TIDMSAFE
RNS Number : 6268L
Safestore Holdings plc
07 September 2023
7 September 2023
Safestore Holdings plc
Third quarter trading update for the period 1 May 2023 to 31
July 2023
Further strategic progress and continued revenue growth
Group Operating Performance Q3 2023 Q3 2022 Change Change-
(2) CER (1)
--------------------------------- -------- -------- --------- ---------
Revenue (GBP'm) 56.5 54.7 3.3% 2.9%
Revenue (GBP'm)- year-to-date
(YTD) 166.6 155.7 7.0% 6.0%
Closing Occupancy (let sq ft-
million) (3) 6.389 6.461 -1.1% n/a
Closing Occupancy (% of MLA) 79.1% 84.3% -5.2ppts n/a
Maximum Lettable Area (MLA)(4) 8.080 7.670 5.3% n/a
Average Storage Rate (GBP) 29.68 28.59 3.8% 3.5%
Average Storage Rate (GBP)- YTD 30.27 29.11 4.0% 3.1%
REVPAF(9) (GBP)- YTD 27.56 27.15 1.5% 0.7%
Group Operating Performance- Q3 2023 Q3 2022 Change Change-
like-for-like(3) (2) CER (1)
--------------------------------- -------- -------- ---------- ---------
Revenue (GBP'm) 52.7 52.0 1.3% 1.2%
Revenue (GBP'm)- year-to-date
(YTD) 156.2 151.4 3.2% 2.4%
Closing Occupancy (let sq ft-
million) (4) 5.744 5.952 -3.5% n/a
Closing Occupancy (% of MLA)(5) 81.8% 85.3% -3.5%ppts n/a
Average Occupancy (let sq ft-
million) 5.643 5.846 -3.5% n/a
Average Occupancy (let sq ft-
million)- YTD 5.568 5.753 -3.2% n/a
Average Storage Rate (GBP) 31.04 29.62 4.8% 4.5%
Average Storage Rate (GBP)- YTD 31.57 29.60 6.7% 5.8%
REVPAF(9) (GBP)- YTD 29.76 29.01 2.6% 1.8%
Highlights
-- Group revenue for the quarter in CER(1) up 2.9% and 3.3% at actual exchange rates
-- Like-for-like(5) Group revenue for the quarter in CER(1) up 1.2%
o UK up 0.7%
o Paris up 3.2%
o Spain down 2.2%
-- Like-for-like (5) average rate for the quarter up 4.5% in CER(1)
o UK up 4.4%
o Paris up 4.3%
o Spain up 5.6%
-- Like-for-like(5) closing occupancy at 81.8% (2022: 85.3%)
o UK down 4.0ppts at 81.8% (2022: 85.8%)
o Paris down 0.7ppts at 82.1% (2022 82.8%)
o Spain down 8.2ppts at 82.8% (2022: 91.0%)
-- Two new store openings in the period in Eastern Madrid and
South Barcelona with a combined MLA of 81,000 sq ft.
-- Three new sites secured in Watford and Eastleigh in the UK
and in Pamplona in Spain adding 132,000 sq ft of MLA to the
pipeline.
-- Two new extensions of existing sites added at London-
Holloway and Paris- Poissy adding 21,500 sq ft of MLA.
-- Group Property Pipeline of 1.523m sq ft representing c. 19% of the existing portfolio.
Frederic Vecchioli, Chief Executive Officer, commented:
"After very strong comparative quarters in the last two years
(18.6% like-for-like revenue growth in 2021 and 9.5% in 2022), I am
pleased to report that the group has delivered further
like-for-like revenue growth as well as what we believe to be
industry leading REVPAF in our key markets. Whilst we have seen
some softness in the UK's business customer segment, reflective of
a weaker macroeconomic environment, trading with our domestic
customers and the remainder of the business has been robust.
We have opened a further two new stores in the period in Spain
and added five new stores or extensions in the UK, Paris and Spain
to our pipeline which represents 19% of our existing portfolio's
MLA. We anticipate that our 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 execute strategic investments as and when they arise. Whilst
the pipeline and associated financing will be dilutive to earnings
in the near term, the returns generated by new stores are reliable
and we are confident that it will be significantly value-accretive
as the new sites mature.
Alongside our attractive development pipeline, we continue to
prioritise the significant upside from filling our 1.7m square feet
of fully invested, currently unlet space. The business has
demonstrated its inherent resilience in recent times and we look to
the future with confidence.
For 2023, we anticipate that the business will deliver Adjusted
Diluted EPRA Earnings per Share(7) towards the lower end of the
range of analysts' forecasts(8) of 47.3p to 50.3p".
Business Highlights
UK Trading Performance
UK Operating Performance Q3 2023 Q3 2022 Change
(2)
--------------------------------- -------- -------- ---------
Revenue (GBP'm) 42.1 41.3 1.9%
Revenue (GBP'm)- year-to-date
(YTD) 123.8 120.2 3.0%
Closing Occupancy (let sq ft-
million) (3) 4.611 4.768 -3.3%
Closing Occupancy (% of MLA) 80.5% 85.2% -4.7ppts
Maximum Lettable Area (MLA)(4) 5.730 5.600 2.3%
Average Storage Rate (GBP) 29.73 28.50 4.3%
Average Storage Rate (GBP)- YTD 30.24 28.52 6.0%
REVPAF(9) (GBP)- YTD 28.89 28.71 0.6%
UK Operating Performance- like-for-like(3) Q3 2023 Q3 2022 Change
(2)
-------------------------------------------- -------- -------- ---------
Revenue (GBP'm) 41.0 40.7 0.7%
Revenue (GBP'm)- year-to-date
(YTD) 121.1 118.7 2.0%
Closing Occupancy (let sq ft-
million) (4) 4.536 4.725 -4.0%
Closing Occupancy (% of MLA)(5) 81.8% 85.8% -4.0ppts
Average Occupancy (let sq ft-
million) 4.451 4.635 -4.0%
Average Occupancy (let sq ft-
million)- YTD 4.383 4.563 -3.9%
Average Storage Rate (GBP) 29.80 28.54 4.4%
Average Storage Rate (GBP)- YTD 30.30 28.56 6.1%
REVPAF(9) (GBP)- YTD 29.18 28.81 1.3%
The UK built on an extremely strong third quarter in 2022
(like-for-like revenue growth of 10.7%) with like-for-like revenue
growth of 0.7% and total revenue growth of 1.9% in the quarter.
Like-for-like average storage rate was up 4.4% in the quarter
compared to the prior year and offset an average occupancy decline
of 4.0% as the Group looks to find an appropriate balance of rate
growth and occupancy performance in order to maximise revenue.
The like-for-like occupancy inflow in the quarter was 185,000 sq
ft (Q3 2022; 210,000 sq ft) resulting in closing like-for-like
occupancy of 81.8% (Q3 2022: 85.8%).
Over the last two quarters our domestic customer performance has
been robust whilst business customer demand has been softer. In Q3
2023 the year-on-year decline in the like-for-like occupancy inflow
was driven by business customers whilst we saw a year-on-year
improvement from our domestic customers. Two thirds of the decline
in our like-for-like closing occupancy, compared to Q3 2022, was
driven by business customers. As at Q3 2023, the like-for-like
occupancy in sq ft is down 4.0% with domestic occupancy down 2.2%
and business occupancy down 6.5%.
REVPAF has grown by 1.3% for the year-to-date and was flat in
the quarter compared to Q3 2022.
Enquiry levels for the third quarter, whilst behind the same
period in 2022, remained significantly ahead of the pre-pandemic
period.
Paris Trading Performance
Paris Operating Performance- Q3 2023 Q3 2022 Change
Total and like-for-like(3) (2)
--------------------------------- -------- -------- ---------
Revenue (EUR'm) 12.72 12.33 3.2%
Revenue (EUR'm)- year-to-date
(YTD) 37.53 36.13 3.9%
Closing Occupancy (let sq ft-
million) (3) 1.118 1.128 -0.9%
Closing Occupancy (% of MLA) 82.1% 82.8% -0.7ppts
Average Occupancy (let sq ft-
million) 1.104 1.114 -0.9%
Average Occupancy (let sq ft-
million)- YTD 1.098 1.096 0.2%
Maximum Lettable Area (MLA)(4) 1.360 1.360 -
Average Storage Rate (EUR) 41.87 40.16 4.3%
Average Storage Rate (EUR)- YTD 41.97 40.31 4.1%
REVPAF(9) (EUR)- YTD 36.85 35.47 3.9%
Revenue (GBP'm) 10.9 10.5 3.8%
Revenue (GBP'm)- year-to-date
(YTD) 32.7 30.5 7.2%
Our Paris business had a solid quarter growing total and
like-for-like revenue by 3.2% year-on-year.
Like-for-like occupancy performance was slightly down on Q3 2022
with closing occupancy at 82.1%, down 0.7ppts compared to Q3 2022.
The occupancy inflow in the quarter was 27,000 sq ft (Q3 2022;
30,000 sq ft).
The like-for-like average rate performed well and was up by 4.3%
which offset the slight decline in occupancy leading to
like-for-like revenue growth of 3.2%.
Sterling equivalent like-for-like revenue was impacted by the
1.2% weakening in the Sterling:Euro exchange rate for the quarter
compared to Q3 2022. As a result, sterling equivalent total and
like-for-like revenue grew by 3.8% compared to Q3 2022.
Our industry leading REVPAF has grown by 3.9% in the
year-to-date.
Enquiry levels for the third quarter were broadly in line with
the same period in 2022.
Spain Trading Performance(6)
Spain Operating Performance Q3 2023 Q3 2022 Change
(2)
--------------------------------- -------- -------- ----------
Revenue (EUR'm) 1.11 0.91 22.0%
Revenue (EUR'm)- year-to-date
(YTD) 3.06 2.63 16.3%
Closing Occupancy (let sq ft-
million) (3) 0.133 0.099 34.3%
Closing Occupancy (% of MLA) 40.3% 91.6% -51.3ppts
Maximum Lettable Area (MLA)(4) 0.330 0.110 200.0%
Average Storage Rate (EUR) 30.43 33.19 -8.3%
Average Storage Rate (EUR)- YTD 33.51 33.78 -0.8%
REVPAF(9) (EUR)- YTD 12.45 32.58 -61.8%
Revenue (GBP'm) 1.0 0.8 25.0%
Revenue (GBP'm)- year-to-date
(YTD) 2.7 2.2 22.7%
Spain Operating Performance- Q3 2023 Q3 2022 Change
like-for-like(3) (2)
--------------------------------- -------- -------- ----------
Revenue (EUR'm) 0.89 0.91 -2.2%
Revenue (EUR'm)- year-to-date
(YTD) 2.69 2.63 2.3%
Closing Occupancy (let sq ft-
million) (3) 0.090 0.099 -9.1%
Closing Occupancy (% of MLA) 82.8% 91.0% -8.2%ppts
Average Occupancy (let sq ft-
million) 0.088 0.097 -9.3%
Average Occupancy (let sq ft-
million)- YTD 0.087 0.094 -7.4%
Average Storage Rate (EUR) 35.10 33.24 5.6%
Average Storage Rate (EUR)- YTD 36.48 33.80 7.9%
REVPAF(9) (EUR)- YTD 33.18 32.57 1.9%
Revenue (GBP'm) 0.8 0.8 -
Revenue (GBP'm)- year-to-date
(YTD) 2.4 2.2 9.1%
In the quarter, our Spanish business grew revenue by 22.0% in
total with like-for-like revenue declining by 2.2%.
The like-for-like average storage rate grew by 5.6% to EUR35.10
compared to EUR33.24 for Q3 2022. This increase in the
like-for-like average rate in addition to an increase in
like-for-like ancillary revenues of 8.5% were offset by a reduction
in like-for-like average occupancy of 9.3% to drive the
like-for-like revenue decline of 2.2%.
Like-for-like occupancy in Barcelona has initially been diluted
by the new Central Barcelona 2 and Barcelona 3 stores having opened
in close proximity and within the same catchment area as an
existing store. Management believes that, given the limited supply
in central Barcelona, once the absorption phase has been passed,
the stores will generate higher revenue and profits and provide
significant long-term value.
The reduction in total occupancy to 40.3% reflects the dilutive
effect of recent store openings.
Sterling equivalent like-for-like revenue was impacted by the
1.2% weakening in the Sterling:Euro exchange rate for the quarter
compared to Q3 2022. As a result, sterling equivalent total and
like-for-like revenue was flat compared to Q3 2022.
Following the acquisition of four stores in Barcelona at the end
of 2019, the business has built scale quickly by opening six new
sites and adding a pipeline of six stores across Barcelona, Madrid
and Pamplona. We look with confidence to the continued expansion of
the 16-store portfolio.
Benelux Trading Performance
Our Netherlands and Belgium businesses, acquired on 30 March
2022, contributed EUR2.89m revenue in the period and EUR8.36m in
the year-to-date.
The Benelux businesses grew revenue by 17.0% compared to the
third quarter of 2022 and the businesses ended the period with a
combined closing occupancy of 79.8%.
For the year-to-date, total revenue has increased by EUR5.1m
compared to Q3 2022.
The business was originally established in 2019 with the
acquisition of six stores and was subsequently developed into a
16-store portfolio with a pipeline of five additional stores,
further details of which are set out below.
Property Pipeline Developments
Openings of New Stores and Extensions in the period
Open 2023 FH/LH Opening Date MLA Other
---------------- ------ ------------- ------- -----------
New Developments
-------------------------------------------------------------
Eastern Madrid FH Q3 2023 50,000 Conversion
South Barcelona FH Q3 2023 30,600 Conversion
Two new freehold stores in Eastern Madrid and South Barcelona
were opened in the period adding 80,600 sq ft of MLA. The Spanish
business now operates ten stores and has a pipeline of a further
six.
New Development Sites
Three new sites have been added to the development pipeline in
the third quarter.
Eastleigh
We have added a new freehold site at Eastleigh in Hampshire.
This store will operate as a satellite to our Winchester and two
Southampton stores. The conversion of an existing building is
underway and we anticipate opening a 14,000 sq ft store in
2024.
Watford
The Group has been working on the acquisition of a prominent
freehold site on the A4178 close to central Watford for over two
years. The acquisition has now completed and, subject to planning,
we anticipate opening a 46,750 sq ft new build store in 2025.
Pamplona (Spain)
The Group's strategy in Spain is to develop clusters of stores
in key cities and regions. The Basque Country has a population of
two million people and enjoys a dynamic and healthy economy. We
have acquired our first site in this region in Pamplona which
itself has a population of 209,000 people in the city and 355,000
in the wider metropolitan area.
Subject to planning, the Group will convert an existing building
into a 71,000 sq ft freehold store which, we anticipate, will open
in 2025.
New Store Extensions
During the quarter we have identified the opportunity to extend
two stores via the acquisition of additional buildings or the
extension of existing sites. These are expected to further enhance
our return on investment at these locations.
The extensions at Holloway in London and Poissy in Paris will
collectively add 21,500 sq ft and will open in 2024.
Pipeline Summary
We are leveraging our effective and scalable operating platform
to increase our expansion plans across both the UK and continental
Europe. This approach has resulted in the largest development
pipeline in our history which can be funded from our existing
financial resources. This pipeline of c. 1.5m sq ft represents c.
19% of our existing property portfolio.
As illustrated in our half year results presentation, the
pipeline and associated financing is dilutive to earnings in the
near term but, as the stores mature, we are confident that
significant earnings and value accretion will be realised.
Opening 2023 FH/LH Status* MLA Other
-------------------------- ------ -------- ------- ----------------------
Redevelopments and Extensions
-----------------------------------------------------------------------------
London- Paddington LH C 8,400 Extension
Marble Arch
New Developments
-----------------------------------------------------------------------------
Ellesmere Port FH C, UC 55,000 New build
Central Barcelona LH C 14,700 Conversion
3
Amersfoort- Netherlands FH C, UC 58,000 New build
Opening 2024
-------------------------- ------ -------- ------- ----------------------
Redevelopments and Extensions
-----------------------------------------------------------------------------
London- Holloway FH C, STP 9,500 Extension
Paris- Poissy FH C, UC 12,000 Extension
Paris- Pyrenees LH C, UC 22,200 Extension
New Developments
-----------------------------------------------------------------------------
London- Paddington FH C, UC 13,000 Conversion, Satellite
Park West
London- Lea Bridge FH C, UC 76,500 New build
Eastleigh LH C, UC 14,000 Conversion, Satellite
London- Romford FH C, STP 41,000 New build
Paris- South Paris FH C, UC 55,000 New build
Paris- West 3 FH C, UC 58,000 New build
Paris- East 1 FH CE, PG 60,000 Conversion
Paris- North West FH C, STP 54,000 Conversion
1
South West Madrid FH C, STP 46,800 Conversion
Southern Madrid 2 FH C, UC 68,800 Conversion
Central Barcelona LH C, PG 20,400 Conversion
2
North East Madrid FH CE, STP 66,000 Conversion
Almere- Netherlands FH C, UC 44,500 Conversion
Aalsmeer- Netherlands FH C, UC 48,400 New build
Rotterdam- Netherlands FH C, UC 71,000 New build
Opening 2025
-----------------------------------------------------------------------------
New Developments
-----------------------------------------------------------------------------
London- Woodford FH C, PG 76,000 New build
London- Walton FH C, PG 20,700 Conversion
London- Watford FH CE, STP 46,750 New build
London- Wembley FH C, STP 49,000 New build
Paris- West 1 FH CE, PG 56,000 New build
Paris- La Défense FH C, UC 44,000 Mixed use facility
Pamplona FH C, STP 71,000 Conversion
Amsterdam- Netherlands FH CE, STP 61,400 New build
Opening Beyond 2025
-----------------------------------------------------------------------------
New Developments
-----------------------------------------------------------------------------
London- Old Kent Road FH C, STP 76,500 New build
London- Bermondsey FH C, STP 50,000 New build
Shoreham FH CE, STP 54,000 New build
Total Pipeline MLA (let sq ft- million) c. 1.523
-------------------------------------------- -------------------------------
Total Outstanding CAPEX (GBP'm) c. 135.0
-------------------------------------------- -------------------------------
*C = completed, CE = contracts exchanged, STP = subject to
planning, PG = planning granted, UC = under construction
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 2022 is the quarter ended 31 July 2022.
3 - Occupancy excludes offices but includes bulk tenancy. As of
31 July 2023, closing occupancy includes 18,000 sq ft of bulk
tenancy (31 July 2022: 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 with the
four originally acquired stores 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 analyst consensus for Adjusted Diluted EPRA EPS for the
current financial year, based on the forecasts of thirteen
analysts, is 49.1p. The thirteen analyst forecasts range from 47.3p
to 50.3p
9 - REVPAF is an alternative performance measure used by the
business. REVPAF stands for Revenue per Available Square Foot and
is calculated by dividing revenue for the period by weighted
average available square feet for the same period.
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 187
stores on 31 July 2023, comprising 132 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, 10 stores in Spain, 10
stores in the Netherlands and 6 stores in Belgium. In addition, the
Group operates 7 stores in Germany 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 90,000 personal and business customers.
-- As of 31 July 2023, Safestore had a maximum lettable area
("MLA") of 8.080 million sq ft (excluding the expansion pipeline
stores) of which 6.389 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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