Quarterly performance update

Clarion Funding plc

26 July 2024

 

Clarion Funding plc

CLARION HOUSING GROUP Q1 2024/25 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 30 June 2024

Financial performance

The Group is pleased to report a solid financial performance for the first quarter of the financial year 2024/25. The unaudited management accounts show a turnover of £260.3 million (2023/24: £243.9 million), delivering an operating surplus of £64 million (2023/24: £52.8 million) and a pre-tax surplus of £27.3 million (2023/24: £19 million). The operating surplus increase is primarily due to the annual rent uplift, combined with improved cost control especially in relation to repairs and maintenance, where we are seeing the benefits from insourcing work and having less reliance on contractors.

We have invested £17.6 million in existing stock in the quarter (2023/24: £27.3 million). The year-on-year variance is primarily related to differences in the phasing of planned work throughout the year. In addition, £104.1 million was invested in our new homes programme, broadly stable with the same period the previous year (2023/24: £105.8m).

Clarion returned to the public capital markets during the quarter with a new sustainable bond issue in May. The 33 year 5.375% £250 million bond was strongly received by the market, with high levels of investor engagement at the company roadshow resulting in the final issue being 3.3x oversubscribed.

Housing Fixed Assets stood at £8.70 billion, up from £8.40 billion as at 31 March 2024. Drawn debt was £4.61 billion, up from £4.57 billion as at 31 March 2024. Liquidity increased to a comfortable £1.26 billion (31 March 2024: £1.06 billion) following the bond issue, with committed and fully secured loan facilities at £5.80 billion (31 March 2024: £5.56 billion).

Operational performance

Our transactional surveys show overall customer satisfaction has been consistently above the Group's 80% target every month and was last measured at a record 85.2%. Repairs performance remains strong, with satisfaction last measured at 91.2% (internal target: 85%).

These positive satisfaction results are compiled by an independent third party and are based upon recent customer interactions with Clarion, enabling residents to tell us how we performed for them personally. In addition, the Regulator for Social Housing's new Tenant Satisfaction Measures (TSMs) came into use this year and include statistics based on perceptions of our performance; the scores are available on our customer website www.myclarionhousing.com.

As expected, due to the difference in sampling approach the TSM scores are lower than the transactional surveys and are generally in line with other large housing associations with a presence in urban areas. Where we have lower scores, these align with our own identified improvement areas which we have been prioritising, such as complaints handling.

Rent arrears have continued to improve to 7.20%, down from 7.41% at the end of the last quarter. Our teams continue to deliver targeted and bespoke support to help residents maximise their income and manage their finances.

The Group has completed 335 properties during the first quarter of the financial year - of which 60% were for affordable tenures. This level of delivery continues to reflect the Group's decision to take a more cautious approach to development in light of challenging market conditions.  The future pipeline stands at some 19,557 homes, but the pace at which these can be delivered will in part be driven by decisions taken by the new government over how to provide confidence and support to the sector going forward.

Outright market and shared ownership sales generated a sales income of £35.6 million (2023/24: £35.5 million), with a margin of 6.5% (2023/24: 10.1%). Sales margin is reduced compared to the same period last year due to the different sales mix and location, along with supply chain cost increases and market conditions.

Sustainability

In May, the Group launched its Nature Recovery Strategy, which represents a comprehensive approach to enhancing biodiversity, improving community well-being, and building climate resilience across our developments and existing neighbourhoods. The strategy can be read on our website www.clarionhg.com.

During the quarter, Latimer, the development arm of Clarion Housing Group, completed the construction of the Peasecroft development in Cottered, Hertfordshire. The development comprises seven homes for affordable rent that pilot innovative technologies, which if successful could be used more widely, supporting our delivery of the impending Future Homes Standard (FHS).

Residents of the new Peasecroft homes will enjoy significantly lower energy bills and a comprehensive Post Occupancy Evaluation (POE) will be in place to allow Latimer to continue to monitor the impacts of the technology on energy performance and air quality.

Supporting our residents and communities

Over the first three months of the financial year, the Group's charitable foundation, Clarion Futures, has supported 376 people into jobs and 1,385 into training. In addition, 14 people have been helped to set up their own business. High demand for support from our Clarion Futures Money continues and 3,758 money guidance and financial inclusion interventions have been made by the service and its external partners. 

In total, Clarion Futures has awarded £152,652 in grant funding over the first quarter to community-based organisations.

ENDS

For more information, please contact:

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

Lucy Pond, Senior Communications Manager, 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.

www.clarionhg.com 

 

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