TIDMSAFE
RNS Number : 9026K
Safestore Holdings plc
07 September 2021
7 September 2021
Safestore Holdings plc
Third quarter trading update for the period 1 May 2021 to 31
July 2021
Strong Trading Momentum Continues
Further upgrade to full year earnings guidance
Group Operating Performance Q3 2021 Q3 2020 Change Change-
(3) CER (2)
--------------------------------- -------- -------- ---------- ---------
Revenue (GBP'm) 47.6 40.2 18.4% 19.7%
Revenue (GBP'm)- year-to-date
(YTD) 135.7 119.5 13.6% 13.6%
Closing Occupancy (let sq ft-
million)(5) 5.985 5.184 15.5% n/a
Closing Occupancy (% of MLA)(6) 85.7% 75.6% +10.1ppts n/a
Average Storage Rate (GBP) 26.26 26.56 (1.1%) (0.0%)
Average Storage Rate (GBP)-
YTD 26.43 26.53 (0.4%) (0.4%)
Group Operating Performance- Q3 2021 Q3 2020 Change Change-
like-for-like(4) (3) CER (2)
--------------------------------- -------- -------- ---------- ---------
Storage Revenue (GBP'm) 37.5 32.2 16.5% 17.7%
Ancillary Revenues (GBP'm) 8.0 6.6 21.2% 21.4%
Revenue (GBP'm) 45.5 38.8 17.3% 18.6%
Storage Revenue (GBP'm)- YTD 107.4 95.8 12.1% 12.1%
Ancillary Revenues (GBP'm)-
YTD 22.4 20.4 9.8% 9.8%
Revenue (GBP'm)- YTD 129.8 116.2 11.7% 11.7%
Closing Occupancy (let sq ft-
million)(5) 5.708 5.000 14.2% n/a
Closing Occupancy (% of MLA)(6) 87.0% 76.4% +10.6ppts n/a
Average Occupancy (let sq ft-
million) 5.637 4.826 16.8% n/a
Average Occupancy- YTD (let
sq ft- million) 5.417 4.806 12.7% n/a
Average Storage Rate (GBP) 26.40 26.54 (0.5%) 0.6%
Average Storage Rate (GBP)-
YTD 26.51 26.63 (0.5%) (0.5%)
Highlights
-- Group revenue for the quarter in CER(2) up 19.7%
o UK total revenue +24.7%
o Paris total revenue +5.6%
o Spain total revenue +8.3%
-- Group like-for-like(4) storage revenue in Q3 in CER(2) up 17.7% and like-for-like total revenue
up 18.6%.
-- Like-for-like(4) occupancy up 10.6ppts at 87.0% (2020: 76.4%)
o UK up 11.8ppts at 87.6% (2020: 75.8%)
o Paris up 6.2ppts at 84.7% (2020 78.5%)
-- Contracts exchanged for new freehold development sites in Shoreham, UK and Southern Paris,
which will together add c. 109,000 sq ft of MLA
-- Planning permission granted for previously announced Central Barcelona 1 and Southern Madrid
sites
-- Additional new leasehold site in Central Barcelona of 19,000 sq ft MLA secured
-- Property Pipeline now at 702,000 sq ft of MLA
-- Strong momentum into Q4 with August like-for-like(4) revenue up 21.5% (UK +26%, Paris +7.9%)
-- Full year earnings guidance further revised upwards. Adjusted Diluted EPRA Earnings per Share
(7) expected to be in a range of 39.5p to 40p.
Frederic Vecchioli, Chief Executive Officer commented:
"Safestore's unique business model, which combines advanced
digital marketing and pricing analytics, a well-located portfolio
with extensive pipeline, and a focus on store team sales skills,
has once again delivered market leading results. I would like to
thank our staff for continuing to perform excellently during the
period.
"I am pleased to report that the strong trading momentum in the
first half of the year has continued in the third quarter. The
Group closing occupancy at 31 July 2021 was 5.985m sq ft, up 15.5%
on 2020, and stood at 85.7%, up 10.1ppts on 2020. Rate was broadly
flat but moved into positive territory on a like-for-like basis in
CER (+0.6%) and move-in rates for new customers have been trending
upward year-on-year in the UK, France and Spain. Our JV with
Carlyle, operating in Belgium and the Netherlands, continues to
perform in line with its business plan.
"We continue to focus on the significant upside from filling the
1.0m square feet of fully invested currently unlet space in our UK,
Paris and Spain markets as well as the 0.7m of additional pipeline
capacity. As the awareness and adoption of self-storage continues
to increase, the Group, with its scale and expertise as well as
existing funding capacity, is very well positioned to continue to
grow its portfolio further.
"Whilst there is still potential for disruption from the
COVID-19 pandemic, the inherent resilience of our business model as
well as the momentum which has continued in the third quarter,
gives the Board further confidence in relation to the outlook for
the full year. We now anticipate that the business should deliver
Adjusted Diluted EPRA Earnings per Share (7) for 2020/21 of in a
range of 39.5p to 40p which would represent an increase of c.31% to
32.5% compared to the prior year."
Business highlights
UK Trading Performance
UK Operating Performance Q3 2021 Q3 2020 Change
(3)
--------------------------------- -------- -------- ----------
Revenue (GBP'm) 36.9 29.6 24.7%
Revenue (GBP'm)- YTD 104.1 89.4 16.4%
Closing Occupancy (let sq ft-
million)(5) 4.775 4.055 17.8%
Closing Occupancy (% of MLA)(6) 86.6% 74.6% +12.0ppts
Average Storage Rate (GBP) 24.68 24.28 1.6%
Average Storage Rate (GBP)-
YTD 24.67 24.58 0.4%
UK Operating Performance- like-for-like(4) Q3 2021 Q3 2020 Change
(3)
-------------------------------------------- -------- -------- ----------
Storage Revenue (GBP'm) 28.4 23.2 22.4%
Ancillary Revenue (GBP'm) 7.1 5.7 24.6%
Revenue (GBP'm) 35.5 28.9 22.8%
Storage Revenue (GBP'm)- YTD 80.5 69.7 15.5%
Ancillary Revenue (GBP'm)- YTD 19.8 17.9 10.6%
Revenue (GBP'm)- YTD 100.3 87.6 14.5%
Closing Occupancy (let sq ft-
million)(5) 4.596 3.970 15.8%
Closing Occupancy (% of MLA)(6) 87.6% 75.8% +11.8ppts
Average Occupancy (let sq ft-
million) 4.542 3.806 19.3%
Average Occupancy- YTD (let
sq ft- million) 4.351 3.797 14.6%
Average Storage Rate (GBP) 24.81 24.22 2.4%
Average Storage Rate (GBP)-
YTD 24.74 24.51 0.9%
The UK business performed very strongly in the third quarter
with total revenue up 24.7%. Like-for-like storage revenue
increased 22.4% whilst the performance of ancillary revenues
improved significantly with growth of 24.6% compared to Q3 2020. As
a result, total like-for-like revenue was up 22.8% for the quarter.
For the year-to-date, like-for-like revenue was up 14.5% compared
to 2020.
The strong UK result was driven by an excellent occupancy
performance. Like-for-like average occupancy grew by 19.3% compared
to Q3 2020 and the like-for-like closing occupancy at the end of
April 2021 was up 11.8ppts at 87.6% (2020: 75.8%). The third
quarter saw a like-for-like occupancy inflow of 274,000 sq ft
compared to an inflow of 291,000 sq ft in Q3 2020. The third
quarter in 2020 was particularly strong as trading bounced back
after the initial COVID-19 lockdowns so it is pleasing to see a
similar performance in the current year. Like-for-like average rate
was up 2.4% for the quarter and 0.9% for the year-to-date.
Total revenue growth of 24.7% reflected the strong like-for-like
performance, the 2020 store openings in Carshalton, Gateshead and
Sheffield, the annualisation of the acquisitions of our St John's
Wood and Chelsea stores, the 2021 opening of our Birmingham
Middleway store and management fees from our Joint Venture with
Carlyle. All acquisitions and new store developments are performing
in line with or ahead of their business cases.
In August 2021, the first month of the fourth quarter, the
momentum continued with total revenue growth of 27.5% driven by
strong rate growth.
Paris Trading Performance
Paris Operating Performance- Q3 2021 Q3 2020 Change
total and like-for-like(4) (3)
--------------------------------- -------- -------- ---------
Storage Revenue (EUR'm) 10.61 10.06 5.5%
Ancillary Revenue (EUR'm) 1.05 0.98 7.1%
Revenue (EUR'm) 11.66 11.04 5.6%
Storage Revenue (EUR'm)- YTD 30.78 29.95 2.8%
Ancillary Revenue (EUR'm)- YTD 2.99 2.84 5.3%
Revenue (EUR'm)- YTD 33.77 32.79 3.0%
Closing Occupancy (let sq ft-
million)(5) 1.112 1.030 8.0%
Closing Occupancy (% of MLA)(6) 81.7% 78.5% +3.2ppts
Closing Occupancy- like for
like (% of MLA)(6) 84.7% 78.5% +6.2ppts
Average Occupancy (let sq ft-
million) 1.095 1.020 7.4%
Average Occupancy- YTD (let
sq ft- million) 1.066 1.009 5.6%
Average Storage Rate (EUR) 38.42 39.22 (2.0%)
Average Storage Rate (EUR)-
YTD 38.59 39.66 (2.7%)
Revenue (GBP'm) 10.0 9.9 1.0%
Revenue (GBP'm)- YTD 29.5 28.6 3.1%
Paris had a strong quarter, with revenue growth accelerating
from the first half of the year to 5.6% compared to last year.
For the current year-to-date, all stores in the portfolio,
except Paris Magenta, are classified as like-for-like. Paris
Magenta opened in late April 2021 but public road works, expected
to conclude during September 2021, have limited access to the store
which has, therefore, not contributed meaningfully to revenue at
the period end.
Occupancy performance was robust for the quarter: average
occupancy grew by 7.4% with closing occupancy at 81.7%, up 3.2ppts
compared to 2020. The third quarter saw an occupancy inflow of
39,000 sq ft compared to an inflow of 45,000 sq ft in Q3 2020.
Excluding the MLA of Paris Magenta, the closing occupancy was
84.7%, up 6.2ppts compared to Q3 2020.
The average storage rate was down 2.0% for the quarter although
the rate grew by 0.4% compared to the second quarter of 2021, and
the average rate paid by new customers was higher than in the same
quarter last year. Ancillary revenues were strong, growing by 7.1%
in the quarter.
In August 2021, the first month of the fourth quarter, total
revenue growth was 8.1%.
Sterling equivalent revenue was up 1.0% for the quarter
reflecting a 4.4% strengthening in the average Sterling: Euro
exchange rate. For the year-to-date sterling revenue was up 3.1%
reflecting a 0.2% weakening in the average exchange rate over the
nine-month period.
Spain Trading Performance
Our Spanish business, which was acquired in December 2019 and
is, therefore, not considered like-for-like, grew revenue by 8.3%
in the quarter to EUR0.8m. Revenue for the nine months was EUR2.4m
(2020: EUR1.7m for seven months). Closing occupancy in sq ft was
down 1.0% whilst average rate in the year-to-date grew by 4.8% to
EUR31.55 (2020: EUR30.10) with ancillary revenues improving
strongly. Closing occupancy was 90.4% (2020: 93.5%).
Property Pipeline
Our pipeline of future development opportunities remains strong
and gives us further confidence for our future growth plans.
New development site- Shoreham
In July 2021, the Group exchanged contracts on a freehold 0.8
acre site in Shoreham, West Sussex. Shoreham is situated between
Brighton and Worthing on the south coast of England. Subject to
planning, we will open a purpose built 54,000 sq ft MLA store in Q4
of 2022.
New development site- Southern Paris
In August 2021, the Group exchanged contracts on a freehold site
in Southern Paris with a significant frontage onto the N104
motorway. The site includes an existing building which will be
demolished and replaced by a 55,000 sq ft MLA store. Subject to
planning we expect the store to open in the third quarter of
2022.
New development site- Central Barcelona 2
In August 2021, the Group exchanged contracts on a leasehold
site in Central Barcelona. The site is a former car dealership
which will be converted to a 19,000 sq ft MLA store which, subject
to planning, should open in Q2 of 2022.
Planning permissions- Central Barcelona 1 and Southern
Madrid
Our Central Barcelona 1 (13,500 sq ft of MLA) and Southern
Madrid (29,000 sq ft of MLA) stores, announced previously, were
granted planning permission in August 2021 and are expected to open
in the first and third quarters of 2022 respectively.
The Group now has a property pipeline of 702,000 sq ft of MLA
with a total remaining capital expenditure requirement of c.
GBP100m over the next four years, which the Group intends to
self-finance. The pipeline comprises sites in London and the South
East of England, Paris, Barcelona and Madrid. Full details are set
out below.
Property Pipeline Summary
Store FH/ Status MLA SQFT Target Other
LH Opening
London- Bow FH Completed 74,000 Q1 2022 Conversion of
existing building
---- --------------------- ----------- --------- ------------------------
London- Lea Bridge FH Contracts exchanged/ 76,500 Q4 2024 New build.
subject to planning GBP170k pa of
rental income
prior to opening.
---- --------------------- ----------- --------- ------------------------
London- North FH Contracts exchanged/ 56,500 Q4 2025 New build.
East London subject to planning
---- --------------------- ----------- --------- ------------------------
London- Morden FH Completed/ Planning 52,000 Q4 2022 New build.
granted
---- --------------------- ----------- --------- ------------------------
London- Bermondsey FH Completed/ Subject 50,000 Q2 2026 New build.
to Planning
---- --------------------- ----------- --------- ------------------------
Shoreham FH Contracts exchanged/ 54,000 Q4 2022 New build
subject to planning
---- --------------------- ----------- --------- ------------------------
London- Paddington LH Completed/ Planning 13,000 Q2 2023 Conversion of
Park West granted Basement Car Park-
Satellite store
to existing Paddington
store
---- --------------------- ----------- --------- ------------------------
London- Paddington LH Contracts exchanged/ 8,500 Q1 2022 Extension of existing
Marble Arch planning granted site via conversion
of adjacent basement
car park
---- --------------------- ----------- --------- ------------------------
London- Wimbledon FH Contracts exchanged/ 9,000 Q2 2022 Extension of existing
subject to planning storage site
1,000
office
---- --------------------- ----------- --------- ------------------------
Southend FH Completed/ Planning 10,100 Q4 2021 Extension of existing
granted site
---- --------------------- ----------- --------- ------------------------
London- Edgware FH Completed/ Planning 22,900 Q4 2021 Extension of existing
granted site
---- --------------------- ----------- --------- ------------------------
Paris- La Défense FH Completed/ Subject 44,000 Q2 2025 Facility within
to Planning mixed use development
---- --------------------- ----------- --------- ------------------------
Paris- Southern FH Contracts exchanged/ 55,000 Q3 2022 New build
Paris subject to Planning
---- --------------------- ----------- --------- ------------------------
Northern Madrid FH Contracts exchanged/ 48,000 Q3 2022 Conversion of
subject to Planning existing building
---- --------------------- ----------- --------- ------------------------
Southern Madrid FH Contracts exchanged/ 29,000 Q3 2022 Conversion of
Planning granted existing building
---- --------------------- ----------- --------- ------------------------
Central Barcelona FH Contracts exchanged/ 13,500 Q1 2022 Conversion of
1 Planning granted existing building
---- --------------------- ----------- --------- ------------------------
Central Barcelona LH Contracts exchanged/ 19,000 Q2 2022 Conversion of
2 subject to Planning existing building
---- --------------------- ----------- --------- ------------------------
Northern Barcelona FH Contracts exchanged/ 36,300 Q3 2022 Conversion of
subject to Planning existing building
---- --------------------- ----------- --------- ------------------------
South Barcelona FH Contracts exchanged/ 30,000 Q4 2022 Conversion of
subject to Planning existing building
---- --------------------- ----------- --------- ------------------------
Total Pipeline MLA c 702k
----------- -----------------------------------
Total Further Capex c GBP100m.
----------- -----------------------------------
Ends
Notes
1 - Where reported numbers are presented either to the nearest
GBP01.m or to the nearest 10,000 sq ft, the effect of rounding may
impact the reported percentage change.
2 - 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).
3 - Q3 2020 is the quarter ended 31 July 2020.
4 - 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.
5 - Closing occupancy excludes offices but includes 14,000 sq ft
of bulk tenancy as at 31 July 2021 (31 July 2020 - 14,000 sq
ft).
6 - MLA is Maximum Lettable Area.
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 both 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.
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, Bryn Woodward
Notes to editors:
-- Safestore is the UK's largest self-storage group with 161 stores at 31 July 2021, comprising
128 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) and 29 wholly owned stores in the Paris region and four stores
in Barcelona. In addition, the Group operates nine stores in the Netherlands and six 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 densest UK and French markets.
-- Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en
Plus" ("UPP") in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic
Vecchioli.
-- Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250
index in October 2015.
-- The Group provides storage to around 80,000 personal and business customers.
-- As at 31 July 2021, Safestore had a maximum lettable area ("MLA") of 6.983 million sq ft (excluding
the expansion pipeline stores, and the Carlyle Joint Venture) of which 5.985 million sq ft
was occupied. In addition, Safestore has a development pipeline of a further 702,000 sq ft
of MLA.
-- Safestore employs around 700 people in the UK, Paris and Barcelona.
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