Annual Report and Accounts for the year ended 31 December 2023
Group strategic priorities
The Group set a medium-term strategy in 2021 to grow the size of the business through a 40% increase in capital employed to over £500m and a targeted focus on three key markets: Industrial & Logistics (I&L), Residential and Urban Development, while maintaining ROCE within a 10-15% range.
Our key metric of capital employed has risen to £417m (2022: £399m), and our ROCE at 9.9%, when rounded, was within our targeted range of 10-15%. Over the last two years we have delivered a ROCE of 10.8% p.a. which we believe to be a very credible performance given the decline in commercial property and land values of 22.1% and 8.6% respectively, from their mid-2022 peaks. We maintain our belief that we can achieve our main medium-term target of £500m capital employed, whilst continuing to generate attractive returns.
Key Strategic Pillars for 2023
Our strategy is shaped by four key strategic pillars and focuses on three long term markets:
Safety and Environment
We aim to be the safest place to work in our markets and be respectful to our environment
Growth
Grow capital employed to £500m by investing in our three key markets
Delivery
Adopt emerging working practices, investing and collaborating to deliver our operational targets
People
Open, progressive, high performing business governed by clear objectives which engages a diverse range of talent
Long-term Markets
Industrial & Logistics
Residential
Urban Development
Value Delivery
Property Development & Investment
Land Promotion
Home Building
Construction
Returns
Grow Capital Employed to over £500m + Target ROCE 10–15% +
Maintain a progressive dividend policy
Responsible Approach
People Strategy + ESG:
Risk
Optimum gearing of 10–20% + minimum 65% committed development
programme pre-let/pre-sold
OUR KEY PERFORMANCE INDICATORS
Capital Employed
Aim for 2024
To maintain capital employed growth in line with strategic target
Medium-Term Target
£500m
Link to Strategic Pillars and Group Risk
Strategic Pillar
ROCE
Aim for 2024
To be around the lower end of stated target range, however we maintain our aim to be within 10-15% through the cycle
Medium-Term Target
10-15%
Link to Strategic Pillars and Group Risk
Strategic Pillar
Plot Sales
Aim for 2024
To exceed the current five year average of 2,850 plots pa
Medium-Term Target
c.3,500 pa
Link to Strategic Pillars and Group Risk
Strategic Pillar
Development Completions
Aim for 2024
In the current market, the committed programme has been reduced; however, we have optionality to build it back up from our future pipeline of £1.3bn
Medium-Term Target
c.£200m
Link to Strategic Pillars and Group Risk
Strategic Pillar
Investment Portfolio
Aim for 2024
To maintain progress towards stated target
Medium-Term Target
£150m
Link to Strategic Pillars and Group Risk
Strategic Pillar
Unit Completions
Aim for 2024
Continue to target increased annual output in 2024, albeit at a slower growth rate at 275 homes
Medium-Term Target
c.600 units
Link to Strategic Pillars and Group Risk
Strategic Pillar
Order Book Secured
Aim for 2024
In response to securing below target for 2024, the opportunity pipeline has been refocused, with £50m PCSA’s in progress
Medium-Term Target
>65%
Link to Strategic Pillars and Group Risk
Strategic Pillar
Accident Incident Rate
Aim for 2024
To reaffirm our robust health and safety approach, whilst launching new initiatives that will be implemented throughout 2024 to mitigate further incidents
Medium-Term Target
<395
Link to Strategic Pillars and Group Risk
Strategic Pillar
GHG Emission CO2e
Aim for 2024
To continue implementing NZC strategy across the Group
Medium-Term Target
20% reduction
Link to Strategic Pillars and Group Risk
Strategic Pillar
Employee Net Promoter Score (eNPS)
Aim for 2024
To address feedback that has arisen from the survey
Medium-Term Target
40 (eNPS)
Link to Strategic Pillars and Group Risk
Strategic Pillar
L&D Interventions Delivered (per employee)
Aim for 2024
To continue implementing a wide range of training opportunities to support a high performance culture
Medium-Term Target
4 days (per employee)
Link to Strategic Pillars and Group Risk
Strategic Pillar
Key to Strategic Pillars
People
Partners
Places
Planet
Performance
Key to Group Risks
1 Safety
2 Environmental & climate change
3 Economic
4 People & culture
5 Funding
6 Cyber
7 Pensions
8 Construction contracts
9 Property assets
10 Property development
11 Land sourcing
12 Land demand
13 Political
14 Housebuilding
Capital Employed
Aim for 2023
To maintain capital employed growth to over £400m
Medium-Term Target
£500m
Link to Strategic Pillars and Group Risk
Strategic Pillar
ROCE
Aim for 2023
To be within stated target range
Medium-Term Target
10-15%
Link to Strategic Pillars and Group Risk
Strategic Pillar
Plot Sales
Aim for 2023
To exceed current five year average
Medium-Term Target
c.3,500 pa
Link to Strategic Pillars and Group Risk
Strategic Pillar
Accident Incident Rate
Aim for 2023
To maintain our robust health & safety approach and procedures
Medium-Term Target
>395
Link to Strategic Pillars and Group Risk
Strategic Pillar
GHG Emission CO2e
Aim for 2023
To empower our people and partners to share knowledge and solutions to reduce GHG emissions
Medium-Term Target
20% reduction
Link to Strategic Pillars and Group Risk
Strategic Pillar
Employee Net Promoter Score (eNPS)
Aim for 2023
To continue engaging with the Group Employee Forum and address feedback which has arisen from the survey
Medium-Term Target
40 (eNPS)
Link to Strategic Pillars and Group Risk
Strategic Pillar
