TIDM96XN TIDM51GC
RNS Number : 7695X
Clarion Funding plc
27 April 2023
Clarion Funding plc
CLARION HOUSING GROUP Q4 2022/23 PERFORMANCE UPDATE
Clarion Housing Group's Quarterly Performance Update covering
the period to 31 March 2023
Clarion Housing Group announces the following update ahead of
its Annual Report for the year ended 31 March 2023.
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 2022 ("2021/22").
Financial performance
The Group is pleased to report its financial position at the end
of the financial year 2022/23. The unaudited management accounts
for the 12 months to 31 March 2023 show a turnover of GBP1,001
million (2021/22: GBP1,059 million), delivering an operating
surplus of GBP263 million (2021/22: GBP303 million) and a full year
pre-tax surplus of GBP101 million (2021/22: GBP186 million).
These unaudited results are reflective of a challenging
operating environment and increased demand on services, although
the reduced surplus is primarily driven by one-off events and
projects. These include a one-off GBP45 million interest charge
resulting from a decision to complete a debt portfolio
rationalisation project which strengthens the Group's credit
position, a GBP24 million impairment and provision charge against
development schemes (generally additional costs due to contractor
failure) and GBP17 million associated with the cyber-attack
(predominantly bad debt provisions). Although significant, these
are one-off, non-recurring costs, with an underlying net surplus in
line with the prior year and a robust performance that demonstrates
the resilience of the Group in challenging times.
The Group has continued to invest significantly in its existing
homes - GBP148 million was invested in improvements, an increase
from GBP136 million the previous year. GBP456.8 million was
invested in our new homes programme, a decrease on the GBP583
million invested the previous year due to the more cautious
approach we have adopted in recognition of the challenging market
conditions.
Housing Fixed Assets stood at GBP8.39 billion, up from GBP7.90
billion as at 31 March 2022. Drawn debt was GBP4.46 billion, up
marginally from GBP4.45 billion as at 31 March 2022. Liquidity
stood at GBP1.02 billion (31 March 2022: GBP1.12 billion) with
committed and fully secured loan facilities at GBP5.41 billion (31
March 2022: GBP5.44 billion).
In March, the Group utilised its strong liquidity position to
complete a project to rationalise its debt portfolio, simplifying
the structure and reducing loan administration. The project
included the restructure of GBP173 million of fixed rate loans and
the prepayment of a GBP32 million pre-merger legacy loan from a
special purpose vehicle, RSL No.1 Limited. As a result of this
project there will be a one-off exceptional interest expense of
GBP45 million in 2022/23 and an ongoing reduction in interest costs
in future years.
Operational performance
The Group continues to be focussed on its customer service, and
overall customer satisfaction was last measured at 79.9%,
marginally below the internal target of 80%. Repairs performance
was good, with satisfaction last measured at 89.6% (internal
target: 85%).
Thanks to recovery efforts following the cyber incident, arrears
has improved and at year end has reduced by 0.7% since the end of
December 2022, to 8.7%. Tenancy sustainment teams and our
charitable foundation, Clarion Futures, also continue to provide a
range of support and advice for residents facing financial
difficulties.
The Group has completed 2,032 homes over the course of the
financial year (2021/22: 2,276) - of which 78% were for affordable
tenures. The current pipeline stands at 20,970 homes.
Outright market and shared ownership sales generated a sales
income of GBP219.6 million (2021/22: GBP307.4 million), with a
margin of 11% (2021/22: 12%) including GBP5 million of the
development impairment costs.
Sustainability
Clarion Housing Group is investing GBP108 million to upgrade the
energy efficiency of thousands of its homes after a consortium of
social housing providers, led by the Group, was awarded GBP48.9
million from the Government's Social Housing Decarbonisation Fund
(SHDF). The funding will allow Clarion to upgrade an additional
5,300 homes as part of its nationwide retrofit programme.
Clarion has also won a prestigious industry award recognising
its excellence in delivering its landmark retrofit programme to
improve the energy efficiency of hundreds of social homes.
Alongside its supply chain partners, the Group won 'Best Social
Housing Retrofit Programme' at the 2023 Retrofit Academy
awards.
Supporting our residents and communities
Over the year, the Group's charitable foundation, Clarion
Futures, has supported 2,114 people into jobs and 5,918 into
training. In addition, 74 people have been helped to set up their
own business. Demand for support from our Clarion Futures Money
service remains high in light of continued pressures on cost of
living, and 17,656 money guidance and financial inclusion
interventions have been made by the service and its external
partners over the last 12 months.
During the year, we have awarded a total of GBP598,984 in grant
funding to organisations including food banks, community groups and
local charities tackling issues such as loneliness and isolation
.
Board member appointments
Clarion has appointed Sasha Morgan, current Director at the
Social Mobility Commission, and finance and governance specialist
Sharon Critchlow, to its Housing Association Board.
Sasha joins the Board having held a number of key roles in
government departments, including the Department for Education and
the Cabinet Office. More recently, at the Social Mobility
Commission, she has overseen a suite of influential studies that
have filled evidence gaps on social mobility and raised the profile
of the social mobility agenda in the media and amongst
parliamentarians.
Sharon brings with her 20 years of board level experience and is
currently a Global Council Member and member of the Remuneration
Committee at ACCA. During her career, processes developed by Sharon
have been recognised by the Financial Conduct Authority (FCA) as
best practice and she was listed globally in the Top 50 Women in
Accounting 2020 and 2021 for global influence in the
profession.
S
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.
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