We monitor performance against our strategic objectives through the following Key Performance Indicators (KPIs)

Profitability and efficiency
Definition
Why we measure it
Total profit before tax £40.1m
Definition

Total profit before tax is defined as IFRS profit before tax plus the Group’s share of profit before tax from its joint ventures.

Why we measure it

Total profit before tax demonstrates the overall underlying profitability of the Group across all developments. This key metric is also used to determine Board and senior management bonuses.

Adjusted operating margin 13.1%
Definition

Adjusted operating margin is calculated as the total operating profit, adjusted for interest expensed through cost of sales, divided by total revenue, expressed as a percentage.

Why we measure it

Adjusted operating margin demonstrates how efficiently the business is being operated.

Growth and risk
Definition
Why we measure it
Development pipeline £1.6bn
Definition

Development pipeline is defined as revenue substantially under our control, including the Group’s share of joint venture revenue, to be recognised in future years.

Why we measure it

The availabiliy of land is a key input of our business and we continually monitor our development pipeline to ensure we have sufficient land to deliver on our growth strategy.

Average individual sale price in pipeline £552k
Definition

This is the average revenue expected across all of the individual sale homes in the development pipeline.

Why we measure it

The average price in our development pipeline measures how successful we have been in our aim of focusing on affordable nonprime locations when exposed to sales price risk.

Forward sales £224m
Definition

Forward sales is calculated as revenue secured by exchange of contracts, including the Group’s share of joint venture revenue, to be recognised in future years.

Why we measure it

Forward sales measure the Group’s exposure to risk and provide security over the Group’s ability to service its debt facilities.

Gearing 37%
Definition

Gearing is calculated as net debt (borrowings less cash), including the Group’s share of joint venture net debt, divided by net assets expressed as a percentage.

Why we measure it

Gearing measures our exposure to debt risk and indicates the efficiency of the Group’s capital structure.

Shareholder value
Definition
Why we measure it
Earnings per share (‘EPS’) 44.6p
Definition

EPS is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding those held in the Share Incentive Plan.

Why we measure it

EPS measures returns generated for shareholders. This key metric is used to set targets and monitor performance under the Long-Term Incentive Plan (LTIP) for the Board and senior management.

Dividend per share (‘DPS’) 17.0p
Definition

Dividend per share is the dividend paid per ordinary share.

Why we measure it

The dividend per share is a measure of income returned to shareholders.

Operational
Definition
Why we measure it
Customer recommendation rate 99%
Definition

The percentage of customers who on completing an In House Research survey would recommend Telford Homes to a friend.

Why we measure it

Delivering high levels of customer satisfaction enhances our reputation and reduces the costs associated with rectifying poor quality work.

Accident frequency rate 0.16
Definition

Accident Frequency Rate (AFR) is calculated as the number of injuries (RIDDOR) per year divided by the hours worked per year multiplied by 100,000. (RIDDOR = Reporting of Injuries, Diseases & Dangerous Occurrences Regulations).

Why we measure it

Health and safety is a priority for Telford Homes. It is vital that we measure our ability to monitor and manage the health and safety impact of everything we do.

Employee retention rate 89%
Definition

Unplanned leavers in the year as a percentage of the average number of employees subtracted from 100.

Why we measure it

Retaining our employees is crucial in achieving our strategy and maintaining our strong culture and brand.

NextGeneration sustainability benchmark 4th
Definition

This benchmark enables homebuilders, Government, affordable housing providers, investors, employees and the public to understand the sustainability of homebuilders’ operations and the new homes they build.

Why we measure it

To demonstrate our sustainability performance within the 25 largest housebuilders in the UK.

Download Alternative Performance Measures