REG - Safestore Hldgs plc - First quarter trading update
22/02/2024 07:00
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RNS Number : 0018E Safestore Holdings plc 22 February 2024
Safestore Holdings plc
First quarter trading update for the period 1 November 2023 to 31 January 2024
Resilient trading in a challenging economic environment. Continued progress on
development pipeline
Key Measures - Total Q1 2024 Q1 2023 Change Change
CER(1)
Group
Revenue (£'m) 55.3 55.7 -0.7% -0.4%
Closing Occupancy (let sq ft- million)(3) 6.110 6.095 0.2% n/a
Closing Occupancy (% of MLA(4)) 74.3% 77.6% -3.3ppt n/a
Maximum Lettable Area (MLA(4)) 8.21 7.85 4.6% n/a
Average Storage Rate (£) 30.06 30.42 -1.2% -0.9%
REVPAF (£)(7) 26.82 28.13 -4.7% -4.6%
Key Measures - Like-For-Like(5) Q1 2024 Q1 2023 Change Change
CER(1)
Group
Revenue (£'m) 54.2 54.8 -1.2% -0.9%
Closing Occupancy (let sq ft- million)(3) 5.968 6.073 -1.7% n/a
Closing Occupancy (% of MLA(4)) 77.3% 78.8% -1.5ppt n/a
Average Occupancy (let sq ft- million) 6.000 6.101 -1.7% n/a
Maximum Lettable Area (MLA(4)) 7.72 7.71 0.1% n/a
Average Storage Rate (£) 30.41 30.44 -0.1% 0.2%
REVPAF (£)(7) 27.95 28.23 -1.0% -0.7%
Highlights
· Group revenue for the quarter in CER(1) was down 0.4%
· Like-for-like(5) Group revenue for the quarter in CER(1) down
0.9%
· Like-for-like(5) average rate for the period up 0.2% in CER(1)
· Like-for-like(5) closing occupancy at 77.3% (2023: 78.8%)
· Openings of three new stores since the 17 January 2024 FY2023
announcement adding 75,400 sq ft of MLA
· Group Property Pipeline of 1.4m sq ft representing c. 17% of the
existing portfolio to be funded from existing financial resources and expected
to generate £25-£30m of stabilised EBITDA.
· Simon Clinton appointed as Chief Financial Officer and will join
the Group on 11 March 2024. Simon succeeds Andy Jones as CFO following the
announcement of his decision to retire on 28 September 2023. Andy Jones will
remain with Safestore to affect a smooth transition. A separate RNS
announcement has been made today on Simon's appointment.
Frederic Vecchioli, Chief Executive Officer, commented:
"As expected, the early trading trends indicated in our January 2024
announcement have continued through to the end of our first quarter. The good
continental European performances, combined with a reduced seasonal outflow
driving resilient UK trading in the context of challenging economic
conditions, resulted in the Group delivering like-for-like revenue marginally
down 0.9% on a CER basis. We continue to believe that the REVPAF delivered by
the Group is the strongest in the European industry.
We opened three new stores in the period in the UK and the Netherlands and our
pipeline, at 1.4m sq ft, now represents 17% of our existing portfolio's MLA
underpinning our future growth. We anticipate the pipeline will continue to
grow further over the months ahead. Our balance sheet has significant funding
capacity, allowing us to continue to consider and execute strategic,
value-accretive investments as and when they arise.
As seen in the first quarter, we will continue to be agile in managing rate
and occupancy to drive the optimal total revenue performance, building out our
industry leading REVPAF. Strong performances from our European operations are
expected to mitigate the impact of a weaker market in the UK. Looking beyond
any potential short-term volatility we believe the industry continues to have
significant long term growth potential. There remains a substantial
under-supply of high quality self-storage capacity across the UK and Europe
which provides a structural growth driver for the industry. New locations feed
awareness which subsequently drives demand and the Group's three newest
geographies are growing according to plan. Safestore's industry leading
business model remains unchanged and we have substantial growth to deliver
both from filling the 2.1m square feet of fully invested, currently unlet
space, and from the new sites in our pipeline, across major cities in the UK
and continental Europe. Safestore has a proven track record, and the returns
we deliver are significantly ahead of our cost of capital, so we look to the
future with confidence".
Trading Performance
Trading Data- Total
Key Measures - Total Q1/YTD 2024 Q1/YTD 2023 Change(8)
Group Revenue (CER(1)) 55.4 55.7 -0.4%
UK (£'m) 40.6 41.6 -2.5%
Paris (€'m) 12.6 12.5 1.1%
Spain (€'m) 1.3 1.0 41.2%
Netherlands (€'m) 2.0 1.7 17.2%
Belgium (€'m) 1.1 1.0 11.3%
Group Average Rate (CER(1)) 30.15 30.42 -0.9%
UK (£) 30.23 30.45 -0.7%
Paris (€) 41.42 41.26 0.4%
Spain (€) 30.02 35.48 -15.4%
Netherlands (€) 19.09 19.26 -0.9%
Belgium (€) 23.42 20.17 16.1%
Group REVPAF(7) (CER(1)) 26.82 28.13 -4.6%
UK (£) 27.94 29.35 -4.8%
Paris (€) 36.82 36.32 1.4%
Spain (€) 15.64 18.37 -14.8%
Netherlands (€) 15.77 15.21 3.7%
Belgium (€) 19.96 17.88 11.6%
Group Closing Occupancy(3) 6.110 6.095 0.2%
UK (million) 4.315 4.410 -2.2%
Paris (million) 1.111 1.099 1.1%
Spain (million) 0.159 0.096 65.6%
Netherlands (million) 0.357 0.317 12.6%
Belgium (million) 0.168 0.173 -2.9%
Group Closing Occupancy (% of MLA) 74.3% 77.6% -3.3ppt
UK (million) 74.4% 78.4% -4.0ppt
Paris (million) 81.5% 80.7% 0.8ppt
Spain (million) 46.4% 46.4% -
Netherlands (million) 72.2% 72.6% -0.4ppt
Belgium (million) 75.8% 78.1% -2.3ppt
Group Maximum Lettable Area (MLA) 8.210 7.850 4.6%
UK (million) 5.800 5.620 3.2%
Paris (million) 1.360 1.360 -
Spain (million) 0.340 0.210 61.9%
Netherlands (million) 0.490 0.440 11.4%
Belgium (million) 0.220 0.220 -
Trading Data- Like-For-Like(5)
Key Measures - Like-For-Like(5) Q1/YTD 2024 Q1/YTD 2023 Change(8)
Group Revenue (CER(1)) 54.4 54.8 -0.9%
UK (£'m) 40.0 40.8 -2.1%
Paris (€'m) 12.6 12.5 1.1%
Spain (€'m) 1.0 0.9 1.5%
Netherlands (€'m) 1.8 1.7 11.2%
Belgium (€'m) 1.1 1.0 11.3%
Group Average Rate (CER(1)) 30.51 30.44 0.2%
UK (£) 30.32 30.45 -0.4%
Paris (€) 41.42 41.26 0.4%
Spain (€) 36.52 36.03 1.4%
Netherlands (€) 20.57 19.44 5.8%
Belgium (€) 23.42 20.17 16.1%
Group REVPAF(7) (CER(1)) ` 28.03 28.23 -0.7%
UK (£) 28.20 28.79 -2.0%
Paris (€) 36.82 36.32 1.4%
Spain (€) 31.56 31.02 1.7%
Netherlands (€) 19.38 17.38 11.5%
Belgium (€) 19.96 17.88 11.6%
Group Average Occupancy 6.000 6.101 -1.7%
UK (million) 4.324 4.435 -2.5%
Paris (million) 1.108 1.102 0.5%
Spain (million) 0.091 0.092 -1.1%
Netherlands (million) 0.311 0.299 4.0%
Belgium (million) 0.166 0.173 -4.0%
Group Closing Occupancy(3) 5.968 6.073 -1.7%
UK (million) 4.287 4.410 -2.8%
Paris (million) 1.111 1.099 1.1%
Spain (million) 0.092 0.092 -
Netherlands (million) 0.310 0.299 3.7%
Belgium (million) 0.168 0.173 -2.9%
Group Closing Occupancy (% of MLA) 77.3% 78.8% -1.5ppt
UK (million) 76.1% 78.4% -2.3ppt
Paris (million) 81.5% 80.7% 0.8ppt
Spain (million) 76.5% 75.9% 0.6ppt
Netherlands (million) 82.0% 79.1% 2.9ppt
Belgium (million) 75.8% 78.1% -2.3ppt
Group Maximum Lettable Area (MLA) 7.720 7.710 0.1%
UK (million) 5.640 5.630 0.2%
Paris (million) 1.360 1.360 -
Spain (million) 0.120 0.120 -
Netherlands (million) 0.380 0.380 -
Belgium (million) 0.220 0.220 -
Details of trading operating KPIs are included in the tables above.
UK
UK revenue was down 2.5% for the quarter in total and 2.1% on a
like-for-like(5) basis.
Like-for-like average rate was down 0.4% for the quarter. After selective,
focused discounting in November and December 2023 impacted rate slightly, the
absolute rate returned to levels that were above October 2023 during January
2024. For the quarter, the average rate grew marginally on a sequential basis
compared to Q4 2023. Enquiries remain down on 2023 levels but above the
pre-pandemic period.
Like-for-like average occupancy was down 2.5% compared to Q1 2023. However,
the expected seasonal outflow was 62,000 sq ft less than in Q1 2023. As a
result, closing occupancy, at 76.1%, was 2.3ppts behind Q1 2023 whereas at Q4
2023 closing occupancy was 3.8ppts behind the same period last year.
We believe that our REVPAF(7), a measure of how effectively we yield manage
our assets, is the strongest in the industry. REVPAF(7) was down 2.0% for the
year on a like-for-like(5) basis at £28.20.
Paris
Paris revenue grew 1.1% in the quarter on a total and like-for-like(5) basis.
The seasonal occupancy movement was an inflow of 4,000 sq ft in the period as
compared to an outflow of 13,000 sq ft last year. As a result, closing
occupancy, at 81.5%, was 0.8ppts ahead of Q1 2023. Average rate for the
quarter was up 0.4% compared to the prior year.
Our REVPAF(7), which we believe is significantly ahead of the local
competition, grew by a further 1.4% for the quarter.
Spain
Since acquiring our Spanish business in 2019 we have opened a further seven
stores. We now have eleven open stores and a pipeline of a further five
stores.
During the quarter our Spanish business grew like-for-like revenue by 1.5% and
by 41.2% on a total basis.
Like-for-like average occupancy was down 1.1% compared to Q1 2023 and average
rate was up 1.4%. Ancillaries performed strongly and were up 12.7%. Closing
occupancy finished the quarter up 0.6ppts at 76.5%.
Like-for-like REVPAF was up 1.7% at €31.56 per sq ft.
Netherlands
Our Netherlands business, acquired on 30 March 2022, had eleven stores open at
the period end. A new store opened in Aalsmeer, near Schipol airport, just
after the quarter concluded adding 48,400 sq ft of MLA and we have a pipeline
of three sites.
On a like-for-like basis the business performed strongly in the first quarter.
Revenue was up 11.2% driven by a balance of average occupancy (up 4.0%) and
strong rate (up 5.8%); and ancillary revenues (up 22.4%). Closing occupancy
was up 2.9ppts at 82.0%.
Like-for-like REVPAF was up 11.5% at €19.38 per sq ft.
Total revenue was up 17.2% including the impact of the recently opened stores.
Belgium
Our Belgium business, acquired with our Netherlands business on 30 March 2022,
has six stores open in Belgium and a pipeline of one additional site.
On a like-for-like basis the business performed strongly in the first quarter.
Revenue was up 11.3% driven by a balance of strong rate (up 16.1%) and
ancillary revenues (up 16.0%) offsetting a 4.0% decline in average occupancy.
Closing occupancy was down 2.3ppts at 75.8%.
Like-for-like REVPAF was up 11.6% at €19.96 per sq ft.
Property Pipeline Developments
Openings of New Stores and Extensions in the period
Open 2024 FH/LH MLA Other
New Developments
Eastleigh LH 14,000 Conversion, Satellite
London- Paddington Park West FH 13,000 Conversion, Satellite
Randstad- Aalsmeer FH 48,400 New build
During the quarter our satellite stores at Eastleigh and London- Paddington
Park West Place were opened. Our Aalsmeer store in the Netherlands was opened
shortly after the quarter end.
Pipeline Summary
We are leveraging our effective and scalable operating platform to increase
our expansion plans across both the UK and continental Europe. This approach
has resulted in a significant development pipeline which will be funded from
our existing financial resources. This pipeline of c. 1.4m sq ft represents c.
17% of our existing property portfolio. The pipeline and associated financing
is dilutive to earnings in the near term but, as the stores mature, we are
confident, based on our track record, that reliable, secure and significant
earnings and value accretion will be achieved. We estimate that, on
stabilisation, the current pipeline will deliver in the range of £25-£30m of
incremental EBITDA.
Opening 2024 FH/LH Status* MLA Other
Redevelopments and Extensions
London- Holloway FH C, STP 9,500 Extension
Paris- Poissy FH C, UC 25,000 Extension
Paris- Pyrenees LH C, UC 15,400 Extension
New Developments
London- Lea Bridge FH C, UC 80,900 New build
Paris- South Paris FH C, UC 55,000 New build
Paris- West 3 FH C, UC 58,000 New build
Paris- East 1 FH C, PG 60,000 Conversion
Paris- North West 1 FH C, PG 54,000 Conversion
Madrid- South West FH C, UC 45,400 Conversion
Madrid- South 2 FH C, UC 70,000 Conversion
Madrid- North East FH C, STP 57,000 Conversion
Barcelona- Central 2 LH C, PG 20,400 Conversion
Randstad- Almere FH C, UC 43,300 Conversion
Randstad- Rotterdam FH C, UC 71,000 New build
Opening 2025
New Developments
London- Woodford FH C, PG 68,700 New build
London- Walton FH C, PG 20,700 Conversion
London- Watford FH CE, PG 57,500 New build
London- Wembley FH C, STP 55,000 New build
Paris- West 1 FH C, PG 56,000 New build
Paris- West 4 FH CE, PG 53,000 New Build
Paris- La Défense FH C, UC 44,000 Mixed use facility
Randstad- Amsterdam FH CE, PG 65,400 New build
Brussels- Zaventem FH CE, PG 47,400 New build
Pamplona FH C, PG 60,700 Conversion
Opening Beyond 2025
New Developments
London- Old Kent Road FH C, STP 75,600 New build
London- Bermondsey FH C, STP 50,000 New build
London- Romford FH C, STP 41,000 New build
Shoreham FH CE, PG 54,000 New build
Total Pipeline MLA (let sq ft- million) c. 1.414
Total Outstanding CAPEX (£'m) c. 113.0
*C = completed, CE = contracts exchanged, STP = subject to planning, PG =
planning granted, UC = under construction
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 2023 is the quarter ended 31 January 2023.
3 - Occupancy excludes offices but includes bulk tenancy. As of 31 January
2024, closing occupancy includes 18,000 sq ft of bulk tenancy (31 January
2023: 24,000 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 Benelux business was acquired in March 2022 with the 15 stores now
considered like-for-like.
7 - REVPAF is an alternative performance measure used by the business. REVPAF
stands for Revenue per Available Square Foot and is calculated by dividing
revenue for the period by weighted average available square feet for the same
period.
8 - Where reported amounts are presented either to the nearest £0.1m or to
the nearest 10,000 sq ft, the underlying variance presented may be
significantly different to the variance calculated on the rounded numbers
9 - Store Protect has replaced our customer goods insurance programme from 1
November 2023, attracting VAT rather than Insurance Premium Tax (IPT). When
comparing the first three months of the 2024 financial year, the 2023
comparative included revenue of £0.5 million representing 12% IPT on
insurance sales for the three months. For 2024, VAT is not included in the
revenue. The overall impact of these changes is neutral at EBITDA. With the
LFL revenue figure adjusted to remove the IPT from the prior year, LFL revenue
is down 1.2% as reported. Including the IPT in revenue in the PY would result
in a variance of -1.8%.
Enquiries
Safestore Holdings PLC
Frederic Vecchioli, Chief Executive Officer via Instinctif Partners
Andy Jones, Chief Financial Officer
www.safestore.com (http://www.safestore.com)
Instinctif Partners
Guy Scarborough/ Emma Baxter 0207 457 2020
Notes to Editors
· Safestore is the UK's largest self-storage group with 192
stores on 31 January 2024, comprising 135 wholly owned stores in
the UK (including 74 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, 11 stores in Spain, 11 stores in the Netherlands and 6
stores in Belgium. In addition, the Group operates 7 stores in Germany 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 90,000 personal and business
customers.
· As of 31 January 2024, Safestore had a maximum lettable area
("MLA") of 8.210 million sq ft (excluding the expansion pipeline stores) of
which 6.110 million sq ft was occupied.
· Safestore employs around 750 people in
the UK, Paris, Spain, the Netherlands, and Belgium.
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