TIDMSAFE
RNS Number : 6331W
Safestore Holdings plc
16 November 2017
16 November 2017
Safestore Holdings plc
Fourth quarter trading update for the period 1 August 2017 to 31
October 2017
Solid Q4 completes another strong year
Group Operating Performance- Q4 Q4 2016(2) Change Change-
total 2017 CER(1)
------------------------------ ------ ----------- --------- --------
Revenue (GBP'm) 34.4 32.8 4.9% 4.1%
------------------------------ ------ ----------- --------- --------
Revenue- full year (GBP'm) 129.9 115.4 12.6% 10.0%
------------------------------ ------ ----------- --------- --------
Closing Occupancy (let
sq ft- million)(3) 4.14 3.97 4.3% n/a
------------------------------ ------ ----------- --------- --------
Maximum Lettable Area
(MLA)(4) 5.71 5.59 2.1% n/a
------------------------------ ------ ----------- --------- --------
Closing Occupancy (%
of MLA) 72.6% 71.0% +1.6ppts n/a
------------------------------ ------ ----------- --------- --------
Average Storage Rate
(GBP) 26.94 26.78 0.6% (0.4%)
------------------------------ ------ ----------- --------- --------
Average Storage Rate
(GBP)- full year 26.67 26.17 1.9% (0.6%)
------------------------------ ------ ----------- --------- --------
Group Operating Performance- Q4 Q4 2016(2) Change Change-
like-for-like(5) 2017 CER(1)
------------------------------ ------ ----------- --------- --------
Revenue- (GBP'm) 31.2 30.0 4.0% 2.8%
------------------------------ ------ ----------- --------- --------
Revenue- full year (GBP'm) 117.7 111.1 5.9% 3.3%
------------------------------ ------ ----------- --------- --------
Closing Occupancy- (let
sq ft- million)(3) 3.65 3.59 1.7% n/a
------------------------------ ------ ----------- --------- --------
Closing Occupancy- (%
of MLA) 75.0% 73.7% +1.3ppts n/a
------------------------------ ------ ----------- --------- --------
Average occupancy- full
year (let sq ft- million) 3.57 3.52 1.4% n/a
------------------------------ ------ ----------- --------- --------
Average Storage Rate
(GBP) 27.79 27.27 1.9% 0.8%
------------------------------ ------ ----------- --------- --------
Average Storage Rate
(GBP)- full year 27.35 26.26 4.2% 1.3%
------------------------------ ------ ----------- --------- --------
Highlights
-- Group revenue for the year in CER(1) up 10.0%
-- Like-for-like(5) Group revenue for the year in CER(1) up 3.3%
o UK up 3.1%
o Paris up 4.0%
-- Balanced approach to revenue management continues to drive returns
o Like-for-like average occupancy for the year up 1.4%
o Like-for-like closing occupancy of 75.0% (up 1.3ppts on Q4
2016)
o Like-for-like average storage rate for the year up 1.3% in
CER(1)
-- Freehold site acquired at Merry Hill, west of Birmingham for
a 55,000 sq ft store, subject to planning
-- Cash Tax Adjusted Earnings per Share(6) for the year ended 31
October 2017 is expected to be slightly ahead of consensus(7)
Frederic Vecchioli, Chief Executive Officer commented:
"We have had a good final quarter and a successful year, through
a combination of organic and acquisitive growth combined with a
strong operational performance. Over the last 18 months our market
leading positions in the UK and Paris have been consolidated,
supported by the acquisitions of Space Maker and Alligator Self
Storage, which added 24 stores to the UK portfolio and boosted
earnings from the outset. Organically we have developed and opened
six new stores in the UK and Paris, with a pipeline of a further
three new stores opening in London and Birmingham.
"The refinancing of our borrowings earlier in the year has
resulted in a strengthened, efficient, low cost balance sheet which
gives us the flexibility to continue to target selected development
and acquisition opportunities.
"We enter the new financial year in a strong position with
substantial growth potential from the integration of Alligator Self
Storage and the development of three new sites. However, our
priority and the largest opportunity remains the significant upside
from our 1.6m square feet of invested unlet space. We remain
confident in the future and focused on the continued delivery of
value to all shareholders."
Safestore will be issuing its Preliminary Results for the year
ended 31 October 2017 on Tuesday, 9 January 2018.
Business highlights
UK Trading Performance
UK Operating Performance- Q4 2017 Q4 2016(2) Change
total
---------------------------- -------- ----------- ---------
Revenue (GBP'm) 25.5 24.7 3.2%
---------------------------- -------- ----------- ---------
Revenue- full year (GBP'm) 97.5 87.4 11.6%
---------------------------- -------- ----------- ---------
Closing Occupancy- (let
sq ft- million)(3) 3.25 3.15 3.2%
---------------------------- -------- ----------- ---------
Maximum Lettable Area
(MLA)(4) 4.54 4.52 0.4%
---------------------------- -------- ----------- ---------
Closing Occupancy (%
of MLA) 71.6% 69.7% +1.9ppts
---------------------------- -------- ----------- ---------
Average Storage Rate
(GBP) 24.37 24.47 (0.4%)
---------------------------- -------- ----------- ---------
Average Storage Rate
(GBP)- full year 24.42 24.60 (0.7%)
---------------------------- -------- ----------- ---------
UK Operating Performance- Q4 2017 Q4 2016(2) Change
like-for-like(5)
---------------------------- -------- ----------- ---------
Revenue (GBP'm) 22.5 21.9 2.7%
---------------------------- -------- ----------- ---------
Revenue- full year (GBP'm) 85.7 83.1 3.1%
---------------------------- -------- ----------- ---------
Closing Occupancy- (let
sq ft- million)(3) 2.79 2.77 0.7%
---------------------------- -------- ----------- ---------
Closing Occupancy- (%
of MLA) 72.5% 71.9% +0.6ppts
---------------------------- -------- ----------- ---------
Average occupancy- full
year (let sq ft- million) 2.75 2.71 1.5%
---------------------------- -------- ----------- ---------
Average Storage Rate
(GBP) 24.92 24.78 0.6%
---------------------------- -------- ----------- ---------
Average Storage Rate
(GBP)- full year 24.88 24.65 0.9%
---------------------------- -------- ----------- ---------
The UK has performed well over the year resulting in revenue
growing by 11.6%. This performance reflects the full year
contribution from the acquisition of Space Maker in July 2016 as
well as the impact of the new stores opened in Wandsworth,
Chiswick, Birmingham and Altrincham, offset by the closure of
Deptford and our old Birmingham Central store. The new store
openings and Space Maker have performed in line with or slightly
ahead of their business plans.
On a like-for-like basis full year revenue grew by 3.1%. Average
occupancy over the year was up 1.5% with closing occupancy at
72.5%, up 0.6ppts. Average rate grew by 0.9% over the year with the
fourth quarter rate returning to growth at 0.6% year-on-year after
a flat third quarter. Sequentially, the fourth quarter rate was up
2.8% on the third quarter.
The previously announced acquisition of Alligator Self Storage
became effective from 1 November 2017 and will therefore only
impact future periods. Further details of this acquisition are
included in our announcement of 25 September 2017.
In addition, in October 2017, we completed the acquisition of a
1.34 acre industrial site at Merry Hill, around ten miles west of
the centre of Birmingham close to a major regional shopping centre.
Subject to receiving planning consent we expect to open a
purpose-built freehold 55,000 sq ft store in the first quarter of
2019.
Paris Trading Performance
Paris Operating Performance- Q4 2017 Q4 2016(2) Change
total
------------------------------ -------- ----------- --------
Revenue (EUR'm) 9.9 9.3 6.5%
------------------------------ -------- ----------- --------
Revenue- full year (EUR'm) 37.2 35.4 5.1%
------------------------------ -------- ----------- --------
Closing Occupancy (let
sq ft- million)(3) 0.89 0.82 8.5%
------------------------------ -------- ----------- --------
Maximum Lettable Area
(MLA)(4) 1.17 1.07 9.3%
------------------------------ -------- ----------- --------
Closing Occupancy (%
of MLA) 76.6% 76.3% 0.3ppts
------------------------------ -------- ----------- --------
Average Storage Rate
(EUR) 40.53 41.08 (1.3%)
------------------------------ -------- ----------- --------
Average Storage Rate
(EUR)- full year 40.28 39.85 1.1%
------------------------------ -------- ----------- --------
Revenue (GBP'm) 8.9 8.1 9.9%
------------------------------ -------- ----------- --------
Revenue- full year (GBP'm) 32.4 28.0 15.7%
------------------------------ -------- ----------- --------
Paris Operating Performance- Q4 2017 Q4 2016(2) Change
like-for-like(5)
------------------------------ -------- ----------- ---------
Revenue (EUR'm) 9.7 9.3 4.3%
------------------------------ -------- ----------- ---------
Revenue- full year (EUR'm) 36.8 35.4 4.0%
------------------------------ -------- ----------- ---------
Closing Occupancy- (let
sq ft- million)(3) 0.86 0.82 4.9%
------------------------------ -------- ----------- ---------
Closing Occupancy- (%
of MLA) 84.7% 80.7% +4.0ppts
------------------------------ -------- ----------- ---------
Average occupancy- full
year (let sq ft- million) 0.82 0.81 1.2%
------------------------------ -------- ----------- ---------
Average Storage Rate
(EUR) 41.44 41.11 0.8%
------------------------------ -------- ----------- ---------
Average Storage Rate
(EUR)- full year 40.75 39.85 2.3%
------------------------------ -------- ----------- ---------
Revenue (GBP'm) 8.7 8.1 7.4%
------------------------------ -------- ----------- ---------
Revenue- full year (GBP'm) 32.0 28.0 14.3%
------------------------------ -------- ----------- ---------
Our Paris business had a further strong quarter growing total
revenue by 6.5% resulting in 5.1% growth for the full year. Our new
stores at Emerainville and Combs-la-Ville are performing well and
contribute to the total revenue figures. However, the immaturity of
these stores has had a dilutive effect on the closing occupancy (%
of MLA) and the average rate.
Like-for-like revenue grew by 4.3% in the quarter and delivered
4.0% growth for the full year. The impact of the weakening of
Sterling in the period resulted in the Sterling equivalent
like-for-like revenue growing by 7.4% in the quarter and 14.3% for
the full year.
Our like-for-like occupancy performance was strong for the year
with closing occupancy at 84.7%, up 4.0ppts compared to 2016.
Pricing was robust and our like-for-like average rate was up 0.8%
year-on-year in the quarter, reflecting a very strong performance
in the same quarter in the previous year and, for the full year,
grew by 2.3% compared to 2016.
As ever, we continue to pursue our proven strategy of growing
the revenue of our market leading Parisian portfolio by achieving
an appropriate balance of rate and occupancy growth.
Outlook
In the last 18 months Safestore has further strengthened its
market positions in both the UK and Paris with the acquisitions of
Space Maker and Alligator, the opening of six new stores and the
establishment of a pipeline of a further three new stores. The
Group has 1.6m square feet of fully invested unlet space available
offering significant operational upside in the existing portfolio.
We remain focused on further optimising the Group's operational
performance whilst our balance sheet strength and flexibility
provides us with the opportunity to actively consider further
selective development and acquisition opportunities in our key
markets.
We believe Safestore is well placed to withstand the uncertain
macroeconomic backdrop in the UK. We have seen some positive trends
in the final quarter in relation to enquiry growth and rate in the
UK. The Group has the benefit of operating in two countries and, in
Paris, momentum has been strong in the second half of the year. As
a result we expect cash tax adjusted earnings per share(6) to be
slightly ahead of consensus(7) for the year ended 31 October 2017
and we look forward with confidence to the 2017/18 financial
year.
Ends
1 - CER is Constant Exchange Rates (Euro denominated results for
the current period have been retranslated at the exchange rate
effective for the comparative period, in order to present the
reported results on a more comparable basis).
2 - Q4 2016 is the quarter ended 31 October 2016.
3 - Occupancy excludes offices but includes bulk tenancy. As at
31 October 2017, closing occupancy includes 27,000 sq ft of bulk
tenancy (31 October 2016: 37,000 sq ft).
4 - MLA is Maximum Lettable Area.
5 - Like-for-like information includes only those stores which
have been open throughout both the current and prior financial
years, with adjustments made to remove the impact of new and closed
stores, as well as corporate transactions.
6 - Cash tax adjusted earnings per share is defined as profit or
loss for the year before exceptional items, corporate transaction
costs, change in fair value of derivatives, gain or loss on
investment properties and the associated tax impacts as well as
exceptional tax items and deferred tax charges, divided by the
weighted average number of shares in issue (excluding shares held
by the Safestore Employee Benefit Trust).
7 - As of today's date, based on the forecasts of nine analysts,
the consensus for cash tax adjusted earnings per share for the year
ended 31 October 2017 is 22.4p.
This announcement contains inside information.
Enquiries
Safestore Holdings plc 020 8732 1500
Frederic Vecchioli, Chief Executive Officer
Andy Jones, Chief Financial Officer
www.safestore.com
Instinctif Partners 020 7457 2020
Mark Reed
Guy Scarborough
Notes to editors:
-- Safestore is the UK's largest self-storage group with 146
stores (including the Alligator stores acquired on 1 November
2017), comprising 120 wholly owned stores in the UK (including 67
in London and the South East with the remainder in key metropolitan
areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool
and Bristol) and 26 wholly owned stores in the Paris region.
-- Safestore operates more self-storage sites inside the M25 and
in central Paris than any competitor providing more proximity to
customers in the wealthiest and densest UK and French markets.
-- Safestore was founded in the UK in 1998. It acquired the
French business "Une Pièce en Plus" ("UPP") in 2004 which was
founded in 1998 by the current Safestore Group CEO Frederic
Vecchioli.
-- Safestore has been listed on the London Stock Exchange since
2007. It entered the FTSE 250 index in October 2015.
-- The Group, including Alligator, provides storage to around
60,000 personal and business customers.
-- As at 31 October 2017, Safestore had a maximum lettable area
("MLA") of 5.71 million sq ft (excluding the expansion pipeline
stores and Alligator) of which 4.14 million sq ft was occupied.
-- Safestore employs around 600 people in the UK and France.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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