Safety costs reduce Clarion’s operating surplus

In its most recent annual results, Clarion saw its operating surplus rise 5% to £305m, although its overall surplus dipped.

An operating surplus is the amount of income left after day-to-day costs, not including housebuilding and investment in improving stock – which the surplus is used to fund.

In the update, the 125,000-home housing association said it expects its full-year results to show better operating costs and operating costs per unit than in 2017/18.

Clarion also noted that its housing fixed assets at 30 September 2018 were worth £6.95bn, up from £6.79bn in March. Drawn debt had also risen from £3.54bn to £3.7bn.

The association said that this increase has helped to fund investment in new homes, with liquidity rising from £0.64bn to £0.7bn and investment in existing homes rising to £51m, up significantly from £35m, the figure for the same period last year.

A large proportion of Clarion’s income continues to come from outright and shared ownership sales, which brought in £46.6m in the period, up from £43.7m in the previous period in 2017.

In the last quarter, it said, it has built 412 homes and begun work on 880 more. The current development pipeline stands at 15,000 homes and Clarion expects to have over 2,500 homes under construction by the end of March 2019.

The association did not reveal how many homes it expects to complete in the year, a figure it also refused to provide to Inside Housing’s Biggest Builders survey this year.

Earlier this month, Clarion appointed a new chief executive, Clare Miller, who was the group’s former director for governance and compliance.

Ms Miller replaced Ruth Cooke, who spent only five months in the job before leaving for “personal reasons”.

Update: at 9.33 on 23.10.18 This story was updated to clarify that £51m was invested in existing homes, not, as previously stated, new homes.