Last checked at 25 Feb 2015 07:00
25 February 2015
Safestore Holdings plcFirst quarter trading update for the period 01 November 2014 to 31 January 2015
Strong revenue growth, continuation of trading momentum
Group Operating Performance | Q1 2015 | Q1 20142 | Change | Change- CER1 |
Revenue- like-for-like (£'m) | 25.6 | 23.5 | 8.9% | 10.8% |
Revenue (£'m) | 25.6 | 23.8 | 7.6% | 9.3% |
Closing Occupancy (let sq ft- million) 3 | 3.38 | 3.26 | 3.7% | n/a |
Closing Occupancy (% of MLA) | 67.2% | 64.2% | +3.0ppts | n/a |
Average Storage Rate (£) | 25.07 | 24.18 | 3.7% | 5.6% |
Highlights
· A strong first quarter with Group like-for-like revenue in CER1 up 10.8% on Q1 2014
· Operational strategy across the UK is driving strong performance with occupancy (let sq ft) up 5.2% on Q1 2014, and closing occupancy as percentage of MLA up 3.1ppts to 65.3%
· UK rate in the quarter up 7.0% year-on-year and like-for-like revenue growth improving to 12.9%
· French business continues robust performance with like-for-like revenue in CER1 up 5.1% for the quarter driven by further improvement in rate
Frederic Vecchioli, Chief Executive Officer commented:
"The strong trading momentum reported at our preliminary results has continued throughout the first quarter of the new financial year. Our UK strategy, which we began to implement last year, of improving the conversion rate of enquiries into new lets whilst at the same time reducing discounting, continues to gain traction and is driving strong revenue growth.
We remain focused on the long term opportunity of filling the 1.65m square feet of unlet space. We will continue to leverage our scale and expertise in generating enquiries through the dominant internet channel and to drive the operational performance of the business. I am confident that the recent momentum in the business and the renewed confidence of our sales team will continue as we progress through the financial year."
Business highlights
UK Trading Performance
UK Operating Performance | Q1 2015 | Q1 20142 | Change |
Revenue- like-for-like (£'m) | 19.2 | 17.0 | 12.9% |
Revenue (£'m) | 19.2 | 17.1 | 12.3% |
Closing Occupancy (let sq ft- million) 3 | 2.63 | 2.50 | 5.2% |
Closing Occupancy (% of MLA) 4 | 65.3% | 62.2% | +3.1ppts |
Average Storage Rate (£) | 23.36 | 21.84 | 7.0% |
Momentum across the UK business continued through the first quarter with like-for-like revenue up 12.9%. Whilst the business typically experiences net vacates in the first quarter, reflecting seasonal industry trading patterns, occupancy levels remained significantly higher than the prior year throughout the period.
Our key focus in the UK remains our store operational performance and on improving the conversion of enquiries at an appropriate rate to maximise revenues. During the quarter our enquiries grew by 12.4% and our new lets by 35.7% reflecting continued strategic progress. At the end of the first quarter, UK occupancy was 65.3%, an increase of 3.1 percentage points on the prior year.
Our revised pricing policy continues to deliver rate growth and, for the first quarter, the average rate was up 7.0% on the same quarter last year and increased 1.8% on the quarter ending 31 October 2014.
Additionally, as part of the ongoing management of the Group's portfolio, we have completed the acquisition of the freehold of our leasehold High Wycombe store for £1.8m5 post the quarter end.
Paris Trading Performance
France Operating Performance | Q1 2015 | Q1 20142 | Change |
Revenue- like-for-like (€'m) | 8.2 | 7.8 | 5.1% |
Revenue (€'m) | 8.2 | 8.0 | 2.5% |
Closing Occupancy (let sq ft- million) 3 | 0.76 | 0.76 | 0.0% |
Closing Occupancy (% of MLA) 4 | 74.7% | 71.8% | +2.9ppts |
Average Storage Rate (€) | 39.43 | 37.98 | 3.8% |
Revenue- like-for-like (£'m) | 6.4 | 6.5 | (1.5%) |
Revenue (£'m) | 6.4 | 6.7 | (4.5%) |
Our Paris performance was robust in the first quarter. The average rate, on a CER1 basis, improved by 3.8% on the same quarter last year and was 2.6% higher than the quarter ended 31 October 2014. Despite the closure of our Landy store in October 2014, the sq ft occupied was in line with the prior year and, as a result, occupancy as a percentage of MLA4 was 2.9 percentage points higher than the prior year at 74.7%.
Like-for-like revenue growth for the quarter was 5.1% on a constant currency basis. The impact of a 7% weakening in the average Euro exchange rate has resulted in a 1.5% year-on-year reduction in sterling like-for-like revenue in the quarter. The weakening of the Euro will be partly mitigated by the foreign exchange swaps in place on €12m of Paris profitability, at an average exchange rate of 1.234. The benefit of these hedging arrangements will be reflected in EBITDA but not in the revenue line.
Our strategy of achieving an appropriate balance of rate and occupancy growth, together with our leading position in the heart of the demographically attractive Parisian market, has continued to deliver year-on-year progress.
Outlook
Our continued focus on improving our operational performance has been reflected in the pleasing revenue performance for the quarter, particularly in the UK.
We have strong market positions in both the UK and Paris and ample scope for further operational upside, with 1.65m square feet of space to fill. We remain fully focused on continuing our strategy of improving the operational performance of the business and are encouraged by the continued improvements to both occupancy, and in particular, rate trends across the business.
Ends
1 - CER is Constant Exchange Rate
2 - Q1 2014 is the quarter ended 31 January 2014
3 - Closing occupancy excludes offices but includes 85,000 sq ft of bulk tenancy as at 31 January 2015 (31 January 2014 - 72,600 sq ft)
4 - MLA is Maximum Lettable Area- Group MLA is currently 5.03m sq ft after adjusting for the closure of Enfield South and St Denis Landy
5 - Including costs and stamp duty
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 | 020 7457 2020 |
Matthew Smallwood Mark Reed |
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Notes to editors:
· | Safestore is the UK's largest self storage group with 121 stores. They include 97 wholly owned stores in the UK and 24 wholly owned stores in the Paris region. Safestore has 12 Spacemaker stores under management in the UK.
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· | The Company provides storage to around 48,000 personal and business customers.
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· | Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.03 million sq ft of which 3.38 million sq ft is currently occupied.
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· | Safestore employs around 525 people. |