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 year to 30 June 2018 and of the position of the Company at the end of the financial year together with the financial statements, Auditor’s Report and a description of the principal risks and uncertainties which the Company faces. The Strategic Report can be found on pages 1 to 59 of the Annual Report. The FCA’s Disclosure Guidance and Transparency Rules require certain information to be included which can be found in the Corporate Governance Report on pages 60 to 103.

There were no significant events since the balance sheet date. An indication of likely future developments in the business of the Company and details of the Company’s use of financial instruments for risk management purposes are included in the Strategic Report.

The Corporate Governance Report and the Strategic Report, together with the Notice of Annual General Meeting including the explanatory notes and sections of the Annual Report incorporated by reference, form part of the Directors’ Report which is presented in accordance with, and with reliance upon, applicable English company law. The liabilities of the Directors in connection with this report shall be limited as provided by English Law.

The table below sets out where key information can be found in the Annual Report.

Subject Page Reference
Dividends See note 5 of the financial statements on page 120.
Capital Structure (details of the issued share capital) See note 17 of the financial statements on page 139.
Directors See page 62 to 63 detailing the Directors who served during the year.
Biographical details of the Directors of the Company who are seeking election and re-election at the 2018 AGM are set out on pages 62 to 63.
Details  of Director’ interests, including interests in the Company’s shares, are disclosed in the Directors’ Remuneration Report on page 90. 
Employment Policies Details of the Company’s employment policies may be found in the Directors’ Report on page 99.
The Redrow Benefit Trust Report (“the Employee Benefit Trust”)
Details of the shares held by the Employee Benefit Trust may be found in the Directors’ Report on page 98.
Environmental, social and governance (ESG) disclosures Details of the Company’s approach to diversity and ESG disclosures governance can be found in the Directors’ Report on pages 96 to 101.
Redrow plc Long Term Investment Plan (LTIP) Details of the Company’s LTIP are setout in note 7d of the consolidated Incentive Plan financial statements on pages 122 to 125 and the Directors’ Remuneration Report on pages 80 to 95.
Greenhouse gas emissions All disclosures on 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 and the Companies Act 2006 (Strategic Report and directors’ Report Regulations 2013), are contained in the Directors’ Report on page 100.

The Directors have pleasure in presenting to the shareholders their report and audited consolidated financial statements for the 12 months ended 30 June 2018.

Results and Dividends

The Group made a profit after tax of £308m (2017: £253m). An interim dividend of 9.0p (2017: 6.0p) net per share was paid on 4 May 2017. The Board proposes to pay on 13 November 2018, subject to shareholder approval at the 2018 Annual General Meeting, a final dividend of 19.0p (2017: Final Dividend: 11.0p) net per share in respect of the year ended 30 June 2018 to shareholders on the Register as at the close of business on 21 September 2018. The Company’s dividend re-investment plan gives shareholders the opportunity to re-invest their dividends.

Annual General Meeting

Notice of the 2018 Annual General Meeting to be held on Wednesday, 7 November 2018 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.

The Board noted that Resolution 16 relating to the approval of the terms of the waiver received a vote of 58.68% against at the 2017 Annual General Meeting. The waiver would have permitted the Concert Party's percentage interest in the Company's shares to increase from 32.70% to a maximum of 36.34% (in each case representing 120,942,378 ordinary shares) as a result of share buy backs authorised by Resolution 19 without requiring the Concert Party to make a mandatory offer for other shareholders' shares. 

The Board consulted with a number of shareholders and proxy advisor bodies prior to the 2017 Annual General Meeting to discuss their concerns relating to the waiver and has assessed the feedback received after the Annual General Meeting. The Board continues to take its responsibility to engage with shareholders seriously. Since the 2018 Annual General Meeting, Steve Morgan has diluted his shareholding further by transferring 16,800,000 shares for the benefit of his children as part of long-term inheritance planning. As a result of the transfer, Steve Morgan’s shareholding reduced to 77,636,045 shares, representing 20.99% of the issued share capital of Redrow.

Corporate Governance

The Board remains committed to high standards of corporate governance; details relating to the Company’s compliance with the UK Corporate Governance Code are given in the Corporate Governance Report on pages 60 to 103.


The Directors of the Company during the year to the date of this report and the current Directors are listed on pages 62 and 63 together with their biographical details.

Details of Directors' pay, service contracts, and Directors' interests in the ordinary shares of the Company, are included in the Directors’ Remuneration Report on pages 80 to 95.

Formal appraisals of the Executive Directors were undertaken during the financial year. All the Non-Executive Directors underwent an annual appraisal conducted by the Senior Independent Non-Executive Director. The Board confirms that John Tutte and Barbara Richmond, who stand for re-appointment as Executive Directors and Steve Morgan, Nick Hewson, Sir Michael Lyons and Vanda Murray who stand for re-appointment as Non-Executive Directors, 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, all the Directors, will retire at the Annual General Meeting to be held on Wednesday, 7  November 2018, and, being eligible, offer themselves for re-appointment, with the exception of Debbie Hewitt. Debbie Hewitt will retire from the Board at the close of the 2018 Annual General Meeting.

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 of the directions given by Special Resolution, the business of the Company is managed by the Board, which may exercise all the powers of the Company. Directors have been authorised to allot and issue shares by way of Resolutions of the Company passed at its Annual General Meeting.

The rules in relation to the appointment and replacement of Directors are as set out in the Company’s Articles of Association and applicable English company law. The Articles of Association can only be amended, or new Articles adopted, by a resolution passed by shareholders in general meeting by at least three quarters of the votes cast.

Capital Structure

The Company has an authorised share capital of 480,000,000 ordinary shares of 10p each of which 369,799,938 have been issued. 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 £12,326,665 equivalent to approximately 33% of the Company’s issued share capital and up to a further aggregate nominal amount of £12,326,665 in connection with an offer by way of a rights issue. The authority was not exercised during the period ended 30 June 2018 or prior to the date of this Report. The Company has no current intention of exercising the authority but nevertheless as this authority expires at the forthcoming Annual General Meeting the Directors will be seeking new authorities as set out in the Notice of Annual General Meeting.

Authority was given to the Directors at last year’s Annual General Meeting to make market purchases of the Company’s ordinary shares up to an aggregate nominal value of £3,697,999.30. This authority will expire at the Annual General Meeting, and no such purchases were made during the financial year ended 30 June 2018.

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 the Company’s co-operation, financial rights carried by securities are held by a person other than the holder of the securities.

Zedra Trust Company (Guernsey) Limited, as trustee of the Employee Benefit Trust, held 8,776,804 shares (2.37%) in the Company as at 30 June 2018 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. The Employee Benefit Trust agreed to waive its right to the final dividend over 1.3m shares being part of its total shareholding.

Substantial Holdings in the Company

As at 30 June 2018, the Company has been advised of the following notifiable interests of 3% or more in its ordinary shares:

Bridgemere Securities Limited 77,636,045 20.99%
The Steve Morgan Foundation 25,950,000 7.02%
Vidacos Nominees/HSBC 18,770,138 5.08%
Schroders plc 18,359,023 4.97%
Standard Life Aberdeen plc 18,328,079 4.95%
FIL Limited 17,343,977 4.69%
BlackRock Inc 15,277,577 4.13%

On 25 July 2018, the following notification was received:

Woodford Investment Management Ltd 18,774,573 5.07%

The persons set out in the table above have notified the Company pursuant to Rule 5 of the Disclosure Guidance and Transparency Rules of their interests in the ordinary share capital of the Company.

Otherwise, no changes in the above holdings had been notified.

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.


The Company’s employment policies do not discriminate between employees or potential employees on the grounds of gender, sexual orientation, age, colour, creed, ethnic origin, religious beliefs, pregnancy or maternity or trade union membership. It is Company policy to give full and fair consideration to applications for employment by, and the employment and training needs of, disabled persons (and in the case of employment needs, persons who become disabled whilst employed by the Company) where requirements may be adequately covered by these persons and to comply with any current legislation with regard to disabled persons.

The Company places considerable importance on the provision of training and development of its employees through training@redrow. Training is administered at a purpose built in-house training facility at Tamworth. Training@redrow completed  6,541 training days during the year ended 30 June 2018, including those which support the Company’s induction process.

The Directors recognise the importance of good communications with employees. 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.

This is assisted through the medium of regular management meetings, staff publications, its internal staff ‘Insight Magazine’ and 'Engage', the Redrow intranet. Employees are consulted on a regular basis so that employee views may be taken into account when decisions are made that may affect their interests.

Employee share ownership is encouraged through savings related schemes.

Diversity and Inclusion Policy

The Company recognises that our continued success depends upon our 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 and abilities will enable us to meet the challenge of the growing skills gap in the sector.

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.

As such the Company opposes all forms of unlawful or unjust discrimination and requires all colleagues to comply with legislation in this area and strive for best practice.

The Company embeds this through awareness and training in the following policies:

  • Diversity and Inclusion Policy
  • Employee Policy
  • Recruitment and Selection Policy
  • Disciplinary and Grievance Policy and Procedures

Charitable and Political Donations

The Group made no political donations but paid £0.5m in charitable donations during the year, being £0.4m in respect of national charities and £0.1m in support of local charities. The Company and its employees are actively involved in fundraising activities for specific charities. The Company made a £0.3m donation during the year to The Steve Morgan Foundation, a UK registered charity of which Steve Morgan is a Trustee. This is included within the charitable donations in respect of national charities noted above.

Greenhouse Gas Emissions

Greenhouse gas (“GHG”) emissions data for the period 1 July 2017 to 30 June 2018 are set out in the table below.

Emissions from Current
Reporting Year
(1 July 2017 to
30 June 2018)
(1 July 2016 to
30 June 2017)
Scope 1 activities:  
12,006 11,128 tonnes
of CO2e
Direct emissions from combustion of fuels and business travel
Scope 2 activities: 2,275 2,956 tonnes
of CO2e
Indirect emissions from purchased electricity
Total emissions: 14,281 14,084 tonnes
of CO2e
 (Scope 1 + Scope 2)
Intensity ratio:
Total emissions per 100m² of build 2.48 2.50 tonnes
of CO2e per 100m² of build

Research and Development

The Company has a centralised Product Development Team charged with identifying and evaluating new construction techniques and products. 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 which is a core part of the Company’s objectives.

The charge to the income statement in respect of research and development in the year ended 30 June 2018 was £0.6m (2017: £0.6m).


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.

Emissions have been calculated using the UK Government’s Greenhouse Gas Conversion Factors for Company Reporting. Reported Scope 2 emissions are calculated using location-based method.

This inventory of greenhouse gas emissions has been verified by SGS to a limited level of assurance, in accordance with 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

Independent Auditors

The Company has commenced a tender process for the appointment of new Auditors. The tender process will be supervised by the Audit Committee, who will then make a recommendation to the Board on the appointment of the replacement Auditor. Following the appointment, an announcement will be made.

In the meantime, a resolution to re-appoint PricewaterhouseCoopers LLP as external Auditors will be proposed at the Annual General Meeting on Wednesday, 7 November 2018.

Provision of Information to Auditors

In the case of each Director in office at the date the Directors report is approved, confirm that:

(a)          so far as the Director is aware, there is no relevant audit information (as defined in section 418(3) of the Companies Act 2006) of which the Company’s Auditors are unaware; and

(b)          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 Auditors are aware of that information.

Going Concern

The Directors have acknowledged the guidance on going concern and financial reporting published by the Financial Reporting Council in October 2009.

As explained in the Financial Review on pages 48 to 51, the Group maintains adequate committed banking facilities. As stated in note 14 to the financial statements, at 30 June 2018, the Group had £245m of undrawn committed borrowing facilities available.

After making appropriate enquiries, the Directors consider they have a reasonable expectation for stating that the Group and the Company have adequate resources to continue trading for the foreseeable future. These enquiries consisted of a detailed review of the Group’s financial forecast for the period to 31 December 2019. The forecasts take into account current market trends with reasonable judgements and estimates applied to arrive at future cash flow estimates. As part of the review, the Group analysed its forecast covenant compliance over this period linked to its banking facility, arriving at an assessment of the headroom evident between the forecast covenant test outturn and the outturn necessary to achieve covenant compliance. The review confirmed headroom within both financial covenants and facilities.

Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

By order of the Board


Company Secretary
Redrow plc

Registered no: 2877315

3 September 2018