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1、Places People LoveCountryside Properties PLC Annual report 2020COUNTRYSIDES PURPOSE TO CREATE PLACESWHERE PEOPLE LOVE TOLIVE,WITH SUSTAINABLE COMMUNITIES BUILTTOLASTWHY WE ARE HEREWe create places where people love to live,where they feel at home and come together as acommunity.WHAT WE DOWe design a
2、nd develop high quality homes and sustainable communities that are not only beautiful but built to last.WHO WE AREWhat unites us is our commitment to creating places that people love and communities that continue to grow.We always deliver in the right way,the Countryside way.HOW WE DO ITWe create pl
3、aces people love bydesigning our homes with future residents in mind,by building more sustainably,by working hand in hand with local communities and partners,and bynurturing a solid team thattrulycares.Photography is pre-Covid-19Fresh Wharf,BarkingCommunities Fund charity supportSt.Michaels Hurst,Bi
4、shops StortfordMat and Bart,buyers at Belmont Place,WiganRochester Riverside,KentCustomers at Beaulieu Keep,ChelmsfordSTRATEGIC REPORT2 2020 performance and highlights3 Group at a glance4 Our response to Covid-198 Understanding Countryside10 Chairmans statement12 Market review16 Group Chief Executiv
5、es review22 Our strategy24 Our key performance indicators28 Our business model30 Stakeholder engagement34 Operational review 34 Partnerships 38 Housebuilding42 Group Chief Financial Officers review46 Our people51 Sustainability report61 Non-financial information statement62 Risk management66 Princip
6、al risksGOVERNANCE70 Chairmans introduction to governance72 Board of Directors74 Executive Committee76 Corporate governance report83 Report of the Audit Committee88 Report of the Nomination Committee90 Directors remuneration report93 Remuneration policy report98 Annual report on remuneration106 Dire
7、ctors report109 Statement of Directors responsibilities in respect of the financial statementsFINANCIAL STATEMENTS110 Independent auditors report117 Consolidated statement of comprehensiveincome118 Consolidated statement of financial position119 Consolidated statement of changes in equity120 Consoli
8、dated cash flow statement121 Notes to the consolidated financial statements162 Parent company statement of financial position163 Parent company statement of changes in equity164 Notes to the parent company financialstatements169 Alternative Performance Measures(unaudited)172 Shareholder informationC
9、ommunities Government Customers Partners Suppliers EmployeesEngaging with our communities is critical to creating places people love.See page 7Government policy and regulations have a significant impact on the homebuilding industry.See page 15Delivering high levels of customer satisfaction is at the
10、 heart of what we do.See page 27We seek to create enduring relationships with our partners.See page 37Our suppliers help us build our homes to the high-quality standards our customers expect.See page 41Our employees are the backbone of our organisation.See page 50David Coles,employee1Countryside Pro
11、perties PLC Annual report 2020SIGNIFICANT IMPACT FROM COVID-19 Completions1 down 29%to 4,053 homes(2019:5,733 homes)Private average selling price(“ASP”)broadly flat at 364,000(2019:367,000)Net reservation rate at upper end of target range at 0.78(2019:0.84)2 Average open sales outlets up 12%to 63(20
12、19:56)Total forward order book up 23%to 1,432m(2019:1,166m)Adjusted basic earnings per share of 7.4pence(2019:40.8 pence)Successful placing of 74.6m new ordinary shares in July 2020,raisinggross proceeds of 250mREPORTED MEASURES Reported revenue down 28%to 892.0m(1,237.1m)Reported operating loss of
13、5.4m(2019:170.4m profit)Net cash of 98.2m(2019:73.4m)Basic(loss)/earnings per share of(0.8)pence(2019:37.7 pence)NON-FINANCIAL MEASURES Total land bank increased to 53,118 plots(2019:49,000 plots)Accident Injury Incident Rate(“AIIR”)of224(2019:227)7 NHBC Recommend a Friend score of90.6%(2019:92.5%)N
14、HBC Reportable Items of 0.22 per inspection(2019:0.21)Adjusted operating profit4 m54.2mChange since 2019:-77%Tangible net asset value6 m951.7mChange since 2019:+29%Adjusted revenue3 m988.8mChange since 2019:-31%Return on capital employed5%7.1%Change since 2019:-3,070bpsLand bank#plots53,118Change si
15、nce 2019:+8%Adjusted operating margin4%5.5%Change since 2019:-1,100bps16122.5m68.1m56.8m18211.4m109.6m110.6m17165.3m91.5m79.4m19234.4m114.8m127.8m2054.2mFinancial year25.0m32.8m16537.4m431.8m105.6m18620.1m565.9m54.2m17632.3m514.1m118.2m19737.8m623.6m114.2m20951.7mFinancial year663.6m288.1m16777.0m42
16、7.1m349.9m181,229.5m594.7m634.8m171,028.8m552.1m476.7m191,422.8m585.7m837.1m20988.8mFinancial year359.4m629.4m1626.8%18.0%72.1%1837.4%25.0%87.4%1730.6%20.9%76.7%1937.8%25.1%78.3%207.1%Financial year4.9%13.0%1627,20419,3237,8811843,52319,77823,7451734,58119,82614,7551949,00024,30324,6972053,118Financ
17、ial year25,04228,0761615.8%15.9%16.2%1817.2%18.4%17.4%1716.1%16.6%16.7%1916.5%19.6%15.3%205.5%Financial year7.0%5.2%2020 performance and highlights1.Completions include the Groups share of completions from joint ventures.Affordable and PRS completions are calculated on a percentage completion basis
18、based on work completed at the balance sheet date.2.Including bulk sales(multiple private homes sold in bulk to a third party such as a housing association or PRS provider)the net reservation rate was 0.78(2019:0.95).3.Adjusted revenue includes the Groups share of revenue from joint ventures and ass
19、ociate of 96.8m(2019:185.7m;2018:210.9m;2017:183.0m;2016:105.7m).4.Adjusted operating profit includes the Groups share of operating profit from joint ventures and associate of 17.2m(2019:46.8m;2018:46.4m;2017:33.6m;2016:25.3m)and excludes non-underlying items of(42.4)m(2019:(17.2)m;2018:(15.7)m;2017
20、:2.8m;2016:9.9m).Divisional adjusted operating profit excludes Group items of(3.6)m(2019:(8.2)m;2018:(8.8)m;2017:(5.6)m;2016:(1.1)m).5.Return on capital employed(“ROCE”)is calculated as adjusted operating profit divided by average tangible net operating asset value(“TNOAV”).TNOAV is calculated as ta
21、ngible net asset value excluding net cash.6.Tangible net asset value is calculated as net assets excluding intangible net assets net of deferred tax.7.The number of accidents per 100,000 people at risk during the year.Housebuilding Partnerships2Countryside Properties PLC Annual report 2020Strategic
22、report3Countryside Properties PLC Annual report 2020Adjusted operating profit125.0m(2019:114.8m)READY FOR FURTHER GROWTHOur mixed-tenure model will help us recover quickly from the Covid-19 pandemic and drive our future growth.BUSINESS MODEL FOCUSED ONMIXEDTENURE DELIVERYSTRONG TRACK RECORD OF WINNI
23、NG NEW PARTNERSHIPS BUSINESSLEADING STRATEGIC LAND BANK ANDPLACEMAKING SKILLSAdjusted operating profit154.2m(2019:234.4m)Adjusted operating profit132.8m(2019:127.8m)Our business has two differentiated divisions and a clear strategy for growth over the medium term.Our lower capital Partnerships divis
24、ion isaligned to Government policy,delivering mixed-tenure homes through estate regeneration and developing brownfield land.The opportunities for this division are significant and will drive our future growth.In Housebuilding,we combine our placemaking expertise with an industry-leading strategic la
25、nd bank,embedding stronger margins and cash generation.We remain the UKs only major housebuilder for which private for sale homes comprise less than half of total completions.This allows us to develop sites more quickly,providing much-needed high quality homes,and creates a sense of place much earli
26、er in a development.Our Partnerships division specialises in urban regeneration of public sector land,delivering private,affordable and private rented sector(“PRS”)homes in partnership with local authorities and housing associations.It also develops brownfield land in the Midlands,the North West of
27、England and Yorkshire.This model is more agile and therefore resilient,as well as less capital intensive than traditional housebuilding,delivering superior returns through the cycle.We have a strong track record and good relationships with local authorities having delivered more projects than anyone
28、 else in the sector over the past 40years.Our reputation for placemaking and urban regeneration positions us well and during the year we added a further 11,374 plots to our pipeline despite the disruption caused by Covid-19.We have a strong platform to grow this division further funded by our recent
29、 equity placing and we have over nine years visibility of future work(based on 2019 volumes).Our Housebuilding division delivers high quality homes aimed at local owner occupiers.It develops private and affordable homes on land owned or controlled by the Group,located in outer London and the Home Co
30、unties.Our strategic-led land bank is industry leading and gives us significant visibility over our medium-term delivery with the added benefit of flexibility.Only 24%of our land bank is owned,equivalent to approximately four years worth of supply,with the rest controlled or under option,which gives
31、 us balance sheet efficiency and flexibility to react to market conditions.With 82%of our land sourced strategically we have good visibility of a pipeline which will enable us to return the business to its pre-Covid scale over the medium term.Private 1,454 PRS 908 Affordable 1,691 South 14,864 North
32、 9,316 Midlands 3,896 Controlled 1,878 Option 17,125 Owned 6,039GROUPPARTNERSHIPSHOUSEBUILDING8+68+24+kIControlled land bank25,042plots(2019:24,303 plots)Group at a glance1 Adjusted operating profit includes the Groups share of operating profit from joint ventures and associate of 17.2m(2019:46.8m)a
33、nd excludes non-underlying items of(42.4)m(2019:(17.2)m).Divisional adjusted operating profit excludes Group items of(3.6)m(2019:(8.2)m).53+33+14+kI36+22+42+kISouth Oxhey Central,HertfordshireActon,EalingHanbury Place,Chelmsford Controlled land bank28,076plots(2019:24,697 plots)Completions4,053homes
34、(2019:5,733 homes)4Countryside Properties PLC Annual report 2020RESILIENT BUSINESS MODEL SUPPORTING OUR COMMUNITIESSince the impact of Covid-19 began in March 2020,we have responded to the needs of all our stakeholders whilst ensuring that our business remains resilient forthe long term.Our priority
35、 through this period has been to focus on the safety and wellbeing of our employees,customers,supply chain and other partners.OUR PEOPLE The wellbeing of our employees,amongst other stakeholder groups,has been our utmost priority through the crisis.Sales offices,construction sites,factories and regi
36、onal offices closed on 25 March 2020 while adjustments to the workplaces andprocedures were made to ensure socialdistancing.Office-based employees were supported with the transition tohome working with minimal disruption to the business.A new set of standard operating procedures was implemented base
37、d on guidance from the Construction Leadership Council,designed to allow the safe operation of sites and factories whilst complying with Government and Public Health England guidance on social distancing.Measures taken include the provision of additional site welfare facilities and car parking and t
38、he introduction of Site Compliance Officers to ensure our procedures are adhered to.Pay and benefits were maintained for all staff placed on leave in April and May to ensure that they were in the best possible position to resume work when required.We did not participate in the Governments Job Retent
39、ion Scheme.We maintained good communication with our employees during what has been an uncertain time for them and their families including regular emails from the Group Chief Executive and ExecutiveCommittee.Regular Group-wide communications were sent to employees homes including guides to home wor
40、king and mental health.Mental Health First Aiders and an Employee Assistance Programme were available to allemployees.We maintained momentum with our culture transformation programme seeking views from employees and updating our plans in response to the changing environment.Read more in Stakeholder
41、Engagement onpages30to33 and Our People on pages 46 to 50ORGANISING OUR RESPONSEAs the impact of the Covid-19 pandemic became clear,our Executive Committee met daily to make key operational and financial decisions as the situation rapidly developed.We also held weekly Board briefings to ensure the N
42、on-Executive Directors were kept informed of developments.To ensure we had good two-way communication between the Executive Committee and the business,we set up aCovid-19 working group involving key employees from across the business with representatives from employee,customer and supplier-facing fu
43、nctions to health and safety,finance,IT and facilities.This allowed us to focus on the immediate priorities in dealing with the impact of Covid-19 on ourbusiness.We have continued to refine our contingency plans to plan our response to a range of developments such as further local or national lockdo
44、wns.These will ensure our business remains agile and that we are well placed to adapt to changing conditions.The wellbeing of our employees,amongst other stakeholder groups,has been our utmost priority through the crisis.”Our response to Covid-19Strategic report5Countryside Properties PLC Annual rep
45、ort 2020Strategic reportOUR CUSTOMERS We understand that Covid-19 has affected the lives of everyone including our customers and we have assisted customers wherever we can.This included increasing the frequency of communications with customers through allparts of the customer journey from reservatio
46、n to those who had recently moved into their newhomes.We increased our online presence with both new and existing customers,which included conducting customer visits by video conference,as well as a number of virtual home tours.We extended our new homes warranty by three months to reflect the period
47、 when we could not attend customers homes inperson.We put measures in place to ensure our customers remained safe with new operating procedures for Covid-secure sales and marketing suites.Recognising that there has been additional uncertainty,we have also been flexible on completion dates to assist
48、customers to find anappropriate moving date.We maintained our post-completion customer service with enhanced health and safety practices and checks before visiting customers homes.Read more in Stakeholder Engagement onpages 30 to 33OUR FINANCIAL POSITION We took a number of steps to conserve cash in
49、 the business to ensure our business could weather the rapidly changingenvironment.This included negotiating deferrals to payments for land and taxation where possible and minimising all other spend across the business,including not paying an interim or final dividend.All staff who were placed on le
50、ave by the business were paid in full for the period of their absence and all staff returned to the business during May.We chose not to claim employee costs under the Governments Job Retention Scheme.We also renegotiated a number ofcontracts,both for the purchase of land and some of our longer-term
51、Partnerships development agreements to restructure payments and provide additional protection against falls in house prices.We fully drew down on our 300m revolving credit facility in mid-March.On 28April 2020,our eligibility to access the Bank ofEngland Covid Corporate Financing Facility(“CCFF”)was
52、 confirmed,and we put in place a 300m commercial paper facility to access the CCFF should it be required.We also negotiated a relaxation of the Groups banking covenants until September 2022.In July 2020,we raised 250m by issuing new equity,the purpose of which was twofold:firstly to strengthen the G
53、roups balance sheet to ensure that we are able to withstand a further deterioration in economic conditions and secondly to accelerate growth within our Partnerships division,executing the plans we had been putting in place before the pandemic.We took advantage of our mixed-tenure model to prioritise
54、 the provision of PRS and affordable homes which helped us generate cash as soon as we returned to site.Read more in our Financial Review onpages42 to 45Customer service at Beam Park,DagenhamCustomer service at Wolsey Park,Rayleigh6Countryside Properties PLC Annual report 2020Our response to Covid-1
55、9 continuedOUR PARTNERS Having recognised that our supply chain is vital to being able to deliver on our plans,we needed to support them through the period of shutdown to be able to restarteffectively.We maintained regular communication throughout the period oflockdown to help our suppliers and sub-
56、contractors to make plans for their own businesses withconfidence.We worked with suppliers and sub-contractors to ensure they understood our new operating procedures on site so that they felt safe in returning towork.We continued to pay all of our suppliers throughout the lockdown.While there have b
57、een delays to our delivery programmes as aresult of the site closures,we have worked with our partners,local authorities and housing associations to prioritise delivery when back onsite.Within our longer-term development pipeline we continued with design and planning activities whilst working remote
58、ly.Read more in Stakeholder Engagement onpages 30 to 33OUR COMMUNITIES We are especially aware that the crisis is impacting the communities in which we operate and we wanted to support those communities as best we could.In immediate response in April we established a 1m Communities Fund,targeted at
59、helping the most vulnerable local people,including supporting local food banks and community groups.This was further supported by a 20%salary sacrifice by the Board and Executive Committee for two months from April which was donated to the fund.We continued with our social enterprise projects throug
60、hout the crisis,working in partnership with local communities.Through these partnerships we look to expand local opportunities including education and job creation.Our site teams also supported where they could donating vital personal protective equipment such as masks from closed sites to local hea
61、lth services which were struggling to get the equipment they needed.Read more in Stakeholder Engagement onpages 30 to 33In April we established a 1m Communities Fund targeted at helping the mostvulnerable.”Beam Park,DagenhamFresh Wharf,BarkingStrategic report1M COMMUNITIES FUNDCountryside is proud t
62、o be a signatory of the Covid-19 Business Pledge,created to support millions of people across the world in light of the coronavirus outbreak.The pledge shows our commitment to supporting our employees,customers and communities.We recognised that during the Covid-19 crisis there were more people stru
63、ggling than ever before.During such unprecedented times,we saw a major interruption to our normal working practices,but remained committed to supporting our local communities.Our priority was to ensure that,amongst other initiatives,children of our poorest communities had access to resources and sup
64、port was given to those facing homelessness.We were also keen to support the elderly and frontline workers or patients who might be struggling tocope in such difficult times.We allocated 1m of resources specifically for helping the most vulnerable,supported by a team of volunteers from within Countr
65、yside.We reached out toemployees,partners and the local communities themselves to identify areas where support was needed.In addition,all of the Executive Committee and theBoard ofDirectors agreed to a voluntary 20%reduction in base salary andfees for two months,with the equivalent cash amount added
66、 tothe Communities Fund.https:/www.c19businesspledge.org/aboutWe committed to a number of local initiatives,including supporting local foodbanks with Countryside volunteers helping to deliver supplies as well as providing financial assistance to local community groups,buying and distributing persona
67、l protective equipment for hospitals and providing provisions for patients in hospital wards.The fund has already made a significant impact on communities across thecountry where we operate.From Rochdale to Sevenoaks,the donations have been a vital lifeline in supporting essential community activiti
68、es and initiatives including care equipment for the elderly,IT facilities for school children,supporting mental health provisions and much-needed food supplies for struggling families.The Trussell Trust in Bracknell,Ryedale Carers in York and Swan Housing in Billericay are just three of the hundreds
69、 of organisations big and small that we have already supported.As the impact of Covid-19 is likely to continue to be felt into 2021,we realise that a financial lifeline to the organisations that are the beating heart of our communities will be more vital.Therefore,we have decided to extend our suppo
70、rt beyond the initial fund allocation with a further 1m being allocated for our 2021 financial year.Strategic reportPlaces People LoveCommunities case study1mresources allocated to our communities7Countryside Properties PLC Annual report 2020Communities Fund charity support8Countryside Properties PL
71、C Annual report 2020Understanding CountrysideCREATING SUSTAINABLE VALUEDelivering sustainable growth and superior returns throughourbalanced business model.A GOOD PLATFORM FOR FURTHER GROWTHWhile 2020 volumes were below the prior year as a result of the impact of Covid-19,our growth strategy and amb
72、ition remain intact.The Group now operates from 14 regional businesses across the South East,the North West,the Midlands and Yorkshire,with plans for an additional three regions announced following our equity placing in July 2020.Whenour regional businesses reach maturity over the next five years,we
73、 will have the capacity to deliver up to 12,000 homes perannum more than double the number delivered in 2019.4,053completions (2019:5,733)84active Partnerships sites at 30 September 2020 (2019:98)40active Housebuilding sites at 30 September 2020(2019:39)1,924directly employed staffQUALITY AND CUSTOM
74、ER CARE AT THE HEART OF OUR BUSINESSCustomers are at the heart of our business andwe take quality and customer satisfaction seriously at all levels of our business.We track three non-financial KPIs which measure our health and safety,quality and customer satisfaction,all of which are better than ind
75、ustry standards.We were proud to be awarded Home Builders Federation(“HBF”)five-star builder status for the first time in the Groups history in 2020 and will continue to focus on providing the highest levels of customer service.90.6%of customers would recommend us to afriendor family(2019:92.5%)0.22
76、reportable items per NHBC home inspection(2019:0.21)224Accident Injury Incident Rate(2019:227)We were proud to be awarded Home Builders Federation(“HBF”)fivestar builder status for the first time in the Groups history in 2020 and will continue tofocus on providing thehighest levels of customerservic
77、e.”Kings Hill,West MallingCommunities Fund charity supportStrategic reportBUILDING A SUSTAINABLE FUTURECREATING PLACES PEOPLE LOVEOur driving purpose is to create places where people love to live,with sustainable communities built to last.See pages 28 to 29CLEARLY DEFINED STRATEGYWe have set out a c
78、lear strategy to deliversector-leading growth over the medium term.See pages 22 to 23FOCUSING ON SUSTAINABILITYWe have been working to better understand how our approach to sustainably drives our purpose,shapes peoples lives and impacts upon the planet.See pages 51 to 60OUR BUSINESS IS AGILE AND WEL
79、L CAPITALISED FOR GROWTHFollowing the 250m equity placing in July 2020,the Group has a strong balance sheet with net cash of 98.2m as at 30 September 2020 allowing us to progress our growth plans for Partnerships with confidence.The mixed-tenure nature of Partnerships means we are able to flex our b
80、usiness model to adapt to changing market conditions,including an uncertain economic backdrop.Over time we anticipate Partnerships will generate significant growth in volume and operating profits supported by strong cash generation,geographic reach,and supply chaineconomies.Net cash98.2m(2019:73.4m)
81、GENERATING RETURNS THROUGH THE CYCLEOur lower capital Partnerships model helps us to deliver superior returns on capital through the economic cycle.Our ROCE has been significantly impacted by Covid-19 as we carried higher than normal inventory due to delays to our construction programmes along with
82、lower than normal operating margins.While the current year has been impacted by the effects of Covid-19,with the Partnerships regions offering the greatest capacity for growth,significant visibility over themedium term and phased viability on our larger schemes,we believe returns will revert to our
83、target levels over the medium term.Return on capital employed 7.1%(2019:37.8%)Strategic report36+64+kIAdjusted revenue988.8m(2019:1,422.8m)43+57+kIAdjusted operating profit54.2m(2019:234.4m)Housebuilding 359.4m Partnerships 629.4m Housebuilding 25.0m Partnerships 32.8mFresh Wharf,Barking9Countryside
84、 Properties PLC Annual report 202010Countryside Properties PLC Annual report 2020Chairmans statementA SUSTAINABLE AND RESILIENT FUTURE Behind everything we do at Countryside is ourdriving purpose:to create places where people love to live,with sustainable communities built to last.That means we desi
85、gn our homes with todays and future residents in mind.We are building more sustainably.We are working hand in hand with local communities and partners,and we are nurturing a solid team that really cares.Everyone on the Countryside team is dedicated to designing and developing high quality homes and
86、sustainable communities.Our purpose is what drives our innovation,shapes our practices and inspires and motivates our people.It is how we ensure that our places,our communities and our business are vibrant,sustainable and resilient.This report covers the 12 months to 30September 2020 and outlines ho
87、w,despite the impact ofCovid-19 and the economic uncertainty thathas been present throughout the year,ourbusiness has responded.While our financial and operational results were significantly impacted by the period of shutdown caused by Covid-19,ourdifferentiated business model and its focus on mixed
88、-tenure communities has proved resilient.It will also allow us to recover quickly.Demand for all tenures of homes remains robust and following the equity placing in July 2020,we ended the year with a strong balance sheet.This has given us the financial capacity and confidence to deliver our future g
89、rowth plans,over which we have significant visibility.Our forward order book and pipeline in bothdivisions remain strong across all tenures,positioning us well for recovery and growth inthe future.We were delighted that our continued focus on putting customers at the heart of our business resulted i
90、n us being awarded Home Builders Federation(“HBF”)five-star builder status for the first time in the Groups history,with over 90%of customers willing to recommend us toa friend.PRIORITIES OF THE BOARDCOVID-19The unprecedented challenges presented by Covid-19 have been a key area of focus for the Boa
91、rd,ranging from ensuring the safety of our people(across offices,sites and factories)to determining the strategic realignment of the Group after the gradual release from the UK lockdown period in May.In addition to scheduled Board meetings,the Board met virtually from early March to July at least we
92、ekly,to consider all related issues,principal amongst which were:Preparing for lockdownEnsuring that continuity plans were in place to enable the business to continue operating as and when the Governments anticipated restrictions to control Covid-19 were introduced.The considerable investment in the
93、 Groups IT systems in prior years,moving many applications into the cloud and the broad availability of laptops and home working applications,has proven invaluable as all officeemployees transitioned seamlessly to home working.The Board agreed“alternatives”for the Executive Directors and senior mana
94、gement inthe event that any of them would have to self-isolate and were unable to work,and imposed rules to mitigate the risk of infection between colleagues.Lockdown and site closureWhen the Government commenced a UK-wide lockdown on 23 March,the Group was well prepared to move all office staff to
95、home working.The Board was very aware of the critical need for clear and regular communications to all staff,customers,suppliers and other stakeholders.When c.65%staff were placed on fully paid leave by Countryside from 1 April,considerable time was spent by the Board ensuring that they continued to
96、 be supported and had access toappropriate mental health support programmes where required.DAVID HOWELLCHAIRMANOur purpose is what drives our innovation,shapes our practices and inspires and motivates our people.It is how we ensure that our places,communities and ourbusiness are vibrant,sustainable
97、and resilient.”Strategic report11Countryside Properties PLC Annual report 2020When it became apparent that sites would also have to close,the Board considered carefully how to balance the interests of the safety of its people,with the need to support its supply chain and the communities in which it
98、operated for when lockdown lifted.I wish to emphasise the considerable care taken by the Board to take account of the impact of lockdown on all of Countrysides stakeholders.Steps taken include a swift move to virtual property viewings,engagement with all key suppliers and the creation of the 1m Comm
99、unities Fund.For the two months of April and May,the Board and Executive Committee also elected to take a voluntary 20%salary reduction with the sum added to the Communities Fund.We have also communicated regularly with investors to ensure transparency in ourresponse.The Board continued to review th
100、e Companys purpose,values and culture against the backdrop of Covid-19 throughout the lockdown period.Planning to re-openThe Board oversaw the plans for the return ofstaff from paid leave and the gradual and measured re-opening of sites,factories and sales offices during May and June.The safety ofem
101、ployees,the contractors operating on our sites and those visiting our sales offices hasbeen paramount.To that end,the Board has sought to ensure that the guidance from the Government and Public Health England was always quickly implemented,at all times.The recommencement of operations could not have
102、 happened without very careful co-ordination between all stakeholders.Only when the Board was confident that the support of suppliers,sub-contractors and staff was in place could sites start to re-open.During the second lockdown in England during November 2020,our sales,office and site locations rem
103、ained open with full compliance with therelevant guidance.GROUP STRUCTUREThe Board regularly reviews its strategy for maximising long-term shareholder value from the Groups mixed tenure business model.Having considered the growth opportunities for both divisions,which operate largely independently o
104、f each other,and our focus onallocating capital to growing Partnerships,theopportunities to grow the Housebuilding business may berestricted.The Board has therefore recently appointed Rothschild&Co.to advise the Board on the best time and process to realise best value from the separation of Housebui
105、lding from the Group.OUR FINANCIAL POSITIONThe Board considered the impact that Covid-19 was having on the financial strength of the business,with this being the first complete shutdown of operations in the Groups history.In April,the Board agreed a number of steps to preserve cash in the Group incl
106、uding changes to land payment profiles and tightening controls around cash spend.The Board supported the application for access to the Bank of Englands Covid Corporate Financing Facility(“CCFF”),which todate has not been utilised.Having agreed the Groups revised growth strategy in advance of the equ
107、ity placing announcement on 23 July,the Board has met regularly to continue monitoring the progress against that strategy and agree the budget for2021.COMPETITION AND MARKETS AUTHORITY(“CMA”)INVESTIGATIONOn 4 September 2020,the CMA announced that it had launched enforcement action against Countrysid
108、e and three other developers in relation to possible breaches of consumer protection law in relation to historical sales of leasehold homes.The Board is committed to resolving this issue and the Group continues toco-operate with the inquiry by the CMA.GROUND RENT ASSISTANCE SCHEMEIn May 2020 and as
109、announced with our half year results,the Board approved the creation of the Countryside Ground Rent Assistance Scheme where the Group will seek agreement from freehold owners to vary the leaseholds ofCountryside customers who still own homes with a leasehold ground rent that doubles more frequently
110、than every 20 years,to be linked instead to the rate of RPI and reviewed every 15 years.In addition,the scheme will support homeowners who purchased a leasehold house from Countryside to purchase the freehold directly from the owner where possible.SHAREHOLDER ENGAGEMENT AND CAPITAL ALLOCATIONAs one
111、of the actions to preserve cash within the business the Board decided not to pay an interim dividend or recommend a final dividend.Our priority on capital allocation remains focused on investing to deliver the growth ofthe business by executing our Partnerships growth strategy,before returning cash
112、to shareholders.In relation to our broader approach to capital allocation and shareholder returns,the Board intends to reinstate the dividend in 2021.However,we are mindful that given the significant growth opportunities that we see for our high return on capital Partnerships division,that we should
113、 ensure that the level ofthe dividend appropriately reflects the opportunity to deliver enhanced shareholder value by growing that division more quickly.The Board will confirm the level of dividend pay-out at the half year results,in light of market conditions at that time.Both Amanda Burton,Chair o
114、f the Remuneration Committee,and I have carried out a number of meetings with shareholders during the course of 2020 to seek their views We recognise that our people are the most important factor in delivering planned future growth and maintaining quality,satisfaction and safety standards.”on key is
115、sues such as executive remuneration and Group strategy.All feedback has been shared with the wider Board and has been factored into our key decision making.This willbe an ongoing programme as we progress into the next financial year.OUR PEOPLEIan Sutcliffe stood down from the Board on31December 2019
116、 and was replaced as Group Chief Executive by Iain McPherson on1January 2020.Ian made an enormous contribution to the Group,including leading its IPO in 2016 and its subsequent growth.The Board thanks Ian for his contribution and wishes him well in his retirement.Iain McPherson has significant indus
117、try experience having held a number of senior roles prior to joining the Group in September 2014 to establish the Southern Housebuilding region.He then led the Partnerships South division before stepping into the role of Group Chief Executive earlier this year.Lastly,but most importantly,I would lik
118、e to thank each and every one of our employees,our supply chain and our business partners for their commitment to Countryside,particularly in what has been a challenging year.Our business continues to grow and we recognise that our employees are critical to our recovery and delivery of our growth pl
119、ans while maintaining the high standards expected of Countryside.We continue to focus on development with extensive training programmes at all levels within the business.Finally,this will be my last year at Countryside as I have announced to the Board my intention to step down during 2021.It has bee
120、n a privilege to serve as Chairman of Countryside.I would like to thank my Board colleagues,the Executive team and all our employees for their support as they continued to develop the business andits strong potential for further profitable growth in the years ahead.David HowellChairman 2 December 20
121、2012Countryside Properties PLC Annual report 2020Market reviewMAINTAINING OUR RESILIENCEDespite the short-term uncertainty created by Covid-19 during the course of theyear,the demand for all tenures of housing remains robust.There remains significant support from both national and local Government.C
122、ountrysides commitment to offering a balanced mix of tenure types,which differentiates usfrom other major housebuilders,allows us to develop sites more quickly andmeanswe are lessexposed to any slowdown in the private for sale market.MACROECONOMIC ENVIRONMENTMarket performance across the past 12 mon
123、ths has been dominated by the unprecedented effect which the coronavirus pandemic has had acrossthe worlds economies as well as the continued political uncertainty created by the UKs decision to leave the European Union.Despite these historic events,demand for housing of all tenures has remained rem
124、arkably strong,with mortgage approvals quickly recovering to pre-lockdown levels and house price increases demonstrating the extent of pent-up demand within the housing market.The Governments objective to satisfy this strong demand through the delivery of 300,000 additional homes annually by the mid
125、-2020s is being advanced but remains some way off,with 179,000 homes delivered in 2019.Looking forward,there is a significant degree of uncertainty as to whether such positive sentiment will be maintained.Whilst interest rates remain low,there has been a reduction in mortgage availability with many
126、of the high loan-to-value products being withdrawn,particularly affecting first-time buyers.Furthermore,as Government support for employees and businesses affected by the coronavirus pandemic tapers off many forecasters project an increase in unemployment levels.OUR RESPONSEWe continue to expand our
127、 geographical presence,with 14 active regional businesses across London,the surrounding Home Counties,the North West,the Midlands and Yorkshire and a further three new Partnerships regions being established following the Groups equity placing in July.We have protected the business against future mar
128、ket shocks by allocating 100m of the proceeds to strengthen the Groups balance sheet to ensure that we can withstand further downside risks,including further national lockdowns.Our mixed-tenure model and modular panel factory have provided us with significant benefits following the cessation of lock
129、down by ensuring that we have been able to build out sites quickly and efficiently whilst inturn allowing us to deploy capital to grow the business.We have positioned ourselves to capitalise on both our existing and new geographies with a significant forward order book across all tenures and an indu
130、stry-leading strategic land bank,which together position the business well for a return to growth.Raised in July100mto strengthen the Groups balance sheetCHANGING CONSUMER PRIORITIESA consequence of the response to the coronavirus pandemic has been to prompt homeowners and renters to re-assess the i
131、deals which they look for in a home.As technology has made working from home a reality for many,early trends suggest that customers are more willing to accept increased commuting times as compromise for larger homes with more outside space.OUR RESPONSEWe continue to target development sites outside
132、of prime city centres,thus limiting our exposure to densely populated commercial areas.Our expansion into new geographies,including the South West and Chilterns,provides us with further foundations from which to expand the business,benefiting from this shift in consumer priorities.We already guarant
133、ee a 1TB data connection on our developments which assists home working.Fresh Wharf,BarkingStrategic report13Countryside Properties PLC Annual report 2020Government affordable housing programme to deliver180,000homes over eight yearsHelp to Buy was used on20%of our completionsGOVERNMENT POLICY ANDFU
134、TUREREGULATIONThe Governments Help to Buy scheme continues to support peoples ability to own and move home,with c.36%of UK home purchases in 2019 being via the scheme.The scheme is only available for new build homes and from 2021 further restrictions will come into force preventing its usage on prop
135、erties which exceed regional price caps or by individuals who are not first-time buyers.The Help to Buy scheme will run until 2023.In addition to Help to Buy,the Government remains a strong supporter of the housebuilding industry through several recently announced initiatives,including the 12bn affo
136、rdable housing programme to deliver 180,000 homes over eight years,a pilot programme to deliver 1,500 discounted First Homes and a new shared ownership scheme.The Government also released its“Planning for the Future”white paper in August which outlines a series of reforms which will ultimately speed
137、 up and modernise the planning system.Certain short-term,specific policy changes were implemented in response to the coronavirus pandemic,most notably the temporary relaxation allowing for the first 500,000 of qualifying property purchases to be exempt from stamp duty land tax.Historically such a ch
138、ange has had the effect of accelerating,rather than increasing,demand for homes;therefore,the benefit from this change may well unwind over time.However,its effect of providing much-needed liquidity in the second-hand homes market is welcome.The industry continues to improve quality through the tigh
139、tening of its regulatory environment.Fire safety remains an area of focus with amendments to existing and emerging legislation ongoing as well as continued focus on the industrys sustainability credentials.The Future Homes Standard which will drive improvement in the energy efficiency of new homes t
140、hrough low carbon heating and world-leading levels of energy efficiency is expected to be in force by early 2021.The New London Plan,while not formally adopted,further progressed during the year and sets the standard for developments in London.This includes new requirements for information,such as C
141、ircular Economy and Whole Life Cycle Carbon Assessment,for each development along with monitoring and reporting requirements for carbon on majordevelopments.In January 2020,the Government released the publication“Building Better,Building Beautiful Living with Beauty”which promotes best practice in t
142、erms of promoting heath,wellbeing and sustainable growth,setting the bar higher for industry standards.In September the Government announced enforcement action against a number of housebuilders,including Countryside,in respect of potentially unfair terms concerning ground rents in leasehold contract
143、s.OUR RESPONSEIn 2020,Help to Buy was used on 57%of our private completions excluding bulk sales or 20%of our total completions,which is strongly linked to the proportion of first-time buyers.We ensure that our product is affordable for local owner occupiers who represented over 40%of our private co
144、mpletions in 2020.With the planned changes to Help to Buy from 2021 to 2023,we are planning our price points to ensure our homes continue to be accessible to as many customers as possible who plan to use Help to Buy within the bounds of the new regional price caps.Our mixed-tenure delivery model cou
145、pled with our network of existing relationships ensures that we are well placed to work with Government and local authorities to help unlock otherwise unviable development opportunities to accelerate the provision of affordable housing within England.During 2020 we concluded an independent fire risk
146、 assessment of all multi-occupied buildings,either owned by Countryside or built by Countryside in the last 15 years.No buildings were identified as high risk or requiring immediate remediation;consequently,we have not provided for any future obligations in respect of our existing developments.In re
147、sponse to the changing regulations and sustainability agenda we recognise that we need to play a bigger part in addressing our impact on the environment through the homes that we build and social impact in the communities in which we operate.During the course of the year we have put a much greater f
148、ocus internally on how we can raise the bar not just for ourselves but for the industry.We have created new roles tosupport this including a Group Director of Sustainability and Group Technical Director and anticipate further progress during 2021.You can read more in our Sustainability Review on pag
149、es 51 to 60.With respect to the Competition&Markets Authority(“CMA”)investigation into past leasehold practices we will continue to co-operate fully and engage with the CMA.Over the past three years we have committed toaddressing historical ten-year and fifteen-year doubling rent leases.Inthe first
150、half of the year we established the Countryside Ground Rent Assistance Scheme to help us deal with these historical leases.In terms of current practice,where we can,we sell on a freehold basis and have not sold leasehold houses for some time.Where we do sell properties on a leasehold basis we ensure
151、 that the terms are fair(either RPI linked or,on more recent schemes,peppercorn rents)inline with the Governments leaseholdpledge.Dash,Hoxton14Countryside Properties PLC Annual report 2020Market review continuedMIXEDTENURE APPROACHThe decline in home ownership since 2003 is a trend which has been dr
152、iven both by a lack of affordable housing as well as increasing barriers to private ownership as house price growth has outstripped earningsgrowth.The lack of affordable housing is being addressed through the Governments recently announced 12bn affordable housing programme which runs from 2021 to 20
153、26,with half of the homes delivered being for affordable home ownership.The effect of reduced levels of private home ownership has been to increase the proportion of renters in the marketplace and consequently increase the levels of activity in the professional PRS market from both PRS providers and
154、 institutional investors.To improve the affordability of private home ownership the Government is seeking to promote faster delivery of homes on large strategic sites through its“Planning for the Future”white paper.Government housing programme to deliver300,000homes target Off-site timber frame cons
155、truction used on64%of our outputOUR RESPONSEOur mixed-tenure delivery remains a hallmark across all our developments and we remain the UKsonly major housebuilder forwhich private for sale homes represented less than half of total completions.In 2020,our mixed-tenure strategy helped us to exit lockdo
156、wn at pace,accelerating delivery from our non-private forward order book to ensure that the business continued to generate strong cash flows to be invested for our growth.During the year we delivered atotal of 4,053 new homes,of which 36%were private for sale,42%were affordable homes and 22%were PRS
157、 homes.Our Partnerships division provides a balanced mix of all three tenure types,enabling rapid growth as well as business resilience.In our Housebuilding division,we have an industry-leading owned or controlled land bank within 50 miles of London,82%of which has been strategically sourced.SUPPLY
158、CHAIN AND MODERN METHODS OFCONSTRUCTION(“MMC”)The housebuilding industry is exposed to a number of risks with regard to the pricing and availability of materials and labour.Should a deal with the European Union not be agreed by the UK Government then the industry will need to deal with the consequen
159、ces of World Trade Organisation(“WTO”)tariffs coming into force,potential customs delays,labour restrictions and increased currency fluctuations.MMC is also becoming a key Government and industry focal point bothin terms of how housing delivery can be accelerated to meet the300,000 homes target ment
160、ioned previously but also as a way ofimproving build quality and building safety.There are a number of different elements to MMC which cover a range of approaches that encompass off-site,near-site and on-site pre-manufacturing,process improvements and technology applications.Although the industry ha
161、s yetto fully embrace non-traditional build,several methods of off-site construction are emerging from use of prefabricated elements to timber frame construction to complete modular build.The case for off-site construction continues to grow driven by benefits including build speed,enhanced quality a
162、ssurance,reduced waste on site and the opportunity to do more with the existing workforce.Indeed,some public procurement bids,including tenders put out by Homes England,require use of MMC and commitment to a pace of build in order for participants to qualify tobid.OUR RESPONSESince the vote to leave
163、 the European Union we have performed a thorough review of our procurement strategy and engaged with our main supply chain partners to ensure we understand the impact of changes arising from Brexit,including the impact of trading on WTO terms if required.We have surveyed the supply chain to understa
164、nd their level of preparedness and the potential impact of WTO tariffs.Where necessary,contingency plans have been developed to mitigate potential risks.The availability of skilled labour remains a risk which we are addressing bybuilding strong relationships with sub-contractors given our long-term
165、visibility of work.We also continue to invest in our graduate and apprenticeship programmes to develop our own talent.We also believe that off-site construction is integral to meeting our growth plans and securing our supply chain for the future.We already use off-site timber frame construction on 6
166、4%of our output,and following the successful opening of our first modular panel factory in March 2019,we have progressed plans for our second modular panel factory which is due to come on stream in late 2021.Both factories willoperate a semi-automated production line which fabricates a closed panel
167、including all windows,first-fix plumbing and electrical channels,insulation and plasterboard.Combined the two factories will have capacity to deliver up to 5,000 homes per annum.The Group also operates a traditional open-panel timber frame factory.Fresh Wharf,BarkingStrategic reportST JAMES PARK St
168、James Park,a significant new development in Bishops Stortford,once complete will be a mixed-use development spread over four hectares,delivering 750 new homes,acare home,employment space,a primary and secondary school,and a local centre with shopping facilities.Named after the oldest building in the
169、 parish,Grade I listed local landmark St James Church,St James Park will comprise a series of distinct character areas linked by a network of pedestrian footpaths and cycleways and extensive green open space,complete with attractive landscaping and equipped play areas.Outline planning permission for
170、 the St James Park masterplan,and detailed permission for Phase 1 of the development,was granted in December 2019.Phase 1 will include the first 142 houses to be built,40%of which will be affordable(available through either affordable rent or shared ownership).A key milestone in the sites developmen
171、t is the relocation of Bishops Stortford High School.Underpinning this sustainable new community,the primary and secondary schools will sit together at the heart ofthe development,surrounded by extensive playing fields and green space.The primary school will have capacity for up to three forms of en
172、try and early years facilities;the secondary school will take up to eight forms of entry.Crucial to the success of the schools timely relocation,Countryside,in partnership with Hertfordshire County Council,has brought forward these works,demonstrating its commitment to the local areas educational fa
173、cilities.The new secondary school will comprise a 10,017 sq m(107,639 sq ft)school building,sports hall,floodlit multi-use games area and parking.750new homes to be delivered40%affordable homes in Phase 1 of the developmentPlaces People LoveGovernment case studySt.Michaels Hurst,Bishops Stortford15C
174、ountryside Properties PLC Annual report 202016Countryside Properties PLC Annual report 2020Group Chief Executives reviewLOOKING FORWARD TOFURTHER GROWTHIAIN McPHERSONGROUP CHIEF EXECUTIVEOUR STRATEGYWe have a differentiated,balanced and flexible business model with our lower capital Partnerships div
175、ision and our cash generative,strategic land-led Housebuilding division.Bothdivisions create sustainable homes and communities with a strong emphasis on designand construction quality.We apply our master planning and design capabilities across the Group to deliver housing developments of scale and p
176、rioritise placemaking for current and future generations.We have strong relationships with Government,national and local partners and leverage specialist skillsets inboth divisions to deliver new communities tothrive now and into the future.In Partnerships,we work with public sector authorities thro
177、ugh a mixed-tenure approach to accelerate the delivery of homes through a combined portfolio of affordable,private rented and private homes.In London and the South East,we focus on estate regeneration and town centre redevelopment,with opportunities generally sourced through public procurement proce
178、sses or through direct negotiation with public sector partners.In other parts of England,we develop brownfield land or other land,where we can deploy our mixed-tenure model,with both private and public sector landowners.40 years of experience and track record means we are the partner of choice for m
179、any local authorities and public sector bodies and also represents a meaningful barrier to entry.Our Housebuilding division uses the same master planning and design skills to develop homes predominantly on strategically sourced land through local planning promotion,unlocking sites for development.We
180、 build long-term relationships with private landowners or public sector partners such as Homes England to deliver larger-scale housing developments in the South East of England.Relationships with the public sector and delivering design quality are essential to bring land forward through planning.Our
181、 high quality strategic land bank comprises over 25,000 plots,predominantly held under options.This option-ownership approach enables us to develop a phased pipeline of delivery in a capital-efficient way.Our mixed-tenure model in Partnerships is highly differentiated and,given the growing demand an
182、d opportunity across the UK,we are uniquely placed to offer sector-leading growth rates over the medium term.We areinvesting in further off-site manufacturing capability to underpin our speed of delivery,deliver product standardisation and demonstrate our commitment to embracing modern methods of co
183、nstruction.Additional funding raised in July2020 has enabled the creation of three new regional Partnerships businesses and delivery of our second modular panel factory providing us with the infrastructure to deliver,over time,up to 12,000 homes each year across the Group more than double our 2019 d
184、elivery.Since becoming Group Chief Executive inJanuary 2020,I have increased our focus onoperating as a more sustainable business.Thisis to ensure that we take a long-term view of the business,including our environmental performance,alongside our social impact while delivering an exceptional custome
185、r experience to everyone who interacts with Countryside.We already have very strong engagement with communities andin sustainable development.We will be continuing to evolve our approach to sustainability in 2021 with key targets to support delivery of our business strategy.During the year,we increa
186、sed the level of central control over key functions through the appointment of a number of Group Directors,covering Sales and Marketing,Commercial,Technical,Construction,Sustainability and Customer Services.These functions are shared across the divisions and report to various Executive Committee mem
187、bers.They are an investment in increasing consistency across all regions,as well as maintaining the quality of our production and customer service as our Group continues to grow rapidly.GROUP STRUCTUREAs we have put in place a clear plan to accelerate Partnerships delivery this year,we have reviewed
188、 our Group structure and the collective merits of,as well as our future plans for,each division.The Board regularly reviews its strategy for maximising long-term shareholder value from the Groups mixed-tenure business model.In July,we raised capital to accelerate the growth of our lower-risk,higher-
189、return Partnerships business.This capital allows us to add three new geographical regions to Partnerships and will facilitate its growth to deliver over 10,000 homes per annum when it reaches scale more than double its forecast delivery in 2021.Our Group capital allocation prioritisation is clear:th
190、at we will first allocate capital to the ongoing organic growth of Partnerships,including investment in the opening of new regional businesses in neighbouring geographies.In conjunction with Partnerships,we have an excellent Housebuilding business,with a strong presence in the resilient South East h
191、ousing market and a leading strategic land bank.Ourtwo divisions already operate largely independently of one another.We are GROWTH DRIVES MARGIN AND ROCE IMPROVEMENTStrategic report17Countryside Properties PLC Annual report 2020Our mixed-tenure model inPartnerships is highly differentiated and,give
192、n thegrowing demand and opportunity across the UK,we are uniquely placed to offer sectorleading growth rates over the medium term.”currently completing an internal reorganisation of our Group so that its legal structure more closely resembles its operational structure.As we look at the long-term pro
193、spects of the Housebuilding division,the opportunities to continue to grow its business may be restricted in light of the Boards capital allocation preference to prioritise the growth of the Partnerships business model.For that reason,we have appointed Rothschild&Co to advise the Board on the best t
194、ime and process to realise best value from the separation of Housebuilding from the Group,in order to optimise long-term shareholder value and provide the Housebuilding business with the right ownership and capital structure to maximise its potential.Both divisions in the Group will generate returns
195、 which are significantly ahead of their cost of capital.In this context,the Board has prioritised allocating capital to grow our lower-risk,higher-return Partnerships division.The recent investment in growth from our equity placing will take the number of Partnerships regions from nine to 12 and sho
196、uld allow us to deliver around 10,000 homes per annum when they are fully mature.We will only consider complementary acquisition opportunities after growing to maturity our existing regional businesses.Our new targets for 2023 are outlined below:PARTNERSHIPSHOUSEBUILDING GROUP COMPLETIONS20203,213 2
197、023c.8,000COMPLETIONS20204,053 2023c.9,500COMPLETIONS2020840 2023c.1,500ADJUSTED OPERATING MARGIN20205.2%202315%ADJUSTED OPERATING MARGIN20205.5%202315-16%ADJUSTED OPERATING MARGIN20207.0%202318%RETURN ON CAPITAL202013.0%202340%RETURN ON CAPITAL20207.1%202330%RETURN ON CAPITAL20204.9%202325%18Countr
198、yside Properties PLC Annual report 2020Group Chief Executives review continuedLOOKING THROUGH THE CRISISAs we look through the pandemic at the backdrop to the UK housing market,it is clear that the demand for good quality housing remains robust,across all tenures.While demand in the private for sale
199、 market remains strong and mortgage approvals have returned to pre-lockdown levels,there continues to be a significant degree of uncertainty as to whether positive sentiment will be maintained.Whilst interest rates remain low,there has been a reduction in mortgage product availability for higher loa
200、n-to-value products,driven by lender risk aversion and the potential threat of increased unemployment levels as a result of the ongoing impact of the pandemic.Private for sale housing accounted for only 36%of our total completions in 2020(2019:38%).Our target customer is typically a first-time buyer
201、 and a local owner occupier.We continue to target areas of economic growth and resilience,providing a range of housing types with a focus on creating a sense of place.Private for sale housing demand remains strong,supported in part by the Governments Help to Buy scheme,which continues to drive first
202、-time buyers to choose new build homes over the second-hand market.While Help to Buy is an important scheme for first-time buyers,because of our mixed-tenure approach it is used on 57%of our private completions which represents only 20%of our total completions.The stamp duty holiday announced in Jul
203、y 2020 will run until March 2021 and has provided some much-needed support to the second-hand market,which,in turn,has helped trade-up transactions in the new buildmarket.Affordable housing,particularly non-Section 106-driven,continues to be in strong demand from registered providers of social housi
204、ng.The Government announced that it would be addressing the lack of affordable housing through a 12bn affordable housing programme to deliver up to 180,000 new homes in the five-year period from 2021 to 2026.We retain our presence on the key delivery panels to access opportunities and continue to st
205、rengthen our relationships across the sector.There has been increasing interest from institutional investors to develop PRS housing across the UK and we have expanded our relationships with these investors into the Midlands and London.We will continue to develop these relationships as we expand our
206、geographic reach.While we have not seen any direct impact from the prolonged Brexit negotiations,we do anticipate further build cost increases from possible Sterling weakness and potential EU labour migration.We are addressing some of the risk by building strong relationships with sub-contractors an
207、d suppliers given our long-term visibility of work.Furthermore,we believe that off-site construction is integral to meeting our growth plans and securing our supply chain for the future and we have invested in this area through our two modular panel factories.OUR PERFORMANCEWe took the decision to t
208、emporarily close our sales offices,construction sites,factories and regional offices on 25 March 2020 following Government and Public Health England guidance as it became difficult to maintain adequate social distancing without adjustments being made to our workplaces.This was compounded by all part
209、s of the housing market closing,as customers were not allowed to move home,either to rent or buy.Although the Covid-19 pandemic has caused significant disruption to the business,particularly in the second half of our financial year,our mixed-tenure model has proved resilient with continued robust de
210、mand for all tenures of housing.We returned to phased construction activity from 11 May 2020,with an increased focus on affordable and PRS homes.This focus allowed us to generate revenue as soon as construction activity recommenced and provided greater certainty of work for our supply chain.Our site
211、s are now broadly operating at their normal delivery level,assisted by longer opening hours and sharp focus on the phasing of activity on site.Despite the national lockdown,our private sales activity remained robust throughout the year.Our net reservation rate of 0.78 for the full year(2019:0.84)was
212、 at the upper end of the Groups target range of 0.6 to 0.8,despite an elevated cancellation rate due to customer uncertainty caused by Covid-19.The healthy levels of activity seen earlier in the year gradually returned as we re-opened sales offices in June 2020,and since then we have seen a sustaine
213、d period of demand during the summer as the market recovered from the lockdown.We anticipate a reduction in our net reservation rate in the first half of 2021 given our strong forward sales position entering the year and new outlets not due to open until the spring.In addition,our mixed-tenure growt
214、h plans have been further underpinned by two new framework agreements signed in Q4.This includes the expansion of our partnership with Sigma Capital alongside its new investment partner,EQT Real Estate,to deliver 367 homes as the initial phase of a larger London PRS framework.In addition,we signed a
215、 new PRS framework agreement with Goldman Sachs to deliver up to 1,000 PRS homes over the next three years.This will initially include 410 homes across three sites in Bicester,West Bromwich and Wolverhampton.Since year end we have also signed an agreement with Places for People to deliver up to 10,0
216、00 homes nationally over the next 10 years.We are committed to creating places that make lifebetter for peoplewe launched a 1m Communities Fund to ensure that local people got help quickly when they needed it.”Strategic report19Countryside Properties PLC Annual report 2020Despite the operational cha
217、llenges we made significant progress on our strategic priorities during the course of 2020,including putting thestructures in place to deliver our ambitious growth plans as outlined in July alongside our equity placing.We have appointed two new Divisional CEOs to run the Partnerships North and Partn
218、erships Midlands divisions following the decision to split the Partnerships North division into two as announced in July.This gives us significant bandwidth across our Executive Committee to manage our growth.We have also appointed new regional management teams for the new Partnerships regions cover
219、ing the South West of England and South London witha number of roles coming from internal promotions,demonstrating the success of Countrysides investment in growing our own talent and focus on succession planning.In Housebuilding,we announced that our Millgate region was being closed with developmen
220、t transferred to our Housebuilding West region as we look to balance the profile of the division around London to realise synergies and futureefficiencies.We have made further progress in positioning the business to be sustainable for the long term by increasing our focus on our environmental impact
221、,along with the use of the Social Value Portal to measure the impact of our developments on local communities during the year.We have also continued our focus on build methodology,with a study carried out during the year demonstrating that our modular panel homes reduce embodied carbon by an estimat
222、ed 25%(12,700kgCO2e)when compared with one of our traditional brick and block homes.We arecontinuing to invest in our manufacturing capability and commenced construction of oursecond modular panel factory in Bardon,Leicestershire,during the year.This combined with our existing modular panel factory
223、in Warrington will give us capacity to deliver up to 5,000 modular homes per annum supporting growth in our regional businesses.We also plan to extend timber frame construction to the South East which will improve build times and enhance asset turn.We are committed to creating places that make life
224、better for people.To recognise the challenges our communities have faced as a result of Covid-19,we launched a 1m Communities Fund to provide support for local initiatives andcharities such as food banks,to ensure thatlocal people got help quickly when they needed it.With the effects of pandemic lik
225、ely to be with us for some time,I am delighted to confirm that the fund will continue into 2021 with a further 1m of support pledged providing essential support to the most vulnerable people in the areas we work.Our customer satisfaction rating as measured independently by the NHBC Recommend aFriend
226、 score was 90.6%(2019:92.5%)and we were delighted to be awarded five-star builder status by the HBF for the first time in Countrysides history.This rating is underpinned by our build quality score,again measured independently by the NHBC at key stages during the construction process.This stood at 0.
227、22 reportable items per plot visit(2019:0.21),equivalent to one remedial item per five inspections,significantly better than the industry benchmark.Throughout the year,the health and safety of our employees,sub-contractors and customers has been our priority.Despite the challenges ofimplementing new
228、 Covid-19 standard operating procedures,our health and safety performance has slightly improved this year with the Accident Injury Incident Rate(“AIIR”),standing at 224 per 100,000 people at risk(2019:227)compared with the national average of 416(2019:405).The Grenfell fire tragedy has understandabl
229、y led to a substantial range of changes within Countryside to reflect the industrys increased focus on fire safety measures and the Governments guidance on ensuring adequate fire protection measures are in place for all buildings and external wall systems.During 2020 we concluded an independent fire
230、 risk assessment of all multi-occupancy buildings built by Countryside in the last 15 years.Nobuildings were identified as high risk orrequiring immediate remediation.As the business has grown,we have constantly sought waysto ensure that our culture and values do not become diluted,but are enhanced
231、with new regions,people and partners.During 2020,we undertook a detailed review of our purpose and values with our people to help us define what it means to work for Countryside.We hope this willset our culture to support the ambition to deliver along-term and sustainable ethical business plan,where
232、 weare able to deliver to the aspirations of everyone thatinteracts with Countryside.Our values,which were launched internally in November 2020,emphasise our commitment to do things the right way,which means caring about what we do,working together,taking pride in what we do and focusing on delivery
233、.OUTLOOKWe have started the new financial year in a strong position to recover from the impacts ofthe pandemic and the resulting economic uncertainty.We have a robust balance sheet and excellent visibility of future work through our record order book across all tenures.Weare 70%forward sold for 2021
234、 and due toour strong forward sales position,our net reservation rate for the first nine weeks of the year is lower than the same period last year.Asa result,subject to no material changes in market conditions,we are on track to deliver atthe upper end of consensus operating profit expectations for
235、2021.After two years in which our weighting of delivery was skewed heavily to Q4,we expect to return towards amore balanced profile this year.I am incredibly proud of how our employees have reacted to the challenges as a result of thepandemic.Despite facing a rapidly changing environment and disrupt
236、ion to normal working practices,our people have shown incredible resolve and perseverance as they have continued focus on serving our customers and ourcommunities.Iain McPhersonGroup Chief Executive2 December 202020Countryside Properties PLC Annual report 2020Group Chief Executives review continuedW
237、HAT ARE THE KEY PRIORITIES FOR 2021 AND HOW WILL YOU DEVELOP THE GROUP STRATEGY?We set out an ambitious growth strategy along with our equity placing in July 2020,building on the successful growth within our Partnerships division to date.One of the key priorities in 2021 will be setting the Group up
238、 to deliver on these aspirations.This includes establishing the three new Partnerships regions in the South West,Chilterns and South London,accelerating delivery on a number of key sites and getting our second modular panel factory,based in Bardon,Leicestershire,on stream.Modular build and more gene
239、rally modern methods of construction are going to continue to be a key focus for the Group going forward as we look to not only meet changing regulations but reduce the impact our business has on the environment.With the recent appointments of a Group Sustainability Director and Group Technical Dire
240、ctor in newly created roles we look forward to making further strides on this and streamlining efforts across the Group.We are also managing the impacts of Covid-19 and are aiming to get all regions to maturity,with a renewed emphasis on driving efficiencies and operating in line with standard Group
241、 processes.During 2020,we undertook a number of key projects looking at our purpose,values and sustainability vision across the Group.I am delighted to say that we had great employee engagement across all three of these projects and it is clear that we have some high quality and dedicated employees
242、across the Group.Embedding these new values and setting an updated,more focused sustainability strategy will be key priorities in2021.I am incredibly proud of how our employees and ourbusiness more generally reacted to the rapidly changing environment asCovid19 took hold.”HOW DO YOU FEEL THE BUSINES
243、S RESPONDED TOCOVID19?I am incredibly proud of how our employees and our business more generally reacted to the rapidly changing environment as Covid-19 tookhold.Our first priority was to protect our staff,customers,supply chain andthe general public and we took the decision to temporarily suspend p
244、roduction on our sites and in our factories and close our offices and marketing suites.We suspended activities for around two months on our sites,returning to site in May albeit with initially reduced build rates as we adjusted to new ways of working.By the end of the year we were back up to over 95
245、%productivity across the Group and are positioned well as we enter 2021.We were proud to become a signatory of the Covid-19 Business Pledge,created to support millions of people across the world in light of the coronavirus outbreak.The pledge looks to show our commitment to supporting our employees,
246、customers and communities.One of the ways we responded to the challenges our communities were facing was the creation of a 1m Communities Fund to support the most vulnerable people in our communities.We actively worked with our partners to identify local charities and groups,food banks and others pr
247、oviding essential local services in locations where Countryside operates.HOW WILL YOU ENSURE THE BUSINESS RECOVERS FROM THE IMPACT OF COVID-19?There are a number of angles to this,from ensuring that we are meeting the needs of our employees,partners,suppliers and customers to ensuring that we have t
248、he financial strength to deliver our growth plans.Firstly,we recognise that our people are our most important asset and supporting them as we continue to work through the pandemic remains a key priority.We will continue to ensure that they remain connected and motivated whether working remotely,on s
249、ites or in our factories which will help set the business up for success in the future.Secondly,during the year we managed our working capital to preserve cash and,following the placing,ended the year with 98m of net cash,providing us with confidence to deliver our growth plans even if we were to se
250、e another period of lockdown or more challenging economicconditions.Thirdly,throughout the period of lockdown and since returning to site we have ensured that we have maintained a good dialogue with our suppliers and partners.We have focused on our relationships within the existing supply chain,cont
251、inuing payments throughout lockdown as well as offering training and surveys to ensure that they were comfortable with our Covid-secure working practices and providing peace of mind that health and safety is at the heart of our response.Lastly on this question,our business handled the switch from be
252、ing physically present in our offices and sales and marketing suites to remote working remarkably well and we were quickly able to transition to working from home and taking virtual reservations or doing virtual home tours at the end of March.This has highlighted the importance of our IT infrastruct
253、ure and we will continue to invest in that to ensure our business can operate flexibly going forward.Q&AWITH IAIN McPHERSONGROUP CHIEF EXECUTIVEStrategic report21Countryside Properties PLC Annual report 2020Strategic reportmethodology shown to reduce embodied carbon by around 25%.Weare working on re
254、placing gas boilers with more sustainable heating sources,installing electric charging points in a large number of homes andensuring developments are well connected with transport nodes.On biodiversity,on our larger sites we team up with key partners such as The Land Trust at our development at Beau
255、lieu,Essex,to establish green spaces and diversity across the developments.We carry out biodiversity studies on all our developments and where possible use biodiversity to benefit both the wildlife and the local communities,an example being at Royal Hill Park,Surrey,where landscaping is used to help
256、 partially sighted residents navigate their surroundings more easily.Our mixed-tenure model means that we work closely in partnership with key organisations such as local authorities,housing associations and charities to help address social inequality through the provision of training and high quali
257、ty homes which offer a range of affordable homes for local people.In summary,we have a focus on“making lives better”for local residents.WHAT ARE THE CAPITAL ALLOCATION PRIORITIES FOR THE GROUP GOING FORWARD?Our capital allocation priorities remain largely unchanged.We continue to focus on ensuring t
258、hat we pursue organic growth of Partnerships,to grow to maturity in all regions across both divisions to generate the bestreturns possible for our shareholders.Our ambition is to grow the Partnerships division to 8,000 homes by 2023 through reaching scale in our newer regions and delivering plans to
259、open three new regions during2021.In addition to growth we continue to invest in the business for the longer term including in our factories mentioned above.We believe that this will give us a competitive advantage over time with improved build quality,speed of delivery and security over our supply
260、chain which will benefit the whole Group.Any additional cash that we do not require for growth will be returned to shareholders.Iain McPhersonGroup Chief Executive2 December 2020HOW WILL YOU MANAGE FUTURE MARKETOPPORTUNITIES?The UK housing market continues to suffer from structural undersupply wheth
261、er for private homes,affordable homes or homes for the private rented sector.The sector remains well supported by the Government with schemes such as Help to Buy,offering assistance to first-time buyers until 2023,and the affordable homes funding package,which provides grants for the provision of af
262、fordable homes until 2026.The benefit of the Countryside business model is our agility;we can adapt quickly to changing market conditions and indeed we have done this for delivery in 2021 by planning to increase the proportion of affordable and PRS homes,ensuring we have greater security over ourcas
263、h flows in an uncertain economic environment.We have a strong pipeline of work in both divisions.Within Partnerships we have over 42,000 plots within our secured work and within our Housebuilding division our strategic-led land bank of over 25,000 plots offers us flexibility over our delivery progra
264、mmes.We recognise that customer needs are changing in light of the pandemic,for example with more people now working from home.We regularly use customer feedback to ensure our homes meet customer requirements.In particular we operate good space standards and our homes tend to be larger than most off
265、ering a home working space and ultra-fast broadband as standard.We have worked hard to ensure that our homes remain affordable for local owner occupiers whether they are looking to purchase in urban,suburban or rural environments,allowing the greatest reach to a broad customer base.Part of this has
266、been the journey that we have been on to manage the average selling prices of our private product over the past five or so years and in support of this we have closed our Millgate business,with our Housebuilding West region taking over its developments to provide homes at a wider range of affordabil
267、ity.We continue to expand relationships with both new and existing partners,to produce high quality design and construction of new homes.We announced a number of new frameworks with PRS providers and housing associations in 2020 and look forward to delivering and expanding these agreements over the
268、coming years.WHAT IS YOUR RESPONSE TO KEY SUSTAINABILITY ISSUES IMPACTING THE GROUP?During 2020 we undertook a significant review of our sustainability activities,both in terms of our current focus along with a review of the impact of broader sustainability issues.We have significantly upskilled our
269、 sustainability function including the recruitment of a Group Sustainability Director,who reports directly to the Executive Committee member responsible for corporate affairs.As part of our review,we identified four main areas of sustainability focus:climate change,biodiversity,social impact and aff
270、ordability.One of the ways we are addressing the first issue of climate change is ourinvestment into new technologies including modern methods of construction such as our investment into modular panel construction.We are currently building our second modular panel factory with the In addition to gro
271、wth we continue to invest in the business for the longer term including in our factories.We believe that this will give us a competitive advantage over time with improved build quality,speed of delivery and security over our supply chain which will benefit the whole Group.”FOCUSED ON SUSTAINABLE GRO
272、WTHSTRATEGIC PRIORITYOUR APPROACHGROWTH SECTOR-LEADING GROWTHWe aim to deliver sector-leading growthfrom our mixed-tenure delivery inPartnerships and develop our industry-leading land bank inHousebuilding.RETURNS SUPERIOR RETURN ONCAPITALOur ambition is to deliver superior returns through leveraging
273、 our low capital Partnerships division and improving operational efficiency through greater scale in our Housebuilding division.RESILIENCE THROUGH THE CYCLE PERFORMANCEOur strategy is to maintain a position offinancial strength while growing the business and generating superior returns,through the c
274、ycle,by focusing on mixed-tenure delivery,particularly withinPartnerships.SUSTAINABILITY TAKING A LONG-TERM VIEWOF OUR BUSINESSOur strategy is to deliver the right solutions for our partners and customers with a responsible and sustainable approach that creates a positive legacy.Growth in sites unde
275、r construction andopen sales outlets Accelerated build from mixed-tenure delivery Private selling prices set to target areas ofstrongest demand Geographic and organic growth of Partnerships Revenue growth from increased volume Focus on improving gross margin over themedium term Improved operational
276、efficiency from greaterscale Use of modular panel construction toincrease asset turn Lower capital model in Partnerships todeliver higher returns Agile model allows flexibility through thecycle,protecting returns Increased focus on Partnerships allows forgreater flexibility Mixed-tenure development,
277、with private,PRS and affordable homes Prudent balance sheet with managed levelofgearing Flexible strategic land bank based on options Strong pipeline of future Partnerships work which underpins growth New developments created with our placemaking expertise focused on long-term positive outcomes Expe
278、rts at regeneration and working closely with communities Record of incremental environmental impact reduction and social value generation Strong culture of ethical and responsible decision makingOur strategy22Countryside Properties PLC Annual report 2020Fresh Wharf,BarkingModular Build FactoryFresh
279、Wharf,BarkingBeaulieu Oaks,Chelmsford2020 HIGHLIGHTSOUTLOOK OVER THREE TO FIVE YEARS Implement enhanced growth strategy with three newregions Focus on the continued growth in sales outlets Continue to focus product on areas of strongest demand Manage sales values to maintain affordability Target net
280、 reservation rate between 0.6 and 0.8 Flex the tenure mix depending on levels of demand Return to target gross margins across the Group following the impact of Covid-19 Improve operational efficiency through greater scale Maintain capital discipline to drive ROCE improvement Investment in growth whi
281、le managing gearing levels Continue to consider shareholder return policy Maintain ratio of Partnerships wins to plots completed at2:1 or higher Grow the Partnerships pipeline of future work Continue to focus on mixed-tenure developments Target a cash-positive position at year ends Maintain our stra
282、tegic-led Housebuilding land bank Mobilise Partnerships sites and accelerate development where possible Launch a new approach to sustainability Set science-based targets Committed to Task Force on Climate-related Financial Disclosures disclosure by 2022 Prepare for changes in the regulatory environm
283、ent,particularly the use of non-fossil fuels in homes and net biodiversity gains on sites Continued investment in modern methods of construction including modular panel capabilities Focus on measuring social impact of our developments Only 36%of completions from private homes Private ASP to 364,000
284、as a result of some house price deflation within the Housebuilding division,partially offset by a shift in mix within Partnerships Growth in the new South Midlands and Yorkshire regions,contributing 466 units Equity placing in July to facilitate further growth in Partnerships Adjusted operating marg
285、in reduced by 1,100bps to 5.5%reflecting changing mix ofbusiness and impact of Covid-19 3,070bps reduction in ROCE reflecting impact ofCovid-19 No interim dividend paid or final dividend recommended Prioritised delivery of affordable and PRS homes upon return to site Net cash position of 98m at year
286、 end withadjusted gearing(including deferred land payments as debt)of 9%76%of Housebuilding land bank controlled via options or conditional contracts Undertook an exercise to review our sustainability ambition and vision Hired a Group Sustainability Director into anewly created role to upscale the t
287、eam and raise awareness in the business Measured social impact on all ourdevelopments Launched 1m Communities Fund Commissioned a carbon lifecycle study ofour timber frame homesAverage open sales outlets63during 2020Net reservation rate0.78within our target rangeAdjusted operating margin5.5%Adjusted
288、 operating profit54.2mHomes64%were affordable or PRSPlots11,374added to our Partnerships future work385sustainability and design-related awards since 2000127sites assessed for social valuecontributionStrategic report23Countryside Properties PLC Annual report 2020OUR 2020 PERFORMANCEOur performance i
289、n 2020 has been significantly impacted by the Covid-19 pandemic and this is reflected in the majority of our KPIs.Thehealth and safety of our people and supply chain,together with the quality of the homes we build,remains vitally important to our business and the KPIs measuring these aspects of our
290、performance have remained strong this year.Our KPIs are designed to ensure that we remain focused on delivering sustainable growth in volumes whilst delivering superior shareholder returns within the framework of a robust balance sheet.We also ensure that the pace of growth does not compromise build
291、 quality,customer satisfaction or the safety of those working on our sites.TRANSPARENT MEASURES TO REWARDPERFORMANCEWe have maintained a consistent set of KPIs atall levels of the business to ensure that all ofour people understand what drives value forour shareholders.There is a clear link between
292、performance against our financial and non-financial KPIs and remuneration through our Group bonus scheme which has targets including adjusted operating profit,adjusted operating margin and our NHBC Recommend aFriend score.Links to remuneration are highlighted by the appropriate icon.Further informat
293、ion on remuneration can be found on pages 90 to 105.MEASURING PERFORMANCEWe use 11 key performance indicators tomonitor our progress against our strategicobjectives.COMPLETIONS#4,053-29%162,6573,3894,2955,7334,05318171920The number of homes sold in the financial year,including our share of joint ven
294、tures and associate completions.For private homes,this is the number oflegal completions during the year.For affordable and PRS homes,this represents the equivalent number of units sold,based on the proportion of work completed under a contract during the year.PERFORMANCECompletions decreased 29%in
295、2020 reflecting site closures in response to Covid-19and resulting build delays.We were able to mitigate some of the impact ontotal completions through re-programming delivery on our sites to focus on affordable and PRS homes in place of private homes which could not feasibly have been built ahead o
296、f the end of the year.On average,sales outlets increased by 7 to 63 and our private net reservation rate of 0.78 was at the upper end of our target range(2019:0.84),resulting in a record private forward order book of 528m at the year end(2019:241m).LINK TO STRATEGYGrowth in completions is key to del
297、ivering our medium-term growth objectives.Revenue consists of sales proceeds for private homes and contractual payments for affordable homes and PRS units as well as the proceeds from land and commercial sales and project management fees.Adjusted revenue includes our share of revenue from our joint
298、ventures and associate.PERFORMANCEAdjusted revenue decreased by 31%to 988.8m in 2020(2019:1,422.8m)asour completion numbers reduced during the year.Private ASP was broadly flatat 364,000(2019:367,000)reflecting house price deflation of around(2.5)%in Housebuilding being partially offset by mix withi
299、n Partnerships.LINK TO STRATEGYAdjusted revenue is a key measure of the growth the business has delivered.ADJUSTED REVENUE m988.8m-31%16777.01,028.81,229.51,422.8988.818171920Adjusted operating profit divided by the average of opening and closing tangible net operating asset value(“TNOAV”).TNOAV is
300、calculated as TNAV excluding net debt or cash.PERFORMANCEThe closure of sites in response to Covid-19 resulted in completions originally programmed for the end of the year being delayed into 2021;this has led to a reduction in asset turn to 1.3 times(2019:2.3 times).To ensure the business operated a
301、s efficiently as possible,several mitigating actions were taken including shifting delivery to focus on our affordable and PRS revenue streams,deferring land spend and slowing build programmes in order to prevent a build-up of inventory.LINK TO STRATEGYReturn on capital employed is a key measure of
302、our improving returns to shareholders.RETURN ON CAPITAL EMPLOYED%7.1%-3,070bps1626.830.637.437.87.11817192024Countryside Properties PLC Annual report 2020Our key performance indicatorsThe number of plots owned or controlled by the Group on which homes can bebuilt.PERFORMANCEOur land bank increased b
303、y 4,118 plots during the year as we continued to addtothe Partnerships land bank with significant new business wins and also strengthened our Housebuilding land bank to 25,042 plots.28,775 plots of the Groups land bank has planning permission(2019:27,312 plots).The Group wasactive on all sites which
304、 had animplementable planning permission.LINK TO STRATEGYWinning Partnerships contracts and securing land atthe right price are key todelivering our target returns,ensuring a supply of land to fuel the growth ofourbusiness.Group operating profit including our share of associate and joint ventures op
305、erating profit and excluding the impact of non-underlying items.PERFORMANCEAdjusted operating profit decreased by 77%to 54.2m(2019:234.4m)principally due to the impact of Covid-19 on both volumes and costs.LINK TO STRATEGYSustainable growth in adjusted operating profit helpsus to achieve our growth
306、plans and to build aresilient balance sheet.Strategic report25Countryside Properties PLC Annual report 2020GEARING%(9.0)%-80bps16(2.0)(11.2)(5.7)(8.2)(9.0)18171920Net debt divided by net assets.PERFORMANCEFollowing our equity placing which raised 250m of gross proceeds in July 2020,we ended the year
307、 with net cash of 98.2m up from 73.4m in 2019.This,combined with an increase in TNAV,resulted in gearing of(9.0)%(2019:(8.2)%).Adjusted gearing,which includes deferred land payments as debt,was 8.7%(2019:9.4%).LINK TO STRATEGYMaintaining the Groups gearing level at an appropriate level means that we
308、 maintain a resilient balance sheet which helps us to manage the business through the economic cycle.LAND BANK#PLOTS53,118 plots+8%1627,20434,58143,52349,00053,11818171920ADJUSTED OPERATING MARGIN%5.5%-1,100bpsAdjusted operating margin divided by adjusted revenue.PERFORMANCEAdjusted operating margin
309、 decreased by 1,100bps reflecting a combination of Covid-19-related costs,our decision to continue to invest in our growth strategy and operational efficiencies which benefited margin in 2019.In response to the Covid-19 pandemic,we put in place stricter hiring,contracting and payment approval proces
310、ses to protect our operating margin,whilst maintaining our ambitious growth strategy.LINK TO STRATEGYImproving adjusted operating margin helps us to deliver increasing returns toshareholders.ADJUSTED OPERATING PROFIT m54.2m-77%16122.5165.3211.4234.454.218171920Links to strategyRESILIENCESUSTAINABILI
311、TYGROWTHRETURNSLinks to remunerationLONG-TERM INCENTIVE PLANANNUAL INCENTIVE AWARD1615.816.117.216.55.518171920TANGIBLE NET ASSET VALUE m951.7m+29%16537.4632.3620.1737.8951.71817192026Countryside Properties PLC Annual report 2020Our key performance indicators continuedNet assets excluding intangible
312、 assets net of deferredtax.PERFORMANCEThe increase in TNAV reflects the equity placing in July 2020 and retained profits.Our growing balance sheet adds to the Groups resilience.LINK TO STRATEGYGrowth in TNAV is a key measure of the success ofour strategy to grow thebusiness.NHBC REPORTABLE ITEMS(“RI
313、s”)0.22+5%Defects reported per plot in NHBC inspections at key build stages.PERFORMANCEThe number of reportable items per inspection was broadly unchanged during theyear as we continue to focus on the quality of our build.This remains below the industry average of 0.23.LINK TO STRATEGYBuilding homes
314、 to a high standard helps minimise customer care issues and maintain our reputation for high quality homes.The strength of our reputation underpins our ability to grow the business.160.230.210.220.210.2218171920ACCIDENT INJURY INCIDENT RATE(“AIIR”)224-1%NHBC RECOMMEND A FRIEND SCORE%90.6%-190bps1630
315、522016222722418171920The number of accidents per 100,000 people at risk during the financial year.PERFORMANCEWe have continued our focus on health and safety,with particular attention onCovid-secure methods.We maintained the AIIR below the industry average for the 17th consecutive year.Overall,our A
316、IIR was 224(2019:227)compared to the Health and Safety Executive national average of 416(2019:405).During 2019 we introduced a new accident and safety observation reporting system to identify any trending issues morequickly.LINK TO STRATEGYOur focus on health and safety helps keep our sites safe whi
317、lst operating at the pace we need to grow the business.The percentage of customers returning an NHBC post-completion customer care survey who would recommend Countryside to a friend.PERFORMANCEDuring 2020 we continued to focus on our customers experience across all levels of the business.Overall,90.
318、6%of our customers said they would recommend us and,if maintained,will result in five-star status when officially announced in February 2021.This is an area we will continue to focus on going forward with customers at the heart of our business.LINK TO STRATEGYAs a key indicator of our reputation in
319、the market,the NHBC Recommend aFriend score helps us to monitor the sustainability of our growth plans.84.888.684.692.590.61817192016Strategic reportKEY WORKERS MOVE SAFELY DURING LOCKDOWNA couple from Manchester overcame the odds of lockdown and moved safely into their new four-bedroom detached hom
320、e atCountrysides Belmont Place in HindleyGreen,Wigan.Mat,who has bought his dream home with partner Bart,had a rollercoaster couple of months having been fast-tracked through his final year of nursing training to become a theatre nurse at Salford Royal hospital during Covid-19,while Bart continues h
321、is role as an ICU community nurse.Mat believes being settled in their new home has helped them cope during the crisis,but they werent always sure it would be possible.Mat explained:“We completed in late March but thought moving would be impossible until after lockdown.We then discovered a newremoval
322、s system where contact with anyone else is removed.Acontainer is dropped off,left for us to fill and lock up and its thenpicked up and dropped outside the new home ideal for socialdistancing and completely safe.”After selling their flat in Manchester city centre,the pair found the perfect location f
323、or their outdoor lifestyle and careers.Mat added:“Belmont Place is in a beautiful location and were close to several major hospitals.We already love the community here too.We moved in during lockdown so havent been able to meet with our neighbours properly but everyone has been incredibly welcoming.
324、”Mat explained why they chose a new build with Countryside:“After deciding to leave the city centre for a greener place to call home we looked at lots of different developers and Countryside simply provides so much more as standard,from quality fixtures to the skylight windows in the bedroom and din
325、ing area.We cant wait to invite friends over when restrictions ease as the living space is perfect forentertaining!”Mat added:“Our move has been such a positive experience.After a year of change and upheaval,Countryside has still managed to make 2020 special for us and thanks to a safe moving proces
326、s were enjoying our new home already.We love it here.”Places People LoveOur move has been such a positive experience.After a year of change and upheaval,Countryside has still managed to make 2020 special for us and thanks toa safe moving process were enjoying our new home already.We love it here.”Cu
327、stomer case studyMat and Bart,buyers at Belmont Place,Wigan27Countryside Properties PLC Annual report 202028Countryside Properties PLC Annual report 2020Our business modelLower risk model with higher return on capital employedOur Partnerships division applies our master planning and design capabilit
328、ies in an urban environment,with public sector partners orthrough a mixed-tenure approach to accelerate delivery.Read more on pages 34 to 37Established platform forgrowth with strongpipelineOur Housebuilding division applies our master planning and design capabilities predominantly on strategically
329、sourced land through a plan-led approach to unlocking sites for development.These are often in partnership with private landowners or public sector partners in new gardencommunities.Read more on page 38 to 40DIFFERENTIATED,FLEXIBLE BUSINESS MODELWe have a differentiated,flexible business model with
330、our high-growth,lower risk Partnerships division and our strategic land-led Housebuilding division.Webuild quality homes and create Places People Love,utilising amixed-tenure model that delivers strong return on capital employed,with significant growth opportunities and sustainable returns for our i
331、nvestors.PLACES PEOPLE LOVEPARTNERSHIPSHOUSEBUILDING RETURNSGROWTHRESILIENCESUSTAINABILITYOperational performanceCustomers and partnersPeople and cultureCentral servicesHealth and safetySTANDARD OPERATING STRUCTUREETHICAL BUSINESS PRACTICEBUSINESS PARTNERINGDash,HoxtonRoyal Hill Park,SurreyStrategic
332、 report29Countryside Properties PLC Annual report 2020Ethical and responsible businessLink to sustainability strategyCustomers andcommunityGovernanceEnvironmentSupply chainOUR KEY RESOURCESOUR APPROACHTHE VALUE WE CREATE PEOPLEHighly experienced and motivated employees together with strong supplycha
333、in relationships.Link to strategyRead more on pages 46 to 50 LANDExcellent visibility offuture growthwith embedded value fromstrategic landand long-term developmentagreements.Link to strategyRead more on pages 34 to 40 REPUTATIONBuilt on transparency,proven development expertise and deliverythrough the cycle.Link to strategyRead more on page 62 PARTNERSHIPSEnduring relationships with local authori
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