Key performance indicators

Our strategy is simple: we manage our businesses through the property market's cycles, adjusting key investment and development activities ahead of changing conditions to maximise return and minimise risk.

In property investment, we add value through active management of assets and the timing of acquisitions and disposals. In development, we create the right product at the right point in the cycle while keeping a tight focus on cost and timing.

We work to turn our strategic objectives into tangible performance, using individual key performance indicators to measure our progress.

Objective:
Deliver sustainable long-term shareholder returns

Strategic priorities

  • Focus on the UK commercial property market's two largest sectors - London and retail
  • Ensure we have a clear plan for every asset and deliver on that plan
  • Make our shareholders' capital work as hard as possible, realising value and recycling capital whenever we see the right opportunity
  • Balance activity between development and property investment in line with changing market conditions

KPI for the year

  • Three year Total Shareholder Return (TSR) performance compared to the TSR performance (weighted) of a comparator group of property companies within the FTSE 350 Real Estate Index

Performance

  • TSR outperformance of 40.8% for the three year period from April 2013 did not match our comparator group at 45.3%

Objective:
Maximise the returns from the investment portfolio

Strategic priorities

  • Add value by being smart in the way we manage assets and time acquisitions and disposals

KPI for the year

  • 1 year and 3 year Total Property Return (TPR) performance compared to all March valued properties within IPD
  • 3 year TPR performance compared to the IPD Quarterly Universe, weighted to the sectors in which the Group is invested
  • Revenue profit to exceed a rebased internal threshold

Performance

  • Estimated outperformance versus the benchmark of 0.3% over 1 year
  • Marginally outperformed versus the benchmark over 3 years
  • Revenue profit of £362.1m was above a rebased internal threshold

Objective:
Manage our balance sheet effectively

Strategic priorities

  • Maintain tight financial discipline and an appropriate level of gearing

KPI for the year

  • Proceeds from the disposal of specific assets ahead of book value to fund our investment activity

Performance

  • Achieved. Target assets were sold at 103.5% of book value

Objective:
Maximise development performance

Strategic priorities

  • Create value through development by delivering the right product at the right point in the cycle, while keeping a tight focus on cost

KPI for the year

  • Progress development lettings within our development programme
  • Progress on planning applications

Performance

  • Mostly achieved. £33.8m of lettings in the year against a threshold £27.4m
  • Mostly achieved. Planning permissions obtained on five of the 6 assets targeted for the year

Objective:
Ensure high levels of customer satisfaction

Strategic priorities

  • Constantly deepen our understanding of the market and our relationships with customers, so we can anticipate and respond to change quickly
  • Deliver outstanding service in our shopping centres

KPI for the year

  • Maintain overall customer satisfaction rates in Retail and London customers surveys of 4 (out of 5) or over

Performance

  • Retail 4.3
  • London 4.3

Objective:
Attract, develop, retain and motivate high performance employees

Strategic priorities

  • Continually work to strengthen the reputation of the Company so the best people want to join and stay at Land Securities
  • Ensure talented people within the Company are well trained, supported and rewarded

KPI for the year

  • Embedding of the purpose, vision and values throughout the business with positive effect on engagement

Performance

  • Achieved. The Executive Directors led the embedding of purpose, vision and values in the company-wide series of presentations and workshops

Objective:
Continually improve sustainability performance

Strategic priorities

  • Make sound, long-term investments in our buildings to ensure their performance meets changing expectations and regulations, and generate sustainable returns in the years ahead
  • Develop positive relationships with local authorities and local communities, so people welcome our presence in their area

KPI for the year

  • Reduce the absolute energy consumption of our 5 largest energy consuming managed buildings by 15% by 2020 against a 2014 baseline
  • Zero waste to landfill (at least 70% recycled) across all operational and construction activities by 2020
  • Reduce the absolute water use of our five largest water consuming managed buildings by 15% by 2020 against a 2014 baseline
  • A further 170 people through training and into jobs via our Community Employment Programme
  • Leadership in gender and ethnic diversity
  • 100% of mandatory health and safety training and 80% of desirable heatlh and safety training completed within 6 months of joining

Performance

  • Reductions achieved at each property, resulting in an overall reduction of 15%
  • Diverted - 98.6%
  • Recycled - 72.0%
  • Reductions achieved at two office properties, increases seen at two retail properties, resulting in an overall reduction of 4%
  • A further 196 people through training and into jobs via our Community Employment Programme
  • An integrated plan around diversity has been launched, including the establishment of a sector wide working group led by Land Securities
  • Achieved. 100% of mandatory training and 98% of desirable training was delivered to all existing employees and to new employees within 6 months of joining
 31 March 201631 March 2015Change
Valuation surplus (1) £907.4m £2,036.9m Up 7.0%(2)
Basic NAV per share 1,482p 1,343p UP 10.3%
Adjusted diluted NAV per share (3) 1,434p 1,293p Up 10.9%
Group LTV ratio (1) 22.0% 28.5%  
Profit before tax £1,335.6m £2,416.5m  
Revenue profit (1) £362.1m £329.1m Up 10.0%
Basic EPS 169.4p 306.1p  
Adjusted diluted EPS(1) 45.7p 41.5p Up 10.1%
Dividend 35.0p 31.85p Up 9.9%

 

(1) Including our proportionate share of subsidiaries and joint ventures, as explained in the notes to the financial statements included within the Annual Report.
(2) The % change for the valuation surplus represents the increase in value of the Combined Portfolio over the year, adjusted for net investment.  
(3) Our key valuation measure.

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