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
/ andrew.hill@clarionhg.com
Lucy Pond, Senior Communications
Manager, Clarion Housing Group - 0207 378 5555
/ lucy.pond@clarionhg.com
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
