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Big Yellow Group PLC Results for the Six Months ended 30 September 2021

22/11/2021 4:29pm

UK Regulatory (RNS & others)


Big Yellow (LSE:BYG)
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TIDMBYG

RNS Number : 1672T

Big Yellow Group PLC

22 November 2021

22 November 2021

Big Yellow Group PLC

("Big Yellow", "the Group" or "the Company")

Results for the Six Months ended 30 September 2021

Strong first half results driven by a combination of occupancy and rate growth

 
                                              Six months        Six months 
  Financial metrics                                ended             ended           Change 
                                            30 September      30 September 
                                                    2021              2020 
 Revenue                                 GBP81.8 million   GBP65.8 million              24% 
 Store revenue (1)                       GBP80.8 million   GBP64.4 million              25% 
 Like-for-like store revenue (1,2)       GBP73.7 million   GBP64.3 million              15% 
 Store EBITDA (1)                        GBP57.7 million   GBP44.5 million              30% 
 Adjusted profit before tax (1)          GBP46.9 million   GBP36.5 million              28% 
 EPRA earnings per share (1)                  25.7 pence        20.9 pence              23% 
 Interim dividend per share                   20.6 pence        17.0 pence              21% 
 Statutory metrics 
                                                GBP254.9 
 Profit before tax                               million   GBP59.9 million             326% 
 Cash flow from operating activities 
  (after net finance costs)              GBP51.8 million   GBP42.3 million              22% 
 Basic earnings per share                    142.0 pence        34.4 pence             313% 
 Store metrics - Big Yellow stores 
  Store Maximum Lettable Area ("MLA") 
  (1)                                          4,984,000         4,822,000               3% 
 Closing occupancy (sq ft) (1)                 4,472,000         4,106,000               9% 
 Occupancy growth in the period (sq 
  ft) (1)                                        271,000           325,000   (54,000 sq ft) 
 Closing occupancy (1)                             89.7%             85.2%         4.5 ppts 
 Occupancy - like-for-like stores 
  (1,2)                                            91.3%             87.3%         4.0 ppts 
 Average achieved net rent per sq 
  ft (1)                                        GBP29.52          GBP28.01             5.4% 
 Closing net rent per sq ft (1)                 GBP30.43          GBP27.75             9.7% 
--------------------------------------  ----------------  ----------------  --------------- 
 Store metrics - Armadillo stores 
 Store Maximum Lettable Area ("MLA") 
  (1)                                          1,078,000         1,081,000                - 
 Closing occupancy (sq ft) (1)                   955,000           868,000              10% 
 Occupancy growth in the period (sq 
  ft) (1)                                         47,000            69,000   (22,000 sq ft) 
 Closing occupancy (1)                             88.6%             80.3%         8.3 ppts 
 Average achieved net rent per sq 
  ft (1)                                        GBP19.14          GBP17.71             8.1% 
 Closing net rent per sq ft (1)                 GBP19.85          GBP17.50            13.4% 
--------------------------------------  ----------------  ----------------  --------------- 
 

(1) See note 19 for glossary of terms

(2) The like-for-like metrics exclude stores opened in the current and preceding financial years, and the Armadillo stores

First Half Highlights

-- Like-for-like occupancy increase of 3.9 ppts from 1 April 2021 and up 4.0 ppts from same time last year to 91.3% (September 2020: 87.3%)

-- Big Yellow stores average achieved net rent per sq ft increased by 5.4% period on period, closing net rent up by 9.7% from September 2020

-- Revenue growth for the period was 24%, with like-for-like store revenue up by 15%, driven by gains in occupancy and the improvement in average rate

-- Cash flow from operating activities (after net finance costs) increased by 22% to GBP51.8 million

   --     Adjusted profit before tax up 28% to GBP46.9 million, with EPRA earnings per share up 23% 
   --     20.6 pence per share interim dividend declared, an increase of 21% 

-- Our 54,000 sq ft MLA Uxbridge store opened at the end of June 2021, and has had a strong start with current occupancy of 52%

-- Acquisition of new development sites in Kentish Town and West Kensington taking pipeline to 14 development sites of approximately 1.12 million sq ft (18.5% of current MLA)

-- Planning consent granted for new stores in Slough (90,000 sq ft MLA) and Newcastle (60,000 sq ft MLA). Nine of the 14 sites now have planning, representing approximately 60% of the storage capacity of the pipeline

-- Placing of 7.8 million shares in June 2021 raising GBP97.6 million (net of expenses) to fund strategic acquisitions of remaining interest in Armadillo and development site in West Kensington. The combined transactions are earnings accretive

-- Increase of GBP100 million in Aviva and M&G loans, increasing our total debt capacity to GBP576.1 million. Current net debt is GBP397.4 million, with available headroom of GBP178.7 million

Commenting, Nicholas Vetch, Executive Chairman, said:

"This first half performance has been very strong, which should flow through into the full year results, absent any material external factors. The self storage sector more generally, and Big Yellow specifically, has benefited from significant occupancy growth since the end of the first lockdown in late May 2020, with the sector now at historically high levels of occupancy. These levels of occupancy have been a key factor in driving earnings and increasing growth in net achieved rents. As we look towards our next financial year, we expect the market to return to a more normalised trading environment.

The increased capacity from the development programme is having a tangible positive impact on profitability, which we expect will continue as we grow our platform."

- Ends -

ABOUT US

Big Yellow is the UK's brand leader in self storage. Big Yellow now operates from a platform of 104 stores, including 25 stores branded as Armadillo Self Storage. We own a further 14 Big Yellow self storage development sites of which nine have planning consent. The current maximum lettable area of the existing platform (including Armadillo) is 6.1 million sq ft. When fully built out the portfolio will provide approximately 7.2 million sq ft of flexible storage space. 98% of our stores and sites by value are held freehold and long leasehold, with the remaining 2% short leasehold.

The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are located in high profile, accessible, main road locations. Our focus on the location and visibility of our stores, with excellent customer service, a market-leading online platform, and significant and increasing investment in sustainability, has created in Big Yellow the most recognised brand name in the UK self storage industry.

For further information, please contact:

Big Yellow Group PLC 01276 477811

Nicholas Vetch, Executive Chairman

Jim Gibson, Chief Executive Officer

John Trotman, Chief Financial Officer

Teneo 020 7260 2700

Ben Foster

Matthew Denham

Big Yellow Group PLC

("Big Yellow", "the Group" or "the Company")

Results for the Six Months ended 30 September 2021

Chairman's Statement

Big Yellow Group PLC, the UK's brand leader in self storage, is pleased to announce its results for the six months ended 30 September 2021.

This first half has seen strong revenue growth, driving earnings growth from a combination of occupancy and improvements in average net rent driven by our yield management systems.

In the quarter to June, we saw excellent occupancy increases, with a record performance in the month of June, attributable in part to the stamp duty holiday. The second quarter and in to October was mixed with short-term customers exiting the business. We expect to see the historical pattern of seasonal occupancy losses in the third quarter, driven by domestic and student short-term customers moving out, before we see a return to growth in the final quarter of the year.

We acquired the 80% of Armadillo that we did not previously own on 1 July 2021, and these results therefore benefit from consolidating the Armadillo business in the second quarter. The Armadillo portfolio has also had a strong performance over the six months in all key metrics. In these results we have separated out the Armadillo performance in the portfolio summary and in the highlights and will also do so at the year end to provide a transparent understanding of the underlying performance of the business.

Financial results

Like-for-like occupancy increased to 91.3% (up 4.0 percentage points from 87.3% at 30 September 2020, and up 3.9 ppts from 1 April 2021). We are pleased to have achieved our long-held target of 90% occupancy.

Revenue for the period was GBP81.8 million (2020: GBP65.8 million), an increase of 24%, with like-for-like store revenue up 15%, driven by a combination of increases in occupancy and average net rent. Like-for-like store revenue excludes new store openings, and the impact of the acquisition of the remaining interest in Armadillo. Armadillo was previously equity accounted as an associate, and from 1 July 2021 is consolidated, as we now own 100%.

We have seen growth in cash flow from operating activities (after net finance costs) of 22% to GBP51.8 million for the period (2020: GBP42.3 million).

The Group's central overhead and operating expense is largely embedded in the business, and therefore increases in revenue should deliver higher growth in earnings. The Group made an adjusted profit before tax in the period of GBP46.9 million, up 28% from GBP36.5 million for the same period last year (see note 6).

Adjusted diluted EPRA earnings per share were 25.7 pence (2020: 20.9 pence), an increase of 23%. The Group's statutory profit before tax for the period was GBP254.9 million, an increase of 326% from GBP59.9 million for the same period last year, due to a higher revaluation gain in the period, reflecting the strong operating performance of the stores.

Dividends

The Group's dividend policy is to distribute 80% of full year adjusted earnings per share. We have declared an interim dividend of 20.6 pence per share, which is an increase of 21% on last year. This has all been declared as Property Income Distribution ("PID").

Acquisition of Armadillo

On 1 July, the Group acquired the remaining 80% interest in Armadillo which it did not previously own from its JV partners. The total consideration was GBP119 million, including underlying debt of GBP50.9 million for a Year One net operating income ("NOI") yield of 7.7% (based on a projected NOI of GBP10.9 million).

The Armadillo portfolio is more regional and as a result the proportion of our revenue derived from London and the South East reduced from 82% to 74%, albeit we expect this weighting to revert over the medium term to over 80%, given our development pipeline is focused largely on London and the South East.

The Armadillo Self Storage brand has been part of the Big Yellow family since 2009 and has 25 stores and 1.1 million sq ft of maximum lettable area. The portfolio is 93% freehold by valuation with an average capacity of 43,000 sq ft (lower than the 63,000 sq ft average for Big Yellow stores). We invested significantly with our joint venture partners in upgrading these stores and improving their day-to-day operations.

We intend to continue to acquire existing freehold regional stores which are of the appropriate quality and size to add to this brand alongside our development of new build Big Yellow stores.

Investment in new capacity

In April, the Group acquired a prime Zone 2 0.9 acre site on Regis Road in Kentish Town, North London for GBP16.5 million. We will be seeking planning permission for a 68,000 sq ft self storage centre on the site.

In June the Group acquired 66 Hammersmith Road, West Kensington, in London for GBP26 million. This is a strategic acquisition adjacent to the Olympia conference centre, a short distance from one of the wealthiest and densest enclaves in London. Subject to planning, the store is currently estimated to open in early 2025, and will provide approximately 175,000 sq ft of space, including 7,000 sq ft of SME space. The total development cost, including land acquisition, is estimated to be GBP73 million, with an expected NOI at stabilisation of GBP5.8 million or 7.9% on cost. West Kensington, when fully constructed and opened, will represent our largest capital investment in an individual store to date.

We opened our 54,000 sq ft store in Uxbridge at the end of June, and initial trading has been strong, with the store's occupancy 52% at the date of these results.

The Group is currently on site at Hayes (anticipated opening January 2022), Hove (Spring 2022), North Kingston (Summer 2022), Harrow (Summer 2022) and Kings Cross (Summer 2023). At Harrow, in addition to the Big Yellow store, we are constructing 104,000 sq ft across 11 industrial units.

Big Yellow now has a pipeline of 14 development sites, nine of which have planning consent. These store openings are expected to add approximately 1.1 million sq ft of storage space to the portfolio, an increased capacity of 18.5%.

The total development cost of these new stores is GBP354 million, including cost incurred to date of GBP182 million, and cost to complete of approximately GBP172 million, with an expected net operating income of GBP31 million, or 8.8% on cost.

Capital structure

The Group's interest cover for the period (expressed as the ratio of cash generated from operations pre working capital movements against interest paid) was 10.6 times (2020: 9.7 times). This is comfortably ahead of our internal minimum interest cover requirement of five times.

Net debt is GBP397.4 million at 30 September 2021, and we have available liquidity of GBP178.7 million and the business continues to generate positive post-dividend cash flow both of which we will use to fund future growth. In addition, the Group has land surplus to its needs which will be realised over the medium term, generating net cash proceeds estimated currently at over GBP100 million. The average cost of debt on drawn facilities is now 2.8% and the marginal cost of RCF bank debt is currently 1.35%.

Outlook

This first half performance has been very strong, which should flow through into the full year results, absent any material external factors. The self storage sector more generally, and Big Yellow specifically, has benefited from significant occupancy growth since the end of the first lockdown in late May 2020, with the sector now at historically high levels of occupancy. These levels of occupancy have been a key factor in driving earnings and increasing growth in net achieved rents. As we look towards our next financial year, we expect the market to return to a more normalised trading environment.

The increased capacity from the development programme is having a tangible positive impact on profitability, which we expect will continue as we grow our platform.

Nicholas Vetch

Executive Chairman

22 November 2021

Business and Financial Review

Operations under Covid-19

At Big Yellow, the health and safety of our team members and customers is our principal priority. Our stores have continued to trade during the pandemic and following the full re-opening in July, we made the decision to retain our protocols around physical barriers, sanitiser use and cleaning in our stores and at head office. Our approach to vaccination has been one of encouragement, particularly given the relatively small teams that we have in our stores, and we believe that a significant proportion of our people are double vaccinated. We are not currently seeing a significant incidence of positive tests within the business, although we were impacted for a short period during the first quarter by the so-called "Pingdemic". We will continue to remain vigilant over the winter months.

Armadillo

As explained above, the Group acquired the remaining interest in Armadillo which it did not previously own on 1 July 2021. Armadillo consists of 25 stores with a maximum lettable area of 1.08 million sq ft. The occupancy of the Armadillo stores on acquisition was 974,000 sq ft (90.2% of MLA).

Store occupancy

Like-for-like occupancy increased by 3.9 ppts from 1 April 2021, and like-for-like store revenue growth for the half year was 15%.

The tables below show the monthly move-in and move-out activity over the half year for the 79 Big Yellow stores:

 
                   Move-ins        Move-ins     %        Move-ins     % 
               period ended    period ended          period ended 
               30 September              30          30 September 
                       2021       September                  2019 
                                       2020 
 April                4,821           2,578    87           5,016   (4) 
 May                  5,698           4,121    38           5,798   (2) 
 June                 9,900           6,861    44           8,136    22 
 July                 6,897           6,689     3           6,883     0 
 August               7,212           7,213     -           7,143     1 
 September            7,416           6,965     6           6,544    13 
-----------  --------------  --------------  ----  --------------  ---- 
 Total               41,944          34,427    22          39,520     6 
 October              6,153           6,339   (3)           5,356    15 
 
 
                  Move-outs       Move-outs    %       Move-outs     % 
               period ended    period ended         period ended 
               30 September    30 September         30 September 
                       2021            2020                 2019 
 April                5,082           2,693   89           4,982     2 
 May                  4,901           3,194   53           4,870     1 
 June                 5,243           4,160   26           4,890     7 
 July                 7,118           5,363   33           6,366    12 
 August               6,684           5,815   15           6,579     2 
 September            9,112           7,950   15           9,575   (5) 
-----------  --------------  --------------  ---  --------------  ---- 
 Total               38,140          29,175   31          37,262     2 
 October              7,830           6,789   15           6,714    17 
 

The first quarter last year saw a significant decrease in the usual level of activity caused by the Spring 2020 lockdown. Move-ins and move-outs are therefore showing a significant increase on last year, with a more normalised move-in picture in the second quarter. In 2020, move-outs took longer to normalise, hence we are showing an increase in move-outs in the second quarter compared to the prior year. We have included the data for 2019 as well, which shows more normalised levels of move-in and move-out growth this year compared to that year.

We saw strong demand from domestic customers in the first quarter in part due to the stamp duty holiday tapering off from 1 July. This resulted in an acceleration of housing-related demand in June. We also saw the return of student demand in June as universities looked to re-open their campuses for conferences. Some of this occupancy growth from both the housing and student sectors was relatively short-term, impacting occupancy performance in the second quarter.

The above table shows an increase in move-outs in July and October, some of which must be related to the gradual tapering off of the stamp duty holiday with key dates being 30 June and 30 September when it ended.

Move-ins for the 25 Armadillo stores for the six months were up 31% on the same period last year, and up 4% on 2019, with move-outs up 40% on 2020, and up 11% on 2019.

The Big Yellow stores grew in occupancy over the six months by 271,000 sq ft. The table below shows the change in occupancy by customer type over the six-month period for the Big Yellow stores:

 
 Customer type     Net sq ft change     Net sq ft change     Net sq ft change 
                    in period ended      in period ended      in period ended 
                  30 September 2021    30 September 2020    30 September 2019 
 Domestic             158,000 sq ft        193,000 sq ft         94,000 sq ft 
                -------------------  -------------------  ------------------- 
 Business              99,000 sq ft        108,000 sq ft       (14,000 sq ft) 
                -------------------  -------------------  ------------------- 
 Student               14,000 sq ft         24,000 sq ft         20,000 sq ft 
                -------------------  -------------------  ------------------- 
 Total                271,000 sq ft        325,000 sq ft        100,000 sq ft 
                -------------------  -------------------  ------------------- 
 

We started the period from a higher occupancy level, and whilst the growth in occupancy for the six months is lower than last year, which was a record six months, it is significantly ahead of 2019, a period affected by political uncertainty around Brexit.

Our business demand has remained robust, driven by online retailers, B2B traders looking for flexible mini-warehousing for e-fulfilment, the shortening of supply chains, and businesses looking to rationalise their other fixed costs of accommodation. Domestic demand has been more volatile, impacted by the stamp duty holiday as already discussed.

Over the six months to 30 September 2021, the Armadillo stores grew in occupancy by 47,000 sq ft, of which 44,000 sq ft of growth was from domestic customers, with small increases in both business and student occupancy.

The average space occupied by business customers at the period end has increased to 185 sq ft (2020: 180 sq ft). Domestic customers occupy on average 60 sq ft (2020: 57 sq ft) and pay on average 22% more in rent per sq ft, however business customers do stay longer and take more space, so represent around 32% of revenue.

The Group's like-for-like store revenue increased by 15% compared to the same period last year, driven by a combination of gains in occupancy and average net rent growth.

Our third quarter is historically the weakest trading quarter where we see a loss in occupancy with a return to growth in the fourth quarter. In the current year, we have lost 149,000 sq ft (2.5% of maximum lettable area "MLA", including Armadillo) since the end of September, compared to a loss of 16,000 sq ft (0.3% of MLA) at the same stage last year, which was unusual and impacted by the timing of Covid lockdowns, and we are now returning to more normal seasonal trading activity.

The 73 established Big Yellow stores are 91.5% occupied compared to 87.7% at the same time last year. The 6 developing Big Yellow stores added 94,000 sq ft of occupancy in the past six months to reach closing occupancy of 66.1%. The 25 Armadillo stores are 88.6% occupied, compared to 80.3% at this time last year. Overall store occupancy was 89.5%.

 
                                                    Occupancy 
                                                       growth 
                                                      from 30 
                                                    September 
                                                         2020 
                                        Occupancy      000 sq       Occupancy                   Occupancy 
                                           growth          ft 
                                          from 31 
                                       March 2021 
                                           000 sq                30 September   Occupancy    30 September 
                                               ft                        2021                        2020 
                                                                       000 sq    31 March          000 sq 
                          Occupancy                                        ft                          ft 
                       30 September                                                  2021 
                               2021 
                                                                                   000 sq 
                                  %                                                    ft 
                      -------------  ------------  ----------  --------------  ----------  -------------- 
73 established 
 Big Yellow stores            91.5%           177         207           4,242       4,065           4,035 
6 developing Big 
 Yellow stores                66.1%            94         159             230         136              71 
All 79 Big Yellow 
 stores                       89.7%           271         366           4,472       4,201           4,106 
                      -------------  ------------              --------------  ----------  -------------- 
25 Armadillo stores           88.6%            47          87             955         908             868 
                      -------------  ------------  ----------  --------------  ----------  -------------- 
All 104 stores                89.5%           318         453           5,427       5,109           4,974 
 

Cash collection

Over 80% of our customers pay by direct debit, and as of the date of these results, the Group has collected 99.8% of its revenue for the first half of the financial year, which compares to 99.6% at this time last year. The bad debt write-off (including costs of disposal) in the period was 0.2% of revenue (2020: 0.2%).

Pricing and rental yield

We offer a headline opening promotion of 50% off for up to the first 8 weeks, and we continue to manage pricing dynamically, taking account of room availability, customer demand and local competition. Our pricing model reduces promotions and increases asking prices where individual units are in scarce supply. This lowering of promotions, coupled with price increases to existing and new customers, leads to an increase in net achieved rents.

As the stores are now at higher levels of occupancy, we are seeing improving growth in net rent per sq ft. The average achieved net rent per sq ft increased for Big Yellow stores by 5.4% compared to the same period last year, with closing net rent up 9.7% compared to 30 September 2020, and up 6.0% from 31 March 2021. The achieved net rent per sq ft grew by 8.1% from last year in the Armadillo stores and closing net rent per sq ft increased by 13.4% from 30 September 2020 and by 8.0% from 31 March 2021.

The table below shows the change in net rent per sq ft for the combined Big Yellow and Armadillo portfolio by average occupancy over the six months (on a non-weighted basis). The analysis excludes our most recent store openings in Camberwell, Bracknell, Battersea, and Uxbridge.

 
 Average occupancy       Number      Net rent per sq ft      Net rent per sq ft 
  in                  of stores     change from 1 April     change from 1 April 
  the six months                   to 30 September 2021    to 30 September 2020 
------------------  -----------  ----------------------  ---------------------- 
 75% to 85%                  19                    6.3%                  (3.3%) 
 85 to 90%                   37                    6.9%                  (1.1%) 
 Above 90%                   44                    8.4%                    0.2% 
 

Security of income

We believe that self storage income is essentially evergreen income with highly defensive characteristics driven from buildings with very low obsolescence risk. Although our contract with our customers is in theory as short as a week, we do not need to rely on contracts for our income security. At 30 September 2021 the average length of stay for existing customers was 27 months (2020: 27 months). For all customers, including those who have moved out of the business throughout the life of the portfolio, the average length of stay increased to 8.9 months (2020: 8.8 months). Most notably, we have seen a significant decrease in the length of stay of customers who moved out over the six months, which decreased to 7.6 months from 9.6 months for the same period last year. This is likely to have been the result of customers delaying move-outs during the prior year Spring full lockdown, amplified by short-term users in the current period as a result of the stamp duty changes. This clearly illustrates some normalisation of our activity which has started to occur in this six month period, and the 7.6 months is more in line with pre-pandemic levels.

35% of our customers by occupied space have been storing with us for over two years (2020: 34%), and a further 18% of customers have been in the business for between one and two years (2020: 17%).

We have a diverse base of domestic and business customers currently occupying 77,000 rooms. This, together with the location and quality of our stores, limited growth in new supply, digital operating systems, customer service, and brand recognition, all contribute to the resilience and security of our income.

Supply

New supply and competition is a key risk to our business model, hence our weighting to London and its commuter towns, where barriers to entry in terms of competition for land and difficulty around obtaining planning are highest. Growth in new self storage centre openings, excluding container operators, over the last five years has averaged 2% to 3% of total capacity per annum, down significantly from the previous decade. We continue to see limited new supply growth in our key areas of operation, with only six store openings in London in 2021 (including our Uxbridge store), and we anticipate seven new facilities in London in 2022 (including our planned stores at Hayes, Harrow, and North Kingston).

Revenue

Total revenue for the six-month period was GBP81.8 million, an increase of GBP16.0 million (24%) from GBP65.8 million in the same period last year. Of the total store revenue of GBP80.8 million in the period, like-for-like store revenue (see glossary in note 19) was GBP73.7 million, an increase of 15% from the 2020 figure of GBP64.3 million. The revenue from the Armadillo stores for the three months from acquisition of the remaining interest on 1 July 2021 to 30 September 2021 was GBP5.6 million.

Other sales comprise the selling of packing materials, insurance, and storage related charges. We saw strong growth in packing material sales during the period, with 2020's sales impacted by the Spring lockdown. Insurance sales have also seen strong year-on-year growth, with improvements made to the average value insured and higher customer numbers.

The other revenue earned is management fee income from the Armadillo Partnerships and tenant income on sites where we have not started development. Following the acquisition of the remaining interest in the Armadillo Partnerships in July, the Group is not entitled to any further management fee income from Armadillo.

Operating costs

Cost of sales comprises principally direct store operating costs, including store staff salaries, utilities, business rates, insurance, a full allocation of the central marketing budget, and repairs and maintenance.

The table below shows the breakdown of both Big Yellow's and Armadillo's store operating costs compared to the same period last year, with Armadillo's costs included in full in both periods:

 
                                  Period ended    Period ended                % of store 
                                  30 September    30 September                 operating 
   Category                               2021            2020     % change     costs in 
                                        GBP000          GBP000                    period 
 Cost of sales (insurance and 
  packing materials)                     2,034           1,692          20%           8% 
 Staff costs                             7,283           6,591          10%          30% 
 General & Admin                           921             762          21%           4% 
 Utilities                               1,044             985           6%           4% 
 Property Rates                          6,642           6,574           1%          27% 
 Marketing                               3,393           3,170           7%          14% 
 Repairs and maintenance                 2,200           1,763          25%           9% 
 Insurance                                 480             454           6%           2% 
 Computer Costs                            324             287          13%           2% 
                                --------------  --------------  -----------  ----------- 
 Total before one-off items             24,321          22,278           9% 
 One-off items                           (423)               - 
 Total per portfolio summary            23,898          22,278           7% 
                                --------------  --------------  -----------  ----------- 
 

Store operating costs have increased by GBP1.6 million (7%). The one-off items in the current year relate to rates rebate on three stores, totalling GBP0.4 million, following appeals of the 2017 rating list assessment. Store operating costs pre these one-off items have increased by GBP2.0 million (9%) compared to the same period last year, of which GBP0.9 million is in relation to recently opened stores. The remaining increase of GBP1.1 million (5%) can be explained as follows:

- Cost of sales have increased in line with the proportionate increase in ancillary sales in the period.

- Staff costs have increased partly due to the increase in store numbers, but also due to higher store bonuses being paid over the six months compared to the same period last year due to the strong operating performance of the business.

- The repairs and maintenance expenditure has increased by GBP0.4 million, partly due to the increase in store numbers, increased investment in CCTV monitoring security overnight, and we carried out less maintenance

work during the   2020 Spring lockdown. 

- Marketing has increased by GBP0.2 million, returning to 2019's level, with the 2020 cost reflecting

lower search costs and   traffic levels during the Spring lockdown. 

- General and admin expenses have increased as 2020 had significantly less travel expense during the lockdown period.

The table below reconciles store operating costs per the portfolio summary to cost of sales in the income statement:

 
                                                             Period       Period 
                                                           ended 30     ended 30 
                                                          September    September 
                                                               2021         2020 
                                                             GBP000       GBP000 
 Direct store operating costs per portfolio summary 
  (excluding rent)                                           23,898       22,278 
 Rent included in cost of sales (total rent payable 
  is included in portfolio summary)                           1,047          636 
 Depreciation charged to cost of sales                          188          195 
 Head office operational management costs charged 
  to cost of sales                                              543          357 
 Armadillo cost of sales pre acquisition of remaining 
  interest                                                  (1,908)      (3,407) 
 Cost of sales per income statement                          23,768       20,059 
 

Store EBITDA

Store EBITDA for the Big Yellow stores for the period was GBP54.0 million, an increase of GBP9.5 million (21%) from GBP44.5 million for the period ended 30 September 2020 (see Portfolio Summary). The overall EBITDA margin for all Big Yellow stores during the period was 71.8%, up from 69.2% in 2020.

The EBITDA for the Armadillo stores for the period was GBP6.7 million, an increase of GBP1.7 million (34%) from GBP5.0 million in 2020, with the margin increasing to 62.8% from 57.4%.

The store EBITDA in the six months for Big Yellow stores and for the Armadillo stores from 1 July 2021 to 30 September was GBP57.7 million.

All stores are currently trading profitably at the Store EBITDA level, with our new store at Uxbridge breaking even in September 2021, three months after opening.

Administrative expenses

Administrative expenses in the income statement have increased by GBP1.7 million. GBP0.4 million of this increase is due to the write-off of acquisition costs in relation to the purchase of the remaining interest in Armadillo in accordance with IFRS 3. This is an adjusting item in the calculation of the Group's adjusted profit before tax.

The remaining increase of GBP1.3 million is due to a GBP0.5 million increase in the IFRS 2 share based payments charge, national insurance charges on the exercise of share options (both up due to the increase in the Company's share price), with the balance inflationary. The non-cash share-based payments charge represents GBP1.7 million of the overall GBP7.3 million expense.

Interest

Interest on bank borrowings during the period was GBP5.2 million, GBP 0.5 million higher than the same period last year, due to higher average debt levels in the period.

Interest capitalised in the period amounted to GBP1.0 million (2020: GBP1.0 million), arising on the Group's construction programme.

Results

The Group's statutory profit before tax for the period was GBP254.9 million, an increase of 326% from GBP59.9 million for the same period last year. The increase is principally due to a higher revaluation surplus in the period, which is discussed further below.

After adjusting for the gain on the revaluation of investment properties and other matters shown in the table below, the Group made an adjusted profit before tax in the period of GBP46.9 million, up 28% from GBP36.5 million in 2020.

 
                                      Six months ended   Six months ended 
                                          30 September       30 September 
   Profit before tax analysis                     2021               2020 
                                                  GBPm               GBPm 
-----------------------------------  -----------------  ----------------- 
 Profit before tax                               254.9               59.9 
 Gain on revaluation of investment 
  properties                                   (204.6)             (23.5) 
 Change in fair value of interest 
  rate derivatives                               (0.5)                0.5 
 Acquisition costs written off                     0.4                  - 
 Share of non-recurring gains 
  in associates                                  (3.3)              (0.4) 
 Adjusted profit before tax                       46.9               36.5 
 Tax                                             (0.8)              (0.2) 
-----------------------------------  -----------------  ----------------- 
 Adjusted profit after tax                        46.1               36.3 
-----------------------------------  -----------------  ----------------- 
 

The movement in the adjusted profit before tax from the prior year is shown in the table below:

 
 Movement in adjusted profit before tax            GBPm 
-----------------------------------------------  ------ 
 Adjusted profit before tax for the six months 
  to 30 September 2020                             36.5 
 Increase in gross profit                          12.3 
 Increase in administrative expenses              (1.3) 
 Increase in net interest payable                 (0.5) 
 Reduction in share of associates' recurring 
  profit                                          (0.1) 
 Adjusted profit before tax for the six months 
  to 30 September 2021                             46.9 
 

Diluted EPRA earnings per share was 25.7 pence (2020: 20.9 pence), an increase of 23 % from the same period last year.

Cash flow

Cash flows from operating activities (after net finance costs) have increased by 22 % to GBP 51.8 million for the period (2020: GBP42.3 million).

These operating cash flows are after the ongoing maintenance costs of the stores, which for this first half were on average approximately GBP 20,000 per store. The Group's net debt has increased over the period to GBP397.4 million (March 2021: GBP325.0 million), with the majority of the increase due to the debt within Armadillo now being consolidated.

 
                                                  Six months            Six months 
                                          ended 30 September    ended 30 September 
                                                        2021                  2020 
                                                        GBPm                  GBPm 
 Cash generated from operations                         57.9                  47.6 
 Net finance costs                                     (5.0)                 (4.4) 
 Interest on obligations under lease 
  liabilities                                          (0.4)                 (0.4) 
 Tax                                                   (0.7)                 (0.5) 
                                        --------------------  -------------------- 
 Cash flow from operating activities                    51.8                  42.3 
 Acquisition of Armadillo                             (66.7)                     - 
 Capital expenditure                                  (74.3)                (34.0) 
 Receipt from Capital Goods Scheme                       0.4                   0.7 
 Dividend received from associates                       0.4                   0.3 
 Cash flow after investing activities                 (88.4)                   9.3 
 Dividends                                            (31.0)                (29.1) 
 Payment of finance lease liabilities                  (0.6)                 (0.5) 
 Issue of share capital                                 98.5                  80.6 
 Debt acquired with Armadillo                         (50.9)                     - 
 Increase/(decrease) in borrowings                      70.0               (105.3) 
                                        --------------------  -------------------- 
 Net cash outflow                                      (2.4)                (45.0) 
                                        --------------------  -------------------- 
 

The Group's interest cover for the period (expressed as the ratio of cash generated from operations pre-working capital movements against interest paid) was 10.6 times (2020: 9.7 times).

Of the capital expenditure in the period GBP51 million related to site acquisitions of Epsom, Kentish Town and West Kensington, with the balance of GBP23.3 million principally construction capital expenditure.

Taxation

The Group is a Real Estate Investment Trust ("REIT"). We benefit from a zero tax rate on our qualifying self storage earnings. We only pay corporation tax on the profits attributable to our residual business, comprising primarily of the sale of packing materials and insurance, and management fees earned by the Group. The Armadillo stores joined the Big Yellow REIT group on acquisition in July 2021.

There is a GBP0.8 million tax charge in the residual business for the period ended 30 September 2021 (six months to 30 September 2020: GBP0.2 million). The increase in the tax charge in the period is due to the increase in taxable profits in the period following our recent strong trading, coupled with an increase in the period in disallowable expenses.

Dividends

REIT regulatory requirements determine the level of Property Income Distribution ("PID") payable by the Group. A PID of 20.6 pence per share is proposed as the total interim dividend, an increase of 21% from 17.0 pence per share for the same period last year.

The interim dividend will be paid on 7 January 2022. The ex-div date is 2 December 2021 and the record date is 3 December 2021.

Financing and treasury

Our financing policy is to fund our current needs through a mix of debt, equity and cash flow to allow us to build out, and add to, our development pipeline and achieve our strategic growth objectives, which we believe improve returns for shareholders. We aim to ensure that there are sufficient medium-term facilities in place to finance our committed development programme, secured against the freehold portfolio, with debt serviced by our strong operational cash flows. We maintain a keen watch on medium and long-term rates and the Group's policy in respect of interest rates is to maintain a balance between flexibility and hedging of interest rate risk.

During the period, the Group signed an additional GBP50 million seven year debt facility with Aviva. As part of this refinancing the expiry of the existing loan has been extended from April 2027 to September 2028. This has reduced the fixed cost of the total Aviva loan facility from 4.0% to 3.5%.

Sustainability KPIs have been incorporated into this additional borrowing. These include the continued installation of solar panels across the security stores which will reduce emissions and running costs, and the business being on-track to achieve 'Net Renewable Energy Positive' status by 2030. The Group will benefit from a margin reduction on the new GBP50 million loan, conditional on achieving these targets.

The total debt facilities from Aviva are now GBP163.4 million of which GBP18.4 million amortises to nil by April 2027.

The Group has also increased the facilities of its M&G loan by GBP50 million to a total facility of GBP120 million. GBP35 million of the total M&G loan is fixed by a way of swap, with the balance floating. The average cost of the M&G loan is now 2.4%, with the loan expiring in June 2023. The Group intends to commence discussions on refinancing this loan next year.

These two new loans were funded in October 2021 and used to repay revolving bank debt. The table below shows the Group's proforma debt position at 30 September 2021 with these new loans in place:

 
 Debt                                Expiry              Facility         Drawn     Cost 
----------------------------------  ----------------  -----------  ------------  ------- 
 Aviva Loan                          September 2028     GBP163.4m     GBP163.4m     3.5% 
 M&G loan                            June 2023            GBP120m       GBP120m     2.4% 
 Revolving bank facility (Lloyds, 
  HSBC and Bank of Ireland)            October 2024       GBP240m      GBP76.0m     1.4% 
 Armadillo bank loans (Lloyds)       April 2023          GBP52.7m      GBP47.9m     2.9% 
----------------------------------  ----------------  -----------  ------------  ------- 
                                     Average term 
 Total                                3.9 years         GBP576.1m     GBP407.3m     2.8% 
 

The Group has undrawn committed bank facilities of GBP168.8 million, which if drawn would carry a current marginal cost of debt of approximately 1.35%.

The Group was comfortably in compliance with its banking covenants at 30 September 2021.

The net debt to gross property assets ratio is 18% (2020: 18%) and the net debt to adjusted net assets ratio (see net asset value section below) is 21 % (2020: 21%). Our net debt to the Group's market capitalisation at 30 September 2021 was 15% (2020: 16%). Our balance sheet capital gearing ratios post the acquisition of Armadillo remain broadly in line with the prior year, albeit with higher absolute levels of debt.

Property

Investment property

The Group's investment properties are carried at the half year at Directors' valuation. They are valued externally by CBRE LLP ("CBRE") and Jones Lang Lasalle ("JLL") at the year end. The Directors' valuations reflect the latest cash flows derived from each of the stores at the end of September.

In performing the valuations, the Directors consulted with CBRE and JLL on the capitalisation rates used in the valuations. The Directors, as advised by the valuers, consider that the prime capitalisation rates have reduced by 12.5 bps since the start of the financial year.

The Directors have also made some minor amendments to a couple of the valuation assumptions, namely the adjustment of stable occupancy levels on certain stores that are consistently trading ahead of the previously used assumptions and to certain assumptions on net achieved rents within the valuations. Other than the above, the Directors believe the core assumptions used by CBRE and JLL in the March 2021 valuations are still appropriate at the September valuation date. See the Group's annual report for the year ended 31 March 2021 for the full detail of the valuation methodology.

At 30 September 2021 the total value of the Group's properties is shown in the table below:

 
 Analysis of property portfolio            Value at 30   Revaluation movement 
                                             September          in the period 
                                                  2021                   GBPm 
                                                  GBPm 
----------------------------------------  ------------  --------------------- 
 Investment property - Big Yellow 
  stores                                       1,827.6                  192.3 
 Investment property - Armadillo 
  stores                                         142.1                    3.4 
----------------------------------------  ------------  --------------------- 
 Investment property - Big Yellow 
  and Armadillo stores                         1,969.7                  195.7 
 Investment property under construction          234.5                    8.9 
----------------------------------------  ------------  --------------------- 
 Investment property total                     2,204.2                  204.6 
----------------------------------------  ------------  --------------------- 
 

The revaluation surplus for the open stores in the period was GBP195.7 million, reflecting significant operating cash flow growth, and a reduction of 12.5bps in prime cap rates. There is a revaluation surplus of GBP8.9 million on the investment property under construction, due to an increase in the projected net rents on the stores, partly offset by increased development costs on a couple of schemes.

The revaluation gain for the Armadillo stores shown above is only from 1 July - the date the Group acquired the remaining interest it did not previously own. The revaluation gain in the three months to 30 June 2021 for Armadillo was GBP7.7 million, giving a total gain of GBP11.1 million for the six months.

The initial yield on the Big Yellow stores before administration expenses and assuming no rental growth, is 5.9% rising to a stabilised yield of 6.1% (31 March 2021: 5.9% rising to 6.2%). For the Armadillo stores, the initial yield on this basis is 9.5%, rising to a stabilised yield of 10.3%.

Development pipeline

The Group has opened Uxbridge during the financial year to date, adding 54,000 sq ft of capacity. The Group acquired development sites in Kentish Town and West Kensington during the period. These acquisitions take the total pipeline to approximately 1.12 million sq ft, representing 18.5% of current MLA, with an estimated future cost to complete of approximately GBP172 million.

The status of the Group's development pipeline is summarised in the table below:

 
 Site                 Location                Status                             Anticipated 
                                                                                  capacity 
 Hayes, London        Prominent location      Planning consent granted           73,000 sq 
                       on Hayes Road           in July 2020. Construction         ft 
                                               commenced in January 2021 
                                               with a view to opening 
                                               in January 2022. 
                     ----------------------  ---------------------------------  ------------ 
 Hove                 Prominent location      Planning consent granted           58,000 sq 
                       on Old Shoreham         in October 2019. Construction      ft 
                       Road                    commenced in Autumn 2020 
                                               with a view to opening 
                                               in Spring 2022. 
                     ----------------------  ---------------------------------  ------------ 
 Harrow, London       Prominent location      Planning consent granted           82,000 sq 
                       on Harrow View          in November 2020. Construction     ft 
                                               commenced in May 2021 with 
                                               a view to opening in Summer 
                                               2022. 
                     ----------------------  ---------------------------------  ------------ 
 North Kingston,      Prominent location      Planning consent granted           56,000 sq 
  London               on Richmond Road,       in September 2020. Construction    ft 
                       Ham                     commenced in June 2021 
                                               with a view to opening 
                                               in Summer 2022. 
                     ----------------------  ---------------------------------  ------------ 
 Kings Cross,         Prominent location      Planning consent granted           106,000 
  London               on York Way             in October 2020. Demolition        sq ft 
                                               commenced in January 2021 
                                               with a view to opening 
                                               in Summer 2023. 
                     ----------------------  ---------------------------------  ------------ 
 Wembley, London      Prominent location      Planning consent granted           70,000 sq 
                       on Towers Business      in August 2020. Discussions        ft 
                       Park                    ongoing to secure vacant 
                                               possession. 
                     ----------------------  ---------------------------------  ------------ 
 Queensbury, London   Prominent location      Site acquired in November          70,000 sq 
                       off Honeypot            2018. Planning consent             ft 
                       Lane                    granted in November 2019 
                                               for 58,000 sq ft store. 
                                               Planning application submitted 
                                               in 2021 to increase floor 
                                               area by 12,000 sq ft. Decision 
                                               anticipated Q1 2022. 
                     ----------------------  ---------------------------------  ------------ 
 Slough               Prominent location      Site acquired in April             90,000 sq 
                       on Bath Road            2019. Planning consent             ft 
                                               granted in October 2021. 
                                               Construction to commence 
                                               in Summer 2022 with a view 
                                               to the store opening in 
                                               Winter 2023. 
                     ----------------------  ---------------------------------  ------------ 
 Wapping, London      Prominent location      Site acquired in July 2020.        Additional 
                       on the Highway,         Planning application submitted     95,000 sq 
                       adjacent to existing    in November 2021.                  ft 
                       Big Yellow 
                     ----------------------  ---------------------------------  ------------ 
 Staines, London      Prominent location      Site acquired in December          65,000 sq 
                       on the Causeway         2020. Planning application         ft 
                                               to be submitted in December 
                                               2021. 
                     ----------------------  ---------------------------------  ------------ 
 Epsom, London        Prominent location      Site acquired in March             56,000 sq 
                       on East Street          2021. Planning application         ft 
                                               to be submitted in Q1 2022. 
                     ----------------------  ---------------------------------  ------------ 
 Kentish Town,        Prominent location      Site acquired in April             68,000 sq 
  London               on Regis Road           2021. Planning application         ft 
                                               to be submitted in Spring 
                                               2022. 
                     ----------------------  ---------------------------------  ------------ 
 West Kensington,     Prominent location      Site acquired in June 2021.        175,000 
  London               on Hammersmith          Planning application to            sq ft 
                       Road                    be submitted in Summer 
                                               2022. 
                     ----------------------  ---------------------------------  ------------ 
 Newcastle            Prominent location      Planning consent granted           60,000 sq 
                       on Scotswood            in October 2021.                   ft 
                       Road 
                     ----------------------  ---------------------------------  ------------ 
 Total                                                                           1,124,000 
                                                                                  sq ft 
                     ----------------------  ---------------------------------  ------------ 
 

The capital expenditure forecast for the remainder of the financial year (excluding any new site acquisitions) is approximately GBP29 million, which principally relates to construction costs on our development sites at Hayes, North Kingston, Hove, Harrow and Kings Cross.

The Group manages the construction and fit-out of its stores in-house, as we believe it provides both better control and quality, and we have an excellent record of building stores on time and within budget. As a result of the well-documented supply chain and Covid-related issues, we are experiencing higher than normal inflation in construction costs, notably in the availability of labour and certain materials. We have reflected this in the projected costing of our pipeline and would anticipate seeing some moderation over the next 12 to 18 months.

Net asset value

The adjusted net asset value per share is 1,034.6 pence (see note 13), up 14% from 904.7 pence per share at 31 March 2021 (after adjusting the opening NAV for the June 2021 placing). The table below reconciles the movement from 31 March 2021:

 
                                            Equity shareholders'   EPRA adjusted 
                                                           funds       NAV pence 
                                                            GBPm       per share 
   Movement in adjusted net asset value 
-----------------------------------------  ---------------------  -------------- 
 31 March 2021                                           1,566.6           889.2 
 Share placing                                              97.6            15.5 
                                           ---------------------  -------------- 
 31 March 2021 (rebased)                                 1,664.2           904.7 
 Adjusted profit after tax                                  46.1            25.0 
 Equity dividends paid                                    (31.0)          (16.9) 
 Revaluation movements (including share 
  of associates to 30 June 2021)                           206.2           112.1 
 Movement in purchaser's cost adjustment                    19.1            10.4 
 Other movements (e.g. share schemes)                        2.2           (0.7) 
 30 September 2021                                       1,906.8         1,034.6 
-----------------------------------------  ---------------------  -------------- 
 
   Jim Gibson                                                            John Trotman 
   Chief Executive Officer                                      Chief Financial Officer 

22 November 2021

PORTFOLIO SUMMARY

 
                                         September 2021                                               September 2020 
                      Big Yellow                    Total                                                     Total 
                  Established(1)  Big Yellow   Big Yellow                 Total   Big Yellow  Big Yellow        Big                 Total 
                                  Developing               Armadillo             Established  Developing     Yellow  Armadillo 
  Number of 
   stores                     73           6           79         25        104           73           4         77         25        102 
                  --------------  ----------  -----------  ---------  ---------  -----------  ----------  ---------  ---------  --------- 
  At 30 
  September: 
  Total capacity 
   (sq ft)             4,636,000     348,000    4,984,000  1,078,000  6,062,000    4,599,000     223,000  4,822,000  1,081,000  5,903,000 
  Occupied 
   space (sq 
   ft)                 4,242,000     230,000    4,472,000    955,000  5,427,000    4,035,000      71,000  4,106,000    868,000  4,974,000 
  Percentage 
   occupied                91.5%       66.1%        89.7%      88.6%      89.5%        87.7%       31.8%      85.2%      80.3%      84.3% 
  Net rent 
   per sq ft            GBP30.63    GBP26.62     GBP30.43   GBP19.85   GBP28.46     GBP27.77    GBP24.69   GBP27.75   GBP17.50   GBP25.97 
  For the 
   period: 
  REVPAF(2)             GBP31.10    GBP18.17     GBP30.27   GBP19.61   GBP28.36     GBP27.54    GBP12.93   GBP27.11   GBP16.20   GBP25.10 
  Average 
   occupancy               90.0%       52.9%        87.6%      87.0%      87.5%        84.1%       36.0%      82.7%      77.6%      81.7% 
  Average 
   annual net 
   rent psf             GBP29.67    GBP26.02     GBP29.52   GBP19.14   GBP27.73     GBP28.10    GBP27.35   GBP28.01   GBP17.71   GBP26.07 
 
                          GBP000      GBP000       GBP000     GBP000     GBP000       GBP000      GBP000     GBP000     GBP000     GBP000 
  Self storage 
   income                 62,055       2,317       64,372      9,003     73,375       54,305         685     54,990      7,335     62,325 
  Other storage 
   related 
   income (2)              9,893         530       10,423      1,585     12,008        8,851         180      9,031      1,288     10,319 
  Ancillary 
   store rental 
   Income                    348          81          429         10        439          317          36        353         21        374 
----------------  --------------  ----------  -----------  ---------  ---------  -----------  ----------  ---------  ---------  --------- 
  Total store 
   revenue                72,296       2,928       75,224     10,598     85,822       63,473         901     64,374      8,644     73,018 
  Direct store 
   operating 
   costs 
   (excluding 
   depreciation)        (18,607)     (1,648)     (20,255)    (3,643)   (23,898)     (18,283)       (588)   (18,871)    (3,407)   (22,278) 
  Short and 
   long 
   leasehold 
   rent(3)                 (955)           -        (955)      (301)    (1,256)        (978)           -      (978)      (279)    (1,257) 
----------------  --------------  ----------  -----------  ---------  ---------  -----------  ----------  ---------  ---------  --------- 
  Store 
   EBITDA(2,4)            52,734       1,280       54,014      6,654     60,668       44,212         313     44,525      4,958     49,483 
  Store EBITDA 
   margin                  72.9%       43.7%        71.8%      62.8%      70.7%        69.7%       34.7%      69.2%      57.4%      67.8% 
 
  Deemed cost               GBPm        GBPm         GBPm       GBPm       GBPm 
  To 30 
   September 
   2021                    616.5        82.9        699.4      138.4      837.8 
  Capex to 
   complete                              0.6          0.6        3.8        4.4 
----------------  --------------  ----------  -----------  ---------  --------- 
  Total                    616.5        83.5        700.0      142.2      842.2 
                                              -----------             ---------                           ---------             --------- 
 

(1) The Big Yellow established stores have been open for more than three years at 1 April 2021, and the developing stores have been open for fewer than three years at 1 April 2021.

   (2)   See glossary in note 19. 

(3) The Group acquired the 80% of the Armadillo Partnerships that it did not previously own on 1 July 2021. The results of the stores in the Partnerships have been included in the results above for both years to give a clearer understanding of the underlying performance of all stores. The table below shows the results excluding the period when the stores were not wholly owned:

 
                                     2021                                         2020 
                                      Armadillo                                    Armadillo 
                                        results                                      results 
                   Per above    as an associate    Statutory    Per above    as an associate    Statutory 
                      GBP000             GBP000       GBP000       GBP000             GBP000       GBP000 
                 -----------  -----------------  -----------  -----------  -----------------  ----------- 
 Store revenue        85,822            (5,046)       80,776       73,018            (8,644)       64,374 
 Direct store 
  operating 
  costs             (23,898)              1,908     (21,990)     (22,278)              3,407     (18,871) 
 Rent                (1,256)                150      (1,106)      (1,257)                279        (978) 
                 -----------  -----------------  -----------  -----------  -----------------  ----------- 
 Store EBITDA         60,668            (2,988)       57,680       49,483            (4,958)       44,525 
                 -----------  -----------------  -----------  -----------  -----------------  ----------- 
 

(4) Rent under IFRS 16 for eight short leasehold properties accounted for as investment properties and finance leases under IFRS. The EBITDA margin for the 96 freehold stores is 72.3%, and 51.4% for the eight short leasehold stores.

   (5)   The table below reconciles Store EBITDA to gross profit in the income statement: 
 
                                    Period ended 30 September                   Period ended 30 September 
                                               2021                                        2020 
                                              GBP000                                      GBP000 
                                Store 
                               EBITDA                   Gross profit                                  Gross profit 
                                 (per                     per income   Store EBITDA                     per income 
                                 note   Reconciling        statement      (per note   Reconciling        statement 
                                 (3))         items                            (3))         items 
 
 Store revenue/Revenue(1)      80,776         1,025           81,801         64,374         1,439           65,813 
 Cost of sales(2)            (21,990)       (1,778)         (23,768)       (18,871)       (1,188)         (20,059) 
 Rent(3)                      (1,106)         1,106                -          (978)           978                - 
                            ---------  ------------  ---------------  -------------  ------------  --------------- 
                               57,680           353           58,033         44,525         1,229           45,754 
 

(1) See note 2 of the interim statement, reconciling items are management fees and non-storage income.

   (2)   See reconciliation in cost of sales section in Business and Financial Review. 

(3) The rent shown above is the cost associated with leasehold stores, only part of which is recognised within gross profit in line with finance lease accounting principles. The amount included in gross profit is shown in the reconciling items in cost of sales.

RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

   -       the interim management report includes a fair review of the information required by: 

a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

   Jim Gibson                                                            John Trotman 
   Chief Executive Officer                                     Chief Financial Officer 

22 November 2021

 
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 Six months ended 30 September 2021 
 
                                                                             Six months     Six months 
                                                                                  ended          ended 
                                                                                                         Year ended 
                                                                           30 September   30 September     31 March 
                                                                                   2021           2020         2021 
                                                                            (unaudited)    (unaudited)    (audited) 
                                                                    Note         GBP000         GBP000       GBP000 
 
Revenue                                                                2         81,801         65,813      135,241 
Cost of sales                                                                  (23,768)       (20,059)     (41,589) 
 
Gross profit                                                                     58,033         45,754       93,652 
 
Administrative expenses                                                         (7,341)        (5,683)     (12,159) 
 
Operating profit before gains 
 and losses on property assets                                                   50,692         40,071       81,493 
Gain on the revaluation of investment 
 properties                                                           9a        204,662         23,554      189,277 
 
Operating profit                                                                255,354         63,625      270,770 
Share of profit of associates                                         9e          3,677            888        3,148 
Investment income - interest 
 receivable                                                            3             15             54           69 
 
                          *    fair value movement of derivatives      3            477              -            - 
Finance costs - interest payable                                       4        (4,655)        (4,149)      (8,017) 
                    - fair value movement of derivatives               4              -          (502)        (148) 
 
Profit before taxation                                                          254,868         59,916      265,822 
                                                                          -------------  -------------  ----------- 
 
Taxation                                                               5          (794)          (180)        (636) 
 
Profit for the period (attributable 
 to equity shareholders)                                                        254,074         59,736      265,186 
                                                                          -------------  -------------  ----------- 
 
Total comprehensive income for 
 the period attributable to equity 
 shareholders                                                                   254,074         59,736      265,186 
                                                                          -------------  -------------  ----------- 
 
Basic earnings per share                                               8         142.0p          34.4p       152.3p 
 
Diluted earnings per share                                             8         141.6p          34.3p       151.8p 
 
 

Adjusted profit before taxation is shown in note 6 and EPRA earnings per share is shown in note 8.

All items in the income statement relate to continuing operations.

 
CONDENSED CONSOLIDATED BALANCE SHEET 
 30 September 2021 
                                                       30 September   30 September 
                                                               2021           2020   31 March 2021 
                                                        (unaudited)    (unaudited)       (audited) 
                                                Note         GBP000         GBP000          GBP000 
Non-current assets 
Investment property                               9a      1,969,730      1,450,580       1,621,990 
Investment property under construction            9a        234,542        128,047         163,537 
Right-of-use assets                               9a         20,804         17,240          16,644 
Plant, equipment and owner-occupied property      9b          4,011          4,137           3,910 
Intangible assets                                 9c          1,433          1,433           1,433 
Investment                                        9d            450              -             450 
Investment in associates                          9e              -         11,804          13,720 
Capital Goods Scheme receivable                   10              -            159             163 
 
                                                          2,230,970      1,613,400       1,821,847 
Current assets 
Inventories                                                     404            381             366 
Trade and other receivables                       10          8,994          7,568           7,764 
Cash and cash equivalents                                     9,911          6,417          12,322 
 
                                                             19,309         14,366          20,452 
 
Total assets                                              2,250,279      1,627,766       1,842,299 
 
Current liabilities 
 Trade and other payables                         11       (45,572)       (37,638)        (34,563) 
Borrowings                                        12        (2,935)        (2,795)         (2,865) 
Obligations under lease liabilities                         (2,298)        (1,751)         (1,751) 
 
                                                           (50,805)       (42,184)        (39,179) 
Non-current liabilities 
Borrowings                                        12      (402,362)      (291,787)       (332,573) 
Obligations under lease liabilities                        (20,009)       (16,688)        (16,177) 
Derivative financial instruments                  12           (27)          (829)           (475) 
 
                                                          (422,398)      (309,304)       (349,225) 
 
Total liabilities                                         (473,203)      (351,488)       (388,404) 
 
Net assets                                                1,777,076      1,276,278       1,453,895 
                                                      -------------  -------------  -------------- 
 
Equity 
Called up share capital                                      18,397         17,578          17,588 
Share premium account                                       289,885        192,064         192,218 
Reserves                                                  1,468,794      1,066,636       1,244,089 
 
Equity shareholders' funds                                1,777,076      1,276,278       1,453,895 
                                                      -------------  -------------  -------------- 
 

INDEPENT REVIEW REPORT TO BIG YELLOW GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 September 2021 (unaudited)

 
                                       Share  Other non-distributable      Capital    Retained 
                             Share   premium                  reserve   redemption    earnings 
                           capital   account                   GBP000      reserve      GBP000  Own shares      Total 
                            GBP000    GBP000                                GBP000                  GBP000     GBP000 
 
At 1 April 2021             17,588   192,218                   74,950        1,795   1,168,363     (1,019)  1,453,895 
Total comprehensive 
 income for the period           -         -                        -            -     254,074           -    254,074 
Issue of share capital         809    97,667                        -            -           -           -     98,476 
Credit to equity 
 for equity-settled 
 share-based payments            -         -                        -            -       1,670           -      1,670 
Dividends                        -         -                        -            -    (31,039)           -   (31,039) 
 
At 30 September 
 2021                       18,397   289,885                   74,950        1,795   1,393,068     (1,019)  1,777,076 
 

Six months ended 30 September 2020 (unaudited)

 
                                       Share  Other non-distributable      Capital 
                             Share   premium                  reserve   redemption    Retained 
                           capital   account                   GBP000      reserve    earnings  Own shares      Total 
                            GBP000    GBP000                                GBP000      GBP000      GBP000     GBP000 
 
At 1 April 2020             16,714   112,320                   74,950        1,795     959,116     (1,019)  1,163,876 
Total comprehensive 
 income for the period           -         -                        -            -      59,736           -     59,736 
Issue of share capital         864    79,744                        -            -           -           -     80,608 
Credit to equity 
 for equity-settled 
 share-based payments            -         -                        -            -       1,182           -      1,182 
Dividends                        -         -                        -            -    (29,124)           -   (29,124) 
 
At 30 September 
 2020                       17,578   192,064                   74,950        1,795     990,910     (1,019)  1,276,278 
 

Year ended 31 March 2021 (audited)

 
                                      Share  Other non-distributable      Capital 
                            Share   premium                  reserve   redemption    Retained    Own shares 
                          capital   account                   GBP000      reserve    earnings        GBP000      Total 
                           GBP000    GBP000                                GBP000      GBP000                   GBP000 
 
At 1 April 2020            16,714   112,320                   74,950        1,795     959,116       (1,019)  1,163,876 
Total comprehensive 
 income for the year            -         -                        -            -     265,186             -    265,186 
Issue of share capital        874    79,898                        -            -           -             -     80,772 
Credit to equity 
 for equity-settled 
 share-based payments           -         -                        -            -       2,869             -      2,869 
Dividend                        -         -                        -            -    (58,808)             -   (58,808) 
 
At 31 March 2021           17,588   192,218                   74,950        1,795   1,168,363       (1,019)  1,453,895 
 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

Six months ended 30 September 2021

 
                                                                              Six months        Year 
                                                         Six months ended          ended       ended 
                                                             30 September   30 September    31 March 
                                                                     2021           2020        2021 
                                                              (unaudited)    (unaudited)   (audited) 
                                                   Note            GBP000         GBP000      GBP000 
Cash generated from operations                       17            57,863         47,560      87,131 
Bank interest paid                                                (5,042)        (4,382)     (8,850) 
Interest on obligations under lease liabilities                     (413)          (391)       (772) 
Interest received                                                       1             25          26 
Tax paid                                                            (655)          (481)       (823) 
 
Cash flows from operating activities                               51,754         42,331      76,712 
 
Investing activities 
Purchase of non-current assets                                   (74,260)       (34,052)    (73,010) 
Acquisition of Armadillo (net of cash acquired)                  (66,679)              -           - 
Investment                                                              -              -       (450) 
Receipt from Capital Goods Scheme                                     381            738         737 
Dividend received from associates                    9e               435            344         688 
 
Cash flows from investing activities                            (140,123)       (32,970)    (72,035) 
 
Financing activities 
Issue of share capital                                             98,476         80,608      80,772 
Payment of finance lease liabilities                                (614)          (498)     (1,009) 
Equity dividends paid                                            (31,039)       (29,124)    (58,808) 
Drawing of Armadillo loans                                       (50,900)              -           - 
Increase/(decrease) in borrowings                                  70,035      (105,348)    (64,728) 
 
Cash flows from financing activities                               85,958       (54,362)    (43,773) 
 
Net decrease in cash and cash equivalents                         (2,411)       (45,001)    (39,096) 
 
Opening cash and cash equivalents                                  12,322         51,418      51,418 
 
Closing cash and cash equivalents                                   9,911          6,417      12,322 
                                                         ----------------  -------------  ---------- 
 
   1.             ACCOUNTING POLICIES 

Basis of preparation

The results for the period ended 30 September 2021 are unaudited and were approved by the Board on 22 November 2021. The financial information contained in this report in respect of the year ended 31 March 2021 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

The annual financial statements of Big Yellow Group PLC are prepared in accordance with International Financial Reporting Standards as adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and the next annual financial statements will be prepared in accordance with UK-adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standards 34 "Interim Financial Reporting", as adopted by the European Union.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as were applied in the Group's latest annual audited financial statements.

Valuation of assets and liabilities held at fair value

For those financial instruments held at fair value, the Group has categorised them into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique in accordance with IFRS 13. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety. The fair value of the Group's outstanding interest rate derivatives has been estimated by calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined by IFRS 13. Investment Property and Investment Property under Construction have been classified as Level 3. This is discussed further in note 14.

Going concern

A review of the Group's business activities, together with the factors likely to affect its future development, performance and position, is set out in the Chairman's Statement and the Business and Financial Review. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are shown in the balance sheet, cash flow statement and accompanying notes to the interim statement. Further information concerning the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk can be found in the Strategic Report within the Group's Annual Report for the year ended 31 March 2021.

At 30 September 2021 the Group had available liquidity of GBP178.7 million, from a combination of cash and undrawn bank debt facilities. The Group is cash generative and for the six months ended 30 September 2021, had operational cash flow of GBP51.8 million, with capital commitments at the balance sheet date of GBP19.1 million.

The Directors have prepared cash flow forecasts for a period of 18 months from the date of approval of these financial statements, taking into account the Group's operating plan and budget for the year ending 31 March 2022 and projections contained in the longer-term business plan which covers the period to March 2025. After reviewing these projected cash flows together with the Group's and Company's cash balances, borrowing facilities and covenant requirements, and potential property valuation movements over that period, the Directors believe that, taking account of severe but plausible downsides, the Group and Company will have sufficient funds to meet their liabilities as they fall due for that period.

In making their assessment, the Directors have carefully considered the outlook for the Group's trading performance and cash flows as a result of the dislocations to the economy caused by the Covid-19 pandemic, taking into account the trading performance of the Group from the onset of the pandemic to the date of this statement. The Directors have also taken into account the performance of the business during the Global Financial Crisis. The Directors modelled a number of different scenarios, including material reductions in the Group's occupancy rates and property valuations, and assessed the impact of these scenarios against the Group's liquidity and the Group's banking covenants. The scenarios considered did not lead to breaching any of the banking covenants, and the Group retained sufficient liquidity to meet its financial obligations as they fall due.

Consequently, the Directors continue to adopt the going concern basis in preparing the half year report.

   2.             SEGMENTAL INFORMATION 

Revenue represents amounts derived from the provision of self storage accommodation and related services which fall within the Group's ordinary activities after deduction of trade discounts and value added tax. The Group's net assets, revenue and profit before tax are attributable to one activity, the provision of self storage accommodation and related services. These all arise in the United Kingdom.

 
                                            Six months 
                                                 ended                        Year ended 
                                          30 September           Six months     31 March 
                                                  2021                ended         2021 
                                                               30 September 
                                           (unaudited)     2020 (unaudited)    (audited) 
                                                GBP000               GBP000       GBP000 
 Open stores 
 Self storage income                            69,091               54,990      113,119 
 Insurance income                                8,681                7,099       14,517 
 Packing materials income                        1,708                1,298        2,771 
 Other income from storage customers               863                  634        1,275 
 Ancillary store rental income                     433                  353          786 
                                                80,776               64,374      132,468 
 Other revenue 
 Non-storage income                                700                  750        1,420 
 Management fees                                   325                  689        1,353 
 Total revenue                                  81,801               65,813      135,241 
                                       ---------------  -------------------  ----------- 
 

Non-storage income derives principally from rental income earned from tenants of properties awaiting development.

Further analysis of the Group's operating revenue and costs are in the Portfolio Summary and the Business and Financial Review. The seasonality of the business is discussed in note 18.

   3.             INVESTMENT INCOME 
 
                                                    Six months  Year ended 
                                     Six months 
                                       ended 30       ended 30 
                                      September      September    31 March 
                                           2021           2020        2021 
                                    (unaudited)    (unaudited)   (audited) 
                                         GBP000         GBP000      GBP000 
Bank interest receivable                      1             25          26 
Unwinding of discount on Capital 
 Goods Scheme receivable                     14             29          43 
Total                                        15             54          69 
                                   ------------  -------------  ---------- 
Change in fair value of interest 
 rate derivatives                           477              -           - 
                                   ------------  -------------  ---------- 
Total investment income                     492             54          69 
                                   ------------  -------------  ---------- 
 
   4.         FINANCE COSTS 
 
                                                                      Six months  Year ended 
                                                 Six months 
                                         ended 30 September   ended 30 September    31 March 
                                                       2021                 2020        2021 
                                                (unaudited)          (unaudited)   (audited) 
                                                     GBP000               GBP000      GBP000 
 
Interest on bank borrowings                           5,202                4,747       9,380 
Capitalised interest                                  (960)                (989)     (2,135) 
Interest on finance lease obligations                   413                  391         772 
                                        -------------------  -------------------  ---------- 
Total interest payable                                4,655                4,149       8,017 
Change in fair value of interest 
 rate derivatives                                         -                  502         148 
Total finance costs                                   4,655                4,651       8,165 
 
   5.         TAXATION 

The Group converted to a REIT in January 2007. As a result, the Group does not pay UK corporation tax on the profits and gains from its qualifying rental business in the UK if it meets certain conditions. Non-qualifying profits and gains of the Group are subject to corporation tax as normal. The Group monitors its compliance with the REIT conditions. There have been no breaches of the conditions to date.

 
                                  Six months  Year ended 
                   Six months 
                     ended 30       ended 30 
                    September      September    31 March 
                         2021           2020        2021 
                  (unaudited)    (unaudited)   (audited) 
                       GBP000         GBP000      GBP000 
Current tax: 
- Current year            704            345         798 
- Prior year               90          (165)       (162) 
                 ------------ 
                          794            180         636 
                 ------------  -------------  ---------- 
 
   6.         ADJUSTED PROFIT 
 
                                                                                                Six months 
                                                                                                     ended  Year ended 
                                                                                 Six months 
                                                                                      ended   30 September    31 March 
                                                                               30 September 
                                                                                       2021           2020        2021 
                                                                                (unaudited)    (unaudited)   (audited) 
                                                                                     GBP000         GBP000      GBP000 
Profit before tax                                                                   254,868         59,916     265,822 
Gain on revaluation of investment properties 
 - Group                                                                          (204,662)       (23,554)   (189,277) 
                          - associates (net of deferred tax) 
                           to 30 June 2021                                          (1,537)          (411)     (2,074) 
Change in fair value of interest rate 
 derivatives - Group                                                                  (477)            502         148 
                                                                - 
                                                                 associates               -             32           6 
Armadillo fair value adjustments on 
 acquisition                                                                        (1,756)              -           - 
Acquisition costs written off                                                           416              -           - 
Adjusted profit before tax                                                           46,852         36,485      74,625 
Tax                                                                                   (794)          (180)       (636) 
                                                                             --------------  -------------  ---------- 
Adjusted profit after tax (EPRA earnings)                                            46,058         36,305      73,989 
                                                                             --------------  -------------  ---------- 
 

Adjusted profit before tax which excludes gains and losses on the revaluation of investment properties, changes in fair value of interest rate derivatives, net gains and losses on disposal of investment property, and material non-recurring items of income and expenditure have been disclosed as, in the Board's view, this provides a clearer understanding of the Group's underlying trading performance.

   7.             DIVIDS 
 
                                                   Six months     Six months 
                                                        ended          ended 
                                                 30 September   30 September 
                                                         2021           2020 
                                                  (unaudited)    (unaudited) 
                                                       GBP000         GBP000 
Amounts recognised as distributions to equity 
 holders in the period: 
Final dividend for the year ended 31 March 
 2021 of 17.0 p (2020: 16.7p) per share                31,039         29,124 
 
Proposed interim dividend for the year ending 
 31 March 2022 of 20.6p (2021: 17.0p) per 
 share                                                 37,666         29,692 
                                                -------------  ------------- 
 

The proposed interim dividend of 20.6 pence per ordinary share will be paid to shareholders on 7 January 2022. The ex-div date is 2 December 2021 and the record date is 3 December 2021. The interim dividend is all Property Income Distribution.

   8.             EARNINGS PER ORDINARY SHARE 

The European Public Real Estate Association ("EPRA") has issued recommended bases for the calculation of certain per share information and these are included in the following table:

 
                             Six months ended               Six months ended 
                             30 September 2021              30 September 2020                Year ended 
                                (unaudited)                    (unaudited)             31 March 2021 (audited) 
                        Earnings   Shares      Pence  Earnings   Shares      Pence   Earnings   Shares      Pence 
                          GBP000  million  per share    GBP000  million  per share     GBP000  million  per share 
 
Basic                    254,074    178.9      142.0    59,736    173.4       34.4    265,186    174.1      152.3 
Dilutive share 
 options                       -      0.5      (0.4)         -      0.7      (0.1)          -      0.6      (0.5) 
 
Diluted                  254,074    179.4      141.6    59,736    174.1       34.3    265,186    174.7      151.8 
Adjustments: 
Gain on revaluation 
 of investment 
 properties            (204,662)        -    (114.0)  (23,554)        -     (13.5)  (189,277)        -    (108.3) 
Acquisition costs 
 written off                 416        -        0.2         -        -          -          -        -          - 
Change in fair 
 value of interest 
 rate derivatives          (477)        -      (0.3)       502        -        0.3        148        -        0.1 
Share of associates' 
 non-recurring 
 gains and losses        (3,293)        -      (1.8)     (379)        -      (0.2)    (2,068)        -      (1.2) 
EPRA - diluted            46,058    179.4       25.7    36,305    174.1       20.9     73,989    174.7       42.4 
 
EPRA - basic              46,058    178.9       25.7    36,305    173.4       20.9     73,989    174.1       42.5 
                       ---------  -------  ---------  --------  -------  ---------  ---------  -------  --------- 
 

The calculation of basic earnings is based on profit after tax for the period. The weighted average number of shares used to calculate diluted earnings per share has been adjusted for the conversion of share options.

EPRA earnings and earnings per ordinary share have been disclosed to give a clearer understanding of the Group's underlying trading performance.

   9.             NON-CURRENT ASSETS 

a) Investment property

 
                                              Investment 
                             Investment   property under  Right-of-use 
                               property     construction        assets      Total 
                                 GBP000           GBP000        GBP000     GBP000 
At 1 April 2021               1,621,990          163,537        16,644  1,802,171 
Additions                         1,374           74,291             -     75,665 
Acquisition of Armadillo        138,418                -         4,862    143,280 
Reclassification                 12,226         (12,226)             -          - 
Revaluation                     195,722            8,940             -    204,662 
Depreciation                          -                -         (702)      (702) 
 
At 30 September 2021          1,969,730          234,542        20,804  2,225,076 
                           ------------  ---------------  ------------  --------- 
 

Capital commitments at 30 September 2021 were GBP19.1 million (31 March 2021: GBP17.3 million).

b) Plant, equipment and owner-occupied property

 
                                         Leasehold                                 Fixtures, 
                                     improve-ments                              fittings and   Right of use 
                          Freehold          GBP000    Plant and          Motor        office         assets 
                          property                    machinery       vehicles     equipment         GBP000     Total 
                            GBP000                       GBP000         GBP000        GBP000                   GBP000 
Cost 
At 1 April 2021              2,275              59          439             32         1,262            872     4,939 
Additions                        2               -          113              -           480              -       595 
Retirement of fully 
 depreciated assets              -               -         (55)           (32)         (151)              -     (238) 
At 30 September 
 2021                        2,277              59          497              -         1,591            872     5,296 
 
Accumulated 
depreciation 
At 1 April 2021              (593)            (12)        (129)           (32)          (52)          (211)   (1,029) 
Charge for the 
 period                       (23)             (2)         (86)              -         (330)           (53)     (494) 
Retirement of fully 
 depreciated assets              -               -           55             32           151              -       238 
                     -------------  --------------  -----------  -------------  ------------  -------------  -------- 
At 30 September 
 2021                        (616)            (14)        (160)              -         (231)          (264)   (1,285) 
 
Net book value 
                     -------------  --------------  -----------  -------------  ------------  -------------  -------- 
At 30 September 
 2021                        1,661              45          337              -         1,360            608     4,011 
 
At 31 March 
 2021                        1,682              47          310              -         1,210            661     3,910 
 
 

c) Intangible assets

The intangible asset relates to the Big Yellow brand, which was acquired through the acquisition of Big Yellow Self Storage Company Limited in 1999. The carrying value of GBP1.4 million remains unchanged from the prior year as there is considered to be no impairment in the value of the asset. The asset has an indefinite life and is tested annually for impairment or more frequently if there are indicators of impairment.

d) Investment

During the prior year, the Group invested GBP450,000 in DS Operations Centre Limited, a company which provides out-of-hours monitoring and alarm receiving services, including for the Group's stores. The investment is carried at cost and tested annually for impairment.

e) Investment in associates

Armadillo

The Group had a 20% interest in Armadillo Storage Holding Company Limited ("Armadillo 1") and a 20% interest in Armadillo Storage Holding Company 2 Limited ("Armadillo 2"). Both interests were accounted for as associates, using the equity method of accounting. On 1 July 2021 the Group acquired the remaining interest in Armadillo 1 and Armadillo 2 that it did not previously own. From this date, Armadillo 1 and Armadillo 2 are accounted for as a wholly owned subsidiaries of the Group. The results up to this date are equity accounted as shown in the note below:

 
                                       Armadillo 1                                        Armadillo 2 
                    30 September 2021  30 September 2020               30 September 2021  30 September 2020 
                          (unaudited)        (unaudited)     31 March        (unaudited)        (unaudited)     31 March 
                               GBP000             GBP000         2021             GBP000             GBP000         2021 
                                                            (audited)                                          (audited) 
                                                               GBP000                                             GBP000 
At the beginning 
 of the period                  8,698              7,027        7,027              5,022              4,233        4,233 
Share of results 
 (see below)                    2,413                529        2,013              1,264                359        1,135 
Dividends                       (211)              (171)        (342)              (224)              (173)        (346) 
Acquisition of 
 remaining 
 interest                    (10,900)                  -            -            (6,062)                  -            - 
 
           At the 
            end of 
            the 
            period                  -              7,385        8,698                  -              4,419        5,022 
                    -----------------  -----------------  -----------  -----------------  -----------------  ----------- 
 

The figures below show the trading results of Armadillo, and the Group's share of the results and the net assets up to the point of acquisition of the remaining interest in the Partnerships on 1 July 2021.

 
                                                                    Armadillo 1                                                                        Armadillo 2 
                                                                Six months ended 30 September 2020                                                 Six months ended 30 September 2020 
                                  1 April 2021 to 30 June 2021                         (unaudited)      Year ended   1 April 2021 to 30 June 2021                         (unaudited)      Year ended 
                                                   (unaudited)                              GBP000        31 March                    (unaudited)                              GBP000        31 March 
                                                        GBP000                                                2021                         GBP000                                                2021 
                                                                                                         (audited)                                                                          (audited) 
                                                                                                            GBP000                                                                             GBP000 
         Income statement 
         (100%) 
         Revenue                                         3,170                               5,477          11,338                          1,876                               3,167           6,664 
         Cost of sales                                 (1,601)                             (2,834)         (5,967)                          (793)                             (1,441)         (2,953) 
         Administrative 
          expenses                                       (126)                               (205)           (345)                           (45)                                (66)           (161) 
         Operating profit                                1,443                               2,438           5,026                          1,038                               1,660           3,550 
         Goodwill write-off                              (982)                                   -               -                        (1,849)                                   -               - 
         Gain on the 
          revaluation of 
          investment properties                          4,888                               1,510           8,565                          2,795                               1,025           4,235 
         Net interest payable                            (274)                               (616)         (1,177)                          (183)                               (387)           (752) 
         Fair value movement of 
          interest rate 
          derivatives                                        -                                (97)            (18)                              -                                (63)            (11) 
         Current and deferred 
          tax                                            6,988                               (587)         (2,330)                          4,519                               (441)         (1,347) 
                                 -----------------------------  ----------------------------------  --------------  -----------------------------  ----------------------------------  -------------- 
         Profit attributable to 
          shareholders                                  12,063                               2,648          10,066                          6,320                               1,794           5,675 
         Dividends paid                                (1,054)                               (854)         (1,708)                        (1,120)                               (865)         (1,730) 
         Retained profit                                11,009                               1,794           8,358                          5,200                                 929           3,945 
                                 -----------------------------  ----------------------------------                  -----------------------------  ---------------------------------- 
 
         Group share (20%) 
         Operating profit                                  289                                 488           1,005                            208                                 332             710 
         Goodwill write-off                              (196)                                   -               -                          (370)                                   -               - 
         Gain on the 
          revaluation of 
          investment properties                            978                                 302           1,713                            559                                 205             847 
         Net interest payable                             (55)                               (124)           (235)                           (37)                                (77)           (150) 
         Fair value movement of 
          interest rate 
          derivatives                                        -                                (19)             (4)                              -                                (13)             (2) 
         Current and deferred 
          tax                                            1,397                               (118)           (466)                            904                                (88)           (270) 
                                 -----------------------------  ----------------------------------  --------------  -----------------------------  ----------------------------------  -------------- 
         Profit attributable to 
          shareholders                                   2,413                                 529           2,013                          1,264                                 359           1,135 
         Dividends paid                                  (211)                               (171)           (342)                          (224)                               (173)           (346) 
                                 -----------------------------  ----------------------------------  --------------  -----------------------------  ----------------------------------  -------------- 
         Retained profit                                 2,202                                 358           1,671                          1,040                                 186             789 
                                 -----------------------------  ----------------------------------  --------------  -----------------------------  ----------------------------------  -------------- 
         Associates' net assets                              -                               7,385           8,698                              -                               4,419           5,022 
                                 -----------------------------  ----------------------------------  --------------  -----------------------------  ----------------------------------  -------------- 
 
          Balance sheet (100%)               30 September 2021                   30 September 2020                              30 September 2021                   30 September 2020 
                                                   (unaudited)                         (unaudited)   31 March 2021                    (unaudited)                         (unaudited)   31 March 2021 
                                                        GBP000                              GBP000       (audited)                         GBP000                              GBP000       (audited) 
                                                                                                            GBP000                                                                             GBP000 
         Investment property                                 -                              73,416          81,075                              -                              44,960          48,425 
         Interest in leasehold 
          properties                                         -                               1,927           2,750                              -                               2,396           2,219 
         Other non-current 
          assets                                             -                               1,213           1,204                              -                               2,021           2,004 
         Current assets                                      -                               1,195           1,169                              -                                 605             339 
         Current liabilities                                 -                             (3,175)         (2,923)                              -                             (1,934)         (1,946) 
         Derivative financial 
          instruments                                        -                                (97)            (18)                              -                                (63)            (11) 
         Non-current 
          liabilities                                        -                            (37,553)        (39,767)                              -                            (25,889)        (25,918) 
         Net assets (100%)                                   -                              36,926          43,490                              -                              22,096          25,112 
                                 -----------------------------  ----------------------------------                  -----------------------------  ---------------------------------- 
 

Accounting for the acquisition - Armadillo 1

The following provides a breakdown of the fair value of the assets and liabilities acquired. The investment properties have been valued by the Directors with regard to the March 2021 property valuations performed by JLL uplifted for the capital movement in the three month period to the Acquisition date.

 
                                                           GBP000 
  Investment property                                      86,553 
  Other non-current assets                                  2,949 
  Current assets                                            1,981 
  Current liabilities                                     (3,825) 
  Bank borrowings                                        (30,444) 
  Other non-current liabilities                           (2,717) 
 
         Net assets (100%)                                 54,497 
                                                  --------------- 
 
                                                           GBP000 
  Net assets acquired (80% of GBP54.5 million)             43,598 
  Satisfied by cash consideration                        (43,598) 
                                                  --------------- 
                                                                - 
                                                  --------------- 
 

From the date of acquisition of the Partnership on 1 July 2021 to 30 September 2021, the revenue of the Partnership was GBP3.5 million, and the statutory profit before tax was GBP4.7 million.

Accounting for the acquisition - Armadillo 2

The following provides a breakdown of the fair value of the assets and liabilities acquired. The investment properties have been valued by the Directors with regard to the March 2021 property valuations performed by JLL uplifted for the capital movement in the three month period to the Acquisition date.

 
                                                           GBP000 
  Investment property                                      51,865 
  Other non-current assets                                  2,285 
  Current assets                                              961 
  Current liabilities                                     (2,969) 
  Bank borrowings                                        (20,116) 
  Other non-current liabilities                           (1,707) 
 
         Net assets (100%)                                 30,319 
                                                  --------------- 
 
                                                           GBP000 
  Net assets acquired (80% of GBP30.3 million)             24,255 
  Satisfied by cash consideration                        (24,255) 
                                                  --------------- 
                                                                - 
                                                  --------------- 
 

From the date of acquisition of the Partnership on 1 July 2021 to 30 September 2021, the revenue of the Partnership was GBP2.1 million, and the statutory profit before tax was GBP1.5 million.

Fair value adjustments

On acquisition of the remaining interests in Armadillo, the Group made certain fair value adjustments to the Armadillo balance sheets. These were:

- an increase in the investment property valuation, reflecting the fair value of the assets at 30 June 2021;

   -       the write off of goodwill contained in the Armadillo balance sheets; and 

- the write back of deferred tax (principally on revaluation surpluses) contained in the Armadillo balance sheets, with Armadillo joining the Big Yellow REIT on acquisition.

These fair value adjustments are shown in the share of profit of the associates in the period to 30 June 2021 and amounted to a gain of GBP3.3 million.

Acquisition costs

The Group incurred acquisition-related costs of GBP0.4 million on legal fees and stamp duty. These costs have been included in administrative expenses.

Proforma impact of acquisitions

For the three months ended 30 September 2021, the Armadillo Partnerships contributed revenue of GBP5.6 million and statutory profit before tax of GBP6.2 million. If the acquisition had occurred on 1 April 2021, management estimates that consolidated revenue would have been GBP86.5 million for the period and consolidated profit before tax for the period would have been GBP267.1 million. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 April 2021, other than for investment property, whereby the 30 June 2021 valuations were different compared to the valuations at 31 March 2021.

   10.          TRADE AND OTHER RECEIVABLES 
 
                                  30 September   30 September     31 March 
                                          2021           2020         2021 
                                   (unaudited)    (unaudited)    (audited) 
                                        GBP000         GBP000       GBP000 
Current 
Trade receivables                        4,767          4,173        3,562 
Other receivables                          646          1,176        1,999 
Prepayments and accrued income           3,581          2,219        2,203 
 
                                         8,994          7,568        7,764 
                                  ------------  -------------  ----------- 
Non-current 
                                  ------------  -------------  ----------- 
Capital Goods Scheme receivable              -            159          163 
                                  ------------  -------------  ----------- 
 
   11.       TRADE AND OTHER PAYABLES 
 
                               30 September  30 September    31 March 
                                       2021          2020        2021 
                                (unaudited)   (unaudited)   (audited) 
                                     GBP000        GBP000      GBP000 
Current 
Trade payables                        4,997         4,177       4,052 
Other payables                       12,812        14,408       8,036 
Accruals and deferred income         27,763        19,053      22,475 
 
                                     45,572        37,638      34,563 
                               ------------  ------------  ---------- 
 
   12.       BORROWINGS 
 
                                     30 September   30 September    31 March 
                                             2021           2020        2021 
                                      (unaudited)    (unaudited)   (audited) 
                                           GBP000         GBP000      GBP000 
Aviva loan                                  2,935          2,795       2,865 
Current borrowings                          2,935          2,795       2,865 
 
Aviva loan                                110,450        113,385     111,935 
M&G loan                                   70,000         70,000      70,000 
Armadillo bank loans                       47,950              -           - 
Bank borrowings                           176,000        110,500     152,500 
Unamortised debt arrangement costs        (2,038)        (2,098)     (1,862) 
 
Non-current borrowings                    402,362        291,787     332,573 
 
Total borrowings                          405,297        294,582     335,438 
                                     ------------  -------------  ---------- 
 

On 30 September 2021, the Group signed new loan facilities with Aviva and M&G, adding GBP50 million to each loan. These loans were funded in early October and used to repay revolving bank debt.

The Group does not hedge account for its interest rate swaps and states them at fair value, with changes in fair value included in the income statement. The gain in the income statement for the period of these interest rate swaps was GBP477,000 (2020: loss of GBP502,000). The reconciliation of the balance sheet position is shown below:

 
                                                                           GBP000 
Creditor at 31 March 2021                                                   (475) 
Change in fair value of derivatives during the period                         477 
Fair value of Armadillo derivatives on acquisition of remaining interest     (29) 
                                                                           ------ 
Creditor at 30 September 2021                                                (27) 
                                                                           ------ 
 

At 30 September 2021 the Group was in compliance with all loan covenants. The movement in the Group's loans are shown net in the cash flow statement as the bank loan is a revolving facility and is repaid and redrawn each month.

   13.       ADJUSTED NET ASSETS PER SHARE 

EPRA's Best Practices Recommendations guidelines contain three Net Asset Value (NAV) metrics: EPRA Net Tangible Assets (NTA), EPRA Net Reinstatement Value (NRV) and EPRA Net Disposal Value (NDV).

EPRA NTA is considered to be most consistent with the nature of Big Yellow's business which provides sustainable long-term progressive returns. EPRA NTA is shown in the table below. This measure is further adjusted by the adjustment the Group makes for purchaser's costs, which is the Group's Adjusted Net Asset Value (or Adjusted NAV).

Basic net assets per share are shareholders' funds divided by the number of shares at the period end. Any shares currently held in the Group's Employee Benefit Trust are excluded from both net assets and the number of shares. Adjusted net assets per share include: the effect of those shares issuable under employee share option schemes and the effect of alternative valuation methodology assumptions (see note 14).

 
                        Six months ended                   Six months ended                 Year ended 31 March 
                        30 September 2021                  30 September 2020                        2021 
                      Equity                             Equity                             Equity 
                attributable                       attributable                       attributable 
                 to ordinary               Pence    to ordinary               Pence    to ordinary               Pence 
                shareholders     Shares      per   shareholders     Shares      per   shareholders     Shares      per 
                      GBP000    million    share         GBP000    million    share         GBP000    million    share 
Basic NAV          1,777,076      182.8    972.1      1,276,278      174.7    730.6      1,453,895      174.8    831.9 
  Share and 
   save 
   as you earn 
   schemes             1,660        1.5    (7.0)          1,453        1.5    (5.4)          1,451        1.4    (5.9) 
Diluted NAV        1,778,736      184.3    965.1      1,277,731      176.2    725.2      1,455,346      176.2    826.0 
                ------------  ---------  -------  -------------  ---------  -------  -------------  ---------  ------- 
  Fair value 
   of 
   derivatives 
   - Group                27          -        -            829          -      0.4            475          -      0.3 
  Fair value 
   of 
   derivatives 
   - share of 
   associate               -          -        -             32          -        -              6          -        - 
  Deferred tax 
   in 
   respect of 
   valuation 
   surpluses - 
   associate               -          -        -          1,428          -      0.8          1,818          -      1.0 
  Intangible 
   assets            (1,433)          -    (0.7)        (1,433)          -    (0.8)        (1,433)          -    (0.8) 
EPRA NTA           1,777,330      184.3    964.4      1,278,587      176.2    725.6      1,456,212      176.2    826.5 
                ------------  ---------  -------  -------------  ---------  -------  -------------  ---------  ------- 
  Valuation 
   methodology 
   assumption 
   (see 
   note 15) 
   (GBP000)          129,500          -     70.2         94,757          -     53.8        110,393          -     62.7 
                ------------  ---------  -------  -------------  ---------  -------  -------------  ---------  ------- 
Adjusted NAV       1,906,830      184.3  1,034.6      1,373,344      176.2    779.4      1,566,605      176.2    889.2 
                ------------  ---------  -------  -------------  ---------  -------  -------------  ---------  ------- 
 
   14.       VALUATIONS OF INVESTMENT PROPERTY 

The Group has classified the fair value investment property and the investment property under construction within Level 3 of the fair value hierarchy. There has been no transfer to or from Level 3 in the period.

The freehold and leasehold investment properties have been valued at 30 September 2021 by the Directors. The valuation has been carried out in accordance with the same methodology as the year end valuations prepared by CBRE LLP ("CBRE") and Jones Lang Lasalle. Please see the accounts for the year ended 31 March 2021 for details of this methodology.

The Directors' valuations reflect the latest cash flows derived from each of the stores at 30 September 2021. In performing the valuations, the Directors consulted with CBRE and JLL on the capitalisation rates used in the valuations. The Directors, as advised by CBRE and JLL, consider that the capitalisation rates for prime self storage stores have reduced by 12.5 bps since the start of the financial year.

The Directors have also made some minor amendments to a couple of the valuation assumptions, namely the adjustment of stable occupancy levels on certain stores that are consistently trading ahead of the previously used assumptions and to certain assumptions on net achieved rents within the valuations. Other than the above, the Directors believe the core assumptions used by CBRE and JLL in the March 2021 valuations are still appropriate at the September valuation date. See the Group's annual report for the year ended 31 March 2021 for the full detail of the valuation methodology.

Sensitivities

Self storage valuations are complex, derived from data which is not widely publicly available and involve a degree of judgement. For these reasons we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. Inputs to the valuations, some of which are 'unobservable' as defined by IFRS 13, include capitalisation yields, stable occupancy rates, and rental growth rates. The existence of an increase of more than one unobservable input would augment the impact on valuation. The impact on the valuation would be mitigated by the inter-relationship between unobservable inputs moving in opposite directions. For example, an increase in stable occupancy may be offset by an increase in yield, resulting in no net impact on the valuation. A sensitivity analysis showing the impact on valuations of changes in yields and stable occupancy is shown below:

 
                   Impact of a change in capitalisation     Impact of a change in stabilised 
                                   rates                           occupancy assumption 
                    25 bps decrease      25 bps increase       1% increase         1% decrease 
                 ------------------  -------------------  ----------------  ------------------ 
 Reported Group     GBP84.0 million    (GBP76.7 million)   GBP29.6 million   (GBP29.5 million) 
                 ------------------  -------------------  ----------------  ------------------ 
 

A sensitivity analysis has not been provided for a change in the rental growth rate adopted as there is a relationship between this measure and the discount rate adopted. So, in theory, an increase in the rental growth rate would give rise to a corresponding increase in the discount rate and the resulting value impact would be limited.

Valuation assumption for purchaser's costs

The Group's investment property assets have been valued for the purposes of the financial statements after deducting notional purchaser's cost of circa 6.0% to 6.8% of gross value, as if they were sold directly as property assets. The valuation is an asset valuation that is entirely linked to the operating performance of the business. The assets would have to be sold with the benefit of operational contracts, employment contracts and customer contracts, which would be very difficult to achieve except in a corporate structure.

This approach follows the logic of the valuation methodology in that the valuation is based on a capitalisation of the net operating income after allowing for the deduction of operational costs and an allowance for central administration costs. Sale in a corporate structure would result in a reduction in the assumed Stamp Duty Land Tax but an increase in other transaction costs, reflecting additional due diligence, resulting in a reduced notional purchaser's cost of 2.75% of gross value. All the significant sized transactions that have been concluded in the UK in recent years were completed in a corporate structure. The Directors have therefore carried out a valuation on the above basis, and this results in a higher property valuation at 30 September 2021 of GBP2,333.8 million (GBP129.5 million higher than the value recorded in the balance sheet which translates to 70.2 pence per share. We have included this revised valuation in the adjusted diluted net asset calculation (see note 13).

   15.          FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURES 

The table below sets out the categorisation of the financial instruments held by the Group at 30 September 2021. Where the financial instruments are held at fair value the valuation level indicates the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Valuations categorised as Level 2 are obtained from third parties. If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

 
                                                30 September  30 September 
                                                        2021          2020 
                                                 (unaudited)   (unaudited) 
                                     Valuation 
                                         level        GBP000        GBP000 
         Interest rate derivatives           2            27           475 
 
   16.          RELATED PARTY TRANSACTIONS 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

AnyJunk Limited

Jim Gibson is a Non-Executive Director and shareholder in AnyJunk Limited, and Adrian Lee is a shareholder in AnyJunk Limited. During the period AnyJunk Limited provided waste disposal services to the Group on normal commercial terms amounting to GBP4,000 (2020: GBP11,000).

Transactions with Armadillo

As described in note 9e, the Group had a 20% interest in Armadillo Storage Holding Company Limited and a 20% interest in Armadillo Storage Holding Company 2 Limited. The Group acquired the remaining interest in both companies that it did not own on 1 July 2021. From this date, the Companies were wholly owned subsidiaries of the Group and hence the transactions subsequent to that date are not disclosable. Up to the date of acquisition, the Group entered into transactions with the Companies on normal commercial terms as shown in the table below:

 
                                        1 April 2021 
                                          to 30 June  30 September 
                                                2021          2020  31 March 2021 
                                         (unaudited)   (unaudited)      (audited) 
                                              GBP000        GBP000         GBP000 
         Fees earned from Armadillo 1            238           506            977 
         Fees earned from Armadillo 2             87           183            376 
         Balance due from Armadillo 1              -           151             67 
         Balance due from Armadillo 2              -            24             27 
 

London Children's Ballet

The Group signed a Section 106 agreement with Wandsworth Council relating to the development of our Battersea store, which required the Group to provide cultural space to Wandsworth Borough Council. During the period the Group granted a twenty year lease over this space to London Children's Ballet at a peppercorn rent, who in turn have agreed to enter into a Social Agreement with Wandsworth Borough Council coterminous with the lease. Jim Gibson is the Chairman of Trustees of the London Children's Ballet.

DS Operations Centre Limited

In December 2020, the Group invested GBP450,000 in DS Operations Centre Limited ("DSOC"). DSOC provided alarm and CCTV monitoring services to the Group under normal commercial terms during the period, amounting to GBP132,000 (2020: GBPnil).

Treepoints Limited

Jim Gibson is a Non-Executive Director and an investor in City Stasher Limited, which in turn has a minority investment in Treepoints Limited. Treepoints Limited provided offsetting tree planting services in respect of our online packing material sales, under normal commercial terms during the period, amounting to GBP2,000 (2020: GBPnil).

   17.          CASH FLOW NOTES 

a) Reconciliation of profit after tax to cash generated from operations

 
                                                  Six months     Six months        Year 
                                                       ended          ended       ended 
                                                30 September   30 September    31 March 
                                                        2021           2020        2021 
                                                 (unaudited)    (unaudited)   (audited) 
                                         Note         GBP000         GBP000      GBP000 
Profit after tax                                     254,074         59,736     265,186 
Taxation                                                 794            180         636 
Share of profit of associates                        (3,677)          (888)     (3,148) 
Investment income                                      (492)           (54)        (69) 
Finance costs                                          4,655          4,651       8,165 
                                               -------------  -------------  ---------- 
Operating profit                                     255,354         63,625     270,770 
 
Gain on the revaluation of investment     9a, 
 properties                                14      (204,662)       (23,554)   (189,277) 
Depreciation of plant, equipment and 
 owner-occupied property                   9b            441            404         803 
Depreciation of finance lease capital 
 obligations                                             755            641       1,290 
Employee share options                                 1,670          1,182       2,869 
                                               -------------  -------------  ---------- 
Cash generated from operations pre working 
 capital movements                                    53,558         42,298      86,455 
 
Decrease in inventories                                   10             31          46 
Decrease in receivables                                  369            145         841 
Increase/(decrease) in payables                        3,926          5,086       (211) 
                                               -------------  -------------  ---------- 
Cash generated from operations                        57,863         47,560      87,131 
                                               -------------  -------------  ---------- 
 
   b)   Reconciliation of net cash flow to movement in net debt 
 
                                               Six months     Six months        Year 
                                                    ended          ended       ended 
                                             30 September   30 September    31 March 
                                                     2021           2020        2021 
                                              (unaudited)    (unaudited)   (audited) 
                                                   GBP000         GBP000      GBP000 
 
Net decrease in cash and cash equivalents         (2,411)       (45,001)    (39,096) 
Cash flow from movement in debt financing        (70,035)        105,348      64,728 
 
Change in net debt resulting from cash 
 flows                                           (72,446)         60,347      25,632 
                                            -------------  -------------  ---------- 
 
Movement in net debt in the period               (72,446)         60,347      25,632 
Net debt at start of period                     (324,978)      (350,610)   (350,610) 
 
Net debt at end of period                       (397,424)      (290,263)   (324,978) 
                                            -------------  -------------  ---------- 
 
   18.          RISKS AND UNCERTAINTIES 

The risks facing the Group for the remaining six months of the financial year are consistent with those outlined in the Annual Report for the year ended 31 March 2021. The risk mitigating factors listed in the 2021 Annual Report are still appropriate.

The Covid-19 pandemic continues to have an impact on economic activity, and the risk of new variants evading vaccines remains. This may create economic headwinds in the quarter to December 2021 and into 2022, which may have an impact on the demand for self storage.

The value of Big Yellow's property portfolio is affected by the conditions prevailing in the property investment market and the general economic environment. Accordingly, the Group's net asset value can rise and fall due to external factors beyond management's control. The pandemic and other uncertainties in the global economy look set to continue. We have a high-quality prime portfolio of assets that should help to mitigate the impact of this on the Group.

Self storage is a seasonal business, and we typically lose occupancy in the December quarter. The new year typically sees an increase in activity, occupancy and revenue growth. The visibility we have in the business is relatively limited at three to four weeks and is based on the net reservations we have in hand, which are currently in line with our expectations.

There is a risk that our customers may default on their rent payments, however we have not seen an increase in bad debts since the onset of the pandemic. We have approximately 77,000 occupied rooms and this, coupled with the diversity of our customers' reasons for using storage, mean the risk of individual tenant default to Big Yellow is low. Over 80% of our customers pay by direct debit and we take a deposit from all customers. Furthermore, we have a right of lien over customers' goods, so in the ultimate event of default, we are able to auction the goods to recover the debts.

   19.          GLOSSARY 
 
Adjusted earnings       The increase in adjusted eps period-on-period. 
 growth 
  Adjusted eps          Adjusted profit after tax divided by the diluted 
                         weighted average number of shares in issue during 
                         the financial period. 
  Adjusted NAV          EPRA NTA adjusted for an investment property valuation 
                         carried out at purchasers' costs of 2.75%, see 
                         note 13. 
  Adjusted profit       The Company's pre-tax EPRA earnings measure with 
   before tax            additional Company adjustments. 
  Average net achieved  Storage revenue divided by average occupied space 
   rent per sq ft        over the period. 
Average rental          The growth in average net achieved rent per sq 
 growth                  ft period-on-period. 
BREEAM                  An environmental rating assessed under the Building 
                         Research Establishment's Environmental Assessment 
                         Method. 
Carbon intensity        Carbon emissions divided by the Group's average 
                         occupied space. 
Closing net rent        Annual storage revenue generated from in-place 
 per sq ft               customers divided by occupied space at the balance 
                         sheet date. 
Committed facilities    Available undrawn debt facilities plus cash and 
                         cash equivalents. 
Debt                    Long-term and short-term borrowings, as detailed 
                         in note 12, excluding finance leases and debt issue 
                         costs. 
  Earnings per share    Profit for the financial period attributable to 
   (eps)                 equity shareholders divided by the average number 
                         of shares in issue during the financial period. 
EBITDA                  Earnings before interest, tax, depreciation and 
                         amortisation. 
EPRA                    The European Public Real Estate Association, a 
                         real estate industry body. This organisation has 
                         issued Best Practice Recommendations with the intention 
                         of improving the transparency, comparability and 
                         relevance of the published results of listed real 
                         estate companies in Europe. 
EPRA earnings           The IFRS profit after taxation attributable to 
                         shareholders of the Company excluding investment 
                         property revaluations, gains/losses on investment 
                         property disposals and changes in the fair value 
                         of financial instruments. 
EPRA earnings           EPRA earnings divided by the average number of 
 per share               shares in issue during the period. 
EPRA NTA per share      EPRA NTA divided by the diluted number of shares 
                         at the year end. 
  EPRA net tangible     IFRS net assets excluding the mark-to-market on 
   asset value (EPRA     interest rate derivatives, deferred taxation on 
   NTA)                  property valuations where it arises, and intangible 
                         assets. It is adjusted for the dilutive impact 
                         of share options. 
Equity                  All capital and reserves of the Group attributable 
                         to equity holders of the Company. 
Gross property          The sum of investment property and investment property 
 assets                  under construction. 
Gross value added       The measure of the value of goods and services 
                         produced in an area, industry or sector of an economy. 
Interest cover          The ratio of operating cash flow divided by interest 
                         paid (before exceptional finance costs, capitalised 
                         interest and changes in fair value of interest 
                         rate derivatives). This metric is provided to give 
                         readers a clear view of the Group's financial position. 
Like-for-like           Excludes the closing occupancy of new stores acquired, 
 occupancy               opened or closed in the current or preceding financial 
                         year in both the current financial year and comparative 
                         figures. This excludes Camberwell, Bracknell, Battersea, 
                         Uxbridge and the Armadillo stores. 
  Like-for-like         Excludes the impact of new stores acquired, opened 
   store revenue         or stores closed in the current or preceding financial 
                         year in both the current year and comparative figures. 
                         This excludes Camberwell, Bracknell, Battersea, 
                         Uxbridge and the Armadillo stores. 
 
   19.          GLOSSARY (CONTINUED) 
 
LTV (loan to value)         Net debt expressed as a percentage of the external 
                             valuation of the Group's investment properties. 
  Maximum lettable          The total square foot (sq ft) available to rent 
   area (MLA)                to customers. 
Move-ins                    The number of customers taking a storage room in 
                             the defined period. 
Move-outs                   The number of customers vacating a storage room 
                             in the defined period. 
NAV                         Net asset value. 
Net debt                    Gross borrowings less cash and cash equivalents. 
Net initial yield           The forthcoming year's net operating income expressed 
                             as a percentage of capital value, after adding 
                             notional purchaser's costs. 
  Net operating             Store EBITDA after an allocation of central overhead 
   income 
  Net operating             The projected net operating income delivered by 
   income on stabilisation   a store when it reaches a stable level of occupancy. 
Net promoter score          The Net Promoter Score is an index ranging from 
 (NPS)                       -100 to 100 that measures the willingness of customers 
                             to recommend a company's products or services to 
                             others. The Company measures NPS based on surveys 
                             sent to all of its move-ins and move-outs. 
Net rent per sq             Storage revenue generated from in place customers 
 ft                          divided by occupancy. 
Occupancy                   The space occupied by customers divided by the 
                             MLA expressed as a %. 
Occupied space              The space occupied by customers in sq ft. 
  Other storage             Packing materials, insurance and other storage 
   related income            related fees. 
Pipeline                    The Group's development sites. 
  Property Income           A dividend, generally subject to withholding tax, 
   Distribution (PID)        that a UK REIT is required to pay from its tax-exempt 
                             property rental business and which is taxable for 
                             UK-resident shareholders at their marginal tax 
                             rate. 
  REGO                      Renewable Energy Guarantees of Origin 
  REIT                      Real Estate Investment Trust. A tax regime which 
                             in the UK exempts participants from corporation 
                             tax both on UK rental income and gains arising 
                             on UK investment property sales, subject to certain 
                             conditions. 
  REVPAF                    Total store revenue divided by the average maximum 
                             lettable area in the period. 
  Store EBITDA              Store earnings before interest, tax, depreciation 
                             and amortisation. 
  TCFD                      Task Force on Climate Related Financial Disclosure 
  Total shareholder         The growth in value of a shareholding over a specified 
   return (TSR)              period, assuming dividends are reinvested to purchase 
                             additional units of shares. 
 

INDEPENT REVIEW REPORT TO BIG YELLOW GROUP PLC

Conclusion

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2021 which comprises the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Changes in Equity and Condensed Consolidated Cash Flow Statement and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2021 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 1, the latest annual financial statements of the Group were prepared in accordance with International Financial Reporting Standards as adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and the next annual financial statements will be prepared in accordance with UK-adopted international accounting standards. The Directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted for use in the UK.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Anna Jones

for and on behalf of KPMG LLP

Chartered Accountants

2 Forbury Place

33 Forbury Road

Reading

RG1 3AD

22 November 2021

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November 22, 2021 11:29 ET (16:29 GMT)

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