REG - Big Yellow Group PLC - Results for the Six Months ended 30 September 2023
20/11/2023 16:45
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231120:nRST0281Ua&default-theme=true
RNS Number : 0281U Big Yellow Group PLC 20 November 2023
20 November 2023
Big Yellow Group PLC
("Big Yellow", "the Group" or "the Company")
Results for the Six Months ended 30 September 2023
Six months ended Six months ended
30 September 2023
30 September 2022
Financial metrics Change
Revenue £99.6 million £93.8 million 6%
Store revenue ((1)) £98.3 million £92.8 million 6%
Like-for-like store revenue ((1,2)) £96.8 million £92.5 million 5%
Store EBITDA ((1)) £71.5 million £66.8 million 7%
Adjusted profit before tax ((1)) £53.5 million £54.6 million (2%)
EPRA earnings per share ((1)) 29.0 pence 29.3 pence (1%)
Interim dividend per share 22.6 pence 22.3 pence 1%
Statutory metrics
Profit before tax £119.6 million £6.8 million £112.8m
Cash flow from operating activities (after net finance costs and pre-working (2%)
capital movements)((3))
£54.3 million £55.2 million
Basic earnings per share 65.3 pence 3.3 pence 62.0p
Store metrics 6,419,000 6,295,000 2%
Store Maximum Lettable Area ("MLA") ((1))
Closing occupancy (sq ft) ((1)) 5,228,000 5,300,000 (1%)
Occupancy growth in the period (sq ft) ((1,4)) 140,000 154,000 (9%)
Closing occupancy ((1)) 81.4% 84.2% (2.8 ppts)
Occupancy - Big Yellow like-for-like stores ((1,5)) 84.6% 86.8% (2.2 ppts)
Average achieved net rent per sq ft ((1)) £33.02 £30.55 8%
Closing net rent per sq ft ((1)) £33.47 £31.44 6.5%
(1) See note 20 for glossary of terms
(2) Excluding Aberdeen (acquired June 2022), Harrow and Kingston North (both
opened September 2022) and Kings Cross (opened June 2023).
(3) See reconciliation in Financial Review
(4) In June 2022, the Group acquired a store in Aberdeen with 39,000 sq ft of
occupancy. The total increase in the Group's occupancy for the six months to
30 September 2022 was 193,000 sq ft.
(5) As per (2), additionally excluding the Armadillo stores
First Half Highlights
• Revenue growth for the period was 6%, with like-for-like store revenue up by
5%, driven by increases in average achieved rents
• Like-for-like occupancy increase of 1.5 ppts from 1 April 2023 and down 2.2
ppts from same time last year to 84.6% (September 2022: 86.8%). Closing
occupancy, reflecting the additional capacity from recently opened stores, is
81.4% (September 2022: 84.2%)
• Average achieved net rent per sq ft increased by 8% period on period, closing
net rent up by 6.5% from September 2022
• Overall store EBITDA was up 7% in the period and the EBITDA margin increased
over the six months to 72.7% (2022: 72.0%); the established store portfolio
increased to 75.1% (2022: 74.1%) with closing occupancy of 85.5% (2022: 88.2%)
• Cash flow from operating activities (after net finance costs and pre-working
capital movements) decreased by 2% to £54.3 million, which reflects our
increased borrowing and operating costs over the period
• Adjusted profit before tax down 2% to £53.5 million, with EPRA earnings per
share down 1%
• Statutory profit before tax of £119.6 million compared to £6.8 million in
the prior period due to a revaluation surplus of £67.2 million in the period
(2022: deficit of £47.7 million), reflecting the growth in operating cash
flow during the period
• Interim dividend of 22.6 pence per share declared, an increase of 1%
Investment in new capacity
• £107 million (net of expenses) raised by way of a placing of 6.3% of the
Company's issued share capital to fund the build out of the development
pipeline
• 121,000 sq ft of capacity added in the period with one new store opened in
Kings Cross, and an extension completed at Armadillo Stockton South
• Acquisition of freehold property in Leicester, taking the pipeline to 11
development sites and two replacement stores of approximately 0.9 million sq
ft (14% of current MLA), of which 11 are in London or within close
proximity. 1.2 million sq ft of fully built vacant space is currently
available for future growth
• Planning consent granted for new store in Wapping (London); we now have seven
of our 13 pipeline stores with planning
Commenting, Nicholas Vetch CBE, Executive Chairman, said:
"We have delivered strong EBITDA growth with the increase in net achieved
rents offsetting the rise in operating costs, with profit marginally down due
to higher interest rates. Our London and South East stores, representing 74%
of revenue, have outperformed those located in the regions.
The transition to a higher interest rate environment has been testing but we
believe that this has now been largely absorbed into the business.
Following the recent placing, we have the funding and balance sheet strength
to commence the build out of the next phase of stores. We believe that this,
along with the available space on our existing platform, will drive a
significant increase in revenue and earnings over the next few years.
The balance sheet will be further strengthened by the sale of approximately
£90 million of surplus non-storage assets, which we expect to complete over
the next 18 months.
There is evidence that land prices have been, and are, dropping materially and
this will provide an opportunity to replenish the pipeline."
- Ends -
ABOUT US
Big Yellow is the UK's brand leader in self storage. Big Yellow now operates
from a platform of 109 stores, including 24 stores branded as Armadillo Self
Storage. We have a pipeline of 0.9 million sq ft comprising 13 proposed Big
Yellow self storage facilities. The current maximum lettable area of the
existing platform (including Armadillo) is 6.4 million sq ft. When fully
built out the portfolio will provide approximately 7.3 million sq ft of
flexible storage space. 99% of our stores and sites by value are held
freehold and long leasehold, with the remaining 1% short leasehold.
The Group has pioneered the development of the latest generation of self
storage facilities, which utilise state of the art technology and are located
in high profile, accessible, main road locations. Our focus on the location
and visibility of our stores, with excellent customer service, a
market-leading online platform, and significant and increasing investment in
sustainability, has created in Big Yellow the most recognised brand name in
the UK self storage industry.
For further information, please contact:
Big Yellow Group PLC 01276 477811
Nicholas Vetch CBE, Executive Chairman
Jim Gibson, Chief Executive Officer
John Trotman, Chief Financial Officer
Teneo 020 7260 2700
Charlie Armitstead
Oliver Bell
CHAIRMAN'S STATEMENT
Big Yellow Group PLC, the UK's brand leader in self storage, is pleased to
announce its results for the six months ended 30 September 2023.
We have delivered strong EBITDA growth with the increase in net achieved rents
offsetting the rise in operating costs, with profit marginally down due to
higher interest rates. Our London and South East stores, representing 74% of
revenue, have outperformed those located in the regions.
Our operating expenses for the six months are up 8% (7% on a like-for-like
basis), principally from a significant increase in property rates from 1
April. However, we have benefited from rates provision releases on historic
assessments relating to the previous rating list, so our overall store
operating expense for the six months is up 4%.
The roll-out of our pipeline has continued with the successful opening of our
landmark store in Kings Cross (London) in June 2023, adding 103,000 sq ft of
capacity. Early trading from the store has been very encouraging, with the
store adding 24,000 sq ft of occupancy by 30 September 2023, and has now
reached breakeven at the EBITDA level. The pipeline is an important driver
of our performance, as illustrated by Camberwell, Bracknell and Battersea,
which opened during the second half of 2020. These three stores, at a
current average occupancy of 78%, are delivering an average EBITDA margin of
67%, and an EBITDA yield of 8.2% on cost, and we expect both these metrics to
grow over the next 12 months.
Financial results
Revenue for the period was £99.6 million (2022: £93.8 million), an increase
of 6%, with storage income up 7%, offset by lower growth in non-storage
income. Like-for-like store revenue was up 5%, driven by an increase in
average achieved net rent, offset by a slight fall in average occupancy.
Like-for-like store revenue excludes new store openings and acquired
stores. Store EBITDA was £71.5 million, an increase of 7% from the prior
period (2022: £66.8 million).
The Group made an adjusted profit before tax in the period of £53.5 million,
down 2% from £54.6 million for the same period last year (see note 6). The
Group's cash flow from operating activities (after net finance costs and
pre-working capital movements) also reduced by 2% to £54.3 million for the
period (2022: £55.2 million). The increase in the profitability from the
stores was more than offset by an increase in the Group's interest expense for
the period, following the rises in interest rates. We expect the Group's
interest expense to reduce in the second half following the placing in
October.
Adjusted diluted EPRA earnings per share were 29.0 pence (2022: 29.3 pence), a
decrease of 1%. The Group's statutory profit before tax for the period was
£119.6 million, an increase from £6.8 million for the same period last year,
due to a revaluation surplus of £67 million in the period (2022: deficit of
£47.7 million), reflecting the growth in cash flow during the period.
Dividends
The Board has approved an interim dividend of 22.6 pence per share
representing a 1% increase from the prior period (77% of first half adjusted
eps). We expect the dividend for the full year to be in line with our policy
of distributing 80% of full year adjusted earnings per share. This first
half dividend has all been declared as Property Income Distribution ("PID").
Placing
We have made it clear for many years that we believe that a low level of debt
is appropriate. That belief has been reinforced by the rise in interest
rates over the last 21 months. We believe it is therefore optimal that
future capital expenditure over the medium term should be funded from equity,
cash flow and surplus land and property sales.
In October 2023, the Group raised £107 million (net of expenses) through a
placing of 6.3% of the Company's share capital. The net proceeds will allow
us to expand capacity in London, our strongest market, and monetise land that
we already own. It will also be marginally accretive to earnings in the
short term, and the Directors expect it to be significantly so over the medium
to long term.
Development pipeline
In June, the Group acquired a 0.8 acre property for development on Belgrave
Gate, central Leicester for £1.85 million. We will be seeking planning
permission for a 58,000 sq ft self-storage centre on the site. The site is
currently generating an income of approximately £110,000 per annum, across
four short-term rolling tenancies.
During the period we obtained planning consent for a 132,000 sq ft self
storage centre and 114 flats at appeal on our site in Wapping, London. We
expect that this new store will deliver an approximately 9% net operating
income return on the total capital deployed of £56 million, including the
estimated £36 million to be spent on construction. Demolition of the
existing buildings on the self storage site will commence shortly.
In May 2022, we suspended construction on all projects that were not already
on site because conditions in the construction market were unfavourable. Those
conditions have improved considerably with steelwork and cladding prices
falling, and other material prices stabilising. In addition, we are seeing
that main contractors and specialist sub-contractors are pricing new projects
more competitively.
Following the placing, we will now press on with the construction of an
initial six sites including Farnham Road, Slough, Wapping, Wembley,
Queensbury, Staines, and Slough Bath Road, all of which have planning consent
at an incremental cost of £90 million.
Subject to receipt of planning and vacant possession, construction will then
follow in due course on the remaining sites we own at a further incremental
cost of £147 million.
The projected net operating income of the increase in our total capacity of
902,000 sq ft when stabilised is £30.4 million representing an approximate
13% return on the incremental capital deployed. On a proforma basis at
stabilisation, the projected net operating income for the 11 new stores and
two replacement stores is £33.9 million, a return of approximately 8.7% on
the total development cost of £389 million, including land already acquired.
Capital structure
The Group owns its assets largely freehold, representing some 99% by value of
our portfolio which has shielded us from the significant rise in industrial
and warehouse rents that has occurred over the last 10 years.
In addition, we view rent liabilities as quasi-debt. Once we have relocated
our Farnham Road Slough and Staples Corner stores (the latter subject to
planning) we expect our total rent liability to fall to approximately £1
million per annum.
The Group's interest cover for the period (expressed as the ratio of cash
generated from operations pre-working capital movements against interest paid)
was 5.3 times (2022: 9.3 times). On a proforma basis (see note 19) following
the placing, based on October's EBITDA and following the repayment of debt,
this interest cover ratio is currently estimated at over 6 times, and also on
a proforma basis, the Group's net debt to EBITDA ratio is now 3.0x.
Net debt was £495.3 million at 30 September 2023. Following the placing, on
a proforma basis (see note 19), it was £388.3 million, giving the Group
undrawn facilities of £159 million and in addition the $225 million bilateral
shelf facility with Pricoa. Following the placing, approximately 50% of
our debt is fixed, with the balance floating, in line with our hedging policy,
and our current average cost of debt is 5.6%.
Outlook
The transition to a higher interest rate environment has been testing but we
believe that this has now been largely absorbed into the business.
Following the recent placing, we have the funding and balance sheet strength
to commence the build out of the next phase of stores. We believe that this,
along with the available space on our existing platform, will drive a
significant increase in revenue and earnings over the next few years.
The balance sheet will be further strengthened by the sale of approximately
£90 million of surplus non-storage assets, which we expect to complete over
the next 18 months.
There is evidence that land prices have been, and are, dropping materially and
this will provide an opportunity to replenish the pipeline.
Nicholas Vetch CBE
Executive Chairman
20 November 2023
BUSINESS AND FINANCIAL REVIEW
Store occupancy
We now have a portfolio of 109 open and trading stores, with a current maximum
lettable area of 6.4 million sq ft (2022: 108 stores, MLA of 6.3 million sq
ft).
Like-for-like occupancy increased by 1.5 ppts from 1 April 2023 but was down
2.2 ppts from the same time last year. Like-for-like store revenue growth
for the half year was 5%, driven by improvements in average achieved net rent
per sq ft.
Prospect numbers are more in-line with the pre-Covid period on a like-for-like
basis, and activity levels within the business have consequently been a little
bit slower than last year, with move-ins down 5%, and move-outs down 5% over
the period, reflecting less churn. Our conversion rates over the period have
increased, which is indicative of more needs-driven demand. This trend has
continued post period end, where move-in and move-out activity are down
similar amounts to last year.
Occupancy across all 109 stores increased by 140,000 sq ft over the six months
compared to a gain of 154,000 sq ft in the same period last year (with an
additional 39,000 sq ft of occupancy acquired with Aberdeen in June 2022).
Demand from domestic customers has been stronger than last year, up 133,000 sq
ft. Business occupancy dropped by 1.6% or 31,000 sq ft, on 1.9 million sq ft
occupied at the beginning of the period and student occupancy rose by 38,000
sq ft. Our larger rooms, which are occupied in the main by businesses,
remain highly occupied, particularly in London. 68% of our revenue derives
from domestic and student customers, with the balance from our business
customers.
As we have experienced over the years, there are businesses who outgrow us and
move to their own accommodation, others cease operations, some are seasonal,
and we continue to replace any vacated space with new move-ins from online
traders, e-tailers and service providers. We are not seeing any noticeable
softening in demand from businesses, particularly in London, and since the
period end, our business occupancy performance is better than last year.
Over the six months, revenue from national customers (businesses who occupy
space in multiple stores) has increased by 11% compared to the same period
last year.
Our third quarter is historically the weakest trading quarter where we see a
loss in occupancy with a return to growth in the fourth quarter. In the
current year, we have lost 117,000 sq ft (1.8% of maximum lettable area "MLA")
since the end of September, compared to a loss of 141,000 sq ft (2.2% of MLA)
at the same stage last year.
At 30 September, the 76 established Big Yellow stores were 85.5% occupied
compared to 88.2% at the same time last year. The nine developing Big Yellow
stores added 52,000 sq ft of occupancy in the past six months to reach closing
occupancy of 56.5%.
The Armadillo stores, representing 10% of the Group's revenue, added 27,000 sq
ft of occupancy with closing occupancy of 78%, including an additional 20,000
sq ft of capacity added at Stockton South. Overall store occupancy was
81.5%.
Rental growth
We continue to manage pricing dynamically, taking account of room
availability, customer demand and local competition, with our pricing model
reducing promotions and increasing asking prices where individual units are in
scarce supply.
In the current trading environment against the backdrop of higher inflation,
we continue to price competitively to win new customers, and are achieving
rental growth from existing customers broadly in line with inflation. It
must be remembered that some 60% to 70% of our customers move-out within six
months, and therefore do not receive any price increases.
The average achieved net rent per sq ft increased by 8% compared to the prior
period, with closing net rent up 3% compared to 31 March 2023, and up 6.5%
from the same time last year. The table below shows the change in net rent
per sq ft for the portfolio by average occupancy over the six months (on a
non-weighted basis).
Average occupancy in the six months Net rent per sq ft growth from 1 April to 30 September 2023 Net rent per sq ft growth from 1 April to 30 September 2022
75% to 85% 2.6% 4.9%
85 to 90% 3.5% 5.0%
Above 90% 4.7% 5.9%
Security of income
We believe that self storage income is essentially evergreen income with
highly defensive characteristics driven from buildings with very low
obsolescence and relatively low maintenance requirements. Although our
contract with our customers is in theory as short as a week, we do not rely on
any one contract for our income security. At 30 September 2023 the average
length of stay for existing customers was 30 months (March 2023: 31 months).
For all customers, including those who have moved out of the business
throughout the life of the portfolio, the average length of stay was 8.8
months (March 2023: 8.7 months). We have seen an increase in the length of
stay of customers who moved out over the six months, which increased to 9.1
months from 8.6 months for the same period last year.
37% of our customers by occupied space have been storing with us for over two
years (2022: 38%), and a further 15% of customers have been in the business
for between one and two years (2022: 16%). For the 52% of customers that
have stayed for more than one year, the average length of stay is 52 months.
Our business customer base is comprised of online retailers, B2B traders
looking for flexible mini-warehousing for e-fulfilment, service providers,
those looking to shorten supply chains, and businesses looking to rationalise
their other fixed costs of accommodation. For these customers, who typically
are looking for rooms which could be from 50 sq ft to 500 sq ft in facilities
that meet their operational requirements, the only supply in big cities is
from self storage providers.
We saw continued growth in occupancy from our domestic customer base, with
demand across a broad spectrum of uses. Over 70% of our domestic customers
are in the top 3 ACORN categories: Affluent Achievers, Rising Prosperity, and
Comfortable Communities. The largest element of demand into our business
each year is customers who use us for relatively short periods driven by a
need.
We therefore have a very diverse base of domestic and business customers
currently occupying 76,000 rooms. This, together with the location and
quality of our stores, limited growth in new supply, market-leading brand and
digital platform, and customer service, all contribute to the resilience and
security of our income.
We are not seeing any deterioration in rent collection. Approximately 80% of
our customers pay by direct debit, and the proportion of our billings that is
more than 10 days overdue is in line with last year and lower than
pre-Covid. Our bad debt expense for the period was 0.2%, unchanged from last
year.
Supply
New supply and competition is a key risk to our business model, hence our
weighting to London and its commuter towns, where barriers to entry in terms
of competition for land and difficulty around obtaining planning are
highest. Growth in new self storage centre openings, excluding container
operators, over the last five years has averaged approximately 3% of total
capacity per annum. We continue to see limited new supply growth in our key
areas of operation, with an anticipated twelve stores openings in 2023 and
2024 in London, including our Kings Cross store, representing around 2.5% to
3% of capacity.
Revenue
Total revenue for the six-month period was £99.6 million, an increase of
£5.8 million (6%) from £93.8 million in the same period last year with
storage income up 7%, offset by lower growth in non-storage income.
Like-for-like store revenue (see glossary in note 20) was £96.8 million, an
increase of 5% from the 2022 figure of £92.5 million.
Revenue growth for the period in our London stores was 8%, our south east
commuter stores 5%, and our regional stores 3%.
Other sales comprise the selling of packing materials, insurance/enhanced
liability service ("ELS"), and storage related charges. The Group changed the
way it sold contents protections to its customers on 1 June 2022 to an
Enhanced Liability Service ("ELS"), which is subject to VAT at 20% and not
Insurance Premium Tax ("IPT") at 12%, the latter being included in revenue.
We estimate the impact of this on the total revenue and like-for-like revenue
for the six months is 0.35%. For the remainder of the year, revenue from ELS
will be on a comparable basis.
The other revenue earned is tenant income on sites where we have not started
development.
Operating costs
Cost of sales comprises principally direct store operating costs, including
store staff salaries, utilities, business rates, insurance, a full allocation
of the central marketing budget, and repairs and maintenance.
The table below shows the breakdown of store operating costs compared to the
same period last year, with Armadillo's costs included in full in both
periods:
Period ended 30 September 2023 Period ended % of store operating costs in period
£000 30 September
Category 2022
£000 Change
Cost of sales (insurance/ELS and packing materials) 865 1,428 (39%) 3%
Staff costs 7,209 6,999 3% 27%
General & admin 676 695 (3%) 3%
Utilities 862 959 (10%) 3%
Property rates 9,155 7,521 22% 34%
Marketing 3,329 3,292 1% 12%
Repairs and maintenance 2,747 2,314 19% 10%
Insurance 1,697 1,290 32% 6%
Computer costs 509 509 - 2%
Total before non-recurring items 27,049 25,007 8%
Non-recurring items (1,272) (120)
Total per portfolio summary 25,777 24,887 4%
Store operating costs have increased by £0.9 million (4%). The
non-recurring items in the current period relate principally to the release of
a provision for property rates from the 2017 rating list, and a reassessment
of the Group's bad debt provision. Store operating costs before these
non-recurring items have increased by £2.0 million (8%) compared to the same
period last year. New stores accounted for £0.8 million of operating
expenses in the period. Cost of sales have decreased by £0.6 million
following the move to selling an ELS rather than insurance (see explanation in
revenue above). The remaining increase is £1.8 million (7%), with
commentary below:
- Staff costs have increased by £0.2 million (3%), with the salary review of on
average 5.5% (including a 6% increase to those at the lower end of the pay
scale), which has been partly offset by lower bonuses for the six months,
which have averaged 8% compared to 11% in the prior period. Additionally,
given the investment we have made in recent years in the automation of our
store operations, particularly in relation to interaction with prospects and
customers, we continue to review every vacancy before making a decision to
recruit, and have made savings from this through the salary line.
- Property rates have increased by £1.6 million (22%), following the Rating
Revaluation published in November 2022, the like-for-like increase is 19%,
with an additional four months' worth of rates payable on Kings Cross, which
opened in June 2023.
- We continue to see the benefit of our solar retrofit programme on our
utilities expense, which has reduced by 10% compared to the same period last
year. Our three year energy contract expired in September 2023. We have
placed a new one year contract from 1 October 2023, which had an increase in
cost of 74% from the expiring contract, albeit part of this increase will be
mitigated through our solar programme. We will review this next summer.
- The repairs and maintenance expense has increased due to higher store numbers,
timing of works in the current period, and an increase in solar panel
maintenance costs, with higher numbers of stores now with solar PVs.
- Overall insurance premiums increased from April and the new contents policy
includes Big Yellow paying for claims up to £250,000 in any one loss. As a
consequence, £215,000 in total was paid in claims this period (2022:
£54,000).
The table below reconciles store operating costs per the portfolio summary to
cost of sales in the income statement:
Period ended 30 September 2023 Period
£000 ended 30 September 2022
£000
Direct store operating costs per portfolio summary (excluding rent) 25,777 24,887
Rent included in cost of sales (total rent payable is included in portfolio 915 718
summary)
Depreciation charged to cost of sales 280 235
Head office operational management costs charged to cost of sales 832 610
Cost of sales per income statement 27,804 26,450
Store EBITDA
Store EBITDA for the period was £71.5 million, an increase of £4.7 million
(7%) from £66.8 million for the period ended 30 September 2022 (see Portfolio
Summary). The overall EBITDA margin for all stores during the period was
72.7%, up from 72.0% in 2022.
All stores are currently trading profitably at the Store EBITDA level, with
our recently opened store in Kings Cross breaking even after four months.
Administrative expenses
Administrative expenses in the income statement have decreased by £0.2
million (3%), following a reduction in the accrual for national insurance on
the exercise of share options given the fall in the Company's share price,
partly offset by an increase in the IFRS 2 charge in the period. Excluding
these two items, administrative expenses have increased by 4%.
Other operating income
In February 2022 the Group experienced a fire at our Cheadle store, which
resulted in a total loss to the store. Buildings all risk insurance is in
place for the full reinstatement value with the landlord. We also have
insurance cover in place for both our fit-out and four years loss of income.
The loss of income booked during the first six months of the financial year
was £0.8 million (2022: £0.7 million) which is included in other operating
income.
In the prior period the Group acquired the freehold of its Oxford store, thus
extinguishing the asset and liability in relation to the lease from the
previous landlord. This extinguishment gave rise to a gain of £0.2 million,
which is included in other operating income for 2022.
Interest expense on bank borrowings
Interest on bank borrowings during the period was £13.6 million, £5.8
million higher than the same period last year, due to higher average debt
levels in the period, coupled with a higher average cost of debt following the
increase in interest rates. The interest expense will be lower in the second
half of the year, as the placing proceeds were used to repay part of our
Revolving Credit Facility.
Interest capitalised in the period amounted to £1.8 million (2022: £1.6
million), arising on the Group's construction programme.
Profit before tax
The Group's statutory profit before tax for the period was £119.6 million,
compared to £6.8 million for the same period last year. The increase in
profitability is due to a revaluation gain in the in the period compared to a
loss in the prior period, which contained an outward shift of cap rates due to
the underlying market conditions.
After adjusting for the revaluation movement of investment properties and
other matters shown in the table below, the Group made an adjusted profit
before tax in the period of £53.5 million, down 2% from £54.6 million in
2022.
Six months ended 30 September 2023 Six months ended 30 September 2022
£m £m
Profit before tax analysis
Profit before tax 119.6 6.8
(Gain)/loss on revaluation of investment properties (67.2) 47.7
Change in fair value of interest rate derivatives 1.1 (0.6)
Refinancing costs - 0.7
Adjusted profit before tax 53.5 54.6
Tax - (0.7)
Adjusted profit after tax 53.5 53.9
The movement in the adjusted profit before tax from the prior year is shown in
the table below:
Movement in adjusted profit before tax £m
Adjusted profit before tax for the six months to 30 September 2022 54.6
Increase in gross profit 4.4
Decrease in administrative expenses 0.2
Decrease in other operating income (0.1)
Increase in net interest payable (5.7)
Increase in capitalised interest 0.1
Adjusted profit before tax for the six months to 30 September 2023 53.5
Diluted EPRA earnings per share was 29.0 pence (2022: 29.3 pence), a decrease
of 1% from the same period last year.
Taxation
The Group is a Real Estate Investment Trust ("REIT"). We benefit from a
zero-tax rate on our qualifying self storage earnings. We only pay
corporation tax on the profits attributable to our residual business,
comprising primarily of the sale of packing materials and insurance, and
management fees earned by the Group.
There is a £0.9 million tax charge in the residual business for the period
ended 30 September 2023 (six months to 30 September 2022: £0.7 million).
The current period tax charge is largely offset in the income statement by an
adjustment to the prior year tax estimate.
Dividends
REIT regulatory requirements determine the level of Property Income
Distribution ("PID") payable by the Group. A PID of 22.6 pence per share is
proposed as the total interim dividend, an increase of 1% from 22.3 pence per
share for the same period last year.
The interim dividend will be paid on 26 January 2024. The ex-dividend date
is 4 January 2024, and the record date is 5 January 2024.
Cash flow
Cash flows from operating activities (after net finance costs and pre-working
capital movements) have decreased by 2% to £54.3 million for the period
(2022: £55.2 million), with a higher interest expense in the period leading
to the reduction. These operating cash flows are after the ongoing
maintenance costs of the stores, which for this first half were on average
approximately £25,000 per store. The Group's net debt has increased over
the period to £495.3 million (March 2023: £486.6 million), but on a proforma
basis following the placing has reduced to £388.3 million.
There are distortive working capital items in the current period, and
therefore the summary cash flow below sets out the free cash flow pre-working
capital movements
Six months ended 30 September 2023 Six months ended 30 September 2022
£m £m
Cash generated from operations pre-working capital movements 68.3 63.3
Net finance costs (12.8) (6.9)
Interest on obligations under lease liabilities (0.3) (0.4)
Other operating income received 0.1 0.7
Tax (1.0) (1.5)
Cash flow from operating activities pre-working capital movements 54.3 55.2
Working capital movements (3.5) (0.6)
Cash flow from operating activities 50.8 54.6
Capital expenditure (17.8) (73.5)
Receipt from Capital Goods Scheme - 0.2
Cash flow after investing activities 33.0 (18.7)
Dividends (41.7) (38.7)
Payment of finance lease liabilities (0.9) (0.7)
Issue of share capital 0.9 0.9
Receipt from termination of interest rate derivatives - 0.4
Loan arrangement fees paid - (1.2)
Increase in borrowings 7.4 58.0
Net cash outflow (1.3) -
The Group's interest cover for the period (expressed as the ratio of cash
generated from operations pre-working capital movements against interest paid)
was 5.3 times (2022: 9.3 times), with the reduction caused by the increase in
the interest expense over the period following the rise in borrowing costs and
a higher average debt level. On a proforma basis (see note 19) following the
placing, based on October's EBITDA and following the repayment of debt, this
interest cover ratio is currently estimated at over 6 times.
£2 million of the capital expenditure in the period related to the
acquisition of Leicester, with the balance of £15.8 million principally
construction capital expenditure on our new stores in Kings Cross, Slough
Farnham Road, and including an investment in the solar retrofitting of £2.1
million.
Balance sheet
Investment property
The Group's investment properties are carried at the half year at Directors'
valuation. They are valued externally by Jones Lang Lasalle ("JLL") at the
year end. The Directors' valuations reflect the latest cash flows derived
from each of the stores at the end of September.
In performing the valuations, the Directors consulted with JLL on the
capitalisation rates used in the valuations, which are based on the JLL
model. The Directors, as advised by the valuers, consider that the prime
capitalisation rates have remained stable since the March 2023 valuation date.
The Directors have made some minor amendments to a couple of the valuation
assumptions, namely the adjustment of stable occupancy levels on certain
stores that are consistently trading ahead of the previously used assumptions
and to certain assumptions on net achieved rents within the valuations.
Other than the above, the Directors believe the core assumptions used by JLL
in the March 2023 valuations are still appropriate at the September valuation
date.
At 30 September 2023 the external valuation of the Group's properties is shown
in the table below:
Analysis of property portfolio Value at 30 September 2023 Revaluation movement in the period
£m £m
Investment property 2,604.7 81.8
Investment property under construction 186.8 (14.6)
Investment property total 2,791.5 67.2
The revaluation surplus for the open stores in the period was £81.8 million,
reflecting the growth in operating cash flow. The revaluation deficit of
£14.6 million on the investment property under construction, is reflective of
discussions with JLL and is largely as a result of a reduction in the value of
our land without self storage planning.
The initial yield on the portfolio is 5.3% (31 March 2023: 5.3%). The
Group's annual report and accounts for the year ended 31 March 2023 contains a
detailed explanation of the valuation methodology.
Current development pipeline - with planning
Site Location Status Anticipated capacity
Wapping, London On the Highway, adjacent to existing Big Yellow store Planning consent granted, demolition of existing building to commence shortly Additional 95,000 sq ft
Wembley, London Towers Business Park Discussions ongoing to secure 70,000 sq ft
vacant possession
Queensbury, London Honeypot Lane Site acquired in November 2018 70,000 sq ft
Staines, London The Causeway Site acquired in December 2020. Consent also received to develop 9 industrial 65,000 sq ft
units totalling 99,000 sq ft
Slough Farnham Road Construction commenced in Summer 2023 with a view to opening in Summer 2024 Replacement for existing leasehold store
Slough Bath Road Site acquired in April 2019 90,000 sq ft
Newcastle Scotswood Road Planning consent granted 60,000 sq ft
Current development pipeline - without planning
Site Location Status Anticipated capacity
Leicester Belgrave Gate, Central Leicester Site acquired in June 2023. Planning discussions underway with Leicester 58,000 sq ft
City Council
Epsom, London East Street Site acquired in March 2021. Planning application refused by Epsom and Ewell 58,000 sq ft
Council and an appeal has been submitted
Kentish Town, London Regis Road Site acquired in April 2021. Planning application refused by Camden Council 68,000 sq ft
and an appeal to be submitted
West Kensington, London Hammersmith Road Site acquired in June 2021. Planning application submitted to Hammersmith and 175,000 sq ft
Fulham Council in February 2023
Old Kent Road, London Old Kent Road Site acquired in June 2022. Planning application submitted to Southwark 75,000 sq ft
Council in August 2023
Staples Corner, London North Circular Road Site acquired in December 2022. Planning discussions underway with Barnet Replacement for existing leasehold store, additional 18,000 sq ft
Council
Total - all sites 902,000 sq ft
The capital expenditure forecast for the remainder of the financial year
(excluding any new site acquisitions) is approximately £17 million, which
principally relates to construction costs on our development sites and the
continued retrofitting of solar panels across the Group's estate.
Financing and treasury
Our financing policy is to fund our current needs through a mix of debt,
equity, and cash flow to allow us to build out, and add to, our development
pipeline and achieve our strategic growth objectives, which we believe improve
returns for shareholders. We aim to ensure that there are sufficient
medium-term facilities in place to finance our committed development
programme, secured against the freehold portfolio, with debt serviced by our
strong operational cash flows. We maintain a keen watch on medium and
long-term rates and the Group's policy in respect of interest rates is to
maintain a balance between flexibility and hedging of interest rate risk.
The table below shows the Group's debt position at 30 September 2023:
Debt Expiry Facility Drawn Cost
Aviva Loan (fixed rate loan) September 2028 £157.4m £157.4m 3.4%
M&G loan (£35 million fixed at 4.5%, £85 million floating)
September 2029 £120m £120m 6.9%
Revolving bank facility (Lloyds, HSBC, and Bank of Ireland, floating)
October 2024 £270m £225m 6.6%
Total £547.4m £502.4m 5.7%
The Group is well progressed in refinancing our medium-term revolving credit
facility which expires in October 2024 and anticipate completing this
shortly.
In addition to the facilities above, the Group has a $225 million credit
approved shelf facility with Pricoa Private Capital ("Pricoa"), to be drawn in
fixed sterling notes. The Group can draw the debt in minimum tranches of
£10 million over the next two years with terms of between 7 and 15 years at
short notice, typically 10 days.
The Group was comfortably in compliance with its banking covenants at 30
September 2023 and is forecast to be for the period covered by the going
concern statement.
The Group's key balance sheet ratios are shown in the table below, including
on a proforma basis (see note 19) following the placing in October 2023:
30 September 2023 proforma post-placing
Ratio 30 September 2023 30 September 2022
Net debt to gross property assets 18% 14% 18%
Net debt to adjusted net assets 21% 16% 21%
Net debt to market capitalisation 29% 19%(1) 24%
Net debt to Group EBITDA ratio 3.8x 3.0x 3.9x
(1) Based on the market capitalisation at 17 November 2023
Net asset value
The adjusted net asset value per share is 1,277.5 pence (see note 13), up 3%
from 1,237.3 pence per share at 31 March 2023. The table below reconciles
the movement from 31 March 2023:
Equity shareholders' funds EPRA adjusted NAV pence per share
£m
Movement in adjusted net asset value
31 March 2023 2,287.2 1,237.3
Adjusted profit after tax 53.5 28.9
Equity dividends paid (41.9) (22.7)
Revaluation movements 67.2 36.3
Movement in purchaser's cost adjustment 2.9 1.6
Other movements (e.g. share schemes) 3.2 (3.9)
30 September 2023 2,372.1 1,277.5
Jim
Gibson
John Trotman
Chief Executive
Officer
Chief Financial Officer
20 November 2023
PORTFOLIO SUMMARY
September 2023 September 2022
Big Yellow Established Big Yellow Developing Total Big Yellow Armadillo Big Yellow Established Big Yellow Developing Total Big Yellow Armadillo
Total Total
Number of stores 76 9 85 24 109 76 8 84 24 108
At 30 September:
Total capacity (sq ft) 4,784,000 627,000 5,411,000 1,008,000 6,419,000 4,784,000 524,000 5,308,000 987,000 6,295,000
Occupied space (sq ft) 4,089,000 354,000 4,443,000 785,000 5,228,000 4,221,000 265,000 4,486,000 814,000 5,300,000
Percentage occupied 85.5% 56.5% 82.1% 77.9% 81.4% 88.2% 50.6% 84.5% 82.5% 84.2%
Net rent per sq ft £35.67 £32.30 £35.40 £22.44 £33.47 £33.50 £29.45 £33.26 £21.40 £31.44
For the period:
REVPAF((2)) £34.33 £19.59 £32.71 £20.17 £30.73 £32.99 £19.02 £31.88 £20.46 £30.05
Average occupancy 85.5% 55.8% 82.2% 77.9% 81.5% 88.3% 55.5% 85.7% 83.7% 85.4%
Average annual net rent psf £35.17 £31.55 £34.90 £22.42 £33.02 £32.53 £28.70 £32.33 £20.98 £30.55
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Self storage income 72,113 5,225 77,338 8,824 86,162 68,586 3,285 71,871 8,684 80,555
Other storage related 9,424 764 10,188 1,362 11,550 9,791 550 10,341 1,432 11,773
income ((2))
Ancillary store rental 532 95 627 10 637 430 84 514 7 521
Income
Total store revenue 82,069 6,084 88,153 10,196 98,349 78,807 3,919 82,726 10,123 92,849
Direct store operating (19,447) (2,621) (22,068) (3,709) (25,777) (19,384) (1,762) (21,146) (3,741) (24,887)
costs (excluding
depreciation)
Short and long (999) - (999) (84) (1,083) (1,063) - (1,063) (85) (1,148)
leasehold rent((3))
Store EBITDA((2)) 61,623 3,463 65,086 6,403 71,489 58,360 2,157 60,517 6,297 66,814
Store EBITDA margin 75.1% 56.9% 73.8% 62.8% 72.7% 74.1% 55.0% 73.2% 62.2% 72.0%
Deemed cost £m £m £m £m £m
To 30 September 2023 729.2 199.0 142.0 1,070.2
928.2
Capex to complete - 1.0 1.0 - 1.0
Total 729.2 200.0 929.2 142.0 1,071.2
(1) The Big Yellow established stores have been open for more than three years at
1 April 2023, and the developing stores have been open for fewer than three
years at 1 April 2023.
(2) See glossary in note 20.
(3) Rent under IFRS 16 for seven short leasehold properties accounted for as
investment properties under IAS 40.
The table below reconciles Store EBITDA to gross profit in the income
statement:
Period ended 30 September 2023 Period ended 30 September 2022
£000 £000
Store EBITDA Reconciling items Store EBITDA Reconciling items
Gross profit per income statement Gross profit per income statement
Store revenue/Revenue((4)) 98,349 1,215 92,849 967
99,564 93,816
Cost of sales((5)) (25,777) (2,027) (27,804) (24,887) (1,563) (26,450)
Rent((6)) (1,083) 1,083 - (1,148) 1,148 -
71,489 271 71,760 66,814 552 67,366
(4) See note 2 of the interim statement, reconciling items are management fees and
non-storage income.
(5) See reconciliation in cost of sales section in Business and Financial Review.
(6) The rent shown above is the cost associated with leasehold stores, only part
of which is recognised within gross profit in line with finance lease
accounting principles. The amount included in gross profit is shown in the
reconciling items in cost of sales.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted for use in the UK;
- the interim management report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board
Jim Gibson
John Trotman
Chief Executive
Officer
Chief Financial Officer
20 November 2023
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 September 2023
Six months ended Six months ended
30 September 2023 30 September 2022
(unaudited) (unaudited) Year ended 31 March 2023
(audited)
Note £000 £000 £000
Revenue 2 99,564 93,816 188,829
Cost of sales (27,804) (26,450) (54,307)
Gross profit 71,760 67,366 134,522
Administrative expenses (6,864) (7,091) (14,519)
Operating profit before gains and losses on property assets 64,896 60,275 120,003
Gain/(loss) on the revaluation of investment properties 9a 67,165 (47,673) (29,861)
Operating profit 132,061 12,602 90,142
Other operating income 2 762 899 2,185
Investment income - interest receivable 3 17 1 9
- fair value movement of 3 - 564 -
derivatives
Finance costs - interest payable 4 (12,157) (7,313) (16,894)
- fair value movement of derivatives (1,071) - (133)
Profit before taxation 119,612 6,753 75,309
Taxation 5 (20) (710) (1,977)
Profit for the period (attributable to equity shareholders) 119,592 6,043 73,332
Total comprehensive income for the period attributable to equity shareholders 119,592 6,043 73,332
Basic earnings per share 8 65.3p 3.3p 40.1p
Diluted earnings per share 8 64.9p 3.3p 39.8p
Adjusted profit before taxation is shown in note 6 and EPRA earnings per share
is shown in note 8.
All items in the income statement relate to continuing operations.
CONDENSED CONSOLIDATED BALANCE SHEET
30 September 2023
30 September 30 September
2023 2022 31 March 2023
(unaudited)
(unaudited)
(audited)
£000 £000
Note £000
Non-current assets
Investment property 9a 2,604,745 2,386,246 2,449,640
Investment property under construction 9a 186,847 268,012 260,720
Right-of-use assets 9a 17,952 18,849 18,148
Plant, equipment, and owner-occupied property 9b 4,159 3,882 4,003
Intangible assets 9c 1,433 1,433 1,433
Investment 9d 588 588 588
2,815,724 2,679,010 2,734,532
Current assets
Derivative financial instruments 12 - 1,013 316
Inventories 483 480 496
Trade and other receivables 10 11,199 8,506 8,314
Cash and cash equivalents 7,069 8,604 8,329
18,751 18,603 17,455
Total assets 2,834,475 2,697,613 2,751,987
Current liabilities (50,714) (47,399) (57,275)
Trade and other payables 11
Borrowings 12 (3,237) (3,083) (3,159)
Obligations under lease liabilities (2,252) (1,805) (2,020)
(56,203) (52,287) (62,454)
Non-current liabilities
Borrowings 12 (497,076) (473,056) (489,411)
Obligations under lease liabilities (17,333) (18,386) (17,676)
Derivative financial instruments 12 (755) - -
(515,164) (491,442) (507,087)
Total liabilities (571,367) (543,729) (569,541)
Net assets 2,263,108 2,153,884 2,182,446
Equity
Called up share capital 18,456 18,422 18,427
Share premium account 291,774 290,771 290,857
Reserves 1,952,878 1,844,691 1,873,162
Equity shareholders' funds 2,263,108 2,153,884 2,182,446
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September 2023 (unaudited)
Share premium account Other non-distributable reserve Capital redemption reserve Own shares
Share £000 £000 £000 Retained earnings £000 Total
capital £000 £000
£000
At 1 April 2023 18,427 290,857 74,950 1,795 1,797,436 (1,019) 2,182,446
Total comprehensive income for the period - -
- - 119,592 - 119,592
Issue of share capital 29 917 - - - - 946
Credit to equity for equity-settled share-based payments -
- - - 2,063 - 2,063
Dividends - - - - (41,939) - (41,939)
At 30 September 2023 18,456 291,774 74,950 1,795 1,877,152 (1,019) 2,263,108
Six months ended 30 September 2022 (unaudited)
Share premium account Other non-distributable reserve Capital redemption reserve Own shares
Share £000 £000 £000 Retained earnings £000 Total
capital £000 £000
£000
At 1 April 2022 18,397 289,923 74,950 1,795 1,800,329 (1,019) 2,184,375
Total comprehensive income for the period - -
- - 6,043 - 6,043
Issue of share capital 25 848 - - - - 873
Credit to equity for equity-settled share-based payments - -
- - 1,730 - 1,730
Dividends - - - - (39,137) - (39,137)
At 30 September 2022 18,422 290,771 74,950 1,795 1,768,965 (1,019) 2,153,884
Year ended 31 March 2023 (audited)
Share capital Share premium account Other non-distributable reserve Capital redemption reserve Retained earnings Total
£000 £000 £000 £000 £000 Own shares £000
£000
At 1 April 2022 18,397 289,923 74,950 1,795 1,800,329 (1,019) 2,184,375
Total comprehensive income for the year - - 73,332 73,332
- - -
Issue of share capital 30 934 - - - - 964
Credit to equity for equity-settled share-based payments - - - - 3,735 - 3,735
Dividends - - - - (79,960) - (79,960)
At 31 March 2023 18,427 290,857 74,950 1,795 1,797,436 (1,019) 2,182,446
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 September 2023
Six months ended Six months Year
30 September ended ended
2023
30 September 31 March
(unaudited)
2022
2023
£000 (unaudited)
(audited)
£000
Note £000
Cash generated from operations 17 64,789 62,660 128,973
Bank interest paid (12,778) (6,907) (16,486)
Interest on obligations under lease liabilities (293) (394) (706)
Interest received 17 - 8
Other operating income received 61 745 2,032
Tax paid (989) (1,517) (1,844)
Cash flows from operating activities 50,807 54,587 111,977
Investing activities
Purchase of non-current assets (17,804) (73,462) (106,413)
Receipt from Capital Goods Scheme - 173 182
Cash flows from investing activities (17,804) (73,289) (106,231)
Financing activities
Issue of share capital 946 873 964
Payment of finance lease liabilities (908) (706) (1,267)
Equity dividends paid (41,741) (38,731) (79,140)
Receipt from termination of interest rate derivatives - 436 436
Loan arrangement fees paid - (1,155) (1,507)
Increase in borrowings 7,440 57,984 74,492
Cash flows from financing activities (34,263) 18,701 (6,022)
Net decrease in cash and cash equivalents (1,260) (1) (276)
Opening cash and cash equivalents 8,329 8,605 8,605
Closing cash and cash equivalents 7,069 8,604 8,329
Notes to the Interim Review
1. ACCOUNTING POLICIES
Basis of preparation
The results for the period ended 30 September 2023 are unaudited and were
approved by the Board on 20 November 2023. The financial information
contained in this report in respect of the year ended 31 March 2023 does not
constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year has been
delivered to the Registrar of Companies. The auditor's report on those
accounts was not qualified and did not contain statements under section 498
(2) or (3) of the Companies Act 2006.
This condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the UK.
The annual financial statements of the Group are prepared in accordance with
UK-adopted international accounting standards. As required by the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority, the
condensed set of financial statements has been prepared applying the
accounting policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the year ended 31
March 2023.
The Group has adopted IFRS 17 (Insurance Contracts) during the period. There
has not been a material impact on the Group of the adoption of this standard.
Valuation of assets and liabilities held at fair value
For those financial instruments held at fair value, the Group has categorised
them into a three-level fair value hierarchy based on the priority of the
inputs to the valuation technique in accordance with IFRS 13. The hierarchy
gives the highest priority to quoted prices in active markets for identical
assets or liabilities (Level 1) and the lowest priority to unobservable inputs
(Level 3). If the inputs used to measure fair value fall within different
levels of the hierarchy, the category level is based on the lowest priority
level input that is significant to the fair value measurement of the
instrument in its entirety. The fair value of the Group's outstanding
interest rate derivative has been estimated by calculating the present value
of future cash flows, using appropriate market discount rates, representing
Level 2 fair value measurements as defined by IFRS 13. Investment Property
and Investment Property under Construction have been classified as Level 3.
This is discussed further in note 14.
Going concern
A review of the Group's business activities, together with the factors likely
to affect its future development, performance, and position, is set out in the
Chairman's Statement and the Business and Financial Review. The financial
position of the Group, its cash flows, liquidity position and borrowing
facilities are shown in the balance sheet, cash flow statement and
accompanying notes to the interim statement. Further information concerning
the Group's objectives, policies, and processes for managing its capital; its
financial risk management objectives; details of its financial instruments and
hedging activities; and its exposures to credit risk and liquidity risk remain
the same and can be found in the Strategic Report within the Group's Annual
Report for the year ended 31 March 2023.
At 30 September 2023 the Group had available liquidity of £52.0 million, from
a combination of cash and undrawn debt facilities. On 10 October 2023, the
Group raised £107 million (net of expenses) through a placing of 6.3% of the
Company's issued share capital. This further increased the liquidity
available to the Group. In addition, the Group has a $225 million shelf
facility in place with Pricoa Private Capital to be drawn in fixed sterling
notes. The Group can draw the debt in minimum tranches of £10 million over
the next three years with terms of between 7 and 15 years at short notice,
typically 10 days. The Group also has land surplus to its needs which will
be realised over the medium term, generating net cash proceeds estimated
currently at over £100 million. The Group is cash generative and for the
six months ended 30 September 2023, had operational cash flow of £50.8
million, with capital commitments at the balance sheet date of £8.0 million.
The Directors have prepared cash flow forecasts for a period of 18 months from
the date of approval of these financial statements, taking into account the
Group's operating plan and budget for the year ending 31 March 2024 and
projections contained in the longer-term business plan which covers the period
to March 2027. After reviewing these projected cash flows together with the
Group's and Company's cash balances, borrowing facilities and covenant
requirements, and potential property valuation movements over that period, the
Directors believe that, taking account of severe but plausible downsides, the
Group and Company will have sufficient funds to meet their liabilities as they
fall due for that period. The Group is well progressed in refinancing our
medium-term revolving credit facility which expires in October 2024 and
anticipate completing this shortly.
In making their assessment, the Directors have carefully considered the
outlook for the Group's trading performance and cash flows as a result of the
current geopolitical and macroeconomic environment, taking into account the
recent trading performance of the Group. The Directors have also considered
the performance of the business during the Global Financial Crisis and the
Covid-19 pandemic. The Directors modelled a number of different scenarios,
including material reductions in the Group's occupancy rates and property
valuations, and assessed the impact of these scenarios against the Group's
liquidity and the Group's banking covenants. The scenarios considered did
not lead to breaching any of the banking covenants, and the Group retained
sufficient liquidity to meet its financial obligations as they fall due.
Consequently, the Directors continue to adopt the going concern basis in
preparing the half year report.
2. SEGMENTAL INFORMATION
Revenue represents amounts derived from the provision of self storage
accommodation and related services which fall within the Group's ordinary
activities after deduction of trade discounts and value added tax. The
Group's net assets, revenue and profit before tax are attributable to one
activity, the provision of self storage accommodation and related services.
These all arise in the United Kingdom.
Six months ended Six months ended Year ended
30 September 2023 30 September 2022 (unaudited) 31 March 2023
(unaudited) £000 (audited)
£000
£000
Open stores
Self storage income 86,162 80,555 162,911
Insurance income - 3,043 3,047
Enhanced liability service income 8,927 5,906 14,272
Packing materials income 1,631 1,822 3,286
Other income from storage customers 992 1,002 2,010
Ancillary store rental income 637 521 1,213
98,349 92,849 186,739
Other revenue
Non-storage income 1,215 967 2,090
Total revenue 99,564 93,816 188,829
Non-storage income derives principally from rental income earned from tenants
of properties awaiting development.
The Group has also earned other operating income of £0.8 million in the
period, which is principally insurance proceeds for loss of income following
the destruction of the Group's Cheadle store by fire in 2022 (2022: £0.9
million).
Further analysis of the Group's operating revenue and costs are in the
Portfolio Summary and the Business and Financial Review. The seasonality of
the business is discussed in note 18.
3. INVESTMENT INCOME
Six months ended 30 September Six months Year ended
2023 ended 30 September 31 March
(unaudited) 2022 2023
£000 (unaudited) (audited)
£000 £000
Bank interest receivable 17 - 8
Unwinding of discount on Capital Goods Scheme receivable - 1 1
Total 17 1 9
Change in fair value of interest rate derivatives - 564 -
Total investment income 17 565 9
4. FINANCE COSTS
Six months ended 30 September Six months Year ended
2023 ended 30 September 31 March
(unaudited) 2022 2023
£000 (unaudited) (audited)
£000 £000
Interest on bank borrowings 13,617 7,836 18,156
Capitalised interest (1,753) (1,649) (2,761)
Interest on finance lease obligations 293 394 706
Other interest payable - - 61
Loan refinancing costs - 732 732
Total interest payable 12,157 7,313 16,894
Fair value movement on derivatives 1,071 - 133
Total finance costs 13,228 7,313 17,027
5. TAXATION
The Group is a REIT. As a result, the Group does not pay UK corporation tax on
the profits and gains from its qualifying rental business in the UK if it
meets certain conditions. Non-qualifying profits and gains of the Group are
subject to corporation tax as normal. The Group monitors its compliance with
the REIT conditions. There have been no breaches of the conditions to date.
Six months ended 30 September Six months Year ended
2023 ended 30 September 31 March
(unaudited) 2022 2023
£000 (unaudited) (audited)
£000 £000
Current tax:
- Current year 983 895 2,296
- Prior year (963) (185) (319)
20 710 1,977
6. ADJUSTED PROFIT
Six months ended Six months Year ended
30 September 2023 ended 31 March
(unaudited) 30 September 2023
£000 2022 (audited)
(unaudited) £000
£000
Profit before tax 119,612 6,753 75,309
(Gain)/loss on revaluation of investment properties (67,165) 47,673 29,861
Change in fair value of interest rate derivatives 1,071 (564) 133
Refinancing fees - 732 732
Adjusted profit before tax 53,518 54,594 106,035
Tax (20) (710) (1,977)
Adjusted profit after tax (EPRA earnings) 53,498 53,884 104,058
Adjusted profit before tax which excludes gains and losses on the revaluation
of investment properties, changes in fair value of interest rate derivatives,
net gains and losses on disposal of investment property, and material
non-recurring items of income and expenditure have been disclosed as, in the
Board's view, this provides a clearer understanding of the Group's underlying
trading performance.
7. DIVIDENDS
Six months ended Six months
30 September 2023 ended
(unaudited) 30 September
£000 2022
(unaudited)
£000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 March 2023 of 22.9p (2022: 21.4p) per 41,939 39,137
share
Proposed interim dividend for the year ending 31 March 2024 of 22.6p (2023: 44,086 40,824
22.3p) per share
The proposed interim dividend of 22.6 pence per ordinary share will be paid to
shareholders on 26 January 2024. The ex-dividend date is 4 January 2024, and
the record date is 5 January 2024. The interim dividend is all Property
Income Distribution.
8. EARNINGS PER ORDINARY SHARE
The European Public Real Estate Association ("EPRA") has issued recommended
bases for the calculation of certain per share information and these are
included in the following table:
Six months ended Six months ended Year ended
30 September 2023 (unaudited) 30 September 2022 (unaudited) 31 March 2023 (audited)
Earnings Shares Pence Earnings Shares Pence Earnings Shares Pence
£m million per share £m million per share £m million per share
Basic 119.6 183.2 65.3 6.0 182.9 3.3 73.3 183.0 40.1
Dilutive share options - 1.1 (0.4) - 1.0 - - 1.1 (0.3)
Diluted 119.6 184.3 64.9 6.0 183.9 3.3 73.3 184.1 39.8
Adjustments:
(Gain)/loss on revaluation of investment properties (67.2) - (36.5) 47.7 - 25.9 30.0 - 16.2
Change in fair value of interest rate derivatives 1.1 - 0.6 (0.5) - (0.3) 0.1 - 0.1
Refinancing fees - - - 0.7 - 0.4 0.7 - 0.4
EPRA - diluted 53.5 184.3 29.0 53.9 183.9 29.3 104.1 184.1 56.5
EPRA - basic 53.5 183.2 29.2 53.9 182.9 29.5 104.1 183.0 56.9
The calculation of basic earnings is based on profit after tax for the period.
The weighted average number of shares used to calculate diluted earnings per
share has been adjusted for the conversion of share options.
EPRA earnings and earnings per ordinary share have been disclosed to give a
clearer understanding of the Group's underlying trading performance.
9. NON-CURRENT ASSETS
a) Investment property
Investment property under construction Right-of-use assets
Investment £000 £000
property Total
£000 £000
At 1 April 2023 2,449,640 260,720 18,148 2,728,508
Additions 7,168 6,839 - 14,007
Adjustment to present value - - 604 604
Reclassification 66,162 (66,102) - 60
Revaluation 81,775 (14,610) - 67,165
Depreciation - - (800) (800)
At 30 September 2023 2,604,745 186,847 17,952 2,809,544
Capital commitments at 30 September 2023 were £8.0 million (31 March 2023:
£6.1 million).
b) Plant, equipment, and owner-occupied property
Motor vehicles Fixtures, fittings, and office equipment
Freehold property Leasehold improve-ments Plant and £000 £000 Right-of-use assets
machinery
£000 £000
£000 Total
£000
£000
Cost
At 1 April 2023 2,406 59 647 32 1,691 875 5,710
Additions 19 - 221 - 345 131 716
Reclassification to investment property under construction (60) - - (60)
- - -
Retirement of fully depreciated assets - (70) - (386)
- (316) -
At 30 September 2023 2,365 59 798 32 1,720 1,006 5,980
Accumulated depreciation
At 1 April 2023 (682) (20) (210) (32) (340) (423) (1,707)
Charge for the period (24) (2) (89) - (318) (67) (500)
Retirement of fully depreciated assets - 70 - 386
- 316 -
At 30 September 2023 (706) (22) (229) (32) (342) (490) (1,821)
Net book value
At 30 September 2023 1,659 37 569 - 1,378 516 4,159
At 31 March 2023 1,724 39 437 - 1,351 452 4,003
c) Intangible assets
The intangible asset relates to the Big Yellow brand, which was acquired
through the acquisition of Big Yellow Self Storage Company Limited in 1999.
The carrying value of £1.4 million remains unchanged from the prior year as
there is considered to be no impairment in the value of the asset. The asset
has an indefinite life and is tested annually for impairment or more
frequently if there are indicators of impairment.
d) Investment
The Group has an £0.6 million investment in Doncaster Security Operations
Centre Limited, a company which provides out-of-hours monitoring and alarm
receiving services, including for the Group's stores. The investment is
carried at cost and tested annually for impairment.
10. TRADE AND OTHER RECEIVABLES
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Current
Trade receivables 5,466 5,184 5,181
Other receivables 335 310 209
Prepayments and accrued income 5,398 3,012 2,924
11,199 8,506 8,314
11. TRADE AND OTHER PAYABLES
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Current
Trade payables 2,845 1,424 4,208
Other payables 18,213 15,612 18,199
Accruals and deferred income 29,656 30,363 34,868
50,714 47,399 57,275
12. BORROWINGS
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Aviva loan 3,237 3,083 3,159
Current borrowings 3,237 3,083 3,159
Aviva loan 154,130 157,336 155,768
M&G loan 120,000 120,000 120,000
Bank borrowings 225,000 198,000 216,000
Unamortised debt arrangement costs (2,054) (2,280) (2,357)
Non-current borrowings 497,076 473,056 489,411
Total borrowings 500,313 476,139 492,570
The Group does not hedge account for its interest rate swaps and states them
at fair value, with changes in fair value included in the income statement.
The loss in the income statement for the period on its interest rate swaps was
£1,071,000 (2022: gain of £564,000).
At 30 September 2023 the Group was in compliance with all loan covenants.
The movement in the Group's loans are shown net in the cash flow statement as
the bank loan is a revolving facility and is repaid and redrawn each month.
The Group's Revolving Credit Facility expires in October 2024. See
commentary in the Financial Review on the refinancing of this facility.
13. ADJUSTED NET ASSETS PER SHARE
EPRA's Best Practices Recommendations guidelines contain three Net Asset Value
(NAV) metrics: EPRA Net Tangible Assets (NTA), EPRA Net Reinstatement Value
(NRV) and EPRA Net Disposal Value (NDV).
EPRA NTA is considered to be most consistent with the nature of Big Yellow's
business which provides sustainable long-term progressive returns. EPRA NTA
is shown in the table below. This measure is further adjusted by the
adjustment the Group makes for purchaser's costs, which is the Group's
Adjusted Net Asset Value (or Adjusted NAV).
Basic net assets per share are shareholders' funds divided by the number of
shares at the period end. Any shares currently held in the Group's Employee
Benefit Trust are excluded from both net assets and the number of shares.
Adjusted net assets per share include: the effect of those shares issuable
under employee share option schemes and the effect of alternative valuation
methodology assumptions (see note 14).
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
Equity attributable to ordinary shareholders Equity attributable to ordinary shareholders Equity attributable to ordinary shareholders
£000 £000 £000
Pence per share Pence per share Pence per share
Shares Shares Shares
million million million
Basic NAV 2,263,108 183.4 1,233.8 2,153,884 183.1 1,176.3 2,182,446 183.1 1,191.7
Share and save as you earn schemes
2,107 2.3 (13.8) 1,172 1.7 (10.1) 1,909 1.7 (10.0)
Diluted NAV 2,265,215 185.7 1,220.0 2,155,056 184.8 1,166.2 2,184,355 184.8 1,181.7
Fair value of derivatives 755 - 0.4 (1,013) - (0.6) (316) - (0.2)
Intangible assets (1,433) - (0.8) (1,433) - (0.8) (1,433) - (0.7)
EPRA NTA 2,264,537 185.7 1,219.6 2,152,610 184.8 1,164.8 2,182,606 184.8 1,180.8
Valuation methodology assumption (see note 14)
107,545 - 57.9 102,108 - 55.3 104,605 - 56.5
Adjusted NAV 2,372,082 185.7 1,277.5 2,254,718 184.8 1,220.1 2,287,211 184.8 1,237.3
14. VALUATION OF INVESTMENT PROPERTY
The Group has classified the fair value investment property and the investment
property under construction within Level 3 of the fair value hierarchy. There
has been no transfer to or from Level 3 in the period.
The freehold and leasehold investment properties have been valued at 30
September 2023 by the Directors. The valuation has been carried out in
accordance with the same methodology as the year end valuations prepared by
Jones Lang Lasalle ("JLL").
The Directors' valuations reflect the latest cash flows derived from each of
the stores at 30 September 2023. In performing the valuations, the Directors
consulted with JLL on the capitalisation rates used in the valuations. The
Directors, as advised by JLL, consider that the capitalisation rates for prime
self storage stores are unchanged since the year end valuation date, with
continuing demand being seen from investors for self storage assets.
The Directors have made some minor amendments to a couple of the valuation
assumptions, namely the adjustment of stable occupancy levels on certain
stores that are consistently trading ahead of the previously used assumptions
and to certain assumptions on net achieved rents within the valuations.
Other than the above, the Directors believe the core assumptions used by JLL
in the March 2023 valuations are still appropriate at the September valuation
date. See the Group's annual report for the year ended 31 March 2023 for the
full detail of the valuation methodology.
Sensitivities
Self storage valuations are complex, derived from data which is not widely
publicly available and involve a degree of judgement. For these reasons we
have classified the valuations of our property portfolio as Level 3 as defined
by IFRS 13. Inputs to the valuations, some of which are 'unobservable' as
defined by IFRS 13, include capitalisation yields, stable occupancy rates, and
rental growth rates. The existence of an increase of more than one
unobservable input would augment the impact on valuation. The impact on the
valuation would be mitigated by the inter-relationship between unobservable
inputs moving in opposite directions. For example, an increase in stable
occupancy may be offset by an increase in yield, resulting in no net impact on
the valuation. A sensitivity analysis showing the impact on valuations of
changes in yields and stable occupancy is shown below:
Impact of a change in capitalisation rates Impact of a change in stabilised occupancy assumption
25 bps decrease 25 bps increase 1% increase 1% decrease
Reported Group 4.7% (4.3%) 1.2% (1.2%)
A sensitivity analysis has not been provided for a change in the rental growth
rate adopted as there is a relationship between this measure and the discount
rate adopted. So, in theory, an increase in the rental growth rate would
give rise to a corresponding increase in the discount rate and the resulting
value impact would be limited.
Valuation assumption for purchaser's costs
The Group's investment property assets have been valued for the purposes of
the financial statements after deducting notional weighted average purchaser's
cost of 6.8% of gross value, as if they were sold directly as property assets.
The valuation is an asset valuation that is entirely linked to the operating
performance of the business. The assets would have to be sold with the
benefit of operational contracts, employment contracts and customer contracts,
which would be very difficult to achieve except in a corporate structure.
This approach follows the logic of the valuation methodology in that the
valuation is based on a capitalisation of the net operating income after
allowing for the deduction of operational costs and an allowance for central
administration costs. Sale in a corporate structure would result in a
reduction in the assumed Stamp Duty Land Tax but an increase in other
transaction costs, reflecting additional due diligence, resulting in a reduced
notional purchaser's cost of 2.75% of gross value. All the significant sized
transactions that have been concluded in the UK in recent years were completed
in a corporate structure. The Directors have therefore carried out a
valuation on the above basis, and this results in a higher property valuation
at 30 September 2023 of £2,899.1 million (£107.5 million higher than the
value recorded in the balance sheet) which translates to 57.9 pence per
share. We have included this revised valuation in the adjusted diluted net
asset calculation (see note 13).
15. FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURES
The table below sets out the categorisation of the financial instruments held
by the Group at 30 September 2023. Where the financial instruments are held
at fair value the valuation level indicates the priority of the inputs to the
valuation technique. The fair value hierarchy gives the highest priority to
quoted prices in active markets for identical assets or liabilities (Level 1)
and the lowest priority to unobservable inputs (Level 3). Valuations
categorised as Level 2 are obtained from third parties. If the inputs used
to measure fair value fall within different levels of the hierarchy, the
category level is based on the lowest priority level input that is significant
to the fair value measurement of the instrument in its entirety.
Valuation level 30 September 2023 30 September 2022
(unaudited) (unaudited)
£000 £000
Interest rate derivatives (liability)/asset 2 (755) 1,013
16. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
AnyJunk Limited
Jim Gibson is a Non-Executive Director and shareholder in AnyJunk Limited, and
Adrian Lee is a shareholder in AnyJunk Limited. During the period AnyJunk
Limited provided waste disposal services to the Group on normal commercial
terms amounting to £7,000 (2022: £8,000).
London Children's Ballet
The Group signed a Section 106 agreement with Wandsworth Council relating to
the development of our Battersea store, which required the Group to provide
cultural space to Wandsworth Borough Council. In 2021, the Group granted a
twenty year lease over this space to London Children's Ballet at a peppercorn
rent, who in turn have agreed to enter into a Social Agreement with Wandsworth
Borough Council coterminous with the lease. Jim Gibson is the Chairman of
Trustees of the London Children's Ballet. London Children's Ballet rent
storage space from the Group on normal commercial terms, amounting to £2,000
during the period (2022: £1,000).
DS Operations Centre Limited
The Group has invested £0.6 million in DS Operations Centre Limited
("DSOC"). DSOC provided alarm and CCTV monitoring services to the Group
under normal commercial terms during the period, amounting to £154,000 (2022:
£148,000).
Treepoints Limited
Jim Gibson is a Non-Executive Director and an investor in City Stasher
Limited, which in turn has a minority investment in Treepoints Limited.
Treepoints Limited provided offsetting tree planting services in respect of
our online packing material sales, under normal commercial terms during the
period, amounting to £1,000 (2022: £6,000).
Ukrainian Sponsorship Pathway UK
Nicholas Vetch and Heather Savory are trustees of a charity called Ukrainian
Sponsorship Pathway UK ("USPUK") to help Ukrainians displaced by the war to
travel to the UK as part of the "Homes for Ukraine" scheme. The charity has
set up offices in Warsaw and Krakow and is one of the few that has been
recognised for this purpose by the UK Government. We are proud to be
financial supporters of this charity and the Board approved a donation which
was made in May 2023 of £50,000 (2022: £50,000).
17. CASH FLOW NOTES
a) Reconciliation of profit after tax to cash generated from operations
Note Six months Six months Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Profit after tax 119,592 6,043 73,332
Taxation 20 710 1,977
Other operating income (762) (899) (2,185)
Investment income (17) (565) (9)
Finance costs 13,228 7,313 17,027
Operating profit 132,061 12,602 90,142
(Gain)/loss on the revaluation of investment properties 14 (67,165) 47,673 29,861
Depreciation of plant, equipment, and owner-occupied property 9b 433 465 888
Depreciation of finance lease capital obligations 9a,9b 867 815 1,569
Employee share options 2,063 1,730 3,735
Cash generated from operations pre-working capital movements 68,259 63,285 126,195
Decrease/(increase) in inventories 13 3 (13)
Increase in receivables (2,704) (906) (740)
(Decrease)/increase in payables (779) 278 3,531
Cash generated from operations 64,789 62,660 128,973
b) Reconciliation of net cash flow to movement in net debt
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Net decrease in cash and cash equivalents (1,260) (1) (276)
Cash flow from movement in debt financing (7,440) (57,984) (74,492)
Change in net debt resulting from cash flows (8,700) (57,985) (74,768)
Movement in net debt in the period (8,700) (57,985) (74,768)
Net debt at start of period (486,598) (411,830) (411,830)
Net debt at end of period (495,298) (469,815) (486,598)
18. RISKS AND UNCERTAINTIES
The risks facing the Group for the remaining six months of the financial year
are consistent with those outlined in the Annual Report for the year ended 31
March 2023. The risk mitigating factors listed in the 2023 Annual Report are
still appropriate.
The economic outlook remains uncertain, with high, albeit moderating,
inflation and an associated impact on the cost of living. This, along with
geo-political uncertainty, may create economic headwinds in the quarter to
December 2023 and into 2024, which may have an impact on the demand for self
storage.
The value of Big Yellow's property portfolio is affected by the conditions
prevailing in the property investment market and the general economic
environment. Accordingly, the Group's net asset value can rise and fall due
to external factors beyond management's control. The uncertainties in the
global economy look set to continue. We have a high-quality prime portfolio of
assets that should help to mitigate the impact of this on the Group.
Self storage is a seasonal business, and we typically lose occupancy in the
December quarter. The new year typically sees an increase in activity,
occupancy, and revenue growth. The visibility we have in the business is
relatively limited at three to four weeks and is based on the net reservations
we have in hand, which are currently in line with our expectations.
There is a risk that our customers may default on their rent payments, however
we have not seen an increase in bad debts since the onset of the pandemic.
We have approximately 76,000 occupied rooms and this, coupled with the
diversity of our customers' reasons for using storage, mean the risk of
individual tenant default to Big Yellow is low. 80% of our customers pay by
direct debit and we take a deposit from all customers. Furthermore, we have
a right of lien over customers' goods, so in the ultimate event of default, we
are able to auction the goods to recover the debts.
19. POST BALANCE SHEET EVENT
In October 2023, the Group raised £107 million (net of expenses) through a
placing of 6.3% of the Company's share capital.
20. GLOSSARY
Absorption The rate of growth in occupancy assumed within the external property
valuations from the current occupancy level to the assumed stable occupancy
level.
Adjusted earnings growth The increase in adjusted eps period-on-period.
Adjusted eps Adjusted profit after tax divided by the diluted weighted average number of
shares in issue during the financial period.
Adjusted NAV EPRA NTA adjusted for an investment property valuation carried out at
purchasers' costs of 2.75%, see note 13.
Adjusted profit before tax The Company's pre-tax EPRA earnings measure with additional Company
adjustments.
Average net achieved rent per sq ft Storage revenue divided by average occupied space over the period.
Average rental growth The growth in average net achieved rent per sq ft period-on-period.
BREEAM An environmental rating assessed under the Building Research Establishment's
Environmental Assessment Method.
Carbon intensity Carbon emissions divided by the Group's average occupied space.
Closing net rent per sq ft Annual storage revenue generated from in-place customers divided by occupied
space at the balance sheet date.
Committed facilities Available undrawn debt facilities plus cash and cash equivalents.
Consolidated EBITDA Consolidated EBITDA calculated in accordance with the terms of the Group's
Revolving Credit Facility Agreement.
Debt Long-term and short-term borrowings, as detailed in note 12, excluding finance
leases and debt issue costs.
Earnings per share (eps) Profit for the financial period attributable to equity shareholders divided by
the average number of shares in issue during the financial period.
EBITDA Earnings before interest, tax, depreciation, and amortisation.
EPRA The European Public Real Estate Association, a real estate industry body. This
organisation has issued Best Practice Recommendations with the intention of
improving the transparency, comparability, and relevance of the published
results of listed real estate companies in Europe.
EPRA earnings The IFRS profit after taxation attributable to shareholders of the Company
excluding investment property revaluations, gains/losses on investment
property disposals and changes in the fair value of financial instruments.
EPRA earnings per share EPRA earnings divided by the average number of shares in issue during the
period.
EPRA NTA per share EPRA NTA divided by the diluted number of shares at the period end.
EPRA net tangible asset value (EPRA NTA) IFRS net assets excluding the mark-to-market on interest rate derivatives,
deferred taxation on property valuations where it arises, and intangible
assets. It is adjusted for the dilutive impact of share options.
Equity All capital and reserves of the Group attributable to equity holders of the
Company.
Gross property assets The sum of investment property and investment property under construction.
Gross value added The measure of the value of goods and services produced in an area, industry,
or sector of an economy.
Interest cover The ratio of operating cash flow divided by interest paid (before exceptional
finance costs, capitalised interest, and changes in fair value of interest
rate derivatives). This metric is provided to give readers a clear view of
the Group's financial position.
Like-for-like occupancy Excludes the closing occupancy of new stores acquired, opened, or closed in
the current or preceding financial year in both the current financial year and
comparative figures. This excludes Aberdeen, Harrow, Kingston North, Kings
Cross, and for Big Yellow stores like-for-like occupancy, the Armadillo
stores.
Like-for-like store revenue Excludes the impact of new stores acquired, opened or stores closed in the
current or preceding financial year in both the current year and comparative
figures. This excludes Aberdeen, Harrow, Kingston North, and Kings Cross.
LTV (loan to value) Net debt expressed as a percentage of the external valuation of the Group's
investment properties.
Maximum lettable area (MLA) The total square foot (sq ft) available to rent to customers.
Move-ins The number of customers taking a storage room in the defined period.
Move-outs The number of customers vacating a storage room in the defined period.
NAV Net asset value.
Net debt Gross borrowings less cash and cash equivalents.
Net initial yield The forthcoming year's net operating income expressed as a percentage of
capital value, after adding notional purchaser's costs.
Net operating income Store EBITDA after an allocation of central overhead.
Net operating income on stabilisation The projected net operating income delivered by a store when it reaches a
stable level of occupancy.
Net promoter score The Net Promoter Score is an index ranging from -100 to 100 that measures the
willingness of customers to recommend a company's products or services to
(NPS) others. The Company measures NPS based on surveys sent to all its move-ins
and move-outs.
Net Renewable Energy Positive Big Yellow's strategy is that by 2030 the Group will generate as much
renewable energy as it is able to across its store portfolio and meet any
remaining Scope 1 and Scope 2 emissions via the retirement of REGOs from
offsite energy generation.
Net rent per sq ft Storage revenue generated from in place customers divided by occupancy.
Net Zero Strategy The Group's published strategy to have Net Zero Scope 1, 2 and 3 Emissions.
Non like-for-like stores Stores excluded from like-for-like metrics, as they were acquired, opened or
closed in the current or preceding financial year. In 2023 this includes
Aberdeen, Harrow, Kingston North, Kings Cross, and for Big Yellow stores
like-for-like occupancy, the Armadillo stores.
Occupancy The space occupied by customers divided by the MLA expressed as a % or in sq
ft.
Occupied space The space occupied by customers in sq ft.
Other storage related income Packing materials, insurance/enhanced liability service and other storage
related fees.
Pipeline The Group's development sites.
Proforma basis On 10 October 2023, the Group raised £107 million (net of expenses) through a
placing of 6.3% of the Company's share capital. Certain financial metrics at
30 September 2023 have been re-presented in this statement as if the placing
had happened at 30 September 2023, to allow the reader to see the financial
position of the Group after adjusting for the impact of the placing.
Property Income Distribution (PID) A dividend, generally subject to withholding tax, that a UK REIT is required
to pay from its tax-exempt property rental business, and which is taxable for
UK-resident shareholders at their marginal tax rate.
REGO Renewable Energy Guarantees of Origin.
REIT Real Estate Investment Trust. A tax regime which in the UK exempts
participants from corporation tax both on UK rental income and gains arising
on UK investment property sales, subject to certain conditions.
REVPAF Total store revenue divided by the average maximum lettable area in the
period.
Store EBITDA Store earnings before interest, tax, depreciation, and amortisation.
Store revenue Revenue earned from the Group's open self storage centres.
TCFD Task Force on Climate Related Financial Disclosure.
Total shareholder return (TSR) The growth in value of a shareholding over a specified period, assuming
dividends are reinvested to purchase additional units of shares.
INDEPENDENT REVIEW REPORT TO BIG YELLOW GROUP PLC
Conclusion
We have been engaged by Big Yellow Group PLC ("the Group") to review the
condensed set of financial statements in the half-yearly financial report for
the six months ended 30 September 2023 which comprises the Condensed
Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance
Sheet, Condensed Consolidated Statement of Changes in Equity, Condensed
Consolidated Cash Flow Statement, and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2023 is not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the UK and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the
UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion. Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the latest annual financial statements of the Group
are prepared in accordance with UK-adopted international accounting
standards.
The Directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the Directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Group a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Group in accordance with the terms of our
engagement to assist the Group in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Group
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Group for our review work, for this
report, or for the conclusions we have reached.
Anna Jones
for and on behalf of KPMG LLP
Chartered Accountants
2 Forbury Place
33 Forbury Road
Reading
RG1 3AD
20 November 2023
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BMBITMTITBMJRecent news on Big Yellow
See all newsREG - Big Yellow Group PLC - Notification of Full Year Results
AnnouncementREG - Big Yellow Group PLC - Total Voting Rights
AnnouncementREG - Big Yellow Group PLC - Total Voting Rights
AnnouncementREG - Big Yellow Group PLC - Director/PDMR Shareholding
AnnouncementREG - Big Yellow Group PLC - Total Voting Rights
Announcement