Clarion Funding plc

CLARION HOUSING GROUP Q4 2023/24 PERFORMANCE UPDATE

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

Clarion Housing Group announces the following update ahead of its Annual Report for the year ended 31 March 2024. 

Note: Figures quoted in the update are based on unaudited management accounts, which are subject to review and further adjustments, for example in the areas of pensions*, investment property and financial instrument valuation and taxation. Comparative data is from the audited financial statements for the year ended 31 March 2023 ("2022/23").

Financial performance

The Group is pleased to report its financial position at the end of the financial year 2023/24. The unaudited management accounts for the 12 months to 31 March 2024 show a turnover of £991 million (2022/23: £1,008 million), delivering an operating surplus of £249 million (2022/23: £260 million) and a full year pre-tax surplus of £96 million (2022/23: £95 million).

In the final quarter of 2023/24, we have seen increases in our operating surplus due to the completion of planned stock transfers and disposals along with a favourable movement in bad debt provisions.  These unaudited results demonstrate a stable performance in the face of an operating environment that continues to be challenging.  

We have invested £107 million in planned major works (2022/23: £122 million) and £23 million in capital works associated with fire and building safety (2022/23: £23million). In addition, £501 million was invested in our new homes programme, an increase from £457 million invested in the previous year.

Housing Fixed Assets stood at £8.40 billion, up from £8.31 billion as at 31 March 2023. Drawn debt was £4.57 billion, up from £4.46 billion as at 31 March 2023. Liquidity stood at a comfortable £1.06 billion (31 March 2023: £1.02 billion) with committed and fully secured loan facilities at £5.56 billion (31 March 2023: £5.41 billion). During March, the Group added £200 million of bank liquidity facilities, which will give increased flexibility over the timing of any new debt capital market issuance.

New sustainable funding framework and EMTN programme renewal

In April, the Group published a new Sustainable Housing Finance Framework (SHFF), which responds to investor requests for more detail and clarity over how the Group uses proceeds from its public bonds. Clarion is proud to have been the first registered provider in the sector to issue a SHFF in 2019, and the update reflects how sustainability runs through everything the business does. The changes in the 2024 framework even more clearly demonstrate the link between our investor's commitment and the achievement of our sustainability ambitions.

The Group also completed the update of its EMTN programme in April, which will allow an efficient return to the capital markets to occur at the appropriate time.

Operational performance

Overall customer satisfaction has been consistently above the Group's 80% target every month and was last measured at 84.1%. Repairs performance remains strong, with satisfaction last measured at 90.3% (internal target: 85%).

Rent arrears have continued to improve to 7.41%, down from 7.9% at the end of the last quarter and 8.7% at March 2023. Our teams continue to deliver targeted and bespoke support to help residents maximise their income and manage their finances.

The Group has completed 1,538 homes over the course of the financial year - of which 68% were for affordable tenures and the future pipeline stands at 19,694 homes. This represents a reduction from the previous year (2022/23: 2,032) reflecting the Group's decision to take a more cautious approach to development in light of challenging market conditions, along with some handover delays at the end of the year.

Outright market and shared ownership sales generated a sales income of £152.2 million (2022/23: £226.8 million), with a margin of 8.3% (2022/23: 9.7%). Sales activity in the final quarter improved compared to the previous quarter, with net sales reservations levels for both private sale and shared ownership combined up 33% quarter on quarter and 21% up on the same period in the prior year.

Supporting our residents and communities

Over the year, the Group's charitable foundation, Clarion Futures, has supported 1,724 people into jobs and 5,984 into training. In addition, 73 people have been helped to set up their own business. Demand for support from our Clarion Futures Money service remains high and 55,438 money guidance and financial inclusion interventions have been made by the service and its external partners over the last 12 months, which includes footfall in the 'warm spaces' we fund in our community centres to help our resident tackle fuel poverty. 

In total, we have awarded £1,557,894 in grant funding over the financial year to organisations including food banks, community groups and local charities tackling issues such as loneliness and isolation.

* During the year the Group closed its defined benefit pension schemes to future accrual triggering a cessation event for those schemes forming part of the local government pension scheme.  Although these are expected to be relatively cash neutral, discussions with regards to the accounting treatment are ongoing with our auditors.  This may result in a material charge to operating surplus which will be reversed out at total comprehensive income level.

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