TIDMSAFE
RNS Number : 1671P
Safestore Holdings plc
16 February 2021
16 February 2021
Safestore Holdings plc
First quarter trading update for the period 1 November 2020 to
31 January 2021
Continued momentum results in strong Q1 performance
Group Operating Performance Q1 2021 Q1 2020 Change Change-
(2) CER (1)
-------------------------------- -------- -------- --------- ---------
Revenue (GBP'm) 44.4 39.9 11.3% 9.8%
Closing Occupancy (let sq ft-
million)(3) 5.506 4.960 11.0% n/a
Maximum Lettable Area (MLA)(4) 6.87 6.71 2.4% n/a
Closing Occupancy (% of MLA) 80.1% 74.0% +6.1ppts n/a
Average Storage Rate (GBP) 26.47 26.07 1.5% 0.1%
Group Operating Performance- Q1 2021 Q1 2020 Change Change-
like-for-like(3) (2) CER (1)
--------------------------------- -------- -------- --------- ---------
Storage Revenue (GBP'm) 35.3 32.3 9.3% 7.7%
Ancillary Revenues (GBP'm) 7.3 7.1 2.8% 1.4%
Revenue (GBP'm) 42.6 39.4 8.1% 6.6%
Closing Occupancy (let sq ft-
million)(4) 5.321 4.839 10.0% n/a
Closing Occupancy (% of MLA)(5) 80.6% 73.7% +6.9ppts n/a
Average Occupancy (let sq ft-
million) 5.300 4.888 8.4% n/a
Average Storage Rate (GBP) 26.44 26.32 0.5% (0.9%)
Highlights
-- Group revenue for the quarter in CER(1) up 9.8% and 11.3% at actual exchange rates.
-- Like-for-like(5) Group revenue for the quarter in CER(1) up 6.6%
o UK up 8.3%
o Paris up 1.6%
-- Like-for-like(5) occupancy up 6.9ppts at 80.6% (2020: 73.7%)
o UK up 7.8ppts at 80.8% (2020: 73.0%)
o Paris up 3.1ppts at 79.8% (2020 76.7%)
-- Like-for-like (5) average rate down (0.9%) in CER(1) .
o UK down (0.1%)
o Paris down (1.8%)
-- New 18-year lease agreed on Hayes store commencing in June 2027 on expiry of current lease
-- In December 2020, the Group's joint venture with Carlyle
acquired the three-store portfolio of Opslag XL in the Netherlands.
Safestore's equity investment in the joint venture, relating to
Opslag XL, was c.EUR0.9m funded from the Group's existing
resources.
-- Recent store openings and acquisitions (including owned
through the Group's joint venture) performing in line with or ahead
of business plans
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report that the strong performance of the final
quarter of our 2020 financial year has continued throughout the
first quarter of 2021 driven by an excellent UK result,
complemented by solid performances from Paris and Spain. In
addition, our JV with Carlyle, operating in Belgium and the
Netherlands, is performing in line with its business plan.
"Our recently opened developments in the UK in Carshalton,
Sheffield and Gateshead are performing well and our Birmingham
Middleway and Paris Magenta stores are due to open in the first
half of 2021. We anticipate that our new store pipeline will grow
over the coming months and our strong and flexible balance sheet
provides significant funding capacity, allowing us to continue to
consider strategic, value-accretive investments as and when they
arise.
"Our priority, and largest opportunity, remains the significant
upside from filling the 1.4m square feet of fully invested
currently unlet space in our UK, Paris and Barcelona markets.
Whilst the potential for disruption arising from current COVID
restrictions remains, the inherent resilience of our business model
as well as our recent and current trading allows me to look forward
with confidence. The first quarter's trading performance has
provided us with a strong base for the rest of the financial year
and, if the current momentum continues, we would anticipate that
the business delivers Adjusted Diluted EPRA Earnings per Share (7)
for 2020/21 towards the top of the range of analysts' forecasts (8)
".
Business highlights
UK Trading Performance
UK Operating Performance Q1 2021 Q1 2020 Change
(2)
-------------------------------- -------- -------- ---------
Revenue (GBP'm) 33.6 30.3 10.9%
Closing Occupancy (let sq ft-
million)(3) 4.366 3.859 13.1%
Maximum Lettable Area (MLA)(4) 5.45 5.29 3.0%
Closing Occupancy (% of MLA) 80.1% 73.0% +7.1ppts
Average Storage Rate (GBP) 24.37 24.47 (0.4%)
UK Operating Performance- like-for-like(3) Q1 2021 Q1 2020 Change
(2)
-------------------------------------------- -------- -------- ---------
Storage Revenue (GBP'm) 26.1 23.7 10.1%
Ancillary Revenues (GBP'm) 6.4 6.3 1.6%
Revenue (GBP'm) 32.5 30.0 8.3%
Closing Occupancy (let sq ft-
million)(4) 4.275 3.832 11.6%
Closing Occupancy (% of MLA)(5) 80.8% 73.0% +7.8ppts
Average Occupancy (let sq ft-
million) 4.258 3.879 9.8%
Average Storage Rate (GBP) 24.32 24.34 (0.1%)
The UK has performed very strongly in the first quarter of 2021.
Like-for-like revenue growth of 8.3% was driven by an excellent
occupancy performance, whilst maintaining the like-for-like average
rate, finishing the quarter at GBP24.32 (2020: GBP24.34). The
like-for-like closing occupancy, as measured by sq ft occupied, was
up 11.6% and like-for-like closing occupancy at the end of the
quarter as a percentage of MLA was up 7.8ppts at 80.8% (2020:
73.0%). The occupancy performance was strong across the UK with
Regional UK slightly out-performing London and the South East.
Like-for-like ancillary revenues were up 1.6% in the period,
continuing the improving momentum seen in Q4 2020.
Total revenue growth of 10.9% reflected the like-for-like growth
as well as the 2020 store openings in Carshalton, Gateshead and
Sheffield and the annualisation of the acquisitions of our St
John's Wood and Chelsea stores. The UK also benefited from the
contribution of management fees from our joint venture operations
in the Netherlands and Belgium (included in ancillary revenues)
which is managed by our UK team. All acquisitions and new store
developments are performing in line with or ahead of their business
cases, with our new store at Birmingham-Middleway expected to open
in the first half of 2021.
Paris Trading Performance
Paris Operating Performance Q1 2021 Q1 2020 Change
(2)
-------------------------------- -------- -------- ---------
Revenue (EUR'm) 11.23 11.05 1.6%
Closing Occupancy (let sq ft-
million)(3) 1.046 1.007 3.9%
Maximum Lettable Area (MLA)(4) 1.31 1.31 =
Closing Occupancy (% of MLA) 79.8% 76.7% +3.1ppts
Average Storage Rate (EUR) 39.10 39.81 (1.8%)
Revenue (GBP'm) 10.1 9.4 7.4%
Paris Operating Performance- Q1 2021 Q1 2020 Change
like-for-like(3) (2)
--------------------------------- -------- -------- ---------
Storage Revenue (EUR'm) 10.26 10.10 1.6%
Ancillary Revenues (EUR'm) 0.97 0.95 2.1%
Revenue (EUR'm) 11.23 11.05 1.6%
Closing Occupancy (let sq ft-
million)(4) 1.046 1.007 3.9%
Closing Occupancy (% of MLA)(5) 79.8% 76.7% +3.1ppts
Average Occupancy (let sq ft-
million) 1.042 1.009 3.3%
Average Storage Rate (EUR) 39.10 39.81 (1.8%)
Revenue (GBP'm) 10.1 9.4 7.4%
Our Paris business had a good quarter, growing total and
like-for-like storage revenue by 1.6%. Like-for-like occupancy
performance was strong for the quarter with closing occupancy at
79.8%, up 3.1ppts compared to 2020. The like-for-like average rate,
which was down by (1.8%), partially offset the occupancy growth.
Like-for-like ancillary revenues showed improving momentum and were
up 2.1%.
Sterling equivalent revenue was impacted by the 5.2% weakening
in the Sterling: Euro exchange rate for the quarter compared to Q1
2020. As a result, sterling equivalent total and like-for-like
revenue grew by 7.4% compared to Q1 2020.
Our new 50,000 sq ft store in central Paris at Boulevard Magenta
is anticipated to open in the first half of 2021.
Barcelona Trading Performance(6)
Our Barcelona business which was acquired in December 2019,
continued, as expected, to see a small seasonal outflow of
occupancy and ended the quarter at a closing occupancy of 88.6%
(2020: 88.6%). However, the average rate grew by 4.2% to EUR31.09
compared to EUR29.85 for Q1 2020.
Lease Extensions and Assignments
In the period, we agreed a new 18-year lease on our Hayes store
which starts at the expiry of the current lease in June 2027. The
new lease is protected under the Landlord and Tenant Act. A
six-month rent-free period was granted immediately under the
current lease with a further three-month rent-free period when the
new lease commences.
As part of our ongoing asset management programme, we have now
extended the leases on 23 stores or 64% of our leased store
portfolio in the UK since 2012.
Joint Venture with Carlyle- Investment in Opslag XL
As announced as part of our 14 January 2021 results
announcement, the Group's joint venture with Carlyle acquired the
three-store portfolio of Opslag XL in the Netherlands in December
2020. Safestore's equity investment in the joint venture, relating
to Opslag XL, was c.EUR0.9m funded from the Group's existing
resources. Safestore also earns a fee for providing management
services to the joint venture. Safestore expects to earn an initial
return on investment of 12% before transaction related costs for
the first full year reflecting its share of expected joint venture
profits and fees for management services.
Opslag XL has three locations in The Hague, Hilversum and
Amsterdam. The Hague and Hilversum are freehold; the Amsterdam
store is a short leasehold (December 2021). The business had 7,000
sq metres (75,000 sq ft) of MLA and an occupancy of 58%. This
acquisition complements the six stores in Amsterdam and Haarlem in
the Netherlands acquired in August 2019. In total, the joint
venture will own stores with 53,300 sq metres (574,000 sq ft) of
MLA.
The Group's further investment in the joint venture is has been
immediately accretive to Group earnings per share from completion
and will support the Group's future dividend capacity.
Our joint venture provides an earnings-accretive opportunity to
gain detailed operational exposure to new markets while carefully
managing the investment risk. The Group's leading digital platform
has already delivered substantial marketing benefits both in terms
of costs and in terms of volume of enquiries. The operational
integration has been completed in an efficient manner, leveraging
the skills and capacities of our existing Head Offices in the UK
and Paris.
Our local property development team also enables us to further
our understanding of local property markets, which will allow the
Group to allocate equity investment efficiently with a risk/reward
profile similar to that of our historical core markets.
Ends
1 - CER is Constant Exchange Rates (Euro denominated results for
the current period have been retranslated at the exchange rate
effective for the comparative period, in order to present the
reported results on a more comparable basis).
2 - Q1 2020 is the quarter ended 31 January 2020.
3 - Occupancy excludes offices but includes bulk tenancy. As at
31 January 2021, closing occupancy includes 14,000 sq ft of bulk
tenancy (31 January 2020: 14,000 sq ft).
4 - MLA is Maximum Lettable Area.
5 - Like-for-like information includes only those stores which
have been open throughout both the current and prior financial
years, with adjustments made to remove the impact of new and closed
stores, as well as corporate transactions.
6 - The Barcelona business was acquired on 30 December 2019. As
a result, only one month of revenue is included in the comparative
quarter, Q1 2020.
7 - Adjusted Diluted EPRA EPS is based on the European Public
Real Estate Association's definition of Earnings and is defined as
profit or loss for the period after tax but excluding corporate
transaction costs, change in fair value of derivatives, gain/loss
on investment properties and the associated tax impacts. The
Company then makes further adjustments for the impact of
exceptional items, IFRS 2 share-based payment charges, exceptional
tax items and deferred tax charges. This adjusted earnings is
divided by the diluted number of shares. The IFRS 2 cost is
excluded as it is written back to distributable reserves and is a
non-cash item (with the exception of the associated National
Insurance element). Therefore neither the Company's ability to
distribute nor pay dividends are impacted (with the exception of
the associated National Insurance element). The financial
statements will disclose earnings on a statutory, EPRA and Adjusted
Diluted EPRA basis and will provide a full reconciliation of the
differences in the financial year in which any LTIP awards may
vest.
8- The analyst consensus for Adjusted Diluted EPRA EPS for the
current financial year is 32.6p. Analyst forecasts range from 31.2p
to 34.6p.
This announcement contains inside information.
Enquiries
Safestore Holdings plc 020 8732 1500
Frederic Vecchioli, Chief Executive Officer
Andy Jones, Chief Financial Officer
www.safestore.com
Instinctif Partners 020 7457 2020
Guy Scarborough
Catherine Wickman
Notes to editors:
-- Safestore is the UK's largest self-storage group with 159
stores at 31 January 2021, comprising 127 wholly owned stores in
the UK (including 71 in London and the South East with the
remainder in key metropolitan areas such as Manchester, Birmingham,
Glasgow, Edinburgh, Liverpool, Sheffield, Leeds, Newcastle and
Bristol), 28 wholly owned stores in the Paris region and 4 stores
in Barcelona. In addition, the Group operates 9 stores in the
Netherlands and 6 stores in Belgium under a joint venture agreement
with Carlyle.
-- 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 more densely populated UK and
French markets.
-- Safestore was founded in the UK in 1998. It acquired the
French business "Une Pièce en Plus" ("UPP") in 2004 which was
founded in 1998 by the current Safestore Group CEO Frederic
Vecchioli.
-- Safestore has been listed on the London Stock Exchange since
2007. It entered the FTSE 250 index in October 2015.
-- The Group provides storage to around 75,000 personal and business customers.
-- As at 31 January 2021, Safestore had a maximum lettable area
("MLA") of 6.871 million sq ft (excluding the expansion pipeline
stores, and the Carlyle Joint Venture) of which 5.506 million sq ft
was occupied.
-- Safestore employs around 660 people in the UK, Paris and Barcelona.
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END
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