Trust House Limited Annual Report 2019
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COMMERCIAL STRENGTH for TRUSTHOUSE.CO.NZ ALLAN POLLARD We have implemented some significant changes to our business model over the last six years so it is all the more pleasing to report to our stakeholders that we have achieved record trading profit in the last financial year. Moreover, grants, charitable donations and sponsorships back to our communities are at levels never reported in our 70 year history. The Trust House team worked extremely hard Whilst the Group’s constant core purpose is to I would like to take this opportunity to thank our last year. Their diligence and commitment has enhance the well-being of our communities, Senior team and all the staff at Trust House who enabled this organisation to exceed all of the we reviewed and changed our vision to do a great job whether they work in hospitality, financial benchmarks that were set at the start “Commercial Strength for Social Good.” We feel housing or administration. of the last financial year. that this better reflects the concentration of I thank Jock Kershaw, our Chairman, for his When tracking the last 5 years of the company, the company and the aspirations that we have guidance and to all of the Directors of the sales are down $5.4 million and net profit pre for enhanced social good. The change was well company for the wise counsel that I have donations is up $7.6 million. This certainly received by our stakeholders and we appreciate received throughout the year. their support. illustrates a positive turnaround in overall I also thank our communities for their continued Group performance. The year ahead is set to be challenging with support to Trust House businesses; the increase We also continue to reinvest in our asset base increases to the cost of doing business certain in support of our businesses and our brand has with $1.2 million for public housing and $685k to impact both our bottom line and capital been impressive. investment back to our community. We will on the Copthorne Solway Park’s redevelopment Thanks for your continued support. program both notable investments. work hard to ensure that we minimise any shortfall as a result of increased costs. DIRECTORS PRINCIPAL ACTIVITIES RELATIONSHIP WITH Trust House Limited is a community enterprise that owns and operates business units SHAREHOLDERS in the Wairarapa, Wellington, Kapiti, Tararua and Hawkes Bay regions. Its shareholders There is an agreement with the shareholders that: are Masterton Community Trust and Flaxmere Licensing Trust. Management services were provided to Trust House Foundation. • Business plans will be presented in March each year for the financial year beginning 1 April. Trust House’s shareholding comprises: • Reports on key events and trading compared to business plan targets will be • Masterton Licensing Trust – 94.26% presented quarterly. • Flaxmere Licensing Trust – 3.97% • Annual accounts will be presented in July. • Flaxmere Licensing (Charitable) Trust – 1.77% • Consultation will be undertaken during the annual appointment of two Directors. The Group owns and operates 10 business units including: • Discussion will occur on all major transactions and, where necessary, shareholder approval received. • Licenced premises – hotels, restaurants, bars, cafés and bottle stores. • A housing estate with some 485 homes to rent. There are strong and close links between the various Trusts and Trust House Limited. • A hydro-electricity scheme. AUDITORS RESULTS FOR THE YEAR The Office of the Controller and Auditor-General has appointed Audit New Zealand to It was a very positive year’s trading. We are particularly pleased to report the conduct the audit of Trust House Limited and its associated community and charitable significant improvement in our bars and restaurants segment which has been trusts. Audit fees paid to Audit New Zealand for the year ended 31 March 2019 were difficult for many years. $98,090 for Trust House Group. Cash flows (as detailed in the following table), and profits (detailed in the Operational AUDIT AND RISK COMMITTEE Review) were sound and the financial position remains strong. The members of the committee are DB Henry (Chairman), L Griffiths, JW Kershaw and TABLE 1: CASH FLOWS GENERATED DJ Baskerville. The Committee met six times during the year. YEAR $M USE OF COMPANY INFORMATION 2019 7.414 The Board received no notice during the year from Directors requesting to use 2018 6.813 Company information received in their capacity as Directors which would not have otherwise been available to them. 2017 5.969 2016 5.759 SHARE DEALING 2015 3.482 No Director acquired or disposed of any interest in shares in the Company during the year. 2014 3.999 INTEREST IN TRANSACTIONS CHARITABLE DISTRIBUTION No Director is interested in any transaction (as defined by Section 139 of the Companies The charitable distribution for the year was $4.1 million and followed the traditional Act 1993) or proposed transaction with the Company. procedures: local elected representatives call for, or initiate, donations or projects in their areas, and then make the initial decisions on the extent of the grant. These CONCLUSION recommendations are then approved, or not, by the Trust House Foundation. All the Grant, Charitable Donations and Sponsorship distributions of $4.3 million for the year Regional Net Proceeds and Advisory Committees have established priorities for their to 31 March 2019 reinforces the importance of the organisation to our communities. communities and there is a high degree of openness, accountability and consultation. We take management seriously with the ‘at risk’ products and services that we deliver The various reports in this document record the distribution made to each community. to our communities and ensure that we have well trained staff who can minimise harm to ensure the well-being of our customers. This is our priority. DIRECTORS OF THE COMPANY I am also pleased that, due to the work completed by management, we are now a AND REMUNERATION recognised community housing provider. This means our tenants who qualify can now receive income related rent (IRR). In essence, this equates to more money in the The Directors, and the remuneration paid to them for the year ended 31 March 2019 pockets of our tenant's families. This I sincerely hope will improve their quality of life was: and was our aim when we registered. We now have 70 families or 14% of the housing DIRECTOR APPOINTED $ portfolio receiving IRR. This will only grow in the year ahead. J W Kershaw (Chairman) 2007 52,000 The year produced an outstanding financial performance for the Group and one that we have worked for many years to achieve. Maintaining this level of performance is D B Henry (Chair, Audit 2005 34,000 our aim, but the year ahead has some significant operational cost increases. Committee) Directors are unanimous in their belief that it is imperative that the company remains D J Baskerville 2011 32,000 financially strong so that it may offer real and tangible support to the communities in L M Griffiths 2013 32,000 which we trade. M Antonio 2017 24,000 Total 174,000 JOCK KERSHAW OPERATIONAL It is pleasing to report to our communities that the Trust House Group has had another good year. A particular highlight was the significant increase to our Copthorne Resort Solway Park trading profit to $5.75 million. This is the highest reported trading profit by the The hotel has performed well throughout the year and has exceeded our Group in our 70 year history. It is a direct result of the many strategic changes forecasted expectations. Our GM, Jill Harrison, and the team have done a great that have been made over the last few years and the commitment and hard work job. We have noted an increase in our conference business which has been tepid of our staff and support and wise counsel from our Board. over the last few years. This has enabled a good building block for the property. We have adopted some minor changes to our strategic framework model, which We have also continued our refurbishment program, with the removal is included in this report. You will also note that we have included a series of asbestos, upgrading of the reception area and the relaying of a new of measurements. This will enable both staff and external stakeholders to carpet throughout the property being the major projects completed objectively view our accomplishments in line with our planning. throughout the year. Our strategic pillars for the current financial year are: • Sustainable profitability Kourarau Hydro Scheme • Regulatory compliance The hydro scheme had a good year. The catalyst for this were some good • Community well-being increases to our spot rates due to low water levels in the South Island, • Systems and processes maintenance at the Huntly power plant and some constraints in the coal and gas supplies. The pillars assist in the advancement of our core purpose and further align our benchmark measurements to enable further enhancement of the communities We did have some damage to our spillway and land which we are currently in which we trade. working through, but in terms of overall performance, a very satisfying year. IN REGARDS TO OUR OUR PLACES SEGMENTS: Housing – some 485 properties Lower North Island • The Flax – Flaxmere Bars and Restaurants • Post Office Hotel – Pahiatua • The Farriers Bar & Eatery – Masterton The financial performance of this segment has vastly improved. We have had • Jackson Street Bar – Masterton many legislative changes to manage over the last few years and there is no • Kuripuni Sports Bar and Apache Jack's – Masterton getting away from the fact that this segment of our business suffered as a result. • Copthorne Hotel and Resort Solway Park – Masterton This year the turnaround has been significant and is yet again becoming a key • Pukemanu Bar & Eatery, E10 and The Bottle O – Martinborough part of our business model.