REG - Safestore Hldgs plc - First quarter trading update
17/02/2022 07:00
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RNS Number : 9247B Safestore Holdings plc 17 February 2022
17 February 2022
Safestore Holdings plc
First quarter trading update for the period 1 November 2021 to 31 January 2022
Strong trading momentum continues into Q1 2022
Group Operating Performance Q1 2022 Q1 2021(2) Change Change- CER(1)
Revenue (£'m) 50.9 44.4 14.6% 16.0%
Closing Occupancy (let sq ft- million)(3) 5.708 5.506 3.7% n/a
Maximum Lettable Area (MLA)(4) 7.067 6.871 2.8% n/a
Closing Occupancy (% of MLA) 80.8% 80.1% +0.7ppts n/a
Average Storage Rate (£) 29.55 26.47 11.6% 13.3%
Group Operating Performance- like-for-like(3) Q1 2022 Q1 2021(2) Change Change- CER(1)
Revenue (£'m) 50.4 44.0 14.5% 16.1%
Closing Occupancy (let sq ft- million)(4) 5.641 5.472 3.1% n/a
Closing Occupancy (% of MLA)(5) 82.1% 80.2% +1.9ppts n/a
Average Occupancy (let sq ft- million) 5.663 5.444 4.0% n/a
Average Storage Rate (£) 29.67 26.53 11.8% 13.5%
Highlights
· Group revenue for the quarter in CER(1) up 16.0% and 14.6% at
actual exchange rates.
· Like-for-like(5) Group revenue for the quarter in CER(1) up 16.1%
o UK up 19.0%
o Paris up 7.8%
o Spain up 10.4%
· Like-for-like(5) occupancy up 1.9ppts at 82.1% (2021: 80.2%)
o UK up 2.0ppts at 82.1% (2021: 80.1%)
o Paris up 2.0ppts at 81.8% (2021 79.8%)
o Spain down 2.9ppts at 85.7% (2021: 88.6%)
· Like-for-like(5) average rate up 13.5% in CER(1).
o UK up 16.9%
o Paris up 4.6%
o Spain up 7.7%
· Planning permission granted on London Lea Bridge site.
· 40,000 sq ft store in Nijmegen in the Netherlands opened in
January 2022.
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report that the strong trading momentum we saw in our 2021
financial year has continued into the first quarter of 2022. This was driven
by an excellent UK result, complemented by strong performances from Paris and
Spain.
"Our new store pipeline represents over 10% of our existing portfolio's MLA
and we anticipate the pipeline will continue to grow over the coming months.
Our strong and flexible balance sheet has significant funding capacity,
allowing us to continue to consider and swiftly execute strategic,
value-accretive investments as and when they arise.
"Alongside our attractive development pipeline we continue to prioritise the
significant upside from filling our 1.4m square feet of fully invested,
currently unlet space. The business has demonstrated its inherent resilience
in recent times and, with our recent and current trading, allows us to look
forward with confidence. The first quarter's trading performance has provided
us with a strong base for the rest of the financial year and, if the current
momentum continues, we anticipate that the business delivers Adjusted Diluted
EPRA Earnings per Share(7) for 2021/22, in line with the consensus of
analysts' forecasts(9)".
Business highlights
UK Trading Performance
UK Operating Performance Q1 2022 Q1 2021(2) Change
Revenue (£'m) 39.9 33.6 18.8%
Closing Occupancy (let sq ft- million)(3) 4.536 4.366 3.9%
Maximum Lettable Area (MLA)(4) 5.597 5.453 2.6%
Closing Occupancy (% of MLA) 81.1% 80.1% +1.0ppts
Average Storage Rate (£) 28.41 24.37 16.6%
UK Operating Performance- like-for-like(3) Q1 2022 Q1 2021(2) Change
Revenue (£'m) 39.5 33.2 19.0%
Closing Occupancy (let sq ft- million)(4) 4.475 4.332 3.3%
Closing Occupancy (% of MLA)(5) 82.1% 80.1% +2.0ppts
Average Occupancy (let sq ft- million) 4.496 4.309 4.3%
Average Storage Rate (£) 28.55 24.43 16.9%
Trading momentum in the UK has been strong in the first quarter of 2022.
Like-for-like revenue growth of 19.0% was driven by a good average occupancy
performance (+4.3%) and a continued strong storage rate performance (+16.9%).
We have seen a return to a more normal cycle of trading in the current
financial year. In the first quarter, as anticipated, we have seen an
occupancy outflow which is typical for the period (our low season). As a
result, the like-for-like closing occupancy, as measured by sq ft occupied,
was up 3.3% and like-for-like closing occupancy at the end of the quarter as a
percentage of MLA was up 2.0ppts at 82.1% (2021: 80.1%). Our like-for-like
average storage rate also grew sequentially by 4.8% compared to the fourth
quarter of our 2021 Financial Year.
Demand continues to be strong with enquiry levels up c. 4% compared to Q1 2021
which was in itself a strong quarter. The enquiry levels were up c. 34%
compared to Q1 2020 and up c. 60% compared to Q1 2019.
Total revenue also grew by 18.8% and included the 2021 opening of our
Birmingham Middleway and London Bow stores, which were offset by the closure
of our Birmingham South store.
Paris Trading Performance
Paris Operating Performance Q1 2022 Q1 2021(2) Change
Revenue (€'m) 12.15 11.23 8.2%
Closing Occupancy (let sq ft- million)(3) 1.079 1.046 3.2%
Maximum Lettable Area (MLA)(4) 1.362 1.312 3.8%
Closing Occupancy (% of MLA) 79.2% 79.8% -0.6ppts
Average Storage Rate (€) 40.84 39.10 4.5%
Revenue (£'m) 10.26 10.09 1.7%
Paris Operating Performance- like-for-like(3) Q1 2022 Q1 2021(2) Change
Revenue (€'m) 12.11 11.23 7.8%
Closing Occupancy (let sq ft- million)(4) 1.073 1.046 2.6%
Closing Occupancy (% of MLA)(5) 81.8% 79.8% +2.0ppts
Average Occupancy (let sq ft- million) 1.075 1.041 3.3%
Average Storage Rate (€)(8) 40.88 39.10 4.6%
Revenue (£'m) 10.22 10.09 1.3%
Our Paris business had a good quarter growing total revenue by 8.2% compared
to Q1 2021.
We have seen a return to a more normal cycle of trading in the current
financial year with a modest occupancy outflow in the period which is typical
for the first quarter (our low season). As a result, like-for-like closing
occupancy for the quarter was 81.8%, up 2.0ppts compared to Q1 2021. The
like-for-like average storage rate, which was up by 4.6%, showed good momentum
and combined with average occupancy growth of 3.3%, drove like-for-like
revenue growth of 7.8%. Our like-for-like average storage rate also grew
sequentially by 2.8% compared to the fourth quarter of our 2021 Financial
Year.
Demand in Paris is also strong with enquiry levels, on a like-for-like basis,
broadly flat compared to Q1 2021 and up c. 20% compared to Q1 2020 and up 26%
compared to Q1 2019.
Sterling equivalent revenue was impacted by the 6.4% strengthening in the
Sterling: Euro exchange rate for the quarter compared to Q1 2021. As a result,
Sterling equivalent total and like-for-like revenue grew by 1.7% and 1.3%
respectively compared to Q1 2021.
Spain Trading Performance(6)
Spain Operating Performance- total and like-for-like Q1 2022 Q1 2021(2) Change
Revenue (€'m) 0.85 0.77 10.4%
Closing Occupancy (let sq ft- thousands)(3) 92.8 93.9 (1.2%)
Maximum Lettable Area (MLA)(4) 108.3 106.0 2.2%
Closing Occupancy (% of MLA) 85.7% 88.6% -2.9ppts
Average Storage Rate (€) 33.47 31.09 7.7%
Revenue (£'m) 0.72 0.69 4.3%
Our Spanish business, which is now considered like-for-like, delivered overall
like-for-like revenue growth of 10.4% compared to Q1 2021. A small seasonal
outflow of occupancy ended the quarter at a closing occupancy of 85.7% (2021:
88.6%). However, the average storage rate grew by 7.7% to €33.47 compared to
€31.09 for Q1 2021 and ancillary revenue growth was strong.
Sterling equivalent revenue was impacted by the 6.4% strengthening in the
Sterling: Euro exchange rate for the quarter compared to Q1 2021. As a result,
sterling equivalent total and like-for-like revenue grew by 4.3% compared to
Q1 2021.
Property Pipeline
Our property pipeline has not changed since our 13 January 2022 Preliminary
Results Announcement with the exception of our London Lea Bridge store being
granted planning permission in the intervening period.
Our pipeline of c. 732,000 sq ft represents over 10% of our existing property
portfolio.
Store FH/ LH Status MLA sq ft Target Opening Other
London- Lea Bridge FH Completed/ planning granted 76,500 Q1 2025 New build.
£170k pa of rental income prior to opening
London- Old Kent Road FH Completed/ subject to planning 76,500 TBC New build.
Rental income receivable prior to opening
London- Woodford FH Contracts exchanged/ subject to planning 65,000 Q4 2025 New build
London- Morden FH Completed/ planning granted 52,000 Q1 2023 New build
London- Bermondsey FH Completed/ subject to planning 50,000 Q4 2026 New build
Shoreham FH Contracts exchanged/ subject to planning 54,000 Q4 2022 New build
London- Paddington Park West LH Completed/ planning granted 13,000 Q2 2023 Conversion of basement car park-satellite store to existing Paddington store
London- Wimbledon FH Completed/ planning granted 9,000 storage 1,000 office Q2 2022 Extension of existing site
Winchester FH Planning granted 11,000 Q4 2022 Extension of existing site
Paris- La Défense FH Completed/ planning granted 44,000 Q2 2025 Facility within mixed use development
Paris- Southern Paris FH Contracts exchanged/ subject to planning 55,000 Q3 2022 New build
Northern Madrid FH Completed/ planning granted 48,000 Q4 2022 Conversion of existing building
Southern Madrid FH Completed/ planning granted 29,000 Q4 2022 Conversion of existing building
Eastern Madrid FH Contracts exchanged/ subject to planning 49,000 Q2 2023 Conversion of existing building
Central Barcelona 1 FH Completed/ planning granted 13,500 Q3 2022 Conversion of existing building
Central Barcelona 2 LH Contracts exchanged/ subject to planning 19,000 Q4 2022 Conversion of existing building
Northern Barcelona FH Contracts exchanged/ subject to planning 36,300 Q1 2023 Conversion of existing building
South Barcelona FH Contracts exchanged/ planning granted 30,000 Q4 2022 Conversion of existing building
Total Pipeline MLA c. 732k
Total Further Capex c. £90m
Joint Venture with Carlyle
As previously reported, in June 2021, the joint venture acquired a freehold
site with an existing building in Nijmegen in the Netherlands. Nijmegen has a
population of 177,000 and the site is well located on a main road with good
visibility and access. Safestore provided 20% of the equity required to
acquire and develop the site which will have an MLA of c. 40,000 sq ft. We are
pleased to report that the store opened in January 2022.
Ends
1 - CER is Constant Exchange Rates (Euro denominated results for the current
period have been retranslated at the exchange rate effective for the
comparative period, in order to present the reported results on a more
comparable basis).
2 - Q1 2021 is the quarter ended 31 January 2021.
3 - Occupancy excludes offices but includes bulk tenancy. As at 31 January
2022, closing occupancy includes 14,000 sq ft of bulk tenancy (31 January
2021: 14,000 sq ft).
4 - MLA is Maximum Lettable Area.
5 - Like-for-like information includes only those stores which have been open
throughout both the current and prior financial years, with adjustments made
to remove the impact of new and closed stores, as well as corporate
transactions.
6 - The Barcelona business was acquired on 30 December 2019 and consists of
the same four stores as were originally acquired. Consequently the business is
now considered like-for-like.
7- Adjusted Diluted EPRA EPS is based on the European Public Real Estate
Association's definition of Earnings and is defined as profit or loss for the
period after tax but excluding corporate transaction costs, change in fair
value of derivatives, gain/loss on investment properties and the associated
tax impacts. The Company then makes further adjustments for the impact of
exceptional items, IFRS 2 share-based payment charges, exceptional tax items
and deferred tax charges. This adjusted earnings is divided by the diluted
number of shares. The IFRS 2 cost is excluded as it is written back to
distributable reserves and is a non-cash item (with the exception of the
associated National Insurance element). Therefore neither the Company's
ability to distribute nor pay dividends are impacted (with the exception of
the associated National Insurance element). The financial statements will
disclose earnings on a statutory, EPRA and Adjusted Diluted EPRA basis and
will provide a full reconciliation of the differences in the financial year in
which any LTIP awards may vest.
8 - The average like-for-like storage rate variance reported for November and
December 2021 in the Group's Results announcement for the year-ended 31
October 2021 (released 13 January 2022) for Paris was stated as +1.5%. For the
purposes of this calculation only, the like-for-like average storage occupancy
for the prior year's two month period was understated by 2.7% and the prior
year like-for-like average storage rate used in the variance calculation was
therefore overstated. This has now been amended and the variance should have
been reported as +4.3%. Please note that this misstatement was isolated to the
above calculation only and the revenue reported for November and December 2021
and the revenue and rate reported in January 2021 for the November and
December 2020 period were correctly stated.
9 - The analyst consensus for Adjusted Diluted EPRA EPS for the current
financial year, based on the forecasts of ten analysts, is 44.8p.The ten
analyst forecasts range from 42.4p to 47.6p.
This announcement contains inside information.
Enquiries
Safestore Holdings plc 020 8732 1500
Frederic Vecchioli, Chief Executive Officer
Andy Jones, Chief Financial Officer
www.safestore.com (http://www.safestore.com)
Instinctif Partners 020 7457 2020
Guy Scarborough
Bryn Woodward
Notes to editors:
· Safestore is the UK's largest self-storage group with 162 stores
at 31 January 2022, comprising 129 wholly owned stores in the UK (including 72
in London and the South East with the remainder in key metropolitan areas such
as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool, Sheffield, Leeds,
Newcastle and Bristol), 29 wholly owned stores in the Paris region and 4
stores in Barcelona. In addition, the Group operates 10 stores in the
Netherlands and 6 stores in Belgium under a joint venture agreement with
Carlyle.
· Safestore operates more self-storage sites inside the M25 and in
central Paris than any competitor providing more proximity to customers in the
wealthiest and more densely populated UK and French markets.
· Safestore was founded in the UK in 1998. It acquired the French
business "Une Pièce en Plus" ("UPP") in 2004 which was founded in 1998 by the
current Safestore Group CEO Frederic Vecchioli.
· Safestore has been listed on the London Stock Exchange since
2007. It entered the FTSE 250 index in October 2015.
· The Group provides storage to around 80,000 personal and business
customers.
· As at 31 January 2022, Safestore had a maximum lettable area
("MLA") of 7.067 million sq ft (excluding the expansion pipeline stores, and
the Carlyle Joint Venture) of which 5.708 million sq ft was occupied.
· Safestore employs around 700 people in the UK, Paris and
Barcelona.
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