TIDMSAFE
RNS Number : 9247B
Safestore Holdings plc
17 February 2022
17 February 2022
Safestore Holdings plc
First quarter trading update for the period 1 November 2021 to
31 January 2022
Strong trading momentum continues into Q1 2022
Group Operating Performance Q1 2022 Q1 2021 Change Change-
(2) CER (1)
-------------------------------- -------- -------- --------- ---------
Revenue (GBP'm) 50.9 44.4 14.6% 16.0%
Closing Occupancy (let sq ft-
million)(3) 5.708 5.506 3.7% n/a
Maximum Lettable Area (MLA)(4) 7.067 6.871 2.8% n/a
Closing Occupancy (% of MLA) 80.8% 80.1% +0.7ppts n/a
Average Storage Rate (GBP) 29.55 26.47 11.6% 13.3%
Group Operating Performance- Q1 2022 Q1 2021 Change Change-
like-for-like(3) (2) CER (1)
--------------------------------- -------- -------- --------- ---------
Revenue (GBP'm) 50.4 44.0 14.5% 16.1%
Closing Occupancy (let sq ft-
million)(4) 5.641 5.472 3.1% n/a
Closing Occupancy (% of MLA)(5) 82.1% 80.2% +1.9ppts n/a
Average Occupancy (let sq ft-
million) 5.663 5.444 4.0% n/a
Average Storage Rate (GBP) 29.67 26.53 11.8% 13.5%
Highlights
-- Group revenue for the quarter in CER(1) up 16.0% and 14.6% at actual exchange rates.
-- Like-for-like(5) Group revenue for the quarter in CER(1) up 16.1%
o UK up 19.0%
o Paris up 7.8%
o Spain up 10.4%
-- Like-for-like(5) occupancy up 1.9ppts at 82.1% (2021: 80.2%)
o UK up 2.0ppts at 82.1% (2021: 80.1%)
o Paris up 2.0ppts at 81.8% (2021 79.8%)
o Spain down 2.9ppts at 85.7% (2021: 88.6%)
-- Like-for-like (5) average rate up 13.5% in CER(1) .
o UK up 16.9%
o Paris up 4.6%
o Spain up 7.7%
-- Planning permission granted on London Lea Bridge site.
-- 40,000 sq ft store in Nijmegen in the Netherlands opened in January 2022.
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report that the strong trading momentum we saw
in our 2021 financial year has continued into the first quarter of
2022. This was driven by an excellent UK result, complemented by
strong performances from Paris and Spain.
"Our new store pipeline represents over 10% of our existing
portfolio's MLA and we anticipate the pipeline will continue to
grow over the coming months. Our strong and flexible balance sheet
has significant funding capacity, allowing us to continue to
consider and swiftly execute strategic, value-accretive investments
as and when they arise.
"Alongside our attractive development pipeline we continue to
prioritise the significant upside from filling our 1.4m square feet
of fully invested, currently unlet space. The business has
demonstrated its inherent resilience in recent times and, with our
recent and current trading, allows us 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 anticipate that the business
delivers Adjusted Diluted EPRA Earnings per Share (7) for 2021/22,
in line with the consensus of analysts' forecasts (9) ".
Business highlights
UK Trading Performance
UK Operating Performance Q1 2022 Q1 2021 Change
(2)
-------------------------------- -------- -------- ---------
Revenue (GBP'm) 39.9 33.6 18.8%
Closing Occupancy (let sq ft-
million)(3) 4.536 4.366 3.9%
Maximum Lettable Area (MLA)(4) 5.597 5.453 2.6%
Closing Occupancy (% of MLA) 81.1% 80.1% +1.0ppts
Average Storage Rate (GBP) 28.41 24.37 16.6%
UK Operating Performance- like-for-like(3) Q1 2022 Q1 2021 Change
(2)
-------------------------------------------- -------- -------- ---------
Revenue (GBP'm) 39.5 33.2 19.0%
Closing Occupancy (let sq ft-
million)(4) 4.475 4.332 3.3%
Closing Occupancy (% of MLA)(5) 82.1% 80.1% +2.0ppts
Average Occupancy (let sq ft-
million) 4.496 4.309 4.3%
Average Storage Rate (GBP) 28.55 24.43 16.9%
Trading momentum in the UK has been strong in the first quarter
of 2022. Like-for-like revenue growth of 19.0% was driven by a good
average occupancy performance (+4.3%) and a continued strong
storage rate performance (+16.9%).
We have seen a return to a more normal cycle of trading in the
current financial year. In the first quarter, as anticipated, we
have seen an occupancy outflow which is typical for the period (our
low season). As a result, the like-for-like closing occupancy, as
measured by sq ft occupied, was up 3.3% and like-for-like closing
occupancy at the end of the quarter as a percentage of MLA was up
2.0ppts at 82.1% (2021: 80.1%). Our like-for-like average storage
rate also grew sequentially by 4.8% compared to the fourth quarter
of our 2021 Financial Year.
Demand continues to be strong with enquiry levels up c. 4%
compared to Q1 2021 which was in itself a strong quarter. The
enquiry levels were up c. 34% compared to Q1 2020 and up c. 60%
compared to Q1 2019.
Total revenue also grew by 18.8% and included the 2021 opening
of our Birmingham Middleway and London Bow stores, which were
offset by the closure of our Birmingham South store.
Paris Trading Performance
Paris Operating Performance Q1 2022 Q1 2021 Change
(2)
-------------------------------- -------- -------- ---------
Revenue (EUR'm) 12.15 11.23 8.2%
Closing Occupancy (let sq ft-
million)(3) 1.079 1.046 3.2%
Maximum Lettable Area (MLA)(4) 1.362 1.312 3.8%
Closing Occupancy (% of MLA) 79.2% 79.8% -0.6ppts
Average Storage Rate (EUR) 40.84 39.10 4.5%
Revenue (GBP'm) 10.26 10.09 1.7%
Paris Operating Performance- Q1 2022 Q1 2021 Change
like-for-like(3) (2)
--------------------------------- -------- -------- ---------
Revenue (EUR'm) 12.11 11.23 7.8%
Closing Occupancy (let sq ft-
million)(4) 1.073 1.046 2.6%
Closing Occupancy (% of MLA)(5) 81.8% 79.8% +2.0ppts
Average Occupancy (let sq ft-
million) 1.075 1.041 3.3%
Average Storage Rate (EUR)(8) 40.88 39.10 4.6%
Revenue (GBP'm) 10.22 10.09 1.3%
Our Paris business had a good quarter growing total revenue by
8.2% compared to Q1 2021.
We have seen a return to a more normal cycle of trading in the
current financial year with a modest occupancy outflow in the
period which is typical for the first quarter (our low season). As
a result, like-for-like closing occupancy for the quarter was
81.8%, up 2.0ppts compared to Q1 2021. The like-for-like average
storage rate, which was up by 4.6%, showed good momentum and
combined with average occupancy growth of 3.3%, drove like-for-like
revenue growth of 7.8%. Our like-for-like average storage rate also
grew sequentially by 2.8% compared to the fourth quarter of our
2021 Financial Year.
Demand in Paris is also strong with enquiry levels, on a
like-for-like basis, broadly flat compared to Q1 2021 and up c. 20%
compared to Q1 2020 and up 26% compared to Q1 2019.
Sterling equivalent revenue was impacted by the 6.4%
strengthening in the Sterling: Euro exchange rate for the quarter
compared to Q1 2021. As a result, Sterling equivalent total and
like-for-like revenue grew by 1.7% and 1.3% respectively compared
to Q1 2021.
Spain Trading Performance(6)
Spain Operating Performance- Q1 2022 Q1 2021 Change
total and like-for-like (2)
-------------------------------- -------- -------- ---------
Revenue (EUR'm) 0.85 0.77 10.4%
Closing Occupancy (let sq ft-
thousands)(3) 92.8 93.9 (1.2%)
Maximum Lettable Area (MLA)(4) 108.3 106.0 2.2%
Closing Occupancy (% of MLA) 85.7% 88.6% -2.9ppts
Average Storage Rate (EUR) 33.47 31.09 7.7%
Revenue (GBP'm) 0.72 0.69 4.3%
Our Spanish business, which is now considered like-for-like,
delivered overall like-for-like revenue growth of 10.4% compared to
Q1 2021. A small seasonal outflow of occupancy ended the quarter at
a closing occupancy of 85.7% (2021: 88.6%). However, the average
storage rate grew by 7.7% to EUR33.47 compared to EUR31.09 for Q1
2021 and ancillary revenue growth was strong.
Sterling equivalent revenue was impacted by the 6.4%
strengthening in the Sterling: Euro exchange rate for the quarter
compared to Q1 2021. As a result, sterling equivalent total and
like-for-like revenue grew by 4.3% compared to Q1 2021.
Property Pipeline
Our property pipeline has not changed since our 13 January 2022
Preliminary Results Announcement with the exception of our London
Lea Bridge store being granted planning permission in the
intervening period.
Our pipeline of c. 732,000 sq ft represents over 10% of our
existing property portfolio.
Store FH/ Status MLA sq Target Other
LH ft Opening
London- Lea Bridge FH Completed/ planning 76,500 Q1 2025 New build.
granted 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
Park West granted of basement
car park-satellite
store to
existing
Paddington
store
---- --------------------- ---------- --------- --------------------
London- Wimbledon FH Completed/ planning 9,000 Q2 2022 Extension
granted storage of existing
1,000 site
office
---- --------------------- ---------- --------- --------------------
Winchester FH Planning granted 11,000 Q4 2022 Extension
of existing
site
---- --------------------- ---------- --------- --------------------
Paris- La Défense FH Completed/ planning 44,000 Q2 2025 Facility
granted within 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 Q4 2022 Conversion
granted of existing
building
---- --------------------- ---------- --------- --------------------
Southern Madrid FH Completed/ planning 29,000 Q4 2022 Conversion
granted of existing
building
---- --------------------- ---------- --------- --------------------
Eastern Madrid FH Contracts exchanged/ 49,000 Q2 2023 Conversion
subject to planning of existing
building
---- --------------------- ---------- --------- --------------------
Central Barcelona FH Completed/ planning 13,500 Q3 2022 Conversion
1 granted of existing
building
---- --------------------- ---------- --------- --------------------
Central Barcelona LH Contracts exchanged/ 19,000 Q4 2022 Conversion
2 subject to planning of existing
building
---- --------------------- ---------- --------- --------------------
Northern Barcelona FH Contracts exchanged/ 36,300 Q1 2023 Conversion
subject to planning of existing
building
---- --------------------- ---------- --------- --------------------
South Barcelona FH Contracts exchanged/ 30,000 Q4 2022 Conversion
planning granted of existing
building
---- --------------------- ---------- --------- --------------------
Total Pipeline MLA c. 732k
---------- -------------------------------
Total Further Capex c. GBP90m
---------- -------------------------------
Joint Venture with Carlyle
As previously reported, in June 2021, the joint venture acquired
a freehold site with an existing building in Nijmegen in the
Netherlands. Nijmegen has a population of 177,000 and the site is
well located on a main road with good visibility and access.
Safestore provided 20% of the equity required to acquire and
develop the site which will have an MLA of c. 40,000 sq ft. We are
pleased to report that the store opened in January 2022.
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 2021 is the quarter ended 31 January 2021.
3 - Occupancy excludes offices but includes bulk tenancy. As at
31 January 2022, closing occupancy includes 14,000 sq ft of bulk
tenancy (31 January 2021: 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 and
consists of the same four stores as were originally acquired.
Consequently the business is now considered like-for-like.
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 average like-for-like storage rate variance reported for
November and December 2021 in the Group's Results announcement for
the year-ended 31 October 2021 (released 13 January 2022) for Paris
was stated as +1.5%. For the purposes of this calculation only, the
like-for-like average storage occupancy for the prior year's two
month period was understated by 2.7% and the prior year
like-for-like average storage rate used in the variance calculation
was therefore overstated. This has now been amended and the
variance should have been reported as +4.3%. Please note that this
misstatement was isolated to the above calculation only and the
revenue reported for November and December 2021 and the revenue and
rate reported in January 2021 for the November and December 2020
period were correctly stated.
9 - The analyst consensus for Adjusted Diluted EPRA EPS for the
current financial year, based on the forecasts of ten analysts, is
44.8p.The ten analyst forecasts range from 42.4p to 47.6p.
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
Bryn Woodward
Notes to editors:
* Safestore is the UK's largest self-storage group with
162 stores at 31 January 2022, comprising 129 wholly
owned stores in the UK (including 72 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 4 stores in Barcelona. In addition, the Group
operates 10 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 80,000 personal
and business customers.
* As at 31 January 2022, Safestore had a maximum
lettable area ("MLA") of 7.067 million sq ft
(excluding the expansion pipeline stores, and the
Carlyle Joint Venture) of which 5.708 million sq ft
was occupied.
* Safestore employs around 700 people in the UK, Paris
and Barcelona.
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