Redrow Redrow calls for change at Construction Industry Training Board
John Tutte, Redrow's chief executive, has criticised the Construction Industry Training Board (CITB) ahead of a crucial vote on the body's future. Many of the UK's housebuilders are reported to be preparing to vote to scrap the CITB levy, effectively ending the 43-year old training board. Tutte said it is no longer achieving what it was set up to achieve and needed reform, though he stopped short of saying it should be scrapped. His comments came as Redrow announced record results, with pre-tax profit rising 26% to £315m ($408m).

Redrow chief executive John Tutte has called for change at the CITB after accusing the training body of not “delivering what it was set up to do”.

Speaking to Construction News, Mr Tutte said his firm wanted to see reform at the CITB, although he stopped short of calling for the training body to be scrapped.

“There is a lot of doubt about the CITB at the moment and there’s no doubt that it’s not been delivering what it was set up to do,” he said.

“But that’s not a great surprise; the CITB was established 60 years ago when the construction sector looked a hell of a lot different from what it does today.

“There is certainly some concern about the direction the CITB has gone in; it’s not really adapted to the housebuilding market.”

Construction News revealed last month that the majority of the country’s housebuilders look set to vote against the continuation of the CITB when they have their say on its future this month.

It is understood that many of the UK’s housebuilders, including HBF members, are lining up to vote to scrap the CITB levy, and thereby opting against continuing with the 43-year-old training board.

While he did not reveal which way his firm would vote, Mr Tutte said Redrow’s view was that “there needs to be change” at the CITB.

“That doesn’t mean you have to scrap it, but I think it needs some reform.”

Mr Tutte was speaking after the housebuilder revealed record results for the year to 30 June 2017, with revenue rising 20 per cent year on year to hit £1.66bn.

Profit before tax rose 26 per cent to £315m, up from £250m, giving a pre-tax margin of 19.4 per cent.

Legal completions hit an all-time high of 5,416, up 15 per cent on its previous year.

The housebuilder’s order book increased 14 per cent to reach £1.1bn, up from £967m, while employee numbers were up 12 per cent to 2,200.

The results have led Redrow to update its medium-term guidance, with the company now expecting turnover of £2.2bn by 2020, along with pre-tax profit of around £430m. Its dividend is also due to increase to 32p per share by 2020.

Mr Tutte said the 2020 forecast was “clearly ahead” of its previous guidance, which went as far as 2019, and added that he did not expect “a huge impact” from the UK’s upcoming exit from the EU because of strong demand for housing.

He added although the housebuilder was concerned about labour supply, he had not seen EU workers “deserting [Redrow] sites at all”.

“We’re maintaining our level of EU labour, and I’m sure in the end sense will prevail and everybody will realise [EU workers] make a huge and important contribution to the UK housing and construction sectors.”

Redrow also revealed that chairman Steve Morgan would step back into a non-executive chairman role, and will begin the transition from his executive role during the current financial year.

“Eight years after returning to Redrow, I have decided to ease back from a full-time executive role towards a non-executive role,” Mr Morgan said.

“The transition is to take place during the current financial year. It is my intention to continue to focus with the board on the strategic development of the business and I will retain my keen involvement with the product and key important projects.”

City analysts welcomed the housebuilder’s results, with Liberum upgrading its estimates for the company by 5-6 per cent for its 2018 and 2019 financial years.