Clarion Funding plc

CLARION HOUSING GROUP Q3 2021/22 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 31 December 2021

Financial performance

The Group is pleased to report a continuing strong financial performance. The unaudited management accounts for the first nine months to 31 December 2021 show a turnover of £783 million (Q3 2020/21: £677 million), delivering an operating surplus of £249 million (Q3 2020/21: £203 million).

The Group's total capital investment in existing homes during the first nine months of the year was £89 million, an increase from £59 million during the same period in 2020/21, while total capital investment in new homes was £497 million, remaining stable with the year prior (Q3 2020/21: £497 million).

Housing Fixed Assets stood at £8.06 billion, up from £7.78 billion as at 31 March 2021. Drawn debt was £4.45 billion, up from £4.32 billion as at 31 March 2021. Liquidity stood at £1.14 billion (31 March 2021: £1.07 billion) with committed and fully secured loan facilities at £5.46 billion (31 March 2021: £5.27 billion). 

Moody's and S&P have affirmed the Group's credit ratings at A3 and A- respectively, both with a stable outlook.

Operational performance

The Group continues to surpass its customer satisfaction targets, with repairs satisfaction last measured at 89.5% (target: 85%) and overall customer satisfaction last measured at 80.8% (target: 80%).

Rent arrears stands at 6.0% and remains within our Covid-adjusted tolerance. We continue to provide a range of support services to help our residents manage their money, maximise their income and sustain their tenancies.

The Group completed 1,586 new homes during the first nine months of the year (Q3 2020/21: 1,452), 83% of which were for affordable tenures. The current development pipeline is 22,750 homes. Outright market and shared ownership sales generated an income of £222 million, a significant increase from the £132 million generated during the same period last year, with a margin of 11.7% (Q3 2020/21: 10%).

Supporting our residents and communities

Since April, the Group's charitable foundation, Clarion Futures, has helped 2,986 people into work and 92 people to set up their own business. It has also helped 4,143 people into training.

A total of 14,533 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 £423,984 to local community projects.

Sustainability

In October, Clarion published its first Social Impact Report, an aggregate of the social impact delivered across the Group, following the themes of the Sustainability Reporting Standard for Social Housing. The Social Impact Report also fulfils the requirements of Clarion's Sustainable Housing Finance Framework and the Certified Sustainable Housing Label to which the Group is accredited.

For the tenth year running, we have published our annual customer insights survey, the Clarion Index. With Clarion increasing its group-wide focus on sustainability, the survey has this year been used to understand the extent that customers also believe sustainability is important. The survey found over two thirds (67%) of customers felt the issue of climate change was important to them personally, while 80% recycle all or most of their recyclable household waste. More on the findings can be found here. 

Building new homes

In September, Clarion reached an agreement with Far East Consortium (FEC) to deliver 139 new affordable homes within the Consort Place development at Canary Wharf. The deal marks one of the largest commitments by a developer to build affordable housing in London's Central Business District and directly responds to the needs of residents in the London Borough of Tower Hamlets.

During the quarter, work began on site at the Cocoa Works, the former Rowntree factory in the centre of York, to deliver 279 apartments - of which 84 will be for shared ownership. Latimer, the Group's development arm, has also been granted planning permission for the adjacent site to bring forward a new community comprising 302 new homes, of which more than 35% will be for shared ownership.

In November, Latimer acquired a site in the centre of Chester - marking the Group's first investment in the city. The scheme will comprise 132 apartments, of which 40% will be for shared ownership.

Clare Miller, Clarion's Group Chief Executive, provided evidence to the Built Environment Committee in the House of Lords on 26 October - making the case that with more help from government, Clarion could accelerate the delivery of new affordable housing.

ENDS

For more information, please contact:

Patrick Minjauw, deputy treasurer, Clarion Housing Group - 0207 378 5580 / [email protected] 

Lucy Pond, senior communications manager, Clarion Housing Group - 0207 378 5555 / [email protected] 

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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