Clarion Funding plc Quarterly performance update (1097O)

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RNS Number : 1097O

Clarion Funding plc

27 January 2023

Clarion Funding plc

CLARION HOUSING GROUP Q3 2022/23 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 31(st) December 2022

Financial performance

The unaudited management accounts for the nine months to 31(st) December 2022 show a turnover of GBP758 million (Q3 2021/22: GBP783 million), delivering an operating surplus of GBP234 million (Q3 2021/22: GBP249 million ). The reduction in turnover has been predominantly driven by a decrease in sales income, partially offset by additional net rental income. The lower operating surplus compared to the prior year reflects the higher levels of cost inflation, increased expenditure on repairs and maintenance and additional provisions against rent arrears linked to the cyber-attack last summer.

The Group continues to invest significantly in its existing homes with expenditure of GBP92 million to the end of Q3 (Q3 2021/22: GBP89 million). Due to challenging new build market conditions, which include materials shortages and pricing challenges, the Group maintains a cautious approach to investment in new homes with expenditure of GBP344 million (Q3 2021/22: GBP497 million).

Housing fixed assets stood at GBP8.33 billion, up from GBP7.90 billion as at 31 March 2022. Drawn debt was GBP4.39 billion, down from GBP4.45 billion at 31 March 2022. Liquidity remains strong at GBP1.10 billion (31 March 2022: GBP1.12 billion) with committed and fully secured loan facilities of GBP5.41 billion (31 March 2022: GBP5.44 billion).

Operational performance

Repairs satisfaction surveys have continued following the cyber security incident with the most recent measure at 80.9%, exceeding the internal target of 85%. Overall customer satisfaction surveys resumed in November with the score being measured just above our internal target, at 80.9%.

The Group has completed 1,251 new homes so far this financial year (Q3 2021/22: 1,586), 70 % of which were for affordable tenures. While this remains a strong level of new housing delivery it also reflects the currently challenging economic and market conditions.

Outright market and shared ownership sales generated an income of GBP172 million, lower than the prior year (Q3 2021/22: GBP222 million) but with an increased margin of 14 % (Q3 2021/22: 11.7 %).

Condensation, damp and mould

The Group has in place a clear action plan for tackling condensation, damp and mould. In December, we announced we will be hiring 100 additional members of staff to help prevent and treat the issue in residents' homes, as part of a new GBP5 million annual investment package.

We have also written to all residents with support and advice on how to best prevent damp and mould in their property, while encouraging people to get in touch with us and report any issues.

Supporting our residents and communities

Since April, the Group's charitable foundation, Clarion Futures, has helped 1,644 people into work and 54 people to set up their own business. It has also helped 3,931 people into training.

A total of 9,439 actions were undertaken by the Money Guidance Team and its external partners to help residents manage their money more effectively .

Through its grants programme, Clarion Futures allocated GBP362,790 to local community projects.

In November, we announced a new GBP500,000 fund specifically to help our residents manage through the cost of living crisis.

Sustainability

Latimer, the development arm of Clarion Housing Group, has been named the most sustainable not-for-profit house builder in the country, in the latest 'Next Generation' report, the leading sustainability benchmark for the UK's housebuilding sector.

Latimer was named third overall among all housebuilders in this year's report, as well as being the highest-ranked housing association developer for the year. It also scored the best among the top 25 housebuilders for its specific work on environmental site management, socio-economic development and design standards of its recent projects.

During the quarter Clarion was also re-awarded the Certified Sustainable Housing Label by Ritterwald, with high scores achieved across the three dimensions of environment, social and governance. Clarion has held this accreditation since 2020.

ENDS

For more information, please contact:

Andrew Hill, Director of Treasury and Corporate Finance, Clarion Housing Group - 0208 315 3239 / [e-mail]

Lucy Pond, Senior Communications Manager, Clarion Housing Group - 020 3840 1645/ [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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January 27, 2023 05:12 ET (10:12 GMT)