Quarterly Investor Update

Clarion Funding plc

29 April 2026

 

Clarion Funding plc

CLARION HOUSING GROUP Q4 2025/26 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 31 March 2026

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 2025 ("2024/25"). 

Financial performance

Clarion delivered a strong financial performance for the year ending 31 March 2026. Our unaudited management accounts show turnover of £1,045 million (2024/25: £1,087 million), generating an operating surplus before disposals of £218 million (2024/25: £188 million), operating surplus after disposals of £291 million (2024/25: £232 million), and net surplus before taxation and fair value adjustments of £134 million (2024/25: £76 million).

The increase in surplus is primarily due to higher rental income and a stronger disposal surplus, coupled with lower financing costs and a broadly consistent level of operating costs year on year.  The reduction in turnover reflects lower development sales, while the growth in rental and other income provided a partial offset.

These results include provisions and impairments of £33m, which covers additional costs to complete (where contractors have failed in previous years), reductions to net realisable value to reflect challenging market conditions, and building remediation costs. We continue to seek recovery of these costs from third parties where possible.

Clarion has continued to prioritise investment across both new and existing homes. £591 million was invested in new housing supply (2024/25: £430 million) and £161 million was invested in improving existing homes (2024/25: £138 million. This investment has seen the value of housing fixed assets rise to £9.30 billion (2024/25: £8.88 billion).

Drawn debt stood at £4.68 billion as at 31 March 2026 (2024/25: £4.63 billion), with the increase reflecting capital investment in line with our financial plan. Liquidity remains strong at £0.95 billion (2024/25: £1.28 billion); the reduction is in part due to our decision to repay an expiring facility early whilst retaining significant flexibility over the timing of future financing.

In February, Moody's published a periodic review of Clarion's credit rating, affirming the A3 rating with a stable outlook and commenting that this reflected our strong market position and solid debt and liquidity metrics.

Operational performance

Customer satisfaction continued to improve across the year, with overall satisfaction reaching 85.9%, building on the 84.5% recorded in March 2025. Satisfaction with repairs also remained strong at 90.6%, comfortably above our internal benchmark of 85% and above the 90.1% recorded in March 2025.

Rental arrears reduced further to 5.35%, an improvement on 5.92% at the same point last year. This continued progress reflects the sustained efforts of our money guidance and financial inclusion teams, who have delivered 13,443 interventions (2024/25: 14,033) over the course of the year, helping residents manage their finances and maintain their tenancies by providing targeted support.

During the financial year, the Group completed 1,460 new homes (2024/25: 1,727), of which 1,173 (80.3%) were for affordable tenures (2024/25: 83.4%). Sales income was £95 million (2024/25: £175 million) and our outright market and shared ownership sales achieved a net margin of 2.4% (2024/25: 6.5%). The reduction in sales income is mainly due to decisions taken to manage delivery at a time of challenging market conditions, while the sales margin was impacted by market pressures, particularly on private sale, driven by current economic and geopolitical uncertainty. Stock available for sale at March 2026 of 426 units (shared ownership (SO) 282, private sale (PS) 144) was 110 below the prior year (2024/25: 536, SO 327, PS 209) as we continue to proactively manage supply.

Our pipeline has grown to 22,285 homes, up from 20,173 at the same point in 2024/25, reflecting continued progress in securing new development opportunities.

The quarter saw a number of significant development milestones. Latimer, Clarion's development arm, submitted a planning application for the Tendring Colchester Borders Garden Community, a landmark proposal where Clarion is the master developer for 7,750 new homes in north Essex.  The development will have at least 30% homes designated as affordable, alongside schools, employment space, a new public transport system and more than 50% open space.

Clarion also announced key partnerships with The Hill Group to deliver 188 social rent homes in Woolwich, a scheme with London Square for 261 affordable homes as part of the regeneration of the former Leegate Shopping Centre along with plans approved by Bromley Council for 202 affordable homes at Crystal Palace Park.

Sustainability

During the period, Clarion engaged with the Department for Energy Security and Net Zero (DESNZ) on the implications of the Minimum Energy Efficiency Standards (MEES) regulation, working through the potential impacts on the sector's longer-term retrofit strategy.

In March, the Government published its Future Homes Standard, establishing new requirements for the energy efficiency and low carbon performance of new homes across England. Clarion has been delivering this direction of travel for several years, with the majority of new homes already achieving EPC A or B ratings and over 95% of completions in the past year being fossil fuel free. We welcome the greater clarity the standard provides for the sector on the pathway to delivering low carbon homes.

Progress continued across our 2025/26 nature recovery programme, with improvements completed at sites in Brighton, Bromley, Bradford and Norwich. Works included landscaping, planting and changes in grounds maintenance practices, with 830 households benefiting from the enhancements. Resident engagement activities, including community planting days, were held throughout the quarter to involve residents directly in these improvements.

We are also piloting a new approach to embedding sustainability more effectively within our procurement processes, and have initiated a review and update of our 'Sustainability in Procurement Action Plan'. This work reflects our commitment to driving responsible and sustainable outcomes across our supply chain.

Supporting our residents and communities

Clarion Futures, the Group's charitable foundation, continued to deliver significant impact for residents and communities throughout the year. Over the year, 1,287 people were supported into employment (2024/25: 1,505), 5,225 residents accessed training or skills development opportunities (2024/25: 5,685), and 95 individuals were helped to set up their own business (2024/25: 66). Over £700,000 in grant funding was awarded to community-based organisations (2024/25: £1.1 million).

In March, Clarion Futures announced a two-year extension of its wellbeing spaces programme, supported by a donation from the Rothesay Foundation of over £1 million. The programme, which supported more than 50 free community hubs across England in 2025, generating close to 65,000 visits, will now expand to a minimum of 55 spaces nationwide, offering residents practical help and important social connection.

ENDS

For more information, please contact:

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

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

www.clarionhg.com 

 

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