North East landlord’s surplus drops as repair costs remain challenging in first half of year
Karbon Homes has reported a drop in its surplus before tax and operating margin for the first half of the year, flagging repair costs as a “significant challenge”.
Karbon Homes has reported a drop in its surplus before tax and operating margin for the first half of the year, flagging repair costs as a “significant challenge” #UKhousingIn its unaudited trading update for the six-month period up to October, the 34,000-home landlord said its turnover had increased to £111.1m from £108m in the same period last year.
However, its surplus before tax fell by 9.5%, from £16.9m at the same point last year to £15.3m. Karbon’s operating margin, including asset sales, also fell from 26.4% to 24.5%.
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The landlord, which manages homes across the North East and Yorkshire, completed 205 new homes since April, and has completed 918 of its target for 2,324 homes under its strategic partnership with Homes England.
“We have made a start on site for over 1,800 (78%) of the homes in the programme,” the trading update said.
Karbon invested £19.6m in its planned maintenance programme in the first half of the year, and it has introduced new teams covering damp and mould, in response to Awaab’s Law, as well as complex and structural repairs.
The landlord said: “Repairs costs remain a significant challenge. Since April we have seen sustained demand for responsive repairs, and we will be closely assessing the impact of Awaab’s Law on operating resources.”
The trading update said Karbon’s gearing stood at 37.6% at the end of the period, compared to 35% last year, while its interest cover was 162.6%, down from 199%.
Karbon said its “financial position remains strong”, pointing to new facilities agreed within 2025-26 totalling £189m.
The update also highlighted Karbon’s work to set up a new subsidiary – named Graphite Living – which it is in the process of registering as a for-profit registered provider.
Scott Martin, the landlord’s executive director of resources, said: “We are pleased to publish our half-year results up to September 2025.
“Against a financially challenging backdrop, and increasing regulatory and legislative change, we’ve seen positive performance across the group during the first six months of the year.”
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