Redrow : 2017 Annual Report

2017‌‌

ANNUAL REPORT

A Better Way to Live

REDROW ANNUAL REPORT 2017

Highlights

£1,660m

£315m

STRATEGIC REPORT

70.2p

15

£1,150m

16

£1,382m

17

£204m

16

£250m

17

44.5p

17

16

55.4p

15

15

£1,660m

+20%

£315m

+26%

70.2p

GOVERNANCE REPORT

+27%

17p 5,416 £1,099m

17

4,022

17

17

FINANCIAL STATEMENTS

4,716£967m

10p

16

16

15

£635m

16

15

6p

15

17p

5,416

£1,099m

Contents

1. Highlights

2. Our Investment Case

04 Our Strategy

06 Our Business Model

08 A Better Way…

16 Our Markets

20 Chairman's Statement

22 Chief Executive's Review

26 Operating Review

48 Financial Review

52 Risk Management

1. Corporate Governance Report

2. Board of Directors

68 Audit Committee Report

72 Nomination Committee Report

74 Sustainability

Committee Report

76 Directors' Remuneration Report

98 Directors' Report

104 Statement of Directors' Responsibilities

108 Independent Auditors' Report

114 Consolidated Income Statement

1. Statement of

   Comprehensive Income

2. Balance Sheets

3. Statement of Changes in Equity

4. Statement of Cash Flows

5. Accounting Policies

123 Notes to the Financial Statements

1. Glossary

   SHAREHOLDER INFORMATION

2. Corporate and

   Shareholder Information

3. Five Year Summary

   FIND MORE INFORMATION AT:

   WWW.REDROWPLC.CO.UK

   +7 0%

   Award highlights

   +15%

   SHAREHOLDER INFORMATION

   +14%

   COVER IMAGE: ROYAL WATERSIDE, PARK ROYAL, NORTH WEST LONDON

   Our

   STRATEGIC REPORT

   STRATEGIC REPORT

   Our Investment Case

   Successful leadership team

   Redrow has a strong, experienced and successful leadership team and is committed to developing the next generation of homebuilders.

   15%

   of workforce on structured training programmes

   +75%

   increase in employees undertaking leadership skills training

   benchmark

   for success in 2020

   Excellent product range

   Redrow has an excellent product range which continues to evolve.

   £983m

   private order book at record level (inc. JV)

   Creating communities

   a key focus

   20

   c£2,200m

   £1,660m

   17

   Guidance

   £1,382m

   16

   £1,150m

   £250m

   £315m

   GOVERNANCE REPORT

   c£430m

   Expertise in land buying

   Redrow has the expertise and resources to ensure that the right land opportunities are taken to deliver targeted geographic expansion.

   c5,400 plots

   added to current land bank

   3,356

   plots added

   from forward land to owned land bank

   20

   17

   15

   16

   Guidance

   £204m

   15

   FINANCIAL STATEMENTS

   Turnover Profit before tax

   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.

   Placemaking

   We focus on delivering high quality homes and creating community and physical environments that help promote people's sense of wellbeing.

   89%

   customer recommendation

   £163m

   committed to fund improvements to local communities

   27

   NHBC Pride in the Job awards

   1,014

   affordable homes delivered to our communities

   15

   44.5p

   16

   55.4p

   17

   Guidance Guidance

   70.2p

   20

   95.0p

   15

   22.8%

   16

   23.7%

   17

   26.0%

   20

   25+%

   A strong and efficient balance sheet

   Redrow has net assets of over £1.2bn and a balance of equity and debt. The Group is focused on delivering superior levels of return on equity and return on capital employed from an efficient use of its capital base.

   27.7%

   return on equity

   26.0%

   return on capital employed

   SHAREHOLDER INFORMATION

   EPS ROCE

   STRATEGIC REPORT

   Our Strategy

   To create long-term sustainable value for all our stakeholders by delivering to our communities high quality homes and environments that provide a better way to live.

   S T R A T E G IC

   RE

   P OR

   T

   We have a clearly defined growth strategy, to increase revenue,

   STRATEGIC REPORT

   MEASURE

   2020 OBJECTIVES

   KEY PERFORMANCE INDICATORS COMMENT 2017 2016

   GROW OUR BUSINESS RESPONSIBLY

   GOVERNANCE REPORT

   profits and returns to shareholders by increasing outlets and legal completions over the medium-term.

   EPS

   DPS

   Revenue Sales outlets

   • EPS increasing to 95p

   • DPS of 32p

   • Revenue increasing to c£2.2bn

   • 150 outlets

70.2p

17p

£1,660m 132

55.4p

10p

£1,382m 128

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PAGES 48 AND 49

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MANAGE OUR RESOURCES EFFICIENTLY

CREATE BETTER PLACES TO LIVE

To ensure that we grow our business responsibly, we are focused on managing all our resources efficiently and effectively.

We are focused on creating high quality places to live by delivering well designed, well built, attractive homes whilst at the same time enhancing the beneficial characteristics of the local landscape, ecology and communal resources.

ROCE

Land bank years

Waste diverted from landfill

Monies committed to fund improvements to local communities

• ROCE of 25+%

• Maintain land bank at c4 years

  • >95%

• Continued investment in local communities

• Affordable homes delivered

26.0%

4.5 years 95.4%

£163m 1,014

23.7%

FINANCIAL STATEMENTS

88.9%

88.4%

PUT CUSTOMERS FIRST

SHAREHOLDER INFORMATION

Private reservation rate (excluding PRS)

• Maintain an appropriate balance in availability of product in the right locations

  0.68

  0.70

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  PAGES 44 TO 47

  VALUE AND DEVELOP OUR PEOPLE

  We are focused on developing the skills of our current team and ensuring we attract both experienced talent and new and enthusiastic young people into our business to underpin our growth objectives.

  Our training centres, dedicated Learning and Development team and innovative graduate and apprentice programmes play an important role in delivering our strategy.

  We are dedicated to maintaining the highest standards of health and safety as our business grows. We have again expanded our own

  in-house dedicated team of Health and Safety professionals to ensure that our teams on site are appropriately trained, supported and monitored.

  Number of trainees

  Accident incident rate by site

• Maintain level of trainees at 15% of an increasing workforce

• Accident incident rate by site maintained at 0.3 or below

328

0.30

297

0.20

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