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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 | |
---|---|---|---|---|---|---|---|---|---|---|
4.50 | 0.60% | 756.00 | 753.50 | 756.00 | 760.00 | 743.50 | 760.00 | 181,908 | 16:35:01 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
General Warehousing, Storage | 224.2M | 200.2M | 0.9179 | 8.21 | 1.64B |
TIDMSAFE
RNS Number : 0403M
Safestore Holdings plc
12 September 2019
Safestore Holdings plc
Third quarter trading update for the period 1 May 2019 to 31 July 2019
Good operational and financial performance, further strategic progress
Group Operating Performance Q3 2019 Q3 2018(2) Change Change- CER(1) --------------------------------- -------- ----------- --------- -------- Revenue (GBP'm) 38.2 36.4 4.9% 4.8% Revenue (GBP'm)- year-to-date 111.3 105.6 5.4% 5.5% Closing Occupancy (let sq ft- million)(4) 4.94 4.77 3.6% n/a Closing Occupancy (% of MLA)(5) 77.5% 75.8% +1.7ppts n/a Average Storage Rate (GBP) 25.66 25.32 1.3% 1.2% Average Storage Rate (GBP)- year-to-date 26.08 25.71 1.4% 1.6% Group Operating Performance- Q3 2019 Q3 2018(2) Change Change- like-for-like(3) CER(1) --------------------------------- -------- ----------- --------- -------- Revenue (GBP'm) 37.7 36.1 4.4% 4.2% Revenue (GBP'm)- year-to-date 109.8 104.3 5.3% 5.4% Closing Occupancy (let sq ft- million)(4) 4.87 4.74 2.7% n/a Closing Occupancy (% of MLA)(5) 78.6% 76.5% +2.1ppts n/a Average Storage Rate (GBP) 25.61 25.21 1.6% 1.4% Average Storage Rate (GBP)- year-to-date 26.01 25.58 1.7% 1.8%
Highlights
-- Group revenue in Q3 in CER(1) grew by 4.8%
-- Group like-for-like(3) revenue in Q3 in CER(1) increased 4.2% with good performance in both geographies
o UK up 4.0%
o Paris up 6.1%
-- Group like-for-like closing occupancy of 78.6% (up 2.1ppts on Q3 2018) -- Group like-for-like average storage rate in Q3 in CER(1) grew 1.4% -- New long leasehold site secured at Gateshead in North East of England -- Joint venture with Carlyle completes acquisition of M3 Self Storage in Netherlands -- Heathrow store acquisition completed
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report another good performance in the third quarter despite annualising a strong third quarter in 2018. Our top priority remains the significant organic growth opportunity represented by the 1.4m square feet of unlet space in our existing fully invested estate.
"Our recent openings in London (Paddington Marble Arch and Mitcham) and Paris (Pontoise), are performing in line with or better than their business plans. I am also excited by our entry into the Dutch market with the formation of our joint venture with Carlyle and the subsequent acquisition of M3 Self Storage, as well as our new sites at London Heathrow and Gateshead.
"I am confident that our leading market positions in the UK and Paris and our resilient business model leave us well positioned. The Company has started the fourth quarter well and remains on course to meet the Board's full year expectations."
Business highlights
UK Trading Performance
UK Operating Performance Q3 2019 Q3 2018(2) Change --------------------------------- -------- ----------- --------- Revenue (GBP'm) 28.8 27.6 4.3% Revenue (GBP'm)- year-to-date 84.0 80.0 5.0% Closing Occupancy (let sq ft- million)(4) 3.93 3.83 2.6% Closing Occupancy (% of MLA)(5) 76.7% 74.7% +2.0ppts Average Storage Rate (GBP) 23.45 23.15 1.3% Average Storage Rate (GBP)- year-to-date 23.97 23.49 2.0% UK Operating Performance- like-for-like(3) Q3 2019 Q3 2018(2) Change -------------------------------------------- -------- ----------- --------- Revenue (GBP'm) 28.4 27.3 4.0% Revenue (GBP'm)- year-to-date 82.8 78.8 5.1% Closing Occupancy (let sq ft- million)(4) 3.88 3.80 2.1% Closing Occupancy (% of MLA)(5) 77.1% 75.6% +1.5ppts Average Storage Rate (GBP) 23.33 22.98 1.5% Average Storage Rate (GBP)- year-to-date 23.83 23.31 2.2%
The UK business grew revenue by 4.3% in the quarter with like-for-like revenue also growing by 4.0%. Performance was good across the UK with London and the South East up 2.6% and regional UK up 6.1%.
The third quarter is traditionally the busiest period of the Group's financial year. The UK business built on the strong third quarter of 2018 and achieved a record number of like-for-like new lets in the period and added 260,000 sq ft of like-for-like occupancy since the end of Q2 (2018: 230,000 sq ft added). As a result, Q3 like-for-like closing occupancy, at 77.1%, increased by 1.5 percentage points compared to the prior year and by 4.5 percentage points compared to the position at the end of Q2.
Like-for-like average storage rate in the UK was up 1.5% compared to Q3 2018 and is up 2.2% for the year-to-date.
In 2018 we opened new stores at London- Paddington Marble Arch and London- Mitcham which are not included in the like-for-like figures. Both stores are performing in line with or ahead of their business plans.
Paris Trading Performance
Paris Operating Performance Q3 2019 Q3 2018(2) Change --------------------------------- -------- ----------- --------- Revenue (EUR'm) 10.6 9.9 7.1% Revenue (EUR'm)- year-to-date 31.1 28.9 7.6% Closing Occupancy (let sq ft- million)(4) 1.01 0.94 7.4% Closing Occupancy (% of MLA)(5) 80.7% 80.5% +0.2ppts Average Storage Rate (EUR) 38.58 38.69 -0.3% Average Storage Rate (EUR)- year-to-date 38.87 39.28 -1.0% Revenue (GBP'm) 9.4 8.8 6.8% Revenue (GBP'm)- year-to-date 27.3 25.6 6.6% Paris Operating Performance- Q3 2019 Q3 2018(2) Change like-for-like(3) --------------------------------- -------- ----------- --------- Revenue (EUR'm) 10.5 9.9 6.1% Revenue (EUR'm)- year-to-date 30.7 28.9 6.2% Closing Occupancy (let sq ft- million)(4) 0.99 0.94 5.3% Closing Occupancy (% of MLA)(5) 84.7% 80.5% +4.2ppts Average Storage Rate (EUR) 38.88 38.69 0.5% Average Storage Rate (EUR)- year-to-date 39.12 39.28 -0.4%
Paris had a strong quarter, growing revenue by 7.1% compared to last year.
On a like-for-like basis the business grew revenue by 6.1% for the quarter driven by an occupancy increase of 5.3% compared to Q3 2018.
Like-for-like occupancy grew by 34,000 sq ft since the end of Q2 (2018: 41,000 sq ft) resulting in closing occupancy of 84.7%, up 4.2 percentage points compared to the prior year and by 3.0 percentage points over the peak season as compared to the position at the end of Q2.
Like-for-like average rate in Paris was up 0.5% in the quarter showing improving momentum. Typically, rates in our suburban stores are significantly lower than in our central Paris stores. Excluding our lower price suburban Emerainville and Combs-la-Ville stores, which opened in September 2016 and June 2017 respectively, from the like-for-like portfolio, average rate was up 1.9% throughout the period.
Our new 65,000 sq ft freehold store at Pontoise, in the west of Paris, opened as planned after the period end in August 2019.
As with the addition of all new stores to our estate, the impact of the new stores opened in August 2018 at Poissy and in August 2019 at Pontoise is to dilute total average rate and occupancy in the initial period after trading commences. Both stores are trading ahead of our business plan.
The impact of the small Sterling fluctuations compared to Q3 2018 contributed to the total Sterling equivalent revenue increasing 6.8% on the prior year.
Joint Venture with Carlyle and Acquisition of M3
As announced on 19 August 2019, Safestore has invested in a 20% stake in a joint venture with Carlyle to invest in carefully selected self-storage opportunities in Europe. Safestore has developed a highly scalable platform in self-storage built on leading marketing and operational expertise. This platform is proven to work across geographies and Safestore sees an opportunity to leverage the platform in regions outside of its existing footprint in the UK and Paris.
Safestore's initial equity investment in the joint venture was EUR5.2m. Safestore will also earn a fee for providing management services to the joint venture. The Group expects to earn an initial return on investment(6) of 8% before transaction related costs for the first full year reflecting its share of expected JV profits and fees for management services
M3, which has assets with an unaudited proforma book value of EUR21.5m at the date of completion, has six prime locations in Amsterdam and Haarlem with one of the sites currently under construction. The three stores in Haarlem are all freehold whilst two of the Amsterdam stores are subject to perpetual Ground Leases. The third Amsterdam store is a leasehold store with nine years remaining on the lease. The construction of the sixth store has now been finalised and completion of the acquisition of M3 took place on 31 August 2019. The business has 25,700 sq metres (277,000 sq ft) of MLA and an occupancy of 68%.
The Dutch self-storage market is the fourth largest in Europe with 303 stores and 9.6m sq ft of MLA. This represents 0.56 sq ft per head of population which compares to 0.68 sq ft per head in the UK, 0.19 sq ft per head in France and 9.4 sq ft per head in the USA.
The Group's investment in the JV is expected to be immediately accretive to Group earnings per share from completion and will support the Group's future dividend capacity.
New Store - Gateshead
In August 2019 we acquired a long leasehold 1.6 acre site with an existing building in Gateshead, North East England. The lease has 130 years remaining. Subject to planning permission we plan to convert the building into a 40,000 sq ft store and anticipate opening the store in Summer 2020.
Acquisition of Heathrow store
In addition (also as announced on 19 August 2019), Safestore has acquired Salus Services Ltd, the owner of a 34,000 sq ft MLA freehold store from Rockpool Investments for GBP6.5m in cash, funded from the Group's existing resources. The store was previously operated by Ready Steady Store and is located on the Parkway Trading Estate near Heathrow Airport to the west of London.
The store, which opened in 2015, is currently trading at an occupancy of 86%. The Group anticipates that the first year initial yield will be c. 5.5%.
The Group will rebrand the store and has taken over operation of the site with immediate effect.
Outlook
Reflecting normal industry trading patterns, we anticipate a reduction in occupancy in Q4 compared to Q3 although the fourth quarter has started solidly. The Company is in a strong position and on course to meet the Board's full year expectations.
Ends
Notes
1 - CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, in order to present the reported results on a more comparable basis).
2 - Q3 2018 is the quarter ended 31 July 2018.
3 - 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.
4 - Closing occupancy excludes offices but includes 14,000 sq ft of bulk tenancy as at 31 July 2019 (31 July 2018 - 27,250 sq ft).
5 - MLA is Maximum Lettable Area.
6 - For these purposes Return on Investment is defined as Safestore's share of the underlying profit after tax (before exceptional items, transaction related costs, property valuation movements and derivative movements) of the JV plus the management fees earned divided by the equity investment in the JV
Enquiries
Safestore Holdings plc 020 8732 1500 Frederic Vecchioli, Chief Executive Officer Andy Jones, Chief Financial Officer www.safestore.com Instinctif Partners 020 7457 2020 Guy Scarborough
Notes to editors:
* Safestore is the UK's largest self-storage group with 146 stores at 31 July 2019, comprising 119 wholly owned stores in the UK (including 67 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool and Bristol) and 27 wholly owned stores in the Paris region. In August 2019, Safestore announced the formation of a Joint Venture with Carlyle which has invested in six stores in the Netherlands. * 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 densest 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 64,000 personal and business customers. * As at 31 July 2019, Safestore had a maximum lettable area ("MLA") of 6.37 million sq ft (excluding the expansion pipeline stores, Heathrow and the Netherlands Joint Venture) of which 4.94 million sq ft was occupied. * Safestore employs around 650 people in the UK and France.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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September 12, 2019 02:00 ET (06:00 GMT)
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