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Good luck my friend...
Big Yellow Group: Espirito Santo raises target price from 308p to 322p, natural rating maintained.
hope ur right --------------- held number of shares for a while now -- not v good dividends --- but think now ls ttme for it to fly
However, Big Yellow believes the strength of its brand, growing market awareness, and its concentration of stores in London and the South East will help it overcome these challenges. An interim property income dividend of 5p per share has been declared, up from 4.5p before. Net debt reduced to £269m from £273.9m at the end of March 31st 2012.
Self storage firm Big Yellow said the subdued economy, higher interest costs and VAT on storage continues to weigh on earnings, but it still managed to post a strong rise in adjusted profit before tax. Adjusted pre-tax profit climbed to £13.9m in the six months ended September 30th from £11.6m a year earlier. Store revenue for the six months rose 11.5% from the year before. Like-for-like (LFL) revenue per available foot (REVPAF) was £21.28 for the six months, up 10.1% from the year before. Store revenue during the second quarter increased by 12% to £18.6m. Chairman Nicholas Vetch said: "This is a strong revenue and earnings performance in a challenging environment for consumer facing businesses such as ours." "As previously indicated, the impact of higher interest costs and the imposition of VAT on storage will create a drag on the pace of earnings growth in the short term. Additionally, we believe the economy will remain subdued for some years to come."
Looks like could be worth buying more shares -- price could rise to £5 ish -- but dividends crap at moment so not sure -- jesus who really knows -- lives a gamble -- gl all
John Trotman, Chief Financial Officer of Big Yellow, said the reduction in the total bank facility was consistent with the company's intention to use surplus cash flow to reduce bank debt over the next 18 months to two years.
Storage firm Big Yellow Group said it had taken out a new debt facility, at the same time cutting back on its total borrowing. The company has taken a £190m four year bank facility with Lloyds TSB, HSBC and Santander, which expires in September 2016. The new debt replaces the group's existing £225m facility, which expires in September 2013 and was provided by the same three banks and HSH Nordbank. That has been fully repaid following completion of the refinancing. The new debt is made up of a £140m term loan, with the remaining £50m a more flexible revolving facility. The amount of the facility has been reduced to £190m as the group said it no longer needed a higher capacity given its commitment to reduce debt. The firm's proforma average interest cost of debt is now 4.25%, and the weighted average expiry of the its debt facilities is 7.2 years.
Last 12 month chart looks promising
Big Yellow Group Sell 30-Aug-12 £750,000.00 Philip Burks 250,000 @ 300.00p
Yell changed its name to HIBU. Hibu will be the group's new corporate identity and the brand name for new digital products as they come to market. If you are looking for YELL then type HIBU as the ticker and it will take you to the correct share
hello any one dere? please can some one answer my question. is big yello grp part of yell??????
is this part of yell? any one. not that i had any share in there any way.
These problems go some way towards explaining the discount at which Big Yellow's shares trade. Yet they will probably turn out to be less fearsome than anticipated in a sector cushioned by decent growth potential.
This prospect has prompted a change of strategy. The company already has planning permission to build self-storage warehouses on three sites. But chief executive James Gibson announced with May's annual results that he was putting the store expansion programme on hold after the Chiswick site opened. He wants to use the spare cash flow - after paying decent and rising dividends - to reduce net debt to £245m-£260m by 2014-15 (from £283m at present), thereby containing debt costs at about a quarter of pre-interest cash flows, even as the interest rate rises. Meanwhile, the company will try to grow by filling up its existing stores, rather than building new ones on the pre-recession trajectory. The second issue is that customers will probably start having to pay VAT. Self-storage is currently exempt from sales tax, just as commercial property rents are. But chancellor George Osborne announced he was changing the rule in this year's Budget, subject to a consultation process now under way. It won't affect Big Yellow's business customers, who occupy 35 per cent of store space, as they can reclaim VAT. Moreover, Big Yellow will be able to reclaim about £18m of tax paid on capital expenditure if the measure is introduced, which will help offset any negative impact on its profits. But the extra 20 per cent on the cost of providing self-storage services will still squeeze margins and boost prices, dampening demand from customers.
Growth potential usually comes at a price on the stock market. But Big Yellow's shares are hardly expensive. True, they trade on about 15 times expected earnings for the current year, which is above average. But those earnings are backed by a property portfolio worth 380p a share, net of debt - 29 per cent more than the share price. In the crudest terms, that means the company could be broken up and generate a 29 per cent profit - perhaps the most basic indicator of value investors know. This is a simplistic metric in Big Yellow's case because the value of its estate is more theoretical than that of other property companies - the UK self-storage sector is too immature to have a liquid market of prime properties that surveyors can use as evidence for valuations. But it does suggest the company's shares are undervalued in the long term. There are two wrinkles in the growth outlook, though. First, it has to refinance a £225m debt package this year in the toughest financing environment in living memory. Having obtained a 15-year, £100m loan from Aviva at a fixed rate of 4.9 per cent in April, the company shouldn't struggle to find a lender. But its cost of debt - currently very low at 3.7 per cent - will probably rise, eroding profits.
The UK's economy is about 4 per cent smaller than it was at its 2008 peak, but Big Yellow's underlying pre-tax profit has risen 58 per cent over that time. This can be explained largely by industry and geography: it lets storage units in big purpose-built sheds to consumers and businesses - a young sector now gaining traction - and it operates mainly in London, which is growing at the expense of other regions. With neither trend showing any sign of changing, it seems safe to assume Big Yellow will continue to grow faster than the wider economy. The company's operational performance this year has demonstrated its potential. Even as the UK slipped back into recession, Big Yellow increased both occupancy and storage rates. Rents increased 1.9 per cent over the quarter to the end of June, while like-for-like occupancy rose from 63.5 per cent to 67 per cent. Finding very visible sites - such as on the A4 in Chiswick, where it opened its newest store in April - and plastering them with its big yellow branding, may be one reason for the company's success. Another is its investment in online marketing - more than four-fifths of its customers come from the website. Marketing is all-important because self-storage is under-used in the UK, relative to Australia and the US, even though Britons live in smaller homes. There's only about half a square foot of self-storage space for every UK citizen, compared with 1.1 square foot in Australia and 7.4 square feet in the US.
However, the firm said that strong revenue growth in the three months to the end of June would help mitigate the impact of the tax hike. It said total revenue for its 54 wholly-owned stores was £16.9m, up 10% on the previous year. Like-for-like revenue per available foot was £20.45 for the quarter, an increase of 10%. Total revenues from its 12 partnership stores was up 36% to £1.9m. "We are encouraged by the continuing strong performance of this business," said Chief Executive James Gibson. "This growth is being driven by our London, South East and large metropolitan focus, coupled with the continued investment we are making in our store operations, market leading brand and online platform."
Big Yellow Group said its focus on London and the South East had helped it grow revenues ahead of expectations in the first quarter. But with the introduction of VAT on self storage from October set to weigh on profits, the firm said that it was considering legal action to stop it. "HM Treasury is pressing ahead with plans to introduce VAT and we expect the implementation to be confirmed following approval of the Finance Bill in Parliament later this month," Big Yellow said. "We have received a legal opinion from a leading tax counsel that there may be grounds to challenge the decision, and we are currently considering our legal options." Any appeal to tax commissioners cannot take place until after the VAT hike comes in.
Tempus in the Times gives an interesting exposition of the business model behind the Big Yellow storage company. The firm takes the view that the only viable market in the UK is London and the south east. It won’t be building any more warehouses in the near future and will simply be run for cash and dividends. The current yield is 6.7% and with a large number of new customers proving the demand is there, Big Yellow is a buy.
Espirito Santo downgrades Big Yellow Group from neutral to sell, target price 239p.
CONT In our half year statement for the period ended 30 September 2011 the Board indicated that following the completion of our Chiswick store in May this year, capital expenditure would be largely suspended for the time being. That decision is now under review for the reasons set out below. The proposed VAT change would see a significant reduction in the cost of construction of new stores given that VAT on the construction costs would be recoverable. Furthermore the Group would be entitled to a repayment of previously unrecovered VAT on past construction expenditure, which we believe would be sufficient to fund the £14.3 million construction cost of new stores on the three sites that the Group currently owns at Gypsy Corner and Enfield (both in London), and in central Guildford. This would have the desirable effect of turning fallow assets into income producing contributors to the Group. This is particularly relevant on these London/London proximate stores which we believe would break even at circa 25% occupancy and be cash flow contributors within a year of opening. Notwithstanding the fact that the Group's debt is relatively low, we believe a further modest reduction is appropriate and that therefore remains our core ambition in the short term. The phased construction of these stores partially financed from the reimbursement of VAT would not significantly change the pace of the debt reduction programme.
Pre-close statement for the year ended 31 March 2012 Following last week's budget announcement on the proposed changes to the VAT status of self storage from 1 October 2012, the Board of Big Yellow Group PLC (the "Group") believes it is appropriate to update shareholders on the Group's progress by way of a pre-close statement this year. As we stated in last week's announcement, it is our intention to actively engage in the consultation process with HMRC. The Group is pleased to announce, with six trading days remaining in the final quarter of its financial year, that for the first time since the onset of the economic downturn in 2007, the occupancy in the Group's wholly owned store portfolio is above the high enjoyed in the previous September, thus recouping all the normal seasonal occupancy losses incurred in the December quarter. We now look forward to our traditionally busiest trading period from a new all-time high of occupied space. Growth in the quarter to date across our 53 wholly owned stores is 86,000 sq ft, compared to 41,000 sq ft for the same quarter last year. The occupancy of our 32 established store portfolio is currently 74.0%, and, excluding our newly opened store at New Cross, wholly owned store occupancy is 64.0%, compared to 63.4% at 30 September 2011 and 59.3% at 31 March 2011. The 12 stores within Big Yellow Limited Partnership have grown in occupancy by 21,000 sq ft in the quarter to date, and are now 42.6% occupied. We expect full year earnings to be in line with market expectations. The proposed changes to the VAT status is an industry wide issue and this, together with the current levels of demand we are experiencing, gives us increased confidence that our previously articulated strategy of wholly or substantially mitigating the impact of those changes has a reasonable chance of success.
http://www.investegate.co.uk/Article.aspx?id=201203260700250195A
Come on Big Yellow -------- Back to £5 plus