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Safestore Results for Year Ending 31st October 2017

10th January 2018

Safestore, Britains largest Self Storage Provider, Posts Strong Trading Figures.  

Highlights:

Strong Financial Performance:

  • Group revenue for the year up 12.6%.
  • Like-for-like Group revenue for the year up 3.3%.
  • UK up 3.1%.
  • Paris up 4.0%.
  • Cash Tax Adjusted Earnings per Share up 17.7% at 23.3p.
  • 21.7% increase in the final dividend to 9.8p.

Operational Focus:

  • Balanced approach to revenue management continues to drive returns.
  • Like-for-like average occupancy for the year up 1.4%.
  • Like-for-like closing occupancy of 75.0%.
  • Like-for-like average storage rate for the year up 1.3%.
  • Space Maker and new stores trading well.

Strategic Progress:

  • 12 Alligator stores acquired on 1 November 2017 for £56m, immediately earnings enhancing.
  • Three new UK stores in the pipeline with 146,000 sq ft of new space scheduled to open in London Mitcham, London Paddington Marble Arch and Birmingham Merry Hill.
  • Contracts exchanged in November 2017 for an 80,000 sq ft freehold site at Poissy, in the West of Paris.

Frederic Vecchioli, Safestore's Chief Executive Officer, commented:

"We have had a successful year through a combination of organic and acquisitive growth combined with a strong operational performance. Over the last 18 months our market leading positions in the UK and Paris have been consolidated, supported by the acquisitions of Space Maker and Alligator Self Storage, which added 24 stores to the UK portfolio and boosted earnings from the outset. Organically we have developed and opened six new stores in the UK and Paris, with a pipeline of a further four new stores opening in London, Birmingham and Paris.

"The refinancing of our borrowings earlier in the year has resulted in a strengthened, efficient, low cost balance sheet which gives us the flexibility to continue to target selected development and acquisition opportunities."

"We enter the new financial year in a strong position with substantial growth potential from the integration of Alligator Self Storage and the development of three new sites. However, our priority and the largest opportunity remains the significant upside from our 1.7m square feet of invested unlet space. We remain confident in the future and focused on the continued delivery of value to all shareholders."

Summary:

Building on the performance of 2016, Safestore has delivered another strong financial result through a combination of organic and acquisitive growth and the debt refinancing in May 2017. Total Group revenue increased by 12.6% with a strong performance across the UK (+11.6%) and continued strength in Paris (+5.1%). On a like-for-like basis group revenue increased by 3.3% with the UK up 3.1% and Paris up 4.0%. The Group's like-for-like closing occupancy increased by 1.3 percentage points to 75.0% with the average storage rate up 1.3%.

Our operational performance across the UK has been robust this year. Our updated consumer website, combined with our digital marketing expertise, delivered good enquiry growth, which has resulted in like-for-like closing occupancy in the UK growing to 72.5%. Growth in occupancy in the UK regions outside London and the South East performed particularly well.

In the UK, we successfully integrated the Space Maker portfolio during the year and completed the acquisition of the twelve store Alligator Self-Storage portfolio on 1 November 2017 for £56m. In addition, the four new stores opened in London-Chiswick, London-Wandsworth, Birmingham and Altrincham, on time and on budget, between August and November 2016 are all performing in line with or ahead of their business plans.

In Paris, our performance has been robust with like-for-like revenue growing by 4.0%. Our balanced approach to revenue management resulted in like-for-like rate growth of 2.3% and average occupancy growth of 1.2%. Like-for-like closing occupancy ended the year at 84.7%. This is the nineteenth consecutive year of revenue growth in Paris with average growth over the last five years of circa 5%. We opened a new store in Emerainville in September 2016 and our most recent new store at Combs-la-Ville opened in June 2017. Both are trading in line with their business plans.

Our property portfolio valuation, including investment properties under construction, increased in the year by 6.2% on a constant currency basis. After exchange rate movements the portfolio valuation increased by 5.5% to £1,007.0m with the UK portfolio up £33.8m to a total UK value of £744.4m and the French portfolio increased €27.7m to €298.6m.

Reflecting the Group's strong trading performance, the Board is pleased to recommend a 21.7% increase in the final dividend to 9.8p per share resulting in a full year dividend up 20.2% to 14.0p per share.

Outlook:

In the last 18 months Safestore has further strengthened its market positions in both the UK and Paris with the acquisitions of Space Maker and Alligator, the opening of six new stores and the establishment of a pipeline of a further four new stores. Including Alligator, the Group has 1.7m square feet of fully invested unlet space available, offering significant operational upside in the existing portfolio. We remain focused on further optimising the Group's operational performance whilst our balance sheet strength and flexibility provides us with the opportunity to actively consider further selective development and acquisition opportunities in our key markets.

We believe Safestore is well placed to withstand the uncertain macroeconomic backdrop in the UK and have seen encouraging like-for-like revenue trends in both the UK and Paris in the first two months of the current financial year. Our recently acquired businesses and newly opened stores are trading at least in line with their business plans and we look forward with confidence to the 2017/18 financial year.