Third quarter trading update for the period ended 31 July 2011
A solid quarter of growth
Safestore Holdings plc ("Safestore" or "the Company"), the largest self storage retailer in the UK and Paris, is pleased to report on its trading progress (unaudited) for the period ended 31 July 2011 ("Q3 2011").
· Revenue for Q3 2011 was £24.1 million, an increase of 5.4% over Q3 20101 and 7.3%
over Q2 20112; revenue for the nine months to 31 July 2011 was £69.6 million, a 6.6% increase compared to the same period last year.
· Total Revenue Per Available Foot ('RevPAF')3 for Q3 2011 was £19.25, an increase of
2.1% over Q3 20101 and 2.9% over Q2 20112.
· Closing occupancy4 at 31 July 2011 was 3.15 million square feet ("sq ft"). This represents
an overall occupancy level of 63.2% of Maximum Lettable Area5 ("MLA"), an increase of 3.8 percentage points over 31 July 2010 (59.4%) and 4.0 percentage points over 30 April 2011(59.2%).
· Average self storage rental rate for the quarter was £25.91 per sq ft, 2.9% higher than Q3
20101 and 1.5% lower than Q2 20112.
· We opened one new store in the quarter, at Torcy in the Paris region, bringing the portfolio
to 119 trading stores (96 UK and 23 Paris).
At the time of our interim results in June we indicated that while we maintained a cautious outlook due to the fragile prevailing economic conditions, we had seen a positive start to the second half of the year. This positive start continued throughout the third quarter.
Total revenue during the quarter grew by 5.4% over the same period last year. Enquiries from personal customers grew steadily in the quarter with positive but more modest growth from business customers.
We saw strong occupancy growth in the quarter of 233,000 sq ft, with rate per sq ft also up on the comparable period in 20101, although the higher level of new lets and the associated introductory discounts led to rate being marginally down against Q2 20112. Our new store opening programme led to an MLA increase of 171,000 sq ft compared to the same period last year. The combination of occupancy, rate and increased available space, led to a 2.1% increase in RevPAF over Q3 20101.
Looking ahead, the fourth quarter is traditionally a weaker quarter for occupancy growth, in part owing to students returning to university. Our very early indications are that solid growth in enquiries is continuing so far. However, we would expect our third quarter occupancy performance this year to lead to higher levels of vacates in the fourth quarter and perhaps into the first quarter of next year.
Peter Gowers, Chief Executive Officer commented:
"We are pleased to report another solid quarter that demonstrates the continued underlying demand for self-storage and the benefits of our market leadership position in the UK and presence in France.
Safestore's brand scale, web presence and sales infrastructure have enabled us to drive enquiries and new let growth. Growth is principally being driven by personal customers with more modest growth from the business segment and performance has been strongest in our operations in France. Cost pressures do remain challenging, particularly on utilities and local business rates.
Overall, we continue to perform in line with expectations and are confident that the business remains well positioned to continue to create value. However, we remain cautious about the fragile prevailing economic conditions and the potential impact on consumer confidence."
1 - "Q3 2010" is the three months ended 31 July 2010
2 - "Q2 2011" is the three months ended 30 April 2011
3 - RevPAF is calculated as Total Revenue divided by total MLA
4 - Closing occupancy excludes offices but includes 78,600 sq ft of bulk tenancy as at 31 July 2011 (30 April 2011 - 56,000 sq ft)
5 - Historic MLA has been adjusted for the impact of the 'MLA reduction exercise' recognized on 31 October 2010
Safestore is the UK's largest self storage group with 131 stores. They include 96 wholly owned stores in the UK and 23 wholly owned stores in the Paris region together with 12 stores under management in the UK.
The Company provides storage to more than 44,900 personal and business customers.
Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.3 million sq ft (including the expansion pipeline stores) of which 3.15 million sq ft is currently occupied.
A strong balance sheet and operational cash flow allow Safestore to invest in continual improvements in the operational performance of its stores, in new store development and acquisitions where appropriate.
Safestore employs around 500 people.
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