Our strategy
Our integrated Group strategy
The Group focuses on the following key financial and non-financial objectives to deliver profitable sustainable growth
Description
Acquiring sufficient land at the appropriate margins and on the right payment terms is vitally important to support the Group’s aspirations for profitable growth. A key component of the Group’s wider strategy is strategic land, which provides the opportunity of acquiring land at higher margins via option agreements without being obliged to purchase.
Performance
We acquired 29 sites in 2024, our highest number since 2019. This resulted in a record 5,500 plots being added to the owned landbank with all sites being acquired at or above our desired hurdle rates. Furthermore, 45% of these plots originated from our higher-margin strategic landbank. This resulted in the owned landbank increasing to 12,219 plots (2023: 10,483 plots) and our landbank years improving to 3.3 times (2023: 3.0 times), within our previous guidance of 3.0 – 3.5 times. In addition, a new joint venture with Present Made at Houghton Conquest in Bedfordshire resulted in our joint venture landbank increasing to 759 plots (2023: 122 plots).
We continued to invest in longer term opportunities through new strategic land options and replenished those units acquired, leading to our strategic landbank remaining broadly in line with last year at 43,317 plots (2023: 43,293 plots). In 2024 the strategic land team secured 11 planning consents and submitted six applications. There remained a total of nine applications with local planning authorities waiting for determination at the end of the year.
* As at the end of December 2024
Looking ahead
The acquisition of St. Modwen Homes in January 2025 added another 3,541 plots to the owned landbank and 6,763 plots to the strategic landbank. We ended 2024 with 90 sites (2023: 82 sites) in the owned landbank which, together with the post year-end acquisition of St. Modwen Homes, should facilitate growth in sales outlets from 71 at the start of 2025 to over 100 by the end of the year. Accordingly, the land investment undertaken both organically and through M&A positions the Group for significant volume growth, subject to market conditions.
We plan to take advantage of the improving planning landscape by accelerating a number of planning applications for our strategic sites which will mean applications lodged for 20 sites, a significant increase on 2024.
Description
The Group is focused on providing high-quality homes that can be personalised by our customers to meet their needs, within sustainable and enduring communities. At the same time, we interact with customers in a variety of ways to suit their needs in an increasingly digital world.
Performance
There was an improvement in independently assessed quality metrics through National House Building Council (NHBC) Construction Quality Reviews (CQR) and Home Builders Federation (HBF) Customer Satisfaction scores. The CQR score increased to 4.7 (2023: 4.6) and the 8-week Customer Satisfaction score improved to 95% (2023: 92%). We have also seen a significant improvement in the 9-month Customer Satisfaction score which is at 84% currently and compares to 73% last year. However, we recognise there is further work to be done to improve the 9-month score.
We continued to invest in our digital systems including a new Customer Service App which provides our Customer Support Managers with real time information on the status of each home plot. We launched a dynamic email journey enabling customers to receive information relevant to their requirements more quickly. In the 3 months since launch, over 29,000 emails have been sent achieving an 8% click through rate, 10% higher than our standard CRM emails and resulting in 300 reservations thus far.
We have established a new role of Customer Service Manager where each customer has an allocated Miller contact for pre and post purchase.
Our ability to allow customers to select their home online continues to be well received, with 51% (2023: 56%) of our 2024 reservations initially made online.
* As at the end of December 2024
Looking ahead
In 2025, we aim to improve the customer experience both pre and post-purchase. We will launch a new customer website, which includes 3D interactive sitemaps and the ability to walk through each home, furnished as if it was a showhome. Our development sales centres will also be redesigned to incorporate large touch screens where customers can explore 3D interactive visuals and use digital tools to experiment with optional extras for their new home. Our post-completion customer journey will be enhanced to provide customers with regular updates designed to help them make the most of the first 12 months in their new home.
In addition, with the acquisition of St. Modwen Homes, we will be able to appeal to customers with a dual offering on our larger developments.
Description
We are focused on creating a better place for all our people by offering attractive health and wellbeing initiatives, putting safety first, being open and inclusive, and by helping people realise their full potential through training and development opportunities.
Performance
We established an Early Talent initiative and recruited 26 graduates and trainees across various functions. One of the key aims of this initiative is for participant numbers to exceed 5% of the overall workforce.
A new HR system was launched in 2024, enabling real-time access to holidays and training records, with improved onboarding. Our employee engagement survey achieved an 80% engagement score, and helped us to identify areas for improvement.
Having doubled the number of qualified mental health first aiders, we now have 90 staff members who are trained. We have built on partnerships with construction industry charity, The Lighthouse Club, and with Andy’s Man Club, and held 25 mental health support workshops attended by around 100 employees.
Increased resource and focus on training and development for all our people resulted in the number of training days improving to 4.1 days per person (2023: 3.1).
* As at the end of December 2024
Looking ahead
We are looking to further improve our employees’ experience at all stages of employment. At the start of employment - for those on our Early Talent programme, we have added additional modules on Mental Health and Financial Planning. And for those further on in their careers, we have a Pension’s Awareness workshop.
We will continue to expand our Leadership and Management Development programmes – again ensuring that there are programmes to support our employees regardless of what stage of career they are at – from ‘Stepping into Management’ for those preparing for their first management role – to ‘Inspirational Leadership’ with more focus on building strategic leadership capability amongst our senior leadership population.
We are aiming to retain our Investors in People accreditation at Platinum level to ensure all our employee processes are relevant and fit for purpose. Having launched our new HR System in 2024, we are aiming to expand on the self-serve options available to our employees to include Total Reward statements and access to benefits information.
Description
The land investment cycle typically spans a three-to-five year horizon, and so it is important to plan for changes to macroeconomic conditions and industry-specific legislation that could occur over this period.
Our strategy is to operate in mid-market regional locations, which are generally less susceptible to significant market movements. St. Modwen Homes operates in similar markets and thus is complementary to our existing strategy.
We aim to grow the business in a considered way, such that organic growth can be supported by the free cashflow generated, with targeted free cashflow of 50% of EBITDA over the medium term. The structure of the St. Modwen acquisition is such that the initial payment can be met from existing cash resources. The deferred consideration is due in July 2027 and capable of being funded from cash generated from the related St. Modwen assets as these are traded out over the 30 month post-acquisition period.
Performance
The planned expansion of our Partnerships model resulted in this tenure increasing to 24% (2023: 11%) of core volumes and with a 20% increase in private sales rate to 0.65 (2023: 0.52), provided both the cash and confidence to invest significantly in new higher margin land in the year.
Free cash of £137m (2023: £93m) was generated, representing 85% (2023: 58%) of EBITDA, notwithstanding the increase in net land spend to £174m (2023: £142m) in the year. This resulted in a year-end cash balance of £234m, enabling the initial payment in January 2025 for the St. Modwen Homes acquisition of £65m to be funded from existing cash resources.
* As at the end of December 2024
Looking ahead
During 2025 we plan to integrate the St Modwen business into our existing platforms and systems, ensuring that everyone is working to the same high standards. We will explore opportunities to dual brand on selected Miller and St Modwen sites to increase output over the short to medium term.
We have already prepared for the implementation of the Future Homes Standards which will come into force in 2025 albeit with a delayed implementation. We are confident with our preparation that we will meet timelines.
We are still seeing opportunities that will enable us to maintain the Partnerships model at around 25% of volumes which helps protect the business against market headwinds.
