Clarion Funding plc

CLARION HOUSING GROUP Q4 2024/25 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 31 March 2025

Clarion Housing Group announces the following update ahead of its Annual Report for the year ended 31 March 2025. 

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, impairments and provisions, and taxation. Comparative data is from the audited financial statements for the year ended 31 March 2024 ("2023/24").

Financial performance

The Group is pleased to report a robust financial performance for the year ending 31 March 2025. The unaudited management accounts for the 12-month period show turnover of £1.086 billion (2023/24: £993 million), generating an operating surplus before disposals of £195 million (2023/24: £171 million), an operating surplus post disposals of £238 million (2023/24: £237 million) and a net surplus before tax of £94 million (2023/24: £82 million).

The increase in surplus is primarily due to improved operating performance, with the return to the inflation-linked rent formula driving revenue growth. The Group has continued to invest in its housing and property services and has also started to see the benefits of its strategic 'Connect' initiative, which is focused on improving the customer experience and enhancing cost control.  The lower level of disposal surplus reflects our more cautious approach to in-sector sales. Combined, these have resulted in increases in both operating surplus and net margin.

While our underlying operating performance has been strong, we continue to review the need for year end impairments and provisions including building safety and remediation provisions.  Although yet to be finalised, it is currently anticipated these will be circa. £20 million.  We are however continuing to seek recovery of these costs from third parties where appropriate.

During the financial year, we have invested £439 million in new homes (2023/24: £501 million) and £123 million in our existing homes (2023/24: £129 million). The reduction in spend on new homes over the year has been driven by delays to starts on some of our larger sized schemes.

Our Housing Fixed Assets stood at £8.91 billion, up from £8.66 billion as at 31 March 2024. Drawn debt was £4.59 billion, up marginally from £4.57 billion as at 31 March 2024. Liquidity stood at a comfortable £1.26 billion (31 March 2024: £1.06 billion) with committed and fully secured loan facilities at £5.76 billion (31 March 2024: £5.56 billion). The increase in liquidity is primarily due to the £250m 33-year bond issue completed in May 2024.

Operational performance

Customer satisfaction remains strong at 84.5%, continuing to surpass the Group's 83% target as part of our commitment to deliver a positive resident experience. Satisfaction with repairs also continues to perform exceptionally well and stands at 90.1% - comfortably above our internal benchmark of 85%.

Rental arrears have reduced further reaching 5.92%, which is ahead of our internal target for the period. This marks a significant improvement from 6.61% last quarter and 7.41% in Q4 2024. These positive results partly reflect the ongoing efforts of our Money Guidance teams who are providing targeted, tailored support to help residents maximise their income and manage their finances effectively.

Over the financial year, 1,727 homes (2023/24: 1,538 homes) have been completed with 1,441 (83.4%) of these being for affordable tenures and 286 being private sales. Our future homes pipeline currently stands at 20,173, an increase from 19,694 homes in 2023/24.

There remains a chronic shortage of affordable housing in England, and we are pleased to have been able to increase the number of homes completed during the year. We retain a longer-term ambition to raise this level of delivery but will continue to deliver our pipeline at a pace that allows us to maintain a resilient financial profile.

Outright market and shared ownership sales generated a sales income of £175 million (2023/24: £152 million), with a margin of 6.5% (2023/24: 7.6%).

Sustainability

Clarion Housing Group continues to make progress on its long-term sustainability and social impact goals. In March, Clarion announced the launch of a new scholarship programme as part of the William Sutton Prize, supporting students from lower-income backgrounds pursuing sustainability and environment-related degrees. The initiative will help scholars with academic fees, provide tailored career development and increase diversity within the profession.

Earlier in the quarter, Clarion was awarded £26m in funding from the government's Warm Homes: Social Housing Fund Wave 3 (formerly the 'Social Housing Decarbonisation Fund') to improve the energy efficiency of more than 2,300 homes. These upgrades will focus on installing energy-efficient heating systems, insulation, and solar panels to reduce carbon emissions and help residents lower their energy bills.

Clarion also hosted a flagship 'Retrofit Society' event in this period, bringing together policymakers, sector leaders, and experts to explore the importance of decarbonising homes at scale. The event, held at Clarion's London headquarters, reflected the organisation's commitment to leading sector-wide conversations on retrofit policy and innovation.

The Group will shortly be publishing its Climate Transition Plan which will model our emissions reduction pathway to net zero carbon by 2050.

Supporting our residents and communities

Clarion Futures, the Group's charitable foundation, continued to make a positive impact in communities throughout the year. Over the year, 1,505 people have been supported into employment, while 5,685 individuals have accessed training opportunities to enhance their skills. A further 66 people have been helped to start their own business.

Our financial inclusion and advice services also remained in high demand, with 14,033 interventions delivered by Clarion Futures and its partners - providing vital support to residents facing financial challenges.

As part of Clarion's 125th anniversary celebrations, we launched film schools in Leeds and Penge in partnership with social enterprise Fully Focused. Open to people of all ages, the programme offered hands-on experience in filmmaking while helping participants build skills, confidence and aspirations for careers in the creative industries.

By 31 March 2025, Clarion Futures had awarded over £1.1 million in grant funding to community-based organisations. Since its launch in 2016, the programme has now provided over £5 million to support grassroots projects nationwide.

ENDS

For more information, please contact:

Andrew Hill, Director of Treasury and Corporate Finance, Clarion Housing Group - 0203 840 0164 / [email protected] 

Olly Clitheroe, Communications Manager, Clarion Housing Group - 07858089815 / [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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