PenArian Housing Finance PLC                                                           

ClwydAlyn Housing Limited

We are delighted to announce our S&P Credit opinion for June 2025.  ClwydAlyn’s outlook has remained as ‘A’ stable.   

The full version of the rating can be found using the following link on our Investor page.

https://www.clwydalyn.co.uk/wp-content/uploads/2025/06/SP-Global-Ratings-03-June-2025.pdf

PenArian Housing Finance PLC

Financial Update – Winter 2025

Overview

ClwydAlyn continue to perform well to Q3 2024/25 and have a strong forecast for the financial year, with an expected operating margin of 20.4%.

Forecast turnover for the financial year is £63.4 million which is £475K lower than budgeted due to delays in opening the extra care scheme in Welshpool. Development of new properties has however continued at pace and 82 new homes have been brought into management so far this year with a further 231 expected by 31^st March 2025. There are 456 homes in development, currently on site, and a further 690 planned to start on site in the next 2-3 years. All new homes are developed to EPC A standard, and we have continued to invest heavily in decarbonisation projects, with £4.5 million of Optimised Retrofit Project grant funding having been utilised during this financial year.

We continue to improve the number of empty homes across the portfolio, with 109 empty properties (33 strategic voids) at the end of December, which compares favourably with the December 2023 position of 144 empty properties (23 strategic voids). Our forecast void losses are expected to be higher than budget however and work continues to reduce the length of time that properties are empty in order to mitigate these losses. Our expenditure is currently forecast below budget due to the delays in opening the extra care scheme in Welshpool and savings on financing costs. The overall impact of careful cost control is driving the strong margin position while enabling growth.

At the end of 23/24, an issue emerged across the sector regarding the administrative requirements of the new Renting Homes Wales Act. This is the subject of continuing legal action and ClwydAlyn is awaiting the outcome. We do not expect that the implications of this judgement will be material for ClwydAlyn.

Cashflow

Cashflow management throughout 24/25 has been very strong with no further draw down of funds required. Existing cash balances alongside grant funding for specific projects have been effectively utilised to manage the cash position during the year and a review of further funding requirements is underway. We continue to hold a minimum of 24 months-worth of committed net cashflows in funds or facilities available for drawdown.

Rating

We were pleased to retain our ‘A Stable’ credit rating with Standard and Poor’s after their review in July 2024. Our Moody’s rating was reviewed in October 2024 and remained at A3 ‘stable.’

Staffing

Our Executive Director of People, Culture and Communications, Sian Williams FCIPD, started in July 2024 and our Executive Director of Resources, Sandy Murray FCMA, started in October 2024. This completes the Executive Team.

Should you have any queries regarding this update you can contact:

Company Secretary                                  rachel.storr-barber@clwydalyn.co.uk
Executive Director of Resources           sandy.murray@clwydalyn.co.uk

We are delighted to announce an update to our Moody’s Credit opinion.  ClwydAlyn’s outlook has remained as A3 Stable. 

Summary
The credit profile of ClwydAlyn Housing (ClwydAlyn, A3 stable) reflects its focus on social housing lettings, which provides stable and predictable revenue, its strong market position in Wales and low gearing balanced against its weaker operating margins than peers. ClwydAlyn benefits from the strong regulatory framework governing Welsh housing associations (HAs) and our assessment that there is a strong likelihood that the government of the UK (Aa3 stable) would act in a timely manner to prevent a default.

The full version of the rating can be found on the Moody’s website.  https://www.moodys.com/ 

Overview

Given the challenging external conditions, ClwydAlyn performed well during 23/24.

We maintained strong liquidity, ending 23/24 with cash balances of £55.8m.

Our turnover for 2024/25 is budgeted at just under £64m and our operating margin remaining at 20%. We are on site with over 470 new homes and have recently been awarded £4m grant to invest in decarbonisation projects and the opportunity to bid for a further £2m. All new homes are constructed to EPC A standard.

The handover of our latest Extra Care Home has been delayed by several months and will now not be open until the autumn causing budget pressures, however this has been offset by the successful lobbying of the Welsh Government to substantially increase fees paid for care and supported living schemes. These fees increased by 7.8% which was not in the original budget.

We saw a reduction in voids during 23/24 and these have remained stable for the first quarter of the year. Our expenditure is currently forecast to remain within budget. In July we re-let our gas supply contract and saw a £1.1m reduction in the annual contracted cost. Most of this saving will be passed on to tenants as lower service charges.

At the end of 23/24, an issue emerged across the sector regarding the administrative requirements of the new Renting Homes Wales Act. Non-compliance has the potential to bring with it a financial liability. This is currently the subject of legal action in the high court and ClwydAlyn is awaiting the outcome. We do not expect that the implications of this judgement will be material for ClwydAlyn.

We are continuing to invest in fire safety works across our complex buildings. One extra care scheme has just been awarded £3m grant towards structural works that include fire safety. In addition, we had a programme to replace £1m of fire doors across our properties and this has now completed. Unlike in England, sprinklers have been mandatory on all new builds including houses since 2016, so a large proportion of our stock has these fitted.

There has been significant turbulence in the Welsh Senedd with the newly elected leader stepping down along with his cabinet. This creates delays in policy support from Welsh Government, however they recently announced their continuation of the existing social rent policy meaning that rent for next year can be set at CPI+1%.

Cashflow

Cashflow throughout 23/24 was very strong with £40m drawn on the bond and over £40m received in grants. Cash has continued to be strong in 24/25 and we continue to hold a minimum of 24 months-worth of funds or facilities available for drawdown.

We do not build properties to sell and rely on a relatively small amount (£1m per year) of income from disposal of surplus properties and staircasing of shared ownership. Despite increased interest rates there is still reasonable interest from residents in staircasing and we are on target to reach our budget.

Rating

We were pleased to retain our ‘A Stable’ credit rating with Standard and Poor’s after their review in July 24. Our Moody’s rating was reviewed in October 23 and remained at A3. However, we were pleased that Moody’s improved our outlook from ‘negative’ to ‘stable.’

Staffing

In April 24, our Executive Director of People retired, her replacement started in July.

Our Executive Director of Resources has left to take up a post with a larger English RP. The recruitment process is complete, and we are delighted to announce the appointment of Sandy Murray to the Position of Executive Director of Resources.

Sandy takes up the position on the 1st of October 2024. In the interim, should you have any queries you can contact the Company Secretary – rachel.storr-barber@clwydalyn.co.uk or the Chief Financial Officer – adam.fletcher@clwydalyn.co.uk.

We are delighted to announce the appointment of Sandy Murray to the Position of Executive Director of Resources. Sandy holds a Fellowship with CIMA and an MBA from the Bradford University School of Management. Sandy brings a wealth of housing association experience and has previously worked for Accent and South Lakes Housing. Since 2020, Sandy has worked in the private sector for Bender UK LTD (https://www.bender-uk.com/) as their Finance Director with the responsibility for finance, HR and IT.

Sandy has been a Non-Executive Director since 2011 for various organisations and more recently as a Board Member for the Riverside Group and Chair of their Governance and Remuneration Committee. (https://www.riverside.org.uk/about-us/our-team/group-board/)

Sandy takes up the position on the 1st of October 2024. In the interim, should you have any queries you can contact the Company Secretary – rachel.storr-barber@clwydalyn.co.uk or the Chief Financial Officer – adam.fletcher@clwydalyn.co.uk.

PenArian Housing Finance PLC

ClwydAlyn Housing Limited

We are delighted to announce our S&P Credit opinion for July 2024.  ClwydAlyn’s outlook has remained as ‘A’ stable.

Here is the full version of the rating: S&P Full Analysis Report.

The association is aware that the requirements of the Renting Homes (Wales) Act has resulted in the potential for some Welsh RSLs being non-compliant with the EICR (Electric Installation Condition Report) requirements, specifically related to the issuing of certificates to customers for domestic properties and communal areas. The financial impact of this issue is not expected to be material to the association, and there is no expected impact on the financial statements or the covenant compliance position.

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