Quarterly Investor Update

Clarion Funding plc

28 October 2026

 

Clarion Funding plc

CLARION HOUSING GROUP Q2 2026/27 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 30 September 2026

Financial performance

Clarion's unaudited management accounts show continued strong performance in the first half of 2026/27, with increases in both operating surplus and net surplus^* supporting increased investment in new and existing homes.

Group turnover for the period was £538 million (2025/26: £522 million), reflecting higher rents and other income, partly offset by planned lower development sales.

Operating surplus rose to £189 million (2025/26: £163 million), supported by higher rent and other income and a higher disposal surplus, partially offset by impairments and a development loss relating to the challenging development market.

Net surplus before taxation and fair value adjustments increased to £114 million (2025/26: £86 million), primarily reflecting the increase in operating surplus.

Clarion continued to invest significantly in both new and existing homes, with £290 million invested in new housing supply (2025/26: £253 million) and £65 million in improvements to existing homes (2025/26: £54 million), largely in asset investment and building safety.

The book value of housing fixed assets rose to £9.45 billion (2025/26: £9.01 billion), reflecting our continued investment in new homes and improvements to existing properties.

Clarion returned to debt capital markets in August with a new sustainable bond issue. The 15 year 6.375% £250m bond was well received by investors and means that the business has de-risked its funding plans.

Clarion's drawn debt stood at £4.75 billion, compared to £4.60 billion at the same point in 2025, with the increase reflecting planned spend on the capital investment programme. The Group's liquidity at quarter end was £1.10 billion (2025/26: £1.12 billion), broadly in line with the prior year.

In October, Moody's acknowledged the progress we have been making by affirming our A3 rating, recognising "stronger operating cash flow, continued cash-inflows from asset disposals and active debt management" as they moved our outlook from 'stable' to 'positive'.

Operational performance

Customer satisfaction remained strong in the first half of the financial year. Overall resident satisfaction reached 85.4% (2025/26: 84.9%), while repairs satisfaction also rose to 91.6% (2025/26: 91.0%). Arrears stood at 5.25% by the quarter end (2025/26: 6.03%). This progress has been supported by proactive support and earlier intervention with residents.

In development, the Group started 972 new homes, of which all were affordable tenures. This demonstrates our rebalancing towards social and affordable provision, in consideration of the difficult market conditions for private sale as well as increased government support primarily targeted at social rent. 613 homes were completed in the first half (2025/26: 678), of which 527 (86%) were social and affordable units.

Sales income for the period totalled £32 million (2025/26: £43 million), while underlying sales delivered a negative margin of 6.2% (2025/26: positive 0.7%) before impairments and 13.3% including impairments (2025/26: positive 0.7%). The decrease in sales income reflects the planned lower sales volumes in what remains a challenging operating environment, while the underlying negative sales margin primarily reflects limited discounting on specific sites. Total impairments were £10.7m at half year across sales schemes, affordable schemes and joint ventures, reflecting both the difficult sales market and further increased costs on historical schemes.  Positively, our early actions have ensured stock levels remain under control with gross stock 127 units and net (unreserved) stock 100 units below the previous year.

In August, it was announced that Clarion had retained its Homes England Strategic Partner status and we were awarded the maximum initial allocation of £350 million through the new social and affordable homes grant programme 2026-2036. This funding will contribute to the delivery of 2,977 homes in our development pipeline outside of London, positioning us well to play our part in supporting the Government's ambition to increase the supply of new affordable homes.  The GLA grant awards are due to be announced imminently.

Sustainability

Latimer, the Group's development arm, published its latest Sustainability Report during the quarter which demonstrated another year of measurable progress. The report found that the proportion of completed homes with fossil fuel free heating rose from 62% to 93% year on year, while operational carbon intensity fell by more than half. Energy performance also improved, with 96.5% of completed homes achieving an EPC B rating or above. An average biodiversity net gain of 33.6% was achieved on planning-approved sites, well above the required minimum.

Supporting our residents and communities

Clarion Futures sustained its momentum in supporting residents with meaningful interventions across employment, training and inclusion.

666 people have been supported into work (2025/26: 638), and residents attended 3,196 training or skills development sessions (2025/26: 3,068). We have helped 63 individuals to set up their own business (2025/26: 37), reinforcing our commitment to fostering entrepreneurship and self‑reliance in our communities. Our money guidance and financial inclusion services have recorded 6,648 interventions (2025/26: 6,346), helping residents manage finances and sustain their tenancies. £1,054,776 has been awarded in grant funding to community projects (2025/26: £477,423), enabling a wide range of local initiatives to flourish.

*The net surplus figure is before tax, and fair value movements.

ENDS

For more information, please contact:

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

Dan Wiggins, Communications Executive, Clarion Housing Group - 020 3839 0664 / [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.

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