Annual Report and Accounts 2011

Our vision

We aim to become the UK’s leading residential developer for creating value and delivering quality.

Our strategic objectives

In line with the evolution of our strategy, we will measure our success against an amended set of strategic KPIs:

  • Driving further UK operating margin* progression beyond 2011
  • Delivering at least a 15% return on net operating assets** through the cycle
  • Growing net assets by 10% per annum on average through the cycle

UK operating margin*(a) (%)
 

Graph displaying the UK operating margin from 2010 - 2011 in percentage

Group return on net operating
assets** (%)

Graph displaying the Group return on net operating assets from 2010 - 2011 in percentage

Tangible net asset value
per share*** (p)

Graph displaying the tangible net asset value per share from 2010 - 2011 in pence

Our approach

In order to achieve these strategic objectives, we need to deliver enhanced value from each component of our value cycle. The table below provides a description of each component of the value cycle, the strategy that we employ to deliver enhanced value and the operational KPIs that we monitor to measure our success.

 Simply the best people Selecting land Managing the planning and community engagement process Caring about our customers Getting the home building basics right Optimising value

Please click on the different sections of Our value cycle above for more information

Components of the value cycle

Land is the critical ‘raw material’ for our business and the ability to purchase the right sites in the right locations at the right price is a key driver of shareholder value.

Our strategy to deliver enhanced value

We are highly selective with regard to the types of sites that we buy, focusing on the quality of the land rather than the number of plots acquired. We employ dedicated land teams in each of our 24 regional businesses, who use their expertise and local knowledge to identify potential high quality, sustainable sites. Our regional businesses are also supported by our strategic land teams who operate throughout the UK and are tasked with identifying areas where population growth, or other local demand, could create opportunities to promote land through the planning system. The importance we place on effective partnerships, along with our expertise and track record for delivering planning consents, makes us an attractive partner for landowners.

Our UK operational Key Performance Indicators

KPI

Owned and controlled
plots with planning
65,2642010: 63,556

Contribution per legal completion (£K)
28.62010: 22.9

Components of the value cycle

Designing a sustainable community that meets the needs of local residents, is attractive to potential customers and provides attractive returns for shareholders requires a consultative and iterative process of community engagement.

Our strategy to deliver enhanced value

We believe that a positive and structured approach to working with others is at the heart of a successful scheme. Residential development is a local business and we work in partnership with the communities in which we build to deliver homes that meet their requirements and aspirations. We are rolling out a continuous process of community engagement over the lifetime of each development, which will enable us to identify the best use of each site to meet the needs of local residents, to deliver appropriate financial returns for our shareholders, to ensure that we have a mix of homes that meet local market demand and that the site is optimised for safe, efficient and considerate development.

Our UK operational Key Performance Indicators

KPI

Contribution per
legal completion (£k)
28.62010: 22.9

Health and safety
incident rate
3782010: 557

Components of the value cycle

We work with selected sub-contractors and build using carefully sourced materials to ensure that the homes that we sell are of a high quality and are built safely, efficiently, cost effectively and with minimal impact on the environment.

Our strategy to deliver enhanced value

We are committed to providing a safe place in which our employees and sub-contractors can work. We are also committed to high standards of environmental management. The building process is carefully managed by our site-based and regional production teams to ensure quality, minimise disruption to residents in the surrounding areas and to protect and enhance the value of each site.

Our UK operational Key Performance Indicators

KPI

Health and safety
incident rate
3782010: 557

Waste generated
per 1,000 square feet built (tonnes)
3.442010: 4.18

Components of the value cycle

Buying a home is a significant financial and emotional investment. We aim to make buying, moving into and living in a Taylor Wimpey home as easy as possible for our customers.

Our strategy to deliver enhanced value

No matter what the size or price of a property, for each customer the home that they are buying is aspirational to them. We will maintain our focus on delivering high-quality homes and a consistently excellent ‘Customer Journey’ to all of our customers. We continue to make improvements to our on-line capabilities, including our Web site and use of social media such as Facebook and Twitter.

Our UK operational Key Performance Indicators

KPI

Customer
satisfaction score (%)
92.12010: 87.1

Forward order book as a
percentage of
completions (%)
53.12010: 47.2

Components of the value cycle

Developing sustainable homes and communities is a time-consuming process, but this provides us with the opportunity to undertake regular reviews over the life of each development to identify potential improvements.

Our strategy to deliver enhanced value

We look to optimise the value of each site not only during the initial acquisition process, but throughout the planning and development stages so that the original value is not only protected but enhanced. We achieve this by undertaking a series of thorough reviews of each site at all stages of its lifecycle, using our value improvement and tracking processes to ensure that we are continually optimising and delivering the value within our land portfolio.

Our UK operational Key Performance Indicators

KPI

Contribution per legal
completion (£k)
28.62010: 22.9

Components of the value cycle

This value cycle requires significant input from skilled and committed people to deliver aspirational, high-quality homes and communities for our customers.

Our strategy to deliver enhanced value

We want to be the residential developer of choice for employees. We want to attract and retain the best people by having a culture that people identify with, where they can realise their full potential and achieve success and satisfaction. We will continue to seek a balance of internal and external appointments, in order to combine career development with the introduction of new perspectives and innovative approaches.

Our UK operational Key Performance Indicators

KPI

Employee turnover (%)
102010: 9

  • *Profit on ordinary activities from continuing operations before finance costs and exceptional items, after share of results of joint ventures.
  • ** Operating profit divided by the average of the opening and closing net operating assets, which is defined as capital employed plus intangibles less tax balances.
  • *** Tangible net assets per share is defined as net assets, excluding goodwill and intangible assets, divided by the number of shares in issue at the period end.
  • (a) 2010 comparative excludes a one-off pension curtailment credit of £12.0 million in the UK.

© Taylor Wimpey plc 2012