redrow-plc-annual-report-2016

32 Redrow plc Annual Report 2016 STRATEGIC
GOVERNANCE
FINANCIAL
SHAREHOLDER
33
REPORT
REPORT
STATEMENTS
INFORMATION
OPERATING REVIEW CONTINUED
TO ENSURE THAT WE GROW OUR BUSINESS RESPONSIBLY, WE ARE FOCUSED
ON MANAGING ALL OUR RESOURCES EFFICIENTLY AND EFFECTIVELY
5,372
MANAGE OUR RESOURCES EFFICIENTLY
North – 2,588
South – 4,114
12,724
LAND ADDITIONS
BY GEOGRAPHY
Central – 2,625
Greater London – 3,397
1,991
1,068
2,139
1,975
12 13 14 15
16
12,545
FORWARD LAND
CONTRIBUTION TO
OWNED LAND BANK
IN LAST FIVE YEARS
STRATEGIC REPORT
2016 PERFORMANCE HIGHLIGHTS
+6% TO 24.2%
ROCE
+27% TO 4.95 years
LAND BANK YEARS
+172% TO 5,372 plots
FORWARD LAND CONTRIBUTION
TO OWNED LAND BANK
WE ARE WORKING TOWARDS
CERTIFICATION TO ISO14001
BY 2018.
LAND
The Group took advantage of a benign land market
during the year to secure 12,724 plots across 46
new sites on attractive terms. After taking into
account legal completions, land sales and re-plans,
the current owned and contracted land bank with
planning increased by 7,784 plots to 26,000 with a
Gross Development Value based upon the 2016
average selling price of £7.5bn. The owned current
land bank stands at 23,374 plots and represents
4.95 years of output.
Forward land contributed 5,372 plots across ten
sites to the owned land bank with Colindale
accounting for 2,900 plots. Colindale was acquired
unconditionally under contract in December 2013
and obtained planning two years later: the site was
transferred to the owned land bank in the secondhalf
of 2016. In addition to successfully pulling
through plots from the forward land bank, we also
made good progress on securing draft allocations
on a number of strategic sites as local authorities
work towards meeting the Government’s deadline
of having Local Plans in place next year.
All regions increased their owned and contracted
land banks during the year. The largest gains were
in the South, where we have seen most growth
in the business and in Greater London, largely
as a result of the Colindale site. Elsewhere in
London we adopted a cautious approach to land
buying focusing on the more affordable Outer
London boroughs.
A combination of a benign market with the
opportunity to acquire a number of large sites
on favourable terms, and a strong pull through
from forward land, meant we were able to secure
land at margins above our hurdle rates.
STRATEGY IN ACTION –
WASTE AND CONSTRUCTION
RESOURCE EFFICIENCY
In order to help identify areas to improve our
waste and construction resource efficiency further,
Redrow commissioned Ethical Partnerships to
undertake a programme of independent site
inspections on developments in our South East
division. A number of opportunities to minimise
waste were identified and we have subsequently
developed a blueprint for reducing waste on site and
improving resource efficiency. Work carried out to
date on this blueprint has highlighted the value of
integrated action across the business involving
construction, commercial, buying and technical teams
working together to develop a culture of resource
efficiency and waste prevention.
One important component of the blueprint is working
with subcontractors to improve their understanding of
waste prevention and control. To support this we have
become an ambassador for a new UK-wide information
campaign that aims to provide practical support to
small businesses, helping them manage waste
efficiently and meet their Duty of Care obligations.
The ‘Right Waste, Right Place’ campaign, sponsored by
the Environment Agency, the Chartered Institution of
Wastes Management and the Environmental Services
Association, provides practical information and a range
of tools to help small businesses identify their current
level of compliance.