23 November 2020 Media Release

Trust House Well Placed Despite Covid

Back to back positive trading years for Trust House Group has the organisation well placed to navigate challenges caused by the Covid-19 pandemic and an ageing housing stock.

Net profit for the 2018-19 financial year was $5.77million, slightly up on the previous 12 months, and a record for the community-owned organisation. In addition, the $4.5million in grants, charitable donations and sponsorship was the highest return to the communities ever achieved.

Another highlight was the increased reinvestment in housing and also Copthorne Hotel and Resort Solway Park during 2019-20 which both tenants and guests respectively will benefit from in the years ahead.

The 2019/20 financial results are subject to audit, with Audit New Zealand currently processing a back-log because of delays caused by Covid-19.

Chief Executive Charlie Kaka says the results are very pleasing and provide management and staff at Trust House with immense satisfaction for the hard work and commitment demonstrated throughout the year.

Mr Kaka says the result would have been better had they not lost eight trading days due to the Covid-19 lockdown at the end of March, (the financial year runs from 1 April to 31 March). This resulted in all of Trust House’s eight hospitality businesses being closed.

With the lockdown continuing through April, the lowering of alert levels in May, plus further Covid alert level disruptions later in the year, the hospitality businesses took a major hit which will be reflected in the financials next year, Mr Kaka says.

“The Covid-19 lockdown protocols initiated by the government resulted in our hospitality businesses being closed, the Copthorne room occupancy rate reducing to single digits, and all conference and function bookings being cancelled,” Mr Kaka says.

“Fortunately, we have seen a significant improvement in the tourism and conference markets and there is cautious optimism that this will continue.”

Such favourable prospects mean that planned refurbishment work on Copthorne will continue.

Trust House is also one of the largest community housing providers in New Zealand with around 483 rental properties in the Wairarapa and Tararua which it owns, operates and manages. Rents, on average, continue to be set at below the lower quartile benchmarks (as per MBIE rend and bond statistics). As of 31 March 2020 there were 158 tenants and their families receiving Income Related Rent (IRR).

“This significantly improves the wellbeing of families in our region and was a major factor in Trust House becoming a registered community housing provider.”

In response to the economic and social impact of the Covid-19 lockdown, Trust House put a freeze on planned rent increases earlier this year and introduced other additional support for tenants. Rent increases of on average between $20 – $25 had been planned to take effect from the end of March. The increases would have only affected tenants not receiving the IRR subsidy.

Mr Kaka says, the current heated housing market is putting a further squeeze on the rental market and Trust House will continue to do all it can to provide affordable rental homes to low income individuals and families who need them most. As such, this will likely mean increasing the current housing stock, he says.

“There is a real opportunity for Trust House to now join the crusade to see how we can build some new homes and also continue to refurbish our existing stock.”

Since acquiring the housing portfolio in 1999, Trust House has spent around $26 million on these assets. The average age of the houses is 55 years. Factoring in refurbishment costs, direct expenses and other overheads, the housing sector returned a net profit of $464,661 for 2019-20.

Emphasising the pivotal role Trust House plays in the community was the $4.5million distributed in grants, charitable donations and sponsorship to more than 445 organisations.

Among some of the biggest recipients were Destination Wairarapa, NZ Cycle Classic, Pukaha National Wildlife Centre, Wings Over Wairarapa, Flaxmere School Cluster, Mary Potter Hospice and Upper Hutt City of Song Charitable Trust.

Trust House Limited chair Jock Kershaw says 2019-20 was a “solid year” for the organisation despite the impact of Covid-19.

“Directors remain of a view that the company must remain financially strong so that Trust House may offer tangible support to the communities in which we conduct business and generate revenue,” Mr Kershaw says.

Charlie Kaka was appointed Chief Executive in July, taking over from Allan Pollard who held the position for seven years.