Big Yellow Self Storage, Interim Results

21st November 2017

First Half Highlights:
  •  Strong occupancy performance driving 6% revenue growth.
  •  Average rate flat period on period; closing net rent up 1% from 31 March 2017.
  •  Continued growth in EBITDA, adjusted earnings and dividend.
  •  Cash flow from operating activities increased by 12% to £32.5 million.
  •  Adjusted profit before tax up 13% to £30.6 million.
  •  13% increase in interim dividend to 15.3 pence per share.
  •  Acquisition of new development sites in Wapping, Bracknell and Slough taking pipeline to 575,000 sq ft.
  •  Planning consent obtained at Manchester for a landmark city centre store of 60,000 sq ft.
  •  Refinancing extending the term of the Group’s debt and reducing the average cost.

Commenting, Nicholas Vetch, Executive Chairman, said:
"In this seasonally stronger six month trading period, the Group has delivered a good performance with like for like
revenue growth of 6% compared to the same period last year. In May, along with our year end results, we set out
our ambition to see material growth in occupancy towards our long held target of 85%. We are therefore pleased to
be reporting significant progress in occupancy with these results, albeit, there has been no rate growth period on
period. That said, we have seen a 1.6% increase in net achieved rent per sq ft to the date of these results since 31
March 2017.
In our view, it makes no sense to have significant unutilised capacity, and consequently we have focussed on
occupancy and will continue to do so for the time being. Our pricing model is largely automated and higher levels
of occupancy deliver more traction on pricing. We know this because we can see the performance of stores with
elevated occupancy.
We are now in our seasonally weakest quarter, in which for the last couple of years we have lost 3 ppts of occupancy
and then rebuilt occupancy in the final quarter to March. Given closing occupancy of 83.8% at 30 September, we
would expect to comfortably pass the 85% mark next summer providing there are no significant external shocks.
We are therefore adjusting our occupancy target for the business as a whole to 90%.
Over the long term, we are confident that the existing platform will continue to deliver attractive returns. That said,
adding more capacity will improve those returns. The expeditious way of doing that would be to acquire existing
freehold self storage assets in London and other large conurbations in the UK. However, there are few self storage
centres that meet our quality criteria and for those that do exist, they are generally not for sale. Furthermore, as
stated previously, we have no interest in expanding abroad.
We will therefore continue to develop the Big Yellow platform organically, site by site. This does involve risk and
requires patience, but it will allow us to expand and improve our unique and irreplaceable portfolio.”