Our strategy

Strategy

The Group focuses on the following key financial and non-financial objectives to deliver profitable sustainable growth

Upper quartile financial results
Regional volume growth to 6,000 units per annum
Investing in our people
Cash generative and investing in land to fuel further growth
High quality and customer focused business
Upper quartile financial results
Objective

Deliver operating margin at or above 20%

Measuring progress
Operating margin (%) 2022 18.6 2021 19.5 2020 17.3 2019 20.0
Objective

Deliver return on capital employed at or above 30%

Measuring progress
Return on capital employed (%) 2022 35.4 2021 34.4 2020 19.7 2019 30.5

* As at the end of December 2022

Commentary on progress

The reduction in operating margin in 2022 principally reflects lower gross margins due to the impact of house price inflation and cost price inflation. The increase in ROCE reflects increased operating profits only partly offset by increased capital employed.

Regional volume growth to 6,000 units per annum
Objective

Deliver incremental growth in opening forward sales position

Measuring progress
Forward sales (£m) 2022 481 2021 665 2020 560 2019 328
Objective

Deliver incremental growth in annual completions by reaching optimal output

Measuring progress
Core and JV completions (units) 2022 3,970 2021 3,849 2020 2,620 2019 3,498

* As at the end of December 2022

Commentary on progress

The reduction in forward sales reflects partial reversal of the abnormally high opening position and a weakening sales market in the second half of 2022. With the launch of our tenth region in the South Midlands during 2021, we have the regional footprint and capacity to deliver 6,000 units annually over the medium term. Our plan is to do this in an incremental way, with this growth being supported by the pull through of higher margin strategic land.

Investing in our people
Objective

Support profitable business growth by increasing employee resource

Measuring progress
Employee headcount 2022 1,155 2021 1,091 2020 1,007 2019 1,009
Objective

Maintain sector leading staff engagement scores

Measuring progress
Employee engagement 2022 93 2021 94 2020 94 2019 94

* As at the end of December 2022

Commentary on progress

We have seen an increase in headcount through a combination of organic growth and the acquisitions of Wallace Land and Walker Timber. At the same time, we are increasing our investment in training and development. Our strategy is to maintain our high employee engagement scores and retain our culture which makes an attractive employer when recruiting externally.

Cash generative and investing in land to fuel further growth
Objective

To generate free cash flow of 50% of EBITDA

Measuring progress
Free cash generation expressed in £m and as a percentage of EBITDA 2022 152 (76%) 2021 175 (90%) 2020 92 (81%) 2019 84 (49%)
Objective

Acquire high quality land to fuel growth in sales outlets

Measuring progress
Land spend, net of land sales (£m) 2022 155 2021 219 2020 150 2019 220

* As at the end of December 2022

Commentary on progress

The Group has a track record of incremental organic growth and free cash generation. In the period 2017-2019, the Group increased volumes by just under 10% per annum and delivered c50% of EBITDA as free cashflow. Our strategy is to replicate these metrics, accepting that there can be annual variations to this medium term plan.

High quality and customer focused business
Objective

Maintain HBF 5 star customer satisfaction

Measuring progress
Customer satisfaction (%) 2022 91 2021 92 2020 93 2019 93
Objective

Strive to improve annual Construction Quality Review (CQR) build quality score

Measuring progress
CQR scores 2022 4.50 2021 4.33 2020 4.19 2019 3.96

* As at the end of December 2022

Commentary on progress

The customer satisfaction score of 91% ensured that we retained our HBF 5 star rating for the eleventh time in the last 12 years. We were pleased to have improved our CQR score to 4.5 from 4.3 in the previous year. Another highlight was the number of sites that received the maximum score of 6 increased from 4 in 2021 to 24 in 2022.

Related pages

Welcome to Miller Homes

Financial information & KPIs
Welcome to Miller Homes

Our approach to land
Welcome to Miller Homes

Our business model