Good morning, and thank you for joining us this morning. As usual, I want to begin by making some headline remarks before handing over to Mike, who will take us through the numbers. I'm really pleased we've achieved such strong performance in 2021. We've delivered more homes, built them at consistently higher standards, and we've grown underlying operating margin and profit at the same time. As well as selling nearly 1,000 more homes, we anticipate shortly achieving the first ever five-star HBF Customer Service Award in the company's history. From my perspective, and given where we've come from, that's significant progress. We've achieved this despite the ongoing challenges presented by the pandemic and Brexit with labor and material shortages and inflation in particular. We've also demonstrated that we can make progress on key areas for improvement while sustaining our industry-leading financial performance.
What's exciting is there's more to come, and I'll say more on this later. Let me make some introductions. I'm here with Martyn Clark, who's recently been promoted to Chief Commercial Officer, and he'll outline some of the priority areas within his new role. Mike Smith, Group Financial Controller, will take you through the detailed financial results. Julia Nichols, Group Strategy and Regulation Director, will also give you an overview of our sustainability work, which is clearly of growing importance to us. I'll hand over to Mike to take you through the numbers.
Thank you, Dean. Persimmon has again delivered a strong financial performance against a challenging backdrop that included the COVID pandemic, issues from within the supply chain, and tough prior year comparators. Our agile and experienced management teams nevertheless delivered nearly 1,000 more new homes than last year. These with stronger average revenues and delivered at industry-leading margins. In total, we delivered 14,551 new homes across the U.K. That was 7% more than last year and generated total group revenues of GBP 3.61 billion. GBP 3.45 billion of that was generated from the sale of these new homes. Underlying profit before tax stated before goodwill impairment and exceptional charges was 13% higher than last year at GBP 973 million.
That produced an after-tax profit of GBP 967 million and a strong cash holding of GBP 1.25 billion at 31st of December 2021. We saw a supportive housing market throughout 2021, with good levels of customer demand and a positive pricing environment as the next slide shows. Our full year average private sales rate per site for 2021 was circa 9% ahead of that achieved in 2020. A year which was significantly impacted by pent-up demand brought about by the pandemic. Compared to 2019, a more normal pre-pandemic year, that rate was ahead some 22%. A good performance regardless of the comparative years. Year-on-year volume growth was seen across both our sales into private owner occupier market and in the delivery of new homes to our affordable housing partners supporting government initiatives.
Our average selling price increased year-on-year by 3% to just over GBP 237 thousand. That reflected in part the combination of the mix of homes sold in the year and the increased proportion of homes delivered to our housing association partners. This positive pricing environment has helped the business to mitigate the cost inflation the industry has seen. All this, along with active control of the cost base, meant we achieved a 12% increase in our underlying operating profit and an underlying operating margin of 28%. A 40 basis point improvement on last year. Persimmon has a strong track record of delivering high levels of gross and operating margins, and last year was no exception. This delivery is underpinned by the embedded quality of our landholdings.
That's reflected in our land cost recovered to revenue ratio of 13.2% for the full year 2021, which was a 100 basis point improvement on the prior year. As a result, we've delivered an underlying housing gross margin of 31.4%. That's 40 basis points stronger than in 2020, which in turn has led to our industry leading 28% operating margin. Something we've worked hard to achieve through better build quality and operating efficiencies, which Dean and Martyn will cover. As we reported throughout last year, we've seen annual build cost inflation of around 5%, and that's in line with what we're expecting this time last year.
This level of bill cost inflation has been mitigated through the increased sales price I indicated earlier, disciplined control over the cost base, utilizing our vertical integration capabilities where we've been able to capture build efficiencies through the use of timber frames from our Space4 facility. Security of supply of key materials from our brick and tile works. I'd like to show now how our industry-leading margins are underpinned by the quality of our land holdings. In the year, we added over 20,750 new plots across 101 sites to our owned and under control land holdings, at a replacement rate of 143% when compared to 2021 volumes. Of these additions, almost 50% of the plots have been converted from our nationwide portfolio of strategic land interests.
By the end of 2021, we had just over 88,000 plots either owned with an implementable planning consent or working towards achieving such a consent. That provides us with six years of supply at current consumption rates, something that I think is very reassuring. Each new land opportunity is reviewed by our experienced land and planning team and is subject to strict acquisition criteria. With nearly one-third of our own plots estimated to deliver an average margin rate of at least 40% based on current revenue and cost expectations, and with the embedded margins across all our owned plots at 33%, our high-quality land holdings with industry-leading embedded margins provide the business with an excellent platform for future disciplined growth. I'd like to touch now on our strong platform going forward.
Our disciplined land replacement strategy, along with GBP 1.8 billion of land invested at 31 December 2021, underpin the group's balance sheet strength. Work-in-progress investments at just under GBP 1.1 billion provides a good platform for the delivery of new homes through 2022. With strong on-site management and an agile workforce, we've been able to build at pre-pandemic levels throughout 2021, something we're particularly pleased about. The impact of planning delays has affected our ability to progress build to an optimum level. As we enter 2022 with around 4,100 equivalent units of new homes constructed. All management teams remain fully focused on increasing build rates to help support the delivery of new homes to our customers, but they are all fully aware of the need to deliver these new homes at five-star quality and service levels.
The current build rates in the early weeks of 2022 continue to improve. That's allowing the business to turn its asset base quicker and support the delivery of industry-leading return on capital employed. Let me now turn to our continued strong cash position and how we're applying it. Strong trading, diligent control over the cost base, and the effective deployment of capital have resulted in the business generating over GBP 760 million of free cash before the return of surplus capital to shareholders. That's led to a cash balance at the end of 2021 of GBP 1.25 billion, and that will provide support to future growth and the capital return program.
As part of this measured deployment of capital, 460 million of land payments were made during 2021, including the settlement of 179 million of deferred land commitments. I'd just like to elaborate once again on the consistency of Persimmon's cash generation and its support for the business. The strong cash generation of 2021 is just another year of strong cash generation for Persimmon. The group has a strong track record of managing its working capital requirements effectively, generating from its operations on average over 900 million per annum over the last five years. That in turn has created an industry-leading cash position, and when adjusting for year-end deferred land commitments, an enviable net cash position well in excess of 800 million. All this provides strength to and certainty for the future of the business.
History and experience gives us confidence in the group's ability to manage the cyclical nature of the U.K. housing market. Over the last 15 years, the group has on average generated GBP 911 million of free cash before investment in land per annum, whilst delivering an average annual after-tax profit of GBP 411 million. That this includes the period between 2007 and 2010 where we experienced a period of recession following the global financial crisis. By applying a clear strategy to its land replacement and deployment of capital, Persimmon is well positioned to grow in a disciplined manner whilst maintaining its industry-leading returns, which takes me to the return of surplus capital.
The board continues to consider that under normal circumstances, cash holdings of 700 million at a reporting period end are appropriate for a business of our scale. It provides the right balance between ensuring appropriate liquidity levels are maintained to cover the group's working capital requirements and providing sufficient funds to take advantage of attractive investment opportunities as and when they arise. Having assessed and concluded on the availability of surplus capital for 2021, the board is reiterating its intention to return 235 pence per share in 2022. This will follow the same payment profile as seen in 2021 with the first payment, the regular payment of 125 pence per share to be paid on April 1, and the second payment, the top-up payment of 110 pence per share to be paid in early July.
Now obviously, these indicated payments will be subject to continuous assessment by the board in line with our strategy. Let me wrap things up from a financial perspective. I've looked to provide insight into the excellent performance that Persimmon has reported for the full year 2021, the continued financial benefits from the execution of its long-term strategy, and an insight towards a successful future for the business based on an industry-leading landholding and a track record of industry-leading returns. On that reassuring note, let me pass you back to Dean.
Thanks, Mike. I want to explain how we delivered these results. Persimmon has many great strengths that we've been enhancing to deliver and sustain our industry-leading performance. We hold a great position in the market. With average selling prices around 20% below the U.K. average, we're a powerhouse for first-time buyers, and we're widening the opportunity of homeownership to thousands of families every year. The strength of our landholdings is widely acknowledged. We're a nationwide network with industry-leading embedded margins. Through increased investment, we bought in nearly 21,000 new plots across 101 sites, and as Mike's presentation showed, at our best ever cost to revenue percentage. We have well-established management teams across the business. They bring their expertise to bear to drive innovation and industry-leading approaches that have underpinned our success.
Our factories, Space4, Brickworks, and Tileworks also provide us with security of supply and helped us mitigate some of the cost inflation and on-site labor shortages seen across the sector. For me, these are great strengths and they've driven Persimmon's industry-leading performance. I've consistently said over the last 18 months, we need to build on them and enhance our focus in five key priority areas to sustain the group's performance. I'm glad that we can point to important signs of progress in all five areas. In build quality, our ambition is to build right first time, every time. Delivering homes of a consistent high quality for our customers is the right thing to do and a means to secure efficiency gains through remediation. I'm pleased that in the last year we've seen a 17% improvement in the number of NHBC reportable incidents. That's really important to me.
On reinforcing trust, we're determined to bring our customers into the heart of the business. That means focusing on them and doing what's right by them. The HBF eight-week survey again points to notable progress, as well as our anticipated first-ever five-star rating for the group when the results for the 2020, 2021 survey year are announced shortly. It's great that 28 out of our 31 operating businesses have themselves achieved five-star in the provisional results. There's of course further to go and we're determined to build on this momentum. It also underpins our disciplined growth plans as improved customer service and consistent quality mean we can meet demand with five-star credentials. While recognizing our unique position in the market, this will allow us to match our pricing to our improved reputation, and that will drive greater value.
Our land replacement rate of 143% during last year, while maintaining our industry-leading embedded margins, shows how we're strengthening our platform for growth. My fourth priority area is maintaining our industry-leading financial performance, sustaining our strong margins and our returns. The improvement in our underlying operating margin is testament to our continued progress. Finally, we demonstrated our commitment to sustainable communities. Julia will say more on the increasing importance of being seen as a responsible builder and company. In the last year, we were pleased, among other things, to have our ambitious carbon reduction targets accredited by the Science Based Targets Initiative. All of this progress in the year is designed to enhance our ability to compete in a changing market, while at the same time, sustain our industry-leading credentials.
As I've said, we hold a unique position in the market, and the next slide shows you why. Our average selling price and range of price points demonstrate the breadth of value and choice we offer, as you can see from the slide. As I said, we're a powerhouse for first-time buyers. Our improvements in customer service and consistent quality are designed to strengthen this position and also protect against future market pressures. With Help to Buy being withdrawn next year, our high quality, great value product delivered with excellent service will be an increasingly important asset and central to our growth plans. I think our market position provides us with a great opportunity here, as will our strengthened platform provided by our high quality land holdings. We've increased our investment in land over the last 18 months.
We've expanded the plots we own and those under control by nearly 21,000 across 101 sites. I'm really pleased with the quality of what we've bought. There are some great locations, and as I mentioned earlier, they're extending our industry-leading embedded returns, and we've achieved the best cost revenue percentage we've ever seen. Our strategic land portfolio has a potential of 100,000 new homes within it. As you can see from the map, we have a significant nationwide platform from which we can achieve our disciplined growth ambitions. We continue to target around 320 outlets by the end of the year, with 75 opening in the first half. That's going to provide growing momentum during the year and into next. This obviously continues to be a subject of planning, of course.
According to Glenigan's latest research, we had the most active planning program of any developer in 2021, and we're also stepping up our engagement with local authorities to secure approvals. Our land teams continue to scour the country for more opportunities alongside strong management teams that are driving forward our plans. It's these teams and how we're looking to develop them that I'd like to talk about now. There's an impressive breadth and depth of established and experienced operational teams across Persimmon. That experience is being used to identify opportunities as well as challenge and review practices to ensure we continue to strive for growth, produce consistent quality and service, and enhance operational efficiencies. We've invested in tailored training programs to develop both our leadership team and operational teams across the business.
I want colleagues and potential new colleagues to see Persimmon as a place where careers are built and ambitions are achieved. I've recently established a new senior operational management structure in order to both ensure consistent delivery across the business and further consolidate Persimmon's exceptional strengths. That, in turn, has promoted strong performers from within the business to ensure we're focused on growth and efficiency opportunities, while at the same time, also driving through the quality and service improvements we're targeting. One of Persimmon's great strengths is the depths of its operational management expertise founded on our people and their many years of service with the group. Martyn is one of the most senior leaders of the new structure, so I'm pleased to hand over to him now to outline some of this in more detail.
Thank you, Dean. Build more and build better is very much our theme at Persimmon, and I'd like to show a few slides as to how we're doing that on the ground every day. Build more, build better. Our absolute focus with our many construction teams across the country is to build right first time, every time. That will enhance and strengthen the brand, our product, and ensures that we stand out as providing great quality new homes at outstanding value without compromising on quality. Over the last 12 months, significant progress has been made in this area, and I'm really pleased, as Dean has said, that as well as trending above the 5-star threshold in the HBF Customer Satisfaction Survey, we fully anticipate that when the results are published later this month, we will achieve the 5-star rating.
While the survey is based on one key metric, we are keen to ensure we strive to improve in all measures within the survey. I'm particularly pleased to see that our quality rating, as scored by our customers, has improved by 11% over the last two years. These improved results are a testament to the hard work and commitment of all Persimmon employees, along with the wider supply chain and contractor partners. Now, continuing on my theme of build more and build better, let me just pick up on what we've previously described to you as the Persimmon Way. At Persimmon, we always strive to do better, and with the Persimmon Way now forming the backbone to our processes through continual assessment, adjustment, and development, we're able to identify areas of the build process that can be carried out better. That results in increased build and operational efficiencies.
So far in 2022, we have seen improving build rates compared to the same period of 2021. With that improving build rate, we've proactively enhanced the number of independent quality controllers to ensure our minimum quality measures are being adhered to. That's a 107% increase in 12 months. During 2021, along with other incentive programs, we ran our new internal Construction Excellence Award scheme. Having been extremely well received with all the site teams keen to demonstrate their sense of pride and commitment to their developments and the Persimmon Way, the final national result is eagerly anticipated. Finally, we continue to invest in the digitalization of site quality assurance processes to ensure appropriate tools are provided to all those involved in the construction of our new homes. I'd like to turn now to the increase in investment in innovation and technology.
As a company, we've been a long-serving advocate of the advantages of vertical integration. We started with our timber frame business, then we moved it onto the Brickworks, and more latterly with our Tileworks. It's clear that these companies have, as well as helping to secure continuity of supply, particularly over the last two years, have maximized the cost efficiencies available to us. In the case of the Brickworks, it's helping us work towards our stated ambition of delivering net zero carbon homes. Space4 is our well-proven timber frame manufacturer, the benefits of which are well known to us, improve site productivity and capacity, as well as placing less reliance on traditional on-site skills. Following a further review of the Space4 business, we're now going to invest in new facilities with updated technology.
That'll enable us to consider more off-site manufacture techniques, aiming to reduce build programs by up to 5 days per home. Still on the theme of vertical integration, let me talk about bricks and tiles. Our brick factory, now well established, has the potential to provide up to two-thirds of the current group annual brick requirement. Given this, we're aiming to increase output by 25% in 2022 to help meet the demands of our current and new developments across the U.K. Our roof tile factory, sitting alongside our brick factory, has continued to be a success with 227 Persimmon sites supplied across 2021. We anticipate further growth in 2022, utilizing our enhanced range with output increasing by 50%. I'd like to finish by talking about FibreNest and broadband, a key utility.
Our customers expect us to have a fast, reliable broadband service to their new home. Persimmon is the only U.K. house builder with a dedicated fiber company set up specifically to meet our customers' expectations. As I said, FibreNest is a key utility. With a growing nationwide coverage, we now serve over 21,000 customers across 270 developments, and we've recently launched a wholesale division with the aim of opening up choice on our network. As well as a customer benefit, FibreNest is also clearly helping to deliver the government's broadband strategy. You can now see we are working across the board to drive consistent quality, greater efficiency, growth, and improved customer service to underpin our future success. We're making considerable progress. On progress, we're also making important strides in sustainability, and I now hand over to Julia.
Thanks very much, Martyn. As Dean mentioned earlier, we're demonstrating our commitment to supporting sustainable communities, recognizing the importance of contributing to delivering a net zero carbon economy and to adding real social value to the communities we work in and in providing a positive environment for our workforce. We've got a well-defined sustainability approach to deliver on this key priority for the business. I'm gonna take you through this approach and some actions we're taking over the next few slides. Our approach focuses on three key pillars. The first is building for tomorrow, recognizing that we need to play our part in achieving a net zero carbon economy. Secondly, transforming communities. This pillar looks at how we can create social value in our local areas. Thirdly, safe and inclusive.
We want to create a safe and inclusive culture focused on the well-being of our workforce, our customers, and our communities. All three pillars support our priorities and are embedded within our strategy and operations, ensuring we deliver value through them. I'm gonna take each in turn. We have a clear commitment in building for tomorrow. Last year, we set ourselves really challenging targets to reduce our greenhouse gas emissions. They come from three sources, the homes we build, our supply chain, and our own operations. We're targeting to deliver net zero homes in use by 2030 and net zero in our operations by 2040. We've established complementary interim science-based targets that cover all three sources of emissions. They're going to effectively sit alongside our net zero ambitions and will help us track our progress against them.
We're really pleased that these interim targets have been accredited by the Science Based Targets initiative, and they align with the Paris Agreement. In delivering on them, we'll be making a real contribution to the wider efforts to reduce emissions. We've got a number of initiatives already underway as we work towards delivering our targets. The Future Homes Standard, which is looking likely to come into effect in 2025, currently requires new homes to become around 80% more efficient than they currently are. Delivering on this new standard will help achieve our net zero homes in use ambition and, of course, will provide our customers with energy efficient, more economical, sustainable homes. We've got a number of projects underway to help us identify the most efficient and effective way of improving our homes' efficiency, and we're investigating new technologies to help achieve it.
Our most advanced project is the one at our Germany Beck site in York. We've built a zero carbon home using relatively traditional methods to identify the most effective way of building more energy efficient homes at scale. We'll be shortly welcoming tenants into the home, and the University of Salford will be working with us to see how the home performs and operates for a typical family. We're also beginning to look at the emissions from our supply chain. We've measured and reported on these emissions for the first time this year, and we're beginning to gather some information together to help us prioritize materials that we use in our builds that will have the greatest carbon impact, so we can target those effectively. In terms of our own operations, we're going to trial the use of alternative fuels on our sites, looking to reduce the use of diesel.
We're already taking a number of positive actions to reduce our emissions from our own operations. Martyn's already touched on how our vertical integration is helping. Our offices and manufacturing facilities are now supplied with 100% renewable energy. All electricity supplied to our plots and to our show homes is from renewable sources. We've introduced electric vehicle options into our fleet. There's real momentum within the business as we strive to achieve our challenging targets. I'll move on to our second sustainability pillar, where we aim to deliver social value to the communities we develop and the local areas we operate in. Our sites are designed in areas with good access to local amenities and provide open spaces and public areas for the local community to enjoy.
The houses we deliver are around one-third more efficient than existing housing stock, making them more economical to live in for our customers and providing a competitive product in the marketplace. Over the last five years, through planning contributions and the provision of affordable homes, we've invested around GBP 2.3 billion in local communities. In addition, through the Persimmon Charitable Foundation, we've donated over GBP 8 million to local charity groups. Dean's already talked about our improvements in build quality and customer service, which gives you a good indication as to how we're already embedding these sustainability pillars into our core operations and driving value across the business. For our third pillar, I'm just gonna focus on our commitment to our employees. We've created a comprehensive training program for our workforce.
That's delivered around 13,200 training days through 2021, supported by an online training program which has proved really popular among the teams. Persimmon became an accredited national vocational qualification assessment center, a first for a U.K. house builder, and it's led to a significant increase in the number of our site colleagues with a relevant NVQ. We came into the year with around about 21% with a relevant qualification and are leaving it with around 90%. We continue to invest in new talent with over 650 trainees and apprentices across the business, which represents around 13% of our workforce. We're really pleased to have become an accredited Living Wage Employer during the year. The group has voluntarily paid its own employees in accordance with the living wage criteria for the last few years.
First, in receiving full accreditation, now everyone that works on our sites or facilities, whether they're directly employed or not, will be rewarded fairly. Our colleagues may also need broader emotional support, particularly given the times we're currently living in. We provide regular mental health awareness courses and now have over 190 trained mental health first aiders across the group, providing support where it's needed. Each of our three sustainability pillars complement and help drive forward our key areas of operational focus and create further value across the business. With that, I'll hand back to Dean. Thank you very much.
Thank you, Julia. As the government's rhetoric and actions with regards to cladding demonstrate, there's a greater political interest in intervening in the industry and demanding certain behaviors. The government have introduced the concept of the responsible builder. I'm proud we led the industry last February. We made early our commitment that leaseholders in any multi-story development we built wouldn't have to pay for any necessary cladding removal or fire safety remediation. We've analyzed our records going back 30 years and identified 33 developments where works are required. We're in contact with the relevant management companies and building owners and are supporting them so that the works can be completed as soon as possible. Indeed, four of these developments have already secured successful EWS1 forms.
While there's a live negotiation with the department, our existing commitment to fix our own buildings without any recourse to the Building Safety Fund means we're very well placed to meet the government's demands. We'll continue to work positively with the HBF and government in the coming weeks to reach a conclusion. We were also the first house builder to agree voluntary undertakings with the Competition and Markets Authority. Being a responsible builder and a responsible company is at the heart of our approach, and I believe an increasingly important credential as we seek to achieve our growth ambitions. The market remains strong. Our forward sales are significantly ahead of this stage in 2020. Our weekly private sales rates per site are ahead of last year. We're opening more outlets to capitalize on this demand.
We expected to deliver between 4%-7% growth in new legal home completions this year. We anticipate a greater proportion of our homes will be delivered in the second half of the year, given the profile of our outlet openings. We expect to revert to a more normal split of completions this year, with around 45% delivered in the first half of the year and 55% delivered in the second half of the year. Throughout this growth, we expect to continue to deliver our industry-leading margin at around that we achieved in the full year of 2021, albeit reflecting a slightly higher affordable mix. You've heard how we're building on Persimmon's great strengths and focusing on the crucial new areas, but it's worth reminding ourselves why we expect to maintain the group's incredibly strong history of delivering industry-leading performance.
Persimmon has had unparalleled success in managing across the housing cycle the delivery of homes for our customers, as well as strong returns for our shareholders. Our ROCE and TSR are incredibly strong and the result of a relentless focus. To sustain and build on what we've been strengthening our position in key aspects, and I've already spoken about our land holdings and embedded margins. We continue to have strong cash generation and liquidity, and we'll maintain the disciplined approach that secured this performance in the past and strengthened it recently. Let me finish on these points. The environment the industry operates in is changing. It has in the past and it will in the future, and that's why we've taken our leadership position on key issues over the last year. We made important progress last year. We delivered a very good headline financial performance and have good momentum.
I set out a year ago that while Persimmon had a reputation for great value, I wanted to combine that with outstanding quality and service. With our progress on quality, customer service, and being recognized as a responsible builder, we are future-proofing the business. With value, service, and quality at consistently high levels, I believe Persimmon will be strongly placed to compete in a changing market. We're changing how we're seen in the market. We strengthened crucial assets within the business. We invested in our land holdings, enhancing our pipeline. We're also strengthening our tools to deliver. By investing further in our vertical integration, for example, we're giving ourselves more opportunity to achieve our growth, quality, efficiency, and green ambitions. We can build more, build better and faster, while also reducing demand for the skills and materials that the whole industry is facing.
Our significantly experienced and strengthened management teams in place across the country are using our strong platform and unique assets to deliver the homes our customers want and the disciplined growth Persimmon is known for. With our underlying margin and profit up, we've demonstrated that we're not sacrificing margin for growth. With demand remaining strong in the market, I'm excited by the future for this year and beyond.