Quarterly performance update

Clarion Funding plc

28 January 2025

 

Clarion Funding plc

The following amendments have been made to the quarterly performance update announcement released on 28 January 2025 under RNS No 9714U

The original pre-tax surplus figures provided were incorrect. The correct pre-tax surplus figure is £101.6 million and (2023/24: £46.4 million).

All other details remain unchanged.

The full amended text is shown below.

CLARION HOUSING GROUP Q3 2024/25 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 31 December 2024

Financial performance

The financial year to date has seen Clarion continuing to deliver a robust performance in a continuing challenging environment. The unaudited management accounts for the first nine months show a turnover of £807.2 million (2023/24: £720.3 million), with an operating surplus of £210.1 million (2023/24: £160.5 million) and a pre-tax surplus of £101.6 million (2023/24: £46.4 million). The increase in surplus has been driven by focussed cost control and a return to the inflation linked rent formula after the previous year's below inflation increase, along with an increased surplus on disposals. 

We have invested £ 69.7 million in existing homes in the financial year to date (2023/24: £ 96.7 million). The year-on-year variance reflects changes to phasing as a result of mobilising two new supply chain partners, more large project related work which has a larger pre-construction element including decarbonisation works, and some delays associated with obtaining Building Safety Regulator approvals.  We remain focussed on increasing our investment in our homes over the remainder of the year.

A total of £ 349.3 million was invested in our new homes programme (2023/24: £ 380.1 million), a small reduction compared to the same period the year prior due to some later starts on site.

Housing Fixed Assets stood at £8.84 billion, up from £8.66 billion as of 31 March 2024. Drawn debt at £4.59 billion is largely unmoved from £4.57 billion as of 31 March 2024. Liquidity remains strong with £1.26 billion available (31 March 2024: £1.06 billion), with committed and fully secured funding facilities of £5.78 billion (31 March 2024: £5.56 billion).

Since the last update, all three credit rating agencies affirmed our ratings. Moody's affirmed the Group at A3 (Stable), S&P at A- (Stable) and Fitch at A+ (Negative). While we were disappointed to receive a 'negative' outlook on our Fitch rating, we were pleased the agency acknowledged the improvement to our metrics observed to date in FY 2024/25. Clarion is one of only three UK housing associations with an A+ rating from Fitch, and the only one with a London presence and significant development programme.

Operational performance

Our independent surveys show overall customer satisfaction remains consistently above the Group's 80% target and was last measured at 83.1%. Repairs performance remains good, with the most recent satisfaction score at 89.6% (internal target: 85%).

Rent arrears have continued to improve to 6.61%, down from 6.91% at the end of the last quarter, and our specialist teams continue to work closely with residents who need support to help them maximise their income and manage their finances.

The Group has completed 1,246 new homes since the start of the financial year - of which 83% were for affordable tenures (2023/24: 811, of which 71% were affordable). The future pipeline stands at 20,304 homes, slightly reduced in comparison to the previous quarter due to completions outstripping planning approvals in the quarter.

Outright market and shared ownership sales generated a sales income of £127.8 million (2023/24: £91.6 million), with a margin of 7.6% (2023/24: 10.7%), which is improved from the last quarter (Q2: 5.4%) as development costs have started to stabilise.

Sustainability

Latimer, the development arm of Clarion Housing Group, has again been recognised as the UK's most sustainable not-for-profit housebuilder, achieving the prestigious Gold Award from the NextGeneration Benchmark for the second consecutive year. Latimer saw its overall score increase this year from 71 to 78, moving up to second place on the benchmark, having previously been joint third. Latimer also achieved the highest score of any housebuilder for Excellence in Socio-Economic Development, reflecting its commitment to delivering homes and communities that enhance socio-economic outcomes for residents.

In December, Clarion's sustainability team showcased its 'WildE3' Rewilding Project, aimed at revitalising urban green spaces in some of our estates in East London, to stakeholders from the Greater London Authority and the London Borough of Tower Hamlets. Held across several Clarion managed estates, the event highlighted the progress of the project, which is co-funded by the Mayor of London's Rewild London Fund. The initiative focuses on rewilding Sites of Importance for Nature Conservation (SINCs), spanning over 35 hectares of green spaces, while fostering greater biodiversity and engaging local communities in the process.

Supporting our residents and communities

Since the beginning of the financial year, the Group's charitable foundation, Clarion Futures, has supported 1,144 people into work and 4,083 people into training. In addition, 47 people have been helped to set up their own business. Significant demand for support from our Clarion Futures money guidance service continues and 11,437 money guidance and financial inclusion interventions have been made by the service and its external partners. 

During the course of nine months to 31 December 2024, Clarion Futures has awarded a total of £961,121 in grant funding to community-based organisations. The significant increase on the previous quarter (Q2: £297,423) is due to external funding secured including the expansion of Clarion Futures' partnership with the Rothesay Foundation to launch a new wellbeing spaces programme. Building on Clarion's warm spaces programme, which ran over the last two winters to support people through the cost-of-living crisis, this new initiative will offer activities to support physical and mental wellbeing alongside a chance to save on energy bills. It is expected that 60 wellbeing spaces will open their doors across England.

ENDS

For more information, please contact:

Andrew Hill, Director of Treasury and Corporate Finance, Clarion Housing Group - 0203 840 0164 / [e-mail] 

Lucy Pond, Head of Public Affairs, Clarion Housing Group - 0207 378 5555 / [e-mail] 

Disclaimer

The information contained herein (the "Trading Update") has been prepared by Clarion Housing Group Limited (the "Parent") and its subsidiaries (the "Group"), including Clarion Funding plc, Affinity Sutton Capital Markets plc, Circle Anglia Social Housing Plc and Circle Anglia Social Housing 2 Plc (the "Issuers") and is for information purposes only.

The Trading Update should not be construed as an offer or solicitation to buy or sell any securities issued by the Parent, the Issuers or any other member of the Group, or any interest in any such securities, and nothing herein should be construed as a recommendation or advice to invest in any such securities.

Statements in the Trading Update, including those regarding possible or assumed future or other performance of the Group as a whole or any member of it, industry growth or other trend projections may constitute forward-looking statements and as such involve risks and uncertainties that may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Trading Update and neither the Parent nor any other member of the Group undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments, occurrence of unanticipated events or otherwise.

None of the Parent, any member of the Group or anyone else is under any obligation to update or keep current the information contained in the Trading Update. The information in the Trading Update is subject to verification, does not purport to be comprehensive, is provided as at the date of the Trading Update and is subject to change without notice.

No reliance should be placed on the information or any projections, targets, estimates or forecasts and nothing in the Trading Update is or should be relied on as a promise or representation as to the future. No statement in the Trading Update is intended to be an estimate or forecast. No representation or warranty, express or implied, is given by or on behalf of the Parent, any other member of the Group or any of their respective directors, officers, employees, advisers, agents or any other persons as to the accuracy or validity of the information or opinions contained in the Trading Update (and whether any information has been omitted from the Trading Update). The Trading Update does not constitute legal, tax, accounting or investment advice.

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