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Clarion’s pre-tax surplus surges 114% in half-year results
Clarion’s pre-tax surplus has surged by 114% in its results for the first half of 2024-25, driven by rising sales and a drop in spending on existing homes.
The 125,000-home landlord hailed its “strong financial performance” as it posted a pre-tax surplus of £65.1m for the six months to the end of September, up from £30.4m in 2023.
The net surplus includes a £2.2m increase in investment property valuations, compared with a £6.5m reduction in 2023.
Operating surplus also rose 26% to £137.4m, up from £108.8m the year before. Clarion said this increase was mainly driven by higher rental income and increased surplus on disposals, partially offset by rising operating costs.
Unaudited accounts showed that turnover was up 11.5% to £541.8m (from £485.8m the year before).
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Clarion invested £41.1m in existing homes in the six-month period, down 37% from £66.1m the year before. The year-on-year drop was mainly due to timing differences in the phasing of the work, with increased spending anticipated in the second half of the year, Clarion said.
The landlord also spent £204m on its development programme, down from £233.8m the year before, which reflected some “later starts on site”.
Clarion completed 792 homes during the first half of the financial year, of which 78% were for affordable tenures. Completions were up 31% year on year compared to 606 in 2023, of which 71% were affordable. The landlord’s future pipeline stands at 20,532 homes.
Outright market and shared ownership sales generated income of £88.1m, up from £67.2m the previous year. However, sales margin fell to 5.4% from 8.2% in 2023. Clarion said that market conditions and supply chain costs have continued to impact its sales margin, although more recently, development costs have “begun to stabilise”.
Housing fixed assets stood at £8.66bn, up from £8.4bn in March 2024. Drawn debt was £4.56bn, largely unmoved from £4.57bn at the end of March.
Liquidity increased to £1.37bn compared to £1.06bn at the end of March 2024, mainly due to Clarion’s bond issue in May.
Committed and fully secured funding facilities stood at £5.79bn, up from £5.56bn in March.
Rent arrears have continued to fall to 6.91%, down from 7.20% at the end of the last quarter.
In September Clarion offloaded more than 700 homes to Essex-based housing association Eastlight Community Homes.
Last financial year, Clarion’s surplus fell 10% as it spent £418m on improving and maintaining its current stock.
Clare Miller, chief executive of Clarion, said it had been a year of “significant and unprecedented challenge”.
Former housing secretary Michael Gove wrote to Ms Miller on several occasions warning the association about its failures, which has included a string of severe maladministration findings by the Housing Ombudsman.
In 2022, Mr Gove said that Clarion had “failed its tenants and refused to treat people with respect”. In his most recent letter, sent in February, he said he remained “deeply concerned”.
Clarion currently has a G1/V2 rating from the Regulator of Social Housing.
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