Annual Report and Accounts 2006/7 - CEDA Repository

Management commentary
Management commentary
Key Performance Targets
120
118
116
114
112
110
For the second year running,
we have met all of our Key
Performance Targets (KPTs) –
a significant achievement.
The KPTs measure the accuracy
of our forecasts, our Commercial
Business profitability, Return on
Capital Employed and the
support we provide to
Government.
Forecast accuracy
We assess forecast accuracy against four
different measures:
Globally, we look at the performance of
our computer-based forecasting systems
using a Numerical Weather Prediction
(NWP) Index. This allows month-bymonth
comparisons of performance
and the graph below shows a sustained
improvement in the accuracy of our
forecasts since 1998.
Numerical weather prediction index
Target: 118.5 by March 2007
108
106
104
102
100
98
96
98 99 00 01 02 03 04 05 06
We also measure the accuracy of our
forecasts closer to home by comparing
24-hour forecasts of rainfall, minimum
temperature and maximum temperature
with what actually happened in 11
UK cities. These measures are very
dependent on the weather itself, but the
following graphs show that we continue
to make good progress in all three
elements.
Probability of precipitation – skill score
0.355
0.345
0.335
0.325
0.315
0.305
0.295
Target
PoP
Minimum temperature
81.5
80.5
79.5
78.5
77.5
76.5
Mar 05 Mar 06 Mar 07
Target
Min temp
Maximum temperature
84.2
83.2
82.2
Mar 05 Mar 06 Mar 07
Target
Max temp
Mar 05 Mar 06 Mar 07
Commercial profitability
The targets set for commercial
profitability remain challenging but we
are making steady progress towards our
goal of £12 million of commercial profit
by 2012. This year, the target was to
achieve £3.6 million of commercial profit
and we exceeded this by some £300,000.
Commercial profit (£k)
6,000
4,000
2,000
0
03/04 04/05 05/06 06/07
Return on Capital Employed (ROCE)
This year’s ROCE is 4% against an
in-year Key Performance Target of 3.5%.
Alongside this KPT we have a target set
by the Treasury to provide an average
ROCE of 3.5% over five years. Our current
average ROCE is 5.6% so we are meeting
this target comfortably.
ROCE history
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Actual
Average
Target
04/05 05/06 06/07 07/08 08/09
Support to wider Government goals
Building on last year’s success, we signed
multi-year agreements with most of our
major Government customers and
introduced new annual agreements
across an increasing number of other
government departments and agencies.
In many cases, the multi-year agreements
include efficiency savings or incentivised
pricing schemes that will bring significant
benefits to both the Met Office and
its customers.