Last checked at 14 Jan 2010 07:00
14 January 2010
Big Yellow Group PLC
("Big Yellow" or "the Company")
Interim Management Statement
The Board of Big Yellow Group PLC, the UK's leading self storage brand, is pleased to provide the following update on trading for the third quarter ending 31 December 2009.
Quarterly highlights
51 Wholly Owned Stores
| ● | Total store revenue for the 51 stores was £14.3 million for the quarter | |
| - | Up 1% from £14.2 million for the same quarter last year | |
| - | Down 2% from £14.6 million for the quarter to 30 September 2009 | |
| - | This excludes management fees earned of £0.3 million (same quarter last year £0.3 million, quarter to 30 September 2009 £0.4 million) | |
| ● | Closing occupancy was 1,737,000 sq ft across all 51 stores at 31 December, representing 54% of their 3,228,000 sq ft total capacity | |
| - | Down from 1,746,000 sq ft at the same time last year (54% of total capacity) | |
| - | Down from 1,794,000 sq ft occupied at 30 September 2009 (56% of total capacity) | |
| ● | The 51 stores achieved an average net rent per sq ft over the quarter of £26.79 | |
| - | Up 2% from £26.37 for the same quarter last year | |
| - | Up 2% from £26.38 for the quarter to 30 September 2009 | |
| - | Net rent at 31 December 2009 of £27.02 per sq ft | |
Nine Big Yellow Limited Partnership ("Partnership") Stores
| ● | Closing occupancy was 97,000 sq ft across the nine Partnership stores at 31 December | |
| - | Up from 41,000 sq ft at the same time last year | |
| - | Up from 77,000 sq ft occupied at 30 September 2009 | |
| - | The maximum net lettable area is 552,000 sq ft. Seven of the Partnership stores, with a total capacity of 420,000 sq ft, opened in the 2009 calendar year. | |
| ● | The nine stores achieved an average net rent per sq ft over the quarter of £17.85 | |
| - | Up 7% from £16.63 for the same quarter last year | |
| - | Up 1% from £17.75 for the quarter to 30 September 2009 | |
| - | Net rent at 31 December 2009 of £19.11 per sq ft | |
Store update
In December we opened a Big Yellow store in Reading on the A33 Reading Relief Road; the store operates within the Partnership. The total number of Big Yellow stores now open is 60, of which nine are within the Partnership. There are no further openings planned for this financial year. At this stage, we have committed to the construction of three new stores to open in the next financial year, Eltham (March 2011) within the wholly owned Group and High Wycombe (June 2010) and Camberley (December 2010), both within the Partnership. We will consider committing to the construction of further stores in our London development pipeline during the current quarter.
Growth from lease-up and new stores
In the wholly owned open store portfolio at 31 December, we had spare built capacity of 1.5 million sq ft, having built and opened nine prime freehold stores in London since September 2007, with a total capacity of 660,000 sq ft. Our medium term aim is to raise the occupancy of these stores from currently 54% to 85%, an absorption of approximately one million sq ft. At today's rent this represents additional revenue of in excess of £27 million (excluding ancillary sales), which comes at minimal marginal cost.
We have a further seven wholly owned stores in the development pipeline, of which five have planning consent. These stores will provide additional capacity of approximately 465,000 sq ft.
Banking
In November we announced that Lloyds TSB Bank plc had joined the Group's core banking syndicate, with a £75 million participation. We are pleased to report that they have committed to increase their participation by £25 million to £100 million of the £325 million facility.
We are also pleased to report that HSBC Bank plc have committed to taking an initial £25 million participation in the Group's core banking facility. This lays a solid foundation for the future refinancing of the Group's core banking facility, which expires in September 2013.
We would like to thank both Lloyds and HSBC for their support.
James Gibson, Chief Executive Officer, commented:
"In our traditionally weakest trading quarter, we saw the anticipated fall in occupancy. That said, the performance in the month of December was ahead of our expectations, where we lost only 6,000 sq ft across all stores which was significantly better than the same month in 2008 and 2007 (when the occupancy falls were 31,000 sq ft and 28,000 sq ft respectively). We are also encouraged by the continued growth in achieved net rent per sq ft over the quarter, with a closing rent across the 51 wholly owned stores of £27.02 per sq ft, an all time high. This compares favourably with the same quarter last year where average net rents were down 3% percent over the quarter.
January has started reasonably well with modest occupancy growth and a significantly higher level of reservations than at the same time last year, in what is historically a slow trading month. Whilst current trading allows us to inch up our optimism we continue to believe that 2010 will remain a patchy year for most consumer facing businesses, including this one.
Nevertheless we have the market leading brand, a prime portfolio owned largely freehold, principally focussed on London and the South, and a strong balance sheet. This leaves us well positioned to benefit from any improvement in demand for self storage and we look forward to the seasonally more buoyant spring and summer trading period."
For further information, please contact:
| Big Yellow Group PLC | 01276 477 811 |
| Nicholas Vetch, Executive Chairman | |
| James Gibson, Chief Executive Officer | |
| John Trotman, Chief Financial Officer | |
| Weber Shandwick Financial | 020 7067 0700 |
| Nick Oborne/ John Moriarty |
Notes to Editors
Big Yellow Group PLC is one of the leading and most dynamic self-storage groups in the UK. It was founded in 1998 by Nicholas Vetch, Philip Burks and James Gibson and listed on AIM in May 2000, moving to the Official List of the London Stock Exchange in 2002.
Big Yellow has expanded rapidly and now operates (both directly and within Big Yellow Limited Partnership) from 60 stores, 53 in London and the South, and one each in Birmingham, Edinburgh, Leeds, Liverpool, and Nottingham with two in Sheffield. There are a further 10 stores in development and of the 70, 59 are held freehold and four long leasehold, together representing more than 90% of the portfolio. All the stores have the distinct yellow branding, in accessible main road locations, with the majority being within the M25 or in strong urban conurbations. When fully built out the portfolio will provide approximately 4.4 million sq ft of flexible storage space.
The Group has pioneered the development of the latest generation of self-storage facilities, which utilise state of the art technology and are located in high profile, main road locations. Its focus on the location and visibility of its buildings, coupled with excellent customer service, has created the most recognised brand name in the UK self-storage industry.
In November 2007, the Group formed a partnership with Pramerica Real Estate Investors Limited to develop stores outside the M25. Big Yellow and Pramerica will contribute equity to build 12 stores in the ratio of one thirds to two thirds respectively. The balance of the capital required is funded by way of a committed £75 million development loan facility provided by Royal Bank of Scotland, HSBC Bank and HSH Nordbank.
Big Yellow has previously entered into agreements with the Partnership to provide both development and operational management services on sites and stores. In consideration for these services, Big Yellow receives certain acquisition, planning, construction management and operating fees.
Big Yellow has an option to purchase the assets contained within the Partnership or the interest in the Partnership which it does not own exercisable from the 31 March 2013. On exit whether by way of exercise of the options as set out above or a sale to a third party, Big Yellow is entitled to certain promotes, which would result in Big Yellow sharing in the surplus created in the Partnership.