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Clarion Funding plc (96XN)

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Friday 24 January, 2020

Clarion Funding plc

Quarterly Performance Update

RNS Number : 9224A
Clarion Funding plc
24 January 2020

Clarion Funding plc


Clarion Housing Group's quarterly performance update covering the period to 31 December 2019.

Financial performance

The unaudited management accounts for the nine months ended 31 December 2019 show an operating surplus of £199 million (2018: £230 million).  The reduction in operating surplus continues to reflect an increased focus on customer service and safety, alongside careful management of our development sales programme.  In particular, the year-on-year variance reflects increased investment (£10m) in our front-line and enabling services, additional depreciation (£9m) and, as expected and in line with prevailing market conditions, a lower surplus on development sales (£7m).

Housing fixed assets stood at £7.30 billion, up from £7.12 billion as at 31 March 2019.  Drawn debt as at 31 December 2019 was £4.01 billion, up from £3.89 billion as at 31 March 2019.  Liquidity stood at £0.70 billion (31 March 2019: £0.75 billion) and committed and fully secured loan facilities were £4.61 billion (31 March 2019: £4.46 billion).

Operational performance

Total capital investment in new homes for the year to 31 December was £425.7 million, an increase from £388.3 million in the same period the year prior. Completions of outright sales and shared ownership generated an income of £88.4 million (2018/19: £66.5 million) with a margin of 14.5% (2018/19: 30%). Although lower than the prior year, this margin is at a more normalised level in line with expectations for this point in the cycle. Sales are progressing well on most schemes, the Group continues to achieve a good level of exchanges and reservations.

 The Group is continuing to diversify its sales exposure and maintains a mid-market national strategy. Since 1 April 2019, 1,237 new homes have been completed of which 1,064 (86%) were for affordable tenures; while 1,513 homes have been started, 1,319 (87%) of which were for affordable tenures. The Group's selective approach to private sale investment means that this tenure is currently anticipated to form around 20% of the programme.

Repairs performance continues to be strong - customer satisfaction with repairs was above the 85% target at 89%. Overall customer satisfaction was good but slightly below the Group's 80% target at 79.6%. Rent arrears increased slightly from 5.3% in the last quarter to 5.5% and remains a key priority focus for the business.

The second part of the Group's Enterprise Resource Planning (ERP) implementation went live across the business successfully in November with minimal disruption to service provision.

The Merton regeneration plans moved a step further with the Group securing planning permission in November for the next phases of its regeneration project at Ravensbury, in Mitcham, which will see 179 new homes built. This followed planning permission granted in October for the High Path estate, in Merton, which will see 114 new homes built.

Clarion's sector leading commitment to sustainability was recognised in November, when the Group became the first housing association in the UK to be accredited with the pan-European Certified Sustainable Housing Label. The Group's Sustainable Housing Finance Framework was also assessed by imug, a sustainability rating agency, for alignment to the International Capital Markets Association Green and Social Bond principles.  Through the initiative Clarion will be better placed to benchmark its sustainability performance against other affordable providers across Europe. The Group expects to raise capital markets debt under its Framework; it has also recently agreed sustainability linked bank funding.

As part of its social commitment, the Group has been pleased to hold its second William Sutton Awards. Social enterprise Fat Macy's took home the £20,000 prize for Social Innovation for their proposal to expand their supper clubs and catering events which get young homeless Londoners into their own homes whilst providing work experience.

Board recruitment

The Group has completed the refresh of the board due to time-served retirements. Four appointments were made and included Gavin Barwell, Graham Farrant, Amanda Metcalfe and Tom Smyth. Each brings with them distinct experience which will help the Group deliver its mission to provide good quality, affordable, homes and neighbourhoods to people inadequately served by the market.


For more information, please contact:

Gareth Francis, director of treasury and corporate finance, Clarion Housing Group - 0778 7555655 / [email protected]

Lucy Pond, communications manager, Clarion Housing Group - 0771 8269023 / [email protected]




The information contained herein (the "Trading Update") has been prepared by Clarion Housing Group Limited (the "Parent") and its subsidiaries (the "Group"), including 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 a pro t 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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