Defining our strategy

Our strategy, set out in 2011, has been focused on driving sustainable value through the housing cycle and delivering enhanced margins and returns, whilst continuing to invest in the future profitability and quality of the business.

Having operated the strategy successfully for five years, in 2016 we began a process of challenging ourselves and the strategy as part of a wider strategy review process. Following a comprehensive review process, we have concluded that the principles of our current strategy remain right for the future, and we are confident that they will continue to create the best long term value for all of our stakeholders.
Moreover, we believe that we can deliver enhanced value through the housing cycle and benefit shareholders by driving the outputs of our strategy in three main areas:

•   Dividend Policy

•   Increased medium term financial targets (2016-2018)

•   Further continuous operational improvement


Strategic Targets

Our long term
strategic targets
Medium term targets
(2016 to 2018)

Deliver at least a 15% return

on net operating assets** through the housing cycle

An average annual return on net operating assets** of:


Return on net operating assets** of:


Earn top quartile

operating profit* margin

An average operating profit* margin of


Operating profit* margin


Grow net assets by 10% per annum

on average through the housing cycle (including returns to shareholders)

Total dividends to be paid in cash to shareholders over the period


Total dividends returned


How we deliver on our strategy
through our business model


Delivering Customer Service

Through our renewed customer service approach we aim to help our customers make our houses their homes.


Progress in 2016

Customer service remained a key priority during 2016. This is reflected in our new Working Together approach, which sets out our mission to create great places to live and deliver excellent service. We continued to embed our customer approach through training and guidance for employees such as our Customer Journey Manual, Home Quality Inspection Guide and Customer Service Manual. All employees working in our Customer Service Teams have been trained on our Customer Journey process. We have launched a series of Training Academies to help further develop the skills and capabilities of our customer-facing teams.



Customer satisfaction

Priorities for 2017

Strive to improve our customer satisfaction scores. Launch our online Customer Portal to strengthen customer communication and interaction. Launch our Academy of Customer Excellence (ACE) training programme.

Selecting land

Our aim is to complete our transition from homebuilder to a value creating developer.


Progress in 2016

Our future profitability is underpinned by our short term landbank of c.76k plots with 65% sourced from the strategic land pipeline. In 2016, 51% of completions were built on land previously sourced from the strategic pipeline.



Strategically sourced completions


Owned and controlled plots with planning or resolution to grant planning

Priorities for 2017

Continue to work with land vendors, communities and local authorities to convert land from the strategic pipeline into the short term landbank. Focus on ‘land light’ structures and active management as we continue to drive a higher return on capital employed. Continue to focus on selecting the right land and developing it in a sustainable manner.

Managing the planning and community engagement process

We aim to be the industry leader in all aspects of planning enabling us to respond to a dynamic market and customer base and to deliver quality homes while meeting financial objectives.


Progress in 2016

In 2016, we contributed £363 million to the local communities in which we build across the UK via planning obligations, providing, for example, local infrastructure, affordable homes, public transport and education facilities (2015: £335 million).



Plots converted from the strategic land pipeline to the short term landbank

Priorities for 2017

Continue to maintain best practice community engagement. Continue to investigate ways to engage with a wider and more diverse range of people within the local communities in which we operate.

Getting the homebuilding basics right

We work with our suppliers and build using carefully sourced materials to ensure that the homes we sell today and tomorrow are of high quality, and are built safely, efficiently, cost effectively and with minimal environmental impact.


Progress in 2016

We strengthened our quality assurance processes during 2016 to ensure we consistently achieve a high-quality build and get things right first time for customers. We continued to engage with our suppliers with regards to Project 2020 and to test new approaches to design, technology, materials and construction techniques. We have reduced our carbon emissions intensity by 24% since 2013.



Annual Injury Incidence Rate

Priorities for 2017

Improve or, as a minimum, maintain the same Annual Injury Incidence Rate (AIIR) achieved in 2016. Introduce a range of standard apartment types. Integrate anti-slavery clauses into our supplier framework agreements and contracts.

Our People

We aim to attract and retain the best people by engaging with our employees and investing in training, development and rewards.


Progress in 2016

We introduced an improved flexible benefit package for all employees and a new approach to flexible working, with maternity, paternity and adoption policies significantly enhanced. Our Senior Management Team presented an update on our business strategy via a series of roadshow sessions across the country, available to all of our employees.



Voluntary employee turnover

Priorities for 2017

Launch our diversity and inclusivity e-learning module for all employees, and our Code of Conduct, which will be updated with our new brand. Update our appraisal framework to assess employees on how they live our values.

Optimising value

We look to optimise the value of each site not only during the initial acquisition process, but throughout the lifetime of the development. This philosophy extends to our wider partnerships.


Progress in 2016

In the year, we achieved a 2.5 percentage points margin upside on completions from land acquired since 2009, compared with the expected margin at the point of acquisition. We further increased contribution per completion by over 10%. In 2016 we introduced a new Volunteering Framework which provides employees with two full days or four half-days paid time off to support our network of charities or local community projects as volunteers.



Contribution per legal completion


Forward order book as a percentage of completions

Priorities for 2017

Continue to actively review every site and optimise new sales outlets prior to opening. Roll out our volunteering framework. Continue to focus on building a strong order book for the future.

* Operating profit is defined as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures.

** Return on net operating assets is defined as 12-month rolling operating profit divided by the average of the opening and closing net operating assets, which is defined as net assets less net cash less net tax balances, excluding any accrued dividends.