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We monitor our business performance using a range of key performance indicators (KPIs).

We use 12 key performance indicators to monitor our progress against our strategic objectives. These are the key metrics that we use to measure the performance and health of the business.

Financial

Return on capital employed (ROCE)1

6.3%

Definition
Adjusted operating profit before joint ventures divided by average capital employed.

Why we measure
Illustrates how effective the Group’s capital allocation is in delivering returns.

Earnings before interest and tax (EBIT) margin1

6.7%

Definition
EBIT margin (operating profit margin) reflects the adjusted profit before interest, joint ventures and tax achieved by the Group, divided by revenue.

Why we measure
Assesses the financial efficiency of our Group operations before any one-off cost.

Unit completions

2,020

Definition
Sales of homes recognised in the year including 100% of those held in joint ventures and on an equivalent unit basis.

Why we measure
Reflects overall business activity and output and enables the Group to forecast future capacity requirements.

Land creditors as a % of net assets1

24.0%

Definition
Land creditors divided by net assets.

Why we measure
Ensures that the Group is maintaining a robust financial position when entering into future land commitments.

Net cash1

£64.9m

Definition
Cash and cash-equivalents plus non-current and current interest-bearing loans and borrowings.

Why we measure
Illustrates the Group’s overall liquidity position and general financial resilience.

Land portfolio gross margin

23.2%

Definition
The expected gross margin after sales and marketing costs of land we hold in our short-term land portfolio.

Why we measure
Indicates the earnings potential of current and future land development and the sale of associated homes.

1 ROCE, EBIT margin, net cash and land creditors as a percentage of net assets are alternative performance measures. See pages 161 to 162 for further details.

Non-financial Targets

Greenhouse gas (GHG) emissions intensity

2.09

Definition
The GHG emissions intensity reflects our scope 1 and 2 emissions (tCO2e) per 100 sq. m of completed floor area. It includes business travel via company cars, fuel and energy used on sites and in offices.

Why we measure
This is one of the key measures we use to track our progress on reducing our impact on the environment. There is also a financial benefit from increased operational efficiency and reduced cost of fuel used.

Waste intensity

10.98

Definition
Waste intensity reflects tonnes of construction waste per 100 sq. m of completed floor area.

Why we measure
This is one of the key measures we use to track our progress on reducing our impact on the environment. There is also a financial benefit from the reduced cost of materials purchased and waste generated in the construction process.

Voluntary employee turnover

19%

Definition
The percentage of leavers during the year by reason of resignation or retirement as a proportion of total employees at the end of the year.

Why we measure
The quality of our people and the decisions they make are fundamental to the successful implementation of our strategy. Low employee turnover supports greater depth of experience, continuity and development of skills within our teams.

Customer satisfaction

4 star

Definition
The annual HBF’s customer satisfaction rating based on the NHBC survey which new home buyers receive. Survey results are published in March each year.

Why we measure
Providing Five-Star Customer Service is one of the Group’s strategic priorities.

Annual Injury Incidence Rate (AIIR)

304

Definition
AIIR represents the number of accidents in the year normalised per 100,000 people working on site.

Why we measure
The safety, health and welfare of everyone who is part of our operations is our number one priority.

PRS/Affordable unit completions

26.0%

Definition
Proportion of unit sales of homes recognised in the year to the Private Rented Sector (PRS) or affordable housing.

Why we measure
A Multi Channel Approach is one of the Group’s strategic priorities.