17 February 2022
Safestore Holdings plc
First quarter trading update for the period 1 November 2021 to 31 January 2022
Strong trading momentum continues into Q1 2022
| Group Operating Performance | Q1 2022 | Q1 20212 | Change | Change- CER1 |
| Revenue (£'m) | 50.9 | 44.4 | 14.6% | 16.0% |
| Closing Occupancy (let sq ft- million)3 | 5.708 | 5.506 | 3.7% | n/a |
| Maximum Lettable Area (MLA)4 | 7.067 | 6.871 | 2.8% | n/a |
| Closing Occupancy (% of MLA) | 80.8% | 80.1% | +0.7ppts | n/a |
| Average Storage Rate (£) | 29.55 | 26.47 | 11.6% | 13.3% |
| Group Operating Performance- like-for-like3 | Q1 2022 | Q1 20212 | Change | Change- CER1 |
| Revenue (£'m) | 50.4 | 44.0 | 14.5% | 16.1% |
| Closing Occupancy (let sq ft- million)4 | 5.641 | 5.472 | 3.1% | n/a |
| Closing Occupancy (% of MLA)5 | 82.1% | 80.2% | +1.9ppts | n/a |
| Average Occupancy (let sq ft- million) | 5.663 | 5.444 | 4.0% | n/a |
| Average Storage Rate (£) | 29.67 | 26.53 | 11.8% | 13.5% |
Highlights
· Group revenue for the quarter in CER1 up 16.0% and 14.6% at actual exchange rates.
· Like-for-like5 Group revenue for the quarter in CER1 up 16.1%
o UK up 19.0%
o Paris up 7.8%
o Spain up 10.4%
· Like-for-like5 occupancy up 1.9ppts at 82.1% (2021: 80.2%)
o UK up 2.0ppts at 82.1% (2021: 80.1%)
o Paris up 2.0ppts at 81.8% (2021 79.8%)
o Spain down 2.9ppts at 85.7% (2021: 88.6%)
· Like-for-like5 average rate up 13.5% in CER1.
o UK up 16.9%
o Paris up 4.6%
o Spain up 7.7%
· Planning permission granted on London Lea Bridge site.
· 40,000 sq ft store in Nijmegen in the Netherlands opened in January 2022.
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report that the strong trading momentum we saw in our 2021 financial year has continued into the first quarter of 2022. This was driven by an excellent UK result, complemented by strong performances from Paris and Spain.
"Our new store pipeline represents over 10% of our existing portfolio's MLA and we anticipate the pipeline will continue to grow over the coming months. Our strong and flexible balance sheet has significant funding capacity, allowing us to continue to consider and swiftly execute strategic, value-accretive investments as and when they arise.
"Alongside our attractive development pipeline we continue to prioritise the significant upside from filling our 1.4m square feet of fully invested, currently unlet space. The business has demonstrated its inherent resilience in recent times and, with our recent and current trading, allows us to look forward with confidence. The first quarter's trading performance has provided us with a strong base for the rest of the financial year and, if the current momentum continues, we anticipate that the business delivers Adjusted Diluted EPRA Earnings per Share7 for 2021/22, in line with the consensus of analysts' forecasts9".
Business highlights
UK Trading Performance
| UK Operating Performance | Q1 2022 | Q1 20212 | Change |
| Revenue (£'m) | 39.9 | 33.6 | 18.8% |
| Closing Occupancy (let sq ft- million)3 | 4.536 | 4.366 | 3.9% |
| Maximum Lettable Area (MLA)4 | 5.597 | 5.453 | 2.6% |
| Closing Occupancy (% of MLA) | 81.1% | 80.1% | +1.0ppts |
| Average Storage Rate (£) | 28.41 | 24.37 | 16.6% |
| UK Operating Performance- like-for-like3 | Q1 2022 | Q1 20212 | Change |
| Revenue (£'m) | 39.5 | 33.2 | 19.0% |
| Closing Occupancy (let sq ft- million)4 | 4.475 | 4.332 | 3.3% |
| Closing Occupancy (% of MLA)5 | 82.1% | 80.1% | +2.0ppts |
| Average Occupancy (let sq ft- million) | 4.496 | 4.309 | 4.3% |
| Average Storage Rate (£) | 28.55 | 24.43 | 16.9% |
Trading momentum in the UK has been strong in the first quarter of 2022. Like-for-like revenue growth of 19.0% was driven by a good average occupancy performance (+4.3%) and a continued strong storage rate performance (+16.9%).
We have seen a return to a more normal cycle of trading in the current financial year. In the first quarter, as anticipated, we have seen an occupancy outflow which is typical for the period (our low season). As a result, the like-for-like closing occupancy, as measured by sq ft occupied, was up 3.3% and like-for-like closing occupancy at the end of the quarter as a percentage of MLA was up 2.0ppts at 82.1% (2021: 80.1%). Our like-for-like average storage rate also grew sequentially by 4.8% compared to the fourth quarter of our 2021 Financial Year.
Demand continues to be strong with enquiry levels up c. 4% compared to Q1 2021 which was in itself a strong quarter. The enquiry levels were up c. 34% compared to Q1 2020 and up c. 60% compared to Q1 2019.
Total revenue also grew by 18.8% and included the 2021 opening of our Birmingham Middleway and London Bow stores, which were offset by the closure of our Birmingham South store.
Paris Trading Performance
| Paris Operating Performance | Q1 2022 | Q1 20212 | Change |
| Revenue (€'m) | 12.15 | 11.23 | 8.2% |
| Closing Occupancy (let sq ft- million)3 | 1.079 | 1.046 | 3.2% |
| Maximum Lettable Area (MLA)4 | 1.362 | 1.312 | 3.8% |
| Closing Occupancy (% of MLA) | 79.2% | 79.8% | -0.6ppts |
| Average Storage Rate (€) | 40.84 | 39.10 | 4.5% |
| Revenue (£'m) | 10.26 | 10.09 | 1.7% |
| Paris Operating Performance- like-for-like3 | Q1 2022 | Q1 20212 | Change |
| Revenue (€'m) | 12.11 | 11.23 | 7.8% |
| Closing Occupancy (let sq ft- million)4 | 1.073 | 1.046 | 2.6% |
| Closing Occupancy (% of MLA)5 | 81.8% | 79.8% | +2.0ppts |
| Average Occupancy (let sq ft- million) | 1.075 | 1.041 | 3.3% |
| Average Storage Rate (€)8 | 40.88 | 39.10 | 4.6% |
| Revenue (£'m) | 10.22 | 10.09 | 1.3% |
Our Paris business had a good quarter growing total revenue by 8.2% compared to Q1 2021.
We have seen a return to a more normal cycle of trading in the current financial year with a modest occupancy outflow in the period which is typical for the first quarter (our low season). As a result, like-for-like closing occupancy for the quarter was 81.8%, up 2.0ppts compared to Q1 2021. The like-for-like average storage rate, which was up by 4.6%, showed good momentum and combined with average occupancy growth of 3.3%, drove like-for-like revenue growth of 7.8%. Our like-for-like average storage rate also grew sequentially by 2.8% compared to the fourth quarter of our 2021 Financial Year.
Demand in Paris is also strong with enquiry levels, on a like-for-like basis, broadly flat compared to Q1 2021 and up c. 20% compared to Q1 2020 and up 26% compared to Q1 2019.
Sterling equivalent revenue was impacted by the 6.4% strengthening in the Sterling: Euro exchange rate for the quarter compared to Q1 2021. As a result, Sterling equivalent total and like-for-like revenue grew by 1.7% and 1.3% respectively compared to Q1 2021.
Spain Trading Performance6
| Spain Operating Performance- total and like-for-like | Q1 2022 | Q1 20212 | Change |
| Revenue (€'m) | 0.85 | 0.77 | 10.4% |
| Closing Occupancy (let sq ft- thousands)3 | 92.8 | 93.9 | (1.2%) |
| Maximum Lettable Area (MLA)4 | 108.3 | 106.0 | 2.2% |
| Closing Occupancy (% of MLA) | 85.7% | 88.6% | -2.9ppts |
| Average Storage Rate (€) | 33.47 | 31.09 | 7.7% |
| Revenue (£'m) | 0.72 | 0.69 | 4.3% |
Our Spanish business, which is now considered like-for-like, delivered overall like-for-like revenue growth of 10.4% compared to Q1 2021. A small seasonal outflow of occupancy ended the quarter at a closing occupancy of 85.7% (2021: 88.6%). However, the average storage rate grew by 7.7% to €33.47 compared to €31.09 for Q1 2021 and ancillary revenue growth was strong.
Sterling equivalent revenue was impacted by the 6.4% strengthening in the Sterling: Euro exchange rate for the quarter compared to Q1 2021. As a result, sterling equivalent total and like-for-like revenue grew by 4.3% compared to Q1 2021.
Property Pipeline
Our property pipeline has not changed since our 13 January 2022 Preliminary Results Announcement with the exception of our London Lea Bridge store being granted planning permission in the intervening period.
Our pipeline of c. 732,000 sq ft represents over 10% of our existing property portfolio.
| Store | FH/ LH | Status | MLA sq ft | Target Opening | Other |
| London- Lea Bridge | FH | Completed/ planning granted | 76,500 | Q1 2025 | New build. £170k pa of rental income prior to opening |
| London- Old Kent Road | FH | Completed/ subject to planning | 76,500 | TBC | New build. Rental income receivable prior to opening |
| London- Woodford | FH | Contracts exchanged/ subject to planning | 65,000 | Q4 2025 | New build |
| London- Morden | FH | Completed/ planning granted | 52,000 | Q1 2023 | New build |
| London- Bermondsey | FH | Completed/ subject to planning | 50,000 | Q4 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- Wimbledon | FH | Completed/ planning granted | 9,000 storage 1,000 office | Q2 2022 | Extension of existing site |
| Winchester | FH | Planning granted | 11,000 | Q4 2022 | Extension of existing site |
| Paris- La Défense | FH | Completed/ planning granted | 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 | Completed/ planning granted | 48,000 | Q4 2022 | Conversion of existing building |
| Southern Madrid | FH | Completed/ planning granted | 29,000 | Q4 2022 | Conversion of existing building |
| Eastern Madrid | FH | Contracts exchanged/ subject to planning | 49,000 | Q2 2023 | Conversion of existing building |
| Central Barcelona 1 | FH | Completed/ planning granted | 13,500 | Q3 2022 | Conversion of existing building |
| Central Barcelona 2 | LH | Contracts exchanged/ subject to planning | 19,000 | Q4 2022 | Conversion of existing building |
| Northern Barcelona | FH | Contracts exchanged/ subject to planning | 36,300 | Q1 2023 | Conversion of existing building |
| South Barcelona | FH | Contracts exchanged/ planning granted | 30,000 | Q4 2022 | Conversion of existing building |
| Total Pipeline MLA | c. 732k | | |||
| Total Further Capex | c. £90m | | |||
Joint Venture with Carlyle
As previously reported, in June 2021, the joint venture acquired a freehold site with an existing building in Nijmegen in the Netherlands. Nijmegen has a population of 177,000 and the site is well located on a main road with good visibility and access. Safestore provided 20% of the equity required to acquire and develop the site which will have an MLA of c. 40,000 sq ft. We are pleased to report that the store opened in January 2022.
Ends
1 - 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).
2 - Q1 2021 is the quarter ended 31 January 2021.
3 - Occupancy excludes offices but includes bulk tenancy. As at 31 January 2022, closing occupancy includes 14,000 sq ft of bulk tenancy (31 January 2021: 14,000 sq ft).
4 - MLA is Maximum Lettable Area.
5 - 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.
6 - The Barcelona business was acquired on 30 December 2019 and consists of the same four stores as were originally acquired. Consequently the business is now considered like-for-like.
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 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.
8 - The average like-for-like storage rate variance reported for November and December 2021 in the Group's Results announcement for the year-ended 31 October 2021 (released 13 January 2022) for Paris was stated as +1.5%. For the purposes of this calculation only, the like-for-like average storage occupancy for the prior year's two month period was understated by 2.7% and the prior year like-for-like average storage rate used in the variance calculation was therefore overstated. This has now been amended and the variance should have been reported as +4.3%. Please note that this misstatement was isolated to the above calculation only and the revenue reported for November and December 2021 and the revenue and rate reported in January 2021 for the November and December 2020 period were correctly stated.
9 - The analyst consensus for Adjusted Diluted EPRA EPS for the current financial year, based on the forecasts of ten analysts, is 44.8p.The ten analyst forecasts range from 42.4p to 47.6p.
This announcement contains inside information.
Enquiries
| Safestore Holdings plc | 020 8732 1500 |
| Frederic Vecchioli, Chief Executive Officer |
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| Andy Jones, Chief Financial Officer |
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| Instinctif Partners | 020 7457 2020 |
| Guy Scarborough Bryn Woodward |
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Notes to editors:
| · Safestore is the UK's largest self-storage group with 162 stores at 31 January 2022, comprising 129 wholly owned stores in the UK (including 72 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), 29 wholly owned stores in the Paris region and 4 stores in Barcelona. In addition, the Group operates 10 stores in the Netherlands and 6 stores in Belgium under a joint venture agreement with Carlyle. |
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| · 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 more densely populated UK and French markets.
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| · 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.
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| · Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250 index in October 2015.
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| · The Group provides storage to around 80,000 personal and business customers.
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| · As at 31 January 2022, Safestore had a maximum lettable area ("MLA") of 7.067 million sq ft (excluding the expansion pipeline stores, and the Carlyle Joint Venture) of which 5.708 million sq ft was occupied.
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| · Safestore employs around 700 people in the UK, Paris and Barcelona. |
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