve
85% carbon reduction
100% Renewable energy on site
100% EV Fleet
Redrow Implement
HVO on site
Scope 3 Targets
to be agreed
Jun
2027
Key:
Key milestones: Red text
Scope 1 & 2: Purple text
Scope 3: Green text
Exploring alternative low carbon
options to reduce our carbon footprint
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ENVIRONMENT,
WATER AND WASTE
PREVENTING ENVIRONMENTAL
POLLUTION ON-SITE
Our ultimate aim is to ensure that no
pollution occurs from our construction
activities. During the year we have
focused on improving the way we
identify and manage site-specific
water-related risks, and in particular
how we effectively manage water
run-off.
We achieved a significant reduction in
the number of serious environmental
incidents during the year from 16 to 2,
a decrease of 87%. Following on from
both incidents, comprehensive
investigations took place and clear
lessons were identified and
implemented. These lessons were
shared across our business to ensure
these incidents are not repeated.
As part of the continual development
of ourmanagement system new
procedures, with strengthened control
measures, are being introduced along
with improvements to the way site-
specific risks are identified, placing
more emphasis on planning and site
set-up.
During the year we
strengthened our
team recruiting a
new Group
Environmental
Advisor and maintained our ISO14001
certification, which is independently
assessed by BSI.
Reducing water use
Our Heritage range of homes are
industry-leading in terms of water
efficiency with a rating of just 105 litres
per person per day (l/p/d), well below
the Building Regulations requirement
of 125 l/p/d. We achieve this with
highly efficient fixtures, water saving
baths and flow restrictors. We’re now
reviewing our specifications to see if
we can generate further water savings
whilst still meet customer's high
expectations on quality.
Our new efficient modular compounds,
which we are looking to roll out in
FY23, incorporate rainwater harvesting
to reduce the use of mains water on
our developments.
Reducing construction waste
In the last year we have reduced our
normalised waste tonnage by 2%, down
from 8.1 tonnes/100m
2
of build to 7.91.
These reductions mean that we have
far exceeded our target to reduce the
waste intensity of our construction
operations by 10% by 2022 from a
2017 baseline, achieving an overall
reduction of 26%.
We have continued to divert the vast
majority of our waste from landfill,
achieving a diversion rate of 98% in
the year.
Reducing construction waste helps
lower our environmental impact, while
creating cost savings and maintaining
the same level of quality. We are
seeing rising costs and delivery delays
for materials, so it is even more
important to make optimum use of
In addition to reducing our carbon emissions, we have a range of
other environmental objectives, including preventing pollution,
managing flood risks, cutting our water use, and reducing and
reusing waste.
what we buy. We segregate and crush
inert waste, including concrete and
rubble generated during demolition
and construction and reuse the
by-product for infrastructure works
on-site.
Our cross-department Buildability and
Waste Working Group is responsible
for identifying ways that we build more
efficiently and faster, while reducing
the waste we produce and maintaining
high-quality design and workmanship.
During the year, we introduced
changes to reduce storey heights by
We diverted 486 tonnes
of wood from our timber
waste stream which was
then processed through the
Community Wood Recycling
Scheme.
The scheme collects waste
wood to be reused or recycled,
with reuse being ten times more
efficient than harvesting, milling
and transporting virgin wood.
With every tonne of wood
collected, the scheme also
creates work and training
opportunities for disadvantaged
people.
Overall, the scheme reused 53%
of the wood in local community
building projects, 5% was turned
into firewood and 42% was
recycled into woodchip to
manufacture particleboard,
animal bedding or carbon
neutral fuel.
486
tonnes of wood processed
through the Community Wood
Recycling Scheme
one course of brickwork, which
reduces wasteful offcuts while still
having the highest floor to ceiling
heights in the industry which we know
customers love. We also designed out
complicated design features that
produce a lot of waste and don’t add
value to our homes. These include
changes made to understairs
cupboards, sloping ceilings,
wardrobes and stud walls.
We are collaborating with a specialist
consultancy to investigate the benefits
of Modern Methods of Construction
(MMC) to determine which elements of
our homes could be manufactured
off-site. Through this research, we are
seeking to quantify the cost-benefits
associated with increasing the speed
of build and reducing operational
energy, embodied carbon and waste
production. In recent months we have
calculated the current pre-
manufactured value of elements
including pre-built staircases and bay
windows for our typical house types.
The outcome will give us a baseline,
from which we can develop proposals
to increase the proportion of pre-
manufactured content in our houses.
We have also introduced a new range
of contemporary house types to
complement our existing Heritage
Collection homes, which have been
designed with off-site manufacture in
mind. The contemporary designs are
ideally suited to locations where
appropriate to include an element of
MMC or where design is influenced by
a regional planning design
requirement.
87%
Reduction in the number of
serious environmental incidents
during the year
1,400
Tonnes of waste concrete recycled
into driveways, paths and patios at
our Allerton Gardens development
in Liverpool.
26%
Overall reduction of waste
intensity of our construction
operations since 2017
Impact estimates are calculated based on the volume of wood collected and the total network social outcomes
during the year of collection.
Find out more at
www.communitywoodrecycling.org.uk
Working together to
9
save resources
9
change lives
In partnership with
July 2021 – June 2022
SOCIAL &
ENVIRONMENTAL
IMPACT REPORT
485.6
tonnes rescued from
the waste stream
258.2t
reused
24.4t
processed into
firewood
203t
recycled
242
tonnes saved
5.3
paid jobs
created
6.2
people
trained
STRATEGY
IN ACTION
CERTIFIED
667178
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PRODUCT INNOVATION:
STAYING AHEAD OF THE CURVE
ENERGY EFFICIENCY AND
REDUCING CARBON EMISSIONS
FROM OUR HOMES
We are rethinking how our homes are
heated and how we can reduce our
customers’ bills and their carbon
emissions. Analysis we undertook this
year shows customers are already
likely to see a 54% improvement in
energy efficiency moving to one of our
homes from an older property and this
figure will continue to improve as we
introduce new heating technology and
improve the fabric efficiency of our
homes.
The Future Homes Standard (FHS) will
come into force in 2025. It’s designed
Adopting technology such as air
source heat pumps would mean our
homes would become zero-carbon
ready. The Government believes that
homes built with electric heating
systems such as heat pumps will
become zero carbon over time, as the
electricity grid is decarbonised.
Heat networks and electric heating
may also play a part in low-carbon
heating for homes. We’re working with
suppliers in these areas to investigate
suitable alternatives to heat pumps, if
they’re needed.
TACKLING OVERHEATING
Recent heatwaves in the UK have
reinforced the importance of keeping
homes at comfortable temperatures in
to future-proof new build homes, by
ensuring they have low-carbon
heating and world-leading energy
efficiency, with carbon emissions at
least 75-80% lower than those being
built to the previous Building
Regulations standards.
At Great Milton Park we are working
on a research and development trial
with our supply partner, Mitsubishi
Electric, who has designed and
supplied us with an air source heat
pump to provide heating and hot
water for an Oxford house type. For
customers, the running cost of this
pump should be comparable to a
gas boiler.
hot weather. However, there is a direct
trade-off between making homes
more energy efficient and air tight, and
keeping them cool. The Government’s
latest review of the Building
Regulations identified overheating of
buildings as an increasing risk. To
future proof our homes for all our
customers we are undertaking
overheating risk assessments as part
of our design review. This will allow us
to maximise the benefits of natural
daylight and ventilation, while
minimising the risk of overheating to
ensure customers can live comfortably.
OFFERING CUSTOMERS
RENEWABLE ENERGY OPTIONS
We offer customers the opportunity to
upgrade their homes by adding solar
We are continuously looking to improve and innovate how our homes
are designed, to better meet our customers’ requirements and
aspirations. Continually developing our homes also enables us to
prepare to meet or exceed new government standards.
As part of our commitment to reduce
carbon emissions and understand in
much greater detail the customer
experience of using and living with
new forms of heating technology we
are reviewing the opportunity to
undertake further trails across the
group.
In the coming year, we are also
carrying out surveys and focus group
research with customers to better
understand what they want and expect
from new homes, specifically with
regards to energy efficiency and
the FHS. This research helps us to
further define our approach, focusing
on the key items that customers value
the most.
The homes we build to the new Future Homes
and Fabric Energy Efficiency standards could
be fitted with air source heat pumps, which
would provide customers with more energy
efficient homes that require less energy to
heat. We estimate this would also reduce the
CO
2
emissions from heating and hot water by
around 84% on average.
84%
average reduction
in CO
2
emissions
from heating and
hot water
THE FUTURE
HOMES STANDARD
Air Source Heat Pump at Great
Milton Park, Newport, Gwent
PV panels through MyRedrow, our
online sales system. This reduces the
customer's reliance on grid electricity
and reduces their utility bills. This
improves the home’s EPC rating, which
is a score relating to the cost of
energy needed to run a particular
home, while reducing CO
2
emissions.
The average EPC rating for our homes
is B, but the integration of solar PV can
improve this to an A rating.
B
Average EPC rating
In Spring 2022 we began an innovative trial at our Langley Grange development in Yorkshire.
We installed Wondrwall’s complete home automation, gas-free heating (including infrared heating
panels and intelligent hot water cylinder), solar PV and battery storage solutions in one of the homes.
This system is designed to turn any house into a sustainable, energy efficient home by using
artificial intelligence, machine learning and renewable energy. The intuitive system operates by
automatically controlling heating, lighting, security, safety and entertainment, with voice control
technology and a mobile phone app. The technology learns and works around occupants, observing
how they live, which rooms they spend the most time in and how they use heating and lighting.
Over a 12 month period we are collecting data on the home’s overall energy efficiency and thermal
performance and will evaluate its carbon footprint against one of our standard homes. It offers us
the chance to assess the viability of offering the technology to future home buyers.
This trial demonstrates our commitment to finding less carbon intensive solutions for heating and
hot water as part of our drive to cut carbon emissions and ensure that improvements to the
building fabric and the services in our homes provide the most effective way of reducing our
customers’ energy consumption and bills.
Research Into Smart, Low Carbon Homes
STRATEGY IN ACTION
The Hampstead, Chester, Windsor and Ledsham are four new
house types introduced to the Heritage Collection during the year
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PARTNERING WITH
OUR SUPPLY CHAIN
We have supply agreements with
around 250 suppliers nationally,
covering approximately 85% of our
total output. In addition, we continue
to work with and support local
suppliers and contractors.
A large number of our relationships
with supply partners extend beyond
ten years and some are in excess of
20 years. This is testimony to the value
we and our supply partners place on
having a relationship based on shared
values. These relationships paid off
during the Covid-related supply
issues. Against a backdrop of rising
material costs and supply constraints,
we have maintained a steady focus on
guaranteeing supply while upholding
our social and environmental
standards.
In the last 12 months, we have
continued to invest in upskilling our
workforce and supply chain on
sustainable procurement, through our
partnership with the
Supply Chain
Sustainability School.
Our work with our
supply chain has been
recognised with our
shortlisting for the Global
Good Award 2022, in the Sustainable
Supply Chain of the Year category.
This survey has helped us establish a
baseline for performance and
understanding across our supply
chain. As expected, there is significant
variation across the organisations and
the journey will be different for each
one.
MAINTAINING STRONG
SUPPLIER RELATIONS
Having a standard product range
enables us to forecast the products
and materials we’ll need, In turn this
allows us to give our supply chain the
detailed information of the materials
we will require so that they can
forecast effectively, to ensure we meet
our targets and they can secure and
manage supply. We issue three-
monthly forecasts, plot by plot. This
helps us to build trust and long-term
relationships with our partners.
“The most important element in a
supplier-customer relationship is
trust. When there’s trust, a supplier
can plan investments in capacity and
commit to innovation. The supplier
can then weather the economic roller
coaster that we have all endured in
recent years. My company Exallot
has a long-standing and valued
relationship with Redrow. We could
not have achieved the growth we’re
experiencing without Redrow working
in partnership with us. We have found
our trust to be well placed and look
forward to an ever-closer working
relationship.”
Paul Brownhill
Operations Director, Exallot Ltd
As a guide, we look to procure labour
and materials within a 50-mile radius
of each divisional office. Where we
have an agreement with a national
supplier, we identify local depots to
cut down on distribution costs and
reduce carbon emissions, and support
the local economy. For example, in
Yorkshire, where we use a lot of stone
in construction, we procure local
stone. We do this wherever we can.
While carrying out this survey, we’ve
made suppliers aware of our own
commitment to achieving Net Zero
Carbon, and what we’ll require from
them in the future, such as EPDs for all
materials and accurate emissions data.
Our aspiration is that every supplier
will have a robust carbon footprint
Our supply chain partners play a crucial role in helping us to
achieve our environmental, social and business objectives. They
directly influence the quality of our homes, our ability to complete
each home on-time for our customer, and our ability to innovate.
Timely supply at a predictable cost is also essential, to enable us to
meet our business and financial goals.
Last autumn, we reviewed our
Partnering with our Supply Chain
policy. As a result we strengthened
our commitments and expectations
regarding discrimination and human
rights. The policy is available from our
website: https://www.redrowplc.co.uk/
media/rkcnsovn/partnering-with-our-
supply-chain-policy.pdf.
We also improved our supply chain
payments performance (see ESG
scorecard page 16).
IMPROVING OUR
UNDERSTANDING OF
SUSTAINABILITY AND CARBON IN
OUR SUPPLY CHAIN
Our supply chain plays a vital role in
enabling us to meet our climate
change ambitions and decarbonisation
targets. During the year we sent out
questionnaires to 135 suppliers, to find
out more about the carbon content of
their products and their plans to
reduce carbon emissions. Nearly 80
suppliers responded (58%).
Of the respondents, 22% had
Environmental Product Declarations
(EPDs) for their products or are in the
process of developing them. EPDs
show the full carbon impact of a
product, from the extraction of the
material used to make it, through
manufacturing, to use and finally end
of life. Having EPDs for all our
materials and products means we can
more accurately calculate embodied
carbon in our homes and improve the
quality of our carbon data – one of the
key workstreams in our Scope 3
carbon reduction plan.
In addition, nearly one quarter of the
respondents have set Science Based
Targets or are in the process of doing
so.
process in place by 2025, which will
allow us to develop a more accurate
Scope 3 baseline. We will engage and
work alongside our supply partners to
understand the barriers they face and
to ensure they make progress towards
decarbonisation so we can achieve
our shared goal of carbon reduction.
Scope 3 construction-related carbon emissions by source
As demonstrated in the figure below, our analysis identifies the most carbon-intensive products that we buy, along with
the significant impact which arises from the groundworks phase, and a breakdown of the main sources of emissions from
construction-related activities.
As a first step, to address the impact of groundworks, we and other homebuilders have developed the Sustainability
Learning Pathway for subcontractors, in collaboration with the Supply Chain Sustainability School. This training
programme is designed to help companies address high-priority sustainability issues, including the transition to Net
Zero, delivering biodiversity net gain, working towards a more circular economy, delivering social value and combatting
modern slavery.
TARGETING HIGH IMPACT SUPPLIERS AND SUBCONTRACTORS
The Build
Groundworks
Purchased Services 13%
Upstream transportation
and distribution 10%
Operations and travel 2%
Labour 15%
Materials 20%
25%
(GHG Cat 1b, 2-7, 12)
35%
(GHG Cat 1a & 1b)
Products
Plastering 5%
Bricks 3%
Plumbing, Heating and
Electric works 2%
Tiles (Roof, Wall) 2%
40%
(GHG Cat 1a)
The remaining 28%
consists of other
carbon intensive
materials/products
(e.g. windows,
timber, mortar)
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We have actively promoted the
learning pathway to all our
groundworks companies and this will
be monitored and fed back to us every
quarter by the School.
We have seen a 10% increase in the
number of our suppliers engaging
with the School and we have set a
target to increase this to 85% by the
end of FY25.
Educating and upskilling the
workforce on environmental issues
Our industry faces a lack of people
and skills. It is therefore essential that
we train people in innovative
construction techniques and products,
so they can be widely adopted and
contribute to build quality.
In the last 12 months, we’ve continued
to invest in upskilling our workforce on
sustainable procurement. We held
workshops with experts from the
Supply Chain Sustainability School
(SCSS), to improve our employees’
knowledge of environmental issues.
Topics covered included climate
change, carbon reduction strategies
(including adaptation and mitigation),
Government action and legal
requirements, and calculating carbon
footprints.
Our Group and divisional commercial
and quantity surveying teams
undertook training in how to embed
carbon within procurement decisions.
Responsible timber procurement
The world’s forests provide a home to
more than 50% of land-dwelling
animals, plants and insects (source:
WWF) and are key to regulating the
global climate, as they absorb large
amounts of carbon from the
atmosphere.
For the last 15 years, we’ve sought to
eliminate illegal timber in our supply
chain. Redrow was the first UK
homebuilder to achieve the WWF’s
‘Three Trees’ status in 2015 and we’re
among the top 40 companies in the
country using responsibly sourced
timber and paper products.
Our Sustainable Timber Procurement
Policy
1
commits us to only source
certified timber from sustainably
managed forests. Our preferred
certification scheme is Forest
Stewardship Council (FSC). Operations
managed to FSC standards protect the
trees, habitats, biodiversity and the
local people from corruptive
dealership and landownership. This
year 99.98% of our timber was
certified to these standards and our
target remains at 100%.
Submission to CDP for
forests & timber
This year, we submitted the required
disclosures to the CDP Forests
Programme for the second time, to
maintain transparency in our reporting
and support our aim of becoming an
industry leader in this field. We were
awarded a C grade. We are reviewing
our processes and good practice to
improve our commitments and
benchmarks to increase our score.
Delivering our Sustainable
Timber Commitment
As part of our commitment to sustainable timber
procurement our supplier, RJ Parry Joinery has
introduced processes to ensure its own supply chain
can be audited and that it complies with FSC and PEFC
standards in order to meet our requirements.
In turn, this gives us greater assurance about the
sustainability of their timber products.
The actions RJ Parry has taken include:
• Buying timber only from approved FSC/PEFC suppliers.
• Checking supplier delivery notes before timber is
brought into the workshop, to ensure they’re identified
with the FSC/PEFC claims and the supplier chain of
custody code.
• Raising a delivery note on final inspection, which
identifies those products which are FSC/PEFC certified
along with the percentage claim.
• Ensuring that staff understand the procedures relevant
to their area of responsibility.
• Arranging an annual FSC/PEFC audit, undertaken by
an independent, third-party accredited company.
Through the audit, RJ Parry can demonstrate that
materials are tracked through every stage of the process,
from forest to end-use.
+10%
Increase in the number of our
suppliers engaging with the Supply
Chain Sustainability School
1 https://redrowplc.co.uk/media/dbydl05z/timber-policy.pdf
STRATEGY IN ACTION
FSC Timber
arriving on site
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In this section
A Better Way to Value People 78
Equality, Diversity and Inclusion 80
Redrow 2025 82
Colleague Engagement 84
Launching Our New Volunteering Approach 86
Health and Wellbeing 88
Learning and Development 90
Addressing Skills Gaps 92
Introduction from Karen Jones,
Human Resources Director
We recruit skilled people and invest in training
and developing them, so they can achieve their
potential, have a satisfying career with us and add
more value for the business and our stakeholders.
We are also taking responsibility for addressing
the long-term skills gaps in the housebuilding
sector, by inspiring the next generation to
build through our graduate and apprenticeship
programmes, and our outreach to schools
and colleges.
It is important to us that everyone feels valued and
that their hard work is recognised and rewarded. We
are proud to be accredited as a Real Living Wage
Employer, a commitment that extends to our suppliers
and subcontractors. Valuing people also means investing
time and money in their wellbeing, so we offer a variety
of programmes for our employees and subcontractors.
This includes looking for innovative ways for our people
to work productively, while giving them more control over
their work-life balance.
We are committed to promoting equality, diversity and
inclusion (ED&I) throughout the Group, so our people
feel included, we actively value their differences and
everyone’s treated fairly. The construction sector has
traditionally been male dominated, so we are working to
address the imbalance and attract more female employees
and other people from under-represented backgrounds.
Engaging with our employees is also crucial. We keep
them informed on what’s happening around the Group,
and run a survey each year to get their feedback, so
we know what we are doing well and where we can still
improve. We were pleased with this year’s results, which
included 94% of employees saying they were proud to
work for Redrow, and we will continue to strive to make
Redrow an even better place to work.
A BET TER
WAY TO VALUE
PEOPLE
Valuing People highlights
94%
Proud to work for Redrow
261
Internal promotions in year
15%
Trainees
KAREN JONES
Human Resources Director
So we have put them
at the core of the
Group’s strategy.
TALENTED
PEOPLE ARE
ESSENTIAL
FOR REDROW’S
CONTINUED
SUCCESS.
Karen Jones
Human Resources Director
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EQUALITY, DIVERSITY
AND INCLUSION
In this year’s materiality assessment,
our employees rated ED&I as one of
their top five issues and commented
that they valued our work on ED&I and
the increase in opportunities for them.
Data on our gender and ethnic
diversity can be found in the ESG
scorecard on page 10, along with our
new diversity targets for 2025. These
targets relate to gender diversity
among our graduate intakes and
ethnic diversity among our
apprentices, as well as bringing the
We’ve continued to promote ED&I this
year and introduced initiatives to
further improve our performance.
Across the Group we now have more
than 80 ED&I representatives, who
promote our policy and principles in
their divisions and support our
delivery.
Training is important for advancing
ED&I. Over 730 employees, including
our Executive Management Team and
all Divisional Boards, have attended
our ED&I workshops, which aim to
inspire our people to be inclusive and
embrace diversity. We also ran
disability awareness training for
divisional and Group management
teams, and rolled out sign language
training for our sales and customer
service employees. In addition, we’ve
delivered toolbox talks for all site-
based employees and we’ll be
engaging with our supply chain next.
percentage of women in senior roles
closer into line with the percentage
of women among our workforce as a
whole.
The ED&I results in our annual
employee survey (see Colleague
Engagement on page 84) showed that
our employees recognise our
commitment to ED&I:
• 91% feel we’re committed to ED&I,
up from 87% last year;
• 93% feel they can be themselves at
work, which brings many benefits
We run education campaigns each
quarter, with the focus areas this year
being disability, supporting the LGBT+
community, religion and belief, and
inclusion for all. Our ED&I video is
shared internally to start conversations
and externally to highlight our culture
to potential applicants.
Women remain under-represented in
the housebuilding industry, particularly
in construction and technical roles,
and we’ve been working hard over
several years to employ and promote
more women in these areas. We’re
relaunching our Women’s Network to
be an employee-led working group,
facilitating networking events, tailored
initiatives and a solid network of
likeminded colleagues to share
learning and expertise. The network
ranges from employees in their early
careers to more senior roles within the
business, illustrating the willingness of
employees at all levels to get involved.
We also want to attract more women
into the housebuilding industry,
working with schools and colleges
through our Education Ambassador
Scheme. In March 2022, a team of our
female ambassadors attended a
STRATEGY IN ACTION
We aim to attract and retain a diverse workforce, ensuring we give
everyone equal access to opportunities and allowing them to
contribute their best work and develop to their full potential. Our
ED&I agenda is supported by a formal policy, which sends out a
strong message about our commitment to fully embedding all
aspects of ED&I throughout the business.
including diversity of thought,
creativity and innovation, and a
positive impact on turnover and
productivity;
• 91% of colleagues said they were
clear about their role in supporting
ED&I; and
• 89% said their manager promotes
ED&I.
We also included a set of questions on
inclusion for the first time, which
produced an average score of 88%.
Women in Construction event at Coleg
Cambria, Wrexham. More than 100
young women had a taster of
construction roles, such as bricklaying,
carpentry and plumbing.
Our latest Gender Pay Gap Report
(https://gender-pay-gap.service.gov.
uk/Employer/u4rNIVYm/2021) shows a
mean gap of 5.9%. Whilst this
compares well with the construction
sector, we continue to strive to close
the gap.
Following feedback from our
Workforce Engagement group last
year, we reviewed our PPE catalogue
to ensure it reflects the diversity of our
workforce and the people who visit
our sites. For example, we’ve made
sure we have a suitable range of PPE
in women’s sizes, a maternity range
and different styles of clothing for all.
To support our ED&I journey, we are
proud to be a member of Inclusive
Companies, the Diversity Jobs Group,
the Business Disability Forum and
Carers UK.
“Strong commitment to ED&I and the
wellbeing of all colleagues. Great
company to work for!”
Current employee
Five star review on Glassdoor
730
Redrow employees have attended
ED&I workshops
International Women’s Day
On International Women’s Day in March 2022, we held
a webinar with a panel of seven women from across the
business, as well as our Development Director, Steve
Caldwell. Zara Barrow, Group Construction Director,
facilitated the panel discussion.
This covered topics such as why it is important for more
women to take up a career in construction, the barriers
women face in their careers and what men could do to
make women feel more comfortable about joining the
industry.
“…it was a proud moment to be part of a discussion around
gender, equality and inclusion, and how more women can be
encouraged to join this vibrant industry.”
Nora Dow
Senior Land Manager
An ED&I campaign to promote equality within Redrow as
featured on our employee portal
This ambitious project focuses on accelerating innovation
across the business. We started last year with the biggest team
consultation in Redrow’s history and we’ve seen the first results
this year. One of the more striking examples is our focus on agile
working, with a programme to reimagine our office working spaces.
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Green Academy
The next Redrow 2025 project for our people will be the Redrow Green Academy. This will be a family hub with fun and
informative content for employees to share with their families at home. We look forward to reporting on this next year.
Agile Working
We’ve found that allowing
employees to work where possible
from the place where they’re most
effective supports focused,
collaborative and creative working,
leading to better productivity. Along
with flexible working hours, this
helps to make us a more attractive
employer to a more diverse range of
people, helping them to better
balance their home lives and work
This is now reflected in our Glassdoor
reviews.
There are, of course, times when our
people need to be in the workplace,
so we’re reimagining our offices to
enable better ways of working.
We’re also conscious that our
site-based employees don’t have a
choice about their location, so we’re
working to make sure they have
great facilities on-site.
The new modular compounds we’re
introducing (see
page 56) give
on-site employees better access to
resources, so they can complete
e-learning and training courses and
join our lunchtime webinars. The
compounds also improve flexibility
for office-based employees visiting
our sites, as they can use the
dedicated working space.
REDROW
2025
Reimagining Our Offices
As part of Redrow 2025, we’re redesigning our offices
to help our people work more effectively and increase
collaboration across departments.
Our brand new Southern office is the first to be built with
open plan space, collaboration areas and private pods
for video meetings.
‘The design is fantastic for a variety of things that we want to achieve within the
new division. We want to lead the way on team working and collaboration, and have
areas in the business where we excel in the creative part of what we do, such as the
designs of our layouts. That’s all been part of the thinking.’
Rod Martin
Managing Director for Southern
Agile working
in practice
STRATEGY IN ACTION
The Modular Compound
at The Finches, Halewood,
Liverpool
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COLLEAGUE
ENGAGEMENT
INSIGHT EMPLOYEE ENGAGEMENT
SURVEY 2022
Each year, an independent third party
carries out an in-depth survey of our
monthly paid employees, to
understand how they feel about
Redrow and identify ways we can do
even better. This year, our response
rate was an excellent 88%, up from
81% last year, meaning we’re capturing
views from even more of our people.
Our overall engagement score was
83%, compared to 82% last year and in
excess of our 80% target.
The highlights from the survey are
shown below:
In addition, 76% rated communication
at Redrow highly. Whilst this is a
positive score, we’re keen to improve
this and have started providing
Divisional quarterly newsletters, to
complement the Workforce
Engagement Group and regular
engagement group meetings.
WORKFORCE ENGAGEMENT
GROUP
Our national Workforce Engagement
Group is now well established under
the leadership of Nicky Dulieu, our
designated Non-Executive Director for
Workforce Engagement. We held two
meetings this year, with the Group
putting forward a range of suggestions
to the Board. Practical outcomes
varied from sharing best practice on
using focus groups in our Lancashire
Division to providing a Redrow goody
bag to all new starters.
‘I really enjoyed how smoothly the
conference ran and how interactive
the presentations were. The
presentations really motivated me
and made me feel proud to work for
a company that cares so much for its
employees and encourages growth at
an individual and Group level.’
Redrow colleague
Employee engagement is crucial to the success of our business.
We are pleased with the headline results achieved this year
through our anonymous survey and of the improvements noted on
communication. We recognise that further improvements can be
made and we will continue to strive to make Redrow an even better
place to work.
ALL-COLLEAGUE CONFERENCE
In January 2022, we hosted our first
all-colleague staff conference. The
virtual format allowed everyone to
attend, whether they worked on-site or
in the office. This made it inclusive for
all and engaging with the whole
workforce, while minimising business
disruption. Holding the conference
online also had sustainability benefits
by avoiding travel for attendees.
The conference covered a range of
important topics, including ESG and
sustainability, Modern Methods of
Construction, material availability,
flexible working, land buying and our
policies and procedures. Feedback
after the conference gave it a 4.3 out
of 5 rating and a host of positive
comments from employees.
INSIGHT 2022
*
88% RESPONSE RATE
HEADLINE
RESULTS:
are proud to work
for Redrow
would recommend
Redrow as a good
place to work
89%
89%
89%
85%
80%
81%
94%
think that Directors have
communicated a clear
company vision for the
next few years
of new starters say their
induction gave them the
information they needed
feel supported by
their manager
believe Redrow lives up
to ‘valuing people’
think communication is good
between your team and other
teams you work with
*Last year our results were as follows:
•
93% proud to work for Redrow;
•
88% would recommend Redrow as a place to work;
•
78% think communication is good between your team and other teams you work
with;
•
84% think that Directors have communicated a clear company vision for the next few years;
•
79% believe Redrow lives up to ‘valuing people’;
•
89% feel supported by their manager;
•
67% of new
starters say their induction gave them the information they need.
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In response, we launched our new
volunteering policy in January 2022,
which allows employees to take two
days paid leave each year to
contribute to local causes. We’ve
challenged our employees to
volunteer a total of 1,000 days in the
first year, to kick start the campaign.
LAUNCHING OUR NEW
VOLUNTEERING APPROACH
One of the outcomes from Redrow 2025 was that our employees
wanted to use their talents to support charities and community
organisations in their neighbourhoods. We see volunteering as an
important part of our commitment to thriving communities, and we
also recognise the benefits to our people in terms of job satisfaction,
team bonding and having the chance to give something back.
£10 to the NSPCC for everyone who
took part. We also funded the
NSPCC’s Childline for a day and asked
some our mental health first aiders
along to see first-hand the great work
Childline does.
NSPCC AND CHILDLINE
Several of our employees volunteered
at the NSPCC’s base in Liverpool, to
restore the outside area and bring it
back to life.
We also raised funds to support the
NSPCC’s work. We ran a campaign to
encourage employees to fill out their
personal details on our human
resources system, we will be donating
LOCAL COMMUNITY FUNDS
All of our divisions help local charities.
This allows them to support community
activities in a personal and targeted
way that really makes an impact. We
have, for example, donated lifesaving
defibrillators, supported hospices and
gifted books to local schools.
To support the 1,000 days of
volunteering, a group of
employees from Group Services
attended the Nightingale House
Hospice in Wrexham over two
days and carried out work in the
garden.
They trimmed trees, dug over
flower beds so they were ready
for planting, removed weeds
from paths to improve the view
from the bedrooms, and potted
seedlings to be sold to raise
funds.
“The regular volunteers were very pleased with the amount of work
that was finished during the time we were there. It was a great
opportunity to meet staff from different departments, which helps
develop a cohesive working environment, not to mention the fun
spending time outdoors.’
Jenny Warsaw
HS&E Secretary
Volunteering at Nightingale House Hospice
A selection of community projects supported
by our community funds during the year.
STRATEGY IN ACTION
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HEALTH
AND WELLBEING
Protecting and supporting our colleagues physical and mental health
is an important part of our commitment to valuing people. During the
year, we hosted frequent webinars on health and wellbeing.
Several of the webinars covered
different aspects of mental health,
such as stress awareness; Andy’s Man
Club, which promotes men’s mental
health; Time to Talk day, which
encourages people to come together,
talk and change lives; and supporting
children’s mental health, which we ran
with the NSPCC. We also continue to
train employees to be mental health
first aiders and we now have more
than 140 trained people across our
offices and sites.
Other webinars have covered physical
health topics, such as breast and
testicular cancer, and specific issues
such as baby loss awareness. We’ve
also run seminars on helping people to
prepare for retirement, with pensions
and retirement sessions in conjunction
with Legal & General.
As discussed on pages 80 to 81, we
promote different ED&I topics each
quarter. During our quarter on
disability, we ran a poll which showed
that the top two conditions our
employees wanted to learn about were
autism and arthritis. We did an
introduction to neurodiversity through
toolbox talks, to help us make
reasonable adjustments if needed to
support employees. We also hosted a
webinar on autism and arthritis for
all our employees.
Providing opportunities for people to enjoy local,
nature-rich spaces is part of our Nature for
People strategy and can support wellbeing.
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LEARNING AND
DEVELOPMENT
Ensuring we have the right skills in place is vital to the future
success of our business. We continue to recruit and develop young
talent through our graduate programme, our focus on internal
succession and upskilling of our management colleagues to meet
the future demands of the business.
GRADUATE OPPORTUNITIES
To ensure we’ll have the skills we’ll
need to support our growth strategy,
it’s essential that we recruit and
develop young talent. Our graduate
programme is highly successful and
numerous people who joined us
through it in previous years are now in
senior positions across the Group.
As discussed in the Equality, Diversity
and Inclusion section on pages 80 to
TRAINING
Following the pandemic our overall
figures have increased from 2021. We
have continued to use the blended
approach of online facilitation together
with face to face training. Online
courses are typically shorter in
duration than face to face sessions
due to their nature. This explains the
reduction from 2019 when most
courses were held on a face to face
basis. We expect our figure to increase
in 2023 due to our increasing
proportion of qualification led training.
All our in-house training and learning
courses are provided via our
YourLearning platform, which
employees can access on any device
at any location, making the courses
more accessible to everyone. We’ve
made our training offering more robust
and we now offer e-learning,
electronic books, podcasts and
individual coaching support, as well as
a wide range of training courses.
81, we’ve focused on diversity in our
graduate recruitment and set a target
to increase the percentage of females
in the graduate intake to 40% by 2025.
To help us recruit diverse young
people, we make it clear in our
advertising that our roles are open to
graduates from any discipline, to
ensure that everyone feels included.
External coaching is part of our
succession planning strategy and is
available to all employees who want
support. We have a range of coaches
working with employees, so they’re
equipped with the skills to take on a
new role when the opportunity arises.
Training days per employee at 2.19
days is a 21% improvement on the prior
year and is progressing towards our
target of 3 days per employee per
year.
SUCCESSION PLANNING
AND PROMOTION
Succession planning has always been
important to us, as we look to develop
the next generation of homebuilders.
We’re pleased that our work to
develop our people allowed us to
make 261 internal promotions during
the financial year (FY21: 211).
A proportion of our employees
voluntarily leave or retire each year.
While it’s important that we retain
talented people in the business, an
appropriate level of turnover also
creates opportunities for internal
promotions or to bring in people with
fresh perspectives. During the year,
our turnover rate was 19.4%, against
14.3% last year.
MANAGEMENT MASTERCLASSES
Our courses for managers now include
a series of seven Management
Masterclasses, which equip them with
the competencies they need to
effectively manage their teams. The
competencies are set out in our
recently updated leadership
framework and the topics covered in
the masterclasses range from
interviewing skills to managing their
own personal development. To date,
nearly 200 colleagues have benefitted
from taking the masterclasses.
While this is higher than we would like,
we do recognise that we are in a
highly competitive market with a skill
sector shortage. We also appreciate
that this figure has been influenced by
our strategic decision to reduce
activities in our London division.
WORK EXPERIENCE
Offering work experience to 16 to 18
year olds helps to attract the next
generation into the sector. We’ve
recently launched a new work
experience programme, to enable
young people to try out all the career
options open to them in
housebuilding.
We also held our first virtual work
experience day in July 2022. More
than 20 students spent the day with
the Commercial, Construction,
Technical and Land and Planning
teams. We intend to continue with this
effective way of reaching out to young
people.
Managing
and Leading
Others
Managing
Self
InnovativeResilient
Empowering
Taking
Ownership
Flexible
Integrity
Empathetic
Passionate
Results
Focused
Team
Worker
Customer
Focused
Delivering
Commercially
DEVELOPING
THRIVING COMMUNITIES
BY VALUING PEOPLE AND
BUILDING RESPONSIBLY
4,819
Training days: up 18% (2021: 4,083)
2.19
Training days per employee
(2021: 1.81)
Training in progress at
the Tamworth Training Centre
LEADERSHIP
FRAMEWORK
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ADDRESSING
SKILLS GAPS
The industry continues to face a shortage of skills, so it’s vital
we bring in and train new talent. In addition to our graduate
programme (see Learning and Development on pages 90 to 91),
we offer apprenticeships and other training opportunities. In total,
15% of our workforce are trainees, meeting our KPI of 15% and
maintaining a similar level as in FY21.
NHBC TRAINING HUB
In the previous financial year, we
developed a Training Hub with the
NHBC. The facility focuses on
developing the skills needed in the
housebuilding sector, with the aim of
producing bricklayers who can make a
positive contribution onsite earlier in
their apprenticeship and complete
their programme within 18 months. The
model includes five weeks of upfront
training, both theory and practical, in a
training facility that looks and acts like
a genuine building site.
The Hub has now been open for more
than a year. It can train around 20
people at a time, with six intakes
annually from across the industry. We
currently have 15 of our apprentices on
the programme, with around 20 more
lined up to start later this year. The
GROUP CHIEF EXECUTIVE AND
APPRENTICE JOB SWAP
Ahead of National Apprentice Week in
February 2022, our Group Chief
Executive Matthew Pratt and level 2
carpentry apprentice Annie Mistry had
the chance to experience each other’s
roles through a job swap. The Board
takes a strong interest in our young
talent and the idea of the job swap
was to give Matthew direct insight into
an apprentice’s work and
Hub is proving very successful as the
programme is shorter than traditional
training and contractors are already
benefiting from the apprentices having
some skills before they enter the site.
‘I wasn’t sure it made sense sending
a 16 year old all the way from
Portsmouth to a training centre in the
Midlands for his bricklaying training,
but I’ve eaten my words. He has come
back from the Training Hub more
mature, conscientious, responsible
and with improved communication
skills, and the difference in his
practical ability is incredible.’
Darren J Smith
Construction Director
Redrow Southern Counties
responsibilities on-site, while giving
Annie a chance to understand the role
of the Group Chief Executive and gain
an overall perspective of the business.
We created a video aimed at potential
new apprentices, which we launched
during National Apprenticeship Week.
You can watch the video at: https://
www.youtube.
comwatch?v=tPa64fiYSVY.
REDROW DEGREE PROGRAMME
In 2017, we launched a BSc (Hons) in
Construction Management in
Housebuilding, in partnership with
Coleg Cambria in Wrexham and
Liverpool John Moores University.
During the three-year course,
students learn a wide range of skills
needed to work in different
departments. Each year includes six
block weeks of learning, with the
rest of the time spent on Redrow
sites. This provides a great
alternative to going to university for
motivated students.
“I gain first-hand experience within
the industry, as well as getting
paid a full time salary. Redrow are
there for me every step of the way…
They have really exceeded my
expectations in terms of support.
Jasmine Parker
Redrow Degree Undergraduate
“It was really fun and it’s
definitely made me see a
different side to the business.
Redrow is a great employer
because there’s so much room
for progression and they give
you countless opportunities.”
Annie Mistry
Redrow Carpentry Apprentice
Annie told me a couple of things
we’ll pick up, such as the importance
of mentoring for female employees.
It was a reminder of how many
young superstars we have across
the business and we really want to
play our part in bringing the next
generation through.”
Matthew Pratt
Group Chief Executive
I ENJOYED
THE DAY AND
I LEARNED A LOT
Matthew Pratt and Annie Mistry
taking part in the job swap
TOTAL
TRAINEES
335
TOTAL
EMPLOYEES
2,239
Apprentices 183
Graduates 65
Other 87
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FINANCIAL
REVIEW
The share buyback of up to £100m
launched in July 2022 will return to
shareholders cash which is surplus to that
needed for growth and our ongoing
dividend payout ratio.
UNDERLYING PERFORMANCE
This year the Group has delivered an
excellent financial performance. Our
underlying operating profit at £414m
1
(2021: £321m) represents a return to
the pre Covid-19 record levels
achieved in 2019 (2019: £411m). Careful
control of working capital resulted in
an underlying return on capital
employed of 24.54%
1
(2021: 18.53%)
and we generated £128m of cash,
ending the year with net cash of
£288m (2021: £160m). FY22 was a 53
week year compared to FY21 which
was a 52 week year.
These results, combined with the
regular review of our cash needs to
achieve our long term growth plans
and the prevailing share price which
was at a significant discount to net
asset value, led to the launch in July of
a share buyback of up to £100m. This
will return to shareholders cash which
is surplus to that needed for growth
and our ongoing dividend payout ratio.
REVENUE, LEGAL COMPLETIONS
AND OUTLETS
Total Group revenue was £2.1bn (2021:
£1.9bn), an increase of 10%. Homes
revenue increased by 11% to £2.1bn
(2021: £1.9bn) from the completion of
5,715 new homes (2021: 5,620) and
other revenue from land sales was
lower than in the prior year as
expected at £21m (2021: £37m
which included the disposal of two
London sites the Group decided not
to build out).
(2021: £391,900) and affordable
housing selling prices increased by 2%
to £165,600 (2021: £162,900).
We delivered 5,715 legal completions
in FY22, a 2% increase on prior year
levels (2021: 5,620). Affordable homes
represented 22% of legal completions
(2021: 23%).
Average active outlets decreased to
111 (2021: 117) broadly in line with the
guidance we issued last year. This
decrease reflects the combination of a
strong housing market and the time
required to obtain implementable
planning permissions. Given our
success in land buying in the last two
years, we continue to guide to an
average of 134 active outlets in the
2024 financial year subject as ever to
the operation of the planning system.
Homes Revenue has grown
substantially in all the regional
businesses. Total Homes revenue for
the ongoing business
1
increased by
20%, more than compensating for the
reduced revenue as we build out our
remaining non-core London sites.
Despite outlets constraining volume
growth, we have increased revenue
due to product and geographical mix
within and across regions, together
with house price inflation.
Revenue from private houses
increased by 23% to £1.7bn (2021:
£1.4bn) whilst revenue from private
apartments decreased by 28% to
£0.2bn (2021: £0.3bn) in line with the
growth of the regional housing
businesses and reduction of the
London apartments business.
RESERVATIONS AND ORDER BOOK
The Group secured £1.82bn of net
private reservations in the 53 weeks to
3 July 2022 compared to £1.79bn on a
like for like 53 week basis in the
previous year. We ended the financial
year with a private order book of
£1.1bn (2021: £1.2bn) and a total order
book of £1.4bn, broadly in line with last
year.
PROFITABILITY
Underlying gross profit was £516m
1
, a
25% increase on the prior year (2021:
£414m). This represents an underlying
gross margin of 24.1%
1
(2021:21.4%)
with house price increases more than
covering build cost inflation.
Administrative expenses increased by
£9m to £102m (2021: £93m) due to cost
inflation in the second half of the year
and the increased investment in the
Southern division prior to its official
opening at the end of June.
Administrative expenses are 4.8% of
revenue, in line with the previous year
(2021: 4.8%).
The Group therefore delivered an
underlying operating profit of
£414m
1
(2021: £321m) in the year at
an operating margin of 19.3%
1
(2021: 16.6%).
Net financing costs at £4m were £2m
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 £250m for
the year compared to £142m the
previous year.
As a result, the Group delivered an
underlying profit before tax of £410m
1
(2021: £314m) for the year with
underlying basic earnings per share
up 30% at 96.0p
1
(2021: 73.7p).
On 5 April 2022, the Group signed the
Government’s Building Safety Pledge
in respect of funding the remediation
of life critical fire safety issues on
buildings over 11 metres in which the
Group were involved, whether or not it
constructed them, going back 30
years. An additional £164m legacy fire
safety provision was created and
charged to cost of sales in April in
respect of the buildings the Group has
agreed to remediate solely as a result
of signing the voluntary Building
Affordable revenue was marginally
down at £207m (2021: £214m) due to
the timing of legal completions. It
represented 10% of homes revenue
(2021: 11%).
Our Heritage Collection contributed
88% of private revenue in the year up
from 79% last year. This reflects the
strategic shift towards quality family
detached homes in primary regional
locations, focusing on the home mover
segment.
Average selling price increased by 9%
to £370,800 (2021: £338,500)
reflecting an increase in both private
and affordable housing selling prices
compared to the previous year. The
private average selling price at
£428,200 was 9% higher than last year
Safety Pledge. This has been treated
as exceptional as it is outside the
normal course of business, non-
recurring and material by size and
nature. A copy of our signed pledge
letter can be found on our website
www.redrow.co.uk.
As a result of the exceptional item
noted above statutory gross profit
delivered was £352m (2021: £414m),
statutory operating profit was £250m
(2021: £321m) and statutory profit
before tax was £246m, a reduction of
£68m on the prior year (2021: £314m).
TAX
The corporation tax charge for the
year was £49m (2021: £60m). The
Group’s tax rate for 2022 was 20%
(2021: 19%). This increase in effective
rate is a result of the introduction by
HMRC of Residential Property
Developer Tax (RPDT) at the rate of 4%
from 1 April 2022 as the Group falls
within the scope of this new tax which
aims to provide funds for the
Government’s Building Safety fund.
The normalised rate of corporation tax
for the year ending 30 June 2023 is
projected to increase to 24.5% based
on corporation tax and RPDT rates
which are substantively enacted
currently.
The Group paid £55m of corporation
tax in the year (2021: £54m), in four
instalments.
DIVIDENDS
The Board has proposed a 2022 final
dividend of 22.0p per share which will
be paid on 16 November 2022 to
Shareholders on the register on 23
September 2022, subject to
Shareholder approval at the 2022
Annual General Meeting. This gives a
full year dividend of 32.0p (2021:
24.5p) on underlying earnings per
share of 96.0p
1
(2021: 73.7p), a payout
ratio of 33% of underlying earnings, in
line with our stated policy.
RETURNS
Net assets at 3 July 2022 were
£1,950m (2021: £1,872m), a 4% increase
representing a net asset value of
£5.54 per share (2021: £5.32 per
share). Capital employed at the same
date was £1,662m (2021: £1,712m) down
HOMES REVENUE
BY GEOGRAPHY
2022
North £458m
Central £547m
South £889m
Colindale £173m
Total Homes Ongoing £2,067m
Build Out (London) £52m
CUSTO M E R
PROFILE CHART
2022
Other Private 62%
HTB 10%
Investors 6%
Affordable 22%
CUSTO M E R
PROFILE CHART
2021
Other Private 38%
HTB 34%
Investors 5%
Affordable 23%
HOMES REVENUE
BY GEOGRAPHY
2021
North £401m
Central £416m
South £758m
Colindale £146m
Total Homes Ongoing £1,721m
Build Out (London) £181m
BARBARA RICHMOND
Group Finance Director
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3% due to the increased net cash. Our
return on capital employed increased
to 24.54%
1
(2021: 18.53%) (See note
15f). Return on equity also increased
from 17.95% to 21.45%
1
. (See note 23).
LAND
Our gross investment in land at
£1,710m (2021: £1,526m) increased
significantly as we continued to invest
in land and comprises land holdings
owned with planning of approximately
5.2 years (2021: 5.2 years).
Our land buying expertise,
placemaking and design abilities and
strong balance sheet helps us secure
quality land holdings in primary
locations. During the financial year the
Group acquired c6,000 plots with
planning permission to add to our
current (owned and contracted) land
holdings (2021: c8,300). We closed the
year with 29,600 plots in the current
land holdings, a slight increase on
prior year levels (2021: c29,460 plots).
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
Forward land is also important to us
and we purchased a number of
strategically important forward land
holdings during the year, closing the
year with forward land holdings of
37,800 plots (2021: 34,400 plots).
Approximately 27% of our current land
holding additions in FY22 came from
our forward land holdings. This is
lower than the prior year due to the
time taken to secure implementable
planning permissions (2021: 43%).
Land creditors increased by £82m to
£376m at June 2022 (2021: £294m)
representing 22.0% of gross land
value, an increase on the prior year
(2021: 19.3%).
Our owned plot cost has increased by
£5,000 to £81,000 (2021: £76,000)
whilst still representing 19% (2021: 19%)
of the average selling price of private
legal completions in the year. This
reflects the geographic mix of our land
purchases in the year.
WORK IN PROGRESS
Our investment in work in progress
has increased by £43m to £1,030m
(2021: £987m) reflecting increased
activity levels. As a percentage of
Homes turnover it reduced to 49%
from 52% last year, due to the
reduction in apartment schemes.
RECEIVABLES
Trade receivables and contract assets
decreased by £30m at 3 July 2022 to
£45m (2021: £75m) due primarily to the
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 (2021: nil).
timing of PRS receipts. Other
receivables increased from £21m to
£25m mainly due to the timing of the
recovery of VAT on land purchases.
PAYABLES
Trade payables, customer deposits
and accruals were £6m higher than
2021 levels at £613m (2021: £607m)
with trade payables increasing and
customer deposits and accruals
decreasing reflecting levels and timing
of activity.
PROVISIONS
Provisions increased by £173m during
the year primarily due to the £164m
exceptional legacy fire safety
provision mentioned earlier together
with a pre pledge £10m increase on
June 2021 remedial provision levels
actioned at our December 2021 half
year end. We expect £97m to be
utilised in FY23.
CASH FLOW AND NET CASH
There was a cash inflow generated
from operations of £318m in the year
(2021: £362m). This is due to the
increase in legal completions and
hence revenue and cash receipts more
than offsetting our continued
investment in inventories. As a result
we closed the year with a net cash of
£288m (2021:£160m). Our cash
conversion percentage (see note 23)
was 125% compared to 110% in the
prior year.
FINANCING AND
TREASURY MANAGEMENT
Our unsecured £350m syndicated
loan facility was extended in March
2021 and is due to mature in
September 2025.
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
PENSIONS
As at 3 July 2022, the Group’s financial
statements showed a £39m surplus
(2021: £40m 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).
Barbara Richmond
Group Finance Director
UNDERLYING RETURN
ON CAPITAL EMPLOYED
2019
28.53%
2018
28.45%
9.21%
2020 2021
24.54%
2022
18.53%
CURRENT LAND
HOLDINGS BY
GEOGRAPHY
2022
North 6,995 plots
Central 7,573 plots
South 12,599 plots
London 2,433 plots
CURRENT LAND
HOLDINGS BY
GEOGRAPHY
2021
North 6,796 plots
Central 8,165 plots
South 11,475 plots
London 3,024 plots
The Oxford house type at Lavant View,
Chichester, West Sussex
1 Redrow uses a variety of statutory performance measures and alternative performance measures when reviewing the performance of the Group. Underlying is
defined as any statutory or alternative performance measure pre-exceptional items. See note 23 for an explanation and reconciliation of these alternative performance
measures.
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Risk management
HOW WE MANAGE RISK OUR RISK MANAGEMENT PROCESS
BOARD OVERSIGHT
BUSINESS RISKS
OPERATIONAL MEETINGS
POLICIES FOR IDENTIFYING AND CONTROLLING RISKS
PROCEDURES AND INTERNAL CONTROLS
PEOPLE AND CULTURE
MAIN BOARD
EXECUTIVE MANAGEMENT TEAM
Audit Committee
Land Bank Management
Remuneration Committee
Budgeting & Forecasting
Divisional Boards
Business Policies and Procedures
Professionalism
Pride and Achievement
Business Process Reviews Site Completion Reviews
Functional Seminars
Authorisation Processes
Clear Communication
Interests Aligned with Stakeholders
Team Meetings
System Based Controls
Qualified Personnel
Commitment to Training
Nomination Committee
Price & Sales Monitoring
Placemaking and
Sustainability Committee
Cost Reviews
MONITORING AND REPORTING
POLICIES AND DECISIONS
Our Risk Assessment Process
Key Risk Management Objectives:
• To ensure our approach to risk meets the ongoing 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.
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.
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.
OPERATIONAL DIVISIONS
• All identified high level risks are then further broken down into components and sub level risks to be considered
at the divisional level and Group department level;
• 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.
IDENTIFY REVIEWMITIGATE MONITOR
Key areas
of focus
Implement control
processes and insurance
Performance, principal
risks and controls
Use of key
risk indicators
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STRATEGIC OBJECTIVE RISK RISK OWNERS KEY CONTROLS AND MITIGATING STRATEGIES
RI S K
MOVEMENT
EXAMPLE KEY
RISK INDICATORS
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.
This year the risk has increased due to inflationary
pressures on both materials and labour and supply chain
capacity issues. There has also been an increase in demand
for specialist remediation contractors to undertake life
critical fire safety remediation work.
Group Head of
Commercial
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.
• Material and trade
shortages
• Material and trade
price increases
• Advance payment
applications
• Reluctance to tender
for new business
HOUSING MARKET
The UK housing market conditions have a direct impact on
our business performance.
Whilst pandemic risk has been reduced in the year, this has
been offset by increased economic uncertainty as a result
of the war in Ukraine, energy price increases and cost of
living inflation.
Group
Chief Executive
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.
• Leading market
indicators re volumes
and values
• Weekly sales
statistics
CUSTOMER SERVICE
Failure of our customer service could lead to relative under
performance of our business.
Group Customer
& Marketing
Director
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.
Bespoke digitisation of complaints management system for
improved visibility and efficiency.
Regular review of our marketing and communications policy at both
Group and divisional level.
• Customer satisfaction
metrics (see page 59).
• NHBC Construction
Quality Review scores
and Reportable Items
(see pages 54 to 55)
PRINCIPAL RISKS
The Board has carried out a robust assessment of the Group's emerging and principal risks.
The following tables outline Redrow's principal risks, together with key controls and mitigating strategies.
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STRATEGIC OBJECTIVE RISK RISK OWNERS KEY CONTROLS AND MITIGATING STRATEGIES
RI S K
MOVEMENT
EXAMPLE KEY
RISK INDICATORS
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 the house building
industry being subject to a rapidly moving Government
regulatory agenda.
Group
Communities
Director, Group
Human
Resources
Director, Group
Company
Secretary and
Managing
Director (Harrow
Estates)
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.
• Government
consultations
• Planning approval
statistics
• Proposed
Government
legislation
SUSTAINABILITY
Risks associated with failure to embed sustainable
development principles.
Group
Communities
Director
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.
• Group GHG emissions
Scope 1 & 2
• % of timber certified
• Average SAP rating
• Tonnes of
construction waste
per 100m
2
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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RI S K
MOVEMENT
EXAMPLE KEY
RISK INDICATORS
HEALTH AND SAFETY/ENVIRONMENT
Non-compliance with Health & Safety standards and
Environmental regulations could put our people and the
environment at risk.
This year the risk has reduced slightly due to increased
awareness of environmental controls and improved actual
performance.
Group Health
and Safety and
Environmental
Director
Dedicated in-house team operating across the Group to ensure
compliance of appropriate Health and Safety standards supported
by external professional expertise.
HS&E Assurance Audits.
Monthly Divisional HS&E Leadership meetings.
Group and Regional HS&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.
• Annual Injury
Incidence Rate (AIIR)
(see pages 6 to 7)
• HS&E Assurance
Audits outcomes
• ‘Near Miss’ statistics
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
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.
• Level of instances
reported in the media
• Penetration test
results
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.
This has increased slightly during the year due to the impact
of regulatory requirements.
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.
• Forward land pull
through (see page 96)
• Owned land holding
years (see page 5)
• Land offer statistics
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STRATEGIC OBJECTIVE RISK RISK OWNERS KEY CONTROLS AND MITIGATING STRATEGIES
RI S K
MOVEMENT
EXAMPLE KEY
RISK INDICATORS
FRAUD/UNINSURED LOSS
A significant fraud or uninsured loss could damage the
financial performance of our business.
Group Finance
Director
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.
• Business Process
Review outcomes
• Insurance Review
outcomes
AVAILABILITY OF MORTGAGE FINANCE
Availability of mortgage finance is a key factor facilitating
liquidity in the housing market.
This risk has decreased slightly in the year due to reduced
likelihood of restriction on mortgage availability.
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.
• Loan to value metrics
• Number of mortgage
products readily
available
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 impact of
increased regulatory requirements.
Group Design
and Technical
Director
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.
• Customer satisfaction
metrics (see pages 6
and 7)
• Focus Group
feedback
• Emerging planning
regulation
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
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.
• Employee turnover
levels (see pages 8
and 9)
• Employee
engagement score
(see pages 8 and 9)
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RI S K
MOVEMENT
EXAMPLE KEY
RISK INDICATORS
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.
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.
• Cash conversion
• Forecast undrawn
committed facilities
CLIMATE CHANGE
Risks associated with the potential physical effects of
climate change and the regulatory and mandatory reporting
environment around climate change.
Group
Communities
Director
Risks and opportunities assessment aligned with TCFD framework.
Ensure appropriate consideration is given to product design to
mitigate impacts.
Identify new products, processes and services aimed at improved
energy performance and reducing Green House Gas emissions.
Undertake climate-related scenario analysis.
Commitment made to the Business Ambition for 1.5°C and to reach
Science-based net zero carbon emissions no later than 2050.
• Group GHG emissions
• Scope 1 & 2
• Average SAP rating
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GOING CONCERN AND VIABILITY
STATEMENT
An assessment of going concern is included in the Basis of Preparation section of Accounting Policies on page 242.
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, together with the economic uncertainty arising from for example the war in Ukraine, energy price pressures
and cost of living inflation and the Group’s risk and risk management attitudes and processes.
The Group has a £350m Revolving Credit Facility (RCF) (2021: £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 (2021: September 2025) and is a committed unsecured facility. As at 13 September 2022,
£350m of this facility was undrawn. It is likely that the RCF will be renewed prior to its expiry in September 2025.
The Directors have selected a three year timeframe over which to assess the viability of the Group from 4 July 2022 to
30 June 2025. 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, build cost inflation, 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 FY23 and FY24 compared to base
case Board approved budgeted prices;
• a 15% volume reduction for FY23 and FY24 compared to base case Board approved budgeted volumes;
• in addition to the build inflation incorporated within the base case Board approved budgeted costs, an additional 5%
build cost inflation increase has been applied to all build costs from Q1 FY23 with further increases of 5% from Q1 FY24
and 2% from Q1 FY25; and
• FY25 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 2025.
A more natural landscaping approach on
our developments is valued by people and
vital for wildlife.
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Task force on climate related financial disclosures (TCFD)
TASK FORCE ON CLIMATE RELATED
FINANCIAL DISCLOSURES (TCFD)
INTRODUCTION
The following section of the Company's Annual Report
outlines Redrow's disclosure of climate-related risks and
opportunities consistent with the TCFD's
Recommendations and Recommended Disclosures, taking
into account Section C of the TCFD Annex 'Guidance for All
Sectors', using a comply or explain methodology.
This TCFD report builds upon our previous reporting, to
fully comply with:
• Governance (all recommended disclosures);
• Strategy (Disclosure A – time horizons climate
assessment, partially compliant in Disclosure B –
business, planning and finance planning and C –
resilience of strategy);
• Risk Management (all recommended disclosures); and
• Metrics and Targets (Disclosures A – metrics disclosed
and C – targets, partially compliant in Disclosure B –
emissions).
For Strategy Disclosures B and C, we are currently further
integrating climate related issues into our business,
financial and strategy planning, and are undertaking a
review of governance of climate related risks and
opportunities.
Outcomes, assumptions, scenarios and sensitivities of the
scenario analysis will be used to influence how the
business addresses potential risks and opportunities within
future strategies, financial statements and actions to
ensure resilience across the business under different
scenarios.
For Metrics and Targets Disclosure B, our non-compliance
with this section is due to our ongoing work around our
Scope 3 emissions. We recognise that Scope 3 emissions
are material to our footprint and without a full verified
calculation the full extent of risks are uncertain to those
outside of our organisation.
We currently manage our in-use building emissions through
our development process and in line with building
regulations. We also recognise our supply chain as material
to our emissions whom is undergoing work to establish a
verified methodology. We will commence reporting our
Scope 3 emissions within the ESG Scorecard in FY23. The
verification process of the Scope 3 emissions data is due
to commence later this year.
To date, Redrow have implemented several changes such
as purchasing renewable energy for our offices, supplying
green energy backed by Renewable Energy Guarantees of
Origin (REGO) certificates to all plots, show homes, and site
compounds, and installing car charging stations at all
divisional offices as well as purchasing electric and hybrid
company cars. We have also trialled several low-carbon
technologies in the move to reduce emissions including:
• low-carbon heating solutions (hybrid generators) with
solar PV and an energy management system
• collaborating with manufacturers to assess the design,
build, and consumer implications of introducing air-
source heat pumps in lieu of gas boilers, in our homes
and for our customers (see pages 72 to 73)
• trialled Hydrotreated Vegetable Oil (HVO) as an
alternative to diesel for on-site generators and
construction machinery
1. GOVERNANCE
1.a 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 (“Committee”)
and Main Board in its development and monitoring of the
Company’s approach to environmental issues which
includes climate change. The Group Communities Director
assists the Group Chief Executive in carrying out his role as
Board Sponsor for sustainability by providing strategic
advice and oversight in relation to the Company’s
sustainability framework, which includes climate-related
matters. The Group Communities Director reports directly
to the Group Chief Executive and sits on the Executive
Management Team.
The overall responsibility for the stewardship of the
Company’s placemaking and sustainability framework
(including its approach to environmental, social and
governance (“ESG”) matters), compliance and performance
are reserved for the Board. The Board then delegates
responsibility to the Committee to consider material issues
relating to sustainability policies, assess the effectiveness
of sustainability practices and reviews other material ESG
issues, including climate-related issues, where the
expertise of the Committee is required.
The Committee is responsible for monitoring the
Company’s strategy on climate change as set out by the
Group Chief Executive and the Group Communities
Director and reporting back to the Board in respect of this.
Please see pages 188 to 190 of the Placemaking and
Sustainability Committee Report for further detail of the
principal activities of the Committee during the year.
In August 2021, the Company announced its Net Zero
Carbon Commitment to set a ‘science based’ long-term
goal (2050 at the latest) to achieve ‘Net Zero Carbon’ as a
business (both direct and indirect carbon emissions from
Scopes 1, 2 and 3). In line with this, during the year the
The following section clearly references to where any
relevant information can be found in other sections of this
Annual Report, or separate sources. As this is the
Company's first deep dive and quantification of climate
scenario risks and opportunities, we are further committing
to integrating our quantification and analysis into future
business, strategy and financial planning, where not
currently undertaken, by the end of FY23. This report has
been completed under advisement and in collaboration
with a specialist consultant.
In 2019 the UK Government made a commitment, in law, to
becoming carbon net zero by 2050 and Redrow recognises
the vital role that our business will play in this transition.
The UK Green Building Council state that the built
environment contributes around 40% of the UK’s total
carbon footprint
1
, and energy use in homes accounts for
14%
2
. The built environment needs to be front and centre of
the move to a lower-carbon economy. This makes our
involvement in instigating business-wide change
imperative. We understand that integrating climate-related
risks into our operations and strategy will create
opportunities which will allow our customers to make
choices appropriate to a low carbon lifestyle, and to live in
homes that are suitable for the changing climate. We will
mutually support our supply chain in their own net zero
carbon journey, which will allow us to maintain long term
value for all our stakeholders, and we welcome the
opportunity this represents.
We see this transition as part of our long-term strategy,
with much uncertainty about how the world will change.
Alongside the necessary operational emission reduction
and mitigation plans, the business will be challenged to
consider the short, medium and long-term in terms of its
investments and solutions, and to engage with a range of
possible future operating contexts. As part of our horizon
scanning, we also see the importance to investors of
non-financial disclosures increasing, with sustainability
reporting and associated data capture and systems
increasingly mandated, and perhaps in some cases placed
on an equal footing with financial reporting. These will
support the robust systems we have in place and the work
we have completed in our third year of TCFD reporting.
We have built on previous years disclosure following the
TCFD recommendations, by examining a range of possible
climate scenarios and the impact of each on Redrow’s
business. The long-term strategy will need to embed these
impacts into governance and processes to ensure a
strategic response and practical implementation to prepare
the business for a changing world.
Committee oversaw the setting and submission for
verification of the Science Based Targets initiative (“SBTi”)
commitments which saw the Group commit to a Near-term
1.5˚C reduction for Scopes 1 and 2 by 2030 and a Well
Below 2˚C reduction commitment for Scope 3 by 2030,
which upon recommendation by the Committee were
subsequently approved by the Board. As part of the
recommendation for setting the Scope 3 commitment, the
Committee gave due consideration to the actions required
by the Company and its partner supply chain to allow the
Company to meet its commitment. The Committee also has
regard to the costs associated with the carbon reduction
initiatives in the context of meeting the SBTi targets.
The Committee also reviews and scrutinises the setting of
sustainability targets proposed by management, having
regard to the ESG Scorecard and framework, for
recommendation to the Board. This includes climate-
related targets as outlined in the ESG Scorecard on pages
12 and 13. The Group Communities Director provides
regular reports to the Committee regarding performance of
the Company against the targets set and the Committee
reports back to the Board on this.
As outlined in the Terms of Reference of the Committee,
and on the governance structure for the sustainability
framework as outlined on page 191, the Group Chief
Executive has ultimate responsibility for climate-related
matters. The Group Chief Executive, being the Board
Sponsor for sustainability and climate-related matters, sits
on the Executive Management Team, the Committee, and
the Main Board. This ensures that climate matters remain
an active area of debate at Executive, Committee and Main
Board level and such matters are discussed at each
meeting held across the three levels.
Climate-related matters are considered when reviewing
and guiding strategy and form an integral part of the
'Managing Resources' strand of the Building Responsibly
theme forming part of the Company's overall strategy.
Regarding major capital expenditure, in relation to the
Company’s business this comes only in the form of working
capital (land). Future climate related risks relating to capital
expenditure, such as building regulations, planning and
flood risk, are embedded into the land appraisal process
considered by the Board. The Company has no plans for
any form of divestitures. For further detail of how climate-
related issues are considered by the Board in the context
of guiding strategy, see pages 60 to 69 of the Operating
Review.
Climate-related issues are also discussed by the Audit
Committee, at least twice per year, as part of its review of
the Risk Register. The Audit Committee also reviews the
work undertaken in respect of TCFD twice per year, which
includes approval of the TCFD-aligned report to be
included within the Annual Report. Please see page 108 of
Risk Management for further detail of how climate change
is considered in the context of risk management.
The Remuneration Committee also considers climate-
related issues at its meetings as there is now a climate
1 https://www.ukgbc.org/climate-change-2/
2 https://www.theccc.org.uk/publication/uk-housing-fit-for-the-future/
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reduction target included for the Long-Term Incentive Plan
options to be granted later this year, as outlined on pages
204 and 205, and the Remuneration Committee will assess
the performance of the Company against this target.
The Group Health, Safety and Environment Leadership
Committee (“Group HSE Committee”) 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. The Group Chief Executive, along
with other members of the Executive Management Team,
are also members of the Group HSE Committee. The Group
HSE Committee meets formally at least twice per year, and
more frequently if required, and reports directly to the
Executive Management Team. The Executive Management
Team, via the Group Chief Executive, then reports to the
Main Board regarding the work of the Group HSE
Committee. The reporting lines of the Group HSE
Committee can be seen on the governance structure on
page 156.
The composition of the Main Board can be seen on pages
154 and 155 and the members of the Committee can be
seen in the individual Committee Reports, with
representatives from other disciplines within the business
invited to attend the meetings as necessary.
The organisational governance structure is outlined on
page 156 and the governance structure for sustainability is
outlined on page 191.
1.b Describe management’s role in assessing and
managing climate-related risks and opportunities.
The Group Communities Director has direct management
responsibility for climate related and sustainability matters
and sits on the Executive Management Team with the
Group Chief Executive who has ultimate responsibility for
these matters. The Executive Management Team have
responsibility for the overall delivery of objectives and
targets of the three pillars of the Sustainability framework
and ESG scorecard. The heads of departments are
responsible for managing the implementation plans that are
in place to deliver the Group’s sustainability objectives,
including in respect of climate-related matters, and KPI
targets and the Group’s Divisions support the delivery of
these through its day-to-day practices.
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 Group
Communities Director and the Head of Sustainability both
chair and attend several cross departmental working
groups across the business which include the Group
Design and Technical Director, Group Head of Commercial,
Group Customer & Marketing Director, Chief Information
Officer, Group HR Director, Group Masterplanning Director,
Group HS&E Director and Group Construction Director.
These cross-discipline meetings, such as the Net Zero
Carbon working group, the Biodiversity working group, the
Part L Building Regulation working group, Environment
Management review group and Build and Waste group
meetings ensure that climate and sustainability-related
issues are understood and implemented across the
business.
The Group Communities Director and Head of
Sustainability are accountable for identifying and assessing
climate-related risks and opportunities. Responsibilities for
managing each of these risks are allocated to Directors/
heads of departments appropriately and discussed within
specific and relevant working groups across the Group.
Actions and results are fed back to the Executive
Management Team and, where appropriate to, the
Placemaking and Sustainability Committee and Main Board.
Please refer to page 191 for a description of the governance
structure for sustainability.
2. STRATEGY
2.a Describe the climate-related risks and opportunities
the organization has identified over the short, medium,
and long term – include a description of the process(es)
used to determine which risks and opportunities could
have a material financial impact on the organization.
and
2.b Describe the impact of climate-related risks and
opportunities on the organization’s businesses, strategy,
and financial planning
Redrow recognises that many of the climate related risks
and opportunities we face will impact the wider industry
too, and lead to a complex operating environment both
physically, due to changing climate/weather, and as a result
of the transition to a Net Zero carbon economy.
The Board is aware of the inherent linkage between
Executive remuneration and the business strategy. In
recognition of the increasing importance of climate
reduction being embedded into strategy, the Remuneration
Committee has approved a climate reduction target for the
Long-Term Incentive Plan options to be granted later this
year, as outlined on pages 204 and 205. Assessment of
the performance of the Company against this target will be
regularly reviewed by the Remuneration Committee, who
will feedback to the Board on the progress made.
Any changes to capital structure and approval of treasury
policies is a matter reserved for the Board as outlined on
page 157 of the Governance Report, therefore the impact
of climate-related issues on the financial planning process
of the Company falls within the remit of the Board.
Our supply chain plays a vital role in enabling us to meet
our climate change ambitions and decarbonisation targets.
During the year, as part of carrying out a Net-Zero Carbon
survey with our suppliers, we made them aware of our
commitment to achieving Net Zero Carbon and what we will
require for them in the future to help us meet this
commitment. We will continue to engage and work
alongside our supply partners to ensure we can achieve
our shared goal of carbon reduction. More information can
TABLE 1
SHORT TERM MEDIUM TERM LONG TERM
1-3 years
1
3-10 years
2
10-30 years
3
1 Chosen in line with the time frame for viability assessment which corresponds with the Board’s three year planning horizon.
2 Chosen in line with near term SBTi target (2030) and time frame corresponds to 5.2 year land holding year KPI.
3 Chosen in line with our SBTi net zero emissions target (2050).
be found in the Partnering with our Supply Chain
section on pages 74 to 77.
Please refer to the Supporting the United Nations
Sustainable Development Goals section on pages 30
and 31 for a description of our approach to supporting
these goals and the impact on the Company's business
and strategy, in particular SDG13 (Climate Change) and
SDG15 (Life on Land).
Redrow currently works collaboratively with specialist
consultants, architects, engineers, planning authorities
and building control to mitigate and manage short- and
medium-term risks as part of our current operational
strategy. However, as part of our increased focus on
climate impacts and our Net Zero carbon commitments,
we have evolved our approach to assess risks and
opportunities that may be impacted by climate change
and the increasing nature and severity of physical
impacts, and increased likelihood of transitional risks.
To identify and prioritise climate-related risks and
opportunities, we generated a long-list of potential
physical and transitional risks and opportunities that
are posed to any business by climate change. We then
convened a group of stakeholders representing key
functions and operations across the business to
qualitatively prioritise these risks and opportunities by
potential financial impact in the short, medium, and
long-term outlook under current operating conditions. See
Table 2 on page 116. This prioritisation was also informed
and supported by a series of stakeholder interviews
conducted across senior management in both divisional
and group functions of the business. Figure 1 outlines the
process undertaken to determine which risks and
opportunities are most material to Redrow’s business.
Each of the priority risks and opportunities was assigned
an owner to collect relevant data required to financially
quantify and identify any key knowledge gaps. Financial
quantification was undertaken with support from our
consultant climate advisors. A description of the climate
related risks and opportunities, and their impact horizon is
given in Table 2.
The assessment will be reviewed annually as part of the
annual risk review process and updated in response to
changing operating context and findings from scenario
analysis activities as described in Section 2.c below.
FIGURE 1
Quantified High
Impact Risks &
Opportunities
Longlist of
Risks &
Opportunities
Reassess
impact of Risks
& Opportunities
under scenarios
External datasets on
modelling factors under
each scenario
e.g. energy costs, carbon
taxes, physical impacts
Financial impact of
each Risk & Opportunity
for short, medium and
long term under each
scenario
Specific assumption
applied to quantification
methodology
Scenario
narratives
Scenario
Analysis
Key:
Input
Output
Calculation
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2.c Describe the resilience of the organization’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario.
Building on previous years disclosures following TCFD
recommendations, and to further understand how resilient
the business strategy is to climate-related impacts, we
have undertaken a climate scenario analysis. The process
for this can be seen in Figure 1 on page 115.
What is climate scenario analysis?
Climate scenario narratives are hypothetical descriptions of
futures that may occur under different levels of climate
change and global warming. Scenario analysis is a common
tool in climate change research and when climate scenarios
are studied in pairs or larger sets, they provide a range of
outcomes to contrast different futures and choices that
businesses will face in the transition to a low-carbon
economy.
Redrow has aligned the investigation with existing scenario
narratives including Representative Concentration
Pathways (RCPs)
3,4,5
, and Shared Socioeconomic Pathways
(SSPs)
6
and has investigated climate-related risks and
opportunities in 2025, 2030 and 2050 under three of these
scenarios as shown in Table 3 opposite. These time
intervals were chosen to align with other major milestones
including the introduction of the Future Homes Standard
building regulations in 2025, the Near-term Science Based
Target year in 2030 and Net Zero carbon ambitions by
2050 at the latest.
To understand how resilient our strategy is to climate-
related risks and opportunities, Redrow considered how
each priority risk and opportunity would evolve under the
three scenarios, developing a qualitative description and
quantitative impact for each time frame, with the outputs
shown in Table 4. The financial impact is disclosed as
minor, moderate or major reflecting Redrow’s internal
impact scale. This analysis considered:
• key input assumptions based on Redrow’s scenario
narratives and planned growth to 2050 (including
assumptions around policy changes, energy mix,
commodity prices);
TABLE 3
SCENARIO NAME DESCRIPTION OF THE SCENARIO RCP SSP
Early Transition World shifts gradually but pervasively to a more
sustainable path. CO
2
emissions are cut to net zero
around 2050, consistent with a < 2°C scenario.
2.6 – low
emissions scenario
Expected warming:
1.6°C (0.9-2.3)
change in
temperature by
2081-2100
SSP1: Sustainability
– taking the green
road
Late Transition The world shifts suddenly to a more sustainable path
tokeep within environmental boundaries.
Governments make dramaticpolicy interventions to
compensate for a late start.
CO
2
emissions are cut to net zero around 2075,
consistent with a < 2°C scenario.
2.6 – low
emissions scenario
Expected warming:
1.6°C change in
temperature by
2081-2100
SSP1/SSP2:
Sustainability
– taking the green
road/middle of the
road
Hot House Social, economic and technological trends do not shift
markedly from historical patterns. A fragmented and
insufficient global response to climate change.
CO
2
emissions triple by 2075, highlighting increased
physical climate-related risks, which are increasingly
impactful in the long-term horizon.
8.5 – high
emissions scenario
Expected warming:
4.3°C (3.2-5.4)
change in
temperature by
2081-2100
SSPs 2-5: Middle
of the road/fossil
fuelled
development
3 https://www.ipcc-data.org/guidelines/pages/glossary/glossary_r.html
4 https://www.metoffice.gov.uk/binaries/content/assets/metofficegovuk/pdf/research/ukcp/ukcp18-guidance---representative-concentration-pathways.pdf
5 https://link.springer.com/article/10.1007/s10584-011-0148-z
6 https://www.sciencedirect.com/science/article/pii/S0959378016300681
TABLE 2
CATEGORY DESCRIPTION POTENTIAL FINANCIAL IMPACT
IM PACT
TIMEFRAME
Transition
Regulation
Conservation of fuel and power in
new dwellings (FHS)
Costs to adopt/deploy new practices
and processes
Short
Transition
Regulation
Mitigating the effects of overheating
in new dwellings
Costs to adopt/deploy new practices
and processes
Long
Transition
Regulation
Introduction of carbon taxes onto
fuels
Cost to all processes/purchases
where carbon is emitted
Long
Transition Market Volatility in the energy market Increased operating costs Short
Transition Market Increasing demand on the national
electricity grid
Increased production costs due to
changing input prices (energy) and
output requirements (on-demand
charging)
Medium
Physical Acute Increasing frequency of extreme
weather events
Reduced revenue and higher costs
from negative impacts on workforce
(e.g. health, safety, absenteeism) and
potential increased number of flood
plains may impact land availability.
Long
Opportunity
Market
Attracting and retaining the
workforce due to strong ESG
credentials
Benefits to workforce management
and planning (e.g., improved health
and safety, employee satisfaction)
resulting in lower costs & turnover
rate savings
Medium
Opportunity
Reputation
Customer preference for low-carbon
homes in sustainable places
Reputational benefits resulting in
increased demand for goods/
services and a price premium in the
market
Medium
• internal company data including accurate costs for
previous work, and quantification research for known
regulation changes; and
• external supporting data as required including price
forecasts.
These were further aligned with scenarios developed by
the Network for Greening the Financial System ("NGFS") to
ensure credible and scientific data is used to determine the
size and scope of climate-related risks identified. Redrow’s
operating context is conceptualised below, under each of
the three scenarios examined.
Early transition
The early transition scenario was chosen as it evidences
meeting the TCFD’s requirement to consider a below 2°C
warming scenario, and highlights the different transition
risks and opportunities.
Under the early transition scenario, Redrow’s customers
are increasingly informed and expect value efficient and
low carbon homes and are embracing new low carbon
technologies. They are increasingly knowledgeable about
the market and are focussed on quality, ease of use, and
repairability of products. Demand for low carbon homes is
not limited to Redrow’s customers but all stakeholders
including investors, government policy makers and local
planning authorities. Green finance and mortgages are also
becoming increasingly available and value for money.
Embodied carbon rapidly moves up the agenda as whole
life carbon accounting becomes a requirement for all new
developments and homes. Suppliers are offering low
carbon options; however, procurement professionals and
designers need to innovate to find these and gain a
competitive advantage. Upskilling and training are still
required for subcontractors, employees, and customers as
technology, materials and processes evolve.
Fossil fuel costs continue to fluctuate due to societal and
economic factors, the introduction of carbon taxes, and
reduced support from national governments. Increased
standing charges are required to pay for infrastructure
upgrades potentially resulting in increased fuel poverty.
FIGURE 2
Late Transition
Early Transition
Hot House
Low (RCP 2.6)
Disorderly
Orderly
Physical Risk
Transitional Risk
High (RCP 8.6)
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Overall, the UK’s electricity grid continues to decarbonise
and there is an orderly transition to low-carbon
infrastructure. This drives innovation to improve energy
efficiency, reduce primary energy use and instigate change
in the types of onsite plant and machinery used across the
supply chain. As the supply chain decarbonises in line with
the early transition to a low carbon economy, Redrow will
be supported upstream to achieve the Near-term Science
Based Targets.
There is an increasingly competitive recruitment
marketplace, making it essential that Redrow is a
responsible direct employer of choice for highly skilled
people.
Late transition
The late transition scenario was chosen as it further
provides a view on transition risks in a longer time horizon
than the early transition.
Under the late transition scenario, there is a gradual
tightening of building regulations and planning legislation,
and a gradual shift in market conditions and Redrow’s
customer preferences until the 2030s. A sudden step
change then occurs in regulation and customer
preferences as there is a rush to meet 2050 climate
targets. The sudden increase in regulation severely curtails
any remaining high carbon aspects of Redrow’s products,
operations, and supply chain. This puts pressure on
Redrow’s land supply, subcontractors and SMEs and leads
to construction cost increases and availability issues for
many resource options. The pressure on material supply
chains may necessitate a change to the design of Redrow’s
product. These factors, along with later supply chain
decarbonisation may impact Redrow’s ability to meet the
Near-term Scope 3 Science Based Target.
Higher carbon taxes and carbon emissions allowances are
likely to also contribute to higher operation costs for
Redrow and its upstream and downstream suppliers.
The value Redrow’s customers place on low carbon homes
happens much later than the early transition scenario, and
the immediate drivers for businesses to change in
response to customer demands are slowed. There is no
added value for more carbon efficient homes in the period
leading up to 2030. This creates the risk that historic land
purchases no longer meet risk assessment and land could
become unviable to develop for housing at the profit
margins required after 2030.
A competitive market for low carbon technologies appears
suddenly as regulations force all housebuilders to adopt
new technologies immediately in the lead up to 2050. This
results in a step change for costs associated with new
technologies as well as supply chain issues as they deal
with the rapid increase in demand. Swift retraining for
subcontractors and Redrow’s employees will be required,
causing a delay in implementation as they occur
simultaneously.
The Cambridge house type at
Kingsbourne, Nantwich, Cheshire
Hothouse world
The hot house scenario was chosen as it assumes
insufficient mitigating actions are undertaken, therefore
meets the TCFD's recommendation to consider a scenario
with increased physical climate-related risks.
The global environmental policy is fragmented, driving
Redrow to evaluate supplier locations based on the local
policy impact of manufacturing costs and energy security
concerns in nations still favouring cheap fossil-fuels. Many
countries, including the UK, weaken drivers for
environmental policy change and national carbon targets
are not achieved. This results in Redrow’s existing policies
regarding responsible sourcing and emissions reductions
targets to be re-evaluated in the face of competitive
markets which don’t favour good environmental behaviour.
Most of Redrow’s customers continue to favour resource
and energy intensive lifestyles with less focus on the
environmental impact of their homes, with few business
drivers resulting from consumer pressure.
The impact of physical risks is increased causing health
and safety challenges to Redrow’s employees and
subcontractors, delays in construction, and additional
construction costs. The impact of overheating and more
extreme weather conditions are experienced by the
occupants of Redrow’s homes towards 2050 and beyond.
This leads to the likelihood of Redrow incurring
remediation costs and retrospective costs to the consumer
to refit climate appropriate HVAC equipment.
Climate change compromises the availability of raw
materials leading to delays in production and sourcing of
materials and products for the construction. Land use and
availability is impacted negatively due to water shortages,
droughts, and flood risk. With low carbon options
financially unviable and unavailable to meet demand, and
the supply chain and grid not decarbonised as forecasted,
there is a risk of Redrow’s Scope 3 Science Based Target
being difficult to achieve.
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TABLE 4
2025 2030 2050 2025 2030 2050 2025 2030 2050
CATEGORY
SU B
CATEGORY
CONCISE
DESCRIPTION
SCENARIO 1: EARLY TRANSITION SCENARIO 2: LATE TRANSITION SCENARIO 3: HOT HOUSE
Transition Regulation Conservation of fuel
and power in new
dwellings
Significant cohesive policy action to lower resource
intensity.
Sudden severe policy response to compensate for late
start.
No significant regulation likely, wide regional disparities
possible in the cost of bringing product to the market.
Transition Regulation Mitigating the effects
of overheating in
new dwellings
Significant additional modelling for overheating in
homes required by 2030.
Delayed additional policy for modelling overheating
required by 2050.
No further significant regulation introduced and gradual
increase in overheating effects.
Transition Regulation Introduction of
carbon taxes onto
fuels
Gradual increase in carbon prices through the orderly
transition to a low carbon economy.
Significant disruptive increase in carbon prices after
2030.
Continued low cost of carbon.
Transition Market Volatility in the
energy market
Likely to have higher energy costs, but not necessarily
more volatility.
Significant cost increases with sudden and disruptive
changes.
No significant increase in energy costs.
Transition Market Increasing demand
on the national
electricity grid
National infrastructure keeps pace with growing
demand for low carbon electricity so the cost of
electrical infrastructure does not increase.
Likelihood of higher costs for developers early in the
scenario as national infrastructure lags, but later in the
scenario there is investment in the national
infrastructure and less investment required by Redrow.
Continual increase in costs for developers as national
infrastructure lags behind the demand for low-carbon
energy for Redrow’s homes.
Physical Acute Increasing frequency
of extreme weather
events
Low likelihood of increasing frequency of extreme
weather events in the UK before 2050.
Low likelihood of increasing frequency of extreme
weather events in the UK before 2050.
Higher likelihood of increasing frequency of extreme
weather events in the UK before 2050.
Opportunity Market Attracting & retaining
the workforce
through ESG
credentials
As the economy transitions early, limited competitive
advantage in having strong ESG credentials. There will
be a skills shortage in the market. This makes it difficult
to attract and retrain new workforce, resulting in
additional cost for recruitment early in the transition.
In the short term, having strong ESG credentials are key
to attracting and retaining people but as the transition
occurs later in the scenario, ESG becomes less of a
differentiating factor.
Strong ESG credentials are a key market differentiator
under this scenario, but again there may be lack of skills
in the market.
Opportunity Reputation Customer preference
for low-carbon
homes in sustainable
places
Significant impact driven by consumer education,
demands and behaviours.
Significant impact beginning in 2030 driven by
consumer education, demands and behaviours.
Some eco-conscious consumers but this is not a key
driver of sales, but their is added value from Redrow’s
approach to sustainability.
Financial Impact Key:
Minor MajorModerate
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3. RISK MANAGEMENT
The focus of this report is to refine, define and quantify
climate related risks and opportunities. As we gain greater
insight into future risks, and when they become
increasingly likely to impact the business, they are
absorbed into business-as-usual operations and monitored
and mitigated over time.
3.a Describe the organization’s processes for identifying
and assessing climate-related risks.
A comprehensive risk register is maintained at Group level
covering all high-level risks across all aspects of the
business. Climate related risks have a specific section
within this risk register and feature as appropriate within
other sections of the risk register e.g. Sustainability, and
Health, Safety and Environment. Each section of the risk
register has a Risk Owner who is either a member of the
Executive Management Team or a Group Functional
Director or Head. For each high-level risk, there are
prevent and detect controls in place which are reviewed by
the Risk Owners bi-annually and by the operating divisions
and Group Functional Directors or other Group Functional
Heads as part of the formal annual review.
More information can be found in the Risk Management
section of the Strategic Report on pages 98 to 109.
This year as part of our increasing focus on climate-related
risks and opportunities we have carried out a thorough
review and impact assessment, the process of which is
detailed on page 115.
At a divisional-level, climate related issues with potential to
impact the operational performance are reported monthly
in respect of divisional issues and on a development-by-
development basis at the divisional board meeting.
The Group has an effective Environmental Management
System in place which is overseen and managed by the
Group HS&E Governance Manager and Group
Environmental Manager. This is externally certified by
British Standards Institute to the International Standard
ISO14001:2015. As part of our system, we have an
Environmental Aspects and Impact Register and an
Environmental Risk and Opportunity Register. These allow
us to determine high risk areas in our environmental impact
and focus the business on the areas of highest need
through management control actions and measurements to
drive improved performance. Both registers are monitored
through cross departmental collaboration annually or as
required following changes to legislation or changes to
business operation/process. The Group’s Land, 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
disseminated to the Executive Management Team and the
Main Board in quarterly reports. Appropriate solutions to
meet climate change requirements are identified,
evaluated, and where appropriate, employed in future-
proofing product specifications.
The process used to undertake a materiality assessment
on risks and opportunities is outlined in the Strategy
section under 2.b, as well as in Figure 1.
All risks and opportunities which are identified as being
pertinent to the business, including climate related,
environmental, and sustainability issues are reported as
follows in line with the governance structure:
• monthly to the Executive Management Team;
• seven times per year to the Main Board;
• three times per year to the Placemaking and
Sustainability Committee;
• twice per year to the Audit Committee; and
• twice per year to the Group Health, Safety and
Environment Leadership Committee.
Reports include those from divisional Board meetings and
from Group specialist functions within the business such as
Sustainability, Commercial, Construction, Finance,
Assurance, Health, Safety and Environment, Human
Resources, Sales & Marketing and Technical.
4. METRICS & TARGETS
Building on last year’s report and this year’s TCFD and SBT
activities we have included additional metrics for assessing
climate-related risks and opportunities, and highlighted
3.b Describe the organization’s processes for managing
climate-related risks & 3.c Describe how processes for
identifying, assessing, and managing climate-related
risks are integrated into the organization’s overall risk
management.
The development and implementation of Redrow’s robust
sustainability strategy ensures we meet our objectives and
allows us to recognise and address key climate-related
risks and opportunities. Our current strategy has been in
place since 2018 and the targets set within it are recorded,
monitored, and discussed annually by the Executive
Management Team and presented to the Placemaking and
Sustainability Committee.
To deliver our sustainability strategy appropriate action
plans are incorporated into the business policy and
procedures. An engagement strategy is developed to
ensure that all appropriate business functions are aware of
their roles and responsibilities.
The Group has a clear site acquisition strategy. All new site
acquisitions follow robust procedures which includes
scrutiny of all environmental risks and opportunities. As a
key part of our acquisition risk mitigation procedure each
site is reviewed taking into account the detail in specific
ecology, air quality, land contamination, flood risk and
mitigation and landscape and visual impact surveys. Our
authorisation process also robustly scrutinises specific
local environmental issues for examples Protected Sites
such as Special Protected Areas and potential nitrate and
phosphate issues. As part of our Sustainability framework,
we have set a target to demonstrate a minimum 10% net
gain for biodiversity on every new planning application by
November 2023. This enables climate resilience and
informs the design of our new developments.
areas of improvement for additional data collection for
measuring and monitoring climate-related impacts on the
business.
4.a Disclosure of metrics used to assess climate-related
risks and opportunities
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 100m
2
build
• Total energy consumed by source
• Tonnes of Carbon Dioxide equivalent
• Waste generated per 100m
2
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 100m
2
build
• % of electricity from renewable source
• Diesel and HVO usage on site
CATEGORY
DESCRIPTION MANAGEMENT & RESPONSE
Transition risks Conservation of fuel and power in new
dwellings (FHS)
Mitigating the effects of overheating in new
dwellings
Introduction of carbon taxes onto fuels
Volatility in the energy market
Increasing demand on the national electricity
grid
Design and costing for potential solutions to
ensure homes meet future regulatory
requirements.
Setting a target covering the regulated ‘in-use’
emissions of the homes to reduce in line with
the Near Term Science Based Target by 2030.
Regularly obtaining professional advice on risk
reduction measures.
Continually review materials suppliers to secure
supply from alternative sources as appropriate.
Physical risks Increasing frequency of extreme weather
events
Monitoring frequency, location and severity of
extreme weather events, insurance market
response and regulatory change in response to
extreme weather events in the UK.
Regular review of policies and procedures for
considering flood risk when procuring land or
planning a development.
Opportunities Attracting and retaining the workforce due to
great ESG credentials
Customer preference for low-carbon homes in
sustainable places
Continued focus on providing products and
places to allow our customers and workforce to
make low-carbon choices.
TABLE 5
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Task force on climate related financial disclosures (TCFD) continued
In addition to the above, Redrow have increased focus on
relevant metrics for tracking the financial impact of risks
and opportunities in the following categories:
Transition Risk
• Diesel and HVO usage on site, to inform transition risks
related to high carbon sources
Physical Risks
• Flood risk is monitored through land buying policy at
pre-acquisition stage, which informs physical risks
related to more extreme weather and increased risk of
flooding
Climate Related Opportunities
• Number of homes with renewables and PV installed
Capital Deployment
• Revenue invested in the research and development of
low carbon homes and climate resilient places
4.b Disclosure of greenhouse gas emissions and
related risks
Greenhouse Gas (GHG) emissions data for Scope 1 and 2
are detailed on page 217 of this report. Scope 1 and 2
disclosure includes all the emission sources required under
the Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and is reported in line with the
GHG Protocol: A Corporate Accounting and Reporting
Standard. Scope 3 emissions are calculated using the ‘WRI/
WBCSD GHG Protocol – A Corporate Accounting and
Reporting Standard’.
The Scope 3 emissions cover purchased goods & services,
capital goods, fuel and energy related activities, upstream
transport and distribution, waste generated in operations,
employee commuting, business travel, use of sold products
and end-of-life treatment of sold products categories as
defined by the GHG protocol. Scope 1 and 2 emissions are
reported both on a market-basis and a location-basis.
4.c Description of targets used 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
by 2050 at the latest.
In 2021, Redrow committed to setting a long-term Science
Based Target to reach Net-Zero value chain GHG emissions
by no later than 2050 and in 2022, have submitted a
Near-term Science Based Target for 2030 to the Science
Based Targets initiative (SBTi) for validation, covering all
relevant scopes and in line with the criteria and
recommendations of the SBTi. We will take a market-based
approach to Scope 1 and 2 emissions, and an absolute
contraction approach to Scope 3 emissions.
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/):
• Purchase 100% REGO-backed renewable electricity for
all operations
• Reduce water intensity of our construction operations
and offices by 5% by FY25, from 2021 baseline
• 95% + of construction waste diverted from landfill
• Reduce construction waste intensity by 10% by end of
FY25, from 2021 baseline
In addition to above, the LTIP options to be granted during
FY23 will include a stretch target as part of the
performance conditions to reduce Scope 1 and Scope 2
greenhouse gas emissions by 20.7% by financial year
ending 2025. This is with reference to a baseline year of
2020/21 (tCO
2
e 16,099) and has been set in the context
of meeting the 1.5 degree SBTi target. Please see pages
204 and 205 of the Directors' Remuneration Report for
further details.
PROGRESS TO DATE FY22 FOCUS FOR FY23
Strategy We committed to setting a long-term Net Zero
target and set a strategy to align with a Science
Based Target in the Near-term as part of our net
zero strategy.
We reviewed and enhanced the list of climate-
related risks and opportunities and describe
the process used to prioritise and quantify the
impact on our business.
We undertook a financial impact assessment for
the highest prioritised risks and opportunities,
and we have disclosed how these serve as an
input to our business’ financial planning
processes.
We undertook a scenario analysis considering
three future scenarios, including one aligned
with a <2
o
C warming scenario. We quantified
the financial impact of relevant risks and
opportunities under each scenario in each time
horizon considered.
We undertook a materiality assessment with
key stakeholders and reviewed the ranked
issues against our strategy, the alignment of
which confirmed that our strategy remains
appropriate.
We will set our long-term net zero carbon
Science Based Target in 2023. We will continue
to implement, review and update our transition
workplan to achieve net zero carbon with
specific and actionable initiatives.
We will continue to review climate-related risks
and opportunities as relevant to the business
and determine any changes in those that are
most material to our business.
We will continue to consider how our business
strategy should evolve in response to identified
risks and opportunities, making use of climate
scenarios. We will identify where uncertainties
lie regarding our strategy and how the strategy
varies in response to each scenario.
We will review scenarios used for scenario
analysis to ensure they remain relevant to our
business based on global progress towards a
low carbon economy and the latest modelling.
With their participation in our materiality survey
being lower than anticipated, we will engage
further with our investors and customers
regarding their material issues, with such
insights feeding into the ongoing review of our
business strategy in FY23.
Risk management We have created a specific section on climate-
related risk within our Group main risk register.
We have included a description of Redrow’s
response and management of transition risks
and climate-related opportunities within the
TCFD report, where in previous disclosures
only the response to physical risks has been
outlined.
We will continue to monitor emerging policy,
best practice, regulatory requirements, and
updated guidance from bodies such as the UK
Green Building Council and the Climate Change
Committee.
We will continue to review the relative
significance of climate-related risks in relation
to other risks, including how materiality
determinations are used to inform prioritisation.
Metrics & targets We have developed and submitted for
validation a near term Science Based Target for
2030 and relevant metrics around this including
Scope 1, 2 and 3 emissions, as part of our
climate change strategy.
We will undertake and develop target feasibility
assessments to set a long-term net zero target
across all scopes, which we will submit to the
SBTi for validation in FY23.
We will continue to work to understand the
embodied carbon of homes, focusing first on
measuring the embodied carbon associated
with our standard house types.
We will start to develop a more efficient data
collection process to facilitate easier
measurement and tracking against the Science
Based Targets and to monitor climate related
risks and opportunities.
We will continue to review the key metrics used
to measure and manage climate-related risks
and opportunities and any additional metrics
the business may wish to measure.
We will continue the drive for improved data
collection and systems.
5. PROGRESS TO DATE & FOCUS FOR 2023
TABLE 6
PROGRESS TO DATE FY22 FOCUS FOR FY23
Governance The description of board and committee
frequency of meetings and responsibilities,
including how the board monitors and oversees
progress against goals and targets has been
updated within the TCFD report.
A review of current governance will be
conducted, and a roadmap will be developed to
ensure climate is even more strongly
embedded in our governance processes and
strategy.
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SUSTAINABILITY ACCOUNTING
STANDARDS BOARD (SASB)
DISCLOSURE TABLE
SASB METRIC/
CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
Number of controlled
lots.
Our current land holdings comprised
29,600 plots as at 3rd July 2022.
IF-HB-000.A Our current land holdings is
defined as owned or
controlled (under contract
but does not include land
under option) with outline
or detailed planning
permission.
Number of homes
delivered.
5,715 homes legally completed (4,465
private homes).
IF-HB-000.B See page 20.
Number of active
selling communities.
An average of 111 sales outlets open in
the year.
IF-HB-000.C See page 95.
A sales outlet is defined as
a site with an outlet that has
at least 1 plot released and
the outlet has at least 6
plots of any value that are
not reserved OR the outlet
has at least £1m total worth
of plots not reserved.
ACCOUNTING METRICS
SASB METRIC/
CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
LAND USE AND ECOLOGICAL IMPACTS
Number of (1) lots and
(2) homes delivered
on redevelopment
sites.
Not reported. IF-HB-160a.1 We are reviewing our
process of data collection
for this metric for
publication in FY23.
Number of (1) lots and
(2) homes delivered in
regions with High or
Extremely High
Baseline Water Stress.
We estimate 1,017 (17.7%) home
completions were in areas of high water
stress. No homes were built in areas of
Extremely High Stress.
IF-HB-160a.2 Using the World Resources
Institute’s (WRI) Water Risk
Atlas tool, Aqueduct
(https://www.wri.org/
aqueduct).
Total amount of
monetary losses as a
result of legal
proceedings
associated with
environmental
regulations.
Zero in the reporting period. IF-HB-160a.3
The following table discloses our performance against the criteria set by the Sustainability Accounting Standards Board
(SASB), an independent not for profit organisation that sets voluntary standards to guide the disclosure of deemed
financially material sustainability information for specific industries. Our disclosures are based on the specific criteria set
out for Home Builders.
All data relates to financial year 28 June 2021 – 3 July 2022 unless otherwise stated.
Our voluntary SASB disclosures ensure we meet the increasing demands of our investors and other stakeholders. This is
the first year of publication in line with SASB standards and represents our commitment to quality, decision-useful
disclosure and evolution of our sustainability reporting. We are committed to continuously developing and expanding our
SASB reporting.
Wherever possible we have provided equivalent data and explanation. Note ‘plots’ are homes prior to completion which
are equivalent to the SASB term ‘lots’.
ACTIVITY METRICS
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CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
LAND USE AND ECOLOGICAL IMPACTS (CONTINUED)
Discussion of process
to integrate
environmental
considerations into
site selection, site
design, and site
development
and construction.
Our Sustainability Framework, Redrow 8
Placemaking Principles, Nature for
People Strategy and land buying and
construction policies and procedures
have environmental commitments, KPIs
and processes at the core of them which
deliver a robust structure for our project
teams to use through each stage of the
development process.
Site selection and acquisition:
All new site acquisitions follow strict
procedures which includes scrutiny of all
environmental risks and opportunities
including:
• Detailed ecological assessments
• Air quality impact
• Land contamination
• Flood risk and mitigation – Flood risk
authorities specify that new
developments must survive a one in
hundred year storm plus 30%- 40%.
Our developments meet and very
often exceed this specification
• Landscape and visual impact surveys
• Protected Sites such as Special Areas
of Conservation and potential nitrate
and phosphate issues
Site design and placemaking:
All sites are sustainably designed using
the Redrow 8 Placemaking Principles
which includes environmental
considerations. It incorporates national
policy and guidance including Manual
for Streets, Active Design, NHS Healthy
New Towns, BREEAM Communities,
Trees in Townscapes and Sustainable
Drainage Manual amongst others.
We are continually reviewing the energy
efficiency of our homes. The average
EPC rating for our homes is B and we are
looking to improve this as we prepare
for Future Homes standards in 2025.
Our Nature for People strategy in
partnership with the Wildlife Trust
(https://www.redrowplc.co.uk/media/
alibatd1/redrow-wildlife-trust-pdf-
brochure-updated-140322.pdf) and
Landscape manual ensure designs retain
and enhance existing quality habitats;
IF-HB-160a.4 See pages 36, 46 to 49, 70
to 71 and 122.
SASB METRIC/
CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
LAND USE AND ECOLOGICAL IMPACTS (CONTINUED)
include connectivity with habitats
outside the development; and design
green and blue infrastructure with
multiple benefits for people and nature.
The Company has a commitment that
each new planning application must
demonstrate a minimum 10% net gain for
biodiversity by November 2023. This
informs the design of our new
developments and enables climate
resilience.
Site development and construction:
The whole business is certified to the
Environmental Management System
(EMS) ISO14001:2015 standard by BSI.
Our EMS helps prevent pollution and
minimise disturbance to the local
community from flood, noise and dust as
well as helping to protect local
biodiversity.
Our Health, Safety and Environment
(HS&E) Managers conducted 770 visits
to assess compliance with our
environmental procedures. All our Site
Managers complete weekly HS&E
inspections which include environmental
performance against our procedures.
All operational sites identify Critical Site
Environmental Issues and complete a
Pollution Prevention Plan and Waste
Management plan.
As a partner of the Considerate
Constructor Scheme (https://www.
ccscheme.org.uk) since 2018, the
scheme provides the Group with an
independent assessment of our
approach to protecting and enhancing
the local environment on each
development. During the year we
achieved an overall average score of
38.43%.
Our site compounds are energy efficient
with the building fabric B+ rated, PIRs,
thermostatically controlled heating, door
closers, improved windows, rainwater
harvesting and bike racks.
Ground materials are managed at site
level and across each division to
maximise the reuse of materials on site.
Waste materials such as hardcore is
re-used where feasible.
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CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
WORKFORCE HEALTH & SAFETY
(1) Total recordable
incident rate (TRIR)
and (2) fatality rate for
(a) direct employees
and (b) contract
employees.
All H&S incidents are measured using
the Annual Injury Incidence Rate (AIIR)
metric which is per 100,000 employees.
The AIIR was 365 in FY22 for both
employees and subcontractors. This is a
reduction in number for the fourth
consecutive year.
There were no fatalities.
IF-HB-320a.1 See page 52.
DESIGN FOR RESOURCE EFFICIENCY
(1) Number of homes
that obtained a
certified HERS® Index
Score and (2) average
score.
100% home completions with an energy
efficiency rating of either EPC A or B.
Average SAP rating of 85.
IF-HB-410a.1 See pages 14 to 15 and 73.
The Energy Performance
Certificate (EPC) is the UK
equivalent to the HERS
score.
The SAP rating is an
indication of the total
running cost of the dwelling
including space heating,
water heating, ventilation
and lighting. It doesn’t
account for unregulated
energy such as the
occupants’ use of electrical
appliances.
Percentage of
installed water
fixtures certified to
WaterSense®
specifications.
100% of our Heritage range of homes in
the reporting period were designed to a
flow rate of 105 litres/person/day (l/p/d).
This is below building regulations which
require 125 l/p/d.
IF-HB-410a.2 See page 70.
UK Building Regulations
Part G is the UK equivalent
to WaterSense.
Number of homes
delivered certified to
a third-party multi-
attribute green
building standard.
100% of homes are designed to meet
our Redrow 8 Placemaking Principles
which incorporates standards on
connectivity, sustainable transport and
biodiversity.
IF-HB-410a.3 See page 36.
The UK does not currently
have an established
third-party multi attribute
green building standard for
residential homes.
Description of risks
and opportunities
related to
incorporating
resource efficiency
into home design, and
how benefits are
communicated to
customers.
A key part of our long term approach is
to continually review our risk and
opportunities in relation to resource
efficiency in the design of all of the
homes that we build. This forms a key
part of our climate vision which sets out
to reduce our carbon emissions and
adapt to a changing and unpredictable
climate.
IF-HB-410a.4 CDP Climate Score of B-
CDP Forests score of C
Sustainability | Redrow
PLC (https://www.
redrowplc.co.uk/
sustainability/).
See pages 70 to 73.
SASB METRIC/
CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
DESIGN FOR RESOURCE EFFICIENCY (CONTINUED)
We have cross departmental working
groups that are established to prepare
for forthcoming regulation changes and
to understand our customer needs and
requirements in greater detail. Examples
of this include research trials under way
with customers that have homes fitted
with alternative technology to a standard
gas boiler so we can understand not
only how the technology performs but
also the customer's experience.
In the coming year, we will carry out
surveys and focus group research with
customers to better understand what
they want and expect from new homes,
specifically with regards to energy
efficiency and the Future Homes
Standard. This research will help us to
further define our approach.
We communicate with our customers
through a variety of methods. We have
Customer Experience Suites to
transform how we interact with
customers, right from their first visit and
all the way through to post-completion.
This includes digital communications
which are updated regularly to ensure a
consistent message. Customers can use
our portal to view their choices, make
upgrades and complete their
reservations.
Through our customer facing website we
explain how our homes are water and
energy efficient and how our places are
designed in line with our biodiversity
strategy – Nature for People. We also
provide a digital tool to customers that
provides advice how they can reduce
their impact on the environment through
using their homes in the most efficient
way.
Our sales teams are supported with a
sustainability toolkit which informs them
of the resource efficiency of our homes
such as smart heating controls,
insulation and air tight designs to ensure
homes are warm and efficient. They are
also supported with information about
our placemaking principles and
commitment to supporting nature.
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SASB METRIC/
CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
COMMUNITY IMPACTS OF NEW DEVELOPMENTS
Description of how
proximity and access
to infrastructure,
service and economic
centres affect site
selection and
development
decisions.
We consider the location of every site in
terms of its proximity to public transport,
local facilities and services. Our Redrow
8 placemaking principles requires that
we “seek to build homes in locations
where there is a choice of places to walk
to within a reasonable walking distance”
and that “wherever possible, we will
choose locations that have existing or
planned employment or community
facilities within walking distance”.
Relevant indicators for this reporting
period include:
• 92% of our homes are within 500
metres of public transport
• 39% of our developments were
delivered with community
infrastructure
• We provided £281m towards
community infrastructure and
affordable housing
• 1,205 acres of public open space
• 335 trainees, apprentices and
graduates
• 2,940 subcontractors supported
• 1,898 suppliers supported
• 73 new jobs created within the direct
workforce
IF-HB-410b.1 See table under Creating
Social Value (page 43)
which illustrates some of
the economic, social and
environmental value we
have created in FY22.
Number of (1) lots and
(2) homes delivered
on infill sites.
Not reported. IF-HB-410b.2 Data on infill sites is not
specifically collected.
SASB METRIC/
CRITERIA
OUR APPROACH
AND PERFORMANCE
CO DE
NOTES/REFERENCES/
DEFINITIONS
CLIMATE CHANGE ADAPTION
Number of lots
located in 100-year
flood zones.
Not reported. IF-HB-420a.1 This data is not collected at
a Group wide level. Flood
risk assessments are carried
out as part of the site
acquisition risk identification
process. We understand the
risk of flooding on each
individual site by working
with specialist consultancies
who advise on latest data
and mapping tools. Flood
risk is highly regulated
through the planning
process and flood risk
authorities specify that new
developments must survive
a one in hundred year storm
with an additional risk
tolerance of 30%-40%.
Description of climate
change risk exposure
analysis, degree of
systematic portfolio
exposure, and
strategies for
mitigating risk.
Climate Change is a key risk identified
for the business. The Group Communities
Director has direct management
responsibility for climate related matters
and sits on the Executive Management
Team with the Group Chief Executive
who has ultimate responsibility for these
matters. The Group Communities
Director, with the support of the
sustainability department, assists and
advises the Placemaking and
Sustainability Committee and Main Board
in its development and monitoring of the
Company’s strategy on climate change.
We are in our third year of reporting in
line with the recommendations made by
the Task Force for Climate-related
Financial Disclosures (TCFD) which sets
out our strategy on determining climate
related risks and opportunities and
governance of these matters. We have
undertaken an identification and
prioritisation process of climate related
risks and opportunities and these have
been qualitatively prioritised by potential
financial impact in the short, medium,
and long-term outlook under current
operating conditions. Financial
quantification was undertaken with
support from external climate advisors
and a report prepared for the Main
Board. This assessment will be reviewed
annually as part of the annual risk review
process and updated in response to a
changing operating context and findings
from scenario analysis activities.
IF-HB-420a.2 See TCFD report pages 112
to 125.
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Group non-financial information statement
GROUP NON-FINANCIAL
INFORMATION S TATE MENT
The table below sets out where key non-financial information can be found within this report:
PROGRESS TO
RELATED POLICIES
AVAILABLE ON OUR
WEBSITE LOCATION IN THIS ANNUAL REPORT
PAG E
REF.
RELATED
PRINCIPAL RISKS*
Environment
Purchasing of sustainable
timber products policy
Group Health, Safety &
Environmental policy
statement
Partnering with our supply
chain
A responsible and
sustainable developer
Waste and resource
efficiency policy
Strategic Report – ESG Scorecard
Operating Review – Assessing our Material Issues
Operating Review – Supporting the United Nations
Sustainable Goals
Operating Review – Thriving Communities
Operating Review – Building Responsibly
Strategic Report – Task Force on Climate
Related Disclosures (TCFD)
Strategic Report – Stakeholder Engagement
Governance Report – Placemaking and
Sustainability Report
Directors Report – Environmental
6
28
30
32
50
112
148
186
217
Health and Safety/
Environment
Key Supplier or
Subcontractor Failure
Appropriateness of
Product
Sustainability
Climate Change
Employees
Code of conduct
Equality, diversity and
inclusion policy
Strategic Report – ESG Scorecard
Operating Review – Assessing our Material Issues
Operating Review – Valuing People
Strategic Report – Stakeholder Engagement
Governance Report – Workforce Engagement
Directors’ Report – Employee Wellness
Directors’ Report – Equality, Diversity and
Inclusion Policy
Directors’ Report – Learning and Development
6
28
78
142
160
220
220
221
Attracting and Retaining
Staff
Social
A responsible and
sustainable developer
Human rights policy
statement
Partnering with our supply
chain
Responsible marketing,
advertising and sales
policy statement
Strategic Report – ESG Scorecard
Operating Review – Assessing our Material Issues
Operating Review – Thriving Communities
Operating Review – Putting our Customers First
Strategic Report – Stakeholder Engagement
Governance Report – Placemaking and
Sustainability Report
Directors’ Report – Social
6
28
32
58
144
186
219
Housing Market
Health and Safety/
Environment
Attracting and Retaining
Staff
Customer Service
Key Supplier or
Subcontractor Failure
Availability of Mortgage
Finance
PROGRESS TO
RELATED POLICIES
AVAILABLE ON OUR
WEBSITE LOCATION IN THIS ANNUAL REPORT
PAG E
REF.
RELATED
PRINCIPAL RISKS*
Human Rights
Human rights policy
statement
Slavery and human
trafficking statement
Directors’ Report – Human Rights
Directors’ Report – Modern Slavery
221
222
Attracting and Retaining
Staff
Key Supplier or
Subcontractor Failure
Anti-Corruption and
Anti-Bribery
Code of conduct
Bribery and corruption
policy statement
Whistleblowing policy
statement
Governance Report – Whistleblowing
Governance Report – Conflicts of Interest
Audit Committee Report – Bribery Act
Directors’ Report – Governance
159
160
179
222
Fraud/Uninsured Loss
Attracting and Retaining
Staff
Cyber Security
Business Model
Code of conduct
A responsible and
sustainable developer
Our Strategy
Strategic Report – Our Business Model
Strategic Report – Chairman’s Statement –
Strategy
Operating Review – Assessing our Material Issues
Corporate Governance Report – Strategy,
Purpose, Culture
4
18
20
28
158
All
Non-Financial KPIs
Code of conduct
A responsible and
sustainable developer
Group Health, Safety &
Environmental policy
statement
Strategic Report – Our Strategy
Operating Review – Assessing our Material Issues
4
28
Land Procurement
Customer Service
Attracting and Retaining
Staff
Health and Safety/
Environment
Planning and Regulatory
Environment
Appropriateness of
Product
Climate Change
* For full description of related principal risks, see pages 100 to 109.
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.
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Section 172(1) statement
SECTION 172(1) STATEMENT
SECTION
OF T H E
COMPANIES
ACT 2006
KEY MATTER OF
WHICH THE
BOARD MUST
HAVE REGARD
HOW THE BOARD HAS
REGARD TO THE KEY MATTER
Section 172(1)(a) Likely long-term
consequences of
decisions
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 create a
better way to live.
There has been considerable emphasis on climate reduction, 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 32 to 77 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 98 to 109 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.
The TCFD report, which outlines how the Group specifically manages
climate-related risks and opportunities, can be found on pages 112 to 125.
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 110 of the Strategic Report.
Section 172(1)(e) Maintaining a
reputation for
high standards of
business
conduct
The Company has in place a Code of Conduct that 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 and procedures 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 of the
Directors’ Report, from pages 217 to 223, provides further insight into
measures put in place by the Board to assist with maintaining a reputation
for high business conduct standards.
SECTION
OF T H E
COMPANIES
ACT 2006
KEY MATTER OF
WHICH THE
BOARD MUST
HAVE REGARD
HOW THE BOARD HAS
REGARD TO THE KEY MATTER
Section 172(1)(f) Acting fairly
between
members of the
Company
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. 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. Where shareholders are unable to attend the AGM in
person but would like to ask a question on the formal business of the
meeting, all shareholders are offered the opportunity to submit questions
to the Board ahead of the meeting with answers being made available to
them.
Section 172(1)(b)
to Section 172(1)
(d)
Having regard to
specific
stakeholder
groups
Pages 140 to 150 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.
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.
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Section 172(1) statement continued
A S P EC T
OF DECISION BOARD CONSIDERATIONS AND ACTIONS
Decision Implementation of ‘Agile Working’.
Context As part of Redrow 2025, the Board introduced the ‘Agile Working’ initiative which means that
our colleagues are able to work from wherever they are most efficient. During the year, this
initiative was implemented across the Group with the Board agreeing to introduce more
collaborative work spaces where people work together and not in departmental silos.
Stakeholder
considerations
• Employees – feedback gained from the INsight survey, the Redrow 2025 consultation, exit
interviews and the designated Non-Executive Director for workforce engagement showed
that flexible working remains an important factor to many employees, particularly in attracting
the next generation into the industry.
• Investors – will benefit from a more productive and engaged workforce and it will assist with
embedding a culture of trust and transparency. It will also reinforce that performance is
judged on outcomes rather than presence and availability.
• Suppliers – will benefit from spaces in the business where remote working is not possible
being set up in a more collaborative manner to allow people to work better together,
including between our partners in our supply chain and our colleagues.
• Community and environment – will benefit from reduced CO
2
emissions due to less time
commuting to the work place and a healthier workforce, both physically and mentally, due to
having a good work-life balance.
• Government and regulators – will benefit from the Company considering the implications of
the Flexible Working Bill and adopting a more flexible approach as an employer.
• Customers – the Company will need to ensure that there are sufficient resources available to
our colleagues to work effectively remotely and guarantee that there will remain sufficient
physical presence in roles where working remotely is not possible so that the customer
experience is in no way negatively impacted.
Non-stakeholder
considerations
• Long-term consequences – in our commitment to attracting the next generation into the
industry, the Board found from engaging with our colleagues that having flexibility, trust and
offering more empowerment within roles was a key factor to maintaining a happy and
collaborative workforce. Embracing the views of the next generation and embedding a
culture of flexibility and trust will have positive long-term consequences for the Company,
with a healthier and more engaged workforce.
• 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 initiative
remains an active framework kept under review by the Company.
A S P EC T
OF DECISION BOARD CONSIDERATIONS AND ACTIONS
Strategic
actions
supported by
the Board
• Ensuring that sufficient resources are provided for colleagues to allow working from other
locations, e.g. issuing laptops to all office workers.
• Ensuring effective communications to ensure that all employees are aware of the initiative.
• Increasing use of technology in communications to ensure that the positive employee
engagement to date is built upon.
• Reimagining office spaces to allow for better collaborative working.
• Introduction of new modular compounds to give on-site employees better access to
resources, recognising that site-based employees are unable to work from an alternative
location and also encouraging office-based colleagues to spend time working with site-
based colleagues.
Expected
outcomes
• More collaborative working whereby people work seamlessly with each other and not in
departmental silos leading to greater productivity.
• Supporting colleagues to achieve both professional and personal objectives, including
facilitating a healthy lifestyle, both mentally and physically.
• Embedment of a culture of flexibility and trust by giving colleagues more empowerment in
their roles.
• A more motivated workforce whereby employees work hard and give back to the
organisation with higher levels of employee retention.
Link to Strategy
and Culture
Valuing People is a vital part of the Company’s strategy and the initiative helps to embed a
culture of flexibility and trust.
SECTION 172(1) DUTY IN ACTION
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Stakeholder engagement
STAKEHOLDER ENGAGEMENT
STAKEHOLDER GROUP WHY IMPORTANT TO US?
KEY PRIORITIES OF THE
STAKEHOLDER GROUP ENGAGEMENT WITH STAKEHOLDER GROUP IMPACT ON BOARD DECISIONS
INVESTORS
Our investors 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
Examples of engagement with our investors include:
• formal results presentations immediately following
publication of the interim and final results;
• meetings held between the Executive Directors and
current and potential significant shareholders;
• direct engagement by Richard Akers with significant
shareholders following his stepping up to Non-
Executive Chairman in September 2022 offering the
opportunity to set up a meeting (with a number of
meetings arranged providing valuable insight into key
priorities of those shareholders);
• a materiality assessment survey distributed by the
Group Finance Director to significant shareholders
requesting they provide feedback on what they
deemed most important for the Company to address
as part of its approach to ESG;
• engagement between the Group Communities
Director and significant shareholders as part of the
materiality assessment to discuss their ESG guidance
principals and guidelines;
• the Annual General Meeting, at which each of the
Directors were in attendance in 2021, offering an
opportunity for shareholders to directly engage with
the Board. Where shareholders were unable to attend
the AGM in person, they were offered the opportunity
to submit questions to the Board ahead of the
meeting; and
• a dedicated investor-related section of the Company
website (providing easy access to RNS
announcements, key financial dates, dividend details,
reports and publications).
For further details of engagement with investors, see
page 160 of the Corporate Governance Report, under
heading: Shareholder Engagement.
Examples of the impact of investors on the Board’s
decision making include the:
• payment of an interim dividend of 10p per share on 8
April 2022;
• implementation of a share buyback programme,
announced on 14 July 2022, to purchase ordinary
shares of 10.5p each in the Company for up to a
maximum consideration of £100m;
• proposal to pay a final dividend of 22p per share on
16 November 2022, subject to shareholder approval at
the 2022 AGM;
• introduction of a climate reduction target as a
performance condition within the 2022/2023 Long-
Term Incentive Plan, recognising that climate-related
issues are an increasingly important consideration for
shareholders; and
• introduction of an Equality, Diversity and Inclusion
(“ED&I”) input measure for the 2022/2023 annual
bonus, recognising that ED&I is an increasingly
important consideration for shareholders.
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STAKEHOLDER GROUP WHY IMPORTANT TO US?
KEY PRIORITIES OF THE
STAKEHOLDER GROUP ENGAGEMENT WITH STAKEHOLDER GROUP IMPACT ON BOARD DECISIONS
EMPLOYEES
Our employees are essential to
preserving long-term value and
Valuing People is a fundamental
part of our strategy
• Development 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
• Sustainable procurement
• Strong company culture
• Flexible working opportunities
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;
• circulation of the annual INsight survey;
• a materiality assessment survey distributed to all
employees requesting they provide feedback on what
they deemed most important for the Company to
address as part of its approach to ESG;
• 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
• Company performance communications.
For further details of engagement with employees, see
page 160 of the Corporate Governance Report under
heading: Workforce Engagement
Examples of the impact of employees on the Board’s
decision making include the:
• hosting of the Group’s first all-employee staff
conference, held virtually to allow all office and site
workers to attend;
• introduction of the new Volunteering Policy in 2022,
which allows employees to take paid leave to
contribute to local causes;
• implementation of ‘Agile Working’ initiative, which
allows colleagues to work from wherever they are
most efficient;
• continued accreditation 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;
• introduction of a remuneration-specific session as
part of the workforce engagement meetings with
Nicky Dulieu, the designated Non-Executive Director
for workforce engagement, to obtain the views of the
workforce on the remuneration arrangements of the
Executive Directors, ensuring that such arrangements
remain transparent and open to feedback from
employees;
• introduction of an ED&I input measure for the
2022/2023 annual bonus, recognising that ED&I is
an increasingly important consideration for
employees; and
• renewed annual invitation for all employees to join to
Sharesave scheme in 2022 at the full 20% share price
discount to promote share ownership.
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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
• Assistance with training and development
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
Examples of engagement with our suppliers include:
• 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;
• issuance of three-monthly forecasts, plot by plot, of
the materials and products required to allow effective
forecasting and build trust with suppliers;
• circulation of a questionnaire to 135 suppliers to find
out more about the carbon content of their products;
• a materiality assessment survey distributed to
suppliers requesting they provide feedback on what
they deemed most important for the Company to
address as part of its approach to ESG; and
• collaboration with key suppliers to find out how much
they understand about decarbonisation, what
progress they are making towards it and to
communicate the Group’s plans and requirements
of them.
Examples of the impact of suppliers on the Board’s
decision making include the:
• retained 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;
• 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 of 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;
• working with suppliers to improve the buildability of
the units via product innovation and reviewing of new
technologies;
• endorsement of a beginner-level Sustainability
Learning Pathway for groundworks companies,
together with other homebuilders and in collaboration
with the Supply Chain Sustainability School; and
• commitment to increasing resources to ensure there is
sufficient engagement with the supply chain going
forward as the Group looks to reduce its Scope 3
emissions.
LANDOWNERS
The Company strives to
remain a partner of choice for
landowners and maintaining
good relationships with
landowners is essential to our
long-term success to ensure
that the Group has sufficient
land to continue to build and
grow
• Protect and enhance biodiversity
• Address the UK housing shortage
• Build a quality product and provide a great
place to live
• Create a legacy to be proud of for future
generations
• Additionality provided through social value
• To work collaboratively and in partnership
with one another to unlock schemes
Examples of engagement with landowners include:
• a materiality assessment survey distributed to
landowners requesting they provide feedback on
what they deemed most important for the Company to
address as part of its approach to ESG;
• the reference in bid submissions to quality of the
Redrow product and the creation of legacy for
landowners; and
• continual engagement with landowners and their
representatives throughout the planning process to
keep them informed of progress and changes
required ensuring that they are brought with us
throughout the process.
Examples of the impact of landowners on the Board’s
decision making include the:
• introduction of measuring biodiversity on every new
land purchase and factoring this into the Group’s land
buying strategy to help the Company meet its
biodiversity net gain target; and
• monitoring of initiatives put in place to maintain strong
relationships with key landowners and promoters to
ensure that the Company remains the partner of
choice.
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STAKEHOLDER GROUP WHY IMPORTANT TO US?
KEY PRIORITIES OF THE
STAKEHOLDER GROUP ENGAGEMENT WITH STAKEHOLDER GROUP IMPACT ON BOARD DECISIONS
CU STO M E RS
‘Putting our Customers First’ is
a key principle underpinning
our strategic theme of Building
Responsibly. Customers are at
the heart of Redrow and are
central to its mission to creating
a better way to live
• Build a quality product and provide a great
place to live
• Provide excellent customer service
• Be a considerate constructor and good
neighbour
• Develop places that enhance health and
wellbeing
• Produce environmental homes
• Mitigate for effects of climate change and
flood risk on our developments
Examples of engagement with our customers include:
• 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;
• personalised videos for customers ranging from
pre-appointment welcome videos to site colleagues
carrying out a walk around of the home to provide a
more visual update;
• a materiality assessment survey distributed to
customers requesting they provide feedback on what
they deemed most important for the Company to
address as part of its approach to ESG;
• customer feedback via the NHBC surveys;
• business benchmarking survey undertaken with all
homeowners in their two year warranty period
undertaken by the Institute of Customer Service;
• close monitoring of customer complaints and
feedback; and
• direct engagement regarding the value of the Group’s
wider offering around placemaking and community via
the Customer Experience suites.
Examples of the impact of customers on the Board’s
decision making include the:
• creation of an additional £164m legacy fire safety
provision to fund the remediation of life critical fire
safety issues in line with the Group singing the
voluntary Building Safety pledge;
• commission of an independent survey of 2,000
people, carried out by Opinium, to gather feedback on
priorities for homes and locations to ensure that the
Board remains up to date on what homebuyers are
looking for;
• setting of the zero defects target of homes handed
over to customers with identified and unfixed issues
and monitoring of the zero defects reporting measure
within Board reports;
• improvement of the Red Site Manager Inspection app
by making changes to the inspection prompts based
on feedback received and to ensure the Company is
well positioned for the introduction of the New Homes
Quality Code and the New Homes Ombudsman
Service;
• implementation of changes in practices where
appropriate and arranging the training up of teams in
readiness for compliance with the new Consumer
Code once introduced;
• introduction of a new online complaints process for
customers whereby customers are able to track
progress with complaints; and
• extended use of the Customer Experience Suites
introduced in 2021 to turn them into sales hubs. To
date, sales hubs have opened in Derbyshire, Medway
and Essex, with further openings planned in the
near-future.
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STAKEHOLDER GROUP WHY IMPORTANT TO US?
KEY PRIORITIES OF THE
STAKEHOLDER GROUP ENGAGEMENT WITH STAKEHOLDER GROUP IMPACT ON BOARD DECISIONS
COMMUNITY,
ENVIRONMENT AND
NON-GOVERNMENTAL
ORGANISATIONS
‘Listen to Learn’ is one of the
key Redrow 8 placemaking
principles and our ‘Nature for
People’ strategy both of which
feed into the key principle
underpinning our strategic
theme of Developing Thriving
Communities
• 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
• Create social value through the
communities we build
• Be a considerate constructor and
good neighbour
• Reduce waste from our construction
activities
• High quality health, safety and
environmental practices
• Focus on resource efficiency and
pollution prevention
• Support with local causes and
community projects
• Create support and invest in roles for a
range of trainee opportunities
Examples of engagement with the community,
environment and Non-Governmental Organisations
(“NGOs”) 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 consultation with local wildlife organisations
which can provide a wealth of knowledge about
the local biodiversity and help influence our
designs to ensure the best outcome for nature
and the community;
• direct engagement with NGOs within the Group’s
industry to better understand their views and
recommendations, recognising that they have the best
interests of society and environment in mind;
• a materiality assessment survey distributed to
representatives of the local community and NGOs
requesting their feedback on what they deemed most
important for the Company to address as part of its
approach to ESG;
• 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;
• 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;
• working with local authorities and Registered
Providers to ensure that we provide the right mix of
affordable homes for local people; and
• working and supporting workstreams being
developed by organisations with UK Green Building
Council to support the more sustainable built
environment.
Examples of the impact of the community, environment
and NGOs on the Board’s decision making include the:
• introduction of a climate reduction target as a
performance condition within the 2022/2023 Long-
Term Incentive Plan, recognising that climate-related
issues are an increasingly important consideration for
stakeholders;
• setting and submitting for verification of the SBTi
commitments which saw the Group commit to a
1.5˚C reduction for Scopes 1 and 2 by 2030 and a
well-below 2˚C reduction commitment for Scope 3
by 2030;
• increased focus on TCFD reporting and allocation of
resources necessary to further assess the risks and
opportunities faced by the business in the context of
the climate landscape and the potential financial
impact and the impact that varying climate change
scenarios may have on the business;
• setting of the Group’s new biodiversity net gain
(“BNG”) target to achieve a minimum of 10% net gain
for biodiversity on every new planning application
from November 2023, in preparation for the
legislation coming into force;
• increased investment in ecology resources at
Group level which during the year assisted with the
setting of new land, planning and technical policies
and the development of a BNG toolkit for teams
and customers;
• introduction of Nature for People assessments within
the Group’s Redrow 8 post-completion audits to
better understand how well its designs are delivering
for nature and people in practice;
• trialling of a new digital consultation platform for
consulting with a wide cross section of local people in
a more easily and accessible way;
• retained contractor partnership with the Considerate
Constructors Scheme;
• maintenance of our environmental management
system, which is externally certified by the British
Standards Institution to ISO14001;
• trialling of low carbon homes in excess of current
building regulations including for example the use of
Air Source Heat pumps, Solar Panels and smart homes
electric infrared panel heaters; and
• remaining committed to the KPI target to ensure that
15% of our workforce are trainees.
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STAKEHOLDER GROUP WHY IMPORTANT TO US?
KEY PRIORITIES OF THE
STAKEHOLDER GROUP ENGAGEMENT WITH STAKEHOLDER GROUP IMPACT ON BOARD DECISIONS
POLICY MAKERS AND
LOCAL PLANNING
AUTHORITIES
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
• High quality health, safety and
environmental practices
• Mitigate for effects of climate change and
flood risk on our developments
• Produce environmental homes
• Produce local plans and neighbourhood
plans
• Implement the National Model Design Code
• Address life critical fire safety issues
Examples of engagement mechanisms with policy
makers and local planning authorities include:
• participation in a range of consultations affecting our
industry and practices;
• engagement with the Department for Levelling Up,
Housing and Communities regarding fire safety issues
in high rise buildings;
• engagement with Government via our membership
with industry organisations such as the Home Builders
Federation;
• attendance at meetings and forums to engage with
policy makers relevant to our operations;
• 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;
• a materiality assessment survey distributed to
representatives of policy makers and local planning
authorities requesting they provide feedback on what
they deemed most important for the Company to
address as part of its approach to ESG;
• Government lobbying in relation to matters impacting
the housing market, which this year included lobbying
by the industry on nutrient issues which resulted in
the recent written ministerial statement on the matter;
• engagement with regulatory bodies during industry
sector visits;
• direct engagement regarding the new
Consumer Code;
• engagement in respect of local plan and
neighbourhood plan consultations seeking to
influence local policy on housing, design and
sustainability;
• engagement with Local Authorities on the implications
of the National Model Design Code; and
• working and supporting the work of the Future Homes
Task Force to help meet government and industry
climate and environmental targets through high
quality homes and placemaking design.
Examples of the impact of policy makers and local
planning authorities on the Board’s decision making
include the:
• supporting of funding new wetlands to assist with the
water nutrient issues which are resulting in local
authorities delaying planning approval for many new
developments;
• supporting the seeking of new land opportunities
outside the areas affected by nutrient and water
neutrality in the short term until a permanent fix is
available as part of the Group’s land buying strategy;
• voluntarily signing up to the Government’s Building
Safety pledge, committing to funding the remediation
of life critical fire safety issues on all the buildings in
which the Group were involved going back 30 years;
• 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;
• regular interaction with regulators and policy makers
to provide key business insights on issues
surrounding housing delivery across the UK; and
• receipt of reporting from the Group Masterplanning
Director in respect of his work with the Divisions in
direct discussions with Local Authorities on the
implications of the National Model Design Code.
STRATEGIC REPORT APPROVAL
The Strategic Report outlined on pages 1 to 150 has been approved by the Board.
By order of the Board
Graham Cope
Company Secretary
13 September 2022
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Corporate governance report
CORPORATE
GOVERNANCE
REPORT
The Warwick, the Oxford and the Henley house types,
Ash Holt, Newton Garden Village, Nottinghamshire
DEAR SHAREHOLDER
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 2022
financial year, the Company applied the principles of, and
was compliant with the provisions of, the Code, other than
as outlined on page 157.
In this report, we seek to provide the opportunity for a
meaningful assessment of the quality of the Company’s
governance arrangements and the workings of our Board
as well as providing the required regulatory and statutory
assurances.
Board composition
Since the last report, Richard Akers has taken over the
Non-Executive Chairman role from John Tutte, who
stepped down 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
and worked closely with the former Chairman during a
handover period.
On 1 February 2022 we welcomed Oliver Tant as an
additional independent Non-Executive Director and Audit
Committee Chair-Designate. Oliver Tant is also a member
of the Audit, Remuneration and Nomination Committees
and has been working closely with Nick Hewson in
readiness for taking over the role of Chair of the Audit
Committee following the 2022 AGM. Further details of the
appointment of Oliver Tant can be found on page 182 of
the Nomination Committee Report.
Nick Hewson will be stepping down from the Board at the
2022 AGM having served a nine year term as a Non-
Executive Director of the Company.
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 line with the Code, a formal external evaluation of the
Board and each of its Committees was carried out by
Independent Audit Limited (“Independent Audit”) this year.
Independent Audit was engaged to assist with the external
evaluation in 2019 and was re-engaged in 2022 following a
competitive tender process.
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 pages 165
to 166.
Climate change
Having recognised the importance and value of increased
reporting of climate-related information, the Company
voluntarily made disclosures in line with the Task Force on
Climate-Related Financial Disclosures (“TCFD”) framework
within its 2020 Annual Report and 2021 Annual Report.
Listing Rule 9.8 has made it mandatory for all UK listed
companies to report in line with the TCFD framework for
financial years beginning on or after 1 January 2021. In line
with this, the Company has further increased its focus in
this area and during the year a TCFD Steering Group was
set up. The TCFD Steering Group has been primarily
focused on:
• assessing the risks and opportunities faced by the
business in the context of the climate landscape;
• the potential financial impact that may be faced by the
business should the risks and opportunities identified
materialise;
• assessing the impact that varying climate change
scenarios may have on the business; and
• assessing the governance structures in place in dealing
with climate related matters.
The work of the TCFD Steering Group was then reported
through the Governance framework which involved
discussion and debate by the Executive Management Team
and the Placemaking and Sustainability Committee and
review and approval by the Audit Committee. The 2022
TCFD report can be found on pages 112 to 125.
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. During the year Nicky
Dulieu, as designated Non-Executive Director for
workforce engagement, hosted two virtual meetings 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
sessions. Further details of this workforce engagement
session, along with other engagement mechanisms, can be
found on pages 160 to 161.
Environmental, social and governance
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.
The Company connects environmental and social matters
across the business and ensures that it is underpinned by
good governance which leads to better long-term
decisions.
The Board is responsible for ensuring that Environmental,
Social and Governance (“ESG”) initiatives are being driven
forward and that ESG matters are considered as part of its
regular risk assessment. Further details of the work
undertaken with regard to ESG can be found on pages 217
to 223.
2022 Annual General Meeting
Our 2022 Annual General Meeting will be held on Friday, 11
November 2022 and the Notice of Annual General Meeting
together with Explanatory Notes will be sent to you
separately.
Graham Cope
Company Secretary
13 September 2022
“Good governance is essential for
delivering long-term sustainable success
and the Board ensures that there is a
strong infrastructure which guides
decision-making and applies appropriate
controls across the business for optimum
effectiveness.”
GRAHAM COPE
Company Secretary
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BOARD OF DIRECTORS
RICHARD AKERS (61)
Non-Executive Chairman
Richard Akers joined the Redrow
Board as Chair-Designate and
independent Non-Executive Director
on 1 June 2021. He worked closely
with John Tutte during a handover
period and assumed the role of Chair
following the announcement of the
Company’s 2021 full year results on 15
September 2021, at which time John
stood 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 the
position of Senior Independent
Director of Shaftesbury plc, 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.
MATTHEW PRATT (47)
Group Chief Executive
Matthew Pratt joined the Redrow
Board 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 25 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 (62)
Group Finance Director
Barbara Richmond joined the Redrow
Board 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 and as Chair of the Audit and
Compliance Committee with effect
from 5 May 2022.
She is a Fellow of the Institute of
Chartered Accountants in England and
Wales and a graduate of the University
of Manchester.
GRAHAM COPE (58)
Company Secretary
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 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 (64)
Senior Independent Director
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.
NICKY DULIEU (58)
Non-Executive Director
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 of Unite Group plc,
Adnams plc (where she is also Chair of
the Remuneration Committee) and WH
Smith plc (where she is also Chair of
the Audit Committee). She is also 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.
OLIVER TANT (61)
Non-Executive Director
Oliver Tant joined the Redrow Board
as an independent Non-Executive
Director and Audit Committee Chair-
Designate on 1 February 2022. Until
last year, Oliver Tant served as Chief
Financial Officer of Imperial Brands
PLC where he was responsible for
finance, treasury, investor relations,
procurement and information
technology. Prior to this role, he held a
number of senior positions in a
32-year career at KPMG, including
Vice Chairman, Global Managing
Director (Financial Advisory and
Private Equity Divisions) and Head of
UK Audit. Oliver was also a Non-
Executive Director of both the UK and
German Boards of KPMG.
Oliver Tant is currently working with
Brookfield Asset Management where
he is providing financial consulting
services to their portfolio company
Modulaire Group. He previously
served as Audit Chair of the Royal
Hospital for Neuro-Disability and also
served as governor for a leading UK
independent school.
Oliver Tant is a Chartered Accountant
with the Institute of Chartered
Accountants of Scotland and the
Institute of Chartered Accountants in
England and Wales and has a Joint 1st
Class Honours degree in Economics
and Business Economics.
BOARD EXPERIENCE
Finance
Operational
Property
Sustainability
COMMITTEE MEMBERSHIP
Main Board
Nomination Committee
Audit Committee
Remuneration Committee
Placemaking and Sustainability
Committee
M
P
A
N
R
The Board consists of our Non-Executive Chairman, Richard Akers; two Executive Directors,
Matthew Pratt and Barbara Richmond; three independent Non-Executive Directors, Nick Hewson,
who is the Senior Independent Director, Nicky Dulieu and Oliver Tant; and our Company
Secretary, Graham Cope. The Board has an appropriate balance of skills, knowledge and
experience to allow it to create long-term sustainable value for stakeholders.
Governance report
M
P
M
M
M A N R P
M A N R M A N R
M N R
P
Redrow Board of Directors at Meadow Gardens, Yapton, West Sussex
Left to Right: Graham Cope, Nick Hewson, Nicky Dulieu, Richard Akers, Matthew Pratt, Barbara Richmond and Oliver Tant.
156 157
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GROUP COMMUNITIES DIRECTOR
Responsible for placemaking and the sustainability
strategy and ensuring that these functions align with the
Group’s long term objectives and targets.
COMPANY SECRETARY
Responsible for governance structures and mechanisms,
corporate conduct and is the primary source of advice on
the conduct of the business.
REDROW GOVERNANCE STRUCTURE
INTRODUCTION
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.
GOVERNANCE STRUCTURE
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 documents
are regularly reviewed and is updated in line with best
practice and legislative or regulatory changes.
COMPLIANCE WITH THE UK CORPORATE
GOVERNANCE CODE
The Directors have considered the contents and
requirements of the Code and confirm that throughout the
53 weeks ended 3 July 2022 the Company has been
compliant with the principles and provisions of the Code
other than provision 38. Executive Directors' pension
contribution rates have historically been set at 20% of
salary which is higher than the workforce contribution rate.
The Company is in a process of aligning the pension
contribution rate for our Group Finance Director by 1
January 2023. The Group Finance Director’s rate will
remain at 20% of salary and reduce to the workforce rate
of 7% of salary from 1 January 2023, as set out in the
Directors’ Remuneration Policy which was approved by
shareholders with a 96.94% majority at the 2021 AGM. This
is in compliance with The Investment Association's
Principles of Remuneration guidance issued in November
2021 and in line with current good practice in this area.
1. BOARD LEADERSHIP AND COMPANY PURPOSE
ROLE OF THE BOARD
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;
• changes to the size, structure and composition of the
Board;
• 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 156.
BOARD MEETINGS
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
predominantly been held in person and the Board have
carried out in-person site visits, accompanied by the local
management team.
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
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 on page 158.
TERMS OF REFERENCE
ARTICLES OF ASSOCIATION
REDROW HANDBOOK & CODE OF CONDUCT
MAIN BOARD
BOARD COMMITTEES
EXECUTIVE MANAGEMENT TEAM
LEADERSHIP COMMITTEES
NON-EXECUTIVE CHAIRMAN
Responsible for leading the Board
and ensuring its effectiveness with a
key focus of the strategic
development of the business.
GROUP CHIEF EXECUTIVE AND
GROUP FINANCE DIRECTOR
Responsible for day-to-day
operation of the business and
performance of the Company.
NON-EXECUTIVE DIRECTORS
(INCLUDING SENIOR INDEPENDENT DIRECTOR)
Responsible for providing
constructive challenge and helping
to develop proposals on strategy.
AUDIT
Provides independent scrutiny of the Company’s financial
and non-financial performance, risks and audit functions.
NOMINATION
Identifies and makes recommendations concerning the
composition of the Board and that of its Committees.
REMUNERATION
Aims to attract and retain good management and to
incentivise them to create shareholder value.
PLACEMAKING AND SUSTAINABILITY
Promotes high environmental and placemaking standards in
line with the Group's strategy.
GROUP CHIEF EXECUTIVE
Responsible for the operational management of the Group and the implementation of strategic plans.
GROUP HR DIRECTOR
Responsible for implementing the strategy on people,
ensuring that the management of talent and culture is
aligned with the Group’s longer-term goals.
GROUP CUSTOMER & MARKETING DIRECTOR
Responsible for the overall customer experience, including
marketing and sales strategy, and developing the Group’s
reputation via strategic communications and customer service.
GROUP
Commercial | Finance | HS&E | HR | IT
Legal | Marketing | Technical | Sustainability
The above departments support the Divisions to contribute
to the successful operation of the business.
REGIONAL CHIEF EXECUTIVES
Responsible for the operational management of the
Divisions and reporting to the Board on this.
POLICY AND PROCEDURES MANUAL
GROUP FINANCE DIRECTOR
Responsible for the financial management of the Group in
its broadest sense and maintaining effective
communications with shareholders.
FIRE SAFETY
Responsible for managing the Group’s approach to funding
the remediation of life critical fire safety issues on buildings
over 11m in which the Group was involved going back 30
years in line with its commitment.
GROUP HEALTH, SAFETY AND ENVIRONMENTAL
Responsible for developing and monitoring the Group’s
approach to health and safety and environmental
sustainability matters.
DIVISIONS
Build | Commercial | Customer Services
Finance | Land | Sales | Technical
Our Homes Divisions are comprised of the above departments
which work together to deliver the Group’s strategy.
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PROFESSIONAL DEVELOPMENT
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.
During the year, formal appraisals of the Group Chief
Executive, Group Finance Director and Non-Executive
Directors were undertaken by the Non-Executive
Chairman. The Non-Executive Chairman had an annual
appraisal conducted by the Senior Independent Director.
KPI ASSESSMENT AND RISK MANAGEMENT
The Board has the overall responsibility for setting the key
performance indicators and selecting the appropriate form
of measurement to allow an objective assessment of 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
carries out a robust assessment of the principal risks facing
the Company, including those that would threaten its
business model, 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 98 to 109.
STRATEGY, PURPOSE AND CULTURE
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 is to create a better way for people to live.
This 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 and clear.
The Redrow culture is the unconscious landscape through
which colleagues think, behave and act, regardless of
whether they are working in the boardroom, Division,
Group or on site. Culture is embedded through the Group’s
values which gives colleagues confidence about the
established Redrow brand and innovative way of
transforming lives of customers by creating dream
aspirational homes with inspirational designs. There is a
strong focus on creating personal emotional connections
with customers to make them feel instantly at home. This
culture is the backdrop of life at Redrow and colleagues are
expected 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:
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.
2. Consistent language is used in communications with
our colleagues via our intranet, Engage, which seeks
to embed cultural norms by reinforcing the strategy
and values and reiterating the behaviours and actions
which are to be encouraged.
3. Policies are regularly reviewed and updated to ensure
that they are in alignment with the Company’s purpose,
values and strategy.
4. Colleagues have access to the Redrow Brand Portal
which reinforces what Redrow stands for and provides
a single source of brand-related assets to ensure
brand consistency.
5. 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.
6. 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 uses the feedback from the above measures to
monitor behaviours and assess their alignment with the
desired culture.
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 customers.
WHISTLEBLOWING
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 two incidents reported
through the whistleblowing procedure. In line with the
policy, thorough investigations were held in respect of the
reported incidents led by the Company Secretary. The
investigation into the first incident has concluded and the
matter was dealt with in line with the policy and the Redrow
Employee Handbook. The investigation into the second
incident remains ongoing and is being dealt with in line
with the whistleblowing procedure.
The Whistleblowing Policy is formally reviewed and
approved each year by the Board, with changes being
approved in June 2022.
TABLE OF ATTENDANCE
NAME ROLE ATTENDANCE AT MEETINGS
John Tutte
1
Non-Executive Chairman 1/1
Richard Akers Non-Executive Chairman 9/9
Matthew Pratt Group Chief Executive 9/9
Barbara Richmond Group Finance Director 9/9
Nick Hewson Senior Independent Director 9/9
Sir Michael Lyons
2
Non-Executive Director 1/1
Nicky Dulieu
3
Non-Executive Director 8/9
Oliver Tant
4
Non-Executive Director 6/6
1 John Tutte stepped down from the Board on 15 September 2021 and attended the one meeting held from the beginning of the 2022 financial year to the date he
left the Board.
2. Sir Michael Lyons stepped down from the Board on 12 November 2021 and attended the one meeting held from the beginning of the 2022 financial year to the
date he left the Board.
3. Due to unforeseen circumstances, Nicky Dulieu was unable to attend one meeting during the year and was fully appraised by the Chairman of the matters
discussed therein following the meeting.
4. Oliver Tant was appointed as Non-Executive Director on 1 February 2022 and attended all meetings held from his appointment date to the end of the 2022
financial year.
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CONFLICTS OF INTEREST
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.
SHAREHOLDER ENGAGEMENT
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.
During the year, the Board engaged with shareholders
through the following means:
1. Analyst presentations – 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.
2. Current and potential significant shareholders
meetings – following the full year and half-yearly
results’ announcement in September 2021 and
February 2022, the Executive Directors held meetings
with current and potential significant shareholders and
feedback from these meetings was independently
collated and disseminated to the Board.
3. Non-Executive Chairman introduction – following
Richard Akers stepping up to Non-Executive Chairman
in September 2022, he reached out to significant
shareholders introducing himself as the new Non-
Executive Chairman and offering the opportunity to set
up a meeting. As a result of this, a number of meetings
were arranged which provided valuable insight into
key priorities of those shareholders.
4. Materiality assessment survey – during the year, the
Group Finance Director reached out to significant
shareholders to seek their opinions on what they deem
to be the most important issues for Redrow to address
as part of its approach to ESG topics. The request
contained a materiality assessment survey which
allowed shareholders to rate each ESG topic on its
impact and likelihood and provided an opportunity for
comments to be raised on each issue.
5. Annual General Meeting – last year the AGM took
place at the offices at etc. venues, 1st Floor, 200
Aldersgate Street, London EC1A 4HD on Friday 12
November 2021. All Directors attended the AGM, which
allowed them to engage directly with shareholders and
their representatives and answer any questions. The
Board answered questions from shareholders and
engaged with them following the meeting. In the event
that shareholders were unable to attend the AGM but
had a question to raise, the Board provided the
opportunity for shareholders to submit questions
ahead of the meeting as outlined in the Notice of
Meeting.
Formal notification of the 2022 AGM will be sent to
shareholders at least 21 working days in advance.
6. Company website – there is a dedicated investor
related section of the Company website (redrowplc.co.
uk) providing easy access to RNS announcements, key
financial dates, dividend details, reports and
publications. The website also gives access to current
financial and corporate information.
WORKFORCE ENGAGEMENT
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 is the
designated Non-Executive Director for workforce
engagement. During the year, Nicky Dulieu hosted two
virtual employee engagement sessions 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.
In line with Provision 40 of the Code, there was a
section of the second employee engagement session
that was dedicated to engagement regarding the
remuneration arrangements of the Executive Directors.
This ensured that such arrangements remain
transparent and provided employees with the
opportunity to provide their feedback relating to
remuneration.
The sessions provide 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 sessions 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 sessions and
was able to share with the group which issues were
under active consideration by the Board.
Following each session, an action plan was put
together and was presented to the Board by Nicky
Dulieu who issues feedback to the employee
representatives in between each bi-annual session.
2. 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.
3. 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.
4. INsight survey – this survey is distributed annually to
all employees by an independent third party company
and in the latest survey there was an 88% 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.
5. Materiality assessment survey – during the year, the
Sustainability team reached out to all employees to
seek their opinions on what they deem to be the most
important issues for Redrow to address as part of its
approach to ESG topics. The request contained a
materiality assessment survey which allowed
employees to rate each ESG topic on its impact and
likelihood and provided an opportunity for comments
to be raised on each issue.
6. 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.
7. 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, Managing
Directors and Heads of Departments now provide, at
least quarterly, an overview of news within the
related Division and beyond.
8. 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.
The Board is satisfied that the existing employee
engagement activities are effective in understanding the
views of the workforce and feels that matters are
discussed across all levels of the business in line with its
Governance structure, including at Board level where
appropriate. Engagement mechanisms will be kept under
review for their effectiveness and will be adapted and
evolved in line with the needs of the business.
STAKEHOLDER ENGAGEMENT
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 140 to 150 of the Strategic Report.
SECTION 172(1) STATEMENT
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 136 to 139 of
the Strategic Report.
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company has directors’ and officers’ insurance in
place which insures Directors against certain liabilities,
including legal costs.
162 163
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2. DIVISION OF RESPONSIBILITIES
THE BOARD
The Board currently comprises a Non-Executive Chairman,
two Executive Directors and three independent Non-
Executive Directors, one of which acts as the Senior
Independent Director.
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
Richard Akers, 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.
Richard Akers replaced John Tutte as Non-Executive
Chairman on 15 September 2021, having been appointed to
the Board as Chair-Designate and independent Non-
Executive Director on 1 June 2021.
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 and Executive
Management Team.
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 with shareholders;
and
• reporting on these to the Board.
In addition to her role on the Main Board, the Group
Finance Director is also a Member of the Executive
Management Team.
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 pages 180 to 185.
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.
BOARD BALANCE AND INDEPENDENCE
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 154 to 155.
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 and
seeking re-election at the 2022 AGM 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 206 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 3:2 (60%).
Nick Hewson was appointed to the Board in December
2012 and has now served more than a nine-year term as
Director. Notwithstanding this, the Board still considers that
Nick Hewson remains independent and meets all other
criteria outlined in Provision 10 of the Code. Throughout his
tenure, including in the time served since December 2021,
Nick Hewson has carried out his duties objectively and has
provided constructive challenge to the Board. In extending
his appointment, this allowed for a thorough recruitment
process to be undertaken in respect of the new Audit
Chair-Designate, resulting in the appointment of Oliver
Tant, and a smooth handover of this key role. However, in
line with Provision 10 of the Code, Nick Hewson will not be
seeking re-election at the 2022 AGM. There is an ongoing
recruitment process to appoint a new independent
Non-Executive Director. 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.
Male 4
Female 2
M A I N
B OARD BY
GENDER
2022
One to three years
2
Over 3 years
1
LENGTH OF TENURE
OF NON-EXECUTIVE
DIRECTORS
2022
Non Executive 3
Executive 2
COMPOSITION
OF THE BOARD
(EXCLUDING CHAIRMAN)
2022
164 165
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APPOINTMENTS TO EXTERNAL BOARDS
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.
COMMITTEES
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:
• Audit Committee Report – pages 170 to 179;
• Nomination Committee Report – pages 180 to 185;
• Placemaking and Sustainability Committee Report
– pages 186 to 191; and
• Remuneration Committee Report – pages 192 to 213.
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 Nomination and Placemaking and Sustainability
Committees are chaired by Richard Akers, the Audit
Committee is chaired by Nick Hewson and the
Remuneration Committee is chaired by Nicky Dulieu.
Following the retirement of Nick Hewson at the 2022 AGM,
it has been agreed that Oliver Tant will take over the role of
Chair of the Audit Committee.
In addition to the Board, each Committee completed a
performance evaluation during the 2022 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.
APPOINTMENTS AND RE-ELECTIONS TO THE BOARD
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 Nick Hewson who will be
retiring from the Board at the 2022 AGM.
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 2022
Annual General Meeting, save for Nick Hewson who shall
be retiring from the Board at the 2022 AGM.
The Board has satisfied itself that all Directors who will be
submitting themselves for re-election continue to perform
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.
BOARD PERFORMANCE EVALUATION
In line with the Code, each year a formal performance
evaluation of the Board and its Committees is undertaken.
In line with Provision 21 of the Code, this year the
evaluation of the Board and Committees was externally
facilitated by Independent Audit, using Independent Audit’s
online governance assessment service. The Board
engaged Independent Audit in 2019 to assist with the
external facilitation of the evaluation and, having
undertaken a competitive tender process for the services
this year, Independent Audit was engaged again to assist
with the evaluation for 2022. Other than its engagement in
2019 and 2022 for external evaluation services,
Independent Audit has no other connection with the
Company or its Directors.
3. COMPOSITION, SUCCESSION AND EVALUATION
NOMINATION PRACTICES
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 180 of the Nomination
Committee Report, under
heading Responsibilities and
Terms of Reference
Explanation of the
work undertaken by
the Nomination
Committee
See page 181 of the Nomination
Committee Report, under
heading Main Activities During
the Year
Annual
reappointment of
Directors and
reasons why
reappointment is
recommended
See page 165 of the Corporate
Governance Report, under
heading Appointments and
Re-Elections to the Board
See page 183 of the Nomination
Committee Report, under
heading Annual Re-Election of
the Directors
Tenure of Chairman See page 182 of the Corporate
Governance Report, under
sub-heading Non-Executive
Chairman
External search
consultancy and
connection
disclosure
See pages 181 to 182 of the
Nomination Committee Report,
under heading Succession
Planning
Annual evaluation of
Board, Committees
and Directors and
action taken following
results of evaluation
See page 165 of the Corporate
Governance Report, under
heading Board Performance
Evaluation
THE NOMINATION COMMITTEE
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 Richard Akers, having taken over the role
from Nick Hewson on 27 June 2022.
Further details of the role of the Nomination Committee
and work undertaken throughout the year can be found on
pages 180 to 185.
Competitive tender process for a provider to externally review
the effectiveness of the Board and Committees.
Tender proposals from three providers submitted to Board for
consideration at the February Main Board meeting, with the
Board resolving to engage Independent Audit.
Independent Audit observed the April Board meeting to assess
how time is utilised, how information is shared and to understand
the nature of discussions and how the Board and management
work together.
Following the document review, Main Board observation and
collation of the feedback from the assessment questionnaires,
there was a meeting between Independent Audit, the Chairman
and the Company Secretary to discuss the draft report and the
key themes which emerged through the evaluation.
Following the April Main Board meeting, the assessment
questionnaires were circulated to all members of the Board and
Committees, as well as members of the Executive Management
Team and key external advisors.
Independent Audit presented the final report to the Board at the
June Main Board meeting whereby key themes and actionable
next steps were agreed.
Meeting with Independent Audit, the Chairman and the Company
Secretary to agree the scope of the evaluation and the key areas
of focus for the assessment questionnaire taking into
consideration the outputs from the 2021 evaluation and progress
made since. Following this, the questionnaires were tailored
according to the needs of the business.
Independent Audit performed a document review as part of the
evaluation which included a review of all Board and Committee
packs over the previous twelve months.
Process
JANUARY 2022
FEBRUARY 2022
MARCH 2022
MARCH 2022
APRIL 2022
APRIL 2022
JUNE 2022
JUNE 2022
166 167
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Corporate governance report continued
Output
Independent Audit reported that the feedback from the
assessment questionnaires suggested a good level of
satisfaction with how the Board and Committees work, with
this positive picture also nuanced by their observations of
the April Main Board meeting.
The main observations from the evaluation were that:
• Directors feel that the Board works on the basis of trust
and openness which they felt was successful in having
an impact on the Company’s direction and performance;
• the impact of technology and the Board’s oversight of
management’s approach to ESG were thought to be
working well;
• the Board had improved its oversight of the Group’s
culture, which was highlighted as an area for
improvement in previous years;
• there was unanimous agreement that the Board has a
clear picture of the risks and uncertainties and has the
right focus on compliance; and
• meetings were thought to be well chaired and well
managed, with inclusive discussions.
The evaluation also identified the following areas for
improvement, which will continue to be addressed over the
coming year:
• some members of the Board felt that there was scope for
proposals to come to the Board at an earlier stage where
the Board could provide more input prior to finalisation;
• there was a mixed response regarding how the Board is
able to respond to a crisis, with there being scope for an
increased focus on the role of the Board in managing a
crisis and looking for the “unknown-unknowns” that
could impact the Company; and
• there was an indication that the Board papers work for
the most part, however there were some suggestions
that the key messaging could be highlighted more clearly
to ensure the key messaging is not missed in the detail.
Progress from 2021 Evaluation
RECOMMENDATIONS
OF IMPROVEMENT
FROM THE 2021
EVALUATION
ACTION TAKEN
DURING THE 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.
The feedback from the 2022
assessment shows that the
Board feels that its oversight
regarding the Group’s
culture is now working
better. The twice-yearly
engagement sessions
hosted by Nicky Dulieu as
the nominated Non-
Executive Director for
workforce engagement,
along with the regular
reporting to the Board from
the Group HR Director as
part of the overall strategy
of Valuing People, has
helped to ensure that culture
remains a regular review
feature at Main Board level.
There was agreement that
the right people were
brought into the
conversation 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 to
provide the opportunity
for a deeper dive into key
areas.
The Main Board agenda now
includes a ‘Deep Dive’
session as an individual item
whereby members of the
next level senior team are
invited to present to the
Board on an area of their
expertise. This has not only
assisted the Board in
considering areas of the
business in even greater
detail but has also allowed
Boardroom exposure to
those beneath the Executive
Management Team level.
The feedback from the 2022
assessment was that deep
dives into key aspects of the
business is now an area
which the Board is
performing well.
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.
Since Covid-19 restrictions
have eased, the Board have
recommenced meetings in
person and now meet in
person at least four times
per year together with local
management teams for an
overnight dinner which
allows them to spend more
informal time together.
DIVERSITY
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 pages 183 to 184.
In line with Provision 23 of the Code, the gender split of the
Company can be found on page 184 within the Nomination
Committee Report.
4. AUDIT, RISK AND INTERNAL CONTROL
AUDIT, RISK AND CONTROL PRACTICES
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 171 of the Audit
Committee Report, under
heading Responsibilities and
Terms of Reference
Explanation of the
work undertaken by
the Audit Committee
See pages 173 to 174 of the Audit
Committee Report, under
heading Main Activities During
the Year
Risk management
and internal control
systems
See pages 98 to 99 of the
Strategic Report, under heading
Risk Management
Robust assessment of
the Company’s
emerging and
principal risks
See pages 98 to 109 of the
Strategic Report, under heading
Risk Management
Adoption of going
concern basis of
accounting and
assessment of
prospects of the
Company
See page 223 of the Directors’
Report, under heading Going
Concern
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
See pages 224 to 225 of the
Governance Report, under
heading Statement of Directors’
Responsibilities
AUDIT COMMITTEE
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 there is sufficient recent and
relevant financial experience to ensure that the Committee
is able to function effectively with the appropriate degree
of challenge, due to the following:
• Nick Hewson is 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; and
• Oliver Tant is a Chartered Accountant with the Institute of
Chartered Accountants of Scotland and the Institute of
Chartered Accountants in England and Wales and has a
long-standing career in finance where he has held senior
financial positions within KPMG and a FTSE 100
company.
Further details of the role of the Audit Committee and work
undertaken throughout the year can be found on pages 170
to 179.
5. REMUNERATION
REMUNERATION PRACTICES
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
See page 206 of the Directors’
Remuneration Report, under
heading: Single Total Figure
Remuneration Table
Remuneration
consultancy
appointment
See pages 212 to 213 of the
Directors’ Remuneration Report,
under heading: Consideration of
Directors’ Remuneration –
Remuneration Committee and
Advisors
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SUBJECT
PAGE REFERENCE
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 198
See also page 208 of the
Directors’ Remuneration Report,
under heading Shareholding
Guidelines and Share Interests
Discretion to override
formulaic outcomes,
malus and clawback
provisions
See page 194 of the Directors’
Remuneration Report under
sub-heading: Risk
Notice and contract
periods
See page 202 of the Directors’
Remuneration Report, under
sub-heading: Service Contracts
Remuneration policy
setting
See page 194 of the Directors’
Remuneration Report, under
sub-heading: Remuneration
Strategy
Pay ratios See page 210 of the Directors’
Remuneration Report, under
sub-heading: CEO Pay Ratio
Engagement
regarding
remuneration
See page 200 of the Directors’
Remuneration Report, under
sub-heading: Consideration of
Shareholder Views
See pages 160 to 161 of the
Governance Report, under the
sub-heading: Designated
Workforce Non-Executive
Director
REMUNERATION COMMITTEE
The Board has established a Remuneration Committee
comprising all three independent Non-Executive Directors
and the Non-Executive Chairman.
Nicky Dulieu is currently the Chair of the Remuneration
Committee. She has significant remuneration experience
and is currently appointed as the Chair of the
Remuneration Committee of Adnams plc. The Board is
therefore 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 192 to 213.
Graham Cope
Company Secretary
13 September 2022
The Oxford lifestyle show home at
Midsummer Meadows, Warwick, Warwickshire
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AUDIT
COMMITTEE
REPORT
INTRODUCTION
I am pleased to present the Audit Committee Report for the
53 weeks ended 3 July 2022, 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 2022, the 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.
COMMITTEE MEMBERSHIP
There are three Members of the Committee, each of whom
are independent Non-Executive Directors, with myself, the
Senior Independent Director, being Chair of the
Committee. The other Members of the Committee during
the 2022 financial year were Nicky Dulieu, Oliver Tant and
Sir Michael Lyons. Sir Michael Lyons stepped down as a
Member of the Committee on 12 November 2021 when he
retired from the Board. Oliver Tant joined as a Member of
the Committee and as Audit Committee Chair-Designate on
1 February 2022 following his appointment to the Board. In
line with Provision 24, the Chair of the Board is not a
Member of the Committee.
As outlined further in the Nomination Committee Report on
page 182, I have now completed a nine-year term as a
Non-Executive Director of the Company and, in line with
Provision 10 of the Code, I will be stepping down as a
Director at the 2022 AGM and will not be seeking re-
election. Oliver Tant joined the Board as Audit Committee
Chair-Designate in February 2022 and it has been agreed
that he shall take over the role of Chair of the Committee
following the 2022 AGM.
The Committee met three times during the year and details
of the meeting attendance can be seen in the table below.
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 53
weeks ended 3 July 2022 financial statements.
A summary of the principal activities of the Committee is
provided below.
RESPONSIBILITIES AND TERMS OF REFERENCE
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;
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:
• as Chair of the Committee, I 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
• Oliver Tant is a Chartered Accountant with the Institute of
Chartered Accountants of Scotland and the Institute of
Chartered Accountants in England and Wales and has a
long-standing career in finance where he has held senior
financial positions within KPMG LLP and a FTSE 100
company.
The qualifications, skills and experience of each
Committee Member can be found on pages 154 to 155.
COMMITTEE MEETINGS
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), the
Non-Executive Chairman and KPMG LLP as the external
auditor.
• 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;
• 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).
TABLE OF ATTENDANCE
NAME ROLE ATTENDANCE AT MEETINGS
Nick Hewson
†
Chair 3/3
Nicky Dulieu
†
Member 3/3
Oliver Tant
1
†
Member 2/2
Sir Michael Lyons
2
†
Member 1/1
1 Oliver Tant was appointed as a Non-Executive Director on 1 February 2022 and joined as a Member of the Committee at the same time. He attended all
meetings held from his appointment date to the end of the 2022 financial year.
2. Sir Michael Lyons stepped down from the Board and as a Member of the Committee on 12 November 2021. He attended the one meeting held from the
beginning of the 2022 financial year to the date he left the Board.
† Member considered to be independent. Throughout the 2022 financial year the Committee was made up of 100% independent Members.
“The Committee provides independent
challenge of the Group’s risk management
systems and financial reporting and
scrutinises the robustness of the internal
control framework.”
NICK HEWSON
Chair of the Audit
Committee
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AUDIT COMMITTEE REPORTING ON SIGNIFICANT ISSUES
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:
AREA OF FOCUS CONSIDERATIONS
Fire safety provision The Committee reviewed management’s assessments of the costs associated with meeting
the Building Safety pledge which the Company signed up to in April 2022. In signing up to the
pledge the Company has agreed to fund the remediation of life critical fire safety issues on all
buildings over 11 metres in which they were involved, whether or not the buildings were
constructed by the Group, going back 30 years. An additional £164m legacy fire safety
provision was created and charged to cost of sales in April 2022 in respect of the buildings
the Group has agreed to remediate solely as a result of signing the voluntary Building
Safety pledge.
The Committee reviewed management’s accounting assessment to understand the nature of
the remediation costs, judgements on the probability and timing of the outflow and sensitivities
around any estimations.
The Committee also reviewed the Key Process Improvements implemented during the year
with regard to fire safety issues, which included: the formal minuting of all Fire Safety
Committee meetings; and weekly fire safety operational meetings being held chaired by a
Regional Chief Executive.
Valuation of inventory The Committee receives a report prepared by management at each reporting date outlining
the approach taken by management to assess the net realisable value of inventories and cost
of sales, with details of developments with significant areas of judgement and any forward land
against which provisions have been made.
Defined benefit
pension scheme
valuation
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 consolidated balance sheet included
a £39m retirement benefit surplus at 3 July 2022 (27 June 2021: £40m).
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 and challenges of the external auditors; 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.
DATE ACTIVITY
September 2021 • A review of the full year 2021 results, including the Annual Report;
• 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 and discussion of the external auditors’ report;
• A review of the related third party transactions;
• A review of the latest Business Performance Reviews;
• A review of the latest Post Completion Reports;
• A review of the compliance with the Anti-Bribery Policy;
• An update on cyber security, including an update on compliance with the General Data
Protection Regulation 2018 (“GDPR”);
• A recommendation to the Board to approve the 2021 Annual Report following a review of the
full and clean audit opinion from the external auditors; and
• A recommendation to the Board for it to recommend a Final Dividend of 18.5p, subject to
shareholder approval.
February 2022 • A review of the 2022 half-yearly accounts;
• Consideration of the key accounting judgement areas, viability and going concern;
• A review of the fire safety provision and discussion regarding the correspondence from the
Department for Levelling Up, Housing and Communities;
• Discussion of accounting policies to be applied for the 2022 financial year;
• A review of the proposed external audit strategy for 2022 and associated fees;
• An update on the work being undertaken in respect of reporting against Task Force on
Climate-Related Financial Disclosures (“TCFD”) for 2022;
• Discussion regarding the development of a new control to further manage risks relating to
the accuracy of infrastructure and development accruals;
• A review of the Risk Register;
• A review of the latest Business Performance Reviews;
• A review of the Cross Divisional Testing programme;
• A review of the latest Post Completion Reports;
• A further update on compliance with GDPR;
• A review of the compliance with the Anti-Bribery Policy and the Gifts and Hospitality Policy;
• A further update on cyber security;
• A review and approval of the Terms of Reference of the Committee; and
• A recommendation to the Board to approve the 2022 half-yearly accounts.
MAIN ACTIVITIES DURING THE YEAR
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:
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DATE ACTIVITY
June 2022 • Discussion regarding the general update from the Assurance Team;
• A review of the Risk Register;
• An update and discussion on internal audit and its strategy;
• A review of the internal controls across the whole business;
• A review of the Business Performance Review programme;
• An update on the Key Process Improvements implemented during the year, which in
respect of the fire safety provision included the formal minuting of meetings of the Fire
Safety Committee and weekly fire safety operational meetings chaired by a Regional
Chief Executive;
• 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 latest Business Performance Reviews;
• A review of the Cross Divisional Testing programme;
• A review of the latest Post Completion Reports;
• A review of the Health, Safety and Environmental (“HS&E”) Assurance Inspections;
• An update on the work undertaken in respect of managing the risks and opportunities
brought by climate change through compliance with TCFD;
• An update and discussion on the external audit and fees;
• A further update on cyber security;
• An update on insurance cover renewal for the Group;
• A further update on compliance with GDPR;
• A review of the whistleblowing report;
• A review and approval of the Group’s updated Anti-Bribery Policy, Receipt of Gifts &
Hospitality Policy, Anti-Facilitation of Tax Evasion Policy and Whistleblowing Policy;
• Presentation of report regarding the Committee’s self-evaluation and a discussion on its
effectiveness; and
• A review of the independence and objectivity of the external auditors.
September 2022 • A review of the full year 2022 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 Reviews;
• A review of the compliance with the Anti-Bribery Policy;
• An update on cyber security; and
• A review of the effectiveness of the external audit process.
GOING CONCERN
Management conducts a detailed going concern review
twice per year, 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 also challenged the various risks associated
with the war in Ukraine, disruption in the energy and fuel
market, increasing inflation, increased economic
uncertainty, increasing rates of unemployment and the
impact of consumer confidence levels 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 13 September 2022.
The Committee therefore considers that it is appropriate to
continue to adopt a going concern basis in the preparation
of the financial statements.
The assessment of going concern is included in the Basis
of Preparation section of Accounting Policies on page 242.
EXTERNAL AUDITORS
Following the last 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 2022 Annual General Meeting, with 99.79 % of votes
cast in favour of reappointment.
Nick Plumb has been the Audit Partner since the financial
year commencing 1 July 2019 and for the financial year
ending 2 July 2023 will be replaced by Ailsa Griffin as part
of the planned cycle of audit partner rotation.
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.
There were no non-audit services provided by the external
auditors during the 2022 financial year. Details of fees paid
to KPMG LLP for audit are disclosed on page 252.
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 and Markets Authority’s 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
three 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 Committee is aware of
the requirement for the Audit Partner of the external
auditor to be rotated at least every five years. Nick
Plumb has been the Audit Partner since the financial year
commencing 1 July 2019 and for the financial year ending
2 July 2023 will be replaced by Ailsa Griffin as part of the
planned cycle of audit partner rotation. The Committee is
satisfied that the independence of the external auditors
and the Audit Partner has not been impaired.
• Connection of the audit firm to the Members of the
Committee – Oliver Tant, who was appointed to the
Board and as a Member of the Committee on 1 February
2022, worked for KPMG LLP from 1982 until 2013. The
Committee is satisfied that the roles held by Oliver Tant
within KPMG LLP do not impair the independence of the
external auditors as it has been almost ten years since
Oliver Tant left KPMG LLP. KPMG LLP otherwise has no
connection to any Member of the Committee or the
Board; and
• Level of non-audit services provided to the Company –
there were no non-audit services provided by the
external auditors during the 2022 financial year therefore
independence was in no way compromised.
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.
In assessing the effectiveness of the external auditors, the
Committee had regard to the challenge posed by the
external auditors of key management judgements. During
the audit for the 2022 financial year, the external auditor
put in place a number of additional challenge mechanisms
to mitigate the risks associated with the following:
• Fire safety provision – recognising that there is a degree
of estimation uncertainty of the provision required due to
the potential range of reasonable outcomes.
• Management override of controls – recognising that
there is a fraud risk from management’s ability to
override of controls that otherwise appear to be
operating effectively.
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• Infrastructure and development contingency accruals
– recognising there is a risk relating to the accuracy of
infrastructure and development costs in calculating such
contingencies.
• Valuation of inventory – recognising there is a risk
relating to the calculation of the net realisable value of
inventories and cost of sales.
During the year, Members of the Committee as well as
regular attendees participated in a rigorous evaluation of
the external auditors. This involved the completion of a
tailored assessment framework against which the external
auditors were scored with comments supporting the
scoring captured on the questionnaire. The assessment
framework allows 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 2022 Annual General Meeting.
The Committee confirms that there were no contractual
obligations that acted to restrict the Committee’s choice of
external auditor and that the recommendation is free from
influence by any third party.
INTERNAL CONTROLS
The Board recognises its overall responsibility for the
Group’s system of internal control and for monitoring its
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.
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
• 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 3 July 2022. 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 242 to 248.
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.
Towards the end of the year, the Committee were informed
about a failure to comply with the Group’s policies and
procedures in one of the Divisions.The Committee has
reviewed the results of the subsequent investigation which
established that, on certain developments, the Division had
not correctly accounted for the latest estimates of
development profit, including the omission of incurred cost
overruns.Whilst the investigation has established that no
adjustment was required to the Group financial statements,
the Committee is satisfied that the actions taken, including
the suspension of certain members of the divisional
management team, are appropriate to ensure that this
matter has been addressed.
With the exception of this matter, which the Committee
considers has been satisfactorily addressed, the
Committee confirms that it is satisfied that the system of
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 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. Main Board approval
is required should the land value threshold reach a
certain level;
• 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
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. The statement is designed to provide
assurance that Group policies and procedures are being
implemented and complied with in all material respects;
controls has been in operation throughout the financial
year and up to the date of this report.
RISK REGISTER
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 or Regional 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 at least twice per year.
INSURANCE
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.
RISK MANAGEMENT AND INTERNAL AUDIT
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:
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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. 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 as well
as detailed reports 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 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.
Development
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 Development 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.
The Committee is provided with regular updates on changes made to the current policies and
procedures 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.
Gift Register
Reporting
In line with the Anti-Bribery and Corruption policy and Receipt of 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. The purpose of this is to guide
them to the expected behaviours in line with the policy. The Gift Register Reports are provided to
the Committee twice yearly and are discussed at the meeting.
HS&E
Assurance
Inspections
HS&E Assurance Inspections are undertaken by the Health, Safety and Environmental Department
across all operational construction sites on a minimum frequency of one every two months. The aim
of such inspections is to identify compliant and non-compliant sites in respect of both the safety of
activities by the Group’s subcontractors and the correct application of the Group’s HS&E
Management System. The scores are then benchmarked against the internal level of compliance
deemed satisfactory and reported to the Committee.
Cyber Security
Penetration
Testing
Penetration tests are undertaken on the Group’s cyber security systems at least twice per year and
the Group also commissions third party system penetration testing. The results of these penetration
tests are then reported at functional and Executive Management Team meetings, as well as being
reported through the Audit Committee by the Chief Information Officer.
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.
BRIBERY ACT
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 178 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.
THE CRIMINAL FINANCES ACT
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 minor changes made to the policy during the year.
PERFORMANCE EVALUATION
In line with Provision 21 of the Code, this year the
evaluation of the Committee was externally-facilitated by
Independent Audit Limited (“Independent Audit”), using
Independent Audit’s online governance assessment
service. Independent Audit also reviewed the Committee
packs over the previous twelve months to assist them in
their evaluation. All 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 Committee assessment
questionnaire, which was tailored to the needs of the
business following a meeting between Independent Audit,
the Non-Executive Chairman and the Company Secretary,
an anonymised effectiveness report was compiled and
presented to the Members of the Committee.
The evaluation found that the Committee was discharging
its responsibilities well, particularly around the reporting
environment, risk assessments, clarity over the risk
management environment and internal audit. It was agreed
that the Committee provides the right challenge, level of
discussion and debate at meetings and has a good level of
support. The meetings were found to be well-chaired with
the right mix of people involved in the discussion.
An area noted for improvement was to ensure that the
appropriate balance was struck between having sufficient
detail without spending too much time delving into
operation detail which could potentially veer into executive
remits. This shall remain an area of focus for the Committee
with it striving to strike the right balance in this regard over
the coming year.
Having discussed the findings of the evaluation, the
Committee was found to be effective, concluding that it
had fulfilled its remit and had in place appropriate Terms of
Reference.
COMPLIANCE STATEMENT
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 53 weeks ended 3 July 2022.
Nick Hewson
Chair of the Audit Committee
13 September 2022
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Nomination committee report
NOMINATION
COMMITTEE
REPORT
INTRODUCTION
I am pleased to present the Nomination Committee Report
for the 53 weeks ended 3 July 2022. This report has been
prepared in accordance with the requirements of the UK
Corporate Governance Code 2018 (the “Code”).
During 2022, the Committee 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.
Since publication of the previous Annual Report, I stepped
up to the position of Non-Executive Chairman on 15
September 2021 following a period of handover from John
Tutte. In readiness for Nick Hewson stepping down at the
2022 AGM, I took over the role as Chair to the Committee
with effect from 27 June 2022.
On 1 February 2022, we welcomed Oliver Tant as Audit
Chair-Designate and independent Non-Executive Director.
Oliver also joined as a Member of the Audit, Nomination
and Remuneration Committees on the same date. We are
delighted that Oliver Tant has joined us as he brings strong
financial and audit experience as well as broader
commercial and operational expertise that will add
considerable value to the Board.
On 12 November 2021, Sir Michael Lyons stepped down
from the Board as Non-Executive Director to concentrate
on other responsibilities. As explained further on page 182,
a recruitment process has commenced for the search for a
new independent Non-Executive Director to join the Board.
COMMITTEE MEMBERSHIP AND MEETINGS
In addition to myself, there are three other Members of the
Committee, each of whom is an independent Non-
Executive Director. The other Members of the Committee
during the 2022 financial year were Nick Hewson, Nicky
Dulieu, Oliver Tant and Sir Michael Lyons. The Company
Secretary acts as Secretary to the Committee.
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).
As stated in my introduction above, Oliver Tant joined as a
Member of the Board and the Committee on 1 February
2022 and Sir Michael Lyons stepped down as a Member of
the Committee on 12 November 2021 when he retired from
the Board.
The biographies of the Members of the Committee can be
found at pages 154 and 155.
The Committee met formally four times during the 53
weeks ended 3 July 2022, with additional informal
meetings being held to aid the recruitment process of
Oliver Tant as further outlined on page 182.
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 opposite.
RESPONSIBILITIES AND TERMS OF REFERENCE
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,
MAIN ACTIVITIES DURING THE YEAR
During the 2022 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;
• 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 Director
to also act as Audit Committee Chair-Designate until
assuming the Audit Committee Chair role following the
retirement of Nick Hewson, resulting in the appointment
of Oliver Tant;
• 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 Nick Hewson who will be retiring from the Board
at the 2022 AGM, stand for re-election at the 2022
Annual General Meeting in accordance with the Code;
• the engagement of an external recruitment agency to
commence the search for a new independent Non-
Executive Director to join the Board; 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.
SUCCESSION PLANNING
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
TABLE OF ATTENDANCE
NAME ROLE ATTENDANCE AT MEETINGS
Richard Akers † Chair 4/4
Nick Hewson
† Member 4/4
Nicky Dulieu
† Member 4/4
Oliver Tant
1
† Member 1/1
Sir Michael Lyons
2
† Member 1/1
1 Oliver Tant was appointed as a Member of the Committee on 1 February 2022 and attended the meeting held between his appointment date and the end of the
2022 financial year.
2 Sir Michael Lyons stepped down from the Board on 12 November 2021 and attended the meeting held between the beginning of the 2021 financial year and his
retirement.
† Member considered to be independent. Throughout the 2022 financial year the Committee was made up of 100% independent members.
“Ensuring that the Board has the right
balance of experience, knowledge, skills
and background is a fundamental role of
the Committee to ensure that it is able to
successfully deliver the long-term strategy
of the Company”.
RICHARD AKERS
Chair of the Nomination
Committee
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Nomination committee report continued
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.
The Committee maintains an active succession plan matrix
that identifies key individuals within the business as having
potential to progress to the Board and/or Executive
Management Team. The succession plan matrix is reviewed
on an ongoing basis and is approved by the Board at least
every six months. A development plan has been 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
I was appointed to the Board as independent Non-
Executive Director and Chair-Designate on 1 June 2020.
On 15 September 2021, I took over the role as Non-
Executive Chairman following the retirement of John Tutte.
From the date I joined the Board, I worked closely with
John Tutte in a period of handover to ensure that there was
a smooth transition to the change in roles.
I have significant industry and commercial experience
gained over a long career and have also gained valuable
experience as a Non-Executive Director through various
roles in other companies.
My recruitment aligned with the Board’s appetite for a more
conventional Board structure whereby there was a Non-
Executive Chairman that was also considered independent.
Historically, the Chairman of the Company was also the
founder of Redrow. Following this, the role was taken over
by the former Group Chief Executive as part of a transition
to a more conventional Board structure. The Board
believes that each Chairman appointment made was in the
best interests of the Company at the time and now
welcomes the structure of a Board chaired by an
independent Non-Executive Chairman.
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.
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.
ANNUAL RE-ELECTION OF THE DIRECTORS
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 3:2 (60%).
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
duties under section 172 of the Companies Act 2006;
• the skills, knowledge and experience of the Directors,
taking into consideration the requirements of the
Company, including the individual contributions as
follows:
• I have a strong background in property and land
acquisition and contribute extensive industry
experience to the Board;
• Matthew Pratt has 25 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;
• Nick Hewson contributed strong commercial, financial
and operational knowledge to the Board;
• Nicky Dulieu contributes extensive retailing,
customer service and remuneration experience to
the Board; and
• Oliver Tant brings strong financial and audit
experience as well as broader commercial and
operational expertise to the Board.
• the time dedicated by the Directors to the Company in
order to properly discharge their responsibilities; and
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,
taking into consideration the circumstances likely to impair
independence outlined in Provision 10 of the Code. The
Committee acknowledged that Nick Hewson has now
served a nine year term as a Non-Executive Director and
therefore commenced a recruitment process last year for a
replacement Non-Executive Director, resulting in the
appointment of Oliver Tant.
Recruitment of Oliver Tant
In September 2021, the Committee agreed to tender for
recruitment services for an additional Non-Executive
Director to join the Board. A role specification was put
together and the Committee considered that a person with
recent and substantial financial experience within a listed
business would be a good fit for the Board and would
ideally join the Board as Audit Committee Chair-Designate
in readiness for taking over the role from Nick Hewson
prior to his retirement at the 2022 AGM.
Following this, executive recruitment firms were invited to
submit tender proposals in respect of assisting the
Company with this search. Following receipt of their
proposals, Odgers Berndtson were formally engaged for
such services and commenced a search in line with the
brief provided by the Committee. At the time of
engagement, Odgers Berndtsons had no connection to the
Company or any of the individual directors of the Company.
The Committee were provided with a longlist of candidates
from which it developed a shortlist for interviews. Each
Member of the Committee, along with the Executive
Directors, met with all shortlisted candidates. The
Committee held a debrief following the conclusion of all
interviews and meetings and made the recommendation to
the Board that Oliver Tant be appointed. The Board
accepted the recommendation of the Committee and
formally approved the appointment, following which an
announcement was made to investors and Oliver Tant
joined the Board on 1 February 2022.
Recruitment of additional Non-Executive Director
The exercise in determining the right balance for the Board
also resulted in the Committee commencing a search for an
additional Non-Executive Director to join the Board and
has again engaged Odgers Berndtson as the recruitment
consultants to assist with this process. Other than its
engagement for the appointment of Oliver Tant, Odgers
Berndtson has no connection to the Company or any of the
individual directors of the Company.
A candidate brief has been prepared and the Board
has expressed the value that it believes a diverse
Non-Executive Director can bring to the Board. This
has been factored into the candidate brief and will
therefore be given the appropriate weight during the
recruitment process.
• the fulfilment of the independence criteria, as outlined
in Provision 10 of the Code, for the independent
Non-Executive Directors seeking re-election at the
2022 AGM.
As such, the Committee has recommended that the Board
propose the re-election of all Directors at the 2022 AGM,
save for Nick Hewson who will be retiring from the Board at
the 2022 AGM.
DIVERSITY
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 at
Board level 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.
With Equality, Diversity and Inclusion (“ED&I”) being an
increasingly important consideration for shareholders and
given its positive impact on business performance, the
Remuneration Committee considered that it was an
important input measure to progress going forward as part
of the annual bonus. As further explained on page 204, it
was agreed that for the 2023 financial year bonus, 5%
would be based on management actions relating to
increasing diversity.
Details of the Group’s ED&I Policy can be seen on page
220.
Gender diversity
The Committee continues to note the target of 33% female
representation on boards outlined in the FTSE Women
Leaders review. It further notes the future mandatory
reporting requirement that has been introduced by the FCA
(which shall be applicable for the Company’s 2023 Annual
Report) regarding the meeting of the target that females
hold at least 40% of seats on boards and at least one of the
senior board positions (Chair, Chief Executive Officer,
Senior Independent Director or Chief Financial Officer) be
held by a female.
The current female representation on the Board is 33%
(ratio of 2:4), thereby falling in line with the FTSE Women
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Nomination committee report continued
Leaders review target. Whilst the Board acknowledges that
this representation falls short of the revised Listing Rule
target in terms of percentage representation, the role of
Group Finance Director, being a senior board position, is
occupied by a female.
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:
FEMALE MALE
Main Board 2 (33.33%) 4 (66.67%)
Executive Management
Team
3 (33.33%) 6 (66.67%)
Direct reports to
Executive Management
Team
10 (28.57%) 25 (71.43%)
Redrow employees at
3 July 2022
765 (34.17%) 1,474 (65.83%)
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 ethnically diverse
people 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. It further notes the future mandatory reporting
requirement that has been introduced by the FCA (which
shall be applicable for the Company’s 2023 Annual Report)
regarding the meeting of the target that at least one
member of the Board be from a non-white minority ethnic
background.
The Committee acknowledges that at present, the Board
comprises six Directors that are not from a minority ethnic
group. Given the value placed on diversity by the Company
and its focus on progressing the ED&I agenda, the
Committee will ensure that the appropriate weight is
placed on ethnic diversity as part of the selection process
when recruiting future Directors. This is evidenced in the
latest candidate brief prepared for the ongoing recruitment
process of an additional Non-Executive Director which has
factored in the Board’s desire for a diverse Non-Executive
Director, recognising the value that the Board believes
such a candidate can bring to the Board.
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 pages 80 to 82
and 220.
PERFORMANCE EVALUATION
In line with Provision 21 of the Code, this year the
evaluation of the Committee was externally-facilitated by
Independent Audit Limited (“Independent Audit”), using
Independent Audit’s online governance assessment
service. Independent Audit also reviewed the Committee
packs over the previous twelve months to assist them in
their evaluation. All Members of the Committee were
invited to participate in the evaluation.
Following completion of the Committee assessment
questionnaire, which was tailored to the needs of the
business following a meeting between Independent Audit,
the Non-Executive Chairman and the Company Secretary,
an anonymised effectiveness report was compiled and
presented to the Members of the Committee.
The evaluation found that the Committee was discharging
its responsibilities well, particularly around the way it
approaches thinking through the core skills needed on the
Board, being able to articulate what the Board needs and
making sound assessments. Succession planning remains
an active area for ongoing development and the evaluation
highlighted that further consideration could be given to the
future pipeline, therefore delving deeper than the level
beneath the Executive Management Team.
Having discussed the findings of the evaluation, the
Committee was found to be effective, concluding that it
had fulfilled its remit and had in place appropriate Terms
of Reference.
Richard Akers
Chair of the Nomination Committee
13 September 2022
The Stratford show home at Ash Holt,
Newton Garden Village, Nottinghamshire
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Placemaking and sustainability committee report
INTRODUCTION
I am pleased to present the Placemaking and Sustainability
Committee Report for the 53 weeks ended 3 July 2022.
During 2022, the Committee maintained its focus on
monitoring the Company’s approach to placemaking and
sustainability and impact of the Company’s operations on
the environment, its communities and its colleagues.
Climate change
Climate change remains a matter that is high on both the
Board’s and the Committee’s agenda and it remained a
focus for this Committee during the 2022 financial year.
Task Force on Climate-Related Financial Disclosure
(“TCFD”)
The Committee oversaw the work undertaken by the
Company in respect of the increased reporting aligned with
the TCFD. The Company has voluntarily reported against
the TCFD framework for the past two years and, in line with
it becoming a mandatory reporting requirement for the
Company this year, a working group was set up to further
enhance the Group’s focus in the area.
An independent consultancy firm was engaged as an
advisor to the Company to help steer the project and offer
expert guidance. As part of the project, risks and
opportunities around climate change were identified,
quantified and prioritised. Scenario analysis was then
undertaken on three agreed climate scenarios over the
short, medium and long term which allowed the Company
to consider the ‘what ifs’ in relation to climate. The
Company’s latest TCFD report can be found on pages 112
to 125.
Net Zero Carbon Commitment – Near Term Science
Based Target Setting
The Committee also oversaw the setting and submission
for verification of the near term SBTi commitments which
saw the Group commit to a 1.5˚C reduction for Scopes 1 and
2 by 2030 and a well-below 2˚C reduction commitment for
Scope 3 by 2030. Further information relating to the SBTi
targeting setting can be found on pages 61 to 63.
Governance for sustainability
The Company maintains effective governance structures
across the Group, including for the sustainability strategy
to ensure that initiatives, objectives and targets are
reviewed and approved at the appropriate levels within the
organisation. During the year, an organogram reflecting the
governance structure for sustainability was approved by
the Committee to display the Company’s current practices
and to provide clear transparency of the structure of
responsibility across the Group. This can be found on
page 191.
Materiality review
During the year, the Committee oversaw a stakeholder
engagement and materiality review project which sought to
test the Group’s approach to Environmental, Social and
Governance (“ESG”) issues and wider material issues. The
output from the project was then used to inform and
determine the continuing suitability of the current
sustainability and ESG business strategy. Further
information relating to the materiality review can be found
on pages 28 to 29.
COMMITTEE MEMBERSHIP AND MEETINGS
The Members of the Committee during the financial year
comprised myself as Chair of the Committee (having taken
over from Sir Michael Lyons who chaired the Committee
until he stepped down from the Board on 12 November
2021), Nick Hewson, Senior Independent Director, Matthew
Pratt, Group Chief Executive, Karen Jones, Group HR
Director and Rose Sandell, Group Communities Director.
The Company Secretary acts as Secretary to the
Committee.
During the year, membership of the Committee was
reviewed and the decision was taken to move forward with
only members of the Main Board serving as members of
the Committee. As such, Karen Jones and Rose Sandell
stepped down as members of the Committee on 12
November 2021.
Whilst the advice and input from members of the Executive
Management Team was of great benefit to the Committee,
it was determined that such advice could be obtained
through invitation whereby key management personnel
could present and contribute at Committee meetings as
required without extending membership outside of the
Main Board.
The Committee met three times during the 2022 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 below.
RESPONSIBILITIES AND TERMS OF REFERENCE
The key responsibilities of the Committee are:
• to monitor the execution of the strategy approved by the
Board and to make recommendations from time to time
to the Board;
• to review and scrutinise the sustainability targets
proposed by management for recommendation to the
Board;
• to monitor the Company’s strategy on climate change as
set out by the Group Chief Executive (holding ultimate
responsibility for climate-related matters) and the Group
Communities Director;
• to review the performance of the Company in relation to
ESG matters, taking into consideration feedback from
reports received from key research and analytic bodies;
• 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 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 monitor the Company’s approach to placemaking,
including the Group’s adherence to the Redrow 8, being
the placemaking principles for designing sustainable
communities;
• to review in advance of each meeting the Sustainability
team’s update on non-financial ESG performance to
assist 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 monitor the Company’s developments in customer
engagement and service to ensure the Group values are
upheld;
• to investigate any statutory prosecutions or notices in
relation to environmental and community issues and
make recommendations to the Board regarding any
action to be taken;
• to have regard to the Company’s involvement in the
community, and the Company’s policy on charitable
donations and activities;
• to present a brief summary report to the Board, following
each Committee meeting, outlining the pertinent points
that should be given due consideration and respond to
any other report or information requests from the Board
as and when they arise; 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.
TABLE OF ATTENDANCE
NAME ROLE ATTENDANCE AT MEETINGS
Sir Michael Lyons
1
† Chair 1/1
Richard Akers
2
† Chair 2/2
Nick Hewson † Member 3/3
Matthew Pratt Member 3/3
Karen Jones
3
Member 1/1
Rose Sandell
3
Member 1/1
1 Sir Michael Lyons stepped down from the Board on 12 November 2021 and attended the Committee meeting held between the beginning of the 2022 financial
year and the date he stepped down from the Board.
2 Richard Akers took over the role as Chair of the Committee with effect from 12 November 2021 and attended the Committee meetings held between his
appointment date and the end of the 2022 financial year.
3 Karen Jones and Rose Sandell stepped down as members of the Committee on 12 November 2021 and, in their capacity as members, attended the Committee
meeting held between the beginning of the 2022 financial year and the date they stepped down as members. They also attended all other meetings held until
the end of the 2022 financial year as invitees.
† Member considered to be independent. At the end of the 2022 financial year, the Committee was made up of 67% independent Members.
“The Committee monitors the Company’s
placemaking and sustainability framework
(including its approach to ESG matters)
ensuring it is aligned with the three
strategic themes of: Developing Thriving
Communities, Building Responsibly and
Valuing People.”
RICHARD AKERS
Chair of the Placemaking
and Sustainability Committee
PLACEMAKING AND
SUSTAINABILITY
COMMITTEE
REPORT
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Placemaking and sustainability committee report continued
The Committee regularly reviews its Terms of Reference; these were last reviewed in November 2021 and are published
on the Group’s website (redrowplc.co.uk).
MAIN ACTIVITIES DURING THE YEAR
During the 53 weeks ended 3 July 2022, the principal activities of the Committee were as follows:
ACTIVITIES OF THE COMMITTEE RELATING TO THE OVERALL STRATEGY
• Discussed the progress made against the ESG Scorecard targets since publication in the 2021 Annual Report along
with the new measurements and targets for the 2022 Annual Report;
• reviewed the ESG Improvement Plan;
• analysed the latest ESG rating figures;
• received an update on the stakeholder engagement and materiality review;
• reviewed the work undertaken in respect of the increased TCFD-aligned reporting for the 2022 Annual Report and
resulting work stream;
• reviewed the Governance Framework for the Sustainability Strategy, as displayed on page 191; and
• reviewed the progress against the objectives and targets of the Group’s sustainability strategy.
ACTIVITIES OF THE COMMITTEE RELATING TO THE THREE THEMES FORMING THE OVERALL STRATEGY
STRATEGIC THEME RELATED ACTIVITIES OF THE COMMITTEE
• Discussed the implications of the National Model Design Code (“NMDC”) on the
Group and impact of local lobbying regarding the NMDC;
• reviewed the Redrow 8 assessment, audits and awards;
• received an update on the Nature for People strategy;
• discussed the development of a high-level biodiversity net gain assessment tool to be
used internally at the earliest stages of land appraisal;
• discussed the progress of the Environment Bill on biodiversity net gain;
• received an update on the nitrate and phosphates crisis;
• reviewed the Levelling Up and Regeneration Bill published on 10 May 2022;
• received an update on the latest New Homes Podcasts; and
• discussed the promotion of the Company’s placemaking initiatives externally.
ACTIVITIES OF THE COMMITTEE RELATING TO THE THREE THEMES FORMING THE OVERALL STRATEGY
STRATEGIC THEME RELATED ACTIVITIES OF THE COMMITTEE
• Reviewed the Group’s application to join the Business Ambition for 1.5C campaign
with the SBTi;
• reviewed and supported the near term carbon reduction targets for Scope 1 (direct),
Scope 2 (indirect – electricity purchase) and Scope 3 (all other indirect) emissions, in
line with the SBTi’s updated strategic approach;
• received an update on the latest report from The Intergovernmental Panel on
Climate Change;
• reviewed the HBF: The Future Homes Delivery Plan published in July 2021 and its
impact on the Group’s carbon reduction targets and climate change strategy;
• reviewed the overall Health, Safety and Environmental (“HS&E”) performance
including the implementation of the Environmental Management System;
• reviewed the latest Carbon Disclosure Project results;
• discussed the Future Homes Standard 2025 and carbon reduction technologies
being trialled within the Group;
• considered the feedback from the Hydro Treated Vegetable Oil and Air Source Heat
Pump trials;
• reviewed the ‘Reduce the Rubble’ report and approved publication on the Redrow plc
website;
• monitored the HS&E Assurance Inspection scoring, including the Covid-19
Compliance reporting;
• reviewed the approved Group HS&E Strategy;
• reviewed the latest Customer Satisfaction KPIs and strategic projects;
• received an update regarding the Customer Conference held in January 2022;
• discussed the New Homes Ombudsman and registration for the New Homes
Quality Board;
• received an update regarding usage of the Homeowner Support and Complaints
Online platforms;
• discussed Modern Methods of Construction;
• reviewed the reports on zero defects, resource efficiency and waste reduction;
• received an update on the charitable activities of the Group;
• received an update regarding fire safety matters; and
• received an update on responsible sourcing and supply chain.
190 191
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Placemaking and sustainability committee report continued
STRATEGIC THEME RELATED ACTIVITIES OF THE COMMITTEE
• Received an update on the work undertaken to deliver the Redrow 2025 objectives;
• received an update regarding feedback from the 2022 INsight survey, the workforce
engagement sessions chaired by Nicky Dulieu and the divisional Engagement Groups;
• reviewed the programmes relating to talent management;
• reviewed the latest employee engagement initiatives;
• discussed the agile working and collaborative work spaces initiatives;
• discussed the introduction of the new Volunteering Policy;
• received an update on the Group’s Equality, Diversity and Inclusion agenda;
• received an update in respect of learning and development across the Group; and
• discussed the introduction of the Green Academy.
ESG DISCLOSURES
Within this Annual Report, there are a number of key ESG
disclosures relating to the work and scope of the
Committee. These can be found on pages 217 to 223 of the
Directors Report under the heading ‘Environmental, Social
and Governance Disclosures’. This year, the Company has
also commenced reporting against the Sustainability
Accounting Standards Board (“SASB”) Conceptual
Framework. This can be found on pages 126 to 133 of the
Strategic Report.
PERFORMANCE EVALUATION
In line with Provision 21 of the Code, this year the
evaluation of the Committee was externally-facilitated by
Independent Audit Limited (“Independent Audit”), using
Independent Audit’s online governance assessment
service. Independent Audit also reviewed the Committee
packs over the previous twelve months to assist them in
their evaluation. All 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 Committee assessment
questionnaire, which was tailored to the needs of the
business following a meeting between Independent Audit,
the Non-Executive Chairman and the Company Secretary,
an anonymised effectiveness report was compiled and
presented to the Members of the Committee.
The evaluation found that the Committee was making good
progress with all participants feeling that the assessment
of responsibilities to communities and the factoring in of
reputational risk into decision-making was carried out well.
It was also felt that oversight of the placemaking framework
and the Company’s moral, social and health and safety
Richard Akers
Chair of the Placemaking and Sustainability Committee
13 September 2022
responsibilities were well managed. It was noted that there
should be a careful balance of the work undertaken by the
Committee and what is being considered at Main Board
level to ensure there is no disconnect or duplication, with
clarity in this respect being a priority for the coming year.
Having discussed the findings of the evaluation, the
Committee was found to be effective, concluding that it
had fulfilled its remit and had in place appropriate Terms
of Reference.
GOVERNANCE STRUCTURE FOR SUSTAINABILITY
The Group’s sustainability strategy drives long-term value
for its stakeholders and allows the Group to minimise risks
and identify opportunities for growth. The sustainability
strategy is built around the Group’s three pillars: Building
Responsibly, Thriving Communities and Valuing People.
Each of the three pillars have areas of focus that set out
separate objectives and targets relating to the current
strategy. As part of the Group’s drive for continuous
improvement, objectives and targets are monitored and
reviewed against the over-arching business strategy.
There is a strong governance structure in place
surrounding the Group’s sustainability strategy which
ensures that initiatives, objectives and targets are
reviewed and approved at the appropriate levels within the
organisation. The governance structure for sustainability is
displayed opposite:
1. Ultimate responsibility
for sustainability and ESG
matters. Oversightofthe
sustainable business
strategy framework.
2. Delegated authority from
the Board to monitor
the execution of the
sustainability strategy, as
approved by the Board, and
tomake recommendations
from time to time to the
Board.
3. Delegated authority from
the Board to ensure that the
sustainability strategy and
ESG are integrated within
the Business. The Board
sponsor for Sustainability,
being the Group Chief
Executive, also sits on the
EMT and is accountable
to PASC and the Board for
ensuring that the structure is
governed effectively.
4. Meet twice per year. Nicky
Dulieu, as the Designated
NED for Workforce
Engagement, chairs these
meetings and reports to
theBoardonkeyoutcomes.
5. Sponsors are responsible
for overseeing the
delivery of strategic aims
andinitiatives within each
area offocus.
6. Initiative leads are
responsible for the delivery
of initiatives of targetsand
embed related procedures
within the business.
7. Divisions must comply with
procedures and to assist
in delivering initiatives
and targets efficiently
and effectively. Managing
Directors are accountable
to ensure that any outcomes
from the strategy and
initiatives are embedded
withinthe business and
followed.
8. The Sustainability team
administers the structure
and supportsBoard
Sponsor and EMT to deliver
it. Provides strategic advice,
target setting and reporting;
long-term risk andpolicy
management.
9. Working/Steering Groups
are set up based on
the needs and focus
of the business. These
groups are comprised of
subject matter expects
from within the business.
There is a nominated lead
sponsor for each group
who shall report to the
EMT as appropriate. The
groups meet as often as
necessary and exist until
the particular project has
completed or the business
need has been met.
5
6
DIVISIONS
7
WORKFORCE
ENGAGEMENT
GROUP
4
(Chaired by Nicky Dulieu)
VALUING PEOPLE
HUMAN RESOURCES DIRECTOR
THRIVING COMMUNITIES
GROUP COMMUNITIES DIRECTOR
BUILDING RESPONSIBLY
RCE SW
Putting our
customersfirst
Sponsored by
RCE SW
Valuing &
developing
ourpeople &
partners
Sponsored by
Human Resources
Director
Working safely
&considerately
Sponsored by
RCE SW
Creating better
placestolive
Sponsored by
Group Communities
Director
Managing
ourresources
Sponsored by
RCE SW
Inspiring the
next generation
to build
Sponsored
by Human
Resources
Director
Initiatives led by
Group Customer and
Marketing Director
Initiatives led by
Human Resources
Director
Initiatives led by
Group Health Safety
& Environment
Director and Group
Construction
Director
Initiatives
led by Group
Masterplanning
Director and Head of
Sustainability
Initiatives led by
Group Head
of Commercial,
Group Construction
Director and Head
of Sustainability
Initiatives led by
Human Resources
Director
SUSTAINABILITY
TEAM
8
WORKING/
STEERING GROUPS
9
EXECUTIVE
MANAGEMENT TEAM
3
BOARD
1
PASC COMMITTEE
2
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Directors’ remuneration report
DIRECTORS’
REMUNERATION
REPORT
The financial year ended 3 July 2022 was my first full year
as Chair of the Redrow Remuneration Committee, having
become 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 the year. It includes the executive directors’
remuneration outcomes for the 53 weeks ended 3 July
2022 and the context in which pay decisions were made.
• Directors’ Remuneration Policy – Our policy was
approved by shareholders at the 2021 AGM and has a
three-year life. There are no changes proposed to the
approved policy and we have included a copy of the
approved policy in this report.
• Annual Report on Remuneration – This section describes
in further detail the pay outcomes and the proposed
implementation for the 2023 financial year. It also
includes CEO pay ratio reporting and other disclosures
including executives’ shareholdings and historic pay
outcomes.
2021 DIRECTORS’ REMUNERATION POLICY
In 2020 we delayed taking a fundamental review of our
policy and rolled over the policy for a further year before a
more comprehensive review was undertaken last year. At
the November 2021 AGM we were delighted to secure 97%
support from shareholders for the Directors’ Remuneration
Policy. This policy, which has a three year life, retained the
previous remuneration structure which has served us well.
The key changes to the policy were an increase to the
maximum bonus opportunity (albeit with a lower maximum
applying for FY22), bringing forward of workforce pension
alignment for all executive directors to 1 January 2023 and
the introduction of a post cessation shareholding guideline
in line with good and market practice.
In line with Provision 40 of the Code, during the year there
was a section of the second employee engagement
session, led by myself as the designated Non-Executive
Director for workforce engagement, that was dedicated to
engagement regarding the remuneration arrangements of
the Executive Directors. This ensured that such
arrangements remain transparent and provided employees
with the opportunity to provide their feedback relating to
remuneration.
PERFORMANCE OUTCOMES FOR THE YEAR ENDED
3 JULY 2022
The Group delivered a strong trading performance
resulting in underlying profit before tax of £410m returning
to the record levels achieved pre Covid-19 and generating
£128m of cash to end the year with net cash of £288m.
This performance sees the Group exceed our pre-
pandemic record results in 2019.
Demand for our quality new homes remains strong
reflecting the differentiation of our premium homes. The
Group secured £1.82bn of net private reservations in the
period and closed the year with a £1.4bn total order book,
in line with last year.
Our HBF survey 8 week recommend score increased from
92.6% to 94.5%, in excess of our target.
Average active outlets decreased to 111 from 117, broadly in
line with the guidance we issued last year. This decrease
reflects the combination of the strong housing market and
the time required to obtain implementable planning
permissions.
Annual bonus
FY22 was the first year of the three year policy and the
bonus opportunity was set at 125% of salary for executive
directors, which was lower than the approved policy
maximum of 150% of salary.
The bonus scheme was based on 5 metrics – profit before
tax, outlets opened, customer service, health and safety
and an ESG related objective. The strong performance of
the Group contributed to performance exceeding
expectations and has resulted in the bonus targets being
met in full. Further detail of the measures, targets and
performance is set out in the Annual Report on Remuneration.
Half of the annual bonus will be deferred in shares.
In approving the bonus, the Committee considered the
outcome in relation to the wider stakeholder experience
and was comfortable that the bonus outcome was
appropriate based on the strong financial and non-financial
performance across a broader range of factors. In
particular, the Committee considered the Group’s voluntary
pledge towards the remediation of life critical fire safety
issues on buildings Redrow were involved with, going back
30 years. As set out in the Chairman's Statement an
additional provision was taken for fire safety in high rise
buildings during the FY22 financial year and this has been
treated as an exceptional item in the accounts. The
Committee deliberated whether this should have an impact
on the bonus outcome but felt that no adjustment was
required having taken into account the following factors:
• Historically, Redrow has not been a major constructor of
high rise apartments and the majority of these were built
between 2000 and 2010. Our Executive Directors were
not directly involved in decisions relating to the
construction of these buildings. Indeed the vast majority
of these buildings were sub-contracted to reputable
main contractors on a design and build basis.
• Remediation costs relate to a multi-year historic issue
and Redrow has taken full responsibility to remedy this
legacy issue.
• In contrast, the bonus scheme is based on performance
for the financial year ending 3 July 2022. The Group has
delivered exceptional results for FY22 and any
adjustment would, in the Committee’s view, be unfair on
current executives and not reflect their accomplishments
during a difficult post-pandemic year.
• The Committee has taken a prudent approach to
incentive levels with a lower 125% of salary bonus
opportunity applying in FY22, compared against a policy
limit of 150% which is in line with market levels.
• The Board behaved responsibly during the pandemic,
having taken voluntary salary and fee reductions and not
amended targets attached to outstanding incentives. In
this regard, the LTIP awards granted in 2017 and 2018
have lapsed and the 2019 LTIP will only vest in part – see
below. Furthermore, Redrow signed up to the real living
wage in 2020.
LTIP
The EPS and ROCE targets attached to the 2019 LTIP were
set prior to the onset of the pandemic.
As a result the EPS threshold was not met and therefore
this part of the award lapsed. The ROCE measure was
partially achieved and this results in the overall LTIP
vesting at 24.2%.
The Remuneration Committee has not applied any
discretion to amend the bonus and LTIP results. Overall,
the Remuneration Committee believes the outcomes under
the bonus and LTIP are fair and reasonable. The annual
bonus outcome is aligned with another strong set of annual
results and partial vesting under the LTIP reflects the
Group's recovery from the impact of the pandemic.
IMPLEMENTATION OF POLICY IN 2022/23
Base salary
Executive Directors will receive a salary increase of 5%, in
line with the workforce increase applying to all employees.
Annual bonus
For FY23, a bonus maximum in line with the approved policy
of 150% of salary will apply to both executive directors.
Pension provision
The CEO’s pension is workforce aligned at 7% of salary and
the CFO’s pension will reduce from 20% to 7% of salary
from 1 January 2023.
Annual bonus
Bonus measures will remain unchanged with 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 an ESG objective. The actual targets will be
disclosed on a retrospective basis in next year’s report.
Long term incentives
The Remuneration Committee considers the share price at
the time of grant and will assess whether any adjustment is
required to the grant level. At the time of writing the current
share price is below the price at which awards were granted
last year but higher than the 2020 awards grant price. While
the current price is c.20% lower than the share prices at the
time of the awards granted in 2017, 2018 and 2019, the
Committee does not believe this is sufficiently material for
an adjustment to the award level. Furthermore, the
Committee considered the nil and modest vesting over the
last three years and that Redrow’s 150% of salary grant
policy compares modestly against other housebuilders and
comparable FTSE 250 companies.
Historically, LTIP awards have been based half on EPS
targets and half on ROCE. Recognising Redrow’s focus on
sustainability, for FY23, a new climate-related metric will
apply for 10% of the award with EPS and ROCE each
determining 45% of the award. The new environmental
measure will be based on reduction in Scope 1 and Scope
2 greenhouse gas emissions.
I hope that you have found this annual statement
informative and will be supportive of the advisory
remuneration resolution at the upcoming AGM. I am keen
to keep open dialogue with shareholders and if you would
like to provide any feedback, please contact me via the
Company Secretary.
NICKY DULIEU
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
“I am pleased to present the Directors’
Remuneration Report for the 53 weeks
ended 3 July 2022.”
NICKY DULIEU
Chair of the Remuneration
Committee
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Directors’ remuneration report continued
DIRECTORS’ REMUNERATION
POLICY
Policy table for Executive Directors
COMPONENT AND
LINK TO STRATEGY OPERATION MAXIMUM PERFORMANCE FRAMEWORK
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.
Executive Directors’ performance is a
factor considered when determining
salaries.
No recovery or withholding provisions
apply.
This part of the Directors’ Remuneration Report sets out
the 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
Policy was approved by shareholders at the November
2021 Annual General Meeting and has a three year life.
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 pages 200 to 201
• In operating the Policy, the Committee continually
monitors the performance of in-flight incentive awards so
that it is well aware of potential outcomes
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
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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.
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.
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
Pension
To provide a market
competitive element of
fixed remuneration for
retirement planning.
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.
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).
N/A
COMPONENT AND
LINK TO STRATEGY OPERATION MAXIMUM PERFORMANCE FRAMEWORK
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.
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
206.
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.
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COMPONENT AND
LINK TO STRATEGY OPERATION MAXIMUM PERFORMANCE FRAMEWORK
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.
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 207.
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.
COMPONENT AND
LINK TO STRATEGY OPERATION MAXIMUM PERFORMANCE FRAMEWORK
Share Ownership
Guidelines
Encourage Executive
Directors to build a
meaningful shareholding
in the Group so as to
further align their
interests with those of
shareholders.
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 Remuneration
Committee believes this
is appropriate to ensure
executives are not
discouraged from
purchasing Redrow
shares.
N/A
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.
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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.
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
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.
• 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 July 2022 and benefits
included using the disclosed values for the year ended 3
July 2022;
• Target – reflects fixed pay, target bonus (75% of salary)
and LTIP awards vesting at threshold (i.e. 20% of salary);
and
• Maximum – reflects fixed pay, maximum bonus (150% of
salary) and maximum LTIP awards (being 150% of salary
for the CEO and CFO).
• Maximum plus share price growth – as for Maximum
above, but with the value of 50% share price growth
included within the LTIP element.
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.
CEO
CFO
Total Fixed Remuneration
Annual Bonus
LTIP
Share Price Growth
ILLUSTRATIONS OF APPLICATION OF REMUNERATION POLICY (£’000)
23%
27%
54%
100%
31%
36%
36%
37%
31% 15%
25%
29%
100%
30%
35%
36%
9%
30% 15%
MINIMUM
MINIMUM
ON-TARGET
ON-TARGET
MAXIMUM
MAXIMUM
MAXIMUM WITH GROWTH
MAXIMUM WITH GROWTH
£3,195
£1,993
£2,703
£1,692
£1,358
£871
£734
£491
10%
56%
35%
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Directors’ remuneration report continued
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 6 months 12 months
Matthew Pratt 01/07/20 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 01/12/12 01/12/18
Nicky Dulieu Non-Executive 06/11/19 06/11/19
Richard Akers Non-Executive Chairman 01/06/21 01/06/21
Oliver Tant Non-Executive 01/02/22 01/02/22
John Tutte
1
Non-Executive Chairman 06/11/20 N/A
Sir Michael Lyons
2
Non-Executive 06/01/15 N/A
1. John Tutte stepped down after the Company’s 2021 Full Year Results on 15th September 2021, at which time Richard Akers was appointed Non-Executive Chairman.
2. Sir Michael Lyons stepped down from the Board on 12 November 2021
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 OPERATION
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.
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IMPLEMENTATION OF POLICY FOR 2023
This section summarises how the Committee intends to operate the Remuneration Policy for the year ending 30 June
2023.
Salary
All employees of the business including executive directors have received a basic cost of living increase of 5% with
some employees receiving higher increases, where appropriate.
The salaries for 2022 are effective from 1 July 2022 and are as follows:
£’000
1 JULY
2022
1 JULY
2021
%
INCREASE
Barbara Richmond 400.6 381.5 5.0%
Matthew Pratt 656.3 625 5.0%
Pension
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 until 31 December 2022 and 7% of salary from 1 January 2023.
Annual bonus
The annual bonus opportunity for executive directors will be 150% of salary for FY23 in line with the annual bonus policy
limit approved by shareholders last year.
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
continue to be based each on customer service targets and health and safety.
Outlets opened remains an important forward looking metric and will determine 20% of the annual bonus. The final 5%
on ESG will be based on management actions relating to increasing diversity.
MEASURES FOR 2022
Profit Before Tax 50%
Outlets opened 20%
Customer Service 12.5%
Health & Safety 12.5%
ESG (diversity) 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 FY23
Remuneration Report provided the Committee is comfortable they are no longer commercially sensitive at the time.
LTIP awards to be granted during FY23
It is expected that LTIP awards in the 2023 financial year will be made at the level of 150% of salary to Matthew Pratt and
Barbara Richmond.
Historically, LTIP awards have been based half on underlying EPS targets and half on underlying ROCE. Recognising
Redrow’s increased focus on sustainability and investors’ calls for greater linkage between ESG and pay, for FY23, a new
climate-related metric will apply for 10% of the award with underlying EPS and underlying ROCE each determining 45% of
the award. The new environmental measure will be based on reduction in Scope 1 and Scope 2 greenhouse gas
emissions.
The following targets will apply:
EPS
(FOR 2025)
ROCE
(FOR 2025)
ESG – CARBON
REDUCTION
TARGETS
Threshold (13.3% vesting) 82.0 pence 22.0% 15.7%
Target (40% vesting) 90.0 pence 23.0% 18.7%
Maximum (100% vesting) 100.0 pence 25.0% 20.7%
In setting the financial targets, the Remuneration Committee considered the internal plan and market consensus and the
impact of the 4% Residential Property Developer Tax. The maximum targets for EPS and ROCE have been set at levels
which are materially ahead of current external expectations and are appropriately stretching. The Committee retains the
power to adjust the targets to ensure they are no more or less challenging in the event of changes to the corporation tax
rate (or any other tax changes currently not anticipated) for FY25. The impact of the current share buyback programme
on EPS has not been considered. The targets will be adjusted for the impact of the current share buyback programme
once that programme is completed.
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 discretion in the event that land creditors are materially different to the
Company’s guidance.
The Carbon reduction targets have been set in the context of meeting the 1.5 degree SBTi pathway. The reduction
targets (measured as Scope 1 and 2 greenhouse gas emissions) are by reference to a baseline year of 2020/21 (tCO
2
e
16,099) and will be measured using the year ending June 2025.
In line with our Policy, vested awards will be subject to an additional two-year post-vesting holding period.
Non-Executive Director and Chairman fees
The Board excluding the non-executive directors conducted an annual review of non-executive director fees and
awarded a 5% increase from 1 July 2022 meaning the base fee for a Non-Executive Director will increase from £56,375
pa to £59,195 pa. Following a benchmarking exercise, the additional fees for Committee Chairs and the Senior
Independent Director were increased from £10,000 p.a. to £12,000 p.a. from 1 July 2022. The increased fee level reflects
the level of time commitment required in undertaking the role.
Richard Akers became Chairman at the AGM in November 2021 at a fee of £250,000 p.a. The Remuneration Committee
conducted an annual review of this and awarded a 5% increase to £262,500, effective from 1 July 2022.
OUTCOMES IN RESPECT OF 2022
The tables below set out the remuneration for the Directors in respect of 2022. Further discussion of each of the
components is set out on the pages which follow. Where indicated, these disclosures have been audited.
SINGLE TOTAL FIGURE OF REMUNERATION TABLE (AUDITED)
The remuneration of the Executive Directors in respect of 2022 is shown in the table below (with the prior year
comparative)
£’000
SALARY BENEFITS
(iii)
PENSIONS
(IV)
TOTAL FIXED
REMUNERATION BONUS
(v)
LTIP
(vi)
TOTAL VARIABLE
REMUNERATION TOTAL
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Matthew Pratt
(i)
625 540 29 23 44 38 698 601 781 540 130 – 911 540 1,609 1,141
Barbara Richmond 381 370 36 35 76 74 493 479 477 370 117 – 594 370 1,087 849
John Tut te
(ii)
– 169 – 1 – 34 – 204 – – 86 – 86 – 86 204
(i) Matthew Pratt was appointed Group Chief Executive on 1 July 2020.
(ii) John Tutte served as Executive Chairman from 1 April 2019 to 6 November 2020. The disclosure in the above table and footnote are in reference to that period.
He then became Non-Executive Chairman. John Tutte's LTIP award has been pro-rated to reflect the proportion of the performance period he was in an executive
position.
(iii) Benefits include a fully expensed company car (or equivalent cash allowance) and private health insurance.
(iv) Pension includes the value of the cash allowance paid to Matthew Pratt, Barbara Richmond and John Tutte in respect of the relevant year.
(v) 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. See pages 192 and 193 on how the Remuneration Committee determined the level of the annual bonus payment.
(vi) The LTIP award made in September 2018 lapsed as the performance measures were not met. The 2022 column includes the value of the 24.2% of the 2019 LTIP
which will vest on 11 September 2022, using the average share price over the last three months of FY22. The remaining 75.8% will lapse on that date. None of the
value of the vested award is attributable to share price appreciation over the period based on an estimated vesting share price using the average share price over
the last three months of FY22. No discretion was applied by the Remuneration Committee to amend the vesting outcome.
ANNUAL REPORT
ON REMUNERATION
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The remuneration of the Non-Executive Directors in respect of 2022 are shown in the table below (with the prior year
comparative).
£’000
FEES
2022 2021
Richard Akers
(i)
210 5
Nick Hewson 76 75
Nicky Dulieu 66 62
Oliver Tant
(ii)
23 –
John Tutte
(iii)
63 196
Sir Michael Lyons
(iv)
24 65
Vanda Murray
(v)
– 23
(i) Richard Akers joined the Board as a Non-Executive Director on 1 June 2021 and became Non-Executive Chairman on 15 September 2021.
(ii) Oliver Tant joined the Board as a Non-Executive Director on 1 February 2022,
(iii) John Tutte served as Non-Executive Chairman from 6 November 2020 to 15 September 2021. The disclosure in the above table and footnote are in reference to that
period.
(iv) Sir Michael Lyons stepped down from the Board as a Non-Executive Director on 12 November 2021.
(v) Vanda Murray stepped down from the Board on 6 November 2020.
2022 ANNUAL BONUS
The maximum bonus opportunity for the Executive Directors in 2022 was 125% of salary. This was based on the
achievement of stretching targets under a balanced scorecard of performance measures. The bonus measures and
targets were set during 2021 as the business was recovering from the impact of the pandemic and reflected the
challenging environment and uncertainty in place at the time. The following measures and targets applied:
% of bonus
opportunity Threshold payout Maximum payout
Actual 2022
performance
Payout achieved (% of
total bonus
opportunity)
PBT
(i)
50.0% £345m £390m £410m 50.0%
Number of outlets opened 20.0% 32 37 37 20.0%
Customer recommend score 12.5% 92% 94% 94.5% 12.5%
Accident rate (homes built/
accident) 12.5% 18 20 25.5 12.5%
ESG 5.0%
Develop and implement
ESG scorecard
Objectives
achieved 5.0%
Total 100% 100%
(i) PBT is underlying, pre-exceptionals
The Group returned to pre-pandemic underlying profit levels with a before tax of £410m (pre-exceptional items) which
was ahead of the stretch target. We opened 37 outlets in 2022 which was in line with the maximum target. Similarly,
strong performance against customer satisfaction and health and safety resulted in the bonus targets being met in full.
On the ESG component the Executive have successfully worked with the team to set science based near term (2030)
carbon reduction targets. The targets for Scope 1 and 2 reductions by 2025 will form part of the LTIP moving forward.
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 paid in cash and the other 50% will be deferred in shares which will vest
after 12 and 24 months.
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 2019 LTIP awards which were capable of vesting in 2022 and those awards
which were granted during the 2022 financial year.
LTIP awards vesting in respect of 2022
The LTIP awards granted in September 2019 were based on performance over the three year performance period ending
3 July 2022. Based on performance against the EPS and ROCE targets set when the award was granted, summarised in
the table following, the EPS measure was not met and the ROCE measure was met in part.
AWARD VESTING LEVEL AS A % OF SHARE OPTIONS GRANTED (FOR EACH COMPONENT) EPS FOR 2022 ROCE FOR 2022
Nil Below 105.0p Below 23.4%
6.67% 105.0p 23.4%
20% 110.0p 24.4%
50% 115.0p or above 25.4% or above
Vesting between the points above is on a sliding scale basis
Actual performance 95.6p 24.54%
Vesting (% of total award) 0% 24.2%
The original EPS targets as set out in the above table were amended to 98.96p (threshold), 103.47p (target) and 108.17p
(maximum) to take account of the increase in corporation tax and the introduction of RPDT which were not known at the
time the targets were set. These adjustments ensured the participant was in no better or worse position.
The EPS targets were not met and there is partial vesting under the ROCE measure. This results in 24.2% of the total
award vesting. The value of the vested award is estimated and included in the 2022 LTIP column of the Single Total
Figure of Remuneration table on page 205.
SCHEME INTERESTS AWARDED DURING 2022 (AUDITED)
The following table sets out details of LTIP awards to Executive Directors on 21 September 2021.
EXECUTIVE DIRECTOR
NUMBER OF
AWARDS
GRANTED BASIS OF AWARD
FACE
VALUE
1
THRESHOLD
VESTING (% OF
MAXIMUM) VESTING DATE
Matthew Pratt 131,192 150% of salary £937k 13.3% 21 September 2024
Barbara Richmond 80,080 150% of salary £572k 13.3% 21 September 2024
(i) The face value has been calculated using the average share price used to determine the number of shares awarded, being 714.6p (the average share price over the
three days prior to the date of grant).
Awards to Matthew Pratt and Barbara Richmond were made in the form of nil-cost options and vested awards will be
subject to a further two-year holding period.
These awards will vest in September 2024 based on performance over the three year performance period ending 30
June 2024 as follows:
AWARD VESTING LEVEL AS A % OF SHARE OPTIONS GRANTED (FOR EACH COMPONENT) EPS FOR 2024 ROCE FOR 2024
Nil Below 90.0p Below 22.0%
6.67% 90.0p 22.0%
20% 95.1p 23.0%
50% 103.0p or above 25.0% 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. After the EPS targets were set, the Residential Property Developer Tax (RPDT) was introduced and takes
effect from 1 April 2022. The Remuneration Committee, consistent with the messaging sent out in last year's report, has
adjusted the targets to ensure they are no less challenging than the original ones. The revised targets are 82.5p
(threshold), 90.0p (target) and 97.5p (maximum). The targets will require a further adjustment following completion of the
share buyback programme.
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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.
Deferred Bonus Plan awards, being 50% of the bonus earned relating to FY21 performance, were granted during the year
as set out below:
DIRECTOR
NUMBER OF
AWARDS GRANTED FACE VALUE
(I)
PORTION OF
BONUS DEFERRED VESTING DATE
Matthew Pratt 37,783 £270k 50%
50% on 21 September 2022 and
50% on 21 September 2023
Barbara Richmond 25,889 £185k 50%
50% on 21 September 2022 and
50% on 21 September 2023
(i) The face value has been calculated using the average share price used to determine the number of shares awarded, being 714.6p (the average over the three days
prior to the date of grant).
SHAREHOLDING GUIDELINES AND SHARE INTERESTS
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.
STATEMENT OF SHAREHOLDING AND SCHEME INTERESTS (AUDITED)
The following table sets out the shareholding (including connected persons) of the Directors in the Company as at 3 July
2022 and current interests in long-term incentives.
NUMBER OF
SHARES
BENEFICIALLY
HELD AT 3
JULY 2 022
NUMBER OF
VESTED AND
UNVESTED
DEFERRED
BONUS
AWARDS
NUMBER OF
VESTED BUT
UNEXERCISED
LTIP AWARDS
NUMBER OF
UNVESTED
LTIP
AWARDS
NUMBER OF
HMRC APPROVED
UNVESTED ALL
EMPLOYEE
AWARDS (SAYE)
SHAREHOLDING
AS % OF SALARY
GUIDELINE
MET?
Executive Directors
Matthew Pratt 97,526 37,783 – 434,492 4,768 93% No
Barbara Richmond 564,100 25,889 – 310,372 4,205 749% Yes
Non-Executive Directors
Richard Akers 60,000 – – – – – –
Nick Hewson 22,000 – – – – – –
Nicky Dulieu 6,500 – – – – – –
Oliver Tant 11,303 – – – – – –
Shareholding as a percentage of salary is based on the number of beneficially held shares and the number of
outstanding deferred bonus awards (net of tax) and vested but unexercised LTIP awards (net of tax) held at 3 July 2022.
The value of shareholding is calculated using the base salary as at 1 July 2022 and the average share price for the final
quarter of the 53 weeks ended 3 July 2022. Matthew Pratt is building his shareholding in line with the Remuneration
Policy and is expected to retain all vested Deferred bonus and LTIP awards until the shareholding guidance is met.
Between 3 July 2022 and 13 September 2022 (being the latest practicable date prior to the posting of this report), there
were no further changes to the directors’ beneficially held shares. On 11 September 2022, 24.2% of the 2019 LTIP award
vested resulting in vesting of 25,034 options for Matthew Pratt and 22,592 options for Barbara Richmond. These options
are shown in the above table under the column "Number of unvested LTIP awards".
The table below provides details of executive directors’ share interests
AWARDS
HELD AT
27 JUNE
2021
GRANT
DATE
SHARE
PRICE ON
GRANT
£
AWARD
VESTED
AWARDS
GRANTED
IN YEAR
AWARDS
LAPSED
IN YEAR
AWARDS
EXERCISED
IN YEAR
AWARDS
HELD AT
3 JULY
2022
EXERCISE
PRICE
£ FROM TO
Matthew Pratt
SAYE 2020 4,768 09/11/20 4.72 – – – – 4,768 3.78 01/01/24 01/07/24
LTIP 2018 23,951 10/09/18 5.887 – – (23,951) – – – 10/09/21 10/09/28
LTIP 2019 103,448 11/09/19 5.945 – – – – 103,448 – 11/09/22 11/09/29
LTIP 2020 199,852 23/09/20 4.053 – – – – 199,852 – 23/09/23 23/09/30
LTIP 2021 – 21/09/21 7.146 – 131,192 – – 131,192 – 21/09/24 21/09/31
DEF BONUS 2019 12,736 11/09/19 5.945 12,736 – – (12,736) – – 11/09/20 11/09/29
DEF BONUS 2021 – 21/09/21 7.146 – 37,783 – – 37,783 – 21/09/22 21/09/31
344,755 12,736 168,975 (23,951) (12,736) 477,043
Barbara Richmond
SAYE 2019 1,821 28/10/19 6.81 – – – – 1,821 4.94 01/01/23 01/07/23
SAYE 2020 2,384 09/11/20 4.72 – – – – 2,384 3.78 01/01/24 01/07/24
LTIP 2018 86,122 10/09/18 5.887 – – (86,122) – – – 10/09/21 10/09/28
LTIP 2019 93,356 11/09/19 5.945 – – – – 93,356 – 11/09/22 11/09/29
LTIP 2020 136,936 23/09/20 4.053 – – – – 136,936 – 23/09/23 23/09/30
LTIP 2021 – 21/09/21 7.146 – 80,080 – – 80,080 – 21/09/24 21/09/31
DEF BONUS 2019 12,082 11/09/19 5.945 12,082 – – (12,082) – – 11/09/20 11/09/29
DEF BONUS 2021 – 21/09/21 7.146 – 25,889 – – 25,889 – 21/09/22 21/09/31
332,701 12,082 105,969 (86,122) (12,082) 340,466
John Tutte
LTIP 2018 152,370 10/09/18 5.887 – – (152,370) – – – 10/09/21 10/09/28
LTIP 2019 153,911 11/09/19 5.945 – – – – 153,911 – 11/09/22 11/09/29
DEF BONUS 2019 21,375 11/09/19 5.945 21,375 – – (21,375) – – 11/09/20 11/09/29
327,656 21,375 – (152,370) (21,375) 153,911
i. The performance conditions attached to the 2019 LTIP awards have not been met in full and therefore 24.2% of the 2019 share options will vest on 11 September
2022 and the remainder will lapse.
ii. The performance conditions attached to the 2020 LTIP awards were disclosed in the 2021 Directors’ Remuneration Report.
iii. The performance conditions attached to the 2021 LTIP awards are shown on page 207.
iv. There are no further performance conditions attached to the exercise of the deferred bonus awards.
v. John Tutte stepped down from the Board on 15 September 2021. His LTIP 2019 award shall continue to the original vesting date and shall remain subject to the two
year holding period. Upon vesting, the award will be reduced pro-rata to reflect the extent to which the performance period had elapsed at the date of cessation and
time served as an executive, as determined by the Committee.
GAINS MADE BY DIRECTORS ON SHARE OPTIONS
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 SCHEME
NO. SHARES
EXERCISED
DATE OF
EXERCISE
MID PRICE
ON DATE OF
EXERCISE
(PENCE)
NOTIONAL GAIN ON
EXERCISE (£’000)
Matthew Pratt DEF BONUS 2019 12,736 21/09/21 709.75 90.39
Barbara Richmond DEF BONUS 2019 12,082 21/09/21 709.75 85.75
John Tut te DEF BONUS 2019 21,375 27/09/21 697.4 149.07
PENSION
Matthew Pratt is a deferred member of the Redrow Staff Pension Scheme (now closed for future accruals) and details of
entitlements under this plan are set out below. 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. The value
of these cash supplements is included in the pension column of the Single Total Figure of Remuneration Table on
page 205. Barbara Richmond and Matthew Pratt are also covered by fixed term group income protection and death in
service benefit.
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TOTAL PENSION ENTITLEMENTS (AUDITED)
Details of the Executive Directors’ pension entitlements under the defined benefit section of the Redrow Staff Pension
Scheme are as follows:
DIRECTOR
NORMAL RETIREMENT
DATE
ACCRUED BENEFIT
AT 3 JULY 2022
£
BENEFITS PAID TO
DIRECTOR DURING
PERIOD UP TO
3 JULY 2022
£
DEFINED BENEFIT
ACCRUED DURING
PERIOD UP TO
3 JULY 2022
£
Matthew Pratt 6 July 2040 15,921 Nil Nil
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.
SUPPORTING DISCLOSURES, ADDITIONAL STATUTORY INFORMATION AND ADDITIONAL CONTEXT
Percentage change in remuneration of Chief Executive, Directors and all employees
The table below shows the percentage change in the salary, benefits and annual bonus paid to each Director compared
to the average pay of all Redrow employees who qualify for participation in the Company’s bonus and benefits plans for
the years ending June 2020, 2021 and 2022.
NAME
MATTHEW
PRATT
(CHIEF
EXECUTIVE)
BARBARA
RICHMOND
(CHIEF
FINANCIAL
OFFICER)
NICK
HEWSON
(SENIOR
INDEPENDENT
DIRECTOR)
SIR
MICHAEL
LYONS
(NON-
EXECUTIVE
DIRECTOR)
NICKY
DULIEU
(iii)
(NON-
EXECUTIVE
DIRECTOR)
JOHN
TUTTE
(ii)
(NON-
EXECUTIVE
CHAIRMAN)
RICHARD
AKERS
(iv)
(NON-
EXECUTIVE
DIRECTOR)
AVERAGE PAY
OF REDROW
EMPLOYEES
2022 Salary/fee 15.7% 3.0% 1.3% N/A 6.5%
N/A
N/A 3.1%
Benefits 26.1% 2.9% N/A N/A
N/A N/A N/A (7.4%)
Annual bonus 44.6% 28.9% N/A N/A N/A N/A N/A (11.1%)
2021 Salary/fee 35.3% 2.78% 2.74% 3.17%
N/A N/A N/A
3.07%
Benefits 4.5% Nil N/A N/A N/A N/A N/A 1.4%
Annual bonus N/A
(i)
N/A
(i)
N/A N/A N/A
N/A N/A
292.9%
2020 Salary/fee 6.50% 1.4% (3.0%) N/A N/A N/A 2.92%
Benefits 84.2% N/A N/A N/A N/A N/A 11.0%
Annual bonus (100%) N/A N/A N/A
N/A N/A
(64.3%)
(i) Zero bonus was awarded to Matthew Pratt and Barbara Richmond for FY20. £540k and £370k bonus respectively was awarded for FY21.
(ii) John Tutte served as Non-Executive Chairman from 6 November 2020 to 15 September 2021.
(iii) Nicky Dulieu was appointed as Non-Executive Director on 6 November 2019.
(iv) Richard Akers was appointed as Non-Executive Director on 1 June 2021.
CEO PAY RATIO
The table below sets out the CEO pay ratio for the last three financial years. It compares the single total figure of
remuneration for the Chief Executive with that of Group employees who are paid at the 25th, 50th and 75th percentiles.
CEO PAY RATIO 2022 2021 2020
25th Percentile pay ratio 55:1 42:1 27:1
50th Percentile pay ratio 35:1 26:1 18:1
75th Percentile pay ratio 23:1 17:1 12:1
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 2022 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 below.
25TH PERCENTILE 50TH PERCENTILE 75TH PERCENTILE
Salary 2022 £25,300 £32,800 *£25,980
* 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 the total pay and benefits is higher.
25TH PERCENTILE 50TH PERCENTILE 75TH PERCENTILE
Total pay and benefits 2022 £29,000 £46,082 £70,897
The pay ratio figures for 2022 have widened compared to those in the previous year. The principal reason is that the
CEO moved to the full rate for the role of £625,000 compared to an interim figure of £540,000 in the previous year.
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 2022 and 2021 (and
the difference between the two).
£M 2022 2021 Change (%)
Total employee remuneration 151 137 10.2%
Distributions to shareholders 113 86 31.4%
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 32.0 pence per share in respect of
2022 compared to 24.5 pence per share in respect of 2021.
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Directors’ remuneration report continued
Performance graph and CEO single figure table
The chart below shows the TSR of Redrow in the ten-year period ended 3 July 2022 against the FTSE 250 return index
over the same period. 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.
The table below provides remuneration data for the Executive Chairman/Group Chief Executive (as applicable) for each
of the ten financial years over the equivalent period.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Name Steve
Morgan
Steve
Morgan
John
Tutte
John
Tutte
John
Tutte
John
Tutte
John
Tutte
John
Tutte
Matthew
Pratt
Matthew
Pratt
Remuneration/
donations* £1,050k £1,922k £2,355k £1,916k £2,463k £1,950k £2,093k £712k £1,141k £1,609k
Bonus
(% of Maximum) 80% 100% 100% 100% 100% 96.7% 85% Nil% 100% 100%
LTIP vesting
(% of Maximum) 19% 100% 100% 100% 100% 100% 100% Nil% Nil% 24.2%
* 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 £209k during 2022 (£188k during 2021). This represented 250,000 Swiss Francs in 2022 and 240,000 Swiss
Francs in 2021.
CONSIDERATION OF DIRECTORS’ REMUNERATION – REMUNERATION COMMITTEE AND ADVISORS
The Remuneration Committee is comprised solely of Non-Executive Directors. Nicky Dulieu chaired the Remuneration
Committee and the other members during the year comprised Nick Hewson, Sir Michael Lyons (who stepped off the
Board on 12 November 2021), Richard Akers and Oliver Tant (who joined the Board on 1 February 2022).
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 three times during the
course of the financial year ended 3 July 2022 and details of Committee attendance are set out in the following table:
The Committee received advice from FIT Remuneration Consultants LLP during the year. FIT were appointed to advise
the Committee following a competitive tender exercise. 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 2022 was
£42,567 + VAT. FIT provided no other services to the Company.
Statement of voting at Annual General Meeting
At the Annual General Meeting held on 12 November 2021, votes cast by proxy and at the meeting in respect of directors’
remuneration report are shown in the table.
RESOLUTION
VOTES FOR VOTES AGAINST TOTAL
VOTES CAST
EXC WITHHELD
VOTES
WITHHELDNO. % NO. %
Approval of the Directors’ Remuneration
Policy 258,197,497 96.94 8,151,899 3.06 266,349,396 430,888
Approval of Directors’ Remuneration
Report for the 52 weeks ended 27 June
2021 261,421,828 98.15 4,939,482 1.85 266,361,310 418,974
By order of the Board
Nicky Dulieu
Chair of the Remuneration Committee
13 September 2022
TABLE OF ATTENDANCE
NAME ROLE ATTENDANCE AT MEETINGS
Nicky Dulieu † Chair 3/3
Nick Hewson † Member 3/3
Richard Akers † Member 3/3
Oliver Tant
1
† Member 2/2
Sir Michael Lyons
2
† Member 1/1
1 Oliver Tant was appointed as Non-Executive Director on 1 February 2022 and joined as a Member of the Remuneration Committee at the same time. He
attended all meetings held between his appointment date to the end of the 2022 financial year.
2 Sir Michael Lyons stepped down from the Board and as a Member of the Remuneration Committee on 12 November 2021. He attended the one meeting held
from the beginning of the 2022 financial year to the date he left the Board.
† Member considered to be independent. Throughout the 2021 financial year, the Committee was made up of 100% independent members.
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Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Governance report
Governance report
Directors’ report
DIRECTORS’ REPORT
OTHER STATUTORY DISCLOSURES
The Companies Act 2006 (the “Act”) requires the Directors
to present a fair review of the business during the 53
weeks to 3 July 2022 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 150 of the
Annual Report. The FCA’s Disclosure Guidance and
Transparency Rules (the “DTRs”) require certain information
to be included in the Directors’ Report. This information
can be found in the Corporate Governance Report on
pages 152 to 225.
Save for the announcement by the Company on 14 July
2022 that it had commenced a share buyback programme
to purchase ordinary shares of 10.5p each in the Company
for up to a maximum consideration of £100m, the primary
purpose of which was to reduce the share capital of the
Company, there have been no other 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 applicable
English company law. The liabilities of the Directors in
connection with this report shall be limited as provided by
English law.
The table below sets out where key information can be
found in the Annual Report.
SUBJECT
PAGE REFERENCE
Directors • See page 158 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 2022
AGM are set out on pages 154 to 155.
• Details of Directors’ interests,
including interests in the Company’s
shares, are disclosed in the Directors’
Remuneration Report on page 208.
Dividends See note 5 of the financial statements
on page 253.
RESULTS, DIVIDENDS AND RETURN OF CASH
The Group made a profit after tax of £328m (excluding
exceptional item) and £197m (including exceptional item).
An interim dividend of 10.0p (2021: 6.0p) net per share was
paid on 8 April 2022.
In addition to the interim dividend, the Company
announced on 14 July 2022 that it had commenced a share
buyback programme to purchase ordinary shares of 10.5p
each in the Company for up to a maximum consideration of
£100m. The primary purpose of the buyback programme
was to reduce the capital of the Company. As at 13
September 2022, being the latest practicable date prior to
publication of this report, the Company had purchased
6,514,925 ordinary shares of 10.5p each in the Company for
the total consideration of £34,606,713.68 and the
programme remains ongoing.
The Board proposes to pay on 16 November 2022, subject
to shareholder approval at the 2022 Annual General
Meeting, a final dividend of 22p (2021: 18.5p) per share in
respect of the 53 weeks ended 3 July 2022 to
shareholders on the Register as at the close of business on
23 September 2022.
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.
ANNUAL GENERAL MEETING
Notice of the 2022 Annual General Meeting to be held on
Friday, 11 November 2022 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.
DIRECTORS
The Directors of the Company during the year to the date
of this report, along with their meeting attendance, are
listed on page 158. The current Directors are listed on
pages 154 to 155 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 192 to 213.
SUBJECT
PAGE REFERENCE
Capital
structure
(details of the
issued share
capital)
See note 18 of the financial statements
on page 276.
Employment
policies of the
Company
Details of the Company’s employment
policies may be found in the Directors’
Report on page 220.
The Redrow
Benefit Trust
(the “Employee
Benefit Trust”)
Details of the shares held by the
Employee Benefit Trust may be found in
the Directors’ Report on page 216.
Dividend
Waiver
Details of any arrangements under
which a shareholder has waived any
dividends may be found on the
Directors’ Report on page 216.
Environmental,
social and
governance
(“ESG”)
disclosures
Details of the Company’s approach to
ESG matters can be found in the
Directors’ Report on pages 217 to 223.
Greenhouse
gas emissions
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 pages 217 to
218.
Redrow plc
Long Term
Investment
Plan (“LTIP”)
Details of the Company’s LTIP are set
out in note 7d of the consolidated
financial statements on pages 255 to
256 and the Directors’ Remuneration
Report on pages 192 to 213.
Section 172(1)
Statement
The Section 172(1) Statement can be
found in the Strategic Report on pages
136 to 139.
The Directors take pleasure in presenting to the
shareholders their report and audited consolidated
financial statements for the 53 weeks ended 3 July 2022.
Formal appraisals of the Executive Directors were
undertaken during the financial year. Each of the Non-
Executive Directors underwent an annual appraisal
conducted by the Non-Executive Chairman and the Senior
Independent Director carried out the appraisal of the
Non-Executive Chairman. The Board confirms that Matthew
Pratt and Barbara Richmond, who stand for reappointment
as Executive Directors; Nicky Dulieu and Oliver Tant, who
stand for reappointment as Non-Executive Directors; and
Richard Akers, who stands for reappointment 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.
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, 11 November 2022
and, being eligible and upon the recommendation of the
Board, offer themselves for reappointment, save for Nick
Hewson who will be stepping down from the Board at the
2022 AGM.
DIRECTORS INTERESTS
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.
POWERS OF THE DIRECTORS
Subject to the Company’s Articles of Association, UK
legislation and any special resolutions passed by the
Company, 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.
CAPITAL STRUCTURE
As at 13 September 2022, being the latest practicable date
prior to publication of this report, the Company had an
issued share capital of 345,675,495 ordinary shares of 10.5
pence each (excluding 2,605,970 ordinary shares of 10.5p
each held in treasury).
216 217
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Governance report
Governance report
Directors’ report continued
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 3 July 2022 or prior to the date of
this report.
Authority was also given to the Company 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.
In line with the authority limits, the Company announced on
14 July 2022 that it had commenced a share buyback
programme to purchase ordinary shares of 10.5p each in
the Company for up to a maximum consideration of £100m.
The primary purpose of the buyback programme was to
reduce the capital of the Company. As at 13 September
2022, being the latest practicable date prior to publication
of this report, the Company had purchased 6,514,925
ordinary shares of 10.5p each in the Company for the total
consideration of £34,606,713.68 and the programme
remains ongoing.
The above authorities expire at the forthcoming Annual
General Meeting therefore the Directors will be seeking
new authorities as set out in the Notice of Annual General
Meeting. As the share buyback programme is ongoing,
should the resolution seeking authority to make market
purchases equivalent to approximately 10% of the issued
share capital of the Company not pass, the buyback
programme will be discontinued.
The Company has made no non-pre-emptive issuances of
equity for cash over the past three reporting periods.
VOTING AND TRANSFER OF SHARES
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 (“Zedra”), as
trustee of the Employee Benefit Trust, held 10,625,995
shares (3.02%) in the Company as at 3 July 2022 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.
In respect of those shares held within the Employee
Benefit Trust, during the year, Zedra had agreed to waive
payment of the following dividends:
• the 2021 final dividend of 18.5 pence per share paid on
17 November 2021 in respect of 2,400,000 ordinary
shares; and
• the 2022 interim dividend of 10 pence per share paid on
8 April 2022 in respect of 2,800,000 ordinary shares.
The shares over which the dividends were waived were
held to satisfy Save As You Earn share options granted by
the Company which do not attract a dividend equivalent
payment therefore there was no loss to the individual
employees of the Company by Zedra waiving the dividends
in respect of those shares.
SUBSTANTIAL HOLDINGS IN THE COMPANY
As at 3 July 2022, 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 56,301,816 15.99%
Vidacos Nominees/HSBC
1
17,876,321 5.08%
Zedra Trust Company
(Guernsey) Limited
10,565,713 3.00%
GLG Partners LP 17,738,152 5.04%
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 Vidacos Nominees’ most recent notification to the
Company under DTR 5.1, at which time was 18,770,138.
The Company has not been notified of any changes to the
above interests, or any other notifiable interests, since 3
July 2022 to 13 September 2022, being the latest
practicable date prior to publication of this report.
CHANGE OF CONTROL
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.
INDEPENDENT AUDITORS
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 2021 Annual General Meeting, with
99.79% of votes cast in favour of its reappointment.
QUALIFYING THIRD PARTY INDEMNITY PROVISIONS
During the course of the 53 weeks ended 3 July 2022,
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 in connection
with 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.
EMISSIONS FROM:
CURRENT
REPORTING
YEAR (28 JUNE
2021 TO 3 JULY
2022)
COMPARISON
YEAR
(29 JUNE 2020
TO 27 JUNE
2021) UNITS
Scope 1 activities:
• Direct emissions from combustion of
fuels and business travel 9,558 11,417 Tonnes of CO
2
e
Scope 2 activities – Location Based:
• Indirect emissions from purchased electricity
and heat 2,591 3,263 Tonnes of CO
2
e
Scope 2 activities – Market Based 264 4,682 Tonnes of CO
2
e
Outside of Scopes
1
3 N/A Tonnes of CO
2
e
Total Greenhouse Gas Emissions – Location Based:
• (Scope 1 and Scope 2) 12,149 14,680 Tonnes of CO
2
e
Total Greenhouse Gas Emissions – Market Based:
• (Scope 1 and Scope 2) 9,822 16,099 Tonnes of CO
2
e
Intensity ratio:
Total Greenhouse Gas emissions per 100m
2
of build
(Location Based) 2.16 2.84 Tonnes of CO
2
e per 100m
2
of build
Total Greenhouse Gas emissions per 100m
2
of build
(Market Based) 1.75 3.11 Tonnes of CO
2
e per 100m
2
of build
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.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
DISCLOSURES
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.
ENVIRONMENTAL
Greenhouse Gas emissions
Greenhouse Gas (GHG) emissions data for the period 28
June 2021 to 3 July 2022 are set out in the table below.
1 These are emissions resulting from the use of HVO and should be reported separately to Scope 1 emissions under ‘outside of scopes’ as detailed in the UK
Government Greenhouse Gas Conversion Factors file and the GHG Protocol Corporate Accounting and Reporting Standard.
218 219
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Directors’ report continued
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.
The Company has used the WRI/WBCSD GHG Protocol – A
Corporate Accounting and Reporting Standard and the
emissions have been calculated using the 2022 UK
Government’s Greenhouse Gas Conversion Factors for
Company Reporting. Reported Scope 2 emissions are
calculated using both the location-based and market
based methods.
This inventory of greenhouse gas emissions has been
verified by SGS to a limited level of assurance, in
accordance with the requirements of 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 https://www.redrowplc.co.uk/
about-redrow/our-values/building-responsibly/managing-
our-resources-efficiently/.
During the reporting period, the annual quantity of energy
consumed by the Company was 53,788,513 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 2022 UK
Government’s Greenhouse Gas Conversion Factors for
Company Reporting have been used for the required
conversions.
This 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 greenhouse gas emissions and increasing the
Company's energy efficiency, including:
• The exploration of a Company-wide roll out of energy-
efficient site cabins with a B+ rating compared with the
previous D rating. These will provide improved thermal
insulation, double glazed windows with low u-values,
energy efficient LED lights with PIR activation,
thermostatically controlled heaters with thermal cut-out
and energy efficient point-of-use hot water taps. To
power the compound, the use of solar panels or hybrid
generators is being encouraged.
• The exploration of the viability of installing solar
photovoltaic panels on the Company’s head office
building. The payback period is favourable, at around six
to seven years, and the Company aims to progress with
the installation in 2023. The viability of installing these at
all other offices is currently being explored.
• The switch to a renewable electricity contract for all of
the Company’s offices in February 2021 and from July
2021, all plots, show homes and site compounds were
supplied by 100% Green electricity. Renewable energy is
an important part of our carbon reduction strategy and
this year 96% (up from 3.3% in the 2021 financial year) of
the Company’s operational electricity was sourced from
renewable sources, backed by Renewable Energy
Guarantees of Origin (REGO) certificates.
• The running of a pilot project during the year to assess
the benefits of a solar generator at the Company’s
Amber Fields development whereby the solar generator
combines solar power and storage with a diesel power
back up. During the day, the energy generated by the
solar panels was stored in a battery pack and the
standby generator only ran when the batteries were flat.
The study concluded that the Company could reduce
diesel use by 70% and cut noise pollution by nearly half.
• The reduction by 8% (compared to the 2021 financial
year) in the use of diesel (litres) on the Company’s
construction sites as a result of more efficient use of
machinery on-site and securing an earlier connection to
the grid. At the same time, the carbon emissions from
fuel used on sites has also reduced by 8%. This is largely
due to diesel being replaced by hydrotreated vegetable
oil (HVO – a biodegradable non-toxic fuel that is
produced from vegetable fats and oils) as the fuel source
on some of our sites. By using 97,102 litres of HVO, the
Company saved 264 tonnes of CO
2
e that would
otherwise have been emitted in to the atmosphere.
• The steady progress made on the Company’s
commitment to reduce the carbon impact from its
company car fleet by continuing to reduce the availability
of petrol and diesel cars. Employees are increasingly
opting for vehicles with a lower environmental impact,
with 73% of company cars ordered during the year being
either Hybrid or Pure Electric. The current car choice is
now 54% Pure Electric, with options in all grades, and
34% Hybrid, with only very limited purely petrol or diesel
options.
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 53 weeks ended 3 July 2022 was
£0.6m (2021: £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:
• 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. During the
year, the Company submitted for verification Science
Based Targets initiative (“SBTi”) targets which saw the
Group commit to a 1.5°C reduction for Scopes 1 and 2 by
2030 and a well-below 2°C reduction commitment for
Scope 3 by 2030. Further information relating to the SBTi
targeting setting and carbon commitments can be found
on pages 61 to 63.
• Water – the Heritage homes produced by the Company
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 26.53m
3
per 100m
2
of build.
• Waste – the Company is also committed to reducing
waste from its operations and in 2022, waste generated
was 7.91 tonnes per 100m
2
of build. Where possible, we
try to reuse or recycle unused materials. During the year,
98.34% of our waste was diverted from landfill and we
implemented a number of design changes that improved
efficiency and cut waste but also ensured that our
customers continued to enjoy the high quality they
expect from our homes.
The Company embeds its commitments to resource
efficiency through its Waste and Resource Efficiency Policy
which is available to view at redrowplc.co.uk.
For further details on the Company’s approach to
managing its resources efficiently, please see pages 70 to
71 of the Strategic Report.
Sustainable materials
The Company is committed to sourcing sustainable
materials 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:
• 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 2022
financial year, 99.98% of the forest products used by the
Company were from verified and credibly certified
sources.
• 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.
• As part of its Scope 3 commitment to net zero carbon
emissions, in partnership with our supply chain we have
commenced a gap analysis on the carbon content of the
materials used to build our homes.
For further details on the Company’s approach to sourcing
sustainable materials, please see pages 60 to 70 and 74 to
77 of the Strategic Report.
Biodiversity
During the year, the Company continued to implement its
industry-leading biodiversity strategy to ensure that our
developments enhance biodiversity and contribute to
nature’s recovery. As part of this strategy, the Company set
a new biodiversity net gain target to achieve a minimum of
10% net gain for biodiversity on every new planning
application from November 2023, in preparation for the
legislation coming into force.
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 46 to 49 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 112 to 125 for the Company’s
latest TCFD report.
SOCIAL
Placemaking
The Company has an established set of placemaking
principles called the Redrow 8 that has been used for over
three years. The eight principles are a robust set of
commitments and benchmarks that ensure that we provide
high quality homes in communities that are beautiful,
sustainable, well-connected and developed with nature
and people in mind. During the year the Company
developed its own post completion audit process which
will be carried out on all developments going forward to
ensure that we deliver on our design credentials.
For further details on the Company’s approach to
placemaking, please see pages 34 to 39 of the Strategic
Report.
Workforce engagement
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.
220 221
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Governance report
Governance report
Directors’ report continued
See pages 160 to 161 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
making employees aware of the financial performance of
the Company; consult with employees to obtain their views;
and encourage 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 focusing on the physical and
mental wellbeing of employees. The following are
examples of initiatives put in place across the Group to
focus on employee wellness:
• implementation of ‘agile working’ 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 mental health awareness training for all
Directors, managers, employees and subcontractors to
help them understand their own mental health and
support the mental health of colleagues;
• 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;
• use of Wellbeing Champions across each of the Divisions
to work with the Engagement team to ensure the health
initiatives are communicated and embedded throughout
the business; and
• hosting of a variety of webinars on health and wellbeing
matters, which this year included coverage of topics
such as stress awareness, mental health (with a particular
focus on the mental health of men and children),
breast and testicular cancer, baby loss awareness
and menopause.
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. The Group also has in place a Mental Health at
Work Policy which is reviewed regularly and is available to
employees on the Company intranet, Engage.
Equality, diversity and inclusion policy
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.
Learning and development
The Company places considerable importance on training
and developing its employees. Historically, training has
primarily been delivered face-to-face at the Company’s
in-house training facilities and supported through blended
e-learning. Having explored the value of new ways of
working during the Covid-19 pandemic, the Group has
placed additional emphasis on its e-learning platform and
has made 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. In
2021, the Company opened up the degree programme to
post A-Level school leavers for the first time. Following this
success, the Company made the same offering again in
2022.
During the year, the Company recruited 153 trainees,
including 91 apprentices, with the result that 15% of the
Company’s 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.
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.
For further details on our approach to health and safety,
see pages 52 to 53 of the Strategic Report.
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.
Given that it is an increasingly important consideration for
shareholders and its positive impact on business
performance, the Remuneration Committee considered that
ED&I was an important input measure to progress going
forward as part of the annual bonus. As further explained
on page 204, it was agreed that for the 2023 financial year
bonus, 5% would be based on management actions
relating to increasing diversity.
The Company encourages a culture where ED&I is
championed by leadership and where everyone in the
Company takes ownership of ED&I, feels empowered and
is confident enough to get involved with ED&I initiatives. In
2021, 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. During the year, the Group continued to
ensure that ED&I remained an ongoing area of discussion
and it has now become embedded within the culture of the
Group, with consistent communication and engagement
focused on this important topic.
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
The ED&I Policy is inherently linked to the Group’s strategy
through the pillar of Valuing People. This ensures that ED&I
remains an active area of discussion throughout the Group,
from Divisional and Group-level all the way up to the Main
Board. The Group’s commitment to ED&I allows all
colleagues to contribute constructively leading to new
ideas and ways of working. It will also have a positive
impact on employee retention and attendance which
should ultimately lead to delivering better outcomes for the
business and wider stakeholders.
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 £0.2m (2021: £0.1m) in
charitable donations during the year, being £0.1m
(2021: £nil) in support of national charities and £0.1m
(2021: £0.1m) in support of local charities.
The Company does not engage in 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 instructed to be particularly
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.
The Company is accredited with the Living Wage
Foundation and ensures 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 Living Wage Foundation. This is extended 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 which is
available to view at redrowplc.co.uk.
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
222 223
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Redrow plc Annual Report 2022
Governance report
Governance report
Directors’ report continued
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 has access to thousands of online
presentations, training modules, guidance documents
and checklists and is 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 with which the
Group works are aligned with the Group’s commitments to
high ethical business standards.
The Company embeds these commitments and
expectations through its policy, Partnering with our
Supply Chain which is available to view at available at
redrowplc.co.uk.
For further details on our how the Company partners with
its supply chain for sustainability, see pages 74 to 77 of the
Strategic Report.
Social value
During the year, the Company continued to create thriving
communities and committed £281m to the local
communities served for the development of affordable
housing, new schools, local shops, community and health
centres as well as green spaces as part of the planning
process. The Company also supported the development of
335 trainees, from apprenticeships to graduates as
outlined on page 92 of the Strategic Report.
The Group is committed to providing high quality
affordable homes for local people and during the year has
designed, built and delivered over 1,250 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 42 to 45 of the
Strategic Report.
Customers and marketing
The Company’s purpose is to operate to create a better
way for people to live and there is a strongly customer-
focused culture across the Group.
During the year, based on a survey conducted by the
NHBC and published by the Home Builders Federation,
94.5% of customers polled said they would recommend a
Redrow home to a friend, earning the Company a top
five-star rating.
‘Putting Our Customers First’ is a key strand underpinning
the Building Responsibly component of the Company’s
strategy and it is recognised that responsible marketing,
advertising and sales practices are vital for both the
Company’s customers and brand. The Company embeds
its commitments to such responsible practices through its
Responsible Marketing, Advertising and Sales Policy which
is available to view at available at redrowplc.co.uk.
For further details on our how the Group keeps customers
at the heart of the business, see pages 58 to 59 of the
Strategic Report.
• 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.
• 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.
• The Company’s Standard Purchase Order and
Subcontractor Terms of Contract require trading 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 compliant 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 2022 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
140 to 150.
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:
Business relationships
A summary of how the Board has 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 140 to 150.
GOVERNANCE
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 152 to 213.
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. maintenance of bribery risk assessments within our
sector;
2. top level commitment of the unacceptability of bribery
which is engrained in our culture;
3. proper due diligence with people we do business with
and seeking reciprocal anti-bribery agreements;
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 179.
PROVISION OF INFORMATION TO AUDITORS
Each Director in office at the date the Directors’ Report is
approved, confirms that:
• 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.
GOING CONCERN
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 242, 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.
By order of the Board
Graham Cope
Company Secretary
Redrow plc
Registered no: 2877315
13 September 2022
224 225
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Governance report
Governance report
Statement of Directors' responsibilities
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
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 UK-adopted
international accounting standards and applicable law and
have elected to prepare the parent Company financial
statements on the same basis.
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:
• 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 UK-adopted international accounting standards;
• 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.
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.
In accordance with Disclosure Guidance and Transparency
Rule 4.1.14R, the financial statements will form part of the
annual financial report prepared using the single electronic
reporting format under the TD ESEF Regulation. The
auditor’s report on these financial statements provides no
assurance over the ESEF format.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN
RESPECT OF THE ANNUAL FINANCIAL REPORT
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 issuer 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 and accounts, 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
1
Non-Executive Chairman
Richard Akers Non-Executive Chairman
Matthew Pratt Group Chief Executive
Barbara Richmond Group Finance Director
Nick Hewson Senior Independent Director
and Non-Executive Director
Nicky Dulieu Non-Executive Director
Sir Michael Lyons
2
Non-Executive Director
Oliver Tant
3
Non-Executive Director
1 John Tutte stepped down from the Board on 15 September 2021
2 Sir Michael Lyons stepped down from the Board on 12 November 2021
3 Oliver Tant joined the Board on 1 February 2022
By order of the Board
Graham Cope
Company Secretary
13 September 2022
Redrow plc
Redrow House
St. David’s Park
Flintshire
CH5 3RX
226 227
Independent auditors report
To the members of Redrow plc
INDEPENDENT AUDITORS REPORT
1. Our opinion is unmodified
We have audited the financial statements of Redrow plc
(“the Company”) for the 53 week period ended 3 July 2022
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 238 to 279.
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 3 July 2022 and of the Group’s profit for
the 53 week period then ended;
– the Group financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards;
– the Parent Company financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards 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.
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 shareholders on
6 November 2019. The period of total uninterrupted
engagement is for the three financial periods ended 3 July
2022. 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
£20.4m (2021: £15.7m)
5% of Group profit before
exceptional items and tax
(2021: 5% of Group profit before tax)
Coverage 100% of Group profit before
exceptional items and tax (2021:
99% of Group profit before tax)
Key audit matters
vs 2021
Recurring risks Cost of sales
recognition and
carrying amount of
land held for
development
Event driven New: Fire Safety
Provision
Parent Company
Key Audit Matter
Valuation of defined
benefit pension
obligation
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.
The risk Our response
Cost of sales
recognition and
carrying
amount of land
held for
development
Pre-exceptional
cost of sales
(£1,624 million;
2021: £1,525
million);
Carrying
amount of land
held for
development
(£1,710 million;
2021: £1,526
million).
Refer to page
172 (Audit
Committee
Report), pages
245 and 247
(accounting
policy) and
page 270
(financial
disclosures).
Subjective estimates
The Group holds inventory in the form of
land for development, work in progress
and show homes. The amount of cost of
sales recognised in the period is
calculated at standard cost which also
includes an allocation of whole site costs
to each plot sold and any abnormal costs
are expensed to cost of sales as incurred.
Due to development timescales, for
certain high risk sites (typically large
multi-phased 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 high
risk 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 estimates made are profit
impacting and therefore there is an
incentive for management to manipulate
the assumptions made to meet profit
targets and during the year the Group
identified that there was a failure by one
of the divisions to account accurately for
the latest estimate of development profit,
including the omission of incurred costs
overruns.
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 (if the land has been acquired
without planning consents) and potential
future changes to building and planning
regulations, including those arising in
respect of climate change. Changes in any
of the key assumptions could lead to a
material change in the estimation of the
profits to be generated from development
of the site and therefore the net realisable
value of land held for development.
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:
Sector expertise: We used our own Quantity
surveyor specialists to assist us to challenge areas
of risk and assist in our risk assessment decisions
for our selection of high risk sites.
For a sample of sites which, due to either their size,
complexity, performance, location in the division
where there was a failure to account accurately for
the latest estimate of development profit or
combination thereof, we consider at higher risk of
misstatement (‘high risk sites’), we inspected the
whole site build cost budgets and infrastructure
and development budgets and challenged the
Group’s inputs and assumptions by performing the
following procedures:
– Test of details: We compared the period end
carrying value of work in progress recorded to
that determined by the Group’s Quantity
Surveyors and performed a comparison to the
actual costs incurred to check whether any
abnormal costs or build variances incurred,
have been appropriately identified and
accounted for in the period; and
– Test of details: We assessed the accuracy of
site wide costs and infrastructure and
development budgets by selecting a sample of
costs included in the budgets and agreed
these to supporting documents such as
invoices, quotations and planning obligations.
Test of details: For a sample of residual 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.
228 229
To the members of Redrow plc
Independent auditors report continued
The risk Our response
Cost of sales
recognition and
carrying
amount of land
held for
development
The effect of these matters is that as part
of our risk assessment we determined that
cost of sales and carrying amount of 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.
Test of details: For all sites with unit sales during
the year, we compared the gross profit margin
recognised to the site build cost budgets and
infrastructure and development budgets and initial
land appraisals and determined whether variances
were supportable.
Test of details: We identified low and negative
margin sites and sites with high margins in
comparison to the average margin for the period.
Where applicable we corroborated exceptions to
supporting documentation and compared the
gross profit margin to site build cost budgets and
infrastructure and development budgets and initial
land appraisals. For those sites with low and
negative margin we corroborated the
completeness and accuracy of the Group’s related
net realisable value provisions recorded in relation
to these sites.
Test of detail: For both the high risk and residual
sites 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.
Test of detail: We assessed the adequacy of build
contingency with reference to known build issues
and the impact of build cost inflation on the
standard cost.
Historical comparisons: For a sample of sites that
are sold complete 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.
Test of details: For a sample of undeveloped land
sites without planning, we corroborated the
Group’s assessment of the likelihood of a
successful planning application by assessing
underlying planning applications and legal
documents and quantity surveyor assessments
where applicable. We considered the impact of
known and potential changes in building
regulations including environmental factors likely
to impact these, on the estimated profitability of
the sites to assess the completeness and accuracy
of related net realisable value provisions recorded.
Enquiry of personnel: for those individuals
involved in the follow up investigation to the failure
of one of the divisions to account accurately for
development profit, we made inquiries to
challenge the scope of the review carried out and
their relevant experience and competence.
The risk Our response
Cost of sales
recognition and
carrying
amount of land
held for
development
Extended scope: we agreed the unrecorded costs
identified by the investigation to supporting
documentation as well as performing additional
testing of unrecorded liabilities for all divisions
including the analysis of variances to build costs.
Extended scope: For all divisions we extended our
testing of journals and other adjustments between
unrelated sites and corroborated these to
supporting documentation, and extended our
analytical procedures to identify sites
inappropriately classified as close to completion.
Assessing transparency: We assessed 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.
Assessing transparency: We assessed the
adequacy of the disclosures on page 177 of the
Audit committee report within the Governance
report related to a failure by one of the divisions to
account accurately for development profit,
including the omission of incurred costs overruns,
for consistency with our knowledge and
understanding acquired during the audit.
Our results:
We consider the cost of sales recognition and the
carrying amount of land held for development to
be acceptable (2021: acceptable).
The risk Our response
Fire Safety
Provision
(£200 million;
2021: £26
million)
Refer to page
172 (Audit
Committee
Report), pages
249 and 250
(accounting
policy) and
page 275 and
276 (financial
disclosures).
Subjective estimates
In common with many in the sector the
Group signed up to the Building Safety
Fund (‘BSF’) pledge in April 2022 (‘the
Pledge’). In signing up to the Pledge the
Group have agreed to remediate life
critical fire safety issues on all properties
over 11 metres where Redrow were the
developer, going back 30 years. As a
result the Group has re-estimated its fire
safety provision, leading to an exceptional
charge of £164m in the current financial
year.
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: We evaluated the existence and
extent of the obligation for the Group to remediate
life critical fire safety issues by obtaining the
Pledge for England and evidence to support the
Group’s commitments in Wales and Scotland.
Test of detail: We assessed the accuracy and
completeness of the population of properties over
11 metres that were developed by the Group going
back 30 years by comparing the Group’s list of
properties to external evidence including a list
supplied by the Department for Levelling Up,
Housing and Communities (‘DLUHC’).
230 231
To the members of Redrow plc
Independent auditors report continued
The risk Our response
Valuation of
the defined
benefit
obligation
(Parent
Company only)
Parent
Company: (£97
million; 2021:
£137million
Refer to page
172 (Audit
Committee
Report), pages
247 and 250
(accounting
policy) and
pages 259 to
262 (financial
disclosures).
Low risk, high value
As part of our risk assessment, we
determined that the valuation of the
defined benefit obligation is not at a high
risk of significant misstatement subject to
material estimation uncertainty but
remains a subjective valuation. The
potential range of outcomes as a result of
reasonable changes in key assumptions,
in particular those relating to price
inflation rate and the discount rate, is
lower than our materiality for the Parent
Company financial statements as a whole.
However, due to the defined benefit
obligation’s materiality in the context of
the Parent Company financial statements,
this is considered to be the area that had
the greatest effect on our overall Parent
Company audit.
Following the reduction in the value of the
obligation following a triennial valuation
which completed in the prior year; the
nature of the scheme; and the valuation of
the defined benefit obligation compared
to Group materiality, we have not
assessed this as an area that had the
greatest effect on our current year audit
for the Group and is now included as a
Parent Company key audit matter only.
We performed the tests below rather than seeking
to rely on any of the Parent Company’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:
Benchmarking assumptions: We challenged the
key assumptions applied in the calculation of the
obligation, 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 external actuarial expert.
Assessing transparency: We considered the
adequacy of the Parent Company’s disclosures
relating to the defined benefit obligation.
Our results
We consider the carrying amount of defined
benefit obligation to be acceptable (2021:
acceptable).
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 £20.4 million (2021: £15.7 million) determined
with reference to a benchmark of Group profit before
exceptional items and tax in the 53 week period ended 3
July 2022 of £410.0 million (2021: Group profit before tax of
£314.0 million), of which it represents 5% (2021: 5%).
Materiality for the Parent Company financial statement as a
whole was set at £16.5 million (2021: £15.7 million),
determined with reference to a benchmark of net assets, of
which it represents 2.0% (2021: 1.7%).
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 75% (2021:
65%) of materiality for the financial statements as a whole,
which equates to £15.3 million (2021: £10.2 million). We
applied this percentage in our determination of
performance materiality based on the reduced level of
identified misstatements and control deficiencies during
the prior period.
Performance materiality for the Parent Company was set at
75% (2021: 75%) of materiality which equates to £12.4
million (2021: £11.8 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 £1.0
million (2021: £0.8 million), in addition to other identified
misstatement that warranted reporting on qualitative
grounds.
The scope of the audit work performed was fully
substantive as we did not rely upon the Group’s internal
control over financial reporting.
Of the Group’s 9 (2021: 9) reporting components, we
subjected 2 (2021: 3) to full scope audits for Group
purposes. For the residual 7 (2021: 6) components, we
performed an analysis at an aggregated Group level to
re- examine our assessment that there were no significant
The risk Our response
Fire Safety
Provision
Estimation of the provision requires
identification of the impacted properties,
an assessment of the defects requiring
remediation, and the likely costs. The
Group’s estimated provision will be
subject to further refinement as detailed
building inspections continue and
agreement is reached with UK
Government on the detailed terms of the
Pledge.
The effect of this matter is that, as part of
our risk assessment for audit planning
purposes, we determined that the amount
of the provision required has 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 on pages 249
and 250 disclose the sensitivity estimated
by the Group.
Challenge of assumptions: We challenged the
accuracy and completeness of the Group’s
assessment of which properties required a
provision by confirming those properties that had
BSF approval, inspecting board minutes to identify
potential claims, inspecting EWS1 certificates ,
evaluating the Group’s internal assessment of the
materials and other factors likely to lead to
remediation obligations under the Pledge, and we
held inquiries with the Group’s in-house legal
counsel and fire safety committee.
Test of details: For those properties where the
BSF have approved the claim, we agreed the
amount included within the provision to the
supporting documentation from the DLUHC.
Challenge of assumptions: For those properties
without approved BSF claims we challenged the
categories and assumptions that the Group have
assigned in respect of property height, the extent
of remediation required and estimated cost by
inspecting third party evidence including reference
to actual quotes, comparison to properties with
approved BSF claims and invoices where
applicable and other relevant, available industry
data.
Sensitivity analysis: We performed analysis on the
potential range of possible outcomes in respect of
both the number of properties included and the
estimation of remediation costs under the Pledge
commitments.
Sector expertise: We utilised our own Quantity
surveyor specialists to assist us in challenging the
appropriateness of remediation assumptions.
Assessing transparency: We assessed whether
the Group’s disclosures in respect of the fire safety
provision, including the sensitivity of the provision
to changes in key assumptions, have been
adequately disclosed.
Our results:
We consider the amount of fire safety provision
recognised to be acceptable.
232 233
To the members of Redrow plc
Independent auditors report continued
risks of material misstatement within these. The
components within the scope of our work accounted for
the percentages illustrated below.
The Group team performed procedures on the exceptional
items excluded from profit before exceptional items and tax
in the current 53 week period ended 3 July 2022.
The component materialities ranged from £10.0 million to
£20.0 million (2021: £0.8 million to £15.5 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.
n Pre-exceptional PBT
n Group Materiality
Group Materiality
£20.4m (2021: £15.7m)
Group profit before exceptional items and tax
£410.0m (2021: £314.0m)
£20.0m
Range of materiality at 2 components
(£10m to £20m)
(2021: 3 components £0.8m to £15.5m)
£1.0m
Misstatements reported to the audit committee
(2021: £0.8 million)
£20.4m
Whole financial statements materiality
(2021: £15.7m)
£15.3m
Whole financial statements performance materiality
(2021: £10.2m)
Group revenue Group profit before
exceptional items and tax
Group profit before tax Group total assets
n Full scope for Group audit purposes 2022 n Full scope for Group audit purposes 2021
n Residual components 2022 n Residual components 2021
99%
(2021: 100%)
100
0
1
99
100%
(2021: 99%)
99
1
0
100
100%
(2021: 99%)
99
1
0
100
88%
(2021: 99%)
99
1
12
88
4. The impact of climate change on our audit
In planning our audit, we have considered the potential
impact of risks arising from climate change on the Group’s
business including the impact of the commitments made by
the Group and the changes to building and planning
regulations in respect of climate change on its financial
statements.
As part of our audit we have performed a risk assessment,
including making enquiries of management, reading board
minutes and applying our knowledge of the Group and
sector in which it operates in order to understand the
extent of the potential impact of climate change risk on the
Group’s financial statements. We also held discussions with
our own climate change professionals to challenge our risk
assessment.
Taking into account our risk assessment procedures we
have assessed the key area contained within the financial
statements for which climate change could have the
greatest impact to be the net realisable value of land not
yet in development and without planning due to future
potential changes to building and planning regulations in
respect of climate change. Our work on the carrying value
of land held for development is discussed in our cost of
sales recognition and carrying amount of both land held for
development Key Audit Matter. We concluded that climate
risk has no material effect on future build costs for those
sites currently in development and therefore on the cost of
sales recognition or the carrying amount of work in
progress.
We have read the Group’s TCFD disclosures in the Annual
Report and considered consistency with the financial
statements and our audit knowledge.
5. 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 Parent Company or to cease their
operations, and as they have concluded that the Group’s
and the Parent 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 were a
possible reduction in sales volumes and prices as well as
increased cost inflation as a consequence of changes in
the economic environment, leading to sustained medium-
term decline in revenue and profits.
We also considered less predictable, but realistic second
order impacts such as 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
assumptions 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 242 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.
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 Parent 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 223 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 Parent
Company’s use of that basis for the going concern
period, and we found the going concern disclosure on
page 242 to be acceptable; and
– the related statement under the Listing Rules set out
on page 223 is materially consistent with the financial
statements and our audit knowledge.
234 235
To the members of Redrow plc
Independent auditors report continued
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
Parent Company will continue in operation.
6. 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 any 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 and directors’ remuneration;
– using analytical procedures to identify any unusual or
unexpected relationships; and
– consultation with our own forensic professionals
regarding the identified fraud risks and the design of
the audit procedures planned in response to these.
This involved the forensic professional holding an
initial fraud brainstorming session as well as further
discussions between the engagement partner and the
forensic professional, particularly in respect of the
revised risk assessment and audit response following
the failure of one of the divisions to account accurately
for development profit. As a result extended
procedures were designed in respect of both that
division and other divisions.
We communicated identified fraud risks throughout the
audit team and remained alert to any indications 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 costs of sales recognition, the carrying
of land held for development and the fire safety provision.
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 the 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 fraud risks related to the cost of sales
recognition and carrying amount of land held for
development as well as related to the fire safety provision
in response to the significance of the accounting estimates.
Further detail in respect of cost of sales recognition and
carrying amount of land held for development (including
the failure of one of the divisions to account accurately for
development profit), as well as the fire safety provision 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;
and
– 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 discussion 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 directors
and other management over 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 indications
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
licence to operate. We identified the following areas as
those most likely to have such an effect: UK planning,
building and fire safety regulations, health and safety, data
protection laws, anti-bribery, anti money laundering and
sanctions checking, employment 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.
7. 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 on page 100 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 disclosures describing
these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated;
and
– 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
236 237
To the members of Redrow plc
Independent auditors report continued
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 110 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 Parent 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. We have
nothing to report in this respect.
8. 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.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
224, 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.
The Company is required to include these financial
statements in an annual financial report prepared using the
single electronic reporting format specified in the TD ESEF
Regulation. This auditor’s report provides no assurance
over whether the annual financial report has been
prepared in accordance with that format.
10. 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
13 September 2022
238 239
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Financial statements
Financial statements
CONSOLIDATED INCOME STATEMENT
STATEMENT OF COMPREHENSIVE INCOME
BALANCE SHEETS
53 WEEKS ENDED 3 JULY 2022/52 WEEKS ENDED 27 JUNE 2021
NOTE
2022
PRE-
EXCEPTIONAL
ITEM
£M
2022
EXCEPTIONAL
ITEM
£M
2022
TOTAL
£M
2021
£M
Revenue 2 2 ,1 4 0 – 2 ,1 4 0 1 ,939
Cost of sales 2 (1,62 4 ) (16 4 ) (1 ,7 8 8 ) (1 , 525 )
Gross profit 51 6 (1 64 ) 352 414
Administrative expenses (102 ) – (1 02 ) (93 )
Operating profit 2 41 4 (1 64 ) 250 321
Financial income 3 2 – 2 1
Financial costs 3 (6 ) – (6 ) (8 )
Net financing costs (4 ) – (4 ) (7 )
Profit before tax 41 0 (16 4 ) 246 314
Income tax expense 4 (82 ) 33 (49 ) (60 )
Profit for the year 328 (13 1 ) 1 97 25 4
Earnings per share – basic 6 96 .0 p 5 7. 7 p 7 3 . 7 p
– diluted 6 95.8 p 5 7. 5 p 7 3.6 p
53 WEEKS ENDED 3 JULY 2022/52
WEEKS ENDED 27 JUNE 2021
NOTE
GROUP COMPANY
2022
PRE-
EXCEPTIONAL
ITEM
£M
2022
EXCEPTIONAL
ITEM
£M
2022
TOTAL
£M
2021
TOTAL
£M
2022
TOTAL
£M
2021
TOTAL
£M
Profit for the year 32 8 (131 ) 197 25 4 – –
Other comprehensive
(expense)/income
Items that will not be
reclassified to profit or loss
Remeasurements of post
employment benefit
obligations 7e (1 ) – (1 ) 16 (1) 16
Deferred tax on remeasurements
taken directly to equity – – – (9 ) – (9)
Other comprehensive
(expense)/income for
the year net of tax (1 ) – (1 ) 7 (1) 7
Total comprehensive income/
(expense) for the year 19 327 (131 ) 196 261 (1) 7
The accompanying notes form an integral part of the financial statements.
NOTE
GROUP COMPANY
AS AT
3 JULY
2022
£M
AS AT
27 JUNE
2021
£M
AS AT
3 JULY
2022
£M
RESTATED †
AS AT
27 JUNE
2021
£M
RESTATED †
AS AT
28 JUNE
2020
£M
Assets
Intangible assets 8 1 – – – –
Property, plant and equipment 9 20 19 – – –
Lease right of use assets 10 5 6 – – –
Investments 11 – – – – –
Deferred tax assets 12 1 1 – – –
Retirement benefit surplus 7e 39 40 39 40 22
Trade and other receivables 13 – – 266 420 774
Total non-current assets 66 66 305 460 796
Inventories 14 2 ,74 0 2,5 13 – – –
Trade and other receivables 13 76 100 317 400
† 335 †
Current corporation tax 7 1 1 1 1
Cash and cash equivalents 15f 288 160 285 144 41
Total current assets 3, 111 2,7 74 603 545 377
Total assets 3 ,1 7 7 2,8 40 908 1,005
† 1,173 †
Equity
Retained earnings at 28 June 2021/29 June
2020/1 July 2019 1 ,76 8 1 , 522 878 886
† 950 †
Profit for the year 1 97 25 4 – – 2
Other comprehensive income for the year (1 ) 7 (1) 7 1
Dividend paid 5 (1 00 ) (21 ) (100) (21) (72)
Movement due to equity based share
options and owned shares held by EBT (18 ) 6 4 6
† 5 †
Retained earnings at 3 July 2022/27 June
2021/28 June 2020 19 1 ,846 1 ,76 8 781 878
† 886 †
Share capital 18 37 37 37 37 37
Share premium account 19 59 59 59 59 59
Other reserves 19 8 8 7 7 7
Total equity 1,950 1 ,87 2 884 981
† 989 †
Liabilities
Bank loans 15 – – – – 170
Trade and other payables 16 91 152 – – –
Deferred tax liabilities 12 15 15 10 10 –
Long-term provisions 17 110 34 – – –
Total non-current liabilities 216 20 1 10 10 170
Trade and other payables 16 914 76 7 14 14
† 14 †
Provisions 17 97 – – – –
Total current liabilities 1,0 11 76 7 14 14 14
Total liabilities 1, 227 968 24 24
† 184 †
Total equity and liabilities 3 ,1 7 7 2,8 40 908 1,005 † 1,173 †
The financial statements on pages 238 to 279 were approved by the Board of Directors on 13 September 2022 and were
signed on its behalf by:
RICHARD AKERS BARBARA RICHMOND
Director Director
Redrow plc Registered Number 2877315
† See page 242 and 243 for an explanation of prior year restatement of the Company balance sheet.
240 241
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Financial statements
Financial statements
STATEMENT OF CASH FLOWSSTATEMENT OF CHANGES IN EQUITY
THE GROUP
NOTE
SHARE
CAPITAL
£M
SHARE
PREMIUM
ACCOUNT
£M
OTHER
RESERVES
£M
RETAINED
EARNINGS
£M
TOTAL
£M
Total equity at 29 June 2020 37 59 8 1, 522 1 ,626
Profit for the year – – – 25 4 254
Other comprehensive income for the year – – – 7 7
Total comprehensive income relating to the year (net) – – – 261 261
Dividends paid – distributions to owners 5, 19 – – – (21 ) (21 )
Net purchase of own shares to satisfy share options 19 – – – – –
Other LTIP/DB/SAYE credit – – – 6 6
Total equity at 27 June 2021 37 59 8 1,7 68 1,872
Profit for the year – – – 197 1 97
Other comprehensive expense for the year – – – (1 ) (1 )
Total comprehensive income relating to the year (net) – – – 196 196
Dividends paid – distributions to owners 5, 19 – – – (100 ) (100 )
Net purchase of own shares to satisfy share options 19 – – – (22 ) (22 )
Other LTIP/DB/SAYE credit – – – 4 4
Total equity at 3 July 2022 37 59 8 1,846 1,950
THE COMPANY
NOTE
SHARE
CAPITAL
£M
SHARE
PREMIUM
ACCOUNT
£M
OTHER
RESERVES
£M
RETAINED
EARNINGS
£M
TOTAL
£M
Total equity at 29 June 2020 as reported † 37 59 7 839 942
Prior period adjustment for other LTIP/DB/SAYE credit
† – – – 47 47
Total equity at 29 June 2020 – restated 37 59 7 886 989
Profit for the year – – – – –
Other comprehensive income for the year – – – 7 7
Total comprehensive income relating to the year (net) – – – 7 7
Dividends paid – distributions to owners 5, 19 – – – (21) (21)
Other LTIP/DB/SAYE credit – as restated
† 19 – – – 6 6
Total equity at 27 June 2021 37 59 7 878 981
Profit for the year – – – – –
Other comprehensive expense for the year – – – (1) (1)
Total comprehensive expense relating to the year (net) – – – (1) (1)
Dividends paid – distributions to owners 5, 19 – – – (100) (100)
Other LTIP/DB/SAYE credit 19 – – – 4 4
Total equity at 3 July 2022 37 59 7 781 884
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 asfollows:
2022
£M
2021
£M
Holding company – –
Subsidiary companies 197 254
197 254
The accompanying notes form an integral part of the financial statements.
† See page 242 and 243 for an explanation of prior year restatement of the Company balance sheet.
NOTE
GROUP COMPANY
53 WEEKS
ENDED
3 JULY
2022
£M
52 WEEKS
ENDED
27 JUNE
2021
£M
53 WEEKS
ENDED
3 JULY
2022
£M
RESTATED †
52 WEEKS
ENDED
27 JUNE
2021
£M
Cash flows from operating activities
Profit for the year 197 25 4 – –
Depreciation and amortisation 5 7 – –
Financial income (2 ) (1 ) (4) (4)
Financial costs 6 8 2 4
Income tax expense 49 60 – –
Adjustment for non-cash items 7 4 – (1)
Decrease/(increase) in trade and other receivables 24 (62 ) – –
(Increase)/decrease in inventories (227 ) 72 – –
Increase/(decrease) in trade and other payables 86 (6 ) 2 2
Increase in provisions 173 26 – –
Cash inflow generated from operations 318 3 62 – 1
Interest paid (2 ) (4 ) (2) (4)
Tax paid (55 ) (54 ) – –
Net cash inflow/(outflow) from operating activities 2 61 304 (2) (3)
Cash flows from investing activities
Acquisition of software, property, plant and equipment (4 ) (2 ) – –
Advances and loans repaid by subsidiary undertakings – – 239 293
Interest received 1 – 4 4
Receipts from joint ventures – 9 – –
Net cash (outflow)/inflow from investing activities (3 ) 7 243 297
Cash flows from financing activities
Issue of bank borrowings – – – –
Repayment of bank borrowings – (17 0 ) – (170)
Payment of lease liabilities (3 ) (3 ) – –
Purchase of own shares (27 ) (1 ) – –
Dividend paid 5 (10 0 ) (21 ) (100) (21)
Net cash (outflow) from financing activities (130 ) (195 ) (100) (191)
Increase in net cash and cash equivalents 12 8 116 141 103
Net cash and cash equivalents at the beginning of
the year 160 44 144 41
Net cash and cash equivalents at the end of the year 20 288 160 285 144
The accompanying notes form an integral part of the financial statements.
† See page 243 and 244 for an explanation of prior year restatement of the Company cashflows.
242 243
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Financial statements
Financial statements
ACCOUNTING POLICIES
Accounting policies
BASIS OF PREPARATION
The Group financial statements were prepared in
accordance with UK-adopted international accounting
standards (IFRS) and applicable law. The Parent Company's
financial statements have been prepared in accordance
with UK-adopted international accounting standards (IFRS)
and applied in accordance with the provisions of the
Companies Act 2006 and applicable law. 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 dateand 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).
Stock Exchange and domiciled in the UK .
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 has a £350m Revolving Credit Facility (RCF)
(2021: £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 (2021: September 2025)
and is a committed unsecured facility. As at 13 September
2022, £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 3 July
2022 and 13 September 2022 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 incorporate
assumptions about the timing of legal completions of new
homes and land purchases, build cost inflation, profitability
and working capital requirements. 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
• In addition to the build inflation incorporated within the
base case Board approved budgeted costs, an additional
5% build cost inflation increase has been applied to all
build costs from Q1 FY23 and further increases of 5%
from Q1 FY24 and 2% from Q1 FY25.
These downside assumptions reflect the further potential
impact of the war in Ukraine, disruption in the energy and
fuel market, increasing inflation, increased economic
uncertainty, 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 forecast period and have therefore adopted
the going concern basis of accounting in preparing these
financial statements.
PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies have been applied
consistently with the exception of the prior period
restatement noted below:
Prior period restatements
(i) Share based payments
The Company has the following share-based payments
schemes: Save As You Earn Share Option scheme, Long
Term Incentive scheme and Deferred Bonus Incentive. It is
now recognised by the Directors that accounting treatment
was incorrect in the Company financial statements for
these share awards to the employees of both the Company
and its subsidiaries. Whilst the cost of the share-based
payments to employees of the Company have been
correctly included in the Company’s Income Statement, the
corresponding credit had been incorrectly recorded in
Accruals rather than in Equity. In respect of share awards to
employees of the Company’s subsidiaries, no accounting
entries had been recorded for these awards nor for the
subsequent recharge to the related subsidiaries that had
occurred. These awards which had been recharged should
have been recorded as an Intercompany receivable with a
corresponding credit to Equity with a nil impact to cost of
investments in subsidiaries.
The changes, which have now been made to correct these
matters by the means of a prior year restatements in the
manner set out below, have no effect on the cash position
or profit of the Group or Company and has no further
impact on the Group’s or Company’s financial statements
beyond that set out below.
(ii) Statement of cash flows
The movement in trade and other receivables presented in
the current and prior period Company Statement of Cash
Flows represents cash receipts from the repayment of
advances and loans due from subsidiary undertakings.
It is now recognised by the Directors that the movement in
trade and other receivables of £293m presented within the
Company Statement of Cash Flows for the 52 week period
ended 27 June 2021 was incorrectly presented within cash
flows from operating activities when it should have been
included within cash flows from investing activities. In
preparing the Company Statement of Cash Flows in the
financial statements for the 53 week period ended 3 July
2022, the Directors have therefore restated the
comparative amounts to now present the movement in
trade and other receivables of £293m within cash flows
from investing activities. This change in presentation within
the Company Statement of Cash Flows has no effect on the
cash position of the Group or Company in their balance
sheets and has no further impact on the Group’s or
Company’s financial statements. The effect of the
restatement on the Company Statement of Cash Flows in
respect of the comparative amount for the 52 week period
ended 27 June 2021 is set out below:
The effects of the restatement on the Company’s Balance sheet at 28 June 2020 and as at 27 June 2021 is set out
below:
2021
(AS PREVIOUSLY
REPORTED)
£M
RESTATEMENT
£M
2021
(AS RESTATED)
£M
Trade and other receivables 361 39 400
Total assets 966 39 1,005
Retained earnings 825 53 878
Total equity 928 53 981
Trade and other payables – current 28 (14) 14
Total liabilities 38 (14) 24
Total equity and liabilities 966 39 1,005
For the period ended 27 June 2021 the restatements have resulted in an increase in trade and other receivables of £39m
to account for the share awards to employees of the Company’s subsidiaries, a reduction in trade and other payables
– current of £14m to account for the share awards to employees of the Company and a corresponding increase in Equity
of £53m.
2020
(AS PREVIOUSLY
REPORTED)
£M
RESTATEMENT
£M
2020
(AS RESTATED)
£M
Trade and other receivables 300 35 335
Total assets 1,138 35 1,173
Retained earnings 839 47 886
Total equity 942 47 989
Trade and other payables – current 26 (12) 14
Total liabilities 196 (12) 184
Total equity and liabilities 1,138 35 1,173
For the period ended 28 June 2020 the restatements have resulted in an increase in trade and other receivables of
£35m to account for the share awards to employees of the Company’s subsidiaries, a reduction in trade and other
payables – current of £12m to account for the share awards to employees of the Company and a corresponding increase
in Equity of £47m.
244 245
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Redrow plc Annual Report 2022
Financial statements
Financial statements
Accounting policies continued
Statement of cash flows
COMPANY
52 WEEKS
ENDED 27 JUNE
2021 – AS
PREVIOUSLY
REPORTED
52 WEEKS
ENDED
27 JUNE 2021
– RESTATED
AMOUNT
Cash flows from operating
activities
Decrease/(increase) in trade
and other receivables 293
Cash flows from investing
activities
Advances and Loans repaid
by/(advanced to) subsidiary
undertakings 293
The principal accounting policies are outlined below:
IMPACT OF NEW STANDARDS AND
INTERPRETATIONS
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 9, IAS 39 and IFRS 7 ‘Interest Rate
Benchmark Reform 2’
b) The following new standards and amendments to
standards have been issued but are not effective for the
financial year beginning 28 June 2021 and have not
been early adopted:
• Amendments to IAS 1 ‘Classification of Liabilities as
Current or Non-current’
• Amendments IAS 16 ‘Property, Plant and Equipment’
• Amendments to IAS 37 ‘Onerous Contracts ‘
• Annual Improvements to IFRS Standards 2018-2020
• Amendments to IFRS 3 ‘Reference to the Conceptual
Framework’
• Definition of Accounting Estimates (Amendments to
IAS 8)
• Amendments to IAS 1 ‘Presentation of Financial
Statements’ and IFRS Practice Statement 2 Making
Materiality Judgements
• IFRS 17 'Insurance Contracts'
The new standards and amendments to the standards
noted above are expected to have no significant impact on
the financial statements.
BASIS OF CONSOLIDATION
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 3 July 2022 being a 53 week year (2021: 27 June 2021
being a 52 week year).
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 inequity.
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 theGroup.
All inter-company transactions and balances between
Group companies are eliminated on consolidation.
b. Interests in joint ventures
Whilst the Group has no current 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.
REVENUE AND PROFIT RECOGNITION
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.
PART EXCHANGE PROPERTIES
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.
SEGMENTAL REPORTING
The main operation of the Group is focused on
housebuilding.
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 e.g. 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 Financial Review, the Group has provided
information on land holdings (page 96) and homes revenue
proportions (page 94) 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.
EXCEPTIONAL ITEMS
Exceptional items are those which in the opinion of the
Board, are material by size or nature, non-recurring,
outside the normal course of business and of such
significance that they require separate disclosure.
NET FINANCING COSTS
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.
INCOME AND DEFERRED TAX
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. Current tax from 1 April 2022 includes
Residential Property Developer Tax following its
introduction by HMRC.
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 oftaxable profit.
246 247
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Financial statements
Financial statements
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 atthe rates substantively
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.
SOFTWARE AS A SERVICE (SaaS)
Implementation costs including costs to configure or
customise a cloud provider's application software are
recognised as administrative expenses when the services
are received.
INTANGIBLE ASSETS – COMPUTER SOFTWARE
(NON SaaS SOFTWARE)
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 toadministrative expenses. These are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying values may not be
recoverable.
PROPERTY, PLANT AND EQUIPMENT
Freehold property comprises offices or other buildings held
for administrative purposes. Freehold property is shown at
cost less thesubsequent 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 50 years
Plant and machinery 5-10 years
Fixtures and fittings 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.
INVESTMENT IN SUBSIDIARY COMPANIES
In the parent company books, the investment in its
subsidiaries is held at cost less any impairment.
LEASES
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.
INVENTORIES
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. 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,
considering the planning status in respect of undeveloped
land and environmental factors likely to impact these in the
relevant time horizon.
This net realisable value provision will be closely monitored
for adequacy and appropriateness as regards under and
over provision toreflect circumstances at future balance
sheet dates. Any material change to the underlying
provision will be reflected through cost of sales.
FORWARD LAND
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.
EMPLOYEE BENEFITS
a. Pension obligation
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 asthey 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 credits are recognised immediately inincome.
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 grantand 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.
Accounting policies continued
248 249
Redrow plc Annual Report 2022
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Financial statements
Financial statements Financial statements
NOTES TO THE FINANCIAL STATEMENTS
Accounting policies continued Notes to the financial statements
FINANCIAL INSTRUMENTS
a. Land creditors
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 overthe settlement period via financing
income.
d. Cash and cash equivalents
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 ofcash and
cash equivalents for the purpose of the statement of
cashflows.
e. Borrowings and trade payables
Interest bearing borrowings and trade payables are
recorded when theproceeds 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.
PROVISIONS
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.
ONEROUS CONTRACTS
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.
SHARE CAPITAL
Ordinary shares are classed as equity.
DIVIDEND DISTRIBUTION
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.
1. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
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 judgements
outlined below.
In April 2022, the Group signed up to the Government’s Building Safety Pledge in respect of funding the remediation of
life critical fire safety issues on buildings over 11 metres in which the Group were involved, whether or not it constructed
them, going back 30 years. As an additional £164m legacy fire safety provision was required in respect of buildings the
Group has agreed to remediate solely as a result of signing the voluntary Building Safety Pledge, the Directors believe
that this should be treated as exceptional as it is outside the normal course of business, non-recurring and material by
size and nature, in line with the accounting policy. Exceptional items are disclosed separately on the face of the
consolidated income statement. As at 3 July 2022, the Group has a total legacy fire safety provision of £200m: being
£164m expensed through the consolidated income statement in the year as an exceptional item, £10m expensed through
the consolidated income statement in the year as ordinary trading. i.e. pre-exceptional and £26m expensed through the
income statement in prior years as ordinary trading reflecting buildings the Group had a legal or constructive obligation
to remediate pre-pledge. Management have not recognised any potential cost recoveries when calculating this
provision. Any such recoveries realised will be separately disclosed as exceptional items.
As noted in the accounting policy, in line with industry practice, the Group treats cash paid in respect of land, including
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 consider 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 3 July 2022,
including a review of land owned without a residential planning consent, 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 or planning regulation or expectation 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.
Legacy fire safety provision
Redrow is predominantly a housebuilder, however the Group historically built a small number of high rise buildings,
mostly on a design and build basis by main contractors. As a result of signing the Government’s Building Safety Pledge,
the number of buildings in scope in respect of which the Group has a present obligation in respect of historical events
increased. The Group is committed to funding the remediation of life critical fire safety issues on buildings over 11 metres
in which the Group was involved going back 30 years. The Legacy fire safety provision reflects the estimated cost of
works outstanding to complete the remediation of life critical fire safety issues on all identified buildings within scope. In
estimating the cost of the works, Management has used relevant Building Safety Fund cost information and other
external information as the basis of its estimates and classified buildings identified as in scope on the basis of a high
level risk assessment including their EWS1 (External Wall Fire Review) status. However, these estimates are inherently
uncertain as:
250 251
Redrow plc Annual Report 2022
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Financial statements
Financial statements
Notes to the financial statements continued
2. REVENUE AND OPERATING PROFIT
a. Revenue
An analysis of the Group’s revenue, which is wholly generated in the UK in 2022 and 2021, is as follows:
2022
£M
2021
£M
Revenue from the sale of new housing 2,119 1,902
Revenue from the sale of land 21 37
2,140 1,939
Included within Revenue from the sale of new housing is £189m (2021: £236m) 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 £36m (2021: £68m) 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 (2021: £nil).
NOTE
2022
£M
2021
£M
Contract assets 13 23 21
Contract liabilities 16 36 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 £98m (2021: £213m) expected to be recognised in future years in respect of
contracts on which revenue is recognised over time:
2023 2024 2025 TOTAL
Year ending June £m 86 12 – 98
Year ending June % 88 12 – 100
1. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY CONTINUED
Legacy fire safety provision continued
• this is a highly complex area involving bespoke buildings for which investigations and assessments will be ongoing for
some time;
• whilst approximately 50% of the provision is based on claims notified by BSF or detailed fire safety reports and
costings, in several cases we are taking over financial responsibility for the remedial works and the actual costs may
differ to the amounts notified by BSF; and
• the remaining properties have higher estimation uncertainty as our assessment is at a more preliminary stage, and the
contingencies included in this element of the provision reflect the increased uncertainty over the nature and cost of
the remediation required.
It is therefore possible these estimates, based on the pledge given, will change over time as more accurate cost
information is obtained and as the leaseholders or ourselves have any success in recovering costs incurred by Redrow
from other third parties. As a result of this, whilst these estimates may reduce significantly in light of such factors, the
Group does not expect the estimates to increase significantly. If possible costs were underestimated or overestimated
by 10% then profit before tax in the period would reduce or increase respectively by c£20m, c8%.
Management have not recognised any potential cost recoveries when calculating this provision. Any such recoveries
realised, together with any adjustment to the amounts provided, will be separately disclosed as exceptional items in
future years.
Pensions
This is not considered to have significant estimation uncertainty based on sensitivities but has been included as it is a
complex estimate.
The Group has utilised assumptions including price inflation rate, 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 is included on page 262.
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.
252 253
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Financial statements
Financial statements
Notes to the financial statements continued
2. REVENUE AND OPERATING PROFIT CONTINUED
b. Operating profit
NOTE
2022
£M
2021
£M
Operating profit is stated after charging:
Inventories expensed in the year 14 1,715 1,465
Amortisation 8 – 2
Depreciation – Property, plant and equipment 9 2 2
Depreciation – Lease right of use assets 10 3 3
Research and development expenditure 1 –
Exceptional item – Legacy fire safety provision 164 –
Auditors’ remuneration – Fees payable to the Company’s Auditors for audit services
(i)
1 1
– Fees payable to the Company’s Auditors for other services
(ii)
– –
Exceptional item in cost of sales
In April 2022, the Group signed up to the Government’s Building Safety Pledge in respect of funding the remediation of
life critical fire safety issues on buildings over 11 metres in which the Group were involved, whether or not it constructed
them, going back 30 years. An additional £164m legacy fire safety provision was required and charged to cost of sales in
respect of buildings the Group has agreed to remediate solely as a result of signing the voluntary Building Safety Pledge.
This has been treated as exceptional as it is outside the normal course of business, non-recurring and material by size
and nature and of such significance as to require separate disclosure, in line with the accounting policy. A copy of the
signed pledge letter can be found on our website www.redrowplc.co.uk.
Fees payable to the Company’s Auditors comprise:
(i) fees payable for the audit of parent company and consolidated financial statements £157,500 (2021: £141,250) and
fees payable for the audit of the Company’s subsidiaries pursuant to legislation £472,500 (2021: £423,750).
(ii) Auditors’ remuneration for other services comprised £nil (2021: £75,000) in respect of an independent review of
thehalf-yearly financial statement.
The 2022 ratio of non-audit fees to audit fees is 0:1 (2021: 1:7.53).
3. NET FINANCING COSTS
2022
£M
2021
£M
Interest payable on bank loans (2) (5)
Imputed interest on deferred land creditors (4) (3)
Financial costs (6) (8)
Other interest receivable 2 1
Financial income 2 1
Net financing costs (4) (7)
4. INCOME TAX EXPENSE
2022
PRE-
EXCEPTIONAL
ITEM
£M
2022
EXCEPTIONAL
ITEM
£M
2022
TOTAL
£M
2021
£M
Current tax charge
UK Corporation Tax in respect of current year 82 (33) 49 59
Adjustment in respect of prior years – – – –
Current tax charge/(credit) 82 (33) 49 59
Deferred tax
Origination and reversal of temporary differences – – – 1
Adjustment in respect of prior years – – – –
Deferred tax charge – – – 1
Total income tax charge/(credit) income statement 82 (33) 49 60
Reconciliation of tax charge for the year
Profit before tax 410 (164) 246 314
Tax calculated at UK Corporation Tax rate at 19.0% (2021: 19.0%) 78 (31) 47 60
Residential Property Developer Tax at 1.0% (2021: N/A) 4 (2) 2 –
Tax charge for the year 82 (33) 49 60
Deferred tax recognised directly in equity
Relating to pension scheme – – – 9
– – – 9
Residential Property Developer Tax commenced on 1 April 2022 at a rate of 4.0% per annum, hence 1.0% for the 3
months ended 3 July 2022.
Current income tax charge in the Company is £nil (2021: £nil).
Information on the impact of future tax rate changes is included in note 12.
5. DIVIDENDS
The following dividends were paid by the Group:
2022
£M
2021
£M
Prior year final dividend per share of 18.5p (2021: nil p); Current year interim dividend per
share of 10.0p (2021: 6.0p) 100 21
100 21
The Board is proposing a final dividend of £77m being 22.0p per share (2021: £65m being 18.5p per share) subject to
Shareholder approval at the Annual General Meeting on 11 November 2022.
254 255
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Financial statements
Financial statements
Notes to the financial statements continued
6. EARNINGS PER ORDINARY SHARE
The basic earnings per share calculation for the 53 weeks ended 3 July 2022 is based on the weighted average number
of shares in issue during the period of 342m (2021: 344m) excluding those held in trust under the Redrow Long Term
Incentive Plan (11mshares(2021: 8m 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 53 weeks ended 3 July 2022
UNDERLYING – PRE-EXCEPTIONAL ITEM
EARNINGS
£M
NUMBER
OF SHARES
MILLIONS
PER SHARE
PENCE
Basic earnings per share 328 342 96.0
Effect of share options and SAYE – 1 (0.2)
Diluted earnings per share 328 343 95.8
See note 23.
STATUTORY
EARNINGS
£M
NUMBER
OF SHARES
MILLIONS
PER SHARE
PENCE
Basic earnings per share 197 342 57.7
Effect of share options and SAYE – 1 (0.2)
Diluted earnings per share 197 343 57.5
For the 52 weeks ended 27 June 2021
EARNINGS
£M
NUMBER
OF SHARES
MILLIONS
PER SHARE
PENCE
Basic earnings per share 254 344 73.7
Effect of share options and SAYE – 1 (0.1)
Diluted earnings per share 254 345 73.6
7. EMPLOYEES
a. Cost (including Directors)
GROUP COMPANY
2022
£M
2021
£M
2022
£M
2021
£M
Wages and salaries 120 109 2 2
Social security costs 16 13 1 1
Other pension costs 10 9 – –
Share-based payments 5 6 1 1
151 137 4 4
b. Number
The monthly average number of persons employed by the Group was:
GROUP COMPANY
2022
NUMBER
2021
NUMBER
2022
NUMBER
2021
NUMBER
Directors and administrative staff 907 880 7 8
Other personnel 1,340 1,328 – –
2,247 2,208 7 8
7. EMPLOYEES CONTINUED
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:
2022
£M
2021
£M
Salaries and short-term employee benefits 5 5
Share-based payments 2 2
7 7
The number of Directors where retirement benefits are accruing in respect of defined benefit schemes are 1 (2021: 2).
The aggregate amount of gains made by Directors on the exercise of share options was £0.3m (2021: £0.5m).
Detailed disclosure of Directors’ emoluments and interests in shares are included in the Directors’ Remuneration Report
on pages 192 to 213, notably the 'Single Total Figure of Remuneration Table (Audited)' on page 205 which details
remuneration paid to or received by directors in respect of qualifying services, and the 'Statement of Shareholding and
Scheme Interests (Audited)' on pages 208 and 209.
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 ofgrant, 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.
2022 2021
Options granted during the year 792,961 1,634,869
Date of grant 1 January 2022 1 January 2021
Fair value at measurement date £2.30 £1.65
Share price £6.55 £4.72
Exercise price £5.24 £3.78
Option life (contract length) 3/5 years 3/5 years
Expected dividend yield 3.38% 3.38%
Risk free interest rate 1.5% 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 21 September 2021 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 198.
256 257
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Financial statements
Financial statements
Notes to the financial statements continued
7. EMPLOYEES CONTINUED
d. Share-based payments continued
The LTIP has been valued using the Black-Scholes pricing model.
2022 2021
Options granted during the year 461,937 763,758
Date of grant 21 September 2021 22 September 2020
Fair value at the measurement date £7.146 £4.053
Share price £7.146 £4.053
Exercise price £0.00 £0.00
Expected volatility N/A* N/A*
Option life 3 years 3 years
Expected dividend yield N/A N/A
Risk free interest rate 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 21 September 2021 comprises £7.146 in respect of
non-market based performance conditions.
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.
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 3 July 2022, Deferred Bonus Incentive Tranche 1 and 2
were absolute contractual entitlements to a small number of individuals and were granted on 21 September 2021.
The DBI has been valued using the Black-Scholes pricing model.
2022
TRANCHE 1
2022
TRANCHE 2
SINGLE
TRANCHE 2021
2021
TRANCHE 1
2021
TRANCHE 2
Options granted during the year 347,870 347,945 147,329 37,297 37,302
Date of grant
21 September
2021
21 September
2021
15 March
2021
22 September
2020
22 September
2020
Fair value at the measurement date £7.146 £7.146 £6.172 £4.053 £4.053
Share price £7.146 £7.146 £6.172 £4.053 £4.053
Exercise price £0.00 £0.00 £0.00 £0.00 £0.00
Expected volatility N/A* N/A* N/A* N/A* N/A*
Option life 1 year 2 years 1 year 1 year 2 years
Expected dividend yield N/A N/A N/A N/A N/A
Risk free interest rate N/A* N/A* N/A* N/A* N/A*
* For nil-cost awards not subject to a market based condition, volatility and risk free rate are not applicable.
7. EMPLOYEES CONTINUED
d. Share-based payments continued
Share options outstanding
The following share options were outstanding at 3 July 2022:
TYPE OF SCHEME DATE OF GRANT
NUMBER
OF OPTIONS
2022
NUMBER
OF OPTIONS
2021
EXERCISE
PRICE
Long Term Share Incentive 2018 10 September 2018 – 272,244 –
Long Term Share Incentive 2019 11 September 2019 411,800 411,800 –
Long Term Share Incentive 2020 22 September 2020 712,870 712,870 –
Long Term Share Incentive 2021 21 September 2021 461,937 – –
Deferred Bonus Incentive 2012 – Tranche 1 23 October 2012 4,656 4,656 –
Deferred Bonus Incentive 2012 – Tranche 2 23 October 2012 4,656 4,656 –
Deferred Bonus Incentive 2013 – Tranche 1 24 September 2013 4,642 4,642 –
Deferred Bonus Incentive 2013 – Tranche 2 24 September 2013 4,642 4,642 –
Deferred Bonus Incentive 2014 – Tranche 1 8 September 2014 3,615 3,615 –
Deferred Bonus Incentive 2014 – Tranche 2 8 September 2014 3,615 3,615 –
Deferred Bonus Incentive 2015 – Tranche 1 14 September 2015 3,069 3,069 –
Deferred Bonus Incentive 2015 – Tranche 2 14 September 2015 3,070 3,070 –
Deferred Bonus Incentive 2016 – Tranche 1 12 September 2016 5,136 5,136 –
Deferred Bonus Incentive 2016 – Tranche 2 12 September 2016 10,015 11,220 –
Deferred Bonus Incentive 2017 – Tranche 1 11 September 2017 7,142 7,193 –
Deferred Bonus Incentive 2017 – Tranche 2 11 September 2017 7,617 9,694 –
Deferred Bonus Incentive 2018 – Tranche 1 10 September 2018 16,563 19,920 –
Deferred Bonus Incentive 2018 – Tranche 2 10 September 2018 56,436 83,123 –
Deferred Bonus Incentive 2019 – Tranche 1 11 September 2019 59,466 91,653 –
Deferred Bonus Incentive 2019 – Tranche 2 11 September 2019 95,503 358,959 –
Deferred Bonus Incentive 2020 – Tranche 1 22 September 2020 – 31,013 –
Deferred Bonus Incentive 2020 – Tranche 2 22 September 2020 26,278 31,016 –
Deferred Bonus Incentive 2020 – Single Tranche 15 March 2021 58,094 142,569 –
Deferred Bonus Incentive 2021 – Tranche 1 21 September 2021 169,159 – –
Deferred Bonus Incentive 2021 – Tranche 2 21 September 2021 330,159 – –
Save As You Earn 1 January 2016 – 10,140 £3.70
Save As You Earn 1 January 2017 9,843 73,400 £3.20
Save As You Earn 1 January 2018 43,430 71,482 £4.90
Save As You Earn 1 January 2019 42,257 369,466 £4.62
Save As You Earn 1 January 2020 318,335 371,617 £4.94
Save As You Earn 1 January 2021 1,398,148 1,549,436 £3.78
Save As You Earn 1 January 2022 717,664 – £5.24
The total share options outstanding at 3 July 2022 under the LTIP, Deferred Bonus Incentive Plan and the Save As You
Earn schemes represent 1.4% of the issued share capital (2021: 1.3%).
258 259
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Financial statements
Financial statements
Notes to the financial statements continued
7. EMPLOYEES CONTINUED
d. Share-based payments continued
Movements in the year
The number and weighted average exercise prices of share options is as follows:
NUMBER
OF OPTIONS
2022
WEIGHTED
AVERAGE
EXERCISE PRICE
2022
NUMBER
OF OPTIONS
2021
WEIGHTED
AVERAGE
EXERCISE PRICE
2021
Long Term Share Incentive scheme:
Outstanding at the beginning of the year 1,396,914 – 1,005,256 –
Lapsed during the year (272,244) – (372,100) –
Exercised during the year – – – –
Granted during the year 461,937 – 763,758 –
Outstanding at the end of the year 1,586,607 – 1,396,914 –
Exercisable at the end of the year – – – –
Deferred Bonus Incentive scheme:
Outstanding at the beginning of the year 823,461 – 1,446,644 –
Lapsed during the year (38,613) – (61,319) –
Exercised during the year (607,130) – (783,792) –
Granted during the year 695,815 – 221,928 –
Outstanding at the end of the year 873,533 – 823,461 –
Exercisable at the end of the year 374,215 – 267,829 –
Save As You Earn scheme:
Outstanding at the beginning of the year 2,445,541 £4.09 1,882,162 £4.72
Lapsed during the year (315,864) £4.43 (654,768) £4.68
Exercised during the year (392,961) £4.38 (416,722) £4.76
Granted during the year 792,961 £5.24 1,634,869 £3.78
Outstanding at the end of the year 2,529,677 £4.37 2,445,541 £4.09
Exercisable at the end of the year 38,292 £4.37 52,367 £4.67
The weighted average share price at the date of exercise of share options exercised during the year was £6.27 (2021:
£5.16).
The options outstanding at 3 July 2022 had a range of exercise prices of £nil to £5.24 (2021: £nil to £4.94) and a
weighted average remaining contractual life of 5.0 years (2021: 5.1 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 £5m (2021: charge £6m).
7. EMPLOYEES CONTINUED
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 charge for the year was £11m (2021: credit of £7m). A charge of £1m related to the defined benefit
section of the Scheme (2021: credit of £16m), with £nil being charged to the income statement (2021: charge of £nil) and a
charge of £1m to the statement of comprehensive income (2021: credit of £16m). The charge arising from the defined
contribution section was £10m (2021: £9m). 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 Actuarial Funding 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 remeasurements 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 3 July 2022 by a qualified actuary for the purposes of these financial statements.
The Group contributed £nil to the Scheme in the year ended 3 July 2022 (2021: £2.3m) and expects to contribute £nil to
the Scheme in the year ending 2 July 2023.
The major financial assumptions used in arriving at the IAS 19R valuation were:
2022 2021
Long-term rate of increase in pensionable salaries N/A N/A
Rate of increase of benefits in payment (lesser of 5% per annum and RPI)
1
3.1% 3.2%
Rate of increase of benefits in payment (lesser of 2.5% per annum and RPI)
2
2.0% 2.1%
Discount rate 3.8% 1.9%
Inflation assumption – RPI 3.3% 3.4%
– CPI 3.1% 2.8%
1
In respect of pensions in excess of the guaranteed minimum pension earned prior to 30 June 2006.
2
In respect of pensions earned after 30 June 2006. Other pension increases are valued in a consistent manner.
260 261
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Financial statements
Financial statements
Notes to the financial statements continued
7. EMPLOYEES CONTINUED
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: SAPS3 CMI_2021 1.50% Long Term Trend (2021: SAPS3 CMI_2020 1.50% Long Term Trend)
The life expectancies from age 65 implied by these tables for typical members are:
Pensioner currently aged 65: Male 22.3 years (2021: Male 22.3 years) Female 24.6 years (2021: Female 24.6 years)
Future pensioner currently aged 40: Male 24.4 years (2021: Male 24.4 years) Female 26.8 years (2021: Female 26.8 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
2022
£M
QUOTED
MARKET PRICE IN
ACTIVE MARKET
2022
£M
NO QUOTED
MARKET PRICE IN
ACTIVE MARKET
2022
£M
TOTAL
2021
£M
QUOTED
MARKET PRICE IN
ACTIVE MARKET
2021
£M
NO QUOTED
MARKET PRICE IN
ACTIVE MARKET
2021
£M
TOTAL
Equities 50 – 50 74 – 74
Debt instruments 56 – 56 70 – 70
Real estate 1 – 1 2 – 2
Investment funds 4 – 4 5 – 5
Other 7 – 7 6 – 6
Cash and cash equivalents 16 – 16 17 – 17
Insurance policies – 2 2 – 3 3
Total market value of assets 134 2 136 174 3 177
Present value of obligations (97) (137)
Surplus in the Scheme 39 40
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.
7. EMPLOYEES CONTINUED
e. Retirement benefit schemes continued
The defined benefit obligation can be approximately attributed to the scheme members as follows:
2022
%
2021
%
Deferred members 62 66
Pensioner members 38 34
100 100
All benefits are vested at 3 July 2022 (unchanged from 27 June 2021).
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:
GROUP AND COMPANY
2022
£M
2021
£M
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 (40) 3
Actuarial movements arising from changes in demographic assumptions – (4)
Actuarial movements arising from changes in financial assumptions 40 1
Actuarial movements arising from experience adjustments (1) 16
(1) 16
(1) 16
The amount included in the balance sheet arising from the surplus in respect of the Group’s defined benefit section is as
follows:
262 263
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Financial statements
Financial statements
Notes to the financial statements continued
7. EMPLOYEES CONTINUED
e. Retirement benefit schemes continued
GROUP AND COMPANY
2022
£M
2021
£M
Balance sheet surplus
At start of year 40 22
Amounts (charged)/credited against statement of comprehensive income (1) 16
Employer contributions paid – 2
At end of year 39 40
Changes in the present value of the defined benefit obligation:
At start of year 137 151
Interest expense 3 2
Benefit payments (4) (3)
Actuarial movements arising from changes in demographic assumptions – 4
Actuarial movements arising from changes in financial assumptions (40) (1)
Actuarial movements arising from experience adjustments 1 (16)
At end of year 97 137
Changes in the fair value of the Scheme’s assets:
At start of year 177 173
Interest income 3 2
Return on scheme assets excluding interest income (40) 3
Normal employer contributions – 2
Benefit payments (4) (3)
At end of year 136 177
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 259). All figures are before allowing for deferred tax.
ITEM
APPROXIMATE
AMOUNT
2022
APPROXIMATE
AMOUNT
2021
Present value of defined benefit obligation (£m)
Discount rate -25 basis points 101.1 144.0
Discount rate +25 basis points 92.4 130.0
Price inflation rate -25 basis points 92.6 131.8
Price inflation rate +25 basis points 100.9 142.0
Post-retirement mortality assumption – 1 year age adjustment 99.3 141.9
Weighted average duration of defined benefit obligation (in years)
Discount rate -25 basis points 18.2 20.5
Discount rate +25 basis points 17.8 20.4
8. INTANGIBLE ASSETS
The Group
GOODWILL
£M
SOFTWARE
£M
TOTAL
£M
Cost
At 29 June 2020 1 2 3
Additions – – –
Disposals – – –
At 27 June 2021 1 2 3
Additions – 1 1
Disposals – – –
At 3 July 2022 1 3 4
Accumulated amortisation
At 29 June 2020 – 1 1
Charge 1 1 2
Disposals – – –
At 27 June 2021 1 2 3
Charge – – –
Disposals – – –
At 3 July 2022 1 2 3
Net book value
At 3 July 2022 – 1 1
At 27 June 2021 – – –
At 28 June 2020 1 1 2
264 265
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Financial statements
Financial statements
Notes to the financial statements continued
9. PROPERTY, PLANT AND EQUIPMENT
The Group
FREEHOLD
PROPERTY
£M
PLANT AND
MACHINERY
£M
FIXTURES
AND FITTINGS
£M
TOTAL
£M
Cost
At 29 June 2020 24 3 11 38
Additions – – 2 2
Disposals – – (2) (2)
At 27 June 2021 24 3 11 38
Additions – – 3 3
Disposals – – – –
At 3 July 2022 24 3 14 41
Accumulated depreciation
At 29 June 2020 6 3 10 19
Charge 1 – 1 2
Disposals – – (2) (2)
At 27 June 2021 7 3 9 19
Charge – – 2 2
Disposals – – – –
At 3 July 2022 7 3 11 21
Net book value
At 3 July 2022 17 – 3 20
At 27 June 2021 17 – 2 19
At 28 June 2020 18 – 1 19
10. LEASE RIGHT OF USE ASSETS
The Group
PROPERTY
£M
PHOTOCOPIERS
£M
VEHICLES
£M
TOTAL
£M
Cost
At 29 June 2020 4 1 5 10
Additions – – 3 3
Disposals – – (1) (1)
At 27 June 2021 4 1 7 12
Additions – – 2 2
Disposals – – – –
At 3 July 2022 4 1 9 14
Accumulated depreciation
At 29 June 2020 1 – 2 3
Charge 1 – 2 3
At 27 June 2021 2 – 4 6
Charge – – 3 3
At 3 July 2022 2 – 7 9
Net book value
At 3 July 2022 2 1 2 5
At 27 June 2021 2 1 3 6
At 29 June 2020 3 1 3 7
266 267
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Financial statements
Financial statements
Notes to the financial statements continued
10. LEASE RIGHT OF USE ASSETS CONTINUED
The Group continued
AS AT
3 JULY
2022
£M
AS AT
27 JUNE
2021
£M
Lease liabilities
Maturity analysis – contractual undiscounted cash flows
Less than one year 2 3
One to five years 4 4
More than five years – –
Total undiscounted lease liabilities 6 7
On implementation of IFRS 16 leases, lease payment commitments are reported within trade and other payables.
AS AT
3 JULY
2022
£M
AS AT
27 JUNE
2021
£M
Lease liabilities included in the statement of financial position
Current 2 2
Non-current 4 4
6 6
AS AT
3 JULY
2022
£M
AS AT
27 JUNE
2021
£M
Amounts recognised in profit or loss
Interest on lease liabilities – –
AS AT
3 JULY
2022
£M
AS AT
27 JUNE
2021
£M
Amounts recognised in the statement of cashflows
Total cash outflow for leases 3 3
11. INVESTMENTS
a. Investments
GROUP COMPANY
2022
£M
2021
£M
2022
£M
2021
£M
Joint ventures – – – –
– – – –
b. Investments in subsidiary undertakings
COMPANY
£M
At 27 June 2021 and 3 July 2022 –
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
3July2022 is shown on page 268. 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
268 269
Redrow plc Annual Report 2022
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Financial statements
Financial statements
Notes to the financial statements continued
11. INVESTMENTS CONTINUED
b. Investments in subsidiary undertakings continued
Subsidiaries
Name
COMPANY
NUMBER
Name
COMPANY
NUMBER
HB (HDG) Limited 1990709 HB (1995) Limited
(i) †
SC155021
Redrow Homes Limited 1990710 Redrow Homes (Wallyford) Limited
(i) †
SC205159
Harrow Estates plc 6825371 St David’s Park Limited 2479183
Redrow Real Estate Limited 3996541 PB0311 Limited
†
7577839
Redrow Regeneration plc 5405272 Debut Freeholds Limited
†
4638403
Redmira Limited
†
7587765 Tay Homes (Western) Limited
†
2806562
HB (NW) Limited
†
1189328 Tay Homes (Northern) Limited
†
2708575
HB (LCS) Limited
(i) †
SC38052 Tay Homes (Midlands) Limited
†
2183136
HB (MID) Limited
†
2469449 Tay Homes (North West) Limited
†
2189721
HB (SW) Limited
†
3522335 Redrow Homes (Park Heights) Limited
(ii) †
66240
HB (SWA) Limited
†
2230870 Redrow Construction Limited
†
1375826
HB (Y) Limited
†
2293006 Poche Interior Design Limited
†
2169473
HB (ESTN) Limited
†
4017345 Redrow (Shareplan) Limited
†
3520984
HB (WM) Limited
†
3379746 Cadmoore Limited
†
3977222
HB (SM) Limited
†
3522321 Redrow (Sudbury) Limited
†
4558070
HB (SN) Limited
†
537405 The Waterford Park Company Limited 5429823
HB (WC) Limited
†
4984069 The Waterford Park Company (Balmoral)
Limited
6047122
HB (WX) Limited
†
1940936 HB (Herne Bay No 1) Limited
†
7743649
HB (EM) Limited
†
2827161 HB (Herne Bay No 2) Limited
†
9163243
HB (CD) Limited
†
2034733 Redrow Homes East Midlands Limited
†
4219459
HB (GRPS) Limited
†
2898913 Radleigh Construction Limited
†
4219460
HB (CPTS) Limited
†
1079513 Radleigh Homes Limited
†
4210633
HB (SE) Limited
†
3988594 Radbourne Edge (Holdings) Limited
†
8737345
HB (CSCT) Limited
(i) †
SC231364 Redrow Langley Limited
†
7306461
HB (SC) Limited
(i) †
SC74732 Radleigh (Hackwood) Limited
†
8131049
12. DEFERRED TAX ASSETS AND LIABILITIES
The following are the deferred tax assets and liabilities recognised by the Group and the movements thereon during the
current and prior year:
IMPUTED
INTEREST
£M
SHORT-TERM
TEMPORARY
DIFFERENCES
£M
TOTAL
£M
Deferred tax assets
At 29 June 2020 – 1 1
Charge to income – – –
Charge to equity – – –
At 27 June 2021 – 1 1
Charge to income – – –
Charge to equity – – –
At 3 July 2022 – 1 1
EMPLOYEE
BENEFITS
£M
SHORT-TERM
TEMPORARY
DIFFERENCES
£M
TOTAL
£M
Deferred tax liabilities
At 29 June 2020 (4) (1) (5)
Charge to income – (1) (1)
Charge to equity (9) – (9)
At 27 June 2021 (13) (2) (15)
Charge to income – – –
Charge to equity – – –
At 3 July 2022 (13) (2) (15)
The Group has no material unrecognised deferred tax assets.
An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May
2022. This will increase the Company's future current tax charge accordingly. In addition, the Government introduced a
new Residential Property Developer tax of 4% on profit effective from 1 April 2022. The deferred tax asset at 3 July 2022
has been calculated at 29% based on these rates (2021: 25%) with the exception of the deferred tax liability on employee
benefits which has been calculated at 35% (2021: 35%). This reflects the results of the latest triennial valuation of the
defined benefit section of The Redrow Staff Pension Scheme (see page 259) 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.
The Company has deferred tax liabilities of £10m (2021: £10m).
270 271
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Financial statements
Financial statements
Notes to the financial statements continued
13. TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2022
£M
2021
£M
2022
£M
RESTATED †
2021
£M
RESTATED †
2020
£M
Non-current assets
Trade receivables (net) – – – – –
Amounts due from subsidiary companies – – 266 420 774
– – 266 420 774
Current assets
Trade receivables (net) 22 54 – – –
Contract assets 23 21 – – –
Amounts due from subsidiary companies – – 317 400
† 335 †
Other receivables 25 21 – – –
Prepayments 6 4 – – –
76 100 317 400 335
Current trade receivables are stated after an allowance of £7m (2021: £8m) in respect of expected credit losses with £nil
provision utilised (2021: £nil), £1m provision released (2021: £nil) and £nil provision created (2021: £4m).
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 248). Of this amount £100m (2021: £100m) is expected to be
recovered within 12 months of the balance sheet date.
† See page 242 and 243 for an explanation of prior year restatement of the Company balance sheet.
14. INVENTORIES
GROUP COMPANY
2022
£M
2021
£M
2022
£M
2021
£M
Land for development 1,710 1,526 – –
Work in progress 962 910 – –
Stock of show homes 68 77 – –
2,740 2,513 – –
Inventories of £1,715m were expensed in the year (2021: £1,465m). Work in progress includes £1m (2021: £1m) in respect of
part exchange properties. Land held for development in the sum of £300m is subject to a legal charge as security in
respect of deferred consideration (2021:£210m).
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 £1m (2021: £16m). Land for development includes £111m of strategic land owned without a residential
planning consent net of a net realisable value provision of £14m (2021: £11m and £6m). £nil of impairment costs arising for
the strategic decision to scale back our London operations were expensed in the year (2021: £5m).
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.
15. FINANCIAL RISK MANAGEMENT
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.
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.
15. FINANCIAL RISK MANAGEMENT CONTINUED
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 3 July 2022, 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 2022 or 2021.
The following table shows the profile of interest bearing debt together with its effective interest rates including non-
utilisation fees.
2022 2021
EFFECTIVE
INTEREST
RATE
%
TOTAL
£M
ZERO
TO ONE
YEAR
£M
ONE
TO TWO
YEARS
£M
TWO
TO FIVE
YEARS
£M
EFFECTIVE
INTEREST
RATE
%
TOTAL
£M
ZERO
TO ONE
YEAR
£M
ONE
TO TWO
YEARS
£M
TWO
TO FIVE
YEARS
£M
Bank loans –
floating rate 0.5 – – – – 8.1 – – – –
– – – – – – – –
For the 53 weeks ended 3 July 2022, it is estimated that a 10% increase in our non-utilisation fee rate applying for the full
year would decrease the Group’s profit before tax by £Nil.
b. Maturity of bank loans and borrowings
The maturity of bank loans and borrowings is as below:
The Group
2022 2021
BANK
OVERDRAFT
£M
BANK
LOANS
£M
BANK
OVERDRAFT
£M
BANK
LOANS
£M
Due between two and five years – – – –
– – – –
Maturities above include estimated interest payable to the maturity of the facilities.
The Company
2022 2021
BANK
OVERDRAFT
£M
BANK
LOANS
£M
BANK
OVERDRAFT
£M
BANK
LOANS
£M
Due between two and five years – – – –
– – – –
272 273
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Redrow plc Annual Report 2022
Financial statements
Financial statements
Notes to the financial statements continued
15. FINANCIAL RISK MANAGEMENT CONTINUED
Maturities above include estimated interest payable to the maturity of the facilities.
The Company was fully compliant with its banking covenants as at 3 July 2022.
At the year end, the Group and Company had £350m (2021: £350m) 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 balancesheet.
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 toaloan 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:
BALANCE
£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
3 July 2022 376 380 289 51 40
27 June 2021 294 298 144 125 29
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:
BALANCE
£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
Trade and other payables (excluding lease liabilities) 530 530 530 – –
Lease liabilities 6 6 2 2 2
3 July 2022 536 536 532 2 2
Trade and other payables (excluding lease liabilities) 538 538 538 – –
Lease liabilities 6 7 3 2 2
27 June 2021 544 545 541 2 2
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:
GROUP COMPANY
2022
£M
2021
£M
2022
£M
2021
£M
Held at banks with at least an A credit rating per Standard & Poor's 288 160 285 144
288 160 285 144
15. FINANCIAL RISK MANAGEMENT CONTINUED
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 3 July 2022 and 27 June 2021 are as follows:
2022
£M
2021
£M
Total borrowings – –
Less cash and cash equivalents (288) (160)
Net (cash) (288) (160)
Equity 1,950 1,872
Total capital 1,662 1,712
Operating profit before exceptional items 414 321
ROCE (Operating profit as above as a percentage of opening and closing total capital) 24.54% 18.5%
Gearing ratio N/A N/A
The Company has cash and cash equivalents of £285m (2021: £144m).
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 page 248.
Fair value hierarchy
Financial assets and liabilities carried at fair value are categorised within the hierarchical 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.
274 275
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Financial statements
Financial statements
Notes to the financial statements continued
15. FINANCIAL RISK MANAGEMENT CONTINUED
g. Fair values continued
The fair value of financial assets and liabilities is as follows:
The Group
FAIR VALUE
HIERARCHY
2022
LOANS AND
RECEIVABLES
FAIR VALUE
£M
2022
LOANS AND
RECEIVABLES
CARRYING
VALUE
£M
2021
LOANS AND
RECEIVABLES
FAIR VALUE
£M
2021
LOANS AND
RECEIVABLES
CARRYING
VALUE
£M
Assets per the balance sheet
Trade and other receivables Level 1 & 2* 70 70 96 96
Cash and cash equivalents Level 1 288 288 160 160
358 358 256 256
* Includes £3m in respect of shared equity debtors (2021: £4m) (Level 2)
FAIR VALUE
HIERARCHY
2022
OTHER
FINANCIAL
LIABILITIES
FAIR VALUE
£M
2022
OTHER
FINANCIAL
LIABILITIES
CARRYING
VALUE
£M
2021
OTHER
FINANCIAL
LIABILITIES
FAIR VALUE
£M
2021
OTHER
FINANCIAL
LIABILITIES
CARRYING
VALUE
£M
Liabilities per the balance sheet
Bank loans and overdrafts Level 1 – – – –
Trade payables and other payables including
customer deposits Level 1 530 530 516 516
Land creditors Level 1 376 376 294 294
Lease liabilities Level 1 6 6 6 6
912 912 816 816
Other financial liabilities are at amortised cost.
The Company
FAIR VALUE
HIERARCHY
2022
LOANS AND
RECEIVABLES
FAIR VALUE
£M
2022
LOANS AND
RECEIVABLES
CARRYING
VALUE
£M
RESTATED †
2021
LOANS AND
RECEIVABLES
FAIR VALUE
£M
RESTATED †
2021
LOANS AND
RECEIVABLES
CARRYING
VALUE
£M
Assets per the balance sheet
Cash and cash equivalents Level 1 285 285 144 144
Amounts due from subsidiary companies
(current and non-current) Level 1 583 583 820
† 820 †
868 868 964 964
FAIR VALUE
HIERARCHY
2022
OTHER
FINANCIAL
LIABILITIES
FAIR VALUE
£M
2022
OTHER
FINANCIAL
LIABILITIES
CARRYING
VALUE
£M
2021
OTHER
FINANCIAL
LIABILITIES
FAIR VALUE
£M
2021
OTHER
FINANCIAL
LIABILITIES
CARRYING
VALUE
£M
Liabilities per the balance sheet
Bank loans and overdrafts Level 1 – – – –
Amounts owed to subsidiary companies Level 1 14 14 14 14
14 14 14 14
† See page 242 and 243 for an explanation of prior year restatement of the Company balance sheet.
16. TRADE AND OTHER PAYABLES
GROUP COMPANY
2022
£M
2021
£M
2022
£M
RESTATED †
2021
£M
RESTATED †
2020
£M
Non-current liabilities
Amounts due in respect of development land 87 150 – – –
Lease liabilities 4 2 – – –
91 152 – – –
Current liabilities
Trade payables 385 362 – – –
Amounts due in respect of development land 289 144 – – –
Private customer deposits 87 68 – – –
Social customer payments on account 48 74 – – –
Amounts owed to subsidiary companies – – 14 14 14
Lease liabilities 2 4 – – –
Other payables 5 5 – – –
Other taxation and social security 5 7 – – –
Accruals 93 103 – –
† – †
914 767 14 14 14
See note 2.
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.
† See page 242 and 243 for an explanation of prior year restatement of the Company balance sheet.
17. PROVISIONS
The Group
LEGACY FIRE
SAFETY
PROVISION
£M
ONEROUS
CONTRACTS
£M
OTHER
£M
TOTAL
£M
At 27 June 2021 26 1 7 34
Provisions created during the year 174 – – 174
Provisions released during the year – – (1) (1)
Provisions utilised during the year – – – –
At 3 July 2022 200 1 6 207
2022
£M
2021
£M
Current provisions 97 –
Non-current Long term provisions 110 34
207 34
276 277
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
Financial statements
Financial statements
Notes to the financial statements continued
17. PROVISIONS CONTINUED
Legacy fire safety provision
Redrow is predominantly a housebuilder, however the Group historically built a small number of high rise buildings,
mostly on a design and build basis by main contractors. As a result of signing the Government’s Building Safety Pledge in
April 2022, the number of buildings in scope in respect of which the Group has a present obligation as a result of
historical events increased reflecting a change from last year end position and the December 2021 half year position.
The Group is committed to funding the remediation of life critical fire safety issues on buildings over 11 metres in which
the Group was involved going back 30 years. The Legacy fire safety provision reflects the estimated cost of works
outstanding to complete the remediation of life critical fire safety issues on all identified buildings within scope. In
estimating the cost of the works, Management has used relevant Building Safety Fund cost information and other
external information as the basis of its estimates and classified buildings identified as in scope on the basis of a high
level risk assessment including their EWS1 (External Wall Fire Review) status. However, these estimates are inherently
uncertain as this is a highly complex-area-involving bespoke buildings for which investigations and assessments will be
ongoing for some time. It is expected that £97m of the remaining provision will be utilised in the next 12 months and the
remainder over the following three years although these timescales are subject to the completion of negotiations with
relevant stakeholders. Provisions are discounted to net present value where the effect is material.
18. SHARE CAPITAL
NUMBER OF
ORDINARY SHARES
As at 27 June 2021 and 3 July 2022 (ordinary shares of 10.5p each) 352,190,420
As at 3 July 2022 11m Redrow plc ordinary shares of 10.5p each are held in trust under the Redrow Long Term Incentive
Plan (27 June 2021: 8m shares).
19. SHARE CAPITAL, SHARE PREMIUM ACCOUNT AND RESERVES
The Group
SHARE
CAPITAL
£M
SHARE
PREMIUM
ACCOUNT
£M
OTHER
RESERVES
£M
RETAINED
EARNINGS
£M
At 29 June 2020 37 59 8 1,522
Total comprehensive income – – – 261
Dividends paid – – – (21)
Purchase of own shares to satisfy share options – – – (1)
Other LTIP/DB/SAYE credit – – – 7
At 27 June 2021 37 59 8 1,768
Total comprehensive income – – – 196
Dividends paid – – – (100)
Purchase of own shares to satisfy share options – – – (27)
Other LTIP/DB/SAYE credit – – – 9
At 3 July 2022 37 59 8 1,846
Other reserves
Other reserves consists of a £7m Capital redemption reserve (2021: £7m) and a £1m Consolidation reserve (2021: £1m).
Undistributable reserves
Other reserves are not available for distribution.
The Company
SHARE
CAPITAL
£M
SHARE
PREMIUM
ACCOUNT
£M
OTHER
RESERVES
£M
RETAINED
EARNINGS
£M
At 29 June 2020 37 59 7 839
Total comprehensive income – – – 7
Dividends paid – – – (21)
At 27 June 2021 37 59 7 825
Total comprehensive income – – – (1)
Dividends paid – – – (100)
At 3 July 2022 37 59 7 724
19. SHARE CAPITAL, SHARE PREMIUM ACCOUNT AND RESERVES CONTINUED
The Company continued
Other reserves
Other reserves consists of a £7m Capital redemption reserve (2021: £7m).
Undistributable reserves
Other reserves are not available for distribution.
Post year end on 14 July 2022, the Company announced a share buyback programme to purchase ordinary shares of
10.5p each in the Company for up to a maximum consideration of £100m. This is a non-adjusting post balance sheet
event.
20. MOVEMENT IN NET CASH
The Group
AT
27 JUNE 2021
£M
NON-CASH
MOVEMENT
£M
CASH FLOW
£M
AT
3 JULY 2022
£M
Cash and cash equivalents 160 7 121 288
Bank loans – – – –
Net cash 160 7 121 288
Non-cash movement comprises movements in respect of LTIP/SAYE together with relevant IAS19, IFRS7 and IFRS16 non
cash movements.
The Company
AT
27 JUNE 2021
£M
NON-CASH
MOVEMENT
£M
CASH FLOW
£M
AT
3 JULY 2022
£M
Cash and cash equivalents 144 – 141 285
Bank loans – – – –
Net cash 144 – 141 285
21. CONTINGENT LIABILITIES
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 £158m (2021: £156m) at the year end and consider the possibility of a cash outflow in
settlement to be remote.
22. RELATED PARTY TRANSACTIONS
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 192 to 213
notably the 'Single Total Figure of Remuneration Table (Audited)' on page 205. A summary of remuneration provided to
key management personnel is provided in note 7c.
There have been no other material related transactions with key management personnel.
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 3 July 2022 was £542m (27 June 2021: £781m). The amount
owed to subsidiary undertakings at 3 July 2022 was £14m (27 June 2021: £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.
278
Redrow plc Annual Report 2022
Redrow plc Annual Report 2022
279
Financial statements
Financial statements
Notes to the financial statements continued
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.
Annual Injury Incidence Rate (AIIR)
No. of RIDDOR Accidents resulting in an injury divided by
the average number of people employed multiplied by
100,000 (see ESG Scorecard on pages 6 to 7).
Cash conversion percentage
2022 2021
Cash inflow generated from
operations per statement of cash
flows
£318m £362m
Divided by:
Operating profit per consolidated
income statement
£250m £321m
Amortisation and depreciation per
note 2b
£5m £7m
£255m £328m
Cash conversion percentage 125% 110%
Full year dividend per share
Interim and final dividend per share declared in respect of
the financial year.
HBF customer recommend rating
Independent HBF customer satisfaction rating score.
Homes revenue from ongoing business
2022
£M
2021
£M
Revenue per consolidated income
statement
2,140 1,939
Revenue from the sale of land
(see note 2a)
(21) (37)
Revenue from the sale of new housing
(see note 2a)
2,119 1,902
Revenue from London Build Out sites
(52) (181)
Homes revenue from ongoing business 2,067 1,721
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 balance sheet date
divided by no. of legal completions in financial year.
2022 2021
Owned land holdings at
3 July 2022/27 June 2021
29,600 29,460
Legal completions
5,715 5,620
Land holding years 5.2 5.2
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 balance sheet date divided by the
number of ordinary shares in issue at balance sheet date.
Number of trainees
No. of trainees at year end as a percentage of employees
at year end.
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.
Underlying return on capital employed (Underlying ROCE)
Operating profit before exceptional items adjusted for joint
ventures as a percentage of opening and closing capital
employed. See note 15f.
Underlying return on equity (Underlying ROE)
Profit before tax before exceptional items adjusted for joint
ventures as a percentage of opening and closing net
assets.
2022 2021
Net assets at 3 July 2022/27 June 2021
1,950 1,872
Net assets at 27 June 2021/30 June
2020
1,872 1,626
Average net assets
1,911 1,749
Profit before taxation – pre-exceptional
410 314
Return on equity % 21.5% 18.0%
23. ALTERNATIVE PERFORMANCE MEASURES
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.
Underlying profit before tax
Profit before tax pre-exceptional item
Underlying earnings per share
As statutory earnings per share but based on
pre-exceptional profit for the year per the consolidated
income statement.
Underlying gross profit
Gross profit per the consolidated income statement
pre-exceptional item.
Underlying operating profit
Operating profit per the consolidated income statement
pre-exceptional item.
280
Redrow plc Annual Report 2022
FIVE YEAR SUMMARY
Shareholder information
12 months ended June
CORPORATE AND SHAREHOLDER INFORMATION
Redrow plc Annual Report 2022
281
Shareholder Information
2018
£M
2019
£M
2020
£M
2021
£M
2022
£M
Revenue 1,920 2,112 1,339 1,939 2,140
Operating profit – pre-exceptional 382 411 148 321 414
Operating profit – pre-exceptional as a percentage of
turnover 19.9% 19.5% 11.1% 16.6% 19.3%
Profit before tax – pre-exceptional 380 406 140 314 410
Net assets 1,483 1,585 1,626 1,872 1,950
Net cash/(debt) 63 124 (126) 160 288
Gearing – net debt as a percentage of capital and reserves N/A N/A 7.7% N/A N/A
Return on capital employed – operating profit before
exceptional items adjusted for joint ventures as a
percentage of opening and closing capital employed 28.5% 28.5% 9.2% 18.5% 24.5%
Return on equity 28.0% 26.5% 8.7% 18.0% 21.5%
Number of legal completions 5,718 6,443 4,032 5,620 5,715
Earnings per ordinary share – pre-exceptional 85.3p 92.3p 32.9p 73.7p 96.0p
Dividends paid per ordinary share inc cash return 20.0p 59.0p – 6.0p 28.5p
Net asset value per ordinary share 401.0p 450.0p 461.7p 531.5p 553.7p
SHAREHOLDER DISCOUNTS
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.
GROUP CONTACTS – OFFICERS AND ADVISERS
Company Secretary
Graham Cope
Registered Office
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
282
Redrow plc Annual Report 2022
NOTES
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Produced by
Redrow plc
Redrow House,
St. David’s Park,
Flintshire
CH5 3RX
Telephone: 01244 520044