REG - Redrow PLC - Building Safety Pledge

RedrowAnnouncement

06/04/2022 07:00

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RNS Number : 3863H  Redrow PLC  06 April 2022

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FOR IMMEDIATE RELEASE

 

6 April 2022

 

REDROW plc

Commitment to the Government's Building Safety Pledge

 

As reported in our Interim Results we believe the housebuilding industry
should play its part in resolving the issue of legacy fire safety in high rise
buildings and that the financial burden should not be borne by leaseholders.

 

In January of this year the Rt Hon Michael Gove (Secretary of State for
Levelling Up, Housing & Communities and Minister for Intergovernmental
Relations) announced his intention to approach developers to fund the
remediation of life critical fire safety issues on buildings over 11m with
which they had any involvement in the development, going back 30 years. Since
then the Home Builders Federation and the Company, along with many others in
the industry, have been engaged with Government with regard to this matter.
The individual companies within the industry, including ourselves, have now
received from Government a proposed voluntary pledge by developers regarding
the remediation of life critical fire safety issues on these buildings. Redrow
has signed up to this pledge and a copy will be made available on our website,
www.redrowplc.co.uk, in due course.

 

Historically Redrow has not been a major constructor of high rise apartments.
The majority of our high rise apartment schemes were built between 2000 and
2010 as a response to the Governments Planning Policy Guidance 3 which
encouraged high density living. Due to our limited expertise in the design and
building of such schemes, we outsourced the design and construction of the
vast majority of these developments to principal contractors. To date Redrow
has provided for estimated remediation costs of the small number of such
buildings we constructed ourselves.

 

In signing up to the pledge we will be remediating all the buildings in which
we were involved, whether or not we constructed them, going back 30 years.
This is a highly complex matter and the exact remediation work required and
for the exact number of buildings will take time to determine. Our existing
provision for fire safety in high rise buildings is £36m. Based on the latest
information we have and the work done by our internal teams we believe an
additional provision of £164m is required as a result of the pledge. This
will be treated as an exceptional item in the results for the 2022 Financial
Year. We will work with leaseholders to remediate their buildings and, where
possible, pursue recoveries from main contractors, warranty providers and
other third parties. As these recoveries are not certain, they have not been
recognised in estimating the provision. These remediation works are expected
to take a number of years to complete.

 

This pledge is in addition to the Residential Property Developer Tax of 4% of
pre-tax profit which came in to effect on 1 April 2022.

 

The person responsible for making this notification is Graham Cope, Group
Company Secretary.

 

 

 For further information contact:

 Redrow plc
 Matthew Pratt, Group Chief Executive      01244 527411
 Barbara Richmond, Group Finance Director  01244 527411

 Instinctif Partners                       0207 457 2020
 Tim McCall, Head of Capital Markets       07753 561862
 Bryn Woodward, Associate Partner          07500 027181

 

 

LEI Number:

2138008WJZBBA7EYEL28

 

Announcement Classification:

2.2 Inside information

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