Risk

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. 

Risk Owner

Group Head of Commercial

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Material and trade shortages 
• Material and trade price increases 
• Advance payment applications 

Risk

Failure of our customer service could lead to relative under performance of our business.

Risk Owner

Group Customer & Marketing Director

Key Controls and Mitigating Strategies

• 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 Ombudsman requirements. 
• Attention to customer feedback supported by a process at nine months post occupation to address root cause of customer fatigue and dissatisfaction. 
• Regular review of our marketing and communications policy at both Group and divisional level.

Example Key Risk Indicators

• Customer satisfaction metrics
• NHBC Construction Quality Review scores and Reportable Items

Risk

Non-compliance with Health & Safety standards and Environmental regulations could put our people and the environment at risk. 

Increased levels of scrutiny of the housebuilding industry heightens the risk environment as does ensuring safe COVID-19 working practices are adhered to. 

Risk Owner

Group Health and Safety and Environmental Director

Key Controls and Mitigating Strategies

• Dedicated in-house team operating across the Group to ensure compliance of appropriate Health and Safety standards supported by external professional expertise. 
• H,S&E Assurance Audits. 
• Monthly Divisional H,S&E Leadership meetings. 
• Group and Regional H,S&E Leadership meetings. 
• Internal and external training provided to all employees. 
• Divisional Construction (Design and Management) Regulation (CDM) inspections carried out to assess our compliance with our client duties under CDM. 
• Health and Safety discussion at both Group and divisional level board meetings supported by performance information. 
• CDM competency accreditation requirement as a minimum for contractor selection process. 
• Regular monitoring and reporting on environmental performance.

Example Key Risk Indicators

• Accident incident rate
• H,S&E Assurance Audits outcomes 
• ‘Near Miss’ statistics 

Risk

Risks associated with failure to embed sustainable development principles. 

Risk Owner

Group Communities Director 

Key Controls and Mitigating Strategies

• 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.
• Training for divisional teams. 

Example Key Risk Indicators

• Group GHG emissions scope 1 & 2 
• % of timber certified 
• Average SAP rating 
• Tonnes of construction waste per 100m² build 
• % of materials suppliers and manufacturers who have actively confirmed compliance with the Modern Slavery legislation and Redrow Code of Conduct 

Risk

The inability to adapt to changes within the planning and regulatory environment could adversely impact on our ability to comply with regulatory requirements. 

Risk Owner

Group Communications Director, Group Human Resources Director, Group Company Secretary and Managing Director (Harrow Estates) 

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Government consultations 
• Planning approval statistics 
• Proposed Government legislation 

Risk

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. 

Risk Owner

Chief Information Officer

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Level of instances reported in the media 
• Penetration test results

Risk

The ability to purchase land suitable for our products and the timing of future land purchases are fundamental to the Group’s future performance. 

Risk Owner

Group Chief Executive

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Forward land pull through
• Owned land holding years
• Land offer statistics 

Risk

A significant fraud or uninsured loss could damage the financial performance of our business.

Risk Owner

Group Finance Director

Key Controls and Mitigating Strategies

• 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. 

Example Key Risk Indicators

• Business Process Review outcomes 
• Insurance Review outcomes 

Risk

Risks associated with the potential physical effects of climate change. 

Risk Owner

Group Communities Director

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Group GHG emissions Scope 1 & 2
• Average SAP rating

Risk

Availability of mortgage finance is a key factor in the current environment. 

This risk has decreased slightly in the year due to a reduction in the uncertainty around the impact of Help To Buy changes. 

Risk Owner

Group Finance Director

Key Controls and Mitigating Strategies

• 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. 

Example Key Risk Indicators

• Loan to value metrics 
• Number of mortgage products readily available 

Risk

The loss of key staff and/or our failure to attract high quality employees will inhibit our ability to achieve our business objectives. 

Risk Owner

Group Human Resources Director

Key Controls and Mitigating Strategies

• 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. 

Example Key Risk Indicators

• Employee turnover levels
• Employee engagement score

Risk

The Group requires appropriate facilities for its short-term liquidity and long-term funding.

Risk Owner

Group Finance Director

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Cash conversion 
• Forecast undrawn committed facilities

Risk

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. 

Risk Owner

Group Design and Technical Director

Key Controls and Mitigating Strategies

• 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.

Example Key Risk Indicators

• Customer satisfaction metrics
• Focus Group feedback 
• Emerging planning regulation