REG - Safestore Hldgs plc - Fourth Quarter Trading Update
28/11/2023 07:00
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RNS Number : 8105U Safestore Holdings plc 28 November 2023
28 November 2023
Safestore Holdings plc
Fourth quarter trading update for the period 1 August 2023 to 31 October 2023
A year of significant strategic progress
Key Measures - Total Q4 2023 Q4 2022 Change Change YTD 2023 YTD 2022 Change Change CER(1)
CER(1)
Group
Revenue (£'m) 57.6 56.8 1.4% 1.4% 224.2 212.5 5.5% 4.8%
Closing Occupancy (let sq ft- million)(3) 6.231 6.317 -1.4% n/a 6.231 6.317 -1.4% n/a
Closing Occupancy (% of MLA) 77.0% 82.1% -5.1% n/a 77.0% 82.1% -5.1% n/a
Maximum Lettable Area (MLA) 8.09 7.70 5.1% n/a 8.09 7.70 5.1% n/a
Average Storage Rate (£) 30.22 29.64 2.0% 2.0% 30.26 29.25 3.5% 2.7%
REVPAF (£)(9) 28.24 29.25 -3.5% -3.4% 27.70 27.59 0.4% -0.2%
Key Measures - Like-For-Like(5) Q4 2023 Q4 2022 Change Change CER(1) YTD 2023 YTD 2022 Change Change CER(1)
Group
Revenue (£'m) 53.7 53.9 -0.4% -0.4% 209.9 205.3 2.2% 1.7%
Closing Occupancy (let sq ft- million)(3) 5.583 5.793 -3.6% n/a 5.583 5.793 -3.6% n/a
Closing Occupancy (% of MLA) 79.6% 82.8% -3.2% n/a 79.6% 82.8% -3.2% n/a
Average Occupancy (let sq ft- million) 5.638 5.852 -3.7% n/a 5.586 5.779 -3.3% n/a
Maximum Lettable Area (MLA) 7.02 7.00 0.3% n/a 7.02 7.00 0.3% n/a
Average Storage Rate (£) 31.57 30.72 2.8% 2.8% 31.57 29.89 5.6% 5.0%
REVPAF (£)(9) 30.37 30.55 -0.6% -0.6% 29.91 29.34 1.9% 1.4%
Highlights
· Group revenue for the year in CER(1) was up 4.8% and 5.5% at
actual exchange rates
· Like-for-like(5) Group revenue for the year in CER(1) up 1.7%
· Like-for-like(5) average rate for the year up 5.0% in CER(1)
· Like-for-like(5) closing occupancy at 79.6% (2022: 82.8%)
· Openings of four new stores and one extension since Q3 adding
150,100 sq ft of MLA
· Two new pipeline sites/extensions in the quarter increased the
pipeline by 100,000 sq ft.
· Group Property Pipeline of 1.5m sq ft representing c. 18% of the
existing portfolio to be funded from existing financial resources and expected
to generate £25-£30m of stabilised EBITDA.
Frederic Vecchioli, Chief Executive Officer, commented:
"After two years of out-performance in which the Group delivered total
like-for-like(5) revenue growth of c. 25%, 2023 has been a resilient year in
which significant strategic and operational progress has been made.
In the year, at CER(1), the Group's industry leading REVPAF(9) grew by 1.4% on
a like-for-like(5) basis with like-for-like(5) revenue up 1.7%. Total Group
revenue grew by 4.8% reflecting recently added new stores and the
annualisation effect of our acquisition of the Benelux business.
We believe that the COVID period has acted as an accelerator of growth for the
self-storage industry. Whilst demand stabilised during the year at a level
that is below 2022, we are still seeing enquiry levels that are ahead of the
pre-COVID period.
We have made significant strategic progress during the year having opened,
acquired, or extended thirteen stores (five in the UK, six in Spain and two in
Netherlands) adding over 500,000 sq ft of MLA to the portfolio. In addition, a
pipeline of a further 1.5m sq ft across 30 projects has been established which
represents 18% of the existing MLA of the business. A joint venture with
Carlyle was established earlier in the year, which facilitated the Group's
entry into the under-penetrated German market. In addition, the integration of
our Benelux business, acquired in 2022, is now complete.
Looking beyond any potential short-term volatility, there remains a
significant 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. Safestore's
industry leading business model remains unchanged and we have substantial
growth to deliver both from filling the 1.8m 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 debt, so we
look to the future with confidence.
For 2023, we anticipate that the business will deliver Adjusted Diluted EPRA
Earnings per Share(7) in line with the guidance given in our third quarter
trading statement(8)."
Trading Performance
Trading Data- Total
Key Measures - Total Q4 2023 Q4 2022 Change YTD 2023 YTD 2022 Change
Revenue
UK (£'m) 42.7 42.8 -0.2% 166.5 163.0 2.1%
Paris (€'m) 13.0 12.6 3.2% 50.5 48.8 3.5%
Spain (€'m) 1.3 0.9 44.4% 4.3 3.6 19.4%
Netherlands (€'m) 1.9 1.6 18.8% 7.2 3.6 100.0%
Belgium (€'m) 1.1 1.0 10.0% 4.1 2.3 78.3%
Average Rate
UK (£) 30.26 29.58 2.3% 30.25 28.79 5.1%
Paris (€) 42.28 40.93 3.3% 42.05 40.47 3.9%
Spain (€) 32.15 34.88 -7.8% 33.12 34.07 -2.8%
Netherlands (€) 18.66 19.06 -2.1% 18.61 19.18 -3.0%
Belgium (€) 22.56 19.54 15.5% 21.45 18.79 14.2%
REVPAF(9)
UK (£) 29.58 30.22 -2.1% 29.07 29.02 0.2%
Paris (€) 37.84 36.79 2.9% 37.10 35.81 3.6%
Spain (€) 14.72 31.49 -53.3% 12.64 29.78 -57.6%
Netherlands (€) 17.29 16.67 3.7% 16.53 16.20 2.0%
Belgium (€) 19.54 18.06 8.2% 18.68 17.43 7.2%
Closing Occupancy(3)
UK (million) 4.473 4.637 -3.5%
Paris (million) 1.107 1.112 -0.4%
Spain (million) 0.135 0.095 42.1%
Netherlands (million) 0.352 0.298 18.1%
Belgium (million) 0.164 0.175 -6.3%
Closing Occupancy (% of MLA)
UK (million) 78.1% 82.6% -4.5%
Paris (million) 81.3% 81.7% -0.4%
Spain (million) 39.5% 78.9% -39.4%
Netherlands (million) 80.7% 78.8% 1.9%
Belgium (million) 74.1% 78.8% -4.7%
Maximum Lettable Area (MLA)
UK (million) 5.730 5.620 2.0%
Paris (million) 1.360 1.360 -
Spain (million) 0.340 0.120 183.3%
Netherlands (million) 0.440 0.380 15.8%
Belgium (million) 0.220 0.220 -
Trading Data- Like-For-Like(5)
Key Measures - Like-For-Like(5) Q4 2023 Q4 2022 Change YTD 2023 YTD 2022 Change
Revenue
UK (£'m) 41.7 42.2 -1.2% 162.8 160.9 1.2%
Paris (€) 13.0 12.6 3.2% 50.5 48.8 3.5%
Spain (€) 0.9 0.9 - 3.6 3.6 -
Average Rate
UK (£) 30.33 29.62 2.4% 30.31 28.83 5.1%
Paris (€) 42.28 40.93 3.3% 42.05 40.47 3.9%
Spain (€) 37.14 35.02 6.1% 36.64 34.11 7.4%
REVPAF(9)
UK (£) 29.84 30.26 -1.4% 29.35 29.10 0.9%
Paris (€) 37.84 36.79 2.9% 37.10 35.81 3.6%
Spain (€) 33.80 34.48 -2.0% 33.33 33.05 0.8%
Average Occupancy
UK (million) 4.434 4.635 -4.3% 4.396 4.582 -4.1%
Paris (million) 1.117 1.122 -0.4% 1.103 1.103 -
Spain (million) 0.087 0.095 -8.4% 0.087 0.094 -7.4%
Closing Occupancy(3)
UK (million) 4.392 4.587 -4.3%
Paris (million) 1.107 1.112 -0.4%
Spain (million) 0.084 0.093 -9.7%
Closing Occupancy (% of MLA)
UK 79.2% 83.0% -3.8%
Paris 81.3% 81.7% -0.4%
Spain 77.9% 85.9% -8.0%
Maximum Lettable Area (MLA)
UK (million) 5.550 5.530 0.4%
Paris (million) 1.360 1.360 -
Spain (million) 0.110 0.110 -
Details of trading operating KPI's are included in the tables above.
UK
UK revenue was up 2.1% for the year in total and 1.2% on a like-for-like(5)
basis.
In the fourth quarter like-for-like(5) revenue was stable across the period
and finished the quarter at 1.2% below the prior year.
Demand, measured by enquiry levels, was down on the previous year but ahead of
pre-COVID levels.
In the business customer segment we saw a small improvement in our customer
numbers compared to the third quarter. In the fourth quarter we saw a 25,000
sq ft inflow in business occupancy compared to a 2,000 sq ft inflow in the
same period last year.
We believe that our REVPAF(9), a measure of how effectively we yield manage
our assets, is the strongest in the industry. REVPAF(9) grew by 0.9% for the
year on a like-for-like(5) basis.
Paris
Our Paris business did not experience the same surge in demand that we saw in
the UK during the COVID period but continued to grow steadily.
Paris revenue grew 3.5% in total for the year on a total and like-for-like(5)
basis. Like-for-like(5) revenue growth in the fourth quarter was 3.2%.
Our REVPAF(9), which we believe is significantly ahead of the local
competition, grew by a further 3.6% for the year.
Enquiry levels in Paris were marginally down compared to the same period last
year but ahead of pre-COVID levels.
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.
Over the year our Spanish business grew revenue by 19.4% and by 44.4% in the
fourth quarter. Like-for-like(5) revenue was flat in the quarter and across
the year.
In line with our expectations, like-for-like(5) occupancy in Barcelona has
initially been diluted by the new Barcelona stores which have opened in close
proximity and within the same catchment area as an existing store. Management
believes that, given the limited supply in central Barcelona, once the
absorption phase has been passed, the stores will generate higher revenue and
profits and provide significant long-term value.
Netherlands
Our Netherlands business, acquired on 30 March 2022, contributed €1.9m
revenue in the quarter and €7.2m for the year.
During the year, a new store in Amersfoort has opened and an additional store
in Apeldoorn was acquired. We now have eleven stores open in the Netherlands
and a pipeline of a further four sites.
The Netherlands business is not treated as like-for-like(5) during the 2023
financial year. However, the stores that were in the Group for the whole of
the fourth quarter in 2022 delivered 10.7% growth in Q4 2023.
Belgium
Our Belgium business, acquired with our Netherlands business on 30 March 2022,
contributed €1.1m revenue in the quarter and €4.1m for the year.
We have six stores open in Belgium and a pipeline of one additional site.
The Belgian business is not treated as like-for-like(5) during the 2023
financial year. However, the stores that were in the Group for the whole of
the fourth quarter in 2022 delivered 10.0% growth in Q4 2023.
Property Pipeline Developments
Openings of New Stores and Extensions in the period
Open 2023 FH/LH MLA Other
Redevelopments and Extensions
London- Paddington Marble Arch LH 8,400 Extension
New Developments
Ellesmere Port FH 55,000 New build
Central Barcelona 3 LH 14,700 Conversion
Amersfoort- Netherlands FH 58,000 New build
Open 2023 (post-year end) FH/LH MLA Other
New Developments
Eastleigh LH 14,000 Conversion, Satellite
The extension of our London- Paddington March Arch store, two new freehold
stores in Ellesmere Port and Amersfoort, Netherlands and one new leasehold
site in Central Barcelona were opened in the period adding 136,100 sq ft of
MLA. The new satellite conversion at Eastleigh was also open post year-end,
adding a further 14,000 sq ft of MLA.
New Development Projects added in the Period
We have added two development sites to the pipeline in the period.
Paris West 4 is a freehold site with planning permission where we will build a
new build 53,000 sq ft store, opening in 2024.
In Belgium, we have exchanged contracts on a freehold site in the Brussels
conurbation at Melsbroek. We plan to open a 47,400 sq ft new build store in
2025.
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 the largest development pipeline in our history which will be
funded from our existing financial resources. This pipeline of c. 1.5m sq ft
represents c. 18% 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 12,000 Extension
Paris- Pyrenees LH C, UC 22,200 Extension
New Developments
London- Paddington Park West FH C, UC 13,000 Conversion, Satellite
London- Lea Bridge FH C, UC 76,500 New build
Eastleigh ** LH C, UC 14,000 Conversion, Satellite **
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
Paris- West 4 FH CE, PG 53,000 New Build
South West Madrid FH C, UC 46,800 Conversion
Southern Madrid 2 FH C, UC 68,800 Conversion
Central Barcelona 2 LH C, PG 20,400 Conversion
North East Madrid FH C, STP 66,000 Conversion
Almere- Netherlands FH C, UC 44,500 Conversion
Aalsmeer- Netherlands FH C, UC 48,400 New build
Rotterdam- Netherlands FH C, UC 71,000 New build
Opening 2025
New Developments
London- Woodford FH C, PG 76,000 New build
London- Walton FH C, PG 20,700 Conversion
London- Watford FH CE, STP 46,750 New build
London- Wembley FH C, STP 49,000 New build
Paris- West 1 FH C, PG 56,000 New build
Paris- La Défense FH C, UC 44,000 Mixed use facility
Pamplona FH C, PG 71,000 Conversion
Amsterdam- Netherlands FH CE, STP 61,400 New build
Melsbroek- Belgium FH CE, PG 47,400 New build
Opening Beyond 2025
New Developments
London- Old Kent Road FH C, STP 76,500 New build
London- Bermondsey FH C, STP 50,000 New build
London- Romford FH C, STP 41,000 New build
Shoreham FH CE, STP 54,000 New build
Total Pipeline MLA (let sq ft- million) c. 1.487
Total Outstanding CAPEX (£'m) c. 128.0
*C = completed, CE = contracts exchanged, STP = subject to planning, PG =
planning granted, UC = under construction
** Open post-year end
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 - Q4 2022 is the quarter ended 31 October 2022.
3 - Occupancy excludes offices but includes bulk tenancy. As of 31 October
2023, closing occupancy includes 18,000 sq ft of bulk tenancy (31 October
2022: 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 Spain business was acquired on 30 December 2019 with the four
originally acquired stores 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 analyst consensus for Adjusted Diluted EPRA EPS for the current
financial year, based on the forecasts of fifteen analysts, is 48.0p. The
fifteen analyst forecasts range from 47.3p to 50.0p. In our third quarter
trading statement we guided towards the lower end of the range of analysts'
forecasts for 2023. This guidance remains in place for our fourth quarter.
9 - 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.
10 - Where reported amounts are presented either to the nearest £0.1m or to
the nearest 10,000 sq ft, the effect of rounding may impact the reported
percentage change.
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/ Bryn Woodward 07917 178920 / 07739 342009
Notes to Editors
· Safestore is the UK's largest self-storage group with 190
stores on 31 October 2023, comprising 133 wholly owned stores in
the UK (including 73 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 October 2023, Safestore had a maximum lettable area
("MLA") of 8.090 million sq ft (excluding the expansion pipeline stores) of
which 6.231 million sq ft was occupied.
· Safestore employs around 750 people in the UK, Paris, Spain, the
Netherlands, and Belgium.
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