Pete Redfern defends decision to raise £500m from shareholders
The chief executive of Taylor Wimpey has admitted the firm was too slow in getting back up to speed last summer to take advantage of the post-covid housing market surge.
Pete Redfern’s comments come after he made it clear he had no regrets about being the first housebuilder to shut down sites in the wake of the prime minister’s 23 March lockdown announcement.
He said he had made the decisions based on his principles, in the knowledge they would affect the firm’s financial performance.
Taylor Wimpey reported a 68% drop in pre-tax profit for the 2020 calendar year and a drop in completions of nearly 40%, despite the strong demand for homes as the country emerged from the first coronavirus lockdown from May onwards.
Redfern (pictured) told Building’s sister title Housing Today he now felt he was up to two months too slow in returning to driving the financial performance of the business, instead continuing to focus too much on covid mitigation until the end of the summer.
He said: “We were right to de-emphasise financial performance through that second quarter, in the decisions to come off site, to go into furlough, in lots of things that were covid related.
“But I think we could have, in July particularly, just have switched that financial performance message back on a little bit more.
“At the end of July we were still very much focused 90% on covid and safety, and I don’t think that was true across the industry. By September we were building that balance of performance pressure back on, but we could have been a month or two earlier with hindsight.”
Taylor Wimpey’s financial performance for last year compares unfavourably with Persimmon, which did not put staff on furlough, and was able to restart sites more quickly. It reported profit down by just a quarter on revenue down just 8%.
Redfern said while he didn’t regret the comparison with Persimmon specifically, he thought there could have been a better “middle way” between emphasising safety and performance issues to staff.
Redfern said he stood by the decision last June to raise £500m from shareholders to spend on land while demand was weak, despite there subsequently having been no fall in the housing market.
This had enabled the business to spend £1.6bn on land, at triple the usual rate, which he said had left the business “streets ahead” of its rival and in a position to grow volume and margin more quickly. He described the purchase of 100 sites as a “a one-off opportunity when very few others were playing in the market.”