Safestore Post Strong First Quarter Results
23rd February 2018
· Group revenue for the quarter up 9.8%.
· Like for like Group revenue for the quarter 4.5%.
· Like for like occupancy performance up 2.8% at 71.5%.
· Alligator acquisition completed on 1 November 2017; trading in line with plan and integration progressing well.
· Trading is in line with the Board's expectations for the year.
Frederic Vecchioli, Chief Executive Officer commented:
"Our first quarter performance has been pleasing, supported by revenue from our recent acquisition of Alligator Self Storage complementing solid like for like growth. The strong trading momentum from our Paris stores continued in Q1, combined with encouraging UK occupancy growth.
"Over the last eighteen months we have consolidated our market leading positions in the UK and Paris with the addition of 30 stores to the portfolio via the acquisitions of Space Maker and Alligator and the opening of six new sites. We continue to progress our new store pipeline with four new sites in London (Mitcham, Paddington Marble Arch), Birmingham Merry Hill and Paris Poissy. In addition, our strong and flexible balance sheet allows us to continue to consider value accretive investments as and when they arise.
"Our priority, and largest opportunity, remains the significant upside from the utilisation of our 1.9m square feet of invested unlet space. We remain confident in the future and focused on the continued delivery of value to all shareholders."
UK Trading Performance:
The UK has performed well over the first quarter. Like for like revenue growth of 4.3%, combined with the first quarter of Alligator revenues since its acquisition on 1 November 2017, and partially offset by the impact of the closure of the Deptford store in August 2017, resulted in total revenues up 10.8% on the prior year. The 4.9% decline in total average storage rate was primarily driven by the rate currently achieved by the Alligator portfolio being lower than the rate achieved in the Safestore portfolio.
The like for like revenue growth of 4.3% was driven by a strong occupancy performance. The like for like closing occupancy at the end of the quarter was 69.8%, up 2.8% and closing occupancy as measured by sq ft occupied was up 4.0%. Strong ancillary revenues also contributed to the growth and were offset by a 1.1% decline in the average storage rate, although the average storage rate grew by 1.0% compared to Q4 2017.
The Alligator business, which has 569,000 sq ft of MLA, is now fully integrated into the Group from an operational and systems perspective. The trading performance of the business is in line with our expectations and rebranding of the stores is commencing.
Paris Trading Performance:
Our Paris business had a further strong quarter growing total revenue by 5.5%. Our new store at Combs-la-Ville, opened in June 2017, is performing well and contributed to the total revenue figures. However, the immaturity of this store has had a dilutive effect on the closing occupancy and the average rate.
Like for like revenue grew by 5.5% in the quarter. Like for like occupancy performance was strong for the quarter with closing occupancy at 78.5%, up 3.1% compared to 2017. Ancillary revenues were also particularly strong in the quarter but were partially offset by a reduction in the like for like average rate which was down 2.1% year on year in the quarter.
The impact of the 3% weakening of Sterling compared to the same quarter last year resulted in the Sterling equivalent like for like revenue growing by 9.0% in the quarter.