Trusts build property business
The Trusts have $15.7 million in cash but it’s not going to give it back, instead ploughing $10m into a new property investment company.
Trusts Investments Management Limited has been set up to be a professional property portfolio manager to diversify The Trusts’ income streams, chief executive of The Trusts Simon Wickham says.
Currently the Waitakere Licensing Trust has more than $19m in property assets. The Portage Licensing Trust has more than $8m in property assets.
Wickham says The Trusts will secure its future and ability to continue returning money to the community by shoring up revenue from its bars and retail outlets in case the economy stalls.
‘‘If we only invested in liquor and the liquor industry suffers a downturn we would be fully exposed to those cycles and so to would our ability to give back.’’
A further $1.3m of the money in the bank is working capital held to pay for inventory for example and the rest, about $4m, held for cash-flow and investments in its trading businesses, he says.
Could The Trusts give back more? Absolutely, Wickham says.
‘‘We think that we are giving back a reasonable amount at the moment.’’
The Trusts’ revenue is split about 80/20 between bottle shops and hospitality. This is why the organisation has upgraded its bottle stores around west Auckland to make them a better shopping experience. But Wickham says they have work to do when it comes to the bars, and upgrading the bars and restaurants is ongoing, he says.
‘‘We would be the first to admit some of our venues have become outdated whilst other successful venues such as Bricklane, BlackSalt and The Hangar bar still enjoy strong and loyal patronage ... We recognise that diversity is essential and not one size fits all.’’
He says The Trusts is working on a number of new venue concepts for some new sites. The Trusts is also in talks to bring a ‘‘leading suburban concept bar’’ to the west and have plans in place to upgrade five existing venues.
Property deals are also on the table but Wickham would not provide detail. Turn to page ten for an outline of The Trusts rights under the law and how licensing trusts’ work.