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Clarion’s surplus falls for second year running
The UK’s largest housing association has seen its surplus fall for the second year running, its financial statement has revealed.
According to the statement, Clarion made a surplus of £157.5m in 2018, down from £176m in 2017. This follows the fall of its surplus a year ago in the first statement since the merger.
The 125,000-home association was formed through the merger of Circle and Affinity Sutton, which achieved a combined surplus of £234m in the previous year.
It said, however, that the decreased surplus was “in line with expectations”, as the 2016/17 surplus was boosted by a gain on the revaluation of properties and the sale of the group’s German market rent portfolio.
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The association’s development output also fell in the year, with Clarion starting work on only 1,428 homes, down 23% from the 1,863 homes it started in the previous year.
It also missed its target for completions in the year, building 1,263 of the 1,328 homes it had aimed to complete.
Despite this, investment in new housing by the organisation increased 46% from £292m in 2016/2017 to £426m in 2017/2018.
A Clarion spokesperson said the organisation’s pipeline of new homes more than doubled in the year and stood at over 14,000 units by the end of the period.
This included a number of key schemes during the year including 2,600 units at Ebbsfleet and planning permission for the regeneration of three estates in Merton.
Following a review of its stock, Clarion said that it planned to sell some homes to other associations to fund the development of new homes.
Clarion did increase its turnover for the year from £796m to £829m, which was also higher than the group’s combined total for 2015/16.
This was partly due to a 42% increase in the group’s income from selling homes on the open market. It took in £42.3m of turnover from market sale in the year, up from £24.4m in the previous year. Income from social housing lettings grew as well, from £669.9m to £681.7m.
Clarion found more success in its operating surplus, which grew from £289.5m to £305.4m. As well as increasing turnover, it managed to get operating costs down from £495.2m to £478.9m.
Ruth Cooke, group chief executive at Clarion Housing Group, said: “These are a very strong set of results from our first full financial year as Clarion Housing Group, which provides us with a robust platform to realise the long-term potential of our organisation.
“We have already made headway on our ambitious plans of building 50,000 homes over 10 years, have made good progress in realising post-merger efficiencies and at the same time improved the quality of our services.”
Update: at 12pm on 27.7.2018
An original version of this article said that Clarion’s development activity had ’stalled’. This was changed to say ’fell’. Further information was also added regarding the housing association’s pipeline of development.
