Clarion Funding plc Quarterly performance update (9033D)

TIDM96XN TIDM51GC

RNS Number : 9033D

Clarion Funding plc

24 October 2022

Clarion Funding plc

CLARION HOUSING GROUP Q2 2022/23 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 30 September 2022

Financial performance

The unaudited management accounts for the six months to 30 September 2022 show a turnover of GBP481 million (Q2 2021/22*: GBP512 million), delivering an operating surplus of GBP149 million (Q2 2021/22: GBP164 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 reflects the higher levels of cost inflation, increased expenditure on repairs and maintenance and additional provisions against rent arrears linked to the recent cyber-attack.

The Group continues to invest significantly in its existing homes with expenditure of GBP54 million during the first half of the year (Q2 2021/22: GBP53 million). With the challenging new build market conditions, including materials shortage and pricing challenges, the Group has taken a cautious approach to investment in new homes with expenditure of GBP247 million (Q2 2021/22: GBP296 million).

Housing Fixed Assets stood at GBP8.31 billion, up from GBP7.90 billion as at 31 March 2022. Drawn debt was GBP4.43 billion, down from GBP4.45 billion as at 31 March 2022. Liquidity stood at GBP1.05 billion (31 March 2022: GBP1.12 billion) with committed and fully secured loan facilities at GBP5.43 billion (31 March 2022: GBP5.44 billion).

Cyber security incident update

Following the cyber security incident which disrupted our services, we have been working urgently to restore our systems and services. Doing this in a safe and secure way takes time, but we are pleased to report many of our services have now returned to normal.

Operational performance

Repairs satisfaction surveys have continued following the cyber security incident and customer satisfaction with repairs was last measured at 90.3%, exceeding the internal target of 85%.

The Group completed 785 new homes during the first half of the year (Q2 2021/22: 892), 84% of which were for affordable tenures. This remains a strong level of new housing delivery but does reflect the more cautious approach being adopted, reflecting the challenging economic and market conditions.

Outright market and shared ownership sales generated an income of GBP95 million, lower than the prior year (Q2 2021/22: GBP138 million) but with an increased margin 12.4% (Q2 2021/21: 10.9%). Unreserved stock levels also continue to reduce with 260 units across outright sales and shared ownership compared to 429 at the start of the year.

Supporting our residents and communities

Since April, the Group's charitable foundation, Clarion Futures, has helped 944 people into work and 29 people to set up their own business. It has also helped 1,903 people into training.

A total of 5,506 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 GBP65,158 to local community projects.

Building new homes

In August, Clarion's development arm Latimer had planning permission unanimously approved to build a new sustainable and mixed-tenure scheme of 212 new homes on the site of the former Richmond upon Thames College. Over half of these homes will be affordable tenures for local people.

In September, Latimer launched an international design competition to create an exemplar masterplan for its new 9,000-home garden community on the Colchester and Tendring borders - which aims to be the most sustainable and inclusive new community in the UK.

ENDS

* 2021/22 Q2 figures taken from the unaudited Interim Report and Accounts of the Half year ended 30 September 2021 ( https://www.clarionhg.com/media/2332/clarion-housing-group-half-year-accounts_ending-30-september-2021.pdf )

For more information, please contact:

Andrew Hill, Director of Treasury and Corporate Finance, Clarion Housing Group - 0208 315 3239 / andrew.hill@clarionhg.com

Lucy Pond, senior communications manager, Clarion Housing Group - 020 3840 1645/ 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.

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