Uncertainty arising from policy, law or tax changes after the EU vote and government changes could affect both consumer demand and regulations in the market

Higher unemployment or fear of unemployment could undermine consumer confidence and reduce enthusiasm for purchasing a new home or the ability to secure a mortgage

Maintain review of economic and political environment and consider potential responses to changes in trading conditions

Consider exposure to specific areas (e.g. London) and broaden portfolio in more affordable areas

Returns on our strategic land holdings could be undermined; site starts could be delayed

Cascade s106 mechanisms to restore viability and continue to develop a balanced portfolio

Cash resources may be over-committed, leading to business disruption, reputational issues, covenant

breaches, dividend loss and stakeholder dissatisfaction

Robust cash management and borrowing/spending controls

Access to funding and use of alternative payment mechanisms

PRS offering potential for early cash generation

Increased build costs absorb

or exceed higher sales prices

Margin squeeze disappoints

Investors

Delivery uncertainty, as suppliers seek to 'price in' sales price inflation

Use alternative suppliers and

production methods

Robust contract arrangements to control costs

Leverage volume through long-term partnerships with strategic suppliers

Delays in obtaining planning consents and operational starts

Land becomes unviable due to increased planning cost burden

Work closely with key regulators and national/local

decision makers

Regularly review the Strategic Land Portfolio to accurately forecast operational starts

Seek prior planning approval on significant projects

Influence new CIL viability testing and appraise costs

Unreliable forecasting and sudden cost changes can erode margins

Pressure to maintain margins

and control costs can impact

on product quality

Regular cost forecast reviews

and increased standardisation in cost reporting

Early budget uploads and greater adherence to Agresso procedures

Quality standards set, met and reviewed

Theft of personal and/or business data

Subject to external financial crime

Disruption to IT services, affecting business operation

Robust virus protection and

internet security

Web checking of internet

traffic

Robust server set-up and

annual cyber security breach tests

Education of employees on

cyber security vulnerabilities

and encryption of data

Planning delays are likely

as local authorities balance

affordable provision

and viability

Distortions in sales activity

as purchasers seek to

secure windfalls resulting

from policy

Cash flow and ROCE

implications of reduced

upfront affordable housing

funding; increased macroeconomic

risk

Identify and prioritise most

complex aspects of current

draft and seek further

amendment or clarity

Seek to move back towards

original provisions, i.e. use

of previously unallocated

brownfield and 100% starter

home offers

Work with HBF to establish a

common understanding and

set of proposals with other

HBF members

A reduction in size or

eligibility criteria could

reduce overall mortgage

access impacting demand,

sales values and rates of

sale, which could undermine

confidence in the market

There are alternative incentives but these are less compelling

Maintain policy-maker

awareness of construction sector economic contribution and need for first-time buyer incentives

High quality sales training to

increase resilience and prepare for a tougher market

Cost over-runs on complex

projects can affect margins

Latent defects can generate

extra costs and reputational

damage, where new

materials and systems have

been deployed

Heightened expectations can

result in rushed projects and

subsequent problems

Project Committee oversight

and risk-based review by the

Group Technical Director

Consultative and partnership

approach at planning/

designing stage

Robust Crest Nicholson

project management

New hurdle rate matrix

addressing complexity and

other risks

Increased focus on re-use of

house types

Cost of remediation in time

and money

Loss of focus on more strategic activity and a lack

of staff morale as pride in job

is affected

Robust inspection process and use of Priority 1 monitoring to ensure an efficient approach

Penalties for sub-contractors in cases of poor workmanship

Launch of Making Customers

Feel Special and Valued learning programme

Shortages of key staff in

critical business areas

can introduce cost, delays

in bringing developments

forward or quality issues,

which can undermine

shareholder confidence and

erode customer satisfaction

Increased employee turnover

can create instability

and uncertainty

Skills and experience lost,

including through retirement,

are difficult to replace and

loss of knowledge within

the business can affect

overall efficiency

Ensure competitive pay, benefits, incentives and bonuses

Improved succession planning in place, with formal succession plans drawn up

Maintaining strong apprentice

and graduate programmes

Executive management and

coaching creating more internal candidates

Injury or potential loss of life

Remediation costs

Loss of projects and associated revenues

Damage to Crest Nicholson

brand

Potential civil or criminal

prosecution

Board leadership and scrutiny of health, safety and environment

Raising profile of health and

safety across the Group and

setting objectives annually

New approaches trialled prior

to wider roll-out and product

quality guidelines agreed and monitored

Training for all employees

and awareness of industry

product debates

Supply chain issues constrain output and impact

on business performance

Adverse customer

experience as build

completion forecasting

is difficult and subject to

variation, which could mean

mortgage offers expire

and further delays to

legal completions

Dialogue with major suppliers

to help with advance planning and call-off by divisions

Spread risk across suppliers,

e.g. kitchen supply-and-fit contracts

Examine alternative production approaches, e.g. timber frame as opposed to blocks, and offsite manufacture

Maintain strong apprenticeship programme and encourage suppliers to do the same