Big Yellow Regulatory News (BYG)

26 March 2020

Big Yellow Group PLC

("Big Yellow", "the Group" or "the Company")

Coronavirus update

At Big Yellow, the health and safety of our customers and staff is our principal priority. We have therefore limited the number of staff in a store at any one time to a maximum of two. We have also restricted access to receptions to our customers to one or two at a time so as to ensure social distancing guidelines. Most of our staff come to our stores by car, bike or walking, however there is a group that do use public transport, and we have taken all of them off public transport for the foreseeable future both for their safety and to help reduce pressure on the system.

Our staff have intensified the daily cleaning levels of our store areas, especially in the most commonly touched areas. It should be noted that our stores are not crowded places and have low intensity use.

We are in regular communication with our employees, updating them on Public Health England and the Government's latest advice.

We have also put in place contingency plans around reduced staffing levels to cope with increased absences as a result of self isolation or illness.

All Big Yellow stores are automated allowing access to our stores when they are unmanned for existing customers. The stores are also monitored externally out of opening hours to provide additional customer service and maintain security; this facility is continuing. Similarly, we have the ability for our customers to reserve a room, check-in online, and complete the move-in documentation without being in the store. This is assisting in minimising contact between customers and our staff.

Storage, mini-logistics and transport are an important part of the distribution network and as such have not been identified for closure at this stage by the Government. Events are unfolding at a rapid pace but our objective is to keep the stores open in so far as we can so that our business customers in particular can continue to operate. This is particularly important as most of them are small entities using our services as mini logistics for e-tailing and the like. Some are distributing medical and other essential supplies, and indeed we include the NHS and other government departments amongst our customers.

Recent trading

Over the past week we have seen an increase in demand from domestic and student customers urgently needing storage, as a result of the lockdown measures introduced. Although we have seen new business customers move in, that has been outweighed by some businesses directly affected by the closures choosing to move out. In addition, we have agreed a rent holiday or a deferral on a case by case basis for some customers, principally businesses. Our current like-for-like occupancy across the portfolio is 81.6% across 56,000 customers. Self-evidently given the levels of distress in the economy it would not be appropriate to make judgements about future trading until we have better visibility.  

Capital structure

The Group currently has cash and available undrawn committed facilities of £38 million. The average cost of debt on drawn facilities is 2.5% and the marginal cost of additional debt is 1.35%. £211.5 million of the Group's total drawn debt of £359 million is unhedged, which has benefited from the recent reductions in base rate.

The net effect is that proforma interest cover based on the current quarter is in excess of 9 times. The Group banking covenants are set at 1.5 times.

The Board has over the last few years worked to ensure a spread of debt maturity dates and to procure debt from a range of providers. The Group's earliest maturity is on its £70 million M&G loan in June 2023 and the debt has an average maturity of 4.7 years.

Whilst the UK is in lockdown, we are winding down construction on our three sites, Camberwell, Bracknell and Battersea, with a view to them being shut down safely in the next couple of weeks. The cost to complete of these three stores as of today is approximately £13 million, of which only £3 million will be payable in respect of works completed prior to the temporary close down. All further capital expenditure is entirely discretionary.

As shareholders would expect, the Board is considering a number of initiatives to conserve cash in the short term, including as stated a halt on discretionary capital expenditure. We will see how our trading patterns develop and a decision about the final dividend will be made in due course.

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