Tuesday, July 21, 2015
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FULL STORY
Hare a hit at exhibition P6
Tax write-off puts trust into the red BY SUE NEWMAN
SUE.N@THEGUARDIAN.CO.NZ
Nothing in way of shield P18
The Ashburton Trust turned over $18.6 million in its last financial year, but on the back of a significant tax write-off, it ended the year $300,747 in the red. In a year that trust board chairman Alister Lilley described as at best average, the positives were around cashflow. Although this was $300,000 down on the previous year, most of the decline was attributable to the closure of the Shed nightclub, he said. “It was losing money and we’ve closed it, plain and simple.” The biggest contributor to this year’s big loss was a tax write-off on losses incurred two or three years ago. This was an accounting standards requirement. Last year the trust group had a $47,986 loss. Changes to the financing of Somer-
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P4
set House have also impacted on this year’s books. Initially the trust loaned money, interest free, to Somerset Ashburton Limited. This has penalised the trust over seven years to the tune of $1.8 million in lost interest. “The trust has had to suck this up and that’s been a real challenge. If we hadn’t done this we would have been profitable and we would have used our tax losses,” Mr Lilley said. When debt free, Somerset House will generate an annual income from rentals and leases of $1 million. This money will be distributed to the community through the Braided Rivers Trust. While the trust had made a significant loss for the year, Mr Lilley said he was happy with the way the business was trading. “Our cashflow is very strong but looking ahead, this year will have its
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challenges too with the new alcohol policy, drink driving law changes, dairy downturn and a late start for the works.” A trading environment that was likely to remain challenging and everincreasing compliance costs meant the trust was taking a hard look at planned expenditure in terms of maintenance and redevelopment, he said. “It’s how we react to those challenges that will be the key; we have to be responsible with our governance. While you can handle one challenge at a time, we’ve been handling three or four and that’s tough.” The trust has plans this year to revamp the Speight’s Alehouse and to pick up deferred maintenance and upgrade work at the Hotel Ashburton but is taking a cautious approach to both projects. Ph 03 307 7900 to subscribe!
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