Safestore Fourth Quarter Update 2019
14th November 2019
Solid final quarter with strong occupancy growth. Significant strategic progress completes another good year
Group revenue for the year up 5.6%.
Like for like Group revenue for the year up 4.8%.
UK up 4.7%.
Paris up 5.6%.
Group like for like closing occupancy of 78.5%.
Group like for like average occupancy for the year up 3.5%.
Group like for like average storage rate for the year up 1.0%.
£125m of new US Private Placement Notes issued to fund medium-term growth.
Acquisition of Fort Box Self-Storage (two London stores) for £14.3m.
Acquisition of freehold Heathrow store for £6.5m.
Freehold site acquired in Sheffield 47,000 sq ft store to open in 2020.
New long leasehold site secured at Gateshead in North East of England.
Sites in Peterborough and Birmingham Merry Hill now open.
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report a solid final quarter's trading concluding another strong performance for the year. In addition to the completion of our JV with Carlyle in the Netherlands, the acquisitions of Fort Box and of our new Heathrow store as well as new store openings in Peterborough and Birmingham Merry Hill demonstrate significant strategic progress.
Further to our successful openings this year, we plan to open new stores in London-Carshalton, Gateshead, Sheffield and Paris-Magenta (subject to planning) during the 2019/2020 financial year, adding 175,000 sq ft of capacity to our estate.
We have extended our financing facilities with the issuance of a further £125m of 7 and 10 year US Private Placement notes, strengthening our balance sheet and providing us with further flexibility to target selected development and acquisition opportunities as they arise.
The Company is in a very strong position and, as ever, our top priority remains the significant organic growth opportunity represented by the 1.5m square feet of currently unlet space in our existing fully invested estate. Our leading market positions in the UK and Paris combined with our resilient business model enable us to look forward to the future with confidence."
Safestore will announce its Preliminary Results for the year ended 31 October 2019 on Tuesday, 7 January 2020.
The UK's fourth quarter performance was solid with the business growing total revenue by 5.9% and like for like revenue by 3.8%. Performance was particularly strong in regional UK stores with like for like revenue up 5.0% whilst London and the South East grew by 2.9%.
Over the year, the business added occupancy of 173,000 sq ft on a like for like basis excluding Alligator (2018: 132,000 excluding Alligator). As a result, Q4 like for like closing occupancy, at 77.1%, increased by 3.5 percentage points compared to the prior year.
Like for like average rate in the UK improved in the period but was down 1.0% compared to Q4 2018. Over the year it grew by 1.4%.
Total revenue grew by 5.2% for the full year. This includes the newly acquired Heathrow store, management revenue from our Dutch joint venture business and the annualisation of 2018 new store openings in Mitcham and Paddington Marble Arch offset by 2018 closures in Deptford, Merton, Leeds and Paddington. New stores, in the initial period after opening, are dilutive to occupancy and rate. However, all new stores are trading in line or ahead of our business plans.
Paris had another good quarter growing revenue by 4.8% compared to last year.
On a like for like basis, the business grew revenue by 2.9% for the quarter and by 5.6% for the full year. This was driven by average occupancy growth of 6.6% for the year.
Like for like occupancy grew by 37,000 sq ft for the year (2018: 54,000 sq ft) resulting in closing occupancy of 84.4%, up 3.2 percentage points compared to the prior year.
Like for like average rate in Paris was down 1.2% in the quarter but, excluding our lower priced suburban Emerainville and Combs la Ville stores, which opened in September 2016 and June 2017 respectively, the average rate from the like for like stores was up 0.2% in the period. Similarly, the 0.6% average like for like rate reduction for the year would have been an improvement of 1.0% without the mix effect of these two stores.
The impact of the new stores opened in August 2018 at Poissy and in August 2019 in Pontoise is to dilute rate and occupancy in the initial period after trading commences. These stores, however, are trading ahead of our business plan.
Over the year, the sterling-euro exchange rate was similar to 2018. As a result, there was minimal foreign exchange impact on the translation of Paris revenues.
Performance in the final quarter across the Group was as expected and we anticipate that our Adjusted Diluted EPRA earnings per share will be in line with the Board's expectations for the year-ended 31 October 2019. Our strong market positions and geographical diversity means that we look forward with confidence to the 2019/20 financial year.