Source - LSE Regulatory
RNS Number : 9026K
Safestore Holdings plc
07 September 2021
 

 

 

                                                                                                            7 September 2021

 

Safestore Holdings plc
Third quarter trading update for the period 1 May 2021 to 31 July 2021

 

Strong Trading Momentum Continues

Further upgrade to full year earnings guidance

 

Group Operating Performance

Q3 2021

Q3 20203

Change

Change- CER2

Revenue (£'m)

47.6

40.2

18.4%

19.7%

Revenue (£'m)- year-to-date (YTD)

135.7

119.5

13.6%

13.6%

Closing Occupancy (let sq ft- million)5

5.985

5.184

15.5%

n/a

Closing Occupancy (% of MLA)6

85.7%

75.6%

+10.1ppts

n/a

Average Storage Rate (£)

26.26

26.56

(1.1%)

(0.0%)

Average Storage Rate (£)- YTD

26.43

26.53

(0.4%)

(0.4%)

 

Group Operating Performance- like-for-like4

Q3 2021

Q3 20203

Change

Change- CER2

Storage Revenue (£'m)

37.5

32.2

16.5%

17.7%

Ancillary Revenues (£'m)

8.0

6.6

21.2%

21.4%

Revenue (£'m)

45.5

38.8

17.3%

18.6%

Storage Revenue (£'m)- YTD

107.4

95.8

12.1%

12.1%

Ancillary Revenues (£'m)- YTD

22.4

20.4

9.8%

9.8%

Revenue (£'m)- YTD

129.8

116.2

11.7%

11.7%

Closing Occupancy (let sq ft- million)5

5.708

5.000

14.2%

n/a

Closing Occupancy (% of MLA)6

87.0%

76.4%

+10.6ppts

n/a

Average Occupancy (let sq ft- million)

5.637

4.826

16.8%

n/a

Average Occupancy- YTD (let sq ft- million)

5.417

4.806

12.7%

n/a

Average Storage Rate (£)

26.40

26.54

(0.5%)

0.6%

Average Storage Rate (£)- YTD

26.51

26.63

(0.5%)

(0.5%)

 

 

Highlights

 

Group revenue for the quarter in CER2 up 19.7%


o UK total revenue +24.7%


o Paris total revenue +5.6%


o Spain total revenue +8.3%

Group like-for-like4 storage revenue in Q3 in CER2 up 17.7% and like-for-like total revenue up 18.6%.

Like-for-like4 occupancy up 10.6ppts at 87.0% (2020: 76.4%)


o UK up 11.8ppts at 87.6% (2020: 75.8%)


o Paris up 6.2ppts at 84.7% (2020 78.5%)

Contracts exchanged for new freehold development sites in Shoreham, UK and Southern Paris, which will together add c. 109,000 sq ft of MLA

Planning permission granted for previously announced Central Barcelona 1 and Southern Madrid sites

Additional new leasehold site in Central Barcelona of 19,000 sq ft MLA secured

Property Pipeline now at 702,000 sq ft of MLA

Strong momentum into Q4 with August like-for-like4 revenue up 21.5% (UK +26%, Paris +7.9%)

Full year earnings guidance further revised upwards. Adjusted Diluted EPRA Earnings per Share7 expected to be in a range of 39.5p to 40p.


Frederic Vecchioli, Chief Executive Officer commented:

"Safestore's unique business model, which combines advanced digital marketing and pricing analytics, a well-located portfolio with extensive pipeline, and a focus on store team sales skills, has once again delivered market leading results. I would like to thank our staff for continuing to perform excellently during the period.

"I am pleased to report that the strong trading momentum in the first half of the year has continued in the third quarter. The Group closing occupancy at 31 July 2021 was 5.985m sq ft, up 15.5% on 2020, and stood at 85.7%, up 10.1ppts on 2020. Rate was broadly flat but moved into positive territory on a like-for-like basis in CER (+0.6%) and move-in rates for new customers have been trending upward year-on-year in the UK, France and Spain. Our JV with Carlyle, operating in Belgium and the Netherlands, continues to perform in line with its business plan.

"We continue to focus on the significant upside from filling the 1.0m square feet of fully invested currently unlet space in our UK, Paris and Spain markets as well as the 0.7m of additional pipeline capacity. As the awareness and adoption of self-storage continues to increase, the Group, with its scale and expertise as well as existing funding capacity, is very well positioned to continue to grow its portfolio further.

"Whilst there is still potential for disruption from the COVID-19 pandemic, the inherent resilience of our business model as well as the momentum which has continued in the third quarter, gives the Board further confidence in relation to the outlook for the full year. We now anticipate that the business should deliver Adjusted Diluted EPRA Earnings per Share7 for 2020/21 of in a range of 39.5p to 40p which would represent an increase of c.31% to 32.5% compared to the prior year."

Business highlights

UK Trading Performance

 

UK Operating Performance- like-for-like4

Q3 2021

Q3 20203

Change

Storage Revenue (£'m)

28.4

23.2

22.4%

Ancillary Revenue (£'m)

7.1

5.7

24.6%

Revenue (£'m)

35.5

28.9

22.8%

Storage Revenue (£'m)- YTD

80.5

69.7

15.5%

Ancillary Revenue (£'m)- YTD

19.8

17.9

10.6%

Revenue (£'m)- YTD

100.3

87.6

14.5%

Closing Occupancy (let sq ft- million)5

4.596

3.970

15.8%

Closing Occupancy (% of MLA)6

87.6%

75.8%

+11.8ppts

Average Occupancy (let sq ft- million)

4.542

3.806

19.3%

Average Occupancy- YTD (let sq ft- million)

4.351

3.797

14.6%

Average Storage Rate (£)

24.81

24.22

2.4%

Average Storage Rate (£)- YTD

24.74

24.51

0.9%


The UK business performed very strongly in the third quarter with total revenue up 24.7%. Like-for-like storage revenue increased 22.4% whilst the performance of ancillary revenues improved significantly with growth of 24.6% compared to Q3 2020. As a result, total like-for-like revenue was up 22.8% for the quarter. For the year-to-date, like-for-like revenue was up 14.5% compared to 2020.

The strong UK result was driven by an excellent occupancy performance. Like-for-like average occupancy grew by 19.3% compared to Q3 2020 and the like-for-like closing occupancy at the end of April 2021 was up 11.8ppts at 87.6% (2020: 75.8%). The third quarter saw a like-for-like occupancy inflow of 274,000 sq ft compared to an inflow of 291,000 sq ft in Q3 2020. The third quarter in 2020 was particularly strong as trading bounced back after the initial COVID-19 lockdowns so it is pleasing to see a similar performance in the current year. Like-for-like average rate was up 2.4% for the quarter and 0.9% for the year-to-date.

Total revenue growth of 24.7% reflected the strong like-for-like performance, the 2020 store openings in Carshalton, Gateshead and Sheffield, the annualisation of the acquisitions of our St John's Wood and Chelsea stores, the 2021 opening of our Birmingham Middleway store and management fees from our Joint Venture with Carlyle. All acquisitions and new store developments are performing in line with or ahead of their business cases.

In August 2021, the first month of the fourth quarter, the momentum continued with total revenue growth of 27.5% driven by strong rate growth.

Paris Trading Performance

Paris Operating Performance- total and like-for-like4

Q3 2021

Q3 20203

Change

Storage Revenue (€'m)

10.61

10.06

5.5%

Ancillary Revenue (€'m)

1.05

0.98

7.1%

Revenue (€'m)

11.66

11.04

5.6%

Storage Revenue (€'m)- YTD

30.78

29.95

2.8%

Ancillary Revenue (€'m)- YTD

2.99

2.84

5.3%

Revenue (€'m)- YTD

33.77

32.79

3.0%

Closing Occupancy (let sq ft- million)5

1.112

1.030

8.0%

Closing Occupancy (% of MLA)6

81.7%

78.5%

+3.2ppts

Closing Occupancy- like for like (% of MLA)6

84.7%

78.5%

+6.2ppts

Average Occupancy (let sq ft- million)

1.095

1.020

7.4%

Average Occupancy- YTD (let sq ft- million)

1.066

1.009

5.6%

Average Storage Rate (€)

38.42

39.22

(2.0%)

Average Storage Rate (€)- YTD

38.59

39.66

(2.7%)

Revenue (£'m)

10.0

9.9

1.0%

Revenue (£'m)- YTD

29.5

28.6

3.1%


Paris had a strong quarter, with revenue growth accelerating from the first half of the year to 5.6% compared to last year.

For the current year-to-date, all stores in the portfolio, except Paris Magenta, are classified as like-for-like. Paris Magenta opened in late April 2021 but public road works, expected to conclude during September 2021, have limited access to the store which has, therefore, not contributed meaningfully to revenue at the period end.

Occupancy performance was robust for the quarter: average occupancy grew by 7.4% with closing occupancy at 81.7%, up 3.2ppts compared to 2020. The third quarter saw an occupancy inflow of 39,000 sq ft compared to an inflow of 45,000 sq ft in Q3 2020. Excluding the MLA of Paris Magenta, the closing occupancy was 84.7%, up 6.2ppts compared to Q3 2020.

The average storage rate was down 2.0% for the quarter although the rate grew by 0.4% compared to the second quarter of 2021, and the average rate paid by new customers was higher than in the same quarter last year. Ancillary revenues were strong, growing by 7.1% in the quarter.

In August 2021, the first month of the fourth quarter, total revenue growth was 8.1%.

Sterling equivalent revenue was up 1.0% for the quarter reflecting a 4.4% strengthening in the average Sterling: Euro exchange rate. For the year-to-date sterling revenue was up 3.1% reflecting a 0.2% weakening in the average exchange rate over the nine-month period.

Spain Trading Performance

 

Our Spanish business, which was acquired in December 2019 and is, therefore, not considered like-for-like, grew revenue by 8.3% in the quarter to €0.8m. Revenue for the nine months was €2.4m (2020: €1.7m for seven months). Closing occupancy in sq ft was down 1.0% whilst average rate in the year-to-date grew by 4.8% to €31.55 (2020: €30.10) with ancillary revenues improving strongly. Closing occupancy was 90.4% (2020: 93.5%).

Property Pipeline

Our pipeline of future development opportunities remains strong and gives us further confidence for our future growth plans.

 

New development site- Shoreham       

In July 2021, the Group exchanged contracts on a freehold 0.8 acre site in Shoreham, West Sussex. Shoreham is situated between Brighton and Worthing on the south coast of England. Subject to planning, we will open a purpose built 54,000 sq ft MLA store in Q4 of 2022.

 

New development site- Southern Paris

In August 2021, the Group exchanged contracts on a freehold site in Southern Paris with a significant frontage onto the N104 motorway. The site includes an existing building which will be demolished and replaced by a 55,000 sq ft MLA store. Subject to planning we expect the store to open in the third quarter of 2022.

 

New development site- Central Barcelona 2

In August 2021, the Group exchanged contracts on a leasehold site in Central Barcelona. The site is a former car dealership which will be converted to a 19,000 sq ft MLA store which, subject to planning, should open in Q2 of 2022.

 

Planning permissions- Central Barcelona 1 and Southern Madrid

Our Central Barcelona 1 (13,500 sq ft of MLA) and Southern Madrid (29,000 sq ft of MLA) stores, announced previously, were granted planning permission in August 2021 and are expected to open in the first and third quarters of 2022 respectively.

 

The Group now has a property pipeline of 702,000 sq ft of MLA with a total remaining capital expenditure requirement of c. £100m over the next four years, which the Group intends to self-finance. The pipeline comprises sites in London and the South East of England, Paris, Barcelona and Madrid. Full details are set out below.

Property Pipeline Summary

Store

FH/ LH

Status

MLA SQFT

Target Opening

 

Other

London- Bow

FH

Completed

74,000

Q1 2022

Conversion of existing building

London- Lea Bridge

FH

Contracts exchanged/ subject to planning

76,500

Q4 2024

New build.

£170k pa of rental income prior to opening.

London- North East London

FH

Contracts exchanged/ subject to planning

56,500

Q4 2025

New build.

London- Morden

FH

Completed/ Planning granted

52,000

Q4 2022

New build.

London- Bermondsey

FH

Completed/ Subject to Planning

50,000

Q2 2026

New build.

Shoreham

FH

Contracts exchanged/ subject to planning

54,000

Q4 2022

New build

London- Paddington Park West

LH

Completed/ Planning granted

13,000

Q2 2023

Conversion of Basement Car Park- Satellite store to existing Paddington store

London- Paddington Marble Arch

LH

Contracts exchanged/ planning granted

8,500

Q1 2022

Extension of existing site via conversion of adjacent basement car park

London- Wimbledon

FH

Contracts exchanged/ subject to planning

9,000 storage 1,000 office

Q2 2022

Extension of existing site

Southend

FH

Completed/ Planning granted

10,100

Q4 2021

Extension of existing site

London- Edgware

FH

Completed/ Planning granted

22,900

Q4 2021

Extension of existing site

Paris- La Défense

FH

Completed/ Subject to Planning

44,000

Q2 2025

Facility within mixed use development

Paris- Southern Paris

FH

Contracts exchanged/ subject to Planning

55,000

Q3 2022

New build

Northern Madrid

FH

Contracts exchanged/ subject to Planning

48,000

Q3 2022

Conversion of existing building

Southern Madrid

FH

Contracts exchanged/ Planning granted

29,000

Q3 2022

Conversion of existing building

Central Barcelona 1

FH

Contracts exchanged/ Planning granted

13,500

Q1 2022

Conversion of existing building

Central Barcelona 2

LH

Contracts exchanged/ subject to Planning

19,000

Q2 2022

Conversion of existing building

Northern Barcelona

FH

Contracts exchanged/ subject to Planning

36,300

Q3 2022

Conversion of existing building

South Barcelona

FH

Contracts exchanged/ subject to Planning

30,000

Q4 2022

Conversion of existing building

Total Pipeline MLA

c 702k

 

Total Further Capex

c £100m.

 



Ends

 

Notes

1 - Where reported numbers are presented either to the nearest £01.m or to the nearest 10,000 sq ft, the effect of rounding may impact the reported percentage change.

2 - CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, in order to present the reported results on a more comparable basis).

3 - Q3 2020 is the quarter ended 31 July 2020.

4 - Like-for-like information includes only those stores which have been open throughout both the current and prior financial years, with adjustments made to remove the impact of new and closed stores, as well as corporate transactions.

5 - Closing occupancy excludes offices but includes 14,000 sq ft of bulk tenancy as at 31 July 2021 (31 July 2020 - 14,000 sq ft).

6 - MLA is Maximum Lettable Area.

7 -- Adjusted Diluted EPRA EPS is based on the European Public Real Estate Association's definition of Earnings and is defined as profit or loss for the period after tax but excluding corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties and the associated tax impacts. The Company then makes further adjustments for the impact of exceptional items, IFRS 2 share-based payment charges, exceptional tax items, and deferred tax charges. This adjusted earnings is divided by the diluted number of shares. The IFRS 2 cost is excluded as it is written back to distributable reserves and is a non-cash item (with the exception of the associated National Insurance element). Therefore, neither the Company's ability to distribute nor pay dividends are impacted (with the exception of the associated National Insurance element). The financial statements will disclose earnings both on a statutory, EPRA and Adjusted Diluted EPRA basis and will provide a full reconciliation of the differences in the financial year in which any LTIP awards may vest.

 

 

Enquiries

 

Safestore Holdings plc

020 8732 1500

Frederic Vecchioli, Chief Executive Officer

 

Andy Jones, Chief Financial Officer

 

 

 

www.safestore.com

 

 

 

Instinctif Partners

020 7457 2020

Guy Scarborough, Bryn Woodward

 

 

Notes to editors:

 

Safestore is the UK's largest self-storage group with 161 stores at 31 July 2021, comprising 128 wholly owned stores in the UK (including 71 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool, Sheffield, Leeds, Newcastle and Bristol) and 29 wholly owned stores in the Paris region and four stores in Barcelona. In addition, the Group operates nine stores in the Netherlands and six stores in Belgium under a joint venture agreement with Carlyle.

Safestore operates more self-storage sites inside the M25 and in central Paris than any competitor providing more proximity to customers in the wealthiest and densest UK and French markets.

Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en Plus" ("UPP") in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic Vecchioli.

Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250 index in October 2015.

The Group provides storage to around 80,000 personal and business customers.

As at 31 July 2021, Safestore had a maximum lettable area ("MLA") of 6.983 million sq ft (excluding the expansion pipeline stores, and the Carlyle Joint Venture) of which 5.985 million sq ft was occupied. In addition, Safestore has a development pipeline of a further 702,000 sq ft of MLA.

Safestore employs around 700 people in the UK, Paris and Barcelona.

 

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