Pre-close trading update

RNS Number : 0425R

Safestore Holdings plc

14 November 2012

 



FOR IMMEDIATE RELEASE                                                                               14 November 2012

Safestore Holdings plc
Pre-close trading update for the year ended 31 October 2012

Performance in-line with full year expectations

Safestore Holdings plc ("Safestore" or "the Company"), the largest self storage retailer in the UK and Paris, is pleased to report on its trading progress (unaudited) for the fourth quarter and the year ended 31 October 2012 ("Q4 2012").

	In Sterling			In CER1
Y/E 31 October	2012	2011	Growth Rate	Growth Rate
	£ million	£ million	%	%
Q4 revenue	25.5	25.2	+0.8%	+2.7%
Full year revenue	98.8	95.1	+4.0%	+5.5%
	£	£	%	%
Q4 RevPAF2	20.25	20.11	+0.7%	+2.8%

Highlights

·      Further revenue and RevPAF growth despite challenging trading conditions

·      3.29 million sq ft now let, up 2.4% up on last year's record level

·      National accounts now represent more than 200,000 sq ft. or 7.9% of total UK occupancy

·      Impact of the imposition of UK VAT on the quarter was in line with previous guidance

·      Trading in Paris remains resilient

·      Board expects full year performance to be in line with its expectations

Peter Gowers, Chief Executive Officer commented:

"We have delivered further growth and progress on our 'More Space' strategy during a challenging quarter that included the imposition of VAT on UK self-storage and further macro-economic and exchange rate pressure.  Our focus on yield management has helped us build on record prior year occupancy levels with a growing contribution from large corporate customers.  We remain strongly focused on delivering on our strategy and tightly controlling costs and the board is confident full year results will be in line with its expectations."

Business highlights

In line with our 'More Space' strategy, we continue to focus on driving organic growth by striking the appropriate balance between occupancy and rate growth to maximise RevPAF. Highlights of trading in our two key markets of the UK and Paris are detailed below.

UK - further progress despite the impact of the introduction of VAT

Total revenue in the UK for Q4 2012 was up 2.7% compared to Q4 2011.  UK RevPAF was £19.07, up 2.7% on the same period last year. Closing occupancy³ across all stores in the UK was 2.54 million sq ft., up 1.6% on 31 October 2012.  Occupancy was broadly flat when measured as a percentage of Maximum Lettable Area ("MLA") at 61.9%, owing to the addition of two new stores⁴ during the year. The average self storage rate per sq ft for Q4 in the UK was £23.71, 1.2% lower than last year.

With demand holding up well in the UK and good progress on our yield management strategy and national accounts, the main issue affecting trading was the previously announced imposition of full 20% UK VAT on all self storage with effect from 1 October 2012.  We have sought to pass on the full additional costs of VAT wherever possible, with targeted discounts provided to a relatively small number of key or high value customers.  This has resulted in a higher vacate rate and moderation in the rate of new let growth. While it will take more than one month's data to fully assess the impact on our business, early indications suggest that it remains in-line with previous guidance.

France - continued growth from mature stores and new suburban markets

Trading in Paris remains resilient, reflecting our strong competitive position amid the challenges of the Eurozone economy.

Total revenue for Q4 2012 was up 4.3% over the prior year in CER but down 4.7% in Sterling, reflecting the significant year on year fall in Euro exchange rates.  Paris RevPAF was €32.09 up 7.1% on the same period last year. Closing occupancy³ in Paris was 0.75 million sq ft, up 5.0% compared to 31 October 2011. Closing occupancy was 71.6% at 31 October 2012, down from 75.2% at 31 October 2011 owing to the opening of new stores⁴ added late in the year. The average self storage rate per sq ft for Q4 2012 in Paris was €36.65, 0.8% lower than the same period last year.  The blended average rate reduction is largely driven by the rapid growth in our recently opened suburban stores, which trade at a lower price point than their central Parisian counterparts.

The French economy remains challenging but we continue to deliver growth in this market.  Our strong competitive position, together with the absence of new supply, create solid conditions for self-storage performance.

Outlook

As we enter our new financial year, trading conditions will continue to be affected by the general economic situation and the impact of VAT in the UK. However, resilient demand and limited industry supply growth, coupled with further progress on our strategy and tight control of costs, leave Safestore well positioned to withstand these short-term challenges.

Ends

1 - 'CER' is Constant Exchange Rate

2 - RevPAF is calculated as Total Revenue divided by total MLA excluding the five stores opened since 1 May 2011

3 - Closing occupancy excludes offices but includes 79,100 sq ft of bulk tenancy as at 31 October 2012 (31 October 2011 - 67,200 sq ft)
4 - The new stores opened since May 2011 at London New Southgate, London Staines, Paris Torcy, Paris Gonesse and Paris Velizy, represent an increase of 248,000 sq ft in MLA.  No further new openings are expected during the next 12 months.

Enquiries

Safestore Holdings plc	020 8732 1500
Peter Gowers, Chief Executive Officer
Richard Hodsden, Chief Financial Officer
www.safestore.com
Hudson Sandler	020 7796 4133
Nick Lyon / Wendy Baker

Notes to editors:

·	Safestore is the UK's largest self storage group with 135 stores. They include 98 wholly owned stores in the UK and 25 wholly owned stores in the Paris region together with 12 stores under management in the UK.
·	The Company provides storage to around 43,700 personal and business customers.
·	Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.24 million sq ft (including the expansion pipeline stores) of which 3.29 million sq ft is currently occupied.
·	A strong balance sheet and operational cash flow allow Safestore to invest in continual improvements in the operational performance of its stores, in new store development and acquisitions where appropriate.
·	Safestore employs around 550 people.

 

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