Clarion boosts surplus after insourcing repairs work

Clarion has reported an increased surplus for the first quarter of the financial year, which it says is partly due to reducing its reliance on contractors to deliver repair work.

The 125,000-home housing association, in a trading update this morning, said its pre-tax surplus for the three months to 30 June was £27.3m, up from £19m for the same period last year.

Its operating surplus, which excludes certain one-off items, increased from £52.8m to £64m over the same period.

It said: “The operating surplus increase is primarily due to the annual rent uplift, combined with improved cost control especially in relation to repairs and maintenance, where we are seeing the benefits from insourcing work and having less reliance on contractors.”

Clarion, which is undergoing a major transformation programme to improve customer service, in its annual financial statement last week said it had insourced the remaining part of its repairs service in Merton and Kent and is “taking action to control costs” relating to maintenance. This came after a £42m increase in maintenance costs and major works in 2023/24. Clarion said 81% of this increase was due to higher demand and inflation coupled with the use of “subcontractors” to increase capacity.

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Today’s trading update also revealed Clarion spent £17.6m on existing homes in the quarter, which is down on the £27.3m posted for the same period last year due to the phasing of work. It invested £104.1m in delivering new homes, slightly down on the £105.8m spent last year.

The unaudited figures also showed an increase in turnover in the quarter from £243.9m to £260m year-on-year.

The group also said it completed 335 homes in the quarter.

Clarion is aiming to build 1,828 homes in the year. The group said last week that it has an ambition to build 3,000 homes a year in the longer-term but is taking a “cautious” approach, moderating its “development programme in response to market uncertainty and financial capacity.”