Housing association giant reduces development spend in “cautious approach”

Clarion’s surplus has fallen 45% due to the failure of a contractor, refinancing costs and a cyber-attack, it has announced.

The housing association giant, in a quarterly trading update today, said its pre-tax surplus for the 2022/23 financial year was £101m, down from £186m the previous year.

Clarion Redbridge Homebase scheme 1

Source: Clarion/Hadley Property Group/Stockwool

A planned Clarion scheme in Redbridge, east London

The 125,000-home provider said it had faced a one-off interest charge of £45m as part of a debt restructuring, lost £24m in impairment costs due to ‘contractor failure’, while last summer’s cyber-attack, which forced its IT network offline, cost it £17m.  Work on Clarion’s 152-home, 17-storey Boatyard development in Bristol was delayed last summer following the collapse of offsite contractor Mid Group.

The firm’s turnover remained broadly stable at just over £1bn.

Clarion completed 2,032 homes in the year to 2022/23, down from its record 2,276 reported the previous year.

It cut its investment in new homes from £583m to £456.8m year-on-year as it adopted a “more cautious approach in recognition of challenging market conditions”. Sales income from market sale and shared ownership fell from £307.4m to £219.6m year-on-year.

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Clarion, which was last year criticised over standards in some of its homes, increased its annual spend on existing properties by 8%, from £136m to £148m.

The Housing Ombudsman last year found two cases of severe maladministration against Clarion and housing secretary Michael Gove called for it to improve.