PLUS1
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Safestore Holdings Plc | LSE:SAFE | London | Ordinary Share | GB00B1N7Z094 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.00 | -0.2% | 1,004.00 | 1,003.00 | 1,005.00 | 1,020.00 | 995.00 | 995.00 | 333,960 | 16:35:04 |
| Industry Sector | Turnover (m) | Profit (m) | EPS - Basic | PE Ratio | Market Cap (m) |
|---|---|---|---|---|---|
| Real Estate Investment & Services | 186.8 | 404.6 | 181.2 | 5.5 | 2,118 |
Safestore Holdings plc Fourth quarter trading update
24/11/2022 7:00am
UK Regulatory (RNS & others)
Safestore (LSE:SAFE)
Historical Stock Chart
From Nov 2022 to Feb 2023
TIDMSAFE
RNS Number : 4167H
Safestore Holdings plc
24 November 2022
24 November 2022
Safestore Holdings plc
Fourth quarter trading update for the period 1 August 2022 to 31 October 2022
Solid performance and significant strategic progress complete an excellent year
Group Operating Performance Q4 2022 Q4 2021(2) Change Change-
CER(1)
----------------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 56.8 51.1 11.2% 10.8%
Revenue (GBP'm)- year-to-date
(YTD) 212.5 186.8 13.8% 14.3%
Closing Occupancy (let sq ft-
million)(3) 6.317 5.883 7.4% n/a
Closing Occupancy (% of MLA) 82.1% 84.5% -2.4ppts n/a
Maximum Lettable Area (MLA -million)(4) 7.700 6.960 10.6% n/a
Average Storage Rate (GBP) 29.64 28.42 4.3% 3.9%
Average Storage Rate (GBP)- YTD 29.25 26.95 8.5% 9.2%
Group Operating Performance- Q4 2022 Q4 2021(2) Change Change-
like-for-like(3) CER(1)
--------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 53.5 50.7 5.5% 5.1%
Revenue (GBP'm)- year-to-date
(YTD) 204.3 185.5 10.1% 10.7%
Closing Occupancy (let sq ft-
million)(4) 5.725 5.838 -1.9% n/a
Closing Occupancy (% of MLA)(5) 83.1% 85.2% -2.1ppts n/a
Average Occupancy (let sq ft-
million) 5.786 5.884 -1.7% n/a
Average Occupancy (let sq ft-
million)- YTD 5.723 5.685 0.7% n/a
Average Storage Rate (GBP) 30.84 28.52 8.1% 7.8%
Average Storage Rate (GBP)- YTD 29.99 27.03 11.0% 11.5%
Highlights
-- Group revenue for the quarter in CER(1) up 10.8% and 11.2% at actual exchange rates -- Like-for-like(5) Group revenue for the quarter in CER(1) up 5.1%
o UK up 5.8%
o Paris up 2.5%
o Spain up 6.8%
-- Like-for-like(5) average rate for the quarter up 7.8% in CER(1)
o UK up 9.2%
o Paris up 3.3%
o Spain up 1.9%
-- Like-for-like(5) occupancy at 83.1% (2021: 85.2%)
o UK down 2.6ppts at 83.0% (2021: 85.6%)
o Paris down 0.2ppts at 83.4% (2021 83.6%)
o Spain down 0.1ppts at 85.9% (2021: 86.0%)
-- Revolving Credit Facilities (RCF's) refinanced with a new increased GBP400m unsecured multi-currency four-year facility (with two one-year extension options). Margins remain at 1.25% in line with previous RCF's and all facilities, including private placement notes, are now unsecured.
-- Eight new sites secured since our last update including three in London, two in Paris, one in Madrid and two in the Netherlands.
-- Group Property Pipeline of 1.4m sq ft representing c. 18% of the existing portfolio. -- Lease extensions agreed at Sunderland and London- Crayford.
Frederic Vecchioli, Chief Executive Officer, commented:
"I am pleased to report the final quarter of an excellent year in which we delivered significant strategic progress having enhanced our funding capacity and secured eight new development sites. The strong performance for the year is especially pleasing as it follows a record year in 2021. The result was driven by strong revenue growth in the UK market, good performances in our Parisian and Spanish businesses, and seven months' contribution from our Benelux business, which was acquired in March 2022.
Early trading in the new financial year shows solid enquiry and new let growth compared to last year with rates paid by new customers continuing to grow.
Over the last six years, the group has developed or acquired 66 stores and expanded into three new countries (Netherlands, Belgium and Spain). In addition, our development pipeline of 29 new stores represents a further c. 18% of our existing portfolio's MLA.
Our strong and flexible balance sheet has been significantly enhanced by the agreement of a new unsecured four year GBP400m multi-currency revolving credit facility which increases funding capacity, allowing us to continue to consider strategic, value-accretive investments as and when they arise.
We have delivered a strong occupancy performance over recent years and, after a significant level of acquisition and development activity over the last six years, we still have 1.4m square feet of fully invested currently unlet space in our UK, Paris, Spain and Benelux markets in addition to 1.4m of pipeline space. Our most significant upside opportunity is from filling our existing unlet space and that remains our priority. The business has demonstrated its inherent resilience in recent times and, despite the challenging macroeconomic environment, we are confident in the future of the business. As guided at our third quarter results announcement, the Board anticipates that the business will deliver Adjusted Diluted EPRA Earnings per Share (7) for 2021/22 of at least 47p".
Business Highlights
UK Trading Performance
UK Operating Performance Q4 2022 Q4 2021(2) Change ----------------------------------------- -------- ----------- --------- Revenue (GBP'm) 42.8 40.0 7.0% Revenue (GBP'm)- year-to-date (YTD) 163.0 144.1 13.1% Closing Occupancy (let sq ft- million)(3) 4.637 4.690 -1.1% Closing Occupancy (% of MLA) 82.6% 85.4% -2.8ppts Maximum Lettable Area (MLA- million)(4) 5.620 5.490 2.4% Average Storage Rate (GBP) 29.58 27.12 9.1% Average Storage Rate (GBP)- YTD 28.79 25.32 13.7% UK Operating Performance- like-for-like(3) Q4 2022 Q4 2021(2) Change -------------------------------------------- -------- ----------- --------- Revenue (GBP'm) 41.9 39.6 5.8% Revenue (GBP'm)- year-to-date (YTD) 160.2 142.8 12.2% Closing Occupancy (let sq ft- million)(4) 4.538 4.648 -2.4% Closing Occupancy (% of MLA)(5) 83.0% 85.6% -2.6ppts Average Occupancy (let sq ft- million) 4.587 4.681 -2.0% Average Occupancy (let sq ft- million)- YTD 4.537 4.512 0.6% Average Storage Rate (GBP) 29.74 27.23 9.2% Average Storage Rate (GBP)- YTD 28.94 25.40 13.9%
The UK performed well in the final quarter with total revenue up 7.0% and like-for-like revenue up 5.8%. For the full year, like-for-like revenue was up 12.2% compared to 2021. This performance built on a record fourth quarter in 2021 when like-for-like revenue was up 23.4%.
As ever, the Group looks to find an appropriate balance of rate growth and occupancy performance in order to maximise revenue.
The UK result was driven by an excellent like-for-like average rate which remained strong and was up 9.2% on the fourth quarter of 2021. The like-for-like average rate also grew sequentially by 3.8% compared to the third quarter of 2022.
In line with normal seasonal trading patterns, occupancy reduced in the final quarter. Like-for-like closing occupancy closed the year at 83.0% (2021: 85.6%).
Average occupancy grew by 0.6% over the course of the year.
Total revenue for the year-to-date grew by 13.1% reflecting our strong like-for-like performance, the 2021 store opening in Birmingham Middleway offset by the closure of Birmingham Digbeth, the December 2021 acquisition of Christchurch, and the December 2021 opening of our London Bow store. All acquisitions, new store developments and extensions are performing in line with or ahead of their business cases.
Paris Trading Performance
Paris Operating Performance Q4 2022 Q4 2021(2) Change ----------------------------------------- -------- ----------- --------- Revenue (EUR'm) 12.63 12.19 3.6% Revenue (EUR'm)- year-to-date (YTD) 48.76 45.96 6.1% Closing Occupancy (let sq ft- million)(3) 1.112 1.100 1.1% Closing Occupancy (% of MLA) 81.7% 80.7% +1.0ppts Maximum Lettable Area (MLA- million)(4) 1.360 1.360 - Average Storage Rate (EUR) 40.93 39.76 2.9% Average Storage Rate (EUR)- YTD 40.47 38.90 4.0% Revenue (GBP'm) 10.9 10.4 4.8% Revenue (GBP'm)- year-to-date (YTD) 41.4 39.9 3.8% Paris Operating Performance- Q4 2022 Q4 2021(2) Change like-for-like(3) --------------------------------- -------- ----------- --------- Revenue (EUR'm) 12.47 12.17 2.5% Revenue (EUR'm)- year-to-date (YTD) 48.37 45.94 5.3% Closing Occupancy (let sq ft- million)(4) 1.094 1.097 -0.3% Closing Occupancy (% of MLA)(5) 83.4% 83.6% -0.2ppts Average Occupancy (let sq ft- million) 1.104 1.109 -0.5% Average Occupancy (let sq ft- million)- YTD 1.092 1.077 1.4% Average Storage Rate (EUR) 41.07 39.76 3.3%
Average Storage Rate (EUR)- YTD 40.56 38.90 4.3% Revenue (GBP'm) 10.8 10.4 3.8% Revenue (GBP'm)- year-to-date (YTD) 41.1 39.9 3.0%
Our Paris business had a solid quarter growing total revenue by 3.6% year-on-year.
Like-for-like occupancy performance was robust for the quarter with closing occupancy at 83.4%, down 0.2ppts compared to Q4 2021. The like-for-like average rate was up by 3.3% and drove like-for-like revenue growth of 2.5%. Our like-for-like average storage rate also grew sequentially by 1.9% compared to the third quarter of our 2022 financial year.
Total revenue for the year-to-date grew by 6.1% reflecting the good like-for-like performance (up 5.3% compared to 2021) and the 2021 opening of our Magenta store.
Sterling equivalent like-for-like revenue was impacted by the 1.3% weakening in the Sterling: Euro exchange rate for the quarter compared to Q4 2021. As a result, sterling equivalent total and like-for-like revenue grew by 4.8% and 3.8% respectively compared to Q4 2021.
Spain Trading Performance(6)
Spain Operating Performance Q4 2022 Q4 2021(2) Change ----------------------------------------- -------- ----------- --------- Revenue (EUR'm) 0.96 0.88 9.1% Revenue (EUR'm)- year-to-date (YTD) 3.59 3.29 9.1% Closing Occupancy (let sq ft- million)(3) 0.095 0.093 2.2% Closing Occupancy (% of MLA) 78.9% 86.0% -7.1ppts Maximum Lettable Area (MLA- million)(4) 0.120 0.110 9.1% Average Storage Rate (EUR) 34.88 34.36 1.5% Average Storage Rate (EUR)- YTD 34.07 32.25 5.6% Revenue (GBP'm) 0.8 0.7 14.3% Revenue (GBP'm)- year-to-date (YTD) 3.0 2.8 7.1% Spain Operating Performance- Q4 2022 Q4 2021(2) Change like-for-like(3) --------------------------------- -------- ----------- --------- Revenue (EUR'm) 0.94 0.88 6.8% Revenue (EUR'm)- year-to-date (YTD) 3.57 3.29 8.5% Closing Occupancy (let sq ft- million)(4) 0.093 0.093 - Closing Occupancy (% of MLA)(5) 85.9% 86.0% -0.1%ppt Average Occupancy (let sq ft- million) 0.095 0.094 1.1% Average Occupancy (let sq ft- million)- YTD 0.094 0.096 -2.1% Average Storage Rate (EUR) 35.02 34.36 1.9% Average Storage Rate (EUR)- YTD 34.11 32.25 5.8% Revenue (GBP'm) 0.8 0.7 14.3% Revenue (GBP'm)- year-to-date (YTD) 3.0 2.8 7.1%
Our Spanish business saw a strong 6.8% growth in like-for-like revenue in the quarter and 8.5% growth for the full year. Closing occupancy ended the year at 85.9%, in line with 2021 (86.0%).
The average storage rate grew by 1.9% to EUR35.02 compared to EUR34.36 for Q4 2021. This rate grew sequentially by 5.4% compared to the third quarter of 2022.
Ancillary revenue growth was strong and, as a result, total revenue grew by 9.1% compared to Q4 2021.
Following the acquisition of four stores in Barcelona less than three years ago, the business has already opened one new site and has added a pipeline of eight stores across Barcelona and Madrid and we look with confidence to the continued expansion of the portfolio.
Benelux Trading Performance
Our Netherlands and Belgium businesses were acquired on 30 March 2022 and, therefore, contributed seven month's revenue (EUR5.9m) in the period.
The Benelux businesses grew revenue by 5.3% compared to the third quarter of 2022 and the businesses ended the period with a combined closing occupancy of 78.8%.
The business was originally established in 2019 with the acquisition of six stores and it has been subsequently developed into a 15-store portfolio with a pipeline of four additional stores.
Refinancing
Since the end of the financial year, the Group has completed the refinancing of its revolving credit facilities (RCFs) which were due to expire in June 2023.
The previous GBP250m sterling and EUR70m euro secured RCFs have been replaced with a single multi-currency unsecured GBP400m facility. In addition, a further GBP100m uncommitted accordion facility is incorporated into the facility agreement.
The facility is for a four-year term with two one-year extension options exercisable after the first and second years of the agreement.
The Group will pay interest at a margin of 1.25% plus SONIA or Euribor depending on whether the borrowings are drawn in Sterling or Euros. The margin is at the same level as the previous facility agreements.
A commitment fee of 35% of the margin is payable on undrawn amounts under the facility. This has reduced from 40% under the previous facility agreements.
Reflecting the Group's improved credit profile, the banking group and existing US Private Placement Noteholders have agreed that all of the Group's previously secured borrowings move to an unsecured basis, thus reducing administrative and legal costs associated with the facilities.
The main covenants under all of the Group's borrowings are a Group Loan to Value (LTV) covenant of 60% (replacing separate UK and French LTV covenants) and an Interest Cover Ratio covenant of 2.4x.
The hedging arrangements under the previous facility agreements have been continued under the new agreements. Therefore, the Group benefits from GBP55m of Interest Rate Swaps until 30 June 2023 at a rate of 0.6885%.
Environmental Social and Governance (ESG) KPI's are in the process of being agreed with the Group's lenders. Once finalised, the margin under the facility will be linked to performance against the ESG targets.
Property Pipeline Developments
Openings in the period
Winchester Extension
An 11,000 sq ft extension to our existing Winchester store opened in the quarter. The existing store has an MLA of 42,000 sq ft and has peaked at more than 90% occupancy.
New Development Sites
UK
Three new sites have been secured since our third quarter announcement.
In Romford in London, we have secured a freehold site with an existing warehouse which will be converted, subject to planning permission, to a 41,000 sq ft store.
In Crayford, we have secured a leasehold site on which we will convert an existing warehouse to a 9,400 sq ft extension to our existing Crayford site.
In Walton-on-Thames in London, we have secured a freehold site with an existing warehouse which will be converted, subject to planning permission, to a 20,700 sq ft store.
Our total UK development pipeline now amounts to c. 511,800 sq ft of which c. 415,100 sq ft is in London.
Paris
In Paris we have secured two new sites during the last quarter.
Paris East 1 and Paris North West 1 are freehold sites on which we will convert existing buildings, subject to planning, to 60,000 sq ft and 54,000 sq ft stores respectively.
Our Paris West 2 site did not receive planning permission and has been removed from the pipeline.
Our Paris pipeline now amounts to c. 349,200 sq ft.
Spain
A new freehold site has been secured in Southern Madrid (Southern Madrid 2) on which we will convert an existing building, subject to planning permission, into a 68,800 sq ft storage facility.
Our Spanish pipeline now amounts to c. 347,300 sq ft including 250,600 sq ft across five stores in Madrid and 96,700 sq ft over three stores in Barcelona.
Netherlands
In the Netherlands we have secured two new sites in the last quarter.
New freehold sites have been secured in Amsterdam and Aalsmeer where we will build new stores, subject to planning, of 61,400 sq ft and 48,400 sq ft respectively.
In the Netherlands, our pipeline now consists of 212,300 sq ft of space in four stores.
Planning Permissions
Since our third quarter announcement, planning permissions have been granted for our sites in Eastern Madrid, Northern Barcelona and South Barcelona.
Pipeline Summary
Our pipeline of c. 1.4m sq ft represents c. 18% of our existing property portfolio.
Opening 2023 FH/LH Status* MLA Other ------------------------ ------ ---------- ------- ---------------------- Redevelopments and Extensions ----------------------------------------------------------------------------- London- Crayford LH C, UC 9,400 Extension Paris- Pyrenees LH C, UC 22,200 Extension New Developments ----------------------------------------------------------------------------- London- Morden FH C, PG, UC 52,000 New build Wigan FH C, UC 42,700 Conversion Paris- South Paris FH C, PG 55,000 New build Paris- West 1 FH CE, STP 56,000 New build Paris- West 3 FH CE, STP 58,000 New Build Paris- East 1 FH CE, STP 60,000 Conversion Paris- North West 1 FH CE, STP 54,000 Conversion Northern Madrid FH C, PG 53,000 Conversion Southern Madrid FH C, PG 32,000 Conversion Eastern Madrid FH C, PG 50,000 Conversion Northern Barcelona FH C, PG 42,000 Conversion South Barcelona FH C, PG 30,000 Conversion Amersfoort- Netherlands FH CE, STP 58,000 New build Almere- Netherlands FH C, STP 44,500 Conversion Opening 2024 ------------------------ ------ ---------- ------- ---------------------- Redevelopments and Extensions
----------------------------------------------------------------------------- New Developments ----------------------------------------------------------------------------- London- Paddington FH C, PG 13,000 Conversion, Satellite Park West London- Lea Bridge FH C, PG 76,500 New build London- Romford FH C, STP 41,000 New build Shoreham FH CE, STP 54,000 New build South West Madrid FH CE, STP 46,800 Conversion Southern Madrid 2 FH CE, STP 68,800 Conversion Central Barcelona 2 LH CE, STP 24,700 Conversion Amsterdam- Netherlands FH CE, STP 61,400 New build Aalsmeer- Netherlands FH CE, STP 48,400 New build Opening Beyond 2024 ----------------------------------------------------------------------------- New Developments ----------------------------------------------------------------------------- London- Old Kent Road FH C, STP 76,500 New build London- Woodford FH CE, PG 76,000 New build London- Bermondsey FH C, STP 50,000 New build London- Walton FH C, STP 20,700 Conversion Paris- La Défense FH C, PG 44,000 Mixed use facility Total Pipeline MLA (let sq ft- million) c. 1.421 -------------------------------------------- ------------------------------- Total Outstanding CAPEX (GBP'm) c. 138.0 -------------------------------------------- ------------------------------- *C = completed, CE = contracts exchanged, STP = subject to planning, PG = planning granted, UC = under construction
Lease Extensions and Assignments
During the period we have completed the extensions of two of our existing leases.
In Crayford, we have extended the lease on our existing store to 2042, with a tenant-only break option in 2032. A rent-free period of four months was agreed as part of this agreement. The lease on the new satellite store reported above also terminates in 2042.
In Sunderland, we have extended the lease on our store to 2047 with a tenant break option in 2037. A six-month rent-free period was agreed as part of this lease extension.
Ends
1 - CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, in order to present the reported results on a more comparable basis).
2 - Q4 2021 is the quarter ended 31 October 2021.
3 - Occupancy excludes offices but includes bulk tenancy. As of 31 October 2022, closing occupancy includes 24,000 sq ft of bulk tenancy (31 October 2021: 14,000 sq ft).
4 - MLA is Maximum Lettable Area.
5 - Like-for-like information includes only those stores which have been open throughout both the current and prior financial years, with adjustments made to remove the impact of new and closed stores, as well as corporate transactions.
6 - The Spain business was acquired on 30 December 2019 with the four originally acquired stores now considered like-for-like.
7- Adjusted Diluted EPRA EPS is based on the European Public Real Estate Association's definition of Earnings and is defined as profit or loss for the period after tax but excluding corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties and the associated tax impacts. The Company then makes further adjustments for the impact of exceptional items, IFRS 2 share-based payment charges, exceptional tax items and deferred tax charges. This adjusted earnings is divided by the diluted number of shares. The IFRS 2 cost is excluded as it is written back to distributable reserves and is a non-cash item (with the exception of the associated National Insurance element). Therefore, neither the Company's ability to distribute nor pay dividends are impacted (with the exception of the associated National Insurance element). The financial statements disclose earnings on a statutory, EPRA and Adjusted Diluted EPRA basis and will provide a full reconciliation of the differences in the financial year in which any LTIP awards may vest.
This announcement contains inside information.
Enquiries
Safestore Holdings PLC
Frederic Vecchioli, Chief via Instinctif Partners
Executive Officer
Andy Jones, Chief Financial
Officer
www.safestore.com
Instinctif Partners
07917 178920 / 07739
Guy Scarborough/ Bryn Woodward 342009
Notes to Editors
-- Safestore is the UK's largest self-storage group with 179 stores on 31 October 2022, comprising 130 wholly owned stores in the UK (including 72 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool, Sheffield, Leeds, Newcastle, and Bristol), 29 wholly owned stores in the Paris region, 5 stores in Spain, 9 stores in the Netherlands and 6 stores in Belgium.
-- Safestore operates more self-storage sites inside the M25 and in central Paris than any competitor providing more proximity to customers in the wealthiest and more densely populated UK and French markets.
-- Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en Plus" ("UPP") in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic Vecchioli.
-- Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250 index in October 2015.
-- The Group provides storage to around 90,000 personal and business customers.
-- As of 31 October 2022, Safestore had a maximum lettable area ("MLA") of 7.698 million sq ft (excluding the expansion pipeline stores) of which 6.317 million sq ft was occupied.
-- Safestore employs around 750 people in the UK, Paris, Spain, the Netherlands and Belgium.
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