Solid quarter, tough outlook for Safestore

Self storage company Safestore revealed a 5.4% increase in third quarter revenue but it remains cautious about the fragile economic conditions and the potential impact on consumer confidence.The group said it was likely to see higher levels of vacancies over the next two quarters following strong occupancy growth in the third quarter. Revenue for the quarter ended 31 July 2011 was £24.1m, up 5.4% over the same quarter in 2010 and up 7.3% from the second quarter.Total revenue per available foot ('RevPAF') for the third quarter was £19.25, an increase of 2.1% over the same time a year earlier.Average self storage rental rate for the quarter was £25.91 per sq ft, 2.9% higher than the previous year and 1.5% lower than the second quarter of 2011."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," Safestore said in a company update.Closing occupancy at 31 July was 3.15m square feet; an overall occupancy level of 63.2% of maximum lettable area, or MLA compared to 59.4% in 2010.Chief Executive Officer Peter Gowers added, "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."However he warned that cost pressures do remain challenging, particularly on utilities and local business rates but overall, the group is confident that the business remains well positioned to weather the prevailing economic conditions.---CJ Safestore