Clarion’s operating surplus falls as a result of cyber attack aftermath
Clarion has seen its half-year operating surplus fall nine per cent partly due to the fall-out from a major cyber attack and rising cost inflation.
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In the six months to 30 September, the 125,000-home landlord posted an operating surplus of £149m, down from £164m in the same period last year. A pre-tax or post-tax surplus figure for the half year was not disclosed.
The UK’s largest housing association blamed the drop in operating surplus on rising levels of cost inflation and the cyber attack it suffered in June.
Clarion said in its half-year statement: “The lower operating surplus reflects the higher levels of cost inflation, increased expenditure on repairs and maintenance and additional provisions against rent arrears linked to the recent cyber attack.”
In July, the landlord said it was continuing to deal with the aftermath of the attack which caused “extensive damage” to its IT systems and warned that it is facing a “long period of disruption”.
In its results, Clarion said it has been “working urgently” to restore its systems and services.
“Doing this in a safe and secure way takes time, but we are pleased to report many of our services have now returned to normal,” the housing association said.
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Clarion also saw its half-year turnover drop six per cent to £481m. The landlord said this has been “predominantly driven” by a decrease in sales income, partially offset by additional rental income.
Outright market and shared ownership sales generated an income of £95m in the six months to 30 September, down from £138m during the same period the previous year.
Clarion also saw a drop in completions from 892 new homes in the first half of 2020-21, to 785 in the same period this year.
The group said it took a cautious approach to investment in new homes with spending of £247m, compared to £296m in the same period last year.
Clarion said this was because of the “challenging new build market conditions”, including materials shortage and pricing challenges.
Out of the 785 new homes the group completed, 84 per cent were for affordable tenures.
Clarion said this remains a “strong level” of new housing delivery, but does reflect the more cautious approach being adopted as a result of the “challenging” economic and market conditions.
During the first half of the year, Clarion also continued to invest in its existing homes with expenditure of £54m, a slight rise from £53m in the previous year.
Clarion’s drawn debt was £4.43bn at the half-year mark, down from £4.45bn as of 31 March 2022.
In its last full year to March 2022, the group reported a 61 per cent rise in pre-tax surplus, which it partly attributed to strong open market and shared ownership sales.
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