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Storage

Big Yellow Results for Year Ended 31st March 2018

22nd May 2018

Highlights:

·     Strong occupancy performance driving 7% revenue growth.

·     Closing net rent up 2.7% from 31 March 2017, average rate up 0.8% year on year and up 1.5% in the second half.

·     Cash flow from operating activities (after net finance costs) increased by 13% to £63.0 million.

·     Adjusted profit before tax up 12% to £61.4 million.

·    12% increase in total dividend to 30.8 pence per share.

·    Acquisition of new development sites in Wapping (London), Uxbridge (London), Bracknell, Hove and Slough taking pipeline to approximately 640,000 sq ft (14% of current MLA).

·     Planning consent obtained at Manchester for a landmark city centre store of 60,000 sq ft.

·     Planning consent obtained at Camberwell, London for a 72,000 sq ft store

·     Refinancing extending the term of the Group's debt and reducing the average cost.

Nicholas Vetch, Executive Chairman of Big Yellow, commented:

"We remain focussed on our core objective of increasing occupancy to 90%. As we have previously indicated, higher levels of occupancy deliver more traction on pricing and drive rate growth and indeed we have seen that materialise in the second half of the year.

As our vacant capacity has reduced we have been more aggressively pursuing an expansion strategy. There are very few existing stores that are of sufficient quality available to purchase and brand as Big Yellow.  We continue therefore to acquire raw land and develop our own stores, and are pleased to have secured a number of quality sites during the year. The development process however, of which we have unparalleled experience, remains long, does carry risk, and is increasingly complex.

Risks external to our business remain, and there will no doubt be setbacks in economic growth. It is for that reason that we keep the business very conservatively financed thus enabling us to plan and execute the next phase of growth."

Big Yellow is the UK's brand leader in self storage. Big Yellow now operates from a platform of 96 stores, including 22 stores branded as Armadillo Self Storage, in which the Group has a 20% interest. We own a further ten Big Yellow self storage development sites (including one extension site), of which three have planning consent. The current maximum lettable area of the existing platform (including Armadillo) is 5.6 million sq ft.  When fully built out the portfolio will provide approximately 6.2 million sq ft of flexible storage space. Of the Big Yellow stores and sites, 97% by value are held freehold and long leasehold, with the remaining 3% 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 Big Yellow stores, coupled with our excellent customer service and our market leading online platform, has created the most recognised brand name in the UK self storage industry.

Chairman's Statement:

"Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company"), the UK's brand leader in self storage, is pleased to announce its results for the year ended 31 March 2018.

We have delivered another year of occupancy, revenue and earnings growth. In May 2017, along with our year end results, we set out our ambition to see material growth in occupancy towards our long held target of 85%.In November, with our interim results, we adjusted our occupancy target for the business as a whole to 90%. We are therefore pleased to be reporting significant progress in occupancy with these results. Like for like closing Group occupancy is up 3.9 percentage points to 81.9% compared to 78.0% at 31 March 2017. Closing net rent was £26.74, an increase of 2.7% from the same time last year. Average rental growth was up 0.8% year-on-year and up 1.5% in the second half. 

We would expect to see further growth in occupancy over the summer, peaking at or above 85%, providing there are no significant external shocks. It remains our firm belief that occupancy gains are hard won and are of significant value to drive long term increases in average rent. As our occupancy rises, rate growth will come through driven by our yield management systems, and we have seen that in the second half of the year, and expect to see more of a contribution to revenue from rate growth in the current year."