Pdf
RiskPotential impactStrategy/mitigation
Land

The inability to source, acquire, promote and dispose of land

The Group would not be able to generate profit and cash flow for the longer term

May have a detrimental effect on the financial position of the Group

The Group has an experienced management team with a strong track record in the industry which mitigates this risk

Planning

Increased complexity and delay in the planning process

The adoption of the Community Infrastructure Levy by local authorities

May impede sales and thus affect the rate of growth of the business

May have a detrimental effect on the supply and pricing of land being marketed by landowners

The Group undertakes extensive pre-acquisition due diligence on planning, technical and environmental issues together with acquiring housing sites identified in councils' Local Plans

Market

A severe fall in the housing market in the regions in which the Group chooses to operate

Inability to realise maximum value in a timely fashion

Adverse effect on land values

Adverse effect on the timing of sales

The Group ensures that its sites are in good locations thus providing some protection against any downturn in the market

Personnel

Loss of/inability to source high calibre, experienced staff

The Group would have difficulty growing the business in the highly competitive markets in which it operates

The Group maintains good morale in the workplace and sets remuneration packages at attractive levels

Interest rates

Significant upward changes in interest rates

May affect residential land prices as the demand for residential property would be affected

Would lead to increased borrowing costs and thus have a detrimental effect on profit

The Group mitigates any adverse exposure to interest rate changes by controlling its gearing and, if necessary, by using hedging instruments

Environmental

Unexpected contamination being found on a site

Liabilities in respect of decontamination works or fines for environmental pollution could affect the outcome of a project

The assessment of environmental risk is an important element of the due diligence undertaken when buying land. The Group uses reputable environmental consultancy firms to assist in this area

Regulation

Changes in legislation, Government regulations, planning policies and guidelines

May have a detrimental effect on the Group's business

The Group keeps abreast of potential changes in these areas and wherever possible allows for these in appraising its projects

Construction

Cost overruns

Material shortages

Delays

May adversely impact margins on housebuilding and increase the cost of infrastructure works

The Group tries to build strong relationships with main contractors and projects are reviewed frequently in order to mitigate these risks

Finance

The availability of bank funding for land acquisition

May have an adverse effect on the Group's progress

The Group continues to seek finance from alternative lending sources to improve its liquidity