TIDMSAFE
RNS Number : 6868Y
Safestore Holdings plc
08 September 2022
8 September 2022
Safestore Holdings plc
Third quarter trading update for the period 1 May 2022 to 31
July 2022
Strong trading continues in Q3 2022
Group Operating Performance Q3 2022 Q3 2021(2) Change Change-
CER(1)
--------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 54.7 47.6 14.9% 15.1%
Revenue (GBP'm)- year-to-date
(YTD) 155.7 135.7 14.7% 15.6%
Closing Occupancy (let sq ft-
million)(3) 6.461 5.985 8.0% n/a
Closing Occupancy (% of MLA) 84.3% 85.7% -1.4ppts n/a
Maximum Lettable Area (MLA)(4) 7.670 6.980 9.9% n/a
Average Storage Rate (GBP) 28.59 26.26 8.9% 9.1%
Average Storage Rate (GBP)- YTD 29.11 26.43 10.1% 11.1%
Group Operating Performance- Q3 2022 Q3 2021(2) Change Change-
like-for-like(3) CER(1)
--------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 51.7 47.3 9.3% 9.5%
Revenue (GBP'm)- year-to-date
(YTD) 150.8 134.8 11.9% 12.8%
Closing Occupancy (let sq ft-
million)(4) 5.889 5.944 -0.9% n/a
Closing Occupancy (% of MLA)(5) 85.7% 87.0% -1.3ppts n/a
Average Occupancy (let sq ft-
million) 5.788 5.864 -1.3% n/a
Average Occupancy (let sq ft-
million)- YTD 5.702 5.618 1.5% n/a
Average Storage Rate (GBP) 29.73 26.34 12.9% 13.1%
Average Storage Rate (GBP)- YTD 29.70 26.50 12.1% 13.0%
Highlights
-- Group revenue for the quarter in CER(1) up 15.1% and 14.9% at actual exchange rates
-- Like-for-like(5) Group revenue for the quarter in CER(1) up 9.5%
o UK up 10.7%
o Paris up 4.8%
o Spain up 8.3%
-- Like-for-like(5) average rate up 13.1% in CER(1)
o UK up 15.7%
o Paris up 4.8%
o Spain up 5.6%
-- Like-for-like(5) occupancy at 85.7% (2021: 87.0%)
o UK down 1.7ppts at 85.8% (2021: 87.5%)
o Paris up 0.1ppts at 84.8% (2021 84.7%)
o Spain up 1.2ppts at 91.6% (2021: 90.4%)
-- Acquired two new freehold development sites in South West
Madrid and Almere (Netherlands), adding 91,000 sq ft of MLA to the
pipeline.
-- Central Barcelona store and Wimbledon London store extension
now open together adding 22,000 sq ft of MLA
-- Group Property Pipeline of 1,073,000 sq ft representing c. 14% of the existing portfolio
Frederic Vecchioli, Chief Executive Officer, commented:
"I am pleased to report that the Group's strong first half
performance has continued into the third quarter of 2022, driven by
excellent revenue growth in the UK market, strong performances in
our Parisian and Spanish businesses, and four months' contribution
from our recently acquired Benelux business. Like-for-like
enquiries in August 2022, the first month of our final quarter, are
at record levels.
"Our new store pipeline represents c.14% of our existing
portfolio's MLA, which we anticipate will continue to grow over the
coming months. Our strong and flexible balance sheet has
significant funding capacity, allowing us to continue to consider
strategic, value-accretive investments as and when they arise.
"We have delivered a strong occupancy performance over recent
years, yet we still have 1.2m square feet of fully invested
currently unlet space in our UK, Paris, Spain and Benelux markets
(not including our pipeline). Our most significant upside
opportunity is from filling this space and that remains our
priority. The business has demonstrated its inherent resilience in
recent times and, with our recent and current trading, allows me to
look forward with confidence. The first three quarters' trading
performance has provided us with a strong base for the rest of the
financial year and we anticipate that the business will deliver
Adjusted Diluted EPRA Earnings per Share(7) for 2021/22 in line
with the previous guidance of at least 47p".
Business Highlights
UK Trading Performance
UK Operating Performance Q3 2022 Q3 2021(2) Change
--------------------------------- -------- ----------- ---------
Revenue (GBP'm) 41.3 36.9 11.9%
Revenue (GBP'm)- year-to-date
(YTD) 120.2 104.1 15.5%
Closing Occupancy (let sq ft-
million)(3) 4.768 4.775 -0.1%
Closing Occupancy (% of MLA) 85.2% 86.6% -1.4ppts
Maximum Lettable Area (MLA)(4) 5.600 5.510 1.6%
Average Storage Rate (GBP) 28.50 24.68 15.5%
Average Storage Rate (GBP)- YTD 28.52 24.67 15.6%
UK Operating Performance- like-for-like(3) Q3 2022 Q3 2021(2) Change
-------------------------------------------- -------- ----------- ---------
Revenue (GBP'm) 40.5 36.6 10.7%
Revenue (GBP'm)- year-to-date
(YTD) 118.3 103.2 14.6%
Closing Occupancy (let sq ft-
million)(4) 4.677 4.734 -1.2%
Closing Occupancy (% of MLA)(5) 85.8% 87.5% -1.7ppts
Average Occupancy (let sq ft-
million) 4.590 4.671 -1.7%
Average Occupancy (let sq ft-
million)- YTD 4.521 4.456 1.5%
Average Storage Rate (GBP) 28.65 24.76 15.7%
Average Storage Rate (GBP)- YTD 28.67 24.74 15.9%
The UK performed strongly in the third quarter with total
revenue up 11.9% and like-for-like revenue up 10.7%. For the
year-to-date, like-for-like revenue was up 14.6% compared to
2021.
The UK result was driven by an excellent like-for-like average
rate which remained strong and was up 15.7% on the third quarter of
2021.
As expected, the third quarter like-for-like occupancy inflow of
203,000 sq ft was strong but down on the exceptionally strong
inflow of 307,000 in the third quarter of 2021. As a result,
like-for-like closing occupancy was 85.8% (2021: 87.5%). The number
of new lets in the quarter was up on Q3 2021, albeit the average
size was lower. The addition of 40,000 sq ft of additional MLA
arising from the opening of recent store extensions at London
Edgware, Southend, and London Paddington Marble Arch had the impact
of diluting like-for-like closing occupancy by 0.7ppts.
Total revenue for the year-to-date grew by 15.5% reflecting our
strong like-for-like performance, the 2021 store opening in
Birmingham Middleway offset by the closure of Birmingham Digbeth,
the December 2021 acquisition of Christchurch, and the December
2021 opening of our London Bow store. All acquisitions, new store
developments and extensions are performing in line with or ahead of
their business cases.
Paris Trading Performance
Paris Operating Performance Q3 2022 Q3 2021(2) Change
--------------------------------- -------- ----------- ---------
Revenue (EUR'm) 12.33 11.66 5.7%
Revenue (EUR'm)- year-to-date
(YTD) 36.13 33.77 7.0%
Closing Occupancy (let sq ft-
million)(3) 1.128 1.112 1.4%
Closing Occupancy (% of MLA) 82.8% 81.7% +1.1ppts
Maximum Lettable Area (MLA)(4) 1.360 1.360 -
Average Storage Rate (EUR) 40.16 38.42 4.5%
Average Storage Rate (EUR)- YTD 40.31 38.59 4.5%
Revenue (GBP'm) 10.5 10.0 5.0%
Revenue (GBP'm)- year-to-date
(YTD) 30.5 29.5 3.4%
Paris Operating Performance- Q3 2022 Q3 2021(2) Change
like-for-like(3)
--------------------------------- -------- ----------- ---------
Revenue (EUR'm) 12.22 11.66 4.8%
Revenue (EUR'm)- year-to-date
(YTD) 35.90 33.77 6.3%
Closing Occupancy (let sq ft-
million)(4) 1.113 1.112 0.1%
Closing Occupancy (% of MLA)(5) 84.8% 84.7% +0.1ppts
Average Occupancy (let sq ft-
million) 1.101 1.095 0.5%
Average Occupancy (let sq ft-
million)- YTD 1.087 1.066 2.0%
Average Storage Rate (EUR) 40.29 38.43 4.8%
Average Storage Rate (EUR)- YTD 40.39 38.59 4.7%
Revenue (GBP'm) 10.4 10.0 4.0%
Revenue (GBP'm)- year-to-date
(YTD) 30.3 29.5 2.7%
Our Paris business had a good quarter growing total revenue by
5.7% year-on-year. Like-for-like occupancy performance was robust
for the quarter with closing occupancy at 84.8%, up 0.1ppts
compared to Q3 2021. The like-for-like average rate, which was up
by 4.8%, showed good momentum and combined with average occupancy
growth of 0.5%, drove like-for-like revenue growth of 4.8%. Our
like-for-like average storage rate also grew sequentially by 0.7%
compared to the second quarter of our 2022 Financial Year.
Total revenue for the year-to-date grew by 7.0% reflecting the
strong like-for-like performance and the 2021 opening of our
Magenta store.
Sterling equivalent revenue was impacted by the 0.9%
strengthening in the Sterling: Euro exchange rate for the quarter
compared to Q3 2021. As a result, sterling equivalent total and
like-for-like revenue grew by 5.0% and 4.0% respectively compared
to Q3 2021.
Spain Trading Performance(6)
Spain Operating Performance- Q3 2022 Q3 2021(2) Change
total and like-for-like(3)
--------------------------------- -------- ----------- --------
Revenue (EUR'm) 0.91 0.84 8.3%
Revenue (EUR'm)- year-to-date
(YTD) 2.63 2.41 9.1%
Closing Occupancy (let sq ft-
million)(3) 0.099 0.098 1.0%
Closing Occupancy (% of MLA) 91.6% 90.4% 1.2ppts
Maximum Lettable Area (MLA)(4) 0.110 0.110 -
Average Storage Rate (EUR) 33.19 31.43 5.6%
Average Storage Rate (EUR)- YTD 33.78 31.55 7.1%
Revenue (GBP'm) 0.8 0.7 14.3%
Revenue (GBP'm)- year-to-date
(YTD) 2.2 2.1 4.8%
Our Spain business, which is now considered like-for-like, saw a
strong 5,400 sq ft inflow of occupancy (2021: 1,000 sq ft) and
ended the quarter strongly at a closing occupancy of 91.6% (2021:
90.4%). Average occupancy was down 1.0% but the average storage
rate grew by 5.6% to EUR33.19 compared to EUR31.43 for Q3 2021.
Ancillary revenue growth was strong and total revenue grew by 8.3%
compared to Q3 2021.
Benelux Trading Performance
Our Netherlands and Belgium businesses were acquired on 30 March
2022 and, therefore, contributed four month's revenue (EUR3.3m) in
the period.
Collectively, the businesses saw 21,000 sq ft of occupancy
inflows in the third quarter and our Netherlands business ended the
period with a closing occupancy of 75.5% whilst our Belgian
business had an 81.6% occupancy.
Property Pipeline
Openings of New Stores and Extensions in the period
Spain- opening of Central Barcelona 1 store
In January 2021, the Group exchanged contracts on a freehold
building in a densely populated area in central Barcelona. The
conversion of the existing building into a 12,500 sq ft MLA
self-storage facility is complete and the store is now open.
UK Extension completed- Wimbledon
In April 2021, we exchanged contracts on the acquisition of a
0.5-acre site adjacent to our existing London Wimbledon store (MLA
58,800 sq ft). We completed this transaction in December 2021 and
construction was completed just after the period end. The existing
reception area has been relocated to a more prominent and visible
roadside location and a further 9,000 sq ft of storage capacity and
1,000 sq ft of offices have been added. The Wimbledon store's peak
occupancy, prior to the Covid-19 pandemic, was 92%.
Development Sites
Spain
In August 2022, the Group exchanged contracts on a freehold
building in a commercial and industrial area of South West Madrid.
Subject to planning and completion, we will convert the existing
building into a 46,800 sq ft MLA self-storage facility. It is
anticipated that the site will open in the fourth quarter of
2023.
The Spanish business now has five open stores and a pipeline
consisting of a further seven stores amounting to c.265,000 sq ft
of MLA.
Netherlands
The Group has completed the acquisition of a freehold site in
Almere, a city with a population of 214,000 which is 20 minutes'
drive from Amsterdam. Subject to planning, we will convert the two
existing buildings on the site into a 44,500 sq ft MLA self-storage
facility. It is anticipated that the site will open in the second
quarter of 2023.
Store Extensions
Paris
The Group plans to redevelop and extend its Pyrénées store in
Paris. The extension will add 22,200 sq ft and is planned to open
in the fourth quarter of 2023. As of July 2022, the store occupancy
was 95%.
Pipeline Summary
Our pipeline of c. 1,073,000 sq ft represents c. 14% of our
existing property portfolio.
Store FH/ Status MLA sq Target Other
LH ft Opening
London - Lea FH Completed/ planning 76,500 Q1 2025 New build.
Bridge granted GBP170k pa of
rental income
prior to opening
---- ---------------------- ----------- --------- -----------------------------
London - Old FH Completed/ subject 76,500 TBC New build.
Kent Road to planning Rental income
receivable prior
to opening
---- ---------------------- ----------- --------- -----------------------------
London - Woodford FH Contracts exchanged/ 65,000 Q4 2025 New build
planning granted
---- ---------------------- ----------- --------- -----------------------------
London - Morden FH Completed/ planning 52,000 Q1 2023 New build
granted / under
construction
---- ---------------------- ----------- --------- -----------------------------
London - Bermondsey FH Completed/ subject 50,000 Q4 2026 New build
to planning
---- ---------------------- ----------- --------- -----------------------------
Shoreham FH Contracts exchanged/ 54,000 Q2 2023 New build
subject to planning
---- ---------------------- ----------- --------- -----------------------------
London - Paddington LH Completed/ planning 13,000 Q3 2023 Conversion of
Park West granted basement car park-satellite
store to existing
Paddington store
---- ---------------------- ----------- --------- -----------------------------
Wigan FH Completed/ conversion 42,700 Q2 2023 Conversion of
commenced existing warehouse
---- ---------------------- ----------- --------- -----------------------------
Winchester FH Planning granted/ 11,000 Q4 2022 Extension of existing
under construction site
---- ---------------------- ----------- --------- -----------------------------
Paris - La Défense FH Planning granted 44,000 Q2 2025 Facility within
mixed use development
---- ---------------------- ----------- --------- -----------------------------
Paris - Southern FH Planning granted 55,000 Q3 2022 New build
Paris
---- ---------------------- ----------- --------- -----------------------------
Paris - West FH Contracts exchanged/ 56,000 Q4 2023 New Build
1 subject to planning
---- ---------------------- ----------- --------- -----------------------------
Paris - West FH Contracts exchanged/ 20,000 Q4 2023 New Build
2 subject to planning
---- ---------------------- ----------- --------- -----------------------------
Paris - West FH Contracts exchanged/ 58,000 Q3 2023 New Build
3 subject to planning
---- ---------------------- ----------- --------- -----------------------------
Paris- Pyrenees LH Completed 22,200 Q4 2023 Extension of Existing
Extension Site
---- ---------------------- ----------- --------- -----------------------------
Northern Madrid FH Completed/ planning 53,000 Q1 2023 Conversion of
granted existing building
---- ---------------------- ----------- --------- -----------------------------
Southern Madrid FH Completed/ planning 32,000 Q1 2023 Conversion of
granted existing building
---- ---------------------- ----------- --------- -----------------------------
Eastern Madrid FH Contracts exchanged/ 46,800 Q3 2023 Conversion of
subject to planning existing building
---- ---------------------- ----------- --------- -----------------------------
South West Madrid FH Contracts exchanged/ 46,800 Q4 2023 Conversion of
subject to planning existing building
---- ---------------------- ----------- --------- -----------------------------
Central Barcelona LH Contracts exchanged/ 24,700 Q4 2023 Conversion of
2 subject to planning existing building
---- ---------------------- ----------- --------- -----------------------------
Northern Barcelona FH Contracts exchanged/ 41,500 Q2 2023 Conversion of
subject to planning existing building
---- ---------------------- ----------- --------- -----------------------------
South Barcelona FH Contracts exchanged/ 30,000 Q2 2023 Conversion of
planning granted existing building
---- ---------------------- ----------- --------- -----------------------------
Amersfoort - FH Contracts exchanged/ 58,000 Q4 2023 New build
Netherlands subject to planning
---- ---------------------- ----------- --------- -----------------------------
Almere- Netherlands Completed/ subject 44,500 Q2 2023 Conversion of
to planning existing building
---- ---------------------- ----------- --------- -----------------------------
Total Pipeline MLA c. 1,073k
----------- ----------------------------------------
Total Further Capex c. GBP110m
----------- ----------------------------------------
Lease Extensions and Assignments
During the period we extended the lease on our Exeter store in
the UK. The lease will now continue until February 2045 with
tenant-only break clauses in 2035 and 2040. A six-month rent-free
period was agreed as part of the renegotiation.
Site Disposal
In April 2021 we opened our Birmingham Middleway store (58,000
sq ft MLA) and closed our Digbeth store (44,500 sq ft MLA) shortly
thereafter. Customers were relocated to the bigger, better located
new store. At the time, we stated that we intended to sell the
Digbeth site.
We are pleased to confirm that the Digbeth site sale was
completed in August 2022. The proceeds received funded the entire
acquisition and construction of the Middleway site. As of July
2022, the Middleway site was 81% occupied.
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 - Q3 2021 is the quarter ended 31 July 2021.
3 - Occupancy excludes offices but includes bulk tenancy. As of
31 July 2022, closing occupancy includes 14,000 sq ft of bulk
tenancy (31 July 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 Spain 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 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.
This announcement contains inside information.
Enquiries
Safestore Holdings PLC
Frederic Vecchioli, Chief Executive via Instinctif Partners
Officer
Andy Jones, Chief Financial
Officer
www.safestore.com
Instinctif Partners
Guy Scarborough/ Bryn Woodward 07917 178920/ 07739 342009
Notes to Editors
-- Safestore is the UK's largest self-storage group with 178
stores on 31 July 2022, comprising 130 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, 4 stores in Spain, 9
stores in the Netherlands and 6 stores in Belgium.
-- 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 90,000 personal and business customers.
-- As of 31 July 2022, Safestore had a maximum lettable area
("MLA") of 7.667 million sq ft (excluding the expansion pipeline
stores) of which 6.461 million sq ft was occupied.
-- Safestore employs around 750 people in the UK, Paris, Spain, the Netherlands and Belgium.
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END
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