Year ahead challenging
The Trust House Limited annual report for the 2018-2019 year shows a $5.75 million trading profit. This is the highest profit returned in its 70-year history.
Trust House is a community-owned charity. Over 75 per cent of profits went back into the community this financial year – $4.4m in grants, charitable donations and sponsorship. This is $200,000 more than the previous financial year.
Trust House chief executive Allan Pollard said the trust’s core purpose was to enhance community well-being.
“This result I believe demonstrates we are fulfilling this.”
The performance was a direct result of the strategic changes made over the past five years and the commitment and hard work of staff.
“The board took some courageous decisions a few years ago to exit non-performing businesses, and to reduce staff, and we have worked hard to ensure that all of our businesses deliver value back to the community.
“Group sales are about $5 million less than what they were five years ago, yet our profits are more than double, which is really gratifying and vindication for the tough decisions that we made.”
All 11 businesses were returning a profit.
“We now take $20 million less than we did five years ago but we make about $4m more profit, so that tells a story.”
Trust House, based in Masterton, owns and operates a range of businesses in the lower North Island, including multi-segment bars, hotels and a boutique hydroelectric scheme.
It is also one of the largest community housing providers in New Zealand with 485 rental properties in Wairarapa and Tararua which it owns, operates, and manages.
Restaurants and bars had done well this cycle.
“The trust has made significant improvements to its bars and restaurants. The operating model is better for Farriers Bar and Eatery in particular.
“The Copthorne had a particularly good year with conference facilities doing well.”
The trust would spend around $2m on the Copthorne, Solway upgrade, which is under way.
It has reinvested nearly $1.3m into its housing stock this cycle.
The trust was now looking to invest more in social housing.
“We take our role as a community landlord very seriously,” he said. “In the last couple of weeks, we gained consent to knock over six houses in the Cameron Block and replace them with 18 new dwellings, all rentals.
We want the project completed in 12 to 18 months.”
Consultation with government on the Cameron Block is ongoing.
While the current financial year was still looking good for profits to return to the community, operational costs such as insurance had gone up.
“The year ahead will be challenging with increases in compliance costs such as insurance, and wage inflation, putting pressure on overall profits,” he said.
“We will work to ensure we minimise any shortfall as a result of increased costs and, continue to return money back to the communities.
“We will continue to spend money on our houses which are providing affordable rental homes to low income individuals and families who need them most.
“Our houses are in the lower quartile for rents and we have supported close to 100 tenants to receive income related rental subsidies.”
More than 430 organisations benefited from the grants, charitable donations and sponsorships.
The 2018-2019 annual report is available at: www.trusthouse.co.nz