(Alliance News) - Big Yellow Group PLC on Tuesday reported a sharp jump in annual profit, on property revaluations, but expects further growth - believing the coronavirus will lead to "structural benefits" that benefit the company.
In the year to March 31, the self-storage company recorded pretax profit of GBP265.8 million, up sharply from GBP93.4 million the year before. Big Yellow made a GBP189.3 million gain on investment property revaluations, up sharply from GBP23.2 million the year before.
Revenue improved 4.6% year on year to GBP135.2 million from GBP129.3 million, with store revenue up 5.7%.
Store maximum lettable area grew 5.2% to 4.9 million square foot, with closing occupancy up 11% year to year to 4.2 million - giving it an occupancy of 85.2% versus 80.7% the year before.
Big Yellow is targeting 90% occupancy.
Average net achieved rent per square foot was up 1.1% to GBP28.16.
Executive Chair Nicholas Vetch said: "We can have no complaint as to the performance of the business over the last year. Risks remain and therefore, as always, we remain cautious. There are, however, reasonable grounds to have confidence in our business model having navigated two external crises of considerable proportion since the Global Financial Crisis."
Big Yellow declared a final dividend of 17.0 pence, up 1.8% from 16.7p, giving it a total dividend of 34.0p - up slightly from the 33.8p payout the year before.
"This pandemic has accelerated many structural changes that were already occurring, such as the move to online retailing and an increase in working from home facilitated by technological advances. These developments, combined with the shortage of quality flexible mini-warehousing space, from which to operate small scale storage and e-fulfilment is helping to drive our demand. We believe these are long-term trends," Vetch continued.
He added: "The structural need for self storage is now firmly embedded and so, put simply, we are building more of it focussed on our core areas of London, its commuter towns, and major cities where the barriers to new supply remain high. This increase in capacity, combined with the cash flow growth we can derive from our existing portfolio, given its increased pricing power, will drive performance over the next few years."
Shares in Big Yellow Group were down 0.5% in London on Tuesday morning at 1,308.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com;
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Big Yellow (BYG)