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