Key Performance Indicators
Definition and performance
Definition
This represents revenue that is predominantly generated through the sale of new private, affordable and partnership homes; and to a lesser extent, revenue from the sale of land, where it is capital-efficient to sell a portion of larger sites; and revenue from external sales generated by Walker Timber.
Performance
Revenue decreased by 13% in 2023 due mainly to an 11% reduction in core completions, which was as a result of weaker market conditions, with sales outlets broadly stable.
Definition and performance
Definition
This represents revenue from new home sales, divided by the total number of core completions. In line with standard accounting practice, this excludes revenue from homes sold through joint
ventures, the profit on which is shown within “share of result in joint ventures”. It measures movements in revenue per unit caused by house-price inflation, location or mix changes.
Performance
ASP increased marginally to £287,700 (2022: £286,500), despite the proportion of higher-value private-home completions falling to 70% (2022: 74%). Private ASP was 1% ahead at £341,300
(2022: £337,700). This compared to increases of 12% and 13%, respectively, in the ASPs of affordable homes and partnership homes to £157,700 (2022: £141,000) and £171,400 (2022: £151,200), respectively.
Definition and performance
Definition
This represents gross profit, excluding exceptional items, divided by revenue. It measures the Group’s underlying profitability before administrative expenses.
Performance
The reduction in 2023 was mainly because of the impact of cost inflation of around 3%, which, unlike previous years, we could not mitigate through increased selling prices.
Definition and performance
Definition
This represents operating profit, excluding exceptional items, divided by revenue. It measures the Group’s underlying profitability after administrative expenses.
Performance
The reduction in 2023 principally reflects lower gross margins as explained previously, and lower recoveries of administrative expenses. In relation to the latter, while they were relatively flat year on year in absolute terms, the reduction in completions and, in turn, revenue, resulted in administrative expenses as a percentage of revenue increasing to 6.8% (2022: 5.8%).
Definition and performance
Definition
This represents operating profit excluding exceptional items, expressed as a percentage of average tangible capital employed, which is the average of the opening and closing balances of tangible
capital employed for each financial year. Tangible capital employed of £678.7m (2022: £628.2m) represents net assets of £585.8m (2022: £537.1m) excluding loans and borrowings of £798.3m (2022: £801.0m), cash of £194.2m (2022: £189.8m), lease liabilities of £7.6m (2022: £8.3m), intangibles of £551.7m (2022: £551.7m), a foreign exchange swap asset of £10.1m (2022: £19.7m) and deferred tax on intangible assets of £43.0m (2022: £43.0m).
Performance
The decrease in the year reflects a 28% decrease in operating profit preexceptional items combined with a reduction in capital turn (as defined by revenue divided by average tangible
capital employed) to 1.6 times (2022:1.9 times). This reflected the impact of lower sales rates and increased inventory levels.
Definition and performance
Definition
This represents cash generated in the year of £4.4m excluding cash flows from financing activities of £3.5m, investing activities (other than movement in loans to joint ventures) of £1.3m, corporation
tax paid of £16.9m, interest paid of £66.4m and transaction costs.
Performance
Free cash generation of £92.5m was down on the prior year figure of £151.6m. Free cash generated in the year equated to an EBITDA conversion ratio of 58%, which is higher than the Group’s medium-term target of 50%.
Definition and performance
Definition
This represents the number of reservations (net of cancellations) for private homes (including those sold via joint ventures), divided by the average number of sales outlets and further divided by the number of weeks in each financial year.
Performance
The private sales rate fell by 13% in 2023 and is also similarly lower than our average sales rate over the last ten years (excluding the 2020 – 21 COVID-19 period). This reduction was largely caused by a subdued start to 2023 as a consequence of the more challenging sales conditions in Q4 2022 following the September 2022 mini-budget.
Definition and performance
Definition
This represents land from the Group’s owned and controlled landbanks. All land in the consented landbank benefits from at least an outline planning consent, or a resolution to grant planning consent.
Performance
The owned landbank fell by 2% to 10,483 plots (2022: 10,724 plots). Although we re-entered the land market in early 2023, negotiations with vendors were protracted as we sought to secure favourable terms. This resulted in a relatively modest number of purchases in 2023 at 17 sites, but has led to a significant pipeline of acquisition opportunities for 2024. The controlled landbank increased slightly to 3,577 plots (2022: 3,190 plots), resulting in an overall consented landbank of 14,060 plots (2022: 13,914 plots).
Definition and performance
Definition
This represents land the Group has secured via either an option to purchase at a future date or a promotion agreement triggered on receipt of an implementable planning consent. The land currently does not benefit from a planning consent, although it may have been allocated for residential development in the relevant local plan.
Performance
The strategic landbank increased to 43,293 plots (2022: 39,203 plots) as the Group sought to underpin its medium term growth aspirations. The increase largely reflected the impact of new option agreements entered into during the year offset by site acquisitions with the associated plots transferred to the owned landbank.
Definition and performance
Definition
This represents the value of new home reservations and contracts exchanged at each financial year end, which are anticipated to result in core and joint venture completions in the following 12-month period.
Performance
Forward sales decreased by 9% to £437m (2022: £481m). The reduction in the year reflected the unwinding of an abnormally high opening position that had accrued over the previous two years following increased demand and supply constraints caused by COVID-19. The 2023 year-end balance of £437m is still significantly ahead of the last pre-pandemic year, in 2019, of £328m.
Definition and performance
Definition
This represents an external assessment performed by the National House Building Council (NHBC) on behalf of the Home Builders Federation (HBF), and measures our customers’ overall satisfaction with both the quality of their new home and the service provided.
Performance
The Group redesigned its customer journey processes during the year and, in March 2023, was awarded the HBF five star rating for customer satisfaction for the 12th time in the last 13 years.
Definition and performance
Definition
This represents the total number of accidents reportable (AIR) under RIDDOR as expressed by 100,000 employees and subcontractors.
Performance
There was a 39% improvement in the AIR score in the year, which was attributed to a concerted engagement strategy between site management teams and subcontractors aimed at reducing the
number of reportable accidents.
Financial Group Summary
|
2023 £m |
2022 £m |
2021 £m |
2020 £m |
2019 £m |
|
|---|---|---|---|---|---|
| Group revenue | 1,015.9 | 1,169.0 | 1,045.8 | 664.8 | 841.4 |
| Gross profit* | 223.5 | 282.5 | 261.6 | 156.7 | 210.7 |
| Operating profit before financing costs* | 157.1 | 217.3 | 203.6 | 114.8 | 167.9 |
| Operating margin* | 15.5% | 18.6% | 19.5% | 17.3% | 20.0% |
| Profit before tax* | 77.0 | 144.3 | 156.1 | 64.4 | 122.1 |
| Net assets | 585.5 | 537.1 | 496.1 | 378.6 | 332.1 |
| Net external debt | (601.6) | (599.8) | (241.4) | (200.9) | (251.5) |
| Capital employed (excluding intangible assets) | 678.7 | 628.2 | 595.5 | 588.1 | 578.0 |
| Return on capital employed* | 24.0% | 35.4% | 34.4% | 19.7% | 30.5% |
| Unit sales | |||||
| Core completions | 3,475 | 3,921 | 3,775 | 2,544 | 3,328 |
| Total (including joint ventures) | 3,585 | 3,970 | 3,849 | 2,620 | 3,498 |
| Average selling price (£'000) | 288 | 286 | 275 | 261 | 249 |
The figures above represent the results of Miller Homes Group (Finco) plc for 2023 and 2022. 2022 figures represent full year pro forma figures. The figures for 2019 to 2021 above represent the results of Miller Homes Group Holdings plc. * Pre-exceptional items