Few chief executives could rival Taylor Wimpey’s head honcho Pete Redfern’s recent record of turning potential PR disasters into triumphs.
Plaudits came pouring in from business commentators, including BBC Radios 4 and 5 Live and the broadsheets, after the UK’s second-largest housebuilder by volume announced at the end of July that it was to set aside £30m to replace flammable cladding on some of its homes in the wake of the Grenfell Tower fire just over a year earlier.
In the group’s half-year results release, Redfern stated that the group had opted to pay for the recladding rather than contest culpability – as a few developers have – because it was “morally right, not because it is legally required”.
A few months earlier, TW was first off the blocks among its peers when it took a £130m provision effectively to compensate homeowners who had unwittingly signed up to spiralling ground rents.
In both cases, Redfern, no doubt with the counsel of external advisers, observed arguably the first rule of PR: be on the front foot. It’s better to pre-empt a media storm before the media even arrive. (Having £812m of annual pre-tax profits no doubt helps to sugar the pill.)
Rivals that haven’t yet taken a hit huffily point out that TW’s projected ground rent rises were far more aggressive than theirs, doubling every 10 years. Others, such as Barratt, have quietly agreed to replace cladding, without the public credit. However, as most PR executives will attest, perception is everything.
Feedback has been so positive that Purplebricks now has a ‘Mumsnet approved’ badge
Virtual estate agent Purplebricks has adopted a more pugnacious stance with the media, regulators such as the Advertising Standards Authority and critical sector analysts since it floated in 2015. Bizarrely, the most hostile critics appeared to have been members of mumsnet.com (don’t ask why I’m signed up). One thread of comments I followed included shocking claims made by one mum of alleged shoddy treatment at the hands of one of Purplebricks’ ‘local property experts’.
In a change of approach, Purplebricks offered free sales packages to 10 Mumsnet members plus a £50 voucher in April. The only stipulation was that they shared feedback on a Mumsnet thread by filling out a survey as the process went along. According to Property Industry Eye, all 10 free offers were taken up and the feedback has been so positive that the £890m market cap company now has a ‘Mumsnet approved’ badge.
The benefits of smart PR are not only the preserve of stock market listed companies. Innovative ‘affordable private’ homes developer Pocket Living may have only built some 600 homes to date, but the generally glowing column inches from the FT, The Times, property press and numerous others could probably carpet the London-focused company’s 38 sq m average one-bed starter flat. Developers that complete in a single year some 20 times Pocket’s cumulative number of homes don’t come close.
The upshot of all this non-stop PR is that a trip to a Pocket development is virtually de rigueur for incoming housing ministers (there have been many) and London mayors (both Boris Johnson and Sadiq Khan have helped fund Pocket, which sells at a 20% discount to market rates to buyers who make an undertaking to sell at the same percentage reduction to the next occupant).
Public image limited
PR may have become much slicker in the housing sector in recent years, but not all housebuilders appear over-exercised by their public image. Take Persimmon for instance. Directors faced sustained opprobrium from politicians and the media for their eye-watering incentive packages, worth tens of millions of pounds. Critics, including peers on rival boards, complained in particular that the share-price-based payouts were uncapped, while others claimed that the profitability and cashflow they were based on was partly fuelled by the government’s Help to Buy incentive scheme.
Supporters pointed to the share price: since the company announced in February 2012 its programme to return £1.8bn in enhanced dividends to shareholders (subsequently lifted to £4.1bn), the stock has risen 383%, while the FTSE 100 has delivered more pedestrian 27% growth. After weeks of almost daily censure in the press, the board eventually gave some ground on the total value of their packages.
I guess their decision wasn’t made in quite the same spirit as Redfern’s maxim. Rather, the approach seems more grounded in the Millwall FC school of PR. To paraphrase the south London club’s unofficial anthem, ‘no one likes us [except our hugely happy shareholders], we don’t care’.
Alastair Stewart is an equities analyst and consultant
No comments yet