Last checked at 26 Feb 2014 07:00
26 February 2014
Safestore Holdings plcFirst quarter trading update for the period 1 November 2013 to 31 January 2014
Trading in line with expectations
Group Operating Performance | Q1 2014 | Q1 20132 | Change | Change- CER1 |
Revenue (£'m) | 23.8 | 23.9 | (0.4%) | (1.0%) |
Closing Occupancy (let sq ft- million) 3 | 3.26 | 3.18 | 2.7% |
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Closing Occupancy (% of MLA) | 64.2% | 61.8% | +2.4ppts |
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Average Storage Rate (£) | 24.18 | 24.69 | (2.1%) | (2.8%) |
Highlights
· Group Revenue trends improving with Q1 2014 revenue broadly in line with Q1 2013
· French business continues good performance with CER Revenue up 5.9% on Q1 2013 with further improvement in rate and occupancy
· Closing occupancy3 improves by 2.7% on Q1 2013 at 3.26 million square feet ("sq ft")
Frederic Vecchioli, Chief Executive Officer commented:
"As indicated in our recent results statement, we have had an encouraging first quarter of the financial year with improvements in both the UK and France. Our French business has made a particularly good start and we are seeing improving occupancy and rate trends in the UK.
With our capital structure now rebalanced, our focus is on driving the operational performance of the business and I remain confident that the recent momentum in the business will continue as we progress through the financial year."
Business highlights
UK Trading Performance
UK Operating Performance | Q1 2014 | Q1 20132 | Change |
Revenue (£'m) | 17.1 | 17.7 | (3.5%) |
Closing Occupancy (let sq ft- million) 3 | 2.50 | 2.45 | 2.3% |
Closing Occupancy (% of MLA) | 62.2% | 59.9% | +2.3ppts |
Average Storage Rate (£) | 21.84 | 22.95 | (4.8%) |
Q1 is traditionally our quietest period when we would expect to lose occupancy but our performance has improved significantly in Q1 as compared to the prior year, supported by the improvements in the UK housing economy and recent initiatives to help improve the UK business. In Q1 2014 we lost 2% of our occupancy from Q4 2013 compared to the 4% quarter-on-quarter loss in the previous year. Our new let performance is c.5% up on the same quarter last year driven by increased enquiry generation.
Our key focus in the UK remains on our store performance and on improving the conversion of enquiries at an appropriate rate to maximise revenues. Our rate is down 4.8% on the prior year but fell by less than 1% from Q4 which is the lowest Q4 to Q1 reduction we have experienced in three years. The measures we are taking to improve rental rates will take some time to impact the entire customer base and feed through to revenues but we are encouraged by the improving trend.
Revenue in our 58 London/ South East stores was down 2.9% compared to Q1 2013, a slightly better performance than in the rest of the UK.
French Trading Performance
France Operating Performance | Q1 2014 | Q1 20132 | Change | Change- CER1 |
Revenue (£'m) | 6.7 | 6.2 | 8.3% | 5.9% |
Closing Occupancy (let sq ft- million) 3 | 0.76 | 0.73 | 4.1% |
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Closing Occupancy (% of MLA) | 71.8% | 68.9% | +2.9ppts |
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Average Storage Rate (£) | 31.69 | 30.41 | 4.2% | 1.8% |
Our French performance remains strong and our leading position in the heart of the demographically attractive Parisian market leaves us well placed to achieve further revenue growth.
In Q1 2014, our focus on growing occupancy at an appropriate rate is evident in our revenue, which has grown 5.9% year-on-year.
Our effective enquiry capture and in-store conversion resulted in double digit growth in new lets in Q1 2014 compared to the prior year, which forms the basis for the strong year-on-year occupancy growth of 4.1% in the quarter.
As in the UK, Q1 is normally a period in which we lose occupancy as compared to Q4 but, in contrast to prior years, Q1 2014 closing occupancy was down only c. 2,000 sq ft as compared to c.18,000 sq ft and c.11,000 sq ft in 2013 and 2012 respectively.
Our strategy of achieving an appropriate balance of rate and occupancy growth has been successful and we are now in the fourth consecutive quarter of year-on-year rate growth.
Outlook
We have strong market positions in both the UK and Paris and ample scope for further operational upside in our fully invested portfolio, with 1.7m square feet of space to fill. Following our recent successful capital raising and the material reduction to Group indebtedness we are now fully focused on improving the operational performance of the business.
Early results from the renewed focus on operational delivery are encouraging and when combined with an improving market outlook, Safestore is well positioned to make further progress in its business objectives in 2014 and beyond.
Ends
1 - 'CER' is Constant Exchange Rate
2 - Q1 2013 is the quarter ended 31 January 2013
3 - Closing occupancy excludes offices but includes 72,600 sq ft of bulk tenancy as at 31 January 2014 (31 January 2013 - 87,300 sq ft)
Enquiries
Safestore Holdings plc | 020 8732 1500 |
Frederic Vecchioli, Chief Executive Officer |
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Andy Jones, Chief Financial Officer |
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www.safestore.com |
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Instinctif Partners (formerly College Hill) | 020 7457 2020 |
Matthew Smallwood Mark Reed |
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Notes to editors:
· | Safestore is the UK's largest self storage group with 134 stores. They include 97 wholly owned stores in the UK and 25 wholly owned stores in the Paris region together with 12 stores under management in the UK.
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· | The Company provides storage to around 46,000 personal and business customers.
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· | Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.1 million sq ft (including the expansion pipeline stores) of which 3.26 million sq ft is currently occupied.
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· | Safestore employs around 550 people. |