2014 Annual Report and Notice of 2015 AGM

RNS Number : 2577F

Safestore Holdings plc

18 February 2015

 



Safestore Holding plc

Publication of Annual Report and Accounts 2014 and Notice of 2015 AGM

18 February 2015

Safestore Holdings plc ("the Company") released its preliminary announcement of annual results on 22 January 2015 ("Preliminary Results Announcement").

Further to that announcement, the Company can now confirm that it has submitted to the Financial Conduct Authority's national storage mechanism its Annual Report and Accounts for the year ended 31 October 2014 and the Notice of AGM (as required by Listing Rules 9.6.1 and 9.6.3).

The Safestore Holdings plc 2015 Annual General Meeting will be held at Brittanic House, Stirling Way, Borehamwood, Hertfordshire WD6 2BT at 12'noon on Thursday, 19 March 2015. In connection with the AGM, the following documents have been posted to those shareholders who have elected to receive hard copy communications, or have otherwise been made available to shareholders today:

·     2014 Annual Report and Accounts

·     Notice of the 2015 AGM

·     Form of Proxy for the 2015 AGM

The 2014 Annual Report and Accounts and the Notice of AGM are available to view on the Company's website: www.safestore.com (in compliance with Disclosure and Transparency Rule 6.3.5(3)).

The Company's Annual Report and Accounts for the year ended 31 October 2014 and the Notice of AGM will also shortly be available for inspection at the Financial Conduct Authority's national storage mechanism at www.morningstar.co.uk/uk/NSM.

The Appendix to this announcement contains additional information for the purposes of compliance with the Disclosure and Transparency Rules and should be read together with the Preliminary Results Announcement which included, inter alia, a condensed set of the Company's financial statements and extracts from the management report. Together these constitute the information required by DTR 6.3.5 to be communicated to media in full unedited text. This announcement should be read in conjunction with and is not a substitute for reading the full Annual Report and Accounts 2014.

Appendix

Page and note references in the text below refer to page numbers in the 2014 Annual Report and Accounts.

Statement of Directors' responsibilities

The following responsibility statement is extracted from the Statement of Directors' Responsibilities on page 51 of the 2014 Annual Report and Accounts and is repeated here solely for the purpose of complying with DTR 6.3.5. The statement relates to the full 2014 Annual Report and Accounts and not the extracted information presented in this announcement or the Preliminary Results Announcement.

The Directors are responsible for preparing the Annual Report, the Directors' remuneration report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

·     select suitable accounting policies and then apply them consistently;

·     make judgements and accounting estimates that are reasonable and prudent;

·     state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent company financial statements respectively; and

·     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Having taken all matters considered by the Board and brought to the attention of the Board during the year into account, the Directors consider that the Annual Report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed on pages 29 to 31 confirm that, to the best of their knowledge:

·     the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

·     the Directors' report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

In accordance with Section 418 of the Companies Act 2006, Directors' reports shall include a statement, in the case of each Director in office at the date the Directors' report is approved, that:

·     so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

·     he has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

The Annual Report on pages 1 to 95 was approved by the Board of Directors and authorised for issue on 22 January 2015 and signed on its behalf by:

Frederic Vecchioli, Chief Executive Officer, and Andy Jones, Chief Financial Officer.

Principal risks and risk management

The risks and uncertainties set out below are extracted from pages 12 to 14 of the 2014 Annual Report and Accounts and are repeated here solely for the purpose of complying with DTR 6.3.5.

Risk management process

The Group faces a number of risks which, if they arise, could affect its ability to achieve its strategic objectives. The Board is responsible for determining the nature of these risks and ensuring appropriate mitigating actions are in place for managing them.

Effective risk management requires awareness and engagement at all levels of our organisation. It is for this reason that risk management is incorporated into the day-to-day management of our business, as well as being reflected in the Group's core processes and controls. The Board oversees the risk management strategy and the effectiveness of the Group's internal control framework. Risks are considered at every business level and are assessed, discussed and taken into account when deciding upon future strategy, approving transactions and monitoring performance.

Strategic risks are identified, assessed and managed by the Main Board and Audit Committee. They are reviewed at Board level to ensure they are valid, and they represent the key risks associated with the current strategic direction of the Group. Operational risks are identified, assessed and managed by Executive Team members and reported to the Main Board and Audit Committee. These cover all areas of the business, such as Finance, Operations, Investment, Development and Corporate Risks.

The risk management process commences with rigorous risk identification sessions incorporating contributions from functional managers and Executive Management Team members. The output is reviewed and discussed by members of senior management from across the business. The Executive Management Team identifies and prioritises the top business risks, which are then challenged by the Board. The process focuses on the identification of key strategic, financial and operational risks. The potential impact and likelihood of the risks occurring are determined, key risk mitigations are identified, and the current level of risk assessed against the Board's risk appetite. These top business risks form the basis for the principal risks and uncertainties detailed in the section below.

Principal risks and uncertainties

The principal risks and uncertainties described are considered to have the most significant effect on Safestore's strategic objectives. This list is not intended to be exhaustive. Some risks, however, remain outside of the Group's full control, for example macroeconomic issues, changes in government regulation and acts of terrorism.

The key strategic and operational risks are monitored by the Board and are defined as those which could prevent us from achieving our business goals. Our current strategic and operational risks and key mitigating actions are as follows:

Risk	Current mitigation activities
Strategy
The Group develops business plans based on a wide range of variables. Incorrect assumptions about the self-storage market or changes in the needs of customers, or the activities of customers may adversely affect the returns achieved by the Group	·    The strategy development process draws on internal and external analysis of the self-storage market, emerging customer trends and a range of other factors. ·    Strengthened focus on yield management with regular review of demand levels and pricing at each individual store. ·    The portfolio is geographically diversified with performance monitoring covering the personal and business customers by segments.
Finance risk
Lack of funding resulting in inability to meet business plans, satisfy liabilities or breach of covenants	·    Funding requirements for business plans and the timing for commitments are reviewed regularly as part of the monthly management accounts. ·    The Group manages liquidity in accordance with Board approved policies designed to ensure that the Group has adequate funds for its ongoing needs. ·    The Board regularly monitors financial covenant ratios and headroom. ·    The refinanced banking facilities were extended to 30 June 2018 during FY14 and the US private placement notes mature in five and ten years.
Treasury risk
Adverse currency or interest rate movements	·    Guidelines set for our exposure to fixed and floating interest rates and use of interest rate and currency swaps to manage this risk. ·    Foreign currency denominated assets financed by borrowings in the same currency where appropriate. ·    The Group has interest rate derivative contracts in place that were re-aligned during FY14 to cover the full term of the bank facilities and the US private placement notes.
Property investment and development
Acquisition and development of properties that fail to meet performance expectations Overexposure to developments within a short timeframe	·    Thorough due diligence conducted and detailed analysis undertaken prior to Board approval for property investment and development. ·    The Group's overall exposure to developments is monitored and projects phased. ·    The performance of individual properties is benchmarked against target returns.
Valuation risk
Value of our properties declining as a result of external market or internal management factors. In the absence of relevant transactional evidence, valuations can be inherently subjective leading to a degree of uncertainty.	·    Independent valuations conducted by experienced, independent, professionally qualified valuers. ·    A diversified portfolio let to a large number of customers should help to mitigate any negative impact arising from changing conditions in the financial and property market. ·    Headroom of loan to value banking covenants is maintained and reviewed. ·   The lowered gearing levels during FY14 provides enhanced headroom on valuations and significantly reduces the likelihood of covenants being endangered.
Occupancy risk
A potential loss of income and increased vacancy due to falling demand, oversupply, or customer default	·    Personal and business customers cover a wide range of segments, sectors and geographic territories with limited exposure to any single customer. ·    Dedicated specialised support introduced during FY14 for improved enquiry capture. ·    Weekly monitoring of occupancy levels and revised regional structure in FY14 to facilitate closer management of stores. ·    Monitoring of reasons for customers vacating and exit interviews conducted. ·    Independent feedback facility for customer experience. ·    The occupancy rate across the portfolio has been grown through FY2014 due to flexibility offered on deals by in-house marketing and the customer support centre.
Real estate investment trust ("REIT") risk
Failure to comply with the REIT legislation could expose the Group to potential tax penalties or loss of its REIT status	·    Internal monitoring procedures in place to ensure that the appropriate rules and legislation are complied with and this is formally reported to the Board.
Business interruption risk
Major events mean that the Group is unable to carry out its business for a sustained period	·    Business continuity plans in place and tested. ·    Back-up systems at remote places and remote working capabilities. ·    Reviews and assessments are undertaken periodically for enhancements to supplement the existing compliant aspects of buildings and processes.

END

For further information, please contact:

Safestore Holdings plc

Sam Ahmed, Company Secretary                                                     Tel: [phone]

About Safestore:

·	Safestore is the UK's largest self-storage group with 121 stores, comprising 97 wholly owned stores in the UK (including 58 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool and Bristol) and 24 wholly owned stores in the Paris region. In addition, Safestore has 12 Space Maker stores under management in the UK.
·	Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en Plus" 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.
·	The Group provides storage to around 48,000 personal and business customers.
·	Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.03 million sq ft (excluding the expansion pipeline stores) of which 3.46 million sq ft is currently occupied.
·	Safestore employs around 525 people in the UK and France.

 

END

 

 

MSCTPMTTMBJBBLA