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Sales rise but Clarion cites ‘cautious approach to development’ after yearly completions down 24%
Clarion has reported an increase in sales in its latest quarterly update as “challenging market conditions” led to a drop in the number of homes completed.
The 125,000-home landlord’s accounts showed an improvement in sales activity in the final quarter of 2023-24, with net sales reservations rising 33% quarter-on-quarter and 21% compared to the same quarter in the previous year.
Income from market and shared ownership sales generated £152.2m, down from £226.8m the previous year, with a margin of 8.3%.
The number of completed homes in the financial year fell 24% from 2,032 in 2022-23 to 1,538.
Of these, 68% were affordable housing and the landlord has a current pipeline of 19,694 homes.
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Clarion said the drop in completed homes reflected its “decision to take a more cautious approach to development in light of challenging market conditions, along with some handover delays at the end of the year”.
Turnover fell marginally from £1.01bn to £991m year-on-year. Its operating surplus shrank slightly compared to 2022-23, dropping from £260m to £249m.
The UK’s largest landlord said it had seen an increase in its operating surplus compared to the previous quarter due to “the completion of planned stock transfers and disposals along with a favourable movement in bad debt provisions”.
The landlord posted a sharp reduction in its operating surplus for the third trading quarter of 2023-24, down to £160.5m from £233.9m in the same period from the previous year.
Clarion’s pre-tax surplus was broadly the same at £96m, compared to £95m the previous year.
The results “demonstrate a stable performance in the face of an operating environment that continues to be challenging”, Clarion said.
Investment in planned major works dropped to £107m from £122m in 2022-23, while capital works investment remained the same at £23m.
Clarion also invested £501m in its new homes programme, up from £457m invested the previous year.
Rent arrears showed improvement to 7.41%, down from 7.9% quarter on quarter and 8.7% year on year.
Housing fixed assets increased slightly to £8.4bn from £8.31bn, and drawn debt reached £4.57bn, up from £4.46bn.
Liquidity was reported as a “comfortable” £1.06bn, compared to £1.02bn the previous year. Clarion said it had added £200m in bank liquidity facilities in March, which it would “give increased flexibility over the timing of any new debt capital market issuance”.
Customer satisfaction was reported to have consistently exceeded Clarion’s monthly 80% target, and repairs performance satisfaction was also high at 90.3%, against an internal target of 85%.
Last month, the landlord completed its second stock transfer in less than a month, passing on 138 homes to Grand Union Housing Group.
It transferred 747 tenanted homes to Portsmouth City Council weeks earlier.
