TIDMBYG
RNS Number : 0281U
Big Yellow Group PLC
20 November 2023
20 November 2023
Big Yellow Group PLC
("Big Yellow", "the Group" or "the Company")
Results for the Six Months ended 30 September 2023
Six months Six months
Financial metrics ended ended Change
30 September 30 September
2023 2022
Revenue GBP99.6 million GBP93.8 million 6%
Store revenue (1) GBP98.3 million GBP92.8 million 6%
Like-for-like store revenue
(1,2) GBP96.8 million GBP92.5 million 5%
Store EBITDA (1) GBP71.5 million GBP66.8 million 7%
Adjusted profit before tax
(1) GBP53.5 million GBP54.6 million (2%)
EPRA earnings per share (1) 29.0 pence 29.3 pence (1%)
Interim dividend per share 22.6 pence 22.3 pence 1%
Statutory metrics
Profit before tax GBP119.6 million GBP6.8 million GBP112.8m
Cash flow from operating activities
(after net finance costs and
pre-working capital movements)(3) GBP54.3 million GBP55.2 million (2%)
Basic earnings per share 65.3 pence 3.3 pence 62.0p
Store metrics
Store Maximum Lettable Area
("MLA") (1) 6,419,000 6,295,000 2%
Closing occupancy (sq ft) (1) 5,228,000 5,300,000 (1%)
Occupancy growth in the period
(sq ft) (1,4) 140,000 154,000 (9%)
Closing occupancy (1) 81.4% 84.2% (2.8 ppts)
Occupancy - Big Yellow like-for-like
stores (1,5) 84.6% 86.8% (2.2 ppts)
Average achieved net rent per
sq ft (1) GBP33.02 GBP30.55 8%
Closing net rent per sq ft
(1) GBP33.47 GBP31.44 6.5%
(1) See note 20 for glossary of terms
(2) Excluding Aberdeen (acquired June 2022), Harrow and Kingston
North (both opened September 2022) and Kings Cross (opened June
2023).
(3) See reconciliation in Financial Review
(4) In June 2022, the Group acquired a store in Aberdeen with
39,000 sq ft of occupancy. The total increase in the Group's
occupancy for the six months to 30 September 2022 was 193,000 sq
ft.
(5) As per (2), additionally excluding the Armadillo stores
First Half Highlights
-- Revenue growth for the period was 6%, with like-for-like store revenue up by 5%, driven by
increases in average achieved rents
-- Like-for-like occupancy increase of 1.5 ppts from 1 April 2023 and down 2.2 ppts from same
time last year to 84.6% (September 2022: 86.8%). Closing occupancy, reflecting the additional
capacity from recently opened stores, is 81.4% (September 2022: 84.2%)
-- Average achieved net rent per sq ft increased by 8% period on period, closing net rent up
by 6.5% from September 2022
-- Overall store EBITDA was up 7% in the period and the EBITDA margin increased over the six
months to 72.7% (2022: 72.0%); the established store portfolio increased to 75.1% (2022: 74.1%)
with closing occupancy of 85.5% (2022: 88.2%)
-- Cash flow from operating activities (after net finance costs and pre-working capital movements)
decreased by 2% to GBP54.3 million, which reflects our increased borrowing and operating costs
over the period
-- Adjusted profit before tax down 2% to GBP53.5 million, with EPRA earnings per share down 1%
-- Statutory profit before tax of GBP119.6 million compared to GBP6.8 million in the prior period
due to a revaluation surplus of GBP67.2 million in the period (2022: deficit of GBP47.7 million),
reflecting the growth in operating cash flow during the period
-- Interim dividend of 22.6 pence per share declared, an increase of 1%
Investment in new capacity
-- GBP107 million (net of expenses) raised by way of a placing of 6.3% of the Company's issued
share capital to fund the build out of the development pipeline
-- 121,000 sq ft of capacity added in the period with one new store opened in Kings Cross, and
an extension completed at Armadillo Stockton South
-- Acquisition of freehold property in Leicester, taking the pipeline to 11 development sites
and two replacement stores of approximately 0.9 million sq ft (14% of current MLA), of which
11 are in London or within close proximity. 1.2 million sq ft of fully built vacant space
is currently available for future growth
-- Planning consent granted for new store in Wapping (London); we now have seven of our 13 pipeline
stores with planning
Commenting, Nicholas Vetch CBE, Executive Chairman, said:
"We have delivered strong EBITDA growth with the increase in net
achieved rents offsetting the rise in operating costs, with profit
marginally down due to higher interest rates. Our London and South
East stores, representing 74% of revenue, have outperformed those
located in the regions.
The transition to a higher interest rate environment has been
testing but we believe that this has now been largely absorbed into
the business.
Following the recent placing, we have the funding and balance
sheet strength to commence the build out of the next phase of
stores. We believe that this, along with the available space on our
existing platform, will drive a significant increase in revenue and
earnings over the next few years.
The balance sheet will be further strengthened by the sale of
approximately GBP90 million of surplus non-storage assets, which we
expect to complete over the next 18 months.
There is evidence that land prices have been, and are, dropping
materially and this will provide an opportunity to replenish the
pipeline."
- Ends -
ABOUT US
Big Yellow is the UK's brand leader in self storage. Big Yellow
now operates from a platform of 109 stores, including 24 stores
branded as Armadillo Self Storage. We have a pipeline of 0.9
million sq ft comprising 13 proposed Big Yellow self storage
facilities. The current maximum lettable area of the existing
platform (including Armadillo) is 6.4 million sq ft. When fully
built out the portfolio will provide approximately 7.3 million sq
ft of flexible storage space. 99% of our stores and sites by value
are held freehold and long leasehold, with the remaining 1% short
leasehold.
The Group has pioneered the development of the latest generation
of self storage facilities, which utilise state of the art
technology and are located in high profile, accessible, main road
locations. Our focus on the location and visibility of our stores,
with excellent customer service, a market-leading online platform,
and significant and increasing investment in sustainability, has
created in Big Yellow the most recognised brand name in the UK self
storage industry.
For further information, please contact:
Big Yellow Group PLC 01276 477811
Nicholas Vetch CBE, Executive Chairman
Jim Gibson, Chief Executive Officer
John Trotman, Chief Financial Officer
Teneo 020 7260 2700
Charlie Armitstead
Oliver Bell
CHAIRMAN'S STATEMENT
Big Yellow Group PLC, the UK's brand leader in self storage, is
pleased to announce its results for the six months ended 30
September 2023.
We have delivered strong EBITDA growth with the increase in net
achieved rents offsetting the rise in operating costs, with profit
marginally down due to higher interest rates. Our London and South
East stores, representing 74% of revenue, have outperformed those
located in the regions.
Our operating expenses for the six months are up 8% (7% on a
like-for-like basis), principally from a significant increase in
property rates from 1 April. However, we have benefited from rates
provision releases on historic assessments relating to the previous
rating list, so our overall store operating expense for the six
months is up 4%.
The roll-out of our pipeline has continued with the successful
opening of our landmark store in Kings Cross (London) in June 2023,
adding 103,000 sq ft of capacity. Early trading from the store has
been very encouraging, with the store adding 24,000 sq ft of
occupancy by 30 September 2023, and has now reached breakeven at
the EBITDA level. The pipeline is an important driver of our
performance, as illustrated by Camberwell, Bracknell and Battersea,
which opened during the second half of 2020. These three stores, at
a current average occupancy of 78%, are delivering an average
EBITDA margin of 67%, and an EBITDA yield of 8.2% on cost, and we
expect both these metrics to grow over the next 12 months.
Financial results
Revenue for the period was GBP99.6 million (2022: GBP93.8
million), an increase of 6%, with storage income up 7%, offset by
lower growth in non-storage income. Like-for-like store revenue was
up 5%, driven by an increase in average achieved net rent, offset
by a slight fall in average occupancy. Like-for-like store revenue
excludes new store openings and acquired stores. Store EBITDA was
GBP71.5 million, an increase of 7% from the prior period (2022:
GBP66.8 million).
The Group made an adjusted profit before tax in the period of
GBP53.5 million, down 2% from GBP54.6 million for the same period
last year (see note 6). The Group's cash flow from operating
activities (after net finance costs and pre-working capital
movements) also reduced by 2% to GBP54.3 million for the period
(2022: GBP55.2 million). The increase in the profitability from the
stores was more than offset by an increase in the Group's interest
expense for the period, following the rises in interest rates. We
expect the Group's interest expense to reduce in the second half
following the placing in October.
Adjusted diluted EPRA earnings per share were 29.0 pence (2022:
29.3 pence), a decrease of 1%. The Group's statutory profit before
tax for the period was GBP119.6 million, an increase from GBP6.8
million for the same period last year, due to a revaluation surplus
of GBP67 million in the period (2022: deficit of GBP47.7 million),
reflecting the growth in cash flow during the period.
Dividends
The Board has approved an interim dividend of 22.6 pence per
share representing a 1% increase from the prior period (77% of
first half adjusted eps). We expect the dividend for the full year
to be in line with our policy of distributing 80% of full year
adjusted earnings per share. This first half dividend has all been
declared as Property Income Distribution ("PID").
Placing
We have made it clear for many years that we believe that a low
level of debt is appropriate. That belief has been reinforced by
the rise in interest rates over the last 21 months. We believe it
is therefore optimal that future capital expenditure over the
medium term should be funded from equity, cash flow and surplus
land and property sales.
In October 2023, the Group raised GBP107 million (net of
expenses) through a placing of 6.3% of the Company's share capital.
The net proceeds will allow us to expand capacity in London, our
strongest market, and monetise land that we already own. It will
also be marginally accretive to earnings in the short term, and the
Directors expect it to be significantly so over the medium to long
term.
Development pipeline
In June, the Group acquired a 0.8 acre property for development
on Belgrave Gate, central Leicester for GBP1.85 million. We will be
seeking planning permission for a 58,000 sq ft self-storage centre
on the site. The site is currently generating an income of
approximately GBP110,000 per annum, across four short-term rolling
tenancies.
During the period we obtained planning consent for a 132,000 sq
ft self storage centre and 114 flats at appeal on our site in
Wapping, London. We expect that this new store will deliver an
approximately 9% net operating income return on the total capital
deployed of GBP56 million, including the estimated GBP36 million to
be spent on construction. Demolition of the existing buildings on
the self storage site will commence shortly.
In May 2022, we suspended construction on all projects that were
not already on site because conditions in the construction market
were unfavourable. Those conditions have improved considerably with
steelwork and cladding prices falling, and other material prices
stabilising. In addition, we are seeing that main contractors and
specialist sub-contractors are pricing new projects more
competitively.
Following the placing, we will now press on with the
construction of an initial six sites including Farnham Road,
Slough, Wapping, Wembley, Queensbury, Staines, and Slough Bath
Road, all of which have planning consent at an incremental cost of
GBP90 million.
Subject to receipt of planning and vacant possession,
construction will then follow in due course on the remaining sites
we own at a further incremental cost of GBP147 million.
The projected net operating income of the increase in our total
capacity of 902,000 sq ft when stabilised is GBP30.4 million
representing an approximate 13% return on the incremental capital
deployed. On a proforma basis at stabilisation, the projected net
operating income for the 11 new stores and two replacement stores
is GBP33.9 million, a return of approximately 8.7% on the total
development cost of GBP389 million, including land already
acquired.
Capital structure
The Group owns its assets largely freehold, representing some
99% by value of our portfolio which has shielded us from the
significant rise in industrial and warehouse rents that has
occurred over the last 10 years.
In addition, we view rent liabilities as quasi-debt. Once we
have relocated our Farnham Road Slough and Staples Corner stores
(the latter subject to planning) we expect our total rent liability
to fall to approximately GBP1 million per annum.
The Group's interest cover for the period (expressed as the
ratio of cash generated from operations pre-working capital
movements against interest paid) was 5.3 times (2022: 9.3 times).
On a proforma basis (see note 19) following the placing, based on
October's EBITDA and following the repayment of debt, this interest
cover ratio is currently estimated at over 6 times, and also on a
proforma basis, the Group's net debt to EBITDA ratio is now
3.0x.
Net debt was GBP495.3 million at 30 September 2023. Following
the placing, on a proforma basis (see note 19), it was GBP388.3
million, giving the Group undrawn facilities of GBP159 million and
in addition the $225 million bilateral shelf facility with Pricoa.
Following the placing, approximately 50% of our debt is fixed, with
the balance floating, in line with our hedging policy, and our
current average cost of debt is 5.6%.
Outlook
The transition to a higher interest rate environment has been
testing but we believe that this has now been largely absorbed into
the business.
Following the recent placing, we have the funding and balance
sheet strength to commence the build out of the next phase of
stores. We believe that this, along with the available space on our
existing platform, will drive a significant increase in revenue and
earnings over the next few years.
The balance sheet will be further strengthened by the sale of
approximately GBP90 million of surplus non-storage assets, which we
expect to complete over the next 18 months.
There is evidence that land prices have been, and are, dropping
materially and this will provide an opportunity to replenish the
pipeline.
Nicholas Vetch CBE
Executive Chairman
20 November 2023
BUSINESS AND FINANCIAL REVIEW
Store occupancy
We now have a portfolio of 109 open and trading stores, with a
current maximum lettable area of 6.4 million sq ft (2022: 108
stores, MLA of 6.3 million sq ft).
Like-for-like occupancy increased by 1.5 ppts from 1 April 2023
but was down 2.2 ppts from the same time last year. Like-for-like
store revenue growth for the half year was 5%, driven by
improvements in average achieved net rent per sq ft.
Prospect numbers are more in-line with the pre-Covid period on a
like-for-like basis, and activity levels within the business have
consequently been a little bit slower than last year, with move-ins
down 5%, and move-outs down 5% over the period, reflecting less
churn. Our conversion rates over the period have increased, which
is indicative of more needs-driven demand. This trend has continued
post period end, where move-in and move-out activity are down
similar amounts to last year.
Occupancy across all 109 stores increased by 140,000 sq ft over
the six months compared to a gain of 154,000 sq ft in the same
period last year (with an additional 39,000 sq ft of occupancy
acquired with Aberdeen in June 2022). Demand from domestic
customers has been stronger than last year, up 133,000 sq ft.
Business occupancy dropped by 1.6% or 31,000 sq ft, on 1.9 million
sq ft occupied at the beginning of the period and student occupancy
rose by 38,000 sq ft. Our larger rooms, which are occupied in the
main by businesses, remain highly occupied, particularly in London.
68% of our revenue derives from domestic and student customers,
with the balance from our business customers.
As we have experienced over the years, there are businesses who
outgrow us and move to their own accommodation, others cease
operations, some are seasonal, and we continue to replace any
vacated space with new move-ins from online traders, e-tailers and
service providers. We are not seeing any noticeable softening in
demand from businesses, particularly in London, and since the
period end, our business occupancy performance is better than last
year. Over the six months, revenue from national customers
(businesses who occupy space in multiple stores) has increased by
11% compared to the same period last year.
Our third quarter is historically the weakest trading quarter
where we see a loss in occupancy with a return to growth in the
fourth quarter. In the current year, we have lost 117,000 sq ft
(1.8% of maximum lettable area "MLA") since the end of September,
compared to a loss of 141,000 sq ft (2.2% of MLA) at the same stage
last year.
At 30 September, the 76 established Big Yellow stores were 85.5%
occupied compared to 88.2% at the same time last year. The nine
developing Big Yellow stores added 52,000 sq ft of occupancy in the
past six months to reach closing occupancy of 56.5%.
The Armadillo stores, representing 10% of the Group's revenue,
added 27,000 sq ft of occupancy with closing occupancy of 78%,
including an additional 20,000 sq ft of capacity added at Stockton
South. Overall store occupancy was 81.5%.
Rental growth
We continue to manage pricing dynamically, taking account of
room availability, customer demand and local competition, with our
pricing model reducing promotions and increasing asking prices
where individual units are in scarce supply.
In the current trading environment against the backdrop of
higher inflation, we continue to price competitively to win new
customers, and are achieving rental growth from existing customers
broadly in line with inflation. It must be remembered that some 60%
to 70% of our customers move-out within six months, and therefore
do not receive any price increases.
The average achieved net rent per sq ft increased by 8% compared
to the prior period, with closing net rent up 3% compared to 31
March 2023, and up 6.5% from the same time last year. The table
below shows the change in net rent per sq ft for the portfolio by
average occupancy over the six months (on a non-weighted
basis).
Average occupancy Net rent per sq ft Net rent per sq ft
in the six months growth from 1 April growth from 1 April
to 30 September 2023 to 30 September 2022
------------------- ---------------------- ----------------------
75% to 85% 2.6% 4.9%
85 to 90% 3.5% 5.0%
Above 90% 4.7% 5.9%
Security of income
We believe that self storage income is essentially evergreen
income with highly defensive characteristics driven from buildings
with very low obsolescence and relatively low maintenance
requirements. Although our contract with our customers is in theory
as short as a week, we do not rely on any one contract for our
income security. At 30 September 2023 the average length of stay
for existing customers was 30 months (March 2023: 31 months). For
all customers, including those who have moved out of the business
throughout the life of the portfolio, the average length of stay
was 8.8 months (March 2023: 8.7 months). We have seen an increase
in the length of stay of customers who moved out over the six
months, which increased to 9.1 months from 8.6 months for the same
period last year.
37% of our customers by occupied space have been storing with us
for over two years (2022: 38%), and a further 15% of customers have
been in the business for between one and two years (2022: 16%). For
the 52% of customers that have stayed for more than one year, the
average length of stay is 52 months.
Our business customer base is comprised of online retailers, B2B
traders looking for flexible mini-warehousing for e-fulfilment,
service providers, those looking to shorten supply chains, and
businesses looking to rationalise their other fixed costs of
accommodation. For these customers, who typically are looking for
rooms which could be from 50 sq ft to 500 sq ft in facilities that
meet their operational requirements, the only supply in big cities
is from self storage providers.
We saw continued growth in occupancy from our domestic customer
base, with demand across a broad spectrum of uses. Over 70% of our
domestic customers are in the top 3 ACORN categories: Affluent
Achievers, Rising Prosperity, and Comfortable Communities. The
largest element of demand into our business each year is customers
who use us for relatively short periods driven by a need.
We therefore have a very diverse base of domestic and business
customers currently occupying 76,000 rooms. This, together with the
location and quality of our stores, limited growth in new supply,
market-leading brand and digital platform, and customer service,
all contribute to the resilience and security of our income.
We are not seeing any deterioration in rent collection.
Approximately 80% of our customers pay by direct debit, and the
proportion of our billings that is more than 10 days overdue is in
line with last year and lower than pre-Covid. Our bad debt expense
for the period was 0.2%, unchanged from last year.
Supply
New supply and competition is a key risk to our business model,
hence our weighting to London and its commuter towns, where
barriers to entry in terms of competition for land and difficulty
around obtaining planning are highest. Growth in new self storage
centre openings, excluding container operators, over the last five
years has averaged approximately 3% of total capacity per annum. We
continue to see limited new supply growth in our key areas of
operation, with an anticipated twelve stores openings in 2023 and
2024 in London, including our Kings Cross store, representing
around 2.5% to 3% of capacity.
Revenue
Total revenue for the six-month period was GBP99.6 million, an
increase of GBP5.8 million (6%) from GBP93.8 million in the same
period last year with storage income up 7%, offset by lower growth
in non-storage income. Like-for-like store revenue (see glossary in
note 20) was GBP96.8 million, an increase of 5% from the 2022
figure of GBP92.5 million.
Revenue growth for the period in our London stores was 8%, our
south east commuter stores 5%, and our regional stores 3%.
Other sales comprise the selling of packing materials,
insurance/enhanced liability service ("ELS"), and storage related
charges. The Group changed the way it sold contents protections to
its customers on 1 June 2022 to an Enhanced Liability Service
("ELS"), which is subject to VAT at 20% and not Insurance Premium
Tax ("IPT") at 12%, the latter being included in revenue. We
estimate the impact of this on the total revenue and like-for-like
revenue for the six months is 0.35%. For the remainder of the year,
revenue from ELS will be on a comparable basis.
The other revenue earned is tenant income on sites where we have
not started development.
Operating costs
Cost of sales comprises principally direct store operating
costs, including store staff salaries, utilities, business rates,
insurance, a full allocation of the central marketing budget, and
repairs and maintenance.
The table below shows the breakdown of store operating costs
compared to the same period last year, with Armadillo's costs
included in full in both periods:
Period Period ended % of store
ended 30 30 September operating
Category September 2022 costs
2023 GBP000 Change in period
GBP000
Cost of sales (insurance/ELS
and packing materials) 865 1,428 (39%) 3%
Staff costs 7,209 6,999 3% 27%
General & admin 676 695 (3%) 3%
Utilities 862 959 (10%) 3%
Property rates 9,155 7,521 22% 34%
Marketing 3,329 3,292 1% 12%
Repairs and maintenance 2,747 2,314 19% 10%
Insurance 1,697 1,290 32% 6%
Computer costs 509 509 - 2%
----------- -------------- --------- -----------
Total before non-recurring
items 27,049 25,007 8%
Non-recurring items (1,272) (120)
Total per portfolio summary 25,777 24,887 4%
----------- -------------- --------- -----------
Store operating costs have increased by GBP0.9 million (4%). The
non-recurring items in the current period relate principally to the
release of a provision for property rates from the 2017 rating
list, and a reassessment of the Group's bad debt provision. Store
operating costs before these non-recurring items have increased by
GBP2.0 million (8%) compared to the same period last year. New
stores accounted for GBP0.8 million of operating expenses in the
period. Cost of sales have decreased by GBP0.6 million following
the move to selling an ELS rather than insurance (see explanation
in revenue above). The remaining increase is GBP1.8 million (7%),
with commentary below:
- Staff costs have increased by GBP0.2 million (3%), with the salary review of on average 5.5%
(including a 6% increase to those at the lower end of the pay scale), which has been partly
offset by lower bonuses for the six months, which have averaged 8% compared to 11% in the
prior period. Additionally, given the investment we have made in recent years in the automation
of our store operations, particularly in relation to interaction with prospects and customers,
we continue to review every vacancy before making a decision to recruit, and have made savings
from this through the salary line.
- Property rates have increased by GBP1.6 million (22%), following the Rating Revaluation published
in November 2022, the like-for-like increase is 19%, with an additional four months' worth
of rates payable on Kings Cross, which opened in June 2023.
- We continue to see the benefit of our solar retrofit programme on our utilities expense, which
has reduced by 10% compared to the same period last year. Our three year energy contract expired
in September 2023. We have placed a new one year contract from 1 October 2023, which had an
increase in cost of 74% from the expiring contract, albeit part of this increase will be mitigated
through our solar programme. We will review this next summer.
- The repairs and maintenance expense has increased due to higher store numbers, timing of works
in the current period, and an increase in solar panel maintenance costs, with higher numbers
of stores now with solar PVs.
- Overall insurance premiums increased from April and the new contents policy includes Big Yellow
paying for claims up to GBP250,000 in any one loss. As a consequence, GBP215,000 in total
was paid in claims this period (2022: GBP54,000).
The table below reconciles store operating costs per the
portfolio summary to cost of sales in the income statement:
Period Period
ended 30 ended 30
September September
2023 2022
GBP000 GBP000
Direct store operating costs per portfolio
summary (excluding rent) 25,777 24,887
Rent included in cost of sales (total rent
payable is included in portfolio summary) 915 718
Depreciation charged to cost of sales 280 235
Head office operational management costs charged
to cost of sales 832 610
Cost of sales per income statement 27,804 26,450
Store EBITDA
Store EBITDA for the period was GBP71.5 million, an increase of
GBP4.7 million (7%) from GBP66.8 million for the period ended 30
September 2022 (see Portfolio Summary). The overall EBITDA margin
for all stores during the period was 72.7%, up from 72.0% in
2022.
All stores are currently trading profitably at the Store EBITDA
level, with our recently opened store in Kings Cross breaking even
after four months.
Administrative expenses
Administrative expenses in the income statement have decreased
by GBP0.2 million (3%), following a reduction in the accrual for
national insurance on the exercise of share options given the fall
in the Company's share price, partly offset by an increase in the
IFRS 2 charge in the period. Excluding these two items,
administrative expenses have increased by 4%.
Other operating income
In February 2022 the Group experienced a fire at our Cheadle
store, which resulted in a total loss to the store. Buildings all
risk insurance is in place for the full reinstatement value with
the landlord. We also have insurance cover in place for both our
fit-out and four years loss of income. The loss of income booked
during the first six months of the financial year was GBP0.8
million (2022: GBP0.7 million) which is included in other operating
income.
In the prior period the Group acquired the freehold of its
Oxford store, thus extinguishing the asset and liability in
relation to the lease from the previous landlord. This
extinguishment gave rise to a gain of GBP0.2 million, which is
included in other operating income for 2022.
Interest expense on bank borrowings
Interest on bank borrowings during the period was GBP13.6
million, GBP 5.8 million higher than the same period last year, due
to higher average debt levels in the period, coupled with a higher
average cost of debt following the increase in interest rates. The
interest expense will be lower in the second half of the year, as
the placing proceeds were used to repay part of our Revolving
Credit Facility.
Interest capitalised in the period amounted to GBP1.8 million
(2022: GBP1.6 million), arising on the Group's construction
programme.
Profit before tax
The Group's statutory profit before tax for the period was
GBP119.6 million, compared to GBP6.8 million for the same period
last year. The increase in profitability is due to a revaluation
gain in the in the period compared to a loss in the prior period,
which contained an outward shift of cap rates due to the underlying
market conditions.
After adjusting for the revaluation movement of investment
properties and other matters shown in the table below, the Group
made an adjusted profit before tax in the period of GBP53.5
million, down 2% from GBP54.6 million in 2022.
Six months ended Six months ended
30 September 30 September
Profit before tax analysis 2023 2022
GBPm GBPm
---------------------------------- ----------------- -----------------
Profit before tax 119.6 6.8
(Gain)/loss on revaluation of
investment properties (67.2) 47.7
Change in fair value of interest
rate derivatives 1.1 (0.6)
Refinancing costs - 0.7
Adjusted profit before tax 53.5 54.6
Tax - (0.7)
---------------------------------- ----------------- -----------------
Adjusted profit after tax 53.5 53.9
---------------------------------- ----------------- -----------------
The movement in the adjusted profit before tax from the prior
year is shown in the table below:
Movement in adjusted profit before tax GBPm
----------------------------------------------- ------
Adjusted profit before tax for the six months
to 30 September 2022 54.6
Increase in gross profit 4.4
Decrease in administrative expenses 0.2
Decrease in other operating income (0.1)
Increase in net interest payable (5.7)
Increase in capitalised interest 0.1
Adjusted profit before tax for the six months
to 30 September 2023 53.5
Diluted EPRA earnings per share was 29.0 pence (2022: 29.3
pence), a decrease of 1 % from the same period last year.
Taxation
The Group is a Real Estate Investment Trust ("REIT"). We benefit
from a zero-tax rate on our qualifying self storage earnings. We
only pay corporation tax on the profits attributable to our
residual business, comprising primarily of the sale of packing
materials and insurance, and management fees earned by the
Group.
There is a GBP0.9 million tax charge in the residual business
for the period ended 30 September 2023 (six months to 30 September
2022: GBP0.7 million). The current period tax charge is largely
offset in the income statement by an adjustment to the prior year
tax estimate.
Dividends
REIT regulatory requirements determine the level of Property
Income Distribution ("PID") payable by the Group. A PID of 22.6
pence per share is proposed as the total interim dividend, an
increase of 1% from 22.3 pence per share for the same period last
year.
The interim dividend will be paid on 26 January 2024. The
ex-dividend date is 4 January 2024, and the record date is 5
January 2024 .
Cash flow
Cash flows from operating activities (after net finance costs
and pre-working capital movements) have decreased by 2 % to GBP
54.3 million for the period (2022: GBP55.2 million), with a higher
interest expense in the period leading to the reduction. These
operating cash flows are after the ongoing maintenance costs of the
stores, which for this first half were on average approximately GBP
25,000 per store. The Group's net debt has increased over the
period to GBP495.3 million (March 2023: GBP486.6 million), but on a
proforma basis following the placing has reduced to GBP388.3
million.
There are distortive working capital items in the current
period, and therefore the summary cash flow below sets out the free
cash flow pre-working capital movements
Six months Six months
ended 30 ended 30
September September
2023 2022
GBPm GBPm
Cash generated from operations pre-working
capital movements 68.3 63.3
Net finance costs (12.8) (6.9)
Interest on obligations under lease liabilities (0.3) (0.4)
Other operating income received 0.1 0.7
Tax (1.0) (1.5)
----------- -----------
Cash flow from operating activities pre-working
capital movements 54.3 55.2
Working capital movements (3.5) (0.6)
----------- -----------
Cash flow from operating activities 50.8 54.6
Capital expenditure (17.8) (73.5)
Receipt from Capital Goods Scheme - 0.2
Cash flow after investing activities 33.0 (18.7)
Dividends (41.7) (38.7)
Payment of finance lease liabilities (0.9) (0.7)
Issue of share capital 0.9 0.9
Receipt from termination of interest rate
derivatives - 0.4
Loan arrangement fees paid - (1.2)
Increase in borrowings 7.4 58.0
----------- -----------
Net cash outflow (1.3) -
----------- -----------
The Group's interest cover for the period (expressed as the
ratio of cash generated from operations pre-working capital
movements against interest paid) was 5.3 times (2022: 9.3 times),
with the reduction caused by the increase in the interest expense
over the period following the rise in borrowing costs and a higher
average debt level. On a proforma basis (see note 19) following the
placing, based on October's EBITDA and following the repayment of
debt, this interest cover ratio is currently estimated at over 6
times.
GBP2 million of the capital expenditure in the period related to
the acquisition of Leicester, with the balance of GBP15.8 million
principally construction capital expenditure on our new stores in
Kings Cross, Slough Farnham Road, and including an investment in
the solar retrofitting of GBP2.1 million.
Balance sheet
Investment property
The Group's investment properties are carried at the half year
at Directors' valuation. They are valued externally by Jones Lang
Lasalle ("JLL") at the year end. The Directors' valuations reflect
the latest cash flows derived from each of the stores at the end of
September.
In performing the valuations, the Directors consulted with JLL
on the capitalisation rates used in the valuations, which are based
on the JLL model. The Directors, as advised by the valuers,
consider that the prime capitalisation rates have remained stable
since the March 2023 valuation date.
The Directors have made some minor amendments to a couple of the
valuation assumptions, namely the adjustment of stable occupancy
levels on certain stores that are consistently trading ahead of the
previously used assumptions and to certain assumptions on net
achieved rents within the valuations. Other than the above, the
Directors believe the core assumptions used by JLL in the March
2023 valuations are still appropriate at the September valuation
date.
At 30 September 2023 the external valuation of the Group's
properties is shown in the table below:
Analysis of property portfolio Value at Revaluation
30 September movement in the
2023 period
GBPm GBPm
---------------------------------------- -------------- -----------------
Investment property 2,604.7 81.8
Investment property under construction 186.8 (14.6)
---------------------------------------- -------------- -----------------
Investment property total 2,791.5 67.2
---------------------------------------- -------------- -----------------
The revaluation surplus for the open stores in the period was
GBP81.8 million, reflecting the growth in operating cash flow. The
revaluation deficit of GBP14.6 million on the investment property
under construction, is reflective of discussions with JLL and is
largely as a result of a reduction in the value of our land without
self storage planning.
The initial yield on the portfolio is 5.3% (31 March 2023:
5.3%). The Group's annual report and accounts for the year ended 31
March 2023 contains a detailed explanation of the valuation
methodology.
Current development pipeline - with planning
Site Location Status Anticipated
capacity
Wapping, London On the Highway, Planning consent granted, Additional
adjacent to existing demolition of existing 95,000 sq
Big Yellow store building to commence ft
shortly
---------------------- ----------------------------- --------------
Wembley, London Towers Business Discussions ongoing to 70,000 sq
Park secure ft
vacant possession
---------------------- ----------------------------- --------------
Queensbury, Honeypot Lane Site acquired in November 70,000 sq
London 2018 ft
---------------------- ----------------------------- --------------
Staines, London The Causeway Site acquired in December 65,000 sq
2020. Consent also received ft
to develop 9 industrial
units totalling 99,000
sq ft
---------------------- ----------------------------- --------------
Slough Farnham Road Construction commenced Replacement
in Summer 2023 with a for existing
view to opening in Summer leasehold
2024 store
---------------------- ----------------------------- --------------
Slough Bath Road Site acquired in April 90,000 sq
2019 ft
---------------------- ----------------------------- --------------
Newcastle Scotswood Road Planning consent granted 60,000 sq
ft
---------------------- ----------------------------- --------------
Current development pipeline - without planning
Site Location Status Anticipated
capacity
Leicester Belgrave Gate, Site acquired in June 58,000 sq
Central Leicester 2023. Planning discussions ft
underway with Leicester
City Council
------------------- ------------------------------- -------------------
Epsom, London East Street Site acquired in March 58,000 sq
2021. Planning application ft
refused by Epsom and
Ewell Council and an
appeal has been submitted
------------------- ------------------------------- -------------------
Kentish Town, Regis Road Site acquired in April 68,000 sq
London 2021. Planning application ft
refused by Camden Council
and an appeal to be submitted
------------------- ------------------------------- -------------------
West Kensington, Hammersmith Road Site acquired in June 175,000
London 2021. Planning application sq ft
submitted to Hammersmith
and Fulham Council in
February 2023
------------------- ------------------------------- -------------------
Old Kent Road, Old Kent Road Site acquired in June 75,000 sq
London 2022. Planning application ft
submitted to Southwark
Council in August 2023
------------------- ------------------------------- -------------------
Staples Corner, North Circular Site acquired in December Replacement
London Road 2022. Planning discussions for existing
underway with Barnet leasehold
Council store, additional
18,000 sq
ft
------------------- ------------------------------- -------------------
Total - all 902,000
sites sq ft
------------------- ------------------------------- -------------------
The capital expenditure forecast for the remainder of the
financial year (excluding any new site acquisitions) is
approximately GBP17 million, which principally relates to
construction costs on our development sites and the continued
retrofitting of solar panels across the Group's estate.
Financing and treasury
Our financing policy is to fund our current needs through a mix
of debt, equity, and cash flow to allow us to build out, and add
to, our development pipeline and achieve our strategic growth
objectives, which we believe improve returns for shareholders. We
aim to ensure that there are sufficient medium-term facilities in
place to finance our committed development programme, secured
against the freehold portfolio, with debt serviced by our strong
operational cash flows. We maintain a keen watch on medium and
long-term rates and the Group's policy in respect of interest rates
is to maintain a balance between flexibility and hedging of
interest rate risk.
The table below shows the Group's debt position at 30 September
2023:
Debt Expiry Facility Drawn Cost
----------------------------------- ------------------ ----------- ----------- -------
Aviva Loan (fixed rate loan) September 2028 GBP157.4m GBP157.4m 3.4%
M&G loan (GBP35 million fixed
at 4.5%, GBP85 million floating) September 2029 GBP120m GBP120m 6.9%
Revolving bank facility (Lloyds,
HSBC, and Bank of Ireland,
floating) October 2024 GBP270m GBP225m 6.6%
Total GBP547.4m GBP502.4m 5.7%
The Group is well progressed in refinancing our medium-term
revolving credit facility which expires in October 2024 and
anticipate completing this shortly.
In addition to the facilities above, the Group has a $225
million credit approved shelf facility with Pricoa Private Capital
("Pricoa"), to be drawn in fixed sterling notes. The Group can draw
the debt in minimum tranches of GBP10 million over the next two
years with terms of between 7 and 15 years at short notice,
typically 10 days.
The Group was comfortably in compliance with its banking
covenants at 30 September 2023 and is forecast to be for the period
covered by the going concern statement.
The Group's key balance sheet ratios are shown in the table
below, including on a proforma basis (see note 19) following the
placing in October 2023:
30 September
2023 proforma
Ratio 30 September post-placing 30 September
2023 2022
---------------------- ---------------- --------------- ---------------
Net debt to gross
property assets 18% 14% 18%
Net debt to adjusted
net assets 21% 16% 21%
Net debt to market
capitalisation 29% 19%(1) 24%
Net debt to Group
EBITDA ratio 3.8x 3.0x 3.9x
(1) Based on the market capitalisation at 17 November 2023
Net asset value
The adjusted net asset value per share is 1,277.5 pence (see
note 13), up 3% from 1,237.3 pence per share at 31 March 2023. The
table below reconciles the movement from 31 March 2023:
Equity shareholders' EPRA adjusted
funds NAV pence per
Movement in adjusted net GBPm share
asset value
----------------------------- --------------------- ---------------
31 March 2023 2,287.2 1,237.3
Adjusted profit after tax 53.5 28.9
Equity dividends paid (41.9) (22.7)
Revaluation movements 67.2 36.3
Movement in purchaser's
cost adjustment 2.9 1.6
Other movements (e.g. share
schemes) 3.2 (3.9)
30 September 2023 2,372.1 1,277.5
----------------------------- --------------------- ---------------
Jim Gibson John Trotman
Chief Executive Officer Chief Financial Officer
20 November 2023
PORTFOLIO SUMMARY
September 2023 September 2022
Big Big Total Total
Yellow Yellow Big Total Big Yellow Big Yellow Big Total
Established Developing Yellow Armadillo Established Developing Yellow Armadillo
Number
of stores 76 9 85 24 109 76 8 84 24 108
----------- ---------- --------- --------- --------- ----------- ---------- --------- --------- ---------
At 30
September:
Total capacity
(sq ft) 4,784,000 627,000 5,411,000 1,008,000 6,419,000 4,784,000 524,000 5,308,000 987,000 6,295,000
Occupied
space (sq
ft) 4,089,000 354,000 4,443,000 785,000 5,228,000 4,221,000 265,000 4,486,000 814,000 5,300,000
Percentage
occupied 85.5% 56.5% 82.1% 77.9% 81.4% 88.2% 50.6% 84.5% 82.5% 84.2%
Net rent
per sq
ft GBP35.67 GBP32.30 GBP35.40 GBP22.44 GBP33.47 GBP33.50 GBP29.45 GBP33.26 GBP21.40 GBP31.44
For the
period:
REVPAF(2) GBP34.33 GBP19.59 GBP32.71 GBP20.17 GBP30.73 GBP32.99 GBP19.02 GBP31.88 GBP20.46 GBP30.05
Average
occupancy 85.5% 55.8% 82.2% 77.9% 81.5% 88.3% 55.5% 85.7% 83.7% 85.4%
Average
annual
net rent
psf GBP35.17 GBP31.55 GBP34.90 GBP22.42 GBP33.02 GBP32.53 GBP28.70 GBP32.33 GBP20.98 GBP30.55
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Self storage
income 72,113 5,225 77,338 8,824 86,162 68,586 3,285 71,871 8,684 80,555
Other storage
related
income
(2) 9,424 764 10,188 1,362 11,550 9,791 550 10,341 1,432 11,773
Ancillary
store rental
Income 532 95 627 10 637 430 84 514 7 521
-------------------- ----------- ---------- --------- --------- --------- ----------- ---------- --------- --------- ---------
Total store
revenue 82,069 6,084 88,153 10,196 98,349 78,807 3,919 82,726 10,123 92,849
Direct
store operating
costs (excluding
depreciation) (19,447) (2,621) (22,068) (3,709) (25,777) (19,384) (1,762) (21,146) (3,741) (24,887)
Short and
long
leasehold
rent(3) (999) - (999) (84) (1,083) (1,063) - (1,063) (85) (1,148)
-------------------- ----------- ---------- --------- --------- --------- ----------- ---------- --------- --------- ---------
Store EBITDA(2) 61,623 3,463 65,086 6,403 71,489 58,360 2,157 60,517 6,297 66,814
Store EBITDA
margin 75.1% 56.9% 73.8% 62.8% 72.7% 74.1% 55.0% 73.2% 62.2% 72.0%
Deemed GBPm
cost GBPm GBPm GBPm GBPm
To 30 September
2023 729.2 199.0 928.2 142.0 1,070.2
Capex to
complete - 1.0 1.0 - 1.0
-------------------- ----------- ---------- --------- --------- ---------
Total 729.2 200.0 929.2 142.0 1,071.2
--------- --------- --------- ---------
(1) The Big Yellow established stores have been open for more
than three years at 1 April 2023, and the developing stores
have been open for fewer than three years at 1 April 2023.
(2) See glossary in note 20.
(3) Rent under IFRS 16 for seven short leasehold properties accounted
for as investment properties under IAS 40.
The table below reconciles Store EBITDA to gross profit in the
income statement:
Period ended 30 September Period ended 30 September
2023 2022
GBP000 GBP000
Gross Gross
profit profit
Store Reconciling per income Reconciling per income
EBITDA items statement Store EBITDA items statement
Store revenue/Revenue(4) 98,349 1,215 99,564 92,849 967 93,816
Cost of sales(5) (25,777) (2,027) (27,804) (24,887) (1,563) (26,450)
Rent(6) (1,083) 1,083 - (1,148) 1,148 -
--------- ------------ ------------- ------------- ------------ -------------
71,489 271 71,760 66,814 552 67,366
(4) See note 2 of the interim statement, reconciling items are
management fees and non-storage income.
(5) See reconciliation in cost of sales section in Business
and Financial Review.
(6) The rent shown above is the cost associated with leasehold
stores, only part of which is recognised within gross profit
in line with finance lease accounting principles. The amount
included in gross profit is shown in the reconciling items
in cost of sales.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted for use in the UK;
- the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important
events that have occurred during the first six months of the financial year and their impact
on the condensed set of financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions
that have taken place in the first six months of the current financial year and that have
materially affected the financial position or performance of the entity during that period;
and any changes in the related party transactions described in the last annual report that
could do so.
By order of the Board
Jim Gibson John Trotman
Chief Executive Officer Chief Financial Officer
20 November 2023
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 September 2023
Six months Six months
ended ended
Year ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Revenue 2 99,564 93,816 188,829
Cost of sales (27,804) (26,450) (54,307)
Gross profit 71,760 67,366 134,522
Administrative expenses (6,864) (7,091) (14,519)
Operating profit before gains
and losses on property assets 64,896 60,275 120,003
Gain/(loss) on the revaluation
of investment properties 9a 67,165 (47,673) (29,861)
Operating profit 132,061 12,602 90,142
Other operating income 2 762 899 2,185
Investment income - interest
receivable 3 17 1 9
- fair value movement of derivatives 3 - 564 -
Finance costs - interest payable 4 (12,157) (7,313) (16,894)
- fair value movement of derivatives (1,071) - (133)
Profit before taxation 119,612 6,753 75,309
------------- ------------- -----------
Taxation 5 (20) (710) (1,977)
Profit for the period (attributable
to equity shareholders) 119,592 6,043 73,332
------------- ------------- -----------
Total comprehensive income for
the period attributable to equity
shareholders 119,592 6,043 73,332
------------- ------------- -----------
Basic earnings per share 8 65.3p 3.3p 40.1p
Diluted earnings per share 8 64.9p 3.3p 39.8p
Adjusted profit before taxation is shown in note 6 and EPRA
earnings per share is shown in note 8.
All items in the income statement relate to continuing
operations.
CONDENSED CONSOLIDATED BALANCE SHEET
30 September 2023
30 September 30 September
2023 2022 31 March 2023
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Non-current assets
Investment property 9a 2,604,745 2,386,246 2,449,640
Investment property under construction 9a 186,847 268,012 260,720
Right-of-use assets 9a 17,952 18,849 18,148
Plant, equipment, and owner-occupied property 9b 4,159 3,882 4,003
Intangible assets 9c 1,433 1,433 1,433
Investment 9d 588 588 588
2,815,724 2,679,010 2,734,532
Current assets
Derivative financial instruments 12 - 1,013 316
Inventories 483 480 496
Trade and other receivables 10 11,199 8,506 8,314
Cash and cash equivalents 7,069 8,604 8,329
18,751 18,603 17,455
Total assets 2,834,475 2,697,613 2,751,987
Current liabilities
Trade and other payables 11 (50,714) (47,399) (57,275)
Borrowings 12 (3,237) (3,083) (3,159)
Obligations under lease liabilities (2,252) (1,805) (2,020)
(56,203) (52,287) (62,454)
Non-current liabilities
Borrowings 12 (497,076) (473,056) (489,411)
Obligations under lease liabilities (17,333) (18,386) (17,676)
Derivative financial instruments 12 (755) - -
(515,164) (491,442) (507,087)
Total liabilities (571,367) (543,729) (569,541)
Net assets 2,263,108 2,153,884 2,182,446
------------- ------------- --------------
Equity
Called up share capital 18,456 18,422 18,427
Share premium account 291,774 290,771 290,857
Reserves 1,952,878 1,844,691 1,873,162
Equity shareholders' funds 2,263,108 2,153,884 2,182,446
------------- ------------- --------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September 2023 (unaudited)
Share Other non-distributable Capital
Share premium reserve redemption Retained
capital account GBP000 reserve earnings Own shares Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2023 18,427 290,857 74,950 1,795 1,797,436 (1,019) 2,182,446
Total comprehensive
income for the period - - - - 119,592 - 119,592
Issue of share capital 29 917 - - - - 946
Credit to equity
for equity-settled
share-based payments - - - - 2,063 - 2,063
Dividends - - - - (41,939) - (41,939)
At 30 September 2023 18,456 291,774 74,950 1,795 1,877,152 (1,019) 2,263,108
Six months ended 30 September 2022 (unaudited)
Share Other non-distributable Capital
Share premium reserve redemption Retained
capital account GBP000 reserve earnings Own shares Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2022 18,397 289,923 74,950 1,795 1,800,329 (1,019) 2,184,375
Total comprehensive
income for the period - - - - 6,043 - 6,043
Issue of share capital 25 848 - - - - 873
Credit to equity
for equity-settled
share-based payments - - - - 1,730 - 1,730
Dividends - - - - (39,137) - (39,137)
At 30 September 2022 18,422 290,771 74,950 1,795 1,768,965 (1,019) 2,153,884
Year ended 31 March 2023 (audited)
Share Other non-distributable Capital
Share premium reserve redemption Retained Own shares
capital account GBP000 reserve earnings GBP000 Total
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2022 18,397 289,923 74,950 1,795 1,800,329 (1,019) 2,184,375
Total comprehensive
income for the year - - - - 73,332 - 73,332
Issue of share capital 30 934 - - - - 964
Credit to equity
for equity-settled
share-based payments - - - - 3,735 - 3,735
Dividends - - - - (79,960) - (79,960)
At 31 March 2023 18,427 290,857 74,950 1,795 1,797,436 (1,019) 2,182,446
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 September 2023
Six months Year
Six months ended ended ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Cash generated from operations 17 64,789 62,660 128,973
Bank interest paid (12,778) (6,907) (16,486)
Interest on obligations under lease liabilities (293) (394) (706)
Interest received 17 - 8
Other operating income received 61 745 2,032
Tax paid (989) (1,517) (1,844)
Cash flows from operating activities 50,807 54,587 111,977
Investing activities
Purchase of non-current assets (17,804) (73,462) (106,413)
Receipt from Capital Goods Scheme - 173 182
Cash flows from investing activities (17,804) (73,289) (106,231)
Financing activities
Issue of share capital 946 873 964
Payment of finance lease liabilities (908) (706) (1,267)
Equity dividends paid (41,741) (38,731) (79,140)
Receipt from termination of interest rate derivatives - 436 436
Loan arrangement fees paid - (1,155) (1,507)
Increase in borrowings 7,440 57,984 74,492
Cash flows from financing activities (34,263) 18,701 (6,022)
Net decrease in cash and cash equivalents (1,260) (1) (276)
Opening cash and cash equivalents 8,329 8,605 8,605
Closing cash and cash equivalents 7,069 8,604 8,329
---------------- ------------- ----------
Notes to the Interim Review
1. ACCOUNTING POLICIES
Basis of preparation
The results for the period ended 30 September 2023 are unaudited
and were approved by the Board on 20 November 2023. The financial
information contained in this report in respect of the year ended
31 March 2023 does not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. A copy of the
statutory accounts for that year has been delivered to the
Registrar of Companies. The auditor's report on those accounts was
not qualified and did not contain statements under section 498 (2)
or (3) of the Companies Act 2006.
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK.
The annual financial statements of the Group are prepared in
accordance with UK-adopted international accounting standards. As
required by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the condensed set of financial
statements has been prepared applying the accounting policies and
presentation that were applied in the preparation of the Group's
published consolidated financial statements for the year ended 31
March 2023.
The Group has adopted IFRS 17 (Insurance Contracts) during the
period. There has not been a material impact on the Group of the
adoption of this standard.
Valuation of assets and liabilities held at fair value
For those financial instruments held at fair value, the Group
has categorised them into a three-level fair value hierarchy based
on the priority of the inputs to the valuation technique in
accordance with IFRS 13. The hierarchy gives the highest priority
to quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable
inputs (Level 3). If the inputs used to measure fair value fall
within different levels of the hierarchy, the category level is
based on the lowest priority level input that is significant to the
fair value measurement of the instrument in its entirety. The fair
value of the Group's outstanding interest rate derivative has been
estimated by calculating the present value of future cash flows,
using appropriate market discount rates, representing Level 2 fair
value measurements as defined by IFRS 13. Investment Property and
Investment Property under Construction have been classified as
Level 3. This is discussed further in note 14.
Going concern
A review of the Group's business activities, together with the
factors likely to affect its future development, performance, and
position, is set out in the Chairman's Statement and the Business
and Financial Review. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are shown in the
balance sheet, cash flow statement and accompanying notes to the
interim statement. Further information concerning the Group's
objectives, policies, and processes for managing its capital; its
financial risk management objectives; details of its financial
instruments and hedging activities; and its exposures to credit
risk and liquidity risk remain the same and can be found in the
Strategic Report within the Group's Annual Report for the year
ended 31 March 2023.
At 30 September 2023 the Group had available liquidity of
GBP52.0 million, from a combination of cash and undrawn debt
facilities. On 10 October 2023, the Group raised GBP107 million
(net of expenses) through a placing of 6.3% of the Company's issued
share capital. This further increased the liquidity available to
the Group. In addition, the Group has a $225 million shelf facility
in place with Pricoa Private Capital to be drawn in fixed sterling
notes. The Group can draw the debt in minimum tranches of GBP10
million over the next three years with terms of between 7 and 15
years at short notice, typically 10 days. The Group also has land
surplus to its needs which will be realised over the medium term,
generating net cash proceeds estimated currently at over GBP100
million. The Group is cash generative and for the six months ended
30 September 2023, had operational cash flow of GBP50.8 million,
with capital commitments at the balance sheet date of GBP8.0
million.
The Directors have prepared cash flow forecasts for a period of
18 months from the date of approval of these financial statements,
taking into account the Group's operating plan and budget for the
year ending 31 March 2024 and projections contained in the
longer-term business plan which covers the period to March 2027.
After reviewing these projected cash flows together with the
Group's and Company's cash balances, borrowing facilities and
covenant requirements, and potential property valuation movements
over that period, the Directors believe that, taking account of
severe but plausible downsides, the Group and Company will have
sufficient funds to meet their liabilities as they fall due for
that period. The Group is well progressed in refinancing our
medium-term revolving credit facility which expires in October 2024
and anticipate completing this shortly.
In making their assessment, the Directors have carefully
considered the outlook for the Group's trading performance and cash
flows as a result of the current geopolitical and macroeconomic
environment, taking into account the recent trading performance of
the Group. The Directors have also considered the performance of
the business during the Global Financial Crisis and the Covid-19
pandemic. The Directors modelled a number of different scenarios,
including material reductions in the Group's occupancy rates and
property valuations, and assessed the impact of these scenarios
against the Group's liquidity and the Group's banking covenants.
The scenarios considered did not lead to breaching any of the
banking covenants, and the Group retained sufficient liquidity to
meet its financial obligations as they fall due. Consequently, the
Directors continue to adopt the going concern basis in preparing
the half year report.
2. SEGMENTAL INFORMATION
Revenue represents amounts derived from the provision of self
storage accommodation and related services which fall within the
Group's ordinary activities after deduction of trade discounts and
value added tax. The Group's net assets, revenue and profit before
tax are attributable to one activity, the provision of self storage
accommodation and related services. These all arise in the United
Kingdom.
Six months
ended Year ended
30 September Six months 31 March
2023 ended 2023
30 September
(unaudited) 2022 (unaudited) (audited)
GBP000 GBP000 GBP000
Open stores
Self storage income 86,162 80,555 162,911
Insurance income - 3,043 3,047
Enhanced liability service income 8,927 5,906 14,272
Packing materials income 1,631 1,822 3,286
Other income from storage customers 992 1,002 2,010
Ancillary store rental income 637 521 1,213
98,349 92,849 186,739
Other revenue
Non-storage income 1,215 967 2,090
Total revenue 99,564 93,816 188,829
--------------- ------------------- -----------
Non-storage income derives principally from rental income earned
from tenants of properties awaiting development.
The Group has also earned other operating income of GBP0.8
million in the period, which is principally insurance proceeds for
loss of income following the destruction of the Group's Cheadle
store by fire in 2022 (2022: GBP0.9 million).
Further analysis of the Group's operating revenue and costs are
in the Portfolio Summary and the Business and Financial Review. The
seasonality of the business is discussed in note 18.
3. INVESTMENT INCOME
Six months Year ended
Six months
ended 30 ended 30
September September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Bank interest receivable 17 - 8
Unwinding of discount on Capital
Goods Scheme receivable - 1 1
Total 17 1 9
------------ ------------- ----------
Change in fair value of interest
rate derivatives - 564 -
------------ ------------- ----------
Total investment income 17 565 9
------------ ------------- ----------
4. FINANCE COSTS
Six months Year ended
Six months
ended 30 September ended 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Interest on bank borrowings 13,617 7,836 18,156
Capitalised interest (1,753) (1,649) (2,761)
Interest on finance lease obligations 293 394 706
Other interest payable - - 61
Loan refinancing costs - 732 732
------------------- ------------------- ----------
Total interest payable 12,157 7,313 16,894
Fair value movement on derivatives 1,071 - 133
------------------- ------------------- ----------
Total finance costs 13,228 7,313 17,027
5. TAXATION
The Group is a REIT. As a result, the Group does not pay UK
corporation tax on the profits and gains from its qualifying rental
business in the UK if it meets certain conditions. Non-qualifying
profits and gains of the Group are subject to corporation tax as
normal. The Group monitors its compliance with the REIT conditions.
There have been no breaches of the conditions to date.
Six months Year ended
Six months
ended 30 ended 30
September September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax:
- Current year 983 895 2,296
- Prior year (963) (185) (319)
------------
20 710 1,977
------------ ------------- ----------
6. ADJUSTED PROFIT
Six months
ended Year ended
Six months
ended 30 September 31 March
30 September
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit before tax 119,612 6,753 75,309
(Gain)/loss on revaluation of investment
properties (67,165) 47,673 29,861
Change in fair value of interest rate
derivatives 1,071 (564) 133
Refinancing fees - 732 732
Adjusted profit before tax 53,518 54,594 106,035
Tax (20) (710) (1,977)
-------------- ------------- ----------
Adjusted profit after tax (EPRA earnings) 53,498 53,884 104,058
-------------- ------------- ----------
Adjusted profit before tax which excludes gains and losses on
the revaluation of investment properties, changes in fair value of
interest rate derivatives, net gains and losses on disposal of
investment property, and material non-recurring items of income and
expenditure have been disclosed as, in the Board's view, this
provides a clearer understanding of the Group's underlying trading
performance.
7. DIVIDS
Six months Six months
ended ended
30 September 30 September
2023 2022
(unaudited) (unaudited)
GBP000 GBP000
Amounts recognised as distributions to equity
holders in the period:
Final dividend for the year ended 31 March
2023 of 22.9p (2022: 21.4p) per share 41,939 39,137
Proposed interim dividend for the year ending
31 March 2024 of 22.6p (2023: 22.3p) per
share 44,086 40,824
------------- -------------
The proposed interim dividend of 22.6 pence per ordinary share
will be paid to shareholders on 26 January 2024. The ex-dividend
date is 4 January 2024, and the record date is 5 January 2024. The
interim dividend is all Property Income Distribution.
8. EARNINGS PER ORDINARY SHARE
The European Public Real Estate Association ("EPRA") has issued
recommended bases for the calculation of certain per share
information and these are included in the following table:
Six months ended Six months ended
30 September 2023 30 September 2022 Year ended
(unaudited) (unaudited) 31 March 2023 (audited)
Earnings Shares Pence Earnings Shares Pence Earnings Shares Pence
GBPm million per share GBPm million per share GBPm million per share
Basic 119.6 183.2 65.3 6.0 182.9 3.3 73.3 183.0 40.1
Dilutive share
options - 1.1 (0.4) - 1.0 - - 1.1 (0.3)
Diluted 119.6 184.3 64.9 6.0 183.9 3.3 73.3 184.1 39.8
Adjustments:
(Gain)/loss on
revaluation of
investment properties (67.2) - (36.5) 47.7 - 25.9 30.0 - 16.2
Change in fair
value of interest
rate derivatives 1.1 - 0.6 (0.5) - (0.3) 0.1 - 0.1
Refinancing fees - - - 0.7 - 0.4 0.7 - 0.4
EPRA - diluted 53.5 184.3 29.0 53.9 183.9 29.3 104.1 184.1 56.5
EPRA - basic 53.5 183.2 29.2 53.9 182.9 29.5 104.1 183.0 56.9
-------- ------- --------- -------- ------- --------- -------- ------- ---------
The calculation of basic earnings is based on profit after tax
for the period. The weighted average number of shares used to
calculate diluted earnings per share has been adjusted for the
conversion of share options.
EPRA earnings and earnings per ordinary share have been
disclosed to give a clearer understanding of the Group's underlying
trading performance.
9. NON-CURRENT ASSETS
a) Investment property
Investment
Investment property Right-of-use
property under construction assets Total
GBP000 GBP000 GBP000 GBP000
At 1 April 2023 2,449,640 260,720 18,148 2,728,508
Additions 7,168 6,839 - 14,007
Adjustment to present value - - 604 604
Reclassification 66,162 (66,102) - 60
Revaluation 81,775 (14,610) - 67,165
Depreciation - - (800) (800)
At 30 September 2023 2,604,745 186,847 17,952 2,809,544
------------ ------------------- ------------ ---------
Capital commitments at 30 September 2023 were GBP 8.0 million
(31 March 2023: GBP6.1 million).
b) Plant, equipment, and owner-occupied property
Fixtures,
Leasehold fittings, and Right-of-use
Freehold improve-ments Plant and office assets
property GBP000 machinery Motor vehicles equipment GBP000 Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 April 2023 2,406 59 647 32 1,691 875 5,710
Additions 19 - 221 - 345 131 716
Reclassification
to investment
property under
construction (60) - - - - - (60)
Retirement of
fully
depreciated
assets - - (70) - (316) - (386)
At 30 September
2023 2,365 59 798 32 1,720 1,006 5,980
Accumulated
depreciation
At 1 April 2023 (682) (20) (210) (32) (340) (423) (1,707)
Charge for the
period (24) (2) (89) - (318) (67) (500)
Retirement of
fully
depreciated
assets - - 70 - 316 - 386
-------------- -------------- ----------- -------------- ------------- ------------- --------
At 30 September
2023 (706) (22) (229) (32) (342) (490) (1,821)
Net book value
-------------- -------------- ----------- -------------- ------------- ------------- --------
At 30 September
2023 1,659 37 569 - 1,378 516 4,159
At 31 March 2023 1,724 39 437 - 1,351 452 4,003
c) Intangible assets
The intangible asset relates to the Big Yellow brand, which was
acquired through the acquisition of Big Yellow Self Storage Company
Limited in 1999. The carrying value of GBP1.4 million remains
unchanged from the prior year as there is considered to be no
impairment in the value of the asset. The asset has an indefinite
life and is tested annually for impairment or more frequently if
there are indicators of impairment.
d) Investment
The Group has an GBP0.6 million investment in Doncaster Security
Operations Centre Limited, a company which provides out-of-hours
monitoring and alarm receiving services, including for the Group's
stores. The investment is carried at cost and tested annually for
impairment.
10. TRADE AND OTHER RECEIVABLES
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Current
Trade receivables 5,466 5,184 5,181
Other receivables 335 310 209
Prepayments and accrued income 5,398 3,012 2,924
11,199 8,506 8,314
------------ ------------- ----------
11. TRADE AND OTHER PAYABLES
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Current
Trade payables 2,845 1,424 4,208
Other payables 18,213 15,612 18,199
Accruals and deferred income 29,656 30,363 34,868
50,714 47,399 57,275
------------- ------------ ----------
12. BORROWINGS
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Aviva loan 3,237 3,083 3,159
Current borrowings 3,237 3,083 3,159
Aviva loan 154,130 157,336 155,768
M&G loan 120,000 120,000 120,000
Bank borrowings 225,000 198,000 216,000
Unamortised debt arrangement costs (2,054) (2,280) (2,357)
------------ ------------- ----------
Non-current borrowings 497,076 473,056 489,411
Total borrowings 500,313 476,139 492,570
------------ ------------- ----------
The Group does not hedge account for its interest rate swaps and
states them at fair value, with changes in fair value included in
the income statement. The loss in the income statement for the
period on its interest rate swaps was GBP1,071,000 (2022: gain of
GBP564,000).
At 30 September 2023 the Group was in compliance with all loan
covenants. The movement in the Group's loans are shown net in the
cash flow statement as the bank loan is a revolving facility and is
repaid and redrawn each month.
The Group's Revolving Credit Facility expires in October 2024.
See commentary in the Financial Review on the refinancing of this
facility.
13. ADJUSTED NET ASSETS PER SHARE
EPRA's Best Practices Recommendations guidelines contain three
Net Asset Value (NAV) metrics: EPRA Net Tangible Assets (NTA), EPRA
Net Reinstatement Value (NRV) and EPRA Net Disposal Value
(NDV).
EPRA NTA is considered to be most consistent with the nature of
Big Yellow's business which provides sustainable long-term
progressive returns. EPRA NTA is shown in the table below. This
measure is further adjusted by the adjustment the Group makes for
purchaser's costs, which is the Group's Adjusted Net Asset Value
(or Adjusted NAV).
Basic net assets per share are shareholders' funds divided by
the number of shares at the period end. Any shares currently held
in the Group's Employee Benefit Trust are excluded from both net
assets and the number of shares. Adjusted net assets per share
include: the effect of those shares issuable under employee share
option schemes and the effect of alternative valuation methodology
assumptions (see note 14).
Six months ended Six months ended Year ended 31 March
30 September 2023 30 September 2022 2023
Equity Equity Equity
attributable attributable attributable
to ordinary Pence to ordinary Pence to ordinary Pence
shareholders Shares per shareholders Shares per shareholders Shares per
GBP000 million share GBP000 million share GBP000 million share
Basic NAV 2,263,108 183.4 1,233.8 2,153,884 183.1 1,176.3 2,182,446 183.1 1,191.7
Share and
save
as you earn
schemes 2,107 2.3 (13.8) 1,172 1.7 (10.1) 1,909 1.7 (10.0)
Diluted NAV 2,265,215 185.7 1,220.0 2,155,056 184.8 1,166.2 2,184,355 184.8 1,181.7
------------ -------- ------------ --------- ------------ ---------
Fair value
of
derivatives 755 - 0.4 (1,013) - (0.6) (316) - (0.2)
Intangible
assets (1,433) - (0.8) (1,433) - (0.8) (1,433) - (0.7)
EPRA NTA 2,264,537 185.7 1,219.6 2,152,610 184.8 1,164.8 2,182,606 184.8 1,180.8
------------ -------- ------------ --------- ------------ ---------
Valuation
methodology
assumption
(see
note 14) 107,545 - 57.9 102,108 - 55.3 104,605 - 56.5
------------ -------- -------- ------------ --------- -------- ------------ --------- --------
Adjusted NAV 2,372,082 185.7 1,277.5 2,254,718 184.8 1,220.1 2,287,211 184.8 1,237.3
------------ -------- -------- ------------ --------- -------- ------------ --------- --------
14. VALUATION OF INVESTMENT PROPERTY
The Group has classified the fair value investment property and
the investment property under construction within Level 3 of the
fair value hierarchy. There has been no transfer to or from Level 3
in the period.
The freehold and leasehold investment properties have been
valued at 30 September 2023 by the Directors. The valuation has
been carried out in accordance with the same methodology as the
year end valuations prepared by Jones Lang Lasalle ("JLL").
The Directors' valuations reflect the latest cash flows derived
from each of the stores at 30 September 2023. In performing the
valuations, the Directors consulted with JLL on the capitalisation
rates used in the valuations. The Directors, as advised by JLL,
consider that the capitalisation rates for prime self storage
stores are unchanged since the year end valuation date, with
continuing demand being seen from investors for self storage
assets.
The Directors have made some minor amendments to a couple of the
valuation assumptions, namely the adjustment of stable occupancy
levels on certain stores that are consistently trading ahead of the
previously used assumptions and to certain assumptions on net
achieved rents within the valuations. Other than the above, the
Directors believe the core assumptions used by JLL in the March
2023 valuations are still appropriate at the September valuation
date. See the Group's annual report for the year ended 31 March
2023 for the full detail of the valuation methodology.
Sensitivities
Self storage valuations are complex, derived from data which is
not widely publicly available and involve a degree of judgement.
For these reasons we have classified the valuations of our property
portfolio as Level 3 as defined by IFRS 13. Inputs to the
valuations, some of which are 'unobservable' as defined by IFRS 13,
include capitalisation yields, stable occupancy rates, and rental
growth rates. The existence of an increase of more than one
unobservable input would augment the impact on valuation. The
impact on the valuation would be mitigated by the
inter-relationship between unobservable inputs moving in opposite
directions. For example, an increase in stable occupancy may be
offset by an increase in yield, resulting in no net impact on the
valuation. A sensitivity analysis showing the impact on valuations
of changes in yields and stable occupancy is shown below:
Impact of a change in capitalisation Impact of a change in stabilised
rates occupancy assumption
25 bps decrease 25 bps increase 1% increase 1% decrease
------------------- ------------------ ----------------- ----------------
Reported
Group 4.7% (4.3%) 1.2% (1.2%)
------------------- ------------------ ----------------- ----------------
A sensitivity analysis has not been provided for a change in the
rental growth rate adopted as there is a relationship between this
measure and the discount rate adopted. So, in theory, an increase
in the rental growth rate would give rise to a corresponding
increase in the discount rate and the resulting value impact would
be limited.
Valuation assumption for purchaser's costs
The Group's investment property assets have been valued for the
purposes of the financial statements after deducting notional
weighted average purchaser's cost of 6.8% of gross value, as if
they were sold directly as property assets. The valuation is an
asset valuation that is entirely linked to the operating
performance of the business. The assets would have to be sold with
the benefit of operational contracts, employment contracts and
customer contracts, which would be very difficult to achieve except
in a corporate structure.
This approach follows the logic of the valuation methodology in
that the valuation is based on a capitalisation of the net
operating income after allowing for the deduction of operational
costs and an allowance for central administration costs. Sale in a
corporate structure would result in a reduction in the assumed
Stamp Duty Land Tax but an increase in other transaction costs,
reflecting additional due diligence, resulting in a reduced
notional purchaser's cost of 2.75% of gross value. All the
significant sized transactions that have been concluded in the UK
in recent years were completed in a corporate structure. The
Directors have therefore carried out a valuation on the above
basis, and this results in a higher property valuation at 30
September 2023 of GBP2,899.1 million (GBP107.5 million higher than
the value recorded in the balance sheet) which translates to 57.9
pence per share. We have included this revised valuation in the
adjusted diluted net asset calculation (see note 13).
15. FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURES
The table below sets out the categorisation of the financial
instruments held by the Group at 30 September 2023. Where the
financial instruments are held at fair value the valuation level
indicates the priority of the inputs to the valuation technique.
The fair value hierarchy gives the highest priority to quoted
prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3).
Valuations categorised as Level 2 are obtained from third parties.
If the inputs used to measure fair value fall within different
levels of the hierarchy, the category level is based on the lowest
priority level input that is significant to the fair value
measurement of the instrument in its entirety.
30 September 30 September
2023 2022
(unaudited) (unaudited)
Valuation
level GBP000 GBP000
Interest rate derivatives (liability)/asset 2 (755) 1,013
16. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
AnyJunk Limited
Jim Gibson is a Non-Executive Director and shareholder in
AnyJunk Limited, and Adrian Lee is a shareholder in AnyJunk
Limited. During the period AnyJunk Limited provided waste disposal
services to the Group on normal commercial terms amounting to
GBP7,000 (2022: GBP8,000).
London Children's Ballet
The Group signed a Section 106 agreement with Wandsworth Council
relating to the development of our Battersea store, which required
the Group to provide cultural space to Wandsworth Borough Council.
In 2021, the Group granted a twenty year lease over this space to
London Children's Ballet at a peppercorn rent, who in turn have
agreed to enter into a Social Agreement with Wandsworth Borough
Council coterminous with the lease. Jim Gibson is the Chairman of
Trustees of the London Children's Ballet. London Children's Ballet
rent storage space from the Group on normal commercial terms,
amounting to GBP2,000 during the period (2022: GBP1,000).
DS Operations Centre Limited
The Group has invested GBP0.6 million in DS Operations Centre
Limited ("DSOC"). DSOC provided alarm and CCTV monitoring services
to the Group under normal commercial terms during the period,
amounting to GBP154,000 (2022: GBP148,000).
Treepoints Limited
Jim Gibson is a Non-Executive Director and an investor in City
Stasher Limited, which in turn has a minority investment in
Treepoints Limited. Treepoints Limited provided offsetting tree
planting services in respect of our online packing material sales,
under normal commercial terms during the period, amounting to
GBP1,000 (2022: GBP6,000).
Ukrainian Sponsorship Pathway UK
Nicholas Vetch and Heather Savory are trustees of a charity
called Ukrainian Sponsorship Pathway UK ("USPUK") to help
Ukrainians displaced by the war to travel to the UK as part of the
"Homes for Ukraine" scheme. The charity has set up offices in
Warsaw and Krakow and is one of the few that has been recognised
for this purpose by the UK Government. We are proud to be financial
supporters of this charity and the Board approved a donation which
was made in May 2023 of GBP50,000 (2022: GBP50,000).
17. CASH FLOW NOTES
a) Reconciliation of profit after tax to cash generated from
operations
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Profit after tax 119,592 6,043 73,332
Taxation 20 710 1,977
Other operating income (762) (899) (2,185)
Investment income (17) (565) (9)
Finance costs 13,228 7,313 17,027
-------------- ------------- ----------
Operating profit 132,061 12,602 90,142
(Gain)/loss on the revaluation of
investment properties 14 (67,165) 47,673 29,861
Depreciation of plant, equipment,
and owner-occupied property 9b 433 465 888
Depreciation of finance lease capital
obligations 9a,9b 867 815 1,569
Employee share options 2,063 1,730 3,735
-------------- ------------- ----------
Cash generated from operations pre-working
capital movements 68,259 63,285 126,195
Decrease/(increase) in inventories 13 3 (13)
Increase in receivables (2,704) (906) (740)
(Decrease)/increase in payables (779) 278 3,531
-------------- ------------- ----------
Cash generated from operations 64,789 62,660 128,973
-------------- ------------- ----------
b) Reconciliation of net cash flow to movement in net debt
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net decrease in cash and cash equivalents (1,260) (1) (276)
Cash flow from movement in debt financing (7,440) (57,984) (74,492)
Change in net debt resulting from cash
flows (8,700) (57,985) (74,768)
-------------- ------------- ----------
Movement in net debt in the period (8,700) (57,985) (74,768)
Net debt at start of period (486,598) (411,830) (411,830)
Net debt at end of period (495,298) (469,815) (486,598)
-------------- ------------- ----------
18. RISKS AND UNCERTAINTIES
The risks facing the Group for the remaining six months of the
financial year are consistent with those outlined in the Annual
Report for the year ended 31 March 2023. The risk mitigating
factors listed in the 2023 Annual Report are still appropriate.
The economic outlook remains uncertain, with high, albeit
moderating, inflation and an associated impact on the cost of
living. This, along with geo-political uncertainty, may create
economic headwinds in the quarter to December 2023 and into 2024,
which may have an impact on the demand for self storage.
The value of Big Yellow's property portfolio is affected by the
conditions prevailing in the property investment market and the
general economic environment. Accordingly, the Group's net asset
value can rise and fall due to external factors beyond management's
control. The uncertainties in the global economy look set to
continue. We have a high-quality prime portfolio of assets that
should help to mitigate the impact of this on the Group.
Self storage is a seasonal business, and we typically lose
occupancy in the December quarter. The new year typically sees an
increase in activity, occupancy, and revenue growth. The visibility
we have in the business is relatively limited at three to four
weeks and is based on the net reservations we have in hand, which
are currently in line with our expectations.
There is a risk that our customers may default on their rent
payments, however we have not seen an increase in bad debts since
the onset of the pandemic. We have approximately 76,000 occupied
rooms and this, coupled with the diversity of our customers'
reasons for using storage, mean the risk of individual tenant
default to Big Yellow is low. 80% of our customers pay by direct
debit and we take a deposit from all customers. Furthermore, we
have a right of lien over customers' goods, so in the ultimate
event of default, we are able to auction the goods to recover the
debts.
19. POST BALANCE SHEET EVENT
In October 2023, the Group raised GBP107 million (net of
expenses) through a placing of 6.3% of the Company's share
capital.
20. GLOSSARY
Absorption The rate of growth in occupancy assumed within
the external property valuations from the current
occupancy level to the assumed stable occupancy
level.
Adjusted earnings The increase in adjusted eps period-on-period.
growth
Adjusted eps Adjusted profit after tax divided by the diluted
weighted average number of shares in issue during
the financial period.
Adjusted NAV EPRA NTA adjusted for an investment property valuation
carried out at purchasers' costs of 2.75%, see
note 13.
Adjusted profit The Company's pre-tax EPRA earnings measure with
before tax additional Company adjustments.
Average net achieved Storage revenue divided by average occupied space
rent per sq ft over the period.
Average rental The growth in average net achieved rent per sq
growth ft period-on-period.
BREEAM An environmental rating assessed under the Building
Research Establishment's Environmental Assessment
Method.
Carbon intensity Carbon emissions divided by the Group's average
occupied space.
Closing net rent Annual storage revenue generated from in-place
per sq ft customers divided by occupied space at the balance
sheet date.
Committed facilities Available undrawn debt facilities plus cash and
cash equivalents.
Consolidated EBITDA Consolidated EBITDA calculated in accordance with
the terms of the Group's Revolving Credit Facility
Agreement.
Debt Long-term and short-term borrowings, as detailed
in note 12, excluding finance leases and debt issue
costs.
Earnings per share Profit for the financial period attributable to
(eps) equity shareholders divided by the average number
of shares in issue during the financial period.
EBITDA Earnings before interest, tax, depreciation, and
amortisation.
EPRA The European Public Real Estate Association, a
real estate industry body. This organisation has
issued Best Practice Recommendations with the intention
of improving the transparency, comparability, and
relevance of the published results of listed real
estate companies in Europe.
EPRA earnings The IFRS profit after taxation attributable to
shareholders of the Company excluding investment
property revaluations, gains/losses on investment
property disposals and changes in the fair value
of financial instruments.
EPRA earnings EPRA earnings divided by the average number of
per share shares in issue during the period.
EPRA NTA per share EPRA NTA divided by the diluted number of shares
at the period end.
EPRA net tangible IFRS net assets excluding the mark-to-market on
asset value (EPRA interest rate derivatives, deferred taxation on
NTA) property valuations where it arises, and intangible
assets. It is adjusted for the dilutive impact
of share options.
Equity All capital and reserves of the Group attributable
to equity holders of the Company.
Gross property The sum of investment property and investment property
assets under construction.
Gross value added The measure of the value of goods and services
produced in an area, industry, or sector of an
economy.
Interest cover The ratio of operating cash flow divided by interest
paid (before exceptional finance costs, capitalised
interest, and changes in fair value of interest
rate derivatives). This metric is provided to give
readers a clear view of the Group's financial position.
Like-for-like Excludes the closing occupancy of new stores acquired,
occupancy opened, or closed in the current or preceding financial
year in both the current financial year and comparative
figures. This excludes Aberdeen, Harrow, Kingston
North, Kings Cross, and for Big Yellow stores like-for-like
occupancy, the Armadillo stores.
Like-for-like Excludes the impact of new stores acquired, opened
store revenue or stores closed in the current or preceding financial
year in both the current year and comparative figures.
This excludes Aberdeen, Harrow, Kingston North,
and Kings Cross.
LTV (loan to value) Net debt expressed as a percentage of the external
valuation of the Group's investment properties.
Maximum lettable The total square foot (sq ft) available to rent
area (MLA) to customers.
Move-ins The number of customers taking a storage room in
the defined period.
Move-outs The number of customers vacating a storage room
in the defined period.
NAV Net asset value.
Net debt Gross borrowings less cash and cash equivalents.
Net initial yield The forthcoming year's net operating income expressed
as a percentage of capital value, after adding
notional purchaser's costs.
Net operating Store EBITDA after an allocation of central overhead.
income
Net operating The projected net operating income delivered by
income on stabilisation a store when it reaches a stable level of occupancy.
Net promoter score The Net Promoter Score is an index ranging from
(NPS) -100 to 100 that measures the willingness of customers
to recommend a company's products or services to
others. The Company measures NPS based on surveys
sent to all its move-ins and move-outs.
Net Renewable Big Yellow's strategy is that by 2030 the Group
Energy Positive will generate as much renewable energy as it is
able to across its store portfolio and meet any
remaining Scope 1 and Scope 2 emissions via the
retirement of REGOs from offsite energy generation.
Net rent per sq Storage revenue generated from in place customers
ft divided by occupancy.
Net Zero Strategy The Group's published strategy to have Net Zero
Scope 1, 2 and 3 Emissions.
Non like-for-like Stores excluded from like-for-like metrics, as
stores they were acquired, opened or closed in the current
or preceding financial year. In 2023 this includes
Aberdeen, Harrow, Kingston North, Kings Cross,
and for Big Yellow stores like-for-like occupancy,
the Armadillo stores.
Occupancy The space occupied by customers divided by the
MLA expressed as a % or in sq ft.
Occupied space The space occupied by customers in sq ft.
Other storage Packing materials, insurance/enhanced liability
related income service and other storage related fees.
Pipeline The Group's development sites.
Proforma basis On 10 October 2023, the Group raised GBP107 million
(net of expenses) through a placing of 6.3% of
the Company's share capital. Certain financial
metrics at 30 September 2023 have been re-presented
in this statement as if the placing had happened
at 30 September 2023, to allow the reader to see
the financial position of the Group after adjusting
for the impact of the placing.
Property Income A dividend, generally subject to withholding tax,
Distribution (PID) that a UK REIT is required to pay from its tax-exempt
property rental business, and which is taxable
for UK-resident shareholders at their marginal
tax rate.
REGO Renewable Energy Guarantees of Origin.
REIT Real Estate Investment Trust. A tax regime which
in the UK exempts participants from corporation
tax both on UK rental income and gains arising
on UK investment property sales, subject to certain
conditions.
REVPAF Total store revenue divided by the average maximum
lettable area in the period.
Store EBITDA Store earnings before interest, tax, depreciation,
and amortisation.
Store revenue Revenue earned from the Group's open self storage
centres.
TCFD Task Force on Climate Related Financial Disclosure.
Total shareholder The growth in value of a shareholding over a specified
return (TSR) period, assuming dividends are reinvested to purchase
additional units of shares.
INDEPENDENT REVIEW REPORT TO BIG YELLOW GROUP PLC
Conclusion
We have been engaged by Big Yellow Group PLC ("the Group") to
review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2023 which
comprises the Condensed Consolidated Statement of Comprehensive
Income, Condensed Consolidated Balance Sheet, Condensed
Consolidated Statement of Changes in Equity, Condensed Consolidated
Cash Flow Statement, and the related explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2023 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK
FCA").
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity ("ISRE (UK) 2410") issued for use in the UK. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. We
read the other information contained in the half-yearly financial
report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed
set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention that causes us to believe that the directors have
inappropriately adopted the going concern basis of accounting, or
that the directors have identified material uncertainties relating
to going concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the Group to cease to continue as a going
concern, and the above conclusions are not a guarantee that the
Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the latest annual financial statements
of the Group are prepared in accordance with UK-adopted
international accounting standards.
The Directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report
in accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the
Directors are responsible for assessing the Group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility
Our responsibility is to express to the Group a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. Our conclusion, including our
conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion section of this report.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Group in accordance with the
terms of our engagement to assist the Group in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the Group those matters we are
required to state to it in this report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Group for our review work,
for this report, or for the conclusions we have reached.
Anna Jones
for and on behalf of KPMG LLP
Chartered Accountants
2 Forbury Place
33 Forbury Road
Reading
RG1 3AD
20 November 2023
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END
IR BMBITMTITBMJ
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November 20, 2023 11:35 ET (16:35 GMT)
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