Fourth quarter trading update

RNS Number : 3920H

Safestore Holdings plc

15 November 2018

 

                                                                                                                        15 November 2018

Safestore Holdings plc

Fourth quarter trading update for the period 1 August 2018 to 31 October 2018

Increasing momentum in final quarter completes another strong year

Group Operating Performance	Q4 2018	Q4 20172	Change	Change- CER1
Revenue (£'m)	38.3	34.4	11.3%	11.6%
Revenue (£'m)- full year	143.9	129.9	10.8%	10.4%
Closing Occupancy (let sq ft- million)4	4.69	4.14	13.3%	n/a
Closing Occupancy (% of MLA)5	73.6%	72.6%	1.0ppts	n/a
Average Storage Rate (£)	26.42	26.94	(1.9%)	(1.7%)
Average Storage Rate (£)- full year	25.90	26.67	(2.9%)	(3.3%)

Group Operating Performance- like-for-like3	Q4 2018	Q4 20172	Change	Change- CER1
Revenue (£'m)	35.7	33.8	5.6%	5.9%
Revenue (£'m)- full year	134.0	126.9	5.6%	5.2%
Closing Occupancy (let sq ft- million)4	4.25	4.09	3.9%	n/a
Closing Occupancy (% of MLA)5	76.6%	73.9%	+2.7ppts	n/a
Average occupancy- full year (let sq ft-million)	4.30	4.12	4.4%	n/a
Average Storage Rate (£)	27.22	26.81	1.5%	1.8%
Average Storage Rate (£)- full year	26.71	26.55	0.6%	0.2%

Highlights

·      Group revenue for the year in CER¹ up 10.4%

·      Like-for-like³ Group revenue for the year in CER¹ up 5.2%

o  UK up 5.2%

o  Paris up 5.1%

·      Group like-for-like closing occupancy of 76.6% (up 2.7ppts on Q4 2017)

·      Group like-for-like average occupancy for the year up 4.4%

·      Group like-for-like average storage rate for the year up 0.2% in CER¹

·      Edinburgh Gyle store lease extended by 10 years

·      Adjusted Diluted EPRA earnings per share⁶ anticipated to increase in line with consensus⁷

Frederic Vecchioli, Chief Executive Officer commented:

"I am pleased to report improving trading momentum has driven a strong fourth quarter, concluding another excellent year's performance. The Alligator portfolio of twelve stores, acquired at the beginning of the financial year, is fully integrated and performing well. The year's new store openings at London Mitcham, Paddington Marble Arch and Paris-Poissy are trading in line or ahead of our business plans.

Further to our successful openings this year, we plan to open new stores in London-Carshalton, Paris-Pontoise, Paris-Magenta and Birmingham-Merry Hill in the 2018/2019 financial year.

Our strong balance sheet continues to provide the flexibility to target selected development and acquisition opportunities as they arise.

The company is in an excellent position and, as ever, our top priority remains the significant organic growth opportunity represented by the 1.7m square feet of currently unlet space in our existing fully invested estate. Our leading market positions in the UK and Paris combined with our resilient business model enable us to withstand any macro-economic uncertainty that may arise over the coming months and we look forward to the future with confidence."

Safestore will be issuing its Preliminary Results for the year ended 31 October 2018 on Tuesday, 8 January 2019.

Business highlights

UK Trading Performance

UK Operating Performance	Q4 2018	Q4 20172	Change
Revenue (£'m)	29.0	25.5	13.7%
Revenue (£'m)- full year	109.0	97.5	11.8%
Closing Occupancy (let sq ft- million)4	3.74	3.25	15.1%
Closing Occupancy (% of MLA) 5	72.9%	71.6%	1.3ppts
Average Storage Rate (£)	24.12	24.37	(1.0%)
Average Storage Rate (£)- full year	23.66	24.42	(3.1%)

UK Operating Performance- like-for-like3	Q4 2018	Q4 20172	Change
Revenue (£'m)	26.5	25.0	6.0%
Revenue (£'m)- full year	99.5	94.6	5.2%
Closing Occupancy (let sq ft- million)4	3.33	3.21	3.7%
Closing Occupancy (% of MLA)5	74.7%	71.8%	+2.9ppts
Average occupancy- full year (let sq ft-million)	3.25	3.11	4.5%
Average Storage Rate (£)	24.76	24.14	2.6%
Average Storage Rate (£)- full year	24.33	24.20	0.5%

The UK's fourth quarter performance was strong with the business growing revenue by 13.7% and like-for-like revenue growth of 6.0%. Performance was strong across all of the UK with London and the South East up 5.1% and regional UK up 8.3%.

Over the year, the business added occupancy of 132,000 sq ft on a like-for-like basis (2017: 123,000). As a result, Q4 like-for-like closing occupancy, at 74.7%, increased by 2.9 percentage points compared to the prior year.

Like-for-like average rate in the UK improved in the period and was up 2.6% compared to Q4 2017. Average rate has showed improving momentum as the year has progressed and finished the year up 0.5%.

When the impact of the acquisition of Alligator, combined with new store openings in Mitcham and Paddington Marble Arch offset by closures in Deptford, Merton, Leeds and Paddington is taken into consideration, revenue grew by 11.8% for the full year. New stores, in the initial period after opening, are dilutive to occupancy and rate. However, all new stores and Alligator are trading in line or ahead of our business plans.

Paris Trading Performance

Paris Operating Performance	Q4 2018	Q4 20172	Change
Revenue (€'m)	10.5	9.9	6.1%
Revenue (€'m)- full year	39.4	37.2	5.9%
Closing Occupancy (let sq ft- million)4	0.95	0.89	6.7%
Closing Occupancy (% of MLA)5	76.5%	76.6%	(0.1ppts)
Average Storage Rate (€)	39.89	40.53	(1.6%)
Average Storage Rate (€)- full year	39.44	40.28	(2.1%)
Revenue (£'m)	9.3	8.9	4.5%
Revenue (£'m)- full year	34.9	32.4	7.7%

Paris Operating Performance- like-for-like3	Q4 2018	Q4 20172	Change
Revenue (€'m)	10.3	9.8	5.1%
Revenue (€'m)- full year	39.0	37.1	5.1%
Closing Occupancy (let sq ft- million)4	0.92	0.88	4.5%
Closing Occupancy (% of MLA)5	84.1%	82.6%	+1.5ppts
Average occupancy- full year (let sq ft-million)	0.89	0.84	6.0%
Average Storage Rate (€)	40.63	40.72	(0.2%)
Average Storage Rate (€)- full year	39.96	40.34	(0.9%)
Revenue (£'m)	9.2	8.8	4.5%
Revenue (£'m)- full year	34.5	32.3	6.8%

Paris had another strong quarter growing revenue by 6.1% compared to last year.

On a like-for-like basis the business grew revenue by 5.1% for the quarter and also by 5.1% for the full year. This was driven by average occupancy growth of 6.0% for the year.

Like-for-like occupancy grew by 36,000 sq ft for the year (2017: 68,000 sq ft) resulting in closing occupancy of 84.1%, up 1.5 percentage points compared to the prior year.

Like-for-like average rate in Paris was down 0.2% in the quarter but has, like the UK, shown improving momentum as the year has progressed.

Excluding our lower priced suburban Emerainville store, which opened in September 2016, from the like-for-like stores the average rate was up 0.3% in the period.

The impact of the new stores opened in June 2017 at Combs-la-Ville and August 2018 at Poissy, in the west of Paris, is to dilute rate and occupancy in the initial period after trading commences. These stores, however, are trading ahead of our business plan.

The impact of the 1.5% weakening of Sterling over the year contributed to the Sterling equivalent total revenue increasing 6.8% on the prior year.

Asset Management

Following the quarter end, we extended the lease on our Edinburgh Gyle store by ten years. The lease now has eighteen years remaining and expires in 2036. In addition, a six month rent free period was agreed.

In our Interim Results this year we announced that we had exchanged contracts to acquire a freehold site in Carshalton in South London subject to planning permission.

We have now received planning permission and have completed the acquisition of the site. We anticipate opening the c. 40,000 sq ft store in the second half of the 2019 financial year.

Outlook

Performance was strong in the final quarter across the Group and we anticipate that our Adjusted Diluted EPRA earnings per share⁶ will be in line with consensus⁷ for the year-ended 31 October 2018. Our strong market positions and geographical diversity means that we believe we are well placed to withstand any macroeconomic uncertainty in the UK and we look forward with confidence to the 2018/19 financial year.

Ends

Notes

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 2017 is the quarter ended 31 October 2017.

3 - 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.

4 - Closing occupancy excludes offices but includes 25,750 sq ft of bulk tenancy as at 31 October 2018 (31 October 2017 - 27,250 sq ft).

5 - MLA is Maximum Lettable Area.

6 - Adjusted Diluted EPRA earnings per share is defined as profit or loss for the period after tax but excluding corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties and the associated tax impacts, IFRS 2 share-based payment charges, exceptional tax items and deferred tax charges. This adjusted earnings is divided by the diluted number of shares (excluding shares held by the Safestore Employee Benefit Trust).

7 - As of today's date, based on the forecasts of ten analysts, the consensus range for Adjusted Diluted EPRA earnings per share for the year ended 31 October 2018 is from 26.0p to 26.8p with an average of 26.4p. Adjusted Diluted EPRA earnings per share for the year ended 31 October 2017 was 23.2p.

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
Guy Scarborough Catherine Wickman

Notes to editors:

·    Safestore is the UK's largest self-storage group with 146 stores at 31 October 2018, comprising 119 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 27 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 provides storage to around 60,000 personal and business customers.

·      As at 31 October 2018, Safestore had a maximum lettable area ("MLA") of 6.37 million sq ft (excluding the expansion pipeline stores) of which 4.69 million sq ft was occupied.

·      Safestore employs around 650 people in the UK and France.

 

END

 

 

TSTGGGBCGUPRGQC