Taylor Wimpey plc Annual Report and Accounts 2021 www.taylorwimpey.co.uk
Annual Report and Accounts 2021
building
momentum
Strategic report
2 Highlights 2021
4 Chairman’s statement
6 Chief Executive’s statement
6 Our investment case
9 How we are building momentum
10 Our key priorities
18 Our market environment
20 Market trends and response
22 Our business model
24 Our strategy and key
performance indicators
28 Environmental strategy
30 Materiality assessment
32 Material issues progress and targets
34 Stakeholder engagement
36 Section 172 (1) statement
38 Stakeholders
48 Task Force on Climate-related
Financial Disclosures
56 Sustainability Accounting Standards
Board Disclosures
58 Non-Financial information statement
59 Risk management
61 Principal Risks and uncertainties
66 Group financial review
Directors’ report
72 Governance at a glance
74 Board of Directors
76 Chairman’s letter
88 Nomination and Governance
Committee report
98 Audit Committee report
105 Remuneration Committee report
125 Statutory, regulatory and
other information
Financial statements
128 Independent auditors’ report
136 Consolidated income statement
137 Consolidated statement of
comprehensive income
138 Consolidated balance sheet
139 Consolidated statement of
changes in equity
140 Consolidated cash flow statement
141 Notes to the consolidated
financial statements
172 Company balance sheet
173 Company statement of changes in equity
174 Notes to the Company
financial statements
179 Particulars of subsidiaries,
associates and joint ventures
183 Five year review
Shareholder information
184 Notice of Annual General Meeting
187 Notes to the Notice of Annual
General Meeting
191 Shareholder facilities
Contents
www.taylorwimpey.co.uk/corporate
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www.linkedin.com/company/taylor-wimpey
We have a clear purpose to
deliver great homes and create
thriving communities and a
strategy to ensure the long term
sustainability of the business,
for all stakeholders. During
2021, we have continued to
drive performance through
a business-wide commitment
to our key priorities:
Operational excellence and discipline driving
an increase in operating margin / p10
Progressing recent land acquisitions through
planning to facilitate outlet growth in late 2022
and volume growth in 2023 / p12
Continue to deliver consistently great build
quality, customer service and employee
experience and identify where we can add
value / p14
Further embedding sustainability through the
business, targeting areas where we can make
the most difference to future proof the
business / p16
Our Annual Report and Accounts
2021 and online Sustainability
Supplement and ESG Addendum
2021 can be viewed at
www.taylorwimpey.co.uk/corporate
1Taylor Wimpey plc Annual Report 2021
Total dividend per share
paid in the year
8.28p
Year end net cash
‡
£837.0m
Tangible net assets per
share
†
118.1p
Return on net
operating assets**
24.7%
2020: 9.9%
Group financial highlights
Operating profit margin
19.3%
2020: 10.8%
2021 highlights
Profit before tax
£679.6m
Group completions
including joint ventures
14,302
18.34p
8.28p
19 20 21
£545.7m
£719.4m
£837.0m
19 20 21
100.5p
110.0p
118.1p
19 20 21
19 20 21
16,042
9,799
14,302
Operating profit*
£828.6m
£850.5m
£300.3m
£828.6m
19 20 21
£835.9m
£264.4m
£679.6m
19 20 21
Revenue
£4,284.9m
£4,341.3m
£2,790.2m
£4,284.9m
19 20 21
Cash conversion
‡‡
69.4%
2020: (54.9)%
Alternative Performance Measures
The Group uses Alternative Performance Measures (APMs), such as those indicated above with a footnote symbol, as key
financial performance indicators to assess underlying performance of the Group. Definitions and reconciliations of our APMs to
the equivalent statutory measures are included in Note 32 of the financial statements. Please see page 71 for definitions.
2 Taylor Wimpey plc Annual Report 2021
Strategic report
Highlights 2021
UK operational highlights
Reduction in direct
CO
2
emissions intensity
since 2013
50%
2020: 30%
Construction waste
recycled
97%
2020: 97%
Annual Injury Incidence Rate
(per 100,000 employees
and contractors)
214
2020: 151
Employee engagement
score
91%
Contributions to local
communities, via planning
obligations
£418m
2020: £287m
Affordable homes as %
of total UK completions
18%
2020: 20%
ESG (environmental, social, governance)
highlights
Customer satisfaction
8-week score (%)
92%
2020: 92%
Construction Quality
Review average score
(out of 6)
4.67
2020: 4.45
Number of homes
inorderbook
10,009
2020: 10,685
Customer satisfaction
9-month recommend
score
79%
2020: 78%
Net private sales rate per
outlet per week
0.91
2020: 0.76
Plots in UK short term
landbank
c.85k
2020: c.77k
Read more about our approach to ESG on page 7 and
pages 16 and 17
Read more about our operations on pages 6 to 17 and 66 to 69
We participate in various benchmarks
and have been awarded a number of
industry accreditations
We participate in several global and sectoral
benchmarks. We are a constituent of the
Dow Jones Sustainability Europe Index and
included in the S&P Global Sustainability
Yearbook 2022. We are part of FTSE4Good,
have an AA rating from MSCI and have
received an ESG Risk Rating of Low from
Sustainalytics. We are a member of Next
Generation, the sustainability benchmark for
UK housebuilders, ranking third and receiving
a Gold Award for 2021. We disclose our
performance to CDP and received the
following scores: CDP Climate Change A-
(2020: B), CDP Water B (2020: B), and CDP
Forests B- for deforestation and forest risk
commodities (2020: B). We have also been
recognised by CDP as a Supplier
Engagement Leader and received a Supplier
Engagement score of A for our approach to
engaging suppliers on climate change.
are not comparable in our Spanish business. There is a short summary of the
Spanish business in the Group financial review of operations. The Group
financial review is presented at Group level, which includes Spain, unless
otherwise indicated.
3Taylor Wimpey plc Annual Report 2021
Dividend / Share Buyback
In line with our Ordinary Dividend Policy, we
are pleased to announce that the 2021 final
dividend of 4.44 pence per share will be paid
in May, subject to shareholder approval at
the 2022 Annual General Meeting (AGM). In
combination with the 2021 interim dividend,
this gives total ordinary dividends for the year
of 8.58 pence per share. Details of our
resolutions for the 2022 AGM can be found
on pages 185 to 189.
We are also pleased to announce that we will
be returning up to £150 million of excess
cash in respect of 2021 by way of a share
buyback. When approving this method, the
Board took into account stakeholders’ needs
and all relevant circumstances. The share
buyback is expected to benefit shareholders
through the opportunity for increased future
dividends per share on the remaining shares.
The Board expects that the share buyback
will result in an increase in earnings per share
and considers it to be in the best interests of
shareholders generally.
Alongside an excellent
operational performance in
2021, we are pleased to have
delivered value to all of our
stakeholders in a real and
sustainable way while
continuing to build momentum.
This Annual Report and
Accounts showcases how we
have achieved this.
2021 has proven to be a very successful year
for Taylor Wimpey, but it has not been without
its challenges. As the world continued to
respond and adapt to the COVID-19
pandemic, we remained, and continue to be,
focused on delivering improved operating
margin and setting the business up well for
accelerated volume growth, from 2023.
2021 performance
I am delighted to report that in 2021 we
completed 14,302 homes across the Group
(2020: 9,799) including joint ventures. This
is a 46% increase on 2020 performance, as
the business steadily increased operations.
Group operating profit increased to £828.6
million (2020: £300.3 million), with an operating
profit margin of 19.3% (2020: 10.8%) as we
optimised selling price and we maintained our
Irene Dorner
Chairman
strong focus on cost efficiency. This resulted
in profit before tax of £679.6 million (2020:
£264.4 million). More information can be
found within our Group financial review.
We started 2022 in a very strong position with
an excellent order book amounting to 10,009
homes (31 December 2020: 10,685 homes)
excluding joint ventures, valued at £2,550
million (31 December 2020: £2,684 million)
and were 47% forward sold for 2022 private
completions (2021: 54%). Despite wider
economic uncertainty, forward indicators
continue to show good underlying demand
for our homes and pricing remains positive.
Following the equity raise in June 2020, we
stepped up our activity in the land market to
take advantage of the opportunities before
competition returned and have successfully
added c.29k new plots to the short term
landbank over the last 18 months, including
converting c.9k plots from our strategic land
pipeline. These sites will enhance our portfolio
and deliver a strong financial performance.
We are laser focused on continuing to drive
momentum by progressing land through the
planning system to deliver outlet-led growth
from 2023.
During 2021, the Competition and Markets
Authority’s (CMA) investigation into the
historical sale of leasehold properties with
doubling ground rent clauses by the
Company was closed, following the
agreement of voluntary undertakings.
Stakeholder engagement
We recognise that we can only achieve
our purpose, to deliver great homes and
create thriving communities, if we take
account of the views of all of our
stakeholders in our decision making. The
Board is responsible for ensuring that our
business is sustainable in the long term by
respecting and taking into account the needs
and views of all our stakeholders in our
decision making process.
Our employees are what makes Taylor
Wimpey so special. Our performance in
2021, both from a financial and operational
perspective, is down to all of their hard work
and determination. Despite the majority of
Board meetings taking place virtually in
2021, we did have the opportunity to visit the
South Midlands business unit, where we met
employees in the office and out on site. It was
great to see the site operating at normal
levels in a COVID-secure way, ensuring the
health and safety of everyone on site whilst
delivering for our customers.
We have also taken the opportunity to
moreclearly articulate the role of the Board’s
Employee Champion, who is responsible for
championing the employee voice in the
boardroom and strengthening the link between
the Board and employees. Gwyn Burr, Non
Executive Director, was our Employee
Champion during 2021 and attended three
National Employee Forum (NEF) meetings. As
Gwyn will be stepping down from the Board in
2022, Robert Noel, our Senior Independent
Director, has been asked to take on the
Employee Champion role. In 2022, in addition
to attending the NEF meetings, the Employee
Champion will also hold in person
Creating value for all
ofour stakeholders
4 Taylor Wimpey plc Annual Report 2021
Strategic report
Chairman’s statement
conversations with small groups of junior to
mid-level employees in each Division, including
those from the regional offices, sites and sales
centres, to listen to their views on any topics
they may wish to raise, outside of the NEF and
without senior management being present, to
further encourage openness. The Board are
interested to hear the feedback received as
part of these sessions.
I continued to meet with investors in 2021
to build on the dialogue established following
the virtual Chairman’s roadshow I conducted
in Autumn 2020. To allow for an open
conversation in respect of the issues most
important to each shareholder, no formal
agenda was set in advance of each meeting.
Investors were keen to hear my and the
Board’s perspective on a variety of key
themes, such as ESG, fire safety and
succession. I value the insight I gained from
these meetings which I have fed back to the
Board to consider as part of our decision
making process. Once again shareholders
were unfortunately not permitted to attend
the 2021 AGM in person, however
shareholders were able to listen throughout
the proceedings and ask the Directors
questions in real time during the meeting
through an audiocast facility.
Fire safety
It has long been our view that customers and
leaseholders should not have to pay for fire
safety remediation works to ensure their
buildings are safe and mortgageable. We
took early and proactive action, committing
significant funding to address fire safety and
cladding issues on our buildings, with total
amounts provided up to March 2021 of £165
million. Taylor Wimpey’s decision a year ago
meant that funding was in place to bring all
our affected buildings, going back 20 years
from January 2021, up to current EWS1
standard. The Board receives regular
updates on the progress of remediation
works and the topic of fire safety and
cladding is included on every Board meeting
agenda for discussion. We consider that fire
safety is an industry wide issue that needs an
industry wide solution and we will continue to
work with the Government to play our part to
help to resolve these wider issues.
ESG
The elements of ESG have always been
an important part of working for Taylor
Wimpey and have positively contributed to
our culture and ways of doing business, for
example in respect of health and safety, our
number one priority, and our approach to
employee engagement.
During the year we have conducted an
independent review to assess the progress
we have made in defining what ESG means
for us and identified areas that would benefit
from further attention. The Board was
pleased to receive positive feedback in terms
of the extent to which important elements of
ESG are built into our day to day business
operations and it is helpful to understand
how we can improve our communications in
this area to ensure this is visible to all of our
stakeholders and this is something we will be
working on throughout 2022. Our ESG
strategy will continue to be aligned to our
purpose, ensuring that we play our part in
creating a sustainable future for everyone.
In 2021, we participated in various benchmarks
and were awarded a number of industry
accreditations, including a Gold Award in the
Next Generation benchmark (a homebuilder
specific sustainability benchmark). We are
pleased with the levels of engagement across
the business with good progress against our
key targets. To ensure that we remain focused
on minimising the impact we have on climate
change and protecting our planet for future
generations, we have added ‘natural resources
and climate change’ as a Principal Risk and the
Board will continue to monitor progress.
Further information on this new Principal Risk,
and on the also newly added Principal Risk of
‘cyber risk’, can be found on page 65.
We take a science-based approach to
carbon reduction, and the Science Based
Targets initiativehas confirmed that our
operational carbon reduction target is
consistent with the reductions required to
keep warming to 1.5ºC. We have made
excellent progress towards our carbon
reduction target. Against our 2019 baseline,
we have achieved a 13% reduction in direct
carbon emissions intensity(scope 1 and 2
emissions per 100 square metres of
completed homes)and a 20% absolute
reduction. Our current target was published
last year but our commitment to climate
action goes back much further. Since 2013,
we have achieved a 50% reduction inour
direct carbon emissions intensity.
We support the UK’s commitment to reach
net zero carbon by 2050. We will be
developing our net zero transition plan
and a net zero target during 2022. An
environmental measure has been included in
the Executive Directors’ annual bonus plan
(the Executive Incentive Scheme) and
requires the Executive Directors to have a
credible net zero carbon transition plan
approved by the Board alongside the
achievement of a measurable carbon
reduction target. The intention is to then
introduce an environmental measure in the
wider annual bonus scheme for 2023
performance. Further details on the role of
the Board in ESG matters can be found on
page 79 and specific ESG performance
measures can be found on page 107.
Chief Executive succession
We announced in December that Pete Redfern
will be stepping down as Chief Executive after
nearly 15 years in the role. Pete has made an
invaluable contribution to the business in this
time, including having successfully led the
Company through the financial crisis and the
pandemic. During his time as Chief Executive,
he has created an excellent culture which is
renowned throughout the industry for doing
the right thing. Given the strength of the
business, both Pete and I believe that it is the
right time for new leadership as we start the
next chapter. On behalf of the Board and
everyone at Taylor Wimpey, I would like to
express our sincere thanks for the leadership
that he has provided to the Company which
has seen it return c.£2.85 billion to
shareholders since 2007.
Following a rigorous process led by the
Nomination and Governance Committee,
we were delighted to announce earlier this
year that Jennie Daly, our Group Operations
Director, will succeed Pete as Chief Executive
following the conclusion of the 2022 AGM.
Jennie joined the business in 2014 and has
held a number of senior roles within the
business before being appointed to the
Board as Group Operations Director in 2018.
Prior to joining Taylor Wimpey, Jennie also
held senior roles at Redrow plc, so is an
experienced industry executive. Jennie
has consistently played a key role in the
Company’s operational and strategic
development, as her remit has gradually
grown to include all of our central operational
functions and has made a valuable
contribution to the Board. The Board is
confident that Jennie’s wealth of knowledge
and experience, alongside her values and
leadership style, makes her the right person
to lead the Company to deliver improved
margin and volume growth, whilst ensuring
long term value for all our stakeholders.
In late January, we also announced that
in light of upcoming changes to their
commitments on other boards, Angela
Knight CBE and Gwyn Burr will be stepping
down from the Board on 26 April following
the conclusion of the 2022 AGM. The strong
progress Gwyn Burr has made as Employee
Champion will continue under Robert Noel
as her successor in that role. A search
process is underway to find their
replacements to ensure that the Board
continues to hold the most appropriate
balance of skills and operational experience.
2022 AGM
This year’s AGM will take place in person
at the Crowne Plaza Hotel in Marlow, as it
is closer to our Head Office and I am very
much looking forward to the opportunity to
meet many of our shareholders in person.
Looking forward
2022 will be a period of transition at Taylor
Wimpey, whilst the new Chief Executive
takes the lead and drives our business to its
full potential. I am confident that Jennie is the
right person to achieve this, and she has the
full support of the Board and the Group
Management Team.
I want to finish by saying thank you to our
employees, customers, shareholders,
subcontractors and suppliers for their
continued support. I am incredibly proud of
all that Taylor Wimpey has achieved in 2021
and look forward to building on this success
in 2022 and beyond.
Irene Dorner
Chairman
5Taylor Wimpey plc Annual Report 2021
I want to begin my last Chief
Executive statement at Taylor
Wimpey by, firstly, thanking all
the individuals and the teams
across the business for their
daily hard work, dedication
and – on a personal note –
their support.
Optimising
performance
to benefit all
stakeholders
stakeholder relationships (and you can read
more about this on pages 38 to 47). I am
particularly proud to share that, not only do
we continue to be a 5-star homebuilder as
rated by customers in the Home Builders
Federation (HBF) customer survey, but we
are also, once again, the highest rated major
housebuilder in the National House Building
Council’s (NHBC) independently measured
2021 Construction Quality Review (CQR).
This is an outstanding effort and truly reflects
the efforts and the pride and passion of our
people across the business.
As Irene set out in her Chairman’s letter, our
employees are what make Taylor Wimpey
special. We are deeply shocked and
saddened by the tragic events in Ukraine
and, together with our employees, we will be
pledging our support to the humanitarian
effort. You can read more about our people
on pages 40 to 41. While voluntary turnover
increased in the year, alongside Annual Injury
Incidence Rate, it is worth noting that the
2020 comparators were impacted by
COVID-19. You can read more about our key
operational performance metrics on pages
24 to 27.
I have been in this role for nearly 15 years
and over 20 years with the business and it
has been an incredible journey. I am very
proud of what we have achieved at Taylor
Wimpey and the culture we have built and I
will miss it greatly. Whilst there is always
much more we can do and need to do, the
Pete Redfern
Chief Executive
Our investment case
Our approach to land differentiates Taylor
Wimpey and has enabled us to build an
excellent landbank which will underpin strong
volume and margin growth potential and
returns to shareholders. We are focused on
execution and delivering value from our
outstanding landbank and via our talented
teams, in a responsible way to benefit all
stakeholders.
Read more in relation to our key strengths
and resources on page 22
1. Strong momentum following
significant recent land investment
to drive outlet growth and
volumes
c.50
additional outlets to be added in the period
H1 2021 to H1 2023
2. Clear levers to improve
operating margin
21-22%
operating profit margin target
3. Highly cash generative with a
commitment to return excess cash
c.£150 million
2022 buyback
4. Delivering for all stakeholders
5-star
HBF customer satisfaction rating
I’m pleased to report that we have
delivered an excellent performance in 2021,
significantly increasing profit, margins and
home completions in a challenging year for
the industry with pressure on the availability
and cost of certain materials. It has also
not been a ‘normal’ year for our people,
customers, subcontractors or suppliers,
amidst changing COVID-19 restrictions.
However by working together, our
construction sites have continued to operate
safely and efficiently and we have continued
to serve our customers. We have continued
to prioritise the safety and wellbeing of
everyone working for, and with us, and that
of our customers, and have increased
engagement and collaboration. This has
continued to strengthen these key
6 Taylor Wimpey plc Annual Report 2021
Strategic report
Chief Executive’s statement
business is in excellent health with a very
strong balance sheet, and an outstanding
short term landbank and strategic land
pipeline, with real forward momentum. In
particular, our approach, with your support
as shareholders, to landbuying during the
pandemic, at a time when there was
significantly reduced competition, has set us
up extremely well for the future. It enabled us
to accelerate our landbuying, at attractive
margins, creating a balanced portfolio which
will benefit the business for several years.
Importantly, this has created strong
momentum, opportunity and growth and a
route to increased, and very compelling,
shareholder returns. With such exciting
prospects for the future, it is undoubtedly the
right time to hand over the business to
someone new as the Company embarks on
the next chapter.
On 7 February, the Board announced
that Jennie Daly has been appointed as
CEO, effective from the conclusion of the
AGM on 26 April 2022. This follows a
thorough recruitment and selection process
led by the Nomination and Governance
Committee of the Board, that considered a
long list of industry and non-industry
candidates, along with extensive consultation
with shareholders which is discussed on
pages 90 and 91.
I am delighted with the Board’s decision
to appoint Jennie. Jennie is a phenomenal
operator and with her vast and varied
experience and leadership capability, I am
very confident that she will deliver the value
from our outstanding landbank for all
of Taylor Wimpey’s stakeholders.
Building momentum to deliver
improved operating margin and
accelerated volume growth
Our purpose is to deliver great homes and
create thriving communities. We seek to
deliver this with a strategy set to optimise
long term shareholder returns in a
responsible way, while delivering attractive
and sustainable returns and adding value
to all stakeholders.
We are focused on excellent operational
delivery and increasing financial performance.
This is visible at all levels in the business and
reflected in our 2021 full year performance,
with improvements across key financial and
operational metrics. The 2020 equity raise
and our approach to landbuying has
continued to differentiate Taylor Wimpey,
as we added a significant amount of
attractively valued land to our portfolio.
This timely land acquisition and the hard
work by our teams in bringing it through the
planning system has positioned the business
for high-quality outlet-led volume growth
at a time when the land market has become
increasingly competitive.
With the strength of our landbank and
operational excellence we aim to grow
annual completions to between 17,000 and
18,000 in the medium term whilst generating
compelling returns.
In the following pages 10 to 17, the GMT
discuss our key priorities as we continue to
build momentum. These underpin our
confidence in future delivery.
We support the UK’s commitment to reach
net zero carbon by 2050. In 2022, we will
develop our net zero transition plan and net
zero target. We are reviewing the net zero
criteria published by the SBTi and will use
this to guide our approach. We expect to
publish our target in 2023. For the
housebuilding sector, the majority of
emissions are associated with the production
and manufacture of materials and the energy
used by customers once they have moved
into new homes (scope 3). This means
achieving net zero emissions will require
system-level changes and coordinated
action by multiple parties, from suppliers to
governments, and at all points along the
value chain. We are committed to working
with our peers, suppliers and others to help
tackle this challenge. Our plan will include
details of specific measures and key
milestones designed to provide future
measurable targets against which the
delivery of the plan can be assessed. We
have also introduced a carbon-reduction
related measure into our Executive Incentive
Scheme for 2022.
Upcoming regulatory changes
The industry will face a number of planned,
fundamental changes in the short to medium
term. Whilst there are obvious challenges,
we believe that these changes offer an
opportunity to further strengthen our
customer proposition and drive value. We will
see the first of these come into effect in
2022, with the New Homes Ombudsman
and a change in building regulations as well
as the effective removal of Help to Buy for
reservations this year ahead of the scheme’s
closure in March 2023. We have been
preparing for these changes for some time,
and this is reflected in our landbuying
approach and in our processes. More
information can be found on pages 12 and 13.
UK market environment and
current trading
The 2022 spring selling season has started
well, reflecting the underlying strength of
demand for our homes, underpinned by low
interest rates and good mortgage availability.
The net private sales rate for the year to date
(w/e 27 February 2022) was 1.02 per outlet
per week (2021 equivalent period: 0.91). At
that time, we were more than 60% forward
sold for private completions in 2022 and
have continued to grow our order book well
into the second half of the year. As at 27
February 2022, our total order book
excluding joint ventures was £2,899 million
(2021 equivalent period: £2,796 million),
comprising 10,934 homes (2021 equivalent
period: 11,054 homes).
Our approach to ESG
Our purpose is to build great homes and
create thriving communities. We will do so
sustainably, making sure those communities
are themselves sustainable for the future.
Environmental, social and governance (ESG)
has always been an important part of
working for Taylor Wimpey.
Social and Governance
Our teams see the social and governance
aspects of ESG as ‘business as usual’,
including our contributions to, and involvement
in, local communities and our strong culture.
This is also evident in our key performance
indicators (see pages 24 to 27) and our
stakeholder interactions (see pages 34 to 35).
As we embed our ambitious environmental
strategy we will further increase our focus on
this important area. More information can be
found on pages 14 to 15.
We are committed to transparent disclosure
of our ESG performance and are aligning our
reporting with the recommendations of the
Taskforce on Climate-related Financial
Disclosures (TCFD) and the Sustainability
Accounting Standards Board (SASB)
recommended disclosures for our sector,
among other standards. This can be found
on pages 48 to 57 and a full list of targets
and our progress against these targets is
included in our Sustainability Supplement
2021, available on our website.
Environment
We were one of the first UK developers to
set a carbon reduction target verified by the
Science Based Targets initiative (SBTi),
including a 1.5 degrees target for our
operational emissions. Our environment
strategy (Building a better world), launched
in 2021, also includes ambitious targets for
increasing nature on our developments,
cutting waste and improving resource
efficiency. This can be found on pages
28 to 29.
We are committed to achieving net zero and
in 2022 we will develop a plan to achieve
this. More details can be found on page 17.
Land activity
Our short term owned and controlled
landbank has increased by c.8k plots to
c.85k plots as at 31 December 2021 (31
December 2020: c.77k plots). During the
early stages of the pandemic, we took the
strategic decision to increase investment in
land on an opportunistic basis. Accordingly,
over the 18 months to 31 December 2021
we have strengthened our landbank adding
c.29k new plots to our short term landbank.
7Taylor Wimpey plc Annual Report 2021
Our high-quality landbank remains a key
competitive advantage and value driver and
underpins our confidence in delivering our
medium term target of 21-22% operating
profit margin. Our accelerated landbuying
provides us with a greater number of options
for sustainable, profitable volume growth
amidst a challenging planning environment.
We have also grown our high-quality
strategic land pipeline and are able to
operate selectively in today’s competitive
land market.
We remain very focused on progressing new
acquisitions through the planning system and
opening quality outlets. As at the end of
February we own or control, with planning or
a Resolution to Grant (RTG), 88% of the sites
where we intend to open an outlet in 2022 of
which we have already started on site at
nearly one third. We own and have outline or
detailed planning on 100% of 2022 expected
completions and 85% of 2023 expected
completions. All of the remainder are currently
controlled and most have planning or RTG.
Fire safety
It has long been our view that customers
and leaseholders should not have to pay
for fire safety remediation works to ensure
their buildings are safe and mortgageable.
We took early and proactive action,
committing significant funding to address fire
safety and cladding issues on our buildings,
with total amounts provided up to March
2021 of £165 million. Taylor Wimpey’s
decision a year ago meant that funding was
in place to bring all our affected buildings,
going back 20 years from January 2021,
up to current EWS1 standard.
We have identified all Taylor Wimpey
buildings that may require works and are in
active dialogue with building owners to
undertake these and are committed to
resolving these issues as soon as possible
for our customers. From April 2022, we will
also be paying the new Residential Property
Developer Tax (which is a 4% tax on profits)
that will fund the Government’s Building
Safety Fund for buildings over 18 metres.
We are working closely with Government
through the HBF to facilitate an equitable
solution involving all industry stakeholders.
We fully support the HBF's recent letter to
the Government which sets out proposed
additional commitments from the industry in
relation to buildings over 11 metres. We
continue to believe this is an industry-wide
issue involving many types of organisations
and therefore needs an industry-wide
solution. If accepted by Government, the
HBF proposal would result in an additional
modest provision for Taylor Wimpey.
Guidance and outlook
Interest rates remain at close to historically
low levels and there is good availability of
affordable mortgages. Whilst further rises in
the base rate are anticipated this year, we
expect affordability to remain good and the
cost of servicing a mortgage to remain
attractive compared to the cost of rental.
Assuming the market remains broadly stable,
we continue to expect to deliver low single
digit year on year completions growth in
2022 and to make further progress towards
our 21-22% operating margin target. We
expect 2022 year end net cash to be around
£600 million, depending on the timing of
land payments.
Build cost inflation is currently running at
c.6% and, at this stage, we expect sales
price growth to continue to offset build cost
inflation in 2022.
The additional land we have secured over
the last 18 months, has positioned the
Group to deliver high-quality, profitable and
sustainable growth. These additional land
investments differentiate Taylor Wimpey and
will result in increased outlet openings from
late 2022 and material volume growth from
2023, generating additional value and
compelling investor returns.
With a continued focus on execution and
efficiency, the Board believes the Group has
strong momentum to make significant
progress and deliver enhanced shareholder
value in the years ahead.
Pete Redfern
Chief Executive
Introducing our new CEO
On 7 February, Jennie Daly was announced
as CEO Designate, and will take on the role
following the Group's AGM on 26 April 2022.
Jennie is currently Group Operations Director
of Taylor Wimpey and a member of the
Board of Directors. Since 2018 and in her
current role, Jennie oversees Taylor
Wimpey’s land, planning, design, technical,
sustainability, production and supply chain
functions, as well as managing the Taylor
Wimpey Logistics business. She has almost
30 years of experience in the housebuilding
and land and planning industries, with
excellent relationships across all stakeholders.
Jennie joined Taylor Wimpey in 2014 from
Redrow Plc where she was Managing
Director of its Harrow Estates business and,
prior to that, was Group Land Manager at
Westbury Plc. Her early career was in local
authority and council planning roles in
Macclesfield and Blackpool. Jennie
is also a Non Executive Director of the
Peabody Trust and of the New Homes
Quality Board Limited.
“It is an honour and privilege to take
on the role of CEO at Taylor Wimpey
and I am delighted to have the
support of the Board and our
Executive and wider teams. This
is an outstanding business with a
strong landbank and strategic land
pipeline, and a talented and
committed team. Taylor Wimpey
is strongly positioned to deliver
sustainable sector-leading growth
and returns, whilst always operating
as a responsible business. I am
energised by the opportunities at
Taylor Wimpey and look forward
to working closely with the Board
and our teams to deliver on the
significant potential at the company.”
Jennie Daly,
Group Operations Director and CEO Designate
Strategic report
8 Taylor Wimpey plc Annual Report 2021
Chief Executive’s statement continued
Best in class
efficient engine
room
Optimising our
strong landbank
Build
quality
Our
stakeholders
Customers and
communities
Be the
employer
of choice in
our industry
Guided by our clear purpose:
To build great homes and create thriving communities
Driven through our strategy to deliver for all stakeholders
and as measured by our KPIs /p 24-27
How we
are building
momentum
Underpinned by our strong culture of doing the right thing and
our core values
Respectful
and fair
Take
responsibility
Better
tomorrow
Be proud
Our differentiated approach
to land has created strong
momentum and the
opportunity for quality,
profitable growth. Taylor
Wimpey is well positioned
to deliver strong growth and
sustainable returns, whilst
always operating as a
responsible business.
Medium term goals (2018-2023):
Return on net operating assets
35%
24.7% in 2021 (2020: 9.9%)
Operating profit margin
c.21-22%
19.3% in 2021 (2020: 10.8%)
Short term landbank
4-4.5 years
c.6.1 years in 2021 (2020: c.8.1 years)
Cash conversion
70-100%
69.4% in 2021 (2020: (54.9)%)
Remuneration report
See pages 105 to 124
Embedded ESG mindset in the business and decision
making /p 16-17
Environment strategy and targets /p 28-29
Always engaging with our stakeholders /p 38-47
Operational excellence and discipline
driving an increase in operating margin
Page 10
Continue to deliver consistently great
build quality, customer service and
employee experience and identify where
we can add value
Page 14
Progressing recent land acquisitions
through planning to facilitate outlet
growth in late 2022 and volume growth
in 2023
Page 12
Further embedding sustainability
through the business, targeting areas
where we can make the most difference
to future proof the business
Page 16
Our purpose
Our purpose must guide us in allthat we do:
we build great homes and create thriving
communities. Whilst short term performance
is very important, we run the business for
the long term; to enhance and generate
more value and to mitigate risk. We will
deliver on our priorities, in a responsible
and sustainable way which makes a positive
contribution to all stakeholders. This
approach is integrated into our business
decision making, including our commitment
to health and safety and prior investments in
build quality and in developing our people.
Delivering against our key priorities
9Taylor Wimpey plc Annual Report 2021
1/ Operational excellence and discipline driving an increase
in operating margin
Optimising
performance
Group Operations Director and
CEO Designate Jennie Daly
and Group Finance Director
Chris Carney discuss our
approach to optimising
performance and increasing
operating margin.
What is your operating margin target?
Our operating profit margin target is 21-22%.
This is the primary performance focus for
the business and we continue to target
a number of areas to achieve this;
focused on cost, process simplification
and standardisation, enhancing the core
drivers of value for our business.
What gives you confidence in achieving
your medium term margin?
We have a strong embedded margin in the
landbank, and together with the new land
acquisitions, this underpins our confidence in
achieving our operating target. We have
embedded a disciplined cost mindset across
“We are making
good progress
on our primary
performance
focus to return
the business
to 21-22%
operating margin.”
Jennie Daly
Group Operations Director
and CEO Designate
Delivering against our key
priorities:
Across the following pages, members of the
Group Management Team (GMT) discuss
how the Group is working to achieve our four
key priorities.
10 Taylor Wimpey plc Annual Report 2021
Strategic report
Our key priorities
“We have
embedded a
disciplined cost
mindset across
the business.”
Chris Carney
Group Finance Director
the business and taken a number of
proactive actions to reduce cost and
optimise financial performance. In late 2020
and into 2021 we also completed a review
and restructure of the business, including
removing a layer of senior management. This
gives our Managing Directors an enhanced
level of ownership.
Going forward, we will continue to benefit
from higher volumes and better margin land,
as well as further operational improvements
from our new house types and our recently
rolled out customer relationship management
(CRM) system.
Why is operating margin important?
Operating margin is a measure of quality.
It recognises the balance between strategic
investments and operational efficiency and is
set within a wider set of strategic objectives.
What was your operating profit for 2021
and what is the guidance for operating
margin in 2022?
In 2021 we delivered an operating profit of
£828.6 million (2020: £300.3 million),
delivering an operating profit margin of
19.3% (2020: 10.8%).
We believe that financial results must be
achieved in the right way and as a
responsible business we acknowledge both
our obligations to the communities we
operate in and the opportunity to work with
our stakeholders to create value together.
We believe that by doing this, we can deliver
enhanced value through the housing cycle
and benefit shareholders. This is also
important in a heavily regulated and
scrutinised sector.
Our trading performance reflects the
strong momentum within the business and
our confidence in achieving our target of
returning the business to a 21-22%
operating margin.
We are fully focused on long term,
sustainable shareholder value with a clear
and deliverable plan to grow volumes and
drive improved margins.
Read more about our investment case on page 6
In 2022, we expect to continue to make
progress towards our 21-22% target.
Read more on our financial performance on
pages 66 to 69
How has the increase in operating
margin been achieved in 2021?
The improvement in 2021 operating margin
has been supported by increased focuson
the balance between price and sales rate to
offset build cost inflation; annualised cost
savings arising from the 2020 restructure;
increased volumes driving more efficient
recovery of fixed costs and the absence of
non-recurring COVID-19 related costs.
Why is this the right target?
Our targets are set to be stretching. We
also believe it is important for our targets
to be sustainable, rather than deliver
peaks and troughs.
Whilst there may be years, in the right
environment and market, where margin
can be higher, we believe 21-22% is a
sustainable level to target and allows us to
also deliver quality for our other stakeholders.
It also takes into account our broad
geographic mix and the levels of customer
service and quality we want to maintain.
Medium term operating
margin target
21-22%
2021: 19.3%
2020: 10.8%
Read more on our Group
financial review
onpages66 to 71
11Taylor Wimpey plc Annual Report 2021
2/ Progressing recent land acquisitions through planning
to facilitate outlet growth in late 2022 and volume growth
in 2023
Planning for
growth
Backed by last year’s equity raise, we
stepped up our activity in the land market in
mid-2020 when there was limited
competition and successfully increased our
land pipeline with high-quality sites that will
deliver a strong financial performance.
What impact has the 2020 equity
raise had?
We added c.29k new plots to the short term
landbank over the last 18 months to the end
of December 2021, including converting c.9k
units from our strategic land pipeline. These
sites have been acquired at attractive
margins and returns in line with our medium
term operating margin target of 21-22%. We
also added c.16k potential new plots to our
strategic pipeline in that period.
What kind of land did you buy?
These sites are across all regions of our
business and are a healthy balance of large
and small sites. Our focus across each area
of the business is ensuring that this
momentum is maintained through disciplined
operational execution, progressing land
through the planning stages and ensuring
new outlets are opened, as expected.
How many plots are in the landbank?
As at 31 December 2021, our short term
landbank stood at c.85k plots (2020: c.77k
plots). A total of 49% of this short term
landbank has been strategically sourced
(2020: 50%). During 2021 we acquired
Group Operations Director and
CEO Designate Jennie Daly,
Andrew Wilkinson Divisional
Chair and Lee Bishop, Group
MD Strategic Land, discuss
why Taylor Wimpey’s
approach to landbuying
positions the Company for
profitable growth and creates
a competitive advantage.
“The 2020 equity raise
and our approach to
landbuying has continued to
differentiate Taylor Wimpey,
as we approved and added
significantly more land than
any other housebuilder in the
last 18 months. In a time when
the land market has become
increasingly competitive, this
allows us to focus on setting
the business up to deliver
outlet-led volume growth.”
Jennie Daly
Group Operations Director and
CEO Designate
“We are focused
on progressing
land through the
planning stages
and on opening
new outlets
efficiently.”
Andrew Wilkinson
Divisional Chair North
West, North East and
Yorkshire
12 Taylor Wimpey plc Annual Report 2021
Strategic report
Our key priorities continued
14,450 plots (2020: 7,644 plots). As at 31
December 2021, we were building on, or
due to start in the first quarter of 2022, on
97% of sites with implementable planning.
The average cost of land as a proportion of
average selling price within the short term
owned landbank remains low at 14.6%
(2020:15.2%). The average selling price in
the short term owned landbank in 2021
increased by 4.9% to £302k (2020: £288k).
What is strategic land and why is
it important?
Strategic land is any land that doesn’t have
a residential planning consent at the time we
take a commercial interest.
Our strategic land pipeline remains a key
strength both as an important input to the
short term landbank and in providing an
enhanced supply of land with greater control
over the planning permissions we receive.
We have one of the largest strategic pipelines
in the sector which stood at c.145k potential
plots at the end of December 2021 (31
December 2020: c.139k potential plots).
During 2021, we converted a further c.8k
plots from the strategic pipeline to the short
term landbank (2020: c.4k plots). We
continue to seek new opportunities and
added a net 6k new potential plots to the
strategic pipeline in 2021 (2020: 2k). In the
year, 50% of our completions were sourced
from the strategic pipeline (2020: 55%).
What’s next?
We have an excellent short term landbank
with secure pipeline at attractive returns due
to our strategic land pipeline and
opportunistic landbuying.
We remain laser focused on efficiently
progressing recently acquired land through
the planning system, to facilitate outlet growth
in late 2022 and volume growth in 2023. We
are positioning our business to deliver annual
completions in line with our previous
guidance of between 17,000 and 18,000 in
the medium term. We are progressing the
land through the planning stages as expected,
providing excellent momentum for growth.
Please read about our investment case on page 6
“In a land
constrained
environment and
a competitive
market, strategic
land is a key
strength and
underpin of future
profitability.”
Lee Bishop
Group Managing Director
Strategic Land
Securing land from the
equity raise
TW Bristol
Two other housebuilders were originally
selected as preferred bidders on this 450
unit site but we were able to re-engage with
the seller when that deal did not progress
amidst the COVID-19 crisis. Backed by our
equity raise in June 2020, we achieved
favourable deal terms due to the certainty
we were able to provide and the speed
at which we could execute, exchanging
unconditional contracts in July 2020 with
a fixed completion for January 2021.
The site is an excellent fit for our Bristol
business and, having opened our outlet
in December 2021, is on track to deliver
the first legal completions in April 2022.
c.29k
new plots added to the short term landbank
over the 18 months to 31 December 2021
c.16k
potential new plots added to the strategic
pipeline over the last 18 months to the end
of December 2021
13Taylor Wimpey plc Annual Report 2021
What is your top priority?
Health and safety is the number one priority
at Taylor Wimpey. We will never compromise
on this commitment to our people and
everyone who works on or visits a Taylor
Wimpey site. We embed a safety culture
through training, awareness and visible
health and safety leadership. This continued
to be the top scoring area in our employee
survey at 97% overall, with 96% of our
employees agreeing we take health and
safety seriously. This continues to be the
first item discussed at every plc Board
meeting and every regional management
team meeting.
Continuing to deliver consistently great
build quality and customer service
We began the investment in customer
service and increasing build quality several
years ago. Not only was this the right thing to
do for customers, it also set the business up
very well for upcoming changes in the New
Homes Ombudsman and building
regulations. We are delighted to have been
confirmed as, once again, leading the sector
in CQR scores and we have maintained our
HBF 5 star rating.
How can you improve on quality?
We aim to improve this further by ensuring
our quality assurance processes are
embedded at every stage of build.
Our Consistent Quality Approach (CQA)
guidelines ensure our Site Managers,
subcontractors, production and customer
service teams all have a consistent
understanding of the finishing standards we
expect on all Taylor Wimpey homes. We also
publish a customer version, so it is clearer for
customers what they can expect from us.
We updated our scope of operations for
subcontractors in 2021, which sets out our
expectations for build quality. This is part of
the contract for subcontractors. Key product
suppliers provide training to our Site
Managers, Quality Managers and trade
subcontractors on the correct installation of
their products to ensure a quality build.
Subcontractors also attend training sessions
run by our quality, site and safety teams, and
by the NHBC.
3/ Continue to deliver consistently great build quality,
customer service and employee experience and identify
where we can add value
Continually
raising our
standards
Our Divisional Chairs
Shaun White, Nigel Holland
and Group HR Director,
Anne Billson-Ross, discuss
our approach to build quality
and people.
“We are delighted
to have been
confirmed as,
once again,
leading the sector
in construction
quality.”
Shaun White
Divisional Chair, Midlands
and Wales
“We are very
pleased to be
rated once again
as a 5 star
homebuilder
by our customers
in 2021.”
Nigel Holland
Divisional Chair Central,
South West and Spain
Strategic report
14 Taylor Wimpey plc Annual Report 2021
Our key priorities continued
Quality is incentivised from the top of the
organisation. A significant proportion of our
Executive Incentive Scheme is linked to
customer service and build quality. We track
progress and calculate bonus payouts using
a combination of internal and independent
external measures: HBF 8-week and
9-month customer survey results;
Construction Quality Review (CQR) scores
conducted independently by the NHBC, and
the average reportable items per inspection
found during NHBC inspections at key
stages of the build. We also integrate
customer service and quality into our
all-employee bonus scheme.
What are you doing to address the
skills shortage?
With a well known industry skills shortage,
we have taken a proactive approach to our
early talent programmes and direct labour
model. Building the skills of our current and
future workforce is essential to address the
skills shortage in our industry and also to set
up the business to deal with future changes.
With the introduction of the Future Homes
Standard and other regulatory and technical
changes, the types of skills we need are
changing. For example, from 2025 we may
need significantly more people qualified to
set by the Ombudsman, as well as new
consumer rights such as third party home
inspections. We have signed the new code
of conduct that supersedes the UK
Consumer Code for Home Builders.
Read more on our approach to customer service,
quality and our employees on pages 38 to 41
Read more about our remuneration targets in
our Remuneration Report on pages 105 to 124
install air source heat pumps but fewer gas
engineers. We are working in our business,
and with our peers, subcontractors,
suppliers, industry associations and
educational organisations to help address this.
How are you improving customer
service?
We are very pleased to be rated once again
as a 5 star homebuilder by our customers In
2021. During the year we introduced a
Customer Director role which sits on the
management team in each regional business
to further elevate the voice of the customer.
We also rolled out our new customer
relationship management system across the
business. You can read more information on
this on page 38.
The sector continues to face scrutiny and
pressure from social media and pressure
groups, with the potential for greater
oversight from Government through a New
Homes Ombudsman. We are supportive of
the introduction of an independent New
Homes Ombudsman and will endeavour to
deliver both the letter and the spirit of
regulations and maintain this same ethos in
our relationships with our customers. We are
aligning our processes to make sure we
meet the expectations and timescales being
“Quality is
incentivised from
the top of the
organisation.”
Anne Billson-Ross
Group HR Director
2021 employee
survey results
Health and safety
96%
of employees agree that
Taylor Wimpey takes health
and safety seriously
Overall employee
engagement score
91%
95%
of employees are proud to
work for Taylor Wimpey
96%
of employees feel they can be
their authentic self at work
Read more on our KPIs
onpages 24 to 27
15Taylor Wimpey plc Annual Report 2021
4/ Further embedding sustainability through the business,
targeting areas where we can make the most difference to
future proof the business
Creating a
sustainable
future
What we do – building quality homes in
which people can live happy, fulfilled lives,
creating genuine places and providing skilled
employment – truly matters. However, we
believe how we do it matters just as much.
We have a considerable environmental and
societal footprint and so the way we go
about building great homes and
communities, our processes, our behaviours,
our ambition, makes a big difference.
Alice Black, Group General
Counsel and Company
Secretary, Ingrid Osborne
and Ian Drummond Divisional
Chairs, discuss our approach
to ESG at Taylor Wimpey.
“We have a very
strong culture at
Taylor Wimpey at
every level of the
business, with a
core principle to
‘do the right
thing’.”
Alice Black
Group General Counsel
andCompany Secretary
“Success means
building homes
and places that
enhance people’s
quality of life and
foster local
community
relationships,
and which deliver
outcomes that
are measurably
positive
for nature.”
Ian Drummond
Divisional Chair Scotland
Success means building homes and places
that enhance people’s quality of life and foster
local community relationships, and which
deliver outcomes that are measurably positive
for nature. This means playing a significant
role in the UK’s decarbonisation efforts.
It means minimising waste and maximising
biodiversity. It means reducing energy
consumption and emissions in our, and
our supply chain’s processes, as well as
downstream in our customers’ homes.
We exist to build great homes and create
thriving communities and we aim to do so
sustainably, making sure those communities
are themselves sustainable for the future.
We believe that by delivering on
our purpose we will contribute to delivering
UN Sustainable Development Goal 11:
‘making cities and human settlements
inclusive, safe, resilient and sustainable’.
What have you done so far?
We were one of the first UK developers to
set a carbon reduction target verified by the
Science Based Targets initiative (SBTi),
including a 1.5 degrees target for our
operational emissions. Our environment
strategy, launched in 2021, also includes
ambitious targets for increasing nature on
our developments, cutting waste and
improving resource efficiency. We have
made excellent progress towards our carbon
16 Taylor Wimpey plc Annual Report 2021
Strategic report
Our key priorities continued
reduction target. Against our 2019 baseline,
we have achieved a 13% reduction in direct
carbon emissions intensity (scope 1 and 2
emissions per 100 square metres of
completed homes) and a 20% absolute
reduction. Our current target was published
last year but our commitment to climate
action goes back much further. Since 2013,
we’ve achieved a 50% reduction in our direct
carbon emissions intensity. A full list of
targets can be found on pages 28 and 29
and are included in our Sustainability
Supplement 2021, available on our website.
We are committed to transparent disclosure
of our ESG performance and are aligning our
reporting with the recommendations of the
TCFD and the SASB recommended
disclosures for our sector, among other
standards. You can see more on this on
pages 50 to 57.
What is next?
We are committed to achieving net zero
and in 2022 we will develop a plan to achieve
this. For the housebuilding sector, the
majority of emissions are associated with
the production and manufacture of materials
and the energy used by customers once
they have moved into new homes (scope 3).
This means achieving net zero emissions
will require system-level changes and
coordinated action by multiple parties, from
suppliers to governments, and at all points
along the value chain. We are committed
to working with our peers, suppliers and
others to help tackle this challenge. During
2021, this included contributing to the
development of the Future Homes Delivery
Plan for our sector and inputting into the
work of the Future Homes Hub.
In 2022 we will develop our net zero
transition plan and a net zero target. We are
reviewing the net zero criteria published by
the SBTi in 2021 and will use this to guide
our approach. We expect to publish our
target in 2023. The plan will include details of
specific measures and key milestones
designed to provide future measurable
targets against which the delivery of the plan
can be assessed. We have also introduced a
carbon-reduction related measure into our
Executive Incentive Scheme for 2022.
New homes, designed for net zero and built
sustainably, will play a critical role in helping
the UK meet its decarbonisation targets, by
reducing domestic energy usage – particularly
for heating.
Our homes already integrate energy-efficient
walls and windows; insulated loft spaces;
100% low energy light fittings and LED
recessed downlights; and energy-efficient
appliances. This reduces running costs for our
customers and helps cut carbon emissions.
Over the next few years there will be
significant changes to new build homes
in the UK reflecting the introduction of the
Future Homes Standard and new regulation
on overheating, electric vehicle charging and
other environmental issues. Our target is to
reduce emissions from customer homes in
use by 75% by 2030, and we are conducting
a range of research to help us meet this.
From 2025, in line with regulation, the new
homes we build will be zero carbon ready.
During 2020 and 2021, we conducted
research to enable us to update the technical
specification for our homes in preparation for
changes to Building Regulations and the
Future Homes Standard. With the phasing in
of the new Part L and F in England from
June 2022, late summer 2022 in Wales and
Section 6 in Scotland from October 2022,
homes will have enhanced fabric standards
with the additional features that may include
heat recovery systems and PV panels.
Collectively, this will achieve a meaningful
reduction of 31% in carbon emissions from
home energy use in line with emerging
building regulations, compared with our
current specification. We are also preparing
for the phase-out of gas central heating
systems from 2025 in England and Wales
(2024 in Scotland) and will be running Future
Homes Standard product trials during 2022.
Read more about how we support the SDGs at
www.taylorwimpey.co.uk/corporate/sustainability
Read our investment case on page 6
“Our target is to reduce
emissions from customer
homes in use by 75% by
2030, and we are conducting
a range of research to
prepare for upcoming
regulatory changes and the
move towards net zero
ready homes.”
Ingrid Osborne
Divisional Chair London
and South East
17Taylor Wimpey plc Annual Report 2021
Key market data
This section considers our
industry context, how supply,
demand and external and
regulatory factors influenced
our year as well as their
potential impact on the short
and longer term.
Undersupplied market
There is a recognised housing shortage in
the UK with new home completions falling
significantly below the UK Government’s
target of 300k new homes per year. The
Government has considered several means
of addressing the housing shortage, from
reform to the planning system, to methods of
stimulating building and improving
affordability, such as Help to Buy and its
95% mortgage guarantee scheme.
The UK
housing
market
recovered
strongly in
2021
New homes construction was growing
before the COVID-19 pandemic took hold in
early 2020, albeit still significantly below the
300k target. Output has recovered in 2021
but is below 2019 levels. Many
housebuilders expect to recover to 2019
levels within the next couple of years, but
even surpassing 2019 production will likely
still fall well short of the 300k target meaning
we are likely to see a structural undersupply
of housing for some time. We intend to play
our part in addressing the housing shortage
and, assuming the market remains broadly
stable, we expect to significantly increase our
annual completions in the next few years.
Our 2021 performance
In 2021, total home completions (including
joint ventures) increased by 47% to 14,087
(2020: 9,609) as we recovered volumes
following 2020’s COVID-19 disruption. We
delivered 2,501 affordable homes including
joint ventures (2020: 1,904), equating to 18%
of total completions (2020: 20%).
Our net private reservation rate for 2021 was
0.91 homes per outlet per week (2020: 0.76).
Cancellation rates for the full year were at
normal levels of 14% (2020: 20%). Average
selling prices on private completions
increased by 3% to £332k (2020: £323k),
with the overall average selling price
increasing to £300k (2020: £288k).
We ended the year with a total order book
valued at £2,550 million (31 December 2020:
£2,684 million), excluding joint ventures,
which represents 10,009 homes
(31 December 2020: 10,685). We traded
from an average of 225 outlets in 2021
(2020: 240) and entered 2022 with
228 outlets (31 December 2020: 239).
House price growth, interest rates
and affordability
When considering our market context, it is
important to look at the wider market.
Activity in the second hand market has the
greatest influence on pricing as second hand
home sales make up the majority of housing
transactions, with new build generally
accounting for around 15-20%. 2021 saw
significant increases in house prices led by
the second hand market of c.10% in the year
to November (Source: ONS).
Whilst this was stronger than in recent years,
it was partially offset by annual wage growth
of 4.2% in the three months to November
2021, helping to maintain affordability.
Growth was less pronounced for new build
where the Stamp Duty Land Tax holiday had
less of an impact. We estimate that market-
led house price growth for our regional mix
was c.4% in the 12 months to 31 December
2021 (2020: c.1.9%).
In December 2021, economic research
group Capital Economics estimated that
mortgage payments were equivalent to 39%
of the medium full time salary which is below
the historical average of 43%. The Bank of
England (BoE) base rate rose from its historic
low of 0.1% to 0.25% in December 2021
while a second rise in February 2022 saw it
increase to 0.5%. Given rising inflation, it is
widely expected that BoE interest rates will
rise during 2022 to 1.25% according to
some market commentators (Source: The
Times). At 1% mortgage payments would
rise to the long run average of 43% of salary,
suggesting homes will remain affordable for
most of our customers (Source: Capital
Economics). The Government’s 2014
Mortgage Market Review introduced
affordability thresholds for mortgage
providers including a stress test that factors
in a 3% rise in interest rates.
At just under 65%, home ownership rates in England are much lower than the mid
2000s peak of c.71%. Average age of first time buyers is just above 32.
The home ownership rate in England UK first time buyers mortgage payments as a percentage
oftake home pay / interest rates (%)
Despite two rate rises since the historic low of 0.1%, interest rates remain low in an
historic context.
% of take home pay
Interest rate %
16
14
12
10
8
6
4
2
0
60
50
40
30
20
10
0
% of take home pay
Interest rate %
2021
1983 1990 2000
2010
Source: Nationwide, Bank of England
50
55
60
65
70
75
30
31
32
33
34
35
2021
1990 2000 2010
Owner occupiers
Average age of first time buyers
Source: Department for Levelling Up, Housing and Communities
%
Strategic report
18 Taylor Wimpey plc Annual Report 2021
Our market environment
UK employment
UK employment fared better than many had
feared through the pandemic. The
Government’s Coronavirus Job Retention
Scheme helped safeguard many jobs during
the crisis and since that scheme ended in
September 2021, the economy has seen
some improvement. The UK unemployment
rate was 4.1% in the three months to
November 2021 and there have been labour
shortages in key areas, with a record 1.2
million vacancies (Source: ONS). By
November 2021 UK GDP had surpassed its
pre-COVID level (February 2020) for the first
time by 0.7%.
Fire safety
We took early and proactive action,
committing significant funding to address fire
safety and cladding issues on our buildings,
with total amounts provided up to March
2021 of £165 million. Taylor Wimpey’s
decision a year ago meant that funding was
in place to bring all our affected buildings,
going back 20 years from January 2021, up
to current EWS1 standard.
In 2021, the UK Government introduced a
new 4% tax on the profits of property
developers to bring high rise buildings in line
with the current EWS1 standard, that we will
be paying from April 2022. In a recent letter
to the homebuilding industry in February
2022, the Government suggested a further
£4 billion may be required to bring potentially
unsafe mid rise buildings up to the required
standards. This raises the potential for
additional costs for the industry. The Home
Builders Federation (HBF) has since written
to the Government with a proposal.
We are working closely with Government
through the HBF to facilitate an equitable
solution involving all industry stakeholders.
We fully support the HBF's recent letter to
the Government which sets out proposed
additional commitments from the industry in
relation to buildings over 11 metres. We
continue to believe this is an industry-wide
issue involving many types of organisations
and therefore needs an industry-wide
solution. If accepted by Government, the
HBF proposal would result in an additional
modest provision for Taylor Wimpey.
Environmental regulation
The need to reach carbon net zero and halt
biodiversity loss has led a to number of new
environmental regulations. The most notable
is the Future Homes Standard (FHS). From
2022-2023 Parts L and F of the FHS require
changes to insulation and ventilation to
enable carbon reductions of 31% in new
homes. We are meeting these challenges
with modified designs (see page 45 for
further information). From 2025 the FHS will
require new homes to produce 75-80% less
carbon. This means replacing gas central
heating systems with alternative heating
sources such as air source heat pumps. We
are committed to achieving net zero and, in
2022, we will set out a plan to achieve this.
Achieving net zero will require wider
structural changes beyond the control of the
housing industry (for more information see
page 16 and 17).
Land and planning
The land market was competitive in 2021 as
many companies that had delayed purchase
decisions during 2020 returned to the
market. According to Savills data, in the third
quarter UK greenfield land values had grown
by 7.1% and urban values by 5.7%, year on
year. Having added significantly to our
landbank since June 2020 and with the
benefit of the largest strategic pipeline in the
sector, we are able to operate selectively.
The planning system has faced challenges
during the pandemic. In the 12 months to
December 2019, there were 326k new
planning consents but in 2020, planning was
impacted by COVID-19 disruptions and
consents for the comparable period fell to
277k. Bottlenecks have continued with 2021
consents estimated at 272k. We are aware
of difficulties in the planning system and have
factored this into our expectations and
budgeting for new outlet openings
Help to Buy
During 2021, approximately 19% of total
sales used the Help to Buy scheme (2020:
46%) at an average price of £283k (2020:
£286k). The reduction reflects changes to
the scheme in 2021 when access was
limited to first time buyers and with the
introduction of regional price caps. Since its
introduction in 2014, Help to Buy has aided
many of our customers to buy their homes.
The scheme is due to end on 31 March
2023. To ensure that first time buyers will
continue to have access to housing, the
Government and industry have put in place
deposit guarantee schemes to enable
customers to access 95% mortgages at
affordable levels. This mirrors the 5%
mortgage requirement currently needed to
take part in Help to Buy.
Supply chain
2021 was a challenging year in which the
industry faced well publicised supply
constraints for certain materials such as
timber and tiles, as well as a general
shortage of haulage. We managed these
pressures effectively, benefiting from our
scale and strong partner relationships.
During 2021, house price inflation fully offset
build cost inflation amidst wider industry
pressure on the cost and availability of
certain materials. Our national scale and
strong partner relationships and agreements
enabled us to effectively manage these
pressures. Underlying build cost inflation in
2021 was c.4% (2020: c.3%).
House price inflation was more modest than in recent cycles ahead of a stronger
uplift in 2021.
The data covers England only, but demonstrates that overall production has been
running at lower levels than the Government’s national target of 300k new homes per
year and has been further impacted by COVID-19 disruptions in 2020.
UK house price development England net additional dwellings and new build completions
New build completions (000s)
Net additional dwellings (000s)
250
200
150
100
50
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2021
2020
Source: Department for Levelling Up, Housing and Communities
ii
£k
%
40
30
20
10
0
-10
-20
300
250
200
150
100
50
0
Annual change %
Price £k
2021
1981 1990 2000
2010
Source: Nationwide
19Taylor Wimpey plc Annual Report 2021
Interest rates and
mortgage availability
Interest rates and mortgage availability determine housing
affordability and accessibility for our customers. Interest
rates remain at historically low levels and for customers able
to access the housing market a 2021 study by Halifax
found servicing mortgage payments was, on average, £800
cheaper thanrenting.
At 7.8 times median income for England and Wales in 2020
(Source: ONS), the house prices to earnings multiple
remains high. Stricter rules on mortgage lending were
introduced in 2014, aimed at ensuring customers will be
able to meet their mortgage payments if interest rates
increase, including a stress test for an up to 3% increase on
prevailing rates. In 2021, theaverage age of a first time
buyer was 32 (Source: Nationwide), suggesting there
remains considerable unmet demand.
– The UK faced inflationary pressures from
the second quarter of 2021 owing to
disruption to global supply chains as a
result of COVID-19 and other factors.
– In December 2021, the UK base rate
was raised to 0.25% from the historic
low of 0.1%. A second rise in January
2022 saw the rate move to 0.5%.
– Mortgage products have been widely
available at low interest rates but some
ultra-low rates have ended.
– UK Consumer Price Index (CPI) Inflation
rose to 4.8% in December 2021 leading
some commentators to expect interest
rates to rise to slightly above 1% by the
end of 2022.
– Mortgage payments are expected to
continue to be affordable at around the
medium term average of 43% (Source:
Capital Economics) with monthly
mortgage repayments highly competitive
in comparison to rental payments.
– Interest rates expected to gradually rise
at a modest rate and remain at affordable
levels.
– Government backed high LTV mortgages
could be offered to buyers of new build.
– Deposit Unlock is a scheme developed
by the homebuilding industry in
conjunction with mortgage providers that
is intended to help customers with low
deposits gain access to the housing
market. The scheme will provide
competitive rate mortgages to customers
with a 5% deposit and is expected to be
appealing to customers when Help to
Buy ends in England in March 2023.
– B: Mortgage
availability and
housing demand
Customer service
and quality
Responsible
sourcing
Employment, skills
and labour
availability
The UK employment rate has implications on consumer
confidence and our customers’ desire and ability to buy
homes.
A healthy employment outlook is important for general
consumer confidence in the housing market and the wider
economy.
In previous cycles, higher unemployment has been a
contributory factor to a weaker housing market.
– UK unemployment was 4.1% in the three
months to December 2021, compared to
5.2% for October to December 2020.
– Job vacancies in December 2021 were
at a record high of over 1.2 million
(Source: ONS).
– The labour market is under pressure with
shortages in certain areas such as
manufacturing and haulage and
hospitality and social care.
– Healthy employment and wage growth
underpins housing demand.
– Taken in isolation, with job vacancies at
record highs, the near term UK
employment outlook remains favourable
for housing demand.
– Potential for some bottlenecks in certain
areas and industry labour inflation.
– A long term healthy employment outlook
is important for housing as well as the
rest of the economy.
– A potential long term skills shortage
could impact the industry.
– Attracting and retaining skilled workers to
construction is important for the long
term health of the industry. Many major
housebuilders have strategies aimed at
attracting new talent to the industry.
– D: Attract and
retain high-
calibre
employees
People and skills
Help to Buy
Help to Buy has been popular with our customers,
supporting them to get onto the housing ladder and in
moving up the housing ladder.
Under the current scheme the Government will lend up to
20% of the value of a new build home (40% within Greater
London) via anequity loan (interest free for five years) to
homebuyers able to meet certain criteria, including raising a
5% deposit. The scheme is due to end in 2023.
– From March 2021, the scheme moved
into its next phase, with access limited to
first time buyers and with regional
maximum price caps.
– While the proportion of our customers
using Help to Buy reduced, the UK
housing market continued to be strong,
driven by unsatisfied demand and we
enjoyed healthy levels of sales
suggesting the targeted reduction in the
use of Help to Buy was appropriate.
– The Help to Buy scheme is due to end
on 31 March 2023, with reservations
under the scheme effectively ending
December 2022.
– Changes have been well flagged giving
us the opportunity to prepare.
– The Government has introduced its 95%
mortgage guarantee scheme.
– We will be using Deposit Unlock on a
small number of selected developments
in England and Scotland in the first
quarter of 2022.
– The Government continues to target an
increase in housebuilding.
– The Government and industry deposit
schemes are designed to help customers
with low mortgages, who may otherwise
have been reliant on Help to Buy, gain
access to housing.
– A: Government
policies,
regulations and
planning
Sustainable homes
and communities
Climate change
The Future Homes Standard (FHS) outlines new regulations
aimed at making new homes more energy-efficient. Part L
relates to the conservation of fuel and power and Part F
covers ventilation. These measures will now come into
force in June 2022 and will allow for a one year transitional
period. Further change will come in 2025 when gas central
heating systems will no longer be allowed in new
developments.
– During 2020 and 2021, we conducted a
range of research to update the technical
specification for our homes in preparation
for changes to Building Regulations Part
L and F and the eventual introduction of
the FHS.
– Opportunity to produce more energy
efficient homes for our customers with
our new house types.
– Potential increase in green mortgages
making new homes comparably cheaper
to buy than less energy efficient second
hand stock.
– Potential competitive advantage and
premium for new more energy efficient
homes.
– The Government committed to net zero
UK emissions by 2050 and we are
working on designs to make our future
new homes net zero ready, including the
replacement of gas central heating
systems with alternative technologies
such as air source heat pumps.
– For homes to become net zero there will
need to be changes to the UK’s energy
infrastructure to move away from our
reliance on gas.
– A: Government
policies,
regulations and
planning
Sustainable homes
and communities
Environment
Land and planning
environment
The planning system was impacted by the pandemic and
this year has seen some industry wide delays in planning
decisions due to a shortage of resources. The Government
has been assessing the planning system, with the aim
ofstreamlining processes and ensuring each area has a
local plan. The White Paper on wide ranging planning
reform was delayed until 2022 in order that the new
housing minister could assess proposed reforms.
– The Government released its Levelling up
White Paper in February 2022. On
planning matters, it retained its
commitments to targeting 300k new
homes per year, making Local Plans
simpler and shorter and developing
models for a new infrastructure levy with
enhanced compulsory purchase powers
to support town centre regeneration and
re-use of brownfield land. Further detail
over how this will be delivered is
expected in a planning bill in 2022.
– We have built our land position which
increases our range of options in a
period where the planning system is
facing resourcing issues and also moving
into a planning environment that may
undergo change.
– Improved speed in planning could lead to
further efficiencies in our process and
speed of build once land is acquired
– Potential overhaul to the planning system
could lead to delays while transition is in
progress.
– More readily available land could, in
some instances, lead to greater
competition.
– Given our substantial landbank and
strategic pipeline in attractive locations,
less friction in the planning system could
enable an uptick in construction activity.
– A: Government
policies,
regulations and
planning
Responsible
sourcing
Key drivers 2021 backdrop
20 Taylor Wimpey plc Annual Report 2021
Strategic report
Market trends and response
Interest rates and
mortgage availability
Interest rates and mortgage availability determine housing
affordability and accessibility for our customers. Interest
rates remain at historically low levels and for customers able
to access the housing market a 2021 study by Halifax
found servicing mortgage payments was, on average, £800
cheaper thanrenting.
At 7.8 times median income for England and Wales in 2020
(Source: ONS), the house prices to earnings multiple
remains high. Stricter rules on mortgage lending were
introduced in 2014, aimed at ensuring customers will be
able to meet their mortgage payments if interest rates
increase, including a stress test for an up to 3% increase on
prevailing rates. In 2021, theaverage age of a first time
buyer was 32 (Source: Nationwide), suggesting there
remains considerable unmet demand.
– The UK faced inflationary pressures from
the second quarter of 2021 owing to
disruption to global supply chains as a
result of COVID-19 and other factors.
– In December 2021, the UK base rate
was raised to 0.25% from the historic
low of 0.1%. A second rise in January
2022 saw the rate move to 0.5%.
– Mortgage products have been widely
available at low interest rates but some
ultra-low rates have ended.
– UK Consumer Price Index (CPI) Inflation
rose to 4.8% in December 2021 leading
some commentators to expect interest
rates to rise to slightly above 1% by the
end of 2022.
– Mortgage payments are expected to
continue to be affordable at around the
medium term average of 43% (Source:
Capital Economics) with monthly
mortgage repayments highly competitive
in comparison to rental payments.
– Interest rates expected to gradually rise
at a modest rate and remain at affordable
levels.
– Government backed high LTV mortgages
could be offered to buyers of new build.
– Deposit Unlock is a scheme developed
by the homebuilding industry in
conjunction with mortgage providers that
is intended to help customers with low
deposits gain access to the housing
market. The scheme will provide
competitive rate mortgages to customers
with a 5% deposit and is expected to be
appealing to customers when Help to
Buy ends in England in March 2023.
– B: Mortgage
availability and
housing demand
Customer service
and quality
Responsible
sourcing
Employment, skills
and labour
availability
The UK employment rate has implications on consumer
confidence and our customers’ desire and ability to buy
homes.
A healthy employment outlook is important for general
consumer confidence in the housing market and the wider
economy.
In previous cycles, higher unemployment has been a
contributory factor to a weaker housing market.
– UK unemployment was 4.1% in the three
months to December 2021, compared to
5.2% for October to December 2020.
– Job vacancies in December 2021 were
at a record high of over 1.2 million
(Source: ONS).
– The labour market is under pressure with
shortages in certain areas such as
manufacturing and haulage and
hospitality and social care.
– Healthy employment and wage growth
underpins housing demand.
– Taken in isolation, with job vacancies at
record highs, the near term UK
employment outlook remains favourable
for housing demand.
– Potential for some bottlenecks in certain
areas and industry labour inflation.
– A long term healthy employment outlook
is important for housing as well as the
rest of the economy.
– A potential long term skills shortage
could impact the industry.
– Attracting and retaining skilled workers to
construction is important for the long
term health of the industry. Many major
housebuilders have strategies aimed at
attracting new talent to the industry.
– D: Attract and
retain high-
calibre
employees
People and skills
Help to Buy
Help to Buy has been popular with our customers,
supporting them to get onto the housing ladder and in
moving up the housing ladder.
Under the current scheme the Government will lend up to
20% of the value of a new build home (40% within Greater
London) via anequity loan (interest free for five years) to
homebuyers able to meet certain criteria, including raising a
5% deposit. The scheme is due to end in 2023.
– From March 2021, the scheme moved
into its next phase, with access limited to
first time buyers and with regional
maximum price caps.
– While the proportion of our customers
using Help to Buy reduced, the UK
housing market continued to be strong,
driven by unsatisfied demand and we
enjoyed healthy levels of sales
suggesting the targeted reduction in the
use of Help to Buy was appropriate.
– The Help to Buy scheme is due to end
on 31 March 2023, with reservations
under the scheme effectively ending
December 2022.
– Changes have been well flagged giving
us the opportunity to prepare.
– The Government has introduced its 95%
mortgage guarantee scheme.
– We will be using Deposit Unlock on a
small number of selected developments
in England and Scotland in the first
quarter of 2022.
– The Government continues to target an
increase in housebuilding.
– The Government and industry deposit
schemes are designed to help customers
with low mortgages, who may otherwise
have been reliant on Help to Buy, gain
access to housing.
– A: Government
policies,
regulations and
planning
Sustainable homes
and communities
Climate change
The Future Homes Standard (FHS) outlines new regulations
aimed at making new homes more energy-efficient. Part L
relates to the conservation of fuel and power and Part F
covers ventilation. These measures will now come into
force in June 2022 and will allow for a one year transitional
period. Further change will come in 2025 when gas central
heating systems will no longer be allowed in new
developments.
– During 2020 and 2021, we conducted a
range of research to update the technical
specification for our homes in preparation
for changes to Building Regulations Part
L and F and the eventual introduction of
the FHS.
– Opportunity to produce more energy
efficient homes for our customers with
our new house types.
– Potential increase in green mortgages
making new homes comparably cheaper
to buy than less energy efficient second
hand stock.
– Potential competitive advantage and
premium for new more energy efficient
homes.
– The Government committed to net zero
UK emissions by 2050 and we are
working on designs to make our future
new homes net zero ready, including the
replacement of gas central heating
systems with alternative technologies
such as air source heat pumps.
– For homes to become net zero there will
need to be changes to the UK’s energy
infrastructure to move away from our
reliance on gas.
– A: Government
policies,
regulations and
planning
Sustainable homes
and communities
Environment
Land and planning
environment
The planning system was impacted by the pandemic and
this year has seen some industry wide delays in planning
decisions due to a shortage of resources. The Government
has been assessing the planning system, with the aim
ofstreamlining processes and ensuring each area has a
local plan. The White Paper on wide ranging planning
reform was delayed until 2022 in order that the new
housing minister could assess proposed reforms.
– The Government released its Levelling up
White Paper in February 2022. On
planning matters, it retained its
commitments to targeting 300k new
homes per year, making Local Plans
simpler and shorter and developing
models for a new infrastructure levy with
enhanced compulsory purchase powers
to support town centre regeneration and
re-use of brownfield land. Further detail
over how this will be delivered is
expected in a planning bill in 2022.
– We have built our land position which
increases our range of options in a
period where the planning system is
facing resourcing issues and also moving
into a planning environment that may
undergo change.
– Improved speed in planning could lead to
further efficiencies in our process and
speed of build once land is acquired
– Potential overhaul to the planning system
could lead to delays while transition is in
progress.
– More readily available land could, in
some instances, lead to greater
competition.
– Given our substantial landbank and
strategic pipeline in attractive locations,
less friction in the planning system could
enable an uptick in construction activity.
– A: Government
policies,
regulations and
planning
Responsible
sourcing
Read more about key
issues for our
stakeholders on pages
32 to 37
Read more about
our Principal Risks
on pages 62 to 65
Driver short term opportunities and risks Driver long term opportunities and risks Links to Principal
Risks
Material issues
21Taylor Wimpey plc Annual Report 2021
Development
Managing the community
and planning process
Realising
value
Optimising the
housebuilding
process
Creating value through
our business model
What we do
People
– Highly experienced
management team
– Talented, skilled and engaged
workforce with investment in
training and in young talent
Financial position
– Robust balance sheet
– Established track record of
generating cash and returning
excess cash to shareholders
Approach to ESG
– Strong health and safety culture
– 5 star customer service
homebuilder and industry-
leading build quality
– Major contributor to local
economies and communities
– Embedding sustainability
and climate action throughout
the business
– Strong culture of doing the
right thing
Land
– Well located landbank in areas
people want to live and best in
class strategic land pipeline
– Proven track record in
converting strategic land into
short term landbank
Business
– National scale and well-placed
with 23 established regional
businesses
– Efficient supply chain
management, augmented
by our Taylor Wimpey
Logistics division
Key strengths
and resources
Our business model
Investment
Selecting land
3 1
2
22 Taylor Wimpey plc Annual Report 2021
Strategic report
Why we do it
1
Investment
Shareholder capital
management
Ensuring long term sustainability
of the business through securing
a quality land pipeline, located in
places people want to live, with
good planning prospects. Our
strong land position comprises
both short term land (land with
some form of planning permission)
and strategic land (land with no
residential planning at the time
we take a commercial interest).
2
Development
Protecting capital
and adding value
Progressing land through the
planning system is the key way we
add value to the land we acquire.
Securing good quality planning
permissions benefits both our land
portfolio and the communities in
which we build, providing much
needed new homes, affordable
housing, infrastructure and
community facilities through
planning obligations.
3
Realising value
Optimising stakeholder
returns
Key to this is building quality
homes which are attractive to
customers. Health and safety is
our first priority and is not an area
we will compromise. We seek to
do the right thing, and deliver our
strategy in a way that benefits all
our stakeholders.
As a national housebuilder we
benefit from our scale in terms
of pricing and the visibility and
certainty we are able to provide
to our partners and look to
maximise and optimise the
efficiency of our operations.
Read more on how we create
valuefor all stakeholder groups
onpages34 to 47
Read more about our approach to
identifying and managing risk on
pages 59 to 65
How we do it
We design and plot the right houses in
an efficient manner to generate strong
returns while maximising available land
resources and creating attractive places
to live. We engage extensively with
communities, before and during the
lifetime of each development. We factor
in stakeholders’ needs, addressing
environmental and other local issues and
building community facilities to create
thriving communities.
At this stage of the business model
we seek tomanage the following
Principal Risks: A, B, F, G, H
Relevant stakeholders: Customers,
Communities, Investors, Employees
We build quality homes safely and
efficiently, getting the customer
proposition right and optimising sales
price. This includes working closely with
our supply chain and our central logistics
function, TW Logistics, to ensure we
maximise the opportunities our scale
affords. We develop deep knowledge
and foster close relationships with our
supply chain to improve pricing, visibility
and security of supply. We work with our
subcontractors to make improvements
to our processes and operations. We
have implemented additional checks and
driven higher measures to remove
unnecessary costs and ensure we are
operating efficiently to maximise
stakeholder returns.
At this stage of the business model
we seek tomanage the following
Principal Risks: C, D, F, G, I
Relevant stakeholders: Customers,
Investors, Employees, Partners
We continue to look for opportunities in
the right locations that optimise our value
and meet our returns criteria. We
continue to focus on being responsive to
land market conditions. In 2020, we
completed an opportunity-led equity
raise. In 2021, we continued to transact
this increased land investment,
establishing a landbank to support
growth in future years.
At this stage in the business model
we seek to manage the following
Principal Risks: A, D, E, F, G, H
Relevant stakeholders: Customers,
Investors, Employees
The value we created
in 2021
Customers, Communities
77
planning applications granted
(2020: 68)
Partners
11.1k
subcontractors worked on
average during 2021
(2020: 12.3k)
Customers, Investors,
Employees
c.14.3k
new homes (including joint
ventures) completed for our
customers (2020: 9.8k)
Employees
5.4k
directly employed on average
during 2021 (2020: 6.0k)
Investors
c.85k
plots in our UK short term
landbank (2020:c.77k)
Investors
c.£3.4bn
land on the balance sheet
(2020: c.£2.9bn)
Prioritising sustainability
– In 2021, we contributed £418 million
to local communities via planning
obligations (2020: £287 million). This
funded a range of infrastructure and
facilities including: affordable housing;
green spaces; community, commercial
and leisure facilities; transport
infrastructure; heritage buildings; and
public art.
– We also invest in public and
community transport, walkways and
cycle paths through our planning
obligations. In 2021, 67% of our UK
completions were within 500m of a
public transport node and 86%
within 1,000m.
– We are working in our business and
with suppliers and peers to reduce
energy use and waste, improve
resource efficiency and increase our
use of recycled materials and those
with lower embodied carbon.
– We have rigorous policies and
procedures in place to address health
and safety risks, supported by training,
communication and visible leadership.
– We take account of sustainability
issues from the start of the landbuying
process, including biodiversity net
gain, flood risk, proximity and access
to infrastructure and services,
sustainable transport, community
wellbeing and local economic
development.
– By focusing on placemaking we plan,
design, layout and deliver schemes that
create successful and sustainable new
communities, where our customers
can enjoy a good quality of life.
– We are prioritising nature by targeting
increased biodiversity on our
developments.
Principal Risks key:
A: Government policies, regulations and planning
B: Mortgage availability and housing demand
C: Availability and costs of materials and
subcontractors
D: Attract and retain high-calibre employees
E: Land availability
F: Quality and reputation
G: Health, safety and environment
H: Natural resources and climate change (New)
I: Cyber security (New)
23Taylor Wimpey plc Annual Report 2021
Strategic pillar Performance in 2021 Priorities going forward
Customers and
communities
– We are pleased that we continue
to maintain our 5 star rating.
– Our 9-month satisfaction scores give
us insight into how customers feel about
the homes and places we build over the
longer term, and we are pleased to see
an improvement in the year.
– We elevated the voice of the customer
in the regional businesses this year by
introducing a Customer Director role
which sits on the regional businesses’
management teams.
– Embedded our Customer Hub, where
all initial customer calls are diverted to.
– Rolled out customer relationship
management (CRM) system, using
Microsoft Dynamics software, to all 23
regional businesses.
– We will see the New Homes Ombudsman
come into effect in 2022 and we are
continuing to align our processes to meet
expectations and timescales set by
the Ombudsman.
– Continue to embed CRM system into
the business and generate insights
and increased collaboration between
departments.
– Utilise our new standard house type range
which reflects customer feedback and
incorporates increased open plan living,
more natural light and improved storage.
Principal Risks
A, B, C, D, E, F, G, H, I
Read more in relation to our
stakeholders on pages 38 to 39,
42 to 43 and 44 to 45
Principal Risks
A, D, E
Read more in relation to our
stakeholders on pages 42 to 43
and 44 to 45
Optimising our
strong landbank
– We have grown our short term landbank
and in today’s competitive land market are
able to operate selectively with the benefit
of the largest strategic pipeline in the sector.
– Our strategic land pipeline remains a key
strength both as an important input to the
short term landbank and in providing an
enhanced supply of land with greater
control over the planning permissions
we receive.
– We continue to source a large
proportion of completions from our
strategic land pipeline.
– Our landbank years metric continues to
run ahead of our target as we continue to
process land bought as a result of our
equity raise in June 2020, when we saw a
short term opportunity in the land market
to invest for the long term.
– Land cost as a percentage of average
selling price on approvals has returned
to a low level.
– Opportunistic landbuying during the
pandemic has allowed us to be selective
in a more competitive environment,
supporting future land cost as a
percentage of average selling price
on approvals.
– Our strong landbank continues to be a key
differentiator for us, and allows us to buy
land selectively, choosing good quality
land at attractive returns.
– Continue to utilise our strategic land
pipeline to support the short term landbank.
– Continue to buy land selectively at returns
that maximise value for our shareholders.
– Remain very focused on progressing new
acquisitions through the planning system
and opening quality outlets.
– Our new house type range will help to
support best use of our landbank through
improved plotting efficiency.
Build quality
– We continue to lead the volume
housebuilders in build quality.
– Due to the increase in productivity on site
during the year, the average reportable
items per inspection increased marginally.
– We updated our scope of operations for
subcontractors in 2021, which sets out
our expectations for build quality. This is
part of the contract for subcontractors.
– Key product suppliers provide training on
the correct installation of their products to
ensure a quality build.
– Great build quality continues to be
important for long term customer
satisfaction and reduced remediation
costs and waste.
– We aim to improve build quality further by
ensuring our quality assurance processes
are embedded at every stage of build. Our
Consistent Quality Approach guidelines
ensure our Site Managers, subcontractors,
production and customer service teams all
have a consistent understanding of the
finishing standards we expect on all Taylor
Wimpey homes. We also publish a
customer version, so it is clearer for
customers what they can expect from us.
Principal Risks
A, C, D, F, G, H
Read more in relation to our
stakeholders on pages 38 to 39,
42 to 43 and 44 to 45
Read more about our Principal Risks
on pages 61 to 65
24 Taylor Wimpey plc Annual Report 2021
Strategic report
Our strategy and key performance indicators
Customer satisfaction
9-month score ‘would you
recommend?’
KPI
Objective: We strive to improve this score
and understand the reasons behind and
underlying drivers of this customer feedback.
Definition: Percentage of customers who
would recommend Taylor Wimpey to a friend
as measured by the National New Homes
Survey undertaken by the NHBC nine
months after legal completion.
Why it is key to our strategy: We think
about how customers live in the homes and
places we build for longer than the first few
months after they move in. Ensuring our
customer satisfaction remains high in the
months following completion is important.
Note: The 8-week ‘would you recommend’ score for 2021 relates to customers who legally completed between October 2020 and September 2021, with the comparators
relating to the same period in the prior years. The 9-month ‘would you recommend’ score for 2021 relates to customers who legally completed between October 2019 and
September 2020, with the comparator relating to the same period in the prior years.
Customer satisfaction
8-week score ‘would you
recommend?’
Principal Risks key:
A: Government policies, regulations and planning
B: Mortgage availability and housing demand
C: Availability and costs of materials and
subcontractors
D: Attract and retain high-calibre employees
E: Land availability
F: Quality and reputation
G: Health, safety and environment
H: Natural resources and climate change
I: Cyber security
Link to remuneration
Objective: We strive to achieve 90% or
above in this question, which equates to a
five-star rating.
Definition: Percentage of customers who
would recommend Taylor Wimpey to a friend
as measured by the National New Homes
Survey undertaken by the NHBC on behalf of
the HBF eight weeks after legal completion.
Why it is key to our strategy: Identifying
and serving the needs of our customers by
delivering a high-quality product is key to our
ambition to become a customer-focused
homebuilder.
Read more on pages 106 to 108
89%
92%
19 20 21
92%
Strategically sourced
completions
Landbank years
Objective: Increase landbank efficiency –
reduce length ofshort term owned and
controlled landbank years by c.1year to
4-4.5years.
Definition: The years of land supply in our
short term landbank based at current
completion levels.
Why it is key to our strategy: We seek to
use our high-quality landbank more efficiently
to deliver growth, bothin the number and
quality of homes built for a wider range
ofcustomers.
Land cost as % of average
selling price on approvals
Objective: We aim to source more than
40% of our completions from the strategic
pipeline per annum in the medium term.
Definition: Number of completions on land
which originally did not have a residential
planning permission when we acquired a
commercial interest in it, expressed as a
percentage of total completions.
Why it is key to our strategy: The strategic
pipeline enhances our ability to increase the
contribution per legal completion because of
the inherent margin uplift from strategic
plots. It also allows us to take a long term
view of sites.
Objective: To maintain at current levels or
reduce our average land cost.
Definition: Cost of land as a percentage of
average selling price on approvals.
Why it is key to our strategy: Maintaining
a sustainable land cost percentage increases
value for our shareholders.
56%
55%
50%
19 20 21
16.2%
18.3%
16.1%
19 20 21
c.4.8
c.8.1
c.6.1
19 20 21
77%
78%
19 20 21
79%
Objective: Reduce defects found during
buildstages.
Definition: The average number of defects
found per plotduring NHBC inspections at
key stages of the build.
Why it is key to our strategy: Reducing
the number of defects per plot is crucial to
ensuring we deliver consistently high-quality
homes for our customers, whilst also
minimising the cost of rectifications.
Construction Quality
Review
Average reportable items
per inspection
Objective: To achieve an average score of
four out of six across Taylor Wimpey.
Definition: The average score, out of six,
achieved during an in-depth annual review of
construction quality on a site-specific basis.
Why it is key to our strategy: Right first
time continues to be a key priority within our
customer-focused approach. CQRs focus on
construction quality and understanding ‘why
or how’ given levels of quality have resulted.
Read more on pages 106 to 108
4.13
4.45
4.67
19 20 21
0.28
0.24
0.26
19 20 21
25Taylor Wimpey plc Annual Report 2021
Strategic pillar Performance in 2021 Priorities going forward
Be the employer
of choice in our
industry
– Voluntary employee turnover has
increased following a year of very low
employee turnover as a result of the
uncertainty caused by the pandemic.
– Recruitment to early talent programmes
has increased in the year. Increasing the
future skills and talent within our business
is essential for long term sustainability,
particularly in the face of a well-known
industry skills shortage.
– Due to the restructure of the business and
increased employee turnover, in 2021 the
number of directly employed key trades
and apprentices reduced.
– Health and safety is the number one
priority at Taylor Wimpey and we will never
compromise on this commitment to our
people and everyone who works on or
visits a Taylor Wimpey site.
– Our AIIR remains well below both the HBF
Home Builder Average AIIR of 264 and
Health and Safety Executive construction
industry average AIIR of 353, but we will
continue to seek to improve this. We
believe the increase in the accident rate is
due to higher than average turnover
among operatives and an increase in
production on our sites.
– We conducted an employee survey in
2021, high scoring areas in this survey
included health and safety, diversity and
inclusion, and our vision and strategy.
– We embed a safety culture through
training, awareness and visible health and
safety leadership. We continue to focus
on continuing to improve health and safety
on our sites.
– Work with the sector to collectively
address the skills shortage.
– In 2022, we will explore how we can
increase flexibility for on site roles.
– To support attracting, selecting and
retaining diverse candidates we will run an
inclusive leadership coaching programme
for Managing Directors in 2022.
– Benchmark our policies and practices
against the Stonewall Diversity Benchmark.
– Offer training which progresses careers
and strengthens succession pipelines to
drive business continuity and level of
knowledge and experience in a highly
competitive skills sector.
Principal Risks
D, F, G, H
Read more in relation to our
stakeholders on pages
40 to 41 and 42 to 43
Best in class
efficient engine
room
– We generated a strong sales rate in 2021,
in the context of a supportive backdrop
of low interest rates and good mortgage
availability.
– Entered 2021 with a strong order book
position, reflecting continued strong
demand for our homes and supporting
visibility.
– Private legal completions per outlet were
particularly strong in the year, recovering
from the impact of COVID-19.
– In 2021, we successfully built the
prototypes of the new house type range
and tested these with customers.
– In the year, we relocated our Taylor
Wimpey Logistics (TWL) business to
more efficient space in Peterborough.
TWL helps drive efficiencies and quality
and gives good visibility of supply.
– Embedded cost discipline mindset in
the business.
– Continue to focus on generating
efficiencies.
– Continue to prioritise a strong order book.
– We remain focused on optimising sales
prices to support margins and shareholder
returns.
– Our new house type range supports
efficiencies and the transition to upcoming
new regulations. In 2022, we will start to
sell homes from our new house type range.
Principal Risks
A, B, C, D, E, F, G, I
Read more in relation to our
stakeholders on pages
38 to 39 and 40 to 41
26 Taylor Wimpey plc Annual Report 2021
Strategic report
Our strategy and key performance indicators continued
Number recruited into
early talent programmes
Health and Safety Annual
Injury Incidence Rate
(per 100,000 employees and
contractors)
KPI
Objective: To reduce the impact of the
industry skills shortage and future-proof
our business.
Definition: The amount of people recruited
onto one of our early talent programmes
including graduates, management trainees
and site management trainees.
Why it is key to our strategy: Creating a
more consistent framework and
development path for early and ongoing
talent management will underpin our future
growth and customer-focused approach. We
establish bespoke development programmes
to ensure we develop the skills we need
when we need them, ensuring we have the
experience required to support our strategy.
Objective: We are committed to providing a
safe place in which our employees and
subcontractors canwork and our customers
can live.
Definition: Reportable (allreportable) injury
frequency rate per 100,000 employees
andcontractors (Annual Injury Incidence Rate).
Why it is key to our strategy: Health and
safety is our non-negotiable top priority.
Aswell as having a moral duty tomaintain
safety on site, accidents and injuries can
have a detrimental impact on the business
through additional costs, delays and / or
reputational damage.
Voluntary employee
turnover
Directly employed key
tradespeople, including
trade apprentices
Objective: We aim to attract andretain the
best people intheindustry and give them
opportunities to develop to their full potential.
Weaim to keep this within a range of 5-15%.
Definition: Voluntary resignations divided by
number of total employees.
Why it is key to our strategy: Our
employees are one of our greatest
competitive advantages and they are crucial
toexecuting our strategy. Low employee
turnover supports greater depth of
experience, continuity and development of
skills within our teams.
Objective: To improve quality, reduce
bottlenecks in key trade supply, reduce the
impact of the industry skills shortage and
future-proof the business.
Definition: The number of key tradespeople
directly employed by TaylorWimpey
including bricklayers, joiners, carpenters,
painters, scaffolders and trade apprentices.
Why it is key to our strategy: Against
industry-wide skills shortages and uncertainty
we aim to future-proof our workforce. We do
this by developing skills to build quality
homes and behaviours which align our
business to our customer-focused approach.
12.9%
9.4%
19.0%
19 20 21
1,169
1,038
743
19 20 21
116
47
105
19 20 21
156
151
214
19 20 21
Objective: We focus on building a strong
order book for thefuture while balancing our
customers’ needs. This is particularly
important in an uncertainmarket.
Definition: The total number of homes in
our year end order book.
Why it is key to our strategy: Astrong
order book provides our customers with
good visibility and provides greater stability
for business planning and enhances our
ability todeliver the best experience for
customers whilst driving themost value for
our shareholders.
Objective: We focus on building a strong
order book for thefuture while balancing our
customers’ needs. This is particularly
important in an uncertainmarket.
Definition: The total value of homes in our
yearend order book.
Why it is key to our strategy: Astrong
order book provides our customers with
good visibility and provides greater stability
for business planning and enhances our
ability todeliver the best experience for
customers whilst driving themost value
for shareholders.
Net private sales rate
Private legal completions
per outlet
Order book volume
Order book value
Objective: Ensure an efficient sales rate
that captures market demand and is
balanced with achieving the right sales
price for our homes.
Definition: The average number of private
sales made per outlet per week.
Why it is key to our strategy: We want to
become a moreefficient and agile business
that can respond quickly toopportunities in
the market, creating increased value
forourshareholders.
Objective: To improve efficiency on our
sites and increase the number of legal
completions per outlet.
Definition: The number of private legal
completions peroutlet.
Why it is key to our strategy: We are
working to increase new home supply for a
wider range of customers by improving
efficiency across our sites.
0.96
0.76
0.91
19 20 21
48.2
31.5
51.0
19 20 21
9,725
10,685
10,009
19 20 21
£2,176m
£2,684m
£2,550m
19 20 21
Principal Risks key:
A: Government policies, regulations and planning
B: Mortgage availability and housing demand
C: Availability and costs of materials and
subcontractors
D: Attract and retain high-calibre employees
E: Land availability
F: Quality and reputation
G: Health, safety and environment
H: Natural resources and climate change
I: Cyber security
27Taylor Wimpey plc Annual Report 2021
Building a
better world
feedback, including investor feedback and
research with customers. It has been reviewed
and approved by our Board of Directors.
Many environmental issues for our sector are
systemic. Achieving net zero in housebuilding
will require system-level changes and
coordinated action by multiple parties, from
suppliers to governments, and at all points
along the value chain. We work with others
to tackle industry-wide challenges directly
and through industry organisations. During
2021, we contributed to the development of
the Future Homes Delivery Plan and into the
work of the Future Homes Hub, including a
project with Next Generation to develop a
common set of sustainability metrics for the
new homes sector.
Reducing operational carbon emissions
We are working on a range of projects to
reduce energy use on our sites and are
partnering with cabin manufacturer, Danzer
and the Carbon Trust to design and to trial
new energy efficient portacabins. We are
also developing an energy-efficiency
approach to retrofitting our existing cabins.
We purchase 100% renewable electricity
for new sites during construction which
is around 72% of our total electricity
consumption (2020: 58%) and reduces
our operational carbon footprint. We have
successfully tested hydrotreated vegetable
oil as a lower carbon alternative to diesel for
on site plant equipment and our flexible car
benefit scheme ‘MyDrive’ enables employees
to have access to a new low emission car.
Around 43% of vehicles in our company car
scheme are now EV or hybrid (2020: 30%).
Our environment strategy
Our key objectives and targets Supporting targets Performance update
Climate change
Protect our planet and our future by playing
our part in the global fight to stop climate
change.
Achieve our science-based carbon
reduction target:
– Reduce operational carbon emissions
intensity by 36% by 2025 from a
2019 baseline
– Reduce carbon emissions intensity from
our supply chain and customer homes
by 24% by 2030 from a 2019 baseline
– Reduce operational energy intensity by 32% for UK building sites by 2025
– Purchase 100% REGO-backed (Renewable Energy Guarantees of Origin)
green electricity for all new sites
– Reduce emissions from customer homes in use by 75% by 2030
– Reduce embodied carbon per home by 21% by 2030
– Reduce car and grey fleet emissions by 50% by 2025
– Update our policies and processes to reflect the risks and opportunities
from a changing climate by 2022
– Make it easier for close to 40,000 customers to work from home and enable
more sustainable transport choices through 36,000 EV charging points and
3,000 additional bike stands by the mid 2020s
13%
reduction in
operational carbon
emissions intensity
from a 2019 baseline
20%
reduction in absolute
operational carbon
emissions from a 2019
baseline
72%
of our total electricity
consumption from REGO
backed renewable energy
50%
reduction in operational
carbon emissions intensity
since 2013
Nature
Improve access to and enable enjoyment
of nature for customers and communities
by regenerating the natural environment on
our developments.
Increase natural habitats by 10% on new
sites from 2023 and include our priority
wildlife enhancements from 2021.
Include our wildlife enhancements on all suitable new sites:
– Hedgehog highways from 2021
– Bug hotels (at least 20% of homes) from 2021
– Bat boxes (at least 5% of homes) from 2022
– Bird boxes (at least 80% of homes) from 2023
– Wildlife ponds from 2024
– Reptile and amphibian hibernation sites from 2025
– All new sites have planting that provides food for local species
throughout the seasons
– Help customers engage with nature and create 20,000 more
nature-friendly gardens by 2025
– 200 beehives on our sites by 2025
100
new sites included a
hedgehog highway
3
regional business have
installed beehives
Nature partnerships
with Buglife and
Hedgehog Street
All business units received
guidance on:
– Installation of hedgehog
highways
– Bug hotels and bee bricks
– Nature friendly planting
– Biodiversity net gain
Resources and waste
Protect the environment and improve
efficiency for our business and our
customers by using fewer and more
sustainable resources.
Cut our waste intensity by 15% by 2025
and use more recycled materials.
By 2022, publish a ‘towards zero waste’
strategy for our sites.
– Engage with suppliers to meaningfully reduce plastic packaging on our
sites by 2025
– Help 20,000 customers to increase recycling at home by 2025
– Reduce operational mains water intensity by 10% from a 2019 baseline
by 2025
– Make it easier for 20,000 customer households in water stressed regions
to install a water butt by 2025
– Measure the environmental footprint of the key materials in our homes
and set a reduction target
– Measure air quality in our homes and on our sites by 2021
– Give customers the information they need to maintain good air quality
in their homes by the end of 2021
Volume of waste
1
(tonnes of construction
waste per 100 sqm build)
97%
of construction waste
recycled
(2020: 97%)
45,000
paint pots reused
or recycled
(2020: 19,400)
A home for nature on our sites
As a major landowner, we can play a
significant role across our developments in
improving the UK’s biodiversity, making the
communities of the future richer in ecological
as well as economic terms.
We take a holistic approach starting with site
design and layout, and encompassing use of
green infrastructure, wildlife enhancements
and wildlife friendly planting. We conduct an
ecological impact assessment for all sites,
that identifies protected species or habitats.
We use ecologists’ reports to identify the
measures needed, and these
recommendations are embedded into the
Site Specific Environmental Action Plan, part of
our Environmental Management System. All
new sites will integrate a biodiversity net gain
approach from 2023, and some already do so.
We are partnering with nature organisations
to help us apply best practice approaches
and engage customers and colleagues. In
2021, we worked with Hedgehog Street, a
campaign by the British Hedgehog
Preservation Society and People’s Trust for
Endangered Species to integrate hedgehog
highways across over 100 new sites. We
also worked with Buglife, The Invertebrate
Conservation Trust, to install bee bricks and
bug hotels. We supported our brick supplier,
Ibstock, on development of their first range
of bee bricks and have trialled them at one
of our sites.
We celebrated best practice with a special
commendation for biodiversity in our annual
Placemaking Awards.
Climate change and the
biodiversity crisis are
threatening the future of
today’s young people and
generations to come.
Our environment strategy, Building a Better
World, is our response to this crisis. It sets
out how we will play our part in creating a
greener, healthier future for our customers,
colleagues and communities, and reduce
and mitigate environmental risks to
our business.
Our environment strategy
Our strategy focuses on the key
environmental impacts for our business:
climate change, nature, resources and
waste. It commits us to take action across
our value chain – reducing the environmental
impacts of the goods and services we buy
and helping customers reduce their own
footprint and achieve their aspiration of a
greener and healthier lifestyle.
Our carbon reduction target has been
approved by the Science Based Targets
initiative (SBTi). The SBTi has confirmed that
our operational target is consistent with
reductions required to keep warming to
1.5°C, the most ambitious goal of the Paris
Agreement. Our scope 3 goal meets the
SBTi’s criteria for ambitious value chain
reductions, in line with current best practice.
Development of our strategy has been
informed by our materiality assessment, risk
management processes and stakeholder
28 Taylor Wimpey plc Annual Report 2021
Strategic report
Environmental strategy
Our environment strategy
Our key objectives and targets Supporting targets Performance update
Climate change
Protect our planet and our future by playing
our part in the global fight to stop climate
change.
Achieve our science-based carbon
reduction target:
– Reduce operational carbon emissions
intensity by 36% by 2025 from a
2019 baseline
– Reduce carbon emissions intensity from
our supply chain and customer homes
by 24% by 2030 from a 2019 baseline
– Reduce operational energy intensity by 32% for UK building sites by 2025
– Purchase 100% REGO-backed (Renewable Energy Guarantees of Origin)
green electricity for all new sites
– Reduce emissions from customer homes in use by 75% by 2030
– Reduce embodied carbon per home by 21% by 2030
– Reduce car and grey fleet emissions by 50% by 2025
– Update our policies and processes to reflect the risks and opportunities
from a changing climate by 2022
– Make it easier for close to 40,000 customers to work from home and enable
more sustainable transport choices through 36,000 EV charging points and
3,000 additional bike stands by the mid 2020s
13%
reduction in
operational carbon
emissions intensity
from a 2019 baseline
20%
reduction in absolute
operational carbon
emissions from a 2019
baseline
72%
of our total electricity
consumption from REGO
backed renewable energy
50%
reduction in operational
carbon emissions intensity
since 2013
Nature
Improve access to and enable enjoyment
of nature for customers and communities
by regenerating the natural environment on
our developments.
Increase natural habitats by 10% on new
sites from 2023 and include our priority
wildlife enhancements from 2021.
Include our wildlife enhancements on all suitable new sites:
– Hedgehog highways from 2021
– Bug hotels (at least 20% of homes) from 2021
– Bat boxes (at least 5% of homes) from 2022
– Bird boxes (at least 80% of homes) from 2023
– Wildlife ponds from 2024
– Reptile and amphibian hibernation sites from 2025
– All new sites have planting that provides food for local species
throughout the seasons
– Help customers engage with nature and create 20,000 more
nature-friendly gardens by 2025
– 200 beehives on our sites by 2025
100
new sites included a
hedgehog highway
3
regional business have
installed beehives
Nature partnerships
with Buglife and
Hedgehog Street
All business units received
guidance on:
– Installation of hedgehog
highways
– Bug hotels and bee bricks
– Nature friendly planting
– Biodiversity net gain
Resources and waste
Protect the environment and improve
efficiency for our business and our
customers by using fewer and more
sustainable resources.
Cut our waste intensity by 15% by 2025
and use more recycled materials.
By 2022, publish a ‘towards zero waste’
strategy for our sites.
– Engage with suppliers to meaningfully reduce plastic packaging on our
sites by 2025
– Help 20,000 customers to increase recycling at home by 2025
– Reduce operational mains water intensity by 10% from a 2019 baseline
by 2025
– Make it easier for 20,000 customer households in water stressed regions
to install a water butt by 2025
– Measure the environmental footprint of the key materials in our homes
and set a reduction target
– Measure air quality in our homes and on our sites by 2021
– Give customers the information they need to maintain good air quality
in their homes by the end of 2021
Volume of waste
1
(tonnes of construction
waste per 100 sqm build)
97%
of construction waste
recycled
(2020: 97%)
45,000
paint pots reused
or recycled
(2020: 19,400)
Resource efficiency
Building homes at volume generates high
levels of material waste. To minimise our
ecological impact we aim to use fewer and
more sustainable materials and make sure as
little as possible of what we do use is wasted.
We already source many materials with
recycled content and lower embodied
carbon and energy and will increase this.
Examples include use of timber frame,
recycled glass mineral wool insulation,
recycled plastic in uPVC windows, recycled
chipboard and recycled aggregates.
Our approach includes partnering with
suppliers. For example, during 2021, we
worked with a supplier to develop a reusable
alternative to temporary decking and joists
(used to prevent accidents by covering
stairwell holes during construction). This is
now being rolled out and will save over 3,000
tonnes of timber and up to 1,000 tonnes of
CO
2
over the next five years. We have also
reduced off-cuts by specifying timber and
plaster board sizes to suit our configurations,
while greater use of modular components
constructed off site is reducing waste.
As well as designing out waste, we are also
training colleagues, publishing a waste
league table and incentivising Site Managers
by linking their performance bonus to
progress on waste reduction.
7.50
8.71
6.52
19 20 21
1. We have improved our waste data collection processes and are now capturing data for some construction
waste not previously included in our reporting. Our data now also includes hazardous waste. As a result we
have restated our waste data for the last three years.
29Taylor Wimpey plc Annual Report 2021
Highlights in delivering
onstakeholder priorities
Understanding what matters
most to our stakeholders
Our materiality assessment methodology
We conduct a regular materiality assessment
to make sure we focus on the sustainability
issues (environmental, social and economic)
of most importance to our business and
ourstakeholders.
To determine materiality, we look at the
impact or potential impact of an issue on
ourbusiness strategy (from a performance,
cost or risk perspective). We also consider the
impact of our business on the issue andthe
importance of the issue to our stakeholders
such as colleagues, customers, investors and
communities. This is sometimes known as a
‘double materiality’ approach.
We use the results of our assessment
toinform our reporting and disclosure,
development of our environment strategy
and our approach to ESG governance and
risk management.
We regularly update our assessment.
Thelast update was in early 2020.
Read more in our Sustainability Supplement 2021
Read more in Stakeholders on pages 38 to 47
United Nations Sustainable
Development Goals
We support the United Nations Sustainable
Development Goals (SDGs), which aim to
unite governments, businesses and the third
sector to end poverty, fight inequality and
address climate change.
By delivering on our purpose, we will
contribute, in particular, to delivering UN
Sustainable Development Goal 11: ‘making
cities and human settlements inclusive, safe,
resilient and sustainable’.
Our Legacy, Engagement and Action for the
Future (LEAF) committee has reviewed the
Goals and their relevance to our business.
We used this analysis to inform our
materiality process and in the development
of our environment strategy. An index is
included on our website, showing how we
can support the goals.
Read more about how we support the SDGs at
www.taylorwimpey.co.uk/corporate/sustainability
Sustainable homes
andcommunities
£418m
contributed to local
communities via planning
obligations
Land, planning and
communityengagement
21%
of our homes were built on
brownfield land
Environment
50%
reduction in our direct
CO
2
emissions intensity
since 2013
Customer service and quality
92%
customer satisfaction
8-week score
1. Issue identification
A long list of issues was
identified based on our current
priorities, our previous materiality
assessment, business strategy,
our main impacts and risks, long
term and market trends, the UN
Sustainable Development Goals
and other external frameworks.
2. Stakeholder research
We sought the views of
investors, local government,
non-governmental organisations
(NGOs), academics, registered
social landlords and sustainable
business organisations. We also
drew on consumer research, a
Government policy review and
amedia scan.
3. Internal interviews
andresearch
We carried out internal interviews
and research with senior leaders,
functional leads, and graduates.
4. Review
The long list of issues were
grouped and plotted on our
materiality matrix. This was
then reviewed and refined,
including through meetings
with our Chief Executive
andmembers of our Group
Management Team.
30 Taylor Wimpey plc Annual Report 2021
Strategic report
Materiality assessment
Our materiality matrix
The issues identified in our materiality matrix have been
grouped to create a list ofnine material issues.
Corresponding colours have been used to show how
theissues have been grouped.
Key to material issues
Sustainable homes andcommunities
Land, planning and community engagement
Customer service and quality
Health, safety and wellbeing
Environment
Responsible sourcing
People and skills
Charitable giving
Governance and management
People and skills
96%
employees feel they can be
their authentic self at work
Health, safety and wellbeing
214
Annual Injury Incidence Rate
(per 100,000 employees
and contractors)
Responsible sourcing
A
Supplier Engagement score
from CDP for our approach
to engaging suppliers on
climate change
Charitable giving
£1.1m
donated and fundraised
forcharities and local
community causes
Medium HighExternal view – importance to stakeholders
Charitable giving
Water use efficiency
Labour relations
Accessible & adaptive homes
Resource use & waste
Sustainable materials
Innovation
Site environmental
& remediation
Customer health & wellbeing
Sustainable homes & lifestyles
Climate change
mitigation & adaptation
(inc flood risk)
Affordability &
supply of housing
Fire safety
Placemaking, design
& community infrastructure
Ethics, culture,
governance
& transparency
Customer
service /
satisfaction
Land, planning, community engagement
Ethical sourcing & human rights
Access to skills
Inclusion & diversity
Privacy / data security
Taxation & remuneration policies
Employee engagement
Biodiversity
Sustainable transport
Air quality
Choice of land
(greenfield, brownfield)
Build quality
Health, safety
& wellbeing
(employees)
Medium Internal view – importance to the business
High
31Taylor Wimpey plc Annual Report 2021
Material issues progress andtargets
Sustainable homes and communities
Targets Progress Status
Make it easier for close to 40,000 customers to work
from home and enable more sustainable transport
choices through 36,000 EV charging points and 3,000
additional bike stands by the mid 2020s
We are improving our data collection process for this target and expect to report progress next year.
Help 20,000 customers to increase recycling at home
by 2025
We will be working on this target during 2022.
Make it easier for 20,000 customer households in water
stressed regions to install a water butt by 2025
As a first step, we are mapping our regions to identify areas of current and potential water
stress.We are also reviewing our plotting for house types to understand the best locations for
waterbutt installation.
Give customers the information they need to maintain
good air quality in their homes by the end of 2021
We added information and advice to help customers maintain good internal air quality at home to
our House to Home Manual, Maintenance Guide and Touchpoint online portal.
Add an environmental category to our
placemakingawards
We added a biodiversity commendation category to our awards. This was awarded to one of
our strategic land sites which demonstrated good connectivity, biodiversity net gain, inclusion of
species enhancements and nature friendly planting schemes as well as good use of green and
blue infrastructure.
Roll-out our new standard house type range and
develop a range of standard apartments
We built 10 pilot plots for our new standard house types in 2021, and gathered feedback from
colleagues, customers and suppliers on the new designs. The range will be rolled out during 2022.
We’ve also developed concept designs for our standard apartment range that will be tested in 2022.
Land, planning and community engagement
Targets Progress Status
Update our policies and processes to reflect the risks
and opportunities from a changing climate by 2022
We have conducted climate scenario analysis and will be further developing our approach in 2022
as we develop our net zero transition plan.
Continue to strengthen our engagement and
relationship with the local communities in which
weoperate
Due to the pandemic, 2021 presented a number of challenges for engaging with local communities.
However, by utilising social media, online exhibitions and virtual forums we were able to ensure a
broad section of the community could participate.
Customer service and quality
Targets Progress Status
Achieve a CQR score of at least 4.1 in each of our
regional businesses and at least 75% of build stages
toscore 4 or above in all regional businesses
In 2021, our average score was 4.67 (2020: 4.45) compared to an industry benchmark group
average of 4.43. We met our target to achieve at least a 4.1 rating by 2021 in each regional business
and 91% of build stages scored at least four.
Resolve at least 70% of customer issues within 28 days In 2021, we achieved 53% (2020: 52%). The pandemic and rules around self-isolation affected the
speed at which we were able to resolve defects and move customers into new homes.
Resolve all complaints or have agreed an action plan
within 8 weeks
We achieved this for 75.9% of complaints in 2021. We were disappointed to miss this goal, which
was due in part to the impact of COVID-19 and self-isolation rules on our teams' ability to respond
promptly to customer issues. Our CRM system and the introduction of Customer Director roles in
our regional businesses will help us to improve performance.
Maintain a recommend score of at least 90% in the HBF
8-week survey, which equates to a 5-star rating
In 2021, 92% of customers in the 8-week survey would recommend us to a friend (2020: 92%).
Thismeans we met our target to maintain a 5-star rating.
Improve our 9-month customer satisfaction survey score Our score for 2021 was 79.2% (2020: 78.2%).
Achieve a 4.5 star rating on Trustpilot We maintained our 4 star rating but did not increase this to 4.5 star.
We focus on the sustainability issues that
aremost material for our business and
theareas where we can have a positive
impact through the homes we build, how
wedevelop our people and our approach
tothe environment.
We set targets for each of our material
issuesto help focus our efforts and drive
progress. This includes the targets which
arepart of our environment strategy.
During 2021 we made good progress
acrossmany of our target areas including
quality, customer service, carbon
reduction and waste.
A summary of our new targets can be found in
our Sustainability Supplement 2021.
In recognising the important link between the
Company’s material issues and risk
management, our material issues have been
aligned to our Principal Risks, as set out on
pages 61 to 65.
32 Taylor Wimpey plc Annual Report 2021
Strategic report
Material issues progress andtargets
Key to material issues
Achieved / on track to meet target
Not achieved
Health, safety and wellbeing
Targets Progress Status
Maintain or lower our AIIR, compared with 2020 Our AIIR increased slightly year on year but remains well below the average for the sector.
Train customer service teams on conducting safety risk
assessments when responding to customer call-outs
We trained our customer service teams to assess any safety risks to employees, contractors or
customers to ensure we respond safely to customer call-outs.
Update our Construction, Design and Environmental
Management Manual and roll-out a training and
auditprogramme
We began the update process in 2021 and this will continue during 2022. We will audit
implementation during 2022.
Run a dust awareness campaign for subcontractors Our campaign reminded everyone on our sites of the importance of dust control and correct use of
PPE. We also updated the equipment used to wet dust, which can now be operated by one rather
than two people, minimising exposure.
Train business unit management teams to record safety
observations when visiting sites
Our Accident and Incident Reporting System, SHE Assure, is being rolled out and training will take
place in 2022.
Support Site Managers to improve safety performance
through site inspections and follow up by our safety
team and HSE Advisors
All sites have monthly inspection and development visits from our external HSE Advisers. We
increased this to two visits per month during 2021 to provide further support to Site Managers.
Environment
Targets Progress Status
Achieve our science-based carbon reduction target:
reduce operational carbon emissions intensity by 36%
by 2025; reduce carbon emissions intensity from our
supply chain and customer homes by 24% by 2030
Our operational emissions intensity (scope 1 and 2), decreased by 13% against our 2019 baseline,
meaning we are on track to our target. We are developing our methodology and expect to report
progress on carbon emissions from our supply chain and customer homes from 2022.
Increase natural habitats by 10% on new sites from
2023 and include our priority wildlife enhancements
from 2021
We are developing our biodiversity net gain measurement approach for launch in 2023. We began
the roll-out of wildlife enhancements on our sites starting with hedgehog highways, bee bricks and
bug hotels.
Cut our waste intensity by 15% by 2025 and use more
recycled materials. By 2022, publish a ‘towards zero
waste’ strategy for our sites
We have reduced waste intensity by 13% since 2019. We will publish our towards zero waste
strategy during 2022. We are reviewing opportunities to expand our use of recycled materials and
measure progress.
A full summary of our environmental targets and performance can be found on pages 28 and 29.
Responsible sourcing
Targets Progress Status
Roll-out our sustainability questions to national
partnersuppliers
We rolled-out the questionnaire to Group suppliers during 2021 and will be reviewing the results
in early 2022.
Launch new digital tender system for Group suppliers
and integrate sustainability compliance into the
tenderprocess
Group suppliers are required to confirm compliance with our standards via our digital tender system,
including in relation to employment standards, modern slavery and the real living wage. Further
requirements on climate change and waste will be added during 2022.
Increase the proportion of homes built using timber
frame to 20%
We are working towards reaching 20% usage of timber frame and increasing consistency of use
across our regions.
People and skills
Targets Progress Status
Launch our updated Equality, Diversity and Inclusion
policy, Maternity, Paternity and Adoption Leave policy,
and first Menopause policy
We published our updated Equality, Diversity and Inclusion policy, Maternity and Adoption
Leavepolicy, and first Menopause policy during 2021, and made a policy summary available to
allemployees explaining the changes.
Introduce reverse mentoring with LGBTQ+ colleagues,
following successful pilot with black, Asian and minority
ethnic employees in 2020
We ran reverse mentoring for 10 senior leaders in 2021 who were partnered with colleagues who
are black, Asian or from another ethnic minority and/or who identify as LGBTQ+.
Launch our updated Wellbeing Policy We launched our Wellbeing Policy which sets out our commitment and the support we offer to create
a workplace where health and wellbeing concerns are addressed in an open and supportive way.
Roll-out respectful workplace training to site
management teams to ensure every site provides
aninclusive work environment
We trialled our training in two business units and received positive feedback from colleagues. We
willextend the training to nine further business units in 2022.
Charitable giving
Targets Progress Status
Hold our Taylor Wimpey Challenge and participate in
the Housebuilders Challenge event
2021 saw 169 participants take part in the Taylor Wimpey Challenge raising over £103k of which
£75k was donated to the Youth Adventure Trust and over £28k to other charities. We also entered
15 teams for the Youth Adventure Trust Housebuilder Challenge event raising over £47k.
Continue to support St Mungo’s Construction Skills
programme with a focus on helping people progress
from training and into work
Our donation of £132k in 2021 directly supported two Construction Skills Tutors working in the St
Mungo’s Construction Skills Training Centres in Brent and Camden. The centres help people
recovering from homelessness to gain new skills and qualifications, build their confidence and find
employment in the construction industry.
Run a graduate challenge to raise money for the
Prince’s Trust
Our graduates entered the Prince’s Trust ‘Million Makers’ challenge to raise money to support
vulnerable young people. They raised over £27k through two initiatives.
33Taylor Wimpey plc Annual Report 2021
Our stakeholder groups
Key material issues forthese
stakeholders How we engage
Engagement performance
metrics and highlights in 2021 Priorities for 2022
Our customers
Sustainable homes
and communities
Environment
Health, safety and wellbeing
Customer service and quality
Land, planning and
community engagement
– We engage directly with customers at our developments,
via our customer portal (Touchpoint), through emails, letters and
meetings and through social media.
– We monitor customer views through focus groups, satisfaction
surveys, Trustpilot reviews and post-occupancy research.
– Our website is updated with relevant information.
– The Chief Executive wrote to all customers to update on
our approach to restrictions throughout the pandemic.
– 5-star housebuilder as measured by NHBC ‘would you recommend’ score.
– Received positive feedback from customer research, interviewing
prospective home buyers on our new house type range.
– Introducing a Customer Director role which sits on the regional
businesses’ management team.
– During 2021, the Competition and Markets Authority’s investigation
into the historical sale of leasehold properties with doubling ground
rentclauses by the Company was closed, following the agreement
of voluntary undertakings.
– We are aligning our processes to make sure we meet the
expectations and timescales being set by the Ombudsman
which will be introduced in 2022.
– Test concept designs for our standard apartment range.
– Maintain high levels of customer service and a score of
over 90% in the HBF 8-week survey which equates to
a 5-star rating.
– Continue to work on implementing our environment strategy
and developing even more energy-efficient homes.
Our employees
People and skills
Customer service and quality
Health, safety and wellbeing
– We engage with our employees and gather feedback through
meetings, appraisals, focus groups, employee surveys, our internal
magazine and newsletter, Company wide emails, and our national
andregional employee forums.
– We encourage employees to share feedback and this can be sent
to the Chief Executive via email.
– A member of the Board is an Employee Champion. They attend
National Employee Forummeetings and are responsible for
championing the employee voice in the boardroom and strengthening
the link between the Board and employees.
– We engage with employees on the financial performance of the
Company via employee emails following the release of the Company's
trading updates, full year and half year results.
– Completed a Talkback employee survey in 2021 captured views from
66% of employees. It showed an overall engagement score of 91%
with 95% of employees being proud to work for Taylor Wimpey. Higher
scoring areas included health and safety, diversity and inclusion, and
our vision and strategy.
– Our technical academies cover production, sales and customer service,
providing structured career and skills development, which often enable
employees to gain a formal qualification. We also run online masterclass
sessions for employees to hear from internal and external experts.
– We ran on-site training academies for apprentices at two of our sites.
– We have increased several elements of our benefits provision that are
important to our employees, including the introduction of new incentive
arrangements, enhancements to our Maternity Policy, our wellbeing
provisions, and other benefits that assist our employees financially.
– Continue to build a diverse and inclusive culture.
– During 2022, we will be exploring how we can increase
flexibility for on-site roles including Site Manager positions.
– Extend our Respectful Workplace training to site and office
management teams to ensure every location in which we
work provides an inclusive environment. In 2022 we will
extend our programme across nine further business units.
– In 2022, the Employee Champion will hold in person
conversations with small groups of junior to mid-level
employees in each Division, including those from the
regional offices, sites and sales centres, to listen to their
views, outside of the NEF and without senior management
being present, to further encourage openness.
– Further limit the CO
2
impact of our car fleet.
Our partners
Charitable giving
Environment
Responsible sourcing
Health, safety and wellbeing
Sustainable homes
andcommunities
Land, planning and
community engagement
– We engage with our subcontractors and suppliers on a wide range
ofmatters and initiatives through meetings, workshops, working
groups,engagement sessions and our membership of the Supply Chain
Sustainability School (SCSS).
– The Chief Executive wrote to suppliers to update on our approach to
restrictions and offer support during the pandemic.
– Our engagement with our local and national charity partners is overseen
by our Charity Committee.
– We engage with local authorities, parish councils, Homes England, the
Greater London Authority, the Department for Levelling Up, Housing
and Communities and other public sector organisations to understand
their priorities and share our views. We engage directly and through our
membership of industry organisations such as the Home Builders
Federation and the British Property Federation.
– In 2021, we asked Group suppliers to complete a questionnaire
covering policies, processes and performance on modern slavery,
climate change, product embodied carbon, waste, packaging,
environmental management systems and governance. The responses
will help us identify gaps, establish a baseline and work with suppliers
to improve performance.
– We fully support the HBF's recent additional proposal to address fire
safety improvement works, and are working closely with Government
through the HBF to facilitate an equitable solution involving all industry
stakeholders. We continue to believe this is an industry wide issue which
needs an industry solution.
– 2021 saw 169 participants take part in the Taylor Wimpey Challenge
raising over £103k of which over £75k was donated to the Youth
Adventure Trust and over £28k to other charities.
– During 2022, we will be begin setting improvement targets for
categories of suppliers in areas such as embodied carbon and
waste as part of our work to prepare for the Future Homes
Standard and to reduce our scope 3 carbon footprint.
– Continue to work with the SCSS, an industry collaboration,
to help engage our suppliers on sustainability.
– Add further requirements on climate change and waste for
Group suppliers to comply with via our digital tender system.
– Entered in to a new three-year commitment with St Mungo’s
to support their Construction Skills Programme.
Our investors
Environment
Customer service and quality
People and skills
Health, safety and wellbeing
Sustainable homes
andcommunities
Governance and management
– We engage with investors throughout the year through results
presentations, meetings, roadshows, conferences, telephone
and videocalls.
– We engage via our regulatory reporting including the Annual Report
andAccounts, our full year results, half year results, trading updates
and our Annual General Meeting.
– When possible, we conduct visits to our sites and we participate
in benchmarks and disclosure initiatives.
– As a results of the ongoing global pandemic, investor communicators
continue to use technology.
– Held virtual roadshows in the year with our investors.
– Chairman engaged with large investors via virtual meetings following
succession announcements.
– Attended virtual conferences in the year.
– Continued to hold ad hoc virtual meetings with investors throughout
the year.
– Held virtual results presentations.
– Continue to engage with investors regularly.
– Maximise investor engagement using learnings from
COVID-19 such as engagement using technology to
integrate with existing methods.
– Our primary performance focus is on returning the business
to 21-22% operating margin and we continue to target a
number of areas to achieve this; focused on cost, process
simplification and standardisation enhancing the core drivers
of value for our business.
Our communities
Environment
Charitable giving
Health, safety and wellbeing
Sustainable homes
andcommunities
Responsible sourcing
– We engage with local communities at every site, from planning
andthroughout construction, including through meetings,
exhibitions,workshops, newsletters, information boards, social
mediaand our website.
– We collaborate with non-governmental organisations (NGOs),
academia and expert organisations to learn from their insights.
– Our Community Communications Plan guides teams on actions
theycan take throughout the development process to help foster
asense of community among new residents.
– Due to the pandemic, most consultations took place online during 2021
and we used social media, online exhibitions and virtual forums to ensure
abroad section of the community could participate.
– Contributed £418 million to local communities via planning obligations
(2020:287 million), to fund a range of infrastructure and facilities including:
affordable housing; green spaces; community, commercial and leisure
facilities; transport infrastructure; heritage buildings; and public art.
– We aim to install infrastructure at an early stage of the build process to
help the new community become established quickly.
– In 2021 we ran our fourth internal placemaking competition adding a
newCommendation for a best approach to Landscape and Biodiversity,
shortlisted by our sustainability team.
– Launch home welcome nature packs for customers
during2022.
– Continue to engage local communities early in the process.
– Utilise our Community Communications Plan to help foster
asense of community among new residents.
– Update our guidance on nature and green space including
our Green Infrastructure Guide.
– Continue to focus on strong placemaking.
Stakeholder performance and priorities
34 Taylor Wimpey plc Annual Report 2021
Strategic report
Stakeholder engagement
Our stakeholder groups
Key material issues forthese
stakeholders How we engage
Engagement performance
metrics and highlights in 2021 Priorities for 2022
Our customers
Sustainable homes
and communities
Environment
Health, safety and wellbeing
Customer service and quality
Land, planning and
community engagement
– We engage directly with customers at our developments,
via our customer portal (Touchpoint), through emails, letters and
meetings and through social media.
– We monitor customer views through focus groups, satisfaction
surveys, Trustpilot reviews and post-occupancy research.
– Our website is updated with relevant information.
– The Chief Executive wrote to all customers to update on
our approach to restrictions throughout the pandemic.
– 5-star housebuilder as measured by NHBC ‘would you recommend’ score.
– Received positive feedback from customer research, interviewing
prospective home buyers on our new house type range.
– Introducing a Customer Director role which sits on the regional
businesses’ management team.
– During 2021, the Competition and Markets Authority’s investigation
into the historical sale of leasehold properties with doubling ground
rentclauses by the Company was closed, following the agreement
of voluntary undertakings.
– We are aligning our processes to make sure we meet the
expectations and timescales being set by the Ombudsman
which will be introduced in 2022.
– Test concept designs for our standard apartment range.
– Maintain high levels of customer service and a score of
over 90% in the HBF 8-week survey which equates to
a 5-star rating.
– Continue to work on implementing our environment strategy
and developing even more energy-efficient homes.
Our employees
People and skills
Customer service and quality
Health, safety and wellbeing
– We engage with our employees and gather feedback through
meetings, appraisals, focus groups, employee surveys, our internal
magazine and newsletter, Company wide emails, and our national
andregional employee forums.
– We encourage employees to share feedback and this can be sent
to the Chief Executive via email.
– A member of the Board is an Employee Champion. They attend
National Employee Forummeetings and are responsible for
championing the employee voice in the boardroom and strengthening
the link between the Board and employees.
– We engage with employees on the financial performance of the
Company via employee emails following the release of the Company's
trading updates, full year and half year results.
– Completed a Talkback employee survey in 2021 captured views from
66% of employees. It showed an overall engagement score of 91%
with 95% of employees being proud to work for Taylor Wimpey. Higher
scoring areas included health and safety, diversity and inclusion, and
our vision and strategy.
– Our technical academies cover production, sales and customer service,
providing structured career and skills development, which often enable
employees to gain a formal qualification. We also run online masterclass
sessions for employees to hear from internal and external experts.
– We ran on-site training academies for apprentices at two of our sites.
– We have increased several elements of our benefits provision that are
important to our employees, including the introduction of new incentive
arrangements, enhancements to our Maternity Policy, our wellbeing
provisions, and other benefits that assist our employees financially.
– Continue to build a diverse and inclusive culture.
– During 2022, we will be exploring how we can increase
flexibility for on-site roles including Site Manager positions.
– Extend our Respectful Workplace training to site and office
management teams to ensure every location in which we
work provides an inclusive environment. In 2022 we will
extend our programme across nine further business units.
– In 2022, the Employee Champion will hold in person
conversations with small groups of junior to mid-level
employees in each Division, including those from the
regional offices, sites and sales centres, to listen to their
views, outside of the NEF and without senior management
being present, to further encourage openness.
– Further limit the CO
2
impact of our car fleet.
Our partners
Charitable giving
Environment
Responsible sourcing
Health, safety and wellbeing
Sustainable homes
andcommunities
Land, planning and
community engagement
– We engage with our subcontractors and suppliers on a wide range
ofmatters and initiatives through meetings, workshops, working
groups,engagement sessions and our membership of the Supply Chain
Sustainability School (SCSS).
– The Chief Executive wrote to suppliers to update on our approach to
restrictions and offer support during the pandemic.
– Our engagement with our local and national charity partners is overseen
by our Charity Committee.
– We engage with local authorities, parish councils, Homes England, the
Greater London Authority, the Department for Levelling Up, Housing
and Communities and other public sector organisations to understand
their priorities and share our views. We engage directly and through our
membership of industry organisations such as the Home Builders
Federation and the British Property Federation.
– In 2021, we asked Group suppliers to complete a questionnaire
covering policies, processes and performance on modern slavery,
climate change, product embodied carbon, waste, packaging,
environmental management systems and governance. The responses
will help us identify gaps, establish a baseline and work with suppliers
to improve performance.
– We fully support the HBF's recent additional proposal to address fire
safety improvement works, and are working closely with Government
through the HBF to facilitate an equitable solution involving all industry
stakeholders. We continue to believe this is an industry wide issue which
needs an industry solution.
– 2021 saw 169 participants take part in the Taylor Wimpey Challenge
raising over £103k of which over £75k was donated to the Youth
Adventure Trust and over £28k to other charities.
– During 2022, we will be begin setting improvement targets for
categories of suppliers in areas such as embodied carbon and
waste as part of our work to prepare for the Future Homes
Standard and to reduce our scope 3 carbon footprint.
– Continue to work with the SCSS, an industry collaboration,
to help engage our suppliers on sustainability.
– Add further requirements on climate change and waste for
Group suppliers to comply with via our digital tender system.
– Entered in to a new three-year commitment with St Mungo’s
to support their Construction Skills Programme.
Our investors
Environment
Customer service and quality
People and skills
Health, safety and wellbeing
Sustainable homes
andcommunities
Governance and management
– We engage with investors throughout the year through results
presentations, meetings, roadshows, conferences, telephone
and videocalls.
– We engage via our regulatory reporting including the Annual Report
andAccounts, our full year results, half year results, trading updates
and our Annual General Meeting.
– When possible, we conduct visits to our sites and we participate
in benchmarks and disclosure initiatives.
– As a results of the ongoing global pandemic, investor communicators
continue to use technology.
– Held virtual roadshows in the year with our investors.
– Chairman engaged with large investors via virtual meetings following
succession announcements.
– Attended virtual conferences in the year.
– Continued to hold ad hoc virtual meetings with investors throughout
the year.
– Held virtual results presentations.
– Continue to engage with investors regularly.
– Maximise investor engagement using learnings from
COVID-19 such as engagement using technology to
integrate with existing methods.
– Our primary performance focus is on returning the business
to 21-22% operating margin and we continue to target a
number of areas to achieve this; focused on cost, process
simplification and standardisation enhancing the core drivers
of value for our business.
Our communities
Environment
Charitable giving
Health, safety and wellbeing
Sustainable homes
andcommunities
Responsible sourcing
– We engage with local communities at every site, from planning
andthroughout construction, including through meetings,
exhibitions,workshops, newsletters, information boards, social
mediaand our website.
– We collaborate with non-governmental organisations (NGOs),
academia and expert organisations to learn from their insights.
– Our Community Communications Plan guides teams on actions
theycan take throughout the development process to help foster
asense of community among new residents.
– Due to the pandemic, most consultations took place online during 2021
and we used social media, online exhibitions and virtual forums to ensure
abroad section of the community could participate.
– Contributed £418 million to local communities via planning obligations
(2020:287 million), to fund a range of infrastructure and facilities including:
affordable housing; green spaces; community, commercial and leisure
facilities; transport infrastructure; heritage buildings; and public art.
– We aim to install infrastructure at an early stage of the build process to
help the new community become established quickly.
– In 2021 we ran our fourth internal placemaking competition adding a
newCommendation for a best approach to Landscape and Biodiversity,
shortlisted by our sustainability team.
– Launch home welcome nature packs for customers
during2022.
– Continue to engage local communities early in the process.
– Utilise our Community Communications Plan to help foster
asense of community among new residents.
– Update our guidance on nature and green space including
our Green Infrastructure Guide.
– Continue to focus on strong placemaking.
Read more about stakeholder engagement
and climate change on page 49.
35Taylor Wimpey plc Annual Report 2021
How the Board considered
stakeholders during the year
Section 172 (1) Statement
Our Directors are bound by their duties
under the Companies Act 2006 (the Act) to
promote the success of the Company for the
benefit of our shareholders as a whole,
having regard to our other key stakeholders.
We believe that in order to progress our
strategy and achieve long term sustainable
success, the Board must consider all
stakeholders relevant to a decision and
satisfy themselves that any decision upholds
our culture of ‘doing the right thing’.
Our values, as set out on page 9, are key to
how we do business and are closely aligned
to the matters the Directors must consider as
part of their Section 172 duties.
The Board recognises that stakeholder
engagement is essential to understand what
matters most to our stakeholders and the
likely impact of any key decisions. We have
a long history of engaging with all of our
stakeholders and the Board continues to
highly value the feedback that this
engagement provides. Details of how we
engaged with our different groups of
stakeholders during 2021 and how this
informed what the Board considers matters to
them most can be found on pages 34 to 37.
The Board receives an update from the
Executive Directors at each Board meeting
which details any substantial engagement
since the last meeting. In addition, there are
standing agenda items at each meeting to
ensure that the Board receive relevant
updates on all of our key stakeholders; such
as the regular reports from customer service,
HR, investor relations and the Divisional
Chairs. The Board has an annual schedule of
‘teach-in’ sessions with our key Heads of
Function (such as Sales and Marketing, Land
and Planning, Customer Service, Investor
Relations, Sustainability and Supply Chain)
where they will receive in-depth updates
about each group of stakeholders. In
addition, the Board regularly engages directly
with our investors and employees, and
further information around the direct
engagement that took place in 2021 can be
found on pages 84 and 85.
The Board is aware that in some situations,
stakeholders’ interests will be conflicted and
they may have to prioritise interests. The
Board, led by the Chairman, ensures that as
part of its decision making process, the
Directors assess the impact of the decision
on our stakeholders and the likely
consequences of any decision in the long
term. The diagram below shows how the
Board approaches its decision making.
On the next page, we have set out examples
of key decisions made by the Board and
provided further details about the decision
making process.
How the Board fulfils its Section 172 duties
Setting our culture, values and strategy
The Board sets our culture and values; and these are key to how we do business
and how we achieve our purpose.
Diverse set of skills, knowledge and experience
The Directors collectively have a diverse set of skills, knowledge, experience and stakeholder
expertise which assists the Board in making decisions. This contributes to their ability to make well
informed decisions which promote our long term sustainable success.
As part of a Director’s induction, they receive a detailed briefing on their duties as a Director.
Monitoring
The Board receives regular updates on key decisions and the actions taken in respect of them.
Thisis done through regular reports submitted by Management to each Board meeting
andverbalupdates as necessary.
Board discussion and decision
As part of its discussion, the Board provides rigorous evaluation, risk management and challenge
toensure a decision promotes long term sustainable success. The Board uses the stakeholder
engagement summarised on pages 34and35 to inform their decision making process.
Board information
The Board receives detailed papers from Management which provide details on the likely long term
impact ofadecision and how stakeholders have been considered in the development of the
proposal, includinganyrelevant engagement.
The Board also has an annual schedule of ‘teach-ins’ where the functional heads of departments
deliver updates on key activities during the year which feeds into the decision making process.
36 Taylor Wimpey plc Annual Report 2021
Strategic report
Section 172 (1) statement
Fire safety improvement works
In 2021, the Board approved an additional
provision to fund fire safety improvement
works for apartments built by the Company
going back 20 years from January 2021.
Chief Executive succession
Following an extensive search and
recruitment process Jennie Daly, our Group
Operations Director, was announced as our
next Chief Executive.
Land acquisition
The Board regularly assesses significant
land acquisitions. An example of this during
2021 was the approval to acquire a piece
of land in Richmond.
Criteria considered
A, C, D, E
Criteria considered
A, B, C, D, E, F
Criteria considered
A, C, D, E, F
Relevant stakeholders
– Customers
– Partners
– Investors
– Communities
– Partners
Relevant stakeholders
– Customers
– Employees
– Investors
– Communities
– Partners
Relevant stakeholders
– Customers
– Employees
– Investors
– Communities
– Partners
Decision making process
– The health and safety of all our stakeholders is of
paramount importance and we are guided by the
principle of ‘doing the right thing’.
– It has long been the Board’s view that customers
and leaseholders should not bear the cost of
investment to ensure their buildings are safe
and mortgageable.
– The Board considered the impact this provision
would have on our shareholders and considered
that the provision was in the best long term
interests of all stakeholders.
– We have now identified all buildings that may
require fire safety improvement works and are in
active dialogue with building owners to arrange
these. We are committed to resolving these
issues as soon as possible for our customers.
– We are working closely with Government through
the HBF to facilitate an equitable solution involving
all industry stakeholders. The Board fully support
the HBF’s recent letter to the Government which
sets out proposed additional commitments from
the industry. The Board considers that this is an
industry-wide issue involving many types of
organisations and therefore needs an industry
solution. If accepted by Government, the HBF
proposal would result in an additional modest
provision for the Company.
– To further support the wider issue, the Company
will be paying The Residential Property Developer
Tax levy in 2022 which was introduced to help
contribute to the cost of cladding remediation work.
– Further information can be found on pages
38 and 39.
Decision making process
– The Chief Executive is responsible for developing,
leading and managing the execution of our
strategy, and is therefore instrumental in delivering
long term value for all of our stakeholders.
– The Nomination and Governance Committee led
the search for our new Chief Executive, supported
by a well-reputed executive search firm in order to
assess both internal and external candidates.
– The key selection criteria included in the candidate
profile required identification of an individual who
leads with purpose, boldly drives operational
performance and fosters the strong culture of the
Company. These key areas are strongly aligned to
our values and also the key criteria under Section
172 (1) of the Companies Act.
– Following a thorough recruitment and selection
process that considered a long list of industry and
non-industry candidates, along with extensive
consultation with shareholders, the Board was
delighted to announce the appointment of Jennie
Daly as Chief Executive.
– Given Jennie’s extensive sector and stakeholder
expertise, her exceptional leadership and
operational focus, the Board considers that she
is the right person to promote the long term
success of the Company for the benefit of all
our stakeholders.
Decision making process
– Our West London business unit sought approval
from the Board to acquire a brownfield
regeneration site with detailed planning
permission that would deliver 453 much needed
homes in Richmond, Greater London.
– A detailed report containing key financial
information and stakeholder considerations was
provided to the Board. The report also set out the
excellent transport links and close proximity to
public amenities.
– The Board considered that the acquisition
supported our approach to landbuying following
the 2020 equity raise and would support
outlet-led growth from 2023 as the site would
open as an outlet in late 2022, and would deliver
enhanced returns for shareholders.
– The site would deliver 173 affordable homes
in Richmond which is an affluent area where
local residents may struggle to get on the
property ladder.
– Sustainability is integrated into our developments
through our placemaking standards, energy
efficient home design and construction policies
and processes. These ensure we reduce our
impact on the environment and create
developments and homes where customers can
enjoy a good quality of life and reduce their own
impact on the environment.
– The Board approved the land acquisition as it
considered that the acquisition was in the long
term interest of all its stakeholders.
Our values
Our values Our values
Key to decision criteria
A: The likely consequences of any decision in the
long term
B: The interests of our employees
C: The need to foster our business relationships
with suppliers, customers and others
D: The impact of our operations on the community
and the environment
E: The desirability of maintaining a reputation for
high standards of business conduct
F: The need to act fairly as between members
Key to our values
Respectful and fair
Take responsibility
Better tomorrow
Be proud
37Taylor Wimpey plc Annual Report 2021
Our customer proposition
is closely tied to our purpose
and centres on delivering
great homes and thriving
communities. It is important
that our customers can trust us
to do the right thing.
Customers satisfaction
We track customer satisfaction using the
HBF 8-week and 9-month survey results.
In 2021, 92% of customers in the 8-week
survey would recommend us to a friend
(2020: 92%). This means we met our target
to maintain a 5-star rating. We continue to
believe that a wider range of customer care
and quality measures are necessary to
ensure we are delivering for our customers.
Our 9-month satisfaction scores give us
insight into how customers feel about the
homes and places we build over the longer
term. Our score for 2021 was 79.2%
(2020: 78.2%).
We encourage customers to leave reviews
on Trustpilot. At the end of 2021, with over
1,799 reviews, we had a 4 out of 5-star
rating (end of 2020: 4 out of 5) with a trust
score of 3.9 out of 5 (2020: 4 out of 5). We
acknowledge that we do not always get it
right and sometimes fall short of our targeted
standards. Where this is the case, we remain
committed to working closely with our
customers to put this right and learn from
our mistakes.
In 2021, we introduced a Customer Director
role which sits on the management team in
each regional business. This will further elevate
the voice of the customer in our regions. We
also rolled out our new customer relationship
management (CRM) system across the
business. This provides clearer data on
customer issues, complaints and defects
which will help us to further improve quality
and customer service. The results are
reviewed by Customer Directors and used to
identify any trends or recurring issues and
put measures in place to address them.
Our customers are rightly demanding more
of us. As well as rolling out new house types
designed to meet their changing needs, we
continue to provide a high standard of
training to our Sales Executives through our
own Sales Academy. Our sales staff are
further supported by our CRM system which
is now live across all regional businesses and
is delivering the expected customer service
and operating benefits.
The sector continues to face scrutiny and
pressure from social media and pressure
groups, with the potential for greater
oversight from Government through
a single New Homes Ombudsman. We are
supportive of the introduction of an
independent New Homes Ombudsman
and will endeavour to deliver both the letter
and the spirit of regulations and maintain
this same ethos in our relationships with
our customers. We are aligning our processes
to make sure we meet the expectations and
timescales being set by the Ombudsman, as
well as new consumer rights such as third
party home inspections. We have signed the
new code of conduct that supersedes the
UK Consumer Code for Home Builders.
New house type range
Our standard house types are designed to
be high-quality, energy-efficient homes that
are cost-effective and safe to build. They can
be adapted to reflect local character and
scheme design and are used for the majority
of our homes.
We have worked with architects to update
our standard house types and successfully
piloted homes in the range in 2021. These
house types will replace our existing
standard house type range. Our site designs
have incorporated the new house types from
October 2021 with the first site using new
house types to go on sale in August 2022.
The new range incorporates more open plan
living, more natural light and improved
storage, reflecting customer feedback and
the results of our research and development.
The new homes include at least one study
area with space for a desk and easy access
to broadband and electricity sockets, to
enable working from home.
Our design team has worked closely with
our central procurement team and these
new houses offer standardisation and
plotting efficiency benefits. Most of our new
house types will offer improved accessibility,
meaning they can be adapted more easily
for people with disabilities. These house
types will also more readily accommodate
the required changes as we transition to
the Future Homes Standard and we have
established a clear timeline to adapt to the
necessary changes.
Closure of the CMA process
During 2021, the Competition and Markets
Authority’s (CMA) investigation into the
historical sale of leasehold properties with
doubling ground rent clauses by the
Company was closed, following the
agreement of voluntary undertakings.
All leaseholders of Taylor Wimpey-owned
ten-year doubling ground rent leases, or
those that have already gone through
our Ground Rent Review Assistance
Scheme (GRRAS) and converted their
Taylor Wimpey-owned lease to an RPI-based
structure, will be offered the option to
convert to a fixed ground rent. The cost of
implementing the undertakings is expected
to fall within the original provision made
in 2017.
Fire safety improvement works
It has long been our view that customers and
leaseholders should not have to pay for fire
SDGs
2021 highlights
– Achieved an average quality score of4.67
compared with an industry benchmark
group average score of4.43
– Achieved a recommend score of 92%
in the HBF 8-week survey which equates
to a 5-star rating
– Successfully launched pilot of our new
house types incorporating several years
of customer insights
– Improved our 9-month customer
satisfaction survey score
– Provided for additional £125 million
funding to support fire safety improvement
works for leaseholders in TaylorWimpey
apartment buildings, including those
below 18 metres, built over the last
20 years, to ensure they meet current
RICS EWS1 guidance
2022 priorities
– Continue to target an average quality
score of above 4 across the business
– Maintain high levels of customer service
and a score of over 90% in the HBF
8-week survey which equates to a
5-star rating
– Continue to progress work on bringing
historic buildings up to current standards
– Continue to work on implementing our
environment strategy and developing even
more energy-efficient homes
– Signing the new code of conduct that
supersedes the UK Consumer Code for
Home Builders
Read more in relation to our business model
on pages 22 and 23
Read more in relation to our KPIs on pages
24 and 25
Read more in relation to our remuneration
on pages 105 to 124
Our
Customers
38 Taylor Wimpey plc Annual Report 2021
Strategic report
Stakeholders
safety remediation works to ensure their
buildings are safe and mortgageable. We
took early and proactive action, committing
significant funding to address fire safety and
cladding issues on our buildings, with total
amounts provided up to March 2021 of
£165million. Taylor Wimpey’s decision a
year ago meant that funding was in place
to bring all our affected buildings, going back
20 years from January 2021, up to current
EWS1 standard.
We have identified all Taylor Wimpey
buildings that may require works and are in
active dialogue with building owners to
undertake these and are committed to
resolving these issues as soon as possible
for our customers. From April 2022, we will
also be paying the new Residential Property
Developer Tax (which is a 4% tax on profits)
that will fund the Government’s Building
Safety Fund for buildings over 18 metres.
We are working closely with Government
through the HBF to facilitate an equitable
solution involving all industry stakeholders.
We fully support the HBF's recent letter to
the Government which sets out proposed
additional commitments from the industry in
relation to buildings over 11 metres. We
continue to believe this is an industry-wide
issue involving many types of organisations
and therefore needs an industry-wide
solution. If accepted by Government, the
HBF proposal would result in an additional
modest provision for Taylor Wimpey.
Build quality
Since the introduction of the measure, we
have led the volume housebuilders in build
quality as measured by the NHBC CQR
score, which measures build quality at key
build stages. In 2021, we scored an average
of 4.67 (2020: 4.45) from a possible score of
six, once again the highest score for a volume
housebuilder. This compares with an industry
benchmark group average score of 4.43. We
aim to improve this further by ensuring our
quality assurance processes are embedded
at every stage of build.
Our Consistent Quality Approach (CQA)
guidelines ensure our Site Managers,
subcontractors, production and customer
service teams all have a consistent
understanding of the finishing standards
we expect on all Taylor Wimpey homes.
We also publish a customer version, so
it is clearer for customers what they can
expect from us. We updated our scope
of operations for subcontractors in 2021,
which sets out our expectations for the
management and delivery of build quality.
Key product suppliers provide training to our
Site Managers, Quality Managers and trade
subcontractors on the correct installation
of their products to ensure a quality build.
Quality is incentivised from the top of the
organisation with a significant percentage
of our Executive Incentive Scheme linked to
customer service and build quality, and this
is one of our Principal Risks. We track
progress and calculate bonus payouts using
a combination of internal and independent
external measures: HBF 8-week and
9-month customer survey results; CQR
scores conducted independently by the
NHBC, and the average reportable items
which is the average number of defects
found per plot during NHBC inspections at
key stages of the build. We also integrate
customer service and quality into our all
employee bonus scheme.
Greener house
types
Our new houses are
designed to integrate the
services and equipment
required to meet changing
energy efficiency standards,
including waste water heat
recovery, flue gas heat
recovery, photovoltaic
panels, car charging points
and eventually air source
heat pumps.
Our focus on build quality
helps ensure that our
finished homes achieve the
specified energy efficiency
standards and that
ventilation systems are
installed correctly to provide
good indoor air quality.
Opportunities in green building
The way we design and build our homes
enables our customers to live a more
sustainable and resource efficient lifestyle
and there is more that can be done. During
2020 and 2021, we conducted research to
enable us to update the technical specification
for our homes in preparation for changes to
Building Regulations and the FHS.
New homes are already considerably more
energy-efficient than many older homes. The
energy savings we will secure to meet the
FHS will make our homes increasingly
attractive to customers, with lower running
costs and a greatly reduced environmental
footprint. The increasing take up of more
cost effective green mortgages offers a
potential competitive advantage for new
homes compared to older housing stock.
39Taylor Wimpey plc Annual Report 2021
Our
Employees
We want to be known as the
employer of choice in our
sector and beyond, recruiting
a diverse workforce and
offering industry-leading
development opportunities.
Health and safety
Health and safety is the number one priority
at Taylor Wimpey and we will never
compromise on this commitment to our
people and everyone who works on or visits
a Taylor Wimpey site. We embed a safety
culture through training, awareness and
visible health and safety leadership and we
work closely with our contractors and
subcontractors on this. Our Annual Injury
Incidence Rate (AIIR) was 214 in 2021 (2020:
151) and our AIIR for reportable injuries per
100,000 employees and contractors remains
well below both the HBF Home Builder
Average AIIR of 264 and Health and Safety
Executive construction industry average AIIR
of 353, but we will continue to seek to
improve this. We believe the increase in the
accident rate is due to higher than average
turnover among operatives and an increase
in production on our sites. Around 36% of
accidents are slips, trips and falls. Our AIIR
for major injuries per 100,000 employees and
contractors was 73 in 2021 (2020: 58).
Culture and people
We have a very strong culture at Taylor
Wimpey at every level of the business, with
the core principle to ‘do the right thing’. We
continue to benefit from a talented and
engaged workforce, as reflected in our 2021
employee survey with an overall employee
engagement score of over 90%, with a 66%
response rate. Health and safety was once
again our top scoring area in the survey at
97%, and 95% of employees are proud to
work for Taylor Wimpey. The employee
survey also outlined slightly lower scoring
areas which we will work to improve, such
as future development opportunities and
career progression.
We are pleased to report that Taylor Wimpey
was once again recognised in the NHBC
Pride in the Job Awards, achieving a total
of 72 Quality Awards (2020: 53), 25 Seal of
Excellence Awards (2020: 19) and three
Regional Awards in 2021 (2020: two), whilst
Lee Dewing, Site Manager at our Whitacres
development in Hambleton, Selby, was
awarded a Supreme Award.
During 2021 we directly employed, on
average, 5,271 people across the UK (2020:
5,948) and provided opportunities for, on
average, a further 11.1k operatives (2020:
12.3k) on our sites. Our voluntary employee
turnover rate is higher than normal at 19.0%
(2020: 9.4%). We believe this reflects a catch
up from a lower than normal turnover rate in
2020 as a result of the pandemic.
Skills
With a well known industry skills shortage,
we have taken a proactive approach to early
talent and direct labour. Building the skills of
our current and future workforce is essential
to address the skills shortage in our industry
and also to set up the business to deal with
future changes.
We offer a range of entry-level roles such as
apprenticeships, trainees and graduates to
encourage people into our business with
these positions making up c.9% of our
workforce (2020:14%). We support our
regional businesses to develop local links
with colleges, universities and schools and
encourage a diverse range of candidates to
consider careers in housebuilding. We
currently directly employ 743 key trades
including apprentices (2020: 1,038). The
reduction partly reflects the restructure of the
business in 2020, as well as voluntary
employee turnover. However, we remain
committed to developing future talent and to
working both internally and with the wider
sector to attract future talent into our industry.
Training and development
We focus on training and developing our
employees. Key areas of focus are
management and leadership, personal
development skills (e.g. presentation,
communication, negotiation and time
management) and technical knowledge and
capabilities. Our technical academies cover
production, sales and customer service,
providing structured career and skills
development, which often enable employees
to gain a formal qualification. We also run
online masterclass sessions for employees to
hear from internal and external experts.
We also run on-site training academies for
apprentices at two of our sites. We assess
the impact of our training and development
using metrics such as productivity, retention,
build quality and customer satisfaction
scores and sales. We have updated our
performance review process in response to
feedback from our employee survey. Shorter
term performance objectives are now set
and reviewed multiple times throughout the
year and line managers are being trained on
the new approach.
Inclusion, diversity and
gender balance
Diversity and inclusion is a key area we
want to continue to strengthen, creating a
workplace where colleagues feel championed
and supported regardless of their background,
identity, age, gender, ethnicity or disability.
We see diversity as an opportunity to truly
embrace our colleagues’ backgrounds and
perspectives which in turn helps drive the
business forward and achieve success.
However, we and the housebuilding industry,
SDGs
2021 highlights
– Continued to focus on Health and Safety
as the number one priority and on initiatives
promoting metal health and wellbeing
– Achieved over 90% engagement score
in most recent employee survey
– Accredited Living Wage Employer,
by Living Wage Foundation
– Recognised in 2021 NHBC Pride in the
Job Awards with 72 Quality Awards, 25
Seal of Excellence Awards, three Regional
Awards and the Supreme Award
– Launched our new Equality, Diversity and
Inclusion Policy and remain committed to
equality of opportunity in all of our
employment practices, policies and
procedures across the business
– Continued to run our National and Local
Employee Forums
– Continued our reverse mentoring with
ethnically diverse and LGBTQ+ colleagues
– Updated our performance review process
in response to employee feedback
2022 priorities
– Continue to prioritise Health and Safety
– Maintain a strong culture of doing the
right thing and high engagement levels
– Increase employee voice through the
continued work of Local and National
Employee Forums and employee networks
– We will set clear and measurable internal
goals to help accelerate diversity within our
business and drive accountability
– Continue to improve communication
throughout the business, led by highly
visible senior leaders during period of
leadership change
– Focus on building the skills of our current
and future workforce
– Plans for the continued development of
the Board’s Employee Champion role
Read more in relation to our business model
on pages 22 and 23
Read more in relation to our KPIs on pages
26 and 27
40 Taylor Wimpey plc Annual Report 2021
Strategic report
Stakeholders continued
can and need to do more. In 2021, we
launched our new Equality, Diversity and
Inclusion Policy and remain committed to
equality of opportunity in all of our
employment practices, policies and
procedures across the business. Our
Company-wide approach has focused on
bringing our colleagues together through
multiple diversity-focused networks, training
and events. We have significantly advanced
our leaders’ capabilities and understanding
on diversity and inclusion with programmes
like Respectful Workplace which commits
our senior leaders to multiple practical steps
and activities to help us achieve a more
inclusive and respectful culture.
We ran reverse mentoring for 10 senior
leaders in 2021 who were partnered with
BAME colleagues and / or colleagues who
identify as LGBTQ+.
We recognise that building a diverse culture
means embracing all aspects of diversity,
including race, religion, mental and physical
ability, socio-economic backgrounds,
sexuality, and more. In 2022, we will set clear
internal goals to help accelerate measurable
change and to ultimately drive accountability.
We are pleased to have increased several
elements of our benefits provision that are
important to our employees, including the
introduction of new incentive arrangements,
enhancements to our Maternity Policy, our
wellbeing provisions, and other benefits that
assist our employees financially.
In our 2022 Gender Pay Gap Report, our
median gender pay gap has narrowed, still in
favour of women and the mean pay gap also
remains small, likewise in favour of women.
More information can be found in our Gender
Pay Gap report on our website.
Employee engagement
We are proud of how committed our
employees are to the long term success
of the Company and we seek feedback and
engagement with all employees. This includes
regular email updates from the Chief Executive
as well as updates from the GMT and other
senior management. It is important that
management is accessible and visible so
in addition to regular visits to the different
businesses we operate employee forums
including the National and Local employee
forums where employee representatives
are able to feedback and ask questions of
members of the Board and other senior
management directly. The Board also has an
appointed Employee Champion to strengthen
the Board’s engagement with employees. The
Board’s Employee Champion, Gwyn Burr will
be retiring from the Taylor Wimpey Board of
Directors on 26 April 2022 and we are pleased
that Robert Noel, Senior Independent Director,
has agreed to take on this important role.
Rob joined the Taylor Wimpey Board in 2019
Employee Networks
Following a number of new and updated
policies launched in 2021, employee
networks were formed to offer further
support to our employees. These include:
– Working Parents Network to support
the launch of our updated Maternity Policy,
Paternity Policy and Adoption Policy
– Embracing the Change Network to
support our new Menopause Policy
– Race and Ethnicity Network to support
our updated Equality, Diversity &
Inclusion Policy
Networks provide a forum for colleagues to
share experiences, support each other, and
help to create a fully inclusive workplace.
Read more about our employee networks
on page 96.
and has over 30 years’ experience in the
property sector. Rob and Gwyn have been
working closely to share employee
perspectives already gathered and plans for
the continued development of the Employee
Champion role.
Employee survey
Our full employee survey in 2021 captured
views from 66% of employees. It showed an
overall engagement score of 91% with 95% of
employees being proud to work for
Taylor Wimpey. Higher scoring areas included
health and safety, diversity and inclusion, and
our vision and strategy. The survey also
showed that colleagues think we can do more
to ensure that employee views are heard across
the business consistently, to develop our line
managers to support their teams, to provide
clarity on career opportunities, to benchmark
pay and reward, and to report back on actions
taken following the survey.
Wellbeing
We support colleagues to help them maintain
good mental, physical, social and financial
health, which has been particularly important
during the pandemic. Mental health is a
significant concern for the construction
industry. We partner with mental health
charity, Mates in Mind, to deliver mental health
training for colleagues. We have over 150
Mental Health First Aiders across our business
who support managers and employees when
mental health issues arise. We use the Thrive
mental health app, which has been approved
by the NHS and provides tools and support
for employees to manage and improve mental
wellbeing. We are a signatory to the Building
Mental Health Charter. We were pleased that
93% of our employees in our latest survey
agreed that they know how to access support
for mental health and wellbeing at work.
41Taylor Wimpey plc Annual Report 2021Taylor Wimpey plc Annual Report 2021
Our
Partners
SDGs
2021 highlights
– Received a CDP Supplier Engagement
score of A for our approach to engaging
suppliers on climate change
– Nationwide Supplier Training programme
rolled out in 2021
– Donated and fundraised over £999,000 for
registered charities (2020: over £668,000).
– Became an accredited Living Wage
Employer, as set by the Living Wage
Foundation which covers people working
for us via subcontractor or supplier
service companies
– Updated our scope of operations
for subcontractors in 2021 on our
expectations for build quality
2022 priorities
– Begin setting improvement targets for
categories of suppliers in areas such as
embodied carbon and waste as part of our
work to prepare for the Future Homes
Standard and to reduce our scope 3
carbon footprint
– Work with the Supply Chain Sustainability
School (SCSS), an industry collaboration,
to help engage our suppliers
on sustainability
– Add further requirements on climate
change and waste for Group suppliers to
comply with via our digital tender system
– Entered in to a new three-year
commitment with St Mungo’s to support
their Construction Skills Programme
Read more in relation to our business model
on pages 22 and 23
Read more in relation to our KPIs on pages
26 and 27
Our partnerships are very
important tous and we take
that responsibility seriously.
We strongly believe that
thebest partnerships are fair
and mutually beneficial.
Supply chain
Collaboration brings benefits and the
potential for time and cost savings for both
Taylor Wimpey and also our suppliers. This
includes increasing efficiency by reducing
stock items and improving visibility on
programming for material demands.
We adopt a collaborative forecasting
approach with our supply chain aided by our
internal logistics function, Taylor Wimpey
Logistics (TWL). In 2021, the industry
experienced pressures on the cost and
availability of certain materials and a general
shortage of drivers for haulage. Whilst
challenging, we were able to effectively
manage these pressures, aided by our scale
and strong partner relationships and
agreements and delivered 2021 completions
in line with our expectations. Being a national
builder allowed us to direct materials
between regions to areas of acute shortages
during the year. We collaborate with our
supplier partners giving them good visibility
of our build plans and product requirements,
building trust and helping improve security of
supply. Over the past several years as part of
our Brexit preparations as well as our drive to
continuously improve Group operational
efficiency, we have worked hard to
understand our supply chain, establishing
highly detailed ‘root to tip’ knowledge
of our material and component supplies,
to help identify early and mitigate
potential bottlenecks.
Taylor Wimpey Logistics
We relocated our central logistics hub,
TWL to Peterborough last year, improving
transport links with our suppliers and the rest
of the business. TWL is central to our drive
to optimise efficiency in our procurement and
materials supply and distribution. TWL
provides a central hub for suppliers enabling
us to consolidate supplies and provide them
in build packs to our sites, on a just in time
basis. This improves visibility and site
efficiency and has certain practical
advantages such as lessening frequency of
large vehicles on smaller sites with limited
road access. As TWL consolidates supplier
deliveries, it provides a buffer against supplier
fluctuations and availability challenges and it
centrally manages new product
implementation alleviating availability gaps.
TWL has direct access to site build
programmes and scheduling of call-offs
which helps us maximise the use of standard
house type templates, again improving our
efficiency. TWL leverages commercial
relationships as a bulk purchaser and as a
single point of delivery. The division also
helps us ensure adherence to standard
specification through strictly controlled build
packs, with safety critical and cost sensitive
items also managed by TWL.
Quality and training
During 2021 we rolled out a Nationwide
Supplier Training programme focused on
on-site training, competency and site-based
audit programme for site teams, direct trades
and subcontractors. This is delivered by the
suppliers’ technical representatives
supporting ‘right first time’ build and
improving quality and consistency to provide
a better higher-quality customer experience.
We updated our scope of operations for
subcontractors in 2021, which sets out our
expectations for the management and
delivery of build quality. Key product
suppliers provide training to our Site
Managers, Quality Managers and trade
subcontractors on the correct installation of
their products to ensure a quality build. The
training means that teams understand the
installation needs of the products they are
working with and that these products will
work effectively and safely. This is followed
by an on-site audit. Subcontractors also
attend training sessions run by our quality,
site and safety teams, and by the NHBC.
Ethical sourcing
Our Supply Chain Policy explains our supplier
standards for safety, quality, ethics, human
rights and the environment. Our Supplier Code
of Conduct requires suppliers to respect
workers’ human rights and prohibits all forms
of modern slavery. It is embedded into our
Framework Agreements with Group suppliers
(those managed by our Group procurement
team). Group suppliers are required to confirm
compliance with our standards via our digital
tender system, including in relation to
employment standards, modern slavery and
the real living wage. Further requirements on
climate change and waste will be added
during 2022.
In 2021, we asked Group suppliers to
complete a questionnaire covering policies,
processes and performance on modern
slavery, climate change, product embodied
carbon, waste, packaging, environmental
management systems and governance. The
responses will help us identify gaps, establish
a baseline and work with suppliers to
improve performance. During 2022, we will
begin setting improvement targets for
categories of suppliers in areas such as
embodied carbon and waste as part of our
work to prepare for the Future Homes
Standard and to reduce our scope 3 carbon
footprint. We also work with the Supply
Chain Sustainability School (SCSS), an
industry collaboration, to help engage our
suppliers on sustainability and give them
access to training and resources.
42 Taylor Wimpey plc Annual Report 2021
Strategic report
Stakeholders continued
We have been recognised by CDP as
a Supplier Engagement Leader and
received a Supplier Engagement score of A
for our approach to engaging suppliers on
climate change.
Subcontractors
With the introduction of the Future Homes
Standard and other regulatory and technical
changes, the types of skills we need are
changing. For example, from 2025 we may
need significantly more people qualified to
install air source heat pumps but fewer
gas engineers.
Small and local suppliers
We work with many small and medium sized
(SME) businesses who provide labour, trades
and services to our construction sites. Many
of our partners are local and family-run
businesses and working with them
supportsthe local economy around our sites.
We hold regular subcontractor engagement
sessions in our regional businesses and offer
other support to help local SMEs do
business with us.
Real Living Wage
In 2021, we became an accredited Living
Wage Employer, meaning that all our directly
employed staff and all those working for us
via a subcontractor or service company are
paid at least the real living wage, as set by
the Living Wage Foundation. This is above
the statutory living wage.
Central and local government
We engage with local authorities, parish
councils, Homes England, the Greater
London Authority (GLA), Department for
Levelling Up, Housing and Communities
(DLUHC) and other public sector
organisations to understand their priorities
and share our views. We engage directly and
through our membership of industry
organisations such as the HBF and the
British Property Federation (BPF). Examples
of how we engaged with central Government
on issues relating to planning and
sustainability in 2021 are included in our
Sustainability Supplement.
Local planning authorities
We aim to work constructively with planning
authorities to agree the details of our
planning obligations for each development,
including affordable housing, local
infrastructure, and facilities. We use the
results of our community engagement to
help us develop planning proposals that are
financially viable and meet local needs. Each
planning application integrates a clear
development plan, enabling planning
St. Mungo’s
Construction
Skills Training
Hubs
St Mungo’s Construction
Skills Programme helps
people recovering from
homelessness to gain new
skills and qualifications. In
2021, we donated £132,000
to support two tutors
working in the St Mungo’s
Construction Skills Training
Centres, running training in
areas such as painting and
decorating, plumbing, lock
fitting, tilling, dry lining and
bricklaying.
In 2021 we entered in to a
new three-year commitment
with St Mungo’s to support
the establishment of a third
Construction Skills
Programme in their new
Recovery College in Leicester.
We’re donating £315,000 over
three years that will help train
around 40 clients per year.
authorities to monitor progress. Once planning
permission is granted, our technical teams
monitor compliance with planning agreements
and obligations. We also track build rates to
make sure that each scheme is being
managed efficiently and new homes are
delivered on time. This is overseen by the
Managing Director in each regional business.
As at 31 December 2021, we were building on
or due to start in the first quarter of 2022 on
97% of sites with implementable planning.
Charity partnerships
We focus on three priorities that are connected
to our business: aspiration and education in
disadvantaged areas, tackling homelessness
and local projects that have a direct link to our
regional businesses and developments. During
2021, we continued our partnership with our
national charities as well as local charity partners
across the UK albeit meetings were held virtually
this year. Our six national charities are the Youth
Adventure Trust, End Youth Homelessness,
Crisis, CRASH, St Mungo’s and Foundations
Independent Living Trust. In 2021 colleagues
raised £103,000 through the Taylor Wimpey
Challenge and our graduates entered the
Prince’s Trust ‘Million Makers’ challenge to raise
money to support vulnerable young people. In
total, during 2021, we donated and fundraised
c.£1 million for registered charities (2020:
over£668k).
43Taylor Wimpey plc Annual Report 2021
Our
Investors
2021 highlights
– Dividend of 8.58 pence per share for 2021
– Aligned our reporting with TCFD and
SASB reporting frameworks
– Included in Standard & Poor’s
Sustainability Yearbook 2021
– Implemented our new environmental
strategy
– Member of Next Generation, the
sustainability benchmark for UK
housebuilders, ranking third and receiving
a Gold Award for 2021, and an A- rating
from CPD Climate Change
– Delivered annualised savings of
c.£16 million in 2021 as a result of
organisational and cost restructure
– Made further progress towards
medium term operating profit margin
of 21-22%
– Spent over £1 billion on land and
grew balance sheet land position by
£510 million
2022 priorities
– Continue to improve operating margin
towards our 21-22% medium term target
– Bring through new outlets for volume
growth in 2023/24
– Run Future Homes Standard product
trials during 2022
– Develop our net zero transition plan
and target
– Host an investors and analyst update to
meet our new CEO
Read more in relation to our business model
on pages 22 and 23
Read more about our investment case on page 6
The combination of our
operational performance,
strong landbank and cash
position enables Taylor
Wimpey to deliver significant
and reliable future shareholder
returns.
Building momentum
We have a very clear focus and strategy.
We continue to build momentum to deliver
what we have set out through achieving the
following four priorities:
1. Operational excellence and discipline
driving an increase in operating margin
Our primary performance focus is on
delivering a 21-22% operating margin and we
continue to target a number of areas to
achieve this; focused on cost, process
simplification and standardisation enhancing
the core drivers of value for our business.
We have a strong embedded margin in the
landbank, which together with the new land
acquisitions, gives us confidence in achieving
our operating margin target.
We have embedded a disciplined cost
mindset across the business and taken a
number of proactive actions to reduce cost
and optimise financial performance. In late
2020 and into 2021 we also completed a
review and restructure of the business,
including removing a layer of senior
management.
2. Progressing recent land acquisitions
through planning to facilitate outlet
growth in late 2022 and volume growth
in 2023
We remain focused on efficiently progressing
recently acquired land through the planning
system, positioning our business to deliver
annual completions in line with our previous
guidance of between 17,000 and 18,000 in
the medium term. We are progressing the
land through the planning stages, providing
excellent momentum for growth.
3. Continue to deliver consistently great
build quality, customer service and
employee experience and identify where
we can add value
We began the investment in customer
service and increasing build quality several
years ago. Not only was this the right thing to
do for customers, but it has also set the
business up very well for upcoming changes
with the introduction of the New Homes
Ombudsman and building regulations. We
are delighted to have been confirmed as
once again leading the sector in the NHBC
CQR score and we have maintained our HBF
5-star rating.
4. Further embedding sustainability
through the business, targeting areas
where we can make the most difference
to future proof the business
Ensuring a sustainable business is in the
interests of all of our stakeholders and is at
the heart of the Board’s decision making
process. Whilst it is important to adjust to
near term market considerations, we make
our decisions in the interest of the long term
sustainability of the business. This is
particularly important in a highly regulated
and political industry.
We reaffirmed our commitment to play our
part in addressing the environmental crisis
through the launch of our ambitious
environmental strategy in early 2021. During
2021, we have clarified our ESG governance
responsibilities and processes at Board level
and identified ‘Natural resources and climate
change’ as a Principal Risk. During 2022
we will develop our net zero transition plan
and target.
Dividends and cash returns
Our aim is to continue to provide a reliable
income stream to our shareholders,
throughout the cycle, including during a
‘normal downturn’ via an ordinary cash
dividend. Taylor Wimpey is inherently a highly
cash generative business through the cycle
supported by strong operational
performance and our high quality landbank,
which allows us to operate flexibly in the land
market. We use cash generated by the
business to fund our investment in land and
work in progress to support our future
growth. As we operate in a cyclical industry,
we maintain a strong balance sheet at all
times and are comfortable with modest
gearing after adjusting for land creditors.
Given the cash generative nature of our
business we aim to provide a reliable income
stream to our shareholders, throughout the
cycle including during a ‘normal downturn,
via an ordinary cash dividend. Our Ordinary
Dividend Policy is to pay out to shareholders
approximately 7.5% of net assets, paid in
two equal instalments in May and November.
In line with the Ordinary Dividend Policy, we
will return a 2021 final dividend (of 4.44
pence per share), to be paid on 13 May
2022, subject to shareholder approval.
Our intention remains to return cash
generated by the business in excess of that
needed by the Group to fund land
investment, all working capital, taxation and
other cash requirements of the business, and
once the ordinary dividend has been met.
Following the strong performance of the
business during 2021, we are today
announcing our intention to return excess
cash of c.£150 million in 2022 through the
implementation of a share buyback
programme, with an initial tranche of c.£75
million expected to be completed by no later
than 3 June 2022.
44 Taylor Wimpey plc Annual Report 2021
Strategic report
Stakeholders continued
“Jennie has extensive experience in
the housebuilding sector and has
demonstrated exceptional
leadership and a razor-sharp
operational focus. Her strong focus
on execution, combined with her
customer and people-focused
skills, set her apart from the other
candidates we were considering.”
Irene Dorner
Chairman
CEO succession
Following the announcement in late 2021 that
Pete Redfern would bestepping down as CEO,
the Board, led by the Nomination and
GovernanceCommittee, conducted a rigorous
search and recruitment process. The Board
engaged extensively with major shareholders to
heartheir views on the succession process. On
7 February 2022, it was announced that Jennie
Daly would be appointed as the new CEO,
effective from the conclusion of the Company’s
AGM on 26 April 2022. Jennie has over 30
years’ experience in the housebuilding and land
and planning industries and is currently Group
Operations Director.
ESG credentials
We participate in several global and sectoral
benchmarks. We are a constituent of the
Dow Jones Sustainability Europe Index and
included in the S&P Sustainability Yearbook
2022. We are part of FTSE4Good, have an
AA rating from MSCI and have received an
ESG Risk Rating of Low from Sustainalytics.
We are a member of Next Generation, the
sustainability benchmark for UK
housebuilders, ranking third and receiving a
Gold Award for 2021. We disclose our
performance to CDP and received the
following scores: CDP Climate Change A-
(2020: B), CDP Water B (2020: B), and CDP
Forests B- for deforestation and forest risk
commodities (2020: B). We have been
recognised by CDP as a Supplier
Engagement Leader and received a Supplier
Engagement score of A for our approach to
engaging suppliers on climate change.
We support the Task Force on Climate-
related Financial Disclosures (TCFD), and
have enhanced our disclosure this year in line
with its recommendations. We also disclose
our performance against the criteria identified
for our sector by the Sustainability
Accounting Standards Board (SASB).
Opportunities in green building
Other the next five years there will be
significant changes to new build homes in
the UK reflecting the UK’s climate change
targets, the introduction of the Future
Homes Standard and new regulation on
overheating, electric vehicle charging and
other environmental issues. Our target is to
reduce emissions from customer homes in
use by 75% by 2030, and we are conducting
a range of research to help us meet this.
From 2025, in line with regulation, the new
homes we build will be net zero carbon
ready. The way we design and build our
homes enables our customers to live a more
sustainable and resource efficient lifestyle
and there is more that can be done. We are
conducting a range of research to prepare
for upcoming regulatory changes and to
move towards net zero ready homes.
During 2020 and 2021, we conducted
research to enable us to update the technical
specification for our homes in preparation for
changes to Building Regulations and the
Future Homes Standard (read more on
pages 18 to 21). The energy savings we will
secure to meet the Future Homes Standard
will make our homes increasingly attractive to
customers, with lower running costs and a
greatly reduced environmental footprint. The
increasing take up of more cost effective
green mortgages offers a potential
competitive advantage for new homes
compared to older housing stock.
Modern methods of construction
We are integrating more off site construction
techniques which help improve the efficiency
of build as well as the quality of key
components such as smart roofs which are
used where we build a room in the roof. Our
approach also includes increased use of
timber frame and off site components such
as spandrel panels, smart roof panelised
cassette roofs, cassette timber floors and
dormers. Other research projects include
working with industry peers on reducing
packaging and waste, air quality, and use of
recycled materials.
Timber frame
Timber frame can have a significantly lower
carbon footprint than traditional ‘brick and
block’ building techniques due to the
materials and use of off site manufacture
(OSM) techniques. Newly planted
replacement trees from sustainably managed
forests may take more carbon out of the
atmosphere than the more mature trees
used for timber frame, which in turn act as a
carbon store within buildings for the long
term. This makes it an excellent alternative to
more carbon intensive bricks and blocks.
There is evidence that OSM in factories can
generate less waste, require less transport
and logistics, and result in more airtight
components than those made on site, all
contributing to carbon efficiency. Increasing
use across our business will be one of our
focus areas in 2022. We aim to reach 20%
timber frame usage and increase consistency
of use across our regions.
45Taylor Wimpey plc Annual Report 2021
SDGs
2021 highlights
– Rolled out our new environmental
strategy and set a science-based
carbon reduction target
– Contributed £418 million to local
communities in which we build across
the UK via planning obligations (2020:
£287 million)
– Delivered 2,501 affordable homes
including joint ventures (2020: 1,904)
– Highly Commended in Sustainable
Housebuilder of the Year category at the
Housebuilder Awards
2022 priorities
– Make it easier for close to 40,000
customers to work from home and
enable more sustainable transport
choices through 36,000 EV charging
points and 3,000 additional bike stands
by the mid 2020s
– Update our Placemaking Guide and
Guide to Design and Access Statement
to reflect the latest government
guidance and best practice
– Update our guidance on nature and
green space including our Green
Infrastructure Guide
– Develop our technical specification
for net zero carbon ready homes during
2022 and 2023
Read more in relation to our business model
on pages 22 and 23
We want communities to
welcome Taylor Wimpey
to their area and recognise
the positive contribution we
can make to their existing
community, as well as trusting
us with the responsibility
of creating a new one.
Our approach
We focus on placemaking and design and
invest in affordable homes, infrastructure
and research and development to help us
create great places to live. Increasingly we
are focused on changes to our homes and
communities that enable customers to live
more sustainably.
In 2021, we contributed £418 million to the
local communities in which we build across
the UK via planning obligations (2020: £287
million). This funded a range of infrastructure
and facilities including: affordable housing;
green spaces; community, commercial and
leisure facilities; transport infrastructure;
heritage buildings; and public art. These
enhance our schemes and benefit the wider
community. We aim to install infrastructure at
an early stage of the build process to help the
new community become established quickly.
Our teams across the business get involved
in local life, organising competitions with
primary schools, and sponsoring local sports
clubs, as part of their daily working life. In
addition, we contributed over £104k to other
organisations, such as scout groups, local
football teams and various local community
causes (2020: £94k).
Housebuilding, particularly in its early stages,
can be disruptive. We are committed to
working with local people and communities.
We seek to engage, consult and work in
partnership with communities and all interested
stakeholders on each and every site, both
before we submit a planning application and
throughout the life of our developments.
Placemaking
We believe that the plan, design, layout and
delivery of our schemes can assist in creating
successful and sustainable new communities,
where our customers can enjoy a good
quality of life.
Our placemaking standards are based on
Building for a Healthy Life and aligned with
the National Design Guide and National
Model Code. Our Director of Design and
Group Urban Designer are qualified
architects and urban designers and we have
a Design Lead in each regional business and
strategic land team to champion good
design at the regional level.
We design walkable neighbourhoods where
customers can enjoy an active, healthy
lifestyle and make sustainable transport
choices. This includes layouts that integrate
paths and cycle routes that connect with
existing networks and street design that
encourages slower vehicle speeds and safer
cycling conditions. We also invest in public
and community transport, walkways and
cycle paths through our planning obligations.
In 2021, 67% of our UK completions were
within 500m of a public transport node and
86% were within 1,000m.
Affordable homes
A lack of affordable housing is one of the
biggest challenges facing people across the
UK. We can play a part in addressing this
problem by increasing the supply of new
housing and making our homes affordable to
a greater number and wider range of people.
Most of our developments include affordable
social housing (homes made available at
below market rates including social rent,
affordable rent, low-cost home ownership
and discount market sale tenures) which are
negotiated as part of planning obligations. In
2021 we delivered 2,501 affordable homes
including joint ventures (2020: 1,904), equating
to 18% of total completions (2020: 20%).
Community engagement
We build in communities for years, making
a significant impact on the area and its
people. We aim to build good relationships
with local people throughout this time by
communicating proactively and consistently.
Every one of our sites has a tailored planning
and community engagement strategy and a
clear point of contact. We use a range of
methods to inform local people about our
plans, including community consultations.
We use a range of methods to inform
local people about our plans, including our
website, meetings, exhibitions, workshops
and information boards.
We aim to reach a wide range of
stakeholders, including neighbouring
residents and property owners, potential
customers, local authorities, businesses,
schools and other groups. Due to the
pandemic, most consultations took place
online during 2021 and we used social
media, online exhibitions and virtual forums
to ensure a broad section of the community
could participate.
Our Political and Community Engagement
Toolkit helps our teams to consistently
engage a wide range of stakeholders
in the planning process. In addition, our
Community Communications Plan, guides
teams on actions they can take throughout
the development process to help foster a
sense of community among new residents.
Our
Communities
46 Taylor Wimpey plc Annual Report 2021
Strategic report
Stakeholders continued
Economic impacts
Our developments provide a boost to the
local economy, both during construction and
once new residents move in. Our Economic
Benefits Toolkit identifies and helps us
understand and communicate the social and
economic benefits our sites will generate; the
number of direct site and indirect supply
chain jobs that our developments will create
and their economic value; expected revenue
gains for local businesses; the impact of new
infrastructure and amenities; and new
revenue for local authorities, including from
council tax and business rates.
We often transform previously developed,
derelict or contaminated land into new
communities, which helps support urban
redevelopment and regeneration. Around
21% of our homes in 2021 were built on
brownfield land (2020: 25%) which includes
infill sites. All our developments, including
those on greenfield sites, are built to our
environmental standards and comply with
the UK’s environmental and planning
regulations and any additional standards
set by the local planning authority.
Engagement with nature
Integrating green spaces, nature and wildlife
into our developments makes them more
attractive places to live and can have a
positive impact on residents’ wellbeing and
customer satisfaction.
Our environment strategy targets, launched in
2021, include biodiversity net gain
requirements and go beyond regulation to
deliver priority wildlife enhancements, including
hedgehog highways, bug hotels, bird boxes
and wildlife friendly planting. New sites will
integrate our priority improvements that
encourage wildlife to make a home on
our developments.
In 2021, we worked with Hedgehog Street,
a campaign by the British Hedgehog
Preservation Society and People’s Trust for
Endangered Species to integrate hedgehog
highways across 100 new sites. We also
worked with Buglife – The Invertebrate
Conservation Trust, to install bee bricks and
bug hotels.
We’ve added user-friendly guides on
nature-friendly gardening to our website
and will launch home welcome nature packs
for customers during 2022.
Placemaking
principles in
action
Our approach to
placemaking encompasses
social, environmental and
economic sustainability
criteria. In 2021, we ran our
fourth annual Placemaking
Competition which
recognises best practice in
design and layout, based on
our placemaking principles.
This year’s overall winning
scheme was Cambourne
West Phase 1 in
Cambridgeshire. The new
West Cambourne Extension
provides new connections,
an abundance of open
space, and easily accessible
and central parks, play areas
and community facilities.
47Taylor Wimpey plc Annual Report 2021
The Group is one of the
first UK homebuilders to
set science-based targets
across our value chain,
including a 1.5 degrees
target for our operational
emissions
Climate change risks and opportunities
Climate change will affect
ourbusiness from increased
regulation to changing
stakeholder expectations
andphysical impacts such as
increased risks from flooding
and overheating. Almost
three-quarters of the UK’s
local authorities have now
declared a climate emergency
and we are increasingly
subject to additional climate-
related requirements through
the planning process.
Our purpose is to build great homes
andcreate thriving communities. Climate
change andthe biodiversity crisis are part of
our operating context – they impact our
ability toachieve our purpose and are
threatening the future of today’s young
people and generations to come.
Our environment strategy, Building a Better
World, is our response to the environmental
crisis and the physical and transition risks
posed by climate change. It sets out how we
will play our part in creating a greener, healthier
future for our customers, colleagues and
communities, with ambitious targets up to
2030. It is summarised on pages 28 and 29.
Our climate focus areas
We are focusing on the following areas in relation to climate change, seeking both to mitigate
our impact on climate change and to prepare for the future impacts of climate change on our
business, supply chain and customers. We take a science-based approach and aim to
continually review and improve performance.
Responding to the Task Force
onClimate-related Financial
Disclosures
The Task Force on Climate-related Financial
Disclosures (TCFD) is a framework for
Companies to report climate-related risks
and opportunities. In 2020, The Financial
Conduct Authority (FCA) introduced a
requirement for UK premium listed
companies to report against the TCFD
framework, for periods beginning on or after
1 January 2021.
The framework consists of four themes –
governance, risk management, strategy, and
metrics and targets, and has 11 disclosure
recommendations for reporting on the
financial impact of climate change. We
support the aims of the TCFD, disclose
consistently with its recommendations, and
aim toimprove the quality of our disclosure
yearon year.
We have made progress on aligning our
reporting to the TCFD recommendations as
set out by the FCA in Listing Rule 9.8.6 and
will further develop our approach during 2022.
Our progress against the recommendations of
TCFD can be found on page 50.
Governance for climate change
Board level: Our Board of Directors
isresponsible for oversight of our
environmental, social, governance (ESG)
initiatives and this includes climate-related
risks and opportunities. From 2022, they will
receive an ESG update twice a year, which will
include updates on progress made towards
climate change targets during theperiod. The
Chair of the Legacy, Engagement and Action
for the Future (LEAF) Committee and our
Director of Sustainability will also attend the
Board on atleast one separate occasion
during the year. Board ESG competencies are
indicated on page 79. During 2021, the
Operations
Energy-efficiency
andcarbon reductions
onourconstruction
sites,car fleet and offices,
supporting a sustainable
business culture and
business practices
Supply chain
Working with suppliers
and others to address
embodied carbon in the
materials, services and
products we use
Customer homes
Working towards
zero carbon ready
homes for customers
and supporting
sustainable lifestyles
Collaboration and
engagement
Working with
government, industry
associations, investors,
peer companies and
others to address the
climate crisis
Skills
Building our knowledge
base and ensuring our
colleagues and trade
subcontractors have
theskills needed for
thetransition to a low
carbon economy
Board reviewed and approved our
environment strategy and climate targets and
established ‘Natural resources and climate
change’ as a new Principal Risk.
Executive level: Our CEO has ultimate
responsibility for achieving our climate
targets. Sustainability (including climate
change) is a standing agenda item for GMT
meetings and members receive a monthly
update from the Director of Sustainability.
The GMT members have received briefings
on climate change risks and opportunities to
deepen their understanding of this topic.
LEAF Committee: Ingrid Osborne, Divisional
Chair for London and South East and a
member of our GMT, oversees implementation
of our climate change programme. Ingrid
chairs our LEAF committee, which is
responsible for reviewing climate strategy,
risks and opportunities. It meets four times a
year. LEAF members include the heads of our
sustainability, technical, production, customer
48 Taylor Wimpey plc Annual Report 2021
Strategic report
Task Force on Climate-related Financial Disclosures
and design functions and representatives
from our regional businesses.
The Director of Sustainability is responsible
for monitoring climate-related issues
andupdating our Climate Change and
Sustainability Risk and Opportunity Register.
He oversees our reporting and disclosures
on climate change, and the assurance of
ourclimate data and reports to our CEO.
Cross-functional working groups, including
our Environment Strategy Working Group
and our Road to Net Zero Carbon Working
Group, support effective governance of
climate change.
Operational level: The Managing Director
ineach regional business has responsibility
for achieving our climate change targets
atthe local level. They have nominated
aSustainability Sponsor within their
management team and a Sustainability
Champion to assist with implementation
anddata collection. Each regional business
receives a quarterly report on resource use
(including energy use) and from 2022 will be
set a resource use reduction target. They are
kept updated about climate-related issues
via workshops, masterclasses and briefings.
Stakeholder engagement
Our stakeholder engagement informs our
approach to climate change. This includes
customer research and collaborating
withsuppliers through the Supply Chain
Sustainability School and our procurement
processes. We work with others to tackle
industry-wide challenges including through
the HBF. During 2021, we contributed to the
development of the Future Homes Delivery
Plan and input intothe work of the Future
Homes Hub. Read more about our
stakeholder engagement on pages 34 and 35.
We participate in CDP Climate Change and
publish our submission on our website. We
received a score of A- for 2021 (2020: B). We
were also included on the Financial Times
European Climate Leaders list during 2021.
We work with the Carbon Trust on many
aspects of climate change. Since 2017, we
have held the Carbon Trust Standard for
ouroverall approach to carbon management,
including our policy, strategy and verification
of our data and processes. We are the first
homebuilder to achieve this.
Strategy
Climate change presents risks and
opportunities for our business including
those related to the transition to a lower
carbon economy and those associated with
the physical impacts of climate change. We
assess climate risks and opportunities using
short (0-2 years), medium (3-10 years) and
long term (10+ years) horizons looking at
their potential impacts on our business,
strategy and financial planning. Our
approach is informed by our materiality
assessment and climate scenario analysis.
Climate scenario analysis
Our preliminary scenario analysis process
was conducted in association with the
Carbon Trust and reviewed by our GMT
in2020.
An initial review assessed the risks
associated for the housebuilding sector
fromthree scenarios:
– Orderly transition: Global action meets
the requirements of the Paris Climate
Change agreement and global warming
is kept to well below 2 degrees celsius
and preferably to 1.5 degrees celsius,
compared to pre-industrial levels. This
included significant regulatory change, and
changes to interactions with customers,
investors and planners, and some changes
to how and what we build. However, the
physical changes to the climate are limited
and manageable.
– Climate breakdown: This is where there
is insufficient action, or a failure to act, and
global warming is significant, with heating
at about 4-6 degrees compared to
pre-industrial levels. In this scenario,
physical changes to the climate dominate.
– Disorderly transitions: This is where the
Paris goals are not met in time, but climate
breakdown is avoided. Here there is
significant regulatory change, changes to
interactions with customers, investors and
planners, and to how and what we build.
The physical changes to the climate are
significant and require future planning.
Follow up workshops looked in more detail
at a ‘disorderly transition’ scenario which
was considered the most likely scenario.
Theresults of this analysis and other risk
assessment are presented in the risks and
opportunities table. Further scenario analysis
will be undertaken in the future.
Governance
Board of Directors
Group Management Team
Cross-Functional Working Groups
Environment Strategy Working Group
Road to Net Zero Carbon
WorkingGroup
Waste and Resources
WorkingGroup
Review and approve climate strategy, scrutinise performance, review progress on climate strategy and targets
Oversight of the business response to climate risks and opportunities
Managing Directors
(operational implementation)
Drive implementation at local level
LEAF Committee
(functional oversight)
Analyse climate risk and
opportunities and develop
thebusiness response,
monitor progress
49Taylor Wimpey plc Annual Report 2021
TCFD recommendation Progress to date Next steps
Governance
Disclose the
organisation’s
governance around
climate-related
risks and
opportunities.
Describe the Board’s oversight
of climate-related risks and
opportunities.
We have established and disclosed
responsibility for climate risks at Board
level. The Board has conducted an
ESG mapping exercise to ensure that
all ESG matters are considered by the
Board or one of its Committees.
During 2022, the Board will be further
developing its oversight of our ESG
priorities and determining how ESG
progress can be assessed more
consistently.
Describe management’s role
inassessing and managing climate-
related risks and opportunities.
We have established and disclosed
responsibility for climate risks at
Executive, Director and operational
level.
Climate change has been added as
a Principal Risk within ‘Natural
resources and climatechange’.
An environmental measure has been
included in the Executive Directors’
annual bonus plan and the intention
is to introduce an environmental
measure in the wider annual bonus
scheme for 2023 performance. See
page 107.
Strategy
Disclose the actual
and potential
impacts of
climate-related
risks and
opportunities on
the organisation’s
businesses,
strategy, and
financial
planning where
such information
is material.
Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
The table on pages 52 and 53
includes an initial assessment of the
possible impact of climate risks and
opportunities on the business over the
short, medium and long term.
Further scenario analysis is planned
to deepen our understanding of
climate risk.
Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy,
and financial planning.
We have used the findings of our
scenario analysis to enhance our
understanding of the impact of climate
risks on financial planning and business
strategy, see pages 52 and 53.
As part of future scenario analysis
exercises we will be further exploring
and aiming to quantify the potential
impacts of climate change on the
business, strategy and financial
planning.
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
We have conducted our first scenario
analysis focusing on a disorderly
transition scenario.
Further scenario analysis is planned
to deepen our understanding of
climate risk.
Risk
management
Disclose how the
organisation
identifies, assesses,
and manages
climate-related
risks.
Describe the organisation’s processes
for identifying and assessing climate-
related risks.
This process is outlined in Risk
management on pages 59 and 60
and in Principal Risks on page 65.
We have linked our climate targets
to the risks and opportunities as set
out by TCFD, on page 54.
Our planned further climate scenario
analysis will consider the potential
financial impacts of climate risks.
Describe the organisation’s processes
for managing climate-related risks.
This process is outlined in Risk
Management on pages 59 and 60 and
in the section on Principal Risks on
page 65. We have linked our climate
targets to the risks and opportunities
as set out by TCFD, on page 54.
During 2022 we will be updating our
policies and processes to reflect
climate change mitigation and
adaptation risks and opportunities.
Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated
into the organisation’s overall risk
management.
Climate change is fully integrated
intoour top down and bottom up risk
management process and during
2021 has been added as a Principal
Risk within ‘Natural resources and
climatechange’.
The newly established Principal Risk
will be monitored by the Audit
Committee and senior management,
assessing its impact on the Group’s
strategic objectives and ensuring
appropriate mitigations are in place.
Metrics and
targets
Disclose the
metrics and targets
used to assess and
manage relevant
climate-related
risks and
opportunities where
such information
is material.
Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management
process.
We publish a range of performance
data to support our environment
strategy, see pages 28 and 29.
We will continue to keep our climate
reporting under review andto develop
additional metrics where needed to
support disclosure to investors and
otherstakeholders.
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
We disclose greenhouse gas
emissions data for scopes
1, 2 and 3 on page 55.
We are committed to continuous
improvement in our data processes
and data quality.
Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets.
Our ambitious science-based carbon
reduction target has been approved
by the Science Based Targets initiative
(SBTi), see pages 28 and 29.
During 2022 we will be developing our
net zero transition plan andtarget.
Implementing the TCFD recommendations - progress to date
50
Taylor Wimpey plc Annual Report 2021
Strategic report
Task Force on Climate-related Financial Disclosures continued
Impact on financial statements
Reported balance sheet, income statement
andcash flow
We include known costs associated with
regulation designed to affect the impact of
climate change (e.g. building regulations
PartL (conservation of fuel and power) and
Part F (ventilation)) within the assessment
ofthe value of inventory charged to cost
ofsales. Where a forecast site margin is
affected by a change in estimated costs to
complete, the impact is recognised across
allplots completed on that site in the current
and future years.
The carrying value of work in progress and
land is assessed via a net realisable value
exercise and any adjustments required are
made within the financial statements.
Specifically, relating to land and the possible
impact from climate change, the Group uses
the latest environmental reports to assess
the impact from flooding on the viability of
the land.
The Group does not have intangible assets,
such as goodwill, that require an annual
impairment assessment and thus the impact
of climate change on the future cash flows
required to perform this assessment are
notrequired.
Going concern and viability
‘Natural resources and climate change’ have
been added as a Principal Risk following a
review of the Group’s Principal Risks, and
are therefore considered as part of the going
concern and viability assessment. Given the
timeframe over which both are considered
(12 months and five years respectively) the
future impact of climate change on the
operating costs of the business and its
supply chain, beyond those known costs
already included within the Group’s
forecasts, are not considered material.
In addition, the Group’s viability assessment
considers a reduction in volumes which,
although not explicitly linked, could come
about through tighter planning requirements
in response to addressing the impact of
climate change or through the reduced
availability or increased cost of materials
dueto restrictions in the supply chain due
toclimate change.
Risk management
The Board has overall responsibility for risk
management and our approach to risk
combines a top-down and bottom-up
review. The assessment, mitigation and
monitoring of sustainability and climate-
related risks is included as part of our overall
risk management process, the outcomes of
which are formally reported once a year and
reviewed at two other times during the year.
As part of this process, the individual
sustainability and climate-related risks are
considered through functional and business
unit risk registers, our climate change and
sustainability risk and opportunity register
and on a regular basis by senior
management, assessing the impact they
may have on the Group’s strategy, looking
atshort, medium and in particular longer
term emerging risks which may arise as the
area continues to evolve. The Group’s new
Principal Risk ‘Natural resources andclimate
change’ (see page 65), recognises
theincreasing significance a transition to
alow carbon economy has on both our
operations and the world in which we live
and conduct business.
Transition to net zero carbon
We were one of the first UK developers to
set Science Based Targets across our value
chain, including a 1.5 degrees target for
operational emissions. This is our first step
on the road to net zero carbon.
During 2022 we will develop our net zero
transition plan and net zero target. This will
reduce regulatory, policy, taxation and
stakeholder climate risks by aligning us with
the UK’s net zero commitment.
We are reviewing the SBTi Corporate Net
Zero Standard published in 2021 and will
use this to guide our approach. We will also
take account of the ‘Metrics, Targets, and
Transition Plans’ guidance issued by TCFD.
We expect to publish our net zero target
and plan in 2023.
Our new homes will be net zero ready from
2025 as we phase out gas boilers and
switch to all electric homes.
Our Climate Change Register guides the
climate change adaptation of our business
practices and the homes we build. For
eachclimate-related risk and opportunity
theregister identifies: risk driver, description
of risk, potential impact, time frame, whether
therisk or opportunity is direct or indirect,
likelihood and magnitude of impact.
Thisisastanding item on every LEAF
Committee agenda. The Committee makes
recommendations to the GMT on how
tomitigate, transfer, accept, or control
climate-related risks. We prioritise our
climatechange risks and opportunities
based on their materiality to our business,
measured inpercentage of profit before tax
(PBT). Apercentage of PBT greater than
20% isconsidered a major impact. A large
risk interms of likelihood is a greater than
50%chance.
51Taylor Wimpey plc Annual Report 2021
Our risks and opportunities
The table below builds on our disclosure from last year and includes an initial assessment of the possible impact of these risks
and opportunities on the business and financial statements.
Description What are the risks? What are the opportunities? Our response
Regulation, policy, taxation
Regulatory changes and updates to building regulations (e.g.
Future Homes Standard), variation in local planning
requirements (e.g. in relation to flooding and biodiversity),
expected net zero related policy changes and increases in tax
and insurance premiums.
Time frame: Short, medium and long term
Materiality: High
Risk type: Transition (policy and legal)
Opportunity type: Products, markets
Changes to how sites and homes are designed affects land values and
increasescosts.
Increased demand for new skills and products (e.g. air source heat pumps)
impacts the supply chain resulting in increased build costs and shortages
of materials, products and skills.
Direct and indirect financial impacts from increased taxation and
insurance costs.
Risk of financial penalties from non-compliance with changing regulation.
As policy requirements around heating andinsulation impact
the second hand market, new build homes will become
increasingly attractive.
Meeting regulatory requirements in a more efficient way than
our competitors makes usa better investment case.
Meeting Local Planning Authority requirements in relation to
climate change results could result in being more competitive
in land acquisitions.
We prepare for regulatory changes through our research and development.
Our R&D programme focuses on opportunities in green building (see page
39) and skills training (see page 40). Our Road to Net Zero Carbon working
group is leading our response. We conducted energy-efficiency research to
update our home specification in 2021 (see page 17).
We share our views with the Government on proposed regulatory changes
both directly and via industry organisations such as the HBF. We are
supporting the Future Homes Delivery Plan – a sector wide plan to embed
key environmental issues into home building up to 2050.
We work closely with supply chain partners and use our scale to ensure
reliable and cost appropriate access to the skills and materials we need today
and in the future (see page 42). We have been recognised by the CDP as a
Supplier Engagement Leader and received a Supplier Engagement score of
A for our approach to engaging suppliers on climate change.
We work closely with planning authorities to understand and integrate their
requirements, and with land owners to ensure that constraints are reflected in
land values.
Stakeholders
Shifts in stakeholder preference and expectations in relation to
the environment.
Time frame: Medium term
Materiality: Medium to high
Risk type: Transition (market, reputation)
Opportunity type: Products, markets
Not meeting changing customer and stakeholder expectations in relation to
climate change reduces demand for our homes and impacts our reputation.
Not meeting changing investor expectations results in reduced valuation
impacting market capitalisation and access to capital.
Reputational benefits from meeting and exceeding customer
expectations in relation to climate change and home energy
efficiency makes homes more attractive tocustomers.
Growth in green mortgages drives increased demand for new
build homes.
There may also be marketing opportunities to positively
differentiate new build homes as climate regulation impacts
the second hand homes market.
Enhanced access to capital from meeting investor
expectations and accessing new sources of green finance.
Recruitment and retention of staff.
Our environment strategy has been established to help us meet and exceed
changing stakeholder expectations, with a clear governance structure in
place. This includes targets specifically related to enabling customers to live a
more sustainable lifestyle. We regularly update our materiality assessment
(see pages 30 and 31) and integrate sustainability into customer research.
Climate change and sustainability are integrated into our marketing strategy.
We regularly engage with investors on ESG matters and participate in
a range of disclosure initiatives including CDP, TCFD, SASB and DJSI
(see page 3).
Physical impacts
Changing weather patterns and an increase in extreme
weather events.
Time frame: Medium and long term
Materiality: Medium
Risk type: Physical (acute and chronic)
Opportunity type: Resilience
Changing weather patterns and extreme weather events cause production
delays, materials shortages and increased costs, as well as increased
overheating and poor indoor air quality risks in highly insulated homes.
Increased flood risk and biodiversity concerns impact our land bank and/or
restrict future land supplies which mean that the carrying value of land may
need to be written down and land costs may increase.
Warmer, drier summers enable increasedoutput.
Integration of additional landscaping features to mitigate
flood risk and other climate concerns enhance placemaking.
We are increasing the amount of sustainability related data we collect from
suppliers and using this to develop our approach to mitigating material
supply risks.
Sustainability issues including flood risk are considered from the start of
the land buying process. We take the risk of flooding on our developments
extremely seriously and identify potential flood risk as part of our site selection
process. We do not buy land unless we can mitigate flood risk. We use the
Environment Agency’s flood mapping tools and a digital platform for
assessing and managing sustainability and technical risks associated with
land, that draws on external environmental databases. We integrate
sustainable drainage features on our sites to manage water run off and
reduce flow rates. We are developing our approach to biodiversity net gain to
enable us to manage biodiversity risks.
We will be updating our policies and processes to reflect climate change
mitigation and adaptation risks and opportunities during 2022 which will help
us respond to physical climate risks.
Technology
Increased use of technology including lower carbon
technology and materials, off-site manufacturing, adaptation
technologies.
Time frame: Short and medium term
Materiality: Low to medium
Risk type: Transition (technology, reputation)
Opportunity type: Resource efficiency, energy efficiency
Changes in home design to accommodate technology impacts
procurement and skillsstrategies.
Customers’ understanding of the use and benefit of some sustainable
solutions and technologies may be inconsistent with their performance
resulting in complaints.
Efficiency improvements and cost savings for the business
and customers.
Our R&D programme helps us to identify beneficial new technology and test
its performance to ensure it meets our quality, safety and technical standards.
Wealready integrate many lower carbon materials and off-site construction
techniques and components into our homes, and will increase this. We
prioritise customer communication with the introduction of new technology
and will be training our sales andmarketing teams to support customers.
52 Taylor Wimpey plc Annual Report 2021
Strategic report
Task Force on Climate-related Financial Disclosures continued
Description What are the risks? What are the opportunities? Our response
Regulation, policy, taxation
Regulatory changes and updates to building regulations (e.g.
Future Homes Standard), variation in local planning
requirements (e.g. in relation to flooding and biodiversity),
expected net zero related policy changes and increases in tax
and insurance premiums.
Time frame: Short, medium and long term
Materiality: High
Risk type: Transition (policy and legal)
Opportunity type: Products, markets
Changes to how sites and homes are designed affects land values and
increasescosts.
Increased demand for new skills and products (e.g. air source heat pumps)
impacts the supply chain resulting in increased build costs and shortages
of materials, products and skills.
Direct and indirect financial impacts from increased taxation and
insurance costs.
Risk of financial penalties from non-compliance with changing regulation.
As policy requirements around heating andinsulation impact
the second hand market, new build homes will become
increasingly attractive.
Meeting regulatory requirements in a more efficient way than
our competitors makes usa better investment case.
Meeting Local Planning Authority requirements in relation to
climate change results could result in being more competitive
in land acquisitions.
We prepare for regulatory changes through our research and development.
Our R&D programme focuses on opportunities in green building (see page
39) and skills training (see page 40). Our Road to Net Zero Carbon working
group is leading our response. We conducted energy-efficiency research to
update our home specification in 2021 (see page 17).
We share our views with the Government on proposed regulatory changes
both directly and via industry organisations such as the HBF. We are
supporting the Future Homes Delivery Plan – a sector wide plan to embed
key environmental issues into home building up to 2050.
We work closely with supply chain partners and use our scale to ensure
reliable and cost appropriate access to the skills and materials we need today
and in the future (see page 42). We have been recognised by the CDP as a
Supplier Engagement Leader and received a Supplier Engagement score of
A for our approach to engaging suppliers on climate change.
We work closely with planning authorities to understand and integrate their
requirements, and with land owners to ensure that constraints are reflected in
land values.
Stakeholders
Shifts in stakeholder preference and expectations in relation to
the environment.
Time frame: Medium term
Materiality: Medium to high
Risk type: Transition (market, reputation)
Opportunity type: Products, markets
Not meeting changing customer and stakeholder expectations in relation to
climate change reduces demand for our homes and impacts our reputation.
Not meeting changing investor expectations results in reduced valuation
impacting market capitalisation and access to capital.
Reputational benefits from meeting and exceeding customer
expectations in relation to climate change and home energy
efficiency makes homes more attractive tocustomers.
Growth in green mortgages drives increased demand for new
build homes.
There may also be marketing opportunities to positively
differentiate new build homes as climate regulation impacts
the second hand homes market.
Enhanced access to capital from meeting investor
expectations and accessing new sources of green finance.
Recruitment and retention of staff.
Our environment strategy has been established to help us meet and exceed
changing stakeholder expectations, with a clear governance structure in
place. This includes targets specifically related to enabling customers to live a
more sustainable lifestyle. We regularly update our materiality assessment
(see pages 30 and 31) and integrate sustainability into customer research.
Climate change and sustainability are integrated into our marketing strategy.
We regularly engage with investors on ESG matters and participate in
a range of disclosure initiatives including CDP, TCFD, SASB and DJSI
(see page 3).
Physical impacts
Changing weather patterns and an increase in extreme
weather events.
Time frame: Medium and long term
Materiality: Medium
Risk type: Physical (acute and chronic)
Opportunity type: Resilience
Changing weather patterns and extreme weather events cause production
delays, materials shortages and increased costs, as well as increased
overheating and poor indoor air quality risks in highly insulated homes.
Increased flood risk and biodiversity concerns impact our land bank and/or
restrict future land supplies which mean that the carrying value of land may
need to be written down and land costs may increase.
Warmer, drier summers enable increasedoutput.
Integration of additional landscaping features to mitigate
flood risk and other climate concerns enhance placemaking.
We are increasing the amount of sustainability related data we collect from
suppliers and using this to develop our approach to mitigating material
supply risks.
Sustainability issues including flood risk are considered from the start of
the land buying process. We take the risk of flooding on our developments
extremely seriously and identify potential flood risk as part of our site selection
process. We do not buy land unless we can mitigate flood risk. We use the
Environment Agency’s flood mapping tools and a digital platform for
assessing and managing sustainability and technical risks associated with
land, that draws on external environmental databases. We integrate
sustainable drainage features on our sites to manage water run off and
reduce flow rates. We are developing our approach to biodiversity net gain to
enable us to manage biodiversity risks.
We will be updating our policies and processes to reflect climate change
mitigation and adaptation risks and opportunities during 2022 which will help
us respond to physical climate risks.
Technology
Increased use of technology including lower carbon
technology and materials, off-site manufacturing, adaptation
technologies.
Time frame: Short and medium term
Materiality: Low to medium
Risk type: Transition (technology, reputation)
Opportunity type: Resource efficiency, energy efficiency
Changes in home design to accommodate technology impacts
procurement and skillsstrategies.
Customers’ understanding of the use and benefit of some sustainable
solutions and technologies may be inconsistent with their performance
resulting in complaints.
Efficiency improvements and cost savings for the business
and customers.
Our R&D programme helps us to identify beneficial new technology and test
its performance to ensure it meets our quality, safety and technical standards.
Wealready integrate many lower carbon materials and off-site construction
techniques and components into our homes, and will increase this. We
prioritise customer communication with the introduction of new technology
and will be training our sales andmarketing teams to support customers.
53Taylor Wimpey plc Annual Report 2021
Our climate targets
Our targets on nature, waste and resource efficiency are included on pages 28 and 29.
Targets - climate Progress Link to TCFD risk
Achieve our science-based carbon
reduction target:
– Reduce operational carbon emissions
intensity by 36% by 2025 from a
2019 baseline
– Reduce carbon emissions intensity
from our supply chain and customer
homes by 24% by 2030 from a
2019baseline
Our operational emissions intensity (scope 1
and 2), has decreased by 13% against our
2019 baseline with absolute operational
emissions falling by 20% over the same period.
We are improving our data to enable us
to accurately report progress on our
scope 3 target.
– Regulation, policy, taxation
– Stakeholders
– Physical impacts
– Technology
Reduce operational energy intensity by
32% for UK building sites by 2025.
There was a 1% increase in UK energy intensity
on our 2019 baseline. We believe this is due to a
small change in the average fuel mix used.
– Regulation, policy, taxation
– Physical impacts
Purchase 100% REGO backed green
electricity for all new sites.
We purchased 100% REGO backed renewable
electricity for new sites during construction,
offices, show homes, sales areas and plots
before sale. This is around 72% of our total
electricity consumption.
– Regulation, policy, taxation
– Stakeholders
Reduce embodied carbon per home
by21% by 2030.
We are developing our measurement systems
and expect to start reporting progress on this
target next year.
– Regulation, policy, taxation
Reduce emissions from customer
homes in use by 75% by 2030.
We are developing our measurement systems
and expect to start reporting progress on this
target next year.
– Regulation, policy, taxation
– Stakeholders
– Technology
Reduce car and grey fleet emissions
by50% by 2025.
We have reduced company car fleet emissions
(excluding grey fleet) by 36.5% since 2019.
Around 43% of vehicles in our company car fleet
are now EVor hybrid (2020: 30%).
– Stakeholders
Make it easier for 40,000 customers
towork from home and enable more
sustainable transport choices through
36,000 EV charging points and
3,000additional bike stands by the
mid2020s.
We are improving our data collection process
forthis target and expect to report progress
next year.
– Physical impacts
– Technology
Update our policies and processes to
reflect the risks and opportunities from
a changing climate by 2022.
We will be working on this target during2022
and have added ‘Natural resources and climate
change’ as a new Principal Risk.
– Physical impacts
– Technology
Metrics and targets
We have established metrics and targets
toenable us to manage and mitigate our
identified climate risks and ensure we
capitalise on opportunities relating to the
transition to a low carbon economy.
We have published a science-based carbon
reduction target which has been approved
by the Science Based Targets initiative (SBTi).
This covers emissions from our operations
(1% of total), supply chain (59% of total)
andhomes in use (40% of total). TheSBTi
has confirmed that our operational target
isconsistent with reductions required to
keep warming to 1.5°C, the most ambitious
goal of the Paris Agreement. Our scope
3goal meets the SBTi’s criteria for ambitious
value chain reductions, in line with current
best practice.
Our carbon and energy use data is externally
assured by the Carbon Trust to a limited
assurance level.
More detail on our performance in 2021 is
included in our Sustainability Supplement.
54 Taylor Wimpey plc Annual Report 2021
Strategic report
Task Force on Climate-related Financial Disclosures continued
Greenhouse gas (GHG) emissions (tonnes of CO
2
e) and energy use (MWh)
2021 2020 2019 2018 2017
Scope 1 GHG emissions – combustion of fuel tonnes CO
2
e 17,464 16,522 21,018 20,328 18,889
Scope 2 GHG emissions – market based tonnes CO
2
e 2,272 1,981 3,563 4,509 4,794
Scope 2 GHG emissions – location based tonnes CO
2
e 5,406 5,272 6,172 6,892 8,236
Total scopes 1 and 2 – market based tonnes CO
2
e 19,736 18,503 24,581 24,837 23,683
Emissions per 100sqm completed homes
(scope 1 and 2)
tonnes CO
2
e
/100sqm
1.41 1.96 1.62 1.73 1.73
Total scope 3 emissions tonnes CO
2
e 2,632,421 1,961,431 3,869,583 2,171,973 1,826,183
Purchased goods and services tonnes CO
2
e 1,413,410 1,114,587 2,242,225 2,143,976 1,797,288
Waste generated in operations tonnes CO
2
e 15,446 11,255 17,550 15,845 15,793
Business travel tonnes CO
2
e 1,464 6,593 6,303 6,405 6,812
Fuel and energy related activities tonnes CO
2
e 5,802 4,503 5,679 5,748 6,290
Downstream leased assets tonnes CO
2
e 6,592 6,178 2,656 - -
Use of sold products tonnes CO
2
e 1,107,417 754,625 1,476,066 - -
Upstream transport and distribution tonnes CO
2
e 39,891 29,815 64,827 - -
End of life treatment of sold products tonnes CO
2
e 29,210 20,105 33,242 - -
Employee commuting tonnes CO
2
e 13,189 13,771 21,034 - -
Energy use
Operational energy use (fuel and electricity
consumption from sites, offices and fleet)
MWh 104,870 96,195 116,207 111,085 105,123
Operational energy intensity (site and office fuel
andelectricity intensity – MWh / 100 sqm
completedhomes)
MWh / 100 sqm 7.5 10.2 7.6 7.7 7.7
Our carbon and energy use data is externally assured by the Carbon Trust to a limited assurance level.
Data is provided as tonnes of carbon dioxide equivalent (CO
2
e) for all operations. Scope 1 and 2 emissions are from our sites, offices, show homes and sales areas, plots
before sale and car fleet. We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) for data gathered to fulfil our requirements
underthe Mandatory Carbon Reporting (MCR) requirements, and emission factors from the Government’s GHG Conversion Factors for our corporate reporting. We use
themarket-based method of the revised version of the GHG Protocol Scope 2 Guidance for calculating our scope 2 emissions. We have also included our scope 2
emissions calculated using the location-based method.
We have reported on the emissions sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013 apart from the exclusions
noted. The reported sources fall within our Consolidated Financial Statements and are for emissions over which we have financial control. We do not have responsibility for
any emissions sources that are not included in our consolidated statement. The following sources of emissions were excluded or part-excluded from this report:
1. Fugitive emissions (refrigerant gases): excluded on the basis of expected immateriality and difficulty in acquiring data
2. Gas and electricity of part-exchange properties: excluded on the basis of immateriality due to very few completions of this type
3. Certain emissions from District Heating Schemes where we are receiving a rebate from customers prior to handover to the long term operator
4. Certain joint venture properties: where Taylor Wimpey was not part of the handover process. In these cases other homebuilders have captured MCR-related data
See our Carbon Reporting Methodology Statement at https://www.taylorwimpey.co.uk/corporate/sustainability/our-approach/climate-change-and-nature for more detail on
our calculations.
Energy data and energy efficiency measures
The energy consumption figure in the table is a Group figure. 98.74% of this total energy consumption is from the UK and offshore areas and 1.26% from Spain. 98.24% of
total scope 1 and scope 2 emissions are from the UK and offshore areas and 1.76% from Spain. During the last year, we have worked to reduce energy and emissions
through ourpurchase of green tariff electricity for our sites during construction, by publishing our Energy Dos and Don’ts Guide and running masterclass sessions for our
teams, partnering with cabin manufacturer Danzer and the Carbon Trust to design and trial new energy efficient portacabins, and through the efforts of our Sustainability
Champions including working with Site Managers to increase the use of natural ventilation methods for drying out homes and checking thermostats in show homes to
ensure heating is only used when necessary. We have successfully tested hydrotreated vegetable oil as a lower carbon alternative to diesel for plant on site and plan to
extend its use during 2022. This reporting meets the SECR (Streamlined Energy and Carbon Reporting) requirements.
Scope 3 data for 2018 and prior years includes fewer categories of emissions. It therefore cannot be directly compared with data for 2019 onwards.
55Taylor Wimpey plc Annual Report 2021
SASB index
The following table discloses our performance against
the criteria set by the Sustainability Accounting Standards
Board (SASB) Standard for the Home Builders sector.
Data relates to the period 1 January 2021-31
December 2021.
A number of the SASB criteria are not directly
applicable to the UK and in these cases we have
sought to provide equivalent data.
A note on terminology: Our sites are single pieces of
land which typically gain outline planning permission
asa single entity. They range in size from 50-3,500
homes. Outlets are sites with a sales centre. ‘Plots’
are homes prior to completion which are equivalent
to ‘lots’ (the term used in the SASB standard).
Responses do not cover our business in Spain which
accounts for less than 2% of total completions.
Code SASB criteria Our approach
Land use and ecological impacts
IF-HB-160a.1 Number of (1) lots and (2)
homes delivered on
redevelopment sites
In 2021, 21% of completions (excluding joint ventures) were on brownfield land (2020: 25%).
IF-HB-160a.2 Number of (1) lots and (2)
homes delivered in regions
with High or Extremely High
Baseline Water Stress
We estimate that around 42% of our plots are built in areas of high water stress, around 5,950 homes. No homes
are built in areas of extremely high stress. This is based on the baseline water stress map published by the World
Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct.
IF-HB-160a.3 Total amount of monetary
losses as a result of legal
proceedings associated with
environmental regulations
We received an Environment Agency notice that a small fine would be payable in relation to silt run-off due to
a burst water main after groundworks at a development of our Exeter business.
IF-HB-160a.4 Discussion of process
to integrate environmental
considerations into site
selection, site design,
and site development
and construction
Our environment strategy includes targets to reduce our environmental footprint across our value chain focusing
on climate change and energy, nature, resources and waste. Environmental factors are integrated into our
processes, including:
Landbuying: We review each potential piece of land against the Government’s National Planning Policy Framework
(NPPF), which aims to ensure that developments are economically, socially and environmentally sustainable. Our
internal processes and guidance documents help us to identify and address relevant sustainability issues for each
site. These include our Sustainable Development Checklist which helps us to assess factors such as how well
connected the site is to transport links and the potential impact on habitats and species. We use a digital platform
forassessing and managing sustainability risks at site level, called LEADR (Land and Environment Assessment of
Development Risk). It includes a pre-acquisition screening and risk assessment process for potential new sites
covering issues including remediation, flood risk, biodiversity, air quality and archaeology.
Placemaking: Our placemaking standards help our teams to plan, design and deliver schemes that promote social,
environmental and economic sustainability. They are based on best practice such as the Building for a Healthy Life
framework and cover factors such as promoting sustainable transport, connectivity with nature and resident
wellbeing. All new sites now include our priority wildlife enhancements and from 2023 new sites will include 10%
biodiversity net gain.
Construction: Our Health, Safety and Environmental Management System covers all site activities and helps us to
keep noise, dust and disturbance to a minimum, to prevent pollution incidents, reduce waste and water use and to
protect biodiversity. It requires all operational sites to carry out mandatory environmental checks and to have a Site
Specific Environmental Action Plan. All sites have individual site waste management plans.
Workforce health and safety
IF-HB-320a.1 Total recordable incident
rate (TRIR) and (2) fatality
rate for (a) direct employees
and (b) contract employees
We measure health and safety performance using an Annual Injury Incidence Rate (AIIR) metric and we report a
consolidated figure for direct employees and contractors. Our AIIR for reportable injuries per 100,000 employees and
contractors was 214 in 2021 (2020: 151). Reportable injuries are those covered by the UK’s Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations (RIDDOR). The average AIIR for our sector was 264. This is
calculated by the Home Builders Federation.
There were no fatalities.
Design for resource efficiency
IF-HB-410a.1 Number of homes that
obtained a certified
HERS
®
Index Score and
(2) average score
The Energy Performance Certificate (EPC) is a UK equivalent to the HERS Index. Properties are assessed by an
accredited assessor.
On average, our standard homes are designed to achieve an EPC rating of B. We don’t currently collate data on the
final EPC ratings for our properties so this figure is estimated based on our standard house type designs. Our homes
include: energy-efficient walls and windows; insulated loft spaces; 100% low energy light fittings and LED recessed
downlights; and energy-efficient appliances.
An increasing number of our homes include photovoltaic (PV) panels and additional energy efficiency measures such
as mechanical ventilation with heat recovery.
IF-HB-410a.2 Percentage of installed
water fixtures certified to
WaterSense
®
specifications
Our homes are designed to achieve a maximum internal water use of 120 litres per person per day and 5 litres
external use in line with Building Regulations. All our homes in England and Wales have water meters fitted, and
allhomes have low flow taps and showers, and dual flush toilets.
WaterSense is not applicable to the UK. Water efficiency is covered by Building Regulations Part G - Sanitation,
hotwater safety and water efficiency. This focuses on the expected performance of the whole home. Compliance
isassessed based on water consumption figures provided by product manufacturers including for WCs, taps,
baths,showers and appliances.
56 Taylor Wimpey plc Annual Report 2021
Strategic report
Sustainability Accounting Standards Board Disclosures
Code SASB criteria Our approach
Design for resource efficiency continued
IF-HB-410a.3 Number of homes delivered
certified to a third-party
multi-attribute green
building standard
All our homes are subject to UK building regulations which include standards for energy and water efficiency (criteria
IF-HB-410a.1 and IF-HB-410a.2). With the phasing in of the new Part L from June 2022, homes will have enhanced
fabric standards with the additional features that may include heat recovery systems and PV panels. Collectively, this
will achieve a 31% reduction in home energy use compared with our current specification. There are no current widely
used third-party multi-attribute green building standards designed specifically for homes in the UK.
IF-HB-410a.4 Description of risks and
opportunities related to
incorporating resource
efficiency into home
design, and how benefits
are communicated
to customers
Risks and opportunities relating to home energy and resource efficiency are considered as part of our climate change
risk management processes which are outlined on pages 52 and 53. Our homes integrate features to help customers
live a resource efficient lifestyle (see IF-HB-410a.1 and IF-HB-410a.2) and we are well prepared for the forthcoming
changes to Building Regulations (see IF-HB-410a.3) and the Future Homes Standard (see page 17).
We communicate the resource efficiency benefits of our new homes to potential customers, via our Sales Executives,
our website, marketing materials, ‘From House to Home’ manual, Maintenance Guide and Touchpoint Portal. This
includes the energy rating of their home and the energy savings they can expect to achieve in relation to an average
second hand home. We also include information on how customers can further reduce home energy and water use
andcreate a nature friendly garden. Our Sales Executives have been trained on how to communicate energy and
resource efficiency benefits to our customers.
Community impacts of new developments
IF-HB-410b.1 Description of how
proximity and access to
infrastructure, services,
andeconomic centers
affect site selection and
development decisions
Proximity and access to infrastructure, services, and economic centres influence site selection and development
decisions. For each scheme, we assess the current level of facilities and services to assess whether they are sufficient
to support the scale of proposed development. We aim for future residents to have convenient access to local facilities
and services via walking, cycling or public transport. Where the current level of facilities or services is not adequate, we
contribute to improving local facilities. The UK’s NPPF also requires consideration of the opportunities presented by
existing or planned investment in infrastructure.
During 2021, we contributed £418 million to local communities via planning obligations (2020: £287 million) to fund
infrastructure and facilities including affordable housing, green spaces, community and leisure facilities, transport,
educational funding, jobs for local people, heritage buildings and public art. Around 67% of our UK completions were
within 500m of a public transport node and around 86% within 1,000m.
IF-HB-410b.2 Number of (1) lots and
(2) homes delivered on
infill sites
This data is not currently collected. However, the majority of brownfield land in the UK would meet the definition of
an infill site. Brownfield land is previously developed land and most sites are served by existing physical installations
such as roads, power lines, sewer and water.
In 2021, 21% of completions (excluding joint ventures) were on brownfield land (2020: 25%).
IF-HB-410b.3 Number of homes delivered
in compact developments
and (2) average density
We believe that all our schemes meet the criteria for compact development.
Climate change adaptation
IF-HB-420a.1 Number of lots located in
100-year flood zones
We don’t currently collate this data but expect to be able to do so in future as we roll out our LEADR system for
managing environmental site risks.
We take the risk of flooding on our developments extremely seriously and identify potential flood risk as part of our
siteselection process. We use the Environment Agency’s flood mapping tools, and take account of their input during
our planning consultations. We carry out a flood risk assessment on all our sites and do not buy land unless we can
mitigate flood risk. Flood risk is controlled well in the UK through the planning process.
Flood risk is one of the factors considered in our climate change scenario analysis, see pages 52 and 53.
IF-HB-420a.2 Description of climate
change risk exposure
analysis, degree of
systematic portfolio
exposure, and strategies
for mitigating risks
Climate change risks have the potential to impact our business strategy through increased costs, reduced productivity
and reputational damage. Our approach to governance, risk management, climate strategy and scenario analysis are
outlined in detail on pages 48 to 53. Climate change is now included as a Principal Risk within ‘Natural resources and
climate change’, see page 65.
In 2021, we scored A- in our CDP Climate Change disclosure, and we are the only UK homebuilder to hold the
Carbon Trust Standard for carbon management. Our carbon reduction target has been verified by the Science Based
Targets initiative, see page 28.
Activity metrics
IF-HB-000.A Number of controlled lots As at 31 December 2021, our short term landbank stood at c.85k plots (2020: c.77k plots). Our short term landbank
is owned or controlled land with planning permission or a resolution to grant planning permission.
IF-HB-000.B Number of homes delivered Total home completions in the UK were 14,087 in 2021, including joint ventures.
IF-HB-000.C Number of active
selling communities
We traded from an average of 225 outlets in 2021 (2020: 240).
Our net private sales rate per outlet per week for the year was 0.91 (2020: 0.76).
1. The developable area of land for each site is calculated using net hectares or net acres. This means the total land area that will be developed excluding public open space
and land used for community facilities and some infrastructure.
57Taylor Wimpey plc Annual Report 2021
Non-financial information statement
Our Annual Report contains a range of non-financial information. The following table summarises where this can be found in our reporting.
Performance Overview Our policies
Our impact and related
Principal Risks
Read
more
Environmental matters
Building a better world, our
ambitious environment strategy,
including our science-based carbon
reduction target
50% reduction in direct carbon
emissions intensity since 2013
100 sites included a hedgehog
highway in2021
97% of construction waste recycled
Sustainability Policy – Our commitment to balance long term growth
with our responsibilities to the environment, society and the communities
inwhich we operate
Climate Policy – Outlines our approach to reduce greenhouse gas
emissions from our operations, supply chain and homes
Health Safety and Environmental (HSE) Policy – Outlines our ongoing
commitment to continual improvement of our HSE performance
Supply Chain Policy – Sets out our commitment to work with trusted
partners and ensure our homes are built using carefully sourced materials
Waste and Resource Use Policy – Outlines our approach to using
materials efficiently and minimising waste
More information can be foundwithin:
Building a better world
Climate change risks and
opportunities
Creating a sustainable future
Principal Risks and uncertainties
28 to 29
48 to 55
16 to 17
65
Employees
95% of employees feel proud to
work for Taylor Wimpey
96% of employees feel that they can
be their authentic self at work
50% of plc Board positions held
by women
Equality, Diversity and Inclusion policy – Outlines our commitment to
create an inclusive workplace and a workforce that reflects the diversity
of the communities in which we operate
Grievance and Harassment Policy – Ensures that any reports are
investigated and addressed appropriately
More information can be found within:
Our strategy and key performance
indicators
Stakeholders - Our employees
Corporate governance - Equality,
diversity and inclusion
Principal Risks and uncertainties
26 to 27
40 to 41
93 to 97
63
Human rights
Continue to train employees to
identify signs of modern slavery and
human trafficking for which
weoperate a zero tolerance policy
Anti-Slavery, Human Trafficking and Human Rights Policy
– Themeasures we uphold to safeguard against modern slavery
Supplier Code of Conduct – The principles that our suppliers,
contractors and business partners are required to adhere to in ensuring
human rights are respected and modern slavery is not taking place
Supply Chain Policy
More information can be found within:
Stakeholders - Our partners 42 to 43
Social matters
Contributed £418 million to
communities via our planning
obligations
In 2021, around 18% of our
completions were designated
affordable
Community Policy – Outlines our commitment to be a responsible
housebuilder, building homes and communities that enhance the local
areatomeet the needs of new and existing residents
Donations Policy – Our approach to making charitable donations and
ourpolicy not to make political donations
Charity and Community Support Policy – Our commitment to
supporting charities and local community groups in the areas we operate
More information can be foundwithin:
Stakeholder performance
and priorities
Stakeholders - Our partners
Stakeholders - Our communities
34 to 35
42 to 43
46 to 47
Anti-bribery and anti-corruption
Continue to train our employees and
raise awareness of the procedures
inplace
Strict rules in relation to recording,
giving or receiving of gifts
Anti-Corruption Policy – Our approach to combat risks of bribery,
including the key principles employees should follow
Fraud Mitigation and Response Policy – This policy formalises the
Company’s attitude to fraud and its response to instances, or allegations,
offraud against its employees or third parties
Whistleblowing Protected Disclosure Policy – Includes the
procedures tobe followed in making a disclosure of wrongdoing within the
Company or related to its business
More information canbe found within:
Corporate governance -
Boardleadership and Company
purpose
81
Business model
c.14k new homes completed for
customers in 2021
Strong short term landbank of c.85k
plots, as at 31 December 2021
Community Policy
Sustainability Policy
Customer service Policy – Our approach and commitments to provide
excellent customer service
More information canbe found within:
Creating value through
ourbusinessmodel
22 to 23
Non-financial KPIs
Achieved a recommend score of
92% in the HBF 8-week survey
which equates to a five-star rating
Our Annual Injury Incidence Rate
(AIIR) for reportable injuries per
100,000 employees and contractors
was 214 in 2021
Customer Service Policy
Health Safety and Environmental Policy
Communications and Investor Relations Policy – Sets out our
commitment to conduct clear, open and accurate communication with
allofthe Company’s stakeholder groups
Policy embedding, due diligence and outcomes
More information canbe found within:
Our strategy and key performance
indicators
Building a better world
Board leadership and
Company Purpose
Board Activities
Audit Committee Report
24 to 27
28 to 29
78 to 81
82
98 to 104
58 Taylor Wimpey plc Annual Report 2021
Strategic report
Risk management
As with any business, Taylor
Wimpey faces risks and
uncertainties in the course of
its operations. It is only by
timely identification, effective
management and monitoring
of these risks that we are able
to deliver our strategy and
strategic goals.
Governance
The Board has overall responsibility for risk
oversight, for maintaining a robust risk
management and internal control system and
for determining the Group’s appetite for
exposure to the Principal Risks to the
achievement of its strategy.
The Audit Committee supports the Board in
the management of risk and is responsible
for reviewing the effectiveness of the risk
management and internal control processes
during the year.
The Board recognises the importance of
identifying and actively monitoring our
strategic, reputational, financial and
operational risks, and other longer term
threats, trends and challenges facing
the business.
The Board takes a proactive approach to the
management of these and regularly reviews
both internal and external factors to identify
and assess the impact on the business and
in turn identify the Principal Risks that would
impact delivery of the Group strategy.
The Chief Executive is primarily responsible
for the management of the risks, with the
support of the Group Management Team
(GMT) and other senior managers located in
the business. In line with the 2018 UK
Corporate Governance Code, the Board
holds formal risk reviews, at least half yearly
and routinely considers risk at each Board
meeting as appropriate.
The formal assessment includes a robust
consideration of the Principal Risks to ensure
they remain appropriate as well as a review
of the key and emerging risks identified by
the business, their risk profile and mitigating
factors. At the Board meeting in March 2022,
the Board completed its annual assessment
of risks. This followed the Audit Committee’s
formal assessment of risk in December
2021, which was supported by a detailed
risk assessment by the GMT and their review
of the effectiveness of internal controls in
mitigating the risks. The diagram below
illustrates the internal governance process
within the Group around risk management.
Identification of risks
Our risk management and internal control
frameworks define the procedures to
manage and mitigate risks facing the
business, rather than eliminate risk altogether
and can only provide reasonable and not
absolute assurance against material
misstatement or loss.
Identifying risks is a continual process and
risk registers are maintained throughout the
Group at an individual site level, at the
business unit level and at Group-wide
functional levels. The business unit and
functional registers are reviewed twice a year
as part of our formal risk assessment
process. In determining the risk,
consideration is given to both internal and
external factors. The registers document
both the inherent risks before consideration
of any mitigations and residual risks after
consideration of effective mitigations.
A consolidated view of the risk environment,
including potential emerging risks, is
discussed, challenged and approved by the
GMT and Audit Committee before being
presented to the Board, ensuring all key risks
known to the Group are being actively
monitored and appropriate mitigations /
actions are in place to ensure each risk falls
within the tolerance set by the Board.
Board
approval
Audit Committee
review
Communication & reporting
Monitoring
GMT review of key,
principal and emerging risks
Consolidation of key risks
Functions and business units risk identification and assessment
Inputs (e.g. business change, external factors, workshops)
Risk Management Framework
Our risk management approach involves
a top-down review of risks by senior
management and the Board, combined
with a bottom-up review by each individual
function and business unit.
59Taylor Wimpey plc Annual Report 2021
Risk management
Evaluation of risks
A risk scoring matrix is used to ensure risks
are evaluated on a consistent basis. Our
matrix considers likelihood based on
probability of occurrence and impact based
on financial, reputational, customer, health
and safety, employees, environmental,
operational, legal and regulatory and IT
perspectives, to help determine those risks
that are considered to be key in delivering
our strategy. Key risks are defined as those
with a residual score equal to or greater than
12 and these are reviewed and monitored by
the Board as part of our bi-annual risk
assessment process.
Each risk is evaluated at the inherent and
residual levels, with consideration given to
the target residual risk levels based on our
risk appetite and tolerance. All identified risks
are aligned to our Principal Risks to help
validate the continuance of such or the
identification of potential new Principal Risks.
Management of risks
Ownership and management of the Principal,
key and emerging risks is assigned to
members of the GMT or senior management
as appropriate. They are responsible for
reviewing the operating effectiveness of the
internal control systems, for considering and
implementing risk mitigation plans and for the
ongoing review and monitoring of the
identified risk. This includes the monitoring
of progress against agreed KPIs as an
integral part of the business process and
core activities.
Risk appetite and tolerance
The risk appetite and tolerance levels for the
Group are set by the Board. In setting these,
the Board has considered the expectations
of its shareholders and other stakeholders
and recognises the distinction between
those risks we can actively manage, for
example around our landbank and those
against which the Group would need to be
responsive as and when they became
known, for example transitional arrangements
for changes to building regulations.
Approved risk appetite and tolerance levels
for each of our Principal Risks are detailed in
the Principal Risk tables on pages 62 to 65.
The residual risk ratings of all our Principal
Risks continue to be within their respective
established risk tolerance levels.
COVID-19
As a business, we continue to operate under
our COVID-19 working protocols, to ensure
the continued safety of our staff, customers,
suppliers and subcontractors. The risks
associated with the pandemic are reducing
as the country progresses with its
vaccination programme and lifts the
restrictions on its economy. Nevertheless,
the continuing effects of the pandemic, the
potential for future variants, and the potential
subsequent economic or operational
disruption, remain built into the assessment
of our individual risks.
Emerging risks
Emerging risks are defined as those where
the extent and implications are not yet fully
understood, with consideration given to the
potential time frame of occurrence and
velocity of impact that these could have on
the Group. As part of our risk management
process, these are monitored and reviewed
on an ongoing basis and discussed and
agreed by the Board.
Our emerging risks are grouped into the
categories listed in the table below, which
also contains some narrative description
against each category indicating example
focus areas into which the identified
emerging risks fall.
Specific risk areas other than the
Principal Risks
The Group considers other specific risk areas
recognising the increasing complexity of the
industry in which it operates, and which are
in addition to its identified Principal Risks.
Whilst we continue to recognise the risks
associated with leaving the EU and the
effects of the COVID-19 pandemic, the
Board views these potential risks as an
integral part of our Principal Risks rather than
as separate standalone risks. We continue to
monitor and mitigate the impacts on our
supply chain and labour force and the overall
economic market impacting mortgage
availability and demand.
Housing and fire safety continues to remain
high on the agendas of the Government and
the main political parties. The sector
continues to face increasing scrutiny and
pressure from social media and pressure
groups, together with greater oversight from
Government through a single New Homes
Ombudsman. We endeavour to deliver both
the letter and the spirit of regulations and
maintain this same ethos in our relationships
with our customers.
Category Example focus area
Environmental / climate Unpredictable weather patterns
Operational / build Supply chain issues related to regulation changes
Political / economic Continuing impact of COVID-19 on the economic
landscape and the potential for devolution
Technological Artificial intelligence
Social Customer demographics and preferences
Governmental Changing Government policies
60 Taylor Wimpey plc Annual Report 2021
Strategic report
Risk management continued
Our values
Strategic
pillars
Risk change
inyear
A. Government policies,
regulationsand planning
B. Mortgage availability
andhousingdemand
C. Availability and costs of
materialsand subcontractors
D. Attract and retain high-calibre
employees
E. Land availability
F. Quality and reputation
G. Health, safety and environment
H. Natural resources and climate
change (NEW)
I. Cyber security (NEW)
Principal Risks heat map
The heat map opposite illustrates the relative
inherent and residual positioning of our
Principal Risks from an impact and likelihood
perspective, including the two new Principal
Risks. Further information on our Principal
Risks is detailed in the Principal Risk tables
on pages 62 to 65.
Our Principal Risks and uncertainties
Principal Risks overview
The table opposite summarises the Group’s
Principal Risks and uncertainties, showing
how each links to our corporate values and
strategic objectives. Control of each of these
is critical to the ongoing success of the
business. As such, their management is
primarily the responsibility of the Chief
Executive and the GMT, together with the
roles noted in the Principal Risks tables on
pages 62 to 65. During the year, two new
Principal Risks have been added, reflecting
an increase in their risk profile, as reflected in
the table opposite and for which further
details can be found on page 65.
Three of our existing Principal Risks have
seen an increase in their residual rating
following a review of the current industry and
market dynamics and the introduction of the
New Homes Ombudsman.
The Board has finalised its assessment of
these risks and of any changes to the
residual risk profile during the year.
Link to material issues
The Board recognises the importance of
stakeholder engagement, the material issues
that matter the most to them and the need
for a strong linkage to risk management.
To demonstrate this linkage, an exercise was
performed during the year to align each of
our material issues (as disclosed on page 31)
to our Principal Risks, which is further
detailed in the Principal Risks tables on
pages 62 to 65.
HighLow Impact
HighLow Likelihood
Key to our values
Respectful and fair
Take responsibility
Better tomorrow
Be proud
Key to risk change
Increased risk
No change
Decreased risk
Key to strategic pillars
Build quality
Be the employer of choice in our industry
Best in class efficient engine room
Customers and communities
Optimising our strong landbank
Key
Inherent
Residual
61Taylor Wimpey plc Annual Report 2021
Principal Risks and uncertainties
A. Government policies, regulations and planning
Risk description
The industry in which we operate is becoming increasingly regulated. Failure to adhere to Government regulations could impact our
operational performance and our ability to meet our strategic objectives.
Changes to the planning system or planning delays could result in missed opportunities to optimise our landbank, affecting profitability and
production delivery.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Moderate Low – Group Operations Director
– Regional Managing Directors
– Ongoing and regular review of building regulations
– Consultation with Government agencies
– New house type range
– COVID-19 risk assessments for all operations
– Ground Rent Review Assistance Scheme
– Cladding fire safety provision
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Governance and
management
Responsible sourcing
– Removal of Help to Buy
– New Government regulations
(e.g. around planning and climate)
– Delays in planning
– Sentiment towards the industry
(e.g. Cladding fire safety
remediation)
– To build enhanced collaborative networks with
stakeholders and peers, to monitor the implications of
regulatory change
– Lead the business in addressing pressing environmental
issues, including reducing our carbon footprint and
targeting biodiversity
B. Mortgage availability and housing demand
Risk description
A decline in the economic environment, driven by sustained growth in interest rates, low wage inflation or increasing levels of unemployment,
could result in tightened mortgage availability and challenge mortgage affordability for our customers resulting in a direct impact on our
volume targets.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Moderate Low – UK Sales and Marketing Director
– Regional Sales and Marketing
Directors
– Evaluation of new outlet openings based on local
market conditions
– Pricing and incentives review
– Review of external data (e.g. HBF, mortgage lenders)
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Sustainable homes and
communities
Responsible sourcing
– Interest rate increases
– Levels of unemployment
– Volume of enquiries / people
visiting our developments
– UK household spending
– Loan to value metrics
– To continue to develop strong working relationships with
established mainstream lenders and those wishing to
increase volume in the new build market
C. Availability and costs of materials and subcontractors
Risk description
Increase in housing demand and production or a breakdown within the supply chain may further strain the availability of skilled
subcontractors and materials and put pressure on utility firms to keep up with the pace of installation resulting in increased costs and
construction delays.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Moderate Low-moderate – Group Operations Director
– Head of Procurement
– Group Commercial Director
– Central procurement and key supplier agreements
– Supplier and subcontractor relationships
– Contingency plans for critical path products
– Direct trade and apprenticeship programmes
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
People and skills
Responsible sourcing
– Material and trade shortages
– Material and trade price increases
– Level of build quality and waste
produced from sites
– Longer build times
– Number of skilled trades
– To develop and implement different build methods as
alternatives to conventional brick and block
62 Taylor Wimpey plc Annual Report 2021
Strategic report
Principal Risks and uncertainties continued
D. Attract and retain high-calibre employees
Risk description
An inability to attract, develop, motivate and retain high-calibre employees, together with a failure to consider the retention and succession of key
management could result in a failure to deliver our strategic objectives, a loss of corporate knowledge and a loss of competitive advantage.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Low Moderate – Group HR Director
– Every employee managing people
– Production Academy
– Management training
– Graduate programme
– Apprenticeship programme
– Enhanced remote working procedures
– Educational masterclasses
– Taylor Wimpey challenge
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
People and skills
Charitable giving
– Employee engagement score
– Number of, and time to fill,
vacancies
– Employee turnover levels
– To further develop in-house capability, expertise and
knowledge
E. Land availability
Risk description
An inability to secure land at an appropriate cost, the purchase of land of poor quality or in the wrong location or the incorrect timing of land
purchases in relation to the economic cycle could impact future profitability.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Low Moderate – Divisional Chairs
– Regional Managing Directors
– Regional Land and Planning
Directors
– Managing Director Group
Strategic Land
– Critically assess opportunities
– Land quality framework
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Land, planning and
community engagement
– Movement in landbank years
– Number of land approvals
– Timing of conversions from
strategically sourced land
– A strong balance sheet allows us to invest when land
market conditions are attractive
63Taylor Wimpey plc Annual Report 2021
F. Quality and reputation
Risk description
The quality of our products is key to our strategic objective of being a customer-focused business and in ensuring that we do things right
first time.
If the Group fails to deliver against these standards and its wider development obligations, it could be exposed to reputational damage,
as well as reduced sales and increased costs.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Moderate Low – Customer Director
– UK Head of Production
– Director of Design
– Customer-ready Home Quality Inspection (HQI)
– Consistent Quality Approach (CQA)
– Quality Managers in the business
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Governance and
management
Responsible sourcing
Sustainable homes and
communities
Customer service and
quality
– Customer satisfaction metrics
(8-week and 9-month)
– Number of NHBC claims
– Construction Quality Review
(CQR) scores
– Average reportable items per
inspection found during NHBC
inspections at key stages of
the build
– To better understand the needs of our customers
enabling increased transparency of our build profile.
– To lead the industry in quality standards (our CQR score)
and reduce the number of reportable items identified
through monitoring defects at every stage of build
G. Health, safety and environment
Risk description
The health and safety of all our employees, subcontractors, visitors and customers is of paramount importance. Failure to implement and
monitor our stringent health, safety and environment (HSE) procedures and policies across all parts of the business could lead to accidents
or site-related incidents resulting in serious injury or loss of life.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Low Low – Head of Health, Safety
and Environment
– Group Operations Director
– Director of Design
– Every employee
and subcontractor
– Embedded HSE system
– HSE training and inductions
– COVID-19 protocols
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Health, safety and
wellbeing
Environment
Sustainable homes and
communities
– Increase in near misses
and fatalities
– Health and safety audit outcomes
– Number of reportable health and
safety incidents
– To lead the industry in health and safety and to reduce
the amount and level of incidents
64 Taylor Wimpey plc Annual Report 2021
Strategic report
Principal Risks and uncertainties continued
H. Natural resources and climate change (NEW)
Risk description
An inability to reduce our environmental footprint, the challenges of a degraded environment including the impacts of climate change, nature
loss and water scarcity on our business, supply chain scarcity due to environmental change and the increasing desire of our customers to
live more sustainably could impact our reputation, ability to attract investment and obtain planning permission and the delivery of our
strategic targets.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Moderate Low – Director of Sustainability
– Regional Managing Directors
– Published environment strategy
– Adoption of Science Based Targets
– Climate change governance, including LEAF committee
– Achievement of Carbon Trust Standard
– HBF and investor liaison
– Training and development in-house and in our
supply chain
– Data collection and management
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Sustainable homes and
communities
Environment
– Energy use and GHG emissions
– % Biodiversity net gain
– Construction waste generation
and waste to landfill
– Sustainable homes and developments attractive
to customers
– A sustainable business of choice for investors
– Advantageous planning positions
I. Cyber security (NEW)
Risk description
The Group places increasing reliance on IT to conduct its operations and the requirement to maintain the accuracy and confidentiality of its
information systems and the data contained therein. A cyber-attack leading to the corruption, loss or theft of data could result in reputational
and operational damage.
Residual rating Residual risk change
in year
Risk appetite Accountability Key mitigations
Moderate Low-moderate – IT Director – Complex passwords policy
– Multi-factor authentication for remote access
– Regular security patching and penetration testing
– Risky logins check
– Intrusion detection and prevention systems
– Suspected phishing emails process
– Mandated cyber training for all staff
– Embedding security in new project deliverables
Link to material issues Link to strategy Link to values Example key risk indicators Opportunities
Governance and
management
– Number of devices with critical
and high open vulnerabilities
– Number of devices without latest
patching in place
– Phishing test results
– Cyber Training completion
statistics
– Number of users with
administrative privileges to
critical systems
– Together with our service partners, provide a level of
security to reinforce our reputation as a trusted partner
65Taylor Wimpey plc Annual Report 2021
Group financial review
of operations
Income statement
The numbers referenced below are statutory
numbers unless otherwise stated.
Group revenue increased to £4,284.9 million
in 2021 (2020: £2,790.2 million), reflecting
the increase in completions in the UK
(excluding joint ventures) to 13,929 (2020:
9,412) with the comparative period impacted
by site closures due to COVID-19. UK
average selling prices rose 4.0% to £299.8k
(2020: £288.3k) and average selling prices
on private completions increased by 2.8% to
£332.2k (2020: £323.2k) in the UK, primarily
due to house price inflation partly offset by
changes to product mix.
Group gross profit increased to £1,027.0
million (2020: £496.7 million), representing a
gross margin of 24.0% (2020: 17.8%). The
increase in margin over the prior year was
mainly driven by the lack of COVID-19 costs
(£60.3 million) seen in 2020 as well as fixed
costs being absorbed across more
completions in the current year.
Net operating expenses of £328.8 million
(2020: £214.3 million) include £125.0 million
Focused on
operational
delivery and
financial
performance
of exceptional costs relating to the cladding
fire safety provision, which is detailed below.
Excluding these exceptional costs the net
operating expenses were £203.8 million,
which was predominantly made up of
administrative costs of £211.0 million (2020:
£206.8 million). These increased from the
prior year as the savings in the current year
from the restructuring that occurred in 2020
were more than offset by increases in
performance based remuneration and share
based payment charges that reflected the
improved trading in the year.
This resulted in a profit on ordinary activities
before net finance costs of £698.2 million
(2020: £282.4 million), £823.2 million (2020:
£292.4 million) excluding exceptional items.
During the year, completions from joint
ventures were 158 (2020: 197). The total
order book value of joint ventures as at
31December 2021 was £74 million
(31December 2020: £51 million),
representing 151 homes (31 December
2020: 118).
Our share of joint ventures profits in the year
was £5.4 million (2020: £7.9 million). When
including this in the profit on ordinary
activities before net finance costs the
resulting operating profit was £828.6 million
(2020: £300.3 million), delivering
an operating profit margin of 19.3%
(2020: 10.8%).
In March 2021, we announced that we
would cover the costs to bring all Taylor
Wimpey apartment buildings going back
20 years from 1 January 2021, irrespective
of height or whether we retain a legal
interest, in line with current EWS1 guidance,
covering cladding and the whole of the
external wall systems including balconies. As
a result of this the Group announced an
additional £125.0 million provision to fund
cladding fire safety improvement works
which has been charged to exceptional items
in line with our policy. The prior year
exceptional charge of £10.0 million arose
following a review of ongoing works to
replace Aluminium Composite Material (ACM)
cladding on a small number of legacy
developments.
The net finance expense of £24.0 million
(2020: £25.9 million) principally includes
imputed interest on land acquired on
deferred terms, bank interest and interest on
the pension scheme. The decrease
compared with the prior year is mainly due to
a reduction in the net bank interest payable,
which in 2020 reflected the full draw down of
the previously unutilised £550 million
revolving credit facility, which was fully repaid
in the first half of 2020, following the
temporary closure of sites. In addition,
changes in foreign exchange rates in the year
resulted in a small foreign exchange loss
compared with a gain in the prior year.
Profit on ordinary activities before tax
increased to £679.6 million (2020: £264.4
million). The pre-exceptional tax charge was
£147.9 million (2020: £49.1 million). This
represents an underlying tax rate of 18.4%
(2020: 17.9%) which includes a £2.6 million
credit (2020: £1.4 million credit) arising from
the remeasurement, in part, of the Group’s
UK deferred tax assets at 25.0% following
the changes to the corporation tax rates
Chris Carney
Group Finance Director
In 2021, we have continued
toprioritise returning the
business to c.21-22%
operating margin through
focusing on cost, process
simplification and
standardisation.
66 Taylor Wimpey plc Annual Report 2021
Strategic report
Group financial review
enacted by the UK Government in the first
half of the year. A tax credit of £23.8 million
was recognised in respect of the exceptional
charge (2020: £1.7 million). This resulted
in a total tax charge of £124.1 million
(2020: £47.4 million), at a rate of 18.3%
(2020: 17.9%).
As a result, profit for the year was
£555.5million (2020: £217.0 million).
Basic earnings per share was 15.3 pence
(2020: 6.3 pence). The adjusted basic
earnings per share
††
was 18.0 pence
(2020: 6.5 pence).
Spain
Our Spanish business primarily sells second
homes to European and international
customers, with a small proportion of sales
being primary homes for Spanish occupiers.
The business has continued to face market
disruption as a result of international travel
restrictions imposed during the COVID-19
pandemic. However, it has performed well
against this backdrop and sales rates have
recovered as restrictions have eased, with
the 2021 sales rate comparable with 2019.
We completed 215 homes in 2021 (2020:
190) at an average selling price of €417k
(2020: €375k), and our total order book
as at 31December 2021 of 324 homes
(31December 2020: 126 homes), reflects
the recovery in the year as noted above.
Gross margin decreased to 24.3% (2020:
31.1%), primarily due to the increased level
of sales commissions incurred following the
greater number of reservations compared
with the prior year, and this flowed through
to an operating profit of £14.6 million for
2021 (2020: £15.8 million) and an operating
profit margin of 19.0% (2020: 25.0%).
The total plots in the landbank stood at
2,779 (31December 2020: 2,819), with
net operating assets at £108.9 million
(31December 2020: £111.5 million).
Balance sheet
Net assets at 31December 2021 increased
by 7.4% to £4,314.0 million (31December
2020: £4,016.8 million), with net operating
assets** increasing by £185.8 million to
£3,450.6 million (31December 2020:
£3,264.8 million). Return on net operating
assets** increased to 24.7% (2020: 9.9%) as
the increase in average net operating assets
over the year, compared with the prior year,
was more than offset by the increase in
operating profit over the same period. Group
net operating asset turn*
†
was 1.28 times
(2020: 0.92).
Land
Land at 31December 2021 increased by
£510.0 million in the year to £3,385.7 million
as the Group continued to invest in land
opportunities following the equity raise
completed in June 2020. The increased land
investment also meant that land creditors
increased to £806.4 million (31December
2020: £675.9 million) with new obligations
exceeding payments in the period. Included
within the gross land creditor balance is
£59.0 million of UK land overage
commitments (31December 2020:
£64.9million). £314.2 million of the land
creditors is expected to be paid within
12months and £492.2 million thereafter.
At 31December 2021 the UK short term
landbank comprised 85,376 plots
(31December 2020: 77,435), with a net
book value of £2.9 billion (31December
2020: £2.5 billion). Short term owned land
comprised £2.8 billion (31December 2020:
£2.4 billion), representing 62,660 plots
(31December 2020: 53,731). The controlled
short term landbank represented
22,716plots (31December 2020: 23,704).
The value of long term owned land increased
to £298 million (31December 2020:
£217million), representing 37,425 plots
(31December 2020: 36,968), with a further
total controlled strategic pipeline of 107,809
plots (31December 2020: 101,676). Total
potential revenue in the owned and
controlled landbank increased to £59 billion
in the year (31December 2020: £54 billion).
Value distributed during 2021
Contribution to local communities
via planning obligations
£417.7m
2020: £286.6m
Employment
£278.0m
2020: £264.9m
Net investment in land and WIP
£293.2m
2020: £362.2m
Pension contributions
£31.5m
2020: £52.3m
Taxes
£151.9m
2020: £136.4m
Dividends
£301.5m
2020: (nil)
“During 2021, we have
positioned the business
for outlet-led volume
growth from 2023,
generating additional
valueand compelling
investor returns.”
67Taylor Wimpey plc Annual Report 2021
The most recent funding test at December
2021 showed a surplus of £43 million and
a funding level of 101.7% and as a result
no payment into escrow is due in the first
quarter of 2022.
At 31 December 2021, the IAS 19
valuation of the Scheme was a surplus of
£149.9million (31December 2020: deficit
of £89.1 million). Due to the rules of the
TWPS, any surplus cannot be recovered by
the Group and therefore a deficit has been
recognised on the balance sheet under
IFRIC14. The deficit being equal to the
present value of the remaining committed
payments under the 2019 triennial valuation.
No such adjustment was recognised at
31December 2020 since the deficit on an
IAS 19 accounting basis exceeded the
present value of committed payments at that
time. Retirement benefit obligations of
£37.3million at 31December 2021
(31December 2020: £89.5 million) comprise
a defined benefit pension liability of
£37.0million (31December 2020: £89.1
million) and a post-retirement healthcare
liability of £0.3 million (31December 2020:
£0.4 million).
The Group continues to work closely with the
Trustee in managing pension risks, including
management of interest rate, inflation and
longevity risks.
Net cash and financing position
Net cash increased to £837.0 million at
31December 2021 from £719.4 million at
31December 2020, due to strong cash
generation from operating activities being
partially offset by an increase in land
investment, and the payment of dividends
in the year.
Pensions
Following the 31December 2016 triennial
valuation, the Group agreed a recovery plan
with the Trustee to pay deficit reduction
contributions of up to £40.0 million per
annum for the period from April 2018 to
December 2020. During 2020 and in
response to the site shutdowns, a temporary
suspension of the agreed deficit reduction
contributions was agreed with the Trustee for
the three months between April and June
2020 and as a result, the recovery plan
period was extended to 31 March 2021.
During 2020, the Group engaged with the
Taylor Wimpey Pension Scheme (‘TWPS’)
Trustee on the triennial valuation of the
pension scheme with a reference date of
31December 2019. In March 2021, a new
funding arrangement was agreed with the
Trustee that commits the Group to paying
£20.0 million per annum into an escrow
account between April 2021 and March
2024. The first six months of contributions
between 1 April 2021 and 30 September
2021 were guaranteed. From 1 October
2021, payments into the escrow account
are subject to a quarterly funding test with
the first funding test having an effective date
of 30 September 2021. Contributions to the
escrow are suspended should the TWPS
Technical Provisions funding position at any
quarter end be 100% or more and would
restart should the funding subsequently fall
below 98%.
The Group continues to provide a
contribution for Scheme expenses and also
makes contributions via the Pension Funding
Partnership. Total Scheme contributions and
expenses in 2021 were £17.4 million (2020:
£37.1 million) with a further £10.0 million paid
into the escrow account (2020: nil). Further
payments into escrow are subject to
quarter-end funding tests and would amount
to an additional £5.0 million being paid into
escrow in 2022 each quarter if the funding
test is not met at the respective quarter end.
Work in progress (‘WIP’)
Total WIP has reduced as completions
originally planned for completion in Q4 2020
were delayed into the first half of the current
year resulting in a greater WIP balance at
the end of the prior year. Whilst the number
of outlets at 31 December 2021 was lower
than at the start of the year, the average
WIP per UK outlet was broadly flat at
£6.5 million (31 December 2020: £6.6 million),
reflecting a continuing investment in build
on active sites.
Provisions and deferred tax
Provisions increased to £245.1 million
(31December 2020: £130.5 million) due
to the £125.0 million cladding fire safety
provision recognised in the period. There
was continued utilisation of the existing
provision as works have been carried out as
well as utilisation of the Ground Rent Review
Assistance Scheme (‘GRRAS’) provision as
claims have been received and processed.
During the year the Group agreed voluntary
undertakings with the CMA which built on
the existing GRRAS scheme, the cost of
these undertakings fall within the original
provision made by the Group in 2017.
Our net deferred tax asset of £26.2 million
(31December 2020: £33.7 million) relates to
our pension deficit, employee share schemes
and the temporary differences of our Spanish
business, including brought forward trading
losses. The decrease in the pension deficit in
the period decreased the deferred tax asset
recognised, with some offset as the deferred
tax asset has been remeasured, in part, at
25.0% (31December 2020: 19.0%) following
the UK enacted change in rate in the period.
2021 Group results
UK Spain Group
Completions including joint ventures 14,087 215 14,302
Revenue (£m) 4,208.1 76.8 4,284.9
Operating profit (£m) 814.0 14.6 828.6
Operating profit margin (%) 19.3 19.0 19.3
Profit before tax and exceptional items (£m) 804.6
Profit for the year (£m) 555.5
Basic earnings per share (p) 15.3
Adjusted basic earnings per share (p) 18.0
68 Taylor Wimpey plc Annual Report 2021
Strategic report
Group financial review continued
Average net cash for the year was
£788.1million (31December 2020:
£399.3 million).
In the year to 31December 2021, the inflow
of cash from operations as a result of the
improved trading led to cash conversion of
69.4% of operating profit (2020: (54.9)%).
Net cash, combined with land creditors,
resulted in an adjusted gearing
‡‡‡‡
of (0.7)%
(31December 2020: (1.1)%).
At 31December 2021 our committed
borrowing facilities were £634 million of
which £550 million was undrawn. The
average maturity of the committed borrowing
facilities at 31December 2021 was 2.9 years
(31December 2020: 3.8 years).
Dividends
Subject to shareholder approval at the AGM
scheduled for 26 April 2022 the 2021 final
ordinary dividend of 4.44 pence per share
will be paid on 13 May 2022 to shareholders
on the register at the close of business on
1April 2022 (2020 final dividend: 4.14 pence
per share). In combination with the 2021
interim dividend of 4.14 pence per share this
gives total ordinary dividends for the year of
8.58 pence per share (2020 ordinary
dividend: 4.14 pence per share).
The 2021 final ordinary dividend will be
paid as a cash dividend, and shareholders
in the United Kingdom have the option to
reinvest all of their dividend under the
Dividend Re-Investment Plan (DRIP),
details of which are available on our website
www.taylorwimpey.co.uk/corporate.
Our intention remains to return cash
generated by the business in excess of that
needed by the Group to fund land
investment, all working capital, taxation and
other cash requirements of the business, and
once the ordinary dividend has been met.
Following the strong performance of
the business during 2021, we are today
announcing our intention to return excess
cash of c.£150 million in 2022 through the
implementation of a share buyback
programme, with an initial tranche of
c.£75million expected to be completed
by no later than 3 June 2022.
Alternative Performance Measures
The Group uses Alternative Performance
Measures (APMs) as key financial performance
indicators to assess underlying performance
of the Group. The APMs used are widely
used industry measures and form the
measurement basis of the key strategic KPIs
(operating margin, return on net operating
assets, and cash conversion). Aportion of
executive remuneration is alsodirectly linked
to some of the APMs. Definitions and
reconciliations to the equivalent statutory
measures are included innote 32 of the
financial statements.
Going concern
The Directors remain of the view that the
Group’s financing arrangements and balance
sheet strength provide both the necessary
liquidity and covenant headroom to enable
the Group to conduct its business for at least
the next 12 months. Accordingly, the
financial statements are prepared on a going
concern basis, see note 1 of the financial
statements for further details of the
assessment performed.
Chris Carney
Group Finance Director
Final dividend pence per
share
4.44
(2020: 4.14)
2022 share buyback
c.£150m
69Taylor Wimpey plc Annual Report 2021
Viability disclosure
In accordance with the 2018 UK Corporate
Governance Code, the Directors and the
senior management team have assessed
theprospects and financial viability of
theGroup for a period longer than the
12months required for the purposes of
the‘going concern’ provision.
Time period
The Directors have assessed the viability of
the Group over a five-year period, taking
account of the Group’s current financial
position, current market circumstances and
the potential impact of the Principal and
Emerging Risks facing the Group. The
Directors have determined this as an
appropriate period over which to assess
theviability based on the following:
– It is aligned with the Group’s bottom-up
five-year budgeting and forecasting cycle;
and
– Five years represents a reasonable
estimate of the typical time between
purchasing land, its progression through
the planning cycle, building out the
development and selling homes to
customers from it.
Five years is also a reasonable period for
consideration given the following broader
external trends:
– The cyclical nature of the market in which
the Group operates, which tends to follow
the economic cycle;
– Consideration of the impact of
Government policy, planning regulations
and the mortgage market;
– Long term supply of land, which is
supported by our strategic landbank; and
– Changes in technology and customer
expectations.
Assessment of prospects
We consider the long-term prospects of
theGroup in light of our business model.
Ourstrategy to deliver sustainable value is
achieved through delivering high quality
homes in the locations where people want
tolive, with excellent customer service,
whilstcarefully managing our cost base
andthe Group’s balance sheet.
In assessing the Group’s prospects and
long-term viability due consideration is
givento:
– The Group’s current performance, which
includes the current year performance
(pages 2 to 3) and the output from the
annual business planning process and
financing arrangements;
– The wider economic environment and
mortgage market (further details of which
are provided on pages 18 to 21), as well
as changes to Government policies and
regulations, including those influenced by
sustainability, climate change and the
environment, that could impact the
Group’s business model including the
recent announcement on the Future
Homes Standard (further details of which
are provided on page 19) and Residential
Property Developer Tax;
– Strategy and business model flexibility,
including build quality, customer dynamics
and approach to land investment. Further
detail is provided on pages 22 to 27; and
– Principal Risks associated with the
Group’s strategy and business model
including those which have the most
impact on our ability to remain in operation
and meet our liabilities as they fall due.
Principal Risks
The Principal Risks, to which the Group are
subject, have undergone a comprehensive
review by the GMT and Board in the current
year. Consideration is given to the risk
likelihood based on the probability of
occurrence and potential impact on our
business, together with the effectiveness of
mitigations. The full list of Principal Risks,
including mitigations, can
be found on pages 62 to 65 and are
referenced ‘A’ to ‘I’.
The Directors identified the Principal
Risksthat have the most impact on the
longer-term prospects and viability of the
Group, and as such these have been used in
themodelling of a severe but plausible
downside scenario,as:
– Government policies, regulations and
planning (A);
– Mortgage availability and housing
demand(B);
– Availability and costs of materials and
subcontractors (C);
– Quality and reputation (F); and
– Cyber Security (I)
A range of sensitivity analysis for these
riskstogether with likely mitigating actions
that would be adopted in response to
thesecircumstances were modelled,
including asevere but plausible downside
scenario inwhich the impacts were
aggregated together.
The impact from ‘Natural resources and
climate change’ (H) is not deemed to be
material within the five year forecast period,
albeit known costs from regulation have
been included in the modelling (e.g. updates
to Parts L&F of the building regulations in
England and Future Homes Standard).
Assessment of viability
The Group adopts a disciplined annual
business planning process involving the
management teams of the 23 UK business
units and Spain, and the Group’s senior
management, and is built on a bottom-up
basis. This planning process comprises a
budget for the next financial year, together
with a forecast for the following four financial
years (‘forecast’).
The financial planning process considers the
Group’s profitability and Income Statement,
Balance Sheet including landbank, gearing
and debt covenants, cash flows and other
key financial metrics over the forecast period.
The forecast also incorporates the likely
market impact of the planned changes
toHelp to Buy and considers the impact of
the Government announcements for example
on transitional arrangements for the Future
Homes Standard and the Building Safety
Levy. These financial forecasts are based
ona number of key assumptions, the most
important of which include:
– Timing and volume of legal completions
ofnew homes sold, this includes annual
production volumes and sales rates over
the life of the individual developments;
– Average selling prices achieved;
– Build costs and cost of land acquisitions,
including the impact from the updates to
Parts L & F of the building regulations in
England and the Future HomesStandard;
– Working capital requirements; and
– Capital repayment plan, where we have
assumed the payment of the ordinary
dividend in line with the previous policy,
which is a minimum of £250 million or
7.5% of the Group’s net assets,
throughout the period as well as the
distribution of excess capital to
shareholders in 2022 via a share buyback.
70 Taylor Wimpey plc Annual Report 2021
Strategic report
Stress testing our risk resilience
The assessment considers sensitivity
analysis on a series of realistically possible,
but severe and prolonged, changes to
principal assumptions. In determining these
we have included macro-economic and
industry-wide projections as well as matters
specific to the Group.
The severe but plausible downside scenario
reflects the aggregated impact of the
sensitivities, taking account of a sharp
decline in customer confidence, disposable
incomes, and mortgage availability. To
arriveat our stress test we have drawn on
experience gained managing the business
through previous economic downturns and
the COVID-19 pandemic.
We have applied the sensitivities
encountered at those times, as well as
themitigations adopted, to our 2022
expectations in order to test the resilience
ofour business. As a result, we have stress
tested our business against the following
severe but plausible downside scenario
which can be attributed back to the Group’s
Principal Risks that have been identified as
having the most impact on the longer-term
prospects and viability of the Group.
Volume (Principal Risk: A, B, C, F) a
declinein total volumes of 20% from 2021,
recovering by the end of the forecast period.
Price (Principal Risk: B) a reduction to
current selling prices of 20%, recovering
bythe end of the forecast period.
Costs (Principal Risk: A, F, I) a one-off
exceptional charge and cash cost of £150
million for an unanticipated event, change in
Government regulations or financial penalty
(e.g. from a Cyber Security breach).
Within the scenario build costs are forecast
to reduce with lower volumes reducing
pressure on the availability of materials and
resources and land cost remains flat as the
possible increase in availability due to lower
volumes is offset by a restriction in supply.
An estimate for the cost of the Future Homes
Standard has been assumed.
The mitigating actions considered in the
model include a reduction in land investment,
a reduction in the level of production and
work in progress held and reducing our
overhead base to reflect the lower volumes.
If these scenarios were to occur, we also
have a range of additional options to maintain
our financial strength, including: a reduction
in capital expenditure, the sale of assets,
reducing the dividend, and or raisingdebt.
The Group’s liquidity (defined as cash and
undrawn committed facilities) was £1,471
million at 31 December 2021. This is sufficient
to absorb the financial impact of each of the
risks modelled in the stress andsensitivity
analysis, individually and inaggregate.
Confirmation of viability
Based on the results of this analysis, the
Directors have a reasonable expectation
thatthe Group will be able to continue
inoperation and meet its liabilities as
theyfalldue over the five-year period
oftheirassessment.
Approval of the Strategicreport
This Strategic report on pages 2 to 71 was
approved by theBoard of Directors and
signed on its behalf by
Pete Redfern
Chief Executive
Definitions
* Operating profit is defined as profit on ordinary activities before
net finance costs, exceptional items and tax, after share of results
of joint ventures.
** Return on net operating assets (RONOA) is defined as rolling
12-month operating profit divided by the average of the opening
and closing net operating assets, which is defined as net assets less
net cash, excluding net taxation balances and accrued dividends.
*
†
Net operating asset turn is defined as 12-month rolling total
revenue divided by the average of opening and closing net
operating assets.
†
Tangible net assets per share is defined as net assets before any
accrued dividends excluding goodwill and intangible assets divided
by the number of ordinary shares in issue at the end of the period.
††
Adjusted basic earnings per share represents earnings attributed
to the shareholders of the parent, excluding exceptional items and
tax on exceptional items, divided by the weighted average number
of shares in issue during the period.
‡
Net cash is defined as total cash less total borrowings.
‡‡
Cash conversion is defined as operating cash flow divided by
operating profit on a rolling 12-month basis, with operating cash flow
defined as cash generated from operations (which is before taxes
paid, interest paid and payments related to exceptional charges).
‡‡‡‡
Adjusted gearing is defined as adjusted net debt divided by net
assets. Adjusted net debt is defined as net cash less land creditors.
71Taylor Wimpey plc Annual Report 2021
Governance at a glance
The 2018 UK Corporate
Governance Code statement
ofcompliance
For the year ended 31 December 2021,
the Company complied with:
– All of the provisions of the 2018 UK
Corporate Governance Code (the Code),
except for Provision 38 (Executive Director
pension contributions) which we will comply
with by 1 April 2024. The Code can be
found at www.frc.org.uk
– The Financial Conduct Authority’s
Disclosure and Transparency Rules
sub-chapters 7.1-7.2 and Listing Rules
9.8.6R, 9.8.7R and 9.8.7AR
– The BEIS Directors’ Remuneration
Reporting Regulations and Narrative
Reporting Regulations
Highlights
Undertook a formal, rigorous and
transparent recruitment and selection
process for therole of Chief Executive
Page 90
Reported on the likely impact of the
Company’s activities on the climate
Page 48
Further developed the Company’s
succession and contingency plans
Page91
Completed the annual internal
evaluation of the Board,
its Committees, the Chairman and
individual Directors
Page 92
Met the FTSE Women Leaders Targets
in relation to Board diversity
Page 93
Met the Parker Review
‘Beyond One by21’ recommendation
Page 93
In accordance with Section 4, Principle N,
Provision 27 of the Code, the Board considers
that, taken as a whole, this Annual Report and
Accounts is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the Company’s
position, performance, business model and
strategy. The Board was able to reach this
conclusion after receiving advice from the
Audit Committee. More information can be
found on page 104.
How we comply with the Code
The Corporate Governance section of this
Annual Report and Accounts explains how
the Code principles have been applied, as
set out below:
1. Board leadership
and Company
purpose
Pages 78 to 85
2. Division
of responsibilities
Pages 86 to 87
3. Composition,
succession
andevaluation
Pages 88 to 97
4. Audit, risk and
internal control
Pages 98 to 104
5. Remuneration
Pages 105 to 124
Implemented a revised Equality,
Diversity and Inclusion Policy
Page 94
Published the Company’s fifth
Gender Pay Gap Report
Page 94
Continued to be a member of the
FTSE4Good Index
Page 79
Arranged a thorough induction process
following the appointment of Jitesh
Gadhia and Scilla Grimble as Non
Executive Directors
Page 91
Enhanced the role of, and employee
engagement with, the Board’s Employee
Champion
Page 84
72 Taylor Wimpey plc Annual Report 2021
Governance
Corporate Governance
Operational Financial Property
Customer
service Economics Public sector Marketing Risk IT ESG
Irene Dorner
Pete Redfern
Chris Carney
Jennie Daly
Robert Noel
Gwyn Burr
Jitesh Gadhia
Scilla Grimble
Angela Knight
Humphrey Singer
Directors’ skills matrix
2022 AGM
The Board is pleased to
be able to hold the AGM in
person after two years of
COVID-19 restrictions, and is
looking forward to meeting
shareholders, hearing their
views and answering
their questions.
More information about the
2022 AGM is available on
page 184.
Non Executive Directors’ tenure Board independence
Board composition (as at 31 December 2021)
Non
independent
Independent
Chairman
30%
10%
60%
1-2
years
3-4
years
5-6
years
3 21
Board meetings via Microsoft Teams
and in person
In person Microsoft Teams
2 7
73Taylor Wimpey plc Annual Report 2021
A
Audit Committee
N
Nomination and
Governance Committee
R
Remuneration Committee
Chairship of the Committee
Company Secretary
Alice Black
Group General Counsel and Company Secretary
Joined November 2019
54321
1. Irene Dorner
Chairman
N R
Joined December 2019
and appointed Chairman
February 2020
Skills and experience
Irene has strong leadership
skills and commercial
experience gained during
her career spanning more
than 30 years in banking
and also through her various
non executive roles. Her long
and distinguished career at
HSBC included a number of
senior positions, including
CEO of HSBC Malaysia;
CEO and President of HSBC
in the United States; Group
Managing Director of HSBC
Holdings and member of the
Group Management Board.
Irene was Chairman of Virgin
Money (UK) plc for seven
months prior to its acquisition
in 2018 and was also a non
executive director of AXA SA.
External appointments
Irene is currently a non
executive director at
Rolls-Royce Holdings plc but
will be stepping down on
12 May 2022. She also Chairs
Control Risks Limited, a risk
consultancy business. She is a
Trustee of the South East Asia
Rainforest Research
Partnership, an Honorary
Fellow of St. Anne’s College,
Oxford and Chair of the
Trustees for the Hampstead
Theatre.
Executive DirectorsChairman
Skills and experience
Alice, a solicitor, was previously
the Group General Counsel
and Company Secretary of
Thomas Cook Group plc and
has also worked in the legal
profession. Alice oversees
compliance with legal and
regulatory obligations and also
manages the Company’s Legal
and Secretariat Departments.
She has significant legal,
commercial, transactional,
regulatory and corporate
governance related experience.
Key to committees
2. Pete Redfern
Chief Executive
(a)
Joined July 2007
Skills and experience
Pete was previously
Group Chief Executive of
George Wimpey Plc, having
successively held the posts
of Finance Director and
Chief Executive of
George Wimpey’s
UK Housing operations.
He has full day to day
responsibility for delivering
the Company’s strategy
in a profitable, safe and
environmentally responsible
manner and has significant
financial, operational and
management experience,
gained from his various roles
in industry and from his time
at KPMG.
External appointments
Pete is the Senior Independent
Director at Travis Perkins plc
and is Chair of the Youth
Adventure Trust charity.
3. Chris Carney
Group Finance
Director
Joined April 2018
Skills and experience
Chris is a Chartered
Accountant and has worked
in both private practice with
Deloitte and for Associated
British Foods plc. Since joining
in 2006, he has successively
held the roles of Group
Financial Controller; Finance
Director of Taylor Wimpey UK
(the Group’s main operating
company); Managing Director
of the Company’s South
Thames business unit; and
Divisional Chair for the London
and South East Division, where
he oversaw significant progress
in the operational and financial
performance of the Division.
As Group Finance Director,
Chris has operational
responsibility for managing
the Company’s finances and
also oversees the information
technology and pension
functions.
4. Jennie Daly
Group Operations
Director and CEO
designate
(b)
Joined April 2018
Skills and experience
Jennie has a wealth of
experience in the
housebuilding industry
gained from roles which
included strategic land
oversight at Westbury plc
and Managing Director of
Harrow Estates Plc. She
joined the Company in
2014 from Redrow plc,
as UK Planning Director,
before becoming UK Land
Director in 2015.
Jennie oversees our land,
planning, design, technical,
sustainability, production and
supply chain functions; and
manages the Taylor Wimpey
Logistics business.
External appointments
Jennie is currently a non
executive director at New
Homes Quality Board Limited
and at the Peabody Trust,
however she will step down
from the Peabody Trust at
the end of June 2022.
5. Robert Noel
Independent Non
Executive Director
(c)
A N
Joined October 2019
Skills and experience
Rob has over 30 years’
experience in the property
sector. He was Chief Executive
of Land Securities Group PLC
from 2012 to 2020 and was
previously Property Director at
Great Portland Estates plc and
a director of Nelson Bakewell,
the property services group.
He is a former President of the
British Property Federation.
Rob has been the Company’s
Senior Independent Director
since April 2020.
External appointments
Rob is Chairman at
Hammerson plc and a Trustee
of the Natural History Museum.
Independent Non
Executive Directors
74
Taylor Wimpey plc Annual Report 2021
Governance
Board of Directors
10876
6. Gwyn Burr
Independent Non
Executive Director
(d)
N R
Joined February 2018
Skills and experience
Gwyn has over 25 years’
executive experience,
principally in marketing and
customer service in the retail
sector, which included the
roles of Customer Director
and Customer Service and
Colleague Director at J
Sainsbury plc. She previously
held non executive positions
with the Principality Building
Society Limited, Sainsbury’s
Bank plc, DFS Furniture plc,
Wembley National Stadium
Limited and the Financial
Ombudsman Service.
External appointments
Gwyn is the Senior Independent
Director at Hammerson plc and
Made.com Group Plc; and a
non executive director at Just
Eat Takeaway.com N.V. plc
and Metro AG (a German
listed company).
7. Lord Jitesh Gadhia
Independent Non
Executive Director
(e)
N R
Joined March 2021
Skills and experience
Jitesh has over 20 years’
executive experience,
principally in banking and
private equity, having held
senior roles at Blackstone,
Barclays Capital and
ABN AMRO.
He previously supported
the Letwin Review of the
build out rate of residential
homes, and was a non
executive director at UK
Financial Investments Limited
and Senior Independent
Director at Calisen plc.
External appointments
Jitesh has been a member
of the House of Lords since
2016. He is a non executive
director of Compare The Market
Limited, a director of Accord
Healthcare Limited, a member
of the Board of UK Government
Investments Limited, and a
Trustee of the British Asian
Trust. It has also been
announced that Jitesh will be
joining the Board of Rolls-Royce
Holdings plc from 1 April 2022
as a non executive director.
8. Scilla Grimble
Independent Non
Executive Director
A N
Joined March 2021
Skills and experience
Scilla has over 15 years’
executive experience in the
corporate finance and retail
sectors, having held senior
roles at UBS, Tesco plc, and
Marks and Spencer Group plc.
Along with her significant
financial and risk-related
experience, Scilla also has
experience of technology in a
customer-facing environment
and has broad property
experience from her time at
both Tesco plc and Marks and
Spencer Group plc.
External appointments
Scilla is Chief Financial Officer
at Moneysupermarket.com
Group plc.
9. Angela Knight
Independent Non
Executive Director
(f)
A N R
Joined November 2016
Skills and experience
Angela brings to the Board a
wealth of experience gained at
a senior level in both the public
and private sectors. Previously,
Angela was a Member of
Parliament from 1992 to 1997,
including two years as the
Economic Secretary at HM
Treasury, and Chair of the
Office of Tax Simplification at
HM Treasury until the end of
February 2019.
External appointments
Angela is the Chair at Pool Re,
and a non executive director at
Arbuthnot Latham & Co.,
Provident Financial plc, and
Encore Capital Group, Inc. In
addition, she is a member of the
governing body of The Astana
Financial Services Authority.
10. Humphrey Singer
Independent Non
Executive Director
A N
Joined December 2015
Skills and experience
Humphrey has a wealth
of financial experience and
expertise in the areas of both
digital solutions and customer
service. Previously he was
Chief Finance Officer at Marks
and Spencer Group plc, Group
Finance Director at Dixons
Retail plc, and earlier held
senior finance-related roles
within Dixons and Coca Cola
Enterprises.
External appointments
Humphrey is Chief Financial
Officer at Belron Group.
Board attendance during 2021
Number of meetings attended
in 2021
Irene Dorner, Chairman 8/9
(a)
Pete Redfern, Chief Executive 9/9
Chris Carney, Group Finance Director 9/9
Jennie Daly, Group Operations Director and CEO designate 9/9
Robert Noel, Senior Independent Director 9/9
Gwyn Burr, Non Executive Director 9/9
Jitesh Gadhia
(b)
, Non Executive Director 7/7
Scilla Grimble
(b)
, Non Executive Director 7/7
Angela Knight, Non Executive Director 9/9
Humphrey Singer, Non Executive Director 9/9
(a) Irene Dorner was unable to attend one Board meeting during the year. More information can be found
on page 78.
(b) Appointed as a Non Executive Director on 1 March 2021.
Independent Non
Executive Directors
9
Upcoming Board changes
At the conclusion of the AGM on 26 April 2022:
(a) Pete Redfern will step down as Director
and Chief Executive
(b) Jennie Daly will become Chief Executive
(c) Robert Noel will become the Board’s
Employee Champion
(d) Gwyn Burr will step down from the Board
(e) Jitesh Gadhia will become Chair of the
Remuneration Committee
(f) Angela Knight will step down from the Board
75Taylor Wimpey plc Annual Report 2021
Stakeholder engagement
The Board leads the Company’s stakeholder
engagement programme and ensures that the
views of different categories of stakeholders,
and consideration of how the Group’s current
activities and future proposals may impact
upon those stakeholders, are considered by
the Board and the GMT on a regular basis.
A key area of focus for us is shareholder
communication, including soliciting their
views and taking them into account in
our decision making. I have continued my
direct engagement with our shareholders,
in addition to our planned investor relations
programme undertaken each year.
Equally important is maintaining, and seeking
to further improve, two-way communication
between the Board and our employees.
Whilst this remains a priority for the entire
Board, the appointment during 2020 of
Gwyn Burr as the Board’s Employee
Champion has further improved this process
of inclusion, consultation, and information.
I am confident that when Gwyn leaves the
Board after the Annual General Meeting
(AGM), Robert Noel will continue to further
develop and strengthen these areas when
he takes over the role of the Board’s
Employee Champion.
Information on the processes embedded to
ensure that this employee engagement takes
place appears on page 84.
Environmental, social and governance
Environmental, social and governance (ESG)
considerations have consistently featured on
the Board’s and its Committees’ agendas
through the year and are built into the
Company’s strategy, planning and day to day
business operations. We have responsibility
Dear shareholder
My second year as Chairman featured
almost as many new challenges as the first
year, when we worked our way through the
impact of a global pandemic. Our Board
has overseen the gradual rebuilding of our
operations towards pre-COVID-19 levels and
the actions taken to ensure land acquired
following the equity raise progresses through
the planning system to deliver outlet-led
growth, whilst conducting an in-depth
external and internal search for the
Company’s new Chief Executive.
The challenge of maintaining good governance
during this period of increasing activity on a
number of different fronts has, I believe, been
effectively met. This Governance report sets
out the key areas we have considered as a
Board; the Board Committees; and the
processes established throughout the Group’s
businesses and operations; the influence of
stakeholder engagement in our thinking,
debate and decision making; and how that
has been brought together to maintain strong
governance throughout 2021 and present a
robust outlook for 2022 and beyond.
Culture
Underpinning the Group’s corporate
governance is the culture embedded at
every level of the business of ‘doing the right
thing’. This has continued to be the
cornerstone of our leadership and of the
Group Management Team (GMT), who work
together to ensure this is reflected in our
everyday business practices and our
engagement with stakeholders.
We hold ourselves accountable to a similar
high standard in our approach to governance,
whereby we seek to comply with and exceed,
to the extent reasonably possible and
appropriate, new corporate governance
standards in advance of their formal
application to subsequent reporting years.
Information on the Group’s cultural principles and
the ways in which we monitor their application
and continued appropriateness, appears on
pages 40 and 83.
for driving progress towards the Company’s
ESG initiatives and this report sets out how
the Company has addressed this key area
during 2021 and our plans to continue doing
so during 2022, benefiting from the learnings
from an external assessment of our work in
this area to date.
Please see pages 7 and 79 for more information.
Climate change
We are all conscious that climate change has
rightly received greater attention worldwide
during 2021 and that efforts continue to
reduce the pace of that change. To that end,
The Financial Stability Board, an international
body that monitors and makes
recommendations about the global financial
system, created the Task Force on Climate-
related Financial Disclosures (TCFD) to
improve and increase reporting of climate-
related financial information. This reporting
became mandatory for UK listed companies
for 2021 reporting and beyond, in
accordance with Listing Rule 9.8. The
Company’s reporting in this area, including
additional disclosures around risks and
opportunities, is set out on pages 48 to 57,
together with details as to how this reporting
has been overseen by the Audit Committee
on page 99.
Irene Dorner
Chairman
The challenge of maintaining
good governance during this
period of change has been
effectively met.
76 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Chairman’s letter
Equality, diversity and inclusion
Further improving equality, diversity and
inclusion across the Group is embedded in
our day to day business operations. Led by
the Group HR team, supported by the GMT
and overseen by the Board, the further
progress made in these areas during 2021
and plans for further improvement during
2022, are set out on page 95.
In 2021, the Company continued to exceed
the FTSE Women Leaders Review target on
gender, namely, to have at least 33% female
representation on the Board; and has also
met the Parker Review target of having at
least one person of colour on the Board by
the end of 2021.
We have made further progress below Board
level, with female representation on the GMT
and their direct reports combined, having
increased from 23% in 2020 to 24% as at
31December 2021. However, this progress
needs to continue and the Company’s
revised Equality, Diversity and Inclusion
Policy, together with details of the progress
made during 2021 and plans for 2022,
appears on pages 93 to 97.
Board composition
Following the appointments of Jitesh Gadhia
and Scilla Grimble in March 2021, the
Nomination and Governance Committee
conducted a thorough review of our Board
and concluded that the composition,
structure, and balance of skills and
experience on the Board was appropriate
at the time.
The following changes were recently
announced to the composition of our Board.
Firstly, we have announced that Pete
Redfern will be stepping down as a Director
and as Chief Executive at the conclusion of
the AGM on 26 April 2022. This is, of course,
a significant development for the Company
as Pete has been Chief Executive since the
merger in 2007 which created Taylor
Wimpey and was previously George
Wimpey’s Chief Executive from 2006. Pete
introduced the culture of ‘doing the right
thing’ and has continued to lead the
Company with consistently high standards
of corporate governance.
We were delighted to announce on
7 February 2022 that Jennie Daly, our
current Group Operations Director, will
succeed Pete Redfern as Chief Executive
with effect from the conclusion of the AGM.
Jennie has been with the Group for eight
years and has extensive knowledge and
practical experience of all stages of the land
acquisition and development business,
including as Interim Divisional Chair of one
of our operating divisions. She is well-known
and well-respected in the wider industry, with
30 years’ experience in the housebuilding
and land and planning industries. Jennie will
have the benefit of a substantial handover
period from Pete prior to his departure. With
her strong focus on execution, combined
with her customer and people-focused skills,
I, and the Board as a whole, are confident
that she is the ideal person to lead the
Group in the next exciting chapter of growth
and delivery.
More details of Jennie’s experience and career to
date appear on page 74.
Secondly, we have announced that two of
our Non Executive Directors, Gwyn Burr and
Angela Knight, will be stepping down with
effect from the conclusion of the 2022 AGM
and will therefore not be seeking re-election
at the AGM. I would like to thank both Gwyn
and Angela for their long service and valued
counsel during their tenure on the Board;
their membership of Board Committees; and
Gwyn’s additional valued contributions both
as Chair of the Remuneration Committee
and as the Board’s Employee Champion.
We have engaged the services of a reputed
executive search firm to support the
recruitment process for new Non Executive
Directors, with a focus on operational and
customer service expertise.
Succession planning for key Board positions
is regularly reviewed by the Nomination
and Governance Committee, with training
and development plans for Board members
and their potential successors focused on
likely timescales for future change. Details
of training and development activities
undertaken by the Board, individually
and collectively, during 2021 is set out
on page 78.
50%
Board gender diversity
95%
of employees are proud
to work for the Company
50%
reduction in direct (scope 1
and 2) carbon emissions
intensity since 2013
The Board continues to recognise the
importance of it, its Committees, and
individual Directors, each being subject to
a rigorous performance evaluation every year.
This annual evaluation is externally facilitated
at least every three years, in accordance with
the Code. The 2021 evaluation was internally
facilitated, and details of the process followed,
the outcomes, and proposed actions to
be taken to address potential areas of
improvement or further enhancement,
are set out on page 92.
2022 AGM
I am pleased to be able to announce that the
Company’s 2022 AGM will be held in person
at 10:30am on 26 April 2022 in the
Winterlake Suite at the Crowne Plaza
Marlow, Fieldhouse Lane, Marlow, SL7 1GJ.
I hope you will be able to attend and I and
the other Board members look forward to
meeting shareholders, hearing their views,
and answering their questions. In the event
that shareholders are unable to attend the
AGM, they are invited to submit questions in
advance to be answered at the AGM. More
details of the AGM and the business to be
considered, are set out on pages 184 to 191.
Conclusion and outlook
As demonstrated in the results of our internal
Board evaluation, your Board continues to be
effective and to work well as a team, having
been further enhanced by the skills and
knowledge brought to the table by the two
new appointees during the year. Throughout
2021 I am confident that we continued to
have the right balance of skills, expertise,
experience and professionalism to continue to
deliver strong governance, within our culture
of ‘doing the right thing’. Following our
announcement that Gwyn Burr and Angela
Knight will be stepping down at the
conclusion of our AGM, we also have the
opportunity to carefully reassess our Board
composition to ensure we maintain such high
standards in the future.
Irene Dorner
Chairman
2 March 2022
77Taylor Wimpey plc Annual Report 2021
The Board and its Committees
At the date of this report, the Board consists
of ten Directors, namely: the Chairman; three
Executive Directors; and six Non Executive
Directors. Their names, responsibilities and
other details appear on pages 74 and 75.
The role of the Non Executive Directors is
tooffer advice, guidance and constructive
challenge to the Executive Directors, using
their wide ranging experience gained in
business and from their diverse backgrounds
in the areas described on pages 74 and 75.
Appointments and succession
During 2021 the Nomination and
Governance Committee reviewed the
composition, structure, succession planning,
and balance of skills and experience on the
Board and the Board Committees. Following
the appointments of Jitesh Gadhia and
Scilla Grimble on 1 March 2021, described
on page 88, the Nomination and Governance
Committee considered the Board
composition was appropriate, and this will be
kept under review following the Board
changes at the 2022 AGM.
More information about the planned
succession of Jennie Daly to the Chief
Executive role and the recruitment,
assessment and decision making
process undertaken by the Nomination
and Governance Committee in planning
and concluding the Chief Executive
succession; together with the progress to
date on recruiting new Non Executive
Directors, can be found on pages 90 to 91.
Board attendance
During 2021 the Board held eight formal
meetings and one business update call in
January in order to update the Board on the
previous year end performance and provide
an initial trading update in the new year.
The Board regularly considers the number
and frequency of Board meetings that take
place each year and has concluded that nine
meetings is appropriate. There are processes
in place to convene additional Board
meetings as and when necessary.
The Chairman held a meeting with the Non
Executive Directors at the conclusion of each
formal Board Meeting, without the Executive
Directors being present, and, as required by
the Code, theSenior Independent Director,
held a meeting with the Non Executive
Directors without the Chairman being present.
There was full attendance at all meetings
byall Directors, except the Chairman who
was not available for one meeting which
wasinstead chaired by Robert Noel as the
Company’s Senior Independent Director.
After the meeting, both Rob Noel and Alice
Black, in her role as Secretary, briefed Irene
Dorner on the business of the meeting and
any decisions that were taken. In addition,
prior to the meeting, Irene’s views on the
business proposed in the meeting agenda
were sought and shared with the other
Board members during the meeting. Details
of the attendance of each Director at Board
and Committee meetings are set out in the
tables on pages 75, 88, 98 and 105.
Board responsibilities
The Board discharges its responsibilities
byproviding strategic and entrepreneurial
leadership of the Company, within a
framework of strong governance, effective
controls and a strong culture emphasising
openness and transparency, which enables
opportunities and risks to be assessed and
managed appropriately. In addition, the
Board sets the Company’s strategic
direction, ensures that the necessary
financial and human resources are in place
for the Company to meet its objectives, and
reviews management performance. More
information about each member of the
Board’s role can be found on page 87.
Information and professional
development
In normal business conditions, all Directors
visit Group operations on a regular basis,
engaging with employees at all levels in order
to foster and maintain an understanding of
the business.
The role of the National Employee Forum
(NEF) has been steadily enhanced over the
past four years enabling a representative of
theBoard, usually the Board’s Employee
Champion, Gwyn Burr, to continue hearing
employee sentiment first hand. This dialogue
operates as an effective, two-way information
loop between the Board and the NEF as
theemployees’ representative body and we
will continue to develop the link between
employees and the Employee Champion in
2022. More information about employee
engagement can be found on page 84.
Board leadership and
Companypurpose
Company purpose
The Company’s purpose is to build great
homes and create thriving communities. This
purpose is described in more detail, together
with the way it links to the Group’s strategy;
is strongly supported by our values; and
guides operational planning and
performance, on pages 22 to 27.
Examples of the Board’s leadership
towardsachieving this purpose during 2021
are described on pages 81 and 82, including
the Board’s consideration of
keystakeholders and the ways in which
consideration of their interests informed the
Board’s decision making during 2021 and
will continue to do so during 2022.
The Group General Counsel and Company
Secretary acts as Secretary to the Board
and its Committees and attends all meetings.
A formal agenda and reports are issued
electronically to Directors ahead of all Board
and Committee meetings at least one week
prior to the meeting, in order to allow sufficient
time for detailed review and consideration.
Formal minutes are prepared in respect
of all Board and Committee meetings.
The Secretary provides regular briefings
to the Board on relevant regulatory and
governance matters, supplemented by
briefings from independent advisers
where necessary.
During 2021, the Board received briefings
ontopics including ESG. These were
delivered by independent experts and the
Board will continue to include additional topics
on the agenda for future information briefings.
The Chairman, Chief Executive and Secretary
meet sufficiently in advance of each Board
meeting in order to ensure action points from
previous meetings have been implemented
and to prepare the agenda andmatters to be
covered at the next and atfuture Board
meetings asappropriate.
A similar process is undertaken by each
Committee Chair with relevant members
of Management.
An annual plan for the following year’s
meetings is approved by the Board and each
Committee in the final meeting of each year.
78 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Board leadership and Company purpose
Environmental, social
andgovernance
Environmental, social and governance (ESG)
has always been an important part of
working for Taylor Wimpey and our approach
is set out on page 7. The Board receives
regular briefings and updates on the
progress of the Group’s ESG initiatives.
These briefings allow the Board to assess
the significant ESG risks to the Company’s
short and long term value. They also
informed the Board as to the Company’s
compliance with the new requirements
effective for this reporting year.
How progress is driven and
performanceoverseen
In light of the increasing focus on ESG
matters by stakeholders, and its importance
in relation to Group strategy and operations,
the Board decided during the year that ESG
oversight would be the responsibility of the
full Board, in order to ensure that all of the
Executive Directors are involved in the
considerations and can then drive the
necessary action and any change through
the organisation. The Nomination and
Governance Committee still has an important
role to play in some key areas of ESG and
these are described more fully in the
Nomination and Governance Committee
report on pages 89 and 93.
The financial implications for the Company
ofESG are overseen by the Audit Committee
as part of its review of the annual financial
statements, as described in more detail on
pages 98 to 104. This includes financial
impacts from climate change which are
reported in compliance with the TCFD, as set
out on page 50.
The implementation of ESG initiatives across
the Group is led by the Chief Executive and
the GMT.
Social and governance aspects of ESG are
considered ’business as usual’ and this is
evident in our key performance indicators
and stakeholder interaction.
Independent performance indicators
The Board is aware of the increasing level
ofinvestor interest in climate change risk
andthat consideration is being given when
reassessing risk and asset values to reflect
this in revised capital allocations. It is
therefore pleasing to be able to report that
the Company’s commitment to ESG and
progress, particularly in respect of our
sustainability initiatives, is being recognised,
as the Company:
– Is a constituent of the Dow Jones
Sustainability Europe Index and
FTSE4Good
– Is included in the S&P Sustainability
Yearbook 2022
– Has received an AA rating from MSCI
– Has received an ESG Risk Rating of Low
from Sustainalytics
– Is a member of Next Generation, the
sustainability benchmark for UK
housebuilders, ranking third and
receivinga Gold Award for 2021
– Discloses performance to CDP and
received the following scores: CDP
Climate Change A- (2020: B), CDP Water
Security B (2020:B), and CDP Forests B-
for forest commodities and deforestation
(2020: B)
– Is assessed to be at level 2 in the latest
update of the Institutional Shareholder
Services (ISS) Governance Quality Score
for the Company’s ESG performance,
indicating a low level of comparative risk
for governance, including the lowest level
of comparative risk for the key areas of
Board structure, compensation, and
shareholder rights
New reporting
The Board welcomed the Policy Statement
and associated guidance issued by the
Financial Conduct Authority setting out
details of how greater reporting inthis area
is mandatory for this and future reporting
periods under the Listing Rules. The
Company’s new reporting in this area is set
out on pages 48 to 55 of this Annual Report;
and our continued disclosure of performance
against criteria identified for oursector by the
Sustainability Accounting Standards Board,
appears on pages 56 to 57.
Further details of ESG risks and value
enhancement pursuit appear on pages
48 and 49 and in the Sustainability
Supplement and ESG Addendum 2021,
which is available on our website at
taylorwimpey.co.uk/corporate/sustainability
79Taylor Wimpey plc Annual Report 2021
Advice available to the Board
All Directors have access to the advice
andservices of the Secretary and Company
Secretariat team. The Board has an
established procedure whereby Directors
may take independent professional advice
atthe Company’s expense where they judge
it necessary to do so in order to discharge
their responsibilities as Directors.
Health, safety and environment
The Board’s continuing commitment to
conducting its operations to high standards
of health, safety and environmental
management is demonstrated by receipt of
detailed reports on health, safety and
environmental matters as the first substantive
item at each Board meeting. More details, on
these and other initiatives in these areas, can
be found in the stakeholders section on
pages 34 to 47, in our Sustainability
Supplement and ESG Addendum for 2021
and the Company’s detailed carbon
reporting, as set out on page 55.
Diversity
As part of our ESG agenda, the Company
is committed to supporting diversity and
our policy is to appoint or promote, as
appropriate, the best person for the role
in question, without taking account of
factors such as background, age, gender,
ethnicity or disability. The policy has been
reinforced through training sessions on
unconscious bias for management teams
throughout the Company’s business units
and its head office functions.
More information can be found on page 93.
Management
Progress in achieving the Group’s strategy
is reviewed at appropriate Board meetings
through the year and is reported on pages
24 to 27. The Chief Executive has
responsibility for preparing, reviewing
and executing the strategic plans for the
Group and the annual budgetary process.
These are subject to formal review and
approval by the Board. The Chief Executive
and the Board conduct regular reviews of
actual results and future projections with
comparisons against budget and prior year
performance, together with various treasury
reports. Disputes that may give rise to
significant litigation or contractual claims
are monitored at each Board meeting,
with specific updates on any material
developments or new matters presented
by the Group General Counsel and
Company Secretary.
The Group has clearly defined policies,
processes and procedures governing all
areas of the business, which will continue to
be reviewed and refined in order to meet the
requirements of the business and changing
market circumstances.
There is a clearly identifiable organisational
structure and a framework of delegated
authority approved by the Board, within
which individual responsibilities of senior
executives of Group companies are identified
and can be monitored. These are set out in
the Operating Framework, which is available
for review online by any employee through
the Company’s intranet.
Defined authority limits continue to be
closelymonitored in response to prevailing
market conditions.
Every employee should have a set of
performance objectives agreed for each year
in addition to a personal development plan.
Theannual employee performance appraisal
process is competency based, with individual
objectives cascaded down from the
appropriate business objectives. The process
also identifies training needs to support
achievement of objectives.
Our governance related
documents
The following documents are available to
view on the Company’s website. These were
reviewed during the year, updated where
necessary, and relevant reporting against
these is provided to the Board or relevant
Committee.
Schedule of matters reserved for
theBoard
Division of responsibilities
Articles of Association
Terms of Reference of the Nomination
and Governance Committee
Terms of Reference of the
AuditCommittee
Terms of Reference of the
RemunerationCommittee
A number of further Board mandated
policies can be found on our website
www.taylorwimpey.co.uk/corporate/
our-company/governance/our-policies
80 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Board leadership and Company purpose continued
Operational oversight
Operational oversight of the Company’s
business is undertaken by the Chief
Executive leading the GMT. The GMT is the
most senior executive committee and its
membership is set out on pages 10 to 17.
The GMT is responsible for the day to day
management of the Company’s operations
and is responsible for making key strategic
decisions.
The Board also receives regular reports and
minutes from the meetings of the Company’s
Treasury Committee which is chaired by
theGroup Finance Director. The Treasury
Committee is responsible for monitoring
andreviewing the Company’s financial risks,
financial and treasury policies, financial
facilities, covenant compliance and insurance
programme in light of current and proposed
strategic and operational requirements. The
Treasury Committee is also responsible for
making recommendations to the Board or
GMT, as appropriate, regarding policy or
operational changes in these areas.
The Treasury Committee also continuously
monitors the operation of the Group’s
supplier payment policy and practices
andadvises the Board of any significant
variances, together with remedial actions
proposed or taken.
Risk
During 2021, the continued embedding
ofprevious enhancements made to the
Group’s risk management process around
enhanced reporting, tracking and monitoring
of risks, together with additional enhancements
made during the year, have further
strengthened the effective management of
the Principal, key and emerging risks, which
led to the addition of two new Principal Risks
as set out on page 61. Their associated
management and mitigation actions and
plans were reviewed and assessed by
Internal Audit as part of its programme of
work during the year. To achieve its
objectives in respect of risk management
and internal control for the year, the Audit
Committee undertook a number of actions,
as set out in more detail in the Audit
Committee Report on page 101.
Anti-bribery and anti-corruption
In line with the Bribery Act 2010, the
Company has written policies on its
zero-tolerance approach to bribery and
corruption. These policies are available for
review externally on the Company’s website
and internally on the intranet. The risk to the
Company of non-compliance would be
significant reputational damage, potential
financial penalties and the possible exclusion
from certain approved partner arrangements.
These risks are mitigated by training for
senior managers and by issuing an annual
reminder, which includes the current versions
of the policies, to all businesses and key
Whistleblowing
The Company’s Whistleblowing Policy is
supported by a clear process that includes
an independent third party whistleblowing
hotline that any person, including employees
of the Company, may, in confidence, raise
concerns about possible improprieties in
financial reporting, other operational matters
or inappropriate behaviours in the workplace.
All whistleblowing cases are investigated by
the Head of Internal Audit, Group HR
Director and / or the Group General Counsel
and Company Secretary depending on the
nature of the issue, and (where appropriate)
the Head of HSE.
Whistleblowing incidents and their outcome
are reported to the Board, on an anonymous
basis, in line with the Code. Whistleblowing
featured regularly on the Board’s agenda
during 2021, with formal half yearly reviews
and interim updating on significant matters,
which allowed the Board to regularly review
the adequacy of the Policy in line with its
requirement to do so under the Code. The
anonymous report that is provided to the
Board of concluded investigations is also
shared with the GMT.
The Policy includes the ability for workers to
make protected disclosures with regard to
matters arising under the Modern Slavery Act
with regard to our business and its supply
chain. Following a review of the process
andits administration, and the continuing
high-profile awareness campaign around
theCompany’s businesses and offices, the
Board is satisfied that the Policy and its
administration remain effective.
departments, which requires written
confirmation of continuing compliance and
maintaining the gifts and hospitality register.
As part of the annual reminder, senior
managers are required to review training
videos on anti-corruption, anti-money
laundering and competition law.
Ensuring there is no conflict
of interest
In order to assist Directors in complying
withtheir duty to avoid conflicts (or potential
conflicts) of interest the Board must first give
its clearance to potential conflicts of interest
(which includes directorships or
theirinterests in outside companies and
organisations) following which, an entry is
then made in the statutory register which
theCompany maintains for this purpose.
Whenever any Director considers that he or
she is, or may be, interested in any contract
or arrangement to which the Company is or
may be a party, the Director gives due notice
to the Board in accordance with the
Companies Act 2006 and the Company’s
Articles. In such cases, unless allowed by
theArticles, a Director is not permitted to
participate in any discussions or decisions
relating to the contract or arrangement.
The Board undertakes a regular review of
each Director’s interests, if any, outside the
Company. In addition, all proposed new
appointments and interests of Directors
arecleared in advance with the Board,
whichalso considers the impact on the time
commitments of the Director concerned.
Following these reviews, the Board remains
satisfied that all Directors are able to allocate
sufficient time to the Company to enable
them to discharge their responsibilities as
Directors effectively, and that any current
external appointments do not detract from
the extent or quality of time that the Director
is able to devote to the Company.
81Taylor Wimpey plc Annual Report 2021
Board activities
Strategy and execution Organisational capacity Financial oversight Governance and values
Business updates
– Received updates on the
Company’s land purchases
following the equity raise
during2020
– Received a customer
serviceupdate, with a focus on
the introduction of the New
Homes Quality Board and
Ombudsman service
– Reviewed an update on
theCompany’s supply
chainperformance
– Received a sales and
marketingupdate
– Received a demonstration of
thenew customer management
system platform
– Reviewed an update on the
Company’s IT systems and
cyber security activities
– Received regular updates on
HRmatters
COVID-19
– Monitored the impact of the
COVID-19 pandemic on the
Company and its stakeholders
ESG
– Oversaw the Company’s
ESGinitiatives
Compliance
– Reviewed and approved
the2020 Annual Report
andAccounts
Fire Safety
– Considered reports on fire
safetyand cladding matters
atevery meeting
CMA
– Received regular reports on
engagement with the CMA
regarding the Company’s
historic leasehold properties
Operational performance
– Received health, safety and
environmental reports at
everymeeting
– Received regional, divisional and
Company performance updates
– Received regular reports from
the Company’s brokers and
investor relations team
– Visited a regional business
unit office and three
development sites
National Employee Forum (NEF)
– Received updates from the
Board’s Employee Champion
following every NEF meeting
Employees
– Approved the Board’s Employee
Champion’s key activities
– Considered the results of
theemployee survey and
actions proposed
Succession planning
– The Board considered and
approved the recommendation
from the Nomination and
Governance Committee to
appoint the new ChiefExecutive
Financial resources
– Received a detailed review of
the Company’s financial
position, including borrowing
facilities and financial
alternatives, at each meeting
– Agreed the 2022 budget
– Reviewed financial performance
reports, including the availability
of financial, people and
supplychain resources,
at eachmeeting
Reporting
– Reviewed and approved, with
prior advice from the Audit
Committee, the full year andhalf
year results statements
– Reviewed and approved each
trading statement made during
the year
Excess capital returns
– Considered the Company’s
Dividend Policy and return of
excess capital to shareholders
Pensions
– Received updates on the
financial position of the
Company’s pension fund and
itsfunding objectives
Risk
– Received regular updates on the
Company’s risk management
– Conducted two assessments
ofrisk and progress made on
mitigating actions
Compliance
– Received regular updates
on relevant governance and
regulatory developments during
the year, from both internal and
externalsources
– Approved the Company’s fifth
Modern Slavery Act 2015
statement in 2021after
reviewing its operations and
supply chain
– Received two whistleblowing
updates and interim updates
as required
– Reviewed the Company’s 2020
Gender Pay Gap Report
– Reviewed the Committees’
Terms of Reference
AGM
– As a result of the pandemic,
held the 2021 AGM without
shareholders in attendance but
with the opportunity for
shareholders to pre-submit
questions or ask them live
– At the 2021 AGM, proposed the
appointment of PwC as the
Company’s external Auditors
which was approved by over
98% of votes
Board evaluation
– Oversaw the internally facilitated
Board evaluation, identifying
areas for further improvement
and agreed actions to be taken
Shareholders
– Sought shareholder and
institutional feedback, both at
the AGM and half year and full
year results presentations, in
addition to shareholder
engagement conducted by the
Chairman and Remuneration
Committee Chair
Stakeholders impacted
– Customers
– Employees
– Partners
– Investors
– Communities
Stakeholders impacted
– Customers
– Employees
– Partners
– Investors
Stakeholders impacted
– Employees
– Partners
– Investors
Stakeholders impacted
– Employees
– Partners
– Investors
– Communities
82 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Board leadership and Company purpose continued
How our Board monitors culture
The principles of good governance are
embedded throughout Taylor Wimpey and
manifest themselves in a number of different
ways, including the following:
– An absolute and non-negotiable
requirement throughout our business
toensure the health and safety of all of our
stakeholders that work at, or visit our
offices and developments
– The requirement to observe good
businesspractice, including abiding by
allapplicable laws and regulations that
relate to our business
– The provision of mandatory training to
allof our businesses on key legislation
andregulations relating to our areas
ofoperation
– Our Group-wide Operating Framework
control document setting out certain rules
of operation, common procedures, other
areas of best practice and delegated
authority limits
– A system of controls and checks
underpinned by a rigorous Internal Audit
Department and in turn overseen by the
Audit Committee
– Regular and embedded risk assessment
and monitoring processes
– Encouraging and investigating any
disclosures made either directly or through
an independent third party whistleblowing
hotline available to employees,
subcontractors, suppliers, customers
andthe general public
Health and safety
Our Annual Injury Incidence Rate per
100,000 employees and contractors was
214 (2020: 151), well below the HBF
Home Builder and Health and Safety
Executive construction industry averages.
The Board reviews health, safety and
environmental matters as the first
substantive item at each Board meeting.
During 2021, our health and safety team
delivered training to over 2,000 individuals
on sites and rolled out a new HSE
reporting system, improving data
records and insight into likely root
causes of incidents.
2021 Action: The NEF was consulted on
Health and Safety improvement strategy and
this area scored well in the Employee Survey
reported on page 41.
More information can be found on page 40.
Board and employee engagement
The Board’s Employee Champion, Gwyn
Burr, Non Executive Director, continued
to strengthen the availability and
frequency of communication between the
Board and employees. Gwyn attended
three NEF meetings throughout the year
and reported back to the Board on topics
discussed, as described in more detail
on page 85.
2021 Action: The two-way communication
channel was further strengthened by the
introduction of Local Employee Forums at
business unit level, to feed into the NEF.
More information can be found on pages
84 to 85.
Employee perception and retention
Our voluntary employee turnover of
19.0% (2020: 9.4%) has increased
following a very low year in 2020 as
a result of the uncertainty during the
COVID-19 pandemic.
Employee surveys
Following the results of the Company’s
latest employee survey, a benchmarking
exercise was undertaken, resulting in
salary increases for 1,307 employees in
addition to the 2% general salary increase
for all employees. We will continue to
benchmark key roles throughout the year
when necessary, to ensure that we
continue to offer a market-competitive
remuneration package.
2021 Action: Conducted an Employee Survey
and identified priorities which were acted
upon during 2021 and inform plans in this
area during 2022.
More information can be found on pages
26 to 27.
2021 Action: Initiatives in response to
feedback contained in the results of the 2021
Employee Survey, as described on page 26.
More information can be found on pages
26 to 27.
value’ and that culture should be the subject
of a continuous focus rather than only in
times of a crisis. Our Board is responsible for
defining and setting the Company’s culture,
values and standards from the top. Culture is
established by leadership and by example,
but this also needs to be underpinned by
clear policies and codes of conduct which
ensure that the Company’s obligations to its
shareholders and other stakeholders are
clearly understood and met.
The Board is led in these respects by the
Chairman, who ensures our Board operates
correctly, setting its own culture and, by
extension, that of the Company in its
operations and its dealings with all
stakeholders. The observance of that
culturethroughout business operations is led
by the Chief Executive and the GMT.
The Board reviews several important
indicators of the Company’s culture,
including those set out below.
Our Board considers that good governance
should not only be focused on how our
Board operates, but also on the culture
within which the Company’s employees
operate on a day to day basis in order to
achieve our purpose. We are proud of the
culture to ‘do the right thing’ at Taylor
Wimpey and see it as a key strength of the
organisation.
A healthy culture is important and we fully
agree with the Financial Reporting Council
(FRC) that it both ‘protects and generates
83Taylor Wimpey plc Annual Report 2021
Shareholders
The Board actively seeks andencourages
engagement with investors, including
itsmajor institutional shareholders and
shareholder representative bodies.
The Company has continued its longstanding
practice of engaging with its shareholders in
a proactive manner.
Chairman meetings
Irene Dorner held six meetings with key
investors and shareholder representative
bodies throughout 2021, representing
22.3%of our issued share capital. A variety
of key themes were discussed such as
ESGand succession.
2021 Annual General Meeting
Shareholders were not able to attend
the2021 AGM in person as a result of
theCOVID-19 pandemic.
In a similar way to the 2020 AGM, the
Boardput in place arrangements for
shareholders to listen to the business of the
meeting by dialling into an audiocast facility.
Shareholders were also given the opportunity
to ask questions in real time on the call.
Alternatively, they were able to submit
questions in advance of the meeting to the
Company Secretary by email and these were
answered during the meeting.
The Company also took the opportunity to
amend its Articles of Association to allow
hybrid meetings in the future, so that if
shareholders are unable to attend meetings
again in the future, they will be able to vote
inreal time.
The Board is looking forward to reverting to
an ‘in person’ AGM in 2022, which will allow
our Board members to meet and speak
directly with our shareholders.
Employees
The Board recognises the importance
ofengaging with the workforce and has
therefore adopted two of the methods
setout in Provision 5 of the Code.
The Board’s Employee Champion
Gwyn Burr was the Board’s Employee
Champion throughout 2021 and is
responsible for championing the ‘employee
voice’ in the boardroom and strengthening
the link between the Board and employees.
During the year, the Board took the
opportunity to define the main activities of
the Board’s Employee Champion, and these
can befound on page 87 and in the Division
ofResponsibilities document on the
Company’s website.
Gwyn regularly attends the NEF, attending
three meetings during 2021. After each
meeting she provides an update to the
Board on the items discussed during the
meeting. The topics covered during these
meetings can be found in the NEF section
opposite. Gwyn and the Chairman, via the
Secretary, have the opportunity to suggest
agenda items at each NEF meeting, and the
Board’s Employee Champion ensures that
they feed back any areas of concern raised
by the NEF members. During 2021, it was
agreed that the standing ‘open discussion’
item on eachNEF agenda was moved to the
start of the meeting so that NEF members
could raise any concerns without the risk of
running out of time in the meeting.
Thischange has resulted in a significant
increase in discussions and debate.
Following engagement with employees at the
NEF, Gwyn suggested and it has been
agreed that in 2022 the Board’s Employee
Champion will meet with small groups of
junior to mid-level employees in each division
to gather feedback directly from employees
outside of the NEF in an informal setting and
without senior management being present,
to further encourage openness. These
meetings will be called ‘Employee Focus
Groups’ and will include both site and office
based staff. The sessions will be facilitated
by the Employee Champion with the support
of the Company Secretary and there will be
no set agenda with participants being
encouraged to feed back on any topics
theychoose to.
The Employee Champion will feed back to
the Chairman and Chief Executive shortly
after each meeting to ensure any area of
concern can be appropriately addressed
quickly, and will also provide an update
to the Board.
Investor relations programme
The Company operates a structured investor
relations programme, based around formal
announcements and publications of the full
year and half year results. The Board is kept
regularly apprised on the investor relations
programme and receives a detailed report
ateach meeting.
The Company’s brokers also attend Board
meetings from time to time as required to
give their perspective on institutional
shareholder sentiment.
Remuneration consultation
The Remuneration Committee also wrote
to14 shareholders and three institutional
shareholder advisers, holding in aggregate
50% of our issued shares, to ask for
feedback and offered the opportunity for a
conversation on the proposed remuneration
arrangements for the Executive Directors
for2022 and the proposed remuneration
arrangements for Pete Redfern when he
leaves the business.
84 Taylor Wimpey plc Annual Report 2021
Governance
How the Board engaged with shareholders and employees
during the year
Corporate governance: Board leadership and Company purpose continued
The NEF
The NEF has been in place for over four
years and continues to be effective. The NEF
is chaired by Tim Betts, regional Managing
Director of our South East business unit, who
has confirmed that there continues to be a
healthy level of debate which has led to key
changes in key processes and procedures,
such as providing input on proposed action
plans following the employee survey.
All NEF members participated in a number
of training courses aimed at building their
confidence and encouraging them to look
beyond their region and consider issues from
a national perspective.
During 2021 the following key
activities took place:
– The NEF membership was extended to
ensure that it had representation from all
parts of the business.
– Received briefings on key development
areas in the business, including an update
on land acquisition following the equity
raise, implementation of the Environment
Strategy, and the employee survey.
Employee Consultative Committees had
been established for over 10 years at each
business unit, however it was considered
that their size and structure did not
appropriately reflect the different functions
within the business. The structure of these
Committees was reviewed during 2021 to
Local Employee
Forum
National Employee
Forum
Employee Focus
Groups (new in 2022)
Group Management Team Board’s Employee Champion
Taylor Wimpey plc Board
ensure that each local group had
representation that mirrors the business
structure and provides flexibility for additional
members as required. These updated forums
are referred to as ‘Local Employee Forums’
(LEF), comprising of a member from each
function and department or a representative
for groupings of smaller departments.
Each LEF is responsible for communicating
feedback from the NEF to their business
unit and to feed any areas of concern up
to the NEF. This will strengthen the input
into the NEF and the Board from the
Company’s employees.
More information on how the Board engaged
with our other stakeholders and key decisions
made by the Board whilst considering our
stakeholders can be found on pages 36 and 37.
85Taylor Wimpey plc Annual Report 2021
A clear and effective structure
There is a clear and effective division of
responsibilities between the Board and the
Group Management Team (GMT) which
isakey foundation of the Company’s
stronggovernance.
We believe that a successful company is
ledby an effective and entrepreneurial board,
whose role is to promote the long term
sustainable success of the company,
generating value for all of the company’s
stakeholders. To support this principle, the
Board has established a framework of
delegated financial, commercial and
operational authorities which define the
scope and powers of the Chief Executive
and the GMT.
In line with the Code, the clearly defined
rolesand responsibilities of the Chairman,
Chief Executive and Senior Independent
Director have been reviewed during 2021
and have been signed by Irene Dorner, Pete
Redfern and Robert Noel in their respective
capacities. In addition, the main activities of
the Board’sEmployee Champion have been
included in the document in 2021.
– Provides strategic and entrepreneurial leadership within a framework of strong governance and effective controls
– Responsible for defining and setting the Company’s purpose and values which in turn influence its culture
– Defines which matters are reserved for the decision of the Board
– Oversees the Company’s ESG initiatives
– Establishes the Company’s risk appetite and oversees processes designed to ensure compliance
– Reviews the Whistleblowing Policy and associated investigations and outcomes
– Ensures effective engagement with shareholders and other stakeholders
– Responsible for the day to day management of the Company’s key strategic and operational activities
More information about our GMT members can be found on pages 10 to 17 and on our website.
Chief Executive and the GMT
The Board
Chaired by Humphrey Singer
– Monitors, reviews and advises the Board
ontheCompany’s financial reporting and
relatedannouncements
– Undertakes a detailed half yearly review of
theCompany’s risk assessment and mitigation
processes and outcomes, and makes
recommendations to the Board
– Oversees the relationship with the Company’s
external Auditors
– Oversees the reporting of Internal Audit
investigations and reviews the implementation
ofany changes required
– Monitors the continuous improvements in
information technology, data protection and
resilience to cyber attacks
Chaired by Irene Dorner
– Reviews the balance, diversity, independence
and effectiveness of the Board
– Oversees the candidate profile shortlisting
criteria, interview, selection and appointment of
new Directors tothe Board
– Reviews the succession and contingency
planning for the Board, its Committees, and
across the Company’s senior positions
– Reviews the training and development plans
forthe Board, its Committees, and across the
Company’s senior positions
– Reviews, sets targets for and drives the
Company’s equality, diversity and inclusion
strategy
– Reviews the Company’s corporate governance
practices and procedures
– Reviews AGM resolutions and makes related
recommendations to the Board for approval
Audit Committee Nomination and
GovernanceCommittee
Remuneration Committee
How we are governed
Chaired by Gwyn Burr
– Advises the Board on remuneration policy at
executive and senior management level
– Ensures that remuneration is geared to the
enhancement of shareholder value
– Ensures that targets are appropriate and
support the delivery of the strategy, whilst
appropriately limiting risk taking and reflecting
ESG considerations
– Ensures that rewards for achieving or exceeding
agreed targets are not excessive
– Promotes the alignment of executive interests
with those of the Company’s shareholders
andwith the Company culture, including by
setting executive shareholding guidelines
andstipulating post-employment holding
requirements for certain employees
– Reviews the remuneration arrangements
available to the wider workforce and considers
these when setting the executive remuneration
86 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Division of responsibilities
Role of the Board
Whilst all Directors share collective responsibility for the activities of the Board, we have defined the roles in more detail as governance
considerations have developed over time. These roles and responsibilities are:
Chairman
– Lead the Board effectively to direct the Company
– Chair Board meetings and set Board
meetingagendas
– Ensure high standards of corporate governance
– Demonstrate objective judgement
– Build a well balanced and highly effective Board
– Promote a Board culture of openness and debate to
encourage constructive challenge
– Facilitate and promote constructive Board relations
and communication
– Ensure Directors receive accurate, timely and
clearinformation
– Set the Company’s cultural tone from the top
– Enable an annual review of the Board’s effectiveness
– Engage individually with the Directors, as required
– Ensure an appropriate induction and development
programme is in place for individual Directors
– Agree the Chief Executive’s personal objectives
– Ensure there is effective communication and debate
with shareholders
– Maintain an appropriate balance between the
interests of stakeholders
Chief Executive
– Develop and implement the Company’s strategy
– Recommend the strategic plan and related
annualbudget
– Ensure the effective day to day running of
theCompany
– Ensure coherent leadership of the Company
– Regularly review the organisational structure,
including developing the GMT and planning
forsuccession
– Manage the Group’s risk profile and establish
effective internal controls
– Ensure the Chairman and the Board are kept
advised and updated regarding any key matters
– Maintain relationships with investors and advise the
Board accordingly
– Set the Company’s culture from the top, particularly
with regard to compliance and sustainability
– Agree the Company’s annual budget proposal, prior
to formal agreement with the Board
– Oversee the customer service, sales and marketing,
and sustainability functions
Group Finance Director
– Manage the Company’s operational financial affairs,
including any treasury and tax matters
– Oversee the finance, information technology and
pension departments
– Oversee the Company’s risk profile, in conjunction
with the GMT
– Agree the Company’s annual budget proposal from
a financial perspective, prior to formal agreement
with the Chief Executive and then the Board
Group Operations Director
– Manage the Company’s operational development
process, from land acquisition, through planning
applications, to design and production
– Oversee the commercial department, operational
supply chain and logisticssupport
– Oversee the Company’s risk profile, in conjunction
with the GMT
– Agree the Company’s annual budget from an
operational perspective, prior to formal agreement
with the Group Finance Director, Chief Executive
and then the Board
Senior Independent Director
– Act as a sounding board for the Chairman
– Chair Board meetings in the absence of
theChairman
– Act as intermediary for the other Directors,
whennecessary
– Lead the evaluation of the Chairman’s performance
– Lead the search for a new Chairman,
whennecessary
– Be available to shareholders who wish to discuss
matters which cannot be resolved otherwise
Non Executive Directors
– Provide effective and constructive challenge to the
Executive Directors
– Assist in developing and approving the Company’s
strategy
– Serve on Board Committees
– Provide advice and experience to the Company
– Keep abreast of shareholders’ views
Employee Champion
– Responsible for championing the ‘employee voice’ in
the boardroom and strengthening the link between
the Board and employees
– Gather the views of employees through a variety of
formal and informal channels and identify any areas
of concern
– Liaise with Senior Management on a regular basis
on matters of employee engagement and culture
Group General Counsel and Company Secretary
– Advise the Board on matters of corporate
governance, compliance and legal issues
– Responsible for all legal and compliance matters
relating to the Company
– Provide support to the Chairman and the Non
Executive Directors
– Ensure effective support to the Board during
meetings and whilst setting agendas
– Keep abreast of shareholders’ views
– Oversee the Company’s Secretariat and
LegalDepartments
87Taylor Wimpey plc Annual Report 2021
Dear Shareholder
As Chairman of the Nomination and
Governance Committee (the Committee),
I am pleased to present the 2021 report of
the Committee on behalf of the Board.
Board composition
2021, and the beginning of 2022, have
introduced a new period of transition for
our Board and the Company following
the announcement that Pete Redfern,
Chief Executive, would be leaving the
Company following nearly 15 years
of outstanding service.
We have undertaken a formal, rigorous and
transparent recruitment process to appoint
a successor and we are very pleased to
announce the appointment of Jennie Daly,
our Group Operations Director, as the
Company’s next Chief Executive following
the conclusion of the 2022 Annual General
Meeting (AGM) on 26 April 2022. More
information about this process can be found
on page 90.
Nomination and Governance
Committee report
The appointment of Scilla Grimble and
JiteshGadhia as Non Executive Directors on
1 March 2021 enhanced the range of skills
and diversity on our Board and Committees.
More information about Scilla and Jitesh’s
recruitment and induction process can be
found on page 91.
However, following our announcement that
both GwynBurr and Angela Knight, Non
Executive Directors, will be stepping down
from the Board on 26 April 2022 due to
changes in their commitments to other
Boards, a recruitment process is underway
to identify new Non Executive Directors to
join our Board. Further details of the process
and the skills and expertise we are seeking
can be found on page 91.
During 2021, the Committee considered the
balance of skills and experience of the Non
Executive Directors, their time commitments
and succession plans and at that time
considered the balance to be appropriate.
This balance has been reassessed whilst
preparing for the recruitment of the new
Irene Dorner
Chairman of the Nomination
and Governance Committee
Main objectives
– To ensure there are formal, rigorous
and transparent procedures for the
appointment of new Directors to the
Board, its Committees and other senior
positions in the Company
– To keep the Board’s corporate
governance arrangements under review
and to ensure that both the Company and
the Board operate in a manner consistent
with corporate governance best practice
2022 objectives
– Ensure an effective induction programme
takes place for the new Chief Executive
– Ensure a formal, rigorous and transparent
recruitment process for the appointment of
new Non Executive Directors takes place,
followed by an effective induction
programme
– Continue to drive the equality, diversity
and inclusion agenda to make progress
towards the Company’s targets and
to ensure it is embedded within the
Company’s culture and aligned to
the strategy
– Continue to monitor succession and
contingency plans across the Company
– Ensure the Company continues to have the
necessary level of skills and leadership on
the Board and Group Management Team
(GMT) to effectively deliver the strategy
– Continue to develop the Company’s
corporate governance processes
and to maintain corporate governance
best practice
Non Executive Directors and will be kept
under review during 2022.
Corporate governance
The Committee’s objectives include oversight
of the Company’s corporate governance
practices, and we have successfully
undertaken this role during 2021 through
regular updates to the Committee and
monitoring of the proper operation of the
Company’s governance processes.
Throughout 2022 we will continue to develop
these processes to ensure that corporate
governance best practice is complied with at
all levels of theorganisation.
Board evaluation
During 2021, the Board’s annual internally
facilitated evaluation was successfully
undertaken by myself with the assistance of
the Group General Counsel and Company
Secretary. The Committee assessed the
progress made towards addressing the key
points raised as part of the 2020 externally
facilitated Board evaluation. Following the
conclusion of the 2021 Board evaluation, a
number of key actions to be taken during
2022 were identified and progress towards
these will be reported in the 2022 Annual
Report and Accounts.
I am proud of the results of the evaluation
and consider our Board to be operating well
with a healthy balance of discussion, debate
and expertise. More information about the
Board evaluation process, key actions and
progress made can be found on page 92.
Nomination and Governance
Committee summary
The Committee is chaired by Irene Dorner,
Chairman of the Board. The Committee
consists of six Non Executive Directors
andthe Chairman of the Board.
Committee meetings were also attended,
by invitation, by the Chief Executive, Group
Finance Director, Group Operations Director,
Group General Counsel and Company
Secretary, Deputy Company Secretary,
Assistant Company Secretary, Group HR
Director, Head of HR (Strategy), and the
National Employee Forum (NEF) Chairman.
Committee members Meetings attended
Irene Dorner (Chair) 5/5
Robert Noel 5/5
Gwyn Burr 5/5
Jitesh Gadhia
(a)
4/4
Scilla Grimble
(a)
4/4
Angela Knight 5/5
Humphrey Singer 5/5
(a) Appointed to the Committee on 1 March 2021.
88 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Composition, succession and evaluation
Committee activities during 2021
Topic Activity / review
February
2021
May
2021
June
2021
October
2021
December
2021
Succession
planning
Considered performance, succession and contingency
planning for the Executive Directors and all employees
Received an update on the GMT’s performance and
continued development
Chief Executive succession planning
Equality,
diversity and
inclusion
Considered the Company’s approach to equality, diversity
and inclusion, including new and revised policies and
progress made in these areas
ESG Received an update on ESG, including a progress update
on the Company’s Environment Strategy and approval of
the Company’s Water Policy
National
Employee
Forum (NEF)
Received an update on the enhanced structure and role of
the Board’s Employee Champion
Received an update from the NEF Chairman
Annual Report
andAccounts
Reviewed and approved the Committee’s report in the
2020 Annual Report and Accounts
Reviewed and approved the 2021 Notice of Annual
General Meeting
Governance Recommended to the Board the approval of the Directors’
Conflicts of Interests Register
Received an update on the Company’s corporate
governance activities
Reviewed and approved the Matters Reserved for the
Board and Division ofResponsibilities documents
Agreed the policies published on the Company’s website
Reviewed and approved the approach to the 2021 Board
evaluation process
Reviewed and recommended to the Board the
amendments made to the Company’s Articles
ofAssociation
Reviewed the independence of the Non Executive Directors
Recommended the renewal of a Non Executive Director’s
three year term
Reviewed and recommended to the Board a fee for the
role of the Board’s Employee Champion
Committee
governance
Reviewed the Committee’s performance and compliance
with its Terms of Reference during 2020
Reviewed and agreed the Committee’s annual plan for 2022
The Committee’s annual performance
evaluation concluded that the Committee
remains effective and the review of the
Committee’s Terms of Reference concluded
that they remain appropriate and in line with
best practice. The Committee’s Terms of
Reference can be found on our website.
Environmental, social and governance
(ESG)
In 2021, ESG remained a key focus for the
Committee and the Company’s progress
hasbeen recognised by a number of
accreditations, including being placed third
inthe Next Generation benchmark, and
continuing to be a constituent of the Dow
Jones Sustainability Europe Index and the
FTSE4Good Index Series. Responsibility
for oversight of the Company’s ESG
initiatives has now been handed over to
the Board and more information as to the
rationale for this change and our plans for
2022 can be found on page 79.
Equality, diversity and inclusion
Throughout 2021, and continuing into
2022,equality, diversity and inclusion remain
a key priority for the Committee and I am
proud of our continued progress in this area.
During 2021, the Committee oversaw the
development and implementation of the
Company’s revised Equality, Diversity and
Inclusion Policy. More information about the
revised Policy and actions taken in this area
can be found on pages 93 to 97.
The Committee looks forward to supporting
Jennie as she takes on the role as the
Company’s Chief Executive during 2022 and
also to the recruitment and induction process
of our new Non Executive Directors. I believe
these new appointments to the Board will
allfurther enhance our strong culture of
corporate governance and ensure our Board
and Committees continue to operate
effectively for the benefit of our stakeholders.
Irene Dorner
Chairman of the Nomination
and Governance Committee
2 March 2022
89Taylor Wimpey plc Annual Report 2021
would be based on merit and objective
criteria. The Committee requested Egon
Zehnder to conduct an internal and external
market scanning exercise and produce a
diverse longlist of candidates for consideration
against the role profile by the Committee.
After considering the longlist the Committee
produced a shortlist of preferred candidates.
A four phased approach to the interview
process was agreed, consisting of an
interview with the Chairman and Senior
Independent Director; a separate interview
with the Audit and Remuneration Committee
Chairs; an additional interview with the
Chairman; and finally a presentation to, and
a Q&A opportunity for, the Committee. The
external candidates were also invited to meet
with the Group Finance Director. Following
each interview, feedback was provided
tothe Chairman and working hub; and
discussed by the whole Committee at
itsmeetings during the process. A final
meetingwas held in February 2022 for the
Committee to discuss their views and agree
a recommendation to the Board.
Following approval by the Board, on
7February 2022 it was announced that
Jennie Daly would be appointed as the
Company’s new Chief Executive from the
conclusion of the AGM on 26 April 2022.
More information about Jennie, her
experience and previous roles can be
foundon pages 8 and 74.
Jennie and Pete will work closely on a
thorough handover process ahead of
Jennie’s formal appointment. More
information on the handover process
will be reported in the Company’s 2022
Annual Report and Accounts.
Committee purpose
and responsibilities
The Committee is responsible for:
– Maintaining formal, rigorous and transparent
procedures for Board appointments.
– Ensuring all Board appointments are
made on merit and assessed against
objective criteria.
– Overseeing and advising the Board on the
identification, assessment and selection of
candidates for appointment to the Board.
– Regularly reviewing succession planning at
senior levels and contingency planning and
procedures across the Company.
– Guiding the Board on diversity
considerations and driving the Company’s
equality, diversity and inclusion agenda.
– Regularly assessing the Board’s
composition, balance, diversity,
experience, skill sets and individual
Directors’ time commitments.
– Leading the annual Board
evaluation process.
– Regularly briefing the Board on corporate
governance and compliance considerations
and developments.
Chief Executive succession
planning and recruitment
process
In December 2021, it was announced that
Pete Redfern would be stepping down from
his role as the Company’s Chief Executive
after nearly 15 years of outstanding service in
the role.
The Committee, led by Irene Dorner as
the Committee Chairman, undertook the
search and recruitment process for Pete’s
successor. An additional Committee
meeting, outside of the usual meeting
calendar, was held in December 2021 to
ensure the careful management and
execution of the recruitment process. A small
working hub was formed at the outset
consisting of the Chairman, Senior
Independent Director, Group HR Director
and Group General Counsel and Company
Secretary. The working hub was responsible
for the day to day oversight of the
recruitment process to ensure progress was
being made against the agreed plan.
The Committee appointed Egon Zehnder
in 2021 to assist with the search process.
Egon Zehnder confirmed that they had no
other connection to the Company or any
Director other than as appointed by the
Company to assist with executive and non
executive appointments.
Key to the recruitment process was the
Committee’s development of the role profile
to ensure that the process would identify
the best candidate and the appointment
“I am delighted that,
following a thorough
recruitment and selection
process, the Board has
appointed Jennie Daly as
the Company’s new Chief
Executive. Jennie has
extensive experience in
the housebuilding sector
and has demonstrated
exceptional leadership and
a razor-sharp operational
focus. Her strong focus on
execution, combined with
her customer and people-
focused skills, set her apart
from the other candidates
we were considering. I look
forward to continuing to
work closely with her as
we execute our next phase
of growth.”
Irene Dorner
Chairman
90 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Composition, succession and evaluation continued
Board balance and skills
As at 31 December 2021, six out of ten
Board members were Non Executive
Directors, and the other members of the
Board were the Chairman and three Executive
Directors. The Committee considers this
balance to be appropriate and this will be
kept under review to maintain compliance
with corporate governance best practice.
During 2021, the Committee considered
thestructure, size, diversity, and composition
of the Board, as well as the skills, knowledge
and experience of each Board member and
confirmed that the appropriate balance has
been maintained to provide constructive
challenge as well as guidance and support
inorder to continue to deliver the
Company’sstrategy.
As announced in early 2022, Angela Knight
and Gwyn Burr will be stepping down from
the Board at the conclusion of the 2022
AGM. The Committee is leading the
recruitment process, supported by an
experienced executive search firm, for
additional Non Executive Directors to join the
Board. The Committee recognises this as an
opportunity to replace Gwyn’s customer
expertise and insights and to add to the
Board’s operational experience. Further
information about the recruitment and
appointment process will be included in the
2022 Annual Report and Accounts.
Board appointments
The Committee ensures that all
appointments to the Board are subject to
formal, rigorous and transparent procedures,
are based on merit and objective criteria and
promote diversity of gender, social and
ethnic background, and cognitive and
personal strengths.
On 1 March 2021, Scilla Grimble and Jitesh
Gadhia were appointed as Non Executive
Directors and more information about the
appointment process followed can be found
in the 2020 Annual Report and Accounts.
More information about the recruitment
process for the Chief Executive role can be
found opposite.
Succession planning
In order to ensure there are effective
succession plans in place for the Board,
GMT and heads of functions levels within the
Company, the Committee has visibility of a
wide range of employees who have been
identified as potential succession candidates
in the short, medium and long term. The
Committee reviews the Company’s
development programmes for these
individuals to ensure they have appropriate
development plans in place.
The appointment of Jennie Daly as the
Company’s new Chief Executive is a good
example of our succession plans in action.
More information about Jennie’s recruitment
process can be found opposite.
One aspect of individuals’ development plans
is for individuals below Board level to be
given the opportunity to attend Board
meetings to present on specialist topics,
project work and specific divisions’
performance. This not only provides valuable
exposure to the Board for these individuals,
but is also valuable to the Board and
Committee when assessing the strength of
the succession plans in place. During 2021, a
number of individuals were invited topresent
to the Board on topics such as customer
service, supply chain, and the sales and
marketing team’s roll out of our new
customer relationship management system.
The Company also operates a Group Talent
Management Board which is chaired by
theChief Executive and comprises of the
Divisional Chairs, Group Managing Director
of Strategic Land and HR representatives.
The Group Talent Management Board,
supported by the Divisional Talent
Management Boards, regularly review
succession plans and related development
requirements across the operational roles
within the Company. Actions taken to
support succession plans include the
development of career paths linked to
experience, exposure and education, an
assessment and development centre, and
the promotion of the Company’s mentoring
scheme.
Contingency planning
During 2021, the Committee reviewed the
Company’s contingency cover to ensure
that the Company can respond to the
unforeseen unavailability of any member of
the Board, the GMT or other senior roles
without impacting the current and long term
performance of the Company. Following
this review, the Committee was confident
that all key roles have an appropriate
contingency plan in place.
Non Executive Director
induction process
Following the Committee’s review of the
Board and Committee composition and a
formal and rigorous recruitment process,
on1 March 2021, Jitesh Gadhia and Scilla
Grimble were appointed to the Board.
The importance of an effective induction
isrecognised by the Committee. The
Chairman is responsible for ensuring
allnewly appointed Directors, including
NonExecutive Directors, receive a formal
induction. The induction process includes
training, as appropriate, on the Company’s
strategy, operations, directors’ duties, the
housebuilding sector, meetings with key
members of senior management and heads
of functions, external advisors, site visits
andbusiness unit visits.
Jitesh and Scilla were provided with a
comprehensive pack of documents,
including information about the Company
“The induction
process was
thorough, highly
valuable, and
provided a useful
insight into the
Company’s
operations.”
Jitesh Gadhia
Non Executive Director
and the Board, broker reports on the
Company and the housebuilding sector, and
information on directors’ duties.
In addition, Jitesh and Scilla undertook the
following induction activities during 2021:
– Meetings with each of the Chairman,
Executive Directors and NonExecutive
Directors
– A meeting with the Group General Counsel
and Company Secretary
– Meetings with members of the GMT and
heads of functions
– A meeting with the Company’s external
Auditors
– Meetings with the Company’s key advisers
and brokers
– Visited a regional business unit office and
sites
– Visited a site where the new standard
house type range was available to view
91Taylor Wimpey plc Annual Report 2021
2020 recommendations Actions taken during 2021
Review Board paper structure and issue
guidance on drafting Board papers.
The Chief Executive’s Board report paper has been revised to include operational detail
asappendices.
Recruit additional Non Executive Director(s). On 1 March 2021, Jitesh Gadhia and Scilla Grimble were appointed to the Board.
Focus on ESG matters. ESG was added to the responsibilities of the Nomination and Governance Committee and
subsequently handed to the Board to oversee.
The Board and the Nomination and Governance Committee considered ESG matters during
2021 and more information can be found on pages 79, 82 and 89.
Regular Board training / information sessions. During 2021, several Board training and teach-in sessions were held, on topics including:
– ESG
– Customer service
– Sales and marketing, including a demonstration of the Company’s new Microsoft
Dynamics customer relationship management system
2021 recommendations Actions to be taken during 2022
Completion of a rigorous and thorough
recruitment process to appoint the next Chief
Executive and prepare a comprehensive
induction programme.
The Company has announced the appointment of Jennie Daly as the Company’s Chief
Executive from the conclusion of the 2022 AGM on 26 April 2022. A thorough handover
process from Pete Redfern is underway and the Committee will oversee an effective
induction once Jennie Daly has started in her new role.
Review the role of the Board’s Employee
Champion and consider ways to further
strengthen engagement with employees.
The Board’s Employee Champion role has been reviewed and the Board has approved the
role’s main activities. Additional engagement sessions, Employee Focus Groups, will be
arranged for the Board’s Employee Champion outside of the NEF and without senior
management being present to further encourage openness.
Further develop the Board’s oversight of the
Company’s ESG priorities and determine
waysto measure ESG progress consistently.
The Board will consider how to monitor our ESG progress and how to improve our
communications in this area to ensure this progress is visible to all of our stakeholders.
Arrange additional site visits for
Board members.
Additional site visits will be offered to Board members, both on a group and individual basis
as appropriate.
Board evaluation
In line with the Code, there should be a formal and rigorous annual evaluation of the performance of the Board, its Committees, the Chairman
and individual Directors. As the2020 Board evaluation was undertaken externally, during 2021 the annual evaluation was undertaken internally
by the Chairman and the Group General Counsel and Company Secretary.
The 2021 Board evaluation focused on the following areas:
– Board leadership
– Strategy, culture and purpose
– Board composition and succession planning
– The Board’s Committees
– Stakeholder engagement
– Support for the Board
The following process was followed to complete the 2021 Board evaluation:
1. Each Director was asked to participate in the Board evaluation by completing a questionnaire
2. Five members of senior management who regularly present to the Board or one of its Committees were invited to provide feedback
to the Board
3. Responses to the questionnaire were collated by the Group General Counsel and Company Secretary and shared with the Chairman
on a non-attributable basis
4. Any comments specifically relating to the Chairman were shared with the Senior Independent Director
5. The Non Executive Directors met without the Chairman to review the Chairman’s performance based on the non-attributable feedback
6. Each Non Executive Director was invited to have an optional one to one discussion with the Group General Counsel and Company
Secretary to provide more detailed feedback
7. Feedback was shared and discussed by the Board at one of its meetings
8. The Board approved an action plan to beimplemented during 2022 which willaddress the key comments made throughout
the evaluation process
The overall conclusion of the internal Board evaluation was that the Board is considered to be operating well with a healthy balance
ofdiscussion, debate and expertise.
92 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Composition, succession and evaluation continued
Governance
Following the expansion in 2020 of the
Committee’s responsibilities to take the
lead in respect of the Board’s corporate
governance, during 2021 the Committee
hascontinued to oversee the embedding
ofgood governance practices at all levels of
the Company and its operations. The
Committee also acts as the first filter on all
governance developments, and continues to
make the appropriate corporate governance
related recommendations to the Board. This
additional responsibility has been embraced
by the Committee and has been considered
a positive change which has allowed the
Committee to dedicate time and attention
specifically to governance matters.
More information about the Committee’s
activities in relation to corporate governance
can be found in the Committee activities
table on page 89.
During 2021 a working party, comprising
representatives from the Company
Secretariat and Internal Audit departments,
undertook a number of activities in order
tosupport the Committee to evolve the
Company’s governance processes to
become more resilient, efficient and effective.
These activities included:
– Reviewed and completed a gap analysis
on the Matters Reserved for theBoard.
– Reviewed the Company’s policies and
publication of them on the Company’s
website.
– Confirmed that the Company’s delegated
authority framework remains appropriate.
Annual re-election to the Board
In line with the Code, each Director is
required to seek election or re-election,
as appropriate, at each year’s AGM.
The Committee is satisfied that each
Non Executive Director remains independent
in nature and did not identify any
circumstances that are likely to impair, or
could impair their independence. In addition,
the Committee is satisfied that the Chairman
met the independence criteria as set out in
the Code when she became Chairman.
The Committee also considers that each
Director is able to allocate sufficient time
todischarge their responsibilities to the
Company effectively. This not only included
Board and Committee meeting attendance,
but also preparation time for meetings, visits
to our operating businesses and other
additional time commitments that were
required during the year.
Accordingly, at the 2022 AGM, each
Director, except Pete Redfern, Angela Knight
and Gwyn Burr, irrespective of the date
of their appointment, will be submitted
for re-election.
Details of the resolutions to be proposed,
alongside supporting biographical details,
canbefound in the Notice of Meeting on pages
184 to 191.
Equality, diversity andinclusion
Equality, diversity and inclusion remained a
key focus area of the Company in 2021 and
this will continue in 2022.
Board diversity
It is recognised that boards generally
performbetter when they include the best
people from a range of backgrounds
andexperiences. When assessing the
composition of the Board, the Committee
recommends appointments and the Board
makes appointments based on skills,
experience and merit, but equality,
diversityand inclusion will continue to
bekeyconsiderations.
The Committee and the Board fully support
the FTSE Women Leaders Review which
seeks to improve the diversity of boards
andsenior leadership and sets the target of
33% of female representation on the Board
and the Leadership Team (comprised of
theGMT and their direct reports).
As at 31 December 2021
Percentage of plc Board positions
heldbywomen
Percentage of GMT positions held by
women
Percentage of Leadership Team
positions held by women
(a)
We recognise the need to make further
progress in the gender diversity of our
Leadership Team (as can be seen in the
graph below), however we are pleased to
note that female representation in the GMT
is 36%.
The Committee and the Board also
welcomes the Parker Review’s ‘Beyond
Oneby 21’ recommendation and can
confirm that the Company is in compliance
with this recommendation as at31
December 2021.
More information about the Committee’s
consideration of equality, diversity and
inclusion when considering the succession
of the Chief Executive can be found on
page 90.
Employee diversity
The Board believes that by embracing
equality, diversity and inclusion across
theCompany as a whole, we will better
understand how people’s differences and
similarities can be harnessed for the benefit
of all of our stakeholders and improve the
Company’s ability to deliver the strategy.
Equality, diversity and inclusion are
considered at Board, Committee and GMT
meetings each year to ensure the Company
regularly reviews progress againstits goals
to be a diverse and inclusiveorganisation.
The Company’s Grievance and Harassment
Policies are strong and well embedded in the
organisation, ensuring that any reports are
investigated and addressed appropriately
and the Company’s Whistleblowing Policy
enables employees to raise concerns
internally or via an external whistleblowing
hotline if preferred, to give confidence that
there is no risk of suffering anyform of
retribution as a result.
50% 50%
Women
Men
36% 64%
Women
Men
24% 76%
Women
Men
(a) The definition of our Leadership Team is our GMT
and their direct reports.
93Taylor Wimpey plc Annual Report 2021
During 2021, the Company’s new Equality,
Diversity and Inclusion Policy (the Policy)
waslaunched, and more information about
the Policy and the key areas of focus can be
found in the table opposite. The Company
took this opportunity to enhance the previous
Policy and ensure it remains in line with best
practice to drive equality, diversity and
inclusion across the Company.
The Policy is supported by the work
undertaken by the Diversity and Inclusion
Committee (D&I Committee). The D&I
Committee is made up of a variety of
members from across the Company and is
responsible for monitoring the Company’s
progress towards operating in a truly diverse
and inclusive manner.
To help ensure the Company represents
society, the D&I Committee, GMT and the
Nomination and Governance Committee
arein the process of setting a number of
aspirational targets. Once set, progress will
be regularly reported to the Committee which
will monitor progress made towards them.
To support the Company’s objectives in
relation to equality, diversity and inclusion,
allsenior leaders undertake training to build
their knowledge, awareness and understanding
of inclusion and are supported by our regional
Diversity Champions who work with the
regional Managing Directors todevelop and
deliver a local Diversity and Inclusion Action
Plan. Each of these Diversity Champions, the
Divisional Chairs and the regional Managing
Directors attended thethird annual Diversity
and Inclusion Conference held in July 2021
at which topics including privilege, allyship,
intersectionality, employee networks and
neurodiversity were discussed.
We recognise the importance of gaining
insight, knowledge and awareness from
relevant external organisations and experts in
equality, diversity and inclusion. During 2021,
the Company became a member of the
Employers Network for Equality and
Inclusion, a non profit organisation and
leading employer network to promote
equality and inclusion in the workplace.
As well as working with others to help
accelerate our plans, we have positively
raised awareness and understanding on
equality, diversity and inclusion matters
throughout the Company and will continue to
do so. Our actions during 2021 and plans for
2022 can be found on pages 95 to 97.
New and revised policies in 2021
The Company introduced a Menopause
Policy which has raised awareness and
understanding of how the menopause can
affect people, both at work and at home. The
Company is working towards becoming a
menopause friendly accredited company by
Henpicked, the leaders in advising on
menopause at work.
A revised Maternity, Paternity and Adoption
Leave Policy was published, enhancing the
Company’s competitive maternity offer.
Moreinformation can be found in the table
opposite.
The Company’s new Wellbeing Policy,
published in 2021, is designed to support
employees and create a healthy and happy
workplace where all employees feel
appreciated and are treated fairly.
As at 31 December 2021
Percentage of the workforce that
are women
32%
2020: 30%
Percentage of new starters during 2021
that are women
31%
2020: 33%
Percentage of the workforce that
are BAME
(a)
5%
2020: 4%
Percentage of new starters during 2021
that are BAME
(a)
8%
2020: 7%
Please find our latest Gender Pay Gap
report on our website.
(a) The term BAME (Black, Asian, Ethnic Minorities)
has been used when referring to demographic
information related to race for reporting purposes.
However, we do understand and recognise that
words matter, and that this acronym could lead
to a misconception that all ethnic minorities are
part of a homogeneous group, when used in the
incorrect context.
The Company celebrated a number of
equality, diversity and inclusion related
initiatives and campaigns throughout
2021,including:
– International Women’s Day: The
Company celebrated International
Women’s Day for the third consecutive
year. Employees took part in talks,
debates and activities to recognise
females across the Company and consider
some of the barriers and challenges
preventing women progressing.
– Men’s Mental Health Month and
International Men’s Day: Webinars on
men’s health and panel discussions on
what it means to be a man, masculinity,
health and vulnerability helped employees
to understand and appreciate men’s
issues in the workplace.
– LGBTQ+ Pride Month: In addition to
flags and visual signage being displayed
on sites during Pride Month, awareness
sessions were run for employees to
attend. The LGBTQ+ network was also
launched which has encouraged positive
discussions and given our colleagues the
confidence to feel they are supported and
listened to.
– National Inclusion Week: This enabled
topics such as disability, neurodiversity,
sexuality, gender and ethnicity to be
brought to the forefront of employees’
conversations to help raise awareness
andbuild an inclusive culture.
– Black History Month: The Company’s
proactive recognition of black history
helpsour employees become more
knowledgeable about race in the workplace
and have greater understanding of and
empathy for each other.
94 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Composition, succession and evaluation continued
Our Equality, Diversity and Inclusion Policy
The Company’s Equality, Diversity and Inclusion Policy is set out below in sections based on the key objectives of the Policy which are to be
an employer of choice, offer 21st century leadership and to expand our reach.
Employer of choice
Ensure that our working environment, policies, procedures and development and progression opportunities support greater diversity
andinclusion.
Progress made during 2021 Future actions
Respectful
workplace
programme
This programme involves webinar training for regional Managing Directors
tounderstand the part they play in driving a respectful and inclusive site
andoffice culture. The programme has resulted in visual signage reminding
employees about their role in embedding a respectful workplace and how
they can report any concerns. An updated site induction details our
expectations ofbehaviour on site and there is a zero tolerance approach
which has led to subcontractors being removed from site due to inappropriate
comments or behaviours.
Two business units took part in the first phase of the programme during 2021
and have seen positive changes.
The programme will be made available
for the customer service, sales and
officebased teams at the business units
which have undertaken the first phase of
the programme during 2021.
A respectful workplace pulse check on
sites will be undertaken to understand
how site culture has improved and to
identify areas for future focus.
Nine additional business units are
scheduled to take part in the programme
during 2022.
Parent
returners
programme
The Company’s Maternity, Paternity and Adoption Policy was updated to
make it easier to understand and navigate, and it now includes an enhanced
maternity leave offer including a guaranteed phased return to work and a
comprehensive ‘leading your journey on parental leave’ guide and support
from the parent returners network. This programme includes coaching by
executive coaching company, The Tall Wall, before, during and after parental
leave for all employees returning after taking parental leave.
Continue to provide guidance and
support to those on and returning from
maternity, paternity and adoption leave.
Health and
wellbeing
Each business unit has a Wellbeing Champion and a Mental Health First Aider
who are responsible for driving wellbeing eventsand providing support to
colleagues throughout the year. Wellbeing Champions received training
through two online modules which covered topics such as the role of an
effective Wellbeing Champion, defining the difference between pressure and
stress, identifying both internal and externalsignposting and supporting the
wellbeing strategy.
There have been a number of events and activities available for allemployees
and their families to join which have received high levels of engagement. Site
teams have been given training on topics including stress, fatigue, resilience
and managing mental health. These training sessions were attended by over
500 members of the site management teams.
Mental Health First Aiders will be
givenrefresher training and offered
quarterly supported facilitation sessions
to ensure regular feedback and support
in understanding and addressing mental
health issues, so trends can be identified
and dealt with effectively.
Reverse
mentoring
programme
This programme involves senior management building further understanding
of the challenges faced by individuals from backgrounds different to their
ownwhilst also providing under-represented individuals with access to senior
leaders to discuss development and progression opportunities. Ten senior
leaders undertook the programme with eight BAME
(a)
and two LGBTQ+
colleagues and 100% of participants agreed that they had benefited from the
programme and would recommend it.
Continue with this programme
during2022.
95Taylor Wimpey plc Annual Report 2021
Employer of choice continued
Progress made during 2021 Future actions
Employee
resource
groups
A number of employee resource groups have been set up via Microsoft Teams
and intranet pages for employees to engage with and support each other.
Each network is sponsored by a member of the GMT.
Working parents network
This network forms a community of new, existing and soon to be working
parents across the Company to support each other, share experiences and
be a channel for education and awareness.
Embracing the change menopause network
This network provides peer to peer support, raising knowledge, awareness
and understanding of the menopause. Over a quarter of the attendees at the
network launch webinar were men who wanted to learn more about this
subject to support their colleagues and partners.
Proud2B LGBTQ+ network
This network helps to create an environment where LGBTQ+ colleagues can
be their authentic selves. The Company’s status as a Stonewall Diversity
Champion has been facilitated by the work of the network.
Race and ethnicity network
This network provides a safe space for employees to connect, share lived
experiences to help navigate the work environment and support the Company
to ensure there are no barriers to career development due to race or ethnicity.
Support the embedding of these
networks to become integral voices of
influence and support for our equality,
diversity and inclusion related objectives.
Flexible
working for site
management
teams
Following feedback including concerns about the culture, working hours and
impact that having a family could have on female employees’ ability to remain
in the site management team, there have been trials advertising part time
Assistant Site Manager vacancies in the anticipation that more female site
managers would apply. The COVID-19 pandemic has changed employees’
mindsets on ways of working and spending time with their families, so this is
an important trial to see if more part time work can be facilitated on site.
Focus groups with site management
teams will be undertaken to explore the
appetite for part time roles, and consider
how they could work, how challenges
could be overcome and what flexible
working in site based roles could look like.
21st century leadership
Ensure that line managers understand their role and responsibility in developing a more diverse and inclusive culture through the provision
ofrelevant training and building awareness across the Company.
Progress made during 2021 Future actions
Inclusive
leadership
coaching
Piloted coaching with a selection of regional Managing Directors focusing on
enabling leaders to explore the attributes, mindset and skills required of an
inclusive leader. This coaching aims to enable individuals to identify and
understand what behaviours and beliefs may be preventing them from being
inclusive and explores how to mitigate behaviours and beliefs and create an
actionable diversity and inclusion plan to drive results.
Roll out to all regional
Managing Directors.
Hiring and
inclusion
training
Training has been provided to all regional Directors and middle management
roles focusing on attracting, selecting and retaining diverse teams. This
training explores the challenges in hiring and retaining diverse talent,
unconscious bias, privilege and action planning to drive results. The
programme has been well received and positive action has been taken,
leading to an increase in the diversity of applicants.
Continue to provide training
throughout 2022.
Diversity and
inclusion
e-learning
This e-learning topic has been made available for all employees and focuses
on ensuring everyone in the Company understands equality, diversity,
inclusion, our strategy, values and their role in supporting positive change.
To be followed by further e-learning
modules in 2022 and 2023 to focus on
embracing and respecting differences,
bias, stereotypes, microaggressions and
prejudice in actions, psychological safety
and belonging, privilege and allyship.
96 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Composition, succession and evaluation continued
Expanding our reach
Develop broader recruitment channels and take positive action to expand the diversity of candidates we attract to the Company, including
designing development programmes to attract and support new employees.
Progress made during 2021 Future actions
Future talent Recruitment processes have been adjusted to be more inclusive. We
continueto use Prospects.co.uk as our main online recruitment platform
as they register more candidates from minority backgrounds compared to
any other job board. Recruitment directly from universities has been focused
on universities with a higher proportion of BAME
(a)
students. We continue to
have a balanced gender split and for 2021 46% of our graduate intake were
women and 34% of our management trainee intake were women. We have
also increased the ethnic diversity of both our graduate and management
trainee intake.
Ensure that all data collected regarding
applicants and those hired is reviewed
and scrutinised to prevent any bias and
take positive action throughout the
hiring process. Expand our reach by
advertising via more job boards to
encourage further diversity of applicants.
Social media There have been focused posts on promoting the Company as an inclusive
employer and there has been an encouraging level of engagement with
diversity and inclusion related posts.
Focus on posting authentic
content,tailored to the audience to
encourage engagement.
Interview
conversion
There has been an improvement in reaching a more diverse pool of
candidates for roles advertised, however there is further progress to be
made in translating this into a sufficiently diverse candidate pool being
invited for interviews.
Focus on scrutinising hiring data to
understand where further action is
required. Drive awareness and provide
training for interviewing managers to
understand the importance and value of
diversity in their team.
Attraction
channels
We introduced an employer profile on Working Mums to promote the
Company’s status as a flexible employer, and added further content to
Indeed, Glassdoor and LinkedIn profiles to promote our diversity and inclusion
initiatives. Furthermore, we worked with Black Professionals in Construction to
promote roles to an exclusively BAME
(a)
candidate audience, and through the
HBF’s Careers and Skills Partnership Attract group, we can partner with
Women in Construction to provide basic career conversion training and work
placements for women getting into the construction industry.
Offer a placement scheme with
Womenin Construction to provide work
experience for this under-represented
population in production based roles.
Viaour job board partnerships, we will
target specific geographies that have a
higher population of candidates from
underprivileged backgrounds.
(a) The term BAME (Black, Asian, Ethnic Minorities) has been used when referring to demographic information related to race for reporting purposes. However, we do
understand and recognise that words matter, and that this acronym could lead to a misconception that all ethnic minorities are part of a homogeneous group, when
used in the incorrect context.
“As Sponsor for
the Race and
Ethnicity Network,
I am proud of
the progress we
have made and
the actions we
have planned for
the future.”
Chris Carney
Group Finance Director
Race and ethnicity network
The race and ethnicity employee resource
network (the network) meets on a regular
basis and every employee, regardless of
raceand background is welcome to join.
The purpose of the network is to promote
awareness of race and ethnicity in the
workplace, be inclusive and deliver objectives
in a light but meaningful approach and to
align objectives and activities with the
Company’s values and strategy.
This network provides employees with a safe
environment to talk about positive and
negative experiences; and enables them to
question, challenge and support others. The
network celebrates the cultural diversity of
our employees, customers and communities
and creates a culture of genuine inclusion
through regular events centered around the
celebration of cultural diversity and by
encouraging positive conversations about
race and ethnicity with everyone.
In addition, the network empowers our
employees to reach their potential and
elevates the voices of employees of all
ethnicities. It also helps to identify specific
barriers to retention and progression and will
support the development of an action plan to
combat any issues identified.
97Taylor Wimpey plc Annual Report 2021
Dear Shareholder
On behalf of the Board, I am pleased to
present the 2021 Audit Committee (the
Committee) report.
The Committee supports the Board in fulfilling
its corporate governance responsibilities
through the activities undertaken throughout
the year, as detailed opposite.
The main responsibilities of the Committee
are summarised in the main objective above
and further details of the Committee’s
responsibilities can be found in its Terms
of Reference which are available on the
Company’s website. Following the 2021
annual review of its Terms of Reference,
it was determined that they remain
appropriate, in line with best practice and
reflect the Committee’s responsibilities.
Audit Committee report
Humphrey Singer
Chair of the Audit Committee
Audit Committee summary
The Committee is chaired by Humphrey
Singer. All members of the Committee are
independent Non Executive Directors as
required by the UK Corporate Governance
Code (the Code). The Board has determined
that Humphrey Singer has recent and
relevant financial experience as required
by the Code.
Committee meetings were also attended, by
invitation, by the Chairman, Chief Executive,
Group Finance Director, Group Operations
Director, other Non Executive Directors,
Group General Counsel and Company
Secretary, Assistant Company Secretary,
Group Financial Controller, Head of Internal
Audit, Senior Internal Audit Manager, Head
of Tax, Head of Group Reporting, Head of
Risk, Group IT Director, Head of IT Services,
and the external Auditors.
Committee members
Meetings
attended
Humphrey Singer (Chair) 3/3
Scilla Grimble
(a)
2/2
Angela Knight 3/3
Robert Noel 3/3
(a) Appointed to the Committee on 1 March 2021.
Main objective
– To assist the Board in fulfilling its corporate
governance responsibilities relating to the
Group’s risk management and internal
control framework; internal audit process;
financial reporting practices including the
key accounting judgements and estimates;
and external audit process
2022 key areas of focus
– Continue to ensure that the IT operating
environment remains robust, supporting
the business needs in a year of planned
changes to core systems and also that key
systems are protected against cyber and
other threats
– Gain assurance on required changes to
key processes and controls that may be
affected by known legislative changes
impacting the industry through 2022 and
2023, in particular the New Homes
Ombudsman Service and the Future
Homes Standard
– Oversee the adoption of any financial
governance changes in 2022 resulting
from the ongoing Department for
Business, Energy and Industrial Strategy
(BEIS) consultation
– To gain assurance that new systems
and processes related to the customer
journey are implemented within a
robust framework
The Committee’s review of progress against
these key areas of focus concluded that they
were all satisfactorily addressed during 2021.
Internal and external audit
The Committee continues to hold individual
meetings with the external Auditors and with
the Head of Internal Audit, independent of
the Executive Directors, to discuss matters
within its remit and any issues arising from
the audits.
The audit of the 2021 financial results has
been the first by PricewaterhouseCoopers
LLP (PwC) following shareholders’ approval
of their appointment at the 2021 Annual
General Meeting (AGM). The Committee has
monitored their progress and is satisfied with
their performance, which will be subject to
formal review, as in previous years, to identify
whether there are any areas of potential
improvement and to allow feedback to be
shared mutually.
Membership
The Committee has been further enhanced
by the appointment on 1 March 2021 of
Scilla Grimble, Non Executive Director.
Scillabrings significant financial and
risk-related experience, as described in
moredetail onpage 75, which has added to
the Committee’s skill set and further
enhanced the quality of its work on behalf
ofshareholders.
Angela Knight will step down from the
Committee when she steps down from the
Board at the conclusion of the AGM on 26
April 2022. I would like to thank Angela for
her valued service and wise counsel during
her membership of the Committee.
Key areas of focus
The Committee’s key areas of focus during
2021 were:
– To oversee the External Quality Assessment
of the Internal Audit function
– To give continued focus to the resilience
and protection of key business systems to
cyber and other threats
98 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Audit, risk and internal control
Continuing compliance
Throughout the year the Committee met
the Financial Reporting Council (FRC)
guidance on Audit Committees which
was incorporated into the Code. The aim
of the guidance is to further improve good
governance around the Committee’s
competence; induction for new members;
audit rotation; independent assessment of
areas of judgement; and sufficiency of
resourcing for the Committee; all with the
aim of ensuring that the Committee is able
to perform its primary function of protecting
shareholders’ interests in relation to
the Company’s financial reporting and
internal control.
Committee activities during 2021
The March 2022 meeting concluded the Committee’s activities with regard to the Company’s 2021 reporting cycle which have been included
in the table below.
Topic Activity / review
February
2021
July
2021
December
2021
March
2022
Financial reporting Reviewed year end matters including the draft Annual Report
and Accounts (and assessed the processes which ensure it is fair,
balanced and understandable), significant accounting and audit
issues, the draft full year results announcement and the going
concern statement
Reviewed the draft half year statement, including significant
accounting issues, materiality and the external Auditor’s report
on the statement
Reviewed Accounting Issues and Accounting Standards in preparation
for year end reporting
Reviewed the proposed TCFD reporting
External audit Reviewed the terms of business and audit engagement letter for
PwC’s audit of 2021 reporting
Recommended to the Board the appointment of PwC as
external Auditors
Reviewed PwC’s plan for the audit of the 2021 accounts and the
progress of the audit to date
Reviewed PwC’s report on the scope of the audit of the 2021
accounts, including key audit risks and regional checks conducted
around the business
Disclosed relevant audit information to the external Auditors and the
required evidence in support of it
Reviewed the final report from PwC following completion of the audit
of the 2021 accounts
Internal control and
risk
Reviewed the fraud incident and response report
Concluded the prior year’s risk review including agreeing Principal
Risks, consideration of emerging risks, and monitoring progress on
mitigation actions
Completed a detailed review of Principal, key and emerging risks,
together with mitigation and assessment against the Company’s risk
appetite
Conducted the half year risk review
Reviewed the viability model
Potential new compliance areas
A significant development during 2021 was
the BEIS consultation, entitled ‘Restoring
Trust in Audit and Corporate Governance’.
The consultation proposed a number of
reforms and new processes designed to
improve communications and engagement
between Boards, their Audit Committees and
shareholders. The Committee will monitor
the progress of these proposals andwill
report on their outcome and the implications
for the Company at the appropriate time.
The Committee will continue to ensure that
all applicable regulations are complied with,
and we remain confident that the business
continues to operate in a controlled and
well-managed way.
Humphrey Singer
Chair of the Audit Committee
2 March 2022
99Taylor Wimpey plc Annual Report 2021
Committee activities during 2021 continued
Topic Activity / review
February
2021
July
2021
December
2021
March
2022
Committee
governance
Reviewed the Committee’s performance against its Terms of Reference and
objectives for the previous year and set objectives for the next year
Reviewed progress on the Committee’s areas of focus
Reviewed and agreed the Committee’s annual plan for the next year, designed
to ensure it met its objectives and Terms of Reference
Internal audit Received activity reports from Internal Audit
Agreed Internal Audit’s programme of work for the next year
Reviewed updates to the Internal Audit Charter
Reviewed progress against Internal Audit priorities and work plan for the year
Received and considered the External Quality Assessment report on the Internal
Audit Department and processes and agreed the resulting actions
Reviewed progress to date in achieving agreed actions flowing from the
External Quality Assessment report
Data and
systems
security
Received an update on the Company’s data and systems security, technology,
cyber resilience and further protective measures in relation to key business
systems
Distributions Advised the Board regarding the appropriateness of the proposed final dividend
for 2020
Advised the Board regarding the appropriateness of the proposed interim
dividend for 2021
Compliance Received an update on legal and regulatory compliance requirements across
the business and confirmation that these continued to be met
In carrying out these activities, the Committee relied on regular reports from Management, Internal Audit and from the external Auditors. In
monitoring the financial reporting practices, the Committee reviewed accounting policies, areas of judgement highlighted by Management and
the external Auditors, the going concern assumptions and compliance with accounting standards and the requirements of the Code.
Committee meetings
The Committee met with the Head of
Internal Audit and with representatives
from the external Auditors during each
Committee meeting in 2021, in order to
discuss any matters which either may wish
to raise in confidence, with only the Secretary
being present.
Committee purpose and responsibilities
The Committee’s purpose and
responsibilities are, in line with the
requirements of the Code:
– To establish formal and transparent
policies and procedures to ensure the
independence and effectiveness of the
Internal Audit function and the external
audit and satisfy itself as to the integrity of
financial and narrative statements.
– To ensure the Annual Report and
Accounts and half year results each
present a fair, balanced and
understandable assessment of the
Company’s position and prospects.
– To establish procedures to manage risk,
oversee the internal control framework,
and determine the nature and extent of the
Principal Risks the Company is willing to
take in order to achieve its long term
strategic objectives.
Committee competence
A key requirement of the FRC’s guidance on
Audit Committees is that each Committee
member should have sufficient knowledge,
training and expertise to contribute effectively
to the Committee’s deliberations.
Humphrey Singer, the Committee Chair,
hasbeen a member of the Audit Committee
since December 2015 and its Chair since
February 2018. He has extensive experience
of the financial reporting requirements of
FTSE 100 companies, of financial reporting
preparation and compliance for public
companies, and of dealing with internal and
external auditors, from his current role as
Chief Financial Officer of Belron Group and
from previous roles with Marks and Spencer
Group plc and Dixons Carphone plc. This
depth of experience has given Humphrey
insight intokey areas of shareholder concern
andindependent experience of robustly
challenging and holding to account
Management, the external Auditors and the
Head of Internal Audit.
The Committee Chair is assisted on the
Committee by the knowledge and
experience of three other Non Executive
Directors:
– Scilla Grimble has over 15 years’
executiveexperience in corporate finance;
is currently the Chief Financial Officer of
Moneysupermarket.com Group plc;
andbrings significant financial and
risk-related experience.
– Angela Knight has broad experience
offinancial services and banking and has
extensive non executive director experience.
– Robert Noel has considerable experience
of the property sector and wide commercial
experience as Chair of Hammerson plc
and previously as Chief Executive of Land
Securities Group PLC.
As announced on 31 January 2022, Angela
Knight will be stepping down from the Board
and the Committee at the conclusion of
the AGM. The search process for new
Non Executive Directors is underway and
an assessment of their suitability to join
the Committee upon appointment will
be undertaken.
The Committee is confident that its members
collectively have the necessary competence
relevant for the housebuilding sector and that
the composition, balance, and expertise of
the Committee can give shareholders
confidence that the financial, reporting, risk,
and control processes of the Company
aresubjected to the appropriate level of
independent, robust and challenging oversight.
100 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Audit, risk and internal control continued
Internal control
– Primary source of the Company’s system of internal control for business operations
– Approved by the GMT
– Subject to regular review by the GMT and updates to ensure it remains appropriate,
with any significant proposed amendments independently assessed by Internal Audit
– Available on the intranet for all employees
– Includes clear levels of delegated authority, responsibility and accountability
– Relating to the operation of the main functions of the Company
– Support the Operating Framework at a more granular level of detail
Detailed Manuals
– Consider and, if appropriate, approve matters requiring
prior approval under the Operating Framework
– Monitor adherence to the Operating Framework
and detailedmanuals
– Independently assess appropriateness of, and compliance with
the Operating Framework and detailed manuals
Group Management Team Internal Audit
Operating Framework
As described in the Nomination and
Governance Committee report on page 91,
there is a formal process of induction for
newDirectors which includes specific
reference tosupporting competence in
relevant Committee areas through exposure
to the appropriate areas of the Company’s
operations and performance. Scilla Grimble’s
induction included meetings with the
Committee Chair; the Group Finance Director
and the other Executive Directors; members
of the GMT; both the former and current
external Auditors; the Head of Internal Audit;
the IT Director; and appropriate external
bodies such as the Company’s Brokers in
relation to financial reporting. The same
thorough induction process will be
undertaken by any new NonExecutive
Directors appointed to theCommittee.
Committee evaluation
The Board evaluation for 2021, which is
described more fully on page 92, included
an appraisal of the performance of the Audit
Committee and individually of its Chair and
other members.
The outcome of the appraisal was that the
Committee was considered to continue to
operate effectively, with the necessary level
of expertise and independent challenge, and
with no specific actions arising requiring
further improvement.
It was also noted that Humphrey performs
his role of Chair of the Audit Committee
particularly effectively, with members noting
that he manages each Committee meeting in
a way that ensures a good level of debate
and positive challenge.
Risk management and internal control
The Group has an established ongoing
process of risk management, which is
detailed further on pages 59 to 65 and which
was in place from the start of the financial
year to the date on which the 2021 Annual
Report and Accounts were approved and is
consistent with the FRC’s Guidance on Risk
Management, Internal Control and Related
Business Reporting. The Committee
monitors the Group’s risk management and
internal control systems, including their
effectiveness, on behalf of the Board and
provides advice to the Board in connection
with the Board’s own risk review.
The Committee’s objectives in relation to
riskare:
– To ensure the Group’s risk profile
remainswithin its agreed risk appetite
andtolerance levels and is adequately
monitored and reviewed as appropriate
toreflect external and internal changes.
– To give early consideration to the
Government’s proposals in relation to
anew regime for internal controls over
financial reporting.
– To continue to develop the Group’s risk
processes in light of evolving best practice.
– To consider emerging risks that could
impact on the Group’s longer term strategy.
To achieve these objectives, the Committee
undertook the following during 2021:
– Detailed risk reviews were conducted
twice during the year, at the Committee’s
July (half year) and December (full year)
meetings and covered both the systems
used and the reported risks.
– The Committee agreed the addition of
twonew Principal Risks (details on page
61) to reflect the changing risklandscape.
– Consideration was given to the continuing
impact of COVID-19 on the Principal Risks
of the Group, together with the mitigations
implemented to address the specific
issues identified.
– Regular updates were received on the
continuing review of relevant historic and
current developments and actions taken
by the Company to comply with recent
changes to the Government guidance on
fire safety. This included assessing and
advising the Board on the proposed
additional provision, made and announced
during 2021 of £125 million, and reviewing
updates on usage and the balance of the
provision during the year.
101Taylor Wimpey plc Annual Report 2021
– Received updates on key information
technology (IT) risks, as a consequence
ofthe continuing potential impact of
COVID-19 in this area. Including the
resilience of the Group’s systems to
cyberattack and action taken to maintain
security of systems and data.
– Advised the Board in its assessment of
emerging risks, including potential velocity
and impact on the Group’s longer term
strategy, further details of which can be
found on page 60.
– Oversaw the further embedding across
theCompany of improvements identified
inlast year’s Audit Committee report in
thearea of risk, relating to the processes
for identifying, assessing, monitoring,
reporting, and managing the residual
elements of risk, including the enhanced
reporting of action plans and target risk
for the identified key risks. Key further
enhancements during 2021 were the
issue of a standalone risk management
manual and the introduction of risk
management onboarding.
The Board holds a formal risk review once
each year, with detailed updates provided at
two Audit Committee meetings during the
year and also routinely considers risk at each
Board meeting, as appropriate. It makes its
assessment of risk after overseeing, with
advice from the Committee, a bottom-up
and top-down review of risk in all areas of
the business, including taking account of
environmental, social and governance
considerations, including climate change,
over various time horizons. The assessments
use an established methodology and include
regularly reviewing the effectiveness of
theGroup’s system of internal control in
providing a responsible assessment and
mitigation of risks. Action to mitigate the
effect of each risk is led by the Chief Executive
in conjunction with the relevant member of the
Group Management Team (GMT).
The Board’s monitoring of risk, its
management and reporting, covers all
controls, including financial, operational,
compliance and assurance systems.
Those systems cannot eliminate risks but
rather seek to manage both the likelihood of
their occurrence and the extentof their
impact and can only provide reasonable and
not absolute assurance against material
misstatement or loss.
The Principal Risks facing the Company and
the Group, as assessed by the Board, are
set out on pages 61 to 65 together with
information on the mitigations for each risk.
The Committee also oversees the actions
being taken to monitor IT initiatives which
aim to either directly protect against and
reduce the risk of cyber-related type attacks
and fraud; support and enhance the current
IT environment including data protection; or
that are crucial in their contribution to key
business initiatives aiming to enhance the
experience of customers, suppliers
andemployees.
During 2021, the Group Finance Director
hasled the GMT in undertaking a review of
the Government’s developing proposals for
further enhancement to UK companies’
internal controls through proposals set out in
the BEIS consultation document for reforms
to the UK’s corporate governance, audit
andreporting regime. Since it is generally
expected that these will become legal or
regulatory requirements to some extent, the
Company has been undertaking necessary
and appropriate preparatory actions to
enable it to comply within the expected time
frame for changes. These actions have been
monitored by the Committee during 2021
and will continue to be monitored into 2022,
when we expect to be able to report in
greater detail as to their scope and impact
upon the Company; its assurance
processes; and its future financial reporting.
At its meeting in March 2022, the Board,
having conducted its own review and after
reviewing more detailed assessments from
the Audit Committee, remained satisfied that
the systems of internal control continued to
be effective in identifying, assessing, and
ranking the various risks facing the
Company; and in monitoring and reporting
progress in mitigating their potential impact
on the Company. The Board also approved
the statement of the Principal Risks and
uncertainties set out on pages 61 to 65.
External Auditors
Re-appointment of PwC
Last year’s Annual Report advised that the
Company’s external Auditors were to change,
in accordance with statutory legislation and
guidance issued by the Financial Reporting
Council (FRC) as to the maximum duration
ofan external auditor’s appointment. Full
details of the tender process and the
proposal to appoint PwC were set out in
the2020 Annual Report and Accounts, which
can be found on the Company’s website.
That proposal was subsequently approved
by shareholders at the Company’s 2021
AGM and PwC succeeded the Company’s
former external Auditors, Deloitte LLP
(Deloitte), for the audit of the Company’s
2021 and future reporting.
The Committee considers that the relationship
with PwC is well established and is satisfied
with the effectiveness of the overall external
audit process. PwC’s performance during
the handover of responsibilities from Deloitte,
and in undertaking the first full year’s audit,
for 2021, has been kept under regular review
by the Committee and reported to the Board
as appropriate.
As 2021 was the first year of PwC’s
appointment as external Auditors, a full
evaluation of their performance was not
performed during 2021 and instead the
Committee considered the key work
performed by PwC to date and confirmed
that the audit process continues to be
effective and the quality and sufficiencyof
the resources provided by theengagement
team remains appropriate.
The Committee intends to undertake a
formal assessment during 2022 of the
performance of PwC, as the external
Auditors, in relation to the audit work carried
out in2021. This will include a questionnaire
being distributed to the Board and key
stakeholders in the audit process to evaluate
the effectiveness of the external audit
process.
In addition, the Committee considered
whether PwC had appropriately challenged
Management estimates and judgements. The
external Auditor’s report (starting on page
128) details the key matters that were
considered as part of the year end audit. This
includes details of the procedures performed
by PwC to assess the estimates and
judgements made by Management.
In particular the Committee noted during
thecourse of the audit that the external
Auditors challenged Management’s
judgements and assertions on the
following matters:
– Margin recognition and site forecasting
– Cladding fire safety and leasehold
provisions
– Defined Benefit Pension valuations
In relation to each of these judgements the
external Auditors confirmed that the
approach adopted by Management in
accounting for these in the financial
statements was appropriate.
Based upon its interim assessment, as set
out above, the Committee recommended to
the Board, which in turn is recommending to
shareholders in Resolution 10 at the 2022
AGM (on page 185), that PwC should be
re-appointed as external Auditors to the
Company.
The Company will of course keep the matter
under regular review, taking into account the
annual performance review to be conducted
by the Committee. The recommendation of
PwC was free from influence by a third party
and no contractual term of the kind
mentioned in Article 16(6) of the Audit
Regulation has been imposed on the
Company whereby there would be a
restriction on the choice to certain categories
or lists of audit firms in the Company’s
selection of its external auditors.
Appointment of the external Auditors for
non-audit services
The Committee has a formal policy, reviewed
on a regular basis, as to whether the
Company’s external Auditors should be
employed to provide services other than
audit services. In line with the Code, the
Committee has regard to the relevant
regulation and ethical guidance regarding the
provision of non-audit services by PwC.
A review of the policy has been undertaken
and it was confirmed that the policy is in
accordance with the Revised Ethical
102 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Audit, risk and internal control continued
Standard 2019 (the Standard) issued in
December 2019 by the FRC. The Standard
limits the circumstances in which an audit
firm carrying out statutory audits of public
interest entities (including the Company, as a
FTSE 100 listed company) may provide
defined services as set out in the Standard.
The Board, acting on guidance from the
Committee following its review of the
continuing effectiveness of this policy, is
satisfied that it meets the Standard, and will
be conducive to the maintenance of good
governance, best practice and auditor
independence and objectivity.
PwC undertook non-audit services in the
form of assurance work carried out in
connection with the announcement of the
Company’s 2021 half year results, which is
of direct benefit to shareholders although it is
not regarded as audit work for reporting
purposes. PwC also made available access
to their subscription service providing online
technical resources such as factual updates
and changes to applicable law, regulation,
and accounting and auditing standards, at a
notional value of £2,000.
The Committee recognises and supports the
importance of the independence of external
auditors. It reviewed PwC’s performance of
non audit services during 2021 and is
satisfied that it did not, and will not going
forward, impair the independence of the
external Auditors. As a result, the value of
non-audit services work by PwC was
£0.1million in 2021 (2020: £0.2 million by
former external Auditors, Deloitte) which
represents approximately 13% of the audit
fee as set out in Note 6 to the Accounts on
page 149.
Internal Audit
Internal Audit’s primary role is to support
theBoard and the GMT to protect the
assets, reputation and sustainability of the
Group. The function is led by the Head of
Internal Audit who directly reports to the
Chair of theCommittee, with a secondary
reporting line to the Group Finance Director,
and has regular direct contact with the
Chairman of the Board, the Chief Executive
and other Executive Directors, as required.
The reporting line to the Chair of the
Committee protects the function’s
independence. In addition, the Chair of the
Committee, and the independent evaluation
carried out during 2021 described below,
each assessed the independence ofthe
Head of Internal Audit and confirmedthat
she has maintainedindependence.
Internal Audit reviews the effectiveness and
efficiency of the systems of internal control in
place to safeguard the assets; to quantify,
price, transfer, avoid or mitigate risks; and
tomonitor the activities of the Group in
accomplishing established objectives.
The Internal Audit plan, and the individual
audits conducted in line with the audit plan,
are driven primarily by the Group’s strategy
and its key risks. Following each review, an
Internal Audit report is provided to both the
Management responsible for the area
reviewed and the GMT. These reports outline
Internal Audit’s opinion of the management
control framework in place together with
actions proposed or made, as appropriate,
where improvements are recommended.
TheChief Executive, the GMT and senior
management consider the reports on a
regular basis and are responsible for
ensuring that improvements are made as
agreed. A database of audit
recommendations and improvement
initiatives is maintained. Follow-up and
escalation processes ensure that such
improvements are implemented and fully
embedded in a timely manner. Summaries
ofall Internal Audit reviews and other key
activities and resulting reports are also
provided to the Committee for review and
discussion.
The Company belongs to and participates
inindustry-wide forums and other initiatives
aimed at combating fraud within the
housebuilding and construction industry.
The Internal Audit function also reviews
proposed related party transactions,
including employees’ house purchases
fromthe Company, to provide assurance
that the formal policy and proper procedures
are followed.
Internal Audit works with the Company
Secretariat Department to consider any
longer-term revisions to the governance
processes and working environment. The
learnings and improvements from this activity
are being woven into the ongoing control
and risk processes and this activity will
continue through 2022.
An independent evaluation of the Internal
Audit function was carried out in 2021 by the
Chartered Institute of Internal Auditors (CIIA)
on behalf of the Committee and included
consideration of the recommendations
included in the Internal Audit Code of
Practice for effective internal audit in the
private and third sectors. The finding of this
independent evaluation was that Internal
Audit conforms to the CIIA’s professional
standards as set out in the International
Professional Practice Framework. Continuous
improvement initiatives were agreed with the
Committee and progressed subsequently to
ensure the Internal Audit function continues
to meet both current best practice and the
evolving needs of the Group.
Cyber security
An area newly recognised as a Principal Risk
during 2021 was the potential vulnerability of
the Group’s IT systems to thevarious forms
of cyber attack. This received considerable
focus during 2021, as a result of being given
an enhanced relative risk rating, as explained
in more detail on page 65. The Committee
reviewed throughout the year the plans and
progress in mitigating against its occurrence
and impact.
Read more about cyber security risks and our
response and mitigation processes on pages 61
and 65.
103Taylor Wimpey plc Annual Report 2021
Going concern
The Group has prepared forecasts, including
various sensitivities, taking into account the
Principal Risks and uncertainties identified on
pages 61 to 65. Having considered these
forecasts, the Directors remain of the view
that the Group’s financing arrangements and
capital structure provide both the necessary
facilities and covenant headroom to enable
the Group to conduct its business for at
leastthe next 12 months. The Committee
reviewed the forecasts and the Directors’
expectations based thereon and agreed
thatthey were reasonable. Accordingly,
the consolidated financial statements of the
Company and of the Group have each been
prepared on a going concern basis.
Read more about our Principal Risks on pages
61 to 65.
Viability Statement
The Viability Statement is designed to be a
longer term view of the sustainability of the
Company’s strategy and business model
and related resourcing, in light of projected
wider economic and market developments.
The Committee considered whether there
should be any change to the five year period
chosen for the Statement but remained of the
opinion that this continued to be appropriate,
taking into account the balance sheet
strength and confirmation from the Executive
Directors that this period continues to broadly
align to the development cycle for new land.
The Committee also reviewed the Executive
Directors’ expectations, the criteria upon
which they were based, and the sensitivities
applied, including how these linked to the
Principal Risks faced by the business, and
agreed that they were reasonable.
The statement appears on pages 70 to 71
together with details of the processes,
assumptions, and testing which underpin it.
Annual Report and Accounts 2021
Fair, balanced and understandable
A key requirement of our financial
statementsis that they are fair, balanced
andunderstandable, and that they include
the information necessary for shareholders
toassess the Group’s position, performance,
business model and strategy.
The Committee monitors the integrity of
theGroup’s reporting process and financial
management, and reviews in detail the work
of the external Auditors and any significant
financial judgements and estimates made
byManagement.
It considers the output from the above and
reviews the full year and half year financial
statements before proposing them to the
Board for consideration.
The review of the Company’s Annual Report
and Accounts took the form of a detailed
assessment of the collaborative process of
drafting them, which involves the Company’s
Investor Relations, Company Secretariat, and
Finance functions, with guidance and input
from other relevant functions and external
advisers. It ensured that there is a clear and
unified link between this Annual Report and
Accounts and the Company’s other external
reporting, and between the three main
sections of the Annual Report and Accounts.
In particular, the Committee:
– Reviewed all material matters.
– Ensured that it correctly reflected
theCompany’s performance in the
reportingyear.
– Ensured that it presented a consistent
message throughout.
– Ensured that it correctly reflected the
Company’s business model.
– Ensured that it correctly described the
Company’s strategy.
– Ensured that it fairly reflected the impact
todate, and the extent of the continuing
impact, of the COVID-19 pandemic
ontheCompany’s business, position,
andprospects.
– Considered whether it presented the
information in a clear and concise
manner,illustrated by appropriate KPIs,
tofacilitate shareholders’ access to
relevant information.
Significant items
The items below are those that the
Committee has considered in discharging
itsduties and in considering the financial
reporting of the Group:
Margin recognition and site forecasting
The cost allocation framework used across
the Group controls the way in which
inventory is costed and allocated across
each development. It also ensures that
anycosts incurred in excess of the original
budget are recognised appropriately as the
site progresses.
The Committee reviewed reports from
Management in relation to areas of the
business recognising cost excesses, and
also reviewed the work undertaken by PwC
which included testing of the Group-wide
controls to monitor cost allocation. The
Committee gave careful consideration to the
judgements and assumptions involved,
challenging Management where appropriate.
Following these reviews, together with
enquiries of the GMT and the external
Auditors, the Committee concluded that
there continues to be appropriate systems
and internal controls in place, which
ensured that consistent principles were
applied, the treatment and presentation on
the income statement of the costs incurred
by the business were appropriate, and that
the external Auditors agreed with the
conclusions reached.
Recommendation
to the Board
The outcome of the above processes,
together with the views presented by PwC,
was that the Committee recommended, and
in turn the Board confirmed, that the 2021
Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable,
and provides the necessary information for
shareholders to assess the Company’s
position, performance, business model
and strategy.
Statement of compliance
The Company has complied throughout
the reporting year with the provisions of
The Statutory Audit Services for Large
Companies Market Investigation (Mandatory
Use of Competitive Tender Processes
and Audit Committee Responsibilities)
Order 2014.
Defined Benefit Pension valuations
The Committee reviewed the funding position
of the Taylor Wimpey Pension Scheme and
discussed and agreed the market-based
assumptions used to establish the net
pension deficit recognised on the balance
sheet as at 31 December 2021.
Cladding fire safety and leasehold provisions
The Committee reviewed Management’s
assessment of the costs to bring all Taylor
Wimpey apartment buildings constructed in
the twenty year period to January 2021 into
line with current EWS1 guidance, covering
cladding and the whole of the external wall
systems including balconies. The Committee
also reviewed updates on the progress of the
rectification of buildings identified with
Aluminium Composite Material cladding,
together with utilisation and estimates of the
remaining provision. In addition the
Committee reviewed the level of applications
received in respect of the Ground Rent
Review Assistance Scheme, the utilisation of
the provision and the outcome of the CMA
investigation, and the assessment of the
costs of the undertakings entered into.
104 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Audit, risk and internal control continued
Dear Shareholder
As Chair of the Remuneration Committee
(the Committee), I am pleased to present
our 2021 Directors’ Remuneration Report
on behalf of the Board. This Report
provides detailed disclosures in relation
to our Directors’ remuneration and an
overview of wider workforce remuneration
for the year ended 31 December 2021.
Policy
Our current Remuneration Policy (the Policy)
was approved at the 2020 AGM with 98.6%
of shareholders voting in favour. Despite the
unprecedented challenges to the business
posed by the COVID-19 pandemic, we have
continued to operate the Policy flexibly and
we are satisfied that it remains appropriate
for the third and final year of this policy period.
Other than discretion being used to treat
the Chief Executive as a ‘good leaver’ within
the Policy for the purpose of determining
incentive plan pay outs, no discretion was
used by the Committee during the year to
adjust incentive outturns.
Remuneration Committee report
Gwyn Burr
Chair of the Remuneration Committee
Remuneration Committee
summary
The Committee is chaired by Gwyn Burr.
On 31 December 2021, the Committee
consisted of three Non Executive Directors
and the Chairman of the Board. Committee
meetings were also attended, by invitation,
by the Chief Executive, Group General
Counsel and Company Secretary, Group HR
Director, Head of Reward and Pensions,
Assistant Company Secretary and
representatives from Korn Ferry.
Committee members
Meetings
attended
Gwyn Burr (Chair) 5/5
Irene Dorner
(a)
4/5
Jitesh Gadhia
(b)
4/4
Angela Knight
(a)
4/5
(a) Irene and Angela were unable to attend one of the
additional meetings outside the Committee’s
ordinary meeting calendar. Both were consulted in
advance of the meeting.
(b) Appointed to the Committee on 1 March 2021.
Main objectives
– Establish and maintain formal and
transparent procedures for developing
policy on executive remuneration to deliver
the Company’s strategy and value for
shareholders; and to agree, monitor and
report on the remuneration of Executive
Directors and senior executives
– Review wider workforce remuneration and
other policies in accordance with the 2018
Corporate Governance Code (the Code)
2022 objectives
– Determine the remuneration arrangements
for the incoming Chief Executive
– Review the existing Remuneration
Policy and submit the revised Policy
for shareholder consideration at the
2023 Annual General Meeting (AGM)
– Review wider workforce remuneration
arrangements and take into account as
part of the Remuneration Policy review
– Ensure there is an effective induction
process for the new Remuneration
Committee Chair
During 2022 we will be reviewing the
current Policy and will be seeking shareholder
approval for a new Policy at our 2023 AGM.
As part of this review, we will ensure that our
Policy continues to address the factors in
Provision 40 of the Code and that reward is
clearly linked to the successful delivery of
our long term strategy.
Wider workforce remuneration
We continue to review the remuneration
arrangements for the wider workforce and
take these into account when considering
remuneration arrangements for the Executive
Directors and senior management. We have
reviewed the performance measures in the
various annual bonus schemes available
across the business and we are confident that
they drive behaviours that are consistent with
our purpose, culture, values and strategy.
We have continued to support our
employees through the pandemic and have
regularly reviewed staff salaries through
benchmarking exercises, resulting in salary
increases for 1,307 employees in addition to
the 2% annual salary increase in 2021 (as at
31 December 2021 there were 5,144
employees). We have also approved a 3%
salary increase for all eligible employees with
effect from 1 April 2022 and will continue
to benchmark key roles throughout the
year when necessary. Chris Carney, our
Group Finance Director, will also receive
this 3% increase.
We are pleased to have increased several
elements of our benefits provision that are
important to our employees, including the
introduction of new incentive arrangements,
enhancements to our Maternity Policy, our
wellbeing provisions, and other benefits that
assist our employees financially. We were
delighted that the Living Wage Foundation
accredited Taylor Wimpey as a Living Wage
Employer in November 2021.
During the year I attended three National
Employee Forum (NEF) meetings in my
capacity as Employee Champion. At one
meeting I used this as an opportunity to seek
feedback on behalf of the Committee on
wider workforce remuneration arrangements
and also to explain how the Executive
Director remuneration arrangements align
with the wider workforce.
We have taken the opportunity to expand our
disclosures in this area and more information
can be found on pages 121 to 123.
105Taylor Wimpey plc Annual Report 2021
Executive Director remuneration
decisions and outcomes
Executive Incentive Scheme (EIS)
As detailed on page 2, we delivered an
excellent performance in 2021. Throughout
2021 we experienced strong demand for our
homes underpinned by continued low
interest rates and good mortgage availability.
The business performed very well in the year,
with significant improvement in operating
margin, as we focused on optimising sales
prices, alongside increased volume, driving
strong growth in operating profit. Importantly
our excellent performance was not just
financial but also in delivering quality homes
and in our levels of customer service. The
quality of our homes, as recognised through
the independent NHBC Construction Quality
Review score, is an area where we continue
to lead the volume industry. We are also
delighted to be recognised as a five-star
builder once again in the independent HBF
customer satisfaction survey. Subsequently,
the outturn for the 2021 EIS is 95% of the
maximum following the stretch target being
achieved for four of the five measures.
The Committee has considered the
Company’s performance against the targets
and the business performance more
generally and is satisfied that the payment
received by the Executive Directors is aligned
with the Company’s performance during the
year and also the bonus outturns for the rest
of the business. Full disclosure of the targets
can be found on page 108.
Performance Share Plan (PSP)
The PSP awarded in 2019, measuring
performance in the 2019 to 2021 period, will
vest at 22.1% following the achievement of
four of the five measures above threshold
performance. The pandemic, and specifically
financial performance in 2020, had a
significant impact on the outcome of the
PSP. When approving this outcome, the
Committee reviewed the performance
measures and respective targets for the
2019 Award, and is satisfied that this
represents an appropriate outcome based
on the challenging business environment
over the three year period.
Outcomes linked to performance
The Committee has reviewed the EIS and
PSP outcomes and consider that they
accurately reflect 2021 performance
therefore the performance targets were not
adjusted during the year and nor was
Committee discretion used to adjust the
formula-driven outturn.
Salaries
As disclosed in the 2018 Directors’
Remuneration Report, at the time of his
appointment the Committee initially set Chris
Carney’s salary below that of his
predecessor and positioned it between the
lower quartile and median of comparable
market data, recognising that this was his
first appointment as a plc Director. The
Committee also stated then that it intended
to keep his salary under periodic review as
he developed further into the role.
Given the continued impact of the pandemic
providing material uncertainty at the time of
the 2020 and 2021 salary reviews, a prudent
approach was taken in respect of Chris’s
salary, with inflationary salary increases
cancelled in 2020 and then an inflationary
increase of 2% in 2021, in line with the other
Executive Directors and the wider workforce.
The Committee announced in the 2020
Directors’ Remuneration Report that it
would undertake a review of Chris Carney’s
salary during 2021. The Committee
recognised the development of Chris’s role
since his appointment, particularly where it
has broadened to support the revised
Divisional Chairman structure introduced in
2020. This has been particularly focused on
cost control, land strategy and our data
management systems to further enhance
our customer strategy. More generally the
Committee considered that this increase
was appropriate to recognise his strong
performance over the three years since his
appointment and concluded that Chris has
been performing in line with an experienced
FTSE director for some time now.
Given the more stable corporate and
economic outlook in 2021, the Committee
decided in the summer that it was the right
time to move his base salary towards the
desired mid-market level. The Committee
therefore determined that his salary should
be increased from £447,372 to £490,000
with effect from 1 July 2021.
We consider that this represents a sensible
progression of Chris’s base salary, effectively
on a phased basis since his appointment
in 2018, and having set the package at
the desired mid-market level we anticipate
that future increases will ordinarily be in
line with the percentage increase for the
wider workforce.
Chief Executive succession
On 8 December 2021, we announced that
Pete Redfern, our Chief Executive, would be
leaving the business once a suitable
candidate had been identified and a full
handover has taken place. Following a
thorough recruitment and selection process,
Jennie Daly, our Group Operations Director,
was selected to take over from Pete as Chief
Executive of Taylor Wimpey, effective from
26 April 2022 (the date of the 2022 AGM).
Pete will step down from the Board at this
point and will remain available to the
business to ensure an orderly transition until
his notice period ends on 8 December 2022.
The Committee, at the request of the Board,
reviewed and approved the remuneration
arrangements for Pete on his departure. Pete
will be treated as a good leaver in line with
our shareholder approved Policy for the
purpose of incentive plan pay outs. He will
be eligible to receive a pro rata bonus for
2022 for the proportion of the year he will be
actively employed, up to the AGM, subject to
the achievement of the performance
conditions measured at the end of the year.
Outstanding PSP Awards will be pro-rated
as appropriate, and will be capable of
vesting, at the normal time and subject to the
achievement of performance conditions and
the requirement to retain vested shares for
two years. Moreover, he will be required to
retain a shareholding in the business worth
the equivalent to 200% of his base salary, for
two years after his employment ceases.
His contractual entitlements, including base
salary, pension and benefits are payable in
full until the expiry of his notice period on
8 December 2022. Further details of his
remuneration arrangements can be found
on page 118.
The Committee also considered the
appropriate remuneration package for Jennie
Daly when she assumes the role of Chief
Executive in April 2022. The package
approved, which is in line with the Policy,
provides a salary of £750,000 with a pension
allowance in line with the rate applicable to
the majority of the workforce, at 10% of
salary. The annual bonus opportunity and
PSP opportunity will be 150% of salary and
200% of salary, respectively, as is applicable
for each Executive Director. Full details can
be found on pages 115 to 117.
Chairman and Non Executive Director
fees
During the year the Committee, with the
assistance of Korn Ferry, reviewed the
Chairman’s fee. Recognising that the fee level
had not been reviewed since July 2018 (and
Irene Dorner was brought into the role on the
same fee as her predecessor) and that the
time commitment required for the proper
performance of the role over this period has
significantly increased, the fee was increased
from £320,000 to £335,000 effective from 1
July 2021.
The Board (excluding the Non Executive
Directors) also reviewed the fee level for the
Non Executive Directors with the assistance
of Korn Ferry. Again recognising that the
base fee had not been reviewed since 2016
and the material increase in Non Executive
Director time commitment required since
then, the base fee level was increased
from £60,000 to £65,000 effective from
1 July 2021.
Corporate governance: Remuneration continued
106
Taylor Wimpey plc Annual Report 2021
Governance
Shareholder engagement
We consulted with our major shareholders
(representing almost 50% of our share
register) and shareholder representative
bodies during the year in respect of the
salary for the Group Finance Director,
performance targets and weightings for
variable pay arrangements in 2022 and the
terms of the Chief Executive’s exit package
when he leaves the business in 2022.
Feedback received from shareholders was
positive and we thank them for their support.
Irene Dorner, in her capacity as Chairman of
the Board, continued to engage with
shareholders during 2021, as noted on page
84. As a member of the Committee, Irene
was also able to engage with shareholders
on remuneration related matters, and provide
feedback to the Committee.
Looking ahead at 2022
EIS
We believe that we are now sufficiently
advanced in relation to the Board’s
environmental, social and governance (ESG)
strategy to enable an environmental measure
to be included in the 2022 EIS and have
included an environmental measure for 10%
of the overall annual bonus opportunity.
In setting an environmental measure this
year, our principal objective for the end of
2022 will be the preparation and approval by
the Board of a credible ‘Road to Zero
Carbon Plan’ which will be submitted to the
Science Based Targets initiative for approval,
leading to a published commitment to
achieve net zero carbon emissions for our
direct operations. In addition, for this year we
have also incorporated a tangible and
stretching target for a reduction in our
carbon intensity.
Our continued focus on build quality and
customer service has enabled us to further
raise standards whilst maintaining the right
level of production and to retain the overall
split between financial measures (60%) and
non-financial measures (40%), we have
reduced the weighting on these two
elements from 20% to 15% each, to
accommodate the new ESG measure.
PSP
The PSP performance measures are
unchanged for the 2022 Award cycle to
reflect current market conditions, business
forecasts for the Group, and progression
towards our strategic priorities. We are
confident that these continue to provide a
good overall balance in assessing our longer
term performance. The target range for each
measure is set out on page 117. The
financial measures represent what would be
a record year for the Company and
significant progression towards our target of
delivering an operating profit margin of
21-22% in the medium term. The customer
measure requires us to retain our strong
longer term customer scores.
Alignment to strategy
The Committee considered the performance
measures and targets for the EIS and PSP to
ensure they are aligned with the key
performance indicators (KPIs) and strategic
priorities being used across the business.
As set out in the Strategic report on pages 9
to 11, our focus remains on returning the
business to a 21-22% operating profit
margin in the medium term, increasing cash
returns for shareholders over the long term
and delivering sustainable growth.
The measures also support our commitment
to run the business in the long term interests
of all our stakeholders. The performance
measures place a focus on delivering quality
homes, providing the highest level of
customer service and minimising the impact
we have on climate change and protecting
the planet for future generations.
Approach to executive pension provision
During the year the Committee reviewed our
Policy approach to reducing the Executive
Directors’ pensions over time so that they will
align to the percentage rate applicable to
most of the workforce by 1 April 2024, which
was agreed in line with guidance at that time.
At our 2020 AGM over 98% of shareholders
voted in favour of our Policy, which set out
the above approach. At our 2021 AGM over
97% of shareholders approved the Directors’
Remuneration Report, which reiterated this
approach to pensions alignment.
As referenced above, and in line with the
Policy, on appointment as Chief Executive
Jennie Daly will receive a pension provision in
line with the rate applying to the majority of
the workforce, of 10% of salary. The pension
rate for the Group Finance Director will
continue to step down to this workforce rate
in line with the previously stated approach.
Committee changes
I will be stepping down from the Board
following the conclusion of the 2022 AGM.
Jitesh Gadhia will succeed me as Chair of
the Remuneration Committee. Jitesh is an
experienced Remuneration Committee Chair
and has provided invaluable input into the
Committee’s discussions since he joined the
Committee in March 2021. Angela Knight will
also step down from the Board and the
Committee at the conclusion of the AGM and
I’d like to take the opportunity to thank her
for her valued counsel over the last five
years. Robert Noel will join the Committee
from 26 April 2022 and will add to the
Committee’s skill sets and further enhance
the quality of its work.
Policy review during 2022
2022 is the last year for the current Policy,
therefore the Committee, led by Jitesh, will be
conducting a thorough review of the Policy
during the year ahead. As part of this review,
the Committee will consult with shareholders
and employees to gain input on any proposed
changes. The Policy will be tabled for approval
by shareholders at our 2023 AGM.
Closing remarks
On behalf of the Committee, I would like to
thank our shareholders for their continued
support during the year. On a personal note,
I would like to also express my gratitude
for the support and engagement from our
shareholders and also our employees,
that has taken place during my tenure as
Chair of the Remuneration Committee.
Gwyn Burr
Chair of the Remuneration Committee
2 March 2022
107Taylor Wimpey plc Annual Report 2021
2019 PSP Award (audited)
The 2019 PSP Award performance period ended on 31 December 2021 and the chart below shows the outcome.
Measure
Threshold Maximum
Performance
achieved
% of
maximumWeighting (20% vesting) (100% vesting)
TSR v FTSE 100 20% Median Upper quartile
TW: 25.7%
Median: 20.3%
5.8%
TSR v peer group
(a)
30% Median Upper quartile
TW: 25.7%
Median: 39.9%
0%
RONOA
(2021)
(b)
20% 26% 33% 27.9% 8.3%
Operating profit margin
(2021)
15% 19% 23% 19.3% 3.9%
Cash conversion
(2019-2021)
(b)
15% 70% 80% 70.9% 4.1%
Total 100% 22.1%
(a) The peer group is comprised of Barratt Developments, Bellway, Berkeley Homes, Countryside Partnerships, Crest Nicholson, Galliford Try, Persimmon, Redrow
and Vistry Group.
(b) The RONOA and cash conversion measures were assessed on the basis that the impact of the equity raise in 2020 was neutralised.
Remuneration at a glance
Corporate governance: Remuneration continued
EIS in respect of 2021 (audited)
The chart below shows the performance against the 2021 EIS measures.
Measure
Summary of targets
Result
% of
maximumWeighting Entry (10% vesting) Target (50% vesting) Stretch (100% vesting)
Operating profit (£) 35% £700m £780m £820m £828.6m 35%
Operating profit margin (%) 15% 17% 18% 19% 19.3% 15%
Cash conversion (%) 10% 170% 180% 190% 199.4% 10%
Build quality 20% 4.25 4.4 4.5 4.67 20%
Customer service 20% 90% 91% 92% 91.5% 15%
Total 100% 95%
One third of any EIS amount payable will be deferred into shares for three years.
108 Taylor Wimpey plc Annual Report 2021
Governance
Read more about our medium term
goals on page 9
Read more about our stakeholders
on pages 34 to 47
Read more about our financial
definitions on page 71
Read more about our KPIs on
pages 24 to 27
Policy
element Award timeline Purpose Measure
Medium
term
goals KPI Stakeholders
Year 1 Year 2 Year 3 Year 4 Year 5
Executive
Incentive
Scheme
(Annual
bonus)
(EIS)
To reward the
achievement of stretching
objectives that support
the Company’s annual
and strategic goals
Operating profit
Operating profit
margin
Cash conversion
Build quality
Customer service
Environmental
Long Term
Incentive
Plan (PSP)
To assist with retention
and the incentivisation
and motivation of senior
executives to deliver long
term returns to
shareholders
TSR v peer group
RONOA
Operating profit
margin
Customer service
Base
salary
To recruit and reward
executives of a suitable
calibre for the role and
duties required
Benefits
To provide a competitive
package of benefits to
assist with recruitment
and retention of staff
Pension
To provide competitive
retirement benefits to
assist with recruitment
and retention of staff
Proposed application of the Policy in 2022
Variable payFixed pay
Performance period Deferral / holding periods
Executive Directors’ total remuneration (audited)
The chart below compares the 2021 single figure for total remuneration for each of the Executive Directors with the equivalent figure for 2020.
During 2020, and in light of the COVID-19 pandemic, the Executive Directors took a voluntary 30% reduction in base salary and pension from
1 April 2020 to 31 July 2020 and the 2020 EIS was cancelled.
Jennie Daly
Group Operations
Director
Chris Carney
Group Finance
Director
Pete Redfern
Chief Executive
Executive
Director
Single total
remuneration figure (£’000)
£0 £3,000£2,000£1,000
2021
2020
2021
2020
2021
2020
90% 10%
£2,764
£1,427
£1,278
£1,135
40% 46% 14%
93%
7%
£517
40% 46% 14%
94% 6% £475
41%
45% 14%
Fixed pay
EIS PSP
109Taylor Wimpey plc Annual Report 2021
Introduction
This Report has been prepared by the
Committee on behalf of the Board. The 2021
Remuneration Report includes disclosures
which reflect in full the Regulations (as
defined below) on remuneration reporting,
divided into two sections:
– Remuneration Policy Report: this sets out
the Policy that was approved by
shareholders at the AGM on 23 April 2020,
describing the framework within which the
Company remunerates its Directors.
– Annual Report on Remuneration: this sets
out how the Policy was applied during
2021 and how it is proposed to be
implemented during 2022.
The Directors’ Remuneration Policy (the
Policy) and these remuneration reports have
been prepared in accordance with the
relevant provision of the Companies Act
2006 and on the basis prescribed in the
Large and Medium-sized Companies and
Groups (Accounts and Reports)
(Amendment) Regulations 2008 (the
‘Regulations’). Where required, data has
been audited by PwC and this is indicated.
Remuneration Policy Report
Remuneration Policy Report (Unaudited
information)
Our Policy was subject to a binding
shareholder vote at the AGM of the
Company on 23 April 2020 and was
approved by over 98% of shareholders who
voted. The three year life of that Policy will
expire at the 2023 AGM when we will be
required to seek binding shareholder
approval for a new Policy.
The Policy has been included within this
report for readers to assess how we have
implemented remuneration arrangements
during 2021 and how we intend to
implement arrangements in 2022. Factual
and implementation data has been updated
where relevant (e.g. scenario charts and
details of service contracts). The Policy, as
approved by shareholders, can be found on
pages 112 to 120 of the 2019 Annual Report
and Accounts.
The Policy is designed to ensure that the
remuneration framework will support and
drive forward the Taylor Wimpey strategy
by both challenging and motivating the
Executive Directors and the senior
management team to deliver it, and this will
in turn drive value for our shareholders whilst
having due regard to our other stakeholders.
The Policy is set out in this report and is
also available to view on the Company’s
corporate website.
When the Committee designed the Policy,
they considered the factors in Provision 40
of the Code. Full details on how clarity,
simplicity, risk, predictability, proportionality,
and alignment to culture are addressed in
the Policy can be found on page 121.
Policy overview
A key part of the Committee’s role is to
ensure that the remuneration of Executive
Directors and senior management is aligned
to the Company’s strategic objectives. It is
key that the Company is able to attract and
retain leaders who are focused and also
appropriately incentivised to deliver the
Company’s strategic objectives within a
framework that is aligned with the long term
interests of the Company’s shareholders.
This alignment is achieved through
a combination of:
– Deferral into shares of a percentage
of the EIS.
– A two year retention period for vested
PSP Awards.
– Share ownership guidelines which require
executives to build up holdings of Taylor
Wimpey shares, either directly or by
retaining vested PSP Awards and deferred
EIS amounts.
– Post-employment shareholding
requirement.
The above requirements ensure that a
significant percentage of the overall
remuneration package of our Executive
Directors and senior management is subject
to performance. With all packages for our
Executive Directors substantially geared
towards meeting challenging targets set
under the EIS and PSP, the Committee
believes that the pay and benefits of its
Corporate governance: Remuneration continued
1. Salary is £642,247 and £501,025 for Jennie Daly and Chris Carney. Jennie Daly’s salary is pro rata between her salary as Group Operations Director and Chief Executive.
Chris Carney’s salary is the salary he will receive in 2022.
2. Benefits are £41,938, and £20,581 for Jennie Daly and Chris Carney, respectively, being the 2021 value.
3. Pension is 10% for Jennie Daly and 14% of salary for Chris Carney.
4. For the EIS the target and maximum award is 75% and 150% of base salary, respectively, as applicable for 2022.
5. For the PSP the target (assumed for these purposes to be at threshold performance) and maximum are 40% and 200% of base salary, respectively, as applicable for
2022. An indication of the maximum remuneration receivable assumes a share price appreciation of 50% during the period in which the award is subject to underpins.
The basis of the calculation of the share price appreciation is that the share price embedded in the calculation for the ‘maximum’ bar chart is assumed to increase by
50% across the performance period.
Illustration of the Remuneration Policy for 2022
The charts below illustrate the level and mix of remuneration based on the Policy depending on the achievement of below target, targetand
maximum for the Executive Directors under the Policy.
Maximum
(with share
price growth)
Below
target
Target Maximum Maximum
(with share
price growth)
Below
target
Target Maximum
Jennie Daly
Chief Executive Designate
£756 £1,533
£3,210
£3,960
100%
31%
23%
30%
47%
49%
20%
Fixed pay EIS PSP 50% share price growth on PSP
0
1,000
2,000
3,000
4,000
(£000’s)
Chris Carney
Group Finance Director
£594 £1,169 £2,331 £2,821
50%
100%
25%
32%
32%
43%
18%
110 Taylor Wimpey plc Annual Report 2021
Governance
Element
Purpose and
linktostrategy Operation Maximum
Performance
targets
Salary
To recruit and reward
executives of a suitable
calibre for the role and
duties required.
Salaries are normally reviewed annually to ensure that
they remain positioned appropriately. There is no
automatic entitlement to an increase each year.
Salary level and increases take into account
the following:
– The performance, role and responsibility of each
individual Director.
– The economic climate, general market conditions
and the performance of the Company.
– The level of pay awards across the rest of
the business.
– Salary levels in comparably-sized companies and
other major housebuilders.
The maximum annual salary increase will not
normally exceed the average increase which
applies across the wider workforce.
However, larger increases may be awarded
in certain circumstances including but not
limited to:
– Increase in scope or responsibilities
of the role.
– To apply salary progression for a newly /
recently appointed Director.
– Where the Director’s salary has fallen
below the market positioning.
Company and
individual
performance are
factors considered
when reviewing
salaries.
Chairman
ofthe Board
and Non
Executive
Director fees
The Chairman and Non
Executive Directors’ fees
should be in line with
recognised best practice
and be sufficient to attract
and retain high calibre
non executives.
Fees consist of a single consolidated fee for the
Chair, an annual fee for the other Non Executives and
additional fees for roles such as the Chair of the Audit
Committee, Chair of the Remuneration Committee
and Senior Independent Director.
Set by reference to the responsibilities undertaken by
the non executive, taking into account that each Non
Executive Director is expected to be a member of the
Nomination Committee and / or the Audit Committee
and / or Remuneration Committee.
Reviewed periodically but generally annually and at
least every other year. Takes into account levels in
comparably-sized companies and other major
housebuilders.
Non Executive Directors do not participate in
any incentive, share scheme, benefits-in-kind
or pension arrangements.
Aggregate annual limit of £1 million imposed
by the Company’s Articles of Association.
N/A
Other
benefits,
including
benefits-
in-kind
Provides a competitive
package of benefits to
assist with recruitment
and retention of staff.
The main benefits offered:
– Company-provided car or a cash allowance in lieu.
– Provision of a fuel card.
– Life assurance.
– Private medical insurance.
– A 5% discount on the price of a new home
acquired from the Group.
The value of a company-provided car or a
cash allowance in lieu is of a level
appropriate to the individual’s role and is
subject to review from time to time. The fuel
card covers the cost of all fuel, for both
business and personal use.
Life assurance of up to four times basic salary.
For home purchases, the price discount is
calculated at the plot release price less the
average discount to third party buyers for
that house type on that development, less a
further 5% employee discount. No more than
one home per annum can be acquired at a
discount under the scheme; and no more
than three homes can be acquired in a
five-year period. The maximum discount over
a five-year period is £100,000.
N/A
Executive
Incentive
Scheme
(EIS)
Rewards the achievement
of stretching financial
performance targets and
other objectives that
support the Company’s
annual and strategic goals.
Compulsory deferral in
shares further aligns the
interests of Directors with
shareholders.
EIS awards are determined by the Committee after
the year end, based on annual performance against
targets set at the beginning of each year.
One-third of any EIS is payable in shares which are
held in trust for three years.
A malus and clawback mechanism applies to all
participants in the event of a material misstatement of
the Group’s accounts, error, misconduct, reputational
damage or corporate failure. The discovery period for
the event that would give rise to the clawback is three
years from the date of payment.
The maximum EIS opportunity for Executive
Directors is set at 150% of salary. Target is
set at 75% of salary and threshold at 0%
if performance targets fail to be achieved.
If an entry level of performance is achieved
up to 10% of maximum is payable under
each metric.
The EIS measures
are based on a
scorecard of
designated key
annual financial,
operational and
environmental
measures.
Our Remuneration Policy
Executive Directors and senior management
adequately balance reward and risk.
In line with best practice, the Committee
structures the incentives for Executive
Directors and senior management in a way
that ensures they will not raise ESG risks by
inadvertently motivating irresponsible
behaviour. More generally, the Committee
under its Terms of Reference may, where it
considers appropriate, take ESG matters into
account when considering the overall
remuneration structure and as part of its
overall discretion.
111Taylor Wimpey plc Annual Report 2021
Element
Purpose and
linktostrategy Operation Maximum
Performance
targets
Performance
Share Plan
(PSP)
Annual grants of
share-based long term
incentives assist with
retention, incentivisation
and motivation of senior
executives to achieve
long term sustainable
returns for shareholders.
A post-vesting holding
period helps align the
interests of senior
executives with those of
the Company’s
shareholders.
Executive Directors and other designated senior
executives can receive annual PSP awards.
PSP awards provide alignment with shareholders as
they deliver (subject to meeting performance
conditions) the full value of the shares, which can
increase and decrease in value over the three year
performance period.
The value of dividends or other distributions will
accrue during the performance and holding periods
and will be received with any shares that vest in
favour of participants after the applicable
performance period. Dividends will normally be
accrued and paid in shares.
Performance measures are normally measured over
three financial years.
A malus and clawback mechanism applies to all
participants in the event of a material misstatement of
the Group’s accounts, error, misconduct, reputational
damage or corporate failure. The discovery period for
the event that would give rise to the clawback is three
years from the date of payment.
The maximum award (currently in
performance shares) is normally over shares
with a face value of 200% of salary. In
exceptional circumstances this can be
increased up to 300% of salary.
The performance
conditions are
aligned to the long
term business
strategy.
The Committee
may vary the
measures that are
included in the plan
and the weightings
between the
measures from
year to year.
Awards vest at
20% for threshold
performance.
Pension
The Company aims to
provide competitive
retirement benefits that
represent an appropriate
level of cost and risk for
the Group’s shareholders.
Over five years the
pension contributions will
reduce to the level of the
workforce pension.
Pension benefits are provided through one or more of
the following arrangements:
– Personal Choice Plan;
– Taylor Wimpey Pension Scheme; or
– as a cash allowance.
Pete Redfern: cash allowance from 1 April
2022 of 15.62% of salary.
Chris Carney: cash allowance of 14% of
salary from 1 April 2022 and then reducing
annually thereafter by 2% of salary until the
pension rate is the same as the majority of
the workforce.
Jennie Daly: 10% of salary from 26 April
2022, aligned to the rate applicable to the
majority of the workforce.
Company contributions to any pension
scheme in respect of a new Executive
Director will be in line with the pension
contribution rate applying to the majority of
the workforce, currently 10% of salary.
N/A
All-employee
share plans
All employees including
Executive Directors are
encouraged to become
shareholders through the
operation of all-employee
share plans such as the
HMRC tax-advantaged
Sharesave plan and a
Share Incentive Plan (SIP).
The Sharesave plan and SIP have standard terms
under which all UK employees with at least three
months’ service can participate.
Sharesave: Employees can elect for a
savings contract of either three or five years,
with a maximum monthly saving set by
legislation or by HMRC. Options can be
exercised during the six months following the
end of the contract.
SIP: Employees can elect to contribute an
amount per month or per tax year by one or
more lump sums.
The maximum saving or contribution level is
set by legislation or Government from time to
time and the Committee reserves the right to
increase contribution levels to reflect any
approved Government legislative changes.
N/A
Shareholding
guidelines
Encourages greater levels
of shareholding and aligns
employees’ interests with
those of shareholders.
Executive Directors are expected to achieve and
maintain a holding of the Company’s shares at least
equal to 200% of salary and until this level is
achieved, are required to retain no less than 50% of
the value of any vested EIS or PSP awards, after tax.
A post-employment shareholding requirement will
require Executive Directors to hold 200% of salary, or
their shareholding level at the time of cessation if their
200% shareholding requirement has not yet been
met, for at least two years. This requirement may be
reduced by the Committee in exceptional
circumstances, such as serious ill-health.
Executive Directors: 200% of salary. N/A
The Committee may amend this shareholder approved Policy to take account of changes to legislation, taxation and other supplemental and
administrative matters without the necessity to seek shareholder approval for those changes.
Corporate governance: Remuneration continued
Our Remuneration Policy continued
112
Taylor Wimpey plc Annual Report 2021
Governance
Committee discretion
The Committee recognises that the exercise
of discretion must be undertaken in a careful
and considered way as it is an area that will
rightly come under scrutiny from
shareholders and other stakeholders. The
Committee confirms that any exercise of
discretion would be within the available
discretions set out in this Report and that the
maximum levels available under any relevant
plans would not be exceeded. There would
be full disclosure in the following Directors’
Remuneration Report and major investors
would be consulted if appropriate.
With regard to both the EIS and the PSP, the
Committee, consistent with market practice,
retains discretion over a number of areas
relating to the operation and administration
of these plans but in all cases within the
applicable scheme rules.
During the year, other than to determine that
Pete Redfern should be treated as a good
leaver for incentive plan purposes, the
Committee did not exercise any discretion
to adjust any formula driven remuneration
outturns.
How shareholder views are taken into
account
The Committee regularly engages with the
Company’s largest shareholders and
shareholder representative bodies regarding
the ongoing Policy and its implementation,
and will take into account any feedback when
determining any changes that might apply.
The last such consultation took place in
December 2021, when we consulted with
major shareholders representing 50% of our
issued share capital, and included the salary
for the Group Finance Director, performance
targets and weightings for variable pay
arrangements proposed for 2022 and
summarised the terms of the Chief
Executive’s exit package for when he leaves
the business in 2022.
Overall shareholders were positive in
their feedback.
Wider workforce policies and practices
The Committee is mindful of remuneration
arrangements across the business and
regularly receives reports regarding wider
workforce policies and pay practices.
Further details on this can be found on
pages 121 to 123.
How the EIS and PSP measures and
targets are chosen
The performance measures that are used for
each of the EIS and PSP have been selected
to reflect the Group’s key strategic goals and
are designed to align the Executive Directors’
and senior management’s interests with
those of the Company’s shareholders and
wider stakeholders.
The Committee will continue to review the
choice of performance measures and the
appropriateness of the performance targets
each year. Targets are set based on a sliding
scale that takes account of internal planning
and external market expectations for the
Company. Maximum rewards require
substantial out-performance of our
challenging plans approved at the start of
each year, with a significantly lower level of
rewards available for delivering threshold
performance levels.
The proposed measures for the 2022 EIS and
PSP are set out on pages 116 and 117.
External non executive director
positions
Subject to Board approval and provided that
such appointments fall within the general
requirements of the Code (and do not give
rise to any conflict issues which cannot be
managed by the Board and the Executive
Director), Executive Directors are permitted
to take on one non executive position with
another company. Executive Directors are
permitted to retain their fees in respect of
such positions. Details of any external
positions held by the Executive Directors
can be found in their biographies on pages
74 and 75.
Remuneration Policy on recruitment or
promotion
Base salary levels will be set in accordance
with the Policy, taking into account the
experience and calibre of the individual.
Where appropriate, the Company may offer
a below market salary initially with a view
to making above market and workforce
increases over a number of years to reach
the desired salary positioning, subject to
individual and Company performance.
Benefits will be provided in line with those
offered to other Executive Directors and
pension will be provided in line with the wider
workforce, and relocation expenses will be
provided if necessary. Tax equalisation may
also be considered if a new Executive Director
is adversely affected by taxation due to their
employment with the Company. Legal fees
and other costs incurred by the individual may
also be paid by the Company, if considered
appropriate and reasonable to do so.
The variable pay elements that may be
offered will be subject to the maximum levels
described in the Policy table on pages 111
and 112. The Company may also consider
applying different performance measures if it
feels these more appropriately meet the
strategic goals and aims of the Company
whilst incentivising the new appointee.
Set performance measures aligned with the strategy
Set stretching targets to drive performance and taking into
account the wider environment
Engage with shareholders and employees on proposed arrangements
Ensure that there is connectivity with the wider workforce’s annual
arrangementsto drive consistent performance
How the EIS and PSP measures and targets are chosen
113
Taylor Wimpey plc Annual Report 2021
Terms of engagement
The terms of engagement of the Chairman of the Board and the Non Executive Directors are regulated by letters of appointment over a term
of three years, which are reviewed annually. Both the Company and the aforementioned Directors (including the Chairman) have a notice period
of six months and the Directors are not entitled to compensation on termination other than for the normal notice period if not worked out.
Name Date of appointment as Director Term of appointment
Notice period by
Company
(months)
Notice period by
Director (months)
Irene Dorner 1 December 2019 3 years, reviewed annually 6 6
Gwyn Burr 1 February 2018 3 years, reviewed annually 6 6
Jitesh Gadhia 1 March 2021 3 years, reviewed annually 6 6
Scilla Grimble 1 March 2021 3 years, reviewed annually 6 6
Angela Knight 1 November 2016 3 years, reviewed annually 6 6
Robert Noel 1 October 2019 3 years, reviewed annually 6 6
Humphrey Singer 9 December 2015 3 years, reviewed annually 6 6
In the case of an external hire, the Company
may choose to buy-out any incentive pay or
benefit arrangements which would be forfeited
on leaving the previous employer. This will
only occur where the Company feels that
it is a necessary requirement to aid the
recruitment. The replacement value would
be provided for, taking into account the
form (cash or shares), timing and expected
value (i.e. likelihood of meeting any existing
performance criteria) of the remuneration
being forfeited. Replacement share awards, if
used, will be granted using Taylor Wimpey’s
existing share plans wherever and to the
extent possible, although in exceptional
circumstances awards may also be granted
outside of these plans if necessary and
permitted under the Listing Rules. To ensure
alignment from the outset with shareholders,
malus and clawback provisions may also
apply where appropriate and the Committee
may require new Executive Directors to
acquire Company shares up to a pre-agreed
level. Shareholders will be informed of any
buy-out payments at the time of appointment.
In the case of an internal hire including a
promotion, as previously reported, the
Company will honour any commitments
entered into prior to their appointment to the
Board even where it is not consistent with
the Policy prevailing at the time such
commitment is fulfilled.
Details of the remuneration arrangements for
Jennie Daly as Chief Executive can be found on
page 106.
Directors’ contracts and policy on
payments for loss of office
It is the Company’s policy that Executive
Directors should have contracts of
employment providing for a maximum of one
year’s notice period either way consistent
with Provision 39 of the Code.
Name Date of appointment Notice period
Pete Redfern 3 July 2007 12 months
Chris Carney 20 April 2018 12 months
Jennie Daly 20 April 2018 12 months
As previously announced Pete Redfern will
be stepping down from the Board on 26
April 2022 and will remain available to ensure
an orderly transition until the end of his notice
period on 8 December 2022. Pete’s leaving
arrangements are in line with the Policy and
further details are provided on page 118.
Jennie Daly and Chris Carney are proposed
for re-election at the 2022 AGM. Chris and
Jennie will have at that date an unexpired
service contract of one year.
Each of the Executive Directors’ service
contracts provides for:
– The payment of a base salary.
– An expensed company car or a cash
allowance in lieu, a fuel allowance, life
assurance and private medical insurance.
– Employer’s contribution to a pension.
– A notice period by either side of 12 months.
– A provision requiring a Director to mitigate
losses on termination.
– Participation in the EIS.
– Participation in one or more long term
incentive plan.
The Company has the right to terminate
contracts by making a payment in lieu of
notice. Any such payment will typically reflect
the individual’s salary, benefits in kind and
pension entitlements. The Company will be
mindful, on termination of an Executive
Director’s employment, of the need to
mitigate costs and phase payments, which
cease when the individual obtains an
alternative role. There are no change of
control provisions that apply in relation to the
service contract of any Executive Director.
Other than in certain ‘good leaver’
circumstances (which could include
redundancy, ill-health or retirement), no
payment would usually be due under the
EIS unless the individual remains employed
at the payment date. Any payment to a good
leaver under the EIS would be based on
an assessment of their and the Company’s
performance over the applicable period
and pro-rated for the proportion of the
EIS year worked.
With regard to long term incentive plan
awards, the rules of the PSP provide that,
other than in certain good leaver
circumstances, awards lapse on cessation
of employment. Where an individual is a
good leaver, the Committee’s normal policy
is for the award to vest at the normal time
following the application of performance
targets and a pro-rata reduction to take
account of the proportion of the applicable
performance period outstanding post the
cessation. The Committee also has
discretion for both early vesting and reducing
the impact of pro-rating. In doing so, it will
take account of the reason for the departure
and the performance of the individual
through to the time of departure.
In situations where an Executive Director is
dismissed, the Committee reserves the right
to make additional exit payments where such
payments are made in good faith:
– In discharge of an existing legal obligation
(or by way of damages for breach of such
an obligation).
– By way of settlement or compromise
of any claim arising in connection with
the termination of a Director’s office
or employment.
– To contribute towards the individual’s legal
fees and fees for outplacement services.
Service contracts for all Executive Directors
and letters of appointment for all Non Executive
Directors are available for inspection at the
Company’s registered office during normal
business hours and at the AGM.
Legacy arrangements
Any commitment which is consistent with the
approved Remuneration Policy in force at the
time that the commitment was made will be
honoured, even where it is not consistent
with the policy prevailing at the time such
commitment is fulfilled.
Corporate governance: Remuneration continued
114
Taylor Wimpey plc Annual Report 2021
Governance
Annual Report onRemuneration
The Annual Report on Remuneration will (together with the Chair’s Statement and Remuneration at a Glance on pages 105 to 109) be put to
an advisory shareholder vote at the AGM on 26 April 2022. Details of the resolution are set out in the Notice of Meeting on page 186.
Total single figure of remuneration (audited)
The table below sets out the total single figure of remuneration received by each Executive Director for their service and performance in 2021
(or for the performance period ending 31 December 2021 in respect of the PSP) and 2020 comparison, and total fees received by the
Chairman and each Non Executive Director in 2021 and 2020.
£’000 Year
Fees /
salary
(a)
Benefits
(b)
EIS
(c)
PSP
(d)
Pension
(e)
All-
employee
plans
(f)
Total
Total fixed
remuneration
Total variable
remuneration
Executive
Pete Redfern 2021 887 45 1,270 390 170 2 2,764 1,104 1,660
2020 787 55 — 118 173 2 1,135 1,017 118
Chris Carney 2021 467 8 668 195 77 12 1,427 564 863
2020 395 9 — 39 73 2 518 479 39
Jennie Daly 2021 406 19 581 182 67 23 1,278 515 763
2020 360 17 — 29 67 2 475 446 29
Non Executive
Irene Dorner 2021 328 — — — — — 328 328 —
2020 248 — — — — — 248 248 —
Gwyn Burr 2021 90 — — — — — 90 90 —
2020 70 — — — — — 70 70 —
Jitesh Gadhia (appointed 1 March 2021) 2021 53 — — — — — 53 53 —
2020 — — — — — — — — —
Scilla Grimble (appointed 1 March 2021) 2021 53 — — — — — 53 53 —
2020 — — — — — — — — —
Angela Knight 2021 63 — — — — — 63 63 —
2020 54 — — — — — 54 54 —
Robert Noel 2021 80 — — — — — 80 80 —
2020 65 — — — — — 65 65 —
Humphrey Singer 2021 80 — — — — — 80 80 —
2020 70 — — — — — 70 70 —
Total 2021 2,507 72 2,519 767 314 37 6,216 2,930 3,286
2020 2,049 81 — 186 313 6 2,635 2,449 187
(a) The 2020 figure takes into account the voluntary 30% reduction in salaries and fees from 1 April to 31 July 2020.
(b) Benefits include non-cash payments to Pete Redfern, Chris Carney and Jennie Daly for private medical insurance, life assurance and company car provision (the benefit
value of the Company car provided was £29,925, £806 and £14,516 respectively).
(c) The 2021 EIS outcome can be found on page 108. The 2020 EIS for the Executive Directors was cancelled in light of the COVID-19 pandemic. One third of the 2021 EIS
will be deferred into shares for three years. These shares will not be subject to any further performance or non-performance measures.
(d) This column shows the vesting in respect of PSPs with performance periods ending in 2021 and 2020 as set out in the table on the next page. The 2020 figure includes
the value of dividends accrued during the performance period and payable on vesting and has been restated to reflect the share price on the date the award vested. The
2021 figure includes the value of dividends accrued during the performance period and this amount will be paid in shares and will be subject to the same two year
holding period.
(e) For Pete Redfern these figures represent the cash allowance payable. For Chris Carney and Jennie Daly these figures represent pension contributions up to the amount
permissible under HMRC rules and cash allowances beyond that level.
(f) These figures represent the value of the matching shares under the Share Incentive Plan, the value of the 20% discount on the Sharesave option price, and the payment
of Special Dividends accrued on Sharesave Options exercised by Chris Carney and Jennie Daly and grossed-up for Income Tax and National Insurance.
Salaries (audited)
As explained on page 106, during 2021 the Committee reviewed Chris Carney’s salary and in light of his excellent performance and the
expanded remit of his role, increased his salary from £447,372 to £490,000, with effect from 1 July 2021. The Committee reviewed the
Executive Directors’ salaries and decided to award an increase of 3% to Chris Carney, with effect from 1 April 2022, in line with general
workforce increases. Pete Redfern will not receive this increase given he is currently serving his notice period. Upon assuming the role
of Chief Executive on 26 April 2022, Jennie Daly’s salary will be set at £750,000.
The salaries of the Executive Directors as at 1 April 2022 will therefore be as follows:
Executive Director Salary at 1 April 2021 Salary at 1 April 2022
(a)
Increase
Pete Redfern £891,644 £891,644 0%
Chris Carney £447,372 £504,700 13%
Jennie Daly £408,000 £750,000 84%
(a) As at 26 April 2022 for Jennie Daly.
115Taylor Wimpey plc Annual Report 2021
Executive Incentive Scheme (Annual bonus) (EIS) (audited)
EIS in respect of 2021
The outcome of the 2021 EIS is 95% of the maximum and detailed disclosure of the targets and performance against them can be found
on page 108. One third of this amount will be paid in shares and be required to be retained in the Company’s Employee Benefit Trust for three
years. These shares will not be subject to any further performance or non-performance measures.
EIS for 2022
In line with the Policy, the Directors will have the opportunity to earn up to 150% of salary under the 2022 EIS. The opportunity for Jennie Daly
will be based on her pro-rata salary following her promotion to Chief Executive from 26 April 2022. Pete Redfern will be eligible to participate in
the 2022 EIS for the period he is actively employed in the business up to 26 April 2022 and further details can be found on page 118.
The EIS performance measures and their weightings for 2022 are shown in the table below. The precise details of the targets themselves are
deemed to be commercially sensitive as they relate to the current financial year. However, detailed retrospective disclosures of the targets and
performance against them will be provided next year in the usual way. The targets for the financial measures have been set so that entry
performance is well ahead of 2021 outturn and achieving target will be at the top end of market expectations; the achievement of the stretch
targets would require strong outperformance in favourable market conditions. The Committee is satisfied that the targets are sufficiently
challenging. The Committee has introduced an environmental measure which will focus the business on the delivery of a credible plan and
committed date to reach zero carbon and reduce our carbon intensity from our operations by 10% from the 2019 baseline data.
Weighting Rationale
Operating profit
(a)
35% Increase aggregate profit.
Operating profit margin
(a)
15%
Prioritise focus on capturing house price increases and improving cost
discipline throughout the business.
Cash conversion
(a)
10% To maximise the generation of cashflow from profits.
Build quality
(b)
15%
Deliver high quality homes with the need for less remediation to
underpin our strategic objective.
Customer service
(c)
15% Continue to deliver high levels of customer service.
Environmental 10%
The preparation and approval by the Board of a credible ‘Road to Zero
Carbon Plan’ and a reduction in carbon intensity.
(a) Read more about our financial definitions on page 71.
(b) The average score, out of six, achieved during an in-depth annual review of construction quality on a site-specific basis.
(c) Percentage of customers who would recommend Taylor Wimpey to a friend as measured by the National New Homes Survey undertaken by the NHBC on behalf of the
Home Builders Federation (HBF) eight weeks after legal completion.
Performance Share Plan (PSP) (audited)
PSP awards included in the 2021 and 2020 total remuneration figures
The outcome for the 2019 PSP Award against the performance measures can be found on page 108. The table below sets out the number of
shares each Executive Director received after the vesting of the 2018 and 2019 PSP Awards.
Name
Number of
shares
granted
Value of
award at
grant (£’000)
End of
performance
period
Standard
proportion of
award
vesting
(a)
Number of
shares
vesting Vesting date
Value
attributable to
share price
increase
Value of PSP
shares
vesting
(£’000)
Value of
dividend
equivalents
(£’000)
Value of
standard
proportion of
PSP (single
figure) (£’000)
2021
(a)
Pete Redfern 947,769 1,714 31/12/2021 22.1% 209,456 03/03/2022 — 334 56 390
Chris Carney 475,532 860 31/12/2021 22.1% 105,092 03/03/2022 — 167 28 195
Jennie Daly 442,355 800 31/12/2021 22.1% 97,760 03/03/2022 — 156 26 182
2020
(b)
Pete Redfern 898,423 1,672 31/12/2020 6.6% 59,295 02/03/2021 — 98 20 118
Chris Carney 294,149 548 31/12/2020 6.6% 19,413 02/03/2021 — 32 7 39
Jennie Daly 225,648 420 31/12/2020 6.6% 14,892 02/03/2021 — 24 5 29
(a) The 2019 PSP Award is included in the 2021 total remuneration figure. The performance against each of the performance measures are set out on page 108. A share
price of 159.4 pence was used to calculate the value of the award vesting on 3 March 2022 as this was the average share price for the dealing days in the last three
months of the performance period. This figure will be recalculated in the 2022 Annual Report to reflect the share price on the date the Award vests. Dividend equivalents
will be paid in shares.
(b) The 2018 PSP Award is included in the 2020 total remuneration figure. The overall performance of the award can be seen on page 114 of the 2020 Annual Report and
Accounts. The closing share price on the date the Award vested has been used (165.9 pence). Dividend equivalents were paid in cash.
PSP awards granted during 2021
Type % of salary
Face value of
award (£’000)
Number
of shares
(a)
End of
performance
period Performance measures
Threshold
(20%)
Maximum
(100%)
Pete Redfern Nil-cost options 200% 1,748 1,004,687 31/12/2023
TSR v peer group (40%) Median
Upper
quartile
RONOA (20%) 18.5% 20.5%
Cash conversion (20%) 22% 25%
Customer service (20%) 78% 81%
Chris Carney Nil-cost options 200% 877 503,400 31/12/2023
Jennie Daly Nil-cost options 200% 800 459,726 31/12/2023
(a) The share price used to determine the number of shares awarded was based on the average closing share price (174.02 pence) over the three days prior to grant
(4, 5 and 8 March 2021).
Corporate governance: Remuneration continued
116
Taylor Wimpey plc Annual Report 2021
Governance
PSP awards to be granted in 2022
In line with the Policy, Chris Carney and Jennie Daly will each receive a PSP Award over shares worth 200% of salary in 2022 which will be
subject to the performance measures shown in the table below. Given the long term nature of the Award, this will be based on Jennie Daly’s
salary as Chief Executive as she will be in the role for the majority of the performance period. As noted on page 118, Pete Redfern will not
receive an Award in 2022. The performance measures remain the same as the 2021 Award as the Committee consider that these provide a
good overall balance in assessing our longer term performance against the business strategy. The targets have been reviewed to reflect
current market conditions and business forecasts for the Group.
The PSP will operate in accordance with the Policy as set out on pages 111 and 112. Awards vest on a straight-line basis between the above
threshold and maximum vesting levels. Malus and clawback provisions are in line with the Code requirements and the Committee is satisfied
that they remain fully enforceable if everneeded. Performance will be measured over a three year performance period and will besubject to a
two year post-vesting holding period. The Committee has reviewed the targets and is confident they are stretching and appropriate in the
present market outlook for the medium term.
Performance measure Weighting Threshold (20%) Maximum (100%) Rationale
TSR v peer group
(a)
40% Median
Upper
quartile
Align the rewards received by executives with
the returns received by shareholders.
Operating profit margin
(2022-2024) 20% 19% 21% Maintain focus on cost and process discipline.
RONOA (2022-2024) 20% 23% 25% Maintain focus on driving increased capital efficiency.
Customer service
(2022-2024)
(b)
20% 78% 81% To improve and deliver enhanced customer service.
(a) The peer group is an unweighted index comprising Barratt Developments, Bellway, Berkeley Homes, Countryside Partnerships, Crest Nicholson, Persimmon, Redrow
and Vistry Group.
(b) This will be based on the single question ‘Would you recommend your builder to a friend?’ from the independently measured NHBC 9-month survey, therefore will be on
a different basis to the EIS customer service measure.
Directors’ pension entitlements (audited)
The Group Finance Director’s pension contribution will be further reduced in 2022 in line with the agreed incremental reduction over a five year
period to 10% of base salary, the level of pension contribution available to the majority of the wider workforce. Therefore, from 1 April 2022
Chris Carney’s pension contribution will be 14% of base salary. Jennie Daly’s pension contribution will be 14% of base salary from 1 April until
25 April, when she assumes the role of Chief Executive, at which point it will reduce to 10% of salary. As such, whilst the Directors’ rate of
pension contribution continues to reduce to the workforce rate as previously agreed, the Company was not fully compliant with Provision 38
of the Code during 2021 whilst the rate for incumbent Directors was above that of the workforce.
Defined benefit scheme
Pete Redfern is a deferred member of the Taylor Wimpey Pension Scheme (TWPS). The following table sets out the benefits payable in
accordance with the rules of the TWPS.
Director Normal Retirementage
(a)
Accrued pension as at31/12/2020
(£)
Increase in accrued pension from
31/12/2020 to31/12/2021
(£)
Accrued pension as at31/12/2021
(b)
(£)
Pete Redfern 62 16,335 71 16,406
(a) In the event of early retirement before Normal Retirement Age, no additional benefits are paid. Pensions that are put into payment before Normal Retirement Age are
reduced on actuarial advice to reflect early payment in line with the rules of the TWPS.
(b) The pension benefits are based on service up to 31 August 2010 when the George Wimpey Staff Pension Scheme (GWSPS) closed to future accrual. Members of the
GWSPS were transferred into the Taylor Wimpey Pension Scheme (TWPS) on 1 October 2013 and there was no change to members’ benefit entitlement. Pensions for all
deferred members accrued up to 5 April 2009 will revalue in deferment in line with inflation subject to an overall cap of 5% per annum. Pensions accrued after 5 April
2009 will revalue in deferment in line with inflation subject to an overall cap of 2.5% per annum. Once in payment, pensions accrued up to 5 April 2006 are guaranteed to
increase in line with inflation limited each year to 5%, pensions accrued after 5 April 2006 are guaranteed to increase in line with inflation limited each year to 2.5%.
Pete Redfern received a cash allowance of £169,666 (2020: £173,244) in lieu of Company pension contributions.
Non-Group pension arrangements
The value of Company pension contributions in 2021 for Chris Carney and Jennie Daly was:
2020
(£)
2021
(£)
Chris Carney 5,501 4,003
Jennie Daly 5,501 4,029
Chris Carney and Jennie Daly also received pension allowances of £72,828 (2020: £67,745) and £62,930 (2020: £61,299) respectively in lieu
of Company pension contributions over the Tapered Annual Allowance limit introduced in April 2016.
117Taylor Wimpey plc Annual Report 2021
Executive Directors’ interests in the Company’s share schemes (audited)
Details of the options and conditional awards over shares held by the Executive Directors who served during the year are as follows:
Maximum
potential
shares as at
01/01/2021
Additional
maximum
potential
awarded
during the
year
Dividend
re-investment
shares added
during the
year
Exercised
during
the year
Lapsed
during
the year
Maximum
potential
shares as at
31/12/2021
(a)
Maximum shares vesting in:
2022 2023 2024 2025 2026
Pete Redfern
Deferred shares (EIS)
(b)
625,225 – 21,875 181,313 – 465,787 266,251 199,536 – – –
PSP
(c)
2,701,954 1,004,687 – 59,295 839,128 2,808,218 947,769 855,762 1,004,687 – –
Sharesave Plan 18,863 – – – – 18,863 18,863 – – – –
Total 3,346,042 1,004,687 21,875 240,608 839,128 3,292,868 1,232,883 1,055,298 1,004,687 – –
Chris Carney
Deferred shares (EIS)
216,311 – 10,659 – – 226,970 126,855 100,115 – – –
PSP
(c)
1,199,049 503,400 – 19,413 274,736 1,408,300 475,532 429,368 503,400 – –
Sharesave Plan
(d)
20,891 10,545 – 11,460 – 19,976 9,431 – – – 10,545
Total 1,436,251 513,945 10,659 30,873 274,736 1,655,246 611,818 529,483 503,400 – 10,545
Jennie Daly
Deferred shares (EIS)
171,811 – 8,467 – – 180,278 88,974 91,304 – – –
PSP
(c)
1,059,584 459,726 – 14,892 210,756 1,293,662 442,355 391,581 459,726 – –
Sharesave Plan
(d)
22,921 21,091 – 22,921 – 21,091 – – – – 21,091
Total 1,254,316 480,817 8,467 37,813 210,756 1,495,031 531,329 482,885 459,726 – 21,091
(a) All outstanding awards are options. The Directors do not hold any vested but unexercised share options.
(b) Pete Redfern exercised his EIS deferred shares on 26 March 2021 and the closing share price was 180.1 pence. These shares were awarded on 23 March 2018 using a
share price of 183.60 pence to calculate the number of shares awarded.
(c) The Executive Directors exercised their 2018 PSP Award on 2 March 2021 and the closing share price was 165.9 pence. These shares were awarded on 6 March 2018
using a share price of 186.13 pence to calculate the Award.
(d) Chris Carney and Jennie Daly both exercised their Sharesave Plan on 13 December 2021 and the closing share price was 167.3 pence. These shares were granted on 5
October 2016 and the option price was 130.88 pence.
Vesting of the deferred shares and Sharesave Plan options are not dependent on any performance conditions. The vesting of the PSP is
subject to the achievement of performance conditions and 20% will be receivable if threshold performance is achieved. There have been no
variations to the terms and conditions or performance criteria for outstanding share awards during the financial year. The closing share price
on 31 December 2021 was 175.5 pence and the range during the year was 146.4 pence to 191.7 pence.
Pete Redfern’s remuneration arrangements in relation to his departure
On 8 December 2021 the Company announced that Pete Redfern
would be stepping down from the Board as Chief Executive in 2022
once a suitable successor had been found and following a full
handover. Following a thorough recruitment and selection process
Jennie Daly was appointed as Pete’s successor with effect from the
2022 AGM. As such Pete will step down from the Board on 26 April
2022 and will remain available to the business to ensure an orderly
transition until his notice period ends on 8 December 2022.
On behalf of the Board, the Committee considered his remuneration
arrangements and can confirm that they are in line with his
contractual entitlements and the shareholder approved Policy.
Base salary, benefits and pension
Pete will continue to receive salary, benefits and pension in accordance
with his contractual entitlements until he leaves the business.
He will not receive the 3% salary increase for 2022 which was
approved for the wider workforce and Chris Carney, and his pension
contributions will reduce to 15.62% of salary, on 1 April 2022 as
previously agreed. Outstanding interests in all-employee share plans
will be treated in line with standard leaver terms.
EIS
He will be treated as a ‘good leaver’ in respect of the EIS and may
receive a bonus for 2022 performance pro-rated to the time he is
actively employed in the business up to 26 April 2022 and subject to
the achievement of the performance measures. Any award made will
be paid at the usual time in March 2023, with one-third being
deferred in shares and released to him after three years.
Pete’s unvested EIS deferred shares from the 2019 EIS will
vest at the normal time, with any shares added via the Dividend
Re-Investment Plan, in March 2023. One-third of his 2021 EIS will
be paid in shares in March 2022, and will be released at the normal
time after three years.
PSP
Pete will also be treated as a ‘good leaver’ in respect of his
outstanding PSP awards. His 2019 Award vested at the normal time
in March 2022. Pete’s 2020 and 2021 Awards will be pro-rated to
the date he leaves the business and will be subject to the
performance measures (as currently applicable) over the relevant
three year period. He will be required to retain any shares that vest
for the two year holding period.
No PSP Award will be made for 2022.
Post employment shareholding requirements
Pete will be required to retain shares worth at least 200% of his
salary for two years post employment. The number of shares will be
calculated based on the share price on his last day of employment.
Clawback and malus
Clawback and malus provisions will continue to apply post cessation
of employment.
Details of Jennie Daly’s remuneration package as Chief Executive are set
out on page 106.
Payments for loss of office and to former Directors
No payments have been made for loss of office or to former Directors
during 2021.
Corporate governance: Remuneration continued
118
Taylor Wimpey plc Annual Report 2021
Governance
Chairman and Non Executive Director Fees (audited)
Fee review in 2021
During the year the fees for the Chairman of the Board and Independent Non Executive Directors were reviewed and increased, recognising
the increased time commitment required since the last reviews took place in 2018 and 2016 respectively. The increases noted below took
effect on 1 July 2021.
Role
Annual fees as
at 01/04/2021
Annual fees as
at 01/07/2021
Chairman of the Board £320,000 £335,000
Independent Non Executive Director £60,000 £65,000
Senior Independent Director £17,500 £17,500
Audit Committee Chair £17,500 £17,500
Remuneration Committee Chair £17,500 £17,500
The Board’s Employee Champion £10,000 £10,000
Directors’ share interest register (audited)
In line with the approved Policy, Executive Directors’ shareholding requirements are 200% of their base salary. They are required to retain at
least 50% of their net of taxes gain arising from any shares vesting or acquired pursuant to the Company’s PSP, until such time as the
guidelines have been met. Beneficially owned shares count toward the guidelines, together with the portion of the EIS deferred into shares (on
a net of tax basis) and any vested but unexercised PSP awards.
A post-employment shareholding guideline requires Executive Directors to retain shares worth 200% of their base salary, or their shareholding
at the time of cessation if their shareholding requirement has not yet been met, for at least two years. Any shares that vest from either the PSP
or the EIS deferred shares must be held within the Company’s Employee Benefit Trust until the required shareholding level has been achieved.
The shares will then be released from the Employee Benefit Trust two years from the date of cessation of employment.
The Chairman and the Non Executive Directors are also encouraged to hold shares in the Company in order to align their interests with those
of shareholders.
Director
Beneficially owned Outstanding interests in share plans
Share interests
expressed as a
% of salary
at 01/01/2021
(ordinary shares)
(a)
at 31/12/2021
(ordinary shares)
EIS deferred shares
(gross) PSP
(b)
Sharesave
Value of shares
(including EIS
deferred shares on
a net basis) as at
31/12/2021
(c)
Irene Dorner 125,440 125,440 – – – –
Pete Redfern 2,363,494 2,396,991 465,787 2,808,218 18,863 520%
Chris Carney
(d)
376,484 400,351 226,970 1,408,300 19,976 186%
Jennie Daly
(d)
179,511 212,446 180,278 1,293,662 21,091 132%
Gwyn Burr 17,241 17,241 – – – –
Jitesh Gadhia – 100,000 – – – –
Scilla Grimble – 15,000 – – – –
Angela Knight 16,896 16,896 – – – –
Robert Noel 46,674 46,674 – – – –
Humphrey Singer 31,896 31,896 – – – –
(a) Or date appointed to the Board.
(b) Vesting is subject to the achievement of performance conditions.
(c) This has been calculated on the basis of beneficially owned shares and the net amount of EIS shares. The share price on 31 December 2021 (165.8 pence) has been
used to calculate the Executive Directors’ share interest expressed as a percentage of salary.
(d) A proportion of shares are held by a connected person.
Details of the share options exercised by the Executive Directors during the year can be found on page 118.
The only changes to the Directors’ interests as set out above during the period between 31 December 2021 and 2 March 2022 were the
regular monthly purchases of shares and 1:1 matching by the Company under the Share Incentive Plan by Pete Redfern, Chris Carney and
Jennie Daly who acquired 372, 374 and 374 respectively.
119Taylor Wimpey plc Annual Report 2021
Remuneration Committee Remit
The role of the Committee is to recommend to the Board a strategy and framework for remuneration for Executive Directors and senior
management which will attract and retain leaders who are focused and incentivised to deliver the Company’s strategic business priorities
within a framework which is aligned with the interests of our shareholders and designed to promote the long term success of the Company.
It is also responsible for reviewing wider workforce remuneration practices and policies.
Details of Committee membership and attendance at meetings can be found on page 105.
The Committee reviewed its Terms of Reference in 2021 and evaluated its own performance against them. Following this review, the
Committee confirmed that they remain appropriate. The Terms of Reference can be found on the Company’s corporate website.
No Director is involved in any decisions about their own remuneration and a conflicts of interest register is maintained by the Company
Secretary in accordance with the Company’s Conflicts of Interest Policy.
The Remuneration Committee’s activities during 2021 are set out in the table below:
Topic Activity / review
February
2021
September
2021
October
2021
December
2021
Executive and
senior management
remuneration
Reviewed benchmarking data for various
groups of senior management
Considered the forecasts for inflight EIS and
PSP awards
Considered the performance measures and
targets for the 2022 EIS and PSP
Considered the remuneration arrangements
for Pete Redfern when he leaves the
business
Wider workforce
remuneration
Reviewed the remuneration policies and
practices for the wider workforce
Considered the wider workforce bonus
arrangements alignment to senior
managements
Reviewed and approved the Group-wide
salary review
Considered the Company’s 2021 Gender
Pay Gap Report
Considered the Company’s Ethnicity Pay
Gap data
Committee governance Reviewed and agreed the Committee’s
annual plan for 2022
Received a market update from Korn Ferry
Reviewed and approved the 2020
Directors’ Remuneration Report
Reviewed the Committee’s performance
and compliance with its Terms of
Reference
Advice to the Committee
The Committee keeps itself fully informed on developments and best practice in the field of remuneration and it seeks advice from external
advisers when appropriate.
The Committee appoints its own independent remuneration advisers and during the year it continued to retain the services of Korn Ferry. Korn
Ferry is a member of the Remuneration Consultants Group and signatory to its Code of Conduct. During 2021 Korn Ferry also provided other
ad hoc remuneration services outside the scope of the Committee to the Company. Korn Ferry were appointed following a comprehensive
tender process. The Committee reviews the performance and independence of its advisers on an annual basis and is satisfied that the advice
provided is objective and independent. Korn Ferry do not have any connection with the Company or any of the individual Directors.
The Committee also receives legal advice from Slaughter and May as and when necessary. This generally relates to technical advice on share
schemes. The Committee is satisfied that the advice provided by Slaughter and May is objective and independent.
The fees paid to the Committee’s advisers in 2021 were: Korn Ferry £83,370 on a time and materials basis (2020: £62,920); and Slaughter
and May £10,000 (2020: £nil).
The Chief Executive, Group HR Director, Group General Counsel and Company Secretary, Assistant Company Secretary and Head of Reward
and Pensions each attended the Committee meetings during 2021 by invitation only, but were not present for any discussions that related
directly to their own remuneration.
Corporate governance: Remuneration continued
120
Taylor Wimpey plc Annual Report 2021
Governance
5.5%
average salary increase
Maternity and Paternity Leave Policy
enhancements made during the year
Real Living Wage Employer
accreditation in November 2021
10%
pension contribution available for the
majority of the workforce
1,307
employees received salary increases
during the year following benchmarking
outside of the annual review
(a)
61%
of employees are either already
shareholders or participate in one of our
all-employee share plans
Wider workforce remuneration
Key highlights in 2021
How the Committee addresses the requirements under Provision 40 in the Code
Principle Committee approach
Clarity – We have operated a consistent approach which is well reported in our Directors’ Remuneration Reports.
Our approach is understood internally by employees and externally with strong levels of shareholder support
Simplicity – Executive Director remuneration arrangements have been designed, in accordance with best practice,
to be as simple as possible
Risk – We mitigate risk through careful plan design, including long term performance measurement, deferral, and
shareholding requirements (including post cessation of employment) and discretion and clawback provisions
Predictability – We look carefully at the range of likely performance outcomes when setting performance target ranges for entry,
target and maximum payouts and use discretion where necessary
Proportionality – Incentive plans are determined based on a proportion of base salary so there is a sensible balance between
fixed pay and performance-linked elements
– Performance conditions are aligned to the business strategy and shareholder experience
– There are provisions to override the formula-driven outcome of incentive plans, as well as deferral and clawback
mechanisms to ensure that poor performance is not rewarded
Alignment to
culture
– Our overall reward framework embeds our purpose and values. Decisions on executive pay need to be taken in
the context of the wider stakeholder experience
Wider workforce remuneration in 2021
The Committee regularly monitors and reviews the Company-wide remuneration arrangements to ensure that they are aligned to incentives
and rewards across the Company.
The Committee reviewed, by employee level, the different elements of pay and benefits across the Company. Following this review, the
Committee considers that all employees receive a reward package that is aligned to the Company’s purpose and culture; and is market
competitive, transparent and fair.
Element Wider Workforce Senior Managers Executive Directors and GMT
Competitive salary
Bonus
Deferred bonus in shares
Long Term Incentive Plan / Medium Term Incentive Plan
Shareholding requirements
Paid holiday
Pension
All-employee share plans
Flexible benefits
Private healthcare
(a) These increases were in addition to the 2% annual increase in April 2021. As at 31 December 2021 there were 5,144 employees.
121Taylor Wimpey plc Annual Report 2021
Engagement with
the workforce
As Remuneration Committee Chair
and Employee Champion, Gwyn Burr
attended three National Employee Forum
(NEF) meetings during the year. At one of
these meetings, the NEF discussed pay
policies and practices across the Group
and how they align with the Executive
Directors’ remuneration arrangements.
The performance measures in variable
pay arrangements across the Group
were discussed in detail to explain how
the Executive Directors’ remuneration
was aligned to that of the wider
workforce and our strategy.
CEO Pay Ratios
Year Method CEO single figure
(a)
Lower quartile Median Upper quartile
Ratio 87:1 60:1 40:1
2021
(b)
Option B £2,764,290 Salary £26,883 £33,133 £50,750
Total pay and benefits £31,651 £46,455 £69,721
Ratio 39:1 26:1 20:1
2020 Option B £1,120,451 Salary £23,233 £30,600 £47,000
Total pay and benefits £28,389 £42,492 £56,844
Ratio 93:1 73:1 48:1
2019 Option B £3,023,654 Salary £27,500 £31,277 £45,621
Total pay and benefits £32,342 £41,483 £62,418
Ratio 103:1 77:1 41:1
2018 Option B £3,151,748 Salary £26,412 £26,873 £52,458
Total pay and benefits £30,745 £41,135 £76,575
(a) The 2018, 2019 and 2020 single figures disclosed have not been restated to reflect the share price on the date the 2016, 2017 and 2018 PSP awards vested.
We have chosen to do this for transparency purposes so that we are comparing the ratios disclosed in previous reports.
(b) The three representative employees were determined on 31 December 2021.
Under Option B, using the hourly rate from
our 2021 gender pay gap data, three
employees have been identified as the best
equivalents of our lower quartile, median and
upper quartile.
Option B provides a clear methodology
involving less adjustments to calculate
full-time equivalent earnings and is more
likely to produce more robust reporting year
on year. The Committee has reviewed the
results of the calculations and is satisfied that
they continue to be representative of the
respective percentiles.
Total pay and benefit figures, during the
financial year ending 31 December 2021,
have been calculated for the employee at
each quartile, and for employees either side
of the identified employees, to ensure that
the employees selected are a reasonable
representative based on their full year’s
remuneration.
As a result of the COVID-19 pandemic the
CEO single figure for 2020 was significantly
lower than in 2019. The CEO single figure
was impacted by: the voluntary 30%
reduction in Executive Directors salaries and
pension contributions from 1 April to 31 July
2020, no cash bonus being paid to
Executives Directors in response to 2020
performance and a low level of vesting in
respect of the 2018 PSP Award. The lower
CEO figure caused all three ratios for 2020 to
reduce to a greater degree than would
otherwise have been expected.
We increased the number of apprentices in
2020 which caused the lower quartile to
drop in comparison to 2019. In 2021 the
number of apprentices was less than in 2020
but higher than 2019 and this is the reason
that the lower quartile has increased on 2020
but remains lower than in 2019. Apprentices
are paid lower rates of pay and movements
in headcount can impact the lower quartile.
Ratios for 2021 remain lower than our
pre-pandemic ratios due to a combination of
the CEO single figure being lower, an
increase in the average employee salary of
5.5% over the year, and employees receiving
higher bonus payments than in previous
years. The lower CEO single figure is
predominantly due to a lower level of vesting
in respect of the 2019 PSP Award.
As has been noted on page 105, the
Committee has reviewed the remuneration
policies and practices for the wider
workforce in conjunction with the Directors’
remuneration policy review during the year.
The Committee is satisfied that there is a
good level of consistency in relation to pay
policies throughout Taylor Wimpey.
Corporate governance:
Remuneration continued
122
Taylor Wimpey plc Annual Report 2021
Governance
31/12/202131/12/202031/12/201931/12/201831/12/201731/12/201631/12/201531/12/201431/12/201331/12/201231/12/2011
Value (£) (rebased)
100
300
400
500
600
700
800
1,000
200
900
CEO remuneration (£'000)
1,000
0
3,000
4,000
5,000
6,000
7,000
8,000
10,000
2,000
9,000
Source: Thomson
Reuters Datastream.
Taylor Wimpey
Housebuilders Index
FTSE 350
CEO Total
Remuneration
0
Total shareholder return
Chief Executive historic remuneration
Year ending 31 December
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Total remuneration (£’000) 3,009 6,724 6,250 6,888 4,072 3,697 3,272 3,247 1,120 2,764
EIS (%) 95 90 90 78 80 66 93 50.6 – 95
PSP (%) 40 85 94 100 81 78 50 62.8 6.6 22.1
Total shareholder return graph and Chief Executive historic remuneration
The graph below shows the value of £100 invested in Taylor Wimpey plc on 31 December 2011 with the value of a £100 invested in the FTSE
350 and in the average of the Housebuilders Index introduced for the 2012 PSP awards onwards and as varied subsequently for the 2014
and 2016 awards. These benchmarks have been chosen as Taylor Wimpey is a constituent of both.
The graph also shows the Chief Executive’s single figure remuneration over the same 10-year period. The total remuneration figure includes
the EIS and PSP awards which vested based on performance in those years. The EIS and PSP percentages are the payout for each year as a
percentages of the maximum award that could have been paid or received.
Annual percentage change in remuneration of Directors and employees
The table below shows the percentage change in salary or fee, taxable benefits and annual bonus of each individual Director in respect of the
financial years ending 31 December 2020 and 31 December 2021, as set out on page 115.
Salary / fee
(a)
Benefits Annual bonus scheme
(b)
% change from
31/12/2019 to
31/12/2020 (%)
% change from
31/12/2020 to
31/12/2021 (%)
% change from
31/12/2019 to
31/12/2020 (%)
% change from
31/12/2020 to
31/12/2021 (%)
% change from
31/12/2019 to
31/12/2020 (%)
% change from
31/12/2020 to
31/12/2021 (%)
Pete Redfern (10) 13 2 (18) n/a n/a
Chris Carney
(c)
(10) 18 (55) (11) n/a n/a
Jennie Daly (10) 13 (6) 12 n/a n/a
Irene Dorner
(d)
n/a 32 – – – –
Gwyn Burr
(e)
(3) 29 – – – –
Jitesh Gadhia
(f)
n/a n/a – – – –
Scilla Grimble
(f)
n/a n/a – – – –
Angela Knight (10) 17 – – – –
Robert Noel
(g)
n/a 23 – – – –
Humphrey Singer (10) 14 – – – –
Average pay of a Taylor Wimpey Employee
(h)
– 6 – 3 (46) 163
(a) The Executive and Non Executive Directors took a voluntary 30% reduction in base salary and fees from 1 April 2021 to 31 July 2021 in light of the COVID-19 pandemic.
(b) The Executive Incentive Scheme was cancelled in light of the COVID-19 pandemic.
(c) Chris Carney received a salary increase on 1 July 2021.
(d) Irene Dorner was appointed in December 2019 and received a fee increase on 1 July 2021.
(e) Gwyn Burr was appointed as the Board’s Employee Champion and received a fee of £10,000 per annum with effect from 1 January 2021.
(f) Jitesh Gadhia and Scilla Grimble were appointed in March 2021.
(g) Robert Noel was appointed in October 2019 and was appointed as the Company’s Senior Independent Director on 1 August 2021.
(h) Taylor Wimpey plc does not have any employees and these figures are in relation to Taylor Wimpey UK Limited employees.
123Taylor Wimpey plc Annual Report 2021
2020 2021 Change (%)
Operating profit
(a)
£300.3m £828.6m 176
Dividends paid per ordinary share 0.00p 8.28p n/a
Employee pay in aggregate
(b)
£280.1m £292.1m 4
Employee pay average per employee
(b)
£46,459 £54,517 17
(a) Operating profit is defined as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures. Operating profit has
been chosen as it is one of the Company’s primary measures of performance.
(b) See note 7 to the financial statements on page 149.
Approved by the Board
Gwyn Burr
Chair of the Remuneration Committee
2 March 2022
Statement of shareholder voting
Votes cast by proxy and at the meeting in respect of the Directors’ remuneration were as follows:
Resolution Votes for % Votes against %
Total votes cast (excluding
withheld votes) Votes withheld
Directors’ Remuneration Report for 2020
(2021 AGM)
2,216,612,359 97.67 52,990,912 2.33 2,269,603,271 401,828
Directors’ Remuneration Policy
(2020 AGM)
2,001,641,568 98.65 27,319,532 1.35 2,028,961,100 583,978
Corporate governance: Remuneration continued
Change in Company performance relative to change in remuneration (audited)
124
Taylor Wimpey plc Annual Report 2021
Governance
Introduction
This section contains the remaining matters on which the Directors are required to report each year, which do not appear elsewhere in this
Annual Report and Accounts. Certain matters which are required to be reported on appear in other sections of this Annual Report and
Accounts, asdetailed below:
Matter Page(s) in this Annual Report
Strategic report 2 to 71
Likely future developments in the business of the Company 2 to 71
Carbon footprint reporting 48 to 57
Greenhouse gas emissions reporting 55
Stakeholder engagement 34 to 47
A description of the Company’s employee engagement practices 34 and 41
A statement of the Company’s engagement with employees in relation to the financial and economic factors
that affect the performance of the Company 34
Charitable donations 43
Research and development activities 45
Viability Statement 70 to 71
2018 UK Corporate Governance Code compliance statement 72
Directors 74 to 75
A description of how the Board assesses and monitors culture 83
Retirement and re-election of Directors 93 and 184 to 191
Remuneration Committee report 105 to 124
Profit before taxation and profit after taxation 136 and 141 to 178
Changes in asset values 138 and 141 to 178
Statement on the Group’s treasury management and funding including information on the exposure of the
Company in relation to the use of financial instruments 157 to 159
Subsidiaries and associated undertakings, including branches outside the UK 179 to 182
Directors’ dividend recommendation 184 to 191
Web communications with shareholders 191
Registrar 192
Specific disclosures required under Listing Rule 9.8.4 as appropriate to the Company
Details of the Company’s long term incentive schemes 105 to 124
Shareholder waiver of future dividends 126
Qualifying third party indemnity
In accordance with Section 234 of the
Companies Act 2006 and following advice
from Slaughter and May, the Company has
granted an indemnity in favour of its Directors
and Officers and those of its Group
companies, including the Trustee Directors
of its Pension Trustee Company, for this
financial year and at the date of this report.
The indemnity is against the financial
exposure that they may incur in thecourse of
their professional duties as Directors and
Officers of the Company and / or its
subsidiaries / affiliates.
Audit and Auditors
Each Director has, at the date of approval
of this report, formally confirmed that:
– To the best of their knowledge there
is no relevant audit information of
which theCompany’s external Auditors
are unaware.
– They have taken all the steps they
ought to have taken as a Director in
order to make themselves aware of any
relevant audit information and to establish
that the Company’s external Auditors are
aware of that information.
This confirmation is given and should be
interpreted in accordance with the provisions
of Section 418 of the Companies Act 2006.
More information can be found on page 127.
Annual General Meeting
The Annual General Meeting (AGM) will be
held at 10:30am on 26 April 2022 in the
Winterlake Suite at the Crowne Plaza
Marlow, Fieldhouse Lane, Marlow,
Buckinghamshire, SL7 1GJ.
Formal notice of the AGM is set out in the
Notice of Annual General Meeting on pages
184 to 191 and on the Company’s website.
Capital structure
Details of the Company’s issued share
capital, together with information on
movements in the Company’s issued share
capital during the year, are shown in Note 23
on pages 165 to 166.
The Company has two classes of shares:
Ordinary Shares of 1p, each of which carries
the right to one vote at general meetings of
the Company and other such rights and
obligations as are set out in the Company’s
Articles of Association; and Deferred Shares,
which carry no voting rights.
The powers of the Company’s directors in
relation to issuing or buying back the
Company’s shares are limited to those
approved by shareholders at the AGM.
Statutory, regulatory and other information
125Taylor Wimpey plc Annual Report 2021
Corporate governance: Statutory, regulatory and other information
We have announced the Company’s
intention to return excess capital to its
shareholders in 2022 of up to £150 million
through the implementation of a share
buyback programme. An initial tranche of up
to £75 million commenced on 3 March 2022
and is expected to end no later than 3 June
2022. The initial tranche of the share
buyback programme is being carried out by
the Company using the authority to purchase
its own ordinary shares as approved by
shareholders at the 2021 AGM, and in order
to retain the flexibility to complete the initial
tranche and continue to return value to
shareholders, we are asking shareholders to
renew the authority for the Company to
purchase its own ordinary shares. The share
buyback is expected to benefit shareholders
through the opportunity for increased future
dividends per share on the remaining shares.
Pursuant to the share buyback programme,
the Board intends to hold 25 million of the
shares that are repurchased in treasury and
the remaining shares will be cancelled. The
Board currently intends that the shares to be
held in treasury will be used for future
obligations of the Company in respect of its
employee share schemes.
The Board will use this authority to purchase
shares only after careful consideration (taking
into account market conditions, other
investment opportunities, appropriate
gearing levels and the overall financial
position of the Company).
The Company currently holds no shares
in treasury.
There are no specific restrictions on the size
of a holding, the exercise of voting rights, or
the transfer of shares, which are governed by
the Company’s Articles of Association and
prevailing legislation. The Directors are not
aware of any agreement or agreements
between holders of the Company’s shares
that may result in restrictions on the transfer
of securities or voting rights.
The Employee Share Ownership Trust
(ESOT), which holds shares on trust for
employees under the Company’s various
share schemes, generally abstains from
voting at shareholder general meetings in
respect of shares held by them. No person
has any special rights of control over the
Company’s share capital and all issued
shares are fully paid.
Dividend
The 2020 final ordinary dividend of 4.14 pence
per share was paid to shareholders on
14 May 2021 and the 2021 interim ordinary
dividend of 4.14 pence per share was paid
to shareholders on 12 November 2021.
Subject to shareholder approval at the 2022
AGM, the final ordinary dividend of 4.44 pence
per share will be paid on 13 May 2022 to
shareholders on the register at the close of
business on 1 April 2022. More information
can be found on pages 69 and 185. The
Company will be operating a Dividend
Re-Investment Plan (DRIP) for shareholders
in the United Kingdom and more information
can be found on page 187.
The right to receive any dividend has been
waived in part by the Trustees of the
Company’s ESOT over that Trust’s
combined holding of 9,112,873 shares, as at
28 February 2022. More information about
the ESOT can be found in Note 26 on page
167.
Important events since the year end
There have been no important events
affecting the Company or any of its subsidiary
undertakings since 31 December 2021.
Political donations
The Company has a policy of not making
donations to political parties, and has not
made any during 2021 and does not intend
to going forward. More information can be
found on page 189.
Substantial interests
The persons set out in the table below have notified the Company pursuant to Rule 5.1 of the Disclosure and Transparency Rules of their
interests in the ordinary share capital of the Company.
As at 28 February 2022, no change in these holdings had been notified nor, according to the Register of Members, did any other shareholder
at that date have a disclosable holding of the Company’s issued share capital.
Directors’ interests in the Company’s shares are shown in the Remuneration Report on page 119.
Name
As at 31 December 2021 As at 28 February 2022
Number of shares held
(millions)
Percentage of issued
voting share capital
Number of shares held
(millions)
Percentage of issued
voting share capital
BlackRock 182.5 5.00 182.5 5.00
The Capital Group Companies, Inc 164.7 4.51 164.7 4.51
Legal & General Group plc 98.5 2.70 98.5 2.70
Standard Life Investments Limited 96.5 2.64 96.5 2.64
126 Taylor Wimpey plc Annual Report 2021
Governance
Corporate governance: Statutory, regulatory and other information continued
Agreements
The Company’s borrowing and bank facilities
contain the usual change of control provisions
which could potentially lead to prepayment
and cancellation by the other party upon a
change of control of the Company. There are
no other significant contracts or agreements
which take effect, alter or terminate upon a
change of control of the Company.
Modern Slavery Act
The Company welcomes the aims and
objectives of the Modern Slavery Act 2015
(MSA) and continues to take its responsibilities
under the MSA with the seriousness it
deserves and requires. The Company will
shortly be publishing its sixth statement
under the MSA which will be available on
theCompany’s website.
Employee share ownership
The Company promotes employee share
ownership as widely as possible across
theCompany. The Company has two
all-employee share plans, the Save As
YouEarn share option plan and the Share
Incentive Plan, which are offered to all
UK-based employees once they have
worked for the Company for three months.
The Company also offers a scheme whereby
employees who do not participate in the
Executive Incentive Scheme (cash bonus
scheme) are offered the opportunity to
exchange any cash bonus awarded for
shares in the Company, offering a 20%
enhancement to the value if taken entirely in
shares and retained for one year. The
scheme has operated since 2012 and in
2021 resulted in 233,335 shares (2020:
574,817) being acquired by 225 employees
(2020: 294). The relatively lower number of
shares awarded in 2021 reflected the lower
bonus level for 2020 performance received
by employees.
The percentage of our employees who hold
shares in the Company, either through the
all-employee share plans, the bonus
exchange scheme, or any other method is
61% (2020: 64%).
Employment of people with disabilities
The Company is committed to ensuring that
people with disabilities are treated fairly,
supported and encouraged to apply for
employment and to progress and receive
training once employed. Working with key
partners, we hope to increase permanent
and secondment opportunities for people
with disabilities. In addition, every
reasonable effort is made for people with
disabilities to be retained in the employment
of the Company by investigating reasonable
adjustments to the role, workplace
or equipment.
Statement of Directors’ responsibilities
in respect of the financial statements
The Directors are responsible for preparing
the Annual Report and Accounts and the
financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the Directors
have prepared the Group financial
statements in accordance with UK adopted
international accounting standards and the
Company financial statements in accordance
with United Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards, comprising FRS 101
Reduced Disclosure Framework, and
applicable law).
Under company law, Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair
view of the state of affairs of the Group and
Company and of the profit or loss of the
Group for that period. In preparing the
financial statements, the Directors are
required to:
– Select suitable accounting policies and
then apply them consistently.
– State whether applicable UK-adopted
international accounting standards have
been followed for the Group financial
statements and United Kingdom
Accounting Standards, comprising FRS
101 have been followed for the Company
financial statements, subject to any
material departures disclosed and
explained in the financial statements.
– Make judgements and accounting
estimates that are reasonable and prudent.
– Prepare the financial statements on
thegoing concern basis unless it is
inappropriate to presume that the Group
and Company will continue in business.
The Directors are responsible for
safeguarding the assets of the Group and
Company and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for
keeping adequate accounting records that
are sufficient to show and explain the
Group’s and Company’s transactions and
disclose with reasonable accuracy at any
time the financial position of the Group and
Company and enable them to ensure that
the financial statements and the Directors’
Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the
maintenance and integrity of the Company’s
website. Legislation in the United Kingdom
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
Each of the Directors, whose names and
functions are listed in the Board of Directors
pages of the Corporate Governance report
confirm that, to the best of their knowledge:
– The Group financial statements, which
have been prepared in accordance with
UK-adopted international accounting
standards, give a true and fair view of the
assets, liabilities, financial position and
profit of the Group.
– The Company financial statements, which
have been prepared in accordance with
United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair
view of the assets, liabilities and financial
position of the Company.
– The Strategic report includes a fair review
of the development and performance of
the business and the position of the Group
and Company, together with a description
of the Principal Risks and uncertainties
that it faces.
This Directors’ report and responsibility
statement was approved by the Board of
Directors on 2 March 2022 and is signed
onits behalf by:
Alice Black
Group General Counsel and Company
Secretary, Taylor Wimpey plc
2 March 2022
127Taylor Wimpey plc Annual Report 2021
Independent auditors’ report to the members of
Taylor Wimpey plc
128 Taylor Wimpey plc Annual Report 2021
Report on the audit of the
financial statements
Opinion
In our opinion:
– Taylor Wimpey plc’s Group financial statements and Company
financial statements (the “financial statements”) give a true and
fair view of the state of the Group’s and of the Company’s affairs
as at 31 December 2021 and of the Group’s profit and the
Group’s cash flows for the year then ended;
– the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
– the Company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and
applicable law); and
– the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual
Report and Accounts (the “Annual Report”), which comprise: the
Consolidated and Company balance sheets as at 31 December
2021; the Consolidated income statement, the Consolidated
statement of comprehensive income, the Consolidated cash flow
statement and the Consolidated and Company statements of
changes in equity for the year then ended; and the notes to the
financial statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard,
as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 6, we have provided no non-audit
services to the Company or its controlled undertakings in the period
under audit.
Our audit approach
Context
Taylor Wimpey is a listed housebuilder, predominantly operating in
the UK, also with a presence in Spain. The Group focuses on the
sale of private dwellings, which comprised 91% of total revenue in
2021, with the majority of the remaining revenue generated through
delivery of partnership housing contracts.
The Group’s consolidated financial statements are primarily an
aggregation of the 23 UK Business Units, representing the regional
UK housebuilding businesses encompassed in Taylor Wimpey UK
Limited, consolidated with the Group’s Spanish operations, Taylor
Wimpey de España S.A.U., the Company and the share of the
Group’s interest in joint ventures. For the purposes of our audit,
we considered Taylor Wimpey UK Limited, Taylor Wimpey de
España S.A.U. and the Company to be separate components.
The context of our audit is underpinned by 2021 being our first year
as external auditors of the Group. As part of our audit transition, we
performed specific procedures over opening balances by shadowing
the prior year audit undertaken by the predecessor auditor, reviewing
the predecessor auditors working papers and risk assessment, both
in the UK and Spain, and re-evaluating the predecessor auditors
conclusions in respect of key sources of estimation uncertainty in
the opening balance sheet at 1 January 2021.
We performed process walkthroughs to understand and evaluate
the key financial processes and controls across the Group and, in
accordance with International Standard on Review Engagements
(UK and Ireland) 2410, a review of the half year financial information.
Following this work, we performed a significant amount of early
audit procedures in advance of the year-end, covering each of the
Business Units and the Group functions. The objective of this audit
work was:
– to perform initial testing in relation to the design and operating
effectiveness of the controls we planned to place reliance on;
– to ensure that we had a clear plan as to what work needed to be
done when and where at year-end;
– to perform initial substantive testing, particularly where larger
samples were required; and
– to enable early consideration of the key sources of estimation
uncertainty before the year-end.
The audit transition, half year review and pre year-end audit work
were important in determining our 2021 Group audit scope, areas of
focus and detailed testing approach. As we undertook each phase of
this first year audit, we regularly reconsidered our risk assessment to
reflect audit findings, including our assessment of the Group’s control
environment and the impact on our planned audit approach.
In terms of risk assessment:
– given the nature of the Group’s operations and the methodology
for recognising margin on units sold, we considered margin
recognition and forecasting to be the most significant area
and therefore have included this as a key audit matter; and
– we considered current Government legislation and
announcements, particularly in relation to cladding and fire safety,
and hence also included a key audit matter in relation to this.
128 Taylor Wimpey plc Annual Report 2021
Financial statements
Independent auditors’ report to the members of
Taylor Wimpey plc
128 Taylor Wimpey plc Annual Report 2021
Report on the audit of the
financial statements
Opinion
In our opinion:
– Taylor Wimpey plc’s Group financial statements and Company
financial statements (the “financial statements”) give a true and
fair view of the state of the Group’s and of the Company’s affairs
as at 31 December 2021 and of the Group’s profit and the
Group’s cash flows for the year then ended;
– the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
– the Company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and
applicable law); and
– the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual
Report and Accounts (the “Annual Report”), which comprise: the
Consolidated and Company balance sheets as at 31 December
2021; the Consolidated income statement, the Consolidated
statement of comprehensive income, the Consolidated cash flow
statement and the Consolidated and Company statements of
changes in equity for the year then ended; and the notes to the
financial statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard,
as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 6, we have provided no non-audit
services to the Company or its controlled undertakings in the period
under audit.
Our audit approach
Context
Taylor Wimpey is a listed housebuilder, predominantly operating in
the UK, also with a presence in Spain. The Group focuses on the
sale of private dwellings, which comprised 91% of total revenue in
2021, with the majority of the remaining revenue generated through
delivery of partnership housing contracts.
The Group’s consolidated financial statements are primarily an
aggregation of the 23 UK Business Units, representing the regional
UK housebuilding businesses encompassed in Taylor Wimpey UK
Limited, consolidated with the Group’s Spanish operations, Taylor
Wimpey de España S.A.U., the Company and the share of the
Group’s interest in joint ventures. For the purposes of our audit,
we considered Taylor Wimpey UK Limited, Taylor Wimpey de
España S.A.U. and the Company to be separate components.
The context of our audit is underpinned by 2021 being our first year
as external auditors of the Group. As part of our audit transition, we
performed specific procedures over opening balances by shadowing
the prior year audit undertaken by the predecessor auditor, reviewing
the predecessor auditors working papers and risk assessment, both
in the UK and Spain, and re-evaluating the predecessor auditors
conclusions in respect of key sources of estimation uncertainty in
the opening balance sheet at 1 January 2021.
We performed process walkthroughs to understand and evaluate
the key financial processes and controls across the Group and, in
accordance with International Standard on Review Engagements
(UK and Ireland) 2410, a review of the half year financial information.
Following this work, we performed a significant amount of early
audit procedures in advance of the year-end, covering each of the
Business Units and the Group functions. The objective of this audit
work was:
– to perform initial testing in relation to the design and operating
effectiveness of the controls we planned to place reliance on;
– to ensure that we had a clear plan as to what work needed to be
done when and where at year-end;
– to perform initial substantive testing, particularly where larger
samples were required; and
– to enable early consideration of the key sources of estimation
uncertainty before the year-end.
The audit transition, half year review and pre year-end audit work
were important in determining our 2021 Group audit scope, areas of
focus and detailed testing approach. As we undertook each phase of
this first year audit, we regularly reconsidered our risk assessment to
reflect audit findings, including our assessment of the Group’s control
environment and the impact on our planned audit approach.
In terms of risk assessment:
– given the nature of the Group’s operations and the methodology
for recognising margin on units sold, we considered margin
recognition and forecasting to be the most significant area
and therefore have included this as a key audit matter; and
– we considered current Government legislation and
announcements, particularly in relation to cladding and fire safety,
and hence also included a key audit matter in relation to this.
Taylor Wimpey plc Annual Report 2021 129
As part of our audit we also made enquiries of management to
understand the process they have adopted to assess the potential
impact of climate change on the financial statements. Management
considers that the impact of climate change does not give rise to
a material financial statement impact in the current year and we
used our knowledge of the Group and the industry to evaluate
management’s assessment. We particularly considered the potential
impact on forecast build costs, and therefore margins, of new climate
related regulations, such as Part L & F of the Building Regulations.
Overview
Audit scope
Our Group audit included full scope audits of Taylor Wimpey UK
Limited (which includes the Group’s 23 UK Business Units), Taylor
Wimpey plc (the “Company”) and Taylor Wimpey de España S.A.U.
We also performed audit procedures over specified balances and
transitions across a number of the Group’s joint ventures. Finally
we audited the consolidation, including consolidation adjustments.
Taken together, the above procedures included operations covering
100% of revenue, 99% of profit before tax, 99% of profit before tax
and exceptional items and 97% of net assets.
Key audit matters
– Margin recognition and site forecasting (Group)
– Cladding fire safety provision (Group)
– Valuation of investments in Group undertakings and amounts due
from Group undertakings (Company)
Materiality
– Overall Group materiality: £40.0 million based on 5% of profit
before tax and exceptional items.
– Overall Company materiality: £36.0 million based on 1% of net
assets capped at 90% of overall Group materiality.
– Performance materiality: £30.0 million (Group) and £27.0 million
(Company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional
judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters, and any comments we make on the results of our
procedures thereon, were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
129Taylor Wimpey plc Annual Report 2021
Independent auditors’ report
ccoonnttiinnuueedd
130
Taylor Wimpey plc Annual Report 2021
Key audit matter How our audit addressed the key audit matter
Margin recognition and site forecasting (Group)
Refer to page 104 (Audit Committee report) and page 146 (Critical
a
ccounting judgements and key sources of estimation uncertainty).
A
s at 31 December 2021 the Group’s inventory balance is
£4,945.7 million (31 December 2020: £4,534.7 million) and is
the most significant asset on the Consolidated balance sheet.
T
he Group’s margin recognition policy is based on the margin
forecast for each site. These margins reflect estimated sales prices
and costs for each site. This is a method of allocating the total
forecast costs, representing both land and build costs, of a site
to each individual unit.
T
here is a risk that the margin forecast for the site, and consequently
the margin recognised on each unit sold, is not appropriate and
reflective of the actual final margin that will be recognised on a site.
A
s a result excess profit margins would be recognised earlier, to the
detriment of reduced margins on units sold at the end of the site,
or vice versa. The risk is due to the high level of management
estimation involved in ensuring the accuracy and completeness of
an individual site forecast, and the monitoring of these estimates
over time.
Sales prices and build costs are inherently uncertain, as they
are influenced by changes in external market factors, such as
the availability and affordability of mortgages, changes in customer
demand due to market uncertainty, or build cost inflation. There is
higher uncertainty when a site is scheduled to be completed over
a long timeframe.
Management has implemented internal controls to assess
site acquisition and initial forecasts to assist financial appraisal
processes, and further controls to monitor the ongoing costs and
sales prices within these forecasts, including changes to forecast
costs as a result of new climate related regulations, e.g. Part L & F
of the Building Regulations. There is a risk that these controls do
not operate effectively in ensuring the accuracy and completeness
of the forecasts.
We consider the accuracy and completeness of forecasting and the
appropriateness of margin recognition across the life of the site to
be a significant financial reporting risk, and hence audit risk, for
the Group.
Our audit procedures focused in particular on assessing the
j
udgemental elements used to determine an accurate margin, being
forecast costs and forecast revenues. Our procedures included, but
were not limited to:
– We tested a number of key controls within the build cycle, such as:
– management’s review meetings, where the performance to date
and expected outturn are updated, reviewed and challenged for
each site on a bi-monthly basis;
– review, approval and recognition of cost variations against the
original site budgets;
– surveyor valuations assessing the stage of completion of individual
plots across all sites; and
– review and approval of initial site budgets.
– We assessed management’s historical forecasting accuracy on all
active sites in 2021, through comparison to historical forecasts from
2020 and 2019, as well as the initial site budget. We investigated
significant differences or trends to understand whether they were
driven by items that could reasonably have been foreseen or
predicted rather than items outside of management’s control
such as build cost inflation;
– We tested a sample of forecast costs to third party evidence,
such as tender documents, or other appropriate support;
– We tested a sample of forecast sales prices to the actual sales
prices attained on similar properties;
– We understood risks and opportunities identified in relation to sites
to ensure completeness of costs within the site forecast, including
consideration of the impact of future climate related regulation
and requirements;
– We tested a sample of actual costs incurred to third party evidence,
as well as testing the allocation of costs to the correct sites;
– We tested a sample of actual revenue recognised in the period to
third party contracts, completion statements and bank statements;
– We verified, by recalculating the margins, that the system correctly
recalculates the margin following each cost or sales price
amendment made by management; and
–
W
e tested that the system appropriately apportions the cost of sales
associated with each plot when a sale is made.
Based on the procedures performed, we did not identify any sites
where we considered the actual margin recognised or forecast margin
to be materially inappropriate.
130 Taylor Wimpey plc Annual Report 2021
Financial statements
Independent auditors’ report
ccoonnttiinnuueedd
130
Taylor Wimpey plc Annual Report 2021
Key audit matter How our audit addressed the key audit matter
Margin recognition and site forecasting (Group)
Refer to page 104 (Audit Committee report) and page 146 (Critical
a
ccounting judgements and key sources of estimation uncertainty).
A
s at 31 December 2021 the Group’s inventory balance is
£4,945.7 million (31 December 2020: £4,534.7 million) and is
the most significant asset on the Consolidated balance sheet.
T
he Group’s margin recognition policy is based on the margin
forecast for each site. These margins reflect estimated sales prices
and costs for each site. This is a method of allocating the total
forecast costs, representing both land and build costs, of a site
to each individual unit.
T
here is a risk that the margin forecast for the site, and consequently
the margin recognised on each unit sold, is not appropriate and
reflective of the actual final margin that will be recognised on a site.
A
s a result excess profit margins would be recognised earlier, to the
detriment of reduced margins on units sold at the end of the site,
or vice versa. The risk is due to the high level of management
estimation involved in ensuring the accuracy and completeness of
an individual site forecast, and the monitoring of these estimates
over time.
Sales prices and build costs are inherently uncertain, as they
are influenced by changes in external market factors, such as
the availability and affordability of mortgages, changes in customer
demand due to market uncertainty, or build cost inflation. There is
higher uncertainty when a site is scheduled to be completed over
a long timeframe.
Management has implemented internal controls to assess
site acquisition and initial forecasts to assist financial appraisal
processes, and further controls to monitor the ongoing costs and
sales prices within these forecasts, including changes to forecast
costs as a result of new climate related regulations, e.g. Part L & F
of the Building Regulations. There is a risk that these controls do
not operate effectively in ensuring the accuracy and completeness
of the forecasts.
We consider the accuracy and completeness of forecasting and the
appropriateness of margin recognition across the life of the site to
be a significant financial reporting risk, and hence audit risk, for
the Group.
Our audit procedures focused in particular on assessing the
j
udgemental elements used to determine an accurate margin, being
forecast costs and forecast revenues. Our procedures included, but
were not limited to:
– We tested a number of key controls within the build cycle, such as:
– management’s review meetings, where the performance to date
and expected outturn are updated, reviewed and challenged for
each site on a bi-monthly basis;
– review, approval and recognition of cost variations against the
original site budgets;
– surveyor valuations assessing the stage of completion of individual
plots across all sites; and
– review and approval of initial site budgets.
– We assessed management’s historical forecasting accuracy on all
active sites in 2021, through comparison to historical forecasts from
2020 and 2019, as well as the initial site budget. We investigated
significant differences or trends to understand whether they were
driven by items that could reasonably have been foreseen or
predicted rather than items outside of management’s control
such as build cost inflation;
– We tested a sample of forecast costs to third party evidence,
such as tender documents, or other appropriate support;
– We tested a sample of forecast sales prices to the actual sales
prices attained on similar properties;
– We understood risks and opportunities identified in relation to sites
to ensure completeness of costs within the site forecast, including
consideration of the impact of future climate related regulation
and requirements;
– We tested a sample of actual costs incurred to third party evidence,
as well as testing the allocation of costs to the correct sites;
– We tested a sample of actual revenue recognised in the period to
third party contracts, completion statements and bank statements;
– We verified, by recalculating the margins, that the system correctly
recalculates the margin following each cost or sales price
amendment made by management; and
–
W
e tested that the system appropriately apportions the cost of sales
associated with each plot when a sale is made.
Based on the procedures performed, we did not identify any sites
where we considered the actual margin recognised or forecast margin
to be materially inappropriate.
Taylor Wimpey plc Annual Report 2021 131
Key audit matter How our audit addressed the key audit matter
Cladding fire safety provision (Group)
Refer to page 104 (Audit Committee report) and page 146 (Critical
a
ccounting judgements and key sources of estimation uncertainty).
In March 2021 the Group announced it would support owners
of buildings constructed by the Group going back 20 years from
January 2021, including apartment buildings below 18 metres,
in completing remediation works required to achieve RICS EWS1
certification levels.
T
he cost of providing this financial support was estimated at
£125.0 million, and a provision was recorded on the grounds
that the announcement created a constructive obligation.
T
he provision is identified as a source of estimation uncertainty
as there are several factors that could drive changes to the level
of financial support required to be given in future periods. The key
assumptions are the number of buildings requiring work, the cost of
remediation works for each relevant building and the level of funding
available to building owners under the Building Safety Fund as at the
balance sheet date.
Future industry guidance or regulation could also potentially
change the obligation, and therefore the financial support required
to be provided.
Given the estimation uncertainty and the stakeholder focus on what
is an industry wide issue, we identified the valuation of the cladding
fire safety provision, specifically the £125m recorded during the year,
as a significant audit risk.
In addressing the risk that the provision was valued incorrectly, our
audit procedures included, but were not limited to, the following:
– We enquired with management, including the Group Management
Team, to understand the rationale behind the provision and whether
it met the requirements of IAS 37 for the recognition of a
constructive obligation;
– We recalculated and checked the integrity of management’s model,
to assess the accuracy of the calculation;
– We tested the completeness of the buildings included by
reference to publicly available information on Taylor Wimpey
constructed buildings;
– We tested the completeness of the provision by considering
whether, for buildings where there was no provision, that conclusion
was appropriate by inspecting supporting information including the
results from any surveys undertaken;
– We tested the valuation of the remediation costs included within
the provision back to third party evidence, to corroborate the inputs
into the provision calculation. Examples of audit evidence included
external wall assessments to determine the extent of works required
and third party evidence such as external quantity surveyor quotes.
– We assessed the technical capabilities and expertise of the Group’s
employees and external consultants involved in assessing the
expected work and costs;
– We understood and assessed the estimated impact of potential
contributions from the Building Safety Fund to the overall expected
remediation costs;
– We assessed the ability of management to forecast remediation
costs by comparing original internal estimates to tendered works;
– We read recent government guidelines to confirm that
management’s assumptions and interpretations were appropriate;
and
– We reviewed the disclosures included in the financial statements,
including those on estimation uncertainty required by IAS 1 and
those required by IAS 37.
Overall, we found that, based on the audit evidence that we obtained,
management’s assessment of the provision was appropriate given
the commitment made and the conditions that existed at the balance
sheet date. We also considered the disclosures made in the financial
statements to be in line with the requirements of IAS 37 ‘Provisions,
contingent liabilities and contingent assets’.
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Key audit matter How our audit addressed the key audit matter
V
aluation of investments in Group undertakings and amounts
due from Group undertakings (Company)
Refer to page 175 Investments in Group undertakings and Trade
a
nd other receivables notes in the Company financial statements.
T
he carrying value of the investments in Group undertakings
and amounts due from Group undertakings in the Company
accounts are £2,446.2m (2020: £2,433.0m) and £2,848.7m
(£2,922.5m) respectively.
T
he key estimate is whether the carrying values of the investments
and intercompany receivables are supported by the forecast future
cash flows of the underlying Group undertakings. As such it was this
area where we applied the most audit effort in respect of the audit of
the Company and hence why it was identified as a key audit matter.
A
udit procedures included, but were not limited to, the following:
– We assessed the net assets of the underlying investments to
confirm that they were in excess of the carrying value of the
Company’s investment in Group undertakings;
– We verified that future cash flows supported the recoverability of
amounts due from Group undertakings and that no impairment
was required;
– We confirmed that the market capitalisation of the Group as at
31 December 2021 exceeded the carrying value of the investment
in Group undertakings and confirmed that there were no impairment
triggers in the year; and
– We verified that the aggregate net current assets of subsidiary
undertakings were sufficient to support the intercompany
receivables and whether, in accordance with IFRS 9, an
expected credit loss was required.
We have no issues to report in respect of this work.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
The Group’s consolidated financial statements are primarily an aggregation of the 23 UK Business Units, representing the regional UK
housebuilding businesses, consolidated with the Group’s Spanish operations, Taylor Wimpey de España S.A.U., the Company and the
share of the Group’s interest in joint ventures.
The 23 UK Business Units operate under a common control environment, underpinned by the Group’s Operating Framework. The Group
engagement team’s initial testing focused on the effectiveness and consistency of the design and implementation of the controls and
processes, and based on this, we determined that the aggregated Business Units could be treated as one population for further testing
purposes. In addition, we performed detailed audit work over the consolidation journals and specific financial statement line items within
the Group’s joint ventures. We instructed PwC Spain to perform procedures over Taylor Wimpey de España S.A.U.’s financial information,
which forms part of the Group’s consolidated financial statements.
Our work covered 100% of revenue, 99% of profit before tax, 99% of profit before tax and exceptional items and 97% of net assets. We
performed specific audit testing over the exceptional item, relating specifically to the cladding fire safety provision.
We also performed a full scope audit of the Company financial statements which was considered a separate component for the purposes of
our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality
£40.0 million £36.0 million
How we determined it
5% of profit before tax and exceptional items 1% of net assets capped at 90% of overall
Group materiality
Rationale for benchmark
applied
Profit before tax is a generally accepted auditing
benchmark. On the basis that exceptional items
are not reflective of the operating performance of
the Group and are excluded from key alternative
performance measures we have also excluded
them from the benchmark amount.
W
e believe that total assets is the primary
measure used by the shareholders in assessing
the performance of the entity, which acts solely
as a holding company, and is a generally accepted
auditing benchmark.
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Key audit matter How our audit addressed the key audit matter
V
aluation of investments in Group undertakings and amounts
due from Group undertakings (Company)
Refer to page 175 Investments in Group undertakings and Trade
a
nd other receivables notes in the Company financial statements.
T
he carrying value of the investments in Group undertakings
and amounts due from Group undertakings in the Company
accounts are £2,446.2m (2020: £2,433.0m) and £2,848.7m
(£2,922.5m) respectively.
T
he key estimate is whether the carrying values of the investments
and intercompany receivables are supported by the forecast future
cash flows of the underlying Group undertakings. As such it was this
area where we applied the most audit effort in respect of the audit of
the Company and hence why it was identified as a key audit matter.
A
udit procedures included, but were not limited to, the following:
– We assessed the net assets of the underlying investments to
confirm that they were in excess of the carrying value of the
Company’s investment in Group undertakings;
– We verified that future cash flows supported the recoverability of
amounts due from Group undertakings and that no impairment
was required;
– We confirmed that the market capitalisation of the Group as at
31 December 2021 exceeded the carrying value of the investment
in Group undertakings and confirmed that there were no impairment
triggers in the year; and
– We verified that the aggregate net current assets of subsidiary
undertakings were sufficient to support the intercompany
receivables and whether, in accordance with IFRS 9, an
expected credit loss was required.
We have no issues to report in respect of this work.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
The Group’s consolidated financial statements are primarily an aggregation of the 23 UK Business Units, representing the regional UK
housebuilding businesses, consolidated with the Group’s Spanish operations, Taylor Wimpey de España S.A.U., the Company and the
share of the Group’s interest in joint ventures.
The 23 UK Business Units operate under a common control environment, underpinned by the Group’s Operating Framework. The Group
engagement team’s initial testing focused on the effectiveness and consistency of the design and implementation of the controls and
processes, and based on this, we determined that the aggregated Business Units could be treated as one population for further testing
purposes. In addition, we performed detailed audit work over the consolidation journals and specific financial statement line items within
the Group’s joint ventures. We instructed PwC Spain to perform procedures over Taylor Wimpey de España S.A.U.’s financial information,
which forms part of the Group’s consolidated financial statements.
Our work covered 100% of revenue, 99% of profit before tax, 99% of profit before tax and exceptional items and 97% of net assets. We
performed specific audit testing over the exceptional item, relating specifically to the cladding fire safety provision.
We also performed a full scope audit of the Company financial statements which was considered a separate component for the purposes of
our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality
£40.0 million £36.0 million
How we determined it
5% of profit before tax and exceptional items 1% of net assets capped at 90% of overall
Group materiality
Rationale for benchmark
applied
Profit before tax is a generally accepted auditing
benchmark. On the basis that exceptional items
are not reflective of the operating performance of
the Group and are excluded from key alternative
performance measures we have also excluded
them from the benchmark amount.
W
e believe that total assets is the primary
measure used by the shareholders in assessing
the performance of the entity, which acts solely
as a holding company, and is a generally accepted
auditing benchmark.
Taylor Wimpey plc Annual Report 2021 133
For each component in the scope of our Group audit, we allocated a
materiality that is less than our overall Group materiality. The range of
materiality allocated across components was £12.5 million to £36.0
million. Certain components were audited to a local statutory audit
materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% of overall
materiality, amounting to £30.0 million for the Group financial
statements and £27.0 million for the Company financial statements.
In determining the performance materiality, we considered a
number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and
concluded that an amount at the upper end of our normal
range was appropriate.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above £2.0 million (Group
and Company audit) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s and the
Company’s ability to continue to adopt the going concern basis of
accounting included:
– We tested the accuracy and integrity of the underlying model used
by management in developing their going concern forecasts, and
checked the approval of the forecasts by the Board;
– We tested the key assumptions used in the model, including
comparison to third party market information where appropriate
and checking that the assumptions used in the “severe but
plausible” scenario were sufficiently severe to model potential
future economic downturn, in line with those observed in the
global financial crisis in 2007-8;
– We considered the historical reliability of management forecasting
by comparing budgeted results to actual performance; and
– We reviewed the covenants applicable to the Group’s borrowings
and facility and checked that the forecasts supported ongoing
compliance with the covenants in the going concern
assessment period.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the
Company’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the Group’s
and the Company’s ability to continue as a going concern.
In relation to the Directors’ reporting on how they have applied the
UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the
financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the Annual
Report other than the financial statements and our auditors’ report
thereon. The Directors are responsible for the other information,
which includes reporting based on the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations. Our opinion on
the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a
material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
report for the year ended 31 December 2021 is consistent with the
financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and
Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report
and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration Committee report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
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Corporate governance statement
The Listing Rules require us to review the Directors’ statements
in relation to going concern, longer-term viability and that part of
the corporate governance statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information
are described in the Reporting on other information section of
this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
– The Directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
– The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
– The Directors’ statement in the financial statements about whether
they considered it appropriate to adopt the going concern basis
of accounting in preparing them, and their identification of any
material uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months from
the date of approval of the financial statements;
– The Directors’ explanation as to their assessment of the Group’s
and Company’s prospects, the period this assessment covers
and why the period is appropriate; and
– The Directors’ statement as to whether they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term
viability of the Group was substantially less in scope than an audit
and only consisted of making inquiries and considering the Directors’
process supporting their statement; checking that the statement is
in alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge and
understanding of the Group and Company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
– The Directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the Group’s and Company’s position, performance, business
model and strategy;
– The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
and
– The section of the Annual Report describing the work of the
Audit Committee.
We have nothing to report in respect of our responsibility to report
when the Directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant
provision of the Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial statements and
the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities
in respect of the financial statements, the Directors are responsible
for the preparation of the financial statements in accordance with the
applicable framework and for being satisfied that they give a true and
fair view. The Directors are also responsible for such internal control
as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible
for assessing the Group’s and the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud,
is detailed below.
Based on our understanding of the Group and industry, we identified
that the principal risks of non-compliance with laws and regulations
related to building regulations, including fire and building safety
legislation, health and safety legislation, tax and pension legislation,
environmental regulation and employment law and we considered
the extent to which non-compliance might have a material effect
on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements
such as the Listing Rules and the Companies Act 2006. We
evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override
of controls), and determined that the principal risks were related to
artificial inflation of reported results via the posting of fraudulent
journals, primarily as part of the consolidation process at Group,
and bias in the assumptions underpinning significant provisions.
The Group engagement team shared this risk assessment with the
component auditors so that they could include appropriate audit
procedures in response to such risks in their work. Audit procedures
performed by the Group engagement team and/or component
auditors included:
– Discussions with the Group Management Team, Business Unit
Management, Internal Audit and the Audit Committee, review of
internal audit reports and consideration of known or suspected
instances of non-compliance with laws and regulation and fraud;
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Corporate governance statement
The Listing Rules require us to review the Directors’ statements
in relation to going concern, longer-term viability and that part of
the corporate governance statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information
are described in the Reporting on other information section of
this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
– The Directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
– The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
– The Directors’ statement in the financial statements about whether
they considered it appropriate to adopt the going concern basis
of accounting in preparing them, and their identification of any
material uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months from
the date of approval of the financial statements;
– The Directors’ explanation as to their assessment of the Group’s
and Company’s prospects, the period this assessment covers
and why the period is appropriate; and
– The Directors’ statement as to whether they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term
viability of the Group was substantially less in scope than an audit
and only consisted of making inquiries and considering the Directors’
process supporting their statement; checking that the statement is
in alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge and
understanding of the Group and Company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
– The Directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the Group’s and Company’s position, performance, business
model and strategy;
– The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
and
– The section of the Annual Report describing the work of the
Audit Committee.
We have nothing to report in respect of our responsibility to report
when the Directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant
provision of the Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial statements and
the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities
in respect of the financial statements, the Directors are responsible
for the preparation of the financial statements in accordance with the
applicable framework and for being satisfied that they give a true and
fair view. The Directors are also responsible for such internal control
as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible
for assessing the Group’s and the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud,
is detailed below.
Based on our understanding of the Group and industry, we identified
that the principal risks of non-compliance with laws and regulations
related to building regulations, including fire and building safety
legislation, health and safety legislation, tax and pension legislation,
environmental regulation and employment law and we considered
the extent to which non-compliance might have a material effect
on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements
such as the Listing Rules and the Companies Act 2006. We
evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override
of controls), and determined that the principal risks were related to
artificial inflation of reported results via the posting of fraudulent
journals, primarily as part of the consolidation process at Group,
and bias in the assumptions underpinning significant provisions.
The Group engagement team shared this risk assessment with the
component auditors so that they could include appropriate audit
procedures in response to such risks in their work. Audit procedures
performed by the Group engagement team and/or component
auditors included:
– Discussions with the Group Management Team, Business Unit
Management, Internal Audit and the Audit Committee, review of
internal audit reports and consideration of known or suspected
instances of non-compliance with laws and regulation and fraud;
Taylor Wimpey plc Annual Report 2021 135
– Evaluation and testing of the operating effectiveness of
management’s controls designed to prevent and detect
irregularities, in particular their controls around margin
recognition and site forecasting;
– Challenging the assumptions and judgements made by
management in determining their significant accounting estimates,
in particular in relation to margin recognition, site forecasting and
provisions; and
– Identifying and testing journal entries, in particular any journal
entries posted with unusual account combinations including
unusual or unexpected journal postings to the Consolidated
income statement.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to
events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number
of items for testing, rather than testing complete populations. We
will often seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit sampling
to enable us to draw a conclusion about the population from which
the sample is selected.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only
for the Company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in
our opinion:
– we have not obtained all the information and explanations we
require for our audit; or
– adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
– certain disclosures of Directors’ remuneration specified by law
are not made; or
– the Company financial statements and the part of the
Remuneration Committee report to be audited are not in
agreement with the accounting records and returns.
W
e have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we
were appointed by the members on 22 April 2021 to audit the
financial statements for the year ended 31 December 2021 and
subsequent financial periods. This is therefore our first year of
uninterrupted engagement.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance
and Transparency Rule 4.1.14R, these financial statements form
part of the ESEF-prepared annual financial report filed on the
National Storage Mechanism of the Financial Conduct Authority in
accordance with the ESEF Regulatory Technical Standard (‘ESEF
RTS’). This auditors’ report provides no assurance over whether the
annual financial report has been prepared using the single electronic
format specified in the ESEF RTS.
Sonia Copeland (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
2 March 2022
135Taylor Wimpey plc Annual Report 2021
Consolidated income statement
for the year to 31 December 2021
136 Taylor Wimpey plc Annual Report 2021
£ million Note
Before
exceptional
items
2021
Exceptional
items
2021
Total
2021
Before
exceptional
items
2020
Exceptional
items
2020
Total
2020
Continuing operations
Revenue 4 4,284.9 – 4,284.9 2,790.2 – 2,790.2
Cost of sales (3,257.9 ) – (3,257.9 ) (2,293.5 ) – (2,293.5 )
Gross profit 1,027.0 – 1,027.0 496.7 – 496.7
Net operating expenses 6 (203.8 ) (125.0 ) (328.8 ) (204.3 ) (10.0 ) (214.3 )
Profit on ordinary activities before net finance costs 823.2 (125.0 ) 698.2 292.4 (10.0 ) 282.4
Finance income 8 2.4 – 2.4 3.5 – 3.5
Finance costs 8 (26.4 ) – (26.4 ) (29.4 ) – (29.4 )
Share of results of joint ventures 13 5.4 – 5.4 7.9 – 7.9
Profit before taxation 804.6 (125.0 ) 679.6 274.4 (10.0 ) 264.4
T
axation (charge)/credit 9 (147.9 ) 23.8 (124.1 ) (49.1 ) 1.7 (47.4 )
Profit for the year 656.7 (101.2 ) 555.5 225.3 (8.3 ) 217.0
Note 2021 2020
Basic earnings per share 10 15.3 p 6.3 p
Diluted earnings per share 10 15.2 p 6.2 p
A
djusted basic earnings per share 10 18.0 p 6.5 p
A
djusted diluted earnings per share 10 18.0 p 6.5 p
All of the profit for the year is attributable to the equity holders of the Parent Company.
136 Taylor Wimpey plc Annual Report 2021
Financial statements
Consolidated income statement
for the year to 31 December 2021
136 Taylor Wimpey plc Annual Report 2021
£ million Note
Before
exceptional
items
2021
Exceptional
items
2021
Total
2021
Before
exceptional
items
2020
Exceptional
items
2020
Total
2020
Continuing operations
Revenue 4 4,284.9 – 4,284.9 2,790.2 – 2,790.2
Cost of sales (3,257.9) – (3,257.9) (2,293.5) – (2,293.5)
Gross profit 1,027.0 – 1,027.0 496.7 – 496.7
Net operating expenses 6 (203.8) (125.0) (328.8) (204.3) (10.0) (214.3)
Profit on ordinary activities before net finance costs 823.2 (125.0) 698.2 292.4 (10.0) 282.4
Finance income 8 2.4 – 2.4 3.5 – 3.5
Finance costs 8 (26.4) – (26.4) (29.4) – (29.4)
Share of results of joint ventures 13 5.4 – 5.4 7.9 – 7.9
Profit before taxation 804.6 (125.0) 679.6 274.4 (10.0) 264.4
T
axation (charge)/credit 9 (147.9) 23.8 (124.1) (49.1) 1.7 (47.4)
Profit for the year 656.7 (101.2) 555.5 225.3 (8.3) 217.0
Note 2021 2020
Basic earnings per share 10 15.3p 6.3p
Diluted earnings per share 10 15.2p 6.2p
A
djusted basic earnings per share 10 18.0p 6.5p
A
djusted diluted earnings per share 10 18.0p 6.5p
All of the profit for the year is attributable to the equity holders of the Parent Company.
Consolidated statement of comprehensive income
for the year to 31 December 2021
Taylor Wimpey plc Annual Report 2021 137
£ million Note 2021 2020
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 25 (6.9 ) 5.2
Movement in fair value of hedging instruments 25 4.8 (4.2 )
Items that will not be reclassified subsequently to profit or loss:
A
ctuarial gain/(loss) on defined benefit pension schemes 21 37.9 (36.6 )
T
a
x
(charge)/credit on items taken directly to other comprehensive income 14 (5.4 ) 8.6
Other comprehensive income/(expense) for the year 30.4 (27.0 )
Profit for the year 555.5 217.0
Total comprehensive income for the year 585.9 190.0
All of the comprehensive income for the year is attributable to the equity holders of the Parent Company.
137Taylor Wimpey plc Annual Report 2021
Consolidated balance sheet
at 31 December 2021
138 Taylor Wimpey plc Annual Report 2021
£ million Note 2021 2020
Non-current assets
Intangible assets 11 6.6 8.1
Property, plant and equipment 12 21.7 24.0
Right-of-use assets 19 26.5 27.5
Interests in joint ventures 13 85.4 82.2
T
rade and other receivables 16 27.5 26.3
Other financial assets 21 10.0 –
Deferred tax assets 14 26.2 33.7
Current assets
Inventories 15 4,945.7 4,534.7
T
rade and other receivables 16 168.2 189.1
T
ax receivables 1.0 –
Cash and cash equivalents 16 921.0 823.0
Total assets 6,239.8 5,748.6
Current liabilities
T
rade and other payables 18 (901.9 ) (919.3 )
Lease liabilities 19 (7.0 ) (6.4 )
Bank and other loans 17 – (13.5 )
T
ax payables (0.8 ) (1.1 )
Provisions 22 (125.4 ) (70.6 )
(1,035.1 ) (1,010.9 )
Net current assets 5,000.8 4,535.9
Non-current liabilities
T
rade and other payables 18 (629.3 ) (459.8 )
Lease liabilities 19 (20.4 ) (21.6 )
Bank and other loans 17 (84.0 ) (90.1 )
Retirement benefit obligations 21 (37.3 ) (89.5 )
Provisions 22 (119.7 ) (59.9 )
(890.7 ) (720.9 )
Total liabilities (1,925.8 ) (1,731.8 )
Net assets 4,314.0 4,016.8
Equity
Share capital 23 292.2 292.2
Share premium 24 777.5 773.1
Own shares 26 (14.6 ) (11.5 )
Other reserves 25 541.6 543.7
Retained earnings 2,717.3 2,419.3
Total equity 4,314.0 4,016.8
The financial statements of Taylor Wimpey plc (registered number: 296805) were approved by the Board of Directors and authorised for issue
on 2 March 2022. They were signed on its behalf by:
P Redfern
Director
C Carney
Director
138 Taylor Wimpey plc Annual Report 2021
Financial statements
Consolidated balance sheet
at 31 December 2021
138 Taylor Wimpey plc Annual Report 2021
£ million Note 2021 2020
Non-current assets
Intangible assets 11 6.6 8.1
Property, plant and equipment 12 21.7 24.0
Right-of-use assets 19 26.5 27.5
Interests in joint ventures 13 85.4 82.2
T
rade and other receivables 16 27.5 26.3
Other financial assets 21 10.0 –
Deferred tax assets 14 26.2 33.7
203.9 201.8
Current assets
Inventories 15 4,945.7 4,534.7
T
rade and other receivables 16 168.2 189.1
T
ax receivables 1.0 –
Cash and cash equivalents 16 921.0 823.0
6,035.9 5,546.8
Total assets 6,239.8 5,748.6
Current liabilities
T
rade and other payables 18 (901.9) (919.3)
Lease liabilities 19 (7.0) (6.4)
Bank and other loans 17 – (13.5)
T
ax payables (0.8) (1.1)
Provisions 22 (125.4) (70.6)
(1,035.1) (1,010.9)
Net current assets 5,000.8 4,535.9
Non-current liabilities
T
rade and other payables 18 (629.3) (459.8)
Lease liabilities 19 (20.4) (21.6)
Bank and other loans 17 (84.0) (90.1)
Retirement benefit obligations 21 (37.3) (89.5)
Provisions 22 (119.7) (59.9)
(890.7) (720.9)
Total liabilities (1,925.8) (1,731.8)
Net assets 4,314.0 4,016.8
Equity
Share capital 23 292.2 292.2
Share premium 24 777.5 773.1
Own shares 26 (14.6) (11.5)
Other reserves 25 541.6 543.7
Retained earnings 2,717.3 2,419.3
Total equity 4,314.0 4,016.8
The financial statements of Taylor Wimpey plc (registered number: 296805) were approved by the Board of Directors and authorised for issue
on 2 March 2022. They were signed on its behalf by:
P Redfern
Director
C Carney
Director
Consolidated statement of changes in equity
for the year to 31 December 2021
Taylor Wimpey plc Annual Report 2021 139
£ million
Share
capital
Share
premium
Own
shares
Other
reserves
Retained
earnings
Total
T
otal equity at 1 January 2020 288.6 762.9 (17.6 ) 43.6 2,230.3 3,307.8
Other comprehensive income/(expense) for the year – – – 1.0 (28.0 ) (27.0 )
Profit for the year – – – – 217.0 217.0
Total comprehensive income for the year – – – 1.0 189.0 190.0
New share capital subscribed 3.6 10.2 – 499.1 – 512.9
Utilisation of own shares – – 6.1 – – 6.1
Cash cost of satisfying share options – – – – (8.0 ) (8.0 )
Share-based payment credit – – – – 7.0 7.0
T
ax credit on items taken directly to statement of changes in equity – – – – 1.0 1.0
T
otal equity at 31 December 2020 292.2 773.1 (11.5 ) 543.7 2,419.3 4,016.8
Other comprehensive (expense)/income for the year – – – (2.1 ) 32.5 30.4
Profit for the year – – – – 555.5 555.5
Total comprehensive (expense)/income for the year – – – (2.1 ) 588.0 585.9
New share capital subscribed – 4.4 – – – 4.4
Own shares acquired – – (4.2 ) – – (4.2 )
Utilisation of own shares – – 1.1 – – 1.1
Cash cost of satisfying share options – – – – (1.9 ) (1.9 )
Share-based payment credit – – – – 13.2 13.2
T
ax credit on items taken directly to statement of changes in equity – – – – 0.2 0.2
Dividends approved and paid – – – – (301.5 ) (301.5 )
Total equity at 31 December 2021 292.2 777.5 (14.6 ) 541.6 2,717.3 4,314.0
139Taylor Wimpey plc Annual Report 2021
Consolidated cash flow statement
for the year to 31 December 2021
140 Taylor Wimpey plc Annual Report 2021
£ million Note 2021 2020
Profit on ordinary activities before net finance costs 698.2 282.4
A
djustments for:
Depreciation and amortisation 15.6 16.4
Pension contributions in excess of charge to the income statement (15.2 ) (33.4 )
Share-based payment charge 13.2 7.0
Increase in provisions excluding exceptional payments 130.0 19.6
Operating cash flows before movements in working capital 841.8 292.0
Increase in inventories (293.2 ) (362.2 )
Decrease/(Increase) in receivables 32.1 (19.5 )
Decrease in payables (6.0 ) (75.3 )
Cash generated from/(used in) operations 574.7 (165.0 )
Payments related to exceptional charges (15.1 ) (17.7 )
Income taxes paid (123.0 ) (107.7 )
Interest paid (4.7 ) (10.8 )
Net cash generated from/(used in) operating activities 431.9 (301.2 )
Investing activities
Interest received 8 2.1 3.1
Dividends received from joint ventures 8.1 0.8
Purchase of property, plant and equipment 12 (2.5 ) (3.1 )
Purchase of software 11 (2.1 ) (4.9 )
Investment in pension scheme escrow (10.0 ) –
A
mounts invested in joint ventures (5.9 ) (19.8 )
Net cash used in investing activities (10.3 ) (23.9 )
Financing activities
Lease capital repayments (6.9 ) (8.0 )
Proceeds from the issue of own shares – 510.1
Cash received on exercise of share options 3.6 0.8
Purchase of own shares (4.2 ) –
Repayment of borrowings (12.7 ) –
Proceeds from borrowings – 13.5
Dividends paid 31 (301.5 ) –
Net cash (used in)/generated from financing activities (321.7 ) 516.4
Net increase in cash and cash equivalents 99.9 191.3
Cash and cash equivalents at beginning of year 823.0 630.4
Effect of foreign exchange rate changes (1.9 ) 1.3
Cash and cash equivalents at end of year 27 921.0 823.0
140 Taylor Wimpey plc Annual Report 2021
Financial statements
Consolidated cash flow statement
for the year to 31 December 2021
140 Taylor Wimpey plc Annual Report 2021
£ million Note 2021 2020
Profit on ordinary activities before net finance costs 698.2 282.4
A
djustments for:
Depreciation and amortisation 15.6 16.4
Pension contributions in excess of charge to the income statement (15.2) (33.4)
Share-based payment charge 13.2 7.0
Increase in provisions excluding exceptional payments 130.0 19.6
Operating cash flows before movements in working capital 841.8 292.0
Increase in inventories (293.2) (362.2)
Decrease/(Increase) in receivables 32.1 (19.5)
Decrease in payables (6.0) (75.3)
Cash generated from/(used in) operations 574.7 (165.0)
Payments related to exceptional charges (15.1) (17.7)
Income taxes paid (123.0) (107.7)
Interest paid (4.7) (10.8)
Net cash generated from/(used in) operating activities 431.9 (301.2)
Investing activities
Interest received 8 2.1 3.1
Dividends received from joint ventures 8.1 0.8
Purchase of property, plant and equipment 12 (2.5) (3.1)
Purchase of software 11 (2.1) (4.9)
Investment in pension scheme escrow (10.0) –
A
mounts invested in joint ventures (5.9) (19.8)
Net cash used in investing activities (10.3) (23.9)
Financing activities
Lease capital repayments (6.9) (8.0)
Proceeds from the issue of own shares – 510.1
Cash received on exercise of share options 3.6 0.8
Purchase of own shares (4.2) –
Repayment of borrowings (12.7) –
Proceeds from borrowings – 13.5
Dividends paid 31 (301.5) –
Net cash (used in)/generated from financing activities (321.7) 516.4
Net increase in cash and cash equivalents 99.9 191.3
Cash and cash equivalents at beginning of year 823.0 630.4
Effect of foreign exchange rate changes (1.9) 1.3
Cash and cash equivalents at end of year 27 921.0 823.0
Notes to the consolidated financial statements
Taylor Wimpey plc Annual Report 2021 141
1. Significant accounting policies
Basis of preparation
The consolidated financial statements have been prepared on a
going concern basis and under the historical cost convention,
except as otherwise stated below.
The principal accounting policies adopted, which have been applied
consistently, except as otherwise stated, are set out below.
Adoption of new and revised standards
On 31 December 2020, IFRS as adopted by the European Union
at that date was brought into UK law and became UK adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. The Group
transitioned to UK adopted international accounting standards in its
consolidated financial statements on 1 January 2021. There was
no impact or changes in accounting policies from the transition.
The Group has adopted and applied the following standards and
amendments in the year, which are relevant to its operations, none
of which had a material impact on the financial statements.
– IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (amendments) –
interest rate benchmark reform – phase 2
At the date of authorisation of these financial statements, the
Group has not applied the following new or revised standards
and interpretations that have been issued but are not yet effective:
– IFRS 3 ‘Business Combinations’ (amendments) – references to
the Conceptual Framework
– IAS 1 ‘Presentation of Financial Statements’ (amendments) –
classification of liabilities as current or non-current
– IAS 1 ‘Presentation of Financial Statements’ (amendments) –
disclosure of accounting policies
– IAS 12 ‘Income Taxes’ (amendments) – deferred tax related to
assets and liabilities arising from a single transaction
– IAS 8 ‘Accounting Policies, Changes in Accounting Estimates
and Errors’ (amendments) – definition of accounting estimates
– Annual improvement in IFRS Standards 2018-2020
The Directors do not expect that the adoption of the standards,
amendments and interpretations listed above will have a material
impact on the financial statements of the Group.
Going concern
Group forecasts have been prepared that have considered the
Group’s current financial position and current market circumstances.
The forecasts were subject to sensitivity analysis together with the
likely effectiveness of mitigating actions.
The assessment considers sensitivity analysis on a series of
realistically possible, but severe and prolonged, changes to principal
assumptions. In determining these the Group has included macro-
economic and industry-wide projections as well as matters specific
to the Group.
The severe but plausible downside scenario reflects the aggregated
impact of the sensitivities, taking account of a sharp decline in
customer confidence, disposable incomes, and mortgage availability.
To arrive at the stress test the Group has drawn on experience
gained managing the business through previous economic
downturns and the COVID-19 pandemic. As a result, the Group
has stress tested the business against the following severe but
plausible downside scenario which can be attributed back to the
Group’s Principal Risks that have been identified as having the
most impact on the longer-term prospects and viability of the Group.
The impact of the Principal Risk ‘Natural resources and climate
change’ is not deemed to be material within the forecast period,
albeit known costs from regulations have been included in
the modelling.
– Volume – a decline in total volumes of 20% from 2021, recovering
by the end of the forecast period
– Price – a reduction to current selling prices of 20%, recovering by
the end of the forecast period
– Costs – a one-off exceptional charge and cash cost of
£150 million for an unanticipated event, change in Government
regulations or financial penalty (e.g. from a cyber security breach)
Within the scenario build costs are forecast to reduce with lower
volumes reducing pressure on the availability of materials and
resources and land cost remains flat as the possible increase in
availability due to lower volumes is offset by a restriction in supply.
An estimate for the cost of the Future Homes Standard has
been assumed.
The mitigating actions considered in the model include a reduction
in land investment, a reduction in the level of production and work in
progress held and reducing our overhead base to reflect the lower
volumes. If these scenarios were to occur, the Group also has
a range of additional options to maintain its financial strength,
including: a reduction in capital expenditure, the sale of assets,
reducing the dividend, and or raising debt.
The Group’s liquidity (defined as cash and undrawn committed
facilities) was £1,471 million at 31 December 2021. The undrawn
facilities of £550 million mature in February 2025 with the drawn
facility maturing more than one year after the current balance sheet
date with €100 million due in June 2023. This is sufficient to absorb
the financial impact of each of the risks modelled in the stress and
sensitivity analysis.
Based on these forecasts, it is considered that there are sufficient
resources available for the Group to conduct its business, and meet
its liabilities as they fall due, for at least the next 12 months from the
date of these consolidated financial statements. Consequently the
consolidated financial statements have been prepared on a going
concern basis.
Basis of accounting
The consolidated financial statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and International
Financial Reporting Standards (IFRS Standards) as adopted by
the UK.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Control is
achieved where the Company:
– has the power over the investee;
– is exposed, or has rights, to variable return from its involvement
with the investee; and
– has the ability to use its power to affect its returns.
141Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
142
Taylor Wimpey plc Annual Report 2021
1. Significant accounting policies c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair value at the date of acquisition.
Any excess of the cost of acquisition over the fair value of the
identifiable net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair value of the
identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition.
The interest of non-controlling shareholders is stated at the non-
controlling interest’s proportion of the fair value of the assets and
liabilities recognised. Subsequently, all comprehensive income is
attributed to the owners and the non-controlling interests.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of disposal,
as appropriate. Where a subsidiary is disposed of which constituted
a major line of business, it is disclosed as a discontinued operation.
Where necessary, adjustments are made to the financial statements
of subsidiaries to bring the accounting policies used into line with
those used by the Group. All intra-Group transactions, balances,
income and expenses are eliminated on consolidation.
Joint ventures
Undertakings are deemed to be a joint venture when the Group
has joint control of the rights and assets of the undertaking via either
voting rights or a formal agreement which includes that unanimous
consent is required for strategic, financial and operating decisions.
Joint ventures are consolidated under the equity accounting method.
Loans to joint ventures form part of the Group’s net investment and
is assessed for recoverability on a periodic basis. On transfer of land
and/or work in progress to joint ventures, the Group recognises only
its share of any profits or losses. Joint operations arise where the
Group has joint control of an operation but has rights to only its own
assets and obligations related to the operation. These assets and
obligations, and the Group’s share of revenues and costs, are
included in the Group’s results.
Joint ventures and joint operations are entered into to develop specific
sites. Each arrangement is site or project specific and once the
development or project is complete the arrangement is wound down.
Segmental reporting
The Group operates in the United Kingdom and Spain. The United
Kingdom is split into five geographical operating segments, each
managed by a Divisional Chair who sits on the Group Management
Team. In addition, there are central operations covering the
corporate functions and Strategic Land.
The Group aggregates the UK operations into a single reporting
segment on the basis that they share similar economic characteristics.
In addition each Division builds and delivers residential homes, uses
consistent methods of construction, sells homes to both private
customers and local housing associations, follows a single UK sales
process and operating framework, is subject to the same macro-
economic factors including mortgage availability and has the same
cost of capital arising from the utilisation of central banking and
debt facilities.
As a result, the Group has the following reporting segments:
– United Kingdom
– Spain
Revenue
Revenue is recognised when the performance obligation associated
with the sale is completed. The transaction price comprises the fair
value of the consideration received or receivable, net of value added
tax, rebates and discounts and after eliminating sales within the
Group. Revenue and profit are recognised as follows:
a. Housing and land sales
Revenue is recognised in the income statement when control is
transferred to the customer. This is deemed to be when title of
the property passes to the customer on legal completion and
the performance obligation associated with the sale is completed.
Revenue in respect of the sale of residential properties, whether
under the Government’s Help to Buy scheme or not, is recognised
at the fair value of the consideration received or receivable on
legal completion.
b. Long term contracts
Revenue arising on contracts which give the customer control over
properties as they are constructed, and for which the Group has
a right to payments for work performed, is recognised over time.
Revenue and costs are recognised over time with reference to the
stage of completion of the contract activity at the balance sheet date
where the outcome of a long term contract can be estimated reliably.
This is normally measured by surveys of work performed to date.
Variations in contract work, claims and incentive payments are
included to the extent that it is highly probable that they will result
in revenue and they are capable of being reliably measured. When
land is transferred at the start of a long term contract, revenue is not
recognised until control has been transferred to the customer which
includes legal title being passed to them.
Where the outcome of a long term contract cannot be estimated
reliably, contract revenue where recoverability is probable is
recognised to the extent of contract costs incurred. The costs
associated with fulfilling a contract are recognised as expenses in
the period in which they are incurred. When it is probable that total
contract costs will exceed total contract revenue, the expected loss
is recognised as an expense immediately.
c. Part exchange
In certain instances, property may be accepted in part consideration
for a sale of a residential property. The fair value is established by
independent surveyors, reduced for costs to sell. Net proceeds
generated from the subsequent sale of part exchange properties are
recorded as a reduction to net operating expenses. The original sale
is recorded in the normal way, with the fair value of the exchanged
property replacing cash receipts.
d. Cash incentives
The transaction price may include cash incentives. These are
considered to be a discount from the purchase price offered to the
acquirer and are therefore accounted for as a reduction to revenue.
Cost of sales
The Group determines the value of inventory charged to cost of sales
based on the total budgeted cost of developing a site. Once the total
expected costs of development are established, they are allocated to
individual plots to achieve a consistent margin for the site.
To the extent that additional costs or savings are identified as the
site progresses, these are recognised over the remaining plots
unless they are specific to a particular plot, in which case they
are recognised in the income statement at the point of sale.
142 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
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On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair value at the date of acquisition.
Any excess of the cost of acquisition over the fair value of the
identifiable net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair value of the
identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition.
The interest of non-controlling shareholders is stated at the non-
controlling interest’s proportion of the fair value of the assets and
liabilities recognised. Subsequently, all comprehensive income is
attributed to the owners and the non-controlling interests.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of disposal,
as appropriate. Where a subsidiary is disposed of which constituted
a major line of business, it is disclosed as a discontinued operation.
Where necessary, adjustments are made to the financial statements
of subsidiaries to bring the accounting policies used into line with
those used by the Group. All intra-Group transactions, balances,
income and expenses are eliminated on consolidation.
Joint ventures
Undertakings are deemed to be a joint venture when the Group
has joint control of the rights and assets of the undertaking via either
voting rights or a formal agreement which includes that unanimous
consent is required for strategic, financial and operating decisions.
Joint ventures are consolidated under the equity accounting method.
Loans to joint ventures form part of the Group’s net investment and
is assessed for recoverability on a periodic basis. On transfer of land
and/or work in progress to joint ventures, the Group recognises only
its share of any profits or losses. Joint operations arise where the
Group has joint control of an operation but has rights to only its own
assets and obligations related to the operation. These assets and
obligations, and the Group’s share of revenues and costs, are
included in the Group’s results.
Joint ventures and joint operations are entered into to develop specific
sites. Each arrangement is site or project specific and once the
development or project is complete the arrangement is wound down.
Segmental reporting
The Group operates in the United Kingdom and Spain. The United
Kingdom is split into five geographical operating segments, each
managed by a Divisional Chair who sits on the Group Management
Team. In addition, there are central operations covering the
corporate functions and Strategic Land.
The Group aggregates the UK operations into a single reporting
segment on the basis that they share similar economic characteristics.
In addition each Division builds and delivers residential homes, uses
consistent methods of construction, sells homes to both private
customers and local housing associations, follows a single UK sales
process and operating framework, is subject to the same macro-
economic factors including mortgage availability and has the same
cost of capital arising from the utilisation of central banking and
debt facilities.
As a result, the Group has the following reporting segments:
– United Kingdom
– Spain
Revenue
Revenue is recognised when the performance obligation associated
with the sale is completed. The transaction price comprises the fair
value of the consideration received or receivable, net of value added
tax, rebates and discounts and after eliminating sales within the
Group. Revenue and profit are recognised as follows:
a. Housing and land sales
Revenue is recognised in the income statement when control is
transferred to the customer. This is deemed to be when title of
the property passes to the customer on legal completion and
the performance obligation associated with the sale is completed.
Revenue in respect of the sale of residential properties, whether
under the Government’s Help to Buy scheme or not, is recognised
at the fair value of the consideration received or receivable on
legal completion.
b. Long term contracts
Revenue arising on contracts which give the customer control over
properties as they are constructed, and for which the Group has
a right to payments for work performed, is recognised over time.
Revenue and costs are recognised over time with reference to the
stage of completion of the contract activity at the balance sheet date
where the outcome of a long term contract can be estimated reliably.
This is normally measured by surveys of work performed to date.
Variations in contract work, claims and incentive payments are
included to the extent that it is highly probable that they will result
in revenue and they are capable of being reliably measured. When
land is transferred at the start of a long term contract, revenue is not
recognised until control has been transferred to the customer which
includes legal title being passed to them.
Where the outcome of a long term contract cannot be estimated
reliably, contract revenue where recoverability is probable is
recognised to the extent of contract costs incurred. The costs
associated with fulfilling a contract are recognised as expenses in
the period in which they are incurred. When it is probable that total
contract costs will exceed total contract revenue, the expected loss
is recognised as an expense immediately.
c. Part exchange
In certain instances, property may be accepted in part consideration
for a sale of a residential property. The fair value is established by
independent surveyors, reduced for costs to sell. Net proceeds
generated from the subsequent sale of part exchange properties are
recorded as a reduction to net operating expenses. The original sale
is recorded in the normal way, with the fair value of the exchanged
property replacing cash receipts.
d. Cash incentives
The transaction price may include cash incentives. These are
considered to be a discount from the purchase price offered to the
acquirer and are therefore accounted for as a reduction to revenue.
Cost of sales
The Group determines the value of inventory charged to cost of sales
based on the total budgeted cost of developing a site. Once the total
expected costs of development are established, they are allocated to
individual plots to achieve a consistent margin for the site.
To the extent that additional costs or savings are identified as the
site progresses, these are recognised over the remaining plots
unless they are specific to a particular plot, in which case they
are recognised in the income statement at the point of sale.
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Positive contribution
Positive contribution represents the net amount of previous
impairments allocated to inventory on a plot that has subsequently
resulted in a gross profit on completion. This is due to the combination
of selling prices and costs, or product mix improvements exceeding
market assumptions in the previous net realisable value (NRV)
exercise. These amounts are stated before the allocation of
overheads, which are excluded from the Group’s NRV exercise.
Exceptional items
Exceptional items are defined as items of income or expenditure
which, in the opinion of the Directors, are material or unusual in
nature or of such significance that they require separate disclosure
on the face of the income statement in accordance with IAS 1
‘Presentation of Financial Statements’. Should these items be
reversed, disclosure of this would also be as exceptional items.
Finance income
Interest income on bank deposits is recognised on an accruals
basis. Also included in interest receivable are interest and interest-
related payments the Group receives on other receivables.
Finance costs
Borrowing costs are recognised on an effective interest rate basis
and are payable on the Group’s borrowings and lease liabilities.
Also included are the amortisation of fees associated with the
arrangement of the financing.
Finance charges, including premiums payable on settlement
or redemption, and direct issue costs, are accounted for on an
accruals basis in the income statement using the effective interest
method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they arise.
Capitalised finance costs are held in other receivables and amortised
over the period of the facility.
Foreign currencies
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). Transactions in currencies
other than the functional currency are recorded at the rates of
exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies other than the functional currency
are retranslated at the rates prevailing at the balance sheet date.
Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Gains
and losses arising on retranslation are included in the net profit or
loss for the period.
On consolidation, the assets and liabilities of the Group’s overseas
operation are translated at exchange rates prevailing at the balance
sheet date. Income and expense items are translated at an
appropriate average rate for the year. Exchange differences arising
are recognised within other comprehensive income and transferred
to the Group’s translation reserve. Such translation differences are
recognised as income or expenses in the income statement in the
period in which the operation is disposed of.
The Group uses foreign currency borrowings to hedge its net
investment exposure to certain overseas subsidiaries.
Leases
The Group as a lessee
The Group assesses at inception whether a contract is, or contains,
a lease. A lease exists if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for
consideration. The Group assessment includes whether:
– the contract involves the use of an identified asset;
– the Group has the right to obtain substantially all of the economic
benefits from the use of the asset throughout the contract period;
and
– the Group has the right to direct the use of the asset.
At the commencement of a lease, the Group recognises a right-of-
use asset along with a corresponding lease liability.
The lease liability is initially measured at the present value of
the remaining lease payments, discounted using the Group’s
incremental borrowing rate. The lease term comprises the non-
cancellable period of the contract, together with periods covered by
an option to extend the lease where the Group is reasonably certain
to exercise that option based on operational needs and contractual
terms. Subsequently, the lease liability is measured at amortised cost
by increasing the carrying amount to reflect interest on the lease
liability and reducing it by the lease payments made. The lease
liability is remeasured when the Group changes its assessment
of whether it will exercise an extension or termination option.
Right-of-use assets are initially measured at cost, comprising
the initial measurement of the lease liability adjusted for any lease
payments made at or before the commencement date, estimated
asset retirement obligations, lease incentives received and initial
direct costs. Subsequently, right-of-use assets are measured at
cost, less any accumulated depreciation and any accumulated
impairment losses, and are adjusted for certain remeasurements
of the lease liability. Depreciation is calculated on a straight-line
basis over the length of the lease.
The Group has elected to apply exemptions for short term leases
and leases for which the underlying asset is of low value. For these
leases, payments are charged to the income statement on a
straight-line basis over the term of the relevant lease.
Right-of-use assets are presented within non-current assets on the
face of the balance sheet, and lease liabilities are shown separately
on the balance sheet in current liabilities and non-current liabilities
depending on the length of the lease term.
Intangible assets
Brands
Internally generated brands are not capitalised. Acquired brands are
capitalised. Brands are stated at cost, less accumulated amortisation
and any accumulated impairment losses. Brands are amortised over
their estimated useful life on a straight-line basis.
Software
Costs that are directly associated with the acquisition or production
of identifiable and unique software controlled by the Group, and that
generate economic benefits beyond one year, are recognised as
intangible assets. Software development costs recognised as assets
are amortised on a straight-line basis over three to five years from
the time of implementation and are stated at cost less accumulated
amortisation and any accumulated impairment losses.
143Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
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Property, plant and equipment
Land and buildings held for use in the production or supply of goods
or services, or for administrative purposes, are stated in the balance
sheet at cost less accumulated depreciation and any accumulated
impairment losses. Freehold land is not depreciated. Buildings are
depreciated over 50 years.
Plant and equipment is stated at cost less depreciation.
Depreciation is charged to expense the cost or valuation of assets
over their estimated useful lives. Other assets are depreciated using
the straight-line method, on the following bases:
– Plant and equipment: 20-33% per annum
– Leasehold improvements: over the term of the lease
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sale proceeds, less any
selling expenses, and the carrying amount of the asset. This
difference is recognised in the income statement.
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value, using a pre-tax discount
rate that reflects current market assessments and the risks specific
to the asset.
If the recoverable amount of an asset or cash-generating unit is
estimated to be less than its carrying amount, the carrying amount of
the asset or cash-generating unit is reduced to its recoverable
amount. An impairment loss is recognised as an expense
immediately in the income statement.
Where an impairment loss subsequently reverses, due to a change
in circumstances or in the estimates used to determine the asset’s
recoverable amount, the carrying amount of the asset or cash-
generating unit is increased to the revised estimate of its recoverable
amount, so long as it does not exceed the original carrying value
prior to the impairment being recognised. A reversal of an impairment
loss is recognised as income immediately in the income statement.
Financial instruments
Financial assets
Financial assets are initially recognised at fair value and subsequently
classified into one of the following measurement categories:
– Measured at amortised cost
– Measured at fair value through profit or loss (FVTPL)
– Measured at fair value through other comprehensive
income (FVOCI)
The classification of financial assets depends on the Group’s
business model for managing the asset and the contractual terms of
the cash flows. Assets that are held for the collection of contractual
cash flows that represent solely payments of principal and interest
are measured at amortised cost, with any interest income recognised
in the income statement using the effective interest rate method.
Financial assets that do not meet the criteria to be measured at
amortised cost are classified by the Group as measured at FVTPL.
Fair value gains and losses on financial assets measured at FVTPL
are recognised in the income statement and presented within net
operating expenses.
The Group currently has no financial assets measured at FVOCI.
Trade and other receivables
Trade and other receivables are measured at amortised cost, less
any loss allowance.
Shared equity loans
Shared equity loans were provided to certain customers to facilitate
a house purchase. The contractual cash flows on shared equity
loans are linked to a national house price index. Under IFRS 9,
financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are solely
payment of principal and interest. Accordingly, shared equity loans
are classified as FVTPL with fair value gains and losses arising on the
remeasurement of the loan presented in the income statement within
net operating expenses.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short
term bank deposits with an original maturity of three months or less
from inception and are subject to insignificant risk of changes in value.
Financial liabilities
Financial liabilities are initially recognised at fair value and subsequently
classified into one of the following measurement categories:
– Measured at amortised cost
– Measured at fair value through profit or loss (FVTPL)
Non-derivative financial liabilities are measured at FVTPL when
they are considered held for trading or designated as such on initial
recognition. The Group has no non-derivative financial liabilities
measured at FVTPL.
Borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred and subsequently measured at amortised cost.
Trade and other payables
Trade and other payables are measured at amortised cost. When
the acquisition of land has deferred payment terms a land creditor
is recognised. Payables are discounted to present value when
repayment is due more than one year after initial recognition or
the impact is material.
Customer deposits
Customer deposits, measured at amortised cost, are recorded as a
liability on receipt and released to the income statement as revenue
upon legal completion.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Parent Company are recorded as
the proceeds are received, net of direct issue costs.
Derivative financial instruments and hedge accounting
The Group uses foreign currency borrowings and derivatives to
hedge its net investment exposure to movements in exchange rates
on translation of certain individual financial statements denominated
in foreign currencies other than Sterling which is the functional
currency of the Parent Company.
144 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
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1. Significant accounting policies ccoonnttiinnuueedd
Property, plant and equipment
Land and buildings held for use in the production or supply of goods
or services, or for administrative purposes, are stated in the balance
sheet at cost less accumulated depreciation and any accumulated
impairment losses. Freehold land is not depreciated. Buildings are
depreciated over 50 years.
Plant and equipment is stated at cost less depreciation.
Depreciation is charged to expense the cost or valuation of assets
over their estimated useful lives. Other assets are depreciated using
the straight-line method, on the following bases:
– Plant and equipment: 20-33% per annum
– Leasehold improvements: over the term of the lease
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sale proceeds, less any
selling expenses, and the carrying amount of the asset. This
difference is recognised in the income statement.
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value, using a pre-tax discount
rate that reflects current market assessments and the risks specific
to the asset.
If the recoverable amount of an asset or cash-generating unit is
estimated to be less than its carrying amount, the carrying amount of
the asset or cash-generating unit is reduced to its recoverable
amount. An impairment loss is recognised as an expense
immediately in the income statement.
Where an impairment loss subsequently reverses, due to a change
in circumstances or in the estimates used to determine the asset’s
recoverable amount, the carrying amount of the asset or cash-
generating unit is increased to the revised estimate of its recoverable
amount, so long as it does not exceed the original carrying value
prior to the impairment being recognised. A reversal of an impairment
loss is recognised as income immediately in the income statement.
Financial instruments
Financial assets
Financial assets are initially recognised at fair value and subsequently
classified into one of the following measurement categories:
– Measured at amortised cost
– Measured at fair value through profit or loss (FVTPL)
– Measured at fair value through other comprehensive
income (FVOCI)
The classification of financial assets depends on the Group’s
business model for managing the asset and the contractual terms of
the cash flows. Assets that are held for the collection of contractual
cash flows that represent solely payments of principal and interest
are measured at amortised cost, with any interest income recognised
in the income statement using the effective interest rate method.
Financial assets that do not meet the criteria to be measured at
amortised cost are classified by the Group as measured at FVTPL.
Fair value gains and losses on financial assets measured at FVTPL
are recognised in the income statement and presented within net
operating expenses.
The Group currently has no financial assets measured at FVOCI.
Trade and other receivables
Trade and other receivables are measured at amortised cost, less
any loss allowance.
Shared equity loans
Shared equity loans were provided to certain customers to facilitate
a house purchase. The contractual cash flows on shared equity
loans are linked to a national house price index. Under IFRS 9,
financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are solely
payment of principal and interest. Accordingly, shared equity loans
are classified as FVTPL with fair value gains and losses arising on the
remeasurement of the loan presented in the income statement within
net operating expenses.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short
term bank deposits with an original maturity of three months or less
from inception and are subject to insignificant risk of changes in value.
Financial liabilities
Financial liabilities are initially recognised at fair value and subsequently
classified into one of the following measurement categories:
– Measured at amortised cost
– Measured at fair value through profit or loss (FVTPL)
Non-derivative financial liabilities are measured at FVTPL when
they are considered held for trading or designated as such on initial
recognition. The Group has no non-derivative financial liabilities
measured at FVTPL.
Borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred and subsequently measured at amortised cost.
Trade and other payables
Trade and other payables are measured at amortised cost. When
the acquisition of land has deferred payment terms a land creditor
is recognised. Payables are discounted to present value when
repayment is due more than one year after initial recognition or
the impact is material.
Customer deposits
Customer deposits, measured at amortised cost, are recorded as a
liability on receipt and released to the income statement as revenue
upon legal completion.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Parent Company are recorded as
the proceeds are received, net of direct issue costs.
Derivative financial instruments and hedge accounting
The Group uses foreign currency borrowings and derivatives to
hedge its net investment exposure to movements in exchange rates
on translation of certain individual financial statements denominated
in foreign currencies other than Sterling which is the functional
currency of the Parent Company.
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Derivative financial instruments are measured at fair value. Changes
in the fair value of derivative financial instruments that are designated
and effective as hedges of net investments in foreign operations
are recognised directly in other comprehensive income and the
ineffective portion, if any, is recognised immediately in the
income statement.
For an effective hedge of an exposure to changes in fair value, the
hedged item is adjusted for changes in fair value attributable to the
risk being hedged with the corresponding entry in the consolidated
income statement. Gains or losses from remeasuring the derivative,
or for non-derivatives the foreign currency component of its carrying
amount, are also recognised in the income statement.
Changes in the fair value of derivative financial instruments that do
not qualify for hedge accounting are recognised in the income
statement as they arise.
Hedge accounting is discontinued if the hedged item is sold or no
longer qualifies for hedge accounting at which point any cumulative
gain or loss on the hedging instrument accumulated in other
comprehensive income is transferred to the income statement
for the period.
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of a past event, and it is probable
that the Group will be required to settle that obligation. Provisions are
measured at the Directors’ best estimate of the expenditure required
to settle the obligation at the balance sheet date and are discounted
to present value where the effect is material.
Inventories
Inventories are initially stated at cost and held at the lower of
this initial amount and net realisable value. Costs comprise direct
materials and, where applicable, direct labour and those overheads
that have been incurred in bringing the inventories to their present
location and condition. Net realisable value represents the estimated
selling price less all estimated costs of completion and costs to be
incurred in marketing, selling and distribution. Land is recognised in
inventory when the significant risks and rewards of ownership have
been transferred to the Group.
Non-refundable land option payments are initially recognised in
inventory. They are reviewed regularly and written off to the income
statement when it is probable that the option will not be exercised.
Taxation
The tax charge represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year.
Taxable profit differs from profit before tax as reported in the income
statement because it excludes items of income or expense that are
taxable or deductible in other years, and it further excludes items
that are never taxable or deductible. The Group’s liability for current
tax is calculated using tax rates that have been enacted or
substantively enacted at the balance sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary
differences can be utilised.
Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are also recognised for taxable temporary
differences arising on investments in subsidiaries and interests in
joint ventures, except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax is measured on a non-discounted basis using the tax
rates and laws that have been enacted or substantively enacted by
the balance sheet date.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. Deferred tax is charged or credited
to the income statement, except when it relates to items charged or
credited directly to other comprehensive income or equity, in which
case the deferred tax is also dealt with in other comprehensive
income or equity.
Share-based payments
The Group issues equity-settled share-based payments to certain
employees. Equity-settled share-based payments are measured
at fair value at the date of grant. The fair value is expensed on a
straight-line basis over the vesting period, based on the Group’s
estimate of shares that will vest after adjusting for the effect of
non-market vesting conditions.
Employee benefits
For defined benefit plans a finance charge is determined on the net
defined benefit pension liability. The operating and financing costs
of such plans are recognised separately in the income statement;
service costs are spread systematically over the service period of
employees, past service costs are recognised as an expense at the
earlier of when the plan is amended or curtailment occurs, at the
same time as which the entity will recognise related restructuring
costs or termination benefits. Certain liability management costs
and financing costs are recognised in the periods in which they
arise. Actuarial gains and losses are recognised immediately in
the statement of comprehensive income.
The retirement benefit obligation recognised in the consolidated
statement of financial position represents either the net deficit
position of the scheme or, should the scheme be in an IAS 19
accounting surplus, the IFRIC 14 liability equal to the present
value of future committed cash contributions.
Payments to defined contribution schemes are charged as an
expense as they fall due.
145Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
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Taylor Wimpey plc Annual Report 2021
2. Critical accounting judgements and key sources
of estimation uncertainty
Preparation of the financial statements requires management to
make significant judgements and estimates. Management have
considered whether there are any such sources of estimation or
accounting judgements in forming the financial statements and
highlight the following areas. In identifying these areas, management
have considered the size of the associated balance and the potential
likelihood of changes due to macro-economic factors.
Critical accounting judgements
Management have not made any individual critical accounting
judgements that are material to the Group.
Key sources of estimation uncertainty
Key sources of estimation uncertainty are those which present
a significant risk of potential material misstatement to carrying
amounts of assets or liabilities within the next financial year.
Employee benefits
The value of the defined benefit plan liabilities is determined by using
various assumptions, including discount rate, future rates of inflation,
growth, yields, returns on investments and mortality rates. As actual
changes in these values may differ from those assumed, this is a
key source of estimation uncertainty within the financial statements.
Changes in these assumptions over time and differences to the
actual outcome will be reflected in the statement of comprehensive
income. Note 21 details the main assumptions in accounting for the
Group’s defined benefit pension scheme, along with sensitivities of
the liabilities to changes in these assumptions.
Other sources of estimation uncertainty
Cost allocation
In order to determine the profit that the Group is able to recognise
on its developments in a specific period, the Group has to allocate
site-wide development costs between units built in the current
year and in future years. It also has to estimate costs to complete,
including those driven by climate related regulation such as the
implementation of Parts L&F, on such developments, and
make estimates relating to future sales price margins on those
developments and units. In making these assessments, there
is a degree of inherent uncertainty. The Group has developed
internal controls to assess and review carrying values and
the appropriateness of estimates made.
Cladding fire safety provision
In 2018 the Group established an exceptional provision for the
cost of replacing ACM on a small number of legacy developments,
which was increased in 2020 to reflect the latest estimate of costs to
complete the planned works. Following the guidance issued by RICS
in the current year the Group announced an additional £125.0 million
provision to fund cladding fire safety improvements. The Group has
estimated the provision based on the number of buildings that may
require works under EWS1 requirements, costs to carry out the
identified works and eligibility of buildings for the UK Government’s
Building Safety Fund. In determining the total cost of works across
a number of different buildings, management initially used internal
QS estimates, which have increasingly been supported by externally
sourced quotations, where available, both of which contain inherent
estimation uncertainty, however it is not anticipated that any
reasonable possible changes would lead to a material adjustment
in the value of the provision. The scope of works may also be
impacted by future industry guidance or regulations.
Provision for leasehold
The value of this provision has been established using information
available to management at 31 December 2021, together with a
range of assumptions including the number of units which have
been sold by the original Taylor Wimpey customer and as such are
not eligible for the original GRRAS scheme, and the final deed of
variation valuations for those freeholders with whom the Group has
not yet agreed a settlement. Following the agreement of voluntary
undertakings with the CMA the level of uncertainty of assumptions
has decreased. Whilst, as at 31 December 2021, final outcomes
are not known with absolute certainty it is not anticipated that any
reasonable possible changes would lead to a material adjustment
in the value of the provision held. See Note 22 for further details on
the provision.
3. General information
incorporated and domiciled in the United Kingdom
the Companies Act and is registered in England and Wales.
The Company’s registered office is Taylor Wimpey plc, Gate House,
nature of the Group’s operations and its principal activities are set
out in the Strategic Report on pages 2 to 71.
These financial statements are presented in pounds Sterling as
the currency of the primary economic environment in which the
Group operates.
146 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
146
Taylor Wimpey plc Annual Report 2021
2. Critical accounting judgements and key sources
of estimation uncertainty
Preparation of the financial statements requires management to
make significant judgements and estimates. Management have
considered whether there are any such sources of estimation or
accounting judgements in forming the financial statements and
highlight the following areas. In identifying these areas, management
have considered the size of the associated balance and the potential
likelihood of changes due to macro-economic factors.
Critical accounting judgements
Management have not made any individual critical accounting
judgements that are material to the Group.
Key sources of estimation uncertainty
Key sources of estimation uncertainty are those which present
a significant risk of potential material misstatement to carrying
amounts of assets or liabilities within the next financial year.
Employee benefits
The value of the defined benefit plan liabilities is determined by using
various assumptions, including discount rate, future rates of inflation,
growth, yields, returns on investments and mortality rates. As actual
changes in these values may differ from those assumed, this is a
key source of estimation uncertainty within the financial statements.
Changes in these assumptions over time and differences to the
actual outcome will be reflected in the statement of comprehensive
income. Note 21 details the main assumptions in accounting for the
Group’s defined benefit pension scheme, along with sensitivities of
the liabilities to changes in these assumptions.
Other sources of estimation uncertainty
Cost allocation
In order to determine the profit that the Group is able to recognise
on its developments in a specific period, the Group has to allocate
site-wide development costs between units built in the current
year and in future years. It also has to estimate costs to complete,
including those driven by climate related regulation such as the
implementation of Parts L&F, on such developments, and
make estimates relating to future sales price margins on those
developments and units. In making these assessments, there
is a degree of inherent uncertainty. The Group has developed
internal controls to assess and review carrying values and
the appropriateness of estimates made.
Cladding fire safety provision
In 2018 the Group established an exceptional provision for the
cost of replacing ACM on a small number of legacy developments,
which was increased in 2020 to reflect the latest estimate of costs to
complete the planned works. Following the guidance issued by RICS
in the current year the Group announced an additional £125.0 million
provision to fund cladding fire safety improvements. The Group has
estimated the provision based on the number of buildings that may
require works under EWS1 requirements, costs to carry out the
identified works and eligibility of buildings for the UK Government’s
Building Safety Fund. In determining the total cost of works across
a number of different buildings, management initially used internal
QS estimates, which have increasingly been supported by externally
sourced quotations, where available, both of which contain inherent
estimation uncertainty, however it is not anticipated that any
reasonable possible changes would lead to a material adjustment
in the value of the provision. The scope of works may also be
impacted by future industry guidance or regulations.
Provision for leasehold
The value of this provision has been established using information
available to management at 31 December 2021, together with a
range of assumptions including the number of units which have
been sold by the original Taylor Wimpey customer and as such are
not eligible for the original GRRAS scheme, and the final deed of
variation valuations for those freeholders with whom the Group has
not yet agreed a settlement. Following the agreement of voluntary
undertakings with the CMA the level of uncertainty of assumptions
has decreased. Whilst, as at 31 December 2021, final outcomes
are not known with absolute certainty it is not anticipated that any
reasonable possible changes would lead to a material adjustment
in the value of the provision held. See Note 22 for further details on
the provision.
3. General information
Taylor Wimpey plc is a public company limited by shares,
incorporated and domiciled in the United Kingdom under
the Companies Act and is registered in England and Wales.
The Company’s registered office is Taylor Wimpey plc, Gate House,
Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR. The
nature of the Group’s operations and its principal activities are set
out in the Strategic Report on pages 2 to 71.
These financial statements are presented in pounds Sterling as
the currency of the primary economic environment in which the
Group operates.
Taylor Wimpey plc Annual Report 2021 147
4. Revenue
An analysis of the Group’s continuing revenue is as follows:
£ million 2021 2020
Private sales 3,890.3 2,507.9
Partnership housing 363.1 269.3
Land & other 31.5 13.0
4,284.9 2,790.2
Other revenue includes income from the sale of commercial properties developed as part of larger residential developments. The Group’s
revenue includes revenue from construction contracts that are recognised over time by reference to the stage of completion of the
contract with the customer. All other revenue is recognised at a point in time once control of the property is transferred to the customer.
£ million 2021 2020
Recognised at a point in time 3,939.2 2,573.7
Recognised over time 345.7 216.5
4,284.9 2,790.2
At 31 December 2021, the aggregate amount of the transaction price allocated to unsatisfied performance obligations on construction
contracts was £594.3 million (2020: £572.3 million), of which approximately half is expected to be recognised as revenue during 2022.
5. Operating segments
The Group operates in two countries, the United Kingdom and Spain.
The United Kingdom is split into five geographical operating segments, each managed by a Divisional Chair who sits on the Group
Management Team; there are also central operations covering the corporate functions and Strategic Land. All the UK operating segments
share similar economic characteristics. In making this assessment the Group has considered the key metrics that are used to monitor the
performance of the segments; these have been considered over a long term period and have included historic and forecast results. The
metrics focus on profitability, return on capital and other asset related measures. In addition each Division builds and delivers residential
homes, uses consistent methods of construction, sells homes to both private customers and local housing associations, follows a single UK
sales process and operating framework, is subject to the same macro-economic factors including mortgage availability and has the same cost
of capital arising from the utilisation of central banking and debt facilities. As a result, the disclosure reflects the two reportable segments of
the UK and Spain. Revenue in Spain arises entirely on private sales.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1.
Segment information about these businesses is presented below:
2021 2020
£ million UK Spain Total UK Spain Total
Revenue
External sales 4,208.1 76.8 4,284.9 2,726.9 63.3 2,790.2
Result
Profit before joint ventures, finance costs and exceptional items 808.6 14.6 823.2 276.6 15.8 292.4
Share of results of joint ventures 5.4 – 5.4 7.9 – 7.9
Operating profit (Note 32) 814.0 14.6 828.6 284.5 15.8 300.3
Exceptional items (Note 6) (125.0) – (125.0) (10.0) – (10.0)
Profit before net finance costs 689.0 14.6 703.6 274.5 15.8 290.3
Net finance costs (24.0) (25.9)
Profit before taxation 679.6 264.4
T
axation charge (124.1) (47.4)
Profit for the year 555.5 217.0
147Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
148
Taylor Wimpey plc Annual Report 2021
5. Operating segments c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
£ million
2021 2020
UK Spain Total UK Spain Total
A
ssets and liabilities
Segment operating assets 5,013.6 192.6 5,206.2 4,635.1 174.6 4,809.7
Joint ventures 85.4 – 85.4 82.2 – 82.2
Segment operating liabilities (1,757.3) (83.7) (1,841.0) (1,564.0) (63.1) (1,627.1)
Net operating assets 3,341.7 108.9 3,450.6 3,153.3 111.5 3,264.8
Net current taxation 0.2 (1.1)
Net deferred taxation (Note 14) 26.2 33.7
Net cash (Note 27) 837.0 719.4
Net assets 4,314.0 4,016.8
£ million
2021 2020
UK Spain Total UK Spain Total
Other information
Property, plant and equipment additions 2.4 0.1 2.5 2.8 0.3 3.1
Right-of-use asset additions 6.1 0.6 6.7 9.1 0.2 9.3
Software additions 2.1 – 2.1 4.9 – 4.9
Property, plant and equipment depreciation (4.6) (0.1) (4.7) (4.6) (0.1) (4.7)
Right-of-use asset depreciation (7.1) (0.2) (7.3) (7.6) (0.3) (7.9)
A
mortisation of intangible assets (3.6) – (3.6) (3.8) – (3.8)
6. Net operating expenses and profit on ordinary activities before net finance costs
Profit on ordinary activities before net finance costs for continuing operations has been arrived at after charging/(crediting):
£ million 2021 2020
A
dministration expenses 211.0 206.8
Other expenses 13.1 7.2
Other income (20.3) (9.7)
Exceptional items 125.0 10.0
Other income and expenses include profits on the sale of property, plant and equipment and the revaluation of certain shared equity mortgage
receivables, pre-acquisition and abortive costs, and profit/loss on the sale of part exchange properties.
During 2021 positive contribution of £4.1 million was recognised (2020: £4.6 million).
Exceptional items: £ million 2021 2020
Provision in relation to cladding fire safety 125.0 10.0
Exceptional items 125.0 10.0
Cladding fire safety
In 2018 the Group established an exceptional provision for the cost of replacing ACM on a small number of legacy developments, which was
increased by £10.0 million in 2020 to reflect the latest estimate of costs to complete the planned works. During 2021 the Group announced
its intention to support building owners and leaseholders with investment to ensure their apartment buildings are safe and meet current EWS1
(External Wall Fire Review) requirements. This applies to Taylor Wimpey apartment buildings constructed going back 20 years from January
2021, including apartment buildings below 18 metres. As a result the Group has recognised an additional £125.0 million provision and, in
line with Group policy, recognised it as an exceptional item. This is a complex and exceptional situation, but Taylor Wimpey is focused on
doing the right thing for its customers. The Board has determined that the Group will fund and oversee the improvement works of apartment
buildings in its ownership, regardless of eligibility for the UK Government Building Safety Fund, to make them safe and mortgageable by
achieving EWS1 certification. If Taylor Wimpey no longer owns the building and it is not eligible for the Building Safety Fund, or similar support
that may be announced in the future, where a freeholder produces a fair and proportionate plan for fire safety improvement works following
EWS1 assessment, the Group will contribute funding to bring those buildings up to the standards required by current Royal Institution of
Chartered Surveyors (RICS) EWS1 guidance. Whilst the legal responsibility continues to rest with the building owner, the Group will also
provide advice and other assistance where appropriate.
148 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
148
Taylor Wimpey plc Annual Report 2021
5. Operating segments ccoonnttiinnuueedd
£ million
2021 2020
UK Spain Total UK Spain Total
A
ssets and liabilities
Segment operating assets 5,013.6 192.6 5,206.2 4,635.1 174.6 4,809.7
Joint ventures 85.4 – 85.4 82.2 – 82.2
Segment operating liabilities (1,757.3) (83.7) (1,841.0) (1,564.0) (63.1) (1,627.1)
Net operating assets 3,341.7 108.9 3,450.6 3,153.3 111.5 3,264.8
Net current taxation 0.2 (1.1)
Net deferred taxation (Note 14) 26.2 33.7
Net cash (Note 27) 837.0 719.4
Net assets 4,314.0 4,016.8
£ million
2021 2020
UK Spain Total UK Spain Total
Other information
Property, plant and equipment additions 2.4 0.1 2.5 2.8 0.3 3.1
Right-of-use asset additions 6.1 0.6 6.7 9.1 0.2 9.3
Software additions 2.1 – 2.1 4.9 – 4.9
Property, plant and equipment depreciation (4.6) (0.1) (4.7) (4.6) (0.1) (4.7)
Right-of-use asset depreciation (7.1) (0.2) (7.3) (7.6) (0.3) (7.9)
A
mortisation of intangible assets (3.6) – (3.6) (3.8) – (3.8)
6. Net operating expenses and profit on ordinary activities before net finance costs
Profit on ordinary activities before net finance costs for continuing operations has been arrived at after charging/(crediting):
£ million 2021 2020
A
dministration expenses 211.0 206.8
Other expenses 13.1 7.2
Other income (20.3) (9.7)
Exceptional items 125.0 10.0
Other income and expenses include profits on the sale of property, plant and equipment and the revaluation of certain shared equity mortgage
receivables, pre-acquisition and abortive costs, and profit/loss on the sale of part exchange properties.
During 2021 positive contribution of £4.1 million was recognised (2020: £4.6 million).
Exceptional items: £ million 2021 2020
Provision in relation to cladding fire safety 125.0 10.0
Exceptional items 125.0 10.0
Cladding fire safety
In 2018 the Group established an exceptional provision for the cost of replacing ACM on a small number of legacy developments, which was
increased by £10.0 million in 2020 to reflect the latest estimate of costs to complete the planned works. During 2021 the Group announced
its intention to support building owners and leaseholders with investment to ensure their apartment buildings are safe and meet current EWS1
(External Wall Fire Review) requirements. This applies to Taylor Wimpey apartment buildings constructed going back 20 years from January
2021, including apartment buildings below 18 metres. As a result the Group has recognised an additional £125.0 million provision and, in
line with Group policy, recognised it as an exceptional item. This is a complex and exceptional situation, but Taylor Wimpey is focused on
doing the right thing for its customers. The Board has determined that the Group will fund and oversee the improvement works of apartment
buildings in its ownership, regardless of eligibility for the UK Government Building Safety Fund, to make them safe and mortgageable by
achieving EWS1 certification. If Taylor Wimpey no longer owns the building and it is not eligible for the Building Safety Fund, or similar support
that may be announced in the future, where a freeholder produces a fair and proportionate plan for fire safety improvement works following
EWS1 assessment, the Group will contribute funding to bring those buildings up to the standards required by current Royal Institution of
Chartered Surveyors (RICS) EWS1 guidance. Whilst the legal responsibility continues to rest with the building owner, the Group will also
provide advice and other assistance where appropriate.
Taylor Wimpey plc Annual Report 2021 149
6. Net operating expenses and profit on ordinary activities before net finance costs c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
Profit on ordinary activities before net finance costs has been arrived at after charging:
£ million 2021 2020
Cost of inventories recognised as an expense in cost of sales 3,135.0 2,094.2
Property, plant and equipment depreciation (Note 12) 4.7 4.7
Right-of-use asset depreciation (Note 19) 7.3 7.9
A
mortisation of intangible assets (Note 11) 3.6 3.8
During 2020 the Group identified and expensed £62.7 million of costs relating to the COVID-19 pandemic, with £60.3 million charged to
gross profit and £2.4 million to administrative costs. These costs included unproductive site overhead costs incurred during the controlled
closure and lockdown period which would ordinarily be capitalised to WIP and expensed as plots legally completed of £29.9 million; additional
costs incurred by the business due to extended site durations resulting from the reduced productivity levels as the Group implemented
its operational processes under the COVID-secure guidelines totalling £17.4 million; and incremental costs incurred by the business in
responding to COVID-19, including to meet its health and safety requirements and complying with Government guidelines, of £15.4 million.
No costs in relation to COVID-19 have been separately identified in 2021.
The remuneration paid to the Group’s external auditors, PricewaterhouseCoopers LLP (2020: Deloitte LLP), is as follows:
£ million 2021 2020
Fees payable for the audit of the Company’s annual accounts and consolidated financial statements 0.2 0.2
Fees payable to the Company’s auditors and its associates for other services to the Group:
T
he audit of the Company’s subsidiaries pursuant to legislation 0.6 0.3
T
otal audit fees 0.8 0.5
Other assurance services 0.1 0.2
T
otal non-audit fees 0.1 0.2
T
otal fees 0.9 0.7
Non-audit services in 2021 and 2020 predominantly relate to work undertaken as a result of PricewaterhouseCoopers LLP’s (2020: Deloitte
LLP’s) role as auditors, or work resulting from knowledge and experience gained as part of the role. In 2021 the fees relating to other
assurance services primarily related to the review of the interim statements and also included £2,000 for a subscription service providing
factual updates and changes to applicable law, regulation or accounting and auditing standards. In 2020, non-audit fees predominantly
related to the review of the interim statements and also included £50,000 of other services related to enhanced assurance.
7. Staff costs
Number 2021 2020
Monthly average number employed
United Kingdom 5,271 5,948
Spain 87 81
5,358 6,029
£ million 2021 2020
Remuneration
Wages and salaries 278.0 264.9
Redundancy costs 0.4 5.5
Social security costs 28.9 28.7
Other pension costs 14.1 15.2
321.4 314.3
The information relating to Director and Senior Management remuneration required by the Companies Act 2006 and the Listing Rules of the
Financial Conduct Authority is contained in Note 30 and pages 105 to 124 in the Directors’ Remuneration Report.
149Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
150
Taylor Wimpey plc Annual Report 2021
8. Finance income and finance costs
Finance income
£ million
2021 2020
Interest receivable 2.4 3.1
Foreign exchange gain – 0.4
2.4 3.5
Finance costs
£ million 2021 2020
Interest on bank and other loans (5.0) (8.3)
Foreign exchange loss (0.8) –
(5.8) (8.3)
Unwinding of discount on land creditors and other items (19.2) (19.3)
Interest on lease liabilities (Note 19) (0.4) (0.4)
Net interest on pension liability (Note 21) (1.0) (1.4)
(26.4) (29.4)
9. Taxation charge
Tax (charged)/credited in the income statement is analysed as follows:
£ million 2021 2020
Current tax:
UK: Current year (122.0) (38.5)
A
djustment in respect of prior years 2.3 (0.6)
Overseas: Current year (2.5) (2.2)
A
djustment in respect of prior years (0.1) –
(122.3) (41.3)
Deferred tax:
UK: Current year (2.7) (5.5)
A
djustment in respect of prior years (0.3) (0.2)
Overseas: Current year 1.2 (0.4)
A
djustment in respect of prior years – –
(1.8) (6.1)
(124.1) (47.4)
Corporation tax is calculated at 19.0% (2020: 19.0%) of the estimated assessable profit for the year in the UK. Taxation outside the UK is
calculated at the rates prevailing in the respective jurisdictions. The effective tax rate, before exceptional items, is 18.4% (2020: 17.9%). The
tax charge for the year includes an exceptional credit of £23.8 million relating to the cladding fire safety provision. The tax charge for the prior
year includes an exceptional credit of £1.7 million relating to the cladding fire safety provision. The charge for the year can be reconciled to the
profit per the income statement as follows:
£ million 2021 2020
Profit before tax 679.6 264.4
T
ax at the UK corporation tax rate of 19.0% (2020: 19.0%) (129.1) (50.2)
Net over/(under) provision in respect of prior years 1.9 (0.9)
Net impact of items that are not taxable or deductible 2.6 2.8
Recognition of deferred tax asset relating to Spanish business 2.2 1.1
Other rate impacting adjustments (1.7) (0.2)
T
ax charge for the yea
r
(124.1) (47.4)
150 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
150
Taylor Wimpey plc Annual Report 2021
8. Finance income and finance costs
Finance income
£ million
2021 2020
Interest receivable 2.4 3.1
Foreign exchange gain – 0.4
2.4 3.5
Finance costs
£ million 2021 2020
Interest on bank and other loans (5.0) (8.3)
Foreign exchange loss (0.8) –
(5.8) (8.3)
Unwinding of discount on land creditors and other items (19.2) (19.3)
Interest on lease liabilities (Note 19) (0.4) (0.4)
Net interest on pension liability (Note 21) (1.0) (1.4)
(26.4) (29.4)
9. Taxation charge
Tax (charged)/credited in the income statement is analysed as follows:
£ million 2021 2020
Current tax:
UK: Current year (122.0) (38.5)
A
djustment in respect of prior years 2.3 (0.6)
Overseas: Current year (2.5) (2.2)
A
djustment in respect of prior years (0.1) –
(122.3) (41.3)
Deferred tax:
UK: Current year (2.7) (5.5)
A
djustment in respect of prior years (0.3) (0.2)
Overseas: Current year 1.2 (0.4)
A
djustment in respect of prior years – –
(1.8) (6.1)
(124.1) (47.4)
Corporation tax is calculated at 19.0% (2020: 19.0%) of the estimated assessable profit for the year in the UK. Taxation outside the UK is
calculated at the rates prevailing in the respective jurisdictions. The effective tax rate, before exceptional items, is 18.4% (2020: 17.9%). The
tax charge for the year includes an exceptional credit of £23.8 million relating to the cladding fire safety provision. The tax charge for the prior
year includes an exceptional credit of £1.7 million relating to the cladding fire safety provision. The charge for the year can be reconciled to the
profit per the income statement as follows:
£ million 2021 2020
Profit before tax 679.6 264.4
T
ax at the UK corporation tax rate of 19.0% (2020: 19.0%) (129.1) (50.2)
Net over/(under) provision in respect of prior years 1.9 (0.9)
Net impact of items that are not taxable or deductible 2.6 2.8
Recognition of deferred tax asset relating to Spanish business 2.2 1.1
Other rate impacting adjustments (1.7) (0.2)
T
ax charge for the yea
r
(124.1) (47.4)
Taylor Wimpey plc Annual Report 2021 151
10. Earnings per share
2021 2020
Basic earnings per share 15.3p 6.3p
Diluted earnings per share 15.2p 6.2p
A
djusted basic earnings per share 18.0p 6.5p
A
djusted diluted earnings per share 18.0p 6.5p
Weighted average number of shares for basic earnings per share – million 3,639.3 3,471.2
Weighted average number of shares for diluted earnings per share – million 3,649.0 3,473.6
Adjusted basic and adjusted diluted earnings per share, which exclude the impact of exceptional items and any associated net tax amounts,
are presented to provide a measure of the underlying performance of the Group. A reconciliation of earnings attributable to equity shareholders
used for basic and diluted earnings per share to that used for adjusted earnings per share is shown below.
£ million 2021 2020
Earnings for basic and diluted earnings per share 555.5 217.0
A
djust for exceptional items (Note 6) 125.0 10.0
A
djust for tax on exceptional items (23.8) (1.7)
Earnings for adjusted basic and adjusted diluted earnings per share 656.7 225.3
Million 2021 2020
Weighted average number of shares for basic earnings per share 3,639.3 3,471.2
Share options 9.7 2.4
Weighted average number of shares for diluted earnings per share 3,649.0 3,473.6
11. Intangible assets
£ million Brands Software Total
Cost
A
t 1 January 2020 140.2 17.2 157.4
A
dditions – 4.9 4.9
A
t 31 December 2020 140.2 22.1 162.3
A
dditions – 2.1 2.1
Disposals – (0.9) (0.9)
A
t 31 December 2021 140.2 23.3 163.5
A
ccumulated amortisation
A
t 1 January 2020 (140.2) (10.2) (150.4)
Charge for the year – (3.8) (3.8)
A
t 31 December 2020 (140.2) (14.0) (154.2)
Charge for the year – (3.6) (3.6)
Disposals – 0.9 0.9
A
t 31 December 2021 (140.2) (16.7) (156.9)
Carrying amount
A
t 31 December 2021 – 6.6 6.6
A
t 31 December 2020 – 8.1 8.1
The amortisation of software is recognised within administration expenses in the income statement.
151Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
152
Taylor Wimpey plc Annual Report 2021
12. Property, plant and equipment
£ million
Freehold land
and buildings
Plant,
equipment
and leasehold
improvements Total
Cost
A
t 1 January 2020 16.5 24.9 41.4
A
dditions – 3.1 3.1
Exchange movements – 0.1 0.1
A
t 31 December 2020 16.5 28.1 44.6
A
dditions – 2.5 2.5
Disposals – (0.7) (0.7)
Exchange movements – (0.1) (0.1)
A
t 31 December 2021 16.5 29.8 46.3
A
ccumulated depreciation
A
t 1 January 2020 (2.7) (13.1) (15.8)
Charge for the year (0.5) (4.2) (4.7)
Exchange movements – (0.1) (0.1)
A
t 31 December 2020 (3.2) (17.4) (20.6)
Charge for the year (0.9) (3.8) (4.7)
Disposals – 0.7 0.7
Exchange movements – – –
A
t 31 December 2021 (4.1) (20.5) (24.6)
Carrying amount
A
t 31 December 2021 12.4 9.3 21.7
A
t 31 December 2020 13.3 10.7 24.0
13. Interests in joint ventures
£ million 2021 2020
A
ggregated amounts relating to share of all joint ventures:
Non-current assets 16.7 25.3
Current assets 145.1 115.0
T
otal assets 161.8 140.3
Current liabilities (43.7) (28.2)
Non-current liabilities (100.0) (91.8)
T
otal liabilities (143.7) (120.0)
Carrying amount 24.4 24.3
Loans to joint ventures 61.0 57.9
T
otal interests in joint ventures 85.4 82.2
Loans to joint ventures includes £(6.3) million (2020: £(4.0) million) relating to the Group’s share of losses recognised under the equity method
in excess of the investment in ordinary shares.
152 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
152
Taylor Wimpey plc Annual Report 2021
12. Property, plant and equipment
£ million
Freehold land
and buildings
Plant,
equipment
and leasehold
improvements Total
Cost
A
t 1 January 2020 16.5 24.9 41.4
A
dditions – 3.1 3.1
Exchange movements – 0.1 0.1
A
t 31 December 2020 16.5 28.1 44.6
A
dditions – 2.5 2.5
Disposals – (0.7) (0.7)
Exchange movements – (0.1) (0.1)
A
t 31 December 2021 16.5 29.8 46.3
A
ccumulated depreciation
A
t 1 January 2020 (2.7) (13.1) (15.8)
Charge for the year (0.5) (4.2) (4.7)
Exchange movements – (0.1) (0.1)
A
t 31 December 2020 (3.2) (17.4) (20.6)
Charge for the year (0.9) (3.8) (4.7)
Disposals – 0.7 0.7
Exchange movements – – –
A
t 31 December 2021 (4.1) (20.5) (24.6)
Carrying amount
A
t 31 December 2021 12.4 9.3 21.7
A
t 31 December 2020 13.3 10.7 24.0
13. Interests in joint ventures
£ million 2021 2020
A
ggregated amounts relating to share of all joint ventures:
Non-current assets 16.7 25.3
Current assets 145.1 115.0
T
otal assets 161.8 140.3
Current liabilities (43.7) (28.2)
Non-current liabilities (100.0) (91.8)
T
otal liabilities (143.7) (120.0)
Carrying amount 24.4 24.3
Loans to joint ventures 61.0 57.9
T
otal interests in joint ventures 85.4 82.2
Loans to joint ventures includes £(6.3) million (2020: £(4.0) million) relating to the Group’s share of losses recognised under the equity method
in excess of the investment in ordinary shares.
Taylor Wimpey plc Annual Report 2021 153
13. Interests in joint ventures c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
£ million 2021 2020
Group share of:
Revenue 99.9 96.0
Cost of sales (87.5) (77.4)
Gross profit 12.4 18.6
Net operating expenses (3.3) (5.3)
Profit before net finance costs 9.1 13.3
Net finance costs (2.2) (3.3)
Profit before taxation 6.9 10.0
T
axation (1.5) (2.1)
Share of joint ventures’ post-tax results for the year 5.4 7.9
The Group has five material (2020: five) joint ventures whose principal activity is residential housebuilding or development. The Group
considers a joint venture to be material when it is financially or strategically important to the Group.
The particulars of the material joint ventures for 2021 are as follows:
Joint venture Country of incorporation
Interest in the issued
ordinary share capital*
Greenwich Millennium Village Limited United Kingdom 50%
Chobham Manor Limited Liability Partnership United Kingdom 50%
Winstanley and York Road Regeneration LLP United Kingdom 50%
Whitehill & Bordon Development Company Phase 1a Limited United Kingdom 50%
Whitehill & Bordon Regeneration Company Limited United Kingdom 50%
* Interests held by subsidiary undertakings.
Further information on the particulars of joint ventures can be found on page 180.
The following two tables show summary financial information for the material joint ventures. Unless specifically indicated, this information
represents 100% of the joint venture before intercompany eliminations.
£ million
Greenwich
Millennium
Village
2021
Chobham
Manor
2021
Winstanley
and York Road
Regeneration
2021
Whitehill &
Bordon
Development
Company
Phase 1a
2021
Whitehill &
Bordon
Regeneration
Company
2021
Total
2021
Non-current assets – – – – 32.8 32.8
Current assets 46.5 73.0 61.3 8.1 8.7 197.6
Cash and cash equivalents 22.4 37.1 2.6 1.2 2.1 65.4
Current financial liabilities (6.4) (43.6) (3.1) (5.4) (6.6) (65.1)
Current other liabilities (2.4) – – (0.8) (0.2) (3.4)
Non-current financial liabilities* (27.8) (56.3) (73.4) (0.3) (34.2) (192.0)
Net assets/(liabilities) (100%) 32.3 10.2 (12.6) 2.8 2.6 35.3
Group share of net assets/(liabilities) 16.2 5.1 (6.3) 1.4 1.3 17.7
Loans to joint ventures 7.5 27.4 31.4 – 0.1 66.4
Total interests in material joint ventures 23.7 32.5 25.1 1.4 1.4 84.1
Revenue 39.9 66.0 11.2 27.7 26.0 170.8
Interest (expense)/income (0.5) – (3.7) (0.6) 0.9 (3.9)
Income tax expense (1.7) – – (0.8) (0.2) (2.7)
Profit/(loss) for the year 7.2 4.6 (4.6) 3.2 0.6 11.0
Group share of profit/(loss) for the year 3.6 2.3 (2.3) 1.6 0.3 5.5
* Non-current financial liabilities include amounts owed to joint venture partners.
153Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
154
Taylor Wimpey plc Annual Report 2021
13. Interests in joint ventures c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
£ million
Greenwich
Millennium
Village
2020
Chobham
Manor
2020
Winstanley and
York Road
Regeneration
2020
Whitehill &
Bordon
Development
Company
Phase 1a
2020
Whitehill &
Bordon
Regeneration
Company
2020
Total
2020
Non-current assets – – – 0.3 49.6 49.9
Current assets 39.0 57.0 59.8 16.0 2.1 173.9
Cash and cash equivalents 19.5 12.2 12.8 1.8 0.6 46.9
Current financial liabilities (10.0) (13.9) (12.2) (7.1) (9.2) (52.4)
Current other liabilities (2.8) – – – – (2.8)
Non-current financial liabilities* (10.0) (49.7) (68.4) (7.8) (40.9) (176.8)
Net assets/(liabilities) (100%) 35.7 5.6 (8.0) 3.2 2.2 38.7
Group share of net assets/(liabilities) 17.9 2.8 (4.0) 1.6 1.1 19.4
Loans to joint ventures 2.5 22.6 29.7 – 3.3 58.1
Total interests in material joint ventures 20.4 25.4 25.7 1.6 4.4 77.5
Revenue 72.7 23.3 52.6 23.8 19.7 192.1
Interest expense (0.1) – (5.2) (1.1) – (6.4)
Income tax expense (3.6) – – (0.5) (0.2) (4.3)
Profit/(loss) for the year 15.3 (1.0) 3.5 2.3 0.2 20.3
Group share of profit/(loss) for the year 7.6 (0.5) 1.8 1.2 0.1 10.2
* Non-current financial liabilities include amounts owed to joint venture partners.
During the current and prior year, no entity charged depreciation or amortisation. No entity had discontinued operations or items of other
comprehensive income.
Aggregated amounts relating to share of individually immaterial joint ventures:
£ million 2021 2020
Non-current assets 0.3 0.3
Current assets 13.6 4.6
T
otal assets 13.9 4.9
Current liabilities (9.5) (0.6)
Non-current liabilities (4.0) (3.4)
T
otal liabilities (13.5) (4.0)
Carrying amount 0.4 0.9
Loans to individually immaterial joint ventures 0.9 3.8
T
otal interests in individually immaterial joint ventures 1.3 4.7
The aggregate loss relating to individually immaterial joint ventures was £0.1 million (2020: £2.3 million).
14. Deferred tax
£ million
Share-based
payments
Capital
allowances
Losses
Retirement
benefit
obligations
Other
temporary
differences
Total
A
t 1 January 2020 3.4 2.3 5.3 13.4 5.4 29.8
(Charge)/credit to income (1.3) (0.3) – (5.1) 0.6 (6.1)
Credit to other comprehensive income – – – 8.6 – 8.6
Credit to statement of changes in equity 0.8 – – – – 0.8
Foreign exchange – – 0.6 – – 0.6
A
t 31 December 2020 2.9 2.0 5.9 16.9 6.0 33.7
Credit/(charge) to income 0.9 0.4 1.2 (2.7) (1.6) (1.8)
Charge to other comprehensive income – – – (5.4) – (5.4)
Credit to statement of changes in equity 0.1 – – – – 0.1
Foreign exchange – – (0.4) – – (0.4)
A
t 31 December 2021 3.9 2.4 6.7 8.8 4.4 26.2
154 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
154
Taylor Wimpey plc Annual Report 2021
13. Interests in joint ventures ccoonnttiinnuueedd
£ million
Greenwich
Millennium
Village
2020
Chobham
Manor
2020
Winstanley and
York Road
Regeneration
2020
Whitehill &
Bordon
Development
Company
Phase 1a
2020
Whitehill &
Bordon
Regeneration
Company
2020
Total
2020
Non-current assets – – – 0.3 49.6 49.9
Current assets 39.0 57.0 59.8 16.0 2.1 173.9
Cash and cash equivalents 19.5 12.2 12.8 1.8 0.6 46.9
Current financial liabilities (10.0) (13.9) (12.2) (7.1) (9.2) (52.4)
Current other liabilities (2.8) – – – – (2.8)
Non-current financial liabilities* (10.0) (49.7) (68.4) (7.8) (40.9) (176.8)
Net assets/(liabilities) (100%) 35.7 5.6 (8.0) 3.2 2.2 38.7
Group share of net assets/(liabilities) 17.9 2.8 (4.0) 1.6 1.1 19.4
Loans to joint ventures 2.5 22.6 29.7 – 3.3 58.1
Total interests in material joint ventures 20.4 25.4 25.7 1.6 4.4 77.5
Revenue 72.7 23.3 52.6 23.8 19.7 192.1
Interest expense (0.1) – (5.2) (1.1) – (6.4)
Income tax expense (3.6) – – (0.5) (0.2) (4.3)
Profit/(loss) for the year 15.3 (1.0) 3.5 2.3 0.2 20.3
Group share of profit/(loss) for the year 7.6 (0.5) 1.8 1.2 0.1 10.2
* Non-current financial liabilities include amounts owed to joint venture partners.
During the current and prior year, no entity charged depreciation or amortisation. No entity had discontinued operations or items of other
comprehensive income.
Aggregated amounts relating to share of individually immaterial joint ventures:
£ million 2021 2020
Non-current assets 0.3 0.3
Current assets 13.6 4.6
T
otal assets 13.9 4.9
Current liabilities (9.5) (0.6)
Non-current liabilities (4.0) (3.4)
T
otal liabilities (13.5) (4.0)
Carrying amount 0.4 0.9
Loans to individually immaterial joint ventures 0.9 3.8
T
otal interests in individually immaterial joint ventures 1.3 4.7
The aggregate loss relating to individually immaterial joint ventures was £0.1 million (2020: £2.3 million).
14. Deferred tax
£ million
Share-based
payments
Capital
allowances
Losses
Retirement
benefit
obligations
Other
temporary
differences
Total
A
t 1 January 2020 3.4 2.3 5.3 13.4 5.4 29.8
(Charge)/credit to income (1.3) (0.3) – (5.1) 0.6 (6.1)
Credit to other comprehensive income – – – 8.6 – 8.6
Credit to statement of changes in equity 0.8 – – – – 0.8
Foreign exchange – – 0.6 – – 0.6
A
t 31 December 2020 2.9 2.0 5.9 16.9 6.0 33.7
Credit/(charge) to income 0.9 0.4 1.2 (2.7) (1.6) (1.8)
Charge to other comprehensive income – – – (5.4) – (5.4)
Credit to statement of changes in equity 0.1 – – – – 0.1
Foreign exchange – – (0.4) – – (0.4)
A
t 31 December 2021 3.9 2.4 6.7 8.8 4.4 26.2
Taylor Wimpey plc Annual Report 2021 155
14. Deferred tax
c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
Closing deferred tax on UK temporary differences has been calculated at the tax rates that are expected to apply (based on currently enacted
law) for the period when the asset is realised, or the liability is settled. Accordingly, the temporary differences have been calculated at rates
between 19% and 25% (2020: 19%), depending on when the asset will unwind.
The net deferred tax balance is analysed into assets and liabilities as follows:
£ million 2021 2020
Deferred tax assets 27.6 35.1
Deferred tax liabilities (1.4) (1.4)
26.2 33.7
In the Autumn Budget 2021, a new 4% residential property developer tax (RPDT) was announced which will be effective from 1 April 2022.
Although now enacted, at the balance sheet date, the legislation for the RPDT had not been substantively enacted and therefore
measurement of the Group’s UK deferred tax assets do not reflect this change. From 1 April 2023, the UK Corporation Tax rate is legislated
to increase to 25%. This increase in rate had been enacted by the balance sheet date so has been reflected in the measurement of the
Group’s closing UK deferred tax assets.
The Group has not recognised temporary differences relating to tax losses carried forward and other temporary differences amounting to £1.9
million (2020: £2.4 million) in the UK and £27.4 million (2020: £38.7 million) in Spain. The UK temporary differences have not been recognised
as they are predominantly non-trading in nature and insufficient certainty exists as to their future utilisation. The temporary differences in Spain
have not been recognised due to uncertainty of sufficient taxable profits in the future against which to utilise these amounts.
At the balance sheet date, the Group has unused UK capital losses of £269.5 million (2020: £269.5 million). No deferred tax asset has been
recognised in respect of the capital losses at 31 December 2021 because the Group does not believe that it is probable that these capital
losses will be utilised in the foreseeable future.
15. Inventories
£ million 2021 2020
Land 3,385.7 2,875.7
Development and construction costs 1,548.1 1,638.8
Part exchange and other 11.9 20.2
4,945.7 4,534.7
The markets in our core geographies, which are the primary drivers of our business, continue to trade positively. At 31 December 2021,
the Group completed a net realisable value assessment of inventory, considering each site individually and based on estimates of sales price,
costs to complete and costs to sell. At 31 December 2021 the provision held in the United Kingdom was £19.3 million (2020: £25.5 million)
and £35.5 million in Spain (2020: £38.9 million). The table below details the movements on the inventory provision recorded in the year.
£ million 2021 2020
1 January 64.4 68.6
Net utilised (7.0) (6.6)
Foreign exchange (2.6) 2.4
31 December 54.8 64.4
16. Other financial assets
Trade and other receivables
Current Non-current
£ million 2021 2020 2021 2020
T
rade receivables 105.7 127.5 15.8 19.3
Other receivables 62.5 61.6 11.7 7.0
168.2 189.1 27.5 26.3
Included within trade receivables are mortgage receivables of £17.9 million (2020: £26.7 million), including shared equity loans. Shared equity
loans were provided to certain customers to facilitate their house purchase and are measured at fair value through profit or loss.
Cash and cash equivalents
£ million 2021 2020
Cash and cash equivalents 921.0 823.0
Further information on financial assets can be found in Note 20.
155Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
156
Taylor Wimpey plc Annual Report 2021
17. Bank and other loans
£ million 2021 2020
€100.0 million 2.02% Senior Loan Notes 2023 84.0 90.1
€15.0 million 1.65% Loan 2021 – 13.5
84.0 103.6
£ million 2021 2020
A
mounts due for settlement within one year – 13.5
A
mount due for settlement after one yea
r
84.0 90.1
T
otal borrowings 84.0 103.6
Further information on loan facilities can be found in Note 20.
18. Trade and other payables
Current Non-current
£ million 2021 2020 2021 2020
T
rade payables 274.3 275.0 19.3 21.4
Land creditors 314.2 347.9 492.2 328.0
Social security and other taxes 8.8 8.6 – –
Customer deposits 82.4 82.8 20.9 7.4
Completed site accruals 122.6 115.0 40.9 46.1
A
ccrued expenses and deferred income 92.3 77.9 44.7 43.2
Other payables 7.3 12.1 11.3 13.7
901.9 919.3 629.3 459.8
Revenue recognised in the current year that was included in the customer deposit balance brought forward at the beginning of the period was
£82.8 million (2020: £65.0 million). Other payables include £13.9 million (2020: £19.4 million) of repayable grants.
Land creditors are denominated as follows:
£ million 2021 2020
Sterling 782.1 663.4
Euros 24.3 12.5
806.4 675.9
Land creditors of £523.1 million (2020: £430.4 million) are secured against land acquired for development.
Further information on financial liabilities can be found in Note 20.
19. Leases
The Group as a lessee
The Group’s leases consist primarily of office premises and equipment.
Right-of-use assets:
£ million
Office
premises Equipment Total
A
t 1 January 2021 18.4 9.1 27.5
A
t 31 December 2021 17.6 8.9 26.5
A
dditions during the year 2.4 4.3 6.7
Lease liabilities:
£ million 2021 2020
Current 7.0 6.4
Non-current 20.4 21.6
T
otal 27.4 28.0
156 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
156
Taylor Wimpey plc Annual Report 2021
17. Bank and other loans
£ million 2021 2020
€100.0 million 2.02% Senior Loan Notes 2023 84.0 90.1
€15.0 million 1.65% Loan 2021 – 13.5
84.0 103.6
£ million 2021 2020
A
mounts due for settlement within one year – 13.5
A
mount due for settlement after one yea
r
84.0 90.1
T
otal borrowings 84.0 103.6
Further information on loan facilities can be found in Note 20.
18. Trade and other payables
Current Non-current
£ million 2021 2020 2021 2020
T
rade payables 274.3 275.0 19.3 21.4
Land creditors 314.2 347.9 492.2 328.0
Social security and other taxes 8.8 8.6 – –
Customer deposits 82.4 82.8 20.9 7.4
Completed site accruals 122.6 115.0 40.9 46.1
A
ccrued expenses and deferred income 92.3 77.9 44.7 43.2
Other payables 7.3 12.1 11.3 13.7
901.9 919.3 629.3 459.8
Revenue recognised in the current year that was included in the customer deposit balance brought forward at the beginning of the period was
£82.8 million (2020: £65.0 million). Other payables include £13.9 million (2020: £19.4 million) of repayable grants.
Land creditors are denominated as follows:
£ million 2021 2020
Sterling 782.1 663.4
Euros 24.3 12.5
806.4 675.9
Land creditors of £523.1 million (2020: £430.4 million) are secured against land acquired for development.
Further information on financial liabilities can be found in Note 20.
19. Leases
The Group as a lessee
The Group’s leases consist primarily of office premises and equipment.
Right-of-use assets:
£ million
Office
premises Equipment Total
A
t 1 January 2021 18.4 9.1 27.5
A
t 31 December 2021 17.6 8.9 26.5
A
dditions during the year 2.4 4.3 6.7
Lease liabilities:
£ million 2021 2020
Current 7.0 6.4
Non-current 20.4 21.6
T
otal 27.4 28.0
Taylor Wimpey plc Annual Report 2021 157
19. Leases
c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
A
mounts recognised in the income statemen
t
:
£ million 2021 2020
Depreciation charged on right-of-use office premises 3.1 3.7
Depreciation charged on right-of-use equipment 4.2 4.2
Interest on lease liabilities 0.4 0.4
T
otal 7.7 8.3
The total cash outflow for leases during the current year was £7.3 million, including £0.4 million of interest (2020: £8.4 million, including
£0.4 million of interest).
20. Financial instruments and fair value disclosures
Capital management
The Group’s policy is to maintain a strong balance sheet and to have an appropriate funding structure. Shareholders’ equity and term
debt are used to finance non-current assets and the medium to long term inventories. Revolving credit facilities are used to finance net
current assets, including development and construction costs. The Group’s financing facilities contain the usual financial covenants including
minimum interest cover and maximum gearing. The Group met these requirements throughout the year and up to the date of the approval of
the financial statements. The Ordinary Dividend Policy is to return c.7.5% of net assets to shareholders annually, which will be at least £250
million per annum, in two equal instalments.
Financial assets and financial liabilities
Categories of financial assets and financial liabilities are as follows:
Carrying value Fair value
Financial assets
£ million
Fair value
hierarchy
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Cash and cash equivalents a 921.0 823.0 921.0 823.0
Land receivables a 18.7 4.6 18.7 4.6
Other financial assets a 10.0 – 10.0 –
T
rade and other receivables a 105.0 118.2 105.0 118.2
Mortgage receivables b 17.9 26.7 17.9 26.7
1,072.6 972.5 1,072.6 972.5
a. The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements to approximate
their fair value.
b. Mortgage receivables relate to sales incentives, including shared equity loans and are measured at fair value through profit or loss. The fair value is established based on
a publicly available national house price index, being significant other observable inputs (level 2).
Land receivables and trade and other receivables are included in the balance sheet as trade and other receivables for current and non-current
amounts. Current and non-current trade and other receivables, as disclosed in Note 16, include £54.1 million (2020: £65.9 million) of non-
financial assets.
Carrying value Fair value
Financial liabilities
£ million
Fair value
hierarchy
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Bank and other loans a 84.0 103.6 84.8 102.9
Land creditors b 806.4 675.9 806.4 675.9
T
rade and other payables b 543.3 539.2 543.3 539.2
Lease liabilities b 27.4 28.0 27.4 28.0
1,461.1 1,346.7 1,461.9 1,346.0
a. The fair value of the €100 million fixed rate loan notes has been determined by reference to external interest rates and the Directors’ assessment of the margin for credit
risk (level 2).
b. The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements to approximate
their fair value.
Current and non-current trade and other payables, as disclosed in Note 18, include £181.5 million (2020: £164.0 million) of
non-financial liabilities.
The Group has designated the carrying value of €79.0 million of foreign currency borrowings (2020: €79.0 million foreign currency borrowings)
as a net investment hedge, equating to £66.4 million (2020: £71.2 million).
The Group has no financial instruments with fair values that are determined by reference to significant unobservable inputs (level 3), nor have
there been any transfers of assets or liabilities between levels of the fair value hierarchy. There are no non-recurring fair value measurements.
157Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
158
Taylor Wimpey plc Annual Report 2021
20. Financial instruments and fair value disclosures c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
Forward contracts have been entered into to offset the foreign exchange movements on intra-Group loans to buy/(sell) against Sterling:
€9.5 million (2020: €21.0 million), equivalent to £8.0 million (2020: £18.9 million). The fair value of the forward contracts is not material as they
were entered into on or near 31 December in each year and mature less than one month later, hence the value of the derivative is negligible.
Market risk
The Group’s activities expose it to the financial risks of changes in both foreign currency exchange rates and interest rates. The Group aims to
manage the exposure to these risks using fixed or variable rate borrowings, foreign currency borrowings and derivative financial instruments.
(a) Interest rate risk management
The Group can be exposed to interest rate risk as the Group borrows funds, when required, at variable interest rates. The exposure to variable
rate borrowings can fluctuate during the year due to the seasonal nature of cash flows relating to housing sales and the less certain timing of
land payments. Group policy is to manage the volatility risk of interest rates by a combination of fixed rate borrowings and interest rate swaps
such that the sensitivity to potential changes in variable rates is within acceptable levels. Group policy does not allow the use of derivatives
to speculate against changes to future interest rates and they are only used to manage exposure to volatility. Interest-rate hedging using
derivatives has not taken place in the current or previous year. This policy has not changed during the year.
To measure the risk, variable rate borrowings and the expected interest cost for the year are forecast monthly and compared to budget using
management’s expectations of a possible change in interest rates. Interest expense volatility remained within acceptable limits throughout
the year.
Interest rate sensitivity
The effect on both income and equity, based on exposure to non-derivative floating rate instruments and cash and cash equivalents at the
balance sheet date, is shown in the table below. The Group does not currently have any outstanding interest rate derivatives. The 0.25%
change represents a reasonably possible change in interest rates over the next financial period. The table assumes all other variables remain
constant in accordance with IFRS 7.
£ million
Income
sensitivity
2021
Equity
sensitivity
2021
Income
sensitivity
2020
Equity
sensitivity
2020
0.25% increase in interest rates 2.3 2.3 2.0 2.0
£ million
Income
sensitivity
2021
Equity
sensitivity
2021
Income
sensitivity
2020
Equity
sensitivity
2020
0.25% decrease in interest rates (2.3) (2.3) (2.0) (2.0)
(b) Foreign currency risk management
The Group’s overseas activities expose it to the financial risks of changes in foreign currency exchange rates. Its Spanish subsidiary is the only
foreign operation of the Group.
The Group is not materially exposed to transaction risks as all Group companies conduct their business in their respective functional
currencies. Group policy requires that transaction risks are hedged to the functional currency of the subsidiary using foreign currency
borrowings or derivatives where appropriate.
The Group is exposed to the translation risk from accounting for both the income and the net investment held in a functional currency other
than Sterling. The net investment risk may be hedged using foreign currency borrowings and derivatives. Assets and liabilities denominated
in non-functional currencies are retranslated each month using the latest exchange rates. Income is also measured monthly using the latest
exchange rates and compared with a budget held at historical exchange rates. Other than the natural hedge provided by foreign currency
borrowings, the translation risk of income is not hedged using derivatives. The policy is kept under periodic review and has not changed
during the year.
Hedge accounting
Hedging activities are evaluated periodically to ensure that they are in line with Group policy.
The Group has designated the carrying value of €79.0 million of foreign currency borrowings (2020: €79.0 million borrowings) held at the
balance sheet date as a net investment hedge of part of the Group’s investment in Euro denominated assets, equating to £66.4 million
(2020: £71.2 million).
The change in the carrying value of £4.8 million (2020: £4.2 million) of the borrowings designated as a net investment hedge offset the
exchange movement on the foreign currency net investments and are presented in the statement of other comprehensive income.
Foreign currency sensitivity
The Group is exposed to the Euro due to its Spanish operations. The following table details how the Group’s income and equity would
increase/(decrease) on a before tax basis following a 10% (2020: 10%) change in the currency’s value against Sterling, all other variables
remaining constant. The 10% change represents a reasonably possible change in the specified Euro exchange rates in relation to Sterling.
158 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
158
Taylor Wimpey plc Annual Report 2021
20. Financial instruments and fair value disclosures ccoonnttiinnuueedd
Forward contracts have been entered into to offset the foreign exchange movements on intra-Group loans to buy/(sell) against Sterling:
€9.5 million (2020: €21.0 million), equivalent to £8.0 million (2020: £18.9 million). The fair value of the forward contracts is not material as they
were entered into on or near 31 December in each year and mature less than one month later, hence the value of the derivative is negligible.
Market risk
The Group’s activities expose it to the financial risks of changes in both foreign currency exchange rates and interest rates. The Group aims to
manage the exposure to these risks using fixed or variable rate borrowings, foreign currency borrowings and derivative financial instruments.
(a) Interest rate risk management
The Group can be exposed to interest rate risk as the Group borrows funds, when required, at variable interest rates. The exposure to variable
rate borrowings can fluctuate during the year due to the seasonal nature of cash flows relating to housing sales and the less certain timing of
land payments. Group policy is to manage the volatility risk of interest rates by a combination of fixed rate borrowings and interest rate swaps
such that the sensitivity to potential changes in variable rates is within acceptable levels. Group policy does not allow the use of derivatives
to speculate against changes to future interest rates and they are only used to manage exposure to volatility. Interest-rate hedging using
derivatives has not taken place in the current or previous year. This policy has not changed during the year.
To measure the risk, variable rate borrowings and the expected interest cost for the year are forecast monthly and compared to budget using
management’s expectations of a possible change in interest rates. Interest expense volatility remained within acceptable limits throughout
the year.
Interest rate sensitivity
The effect on both income and equity, based on exposure to non-derivative floating rate instruments and cash and cash equivalents at the
balance sheet date, is shown in the table below. The Group does not currently have any outstanding interest rate derivatives. The 0.25%
change represents a reasonably possible change in interest rates over the next financial period. The table assumes all other variables remain
constant in accordance with IFRS 7.
£ million
Income
sensitivity
2021
Equity
sensitivity
2021
Income
sensitivity
2020
Equity
sensitivity
2020
0.25% increase in interest rates 2.3 2.3 2.0 2.0
£ million
Income
sensitivity
2021
Equity
sensitivity
2021
Income
sensitivity
2020
Equity
sensitivity
2020
0.25% decrease in interest rates (2.3) (2.3) (2.0) (2.0)
(b) Foreign currency risk management
The Group’s overseas activities expose it to the financial risks of changes in foreign currency exchange rates. Its Spanish subsidiary is the only
foreign operation of the Group.
The Group is not materially exposed to transaction risks as all Group companies conduct their business in their respective functional
currencies. Group policy requires that transaction risks are hedged to the functional currency of the subsidiary using foreign currency
borrowings or derivatives where appropriate.
The Group is exposed to the translation risk from accounting for both the income and the net investment held in a functional currency other
than Sterling. The net investment risk may be hedged using foreign currency borrowings and derivatives. Assets and liabilities denominated
in non-functional currencies are retranslated each month using the latest exchange rates. Income is also measured monthly using the latest
exchange rates and compared with a budget held at historical exchange rates. Other than the natural hedge provided by foreign currency
borrowings, the translation risk of income is not hedged using derivatives. The policy is kept under periodic review and has not changed
during the year.
Hedge accounting
Hedging activities are evaluated periodically to ensure that they are in line with Group policy.
The Group has designated the carrying value of €79.0 million of foreign currency borrowings (2020: €79.0 million borrowings) held at the
balance sheet date as a net investment hedge of part of the Group’s investment in Euro denominated assets, equating to £66.4 million
(2020: £71.2 million).
The change in the carrying value of £4.8 million (2020: £4.2 million) of the borrowings designated as a net investment hedge offset the
exchange movement on the foreign currency net investments and are presented in the statement of other comprehensive income.
Foreign currency sensitivity
The Group is exposed to the Euro due to its Spanish operations. The following table details how the Group’s income and equity would
increase/(decrease) on a before tax basis following a 10% (2020: 10%) change in the currency’s value against Sterling, all other variables
remaining constant. The 10% change represents a reasonably possible change in the specified Euro exchange rates in relation to Sterling.
Taylor Wimpey plc Annual Report 2021 159
20. Financial instruments and fair value disclosures c
c
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d
£ million
Income
sensitivity
2021
Equity
sensitivity
2021
Income
sensitivity
2020
Equity
sensitivity
2020
Euro weakens against Sterling (0.9) 5.1 (0.9) 5.5
Euro strengthens against Sterling 1.1 (6.2) 1.1 (6.8)
Credit risk
Credit risk is the risk of financial loss where counterparties are not able to meet their obligations.
Group policy is that surplus cash, when not used to repay borrowings, is placed on deposit with the Group’s main relationship banks and with
other banks or money market funds based on a minimum credit rating and maximum exposure. There is no significant concentration of risk to
any single counterparty.
Land receivables arise from sales of surplus land on deferred terms. If the credit risk is not acceptable, then the deferred payment must have
adequate security, either by an appropriate guarantee or a charge over the land. The fair value of any land held as security is considered by
management to be sufficient in relation to the carrying amount of the receivable to which it relates.
Trade and other receivables comprise mainly amounts receivable from various housing associations, other housebuilders and amounts in
relation to Help to Buy. Management consider that the credit quality of the various receivables is good in respect of the amounts outstanding
and therefore credit risk is considered to be low. There is no significant concentration of risk.
Mortgage receivables, including shared equity loans, are in connection with various historical sales promotion schemes and are measured at
fair value through profit or loss. The mortgages are secured by a second charge over the property with a low level of experienced credit losses
due to non-payment.
The carrying amount of financial assets, as detailed above, represents the Group’s maximum exposure to credit risk at the reporting date
assuming that any security held has no value.
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group
manages liquidity risk by continuously monitoring forecast and actual cash flows, matching the expected cash flow timings of financial assets
and liabilities with the use of cash and cash equivalents, borrowings, overdrafts and committed revolving credit facilities with a minimum of
12 months to maturity. Future borrowing requirements are forecast on a monthly basis and funding headroom is maintained above forecast
peak requirements to meet unforeseen events. At 31 December 2021, the Group’s borrowings and facilities had a range of maturities with
an average life of 2.9 years (2020: 3.8 years).
In addition to €100.0 million fixed term borrowings maturing June 2023, the Group has access to a committed revolving credit facility, expiring
February 2025, and cash balances. The borrowings and facilities contain financial covenants based on minimum tangible net worth, maximum
gearing and minimum interest cover. At the balance sheet date, the total unused committed amount was £550.0 million (2020: £550.0 million)
and cash and cash equivalents were £921.0 million (2020: £823.0 million).
The maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date
on which the Group can be required to pay financial liabilities on an undiscounted basis, is as follows:
£ million
Bank and
other loans
Land
creditors
Trade and
other payables
Lease
liabilities
Total
On demand – – – – –
Within one year 1.7 320.8 471.0 7.4 800.9
More than one year and less than two years 84.9 312.2 48.4 6.3 451.8
More than two years and less than five years – 181.5 15.8 12.1 209.4
More than five years – 23.3 8.1 2.6 34.0
31 December 2021 86.6 837.8 543.3 28.4 1,496.1
£ million
Bank and
other loans
Land
creditors
Trade and
other payables
Lease
liabilities Total
On demand –– –––
Within one year 15.5 355.3 456.9 6.8 834.5
More than one year and less than two years 1.8 169.2 50.1 6.1 227.2
More than two years and less than five years 91.0 151.5 25.2 11.7 279.4
More than five years – 26.8 7.1 4.7 38.6
31 December 2020 108.3 702.8 539.3 29.3 1,379.7
159Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
160
Taylor Wimpey plc Annual Report 2021
21. Retirement benefit obligations
Total retirement benefit obligations of £37.3 million (2020: £89.5 million) comprise a defined benefit pension liability of £37.0 million
(2020: £89.1 million) and a post-retirement healthcare liability of £0.3 million (2020: £0.4 million).
The Group operates the Taylor Wimpey Pension Scheme (TWPS), a defined benefit pension scheme, which is closed to both new members
and to future accrual. The Group also operates defined contribution pension arrangements in the UK, which are available to new and existing
UK employees.
Defined contribution pension plan
A defined contribution plan is an arrangement under which the Group pays contributions to an independently administered fund or policy;
such contributions are based on a fixed percentage of employees’ pay. The Group has no legal or constructive obligations to pay further
contributions to the fund/policy once the contributions have been paid. Employees’ benefits are determined by the amount of contributions
paid by the Group and the employee, together with investment returns earned on the contributions arising from the performance of each
individual’s chosen investments and the type of pension the employee chooses to buy at retirement. As a result, actuarial risk (that benefits
will be lower than expected) and investment risk (that invested assets will not perform in line with expectations) fall on the employee.
The Group’s contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in the future payments is available.
The Group’s defined contribution plan, the Taylor Wimpey Personal Choice Plan (TWPCP), is offered to all new and existing monthly paid
employees and is provided by Scottish Widows. The People’s Pension is used for auto enrolment purposes for all weekly paid employees
and those monthly paid employees not participating in the TWPCP. The People’s Pension is provided by B&CE, one of the UK’s largest
providers of financial benefits to construction industry employers and individuals.
The Group made contributions to its defined contribution arrangements of £14.1 million in the year (2020: £15.2 million), which is included in
the income statement charge.
Defined benefit pension schemes
The Group’s defined benefit pension scheme in the UK is the TWPS. The TWPS is a funded defined benefit pension scheme which provides
benefits to beneficiaries in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on an individual
member’s length of service and their salary in the final years leading up to retirement or date of ceasing active accrual if earlier. Pension
payments are generally increased in line with inflation. The TWPS is closed to new members and future accrual.
The Group operates the TWPS under the UK regulatory framework. Benefits are paid to members from a Trustee-administered fund and the
Trustee is responsible for ensuring that the TWPS is well-managed and that members’ benefits are secure. Scheme assets are held in trust.
The TWPS Trustee’s other duties include managing the investment of scheme assets, administration of scheme benefits and exercising of
discretionary powers. The Group works closely with the Trustee to manage the TWPS. The Trustee of the TWPS owes fiduciary duties to
the TWPS’ beneficiaries. The appointment of the Directors to the Trustee Board is determined by the TWPS trust documentation.
Following the 31 December 2016 triennial valuation, the Group agreed a recovery plan with the TWPS Trustee to pay deficit reduction
contributions of £40.0 million per annum for the period from April 2018 to December 2020, whilst the TWPS was in a Technical Provisions
deficit. During April 2020 and in response to the site shutdowns, it was agreed with the TWPS Trustee that there would be a temporary
suspension of the agreed deficit reduction contributions for the three months between April and June 2020. Those suspended contributions
were instead paid between January 2021 and March 2021 in the amount of £10.3 million.
During 2020, the Group engaged with the TWPS Trustee on the triennial valuation of the TWPS with a reference date of 31 December 2019.
The table below sets out the key assumptions agreed as part of this valuation.
Assumptions
Discount rate (pre-retirement) 2.35% per annum above the yield on the nominal gilt yield curve. Illustrative rate of 3.51% using the
15-year spot rate from the curve
Discount rate (post-retirement) 0.50% per annum above the yield on the nominal gilt yield curve. Illustrative rate of 1.66% using the
15-year spot rate from the curve
RPI inflation Implied inflation gilt yield curve. Illustrative rate of 3.40% using the 15-year spot rate from the curve
CPI inflation RPI less 0.8%. Illustrative rate of 2.60% using the 15-year spot rate from the curve
Mortality 104% of S3PxA tables, CMI_2019 improvements with 1.50% long-term trend rate, a smoothing factor
of 7 and an initial addition parameter of 0.5%
The result of this valuation was a Technical Provisions deficit at 31 December 2019 of £36.0 million. In March 2021, a new funding
arrangement was agreed with the TWPS Trustee that commits the Group to paying up to £20.0 million per annum into an escrow account
between April 2021 and March 2024. The first six months of contributions (£10.0 million) between 1 April 2021 and 30 September 2021 were
guaranteed. From 1 October 2021, payments into the escrow account are subject to a quarterly funding test with the first funding test having
an effective date of 30 September 2021. Contributions to the escrow are suspended should the TWPS Technical Provisions funding level at
any quarter-end be 100% or more and would restart only if the funding level subsequently falls below 98%. The Group continues to contribute
£5.1 million per annum from the Pension Funding Partnership and £2.0 million per annum to cover scheme expenses.
160 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
160
Taylor Wimpey plc Annual Report 2021
21. Retirement benefit obligations
Total retirement benefit obligations of £37.3 million (2020: £89.5 million) comprise a defined benefit pension liability of £37.0 million
(2020: £89.1 million) and a post-retirement healthcare liability of £0.3 million (2020: £0.4 million).
The Group operates the Taylor Wimpey Pension Scheme (TWPS), a defined benefit pension scheme, which is closed to both new members
and to future accrual. The Group also operates defined contribution pension arrangements in the UK, which are available to new and existing
UK employees.
Defined contribution pension plan
A defined contribution plan is an arrangement under which the Group pays contributions to an independently administered fund or policy;
such contributions are based on a fixed percentage of employees’ pay. The Group has no legal or constructive obligations to pay further
contributions to the fund/policy once the contributions have been paid. Employees’ benefits are determined by the amount of contributions
paid by the Group and the employee, together with investment returns earned on the contributions arising from the performance of each
individual’s chosen investments and the type of pension the employee chooses to buy at retirement. As a result, actuarial risk (that benefits
will be lower than expected) and investment risk (that invested assets will not perform in line with expectations) fall on the employee.
The Group’s contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in the future payments is available.
The Group’s defined contribution plan, the Taylor Wimpey Personal Choice Plan (TWPCP), is offered to all new and existing monthly paid
employees and is provided by Scottish Widows. The People’s Pension is used for auto enrolment purposes for all weekly paid employees
and those monthly paid employees not participating in the TWPCP. The People’s Pension is provided by B&CE, one of the UK’s largest
providers of financial benefits to construction industry employers and individuals.
The Group made contributions to its defined contribution arrangements of £14.1 million in the year (2020: £15.2 million), which is included in
the income statement charge.
Defined benefit pension schemes
The Group’s defined benefit pension scheme in the UK is the TWPS. The TWPS is a funded defined benefit pension scheme which provides
benefits to beneficiaries in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on an individual
member’s length of service and their salary in the final years leading up to retirement or date of ceasing active accrual if earlier. Pension
payments are generally increased in line with inflation. The TWPS is closed to new members and future accrual.
The Group operates the TWPS under the UK regulatory framework. Benefits are paid to members from a Trustee-administered fund and the
Trustee is responsible for ensuring that the TWPS is well-managed and that members’ benefits are secure. Scheme assets are held in trust.
The TWPS Trustee’s other duties include managing the investment of scheme assets, administration of scheme benefits and exercising of
discretionary powers. The Group works closely with the Trustee to manage the TWPS. The Trustee of the TWPS owes fiduciary duties to
the TWPS’ beneficiaries. The appointment of the Directors to the Trustee Board is determined by the TWPS trust documentation.
Following the 31 December 2016 triennial valuation, the Group agreed a recovery plan with the TWPS Trustee to pay deficit reduction
contributions of £40.0 million per annum for the period from April 2018 to December 2020, whilst the TWPS was in a Technical Provisions
deficit. During April 2020 and in response to the site shutdowns, it was agreed with the TWPS Trustee that there would be a temporary
suspension of the agreed deficit reduction contributions for the three months between April and June 2020. Those suspended contributions
were instead paid between January 2021 and March 2021 in the amount of £10.3 million.
During 2020, the Group engaged with the TWPS Trustee on the triennial valuation of the TWPS with a reference date of 31 December 2019.
The table below sets out the key assumptions agreed as part of this valuation.
Assumptions
Discount rate (pre-retirement) 2.35% per annum above the yield on the nominal gilt yield curve. Illustrative rate of 3.51% using the
15-year spot rate from the curve
Discount rate (post-retirement) 0.50% per annum above the yield on the nominal gilt yield curve. Illustrative rate of 1.66% using the
15-year spot rate from the curve
RPI inflation Implied inflation gilt yield curve. Illustrative rate of 3.40% using the 15-year spot rate from the curve
CPI inflation RPI less 0.8%. Illustrative rate of 2.60% using the 15-year spot rate from the curve
Mortality 104% of S3PxA tables, CMI_2019 improvements with 1.50% long-term trend rate, a smoothing factor
of 7 and an initial addition parameter of 0.5%
The result of this valuation was a Technical Provisions deficit at 31 December 2019 of £36.0 million. In March 2021, a new funding
arrangement was agreed with the TWPS Trustee that commits the Group to paying up to £20.0 million per annum into an escrow account
between April 2021 and March 2024. The first six months of contributions (£10.0 million) between 1 April 2021 and 30 September 2021 were
guaranteed. From 1 October 2021, payments into the escrow account are subject to a quarterly funding test with the first funding test having
an effective date of 30 September 2021. Contributions to the escrow are suspended should the TWPS Technical Provisions funding level at
any quarter-end be 100% or more and would restart only if the funding level subsequently falls below 98%. The Group continues to contribute
£5.1 million per annum from the Pension Funding Partnership and £2.0 million per annum to cover scheme expenses.
Taylor Wimpey plc Annual Report 2021 161
21. Retirement benefit obligations c
c
o
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t
t
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d
d
The escrow account, over which the TWPS Trustee holds a fixed charge, is recognised in other financial assets and at 31 December 2021
was £10.0 million (31 December 2020: nil). Transfers out of the escrow account (either to the TWPS or the Group) are subject to the 2019
triennial funding arrangement entered into between the Group and the Trustee and as such the funds are restricted from use by the Group
for other purposes and are therefore not classified as cash or cash equivalents. Interest earned by the escrow account is retained within the
escrow account.
On an IAS 19 accounting basis the underlying surplus in the TWPS at 31 December 2021 was £149.9 million (2020: deficit of £89.1 million).
The terms of the TWPS are such that the Group does not have an unconditional right to a refund of surplus. As a result, in 2021, the Group
recognised an adjustment to the underlying surplus in the TWPS on an IAS 19 accounting basis of £186.9 million, resulting in an IFRIC 14
deficit of £37.0 million, which represented the present value of future contributions under the funding plan. No such adjustment was
recognised as of 31 December 2020 since the TWPS deficit on an IAS 19 accounting basis exceeded the IFRIC 14 deficit.
In 2013, the Group introduced a £100.0 million Pension Funding Partnership that utilises the Group’s show homes, as well as six offices, in
a sale and leaseback structure. This provides an additional £5.1 million of annual funding for the TWPS. The assets held within the Pension
Funding Partnership do not affect the IAS 19 figures (before IFRIC 14) as they remain assets of the Group, and are not assets of the TWPS.
At 31 December 2021 there was £81.8 million of property and £31.0 million of cash held within the structure (2020: £90.3 million of property
and £21.9 million of cash). The terms of the Funding Partnership are such that, should the TWPS be in a Technical Provisions deficit at
31 December 2028, then a bullet payment will be due to the TWPS equal to the lower of £100.0 million or the Technical Provisions deficit
at that time.
The Group continues to work closely with the Trustee in managing pension risks, including management of interest rate, inflation and longevity
risks. The TWPS assets are approximately 96% hedged against changes in both interest rates and inflation expectations on the scheme’s
long term funding basis that is currently used for investment strategy purposes. The TWPS also benefits from a bulk annuity contract which
covers some of the largest liabilities in the scheme, providing protection against interest rate, inflation and longevity risk.
The duration, or average term to payment for the benefits due, weighted by liability, is approximately 16 years.
Accounting assumptions
The assumptions used in calculating the accounting costs and obligations of the TWPS, as detailed below, are set by the Directors after
consultation with independent actuaries. The basis for these assumptions is prescribed by IAS 19 and they do not reflect the assumptions
that may be used in future funding valuations of the TWPS.
The discount rate used to determine the present value of the obligations is set by reference to market yields on high-quality corporate
bonds with regard for the duration to the TWPS liabilities. The assumption for RPI inflation is set by reference to the Bank of England’s implied
inflation curve with regard to the duration of the TWPS liabilities, with appropriate adjustments to reflect distortions due to supply and demand
for inflation-linked securities. CPI inflation is set by reference to RPI inflation as no CPI-linked bonds exist to render implied CPI inflation directly
observable.
The life expectancies have been derived using mortality assumptions that were based on the results of a Medically Underwritten Mortality
Study conducted by the Group during 2017, combined with experience data. Using the results from this study, the mortality assumption is
based on 106% of S3PxA tables, CMI_2020 improvements with a 1.25% long-term trend rate, a smoothing factor of 7, an initial addition
parameter of 0.25% and a w2020 parameter of 15%. The mortality assumption used in 2020 was 106% of S3PxA tables, CMI_2019
improvements with a 1.25% long-term trend rate, a smoothing factor of 7 and an initial addition parameter of 0.25%.
A
ccounting valuation assumptions 2021 2020
A
t 31 December:
Discount rate for scheme liabilities 1.85% 1.30%
General pay inflation n/a n/a
Deferred pension increases 2.50% 2.15%
Pension increases* 2.15%-3.70% 2.05%-3.60%
* Pension increases depend on the section of the TWPS of which each member is a part.
The current life expectancies (in years) underlying the value of the accrued liabilities for the TWPS are:
2021 2020
Life expectancy Male Female Male Female
Member currently aged 65 86 89 87 89
Member currently aged 45 88 90 88 90
161Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
162
Taylor Wimpey plc Annual Report 2021
21. Retirement benefit obligations c
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The table below shows the impact to the present value of scheme liabilities of movements in key assumptions, measured using the same
method as the defined benefit scheme.
A
ssumption Change in assumption Impact on scheme liabilities Impact on scheme liabilities (%)
Discount rate Decrease by 0.1% p.a. Increase by £35m 1.4
Rate of inflation* Increase by 0.1% p.a. Increase by £20m 0.8
Life expectancy Members live 1 year longer Increase by £93m 3.7
* Assumed to affect deferred revaluation and pensioner increases in payment.
The sensitivity of increasing life expectancy has been reduced by the medically underwritten buy-in. See the section on risks and risk
management at the end of this note.
31 December 2021
Fair value of scheme assets of the TWPS
Level 1
£ million
Level 2
£ million
Level 3
£ million
Total
£ million
Percentage of
total scheme
assets
Equity
(a)
– 43.4 – 43.4 1.7%
Diversified growth funds
(b)
– 357.8 – 357.8 14.6%
Hedge funds
(c)
– – 189.8 189.8 7.8%
Property 2.7 – 6.7 9.4 0.4%
Multi-asset credit 0.4 274.0 – 274.4 11.2%
Direct lending 1.3 – 144.8 146.1 6.0%
Fixed income 2.4 102.4 – 104.8 4.3%
Liability driven investment
(d)
(252.5) 1,376.6 – 1,124.1 46.0%
Insurance policies in respect of certain members – – 191.0 191.0 7.8%
Cash 4.5 – – 4.5 0.2%
(241.2) 2,154.2 532.3 2,445.3 100.0%
31 December 2020
Fair value of scheme assets of the TWPS
Level 1
£ million
Level 2
£ million
Level 3
£ million
Total
£ million
Percentage of
total scheme
assets
Equity
(a)
– 118.3 – 118.3 4.9%
Diversified growth funds
(b)
– 357.7 – 357.7 14.9%
Hedge funds
(c)
– – 175.5 175.5 7.3%
Property 0.3 – 18.7 19.0 0.8%
Multi-asset credit – 261.5 – 261.5 10.9%
Direct lending 1.3 – 165.7 167.0 6.9%
Fixed income 5.0 110.4 – 115.4 4.8%
Liability driven investment
(d)
(42.9) 994.2 – 951.3 39.6%
Insurance policies in respect of certain members – – 211.1 211.1 8.8%
Cash 27.5 – – 27.5 1.1%
(8.8) 1,842.1 571.0 2,404.3 100.0%
a. This amount relates to Volatility Controlled Equities (VCE). This fund has 2.5 – 8x leverage exposure, with a target of 4x. The leverage at 31 December 2021 was 2.6x
(31 December 2020: 3.4x).
b. This amount relates to the Scheme’s Diversified Risk Premia (DRP) allocation. The leverage on the two funds in the DRP allocation at 31 December 2021 was 1.0x and
-0.2x respectively (31 December 2020: 1.9x and 1.7x).
c. The leverage on this fund at 31 December 2021 was 0.8x (31 December 2020: 0.9x).
d. The bespoke Liability Driven Investment (LDI) fund is designed to protect the Scheme against movements in interest rates and inflation. The overall leverage on the LDI
fund at 31 December 2021 was approximately 3.1x (31 December 2020: 3.7x).
The value of the annuities held by the TWPS are set equal to the value of the liabilities which these annuities match. All other fair values are
provided by the fund managers and collated by Northern Trust as custodian, who independently price the securities from their preferred
vendor sources where the data is publicly available and rely on investment manager data where this information is not available. Where
available, the fair values are quoted prices (e.g. listed equity). Unlisted investments (e.g. private equity) are included at values provided by
the fund manager in accordance with relevant guidance. Other significant assets are valued based on observable inputs.
There are no investments in respect of the Group’s own securities.
162 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
162
Taylor Wimpey plc Annual Report 2021
21. Retirement benefit obligations ccoonnttiinnuueedd
The table below shows the impact to the present value of scheme liabilities of movements in key assumptions, measured using the same
method as the defined benefit scheme.
A
ssumption Change in assumption Impact on scheme liabilities Impact on scheme liabilities (%)
Discount rate Decrease by 0.1% p.a. Increase by £35m 1.4
Rate of inflation* Increase by 0.1% p.a. Increase by £20m 0.8
Life expectancy Members live 1 year longer Increase by £93m 3.7
* Assumed to affect deferred revaluation and pensioner increases in payment.
The sensitivity of increasing life expectancy has been reduced by the medically underwritten buy-in. See the section on risks and risk
management at the end of this note.
31 December 2021
Fair value of scheme assets of the TWPS
Level 1
£ million
Level 2
£ million
Level 3
£ million
Total
£ million
Percentage of
total scheme
assets
Equity
(a)
– 43.4 – 43.4 1.7%
Diversified growth funds
(b)
– 357.8 – 357.8 14.6%
Hedge funds
(c)
– – 189.8 189.8 7.8%
Property 2.7 – 6.7 9.4 0.4%
Multi-asset credit 0.4 274.0 – 274.4 11.2%
Direct lending 1.3 – 144.8 146.1 6.0%
Fixed income 2.4 102.4 – 104.8 4.3%
Liability driven investment
(d)
(252.5) 1,376.6 – 1,124.1 46.0%
Insurance policies in respect of certain members – – 191.0 191.0 7.8%
Cash 4.5 – – 4.5 0.2%
(241.2) 2,154.2 532.3 2,445.3 100.0%
31 December 2020
Fair value of scheme assets of the TWPS
Level 1
£ million
Level 2
£ million
Level 3
£ million
Total
£ million
Percentage of
total scheme
assets
Equity
(a)
– 118.3 – 118.3 4.9%
Diversified growth funds
(b)
– 357.7 – 357.7 14.9%
Hedge funds
(c)
– – 175.5 175.5 7.3%
Property 0.3 – 18.7 19.0 0.8%
Multi-asset credit – 261.5 – 261.5 10.9%
Direct lending 1.3 – 165.7 167.0 6.9%
Fixed income 5.0 110.4 – 115.4 4.8%
Liability driven investment
(d)
(42.9) 994.2 – 951.3 39.6%
Insurance policies in respect of certain members – – 211.1 211.1 8.8%
Cash 27.5 – – 27.5 1.1%
(8.8) 1,842.1 571.0 2,404.3 100.0%
a. This amount relates to Volatility Controlled Equities (VCE). This fund has 2.5 – 8x leverage exposure, with a target of 4x. The leverage at 31 December 2021 was 2.6x
(31 December 2020: 3.4x).
b. This amount relates to the Scheme’s Diversified Risk Premia (DRP) allocation. The leverage on the two funds in the DRP allocation at 31 December 2021 was 1.0x and
-0.2x respectively (31 December 2020: 1.9x and 1.7x).
c. The leverage on this fund at 31 December 2021 was 0.8x (31 December 2020: 0.9x).
d. The bespoke Liability Driven Investment (LDI) fund is designed to protect the Scheme against movements in interest rates and inflation. The overall leverage on the LDI
fund at 31 December 2021 was approximately 3.1x (31 December 2020: 3.7x).
The value of the annuities held by the TWPS are set equal to the value of the liabilities which these annuities match. All other fair values are
provided by the fund managers and collated by Northern Trust as custodian, who independently price the securities from their preferred
vendor sources where the data is publicly available and rely on investment manager data where this information is not available. Where
available, the fair values are quoted prices (e.g. listed equity). Unlisted investments (e.g. private equity) are included at values provided by
the fund manager in accordance with relevant guidance. Other significant assets are valued based on observable inputs.
There are no investments in respect of the Group’s own securities.
Taylor Wimpey plc Annual Report 2021 163
21. Retirement benefit obligations c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
The table below details the movements in the TWPS pension liability and assets recorded through the income statement and other
comprehensive income.
2021 2020
£ million
Present value
of obligation
Fair value of
scheme
assets
Asset/(liability)
recognised on
balance sheet
Present value
of obligation
Fair value of
scheme
assets
Asset/(liability)
recognised on
balance sheet
A
t 1 Januar
y
(2,493.4) 2,404.3 (89.1) (2,366.7) 2,282.2 (84.5)
Past service cost related to GMP equalisation – – – (1.2) – (1.2)
A
dministration expenses – (2.2) (2.2) – (2.5) (2.5)
Interest (expense)/income (31.7) 30.7 (1.0) (48.5) 47.1 (1.4)
Total amount recognised in income statement (31.7) 28.5 (3.2) (49.7) 44.6 (5.1)
Remeasurement gain on scheme assets – 102.9 102.9 – 159.1 159.1
Change in demographic assumptions 29.3 – 29.3 (100.8) – (100.8)
Change in financial assumptions 131.6 – 131.6 (286.3) – (286.3)
Experience (loss)/gain (39.0) – (39.0) 2.5 – 2.5
A
djustment to liabilities for IFRIC 14 (186.9) – (186.9) 188.9 – 188.9
Total remeasurements in other comprehensive income (65.0) 102.9 37.9 (195.7) 159.1 (36.6)
Employer contributions – 17.4 17.4 – 37.1 37.1
Employee contributions – – – –––
Benefit payments 107.8 (107.8) – 118.7 (118.7) –
A
t 31 December (2,482.3) 2,445.3 (37.0) (2,493.4) 2,404.3 (89.1)
A
ccounting valuation
£ million 2021 2020
Fair value of scheme assets 2,445.3 2,404.3
Present value of scheme obligations (2,295.4) (2,493.4)
Surplus/(deficit) in scheme 149.9 (89.1)
IFRIC 14 limitation on recognition of surplus (186.9) –
Deficit after IFRIC 14 adjustment (37.0) (89.1)
163Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
164
Taylor Wimpey plc Annual Report 2021
21. Retirement benefit obligations c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
Risks and risk management
The TWPS, in common with the majority of such defined benefit pension schemes in the UK, has a number of areas of risk. These areas of
risk, and the ways in which the Group has sought to manage them, are set out in the table below.
The risks are considered from both a funding perspective, which drives the cash commitments of the Group, and from an accounting
perspective, i.e. the extent to which such risks affect the amounts recorded in the Group’s financial statements.
Although investment decisions in the UK are the responsibility of the TWPS Trustee, the Group takes an active interest to ensure that the
pension scheme risks are managed efficiently. The Group has regular meetings with the Trustee to discuss investment performance,
regulatory changes and proposals to actively manage the position of the TWPS.
Risk Description
A
sset
volatility
T
he TWPS strategy remains well diversified through its exposure to a range of asset classes, including volatilit
y
-controlled
equities, commercial real estate debt, direct loans, fund of hedge funds, Government bonds and a broad spectrum of
corporate bonds and other fixed income exposures. The TWPS invests across a number of managers to reduce manager
concentration risk.
In March 2018, the Trustee put in place a de-risking framework to ensure that any asset outperformance above
expectations of the TWPS objectives was captured. In Q2 2021, due to the improved funding position of the TWPS, the
T
WPS Trustee de-risked by disinvesting from the Schroders Equity Sentinel fund (c.£103 million), the Bridgewater Optimal
fund (c.£29 million) and the AQR Diversified Risk Premia fund (c.£16 million). The proceeds from these disinvestments,
c.£148 million, were allocated to the Scheme’s Liability Driven Investment (LDI) portfolio. In Q3 2021, c.£50 million of excess
collateral in the LDI portfolio was allocated to the Insight High Grade ABS fund to provide additional return whilst retaining
liquidity within the portfolio.
T
he TWPS does not target a specific asset allocation but instead bases its strategic asset allocation on the return objectives
and risk constraints agreed upon by the Trustee. These were revisited and reviewed in 2021 to ensure they reflected the
T
WPS latest position. Given the TWPS’ funding position, the Trustee reaffirmed the target date of 2025 to reach full funding
on the long-term funding objective basis. The TWPS risk budget was also reduced from a funding-ratio-at-risk measure of
7.5% to 6.0%.
T
here were no significant changes to the TWPS’ asset allocation over 2021, which remains well diversified, with risk
continuing to be below the agreed risk budget.
Changes in
bond yields
Falling bond yields tend to increase the funding and accounting liabilities. However, the investment in bond and liabilit
y
-
matching derivatives offers a degree of matching, i.e. the movement in assets arising from changes in bond yields partially
matches the movement in the funding or accounting liabilities. In this way, the exposure to movements in bond yields
is reduced.
Investing
in foreign
currency
T
o maintain appropriate diversification of investments within the TWPS assets and to take advantage of overseas investment
returns, a proportion of the underlying investment portfolio is invested overseas. To balance the risk of investing in foreign
currencies while having an obligation to settle benefits in Sterling, a currency hedging programme, using forward foreign
exchange contracts, has been put in place to reduce the currency exposure of these overseas investments to the
targeted level.
A
sset/liability
mismatch
In order to manage the TWPS’ economic exposure to interest rates and inflation rates, a liability-hedging programme has
been put in place. Derivatives are being used to hedge changes in the TWPS’ funding level from changes in its liabilities in
an unfunded way, substantially reducing asset/liability mismatch risk.
Liquidity
Insurance policies, real estate and illiquid debt (which include commercial real estate debt and direct lending bonds)
make up £347 million (14%) of the asset portfolio of the TWPS. Excluding these amounts, approximately 59% of assets are
managed in either segregated accounts or daily/weekly dealt pooled funds and can be realised within a few business days
under normal market conditions. Of the remaining investments, a further 11% of assets are invested in pooled funds with
monthly redemption dates. The remaining 16% could be redeemed within approximately six to nine months of notification
in normal market conditions.
Life
expectancy
T
he majority of the TWPS obligations are to provide a pension for the life of the member on retirement, so increases in life
expectancy will result in an increase in the TWPS’ liabilities. The inflation-linked nature of the majority of benefit payments
from the TWPS increases the sensitivity of the liabilities to changes in life expectancy. During 2014, the Group reached
agreement with Partnership Life Assurance Company Limited (now Just Group plc) to insure the benefits of 10% of
members with the greatest anticipated liabilities through a medically underwritten buy-in. By insuring these members, the
Group has removed more than 10% of risk from the TWPS by significantly reducing the longevity risk in relation to a large
proportion of the liabilities.
Climate risk
T
he TWPS Trustee recognises that climate change is a financial risk affecting the TWPS assets. The TWPS Trustee
integrates the monitoring of appropriate climate risk metrics into its risk management framework and considers these
metrics when making investment decisions. The TWPS Trustee requires its appointed investment managers to integrate
climate change risks and opportunities into their investment processes as applied to the assets of the TWPS.
164 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
164
Taylor Wimpey plc Annual Report 2021
21. Retirement benefit obligations ccoonnttiinnuueedd
Risks and risk management
The TWPS, in common with the majority of such defined benefit pension schemes in the UK, has a number of areas of risk. These areas of
risk, and the ways in which the Group has sought to manage them, are set out in the table below.
The risks are considered from both a funding perspective, which drives the cash commitments of the Group, and from an accounting
perspective, i.e. the extent to which such risks affect the amounts recorded in the Group’s financial statements.
Although investment decisions in the UK are the responsibility of the TWPS Trustee, the Group takes an active interest to ensure that the
pension scheme risks are managed efficiently. The Group has regular meetings with the Trustee to discuss investment performance,
regulatory changes and proposals to actively manage the position of the TWPS.
Risk Description
A
sset
volatility
T
he TWPS strategy remains well diversified through its exposure to a range of asset classes, including volatilit
y
-controlled
equities, commercial real estate debt, direct loans, fund of hedge funds, Government bonds and a broad spectrum of
corporate bonds and other fixed income exposures. The TWPS invests across a number of managers to reduce manager
concentration risk.
In March 2018, the Trustee put in place a de-risking framework to ensure that any asset outperformance above
expectations of the TWPS objectives was captured. In Q2 2021, due to the improved funding position of the TWPS, the
T
WPS Trustee de-risked by disinvesting from the Schroders Equity Sentinel fund (c.£103 million), the Bridgewater Optimal
fund (c.£29 million) and the AQR Diversified Risk Premia fund (c.£16 million). The proceeds from these disinvestments,
c.£148 million, were allocated to the Scheme’s Liability Driven Investment (LDI) portfolio. In Q3 2021, c.£50 million of excess
collateral in the LDI portfolio was allocated to the Insight High Grade ABS fund to provide additional return whilst retaining
liquidity within the portfolio.
T
he TWPS does not target a specific asset allocation but instead bases its strategic asset allocation on the return objectives
and risk constraints agreed upon by the Trustee. These were revisited and reviewed in 2021 to ensure they reflected the
T
WPS latest position. Given the TWPS’ funding position, the Trustee reaffirmed the target date of 2025 to reach full funding
on the long-term funding objective basis. The TWPS risk budget was also reduced from a funding-ratio-at-risk measure of
7.5% to 6.0%.
T
here were no significant changes to the TWPS’ asset allocation over 2021, which remains well diversified, with risk
continuing to be below the agreed risk budget.
Changes in
bond yields
Falling bond yields tend to increase the funding and accounting liabilities. However, the investment in bond and liabilit
y
-
matching derivatives offers a degree of matching, i.e. the movement in assets arising from changes in bond yields partially
matches the movement in the funding or accounting liabilities. In this way, the exposure to movements in bond yields
is reduced.
Investing
in foreign
currency
T
o maintain appropriate diversification of investments within the TWPS assets and to take advantage of overseas investment
returns, a proportion of the underlying investment portfolio is invested overseas. To balance the risk of investing in foreign
currencies while having an obligation to settle benefits in Sterling, a currency hedging programme, using forward foreign
exchange contracts, has been put in place to reduce the currency exposure of these overseas investments to the
targeted level.
A
sset/liability
mismatch
In order to manage the TWPS’ economic exposure to interest rates and inflation rates, a liability-hedging programme has
been put in place. Derivatives are being used to hedge changes in the TWPS’ funding level from changes in its liabilities in
an unfunded way, substantially reducing asset/liability mismatch risk.
Liquidity
Insurance policies, real estate and illiquid debt (which include commercial real estate debt and direct lending bonds)
make up £347 million (14%) of the asset portfolio of the TWPS. Excluding these amounts, approximately 59% of assets are
managed in either segregated accounts or daily/weekly dealt pooled funds and can be realised within a few business days
under normal market conditions. Of the remaining investments, a further 11% of assets are invested in pooled funds with
monthly redemption dates. The remaining 16% could be redeemed within approximately six to nine months of notification
in normal market conditions.
Life
expectancy
T
he majority of the TWPS obligations are to provide a pension for the life of the member on retirement, so increases in life
expectancy will result in an increase in the TWPS’ liabilities. The inflation-linked nature of the majority of benefit payments
from the TWPS increases the sensitivity of the liabilities to changes in life expectancy. During 2014, the Group reached
agreement with Partnership Life Assurance Company Limited (now Just Group plc) to insure the benefits of 10% of
members with the greatest anticipated liabilities through a medically underwritten buy-in. By insuring these members, the
Group has removed more than 10% of risk from the TWPS by significantly reducing the longevity risk in relation to a large
proportion of the liabilities.
Climate risk
T
he TWPS Trustee recognises that climate change is a financial risk affecting the TWPS assets. The TWPS Trustee
integrates the monitoring of appropriate climate risk metrics into its risk management framework and considers these
metrics when making investment decisions. The TWPS Trustee requires its appointed investment managers to integrate
climate change risks and opportunities into their investment processes as applied to the assets of the TWPS.
Taylor Wimpey plc Annual Report 2021 165
22. Provisions
£ million
Cladding fire
safety
Leasehold Other Total
A
t 1 January 2020 23.7 72.2 32.5 128.4
A
dditions
10.0 – 22.6 32.6
Utilisation
(5.1) (12.6) (9.0) (26.7)
Released
– – (4.0) (4.0)
Foreign exchange
– – 0.2 0.2
A
t 31 December 2020
28.6 59.6 42.3 130.5
A
dditions 125.0 – 19.8 144.8
Utilisation (9.1) (6.0) (8.0) (23.1)
Released – – (6.8) (6.8)
Foreign exchange – – (0.3) (0.3)
A
t 31 December 2021 144.5 53.6 47.0 245.1
£ million 2021 2020
Current 125.4 70.6
Non-current 119.7 59.9
31 December 245.1 130.5
In 2018 the Group established an exceptional provision for the cost of replacing ACM on a small number of legacy developments, which was
increased by £10.0 million in 2020 to reflect the latest estimate of costs to complete the planned works. Following the guidance issued by
RICS in the period the Group announced an additional £125.0 million provision to fund cladding fire safety improvements (see Note 6). It is
expected that around a quarter of the remaining provision will be utilised over the next 12 months.
In 2017 the Group launched an assistance scheme to help certain customers restructure their ground rent agreements with their freeholder
and established an associated provision of £130.0 million to fund this. Following the agreement of voluntary undertakings with the CMA the
Group expects that the majority of the remaining provision will be utilised within the next 12 months.
Other provisions consist of a remedial work provision covering various obligations on a limited number of sites across the Group. Other
provisions also includes amounts for restructuring costs and legal claims and other contract-related costs associated with various matters
arising across the Group, the majority of which are anticipated to be settled within a three year period; however, there is some uncertainty
regarding the timing of these outflows due to the nature of the claims and the length of time it can take to reach settlement.
23. Share capital
£ million 2021 2020
A
uthorised:
22,200,819,176 (2020: 22,200,819,176) ordinary shares of 1p each 222.0 222.0
1,158,299,201 (2020: 1,158,299,201) deferred ordinary shares of 24p each 278.0 278.0
500.0 500.0
Number of
ordinary shares
Number of deferred
ordinary shares
£ million
Issued and fully paid:
31 December 2020 3,645,416,647 1,065,566,274 292.2
Shares issued in year 3,174,532 – –
31 December 2021 3,648,591,179 1,065,566,274 292.2
In June 2020 the Company issued 360,265,931 ordinary shares of 1p at a price of 145p to raise total net proceeds of £510.1 million after
expenses. 355,000,000 of these shares were placed via a cash box structure (the ‘Placing’) in which the cash box entity issued redeemable
preference shares in consideration for the receipt of the net cash proceeds arising from the placement of those shares. Taylor Wimpey plc
ordinary shares were issued in consideration for the transfer of the redeemable preference shares, that it did not already own, of the cash
box entity. It was therefore determined that the placing of those shares qualified for merger relief under section 612 of the Companies Act
2006 such that the excess of the value of the acquired shares in the cash box entity over the nominal value of the ordinary shares issued by
Taylor Wimpey plc was credited to Other Reserves. The remainder of the shares issued, 5,265,931, were issued via a Retail Offer open to
employees and other retail investors and a Directors’ Subscription. The Placing was performed to allow the Group to pursue additional near
term land acquisition opportunities.
165Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
166
Taylor Wimpey plc Annual Report 2021
23. Share capital c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
The Placing, Retail and Subscription shares placed rank pari passu in all respects with the existing ordinary shares of the Company, including,
without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.
During the year, the Company issued 3.2 million (2020: 2.0 million) ordinary shares to satisfy option exercises.
The Company has two classes of shares:
– Ordinary shares of 1p, each of which carries the right to one vote at general meetings of the Company and such other rights and obligations
as are set out in the Company’s Articles of Association.
– Deferred ordinary shares of 24p, which carry no voting rights and no entitlement to any dividend. The deferred ordinary shares were issued
as part of a capital reorganisation in 2009 and have not subsequently changed.
24. Share premium
£ million 2021 2020
A
t 1 January 773.1 762.9
Shares issued in year 4.4 10.2
A
t 31 Decembe
r
777.5 773.1
25. Other reserves
£ million
Capital
redemption
reserve
Translation
reserve Other
Total other
reserves
Balance at 1 January 2020 31.5 7.2 4.9 43.6
Exchange differences on translation of foreign operations – 5.2 – 5.2
Movement in fair value of hedging instruments – (4.2) – (4.2)
Shares issued in year – – 499.1 499.1
Balance at 31 December 2020 31.5 8.2 504.0 543.7
Exchange differences on translation of foreign operations – (6.9) – (6.9)
Movement in fair value of hedging instruments – 4.8 – 4.8
Balance at 31 December 2021 31.5 6.1 504.0 541.6
Capital redemption reserve
The capital redemption reserve arose on an historic redemption of the Company’s shares and is not distributable.
Translation reserve
The translation reserve consists of exchange differences arising on the translation of overseas operations. It also includes changes in the fair
value of hedging instruments where such instruments are designated and effective as hedges of investment in overseas operations.
Other reserve
£499.1 million of other reserves arose on the cash box placing that occurred in June 2020 and qualified for merger relief under section 612 of
the Companies Act 2006 (see Note 23).
166 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
166
Taylor Wimpey plc Annual Report 2021
23. Share capital ccoonnttiinnuueedd
The Placing, Retail and Subscription shares placed rank pari passu in all respects with the existing ordinary shares of the Company, including,
without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.
During the year, the Company issued 3.2 million (2020: 2.0 million) ordinary shares to satisfy option exercises.
The Company has two classes of shares:
– Ordinary shares of 1p, each of which carries the right to one vote at general meetings of the Company and such other rights and obligations
as are set out in the Company’s Articles of Association.
– Deferred ordinary shares of 24p, which carry no voting rights and no entitlement to any dividend. The deferred ordinary shares were issued
as part of a capital reorganisation in 2009 and have not subsequently changed.
24. Share premium
£ million 2021 2020
A
t 1 January 773.1 762.9
Shares issued in year 4.4 10.2
A
t 31 Decembe
r
777.5 773.1
25. Other reserves
£ million
Capital
redemption
reserve
Translation
reserve Other
Total other
reserves
Balance at 1 January 2020 31.5 7.2 4.9 43.6
Exchange differences on translation of foreign operations – 5.2 – 5.2
Movement in fair value of hedging instruments – (4.2) – (4.2)
Shares issued in year – – 499.1 499.1
Balance at 31 December 2020 31.5 8.2 504.0 543.7
Exchange differences on translation of foreign operations – (6.9) – (6.9)
Movement in fair value of hedging instruments – 4.8 – 4.8
Balance at 31 December 2021 31.5 6.1 504.0 541.6
Capital redemption reserve
The capital redemption reserve arose on an historic redemption of the Company’s shares and is not distributable.
Translation reserve
The translation reserve consists of exchange differences arising on the translation of overseas operations. It also includes changes in the fair
value of hedging instruments where such instruments are designated and effective as hedges of investment in overseas operations.
Other reserve
£499.1 million of other reserves arose on the cash box placing that occurred in June 2020 and qualified for merger relief under section 612 of
the Companies Act 2006 (see Note 23).
Taylor Wimpey plc Annual Report 2021 167
26. Own shares
£ million
Balance at 1 January 2020 17.6
Disposed of on exercise of options (6.1)
Balance at 31 December 2020 11.5
Shares acquired 4.2
Disposed of on exercise of options (1.1)
Balance at 31 December 2021 14.6
The own shares reserve represents the cost of shares in Taylor Wimpey plc purchased in the market, those held as treasury shares and those
held by the Taylor Wimpey Employee Share Ownership Trusts to satisfy options and conditional share awards under the Group’s share plans.
Million shares 2021 2020
Ordinary shares held in trust for bonus, option and performance award plans 9.1 7.1
Employee Share Ownership Trusts (ESOTs) are used to hold the Company’s shares which have been acquired on the market. These shares
are used to meet the valid exercise of options and/or vesting of conditional awards and/or award of shares under the Executive Incentive
Scheme, Bonus Deferral Plan, Performance Share Plan, Savings-Related Share Option Scheme and the matching award of shares under
the Share Incentive Plan. During the year, Taylor Wimpey plc purchased £4.2 million of its own shares to be held in the ESOTs (2020: none).
The ESOTs’ entire holding of shares at 31 December 2021 was covered by outstanding options and conditional awards over shares at that date.
27. Notes to the cash flow statement
Cash and cash equivalents comprise cash at bank and other short term highly liquid investments with an original maturity of three months or less.
Movement in net cash
£ million
Cash and cash
equivalents
Bank and
other loans
Total
net cash
Balance at 1 January 2020 630.4 (84.7) 545.7
Net cash flow 191.3 (13.5) 177.8
Foreign exchange 1.3 (5.4) (4.1)
Balance at 31 December 2020 823.0 (103.6) 719.4
Net cash flow 99.9 12.7 112.6
Foreign exchange (1.9) 6.9 5.0
Balance at 31 December 2021 921.0 (84.0) 837.0
For movements in lease liabilities in the year see Note 19.
28. Contingent liabilities and capital commitments
The Group in the normal course of business has given guarantees and entered into counter-indemnities in respect of bonds relating to the
Group’s own contracts and has given guarantees in respect of the Group’s share of certain contractual obligations of joint ventures.
The Group has entered into counter-indemnities in the normal course of business in respect of performance bonds.
Provision is made for the Directors’ best estimate of all known legal claims and all legal actions in progress. The Group takes legal advice as to
the likelihood of success of claims and actions and no provision is made where the Directors consider, based on that advice, that the action is
unlikely to succeed.
The Group has no significant capital commitments at 31 December 2021 (2020: none).
167Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
168
Taylor Wimpey plc Annual Report 2021
29. Share-based payments
Equity-settled share option plan
Details of all equity-settled share-based payment arrangements in existence during the year are set out in the Directors’ Remuneration Report
on pages 105 to 124. The tables below show the movements in the schemes in the year as well as their weighted average exercise price (WAEP).
2021 2020
Sharesave (SAYE): Options WAEP (in £) Options WAEP (in £)
Outstanding at the beginning of the year 28,381,982 1.10 19,740,433 1.32
Granted during the year 3,544,980 1.42 18,043,668 0.97
Forfeited during the year (4,732,096) 1.10 (7,359,577) 1.29
Exercised during the year (3,174,532) 1.39 (2,042,542) 1.38
Outstanding at the end of the year 24,020,334 1.11 28,381,982 1.10
Exercisable at the end of the year 1,189,180 1.31 1,504,748 1.48
The remaining Sharesave options outstanding at 31 December 2021 had a range of exercise prices from £0.97 to £1.59 (2020: £0.97 to
£1.59) and a weighted average remaining contractual life of 2.89 years (2020: 3.40 years).
2021 2020
Share Incentive Plan (SIP): Options WAEP (in £) Options WAEP (in £)
Outstanding at the beginning of the year 6,722,389 – 5,789,856 –
Granted during the year 1,440,388 – 1,874,590 –
Forfeited during the year (811,540) – (385,229) –
Exercised during the year (854,730) – (556,828) –
Outstanding at the end of the year 6,496,507 – 6,722,389 –
Exercisable at the end of the year 2,891,221 – 2,810,423 –
The table above represents shares that are granted to employees on a matching basis, when the employee joins the scheme, purchased
shares are matched on a 1:1 basis, these awards do not expire.
2021 2020
Performance Share Plan (PSP): Options WAEP (in £) Options WAEP (in £)
Outstanding at the beginning of the year 20,116,944 – 19,466,040 –
Granted during the year 1,967,813 – 6,876,632 –
Forfeited during the year (5,995,692) – (2,854,138) –
Exercised during the year (357,217) – (3,371,590) –
Outstanding at the end of the year 15,731,848 – 20,116,944 –
Exercisable at the end of the year – – ––
The conditional awards outstanding at 31 December 2021 had a weighted average remaining contractual life of 1.35 years (2020: 1.70 years).
The average share price at the date of exercise across all options exercised during the period was £1.68 (2020: £1.80). For share plans
granted during the current and preceding year, the fair value of the awards at the grant date was determined as follows:
Share awards with
no market conditions
Share awards with
market conditions
2021 2020 2021 2020
Model Binomial Binomial Monte Carlo Monte Carlo
Weighted average share price £1.61 £1.28 £1.79 £2.11
Weighted average exercise price £1.07 £0.79 Nil Nil
Expected volatility 41% 39% 41% 25%
Expected life 3/5 years 3/5 years 3 years 3 years
Risk-free rate 0.5% 0.1% 0.1% 0.2%
Expected dividend yield 4.36% 2.02% 0.0% 0.0%
Weighted average fair value of options granted in year £0.73 £0.66 £0.95 £1.17
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the expected term. The expected life
used in the model was based on historical exercise patterns.
The Group recognised a share-based payment expense of £13.3 million in the year (2020: £8.2 million), which was composed of £13.2 million
in relation to equity settled schemes and £0.1 million in relation to cash settled elements (2020: £7.0 million and £1.2 million).
168 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
168
Taylor Wimpey plc Annual Report 2021
29. Share-based payments
Equity-settled share option plan
Details of all equity-settled share-based payment arrangements in existence during the year are set out in the Directors’ Remuneration Report
on pages 105 to 124. The tables below show the movements in the schemes in the year as well as their weighted average exercise price (WAEP).
2021 2020
Sharesave (SAYE): Options WAEP (in £) Options WAEP (in £)
Outstanding at the beginning of the year 28,381,982 1.10 19,740,433 1.32
Granted during the year 3,544,980 1.42 18,043,668 0.97
Forfeited during the year (4,732,096) 1.10 (7,359,577) 1.29
Exercised during the year (3,174,532) 1.39 (2,042,542) 1.38
Outstanding at the end of the year 24,020,334 1.11 28,381,982 1.10
Exercisable at the end of the year 1,189,180 1.31 1,504,748 1.48
The remaining Sharesave options outstanding at 31 December 2021 had a range of exercise prices from £0.97 to £1.59 (2020: £0.97 to
£1.59) and a weighted average remaining contractual life of 2.89 years (2020: 3.40 years).
2021 2020
Share Incentive Plan (SIP): Options WAEP (in £) Options WAEP (in £)
Outstanding at the beginning of the year 6,722,389 – 5,789,856 –
Granted during the year 1,440,388 – 1,874,590 –
Forfeited during the year (811,540) – (385,229) –
Exercised during the year (854,730) – (556,828) –
Outstanding at the end of the year 6,496,507 – 6,722,389 –
Exercisable at the end of the year 2,891,221 – 2,810,423 –
The table above represents shares that are granted to employees on a matching basis, when the employee joins the scheme, purchased
shares are matched on a 1:1 basis, these awards do not expire.
2021 2020
Performance Share Plan (PSP): Options WAEP (in £) Options WAEP (in £)
Outstanding at the beginning of the year 20,116,944 – 19,466,040 –
Granted during the year 1,967,813 – 6,876,632 –
Forfeited during the year (5,995,692) – (2,854,138) –
Exercised during the year (357,217) – (3,371,590) –
Outstanding at the end of the year 15,731,848 – 20,116,944 –
Exercisable at the end of the year – – ––
The conditional awards outstanding at 31 December 2021 had a weighted average remaining contractual life of 1.35 years (2020: 1.70 years).
The average share price at the date of exercise across all options exercised during the period was £1.68 (2020: £1.80). For share plans
granted during the current and preceding year, the fair value of the awards at the grant date was determined as follows:
Share awards with
no market conditions
Share awards with
market conditions
2021 2020 2021 2020
Model Binomial Binomial Monte Carlo Monte Carlo
Weighted average share price £1.61 £1.28 £1.79 £2.11
Weighted average exercise price £1.07 £0.79 Nil Nil
Expected volatility 41% 39% 41% 25%
Expected life 3/5 years 3/5 years 3 years 3 years
Risk-free rate 0.5% 0.1% 0.1% 0.2%
Expected dividend yield 4.36% 2.02% 0.0% 0.0%
Weighted average fair value of options granted in year £0.73 £0.66 £0.95 £1.17
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the expected term. The expected life
used in the model was based on historical exercise patterns.
The Group recognised a share-based payment expense of £13.3 million in the year (2020: £8.2 million), which was composed of £13.2 million
in relation to equity settled schemes and £0.1 million in relation to cash settled elements (2020: £7.0 million and £1.2 million).
Taylor Wimpey plc Annual Report 2021 169
30. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note. The pension schemes of the Group are related parties. Arrangements between the Group and its pension schemes are
disclosed in Note 21. Transactions between the Group and its joint ventures are disclosed below. The Group has loans with joint ventures that
are detailed in Note 13.
Trading transactions
During the year, Group sales to joint ventures totalled £22.9 million (2020: £19.9 million) and purchases totalled £24.2 million (2020: £6.7 million).
At 31 December 2021 receivables from joint ventures were £69.0 million (31 December 2020: £63.9 million) and payables were £0.7 million
(31 December 2020: £0.3 million).
Remuneration of key management personnel
The key management personnel of the Group are the members of the Group Management Team (GMT) as presented on pages 10 to 17. The
remuneration information for the Executive Directors is set out in the Remuneration Report on page 115. The aggregate compensation for the
other members of the GMT is as follows:
£ million 2021 2020
Short term employee benefits 4.6 2.6
Post-employment benefits 0.3 0.3
T
otal (excluding share-based payments charge) 4.9 2.9
In addition to the amounts above, a share-based payment charge of £1.7 million (2020: £0.5 million) related to share options held by
members of the GMT.
31. Dividends
£ million 2021 2020
Proposed
Interim dividend 2021: 4.14p (2020: nil) per ordinary share of 1p each 150.8 –
Final dividend 2021: 4.44p (2020: 4.14p) per ordinary share of 1p each 162.0 151.0
312.8 151.0
A
mounts recognised as distributions to equity holders
Paid
Final dividend 2020: 4.14p (2019: nil) per ordinary share of 1p each 150.7 –
Interim dividend 2021: 4.14p (2020: nil) per ordinary share of 1p each 150.8 –
301.5 –
The Directors recommend a final dividend for the year ended 31 December 2021 of 4.44 pence per share (2020: 4.14 pence per share)
subject to shareholder approval at the Annual General Meeting, with an equivalent final dividend charge of c.£162.0 million based on the
number of shares in issue at the end of the year (2020: £150.7 million). The final dividend will be paid on 13 May 2022 to all shareholders
registered at the close of business on 1 April 2022.
In accordance with IAS 10 ‘Events after the Reporting Period’, the proposed final dividend has not been accrued as a liability
at 31 December 2021.
169Taylor Wimpey plc Annual Report 2021
Notes to the consolidated financial statements
continued
170
Taylor Wimpey plc Annual Report 2021
32. Alternative performance measures
The Group uses a number of alternative performance measures (APMs) which are not defined within IFRS. The Directors use these measures
in order to assess the underlying operational performance of the Group and, as such, these measures should be considered alongside IFRS
measures. The following APMs are referred to throughout the year end results.
Profit before taxation and exceptional items and profit for the period before exceptional items
The Directors consider the removal of exceptional items from the reported results provides more clarity on the performance of the Group.
They are reconciled to profit before tax and profit for the period on the face of the consolidated income statement.
Operating profit and operating profit margin
Throughout the Annual Report and Accounts operating profit is used as one of the main measures of performance. Operating profit is defined
as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures. The Directors consider
this to be an important measure of the underlying performance of the Group. Operating profit margin is calculated as operating profit divided
by total revenue.
2021 2020
Profit on ordinary activities before net finance costs (£m) 698.2 282.4
A
djusted for:
Share of results of joint ventures (£m) (Note 13) 5.4 7.9
Exceptional items (£m) (Note 6) 125.0 10.0
Operating profit (£m) 828.6 300.3
Revenue (£m) (Note 4) 4,284.9 2,790.2
Operating profit margin 19.3% 10.8%
Net operating assets
Net operating assets is defined as basic net assets less net cash, excluding net taxation balances and accrued dividends. Average net
operating assets is the average of the opening and closing net operating assets of the 12-month period. With return on net operating assets,
the Directors consider this to be an important measure of the underlying operating efficiency and performance of the Group.
2021 2020 2019
Basic net assets (£m) 4,314.0 4,016.8 3,307.8
A
djusted for:
Cash (£m) (Note 16) (921.0) (823.0) (630.4)
Borrowings (£m) (Note 17) 84.0 103.6 84.7
Net taxation (£m) (26.4) (32.6) 38.1
Accrued dividends (£m) – ––
Net operating assets (£m) 3,450.6 3,264.8 2,800.2
A
verage basic net assets (£m) 4,165.4 3,662.3
A
verage net operating assets (£m) 3,357.7 3,032.5
Return on net operating assets
Return on net operating assets is defined as rolling 12-month operating profit divided by the average of opening and closing net operating
assets. The Directors consider this to be an important measure of the underlying operating efficiency and performance of the Group.
2021 2020
Operating profit (£m) 828.6 300.3
A
verage net operating assets (£m) 3,357.7 3,032.5
Return on net operating assets 24.7% 9.9%
Tangible net assets per share
This is calculated as net assets before any accrued dividends, excluding goodwill and intangible assets, divided by the number of ordinary
shares in issue at the end of the period. The Directors consider this to be a good measure of the value intrinsic within each ordinary share.
2021 2020
Basic net assets (£m) 4,314.0 4,016.8
A
djusted for:
Intangible assets (£m) (Note 11) (6.6) (8.1)
Tangible net assets (£m) 4,307.4 4,008.7
Ordinary shares in issue (millions) 3,648.6 3,645.4
Tangible net assets per share (pence) 118.1 110.0
170 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the consolidated financial statements
continued
170
Taylor Wimpey plc Annual Report 2021
32. Alternative performance measures
The Group uses a number of alternative performance measures (APMs) which are not defined within IFRS. The Directors use these measures
in order to assess the underlying operational performance of the Group and, as such, these measures should be considered alongside IFRS
measures. The following APMs are referred to throughout the year end results.
Profit before taxation and exceptional items and profit for the period before exceptional items
The Directors consider the removal of exceptional items from the reported results provides more clarity on the performance of the Group.
They are reconciled to profit before tax and profit for the period on the face of the consolidated income statement.
Operating profit and operating profit margin
Throughout the Annual Report and Accounts operating profit is used as one of the main measures of performance. Operating profit is defined
as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures. The Directors consider
this to be an important measure of the underlying performance of the Group. Operating profit margin is calculated as operating profit divided
by total revenue.
2021 2020
Profit on ordinary activities before net finance costs (£m) 698.2 282.4
A
djusted for:
Share of results of joint ventures (£m) (Note 13) 5.4 7.9
Exceptional items (£m) (Note 6) 125.0 10.0
Operating profit (£m) 828.6 300.3
Revenue (£m) (Note 4) 4,284.9 2,790.2
Operating profit margin 19.3% 10.8%
Net operating assets
Net operating assets is defined as basic net assets less net cash, excluding net taxation balances and accrued dividends. Average net
operating assets is the average of the opening and closing net operating assets of the 12-month period. With return on net operating assets,
the Directors consider this to be an important measure of the underlying operating efficiency and performance of the Group.
2021 2020 2019
Basic net assets (£m) 4,314.0 4,016.8 3,307.8
A
djusted for:
Cash (£m) (Note 16) (921.0) (823.0) (630.4)
Borrowings (£m) (Note 17) 84.0 103.6 84.7
Net taxation (£m) (26.4) (32.6) 38.1
Accrued dividends (£m) – ––
Net operating assets (£m) 3,450.6 3,264.8 2,800.2
A
verage basic net assets (£m) 4,165.4 3,662.3
A
verage net operating assets (£m) 3,357.7 3,032.5
Return on net operating assets
Return on net operating assets is defined as rolling 12-month operating profit divided by the average of opening and closing net operating
assets. The Directors consider this to be an important measure of the underlying operating efficiency and performance of the Group.
2021 2020
Operating profit (£m) 828.6 300.3
A
verage net operating assets (£m) 3,357.7 3,032.5
Return on net operating assets 24.7% 9.9%
Tangible net assets per share
This is calculated as net assets before any accrued dividends, excluding goodwill and intangible assets, divided by the number of ordinary
shares in issue at the end of the period. The Directors consider this to be a good measure of the value intrinsic within each ordinary share.
2021 2020
Basic net assets (£m) 4,314.0 4,016.8
A
djusted for:
Intangible assets (£m) (Note 11) (6.6) (8.1)
Tangible net assets (£m) 4,307.4 4,008.7
Ordinary shares in issue (millions) 3,648.6 3,645.4
Tangible net assets per share (pence) 118.1 110.0
Taylor Wimpey plc Annual Report 2021 171
32. Alternative performance measures
c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
Adjusted basic and diluted earnings per share
This is calculated as earnings attributed to shareholders of the parent, excluding exceptional items and tax on exceptional items, divided
by the weighted average number of shares in issue during the period. The Directors consider this provides an important measure of the
underlying earnings capacity of the Group. Note 10 shows a reconciliation from basic and diluted earnings per share to adjusted basic
and diluted earnings per share.
Net operating asset turn
This is defined as 12 month rolling total revenue divided by the average of opening and closing net operating assets. The Directors consider
this to be a good indicator of how efficiently the Group is utilising its assets to generate value for shareholders.
2021 2020
Revenue (£m) (Note 4) 4,284.9 2,790.2
A
verage net operating assets (£m) 3,357.7 3,032.5
Net operating asset turn 1.28 0.92
Net cash
Net cash is defined as total cash less total borrowings (bank and other loans). This is considered by the Directors to be the best indicator of
the financing position of the Group. This is reconciled in Note 27.
Cash conversion
This is defined as cash generated from/(used in) operations, which excludes payments relating to exceptional charges, divided by operating
profit on a rolling 12 month basis. The Directors consider this measure to be a good indication of how efficiently the Group is turning profit
into cash.
2021 2020
Cash generated from/(used in) operations (£m) 574.7 (165.0)
Operating profit (£m) 828.6 300.3
Cash conversion 69.4% (54.9)%
Adjusted gearing
This is defined as adjusted net debt divided by basic net assets. The Directors consider this to be a more representative measure of the
Group’s gearing levels. Adjusted net debt is defined as net cash less land creditors.
2021 2020
Cash (£m) (Note 16) 921.0 823.0
Loans (£m) (Note 17) (84.0) (103.6)
Net cash (£m) 837.0 719.4
Land creditors (£m) (Note 18) (806.4) (675.9)
A
djusted net debt (£m) 30.6 43.5
Basic net assets (£m) 4,314.0 4,016.8
A
djusted gearing (0.7)% (1.1)%
33. Post balance sheet events
There were no material subsequent events affecting the Group after 31 December 2021 that need to be disclosed.
171Taylor Wimpey plc Annual Report 2021
Company balance sheet
at 31 December 2021
172 Taylor Wimpey plc Annual Report 2021
£ million
Note
2021
2020
Restated*
Non-current assets
Investments in Group undertakings 4 2,446.2 2,433.0
T
rade and other receivables 5 2,243.0 2,239.9
4,689.2 4,672.9
Current assets
T
rade and other receivables 5 609.2 687.3
Cash and cash equivalents 877.1 791.6
1,486.3 1,478.9
Current liabilities
T
rade and other payables 6 (1,439.3) (1,640.3)
(1,439.3) (1,640.3)
Net current assets/(liabilities) 47.0 (161.4)
Total assets less current liabilities 4,736.2 4,511.5
Non-current liabilities
T
rade and other payables 6 (0.6) (1.5)
Bank and other loans 7 (84.0) (90.1)
Provisions (1.0) (1.0)
Net assets 4,650.6 4,418.9
Equity
Share capital 8 292.2 292.2
Share premium 9 777.5 773.1
Own shares 10 (14.6) (11.5)
Other reserves 11 535.1 535.1
Retained earnings 12 3,060.4 2,830.0
Total equity 4,650.6 4,418.9
* Certain balances in the comparative balance sheet have been restated as explained in Note 5.
As permitted by Section 408 of the Companies Act 2006, Taylor Wimpey plc has not presented its own income statement. The profit of the
Company for the financial year was £519.3 million (2020: £36.3 million).
The financial statements were approved by the Board of Directors and authorised for issue on 2 March 2022. They were signed on its
behalf by:
P Redfern
Director
C Carney
Director
172 Taylor Wimpey plc Annual Report 2021
Financial statements
Company balance sheet
at 31 December 2021
172 Taylor Wimpey plc Annual Report 2021
£ million
Note
2021
2020
Restated*
Non-current assets
Investments in Group undertakings 4 2,446.2 2,433.0
T
rade and other receivables 5 2,243.0 2,239.9
4,689.2 4,672.9
Current assets
T
rade and other receivables 5 609.2 687.3
Cash and cash equivalents 877.1 791.6
1,486.3 1,478.9
Current liabilities
T
rade and other payables 6 (1,439.3) (1,640.3)
(1,439.3) (1,640.3)
Net current assets/(liabilities) 47.0 (161.4)
Total assets less current liabilities 4,736.2 4,511.5
Non-current liabilities
T
rade and other payables 6 (0.6) (1.5)
Bank and other loans 7 (84.0) (90.1)
Provisions (1.0) (1.0)
Net assets 4,650.6 4,418.9
Equity
Share capital 8 292.2 292.2
Share premium 9 777.5 773.1
Own shares 10 (14.6) (11.5)
Other reserves 11 535.1 535.1
Retained earnings 12 3,060.4 2,830.0
Total equity 4,650.6 4,418.9
* Certain balances in the comparative balance sheet have been restated as explained in Note 5.
As permitted by Section 408 of the Companies Act 2006, Taylor Wimpey plc has not presented its own income statement. The profit of the
Company for the financial year was £519.3 million (2020: £36.3 million).
The financial statements were approved by the Board of Directors and authorised for issue on 2 March 2022. They were signed on its
behalf by:
P Redfern
Director
C Carney
Director
Company statement of changes in equity
for the year to 31 December 2021
Taylor Wimpey plc Annual Report 2021 173
£ million
Share
capital
Share
premium
Own
shares
Other
reserves
Retained
earnings
Total
T
otal equity at 1 January 2020 288.6 762.9 (17.6) 36.0 2,792.5 3,862.4
Profit for the year – – – – 36.3 36.3
Total comprehensive income for the year – – – – 36.3 36.3
New share capital subscribed 3.6 10.2 – 499.1 – 512.9
Utilisation of own shares – – 6.1 – – 6.1
Cash cost of satisfying share options – – – – (5.8) (5.8)
Capital contribution on share-based payments – – – – 7.0 7.0
T
otal equity at 31 December 2020 292.2 773.1 (11.5) 535.1 2,830.0 4,418.9
Profit for the year – – – – 519.3 519.3
Total comprehensive income for the year – – – – 519.3 519.3
New share capital subscribed – 4.4 – – – 4.4
Own shares acquired – – (4.2) – – (4.2)
Utilisation of own shares – – 1.1 – – 1.1
Cash cost of satisfying share options – – – – (0.6) (0.6)
Capital contribution on share-based payments – – – – 13.2 13.2
Dividends approved and paid – – – – (301.5) (301.5)
Total equity at 31 December 2021 292.2 777.5 (14.6) 535.1 3,060.4 4,650.6
173Taylor Wimpey plc Annual Report 2021
Notes to the Company financial statements
for the year to 31 December 2021
174 Taylor Wimpey plc Annual Report 2021
1. Significant accounting policies
The following accounting policies have been used consistently, unless
otherwise stated, in dealing with items which are considered material.
Basis of preparation
The Company meets the definition of a qualifying entity under
Financial Reporting Standard 101 (FRS 101) issued by the Financial
Reporting Council. Accordingly, these financial statements were
prepared in accordance with FRS 101 ‘Reduced Disclosure
Framework’ as issued by the Financial Reporting Council.
As permitted by FRS 101, the Company has taken advantage of the
disclosure exemptions available under that standard in relation to
share-based payments, financial instruments, capital management,
presentation of comparative information in respect of certain assets,
presentation of a cash flow statement, standards not yet effective,
impairment of assets and related party transactions.
The principal accounting policies adopted are set out below.
Going concern
The Group has prepared forecasts, including certain sensitivities,
taking into account the Principal Risks identified on pages 61 to 65.
Having considered these forecasts, the Directors remain of the view
that the Group’s financing arrangements and capital structure provide
both the necessary facilities and covenant headroom to enable the
Group to conduct its business for at least the next 12 months.
Accordingly, the Company financial statements have been prepared
on a going concern basis.
Critical accounting judgements and key sources of
estimation uncertainty
Management have not made any individual accounting judgements
that are material to the Company and does not consider there to be
any key sources of estimation uncertainty.
Investments in Group undertakings
Investments are included in the balance sheet at cost less any
provision for impairment. The Company assesses investments for
impairment whenever events or changes in circumstances indicate
that the carrying value of an investment may not be recoverable. If any
such indication of impairment exists, the Company makes an estimate
of the recoverable amount of the investment. If the recoverable amount
is less than the value of the investment, the investment is considered
to be impaired and is written down to its recoverable amount. An
impairment loss is expensed immediately. Where an impairment loss
subsequently reverses, due to a change in circumstances or in the
estimates used to determine the asset’s recoverable amount, the
carrying amount of the investment is increased to the revised
estimate of its recoverable amount, so long as it does not exceed
the original carrying value prior to the impairment being recognised.
The Company values its investments in subsidiary holding
companies based on a comparison between the net assets
recoverable by the subsidiary company and the investment held.
Where the net assets are lower than the investment an impairment
is recorded. For trading subsidiaries, the investment carrying value in
the Company is assessed against the net present value of the cash
flows of the subsidiary.
Borrowing costs
Capitalised finance costs are held in other receivables and amortised
over the period of the facility.
Provisions
Provisions are recognised at the Directors’ best estimate when the
Company has a present obligation as a result of a past event and
it is probable that the Company will have to settle the obligation.
Taxation
The tax charge represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year.
Taxable profit differs from profit before tax because it excludes items
of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible.
The Company’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Any liability or credit in respect of group relief in lieu of current tax is
also calculated using corporation tax rates that have been enacted
or substantively enacted by the balance sheet date unless a different
rate (including a nil rate) has been agreed within the Group.
Deferred tax
Deferred tax is provided in full on temporary differences that result in
an obligation at the balance sheet date to pay more tax, or a right to
pay less tax, at a future date, at rates expected to apply when they
crystallise based on current tax rates and law.
Deferred tax assets are recognised to the extent that it is regarded
as more likely than not that they will be recovered.
Deferred tax is measured on a non-discounted basis using the tax
rates and laws that have been enacted or substantively enacted at
the balance sheet date.
Foreign currencies
Transactions denominated in foreign currencies are recorded in
Sterling at actual rates as of the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the year
end are reported at the rates of exchange prevailing at the year end.
Any gain or loss arising from a change in exchange rates after the
date of the transaction is included as an exchange gain or loss in
profit and loss.
Trade and other receivables
Trade and other receivables are measured at amortised cost, less any
loss allowance based on expected credit losses. The measurement
of expected credit losses is based on the probability of default and
the magnitude of the loss if there is a default. The assessment of
probability of default is based on historical data adjusted for any
known factors that would influence the future amount to be
received in relation to the receivable.
Share-based payments
The Company issues equity-settled share-based payments to certain
employees of its subsidiaries. Equity-settled share-based payments
are measured at fair value at the grant date. The fair value is expensed
on a straight-line basis over the vesting period, based on the estimate
of shares that will vest. The cost of equity-settled share-based
payments granted to employees of subsidiary companies is borne by
the employing company, without recharge. As such the Company’s
investment in the subsidiary is increased by an equivalent amount.
Own shares
The cost of the Company’s investment in its own shares, which comprise
shares held in treasury by the Company and shares held by employee
benefit trusts for the purpose of funding certain of the Company’s
share option plans, is shown as a reduction in shareholders’ equity.
Dividends paid
Dividends are charged to the Company’s retained earnings reserve
in the period of payment in respect of an interim dividend, and in the
period in which shareholders’ approval is obtained in respect of the
Company’s final dividend.
174 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the Company financial statements
for the year to 31 December 2021
174 Taylor Wimpey plc Annual Report 2021
1. Significant accounting policies
The following accounting policies have been used consistently, unless
otherwise stated, in dealing with items which are considered material.
Basis of preparation
The Company meets the definition of a qualifying entity under
Financial Reporting Standard 101 (FRS 101) issued by the Financial
Reporting Council. Accordingly, these financial statements were
prepared in accordance with FRS 101 ‘Reduced Disclosure
Framework’ as issued by the Financial Reporting Council.
As permitted by FRS 101, the Company has taken advantage of the
disclosure exemptions available under that standard in relation to
share-based payments, financial instruments, capital management,
presentation of comparative information in respect of certain assets,
presentation of a cash flow statement, standards not yet effective,
impairment of assets and related party transactions.
The principal accounting policies adopted are set out below.
Going concern
The Group has prepared forecasts, including certain sensitivities,
taking into account the Principal Risks identified on pages 61 to 65.
Having considered these forecasts, the Directors remain of the view
that the Group’s financing arrangements and capital structure provide
both the necessary facilities and covenant headroom to enable the
Group to conduct its business for at least the next 12 months.
Accordingly, the Company financial statements have been prepared
on a going concern basis.
Critical accounting judgements and key sources of
estimation uncertainty
Management have not made any individual accounting judgements
that are material to the Company and does not consider there to be
any key sources of estimation uncertainty.
Investments in Group undertakings
Investments are included in the balance sheet at cost less any
provision for impairment. The Company assesses investments for
impairment whenever events or changes in circumstances indicate
that the carrying value of an investment may not be recoverable. If any
such indication of impairment exists, the Company makes an estimate
of the recoverable amount of the investment. If the recoverable amount
is less than the value of the investment, the investment is considered
to be impaired and is written down to its recoverable amount. An
impairment loss is expensed immediately. Where an impairment loss
subsequently reverses, due to a change in circumstances or in the
estimates used to determine the asset’s recoverable amount, the
carrying amount of the investment is increased to the revised
estimate of its recoverable amount, so long as it does not exceed
the original carrying value prior to the impairment being recognised.
The Company values its investments in subsidiary holding
companies based on a comparison between the net assets
recoverable by the subsidiary company and the investment held.
Where the net assets are lower than the investment an impairment
is recorded. For trading subsidiaries, the investment carrying value in
the Company is assessed against the net present value of the cash
flows of the subsidiary.
Borrowing costs
Capitalised finance costs are held in other receivables and amortised
over the period of the facility.
Provisions
Provisions are recognised at the Directors’ best estimate when the
Company has a present obligation as a result of a past event and
it is probable that the Company will have to settle the obligation.
Taxation
The tax charge represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year.
Taxable profit differs from profit before tax because it excludes items
of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible.
The Company’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Any liability or credit in respect of group relief in lieu of current tax is
also calculated using corporation tax rates that have been enacted
or substantively enacted by the balance sheet date unless a different
rate (including a nil rate) has been agreed within the Group.
Deferred tax
Deferred tax is provided in full on temporary differences that result in
an obligation at the balance sheet date to pay more tax, or a right to
pay less tax, at a future date, at rates expected to apply when they
crystallise based on current tax rates and law.
Deferred tax assets are recognised to the extent that it is regarded
as more likely than not that they will be recovered.
Deferred tax is measured on a non-discounted basis using the tax
rates and laws that have been enacted or substantively enacted at
the balance sheet date.
Foreign currencies
Transactions denominated in foreign currencies are recorded in
Sterling at actual rates as of the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the year
end are reported at the rates of exchange prevailing at the year end.
Any gain or loss arising from a change in exchange rates after the
date of the transaction is included as an exchange gain or loss in
profit and loss.
Trade and other receivables
Trade and other receivables are measured at amortised cost, less any
loss allowance based on expected credit losses. The measurement
of expected credit losses is based on the probability of default and
the magnitude of the loss if there is a default. The assessment of
probability of default is based on historical data adjusted for any
known factors that would influence the future amount to be
received in relation to the receivable.
Share-based payments
The Company issues equity-settled share-based payments to certain
employees of its subsidiaries. Equity-settled share-based payments
are measured at fair value at the grant date. The fair value is expensed
on a straight-line basis over the vesting period, based on the estimate
of shares that will vest. The cost of equity-settled share-based
payments granted to employees of subsidiary companies is borne by
the employing company, without recharge. As such the Company’s
investment in the subsidiary is increased by an equivalent amount.
Own shares
The cost of the Company’s investment in its own shares, which comprise
shares held in treasury by the Company and shares held by employee
benefit trusts for the purpose of funding certain of the Company’s
share option plans, is shown as a reduction in shareholders’ equity.
Dividends paid
Dividends are charged to the Company’s retained earnings reserve
in the period of payment in respect of an interim dividend, and in the
period in which shareholders’ approval is obtained in respect of the
Company’s final dividend.
Taylor Wimpey plc Annual Report 2021 175
2. Particulars of employees
Number 2021 2020
Directors 3 3
The Executive Directors received all of their remuneration, as disclosed in the Remuneration Report on pages 105 to 124, from Taylor Wimpey
UK Limited. This remuneration is reflective of the Directors’ service to the Company and all its subsidiaries.
3. Auditor’s remuneration
£ million 2021 2020
T
otal audit fees 0.2 0.2
Non-audit fees – –
T
otal 0.2 0.2
A description of other services is included in Note 6 of the Group financial statements.
4. Investments in Group undertakings
£ million Shares
Cost
A
t 1 January 2021 5,244.3
Capital contribution relating to share-based payments 13.2
A
t 31 December 2021 5,257.5
Provision for impairment
A
t 1 January 2021 (2,811.3)
A
t 31 December 2021 (2,811.3)
Carrying amount
A
t 31 December 2021 2,446.2
A
t 31 December 2020 2,433.0
All investments are unlisted and information about all subsidiaries is listed on pages 179 to 182.
5. Trade and other receivables
Current Non-current
£ million 2021
2020
Restated*
2021
2020
Restated*
Due from Group undertakings 607.8 685.7 2,240.9 2,236.8
Other receivables 1.4 1.6 2.1 3.1
609.2 687.3 2,243.0 2,239.9
* Following a reassessment of when certain receivables are expected to be realised, the Company identified that it had classified certain amounts due from Group
undertakings as current that were not expected to be settled or realised within 12 months of the balance sheet date. The comparatives have been restated, reclassifying
£2,236.8 million to non-current.
Amounts due from Group undertakings are repayable on demand and are predominantly interest bearing.
6. Trade and other payables
Current Non-current
£ million 2021 2020 2021 2020
Due to Group undertakings 1,436.2 1,635.8 – –
Other payables 1.4 0.8 0.6 1.5
Corporation tax creditor 1.7 3.7 – –
1,439.3 1,640.3 0.6 1.5
Amounts due to Group undertakings are repayable on demand and are predominantly interest bearing.
175Taylor Wimpey plc Annual Report 2021
Notes to the Company financial statements
continued
176
Taylor Wimpey plc Annual Report 2021
7. Bank and other loans
£ million 2021 2020
€100.0 million 2.02% Senior Loan Notes 84.0 90.1
T
hese loans are repayable as follows:
A
mounts due for settlement after one yea
r
84.0 90.1
8. Share capital
£ million 2021 2020
A
uthorised:
22,200,819,176 (2020: 22,200,819,176) ordinary shares of 1p each 222.0 222.0
1,158,299,201 (2020: 1,158,299,201) deferred ordinary shares of 24p each 278.0 278.0
500.0 500.0
Number of
ordinary shares
Number of deferred
ordinary shares £ million
Issued and fully paid:
31 December 2020 3,645,416,647 1,065,566,274 292.2
Shares issued in year 3,174,532 – –
31 December 2021 3,648,591,179 1,065,566,274 292.2
The Company has two classes of shares:
– Ordinary shares of 1p, each of which carries the right to one vote at general meetings of the Company and such other rights and obligations
as are set out in the Company’s Articles of Association.
– Deferred ordinary shares of 24p, which carry no voting rights and no entitlement to any dividend. The deferred ordinary shares were issued
as part of a capital reorganisation in 2009 and have not subsequently changed.
In June 2020 the Company issued 360,265,931 ordinary shares of 1p at a price of 145p to raise total net proceeds of £510.1 million after
expenses. 355,000,000 of these shares were placed via a cash box structure (the ‘Placing’) in which the cash box entity issued redeemable
preference shares in consideration for the receipt of the net cash proceeds arising from the placement of those shares. Taylor Wimpey plc
ordinary shares were issued in consideration for the transfer of the redeemable preference shares, that it did not already own, of the cash box
entity. It was therefore determined that the placing of those shares qualified for merger relief under section 612 of the Companies Act 2006
such that the excess of the value of the acquired shares in the cash box entity over the nominal value of the ordinary shares issued by
Taylor Wimpey plc was credited to Other Reserves. The remainder of the shares issued, 5,265,931, were issued via a Retail Offer open to
employees and other retail investors and a Directors’ Subscription. The Placing was performed to allow the Group to pursue additional near
term land acquisition opportunities.
The Placing, Retail and Subscription shares placed rank pari passu in all respects with the existing ordinary shares of the Company, including,
without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.
During the year, the Company issued 3.2 million (2020: 2.0 million) ordinary shares to satisfy option exercises.
9. Share premium
£ million 2021 2020
A
t 1 Januar
y
773.1 762.9
Shares issued in year 4.4 10.2
A
t 31 Decembe
r
777.5 773.1
10. Own shares
£ million 2021 2020
Own shares 14.6 11.5
These comprise ordinary shares of the Company: Number Number
Shares held in trust for bonus, options and performance award plans 9.1m 7.1m
176 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the Company financial statements
continued
176
Taylor Wimpey plc Annual Report 2021
7. Bank and other loans
£ million 2021 2020
€100.0 million 2.02% Senior Loan Notes 84.0 90.1
T
hese loans are repayable as follows:
A
mounts due for settlement after one yea
r
84.0 90.1
8. Share capital
£ million 2021 2020
A
uthorised:
22,200,819,176 (2020: 22,200,819,176) ordinary shares of 1p each 222.0 222.0
1,158,299,201 (2020: 1,158,299,201) deferred ordinary shares of 24p each 278.0 278.0
500.0 500.0
Number of
ordinary shares
Number of deferred
ordinary shares £ million
Issued and fully paid:
31 December 2020 3,645,416,647 1,065,566,274 292.2
Shares issued in year 3,174,532 – –
31 December 2021 3,648,591,179 1,065,566,274 292.2
The Company has two classes of shares:
– Ordinary shares of 1p, each of which carries the right to one vote at general meetings of the Company and such other rights and obligations
as are set out in the Company’s Articles of Association.
– Deferred ordinary shares of 24p, which carry no voting rights and no entitlement to any dividend. The deferred ordinary shares were issued
as part of a capital reorganisation in 2009 and have not subsequently changed.
In June 2020 the Company issued 360,265,931 ordinary shares of 1p at a price of 145p to raise total net proceeds of £510.1 million after
expenses. 355,000,000 of these shares were placed via a cash box structure (the ‘Placing’) in which the cash box entity issued redeemable
preference shares in consideration for the receipt of the net cash proceeds arising from the placement of those shares. Taylor Wimpey plc
ordinary shares were issued in consideration for the transfer of the redeemable preference shares, that it did not already own, of the cash box
entity. It was therefore determined that the placing of those shares qualified for merger relief under section 612 of the Companies Act 2006
such that the excess of the value of the acquired shares in the cash box entity over the nominal value of the ordinary shares issued by
Taylor Wimpey plc was credited to Other Reserves. The remainder of the shares issued, 5,265,931, were issued via a Retail Offer open to
employees and other retail investors and a Directors’ Subscription. The Placing was performed to allow the Group to pursue additional near
term land acquisition opportunities.
The Placing, Retail and Subscription shares placed rank pari passu in all respects with the existing ordinary shares of the Company, including,
without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.
During the year, the Company issued 3.2 million (2020: 2.0 million) ordinary shares to satisfy option exercises.
9. Share premium
£ million 2021 2020
A
t 1 Januar
y
773.1 762.9
Shares issued in year 4.4 10.2
A
t 31 Decembe
r
777.5 773.1
10. Own shares
£ million 2021 2020
Own shares 14.6 11.5
These comprise ordinary shares of the Company: Number Number
Shares held in trust for bonus, options and performance award plans 9.1m 7.1m
Taylor Wimpey plc Annual Report 2021 177
10. Own shares c
c
o
o
n
n
t
t
i
i
n
n
u
u
e
e
d
d
During the year, Taylor Wimpey plc purchased £4.2 million of its own shares to be held in the ESOTs (2020: none). The market value of the
shares held at 31 December 2021 was £16.0 million (2020: £11.7 million) and their nominal value was £0.1 million (2020: £0.1 million).
Dividends on these shares have been waived except for a nominal aggregate amount in pence.
ESOTs are used to hold the Company’s shares which have been acquired on the market. These shares are used to meet the valid exercise
of options and/or vesting of conditional awards and/or award of shares under the Executive Incentive Scheme, Bonus Deferral Plan,
Performance Share Plan, Savings-Related Share Option Scheme and the matching award of shares under the Share Incentive Plan.
The ESOTs’ entire holding of shares at 31 December 2021 was covered by outstanding options and conditional awards over shares at that date.
11. Other reserves
£ million 2021 2020
A
t 1 Januar
y
535.1 36.0
Shares issued in year – 499.1
A
t 31 December 535.1 535.1
£499.1 million of other reserves arose on the cash box placing that occurred in June 2020 and qualified for merger relief under section 612 of
the Companies Act 2006 (see Note 8). Other reserves also includes £31.5 million (2020: £31.5 million) in respect of the historical redemption
of the Company’s shares, which is non distributable.
12. Retained earnings
Retained earnings of £3,060.4 million (2020: £2,830.0 million) includes profit for the year and dividends received from subsidiaries of
£500.0 million (2020: nil). Included in retained earnings is £895.2 million (2020: £861.0 million) which is not distributable.
13. Share-based payments
The Company has taken advantage of the FRS 101 disclosure exemption in relation to share-based payments. Details of share awards
granted by the Company to employees of subsidiaries, and that remain outstanding at the year end over the Company’s shares, are set out
in Note 29 of the Group financial statements. The Company did not recognise any expense related to equity-settled share-based payment
transactions in the current or preceding year.
14. Contingent liabilities
The Company has, in the normal course of business, given guarantees and entered into counter-indemnities in respect of bonds relating to
the Group’s own contracts.
Provision is made for the Directors’ best estimate of known legal claims and legal actions in progress. The Group takes legal advice as to the
likelihood of success of claims and actions and no provision is made where the Directors consider, based on that advice, that the action is
unlikely to succeed.
The Company has in issue a guarantee in respect of the Taylor Wimpey Pension Scheme (TWPS), which had an underlying IAS 19 surplus
of £149.9 million at 31 December 2021 (2020: £89.1 million deficit). This guarantee commits the Company to ensuring that the participating
subsidiary meets its obligations under any schedule of contributions agreed with the TWPS Trustee from time to time. Following the 2019
valuation, Taylor Wimpey UK Limited is required to contribute up to £20.0 million per annum into an escrow account between April 2021
and March 2024. The first six months of contributions (£10.0 million) between 1 April 2021 and 30 September 2021 were guaranteed. From
1 October 2021, payments into the escrow account are subject to a quarterly funding test with the first funding test having an effective date of
30 September 2021. In addition, £5.1 million per annum from the Pension Funding Partnership and £2.0 million per annum to cover scheme
expenses is due.
177Taylor Wimpey plc Annual Report 2021
Notes to the Company financial statements
continued
178
Taylor Wimpey plc Annual Report 2021
15. Dividend
£ million 2021 2020
Proposed
Interim dividend 2021: 4.14p (2020: nil) per ordinary share of 1p each 150.8 –
Final dividend 2021: 4.44p (2020: 4.14p) per ordinary share of 1p each 162.0 151.0
312.8 151.0
A
mounts recognised as distributions to equity holders
Paid
Final dividend 2020: 4.14p (2019: nil) per ordinary share of 1p each 150.7 –
Interim dividend 2021: 4.14p (2020: nil) per ordinary share of 1p each 150.8 –
301.5 –
The Directors recommend a final dividend for the year ended 31 December 2021 of 4.44 pence per share (2020: 4.14 pence per share)
subject to shareholder approval at the Annual General Meeting, with an equivalent final dividend charge of c.£162.0 million based on the
number of shares in issue at the end of the year (2020: £150.7 million). The final dividend will be paid on 13 May 2022 to all shareholders
registered at the close of business on 1 April 2022.
In accordance with IAS 10 ‘Events after the Reporting Period’, the proposed final dividend has not been accrued as a liability
at 31 December 2021.
178 Taylor Wimpey plc Annual Report 2021
Financial statements
Notes to the Company financial statements
continued
178
Taylor Wimpey plc Annual Report 2021
15. Dividend
£ million 2021 2020
Proposed
Interim dividend 2021: 4.14p (2020: nil) per ordinary share of 1p each 150.8 –
Final dividend 2021: 4.44p (2020: 4.14p) per ordinary share of 1p each 162.0 151.0
312.8 151.0
A
mounts recognised as distributions to equity holders
Paid
Final dividend 2020: 4.14p (2019: nil) per ordinary share of 1p each 150.7 –
Interim dividend 2021: 4.14p (2020: nil) per ordinary share of 1p each 150.8 –
301.5 –
The Directors recommend a final dividend for the year ended 31 December 2021 of 4.44 pence per share (2020: 4.14 pence per share)
subject to shareholder approval at the Annual General Meeting, with an equivalent final dividend charge of c.£162.0 million based on the
number of shares in issue at the end of the year (2020: £150.7 million). The final dividend will be paid on 13 May 2022 to all shareholders
registered at the close of business on 1 April 2022.
In accordance with IAS 10 ‘Events after the Reporting Period’, the proposed final dividend has not been accrued as a liability
at 31 December 2021.
Particulars of subsidiaries, associates and joint ventures
Taylor Wimpey plc Annual Report 2021 179
The entities listed below are companies incorporated in the United Kingdom and the registered office is Gate House, Turnpike Road, High
Wycombe, Buckinghamshire, HP12 3NR. All of the below are 100% subsidiaries of the Group, either directly or indirectly held by Taylor
Wimpey plc, and only have ordinary share capital.
Admiral Developments Limited
Admiral Homes (Eastern) Limited
Admiral Homes Limited
Ashton Park Limited
BGS (Pentian Green) Holdings Limited
Bryad Developments Limited
Bryant Country Homes Limited
Bryant Group Services Limited
Bryant Homes Central Limited
Bryant Homes East Midlands Limited
Bryant Homes Limited
Bryant Homes North East Limited
Bryant Homes Northern Limited
Bryant Homes South West Limited
Bryant Homes Southern Limited
Bryant Properties Limited
Candlemakers (TW) Limited
Clipper Investments Limited
Compine Developments (Wootton) Limited
Dormant Nominees One Limited
Dormant Nominees Two Limited
Farrods Water Engineers Limited
Flyover House Limited
George Wimpey Limited
George Wimpey Bristol Limited
George Wimpey City Limited
George Wimpey City 2 Limited
George Wimpey East Anglia Limited
George Wimpey East London Limited
George Wimpey East Midlands Limited
George Wimpey Manchester Limited
George Wimpey Midland Limited
George Wimpey North East Limited
George Wimpey North London Limited
George Wimpey North Midlands Limited
George Wimpey North West Limited
George Wimpey North Yorkshire Limited
George Wimpey South East Limited
George Wimpey South Midlands Limited
George Wimpey South West Limited
George Wimpey South Yorkshire Limited
George Wimpey Southern Counties Limited
George Wimpey West London Limited
George Wimpey West Midlands Limited
George Wimpey West Yorkshire Limited
Globe Road Limited
Grand Union Vision Limited
Groveside Homes Limited
Hamme Construction Limited
Hanger Lane Holdings Limited
Hassall Homes (Cheshire) Limited
Hassall Homes (Mercia) Limited
Hassall Homes (Southern) Limited
Hassall Homes (Wessex) Limited
Haverhilll Developments Limited
J.R. Young (Assemblies) Limited
Jim 1 Limited
Jim 3 Limited
Jim 4 Limited
Jim 5 Limited
L. & A. Freeman Limited
Laing Homes Limited
Laing Land Limited
LandTrust Developments Limited
Limebrook Manor LLP
MCA Developments Limited
MCA East Limited
MCA Holdings Limited
MCA Land Limited
MCA Leicester Limited
MCA London Limited
MCA Northumbria Limited
MCA Partnership Housing Limited
MCA South West Limited
MCA West Midlands Limited
MCA Yorkshire Limited
McLean Homes Limited
McLean Homes Bristol & West Limited
McLean Homes Southern Limited
McLean TW Estates Limited
McLean TW (Chester) Limited
McLean TW (Northern) Limited
McLean TW (Southern) Limited
McLean TW (Yorkshire) Limited
McLean TW Group Limited
McLean TW Holdings Limited
McLean TW Limited
McLean TW No. 2 Limited
Melbourne Investments Limited
Pangbourne Developments Limited
Prestoplan Limited
River Farm Developments Limited
South Bristol (Ashton Park) Limited
Spinks & Denning Limited
St. Katharine By The Tower Limited
St. Katharine Haven Limited
Tawnywood Developments Limited
Taylor Wimpey 2007 Limited
Taylor Wimpey Capital Developments
Limited
Taylor Wimpey Commercial Properties
Limited
Taylor Wimpey Developments Limited
Taylor Wimpey Garage Nominees No 1
Limited
Taylor Wimpey Garage Nominees No 2
Limited
Taylor Wimpey Holdings Limited
Taylor Wimpey International Limited
Taylor Wimpey Property Company Limited
Taylor Wimpey Property Management
Limited
Taylor Wimpey SH Capital Limited
Taylor Wimpey UK Limited
Thameswey Homes Limited
The Garden Village Partnership Limited
The Wilson Connolly Employee Benefit
Trust Limited
This is G2 Limited
Thomas Lowe and Sons, Limited
Thomas Lowe Homes Limited
TW NCA Limited
TW Springboard Limited
Twyman Regent Limited
Valley Park Developments Limited
Whelmar (Chester) Limited
Whelmar (Lancashire) Limited
Whelmar (North Wales) Limited
Whelmar Developments Limited
Wilcon Homes Anglia Limited
Wilcon Homes Eastern Limited
Wilcon Homes Midlands Limited
Wilcon Homes Northern Limited
Wilcon Homes Southern Limited
Wilcon Homes Western Limited
Wilcon Lifestyle Homes Limited
Wilfrid Homes Limited
Wilson Connolly Holdings Limited
Wilson Connolly Investments Limited
Wilson Connolly Limited
Wilson Connolly Properties Limited
Wilson Connolly Quest Limited
Wimgrove Developments Limited
Wimgrove Property Trading Limited
Wimpey Construction Developments Limited
Wimpey Construction Overseas Limited
Wimpey Corporate Services Limited
Wimpey Dormant Investments Limited
Wimpey Geotech Limited
Wimpey Group Services Limited
Wimpey Gulf Holdings Limited
Wimpey Overseas Holdings Limited
179Taylor Wimpey plc Annual Report 2021
Particulars of subsidiaries, associates and joint ventures
continued
180
Taylor Wimpey plc Annual Report 2021
The entities listed below are companies incorporated in the United Kingdom and the registered office is Gate House, Turnpike Road, High
Wycombe, Buckinghamshire, HP12 3NR.
Company Name % Owned Company Name % Owned
A
cademy Central LLP 62%
T
riumphdeal Limited 50%
Bordon Developments Holdings Limited 50%
V
umpine Limited 50%
Chobham Manor LLP 50%
Whitehill & Bordon Development Company BV Limited 50%
Chobham Manor Property Management Limited 50%
Whitehill & Bordon Development Company Phase 1a 50%
DFE TW Residential Limited 50%
Whitehill & Bordon Regeneration Company Limited 50%
Falcon Wharf Limited 50%
Wimpey Laing Overseas Limited 50%
GWNW City Developments Limited 50%
Wimpey Laing Limited 50%
Paycause Limited 66.67%
Winstanley & York Road Regeneration LLP 50%
T
aylor Wimpey Pension Trustees Limited 99%
The entities listed below are companies incorporated in the United Kingdom and the registered office is Unit C, Ground Floor, Cirrus Glasgow
Airport Business Park, Marchburn Drive, Abbotsinch, Paisley, PA3 2SJ.
Company Name % Owned Company Name % Owned
Bryant Homes Scotland Limited 100%
T
aylor Wimpey (General Partner) Limited 100%
George Wimpey East Scotland Limited 100%
T
aylor Wimpey (Initial LP) Limited 100%
George Wimpey West Scotland Limited 100%
T
aylor Wimpey Scottish Limited Partnership 100%
London and Clydeside Estates Limited 100%
Whatco England Limited 100%
London and Clydeside Holdings Limited 100%
Wilcon Homes Scotland Limited 100%
Strada Developments Limited 50%
Other entities incorporated in the United Kingdom, unless otherwise stated, and the Group’s ownership share are shown below.
Company Name % Owned Registered Office
Bishops Park Limited 50% 11 Tower View, Kings Hill, West Malling, ME19 4UY
Bishop’s Stortford North Consortium Limited 33.14%
Bath House, 6-8 Bath Street, Bristol, BS1 6HL
Bromley Park (Holdings) Limited
Bromley Park Limited
50% Kent House, 14-17 Market Place, London, W1W 8AJ
Countryside 27 Limited 50% Countryside House, The Drive, Great Warley, Brentwood, CM13 3AT
Emersons Green Urban Village Limited 54.44% 250 Aztec West, Almondsbury, Bristol, BS32 4TR
Gallagher Bathgate Limited 50% Gallagher House, Gallagher Business Park, Warwick, CV34 6AF
Greenwich Millennium Village Limited 50%
Countryside House, The Drive, Great Warley, Brentwood, CM13 3AT
Haydon Development Company Limited 19.27%
6 Drakes Meadow, Penny Lane, Swindon, SN3 3LL
Morrison Land Development Inc 100%
9366, 49 St NW, Edmonton, AB T6B 2L7, Canada
Newcastle Great Park (Estates) Limited 50%
3rd Floor Citygate, St. James’ Boulevard,
Newcastle upon Tyne, NE1 4JE
North Swindon Development Company Limited 28.35%
6 Drakes Meadow, Penny Lane, Swindon, SN3 3LL
Padyear Limited 50%
Hanson House, 14 Castle Hill, Maidenhead, SL6 4JJ
Quedgeley Urban Village Limited 50%
250 Aztec West, Almondsbury, Bristol, BS32 4TR
St George Little Britain (No.1) Limited
St George Little Britain (No.2) Limited
50%
Berkeley House, 19 Portsmouth Road, Cobham, KT11 1JG
T
aylor Wimpey de España S.A.U. 100%
C/Aragón 223-223 A, 07008 Palma de Mallorca, Spain
T
aylor Woodrow (Gibraltar) Limited 100%
17 Bayside Road, Gibraltar
Weaver Developments (Woodfield Plantation) Limited 50%
Quay Point, Lakeside Boulevard, Doncaster, DN4 5PL
Wisley Property Investments Limited 100%
27 Hospital Road, George Town, Cayman Islands
180 Taylor Wimpey plc Annual Report 2021
Financial statements
Particulars of subsidiaries, associates and joint ventures
continued
180
Taylor Wimpey plc Annual Report 2021
The entities listed below are companies incorporated in the United Kingdom and the registered office is Gate House, Turnpike Road, High
Wycombe, Buckinghamshire, HP12 3NR.
Company Name % Owned Company Name % Owned
A
cademy Central LLP 62%
T
riumphdeal Limited 50%
Bordon Developments Holdings Limited 50%
V
umpine Limited 50%
Chobham Manor LLP 50%
Whitehill & Bordon Development Company BV Limited 50%
Chobham Manor Property Management Limited 50%
Whitehill & Bordon Development Company Phase 1a 50%
DFE TW Residential Limited 50%
Whitehill & Bordon Regeneration Company Limited 50%
Falcon Wharf Limited 50%
Wimpey Laing Overseas Limited 50%
GWNW City Developments Limited 50%
Wimpey Laing Limited 50%
Paycause Limited 66.67%
Winstanley & York Road Regeneration LLP 50%
T
aylor Wimpey Pension Trustees Limited 99%
The entities listed below are companies incorporated in the United Kingdom and the registered office is Unit C, Ground Floor, Cirrus Glasgow
Airport Business Park, Marchburn Drive, Abbotsinch, Paisley, PA3 2SJ.
Company Name % Owned Company Name % Owned
Bryant Homes Scotland Limited 100%
T
aylor Wimpey (General Partner) Limited 100%
George Wimpey East Scotland Limited 100%
T
aylor Wimpey (Initial LP) Limited 100%
George Wimpey West Scotland Limited 100%
T
aylor Wimpey Scottish Limited Partnership 100%
London and Clydeside Estates Limited 100%
Whatco England Limited 100%
London and Clydeside Holdings Limited 100%
Wilcon Homes Scotland Limited 100%
Strada Developments Limited 50%
Other entities incorporated in the United Kingdom, unless otherwise stated, and the Group’s ownership share are shown below.
Company Name % Owned Registered Office
Bishops Park Limited 50% 11 Tower View, Kings Hill, West Malling, ME19 4UY
Bishop’s Stortford North Consortium Limited 33.14%
Bath House, 6-8 Bath Street, Bristol, BS1 6HL
Bromley Park (Holdings) Limited
Bromley Park Limited
50% Kent House, 14-17 Market Place, London, W1W 8AJ
Countryside 27 Limited 50% Countryside House, The Drive, Great Warley, Brentwood, CM13 3AT
Emersons Green Urban Village Limited 54.44% 250 Aztec West, Almondsbury, Bristol, BS32 4TR
Gallagher Bathgate Limited 50% Gallagher House, Gallagher Business Park, Warwick, CV34 6AF
Greenwich Millennium Village Limited 50%
Countryside House, The Drive, Great Warley, Brentwood, CM13 3AT
Haydon Development Company Limited 19.27%
6 Drakes Meadow, Penny Lane, Swindon, SN3 3LL
Morrison Land Development Inc 100%
9366, 49 St NW, Edmonton, AB T6B 2L7, Canada
Newcastle Great Park (Estates) Limited 50%
3rd Floor Citygate, St. James’ Boulevard,
Newcastle upon Tyne, NE1 4JE
North Swindon Development Company Limited 28.35%
6 Drakes Meadow, Penny Lane, Swindon, SN3 3LL
Padyear Limited 50%
Hanson House, 14 Castle Hill, Maidenhead, SL6 4JJ
Quedgeley Urban Village Limited 50%
250 Aztec West, Almondsbury, Bristol, BS32 4TR
St George Little Britain (No.1) Limited
St George Little Britain (No.2) Limited
50%
Berkeley House, 19 Portsmouth Road, Cobham, KT11 1JG
T
aylor Wimpey de España S.A.U. 100%
C/Aragón 223-223 A, 07008 Palma de Mallorca, Spain
T
aylor Woodrow (Gibraltar) Limited 100%
17 Bayside Road, Gibraltar
Weaver Developments (Woodfield Plantation) Limited 50%
Quay Point, Lakeside Boulevard, Doncaster, DN4 5PL
Wisley Property Investments Limited 100%
27 Hospital Road, George Town, Cayman Islands
Taylor Wimpey plc Annual Report 2021 181
The following entities are Management Companies that are limited by guarantee (unless otherwise stated) and are temporary parts of the
Group. All are incorporated in the United Kingdom and their assets are not held for the benefit of the Group.
Company Name Reference Company Name Reference
A
bbotsford Park (No.3) Residents Association Limited 1 Humberstone Residents Estate Management Company Limited 9
A
lbion Lock (Sandbach) Management Company Limited 2 Hunters Meadow Residents Association Limited 1
A
lyn Meadows Management Company Limited 2 Jasmine Park (Whirley) Management Company Limited 1
A
psham Grange (Topsham) Management Company Limited 6 K Reach (EA) Management Company Limited 4
Barker Butts Lane Management Company Limited 1 Kentmere Place Residents Association Limited 1
Battersea Exchange Management Company Limited 1 Kesgrave K Management Company Limited 1
Beaulieu Grange Residents Association Limited 1
Kingsbourne (Nantwich) Community Management Company
Limited
11
Biggleswade Management Company Limited* 3 Kingsley Grange (Wickford) Residents Association Limited 11
Billington Grove (SM) Management Company Limited 4 Ladbroke Grove Apartment Management Company Limited* 1
Brantham Residential Estate Management Company Limited 1 Lark View (Thetford) Residents Association Limited 4
Broadleaf Park (Rownhams) Management Company Limited 6 Leawood (Management) Company Limited 1
Broadway Fields Residents Management Company Limited 1 Leybourne Grange Management Community Interest Company 1
Broughton Gate (Milton Keynes) Management Company
Limited
4
Lion Mills (EA) Management Company Limited 4
Brunswick Dock (Liverpool) Management Company Limited* 5 Macintosh Mills Car Park (Management) Limited 1
Buckingham Park (Weedon Hill) Management Company
Limited
4
Manor Court (Prescot) Management Company Limited 1
Capital Court Property Management Limited* 13
Manor Park Sprowston Residents Management Company
Limited
11
Cliddesdon Reach Management Company Limited 1 Melton Manor (Melton Mowbray) Residents Company Limited 9
Concept (EA) Management Company Limited 4 Millers Brow Management Company Ltd 1
Coppice Place Management Company Limited 4 Monmore Grange Management Company Limited 1
Cotswold View Residents Association Limited 1 Netherton Grange Residents Management Company Limited 4
Denne Road Management Company Limited 1 Newbridge Gardens Management Company (No 1) Limited 7
Diglis Water Estate Management Company Limited 1 Newbridge Gardens Management Company (No 2) Limited 7
Dunton Green Management Company (No.1) Limited 1 NGP Management Company (Cell A) Limited* 17
Dunton Green Management Company (No.2) Limited 1 NGP Management Company (Cell D) Limited* 17
Edlogan Wharf Community Interest Company 1 NGP Management Company (Cell E) Limited* 17
Emberton Grange Management Company Limited 1 NGP Management Company (Cell F) Limited* 17
Glasdir Management Company Limited 1 NGP Management Company Residential (Cell G) Limited* 17
Great Hall Park Residents Association Limited 1 NGP Management Company (Commercial) Limited* 17
Greenfields Park (EA) Management Company Limited 7 NGP Management Company (Town Centre) Limited* 17
Handley Gardens Management CIC 8 Nightingale Park Residents Association Limited 11
Hanwell Fields 3B Management Company Limited 1 North Wharf Gardens Management Company Limited 1
Hastings Manor (Hugglescote) Residents Management
Company Limited
9
Nunnery Fields (Management No.1) Limited 7
Haybridge (Wells) Management Company Limited 6 Nunnery Fields (Management) Limited 7
Hayes Green Management Company Limited 4 Onyx Apartments Management Company Limited 1
Heathy Wood Estate Management Company Limited 10 Orchard Grove (Comeytrowe) Management Company Limited 6
Heritage Park Gravesend Residents Association (No.1) Limited 1 Orsett Village Residents Association Limited 11
Heritage Park Gravesend Residents Association (No.2) Limited 1
Pages Priory Phase Two (Leighton Buzzard) Management
Company Limited
4
Heritage Park Gravesend Residents Association (No.3) Limited 1 Palace View Apartments Management Company Limited 1
Heritage Park Gravesend Residents Association (No.4) Limited 1 Parc Nedd Residents Association Limited 1
Heritage Park Gravesend Residents Association (No.5) Limited 1 Parklands (Woburn Two) Management Company Limited 4
Hethersett Residents Management Company Limited 11 Peartree Village Management Limited 12
181Taylor Wimpey plc Annual Report 2021
Particulars of subsidiaries, associates and joint ventures
continued
182
Taylor Wimpey plc Annual Report 2021
Company Name Reference Company Name Reference
Peninsula (EA1) Management Company Limited 4 The Coach Houses (Northampton) Residents Association Limited 1
Plas Brymbo Landscaping Management Company Limited 1 The Copse (Mawsley) Management Company Limited 9
Plas Brymbo Management Company Limited 1
The Grange Number One Desborough Management Company
Limited
1
Poppyfields (Benwick) Residents Association Limited 1 The Highgate (Durham) Management Company Limited* 1
Postmark Residents Management Company Limited 1 The Junction Flat Management Company Limited* 1
Q.Hill (EA 2) Management Company Limited 11 The Laurels (Kirby Cross) Management Company Limited 1
Queen Eleanor’s Heights Residents Association Limited 1 The Merriemont Management Company Limited* 1
Redhill Gardens Residents Management Company Limited 1 The Middlefield Springs Management Company Limited 1
Redhill Park Limited* 18 The Orchard (Willow Street) Management Company Limited 1
Regency Place (Shiplake) Management Company Limited 1
The Orchard Grove (Playground) Management Company
Limited*
1
Romans Gate (Old Stratford) Residents Association Limited 1
The Pennington Wharf Community Management Company
Limited
11
Saxon Park Management Company Limited 1 The Ruxley Towers Management Company Limited* 1
Sherford 1A Parcel 4 Management Company Limited 16 The Seasons Residents Association Limited 1
Sherford 1A Parcel 5 Management Company Limited 16 The Silverdale 9 Flats Management Company Limited 1
Sherford Estate Management Company Limited 13 The Silverdale 9 Houses Management Company Limited 1
Southgate Maisonettes (27 And 28) Limited 1 The Spinney Residents Management Company Limited* 1
Speakman Gardens Residents Association Limited 1 The Swan Gardens Management Company Limited* 1
St Crispin Area H Management Company Limited 1 The Weekley Wood Management Company Limited* 1
St Dunstans Apartment Management Company Limited* 1 The Wharf Lane (Solihull) No.1 Management Company Limited 1
Stanbury View (Parklands) Management Company Limited 1 The Willowfields Management Company Limited* 1
Stortford Fields Estate Management Company Limited 14 The Woodlands at Shevington Management Company Limited 2
Stour Valley Management Phase 1 Limited 15 The Woodway Gate Management Company No.1 Limited 1
Summer Downs Residents Management Company Limited 1 Webheath (Redditch) Management Company Limited 16
Telford Millennium Management Company Limited 1 Westbridge Park (Auckley) Management Company Limited 2
Thamesview (Plots 425 To 560) Residents Association Limited 1 Willow Lake (Bletchley One) Management Company Limited 4
The Avenue Number 4 Management Company Limited 1 Willow Lake (Bletchley Two) Management Company Limited 4
The Avenue Number 5 Management Company Limited 1 Willowcroft (SM) Management Company Limited 9
The Beaumont Park Management Company Limited* 1 Winnington Village Community Management Company Limited 2
The Breme Park (Bromsgrove) Management Company Limited 1 Wootton Meadows Residents Association Limited 1
The Burleigh Rise Management Company Limited* 1 Wyrley View Residents Management Company Limited 1
* Private Limited Company
Reference Registered Address Reference Registered Address
1 Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR
10 Park Point 17 High Street, Longbridge,
Birmingham, B31 2UQ
2 Chiltern House, 72-74 King Edward Street,
Macclesfield, SK10 1AT
11 RMG House, Essex Road,
Hoddesdon, EN11 0DR
3 Newton House, 2 Sark Drive, Newton Leys,
Milton Keynes, MK3 5SD
12 Countryside House, The Drive Great Warley,
Brentwood, Essex, CM13 3AT
4 Queensway House, 11 Queensway,
New Milton, BH25 5NR
13 4 Capital Court, Bitten Road, Sowton Industrial Estate,
Exeter, EX2 7FW
5 168 Northenden Road, Sale,
Manchester, M33 3HE
14 Gateway House, 10 Coopers Way,
Southend-On-Sea, SS2 5TE
6 Fisher House, 84 Fisherton Street,
Salisbury, SP2 7QY
15 154-155 Great Charles Street Queensway, B3 3LP
7 94 Park Lane, Croydon, CR0 1JB
16 Whittington Hall, Whittington Road, Worcester,
Worcestershire, WR5 2ZX
8 1 London Road, Brentwood,
Essex, CM14 4QP
17 3rd Floor Citygate, St James’ Boulevard, Newcastle Upon
Tyne, United Kingdom, NE1 4JE
9 2 Hills Road, Cambridge, CB2 1JP
18 5 Market Yard Mews, 194-204 Bermondsey Street, London,
SE1 3TQ
182 Taylor Wimpey plc Annual Report 2021
Financial statements
Particulars of subsidiaries, associates and joint ventures
continued
182
Taylor Wimpey plc Annual Report 2021
Company Name Reference Company Name Reference
Peninsula (EA1) Management Company Limited 4 The Coach Houses (Northampton) Residents Association Limited 1
Plas Brymbo Landscaping Management Company Limited 1 The Copse (Mawsley) Management Company Limited 9
Plas Brymbo Management Company Limited 1
The Grange Number One Desborough Management Company
Limited
1
Poppyfields (Benwick) Residents Association Limited 1 The Highgate (Durham) Management Company Limited* 1
Postmark Residents Management Company Limited 1 The Junction Flat Management Company Limited* 1
Q.Hill (EA 2) Management Company Limited 11 The Laurels (Kirby Cross) Management Company Limited 1
Queen Eleanor’s Heights Residents Association Limited 1 The Merriemont Management Company Limited* 1
Redhill Gardens Residents Management Company Limited 1 The Middlefield Springs Management Company Limited 1
Redhill Park Limited* 18 The Orchard (Willow Street) Management Company Limited 1
Regency Place (Shiplake) Management Company Limited 1
The Orchard Grove (Playground) Management Company
Limited*
1
Romans Gate (Old Stratford) Residents Association Limited 1
The Pennington Wharf Community Management Company
Limited
11
Saxon Park Management Company Limited 1 The Ruxley Towers Management Company Limited* 1
Sherford 1A Parcel 4 Management Company Limited 16 The Seasons Residents Association Limited 1
Sherford 1A Parcel 5 Management Company Limited 16 The Silverdale 9 Flats Management Company Limited 1
Sherford Estate Management Company Limited 13 The Silverdale 9 Houses Management Company Limited 1
Southgate Maisonettes (27 And 28) Limited 1 The Spinney Residents Management Company Limited* 1
Speakman Gardens Residents Association Limited 1 The Swan Gardens Management Company Limited* 1
St Crispin Area H Management Company Limited 1 The Weekley Wood Management Company Limited* 1
St Dunstans Apartment Management Company Limited* 1 The Wharf Lane (Solihull) No.1 Management Company Limited 1
Stanbury View (Parklands) Management Company Limited 1 The Willowfields Management Company Limited* 1
Stortford Fields Estate Management Company Limited 14 The Woodlands at Shevington Management Company Limited 2
Stour Valley Management Phase 1 Limited 15 The Woodway Gate Management Company No.1 Limited 1
Summer Downs Residents Management Company Limited 1 Webheath (Redditch) Management Company Limited 16
Telford Millennium Management Company Limited 1 Westbridge Park (Auckley) Management Company Limited 2
Thamesview (Plots 425 To 560) Residents Association Limited 1 Willow Lake (Bletchley One) Management Company Limited 4
The Avenue Number 4 Management Company Limited 1 Willow Lake (Bletchley Two) Management Company Limited 4
The Avenue Number 5 Management Company Limited 1 Willowcroft (SM) Management Company Limited 9
The Beaumont Park Management Company Limited* 1 Winnington Village Community Management Company Limited 2
The Breme Park (Bromsgrove) Management Company Limited 1 Wootton Meadows Residents Association Limited 1
The Burleigh Rise Management Company Limited* 1 Wyrley View Residents Management Company Limited 1
* Private Limited Company
Reference Registered Address Reference Registered Address
1 Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR
10 Park Point 17 High Street, Longbridge,
Birmingham, B31 2UQ
2 Chiltern House, 72-74 King Edward Street,
Macclesfield, SK10 1AT
11 RMG House, Essex Road,
Hoddesdon, EN11 0DR
3 Newton House, 2 Sark Drive, Newton Leys,
Milton Keynes, MK3 5SD
12 Countryside House, The Drive Great Warley,
Brentwood, Essex, CM13 3AT
4 Queensway House, 11 Queensway,
New Milton, BH25 5NR
13 4 Capital Court, Bitten Road, Sowton Industrial Estate,
Exeter, EX2 7FW
5 168 Northenden Road, Sale,
Manchester, M33 3HE
14 Gateway House, 10 Coopers Way,
Southend-On-Sea, SS2 5TE
6 Fisher House, 84 Fisherton Street,
Salisbury, SP2 7QY
15 154-155 Great Charles Street Queensway, B3 3LP
7 94 Park Lane, Croydon, CR0 1JB
16 Whittington Hall, Whittington Road, Worcester,
Worcestershire, WR5 2ZX
8 1 London Road, Brentwood,
Essex, CM14 4QP
17 3rd Floor Citygate, St James’ Boulevard, Newcastle Upon
Tyne, United Kingdom, NE1 4JE
9 2 Hills Road, Cambridge, CB2 1JP
18 5 Market Yard Mews, 194-204 Bermondsey Street, London,
SE1 3TQ
Five year review (unaudited)
Taylor Wimpey plc Annual Report 2021 183
The results for 2017 excludes the impact of IFRS 16, which was adopted in 2018.
£ million 2021 2020 2019 2018 2017
Revenue 4,284.9 2,790.2 4,341.3 4,082.0 3,965.2
Profit on ordinary activities before net finance costs and tax 698.2 282.4 856.8 828.8 706.5
A
djust for: Share of results of joint ventures 5.4 7.9 8.0 5.3 7.6
A
djust for: Exceptional items 125.0 10.0 (14.3) 46.1 130.0
Operating profit 828.6 300.3 850.5 880.2 844.1
Net finance costs (24.0) (25.9) (28.9) (23.4) (32.1)
Profit for the financial year before taxation and exceptional items 804.6 274.4 821.6 856.8 812.0
Exceptional items (125.0) (10.0) 14.3 (46.1) (130.0)
T
axation charge including taxation on exceptional items (124.1) (47.4) (162.0) (154.1) (126.7)
Profit for the financial year 555.5 217.0 673.9 656.6 555.3
Balance sheet
Intangible assets 6.6 8.1 7.0 3.2 3.9
Property, plant and equipment 21.7 24.0 25.6 21.6 22.8
Right-of-use assets 26.5 27.5 27.4 27.1 –
Interests in joint ventures 85.4 82.2 55.3 48.3 50.9
Other financial assets 10.0 – – – –
Non-current trade and other receivables 27.5 26.3 43.7 55.7 60.1
Non-current assets (excluding tax) 177.7 168.1 159.0 155.9 137.7
Inventories 4,945.7 4,534.7 4,196.0 4,188.2 4,075.7
Other current assets (excluding tax and cash) 168.2 189.1 161.0 134.7 122.2
T
rade and other payables excluding land creditors (587.7) (571.4) (634.9) (684.8) (705.0)
Land creditors (314.2) (347.9) (339.9) (359.5) (319.5)
Lease liabilities (7.0) (6.4) (7.6) (8.2) –
Provisions (125.4) (70.6) (72.7) (76.9) (87.3)
Net current assets (excluding tax and net cash) 4,079.6 3,727.5 3,301.9 3,193.5 3,086.1
T
rade and other payables excluding land creditors (137.1) (131.8) (110.4) (112.2) (111.0)
Land creditors (492.2) (328.0) (389.3) (379.1) (319.6)
Retirement benefit obligations (37.3) (89.5) (85.0) (133.6) (64.8)
Lease liabilities (20.4) (21.6) (20.3) (19.2) –
Provisions (119.7) (59.9) (55.7) (93.4) (74.3)
Non-current liabilities (excluding debt) (806.7) (630.8) (660.7) (737.5) (569.7)
Cash and cash equivalents 921.0 823.0 630.4 734.2 600.5
Bank and other loans (84.0) (103.6) (84.7) (90.1) (88.7)
T
a
x
ation balances 26.4 32.6 (38.1) (29.2) (28.6)
Basic net assets 4,314.0 4,016.8 3,307.8 3,226.8 3,137.3
Statistics
Basic earnings per share 15.3p 6.3p 20.6p 20.1p 17.0p
A
djusted basic earnings per share 18.0p 6.5p 20.3p 21.3p 20.2p
T
angible net assets per share 118.1p 110.0p 100.5p 98.3p 95.7p
Dividends paid (pence per share) 8.28 – 18.34 15.28 13.79
Number of ordinary shares in issue at the year end (millions) 3,648.6 3,645.4 3,283.1 3,278.1 3,275.4
UK short term landbank (plots) 85,376 77,435 75,612 75,995 74,849
UK average selling price (£’000) 300 288 269 264 264
UK completions (homes including JVs) 14,087 9,609 15,719 14,933 14,541
183Taylor Wimpey plc Annual Report 2021
Dear Shareholder
Annual General Meeting (AGM)
The 2022 AGM of Taylor Wimpey plc (the Company) will be held in the Winterlake Suite at the Crowne Plaza Marlow, Fieldhouse Lane,
Marlow, SL7 1GJ on Tuesday 26 April 2022 at 10:30am.
The Board is looking forward to the opportunity to meet the Company’s shareholders again in person. As we no longer have an office in
central London, we have taken the decision to move our AGM to a venue closer to our Head Office in High Wycombe and will be serving light
refreshments both before and after the meeting, rather than a full luncheon.
Attending the AGM
If you wish to attend and vote at the AGM in person, please bring with you the shareholder attendance card or notice of availability letter.
It will help to authenticate your right to attend, speak and vote, and will help us to register your attendance without delay.
For the safety and comfort of those attending the AGM, large bags, cameras, recording equipment and similar items will not be allowed into
the building and in the interests of security, by attending the AGM you hereby agree to be searched, upon request, together with any bags
and other possessions.
There is wheelchair access to the venue for shareholders who require it or those with reduced mobility. However, where required, attendees
are strongly advised to bring their own carers to assist with their general mobility around the venue. An induction loop system operates in the
meeting room. Directions to the venue can be found on the reverse of your attendance card or notice of availability.
Light refreshments comprising of tea, coffee and pastries will be available from 9:30am and after the end of the AGM.
How to vote
If you would like to vote on the resolutions in this Notice of Meeting but cannot attend the AGM, please register your vote online at
www.signalshares.com or return your proxy form to our Registrar as soon as possible. In order for your vote to count, our Registrar
must receive your proxy form no later than 10:30am on Friday 22 April 2022. If you are a CREST member, register your vote through
the CREST system by completing and transmitting a CREST proxy instruction as described in the procedural notes on page 190.
Shareholder questions
In the event that shareholders are unable to attend the AGM, shareholders are invited to submit questions by email to [email protected].
Please provide any advance questions by 10:30am on Friday 22 April 2022. The questions will be answered by the Board during the AGM.
The answers provided will be made available on the Company’s website as soon as practicable following the conclusion of the AGM.
Recommendation
Your Directors are of the opinion that the resolutions are in the best interests of the Company and its shareholders as a whole and recommend
you to vote in favour of them. Each Director will be doing so in respect of all of their own beneficial shareholding.
Yours faithfully,
Alice Black
Group General Counsel and Company Secretary
2022 Annual General Meeting
This Notice of Meeting is important and requires your immediate attention. If you are in any doubt as to the action you should take,
youarerecommended to seek your own financial advice immediately from a stockbroker, solicitor, bank manager, accountant, or other
independent financial adviser authorised under the Financial Services and Markets Act2000.
If you have sold or otherwise transferred all of your shares in TaylorWimpey plc, please pass this document together with the
accompanying documents to the purchaser or transferee, or to theperson who arranged the sale or transfer so they can pass these
documents to the person who now holds the shares. If you have sold or transferred part only of your holding of shares in the Company,
please consult the person who arranged the sale or transfer.
184 Taylor Wimpey plc Annual Report 2021
Shareholder information
Notice of Annual General Meeting
Notice is hereby given of the eighty seventh Annual General Meeting
(the AGM) of the Company to be held on Tuesday 26 April 2022
at10:30am in the Winterlake Suite at the Crowne Plaza Marlow,
Fieldhouse Lane, Marlow, SL7 1GJ for the purposes set out below.
Ordinary business
Ordinary resolutions:
1. To receive the Directors’ Report, Strategic report, Directors’
Remuneration Report, Independent Auditor’s Report and
Financial Statements for the year ended 31 December 2021.
2. To declare due and payable on 13 May 2022 a final dividend
of4.44pence per ordinary share of the Company for the year
ended 31December 2021 to shareholders on the register at
close of business on 1 April 2022.
3. To re-elect as a Director, Irene Dorner.
4. To re-elect as a Director, Jennie Daly.
5. To re-elect as a Director, Chris Carney.
6. To re-elect as a Director, Robert Noel.
7. To re-elect as a Director, Humphrey Singer.
8. To re-elect as a Director, Lord Jitesh Gadhia.
9. To re-elect as a Director, Scilla Grimble.
10. To re-appoint PricewaterhouseCoopers LLP (PwC) as external
Auditors ofthe Company, to hold office until the conclusion
of the next general meeting at which accounts are laid before
the Company.
11. Subject to the passing of resolution 10, to authorise the Audit
Committee to determine the remuneration of the external
Auditors on behalf of the Board.
12. That the Board be generally and unconditionally authorised to
allot shares in the Company and to grant rights to subscribe for
or convert any security into shares in the Company:
a. up to a nominal amount of £12,163,069 (such amount to be
reduced by any allotments or grants made under paragraph b
below, in excess of £12,163,069); and
b. comprising equity securities (as defined in the Companies
Act2006) up to a nominal amount of £24,326,138 (such
amount to be reduced by any allotments or grants made
under paragraph a above) in connection with an offer by way
of a rights issue:
i. to ordinary shareholders in proportion (as nearly as may be
practicable) to their existing holdings; and
ii. to holders of other equity securities as required by the rights
ofthose securities or as the Board otherwise considers
necessary, and so the Board may impose any limits or
restrictions and make any arrangements which it considers
necessary or appropriate to deal with treasury shares,
fractional entitlements, record dates, legal, regulatory or
practical problems in, or under the laws of, any territory or
any other matter, such authorities to apply until the end of
the next Annual General Meeting of the Company (or, if
earlier, until the close of business on 25 July 2023) but, in
each case, sothat the Company may make offers and enter
into agreements during this period which would, or might,
require shares to be allotted or rights to subscribe for or
convert securities into shares to be granted after the
authority ends; and the Board may allot shares or grant
rights to subscribe for or convert securities into shares
under any such offer or agreement as if the authority had
not ended.
Special resolutions:
13. That if resolution 12 is passed, the Board be given power to allot
equity securities (as defined in the Companies Act 2006) forcash
under the authority given by that resolution and / or to sell
ordinary shares held by the Company as treasury shares for
cash as if Section 561 of the Companies Act 2006 did not apply
to any such allotment or sale, such power to be limited:
a. to the allotment of equity securities and sale of treasury shares
in connection with an offer of, or invitation to apply for, equity
securities (but in the case of the authority granted under
paragraph b of resolution 12, by way of a rights issue only):
i. to ordinary shareholders in proportion (as nearly as
practicable) to their existing holdings; and
ii. to holders of other equity securities, as required by the
rights ofthose securities, or as the Board otherwise
considers necessary,
and so that the Board may impose any limits or restrictions
and make any arrangements which it considers necessary
orappropriate to deal with treasury shares, fractional
entitlements, record dates, legal, regulatory or practical
problems in, or under the laws of, any territory or any other
matters; and
b. in the case of the authority granted under paragraph a of
resolution 12 and / or in the case of any sale of treasury
shares, to the allotment of equity securities or sale of treasury
shares (otherwise than under paragraph a above) up to a
nominal amount of £1,824,460.
Such power to apply until the end of the next Annual General
Meeting of the Company (or, if earlier, until the close of
business on 25 July 2023) but, in each case, during this
period the Company may make offers, and enter into
agreements, which would, or might, require equity securities
to be allotted (and treasury shares to be sold) after the power
ends and the Board may allot equity securities (and sell
treasury shares) under any such offer or agreement as if the
power had not ended.
185Taylor Wimpey plc Annual Report 2021
14. That if resolution 12 is passed, the Board be given the power
inaddition to any power granted under resolution 13 to allot
equity securities (as defined in the Companies Act 2006) for
cash under the authority granted under paragraph a of resolution
12 and / or to sell ordinary shares held by the Company as
treasury shares for cash as ifSection 561 of the Companies
Act2006 did not apply to any such allotment or sale, such
power to be:
a. limited to the allotment of equity securities or sale of treasury
shares up to a nominal amount of £1,824,460; and
b. used only for the purposes of financing a transaction which
the Board determines to be an acquisition or other capital
investment of a kind contemplated by the Statement of
Principles on Disapplying Pre-Emption Rights most recently
published by thePre-Emption Group prior to the date of this
Notice or for the purposes of refinancing such a transaction
within six months of its taking place.
Such power to apply until the end of the next Annual General
Meeting of the Company (or, if earlier, until the close of business
on 25 July 2023) but, in each case, during this period the
Company may make offers, and enter into agreements, which
would, or might, require equity securities to be allotted (and
treasury shares to be sold) after thepower ends and the Board
may allot equity securities (and sell treasury shares) under any
such offer or agreement as if the power hadnot ended.
15. That the Company be authorised for the purposes of Section
701 ofthe Companies Act 2006 to make market purchases
(within the meaning of Section 693(4) of the Companies Act
2006) of the ordinary shares of1pence each of the Company
(ordinary shares), provided that:
a. the maximum number of ordinary shares hereby authorised
tobepurchased shall be 364,892,070;
b. the minimum price (exclusive of expenses) which may be paid
forordinary shares is 1 pence per ordinary share;
c. the maximum price (exclusive of expenses) which may be paid
foran ordinary share is the highest of:
i. an amount equal to 105% of the average of the middle
market quotations for an ordinary share (as derived from
theLondon Stock Exchange Daily Official List) for the five
business days immediately preceding the date on which
such ordinary share is purchased; and
ii. the higher of the price of the last independent trade and
thehighest independent bid on the trading venues where
the purchase is carried out;
d. the authority hereby conferred shall expire at the earlier of
theconclusion of the next Annual General Meeting of the
Company and 25 October 2023 unless such authority is
renewed prior tosuch time; and
e. the Company may make contracts to purchase ordinary
shares under the authority hereby conferred prior to the expiry
of such authority which will or may be executed wholly or
partly after the expiry of such authority, and may purchase
ordinary shares in pursuance of any such contracts, as if the
authority conferred by this resolution had not expired.
Special business
Ordinary resolutions:
16. That the Directors’ Remuneration Report for the year ended
31December 2021, as set out on pages 115 to 124 of the
Annual Report and Accounts for the financial year ended
31December 2021, be approved in accordance with Section
439 of the Companies Act2006.
17. That in accordance with Sections 366 and 367 of the
Companies Act 2006, the Company and all companies
which are its subsidiaries when this resolution is passed
areauthorised to:
a. make political donations to political parties and / or
independent election candidates not exceeding £250,000
inaggregate;
b. make political donations to political organisations other than
political parties not exceeding £250,000 in aggregate; and
c. incur political expenditure not exceeding £250,000 in
aggregate, during the period beginning with the date of
passing this resolution and the conclusion of the next Annual
General Meeting of the Company.
For the purposes of this resolution the terms ‘political donations’,
‘political parties’, ‘independent election candidates’, ‘political
organisations’ and ‘political expenditure’ have the meanings
given bySections 363 to 365 of the Companies Act 2006.
Special resolution:
18. That a general meeting other than an Annual General Meeting
ofthe Company may continue to be called on not less than
14clear days’ notice.
By order of the Board
Alice Black
Group General Counsel and Company Secretary
Taylor Wimpey plc
Gate House
Turnpike Road
High Wycombe
Buckinghamshire
HP12 3NR
Registered in England and Wales No. 296805
2 March 2022
186 Taylor Wimpey plc Annual Report 2021
Shareholder information
Notes to the notice of Annual General Meeting continued
Explanatory notes to the resolutions
Ordinary business
Ordinary resolutions
Ordinary resolutions require more than half of the votes cast to be
infavour.
Resolution 1: To receive the Annual Report and Financial Statements
English company law requires the Directors to lay the Financial
Statements of the Company for the year ended 31 December 2021
and the reports of the Directors, namely the Strategic report,
Directors’ Report, Directors’ Remuneration Report, and Auditor’s
Report (the Annual Report); before a general meeting of the Company.
Resolution 2: To declare a final dividend
The Directors recommend the payment of a final dividend of 4.44
pence per ordinary share in respect of the year ended 31 December
2021. If approved at the AGM, the dividend will be paid on 13 May
2022 to shareholders who are on the Register of Members at the
close of business on 1 April 2022.
Dividend Re-Investment Plan
Subject to shareholders approving the dividend as set out in
resolution 2 at the AGM scheduled for 26 April 2022, the Company
will be offering residents in the United Kingdom a Dividend Re-
Investment Plan (DRIP). The DRIP is provided and administered by
the DRIP plan administrator, Link Market Services Trustees Limited,
which is authorised and regulated by the Financial Conduct Authority
(FCA). The DRIP offers shareholders the opportunity to elect to invest
cash dividends received on their ordinary shares, in purchasing
further ordinary shares of the Company. These shares would be
bought in the market, on competitive dealing terms.
The DRIP will operate automatically in respect of the final dividend
for2021 (unless varied beforehand by shareholders) and all future
dividends, including any special dividends, until such time as you
withdraw from the DRIP or the DRIP is suspended or terminated in
accordance with its terms and conditions.
Shareholders are again reminded to check their position with regard
toany dividend mandates that are in place, should you wish to either
participate in the DRIP or to discontinue or vary any participation, as
existing mandates will apply to all dividend payments (including
special dividends) unless or until revoked.
CREST
For shares held in uncertificated form (CREST), please note that
elections continue to apply only to one dividend and a fresh election
must be made, via CREST, for each dividend.
Full details of the terms and conditions of the DRIP and the actions
required to make or revoke an election, both in respect of ordinary
dividends (i.e. in this case, the 2021 final dividend) and any special
dividends, are available at www.signalshares.com or on request from
theRegistrar, Link Group, 10th Floor, Central Square, 29 Wellington
Street, Leeds, LS1 4DL, email: [email protected] or call
+44 (0)371 664 0381. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom will
be charged at the applicable international rate. The Registrar is open
between 9:00am and 5:30pm, Monday to Friday excluding public
holidays in England andWales.
Resolutions 3-9: Re-election of Directors
In accordance with the 2018 UK Corporate Governance Code (the
Code) which states that all directors should be subject to annual
election by shareholders, the Board has resolved that, with the
exception of Pete Redfern, Gwyn Burr and Angela Knight CBE,
allDirectors of the Company willretire and, being eligible, offer
themselves for re-election by shareholders at the AGM. As previously
announced, Pete Redfern, Gwyn Burr and Angela Knight CBE will
step down from the Board at the conclusion of the 2022 AGM.
Details of the Directors’ service contracts, remuneration and interests
intheCompany’s shares and other securities are given in the
Directors’ Remuneration Report to shareholders on pages 115 to
124 of this Annual Report and Accounts. Full biographical information
concerning each Director can be found on pages 74 and 75.
The following summary information is given in support of the Board’s
proposal for each Director standing for re-election.
Irene Dorner – offers herself for re-election
Irene was appointed as a Non Executive Director and Chairman-
designate on 1December 2019. Irene formally assumed the position
of Chairman on26February 2020. Irene’s strong leadership skills,
coupled with her deep commercial experience, provide strong
leadership of the Board; theeffective independent challenge of the
Non Executive Directors; and the further development of the Group’s
strong cultural principles. Irene also Chairs the Nomination and
Governance Committee.
Jennie Daly – offers herself for re-election
Jennie has been the Group Operations Director since 20 April 2018
and will become the Company’s Chief Executive following the
conclusion of the 2022 AGM.
Chris Carney – offers himself for re-election
Chris has been the Group Finance Director since 20 April 2018.
Robert Noel – offers himself for re-election
Robert has been a Non Executive Director since 1 October 2019.
Rob became the Company’s Senior Independent Director on 21April
2020. The Board is satisfied that he is independent in character and
judgement in applying his expertise at meetings of the Board, the
Audit Committee and the Nomination and Governance Committee,
and that he will be able to allocate sufficient time to theCompany to
discharge his responsibilities effectively. Rob is anexperienced Chief
Executive and has particularly deep property expertise which assists
the Board in assessing large scale land opportunities. At
theconclusion of the AGM Rob will become a member of the
Remuneration Committee and will take on the role of the Board’s
Employee Champion.
Humphrey Singer – offers himself for re-election
Humphrey has been a Non Executive Director since
9 December 2015. The Board is satisfied that he is independent
incharacter and judgement in applying his expertise at meetings
oftheBoard, the Audit Committee (which he Chairs) and
theNomination and Governance Committee, and that he will be
abletoallocate sufficient time to the Company to discharge his
responsibilities effectively. Humphrey’s detailed knowledge and
experience of financial reporting by major listed companies makes
him well-qualified to hold to account the external Auditors and
properly assess the Group’s internal audit and control processes.
Lord Jitesh Gadhia – offers himself for re-election
Jitesh has been a Non Executive Director since 1 March 2021.
TheBoard is satisfied that he is independent incharacter and
judgement in applying his expertise at meetings of the Board, the
Remuneration Committee and the Nomination and Governance
Committee, and that he will be able to allocate sufficient time to the
Company to discharge his responsibilities effectively. Jitesh’s
executive and non executive experience and involvement in public
affairs has added an additional perspective to the Board dynamic.
Following the conclusion of the AGM, Jitesh will assume the role of
Chair of the Remuneration Committee. He has extensive
remuneration committee experience and serves as Chair of the
Remuneration Committee of Compare The Market Limited.
187Taylor Wimpey plc Annual Report 2021
Scilla Grimble – offers herself for re-election
Scilla has been a Non Executive Director since 1 March 2021.
TheBoard is satisfied that she is independent incharacter and
judgement in applying her expertise at meetings of the Board, the
Audit Committee and the Nomination and Governance Committee,
and that she will be able to allocate sufficient time to the Company to
discharge her responsibilities effectively. Scilla’s significant financial,
risk, technology and property experience enhanced the Board’s skill
set following her appointment.
The Board confirms that each of the above Directors has recently
been subject to formal performance evaluation, details of which are
set out in the Nomination and Governance Committee report in the
Annual Report on pages 88 to 97, and that each continues to
demonstrate commitment and is an effective member of the Board
who is able to devote sufficient time in line with the Code to fulfil their
role andduties.
Resolution 10: Re-appointment of PwC as external Auditors ofthe Company
The Company is required to appoint external auditors at each general
meeting at which accounts are laid before the shareholders. It is
therefore proposed that the external Auditors are appointed from the
conclusion of the 2022 AGM until the conclusion of the next general
meeting at which accounts are laid before shareholders. The Board
recommends the reappointment of PwC as the Company’s external
Auditors.
Resolution 11: Authorisation of the Audit Committee to agree on behalf of
the Board the remuneration of PwC as external Auditors
The Board seeks shareholders’ authority for the Audit Committee
todetermine on behalf of the Board the remuneration of the external
Auditors for their services. The Board has adopted a procedure
governing the appointment of the external Auditors to carry out
non-audit services, details of which are given in the Audit
Committeereport. Details of non-audit services performed by the
external Auditors in 2021 are given in Note 6 on page 149 of the
Annual Report.
Resolution 12: Authority to allot shares
The Directors wish to renew the existing authority to allot unissued
shares in the Company, which was granted at the Company’s last
AGM held on 22 April 2021 which is due to expire at the conclusion
ofthis AGM. Accordingly, paragraph a of resolution 12 would give
the Directors the authority to allot ordinary shares or grant rights to
subscribe for or convert any securities into ordinary shares up to
anaggregate nominal amount equal to £12,163,069 (representing
1,216,306,900 ordinary shares). Thisamount represents
approximately one-third of the issued ordinary share capital of the
Company as at 28 February 2022, thelatest practicable date prior to
publication of this Notice of Meeting.
In line with guidance issued by The Investment Association (The IA),
paragraph b of resolution 12 would give the Directors authority to
allot ordinary shares or grant rights to subscribe for or convert any
securities into ordinary shares in connection with a rights issue in
favour of ordinary shareholders up to an aggregate nominal amount
equal to £24,326,138 (representing 2,432,613,800 ordinary shares),
as reduced by the nominal amount of any shares issued under
paragraph a of resolution 12. Thisamount (before any reduction)
represents approximately two-thirds of the issued ordinary share
capital ofthe Company as at 28 February 2022, thelatest practicable
date prior to publication of this Notice of Meeting.
The Company does not hold any shares in treasury.
The authorities sought under paragraphs a and b of resolution 12 will
expire at the earlier of 25 July 2023 and the conclusion of the next
Annual General Meeting of the Company.
The Directors have no present intention to exercise either of the
authorities sought under this resolution. However, if they do exercise
the authorities, theDirectors intend to follow The IA
recommendations concerning their use (including as regards the
Directors standing for re-election in certaincases).
Special Resolutions
Special resolutions require at least a 75% majority of votes cast to be
cast in favour.
Resolutions 13 and 14: Authority to dis-apply pre-emption rights
Resolutions 13 and 14 would give the Directors the power to allot
ordinary shares (or sell any ordinary shares which the Company holds
in treasury) for cash without first offering them to existing
shareholders in proportion to their existing shareholdings.
The power set out in resolution 13 would be, similar to previous
years, limited to: (a) allotments or sales in connection with
pre-emptive offers and offers to holders of other equity securities
if required by the rights of those shares, or as the Board otherwise
considers necessary, or (b) otherwise up to an aggregate nominal
amount of £1,824,460 (representing 182,446,000 ordinary shares).
This aggregate nominal amount represents approximately 5% of the
issued ordinary share capital of the Company (excluding treasury
shares) as at 28 February 2022, the latest practicable date prior to
publication of this Notice.
In respect of the power under paragraph b of resolution 13, the
Directors confirm their intention to follow the provisions of the
Pre-Emption Group’s Statement of Principles regarding cumulative
usage of authorities within a rolling three year period where the
Principles provide that usage in excess of 7.5% of the issued ordinary
share capital of the Company (excluding treasury shares) should not
take place without prior consultation with shareholders.
Resolution 14 is intended to give the Company flexibility to make non
pre-emptive issues of ordinary shares in connection with acquisitions
and other capital investments as contemplated by the Pre-emption
Group’s Statement of Principles. The power under resolution 14 is in
addition to that proposed by resolution 13 and would be limited to
allotments or sales of up to an aggregate nominal amount of
£1,824,460 (representing 182,446,000 ordinary shares) in addition to
the power set out in resolution 13. This aggregate nominal amount
represents an additional 5% of the issued ordinary share capital of
the Company (excluding treasury shares) as at 28 February 2022, the
latest practicable date prior to publication of thisNotice.
The powers under resolutions 13 and 14 will expire at the earlier of
25 July 2023 and the conclusion of the next Annual General Meeting
of the Company.
Resolution 15: Authority to make market purchases of shares
Any purchases under this authority would be made in one or more
tranches and would be limited in aggregate to 10% of the ordinary
shares of the Company in issue at the close of business on 28
February 2022.
The minimum price (exclusive of expenses) which may be paid for an
ordinary share is 1 pence per ordinary share. The maximum price to
be paid on any exercise of the authority would not exceed the highest
of (i) 105% of the average of the middle market quotations for the
Company’s ordinary shares for the five business days immediately
preceding the date of the purchase; and (ii) the higher of the price of
the last independent trade and the highest current independent bid
on the trading venues where the purchase is carried out. Shares
188 Taylor Wimpey plc Annual Report 2021
Shareholder information
Notes to the notice of Annual General Meeting continued
purchased pursuant to these authorities could be held as treasury
shares, which the Company can re-issue quickly and cost-effectively,
and provides the Company with additional flexibility in the management
of its capital base. The total number of shares held as treasury shares
shall not at any one time exceed 10% of the Company’s issued share
capital. Accordingly, any shares bought back over the 10% limit will
be cancelled. As at 28 February 2022, the Company holds no shares
in treasury.
This is a standard resolution, sought by the majority of public listed
companies at Annual General Meetings.
We have announced the Company’s intention to return excess
capital to its shareholders in 2022 of up to £150 million through the
implementation of a share buyback programme. An initial tranche of
up to £75 million commenced on 3 March 2022 and is expected to
end no later than 3 June 2022. The initial tranche of the share
buyback programme is being carried out by the Company using the
authority to purchase its own ordinary shares as approved by
shareholders at the 2021 AGM, and in order to retain the flexibility to
complete the initial tranche and continue to return value to
shareholders, we are asking shareholders to renew the authority for
the Company to purchase its own ordinary shares. The share
buyback is expected to benefit shareholders through the opportunity
for increased future dividends per share on the remaining shares.
Pursuant to the share buyback programme, the Board intends to
hold 25 million of the shares that are repurchased in treasury and the
remaining shares will be cancelled. The Board currently intends that
the shares to be held in treasury will be used for future obligations of
the Company in respect of its employee share schemes.
The Board will use this authority to purchase shares only after careful
consideration (taking into account market conditions, other
investment opportunities, appropriate gearing levels and the overall
financial position of the Company).
The total number of options and conditional share awards to
subscribe for ordinary shares outstanding as at the close of business
on 28 February 2022 was 23,606,764, representing approximately
0.6% of the issued ordinary share capital of the Company as at that
date and approximately 0.7% of the Company’s issued ordinary
share capital following any exercise in full of this authority to make
market purchases.
This authority will last until the earlier of 25 October 2023 and the
conclusion of the Company’s next Annual General Meeting.
Special business
Ordinary resolutions
Ordinary resolutions require more than half of the votes cast to be
cast infavour.
Resolution 16: Approval of the Directors’ Remuneration Report
The Remuneration Committee of the Board (the Committee) is seeking
shareholders’ approval of the Directors’ Remuneration Report in
resolution 16, which will be proposed as an ordinary resolution.
The Directors are required to prepare the Directors’ Remuneration
Report, comprising an annual report detailing the remuneration of
theDirectors, a statement by the Chair of the Committee and the
remuneration at a glance section. The Company is required to seek
shareholders’ approval in respect of thecontents of this Report on an
annual basis (excluding the part containing the Directors’
Remuneration Policy, which was approved by shareholders at the
Company’s 2020 AGM when it was proposed for its latest three-
yearly vote). This vote on the Directors’ Remuneration Report is an
advisory one only.
Resolution 17: Authority to make political donations
In order to comply with its obligations under the Companies Act 2006
and to avoid any inadvertent infringement of that Act, the Board
wishes to renew its existing authority for a general level of political
donation and / or expenditure. Resolution 17 seeks to renew the
existing authority for the Company to make political donations and
incur political expenditure.
The Companies Act 2006 requires this authority to be divided into
three heads (as set out in resolution 17) with a separate amount
specified as permitted for each. An amount not exceeding £250,000
for each head of the authority has been proposed. In accordance
with the Companies Act 2006, resolution 17 extends approval to
allof the Company’s subsidiaries.
This authority will expire at the conclusion of the next Annual General
Meeting of the Company, unless renewal is sought at that meeting.
The Company and the Group do not make any donations to political
parties or organisations and do not intend to going forward, but do
support certain industry-wide bodies such as the Home Builders
Federation in the UK. Whilst the Board does not regard this as
political in nature, in certain circumstances such support together
with donations made for charitable or similar purposes could possibly
be treated as a donation to a political organisation under the relevant
provisions of the Companies Act 2006. For example, a donation to
ahumanitarian charity which may also operate as a political lobby,
sponsorship, subscriptions, paid leave to employees fulfilling public
duties and payments to industry representative bodies could
constitute a donation to a political organisation within the current
definitions in the Companies Act 2006.
Details of the Company’s and the Group’s charitable donations
appear on page 43 of the Annual Report and Accounts.
Special resolution
Special resolutions require at least a 75% majority of votes cast to be
cast in favour.
Resolution 18: Notice of general meetings
The Companies (Shareholders’ Rights) Regulations 2009 have
increased the notice period required for general meetings of the
Company to 21 clear days unless shareholders agree to a shorter
notice period, which cannot be less than 14 clear days. At the last
AGM, a resolution was passed approving the Company’s ability to
call general meetings (other than Annual General Meetings, which
willcontinue to be held on at least 21 clear days’ notice) on not
lessthan 14 clear days’ notice. As this approval will expire at the
conclusion of this AGM, resolution 18 proposes its renewal. The
shorter notice period of 14 clear days would not be used as a matter
of routine forany general meeting, but only where the flexibility is
merited by the business of a particular meeting and is thought to be
to the advantage of shareholders as a whole. The renewed approval
will be effective until the Company’s next Annual General Meeting,
when it is intended that a similar resolution will be proposed.
Note that in order to be able to call a general meeting on less than 21
clear days’ notice, the Company must make available electronic
voting to all shareholders in respect of that meeting.
Procedural notes
1. To be entitled to attend and vote at the AGM (and for the purpose
of the determination by the Company of the votes which
shareholders may cast), shareholders must be registered on the
Register of Members of the Company by 6:00pm on Friday 22
April 2022 (or, in the event of any adjournment, on the date which
is two working days before the time of the adjourned meeting).
189Taylor Wimpey plc Annual Report 2021
2. As at 28 February 2022 (being the latest practicable date prior
tothe publication of this notice) the Company’s issued share
capital consisted of 3,648,920,705 ordinary shares, carrying one
vote each. Therefore, the total voting rights in the Company as
at 28 February 2022 were 3,648,920,705.
3. A shareholder entitled to attend and vote at the AGM may
appoint a proxy or proxies to exercise all or any of their rights
atthe AGM. A proxy need not be a shareholder of the Company.
Inthe case of joint holders, where more than one of the joint
holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority
is determined by the order in which the names of the joint
holders appear in the Company’s Register of Members
inrespect of the joint holdings (the first-named being the
mostsenior).
4. To be valid, any proxy appointment must be received by Link
Group at PXS 1, 10th Floor, Central Square, 29 Wellington
Street, Leeds, LS1 4DL, or, if you want to use an envelope the
address to use is FREEPOST PXS, 10th Floor, Central Square,
29 Wellington Street, Leeds, LS1 4DL or, electronically via the
internet at www.signalshares.com or, if you are a member of
CREST, via the service provided by Euroclear UK and Ireland
Limited at the electronic address provided in note 9, in each
case no later than 10:30am on Friday 22 April 2022. Please note
that all proxy appointments received after this time will be void.
A proxy appointment sent electronically at any time that is found
to contain any virus will not be accepted.
5. If you require a paper proxy form, or if you require additional
forms, please contact Link Group, by email at
[email protected], or by telephone on
+44 (0)371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international
rate. Lines are open between 9:00am to 5:30pm, Monday to
Friday excluding public holidays in England and Wales).
6. Any person to whom this notice is sent who is a person
nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a ‘Nominated Person’) may, under an
agreement between them and the shareholder by whom they
were nominated, have a right to be appointed (or to have
someone else appointed) as a proxy for the AGM. If a Nominated
Person has no such proxy appointment right or does not wish to
exercise it, they may, under any such agreement, have a right to
give instructions to the shareholder as to the exercise of voting
rights. Such persons should direct any communications and
enquiries to the registered holder of the shares by whom they
were nominated and not to the Company or its Registrar.
7. The statement of the rights of shareholders in relation to the
appointment of proxies in notes 3 and 4 above does not apply
to Nominated Persons. The rights described in these notes can
only beexercised by shareholders of the Company.
8. CREST members who wish to appoint a proxy or proxies
through theCREST electronic proxy appointment service may
do so by using the procedures described in the CREST Manual.
CREST personal members or other CREST sponsored
members, and those CREST members who have appointed
aservice provider(s), should refer to their CREST sponsor or
votingservice provider(s), who will be able totake the
appropriate action on their behalf.
9. In order for a proxy appointment or instruction made using the
CREST service to be valid, it must be properly authenticated
inaccordance with Euroclear UK and Ireland Limited’s
specifications, and must contain the information required for
such instruction, as described in the CREST Manual (available
via www.euroclear.com/CREST). The message, regardless of
whether it constitutes the appointment of a proxy or is an
amendment to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be
received by the issuer’s agent (ID RA10) by 10:30am on Friday
22 April 2022. For this purpose, the time of receipt will be taken
to be the time (as determined by the time stamp applied to the
message by the CREST Application Host) from which the
issuer’s agent is able to retrieve the message by enquiry to
CREST in the manner prescribed by CREST. After this time
anychange of instructions to proxies appointed through CREST
should be communicated to the appointee through other means.
10. The Company may treat as invalid a CREST Proxy instruction
inthe circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
11. Any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf all of
its powers as a member provided that they do not do so in
relation to thesame shares.
12. Under Section 527 of the Companies Act 2006 members
meeting the threshold requirements set out in that section have
the right to require the Company to publish on a website a
statement setting out any matter relating to:
– The audit of the Company’s accounts (including the Auditor’s
Report and the conduct of the audit) that are to be laid before
theAGM; or
– Any circumstance connected with an auditor of the Company
ceasing to hold office since the previous meeting at which
annual accounts and reports were laid in accordance with
Section 437 ofthe Companies Act 2006.
The Company may not require the shareholders requesting any
such website publication to pay its expenses in complying with
Sections 527or 528 of the Companies Act 2006. Where the
Company is required to place a statement on a website under
Section 527 of the Companies Act 2006, it must forward the
statement to the Company’s external Auditors not later than the
time when it makes the statement available on the website. The
business which may be dealt with at the AGM includes any
statement that the Company has been required under Section
527 of the Companies Act 2006 to publish on a website.
13. Under Section 319A of the Companies Act 2006, shareholders
have the right to ask questions at the AGM relating to the
business of the AGM. The Company must cause to be answered
any such question relating to the business being dealt with at the
AGM but no such answer need be given if: (i) to do so would
interfere unduly with the preparation for the meeting or involve
the disclosure of confidential information; (ii) the answer has
already been given on a website in the form of an answer to a
question; or (iii) it is undesirable in the interests of the Company
or the good order of the AGM that the question be answered.
14. Shareholders have the right to request information to enable
them to determine that their vote on a poll was validly recorded
and counted. Ifyou require confirmation please contact Link
Group, by email at [email protected], or by telephone
on +44 (0)371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international
rate. Lines are open between 9:00am to 5:30pm, Mondayto
Friday excluding public holidays in England andWales).
15. A copy of this Notice, and other information required by
Section311A of the Companies Act 2006, can be found at
www.taylorwimpey.co.uk/corporate.
16. Voting on all resolutions at this year’s AGM will be conducted
byway of a poll. The results of the poll will be announced
viaaRegulatory Information Service and made available at
190 Taylor Wimpey plc Annual Report 2021
Shareholder information
Notes to the notice of Annual General Meeting continued
www.taylorwimpey.co.uk/corporate as soon as practicable
afterthe AGM.
17. A copy of the Company’s Articles of Association will be available
forinspection during normal business hours (excluding Saturdays,
Sundays and public holidays) at the Company’s registered
office: Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR from the date of this Notice
untilthe close of the AGM.
18. The documents listed below are available for inspection at an
agreed time at the Company’s registered office. If you wish to
inspect these documents email [email protected]
during normal business hours (excluding Saturdays, Sundays
and public holidays). Copies of these documents will also be
available before and during the AGM.
– Copies of the Executive Directors’ service contracts.
– Copies of the letters of appointment of the Chairman of the
Board and the Non Executive Directors.
– A copy of the full Annual Report and Financial Statements of
the Company for the year ended 31 December 2021,
including the Directors’ Remuneration Report referred to in
resolution 16. This document is also available on our
corporate website.
19. Personal data provided by shareholders at or in relation to the
AGM (including names, contact details, votes and Shareholder
Reference Numbers), will be processed in line with the
Company’s privacy policy which is available at
www.taylorwimpey.co.uk/privacy-policy.
Shareholder facilities
Web communications
The Company makes documents and information available to
shareholders by electronic means and via a website, rather than
bysending hard copies. This way of communicating is enabled in
accordance with the Companies Act 2006, Rule 6 of the Disclosure
and Transparency Rules and the Company’s Articles of Association.
Making documents and information available electronically:
a. Enables the Company to reduce printing and postage costs.
b. Allows faster access to information and enables shareholders
toaccess documents on the day they are published on the
Company’s website.
c. Reduces the amount of resources consumed, such as paper,
andlessens the impact of printing and mailing activities on
theenvironment.
The Company provides hard copy documentation to those
shareholders who have requested this and is, of course, happy
toprovide hard copies toany shareholders upon request.
The Company’s website is www.taylorwimpey.co.uk and shareholder
documentation made available electronically is generally accessible at
www.taylorwimpey.co.uk/corporate.
Electronic communications
The Company also encourages shareholders to elect to
receive notification of the availability of Company
documentation by means of an email. Shareholders can
sign up for this facility by registering on our website at
www.taylorwimpey.co.uk/corporate/investors/shareholder-centre.
Online facilities for shareholders
You can access our Annual Report, half year and full year
statements, and copies of recent shareholder communications online
via our corporate website.
You can manage your shareholding in TaylorWimpey via Link
Group’s shareholder portal, which can be accessed online at
www.signalshares.com.
Dividend Re-Investment Plan
Residents in the United Kingdom can choose to invest their cash
dividends, including any special dividends, in purchasing Taylor
Wimpey shares on the market under the terms of the Dividend
Re-Investment Plan (DRIP). For further information onthe DRIP and
how to join, contact Link Group.
Shareholders are again reminded to check their position with regard
toany dividend mandates that are in place, should you wish to either
participate in the DRIP or discontinue or vary any participation, as
existing mandates will apply to all dividend payments (including
special dividends) unless or until revoked.
CREST
The Company offers shareholders who hold their TaylorWimpey
shares inCREST a facility for the receipt of dividends through the
CREST system.
For shares held in uncertificated form (CREST), please note that
elections continue to apply only to one dividend and a fresh election
must be made, via CREST, for each dividend.
Full details of the terms and conditions of the DRIP and the actions
required to make or revoke an election, both in respect of ordinary
dividends (i.e. in this case, the 2021 final dividend) and any special
dividends, are available at www.signalshares.com or on request
fromthe Registrar, Link Group, 10th Floor, Central Square, 29
Wellington Street, Leeds, LS1 4DL, email: [email protected],
tel: +44 (0)371 664 0381. Calls are charged at the standard
geographic rate andwill vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. Lines
areopen between 9:00am and 5:30pm Monday to Friday excluding
public holidays in England and Wales.
Dividend mandates
We strongly encourage all shareholders to receive their cash
dividends bydirect transfer to a bank or building society account. This
ensures that dividends are credited promptly to shareholders without
the cost and inconvenience of having to pay in dividend cheques at a
bank. If you wishto use this cost-effective and simple facility please
register for the shareholder portal at www.signalshares.com and
register your bank mandate online or complete and return the
dividend mandate form attached to your dividend cheque. Additional
mandate forms may be obtained from Link Group.
Duplicate share register accounts
If you are receiving more than one copy of our Annual Report and
Accounts, it may be that your shares are registered in two or more
accounts on our Register of Members. You might wish to consider
merging them into one single account. Please contact Link Group
who will be pleased to carry out your instructions in this regard.
191Taylor Wimpey plc Annual Report 2021
TaylorWimpey and CREST
TaylorWimpey shares can be held in CREST accounts, which do
notrequire share certificates. This may make it quicker and easier for
some shareholders to settle stock market transactions. Shareholders
who deal infrequently may, however, prefer to continue to hold their
shares in certificated form and this facility will remain available for the
time being, pending the likely general introduction of dematerialised
shareholdings indue course.
TaylorWimpey share price
Our share price is available on our corporate website.
Gifting shares to charity
If you have a small holding of TaylorWimpey shares, you may wish to
consider gifting them to charity. You can do so through ‘ShareGift’,
which is administered by a registered charity, Orr Mackintosh
Foundation Limited. Shares gifted are re-registered in the name of
the charity, combined with other donated shares and then sold
through stockbrokers who charge nocommission. The proceeds
aredistributed to a wide range of recognised charities. For further
details, please contact Link Group or approach ShareGift directly at
www.sharegift.org or telephone them on+44 (0)20 7930 3737.
Unsolicited approaches to shareholders and
‘Boiler Room’ scams
We receive reports from time to time from TaylorWimpey
shareholders who have received what appear to be fraudulent
approaches from third parties with respect to their shareholding in
the Company. In some cases these are ‘cold calls’ and in others
correspondence. They generally purport to be from a firm of solicitors
or an investment company and offer, or hold out the prospect of,
large gains on TaylorWimpey shares or other investments you
mayhold.
The approaches normally include the seeking of an advance payment
from the shareholder, the disclosure of the shareholder’s bank details
or the sale of an unrelated investment. Shareholders are advised to
be extremely wary of such approaches. More information is available
on our website www.taylorwimpey.co.uk/corporate/shareholder-
information/boiler-room-scams and you can check whether an
enquirer is properly authorised and report scam approaches by
contacting the FCA on www.fca.org.uk/consumers orby calling
0800 111 6768. This is a freephone number from the UK and lines
are open Monday to Friday, 8:00am to 6:00pm and Saturday
9:00am to 1:00pm.
Annual General Meeting
10:30am on 26 April 2022 at:
The Winterlake Suite, Crowne Plaza Marlow, Fieldhouse Lane,
Marlow, SL7 1GJ.
Proxy instructions must be received by 10:30am on Friday 22 April
2022.
Group General Counsel and CompanySecretary
Alice Black
Gate House
Turnpike Road
High Wycombe
Buckinghamshire
HP12 3NR
Tel: +44 (0)1494 558323
Registrar
For any enquiries concerning your shareholding or details of
shareholder services, please contact:
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Email: [email protected]
Tel: +44 (0)371 664 0300
Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Lines are open between 9:00am and
5:30pm, Mondayto Friday excluding public holidays in England
andWales.
External Auditors
PricewaterhouseCoopers LLP
Solicitors
Slaughter and May
Stockbrokers
Citigroup Global Markets Limited
Credit Suisse International
Principal operating addresses
UK
TaylorWimpey plc
Gate House
Turnpike Road
High Wycombe
Buckinghamshire
HP12 3NR
Tel: +44 (0)1494 558323
Website: www.taylorwimpey.co.uk
Registered in England and Wales number296805
Details of all our operating locations are available on our website
www.taylorwimpey.co.uk
TaylorWimpey UK Limited
Gate House
Turnpike Road
High Wycombe
Buckinghamshire
HP12 3NR
Tel: +44 (0)1494 558323
Spain
TaylorWimpey de España S.A.U
C/Aragón
223-223A
07008 Palma de Mallorca
Mallorca - Spain
Tel: +34 971 706570 / Fax: +34 971 706565
192 Taylor Wimpey plc Annual Report 2021
Shareholder information
Shareholder facilities
Further information about our sustainability activities and policies
can be found within our Sustainability supplement and ESG addendum 2021
on our website: www.taylorwimpey.co.uk/corporate/sustainability
More online
View our Annual Report and Accounts online:
www.taylorwimpey.co.uk/corporate
This is a certified climate neutral print
product for which carbon emissions
have been calculated and offset by
supporting recognised carbon offset
projects. The carbon offset projects
are audited and certified according to
international standards and
demonstrably reduce emissions. The
climate neutral label includes a
unique ID number specific to this
product which can be tracked at
www.climatepartner.com, giving
details of the carbon offsetting
process including information on the
emissions volume and the carbon
offset project being supported.
Designed and produced by Black
Sun Plc www.blacksunplc.com
Printed by Park Communications on
FSC® certified paper.
Taylor Wimpey plc Annual Report and Accounts 2021 www.taylorwimpey.co.uk