TIDMSAFE
RNS Number : 6077I
Safestore Holdings plc
01 September 2016
Safestore Holdings plc
Third quarter trading update for the period 1 May 2016 to 31
July 2016
Strong trading performance continues, new store openings on
track.
Group Operating Performance Q3 2016 Q3 2015(2) Change Change-
CER(1)
------------------------------- -------- ----------- --------- --------
Like-for-like (LFL) Revenue
(GBP'm) 28.6 26.2 9.2% 6.6%
------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 28.6 26.7 7.1% 4.5%
------------------------------- -------- ----------- --------- --------
LFL Revenue- year-to-date
(GBP'm) 82.7 75.2 10.0% 9.0%
------------------------------- -------- ----------- --------- --------
Revenue- year-to-date (GBP'm) 82.7 77.1 7.3% 6.3%
------------------------------- -------- ----------- --------- --------
Closing Occupancy (let sq
ft- million) (3) 3.69 3.61 2.2% n/a
------------------------------- -------- ----------- --------- --------
Closing Occupancy (% of
MLA) (4) 74.8% 72.2% +2.6ppts n/a
------------------------------- -------- ----------- --------- --------
LFL Closing Occupancy (let
sq ft- million) 3.69 3.56 3.7% n/a
------------------------------- -------- ----------- --------- --------
LFL Closing Occupancy (%
of MLA) (4) 74.8% 72.7% +2.1ppts n/a
------------------------------- -------- ----------- --------- --------
Average Storage Rate (GBP) 25.87 24.53 5.5% 2.3%
------------------------------- -------- ----------- --------- --------
Average Storage Rate (GBP)-
year-to-date 25.97 24.75 4.9% 3.9%
------------------------------- -------- ----------- --------- --------
Highlights
-- Like-for-like Group revenue for Q3 2016 in CER(1) up 6.6% on
Q3 2015 with a particularly strong UK performance
o UK up 7.5%
o Paris up 2.3%
-- Group closing occupancy(3) of 74.8% (up 2.6 ppts on Q3 2015)
at 3.69 million square feet ("sq ft") with strong UK
performance
-- Group average storage rate up 2.3% in CER(1) in the quarter
-- Completion of the Space Maker acquisition on 29 July 2016
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report continuing positive trading across the
business and we remain, as ever, focused on the significant organic
growth opportunity represented by our 1.2m square feet of currently
unlet space from the existing estate.
In addition, the recent completion of the acquisition of Space
Maker and the opening of our newly redeveloped Wandsworth store in
August further consolidates our leading UK market position and I
look forward to the opening, on time and on budget, of an
additional three stores in the UK and one in Paris in the coming
weeks.
Market dynamics remain favourable and, combined with positive
current trading and the impact of the recent weakening of Sterling
on the translation of our Parisian results, as we approach the end
of the current financial year, we are confident in generating cash
tax adjusted earnings slightly ahead of current market
expectations(5) ."
Business highlights
UK Trading Performance
UK Operating Performance Q3 2016 Q3 2015(2) Change
------------------------------- -------- ----------- ---------
Like-for-like (LFL) Revenue
(GBP'm) 21.5 20.0 7.5%
------------------------------- -------- ----------- ---------
Revenue (GBP'm) 21.5 20.5 4.9%
------------------------------- -------- ----------- ---------
LFL Revenue- year-to-date
(GBP'm) 62.6 56.8 10.2%
------------------------------- -------- ----------- ---------
Revenue- year-to-date (GBP'm) 62.6 58.7 6.6%
------------------------------- -------- ----------- ---------
Closing Occupancy (let sq
ft- million) (3) 2.86 2.79 2.5%
------------------------------- -------- ----------- ---------
Closing Occupancy (% of
MLA) (4) 73.0% 70.0% +3.0ppts
------------------------------- -------- ----------- ---------
LFL Closing Occupancy (let
sq ft- million) 2.86 2.74 4.4%
------------------------------- -------- ----------- ---------
LFL Closing Occupancy (%
of MLA) (4) 73.0% 70.5% +2.5ppts
------------------------------- -------- ----------- ---------
Average Storage Rate (GBP) 24.29 23.59 3.0%
------------------------------- -------- ----------- ---------
Average Storage Rate (GBP)-
year-to-date 24.64 23.55 4.6%
------------------------------- -------- ----------- ---------
The UK business had another strong quarter growing like-for-like
revenue by 7.5%. Performance was strong across the UK with London
and the South East up 7.0% and Regional UK up 9.2%.
After the relaunch of our consumer website at the beginning of
the financial year, enquiry growth in Q3 was up 10.2% year-on-year,
continuing the strong momentum seen at the end of the second
quarter. Further improvements were made in the conversion rate and
new lets increased by 11.0% in the quarter and 6.4% for the
year-to-date.
The third quarter is traditionally the busiest period in the
year and, driven by the new lets performance, 170,000 sq ft of
occupancy was added since the end of Q2 (2015: 105,000 sq ft
added). As a result, Q3 closing occupancy, at 73.0%, increased by
3.0 percentage points compared to the prior year.
As we have previously guided, our rate growth slowed slightly in
the quarter and was up 3.0% year-on-year. This is in line with our
full year expectations.
In the period since the EU referendum on 23 June 2016, we have
seen no discernible change in trading patterns in the UK and we
continue to implement our business strategy accordingly.
Paris Trading Performance
Paris Operating Performance Q3 2016 Q3 2015(2) Change
------------------------------- -------- ----------- ---------
Like-for-like (LFL) Revenue
(EUR'm) 8.8 8.6 2.3%
------------------------------- -------- ----------- ---------
Revenue (EUR'm) 8.8 8.6 2.3%
------------------------------- -------- ----------- ---------
LFL Revenue- year-to-date
(EUR'm) 26.1 24.8 5.2%
------------------------------- -------- ----------- ---------
Revenue- year-to-date (EUR'm) 26.1 24.8 5.2%
------------------------------- -------- ----------- ---------
Closing Occupancy (let sq
ft- million) (3) 0.83 0.82 1.2%
------------------------------- -------- ----------- ---------
Closing Occupancy (% of
MLA) (4) 82.0% 80.8% +1.2ppts
------------------------------- -------- ----------- ---------
LFL Closing Occupancy (let
sq ft- million) 0.83 0.82 1.2%
------------------------------- -------- ----------- ---------
LFL Closing Occupancy (%
of MLA) (4) 82.0% 80.8% +1.2ppts
------------------------------- -------- ----------- ---------
Average Storage Rate (EUR) 38.84 38.59 +0.6%
------------------------------- -------- ----------- ---------
Average Storage Rate (EUR)-
year-to-date 39.42 38.84 +1.5%
------------------------------- -------- ----------- ---------
Revenue (GBP'm) 7.1 6.2 14.5%
------------------------------- -------- ----------- ---------
Revenue (GBP'm)- year-to-date
(GBP'm) 20.1 18.4 9.2%
------------------------------- -------- ----------- ---------
Our Paris business had a solid quarter growing both rate and
occupancy with like-for-like revenue now up by 5.2% in CER(1) for
the year-to-date. The impact of the significant weakening of
Sterling in the period resulted in the Sterling equivalent
like-for-like revenue being up 14.5% on Q3 2015.
The business grew occupancy by 26,000 sq ft since the end of Q2
(2015: 37,000 sq ft) resulting in closing occupancy of 82.0%, up
1.2 percentage points compared to the prior year.
Pricing was robust and our average rate was up 0.6% year-on-year
in the quarter.
We continue to pursue our strategy of growing revenue by
achieving an appropriate balance of rate and occupancy growth.
Space Maker
Safestore completed the acquisition of Space Maker on 29 July
2016. The final initial consideration, after certain downward
adjustments, was GBP40.9m. Up to GBP1.4m of deferred consideration
may be payable in cash between six months and three years from July
2016, subject to the Space Maker business achieving certain
performance targets in that period.
In the year to 30 April 2016, Space Maker delivered EBITDA
(before management fees) of GBP3.9m on turnover of GBP8.7m. At the
initial consideration price, the Space Maker portfolio has an
implied first year net operating income yield of c. 9.5%. Including
the deferred consideration, the net operating income yield would be
c. 9.2%.
The Space Maker stores have now been fully integrated into the
Safestore regional management structure. However, as the
transaction completed at the end of the quarter, the trading
statistics reported in this announcement are for the existing
Safestore business only. Following completion, the acquisition is
immediately earnings enhancing and will support the Group's
dividend capacity for the current financial year and beyond.
New Stores
We are pleased to confirm that our newly redeveloped Wandsworth
store (33,200 sq ft) opened on 26 August 2016. We look forward to
the openings of our Birmingham (51,000 sq ft), Altrincham (39,000
sq ft) and Chiswick (42,500 sq ft) stores as well as our
Paris-Emerainville (60,000 sq ft) store in the coming weeks. All
stores are anticipated to be completed on time and on budget.
Outlook
Reflecting normal industry trading patterns, we anticipate a
reduction in occupancy in Q4 compared to Q3. However, early Q4
trading is healthy and, combined with the positive impact of the
recent weakening of Sterling on the translation of our Parisian
results, we are confident in generating cash tax adjusted earnings
slightly ahead of current market expectations(5) .
Ends
1 - CER is Constant Exchange Rate
2 - Q3 2015 is the quarter ended 31 July 2015
3 - Closing occupancy excludes offices but includes 37,750 sq ft
of bulk tenancy as at 31 July 2016 (31 July 2015 - 62,772 sq ft);
this excludes Space Maker, which was acquired at the end of the
quarter
4 - MLA is Maximum Lettable Area
5 - As of today's date, based on the forecasts of 7 analysts,
the consensus for cash tax adjusted earnings per share for the year
ended October 2016 is 18.9p and the range is from 18.6p to
19.0p
Enquiries
Safestore Holdings plc 020 8732 1500
Frederic Vecchioli, Chief Executive Officer
Andy Jones, Chief Financial Officer
www.safestore.com
Instinctif Partners 020 7457 2020
Mark Reed
Guy Scarborough
Notes to editors:
-- Safestore (excluding Space Maker) is the UK's largest self-storage group with 119 stores,
comprising 95 wholly owned stores in the UK (including 56 in London and the South East with
the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh,
Liverpool and Bristol) and 24 wholly owned stores in the Paris region.
-- Safestore completed the acquisition of Space Maker on 29 July 2016, which has added an additional
12 stores to Safestore's store portfolio, increasing the number of wholly owned stores to
131. As the acquisition of Space Maker completed at the end of the quarter, the trading statistics
reported in this announcement are for the existing Safestore business only
-- Safestore operates more self-storage sites inside the M25 and in central Paris than any competitor
providing more proximity to customers in the wealthiest and densest UK and French markets.
-- Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en
Plus" ("UPP") in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic
Vecchioli.
-- Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250
index in October 2015.
-- The Group (excluding Space Maker) provides storage to around 49,000 personal and business
customers.
-- Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 4.925 million sq
ft (excluding the expansion pipeline stores) of which 3.686 million sq ft is currently occupied.
-- Safestore employs around 525 people in the UK and France.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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