Quarterly Performance Update

Clarion Funding plc

28 July 2025

 

Clarion Funding plc

CLARION HOUSING GROUP Q1 2025/26 PERFORMANCE UPDATE

Clarion Housing Group's Quarterly Performance Update covering the period to 30 June 2025

Financial performance

Building on a strong 2024/25, Clarion has continued its robust financial performance into the first quarter of 2025/26, with improved surpluses compared to the previous year and continued investment in both new and existing homes.

Group turnover for the quarter was £260.5 million (Q1 2024/25: £260.3 million), broadly in line with the prior year.

Operating surplus rose to £85.5 million (Q1 2024/25: £64.0 million), largely reflecting a £16m increase in disposal surplus as a result of a large stock transfer completing in the quarter along with an uplift in rental income. This was partially offset by increased cost of sales and higher operating costs.

Net surplus before taxation and fair value adjustments increased to £50.2 million (Q1 2024/25: £27.3 million) predominantly reflecting the operating surplus improvement.

We continued our plan to invest significantly in both new and existing homes, with an increased total capital investment in new homes of £132.6 million (Q1 2024/25: £104.1 million) and £25.5 million invested in existing homes (Q1 2024/25: £17.6 million).

The value of housing fixed assets increased to £8.91 billion (Q1 2024/25: £8.70 billion), reflecting our sustained investment in delivering new homes and enhancing the quality of our existing properties.

Drawn debt remained stable at £4.59 billion as at 30 June 2025 (Q1 2024/25: £4.61 billion), reflecting Clarion's continued focus on prudent financial management, maintaining a strong capital position. Liquidity stood at £1.13 billion at the end of the quarter (Q1 2024/25: £1.26 billion), comprising cash and undrawn committed facilities. During the quarter we took a decision to close out £100m of short-dated liquidity facilities early, enabling the business to strike an appropriate balance between maintaining prudent funding headroom and managing the cost of holding unutilised facilities.

Operational performance

Customer satisfaction remains above target at the start of the financial year, with overall satisfaction at 84.9% (Q1 2024/25: 85.2%) and repairs satisfaction standing at 91.3% (Q1 2024/25: 91.2%). These results reflect continued focus on service quality, communication and responsiveness across the business. Arrears were 6.12% at the end of the quarter, a slight increase from 5.92% in the previous quarter but significantly below the 7.20% in Q1 2024/25. The current level of arrears remains close to our target and our money and guidance teams remain available to provide support and advice to our residents in maintaining their tenancies, including helping those residents most in need.

The Group has completed 280 homes during the first quarter (Q1 2024/25: 338), with over 80% being for affordable tenures. This slight reduction reflects normal phasing of schemes on site.

In June we welcomed the continued support for affordable housing in the government's Spending Review, including the extension of the Affordable Homes Programme which remains vital to enabling long-term delivery. We await further detail on how this funding will be deployed and the extent to which it will enable us to accelerate delivery of our 20,277-home pipeline (Q1 2024/25: 19,557) while maintaining a prudent financial profile.

Sales income totalled £22.4 million in the quarter (Q1 2024/25: £35.6 million), while sales margins were 2.5% (Q1 2024/25: 6.5%), which is reflective of challenges seen more widely in the market.

Our ongoing stock rationalisation programme continues to progress with the sale of 700 units to Freebridge Community Housing completing in the quarter.

Sustainability

Clarion continues to lead the sector in its commitment to delivering a low-carbon future. In May, we became the first UK housing association to publish a Climate Transition Plan, setting out a clear, costed roadmap to achieving net zero carbon by 2050. The plan builds on our existing work to decarbonise homes, adapt to climate risk and embed sustainability into governance and decision-making while forming the foundation for how we will engage with investors and stakeholders on our pathway to net zero carbon.

We were proud to be named Housing Association of the Year at the inaugural Zero Bills Energy Awards held by Octopus Energy, recognising our pioneering work in ensuring our homes are energy efficient and affordable to run with residents being at the heart of our approach.

Clarion's nature-based work was also recognised during the quarter at the Unlock Net Zero awards, with a project in Tower Hamlets - delivered in partnership with local communities - highly commended for its biodiversity impact. The initiative transformed underused estate land into thriving green spaces and supports our broader commitment to climate resilience and placemaking.

Supporting our residents and communities

Clarion Futures, our charitable foundation, continued to provide tailored support to residents and communities during the quarter. As part of our 125th anniversary year celebrations, Clarion Futures announced it has awarded over £5 million in grants to community projects nationwide since 2016, reflecting our commitment to strengthening communities and supporting local initiatives that create lasting social impact.

In May, we launched the new Making a Difference Fund, offering grants of up to £5,000 for projects that bring residents together, such as arts activities, gardening clubs, and social inclusion events. The fund will initially distribute £50,000 and reflects our continued focus on resident-led initiatives that promote social connection and wellbeing.

As part of our 125th anniversary, we also relaunched the William Sutton Prize - Clarion's flagship ideas competition - with an expanded prize fund of £125,000. The prize seeks bold, innovative concepts with the potential to transform the lives of social housing residents with the winners set to be announced in September. During the quarter, Clarion Futures supported 251 people into employment, 1,784 residents to access training or skills development opportunities, and helped 10 individuals set up their own business as part of our commitment to helping residents build better futures. Our money guidance and financial inclusion services delivered 2,439 interventions, supporting residents to manage their finances, maximise income and access the help they need. In total, £226,581 was awarded in new grant funding during the period to be used in communities across the country.

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.

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