TIDMSAFE
RNS Number : 1311X
Safestore Holdings plc
17 February 2017
17 February 2017
Safestore Holdings plc ("the Company")
Publication of Annual Report and Accounts 2016 and Notice of
2017 AGM
Safestore Holdings plc ("the Company") released its preliminary
announcement of annual results on 9 January 2017 ("Preliminary
Results Announcement").
Further to that announcement, the Company can now confirm that
it has submitted to the Financial Conduct Authority's national
storage mechanism its Annual Report and Accounts for the year ended
31 October 2016 and the Notice of AGM (as required by Listing Rules
9.6.1 and 9.6.3).
The Safestore Holdings plc 2017 Annual General Meeting will be
held at Brittanic House, Stirling Way, Borehamwood, Hertfordshire
WD6 2BT at 12'noon on Wednesday, 22 March 2017. In connection with
the AGM, the following documents have been posted to those
shareholders who have elected to receive hard copy communications,
or have otherwise been made available to shareholders today:
-- 2016 Annual Report and Accounts
-- Notice of the 2017 AGM
-- Form of Proxy for the 2017 AGM
The 2016 Annual Report and Accounts and the Notice of AGM are
available to view on the Company's website: www.safestore.com (in
compliance with Disclosure and Transparency Rule 6.3.5(3)).
The Company's Annual Report and Accounts for the year ended 31
October 2016 and the Notice of AGM will also shortly be available
for inspection at the Financial Conduct Authority's national
storage mechanism at www.morningstar.co.uk/uk/nsm.
The Appendix to this announcement contains additional
information for the purposes of compliance with the Disclosure and
Transparency Rules and should be read together with the Preliminary
Results Announcement which included, inter alia, a condensed set of
the Company's financial statements and extracts from the management
report. Together these constitute the information required by DTR
6.3.5 to be communicated to media in full unedited text. This
announcement should be read in conjunction with and is not a
substitute for reading the full Annual Report and Accounts
2016.
Appendix
Page and note references in the text below refer to page numbers
in the 2016 Annual Report and Accounts.
Statement of Directors' responsibilities
The following responsibility statement is extracted from the
Statement of Directors' Responsibilities on page 61 of the 2016
Annual Report and Accounts and is repeated here solely for the
purpose of complying with DTR 6.3.5. The statement relates to the
full 2016 Annual Report and Accounts and not the extracted
information presented in this announcement or the Preliminary
Results Announcement.
The Directors are responsible for preparing the Annual Report
and Financial Statements, the Directors' remuneration report and
the Group and parent company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union and the parent company financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice ("UK GAAP"), including Financial Reporting Standard 101
'Reduced Disclosure Framework' ("FRS 101"). Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of
the Group for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether IFRS, as adopted by the European Union, and
IFRS issued by the IASB and applicable UK GAAP including FRS 101
have been followed, subject to any material departures disclosed
and explained in the Group and parent company financial statements
respectively; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and the Group and enable them to
ensure that the financial statements and the Directors'
remuneration report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets
of the Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
A copy of the financial statements of the Group is placed on the
Company's website. The Directors are responsible for the
maintenance and integrity of statutory and audited information on
the Company's website at www.safestore.com. Information published
on the internet is accessible in many countries with different
legal requirements. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Directors' statement under the UK Corporate Governance Code
Having taken all matters considered by the Board and brought to
the attention of the Board during the year into account, the
Directors consider that the Annual Report and Financial Statements,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company's
performance, business model and strategy.
Directors' responsibility statement under the Disclosure and
Transparency Rules
Each of the Directors, whose names and functions are listed on
pages 30 and 31, confirm that, to the best of their knowledge:
-- the Group financial statements, which have been prepared in
accordance with IFRS as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and profit of
the Group; and
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
Group, together with a description of the principal risks and
uncertainties that it faces.
Disclosure of information to auditor
In accordance with Section 418 of the Companies Act 2006, each
Director in office at the date the Directors' report is approved,
confirms that:
-- so far as the Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the Director has taken all the steps that he or she ought to
have taken as a Director in order to make himself/herself aware of
any relevant audit information and to establish that the Company's
auditor is aware of that information.
The Annual Report on pages 1 to 103 was approved by the Board of
Directors and authorised for issue on 9 January 2017.
The Directors of Safestore Holdings plc are listed in the annual
report and accounts for the year ended 31 October 2016 and are
listed on the Safestore group's corporate website:
www.safestore.com. The Directors of Safestore Holdings plc as at
the date of this announcement are as follows:
Alan Lewis - chairman
Frederic Vecchioli - chief executive officer
Andy Jones - chief financial officer
Ian Krieger - senior independent director
Jo Kenrick - non executive director
Claire Balmforth - non executive director
Bill Oliver - non executive director
Principal risks and risk management
The risks and uncertainties set out below are extracted from
pages 14 to 16 of the 2016 Annual Report and Accounts and are
repeated here solely for the purpose of complying with DTR
6.3.5.
Risks and risk management
Risk management process
The Group faces a number of risks which, if they arise, could
affect its ability to achieve its strategic objectives. The Board
is responsible for determining the nature of these risks and
ensuring appropriate mitigating actions are in place for managing
them.
Effective risk management requires awareness and engagement at
all levels of our organisation. It is for this reason that risk
management is incorporated into the day-to-day management of our
business, as well as being reflected in the Group's core processes
and controls. The Board oversees the risk management strategy and
the effectiveness of the Group's internal control framework. Risks
are considered at every business level and are assessed, discussed
and taken into account when deciding upon future strategy,
approving transactions and monitoring performance.
Strategic risks are identified, assessed and managed by the Main
Board and the Audit Committee, with support from the Risk
Committee. They are reviewed at Board level to ensure they are
valid and that they represent the key risks associated with the
current strategic direction of the Group. Operational risks are
identified, assessed and managed by the Risk Committee and
Executive Team members, and reported to the Main Board and the
Audit Committee. These cover all areas of the business, such as
finance, operations, investment, development and corporate
risks.
The risk management process commences with rigorous risk
identification sessions incorporating contributions from functional
managers and Executive Team members. The output is reviewed and
discussed by the Risk Committee, supported by members of senior
management from across the business. The Risk Committee identifies
and prioritises the top business risks, which are then challenged
by the Board. The process focuses on the identification of key
strategic, financial and operational risks. The potential impact
and likelihood of the risks occurring are determined, key risk
mitigations are identified and the current level of risk is
assessed against the Board's risk appetite. These top business
risks form the basis for the principal risks and uncertainties
detailed in the section below.
Principal risks and uncertainties
The principal risks and uncertainties described are considered
to have the most significant effect on Safestore's strategic
objectives. This list is not intended to be exhaustive. Some risks,
however, remain outside of the Group's full control, for example
macro-economic issues, changes in government regulation and acts of
terrorism.
The key strategic and operational risks are monitored by the
Board and are defined as those which could prevent us from
achieving our business goals. Our current strategic and operational
risks and key mitigating actions are as follows:
Risk Current mitigation Developments since
activities 2015
------------------------- ----------------------------------------------------------------- ------------------------
Strategy
----------------------------------------------------------------------------------------------------------------------
The Group develops During the year,
business plans * The strategy development process draws on internal the Group has continued
based on a wide and external analysis of the self-storage market, its programme of
range of variables. emerging customer trends and a range of other operational
Incorrect assumptions factors. improvements
about the self-storage and maintained
market, or changes good trading momentum.
in the needs * Strengthened focus on yield management with regular
of customers, review of demand levels and pricing at each The Group's strategy
or the activities individual store. is regularly reviewed
of customers through the annual
may adversely planning and budgeting
affect the returns * The portfolio is geographically diversified with process, and regular
achieved by the performance monitoring covering the personal and reforecasts are
Group, potentially business customers by segments. prepared during
resulting in the year.
loss of shareholder
value. The addition of
twelve Space Maker
stores and five
new development
stores provides
greater geographical
diversification
to the Group's
store portfolio.
The level of this
risk is broadly
the same as last
year.
------------------------- ----------------------------------------------------------------- ------------------------
Finance Risk
----------------------------------------------------------------------------------------------------------------------
Lack of funding During the year,
resulting in * Funding requirements for business plans and the the Group extended
inability to timing for commitments are reviewed regularly as part its committed borrowing
meet business of the monthly management accounts. facilities by GBP45m
plans, satisfy in anticipation
liabilities or of the Space Maker
breach of covenants. * The Group manages liquidity in accordance with acquisition.
Board-approved policies designed to ensure that the
Group has adequate funds for its ongoing needs. The Group's LTV
decreased in the
year, due to increasing
* The Board regularly monitors financial covenant property values,
ratios and headroom. despite the net
increase in borrowings
to finance the
* The Group's banking facilities run to 30 June 2020 Space Maker acquisition
and the US private placement notes mature in three and new development
and eight years. stores.
The economic
uncertainty
following the UK's
decision in June
to leave the EU
has increased this
risk, as Brexit
may adversely affect
UK property values,
and therefore also
LTV, and may also
result in a decrease
in available funding.
------------------------- ----------------------------------------------------------------- ------------------------
Treasury risk
----------------------------------------------------------------------------------------------------------------------
Adverse currency Fluctuations in
or interest rate * Guidelines are set for our exposure to fixed and the Euro exchange
movements could floating interest rates and use of interest rate and rate during the
see the cost currency swaps to manage this risk. year introduced
of debt rise, greater volatility
or impact the to amounts reported
Sterling value * Foreign currency denominated assets are financed by in respect of our
of income flows borrowings in the same currency where appropriate. French business,
or investments. but the Group's
exposure to movements
* Use of derivative contracts to fix the exchange rate in the US Dollar
applicable to principal and interest payments on the rate is fully hedged.
US private placement debt.
The UK base rate
was reduced following
the EU referendum,
and is forecast
to remain low or
be cut even further.
The risk of adverse
interest rate
fluctuations
has therefore reduced
during the year.
------------------------- ----------------------------------------------------------------- ------------------------
Property investment and development
----------------------------------------------------------------------------------------------------------------------
Acquisition and The Group's investment
development of * Thorough due diligence conducted and detailed appraisal policy
properties that analysis undertaken prior to Board approval for was reviewed during
fail to meet property investment and development. the year.
performance expectations
or overexposure A robust due diligence
to developments * The Group's overall exposure to developments is process was undertaken
within a short monitored and controlled, with projects phased to prior to Space
timeframe may avoid over-commitment. Maker acquisition.
have an adverse
impact on the The capital
portfolio valuation, * The performance of individual properties is requirements
resulting in benchmarked against target returns. of development
loss of shareholder projects undertaken
value. during the year
have been carefully
forecast and monitored.
Although investment
and development
activity increased
during the year,
there has been
no significant
change to this
risk since last
year.
------------------------- ----------------------------------------------------------------- ------------------------
Valuation risk
----------------------------------------------------------------------------------------------------------------------
Value of our The Group's continuing
properties declining * Independent valuations conducted by experienced, operational
as a result of independent, professionally qualified valuers. improvements,
external market which are generating
or internal management increases to both
factors. * A diversified portfolio let to a large number of rate and occupancy,
customers should help to mitigate any negative impact and our ongoing
In the absence arising from changing conditions in the financial and lease re-gear programme
of relevant property market. are both contributing
transactional to increases in
evidence, valuations the Group's property
can be inherently * Headroom of LTV banking covenants is maintained and valuation.
subjective leading reviewed.
to a degree of The addition of
uncertainty. twelve Space Maker
* Current gearing levels provide sizeable headroom on stores and five
Breach of our our portfolio valuation and mitigate the likelihood new development
loan-to-value of covenants being endangered. stores provides
("LTV") borrowing greater diversification
covenant could to the portfolio
arise in the and has strengthened
event of declining the Group's balance
property values, sheet.
possibly triggering
default and/or However, the level
repayment of of this risk is
the facilities. viewed as having
increased since
last year due to
increased uncertainty
following the UK's
decision to leave
the EU.
------------------------- ----------------------------------------------------------------- ------------------------
Occupancy risk
----------------------------------------------------------------------------------------------------------------------
A potential loss Continuing operational
of income and * Personal and business customers cover a wide range of improvements, including
increased vacancy segments, sectors and geographic territories with focus on enquiry
due to falling limited exposure to any single customer. generation and
demand, oversupply conversion, marketing
or customer default, initiatives and
which could also * Dedicated support for improved enquiry capture. yield management,
adversely impact have generated
the portfolio increased occupancy
valuation. * Weekly monitoring of occupancy levels and close during the year.
management of stores.
The purchase of
the Space Maker
* Management of pricing to stimulate demand, when business and opening
appropriate. of five new stores
has diversified
the potential impact
* Monitoring of reasons for customers vacating and exit of underperformance
interviews conducted. of an individual
store.
* Independent feedback facility for customer As a result, the
experience. level of this risk
has reduced since
last year.
* The occupancy rate across the portfolio has continued
to grow due to flexibility offered on deals by
in-house marketing and the customer support centre.
------------------------- ----------------------------------------------------------------- ------------------------
Real estate investment trust ("REIT") risk
----------------------------------------------------------------------------------------------------------------------
Failure to comply The Group has remained
with the REIT * Internal monitoring procedures in place to ensure compliant with
legislation could that the appropriate rules and legislation are all REIT legislation
expose the Group complied with and this is formally reported to the throughout the
to potential Board. year.
tax penalties
or loss of its There has been
REIT status. no significant
change to this
risk since last
year.
------------------------- ----------------------------------------------------------------- ------------------------
Catastrophic event
----------------------------------------------------------------------------------------------------------------------
Major events Continuing focus
mean that the * Business continuity plans are in place and tested. from the Risk
Group is unable Committee,
to carry out with particular
its business * Back-up systems at offsite locations and remote attention to specific
for a sustained working capabilities. issues, such as
period, health fire risk and risks
and safety issues arising from customers
put customers, * Reviews and assessments are undertaken periodically working in units.
staff or property for enhancements to supplement the existing compliant
at risk, or the aspects of buildings and processes. Health and safety
Group suffers procedures have
a cyber-attack, been reviewed and
hacking or malicious * Monitoring and review by the Health and Safety updated.
infiltration Committee.
of websites. IT security reviews
These may result were performed
in reputational * Robust operational procedures, including health and across the Group.
damage, injury safety policies. These policies have been revised
or property damage, during the year, with a specific focus on fire The threat from
or customer prevention and safety procedures. cyber-attacks continues
compensation, to grow, so this
causing a loss risk has increased
of market share * Fire risk assessments in stores. since last year,
and income. and the risk management
and mitigation
* Specialist cyber-security advice and consultancy; actions have been
dedicated in-house monitoring and security review; developed accordingly.
external penetration testing.
* Limited retention of customer data.
------------------------- ----------------------------------------------------------------- ------------------------
Consequences of the UK's decision to leave the
EU ("Brexit")
----------------------------------------------------------------------------------------------------------------------
In June 2016, This is a new risk
the UK voted * The economic uncertainty is not a new risk for the which arose during
to leave the Group, but increases the likelihood of previously the year as a result
EU. The timeframe recognised risks, and is addressed under the finance of the outcome
for this to be risk, treasury risk and valuation risk categories of the UK's EU
achieved remains above. referendum.
unclear, which
has generated The Group is in
significant uncertainty * Potential changes to UK legislation or regulations as the process of
in the economy a result of or following Brexit may include changes developing contingency
and also with to the right of EU citizens to work in the UK, plans for the potential
regard to legislation changes to direct or indirect tax legislation or consequences of
changes both other legislation changes such as health and safety. Brexit.
before and after
Brexit.
------------------------- ----------------------------------------------------------------- ------------------------
END
For further information, please contact:
Safestore Holdings plc
Sam Ahmed, Company Secretary Tel: 020 8732 1500
About Safestore:
-- Safestore is the UK's largest self-storage group with 134
stores, comprising 109 wholly owned stores in the UK (including 63
in London and the South East with the remainder in key metropolitan
areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool
and Bristol) and 25 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 55,000 personal and business customers.
-- Safestore has a maximum lettable area ("MLA") of 5.64 million
sq ft (excluding expansion pipeline stores).
-- Safestore employs around 600 people in the UK and France.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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