Last checked at 31 Aug 2010 07:00
FOR IMMEDIATE RELEASE 31 August 2010
Safestore Holdings plc
Third quarter trading update for the period ended 31 July 2010
A strong quarter with occupancy, rate and revenue growth
Safestore Holdings plc ("Safestore" or "the Company"), the largest self storage retailer in the UK and Paris, is pleased to report on its trading progress (unaudited) for the period ended 31 July 2010 ("Q3 2010").
·; Revenue for Q3 2010 was £22.9 million, an increase of 9% over both Q3 20091 and Q2 20102.
·; Revenue for the nine months to 31 July 2010 increased by 4.9% compared to the same period last year.
·; Occupancy grew by 154,000 sq ft in Q3 2010, 26% higher than Q3 20091.
·; Occupancy growth for the nine months ended 31 July 2010 was 206,000 sq ft, 86% higher than the comparable period last year (nine months ended 31 July 2009: 111,000 sq ft).
·; Closing occupancy at 31 July 2010 was 2.98 million sq ft. This represents an overall occupancy level of 59% against MLA3 (30 April 2010: 56%).
·; The occupancy level in mature stores at 31 July 2010 was 67%, up from 64% at 30 April 2010.
·; Average rental rate for the quarter at £25.17 per sq ft was 3.5% higher than Q3 20091 and 2.8% higher than Q2 20102.
At the time of the announcement of the interim results, we indicated we had seen a positive start to the second half of the year. Since this time this positive trading performance has continued and Safestore has experienced a record quarter for occupancy growth during which we have seen very good levels of new lets and enquiries and, as expected, there was a growing level of vacates which is a natural result of the stronger new lets trend year to date.
Occupancy at the end of the quarter was at its highest ever level at 2.98 million sq ft occupied. The rate per sq ft has also continued to improve on the comparable period in 20091 and against Q2 20102 despite the high level of new lets which results in a short term dilution of rates due to the initial offers with each new let.
The UK rental rate has been particularly pleasing, growing 5.2% compared to Q3 20091 and 4.1% against Q2 20102. The underlying rental rate in France has also continued to show growth in local currency terms but is marginally negative when translated to Sterling due to the lower prevailing exchange rate in 2009. As noted at the time of the interim results, we have hedged against this exchange rate impact for the next two financial years effectively fixing the Euro in the income statement at circa €1.15:1.
Safestore has opened two stores in the quarter; one in Paris and one in Crystal Palace. In addition, we disposed of the business centre at Digbeth at the end of the quarter. As a result we now have 117 stores trading (95 UK and 22 Paris) which, together with the pipeline stores, will deliver approximately 5.4 million square feet of storage space across the UK and Paris. We continue to look to selectively acquire new sites that meet our strict criteria. The management contract with Space Maker commenced at the start of the quarter and is performing in line with our expectations.
Steve Williams, Chief Executive Officer, commented:
"The results for the third quarter and year to date continue to demonstrate the strength of the business and our diverse customer base. We believe that the business has benefitted from our geographic spread throughout the UK as well as our Parisian business during a difficult economic period.
We have been particularly pleased with the increased level of enquiries from domestic customers as well as very stable levels of enquiries from business customers. Enquiries from the web continue to grow and we are seeing increasing new business from National accounts as well as from our strategic alliances. The strong performance and continued improvement in rental rate has also been pleasing, as has the growth in occupancy in our mature stores.
Quarter four is traditionally a weak quarter for occupancy growth due to high vacates as students return to university and as a result of the high new lets in the spring and summer of which a number will vacate. Despite this, we anticipate a continuing trend of rental rate improvement during the fourth quarter.
The economic environment remains challenging for the sector. Nevertheless, Safestore is the market leader with a well established diversification and low cost business model. In addition, it has the scope to grow organically by increasing overall occupancy and rates and a selective approach to new site acquisitions. As a result, this leaves us confident that Safestore can continue to take advantage of the favourable longer term trends for the self storage industry.
The Board of Safestore believes the Company remains on course to meet our expectations for the full year."
Ends
1 - "Q3 2009" is the three months ended 31 July 2009
2 - "Q2 2010" is the three months ended 30 April 2010
3 - MLA is maximumlettablearea and is calculated against the opening MLA for the period on 1 May 2010
Enquiries
| Safestore Holdings plc | 020 8732 1500 |
| Steve Williams, Chief Executive |
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| Richard Hodsden, Chief Financial Officer |
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| www.safestore.com |
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| Hudson Sandler | 020 7796 4133 |
| Nick Lyon / Wendy Baker |
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Notes to editors:
| ·; | Safestore is the UK's largest self storage group with 129 stores including 95 wholly owned stores and 12 stores under management throughout the UK and 22 stores in Paris.
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| ·; | The Company provides storage facilities to more than 44,000 domestic and business customers (up 10.3% since 30 April 2010).
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| ·; | Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.4 million sq ft (including the expansion pipeline stores) of which 2.98 million sq ft is currently occupied.
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| ·; | A strong balance sheet and operational cash flow allow Safestore to invest in continual improvements in the operational performance of its stores, in new store development and acquisitions where appropriate.
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| ·; | Safestore employs around 500 people. |