Our strategy

Our ultimate aim is to become a genuinely customer-centric homebuilder by shifting our focus to our customers' needs and their aspirations for their homes and communities.

Graph illustrating becoming a customer-centric housebuilder

Customers and communities at the heart of our strategy

Each of the decisions we take, from the location of the land we buy, to the house types we choose and the location and timing of community facilities, has a significant impact on our customers' lives and their lifestyles. Understanding what our customers need has been a key priority for everyone at Taylor Wimpey. During 2017 and 2018, we conducted a wide ranging customer research project to help set our customer facing priorities.

Customer satisfaction 8-week score
"Would you recommend?"
90% (2017: 89%)
Customer satisfaction 9-month score
"Would you recommend?"
76% (2017: 76%)

Build quality: getting it right first time

Our customer research made very clear that this is an absolute foundation stone for customer satisfaction. Our customers rightly expect high-quality homes that are professionally built and free from defects. We believe that investment in quality upfront effectively benefits all stakeholders as getting it right first time saves significant time, cost and energy in putting things right. Having spent time and resources on ensuring the quality of products handed over to customers is consistent and meets our high standards, including the introduction of a Taylor Wimpey national quality manual, we are now focused on ensuring that a right first time approach is consistently through all stages of build.

Construction Quality Review 3.93 (2017: 3.74)
Average reportable items per inspection 0.28 (2017: 0.26)

Optimising our strong landbank

The land and planning environment is structurally different in this cycle and is more balanced and effective today than at any point over the last 30 years. We are confident that, barring a fundamental change in Government policy, this will continue to be the case for the foreseeable future. Our investment and scale continue to be based on our view of land quality and capital risk in a cyclical market. Although the planning approval process remains complex and often slow, land is no longer the totally dominant constraint on the success and scale of our business and for the industry that it once was. The easing of this constraint means it is no longer a necessity to hold a very long landbank, and we are instead focused on delivering value and maximising returns from our land investments. One of our key strategic objectives is to work our existing landbank harder and smarter and reduce the length of the short term landbank by one year by 2023. We will do this by taking a more strategic approach to our build on site, adopting a factory approach, scaling up build teams on large sites, to align with the market demand, to deliver more homes.

Strategically sourced completions 58% (2017: 53%)
Land cost as % of average selling price on approvals 19.2% (2017: 19.8%)
Landbank years c.5.1 (2017: c.5.1)

Becoming the employer of choice

Our people are the backbone of our customer-centric approach and we are investing in their development to ensure they have the right skills and to help underpin our future growth. We aspire to be the employer of choice in our sector, offering a unique and valued employee experience by investing in our people, giving them more challenge, more ownership and more flexibility, where it counts. We were pleased to have been named in the top 10 places to work in the UK for 2019, by Glassdoor, as rated by employees, once again the only commercial housebuilder to make the list. This is the second consecutive year we have featured on the list, having ranked number 15 in 2018.

Voluntary employee turnover 14.5% (2017: 14.0%)
Directly employed key trades people, including trade apprentices 748 (2017: 581)
Number recruited into early talent programmes 175 (2017: 126)
Health and Safety Annual Injury Incidence Rate (per 100,000 employees and contractors) 228 (2017: 152)

Best in class efficient engine room

As land and planning has become less of a constraint, the operational capacity of the industry as a whole has become more constrained through this cycle. We believe that having an efficient engine room, to protect and enhance value through the business is vitally important. Through structured investment and by developing our skills and supply chain, we believe we can grow the capacity of our operational business and our delivery capability. This will be an ongoing effort, and whilst it cannot be done overnight, we have started by putting in place a number of initiatives that will increase our capacity to deliver and, importantly, maintain and improve quality. We have begun this by strengthening and investing in our people and skills, including investment in direct labour, our apprentices, our production teams as a whole, as well as technology and process improvements.

Net private sales rate 0.80 (2017: 0.77)
Order book volume 8,304 (2017: 7,136)
Private legal completions per outlet 41.8 (2017: 40.4)
Order book value £1,782m (2017: 1,628)

Our strategic goals for 2018-2023

Delivering increased returns on our investments

  • Increasing RONOA demonstrates that we are achieving a higher return on the capital invested in the business
  • Reflects our strategy of driving increased capital efficiency

Maintain strong operating profit* margins

  • Reflects a customer focused product and an efficient engine room
  • Sustainability of margins more important to us than peaks and troughs
  • Important not to sacrifice quality in the pursuit of higher margins

High conversion of operating profit* into operating cash flow**** provides:

  • Investor confidence in the strength of cash generation
  • Reliable stream of dividends to shareholders
  • Optionality and ability to make land purchases

Improved land and planning backdrop allows shorter landbank

  • Increased efficiency enabling better return on shareholder capital
  • Working existing assets harder and delivering value from our investments
  • The ability to deliver more homes to more people

Our investment proposition

Customer-centric strategy

We believe that the way we run our business is already recognisably different to our employees and our partners, land vendors and suppliers because of our underlying principles. Our customer-centric approach will offer further scope for differentiation and will add additional value to our shareholders and other stakeholders.

1 Increased resilience in weaker market conditions

  • Brand underpin to sales rate and cash flows
  • Understanding customer needs and constraints, innovating to widen routes to market
  • Quality of location (where people want to live) is a key determinant of a home purchase through the cycle
  • Strong balance sheet
  • Experienced management team and local regional business teams

2 Increased capacity for high-quality growth

  • Growth without compromising on quality or adding meaningful market risk
  • Factory approach to build can drive faster and controlled growth which can be scaled up to deliver increases in volumes and cash flow on existing assets, depending on market conditions
  • Excellent short term landbank and strategic land pipeline with high embedded margin
  • Underpinned by our approach to people and the right level of resourcing
  • Growing talent from within and resourcing future growth through our early talent programmes and by increasing apprentices and direct labour

3 Professional and principled business

  • Reputation and character of the business is important in a highly political industry and with increased scrutiny and increased customer expectations
  • Focusing on a unique and valued employee proposition means we attract and retain the best people
  • Culture embedded throughout the business of "doing the right thing"

4 Enhanced efficiency and returns

  • Operational efficiency gains to be made by realising investments in technology and our systems
  • Increased landbank efficiency
  • Cost and efficiency review ongoing
  • Reliable and recently enhanced dividend returns form key part of investor proposition

Stable annual income stream through the cycle

Ordinary dividend

At least £250m to be paid, subject to shareholder approval, on an annual basis from 2019, even through a normal downturn.

Special dividend

We have paid a special dividend in each of the last five years c.£350m to be paid in 2019, subject to shareholder approval.
We confirm our intention to continue to make further material cash returns in 2020 and beyond.