Barratt Redrow plc

Okay, I think we're going to make a start. So first of all, good morning all and thank you all for coming. I know that for some of you it's unscheduled. So we're really conscious that there's a lot to get through. We're sure that there's going to be plenty of questions. So we're going to spend most of the time on the transaction announced today and clearly less time than we would normally do on results for both companies. So first of all, just in terms of introductions, we have people dialed in online who are not on our video. So with me is Stephen Bowers, Barrett's Chief Operating Officer and Deputy Chief Executive. Mike Scott, the CFO of Barrett, to my left, Matthew Pratt, Group Chief Executive of Redroll, and Barbara Richmond, the Group Finance Director of Redroll. So, as you'll see from the announcement this morning, in addition to our half-year results, we are really delighted to be announcing the recommended combination of Barrett and Redroll. The new company will be called Barrett Red Roll PLC and today we're going to be talking you through the details in the background to this really exciting combination and how it's going to help both businesses build together, how we're going to create a really exceptional UK home builder in terms of quality, service and sustainability. So moving on in terms of the running order for this morning. As I said, the first part of the presentation will focus on the creation of Barrett Red Roll PLC. Then we're going to have a short section on Barrett half-year results, which Mike will guide us through. And then Barbara will talk us through the Red Roll half-year results. And then we're going to move on to a joint Q&A. which I'm very, very much looking forward to chairing. And we're going to be aiming to try and leave as much time as possible for Q&A. But just to flag, and John Messinger will be keeping us on time, is that we are looking to close no later than 10. So please do think about that in terms of placing questions. So I just wanted to start by saying that I really strongly believe that the combination we've announced today is going to create a truly exceptional UK home builder. I think you all know that when you look at both businesses, we're hugely focused in terms of quality, service and sustainability. And really crucially, this is against a backdrop of a very significant shortage of high quality homes in the UK. So the combination is going to allow us to accelerate the delivery of the type of homes that the country needs. Underpinning the future success of Barrett Red Roll is our combined portfolio of what are clearly very highly respected and differentiated brands. Barrett, David Wilson and Red Roll. This is going to enable us to drive output across our combined pipelines and what is clearly a complementary footprint. And I think Matthew's going to give us a few thoughts on it.

Thank you, David. I mean, clearly from this is an important moment for our two businesses. We're two well-regarded house builders within the UK. And like us, Barrett is committed to quality, service and sustainability. We are both innovators, and this is an opportunity to realise significant cost synergies. The combination will give us the opportunity to share best practice across everything we do. And finally, I think both businesses are already highly regarded in the market, and working together will only improve that.

Thanks very much, Matthew. And so on to the next page, we're setting out the headline terms of the transaction, which is recommended by both boards. So it's an all-share combination where each Redroll shareholder will receive 1.44 new Barrett shares for every Redroll share they own. The offer values the equity of Redroll at approximately 2.5 billion. Following completion, Red Row shareholders will hold 32.8% of the combined group, and Barrett shareholders will hold 67.2% of the combined group. We expect to achieve pre-tax cost synergies of at least £90 million on an annual run rate basis by the end of the third year following completion. And we're going to cover that in a little more detail later, Mike is saying. We expect the transaction to be accretive to both Barrett and Redrose adjusted earnings per share in the first year after completion, excluding the one-off costs of delivering the synergies. I just also note, and I know that he is here this morning, and I just note that the transaction has the full support of Steve Morgan, Redrose founder, and a very significant shareholder in the Redrose business. So we've said we both, Barrett and Redrell, believe that the combination is really compelling. It's going to help us to address the country's housing shortage. We are going to create a really exceptional home builder. Quality service and sustainability are clearly so important. But also it's important that we do accelerate delivery of high quality homes through the three brands. We've identified the opportunity to realise cost synergies and Mike's going to talk through that in the presentation. But we also believe that based on our strong track record of integrating other businesses and brands, that we can achieve this integration both rapidly and efficiently. Within a cyclical industry, this combination will maintain a robust balance sheet and will be better protected to operate through the cycle and it's going to be a strong platform for us to deliver improved shareholder returns over the medium term. And finally, we do believe that the combination of Barrett and Redroll will deliver significant benefits for other stakeholders. Firstly, our highly skilled and dedicated employees within both groups, our suppliers, our other partners, and most importantly, our customers, who are going to have access to a wider range of homes at more price points. And Stephen will talk us through more about how good a fit the combination is going to be.