Search

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 judgement outlined below. As noted in the accounting policy, in line with industry practice, the Group treats cash paid in respect of land, including the settlement of land creditors, as operating rather than financing cashflows. This is a judgement as, whilst the repayment profile of land creditors is important in assessing the Group’s liquidity and timing of future cash outflows, the Directors believe that settlement of the land creditors is an operating cashflow on the basis that land purchases are integral to the Group’s working capital management. Management considers the key sources of estimation uncertainty relate to:

Carrying value of inventories and cost of sales recognition

The Group carries inventories at the lower of cost and net realisable value. Due to the nature of development timescales, it is routinely necessary to estimate costs to complete and future revenues and to allocate non-unit specific development costs between units legally completing in the current financial year and thereby impacting current year cost of sales and in future periods. A full review of the net realisable value of inventories was undertaken by the Group as at 27 June 2021 and this requires Management to use its judgement and experience in assessing any impairment provisions that may be required. If there are significant movements in UK house prices or development costs compared to Management expectations then further impairments or reversal of impairments already made may be needed.

The Group has a number of developments where significant estimates and judgements have been made in relation to the estimated costs to complete. These developments are also affected by a variety of uncertainties that depend on future events such as inflationary cost pressures, delays and unforeseen build issues due to the nature of infrastructure works. The Directors consider that the risk is sufficiently mitigated by the processes in place and appropriate levels of contingency that are calculated based on the past experience of Management with input from internal quantity surveyors. The Directors consider that it is impractical to provide a quantitative analysis of the estimation uncertainty involved due to the number of developments; range of estimated cost inputs; and timing of each development.

Pensions

The Group has utilised assumptions including a rate of return on assets, mortality assumptions and a discount rate having been advised by its actuary. To the extent that such assumed rates are different from what actually transpires, the retirement benefit obligations of the Group would change. A sensitivity analysis is included on page 201.

The primary risks the Group is exposed to by the defined benefit pension scheme are the movement in corporate bond yields, the market’s long-term expectations for inflation and movement in mortality rates. The scheme closed to future accrual with effect from 1 March 2012. See Note 7e.

2. Revenue and Operating Profit

a. Revenue

An analysis of the Group's revenue is as follows:

2021
£m 
2020
£m 
Revenue from the sale of new housing 1,902 1,332
Revenue from the sale of land 37 7
1,939 1,339

Included within Revenue from the sale of new housing is £236m (2020: £nil) of revenue from contracts with social housing providers or private rental sector providers on which revenue is recognised over time by reference to the stage of completion of contract activity. Of this amount £nil (2020: £nil) was included in contract liabilities at the beginning of the year. The amount of revenue recognised in the current period from performance obligations satisfied (or partially satisfied) in previous periods was £nil (2020: £nil).

Note 2021
£m 
2020
£m 
Contract assets 13 21 -
Contract liabilities 16 68 -

The contract assets relate to the Group's rights to consideration for work completed but not invoiced at the balance sheet date for contracts on which revenue is recognised over time. 

The contract liabilities, which are included within social customer payments on account in note 16, relate to the advance consideration from customers at the balance sheet date for contracts on which revenue is recognised over time.

The following table shows further revenue of £213m (2020: £nil) expected to be recognised in future years in respect of contracts on which revenue is recognised over time:

2022 2023 2024 Total
Year ending June £m 144 59 10 213
Year ending June % 68 28 4 100

b. Operating Profit

Note 2021
£m 
2020
£m 
Operating profit is stated after charging:
Inventories expensed in the year  14 1,465 1,027
Amortisation 8 2 -
Depreciation - Property, plant and equipment 9 2 4
Depreciation - Lease right of use assets 10 3 3
Research and development expenditure  - -
Auditors’ remuneration - fees payable to the Company’s Auditors for audit services (i)  1 -
                                        - fees payable to the Company’s Auditors for other services (ii)  - -

Fees payable to the Company’s Auditors comprise:

(i) fees payable for the audit of parent company and consolidated financial statements £141,250 (2020: £50,000) and fees payable for the audit of the Company’s subsidiaries pursuant to legislation £423,750 (2020: £183,105).

(ii) Auditors’ remuneration for other services comprised £75,000 (2020: £36,895) in respect of an independent review of the half-yearly financial statement.

Amounts receivable by the Group's auditor in respect of pension services performed for the pension trustees is £nil (2020: £40k).

The 2021 ratio of non-audit fees to audit fees is 1:7.53 (2020: 1:6.32).

3. Net Financing Costs

2021
£m 
2020
£m 
Interest payable on bank loans (5) (5)
Imputed interest on deferred land creditors (3) (5)
Financial costs (8) (10)
Other interest receivable 1 2
Financial income 1 2
Net financing costs (7) (8)

4. Income Tax Expense

2021
£m 
2020
£m 
Current tax charge
UK Corporation Tax in respect of current year 59 27
Adjustment in respect of prior years - (4)
Current tax charge 59 23
Deferred tax
Origination and reversal of temporary differences 1 1
Adjustment in respect of prior years - 3
Deferred tax charge 1 4
Total income tax charge income statement 60 27
Reconciliation of tax charge for the year
Profit before tax 314 140
Tax calculated at UK Corporation Tax rate at 19.0% (2020: 19.0%) 60 27
Tax charged for the year 60 27
Deferred tax recognised directly in equity
Relating to pension scheme 9 -
9 -

Current income tax charge in the Company is £nil (2020: credit of £1m).

Information on the impact of future tax rate changes is included in note 12.

5. Dividends

The following dividends were paid by the Group:

2021
£m
2020
£m
Prior year final dividend per share of nil p (2020: 20.5p); Current year interim dividend per share of 6.0p (2020: nil p)  21 72
21 72

6. Earnings Per Ordinary Share

The basic earnings per share calculation for the 52 weeks ended 27 June 2021 is based on the weighted average number of shares in issue during the period of 344m (2020: 343m) excluding those held in trust under the Redrow Long Term Incentive Plan (8m shares (2020: 9m shares)), which are treated as cancelled.

Diluted earnings per share has been calculated after adjusting the weighted average number of shares in issue for all potentially dilutive shares held under unexercised options.

For the 52 weeks ended 27 June 2021
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
For the 52 weeks ended 28 June 2020
Earnings
£m 
Number
of shares
millions
Per share
pence 
Basic earnings per share  113 343 32.9
Effect of share options and SAYE  - 2 (0.1)
Diluted earnings per share  113 345 32.8

7. Employees

a. Cost (including Directors)

Group Company
2021
£m 
2020
£m
2021
£m
2020
£m
Wages and salaries 109 104
2 3
Social security costs 13 15
1 1
Other pension costs  9 10
- -
Share-based payments  6 5
1 -
137 134
4 4

b. Number

The monthly average number of persons employed by the Group was:

Group Company
2021
Number
2020
Number
2021
Number
2020
Number
Directors and administrative staff 880 946
8 8
Other personnel 1,328 1,418
- -
2,208 2,364
8 8

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:

2021
£m
2020
£m
Salaries and short-term employee benefits 5 4
Share-based payments 2 1
7 5

The number of Directors where retirement benefits are accruing in respect of defined benefit schemes are 2 (2020: 2). The aggregate amount of gains made by Directors on the exercise of share options was £0.5m (2020: £1.8m).

Detailed disclosure of Directors’ emoluments and interests in shares are included in the Directors’ Remuneration Report on pages 128 to 153, notably the 'Single Total Figure of Remuneration Table (Audited)' on page 144 which details remuneration paid to or received by directors in respect of qualifying services, and the 'Statement of Shareholding and Scheme Interests (Audited)' on page 147 and 148

d. Share-based payments

Save As You Earn Share Option scheme (SAYE)

The Redrow plc SAYE scheme is open to all employees and share options can be exercised either three or five years after the date of grant, depending on the length of the savings contract. The SAYE schemes are not subject to performance conditions.

The SAYE schemes have been valued using the Black-Scholes pricing model.

2021 2020
Options granted during the year 1,634,869 791,921
Date of grant  1 January 2021 1 January 2020
Fair value at measurement date  £1.65 £2.17
Share price  £4.72 £6.18
Exercise price  £3.78 £4.94
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 22 September 2020 were granted to a limited number of Senior Executives. The scheme is discussed in greater detail within the Directors’ Remuneration Report notably within the 'Directors' Remuneration Policy' on page 136.

The LTIP has been valued using the Black-Scholes pricing model.

2021 2020
Options granted during the year 763,758 456,376
Date of grant  22 September 2020 11 September 2019
Fair value at measurement date  £4.053 £5.945
Share price  £4.053 £5.945
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 22 September 2020 comprises £4.053 in respect of non-market based performance conditions.

The fair value at the measurement date of the LTIP granted on 11 September 2019 comprises £5.945 in respect of non-market based performance conditions.

Deferred Bonus Incentive (DBI)

Grants under the DBI were limited to Senior Management. Except in specified circumstances options granted under the scheme are exercisable between one and ten years after the date of grant for Tranche 1 and between two and ten years after the date of grant for Tranche 2 and are not subject to performance conditions.

In respect of options granted during the financial year ended 27 June 2021, Deferred Bonus Incentive Tranche 1 and 2 were absolute contractual entitlements to a small number of individuals and were granted on 22 September 2020. For the majority of senior management participating in this bonus scheme, due to the impact of the COVID-19 pandemic, a lesser, discretionary bonus was granted on 15 March 2021 and due to quantum was granted as a single tranche vesting on 15 March 2022.

The DBI has been valued using the Black-Scholes pricing model.

2021
Single Tranche
2021
Tranche 1
2021
Tranche 2
2020
Tranche 1
2020
Tranche 2
Options granted during the year 147,329 37,297 37,302 488,481 488,611
Date of grant  15 March 2021 22 September 2020 22 September 2020 11 September 2019
11 September 2019
Fair value at measurement date  £6.172 £4.053 £4.053 £5.945 £5.945
Share price  £6.172 £4.053 £4.053 £5.945
£5.945
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 1 year 2 years 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.

Share options outstanding

The following share options were outstanding at 27 June 2021:

Type of scheme Date of grant Number of options 2021 Number of options 2020 Exercise price 
Long Term Share Incentive 2017 15 November 2017 - 278,973 -
Long Term Share Incentive 2018 10 September 2018 272,244 291,354 -
Long Term Share Incentive 2019 11 September 2019 411,800 434,929 -
Long Term Share Incentive 2020 22 September 2020 712,870 - -
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 3,089 -
Deferred Bonus Incentive 2015 – Tranche 2  14 September 2015  3,070 3,090 -
Deferred Bonus Incentive 2016 – Tranche 1  12 September 2016  5,136 16,780 -
Deferred Bonus Incentive 2016 – Tranche 2  12 September 2016  11,220 19,318 -
Deferred Bonus Incentive 2017 – Tranche 1  11 September 2017 7,193 18,553 -
Deferred Bonus Incentive 2017 – Tranche 2 11 September 2017 9,694 40,249 -
Deferred Bonus Incentive 2018 – Tranche 1 10 September 2018 19,920 61,991 -
Deferred Bonus Incentive 2018 – Tranche 2 10 September 2018 83,123 418,050 -
Deferred Bonus Incentive 2019 – Tranche 1 11 September 2019 91,653 419,794 -
Deferred Bonus Incentive 2019 – Tranche 2 11 September 2019 358,959 419,904 -
Deferred Bonus Incentive 2020 – Tranche 1 22 September 2020 31,013 - -
Deferred Bonus Incentive 2020 – Tranche 2 22 September 2020 31,016 - -
Deferred Bonus Incentive 2020 – Single Tranche 15 March 2021 142,569 - -
Save As You Earn  1 January 2016 10,140 55,899 £3.70
Save As You Earn  1 January 2017 73,400 93,139 £3.20
Save As You Earn  1 January 2018 71,482 533,938 £4.90
Save As You Earn 1 January 2019 369,466 510,860 £4.62
Save As You Earn 1 January 2020 371,617 688,326 £4.94
Save As You Earn 1 January 2021 1,549,436 - £3.78

The total share options outstanding at 27 June 2021 under the LTIP, Deferred Bonus Incentive Plan and the Save As You Earn schemes represent 1.3% of the issued share capital (2020: 1.2%).


Movements in the year

The number and weighted average exercise prices of share options is as follows:

Number
of options
2021
Weighted
average
exercise price 2021
Number
of options
2020
Weighted
average
exercise price
2020
Long Term Share Incentive scheme:
Outstanding at the beginning of the year 1,005,256 - 965,330 -
Lapsed during the year (372,100) - (139,100) -
Exercised during the year - - (277,350) -
Granted during the year 763,758 - 456,376 -
Outstanding at the end of the year 1,396,914 - 1,005,256 -
Exercisable at the end of the year - - - -
Deferred Bonus Incentive scheme: 
Outstanding at the beginning of the year 1,446,644 - 1,718,132 -
Lapsed during the year (61,319) - (236,191) -
Exercised during the year (783,972) - (1,012,389) -
Granted during the year 221,928 - 977,092 -
Outstanding at the end of the year 823,461 - 1,446,644 -
Exercisable at the end of the year 267,829 - 204,572 -
Save As You Earn scheme: 
Outstanding at the beginning of the year 1,882,162 £4.72 2,293,006 £4.04
Lapsed during the year (654,768) £4.68 (442,661) £4.51
Exercised during the year (416,722) £4.76 (760,104) £3.02
Granted during the year 1,634,869 £3.78 791,921 £4.94
Outstanding at the end of the year  2,445,541 £4.09 1,882,162 £4.72
Exercisable at the end of the year  52,367 £4.67 16,927 £3.20

The weighted average share price at the date of exercise of share options exercised during the year was £5.16 (2020: £6.67).

The options outstanding at 27 June 2021 had a range of exercise prices of £nil to £4.94 (2020: £nil to £4.94) and a weighted average remaining contractual life of 5.1 years (2020: 5.6 years).

The expected life used in the models has been adjusted, based on best estimates, to reflect exercise restrictions and behavioural considerations.

The charge to income in relation to equity settled share-based payments in the year is £6m (2020: charge £5m).

e. Retirement benefit schemes

The Redrow Staff Pension Scheme comprises a defined benefit scheme. The Company also offers a defined contribution scheme to employees. The defined benefit scheme was closed to new entrants from July 2006, having been closed to all but a limited number of agreed new entrants from October 2001. The defined benefit scheme was closed to future accrual with effect from 1 March 2012.

The Scheme operates within the frameworks of the applicable pension’s legislation and is regulated by the Pensions Regulator. The Scheme is managed by a board of Trustees who act in line with legislation and the provisions set out within the Trust Deed and Rules which underpin the day-to-day operation of the Scheme. The Trustees' overarching aim is to ensure that there are sufficient monies available to pay members benefits when they fall due. The Trustees work in collaboration with the Company to manage the risks that this aim might not be met.

The total pension credit for the year was £7m (2020: charge of £9m). A credit of £16m related to the defined benefit section of the Scheme (2020: credit of £1.0m), with £nil being charged to the income statement (2020: charge of £nil) and a credit of £16m to the statement of comprehensive income (2020: charge of £1m). The charge arising from the defined contribution section was £9m (2020: £10m). There were no significant events during the year to report (i.e. plan amendments, curtailments or settlements).

Triennial valuation

A full independent triennial actuarial valuation of the defined benefit section of the Scheme was undertaken at 1 July 2020 using the Projected Unit Method. As at 1 July 2020, in the opinion of the Actuary, there was a deficit of £4m in the defined benefit section of the Scheme, based on the Trustees’ technical provisions assumptions with the Scheme’s assets representing 98% of the Scheme’s technical provisions. As at 1 July 2020 the value of the defined benefit section of the Scheme’s assets was £172m. The previous triennial valuation was undertaken as at 1 July 2017 and reported a deficit of £15m.

Defined benefit scheme – IAS 19R valuation

Redrow recognises all actuarial gains and losses for its defined benefit plan in the period in which they occur, outside the income statement, in the statement of comprehensive income.

This disclosure relates to the defined benefit section of the Scheme. The Scheme’s assets are held separately from the assets of Redrow and are administered by the trustees and managed professionally.

The latest formal actuarial valuation of the defined benefit section was carried out at 1 July 2020. This valuation has been updated to 27 June 2021 by a qualified actuary for the purposes of these financial statements.

During the year, the Group continued to pay its agreed contributions of £250,000 per month until March 2021 when it was agreed between the Group and the Trustees that company contributions could cease due to the Scheme being over 100% funded on the Technical Provisions basis. The Group therefore contributed £2.3m to the Scheme in the year ended 27 June 2021 (2020: £3m) and expects to contribute £nil to the Scheme in the year ending 3 July 2022.

The major financial assumptions used in arriving at the IAS 19R valuation were:

2021 2020
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 3.2% 2.9%
Rate of increase of benefits in payment (lesser of 2.5% per annum and RPI) 2 2.1% 2.0%
Discount rate  1.9% 1.6%
Inflation assumption – RPI  3.4% 3.1%
                                    – CPI  2.8% 2.3%

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.

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_2020 1.50% Long Term Trend (2020: SAPS2 CMI_2019 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 Female 24.6 years 
(2020: Male 22.0 years) (2020: Female 23.9 years)
Future pensioner currently aged 45: Male 24.4 years Female 26.8 years 
(2020: Male 24.1 years) (2020: Female 26.2 years)

No adjustments have been made to mortality assumptions at the year end to reflect the potential effects of COVID-19 as the actual plan experience is not yet available and as it is too soon to make a judgement on the impact of the pandemic on future mortality improvements. The mortality experience analysis for the Scheme will be carried out in the future as part of the 1 July 2023 funding valuation for the defined benefit section of the Scheme.

It has been assumed that members take 80% of the maximum tax-free cash available to them at the point they retire via commutation of their pension; this is based on the current commutation factors in use for the defined benefit scheme.

The total assets, the split between the major asset classes in the Scheme, the present value of the Schemes’ liabilities and the amounts recognised in the balance sheet are shown below:

Group and Company
2021
£m
Quoted
market price in
active market 
2021
£m
No quoted
market price in
active market 
2021
£m
Total
2020
£m
Quoted
market price in
active market 
2020
£m
No quoted
market price in
active market 
2020
£m
Total 
Equities 74 - 74 62  - 62
Debt instruments 70 - 70 84
- 84
Real estate 2 - 2 2 - 2
Investment funds 5 - 5 4
- 4
Other 6 - 6 6
- 6
Cash 17 - 17 12
- 12
Insurance policies - 3 3 - 3 3
Total market value of assets 174 3 177 170
3
173
Present value of obligations (137) (151)
Surplus in the Scheme 40 22

The Scheme’s assets are invested in such a way so as to ensure that the assets are sufficient and appropriate to meet the associated liabilities as they fall due. In selecting the assets, consideration is given to the nature of the liabilities and the investment strategy of the Scheme includes an allocation to liability driven investments to mitigate the impacts of changes in interest rates and inflation on both the assets and liabilities.

The defined benefit obligation can be approximately attributed to the scheme members as follows:

2021
2020
Deferred members 66 72
Pensioner members 34 28
100 100

All benefits are vested at 27 June 2021 (unchanged from 28 June 2020).

Following a High Court ruling on 26th October 2018, at the 2019 year-end the Company made an allowance within the defined benefit obligation for the estimated liabilities associated with the requirement to provide equalised benefits to male and female members in respect of Guaranteed Minimum Pensions (GMPs); otherwise known as ‘GMP Equalisation’. GMP Equalisation is an issue that impacts all defined benefit schemes that were contracted out of the State additional second pension between 17 May 1990 and 5 April 1997. For the DB Scheme, the additional liability in respect of GMP Equalisation is broadly 0.5% of the defined benefit obligation and continues to be included in this figure.


The total amounts credited/(charged) against income in the year were as follows:

Group and Company
2021
£m
2020
£m
Amounts included within the income statement: 
Administrative expenses 
Past service costs - -
Net interest on defined benefit liability  - -
- -
Amounts recognised in the statement of comprehensive income: 
Return on scheme assets excluding interest income  3 24
Actuarial movements arising from changes in demographic assumptions  (4) (1)
Actuarial movements arising from changes in financial assumptions  1 (22)
Actuarial movements arising from experience adjustments 16 -
16 1
16 1

The amount included in the balance sheet arising from the surplus in respect of the Group’s defined benefit section is as follows:

Group and Company
2021
£m
2020
£m
Balance sheet surplus
At start of year 22 18
Amounts credited against statement of comprehensive income 16 1
Employer contributions paid 2 3
At end of year  40 22
Changes in the present value of the defined benefit obligation: 
At start of year 151 130
Interest expense 2 3
Benefit payments (3) (5)
Actuarial movements arising from changes in demographic assumptions
4 1
Actuarial movements arising from changes in financial assumptions  (1) 22
Actuarial movements arising from experience adjustments (16) -
At end of year  137 151
Changes in the fair value of the Scheme’s assets: 
At start of year 173 148
Interest income 2 3
Return on scheme assets excluding interest income  3 24
Normal employer contributions  2 3
Benefit payments  (3) (5)
At end of year  177 173

The scheme rules permit the refund of any surplus to the Company with no restrictions. The surplus has therefore been recognised in full in the Group and Company balance sheets and there is no requirement to restrict the surplus nor to recognise any additional liability in respect of agreed deficit contributions.

Sensitivity of key assumptions

The table below gives a broad indication of the impact on the IAS 19R numbers to changes in assumptions and experience (away from the assumptions shown on page 198). All figures are before allowing for deferred tax.

Item Approximate
amount
2021
Approximate
amount
2020
Present value of defined benefit obligation (£m) 
Discount rate -25 basis points  144.0 160.2
Discount rate +25 basis points  130.0 143.3
Price inflation rate -25 basis points  131.8 144.9
Price inflation rate +25 basis points  142.0 157.4
Post-retirement mortality assumption -1 year age adjustment  141.9 156.6
Weighted average duration of defined benefit obligation (in years) 
Discount rate -25 basis points  20.5 22.5
Discount rate +25 basis points  20.4 22.2

8. Intangible Assets

The Group

Goodwill
£m
Software
£m
Total
£m
Cost
At 1 July 2019 1 3 4
Additions - - -
Disposals - (1) (1)
At 28 June 2020 1 2 3
Additions  - - -
Disposals - - -
At 27 June 2021 1 2 3
Accumulated amortisation 
At 1 July 2019 - 2 2
Charge - - -
Disposals - (1) (1)
At 28 June 2020 - 1 1
Charge  1 1 2
Disposals - - -
At 27 June 2021 1 2 3
Net book value 
At 27 June 2021 - - -
At 28 June 2020 1 1 2
At 30 June 2019 1 1 2

9. Property, Plant and Equipment

The Group

Freehold property
£m
Plant and machinery
£m
Fixtures
and fittings
£m
Total
£m
Cost
As at 1 July 2019 19 3 11 33
Additions 5 - 2 7
Disposals - - (2) (2)
At 28 June 2020 24 3 11 38
Additions - - 2 2
Disposals - - (2) (2)
At 27 June 2021 24 3 11 38
Accumulated depreciation
At 1 July 2019 5 3 9 17
Charge  1 - 3 4
Disposals - - (2) (2)
At 28 June 2020 6 3 10 19
Charge 1 - 1 2
Disposals - - (2) (2)
At 27 June 2021 7 3 9 19
Net book value 
At 27 June 2021 17 - 2 19
At 28 June 2020 18 - 1 19
At 30 June 2019 14 - 2 16

10. Lease Right of Use Assets

The Group

Property
£m 
Photocopiers
£m 
Vehicles
£m 
Total
£m 
Cost
Opening lease right of use asset recognised on adoption of IFRS 16 4 1 3 8
Additions - - 2 2
At 28 June 2020 4 1 5 10
Additions - - 3 3
Disposals - - (1) (1)
At 27 June 2021 4 1 7 12
Accumulated depreciation


Opening lease right of use aset recognised on adoption of IFRS 16 - - - -
Charge 1 - 2 3
At 28 June 2020
1 - 2 3
Charge 1 - 2 3
At 27 June 2021
2 - 4 6
Net book value
At 27 June 2021
2 1 3 6
At 28 June 2020
3 1 3 7
As at
27 June
2021
£m 
As at
28 June
2020
£m
Lease liabilities
Maturity analysis - contractual undiscounted cash flows
Less than one year 3 3
One to five years 4 4
More than five years
- 1
Total undiscounted lease liabilities
7 8

On implementation of IFRS 16 leases, lease payment commitments are reported within trade and other payables.

As at
27 June
2021
£m 
As at
28 June
2020
£m 
Lease liabilities included in the statement of financial position
Current 2 2
Non-current
4 4

6 6

As at
27 June
2021
£m 
As at
28 June
2020
£m
Amounts recognised in profit or loss
Interest on lease liabilities
- -
As at
27 June
2021
£m 
As at
28 June
2020
£m 
Amounts recognised in the statement of cashflows
Total cash outflow for leases 3 3

11. Investments

a. Investments

Group Company
2021
£m 
2020
£m 
2021
£m 
2020
£m 
Joint ventures - 9
- -
- 9
- -

b. Investments in joint ventures

Group Company
2021
£m 
2020
£m 
2021
£m 
2020
£m 
Share of joint venture net assets: 
Current assets - 8 - -
Current liabilities  - (3)
- -
Non-current liabilities  - (5)
- -
Net assets - -
- -
Loans from Group companies(i)  - 9
- -
- 9
- -
Share of post-tax profits from joint ventures: 
Revenue - -
- -
Cost of sales  - -
- -
Gross profit  - -
- -
Administrative expenses - - - -
Operating profit  - - - -
Finance costs  - - - -
Profit before tax  - - - -
Taxation - - - -
- - - -

(i) £nil m of the loans to joint ventures are secured (2020: £9m). 

The Group’s joint venture investments were:

  • Its 50% shareholding in the ordinary share capital of Menta Redrow Limited and Menta Redrow (II) Limited, both companies incorporated in Great Britain with a 30 June year end. Menta Redrow Limited and Menta Redrow (II) Limited were formed to pursue redevelopment opportunities in Croydon.
  • On 23 September 2020 Menta Developments Ltd purchased Redrow's remaining investment in Menta Redrow Limited and Menta (Regeneration) Limited purchased Redrow's remaining investment in Menta (II) Limited. No profit or loss was generated.

c. Investments in subsidiary undertakings

Company
£m 
At 28 June 2020 and 27 June 2021 -

The principal subsidiary company is Redrow Homes Limited. All subsidiary companies are incorporated in Great Britain except Redrow Homes (Park Heights) Limited which is incorporated in Jersey. A full list of subsidiary undertakings as at 27 June 2021 is shown below. The capital of all the subsidiary companies, consisting of ordinary shares, is wholly owned by HB (HDG) Limited which in turn is wholly and directly owned by Redrow plc.

The principal activity of Redrow Homes Limited, Redrow Real Estate Limited, Redrow Regeneration plc, The Waterford Park Company Limited and The Waterford Park Company (Balmoral) Limited is residential development. The principal activity of Harrow Estates plc is land acquisition, development and resale. HB (HDG) Limited is an intermediate holding company. St David's Park Limited principal activity is business park maintenance services.

Those subsidiaries marked with * are dormant and exempt from audit.

All the subsidiaries registered office is Redrow House, St David’s Park, Flintshire, CH5 3RX apart from those marked (i) and (ii) whose registered offices are as follows:

(i) c/o TLT LLP, 140 West George Street, Glasgow, G2 2HG
(ii) 13 Castle Street, St. Helier, Jersey, JE4 5UT

Subsidiaries
Name Company
Number
Name Company
Number
HB (HDG) Limited  1990709 St David’s Park Limited  2479183
Redrow Homes Limited  1990710 PB0311 Limited* 7577839
Harrow Estates plc  6825371 Debut Freeholds Limited* 4638403
Redrow Real Estate Limited 3996541 Tay Homes (Western) Limited* 2806562
Redrow Regeneration plc  5405272 Tay Homes (Northern) Limited*  2708575
Redmira Limited* 7587765 Tay Homes (Midlands) Limited* 2183136
HB (NW) Limited* 1189328 Tay Homes (North West) Limited* 2189721
HB (LCS) Limited (i)* SC38052 Redrow Homes (Park Heights) Limited (ii)* 66240
HB (MID) Limited* 2469449 Redrow Construction Limited* 1375826
HB (SW) Limited* 3522335 Poche Interior Design Limited* 2169473
HB (SWA) Limited* 2230870 Redrow (Shareplan) Limited* 3520984
HB (Y) Limited* 2293006 Cadmoore Limited* 3977222
HB (ESTN) Limited*  4017345 Redrow (Sudbury) Limited* 4558070
HB (WM) Limited* 3379746 The Waterford Park Company Limited 5429823
HB (SM) Limited* 3522321 The Waterford Park Company (Balmoral) Limited 6047122
HB (SN) Limited* 537405 HB (Herne Bay No 1) Limited* 7743649
HB (WC) Limited* 4984069 HB (Herne Bay No 2) Limited* 9163243
HB (WX) Limited* 1940936 Redrow Homes East Midlands Limited* 4219459
HB (EM) Limited* 2827161 Radleigh Construction Limited* 4219460
HB (CD) Limited* 2034733 Radleigh Homes Limited* 4210633
HB (GRPS) Limited* 2898913 Radbourne Edge (Holdings) Limited* 8737345
HB (CPTS) Limited* 1079513 Redrow Langley Limited*  7306461
HB (SE) Limited* 3988594 Radleigh (Hackwood) Limited* 8131049
HB (CSCT) Limited (i)* SC231364
HB (SC) Limited (i)*
SC74732
HB (1995) Limited (i)*
SC155021
Redrow Homes (Wallyford) Limited (i)*
SC205159

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 1 July 2019 3 1 4
Charge to income  (3) - (3)
Charge to equity  - - -
At 28 June 2020 - 1 1
Charge to income  - - -
Charge to equity  - - -
At 27 June 2021 - 1 1
Employee
benefits
£m 
Short-term
temporary
differences
£m 
Total
£m 
Deferred tax liabilities


At 1 July 2019 (3)
(1)
(4)
Charge to income (1)
-
(1)
At 28 June 2020 (4)
(1)
(5)
Charge to income - (1) (1)
Charge to equity  (9) - (9)
At 27 June 2021 (13) (2) (15)

The Group has no material unrecognised deferred tax assets.

A reduction in the UK corporation tax rate from 19% to 17% (effective April 2020) was substantively enacted on 6 September 2016. The March 2020 Budget announced that a rate of 19% would continue to apply with effect from 1 April 2020, and this change was substantively enacted on 17 March 2020.

An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. This will increase the Company's future current tax charge accordingly. The deferred tax asset at 27 June 2021 has been calculated based on these rates (2020: 19%) with the exception of the deferred tax liability on employee benefits which has been calculated at 35% (2020: 19%). This reflects the results of the latest triennial valuation of the defined benefit section of The Redrow Staff Pension Scheme (see page 198) which now suggests the return of the IAS 19 surplus is highly likely to take the form of a lump sum cash refund rather than a reduction in future deficit contributions.

13. Trade and Other Receivables

Group Company

2021
£m 
2020
£m 
2021
£m 
2020
£m 
Non-current assets 
Trade receivables (net) - -
- -
Amounts due from subsidiary companies - - 420 774

- -
420 774
Current assets 


Trade receivables (net) 54 25
- -
Contract assets 21 - - -
Amounts due from subsidiary companies 
- - 361 300
Other receivables 
21 8
- -
Prepayments 4 5
- -
100 38
361 300

Non-current trade receivables are stated after an allowance of £nil has been made (2020: £nil) in respect of expected credit losses. This allowance is based on an estimate of default rates. £nil provision was made during the year (2020: £nil). £nil was utilised (2020: £nil). Current trade assets are stated after an allowance of £8m (2020: £4m) in respect of expected credit losses with £nil provision utilised (2020: £nil), £nil provision released (2020: £1m) and £4m provision created (2020: £nil).

 

Amounts due from subsidiary companies are unsecured, repayable on demand and carry interest at market rate. The balance classified as current is anticipated to be repayable within the normal operating cycle of the subsidiary businesses (c4 years as explained in more detail on page 188). Of this amount £100m (2020: £75m) is expected to be recovered within 12 months of the balance sheet date.

14. Inventories

Group Company

2021
£m 
2020
£m 
2021
£m 
2020
£m 
Land for development 1,526 1,538
- -
Work in progress 910 972
- -
Stock of show homes 
77 75
- -
2,513 2,585
- -

Inventories of £1,465m were expensed in the year (2020: £1,027m). Work in progress includes £1m (2020: £1m) in respect of part exchange properties. Land held for development in the sum of £210m is subject to a legal charge as security in respect of deferred consideration (2020: £160m).

The carrying value of undeveloped land where net realisable value has been determined on the basis of a sale of land in its current state is £16m (2020: £33m). £5m of impairment costs arising from the strategic decision to scale back our London operations were expensed in the year (2020: £35m).

The Directors consider all inventory to be current in nature as they are expected to be released 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. 

Financial risk management is conducted centrally using policies approved by the Board. Market risk is negligible due to the Group’s limited exposure to equity securities (some limited exposure arises through the Redrow Staff Pension Scheme’s investment portfolio) and the associated price risk. Its foreign exchange exposure is negligible given the nature of the Group’s business and its exclusive UK activities.

 

a. Liquidity risk and interest rate risk

Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its obligations as they fall due. Liquidity risks are managed through the regular review of cash forecasts and by maintaining adequate committed banking facilities to ensure appropriate headroom. 

At 27 June 2021, the Group had total unsecured bank borrowing facilities of £353m, representing £350m committed facilities and £3m uncommitted facilities. 

The Group’s cash surpluses arise from short-term timing differences. As a consequence the Group does not consider it bears significant risk of changes to income and cash flows as a result of movements on interest rates on its interest bearing assets. 

The Group is exposed to interest rate risk as it borrows money at floating rates. The Group’s interest rate risk arises primarily from long-term borrowings. In order to manage its interest rate risk, the Group from time to time enters into simple risk management products, almost exclusively interest rate swaps. All interest rate swaps are sterling denominated. The swaps are arranged so as to match with those of the underlying borrowings to which they relate. There were no interest rate swaps in place in 2021 or 2020. 

The following table shows the profile of interest bearing debt together with its effective interest rates including non-utilisation fees.

2021 2020
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
8.1 - - - - 2.1
170
- - 170
- - - - 170
- - 170

For the 52 weeks ended 27 June 2021, it is estimated that for any incremental general increase of 1% in interest rates applying for the full year the decrease in the Group’s profit before tax would be c £1m (2020: c £1m).

b. Maturity of bank loans and borrowings

The maturity of bank loans and borrowings is as below:

The Group

2021 2020
Bank
overdraft
£m 
Bank
loans
£m
Bank
overdraft
£m 
Bank
loans
£m
Due between two and five years - - - 177
- - - 177

Maturities above include estimated interest payable to the maturity of the facilities.

The Company

2021 2020
Bank
overdraft
£m 
Bank
loans
£m
Bank
overdraft
£m 
Bank
loans
£m
Due between two and five years - - - 177
- - - 177

Maturities above include estimated interest payable to the maturity of the facilities.

The Company was fully compliant with its banking covenants as at 27 June 2021.

At the year end, the Group and Company had £350m (2020: £193m) of undrawn committed bank facilities available.

There is no material difference between the fair value of the bank overdrafts and bank loans and their carrying values as shown in the balance sheet.

c. Amounts due in respect of development land

The Group’s policy permits land purchases to be made on deferred payment terms. In accordance with IFRS 9, the deferred creditor is recorded at fair value and nominal value is amortised over the deferment period via financing costs, increasing the land creditor to its full cash settlement value on the payment date. 

The interest rate used for each deferred payment is an equivalent loan rate available on the date of land purchase, as applicable to a loan lasting for a comparable period of time to that deferment. 

The maturity profile of the total contracted cash payments in respect of amounts due in respect of land creditors at the balance sheet date is as follows: 

Balance
at June
£m 
Total
contracted
cash
payment
£m 
Due
less than
one year
£m
Due
between
one and
two years
£m 
Due
between
two and
five years
£m 
27 June 2021 294 298 144 125 29
28 June 2020
302
306
186
51
69

d. Maturity of trade and other payables

The maturity profile of the total contracted payments in respect of financial liabilities (excluding amounts due on land creditors shown separately in note 15c) at the balance sheet date is as follows:

Balance
at June
£m 
Total
contracted
cash
payment
£m 
Due
less than
one year
£m
Due
between
one and
two years
£m 
Due
between
two and
five years
£m 
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
Trade and other payables (excluding lease liabilities) 527 527 527 - -
Lease liabilities 6 8 3 2 3
28 June 2020 533
535
530
2
3

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
2021
£m 
2020
£m 
2021
£m 
2020
£m 
Held at Banks with at least an A credit rating per Standard & Poor's  160 44
144 41
160 44
144 41

No credit limits were exceeded during the reporting year or subsequently and the Group does not anticipate any losses from non-performance by these counterparties.

There is no specific concentration of credit risk in respect of home sales as the exposure is spread over a number of customers. In respect of trade receivables, the amounts presented in the balance sheet are stated after adjusting for any doubtful receivables, based on the judgement of the Group’s management through using both previous experience and knowledge of the current position of any more substantial receivables.

f. Capital management

The Group defines total capital as equity plus net debt where net debt is calculated as total borrowings less cash and cash equivalents.

The Group monitors capital on the basis of the level of returns achieved on its capital base and, with respect to its financing structure, the gearing ratio. This is defined as net debt divided by equity.

The Group’s objective in managing capital is to safeguard its ability to continue as a going concern in order to deliver value to its Shareholders and other stakeholders. The Group operates within policies outlined by the Board in order to maintain an appropriate funding structure. The Board keeps the Group’s capital structure under review.

The total capital levels and gearing ratios as at 27 June 2021 and 28 June 2020 are as follows:

2021
£m 
2020
£m 
Total borrowings - 170
Less cash and cash equivalents (160) (44)
Net (cash)/debt (160) 126
Equity  1,872 1,626
Total capital  1,712 1,752
Operating profit adjusted for joint ventures      321 148
ROCE (Operating profit as above as a percentage of opening and closing total capital) 18.5% 9.2%
Gearing ratio  N/A 7.7%

g. Fair values

Basis for determining fair values

The principal methods and assumptions used in estimating the fair value of financial instruments can be found in the Accounting Policies pages 188 to 189.

Fair value hierarchy

Financial assets and liabilities carried at fair value are categorised within the hierarchal classification of IFRS13:

  • Level 1: Quoted prices in active markets for identical assets or liabilities.
  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
  • Level 3: Inputs are not based on observable market data.

The fair values of financial assets and liabilities is as follows:

The Group

Fair value
heirarchy
2021
Loans and
receivables
Fair value
£m 
2021
Loans and
receivables
Carrying value
£m 
2020
Loans and
receivables
Fair value
£m 
2020
Loans and
receivables
Carrying value
 £m 
Assets per the balance sheet 
Current trade and other receivables Level 1 & 2* 96 96 33 33
Cash and cash equivalents Level  1 160 160 44 44
256 256 77 77
* includes £4m in respect of shared equity debtors (2020: £6m) (Level 2).
Fair value
 heirarchy
2021
Other
 financial
liabilities
Fair value
 £m 
2021
Other
financial
liabilities
Carrying value
 £m 
2020 
Other
financial
liabilities
Fair value
£m 
2020 
Other
financial
liabilities
Carrying value
£m 
Liabilities per the balance sheet 
Bank loans and overdrafts  Level  1 - - 170
170
Trade payables and other payables including customer deposits  Level  1 516 516 527
527
Land creditors  Level  1 294 294 302
302
Lease liabilities Level  1 6 6 6
6
816 816 1,005
1,005

Other financial liabilities are at amortised cost.

The Company

Fair value
hierarchy
2021
Loans and
receivables
Fair value
£m 
2021
Loans and
receivables
Carrying value
 £m 
2020
Loans and
receivables
Fair value
£m 
2020
Loans and
receivables
Carrying value
£m 
Assets per the balance sheet 
Cash and cash equivalents Level 1 144 144 41
41
Amounts due from subsidiary companies (current and non-current) Level 1 781 781 1,074
1,074
925 925 1,115
1,115
Fair value
hierarchy
2021
Other
financial
liabilities
Fair value
 £m 
2021
Other
financial
liabilities
Carrying value
 £m 
2020
Other
financial 
liabilities
Fair value
£m 
2020
Other
financial
liabilities
Carrying value
 £m 
Liabilities per the balance sheet 
Bank loans and overdrafts  Level 1 - - 170
170
Amounts owed to subsidiary companies Level 1 14 14 14 14
14 14 184
184

16. Trade and Other Payables

Group Company
2021
£m 
2020
£m 
2021
£m 
2020
£m 
Non-current liabilities 
Amounts due in respect of development land 150 116
- -
Lease liabilities 2 4
- -
152 120
- -
Current liabilities 
Trade payables 362 311
- -
Amounts due in respect of development land 144 186
- -
Private customer deposits  68 38
- -
Social customer payments on account 74 165
- -
Amounts owed to subsidiary companies  - -
14 14
Lease liabilities 4 2
- -
Other payables 5 10
- -
Other taxation and social security 7 3
- -
Accruals 103 90
14 12
767 805
28 26

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.

17. Long-Term Provisions

The Group

Onerous
contracts
£m
Remedial
Works
£m
Total
£m 
At 28 June 2020 1 7 8
Transfer from trade payables - 19 19
Provisions created during the year  - 7 7
Provisions released during the year  - - -
Provisions utilised during the year  - - -
At 27 June 2021 1 33 34

Provisions relate to onerous contracts and maintenance, sundry remedial costs in respect of development activities and a provision for potential fire safety remedial works. It is expected that this provision will be utilised within four years. In the current year certain balances have been reclassified from trade payables to provisions to provide greater clarity in disclosures. The Directors do not consider this to represent a material change in presentation.

Remedial Works Provision

Redrow is predominantly a housebuilder, however, we have historically built a small number of high rise buildings mostly on a design & build basis by main contractors. Ten schemes have now been identified as potentially not conforming to the current government regulations. Each development is unique and was designed in accordance with the building regulations and accepted practices at the time. Where we have an obligation to do so, we are fully committed to working with our contractors, leaseholders and management companies to address any issues on these schemes where required. Management has estimated the cost of remedial works but it is inherently uncertain whilst investigations and assessments are ongoing. It is not anticipated that any reasonable changes would have a material impact on operating profit in the period.

18. Share Capital

Number of
ordinary shares
As at 28 June 2020 and 27 June 2021 (ordinary shares of 10.5p each) 352,190,420

19. Share Capital, Share Premium Account and Reserves

The Group

Share
capital
£m
Share
premium
account
£m 
Other
reserves
£m 
Retained
earnings
£m 
At 1 July 2019
37 59 8 1,481
Total comprehensive income  - - - 114
Dividends paid  - - - (72)
Movement in respect of LTIP/SAYE  - - - (1)
At 28 June 2020
37 59 8 1,522
Total comprehensive income  - - - 261
Dividends paid  - - - (21)
Movement in respect of LTIP/SAYE  - - - 6
At 27 June 2021 37 59 8 1,768

Other reserves

Other reserves consists of a £7m Capital redemption reserve (2020: £7m) and a £1m Consolidation reserve (2020: £1m).

Undistributable reserves

Other reserves are not available for distribution.

The Company

Share
capital
£m
Share
premium
account
£m 
Other
reserves
£m 
Retained
earnings
£m 
At 1 July 2019
37 59 7 908
Total comprehensive income - - - 3
Dividends paid  - - - (72)
At 28 June 2020
37 59 7 839
Total comprehensive income - - - 7
Dividends paid  - - - (21)
At 27 June 2021 37 59 7 825

Other reserves

Other reserves consists of a £7m Capital redemption reserve (2020: £7m).

Undistributable reserves

Other reserves are not available for distribution.

20. Movement in Net (Debt)/Cash

The Group

At
29 June
2020
£m
Non-cash
movement
£m
Cash flow
 £m 
At
27 June
2021
£m 
Cash and cash equivalents  44
4 112 160
Bank loans  (170)
- 170 -
Net (debt)/cash (126)
4 282 160

Non-cash movement comprises movements in respect of LTIP/SAYE together with relevant IAS19, IFRS7 and IFRS16 non cash movements. 

The Company

At
29 June
2020
£m 
Non-cash
movement
£m 
Cash flow
 £m 
At
27 June
2021
£m 
Cash and cash equivalents  41
(1) 104 144
Bank loans  (170)
- 170 -
Net (debt)/cash (129)
(1) 274 144

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 £156m (2020: £170m) 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 128 to 153 notably the 'Single Total Figure of Remuneration Table (Audited)' on page 144. A summary of remuneration provided to key management personnel is provided in note 7c.

There have been no material transactions with key management personnel. There is no other difference between transactions with key management personnel of the Company and the Group.

The Company funds the operating companies through both equity investment and loans at commercial rates of interest. In addition, the Company provides its subsidiaries with the services of Senior Management, for which a recharge is made to those subsidiary companies based upon utilisation of services.

The amount outstanding from subsidiary undertakings at 27 June 2021 was £781m (28 June 2020: £1,074m). The amountowed to subsidiary undertakings at 27 June 2021 was £14m (28 June 2020: £14m).


The Company provided the Group’s defined benefit pension scheme, as detailed in note 7e. Expected service costs were charged to the operating businesses at cost. There is no contractual arrangement or stated policy relating to the charge. Experience and actuarial gains are recognised in the Company, via the statement of comprehensive income.

During the year, the Group sold its interest in Menta Redrow Limited and Menta Redrow (II) Limited as disclosed in note 11.

23. Alternative Performance Measures

Redrow uses a variety of Alternative Performance Measures (APMs) which are not defined or specified by IFRSs but which the Directors believe are pertinent to reviewing and understanding the broader performance of the Group, in conjunction with IFRS defined measures.  

Accident incident rate by site

No. of notifiable accidents in financial year divided by average no. of sites.

Dividend per share

Interim and final dividend per share declared in respect of the financial year.


Earnings per share (EPS) (IFRS measure)

Profit attributable to ordinary equity shareholders (excluding exceptional items and deferred tax rate changes) divided by the weighted average no. of ordinary shares in issue during the financial year. See note 6.


HBF customer recommend rating

Independent HBF customer satisfaction rating score.

Hurdle rates

Gross margin and internal rate of return minimum rates required for land purchase appraisals.


Land holding years

No. of plots in owned land holdings at June divided by no. of legal completions in financial year.

2021 2020
Owned land holdings at 27 June 2021/28 June 2020 29,460 25,130
Legal completions 5,620 4,032
Land holding years 5.2 6.2

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 June divided by the number of ordinary shares in issue at June.


Number of trainees

No. of trainees at June as a percentage of employees at June.


Order Book

The value of reserved and exchanged sales which had not legally completed at year end.


private reservation rate

No. of private reservations per week in financial year divided by average no. of sales outlets.


Return on capital employed (ROCE)

Operating profit before exceptional items adjusted for joint ventures as a percentage of opening and closing capital employed. See note 15f.


Return on equity (ROE)

Profit before tax before exceptional items adjusted for joint ventures as a percentage of opening and closing net assets.

2021
£m 
2020
£m 
Net assets at 27 June 2021/28 June 2020 1,872 1,626
Net assets at 28 June 2020/30 June 2019 1,626 1,585
Average net assets 1,749 1,606
Profit before taxation 314 140
Return on equity % 18.0% 8.7%

Revenue (IFRS measure)

Revenue per consolidated income statement.

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.