TIDMSAFE
RNS Number : 5828S
Safestore Holdings plc
17 November 2021
17 November 2021
Safestore Holdings plc
Fourth quarter trading update for the period 1 August 2021 to 31
October 2021
Excellent final quarter with accelerating growth completes a
record breaking year
Group Operating Performance Q4 2021 Q4 2020 Change Change-
(3) CER (2)
--------------------------------- -------- -------- --------- ---------
Revenue (GBP'm) 51.1 42.8 19.4% 21.0%
Revenue (GBP'm)- year-to-date
(YTD) 186.8 162.3 15.1% 15.5%
Closing Occupancy (let sq ft-
million)(5) 5.883 5.454 7.9% n/a
Closing Occupancy (% of MLA)(6) 84.5% 79.5% +5.0ppts n/a
Average Storage Rate (GBP) 28.42 26.21 8.4% 10.1%
Average Storage Rate (GBP)-
YTD 26.95 26.44 1.9% 2.3%
Group Operating Performance- Q4 2021 Q4 2020 Change Change-
like-for-like(4) (3) CER (2)
--------------------------------- -------- -------- --------- ---------
Storage Revenue (GBP'm) 40.7 34.1 19.4% 21.1%
Ancillary Revenues (GBP'm) 8.2 7.3 12.3% 12.3%
Revenue (GBP'm) 48.9 41.4 18.1% 19.6%
Storage Revenue (GBP'm)- YTD 148.1 129.9 14.0% 14.4%
Ancillary Revenues (GBP'm)-
YTD 30.6 27.7 10.5% 10.8%
Revenue (GBP'm)- YTD 178.7 157.6 13.4% 13.8%
Closing Occupancy (let sq ft-
million)(5) 5.598 5.249 6.6% n/a
Closing Occupancy (% of MLA)(6) 85.1% 80.1% +5.0ppts n/a
Average Occupancy (let sq ft-
million) 5.644 5.170 9.2% n/a
Average Occupancy- YTD (let
sq ft- million) 5.474 4.897 11.8% n/a
Average Storage Rate (GBP) 28.61 26.20 9.2% 10.8%
Average Storage Rate (GBP)-
YTD 27.06 26.51 2.1% 2.4%
Highlights
-- Strong momentum in final quarter with Group revenue up 21.0%
and for the full year up 15.5% in CER(1)
-- Like-for-like(3) Group revenue for the year in CER(1) up 13.8%
o UK up 16.8%
o Paris up 4.3%
-- Strong occupancy performance with Group like-for-like closing
occupancy of 85.1% (up 5.0ppts on Q4 2020).
-- Group like-for-like average occupancy for the year up 9.2%
-- Group like-for-like average storage rate for final quarter up
10.8% and up 2.4% in CER(1) for the year
-- New freehold development site acquired at London- Old Kent
Road which will add 76,500sq ft of MLA
-- Planning permissions granted for previously announced 48,000
sq ft MLA Northern Madrid and 30,000 sq ft MLA Southern Barcelona
sites
-- Planning permission granted for extension of Winchester store adding 11,000 sq ft of MLA
-- Property Pipeline now at 800,000 sq ft of MLA
-- Full year earnings to 31 October 2021 anticipated to be
slightly ahead of previous guidance of 39.5p to 40p of Adjusted
Diluted EPRA Earnings per Share (7)
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report a strong final quarter to conclude what
was an exceptional and record result for the year. I would like to
thank our staff for continuing to perform excellently throughout
the period particularly given the challenges presented by
COVID-19.
"All geographies have performed strongly and have shown good
momentum in the final quarter. The UK business has traded
particularly well this quarter, with closing occupancy up by 6.0
ppts at 85.4% and exceptionally strong growth in average rate in
the final three months driving like-for-like revenue growth of
16.8% for the year. Our Paris business saw pleasing average rate
improvement in the final quarter and, combined with 4.8 ppts of
like-for-like occupancy growth for the year (to 83.6%), grew
like-for-like revenue by 4.3%. Our Spanish business, in its first
full year of ownership, also performed ahead of our
expectations.
"Our property pipeline continues to grow and we now have 800,000
sq ft planned to open over the coming years in the UK, Paris and
Spain, representing growth of 11% in the size of our estate. In
November 2021, we added a further freehold London site to our
pipeline in the Old Kent Road area. Our pipeline will be financed
by our free cashflow and existing debt facilities and we anticipate
further additions over the coming months.
"The Company has weathered the pandemic well and continues to be
in a very strong position. Despite the current high levels of
occupancy, the business still has 1.1m square feet of currently
unlet space in its existing fully invested estate in addition to
0.8m square feet in its pipeline. This represents a significant
organic growth opportunity in what remains a fragmented and growing
market. Our leading market positions in the UK and Paris, combined
with our balance sheet strength and resilient business model, leave
us well positioned for the future . The Company anticipates that
earnings for the full year will be slightly ahead of previous
guidance of 39.5 to 40p of Adjusted Diluted EPRA earnings per
share."
Safestore will announce its results for the year ended 31
October 2021 on Thursday, 13 January 2022.
Business highlights
UK Trading Performance
UK Operating Performance Q4 2021 Q4 2020 Change
(3)
--------------------------------- -------- -------- ---------
Revenue (GBP'm) 40.0 31.9 25.4%
Revenue (GBP'm)- YTD 144.1 121.3 18.8%
Closing Occupancy (let sq ft-
million)(5) 4.690 4.325 8.4%
Closing Occupancy (% of MLA)(6) 85.4% 79.4% +6.0ppts
Average Storage Rate (GBP) 27.12 23.81 13.9%
Average Storage Rate (GBP)-
YTD 25.32 24.37 3.9%
UK Operating Performance- like-for-like(4) Q4 2021 Q4 2020 Change
(3)
-------------------------------------------- -------- -------- ---------
Storage Revenue (GBP'm) 31.2 24.7 26.3%
Ancillary Revenue (GBP'm) 7.3 6.5 12.3%
Revenue (GBP'm) 38.5 31.2 23.4%
Storage Revenue (GBP'm)- YTD 111.7 94.4 18.3%
Ancillary Revenue (GBP'm)- YTD 27.1 24.4 11.1%
Revenue (GBP'm)- YTD 138.8 118.8 16.8%
Closing Occupancy (let sq ft-
million)(5) 4.501 4.215 6.8%
Closing Occupancy (% of MLA)(6) 85.4% 80.4% +5.0ppts
Average Occupancy (let sq ft-
million) 4.535 4.137 9.6%
Average Occupancy- YTD (let
sq ft- million) 4.397 3.882 13.3%
Average Storage Rate (GBP) 27.32 23.79 14.8%
Average Storage Rate (GBP)-
YTD 25.41 24.32 4.5%
The UK's fourth quarter performance was exceptional with the
business growing total revenue by 25.4% and like-for-like revenue
by 23.4%. Momentum was strong in the quarter with like-for-like
storage rates up 14.8% compared to the prior year as a result of
the cumulative effect of pricing actions taken throughout the year
as well as reduced discounting. In addition, average occupancy was
up 9.6% in the quarter.
In a reversion to more normal cyclical trading patterns, the
business saw a like-for-like occupancy outflow of 96,000 sq ft in
the quarter. In the prior year, reflecting a trading rebound after
the COVID-19 lockdowns of Q2 and Q3, the business added 245,000 sq
ft of occupancy on a like-for-like basis. Over the year the
business added occupancy of 286,000 sq ft on a like-for-like basis
(2020: 289,000 sq ft). As a result, Q4 like-for-like closing
occupancy, at 85.4%, increased by 5.0ppts compared to the prior
year.
The strong Q4 average storage rate performance resulted in the
like-for-like average rate for the year increasing by 4.5% compared
to Q4 2020.
Total revenue grew by 18.8% for the full year. This reflected
like-for-like growth of 16.8%, 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.
Paris Trading Performance
Paris Operating Performance Q4 2021 Q4 2020 Change
(3)
---------------------------------- -------- -------- ---------
Revenue (EUR'm) 12.2 11.3 8.0%
Revenue (EUR'm)- full year 46.0 44.1 4.3%
Closing Occupancy (let sq ft-
million)(4) 1.100 1.034 6.4%
Closing Occupancy (% of MLA)(5) 80.7% 78.8% +1.9ppts
Average Storage Rate (EUR) 39.76 39.58 0.5%
Average Storage Rate (EUR)- full
year 38.90 39.64 -1.9%
Revenue (GBP'm) 10.4 10.2 2.0%
Revenue (GBP'm)- full year 39.9 38.8 2.8%
Paris Operating Performance- Q4 2021 Q4 2020 Change
like-for-like(4) (3)
---------------------------------- -------- -------- ---------
Storage Revenue (EUR'm) 11.12 10.27 8.3%
Ancillary Revenues (EUR'm) 1.05 0.99 6.1%
Revenue (EUR'm) 12.17 11.26 8.1%
Storage Revenue (EUR'm)- full
year 41.90 40.23 4.2%
Ancillary Revenues (EUR'm)- full
year 4.04 3.82 5.8%
Revenue (EUR'm)- full year 45.94 44.05 4.3%
Closing Occupancy (let sq ft-
million)(4) 1.097 1.034 6.1%
Closing Occupancy (% of MLA)(5) 83.6% 78.8% +4.8ppts
Average Occupancy (let sq ft-
million) 1.109 1.033 7.4%
Average Occupancy- full year
(let sq ft-million) 1.077 1.015 6.1%
Average Storage Rate (EUR) 39.76 39.58 0.5%
Average Storage Rate (EUR)- full
year 38.90 39.64 -1.9%
Revenue (GBP'm) 10.4 10.2 2.0%
Revenue (GBP'm)- full year 39.9 38.8 2.8%
Paris had another good quarter growing revenue by 8.0% compared
to last year.
On a like-for-like basis, the business grew storage revenue by
8.3% for the quarter and by 4.2% for the full year. This was driven
by average occupancy growth of 6.1% for the year with an average
rate movement of -1.9%. Average rate has been improving over the
period and was up 0.5% for the quarter.
Paris saw a return to more normal cyclical trading patterns.
Like-for-like occupancy reduced by 14,000 sq ft for the quarter
(2020: increase of 4,000 sq ft) resulting in like-for-like closing
occupancy of 83.6%, up 4.8ppts compared to the prior year . Over
the year, occupancy in Paris grew by 63,000 sq ft (2020: increase
of 19,000 sq ft).
The Sterling-Euro exchange rate for the year was 1.1516, 1.4%
stronger than the prior year (2020: 1.1356). As a result, there was
a small foreign exchange impact on the translation of Paris
revenues which were up 2.8% for the year in Sterling.
Spain Trading Performance
Our Spanish business, which was acquired in December 2019 and
is, therefore, not considered like-for-like, grew revenue by 12.5%
in the quarter to EUR0.9m. Revenue for the year was EUR3.3m (2020:
EUR2.6m for ten months). Closing occupancy in sq ft was down 2.1%
compared to Q4 2020 whilst average rate in the year-to-date grew by
6.4% to EUR32.25 (2020: EUR30.32) with ancillary revenues improving
strongly. Closing occupancy was 86.0% (2020: 90.0%).
Property Pipeline
Our pipeline of future development opportunities remains strong
and gives us further confidence for our future growth plans.
New development site- London Old Kent Road
In November 2021, the Group completed the acquisition of a 1.2
acre freehold site off the Old Kent Road in the London Borough of
Southwark in South East London. Subject to planning, we hope to
open a c. 76,500 sq ft MLA store in due course. Existing tenants on
the site will provide a rental income in the meantime.
Store Extension- Winchester
In September 2021 the Group received planning permission to
extend its Winchester store by 11,000 sq ft. The existing store has
an MLA of 42,000 sq ft and has been more than 90% occupied for the
last twelve months. It is anticipated that the extension will be
open in the fourth calendar quarter of 2022 and that there will be
minimal impact on day-to-day operations of the store during
construction.
Completion of Acquisition- Lea Bridge
In April 2021, the Group exchanged contracts on a freehold 1.3
acre site at Lea Bridge in North East London. The acquisition of
the site has now been completed and we plan to open a 76,500 sq ft
MLA store in 2024 as the leases for existing tenants on the site
have up to two years to run. Rental income of approximately GBP170k
per annum is currently received on this site.
Planning permissions- Spain
Our Northern Madrid (48,000 sq ft of MLA) and our Southern
Barcelona (30,000 sq ft MLA) stores announced previously, were
granted planning permission in the period and are expected to open
in the third and fourth quarters of 2022 respectively.
The Group now has a property pipeline of 800,000 sq ft of MLA
with a total remaining capital expenditure requirement of c. GBP95m
over the next four years, which the Group intends to self-finance
through free cash-flow and the Group's existing debt facilities.
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/ construction 74,000 Q1 2022 Conversion of
underway existing building
---- ------------------------ ---------- --------- ------------------------
London- Lea Bridge FH Completed/ Subject 76,500 Q1 2025 New build.
to Planning GBP170k pa of
rental income
prior to opening.
---- ------------------------ ---------- --------- ------------------------
London- Old Kent FH Completed/ Subject 76,500 TBC New build.
Road to Planning Rental Income
receivable prior
to opening.
---- ------------------------ ---------- --------- ------------------------
London- Woodford FH Contracts exchanged/ 65,000 Q4 2025 New build.
subject to planning
---- ------------------------ ---------- --------- ------------------------
London- Morden FH Completed/ Planning 52,000 Q1 2023 New build.
granted
---- ------------------------ ---------- --------- ------------------------
London- Bermondsey FH Completed/ Subject 50,000 Q4 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 Completed/ construction 8,500 Q1 2022 Extension of existing
Marble Arch underway site via conversion
of adjacent basement
car park
---- ------------------------ ---------- --------- ------------------------
London- Wimbledon FH Contracts exchanged/ 9,000 Q2 2022 Extension of existing
planning granted storage site
1,000
office
---- ------------------------ ---------- --------- ------------------------
Southend FH Completion of 10,100 Q4 2021 Extension of existing
build imminent site
---- ------------------------ ---------- --------- ------------------------
London- Edgware FH Completion of 22,900 Q4 2021 Extension of existing
build imminent site
---- ------------------------ ---------- --------- ------------------------
Winchester FH Planning granted 11,000 Q4 2022 Extension of existing
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 Completed/ Planning 48,000 Q3 2022 Conversion of
granted existing building
---- ------------------------ ---------- --------- ------------------------
Southern Madrid FH Completed/ Planning 29,000 Q3 2022 Conversion of
granted existing building
---- ------------------------ ---------- --------- ------------------------
Central Barcelona FH Completed/ Planning 13,500 Q1 2022 Conversion of
1 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
planning granted existing building
---- ------------------------ ---------- --------- ------------------------
Total Pipeline MLA c 800k
---------- -----------------------------------
Total Further Capex c. GBP95m
---------- -----------------------------------
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 - Q4 2020 is the quarter ended 31 October 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 October 2021 (31 October 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 October 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), 29 wholly owned stores in the Paris region and four
stores in Barcelona. In addition, the Group operates eight 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 October 2021, Safestore had a maximum lettable area
("ML A") of 6.960 million sq ft (excluding the expansion pipeline
stores, and the Carlyle Joint Venture) of which 5.883 million sq ft
was occupied.
-- Safestore employs around 700 people in the UK, Paris and Barcelona.
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END
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