REG - Safestore Hldgs plc - Third quarter trading update
08/09/2022 07:00
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RNS Number : 6868Y Safestore Holdings plc 08 September 2022
8 September 2022
Safestore Holdings plc
Third quarter trading update for the period 1 May 2022 to 31 July 2022
Strong trading continues in Q3 2022
Group Operating Performance Q3 2022 Q3 2021(2) Change Change- CER(1)
Revenue (£'m) 54.7 47.6 14.9% 15.1%
Revenue (£'m)- year-to-date (YTD) 155.7 135.7 14.7% 15.6%
Closing Occupancy (let sq ft- million)(3) 6.461 5.985 8.0% n/a
Closing Occupancy (% of MLA) 84.3% 85.7% -1.4ppts n/a
Maximum Lettable Area (MLA)(4) 7.670 6.980 9.9% n/a
Average Storage Rate (£) 28.59 26.26 8.9% 9.1%
Average Storage Rate (£)- YTD 29.11 26.43 10.1% 11.1%
Group Operating Performance- like-for-like(3) Q3 2022 Q3 2021(2) Change Change- CER(1)
Revenue (£'m) 51.7 47.3 9.3% 9.5%
Revenue (£'m)- year-to-date (YTD) 150.8 134.8 11.9% 12.8%
Closing Occupancy (let sq ft- million)(4) 5.889 5.944 -0.9% n/a
Closing Occupancy (% of MLA)(5) 85.7% 87.0% -1.3ppts n/a
Average Occupancy (let sq ft- million) 5.788 5.864 -1.3% n/a
Average Occupancy (let sq ft- million)- YTD 5.702 5.618 1.5% n/a
Average Storage Rate (£) 29.73 26.34 12.9% 13.1%
Average Storage Rate (£)- YTD 29.70 26.50 12.1% 13.0%
Highlights
· Group revenue for the quarter in CER(1) up 15.1% and 14.9% at
actual exchange rates
· Like-for-like(5) Group revenue for the quarter in CER(1) up 9.5%
o UK up 10.7%
o Paris up 4.8%
o Spain up 8.3%
· Like-for-like(5) average rate up 13.1% in CER(1)
o UK up 15.7%
o Paris up 4.8%
o Spain up 5.6%
· Like-for-like(5) occupancy at 85.7% (2021: 87.0%)
o UK down 1.7ppts at 85.8% (2021: 87.5%)
o Paris up 0.1ppts at 84.8% (2021 84.7%)
o Spain up 1.2ppts at 91.6% (2021: 90.4%)
· Acquired two new freehold development sites in South West Madrid
and Almere (Netherlands), adding 91,000 sq ft of MLA to the pipeline.
· Central Barcelona store and Wimbledon London store extension now
open together adding 22,000 sq ft of MLA
· Group Property Pipeline of 1,073,000 sq ft representing c. 14% of
the existing portfolio
Frederic Vecchioli, Chief Executive Officer, commented:
"I am pleased to report that the Group's strong first half performance has
continued into the third quarter of 2022, driven by excellent revenue growth
in the UK market, strong performances in our Parisian and Spanish businesses,
and four months' contribution from our recently acquired Benelux business.
Like-for-like enquiries in August 2022, the first month of our final quarter,
are at record levels.
"Our new store pipeline represents c.14% of our existing portfolio's MLA,
which we anticipate will continue to grow over the coming months. Our strong
and flexible balance sheet has significant funding capacity, allowing us to
continue to consider strategic, value-accretive investments as and when they
arise.
"We have delivered a strong occupancy performance over recent years, yet we
still have 1.2m square feet of fully invested currently unlet space in our UK,
Paris, Spain and Benelux markets (not including our pipeline). Our most
significant upside opportunity is from filling this space and that remains our
priority. The business has demonstrated its inherent resilience in recent
times and, with our recent and current trading, allows me to look forward with
confidence. The first three quarters' trading performance has provided us with
a strong base for the rest of the financial year and we anticipate that the
business will deliver Adjusted Diluted EPRA Earnings per Share(7) for 2021/22
in line with the previous guidance of at least 47p".
Business Highlights
UK Trading Performance
UK Operating Performance Q3 2022 Q3 2021(2) Change
Revenue (£'m) 41.3 36.9 11.9%
Revenue (£'m)- year-to-date (YTD) 120.2 104.1 15.5%
Closing Occupancy (let sq ft- million)(3) 4.768 4.775 -0.1%
Closing Occupancy (% of MLA) 85.2% 86.6% -1.4ppts
Maximum Lettable Area (MLA)(4) 5.600 5.510 1.6%
Average Storage Rate (£) 28.50 24.68 15.5%
Average Storage Rate (£)- YTD 28.52 24.67 15.6%
UK Operating Performance- like-for-like(3) Q3 2022 Q3 2021(2) Change
Revenue (£'m) 40.5 36.6 10.7%
Revenue (£'m)- year-to-date (YTD) 118.3 103.2 14.6%
Closing Occupancy (let sq ft- million)(4) 4.677 4.734 -1.2%
Closing Occupancy (% of MLA)(5) 85.8% 87.5% -1.7ppts
Average Occupancy (let sq ft- million) 4.590 4.671 -1.7%
Average Occupancy (let sq ft- million)- YTD 4.521 4.456 1.5%
Average Storage Rate (£) 28.65 24.76 15.7%
Average Storage Rate (£)- YTD 28.67 24.74 15.9%
The UK performed strongly in the third quarter with total revenue up 11.9% and
like-for-like revenue up 10.7%. For the year-to-date, like-for-like revenue
was up 14.6% compared to 2021.
The UK result was driven by an excellent like-for-like average rate which
remained strong and was up 15.7% on the third quarter of 2021.
As expected, the third quarter like-for-like occupancy inflow of 203,000 sq ft
was strong but down on the exceptionally strong inflow of 307,000 in the third
quarter of 2021. As a result, like-for-like closing occupancy was 85.8% (2021:
87.5%). The number of new lets in the quarter was up on Q3 2021, albeit the
average size was lower. The addition of 40,000 sq ft of additional MLA arising
from the opening of recent store extensions at London Edgware, Southend, and
London Paddington Marble Arch had the impact of diluting like-for-like closing
occupancy by 0.7ppts.
Total revenue for the year-to-date grew by 15.5% reflecting our strong
like-for-like performance, the 2021 store opening in Birmingham Middleway
offset by the closure of Birmingham Digbeth, the December 2021 acquisition of
Christchurch, and the December 2021 opening of our London Bow store. All
acquisitions, new store developments and extensions are performing in line
with or ahead of their business cases.
Paris Trading Performance
Paris Operating Performance Q3 2022 Q3 2021(2) Change
Revenue (€'m) 12.33 11.66 5.7%
Revenue (€'m)- year-to-date (YTD) 36.13 33.77 7.0%
Closing Occupancy (let sq ft- million)(3) 1.128 1.112 1.4%
Closing Occupancy (% of MLA) 82.8% 81.7% +1.1ppts
Maximum Lettable Area (MLA)(4) 1.360 1.360 -
Average Storage Rate (€) 40.16 38.42 4.5%
Average Storage Rate (€)- YTD 40.31 38.59 4.5%
Revenue (£'m) 10.5 10.0 5.0%
Revenue (£'m)- year-to-date (YTD) 30.5 29.5 3.4%
Paris Operating Performance- like-for-like(3) Q3 2022 Q3 2021(2) Change
Revenue (€'m) 12.22 11.66 4.8%
Revenue (€'m)- year-to-date (YTD) 35.90 33.77 6.3%
Closing Occupancy (let sq ft- million)(4) 1.113 1.112 0.1%
Closing Occupancy (% of MLA)(5) 84.8% 84.7% +0.1ppts
Average Occupancy (let sq ft- million) 1.101 1.095 0.5%
Average Occupancy (let sq ft- million)- YTD 1.087 1.066 2.0%
Average Storage Rate (€) 40.29 38.43 4.8%
Average Storage Rate (€)- YTD 40.39 38.59 4.7%
Revenue (£'m) 10.4 10.0 4.0%
Revenue (£'m)- year-to-date (YTD) 30.3 29.5 2.7%
Our Paris business had a good quarter growing total revenue by 5.7%
year-on-year. Like-for-like occupancy performance was robust for the quarter
with closing occupancy at 84.8%, up 0.1ppts compared to Q3 2021. The
like-for-like average rate, which was up by 4.8%, showed good momentum and
combined with average occupancy growth of 0.5%, drove like-for-like revenue
growth of 4.8%. Our like-for-like average storage rate also grew sequentially
by 0.7% compared to the second quarter of our 2022 Financial Year.
Total revenue for the year-to-date grew by 7.0% reflecting the strong
like-for-like performance and the 2021 opening of our Magenta store.
Sterling equivalent revenue was impacted by the 0.9% strengthening in the
Sterling: Euro exchange rate for the quarter compared to Q3 2021. As a result,
sterling equivalent total and like-for-like revenue grew by 5.0% and 4.0%
respectively compared to Q3 2021.
Spain Trading Performance(6)
Spain Operating Performance- total and like-for-like(3) Q3 2022 Q3 2021(2) Change
Revenue (€'m) 0.91 0.84 8.3%
Revenue (€'m)- year-to-date (YTD) 2.63 2.41 9.1%
Closing Occupancy (let sq ft- million)(3) 0.099 0.098 1.0%
Closing Occupancy (% of MLA) 91.6% 90.4% 1.2ppts
Maximum Lettable Area (MLA)(4) 0.110 0.110 -
Average Storage Rate (€) 33.19 31.43 5.6%
Average Storage Rate (€)- YTD 33.78 31.55 7.1%
Revenue (£'m) 0.8 0.7 14.3%
Revenue (£'m)- year-to-date (YTD) 2.2 2.1 4.8%
Our Spain business, which is now considered like-for-like, saw a strong 5,400
sq ft inflow of occupancy (2021: 1,000 sq ft) and ended the quarter strongly
at a closing occupancy of 91.6% (2021: 90.4%). Average occupancy was down 1.0%
but the average storage rate grew by 5.6% to €33.19 compared to €31.43 for
Q3 2021. Ancillary revenue growth was strong and total revenue grew by 8.3%
compared to Q3 2021.
Benelux Trading Performance
Our Netherlands and Belgium businesses were acquired on 30 March 2022 and,
therefore, contributed four month's revenue (€3.3m) in the period.
Collectively, the businesses saw 21,000 sq ft of occupancy inflows in the
third quarter and our Netherlands business ended the period with a closing
occupancy of 75.5% whilst our Belgian business had an 81.6% occupancy.
Property Pipeline
Openings of New Stores and Extensions in the period
Spain- opening of Central Barcelona 1 store
In January 2021, the Group exchanged contracts on a freehold building in a
densely populated area in central Barcelona. The conversion of the existing
building into a 12,500 sq ft MLA self-storage facility is complete and the
store is now open.
UK Extension completed- Wimbledon
In April 2021, we exchanged contracts on the acquisition of a 0.5-acre site
adjacent to our existing London Wimbledon store (MLA 58,800 sq ft). We
completed this transaction in December 2021 and construction was completed
just after the period end. The existing reception area has been relocated to a
more prominent and visible roadside location and a further 9,000 sq ft of
storage capacity and 1,000 sq ft of offices have been added. The Wimbledon
store's peak occupancy, prior to the Covid-19 pandemic, was 92%.
Development Sites
Spain
In August 2022, the Group exchanged contracts on a freehold building in a
commercial and industrial area of South West Madrid. Subject to planning and
completion, we will convert the existing building into a 46,800 sq ft MLA
self-storage facility. It is anticipated that the site will open in the fourth
quarter of 2023.
The Spanish business now has five open stores and a pipeline consisting of a
further seven stores amounting to c.265,000 sq ft of MLA.
Netherlands
The Group has completed the acquisition of a freehold site in Almere, a city
with a population of 214,000 which is 20 minutes' drive from Amsterdam.
Subject to planning, we will convert the two existing buildings on the site
into a 44,500 sq ft MLA self-storage facility. It is anticipated that the site
will open in the second quarter of 2023.
Store Extensions
Paris
The Group plans to redevelop and extend its Pyrénées store in Paris. The
extension will add 22,200 sq ft and is planned to open in the fourth quarter
of 2023. As of July 2022, the store occupancy was 95%.
Pipeline Summary
Our pipeline of c. 1,073,000 sq ft represents c. 14% 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/ planning granted 65,000 Q4 2025 New build
London - Morden FH Completed/ planning granted / under construction 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 Q2 2023 New build
London - Paddington Park West LH Completed/ planning granted 13,000 Q3 2023 Conversion of basement car park-satellite store to existing Paddington store
Wigan FH Completed/ conversion commenced 42,700 Q2 2023 Conversion of existing warehouse
Winchester FH Planning granted/ under construction 11,000 Q4 2022 Extension of existing site
Paris - La Défense FH Planning granted 44,000 Q2 2025 Facility within mixed use development
Paris - Southern Paris FH Planning granted 55,000 Q3 2022 New build
Paris - West 1 FH Contracts exchanged/ subject to planning 56,000 Q4 2023 New Build
Paris - West 2 FH Contracts exchanged/ subject to planning 20,000 Q4 2023 New Build
Paris - West 3 FH Contracts exchanged/ subject to planning 58,000 Q3 2023 New Build
Paris- Pyrenees Extension LH Completed 22,200 Q4 2023 Extension of Existing Site
Northern Madrid FH Completed/ planning granted 53,000 Q1 2023 Conversion of existing building
Southern Madrid FH Completed/ planning granted 32,000 Q1 2023 Conversion of existing building
Eastern Madrid FH Contracts exchanged/ subject to planning 46,800 Q3 2023 Conversion of existing building
South West Madrid FH Contracts exchanged/ subject to planning 46,800 Q4 2023 Conversion of existing building
Central Barcelona 2 LH Contracts exchanged/ subject to planning 24,700 Q4 2023 Conversion of existing building
Northern Barcelona FH Contracts exchanged/ subject to planning 41,500 Q2 2023 Conversion of existing building
South Barcelona FH Contracts exchanged/ planning granted 30,000 Q2 2023 Conversion of existing building
Amersfoort - Netherlands FH Contracts exchanged/ subject to planning 58,000 Q4 2023 New build
Almere- Netherlands Completed/ subject to planning 44,500 Q2 2023 Conversion of existing building
Total Pipeline MLA c. 1,073k
Total Further Capex c. £110m
Lease Extensions and Assignments
During the period we extended the lease on our Exeter store in the UK. The
lease will now continue until February 2045 with tenant-only break clauses in
2035 and 2040. A six-month rent-free period was agreed as part of the
renegotiation.
Site Disposal
In April 2021 we opened our Birmingham Middleway store (58,000 sq ft MLA) and
closed our Digbeth store (44,500 sq ft MLA) shortly thereafter. Customers were
relocated to the bigger, better located new store. At the time, we stated that
we intended to sell the Digbeth site.
We are pleased to confirm that the Digbeth site sale was completed in August
2022. The proceeds received funded the entire acquisition and construction of
the Middleway site. As of July 2022, the Middleway site was 81% occupied.
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 - Q3 2021 is the quarter ended 31 July 2021.
3 - Occupancy excludes offices but includes bulk tenancy. As of 31 July 2022,
closing occupancy includes 14,000 sq ft of bulk tenancy (31 July 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 Spain 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 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.
This announcement contains inside information.
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 178
stores on 31 July 2022, comprising 130 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, 4 stores in Spain, 9 stores in the Netherlands and 6
stores in Belgium.
· 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 July 2022, Safestore had a maximum lettable area ("MLA")
of 7.667 million sq ft (excluding the expansion pipeline stores) of which
6.461 million sq ft was occupied.
· Safestore employs around 750 people in
the UK, Paris, Spain, the Netherlands and Belgium.
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