Safestore First Quarter Trading Update.
3rd March 2016
A robust first quarter for UK
self storage company Safestore, including the acquisition of a new Paris site.
· First quarter Group like-for-like revenue up 10.4%.
· UK like-for-like revenue up 11.9%.
· Paris revenue up 6.1%.
· New site at Marnes-la-Vallée in Paris acquired.
Frederic Vecchioli, Chief Executive Officer commented:
"We have continued to see robust trading momentum in the first quarter of the new financial year. Our strategy of balancing rate and occupancy growth continues to gain traction and is driving a good financial performance.
We remain focused on the
long term opportunity of filling the
unlet space in our existing estate. We will continue to leverage our scale and expertise in generating enquiries through the internet channel and drive the operational performance of the business.
I am pleased that we are also announcing today the addition of a new site in Paris which will further enhance our leading position in this market.
I am confident that the momentum in the business, supported by our new website and motivated sales teams, will allow us to deliver earnings in line with the Board's expectations for the current financial year."
A good performance by the UK business in the first quarter delivered a pleasing 11.9% increase in like-for-like revenues building on the 12.9% growth in the prior year. Whilst the business typically experiences net vacates in the first quarter, reflecting seasonal industry trading patterns, the closing occupancy level was 2.1% higher than the prior year.
Our pricing policy continues to deliver rate growth and, for the first quarter, the average rate was up 6.0% on the same quarter last year.
Our Paris performance was robust in the first quarter. The sq ft occupied grew 5.2% on the prior year and, as a result, occupancy was 3.9% higher than the prior year at 78.6%.
Revenue growth for the quarter was up 6.1% on a constant currency basis despite the average storage rate being flat year-on-year. The impact of a 7% weakening in the average Euro exchange rate has resulted in a 1.6% year-on-year reduction in sterling revenue in the quarter.
Our strategy of achieving an appropriate balance of rate and occupancy growth, together with our leading position in the heart of the demographically attractive Parisian market, has continued to deliver year-on-year progress.
We are pleased to announce the completion of the acquisition of a freehold site in eastern Paris adjacent to the A4 motorway at Marnes-la-Vallée in the town of Emerainville for €4.2m. The site contains an existing warehouse which will be converted into a c.60,000 sq ft self-storage facility and c.8,000 sq ft of serviced offices. We estimate the costs of conversion at circa €2.4m. We anticipate that the new store will open in late Summer 2016.
Following this acquisition, and the opening of the new stores at Chiswick, Birmingham and Wandsworth, Safestore will have a total of 122 stores in the UK and Paris, of which 81 are freehold and