Last checked at 12 Sep 2018 07:00
12 September 2018
Safestore Holdings plc
Third quarter trading update for the period 1 May 2018 to 31 July 2018
Accelerated UK revenue performance, Alligator and new stores delivering
Group Operating Performance | Q3 2018 | Q3 20172 | Change | Change- CER1 |
Revenue (£'m) | 36.4 | 32.9 | 10.6% | 10.3% |
Revenue (£'m)- year-to-date | 105.6 | 95.5 | 10.6% | 9.9% |
Closing Occupancy (let sq ft- million)4 | 4.77 | 4.20 | 13.6% | n/a |
Closing Occupancy (% of MLA)5 | 75.8% | 73.1% | +2.7ppts | n/a |
Average Storage Rate (£) | 25.32 | 26.06 | (2.8%) | (3.1%) |
Average Storage Rate (£)- year-to-date | 25.71 | 26.58 | (3.3%) | (3.8%) |
Group Operating Performance- like-for-like3 | Q3 2018 | Q3 20172 | Change | Change- CER1 |
Revenue (£'m) | 34.0 | 32.1 | 5.9% | 5.6% |
Revenue (£'m)- year-to-date | 98.3 | 93.1 | 5.6% | 5.0% |
Closing Occupancy (let sq ft- million)4 | 4.32 | 4.12 | 4.9% | n/a |
Closing Occupancy (% of MLA)5 | 77.8% | 74.5% | +3.3ppts | n/a |
Average Storage Rate (£) | 26.13 | 25.94 | 0.7% | 0.5% |
Average Storage Rate (£)- year-to-date | 26.52 | 26.46 | 0.2% | (0.4%) |
Highlights
· Group revenue in Q3 in CER1 grew by 10.3%
· Group like-for-like3 revenue in Q3 in CER increased 5.6% with strong performance in both geographies
o UK up 5.9%
o Paris up 4.3%
· Group like-for-like closing occupancy of 77.8% (up 3.3 ppts on Q3 2017)
· Group like-for-like average storage rate in Q3 in CER grew 0.5%
· Alligator stores performing in line with expectations
· Poissy store in west of Paris opened in August 2018
· New freehold site secured at Pontoise in North West Paris
Frederic Vecchioli, Chief Executive Officer commented:
"I am pleased to report a strong performance in the third quarter with increasing momentum in our UK business. Our top priority remains the significant organic growth opportunity represented by the 1.5m square feet of unlet space in our existing fully invested estate.
"Our recent openings in London (Paddington Marble Arch and Mitcham) and Paris (Combs-la-Ville), are performing ahead of their business plans. Alligator, the twelve-store portfolio acquired in November 2017, is performing in line with our expectations.
"I am confident that our leading market positions in the UK and Paris and our resilient business model continue to enable us to withstand any macro-economic uncertainty that may arise over the coming months. The company is in a strong position and remains on course to meet the Board's full year expectations."
Business highlights
UK Trading Performance
UK Operating Performance | Q3 2018 | Q3 20172 | Change |
Revenue (£'m) | 27.6 | 24.7 | 11.7% |
Revenue (£'m)- year-to-date | 80.0 | 72.0 | 11.1% |
Closing Occupancy (let sq ft- million)4 | 3.83 | 3.32 | 15.4% |
Closing Occupancy (% of MLA)5 | 74.7% | 72.5% | +2.2ppts |
Average Storage Rate (£) | 23.15 | 23.82 | (2.8%) |
Average Storage Rate (£)- year-to-date | 23.49 | 24.43 | (3.8%) |
UK Operating Performance- like-for-like3 | Q3 2018 | Q3 20172 | Change |
Revenue (£'m) | 25.3 | 23.9 | 5.9% |
Revenue (£'m)- year-to-date | 73.0 | 69.6 | 4.9% |
Closing Occupancy (let sq ft- million)4 | 3.40 | 3.24 | 4.9% |
Closing Occupancy (% of MLA)5 | 76.3% | 72.7% | +3.6ppts |
Average Storage Rate (£) | 23.83 | 23.60 | 1.0% |
Average Storage Rate (£)- year-to-date | 24.18 | 24.22 | (0.2%) |
The UK business grew revenue by 11.7% in the quarter with like-for-like revenue growing by 5.9%. Performance was strong across the UK with London and the South East up 5.3% and regional UK up 7.7%.
The third quarter is traditionally the busiest period in the year and the UK business added 208,000 sq ft of like-for-like occupancy since the end of Q2 (2017: 202,000 sq ft added). As a result, Q3 like-for-like closing occupancy, at 76.3%, increased by 3.6 percentage points compared to the prior year and by 4.6 percentage points compared to the position at the end of Q2.
Like-for-like average store rate in the UK improved in the period and was up 1.0% compared to Q3 2017. Rate has showed improving momentum as the year has progressed.
At the end of July 2018, we closed our leasehold Merton store and consolidated the majority of customers into our new 54,000 sq ft freehold Mitcham store, which opened in April 2018. The closed Merton store had an MLA of 19,000 sq ft and an annual EBITDA of c.£0.1m.
Taking into consideration the impact of the acquisition of Alligator combined with openings in Mitcham and Paddington Marble Arch offset by closures in Deptford, Merton, Leeds and Paddington in the last twelve months, revenue grew by 11.7% in the quarter. New stores, in the initial period after opening, are dilutive to occupancy and rate. However, all new stores and Alligator are trading in line or ahead of our business plans.
Paris Trading Performance
Paris Operating Performance | Q3 2018 | Q3 20172 | Change |
Revenue (€'m) | 9.9 | 9.4 | 5.3% |
Revenue (€'m)- year-to-date | 28.9 | 27.3 | 5.9% |
Closing Occupancy (let sq ft- million)4 | 0.94 | 0.88 | 6.8% |
Closing Occupancy (% of MLA)5 | 80.5% | 75.3% | +5.2ppts |
Average Storage Rate (€) | 38.69 | 39.45 | (1.9%) |
Average Storage Rate (€)- year-to-date | 39.28 | 40.18 | (2.2%) |
Revenue (£'m) | 8.8 | 8.2 | 7.3% |
Revenue (£'m)- year-to-date | 25.6 | 23.5 | 8.9% |
Paris Operating Performance- like-for-like3 | Q3 2018 | Q3 20172 | Change |
Revenue (€'m) | 9.8 | 9.4 | 4.3% |
Revenue (€'m)- year-to-date | 28.7 | 27.3 | 5.1% |
Closing Occupancy (let sq ft- million)4 | 0.92 | 0.88 | 4.5% |
Closing Occupancy (% of MLA)5 | 83.8% | 82.0% | +1.8ppts |
Average Storage Rate (€) | 39.23 | 39.50 | (0.7%) |
Average Storage Rate (€)- year-to-date | 39.73 | 40.20 | (1.2%) |
Paris had a solid quarter growing revenue by 5.3% compared to last year.
On a like-for-like basis the business grew revenue by 4.3% for the quarter driven by an occupancy increase of 4.5% compared to Q3 2017.
Like-for-like occupancy grew by 37,000 sq ft since the end of Q2 (2017: 49,000 sq ft) resulting in closing occupancy of 83.8%, up 1.8 percentage points compared to the prior year and by 3.4 percentage points over the peak season as compared to the position at the end of Q2.
Like-for-like rate in Paris was down 0.7% in the quarter but has, like the UK, shown improving momentum as the year has progressed. Excluding our lower priced suburban Emerainville store, which opened in September 2016, from the like-for-like stores the average rate was up 0.2% in the period.
As with the addition of all new stores to our estate, the impact of the new store opened in June 2017 at Combs-la-Ville is to dilute rate and occupancy in the initial period after trading commences. The store is trading ahead of our business plan.
Our new 80,000 sq ft freehold store at Poissy, in the west of Paris, opened after the period end in August 2018.
The impact of the 1% weakening of Sterling compared to Q3 2017 contributed to the Sterling equivalent total revenue increasing 7.3% on the prior year.
New Store- Paris
In June we exchanged contracts on a freehold 4.2 acre site in Pontoise, North West of Paris and recently received planning permission. We anticipate converting the existing building into a 65,000 sq ft store and that opening will be in the first half of 2019.
Outlook
Reflecting normal industry trading patterns, we anticipate a reduction in occupancy in Q4 compared to Q3. Similar trading trends have continued in each of the UK and Paris in the early part of Q4. The company is in a strong position and on course to meet the Board's full year expectations.
Ends
Notes
1 - CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, in order to present the reported results on a more comparable basis).
2 - Q3 2017 is the quarter ended 31 July 2017.
3 - Like-for-like information includes only those stores which have been open throughout both the current and prior financial years, with adjustments made to remove the impact of new and closed stores, as well as corporate transactions.
4 - Closing occupancy excludes offices but includes 27,250 sq ft of bulk tenancy as at 31 July 2018 (31 July 2017 - 36,250 sq ft).
5 - MLA is Maximum Lettable Area.
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 |
Guy Scarborough/Catherine Wickman |
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Notes to editors:
· Safestore is the UK's largest self-storage group with 145 stores at 31 July 2018, comprising 119 wholly owned stores in the UK (including 67 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool and Bristol) and 26 wholly owned stores in the Paris region.
· Safestore operates more self-storage sites inside the M25 and in central Paris than any competitor providing more proximity to customers in the wealthiest and densest UK and French markets.
· Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en Plus" ("UPP") in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic Vecchioli.
· Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250 index in October 2015.
· The Group provides storage to around 60,000 personal and business customers.
· As at 31 July 2018, Safestore had a maximum lettable area ("MLA") of 6.29 million sq ft (excluding the expansion pipeline stores) of which 4.77 million sq ft was occupied.
· Safestore employs around 650 people in the UK and France.